A

Summer Internship Report

On

“A Comparative Study of Insurance Services of HDFC Life & other Companies Products”

At

Submitted In Partial Fulfillment for the Degree of

Master of Business Administration (Financial Management)

BUNDELKHAND UNIVERSITY, JHANSI

Submitted to: SubmittedBy:Institute of Economics & Finance Harshika Sharma

Bundelkhand University, Jhansi MBA(FM) 2nd Year

DECLARATION

I hereby declare that this project entitled “A COMPARITIVE STUDY OF

INSURANCE SERVICES OF HDFC LIFE & OTHER COMPANIES PRODUCTS”

submitted to Bundelkhand University, JHANSI in partial fulfillment of the

requirements for the award of degree of Master of Business Administration

(Financial Management) is a bonafide record of work done by myself under

the guidance of Vivek Dwivedi.

(Harshika Sharma)

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ACKNOWLEDGEMENT

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

with the insurance sector which enriched my knowledge about the fundamental

concepts of the sector. The numbers of people who have influenced, supported

and guided me through this project are numerous to mention, but some merit

special attention.

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

Vivek Dwivedi, Circle Head, HDFC Life, JHANSI for giving me an opportunity to

work as a summer trainee. I also express my sincere thanks to Mr. Sanjeev Singh,

Sales Development Manager, my project guide, for their individual help and

guidance without which this project wouldn’t have been successful.

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

without their help and constant support this project would have not been possible.

I would also like to thank all the respondents of the survey for their cooperation in

providing me with the required information.

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

who have guided me and constantly been. Without their involvement, this project

would not have been accomplished with me throughout my training tenure.

Harshika Sharma

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY 5

2. STATEMENT OF PURPOSE 6

3.OBJECTIVES 6

6.INSURANCE INDUSTRY “A N OVERVIEW” 11-22

7.COMPARISON OF UNIT LINKED INSURANCE 23-24

PLANS AND MUTUAL FUNDS

8.COMPETITIVE ANALYSIS 25-28

9.COMPANY PROFILE OF HDFC LIFE 29-39

10.COMPANY PROFILE OF LIC 40-47

11.ANALYSIS AND INTERPRETATIONS 48-60

12.SUMMARY OF FINDINGS 61

13.CONCLUSION 61

14. SUGGESTIONS AND RECOMMENDATIONS 62

15.BIBLIOGRAPHY 63

14.ANNEXURES 64-65

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EXECUTIVE SUMMARY

HDFC Life insurance is the oldest life insurance company in the world. The

company is marketing life insurance product and unit linked investment plans.

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

from other private insurance companies like ICICI, Aviva, Birla Sun Life and Tata

AIG. It also faces tough competition from LIC. To compete effectively HDFC Life

could launch cheaper and more reasonable products with small premiums and

short policy terms. The ideal premium would be between Rs 5000-Rs 25000 and

the ideal policy term would be 10-20 years.

The project is divided into the following parts:

Profile of the competitors- Competitive analysis

Competitive analysis of HDFC Life with ICICI Prudential

Market study on customer perception towards insurance sector and arising job

opportunities in the area.

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

services. The market survey deals with the customer perception towards the

insurance sector, their willingness to supplement the income by doing any extra

activity, the motivation behind their work at place.

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

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

illustrates the comparison between insurance and mutual funds.

STATEMENT OF PURPOSE

Increase awareness about insurance

Make people aware about financial activity

Mode to supplement income

Factors leading to motivation

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Level of competition in market

OBJECTIVES OF THE STUDY

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

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

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

Factors that motivates employees behind their work at place

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

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INSURANCE INDUSTRY

“AN OVERVIEW”

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INTRODUCTION

Insurance is a risk management technique primarily used to hedge against

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

entities who have an insurable interest in scarce resources, by transferring the

possibility of this loss from one interested person, persons, or entity to another.

The scarce resources referred to here fall into three divisions: human resources,

financial resources, and capital, or tangible resources. In the context of insurance,

scarce resources are also known as "exposures," because they are "exposed" to

perils, those things, or forces, which cause destruction or reduction, in the

usefulness, or value, of an exposed resource. Human resources are thus exposed to

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

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

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

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

perils and hazards are identified by the exposure that they threaten. In the context

of commercial trade, insurance is further defined as the equitable transfer of the

risk of a loss, from one entity to another, in exchange for consideration, payment,

in the form of a risk premium. The insurance premium develops at an actuarially-

determined rate. This rate is a factor used to determine the amount of premium to

charge for a certain limit, and type, of insurance on the scarce resource. The

premium can further be viewed as a guaranteed, known, relatively small financial

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

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

The insured receives a contract, called the insurance policy, which details the

conditions and circumstances under which the insured will be indemnified.

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

assets. Every asset has a value. The asset would have been created through the

efforts of the owner. The asset is valuable to the owner, because he expects to get

some benefit may be an income or in some other form. It is a benefit because it

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meets some of his needs. The benefit may be an income or in some other form. In

the case of a factory or a cow, the product generated by it is sold and income is

generated. In the case of a motor car, it provides comfort and convenience in

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

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

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

not be available. There is a life-time for a machine in a factory or a cow or a motor

car. None of them will last for ever. The owner is aware of this and he can so

manage his affairs that by the end of that period or life-time, a substitute is made

available. Thus, he makes sure that the benefit is not lost. However, the asset may

get lost earlier. An accident or some other unfortunate event may destroy it or

make it incapable of giving the benefits. We can classify insurance in these terms-

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

to similar risks.

