CUSTOMER PERCEPTION OF LIFE INSURANCE POLICIES- WITH SPECIAL REFERENCE TO HDFC STANDARD LIFE INSURANCE PRODUCTS

SUMMER TRAINING PROJECT REPORT SUBMITTED TOWARDS PARTIAL FULFILLMENT OF BACHELOR OF BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF: (Affiliated to Ch. Charan Singh University, Meerut) Academic Session [2009-2012] SUBMITTED BY SWADESH RAJPUT BBA-VIth Sem. Roll no. 9353749
UNDER THE GUIDENCE OF: Mr. VISHAL AGGARWAL (Sales & Development Manager) Mr. SURYA BHUSAN KUMAR (FACULTY.)

HDFC Standard Life Insurance Ltd. IMS, Ghaziabad

INSTITUTE OF MANAGEMENT STUDIES C-238, BULANDSHAHR ROAD, LAL QUAN, PB NO 57 GHAZIABAD-201009

PREFACE
The liberalization of the Indian insurance sector has been the subject of much heated debate for some years. The policy makers where in the catch 22 situation wherein for one they wanted competition, development and growth of this insurance sector which is extremely essential for channeling the investments in to the infrastructure sector. At the other end the policy makers had the fears that the insurance premium, which are substantial, would seep out of the country; and wanted to have a cautious approach of opening for foreign participation in the sector. As one of the rare occurrences the entire debate was put on the back burner and the IRDA saw the day of the light thanks to the maturing polity emerging consensus among factions of different political parties. Though some changes and some restrictive clauses as regards to the foreign participation were included the IRDA has opened the doors for the private entry into insurance. Whether the insurer is old or new, private or public, expanding the market will present multitude of challenges and opportunities. But the key issues, possible trends, opportunities and challenges that insurance sector will have still remains under the realms of the possibilities and speculation. What is the likely impact of opening up Indias insurance sector? The large scale of operations, public sector bureaucracies and cumbersome procedures hampers nationalized insurers. Therefore, potential private entrants expect to score in the areas of customer service, speed and flexibility. They point out that their entry will mean better products and choice for the consumer. The critics counter that the benefit will be slim, because new

Players will concentrate on affluent, urban customers as foreign banks did until recently. This seems to be a logical strategy. Start-up costs-such as those of setting up a conventional distribution network-are large and high-end niches offer better returns. However, the middlemarket segment too has great potential. Since insurance is a volumes game. Therefore, private insurers would be best served by a middle-market approach, targeting customer segments that are currently untapped.

ACKNOWLEDGEMENT
A good Dissertation requires sound knowledge of the subject concerned and to make proper use of the knowledge one has to be assisted under proper guidance.

I am really indebted to my mentor Mr. SURYA BHUSAN KUMAR who imparted the right frame of mind and helped whenever in need.

A large number of individuals have contributed to this project. I am thankful to all of them for their help and encouragement. It was an unforgettable experience, which provided me an opportunity to gain various management skills during the period.

Exchange of ideas generates a new object to working a better way. Apart from the ability, work and time devotion, guidance and cooperation are the two pillars for the success of the project, whenever a person is helped or cooperated by others his heart is bound to pay gratitude to them.

I am extremely grateful and obliged to the organization, HDFC Standard Life Insurance Co. Ltd (Raj Nagar, Gzb.) for providing information, thereby making and completion of the project.

SWADESH RAJPUT
BBA (SEM-VI)

TABLE OF CONTENT PARTICULARS

PREFACE 1. EXECUTIVE SUMMARY 2. INTRODUCTION Meaning of insurance Needs of insurance Insurance at various life stages Types of insurance policies Various Pvt. Insurance co.

PAGE NO.
2 6 7-17

Benefits of insurance
3. OBJECTIVE OF STUDY Company Profile HDFC Standard life ICICI Prudential 18-28

LIC
4. RESEARCH METHODOLOGY 5. ANALYSIS AND FINDINGS Comparative Analysis Comparative analysis (by using graphs) Comparative study of LIC & HDFC Life Insurance SWOT Analysis 56-57 29-30 31-55

Findings Marketing Strategy Of HDFC Standard Life Recommendations

6. LIMITATIONS 7. CONCLUSION & RECOMMENDATIONS 8. APPENDIX 9. BIBLIOGRAHY

58-59 60-65 66-69 70-71

EXECUTIVE SUMMARY
In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 7080% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and HDFC Standard Life Insurance Company Ltd has given me the opportunity to work and get experience in highly competitive and enhancing sector. The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In Insurance sector, distribution channel includes only agents or agency holders of the company. If companies like RELIANCE LIFE INSURANCE, TATA AIG, MAX, LIC etc have adequate agents in the market they can capture big market as compared to the other companies. Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer

CHAPTER 1
INTRODUCTION

MEANING OF INSURANCE

Insurance is a tool by which fatalities of a small number are compensated out of funds collected from plenteous.

Life insurance is a contract providing for the payment of money to the person assured or failing him to the person entitled to receive the same on the happening of certain event.

Uncertainty of death is inherited in human life. It is this rise, which gives rise to the necessity for some form of protection against the financial loss arising from the death.

It is basically a safeguard against uncertainties. Insurance essentially is an arrangement where the losses experienced by a few are extended over several who are exposed to similar risks.

For example- Suppose 1500 persons in a village aged 60 of which 15 are expected to die, and the economic value of the loss is Rs. 50,000, then the total loss will be 7, 50,000. If each contributes Rs. 500 a year the common fund would be 1500 persons share 7, 50,000 that are enough to pay and the risk in cases of 15 persons.

From the business point of view, Insurance is divided into: Life Insurance General Insurance

According to the U.S. Life Office Association Inc. (LOMA), Life Insurance is defined as follows: Life Insurance provides a sum of money if the person who is insured dies whilst the policy is in effect.

Life Insurance Corporation of India is the oldest life insurance company having a market share of around 74% at present. But, with the passing of the IRDA Act 1999, the insurance sector is opened up, and private Life Insurance companies were allowed to enter in the market.

It is relevant to mention that though LIC is the market leader at present but its market share is increasing with a diminishing rate as compared to private Life Insurance Companies who have captured around 26% of the market share in just a short span of five years. So, it is necessary that LIC should look up with the changing scenario of needs of customers and formulate the policies accordingly.

