INTRODUCTION
Insurance is defined as a cooperative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to ensure themselves against that risk. Risk is uncertainty uncertainty of a financial loss. The insurance is also defined as a social device to accumulate funds to meet the uncertain losses arising through a certain risk to t o a person injured against tthe he risk. Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured covered in the policy. Essentially, a life insurance policy is a contract between the named insured and the insurance company wherein the insurance company agrees to pay an agreed upon sum of money to the insured's named beneficiary so long as the insured's premiums are current. The business of insurance is related to the protection of the economic value of assets. Every asset has a value. The asset would have created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it. It is a benefit because it meets some of his needs. The benefits 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 case of motor car, it provides comfort and convenience in transportation. There is no direct income. Both are assets and provide benefits. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. The growing number of wealthier as well as aging Indian middle class is set to offer a strong business potential for the country¶s untapped life insurance market. The growth in the insurance sector was due to this immense growth that the regulations were introduced in the insurance sector and in continuation ³Malhotra Committee´ was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was participation of overseas insurance companies with 26% capital.
-1-
Creating a more competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India is like a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. As the twentieth century has come to a close and we have move into the third millennium, we can see many developments and changes taking place around us with all the industries and firms within each industry trying to keep pace with the changes and diverse needs of the people. Though for decade together, marketers have regarded µcustomer¶ as the king and evolved all activities to satisfy him or her, giving this concept a momentum it is necessary to understand the Perception and Expectations of the customer in respect various aspects & attributes so as to design a successful success ful and an acceptable product or service. This can largely be attributed to the prevailing market situation. Not only has competition become intense but over and above with the market being flooded with many me-too products, the challenge before the marketer is to understand the diversity of consumer expectations and offer goods/services accordingly. Today the company image is built and made known by its customers. Thus the success of the firm will be determined by how effective it has been in meeting the diverse consumer needs and wants by treating each customer as unique and offering products and services to suit his or her needs. Therefore today all the firms are engaged in a process of creating a lifetime value and relationship with their customers, a step towards developing knowledge knowledge regarding its customers¶ needs is the utmost important. The current study is an attempt to measure the various parameters as perceived by the customers and to help the company in serving its customers in a much better and efficient manne ma nner. r. y
History of In of Insura surance nce
Insurance has been known to exist in some form or other since 3000BC. The Chinese traders, traveling treacherous river rapids would distribute their goods among several vessels, so that the loss from any one vessel being lost, would be partial and shared, and not total the Babylonial traders would agree to pay additional sums to lenders, as the price for writing off the loans , in case of the shipment being stolen. -2-
The inhabitants of Rhodes adopted the principle of ³general average´, whereby, if goods are shipped together, the owners would bear the losses in proportion, loss occurs, due to jettisoning during distress. (Captains of ship caught in storms, would throw away some of the cargo to reduce the weight and restore balance. Such throwing is called jettisoning) the Greeks had started benevolent societies in the late 7th century AD, to take care of the funeral and families of the member who died. The friendly societies of England were similarly constituted. The Great Fire of London in 1666, in which more than 13000 house were lost, gave a boost to insurance and the first fire insurance company, called the Fire Office, was started star ted in 1680. The origins of insurance business as in vogue at present, is traced to the Lloyds Coffee House in London. Traders, who used to gather in the Lloyds coffee house in London, agreed to share the losses to their goods while being carried by ship. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ship. In India insurance 1818 with life insurance being transacted by English company the oriental Life Insurance Co. Ltd. The 1st Indian insurance company was the Bombay Mutual Assurance Society Ltd, formed in 1870 in Mumbai. Later, were establishing the Cooperative assurance in Lahore, the Bombay life (originally called the swadeshi life), the Indian Mercantile, the new India and the jupoter in Mumbai, and the Lakshmy in New Delhi. These were all Indian companies started as a result of the swadeshi movement in the early 1900s.By the year 1956, when the life insurance business was nationalized and the Life Insurance Corporation of India (LIC) was formed on 1 st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India. After the amendments to the relevant law in 1999, the L.I.C. did not have the exclusive privilege of doing life.
-3-
Laws and Regulatio Regulation ns
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA. (1) Subject to the provisions of this Act and any other law for the time being in force, the Authority Authority shall have the duty to regulate, promote promote and ensure ensure orderly growth growth of the insurance business business and re-insurance business. business. (2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, (a) Issue to the applicant a certificate of registration, renews, modify, withdraw, suspend or cancel such registration; (b) Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, Settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; (c) Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d) Specifying the code of conduct for surveyors and loss assessors; as sessors; (e) Promoting efficiency in the conduct of insurance ins urance business; (f) Promoting and regulating professional organizations connected with the insurance and re-insurance business; (g) Levying fees and other charges for carrying out the purposes of this Act; (h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business; (i)control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); (j) Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; (k) Regulating investment of funds by insurance companies; (l) Regulating maintenance of margin of solvency;
-4-
(m) Adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) Supervising the functioning of the Tariff Advisory Committee; (o) Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f); (p) Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural r ural or social sector. y
Insura Insurance nce
In low and economics, insurance is a form of risk management primarily used to hedge against the risk of contingent loss. ³Insurance is the equitable transfer of the risk of a loss from one entity to another in exchange for a premium and can be thought of a granted small loss to prevent a large possibly devastating loss´. Insurer: - An insurer is a company selling the insurance. Premium: - Insurance is a factor used to determine the amount called the premium to be charged for a certain amount of coverage. Insurer¶s business model: Profit = Earned premium + Investment ± Incurred loss ± underwriting Expen Expensses
Insurer makes money in two ways ± (1) Through underwriting, the process by which insurer select the risk to Insure and decide how much in premium to change for accepting those risk. (2) By investing the premiums that collect from insured parties. y
Lif e In I nsurance surance
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 or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums. There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium. 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 -5-
owner whereby a benefit is paid to the designated beneficiaries if an insured event occurs which is covered by the policy The value for the policyholder is derived, not from an actual claim event, rather it is the value derived from the 'peace of mind' experienced by the policyholder, due to the negating of adverse financial consequences caused caus ed by the death of the Life Assured. To be a life policy the insured event must be based upon the lives of the people named in the policy. y
Need of lif of lif e insurance surance
Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Lif e insura surance nce is
a unique investment that helps you to meet your dual needs - saving for
life's important goals, and protecting your assets. Let us look at these unique benefits of life insurance in detail. y
Protec rotectio tion n
You need life insurance to be there and protect the people you love, making sure that
your family has a means to look after itself after you are gone. It is a thoughtful business concept designed to protect the economic value of a human life for the benefit of those financially dependent on him. y
Retir Retiremen ementt
Life insurance makes sure that you have regular income after you retire and helps you maintain your standard of living. It can ensure that your post-retirement years are spent in peace and comfort. y
Saving avingss and Inv Investmen st ments ts
y
Insurance is a means to Save and Invest. Your periodic premiums are like Savings and you are assured of a lump sum amount on maturity. A policy can come in handy at the time of your child¶s education or marriage! Besides, it can be used as supplemental retirement income.