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

unexpected event.

SCOPE OF INSURANCE :

We all know that assets are insured, because they are likely to be destroyed or

made nonfunctional before the expected life time, through accident occurrences.

Such possible occurrences are called perils. Perils are the events. Risks are the

consequential losses or damages. The risk to an owner of a building may be a few

lakhs or a few crores of rupees, depending on the cost of building, the contents in

it and the extent of damage. The risk only means that there is a possibility of loss

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

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

uncertainty. Insurance is relevant only if there are uncertainties.

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

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

through better safety and damage control measures. It only tries to reduce the

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impact of the risk on the owner of the asset and those who depend on that asset.

They are the ones who benefit from the asset and therefore, would lose, when the

asset is damaged. Insurance compensates for the losses- and that too, not fully. In

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

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

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

consequences. When a person saves, the amount of funds available at any time is

equal to the amount of money set aside in past, plus interest. Insurance has no

substitute and one more thing about the insurance is that this is not similar to a

hire purchase scheme. In the event of death, the balance installments are not

excused. They have to be paid by the surviving family. There is a tax benefits, both

in income tax and in capital gins. Marketability and liquidity are better. Life

insurance is not only the best possible way for family protection there is no other

way. The

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

HISTORY OF INSURANCE:

The first insurance company in the United States underwrote fire insurance and

was formed in Charles Town , South Carolina, in 1732. Benjamin Franklin helped

to popularize and make standard the practice of insurance, particularly

against fire in the form of perpetual insurance. In 1752, he founded

the Philadelphia Contribution ship for the Insurance of Houses from Loss by

Fire. Franklin's company was the first to make contributions toward fire

prevention. Not only did his company warn against certain fire hazards, it

refused to insure certain buildings where the risk of fire was too great, such as

all wooden houses. In the United States, regulation of the insurance industry is

highly Balkanized, with primary responsibility assumed by

individual state insurance departments. Whereas insurance markets have

become centralized nationally and internationally, state insurance

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commissioners operate individually, though at times in concert through

a national insurance commissioners' organization. In recent years, some have

called for a dual state and federal regulatory system (commonly referred to as

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

state banks and national banks.

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

year 1818 with the establishment of the Oriental Life Insurance Company

in Calcutta. The General insurance business in India, on the other hand, can

trace its roots to the Triton Insurance Company Ltd., the first general insurance

company established in the year 1850 in Calcutta by the British.

I NDIAN INSURANCE MARKET-HISTORY :

Insurance has a long history in India. Life Insurance in its current form was

introduced in 1818 when Oriental Life Insurance Company began its

operations in India. General Insurance was however a comparatively late

entrant in 1850 when Triton Insurance company set up its base in Kolkata.

History of Insurance in India can be broadly bifurcated into three eras: a) Pre

Nationalization b) Nationalization and c) Post Nationalization. Life Insurance

was the first to be nationalized in 1956. Life Insurance Corporation

of India was formed by consolidating the operations of various insurance

companies. General Insurance followed suit and was nationalized in 1973.

General Insurance Corporation of India was set up as the controlling body

with New India, United India, National and Oriental as its subsidiaries. The

process of opening up the insurance sector was initiated against the

background of Economic Reform process which commenced from 1991. For

This purpose Malhotra Committee was formed during this year who

submitted their report in 1994 and Insurance Regulatory Development Act

(IRDA) was passed in 1999. Resultantly Indian Insurance was opened for

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private companies and Private Insurance Company effectively started

operations from 2001.

MILESTONES:

Year Milestones in the life insurance business in India 

1912 The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business

1928 The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses

1938 Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

1956 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

 Year Milestones in the general insurance business in India

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

transact all classes of general insurance business1957 General Insurance Council, a wing of the Insurance Association of

India, frames a code of conduct for ensuring fair conduct and sound business practices

1968 The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

1972 The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.107 insurers amalgamated and grouped into four companies’ viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

 

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NEED FOR INSURANCE:

Funding future goals through insurance

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

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

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

higher returns. Insurance scores over other investment vehicles in the

following aspects:

Certainty

Once a goal has been identified and a value for it has been crystallized, an

insurance policy is an excellent vehicle to fund the goal. This is because one

can rest assured that even in the unfortunate event of death or even critical

illness, the sum assured will fund a future goal of the policyholder.

Tax efficient

Maturity benefits of most insurance policies are tax free under Section 10

(10D) and the premium paid is eligible for deduction under Section 80C of

the Income Tax Act, 1961.

Flexibility

Insurance products, especially Unit Linked Plans, provide flexibility in terms

of asset allocation to suit specific risk appetites, policy durations, premium

payment terms and fund switching options.

Wider options

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

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

equity and debt is possible in a Unit Linked Plan. An investor may tailor his

policy to suit his requirement.

Liquidity

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

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

deterrents in the form of charges to discourage unnecessary encashment.

Earmarking

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

become a deterrent against utilizing these funds for any other purpose and

also encourages continued contributions.

