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CHAPTER-I

1.1 INTRODUCTION

LIFE INSURANCE IN INDIA

Life insurance in India made its debut well over 100 years ago. In our country, which is one
of the most populated in the world, the prominence of insurance is not as widely understood, as it
ought to be. What follows is an attempt to acquaint readers with some of the concepts of life
insurance, with special reference to LIC It should, however, be clearly understood that the following
content is by no means an exhaustive description of the terms and conditions of an LIC policy or Its
benefits or privileges.

For more details, please contact our branch or divisional office. Any LIC Agent will be glad
to help you choose the life insurance plan to meet your needs and render policy servicing.

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or his
nominee) on the happening of the event insured against. The contract is valid for payment of the
insured amount during:
 The date of maturity, or
 Specified dates at periodic intervals, or
 Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium periodically to
the Corporation by the policyholder.
Life insurance is universally acknowledged to be an institution, which eliminates 'risk',
substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate
event of death of the breadwinner.
By and large, life insurance is civilization’s partial solution to the problems caused by death.
Life insurance, in short, is concerned with two hazards that stand across the life-path of every
person:
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1. That of dying prematurely leaving a dependent family to fend for itself.

2. That of living till old age without visible means of support.

Customer satisfied with LIC service because the LIC totally concentrate customer relations and it
makes customers attract towards the LIC

 LIC moves towards better customer relations

 Plans to start a new portal for its policyholders

 Our Regional Bureau / Hyderabad September 07, 2005

Life Insurance Corporation of India (LIC) is embarking on a number of customer relationship

management initiatives to retain its foothold in the market, in the wake of private players inching
their way up in the life insurance sector.

The Insurance behemoth is planning to tie-up with a number of banks to enable a payment
gateway wherein the policyholders can make their premium payments via credit cards.

LIC is planning to start a new portal for its policyholders where a customer can log in, get
details on his/her policies, change the resident address when he/she shifts to a new place and even
take a printout of the income tax certificate. The portal is likely to be ready in a month’s
time.Besides, it has already started work on allotment of customer folio number to know each
customer's holding.

“The allotment of customer folio number for all our holders will still take a year’s time in
this zone,” H Nanda, regional manager, information technology, LIC (south-central zone), said.
“The electronic clearance system that we have launched at Hyderabad, Bangalore,
Vijayawada and Visakhapatnam, has been doing very well. Here the customer’s premium is
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automatically debited from his account at the time of payment,” he added. Shortly, the zone will also
see the launch of this system in Mysore, Mangalore and Hubli.
“This month, we will also be setting up five satellite branches in the zone, with two being in
Hyderabad and three in Bangalore,” A K Sahoo, regional manager (marketing), LIC (south-central
zone), said at a press conference organised on the occasion of the beginning of the golden jubilee
year for LIC.
Regarding the recently launched Bima Gold policy, a money-back policy with premium
payment options, the corporation plans to sell 15 lakh policies this year in the south central zone
with the national figure being one crore.
LIC also plans to launch three-four products this year with one of these being unit-linked
insurance plan in October. As on August 31, 2005, the zone has issued 12,47,795 policies under new
business.

OBJECTIVES OF THE STUDY

The main objective of this study is to carry on brief study on “Customer satisfaction survey
on insurance products of LIC
Other objectives of this project are as follows:
To identify the insurance needs of the Indian population withrespect to their emotional,
physical and financial conditions.
Comparative study of various insurance players in the market
To study the varied reasons of availing life insurance plans
To clearly understand the rationale behind the investment in policies of LIC and private
sector insurance companies
To test the awareness of customers on various aspects of life insurance policies offered by
LIC and other private sector insurance companies and find whether there is any relation
between them.
The prime objective of the study is to find out the level of satisfaction of a customer (policy
holders or beneficiary) so far as the settlement of claims.
To find out the procedure of claim policy holder or the beneficiary

ABOUT THE ORGANIZATION

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Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company stated by Europeans in Calcutta was the first life insurance company on
Indian Soil. All the insurance companies established during that period were brought up with the
purpose of looking after the needs of European community and Indian natives were not being
insured by these companies. However, later with the efforts of eminent people like Babu Muttylal
Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being
treated as sub-standard lives and heavy extra premiums were being changed on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in
the year 1870, and covered Indian lives at normal rates.

Starting as Indian enterprise with highly patriotic motives, insurance companies came tito
existence to carry the message of insurance and social security through insurance to various sectors
of society. Bharat Insurance Company (1896) was also one of such companies inspired by
natioalism. the Swadeshi movement of 1905-1907 gavwe rise to more insurance companies. The
United India in Madras, National Indian and National Insurance in Calcutta and the Hindustan Co-
operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great
poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life
(later Bombay Life) were some of the companies established during the same period. Prior to 1912.
India had no legislation to regulate insurance business.
In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The
Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the act discriminated between foreign
and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From
44 companies with total business-in force as Rs. 22.44 crore, it rose to 176 companies with total
business-in-force as Rs. 298 crore in 1938. During the mushrooming of insurance companies many
financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was
the first legislation governing not only life insurance but also non-life insurance to provide strict
state control over insurance business.
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The demand for nationalization of life insurance industry was made repeatedly in the past but
it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in
the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian
companies and 75 provident were operating in India at the time of nationalization, nationalization
was accomplished in two stages; initially the management of the companies was taken over by
means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The
Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading
life insurance much more widely and in particular to the rural areas with a view to reach all
insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC
had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from 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-organization servicing functions were transferred to the branches, and

branches were made accounting units. It worked wonders with 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-organization happening in the early eighties, by 1985-86 LIC had
already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7
zonal offices and the corporate office. LIC’s Wide Area Networkcovers 100 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-lint 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,
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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. LIC continues to be the
dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a
new growth trajectory surpassing its own past records. LIC has issued over one crore policies during
the current year.

It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a
healthy growth rate of 16.67% over the corresponding period of the previous year. From then to
now, LIC ha crossed many milestones and has set unprecedented performance records in various
aspects of life insurance business. The same motives which inspired our forefathers to bring
insurance into existence in this country inspire us at LIC to take this message of protection to light
the lamps of security in as many homes as possible and to help the people in providing security to
their families.

Some of the important milestones in the life insurance business in India are:
 1818: Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.
 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company
started its business.
 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 are 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.
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.

