A PERSPECTIVE STUDY ON CUSTOMERS ON LIC

POLICIES

CHAPTER - I

INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION

Life Insurance is most commonly used to financially protect your family from
the premature death of you and/or your spouse. Unfortunately, it's probably the
least favorite thing to plan for.

And, as a result, adequate planning is often put off until it's too late. Although
it may sound simple, there are many things to consider. There are many ways to
protect our family with life insurance. So, consulting with a Life Insurance
Professional can be vital.

Taxes

Many people don't realize that even though life insurance proceeds are paid
income tax-free to the beneficiary, there's a good chance the proceeds will be
included in the value of our estate which may be taxed.

1.2 INDIAN SCENARIO

 The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360 degree turn
witnessed over a period of almost two centuries. Younger people are insuring
themselves. The average age of an insured person is now 33, down from 37 five
years ago.

Indians are insuring more the average sum assured is now three to five times
the LIC’s average of Rs. 83,000 per policy. Agents are being trained to understand
the needs of a client and then suggest the best policy that meets the client’s needs,
rather than just sell anything. Additional benefits can be bought in the form of riders
as cover against deadly disease, surgeries and disability due to accident. The thrust
is now on pension plans because life expectancy is going up and only 10% of
population has pension cover.

1.3 STATEMENT OF THE PROBLEM

The insurable interest in own life is unlimited because the loss to the insured
or his dependents cannot be measured in terms of money and, therefore, no limit
can be played to the amount of insurance that one may take on one’s own life. Thus,
theoretically, a person can take a policy to any unlimited amount on his own life. The
success of the life insurance business depends on the awareness of the policyholders
about the products and satisfaction of the policyholders regarding the service
rendered by LIC of India. Life insurance being a service sector is no exception to this
principle. This paper presents the socio-economic conditions of the policyholders, the
awareness of the policyholders about life insurance products, satisfaction of the
services provided by LIC of India, the problems faced by the policyholders and so on.

1.4 IMPORTANCE OF THE STUDY

 In our country the life Insurance companies, part of financial sector, are
expected to show profits, though they are service-oriented organisations. The days
are gone, when the Life Insurance companies were set up with an exclusive motto of
“service” instead of profit. The recent economic reforms urge the Life Insurance
Companies to introduce various insurance schemes in order to make profits by
directing the schemes at target group of customers. The need for development of
Life insurance is thus once again recognized and it will now be possible to introduce a
variety of insurance schemes similar to those in the overseas markets and as per
demand of the clients in our own market. This study will help the public sector and
private sector Insurance Companies to analyse its performance and to take
corrective measures in the sphere of their insurance products.

1.5 NEED FOR THE STUDY

In our country, the Life Insurance companies, part of financial sector, are
expected to show profits, though they are service-oriented organisations. The days
are gone, when the Life Insurance companies were set up with an exclusive motto of
“service” instead of profit. The recent economic reforms urge the Life Insurance
Companies to introduce various insurance products in order to make profits by
directing the schemes at target group of customers. The need for development of
various insurance schemes is thus once again recognized and it will now be possible
to introduce a variety of need based various insurance products in our own market,
similar to those in the overseas markets. This study will help the Public and Private
Insurance Companies to analyse its performance and to take corrective measures in
the sphere of various Insurance products.

1.6OBJECTIVES OF THE STUDY

 To analyze various schemes provided by LIC of India.

 To know about the policy holder’s knowledge and experience in investing
particular policies.
 To list out different kinds of investment at individual can sought in insurance.
 To find out the problems faced by the policy holder while investing in
insurance.

1.7 METHODOLOGY

Methodology is a way to systematically solve the research problems. It

explains the various steps that are generally adopted by the researcher in studying
the research problems along with the logic behind it. This study has used secondary
data.

SECONDARY DATA

Secondary data required for the study have been collected from books,
journals, magazines and websites.

Chi-Square Test
 In order to identify the factors influencing the level of satisfaction perceived
by the policy holders of Life Insurance Corporation of India in utilizing the services, a
Chi-square (2) test was used and the formula is as follows.

(O  E ) 2
2 =  E

with Degree of Freedom (D.F.) = (c-1) (r-1) where,

O = Observed frequency,
E = Expected frequency,
c = Number of Columns,
r = Number of Rows.

HENRY GARRETT RANKING TECHNIQUE

This technique was used to rank out the important reasons and major
problems faced by the policy holders in their functional areas. In this method the
respondents were asked to rank the given reasons and problems according to the
magnitude of the factors. The order of merit given by the respondents was
converted into ranks by using the following formula.

100 (R ij - 0.5)
Percentage position =
N j

Where, Rij = Rank given for ith factor by jth individual.