Planning for unforeseen events

Insurance helps you to provide for contingent liabilities like hospitalization,

critical illness, debt redemption etc, in a cost efficient manner.

Term insurance

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

the sum assured on death. This is useful to simply provide for a family's

survival in the unfortunate event of demise of the bread winner. This can

also be used to cover repayment of any debt of a policy holder by simply

assigning the policy to the creditor. Upon maturity or claim on the policy,

the proceeds are paid to the creditor. Loan Cover policies are a variant

where the sum assured keeps reducing in line with the loan balance.

Health covers

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These policies provide cover against major health care expenses like

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

of fixed pay outs on hospitalization or a lump sum on diagnosis against some

specified critical illnesses.

Accident benefit

This is usually an add-on cover over a basic policy and pays an additional

sum assured to the beneficiary in case of death due to accident. Since

accidental death is sudden and unforeseen, the family could be faced with

issues like relocation, debt servicing and other requirement for funds.

Planning for retirement

Indian life expectancy has improved dramatically over the years due to

availability of advanced medical facilities. However, a longer working life

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

and high burn-out rate. The evolving demographic balance with plenty of

young talent becoming continuously available may also be a deterring factor

to a longer working life unless one is self employed.

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

working life span. This means that we have to build a solid corpus during our

active life to maintain our life style for the long post retirement life if we are

to enjoy the true meaning of the word "retirement". Pension Plans help us

build up our savings during our earning years and provide us a lump sum on

retirement. This lump sum can then provide us a retirement income by

investing in an annuity.

Provide post retirement income

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

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

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relatives or liquidate his fixed assets which essentially are a compromise of

self respect. This is where insurance offers the best solution in the form of

an annuity. Annuities bought from the retirement corpus can either be used

to provide regular post retirement income for a fixed term or also for the

entire life.

Insurance as an inflation shield

Inflation lowers the purchasing power of money and makes a dramatic

cumulative impact over the long term. It reduces your real income year after

year as your cost of living keeps increasing. So, it must be taken into account

while framing financial goals. Insurance products such as Unit Linked Plans

help us combat the impact of inflation on our financial goals by providing

the option to invest in equity, which is known to deliver one of the best

returns from all asset classes, over the long term. Ignoring inflation would

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

especially over the long term.

TYPES OF INSURANCE :

Comparison between Unit Linked Plans and Conventional Plans

Unit Linked Insurance Plan

Conventional plans

Type Description

Unit Linked Insurance Plans offered by insurance companies allow policy holders to direct part of their premiums into different types of funds (equity, debt, money market,

Conventional Plans are traditional insurance plans. They usually invest in low risk return options and offer guaranteed maturity proceeds along with declared bonuses.

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hybrid etc.) Here the risk of investment is borne by the policyholder.

Key Features of Flexibility Investment

Unit Linked Plans give you flexibility to invest as per your risk profile, financial commitments and convenience. You can choose to invest either in equity, or in debt or in hybrid fund and even change your investment strategy.

These plans do not allow you to choose investment avenues. Your funds are invested as per the strategy and discretion of the company.

Transparency Most Unit Linked Plans allow you to track your portfolio. They also regularly intimate regarding the percentage of the premium that is invested along with the charges levied. You are also kept informed about the value and number of fund units that you hold.

Your premiums are invested in a common 'with profits' fund and therefore you cannot track your individual portfolio.

Maturity benefits payout

At the time of maturity you redeem the units collected at the then prevailing unit prices. Some plans also offer you loyalty or additional units annually or at the time of maturity.

At the time of maturity you get the sum assured plus bonuses, if applicable in the plan.

Partial withdrawal

Unit Linked Plans allow you to make withdrawals from your fund, provided

Conventional plans do not allow you to withdraw part of your fund. Instead, some

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the fund does not fall below the minimum fund value and subject to other conditions.

policies offer you the facility to take a loan against your investment.

Switching options

Available. You can change your investment fund decision by switching between the funds as being offered by the policy.

Not available since the the investment decision is taken by the insurance company.

Charges structure

Unit Linked Plans specify the charges. under various heads.

These plans do not specify the charges involved.

Single premium Top-up

Available. The single premium top-up facility allows you to invest an extra amount over and above your regular premiums in your unit linked plan.

The top-up facility is not available.

Benefit Snapshot

Unit Linked Plans give you flexibility of investment

They allow you to track your portfolio.

Unit Linked Plans offer the benefit of a single premium top up which allows you to invest ad hoc additional amounts

Unit Linked Plans allow partial withdrawals, subject to

Conventional plans offer fixed premiums linked to the sum assured.

The maturity benefits for these plans include the sum assured plus bonuses,

if applicable

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conditions and switching between funds by paying some charges, if necessary.

Unit Linked Plans give you the option of a premium vacation.

COMPARISON OF UNIT LINKED INSURANCE PLANS AND MUTUAL FUNDS

Unit Linked Insurance Plan

Mutual funds

Type Description

Unit Linked Plans refer to Unit Linked Insurance Plans offered by insurance companies. These plans allow investors to direct part of their premiums into different types of funds (equity, debt, money market, hybrid etc.)

A mutual fund pools the money from investors and uses it to invest in various securities according to a pre-specified investment objective.