y
Tax Bene Benefits fits
-6-
Life insurance is one of the best tax saving savi ng options today. Your tax can be saved twice on a life insurance policy-once when you pay your premiums and once when you receive maturity benefits.
y
Myths of In of Insura surance nce :
i)
Insurance is just meant for saving tax.
ii)
Insurance does not give good returns.
iii)
Insurance products are not flexible. y
Analysis of In of Inv vestmen st mentt in lif e insurance surance polic olicies as per diff erent ent lif e
stage stagess
AGE
18yrs - 25y 25yrs rs
STATUS
Unmarried
INSUR ANCE NCE
SUGGESTED
NEE EED DS
PRODUCT S
1.Go on a holiday
Short
2.Buy a new Car
Endowment
3.Set up a new house
Product
Term
4.Set up Interiors 5.Buy jeweler 1.High Debt, high 25yrs -30yrs
Married
expenditure
Phase 2.Family
Temporary term or dependency
on
your whole life Product
income 3.Low accumulated wealth 4.Need for Planning Requirement 1.Retirement Planning 30yrs - 45y 45yrs rs
Matured
2.Wealth transfer or saving vehicles Profits
or
Unit
couple
3.Returns on investment
Linked Endowment
4.Opting for guaranteed Product
/ Deferred annuities
-7-
1.Protection in case you live long 60yrs above
and Post Retirement
1.Single
Premium
2.Protection for spouse in case of annuities death
2.Long term care
3.Wealth accumulation for children products 3.Whole products
-8-
life
y
Lif e Stage tage in Lif e Insura In surance nce
Peak earning age range. High asset creation & build up of liabilities. Critical stage for dependents
Asset base build up & liabilities reduced/ taken care of. Need for retirement planning more than protection.
Introduction of dependents. Start of financial planning ± balance between asset creation & protection
No dependents/ liabilities therefore need for insurance is less
18-25
(Unmarried )
Need for protection low. Greater need for regular income flow. flow.
25-30 Married couples with no kids
Endow ndowmen mentt / UL ULIP¶s
At
30-45 years Couples with children
45 yrs and above Matured couple
Endow ndowmen mentt / UL ULIP¶s + Ter Term
Retired
nnuitiees Annuiti
each stage, requiremen ts, responsibilities and Financial needs differ
-9-
y
Princ rinciiples of lif of lif e insurance surance
y
Indemnity Indemnity
A contract of insurance contained in a fire, marine, burglary or any other policy (excepting life assurance and personal accident and sickness insurance) is a contract of indemnity. This means that the insured, in case of loss against which the policy has been issued, shall be paid the actual amount of loss not exceeding the amount of the policy, i.e. he shall be fully indemnified. The object of every contract of insurance is to place the insured in the same financial position, as nearly as possible, after the loss, as if he loses had not taken place at all. It would be against public policy to allow an insured to make a profit out of his loss or damage. da mage. y
Utmost Good ood Faith Faith
Since insurance shifts risk from one party to another, it is essential that there must be utmost good faith and mutual confidence between the insured and the insurer. In a contract of insurance the insured knows more about the subject matter of the contract than the insurer. Consequently, he is duty bound to disclose accurately all material facts and nothing should be withheld or concealed. Any fact is material, which goes to the root of the contract of insurance and has a bearing on the risk involved. It is only when the insurer knows the whole truth that he is in a position to judge (a) whether he should accept the risk and (b) what premium he should charge. If that were so, the insured might be tempted to bring about the event insured against in order to get money. y
Insurabl Insurablee Int Interest
A contract of insurance affected without insurable interest is void. It means that the insured must have an actual pecuniary interest and not a mere anxiety or sentimental interest in the subject matter of the insurance. The insured must be so situated with regard to the thing insured that he would have benefit by its existence and loss from its destruction. The owner of a ship run a risk of losing his ship, s hip, the charter of the ship runs a risk of losing his freight and the owner of the cargo incurs the risk of losing his goods and profit. So, all these persons have something at stake and all of them have insurable interest. It is the existence of insurable interest in a contract of insurance, which distinguishes it from a mere watering agreement.
- 10 -
y
Causa Prox roxima
The rule of causa proxima means that the cause of the loss must be proximate or immediate and not remote. If the proximate cause of the loss is a peril insured against, the insured can recover. When a loss has been brought about by two or more causes, the question arises as to which is the causa proxima, although the result could not have happened without the remote cause. But if the loss is brought about by any cause caus e attributable to the misconduct of the insured, the insurer is not liable. y
R isk isk
In a contract of insurance the insurer undertakes to protect the insured from a specified loss and the insurer receive a premium for running the risk of such loss. Thus, risk must attach to a policy. y
Mitig itigation ation Of Of L Loss
In the event of some mishap to the insured property, the insured must take all necessary steps to mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he does not do so, the insurer can avoid the payment of loss attributable to his negligence. But it must be remembered that though the insured is bound to do his best for his insurer, he is, not bound to do so at the risk of his life. y
Subrog ubrogation ation
The doctrine of subrogation is a corollary to the principle of indemnity and applies only to fire and marine insurance. According to it, when an insured has received full indemnity in respect of his loss, all rights and remedies which he has against third person will pass on to the insurer and will be exercised for his benefit until he (the insurer) recoups the amount he has paid under under the policy. It must be clarified here that the insurer's right of subrogation arises only when he has paid for the loss for which he is liable under the policy and this right extend only to the rights and remedies available to the insured in respect of the thing to which the contract of insurance relates. y
Contribution tributio n
Where there are two or more insurance on one risk, the principle of contribution comes into play. The aim of contribution is to distribute the actual amount of loss among the different insurers who are liable for the same risk under different policies
- 11 -
in respect of the same subject matter. Any one insurer may pay to the insured the full amount of the loss covered by the policy and then become entitled to contribution from his co-insurers in proportion to the amount which each has undertaken to pay in case of loss of the same subject-matter. In other words, the right of contribution arises when (I) there are different policies which relate to the same subject-matter (ii) the policies cover the same peril which caused the loss, and (iii) all the policies are in force at the time of the loss, and (iv) one of the insurers has paid to the insured more than his share of the t he loss. Prod roducts of lif of lif e insurance surance y
Most Insurance policies are a combination of Savings & Protection.
y
Products are formulated by either increasing or decreasing either one of these components.
y
These combinations can be broadly divided into 4 groups
y
-
Annuities & Pension
-
Endowment Endowment Policies : Whole Life ; Unit Linked etc
-
ULIPs
-
Term Insurance
A pen sion lan ensio n pla n
A pension plan or an annuity is an a n investment that is made either in a single s ingle lump sum payment or through installments paid over a certain number of years, in return for a specific sum that is received r eceived every year, every half-year or every month, either for life or for a fixed number of years. Annuities differ from all the other forms of life insurance in that an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period. Typically annuities are bought to generate income during one's retired life, which is why they are also called pension plans. By buying an annuity or a pension plan the annuitant receives guaranteed income throughout his life. He also receives lump sum benefits for the annuitant's estate in addition to the payments during the annuitant's lifetime.