NEED FOR LIFE INSURANCE

The need for life insurance comes from the need to safeguard our family. If you care for your familys needs you will definitely consider insurance. Today insurance has become even more important due to the disintegration of the prevalent joint family system, a system in which a number of generations co-existed in harmony, and a system in which a sense of financial security was always there as there were more earning members. Times have changed and the nuclear family has emerged. Therefore you need to save a part of income for the future too. This is where insurance helps us. Factors such as fewer numbers of earning members, stress, pollution, increased competition, higher ambitions etc are some of the reasons why insurance has gained importance and where insurance plays a successful role. Insurance provide a sense of security to the income earner as also to the family. Buying insurance frees the individual from unnecessary financial burden that can otherwise make him spend sleepless nights. The individual has a sense of consolation that he has something to fall back on. From the very beginning of your life, to your retirement age insurance can take care of all your needs. Your child needs good education to mould him into a good citizen. After his schooling he needs to go for higher studies, to gain a professional edge over the others - a necessity in this age where cutthroat competition is the rule. His career needs have to be fulfilled. Insurance is a must also because of the uncertain future adversities of life. Accidents, illnesses, disability etc are facts of life, which can be extremely devastating. Disability can be taken care of by insurance. Your family will not have to go through the grind due to your present inability. Moreover, retirement, an age when every individual has almost fulfilled his responsibilities and looks forward to relaxing can be painful if not planned properly. Have we considered the increasing inflation and taxes? Will our investment offer us attractive returns under such circumstances? Will it take care of our family after us? An insurance policy will definitely take care of these and a lot more. Insurance has become a necessity today. It provides timely financial as also rewards with bonuses. Life Insurance has come a long way from the

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earlier days when it was originally conceived as a risk-covering medium for short periods of time, covering temporary risk situations, such as sea voyages. Therefore after going through the discussion let us summarize our points and understand the need of life insurance:

a) Temporary needs / threats The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc. b) Regular Savings / Family Protection Providing for one's family and oneself, as a medium to long-term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence for their family. c) Investment Put simply, the building up of savings while safeguarding it from the ravages of inflation. Unlike regular saving products, investment products are traditionally lump sum investments, where the individual makes a one off payment. d) Old age provision Provision for later years becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in one's old age. e) Children benefit Provision for the education, marriage and start in life for the children. f) Special needs provision Protection against loss arising out of accident, disability, sickness, loan repayment on death. WHY IS INSURANCE SUPERIOR TO OTHER FORM OF SAVINGS?

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An immediate estate is created in favor of the policyholder. Protection in case of death. Liquidity in case of need easy loans are available. Tax relief income tax, wealth tax etc... Policies can be offered as collateral security. Policies can be taken under M.W.P. Act 1874, to protect against creditors.

Let us take an example to understand the need for insurance: Mr. Atul is 45 and self-employed. His wife Nandini, who is a housewife, looks after their two children aged 3 and 7 years. They stay in a rented accommodation, where the rent is 15,000 rupees per month. Mr. Atul has taken up a loan of Rs. 2 lakh. His monthly earnings on average are 40,000 rupees. Mr. Atul passes away in an unfortunate road accident. What are some of the financial implications of his death on his family? There may be several financial implications on his family. Some of these are: a) The monthly income, previously provided by Mr. Atul would stop. b) His wife and children may have to seek financial assistance from other relatives. c) His wife may not have enough money to pay back the loan of Rs. 2 lakhs. d) The family may have to move into a cheaper accommodation.

e) His widow may have to take up work to earn money. f) The education of his children may suffer.

This simple example illustrates the impact premature death can have on a family, where the main earner has no life cover.

Had Mr. Atul taken life cover, his family would not have faced such hardships in the event of his unfortunate death. A simple life insurance policy could have provided Mr. Atul's

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family with a lump sum that could have been invested to provide an income equal to all or part of his income. In simple words, insurance protects against untimely losses. Insurance has been found useful in the lives of persons both in the short term and long term. Short term needs like sudden medical costs and long-term needs like marriage expenses etc can be met with using life insurance.

LIFE INSURANCE NEEDS AT VARIOUS LIFE STAGES

The need for life insurance changes as ones life changes. When one is young, one typically has no need for life insurance, but this changes as one take on more responsibility, and as ones family grows. Then, as responsibilities once again begin to diminish, one need for life insurance drops off. Let's look at how life insurance needs change throughout ones lifetime. School days Childhood is typically a time of no worries, no cares, and no responsibilities. A child depends on others to take care of them, not the other way around. Although it would be tragic, a child's death would likely have little financial impact on the child's family. Thus, there is generally no need for life insurance at this point in an individual's life. A child's death does create one short-term financial problem: funeral expenses. But buying a life insurance policy just for that purpose doesn't really make sense. Instead, think about saving the money one would spend on insurance premiums and open a savings account, or put the money in some type of investment vehicle. That way, the money can be used for college expenses or a first home, but it will also be available in case of a tragedy. Alternatively, a burial policy provides enough money for funeral expenses, at a much lower cost than a typical life insurance policy. For growing family When one has young children, the life insurance needs reach a climax. In most situations, life insurance for both parents is appropriate.

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Single-income families are completely dependent on the income of the breadwinner. If he or she dies without life insurance, the consequences could be disastrous. The death of the stay-athome spouse would necessitate costly daycare expenses. Both spouses should carry enough life insurance to cover the expenses that would result from their death.

Dual-income families need life insurance, too. If one spouse dies, it is unlikely that the surviving spouse will be able to keep up with the household expenses and pay for childcare with the remaining income.

Moving up the ladder For many people, career advancement means starting a new job with a new company. At some point, one might even decide to be ones own boss and start his own business. It might not be the top priority, but it is important to review the life insurance coverage any time one leave an employer. Keep in mind; one probably won't be able to keep any life insurance that was provided by ones employer. If one is going to work for a new company, one might receive a comparable life insurance benefit. But if one is going into business for him, one will need to purchase an individual life insurance policy. Make sure the amount of ones coverage is up-to-date, as well. The policy one purchased right after getting married might not be adequate anymore; especially if one have kids, a mortgage, and college expenses to consider. Business owners may also have business debt to consider. If one is not incorporated, ones family would have to pay those bills if one dies. Single again Unfortunately, divorce has become a fact of life in our society. One will have to make many financial decisions during this stressful time, including the decision of what to do about ones life insurance. Divorce raises both beneficiary issues and coverage issues. And if one has children, these issues become even more complex.

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If one and his spouse have no children, it may be as simple as changing the beneficiary on ones policy and adjusting ones coverage to reflect ones newly single status. However, if one has kids, one will want to make sure that they are provided for in the event of ones death. This

may involve purchasing a new policy and naming them as beneficiaries. The custodial and noncustodial parent will need to work out the details of this complicated situation. If one can't come to terms, the court may make the decisions for you.

The golden years Once the children are grown, the life insurance needs decrease. One will live off his retirement savings, and hopefully one has accumulated assets that can be passed on to his heirs when he or she dies. Not only is life insurance expensive at this point, but it's probably unnecessary. Life Insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event insured against. Usually the contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death, if it occurs earlier. Among other things, the contract also provides for the payment of premium periodically to the Corporation by the assured. Life insurance is universally acknowledged to be an institution which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilizations partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person: that of dying prematurely leaving a dependent family to fend for itself and that of living to old age without visible means of support.