Key Features Objective

Unit Linked Plans are long term plans offering you a dual benefit of insurance and investment.

Mutual funds are ideal investment tool for the short to medium term.

Tax Benefit All Unit Linked Plans offer tax benefits under section 80C.

Only investments in tax saving funds are eligible for section 80C benefits.

Switching Options

Unit Linked Plans allow you to switch your investment between the funds linked to the plan. This enables you to change the risk return.

No switching option is available. If you are not satisfied with the performance of the fund you can exit completely from the same by paying exit charges, if applicable

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Additional Benefits

Some of the Unit Linked Plans give you an additional benefit or loyalty benefit by issuing extra fund units.

There are no additional benefits issued by mutual funds.

Liquidity Unit Linked Plans have limited liquidity. One needs to stay invested for a minimum period of time as specified in the policy before redeeming the units.

You can easily sell mutual fund units (except for ELSS and funds that have a minimum lock-in period)

Charges Structure

Charges in a unit linked plan include mortality charges for the life insurance provided. In addition, premium allocation charge, fund management charge and administration charges are applicable.

Mutual fund charges include an entry load, the annual fund management charge and an exit load, if applicable

Benefit Snapshot

Dual benefit of investment and insurance

Suitable for the long term

Option to switch between the funds is permitted.

Offers tax benefits

Investment tool suitable for short to medium term.

Easy exit possible.

Tax benefit available only on tax saving funds

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COMPETITIVE ANALYSIS

PROFILE OF COMPETITORS

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Life Insurance Corporation of India

LIC has an excellent money back policy which provides for periodic payments of

partial survival benefits as long as the policy holder is alive. 20% of the sum assured

is payable after 5, 10, 15 and 20 years and the balance 40% is payable at the

20th year along with accrued bonus. For a 25 years term, 15% of the sum assured

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

bonus becomes payable at the 25th year. An important feature of these types of

policies is that in the event of the death of the policy holder at any time within the

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

the survival benefit amounts which have already been paid. The bonus is also

calculated on the full sum assured. HDFC SLIC does not have a money back policy.

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

marketing insurance products I found that many customers wanted to purchase

these plans.

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

plans, term assurance plans, money back plan for women, child plans, plans for the

handicapped individuals, endowment assurance plans, plans for high worth

individuals, pension plans, unit linked plans, special plans, social security schemes –

diversified portfolio of products. HDFC SLIC could diversify its product portfolio. It

could add more plans for high worth individuals and women.

Birla Sun Life

A US $30 billion corporation, the Aditya Birla Group is in the league of Fortune 500

worldwide. It is anchored by an extraordinary force of130,000 employees,

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belonging to 40 different nationalities. The group operates in 27 countries across

six continents – truly India's first multinational corporation.

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

strong presence across various financial services verticals that include life

insurance, fund management, distribution & wealth management, security based

lending, insurance broking, private equity and retail broking The seven companies

representing Aditya Birla Financial Services Group are Birla Sun Life Insurance

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

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

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

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

growth of 43%.

ICICI Prudential

ICICI Prudential is a stiff competitor for HDFC SLIC. The company is a merger

between ICICI Bank which is the biggest private bank in India and Prudential Plc

which is a global life insurance company. The company has an investment plan

which is market related – Invest ShieldLife. In this plan even if the market falls, the

premium will be returned to investors. It is a guaranteed plan which ensures the

company carefully nvests your money. The stock market performance of ICICI

Prudential is much better than HDFC SLIC. The returns on the growth fund were

46.28%compared to the 42.70% offered by HDFC SLIC. Customers are attracted by

higher returns and this is a plus point for Prudential.

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

television, newspapers, magazines, bill boards, radio etc. The company has an

excellent brand ambassador – Mr. Amitabh Bacchan. His promotion of the

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

Bajaj Allianz

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Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj

Finserv Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Both

enjoy a reputation of expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and

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

conduct General Insurance business (including Health Insurance business) in India.

The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Finserv

Limited holds 74% and the remaining 26% is held by Allianz, SE.

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

position in the industry by achieving growth as well as profitability. Bajaj Allianz has

made a profit before tax of Rs. 180 crores and has become the only private insurer

to cross the Rs.100 crore mark in profit before tax in the last four years. The profit

after tax was Rs. 121 crores, 27% higher than the previous year.

Max New York Life Insurance Company Ltd

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

Limited, one of India's leading multi-business corporations and New York Life

International, the international arm of New York Life, a Fortune 100 company. The

company has positioned itself on the quality platform. In line with its vision to be

the most admired life insurance company in India, it has developed a strong

corporate governance model based on the core values of excellence, honesty,

knowledge, caring, integrity and teamwork.

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

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

adopted prudent financial practices to ensure safety of policyholder's funds. The

Company's paid up capital as on 31 st August, 2010 is Rs 1,973 crore.

Tata AIG Life Insurance Company Limited (Tata AIG Life)

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

formed by Tata Sons and AIA Group Limited (AIA). Tata AIG Life combines Tata’s

pre-eminent leadership position in India and AIA’s presence as the largest,

independent listed pan-Asia life insurance group in the world spanning 15 markets

in Asia Pacific. Tata Sons holds a majority stake (74%) in the company and AIA

holds 26% through an AIA Group company. Tata AIG Life Insurance Company

Limited was licensed to operate in India on February 12, 2001 and started

operations on April 1, 2001.