- 12 -
Pension plans are perfect investment instrument for a person who after retiring from service has received r eceived a large sum as superannuation benefit. benefit. He can invest the proceeds in a pension plan as it is safest way of secured income for the rest of his life. One can pay for a pension plan either through an annuity or through installments that are annual in most cases. Types of Ann nnuiti uitiees / Pen ensio sion n Pla lan ns y
Lif e Ann nnuity uity::
Guarantees you a specified amount of income for your life. After death, the amount invested is refunded r efunded to your nominee. y
Guara uaran nteed Perio riod d Ann nnuity uity::
Provides specified income for your lifetime and guarantees that your nominee will receive payments for a certain minimum number of years, even if you should die earlier. In case you live longer than the specified minimum number of years, you are entitled to receive rec eive annuity payments for your lifetime. lifeti me. y
Ann nnuity uity Ce Certai rtain: n:
Under this plan, the stipulated annuity is paid for a fixed number of years. The annuity payments stop at the end of that period, irrespective of how much longer you may live. y
Def De f err rred ed Ann nnuiti uitiees:
The premiums paid into such plans may be deducted from one¶s taxable income at the time of payment. In addition, the interest earned on the annuities is not taxed immediately. But the proceeds of the annuity a nnuity will be taxable when they are paid to to you. y
A whol wholee lif e poli oliccy
As the name suggests, a Whole Life Policy is an insurance cover against death, irrespective of when it happens. Under this plan, the policyholder pays regular premiums until his death, following which the money is handed over to his family. This policy, however, fails to address the additional needs of the insured during his post-retirement years. It doesn't take into account a person's increasing needs either. While the insured buys the policy at a young age, his requirements increase over time. By the time he dies, the value of the sum assured is too t oo low to meet his family's needs. As a result of these drawbacks, insurance firms now offer either a modified Whole - 13 -
Life Policy or combine in with another type of policy a whole life policy runs as long as the policyholder is alive. As risk is covered for the entire life of the policyholder, therefore, such policies are known as whole life policies.A policies. A simple whole life policy requires the insurer to pay regular premiums throughout the life. In a whole life policy, the insured amount and the bonus is payable only to the nominee of the beneficiary upon the death of the policyholder. There is no survival benefit as the policyholder is not entitled to any money during his / her own lifetime. Whole life policies have a major drawback in the sense that the policyholder is not entitled to any money during his or her own lifetime. Hence such a policy is suitable only in a few, very specific cases. Suppose a person buys a whole life policy for say 25 years at the age of thirty when his children are young and the family needs protection. By the time he is 55 his children may be well settled, no longer truly needing the protection the whole life policy provides. On the other hand, he would probably require the money for himself and his wife for the retired life but this would not be possible since the sum assured is payable only when the policy holder dies.
y
An endow endowmen mentt poli oliccy
An endowment policy covers risk for a specified period, at the end of which the sum assured is paid back to the policyholder, along with the bonus accumulated during the term of the policy. An endowment life insurance policy is designed primarily to provide a living benefit and only secondarily to provide life insurance protection. Therefore, it is more of an investment than a whole life policy. Endowment life insurance pays the face value of the policy either at the insured's death or at a certain age or after a number of years of premium payment. Endowment policy is an instrument of accumulating capital for a specific purpose and protecting this savings program against the t he saver's premature death. Premium on endowment policies is payable for the full term of the endowment policy unless, the insurer dies earlier. When compared to whole life policies, the premium rates for endowment policies are higher and the bonus rates lower. But one of the major attractions of endowment policies is that they provide a return on premium payments, when the policy comes to an end. The endowment received at the maturity
- 14 -
of the policy can be used for buying an annuity policy to generate a monthly pension for the whole life. Endowment policies are one of the most popular insurance plans. Apart from providing financial risk cover in case the insurer's-who is usually a family's breadwinner-premature death, the insurance amount is also repaid once this risk is over. The endowment amount paid at the maturity of the policy can be used for meeting major expenditures such as children's education and marriage, etc. Types of of end endow owmen mentt pla lan:n:y
Pure ure endow endowmen mentt:
- Where the sum assured is payable to policyholders either
on survival or death within endowment period. y
Join oint end endow owmen mentt :
- where the policy covers the risk on two or more lives
under the single policy. y
Marriage arriage endow endowmen mentt:
- where the policy is designed to meet the marriage
financing needs of the family member of the policy holder Unit Un it Link ed ed Insura Insurance nce Pla lan n (UL (ULIP)
Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits of risk protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time. In a ULIP, the invested amount of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund. A Unit is the t he component of the Fund in a Unit Linked Insurance Policy. P olicy. The returns in a ULIP depend upon the performance of the fund in the capital market. ULIP investors have the option of investing across various schemes, i.e., diversified equity funds, balanced funds, debt funds etc. It is important to remember that in a ULIP, the investment risk is generally borne by the investor. In a ULIP, investors have the choice of investing in a lump sum (single premium) or making premium payments on an annual, half-yearly, quarterly or monthly basis. Investors also have the flexibility to alter the premium amounts during the policy's - 15 -
tenure. For example, if an individual has surplus funds, he can enhance the contribution in ULIP. Conversely an individual faced with a liquidity crunch has the option of paying a lower amount (the difference being adjusted in the accumulated value of his ULIP). ULIP investors can shift their investments across various plans/asset classes (diversified equity funds, balanced funds, debt funds) either at a nominal or no cost. Expen Exp ensses Char harged ged in a ULIP y
Prem emiu ium m Allo lloccatio ation n Char Chargege-
A percentage of the premium is appropriated towards charges initial and renewal expenses apart from commission expenses before allocating the units under the policy. y
Mortality Char harge gess-
These are charges for the cost of insurance coverage and depend on number of factors such as age, amount of coverage, state of health etc.
