SECTOR-55

1
 Project On

________________________________
________________________________
________________________________
Master of Business Administration (Marketing)

Submitted in partial fulfillment of the requirements for award of

Master of Business Administration of
Tilak Maharashtra University, Pune.

Submitted by

________Sunil Kumar____________

Roll no-09-Ait-Mba-131

PRN No.

of
Ansal Institute of Technology
Gurgaon

Guided By Prof._____________________

Tilak Maharashtra University

Gultekdi, Pune 411037

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 PREFACE

Tilak Maharashtra University, Pune

(Deemed Under Section 3 of UGC Act 1956 Vide Notification No. F.9-
19/85-U3 dated 24th April 1987 By the Government of India.)
Vidhyapeeth Bhavan, Gultekdi, Pune-411037.

CERTIFICATE

This is to Certify that the project titled

__________________________________ is a bonafide work
carried our by Mr./ Ms. ____________________________ a
student of Master of Business Administration
Semester 3rd, Specialization
____________________PRN.__________________ under
Tilak Maharashtra University, in the year 2010.

Head of the Department Examiner

Examiner
Internal External
Date:

Place: University Seal

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4
 TABLE OF CONTENTS
ACKNOWLEDGEMENTS
PREFACE
PART-1
CHAPTERS
1. INTRODUCTION
A. INTRODUCTION TO LIFE INSURANCE…………………………………………………5
B. INSURANCE IN INDIA……………………………………………………………………..9
C. PRE AND POST LIBERALISED INSURANCE IN INDIA………………………………22
D. BENEFITS OF LIFE INSURANCE………………………………………………………..26
E. RESISTANCE TO LIFE INSURANCE……………………………………………………30
2. IRDA – REGULATIONS & CONTROL AND TRAINING…………………………………31
3. BAJAJ ALLIANZ – AN OVERVIEW
A. COMPANY PROFILE……………………………………………………………………..39
B. PRODUCTS OF BAJAJ……………………………………………………………………41
C. ORGANISATIONAL STRUCTURE………………………………………………………
PART-2
4. RESEARETHODLOGY……………………………………………………………………….53
5. COMPARATIVE STUDY
A. TYPES OF LIFE INSURANCE POLICIES………………………………………………..70
B. COMPARATIVE ANALYSIS OF THE PRODUCTS……………………………………..74
6. ANALYSIS OF THE SURVEY
A. QUESTIONNAIRE DESIGNIING…………………………………………………………88
B. DIAGRAMMATIC REPRESENTATION OF THE DATA……………………………….93
7. CONCLUSION………………………………………………………………………………...103
8. SUGGESTIONS……………………………………………………………………………….105
9. BIBLIOGRAPHY…………………………………………………………………………..…107
10. ANNEXURE………………………………………………………………………………….109

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 Introduction
People in all walks of life are exposed to risk and uncertainty. An untimely death,
loss of goods due to theft and natural calamities like floods, earthquake are some
examples of the risk that everybody on earth faces. As days progress, man is
becoming exposed to more and more dangers both natural and man-made. Insurance
is the universal panacea that offers to provide against such risk and uncertainty.
Insurance does not profess to eliminate loss but it compensates, to some extent, the
loss, which arises from uncertain events.

The Nature of Insurance

Insurance is essentially a co-operative endeavor. Under any insurance arrangement,
basically, a large number of persons, in effect, agree to share a loss, which a few of
them are likely to incur in future. Such sharing has the advantage that the in the
individual share of loss is relatively small. When the sharing is done amongst a large
number of persons, the individual share remains fairly steady from year to year. Such
association of persons for sharing anticipated losses may be brought about voluntarily
by all participants or may be organized by a few individuals or by an insurance
organization.
The function of insurance in its various forms is to protect the few against the heavy
financial impact of anticipated misfortune by spreading the loss among many who are
exposed to the risk of similar nature. While it is not possible to predict which
individuals among the many participants are likely to be the victims of misfortune, it
is often possible to forecast the quantum of the loss, which the group as a whole may
suffer. The sharing of such loss loss among the participants ensure that the victims
are compensated for the loss suffered by them. As a consequence, the heavy and
uncertain loss to some is neutralized by the definite contribution of moderate
amounts, which every participant is required to make.

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Every member who wants to have the benefit of insurance enters into a contract with
the insurer. The evidence of contract is the policy document, which specifies the
obligation of each party. The members who obtain life insurance protection on
agreeing to ‘pay premiums’ are referred to as the policy holders. The insurer makes
administrative and financial arrangements for giving effect to the contract. Such
contracts entered into between the policy holders and the insurers are governed by the
prevailing laws.

Life Insurance Business-definition

Life insurance is the business of effecting contracts of insurance upon human life,
including any contract whereby the payment of money is assured on death (except
death by accident only) or the happening of any contingency dependent on human
life and any contract which is subject to the payment of premiums for a term
dependent on human life and shall be deemed to include.
a) The granting of disability and double or triple indemnity accident
benefits, if so provided in the contract of insurance.
b) The granting of annuities on human life, and
c) The granting of superannuating allowance and annuities payable out of
any fund applicable solely to the relief and maintenance of persons
engaged or who have been engaged in any particular profession, trade or
employment or of the dependents of such persons.

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History of insurance

The insurance sector in India dates back to 1818, when Oriental Life Insurance
Company was incorporated at Calcutta. Thereafter, few other companies like
Bombay Life Assurance Company, in 1823 and Tritron Insurance Company, for
General Insurance, in 1850 were incorporated. Insurance Act was passed in 1928 but
it was subsequently reviewed and comprehensive legislation was enacted in 1938.
The nationalisation of life insurance business took place in 1956 when 245 Indian
and Foreign Insurance provident societies were first merged and then nationalised. It
paved the way towards the establishment of Life Insurance Corporation (LIC) and
since then it enjoyed a monopoly over the life insurance business in India. General
Insurance followed suit and in 1968, the insurance act was amended to allow for
social control over the general insurance business. Subsequently in 1973, non-life
insurance business was nationalized and the General Insurance Business
(Nationalization) Act, 1972 was promulgated. The General Insurance Corporation
(GIC) in its present form was incorporated in 1972 and maintained a very strong hold
over the non-life insurance business in India. Due to concerns of

(a) Reliatively low spread of insurance in the country.

(b) The efficient and quality functioning of the Public Sector insurance companies.

(c) The untapped potential for mobilizing long-term contractual savings funds for

infrastructure.

The (Congress) government set up an Insurance Reforms committee in April 1993.

The Committee submitted its report in January 1994, recommended a phased
program of liberalization, and called for private sector entry and restructuring of the
LIC and GIC. The United Front government moved an insurance bill but it did not
pass. The BJP government moved an insurance bill again in 1998, which had also to

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be referred back to a select committee of parliament. But now the parliament has
given a nod to the Insurance Regulatory and Development Authority (IRDA) bill
with some changes in the original structure.

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Liberalization
The decision to allow private companies to sell insurance products in India rests with
Indian Parliament. Opening up the insurance sector required crossing at least two
legislative hurdles. These were the passage of the insurance Regulatory authority
(IRA) bill, which would make IRA a statutory regulatory body and the amendment of
the LIC and GIC Acts, which would end their respective monopolies.

Subsequently in pursuance to the announcement made by the Union Finance Minister

in his budget speech of 1998-99. The Insurance Regulatory and Development
Regulatory Bill, 1999, was passed by both houses of Parliament. The Bill was
assented to by the president and notified on December 29, 1999. With the Insurance
Regulatory and Development Authority Act, 1999 coming into force the insurance
industry has been opened up for the private sector.

The Act provides for the establishment of a statutory IRDA to protect the interest of
insurance policy holders and to regulate, promote and ensure orderly growth of
insurance industry. The IRDA was formed by an act of the Parliament on April 19,
2000. The IRDA Act also seeks to amend the Life Insurance Act, 1956, the General
Insurance Business (Nationalisation) Act, 1972, and the consequential provisions of
the Insurance Act, 1938 with a view to seizing the exclusive privilege of LIC and
GIC in the life and non-life businesses respectively.

Under the IRDA Act, an “Indian insurance company” will be allowed to conduct
insurance business provided it satisfies the following conditions:

It must be formed and registered under the Companies Act, 1956; the aggregate
holdings of equity shares by a foreign company, either by itself or through its
subsidiary companies, should not exceed 26% paid up equity share capital of an
insurance company.

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Its sole purpose must be to carry on life insurance business or general insurance
business or reinsurance business.

It has also been provided in the IRDA Act that on or after the commencement of the
act no insurer will be allowed to carry on life insurance and general insurance
business in India unless it has a paid up equity capital of rupees 1 billion. For
carrying on the reinsurance business, the minimum paid up equity capital has been
prescribed as Rs. 2 billion. The Reserve Bank of India (RBI) has also issued
guidelines for banks entry into the insurance business.

Following the passage of the IRDA Act, by March 2001, thirteen new life insurers
have received licence from IRDA. Although Private insurance companies have
commenced operations, the nationalised insurance companies are expected to
dominate the market in the near future.

The limiting factor for prospective private insurers will be the extensive and costly
distribution structure required. The new entrants can not expect to duplicate the
extensive distribution network of the nationalised insurance companies. Building a
distribution network is expensive and time consuming.

Policies that provide a money-back policy after reduced durations : 5 or 10 years.

Funds from this payout may be expended or reinvested in other saving programs or in
other life insurance plans.

Medical Insurance

In anticipation of unexpected events that create the need for medical goods and
services, Indian consumers may purchase medical insurance for the following types
of coverage: Heart attacks, strokes, diseases, prolonged illnesses, and loss of limb,

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eye, or other parts of the body due to accident. They may also purchase mediclaim
policies that cover medicines, operations, scanning, X-rays, hospital charges, etc.

Demographics

Country Profile

Population

1996-97 948 million

1997-98 952 million [estimated]

Estimated 2011-12 1,179 million

Average population growth

(1980-92) 2.0%
[1995-2111] 1.8% estimated
Estimated 2011-12 1,179 million

Average population growth

(1980-92) 2.0%
[1995-2111] 1.8% estimated
Production (USD)

Total GDP (1997-98) USD 320 billion

Per Capital GDP USD 418
Average GDP growth (1998) 5.5%

Economic Indicators

Inflation rate (1998) 5.5%

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Foreign direct investment USD 3.7 billion (1997)
USD 4.0 billion (1998)
Estimated growth 7.81% (over the previous year)
External debt USD 92 billion 12/1998 Total)
USD 11 billion (short-term)
Budget deficit USD 81 billion (1997)
Industrial production growth 3.8% (1997-98)
Indian Scenario in Light of the Insurance Sector

Premiums
In 1996, the volume of worldwide life insurance premiums amounted to USD 2.1
trillion with almost 57 percent accounted for by life insurance and the remainder
accounted for by non-life. Industrialized nations accounted for the vast majority
(around 90 percent) of the premiums. The largest life insurance markets were the
U.S. (31 percent and USD 653 billion) and Japan (24.7 percent and USD 520 billion).
India, with annual gross life insurance premiums of USD 3 billion accounted for less
than 0.2 percent of global premiums.

Global Life Insurance Premiums

Regional/Country USD (billions) Percentage

North America 689.2 32.7
Latin America 653.0 31.0
Europe 32.9 1.6
Asia 647.1 30.7
India 3.0 0.15
World 2105.8 100.0

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Growth

Although India averaged 20 percent annual insurance premium growth in the past,
growth has declined to approximately 15 percent recently.

Insurance Penetration

Compared to developed and industrialized countries, India is at the lower end of the
spectrum when it comes to penetration of the market. Among countries in the lower
per capita income band of less than USD 2,000 per annum, India is second only to
Zimbabwe.

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Density
Switzerland is the world’s largest per capita insurance spender (USD 4,663 per
inhabitant), ahead of Japan (USD 4,132 per inhabitant) and far ahead (200 percent
more) of North America, and even further ahead (250 percent more) of Western
Europe. India is ranked near the bottom of the list of countries on insurance spending
with USD 6 per inhabitant.

Population Demographics

India has a young demographic profile; nearly two thirds of the population is under
30. Yet, about 10 percent of the population is over 60. This proportion is expected to
rise sharply. By 2030, the Indian population is expected to stabilize at about 1.1
billion, about 20 percent of which will be over 60. Therefore, a key problem will be
providing support for over 220 million senior citizens—many of whom will be quite
fit and likely to enjoy two decades or more of old age (Source: World Development
Indicators, 1997).