TYPES OF INSURANCE POLICIES

Though there are a lot of policies available in the market under different names and by different companies, the policies can broadly be classified into the following categories:

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Term Insurance Policy

Whole Life Policy

Money Back Policy

Endowment Policy

Pension Plans Or Annuities

VARIOUS PRIVATE LIFE INSURANCE COMPANIES IN INDIA

Presently there are 12 Life Insurance companies operating in the market. These are following as:1) HDFC Standard Life Insurance company 2) ICICI Prudential Life Insurance company 3) Birla Sun life Insurance company 4) TATA AIG Life Insurance Company 5) OM Kodak Mahindra Life Insurance company 6) MAX New York Life Insurance company 7) Allianz Bajaj Life Insurance company 8) ING Vysya Life Insurance company 9) Met Life India Insurance company Pvt. Ltd 10) Aviva Life Insurance company Pvt. Ltd 11) AMP Sanmar Assurance Company Ltd 12) Sahara India Life Insurance Company

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BENEFITS FROM LIFE INSURANCE It is superior to a traditional saving vehicles It encourages saving and forces thrift It provides easy settlement and protection against creditors It helps to fulfill the purpose of the life assured It can be encased and facilitates borrowing Tax relief

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OBJECTIVE OF STUDY

The objective of the research is divided into two folds:

To find the awareness of Customers about various life insurance policies available in market A comparative study of HDFC Standard Life Insurance products vis--vis products of other major players.

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COMPANY PROFILE

HDFC Standard Life Insurance Co.

ABOUT HDFC BACK GROUD

HDFC was incorporated in 1977 with the primary objective of meeting a social need- that of promoting home ownership by providing long term finance to household needs.HDFC was promoted with an initial share capital of Rs.100 million. BUSINESS OBJECTIVE The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets. ORGANIZATIONAL GOALS HDFCs main goals are to a) b) c) d) e) develop close relationships with individual households, maintain its position as the premier housing finance institution in the country, transform ideas into viable and creative solutions, provide consistently high returns to shareholders, and To grow through diversification by leveraging off the existing client base. THE PARTNERSHIP HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship. The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.
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In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a handpicked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000.

Incorporation of HDFC Standard Life Insurance Company Limited: The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited.

Its ambition from as far back as October 1995 was to be the first private company to reenter the life insurance market in India. On the 23rd of October 2000, this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations.

HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance company's in India are measured.

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Mission: It aims to be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market, rather it is a combination of several things like Customer service of the highest order Value for money for customers Professionalism in carrying out business Innovative products to cater to different needs of different customers Use of technology to improve service standards Increasing market share

Values: SECURITY: Providing long term financial security to its policy holders will be its constant Endeavour. It will do this by offering life insurance and pension products. TRUST: It appreciates the trust placed by its policy holders in them hence; it will aim to manage their investments very carefully and live up to this trust. INNOVATION: Recognizing the different needs of the customers, it will be offering a range of innovative products to meet these needs. Its mission is to be the best new life insurance company in India and these are the values that will guide in this.

PRODUTCS
Each of us leads a unique life and so has unique needs. HDFC Standard Life Insurance Offers a range of products and invites you to choose the one that suits you the best.

PLAN

BENEFITS

1.SAVING PLAN

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Endowment Assurance Plan

Life insurance and saving with choice of investment funds.

Unit Linked Endowment Plan

Life insurance and saving with choice of investment funds.

Childrens Plan Unit Linked Youngster Plan

Financial security for your child Financial security for your child with choice of investment funds.

Money Back Plan 2.INVESTMENT PLAN Single Premium Whole Of Life 3.PROTECTION PLAN Term Assurance Plan Loan Cover Term Assurance Plan 4.RETIREMENT PLANS Personal Pension Plan Unit Link Pension Plan

Life insurance with savings.

Investment with life insurance.

Life insurance at an affordable price Life insurance customized for home loans.

Saving for retirement. Retirement saving with a choice of investment funds.

ICICI Prudential Life Insurance

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).

ICICI Prudential's equity base stands at Rs. 11.85 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780
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crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors; as well as 7 ban assurance and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

LIFE INSURANCE CORPORATION

The Life Insurance Corporation (LIC) was established about 44 years ago with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and became synonymous with life insurance. Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six lakh agency force. LIC has hundred divisional offices and has established extensive training facilities at all levels. At the apex, are the Management Development Institute, seven Zonal Training Centers and 35 Sales Training Centers? At the industry level, along with the Government and the GIC, it has helped establish the National Insurance Academy. It presently transacts individual life insurance businesses, group insurance businesses, social security schemes and pensions, grants housing loans through its subsidiary; and markets savings and investment products through its mutual fund. It pays off about Rs 6,000 crore annually to 5.6 million policyholders

OBJECTIVES OF LIC

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

socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost.

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

adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders,

whose money it holds in trust, without losing sight of the interest of the community as a whole;

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the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return.

Conduct business with utmost economy and with the full realization that the moneys

belong to the policyholders.

Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing

social and economic environment.

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

the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective INFORMATION TECHNOLOGY AND LIC LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in servicing and in their business. Data pertaining to almost 10 crore policies being held on computers in LIC. We have gone in for relevant and appropriate technology over the years. 1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950s were phased out in 1980s and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. Standardization of Hardware and Software commenced in 1990s. Standard Computer Packages were developed and implemented for Ordinary and Salary Savings Scheme (SSS) Policies. FRONT END OPERATIONS With a view to enhancing customer responsiveness and services, in July 1995, LIC started a drive of On Line Service to Policyholders and Agents through Computer. This on line service enabled policyholders to receive immediate policy status report, prompt acceptance of their premium and get Revival Quotation, Loan Quotation on demand. Incorporating change of address can be done on line. Quicker completion of proposals and dispatch of policy documents

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have become a reality. All our 2048 branches across the country have been covered under frontend operations. Thus all our 100 divisional offices have achieved the distinction of 100% branch computerization. New payment related Modules pertaining to both ordinary & SSS policies have been added to the Front End Package catering to Loan, Claims and Development Officers Appraisal. All these modules help to reduce time-lag and ensure accuracy. METRO AREA NETWORK A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in November, 1997, enabling policyholders in Mumbai to pay their Premium or get their Status Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in the city. The System has been working successfully. More than 10,000 transactions are carried out over this Network on any given working day. Such Networks have been implemented in other cities also. WIDE AREA NETWORK All 7 Zonal Offices and all the MAN centers are connected through a Wide Area Network (WAN). This will enable a customer to view his policy data and pay premium from any branch of any MAN city. As at May 2002, we have 91 centers in India with more than 1320 branches networked under WAN. INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS) IVRS has already been made functional in 59 centers all over the country. This would enable customers to ring up LIC and receive information (e.g. next premium due, Status, Loan Amount, and Maturity payment due, Accumulated Bonus etc.) about their policies on the telephone. This information could also be faxed on demand to the customer. LIC ON THE INTERNET The Internet site is an information provider. It has displayed information about LIC & its subsidiaries-LIC (International) E.C., LIC (Nepal) Ltd, LIC Mutual Fund, LIC Housing Finance and their products. Efforts are on to upgrade our web site to make it dynamic and interactive. The addresses/e-mail Ids of its Zonal Offices, Zonal Training Centers, Management Development Center, Overseas Branches, Divisional Offices and also all Branch Offices with a view to speed up the communication process.

