You are on page 1of 56

A PROJECT REPORT ON

In partial fulfillment of ANALYSIS OF MARKET RESEARCH OF PRODUCT OF IDBI FEDERAL LIFE INSURANCE CO. LTD.

POST GRADUATE DIPLOMA IN MANAGEMENT 2010-2012 SUBITTED TO MATRIX BUSINESS SCHOOL

SUBMITTED BY ANURAG KUMAR


MATRIX BUSINESS SCHOOL S. NO. 9/1/5 & 9/2/4, OFF WESTERLY BYPASS ROAD, AMBEGAON (BK.) PUNE 411041
1

PREFACE

Post Graduate Diploma In Management of Pune is two year duration , consisting of four semesters .at the end of second semester ,as per the requirement of second semester , as per the requirement of university of Pune , all the students are required to undergo summer internship program or summer internship training .

The research techniques can be learnt and adopted for the summer internship projects. this monograph contains the guidelines to facilitate the research students to work on the project report in scientific manner .

As the summer internship program requires the understanding and use of research methodology, the main focus of monograph is the research methods and techniques to be used for project. the research student will be in the better position to work on the research project successfully if the provided guidelines are used systematically.

In this monograph a step by step approach to execute the research project is given . it is a practical way of conducting and compiling research project .

ANURAG KUMAR

DECLARATION

I, ANURAG KUMAR Roll No. 10 of PGDM ( AICTE ) MARKETING of Matrix Business School Pune the undersigned hereby declare that the Project Report entitled. ANALYSIS OF MARKET RESEARCH OF PRODUCT OF IDBI FEDERAL LIFE INSURANCE CO. LTD. written and submitted by me to the Matrix Business School Pune, in partial fulfillment of the requirements for the awards of Post Graduate Diploma in Management under guidance of Pro. Madhuri Sethe this is my original work and the conclusions drawn there in are based on the material collected by me.

Place: Date: Anurag Kumar

CERTIFICATE

This is to certify that the project titled ANALYSIS OF MARKET RESEARCH OF PRODUCT OF IDBI FEDERAL LIFE INSURANCE CO. LTD. is a bonafide work carried out by Mr. Anurag Kumar, a student of Post Graduate Diploma in Management course at Matrix Business School, Pune for fulfillment of PGDM Course of Matrix Business School Pune.

He has worked under our guidance and direction. His work is found satisfactory and complete in all respects.

Director : Dr. J.N.POL

Project Guide : Prof. Madhuri Sethe

Date: Place: Pune

ACKNOWLEDGEMENT

I take great pleasure to thank and acknowledgement the permission and allowance by Mr. KRUPAL BHANSALI, BRANCH HEAD, IDBI FEDERAL LIFE

INSURANCE CO. LTD , PUNE REGION and his help and inspiration provided. I extend a whole hearted thanks to. Mr. DEEPAK GOVITRIKAR., AREA AGENCY HEAD under whom I worked and learned a lot and for enlightening me with their knowledge and experience to grow with the corporate working. Their guidance at every stage of the Project enabled me to successfully complete this project which otherwise would not have been possible without their constant encouragement and motivation, without the support it was not possible for me to complete the report with fullest endeavor. I would also like to extend my thanks to my College Faculty Member Mrs. Madhuri Sethe. I would like to extend my thanks to my college director Dr. J. N . Pol and all my Colleagues in the company who supported me in carry out my operation successfully and generously and provided me vital information/ training regarding the my project objective.

Anurag Kumar

TABLE OF CONTENT

Contents

Sl. No. 1

Titles

Page No.

Executive Summary

Introduction

9-25

Company Profile

26-32

Research Methodology

33-39

Data presentation, Analysis & Interpretation

40-49

Findings And Suggestions

50-51

7 8 9

Conclusion Annexure Bibliography

52 57-60 61

Executive Summary
In todays corporate and competitive world, I find that insurance sector has the maximum growth potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. Despite recession this sector has noticed a growth rate of around 35-40%. The growth potential attracts individuals to enter this sector and IDBI-Federal Life Insurance Company Ltd has given me the opportunity to get a peek of highly competitive and enhancing sector. The awareness related to life insurance products in India, among the mass, is still very low. The level is even lower in rural areas. Insurance is still considered as a tool for tax planning only, even when companies have attached investment benefits to it. The major factors affecting the purchase of an insurance product are trust, service, product features and relationship with advisors. Firms like LIC are still favored only because of being a government undertaking units. The concept of mis-selling has paralyzed the sector itself. People find it hard to have faith in advisors. Their job is really very hard. People are now getting aware of the various investment tools available in the market. The masses in urban cities like Pune have started comparing the products. While talking to different people, I found that their purchase decision was highly influenced by their family and colleagues. They purchased the insurance products at the time when they needed it most, which according to them was at the time of tax planning, whereas any insurance product must be bought when the individual needs it least so that they can actually calculate the amount of life cover they need and the type of investment they want. The masses are not actually aware about the money value of their life, for example a person earning Rs.5 Lacs p.a. at an age of 30 yrs has got the risk cover of only Rs.7 Lac.