Nj = Number of factors ranked by jth individual

1.9 SCOPE OF THE STUDY

 Insurance companies are service-based organisation. All the activities of the
company should be focused on its existing and prospective insured. So it is important
to determine how well the needs of the insured have been understood and satisfied.
This study aims to evaluate the various insurance schemes and satisfaction of the
insured with reference to Life Insurance companies. This study has been undertaken
to know how for the insured are satisfied with their respective Life Insurance
Company.

CHAPTER II
 A THEORETICAL OVERVIEW OF INSURANCE AND
PROFILE OF THE LIFE INSURANCE CORPORATION OF
INDIA

INSURANCE BUSINESS IN INDIA

Since nationalization, LIC has built up a vast network of 2048 branches with
100 divisions and 7 zonal offices spread all over the country. The Life Insurance
Corporation of India also transacts business abroad and established offices in Fiji,
Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the
field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United
Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance Corporation
(International) E.C. Bahrain. The Corporation has registered a joint venture company
on 26th December, 2000 in Kathmandu, Life Insurance Corporation (Nepal) Limited
in collaboration with Vishal Group Limited. An off-shore company L.1.C.(Mauritius)
Limited has also been set up in 2001 to tap the insurance market there too.

The general insurance business has grown in spread and volume after
nationalization. The four companies have 2699 branch offices, 1360 divisional offices
and 92 regional Offices spread all over the country. GIC and its subsidiaries have
representation either directly through branches or agencies in 16 countries and
through associate/ locally incorporated subsidiary companies in 14 other countries. A
wholly, owned subsidiary company of GIC, i.e. Indian International Pvt. Ltd. is
operating in Singapore and there is a joint venture company, viz. Kenindia Assurance
Ltd. in Kenya. A new wholly owned subsidiary called New India International Ltd., UK
has also been registered.

The sweeping changes in the form of commoditisation, globalisation,

deregulation and the rapid technological advancements all over the world have
changed the market scenario for financial services. In the process of integrating the
Indian economy with global economy, India initiated liberalization through which it
has opened up the insurance sector to the private insurance sector as well as with
the main objectives of providing better coverage to the Indian citizens and augment
the flow of long-term financial resources to finance the growth of infrastructure of
the nation. This has laid a great responsibility on the sector to ensure a very fast
growth enabling India reaching to the level of the developed countries of the world in
the penetration of insurance. As on today, only 20 percent of the total insurable
population of India is covered under various life insurance schemes and the
penetration rates of health and other non-life insurances in India is also below the
international level. Thus, these facts indicate the immense growth potential of the
insurance sector in India. The year 1999 brought a jolt in the Indian insurance
sector, as a result of major structural changes like ending of government monopoly
and passing of the Insurance Regulatory and Development Authority (IRDA) Bill,
relaxing all entry restrictions for private players and allowing foreign players to enter
the market with some limits on direct foreign ownership.

Innovative products, smart marketing, and aggressive distribution have

enabled fledging 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. The life insurance industry in India grew by an
impressive 36 percent, with premium income from new business at Rs.253.43 billion
during the fiscal year 2004-2005, in spite of stiff competition from private insurers
and thus registered 21.87 percent 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 percent 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 percent. The 14 private insurers
increased their market share from about 13 percent to about 22 percent in a year’s
time. The figures for the first two months of the fiscal year 2005-06 also reveal the
growing share of the private insurers. The share of LIC f0r this period has further
come down to 75 percent, while the private players have grabbed over 24 percent.
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 percent share of the non-life insurance market.
 From Table-1 it is evident that there is 83 percent growth in premium
collection during post-liberalisation period compared to pre-liberalization period i.e.,
66 percent which means that there is a 17 percent growth which is attributed to
private players entry in Indian insurance market after economic liberalization.

3.1 PROFILE OF THE LIFE INSURANCE CORPORATION OF

INDIA

Life insurance in its modern form came to India from England in the year
1818. Oriental life insurance company started by Europeans in Calcutta was the first
life insurance company on Indian Soil.

The insurance act 1938 was the first legislation governing not only life
insurance but also non-life insurance to provide strict state control over insurance
business. The demand for nationalization of life insurance industry was made
repeatedly in the past but in gathered momentum in 1944 when a bill to amend-the
life insurance Act 1938 was introduced in the legislative assembly. However, it was
much later on the 19th January 1956 that life insurance in India was nationalized.
About 154 Indian insurance companies, 16 non-Indian companies and 75 provident
were operating in India at the time of nationalization.

The parliament of India passed the life insurance corporation act on the 19 th
of June 1956, and the life insurance corporation of India was created on 1 st
September 1956. With the objective of spreading life insurance much more widely
and in particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.

LIC has issued over one crore policies during the currant year. It has crossed
the milestone of issuing 1,01,32,955 new policies by 15 th Oct. 2005, posting a
healthy growth rate of 16.67% over the corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance business.
The same motives which inspired over forefathers to bring insurance into existence
in this country inspire us at LIC to take this message of protection to light the lamps
of security in as many homes as possible and to help the people in providing security
to other families.

