CHAPTER - 1
1.1 GENERAL INTRODUCTION
Insurance is a protection against financial loss arising on the happening of
an unexpected event. You cannot take anything for granted in life.
Insurance is system by which the losses suffered by a few are spread over
many, exposed to similar risks. Insurance policies are a safeguard against
the uncertainties of life. Insurance policy helps in not only mitigating risks
but also provides a financial cushion against adverse financial burdens
suffered. Insurance policies cover the risk of life as well as other assets and
valuables such as home, automobiles, jewelry etc. Insurance policies can be
classified into two categories. Which are given below: -
Life Insurance PolicyGeneral Insurance Policy
Life insurance is a guarantee that your family will receive financial support,
even in your absence. It thus protects to your family from the financial
crises. It serves as a protective cover to your family, life insurance acts as
flexible money-saving scheme, which empowers you to accumulate wealth-
to buy a new car, get your children marriage and even retire comfortably.
Life insurance also triples up as an ideal tax-saving scheme.
Need of Life Insurance
In modern day investments include gold, property, fixed income
instruments, mutual funds and of course, life insurance. Given the excess of
choices, it becomes very important to make the right choice when investing
your hard-earned money. Life insurance is a unique investment that helps
you to meet your dual needs - saving for life's important goals, and
protecting your assets.
Manish Chandra (A8752533)(A8752533)
1
Some unique benefits of life insurance in detail:-
Asset Protection
From an investor's point of view, an investment can play two roles - Asset
Appreciation and Asset Protection. Most of the financial instruments have
the underlying benefit of asset appreciation. Life insurance is unique in that
it gives the customer the reassurance of asset protection, along with a
strong element of asset appreciation.
Life insurance or Life Assurance is a contract between the policy owner
and the insurer, where the insurer agrees to pay a sum of money upon the
occurrence of the insured individual's or individuals' death. In return, the
policy owner (or policy payer) agrees to pay a stipulated amount called a
premium at regular intervals or in lump sums (so-called "paid up"
insurance). There may be designs in some countries where: (Assets, Bills,
and death expenses plus catering for after funeral expenses should be
included in Policy Premium. Anyone whose assets equal more than the
value of their primary residence should not be compensated beyond that
value in case they cannot sell their house. In the case of those who have lost
their spouse should be compensated also for one full year the wages of their
spouse which would or should be included to avoid lawsuits.) However in
the United States, the predominant form simply specifies a lump sum to be
paid on the insured's demise.
As with most insurance policies, life insurance is a contract between the
insurer and the policy owner (policyholder) whereby a benefit is paid to the
designated Beneficiary (or Beneficiaries) if an insured event occurs which is
Manish Chandra (A8752533)(A8752533)
2
covered by the policy. To be a life policy the insured event must be based
upon life (or lives) of the people named in the policy.
Insured events that may be covered include:
1. Death
2. Accidental death
3. Sickness
Life policies are legal contracts and the terms of the contract describe the
limitations of the insured events. Specific exclusions are often written into
the contract to limit the liability of the insurer; for example claims relating
to suicide (after 2 years suicide has to be paid in full) (in India after one
year Suicide is covered), fraud, war, riot and civil commotion.
Manish Chandra (A8752533)(A8752533)
3
1.2 OBJECTIVES OF THE STUDY
1. To analyze the potential of Life Insurance in Investment Industry.
2. To get better understanding of various Life Insurance Product.
3. To compare the performance of various Life Insurance Companies.
4. To evaluate various need of customers for Life Insurance and their
purchase behavior
5. To know the level of brand awareness of HDFCSLI among the
consumers.
Manish Chandra (A8752533)(A8752533)
4
1.3 INDUSTRY PROFILE
a) Origin and Development of Insurance Industry
Insurance began as a way of reducing the risk of traders, as early as
5000 BC in China and 4500 BC in Babylon. Life insurance dates only to
ancient Rome; "burial clubs" covered the cost of members' funeral expenses
and helped survivors monetarily. Modern life insurance started in late 17th
century England, originally as insurance for traders: merchants, ship
owners and underwriters met to discuss deals at Lloyd's Coffee House,
predecessor to the famous Lloyd's of London.
The first insurance company in the United States was formed in
Charleston, South Carolina in 1732, but it provided only fire insurance. The
sale of life insurance in the U.S. began in the late 1760s. The Presbyterian
Synods in Philadelphia and New York created the Corporation for Relief of
Poor and Distressed Widows and Children of Presbyterian Ministers in
1759; Episcopalian priests organized a similar fund in 1769. Between 1787
Manish Chandra (A8752533)(A8752533)
5
and 1837 more than two dozen life insurance companies were started, but
fewer than half a dozen survived.
Prior to the American Civil War, many insurance companies in the
United States insured the lives of slaves for their owners. In response to
bills passed in California in 2001 and in Illinois in 2003, the companies have
been required to search their records for such policies. New York Life for
example reported that Nautilus sold 485 slaveholders life insurance policies
during a two-year period in the 1840s; they added that their trustees voted
to end the sale of such policies 15 years before the Emancipation
Proclamation.
b) Growth & Present Status of Insurance Industry
Before insurance sector was opened to the private sector Life
Insurance Corporation (LIC) was the only insurance company in India. After
the opening up of Insurance sector in India there has been a glut of
insurance companies in India. These companies have come up with
innovative and flexible insurance policies to cater to varying needs of the
individual. Opening up of the Insurance sector has also forced the LIC to
tighten up its belt and deliver better service. All in all it has been a bonanza
for the consumer.
Major Life insurance Companies in India are:
Manish Chandra (A8752533)(A8752533)
6
1. Aviva Life Insurance
2. Bajaj Allianz
3. Birla S un Life Insurance
4. HDFC Standard Life Insurance
5. ICICI Prudential
6. ING Vysya
7. Kotak Mahindra
8. LIC
9. Max New York Life Insurance
10. Metlife India Insurance
11. Reliance Life Insurance
12. SBI Life Insurance
13. Shriram Life Insurance
14. TATA AIG Life Insurance
c) Future of Insurance Industry
Many hypotheses address why the incidence of insurance has
declined in the past decade: People are anti-insurance; they're buying term
and investing the rest; changing life expectancies and delayed family
Manish Chandra (A8752533)(A8752533)
7
formation have shifted the need for insurance; buyers are more
sophisticated and prefer other products; agents are forsaking the middle
class and focusing on the wealthy; Boomers refuse to grow up, and buying
life insurance acknowledges mortality; people need less life insurance, and
with the declining need, the industry is shrinking; agents are unpleasant to
deal with; property/casualty insurance is replacing life insurance; and so on.
Clearly, a strong factor in the increase in surplus capital lies at the door of
favorable economic conditions, with equity markets up by around 10%.
Reflecting this more buoyant environment, the results also indicate that the
realistic reporters were net purchasers of equities, with the marginal
£0.4bn reversing the downward sales trend that had emerged since we
started collecting this data in 2006. The aggregate Equity Backing Ratio for
assets backing asset shares also increased over the full year moving from
39% to 43%. All in all, these results are very encouraging and while the
economic environment clearly has had its part to play, the industry has
worked hard to deliver some long awaited stability. And, in terms of the
capital with-profits insurers have at their disposal, the sector is in a far
better position to ensure that policyholder commitments are honored as
they fall due, and as such that customers are treated fairly. In conclusion,
we are looking forward to a future for the life industry characterized by
adequate capital, sound management and fair treatment of customers. We
think we are most likely to get there by adopting a more principle based,
outcome focused approach to regulation. To a significant degree this is
already happening in the areas that I have chosen to highlight today – the
emphasis now needs to be on making sure that policy decision is turned into
effective implementation.
