DEEPIKA GUPTA

8/3/2019 DEEPIKA GUPTA

http://slidepdf.com/reader/full/deepika-gupta 1/76

A

Summer Internship Report

On

“A Market research on public perception to supplement

their income by doing a financial activity and a

comparative analysis”

At

Submitted In Partial Fulfillment For the Degree of

Post Graduation In MBEF

BUNDELKHAND UNIVERSITY, JHANSI

Submitted to:

Dr. Shamim Ansari

Submitted by:

Deepika Gupta

MBEF- Economics & Finance

Department

Bundelkhand University



DECLARATION

I hereby declare that this project entitled “A MARKET RESEARCH ON PUBLIC

PERCEPTION TO SUPPLEMENT THEIR INCOME BY DOING A FINANCIAL

ACTIVITY AND COMPARATIVE ANALYSIS” submitted to Bundelkhand

University,JHANSI in partial fulfillment of the requirements for the award of degree of Master Of Business Economics & Finance is a bonafide record of

work done by myself under the guidance of Dr.C.V Singh during the course

period of 2010-2012.

Place: - DEEPIKA GUPTA

Date: - MBEF ( Eco. & Finance

Department)

Bundelkhand University,

JHANSI

2



ACKNOWLEDGEMENT

The Summer Training at HDFC Life, JHANSI is my professional experience

with the insurance sector which enriched my knowledge about the

fundamental concepts of the sector. The numbers of people who have

influenced, supported and guided me through this project are numerous to

mention, but some merit special attention.

I would like to take this opportunity to express my gratitude towards

Mr.Vivek Dwedi, Circle Head, HDFC Life, JHANSI for giving me anopportunity to work as a summer trainee. I also express my sincere thanks

to Mr.Sanjeev Singh , Sales development manager, my project guide,

for their individual help and guidance without which this project wouldn’t

have been successful.

I would like to dedicate the project to my parents, brother and my

friends without their help and constant support this project would have not

been possible. I would also like to thank all the respondents of the survey

for their cooperation in providing me with the required information.

At last I would like to express my deepest sense of gratitude for the

people who have guided me and constantly been. Without their

involvement, this project would not have been accomplished. With me

throughout my training tenure

3



TABLE OF CONTENTS

1. EXECUTIVE SUMMARY

5

2. STATEMENT OF PURPOSE

6

3. OBJECTIVES

6

4. RESEARCH METHODOLOGY

7-9

5. RESEARCH PROBLEMS

10

6. INSURANCE INDUSTRY “A N OVERVIEW” 11-

202 7.COMPARISON OF UNIT LINKED INSURANCE

23-24

PLANS AND MUTUAL FUNDS

8. COMPETITIVE ANALYSIS

25-28

9. COMPANY PROFILE OF HDFC LIFE

29-39

10. COMPANY PROFILE OF LIC

40-47

4



11. ANALYSIS AND INTERPRETATIONS

48-60

12. SUMMARY OF FINDINGS

61

13. CONCLUSION

61

14. SUGGESTIONS AND RECOMMENDATIONS

62

15. BIBLIOGRAPHY

63

14. ANNEXURES

64-65

EXECUTIVE SUMMARY

HDFC Life insurance is the oldest life insurance company in the world. Thecompany is marketing life insurance product and unit linked investment

plans. From my research at HDFC Life, I found that the company faces lot of

competition from other private insurance companies like ICICI, Aviva, Birla

Sun Life and Tata AIG. It also faces tough competition from LIC. To compete

effectively HDFC Life could launch cheaper and more reasonable products

with small premiums and short policy terms. The ideal premium would be

between Rs 5000-Rs 25000 and the ideal policy term would be 10-20 years.

The project is divided into the following parts:

5



Profile of the competitors- Competitive analysis

Competitive analysis of HDFC Life with ICICI Prudential

Market study on customer perception towards insurance sector andarising job opportunities in the area.

HDFC Life must advertise regularly and create brand value of its product

and services. The market survey deals with the customer perception

towards the insurance sector, their willingness to supplement the income

by doing any extra activity, the motivation behind their work at place.

The report contains company profile of HDFC Life and the basic concepts of

insurance which includes scope, need and types of insurance. The report

also illustrates the comparison between insurance and mutual funds.

STATEMENT OF PURPOSE

Increase awareness about insurance

Make people aware about financial activity

Mode to supplement income

Factors leading to motivation

Level of competition in market

6



OBJECTIVES OF THE STUDY

To analyze the product details of HDFC Life Insurance companylimited and ICICI Prudential.

To find out whether customer will supplement their income by doingany extra activity.

To find out whether customer would supplement their income byproviding financial advice/service.

Factors that motivates employees behind their work at place

To find out the time that a prospect can spare to do an additional

activity.

7



RESEARCH METHODOLOGY

Research Design

Research Design is the framework or plan for a study which is used as a

guide in collecting and analyzing the data collected. It is the blue print thatis followed in completing the study. The basic objective of research cannot

be attained without a proper research design. It specifies the methods and

procedures for acquiring the information needed to conduct the research

effectively. It is the overall operational pattern of the project that stipulates

what information needs to be collected, from which sources and by what

methods.

Descriptive Research-Descriptive research, also known as statistical

research, describes data and characteristics about the population or

phenomenon being studied. Descriptive research answers the questions

who, what, where, when and how... The description is used for frequencies,

averages and other statistical calculations. the data description is factual,

accurate and systematic, the research cannot describe what caused a

situation. Thus, Descriptive research cannot be used to create a causal

relationship, where one variable affects another.

8



DATA COLLECTION AND

SAMPLING

Type of data collected

There are two types of data used; both primary and secondary data were

collected for the study. Primary data is defined as the data that is

collected from original sources for a specific purpose. Secondary data is

the data collected from indirect sources.

• Sources of data

Primary data : Questionnaire method or survey method,

telephonic interview, as well as personal interview was adopted for

collecting information .

Secondary data: Secondary data were collected from

internet, books, company brochures, company’s website,

competitors website, etc, newspaper articles.

Sampling

It is a process of obtaining information about an entire population by

examining only part of it.

The technique for the process is non-probability sampling. Under this I

have used judgmental sampling and then convenience sampling.

In judgmental sampling I first sought advice of my instructor, and

accordingly I choose the samples. After this I selected the items from the

universe as per convenience sampling.

9



• Sample size

The sample size for the survey conducted was 110 respondents.

DATA COLLECTION PROCESS

For primary data collection I approached various government offices, shopping

malls and shops of Lucknow and collected information from them. For this

questionnaire method was used. The basic objective for the preparation of this

questionnaire is to know about customer willingness to supplement their income

by doing any financial activity.

For secondary data I browsed various websites related to insurance sector, studiedmonthly fact sheets of different policies and investment plans and also gained

information from key information memorandum of selected companies.

Questionnaire

The questionnaire prepared was structure and non-disguised. The

questionnaire consist of five demographic variables which are- name,

age, sex, educational qualification, occupation, address, status and

contact number.

Ten questions forming the main part of questionnaire. The

questionnaire includes:-

10



Multiple choice questions

Dichotomous questions

Through the questionnaire an attempt has been made to find out the

prospects who would like to supplement their income by doing any

additional activity. The questionnaire is attached as an annexure.

11



RESEARCH PROBLEMS

• Large amount of competition

• Other brands are well advertised and have higher recall value.

• LIC is considered safer option.

• Face competition from banks and mutual funds.

• High premium policies are difficult to market.

• Incorrect perception about insurance.

• Interested prospects might have lack of time and postpone the call.