PRODUCTS OF LIC

1. INSURANCE PLAN
2. PENSION PLAN
3. UNIT PLAN
4. SPECIAL PLAN
5. GROUP SCHEMES

CHAPTER - III

DATA ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION
 In this chapter an attempt is made to identify the extent of utilizing life
insurance policies. For the purpose of this study, level of satisfaction in utilizing life
insurance policies and it has been taken as dependent variables. The independent
variables chosen for the analysis are age, gender, educational qualification,
occupation, number of policies. The data thus collected were subdued into suitable
tabular form. Simple statistical tool like percentage, average, standard deviation,
chi-square test was used appropriate. Also Henry Garrett Ranking technique was
used to find out the reasons for selecting the LIC and major problems faced by the
respondents. The detected analysis, the result and discussion are furnished to the
following.

4.2 CHI-SQUARE ANALYSIS

AGE AND LEVEL OF SATISFACTION

An attempt has been made to know about the age group of the respondents
and level of satisfaction. For the purpose of this study, age has been classified into
four categories viz., upto 20 years, 21-30 years, 31-40 years and above 40 years.
The sample consists of 76 (23.4%) respondents upto 20 years, 87 (26.8%)
respondents between 21-30 years of age, 86 (26.5%) respondents between 31 and
40 years and 76 (23.4%) respondents aged above 40 years. The distribution of
sample respondents according to the age of the respondents and the level of
satisfaction is shown in the following table.

TABLE NO. 4.1

AGE AND LEVEL OF SATISFACTION
S. No. of Ave Range
Age % S.D
No. Respondents Rage Min Max
1 Upto 20 years 76 23.4 55.1 36 70 6.2
2 21-30 years 87 26.8 56.3 43 72 6.2
3 31-40 years 86 26.5 53.9 39 70 6.0
4 Above 40 years 76 23.4 54.1 35 67 6.1
Total 325 100.0
 It could be observed from the above table that the level of satisfaction of the
respondents belong to the age group upto 20 years ranged between 36 and 70 with
an average of 55.1. The level of satisfaction of the respondents in the age group
between 21 and 30 years ranged between 43 and 72 with an average of 56.3. The
level of satisfaction of the respondents in the age group between 31 and 40 years
ranged between 39 and 70 with an average of 53.9. On the other hand, the level of
satisfaction of the consumers with the age group of above 40 years ranged between
35 and 67 with an average of 54.1. From the analysis, it is inferred that the
maximum level of satisfaction is perceived by the respondents in the age group
between 21-30 years.

With a view to find the degree of association between age of the respondents
and the level of satisfaction, a two-way table was prepared and it is exhibited in the
following table.

TABLE NO. 4.2

AGE AND LEVEL OF SATISFACTION (TWO-WAY TABLE)
S. Level of satisfaction
Age Low Medium High Total
No.
1 13 36 27
Up to 20 years
(17.1) (47.4) (35.5) 76
2 15 41 31
21-30 years
(17.2) (47.1) (35.6) 87
3 30 42 14
31-40 years
(34.9) (48.8) (16.3) 86
4 21 35 20
Above 40 years
(27.6) (46.1) (26.3) 76
Total 79 154 92 325
 It could be inferred from the table that the high level of satisfaction was the
highest (35.6%) among the respondents aged between 21-30 years and the same
was the lowest (16.3%) among the respondents aged 31-40 years. The percentage
of medium level of satisfaction of the respondents was the highest (48.8%) among
the respondents aged between 31 and 40 years and the lowest (46.1%) among the
respondents aged above 40 years. On the other hand, the percentage of low level of
satisfaction of the respondents was the highest (34.9%) among the respondents
aged 31-40 years and the lowest (17.1%) among the respondents aged upto 20
years.

In order to find out the relationship between age of the respondents and level
of satisfaction, a hypothesis was framed and analysed with the help of chi-square
test. The results of the chi-square test are shown in the following table.

H0 : There is no significant relationship between age and level of

satisfaction.
H1 : There is a significant relationship between age of and level of
satisfaction.

