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POLICY HOLDERS’ PREFERENCE FOR LIC
PRODUCTS
Proposal for thesis submission in partial fulfillment for the award of
Degree of Doctor of PHILOSOPHY IN COMMERCE
By
M. DHANASEKARAN, (Reg. No: 0846000001)
Under the Guidance of Dr. G.SUBRAMANIAN, M.Com., M.Phil., Ph.D
Reader in Commerce, (Retd) PG & Research Department of Commerce,
Kandaswami Kandar’s College, Velur – 638 182. Namakkal – (DT)
VINAYAKA MISSIONS UNIVERSITY SALEM, TAMILNADU, INDIA.
NOVEMBER– 2014
VINAYAKA MISSIONS UNIVERSITY
DECLARATION
I, M. DHANASEKARAN, declare that the thesis entitled “POLICY
HOLDERS’ PREFERENCE FOR LIC PRODUCTS” submitted by me for
the Degree of Doctor of Philosophy is the record of work carried out by me
during the period from 2008 to 2014 under the guidance of
Dr. G. SUBRAMANIAN, READER IN COMMERCE (RETD), POST
GRADUATE AND RESEARCH DEPARTMENT OF COMMERCE,
KANDASWAMI KANDAR’S COLLEGE, VELUR – 638 182,
NAMAKKAL DISTRICT and has not formed the basis for the award of any
degree, diploma, associate-ship, fellowship, titles in this or any other University
or other similar institutions of higher learning.
Place: Signature of the Candidate
Date:
VINAYAKA MISSIONS UNIVERSITY
CERTIFICATE
I Dr. G.SUBRAMANIAN certify that the thesis entitled
“POLICY HOLDERS’ PREFERENCE FOR LIC PRODUCTS” submitted
for the Degree of Doctor of Philosophy by Mr. M. DHANASEKARAN,
(Reg. No: O846000001) is the record of research work carried out by him
during the period from 2008 to 2014 under guidance and supervision and that
this work has not formed the basis for the award of any degree, diploma,
associate-ship, fellowship or other titles in this University or any other
University or Institution of higher learning.
Place: Signature of the Supervisor
Date:
ACKNOWLEDGEMENT
I wish to acknowledge my deep sense of gratitude to those who have
helped me in the preparation of this doctoral thesis.
I deem it my pride and privilege to reward my deep sense of gratitude to
my research guide Dr. G.SUBRAMANIAN, M.Com., M.Phil., Ph.D., Reader
in Commerce (Retd), Post Graduate and Research Department of
Commerce, Kandaswami Kandar’s College, Velur, Namakkal District for
his invaluable and meritorious research guidance and supervision. I convey my
sincere thanks adequately to him for all the trouble he has undertaken since the
onset of this research study. I heartily express my thankfulness to him for the
completion of this doctoral thesis in time.
I am thankful to VINAYAKA MISSION UNIVERSITY, SALEM for
enrolling and providing me an opportunity to carryout this research work. I find
no exact word to convey my sincere thanks adequately to
Dr. K. RAJENDRAN, Dean (Research), Vinayaka Mission University,
Salem for his constant encouragement and timely suggestions that helped me a
lot to complete this thesis on time.
I express my sincere thanks to Dr. V. VAIYAPURI, Ph.D. Professor
and Head (Retd), Department of English, Kandaswami Kandar’s College,
P.Velur, Namakkal District for his constant encouragement through out the
course of my research work successfully.
I am thankful to Dr. R. MATHAVAN, M.Com., M.Phil., Ph.D,
Assistant Professor, Post Graduate and Research Department of
Commerce, Kandaswami Kandar’s College, P.Velur, Namakkal District,
for providing me valuable tips and information during the course of this thesis.
I am thankful to Dr. N. KATHIRVEL, Ph.D, Assistant Professor,
Department of Commerce, Govt. Arts College, Udumalpet, Tirupur
District, for his kindness, encouragement and support throughout the
completion of research work successfully.
