A

PROJECT REPORT ON
“RECRUITMENT OF FINANCIAL CONSULTANTS”
WITH
HDFC STANDARD LIFE INSURANCE LTD.
SUBMITTED TO:
RAJASYHAN TECHNICAL UNIVERSITY,KOTA
In the partial fulfillment of
Master of Business Administration
(2007-09)
SUBMITED BY:
HARI SINGH
DEEPSHIKHA COLLEGE OF
TECHNICAL EDUCATION
ACKNOWLEDGEMENT
I take great pleasure to thank and acknowledgement the permission
and allowance by Mr. AJAY SHARMA, CHANNEL
DEVELOPEMENT MANAGER, HDFC STANDARD LIFE
INSURANCE, JAIPUR REGION and his help and inspiration
provided. I extend a whole hearted thanks to Mr. SUMER SINGH under whom I worked
and learned a lot and for enlightening me with their knowledge and experience to grow
with the corporate working.
Their guidance at every stage of the Project enabled me to successfully complete this
project which otherwise would not have been possible without their constant
encouragement and motivation, without the support it was not possible for me to
complete the report with fullest endeavour.
I would also like to extend my thanks to my College Faculty Members Mr. Satish
Sharma all my colleagues in the company who supported me in carry out my operation
successfully and generously and provided me vital information/ training regarding the
my project objective.
HARI SINGH
MBA – III
2
s

PREFACE
I had undergone a practical training under HDFC STANDARD
LIFE INSURANCE, JAIPUR REGION. It was a good exposure
for me to undergo training in such a company to get the knowledge and experience
regarding life insurance and recruitment of capable of life insurance advisors.
Summer training is one of the major experiencing component of the knowledge, gain of
relevant of information with respect to marketing and dealing with situations in a
professional course like M.B.A. where a professional person faces a problem in a field. I
was able to get familiarized with the customer relationship and got to know how a
company measures to resolve their grievances and service them to the maximum for
future prospect and success. Field component like survey, generation of questionnaire
with respect to marketing helped me a lot and would be a great support in future.
“It is good to have enthusiasm but it is essential to have training.
Training can be in all way of life.” Thus I would say that this
training was beneficial educative & good exposure to me, which will certainly help in my
near future. This project was designed with respect to this company. The project made
me to get the enhanced knowledge regarding life insurance concept and the process of
recruiting of financial consultant.
Table of contents
S. No.
Particulars
Pages
1.
INTRODUCTION
5-14
2.
LIFE INSURANCE
15-20
3.
LIFE INSURANCE INDUSTRY
21-26
4.
ABOUT THE COMPANY – HDFC STANDARD LIFE
27-36
5.
PRODUCTS
37-46
6.
LIFE INSURANCE IN INDIA
47-53
7.
LIFE INSURANCE AGENT & FINANCIAL
CONSULTANT RECRUITMENT
54-59
8.
RESEARCH METHODOLOGY
60-64
9.
MARKET SURVEY
65-75
10. SWOT ANALYSIS
76-79
11. CONCLUSION
80-81
12. RECOMMENDATIONS
82-84
13. BIBLIOGRAPHY
85-86
14. QUESTIONNAIRE
87-91
15. GLOSSARY
92-109
*****
INTRODUCTION - INSURANCE

The insurance sector was opened up in the year 1999 facilitating the entry of private

players into the industry. With an annual growth rate of 24.31 percent and the largest

number of life insurance policies in force, the potential of the Indian insurance industry

is huge. The year 1999 saw a revolution in the Indian insurance sector, as major

structural changes took place with the ending of Government monopoly and the

passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting

entry restrictions for private players and allowing foreign players to enter the market with

some limits on direct foreign ownership.

According to the CSO, the insurance and banking services’ contribution to the country’s

GDP is 7.1 percent out of which the gross premium collection forms a significant part.

Life insurance penetration in India was less than 1 percent till 1990-91. During the ‘90s,

it was between 1 and 2 percent and from 2001 it was over 2 percent. In 2003-04 it was

2.4 percent.
6

The impetus for increase is due to the active role played by IRDA in licensing private

players and taking positive steps in increasing the insurance awareness among the

people. Besides, the insurance companies in general and private insurance companies

in particular, are reaching out to untapped potential in rural areas with aggressive

campaigns.

Innovative products, smart marketing, and aggressive distribution have enabled

fledgling private insurance companies to sign up Indian customers faster than anyone

expected. Life insurance is viewed as a tax saving device. People are now turning to the

private sector for providing them with new products and greater variety for their choice.

The improvement in FDI flows reflected the impact of recent initiatives aimed at creating

an enabling environment for FDI and for encouraging infusion of new technologies and

management practices. The Government’s proposal to increase the FDI cap in the
insurance sector from the present 26 percent to 49 percent has raised expectations

among the international insurance companies.

7
Insurance – Defined:

Insurance is a contract in which sum of money is paid to the assured in consideration of

insurer’s incurring risk of paying a large sum upon a given contingency.

-- Justice Tindall

“Insurance is a contract by which one party for a compensation called in the premium

assumes particular risks of the other party and promises to pay to him or his nominee a

certain sum of money on a specified contingency.”

-- E.W.Fitterson

Insurance may be described as social device whereby a large group of individuals, through

a system of equitable contribution, may reduce certain measurable risk of economic loss

common to all members of the group.”

--Encyclopedia Britannica

The above definitions clearly shows that insurance is a cooperative device to spread the

loss caused by a particular risk over a member of persons who are exposed to it and

who agree to insure themselves against risk. Insurance does not eliminate risk but only

reduces the financial burden, which may be very heavy.