TABLE NO. 4.3

AGE AND LEVEL OF SATISFACTION
(CHI-SQUARE TEST)
Calculated
Factor D.F Table Value Remarks
2 Value
Significant at 5%
Age 15.330 6 12.592
level

It is divulged from the above analysis that the calculated chi-square

value is greater than the table value and it is significant at 5% level. Hence,
the hypothesis, “age of the respondents and level of satisfaction are not
associated” does not hold good. It is concluded from the analysis that there
is a close significant relationship between age of the respondents and level of
satisfaction.
GENDER AND LEVEL OF SATISFACTION

An attempt has been made to know about the gender of the respondents and
level of satisfaction. For the purpose of this study, gender has been classified into
two categories viz., male and female. The sample consists of 199 (61.2%) male
respondents and 126 (38.8%) female respondents. The distribution of sample
respondents according to their gender and their level of satisfaction is shown in the
following table.
 TABLE NO. 4.4
GENDER AND LEVEL OF SATISFACTION
S. No. of Ave Range
Gender % S.D
No. Respondents Rage Min Max
1 Male 199 61.2 54.8 35 72 6.5
2 Female 126 38.8 55.0 42 67 5.7
Total 325 100.0

It could be observed from the above table that the level of satisfaction by
male consumers ranged between 35 and 72 with an average of 54.8 and the level of
satisfaction perceived by female respondents ranged between 42 and 67 with an
average of 55.0. From the above analysis, it is concluded that the maximum level of
satisfaction is perceived by the female respondents.

With a view to finding the degree of association between gender of the

respondents and the level of satisfaction, a two-way table was prepared and it is
shown in the following table.

TABLE NO. 4.5

 GENDER AND LEVEL OF SATISFACTION
(TWO-WAY TABLE)

Level of satisfaction
S.No. Gender Total
Low Medium High
1 Male 46 98 55
199
(23.1) (49.2) (27.6)
2 Female 33 56 37
126
(26.2) (44.4) (29.4)
Total 79 154 92 325
It could be noted from the table that the percentage of high level of
satisfaction was the highest (29.4%) among female respondents and the same was
the lowest (27.6%) among male respondents. The percentage of medium level of
satisfaction was the highest (49.2%) among male respondents and the same was the
lowest (44.4%) among female respondents. On the other hand, the percentage of
low level of satisfaction was the highest (26.2%) among female respondents and the
lowest (23.1%) among male respondents.

In order to find out the relationship between gender and level of satisfaction,
a hypothesis was framed and analysed with the help of chi-square test. The results
of the chi-square test are shown in the following table.

H0 : There is no significant relationship between gender and level of

satisfaction.
H1 : There is a significant relationship between gender of and level of
satisfaction.

TABLE NO. 4.6

GENDER AND LEVEL OF SATISFACTION
(CHI-SQUARE TEST)
Calculated
Factor D.F Table Value Remarks
2 Value
Not
Gender 0.757 2 5.991
Significant
 It is noted from the above analysis that the calculated chi-square value is
lesser than the table value and it is not significant. Hence, the hypothesis, “gender
of the respondents and level of satisfaction are not associated” holds good. It is
concluded from the analysis that there is no relationship between gender of the
respondents and level of satisfaction.

EDUCATIONAL QUALIFICATION AND LEVEL OF SATISFACTION

An attempt has been made to know about the educational qualification and
level of satisfaction. For the purpose of this study, educational qualification has been
classified into four categories namely illiterate, school level, college level and
professional course. The sample consists of 63 (19.4%) respondents are illiterate, 99
(30.5%) respondents educated till school level, 113 (34.8%) respondents educated
till college level and 50 (15.4%) respondents educated professional course. The
distribution of sample respondents according to the educational qualification of the
respondents and level of satisfaction is shown in the following table.

TABLE NO. 4.7

EDUCATIONAL QUALIFICATION AND LEVEL OF SATISFACTION

S. Educational No. of Ave Range

% S.D
No. Qualification Respondents Rage Min Max
1 Illiterate 63 19.4 56.4 39 72 7.1
2 School level 99 30.5 55.9 35 70 5.9
3 College level 113 34.8 54.5 41 68 5.9
4 Professional course 50 15.4 51.7 43 65 5.1
Total 325 100.0
 It could be discerned from the above table that the level of satisfaction of the
illiterate respondents ranged between 39 and 72 with an average of 56.4. The level
of satisfaction perceived by the respondents with school level education ranged
between 35 and 70 with an average of 55.9. The level of satisfaction perceived by
the respondents with college level education ranged between 41 and 68 with an
average of 54.5. Finally, the level of satisfaction perceived by the respondents with
professional course ranged between 43 and 65 with an average of 51.7. From the
analysis, it is identified that maximum level of satisfaction is perceived by the
illiterate respondents.

With a view to find the degree of association between the educational

qualification and level of satisfaction, a two-way table was prepared and it is
exhibited in the following table.

TABLE NO. 4.8

EDUCATIONAL QUALIFICATION AND LEVEL OF SATISFACTION (TWO-
WAY TABLE)
Educational Level of satisfaction
S.No. Low Medium High Total
Qualification
1 Illiterate 14 23 26
63
(22.2) (36.5) (41.3)
2 School level 12 55 32
99
(12.1) (55.6) (32.3)
3 College level 29 55 29
113
(25.7) (48.7) (25.7)
4 Professional course 24 21 5
50
(48.0) (42.0) (10.0)
 Total 79 154 92 325

It could be observed from the table that the percentage of high level of
satisfaction perceived by respondents was the highest (41.3%) among illiterate
respondents and the same was the lowest (10.0%) among the respondents educated
with professional course. The percentage of medium level of satisfaction was the
highest (55.6%) among the respondents educated with school level and the lowest
(36.5%) among illiterate respondents. On the other hand, the percentage of low
level of satisfaction was the highest (48.0%) among the respondents educated with
professional course and the lowest (12.1%) among the respondents educated with
school level.