Manish Chandra (A8752533)(A8752533)
8
CHAPTER - 2
2.1 ORIGIN OF HDFC STANDARD LIFE INSURANCE CO.LTD
HDFC Standard Life Insurance Co. Ltd was incorporated on 14th
august 2000. It is a joint venture between Housing Development Finance
Corporation Limited (HDFC Ltd.) India and UK based Standard Life
Company. Both the joint venture partners being one of the leaders in their
respective areas came together in this 81.4:18.6 joint venture to form
HDFC Standard Life Insurance Company Limited. The MD and CEO of
HDFC Standard Life Mr. Deepak Satwalekar, has given the company new
directions and has helped the company achieve the status it currently
enjoys. HDFC Standard Life brings to you a whole range of insurance
solutions be it group or individual or NAV services for corporations; they
can be easily customized as per specific needs
2.2 GROWTH AND DEVELOPMENT OF HDFCSLI
HDFC Standard Life Insurance Company Ltd. is one of India’s
leading private life insurance companies, which offers a range of individual
and group insurance solutions. It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd.), India’s leading
housing finance institution and The Standard Life Assurance Company, a
leading provider of financial services from the United Kingdom. As a joint
venture of leading financial services groups, HDFC Standard Life has the
financial expertise required to manage your long-term investments safely
and efficiently. The company has a range of individual and group solutions,
which can be easily customized to specific needs. The group solutions have
Manish Chandra (A8752533)(A8752533)
9
been designed to offer complete flexibility combined with a low charging
structure.
HDFC Standard Life Insurance is the first private life insurance
company to be granted a license by IRDA Rated by ‘Business world’ as
‘India’s Most Respected Private Life Insurance Company’ in 2004 Has
grown over 130% in the last year, with more than 8 lakh policyholders Has
one of the widest branch networks with offices in over 100 cities servicing
over 440 towns Has the highest brand recall, close to 80% (Source: AC
Neilson ORG MARG, April 2005). HDFC Standard Life, one of the leading
private insurance companies in the country, is in an expansion mode in the
state of Madhya Pradesh. The company has inaugurated its branch office in
Morena and will subsequently open offices in Datia, Bhind and Dabra by the
second week of May 2007.' This expansion comes in line with the company’s
strategy to strengthen its presence in the state of Madhya Pradesh, thereby
also consolidating its premier position in the insurance business in India.
Speaking on its increasing presence in the region, Mr. Deepak Satwalekar,
CEO & MD HDFC Standard Life Insurance said, “The Company wants to
be as close to its customers as possible and wants to ensure complete
customer convenience and delight. We felt the need to increase our spread
in MP because of its growing potential and hence expansion is an obvious
choice.” With the launch of four branches consecutively in the region,
HDFC Standard Life’s presence will increase to 13 branch locations and 16
spoke locations in MP.
Manish Chandra (A8752533)(A8752533)
10
Track Record so far
The cumulative premium income, including the first year premiums
and renewal premiums is Rs. 1532.21 Crores in FY 2005 - 06. The company
has covered over 1.6 million individuals, out of which over 5,00,000 lives
have been covered through their group business tie-ups. The company also
declared their 5th consecutive bonus in as many years for their
policyholders.
Key Dates
7th May 2007 - HDFC Standard Life expands its reach to smaller cities in
Madhya Pradesh
15th February 2007 - HDFC Standard Life expands it’s reach in Vidarbha
16th May 2006 - HDFC Standard Life records impressive growth
7th February 2006 - HDFC Standard Life records impressive growth
29th November 2005 - HDFC Standard Life posts strong growth
Manish Chandra (A8752533)(A8752533)
11
16th August 2005 - HDFC Standard Life grows faster than the private
sector average
16th May 2005 - HDFC Standard Life declares results for FY 2004-05
2.3 PRESENT STATUS OF HDFCSLI
Nationally HDFC Standard Life Insurance covers over 693 cities and
towns through its offices in India with over 79,000 Financial Consultants
appointed by the company. HDFC Standard Life Insurance also has 833
corporate agents and other sales intermediaries including banks for
distribution of insurance products. HDFC Standard Life’s Product
portfolio comprises solutions, which meet various customer needs, like
Protection, Pension, Savings and Investment. Customers have the added
advantage of customizing the Plans, by adding optional benefits called
riders, at a nominal price. The company currently has 21 retail and 6 group
products in its portfolio. HDFC Standard Life maintains very high
professional standards, during product offerings, by providing sound
financial advice, efficient post-sale service and immaculate financial
security. Ongoing training for conventional products, and specialized
training, for unit-linked products, for its financial consultants, has also
helped its customers choose the product, best suited for their needs.
Manish Chandra (A8752533)(A8752533)
12
2.4 FUTURE PLANS OF HDFCSLI
HDFC Life Insurance Ltd is targeting a 250 per cent growth in its first
premium income in 2009-09 and will soon infuse a further Rs 37.5 cr. to its
Manish Chandra (A8752533)(A8752533)
13
existing share capital of Rs 255.5 cr. "Major expansion of branches, higher
productivity and contribution from unit-linked products will enable the
company to achieve this high growth in current year," said Pankaj Seith,
head, alternative channels, HDFC Standard Life Insurance. Over the next 3-
4 years, the company will increase its capital base to Rs 700-800 cr. The
company will increase its branch network from 60 to 103 by the end of
2008-09. In Gujarat, the company is doubling its branch network from 4 to 8
branches by setting up branches at Vapi, Gandhidham, Bhavnagar and
Jamnagar. "Business growth in Gujarat has been higher than the national
average during FY07 and that is why the company has decided to double its
network," said Sanjay Vij., regional manager of Gujarat. The state
constitutes for around 7-8 per cent of the national business. "The unit-
linked product launched by the company in January 04 has met with a
strong response from Gujarat as it offers partial investment in equities. As
against the national growth of 30-35 per cent, the unit-linked business in
Gujarat has grown by 40-45 per cent." HDFC Life is also pushing sales
through the bank assurance route. "The company is in talks with a few
banks and even some cooperative banks in Gujarat and elsewhere for
marketing insurance products. Currently, HDFC Bank, Union Bank of India,
Indian Bank and Saraswat Bank are selling HDFC Life products and
contribute to around 25 per cent of total business," said Seith. A special
bank assurance product is going to be launched in future. The company has
met its rural market targets and as against 12 per cent of total policies sold
in FY09, it will raise it to 14 per cent in current year.
Manish Chandra (A8752533)(A8752533)
14
2.5 FUCTIONAL DEPATMENT OF HDFCSLI:
Customer service and Operation
The Operations department oils the work processes between the
customer and the company to ensure consistent and quality service to the
customer. To streamline the operations, the Operations department
interfaces between the clients and the agents, the branches and the
underwriters, and manages work processes.
The Vision at Customer Service is to deliver 'World Class Service' at every
opportunity. Units such as the 9 to 9 contact centre, Outbound Call Centre,
Customer Care and Query Resolution Unit are all committed to providing
effective solutions to over lakhs of customers across the country.
Information Technology
The Information Technology function at HDFC Standard Life
Insurance is committed to enable business through the use of technology. It
is segmented into 4 groups to enable highest levels of delivery to the
customers: Life Asia Solutions Group that provides flexibility in designing
better product offerings to end-users, the Solutions Group- Web that
provides real-time information to customers and is responsible for customer
relationship management, IT Architecture & Corporate Solutions Group is
in charge of developing and maintaining a blueprint for the IT architecture
for the enterprise as a whole. This team works as an in house R&D Solution
Group, exploring new technological initiatives and also caters to
information needs of corporate functions in the organization. IT
Infrastructure group is responsible for providing hardware, software,
network services to the whole organization. This group runs the 'Digital
Nervous System' of the Enterprise at the highest levels of efficiency and
Manish Chandra (A8752533)(A8752533)
15
provide robust, scalable and highly available platform for deployment of
business application.
Marketing
The Marketing function at HDFC Standard Life Insurance covers an
array of activities - brand and media management, channel support, direct
marketing and corporate communications. The Brand and Communications
team is in charge of advertising, consumer research, media planning &
buying and Public Relations; that helps develop and nurture HDFC
Standard Life Insurance corporate identity while effectively communicating
its varied product offerings to the customer. Channel marketing provides
support to the sales force by streamlining the design and development of
collaterals and sales tools across distribution channels. The Direct
marketing team was set up to generate high quality leads for profitable
business. The team achieves this through target database acquisition and
communicating customized product information through e-mailers,
telemarketing and innovative direct mailers.
Sales
Is the act of meeting buyers and providing them with a service for a
negotiated compensation. It forms an integral part of commercial activity.
Selling is a practical implementation of marketing; it often forms a separate
grouping in a corporate structure, employing separate specialist operatives
known as salespersons (singular: salesperson). Sales are considered by
many to be a sort of persuading "art". Contrary to popular belief, the
methodological approach of selling refers to a systematic process of
Manish Chandra (A8752533)(A8752533)
16
repetitive and measurable milestones, by which a salesperson relates his
offering of a product of service in return enabling the buyer to achieve his
goal in an economic.