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PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET LIC has given its policyholders a unique facility to pay premiums through Internet absolutely free and also view their policy details on Internet premium payments. There are 11 service providers with whom L I C has signed the agreement to provide this service.

VARIOUS POLICIES OF LIC (PENSION PLAN)

JEEVAN DHARA Table No. X.1 (Characteristics of Jeevan Dhara) Minimum Age at entry: Maximum age at entry: Minimum vesting age: Maximum vesting age: Minimum deferment period: Minimum Notional Cash option: Minimum Single Premium: Minimum amount of Annual Premium: Maximum deferment period: Age Proof: Source: www.licindia.in JEEVAN SURAKSHA Minimum Age at entry: Maximum age at entry: Minimum vesting age: Maximum vesting age: Minimum deferment period: Minimum Notional Cash option: Minimum Single Premium: Minimum amount of Annual Premium: Maximum deferment period: Age Proof: : 18 years last birthday. 65 years last birthday. 50 years last birthday. 79 years last birthday. 2 years. Rs. 50,000 for regular premium policies. Rs. 10,000/Rs. 2500 35 years. Standard Age Proof required. 18 years last birthday. 65 years last birthday. 50 years last birthday. 79 years last birthday. 2 years. Rs. 50,000 for regular premium policies. Rs. 10,000/Rs. 2500 35 years. Standard Age Proof required.

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(SPECIAL PLAN)
BIMA NIVESH Bima Nivesh 2005 is a plan with compound rate of guaranteed additions and loyalty additions. This is the revised version of our popular Bima Nivesh Plan 2004 and is introduced to meet the overwhelming demand for a single premium plan from our customers. It is a single premium, ideal investment plan for those who have no regular income but good periodical income. Bima Nivesh 2005 is available for terms 5 and 10 years. The guaranteed surrender value is payable after the policy has run for at least one year. Term Assurance Rider is also available by payment of a single premium at the option of the proposer.

(DOUBLE COVER ENDOWMENT PLAN)

JEEVAN MITRA The benefits of this policy are considered normally for standard and substandard lives Class I and II. It cannot be allowed for people engaged in hazardous occupations. Female lives under Category I & II allowed. Non-medical special is allowed only if the Sum Assured does not exceed Rs.1, 00,000/Besides the usual benefits offered by any endowment insurance plan; this policy provides for an additional insurance cover equal to the sum assured in the event of a policy holders death during the term of the policy. In other words, the death claim in the case of this policy is twice the basic sum assured. The survival claim, on the other hand, is the basic sum assured, plus the accrued bonuses. Bonus is, similarly, calculated only on the basic sum assured at rates applicable to endowment policies. For instance, if a person insured for Rs.10, 000 under this policy were to die before its maturity, the death claim payable would be Rs.20, 000 plus the accrued bonus on Rs.10, 000, the basic sum assured. If the policy holder survives the full term of the policy, the payment on maturity would be Rs.10, 000 plus the accumulated bonus. Suitable For: Being a high-risk endowment assurance policy, this plan is suitable for people of young ages who wish to protect their families from a financial setback that may occur owing to their

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premature death. The amount assured if not paid by reason of his death earlier will payable at the end of the endowment term where it can be invested in an annuity provision for the rest of the policyholder's life or in any other way he may think most suitable at that time. JEEVAN SURABHI Jeevan Surabhi plan is similar to other money back plans. However main differences in regular money back plans and Jeevan Surabhi are as under Maturity term is more than premium paying term. Early and higher rate of survival benefit payment. Risk cover increases every five years.

The actual term and the premium paying term for these plans are as under.

Plan no. 106 107 108

Policy Term 15 years 20 years 25 years

Premium Paying Term 12 years 15 years 18 years

Full sum assured is paid back as survival benefit by the end of premium paying term. However, the risk cover and additional risk cover continue and the policy participates in profits till the end of policy term.

Accident Benefit is restricted to the premium paying period and to the overall limit of Rs.5 lakhs on a single life.
SuitableFor:

This plan holds special interest to people who besides wishing to provide for their old age and family feel the need for lump sum benefits at periodical intervals.

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CHAPTER 2
METHODOLOGY

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RESEARCH METHODOLOGY:
The dissertation is based on the data collected through the secondary sources. The data collected through the secondary sources are books, magazines, newspaper and Internet.
PRIMARY SOURCES ARE ALSO INCLUDED LIKE INTERVIEW AND QUESTIONER.

The methodology that is being adopted is basically a descriptive research.

ASSUMPTION
Data is collected from secondary sources therefore it is assumed that data being collected is enough for the completion of dissertation

Some of the information and data may not be current.

Data may or may not be accurate.

So far as Internet Search is concerned, it is based on finding certain key words so there is a possibility that some information will be missed.

30

CHAPTER 3
ANALYSIS AND FINDING

31

DATA ANALYSIS
1. According to you, which have played a major role in the field of life-

insurance companies. Table No. 3.1 Major Player of Life Insurance Business Insurance Pvt. Employees Govt. Employees Business Man LIC 10 13 10 HDFC 5 3 5 ICICI 3 3 4 Others 2 1 1 Source: Authors Compilation

Figure 3.1 Major Player of Life Insurance Business After analyzing this data it is found that from the given three respective level of Pvt. Govt. and Business 10 out of 20 (30%), 13 out of 20 (39%) and 10 out of 20 (30%) are in favors of LIC, while 5 out of 20 (15%), 3 out of 20 (9%) and 5 out of 20 (6%), 1 out of 20 (30%) and 1 out of 20 (30%) are in favors of other Pvt. Companies.

32

2. Which insurance companies have been successful to make strong public base by advertisement?

Insuranc e

Pvt. Govt. Employees Employees LIC 12 14 HDC 3 2 ICICI 4 3 Othes 1 1 Source: Authors Compilation

Business Man 12 4 3 1

Figure 3.2 public based advertisement

33

3. Which insurance company has gained massive public support in the current fiscal year? Pvt. Employees 12 3 3 2 Govt. Employees 14 2 2 2 Business Man 10 5 4 1

Insurance

LIC HDFC ICICI Others Source: magazines

Figure: 3.3 Massive support From the above table, it is found that from the given three sector Private, Govt. and Business 12 out of 20 (36%), 14 out of 20 (42%), 10 out of 20 (30%), are in the favors of LIC 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in favors of ICICI, whereas only 2 out of 20 (6%), 2 out of 20 (6%) 1 and out of 20 (3%) favors others company.