INTRODUCTION

LIFE INSURANCE Definition The life insurance contract embodies an agreement in which broadly stated, the insurer undertakes to pay a stipulated sum upon the death of the insurer to a designated beneficiary. -- J.H.MAGEE Life insurance contract may be defined whereby the insurer, in consideration of premium paid either in lump sum installments, undertakes to pay an annuity on the death of the insured of a certain number of years. -- R.S.SHARMA

LIFE INSURANCE: Some outstanding advantages of life insurance 1.) It is superior to an ordinary saving plan: this is so because unlike other saving plans, it offers full protection against risk of death. 2.) Insurance encourages and enforces thrift : many people may not have the will power to continue a long term saving plan which they may formulate regular payments in face of money other uses to which their limited income could be put. 3.) Easy installments and protections against creditors: the proceeds of a life insurance policy can be protected against the claims of the creditors of life assured by affection a valid assignment of the policies. 4.) Tax relief: the income tax act exempts from tax that part of an individuals income which is devoted to payment of life insurance premium.

Why Life Insurance? Life Insurance has come a long way from the earlier days when it was originally conceived as a risk covering medium for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance became more established, it was realized what a useful tool it was for a number of situations, including a) Temporary needs / threats: The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc. b) Regular Savings: Providing for one's family and oneself, as a medium to long term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence for their family. c) Investment: Put simply, the building up of savings while safeguarding it from the ravages of inflation. Unlike regular saving products, investment products are traditionally lump sum investments, where the individual makes a one off payment. d) Retirement: Provision for later years becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in one's old age. Let us take an example to understand the need for insurance: Mr. Pranay is 45 years of age and self-employed. His wife Nandini, who is a housewife, looks after their two children aged 3 and 7 years. They stay in a rented accommodation, where the rent is 15,000 rupees per month. Mr. Atul has taken up a loan of Rs. 2 lakes. His monthly earnings on average are 40,000 rupees. Mr. Atul passes away in an unfortunate road accident. What are some of the financial implications of his death on his family? There may be several

10

financial implications on his family. Some of these are:

a) The monthly income, previously provided by Mr. Atul would stop. b) His wife and children may have to seek financial assistance from other relatives. c) His wife may not have enough money to pay back the loan of Rs. 2 lacks. d) The family may have to move into a cheaper accommodation. e) His widow may have to take up work to earn money. f) The education of his children may suffer. This simple example illustrates the impact premature death can have on a family, where the main earner has no life cover. Had Mr. Atul taken life cover, his family would not have faced such hardships in the event of his unfortunate death. A simple life insurance policy could have provided Mr. Atul's family with a lump sum that could have been invested to provide an income equal to all or part of his income. In simple words, insurance protects against untimely losses. Insurance has been found useful in the lives of persons both in the short term and long term. Short term needs like sudden medical costs and long term needs like marriage expenses etc can be met with using life insurance.

LIFE INSURANCE INDUSTRY:

India Life Insurance Industry: With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) is estimated at Rs.450 billion (US$10 billion). According to government sources, the insurance and banking

11

services contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The life insurance industry in India grew by an impressive 36%, with premium income from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private insurers. RNCOSs report, Indian Insurance Industry: New Avenues for Growth 2012, finds that the market share of the state

12

behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business increased in the last fiscal year (20042005) compared to the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased their market share from about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. There are presently 12 general insurance companies with four public sector companies and eight private insurers. According to estimates, private insurance companies collectively have a 10% share of the nonlife insurance market. Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999. The report gives an instant overview of the Indian non-life insurance market, and covers fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies. Report Highlights: 1. Gains of Liberalization in Indian Insurance Sector 2. Indian Insurance Market Segmentation By Products 3. Size of the Market and Market Share Of Life Insurers, In INR (crore) 4. Market Share Of Non-Life Insurers 5. Forecast of Life Insurance Growth Up to 2012

13

6. Forecast of Non-Life Insurance Growth Up to 2012 7. Market Revenue of Both Public and Private Insurers 8. Policies and Measures Taken By IRDA To Develop The Insurance Market 9. Research and Development Activities 10. Regulation of insurance and reinsurance companies 11. Major Challenges That Indian Insurance Sector is Facing 12. Profiles of the Major Players

HISTORY OF LIFE INSURANCE IN INDIA:

With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 percent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the

14

existence of LIC. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. The origin of insurance is very old .The time when we were not even born; man has sought some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance. The insurance came to India from UK; with the establishment of the Oriental Life insurance Corporation in 1818. The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market. 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. In 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. In 1972 The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. It was after this that 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd.,

