A

PROJECT REPORT
ON
INVESTORS DECISION MAKING PATTERN FOR LIFE INSURANCE PRODUCT
SUBMITTED IN
PARTIAL FULFILMENT FOR
THE DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION
(BBA)
SUBMITTED BY
PATEL DIPTI R. 29

PROJECT GUIDE
AMINA I. NAKHUDA

(Asst. Prof.)

UDHNA CITIZEN COMMERCE COLLEGE

&
S.P.B. COLLEGE OF BUSINESS ADMINISTRATION
&
UDHNA ACADEMY COLLEGE OF COMPUTER APPLICATION & INFORMATION
TECHNOLOGY
SURAT
2013-14

DECLARATION

I, the undersigned, Miss Patel Dipti R. here by, declare that this dissertation titled Investors
Decision Making Pattern for Life Insurance Product is bonafide work carried out under the
guidance of Asst. Prof. Mrs. Amina I. Nakhuda, S.P.B. College of Business Administration,
Udhna, Surat.

The empirical findings in this report are based on the data collected and have not been taken
from any other reports.

This dissertation does not form any basis for other degree or diploma.

__________________________
(Signature of the researcher)
Miss Patel Dipti R.

Date:

BBA Roll No. 29

Place: Surat

ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of any
task would be incomplete without the mention of the Leaders, whose constant
guidance and encouragement crown all the efforts with success.
I am highly obliged to the Veer Narmad South Gujarat University for arranging
the programme of practical training in Bachelor of Business Administration

in

such a manner.
It is my privilege to express my deep sense of gratitude to Asst. Prof. Mrs. Amina
L. Nakhuda for her efforts, guidance, valuable comments and suggestions for
making this project report. She helped me to complete my report on the
practical study and gave contribution to improve and expand my practical
knowledge.
Finally, I express my intense gratitude to my parents whose blessings has
helped me translate my efforts into fruitful achievement.

UDHNA CITIZEN COMMERCE COLLEGE &

S.P.B. COLLEGE OF BUSINESS ADMINISTRATION &
UDHNA ACADEMY COLLEGE OF COMPUTER APPLICATION AND
I.T.
(Self Financed College Affiliated To VNSGU, Surat)
(Managed By Udhna Academy Education Trust, Udhna)

214, Ranchhodnagar, Opp. Swaminarayan Temple, Udhna Main Road, Udhna,

Surat 394 210

(B.COM. / B.B.A. / B.C.A. / M.Sc.(C.A.))

Phone

E-Mail ID :
Website
:

(0261) (B.Com.: 2277739)

2277739)

(B.B.A.: 2270825)

(B.C.A. / M.Sc.(C.A.)): 2273542)

(Fax:

(B.Com.: uccbcc_uaet@rediffmail.com) (B.B.A.: spbcba@gmail.com)(B.C.A.: uaccait@gmail.com)(M.Sc.

(C.A.): mscca_udhna@yahoo.com)

www.udhnacollege.org

B.Com.: NAAC Accredited

B Grade (CGPA 2.67) - 2009

Ref No. :
/2013-14
Date : 19-02-2014

CERTIFICATE
This is to certify that Mr. Miss.patel Dipti has prepared the Project Report
entitled investor decision making pattern for life insurance product under
my guidance & supervision.
This project embodies the result of her work & is of the
standard expected of a candidate for the successful completion of
Bachelor of Business Administration Degree.

Date:
Place: Surat

________________
(Faculty Guide)

_______________
(Vice Principal)
Principal)

Mrs. Amina I. Nakhuda

Dr. Daisy Sheby Thekkanal
Desai
(Asst. Prof.)

_______________
(Incharge
Dr. Mehul P.

INDEX
SR NO.

TOPIC

PAGE NO.

DECLARATION

II

ACKNOWLEDGEMENT

II

III

CERTIFICATE-II (From College)

III

IV

INDEX

IV

List of Tables (Titles to be given)

List of Graphs (Titles to be given)
1

Introduction
1.1. Introduction of Project
1.2. Objective of the Project
1.3. Research Methodology
1.4. Scope of the Study
1.5. Importance of the Study
1.6. Hypothesis of the Study
1.7. Organisation of the Study
1.8. Limitation of the Study

Conceptual Framework
2.1. Industry Profile
2.2. Company Profile

2.3. Core Concepts

3

Data Presentation & Analysis

3.1. Introduction
3.2. Presentation of Secondary Data
3.3. Presentation of Primary Data

Findings & Conclusions

Suggestions & Recommendations

Bibliography
Annexure

List of table

Table
no.
3.1.1

Detail
Which source respondent like for earning

Page
no.
35

3.1.2

Respondents are satisfy with the earning

36

3.1.3

Opinion towards Investing in life insurance

37

3.1.4

Respondents like to invest in some other part time work

38

3.1.5

In which industry respondent like to involve yourself

39

3.1.6

Which factors responsible for investment in life Insurance

product

40

3.1.7

Which companies Life Insurance respondent chose

41

3.1.8

How many year respondent ready to pay premium for

his/her Insurance scheme

42

3.1.9

How did respondent come to know about his/her present

Life Insurance

43

3.1.10

Which type of Insurance policy respondent most prefer

44

3.1.11

Respondent motive when they Invest in Insurance

45

3.1.12

Selected Insurance policy fulfills respondent motive

46

3.1.13

Haw many percentage respondent spend for investment

47

3.1.14

Which premium policy respondent prefer most

48

3.1.15

Respondent main objective behind the investing

49

3.1.16

Respondent preferred mode or time period for paying

premium amount

50

3.1.17

The objective behind invest in insurance is Tax saving

53

3.1.18

The objective behind invest in insurance is Future security

54

3.1.19

The objective behind invest in insurance is Pension

55

1.1.20

The objective behind invest in insurance is Speculation

56

List of graph

Table

Detail

Page

no.

no.

3.1.1

Which source respondent like for earning

35

3.1.2

Respondents are satisfy with the earning

36

3.1.3

Opinion towards Investing in life insurance

37

3.1.4

Respondents like to invest in some other part time work

38

3.1.5

In which industry respondent like to involve yourself

39

3.1.6

Which factors responsible for investment in life

Insurance product

40

3.1.7

Which companies Life Insurance respondent chose

41

3.1.8

How many year respondent ready to pay premium for

his/her Insurance scheme

42

3.1.9

How did respondent come to know about his/her present

Life Insurance

43

3.1.10

Which type of Insurance policy respondent most prefer

44

3.1.11

Respondent motive when they Invest in Insurance

45

3.1.12

Selected Insurance policy fulfills respondent motive

46

3.1.13

Haw many percentage respondent spend for investment

47

3.1.14

Which premium policy respondent prefer most

48

3.1.15

Respondent main objective behind the investing

49

3.1.16

Respondent preferred mode or time period for paying

premium amount

50

3.1.17

The objective behind invest in insurance is Tax saving

53

3.1.18

54

3.1.19

The objective behind invest in insurance is Future

security
The objective behind invest in insurance is Pension

3.1.20

The objective behind invest in insurance is Speculation

56

55

Ch 1: Introduction

1.1) INTRODUCTION OF PROJECT

Life is full of risks. Being a social animal and risk reverse, man always tries to reduce risk.
An age- old method of sharing of risk through economic cooperation led to the
development of the concept of insurance.
Insurance may be described as a social device to reduce or eliminate risk of loss to life and
property. Insurance is collective bearing of risk. The risks, which can be insured against,
include fire, perils of sea, death, accidents and burglary.
Insurance can be defined as a legal contract between two parties where one party
called insurer undertakes to pay a fixed amount of money on the happening of a
particular event which may be certain or uncertain. The other party called insured pays