• Customers get defensive if you cold call.

• Short term plans are available only at large premium.

• Customers do not have risk appetite to invest in shares.

• Some prospects have already invested and are not interested for further

investment.

• Large amount of documentation.

• Lack of awareness

12



INSURANCE INDUSTRY “AN OVERVIEW”

13



INTRODUCTIONInsurance is a risk management technique primarily used to hedge against

the risk of a contingent, uncertain loss that may be suffered by those

individuals or entities who have an insurable interest in scarce resources,

by transferring the possibility of this loss from one interested person,

persons, or entity to another. The scarce resources referred to here fall into

three divisions: human resources, financial resources, and capital, or

tangible resources. In the context of insurance, scarce resources are also

known as "exposures," because they are "exposed" to perils, those things,

or forces, which cause destruction or reduction, in the usefulness, or value,

of an exposed resource. Human resources are thus exposed to perils such

as illness or death; financial resources to legal judgments that may result

from negligent acts, and capital resources to physical perils such as fire,

theft, windstorm, and vandalism, to name but a few. A hazard is the cause

of a peril. It is that thing or condition which increases the likelihood of a

peril. Thus perils and hazards are identified by the exposure that they

threaten. In the context of commercial trade, insurance is further defined as

the equitable transfer of the risk of a loss, from one entity to another, in

exchange for consideration, payment, in the form of a risk premium. The

insurance premium develops at an actuarially-determined rate. This rate is

a factor used to determine the amount of premium to charge for a certain

limit, and type, of insurance on the scarce resource. The premium can

further be viewed as a guaranteed, known, relatively small financial loss to

the insured, paid to the insurer, in exchange for the insurer's promise to

compensate (indemnify) the insured in the case of a loss to the insured

resource(s). The insured receives a contract, called the insurance policy,

which details the conditions and circumstances under which the insured will

be indemnified.

The business of insurance is related to the protection of the economic

values of assets. Every asset has a value. The asset would have been

14



created through the efforts of the owner. The asset is valuable to the

owner, because he expects to get some benefit may be an income or in

some other form. It is a benefit because it meets some of his needs. The

benefit may be an income or in some other form. In the case of a factory or

a cow, the product generated by it is sold and income is generated. In the

case of a motor car, it provides comfort and convenience in transportation.

There is no direct income. Both are assets and provide benefits.

Every asset is expected to last for a certain period of time during which it

will period of time during which it will provide the benefits. After that, the

benefit may not be available. There is a life-time for a machine in a factory

or a cow or a motor car. None of them will last for ever. The owner is aware

of this and he can so manage his affairs that by the end of that period or

life-time, a substitute is made available. Thus, he makes sure that the

benefit is not lost. However, the asset may get lost earlier. An accident or

some other unfortunate event may destroy it or make it incapable of giving

the benefits. We can classify insurance in these terms-

It is a system by which the losses suffered by a few are spread over

many,exposed to similar risks.

Insurance is a protection against financial loss arising on the happening of

an unexpected event.

It is essential that:

The calamity is either natural or unexpected

The insured person does not gain out of this arrangement

SCOPE OF INSURANCE:We all know that assets are insured, because they are likely to be

destroyed or made nonfunctional before the expected life time, through

accident occurrences. Such possible occurrences are called perils. Perils

are the events. Risks are the consequential losses or damages. The risk to

an owner of a building may be a few lakhs or a few crores of rupees,

depending on the cost of building, the contents in it and the extent of

damage. The risk only means that there is a possibility of loss or damage.

15



Insurance is done against the possibility that the damage may happen.

There has to be an uncertainty about the risk. The word “possibility”

implies uncertainty. Insurance is relevant only if there are uncertainties.

Insurance does not protect the asset. It does not prevent its loss due to the

peril. The peril cannot be avoided through insurance. The risk can

sometimes be avoided, through better safety and damage control

measures. It only tries to reduce the impact of the risk on the owner of the

asset and those who depend on that asset. They are the ones who benefit

from the asset and therefore, would lose, when the asset is damaged.

Insurance compensates for the losses- and that too, not fully. In conclusion

we can say that the scope of insurance is very broad and specific because it

reduces the losses and risk of owner of the assets due to perils. It also gives

supports to the person in the period of adverse situation. It insured

economic consequences. When a person saves, the amount of funds

available at any time is equal to the amount of money set aside in past,

plus interest. Insurance has no substitute and one more thing about the

insurance is that this is not similar to a hire purchase scheme. In the event

of death, the balance installments are not excused. They have to be paid by

the surviving family. There is a tax benefits, both in income tax and in

capital gins. Marketability and liquidity are better. Life insurance is not only

the best possible way for family protection there is no other way. The

term of life is hard but the terms of insurance are easy.

HISTORY OF INSURANCE:

The first insurance company in the United States underwrote fireinsurance and was formed in Charles Town , South Carolina, in

1732. Benjamin Franklin helped to popularize and make standard the

practice of insurance, particularly against fire in the form of perpetual

insurance. In 1752, he founded the Philadelphia Contribution ship for the

Insurance of Houses from Loss by Fire. Franklin's company was the first

to make contributions toward fire prevention. Not only did his company

warn against certain fire hazards, it refused to insure certain buildingswhere the risk of fire was too great, such as all wooden houses. In the

16



United States, regulation of the insurance industry is highly Balkanized,

with primary responsibility assumed by individual state insurance

departments. Whereas insurance markets have become centralized

nationally and internationally, state insurance commissioners operate

individually, though at times in concert through a national insurance

commissioners' organization. In recent years, some have called for a

dual state and federal regulatory system (commonly referred to as

the Optional federal charter (OFC)) for insurance similar to that which

oversees state banks and national banks.

The business of life insurance in India in its existing form started

in India in the year 1818 with the establishment of the Oriental LifeInsurance Company in Calcutta. The General insurance business in India,

on the other hand, can trace its roots to the Triton Insurance Company

Ltd., the first general insurance company established in the year 1850

in Calcutta by the British.

INDIAN INSURANCE MARKET-HISTORY : Insurance has a long history in India. Life Insurance in its current form

was introduced in 1818 when Oriental Life Insurance Company began

its operations in India. General Insurance was however a

comparatively late entrant in 1850 when Triton Insurance company set

up its base in Kolkata. History of Insurance in India can be broadly

bifurcated into three eras: a) Pre Nationalization b) Nationalization and

c) Post Nationalization. Life Insurance was the first to be nationalized in

1956. Life Insurance Corporation of India was formed by consolidating

the operations of various insurance companies. General Insurance

followed suit and was nationalized in 1973.

General Insurance Corporation of India was set up as the controlling

body with New India, United India, National and Oriental as its

subsidiaries. The process of opening up the insurance sector wasinitiated against the background of Economic Reform process which

17



commenced from 1991. For This purpose Malhotra Committee was

formed during this year who submitted their report in 1994 and

Insurance Regulatory Development Act (IRDA) was passed in 1999.

Resultantly Indian Insurance was opened for private companies and

Private Insurance Company effectively started operations from 2001.

MILESTONES:

Year Milestones in the life insurance business in India

1912 The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business

1928 The Indian Insurance Companies Act enacted to enable the government

to collect statistical information about both life and non-life insurance businesses

1938 Earlier legislation consolidated and amended to by the Insurance Act with

the objective of protecting the interests of the insuring public.

1956 245 Indian and foreign insurers and provident societies taken over by the

central government and nationalized. LIC formed by an Act of

Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore

from the Government of India.