8
 s
Evolution of insurance

In the days of yore insurance was in its crude form and was cooperative and voluntary

in nature. When, where and how it originated is still a matter of research in one way or

the other was prevalent in olden days. We can trace its history from the evolution

society from hunting stage to the modern industrial age. A word “YAGCHHEM” occurs

in the world’s most ancient Hindu Scripture Rig Veda.

The word “YAGCHHEM” means insurance. It clearly indicated that about four thousand

years ago insurance was prevalent in its crude form. It was cooperative and voluntary in

nature. People formed different groups of organizations to share the loss among

themselves incase of a particular risk. Each member contributed some amount to a

common fund to meet the unforeseen losses. Sometimes they also contributed equally

to compensate person as and when he suffered a loss. Traces of insurance in the

ancient world are also found in the form of marino trade loans or carriers contracts

which included an element of insurance.

9
Evidence is on records that arrangements embodying the idea of insurance were made

in Babylonia and India at quite an early period. References were made to the concept of

insurance in Manu’s code “Manu Smrity”. It was akin to “Yagakshemo” of Rigveda in

which the well being and security of the community was aimed at. However, there is no

evidence that insurance in its present farm was practiced prior to twelfth century.
The Nature Of Insurance
The insurance has the following characteristics which are observed
in cases of life, marine, fire and general insurance.
1.Sharing of risks: Insurance is a cooperative device to share the

financial losses which might befall on an individual or his facility on the occurrence of

specified event such as sudden death of the bread winner, marine perils in marine

insurance, fire in the fire insurance and theft insurance etc. in the case of general

insurance.
10
2.It is a cooperative device: A large number of persons agree to
share the loss arising sue to a particular risk. Thus, insurance is a
cooperative device.
3.Value of risk: The risk is evaluated before insuring to charge the
amount of share called premium.
4.Payment made at contingency: The payment is made at a
certain contingency insured. The Contingency may be death, fire,
marine perils etc.
5.Amount of payment: The amount of payment depends upon
policy insured.
11
Functions of Insurance
A) Primary Functions
1.Insurance provides certainty: Insurance provide certainty of
payments at the uncertainty of losses. The element of uncertainty
is reduced by better planning and administration.
2.Insurance provides protection. The risk will occur or not, when

will occur and how much loss will be there. There are uncertainties of happening of time

and amount of losses. The main function of the insurance is to provide protection

against the losses.

3.Risk sharing: Risk is uncertain and therefore, the loss arising

from the risk is also uncertain. All business concern faces the problem of the risk and if

the concern is big enough the handling of risk becomes a specialized function.

Insurance, as a device is the outcome of the existence of various risks in our day to day

life. It spreads the whole losses over a large number of persons who are exposed by a

particular risk.
12
B. Secondary Functions
1.Prevention of loss: Prevention is always better than cure.

Prevention is by far the best solution to the problem of risk. It is more effective and

cheapest method to avoid the unfortunate consequence. But sometimes prevention is

not always possible and Effective.

2.It provides capital: It provides the capital to the society. For plan

development of country there is a great need for huge amount of capital. Now days, the

insurance companies are rendering positive help in the development of trade,

commerce and industry of the country.

3.It improves efficiency: Achievement of goals, it improves not

only his efficiency of the masses is also advanced. The insurance eliminates worries

and miseries of losses as death and destruction of property care free person can devote

his energies for better.

13
4.It ensures the welfare of society: “Insurance is a saga of service

and security” to thee society. Security of the life and property given by insurance bring

peace of mind to the insured. The investment in LIC in welfare schemes like electricity,

housing, water supply, agro industry estates are able to solve many problems in India.
5.It helps in economic progress: Insurance provides an initiative

to work hard for the betterment of the masses. Life insurance involves the element of

saving investment through small savings. And which has been growing in recent yrs at

an annual rate of about Rs. 400 crs, life insurance is not a mere business organization,

it has nobler welfare responsibilities in the development of the economy.

14
*****
15
LIFE INSURANCE
Definition

The life insurance contract embodies an agreement in which broadly stated, the insurer

undertakes to pay a stipulated sum upon the death of the insurer to a designated

beneficiary.” --J.H.MAGE E

Life insurance contract may be defined whereby the insurer, in consideration of premium

paid either in lumpsum installments, undertakes to pay an annuity on the death of the

insured of a certain number of years.”

--R.S.SHARMA

A contract of life assurance is that in which one party agrees to pay a given sum on the

happening of a particular event contingent upon the duration of human life in consideration

of immediate payment of a smaller sum by another. BUNYON’S LAW OF LIFE INSURANCE

Some outstanding advantages of life insurance
1.) It is superior to an ordinary saving plan: this is so because unlike
other saving plans, it offers full protection against risk of death.
16
2.) Insurance encourages and enforces thrift : many people may not have the will power

to continue a long term saving plan which they may formulate regular payments in face

of money other uses to which their limited income could be put.

3.) Easy installments and protections against creditors: the proceeds of a life insurance

policy can be protected against the claims of the creditors of life assured by affection a

valid assignment of the policies.

4.) Tax relief: the income tax act exempts from tax that part of an individuals income

which is devoted to payment of life insurance premium.

5.) Estate duty: life insurance is the most practicable way to ensure definite payment on

one’s death without having resort to conversion of realizable asset at a loss.