Life insurance Corporation of India (LIC)

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The Life insurance Corporation was established about 44 years ago with a view to provide an
insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly
status and become synonymous with life insurance. Its main asset is its staff strength of 1.24 lakhs
employed and 2,048 branches and over six-lakhs agency force. LIC has hundred divisional offices
and has established extensive training facility at all levels. At the apex, is the Management
Development Institute, seven zonal Training Centre and 35 sales Training Centers. At the industry
level, along with the Government and the GIC, it has helped establish the National Insurance
Academy. It presently transacts individual Life Insurance business, group Insurance business, social
security schemes and Pensions, grants housing loans through its subsidiary. And the markets savings
and Investment products through its mutual fund. It pays off about Rs 6,000 crores annually to5.6
million policyholders

OBJECTIVES OF LIC

 Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching allinsurable persons in the country
and providing them adequate financial cover against death at a reasonable cost.

 Maximize mobilization of people’ savings by making insurance-linked savings adequately

attractive.
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 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.

 Conduct business with utmost economy and with the full realization that 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 agent and employees of the corporation a sense of participation, pride
and job towards achievement of Corporate objective.

MISSION/VISION

Mission
“Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering resources for
economic development.”

Vision
“A trans-nationally competitive financial conglomerate of significance to societies
and Pride of India.” LIC of India is the one and only public sector life insurance Company in India.

Some of the important milestones in the life insurance business in India are:

 1818: Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.
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 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company
started its business.

 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 are taken over by the
central government and nationalised. LIC formed by an Act of Parliament, viz. LIC
 Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
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.
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1.2 COMPANY PROFILE

Type : Public limited company or Government-owned corporation

Founded : September 1, 1956
Headquarters : Headquarters in Mumbai, India (Various other locations in India and abroad)
Key people : T. S. Vijayan (Chairman), D. K. Mehta and Thomas Mathew
(Managing Directors)
Industry : Life insurance
Products : Insurance and Pension Plans
Employees : Over 10,00,000
Parent : NIL
Subsidiaries : LIC Housing Finance Limited, etc.
Website : http://www.licindia.com

PRODUCTS OF LIC
LIC - Jeevan Anurag

BENEFITS
LIC’s Jeevan ANURAG is a with profits plan specifically designed to take care of the
educational needs of children. The plan can be taken by a parent on his or her own life. Benefits
under the plan are payable at prespecified durations irrespective of whether the Life Assured
survives to the end of the policy term or dies during the term of the policy. In addition, this plan also
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provides for an immediate payment of Basic Sum Assured amount on death of the Life Assured
during the term of the policy.

ASSURED BENEFIT
Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy
years before maturity. At maturity, 40% of the Basic Sum Assured along with reversionary bonuses
declared from time to time on full Sum Assured for the full term and the Terminal bonus, if any shall
be payable. For example, if term of the policy is 20 years, 20% of the Sum assured will be payable
at the end of the 17th, 18th, 19th year and 40% of the Sum Assured along with the reversionary
bonuses and the terminal bonus, if any, at the end of the 20th year.

DEATH BENEFIT
Payment of an amount equal to Sum Assured under the basic plan immediately on the death
of the life assured.

LIC - Jeewan Kisore

Product summary:
This is an Endowment Assurance Plan available for children of less than 12 years of age. The
policy may be purchased by any of the parent/grand parent.
Commencement of risk cover:
The risk commences either after 2 years from the date of commencement of policy or from
the policy anniversary immediately following the completion of 7 years of age of child, whichever is
later.
Premiums:
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Premiums are payable yearly, half-yearly, quarterly or monthly throughout the term of the
policy or till earlier death of child.
Bonuses:
This is a with-profits 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. A Final (Additional) Bonus may also be payable
provided policy has run for certain minimum period.

LIC – Childs Career Plan

Introduction:
This plan is specially designed to meet the increasing educational 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.
Options:
You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of Premium payment and
Premium Waiver Benefit.

Payment of Premiums:
You may pay the premiums regularly at yearly, half-yearly, quarterly or through Salary
deductions over the term of policy. Premiums may be paid either for 6 years or up to 5 years before
the policy term.

LIC - Jeevan Chhaya

Product summary:
This is an Endowment Assurance plan that provides financial protection against death
throughout the term of the plan. Besides payment of Sum Assured immediately on death, one-fourth
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of Sum Assured is payable at the end of each of last four years of policy term whether the life
assured dies or survives the term of the policy.
Premiums:
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 earlier death.

LIC - Child Future Plan

Introduction:
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.
Options
You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of Premium payment and
Premium Waiver Benefit.
Payment of Premiums
You may pay the premiums regularly at yearly, half-yearly, quarterly or through Salary deductions
over the term of policy. Premiums may be paid either for 6 years or up to 5 years before the policy
term.
LIC - Jeevan Shree
Product summary:
This is an Endowment Assurance plan offering the choice of many convenient premium-paying
terms. It provides financial protection against death throughout the term of plan with the payment of
maturity amount on survival to the end of the policy term.
Premiums:
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Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions, as opted
by you, throughout the premium paying term or till earlier death. Alternatively premium may be
paid in one lump sum.

Guaranteed Additions:
The policy provides for the Guaranteed Additions at the rate of Rs. 50/- per thousand Sum Assured
for each completed year for first five years of the policy.

LIC - 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 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.

LIC – Amulya Jeevan :
On Maturity
RESTRICTIVE CONDITIONS
Minimum age at entry
Maximum age at entry
On Death during the Term of the Policy: Sum Assured
: Nil
: 18 years (completed)
: 60 years (nearest birthday)
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Maximum age at maturity : 70 years (nearest birthday)

Minimum Policy Term : 5 years
Maximum Policy term : 35 years
Minimum Sum Assured : Rs.25,00,000/-
Maximum Sum Assured : No Upper Limit

(Policies will be issued in multiples of Rs.100,000/- for Sums Assured more than the minimum Sum
Assured)
Mode of premium payment : Yearly, Half-yearly & Single Premium

ORGANISATION STRUCTURE OF LIC

Chairman

Managing Director

Executives Directors

Chiefs

Zonal Managers

Regional Managers

Divisional Managers

100 Seniors Divisional Managers

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Marketing Managers

Sales Managers

Senior Branch Managers (Head of the Branch)

Assistant Branch Managers Sells

Development Officers

Different Agent

PUBLIC RELATION DEPARTMENT

The Public Relation Department in LIC is divided into three major
categories. Namely:

1. Communication Department
2. Crisis Management Department
3. Publicity Department

Chief Public Relation Officer

PRO (Communication Dept.)