in exchange a fixed sum known as premium. The insurer and the insured are also known as
Assuror and Assured
In India insurance is a flourishing industry, with several national and international players
competing to excel. With several reforms and policy regulations, the Indian insurance
sector has witnessed tremendous growth in the recent past. Insurance can be defined as a
legal contract between two parties whereby one party called insurer undertakes to pay a
fixed amount of money on the happening of a particular event, which may be certain or
uncertain. The other party called insured pays in exchange a fixed sum known as
premium. Insurance is desired to safeguard oneself and ones family against possible losses
on account of risks and perils. It provides financial compensation for the losses suffered
due to the happening of any unforeseen events.
Life insurance provides financial security to the family of a policyholder in the event of
his/her death. This is the most popular insurance policy, as most people want to ensure that
their family members remain financially secure in the event of their death. Till date, only
20% of the total insurable population of India is covered under various life insurance
schemes, the penetration rates of health and other non-life insurances in India is also well
below the international level. These facts indicate the of immense growth potential of the
insurance sector. At present there are 24 life insurance companies at present offering
different products to suit to the needs of the customers. Life Insurance contracts not only
allows an individual to have a risk cover against any unfortunate event of the future but
also provides for educational needs, retirement needs, loans, tax planning, investment
option and savings. The customers prefer to invest their money in a number of alternatives
such as post office savings, fixed deposits, mutual funds, share market, insurance, bonds
etc. Also, the returns they expect and their frequency of investment varies. The individuals
may be equal in all aspects, may even be living next door, but their financial planning
needs are very different. The investment preference is influenced by various demographic
factors such as family size, age, gender, occupation, educational qualification, income size
etc.

Insurance industry contributes to the financial sector of an economy and also provides an
important social security net in developing countries. The growth of the insurance sector in
India has been phenomenal. The insurance industry has undergone a massive change over
the last few years and the metamorphosis has been noteworthy.
There are numerous private and government insurance companies in India that have
become synonymous with the term insurance over the years. Offering a diversified product
portfolio and excellent services the many insurance companies in India have managed to
make their way into almost every Indian household.
Given the dynamism in new offerings it becomes very important to analyze the association
between demographics of individual investors and their investment behavior and also
analyzing the acceptance of insurance by them
My project was about approaching people in order to make them aware of the benefits of
being a certified financial consultant with life insurance.

I used both primary and secondary data to make a database of people I had to target in the
project I did a survey purely targeting people for being financial consultants. I used a semistructured kind of questionnaire that contained both close-ended and multiple-choice
question in order to have an insight into the needs, family structure, social contact base and
drives of the people I met. The response was a combination of affirmative as well as
negative due to various reasons.

1.2) OBJECTIVE OF STUDAY

1. To know about various life insurance product and policy.
2. Proper understanding and analysis of life insurance industry.
3. To know the people preference and perception towards insurance.
4. To Know the potentially of insurance market in finance market.
5. To gain a through knowledge of insurance sector.
6. To know the factors influencing invertors witch purchasing and decision regarding life
insurance product.
7. To know why people choose the life insurance.
8. To understand the future scenario of insurance and investment sector.

1.3) RESEARCH METHODOLOGY

(1) Need for Research :
The study is necessary to know the decision regarding selection of the insurance product.
So it is useful to the investor insurance is the one type benefited for the investors because
of investors get protection against particular risk or uncertainties.
(2) Research problem statement :
A study on In Investors Decision Making Pattern for Life Insurance Product.
(3) Research design :

3.1) Type of research :

There are 3 types of research design are as follows:
1

Exploratory research design

Descriptive research design

Causal research design

The type of research undertaken is descriptive research design because the research is
interested in knowing characteristics of certain groups, object or event in used to the
primary dad in the life research product.

3.2) Source of data :

The data is collected through primary source using questionnaire.

3.3) Sample size :

This study covers 100 respondents to study decision making Pattern For Life Insurance
Product from udhna area, surat city.

3.4) Sampling method :

There are two types
1. Probability Sampling method
2. Non probability Sampling method
Here non probability Sampling method has been used non probability convenience
Sampling.

3.5) Tools used for data collection :

Questionnaire is used for primary data collection conducting close ended question with
single choice question and multiple choice questions.

(4) Tools used for data analysis

The data analysis tools are as follows:
- Charts(pie)
- Tables

1.4) SCOPE OF THE STUDAY

1. The research work was conducted in diriment areas, conveniently selecting 100 customers.
The study was done with the aim of understanding customers perception towards fife
insurance.

2. The result of the study will help the researcher to identify the satisfaction level of the
customers on various benefits provided by the life insurance.

3. The result of the study will help the researcher to indentify the areas where the life
insurance company should focus in order to increases their customer base.

4. The result of the study will help the researcher to bring out with a new plan which the
existing customers prefer.

1.5) Important of study :

1. Researchers come to know from this study about knowledge of insurance
sector.
2. Researcher comes to know people thinking towards insurance.
3. Researcher come to know how much people contribute in insurance
sector after
change brought by IRDA.
4. The study will uncover and bring the important role being played by insurance economic
growth and development.
5. Its help to increase the knowledge about insurance sector.

1.6) HYPOTHESIS OF THE STUDY:

1) H1: people are satisfy with security of life insurance.
H0: people are not satisfy with security of life insurance.
2) H1: People are fulfill his/her need to selected insurance policy.
H0: People are not fulfill his/her need to selected insurance policy.
3) H1: people are gain through knowledge of insurance sector.
H0: people are not gain through knowledge of insurance sector.
4) H1: factor more responsible for investment in life insurance product.s
H0: factor not more responsible for investment in life insurance product.

1.7) Organization of the study:

This Project is a part of my BBA course. I have done the research on Investor decision
making pattern for life insurance product . The main focus of this research is to explore
the scope for a Insurance Sector in the chosen location, the method and practices they
adopt, and to analyze the insurance position in present scenario.

In my project 5 chapters should be included1 st is introduction in witch we study all

information like introduction of the project, research methodology, objective, scope,
important, hypothesis, and limitation of the study.

2nd

3rd chapter is data presentation and analysis. In witch we study the date use graph and
charts.

4th findings and conclusions.

5th suggestions and recommendation.

And last bibliography and annexure.

I will collect all information for completion of the project.

For the successful completion of this project I conducted survey in one area. Area is udhna.
I went there with my set of questionnaire and requested persons fill up my questionnaire
form.

After conducting survey I analyzed data and found some fact which I have mentioned in
my project report.

In this project report I used various chart. On the basis of founded chart I have given some
inference also. These inferences have helped me a lot to come to conclusion.

chapter is conceptual framework in witch we study industry profile and core concept.

1.5) Limitation of the study:

1. The survey was limited it may be possible that some important data is left out.
2. The results are not applicable to the whole population.
3. Due to lack of experience and knowledge of insurance industry it cant be said that project
has been made totally correct and aureate.
4. Questionnaire Because of the fast life of the respondents, most of them do not give the
time that needed, so that affects the result as well as analysis.

Ch 2: Conceptual Framework

2.1) INDUSTARY PROFILE

History of insurance industry:
In some sense we can say that insurance appeared simultaneously with appearance of
society. In earlier economies, we can see insurance in the form of people helping each
other. For example, if a house is burnt, the members of the community help build a new
one. Should the same thing happen to ones neighbors must come to help? Otherwise,
neighbors will not receive help in the future.
In the modern sense, started as a methods of transferring or distributing risk Were by
Babylonian traders as long ago as the 3 rd and 2nd millennia BC, respectively. Chinese
merchants traveling treacherous river rapids would redistribute their cargo across many
vessels to limit the loss due to any single vessels capsizing. The Babylonians developed
a system which was recorded in the famous code of Hammurabi, c.1750 BC, and
practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund
his shipment, he would pay the lender an additional sum in exchange for the lenders
guarantee to cancel the loan should the shipment be stolen.