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COMPANY PROFILEOF HDFC LIFE

INSURANCE COMPANY LTD.

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HDFC LIFE INSURANCE COMPANY LIMITED

Introduction :

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

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

Housing Development Finance Corporation Limited (HDFC), India's leading

housing finance institution and Standard Life plc, the leading provider of

financial services in the United Kingdom.

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

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

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

needs such as Protection, Pension, Savings, Investment and Health. Customers

have the added advantage of customizing the plans, by adding optional

benefits called riders, at a nominal price. The company currently has 29 retail

and 5 group products in its portfolio, along with five optional rider benefits

catering to the savings, investment, protection and retirement needs of

customers.

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

companies with more than 500branches servicing customer needs in over 700

cities and towns. The company has a strong base of Financial Consultants.

Parentage:

HDFC Limited

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

3.8 million families own a home, since its inception in 1977 across 2400 cities and

towns through its network of over 289 offices. It has international offices in Dubai,

London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and

Oman to assist NRI's and PIO's to own a home back in India. As of March 2011, the

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total asset size has crossed more than Rs. 1,32,727crores including the mortgage

loan assets of more than Rs.1,17,126 crores. The corporation has a deposit base of

over Rs. 24,625 crores, earning the trust of nearly one million depositors. Customer

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

benchmarks for the Indian housing finance industry. Recognition for the service to

the sector has come from several national and international entities including the

World Bank that has lauded HDFC as a model housing finance company for the

developing countries. HDFC has undertaken a lot of consultancies abroad assisting

different countries including Egypt, Maldives, Mauritius, Bangladesh in the setting

up of housing finance companies.

Standard Life Plc.

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

and investments to around 6 million customers worldwide. Â Headquartered in

Edinburgh, Standard Life has around 9,000 employees across the UK, Canada,

Ireland, Germany, Austria, India, USA, Hong Kong and mainland China. The

Standard Life group includes savings and investments businesses, which operate

across its UK, Canadian and European markets; corporate pensions and benefits

businesses in the UK and Canada; Standard Life Investments, a global investment

manager, which manages assets of over £157bn globally; and its Chinese and

Indian Joint Venture businesses. Â At the end of April 2011 the Group had total

assets under administration of £198.4bn. Standard Life plc is listed on the London

Stock Exchange and has approximately 1.5 million individual shareholders in over

50 countries around the world.

Visions and Values:

Vision

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

are the most trusted company, the easiest to deal with, offer the best value for

money, and set the standards in the industry'.

'The most obvious choice for all'.

Values

Values that we observe while we work:

Integrity

Innovation

Customer centric

People Care "One for all and all for one"

Team work

Joy and Simplicity

Associated Companies

HDFC Limited HDFC Bank

HDFC Mutual Fund HDFC Sales

29

HDFC ERGO General Insurance HDB Financial Services

HDFC Securities

Other Companies

HDFC Trustee Company Ltd. GRUH Finance Ltd.

HDFC Developers Ltd.

HDFC Property Ventures Ltd.

HDFC Ventures Trustee Company Ltd.

HDFC Investments Ltd.

HDFC Holdings Ltd.

Credit Information Bureau (India) Ltd

HDFC Securities

HDB Financial Services

PRODUCT RANGE

Savings Plans : Under the Savings Plans following plans are available.

Endowment Assurance (EA) Plan:

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

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

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

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

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

Children’s Plan:

30

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

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

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

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

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

MONEY Back (MB) Plan:

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

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

year interval during the term of policy.

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

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

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

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

the earlier payouts.

Protection Plans:

Under the protection plan the following are available:

Term Assurance (TA) Plan:

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

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

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

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

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

Loan Cover Term Assured (LCTA) Plan: This provides a lump sum on the

unfortunate death of the life assured during the term of the plan. The lump

sum will be decreasing percentage of the initial sum assured. As the

31

outstanding loan decrease as per the loan schedule, the cover under the policy

decrease as per the policy schedule. Since this is non-participating (without

profits) pure risk cover plan, no benefits are payable on survival to the end of

the term of the policy.

Retirement Plan:

Under the retirement plan the following plan is available:

Personal Pension Plan:

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

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

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

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

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

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

Health Plans:

HDFC critical care plan

HDFC surgical plan

GROUP TERM INSURANCE PLAN

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

some type of life insurance, especially when others depend on them financially

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

for companies to reinforce their bond with their employees. The sort of needs,

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

Employee benefits

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

A GTI cover for future service gratuity liability to be taken along with the

HDFC Group Unit Linked Plan

32

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

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

feature , where a discount is given on future premiums in case of favorable claim

experience (subject to group size).

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

One year renewable term insurance plan

One master policy issued covering all members of the group

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

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

comprehensive than Group Personal Accident Insurance. Several multinational

corporations, large Indian companies, foreign banks and software companies have

already chosen the HDFC Group Term Insurance, an innovative product from HDFC

Standard Life Insurance, to protect their employees.

Optional Rider Benefits

Accidental Death Benefit

Total Permanent Disability

Total Permanent and Partial Disability Benefit

Critical Illness Benefit

Terminal Illness Benefit

GROUP VARIABLE TERM INSURANCE

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

institutions. HDFC Standard Life Insurance Company will offer life insurance to

customers of one or more of the third party's specific products in order that in the

event of their death, there will be a lump sum available.