Key Indian Census Statistics

2016 1995 1991 1981 1971
Population (millions) 1,263 934 846 683 548

Urban population [million] 218 159 109 - -

Urban as percent of total 25.7 23.3 19.9 - -
Birth rate [per 1000] [1] 28.3 32.4 37.2 41.2 -
Death rate {per 1000} 9.0 11.4 15.0 19.0 -
Life expectancy at birth
[years] [2] 60.0 58.2 50.5 45.6 -
Infant Mortality rate
[Per 1000 live births] [3] 74 80 110 129 -

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[1] Estimators further predict a sharp drop in this category by the year 2016.
[2] Rough estimates point toward this static reaching 75 years and higher over the
next few decades.
[3] Better medical and health facilities may produce a further drop in this statistic,
with the rate reaching half of 1971 in the near-term.

Age Distribution by Population

Age Group

Population Population
(Millions) Percent (Millions) Percent
[Years] 1991 1981
0-4 110.9 13.1 83.8 12.6
5 – 14 196.3 23.2 179.3 26.9

15-9 91.4 10.8 64.0 9.6

20-24 81.12 9.6 57.3 8.6
25-34 128.6 15.2 93.2 14.0
35-44 93.9 11.1 73.1 11.0
45-54 68.6 8.1 54.7 8.2
55-59 26.2 3.1 16.4 2.5
Above 60 50.8 6.0 43.2 6.5

Total 846.3 100.0 665.0 100.0

The above figures show the changing trends with population in the age group 5-14
dropping as birth rates decline and population in the 20-44 brackets increasing.
Unfortunately, at present only about 6 percent of Indian residents above 20 years of
age are covered by some form of pension scheme. (Employee Provident Fund
Organization data.) More Demographic Trends in traditional societies such as India,
the joint family system provided an insurance umbrella for surviving family
members. In modern times, such arrangements are made increasingly through the
market mechanism by buying insurance. Thus, individuals pay a price (a (premium()

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to insurance companies for such a contractual arrangement, and insurance companies,
in turn, provide compensation if a specified event occurs. By making such contractual
arrangements with a large number of individuals and organizations, insurance
companies can spread risk. This gives insurance a (social ( characteristic, in the sense
that it entails the pooling of individuals risks, such as longevity (i.e. the risk of
outliving other sources of income) and disease and sickness (health insurance). Two
relatively modern trends in the India context affect the life insurance business
significantly. First, with nuclear families becoming the rule, there is a greater demand
for life insurance to cover the breadwinner of the family.
Second, there are greater numbers of the elderly (due to increased life expectancy)
and the elderly are increasingly having to fend for themselves.
Thus, future senior citizens look to plan for their old age, rather than be a burden to
their children. There is a greater awareness of planning for old age and the need for
pensions and annuities. These two trends portend a large and growing market for life
insurance in India. In fact the growth rates of premiums in developed countries are
barely 5 percent, while they are nearly 20 percent in many developing countries. One
factor that is facilitating this development is the increase in the size of India’s (middle
class. (With an estimated size of 250 million, it is at least four times as large as the
current coverage of LIC. Other developments effecting this trend include a healthy
growth rate of the economy (greater savings), proliferation of saving instruments, a
trend toward economic liberalization, greater consumer awareness, and greater
awareness about insurance. Indian’s increased use of insurance can also help solve
another major problem in the country: Inadequate infrastructure. The 1997 Rakesh
Mohan Report documents the need for reliable capital markets to finance
infrastructure projects. Infrastructure projects are almost always long-term. Funds of
long tenure are best raised from contractual savings such as pension funds, provident
funds and life insurance. At present, the total annual accrual to all such funds is about
USD 2.4 billion. The Rakesh Mohan report estimates a current requirement of USD
2,823 billion for infrastructure over the next ten years.

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The bulk of this must be raised domestically, requiring a huge expansion of the life
insurance and pension fund industry. It is evident that two problems—future old age
security and present and future infrastructure needs – can be solved simultaneously.
The Demand for Pension Plans Pension reform in India was initiated when the Union
Finance Minister announced in his 1997 Budget speech that the monopoly in the
issuance of annuities that was enjoyed by the Life Insurance Corporation (LIC)
would end. He indicated that the Unit Trust of India (UTI) would enter pension fund
management and that the LIC and UTI would be free to enter into joint ventures
pension fund management. Also, he was quoted widely as having approved the
(Chilean Experiments). In much of the developed world, pension funds represent an
important form of financial assets in the economy. In India however, with the
exception of employees in the organized sector, few workers have social security
coverage.
Currently there are three forms of old age security: Provident funds, gratuities, and
pensions. The Employee’s Provident Fund Scheme (EPFS), which began in 1952, is
the largest of all provident fund programs. It covers almost 20 million employees in
the organized sector and has over USD 13.2 billion in assets. The fund, which is
administered by a Central Board of Trustees (CBT), is restricted severely in its
choices of investment options. Other provident fund programs include the Coal
Mines Provident Fund Scheme, the Central Government Employee’s Group
Insurance Scheme, and the Public Provident Fund Scheme. Under the gratuity
program, gratuities are distributed upon retirement, death or resignation, and benefits
are in accordance with the Payment of Gratuity Act, 1972. The cost of a gratuity is
entirely borne by the employer and is paid on a cash basis or funded by the employer
during the service period of an employee.
The fund is administered by a trust or contributions are paid to the LIC under its
Group Gratuity Scheme. The third form of social security is pensions. The LIC
provides pension programs, but the premiums received from such programs form
only a very small portion of its total premium income. Institutions that provide

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pensions to their employees either set up an internal fund and purchase a life annuity
from the LIC (only) when an employee retires, or they purchase a group pension
policy from the LIC. This monopoly of the LIC in providing annuities for employers
with private pension arrangements was relaxed in 1997 when Unit Trust of India
(UTI) was also allowed to sell annuities. The lack of growth of Indian pension plans
is due to inadequate tax relief for pension funds combined with restrictions on
pension fund investments that yield low returns. Furthermore the virtual monopoly of
LIC, which reflects a lack of innovation and marketing in the pension plan field, has
ensured that pensions remain a very under developed sector in India.

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Indian Pension Fund Total Assets
(In billions of U.S. dollars)

Pension Program Total Assets

The Employee’s Provident fund

Scheme, 1952 18.82

Public Sector and Armed
Forces Superannuation Scheme 4.70
The Employee’s Pension Scheme,
1995 1.69
The Employee’s Deposit Linked
Insurance Scheme 0.24
Gratuity 5.88
Private Sector Superannuation
Scheme 3.53
Public Provident Fund 2.82
Individual Pension Plans 0.05
Total 37.73
Annual Accruals 2.35
Provident fund yields have been on the order of 12 percent per annum before
inflation. However, these government ordered nominal yields can not be sustained
because the instruments presently available in the market offer less than 12 percent
per annum yields. In any case, the real yield could vanish if inflation returns to the
double digit level common in the 70s and 80s; the average real yield from 1980 to
1990 was only 0.3 percent per annum. Notably, the government is a major part of the
organized sector and most Indian Government employee security programs are on a
pay-as-you-go basis. Another reason for the lack of popularity of pensions in India
(also pointed out by the Insurance Reforms Committee) is that the tax relief allowed
on contributions to pension/annuities is much less in India than in developed

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countries like the U.S. and U.K. Another tax anomaly that needs to be corrected is the
asymmetric treatment of LIC versus employer funded pensions.
Although India started a social security program of sorts almost seventy years ago,
achievements have lagged behind intentions and coverage is still limited. Recent
experiences in manufacturing and services show the advantages of competition to
customers and to Indians at large : Better service, a larger and a better choice of
products, and market deepening and widening. South America’s recent experience
confirms that competition could work wonders wonders for worker’s security in
India, while providing funds for infrastructure and financial market development.

Changes in the Insurance Sector in the Pre & Post Liberalization Scenario

PRE PURCHASE PROCESS

Pre Liberalization Post Liberalization
Motivating Factors for Considering Insurance
* Security 43% * Security 50%
* Savings 14% * Savings 34%
* Tax Rebate 43% * Tax Rebate 16%
Sources of Information on Insurance & Product Awareness
* Friends, Colleagues, Relatives * Additionally from direct mailers,
and consumer meets, internet & media (mass
Agent media & out door)
* Low awareness of several * Rising level of awareness of new products
insurance of both LIC and private companies
products due to poor
communication in
spite of availability
Choice of First Policy
* Money Back * Money Back 42%
60% * Endowment 48%
* Endowment * Whole Life 10%
40%
* Whole Life
0%
Approach of the Agent and Consumer’s Experience

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* Approach of Agent – Informal and
through referral
* Long term family type of
relationship
* Often selling insurance as
commodity
* Average communication skills
* Approach – more professional, sometimes
aggressive
* Proactive in contacting prospects directly,
often has to start from selling concept of
insurance rather than product
* Conducts financial health check up and
then offers suitable products/solutions
* Better communicator & presenter
* Handles larger number of queries

PURCHASE PROCESS

Pre Liberalization Post Liberalization

Role of Agent and Customer’s Experience
 Medical Examination : in  Medical Examination : Both LIC and
several cases details filled by the private company customers undergo through
agent, medical examination very formal medical examination, arranged by agent
perfunctory, sometime no formal  Experience more satisfactory, agent
examination. maintains regular contact in post purchase phase
 Purchase experience with agent also
reasonably satisfactory, but often
agent not in touch later
Product Offering
 Limited product choices and  Products with multiple rider – medical,
less flexible products accident, waiver of premium rider
 Choice often determined by  Pension/retirement benefit plan, security
agent’s push plans.
Discount Offering Practices
 Number of customers getting  Customers getting discount : 33%
discounts : 50% (highest in Delhi)

 Rate of discount : 25% - 50%  Rate of discount : More or less the same
of first year premium
Policy Delivery
 Mode  Mode
- Registered post for LIC, hand - Registered post for LIC
delivered by agent in 23% - Courier for Private companies
cases  In both cases, policy comes in attractive,
 Time taken protective plastic jacket
- Up to 1 week  Time taken LIC Pvt Co.
0% Up to 1 week 5%

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- One month 85%
65% Up to 1 month 77%
- > One month 15%
35% > 1 month 18%
0%

POST PURCHASE PROCESS

Pre Liberation Post Liberalization
Premium Notice Intimation from Company/ Reminder from Agent

 Notice from Company  Reminder from Agent

42% 67%
 Reminder form Agent  Notice form Company 77%
47%
Mode of Premium Payment
 Cash  Cash
43% 41%
 Cheque  Cheque
57% 49%
 Credit Card
10%
 No case of payment through internet was
observed, due to low awareness and security
apprehensions.
Who Deposits Premium
 Self  Self

44% 37%
• Agent • Agent
49% 49%
• Salary saving scheme • Salary saving scheme
7% 14%
Correspondence (other than premium notice) from Company/Agent
• Generally no • Mailers from both private companies and

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correspondence from either company LIC on products and services, greeting cards on
or agent except for late premium birthdays, anniversary and new year
payment reminder from company • Phone calls form private company call
• Agent maintained centers
informal contact with close • Agent in regular contact for offering new
customers products
Delay in Premium Payment
• Incidence of delay high • Incidence of delay low 15%
30% (More regular receipt of premium notice
(Due to irregular receipt of from company / reminder from agent)
premium notice from
company/reminder from agent)

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BENEFITS OF INSURANCE
The various benefits from Insurance are as follows :-
1. Insurance would assist businesses to operate with loss volatility and risk
of failure and provide for greater financial and societal stability from the
growth pangs of an estimated growth rate over 8% in GDP.
2. Besides government provides for social security programs, there is
considerable impact upon the government. Insurance substantially steps in
to provide these services. The effect would be to reduce the strain on the
tax payer and assist in efficient allocation of social resources.
3. Facilities trade, business and commerce by flexible adaptation to changing
risk needs particularly of the burgeoning services sector.
4. Like any other financial institution, insurance companies generate savings
form insurance sector within the economy and make available the same in
well directed areas of economy deserving investment ; a sector with a
potential for business as in case with Indian insurance provides incentive
to develop it all the more faster.
5. It enables the risk to be managed more efficiently through risk pricing and
risk transfers and this is an area that provides unlimited opportunities in
the Indian context for consulting, broking and education in post.-
privatization phase with newer employment opportunities.
6. The insurance industry expertise in understanding losses assists it to share
the experience across the economy this enabling better loss control and
preservation of national assets.
In its risk pricing and investment decisions the insurance industry sets the
tone for investment by others in the economy. Informed assessment by
insurance companies thus signals allocation of resources by others
contributing to the efficiency in allocation. In India visibility of LIC and GIC

25
 have been dwarfed by government’s actions and other high profile
institutions like ICICI, IDBI and UTI.