Year Milestones in the general insurance business in India

1907 The Indian Mercantile Insurance Ltd. set up, the first company to transact

all classes of general insurance business

1957 General Insurance Council, a wing of the Insurance Association of India,

frames a code of conduct for ensuring fair conduct and sound business

practices

1968 The Insurance Act amended to regulate investments and set minimum

solvency margins and the Tariff Advisory Committee set up.

1972 The General Insurance Business (Nationalization) Act, 1972 nationalized

the general insurance business in India with effect from 1st January 1973.107 insurers amalgamated and grouped into four companies’ viz. the

18



National Insurance Company Ltd., the New India Assurance Company

Ltd., the Oriental Insurance Company Ltd. and the United India Insurance

Company Ltd. GIC incorporated as a company.

NEED FOR INSURANCE:

• Funding future goals through insurance

A wide range of vehicles are available to fund future financial goals.

These could be low risk-low return instruments like bank deposits and

small savings, or higher risk products such as equity, which can offer

potentially higher returns. Insurance scores over other investment

vehicles in the following aspects:

Certainty

Once a goal has been identified and a value for it has been

crystallized, an insurance policy is an excellent vehicle to fund the

goal. This is because one can rest assured that even in the

unfortunate event of death or even critical illness, the sum assured

will fund a future goal of the policyholder.

Tax efficient

Maturity benefits of most insurance policies are tax free under

Section 10 (10D) and the premium paid is eligible for deduction under

Section 80C of the Income Tax Act, 1961.

Flexibility

19



Insurance products, especially Unit Linked Plans, provide flexibility in

terms of asset allocation to suit specific risk appetites, policy

durations, premium payment terms and fund switching options.

Wider options

Depending on the time horizon of the goal, the return required and the

investor's risk appetite, a broad spectrum of asset allocations

between equity and debt is possible in a Unit Linked Plan. An investor

may tailor his policy to suit his requirement.

Liquidity

Most Insurance products offer good liquidity after the lock-in period to

take care of any emergency requirement of funds. But they do have

inherent deterrents in the form of charges to discourage unnecessary

encashment.

Earmarking

Very often an insurance policy is taken for a specific goal. This

therefore can become a deterrent against utilizing these funds for any

other purpose and also encourages continued contributions.

• Planning for unforeseen events

Insurance helps you to provide for contingent liabilities like

hospitalization, critical illness, debt redemption etc, in a cost efficient

manner.

Term insurance

20



Term insurance is the simplest and cheapest form of life cover, which

pays the sum assured on death. This is useful to simply provide for a

family's survival in the unfortunate event of demise of the bread

winner. This can also be used to cover repayment of any debt of a

policy holder by simply assigning the policy to the creditor. Upon

maturity or claim on the policy, the proceeds are paid to the creditor.

Loan Cover policies are a variant where the sum assured keeps

reducing in line with the loan balance.

Health covers

These policies provide cover against major health care expenses like

hospitalization, surgery, critical illness etc. The benefits could be in

the form of fixed pay outs on hospitalization or a lump sum on

diagnosis against some specified critical illnesses.

Accident benefit

This is usually an add-on cover over a basic policy and pays anadditional sum assured to the beneficiary in case of death due to

accident. Since accidental death is sudden and unforeseen, the family

could be faced with issues like relocation, debt servicing and other

requirement for funds.

• Planning for retirement

Indian life expectancy has improved dramatically over the years dueto availability of advanced medical facilities. However, a longer

working life may not really be possible due to occurrences of life-style

induced illness and high burn-out rate. The evolving demographic

balance with plenty of young talent becoming continuously available

may also be a deterring factor to a longer working life unless one is

self employed.

21



Consequently, our retirement life span could well be as long as our

active working life span. This means that we have to build a solid

corpus during our active life to maintain our life style for the long post

retirement life if we are to enjoy the true meaning of the word

"retirement". Pension Plans help us build up our savings during our

earning years and provide us a lump sum on retirement. This lump

sum can then provide us a retirement income by investing in an

annuity.

•

Provide post retirement income

The worst situation that a retiree can face is to run out of funds late

into retirement. Such a situation may force him to seek help from

friends / relatives or liquidate his fixed assets which essentially are a

compromise of self respect. This is where insurance offers the best

solution in the form of an annuity. Annuities bought from the

retirement corpus can either be used to provide regular post

retirement income for a fixed term or also for the entire life.

• Insurance as an inflation shield

Inflation lowers the purchasing power of money and makes a

dramatic cumulative impact over the long term. It reduces your real

income year after year as your cost of living keeps increasing. So, itmust be taken into account while framing financial goals. Insurance

products such as Unit Linked Plans help us combat the impact of

inflation on our financial goals by providing the option to invest in

equity, which is known to deliver one of the best returns from all

asset classes, over the long term. Ignoring inflation would result in

our savings falling short of the estimated value of future goals,

especially over the long term.

22



TYPES OF INSURANCE :

23



Comparison between Unit Linked Plans and Conventional

Plans

UnitLinked

Insurance Plan

Conventionalplans

TypeDescription

Unit LinkedInsurance Plansoffered by insurancecompanies allowpolicy holders todirect part of their

premiums intodifferent types of funds (equity, debt,money market,hybrid etc.) Here therisk of investment isborne by thepolicyholder.

Conventional Plansare traditionalinsurance plans. Theyusually invest in lowrisk return optionsand offer guaranteed

maturity proceedsalong with declaredbonuses.

KeyFeatures of Flexibility

Investment

Unit Linked Plansgive you flexibility toinvest as per yourrisk profile, financialcommitments andconvenience. Youcan choose to investeither in equity, or indebt or in hybridfund and evenchange yourinvestment strategy.

These plans do notallow you to chooseinvestment avenues.

Your funds areinvested as per thestrategy anddiscretion of thecompany.

Transparency

Most Unit LinkedPlans allow you totrack your portfolio.

They also regularlyintimate regardingthe percentage of the premium that isinvested along withthe charges levied.

You are also keptinformed about thevalue and number of fund units that youhold.

Your premiums areinvested in acommon 'with profits'

fund and thereforeyou cannot track yourindividual portfolio.

Maturitybenefitspayout

At the time of maturity you redeemthe units collected at

At the time of maturity you get thesum assured plus

24



the then prevailingunit prices. Someplans also offer youloyalty or additionalunits annually or at

the time of maturity.

bonuses, if applicablein the plan.

Partialwithdrawal

Unit Linked Plansallow you to makewithdrawals fromyour fund, providedthe fund does not fallbelow the minimumfund value andsubject to otherconditions.

Conventional plansdo not allow you towithdraw part of yourfund. Instead, somepolicies offer you thefacility to take a loanagainst yourinvestment.

Switchingoptions

Available. You canchange your

investment funddecision by switchingbetween the fundsas being offered bythe policy.

Not available sincethe the investment

decision is taken bythe insurancecompany.

Chargesstructure

Unit Linked Plansspecify the charges.under various heads.

These plans do notspecify the chargesinvolved.

SinglepremiumTop-up

Available. The singlepremium top-upfacility allows you to

invest an extraamount over andabove your regularpremiums in yourunit linked plan.

The top-up facility isnot available.

BenefitSnapshot

• Unit LinkedPlans give youflexibility of investment

• They allow youto track your

portfolio.• Unit Linked

Plans offer thebenefit of asingle premiumtop up whichallows you toinvest ad hocadditionalamounts

• Unit Linked

Plans allowpartial

• Conventionalplans offerfixedpremiumslinked to thesum assured.

• The maturity

benefits forthese plansinclude thesum assuredplus bonuses,

• if applicable

25



withdrawals,subject toconditions andswitchingbetween funds

by paying somecharges, if necessary.