Greek monarchs were the first to insure their people and made it official by registering
the `insuring process in governmental notary offices. They invented the concept of the
general average .Merchants whose goods were being shipped together would pay a
proportionally divided premium which would be used to reimburse any merchant whose
goods were jettisoned during storm or sinking of the vessel in the sea.
The Greeks and Romans introduced the origins of health and life insurance c.600 AD
when they organized guilds called benevolent societies which cared for the families
and paid expenses of members upon death. Guilds in the middle ages served a similar
purpose. Before insurance was established in the late 17th century, friendly societies
existed in England, in which people donated amounts of money to a general sum that
could be used for emergencies.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other
kinds of contracts) were invested in Greeks rulers in the 14th centaury, as were insurance
pools backed by pledges of landed estates. These new insurance contact allowed
insurance to be separated from invested from investment, a separation of roles that first
proved useful in insurance, became for most sophisticated in post-Renaissance Europe,
and specialized varieties developed. Insurance as we know it today can be traced to the
Great Fire of London, witch in 1666 A.D devoured 13,200 houses. In the aftermath of
this disaster, Nicholas Barboa opened an office to insure buildings. In 1680, he
established Englands first fire insurance company. The Fire Office, to insure brick and
frame homes.
The first insurance company in the United States underwrote fire insurance and was
formed in Charles Town (modern-day Carolina, in 1732.)

o LITERATURE REVIEW

Life Insurance has come a long way from the 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. As life insurance became more established, it was
realized what a useful tool it was for a number of situations, including.

Temporary Needs / Threats

The original purpose of life insurance remains an important element, namely
providing for replacement of income on death etc.

Regular Savings
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.

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.

Retirement
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.

Protection:
Savings through life insurance guarantee full protection against risk of death of the
saver. Also, in case of demise, life insurance assures payment of the entire amount
assured (with bonuses wherever applicable) whereas in other savings schemes, only
the amount saved (with interest) is payable.

Aid to Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can be
made effortlessly because of the 'easy installments' facility built into the scheme.
(Premium payment for insurance is monthly, quarterly, half yearly or yearly). For
example: The Salary Saving Scheme popularly known as SSS provides a convenient
method of paying premium each month by deduction from one's salary. In this case
the employer directly pays the deducted premium to LIC. The Salary Saving Scheme
is ideal for any institution or establishment subject to specified terms and conditions.

Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that
has acquired loan value. Besides, a life insurance policy is also generally accepted as
security, even for a commercial loan.

Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax.
This is available for amounts paid by way of premium for life insurance subject to
income tax rates in force. Assesses can also avail of provisions in the law for tax
relief. In such cases the assured in effect pays a lower premium for insurance than
otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can be
effectively used to meet certain monetary needs that may arise from time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs for
cash over a stretch of time can be less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of ones. Retirement
from service and used for any specific purpose, such as, purchase of a house or for
other investments. Also, loans are granted to policyholders for house building or for
purchase of flats (subject to certain conditions).As of today, there are twenty one
private life insurance companies operating in India.

Evaluation of life insurance in India Important MILESTIONES

In India, insurance has a deep-rooted history; it finds mention in the writings of Manu
(Manusmrithi), Yagnavalkya (Dharmasastra) and kauitlya (Arthasastra). The writings
talk in terms in pooling of resources that could be re-distributed in times of calamities
such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day
insurance. Ancient Indian history has preserved the earliest traces of insurance in the
form of marine trade loans and carries contracts.

Year

Event

1818

The advent of life insurance business in India establishment of the Oriented Life
Insurance Company in Calcutta.

1834

Oriental Life Insurance Failure

1850

The advent of General Insurance in India with the establishment of Triton insurance
Company Ltd in Calcutta

1870

The enactment of the British Insurance Ltd was set up

1907

The Indian Mercantile Insurance Ltd was set up

1912

The Indian Life Assurance Companies Act, 1912 was the first statutory measure to
regulate life business.

1928

The Indian Insurance Companies Act was enacted.

1956

Nationalization of Life Insurance Sector and Life Insurance Corporation. The LIC
absorbed 154 Indian, 16 non-Indian insurance as also 75 provident societies.

1971

The General Insurance Corporation of Indian was incorporated as a company

1973

General insurance business was nationalized with effect from 1st January 1973.
107 insurers where amalgamated and grouped into four companies namely:
National Insurance Company Ltd.
The New Indian Assurance Company Ltd.
The Oriental Insurance Company Ltd
The United Indian Insurance Company Ltd.

1)
2)
3)
4)

1993

The Government set up a committee under the chairmanship of RM Malhotra former

Governor of RBI to propose recommendations for reforms in the insurance sector

2000
2000-01

The IRDA was incorporated as a statutory body in April 2000.

Foreign companies where allowed ownership of up to 26%
Insurance Industry had 16 new entrants, 10 in life and 6 in General Insurance

2001-03

Insurance Industry had 5new entrants, 2 in life and 3in General

2003-04

Insurance Industry had 1new entrants, Sahara Indian Insurance Company Ltd. In
Life Insurance category

2004-05

Insurance Industry had 1new entrants, Shri Ram Indian Insurance Company Ltd. In
Life Insurance category

2005-06

Bharti Axa Life Insurance Company was granted Certification of Registration in

July

2006

Bharti Axa Life Insurance Company commenced operation the newest player in the
insurance sector.

Evaluation of life insurance in India:

The boycott of British goods and British institution, which occurred because of the
nationalist movement, encouraged of Indian-owned commercial and business houses By
1907, the Indian mercantile the first of the long lasting general insurance companies to be
established with Indian capital, had started functioning five offices, the New India,
Vulcan, Jupiter, British India General and Universal, were established in 1919 almost
simultaneously for transaction general insurance business.
In 1928, prominent insurance men of Bombay met and formed the Indian insurance
companies association to protect the interest of Indian insurance. Leaders of the insurance
industry began to annual remove of national wealth through invisible exports and arise
public interest in favor of Indian insurance.

In 1972, the General Insurance Business (Nationalization) Act 1972 was passed under the
provisions of this act. The general insurance corporation of India was established for the
purpose of directing; controlling and caring on the general insurance business and all the
106 insurers were merged and grouped into four subsidiaries of the general insurance
corporation of India namely:

National Insurance Company Ltd., with its head office at Calcutta.

The New India Assurance Company Ltd., with its head office at Bombay.

The Oriental Insurance company Ltd., with its head office at Delhi.

The United Indian insurance Company Ltd., with its head office at Madras The history of
life insurance in India dates back to 1818 when it was conceived as a means to provide
for English Windows. Interestingly in those days a premium was charged for Indian lives
than the non-Indian lives as Indian lives were considered risky for coverage.
The Bombay Mutual Life Insurance Society started its business its 1870. It was a first
company to charge some premium for both Indian and non-Indian lives. The Oriental
Assurance Company was established in 1880. The General insurance business in India,
on the other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the
first general insurance company established in the year 1850 in Calcutta by the British.
Till the end of nineteenth century insurance business was almost entirely in the hand of
overseas companies.
Insurance regulation formally began in India with the passing of the Life Insurance
Companies Act of 1912 and the provident fund Act of1912.by 1938 there were 176
Insurance companies. The first comprehensive legislation was introduced with the
Insurance Act of 1938 that provided strict state Control over insurance business. The
insurance businesses grow at a faster pace after independence. Indian companies
strengthened their hold on this business but despite the growth that was witnessed,
insurance remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life insurance and
provident societies under one nationalized monopoly corporation and Life Insurance
Corporation (LIC) was born. Nationalization was justified on the grounds that it would
create much needed founds for rapid industrialization. This was in conformity with the
Governments chosen path of State lead planning and development.
With largest number of life insurance policies in force in the world, Insurance happens to
be a Megs opportunity in India. Its a business growing at the rate of 15-20 per cent
annually and presently is of the order of Rs 450 billion. Together with banking services, it
adds about 7 per cent to the GDP. Gross premium collection is nearly 2 per cent of GDP
and funds available with LIC for investment are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without is life insurance cover while health
Insurance and non- life insurance continues to be below international standards and this
part of the population is also subject to weak social security and pension system with
hardly any old age income security. This it is an indicator that growth potential for the
insurance sector is vast.
A well-developed and evolved Insurance sector is needed for economic development as it
provides long term funds for infrastructure development and at the some time strengthens
the risk taking ability. It is estimated that over the next ten years Indian would require
investments of the order of one trillion US dollar. The insurance sector, to some extent,
can enable investments in infrastructure development to sustain economic growth of the
country.
Insurance is a federal subject in Indian. There are two legislations that govern the sector
The Insurance Act -1938 and the IFDA Act-1999.