SIX BENEFITS OF STRONG LIFE INSURANCE MARKET TO

ECONOMIC DEVELOPMENT

A study by the United Nations Conference on Trade and development

(UNCTAD) noted that a strong and efficient life insurance market could aid
in overall economic development in the following ways :
• Life insurance can contribute to social stability by permitting individuals to
minimize financial stress and worry.
• Life insurance can reduce the financial burden on the state of caring for the
aged and for those made financially destitute because of death of a family
breadwinner.
• Though the accumulation from thousands of policyholders of small amounts of
private savings, life insurance can accumulate sums to be invested in public
and private sectors. This can benefit an economy by creating a source of
financing for new businesses, for new homeowners, and for farmers and their
equipment.
• The life insurance business generates employment.
• Life insurance can permit more favorable credit terms to borrow-both
individuals and business-and can decrease the risk of default. Life insurance
can also minimize the financial disruption to business caused by the death of
key employees and owners.
• By making available a variety of employee plans ………life insurance
companies can promote better employee/employer relations and can provide
low-cost benefits to a broad spectrum of persons who may otherwise have been
unable to obtain such protection.

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The UNCTAD study introduction then notes: “Because of the forgoing reasons,
the expansion and development of life insurance has been actively encouraged in
many countries.
MARKET SEGMENTATION

The organization must decide about the homogeneous group which will constitute
the market for the said product. The process of deciding about the particular part
of the total market which is primary target for a given product is called the process
of market segmentation. Most of the organizations normally market a number of
products and, therefore, have to decide about the market segments for each one of
their products. Moreover any one of such articles or products manufactured by the
organization may have different users in the eyes of the consumers and may, thus,
be marketed differently to different market segments. Market segmentation can
also be made on the basis of some important characteristics of consumer groups
such as their requirements, buying habits, etc. thus a market segment does not
denote a group of people having, say, common age or income or staying in a given
area but is deemed to be constituted of persons to whom a particular product
appeals for the fulfillment of a similar need and who are amenable to similar
communication or promotional appeals.

Market segmentation for consumer goods and services can be made on the basis
of either consumer goods or services can be made on the basis of either consumer
characteristics or consumer characteristics or consumer responses.

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Multi attribute Grid to help identify the Target Market for life insurance

Higher
Middle
Low
Wage Agriculturists Traders Professionals
Earners

After identifying the target market segments in a suitable manner, an organization

should formulate appropriate specialty tailored marketing programs suited to the
identified needs of different markets being served or proposed to be served. The
process of market segmentation includes projecting the image of a product in a
particular manner so as to match it with the needs of a homogenous group,
deciding about extension of an organization’s activities to a market it might not
have been operating, as well as developing a special tailor made product so as to
suit the changing or newly perceived needs of an existing or a newly identified
homogenous group of customers. Proper market segmentation represents the
ultimate extension of the marketing concept. It not only starts with consumers and
what they want, but it recognizes the fact that not all people are alike and one
person’s mousse au chocolate is another person’s plain chocolate pudding. It goes
without saying that segmentation of any market is not permanent. Changes in any
factors of the macro and micro environment of the organization will consequently
require the organization to consider alternate methods of segmenting the market.

28
RESISTANCE TO INSURANCE

The concept of insurance being intangible and abstract and somewhat conflicting
with our ingrained patterns of traditions, cultural, benefits, the need is not readily
felt and understood, felt and accepted.

The sacrifice involved in payment of premiums is immediate and real whereas the
benefits are perceived as contingent and distant, leading to a tendency to
procrastinate and delay decision-making.

People resist in taking a life insurance policy, as the commitment is long term.
They prefer investing their money in other avenues like mutual fund, bonds,
shares etc., where they expect higher returns. People do not readily accept the fact
that they are prone to the risk of death.

It is important for the people to understand the importance of life insurance. Risk
coverage is the essential feature of an insurance policy, the investment aspect is
secondary. Now a days insurance companies are offering policies designed purely
for investment purpose, which also have an insurance element in them. Such
policies are attracting people for their investment needs, though the element of
risk coverage is not sufficient.

It is said that the life of every person must be insured up to the human life value
(HLV) of that person. Human life value means the value of his potential net
earnings estimated for the period for which he is going to earn less the amount of
money he spends on his self-maintenance. Therefore it becomes important for
every earning individual to insure himself up to the amount of his HLV. But not
many people understand the relevance of insurance, therefore they resist to buy a
life insurance policy.

29
30
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(LICENCING OF INSURANCE AGENTS) REGULATIONS, 2000

In exercise of power as conferred by sub-section (6) section- 42 and clauses (k),

(i), (m), (n), (o), and (p) of sub-section 114A of the Insurance Act, 1938(4 of
1938), the Authority in consultation with the Insurance advisory Committee,
hereby makes the following regulations, namely :-

Short title and commencement

1. (1) These regulations may be called Insurance Regulatory and Development
Authority (Licensing of Insurance Agents) Regulations, 2000.
(2) They shall come into force on the date of their publication in the official
Gazette.

Definitions.
2. In these regulations, unless the context otherwise requires, -
(a) “Act” means the Insurance Act, 1948
(b) “Approved Institution” means an institution engaged in education and/or
training particularly in the area of insurance sales, services and marketing,
approved and notified by the authority;
(c) “Authority” means the Insurance Regulatory and Development Authority
established under the provisions of section 3 of the Insurance Regulatory and
Development Authority Act, 1999
(d) “Composite Insurance Agent” means an insurance agent who holds a license to
act as an insurance agent for a life insurer and a general insurer;
(e) “Corporate Agent” means a person other than an individual as specified in
clause
(i)

31
(f) “Designated by an insurer, and authorized by the authority to issue or renew
licenses under these regulations;
(g) “Examination Body” means an institution, which conducts, pre-recruitment
tests for insurance agents and which is duly recognized by the Authority;
(h) “Licence” means a certificate of licence to act as an insurance agent issued
under these regulations ;
(i) “Person” means –
(i) an individual;
(ii) a firm
(iii) a Company formed under Companies Act 1956
(j) “Practical training” includes orientation, particularly in the area of insurance
sales, service and marketing, through training modules as approved by the
authority;
(k) “Proposal form” means an application for purchase of insurance product which
shall be the basis of insurance contract.
(l) “Prospect” means a potential purchaser of an insurance product;
(m) “Recognized board or institution” means such board or institution as may be
recognized by any State Government or the Central Government.
(2) All words and expressions used herein and not defined but defined in the
Insurance Act, 1938, or in the Insurance Regulatory and Development Authority
Act, 1999, shall have the meanings respectively assigned to them in those acts.

32
Issue and renewal of licence.
3. (1) A person desiring to obtain or renew a license (hereinafter referred to as
“the applicant”) to act as an insurance agent or a composite insurance agent shall
“proceed’ as follows:-
(a) the applicant shall made an application to a designated person –
(i) in Form IRDA-Agents-VA, if the applicant is an individual;
(ii) in Form IRDA-Agents-VC, if the applicant is a firm or a company;

Provided that the applicant, who desires to be a composite insurance agent, shall
make two separate applications.
(b) The fees payable by an applicant to the Authority shall be as specified in
Regulation
7.
(2) The designated person may, on receipt of the application along with evidence
of the application along with the evidence of payment of fees to the authority, and
on being satisfied that the applicant,-
(i) possesses the qualifications as specified under Regulation 4;
(ii) possesses the practical training as specified under Regulation 5;
(iii) has passed the examination as specified under Regulation 6;
(iv) has furnished the application complete in all respects;
(v) has the requisite knowledge to solicit and procure insurance business; and
(vi) is capable of providing the necessary service to the policy holder;
grant or renew, as the case may be, a licence in Form IRDA-Agents-VB, along
with identity card in Form IRDA-Agents-VZ:
Provided that in the case of a corporate agent, the identity card shall be in Form
IRDA-Agent-VY.

33
(3) If the designated person refuses to grant or renew a licence under this renew a
licence under this regulation, he shall give the reasons therefore to the applicant.

Qualifications and applicant

4. The applicant shall possess the minimum qualification of a pass in 12th
Standard or equivalent examination conducted by any recognised
Board/Institution, where the applicant resides in a place with a
population of five thousand or more as per the last census, and a pass in
10th standard or equivalent examination from a recognized
Board/Institution if the applicant resides in any other place.

Practical Training
5. (1) The applicant shall have completed from an approved institution, at
least, one hundred hours’ practical training in life or general insurance
business, as the case may be, which may be spread over three to four
weeks, where such applicant is seeking licence for the first time to act
as an insurance agent.
Provided that the applicant shall have completed from an approved
institution, at least one hundred and fifty hours’ practical training in
life and general insurance business which may be spread over six to
eight weeks, where such applicant is seeking licence for the first time
to recognize as a composite insurance agent.

Examination.
6. The applicant shall have passed the pre-recruitment examination in life
or general insurance business, or both as the case may be, conducted
by the Insurance Institute of India, Mumbai or any other examination
body.

34
 Fees payable.

7. (1) The fees payable to the Authority for issue or renewal of licence to
act as an insurance agent or a composite insurance agent shall be
rupees two hundred and fifty.
Code of Conduct
8. (1) Every person holding a licence, shall adhere to the code of conduct
specified below :-
(i) Every insurance agent shall -
(a) identify himself and the insurance company of whom he is an
insurance agent;
(b) disclose his licence to the prospect on demand;
(c) disseminate the requisite information in respect of insurance
products offered for sale by the insurer and take into account
the needs of the prospect while recommending a specific
insurance plan;
(d) disclose the scales of commission in respect of the insurance
product offered for sale, if asked by the prospect;
(e) indicate the premium to be charged by the insurer for
insurance
product offered for sale;
(f) explain the prospect the nature of information required in the
proposal form by the insurer;
(g) bring to notice of the insurer any adverse habits or income
inconsistency of the prospect;
(h) inform promptly the prospect about the acceptance or rejection
of the proposal by the insurer;
(i) obtain the requisite documents at the time of filling the
proposal form by the insurer;

35
 (k) render necessary assistance to the policy holders or claimants
or beneficiaries in complying with the requirements for
settlement of claims;
(l) advise every policy holder to effect nomination and
assignment;
(ii) No insurance agent shall –
(a) solicit or procure insurance business without holding a valid
licence;
(b) induce the prospect to omit any material information in the proposal
form;
(c) induce the prospect to submit wrong information in the proposal
form or documents submitted to the insurer;
(d) behave in a discourteous manner with the prospect;
(e) interfere with any proposal introduced by any other insurance
agent;
(f) offer different rates, advantages, terms and conditions other than
those offered by his insurer;
(g) demand or receive a share of proceeds from the beneficiary under
an insurance contract;
(h) force a policy holder to terminate the existing policy and to effect a
new proposal from him within three years from the date of such
termination;
(i) have, in case of a corporate agent, a portfolio of insurance business
under which the premium is in the excess of fifty percent of total
premium produced;
(j) apply for fresh licence to act as an insurance agent, if his licence
was earlier cancelled by the designated person;
(k) become a remain the Director of an insurance company;

36
(iii) Every insurance agent shall, with a view to conserve the insurance
business already procured through him, make every attempt to ensure
remittance of the premiums by the policy holders within the stipulated
time, by giving time to the policy holder orally or in writing;
Cancellation of licence
9. The designated person may cancel a licence of an insurance agent if
the insurance agent suffers, at any time during the currency of the
licence, from any of the disqualifications mentioned in sub-section (4)
of section 42 of the Act, and recover form him the licence and the
identity card issued earlier;
Issue of duplication licence
10. The Authority may issue a duplicate licence replace a licence lost,
destroyed, or multilated on payment of rupees fifty
Non-application to existing insurance
11. Nothing contained in Regulations 4 to 6 of these Regulations shall
apply to the existing agent before the commencement of these
Regulations.

37
38
COMPANY PROFILE

ALLIANZ AG JOINED FORCES WITH BAJAJ Auto Ltd. to offer both

general and life insurance products. Allianz’s joint venture partner is Bajaj
Auto, a respected Indian conglomerate with a strong market presence and
an excellent distribution network. Their two joint ventures are Bajaj Allianz
for General Insurance and Bajaj Allianz for Life Insurance.

Bajaj Auto Ltd. foundedin 1942 by (Late) Shri Jamnalal Bajaj, is India’s
largest two & three-wheeler manufacturer & Exporter producing 1.2 million
units, with Market Capitalization of Rs. 8000 Crore. Bajaj Auto has an
existing network of over 375 dealers across India & a Distributor network
in 60 cities.