The Group Variable Term Insurance:

33

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

varies over time in order that the customer receives the cover that they need

Is a group policy

Has no lengthy underwriting procedure

Is simple to administer

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

GROUP UNIT LINKED PLAN

Gratuity Schemes

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

termination of employment. This gratuity is in the form of a one-off payment made

on termination of employment. It depends on salary and number of years of

service, so will therefore increase with time. The HDFC Group Unit Linked plan is a

new and innovative unit-linked plan, which offer employers and gratuity scheme

trustees a flexible and cost effective way to fund this gratuity liability. The plan

helps a corporate by:

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

gratuity liability

Providing the opportunity to maximize investment returns and thus provide

the benefit in a cost-effective manner

GROUP UNIT LINKED PLAN

Leave Encashment Schemes

Many employers provide their employees with the option of encashing their leave

to their credit at the time of retirement or resignation. Accounting Standard 15

requires that an actuarial valuation of a company leave encashment liability be

carried out and reflected in the books of accounts. The HDFC Group Unit Linked

34

Plan is an innovative plan, which offers employers a flexible and cost effective way

to fund this Leave Encashment liability. The plan helps an organization by:

Creating a fund that can be built up to meet your future leave encashment liability.

Providing the opportunity to maximize investment returns and thus provide the

benefit in a cost-effective manner

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

management charges are the lowest in the industry today and therefore can

improve your long-term returns.

HDFC SL GROUP SAVINGS PLAN

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

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

HDFC SL GROUP SAVINGS PLAN is a simple conventional group plan wherein the

company/affinity group is the policyholder & the group members

/employees/depositors are the scheme members.

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

Provide financial protection to their loved ones

Build savings in a simple & systematic manner

Pay premiums only for a limited period of 5 years is simple to administer

COMPANY PROFILE OF LIC

Introduction

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, 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

35

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, 109

divisional offices, 8 zonal offices, 992 satellite offices and the Corporate office.

LIC’s Wide Area Network covers 109 divisional offices and connects all the

branches through a Metro Area Network. LIC has tied up with some Banks and

Service providers to offer on-line premium collection facility in selected cities.

LIC’s ECS and ATM premium payment facility is an addition to customer

convenience. Apart from on-line Kiosks and IVRS, Info Centers have been

commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad,

Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy

access to its policyholders, LIC has launched its SATELLITE SAMPARK

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

digitalized records of the satellite offices will facilitate anywhere servicing and

many other conveniences in the future.

Objectives

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

socially and economically backward classes with a view to reaching all

insurable persons in the country and providing them adequate financial cover

against death at a reasonable cost. 

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

savings adequately attractive.

36

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 the

moneys belong to the policyholders.

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

capacities.

Meet the various life insurance needs of the community that would arise in

the changing social and economic environment.

Involve all people working in the Corporation to the best of their capability

in furthering the interests of the insured public by providing efficient service

with courtesy.

Promote amongst all agents and employees of the Corporation a sense of

participation, pride and job satisfaction through discharge of their duties

with dedication towards achievement of Corporate Objective.

Product and services

Insurance Plan

The Whole Life PolicyThis 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

37

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.

The Whole Life Policy- Limited Payment

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

Assured to pay all the premiums during the ordinarily vigorous and most

productive years of life. He need not pay any premium in the later stages of life if

and when his conditions might become adverse.

With Profits Limited Payments Policies do not cease to participate in profits after

completion of the premium paying period but continue to share in the periodical

Bonus Distribution until the death of the Life Assured.

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

any more premium, a reduced paid-up assurance policy comes into force.

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

declared thereafter, but such Bonus as has already been declared on the Policy will

remain attached thereto. The premium paying term under this plan is five years

minimum and 55 years maximum.

The Whole Life Policy- Single Premium

38

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

Life Assured to pay the premium during the ordinarily vigorous and most

productive years of life, relieving him from the necessity of making payments

later in life when they might become a burden.

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

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

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

Jeevan Anand

This plan is a combination of Endowment Assurance and Whole Life plans. It

provides financial protection against death throughout the lifetime of the life

assured with the provision of payment of a lump sum at the end of the selected

term in case of his survival.

Premium:

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

deductions as opted by you throughout the selected term of the policy or till

earlier death.

Bonuses:

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

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

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

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

the plan. Bonuses will be added during the selected term or till death, if it occurs

earlier. Final (Additional) Bonus may also be payable provided the policy has run

for certain minimum period.

Jeevan Tarang

39

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

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

Period or on earlier death. Further, the Sum Assured, along with Loyalty Additions,

if any, is payable on survival to age 100 years or on earlier death. The plan offers

three Accumulation periods – 10, 15 and 20 years. A proposer may choose any of

them. Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly

intervals or through salary deductions over the Accumulation Period. Alternatively,

a Single Premium can be paid on commencement of a policy.

Two Year Temporary Assurance Policy

The Convertible Term Assurance Policy

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

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

Assurance Policy, but hope to be able to pay for such a policy in the near future.

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

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

be made.

Policy holders get an option of converting an policy into endowment assurance

or limited payment whole life assurance.