 Reinsurance
A reinsurer in India was defined clearly for the first time in the Insurance Act of 1938.
260 Indian currency has not been convertible since independence. Thus, to retain the
maximum possible premium within India and thereby preserve foreign currency
became a priority for the reinsurance business. India did not have a floating exchange rate
until the 1990s. Therefore, hard currencies (like the U.S. dollar) were considered valuable
resources. Thus, the policy was to pay minimum possible premiums in hard currencies.
To achieve this goal, the insurance companies in India formed the India Reinsurance
Corporation in 1956. This was a voluntary agreement at the time.
In 1961, the government created the Indian Guarantee and General Insurance Company.
By amendment to Section 101A of the Insurance Act, the government required all
companies to give statutory cession of 10 percent each to the India Reinsurance
Corporation and to the Indian Guarantee and General Insurance Company. This
requirement has been echoed in the Act passed in 2000. 5 The only reinsurance company
allowed to operate in India is the General Insurance Corporation.

Present scenario:
The Government of Indian liberalized the insurance sector in March 2000 with the
passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all
entry restrictions for private players and allowing foreign players to enter the market with
some limits on direct foreign ownership. Under the current guidelines, there is a 26
percent equity cap for foreign partner in an insurance company. There is a proposal to
increase this limit to 49 percent.
The opening up of the sector is likely to lead to greater spread and deepening of insurance
in India and this may also include restructuring and revitalizing of the public sector
companies. In the private sector 12 life insurance and 8 general insurance companies
have been registered. A host of private Insurance companies operating in both life and
non-life segments have started selling their insurance policies since 2001.
In India, some Europeans started the first life insurance company in Bengal presidency,
viz., the Orient Life assurance Company in 1818.

The year 1870 was a year of a land mark in the history of Indian Insurance separating the
early period of pioneering attempts in life Insurance form the subsequent period of steady
at the establishment of Indian Life Office, viz., Bombay mutual Life Assurance society in
1871.
The next important life office was Oriental Government Security Life Assurance Co.,
Ltd., which started its operation since 1874. Since then several offices developed in India.
In 1956, the Life insurance business was nationalized by taking over 245 companies and
by forming one single corporation, named as Insurance Corporation (LIC) of India.

 Role of insurance in economic

For economic development, investments are necessary. Investments are made out of
saving. A life insurance company is a major instrument for the mobilization of savings of
people, particularly from the middle and lower income groups. These savings are
channeled into investments for economic growth.
An on 31.3.2002, the total investment of the LIC exceeded Rs.245,000 corers, of which
more than Rs.130,000 corers were directly in Government (both State and Centre) related
securities, more than Rs. 12000 corers in the State Electricity Boards, nearly Rs.20,000
corers in housing loans and Rs.4000 corers in water supply and sewerage systems. Other
investments included road transport, setting up of industrial estates and directly financing
industry. Investment in the corporate sector (shares, debentures and term loans) exceeded
Rs.30, 000 corers. These directly affect the lives of the people and their economic wellbeing.
The L.I.C is not an exception. All good life insurance companies have huge funds,
accumulated through the payments of small amounts of premium of individuals. These
funds are invested in ways that contribute substantially for the economic development of
the countries in which they do business. The private insurers in India are new and had not
built up funds in 2002. But, in course of time, they also would be directly and indirectly
contributing to the countrys development.
A life insurance company will have large funds. These amounts are collected by way of
premiums. Every premium represents a risk that is covered by that premium. In effect,
therefore, these vast amounts represent pooling of risks. The funds are collected and field
in trust for the benefit of the policyholders. The management of life insurance companies
is required to keep this aspect in mind and make all its decision in ways that benefit the
community. This applies also to its investments. That is why successful insurance
companies would not be found investing in speculative ventures. Their investments, as in
die case of the L.I.C., benefit the society at large.

Rural Insurance
In his budget speech, Finance Minister Deshmukh had specific hopes for rural insurance.
He announced, It will be possible to spread the message of insurance as far and as wide
as possible, reaching out beyond the most advanced urban areas and into hitherto
neglected, namely, rural areas.After nationalization, Life Insurance Corporation has
specifically targeted the rural insurance market. To promote rural insurance, it followed a
segmented approach to the market. First, it targeted the rural wealthy with regular
individual policies. Second, it offered group policies to people who could not afford
individual policies. For the very poor, it offered government-subsidized policies. In India
today more than half of the population live in rural areas and contribute a quarter of the
gross domestic product (GDP). Thus, the policymakers felt that it was essential to bring
life insurance business to the rural population. Did the policymakers succeed in bringing
insurance in the rural sector? Exactly to whom in the rural sector did they manage to

bring life insurance? The success of the rural expansion can be measured in a number
of different dimensions. Here we are not talking about success necessarily in the sense of
commercial success of higher profits. The finance minister was talking about a social
objective of bringing insurance cover for the neglected rural areas.

CHANGING TRENDS IN LIFE INSURANCE POLICY:

A long with the other objectives of insurance like financial security, tax benefits etc. one
of the major objectives is saving and investment. Traditional life insurance policies like
endowment were becoming unattractive and not meeting the aspirations of the
policyholders as the policyholder found that the sum assured guaranteed on maturity had
really depreciated in real value because of the depreciation in the value of money. The
investor was no longer content with the so called security of capital provided under a
policy of life insurance and started showing a preference for higher rate of return on his
investments as also for capital appreciation. It was, therefore found necessary for the
insurance companies to think of a method whereby the expectation of the policyholders
could be satisfied. The objective of providing a hedge against the inflation through a
contract of insurance pushed insurer to link the insurance policy with market and thus the
industry observed the beginning of Unit linked insurance policy (ULIP).

Life insurance Company in Indian market:

Herein mentioned are some statistics given by IRDA regarding individual single
premium of several life insurance.
1. Bajaj Allianz
2. ING vyasa
3. Reliance life
4. SBI Life
5. Tata AIG
6. HDFC standard
7. ICICI prudential
8. Birla Son life
9. Aviva
10. Max New York
11. Met Life
12. Shriram Life
13. IDBI federal
14. Star Union Dai-ichi

15. LIC

Brief history of same Indian life insurance company

1) HDFC Standard Life Insurance Co. LTD.
HDFC Standard life insurance Company LTD is one of Indias leading private
insurance companies, which offers a range of individual and group insurance
solutions. HDFC standard life insurance Co. LTD. Is a joint venture between HDFC
LTD., Indias largest housing finance institution and standard life Assurance
company, Europes largest mutual life company. It was the first life insurance
company to be granted a certificate of registration by the IRDA on the 23 rd of
October, 2000. HDFC holds about 72.43% of the equity, standard life holds 26%
while the rest is held by others
Standard Life, UK was founded in 1825 and has an experience of over 185 years. The
company is rated as very strong by standard & poors (AA) and excellent by
Moodys (Aa2). Headquartered in Edinburgh, standard life has around 9,000
employees across the UK, Canada, Leland, Germany, Austria, India, USA, Hong
Kong and mainland China The standard life group includes savings and investments
businesses, which operate across its UK, Canadian and European markets; corporate
pensions and benefits businesses in the UK and Canada; standard life investment is a
global investment manager.
HDFC Limited, Indias premier housing finance institution has assisted more than 3.8
million families to own a home, since its inception in 1977 across in Dubai, London
and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to
assist NRIS to own a home back in India. HDFC has set benchmarks for the Indian
housing finance industry. Recognition for the service to the sector has come form
several national and international entities including the World Bank that has lauded
HDFC as a model housing finance company for the developing countries. HDFC has
undertaken a lot of consultancies abroad assisting deferent countries including Egypt,
Maldives, Mauritius, and Bangladesh in the companies.