I express my sincere thanks to Mr. N.Sivakumar, M.Com., M.Phil.,
Mr. M. Thanagamesh, M.Com., M.Phil., and Mr. M. Boopathi, M.Com.,
M.Phil., Assistant Professors, Department of Commerce, Kandaswami
Kandar’s College, P.Velur, Namakkal District for their generosity in
permitting me to utilize the reference materials and books available at their end.
I express my sincere gratitude to MY PARENTS Mr. G. MATHESAN
AND Mrs. M. SUSILAMANI, MY WIFE K.R. VIVEKKA for their constant
support throughout the course of this study.
I am thankful to Mr. N. RAJENDRAN, Assistant Manager in Canara
Bank AND Mrs. R.S. KARPAGAM, Cashier in Indian Overseas bank,
Sulur, Coimbatore District, and MY FRIENDS for their constant support
throughout the course of this study.
Finally, it is my foremost duty to thank all my respondents who helped
me to complete my research work without which this thesis would not have
been possible.
M. DHANASEKARAN
CONTENTS
CHAPTER
NO TITLE
PAGE
NO
LIST OF TABLES
LIST OF CHARTS
I INTRODUCTION AND RESEARCH DESIGN 1
II REVIEW OF LITERATURE 14
III PROFILE OF COMPANIES IN LIFE INSURANCE
BUSINESS AND STUDY AREA 32
IV ANALYSIS AND INTERPRETATION - I 99
V ANALYSIS AND INTERPRETATION – II 155
VI FINDINGS, SUGGESTIONS AND CONCLUSION 229
BIBLIOGRAPHY 245
APPENDIX 248
LIST OF TABLES
Table
No Title
Page
No
3.1 Children plans of LIC of India 55,56
3.2 Plans for handicapped dependents plans of LIC of India 58
3.3 Endowment assurance plans of LIC of India 60
3.4 High worth individuals plans of LIC of India 62
3.5 Money back plans of LIC of India 64
3.6 LIC of India’s special money back plan for women 66
3.7 Whole life plans of LIC of India 68
3.8 Term assurance plans of LIC of India 70
3.9 Joint life plan of LIC of India 72
3.10 Unit plans of LIC of India 75
3.11 Golden Jubilee plan of LIC of India (Special plans) 77
4.1 Classification on the basis of gender, age, no, family members, marital
status and type of family of the respondents of LIC policy holders 100
4.2 Classification on the basis of occupation, qualification, income, and
residential area of the respondents of LIC policy holders 107
4.3 Classification on the basis of their assets acquired, reference to invest,
influence of persons, purpose of taking insurance policy and buying
an insurance policy and buying an insurance of the respondents
113
4.4 Classification on the basis of types of plan, no. of policy, value of total
policy amount of premium of the respondents. 120
4.5 Classification on the basis of premium paid, method of payment of the
respondents. 126
4.6 Independent sample test age Vs Over all rating of satisfaction over the 131
functions of LIC.
4.7 Independent sample T-test on marital status of the respondent Vs
overall rating of satisfaction over the functions of LIC 133
4.8 Independent sample T-Test on family type of the respondent Vs over
all rating of satisfaction over the functions of LIC 135
4.9 Independent sample T-test on nature of the area of the respondent
living Vs overall rating of satisfaction over the functions of LIC 137
4.10 Independent sample T-test on nature of the area the respondent living
Vs overall satisfaction rating of various LIC policy 139
4.11 Independent sample T-test on the family that respondent living Vs
overall satisfaction rating of various LIC policy 141
4.12 Independent sample T-test on marital status of the respondent living
Vs overall satisfaction rating of various LIC policy 143
4.13 Independent sample T-test on gender Vs over all satisfaction rating of
various LIC policy 145
4.14 Independent sample T-test on gender Vs over all satisfaction rating of
services of LIC to customers 147
4.15 Independent sample T-test on marital status Vs over all satisfaction
rating of services of LIC to customers 149
4.16 Independent sample T-test on family type Vs overall satisfaction
rating of services of LIC to customers 151
4.17 Independent sample T-test on AREA of respondent living Vs overall
satisfaction rating of services of LIC to customers 153
5.1 One-way ANOVA- overall rating of LIC by respondents’ age 156
5.2 One-way ANOVA- overall rating of LIC by respondents’ occupation 159
5.3 One-way ANOVA- overall rating of LIC by respondent ‘s
qualifications 162