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PRO (Crisis Management Dept.)

PRO (Publicity Dept.)

CHAIRMAN OF LIC

PRO (Publicity Dept.)

CHAIRMAN OF LIC

PUBLIC RELATIONS
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COMMUNICATION DEPARMENT

PUBLICITY DEPARMENT

CRISIS MANAGEMENT DEPATMENT

CHIEF PUBLIC RELATION OFFICER

The Chief Public Relation Officer of LIC is Mr. M. V. Kulkarni. He heads the PR department. The
above three committees are under the PRO. The PRO is responsible for the overall functioning of
the PR department. He has to monitor the smooth functioning of the three departments.

RESPONSIBILITIES OF CHIEF PUBLIC RELATION OFFICER :-

1. PR represents whole organization.

2. Should know how to behave in a certain situation.
3. He is not a person, he is representative.
4. Should know how to create enthusiasm.
5. In crisis he has to give feedback as soon as possible.

OBJECTIVES AND FUNCTIONS OF CHIEF PUBLIC RELATION OFFICER:-

The PRO is directly answerable to the Chairman Shri. T.S. Vijayan.

The PRO looks after all the activities of the three departments all over
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India.
Also he has to keep in close touch with the over-seas PR departments of LIC.
All the policies implemented in India are informed to other PROs of the over-seas branches
of LIC.
The PRO monitors the norms and values of all the branches.
The new rules and regulations in India are informed to the PROs of the over-seas branches.
The PRO also holds regular workshops for the top management employees to motivate them
to lift the spirit of the work culture.
The PRO also has to provide information about latest policies to the communication
department and ask them to public or air it through various mediums.
Since a major share of workload of LIC is in the public sector, the PRO has to look after
social responsibility as well as maintaining the image of the company.
COMMUNICATION DEPARTMENT
The PRO of this Department is an external PR.
He looks after:-
Arranging press conferences, press releases and is in constant contact with the media.

He is also responsible for monitoring the overseas communications.

The Communication Department PRO has to make arrangements for the guests and their
overall honors. The conversations with the guests are directly done by the Communication
Department PRO.

The PRO from this department should always keep a close eye on the latest happenings in
the market. Any social issue at any area is a news to be worked out for him.

He reports directly to the Chief PRO of the company.

The Press conference usually includes the CEO of the company, the Chief PRO and the
Communication Dept. PRO.

If the case is of crisis, then only is the Crisis management Dept PRO present for the Press
conference.
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Since LIC is closely related with the Public Sector, the Communication Dept. PRO has to
also be in a close contact with the government officials.

He also has to motivate the employees in his department for constant progress in the
strategies for communication.

In short, the communication Department PRO ensures that there is no communication gap
between the company and the external concerned bodies. (recent press releases of LIC issued
by Communication Department PRO enclosed)….

CRISIS MANAGEMENT DEPARTMENT

The PRO in this department is an internal one. From the overall history of LIC, it is seen that the
company has never been into any major crisis. This itself is one of the best achievements. He is
answerable to the Chief Public Relation Officer.

The PRO from crisis management, though is here to handle crisis, he has been assigned many other
internal responsibilities.

Motivating the lower employees, sales executives and sales and marketing employees.
Building up a smooth communication between the Blue Collar and the White Collar.
Arranging small workshops for all the employees.
He also has to know the issues going within the other departments so that these issues are
solved before they create crisis.

The strategy used by the PR here for crisis management is:-

“Wash the utensil before having food in it.”

Thus all the employees right from the day of joining are kept in close contact with the Crisis
Management Dept. And regular workshops help to restrict cases like Corruption. With a company so
closely associated with the government, restricting such practices is very difficult task.
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PUBLICITY DEPARTMENT

The PRO of the publicity Department is an External PR. This department was formed due to the fall
of sales in the 1999. This fall was due to the emergence of the foreign insurance companies and their
advertising strategies. Initially, the ads shown by LIC always said “no worry even after death”. All
the ads portrayed death. The other insurance companies came up with the idea that insurance is for
happy life. Thus the sales of LIC went down as people liked the idea of Life more than Death.
Hence a separate publicity department was formed which worked only for publicity strategies.
Initially it was looked up by the Communication Department. Today the publicity department PRO
has to see to it that all the ads running are creating effect. The PRO is the one who along with the
Marketing department looks after the strategies for publicity. He is also to carry out various
campaigns. The very recent campaign is known as “Zindagi Express”. The Zindagi Express is a term
that has been associated to the life of LIC. Just as humans celebrate their 50 years of life, even LIC
is celebrating its life. and when any person has done a lot in his life, he is capable of writing an
Autobiography. Thus Zindagi Express is an Autobiography by LIC. They had started this unique
campaign of auto biography from Delhi and will cover the entire nation and end up in Delhi again.
During this journey they explain what all LIC has done for publics and what all it still intends to do
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To satisfy the consumers in lic they make effective public relations and consumer relations

S.W.O.T. ANALYSIS OF LIC A proper S.W.O.T. analysis of LIC has also been conducted to
know better about the position, growth, and upcoming future and prospective of the company.

STRENGTHS

 LIC is on 1st rank among the Insurance player.

 Long-term plans of LIC are the main strength.
 After sales services.
 Products cost are very low.
 Customer does not believe on private company.

WEEKNESS

• Low interest rate

OPPORTUNITIES

• Good brand promotion.

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• 1/2nd- % insurance has been covered.

THREATS

• Competitors.
• Entry of Private Insurance banks.

1.3 NEED FOR THE STUDY

 The success of the organization depends on markets.

 The study was mainly undertaken to identify the market through insurance.

 If the market Insurance are identified it would possible for the management to take the

necessary steps to improve the sales of the product.

 Since markets are considered as improvements for the company market will lend to the

success of the company in the long run.

 The need for the study can be recognized when the result of related study required

suggestions & recommendations to the similar solutions.

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CHAPTER-II

REVIEW OF LITERATURE

INSURANCE INDUSTRY

The business of insurance started with marine business. Traders, who used to gather in the
Lloyd’s coffee house in London, agreed to share the losses to their goods while being carried by
ships. The losses used to occur because of pirates who robbed on the high seas or because of bad
weather spoiling the goods or sinking the ship. The first insurance policy was issued in 1583 in
England. In India, insurance began in 1870 with life insurance being transacted by an English
company, the European and the Albert. The first Indian insurance company was the Bombay Mutual
Assurance Society Ltd, formed in 1870. This was followed by the Oriental Life Assurance Co. in
1874, the Bharat in 1896 and the Empire of India in 1897.