Sales Techniques-
The sale can be made through:
Direct Sales, involving person to person contact
Pro forma sales
Agency-based
sales agents (real estate, manufacturing)
Consultative sales
Complex sales
consignment
telemarketing or telesales
retail or consumer
door-to-door or traveling salesman
Request for Proposal is an invitation for suppliers, through a
bidding process, to submit a proposal on a specific product or
service. An RFP is usually part of a complex sales process, also
known as enterprise sales.
Business-to-business — Business-to-business sales are much
more relationship based owing to the lack of emotional
attachment to the products in question. Industrial/Professional
Sales is selling from one business to another
Electronic
Web — Business-to-business and business-to-consumer
Electronic Data Interchange (EDI) is a set of standards for
structuring information to be electronically exchanged between
and within businesses
Manish Chandra (A8752533)(A8752533)
17
Indirect, human-mediated but with indirect contact
Mail-order
Sales/Marketing relationship-
The marketing department's goal is to bring people to the sales team
using promotional techniques such as advertising, sales promotion,
publicity, and public relations. In most large corporations, the marketing
department is structured in a similar fashion to the sales department and
the managers of these teams must coordinate efforts in order to drive
profits and business success. Driving more customers "through the door"
gives the sales department a better chance by ratio of selling their product
to the consumer Distribution is one of the 4 aspects of marketing. A
distributor is the middleman between the manufacturer and retailer. After a
product is manufactured it is typically shipped (and usually sold) to a
distributor. The distributor then sells the product to retailers or customers.
The internal market
Many of the marketing principles and techniques which are applied to
the external customers of an organization can be just as effectively applied
to each subsidiary's, or each department's, 'internal' customers. In some
parts of certain organizations this may in fact be formalized, as goods are
transferred between separate parts of the organization at a `transfer price'.
To all intents and purposes, with the possible exception of the pricing
mechanism itself, this process can and should be viewed as a normal buyer-
seller relationship. The fact that this is a captive market, resulting in a
`monopoly price', should not discourage the participants from employing
marketing techniques. Less obvious, but just as practical, is the use of
`marketing' by service and administrative departments; to optimize their
Manish Chandra (A8752533)(A8752533)
18
contribution to their `customers' (the rest of the organization in general,
and those parts of it which deal directly with them in particular).
Tied Agency
Tied Agency is the largest distribution channel of HDFC Standard
Life Insurance, comprising a large advisor force that targets various
customer segments. The strength of tied agency lies in an aggressive
strategy of expanding and procuring quality business. With focus on sales &
people development, tied agency has emerged as a robust, predictable and
sustainable business model.
Bank assurance and Alliances
HDFC Standard Life Insurance was a pioneer in offering life
insurance solutions through banks and alliances. Within a short span of two
years, and with nearly a large number of partners, B & A has emerged as a
vital component of the company's sales and distribution strategy,
contributing to approximately one third of company's total business. The
business philosophy at B&A is to leverage distribution synergies with our
partners and add value to its customers as well as the partners. Flexibility,
adaptation and experimenting with new ideas are the hallmarks of this
channel.
Finance
Finance function in HDFC Standard Life Insurance is committed to
create an infrastructure that is aligned to shareholder expectations.
Finance basically comprises of four functions. Corporate Planning and MIS
provide feedback on business strategies. This includes driving the
budgeting process, providing strategic inputs for decision-making and
management reporting and analysis. The Accounts function includes
Manish Chandra (A8752533)(A8752533)
19
preparation and maintenance of financial records, funds management, and
expense processing and treasury operations. Compliance ensures that every
action is within the regulatory framework. This includes reviewing
compliance requirements and supporting the ethical framework of HDFC
Standard Life Insurance life. Internal audit provides assurance to the
management over the organizations' control framework and includes
process risk management, information security assessment and business
continuity assessment.
HR
The people strategy of HDFC Standard Life Insurance is "To build
a committed team with a culture of innovation, learning and growth. The
Human Resource Function at HDFC Standard Life Insurance drives the
people strategy of the business. With its initial focus on operational
excellence to deliver benefits and services to staff members, HR is now
committed to building capability through state of the art processes. A
robust performance management system, compensation system and a
segmented training architecture enable it to deliver value to organization
Business
The Business Excellence function is committed to building a quality
mindset across the organization Industry that has adopted the Six Sigma
Methodology for process efficiency and measurement.
2.6 ORGANIZATIONAL STRUCTURE AND ORGANIZATIONAL CHART
HDFCSLI has a Functional structure because here the core product is
insurance. A functional structure is well suited to organizations which have
a single or dominant core product because each subunit becomes extremely
Manish Chandra (A8752533)(A8752533)
20
adept at performing its particular portion of the process. The organization
is structured according to functional areas instead of product lines. The
functional structure groups specialize in similar skills in separate units. This
structure is best used when creating specific, uniform products. They are
economically efficient, but lack flexibility. Communication between
functional areas can become efficient if there is proper coordination
between HR, Customer Service & Operation, IT, Finance, Sales and
Marketing team etc.
2.7 PRODUCT & SERVICE PROFILE OF HDFCSLI
At HDFC Standard Life, we offer a bouquet of insurance
solutions to meet every need. We cater to both, individuals as well as to
companies looking to provide benefits to their employees. This section gives
you details of all our products. We have incorporated various downloadable
forms and product details so that you can make an informed choice about
buying a policy.
For individuals, we have a range of protection, investment, pension
and savings plans that assist and nurture dreams apart from providing
protection. You can choose from a range of products to suit your life-stage
and needs.
For organizations we have a host of customized solutions that range
from Group Term Insurance, Gratuity, Leave Encashment and
Superannuation Products. These affordable plans apart from providing long
term value to the employees help in enhancing goodwill of the company.
Manish Chandra (A8752533)(A8752533)
21
Individual Products
We at HDFC Standard Life realize that not everyone has the same
kind of needs. Keeping this in mind, we have a varied range of Products
that you can choose from to suit all your needs. These will help secure your
future as well as the future of your family
Protection Plans
You can protect your family against the loss of your income or the
burden of a loan in the event of your unfortunate demise, disability or
sickness. These plans offer valuable peace of mind at a small price. Our
Protection range includes our Term Assurance Plan & Loan Cover Term
Assurance Plan.
HDFC TERM ASSURANCE PLAN
(Secure your family’s financial independence and self-respect.)
Our Protection Plans give you
An ideal way to secure the financial future of your loved ones.
High cover at a very nominal cost plus an option of adding optional
benefits to cover for other eventualities.
A choice of two plans depending on your requirements:
HDFC Term Assurance Plan: A pure risk cover plan, which gives
you protection against the uncertainties of life.
HDFC Loan Cover Term Assurance Plan: An ideal way to cover
your home loan or other loan liabilities
Choice of premium payment options-regular premium or a single one-
time premium.
Manish Chandra (A8752533)(A8752533)
22
Choice of taking the plan on a single life basis or a joint life (first claim)
basis.
The HDFC Term Assurance Plan is an insurance policy that is
designed to help secure your family's financial needs. The plan does this by
providing a lump sum to the family of the life assured in case of death or
critical illness (if option is chosen) 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.
3 EASY STEPS TO YOUR OWN PLAN
Step 1 - Choose the life cover required to secure your family's future in
your absence.
Step 2 - Choose from any one of the 3 additional optional benefits as per
your requirement.
Step 3 - Work out the premium payable along with our Financial
Consultant.
HDFC LOAN COVER TERM ASSURANCE PLAN
Our Protection Plans give you :
An ideal way to secure the financial future of your loved ones.
High cover at a very nominal cost plus an option of adding optional
benefits to cover for other eventualities.
A choice of two plans depending on your requirements:
Manish Chandra (A8752533)(A8752533)
23
HDFC Term Assurance Plan: A pure risk cover plan, which gives you
protection against the uncertainties of life.
HDFC Loan Cover Term Assurance Plan: An ideal way to cover
your home loan or other loan liabilities.
Choice of premium payment options-regular premium or a single one-time
premium.
Choice of taking the plan on a single life basis or a joint life (first claim)
basis.
Investment Plans: Our Single Premium Whole of Life plan is well
suited to meet your long term investment needs. We provide you with
attractive long term returns through regular bonuses.