2) Max New York Life Insurance co.LTD.

Max New life Insurance Company Limited is a joint venture between Max Indian
Limited, a multi- business corporate, and New York Life International, a global expert
in life insurance.
New York Life is a Fortune 100 company that has over 160 years of experience in the
life insurance business. Max Indian is a Limited is a multi- business corporate dealing
in Clinical Research, IT and Telecom Service, and Specialty product businesses.
Max New Life Insurance started its operations in India on 15 th November, 2000. It is
the first life insurance company in the to be awarded the ISO 9000:2000 certification
Max New York offers customized products tailored to suit individuals needs. With

its various products and Riders, they offer more than 400 product combination.
Today, Max New York Life Insurance has a network of 705 offices spread over 37
cities all over Indian.
Max New York Life has identified individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process, which
comprises four stages screening, psychometric test, career seminar and final
interview. The agent advisors are trained in- house to ensure optimal control on
equality of training. Max New York Life insurance significantly in its training
programmer and each agent is tainted for 152 hours as opposed to the mandatory 100
hours stipulated by the IRDA before beginning to sell in the marketplace. Training is
a continuous process for agents at Max New York Life and ensures development of
skills and knowledge through a structured programmed spread over 500 hours in two
years. This focus on continuous quality training has resulted in the company having
amongst the highest agent pass rate in RIDA examination and agents have the highest
productivity among private life insurance.
Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional channels to further grow its business. The
company is using a five-pronged strategy to pursue alternative channels of
distribution. These included the franchisee model, rural business, direct sales force
involving group insurance and telemarketing opportunities, banc assurance and
corporate alliances.

3) ICICI Prudential Insurance co. LTD.

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 was established in 1995 to lend money for industrial development. Today, it has
diversified into retail banking and is the largest private bank in the country. Prudential
plc was established in 1848 and is presently the largest life insurance company. Total
capital infusion stands at Rs. 33.62 billion, with ICICI Bank holding a stake of 74%
and prudential plc holding 26%.
They began their operations in 24th November, 2000 after receiving approval from
Insurance Regulatory Development Authority (RIDA). TODAY, nation-wide team
comprises of over 1,000 offices, over 263,000 advisors; and 22 banc assurance
partners. ICICI Prudential was the first life insurance in the Indian to receive a
National Insurance Financial Strength rating of AAA from Fitch ratings. For three
years in a row, ICICI Prudential has been voted as Indias Most Trusted Private Life
Insurance, by the Economic Times AC Nielsen ORG Margi survey of Most Trusted
Brands.

4) Kotak Mahindra Old Mutual Life Insurance Co.LTD.

Kotak Mahindra Old Mutual Life Insurance LTD. Is a joint venture between Kotak
Mahindra Bank LTD,(KMBL), and Old Mutual plc, Kotak Mahindra is one of Indias
leading financial institution and offers a range of financial services such as
commercial banking, stock broking, mutual funds, life insurance, and investment
banking, Kotak Mahindra Old Mutual Life Insurance Ltd. Started its operations in
India on 10th January, 2000.
Old Mutual, a company with 160 years experience in life insurance was established
more than 150 years ago and offers a diverse range of financial services in South
Africa, the United States and United Kingdom. The company is listed on the London
Stock Exchange with a market capitalization and has its head quarters in London
Kotak Mahindra Old Mutual Life Insurance is a 74:26 joint venture between Kotak
Mahindra Ltd. And Mutual plc. Kotak Mahindra Old Mutual.
Life insurance is one of the fastest growing insurance companies in India has shown
remarkable growth since its inception in 2001.

5) Birla Sun Life Insurance Co. Ltd.

Established in 2001, Birla Sun Life Insurance Company Limited (BSLI) is a joint
venture between the Aditya Birla Group, a well know and trusted name amongst
Indian conglomerates and Sun Life Financial of Canada. Aditya Birla Group is an
Indian multinational conglomerate with presence in India, Thailand, Indonesia,
Philippines Australia and china.
Sun Life Insurance, Sun Life financial primary insurance business, is one of the
leading insurance companies of the world.
Known for its innovation and creating benchmarks, BSLI has several first to its
credit. It was that first Indian insurance Company to introduce Free Look Period
and the same was made mandatory by IRDA for all other life insurance companies.
Additionally players in India. To establish credibility and further transparency, BSLI
also enjoys the prestige to be the originators of practice to disclose portfolio on
monthly basis. These category development initiatives have helped BSLI be closer to
its policy holders expectations, which gets further accentuated by the complete of
insurance products (viz. pure term plan, life stage products, health plan and retirement
plan) that the company offers.
It has an extensive reach through its network of 600 branches and 1, 47,900
empanelled advisors. This impressive combination of domain expertise, product
range, reach and ears on ground, helped BSLI cover more than 2.4 million lives it
commenced operations and establish a customer base spread across more than 1500
towns and cities in India.

BSLI has ensured that it has lowest outstanding claims ratio of 0, 00% for FY 201011. The company has web-enabled IT system for better customer services and a
strong distribution channel. It has professional knowledge and global of Aditya Birla
Group.

6) TATA AIG LIFE INSURANCE CO.LTD.

Tata AIG Life Insurance Company Limited is a joint venture between Tata Group and
American International Group, Inc. (AIG). Tata Group is one of the oldest and
leading business groups of India. Tata Group has had a long association with Indias
insurance sector having been the largest insurance company in India prior to the
nationalization of insurance. The Late Sir (Docub) Tata was the founder Chairman of
New India Assurance Co. Ltd, a group company incorporated way back in 1919.
American International Group, Inc is the leading U.S. based international insurance
and financial services organization and the largest underwriter of commercial and
industrial insurance in the United Status. AIG has one of the most extensive life
insurance networks in the world.
Tata AIG Life combines the Tata Groups Pre-eminent leadership position in India
and AIGs Global presence as the worlds leading international insurance and financial
services organization. The Tata Group holds 74 per cent stake in the insurance venture
with AIG holding the balance 26 percent. Tata AIG Life provides insurance solution
to individuals and corporate. Tata AIG Life Insurance Company was licensed to
operate in India on February 12, 2001 and started operations on April 1, 2001.

7) SBI LIFE INSURANCE CO.LTD.

SBI Life Insurance is a joint venture between the State Bank of India and Cardif of
France. State Bank of India is the largest banking franchise in India. Along with its 7
Associate Banks, SBI Group has a network of over 14,500 branches across the
country, the largest in the world.
Cardif is a wholly owned subsidiary of BNP Paribas, which is The Euro Zones
leading Bank. BNP is one of the oldest foreign banks with a presence in India dating
back to 1860. SBI Life Insurance is registered with an authorized capital of Rs. 1000
Corer and a paid up capital of Rs. 500 crores. SBI owns 74% of the total capital and
Cardif the remaining 26% Cardif is ranked 2 nd worldwide in creditors insurance
offering protection to over 35 million policy holders and net income in excess of Euro
1 billion. Cardif has also been a pioneer in the art of selling insurance products
through commercial banks in France and in 35 more countries.

8) MET LIFE INDIA INSURANCE CO.LTD.

Met life insurance Co; ltd is a joint venture between Met life Group and its Indian
partners; the Indian partner include J&k Bank, Dhanalakshmi, Karnataka Bank,
Karvy constructions, Way2Wealth, and Mini Muthoothu.
Met life Group has presence in America and Asia and has an experience of over 139
years in providing financial services. The Met life companies are the number one life
insurer in the U.S. with approximately US$2.8 trillion of life insurance in force. Met
life serves 88 of the top one hundred FORTUNE 500 companies. Met life entered
Indian insurance sector in 2001. The met life companies offer life insurance,
annuities, automobile, and home insurance, retail banking and other financial services
to individuals, as well as group insurance, reinsurance and retirement and savings
products and services to corporation and other institutions, reaching more than 70
million customers around the world.