17
Why Life Insurance
?Life Insurance has come a long way from the earlier days when it

was originally conceived as a risk covering medium for short periods of time, covering

temporary risk situations, such as sea voyages. As life insurance became more

established, it was realized what a useful tool it was for a number of situations, including

-
a) Temporary needs / threats: The original purpose of life
insurance remains an important element, namely providing for
replacement of income on death etc.
b) Regular Savings: Providing for one's family and oneself, as a

medium to long term exercise (through a series of regular payment of premiums). This

has become more relevant in recent times as people seek financial independence for

their family.
c) Investment: Put simply, the building up of savings while
safeguarding it from the ravages of inflation. Unlike regular saving
18
products, investment products are traditionally lump sum
investments, where the individual makes a one off payment.
d) Retirement: Provision for later years becomes increasingly

necessary, especially in a changing cultural and social environment. One can buy a

suitable insurance policy, which will provide periodical payments in one's old age.
Let us take an example to understand the need for insurance:
Mr. Pranay is 45 years of age and self-employed. His wife Nandini,
who is a housewife, looks after their two children aged 3 and 7 years.

They stay in a rented accommodation, where the rent is 15,000 rupees per month. Mr.

Atul has taken up a loan of Rs. 2 lakh. His monthly earnings on average are 40,000

rupees. Mr. Atul passes away in an unfortunate road accident. What are some of the

financial implications of his death on his family? There may be several financial

implications on his family. Some of these are:

a) The monthly income, previously provided by Mr. Atul would stop.
19
b) His wife and children may have to seek financial assistance from
other relatives.
c) His wife may not have enough money to pay back the loan of Rs.

2 lakhs.

d) The family may have to move into a cheaper accommodation.

e) His widow may have to take up work to earn money.

f) The education of his children may suffer.

This simple example illustrates the impact premature death can have on a family, where

the main earner has no life cover. Had Mr. Atul taken life cover, his family would not

have faced such hardships in the event of his unfortunate death. A simple life insurance

policy could have provided Mr. Atul's family with a lump sum that could have been

invested to provide an income equal to all or part of his income.

In simple words, insurance protects against untimely losses. Insurance has been found
useful in the lives of persons both in the short term and long term. Short term needs like
sudden medical costs and long term needs like marriage expenses etc can be met with
using life insurance.

20
*****
21
INSURANCE INDUSTRY
India Insurance Industry: - New Avenues For Growth

With an annual growth rate of 15-20% and the largest number of life insurance policies

in force, the potential of the Indian insurance industry is huge. Total value of the Indian

insurance market (2004- 05) is estimated at Rs.450 billion (US$10 billion). According to

government sources, the insurance and banking services’ contribution to the country's

gross domestic product (GDP) is 7% out of which the gross premium collection forms a

significant part.

The funds available with the state-owned Life Insurance Corporation (LIC) for

investments are 8% of GDP. Till date, only 20% of the total insurable population of India

is covered under various life insurance schemes, the penetration rates of health and

other non-life insurances in India is also well below the international level. These facts

indicate the of immense growth potential of the insurance sector.

22
The year 1999 saw a revolution in the Indian insurance sector, as major structural

changes took place with the ending of government monopoly and the passage of the

Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions

for private players and allowing foreign players to enter the market with some limits on

direct foreign ownership.

Though, the existing rule says that a foreign partner can hold 26% equity in an

insurance company, a proposal to increase this limit to 49% is pending with the

government. Since opening up of the insurance sector in 1999, foreign investments of

Rs. 8.7 billion have poured into the Indian market and 21 private companies have been

granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling

private insurance companies to sign up Indian customers faster than anyone expected.

Indians, who had always seen life insurance as a tax saving device, are now suddenly

turning to the private sector and snapping up the new innovative products on offer.
23
The life insurance industry in India grew by an impressive 36%, with premium income

from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff

competition from private insurers. RNCOS’s report, “Indian Insurance Industry: New

Avenues for Growth 2012”, finds that the market share of the state behemoth, LIC, has

clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new

policies in 2004-05. But this was still not enough to arrest the fall in its market share, as

private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29

billion in 2003-04.

Though the total volume of LIC's business increased in the last fiscal year (2004-2005)

compared to the previous one, its market share came down from 87.04 to 78.07%. The

14 private insurers increased their market share from about 13% to about 22% in a

year's time. The figures for the first two months of the fiscal year 2005-06 also speak of

the growing share of the private insurers. The share of LIC for this period has further

come down to 75 percent, while the private players have grabbed over 24 percent.
24
There are presently 12 general insurance companies with four public sector companies

and eight private insurers. According to estimates, private insurance companies

collectively have a 10% share of the non-life insurance market.

Though the focus of this market research report is on the potential growth on the Indian

Insurance Sector, it also talks about the market size, market segmentation, and key

developments in the market after 1999. The report gives an instant overview of the

Indian non-life insurance market, and covers fire, marine, and other non-life insurance.

The data is supplied in both graphical and tabular format for ease of interpretation and

analysis. This report also provides company profiles of the major private insurance

companies.
Report Highlights:
•

Gains of Liberalization in Indian Insurance Sector

•

Indian Insurance Market Segmentation By Products

25
•

Size of the Market and Market Share Of Life Insurers, In INR

(crore)
•

Market Share Of Non-Life Insurers

•

Forecast of Life Insurance Growth Up to 2012

•

Forecast of Non-Life Insurance Growth Up to 2012

•

Market Revenue of Both Public and Private Insurers

•

Policies and Measures Taken By IRDA To Develop The

Insurance Market
•

Research and Development Activities

•

Regulation of insurance and reinsurance companies

•

Major Challenges That Indian Insurance Sector is Facing

•

Profiles of the Major Players

26
*****
27
HDFC STANDARD LIFE INSURANCE
The Introduction

Standard Life Insurance Company Ltd. is one of India's leading private insurance

companies, which offers a range of individual and group insurance solutions. It is a joint

venture between Housing Development Finance Corporation Limited (HDFC Ltd.),

India's leading housing finance institution and a Group Company of the Standard Life,