15

the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company. The government of India liberalized the insurance sector in march 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) bill. Lifting all entry restrictions for private players to enter the market with some limits on direct foreign ownership premium rate of most general insurance. Policies come under the purview of the government appointed Tariff Agents Committee. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also restructuring and revitalizing of the public sector companies. A host of private insurance companies operating in both life and non life segments have started selling their insurance policies since 2001. Non life insurance market, In December 2000, the GIC subsidiaries were restructured as independent insurance companies. At the same time, GIC was converted into national re-insurer. In July2002, Parliament passed a bill, delinking the four subsidiaries from GIC. Presently there are 12 general insurance companies with 4 public sector companies and 8 private insurers. Although the public sector companies still dominate the general insurance business, the private insurance companies have a 10 percent share of the market, up from 4 percent in 2001. In the first half of 2002, the private companies booked premium worth 6.34 billion. Most of the new entrants reported losses in first yr of their operation in 2001. Insurance costs constitute roughly around 1.2 2 % of the total project costs. Under the existing norms, insurance premium payments are treated as part of the fixed costs. Consequently they are treated as pass through costs for tariff calculations. For projects costing up to Rs.1 billion, the tariff Agent committee sets the

16

premium rates, for projects between 1 billion and 15 billion, the rates are set in keeping with committees guidelines; and projects above 15 billion are subjected to reinsurance pricing. It is the last segment that has a number of additional products and competitive pricing. Insurance, like project finance, is extended by a consortium. Normally one insurer takes the lead, shouldering about 40-50% of the risk and receiving proportionate percentage of the premium.

ABOUT THE COMPANY:

IDBI FEDERAL LIFE INSURANCE CO. LTD.

IDBI Federal Life Insurance Co Ltd, is a joint venture between three leading financial conglomerates

IDBI Bank Federal Bank . Indias premier development and commercial bank, IDBI, Indias leading private sector bank, Federal Bank and Europes premier Bank assurer, Fortis, each of which enjoys a significant status in their respective business segments. In this venture, IDBI owns 48% equity while Federal Bank own 26% equity each. IDBI Federal launched its first set of products across India in March 2008, after receiving the requisite approvals from the Insurance Regulatory Development Authority (IRDA). Today, we offer our services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. At IDBI Federal we endeavor to deliver products

17

that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian customers.

IDBI About our Heritage IDBI Bank Ltd. continues to be, since its inception, Indias premier industrial development bank. Created in 1956 to support Indias industrial backbone, IDBI Bank has since evolved into a powerhouse of industrial and retail finance. Today, it is amongst Indias foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from over 538 branches and more than 921 ATMs. venture capital , loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in sponsoring the development of key institutions involved in Indias financial sector such as the Securities and Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd.

Federal Bank: Federal Bank is one of Indias leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of over 600 branches and 600 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network. The

18

Bank operates on the core banking platform and is RTGS/ NEFT enabled through which it offers state-of-the-art technology enabled products and services. In addition to interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, Any Where Banking, debit cards, online bill payment and call centre facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations. Understanding Federal Bank is all about understanding relationships. Knowing how our relationships helped to make us the largest traditional private sector bank in the country. Of how we nurtured our relationships for more than seven decades, gaining us the reputation of being an agile, technology savvy and customer friendly bank. Learning how we built our wide network of branches, reaching out to cover all the major cities of the country, to be accepted as one of the leading private sector banks in the country, and rejoicing on the fact that we are a dominant presence in the state of Kerala. Federal Bank continues to be the favorite choice for NRIs as is evidenced from the fact that about 30% of our deposits come from the NRI segment. Our short term deposit has been rated by CRISIL and awarded a high score of P1+ The Bank has correspondent Bank arrangements with Banks in most of the major cities in the world.

FUTURE SCENARIO:Before looking insurance future prospectus of the insurance industry, we must take a look into its past history. The independent India started with private sector insurance companies. These companies were nationalized by the Union Govt. in 1965 to form a monopoly known as Life Insurance Corporation of India has being under public sector
19

for over four decades till the govt. opened the insurance sector for private companies in 2000. Indian Company Kotak Mahindra Tata Group Sundram Finance Spic ILFC Alpic Finance 20th Century Vysa Bank Cholamandlam SBI HDFC ICICI IDBI Foreign Partner Chubb AIG Winterthur Metlife Cigna Allianz Canada Life ING Axa Alliance Capital Standard Life Prudential Federal

Insensitivity to the needs of the market, traditions insurance adoption of modern practices to upgrades technical skills coupled with a scene of lethargy which probable led to a feeling amongst that the insurance industry was not fully responsive to customers needs.
20

ABOUT PRODUCT OF LIFE INSURANCE:

WEALTHSURANCE

1. Wealthsurance is a comprehensive investment Solution: Wealthsurance is designed to be an investment solution. It offers a full range of investment choices similar in features to those you are already familiar with such as bank deposits, bonds, post office schemes or mutual funds. The investment options are designed to meet the needs of all types of investors, whether cautious or risk taking. So whenever you are looking to make an investment, think about investing in Wealthsurance. 2. Wealthsurance is a wealth-management account: Wealthsurance is indeed a wealth-management solution. You can make a single investment or regular contributions. You can even manage most of your financial savings in it by choosing an appropriate mix of investment options. Think about the convenience of managing your entire portfolio in a single account and watch your wealth grow over time. 3. Wealthsurance is for those who will live: Life insurance is sometimes thought of as for those who might die, but Wealthsurance is for those who will live. While it provides benefits upon death, Wealthsurance is also designed to offer a whole package of living benefits. You can get benefits on terminal illness, major diseases, hospitalization and disablement so you are well cared for in the event of a health crisis or accident.