Allianz AG is a Leading Global Insurance company Headquartered in

Munch, Germany, established in 1890, with a Global network extends to
over 73 countries across Europe, South 7 Northern America, Africa &
Middle East, Asia pacific, with over 700 subsidiaries & 119,000 employees
Worldwide. At current level company has assets under management of
USD 1000 billion, with global ratings-“AA+” –Standard & Poor’s.

Allianz’ links with India started in the 1920s. Allianz first arrived in India
in 1928 when it opened a branch in Delhi. In September 2001, Bajaj Allianz
received the license from the IRDA to start selling life products.

Bajaj Allianz Life Insurance Company Limited takes this opportunity to

welcome you our commitment to meet the needs of customer through
quality products, dependable service and ethical business standards. Trusted

39
over decades, both Allianz AG and Bajaj Auto have experienced substantial
growth in demanding environment.

PRODUCTS OF BAJAJ ALLIANZ

At present, Bajaj Allianz is offering seven life insurance products, namely

Invest gain (an Endowment plan), Cash Care (Money Back plan), Lifetime
Care (A Whole life plan), Risk Care (Pure Term Insurance plan), Term
Care(Term plan with return of premium), Child Care (Children plan) and
Swarna Vishranti (Deferred Pension Plan). AI these plans are available in
combinations with additional benefits packages to match every individual’s
need.
For each plan category, an individual can choose from among four benefit
packages namely,
• Economy : Basic plan, with no additional benefits
• Protect : Basic plan along with cover against accidental risk-
Accidental Death Benefit, Accidental Permanent Total/Partial
Disability Benefit, Waiver of Premium.
• Health : Basic plan along with cover against health related risks-
Critical Illness, Hospital Cash Benefit.
• Total : Basic plan with cover against both accidental and health
related risks i.e. Both Protect & Health Pack.
These packages are structured keeping in min the varying needs of
insurance and the value-add that to match the flexibility for the policy
holder. These benefits can be attached to all plans offered by Bajaj
Allianz Life.

40
 INVEST GAIN(ENDOWMENT PLAN)

• Product Definition : This is a with profit endowment plan. This is

not the conventional endowment plan, but is specially designed

and offers a unique combination of benefits to develop a sound
financial portfolio. Among many unique benefits, the most
significant is the Family Income Benefit (FIB) that sustains the
family by compensating the loss of income due to death or
permanent disability. The life is covered for a pre-specified term.
• Maturity Benefits : The sum assured plus declares reversionary

bonus plus a possible terminal bonus is paid at maturity.

• Eligibility : The minimum and maximum age of entry is 0(risk

commences at age seven) and 65. Minimum and maximum term

of the policy is 5 and 40 years.
• Death benefits : The death benefit will be the sum assured plus

reversionary bonus plus interim bonus. In addition to these any

amount of sum assured taken, as rider will be paid. In case of
death or accidental total permanent disability, a guaranteed
monthly income of 1% of sum assured (12% per annum) is paid
till the end of policy term or at least for a period of 10 years,
whichever is higher, in case of Family Income Benefit.
Supplementary Death Benefit : (Available in 4 options: Single Cover,
Double Cover, Triple Cover and Quadruple Cover) available with each of the
additional benefit packages mentioned above. The quadruple death benefit is
a unique feature offered by Bajaj Allianz i.e. in event of natural death of
policy holder, the company will pay four times the basic sum assured plus
accrued bonuses.

41
CASH CARE (MONEY BACK PLAN)

• Product Definition : This is a with profit money back plan. Cash Care
plan offers high yield and liquidity ease. This plan also works as a self-
financing scheme on your insurance plan, whereby a substantial part of
the proceeds come back in the form of survival benefits.
Besides giving you regular cash benefits this plan is that it takes care of
your life insurance needs also. Irrespective of the cash benefits already
paid, the risk cover throughout the term of the plan remains equivalent to
the Basic Sum Assured.
• Eligibility : The minimum and maximum age at entry are 12 and 55
years. The maximum age of maturity is 70 years.
• Maturity Benefits : Due date and amount of survival/maturity benefits
depend upon – In case of survival to maturity all declared reversionary
bonuses plus interim bonus plus a possible terminal bonus is paid on
maturity in addition to 50% of sum assured.
Cash care plan offers 75% of the sum assured as four survival benefits at
equal intervals before maturity at an incremental rate.
• Death Benefits : The death benefit will be the sum assured plus
declared reversionary bonuses plus interim bonus, irrespective of the
cash payouts already made. In addition to the above, the company may
pay an interim bonus if death occurs after the most recent bonus
declaration date.

LIFETIME CARE(WHOLE OF LIFE PLAN)

• Product Definition : This is a with profit limited payment whole life

plan. This plan offers a limited premium option to those who seek
towards a long term cover with lower average cost. Lifetime care is
ideal for cover for selecting a premium paying term of your

42
 choice(minimum 10 & maximum 40 years) with a life cover
continuing up to the age 80.
• Eligibility : Minimum and maximum age of entry are 15 & 60.
Maximum premium ceasing age is 80. the minimum term of the policy
is 10 years.
• Maturity benefits : In case of survival to age 80, the sum assured plus
declared reversionary bonuses plus interim bonus plus a possible
terminal bonus is paid. Thereafter the policy terminates.
• Death Benefits : The death benefit will be the sum assured plus
declared reversionary bonuses plus interim bonus. In case of death
after 15 full policy years, the company may pay terminal bonus.
RISK CARE (PURE TERM INSURANCE)

• Product Definition : This is a non profit level premium and single

premium term insurance plan. The policy holder can opt for the
additional riders available.
This is a low cost high risk cover plan with those who are at the higher
end of the income bracket and strong financial holding.
• Maturity benefit : There are no maturity benefits payable under his
plan, as this is a pure risk cover plan.
• Death Benefit : In case of pre mature death during policy term, the
basic sum assured is paid to the nominee.

TERM CARE (WITH RETURN OF PREMIUM)

• Product Definition : This is a non profit level premium or single

premium Term insurance (i.e. providing death cover equal to the sum
assured) with provision for return of the single premium at the time of
maturity as a loyalty payout.

43
 For the policy holder the plan highlights the low cost insurance cover
with tax benefits and return of premium, makes it a cost effective
insurance to the policyholders who look for some maturity proceeds.
• Maturity Benefits : The amount of single premium or the sum total
of the annual premiums will be returned at the time of maturity as a
loyalty pay-out, only if the policy continues for the full term.
• Death Benefits ; IN case of pre mature death during the policy term,
the basic sum assured is paid to the nominee.

Product : Bajaj Allianz Child Care is aimed at providing careful financial

planning to help fulfill the aspirations that people have for their children.
Bajaj Allianz “Child Care” offers a wide array of solutions that allows you
to plan for your child’s future by providing you with as many as 4 distinct
and unique options.

Option 1 : Child Care 21

Option 2 : Child Care 24
Option 3 : Child Care 21 Plus
Option 4 : Child Care 24 Plus

Common features in the 4 Options of Bajaj Allianz “Child Care”

Solutions.

1. Limited Premium Payment Term which means that the premiums

are payable till your child attains age 18 years.

2. Your contributions grow by the way of compounded annual

bonuses, which will be paid to you with the first guaranteed payout
(policy anniversary following age 18 of your child), for in-force
policies. In addition to the annual bonuses, a terminal bonus may
also be paid.

44
3. You are also eligible for Tax Benefits under Section 88 and Section
(10 D) of the Income Tax Act.

4. Assuring Your Child’s Future : In an uncertain world, the prime

interest of your child cannot be jeopardized in any way. Which is

why we have built in some added benefits in all our plans to protect
the interests of your child’s future, by counter insuring you – the
policy holder.

5. Option to Purchase Further Insurance at Maturity : For

ensuring continuity of the valuable insurance protection that the

child was enjoying, we offer the child an option to purchase a with
profits endowment or an equivalent plan from Bajaj Allianz Life
Insurance Company for twice the amount of face value of this
policy, without any medical examination, on the premium rates
prevailing at that time (The application must be made within 6
months of maturity of this policy).
Unique Feature of Bajaj Allianz “Child Care” 21 Plus and 24 Plus

These packages offer you the choice of providing a unique Start of Life
Benefit for your child. For a nominal amount an additional Sum
Assured subject to a maximum limit of Rs. 10 lacs will become
payable to enable the child start his/her professional life smoothly, in
case of an unfortunate death or Accidental Permanent Total Disability
of the Policy Holder during the term of the policy. This benefit will not
be available in the event of accidental permanent total disability after
age 65 of the policy holder.

45
 Death Payout :

In the event of unfortunate death of the child during the policy term,
the payouts shall be as under :
Premiums paid will be refunded without interest
Below 7 years and the policy will terminate.

Sum assured with accrued bonuses will be paid

Above 7 years and below 18 years and the policy will terminate

Above 18 years and below 24 Outstanding payouts will be paid as one lump
years sum and the policy will terminate

SWARNA VISHRANTI

Product :
You can take control of your future and ensure a retirement you can look forward to.
This plan helps you to prudently plan for your retirement today, so that you don’t
have to worry about inflation, declining interest rates and rising medical bills in the
future as also ensures the financial security of your family. The annuity payable
under this plan will ensure that your earnings never stop during your lifetime.
With Bajaj Allianz Swarna Vishranti, you have the option to choose the following
additional benefits :
You have the option to include a Term Cover in your policy, which will provide an
additional life insurance protection at a nominal cost. This also ensures that the
pension available to spouse is further supplemented.

The benefits on Vesting Date (the date you choose to retire)

46
1. The Sum Assured along with all accrued bonuses will be used to purchase an
immediately annuity. The immediate annuity will be purchased at rates prevailing at
that point of time.
2. Option to take lump sum : You have the option to take upto 33% of Sum Assured
plus accrued bonuses on the vesting date as a lump sum. This amount would be tax
free in your hand, as per current tax laws. The balance amount will be used to
purchase an immediate annuity.
3. Open Market Option : You have the option to purchase an immediate annuity from
Bajaj Allianz or from any other company. If the immediate annuity is purchased from
Bajaj Allianz, the amount available for purchase of the annuity will be marked up by
2%. At present, we offer our immediate annuity plan for life, Swarna Raksha, tied to
this plan 4. The minimum installment of annuity from Bajaj Allianz is Rs. 1000/-.
The annuity mode may be changed to make each installment more than the minimum
requirement. If it is still below the minimum, the Sum Assured + Accrued Bonuses
would be paid.

Added Assurance

In the unfortunate event of death during the deferment period, your spouse will have
the option to take the Sum Assured plus accrued bonuses as a lump sum or purchase
an annuity to get regular income for life. For the immediate annuity, your spouse will
have the Open Market Option as well. Bajaj Allianz immediate annuity, with a mark
up of 2% will be available only if the spouse is above 45 years of age. In all ages
lower than 45, the Sum Assured + Accrued bonuses would be paid out.

ADDITIONAL BENEFITS OF ALL THE PLANS

Apart from covering the risk of natural death, these plans also provide for the policy
holder to choose up to five additional benefits. One can select a specific combination
of additional benefits best suited to ones needs.

47
 • Combination – Protect : This is a comprehensive protection against the risk
related to accident and disabilities. This package offers three rider benefits,
namely, Accidental death Benefit, Accidental Total/Partial disablement Benefit
and Waiver of Premium Benefit.
• Combination- Health : The health pack is a comprehensive coverage against
health relateds. It covers Critical illness Benefit and Hospital Cash Benefit.
• Combination – Total : The total pack covers both accidental as well as health
related Benefits.

Riders

a) Family Income Benefit

You can select the unique Family Income Benefit form Bajaj Allianz that
ensures total financial protection for your loved ones. In case of death or
accidental total permanent disability, a guaranteed monthly income of 1% of the
sum assured (12% per annum) is paid till the vesting date or at least for a period
of 10 years, whichever is higher. Moreover, all future premiums are waived.
This unique regular income benefit can act as an important supplement to the
pension available to the spouse in case of death.

b) Comprehensive Accident Protection

This benefit provides comprehensive cover in case of an accident. It comprises
of :

Accidental Death Benefit

Accidents are always sudden and sometimes fetal. You can’t lessen the emotional
shock but you can certainly soften the financial one. Bajaj Allianz Accidental
Death Benefit gives the loved ones something to start with after the permanent loss
of income by paying an amount equal to the Sum Assured. (Subject to a maximum
of Rs. 50,00,000/- under all policies with Bajaj Allianz taken together).