5.4 One-way ANOVA- overall rating of LIC by respondent premium paid 166
5.5 One-way ANOVA- overall satisfaction rating of LIC by respondents’
age 170
5.6 One-way ANOVA- overall rating of LIC policy by occupation 174
5.7 One-way ANOVA- overall rating of LIC by respondents’
qualifications 178
5.8 One-way ANOVA- overall rating of LIC policy by amount of
premium paid 182
5.9 One-way ANOVA-overall rating of LIC services by respondents’ age 186
5.10 One-way ANOVA-overall rating of LIC services by respondents’
occupation 190
5.11 One-way ANOVA-overall rating of LIC services by respondents’
qualification 194
5.12 One-way ANOVA-overall rating of LIC services by amount of
premium paid 198
5.13 Multiple regression on overall satisfaction rating of the various LIC
products offered by product variables 202
5.14 Multiple regression on overall satisfaction rating of the LIC services to
customers by services variables 208
5.15 Multiple regression on overall satisfaction rating of the LIC functions
to customer by product 214
5.16 Multiple regression on overall satisfaction rating of the LIC functions
by service variables 221
5.17 Reliability of scales and item-construct loadings factors related to
preference of policy holders to the services of the LIC 227
LIST OF CHARTS
CHART
NO TITLE
PAGE
NO
1 Gender of the respondents 102
2 Age group of the respondents 103
3 Marital status of the respondents 104
4 Type of family of the respondents 105
5 No. of family members of the respondents 106
6 Occupation wise classification of the respondents 109
7 Educational qualification of the respondents 110
8 Monthly income of the respondents 111
9 Residential area of the respondents 112
10 Assets of the respondents at present 115
11 Preference to investment of the respondents 116
12 Purpose of taking insurance of the respondents 117
13 Influence of persons to take insurance of the respondents 118
14 Purpose of buying an insurance policy of the respondents 119
15 Type of plan of the respondents 122
16 No. of policy of the respondents 123
17 Value of sum assured of the respondents 124
18 Amount of premium of the respondents 125
19 Premium paid by the respondents 128
20 Method of premium paid by the respondents 129
21 Mode of payment by the respondents 130
22 Histogram dependent variable-overall satisfaction rating of
the various products offered)
206
23 Path diagram shows the overall satisfaction rating of LIC
products by its product variables
207
24 Histogram dependent variables; overall satisfaction rating
of the LIC services to customer
212
25 Path diagram shows overall satisfaction rating of LIC
services by its services variables
213
26 Histogram dependent variables: overall satisfaction rating
of the LIC services to customer
219
27 Path diagram shows overall satisfaction rating of LIC
performance by its significant product variables
220
28 Histogram dependent variables; overall satisfaction rating
of the LIC services to customer
225
29 Path diagram overall satisfaction rating of LIC
performance by its significant services variables
226
Certificate
Declaration
Acknowledgement
Content
List of Tables
List of Charts
Chapter – I
Chapter – II
Chapter – III
Chapter – IV
Chapter – V
Chapter – VI
Appendix
Bibliography
1
CHAPTER – I
INTRODUCTION AND RESEARCH DESIGN
1.1 INTRODUCTION
The life insurance sector is an important cornerstone to the Indian
economy. It plays a significant role in mitigating life’s uncertainties and
acts as an instrument of security, savings and peace. India holds 18th
position in the global life insurance market and India is still an under-
insurance country. The ratio of life insurance premium to gross domestic
product (GDP) is around four per cent against sixty nine per cent in the
developed countries and it is estimated to touch 6.2 per cent by 2012
given the sheer geographical spread of the country and its immense
population, there is a vast market that remains yet to be tapped and this
provides a plenty of opportunity to different players for growth. Insurance
industry was a government’s monopoly. It is now experiencing cutthroat
competitions because, a number of players have entered into the Indian
market in the form of joint ventures with Indian private sector partners.