In order to find out the relationship between educational qualification and

level of satisfaction, a hypothesis was framed and analysed with the help of chi-
square test. The result of chi-square test is shown in the following table.

H0 : There is no significant relationship between educational qualification

and level of satisfaction.
H1 : There is a significant relationship between educational qualification of
and level of satisfaction.

TABLE NO. 4.9

EDUCATIONAL QUALIFICATION AND LEVEL OF SATISFACTION (CHI-
SQUARE TEST)

Calculated
Factor D.F Table Value Remarks
2 Value
Educational
Significant at 5%
Qualificati 31.609 6 12.592
level
on

It is clear from the above analysis that the calculated chi-square value is
greater than the table value and it is significant at 5 percent level. Hence, the
hypothesis, “educational qualification of the respondents and level of satisfaction are
not associated” does not hold good. It is concluded from the analysis that there is a
close significant relationship between educational qualification and level of
satisfaction.

OCCUPATION AND LEVEL OF SATISFACTION

An attempt has been made to know about the occupation of the respondents
and level of satisfaction. For the purpose of the study, it has been classified into four
categories namely; government employee, private employee, business (or)
profession and agriculture. The sample consists of 52 (16.0%) respondents are
government employee, 109 (33.5%) respondents are private employee, 120
(36.9%) respondents are businessman (or) professionals and 44 (13.5%)
respondents are agriculturist. The distribution of sample respondents according to
the professional and level of satisfaction is shown in the following table.

TABLE NO. 4.10

OCCUPATION AND LEVEL OF SATISFACTION
S. No. of Ave Range
Occupation % S.D
No. Respondents Rage Min Max
1 Government employee 52 16.0 54.8 41 68 6.2
2 Private employee 109 33.5 54.5 42 68 5.9
3 Business (or) profession 120 36.9 55.1 35 72 6.5
4 Agriculture 44 13.5 55.3 36 68 6.1
Total 325 100.0

It could be surmised from the above table that the level of satisfaction
perceived by the government employee ranged between 41 and 68 with an average
of 54.8 and the level of satisfaction perceived by private employee ranged between
42 and 68 with an average of 54.5. The level of satisfaction perceived by business
(or) profession ranged between 35 and 72 with an average of 55.1. On the other
hand, level of satisfaction perceived by agriculture ranged between 36 and 68 with
an average of 55.3. From the analysis, it is identified that maximum level of
satisfaction is attained by the professional respondents.

With a view to find the degree of association between occupation of the

respondents and the level of satisfaction, a two-way table was prepared and it is
exhibited in the following table.

TABLE NO. 4.11

OCCUPATION AND LEVEL OF SATISFACTION
(TWO-WAY TABLE)
Level of satisfaction
S.No. Occupation Total
Low Medium High
1 Government employee 22 15 15
52
(42.3) (28.8) (28.8)
2 Private employee 20 63 26
109
(18.3) (57.8) (23.9)
3 Business (or) profession 28 57 35
120
(23.3) (47.5) (29.2)
4 Agriculture 9 19 16
44
(24.3) (47.4) (28.3)
Total 49 123 53 325
It could be identified from the table that the percentage of high level of
satisfaction perceived by respondents was the highest (29.2%) among businessman
(or) professionals and the same was the lowest (23.9%) among private employees.
The percentage of medium level of satisfaction was the highest (57.8%) among
private employees and the lowest (28.8%) among government employees. On the
other hand, the percentage of low level of satisfaction was the highest (42.3%)
among government employee and the lowest (18.3%) among private employees.

In order to find out the relationship between occupation of the respondents

and level of satisfaction, a hypothesis was framed and analysed with the chi-square
test. The result of chi-square test is shown in the following table.

H0 : There is no significant relationship between occupation and level of

satisfaction.
H1 : There is a significant relationship between occupation of and level of
satisfaction.
 TABLE NO. 4.12
OCCUPATION AND LEVEL OF SATISFACTION
(CHI-SQUARE TEST)

Calculated
Factor D.F Table Value Remarks
2 Value
Significant at 5%
Occupation 17.079 6 12.592
level

It is highlighted from the above analysis that the calculated chi-square value
is greater than the table value and it is significant at 5 percent level. Hence, the
hypothesis, “occupation of the respondents and level of satisfaction are not
associated” does not hold good. It is concluded from the analysis that there is a close
significant relationship between occupation of the respondents and level of
satisfaction.