Later, the Hindustan Cooperative was formed in Calcutta, the United India in Madras, the
Bombay life in Bombay, the National in Calcutta, the New India in Bombay, the Jupiter in Bombay
and the Lakshmi in New Delhi. These were all Indian companies, started as a result of the swadeshi
movement in the early 1900s. By the year 1956, when the life insurance was nationalized and the
Life Insurance Corporation of India (LIC) was formed on 1st September 1956, there were 170
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companies and 75 provident fund societies transacting life insurance business in India. After the
amendments to the relevant laws in 1999, the L.I.C. did not have the exclusive privilege of doing
life insurance business in India. By 31.3.2002, eleven new insurers had been registered and has
begun to transact life insurance business in India.

NEED OF INSURANCE

Assets are insured, because they are likely to be destroyed, through accidental occurrences.
Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc,
are perils. If such perils can cause damage to the asset, we say that the asset is exposed to that risk.
Perils are the events. Risks are the consequential losses or damages.
The risk to an owner of a building, because of the peril of an earthquake, may be a few lakhs
or a few crores of rupees, depending on the cost of the building and the contents in it.
The risk only means that there is a possibility of loss or damage. The damage may or may
not happen. Insurance is done against the contingency that it may happen. There has to be an
uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no
uncertainty about the occurrence of an event, it cannot be insured against. In the case of a human
being, death is certain, but the time of death is uncertain. In the case of a person who is terminally
ill, the time of death is not certain, though not exactly known. He cannot be insured.

Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril
cannot be avoided through insurance. The peril can sometimes be avoided, through better safety and
damage control management. Insurance only tries to reduce the impact of the risk on the owner of
the asset and those who depend on that asset. It only compensates the losses – and that too, not
fully.

Only economic consequences can be insured. If the loss is not financial, insurance may not
be possible. Examples of non-economic losses are love and affection of parents, leadership of
managers, sentimental attachments to family heirlooms, innovate and creative abilities, etc.

TYPES OF INSURANCE
 Automobile insurance
 Aviation insurance
 Boiler insurance
 26

 Builder’s risk insurance

 Casualty insurance
 Disability insurance
 Liability insurance
 Marine cargo insurance
 Purchase insurance
 Credit insurance
 Crime insurance
 Crop insurance
 Directors and officers liability insurance
 Property insurance
 Terrorism insurance
 Title insurance
 Travel insurance
 Workers’ compensation
 Life insurance
 Total permanent disability insurance
 Locked funds insurance
 Marine insurance
 Financial loss insurance
 Health insurance
 Professional indemnity insurance
 Environmental liability insurance
 Pet insurance
 Political risk insurance
 27

CHAPTER-III

OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE

 To study the market of Life Insurance products with reference to LIC

SECONDARY OBJECTIVES

 To understand the strength and weakness of LIC products.

 To find the best LIC product in terms of movements & quality.

 To analyze the various factors that affects the LIC.

 To make Suggestions & recommendations to improve the market position of LIC

products.
 28

CHAPTER – IV

RESEARCH METHODOLOGY

4.1 RESEARCH DESIGN

“A research design is the arrangement of conditions for collection and analysis data in a
manner that aims to combine relevance to the researcher purpose with economy in procedure”.

It constitutes the blueprint for the collection, measurement and analysis of data. As such the
design includes an outline of what the researcher will do form writing the hypothesis and its
operational implication to the final analysis of data.

More explicitly, the design decisions happen to be in respect of;

 What is the study about?

 Why is the study being made?
 Where will the study be carried out?
 What type of data is required?
 Where can the data are found?
 What periods of time will the study include?
 29

 What will be the sample design?

 How will the data be analyzed?
 In what style will the report be prepared?
 What techniques of data collection will be used?

The Research Design undertaken for the study is Descriptive one. A study, which wants
to portray the characteristics of a group or individuals or situation, is known as Descriptive study. It
is mostly qualitative in nature.

4.2 TYPES OF DATA COLLECTED

 Primary Data

Questionnaires are prepared and personal interview was conducted. Most of the questions
are consist of multiple choices. The structured interview method was undertaken. The interview was
conducted in English as well as in Tamil. Proper care was taken to frame the interview schedule in
such a manner it should be easily understood in view of educational level of the employees.
Generally 32 questions are prepared and asked to the customers.

 Secondary Data

Secondary data was collected from Internets, various books, Journals, and Company
Records.

4.3 QUESTIONNAIRE CONSTRUCTION

Questionnaires were constructed based on the following types:

 Open ended questions

 Close ended questions
 Multiple choice questions

4.4 DEFINING THE POPULATIONS

 30

The Population or Universe can be Finite or infinite. The population is said to be infinite if it
consist of a unfixed number of elements so that it is possible to enumerate it in its totality. So In this
projects consist of infinite population.

4.5 SAMPLING PLAN

A sampling plan is a definite design for obtaining a sample from the sampling frame. It refers
to the technique or the procedure the researcher would adopt in selecting some sampling units from
which inferences about the population is drawn. Sampling design is determined before any data are
collected.

Convenient Sampling technique was adopted. In this method the researcher select those units
of the population in the sample, which appear convenient to him or the management of the
organization where he is conducting research.

4.6 SAMPLE SIZE

100 samples are taken.

4.7 FIELD WORK

The field works is done at Chennai, Thambaram, Adiyar, Triplicate.

4.8 PERIOD OF SURVEY

The period is from January 2008 to March 2008.

4.9 DESCRIPTION OF STATISTICAL TOOLS USED

 Percentage method
 Correlation
 Weighted average method

4.9.1 PERCENTAGE METHOD

 31

In this project Percentage method test was used. The percentage method is used to know the
accurate percentages of the data we took, it is easy to graph out through the percentages. The
following are the formula

No of Respondent
Percentage of Respondent = x 100
Total no. of Respondents

From the above formula, we can get percentages of the data given by the respondents.

4.9.2 CORRELATION

Correlation analysis deals with the association between two or more variables. It does not tell
anything about cause and effect relationship. Correlation is classified in two types as

 Positive and

 Negative correlation.

SPEARMAN Correlation method, it also can be said as Rank Correlation. It is defined by the

symbol ‘r’

6 ∑ di²
FORMULA r = 1- ______________

n (n²-1)

Correlation value shall always lie between +1 and-1. When r =1, it shows there is
perfect positive correlation between variables. When r = 0, There is no correlation.

