A01 SUMMER TRAINING PROJECT REPORT

ON

MARKETING MIX

SUBMITTED TO :JIWAJI UNIVERSITY GWALIOR

For the partial fulfilment of the award of Master of Business Administration

Submitted to :Prof.SHAILJA BHAKER

Submitted by:ADALE SINGH GURJAR

MBA III Sem

DECLARATION

I ADALE SINGH GURJAR

student of MBA III semester prestige Gwalior

declare that all the information, facts and figures presented in this report are actually based on my experience & my open market research during the project MARKETING MIX with special references to LIC LIFE INSURANCE..I assure that this project is the result of my own sincere efforts and has not been submitted in any other institute for the award of any degree or diploma.

Date: Place:

ADALE SINGH GURJAR

MBA III SEM

ACKNOWLEDGEMENT

It is privilege to express my gratitude & a sincere thanks to prestige Gwalior has given us the opportunity to carry research on the

MARKEING MIX . I am thankful to my Prof. ...............faculty guide for his valuable guidance and support throughout report presentation .

Date: Place:

ADALE SINGH GURJAR

MBA 3rd sem

CERTIFICATE

This is to certify that ADALE SINGH GURJAR student of MBA III rd summer training project report Entitled MARKEING MIX programmed has completed under my guidance.

Date:
Place:

Faculty Guide ..........................................

TABLE OF CONTENTS TOPIC 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 History of the organization & its objectives Organization Structure Financial Performance costing methods and analysis of statement Product and Operations Layout and Quality Control Marketing Strength and Weakness Special Points Page No.

Chapter - 1 introduction of the concept Chapter - 2 object of the study Chapter - 3 results and discussion Chapter - 4 suggestion and implication Chapter - 5 conclusion Reference Annexure

1.1

History of the organization & its objectives

The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the corporate office. LICs Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families. Some of the important milestones in the life insurance business in India are:

History 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

ORGANISATION STRUCTURE OF LIC Chairman

Managing Director

Executives Directors

Chiefs

Zonal Managers

Regional Managers

Divisional Managers

100 Seniors Divisional Managers

Marketing Managers

Sales Managers

Senior Branch Managers (Head of the Branch)

Assistant Branch Managers Sells

Development Officers

Different Agent

1.3 Financial Performance LIC SUBSIDIARIES Unlike provisions for private players in the insurance sector, the LIC Act provides for setting up subsidiaries through policy holders fund. It is due to the LIC act that LIC of India has a number of subsidiaries which help it in leveraging its potential to the maximum, providing an enhanced set of diversified services to its customers. These subsidiaries include LIC International, LIC Nepal, LIC Lanka, LIC Housing Finance and LIC Mutual Fund. LIC INERNATIONAL This is a joint venture offshore company promoted by LIC which commenced operations in July, 1989 with the objectives of offering US$ denominated policies to cater to the insurance needs of NRIs and providing insurance services to holders of LIC policies currently residing in the Gulf. LIC International operates in all GCC countries. LIC NEPAL A joint venture company formed in 2001 with the Vishal Group of Industries, Nepal. LIC LANKA A joint venture company formed in 2003 with the Bartleet Group of Companies, Sri Lanka. LIC HOUSING FINANCE LTD. The Company is recognized by National Housing Bank and listed on the National Stock Exchange (NSE) & Bombay Stock Exchange Limited (BSE). LIC Housing Finance Ltd. is one of the largest Housing Finance Company in India. Incorporated on 19th June 1989 under the Companies Act, 1956, the company was promoted by LIC of India and went public in the year 1994. Its main objective is to provide long term finance for construction or purchase of houses or apartments. It has a Dubai office.

LIC MUTUL FUND LTD. Life Insurance Corporation of India set up LIC Mutual Fund on 19th June 1989 and contributed Rs. 2 Crores towards the corpus of the Fund. LIC Mutual Fund was constituted as a Trust in accordance with the provisions of the Indian Trust Act, 1882. There are some other subsidiaries of LIC which are 1. LIC Mutual Fund Asset Management Company Ltd. 2. LIC HFL Care Homes Ltd. 3. LICHFL Asset Management Company Private Limited. 4. LICHFL Trustee Company Private Limited. 5. LICHFL Financial Services Limited, etc.