y
Adm dmiinistratio istration n Char Charge gess-
This is the charge for administration of the plan and is levied by cancellation of units. Terrm lif e insura Te surance nce poli oliccy
Term life insurance policy covers risk only during the selected term period. If the policyholder survives the term, the risk cover comes to an end. Term life policies are primarily designed to meet the needs of those people who are initially unable to pay the larger premium required for a whole life or an endowment assurance policy. No surrender, loan or paid-up values are granted under term life policies because reserves are not accumulated. If the premium is not paid within the grace period, the policy lapses without acquiring any paid-up value. A lapsed policy can be revived during the lifetime of the life assured but before the expiry of the period of two years from the due date of the first unpaid premium on the usual terms. Accident and / or Disability benefits are not granted on policies under the Term plan. Term life policies are the cheapest form of insurance. Premiums in a term policy pay for the insurance and a nd no part of the premium in a term ter m life insurance policy is used for f or investment purposes. Term life policies are the cheapest form of insurance. Premiums in a term policy pay for the insurance and no part of the premium in a term life - 16 -
insurance policy is used for investment purposes. The length of a term life insurance policy varies from 5 to 30 years. Many people prefer term insurance to provide their families with the security cover, and then use the additional funds they would have paid into an endowment or other life insurance policy to make investments of their own choosing. Term life policies are suitable for those who need to provide financial security to their family but are unable to pay the larger premium required for a Whole Life or Endowment policy Claim laim settlemen ttlementt proced rocedur uree
Under Life insurance, claims can arise on maturity of policy or death of the policyholder. The companies send intimation at least 2 months before the maturity date. If the notice of maturity is not received and the date of maturity is known to the policyholder, then the policyholder can take the necessary steps to get the due Maturity amount Claim laims Proced rocedur uree on Death Death (acci cciden dental tal or natural)
Intimation about death of policyholder should be given to LIC by any relative/ nominee/ assignee of the deceased policyholder which should contain the information y
Death certificate
y
Date, reason & place of death
y
Policy Number/s
Claim laims Proced rocedur uree on Maturity
On maturity of policy, the policyholder has to submit certain requirements on maturity of the policy y
Submit the policy document (if not in the custody of LIC as security for loan) to the concerned branch office as mentioned on the policy
y
Collect discharge form no. 3825, put a revenue stamp & sign it, also get your signature attested by a witness and submit it to LIC
y
Submit a proof of age document (if age has not been admitted earlier)
y
Submit Assignment/ Assignment/ Re-assignment Re -assignment Deed if any
y
Existence certificates in case of Children's Deferred Assurance and Pure Endowment Endowment policies - 17 -
On Death Death (acci cciden dental tal or natural)
If the policyholder or Life Assured dies during the term of the policy, a death claim arises. Death claims clai ms are of two types Early Death Death Claim laim
- Claims arising within 2 years after date of risk/ revival/
reinstatement are termed as Early Claims or "Premature Claims".
They can be classified into two groups 1. Those having arisen within 2 years from the date of acceptance or risk or revival 2. Those having arisen after 2 years but within 3 years of acceptance of risk or revival Non Early Claim laim - Claims arising more than 2 years after the date of risk/ revival are
called as Non-Early Claims. However, the policy should be in force for at least 3 years at the time of death of Life Assured. For claiming the benefit, the nominee or any person related may apply to Insurance Company and the following requirements requirements are a re required further for settlement of claim: y
Policy Document
y
If death has occurred due to an accident, then Police Panchnama & Senior Divisional Manger's verdict are required
y
Medical attendants' report (In proforma given by the insurance company)
y
Claimants' statement (in proforma given gi ven by the insurance company)
y
Death certificate
y
If the Life assured has been working before his or her death then the employer's certificate for last 5 years relating to leave record along with details of medical leave taken and reasons supported with photocopies of certificates issued by medical practitioner.
The following documents should be submitted if death occurs after 3 years from the date of risk covered y
Policy Document
y
Death Certificate
y
Documentary evidence of age if the age was not admitted at the time of issuing the policy
y
Claimant's statement (Claim Form 'A') - 18 -
y
Evidence of Title to the deceased estate if policy is not nominated, assigned or issued under MWP Act.
y
If death is due to an accident the Police Panchnama, Senior Divisional Manager's verdict for claiming Double Accident Benefit
Ex-g Ex-gratia ratia Settlemen ttlementt of De of Death ath Claim laims-
Ex-gratia Settlement of Death Claims are ar e not a right claim but on grounds of Humanity presently LIC is giving such claim amount for the policies which are not in force but y
If Death occurred after the expiry of grace period of premium due date then Full Sum Assured along with the bonus bonus will be payable as Ex -gratia settlement
y
If Death occurred after three months but less than six months after the expiry of first unpaid premium date half of the Sum Assured without bonus will be paid as Ex-gratia
y
If the death occurred between six months and one year from the due date of the first unpaid premium date, claim may be considered to the extent of the proportionate notional paid-up value on the basis of actual a ctual premium paid.
Double ouble Acci cciden dentt Bene Benefit fit
The Insurance Company is not liable for any loss or damage after the expiry of 12 months from the date of loss unless the claim itself is the subject of pending action or arbitration. If the insurance company disclaims liability then such claims have to be made the subject matter of a suit in a court of law within 12 calendar months from the date of the disclaimer. In case the dispute refers only to the amount of payment claimed then the matter has to be compulsorily referred to arbitration as per the provisions of the Indian Arbitration Act. Advan vantage tagess of L of Lif e Insura Insurance nce
It is a general belief that life insurance is meant only for those with families. It is true that Life Insurance Policies like whole-life insurance, joint-life-insurance, pensionlife-insurance etc are essential for family's financial security, but they are equally important for individuals. Term Insurance policies protect your financial resources against the uncertainties of life so you can protect your family's future. Some of the life insurance advantages are: y
If an estate owner has not accumulated accu mulated enough enough assets for his family, - 19 -
y
Insurance quote helps create an instant estate for the sake of the Family¶s security.
y
Life Insurance provides the option to pass equal assets to the children who are not active in the Family business at the time the family business is passed on.
y
Life Insurance policies can help secure the future of children for college/educational purposes as the amount of life Insurance Policy increases on a minor¶s or parent¶s life.
y
The growth of a cash-value policy is tax-deferred - you do not pay taxes on the cash value accumulation until you withdraw funds from the policy.
y
Life Insurance can be useful in paying estate taxes, along with other estate settlement amounts. Federal Estate Taxes are due nine months after death.
y
If there¶s a Business Transfer, life insurance can provide ready cash to finance a transaction between business owners who are ready to buy the deceased owner¶s share from his or her estate after death.
y
If there¶s a home mortgage, one can pass the family residence to their spouse/children to free them of any mortgage if one has a Life Insurance Policy for the same. It is preferred to have a decreasing term policy that decreases in face amount a mount as the mortgage balance is paid down.
y
Life Insurance helps retain your Business from the loss of a key employee. Untimely death of a key employee can pose severe financial loss to the business.
y
The right insurance proceeds can provide liquidity to pay off personal loans or business loans.
y
Charitable Remainder Trusts provide tax benefits. Life Insurance Insuranc e helps replace a charitable gift.
y
A lot of Insurance products presently provide good returns, which could be a beneficial way for saving necessary funds for retirement years.
Benefits are available immediately and may be used to help pay expenses such as final illness and funeral costs, eliminating the need to sell estate assets to cover these costs.