4.9.3 WEIGHTED AVERAGE METHOD

 Weighted average can be defined as an average whose component items are multiplied by
certain values (weights) and the aggregate of the products are divided by the total of weights.
 32

 One of the limitations of simple arithmetic mean is that it gives equal importance to all the
items of the distribution.

 Certain cases relative importance of all the items in the distribution is not the same. Where
the importance of the items varies.

It is essential to allocate weight applied but may vary in different cases. Thus weightage is a
number standing for the relative importance of the items.

CHAPTER-V

DATA ANALYSIS AND INTERPRETATION

TABLE 5.1.1 RESPONDENTS PROFILE OF AGE

AGE (In Years) FREQUENCY (%) PERCENTAGE

35-45 66 66
25-35 25 25
Above 50 5 5
Less than 50 4 4
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
Table shows, among the 100 sample respondents, the majority of 66% of the respondents fall
in the age group of 35-45 years. Another 25% fall in the category of 25-35 years. There are 5% of
the respondents who fall in the age group of above 50 years, while the remaining 4% are in the age
group of below 25 years. Thus, from the analysis it can be concluded that the majority (66%) of
respondents fall in the age group of 35-45.
 33

CHART 5.1.1 RESPONDENTS PROFILE OF AGE

TABLE 5.1.2 GENDER PROFILE OF THE RESPONDENTS

GENDER FREQUENCY (%) PERCENTAGE

Male 73 73
Female 27 27
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

Table shows, the 100 sample respondents, the majority of 73% of the respondents are Male,
while the remaining 27% are female. Thus, from the analysis it can be concluded that the male
respondents constituted the major position (73%)

CHART 5.1.2 GENDER PROFILE OF RESPONDENT

 34

TABLE 5.1.3 MARITAL STATUS OF RESPONDENTS

MARITAL STATUS FREQUENCY (%) PERCENTAGE

Married 75 75
Unmarried 25 25

TOTAL 100 100

(Source: Primary Data)

INTERPRETATION

Table shows, among the 100 sample respondents, the majority (75%) of the respondents are
married while the remaining 25% is unmarried among the respondents. Thus, from the analysis it
can be concluded that the majority (25%) of respondents who are married.
 35

CHART 5.1.3 MARITAL STATUS OF RESPONDENTS

TABLE 5.1.4 EXPERIENCE PROFILE OF THE RESPONDENTS

EXPERIENCE OF
RESPONDENT FREQUENCY (%) PERCENTAGE
3-5 57 57
2-3 27 27
Above 2 11 11
Less than 5 5 5
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

As it could be seen in Table, among the 100 sample respondents, the highest of 57% of the
respondents fall in the experience group of 3-5 years. Another 27% fall in the category of 2-3 years.
There are 11% of the respondents who fall in the experience group of less then 2 years, while the
remaining 5% are in the experience group of above5 years. Thus, majority (57%) of respondents are
in the experience group of 3-5.
 36

CHART 5.1.4 EXPERIENCE PROFILES OF RESPONDENTS

TABLE 5.1.5 ANNUAL INCOME LEVEL OF RESPONDENTS

ANNUAL INCOME FREQUENCY (%) PERCENTAGE

(.In RS)
3,00,000 - 1,50,000 50 50
Less Than 1,50,000 27 27
4,20,000 - 3,00,000 14 14
Greater Than 4,20,000 9 9
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

Table shows, out of 100 sample respondents, the majority 50% of the respondents earn
annual income between 150000-300000.Another 27% of respondents are less than 150000. There
are 14% of the respondents who earn between 300000-420000, the remaining 9% among the
respondents earn above 420000. Thus, from the analysis it can be concluded that the respondents
who earn between 150000-300000 constituted the major position (50%).

CHART 5.1.5 ANNUAL INCOME LEVEL OF RESPONDENTS

 37

TABLE 5.1.6 AWARENESS ABOUT LIFE INSURANCE POLICIES

AWARENESS FREQUENCY (%) PERCENTAGE

Yes 100 100
No 0 0
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

As it could be seen in table among the 100 sample respondent all of them were aware of the
life insurance policies, (i.e.) 100%. Thus from the analysis it can be concluded that 100% of
respondents are aware of the life insurance policies.

CHART 5.1.6 AWARENESS ABOUT LIFE INSURANCE POLICIES

 38

TABLE 5.1.7 INTENDED TYPE OF POLICY IN FUTURE

TYPE OF POLICY RESPONDENT (%) PERCENTAGE

Child secure plan 42 42
Wealth + Health plan 36 36
Golden year plan 7 7
Market rate of return 12 12
Automatic investment plan 3 3
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

As it could be seen in chart among the 100 sample respondents, 42 respondents are preferred
to take Child secure plan and 36 respondents are preferred to take Wealth+ health plan. Thus from
the analysis it can be concluded that 42 respondents preferred to take Child secure plan.

CHART 5.1.7 INTENDED TYPE OF POLICY IN FUTURE

 39

TABLE 5.1.8 PREFERRED INSURANCE COMPANY IN FUTURE

COMPANY RESPONDENT PERCENTAGE

LIC 55 55
RELIANCE 29 29
BAJAJ 5 5
ICICI 2 2
HDFC 9 9
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
Table shows, among the 100 sample respondents, 55 respondents are preferred to take LIC as
there company and 29 respondents are preferred to take RELIANCE as there company. Thus from
the analysis it can be concluded that 55 of the respondents preferred to take LIC as there company
and among the private company RELIANCE as their company.

CHART 5.1.8 PREFERRED INSURANCE COMPANY IN FUTURE

 40

TABLE 5.1.9 CURRENT INSURANCE COMPANY

CURRENT COMPANY RESPONDENT PERCENTAGE (%)

LIC 64 64
LIC AND HDFC 27 27
LIC AND ICICI 4 4
RELIANCE 3 3
OTHERS 2 2
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

Table among the 100 sample respondents, 64% respondents is having policies in LIC and 27
of respondents are having policies in both LIC and HDFC and 4 respondents are having in LIC and
ICICI and 3 respondents are having in RELIANCE. Thus from the analysis it can be concluded that
64 of the respondents are having policies in LIC and HDFC is in the second place when compared to
others private players.