Brand Equity Most Trusted Brand 2009 Golden Peacock Innovative Product / Top in Insurance Category Service Award 2009

Loyalty Awards - 2009

Readers Digest Trusted Brand Award 2009 in the Platinum category

CNBC Awaaz Consumer Awards 2008

NDTV Profit Business Leadership Award 2008

INDY's Silver Award for Best Corporate INDY's Silver Award for Best in House Film Magazine

IT USER 2008 NASCOM

Selected Business Super brand India 2008

ASIA

BRAND

CONGRESS

BRAND Pitch Award -" Rank 1 " India's Top 50 service Brands

LEADERSHIP AWARD 2008

Loyalty Awards 2008 - Insurance Sector

SKOCH Challengers Award 2008 for Jeevan Madhur

Readers Digest Trusted Brand Award 2008 Golden Peacock Award for Excellence in in the Platinum category. Corporate Governance

Web 18 Genius of the web awards 2007

1.8 Strength and Weakness

S.W.O.T. ANALYSIS OF LIC A proper S.W.O.T. analysis of LIC has also been conducted to know better about the position, growth, and upcoming future and prospective of the company. STRENGTHS LIC is on 1st rank among the Insurance player. Long-term plans of LIC are the main strength. After sales services. Products cost are very low. MIX does not believe on private company.

WEEKNESS

Low interest rate

OPPORTUNITIES Good brand promotion. 1/2nd- % insurance has been covered.

THREATS Competitors. Entry of Private Insurance banks..

MARKETING MIX

INTRODUCTION Stock exchange operations are peculiar in nature and most of the Investors feel insecure in managing their investment on the stock market because it is difficult for an individual to identify companies which have growth prospects for investment. Further due to volatile nature of the markets, it requires constant reshuffling of MIXs to capitalize on the growth opportunities. Even after identifying the growth oriented companies and their securities, the trading practices are also complicated, making it a difficult task for investors to trade in all the exchange and follow up on post trading formalities.

Investors choose to hold groups of securities rather than single security that offer the greater expected returns. They believe that a combination of securities held together will give a beneficial result if they are grouped in a manner to secure higher return after taking into consideration the risk element. That is why professional investment advice through MARKETING MIX service can help the investors to make an intelligent and informed choice between alternative investments opportunities without the worry of post trading hassles.

MEANING OF MARKETING MIX MARKETING MIX in common parlance refers to the selection of securities and their continuous shifting in the MIX to optimize returns to suit the objectives of an investor. This however requires financial expertise in selecting the right mix of securities in changing market conditions to get the best out of the stock market. In India, as well as in a number of western countries, MARKETING MIX service has assumed the role of a specialized service now a days and a number of professional merchant bankers compete aggressively to provide the best to high net worth clients, who have little time to manage their investments. The idea is catching on with the boom in the capital market and an increasing number of people are inclined to make profits out of their hard-earned savings. MARKETING MIX service is one of the merchant banking activities recognized by Securities and Exchange Board of India (SEBI). The service can be rendered either by merchant bankers or MIX managers or discretionary MIX manager as define in clause (e) and (f) of Rule 2 of Securities and Exchange Board of India( MIX Managers)Rules, 1993 and their functioning are guided by the SEBI. According to the definitions as contained in the above clauses, a MIX manager means any person who is pursuant to contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary MIX manager or otherwise) the management or administration of a MIX of securities or the funds of the client, as the case may be. A merchant banker acting as a MIX Manager shall also be bound by the rules and regulations as applicable to the MIX manager. Realizing the importance of MARKETING MIX services, the SEBI has laid down certain guidelines for the proper and professional conduct of MARKETING MIX services. As per guidelines only recognized merchant bankers registered with SEBI are authorized to offer these services. MARKETING MIX or investment helps investors in effective and efficient management of their investment to achieve this goal. The rapid growth of capital markets in India has opened up new investment avenues for investors.

The stock markets have become attractive investment options for the common man. But the need is to be able to effectively and efficiently manage investments in order to keep maximum returns with minimum risk. Hence this is the study on MARKETING MIX & INVESTMENT DECISION so as to examine the role, process and merits of effective investment management and decision. DEFINITIONS OF MIX 1) InvestorsWords.com

A collection of investments (all) owned by the same individual or organization. These investments often include stocks, which are investments in individual businesses; bonds, which are investments in that are designed to earn interest; and mutual funds, which are essentially pools of money from many investors that are invested by professionals or according to indices. 2) Financial Dictionary and WikiAnswers.com A collection of various company shares, fixed interest securities or money-market instruments. People may talk grandly of 'running a MIX' when they own a couple of shares but the characteristic of a serious investment MIX is diversity. It should show a spread of investments to minimize risk - brokers and investment advisers warn against 'putting all your eggs in one basket'.

3) YourDictionary.com a) All the securities held for investment as by an individual, bank, investment company, etc. b) A list of such securities.