- 20 -
ICICI PRUDE RUDENTIAL
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, one of the foremost financial services companies of India and Prudential plc, one of the leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector life insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ( IRDA). ICICI Prudential Life's capital stands at Rs. 4,780 crores (as of September 30, 2010) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 1, 2010 to September 30, 2010, the company garnered Rs 7,267 crores of total premiums and has underwritten over 10 million policies since inception. The company has a network of over 1,500 offices and over 1, 60,000 advisors, as on September 30, 2010. The company has assets held over Rs. 65,000 crores as on September 30, 2010. For the past nine years, ICICI Prudential Life has maintained a wide range of Life Insurance products that meet the needs of the Indian customer customer at every step st ep in life. ICICI Prudential Life recently completed 10 years on the Indian Insurance space on 12th December 2010. ICICI Pruden rudential tial
Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance has been one of the earliest private players. Since the time, ICICI Pru Life has been the leader in terms of market share as indicated by the IRDA (Insurance Regulatory and Development Authority, the regulator for Indian Insurance Industry) at its website. During 2007-08, the organization's focus on rural business has proved its complex project execution capability and strong partnerships for customer servicing. In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK Healthcare to settle insurance claims of its users. ICICI Prudential's life insurance products may be loosely categorized under four forms- Life Plans (further categorized into Term Plans and Wealth Plans), Child Plans, Retirement Plans and Health Plans.
- 21 -
Under Life Insurance Plan category it offers term ter m plans like i-Protect i-Protect online term t erm plan, ICICI Pru Pure-Protect and ICICI Pru Life Guard, and ULIP wealth plans like ICICI Pru Life Stage Wealth II, ICICI Pru Life Link Wealth SP, ICICI Pru Pinnacle Super etc. Under the Child / Education Plan category it offers products like ICICI Pru Smart Kid regular premium and ICICI Pru Smart Kid Premier Pr emier Under the Retirement Insurance Plan category it offers products like ICICI Pru Forever Life & ICICI Pru Life Link Pension SP. Under the Health Insurance Plan category it offers products like ICICI Pru Health Saver & ICICI Pru Hospital Care II. Lif e Insura Insurance nce Plan lan y
ICICI Pru i-Protect Term Plan is a term insurance insura nce plan available online only.
y
ICICI Pru Pure-Protect is a term plan without Return of Premium.
Retir Retiremen ementt Insura Insurance nce Plan lan y
ICICI Pru Life Link Pension SP is a single premium pension policy that provides you the opportunity to enjoy regular income as pension post retirement by paying just a single premium.
y
ICICI Pru Forever Life is a regular premium deferred pension plan that provides the security of life cover during the Accumulation Phase and offers five ways to get your pension, after retirement.
Child hild / Education ation Plan lan y
ICICI Pru Smart Kid Regular Premium is a regular premium, traditional plan with two options to receive guaranteed educational benefits, no matter what the uncertainties in your life.
y
ICICI Pru Smart Kid Premier is a ULIP plan which ensures your child¶s education continues even if you are not around.
Health Insura Insurance nce y
ICICI Pru Health Saver is a comprehensive whole of life health insurance plan that takes care of hospitalization costs as well as all your health care needs.
y
ICICI Pru Hospital Care II is a fixed benefit hospitalization and surgical plan that offers you and your family, fixed payouts at various stages of hospitalization in addition to benefit received from other medical insurance plans. - 22 -
HDFC LIFE IFE
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. HDFC Limited ited
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 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, and Bangladesh in the setting up of housing finance companies. - 23 -
Stand tandar ard d Lif e Plc.
Established in 1825, Standard Life Plc. is a leading provider of long term savings and investments to t o around 6 million customers worldwide. worldwide. A 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. A At the end of April 2011 the Group had total assets under administration of a £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.
- 24 -
LITE ITER ATUR E R EVI EVIEW
Ashok Khurana & Kanika Goyal (2010), ³Exploration and Analysis of Structure and Growth Performance of Selected ULIPs´ In this research paper it is found that Insurance in India has been emerging as an important and profitable business. Every insurer wants to capture the maximum share in the market and is offering both Unit Linked Insurance Plans (ULIP) and a nd traditional plans. C. John Williams (2009) ³A Comparative Study and Analysis of Unit Linked Insurance Plans (ULIPs)-An IDBI FORTIS Perspective´ In this research it was found that age plays a major role in deciding the investment patterns of people as generally the younger class of people tend to take more risk and invest in various instruments more frequently in a year (2.10 times a year) when compared with the older class of people (1.46 times a year). Prof (Dr) Roshan Lal & Ashok Khurana (2010), ³children insurance plans: a collective and analytical study of selection life insurance´ In this research various alternatives were found to secure s ecure the financial future of child. The T he study observed that child insurance plan can be started with annual premium as low as Rs10000 for Smart kid new ULRP of ICICI Pru; it is followed by Young Star Plus II of HDFC SL with annual premium of Rs12000. The minimum annual premium is on the higher side, i.e., Rs20000 for for Smart Steps St eps plus of Max New York Life. Siddiqui S. (2009) (2009) conducted a research on the topic, ³Indian Life Insurance Sector: A Overview.´ This paper produced produced an overview of of present position of of Life Insurance Sector in India and study various economic indicators related to all Life Insurance Companies operating in India. He revealed that the history of life insurance in India dates back to the year 1818, with the Oriental Lie Insurance Company in Calcutta. Thipathi Deva Sena et al (2007) conducted research on, ³A Study on Consumer Preference and Comparative Analysis of All Life Insurance Companies´. The study observed that the insurance industry in India has seen an array of changes in the past one decade. The year saw an up rise in the Indian insurance sector as major structural - 25 -
changes took place with the ending of the government monopoly and the route of the Insurance Regulatory and Development Authority (IRDA) Bill lifting all entry restrictions for private players and allowing foreign players with some entry restriction and limits on direct investment ownership. Preeti Kakar & Rajesh Shukla,´ The Determinants of Demand for Life Insurance in an Emerging Economy²India´ Based on primary data generated through the National Council of Applied Economic Research¶s (NCAER) National Survey of Household Income and Expenditure (NSHIE), this article attempts to identify determinants of life insurance ownership in the country. An analysis using logistic regression has corroborated that insured households tend to be more prosperous, more educated and more optimistic about future security s ecurity than non-insured households. Dr.Ram Pratap Sinha & biswajit chatterjee (2006), ³Are Indian life insurance companies cost efficient?´ efficient?´ The present present paper estimated cost efficiency of of the Life insurance insura nce companies operating operat ing in India for the period 2002-03 to 2006-07 using the new cost efficiency approach suggested suggested by Tone (2002). (2002). The results suggest an upward trend in cost efficiency of the observed life insurers between 2002-03 and 2004-05. However, the trend was reversed for the next two years i.e. 2005-06 and 2006-07.This has been so because of the fact that during the initial years of observation mean cost efficiency of the private life insurers was rising but the trend was reversed in 2005-06 and 2006-07.
- 26 -
R ATIONALE
The study is being conducted to evaluate the perception of professionals towards Ulip plan of HDFC and ICICI and to analyze their preference over the plans.
- 27 -
OBJECTIVE CTIVE y
To a comparative study of perception of working professionals towards HDFC ULIP plans &ICICI ULIP plans .
- 28 -
LIMITATIONS
In spite of every care taken on the part of the researcher there are certain limitations which could not be overcome: y
Sample size is limited to 100 customers and may not adequately represent the whole market.
y
The research is confined to a certain part of Indore.