34

4. Do you think insurance policy is in the direction of public welfare? Pvt. Sector Yes 13 Govt. Sector 16 4 Business Man 12 8

7 No Source: Authors Compilation

Figure : 3.4 Public welfare

The above table shows that from private sector 13 out of 20 (30%) agree and 7 out of 20 (21%) disagree, from govt. sector 16 out of 20 (48%) think it right but 4 out of 20 (12%) dont think it so and from business man 12 out of 20 (36%) are in favors of the above statement but 8 out of 20 (24%) dont favors it.

35

5. Is retirement bond or pension policy launched by the number of private player as well as public sector Company in the direction of secured old age? Pvt. Sector Yes No Source: News papers 15 5 Govt. Sector 18 2 Business Man 13 7

Figure : 3.5 Private players in public sector

It is obvious from the above table that 15 out of 20 (45%), 18 out of 20 (54%) and 13 out of 20 (39%) from the given three think retirement bend or pension policy a legitimate step in the direction of secure old age but 5 out 20 (15%), 2 out of 20 (6%) and 7 out 20 (21%) dont agree with the opinion of the majority class.

36

6. Do you think that risk coverage factor included in Insurance policy attracts general public towards the policy? Pvt. Sector Yes 12 Govt. Sector 16 4 Business Man 11 9

8 No Source: Authors Compilation

Figure :3.6 risk coverage factor From the above table it is found that 12 out of 20 (36%) from Private sector 16 out of 20 (48%). From Govt. sector and 11 out of 20 (33%) thinks risk coverage factor attractive but rest 8 out of 20 (24%), 4 out of 20 (12%) and 9 out 20 (27%) from the above them sector dont think it so encouraging towards saving trend whereas 3 out of 20 (9%), 2 of 20 (6%) and 4 out of 20 (12%) dont think it so.

37

7.What according to you, the term plan that only covers risk and doesnt cover maturity benefit on survival at the end of the term provides security cover over policy holders or a smart way of accumulative money from policy holders? Pvt. Sector Security Cover Accumulative Money Source: Authors Compilation 11 9 Govt. Sector 15 5 Business Man 12 8

Figure 3.7 maturity benefit

It is obvious from the above data that 11 out of 20 (33%), from the Pvt. Sector, 15 out of 20 (45%) from Govt. sector and 12 out of 20 (36%) think term plan as a security cover but 9 out of 20 (27%), 5 out of 20 (15%) and 8 out of 20 (24%) from the three respective group think it as a way of accumulating money insurance company.

38

8. Do you think that the arrival of so many private companies in this insurance sector envisage a lot of choice to policy holder? Pvt. Sector Yes No Source: Authors Compilation 16 4 Govt. Sector 18 2 Business Man 16 4

Figure 3.8 Arrival of companies

From analyzing the above data it is found that 16 out of 20 (48%) from Pvt. Sector, 18 out of 20 (54%) from Govt. sector and 16 out of 20 (48%) think that the arrival of private players envisage a lot of choice to policy holder. But 4 out of 20 (12%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.

39

9.

Do you agree that customer-centricity and transparency are the buzzwords

for success in this evolving industry? Pvt. Sector Yes No Source: Authors Compilation 18 2 Govt. Sector 20 Business Man 19 1

Figure 3.9 customer centricity

From thesis above data, it is found the 18 out of 20 (54%) from Pvt. Sector and 20 out of 20 (60%) from Govt. Sector 19 out of 20 (57%) from Business men agree with this statement whereas only 2 out of 20 (6%) from Pvt. Sector and 1 out of 20 (3%) from Business men do not agree with this statement.

40

COMPARATIVE STUDY OF ICICI PRIDENTIAL, LIC AND HDFC STANDARD LIFE POLICIES
LIC and HDFC Standard Life both provide different policies and plans depending upon the various requirements of people. Different plans are been categorized under seven major categories of policies. Then a comparative analysis is done between the plans of both LIC and HDFC Standard Life. Both the companies provide similar types of plan just with the difference in the features or premium amounts.

HDFC STANDARD LIFE INSURANCE WHOLE LIFE PLANS Policy that meets long term investment needs. Premium adjusted mortality part is

LIC

ICICI PRUDENTIAL

WHOLE OF LIFE PLANS The most cheapest

LIFE TIME PLAN Policy that meets your changing need over a lifetime Premium adjusted mortality part is

form of LIC policy Premiums are payable throughout the life Sum assured is payable on the death of the life assured

towards and

towards and

administrative charges and rest is invested in it with profits fund

administrative charges and rest is invested in plan of your choice.

Bringing the difference in the plan of LIC and HDFC Standard Life Insurance we can find out that LIC plans are very simple to understand whereas the other provide plans according to your the changing needs of people.

41

ENDOWMENT POLICIES

HDFC STANDARD LIFE LIC INSURANCE

ICICI PRUDENTIAL

HDFC STANDARD SAVE N ENDOWMENT PROTECT PROFITS This plan ensures that ones family remains financially independent even if the insured person is not around. It is a fixed term policy that combines saving with life cover. The premium is paid regularly during the term The plan receives simple reversionary bonuses, which are usually added annually. At the end of the terminal bonus may be paid depending on the performance.

WITH ICICI PRU PROTECT

SAVE

These are the policies of limited duration payable on maturity or death of the life assured. These plans are available with different option like with or without profit or double or special endowments

An ICICI ideal plan for those who want to accumulate funds on a regular basis with life cover It is a fixed term policy that combines saving with life cover. The premium is paid regularly during the term On death up to age7: basic premium returned without interest On death after age 7: sum assured @3.5% compounded interest for first 4 yrs .

It can be made out by comparing the plans of both the companies that while HDFC are more concerned about saving and are categorized for the different section of people. LIC is straight and simple plan.