Anmol Jeevan-I

Amulya Jeevan-I

40

On Death during the Term of the Policy Sum Assured

On Maturity Nil

On Death during the Term of the Policy Sum Assured

On Maturity Nil

Jeevan Saathi

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

The plan provides financial protection against death of both the lives. It pays

the maturity amount on survival of one or both the lives to the end of the policy

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

salary deductions as opted by you throughout the term of the policy or till the

first death of the lives covered, whichever is earlier.

Bima account plans

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

which you can be covered without undergoing any medical examination subject to

certain conditions.

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

1. Simplicity

2. Liquidity

3. Guaranteed minimum return

4. No medical examination

5. Transparent charges

6. Risk cover

41

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

credited to the Policyholder’s Account maintained separately for each policyholder.

The risk cover will be provided by deduction of mortality charges from the

Policyholder’s Account.

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

earn an annual interest rate of 6% p.a. which will be guaranteed for whole of the

policy term. In addition to this guaranteed return, if all due premiums are paid,

your account may earn an additional return depending upon the experience under

this plan.

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

increase in risk cover.

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

Endowment plans

This is a unit linked Endowment plan which offers investment cum insurance cover

during the term of the policy. You can choose the level of insurance cover within

the limits, which will depend on the mode and level of premium you agree to pay.

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

investment funds available. Premiums paid after deduction of allocation charge will

purchase units of the Fund type chosen. The Unit Fund is subject to various charges

and value of units may increase or decrease, depending on the Net Asset Value

(NAV).

Childrens plan

This plan is specially designed to meet the increasing educational, marriage and

other needs of growing children. It provides the risk cover on the life of child

42

not only during the policy term but also during the extended term (i.e. 7 years

after the expiry of policy term). A number of Survival benefits are payable on

surviving by the life assured to the end of the specified durations.

Plans for handicapped dependent

Plans for high worth individual

Money back plan

Pension plans

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

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

cover.

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

investment funds available. Premiums paid after deduction of allocation charge will

purchase units of the Fund type chosen. The Unit Fund is subject to various charges

and value of units may increase or decrease, depending on the Net Asset Value

(NAV).

Unit plans

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

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

cover.

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

investment funds available. Premiums paid after deduction of allocation charge will

purchase units of the Fund type chosen. The Unit Fund is subject to various charges

and value of units may increase or decrease, depending on the Net Asset Value

(NAV).

43

Special plans

Health plus plan

Golden jubilee plan

Micro insurance plan

Group schemes

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

groups of people. Administration of the scheme is on group basis and cost is low.

Under Group (Term) Insurance Scheme, life insurance cover is allowed to all the

members of a group subject to some simple insurability conditions without

insisting upon any medical evidence. Scheme offers covers only on death and there

is no maturity value at the end of the term.

44

ANALYSIS

AND

INTERPRETATION

45

Demographic Variables

AGE GROUP OF THE RESPONDENTS

Age Group No. of Respondents

Percentage

18-25 20 1826-35 39 3536-45 25 2446-55 19 17More than 55 7 6Grand total 110 100

Analysis: Out of the total 110 samples taken highest were in the age group of 46-

55(39,36%), 25 in the age group of 36-45, 20 in the age group of 18-25 and 19 in

the age group of46-55 and only 7 in the age group of more than 55 respectively.

This shows that mostly people in the age group of 25-55 should be targeted.

46

GENDER OF THE RESPONDENTS

Sex No. of Respondents

Percentage

Male 93 85Female 17 15Grand Total 110 100

HIGEST QUALIFICTION OF THE RESPONDENTS

Qualification No. of Respondents

Percentage

10th 5 512th 7 6Graduation 61 55Post graduation 37 34Grand total 110 100

47

Analysis: Out of the total 110 samples taken highest were in the group of graduation (61,55%), followed by post graduation 37, and only 5,7 in 10 th ,12th

standard respectively This shows that most of them had highest qualification as graduation.

OCCUPATION OF THE RESPONDENTS

Occupation No. of Respondents

Percentage

Service 50 45Self employed 39 36Student 6 5Professional 11 10House wife 4 4Grand total 110 100

48

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

Main Questions

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

No. of Years No. of Respondents

Percentage

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

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

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

years and only 4 in the group of 2-3 years respectively. This shows that mostly

49

people surveyed are residing in the town for more than 3 years and therefore can

be targeted easily.

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

No. of people known in the city

No. of Respondents

Percentage

Below 25 17 1525-50 10 950-100 12 11More than 100 71 65Grand total 110 100

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

than 100(71,65%), 17 in the group of below 25, 12 in the group of 50-100 and only

10 in the group of 25-50 respectively. This shows that mostly people surveyed

know more than 100 people well in the town and therefore more customers can be

targeted easily.

Q3) What is your average monthly income?

50

Average monthly income

No. of Respondents

Percentage

Less than 5000

7 6

5000-10000 13 1210000-20000 34 3120000-25000 14 1325000-30000 8 730000-40000 8 740000-50000 10 9More than 50000

16 15

Grand total 110 100

Analysis: Out of the total 110 samples taken highest were in the group of 10000-

20000(34,31%), 16 in the group of more than 50000,14 in the group of 20000-

25000, 13 in the group of 5000-10000,10 in the group of 40000-50000,8 in the

group 25000-3000 and 30000-40000 respectively, and only 7 in the group of less

than 5000 respectively. This shows that people with average monthly income

between 10000-50000 can be targeted and will be interested in doing any extra

activity to supplement their income and in investments with good returns and

saving income tax.