The above are some of the aspects which posed real problems in the way of completion of the research work but the majority of respondents were cooperative.
- 29 -
R ESEARCH RCH METHODOL ODO LOGY
The stud study
A comparative study of perception of working professionals towards HDFC Ulip plans & ICICI ulip plans .study based on quantitative research The sam sample
The sample size is 100 and the respondents are from Indore city only. The tools for data collec ollectio tion n
Data will be collected using self designed questionnaire. The study is based on primary and secondary data and primary data on the working professnal preference are to be collected directly from the people through self designed questionnaire. Tools for data analysis
The data analysis of the above study would be based on the appropriate statistical tools.
- 30 -
ANA LYSIS AND INTERPRET ERPRETATION
Q.2. Gender Gender
No. of R esponden espondent M le Female
100 55 45
Gender 100 80 60 Male
40
Female
20 0 Male
Female
Inte Interr reta retatti n: - Out of 100 responden ts 55% are ma le and 45% are fema le.It
shows that male candidate is more than fema le.
- 31 -
Q. . A
£
A ¡
£
¢
¡
¢
I Y ¥
¤
I Y ¥
¤
¦
§
B l -45 45-6 A 6
4
¦
¢
§
¨
©
2 1
¨
¢
Age Age 100 90 80 70 60 50 40 30 20 10 0
Below 30 30-45 45-6 45-60 Above 60 60
Below 30 30 3 0-45
45-60 above 60 60
Inte Interr reta retatti n:
Out of 100 responden ts 40% are below 30 years age a ge, 30% are a re be tween 30-45 years, 20% are be tween 45-60 45-60
ears and 10% are Above Abov e 60
It shows that maximum peop le are from below 45 years old.
- 32 -
ears o ld.
Q4. O O
ti
ti
t. S . P t. S . B i A i lt
15 8 7 1
!
"
!
"
$
!
$
$
#
#
!
%
"
&
"
Occupat ccupatiion 40 30
Govt. S. Pvt. S.
0 Business
10
Agricult ure
0 Govt S.
Pvt. S
Busine Businesss
Agricult icultu ure
Inte Interr reta retatti n:n:-
Out of 100 responden ts 15% are Govt. Employee, 38% are Pvt. Servant, 37% are
Businessman and 10% are Agr iculture. So, people from Pvt. Sector and bus iness larger than other occupation.
- 33 -
Q.5. Annua l Income
A '
'
(
)
lI
'
0
3
1
2
15 25 5 45 5
4
4
4
4
4
4
4
4
4
4
4
4
-25 - 5 -45
5
4
4
4
4
4
4
4
4
4
4
4
4
1
4
4
4
4
)
6
4
4
5 15 1 5
3
7
4
Anual Inc Income (i (in lacs) lacs) 40 35 30 25
1.51.5-2. 2.5 5
20
2.5-3 2.5-3..5
15
3.5-4. 5-4.5 5
10
4.54.5-above above
5 0 1.51.5-2. 2.5 5
2.5-3 2.5-3..5
3.5-4. 5-4.5 5
4.54.5-above above
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% are between 1.5 ± 2.5 lacs annua l income, 35% are between 2.5-3.5 lacs annua l income, 15% are be tween wee n 3.5-4. 3.5-4.5 5 lacs annua l
income and 10% are above 4.5 lacs annua l income. It is clear that people who have below 3.5 lacs annua l income invest more in ULIP.
- 34 -
Q.6. Do you have any insurance policy?
9
8
I
B
@
A
9
C
D
E
P li G
B
F
A
F
H
P A
G
E
C
B
C
Y A
P
8 2
C
O
I
I
Have I s ra ce Policy ? 80 70 60 50 40
Yes
30
No
20 10 0 Yes
No
Inte Interr reta retatti n:n:-
Out of 100 responden ts 80% are have insurance policy and 20% are haven¶t insurance policy persons. Max imum number of peop le have insurance policy.
- 35 -
Q.7. Why has you invested in ULIP?
I
Q
R
S
T
t
S
U
i
V
Q
LIP
I I
7 a
Q
W
X
Y
Q
T
Q
`
R
S
T
t
S
Q
b
S
t
c
a
T
Why have you you inves nvested in ULIP? 70 d
0 50 40
Insu Insuran rancce
30
Inves Invesments ments
20 10 0 Insu Insuran rancce
Investment
Inte Interr reta retatti n:n:-
Out of 100 responden ts 70% peop le are invest for insurance and 30% people are invest for invest ments in ULIP. Maximum peop le invest for insurance purpose.
- 36 -
Q.8. How long do you p lan to stay invested in ULIP?
Pl
e
f
t
t
e
g
h
i
i
f
t
p
q
h
q
i
r
s
f
LIP
-5 Y 5-7 Y 7-1 Y 1 -2 Y t
e
u
e
u
4
q
v
q
v
v
t
e
q
v
v
2 1
u
v
e
u
q
v
How long long do you you plan to stay tay inves nvested in ULIP?
40
30
3-5Yr 3-5Yr
20
5-7Yr -7Yr 7-10Yr 7-10Yr
10
1010-20Yr
0
3w
x
r
5-7 r x
7-10Yr
10-20Yr
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% peop le are invest for 3-5 years, year s, 30% 30 % peop l e are invest for 5-7 years, 20% peop le are invest for 7-10 years and 10% peop le are
invest 10-20 years in ULIP. Max imum people want to stay below 7 years in ULIP.
- 37 -
Q.9 Most Preferred from of invest ment?
Most Most
y
f
f om f om of i
stment ment
LIP M.F Eq it t ing B nk savi savi ng
5 25 25 15
Mos Most preferred form of i of inves nvestment 35 30 25 20 15 10 5 0
ULIP M.F.
Equity Trading Bank Savi Saving
ULIP
M.F.
Equity uity Bank Savi Saving Tradi Trading
Inte Interr reta retatti n:n:-
Out of 100 responden ts 35% peop le are invest in ULIP, 25% peop le are
invest in M.F., 25% peop le are invest in Equity Trading. ng. Most peop le prefer ULIP for investment.
- 38 -
Q.10 which companies policy owned by you?
ompani ompan ies poli poli
owned
ou
I I I DF KOTAK Mahi Mahi ndra Max ewyork
5 1
5
5
Company's policy owned by yo u? 50 45 40 35 30 25 20 15 10 5 0
ICICI HDFC Kotak M.
Max N.
ICICI
HDFC
Kotak M.
Max N.
Inte Interr reta retatti n:n:-
Out of 100 responden ts 35% peop le are own ICICI Policies, 50% peop l e are own HDF C Policies, 10% peop le are own KOTAK Mahindra Policies and 5% people are own Max Newyork Policies. Maximum numbers of peop le have HDFC policy.