DEFINITIONS OF MARKETING MIX 1) Investorswords.com The process of managing the assets of a mutual fund, including choosing and monitoring appropriate investments and allocating funds accordingly. 2) Investor Glossary Determining the mix of assets to hold in a MIX is referred to as MARKETING MIX. A fundamental aspect of MARKETING MIX is choosing assets which are consistent with the MIX holder's investment objectives and risk tolerance. The ultimate goal of MARKETING MIX is to achieve the optimum return for a given level of risk. Investors must balance risk and performance in making MARKETING MIX decisions. MARKETING MIX strategies may be either active or passive. An investor who prefers passive MARKETING MIX will likely choose to invest in low cost index funds with the goal of mirroring the market's performance. An investor who prefers active MARKETING MIX will choose managed funds which have the potential to outperform the market. Investors are generally charged higher initial fees and annual management fees for active MARKETING MIX. 3) Financial Dictionary Managing a large single MIX or being employed by its owner to do so. MIX managers have the knowledge and skill which encourage people to put their investment decisions in the hands of a professional (for a fee).

DEFINITION OF DISCRETIONARY MARKETING MIX BusinessDictionary.com Investment account arrangement in which an investment manager makes the buy-sell decisions without referring to the account owner (client) for every transaction. The manager, however, must operate within the agreed upon limits to achieve the client's stated investment objectives. DEFINITIONS OF PROJECT MARKETING MIX 1) Internet.com Webopedia PPM, short for project MARKETING MIX, refers to a software package that enables corporate and business users to organize a series of projects into a single MIX that will provide reports based on the various project objectives, costs, resources, risks and other pertinent associations. Project MARKETING MIX software allows the user, usually management or executives within the company, to review the MIX which will assist in making key financial and business decisions for the projects. 2) Bitpipe.com Project MARKETING MIX organizes a series of projects into a single MIX consisting of reports that capture project objectives, costs, timelines, accomplishments, resources, risks and other critical factors. Executives can then regularly review entire MIXs, spread

resources appropriately and adjust projects to produce the highest departmental returns. Also called as Enterprise Project management and PPM

MEANING OF MIX MANAGERS

MIX manager means any person who enters into a contract or arrangement with a client. Pursuant to such arrangement he advises the client or undertakes on behalf of such client management or administration of MIX of securities or invests or manages the clients funds. A discretionary MIX manager means a MIX manager who exercises or may under a contract relating to MARKETING MIX, exercise any degree of discretion in respect of the investment or management of MIX of the MIX securities or the funds of the client, as the case may be. He shall independently or individually manage the funds of each client in accordance with the needs of the client in a manner which does not resemble the mutual fund. A non discretionary MIX manager shall manage the funds in accordance with the directions of the client. A MIX manager by virtue of his knowledge, background and experience is expected to study the various avenues available for profitable investment and advise his client to enable the latter to maximize the return on his investment and at the same time safeguard the funds invested.

DEFINITION & TYPES OF INSTRUMENTS In most of the countries, the market is more popular than the equity market. This is due to the sophisticated bond instruments that have return-reaping assets as their underlying. In the US, for instance, the corporate bonds (like mortgage bonds) became popular in the 1980s. However, in India, equity markets are more popular than the markets due to the dominance of the government securities in the markets. Moreover, the government is borrowing at a pre-announced coupon rate targeting a captive group of investors, such as banks. This, coupled with the automatic monetization of fiscal deficit, prevented the emergence of a deep and vibrant government securities market. The bond markets exhibit a much lower volatility than equities, and all bonds are priced based on the same macroeconomic information. The bond market liquidity is normally much higher than the stock market liquidity in most of the countries. The performance of the market for is directly related to the interest rate movement as it is reflected in the yields of government bonds, corporate debentures, MIBOR-related commercial papers,and nonconvertible debentures.

IMPORTANCE & SIGNIFICANCE OF The market is a market where fixed income securities issued by the Central and state governments, municipal corporations, government bodies, and commercial entities like financial institutions, banks, public sector units, and public limited companies. Therefore, it is also called fixed income market. The key role of the markets in the Indian Economy stems from the following reasons:

Efficient mobilization and allocation of resources in the economy Financing the development activities of the Government Transmitting signals for implementation of the monetary policy Facilitating liquidity management in tune with overall short term and long term objectives.

Since the Government Securities are issued to meet the short term and long term financial needs of the government, they are not only used as instruments for raising , but have emerged as key instruments for internal management, monetary management and short term liquidity management. The returns earned on the government securities are normally taken as the benchmark rates of returns and are referred to as the risk free return in financial theory. The Risk Free rate obtained from the G-sec rates are often used to price the other non-govt. securities in the financial markets. Advantages of instruments:

Reduction in the borrowing cost of the Government and enable mobilization of resources at a reasonable cost. Provide greater funding avenues to public-sector and private sector projects and reduce the pressure on institutional financing. Enhanced mobilization of resources by unlocking illiquid retail investments like gold. Development of heterogeneity of market participants Assist in development of a reliable yield curve and the term structure of interest rates.