HDFC Single Premium Whole of Life Plan
“Money is like manure. You have to spread it around or it
smells.”
HDFC Single Premium Whole Of Life Insurance Plan is a tailor-made
plan well suited to meet your long-term investment needs. This
participating plan offers you the following benefits:
Whole of life plan aimed at providing long-term real growth of your
money.
Single premium investment plan.
In case of your unfortunate demise during the policy term, this
participating (‘With Profits’) insurance plan will pay your family the Sum
Assured and compound Reversionary Bonuses, which are usually added
annually. An additional Terminal Bonus may be paid depending on the
Manish Chandra (A8752533)(A8752533)
24
performance of the underlying investments.
During Guaranteed Surrender Periods you get the Sum Assured and all
bonuses vested as at the date of surrender.
HDFC PERSONAL PENSION PLAN
The HDFC Personal Pension Plan is an insurance policy, which can benefit you in the following ways:
Provides a post retirement income in your golden years
Gives you the flexibility to plan your retirement date
Gives you tax benefits on your premiums
HDFC UNIT LINKED PENSION
The HDFC Unit Linked Pension gives you:
An outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments
A post retirement income for life
Flexibility to plan your retirement date
Freedom to invest premiums as per your preference
HDFC UNIT LINKED PENSION PLUS
The HDFC Unit Linked Pension Plus gives you:
Manish Chandra (A8752533)(A8752533)
25
An outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments
Regular Loyalty Units to boost your fund value every year
A post retirement income for life
Flexibility to plan your retirement date
Freedom to invest premiums as per your preference
Savings Plans
HDFC Endowment Assurance Plan
The HDFC Endowment Assurance Plan gives you:
An ideal way to secure your long-term financial goals
Valuable protection to your family by way of lump sum payment in case
of your unfortunate demise within policy term
Lump sum payment (basic Sum Assured plus any bonus additions) on
survival up to maturity date
Very flexible benefit options and payment options
HDFC UNIT LINKED ENDOWMENT
T HDFC Unit Linked Endowment Plan gives you:
An outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments
Manish Chandra (A8752533)(A8752533)
26
Valuable protection to your family in case you are not around
Flexible benefit combinations and payment options
Flexible additional benefit options such as critical illness cover
Access to your accumulated fund before maturity
HDFC UNIT LINKED ENDOWMENT PLUS
The HDFC Unit Linked Endowment Plus gives you:
An outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments
Regular Loyalty Units to boost your fund value every year
Valuable protection to your family in case you are not around
Flexible benefit combinations and payment options
Flexible additional benefit options such as critical illness cover
Access to your accumulated fund before maturity
The table below will help you identify and classify some of your financial goals. You can prioritize these
goals and set your objectives accordingly (see indicative table given below).
LONG-TERM GOALS SHORT TERM GOALS
Provide adequate cover for Life,
Critical Illness or disability Buying a car
Saving for big-ticket assets like your Saving for your marriage
Manish Chandra (A8752533)(A8752533)
27
house
Saving for your children's education Vacation abroad
Having a regular system for savings
HDFC Money Back Plan
The HDFC Money Back Plan is a ‘With Profit’ Plan that gives you:
A proportion of the basic Sum Assured as Cash lump sums at regular 5-
year intervals within the policy term (see the table given below) an ideal
way to secure your long- term as well as short-term financial goals.
A lump sum payment on survival up to maturity date.
Valuable protection to your family by way of lump sum payment in case
of your unfortunate death within the policy term. This is over and above
any earlier payouts.
HDFC CHILDREN'S PLAN
The HDFC Children's Plan gives you:
Invaluable financial support to your child
A choice to customize an ideal plan for your child
Multiple options for multiple benefits
HDFC UNIT LINKED YOUNG STAR
Manish Chandra (A8752533)(A8752533)
28
An outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments
Valuable protection to your child in case you are not around
Flexible benefit combinations and payment options
Flexible additional benefit options such as critical illness cover
Access to your accumulated fund before maturity
Pay the Sum Assured you had chosen to your child
Continue your policy AND continue to pay the original regular premiums you
had chosen
In case of your unfortunate demise during the policy term, we will:
HDFC UNIT LINKED YOUNG STAR PLUS
The HDFC Unit Linked Young Star Plus gives you:
An outstanding investment opportunity by providing a choice of
thoroughly researched and selected investments
Regular Loyalty Units to boost your fund value every year
Manish Chandra (A8752533)(A8752533)
29
Valuable protection to your child in case you are not around
Flexible benefit combinations and payment options
Flexible additional benefit options such as critical illness cover
Access to your accumulated fund before maturity
PRODUCT BASKET
INDIVIDUAL PRODUCTS
Protection Plans:
HDFC TERM ASSURANCE PLAN
HDFC LOAN COVER TERM ASSURANCE PLAN
Investment Plans:
HDFC Single Premium Whole of Life Plan
Pension Plans:
HDFC PERSONAL PENSION PLAN
HDFC UNIT LINKED PENSION
HDFC UNIT LINKED PENSION SUPER
Savings Plans:
HDFC Endowment Assurance Plan
HDFC UNIT LINKED ENDOWMENT PLAN
HDFC UNIT LINKED ENDOWMENT SUPER
Manish Chandra (A8752533)(A8752533)
30
Children Plan:
HDFC CHILDREN'S PLAN
HDFC UNIT LINKED YOUNG STAR
HDFC UNIT LINKED YOUNG STAR SUPER
GROUP PRODUCTS
HDFC GROUP TERM INSURANCE PLAN
HDFC GROUP VARIABLE TERM INSURANCE
HDFC GROUP UNIT LINKED PLAN
SOCIETY PRODUCTS
DEVELOPMENT INSURANCE PLAN
Premium Payment
6 Easy Ways to pay your premium:
Lapse & Revival
Manish Chandra (A8752533)(A8752533)
31
Your renewal premium should reach us by the due date specified in
the premium reminders. It is always advisable to pay on time so that your
valuable policy benefits can continue.
Policy Servicing
Change in personal details
Change in policy benefits
Others such as loss of policy, look- in option etc.
This section is designed to give you information that you may require
incase you wish to make changes in Personal details or Policy details in
your existing policy. The changes that you can avail of are:
Claims
We understand that bereavement can be difficult to deal with,
specially when you have to arrange for all the formalities in case of
insurance claims.
At HDFC Standard Life we lend a helping hand by enabling faster
settlement of claims and help the family financially at the time of distress.
For any assistance or query relating to reporting claims (Death
Claims /
Critical Illness Claims) you may get in touch with us by emailing us at
[email protected] and we will get back to you with the details that
will be required to process a claim.
Death claim form
Original Policy Document
Manish Chandra (A8752533)(A8752533)
32
A copy of death certificate issued by Municipal Corporation / Government*
Proof of identity of beneficiary viz passport or Election ID or Pan CardOr Driving License.
Proof of residence of beneficiary viz Electricity bills or Ration card ortelephone bill or passport (bills not greater than 3 months)
2.8 MARKET PROFILE OF THE ORGANIZATION
HDFC Standard Life Insurance holds market share of 8.7% and ranks
4 among the private sectors. HDFCSLI expecting to capture 12% of market
share by 2009 and to be in top position among the private sector. The
company is increasing the brand awareness through continuous
advertisement on TVC and print. Company is focusing on complete solution
of investment for the customer delighting them through their service and
return on their investment. The Marketing function at HDFC Standard Life
Insurance covers an array of activities - brand and media management,
Manish Chandra (A8752533)(A8752533)
33
channel support, direct marketing and corporate communications. The
Brand and Communications team is in charge of advertising, consumer
research, media planning & buying and Public Relations; that helps develop
and nurture HDFC Standard Life Insurance corporate identity while
effectively communicating its varied product offerings to the customer.
Channel marketing provides support to the sales force by streamlining the
design and development of collaterals and sales tools across distribution
channels. The Direct marketing team was set up to generate high quality
leads for profitable business. The team achieves this through target
database acquisition and communicating customized product information
through e-mailers, telemarketing and innovative direct mailers.
Manish Chandra (A8752533)(A8752533)
34
CHAPTER - 3
3.1 STUDENT WORK PROFILE (ROLE & RESPONSIBILITES)
I am working in HDFCSLI as a FINANCIAL CONSULTANT &
RECRUITMENT CONSULTANT.