UK. HDFC as on March 31, 2007 holds 81.9 per cent of equity in the joint venture.
Our key strengths
Financial Expertise: As a joint venture of leading financial services
groups, HDFC Standard Life has the financial expertise required to
manage your long-term investments safely and efficiently.
Range of Solutions: We have a range of individual and group

solutions, which can be easily customised to specific needs. Our group solutions have

been designed to offer you complete flexibility combined with a low charging structure.
28
Track Record so far: Our gross premium income, for the year

ending March 31, 2007 stood at Rs. 2, 856 crores and new business premium income

at Rs. 1,624 crores. The company has covered over 8,77,000 lives year ending March

31, 2007

HDFC and Standard Life first came together for a possible joint venture, to enter the Life

Insurance market, in January 1995. It was clear from the outset that both companies

shared similar values and beliefs and a strong relationship quickly formed. In October

1995 the companies signed a 3 year joint venture agreement. Around this time

Standard Life purchased a 5% stake in HDFC, further strengthening the relationship.

The next three years were filled with uncertainty, due to changes in government and

ongoing delays in getting the IRDA (Insurance Regulatory and Development authority)

Act passed in parliament. Despite this both companies remained firmly committed to the

venture. In October 1998, the joint venture agreement was renewed and additional

resource made available.

29
Around this time Standard Life purchased 2% of Infrastructure Development Finance

Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC

Treasury department to advise them upon their investments in India. Towards the end

of 1999, the opening of the market looked very promising and both companies agreed

the time was right to move the operation to the next level. Therefore, in January 2000

an expert team from the UK joined a hand picked team from HDFC to form the core

project team, based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake

in HDFC Bank. In a further development Standard Life agreed to participate in the Asset

Management Company promoted by HDFC to enter the mutual fund market.

30
Promoters of HDFC Standard Life Insurance:
1. HDFC Limited

HDFC is India’s leading housing finance institution and has helped build more than

23,00,000 houses since its incorporation in 1977. In Financial Year 2003-04 its assets

under management crossed Rs. 36,000 Cr. As at March 31, 2004, outstanding deposits

stood at Rs. 7,840 crores. The depositor base now stands at around 1 million

depositors.

• Rated ‘AAA’ by CRISIL and ICRA for the 10th consecutive year

• Stable and experienced management

• High service standards

• Awarded The Economic Times Corporate Citizen of the year

Award for its long-standing commitment to community
development.
31
• Presented the ‘Dream Home’ award for the best housing finance
provider in 2004 at the third Annual Outlook Money Awards.
Standard Life Group (Standard Life plc and its subsidiaries)

The Standard Life group has been looking after the financial needs of customers for

over 180 years. It currently has a customer base of around 7 million people who rely on

the company for their insurance, pension, investment, banking and health-care needs.

Its investment manager currently administers £125 billion in assets. It is a leading

pensions provider in the UK, and is rated by Standard & Poor's as 'strong' with a rating

of A+ and as 'good' with a rating of A1 by Moody's Standard Life was awarded the 'Best

Pension Provider' in 2004, 2005 and 2006 at the Money Marketing Awards, and it was

voted a 5 star life and pensions provider at the Financial Adviser Service Awards for the

last 10 years running.

The '5 Star' accolade has also been awarded to Standard Life Investments for the last

10 years, and to Standard Life Bank since its inception in 1998. Standard Life Bank was

awarded the 'Best

32
Flexible Mortgage Lender' at the Mortgage Magazine Awards in
2006
Incorporation: Hdfc Standard Life Insurance Company Limited

The company was incorporated on 14th August 2000 under the name of HDFC

Standard Life Insurance Company Limited. Our ambition from as far back as October

1995, was to be the first private company to re-enter the life insurance market in India.

On the 23rd of October 2000, this ambition was realised when HDFC Standard Life was

the only life company to be granted a certificate of registration. HDFC are the main

shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%.

Given Standard Life's existing investment in the HDFC Group, this is the maximum

investment allowed under current regulations. HDFC and Standard Life have a long and

close relationship built upon shared values and trust. The ambition of HDFC Standard

Life is to mirror the success of the parent companies and be the yardstick by which all

other insurance company's in India are measured.

33
 Our Mission

We aim to be the top new life insurance company in the market. This does not just

mean being the largest or the most productive company in the market, rather it is a

combination of several things like-

 Customer service of the highest order

 Value for money for customers

 Professionalism in carrying out business

 Innovative products to cater to different needs of different

customers
 Use of technology to improve service standards
 Increasing market share
Our Values

1. SECURITY: Providing long term financial security to our policy holders will be our

constant endeavour. We will be do this by offering life insurance and pension products.
34
2. TRUST: We appreciate the trust placed by our policy holders in us. Hence, we will aim to

manage their investments very carefully and live up to this trust.

3. INNOVATION: Recognizing the different needs of our customers, we will be offering a

range of innovative products to meet these needs. Our mission is to be the best new life

insurance company in India and these are the values that will guide us in this.
Board of Directors:-

1. Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive

Chairman of Housing Development Finance Corporation Limited (HDFC Limited).

2. Mr. Keki M Mistry is currently the Managing Director of HDFC Limited. Mr. Alexander M

Crombie is the Group Chief Executive of the Standard Life Group in March 2004.
35
3. Ms. Marcia D Campbell is currently the Group Operations Director in the Standard Life

group and is responsible for Group Operations, Asia Pacific Development, Strategy &

Planning, Corporate Responsibility and Shared Services Centre.