42

MONEY BACK POLICIES

HDFC STANDARD LIFE LIC ICICI PRUDENTIAL

INSURANCE HDFC STANDARD CASH BACK An ideal plan for every milestone combines of life. It life JEEVAN MITRA A high risk low cost plan and with profit plan This plan provide for an additional insurance cover, equal to the sun assured in the event of policy holder death during the term of policy. JEEVAN SURBHI Premium payable for ICICI PRU CASH BAK An ideal plan for every milestone combines of life. It life

cover+liquidity+savings. It provides the optional benefit to customize the policy to suit the needs through (C.I.), benefit accidental (ADB). Premium payable for critical Accidental (ATB) death illness term and benefit

cover+liquidity+savings. It provides survival benefit after every 3 or 4 yrs and add-on benefit for a

nominal extra premium.

limited periods available with periods of 12,15 and 18 yrs Money back at interval of 4 and 5 yrs as per policy term JEEVAN SANCAY Plan having a provision of guarantee addition at 70p.a. per thousand and loyalty addition payable on date of maturity.

periods ranging from 10 years to 30 years

The LIC under money back policies provide various plan each having different kinds of features. On the other hand HDFC Standard life, which combines all the features in just one single plan? The LIC plans like Jeevan Surabhi are suitable for high income and tax categories.
43

SINGLE PREMIUM POLICIES HDFC STANDARD LIFE LIC INSURANCE HDFC STANDARD SOUND INVESTMENT This plan is well suited to meet long term investment needs. A compound reversionary bonus is being added to the policy every year. BIMA NIVESH ICICI PRUDENTIAL

A safe and comprehensive This is a unique, short-term, plan for those about to retire multiple benefits insurance or has retired. It combines best plan which provide safety, of insurance and investment liquidity attractive returns and Liquidity with assured and tax benefit. steady annual returns. Life This plan can be assigned as a cover up to 110% of premium paid. collateral security PRU and ICICI INVEST ASSURE

An investment with healthy It provides loyalty returns and added benefit of guarantee addition too. insurance. The eligibility ages minimum 18 years maximum 70 years. are and

An investment with healthy returns and added benefit of insurance. This policy has a fixed term of 7 or10 yrs ICICI PRU LIFE LINK An ideal market linked insurance plan that enables you to enjoy the upside of market returns It gives flexibility of choosing investment option between growths, income or balanced plan.

It gives flexibility of choosing investment option between growths, income or balanced plan.

Under the single premium policies heading LIC just provides one policy as compared to HDFC Standard life insurance which gives different policies. Moreover HDFC Standard life gives higher assured returns and various other benefits.

44

TERM INSURANCE PLANS

HDFC STANDARD LIFE LIC INSURANCE HDFC STANDARD LIFE BIMA KIRAN ASSURED

ICICI PRUDENTIAL

An ideal low cost policy that

A plan with the provision for covers life with uncertainties

A sum assured is payable in return of 90 case of death of life assured premium paid on surviving of It comes with a choice of two during the term of the the term convenient premium payment contract. Free term cover after maturity modes-one time and regular This plan comes at a minimal provided the policy is in full cost and is well suited for the force It gives the flexibility of value-conscious customer. It Having an added attraction of accident and disability cover gives optional benefits to loyalty addition for a extra premium customize the needs through critical illness (C.I.), JEEVAN GRIHA Accidental benefit For people desirous of Minimum premium payable (ATB) and accidental death obtaining a housing loan with 2400 per annum. It has no benefit (ADB). Minimum policy acting as collateral maturity benefits premium payable per annum security having the age of life assured being 20 years is 1566. Minimum premium payable 2400 per annum. It has no maturity benefits A high risk low cost plan Available as double and triple cover plans It ensure repayment of loan in the event of premature death of the borrower term

45

Comparison between the plans of both the companies shows that while HDFC Standard life provide more flexible and stable return plans the LIC are safer plan taking care of family as a whole. Again LIC provides different plan under this category of life insurance

46

CHILDREN POLICIES
HDFC STANDARD LIFE LIC INSURANCE ICICI PRUDENTIAL

47

HDFC STANDARD CHILDS FUTURE Plan secure designed the to childs

JEEVAN BALYA Plan provides for a monthly income up to age of 21 in case of unfortunate death of parents Premium waiver

SMART KID Plan critical milestone designed for

educational include

future by giving the child (beneficiary) a guaranteed lump sum on maturity or in case of the insured parents unfortunate demise. The beneficiary will receive the benefits as per the plans options namely accelerated

specialized course in the country and abroad The sum assured is paid immediately from 100,000 to 300,000 All future payments are waived off

benefit is available BAL VIDYA The plan takes care of family expenses-on

school college, health or just starting a career Money monthly in regular

benefit plan, maturity benefit plan or double benefit plan. Premiums can be paid either quarterly, half yearly insured convenience.

Most importantly the Childs will continue to receive the policy benefits.

installment

and in lump sum at specific point of time.

or

annually on the parents

depending

Most importantly the Childs will continue to receive the policy benefits.

It can be made out that LIC provide different plans for children as compared to HDFC Standard life, which gives only one plan for kids. Both aims at providing the parents aid for higher studies of their children. While LIC policies are designed to meet the different need of family budget HDFC Standard life are more customer tailored.
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ANNUITY PLANS
HDFC STANDARD LIFE LIC INSURANCE HDFC STANDARD POST RETIREMENT INCOME An ideal solution JEEVAN SURAKSHA This plan is suitable for every individual salaried employed or or self any ICICI PRU FOREVER LIFE An ideal solution for people around 30 ICICI PRUDENTIAL

designed to provide a post-retirement

yrs of age, which offers benefit care of retirement and takes

income for life with the choose retirement date. Flexibility to select any ages one which to retire at (vesting age), between 50 freedom to the

professional like C.A., Dr. The plan can be

protection

need Health cover till 65 through add on spouse

availed for a lifelong monthly pension with an option to commute 25%of assured. JEEVAN DHARA the sum

benefit100% pension

years 70 years. One can choose to pay a single premium. For a single premium

ICICI FOREVER LIFE LINK

This plan is suitable PENSION PLAN for executives; selfemployed, professional young employed The plan guarantees A single premium

policy, the premium payable is equal to sum assured. The Premium one has to pay depends on age, sum assured chosen, the premium paying

market linked pension plan. between Rs 40000 to 99999 it is 2% Rs 100,000 to 499,999 For premium

lifelong pension and are tax deferred, return

guarantee presently 12.5%

49

frequency and the term of the policy. For a regular premium policy, one will

Policy competitive

provides and

it is 1.5% Rs 500,000 and above it is 1.25 % of the premium

attractive annuity rates.

Lump sum payment to

the annuitants here..

continue to pay an annual premium for each year of the policy.

Insurance coverage is equal to 105% of the

On retirements the
accumulated value of is used to provide pension.

initial premium and the top ups Can opt for 0 insurance cover too ICICI PRU LIFE TIME

PENSION PLAN A regular premium

linked pension plan

Both LIC and HDFC Standard life provide various plans for pension. The LIC plans are more suitable for all age of people whereas the other one are especially for aged people. Moreover HDFC Standard life plans are made such that each income level can opt depending upon their potentials.