48
Accidental Permanent Total/Partial Disability Benefit
Accidents are unpredictable and so are the consequences. They may lead to a
disability – partial or total. This benefit provides a financial cushion against such
misfortunes. One will get 50% of the Sum Assured in case of partial disability and
100% in case of total disability. (Subject to a maximum of Rs. 25,00,000/- for
partial and Rs. 50,00,000/- for total disability under all policies with Bajaj Allianz
taken together).
Waiver of Premium Benefit
An accident may lead to permanent total disability, limiting one’s ability to earn.
Bajaj Allianz of Premium Benefit is a helping hand when one needs it most. It
waives off all future premiums while keeping the valuable life insurance cover
alive, thus enabling you to life up to your commitments.

d) Critical Illness Benefit

Some illnesses are critical. They not only alter your life’s pattern but also result in
a financial drain. Bajaj Allianz Critical Illness Benefit softens the impact on the
family by paying out the Critical Illness Benefit under the plan immediately, while
other policy benefits continue (excluding Hospital Cash Benefit). We cover 11
critical illnesses. You have the flexibility of choosing Critical Illness cover up to
the basic Sum Assured selected by you (Minimum Rs. 50,000).

(e) Hospital Cash Benefit

The worry of setting hospital bills (room charges) adds to the trauma of
hospitalization. Bajaj Allianz Hospital Cash Benefit reduces this financial burden
and helps recovery with peace of mind.

49
ADDITIONAL FEATURES

Flexibility in Coverage
At Bajaj Allianz, we believe in offering benefits and not just products. We realize
that you are unique and your needs for insurance vary with time. We therefore offer
you the flexibility of inclusion of coverage or exclusion of coverage at each policy
anniversary, subject to conditions relating to such inclusions and exclusion.
“Comprehensive Accident Protection” can be included and excluded at each policy
anniversary. Family Income Benefit, Critical Illness Benefit and Hospital Cash
Benefit can be taken at inception only. CI & HC can be reduced or excluded
subsequently at any policy anniversary. Once reduced or excluded, they can not be
increased or included subsequently.

Increase in risk coverage

Every added responsibility in your life calls for increase in your risk cover. We
provide you the option to increase coverage upto 50% of the basic Sum Assured on
each of the following happy moments in your life.
• Your marriage
• the birth of your first child
• the birth of your second child

50
51
RESEARH METHODOLOGY

According to Clifford woody research comprises defining and redefining problems,

formulating hypothesis or suggested solutions: collecting organizing and evaluating
data; making deductions and reaching conclusions; and at last carefully testing the
conclusions to determine whether they fit the formulating hypothesis. ''Marketing
research is the systematic design, collection, analysis and reporting of data and
findings and relevant to specific situations facing the company." Research is, thus, an
original contribution to the existing stock of knowledge making for its advancement
it is the pursuit of truth with the help of study, observation, comparison and
experiment, in short, the research of knowledge through objectives and systematic
method of finding solution to a problem is research. The systematic approach
concerning generalization and the formulation of theory is also research.
Objective of Research

The main aim of research is to find out the truth which Is hidden and which has
not been discovered yet Though each research study has its own specific purpose,
these can be-
1. To gain familiarity with a phenomenon or to achieve new insights into it
(exploratory and formative research studies).
2. To portray the accurately the characteristics of a particular individual, situation
or a group (descriptive research).
3. To determine the frequency with which something occurs or with which it is
associated with something else.

52
 4. To test a hypothesis of a casual relationship between variables (hypothesis-
testing research)
Types of Research

The basic types of research are as follows --

1. Descriptive Research
The major purpose of this research is description of the state of affairs as it
exists at present.
2. Analytical Research
In this research the researcher has to use facts or information already available
and analyse these to make a critical evaluation of the material.
3. Applied Research:
it aims at finding a solution for an immediate problem facing a society or an
industrial business organization.
4. Fundamental Research:
It is mainly concerned with generalization and with the formulation of a
theory.
5. Quantitative Research:
It is based on the measurement of quantity or amount It is applicable to
phenomenon that can be expressed in terms of quantity.
6. Qualitative Research:
It is concerned with the qualitative phenomenon, i.e. phenomenon
relating to or involving quality or Kind.

53
7. Conceptual Research:
It is related to some abstract ideas or theory
8. Empirical Research:
It is data based research, coming with conclusions, which are capable oT being
verified by the observation and experiment.
9. Diagnostic Research:
Such a research follow a case study method or in depth approaches to reach the
basic casual relation.
10. Exploratory Research:
The objective of this research is the development of hypothesis rather their
testing.

Research Design:
A research design is the arrangement of conditioned for collection and analyses
of data in a manner that aims to combine relevance To the research purpose which
economy in procedures.

So it is clear from the above definition thai vnry first step in the process of
marketing research is systematic design which can be defined as a specification of
methods and procedure for acquiring the information needs to structure or solve
problems.
The main characteristics of research design can summarize in two words
• Anticipation
• Specification

54
Functions of research design:

1. Statement of evidence needed to solve the problem.

2. Anticipation of what will be done with data to provide answer to problems
3. Specification of evidence from where it will he obtained and how.
4. Statement of basic schemes whereby answers will be reveaied and validated.
5. A guide for the calculation and approval of the feasibility and cost of the
project.
6. Provision of blue print or plan Eor guiding the work

Types of research design

There are three types of research design:

1. Research design in case of exploratory research studies.

2. Research design in case of descriptive and diagnostic research studies.
3. Research design in case of hypothesis testing research studies.

RESEARCH DESIGN IN CASK OF EXPLORATORY RESEARCH

STUDIES:
Exploratory research studies are also termed as formulative research studies. The
main purpose of such studies is that of formulating the problem for more precise
investigation or of developing the working hypothesis from an operational point of
view the major emphasis is such studies is on the discovery of ideas and insights as
such the research appropriate for such studies more flexible enough to provide
opportunity for considering different aspect of the problem under study inbuilt
flexibility in research design is needed because the research problem, broadly defined
initially, is transformed into one with more precise meaning is exploratory studies
which fact may necessitate changes in the research procedure for gathering relevant
data Generally, the following three methods in the context of research design for such
studies are talked about.

55
 (a) The survey of concerning literature happens to be the most simple and
fruitful method of formulating precisely the research problem or developing
hypothesis and their usefulness be evaluated as a bases for further research. It may
also be considered whether the already stated hypothesis suggest new hypotheses. In
this way the researcher may review and build upon the work already done by the
others, but in oases where hypotheses have not yet been formulated, his track to
review the available material for deriving the relevant hypotheses from it.

Besides, the bibliographical survey of studies, already made in one area of

interest may as well as made by the researcher for precisely formulating the problem.
He should also made an attempt to apply concepts and theory developed in different
research context to the area in which he is himself working. Some times the works of
creative writers also provide a fertile ground ' for hypotheses formulation and as such
ma be looked into by the researcher.

(b) Experience survey means the survey of people who have had practical
experience with the problem to be studied. The object of such a survey is to obtain
insight into the relationship between variables and new ideas relating to the research
problem. For such survey people who are competent and can
contribute new ideas may be carefully selected may then be interviewed by the
investigator. The researcher must prepare an interview schedule for the systematic
questioning of information But the interview must ensure flexibility in the sense that
the respondent should be allowed to raise issues and questions which the investigator
has not previously considered. Generally the experience collecting interview is likely
to be long and may last few hours. Hence it is often considered desirable to send the
copy of the questions to be discussed to the respondents for doing some advance
thinking over the various issues involved so that at the time of interview, they may
able to contribute effectively. Thus, an experience survey may enable the researcher

56
to define the problem more concisely and help in the formulation about the practical
possibilities for doing different types of research
(b) Analysis of insight stimulating examples is also a fruitful method for
suggesting hypotheses for research It is particularly suitable in areas where there is
little experience to serve as a guide. This method consists of the intensive study of
selected instances of the phenomenon in which one is interested. For this purpose the
existing records, if any, may be examined. The unstructured interviewing may take
place, or some other approach may be adopted Attitude of the investigator, the
intensity of the study and the ability of the researcher to draw together diverse
information into a unified interpretation are the main features which make this
method an appropriate procedure for evoking.
Experience indicates that for particular problems certain types of instances are more
appropriate then others. One can mention few examples of insight stimulating cases
such as the reactions of marginal individual, the study of
individuals who are in transition from one stage to another, the reaction of individuals
from different social strata and the like, in general cases that provide sharp contrasts
or have striking features are considered relatively more useful while adopting this
method of hypotheses formulation Thus in an exploratory formulation research study
which merely leads to insights or hypotheses. It must continue to remain flexible so
that many different facets be a problem may be considered as and when they arise
and come to the notice to the researcher

57
Qs. 1) What is your source of Income?

Business 52%

Govt. Job 18%

Others 30%

58
Qs. 2) What do your prefer to invest?

Govt. Security 27%

Mutual Funds 18%

Shares 21%

Insurance 22%

Others 11%

59
Qs. 3) How much can you per year?

<10000 37%

10000-15000 26%

15000-20000 17%

>20000 20%

60
Qs. 4. On which criteria do you invest ?

<10000 37%

10000-15000 26%

15000-20000 17%

>20000 20%

61
Qs. 5) On which criteria do you invest?

Expert 43%

Friendly Advice 27%

Guess Work 30%

62
Qs. 6) Do you have life insurance policy ?

Yes 32%

No 68%

63
Qs. 7) What type of plan would you prefer ?

Endowment 25%

Pure Risk 09%

Money Back 18%

Term Insurance 48%

64
Qs.8) What attribute attracts you most while taking an insurance plan ?

Tax Relief 30%

Risk Cover 08%

Children’s Education 22%

Investment 25%

Others 05%

65
Qs.9) For what duration would you like hold the policy ?

> 5 Year 22%

5-10 year 52%

10-20 year 17%

> 20 year 09%

66
Qs.10) Which insurance companies brand would you perfer ?

Lic 68%

Others 32%

67
Qs.11) What is your main expectation from the insurance company ?

Security 38%

Innovative Product 06%

Good Return 19%

Service 20%

Flexibility 09%

Liquidity 08%

68
Qs. 12) Are you satisfied by the service offered by the isurance company ?

Yes 60%

No 40%

69
Qs.13)What additional benefit do you want from your plicy ?

Accidental 38%

Critical Illness 22%

Start of Life 19%

Family Income Benefit 21%

70
Qs.14) Awareness of Bajaj Allianz Life Insurance Co. in India ?

Rural 2%

Semi-Urban 5%

Urban 39%

Metro City 54%

71
72
LIFE INSURANCE PRODUCTS

INTRODUCTION
The nature of needs for life assurance varies from person to person. Apart from the
basic need to insure one’s life, there may be a specific need for fixed sums of money
for other purposes. Savings through insurance can be broken into two main
component parts viz., life insurance protection and Survival benefit.
MAJOR CLASSIFICATION
a. Endowment assurance plan
b. Whole life assurance plan
c. Term assurance plan
d. Plans for children
e. Pension plans
The plans are discussed below –
a. Endowment assurance plan
This is the most popular form of assurance at the present time. Under this plan the
sum assured is payable on the date of maturity i.e., at the end of the fixed term of
years or on the death of the life assured, should that occur previously.
The plan is an ideal combination of both family protection and the savings element
and answers most of the needs of the insuring public. It provides cover against the
death of the bread-winner of the family during the term of the policy and offers an
accumulated savings at the end of the term should the life assured survive the term of
the policy.
Endowment plan is really a combination of life assurance and investment.
b. Whole life assurance plan
This plan is a permanent contract, premiums may be payable throughout life or up to
a certain age and sum assured is payable only on death. The element of protection is
the dominating element and that of provision for old age is totally absent.

73
This type of assurance provides a large amount of life cover than any other
permanent type of life assurance and is therefore the most inexpensive type of
permanent protection for dependants. It has the disadvantage that the premiums
continue in old age when the ability to pay will be less.
c. Term assurance plan
This plan is designed to cater to the need of the public who require risk cover for a
short period. The sum assured is payable only on death of the life assured during the
term of the policy. There is no maturity value to a pure term plan.
Insurers are now offering two types of term assurance plans-with return of premium
and without return of premium. In a with return of premium plan all the premiums
paid by the policy holder during the term of the policy are returned on maturity,
without any interest. Whereas nothing is paid on maturity of a pure term assurance
plan.
Convertible term assurance plans are also being offered by many insurers, designed
to meet the needs of young people who are on the threshold of their careers and have
prospects of increase in income after a short period. The objective is to provide
maximum insurance at minimum cost and at the same time offer a flexible contract
which can be altered into endowment assurance after some years.
d. Plans for Children
Many of the insurance companies are offering special plans for children under which
money is provided at various intervals or as choosen according to the needs. These
policies also provide for protection in case of a sudden demise of the guardian. The
amount of money saved through such a plan may be utilized for the education or
marriage of the child.
e. Pension plans
Plans under this envisage payment of annuity. An annuity is a periodic payment
made, in exchange for purchase money, for the remainder of the lifetime of the
named person or for a specified period irrespective of the duration of human life. The
annuities do not participate with the profit of the insurer.