FINANCIAL CONSULTANT: Major responsibility handed over me is
to generate lead of potential customer through contacts, references and
activities. Also telemarketing through the existing data base given by the
manager. Once the appointment are fixed I have to meet the customer
interact with them convince them about the product after analyzing their
need & requirement. Helping the customer to fill the form collecting the
document and finally handing it to sales manager for logins
3.2 DESCRIPTION OF LIVE EXPERIENCE
Working in HDFCSLI has helped me to gain lots of experience in sales
and marketing field. I came to about the insurance business how it works
and it gave me an idea that insurance business starts with is one sale
business that is it entirely depend on networking. During the initial stage of
my joining I was not able to sell the products it was early 30 days when I
Manish Chandra (A8752533)(A8752533)
35
was not giving any business to my sales manager. I was de-motivated but at
that time my manager helped me and makes me understand where I was
going wrong. He told me to sell the product first to whom you know rather
that calling customer through data base in which first the customer agrees
and shows their interest to take the product. After following them for 10-20
they refuse to take the products. Sometime it may happens that they fix the
appointment and when I go to meet them they were not available and when
I call them they don’t pick the phone or even if they pick the cut it after
listening my voice. I was very much disappointed with such behavior of
customer. First customer whom I was able to sell the product was my friend
to whom I sold ULIP plan with initial cheque of 30000k. After completing all
the formalities and login the form I have asked him to give me some
references who are interested in taking the plan for tax saving. Since he
was a software engineer so he has given me three references. I called them
and follow them I in these three two where finally convinced and taken the
same plan. I again asked some references from them and they given few
after following I again succeed to sell the product and in this way I
developed a network in market and things are going very easily. I always
remember one quote of my manager that don’t work hard work smart.
3.3 CONTRIBUTION TO ORGANIZATION
The main contribution of an employee to its organization is to perform
his responsibilities given with 100% effort and honesty. I am working in
HDFCSLI as a Financial Consultant and Recruitment Consultant. My major
responsibility is to sell the product and recruit FC for the organization. I am
one of the top performers of my company where every month I am giving
business of 50000-60000k. For the goodwill of the company I am always
honest to tell all the facts and benefits of the product to the customer and
convince them for the right product that best suits them. After login their
Manish Chandra (A8752533)(A8752533)
36
forms I call them and do a formal call that whether they received their
documents or not and if some complication occurs with the document I take
care about them. It helps me to generate new business for the company in
one hand and getting goodwill to the company on other hand. As I have
joined recently as a recruitment consultant so my contribution is not very
huge but in one month I am able to recruit 3 FC and they all are taking
interest and doing business for the company. So my contribution to the
organization is good I am giving good business and good people to the
company who are working and doing good business. I am very much
satisfied with the level of work I am doing for the company and I am also
able to keep my sales manager happy through my performance and through
my quality of work. It was because of my dedication and hard work that my
branch manager has offered me to join as a recruitment consultant. Both I
myself and my seniors are happy with my contribution to the organization.
CHAPTER – 4
NEED AND IMPORTANCE OF THE STUDY
Since the opening up insurance market to private operations, India is considered one of the hottest place with the majority of market being untapped through there are restriction for foreign operators. Traditional and ULIP products have their own benefits and at what extent customers are aware about these products. Research is the systematic, objective and exhaustive search for and study of facts relevant to the problem.
Research design means the framework of the study that leads to the collection and analysis of the data. It is conceptual structure with in which research is conducted.
Manish Chandra (A8752533)(A8752533)
37
It facilitates smooth sailing of various research operations to make the research as effective as possible.
The study was conducted as an exploratory sampling survey method to collect primary and secondary data.
4.1 RESEARCH PROBLEM
“A study on the awareness of customers about Traditional and Unit linked investment plan of insurance policies with special reference to HDFC Standard Life Insurance.”
4.2 STATEMENT OF RESEARCH OBJECTIVES
To measure awareness among existing customers regarding HDFC’s different insurance products.
To assess customer preference towards these different insurance products.
To compare HDFC Standard Life Insurance products with other products in the market
To measure the customer satisfaction level with respect to HDFC Standard Life Products
4.3 RESEARCH DESIGN AND METHODOLOGY
Research Design:
Research Design that is followed in this report is judgment sampling. Judgment sampling was the most appropriate because the data has to be collected from the existing customer of HDFC. So research was done by approaching the customers of HDFC by visiting different branches of HDFC located at Rajajinagar, R T Nagar and Banshankari. 10 sample from each branches are picked judgmentally. Thus the total sample of 30 was taken and analyzed.
Manish Chandra (A8752533)(A8752533)
38
METHODS OF DATA COLLECTION
PRIMARY DATA
A well structured questionnaire was personally administrated to the selected sample to collect the primary data.
SECONDARY DATA
Secondary data are those which have already been collected by some other person for their purpose and published. Secondary data are usually in the shape of finished products.
Two types of secondary data were collected for the project .
INTERNAL DATA: - was generated from company’s brochures, manuals and annual report. have given valuable information for the present study.
EXTERNAL DATA: - was generated from magazines, research articles, books and internet. Magazines devoted solely to insurance news, such as Asia Insurance News, insurance chronicle-monthly insurance digest and other marketing magazines.
SAMPLING TECHNIQUES
A sample is a representative part of the population. In sampling technique, information is collected only from a representative part of the universe and the conclusions are drawn on that basis for the entire universe. A judgment sampling technique was used to collect data from respondents. Judgment sampling is a common non probability method. So while conducting the survey 30 respondents were selected at judgment.
To know the response, the researcher used questionnaire method. It has been designed as a primary research instrument. Questionnaires were distributed to respondents and they were asked to answer the questions given in the questionnaire.
The questionnaire was used as an instrumentation technique, because it is an important method of data collection. The success of the questionnaire method in collecting the information depends largely on
Manish Chandra (A8752533)(A8752533)
39
proper drafting. So in the present study questions were arranged and interconnected logically.
SCOPE OF STUDY
The respondents of this dissertation were 30 Life Insurance Policy holders of HDFC insurance company and study was focus on the awareness of Traditional and ULIP plan of insurance policies.
Questionnaire was used for survey and was answered by the customers of HDFC Standard Life Insurance Company.
Survey was done by approaching the customers of HDFC by visiting different branches located at Rajajinagar, R T Nagar and Banshankari.
Personal interview method was apply to collect the actual data for the research study, the interaction with the respondents before filling questionnaire have made them more friendly and free to give the information.
SAMPLE SIZE
Sample size denotes the number of elements selected for the study. For the present study, 30 respondents were selected at judgment. All the 30 respondents were the customers of HDFC Standard Life Insurance Company.
Limitation of study
This research work is done by approaching a small population, in a restricted geographical area. Uncontrolled factors may affect the outcome of research. So the actual result may vary from the research conducted.
4.4 ANALYSIS OF DATA AND INTERPRETATION
Manish Chandra (A8752533)(A8752533)
40
TABLE NO 4. 1: Monthly income of the respondents
Particulars No of Respondents Percentage (%)
Less than 20,000 11 37
20,000- 30,000 12 40
30,000 – 40,000 5 16
More than 40,000 2 7
Total 30 100
Analysis
There are variations in monthly income of the people and it is ranging between less than Rs 20000 to more than Rs 40000.
There are variability of income among the people which is due to their education and the stages of their career. Many of the respondents are employed (government/ private) few of them are running their own business.
Graph 4.1: Monthly income of respondents
Manish Chandra (A8752533)(A8752533)
41
From the above table it can be inferred that:
37% of the 30 respondents have a monthly income of less than 20,000
40% of the respondents have a monthly income of 20,000 – 30,0007 % of the respondents have a monthly income of more than 40, 000
TABLE NO 4.2:monthly savings of respondents
Particulars No of Respondents Percentage (%)
Less than 2,000 9 30
2,000 – 4,000 8 26
4,000 – 6,000 6 20
6,000 – 8,000 4 14
More than 8,000 3 10
Total 30 100
AnalysisPeople in Bangalore have different range of savings which is diversified according to their income level and here it ranges between less than Rs 2000 to more than Rs 8000.People are able to save their money after their expenditure which depends on their income, family size and their lifestyle. Bangalore is comparatively expensive city so the Customers are able to save very less from their earnings.