50

SWOT ANALYSIS
SWOT Analysis is mainly used to find out the specific areas in the companys operations, which need more care and attention, by comparing them with that of the competitor. Here S means Strengths of the company, W means Weaknesses of the company, and O means Opportunities and T means Threats to the company. Both Strengths and Weaknesses are inherent with the company while Opportunities and Threats are usually outside factors, which affect the existence of the company at large. Let us make the SWOT Analysis for all the players mentioned so far, i.e. Life Insurance Corporation, ICICI Prudential and HDFC Standard Life Insurance together so that one gets a comprehensive idea. STRENGTHS Life Corporation Established agency Insurance ICICI Prudential HDFC Standard Life Insurance

network during the last decades More awareness among the people More penetration in the rural parts of India The incomparable The network of ICICI Banks The network of HDFC

supremacy in the number of Banks agents The created so far trust they have The name and fame created by the ICICI Bank

The

name

and

trust

people have bestowed upon HDFC Bank

The early bird advantage

The professional and

The early bird advantage

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aggressive marketing set-up

among the private players

WEAKNESSES Life Corporation As a public Insurance ICICI Prudential HDFC Life Insurance Standard

company the staff are not that much sincere and active The marketing The to cumbersome become a and network a private As a private Do not have a strong efficient agency

approach is not that much processes professional The sluggishness of

policyholder As

the activities have given, at company the people do not company the people do not times, a bad repute OPPORTUNITIES Life Corporation The high growth The high growth Insurance ICICI Prudential HDFC Life Insurance The high growth Standard have that much belief have that much belief

rate of Indian Economy The people are

rate of Indian Economy The people are

rate of Indian Economy The people are

becoming more aware of becoming more aware of becoming more aware of Insurance and have started Insurance and have started Insurance and have started considering necessity. The penetration of it as a considering necessity. The penetration of it as a considering necessity. The penetration of
52

it

as

Insurance in the rural area is Insurance in the rural area is Insurance in the rural area is minimal. This has to be minimal. This has to be minimal. This has to be explored. The Government explored. The Government explored. The Government

policies are offering more policies are offering more policies are offering more and more rebates on the and more rebates on the and more rebates on the insured amount and such a insured amount and such a insured amount and such a scenario will help more scenario will help more scenario will help more people getting interested in people getting interested in people getting interested in it. As people become it. As people become it. As people become

more internet savvy, the add more internet savvy, the add more internet savvy, the add Spend will come down as Spend will come down as Spend will come down as the prospective clients can the prospective clients can the prospective clients can be approached through the be approached through the be approached through the net. net. net.

THREATS Life Corporation The aggressive style of marketing by the private players is a threat to LIC. As the number of agents are considerably Insurance ICICI Prudential HDFC Life Insurance Standard

huge, efficient management of all the field force need

53

greater strain and effort. More and more More and more More and more

companies are coming into companies are coming into companies are coming into the field and the existing the field and the existing the field and the existing ones have to struggle hard ones have to struggle hard ones have to struggle hard to keep the customers loyal to keep the customers loyal to keep the customers loyal and to get more customers Now as India is on and to get more customers Now as India is on and to get more customers Now as India is on

the brim of emerging out as the brim of emerging out as the brim of emerging out as an economic power centre, an economic power centre, an economic power centre, stringent laws can be stringent laws can be stringent laws can be

expected in the coming expected in the coming expected in the coming future. future. future.

The opening up of the insurance sector has changed the whole look of the industry. While the LIC in order to face the competition is coming with new strategies. New players like ICICI Prudential and HDFC Standard Life are leading the sector due to their strategic management and tailored made projects. From the research also it can be concluded that though the awareness and people opting for LIC plans are more as compare to ICICI Prudential and HDFC Standard Life but the later are gaining momentum in the market day by day.

54

MARKET SHARE OF VARIOUS LIFE INSURANCE COMPANIES

2% 3% 2% 6%

7% 6%

LIC ICICI BAJAJ ALLIANZ HDFC BIRLA SUN LIFE TATA AIG OTHERS

74%

55

INTERPRETATION

It is no doubt that LIC is an established and market leader in life insurance industry in India. But, with him coming up of private Life Insurance companies as a passage of IRDA, its share is getting reduced. Now, the private companies have acquired 25.74% of the market share in just a small span of 5 years. This is so because of the innovative products of the private Life Insurance companies. The basic difference between LIC and private players ICICI prudential and HDFC Standard Life is that mainly focuses more on standardized products whereas LIC caters to the needs of the customers and focuses on customized products.

The interpretation as a result of comparative analysis is as follows:

Whole Life Policies: LIC plans are very simple to understand whereas the private players provide plans according to the changing needs of the customers. Endowment Policies: LIC is quite simple and straight forward whereas ICICI Prudential and HDFC Standard Life are more concerned about saving and are categorized for the different section of people. Money Back Plan: LIC has provided various plans under it having different features. On the other hand, the private players combine all the features in just one single plan. Single premium policies: The private players - ICICI Prudential and HDFC Standard Life gives higher assured returns and various other benefits.

56

Term Insurance Plan: The private players provide more flexible and stable return whereas LIC acts as safer plan taking care of family as a whole. Again, LIC provides different plan under this category of Life Insurance. Children policies: LIC provide different plans for children as compared to private Players, which gives only one plan for kids. Both aims at providing the parents aid for Higher studies of their children. While LIC policies are designed to meet the different Need of family budget ICICI Pruden tial and HDFC Standard Life is more customer Tailored. Annuity Plans: The LIC plans are more suitable for all age of people whereas the other one is especially for aged people. Moreover ICICI Prudential and HDFC Standard life plans are made such that each income level can opt depending upon their potentials. Thus, the private players are making rapid strides with innovative products and aggressive marketing. Unit Linked policies launched by the private p layers are having a rage in the market and occupying a% cent restage despite LICs strong record of setting traditional; policies. In a nutshell, it can be said that LIC should formulate its policies according to the needs and demands of the customers i.e . it should come up with innovative products.

57

CHAPTER 4
LIMITATIONS

58

LIMITATION

Some respondents were reluctant to divulge personal information which can affect the validity of all responses.

A period one of one semester is a very short period to know completely about training and development programmes of a big organization like HDFC SLI CO.

While some data is collected through interviews, it may be possible that the employees may have reacted over enthusiastically.

Money played s vital role.

In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings.