4. Mr. Keith N Skeoch is currently the Chief Executive in Standard Life Investments Limited

and is responsible for overseeing Investment Process & Chief Executive Officer

Function.
5. Mr. Gautam R Divan is a practising Chartered Accountant and is a
Fellow of the Institute of Chartered Accountants of India.
6. Mr. Ranjan Pant is a global Management Consultant advising
CEO/Boards on Strategy and Change Management.
7. Mr. Ravi Narain is the Managing Director & CEO of National
Stock Exchange of India Limited.
8. Mr. Deepak M Satwalekar is the Managing Director and CEO of
the Company.
9. Ms. Renu S. Karnad is the Executive director of HDFC Limited.
36
*****
37
PRODUCTS

At HDFC Standard Life, we offer a bouquet of insurance solutions to meet every need.

We cater to both, individuals as well as to companies looking to provide benefits to their

employees. This section gives you details of all our products. We have incorporated

various downloadable forms and product details so that you can make an informed

choice about buying a policy.

For individuals, we have a range of protection, investment, pension and savings plans

that assist and nurture dreams apart from providing protection. You can choose from a

range of products to suit your life-stage and needs.

For organisations we have a host of customised solutions that range from Group Term

Insurance, Gratuity, Leave Encashment and Superannuation Products. These

affordable plans apart from providing long term value to the employees help in

enhancing goodwill of the company.

38
Individual Products

We at HDFC Standard Life realise that not everyone has the same kind of needs.

Keeping this in mind, we have a varied range of Products that you can choose from to

suit all your needs. These will help secure your future as well as the future of your

family.
Protection Plans

You can protect your family against the loss of your income or the burden of a loan in

the event of your unfortunate demise, disability or sickness. These plans offer valuable

peace of mind at a small price. Our Protection range includes our Term Assurance Plan

& Loan Cover Term Assurance Plan.

Investment Plans

Our Single Premium Whole Of Life plan is well suited to meet your long term investment

needs. We provide you with attractive long term returns through regular bonuses.
39
Pension Plans

Our Pension Plans help you secure your financial independence even after retirement.

Our Pension range includes our Personal Pension Plan, Unit Linked Pension, Unit

Linked Pension Plus

Savings Plans

Our Savings Plans offer you flexible options to build savings for your future needs such

as buying a dream home or fulfilling your children’s immediate and future needs. Our

Savings range includes Endowment Assurance Plan, Unit Linked Endowment, Unit

Linked Endowment Plus, Money Back Plan, Children’s Plan, Unit Linked Youngstar,

Unit Linked Youngstar Plus .

Group Products
One-stop shop for employee-benefit solutions

HDFC Standard Life has the most comprehensive list of products for progressive

employers who wish to provide the best and most innovative employee benefit solutions

to their employees.
40
We offer different products for different needs of employers ranging from term

insurance plans for pure protection to voluntary plans such as superannuation and

leave encashment. We now offer the following group products to our esteemed

corporate clients:

Group Term Insurance

Group Variable Term Insurance

Group Unit-Linked Plan

An investment solution that provides funding vehicle to manage corpuses with Gratuity,

Defined Benefit or Defined Contribution Superannuation or Leave Encashment

schemes of your company

Also suitable for other employee benefit schemes such as salary
saving schemes and wealth management schemes
41
Social Products
Development Insurance Plan

Development Insurance plan is an insurance plan which provides life cover to members

of a Development Agency for a term of one year. On the death of any member of the

group insured during the year of cover, a lump sum is paid to that member’s

beneficiaries to help meet some of the immediate financial needs following their loss.

Eligibility

Members of the development agency and their spouses with:

- Minimum age at the start of the policy 18 years last birthday

- Maximum age at the start of policy 50 years last birthday

Employees of the Development Agency are not eligible to join the group. The group to

be covered is only eligible if it contains more than 500 members.

42
Premium Payments

The premium to be paid will be quoted per member in the group and will be the same

for all members of the group. The premium can only be paid by the Development

Agency as a single lump sum that includes all premiums for the group to be covered.

Cover will not start until the premium and all the member information in our specified

format has been received. The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per

member.
Benefits

On the death of each member covered by the policy during the year of cover a lump

sum equal to the sum assured will be paid to their beneficiaries or legal heirs. Where

the death is as a result of an accident, an additional lump sum will be paid equal to half

the sum assured. There are no benefits paid at the end of the year of cover and there is

no surrender value available at any time.

The role of the Development Agency
Due to the nature of the groups covered, HDFC Standard Life will be
passing certain administrative tasks onto the Development Agency.
43
By passing on these tasks the premium charged can be lower. These
tasks would include:

• Submission of member data in a specified computer format

• Collection of premiums from group members

• Recording changes in the details of group members

• Disbursement of claim payments and the mortality rebate (if

any) to group members
These tasks would be in addition to the usual duties of a policyholder
such as:
• Payment of premiums
• Reporting of claims
• Keeping policy holder information up to date

Training and support will be available to give guidance on how to complete the tasks

appropriately. Since these additional tasks will impose a burden on the Development

Agency, the Development Agency may charge a Rs. 10 administration fee to their

members.
44
Prohibition of rebates
Section 41 of the Insurance Act, 1938 states

No person shall allow or offer to allow, either directly or indirectly, as an inducement to

any person to take out or renew or continue an insurance in respect of any kind of risk

relating to lives or property in India, any rebate of the whole or part of the commission

payable or any rebate of the premium shown on the policy, nor shall any person taking

out or renewing or continuing a policy accept any rebate, except such rebate as may be

allowed in accordance with the published prospectus or tables of the insurer If any

person fails to comply with sub regulation (previous point) above, he shall be liable to

payment of a fine which may extend to rupees five hundred

Tax Benefits
INCOME TAX SECTION GROSS ANNUAL SALARY HOW
MUCH TAX CAN YOU SAVE? HDFC STANDARD LIFE PLANS
Sec. 80C Across All income Slabs. Upto Rs. 33,990 saved on
investment of Rs. 1,00,000. All the life insurance plans.
45
Sec. 80 CCC Across all income slabs. Upto Rs. 33,990 saved on
Investment of Rs.1,00,000. All the pension plans.