9) RELIANCE LIFE INSURANCE CO.LTD.

AMP sanmar life insurance was a joint venture between AMP, Australia and the
sanmar Group. Headquartered in Chennai, AMP sanmar had over 90 offices across
the country, 9000 agents, and more than 900 employees. Consequent to the
acquisition of the entire equity capital of AMP, Australia and Sanmar Group in AMP
Sanmar life insurance Co. ltd., by Reliance Capital Limited, AMP Sanmar Life
insurance Co. ltd. has changed to reliance life insurance Co. Ltd. on 17.01.2006.
Reliance Life insurance Company Limited is a part of reliance capital limited of the
reliance Anil Dhirubhai Ambani Group. The company acquired 100 per cent
shareholding in AMP Sanmar Life insurance Company in August 2005. RLIC has a
huge network of around 1145 branches covering a wide geographical area. It is one of
the ISO 9001-2000 certified life insurance companies of India.

2.2) Core concept:

WHAT IS INSURANCE:
Insurance in law and economics is a form of risk management primarily used to hedge
against the risk of a contingent loss. Insurance is defined as the equitable transfer of the
risk of a loss, from one entity to another, in exchange for a premium. An insurer is a
company selling the premium, to be charged for a certain amount of insurance coverage.
The definitions of life insurance given by the learned persons are as follows:
Life insurance business is the business of effecting contract upon human life.
As per section of insurance Act. A life insurance contract may be defined as one
whereby the insurer, in consideration of premium paid either in a lump sum or in
periodical installments, undertaken to pay an annuity or a certain sum of money either on
the death of the insured as on the expiry of a certain number of years.

R.S. Sharma.
The act, system, or business of insuring property, life etc, against loss or harm arising
in specified contingencies, as fire, accident, death, disablement in consideration of a
payment proportionate to the risk involved is called insurance. Insurance may be
described as a social device to reduce or eliminate risk of life and property. Under the
plan of insurance, a large number of people associated themselves by sharing risk.
Insurance is actually a contact between 2 parties whereby one party called insurer
undertakes in exchanges for a fixed sum called premium to pay the other party
happening of a certain event, insurance is a contract whereby, in return for the
payment of premium by the insurers pay the losses suffered by the insured as a result
of the occurrence of unforeseen events.

Types of insurance :
Life insurance

Insurance

Non Life
insurance

Term life Whole

life insurance
Endowment
type plans
children
assurance plans
annuity and
pension plan

Fire
Marine
Aviation
Accident
Miscellaneous

Life insurance:

Life in insurance business was started by Europeans with the establishment of oriented
Life insurance Company in 1818.Later on, in 1871, Bombay Mutual Life insurance came
into Existence. The Oriental Government Security Life assurance came into being in
1874. The Life insurance business was nationalized in the year 1956.
Marine insurance is the oldest type of insurance and of the earliest record of a marine
Policy relates to a Mediterranean voyage in 1347.This was followed by Life insurance
some 300 years later. Fire insurance, however, did not begin until after the Great fire of
London in 1666. In India all the three insurance developed as under:

Marine insurance:
There are references that marine insurance was practiced in India three thousand years
ago; there is no evidence that insurance in its present from was practiced prior to the
twelfth century. In fact, British insurers introduced general insurance, in its modern form
in India, when they opened their branches around 1700. The Sun Insurance Office ltd (a
foreign company) started its operation in Calcutta in the year 1710. In
our
country
the following four companies have been authorized to carry to the general insurance
business including marine insurance:
1) National Insurance Company, Calcutta.
2) New India Assurance Company, Bombay.
3) Orieatal Fire and General Company, Bombay.
4) United India Fire and general Insurance Company, Madras, Fire insurance.
In our country the insurance started with the establishment of Triton insurance Company
in Calcutta in 1850. The North British Mercantile Company come into existence in 1861.
There was slow progress of fire insurance in our country and with the nationalization of
general insurance business. Fire insurance is now being transacted by the four subsidiary
companies of General insurance Corporation of India.

Principles of insurance:
Insurance contracts are based on certain fundamental principles. These principles are
common to all type of insurance life, fire, marine and miscellaneous insurance
contracts, with the exception of the principle of indemnity which is not applicable in case
of life insurance contract because of a being a contingent contract.
These Principles are:
1)
2)
3)
4)

Utmost good faiths

Insurable interest
Indemnity
Contribution

1)

Principles Utmost good faith:

Since insurance shift risk from one party to another, it is essential that there must be
at most good faith and mutual confidence between the insured and the insurer. In a
contract of insurance the insured knows more about the project matter of the contract
than the insurer. Consequently, he is duty bound to disclose accurately all material
facts and nothing should be a withheld or concealed. Any fact is material, which goes
to the root of the contract of insurance and has a bearing on the risk involved. It is
only when the insurer knows the whole truth that he is in a position to judge (a)
weather he should accept the risk and (b) what premium he should charge. If that
were so, the insured might be tempted to bring about the event insured against in
order to get money.

2) Principles of Insurable interest:

For an insurance contract to be valid, the insured should have an insurable interest in
the subject matter of insurance. A contract of insurance affected without insurable
interest is void. It means that the insured must have an actual pecuniary interest and
not a mere anxiety or sentimental interest in the subject matter of the insurance. The
insured must be so situated with regard to the thing insured that he would have
benefit by its existence and loss from its destruction. The owner of a ship run a risk of
losing his ship, the character of the ship runs a risk of losing his freight and the owner
of the cargo incurs the risk of losing his goods and profit. So, all these persons have
something at stake and all of them have insurable interest, It is the existence of
insurable interest in a contract Insurance, which distinguishes it from a mere watering
agreement.

3) Principle of Indemnity :
The term Indemnity means making up the loss. A contract of insurance contained in
a fire, marine, burglary or any other policy (excepting life assurance and personal
accident and sickness insurance) is a contract of indemnity. This means that the
insured, in case of loss against which the policy has been issued, shall be paid the
actual amount of loss not exceeding the amount of the policy, i.e. He shall be fully
indemnified. The object of every contract of insurance is to place the insured in the
same financial position, as nearly as possible, after the loss, as if his loss had not
taken place at all. It would be against public policy to allow an insured to make a
profit out of his loss, as if his loss had not taken place at all. It would be against
public policy to allow an insured to make a profit out of his loss or damage.

4) Principle of Contribution :
Contribution is also a corollary of the principle of indemnity. This principle applies
where there are two or more insurance on one risk; the principle of contribution
comes into play. The aim of contribution is also distribute the actual amount of loss
among the different insurers who are liable for the same risk under different policies

in the respect of the same subject matter. Any one insurer may pay to the insured the
full amount of the loss covered by the policy and then become entitled to contribution
from his co-insurers in proportion to the amount which each has undertaken to pay in
case of loss of the same subject-matter.
In other words, the right of contribution arises when (i) there are different policies
which relate to the same subject-matter (ii) the policies cover the same peril which
caused the loss, and (iii) all the policies are in force at the time of loss, and (iv) one of
the insurers has paid to the insured more than his share of the loss.

Function of insurance
1) Provides protection
The function of insurance is to provide protection against future risk, accidents,
uncertainty. Insurance cannot check the happening of the risk, but can certainly provide
for the losses of risk. Insurance is actually a protection against economic loss by
sharing the risk with others.
2) Collective bearing of risk
Insurance is a device to share the financial loss of few among many others. Insurance is
a mean by which few losses are shared among larger number of people. All the insured
contribute the premiums towards a fund and out of which the persons exposed to a
particular risk is paid.
3) Assessment of risk
Insurance determines the probable volume of the risk by evaluating the various factors
that give rise to risk. Risk is the basis for determining the premium rate also.
4) Provide certainty
Insurance is s device, which help to change from uncertainty to certainty. Insurance is
device whereby the uncertain risks may be made more certain.
5) Preventions of losses
Insurance cautions individuals and businessmen to adopt suitable to prevent unfortunate
consequences of risk by observing safety instructions; installation of automatic sparkler
or alarm systems, etc. prevention of losses causes lesser payment to the assured by the
insurer and this will encourage for more savings by way of premium. Reduced rate of
premium stimulate for more business and better protection to the insured.
6) Means of savings and investment
Insurance server as savings and investment; insurance compulsory way of savings and
it restricts the unnecessary expense by the insureds for the purpose of saving incometax exemptions also, people in insurance.