74
All the insurers, except LIC are offering deferred annuity plans which provide
monthly pension after the vesting date during the lifetime of an annuitant and also
allow for return for a lump sum if opted. LIC is offering immediate annuity where
under in return for a lump um consideration called purchase price, the proposer will
receive monthly pension.
Comparative Chart of Endowment plans

Name of the Bajaj Allianz Aviva Birla Sunlife HDFC

Company Standard
Name of the Invest Gain Life Saver Flexi Save Endowment
Plan Plus Assurance
Plan
Min/Max 0/65 18/65 1/65 12/60
Age of
Enttry
Max age of 70 70 80 75
Maturity
Min/Max 5/40 5/? 5/30 10/30
Term
Min Sum 50000 ? 75000 20,000
Assured
Max Sum No Limit ? No Limit No Limit
Assured
Riders Family ADB, CIB, ADB, CIB ADB, Double
Income Accidental Term Benefit, Sum Assured,
Benefit, permanent Accidental CIB, WOP.
ADB, total/partial permanent
Accidental disability total/partial
permanent benefit, disability
total/partial Hospital benefit
disability Cash.
benefit, CIB,
WOP,
Hospital Cash
Indicative Rs. 3,950 Rs. 5000 Rs. 5,004 Rs. 4,835
Annual
Premium for
Male (30),
Term 20, SA
100,000

75
Comparative Chart of Endowment plans

Name of the ICICI LIC Om Kotak SBI Life

Company Prudential Mahindra
Name of the Save ‘n’ Bhavishya Endowment Sudarshan
Plan Protect Jeevan Plan
Min/Max 0/60 18/60 18/65 12/65
Age of
Enttry
Max age of 70 70 75 70
Maturity
Min/Max 10/30 5/55 10/30 5/30
Term
Min Sum 50000 20,000 20,000 25,000
Assured
Max Sum 10,00,000 1 Crore No Limit 1 Crore
Assured
Riders ADB, ADB, WOP, ADB, ADB,
Accidental Accidental Accidental Accidental
permanent permanent permanent permanent
total/partial total/partial total/partial total/partial
disability disability disability disability
benefit, CIB, benefit. benefit, Term benefit, CIB,
Major Benefit, CIB, Term
Surgical Life
Riders Guardian,
WOP.
Indicative Rs. 4,847 Rs. 4,796 Rs. 4,640 Rs. 4,336
Annual
Premium for
Male (30),
Term 20, SA
100,000

76
Comparative Chart of Money Back plans

Name of Allianz Birla HDFC ICICI LIC Om Kotak

the Bajaj Sunlife Standard Prudential Mahindra
Company
Name of Cash Care Flexi Cash Money Cash Back Jeevan Kotak
the Plan Flow Back Surabhi Money
Plan Back Plan
Min/Max 14/50 1/65 12/60 16/55 14/50 18/60
Age of
Entry (20
Yr. term)
Max age 70 75 75 75 70 75
of
Maturity
Terms 15,20,25,3 10,15,20,2 10 to 30 15,20 12,15,20,2 15,20,25
available 0 5 5
Min Sum 50,000 75,000 25,000 75,000 40,000 Min Pm
Assured yearly
Rs. 4,000
% of SA 125% Unit 120% 130%
Paid Linked
(20yr.
term)
Riders ADB, ADB, CIB, ADB, ADB, ADB, ADB,
Accidental Term Double Accidental WOP, Accidental
permanent Benefit, Sum permanent, Family permanent
total/partial Accidental Assured, total/partia Benefit total/partial
disability permanent CIB, l disability disability
benefit, total/partial WOP. benefit, benefit,
CIB, WOP, disability CIB, Term
Hospital benefit. Major Benefit,
Cash. Surgical CIB, WOP
Riders.
Indicative Rs. 6,157 Rs. 5,856 Rs. 7,585 Rs. 6,900 Rs. 6,280 Rs. 7,120
Annual
Premium
for Male
(30),
Term 20,
SA
100,000

77
Comparative Chart of Term plans

Name of the Bajaj Allianz Bajaj Allianz Aviva Birla Sunlife

Company
Name of the Term Care Risk Care Secure Life Term Plan
Plan (with return (without
of premium) return of
premium)
Min/Max 18/50 18/50 18/55 18/55
Age of
Enttry
Max age of 65 65 65 70
Maturity
Min/Max 5/40 5/40 5/25 5/25
Term
Min Sum 100,000 100,000 300,000 250,000
Assured
Max Sum 10,00,000 10,00,000 50,00,000
Assured
Riders ADB, ADB, WOP, ADB, ADB, CIB,
Accidental Accidental Accidental Accidental
permanent permanent permanent permanent
total/partial total/partial total/partial total/partial
disability disability disability disability
benefit, CIB, benefit, CIB, benefit, benefit.
WOP, WOP, Hospital
Hospital Cash Hospital Cash Cash.
Indicative Rs. 1,100 Rs. 528 Rs. 7,320 Rs. 1,128
Annual (SA-10 Lac) (SA-2 Lac)
Premium for
Male (30),
Term 20, SA
100,000

78
Comparative Chart of Term plans

Name of the HDFC ICICI LIC Om Kotak

Company Standard Prudential Mahindra
Name of the Term Life Guard Bima Sandesh Kotak Term
Plan Assurance (premium Plan
Plan back plan)
Min/Max 18/60 18/50 18/50 18/60
Age of
Enttry
Max age of 65 65 65
Maturity
Min/Max 5/40 5/25 5/25 5/30
Term
Min Sum 200,000 50,000 -
Assured
Max Sum 10,00,000 1 Crore -
Assured
Riders ADB, Double ADB, WOP, ADB, WOP ADB, CIB,
Sum Assured, Accidental Accidental
CIB, WOP permanent permanent
total/partial total/partial
disability disability
benefit, WOP benefit.
Indicative Rs. 510 Rs. 834 Rs. 1,075 Rs. 1,200
Annual approx
Premium for
Male (30),
Term 20, SA
100,000

79
Comparative Chart of Children plans

Name of the Bajaj Allianz Birla Sunlife HDFC ICICI

Company Standard Prudential
Name of the Child Care Smart Scholar Children’s Smart Kid
Plan Plan
Min/Max 0/13 1/8 0/12
Age of
Enttry
Max age of 20/50 18/55 18/60 20/60
Maturity
Min/Max 10/25 15/20 10/25 10 to 25
Term
Min Sum 100,000 75,000 - 100,000
Assured
Max Sum 50,00,000 10,00,000 - 30,00,000
Assured
Min 4,850 - - 8,000
Premium
Riders WOP, Start of Double WOP Income
life benefit, Accident benefit,
Family cover, ADB, Accidental
income, CIB, Term, death &
convertible at AT/PD. disability
maturity. benefit, WOP
Indicative Rs. 10,454 Rs. 8,064 Rs. 10,000 Rs. 11,108
Annual approx. approx.
Premium for
Child (2),
Parent (30),
Term 20, SA
200,000

80
Comparative Chart of Children plans

Name of the Om Kotak LIC SBI Life

Company Mahindra
Name of the Child Advantage Komal Jeevan Scholar
Plan Plan
Min/Max 0/17 0/10 0/15
Age of
Enttry
Min/Max age - -/60 20/60
of Policy
Holder
Min/Max 10/30 16/26 7/21
Term
Min Sum - 100,000 50,000
Assured
Max Sum 25,00,000 25,00,000 50,00,000
Assured
Min 4,000 2,850
Premium
Riders Life Guardian Double Accident Double Accident
Benefit, Death Benefit, CIB Death Benefit,
Accidental AT/PD, WOP.
Disability
guardian Benefit,
WOP
Indicative Rs. 11,504 Rs. 16,421 Rs. 6,566
Annual
Premium for
Child (2),
Parent (30),
Term 20, SA
200,000

81
Comparative Chart of Whole Life plans

Name of the Om Kotak LIC SBI Life Birla LIC

Company Mahindra Sunlife
Name of the Lifetime Life Long Flexi Single Aajeevan
Plan Care Whole life Premium Bima
Plan Whole life Policy
Min/Max 15/60 18/60 18/65 18/70 15/60
Age of
Entry
Max 80 85 100 Single 80
premium Premium
Ceasing Age
Min Term 10 - 5 5
Min Sum - - 75,000 250,000 30,000
Assured
Max Sum - - No Limit 50,00,000 No Limit
Assured
Riders ADB, ADB, CIB, Accidental ADB, ADB
Accidental Hospital permanent Accidental
permanent Cash, total/partial permanent
total/partial Accidental disability total/partia
disability permanent benefit, l disability
benefit, CIB, total/partial Terminal benefit,
WOP, disability illness CIB, WOP
Hospital benefit. benefit.
Cash.
Indicative Rs. 2,687 Rs. 6,700 Rs. 8,964 - Rs. 3,224
Annual
Premium
for Male
(30), Term
20, SA
100,000

82
Name of the Bajaj Allianz AVIVA HDFC ICICI
Company Standard Prudential
Name of the Swarna Pension Plus Personal Forever Life
Plan Visranti Pension (RP)
Min/Max 18/65 18/65 18/60 18/60
Age of
Enttry
Max age of 45/70 50/70 50/70 50/70
Maturity
Min/Max 5/40 5/52 10/35 5/30
Term
Min/Max Y/HY/Q/M Y/HY/Q/M Y: Rs. 1800 Min SA: Rs.
Contribution YP YP 50000
Rs. 5000 Rs. 6000
Guaranteed - 103% , 104%, No SA @ 3.5% p.a.
Returns 105% for the first year
Death SA+Acc. SA+Acc. Contribution SA+Acc. Bonus
Benefit Bonus Bonus refunded @
8% p.a.
Extra - Yes No No
additional Min Rs. 1000
contribution
Surrender Y 1/2/3 : 0 ? Y1/2/3:0 Y1/2/3:0
value 30% of Y4++:50%P- Y4++:35%PP –
Premium 1st 1st
YP
Free choice Yes Yes Yes Yes
of annuity
provider

83
Comparative Chart of Pension plans

Name of the ICICI LIC Om Kotak SBI Life

Company Prudential
Name of the Life link (RP) New Jeevan Kotak Lifelong
Plan Suraksha Retirement Pensions (RP)
Plan
Min/Max 18/60 18/65 18/60 18/65
Age of
Enttry
Min/ Max 50/70 50/69 45/65 50/70
Vesting age
Min/Max 10/52 2/35 5/30 2/52
Term
Min/Max SA: Rs. YP:Rs. 2,500 Y/HY/Q Rs. 3,000 p.a.
Contribution 40,000 YP:Rs. 4,000 (Min. Rs. 500)
Guaranteed No No only in No 4% for first
Returns case of death seven years
Death 100%/105% P Contribution SA-P PPA
Benefit PPA paid @ 5% Due+PPA
p.a.
Extra No No Max 25% SA Yes
additional pa Min. Rs. 500
contribution
Surrender Y1/2/3:0 Y1/20, Y3+ Policy term
value Y4++:50% P- +:90%P 1st more than 6Y:
1st YP YP+VB Y1/2/3:0
Y4++:85%PPA
Free choice Yes No Yes Yes
of annuity
provider

84
85
Questionnaire Designing

Since the questionnaire had a very important role in the project the following things
were kept in mind while designing it –
The language used was simple and easy to understand.
The sequencing of the questions was done carefully to elucidate the respondents in
answering the questions.
The questions used were open-ended so as to extract maximum information.
Most of the questions used were objective type, so as to make it easy and less time
consuming to answer.
The questions were carefully framed to gather the right kind of information needed.

The questionnaire was divided into two parts.