CHART 5.1.9 CURRENT INSURANCE COMPANY

 41

TABLE 5.1.10 NUMBER OF POLICIES

NO. OF POLICIES RESPONDENT PERCENTAGE (%)

ONE 45 45
TWO 36 36
THREE 11 11
FOUR 8 8
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
Table shows, among the 100 sample respondents, 45 respondents are having two policies and
36 of respondents are having three policies.11 respondents are having four and five policies. 8
respondents are having above five policies. Thus from the analysis it can be concluded that 45 of the
respondents having two policies.

CHART 5.1.10 NUMBERS OF POLICIES

 42

TABLE 5.1.11 CURRENT PREMIUM PAYMENT PERIOD

PERIOD RESPONDENT PERCENTAGE (%)

Monthly 53 53
Quarterly 20 20
Annual 13 13
Half yearly 13 13
One time 1 1
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
Table shows, among the 100 sample respondents, 53 respondents are paying monthly
premium payment and 20 respondents are paying quarterly premium payment. Thus from the
analysis it can be concluded that 51 respondents are paying monthly premium payment.

CHART 5.1.11 CURRENT PREMIUM PAYMENT PERIOD

 43

TABLE 5.1.12 CURRENT PREMIUM AMOUNT PAID ANNUALLY

AMOUNT RESPONDENT PERCENTAGE (%)

3000-5000 34 34
Less than 3000 23 23
5000-7000 23 23
Greater Than 9000 20 20
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
Table shows, among the 100 sample respondents, 34 respondent's annual premium payment
is in between Rs 3000-5000 and 23 respondent's annual premium payment is below Rs 3000. Thus
from the analysis it can be concluded that 34 respondent's annual premium payment is in between
Rs 3000-5000.

CHART 5.1.12 CURRENT PREMIUM AMOUNT PAID ANNUALLY

 44

TABLE 5.1.13 SOURCE OF AWARENESS

SOURCE RESPONDENTS PERCENTAGE (%)

Television 85 85
Newspaper 37 37
Magazines 24 24
Online 10 10
Word of Mouth 7 7
Friends 10 10

TOTAL 100 100

(Source: Primary Data)

INTERPRETATION

As it could be seen in table, among the 100 sample respondent, it is clear that most of the
respondents came to know about the insurance through Television (85%) and the second highest
source are the Newspaper (37%). The respondents have come to know about the insurance through
 45

word of mouth is very low (7%). Thus, from the analysis it can be concluded that 85% of the
respondents came to know about insurance polices through Television.

CHART 5.1.13 SOURCE OF AWARENESS

TABLE 5.1.14 AWARENESS ABOUT THE INSURANCE COMPANY

COMPANY’S NAME RESPONDENTS PERCENTAGE (%)

 46

LIC 100 100

HDFC 75 75
ICICI 55 55
SBI 55 55
BAJAJ 27 27
BIRLA 26 26
Tata AIG 19 19
SRIRAM 18 18
ING Vysya 16 16
KOTAK 6 6
Max Newyork 5 5
Sahara 3 3
AVIVA 3 3
BARATHI 0 0
METLIFE 0 0
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

As it could be seen in table among the 100 sample respondent, it is clear that 100% of the
respondents are aware of LIC. And among the private players HDFC has ranked first (75%) and
followed by ICICI (55%), BAJAJ (27%), BIRLA (26%). None of the respondent has come to know
about Metlife and Max Barathi AXA life insurance. Thus most of the respondents are aware of LIC
and in the private sector HDFC Standard Life insurance.
 47

CHART 5.1.14 AWARENESS OF INSURANCE COMPANY

TABLE 5.1.15 PURPOSE OF TAKING POLICIES

PURPOSE RESPONDENTS PERCENTAGE (%)

tax benefit 57 57
Risk Factor 46 46
Investments 38 38
Schemes 22 22
Brand 19 19
Premium 6 6
Others 1 1

TOTAL 100 100

(Source: Primary Data)

INTERPRETATION
 48

As it could be seen in table among the 100 sample respondents, 57% have opted Tax Benefits
as the major purpose of taking life insurance policies and Life risk factor, Investment are also the
purpose of taking life insurance policies. Thus from the analysis it can be concluded that most of the
respondents are preferred to take policies for the purpose of Tax Benefits.

CHART 5.1.15 PURPOSE OF TAKING POLICIES

TABLE 5.1.16 PREFERRED PREMIUM PERIOD

PERIOD FREQUENCY PERCENTAGE (%)

Monthly 48 48
Annual 21 21
Half yearly 16 16
Quarterly 15 15
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

Table shows, among the 100 sample respondents, 48% of the respondents preferred monthly
premium payment period and 21% of the respondents preferred annual premium payment period.
 49

Thus from the analysis it can be concluded that 48% of the respondents preferred monthly premium
payment period.

CHART 5.1.16 PREFERRED PREMIUM PERIOD

TABLE 5.1.17 PREFERRED PREMIUM MODE OF PAYMENTS

MODE RESPONDENTS (%) PERCENTAGE

Salary deduction 58 58
Through agent 11 11
By cash 7 7
By cheque 18 18
Online payment 6 6
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
 50

Table shows, 4.7 among the 100 sample respondents, 58% of the respondents preferred
Salary Deduction as mode of payment and 18% of the respondents preferred cheque as the mode
payment. Thus from the analysis it can be concluded that 58% of the respondents preferred Salary
Deduction as mode of payment.

CHART 5.1.17 PREFERRED PREMIUM PAYMENTS

TABLE 5.1.18 PREFERRED DELIVERY OF POLICY DOCUMENTS

POLICY DOCUMENTS RESPONDENTS (%) PERCENTAGE

Through agent 43 43
Personally insurance company's 32 32
By post 22 22
Online 3 3
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

Table shows, among the 100 sample respondents, 43% of the respondents preferred to get the
documents through agent and 32% of the respondents preferred to get the documents from the
 51

insurance office itself. Thus, from the analysis it can be concluded that 43% of the respondents
preferred to get the documents through agent.

CHART 5.1.18 PREFERRED DELIVERY OF POLICY DOCUMENTS

TABLE 5.1.19 PREFERRED MODE OF SETTELEMENT

MODE RESPONDENTS PERCENTAGE (%)

By cheque 75 75
By cash 19 19
On account transfer 6 6
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION

Table shows, among the 100 sample respondents, 75% of the respondents preferred to get the
claims settlement through by cheque and 19% of the respondents preferred to get the claims
 52

settlement through cash. Thus from the analysis it can be concluded that 75% of the respondents
preferred to get the claim settlement through cheque.