59

CHAPTER 4
CONCLUSION AND RECOMMENDATION

60

CONCLUSION

The comparative analysis between the plans of these companies shows that they differ in their projection and outlook while they aim at same targets and provides similar kind of returns. The LIC business is more about providing social security and financial safety net for the dependants. It ensures the life of the people providing life insurance product and services of high quality and providing resources for economic development. The logo of the company also shows image of corporation that cares. The advantage of LIC over its peers is that the sum assured comes with sovereign guarantee. On the other hand ICICI Prudential has little different approach towards its business. They are more customers centric; provide quality circle, having superior risk management. They go for investment strategy to offer consistent, stable returns to policyholder. The ICICI Pro had an entire range of insurance product. Their aggressive strategy and innovative products have really led them to capture a significant portion of the market share in just a small span of 5 years. Providing good customers and exploring new distribution channels have really paid them off. LIC should also look in providing well servicing to the customers because it is a major area was it is lagging. Thus, coming up with innovative and aggressive marketing will help it to dominate both urban and rural markets. HDFC Standard Life Insurance Co. should come up with customized products rather than standardized products. HDFC Standard Life Insurance Co. with its strong brand equity can dominate both urban and rural markets. HDFC Standard Life Insurance Co. is reacting to the competition of the success of ULIPs launched by private sectors

OBESVERTION PRODUCT PROFILE FOR HDFC

Different companies can choose to position themselves differently and hence the marketing mix would be different. However, the possible strategy that HDFC Standard Life Insurance Co. can follow is as under:

61

Product: The development of flexible products to suit individual requirements is what will differentiate the winners from the also-rans. The key to success for HDFC Standard Life Insurance Co. would be in providing insurance solutions, not standardized insurance products. The concept of riders/optional benefits has already been a huge innovation brought about by the new players, which has led to customization of products for individual needs. However, HDFC Standard Life Insurance Co. may differentiate them on the basis of product segments that they choose to focus on and excel in.

Distribution: Different companies may however choose different channels and different geographies to focus on. The channel options are - tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. HDFC Standard Life is focusing on all channels whereas companies like Max New York Life are focusing on the tied agency force only. Customer interface will be a key challenge for LIC and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any LIC to excel in all of these.

Price: Price is a relevant differentiator only in two segments - pure term insurance and in pure annuities. Here too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. In case of savings oriented products, long term returns generated will be more relevant than just the price of the product. A focus on generating good investment performance and keeping a tight control on costs will help in generating good long-term maturity value for customers.

Advertising and promotion: The level of demand is latent and will have to be activated considerably. The market needs to be developed. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning

62

measure needs to be appreciated by the Indian people. Various communication tools including advertising, direct marketing and road shows will contribute to all this.

Focus on customized products : There were times when LIC had a strong record of selling traditional policies such as endowment and money back policies but now the customers want not only insurance cover but also a great return. This was the reason why Unit Linked Insurance Policy brought in the market by the HDFC Standard Life Insurance Co. Now, HDFC Standard Life Insurance Co. is reacting to the competition of the success of ULIPs launched by private sectors. So, there is a great need that HDFC Standard Life Insurance Co. should formulate its policies according to the needs of the customers.

Servicing of customers : Another area where HDFC Standard Life Insurance Co. should look in is the servicing of customers. It is one of the major areas where HDFC Standard Life Insurance Co. is lagging. So, it has become very important to heavily invest on back-office work. The company can reduce this problem to a great extent by doing centralization of data.

Exploring new distribution channels : Though HDFC Standard Life Insurance Co. had an army of agents but it should explore new distribution channels like banks and corporate agencies. There is a huge potential for selling the policies through bank assurance. In fact there are some policies that can be sold only through a bank channel- the policy to cover the home loans, for instance. So the company should look into these alternate distribution channels.

Strategy for urban and rural market: There is a need for the company to look into the urban market today where distribution and servicing of policies are quite easy. So, HDFC Standard Life Insurance Co. should come up with customized products rather than standardized products.
63

It is no doubt, that HDFC Standard Life Insurance Co. has great presence and huge potential in the rural market. But, the problem that HDFC Standard Life Insurance Co. is facing in rural market is that the premium per policy tends to be lower which results in an increase in the cost of servicing. So, there is great need for HDFC Standard Life Insurance Co. to formulate its strategy in such a way that the customers in the rural markets pay their premium annually rather than going for half yearly or quarterly payments. Its agent should be quite efficient to convince the customers of the rural market to pay their premiums yearly.

So, HDFC Standard Life Insurance Co. with its strong brand equity can dominate both urban and rural markets.

64

Recommendations
Need to create and effectively deploy differentiated strategies. Right prospects identification and thus segmentation too. Design and manage sales force, which yields high performance. Increase service quality as well as quantity by employing some MARKETING professional. MUST FOCUS ON THE STRAREGY: CUT COST; IMPROVE QUALITY, STATISFACTION. BETTER CUSTOMER

65

CHAPTER 6
APPENDICS

66

QUESTIONNAIRE.
Awareness of Financial Planning and Consumers Perception about Insurance Industry Name:________________________ Age:______ Gender: M F Single

Marital Status: Married

Occupation : ___________________ Contact No : __________________ Annual Income (appx. in Rs.) Upto 1.50 lacs 3 lacs-5 lacs 1.50 lacs-3 lacs Above 5 lacs

Q1) Are you aware about what is financial planning? YES NO

Q2) Mention the names of Life insurance companies you have heard of: 1) ________________ 2) ________________ 3) ________________ 4) ________________ 5) ________________ 6) ________________

Q3) How much do you save approximately of your annual income?

Q4) Where do you invest/would like to invest your savings? (Rank in order of preference, 1 being most preferable)

67

Bank Insurance Mutual Funds

Share Market Bonds & Securities Real Estate/Property

Q5) Have you taken any life insurance policy on your own life or on life of your family member? YES (If no, switch to Q 9 ) NO

Q6) Which company(s) policy(s) you have? LIC BIRLA SUNLIFE BAJAJ ALLIANZ HDFC STD. LIFE MAX NEW YORK LIFE RELIANCE MET LIFE ICICI PRUDENTIAL ING VYSYA SBI LIFE TATA AIG AVIVA KOTAK MAHINDRA OTHER __ (specify)

Q7) Which type of plan did you buy? Money Back Plan Endowment Plan Pension Plan ULIP

Q8) What was your purpose/will be your likely purpose of taking insurance? RANK THEM (1 being most ideal) a) PROTECTIO OF FAMILY

68

b) TAX BENEFIT c) INVESTMENT d) RETIREMENT PLANNING

Q9) Have you ever been approached for Life insurance by any of the following (Please ), also Rank according to your preference from whom you are most Likely to buy insurance? ( Here) (Rank) 1) Known/Current Advisor 2) Advisors referred by friends/family 3) Telesales and subsequent visit by unknown 4) Schemes offered by your bank (Bank assurance) 5) Group Insurance Policies offered by your employer Advisor

Q10) Do you feel opening up of the sector has created more insurance awareness among the public? YES NO Q11) How many dependents do you have? <2 2-4 4-6 >6

Q12) Do you really think insurance cover in todays scenario is not essential?

69

BIBLIOGRAPHY

70

BIBLIOGRAPHY
Magazines: Business Today Insurance World Money

Newspapers: Business Standard The Times of India

Book: Insurance- by B. S. Bodla

Internet: www.licindia.com www.google.com www.hdfcinsurance.com

WWW.ICICI.COM

www.irda.in

71