4. Wealthsurance is a tax-free wealth-builder account: In Wealthsurance, you can build wealth free of income tax. Not only do you get tax

21

benefits on your contributions, but all the returns you earn on your investments and the benefits you receive are tax-free. You can also switch amongst investment options without incidence of any tax. In essence, Wealthsurance is a tax-free wealth management account. 5. Wealthsurance is a long-term plan with short term liquidity: Wealthsurance allows you to build wealth over the long-term, but it also gives you The ability to withdraw your money when needed, after completion of three years from the commencement of the plan. With Wealthsurance you can achieve medium as well as long-term financial goals. 6. Wealthsurance meets your changing needs: Wealthsurance is designed to meet your investment and insurance needs even as they change over time. You may not need another plan because you will be able to increase, decrease or manage the wealth-building and insurance benefits as you desire. 7. Wealthsurance is different from traditional insurance: Wealthsurance is not like traditional life insurance you might know. It is an investment plan focused on wealth creation and living benefits. Sometimes people think that they only need a limited amount of life insurance. But as long as you have financial goals and you wish to build and manage wealth, or desire living benefits in your own lifetime, you will find Wealthsurance useful. 8. Wealthsurance has as many options as you need: Wealthsurance gives you multiple options because we want to meet your specific needs. At the same time we have made it easy for you to choose by developing Ready Plans to meet the typical needs of customers. Quite likely there is a Ready Plan that meets your needs. But if you wish, you can build a Custom Plan to suit your own circumstances.

22

HOMESURANCE:

There is not a bigger gift you can buy your family that a new home. But just imagine what would happen if due to an unfortunate event, you were not around. The entire burden of your home loan will have to be borne by your family. The powerful Homesurance Protection plan can help. It insures your home loan at a reasonable cost. So your family inherits a home and a home loan.

1. Protection against loan liability: Your home loan can be paid-off in the event of unfortunate death. Your outstanding home loan amount normally reduces over time as you repay by way of monthly installments. At the time you take the plan, you will receive a reduced a calculated loan schedule called Homesurance policy schedule based on the amount & the term of your loan, which will show you the reducing cover amount over time. 2. Construction period coverage: If your property is under construction, though the loan is sanctioned it is disbursed in stages depending upon the construction schedule. During the construction period, Homesurance covers the full sanctioned amount of your home loan and just the outstanding loan amount. 3. Protection against interest rates hikes: Your home loan may be at a fixed rate or a floating rate, or partly at a fix and partly at a floating rate. Homesurance covers fixes rates as well as floating rate home loan. 4. Small cost big protection: Homesurance can cover your entire home loan for a small cost. The premium you pay depend upon your age, gender, loan amount and loan term. 5. Joint lives cover:

23

you may have taken a home loan jointly with another person such as your spouse, sibling or any other relative. Homesurance can cover joint lives. You can insure both lives by opting for joint life cover. This cover also costs less than taking individual cover for both lives. 6. Easy payment: Homesurance offered flexible premium payment option for your convenience. You can choose to pay your premium in 3, 5 or 10 annual installments. Option to pay in 5/10 installments is available only if your home loan term is 10/15 years or more. 7. Tax Benefits: The premiums you pay are eligible for deduction under sec 80c of the income tax act. Any benefit amount paid upon death is tax-free under sec 10(10d) of the income tax act, so that it is fully available to pay off the loan liability without any impact of tax. Bondsurance Bondsurance is a single premium plan which allows you to make a one-time investment and get a guaranteed amount on maturity. You can choose a maturity period of 5 or 10 years for your investment. At the end of the chosen period, you will receive a guaranteed maturity amount. Besides the guaranteed maturity amount, Bondsurance also provides a life insurance cover. In case of death before the maturity date, a death benefit which is also guaranteed will be paid. Thus you can get life insurance cover, while earning an assured return on your investment. Why Bondsurance: Everyone has a dream to achieve and a timeframe to achieve it. To achieve your dreams you also need sufficient funds. If you are looking for a safe and steady approach to meet your dreams, you need a plan that will give you steady and assured returns that are not dependant on the market conditions. Bondsurance is the ideal plan to beat the ups and downs around you.

24

RETIRESURANCE

Idbi Federal retiresurance pension plan is your ideal investment partner that helps you enjoy life post retirement. It is an extremely flexible plan that allows you to conveniently save for the golden years by offering you a wide choice of investment option to grow and multiply your wealth. a. Options to suit your convenience: Choose the amount, frequency of payment and payment term for your plan, with the flexibility of reducing the premiums or adding additional top-up premiums. b. Choice of investment option: Choose from a range of investment options to match your investment style and grow your retirement corpus with: Investment options for equity-linked return. Investment options for stability and security. c. Flexibility to modify your plan: Take advantage of favourable market condition, modify your plan as per changing need. You can: Switch among investment option/ change your future premium allocation. Get liquidity through partial withdrawals and surrender. Choose your vesting date. d. Guaranteed loyalty additions: Boost your funds through guaranteed loyalty additions to grow your wealth faster. e. Tax benefits: Tax saving under sec 80ccc. One third of the retirement corpus can be commuted tax-free on vesting under sec 10(10A).