 Advantages of life insurance:

1. In the event of death, the settlement is easy. The heirs can collect the money quicker,
because of nomination and assignment.
2. There is a certain amount of compulsion to go through the plan of savings. In another
forms, if one charges the original plan of savings, there is no loss. In life insurance,
there is a loss.
3. There are tax benefits, both in income tax and in capital gain.
4. Marketability and liquidity are better. A life insurance policy is property and can be
transfer on mortgaged. Loans can be raised against the policy. Ti is possible to protect a
life insurance policy from being attached by debtors. The beneficial interest will remain
secure.

Limitation of life insurance:

1. Insurance can not protect against all kind of risk. If any risk is not in harmony with
government policy, insurance can not protect. For example there is no protection
against the risk in smuggling business.
2. The loss which has been evaluated in money that is only secured by insurance.
3. Insurance can not protect in case of risk existing due to unexpected events. For example
economic instability due to trade cycle, aptitude of public, changes in fashions &
habits, unexpected and unprecedented changes in government policy. All such can not
get insurance protection.

CH: 3 Data presentation

and analysis

3.1) Introduction
3.1.1)

what is your source of earning?

option

No. of
respondent

Private

40

Business

20

Government
Total

3.1.1)

what is your source of earning

40
100

Conclusion:
40% respondents earn through priavt company 20% business men &40% have
government job so masy of the people hear do the work in privat or government
jop

3.1.2)

3.1.2)

Are you satisfied with the earning?

option

No. of
respondent

yes

66

no

34

total

100

Are you satisfied with the earning

Conclusion
66% respondent should be satisfy get the service of life insurance &34%
respondent not satisfy so we shows that satisfaction level should be higher get the
service life insurance product.

3.1.3)

Are you interested in investing?

option

No. of
respondent

yes

66

no

34

total

100

3.1.3)

Are you interested in investing

conclusion
66% respondent intrested inverting & 34% respondent not interestd investing so
we shows that interest leval higher to invest the fund.

3.1.4)

3.1.4)

Would you like to invest in some other part time work?

option

No. of
respondent

yes

70

no

30

total

100

Would you like to invest in some other part time work

Conclusion
70% respondent like to invest in part time work & 30% only not interested. So, hear
we shows that people like to invest in part time work and also its ratio was higher.

3.1.5)

In which industry would you like to involve yourself?

Option

3.1.5)

No. of respondent

Insurance

50

Banking& finance

20

Education

20

Others

10

In which industry would you like to involve yourself

Conclusion
50% respondent like to invest money in insurance sector,10% respondent only
invest money in others place, 20% invest fund in education sector,20% like to
invest in banking finance. So, we show that more of the respondents chose
insurance industry to invest the fund.

3.1.6)

(if yes, than) which factors responsible for investment in life Insurance product?
(Multiple)
Option

No. of respondent

Tax benefit

10

Risk coverage saving

20

Security with high return

20

Money back guarantee

10

Larger risk covariance

30

Others

10

3.1.6)

(if yes, than) which factors responsible for investment in life Insurance product

Conclusion
30% respondent invest in insurance sector because of tax saving,10% respondent
invest in because of money back insurance,20% respondent invest in because of
security with high return,20% invest in because of risk coverage saving,10%
invest in because of other reson. So we shows that most of respondent chose it to
get benefit of tax saving.

3.1.7)

Which companies Life Insurance do you have?

Option

3.1.7)

No. of respondent

LIC

40

Bajaj alliance

20

Reliance life insurance

20

Kotak life insurance

10

Other

10

Which companies Life Insurance do you have

Conclusion
40% chose LIC company, 20% chose Bajaj alliance, 20% chose Reliance life
insurance, 10% chose Kotak life insurance &10% chose others sectors to invest
the fund. So we shows that LIC is more feverable to invest the fund and people
also interested in it as compar to all other palces.

3.1.8)

How many year are you ready to pay premium for your Insurance scheme?
Option

3.1.8)

No. of respondent

Less than 3 years

40

6-9 years

10

3-5 years

30

More than 10 years

30

How many year are you ready to pay premium for your Insurance scheme

Conclusion
40% respondent pay the pimium less thae three year, 10% respondent pay the
primium 6-9 year, 30% respondent pay the primium 3-5 year,& 30% respondent
pay the primium more than 10 years. So we asum thae people wouled like to pay
the pimium tess than 3 years in his /her schem.

3.1.9)

How did you come to know about your present Life Insurance? [Multiple]
Option

3.1.9)

No. of respondent

Family/ relatives

30

Friends

20

Agent

10

Advertisement

30

Others

10

How did you come to know about your present Life Insurance

Conclusion
30% respondent know the insuranc sctor to his family,10% respondent known it
through
others
ways
,30%
respondent
known
it
through
adevertisement,10%espondent known it through agent,20% respondent known it
through it friends.

3.1.10)

Which type of Insurance policy do you have? [Multiple]

Option

3.1.10)

No. of respondent

Individual Med shield policy

10

Motor vehicle policy

10

Disability benefit

10

Accident policys

30

Trade

30

Other specify

10

Which type of Insurance policy do you have

Conclusion
10% respondent have individual medishield policy, disability benefit, also moter
vihical policy, &other spacify, 30% respondent have trade,& also accident
policy.so we assume that accident policy,and trad more feverable to all others.

3.1.11)

What is your motive when you invest in Insurance?

Option

3.1.11)

No. of respondent

Only investment

30

Only insurance

30

Investment + Insurance

40

What is your motive when you invest in Insurance

Conclusion
40% respondent motive to invest in ivest + insurance,30% respondent motive to
invest in only investment & 305 also invest in his/ her motive is only insurance.so
more of them chose ti toinsure + invest the fund.

3.1.12)

3.1.12)

Selected Insurance policy fulfills your motive?

Option

No. of respondent

Yes

90

No

10

Selected Insurance policy fulfills your motive

Conclusion
90% respondents motive should be fulfil by the insurance only 10% are not fulfil
his/her motive, so we shows that more raspondent senisfy the life insurance.

3.1.13)

Haw many percentages of you spend for investment?

Option

No of respondent

None

10

10%

10

20%

20

3.1.13)

30%

20

More than 30%

40

Haw many percentages of you spend for investment

Conclusion
40% respondent spend more than 30% amount, 20% respondent spend 30%
amount, and 10% respondent spend 10% amount. Hear we shows that more than
respondent spend his money in insurance sector.

3.1.14)

Which premium policy you prefer most?

Option

3.1.14)

No of respondent

Single premium policy

60

Annuity policy

40

Which premium policy you prefer most

Conclusion
60% respondent prefar annuity police and 40% respondent prefar single primium
policy. So more of respondent chose annuity policy.

3.1.15)

What are your main objective behind the investing?

High priority -4, Average priority -3, less priority-2, least priority-1
Objective

High
priority

Average
priority

Less
priority

Least
priority

Tax saving

59

39

Future security

37

45

15

3.1.15)

Pension

24

36

35

Speculation

47

48

11

What are your main objective behind the investing?

High priority -4, Average priority -3, less priority-2, least priority-1

1.3.16)

Which is your preferred mode or time period for paying premium amount?

Option

No of respondent

Monthly

20

Quarterly

20

Half

40

Yearly

20

1.3.16)

Which is your preferred mode or time period for paying premium amount

Conclusion
40% respondent pays the premium half yearly, 20% respondent pay the premium
quarterly, and also monthly, 20% respondent pay the premium yearly also. So
more of them respondent pay the premium half yearly.