Consequently, Indian Insurance industry is closely integrated with world
economy thereby making it imperative for insurance companies to
operate outside national boundaries. During the long monopoly regime,
the government attempted minor changes in the procedures without going
into the root cause. The insurance market in India is currently in the
throes of radical change.
Close to 80 per cent of Indians do not hold an insurance policy,
according to a recent survey. Agricultural and rural areas remain largely
untouched. But changing government policies and an influx of private
and foreign players means the industry is on the brink of a boom. Strong
2
competition and innovative products is what defines India’s still small but
rapidly growing insurance sector today. The insurance sector is a colossal
one and is growing at a speedy rate of 15-20 per cent. Together with
banking services, insurance services add about 7 per cent to the country’s
GDP.A well-developed and evolved insurance sector is a boon for
economic development as it provides long-term funds for infrastructure
development at the same time strengthening the risk taking ability of the
country. The contours of insurance business have been changing across
the globe and the rippling effects of the same can be observed in the
domestic markets also. Insurers are increasingly introducing innovative
products to meet the specific needs of the prospective policy holders.
Innovations have come not only in the form of benefits attached to the
products, but also in delivery mechanisms which have emanated from
various marketing tie-ups both within the realm of financial services and
outside. All these have taken life insurance closer to the customers’s well
as making it more relevant.
Life insurance had its origins in ancient Rome, where citizens
formed burial clubs that would meet the funeral expenses of its members
as well as help survivors by making some payments. As European
civilization progressed, its social institutions and welfare practices also
got more and more refined. With the discovery of new lands, sea routes
and the consequent growth in trade, medieval guilds took it upon
themselves to protect their member traders from loss on account of fire,
shipwrecks and the like. The first stock companies to get into the business
of insurance were chartered in England in 1720. The year 1735 saw the
birth of the first insurance company in the American colonies in
Charleston, SC. In 1759, the Presbyterian Synod of Philadelphia
sponsored the first life insurance corporation in America for the benefit of
3
ministers and their dependents. However, it was after 1840 that life
insurance really took off in a big way. The trigger: reducing opposition
from religious groups.
1.1.1 Insurance
Insurance may be described as a social device to reduce or
eliminate risk of loss to life and property. Insurance is a collective
bearing of risk. Insurance spreads the risks and losses of few people
among a large number of people as people prefer small fixed liability
instead of big uncertain and changing liability. Insurance is a scheme of
economic cooperation by which members of the community share the
unavoidable risks.Insurance can be defined as a legal contract between
two parties whereby one party called Insurer undertakes to pay a fixed
amount of money on the happening of a particular event, which may be
certain or uncertain. The other party called Insure or Insurant pays in
exchange a fixed sum known as premium. The insurer and the insurant
are also known as Assurer or Underwriter and Assurant, respectively. The
document which embodies the contract is called the policy.
1.1.2 Life Insurance
Life is full of risk and uncertainties. Since we are the social human
beings we have certain responsibilities too. Indian consumers have big
influence of emotions and rationality on their buying decisions. They
believe in future rather than the present and desire to have a better and
secured future, in this direction life insurance services have its own value
in terms of minimizing risk and uncertainties. Indian economy is
developing and having huge middle class societal status and salaried
persons. Their money value for current needs and future desires here the
pendulum moves to another side which generate the reasons behind
4
holding a policy. Here the attempt has been made in this research paper to
study the buying behaviour of consumers towards life insurance services.
Life insurance is one of the best known insurance products today. People
buy these products as investment tools and also as protection for
themselves and their families. All the insurance companies the world over
are looking at attracting the eye balls of customers’ and positioning their
solutions innovatively to cater to niche and specific markets. One of the
most critical aspects both from the view point of the customers’ and the
insurer is getting important and relevant leads that can be beneficial for
both.