Manish Chandra (A8752533)(A8752533)
42
Graph 4.2: Monthly savings of the respondents
From the above table it can be inferred that:
30% of the 30 respondents have a monthly savings of less than 2,00010% of the respondents have a monthly savings of more than 8,000
TABLE NO 4. 3 purpose of savings of the respondents
Particulars No of Respondents Percentage (%)
Medical expenses 6 20
To buy durables 3 10
To buy jewelleries 2 7
To buy house or site 8 27
Education 9 30
Others 2 7
Total 30 100
Manish Chandra (A8752533)(A8752533)
43
Analysis
People are saving their money for various purposes like for children’s education, to buy houses, for medical expenses. Here people are more conscious about their health and education.
People have their own choice of saving their money according to their preferences. Most of the people give priorities for education, houses and health so they are saving their money for these purposes.
Graph 4.3: Purpose of savings
From the above table it can be inferred that:
20% of the 30 respondents make a monthly savings for the purpose of medical expenses.27 % of the 30 respondents make savings for the purpose to buy house or site.30 % of the 30 respondents make savings for the purpose of education.
Manish Chandra (A8752533)(A8752533)
44
TABLE NO 4.4 investment preference of the respondents:
Particulars No of Respondents Percentage (%)
Bank deposit 7 23
Insurance 6 20
Shares 4 13
Debentures 3 10
Real estate 4 13
Gold 1 4
Mutual fund 3 10
Chit fund 2 7
Others 0 0
Total 30 100
Analysis
People have so many options to invest their savings. But most of the people go for bank deposit due to the safety purposes. People have so many options where they can invest their money. Some people think about high growth and some people consider about safety. So they invest their money accordingly. Bank deposit is more preferred by the people due to security purpose even though they get comparatively less interest on it.
Manish Chandra (A8752533)(A8752533)
45
Graph 4.4: Investment Preference
From the above table it can be inferred that:
23 % of the 30 respondents preferred to make investments in the bank deposit.20 % of respondents preferred to make investments in insurance.
Manish Chandra (A8752533)(A8752533)
46
TABLE NO 4.5insurance premium is paid monthly by the respondents.
Particulars No Of Respondents Percentage (%)
Less than 1,000 06 20
1,000 – 2,000 07 23
2,000 – 3,000 12 40
3,000 – 4,000 04 14
More than 4,000 01 03
Total 30 100
Analysis
Here the people who are paying premiums Rs 2000 to 3000 are more in numbers. People pay the premiums from their savings so they decide the premium according to their savings. People have other commitments also so they plan their premium payment by considering all the expenses.
Graph 4.5: Approximate monthly insurance premium
Manish Chandra (A8752533)(A8752533)
47
From the above table it can be inferred that:
23% of the respondents pay a monthly premium of 1,000 – 2,000.40% of the respondents pay a monthly premium of 2,000 – 3,000.03% of the respondents pay a monthly premium of more than 4,000.TABLE NO 4.6 purpose for which the respondents have taken the policy.
Particulars No Of Respondents Percentage (%)
Tax purpose 15 50
Future security 06 20
Children’s Education 07 23
Marriage 00 00
Others 02 07
Total 30 100
Analysis
People are aware of tax benefits from insurance policy so more number of people is taking insurance policy for tax benefits.
According to section 80 C, investments in insurance up to Rs.1, 00,000 can be done to get tax implications, so most of the people who are in range of
Manish Chandra (A8752533)(A8752533)
48
paying tax favor to invest in insurance. Few people invest their money in insurance to get the other advantages of insurance policies.
Graph 4.6: Purpose of policy taken
From the above table it can be inferred that:
50% of the 30 respondents have taken the policy for the purpose of tax saving.20% of the respondents have taken the policy for the purpose of future security.TABLE NO 4.7 person who pay premium for the respondents.
Particulars No Of Respondents Percentage (%)
Self 23 77
Employer 03 10
Spouse 4 13
Others 0 00
Total 30 100
Analysis
Here people are paying premium for self are more in number. Head of the family pays premium for other family members also.
Manish Chandra (A8752533)(A8752533)
49
This is very common in India that head of the family takes care of his family members. Here also it can be seen that head of the family is paying premium for his family members. Most of the companies also provide the health insurance to their employee.
Graph 4.7: Person who pay premium
From the above table it can be inferred that:
77 % of the 30 respondent’s premium is paid by themselves. 10% of the respondent’s premium is paid by their employer.13% of the respondent’s premium is paid by their spouse.
TABLE NO. 4.8 whose life is insuring as per the policy taken by the respondents.
Particulars No Of Respondents Percentage (%)
Self 18 60
Spouse 6 20
Manish Chandra (A8752533)(A8752533)
50
Children 5 17
Parents 1 03
Total 30 100
Analysis
People used to take policy for their family members also. Here the number of people are more who has taken policies for themselves.
This is very common in India that head of the family takes care of his family members. This is the culture of our country so it can be seen that people are taking insurance policies for themselves as well as for their family members like for spouse, children and parents.
Graph 4.8: Person whose life is insured
Manish Chandra (A8752533)(A8752533)
51
From the above table it can be inferred that:
60% of 30 respondents have insured their life itself as per the policy taken. 03% of respondents have insured their parent’s life itself as per the policy taken.
TABLE NO4.9 level of information of the respondents regarding the products of HDFC Life Insurance.
Manish Chandra (A8752533)(A8752533)
52
Particulars No Of Respondents Percentage (%)
Good 16 53
Moderate 9 30
Poor 5 17
Total 30 100
Analysis
People having good information about the HDFC life insurance products are more in numbers. Few people are found with poor information about HDFC life insurance products. Awareness about the product of HDFC depends on the advertisement and other promotional activities. Company is very active in spreading the information about the product by using all the channels and media. Financial advisors are also playing a major role in spreading information about insurance policies to the customers.
Manish Chandra (A8752533)(A8752533)
53
Graph 4.9: Level of information about products of HDFC standard life insurance
From the above table it can be inferred that:
53% of 30 respondents have a good level of information regarding the product of HDFC standard life insurance17% of 30 respondents have a poor level of information regarding the product of HDFC standard life insurance
TABLE NO. 4.10 HDFC Standard Life Insurance Advisors who have contacted the respondents.
Manish Chandra (A8752533)(A8752533)
54
Particulars NO of Respondents Percentage (%)
Yes 18 60
No 12 40
Total 30 100
Analysis
No. of person who has been approached by HDFC Standard Life Insurance Advisors are more in numbers. Company is always active in approaching people by using different strategies. Every year company is recruiting a large number of financial advisors and increasing company’s network. Customers need not to come to the branch to get the information, advisors are very active in this work, they fix the appointment with prospect and visit to them.
Graph 4.10: HDFC standard life insurance advisors who contacted the respondents
Manish Chandra (A8752533)(A8752533)
55
From the above table it can be inferred that:
60% of 30 respondents have been contacted by the advisors of HDFC Standard Life Insurance40% of 30 respondents have not been contacted by the advisors of HDFC Standard Life Insurance.
TABLE NO 4.11 plan preferred by the respondents owing HDFC Standard Life Insurance.
Particulars No Of Respondents Percentage (%)
Traditional 9 30
ULIP 14 47
Others 7 23
Total 30 100
Analysis
People have shown more preference to take ULIP plan. Rest of the policies is evenly distributed. Most of the customers owe ULIP plan of HDFC due to the high return on investment. There are many option of reinvestment of money by insurer in ULIP plans which are decided by customers. And it has many advantages over traditional plan so it is more preferred by customers.
Manish Chandra (A8752533)(A8752533)
56
Graph 4.11: Policy preferred by HDFC Standard Life Insurance customers
From the above table it can be inferred that:
30 % of the 30 respondents prefer Traditional plan.47% of respondents prefer ULIP plan.
Manish Chandra (A8752533)(A8752533)
57
TABLE NO 4.12 people have knowledge of Traditional and ULIP plan of Insurance policies
Particulars NO Of Respondents Percentage (%)
Good 12 40
Average 14 47
Poor 4 13
Total 30 100
Analysis
Most of the people have average knowledge of the ULIP and Traditional plans. Some people have good knowledge and few have poor knowledge also.Customers have good knowledge of the traditional and ULIP product it indicates that they are very sensitive towards their investment. People having average or poor knowledge can be improved by giving more attention to those customers.