Sec. 80 D* Across all income slabs. Upto Rs. 3,399 saved on Investment of Rs. 10,000.

All the health insurance riders available with the conventional plans.
TOTAL SAVINGS POSSIBLE ** Rs. 37,389

Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D,

calculated for a male with gross annual income exceeding Rs. 10,00,000.
Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are
completely tax-free, subject to the conditions laid down therein.
* Applicable to premiums paid for Critical Illness Benefit,
Accelerated Sum Assured and Waiver of Premium Benefit.
** These calculations are illustrative and based on our understanding
of current tax legislations, which are subject to change.
Please contact your tax consultant for exact calculation of your tax
liabilities.
46
*****
47
LIFE INSURANCE IN INDIA

With such a large population and the untapped market area of this population Insurance

happens to be a very big opportunity in India. Today it stands as a business growing at

the rate of 15-20 per cent annually. Together with banking services, it adds about 7

percent to the country’s GDP .In spite of all this growth the statistics of the penetration

of the insurance in the country is very poor. Nearly 80% of Indian populations are

without Life insurance cover and the Health insurance.

This is an indicator that growth potential for the insurance sector is immense in India. It

was due to this immense growth that the regulations were introduced in the insurance

sector and in continuation “Malhotra Committee” was constituted by the government in

1993 to examine the various aspects of the industry. The key element of the reform

process was Participation of overseas insurance companies with 26% capital. Creating

a more efficient and competitive financial system suitable for the requirements of the

economy was the main idea behind this reform.

48
Since then the insurance industry has gone through many sea changes .The

competition LIC started facing from these companies were threatening to the existence

of LIC. Since the liberalization of the industry the insurance industry has never looked

back and today stand as the one of the most competitive and exploring industry in India.

The entry of the private players and the increased use of the new distribution are in the

limelight today. The use of new distribution techniques and the IT tools has increased

the scope of the industry in the longer run.

A Brief History

The origin of insurance is very old .The time when we were not even born; man has

sought some sort of protection from the unpredictable calamities of the nature. The

basic urge in man to secure himself against any form of risk and uncertainty led to the

origin of insurance. The insurance came to India from UK; with the establishment of the

Oriental Life insurance Corporation in 1818.

49
The Indian life insurance company act 1912 was the first statutory body that started to

regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and

75 provident firms were been established in India. Then the central government took

over these companies and as a result the LIC was formed. Since then LIC has worked

towards spreading life insurance and building a wide network across the length and the

breath of the country. After the liberalization the entrance of foreign players has added

to the competition in the market.

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in the

year 1850 in Calcutta by the British. In 1957 General Insurance Council, a wing of the

Insurance Association of India, frames a code of conduct for ensuring fair conduct and

sound business practices. In 1972 The General Insurance Business (Nationalization)

Act, 1972 nationalized the general insurance business in India with effect from 1st

January 1973.
50
It was after this that 107 insurers amalgamated and grouped into four companies viz. the

National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental

Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated

as a company.
Present Scenario

The government of India liberalized the insurance sector in march 2000 with the

passage of the Insurance Regulatory and Development Authority (IRDA) bill. Lifting all

entry restrictions for private players to enter the market with some limits on direct

foreign ownership. premium rate of most general insurance. Policies come under the

purview of the government appointed Tariff Agenty Committee. The opening up of the

sector is likely to lead to greater spread and deepening of insurance in India and this

may also restructuring and revitalizing of the public sector companies. A host of private

insurance companies operating in both life and non life segments have started selling

their insurance policies since 2001.

51
Non life insurance market, In December 2000, the GIC subsidiaries were restructured

as independent insurance companies. At the same time, GIC was converted into

national re-insurer. In July2002, Parliament passed a bill, delinking the four subsidiaries

from GIC.

Presently there are 12 general insurance companies with 4 public sector companies

and 8 private insures. Although the public sector companies still dominate the general

insurance business, the private insurance companies have a 10 percent share of the

market, up from 4 percent in 2001. In the first half of 2002, the private companies

booked premium worth 6.34 billion. Most of the new entrants reported losses in first yr

of their operation in 2001.

Insurance costs constitute roughly around 1.2 – 2 % of the total project costs. Under the

existing norms, insurance premium payments are treated as part of the fixed costs.

Consequently they are treated as pass through costs for tariff calculations.
52
For projects costing up to Rs.1 billion, the tariff Agent committee sets the premium

rates, for projects between 1 billion and 15 billion, the rates are set in keeping with

committee’s guidelines; and projects above 15 billion are subjected to reinsurance

pricing. It is the last segment that has a number of additional products and competitive

pricing. Insurance, like project finance, is extended by a consortium. Normally one

insurer takes the lead, shouldering about 40-50% of the risk and receiving proportionate

percentage of the premium.

53
*****
54
LIFE INSURANCE FINANCIAL CONSULTANT
Eligibility for an Insurance Agent

Every person who has cleared higher secondary examination can become an Agent

other than a minor or the person who is convicted in any court for crime or any legal

proceedings. Men and women both can work as an Agent. A single person can be

associated with other life insurance companies.