1.1.3 Insurance in India
Insurance in India can be traced back to the Vedas. For instance,
Yogakshema, the name of Life Insurance Corporation of India's corporate
headquarters, is derived from the Rig Veda. The term suggests that a form
of "community insurance" was prevalent around 1000 BC and practised
by the Aryans. Burial societies of the kind found in ancient Rome were
formed in the Buddhist period to help families build houses, to protect
widows and children. It was during the Swadeshi movement in the early
20th century that insurance witnessed a big boom in India with several
more companies being set up. As a result, the government decided to
nationalize the life assurance business in India. The Life Insurance
Corporation of India was set up in 1956 to take over around 250 life
companies. For years thereafter, insurance remained a monopoly of the
public sector. It was only after seven years of deliberation and debate –
after the RN Malhotra Committee report of 1994 became the first serious
document calling for the re-opening up of the insurance sector to private
players that the sector was finally opened up to private players in 2001.
5
1.1.4 Life Insurance Corporation of India
The LIC is the biggest player in the life insurance market with
approx. 65% market share. The Parliament of India passed the Life
Insurance Corporation Act on the 19th of June 1956, and the Life
Insurance Corporation of India was created on 1st September, 1956, with
the objective of spreading life insurance much more widely and in
particular to the rural areas with a view to reach all insurable persons in
the country, providing them adequate financial cover at a reasonable cost.
LIC continues to be the dominant life insurer even in the liberalized
scenario of Indian insurance and it is moving fast on a new growth
trajectory surpassing its own past records. LIC has issued over one
corepolicies during the current year. LIC has crossed many milestones
and has set unprecedented performance records in various aspects of life
insurance business.
1.1.5 INSURANCE SECTOR REFORMS IN INDIA-1999 THE
INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY
In the year 1993, Government of India set up a committee under
the chairmanship of Malhotra, on insurance reforms. In the wake of
reform processes the committee strongly felt that it would be desirable to
open up the insurance industry for competition. In view of liberalization
and globalization, Insurance sector in India has been opened up for
private and foreign players (domestic and global) by passing the
Insurance Regulatory and Development Authority (IRDA) act 1999. The
entry of global players has to be in the form of joint ventures and that of
domestic companies as per the act IRDA issued licenses to regulate
business. The IRDA is given the role to protect the consumers’ interests,
to ensure financial soundness of the insurance industry and enable healthy
6
growth of the insurance market, private insurance players have increased
the number of options available to a person who want to invest in an
insurance policy. Innovative products, smart marketing, cost
effectiveness, aggressive distribution and quick response have enabled
fledging private insurance companies to sign up Indian customers’s
faster than any one expected. In India more than 23 players are doing
business in the insurance sector.
The entry of new players not only, pegs up the level of competition
in the industry but also calls for higher investments on distribution and
infrastructure net work by the existing players. Recognition for life
insurance corporation brand continues to grow by leaps and bounds.
Today life insurance means Life Insurance Corporation in the minds of a
majority of people (Hari Govind Mishra, 2006). Today Life Insurance
Corporation of India is a multidimensional organization offering
individual life insurance, grape insurance, pension and gratuity schemes,
housing loans and mutual fund schemes. It also operates in countries like
Fiji, Mauritius, UK, Nepal, Bahrain and Sri Lanka.
Insurance is in service sector. The main focus of insurance is on
the efficient and effective delivery of services to the policy holders. The
most important factor in the insurance industry is the security of amount
insured and customers’ satisfaction.
7
1.2 NEED FOR THE STUDY
India is a country where the average selling of Life insurance
policies is still lower than many Western and Asian countries. Before the
opening of Indian market for Multinational Insurance Companies, Life
Insurance Corporation was the only company which dealt in Life
Insurance and after opening of this sector to other private companies, all
the world leaders of life insurance have started their operation in India.
With their world market experience and network, these companies have
offered many good schemes to pull all type of Indian consumers but
unfortunately failed to get the major share of market. Still the LIC is the
biggest player in the life insurance market with approx 65% market share.
In the competitive insurance market, LIC have to retain their strong hold
in the insurance sector in the heavy competitive field by the way of to
check the customers’ perception and their attitude towards the Life
insurance corporation and its various life policy. Therefore the researcher
has raised the following research questions and attempt to answer. What
are the factors contribute the consumer preference towards LIC product?