CHART 5.1.19 THE PREFERRED MODE OF SETTELEMENT

TABLE 5.1.20 PREFERRED INSURANCE COMPANY

SECTOR FREQUENCY PERCENTAGE (%)

Public sector 75 75
Private sector 25 25
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
 53

Table shows, among the 100 sample respondent 75% of respondents are preferred public
sector and 25% of the respondents are preferred private sector. Thus from the analysis it can be
concluded that 75% of respondents are preferred public sector.

CHART 5.1.20 PREFERRED INSURANCE COMPANY

TABLE 5.1.21 PREFERENCES FOR FUTURE POLICY

PARTICULARS NO. OF RESPONDENTS PERCENTAGE (%)

Yes 34 34
No 66 66
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
 54

Table shows, among the 100 sample respondent 66% of respondents are preferred to take
policy in future and 34% of the respondents are not preferred to take policies in future. Thus from the
analysis it can be concluded that 66% of respondents are preferred to take policy in future.

CHART 5.1.21 PREFERENCES FOR FUTURE POLICY

TABLE 5.1.22 HOLDING OF INSURANCE POLICY

HOLDING POLICIES RESPONDENTS PERCENTAGE (%)

Yes 98 98
No 2 2
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
 55

As it could be seen in Table among the 100 sample respondent 98% of respondents are
currently having policies and 2% of the respondents are not having policies. Thus from the analysis it
can be concluded that 98% of respondents are currently having policies.

CHART 5.1.22 HOLDING OF INSURANCE POLICY

TABLE 5.1.23 CURRENT TYPE OF POLICY

 56

POLICIES RESPONDENTS PERCENTAGE (%)

Wealth Plus health plan 57 57
Child secure plan 56 56
Market rate of return plan 50 50
Golden year plan 30 30
Automatic Investment plan 16 16
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
Table shows, among the 98 sample respondents, 57 respondents are having Wealth plus
health plan policies and 54 respondents are having Child secure plan policies and 50 respondents are
having Market rate of return plan policy. Thus from the analysis it can be concluded that 57
respondents having Wealth Plus health plan policy.

CHART 5.1.23 CURRENT TYPE OF POLICY

TABLE 5.1.24 PRESENT PURPOSE OF TAKING POLICIES

PURPOSE YES PERCENTAGE

 57

Tax Benefits 59 59
Investment 39 39
Risk Factor 38 38
Market Returns 30 30
Health Plan 18 18
Retirement benefits 8 8
TOTAL 100 100
(Source: Primary Data)

INTERPRETATION
Tables among the 100 sample respondents, 59 respondents are having policies for the
purpose of tax savings and 39 respondents are having policies for the purpose of Investment. Thus
from the analysis it can be concluded that 59 respondents are having policies for the purpose of tax
savings.

CHART 5.1.24 PRESENT PURPOSE OF TAKING POLICIES

5.2 ANALYSIS USING WEIGHTED AVERAGE METHOD

 58

TO FIND THE RANKS OF DIFFERENT FACTORS WHICH ARE LISTED BELOW

ACCORDING TO THE OPINION OF RESPONDENTS

TABLE 5.2.1
FACTORS POINTS SECURED RANKS
Wealth plus health plan 36 5
Child secure plan 44 4
Automatic investment plan 3 3
Golden year investment plan 12 2
Market rate of return plan 5 1
Source: Primary Data

TABLE 5.2.2

POINT 5 4 3 2 1
WEIGHTAGE
Wealth Child secure Automatic Golden year Market rate
FACTORS plus health plan investment plan of return
investment
plan plan
plan
POINTS 36 44 3 12 5
SECURED
TOTAL 180 176 15 24 5

AVG 1.8 1.76 0.15 0.24 0.05

RANK 1 2 4 3 5

INTERPRETATION

The above table infers that the customer gives more weightage first to the Wealth plus
health plan, second to the Child secure plan, third to the Golden year investment plan, fourth to the
Automatic investment plan and finally to the Market rate of return plan This shows that the
customers are very much satisfied with their product and their services.
CHAPTER-VI

6.1 FINDINGS OF THE STUDY

 59

SPECIFIC FINDINGS
 Majority (66%) of respondents fall in the age group of 35-45.

 The male respondents constituted the major position (73%).

 Majority (99%) of respondents who are married.

 Majority (57%) of respondents are in the experience group of 3-5.

 The respondents who earn between 1,50,000 - 3,00,000 constituted the major position (50%).

 100% of respondents are aware of the life insurance policies.

 85% of the respondents came to know about insurance polices through agents.

 Most of the respondents are aware of LIC and in the private sector RELIANCE Life
insurance.

 Most of the respondents are preferred to take policies for the purpose of Tax benefits.

 48% of the respondents preferred monthly premium payment period.

 58% of the respondents preferred Salary Deduction as mode of payment.

 43% of the respondents preferred to get the documents through agent.

 Most of the respondents ranked premium amount as first followed by period of premium and
feature of policy.

 75% of respondents are preferred public sector.

 Most of the respondents are selecting the agent's by knowledge of policy followed by
convincing approach and investment advice.

 Most of the respondents are selecting the insurance company first to fulfillment of customer
needs followed by availability of product and services and brand name.
 66% of respondents are preferred to take policy in future.

 Most of the respondents are ranked Child Secure Plan as first.

 60

 Most of the respondents are preferred to take Child Secure and Automatic Investments.

 28 respondents preferred to take Children's policy.

 57 respondents having Child Secure plan.

 55 of the respondents preferred to take LIC as there company and among the private
company RELIANCE as their company.

 98% of respondents are currently having policies.

 64 of the respondents are having policies in LIC and RELIANCE is in the second place when
compared to others private players.

 45 of the respondents having two policies.

 59 respondents are having policies for the purpose of tax benefits.

 51 respondents are paying monthly premium payment.

 34 respondent's annual premium payment is in between Rs 30,000-50,000.

 The respondents are satisfied with the current agent services.

 86 respondents are got scores in between 22 – 28, so the respondents are satisfied with the
agent service.

 The respondents are satisfied with the current company services.

 87 respondents are got scores in between 40 – 52, so the respondents are satisfied with the
insurance company.

6.2 SUGGESTIONS OF THE STUDY

 61

 More new products and services should be innovated through financial engineering process.

 To increase the market share of Reliance they can introduce new policies with low premium
to rural people.