Risks associated with securities The market instrument is not entirely risk free. Specifically, two main types of risks are involved, i.e., default risk and the interest rate risk. The following are the risks associated with securities:

Default Risk: This can be defined as the risk that an issuer of a bond may be unable to make timely payment of interest or principal on a security or to otherwise comply with the provisions of a bond indenture and is also referred to as credit risk. Interest Rate Risk: can be defined as the risk emerging from an adverse change in the interest rate prevalent in the market so as to affect the yield on the existing instruments. A good case would be an upswing in the prevailing interest rate scenario leading to a situation where the investors' money is locked at lower rates whereas if he had waited and invested in the changed interest rate scenario, he would have earned more. Reinvestment Rate Risk: can be defined as the probability of a fall in the interest rate resulting in a lack of options to invest the interest received at regular intervals at higher rates at comparable rates in the market.

The following are the risks associated with trading in securities:

Counter Party Risk: is the normal risk associated with any transaction and refers to the failure or inability of the opposite party to the contract to deliver either the promised security or the sale-value at the time of settlement. Price Risk: refers to the possibility of not being able to receive the expected price on any order due to a adverse movement in the prices.

Significance The Indian market is composed of government bonds and corporate bonds. However, the Central government bonds are predominant and they form most liquid component of the bond market. In 2003, the National Stock Exchange (NSE) introduced Interest Rate Derivatives. The trading platforms for government securities are the Negotiated Dealing System and the Wholesale Market (WDM) segment of NSE and BSE. In the negotiated market, the trades are normally decided by the seller and the buyer, and reported to the exchange through the broker, whereas the WDM trading system, known as NEAT (National Exchange for Automated Trading), is a fully automated screen-based trading system, which enables members across the country to trade simultaneously with enormous ease and efficiency. Price determination of instruments The price of a bond in the markets is determined by the forces of demand and supply, as is the case in any market. The price of a bond also depends on the changes in: Economic conditions General money market conditions, including the state of money supply in the economy Interest rates prevalent in the market and the rates of new issues Future Interest Rate Expectations Credit quality of the issuer Instruments are categorized as:

 Government of India dated Securities (G Secs) are 100-rupee face-value units/ paper issued by the Government of India in lieu of their borrowing from the market. They are referred to as SLR securities in the Indian markets as they are eligible securities for the maintenance of the SLR ratio by the banks. Corporate market: The corporate market basically contains PSU bonds and private sector bonds. The Indian primary Corporate market is basically a private placement market with most of the corporate bonds being privately placed among the wholesale investors, which include banks, financial Institutions, mutual funds, large corporates & other large investors. The following instruments are available in the corporate market: Non-Convertible Debentures Partly-Convertible Debentures/Fully-Convertible Debentures (convertible into Equity Shares) Secured Premium Notes Debentures with Warrants Deep Discount Bonds PSU Bonds/Tax-Free Bonds .Interest Rate Derivatives An interest rate futures contract is "an agreement to buy or sell a package of instruments at a specified future date at a price that is fixed today." The price of securities and, therefore, interest rate futures, is inversely proportional to the prevailing interest rate. When the interest rate goes up, the price of securities and interest rate futures goes down, and vice versa. Some of the assets underlying interest rate futures include US Treasuries, Euro-Dollars, LIBOR Swap, and EuroYen futures. Tenure Interest rate futures contracts can have short-term (less than one year) and long-term (more than one year) interest bearing instruments as the underlying asset. In the US, short-term interest rate futures like 90-day T-Bill and 3-month Euro-Dollar time deposits are more popular. Long-term interest rate futures include the 10-year Treasury Note futures contract, and the Treasury Bond futures contract. Hedging with Interest rate futures Interest rate futures can be used to protect against an increase in interest rates as well as a decline in interest rates. By selling interest rate futures, also known as short hedging, an investor can protect himself against an increase in interest rates; and by buying interest rate futures, also known as long hedging, an investor can protect himself against a decline in interest rates. Thus, short, medium, and long-term interest rate risks can be managed with products based on EuroDollars, US Treasuries, and Swaps in Europe and the US. In India, interest rate derivatives would be used for hedging in the near future.