• Unit LinkedPlans give youthe option of apremiumvacation.

COMPARISON OF UNIT LINKEDINSURANCE PLANS AND MUTUALFUNDS

Unit

LinkedInsura

nce Plan

Mutual funds

TypeDescription

Unit Linked Plansrefer to Unit LinkedInsurance Plansoffered by insurancecompanies. Theseplans allow investorsto direct part of their

premiums intodifferent types of funds (equity, debt,money market,hybrid etc.)

A mutual fund poolsthe money frominvestors and usesit to invest invarious securitiesaccording to a pre-specified

investmentobjective.

KeyFeaturesObjective

Unit Linked Plans arelong term plansoffering you a dualbenefit of insuranceand investment.

Mutual funds areideal investmenttool for the short tomedium term.

TaxBenefit

All Unit Linked Plansoffer tax benefitsunder section 80C.

Only investments intax saving funds areeligible for section

26



80C benefits.Switching Options

Unit Linked Plansallow you to switchyour investmentbetween the funds

linked to the plan. This enables you tochange the riskreturn.

No switching optionis available. If youare not satisfiedwith the

performance of thefund you can exitcompletely from thesame by paying exitcharges, if applicable

Additional Benefits

Some of the UnitLinked Plans give youan additional benefitor loyalty benefit by

issuing extra fundunits.

There are noadditional benefitsissued by mutualfunds.

Liquidity Unit Linked Planshave limited liquidity.One needs to stayinvested for aminimum period of time as specified inthe policy beforeredeeming the units.

You can easily sellmutual fund units(except for ELSSand funds that havea minimum lock-inperiod)

Charges

Structure

Charges in a unit

linked plan includemortality charges forthe life insuranceprovided. In addition,premium allocationcharge, fundmanagement chargeand administrationcharges areapplicable.

Mutual fund charges

include an entryload, the annualfund managementcharge and an exitload, if applicable

BenefitSnapshot•

Dual benefit of investment andinsurance

• Suitable for thelong term

• Option toswitch betweenthe funds ispermitted.

• Offers tax

benefits

•

Investmenttool suitablefor short tomedium term.

• Easy exitpossible.

Tax benefitavailable only ontax saving funds

27



COMPETITIVE

ANALYSIS28



PROFILE OF

COMPETITORS

Life Insurance Corporation of india

LIC has an excellent money back policy which provides for periodic

payments of partial survival benefits as long as the policy holder is alive.

20% of the sum assured is payable after 5, 10, 15 and 20 years and thebalance 40% is payable at the 20th year along with accrued bonus. For a 25

years term , 15% of the sum assured becomes payable after 5,10,15and 20

years and the balance 40% plus the accrued bonus becomes payable at the

25th year. An important feature of these types of policies is that in the

event of the death of the policy holder at any time within the policy term

the death claim comprises of full sum assured without deducting any of the

survival benefit amounts which have already been paid. The bonus is alsocalculated on the full sum assured. HDFC SLIC does not have a money back

29



policy. It could offer a money back plan and capture some portion of this

market. While marketing insurance products I found that many customers

wanted to purchase these plans.

LIC offers 66 different plans; plans are formulated for specific occasions –

whole life plans, term assurance plans, money back plan for women, child

plans, plans for the handicapped individuals, endowment assurance plans,

plans for high worth individuals, pension plans, unit linked plans, special

plans, social security schemes – diversified portfolio of products. HDFC SLIC

could diversify its product portfolio. It could add more plans for high worth

individuals and women.

Birla Sun Life

A US $30 billion corporation, the Aditya Birla Group is in the league of

Fortune 500 worldwide. It is anchored by an extraordinary force

of 130,000 employees, belonging to 40 different nationalities. The group

operates in 27 countries across six continents – truly India's first

multinational corporation.

Aditya Birla Group through Aditya Birla Financial Services Group (ABFSG),

has a strong presence across various financial services verticals that

include life insurance, fund management, distribution & wealth

management, security based lending, insurance broking, private equity and

retail broking The seven companies representing Aditya Birla Financial

Services Group are Birla Sun Life Insurance Company Ltd., Birla Sun Life

Asset Management Company Ltd., Aditya Birla Finance Ltd., Aditya Birla

Capital Advisors Pvt. Ltd., Aditya Birla Money Ltd., Aditya Birla Money Mart

Ltd, and Aditya Birla Insurance Brokers Ltd. In FY 2009-10, ABFSG reported

consolidated revenue from these businesses at Rs. 5871 Cr., registering a

growth of 43%.

ICICI Prudential

ICICI Prudential is a stiff competitor for HDFC SLIC. The company is amerger between ICICI Bank which is the biggest private bank in India and

30



Prudential Plc which is a global life insurance company. The company has

an investment plan which is market related – Invest ShieldLife. In this plan

even if the market falls, the premium will be returned to investors. It is a

guaranteed plan which ensures the company carefully nvests your money.

The stock market performance of ICICI Prudential is much better than HDFC

SLIC. The returns on the growth fund were 46.28%compared to the 42.70%

offered by HDFC SLIC. Customers are attracted by higher returns and this is

a plus point for Prudential.

The company is very well advertised. The advertisements are showcased in

movies, television, newspapers, magazines, bill boards, radio etc. The

company has an excellent brand ambassador – Mr. Amitabh Bacchan. His

promotion of the company builds trust and faith in the minds of our people.

Bajaj Allianz

Bajaj Allianz General Insurance Company Limited is a joint venture between

Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited) and

Allianz SE. Both enjoy a reputation of expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and

Development Authority (IRDA) certificate of Registration on 2nd May, 2001

to conduct General Insurance business (including Health Insurance

business) in India. The Company has an authorized and paid up capital of

Rs 110 crores. Bajaj Finserv Limited holds 74% and the remaining 26% is

held by Allianz, SE.

As on 31st March 2010, Bajaj Allianz General Insurance maintained its

premier position in the industry by achieving growth as well as profitability.

Bajaj Allianz has made a profit before tax of Rs. 180 crores and has become

the only private insurer to cross the Rs.100 crore mark in profit before tax

in the last four years. The profit after tax was Rs. 121 crores, 27% higher

than the previous year.

Max New York Life Insurance Company Ltd

31



Max New York Life Insurance Company Ltd. is a joint venture between

Max India Limited, one of India's leading multi-business corporations and

New York Life International, the international arm of New York Life, a

Fortune 100 company. The company has positioned itself on the quality

platform. In line with its vision to be the most admired life insurance

company in India, it has developed a strong corporate governance model

based on the core values of excellence, honesty, knowledge, caring,

integrity and teamwork.

Incorporated in 2000, Max New York Life started commercial operation in

April 2001. In line with its values of financial responsibility, Max New York

Life has adopted prudent financial practices to ensure safety of

policyholder's funds. The Company's paid up capital as on 31 st August,

2010 is Rs 1,973 crore.

Tata AIG Life Insurance Company Limited

(Tata AIG Life)

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture

company, formed by Tata Sons and AIA Group Limited (AIA). Tata AIG Life

combines Tata’s pre-eminent leadership position in India and AIA’s

presence as the largest, independent listed pan-Asia life insurance group in

the world spanning 15 markets in Asia Pacific. Tata Sons holds a majority

stake (74%) in the company and AIA holds 26% through an AIA Group

company. Tata AIG Life Insurance Company Limited was licensed to operate

in India on February 12, 2001 and started operations on April 1, 2001.

32



COMPANY PROFILEOF HDFC LIFE

INSURANCE COMPANY

LTD.