- 39 -
Q. 11. Compar ison of var ious policies is impor tan t before selecting one.
Var i ous
poli poli i es i s i mpor tant ant ef ore ore sel sel ecti ecting ng one
Strong Strongll y agree Agree Agree Disagree Disagree eut eutral ral
2 4 25 15
Comp Comparis arison on of vari various pol olici icie es is important before selec electing one. 40 Agree Strong Strong Agree
30
Agree Agree
20
Disa isagree
10
Neutral
0
Strong Strongly Agree Agree
Agr Agree
Disa isagree
Neutral
Inte Interr reta retatti n:n:-
Out of 100 responden ts 20% peop le are Strongly agree, 40% peop le are only agree, 25% peop le are Disagree and 15% peop le are Neutral abou t Compar ison of var ious policies is impor tant before selecting one.
Max imum numbers of peop le are agreeing for compar ison before invest ment.
- 40 -
Q. 12. Which plan you will prefer in ULIP for investment?
Plan Plan you will pref pref er i er i n f or i or invest nvestment ment
LIP
hild il d pensi pension ealt ealth h o Idea
28 2 1
j
k
which plan you will pre pre er in U IP or investment? 35 30 25
Chi Child
20
Pensi Pension on
15
Health
10
No. Idea
5 0
Child
Pension
Health
No. Idea
Inte Interr reta retatti n:-
Out of 100 responden ts 30% prefer for ch ild, 28% prefer for pension, 32% prefer for Hea lth and 10% Peop le have No Idea in ULIP for investment.
Most of the people prefer hea lth and child plan in ULIP.
- 41 -
Q. 13. Which company you w ill prefer for ULIP Policy?
Company
you will pref pref er f er f or or LIP poli policy cy l
ICICI DFC KOTAK Mahi Mahi ndra Max ewyork n
m
2
4 2 8 o
o
Company you will prefer for ULIP Policy 40 35 30 25 20 15 10 5 0
ICICI HDFC KOT A K M. MAX N .
ICICI
HDFC
KOTAK M.
MAX N.
Inte Interr reta retatti n:n:-
Out of 100 responden ts 32% prefer for I CICI, 40% prefer for HDFC, 20% prefer for KOTAK Mahindra and 8% peop le are prefer for Max Newyork for ULIP Policy. Most of the peop le prefer HDF C for ULIP policy.
- 42 -
Q. 14. How much much percent of your income you invest year ly?
Income invest nvest year ly i n %
-2 % 2 - 5% 5-5 % 5 %&above %&above
4
8 14 8
IN OME OME INV INVE EST YE YEARLY ARLY IN % 40 35 30 25
0-20
20
20-35 20-35
15
35-50 35-50
10
50- ABOVE
5 0 0-20
20-35
35-50
50-ABOVE -ABOVE
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% peop le are income invest year ly i n between 0-20, 38% peop le are income invest year ly in between wee n 20-35, 14% peop p eop le are income invest year ly in be tween 35-50 and 8% peop le are income invest year ly in above 50. Most of the peop le prefer below 35% of their income for invest ment.
- 43 -
Q. 15. What is your norma l preferred si e of inves tment?
ormal Normal
pref pref erred erred size ize of inves i nvesttment ment
<5 5 - 1Lakh 1Lakh 1Lakh 1Lakh - 2.5Lakh 2.5Lakh 2.5 & Above
ize o I ves me Size
45
15 1
in '000
45 40 35 30
<50 <50
25
50-100
20
100--250 100
15
250- Above Above
10 5 0 < 50
50-100
100-250
250 - Above Above
Inte Interr reta retatti n:n:-
Out of 100 responden ts 45% prefer for less than 50,000, 30% prefer for between 50,000- 1 Lacs, 15% prefer for be tween 1 lacs to 2.5 lacs and 10% prefer for above 2.5 lacs in s i e of invest ment. Most of the peop le prefer less than 5 lacs as si e of invest ment.
- 44 -
Q. 16. What is the purpose beh ind investment?
Purpose behi behind invest nvestment ment
eturns Liqu Liq ui dity it y W ealt ealth h Tax Savi avi ngs
4 25 25 1
upose behi Pupo behind Inves Investment 40
30 Retu eturn
20
Liquid uidity Wealth
10
Tax Savi Saving
0 ealthTax hTax Sav Savings Return Liquidity Weal
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% peop le are invest for returns purpose, 25% peop l e are invest for liquidity and Wea lth purpose and on ly 10% peop le are invest for tax saving purpose.
Most of the people have return as ma in purpose purp ose for invest ment.
- 45 -
Q. 17. What k ind of invest ment you prefer?
Kind Ki nd of inves investtment ment pref pref er er
i gh r i sk hi gh ret return Medi Medi um i sk Medi Medium Low i sk Low ret return I do not not Like Like any r i sks
eturn
25 4 25 1
Kin o Investmen tmentt Pre Pre er 40 35
High Risk High Return
30 25
Me ium iu m Risk Risk Midiu Midium m Return z
20 15
Low ris risk k Low Retu eturn
10 5
Do not li like Risk Risk
0 H.Ris H.Risk kH Retu eturn
M.Ris M.Risk kM Retu eturn
L Risk Risk L Retu eturn
Don't li like Risk Risk
Inte Interr reta retatti n:n:-
Out of 100 responden ts 25% prefer H igh r isk High return, 40% prefer Medium Risk Medium R eturn, 25% prefer Low Risk Low R eturn and 10% prefer no r isk for invest ment.
Max imum people prefer medium r isk and medium return type investment.
- 46 -
Q. 18. Among ICICI and HDFC which company has be tter market image for ULIP? Among Among ICICI& DFC company have bett better er market marke t image image {
ICICI DFC Both No Idea {
|
4 2 1
}
}
}
}
Which Whic h comp ompany have better market imag mage 40 30
ICICI
20
HDFC Both
10
No Idea
0 ICICI
HDFC
Both
No Idea
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% peop le believe that HDFC have better market
image while 30% peop le believe that ICICI have better market image. Max imum people agree with HDFC have bett er market image.
- 47 -
Q. 19. Among ICICI and HDFC which company provides goodre turn? Among Among ICICI and
~
DFC company provi provi des good ret return
ICICI DFC Both No Idea ~
5
4 2 5
whic which h company ompany provi provide good return return 40 35 0 25 20 15 10 5 0
ICICI HDFC Both No Idea
ICICI
Both
HDFC
No Idea
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% peop le think that HDFC provide good return against ULIP while 35% peop le think that ICICI provide good return aga inst ULIP.
Max imum number of peop le agreed that HDFC provide better return.
- 48 -
Q. 20. Among I CICI and HDF C which has max imum ULIP op tion.
Among Among ICICI &
DFC has maxi maximum
LIP Op Option ti on
ICICI DFC Both No Idea
4 2 1
whic which h company ompany has ma imum UL ULIP opti option 40 30
ICICI
20
HDFC Both
10
No Idea
0 ICICI
HDFC
Both
No Idea
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% peop le are think that HDFC has max imum ULIP option and 30% peop le are think that ICICI has max imum ULIP option.Graph shows
that HDFC has maximum number of ULIP p lans.