.Money market opportunities for SMEs To begin with a brief rejoinder, the Indian money market is a market for short term securities like T-bills, certificates of deposits, commercial papers, repos and others. These s are issued by the government, banks, companies and financial institutions, respectively. The papers traded are almost like a promissory note which usually has a fixed interest rate and a maturity of less than one year. Since the securities in this market are less than one year, and the source of these securities is the government/banks/highly-rated companies, the credit risk involved is considered to be low (though slightly higher than an FD). Moreover, the tax incidence on the income from these schemes (depending on the plan) is usually lower than the one that the interest on savings accounts or FDs invite. Therefore, from the SME point of view, the leveraging of the market can actually come in two forms. First, as a supplier of , and second, as the buyer. The capacity of the SME to tap the market is correlated directly to the growth trajectory of the corporate segment. However, the real and immediate gain potential for SMEs rests on their ability as the buyer of , especially of short term s. A convenient alternative and yet a potentially enhanced revenue-generative method of parking the surplus is in the liquid, ultra-short term and the bond/gilt schemes of mutual funds. These schemes usually also invest your money in the money market and market securities, depending on the investment mandate of the fund. . market refers to the financial market where investors buy and sell securities, mostly in the form of bonds. These markets are important source of funds, especially in a developing economy like India. India market is one of the largest in Asia. Like all other countries, market in India is also considered a useful substitute to banking channels for finance. The most distinguishing feature of the instruments of Indian market is that the return is fixed. This means, returns are almost riskfree. This fixed return on the bond is often termed as the 'coupon rate' or the 'interest rate'. Therefore, the buyer (of bond) is giving the seller a loan at a fixed interest rate, which equals to the coupon rate.

PRODUCTS BY LIC
INSURANCE PLANS 1. Jeevan Anand Features Product summary: This plan is a combination of Endowment Assurance and Whole Life plans. It provides financial protection against death throughout the lifetime of the life assured with the provision of payment of a lump sum at the end of the selected term in case of his survival. Premium: Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the selected term of the policy or till earlier death. Bonuses: This is a with-profit plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Bonuses will be added during the selected term or till death, if it occurs earlier. Final (Additional) Bonus may also be payable provided the policy has run for certain minimum period Benefits Benefits in case of death during the selected term: The Sum Assured along with the vested bonuses is payable on death in a lump sum. Benefits in case of survival to the end of selected term: The Sum Assured along with the vested bonuses is payable in a lump sum on survival to the end of the term. An additional Sum Assured is payable on death thereafter.

Accident Benefit: An additional Sum Assured (subject to a limit of Rs.5 lakh) is payable in a lump sum on death due to accident up to age 70 of life assured. In case of permanent disability of the life assured due to accident this additional Sum assured is payable in installments.

Supplementary/Extra Benefits: These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value: Buying a life insurance contract is a long-term commitment. However, surrender values are available on the plan on earlier termination of the contract.

Guaranteed Surrender Value: The policy may be surrendered after it has been in force for 3 years or more. The guaranteed surrender value is 30% of the basic premiums paid excluding the first years premium. Any extra premium(s) paid and premium(s) towards Accident Benefit are also excluded. Corporations policy on surrenders: In practice, the Corporation will pay a Special Surrender Value which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premium paid.

1.5 Production and Operations LIC - Jeevan Anurag Benefits LICs Jeevan ANURAG is a with profits plan specifically designed to take care of the educational needs of children. The plan can be taken by a parent on his or her own life. Benefits under the plan are payable at prespecified durations irrespective of whether the Life Assured survives to the end of the policy term or dies during the term of the policy. In addition, this plan also provides for an immediate payment of Basic Sum Assured amount on death of the Life Assured during the term of the policy. AssuredBenefit Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy years before maturity. At maturity, 40% of the Basic Sum Assured along with reversionary bonuses declared from time to time on full Sum Assured for the full term and the Terminal bonus, if any shall be payable. For example, if term of the policy is 20 years, 20% of the Sum assured will be payable at the end of the 17th, 18th, 19th year and 40% of the Sum Assured along with the reversionary bonuses and the terminal bonus, if any, at the end of the 20th year. Death Benefit Payment of an amount equal to Sum Assured under the basic plan immediately on the death of the life assured. LIC - Jeewan Kisore Product summary: This is an Endowment Assurance Plan available for children of less than 12 years of age. The policy may be purchased by any of the parent/grand parent. Commencement of risk cover: The risk commences either after 2 years from the date of commencement of policy or from the policy anniversary immediately following the completion of 7 years of age of child, whichever

is later. Premiums: Premiums are payable yearly, half-yearly, quarterly or monthly throughout the term of the policy or till earlier death of child. Bonuses: This is a with-profits plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable provided policy has run for certain minimum period. LIC Childs Career Plan Introduction: This plan is specially designed to meet the increasing educational and other needs of growing children. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i.e. 7 years after the expiry of policy term). A number of Survival benefits are payable on surviving by the life assured to the end of the specified durations. Options: You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of Premium payment and Premium Waiver Benefit. Payment of Premiums:

You may pay the premiums regularly at yearly, half-yearly, quarterly or through Salary deductions over the term of policy. Premiums may be paid either for 6 years or up to 5 years before the policy term. LIC - Jeevan Chhaya Product summary: This is an Endowment Assurance plan that provides financial protection against death throughout the term of the plan. Besides payment of Sum Assured immediately on death, one-

fourth of Sum Assured is payable at the end of each of last four years of policy term whether the life assured dies or survives the term of the policy. Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the term of the policy or till the earlier death. LIC - Child Future Plan Introduction: This plan is specially designed to meet the increasing educational, marriage and other needs of growing children. It provides the risk cover on the life of child not only during the policy term but also during the extended term (i.e. 7 years after the expiry of policy term). A number of Survival benefits are payable on surviving by the life assured to the end of the specified durations. Options: You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of Premium payment and Premium Waiver Benefit. Payment of Premiums:

You may pay the premiums regularly at yearly, half-yearly, quarterly or through Salary deductions over the term of policy. Premiums may be paid either for 6 years or up to 5 years before the policy term. LIC - Jeevan Shree Product summary: This is an Endowment Assurance plan offering the choice of many convenient premium-paying terms. It provides financial protection against death throughout the term of plan with the payment of maturity amount on survival to the end of the policy term. Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions, as opted by you, throughout the premium paying term or till earlier death. Alternatively premium may be paid in one lump sum.

Guaranteed

Additions:

The policy provides for the Guaranteed Additions at the rate of Rs. 50/- per thousand Sum Assured for each completed year for first five years of the policy.

LIC - The Whole Life Policy This plan is mainly devised to create an estate for the heirs of the policyholder as the plan basically provides for payment of sum assured plus bonuses on the death of the policyholder. However, considering the increased longevity of the Indian population, the Corporation has amended the above provision, thereby providing for payment of sum assured plus bonuses in the form of maturity claim on completion of age 80 years or on expiry of term of 40 years from date of commencement of the policy whichever is later. The premiums under the policy are payable up to age 80 years of the policyholder or for a term of 35 years whichever is later. If the payment of premium ceases after 3 years, a paid-up policy for such reduced sum assured will be automatically secured provided the reduced sum assured exclusive of any attached bonus is not less than Rs.250/-. Such reduced paid-up policy is not entitled to participate in the bonus declared thereafter but the bonuses already declared on the policy will remain attach, provided the policy is converted in to a paid-up policy after the premiums are paid for 5 years. LIC Amulya Jeevan : On Death during the Term of the Policy: Sum Assured On Maturity: Minimum age at entry Maximum age at entry Maximum age at maturity Minimum Policy Term Maximum Policy term Minimum Sum Assured Maximum Sum Assured Nil RESTRICTIVE CONDITIONS : 18 years (completed) : 60 years (nearest birthday) : 70 years (nearest birthday) : 5 years : 35 years : Rs.25,00,000/: No Upper Limit of Rs.100,000/for Sums Assured

(Policies will be issued in multiples more than the minimum Sum Assured) 1.6 Layout and Quality Control

1.7 Marketing The Public Relation Department in LIC is divided into three major categories. Namely:

1. Communication Department 2. Crisis Management Department 3. Publicity Department

Chief Public Relation Officer

PRO (Communication Dept.)

PRO (Crisis Management Dept.)

PRO (Publicity Dept.)

CHAIRMAN OF LIC

PUBLIC RELATIONS

COMMUNICATION DEPARMENT

PUBLICITY DEPARMENT

CRISIS MANAGEMENT DEPATMENT

CHIEF PUBLIC RELATION OFFICER The Chief Public Relation Officer of LIC is Mr. M. V. Kulkarni. He heads the

PR department. The above three committees are under the PRO. The PRO is responsible for the overall functioning of the PR department. He has to monitor the smooth functioning of the three departments.

RESPONSIBILITIES OF CHIEF PUBLIC RELATION OFFICER :1. PR represents whole organization. 2. Should know how to behave in a certain situation. 3. He is not a person, he is representative. 4. Should know how to create enthusiasm. 5. In crisis he has to give feedback as soon as possible. OBJECTIVES AND FUNCTIONS OF CHIEF PUBLIC RELATION OFFICER:. T.S. Vijayan. all the activities of the three departments all over India. -seas PR departments of LIC.

over-seas branches of LIC. ors the norms and values of all the branches.

over-seas branches.

employees to motivate them to lift the spirit of the work culture.

communication department and ask them to public or air it through various mediums.

has to look after social responsibility as well as maintaining the image of the company.

COMMUNICATION DEPARTMENT The PRO of this Department is an external PR.