A training program is there to train a person who wants to become an Agent. There is

100 Hrs. training program which can be done either with the physical appearance in the

class room or the interest basis. In the classroom training the trainee has to be

physically present in the training session. There are difference sessions of training

program. A trainee can attend any session according to his comfort. The training period

is of 25 days approx. If the trainee does not have enough time to devote in the

classroom training, then there is another option left that is training on Internet.
55
On the basis of Internet the trainee has provided a login number along with the

password through which he operated his login and completed his training hrs. as

convenient. Each and every hour pass on the net under his login head will be count on

his account. The test for the training program is also on line. This is only procedure to

be an Insurance Agent.
Scope of Insurance Agent

In the present scenario the living standard is becoming higher and higher everyday.

Every person who has a family to survive wants to provide his family each and every

possible comfortable thing. He wants his children to be a well dressed, to be higher

qualified in a well recognized school, colleges, institutes and wants his children to go

abroad for higher education. He wants to live a luxury life full of pleasure.
To fulfill all of his needs he has to earn more and more. Any person
can be on a job at a time or can be on a business can’t fulfill his
56
pleasure requirement. There is a source through which he can make
money in a legal way that is insurance sector.

Becoming an insurance Agent provides him the legal source by which he can earn

money with his current status. It is the business in which you deal with you personal

contacts and can gain extra income. This business needs low investment an not of

much effort. Its all depend on your social contacts and your skills to convince people by

helping them to suggest the product which suited them the most.

As due to critical diseases, growing percentage of accident and fear of financial crisis

every one wants to secure his or her future. Insurance sector plays a vital role in

assuring people about their future. As the scope of insurance enhancing, the need of an

insurance Agent who can guide the potential customers is growing.

Being an Insurance Agent of HDFC-STANDARD LIFE INSURANCE provides a legal

mean to earn money which protects a person from earning through a illegal source

which is harmful for society as well as himself. For the youngsters it provides great
57
platform to prove them. On the basis of their performance they can
be recruited as unit manager.

Its recruitment procedure is very easy. A person with high educating and well

experience can be recruited after a personal interview and group discussion. After the

training program is completed the Insurance Agent has to appear for the pre-

examination conducted by IRDA. As he clear the exam he provides a license, which is

the proof of a legalized insurance Agent, which permits him to deal in his insurance

business.
RECRUITMENT PROCESS:
Steps in recruitment of Insurance Agents

 Approach to the likely person

 Appointment as per condition

 Discuss the topic

 Give the documents which includes:-

58
1. Prospectus of the company

2. Brochure

3. Company’s plan

4. Questionnaire

 Collect the document after it’s completion

 Forward it to project manager

 Feed it in the computer as the database

 Follow up as per conditions

Modes of Contact

 Personal Contacts

 References

 Phone Calls

 Guidance as per Unit Manager59

*****
60
RESEARCH METHODOLOGY
Research: - is a process of collecting, analyzing, interpreting and

summarizing in a significant manner for the purpose of framing out necessary

conclusion and findings of data perceived and formulated for deriving out the

meaningful information. To carry our research necessary telephonic calls needed to be

done, suitable appointments were to be fixed and therefore market survey is to be

followed.
Objective of training: - To understand life insurance and
recruitment of capable life insurance advisors for growth prospects.
Process: Methodology or process involving in the Research followed
during the course of summer training is as follows: -
a)Collection of data : - This is an important aspect in formulating
the objective of research process where the data is collected via
two process: - i) Primary Sources and ii) Secondary sources
i)
Primary sources: - Where the data is collected primarily by
interviewing and personal observation and is original in nature
and accurate to the considerable extent.
61
ii)
Secondary sources: -Where the data is obtained from some
published and printed sources such as newspaper, magazines,
websites and so on.
b)Analyzing of collected data : - The data collected through market

survey and published sources is then processed to obtained necessary inferences and

findings for the purpose of achieving the objective as well as to derive necessary

conclusion. A considerable skill and knowledge is involved in analyzing the data for the

purpose of interpreting thereof.

c)Interpreting of data : - it is the significant step where the data
collected and analyzed is interpreted in the forms of graphs and
figures is depicted in the report called Project report.
d)Summarizing of data : - Thereby necessary summary is prepared
which is essential in the project report of the summer training
being done under an organization.
62
Helpful Arms of Research Methodology: -
Questionnaire: - Questionnaire is a set or group of questions being
framed for the purpose of obtaining market perspective about a
particular aspect or topic.

There are two types questionnaire bing carried necessary for the market survey of the

summer training being undertaken and put for the by the trainee to the sample people

taken as a base for entire population:

a)Open ended Questionnaire : - where the people (also called
respondents) are required freedom to present their views and
suggestions for the benefits and success of the organization.
b)Close ended questionnaire : - where the respondents is limited to

the choice of answer being delivered by the interviewer itself so that quick and fast means

of responses be derived out without wasting much time. Here close ended questionnaire

being followed by me during the course of the summer training market survey.
63
Sampling: - Sampling is a process of obtaining a number of

individuals taken a base for the entire population since entire population can not be

asked about the necessary objective upon which a questionnaire is put forth needed for

the responses to be derived for the purpose of generation of facts and customer view

point regarding their perception of particular product or services.

There are two type of sampling – i) Random Sampling and ii)
Systematic sampling.
i)
Random sampling : - Random sampling is a process of

selecting the sample size randomly and no choice or preference to be made about the

selection of respondents for the market survey and questionnaire to be put forth against

him. Here, Random sampling being adopted by me.

ii)
Systematic sampling : - it is a sampling where the limited

number of selected respondents is figured out based on some criteria so that only those

respondents can be asked for the purpose of filing questionnaire.