25

Chapter 2 Company Profile

Product of the Company LIFESURANCE Your life is full of responsibilities. As a responsible individual, you not only seek to make the wishes of your family come true but also want to ensure that their dreams are secured against eventualities that may come in the way. To achieve this objective, you seek a long-term savings plan that provides high returns on your investment while providing protection against lifes uncertainties. IDBI Federal Life Insurance Co Ltd offers you the IDBI FEDERAL Lifesurance Savings Insurance Plan - a fixed-term participating endowment policy that provides you with the twin benefits of long-term savings and life cover. It is a guaranteed plan that allows you to accumulate considerable savings to meet your responsibilities in life. The IDBI Federal Lifesurance Savings Insurance Plan (hereinafter referred to as Lifesurance) also offers you the benefit of a death cover that provides financial security to your family in your absence. What are the benefits of Lifesurance ? Maturity Benefit On the maturity of your Lifesurance policy, provided all premiums

have been paid in full when due, we will pay you the sum insured along with the vested guaranteed additions, vested reversionary bonuses and terminal bonus, if any, in a lump sum.

26

Death Benefit

On the death of the life insured during the policy term, provided

all

premiums have been paid in full when due, we will pay the beneficiary the sum insured along with the vested guaranteed additions, vested reversionary bonuses, interimbonus, if any and terminal bonus, if any, in a lump sum. Guaranteed Additions : Guaranteed additions at the rate 50 per 1,000 sum insured will be added to your policy for each full annual premium that is due and paid in the first 5 years of the policy. In the case of premiums paid more frequently than annually, the guaranteed additions will be added on a pro rata basis as the due premiums are paid in the first 5 years of the policy. The vested guaranteed additions will become payable along with the sum insured at the time of a claim or maturity of the policy. Bonuses After the fifth policy year, your Lifesurance policy will participate in any

profits of our participating policyholders life fund by way of reversionary bonuses and possibly terminal bonus. The amount of any profits, and hence of any bonuses will depend on the future experience and performance of the fund. The bonuses will be declared by the Board of IDBI Federal Life Insurance Company each year, and once added they will form part of the guaranteed benefits of the policy. The Company may declare an interim bonus in the event of a claim before the next bonus declaration.

BONDSURANCE Get guaranteed return on your investment with life insurance IDBI Federal Bondsurance Plan is designed for customers looking for guaranteed returns which will not get affected by financial market conditions. It offers guaranteed return on investment along with life insurance cover. Investment in this Plan is eligible for deduction under Sec 80C of the Income Tax Act and the maturity amount is tax-free under Sec 10(10D) of the Income Tax Act. A plan you can truly count on.
27

If you are looking for a safe and steady approach to meet your dreams, you need a plan that will give you steady and assured returns that are not dependant on market conditions. IDBI Federal Bondsurance Plan is the ideal plan to beat the ups and downs around you.

WEALTHSURANCE Wealthsurance plans combine wealth creation with insurance protection into one powerful financial solution. Unlike other investment alternatives, it allows you to ensure that your goals of wealth creation are achieved even in the event of serious illness, accidents, disablement or death. Insured Wealth Plans to grow wealth under a protective cover Wealthsurance offers you Insured Wealth Plans. They allow you to create, build and manage wealth by giving several choices and great flexibility so that your plan meets your specific needs. You can decide how you wish to save so that it suits your savings habit. You can choose how your money is invested so that you can grow wealth as per your investment preferences. What is even better, Wealthsurance protects your wealth plans with life insurance benefits so that your wealth-building efforts remain unaffected in unforeseen events and your financial goals can still be achieved. As a seasoned investor, you recognise the ability of the equity markets to build wealth over the long term. But you also appreciate the fact that the growth potential of the market comes with the accompanying risk of volatility HOMESURANCE Your new home is the fulfillment of a long-cherished dream. Only you know the careful planning that went into its choice. And only you understand the hard work that went into arranging the financing including the home loan. Truly, your home is your best gift to
28

your family. Just imagine what would happen, if due to an unfortunate event, you were not around. The entire burden of your home loan would have to be borne by your family. But you can ensure that they inherit a home and not a home loan. We understand the importance of protecting your home loan and the powerful IDBI Federal Homesurance Protection Plan can help you insure your home loan at a reasonable cost. TERMSURANCE Happiness & security for our family is something all of us strive to achieve. However, there are times when you ask yourself - What if something were to happen to me? What would happen to my loved ones? Have I secured my family financially so that they dont have to face lifes burdens? Different people have different needs and seek different things from an insurance plan. Some look for a large cover option at a low cost, while others seek return of premium on maturity of the policy. There are some who may want their plan to keep in touch with inflation, while others may seek flexible premium payment options. INCOMESURANCE Grow your Guaranteed Annual Income each time you pay premium Some goals cannot be left to chance. Like educating your child, or planning for her marriage, or providing financial security to a loved one, or ensuring a comfortable retirement income. Or you may just want to ensure a future additional income stream.