General information :

This part aimed at collecting the personal data of the respondents. This information
was very important as it helped in interpreting the insurability of the respondent. The
questions used in this part were –
1. Name
2. Address & Phone No.
3. Age
4. Gender
5. Marital Status
6. Educational Qualification
7. Occupation
8. Income
9. Family size

86
GENERAL INFORMATION

1. Name :

2. Address :

3. Phone No.

4. Age :

5. Gender : M/F

6. Marital Status Married/Single

7. Educational Qualification :
Matriculate/Intermediate/Graduate/P.G./Any other

8. Occupation : Govt. Service/Private Service/Self Employed

9. Income per month :

<Rs. 7500/Rs. 7501-Rs. 12500/Rs. 12501-Rs. 17500

10. Family size (if married)

a) Spouse : Working/House wife
If working, where ?
b) No. of children & their age

c) Any other dependants :

87
 RESEARCH SPECIFIC INFORMATION :

This part of the questionnaire aimed at finding out the insurance status, preference
and awareness of the respondents. It also attempted to find out the potential market of
life insurance. The questions asked were as follows-

1. Do you have an insurance policy ?

This question would help to analyze the number of respondents who were already
insured, as against those not insured.
(a) If yes, then what type of policy & from which insurer ?
This question attempts to find out the preference of people as to the type of
insurance policy and the insurance company.
(b) What was your purpose of taking that policy ?
This question finds out the motivating factors that a person keeps in mind while
buying a life insurance policy.
(c) If no, then don’t you feel the need of taking a policy ?
This question is targeted towards the uninsured group of people. If a person was
not insured then what was the reason behind it.

2. Are you planning to take a policy in near future ?

This question aims at finding out the potential market of life insurance.
(a) If yes, then please specify the type of policy.
This question helps find out the preference of people towards a particular type
of policy in the future market.
(b) While taking a policy, what are the essential features you will keep in mind ?
This again finds out the motivating factors behind buying a life insurance
policy.

88
The next set of question aim at finding about the market awareness of Bajaj
Allianz. They analyze the reach of Bajaj Allianz among the people and the
percentage and type of market share it has acquired.

1. Do you have any Insurance policy ?

Yes/No

a) If yes, then what type of policy and from which insurer ?

b) What was your purpose of taking that policy ?

Risk coverage/Savings/Investment/Tax rebate/Special event

Management

c) If, no, then don’t you feel the need of taking a policy ?

2. Are you planning to take a life insurance policy in near future ?

Yes/No

a) If yes, please specify the type of the policy.

Term/Endowment/Whole life/Money back/Child Care/Pension

b) While taking a policy, what are the essential features you will keep in
mind ?

Risk coverage

Tax benefit

Loan coverage

Premium charged

3. Have you heard about Allianz Bajaj Life Insurance Co. Ltd.
Yes/No

89
 4. Which of the Bajaj Allianz policies have you heard about ?
Lifetime Gain
Invest Gain
Child Gain
Cash Gain
Risk Gain
Term Gain
Swarna Vishranti
5. Have you subscribed to any of these ?
Yes/No
6. If yes, which one ?
Policy term
Policy cover
Riders (if any)

7. Do you think that Bajaj Allianz is one of the leading Insurance company
in our country ?
Yes / No
8. Are you ever convinced by any Bajaj Allianz consultant to have an
Insurance Policy ?
Yes/ No
9. Are you satisfied with any Bajaj Allianz Insurance Policy ?
Yes / No
10. Are you satisfied with the returns of Bajaj Allianz policy ?
Yes / No
11. Do you think that selling Insurance policy is good as career ?
Yes / No
12. Please give your valuable suggestion what do you want in your Life
Insurance Plan

90
 DIAGRAMMATIC REPRESENTATION OF THE DATA

The limiting factor for prospective private insurers will be the extensive and costly
distribution structure required. The new entrants cannot expect to duplicate the
extensive distribution network of the nationalised insurance companies. Building a
distribution network is expensive and time consuming.

Potential in the insurance sector

Scope of insurance business in India

The Malhotra Committee estimated that the insurance penetration in India is to the
extent of about 25% of the insurable population. As of 1999-2000, LIC’s insurance
Premium Income was approximately Rs. 32,000 crore. It is observed that currently
LIC has about 10 crore policies in force, which contribute a Premium of about 6% of
the GDS (Gross Domestic Savings ) of households in India.
Based on a report by the confederation of India industries (Cll), it is anticipated that
this figure of 10 crore policies in force is likely to double in the next decade. By the
year 2010, the premium income is expected to account for 18% of the GDS,
amounting to Rs. 512,000 crore.

Number of Policies in Force

1999
200 2001
150 2002
Policies in
100 2004
Force (Mn.)
50
2010

2006
2006

0
2002

2008
1999

Year
2010

91
 Life Premium as a proportion of
Gross Domestic Savings

20
15
%GDS 10
5 %GDS
0
1999 2002 2006 2010
Year

The Decision Process

In general, the Indian community is very cautious when making business decision.
Consequently, Indian consumers will scrutinize vigorously products and services
offered by insurance companies. In addition, Indian consumers prefer a a wide-range
of options. Below, currently available options for various types of insurance are
presented. Given uncertainty about life’s duration and about increasing costs and
responsibilities, consumers may opt for a life insurance policy with the following
features.
• Policies that meet an untimely accident or a premature death whereby
dependents are able to continue meeting financial obligations for some initial
period. This is very important because, in may Indian families, there is only one
earner in the household.
• Policies that meet an untimely accident involving the loss of a limb,
creating a major disability.
• Policies that avail owners of a tax rebate, a fixed rate of return on the
insurance investment, and a nontaxable payout upon maturity.
• Policies that provide a bonus it insured has not withdrawn any sum of
money during the insured period, (certain sums can be withdrawn after the policy
has been in effect for specified periods of time).

92
• Policies that provide for a housing loan at very favorable interest rates
after the insurance policy has been in effect for a specified duration.

93
Type of Policies Preferred

Types of Policies
Type of Policy No. of Policies Percentage
Endowment 88 50.87%
Money Back 73 42.20%
Pesion 6 3.47% Endowment
Child Care 2 1.16% Money Back
Term 2 1.16% Pesion
Whole Life 2 1.16% Child Care
Term
Whole Life

This survey shows that a majority of the people prefer Endowment and Money-back
policies. The preference for endowment policies though is more than money-back
plans. People in the private

sector have also started showing preference for pension plans. Term plans & Whole
life plans preference is quite low.

Motivating factors while considering Insurance

94
 Security 25.60%
Saving 24.40%
Investments 21.30%
Tax Rebate 16%
Special event
Management 12.70%

30.00%
25.00%
20.00%
15.00%
Series1
10.00%
5.00%
0.00%

nt
e
ng

ts
y

at
rit

ve
en
vi

eb
cu

le
Sa

tm

R
Se

ia
es

ec
Ta
v
In

Sp

The distribution above shows that while buying a life insurance policy, a person
considers the security factor primary. It shows the highest percentage rating. A next
thing that a person considers is savings and investment element in the policy. A
person is concerned about the amount of returns that he would get on his money at
the time of maturity. Special

Sectoral Distribution of the Survey

95
 No. ofPercentage
inviduals Coverage
Govt. Service 23 20.90%
Self
Coverage Area
Employed 19 17.27%
Private
Service 68 61.81%
Govt. Service
Self Employed
Private Service

Out of a total sample survey of 110, the maximum respondents were from the
private sector, which covered 61.81% of the survey. Government sector employees
covered were 20.90% and self-employed people were 17.27% An attempt was made
to include a fair mix of people of all the three sectors so that the study the shows
relevant outputs.

events like education of children, marriage of daughter, providing for old age
pension etc. are also important considerations while buying a life insurance policy.

96
Market awareness of Bajaj Allianz

Awareness Percentage
Yes 71.43%
No 28.57%

Market Awareness of BjAz

Yes
No

97
Percentage-wise Breakup of Respondents to buy Insurance policy in Future

Yes (Wants to buy

Insurance in future ) 59.52%
No (do not want to
buy insurance in
future ) 40.48%

Yes
No

In the survey conducted around 60% of the respondents feel the need of insurance in
near future as they are either underinsured or uninsured. Around 40% of the
respondents feel that they do not need insurance in future as they are either
sufficiently insured or do not feel the need of getting insured.

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Company Preference of individuals

Name ofNo. of
Company Policies Percentage
LIC 85 65.38%
Allianz Bajaj 4 3.07%
ICICI
Prudential 4 3.07%
Birla Sunlife 2 1.53%
Metlife 1 0.76%
HDFC
Standard 1 0.76%
Max. New
York 1 0.76%
Aviva 1 0.76%
No Policy 31 23.84%

Policies of Various Companies

LIC
Allianz Bajaj
ICICI Prudential
Birla Sunlife
Metlife
HDFC Standard
Max. New York
Aviva
No Policy

They survey conducted showed that the maximum number of existing policies
were from LIC, which shows 65.38% of the market share. Out of the private insurers
ICICI Prudential & Allianz Bajaj 3.07% of the market. Rest of the insurers also

99
shares a small portion of the market. The research shows the chunk of market share
enjoyed by LIC.

Chair Person/Managing Director

Chief Executive Officer

Chief Operating Officer

Heads of various Departments

Head HRD Head Sales. Head Finance Head IT Head Under

& Marketing writing

TRAINING OPERATION

Delhi Chennai Kolkata Mumbai

Lucknow
*
(RSM) (RSM) (RSM) (RSM) (RSM)

Branch Manager

National Sales Training Manager

**
RTM RTM RTM RTM RTM

Regional Trainers Office

Marketing

Branch Supervisor Sales Team

Manager

Support Staff Insurance Care

100
Consultant
*
RSM – Regional Sales Manager
**
RTM- Regional Training Manager

CONCLUSION

101
The study aimed at finding out the market preference and makes a comparative
analysis of the products of various life insurers as compared with those of Bajaj
Allianz.

It was found that most of the people give preference to the products of Life Insurance
Corporation of India. LIC being a government backed undertaking and having been
in operation since a long time, it has gained the faith of people. Though now with the
privatization of the insurance sector the thinking pattern of people is changing day by
day, but we can not expect overnight miracles. People are buying life insurance from
private players because the services provided by them are of a better quality than that
of LIC. A person buys insurance basically for the purpose of risk coverage. If the
claims are not settled in time, it would defeat the whole purpose of insurance.

Another thing that was found was that there is a slow market shift. Traditionally,
people were taking up endowment and money back plans largely. But nowadays,
products such as pension plans and child care plans are much in demand. The pension
market is estimated to grow at a fast pace.

It was found that the market awareness of Bajaj Allianz is poor. Among private
insurers, people are more conversant with names such as ICICI and HDFC. They can
relate these to insurance, as they are already into financial services. On the other
hand, Bajaj Allianz is mostly related to Bajaj automobiles.

Bajaj Allianz policies were found to be competitive with those of other insurers. The
premium rates of Bajaj Allianz are quoted to be quite low as compared with those of
other insurers. The Family Income Benefit and Hospital Cash Benefit are unique in
their plans.

102
SUGGESTION

103
Bajaj Allianz launched its pension plan Swarna Vishranti recently. It was an
appreciable step as the company recognized the potentials of the growing pension
market. This product would be helpful in tapping this market.

During the study, it was found that though the individuals in high-income bracket
were aware of Bajaj Allianz as a life insurer, the awareness among the mass was
found to be poor. People can not relate to Bajaj Allianz as a life insurer. They relate
to it to bajaj automobiles. Therefore, it is imperative that the company advertises
extensively.

Another trend that was found that people were more attracted towards unit linked
products, which many insurers are offering. People perceive insurance more as an
investment avenue than for risk coverage. Therefore companies like Birla sunlife,
Aviva, ICICI Prodential, Om Kotak Mahindra are offering unit linked products which
are attracting the customer. Thus it may be perceived that customers are getting
attracted towards unit-linked plans. Bajaj Allianz can also launch a policy, which
shall be a pure unit linked plan.

104
BIBLIOGRAPHY
• BOOKS – C.R.Kothari, RM method & techniques,
105
• Insurance marketing by Mr. Satish Pandey,

• WWW.Bajajallianzlife.insurance.com,

• Business Today,

• Economic Times,

• Business Standards,

• IRDA. Com

• Annual Report of Bajaj Allianz Insurance Co. Ltd.,

106
107
ANNEXURE

The Bajaj Allianz CashGain Plan

Your needs for insurance protection will vary at different stages of life. Sometime,
you may need to release a part of your savings from insurance commitments and
utilize it for other pressing needs. The Bajaj Allianz CashGain is ideal for those who
want to reap and enjoy the benefits of their life insurance policy at regular intervals
during their lifetime.