Sample Size: - 105 respondents.
64
*****
76
 SWOT ANALYSIS

STRENGTHS

1.HDFC Standard life insurance offers a range of individual and

group insurance solutions.
2.HDFC Standard Life has the financial expertise required to
manage your long-term investments safely and efficiently.
3. The company has covered over 8,77,000 lives year ending
March 31, 2007
4.Rated ‘AAA’ by CRISIL and ICRA for the 10th consecutive
year for High service standards
5. Life insurance industry is a rapid growing and a nobler service
industry.

WEAKNESSES
1. LIC is prevalent and sustains even today a major source of
population.
77

2. Low number of offices and network and number of life

insurance agents.
3. Lack of knowledge and expertise.

OPPORTUNTIIES

1. Life insurance has captured its mere15 – 20% growth therefore a wide open untapped

market is open to the company to develop, grow and measure its success.
2.Still the number of companies are few and company has every
capabilities to grow and forward its performance areas to the
widest

THREATS
1.People are hesitant to invest and put their hard earned money
to the private life insurance company with the fear of getting
lost.
78

2.Belief towards LIC as it is a government corporation phobia is

continue to surmount the people of India despite lots of flaws
and development and liberalization of life insurance.
3.Alternative financial services such as mutual fund, banking
services, share and securities also pose problems and threats to
the working of the life insurance sector.
4. Illiteracy and un5.Rising real estate industry also pose threat investing a bulk of their money
over to that industry.
as people are
employment also pose threat.
5.Rising real estate industry also pose threat investing a bulk of their money over to that
industry.
as people are
79

*****
80
CONCLUSION

Summer training is a best example for a trainee to learn about the company working,

corporate culture under which is operating the functions. HDFC standard life insurance

is a life insurance company under which I gained a significant knowledge with respect to

life insurance, its importance and applicability as well as undertook the task to recruit

capable life insurance advisors which is conducive for the company to grow with more

prosperity. What I taught in the management institute utilized them fruitfully leading to

the best advantage to the company and to the best experience for mine.

At far I can conclude that life insurance is a noble service which is very important for

every citizen to learn and realize its importance because this is the only source which

can remain the status where one is with the family bread earner and ever when he is

not.

With the growing financial sector I would like to opt this industry for my future career

advancement and as an opportunity to service this industry.

81
*****
82
 RECOMMENDATIONS
Following are suggestions made for the benefits and augmentation of
the sound working of the company – HDFC Standard life insurance:

1. Need to train and develop life insurance agents with more comprehensive knowledge

and skills to counter every queries of the customer.

2. It is suggested that company should not left any stone unturned towards sound

advertisement and promotional measures on every section whether it is printed, media

or or air via radio.

3. It is also suggested that skilled management graduates need to be places on sales and

marketing of financial servies who can render their best ideas for the accomplishment of

the company goals and objectives to the best extent.

4. Also, care need to be taken that every customer’s grievance should be met with delight

whether before purchase or after sales.

83

5. There should be an expansion measure for more offices and

6. location of more centres for offices of the company be
established sop that company may grow its network.

7. there should more advanced measures are required to develop to capture the needs of

customer so that they can be inspire and motivated to invest in the life insurance

products being provided by the HDFC Standard life insurance.

8. Life insurance Products should be made flexible so as to suit
every section of society.
84
*****
85
BIBLIOGRAPHY

Following are sources which helped me during my summer training:

BOOKS:

KOTHARI C.R.: Research Methodology Management,3rd Edition

KOTLER PHILIP: Marketing Management” 11th Revised edition ,2002
GUPTA S.P.: Statistical Methods “Thirteen revised edition, 2001

MAGAZINES:

India Today
Business World

REFERENCES
Websites: -

www.hdfcinsurance.com
www.irdaindia.org
www.liccouncil.org
www.businessconnect.com
86
QUESTIONNAIRE
Name: -… …………………………………………………………
Age:-……………………………………………………………
Location: -… …………………………………………………………
Occupation: -……………………………………………………………
Q.1. What do you mean by life insurance?
a) Protection of human asset value against uncertainty

b) A sum received after death

c) Both

Q.2. Do you think life insurance is essential for every one?
a) Yes
b) No
88

Q.3. What is your qualification?

a) Post graduate
b) Graduate

c) Senior secondary

Q.4. Do you come under:
a) 18-25 age group

b) 25 – 35 age group

c) 35 – 45 age group

d) Above 45 age group
Q.5. What dissatisfied you most in your occupation
a) Low employment

b) Low earning / income

c) Low status

d) Huge capital investment

89

e) All of the above


Q.6. Would you like to know about a career in life insurance
advisor ship where you can fulfill every desire of your life?
a) Yes

b) No

Q.7 Do you perceive that life insurance business is a noble
service oriented business?
a) Yes

b) No

Q.8. Would you like to become or opt for life insurance advisor under esteemed and

prospering organization HDFC Standard Life insurance?

a) Yes

b) No

90

Q.9. Do you agree that the life insurance business is a growing

industry and will grow and rapid pace in future?
a) Yes

b) No


Q.10. Do you favor the privatization of life insurance by the Government where a significant

number of companies now in the market for life insurance to the customers with the alliance

of multinationals?
a) Yes

b) No

Suggestions: -

1.…………………………………………………………… 2.

…………………………………………………………… 3.

…………………………………………………………… 4.

…………………………………………………………… 5.

……………………………………………………………
VISHAL KUMAR SHRIVAISHNAV91

*****
87

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