How can you be confident of achieving these goals? 1. You need a plan that allows you to save regularly to reach your objective 2. You want the plan to give you assured income payments that are not dependent upon
29

vagaries

such

as

the

stock

market

3. You want the plan to work and your goals to be achieved even if anything happens to you A cover for all your needs Independent regular income for your wife You can ensure that your wife is secured with an independent income. You can also ensure that no one, including creditors or claimants, can touch that money. Financial security for your parents What better gift can you give your parents when you start earning yourself? You can gift them a secure, regular income to ensure a comfortable life. Regular income payments can help them enjoy their senior years doing things they had always wanted to but never found the time for. Child's Education You can save regularly and get guaranteed payouts to meet your child's education. You can be rest assured that your goal will be achieved even if anything were to happen to you. Daughters Marriage You can withdraw your guaranteed income when the time

comes for marriage. You can meet the wedding expenses or give her a regular income. It is the best present you can give when she is setting up her home. Get additional income from time to time

30

Over and above your normal income, IDBI Federal Incomesurance Endowment & Money Back Plan can help you get additional income from time to time. You can indulge in a purchase of your choice, take a vacation or just gift it to your loved ones, the choice is yours. At the same time, you can also ensure life insurance protection for your family's security. RETIRESURANCE It is difficult to predict the future but with more of us living longer, the possibility of outliving our savings could become a harsh reality. In fact, you could easily spend almost 20-25% of your life in retirement. This is the time in your life when you will face the retirement challenge. As time goes by, your responsibilities grow as well, increasing your expenses. Also lets not forget the effect of inflation. Inflation increases the cost of living. Take the following increases in basic amenities over the last 20 years and you can understand what you could be up against after 20 years.

These are approximate rates based on market sources and are presented for illustrative purposes only Currently your increasing expenses are being met by your increase in income, but what will happen when your income stops?

31

Most people meet it by compromising on their lifestyle to keep expenses in check. But then, what is the point of working all your life when you cannot enjoy your retired life? The best way to meet the retirement challenge is to prepare for it by saving up enough money. In the future this can create a constant stream of income that is large enough to ensure your comforts and also allow you to enjoy the luxuries of life. But when is a good time to start planning for retirement? The answer is as soon as you can. It is never too early to plan ahead for something as important as a comfortable retirement. The earlier you start, bigger your corpus or your retirement. LOANSURANCE Loansurance is a cost-effective way to ensure that the outstanding debt is settled in the unfortunate event of death of the insured member. This term assurance plan provides cover to a person directly liable for loan repayment (and the partners, in case of a partnership), as per the benefit schedule.

Reducing cover Under this option, your insurance cover reduces as per your benefit schedule. The benefit schedule is computed over a period of time, taking into account initial loan interest rate, the loan term and outstanding loan amount. Level Cover The level cover option of Loansurance provides a cover for the sum insured as specified by the insured member and can be to the extent of the full agreed loan amount plus accrued interest as chosen by the insured member.
32

Chapter 3 Research Methodology

Business research is a systematic enquiry that provides information to guide business decision and aimed to solve managerial problems. Business research is of recent original it is largely supported by business organizations that hopes to achieve competitive advantages Research Methodology i s a way to

s y s t e m a t i c a l l y s o l v e t h e p r o b l e m s . I t m a y b e understood as a science of studying how research is done scientifically. It include the overall research design, the sampling procedure, data collection method and analysis procedure.

RESEARCH DESIGN

The research design stands for advance planning of the method t o b e a d o p t e d f o r collection the relevant data and the techniques to be used in adopted for collecting the relevant data and the techniques to be used in analysis. Keeping the view the objectives of the research and the availability time I n general, research design is the conceptual structure within which research is conducted: it constitutes the blue print for the

collection, measurement and analysis of data.

33

DESCRIPTIVE RESEARCH

Descriptive research study includes surveys and fact-finding enquires of different kinds, which help the researchers to describe the present situation that makes the analysis about15

the effectiveness of employee satisfaction among the employees and helps to reach the objective.

SAMPLING DESIGN/TECHNIQUES:

Sampling design is to clearly define set of objective, technically called the universe to bestudied. This research has infinite set of universe and the samplin g design used in the study is non-probability sampling convenience sampling.

SAMPLE UNIT/SAMPLE SIZE:

The item selected from the population constitutes the sample size. The study covers the customers of IDBI federal life insurance company ltd..total sample size for the study is 100 Respondents.

34

DATA COLLECTION METHOD:

Source of Data:Both Primary and Secondary data are used for the data collection.

Primary data:-

The primary data is collected from the res pondents through questionnaire. The questionnaire consists of various questions

f o c u s i n g o n t h e i n t e r n a l c o m m u n i c a t i o n process between employer and employee relationship in the company. The responses are collected from them and used for analysis. The questionnaire is constructed as the art of survey operation.

Secondary data:-

The research collected the secondary data from books, web sites etc. the data relating to the history of the company is collected from the personal manual and the records of the company.