- 49 -
its. Q. 21. Among ICICI and HDFC which company ULIP prov ides better benef it Among Among ICICI &
DFC company
LIP Prov Proviide Better tter benefit bene fits s
ICICI DFC Both No Idea
25 4 25 1
whic wh ich h comp ompany's any's ULIP provi rovide better benef its 40 30
ICICI
20
HDFC Both
10
No Idea
0 ICICI
HDFC
Both
No Idea
Inte Interr reta retatti n:n:-
Out of 100 responden ts 40% peop le believe that HDFC ULIP provide bett er
its while 25% peop le believe that ICICI ULIP provide better benef it its. Max imum benef it its. people agree with HDFC in better benef it
- 50 -
Q. 22. Among ICICI and HDFC which company has be tter for claim settlement.
Among Among ICICI& DFC company has bett better er f f or or claim settl settlemen ementt
ICICI DFC Both No Idea
8 27 2 15
whic which h comp ompany is better for clai laim settlement 40 30
ICICI
HDFC
0
Both
10
No Idea
0 ICICI
HDFC
Both
No Idea
Inte Interr reta retatti n:n:-
Out of 100 responden ts 38% peop le think that ICICI is better for claim settlement while 27% peop le think that HDFC has better claim settlement. In this, maximum peop le are agreeing that ICICI is better for claim settlement.
- 51 -
CONCL CONCLUSION
The entry of private sector insurance companies into the Indian insurance sector triggered off a series of changes in the industry. Even with the stiff competition in the market place. A general impression as immense awareness and knowledge among people about various companies and their insurance products gathered during Data collection. Generally the mass is inclined towards HDFC. An interesting result found from the research that the respondents having less income are more concern about their safe future and had invested their savings for their future. Out of 100 respondent, more than 50% are male and about 70% candidate having age below 45 years, which shows that young people shows more attraction towards investment and insurance rather than old people. More than 50% respondents are engaged in service i.e. pvt. & govt. sector and among them more than 70% falls below 3.5 lacs as their annual income. When we compare result between ICICI and HDFC ULIP plans we conclude that HDFC has good market image among the respondents and also many respondents believe that HDFC ULIPs provide better return as compare to ICICI.
- 52 -
R EFER ENCE NCE Books: ooks: y
Kakar P. and Shukla R. (2010), ³The Determinants of Demand for Life Insurance in an Emerging Economy²India´, The Journal of Applied Economic Research, 4: 49- 77
y
Siddiqui, S. (2009), ³Indian Life Insurance Sector: An Overview.´ Available at
y
SSRN: http://ssrn.com/abstract=1339447
Sinha, Ram Pratap (2007), Productivity and Efficiency of Indian General Insurance Industry. ICFAI Journal of Risk & Insurance, Vol. 4, No. 2, pp. 3343.
y
Sinha, T. (2006), ³An Analysis of the Evolution of Insurance in India´. Available at SSRN: http://ssrn.com/abstract=706141 http://ssrn.com/abstract=706141
y
Thipathi, Deva Sena, Saleendran, P. T. and Shanmugasundaram, A. (2007), ³A Study on Consumer Preference and Comparative Analysis of All Life Insurance Companies´, Icfai Journal of Consumer Behavior, Vol. 2, 2, No. 4, pp. 7-16.
y
Annual Report of the Ministry of Finance (Section 3, Insurance Division, http://finmin.nic.in/the_ministry/dept_eco_affairs/bu http://finmin.nic.in/the_ministry/dept_eco_affairs/budget/annu dget/annual_report/9596e al_report/9596e a3.PDF).
Website bsites: y
http://www.bimadeals.com/ulips-plan.php
y
http://www.indg.in/financial-literacy/ulip-irda-faqs.pdf
y
http://www.iciciprulife.com/
y
http://www.hdfclife.com/
- 53 -
QUESTIONNAIR E
This questionnaire is conducting for a major research project on the topic µ A comparative arative stud study of percep ception tion of working working prof ession ssionals toward towards HDFC UL ULI P plan lans & ICICI UL U LIP plan lans
µfor fulfillment of MBA degree from DAVV,Indore
.please fill the questions so that I can frame our research by your valuable opinion and time. Q1 .Name __________________ _____________________________________ ____________________________ _________ Q2.Gender Q2.Ge nder
(a) Male
(b) Female
Q3. Age (In Yrs): (a) Below 30
(b) 30-45
(c) 45-60
(d) Above 60
Q4. Occupation (a)Govt. Ser.
(b). Pvt. Ser.
(c). Business
(d). Agriculture Agricult ure
Q5.Annual Income (a) 150000-250000 (b) 250000-350000 (c) 350000-450000 (d) 450000 ± above Q.6. Do you have any insurance policy? (a) Yes
(b) No
Q.7. Why have you invested in ULIP? (a) Insurance
(b) Investments
Q.8. How long do you plan to stay invested in ULIP? (a) 3-5 year
(b) 5-7 year
(c) 7-10 year
(d)10-20
Q9. Most preferred form of investment? (a)ULIP
(b) M.F
(c) Equity trading tradi ng
(d) Bank saving sa ving
Q.10. which companies policy owned by you? (a) ICICI
(b) HDFC
(c) KOTAK Mahindra
- 54 -
(d) Max Newyork
Q.11. Comparison of various policies is important i mportant before selecting one. (a) Strongly agree
(b) agree
(c) Disagree
(d) Neutral
Q.12. which plan you will prefer in ULIP for investment? (a) Child
(b) Pension Pensi on
(d) Health Healt h
(d) No Idea
Q.13. which company you will prefer for ULIP policy? (a) ICICI
(b) HDFC
(c) KOTAK Mahindra
(d) Max New York.
Q.14.How much % of your income you invest yearly? (a) 0-20%
(b) 20-35%
(c) 35 35-50% -50%
(d) 50% & above
Q15.What is your normal preferred size of investment? (a) < 50000
(b) 50000 - 1 Lakh
(c) 1 Lakh-2.5 lakh
(d) 2.5& above
Q16.What is the purpose behind investment? (a)Returns
(b) Liquidity
(c) Wealth
(d) Tax savings
Q17.What Kind of investment you prefer? (a) High risk High Return
(b ) Medium Risk Medium Return
(c) Low Risk Low return retur n
(d) I do not like any risks
Q.18. Among ICICI and HDFC which company has better market image for ULIP? (a) ICICI
(b) HDFC
(c) Both
(d) No Idea
Q.19. Among ICICI and HDFC which company provides good return? (a) ICICI
(b) HDFC
(c) Both
(d) No Idea
Q.20. Among ICICI and HDFC which has maximum ULIP options? (a) ICICI
(b) HDFC
(c) Both
(d) No Idea
Q.21. Among ICICI and HDFC which company ULIP provides better benefits? (a) ICICI
(b) HDFC
(c) Both
(d) No Idea
Q.22. Among ICICI and HDFC which company has better for claim settlement? (a) ICICI
(b) HDFC
(c) Both
- 55 -
(d) No Idea