DATA ANALYSIS BY WAM METHOD

The Main objective behind the investing:

Tax saving
Future security
Pension
Speculation
3.1.17) Tax saving :

High priority

Xi

Wi

59

Xiwi
236

Average priority

39

117

Less priority

Least priority

Total

357

Xiwi
n
= 357/100
= 3.57

3.1.17) Tax saving :

Conclusion: tax saving objective is high priority, it a main objective to chose

insurance.

3.1.18) Future security

Xi

Wi

Xiwi

High priority

37

148

Average priority

45

135

Less priority

15

30

Least priority

Total

316

Xiwi
n
= 316/100
= 3.16

3.1.18) Future security

Conclusion : future security is a main objective and also priority should be high.

3.1.19) Pension
Xi

Wi

Xiwi

High priority

24

96

Average priority

36

108

Less priority

35

70

Least priority

5
Total

Xiwi
n
=279 /100
= 2.79

3.1.19) Pension

279

Conclusion : Pension is a one objective of to chose insurance, but its priority

was average.

3.1.20) Speculation
Xi

Wi

Xiwi

High priority

47

188

Average priority

41

123

Less priority

11

22

Least priority

Total

334

Xiwi
n
= 334/100
=3.34

3.1.20) Speculation

Conclusion: speculation is a better objective of insurance also its a high priority.

So, we conclude that tax saving is main objective of to chose the insurance.
Objective

3.2

WAM

Statement

Tax saving

3.57

Less priority

Future security

3.16

Less priority

Pension

2.79

Least priority

Speculation

3.34

Less priority

Presentation of Secondary Data

Secondary data means data that are already available i.e. they refer to the data which have
already been collected and analyzed by someone else. Secondary data may either be
published data or unpublished data. In this project secondary data collected from
following sources. Usually published data are available:

Secondary data:
www.icici.com
Irda.com
Insurance.com
Icra.com
Books:
Life Insurance(1c33)-5. Balachandran
Insurance principles and practice P.A.S.mani
Life insurance prof. o. s. Gupta

3.3.

Presentation of Primary Data

Those data which are collected for the first time by the researcher or by some else
especially for the purpose of study are known as primary data.
Primary data are:
Primary data are collected from the public by filled up the questioner.

CH: 4 Finding and

conclusion

H1: is accepted
H0: is failed to be accepted because of people are not satisfy the facility of life
insurance policy.

H1: is accepted
H0: is failed to be accepted because of more responsible factor is Larger risk
covariance.

H1: is accepted

H0: is failed to be accepted because of most of respondent pay premium mode

is monthly and interested in less than three years.

H1: is accepted

H0: is failed to be accepted. 100 of respondent it is found that most of effective

source of awareness for life insurance policy is family/relatives.

Conclusion
1. The researcher concludes from the study purchase accident policy is
more preferable to other because reason behind choosing the med
claim policy for tax saving & family responsibility & some other reason

are also behind for purchase insurance policy like retirement, pension,
future security, and so on.
2. The researcher conclude that the investor mostly know insurance
policy through friends, family / relation, etc.
3. Researchers know about insurance policy today many people
interested towards trade protector, motor vehicle policy, and accident
policy.
4. The researcher conclude that the investor mostly prefer LIC life
insurance policy.

CH: 5 Suggestion and

recommendation

Nearly 80 per cent of Indian population is without life insurance policy cover while health
insurance and non- life insurance continues to be below international standard and pert of
the population is also subject to weak social security and pension systems with hardly any

old age income security. This is an indicator that growth potential for the insurance sector
in immense.

A well- developed and evolved insurance sector is needed for economic development as it
provides long term fund for infrastructure development and at the same time strengthens
the risk taking ability. It is estimated that over the next ten years Indian would require
investments of the order of one trillion US dollar. The insurance sector, to some extant, can
enable investments in infrastructure development to sustain economic growth country.

The life insurance sector has been witness to varied phases witnessing a slew of changes in
the past year.

Life insurance has no competition from any other business. Many people think that life
insurance is an investment or a manse of saving. This is not a correct view. When a person
saves, the amount of funds available at any time is equal to the money set aside in the past,
plus interest. This is so in a fixed deposit in national savings certificates, in mutual funds
and all other savings instrument. If the money is invested in buying shares and stocks, there
is the risk of the money being lost in the fluctuations of the stocks market.

Recommendation

Indian insurance would be seeing a deregulated open insurance sector re-regulated by IRDA.
Many more places intensely competing for the market shares with financial products offering
similar benefits in an intensely intra institutional competing market, different companies

could sustain and increase its market share if it initiates certain strategic action in advance.
The suggestion as per finding and analysis are:

Companies should focus more on advertising and publicity because the awareness level
in people is low.

All the popular plans should be re-introduced with some additional features and benefits.

Since most of the people buy insurance plan for investing so companies should try to give
fixed return to its customers.

Companies should increase its customer base not only in urban areas but also in rural

Areas by opening more branches in some cities and towns.

Bibliography

Website:

Indra .com
Insurance.com
Bimaonline.com
Icra.in

Books:
Life insurance (IC33) - 5.Balachandran
Insurance principles & practice - P.A.S Mani
Life insurance - prof. o.s.Gupta

Annexure

I, Dipti Patel from the spb collage of business administration studying in

T.Y.BBA SEM 6th (FINANCE). I am doing research on investors decision is

making Pattern for Life Insurance Product". The objective of study is to

know investors decision making pattern for life insurance product. This study is
only for academic purpose. And will be kept completely confidential.

Personal Information:Name: - ___________________________________________________

Mo. no: - _________________
Age: - ___________
Income (Annual income):- _____________
Gender: -

( ) Male

( ) Female

Types of occupation: CA_________

Property dealer___________
Financial adviser______________
Others____________

Q.1) What is your source of earning?

( ) Private Job
( ) Business
( ) Government job
Q.2) Are you satisfied with the earning?
( ) Yes

( ) No

Q.3) Are you interested in investing?

(

Yes

Q.4) Would you like to invest in some other part time work?
( ) Yes

( ) No

) No

Q.5) in which industry would you like to involve yourself?

( ) Insurance
( ) Banking & Finance
( ) Education
( ) Others
Q.6) (if yes, than) which factors responsible for investment in life Insurance
product? (Multiple)
( ) Tax benefit
( ) Risk coverage & saving
( ) Security with high return
( ) Money back guarantee
( ) Larger risk covariance
( ) Others
Q.7) which companies Life Insurance do you have?
( ) LIC
( ) Bajaj Allianz
( ) Reliance Life Insurance
( ) Kotak Life Insurance
( ) Others
Q.8) How many year are you ready to pay premium for your Insurance scheme?
( ) less than 3 years

( ) 3 - 5 years

( ) 6 - 9 years

( ) more than 10 year

Q.9) How did you come to know about your present Life Insurance? [Multiple]
( ) Family/ Relatives
( ) Friends
( ) Agent

( ) Advertisement
( ) Others
Q.10)

which

type

of

Insurance

policy

do

you

( ) Individual Med shield policy

( ) Motor Vehicle policy
( ) Disability benefit
( ) Accident policy
( ) Trade
( ) Others specify________________________________
Q.11) what is your motive when you Invest in Insurance?
( ) Only investment
( ) Only Insurance
( ) Investment + insurance
Q.12) Selected Insurance policy fulfills your motive?
( ) Yes

( ) No

Q.13) Haw many percentage of you spend for investment?

( ) None
( ) 1O%
( ) 20
( ) 30%
( ) More than 30%

Q.14) which premium policy you prefer most?

( ) Single Premium Policy
( ) Annuity policy
Q.15) what are your main objective behind the investing?

have?

[Multiple]

High priority -4, Average priority -3, less priority-2, least priority-1
Objective

High
priority

Average
priority

Less
priority

Least
priority

Tax saving
Future security
Pension
Speculation

Q.16) which is your preferred mode or time period for paying premium amount?
( ) Monthly
( ) Quarterly
( ) Half
( ) yearly