How the personal and demographic factors influence the preferences of
LIC and its product? What are the major dimensions of customers’
preferences about the LIC and policies? What are the factors which play
major role in buying behaviour of consumers towards life insurance
policies?
1.3 OBJECTIVES OF THE STUDY
The main objectives of the study are:
1. To find out the policy holders’ preference of LIC products.
2. To study the socio economic conditions of the policy holders in
Namakkal District.
8
3. To study the customers’s awareness regarding the various life
insurance Policies.
4. To study the impact of various demographic factors on the
preferences of LIC Product.
5. To identify the factors influencing customers’ perception
regarding LIC products.
6. To find out the extent of customers’s’ satisfaction.
1.4 HYPOTHESIS
1. There is no significant relationship between age and awareness
regarding the various life insurance policies.
2. There is no significant relationship between occupation and
awareness regarding the various life insurance policies.
3. There is no significant relationship between Educational
qualification and awareness regarding the various life insurance
policies.
4. There is no significant relationship between Monthly income and
awareness regarding the various life insurance policies.
5. There is no significant relationship between gender and
awareness regarding the various life insurance policies.
6. There is no significant relationship between demographic
variables and policy holder’s perception towards life policy and
services.
7. There is no significant relationship between demographic
variables and impact on policyholder’s satisfaction.
9
1.5 METHODOLOGY
1.5.1 Sampling Techniques
1. Systematic random sampling
Systematic random sampling technique was used in this study. In
this method, the sample is formed by selecting the first unit at random
and then selecting the remaining items at evenly spaced intervals. There
are five Taluks and five LIC Branches in Namakkal District.
In each LIC Branch, a list of 500 LIC Policy holder’s Name and
address was collected. Among 500 Policy holder’s, 100 respondents were
selected in each branch under systematic random sampling Method. So,
the total number of respondents (Policy holders) selected for this study is
500.
NAMAKKAL DISTIRCT
Namakkal Branch
Rasipuram Branch
Tiruchengode Branch
Paramathivelur Branch
Kumarapalayam Branch
Policy Holders 500
Policy Holders 500
Policy Holders 500
Policy Holders 500
Policy Holders 500
Respondents Selected
Respondents Selected
Respondents Selected
Respondents Selected
Respondents Selected
100 100 100 100 100
10
1.5.2 Area of the Study
This study was limited in the way analyzing policy holder’s
preference only on Life Insurance Corporation (LIC) in Namakkal
District. Even many Private Insurance Corporations are available in
Namakkal District, this study takes LIC only for the study.
1.5.3 Tools Used
1. Descriptive Statistics:
a) Per centage
b) Mean
c) Median
d) Standard deviation
2. T-statistic
3. ANOVA
4. Multiple regression
5. Reliability analysis
Analysis of the data: After the data collection was over, the
researcher analyzed the collected data with the help of statistical packages
such as SPSS 20, (statistical package for social science).The collected
data was analyzed through simple statistical tools like mean, standard
deviation. To measure internal consistency (reliability) of the data
Cronbach Alpha test has been employed. The following statistical tools
were used to analyze the data. Frequency Tables: simple frequency
tables were applied which showed the position of the various personal
demographic information and policy holder’s preference of LIC Products.
Descriptive Statistics: Descriptive statistical tools such as per centage,
Mean, Median and Standard deviation have been used to describe the
profile of consumers, preferred attributes and level of satisfaction. T-
statistic: A t-test was conducted on the results of the survey in order to
compare the means of the ranks for the factors or sources of information
11
to find out the most important factor influencing the policy holder to take
purchasing decision. ANOVA: It is carried to study the variance of the
factors of attributes that influence the most, among the various
demographic groups. Multiple regressions: the multiple regression test
was conducted for the purpose of finding the most preferred factor among
the product variables and service variables. It is also used to find the
impact of personal and demographic information of policy holders on
their overall preference. More over, Reliability analysis with
measurement model of confirmatory factor analysis was utilized to
measure the multidimensional preference of policy holders of LIC
products.