He looks after:-

with the media. is also responsible for monitoring the overseas communications.

guests and their overall honors. The conversations with the guests are directly done by the Communication Department PRO. The PRO from this department should always keep a close eye on the latest happenings in the market. Any social issue at any area is a news to be worked out for him.

includes the CEO of the company, the Chief PRO and the Communication Dept. PRO.

present for the Press conference. on Dept. PRO has to also be in a close contact with the government officials.

progress in the strategies for communication. In short, the communication Department PRO ensures that there is no communication gap between the company and the external concerned bodies. (recent press releases of LIC issued by Communication Department PRO enclosed).

CRISIS MANAGEMENT DEPARTMENT

The PRO in this department is an internal one. From the overall history of LIC, it is seen that the company has never been into any major crisis. This itselfis one of the best achievements.He is answerable to the Chief Public Relation Officer.The PRO from crisis management, though is here to handle crisis, he has beenassigned many other internal responsibilities.

the employees.

solved before they create crisis.The strategy used by the PR here for crisis management is:-Wash the utensil before having food in it.Thus all the employees right from the day of joining are kept in closecontact with the Crisis Management Dept. And regular workshops help to restrict cases like Corruption. With a company so closely associated with thegovernment, restricting such practices is very difficult task.

PUBLICITY DEPARTMENT
The PRO of the publicity Department is an External PR.This department was formed due to the fall of sales in the 1999. This fall was dueto the emergence of the foreign insurance companies and their advertisingstrategies. Initially, the ads shown by LIC always said no worry even after death. All the ads portrayed death. The other insurance companies came upwith the idea that insurance is for happy life. Thus the sales of LIC went down aspeople liked the idea of Life more than Death.Hence a separate publicity department was formed which worked only forpublicity strategies. Initially it was looked up by the Communication Department.Today the publicity department PRO has to see to it that all the ads running arecreating effect. The PRO is the one who along with the Marketing departmentlooks after the strategies for publicity. He is also to carry out various campaigns.The very recent campaign is known as Zindagi Express. The Zindagi Express is a term that has been associated to the life of LIC.Just as humans celebrate their 50 years of life, even LIC is celebrating its life.and when any person has done a lot in his life, he is capable of writing anAutobiography. Thus Zindagi Express is an Autobiography by LIC.They had started this unique campaign of auto biography from Delhi andwill cover the entire nation and end up in Delhi again. During this journey theyexplain what all LIC has done for publics and what all it still intends to do

1.9 Special Points

FORMS FOR JANASHREE BIMA YOJANA 1. Claim form & discharge receipt under JBY (Annexure A) 2. Application for scholarship under Shiksha Sahayog Yojana (Proforma A) 3. List of students eligible for scholarship under Shiksha Sahayog Yojana (Proforma B) 4. Certificate of utilization ( Proforma C ) Benefits In the events of *Death (other than by accident) of the member, an amount of Rs.30,000/- is payable. *death/total permanent disability, due to accident, an amount of Rs.75,000/-is payable. *Permanent partial disability, due to accident, an amount of Rs.37,500/- is payable. PREMIUM: *The premium under the scheme is Rs.200/-per annum per member. *50% of the premium i.e. Rs.100/- will be contributed by the member and/or Nodal Agency/State Government. *Balance 50% will be borne by the Social Security Fund.

Service Quality
Your Policy Bond And Its Safety Your Policy Number Policy Conditions Alterations In Policy If Your Policy Is Lost Your Contact Address Keep Us Posted Without Fail Admission Of Age Nomination Assignment When To Pay The Premiums Grace Period For Premium Payment How And Where To Pay The Premiums Policy Status Where Available Revival Of Lapsed Policies Availing Loans On Policies Surrender Value Maturity, Survival Benefits, Disability And Death Claims Policies Under Salary Savings Scheme Helpline

CHAPTER 1 INTRODUCTION OF THE CONCEPT

CHAPTER - 2 OBJECT OF THE STUDY

OBJECT OF THE STUDY

The objectives behind the study of the plans and policies of LIFE INSURANCE CORPORATION OF INDIA are: 1. To impart knowledge about the history and objectives of the company and also its different subsidiaries. 2. To aware the readers about the different plans and policies provided by LIC, there value and benefits to its customers.