 Based on the Reliance Life Insurance unique factors like more interest & tax saving

facilities. They can tie-up with various public/private sectors to cover the insurance needs of

the employees.

 Periodical market survey should be conducted to enhance the satisfaction.

 62

CHAPTER-VII

CONCLUSIONS

Insurance sector is one of the most booming sectors in India. The penetration level of
insurance in India is only 2.5% when compared to 9-15% in the developed nations. There is a huge
market for the Insurance products in the future in India.

Today the market share of the Private insurance company is only 35%. If the company gives
lowest premium plan to the insurer the rural people will take the insurance policy. With help of the
market share will be increased. This is the one of the strategy our company can follow.

In today insurance world, currently the Reliance Life insurance is developed in rather than
other insurance company. In Wealth + Health plan is better than other insurance medical policy.

All the insurance company produced medical policy but the Reliance Life Insurance provides
customer based product or medical policy.

The project was very useful to the researcher to understand the life insurance business.
 63

CHAPTER-VIII

8.1 LIMITATIONS OF THE STUDY

 There are samples collected from those who brought the Life Insurance.

 There is a difficulty to ascertain the customer to collect the sample.

 The sample size was restricted to 100 due to these factors.

 The study will be effect only for the next six months & vary accordingly.
 64

8.2 SCOPE OF FURTHER STUDY

 The study is to define the customer needs, preference and full fill their expectations.

 It will be helpful for the management to identify the market potential.

 Since the study is general one, it can be adopted by similar organizations.

 The recommendations and suggestions of the study can also be applied to similar
project or similar situation.
 65

APPENDICES

ANNEXURE-1

BIBLIOGRAPHY

REFERENCE BOOKS

 Khan. M. Y, FINANCIAL SERVICES, Tata McGraw-Hill, New Delhi

 Gordon and Natarajan, Financial Markets and Services, Himalaya Publishing House,

Mumbai

 V.A Avadhani, Marketing of Financial Services, Himalaya Publishing House, Mumbai

WEBSITES

 www.reliancelifeinsurance.com

 www.wikipedia.com

 www.yahoo.com

 www.google.com

 www.irda.com

REPORTS

 IRDA Reports
 66

ANNEXURE-2

QUESTIONNAIRE

Name: _____________________________
Age:
a) Below 25 b) 25- 35 c) 35 -45 d) Above 50
Gender: a) Male b) Female.
Marital Status: a) Married b) Unmarried
Occupation: a) Public Sector b) Private Sector c) Business d) Others
Designation: ______________________________
Experience (in years)
a) Less than 2 years b) 2-3 years c) 3-5 years d) Above 5 years
Annual Income:
a) Less than Rs. 1,50,000 b) Rs.1,50,000 – 3,00,000 c) Rs.3,00,000 – 5,00,000
d) Above Rs.5,00,000

1. Do you know about Life Insurance Polices?

a) Yes b) No

2. Do you have any Life Insurance Polices?

a) Yes b) No

3. If yes, name of the Insurance Company in which you have the Policy?
a) LIC b) Birla Sunlife c) HDFC d) ICICI
e) Bajaj Alliance f) ING Vysya g) Kotak h) Metlife
i) Shriram Life j) SBI Life k) Tata AIG
l) Reliance Life Insurance m) Bharati Axa

4. Would you like to purchase Reliance Life Insurance product in the next year?
a) Yes b) No
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If No, mention the reason ___________________________________

5. Which insurance company do you prefer?

a) Public Sector b) Private Sector

6. How many polices do you have?

a) Less than 2 b) 2-5 c) 6-10 d) More than 10

7. What is the period of premium payment?

a) Annual b) Half Yearly c)Monthly d) Quartly
e) One time f) any other (Please specify)

8. Do you know about Reliance Life Insurance?

a) Yes b) No

9. How did you know the Reliance Life Insurance?

a) Advertisement b) Friends c) Family d) Advisor e) Others

10. Have you taken any policy from Reliance Life Insurance?
a) Yes b) No
If yes, how many policies you have taken?
a) Less than 2 b) 2-5 c) 6-10 d) More than 10
11. Which type of product you prefer to buy?
a) Market rate of return plan d) Golden year investment plan
b) Child secure plan e) Automatic investment plan
c) Wealth plus health plan
12. What is the most important reason for purchasing Reliance Life Insurance product?
a) Quality b) Premium c) Brand
d) Risk factor employee e) Schemes (Policies) f) Interest
g) Tax Benefit

13. Could you please indicate your investment across option?

a) Postal savings b) Fixed deposits
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c) Shares d) Recurring deposits

e) Mutual funds f) Real estate

14. Are you happy with the services of your present Life Insurance Company?
a) Yes b) No

15. If No, what made you think So? give reasons?

a) Advisors follow up not well
b) Untimely intimation of renewal premium
c) No promptness in delivery
d) Longer duration of processing
e) Not transparent

Others ____________________

16. What are the three best features you could expect from our product?
Life time risk low with endorsement
Endorsement alone
Risk cover alone
Any other

17. In considering the overall direction of the company how the company marketing effects
matching its customer expectations?
Marketing Effects Excellent VeryGood Good Fair
a) The company’s vision & direction
b) Creating aware of financial strength of the company
c) The efficiency of work flow in the company
d) Company marketing tactics in reaching customer
e) Regularly introduction of new product
f) Company focusing improving customer satisfaction

18. Which media do you prefer is most effective to deliver our message?
a) Television b) Newspapers c) Magazines
d) Online e) Word of mouth

19. What message is being received from our advertising?

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a) Good service b) Good product c) Discount

d) Product warranty e) Seasonal offer f) Free package

20. Which tool do you prefer to purchase our product?

a) Offer b) Product warranty c) Interest
d) Free gifts e) Discounts f) Tax Benefit

21. Which policies you buy for your family?

a) Market rate of return plan b) Golden year investment plan
c) Child secure plan d) Automatic investment plan
e) Wealth plus health plan

22. Which policy you wish to replace?

a) Market rate of return plan d) Golden year investment plan
b) Child secure plan e) Automatic investment plan
c) Wealth plus health plan

23. Which factor do you expect more from Reliance Life Insurance products?
Schemes Quality Price Service Product Warranty Sales promotion
Market rate of return plan
Golden year investment plan
Child secure plan
Automatic investment plan
Wealth plus health plan

24. Compared to other product availability how do you feel about you say the product is?
______________________________________________________________

25. If any suggestions __________________________________________