NUMBER OF POLICIES AND LEVEL OF SATISFACTION

An attempt has been made to know about the number of policies held by the
respondents and level of satisfaction. For the purpose of this study, it can be
classified into three categories viz., upto two policies, 3-4 policies and above four
policies. The sample consists of 176 (54.2%) respondents are having upto 2 policies,
101 (31.1%) respondents are having 3-4policies and 48 (14.8) of the respondents
are having above 4 policies. The distribution of the sample respondents according to
the number of policies held by the respondents and level of satisfaction is shown in
the following table
 TABLE NO. 4.13
NUMBER OF POLICIES AND LEVEL OF SATISFACTION
S. Range
Number of No. of Ave
Nao % S.D
policies Respondents Rage Min Max
.
1 Up to 2 policies 176 54.2 54.9 35 70 6.1
2 3-4 policies 101 31.1 55.1 36 70 6.1
3 Above 4 policies 48 14.8 54.4 43 72 6.7
Total 325 100.0

From the above table, it is noted that the level of satisfaction perceived by
the respondents who purchase upto 2 policies ranged between 35 and 70 with an
average of 54.9. The level of satisfaction perceived by the respondents who
purchase 3-4 policies ranged between 36 and 70 with an average of 55.1. On the
other hand, the level of satisfaction perceived by the respondents who purchase
above 4 policies ranged between 43 and 72 with an average of 54.4. From the
analysis, it is observed that the maximum level of satisfaction perceived by the
respondents who purchase 3-4 policies.

With a view to find the degree of association between number of policies held
by the respondents and the level of satisfaction, a two-way table was prepared and it
is shown in the following table.
 TABLE NO. 4.14
NUMBER OF POLICIES AND LEVEL OF SATISFACTION (TWO-WAY
TABLE)

Level of satisfaction
S.No. Number of policies Total
Low Medium High
1 Up to 2 policies 43 82 51
176
(24.4) (46.6) (29.0)
2 3-4 policies 21 52 28
101
(20.8) (51.5) (27.7)
3 Above 4 policies 15 20 13
48
(31.3) (41.7) (27.1)
Total 79 154 92 325

From the above table it is inferred that the percentage of high level of
satisfaction perceived was the highest (29.0%) among the respondents who
purchase upto 2 policies and the same was the lowest (27.1%) among the
respondents who purchase above 4 policies. The percentage of medium level of
satisfaction was the highest (51.5%) among the respondents who purchase 3-4
policies and the same was the lowest (41.7%) among the respondents who purchase
above 4 policies. On the other hand, the percentage of low level of satisfaction was
the highest (31.3%) among the respondents who purchase above 4 policies and the
same was the lowest (20.8%) among the respondents who purchase 3-4 policies.

In order to find the relationship between the number of policies held by

respondents and level of satisfaction, a chi-square test is used and the result of the
test is shown in the following table.

H0 : There is no significant relationship between number of policies and

level of satisfaction.
H1 : There is a significant relationship between number of policies of and
level of satisfaction.
 TABLE NO. 4.15
NUMBER OF POLICIES AND LEVEL OF SATISFACTION (CHI-SQUARE
TEST)

Calculated
Factor D.F Table Value Remarks
2 Value
Number of Not
2.245 4 9.488
policies Significant

It is seen from the above table that the calculated chi-square value is lesser
than the table value and the result is not significant. Hence the hypothesis, “number
of policies held by the respondents and level of satisfaction are not associated” holds
good. From the analysis, it is found that there is no relationship between the number
of policies held by the respondents and level of satisfaction.
PERCENTAGE ANALYSIS

AGE GROUP OF THE RESPONDENTS

An attempt has been made to know the age group of the policy holders. For
the purpose of this study, it has been classified into four groups viz., upto 20 years,
21-30 years, 31-40 years and above 40 years. The details are furnished in the
following table.

TABLE NO. 4.16

AGE GROUP OF THE RESPONDENTS

No. of
S.No. Age Group Percentage
Respondents
1. Upto 20 years 76 23.4
2. 21-30 years 87 26.8
3. 31-40 years 86 26.5
4. Above 40 years 76 23.4
Total 325 100.0

It is surmised from the above table that 23.4 percent of the respondents with
the age group of upto 20 years, 26.8 percent of the respondents belong to the age
group of 21-30 years, 26.5 percent of the respondents belong to the age group of
31-40 years and 23.4 percent of the respondents belong to the age group of above
40 years. It is noted from the analysis that majority (26.8%) of the respondents
with the age group of 21-30 years.

CHART NO. 4.1

AGE GROUP OF THE RESPONDENTS

GENDER OF THE RESPONDENTS

An attempt has been made to know the gender of the respondents. For the
purpose of this study, it has been classified into two categories namely, male and
female. The details are furnished in the following table.