DATA ANALYSIS TOOLS

To arrange and interpret the collected data the following statistical tools were used. 1. Percentage Method 2. Weighted Average Method 3. Chi square Analysis 4. Rank Correlation

35

PERCENTAGE METHOD

The percentage method was extensively used for findings various details. It is u s e d f o r making comparison between two or more series of data. It can be g e n e r a l l y calculated. RESEARCH PROCESS The research process has four distinct yet interrelated steps for research analysis it has a logical and hierarchical ordering: Determination of information research problem. Development of appropriate research design. Execution of research design. Communication of results. Each step is viewed as a separate process that includes a combination of task, step and specific procedure. The steps undertake are logical, objective, systematic, reliable, valid, impersonal and ongoing. SAMPLE SIZE: The sample size was: 100 respondents. I have targeted 100 customer in the age group above 21 years for the purpose of the research. The target population influences the sample size. The target population represents the Pune City (for employees) regions. The people were from different

36

professional backgrounds. The details of our sample are explained in chapter named primary research where the divisions are explained in demographics section.

SAMPLING PLAN:Sampling Size: Unit was also 100 respondents of IDBI Federal Life Insurance Company Limited. Work area: Pune City In Karve Road, Deccan, Kothrud Areas

Sampling type: Cluster sampling Sampling unit: Individual owners of Insurance Company Sample Technique: Stratified random sampling .

3.4 Scope and the Limitation of the study

The scope of study is limited to the respondents are selected from in and around Aurangabad. The project is carried out for the period of 60 days only. Measurement of customer satisfaction is complex subjects, which uses nonobjectives method, which is not reliable. The sample unit was also 100 respondents.

37

Chapter 4 Data presentation, Analysis & Interpretation


Q1. Do you have life Insurance? If yes of which company?

S. No. A

Particulars Yes

Response 88

% of Respondent 88%

38

B Total

No Respondents

12 100

12% 100%

RESPONSE
12 YES 88 NO

INTERPRETATION: In this chart we can see that respondents have taken insurance policies of different companies to secured their future.

Q2. Awareness of IDBI Federal Life Insurance Company?


Factor Print media Electronic media Agents Others Total NO of Respondents 25 30 35 10 100 % of Respondents 25% 30% 35% 10% 100%

39

Series 1
print media electronic media agents others

10% 35%

25%

30%

INTERPRETATION: In this chart, we can see that the agents play major role in exploring the new companies policys for explaining their companys importance and policies. Agents create great effect on the mind of the customers as they are more aware and understanding of plans.

Q 3.

Do you know about Unit Linked Insurance Plans (ULIP)?


NO of Respondents
60 40 100

Factor
Yes No Total

% of Respondents 60% 40% 100%

40

NO 40% YES 60%

INTERPRETATION: On the basis of above analysis, we can say that people are aware of the ULIP plans of the different companies in the market. Respondents are aware of the ulip plans of the respective companies.

Q 4 . Main Consideration that a customer looks at while purchasing an Insurance Policy?

Factor TAX SAVING PROTECTION

NO of Respondents 10 29 53

% of Respondents 10% 29% 53%

41

PENSION INVESTMENT Total

3 5 100

3% 5% 100%

RESPONSE
60 50 40 30 20 10 0 53 29 10 TAX 3 5 RESPONSE

SAVING PROTECTION PENSION INVESTMENT

INTERPRETATION: On the basis of above analysis, we can say that people purchase insurance policy mostly for the protection purpose. More than half of the people takes insurance for protection of their future.

Q 5. What a respondent see while purchasing Incomsurance from the IDBI Company?

42

Sr. No.
A B

Factor
Standing and goodwill of the company Product range and services of the company Advertisement being released by the company Policy by his relatives and friends. Returns of bonus declared by the company

NO of Respondents
35 17

% of Respondents 35% 17% 13% 10% 25% 100%

13

D E

10 25

Total

100

25% 13% 10%

35% 17%

INTERPRETATION: On the basis of above analysis, we can say that people prefer the companies those have very highly goodwill in the market. And apart from this while purchasing they also use to give more weight age to return also.

Q 6. Plan that a respondent prefers to buy?

43

Factor Protection Plan Investment Plan Children Plan Pension Plan Total

NO of Respondents 47 19 24 10 100

% of Respondents 47% 19% 24% 10% 100%

24%

47%

10%

19%

INTERPRETATION:

On the basis of above analysis, we can say that people prefer to buy protection & children plans mostly. Respondents are concerned with protection pans because they are taking the plans to secured their future. Q7. How do you rate IDBI Federals wealthsurance policy by other company insurance Policy?.

44

Factor GOOD AVERAGE BAD CANT SAY Total

NO of Respondents 10 25 10 55 100

% of Respondents 10% 25% 10% 55% 100%

40 35 30 25 20 15 10 5 0 VERY GOOD GOOD

RESPONSE

AVERAGE

BAD

CANT SAY

INTERPETATION: On the basis of above analysis, we can say that people are satisfied with the plans they have bought, its that they are not aware of these ulip plans of this company. But there are certain doubts in the mind of respondents about the company and whether they should invest in it or not.