33



HDFC LIFE INSURANCE COMPANY

LIMITED

Introduction :

HDFC Life, one of India's leading private life insurance companies, offers

a range of individual and group insurance solutions. It is a joint venture

between Housing Development Finance Corporation Limited (HDFC),

India's leading housing finance institution and Standard Life plc, the

leading provider of financial services in the United Kingdom.

HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds

26.00% of equity in the joint venture, while the rest is held by others.

HDFC Life's product portfolio comprises solutions, which meet various

customer needs such as Protection, Pension, Savings, Investment and

Health. Customers have the added advantage of customizing the plans,

by adding optional benefits called riders, at a nominal price. The

company currently has 29 retail and 5 group products in its portfolio,

along with five optional rider benefits catering to the savings,

investment, protection and retirement needs of customers.

HDFC Life continues to have one of the widest reaches among new

insurance companies with more than 500branches servicing customer

needs in over 700 cities and towns. The company has a strong base of

Financial Consultants.

Parentage:

HDFC Limited

HDFC Limited, India's premier housing finance institution has assisted

more than 3.8 million families own a home, since its inception in 1977

across 2400 cities and towns through its network of over 289 offices. It has

international offices in Dubai, London and Singapore with service associatesin Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's and PIO's to own a

34



home back in India. As of March 2011, the total asset size has crossed more

than Rs. 1,32,727crores including the mortgage loan assets of more than

Rs.1,17,126 crores. The corporation has a deposit base of over Rs. 24,625

crores, earning the trust of nearly one million depositors. Customer Service

and satisfaction has been the mainstay of the organization. HDFC has set

benchmarks for the Indian housing finance industry. Recognition for the

service to the sector has come from several national and international

entities including the World Bank that has lauded HDFC as a model housing

finance company for the developing countries. HDFC has undertaken a lot

of consultancies abroad assisting different countries including Egypt,

Maldives, Mauritius, Bangladesh in the setting up of housing finance

companies.

Standard Life Plc.

Established in 1825, Standard Life Plc. is a leading provider of long term

savings and investments to around 6 million customers worldwide.

Â Headquartered in Edinburgh, Standard Life has around 9,000 employeesacross the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong

and mainland China. The Standard Life group includes savings and

investments businesses, which operate across its UK, Canadian and

European markets; corporate pensions and benefits businesses in the UK

and Canada; Standard Life Investments, a global investment manager,

which manages assets of over Â£157bn globally; and its Chinese and Indian

Joint Venture businesses. Â At the end of April 2011 the Group had totalassets under administration of Â£198.4bn. Standard Life plc is listed on the

London Stock Exchange and has approximately 1.5 million individual

shareholders in over 50 countries around the world.

35



Visions and Values:

Vision

'The most successful and admired life insurance company, which means

that we are the most trusted company, the easiest to deal with, offer the

best value for money, and set the standards in the industry'.

'The most obvious choice for all'.

Values

Values that we observe while we work:

• Integrity

• Innovation• Customer centric

• People Care "One for all and all for one"

• Team work

• Joy and Simplicity

36



Awards and Accolades

Received 2008 CIO Bold 100 and CIO Security Awards

Received PC Quest Best IT Implementation Award 2008

Board Members

• Mr. Amitabh Chaudhry

Managing Director and Chief Executive Officer

• Mr. Paresh ParasnisExecutive Director and Chief Operating Officer

37



• Ms. Vibha PadalkarChief Financial Officer

• Mr. Ashley RebelloChief Actuary and Appointed Actuary

• Mr. Vikram MehtaGeneral Manager, Sales and Marketing

• Mr. Prasun Gajri Chief Investment Officer

38



Associated Companies

HDFC Limited HDFC Bank

HDFC Mutual Fund HDFC Sales

HDFC ERGO General Insurance HDB Financial Services

HDFC Securities

Other Companies

• HDFC Trustee Company Ltd.• GRUH Finance Ltd.• HDFC Developers Ltd.• HDFC Property Ventures Ltd.• HDFC Ventures Trustee Company Ltd.• HDFC Investments Ltd.• HDFC Holdings Ltd.• Credit Information Bureau (India) Ltd• HDFC Securities• HDB Financial Services

39

http://www.hdfcfund.com/

http://www.hdfcergo.com/

http://www.hdfcsec.com/

http://www.hdbfs.com/

http://www.hdfcergo.com/

http://www.hdfc.com/others/popup/about_us/hlsil.htm

http://www.hdfcfund.com/

http://www.hdfcbank.com/personal/default.htm

http://www.hdfc.com/



PRODUCT RANGE

Savings Plans : Under the Savings Plans following plans are

available.

Endowment Assurance (EA) Plan:

It is a participating (with profits) insurance plans that offers the following features:

Provides financial support to the family by way of lump sum payment in case of

the unfortunate death of the life assured with in the term of the policy.

Provide a lump sum payment to the life assured on survival up to the maturity.

The lump sum mentioned is the basic sum assured plus any bonus additions.

Children’s Plan:

It is designed to provide a lump sum to the child at maturity. It also provides a

financial security to the child in future, even in case of insured parent’s

unfortunate death during the policy term. Children’s Plan receives simple

reversionary bonuses, which are usually added annually. This is flexible plan with

three options to choose from, depending on one’s requirement.

MONEY Back (MB) Plan:

It is participating (with profits) insurance plan that offers the following features:

Payment of cash lump sum, each of which is proportion of basic sum assured, at 5-

year interval during the term of policy.

On survival up to the maturity, a payment equal to the basic sum assured plus any

bonus addition less the cash lump sum paid earlier is provided.

In cash of the unfortunate death of the life assured within the term of the policy,

the basic sum assured plus any bonus addition is provided. This is over the above

the earlier payouts.

Protection Plans:

40



Under the protection plan the following are available:

Term Assurance (TA) Plan:

It is a plan under which the term assured is payable in case of the life assured

during the term of the contract. One can choose the lump sum that would replace

the income lost to one’s family in the unfortunate event of one’s death. Since this

non-participating (without profit) plan is a pure risk cover plan, no benefits are

payable on survival to the end of the term of the policy.

Loan Cover Term Assured (LCTA) Plan:

This provides a lump sum on the unfortunate death of the life assured during the

term of the plan. The lump sum will be decreasing percentage of the initial sum

assured. As the outstanding loan decrease as per the loan schedule, the cover

under the policy decrease as per the policy schedule. Since this is non-

participating (without profits) pure risk cover plan, no benefits are payable on

survival to the end of the term of the policy.

Retirement Plan:

Under the retirement plan the following plan is available:

Personal Pension Plan:

This plan is participating (with profit) plan which is basically a saving contract, designed

to provide an income for life after retirement. It provides a notional lump sum on

retirement, comprising of the sum assured plus any attaching bonus. Subject to the

prevailing regulations, part of this lump sum can be taken in the form of cash and the

rest converted to an annuity at the rate then offered by HDFC Standard Life Insurance

or with any other insurance company who will accept such business.

Health Plans:

HDFC critical careplan

HDFC surgicare plan

41



GROUP TERM INSURANCE PLAN

Whatever the business “ It's the people who make it a success. Everybody

requires some type of life insurance, especially when others depend on

them financially

The Group Term Insurance (GTI) plan meets this need and serves as an

ideal way for companies to reinforce their bond with their employees. The

sort of needs, you, as an employer need to cater to could be in form of:

• Employee benefits

• Cover for housing or vehicle loans given by you to your employees

• A GTI cover for future service gratuity liability to be taken along withthe HDFC Group Unit Linked Plan

The HDFC Group Term Insurance is a cost-effective plan that addresses

these needs. In addition you have the choice to opt for a GTI with an

experience discount feature , where a discount is given on future premiums

in case of favorable claim experience (subject to group size).