Q4) Do you need to support anyone financially?

No. of Percentage

51

RespondentsYes 45 41No 65 59Grand Total 110 100

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

support anyone financially. Rest all 65 respondents don’t have to support anyone

financially. Therefore those who need to support anyone financially would like to

supplement their income by doing any extra activity.

Q5) Do you know any of your family members or friends, who is working as Agent or Advisor for any insurance company?

No. of Respondents

Percentage

Yes 48 44No 62 56Grand Total 110 100

52

Analysis: Out of the total 110 samples taken only 48 or 44% respondents know

whether their family member or friend is working for insurance company as agent

or advisor. Rest all 62 respondents don’t know.

Q6) If ’yes’ do you know any idea about his /her role as an “Agent”/”Advisor”?

No. of Respondents

Percentage

Yes 45 41No 65 59Grand Total 110 100

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

role of their family member or friend as an agent or advisor in the insurance

company.

Q7) Would you like to supplement your income by doing any activity?

No. of Respondents

Percentage

Yes 42 38No 68 62Grand Total 110 100

53

Analysis: Out of the total 110 samples taken only 42 or 38% respondents would

like to supplement their income by doing any extra activity. Rest all 68 respondents

do not want to earn extra besides their present income. Therefore there is a scope

of about 38% for the recruitment of respondents as an agent or advisor for the

insurance company.

Q8) If you get an opportunity to supplement your income by providing financial Advice/Service, would you go for it?

No. of Respondents

Percentage

Yes 43 39

No 67 61

Grand Total 110 100

54

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

supplement their income by doing any financial advice/service. Rest all 67

respondents do not want to supplement income by providing financial services.

Therefore there is a scope of about 39% for the recruitment of respondents as an

agent or advisor for the insurance company.

Q9) How much time do you think that you can spare for doing this additional activity that will fetch you an extra income?

Average monthly income

No. of Respondents

Percentage

2 hrs per day 94 852-5 hrs per day 11 10More than 5 hrs per day

1 1

Less than 5 hrs per week

0 0

5-10 hrs per week

0 0

More than 10 hrs per week

4 4

Grand total 110 100

55

Analysis: Out of the total 110 samples taken 94 or 85% respondents would be able

to give 2 hours for an additional activity followed by 2-5 hrs per day, 4respondents

will be able to give more than 10 hours per week. Therefore most suitable time

assigned to do an additional activity will 2-5 hours.

Q10) What motivates you at your work place?

Average monthly income

No. of Respondents

Percentage

Appreciation 18 16Service 16 15Money 27 25Comfort 30 27Others 19 17Grand total 110 100

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

motivated by comfort at their workplace, 27 by money, 19 due to other

reasons ,18 by appreciation, and only16 by service. Therefore comfort is the prime

factor for employee’s motivation at workplace followed by money.

56

SUMMARY OF FIDINGS

On the overall basis of various parameters considered it can be found that:

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

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

their income by doing a financial activity.

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

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

awareness amongst people.

Lack of information about income opportunity in financial sector.

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

income.

Employees are highly motivated by comfort and money at workplace.

CONCLUSION

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

happens to be a mega opportunity in India. It’s a business growing at the rate of

15-20 per cent annually . Together with banking services, it adds about 7% to the

country’s Gross Domestic Product (GDP).The gross premium collection is nearly 2%

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

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

health insurance and non-life insurance continues to be below international

standards. A large part of our population is also subject to weak social security and

pension systems with hardly any old age income security. This in itself is an

indicator that growth potential for the insurance sector in India is immense.

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

development as it provides long term funds for infrastructure development and

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

ten years India would require investments of the order of one trillionUS dollars.

57

The Insurance sector, to some extent, can enable investments in infrastructure

development to sustain the economic growth of the country.

SUGGESTIONS AND RECOMMENDATIONS

Advertise about company and its product

Motivates individuals to purchase products

Create positive perception about insurance

Promote insurance at college level and corporate houses

Improve efficiency in operations

Diversify product portfolio

Bring out policies with small premium

Attract youth of India to insurance sector

Provide peaceful environment at workplace

Provide high return investment plans

Deliver good customer services

58

BIBLIOGRAPHY

1. www.hdfclife.com

2. www.licindia.com

3. www.birlasunlife.com

4. www.icicipulife.com

5. www.bajajallianz.com

6. www.moneycontrol.com

7. www.irdaindia.com

8. www.google.com

59

ANNEXURE

QUESTIONNAIRE

Name of the person contacted: Sex: Male/Female

Age:

Address

Status: Single/Married Contact no. :

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

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

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

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

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

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

Q3. What are your hobbies and interests?

Q4. What is your average monthly income?

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

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

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

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

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

for any insurance company? [Yes/No]

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

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

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

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

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

60

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

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

Q13. What motivates you at your work place?

Appreciation/Service/Money/Comforts in life/ Others (Please specify)

Name of the surveyor:

Location:

Date:

61