Q8. Customers expectations from Life Insurance Companies?

45

Factor Innovative Products Attractive Rider Reasonable Premium Better Customer Service High Risk Coverage Total

NO of Respondents 5 2 47 24 22 100

% of Respondents 5% 2% 47% 24% 22% 100%

EHigh Risk Coverage 22%

Innovative Products 5%

Attractive Rider 2%

Better Customer Service 24%

Reasonable Premium 47%

INTERPRETATION: On the basis of above analysis, we can say that people expect better customer service from the insurance companies & reasonable premium on their investment. People mainly go for the plan which will provide him sufficient returns by giving reasonable premium.

Q9. Adequate insurance coverage provided in IDBI Federal Life Insurance?


46

A) Yes S. No. A B Total Particulars Yes No Respondents

B) No
Response 77 23 100 % of Respondent 77% 23% 100%

RESPONSE
NO 23%

YES 77%

INTERPRETATION: The study reveals that in IDBI 77% of the adequate insurance coverage is provided.

Q10. Does all the documents verified properly by the operation department in IDBI Federal Insurance?
47

Factor Always Never Sometimes Total

No. of Respondents 90 3 7 100

% of Respondents 90% 3% 7% 100%

Never 3%

Sometimes 7%

Always 90%

INTERPRETATION: The study reveals that in IDBI 90% of all the documents are verified properly & 7% of the employees said sometimes and 3% said no idea rerification.

Chapter 5
48

Findings and Suggestions

FINDINGS:

From the above analysis of IDBI Federal I found that 88% of the people have life insurance. Agent creat great effect on the mind of customers as they are more aware and understanding about product. In IDBI 60% of people have ULIP plans. On the basis of analysis more than half of the people takes insurance for protection of their future. We can say that people prefer the companies those have very highly good will in the market. Most of the people buy the protection & children plans . The maximum people are satisfied with the plans they have bought. People mainly go for the plan which will provided him sufficient returns by giving reasonable premium. In IDBI 77% of the adequate insurance coverage is provided . Only 40% of the customer satisfied with carrer in insurance advisor ship. The study reveals that in IDBI 90% of all the document are verified properly.

49

SUGGESTIONS:

Following are suggestions made for the benefits and augmentation of the sound working of the. Company - IDBI Federal Life Insurance Co. Ltd.: The work of receiving, issuing, accounting and stoiing responisibilty should be properly. Segeregated so that it will increase the productivity of the organization. All the documents should be verified timely by the operation department. All the policies should be updated time to time according to the company's requirement. Proper trainer should be provided to the trainees.

Friendly atmosphere should be there by proper interaction and activities.

50

CONCLUSION
Summer training is a best example for a trainee to learn about the company working, corporate culture under which he is operating the functions. IDBI Federal Life Insurance Co. Ltd. is a life insurance company under which I gained a significant knowledge with respect to life insurance, its importance and applicability as well as undertook the task to recriuit Insurance Advisors which is conductive for the company to grow with more prosperity. What I taught in the management institute utilized them fiuitfully leading to the best advantage to the company and to the best experience for mine. At far I can conclude that life insurance is a noble service. which is very important for every citizen to leain and realize its importance because this is the only source which can remain the status where one is with the family bread eainer and ever when he is not. With the growing financial sector I would like to choose this industry for my future career advancement and as an opportunity to service this industry.

51

QUESTIONNAIRE ANNEXURE

a) Name .. c) Age ..

b) Occupation .. d) Income.

e) Address:-.

Q1. Do you have life Insurance? If yes of which company?


A) Yes B) NO

Q2. Awareness of IDBI Federal Life Insurance Company?

A) Print Media B) Eloctronic Media C) Agents D) Others

52

Q 3 Do you know about Unit Linked Insurance Plans (ULIP)? A) Yes B) NO

Q 4 Main Consideration that a customer looks at while purchasing an Insurance

Policy?
A) Direct B) Indirect C) Third Party Q 5 What a respondent see while purchasing Incomsurance from the IDBI Company? A) Standing & good will Of the company B) Product range & service of co. C) Advertisement being released by the co. D) Policy by him relatives &friends Q 6 Plan that a respondent prefers to buy? A) Protection Plan B) Investment Plan C) Children Plan

53

D) Pension Plan

Q7. How do you rate IDBI Federals wealthsurance policy by other company insurance Policy? A) Good B) Average C) Bad D) Cant say Q 8 Customers expectations from Life Insurance Companies? A) Innovative products B) Attractive Rider C) Resonable Premium D)Better Customer Service E)High risk coverage Q 9. Adequate insurance coverage provided in IDBI Federal Life Insurance? A) Yes B) No

Q 10. . Does all the documents verified properly by the operation department in IDBI Federal Insurance? A) Always
54

B) Never c)Sometimes

BIBLIOGRAPHY
WEB SITES:
www.idbi federal.com www.scribd.com www.google.com www.indiaindustry.com

1. MARKETING RESEARCH - TULL AND HAWKINS MARKETING MANAGEMENT- PHILIP KOTLER COMPANY MAGZINES AND MANUALS

55

56

You might also like