The HDFC group term insurance plan will have the following structure:

• One year renewable term insurance plan

• One master policy issued covering all members of the group

• Sum assured is payable on death (either due to natural causes or

accidents)

The plan covers death due to any cause; accidental or natural, and hence is

more comprehensive than Group Personal Accident Insurance. Several

multinational corporations, large Indian companies, foreign banks and

software companies have already chosen the HDFC Group Term Insurance,

an innovative product from HDFC Standard Life Insurance, to protect their

employees.

Optional Rider Benefits

42



• Accidental Death Benefit

• Total Permanent Disability

• Total Permanent and Partial Diability Benefit

• Critical Illness Benefit

• Terminal Illness Benefit

GROUP VARIABLE TERM INSURANCE

The Group Variable Term Insurance is a tailor made insurance policy for

third party institutions. HDFC Standard Life Insurance Company will offer

life insurance to customers of one or more of the third party's specificproducts in order that in the event of their death, there will be a lump sum

available.

The Group Variable Term Insurance:

• On death, will pay a lump sum known as a sum assured. The sum

assured varies over time in order that the customer receives the

cover that they need• Is a group policy

• Has no lengthy underwriting procedure

• Is simple to administer

The policy is without any participation in the insurer's profits.

GROUP UNIT LINKED PLAN

Gratuity Schemes

Most employers have a statutory obligation to pay a gratuity to its

employees on termination of employment. This gratuity is in the form of a

one-off payment made on termination of employment. It depends on salary

and number of years of service, so will therefore increase with time. The

HDFC Group Unit Linked plan is a new and innovative unit-linked plan,

43



which offer employers and gratuity scheme trustees a flexible and cost

effective way to fund this gratuity liability. The plan helps a corporate by:

• Building a fund systematically, which will be used to meet your future

gratuity liability

• Providing the opportunity to maximise investment returns and thus

provide the benefit in a cost-effective manner

GROUP UNIT LINKED PLAN

Leave Encashment Schemes

Many employers provide their employees with the option of encashing their

leave to their credit at the time of retirement or resignation. Accounting

Standard 15 requires that an actuarial valuation of a company leave

encashment liability be carried out and reflected in the books of accounts.

The HDFC Group Unit Linked Plan is an innovative plan, which offers

employers a flexible and cost effective way to fund this Leave Encashment

liability. The plan helps an organisation by:

• Creating a fund that can be built up to meet your future leave

encashment liability

• Providing the opportunity to maximise investment returns and thus

provide the benefit in a cost-effective manner

One factor that helps maximise investment returns is low charges. Our fund

management charges are the lowest in the industry today and thereforecan improve your long-term returns.

HDFC SL GROUP SAVINGS PLAN

As a company or an affinity group, you want to express to your group

members that you care for them, and want them to have stronger financial

future.

44



HDFC SL GROUP SAVINGS PLAN is a simple conventional group plan

wherein the company/affinity group is the policyholder & the group

members /employees/depositors are the scheme members.

This 'with profits' group plan would enable your scheme members to

• Provide financial protection to their loved ones

• Build savings in a simple & systematic manner

• Pay premiums only for a limited period of 5 years

• Is simple to administer

COMPANY PROFILE OF LIC

Introduction

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apartfrom its corporate office in the year 1956. Since life insurance contracts are

long term contracts and during the currency of the policy it requires a

variety of services need was felt in the later years to expand the operations

and place a branch office at each district headquarter. Re-organization of

LIC took place and large numbers of new branch offices were opened. As a

result of re-organisation servicing functions were transferred to the

branches, and branches were made accounting units. It worked wonderswith the performance of the corporation. It may be seen that from about

200.00 crores of New Business in 1957 the corporation crossed 1000.00

crores only in the year 1969-70, and it took another 10 years for LIC to

cross 2000.00 crore mark of new business. But with re-organisation

happening in the early eighties, by 1985-86 LIC had already crossed

7000.00 crore Sum Assured on new policies.

45



Today LIC functions with 2048 fully computerized branch offices, 109

divisional offices, 8 zonal offices, 992 satallite offices and the Corporate

office. LIC’s Wide Area Network covers 109 divisional offices and

connects all the branches through a Metro Area Network. LIC has tied up

with some Banks and Service providers to offer on-line premium

collection facility in selected cities. LIC’s ECS and ATM premium payment

facility is an addition to customer convenience. Apart from on-line Kiosks

and IVRS, Info Centres have been commissioned at Mumbai,

Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune

and many other cities. With a vision of providing easy access to its

policyholders, LIC has launched its SATELLITE SAMPARK offices. The

satellite offices are smaller, leaner and closer to the customer. The

digitalized records of the satellite offices will facilitate anywhere

servicing and many other conveniences in the future.

Objectives

• Spread Life Insurance widely and in particular to the rural areas and

to the socially and economically backward classes with a view to

reaching all insurable persons in the country and providing them

adequate financial cover against death at a reasonable cost.

• Maximize mobilization of people's savings by making insurance-linked

savings adequately attractive.

• Bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust, without losing sight of

the interest of the community as a whole; the funds to be deployed to

the best advantage of the investors as well as the community as a

whole, keeping in view national priorities and obligations of attractive

return.

46



• Conduct business with utmost economy and with the full realization

that the moneys belong to the policyholders.

• Act as trustees of the insured public in their individual and collective

capacities.

• Meet the various life insurance needs of the community that would

arise in the changing social and economic environment.

• 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.

Product and services

• Insurance Plan

The Whole Life Policy This plan is mainly devised to create an estate for the heirs of the

policyholder as the plan basically provides for payment of sum assured

plus bonuses on the death of the policyholder. However, considering the

increased longevity of the Indian population, the Corporation has

amended the above provision, thereby providing for payment of sum

assured plus bonuses in the form of maturity claim on completion of age

80 years or on expiry of term of 40 years from date of commencement

of the policy whichever is later.

The premiums under the policy are payable up to age 80 years of the

47



policyholder or for a term of 35 years whichever is later.

If the payment of premium ceases after 3 years, a paid-up policy for

such reduced sum assured will be automatically secured provided the

reduced sum assured exclusive of any attached bonus is not less than

Rs.250/-. Such reduced paid-up policy is not entitled to participate in the

bonus declared thereafter but the bonuses already declared on the

policy will remain attach, provided the policy is converted in to a paid-up

policy after the premiums are paid for 5 years.

The Whole Life Policy- Limited Payment

This is the best form of life assurance for family provision since it

enables the Life Assured to pay all the premiums during the ordinarily

vigorous and most productive years of life. He need not pay any

premium in the later stages of life if and when his conditions might

become adverse.

With Profits Limited Payments Policies do not cease to participate in

profits after completion of the premium paying period but continue to

share in the periodical Bonus Distribution until the death of the Life

Assured.

If the policyholder pays at least 3 years' premiums and then

discontinues paying any more premium, a reduced paid-up assurancepolicy comes into force.

Such a reduced paid-up Policy will not be entitled to participate in the

profits declared thereafter, but such Bonus as has already been declared

on the Policy will remain attached thereto. The premium paying term

under this plan is five years minimum and 55 years maximum.

The Whole Life Policy- Single Premium

48



This is the best form of life assurance for family provision since it

enables the Life Assured to pay the premium during the ordinarily

vigorous and most productive years of life, relieving him from the

necessity of making payments later in life when they might become a

burden.