CHAPTER 3 RESULTS AND DISCUSSION

DATA ANALYSIS AND INTERPRETATION MIX PRECEPTION TOWARDS SERVICES LIC 50% HDFC 30% ICICI 20% OTHRS 10%

LIC HDFC ICICI OTHERS

( LIC IS HAVE MORE MIX RATHER THAN OTHERS)

MIX RELATIONSHIP DEPARTMENTS LIC 40% HDFC 30% ICICI 20% OTHRS 10%

LIC HDFC ICICI OTHER

(IN LIC CRM DEAPARMENTS MOST TO SATISFIED THE MIX)

PUBLIC RELATIONS LIC 40% HDFC 30% ICICI 20% OTHRS 10%

LIC HDFC ICICI OTHER

IN LIC MOSTLY CENCENTRATE ON PUBLIC RELATIONS

LIC POLICIES AND BETTER PLANS LIC 50% HDFC 30% ICICI 20% OTHRS 10%

LIC HDFC ICICI OTHERS

LIC IS ONE OF FIRST INSURANCE COMPANY WHICH PROVIDE MORE SERVICES Project Analysis The Positive side of LIC as well as Negative side of LIC. I encourage other readers to correct me if I am wrong and also add light to any point that I may have missed. First lets talk about the Positive side of LIC 1. LIC is owned by the government and therefore it is the only company besides the PPF that has the sovereign guarantee of the govt. of India. It is a different story that today LIC has become so powerful that the govt. leans on LIC every time that the Stock Market crashes. Imagine having an Asset base of over Rs 6 Lac Crore. . Thats a 14 digit number! No company in India can boast of such figures. Mind boggling. 2. LIC is the only Life Insurance Company making profits. Most of the Private Insurers including the self proclaimed market leaders like ICICI and Bajaj Allianz are booking heavy

losses. Check IRDA website in the Annual Report column. The point is that if an insurance company makes losses year over year, then how will they manage to pay the Claim amount? Afterall no Insurance company is here to do charity business. 3. When it comes to paying claims, again LIC is Number One with the claims settlement ratio of more than 99%. Private Insurers cannot match LICs ability on claims settlement. Again, please visit IrDAs website to see the claims settlement performance of various companies. 4. LIC has the worlds largest sales force, yes over 10 lac agents and now universities in western countries are trying to study how a company managed to appoint such a large sales force. A sales force of over 1 million! Truly a remarkable achievement. 5. Many people argue that LIC has not been able to penetrate the market as it has insured only 15% of the population. My point is, in a poor country like India where there are so many people living below the poverty line, so many people who die of starvation, so many people who don t have access to basic medication, so many people who dont have basic necessities of life like food, shelter, education and clothing. Will such a person first feed his children or buy Insurance ?

CHAPTER - 4 SUGGESTION AND IMPLICATION

SUGGESTION AND IMPLICATION

The employees are sometimes rude in their behaviour with the Policyholder. If a claim cheques is handed over by a courteous and smiling employee of LIC, it will enhance the image of LIC in the mind of the policyholder. Today LIC is not just an Insurance Company, LIC is a Movement, LIC is a Cult, LIC is a Religion. Imagine 10 lac agents and 1 lac employees serving 16 crore policyholders in India. You cannot deny that LIC has become the way of life in India. Daily you can hear someone or the other talking of LIC in local trains, at fish markets, at restaurants, on News Channels, in your own offices, etc. As i earlier said, LIC has started lacking in effective leadership. If a company like LIC starts sponsoring irrelevant awards like Zee Cine awards which it had done 2 years ago, then it will send the wrong message in the minds of the policyholders. Imagine Indias most famous institution sponsoring a Cine Awards function stating that it was done to increase the brand awareness of LIC. That sounded like a big joke. It is time that the top level officials of LIC come out of their air-conditioned cabins and travel by public transport for sometime in order to feel the pulse of the common man.

Conclusion
After Findings we can see about LIC features and his The tendency to take the expedient approach and focus on the far right of the LIC spectrum, Peacetime Contingency Operations and conduct training as usual, while briefing that the LIC block has been checked, will lead us to a possibly fatal false sense of security. Instinctive behavior and ingrained training must be adjusted to fit new circumstances. STXs must be developed locally or borrowed from units who have already been through the training. The probability of becoming involved in a LIC operation is high. The potential to attract international attention, even with limited forces, is also great. Units have demonstrated that with a balanced training focus and proper preparation, many pitfalls outlined above can be avoided. LIC is not conventional warfare. This is critical for the counterinsurgent to understand. The insurgents violent and coercive strategy is applied so as to achieve political, civil, military and psychological results. Hence, the counterinsurgent must counter all of these strategic elements individually. In addition, the target of the insurgents violence and coercion is the population. This is because the population is the centre of gravity in LIC. Therefore the counterinsurgent must also focus on the population to be successful. In terms of military principles in counterinsurgency, doctrinal precision, professionalism, independence, initiative, force precision, restraint, combined arms, precision engagement, joint force, effective population based intelligence, integrated communications, a civil affairs approach and high levels of training are critical. So all policies and plan toally satisfied the MIX.

B IB L I O GR A PH Y
Important websites www.google.com(recummented)

Magazine Lic Magazine

News Paper