TABLE NO. 4.17

GENDER OF THE RESPONDENTS

No. of
S.No Gender Percentage
respondents
1 Male 199 61.2
2 Female 126 38.8
Total 325 100.0

It is observed from the above table that 61.2 percent of the respondents are
male and 38.8 percent of the respondents are female. It is found from the analysis
that majority (61.2%) of the respondents are male.
 CHART NO. 4.2

GENDER OF THE RESPONDENTS

EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

An attempt has been made to know the educational qualification of the policy
holders. For the purpose of this study, it has been classified into five categories viz.,
illiterate, school level, college level, professional course and others. The details are
furnished in the following table.

TABLE NO. 4.18

EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

Educational No. of
S.No. Percentage
Qualification Respondents
1. Illiterate 63 19.4
2. School level 99 30.5
3. College level 113 34.8
4. Professional course 38 11.7
5. Others (specify) 12 3.7
Total 325 100.0

It is identified from the above table that 19.4 percent of the respondents are
illiterate, 30.5 percent of the respondents are having school level education, 34.8
percent of the respondents are having college level education, 11.7 percent of the
respondents are completed professional course and 3.7 percent of the respondents
are having other type of education. It is concluded from the analysis that majority
(34.8%) of the respondents are having college level education.

CHART NO. 4.3

EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

OCCUPATION OF THE RESPONDENTS

An attempt has been made to know the occupation of the respondents. For
the purpose of this study, it has been classified into five categories viz., government
employee, private employee, business (or) profession, agriculture and others. The
details are furnished in the following table.

TABLE NO. 4.19

OCCUPATION OF THE RESPONDENTS
No. of
S.No. Occupation Percentage
Respondents
1. Government employee 52 16.0
2. Private employee 109 33.5
3. Business (or) profession 120 36.9
4. Agriculture 30 9.2
5. Others (specify) 14 4.3
Total 325 100.0

It is inferred from the above table that 16.0 percent of the respondents are
working as government employee, 33.5 percent of the respondents are working as
private employee, 36.9 percent of the respondents are doing business (or)
profession, 9.2 percent of the respondents are doing agriculture and 4.3 percent of
the respondents are having other type of occupation. It is concluded from the
analysis that majority (36.9%) of the respondents are doing business (or)
profession.

CHART NO. 4.4

OCCUPATION OF THE RESPONDENTS

NUMBER OF POLICIES HOLD BY RESPONDENTS FAMILY

An attempt has been made to know the number of policies hold by

respondents family. For the purpose of this study, it has been classified into three
categories viz., upto 2, 3-4 and above 4. The details are furnished in the following
table.

TABLE NO. 4.20

NUMBER OF POLICIES HOLD BY RESPONDENTS FAMILY

No. of
S.No. No. of policies Percentage
Respondents
1. Upto 2 176 54.2
2. 3-4 101 31.1
3. Above 4 48 14.8
Total 325 100.0

It is observed from the above table that 54.2 percent of the respondents
family hold upto 2 policies, 31.1 percent of the respondents family hold 3-4 policies
and 14.8 percent of the respondent’s family hold above 4 policies. It is concluded
from the analysis that majority (54.2%) of the respondents family hold upto 2
policies.
 CHART NO. 4.12

NUMBER OF POLICIES HOLD BY RESPONDENTS FAMILY

HENRY GARRETT RANKING TECHNIQUE

REASONS FOR PURCHASE THE POLICY FROM LIC

An attempt has been made to know about the reasons for purchasing the
policy from LIC. For this purpose, the various reasons such as bonus, premium
amount, coverage risk, and returns offered at the time of maturity, old age benefits,
loan facility and tax benefits. The respondents were asked to rank the reasons
according to their priority of the preference. Garrett ranking method was used to
identify the most important preferred reasons and the least preferred reasons. The
following table shows the details of reasons preferred by the selected respondents.

TABLE NO. 4.21

REASONS FOR PURCHASE THE POLICY FROM LIC
Total Mean Rank
S.No. Purpose
score score
1 Bonus 18848 58.0 II
2 Premium amount 15573 47.9 V
3 Coverage of risk 15873 48.8 IV
4 Returns offered at the time of
maturity 16515 50.8 III
5 Old age benefits 13951 42.9 VI
6 Loan facility 13651 42.0 VII
7 Tax benefits 19222 59.1 I

The above table understood for reasons for purchasing the policy from LIC. It
is noted from the above table that most of the respondents are preferred ‘tax
benefits’ was ranked first with a Garrett score of 19222 points. It followed by the
reasons such as ‘bonus’, ‘returns offered at the time of maturity’ and ‘coverage of
risk’ were ranked second, third and fourth with a Garrett scores of 18848, 16515 and
15873 points respectively. The fifth and sixth rank was placed for ‘premium amount’
and ‘old age benefits’ with the Garrett scores of 15573 and 13951 points
respectively. The last rank placed for ‘loan facility’ with a Garrett score of 13651
points. From the above analysis that majority of the respondents are purchasing the
policy for the reasons of its ‘tax benefits’ and ‘bonus’.