With Profits Single Premium policies do not cease to participate in profits

after completion of the period for which premium has been paid ,but

continue to share in the periodical Bonus Distribution until the death of

the Life Assured.

Jeevan Anand

This plan is a combination of Endowment Assurance and Whole Life

plans. It provides financial protection against death throughout the

lifetime of the life assured with the provision of payment of a lump sum

at the end of the selected term in case of his survival.

Premium:

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

salary deductions as opted by you throughout the selected term of the

policy or till earlier death.

Bonuses:

This is a with-profit plan and participates 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. Bonuses will be added during the

selected term or till death, if it occurs earlier. Final (Additional) Bonus may

also be payable provided the policy has run for certain minimum period.

Jeevan Tarang

49



5½ % of the Sum Assured after the chosen Accumulation Period. The

vested bonuses in a lump sum are payable on survival to the end of the

Accumulation Period or on earlier death. Further, the Sum Assured, along

with Loyalty Additions, if any, is payable on survival to age 100 years or

on earlier death. The plan offers three Accumulation periods – 10, 15 and

20 years. A proposer may choose any of them. Premiums can be paid

regularly at yearly, half-yearly, quarterly or monthly intervals or through

salary deductions over the Accumulation Period. Alternatively, a Single

Premium can be paid on commencement of a policy.

Two Year Temporary Assurance Policy

The Convertible Term Assurance Policy

This plan of assurance is designed to meet the needs of those who are

initially unable to pay the larger premium required for a Whole Life or

Endowment Assurance Policy, but hope to be able to pay for such a

policy in the near future.

This plan would be found useful also in cases where it is desired to leave

the final decision as to the plan to a later date when, perhaps a better

choice could be made.

Policy holders get an option of converting an policy into endowment

assurance or limited payment whole life assurance.

Anmol Jeevan-I

Amulya Jeevan-I

50

On Death during theTerm of the Policy

Sum Assured

On Maturity Nil

On Death during the

Term of the Policy

Sum Assured

On Maturity Nil



Jeevan Saathi

This is an Endowment Assurance Plan issued on the lives of husband and

wife. The plan provides financial protection against death of both the

lives. It pays the maturity amount on survival of one or both the lives to

the end of the policy term. Premiums are payable yearly, half-yearly,

quarterly, monthly or through salary deductions as opted by you

throughout the term of the policy or till the first death of the lives

covered, whichever is earlier.

Bima account plans

As the name explains “LIC’s Bima Account – I ” is a simple non-linked plan

under which you can be covered without undergoing any medical

examination subject to certain conditions.

This plan offers you everything you think of an insurance plan should

provide:

1. Simplicity

2. Liquidity

3. Guaranteed minimum return

4. No medical examination

5. Transparent charges

6. Risk cover

Under this plan, the premiums paid by you, after deduction of charges, will

be credited to the Policyholder’s Account maintained separately for each

policyholder. The risk cover will be provided by deduction of mortality

charges from the Policyholder’s Account.

If all due premiums are paid, the amount held in your Policyholder’s

Account will earn an annual interest rate of 6% p.a. which will be

guaranteed for whole of the policy term. In addition to this guaranteed

51



return, if all due premiums are paid, your account may earn an additional

return depending upon the experience under this plan.

You will also have an option to pay additional (Top-up) premiums without

any increase in risk cover.

Loan facility will also be available immediately after first policy anniversary.

Endowment plans

This is a unit linked Endowment plan which offers investment cum

insurance cover during the term of the policy. You can choose the level of insurance cover within the limits, which will depend on the mode and level

of premium you agree to pay.

You have a choice of investing your premiums in one of the four types of

investment funds available. Premiums paid after deduction of allocation

charge will purchase units of the Fund type chosen. The Unit Fund is subject

to various charges and value of units may increase or decrease, depending

on the Net Asset Value (NAV).

Childrens plan

This plan is specially designed to meet the increasing educational,

marriage and other needs of growing children. It provides the risk cover

on the life of child not only during the policy term but also during the

extended term (i.e. 7 years after the expiry of policy term). A number of Survival benefits are payable on surviving by the life assured to the end

of the specified durations.

Plans for handicapped dependent

Plans for high worth individual

Money back plan

• Pension plans

52



LIC’s Pension Plus is a unit linked deferred pension plan, which provides you

a minimum guarantee on the gross premiums paid. The plan is without any

life cover.

You have a choice of investing your premiums in one of the two types of





• Unit plans

LIC’s Pension Plus is a unit linked deferred pension plan, which provides you

a minimum guarantee on the gross premiums paid. The plan is without any

life cover.

You have a choice of investing your premiums in one of the two types of





• Special plans

Health plus plan

Golden jubilee plan

Micro insurance plan

• Group schemes

Group (term) Insurance Scheme is meant to provide life insurance

protection to groups of people. Administration of the scheme is on group

basis and cost is low. Under Group (Term) Insurance Scheme, life insurance

cover is allowed to all the members of a group subject to some simple

insurability conditions without insisting upon any medical evidence. Scheme

offers covers only on death and there is no maturity value at the end of the

term.

53



• Withdrawal plans

ANALYSIS

AND

INTERPRETATION

54



Demographic Variables

• AGE GROUP OF THE RESPONDENTS

Age Group No. of Respondents

Percentage

18-25 20 1826-35 39 35

36-45 25 2446-55 19 17More than 55 7 6Grand total 110 100

Analysis : Out of the total 110 samples taken highest were in the age

group of 46-55(39,36%), 25 in the age group of 36-45, 20 in the age group

of 18-25 and 19 in the age group of46-55 and only 7 in the age group of

more than 55 respectively. This shows that mostly people in the age group

of 25-55 should be targeted.

55



• GENDER OF THE RESPONDENTS

Sex No. of Respondents

Percentage

Male 93 85Female 17 15Grand Total 110 100

• HIGEST QUALIFICTION OF THE RESPONDENTS

Qualificatio

n

No. of

Respondents

Percentage

10th 5 512th 7 6Graduation 61 55Postgraduation

37 34

Grand total 110 100

56



Analysis: Out of the total 110 samples taken highest were in the groupof graduation (61,55%), followed by post graduation 37, and only 5,7 in 10th

,12th standard respectively This shows that most of them had highestqualification as graduation.

• OCCUPATION OF THE RESPONDENTS

Occupation No. of Respondents

Percentage

Service 50 45Self employed

39 36

Student 6 5Professional 11 10House wife 4 4Grand total 110 100

57



Analysis: Out of the total 110 samples taken highest were in the servicegroup (50, 45%), 39 in the self employed group, 11 in the professionalgroup, 6 were students and only 4 in the house wife respectively. Thisshows that mostly people in the service group should be targeted primarilyfollowed by self employed.

Main Questions

Q1) For how long you are residing in this town?

No. of Years No. of Respondent

s

Percentage

Less than 1 15 141-2 18 162-3 4 33 yrs above 73 67Grand total 110 100

58



Analysis: Out of the total 110 samples taken highest were in the group

of more than 3 years(73,67%), 18 in the group of 1-2 years, 15 in the

group of less than 1 years and only 4 in the group of 2-3 years

respectively. This shows that mostly people surveyed are residing in the

town for more than 3 years and therefore can be targeted easily.

Q 2) How many people do you know well in the city?

No. of peopleknown inthe city

No. of Respondents

Percentage

Below 25 17 1525-50 10 950-100 12 11More than100

71 65

Grand total 110 100

59



Analysis: Out of the total 110 samples taken highest were in the group

of more than 100(71,65%), 17 in the group of below 25, 12 in the group of

50-100 and only 10 in the group of 25-50 respectively. This shows that

mostly people surveyed know more than 100 people well in the town and

therefore more customers can be targeted easily.