Graph 4.12: Knowledge of people about Traditional and ULIP plan
Manish Chandra (A8752533)(A8752533)
58
From the above table it can be inferred that:
40% of the 30 respondents have good knowledge of traditional and ULIP plan47% of the respondents have average knowledge of traditional and ULIP plan13% of the respondents have poor knowledge of traditional and ULIP planTABLE NO 4.13 awareness of the benefits of traditional and ULIP plan among the customers.
Particulars No Of Respondents Percentage (%)
Yes 18 60
No 12 40
Total 30 100
Analysis
Most of the people are aware of the benefits of Traditional and ULIP plan. In traditional plan there is low risk and low return where as ULIP plan gives high return but high risk is there. Agents make it clear to the customers during consultation.
Graph 4.13: Awareness of the benefits of traditional and ULIP plan among the customers.
Manish Chandra (A8752533)(A8752533)
59
From the above table it can be inferred that:
60% of the 30 respondents are aware of the benefits of the Traditional and ULIP plan
40 % of the respondents are not aware of the benefits of the Traditional and ULIP plan
TABLE NO 4.14 preferences of the customer in investment among the Traditional and ULIP plans.
Particulars No Of Respondents Percentage (%)
Traditional 6 20
ULIP 19 63
Others 5 17
Total 30 100
Analysis
More number of people prefers the ULIP plan. Traditional and other plans are preferred by less number of people. Now the day’s customers want good return on their investment in insurance policies by investing in ULIP
Manish Chandra (A8752533)(A8752533)
60
plans. Customers have choice to select options for reinvestment of money by insurer and sum assured on any risk is decided by customers itself. So due to various flexible option customers like to take ULIP plans.Graph 4.14: Preferences of the customer in investment among the Traditional and ULIP plans.
From the above table it can be inferred that:20% of the 30 respondents prefer Traditional plan for investment63% of the respondents prefer ULIP plan for investment17% of the respondents prefer other plans for investment
TABLE NO4. 15 from which company customer would like to take Traditional plans
Particulars No Of Respondents Percentage (%)
HDFC 5 17
LIC 16 53
Birla Sun Life 3 10
Others 6 20
Manish Chandra (A8752533)(A8752533)
61
Total 30 100
Analysis
The number of customers are more who like to take the traditional plan of LIC. Traditional plans are since a long time when the LIC was the only insurance company in market, still people prefer to take traditional plans of LIC.
Graph 4.15: Customer preferences to the companies for traditional plan
From the above table it can be inferred that:17 % of the 30 respondents prefer to take the Traditional plan of HDFC.53% of the respondents prefer to take the Traditional plan of LIC.TABLE NO 4.16 from which company customer would like to take ULIP plans
Particulars No Of Respondents Percentage (%)
HDFC 17 57
LIC 7 23
Birla Sun Life 1 3
Others 5 17
Total 30 100
Analysis
Manish Chandra (A8752533)(A8752533)
62
The number of customers is more who prefers to take the ULIP plan of HDFC. HDFC have so many ULIP plans in its basket and it providing high return due to better fund management so people prefer to take the ULIP plan from HDFC. Graph 4.16: Customer preferences to the companies for ULIP plan
From the above table it can be inferred that:57 % of the 30 respondents prefer to take the ULIP plan of HDFC.23% of the respondents prefer to take the ULIP plan of LIC.TABLE NO4. 17 number of customer who compares the insurance product of different companies.
Particulars No Of Respondents Percentage (%)
Yes 24 80
No 6 20
Total 30 100
Analysis
Most of the customers compare the insurance product of different companies before taking a policy. Most of the customers have tendency of
Manish Chandra (A8752533)(A8752533)
63
comparing the products before buying and they choose a product which is most suitable for them. Customers compare the insurance product to see different hidden charges like fund management charges and fund allocation charges etc.
Graph 4.17: Comparison of product of different companies by customers
From the above table it can be inferred that:80% of the 30 respondents compare the products of different insurance companies.20% of the respondents do not compare the products of different insurance companies.
TABLE NO 4.18 number of respondents who knows where their money will be invested by insurer
Particulars No Of Respondents Percentage (%)
Yes 21 70
No 9 30
Total 30 100
Analysis
Manish Chandra (A8752533)(A8752533)
64
Number of customers are more who knows that where their money is invested by the insurer. Customers expect high return from their investment. It is the responsibility of insurance agent to tell the customer about the investment of money by insurer. From above data it can be observed tat agents are doing their job efficiently.
Graph 4.18: Customer’s knowledge about the further investment of money by the insurer
From the above table it can be inferred that:70 % of the 30 respondents knows that where their money will be invested by insurer.30 % of the respondents don’t know that where their money will be invested by insurer.
TABLE NO4.19 from where the respondents came to know about the different insurance plan
Particulars No Of Respondents Percentage (%)
Manish Chandra (A8752533)(A8752533)
65
Advertisement 12 40
Agents 13 43
Friends and Family 4 14
Others 1 3
Total 30 100
Analysis
Most of the customers have come to know about the different plan by advertisement and insurance agents.Advertisement and approaching the customers directly are the best way to find the customers for insurance products. Companies are advertising their products by all media and insurance agents are approaching the customers through their network.Opinion leaders are also working at few extents which are additional benefit for the company.Graph 4.19: Source of information about the insurance plan to the customers
Manish Chandra (A8752533)(A8752533)
66
From the above table it can be inferred that:40% of the 30 respondents get the information about insurance product by advertisement43% of the respondents get the information about insurance product by agents
TABLE NO 4. 20 number of respondents are satisfied with the service of HDFC Standard Life Insurance.
Particulars No Of Respondents Percentage (%)
Yes 24 80
No 6 20
Total 30 100
Analysis
Most of the customers are satisfied with the service of HDFC. Customers are periodically informed about their policy status and premium due by SMS, e-mail, telephone calls and post. Customer can access their policy status and fund value through HDFC website by login in
Manish Chandra (A8752533)(A8752533)
67
www.hdfcinsurance.com. So HDFC is providing good service to their customers and they are satisfied with the service.
Graph 4.20 :Respondents satisfied with the service of HDFC Standard Life insurance
From the above table it can be inferred that:80 percent customers are satisfied with the services provided by HDFC Standard Life Insurance. 20 percent of the respondents are not satisfied. 4.5 SUMMARY OF FINDINGS
LIC is the clear market leader .HDFC Standard Life Insurance can excuse itself that people in the age of more than 55 years category could not use its policies, because HDFC Standard Life Insurance was not around when these people made their life insurance choices. But at some extent HDFC is able to intervene in the market of LIC due to varieties of ULIP plans, its good service, and high return on investments.
1. ULIP plans are more preferred by customers than the traditional plan due to the following reasons:
Manish Chandra (A8752533)(A8752533)
68
Flexibility in investment- traditional plans have to invest at least 85% in debt instruments which results in low returns. On the other hand, Ulips invest in market linked instruments with varying debt and equity proportions and if customer wishes, he can even choose 100% equity option.Greater transparency-: Unlike Ulips, in traditional life insurance policy customers are not aware of how your money is invested, where it is invested and what the value of his investment is.
Potential for better returns- The top most advantage which Ulips offer over traditional plans is the flexibility offered to customers to customize the product according to their needs.
2. Customers knows that traditional plans are with less risk and less growth and ULIP plans are with high risk high growth.
3. Customers have good knowledge about the investment of their money by the insurer in different plans. They know that their money is used as dept in traditional plan where as there are so many option of investing money in ULIP plan like in high growth and low growth fund.
4. Potential for HDFC Standard Life Insurance exists in the category of respondents aged between 25 years – 45 years old, as awareness of life insurance is gaining ground here and tomorrow respondents from here will be growing upwardly and will invest larger amount in life insurance.
5. 9 respondents have a monthly savings of less than 2000, 8 respondents have a monthly saving of around 2,000 – 4,000, 6 respondents have a monthly saving of 4,000 – 6,000 and only a few respondents have monthly savings of around 6,000 – 8,000 and more than 8,000.
6. It is inferred from the study that 9 respondents make the savings for the purpose of education, 6 respondents make the savings for the purpose of medical expenses, 8 respondents make the savings to buy house or site and few respondents make savings for buy durable, to buy jewelleries and some other purpose also.
Manish Chandra (A8752533)(A8752533)
69
7. From the study it is found that. 7 of the respondents prefer bank deposits for investment purpose, 6 prefer insurance, 4 prefer shares and 4 prefer real estate. So there is a more scope for the insurance sector and people feel it is secured and profitable made of investment.