Bajaj Allianz CashGain is a specially designed plan that offers a host of additional
benefits you may choose to develop a sound financial portfolio for your family.
Among the many unique benefits, the most significant is the Family Income
Benefit(FIB) that sustains the family by compensating the loss of regular income due
to death or permanent disability.
Available as :
• Bajaj Allianz CashGain Economy : The basic package.
• Bajaj Allianz CashGain Gold : With double protection
• Bajaj Allianz CashGain Diamond : With triple protection
• Bajaj Allianz CashGain Platinum : With quadruple protection

A Uniform Life Cover

Besides giving you regular Cash Benefits, this plan takes care of your life insurance
needs also. On death during the term of policy, the following would be paid
irrespective of the Cash Benefits already paid:
• Bajaj Allianz CashGain Economy : Sum Assured + Bonuses
• Bajaj Allianz CashGain Gold : Double Sum Assured + Bonuses
• Bajaj Allianz CashGain Diamond : Triple Sum Assured + Bonuses

108
 • Bajaj Allianz CashGain Platinum : Quadruple Sum Assured + Bonuses

Choice of Terms

Keeping your convenience in mind, we offer you the widest range of terms : 15, 20,
25 and 30 years.
The availability of Cash Benefits will be as under :
No. of years at the end of which Cash Benefit Becomes Due
Term 1st Cash 2nd Cash 3rd Cash 4th Cash Maturity
Benefit Benefit Benefit Benefit Benefit
15 3 6 9 12 15
20 4 8 12 16 20
25 5 10 15 20 25
30 6 12 18 24 30

Additional Protection for you and your family

a) Family Income Benefit (FIB) – The Ultimate Protection – For Your Loved
Ones

b) Comprehensive Accident Protection

Accidental Death Benefit

Accidental Permanent Total/Partial Disability Benefit

Waiver of Premium Benefit

c) Critical Illness Benefit (CI)

d) Hospital Cash Benefit (HC)

Flexibility in Coverage

Increase in risk coverage

Every added responsibility in your life calls for increase in your risk cover. We
provide you the option to increase coverage upto 50% of the basic Sum Assured
on each of the following happy moments in your life:
109
• Your marriage
• The birth of your first child
• The birth of your second child
Premium Payment Mode

For your convenience, we have provided 3 premium payment modes that can be
Yearly, Half-Yearly and Quarterly. We also offer a monthly premium payment
mode with salary deduction schemes. The premium for frequencies other than
yearly mode is the annual premium multiplied with the frequency factor (0.51 for
the half yearly mode, 0.26 for the quarterly mode, and 0.09 for the monthly
mode).

Tax Benefits
Premium paid are eligible for Tax Exemption under Section 88 of the Income Tax
Act. The periodic Cash benefits, maturity and death proceeds are Tax-Free under
Section 10 (10D) of the Income Tax Act. The premiums for the Critical Illness
Benefit and the Hospital Cash Benefit will be eligible for Tax Exemption under
Section 80 (D) of the Income Tax Act.

Surrender
While we do not encourage surrender of a policy as it breaks your security cover,
we realize the importance of availability of cash at a short notice in some
emergencies. Therefore, we provide you with a choice of surrendering the policy.
The guaranteed minimum surrender value in case of surrender before the first
survival benefit is 30% of all premiums paid excluding the first year premium and
the premiums for all additional benefits. The guaranteed minimum surrender value
in case of surrender after the first survival benefit is 30% of all premiums paid
after receiving the latest survival benefit excluding the premiums for all additional
benefits.

110
 What is Bajaj Allianz HealthCare?
This is a three-year health insurance plan, providing comprehensive health cover
with life insurance benefit. You can choose the amount of cover for each benefit
separately in multiples of the minimum cover amount, subject to a maximum
multiple of 10.
Feature Minimum Cover
Life Cover Rs. 10,000
Hospital Cash (HC) Equal to Room charges (Max. Rs. 500
per day and Max Rs. 1000 per day in
ICU), Maximum Rs. 30,000 in a
policy year
Post Hospitalisation Benefit 50% of claim settled for HC per day,
maximum 5 days in a policy year
Surgical Benefit Equal to surgical expenses, Rs. 50,000
per policy year
Critical Illness Cover Rs. 50,000 during the policy term
Additional Permanent Rs. 50,000 payable on total disability
Total/Partial Disability and Rs. 25,000 payable on partial
(APT/PD) disability
Who is Eligible ?
All people who are between 18 and 57 years of age.

Premium Payment of Mode

For your convenience we have provided Yearly and Monthly premium modes. The
monthly mode is available only under Salary Savings Schemes (SSS) and ECS. The
minimum premium is Rs. 1000 for yearly mode and Rs. 100 for monthly mode.

Tax Benefits as per current tax laws

Contributions upto Rs. 10,000 will be eligible for tax benefits under Section 80D, as
per applicable tax laws.

15 day Free Look Period

Within 15 days from the date of receipt of the policy, you have the option to review
the terms and conditions and return the policy, if you disagree to any of the terms &

111
conditions, stating the reason for your objections. You will be entitled to a refund of
the premium paid, subject only to a deduction of a proportionate risk premium for the
period on cover and expenses incurred on medical examination and stamp duty
charges.

The Bajaj Allianz UnitGain Plan

The Bajaj Allianz UnitGain comes with a host of features to allow you to have the
best of all worlds-Protection and Investment with flexibility like never before.
Some of the key features of this plan are :
• Guaranteed death benefit
• Choice of 6 investment funds with flexible investment management: you can
change funds at any time.
• Attractive investment alternative to fixed-interest securities
• Provision for full/partial withdrawls any time after three full years premiums
are
paid.
• Unmatched flexibility – to match your changing needs.

Benefits available under the plan

Death Benefit : In case of unfortunate premature death the beneficiaries are entitled
to the Sum Assured less withdrawls or the bid price of units, whichever is higher. If
the age of the insured person is less than 7 or above 70, then the bid price of units is
paid.

Cash withdrawl option :

There is no maturity date for this plan. There is a 100% surrender penalty on full or
partial surrender of units during the first three years. Anytime after payment of 3 full
years premiums, you may withdraw money, depending on your requirements,
through partial or complete surrender of units. In case of partial withdrawl, a

112
 minimum balance of Rs. 10,000 (at Bid Price) across all funds must be maintained,
and the minimum withdrawl amount is Rs. 1000 (at Bid Price).

Flexibility – to manage your investments

We offer you the flexibility to manage your investments. Initially, you can allocate
the premium into the 6 funds that are available in a proportion of your choice.
Subsequently, depending on the performance of funds, you can switch between funds
and also change the allocation of premium to various funds. We allow you three free
switches every policy year subject to a minimum switching amount of Rs. 5000 or
the fund value, whichever is lower. You can also change the proportion of premium
allocation to various funds at each policy anniversary.

Additional Protection for you and your family

You have the option to add the following five additional benefits, providing total
protection against uncertainties.
• Accidental Death Benefit
• Accidental Permanent Total/Partial Disability Benefit
• Critical Illness Benefit (CI)
• Hospital Cash Benefit (HC)
• MahilaGain Rider Benefit (for women only). Refer the MahilaGain brochure.

Premium Payment Mode

Partial and Full Withdrawls

Free Look Period

Within 15 days from the date of receipt of the policy, you have the option to review
the terms and conditions and return the policy, if you discharge to any of the terms &
conditions, stating the reasons for your objections. You will be entitled to a refund of
the premium paid, subject only to a deduction of a proportionate risk premium for the

113
 period on cover and the expenses incurred on medical examination and stamp duty
charges.
Days of Grace

Before the payment of full 3 years premiums, premiums must be paid when due to
keep the policy in-force. Till such time the company receives 3 full years premiums,
30 days of grace period will be allowed for the yearly, half yearly and quarterly
modes and 15 days of grace will be allowed for the monthly mode.
Termination of the Policy

The policy will terminate on occurrence of any of the following :

• The units in the policy are fully surrendered
• The account value becomes Rs. 100/- or less
• The account value is not sufficient to support the Cost of Insurance deductions
for a period of three months.
• The death of the Life Assured.

The “Bajaj” Allianz Lifetime Care” Plan

You and your family deserve the very best in life, and the good life you lead should
last a lifetime. However, one cannot always avoid the unpleasant surprises, and
sometimes misfortunes, in life. The “Bajaj Allianz Lifetime Care” Plan provides you
with the comfort that your near and dear ones will continue to live their life without
financial worries, even when you are not around.
What does the “Bajaj Allianz Lifetime Care” offer you

This plan not only provides insurance protection, but also ensures that your valuable
savings grow by way of compounded annual bonuses. In addition, a terminal bonus
may be paid on survival till age 80 for in-force and fully paid up policies. In case of
death after 15 full policy years, the company may pay a terminal bonus for in-force
and fully paid-up policies.

114
What are the 5 additional benefits ?

a) Accidental Death Benefit

Accidents are always sudden and sometimes fatal. You can’t lessen the emotional
shock, but you can certainly soften the financial one. Bajaj Allianz Accidental Death
Benefit gives your loved ones something to start with after the permanent loss of your
income by paying double the basic Sum Assured plus Accrued Bonuses, subject to a
maximum of Rs. 10,00,000/- under all policies with Bajaj Allianz taken together.

b) Accidental Permanent Total/Partial Disability Benefit

Accidents are unpredictable and so are the consequences. This may lead to a
disability-partial or total. The Bajaj Allianz Accidental Permanent Total/Partial
Disability Benefit provides a financial cushion against such misfortunes.
Type of disability Benefit
Permanent Partial Disability 50% of the Sum Assured
Permanent Total Disability 100% of the Sum Assured

* subject to a maximum of Rs. 5,00,000/- under all policies with Bajaj Allianz taken
together
** subject to a maximum of Rs. 10,00,000/- under all policies with Bajaj Allianz
taken together

c) Waiver of Premium Benefit

An accident may lead to permanent total disability limiting your ability to earn. Bajaj
Allianz Waiver of Premium Benefit is a helping hand when you need it most. It keeps
your insurance cover alive by waiving future premiums and enables you to live up to
your commitments.

d) Critical Illness Benefit

Some illnesses are critical. They not only alter your life’s pattern but also result in a
financial drain. Bajaj Allianz Critical Illness Benefit softens the impact on your

115
 family by paying out the Critical Illness Benefit under the plain immediately, while
other policy benefits continue (excluding Hospital Cash Benefit).
We cover 11 Critical Illness. This benefit is available for the premium payment term
only.
e) Hospital Cash Benefit
The worry of setting hospital bills(room charges) adds to the trauma of
hospitalisation. Bajaj Allianz Hospital Cash Benefit reduces this financial burden and
helps you to recover with peace of mind. This benefit is available for the premium
payment term only.
Flexibility in Coverage
At Bajaj Allianz, we believe in offering benefits and not just products. We realize
that you are unique and your needs for insurance vary with time. We therefore offer
you the flexibility of including the following benefit combination at each policy
anniversary.
Increase in risk coverage
Every added responsibility in your life calls for increase in your risk cover. We
provide you the option to include additional death coverage of 50% of the Sum
Assured on each of the following happy moments in your life.
• your marriage
• the birth of your first child
• the birth of your second child
This additional coverage is not subject to underwriting.
Eligibility
Conditions Lifetime Care Lifetime Care-
Economy Protect/Health/Total
Minimum Age at 15 18
Entry
Maximum Age at 60 50
Entry
Maximum Premium 80 80
Ceasing Age

116
Minimum Term 10 10
Minimum 5000/- for yearly, 2500/- for Half Yearly. 2000/- for
Premium(Rs.) Quarterly and 700/- for Monthly*

*by salary deduction only

Indicative Annual Premium Rates * for Lifetime Care Economy

Sum Assured
Term Rs. 3,00,00 Rs. 5,00,000 Rs. 10,00,000
15 years 9096 15000 29760
20 years 7581 12475 24710
25 years 6810 11190 22140
30 years 6405 10515 20790

* The rates are for a healthy 30 year old male.

Premium Payment Mode
For your convenience we have provided 3 Premium Payment Modes that can be
yearly, half-yearly or quarterly. We also offer a Monthly Premium Payment Mode
with salary deduction schemes.
Tax Benefits
Premiums paid are eligible for Tax Exemption under Section 88 of the Income Tax
Act and maturity and death proceeds are Tax Free under Section 10(10D) of the
Income Tax Act.
Surrender
While we do not encourage surrender of a policy as it breaks your security cover, we
realise the importance of availability of cash at short notice in some emergencies.
Therefore, we provide you with a choice of surrendering the policy, provided 3 full
years premiums have been duly paid.

117
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