Q3) What is your average monthly income?

Averagemonthlyincome

No. of Respondents

Percentage

Less than5000

7 6

5000-10000 13 1210000-20000

34 31

20000-25000 14 13

60





No 65 59Grand Total 110 100

Analysis: Out of the total 110 samples taken only 45 or 41%

respondents have to support anyone financially. Rest all 65 respondents

don’t have to support anyone financially. Therefore those who need to

support anyone financially would like to supplement their income by doing

any extra activity.

Q5) Do you know any of your family members or friends,

who is working as Agent or Advisor for any insurance

company?

No. of Respondents

Percentage

Yes 48 44No 62 56Grand Total 110 100

62




respondents know whether their family member or friend is working for

insurance company as agent or advisor. Rest all 62 respondents don’t

know.

Q6) If ’yes’ do you know any idea about his /her role as

an “Agent”/”Advisor”?

No. of Respondents

Percentage


Analysis: Out of the total 110 sample taken only 45 or 41% respondents

know the role of their family member or friend as an agent or advisor in theinsurance company.

63



Q7) Would you like to supplement your income by doing

any activity?

No. of Respondents

Percentage



respondents would like to supplement their income by doing any extra

activity. Rest all 68 respondents do not want to earn extra besides their

present income. Therefore there is a scope of about 38% for the

recruitment of respondents as an agent or advisor for the insurance

company.

Q8) If you get an opportunity to supplement your income

by providing financial Advice/Service, would you go for

it?

64



No. of Respondents

Percentage

Yes 43 39

No 67 61

Grand Total 110 100

Analysis: Out of the total 110 samples taken only 39% respondents

would like to supplement their income by doing any financial

advice/service. Rest all 67 respondents do not want to supplement income

by providing financial services. Therefore there is a scope of about 39% for

the recruitment of respondents as an agent or advisor for the insurance

company.

Q9) How much time do you think that you can spare for

doing this additional activity that will fetch you an extra

income?


No. of Respondents

Percentage

2 hrs per day 94 852-5 hrs perday

11 10

More than 5hrs per day

1 1

Less than 5 0 0

65



hrs per week5-10 hrs perweek

0 0

More than 10hrs per week

4 4

Grand total 110 100

Analysis: Out of the total 110 samples taken 94 or 85% respondentswould be able to give 2 hours for an additional activity followed by 2-5 hrs

per day, 4respondents will be able to give more than 10 hours per week.

Therefore most suitable time assigned to do an additional activity will 2-5

hours.

Q10) What motivates you at your work place?


No. of Respondents

Percentage

Appreciation 18 16Service 16 15Money 27 25Comfort 30 27

Others 19 17Grand total 110 100

66



Analysis: Out of the total 110 samples taken 30 or 27% respondents

are mostly motivated by comfort at their workplace, 27 by money, 19 due

to other reasons ,18 by appreciation, and only16 by service. Therefore

comfort is the prime factor for employee’s motivation at workplace followed

by money.

67



SUMMARY OF FIDINGSOn the overall basis of various parameters considered it can be found that:

• People with high turnover would likely to take up investment plans.

• People with monthly turn over 10000-25000 are most interested to supplement

their income by doing a financial activity.

• Respondents are not well aware of the role played by their friends or family

member working in insurance industry; which shows a lack of insurance

awareness amongst people.

• Lack of information about income opportunity in financial sector.

• 2 hrs would be the best suitable time to do a financial activity to supplement

income.

• Employees are highly motivated by comfort and money at workplace.

CONCLUSION

With the largest number of life insurance policies in force in the world,

Insurance happens to be a mega opportunity in India. It’s a business

growing at the rate of 15-20 per cent annually . Together with banking

services, it adds about 7% to the country’s Gross Domestic Product

68



(GDP).The gross premium collection is nearly 2% of GDP and funds

available with LIC for investments are 8% of the GDP.

Even so nearly 65% of the Indian population is without life insurance cover

while health insurance and non-life insurance continues to be belowinternational standards. A large part of our population is also subject to

weak social security and pension systems with hardly any old age income

security. This in itself is an indicator that growth potential for the insurance

sector in India is immense.

A well-developed and evolved insurance sector is needed for economic

development as it provides long term funds for infrastructure development

and strengthens the risk taking ability of individuals. It is estimated that

over the next ten years India would require investments of the order of one

trillionUS dollars. The Insurance sector, to some extent, can enable

investments in infrastructure development to sustain the economic growth

of the country.

SUGGESTIONS AND

RECOMMENDATIONS

• Advertise about company and its product

• Motivates individuals to purchase products

• Create positive perception about insurance

• Promote insurance at college level and corporate houses

• Improve efficiency in operations

• Diversify product portfolio

69



• Bring out policies with small premium

• Attract youth of India to insurance sector

•

Provide peaceful environment at workplace

• Provide high return investment plans

• Deliver good customer services

BIBLIOGRAPHY

1. www.hdfclife.com

2. www.licindia.com

70

http://www.hdfclife.com/

http://www.licindia.com/

http://www.hdfclife.com/

http://www.licindia.com/



3. www.birlasunlife.com

4. www.icicipulife.com

5. www.bajajallianz.com

6. www.moneycontrol.com

7. www.irdaindia.com

8. www.google.com

71

http://www.birlasunlife.com/

http://www.icicipulife.com/

http://www.bajajallianz.com/

http://www.moneycontrol.com/

http://www.irdaindia.com/

http://www.google.com/

http://www.birlasunlife.com/

http://www.icicipulife.com/

http://www.bajajallianz.com/

http://www.moneycontrol.com/

http://www.irdaindia.com/

http://www.google.com/



ANNEXURE

QUESTIONNAIRE

Name of the person contacted: Sex:Male/Female

Age:

Address

Status: Single/Married Contact no. :

Educational qualification: 10th std/12thstd /Graduation/Post Graduation

Occupation: Service/ Self employed/Student/Professional/House wife

Q1. For how long you are residing in this town?

Less than a yr/1-2 yrs/2-3 yrs/3yrs &above

Q2.How many people do you know well in the city?

Below 25/25-50/50-100/100 & above

Q3. What are your hobbies and interests?

Q4. What is your average monthly income?

Less than 5000/5000-10000/10000-20000/20000-25000/

25000-30000/30000-40000/40000-50000/50000 & above

Q5.Do you need to support anyone financially?[Yes/No]

Q6. If ‘yes’ please help us with details of family members who need to befinancially supported?

Q7. Do you know any of your family members or friends, who is working asAgent or Advisor

72



for any insurance company?[Yes/No]

Q8. If ’yes’ do you know any idea about his /her role as an“Agent”/”Advisor”? [Yes/No]

Q9. Would you like to supplement your income by doing any activity?[Yes/No]

Q10. If ‘no’ please help us with the reason for saying so?

Q11. If you get an opportunity to supplement your income by providingfinancial Advice/Service, would you go for it?[Yes/No]

Q12. How much time do you think that you can spare for doing thisadditional activity that will fetch you an extra income?

2hrs per day/2-5 hrs per day/More than 5 hrs perday/ Less than 5 hrs

per week/5-10 hrs per week/ More than 10 hrsper week

Q13. What motivates you at your work place?Appreciation/Service/Money/Comforts in life/ Others

(Please specify)

Name of the surveyor:

Location:

Date:

73



74



75



Documents

DEEPIKA GUPTA