PROBLEMS FACED BY THE RESPONDENTS

An attempt has been made to know about the problems faced by the
respondents while utilizing the services offered LIC was studied with the help of
seven major problems. They are Less security, delay in the lengthy process to avail
insurance policy, More duration period, After sales service, Not proper information
about renewal of policy, inadequate publicity and advertisements and Less
knowledge of the agents and officials. The respondents were asked to rank the
problem according to their perception of magnitude on each problem. Henry Garrett
ranking method was employed and the result of the ranking is depicted in the
following table.

TABLE NO. 4.22

PROBLEMS FACED BY THE RESPONDENTS

S.No. Problems Total Mean Rank

 score score
1 Less security 17287 53.2 III
2 Delay in the lengthy process to avail insurance
18444 56.8 I
policy.
3 More duration period 17528 53.9 II
4 After sales service 16372 50.4 IV
5 Not proper information about renewal of policy 14334 44.1 VII
6 Inadequate publicity and advertisements. 14458 44.5 VI
7 Less knowledge of the agents and officials 14889 45.8 V

It is noted from the above table that the problem ‘delay in the lengthy
process to avail insurance policy’ was ranked first with a Garrett score of 18444
points. It is followed by the problems such as ‘more duration period, ‘less security’’
with a Garrett scores of 17528 and 17287 points respectively. The problems such as
‘after sales service’, ‘less knowledge of the agents and officials’ and ‘inadequate
publicity and advertisements’ occupied fourth, fifth and sixth rank with a Garrett
scores of 16372, 14889 and 14458 points respectively. The last rank goes to ‘Not
proper information about renewal of policy’ with a Garrett score of 14334 points.
From the above analysis it is found that majority of the respondents are faced the
problem such as ‘delay in the lengthy process to avail insurance policy’ and ‘more
duration period’.

CHAPTER – IV

SUGGESTIONS

4.1 SUGGESTIONS
1) In order to persuade people to take more number of policies, the corporation
may introduce prize schemes and give aggressive publicity to these schemes.
In addition to this, the corporation can also send communications to the
existing policyholders frequently informing them about the introduction of
new policies. Such communication will highlight the salient and distinguished
features of new schemes. This is bound to motivate them to invest more in
Life Insurance policies.
2) The respondents have received the detailed information of the LIC through
their advertisement and company agents / officers. Hence, it is suggested
that the LIC may give a wide service in the customers and maintain the
attractive advertisement through television (local channel), wall painting and
radio (F.M). By doing so, more number of people may be aware of the
services and utilize the service of LIC.
3) Al least once in a year, the corporation must send a statement of premia
received, bonus up‐to‐date credited and the latest bonus rates declared, to all
policyholders. This would avoid lapse of policy to some extent.
4) LIC of India should open a number of service centres in the more important
rural areas where it does not have branch offices. This would facilitate
collection of premium, improved services and wide ranging life insurance
coverage
5) The study shows that the claims of the policyholders are not being settled
promptly and quickly for want of documents and certificates in death claims.
The corporation must take requisite steps to remove the constraints,
obstacles and hindrances that arise in quick disposal of claims.
6) Even though insurance companies have customer service sections and
grievance redressal officers, they have not got the desired attention. These
sections were created mainly due to the fact that the formalities are to be
complied with as per the guidelines of Government of India instructions.
These sections have to be rejuvenated and given due importance.
7) Premium notice may be sent showing the amount of premium paid till date to
facilitate the policyholders to avail of policy loan. Policy loan and interest dues
may also be incorporated in the premium notices. Loan facility may be
extended to all the sections of the society instead of limiting its sanction to
employees and IT assesses.
CHAPTER-V

CONCLUSION
 The competitive climate in the Indian insurance market has changed
dramatically over the last few years. At the same time, changes have been taking
place in the government regulations and technology. The expectation of customers is
also changing. The Life Insurance Corporation of India have to introduce many new
products in the market which have competitive advantage over the products of
Private Insurance. The Private Insurance companies have introduced some new
innovative services to attract the customers by offering more bonus facilities and
attractive services.

It is high time that strategies were chalked out so as to tackle customer

service issues before it is too late. The LIC is expanding and big international players
are entering into the arena. The New Private Insurance Companies are consolidating
themselves and innovating new methods of customer delight. Among all human
relations in service-oriented industry, which is the vital force to run or ruin any
organization. This research is a rewarding exercise to the researcher. The researcher
will be delighted if the suggestions are implemented by Life Insurance Corporation of
India.