8. In an absurd contrast to the information and awareness of life insurance among the younger earning generation, respondents seem careless to take up insurance. HDFC Standard Life Insurance can take up the initiative to create awareness of its insurance policies right form college level by conducting workshop there.
9. Most of the people takes the insurance policy to save their taxes, few customers takes the policy for future security, children education and other purposes.
10. From the study, it is clear that HDFC is approaching the customers by various ways and agents are playing their role very efficiently.
11. Now the days customer are well aware so they have proper knowledge of the differences between traditional and ULIP plans.
12. Among 30 HDFC policy holders 9 have traditional policies, 14 respondents have ULIP policies and 3 have other plans like health insurance.
13. For traditional plans LIC is more preferred where as other private companies have around equal preferences for it.
14. For ULIP plans HDFC is more preferred due to variety of ULIP products in its basket.
15. Most of the customers have good knowledge of different plans only few don’t have proper knowledge which can be overcome by better consultation to the customers through insurance agents.
CHAPTER - 5
Manish Chandra (A8752533)(A8752533)
70
RECOMMENDATION AND SUGGESTIONS
1. Many respondents in their answers to why they did not take HDFC Standard Life Insurance policies said that HDFC Standard Life Insurance being a private insurer its reliability and long term existence is a big questions mark. This myth must be broken through an Ad – campaign through radio, TV, print and internet that tells that HDFC is nothing but the Industrial Credit and Investment Corporation of India. Which was set up as a public linked company on January 5, 1955 by the government? Hence it has existed for more than half a century and has gone from strength. So why not even in the future? It can even exist for a longer time with tremendous reserves and valuable experience in the financial sector.
2. ULIP plan is starting from the yearly premium of Rs 15,000 and if the premium is paid half yearly then it is Rs 8,ooo, monthly Rs 2000. So they are not able to catch lower middle class. HDFC Standard Life insurance should also cater to the lower middle class.
3. HDFC Standard Life Insurance should give information and data related to potential customers.
4. According to Abraham Maslow’s hierarchy of needs, the second step to self actualization is the fulfillment of the safety needs. Though people feel the needs for security a large number live in an ivory tower obvious to the uncertainties life could throw up to the distant future. They procrastinate to take decisions regarding these aspects. It is this dormant aspect that HDFC Standard Life Insurance should awaken in the people and bring about restlessness and unfulfilled feeling regarding their personal and families security. The next choice then would be insurance. This could be brought about by an innovative campaign slogan saying “The decision is now.”
5. HDFC Standard Life Insurance must not to get people when start earning but much before that. To gain the early bird advantage they must organize sessions in schools and college giving explanations on life insurance in general and HDFC Standard Life Insurance in
Manish Chandra (A8752533)(A8752533)
71
particular. This will make the younger generation more responsible making them go in for insurance in a big way at the earliest thus making HDFC Standard Life Insurance the ultimate beneficiary to enjoy the income from customers from the very beginning of their services lives. It can also bring about a stronger brand commitment in this manner.
6. HDFC Standard Life Insurance should consol try to change the mindset of the people from investing in life insurance for the sake of tax exemption to that of worry exemption. India will move into that mode in the future in its journey to being a developed country as is exemplified by the fact that in developed countries insurance policies are bought whether developing countries it is sold.
7. Use data warehousing management and mining to gauge the profitability and potential of various customer and product segment and ensure effective cross selling and understanding the customer better will allow insurance companies to assign appropriate products, determining pricing correctly and increase profitability.
8. Ensure high level training and development not just for staff but for agents and distribution of organizations. Existing organizations will have to train staff for better service and flexibility. While all companies will have to train employees to cope with new products and an intensive use of information technology.
Manish Chandra (A8752533)(A8752533)
72
CONCLUSION
Since the opening up of the insurance sector in 1994, 20 private insurers are in the fray. Each one is trying to garner more market share than the other. Among all the players HDFC Standard Life Insurance with the advantage of being the earliest to operate in the liberalized insurance market concerned 3,80,000 policies as on March 2008.
Yet the survey has exposed how HDFC Standard Life Insurance is far behind LIC. HDFC Standard Life Insurance must also be alert of private insurance companies like Birla Sunlife, Metlife, ING Vysya….
HDFC have variety of ULIP plans for different age groups. Youngstar is for the people of age group around 30, endowment for the age group of 30 to 45 and pension plans for the age group of more than 45. Each ULIP plan have its own specification and the fund management is done very efficiently in HDFC so the people are getting return of more than 20% yearly. Due to the high return in ULIP plans customers are attracted towards HDFC.
I am sure the company will benefits from my findings and I sincerely hope it use my suggestions enlisted, when I hope will take them miles ahead of competition.
In short, I would like to say that the very act of the concerned management at HDFC Standard Life Insurance in giving me the job of critically examining consumer behavior towards financial products of the company is a steep in their continual mission of making all round improvement as a means of progress.
I am sure that the company has a very bright future to look forward and will be a trailblazer in its own right.
Manish Chandra (A8752533)(A8752533)
73
ANNEXURE AND APPENDICES
Questionnaire
I am pleased to introduce myself, Manish Chandra, 4th semester MBA (MKU) student studying in Presidency Business School. As my project titled is “A study on the awareness of customers about Traditional and Unit linked investment plan of insurance policies with special reference to HDFC Standard Life Insurance Company.” I request you to spare your precious time and check this questionnaire. Feedback will be of immense benefit to me in successful completion of this project. This information will be used only for academic purpose. Kindly co – operate.
1. Name ................................................................................
2. Age …………………………………………………………
3. Gender Male Female
4. Marital Status Married Unmarried
5. Address ………………………………………………………...………………………………………………………...
6. Telephone No. ………………………………………………………...
7. E-mail ID ………………………………………………………...
Manish Chandra (A8752533)(A8752533)
74
8. Qualification Graduate Post Graduate
Others
9. Occupation Employed Retired
Business Others
Part B
1. Monthly Income 10,000 – 20,000 20,000 – 30,000
30,000 – 40,000 More than 40,000
2. Approximate monthly savingsLess than 2,000 2,000 – 4,000
4,000 – 6,000 6,000 – 8,000
More than 8,000
3. Purpose of savings Medical expenses To buy durables
To buy jewelleries To buy house
Education Others
Manish Chandra (A8752533)(A8752533)
75
4. Where do you invest your savingsBank deposit Insurance
Share Debentures Real Estate
Others
5. Approximately how much do you pay towards the insurance premium monthly?
Less than 1,000 1,000 – 2,000
2,000 – 3,000 3,000 – 4,000
More than 4,000 6. Purpose for which you taken this policy?
Tax purpose Future security
Children’s education
MarriageOthers
7.Who pays the premium Self Employer
Spouse Others
8. Whose life is insured as per policy taken
Parents Children
Self Spouse
9. What is your level of information about the products of HDFC Standard Life Insurance?
Good Moderate
Manish Chandra (A8752533)(A8752533)
76
Poor
10. Has any HDFC Standard Life Insurance advisor visited you?Yes No
11. Please mention the plan you have takenTraditional ULIP
Others
12..Do you know the basic differences between Traditional and ULIP plan? Yes No
13.Do you have the knowledge of the benefits of Traditional and ULIP plan?
Good Average Poor
14. Which type of plan you prefer for your investment?
Traditional ULIP Others
15. Traditional plan of which company is most preferred by you?
HDFC Standard Life Insurance
LIC Birla Sunlife
Others 16. ULIP plan of which company is most preferred by you? HDFC Standard Life Insurance
Manish Chandra (A8752533)(A8752533)
77
LIC Birla Sunlife
Others
17. Do you compare the insurance product of different companies?
Yes No
18. Do you know where your money is invested by the insurer in traditional and ULIP plan?
Yes No
19. How do you come to know about Traditional and ULIP plan?
Advertisement Agents
Friends and relatives others
Bibliography
Manish Chandra (A8752533)(A8752533)
78
Journals and Catalogs
1. User manual of trading in Product Hand Book published by HDFC Standard Life Insurance.
2. Catalogs describing the features of HDFC Standard Life Insurance.
Web sites
1. www.hdfcindia.com2. www.hdfcinsurance.com3. www.bimaonline.com
Manish Chandra (A8752533)(A8752533)
79
Top Related