Reliability Analysis The reliability of scales used in this study were
calculated by Cronbach's coefficient alpha. Cronbach’s alpha reliability
coefficient normally ranges between 0 and 1. However, there is actually
no lower limit to the coefficient. The closer Cronbach’s alpha coefficient
is to 1.0 and the greater the internal consistency of the items in the scale.
The coefficient alpha values exceeded the minimum standard of 0.70. It
has provided good estimates of internal consistency reliability.
• The formula is as follows:
• K is the number of items in the scale.
• R is the average correlation pairs of items.
• As the number of items in the scale (k) increase, the value of alpha
becomes larger.
• If the inter-correlation between items is large, the corresponding
alpha will also be larger.
rk
kr
)1(1
12
1.6 LIMLTATIONS OF THE STUDY
It is but natural that any research investigation suffers from certain limitations,
which warrant an attitude of caution and healthy skepticism about its findings. Such
limitations are:
The survey is conducted only in the Namakkal District of Tamil Nadu state.
Due to time constraints, the size has been restricted to 500 but adequate care has been
taken to collect data. Hence, the results arrived at from the study may or may not be
applicable to other districts. Further, the survey method which is adopted for
collecting the data in this study has its own limitations.
The second category is that the reliability of the study depends on the true
response of the life insurance investors.
Another limitation is that the study is confined to individual life insurance
policies due to lack of information and details regarding other types of policies.
1.7 CHAPTER ARRANGEMENT
First Chapter: Introduction of the study
First chapter, describes design and execution of the study: It
includes the evolution of Insurance, importance of Life insurance,
statement of problem, objectives of the study, hypotheses framed, ,
methodology and scope of study are stated.
Second Chapter: Review of Literature and area of the study
Second chapter deals with review of literature and profile of the
study area.
Third Chapter: Profile of Life Insurance Corporation of India
Third chapter explains the profile of Life Insurance Corporation of
India and its branches in different areas in Namakkal District, the range
of products offered by the Life insurance Corporation of India. Life
13
insurance Corporation of India and different poroducts on LIC are
discussed.
Fourth & Fifth Chapter: Analysis and interpretation data
Fourth chapter analysis the primary data. The computerized
analysis was done at different stages. The impacts of personal,
demographic and rational variables are analyzed. The overall policy
holders’ perception of the Life insurance Corporation of India and the
level of satisfaction are evaluated.
Fifth Chapter: Findings, suggestions and conclusion
Fifth and last chapter brings out the findings, suggestions and
conclusion. Based on the previous chapters and analysis of data, the
researcher has given the findings, conclusion and suggestions.
14
CHAPTER – II
REVIEW OF LITERATURE
N.K. Sharma and V.S. Kannan Kamala Nathan (2011)1
Comparative Study of Life Insurance Companies: The Indian insurance
industry was thrown open to competition and private sector in the year
2000. The opening up of the industry has helped insurance customers’ in
general and the private insurers in particular. The private insurers have
been growing on an average of 77% since its inception. People purchased
private sector’s insurance products mainly because of their professional
approach and better service.
Dharmendra Singh (2011)2 Factors Affecting Customers’
Preferences for Life Insurers: An Empirical Study: The study aims to
identify the factors influencing the selection of insurance company for
purchasing the policy. An attempt has been made to study the customers’
buying behaviour with a focus on determining the factors affecting the
consumers’ preference for insurance companies. The variable for the
selection of a company consisted of 7Ps of services marketing, which
services providing companies like insurance companies are assumed to
have given due importance. The respondents were queried about the
factors which strongly influence their choice of a particular company.
The findings were analyzed using ANOVA tests for each of the 7Ps.
Findings reveal that product features, accessibility, low premium amount,
advertising, proper redress of complaints and better claim settlement are
some of the factors that drastically influence the choice of a company.
Frank and Enkawa (2009)3 This article strives to find out how
economic processes influence customers’ satisfaction. The study
15
examines the separate impacts of economic growth and economic
expectations on perceived value, quality expectations and customers’
satisfaction. The analysis reveals that customers’ satisfaction is positively
influenced by economic growth and negatively by current economic
expectations. The results show a strong correlation between economic
expectations and (overall and industry-specific) quality expectations.
Meirovich and Bahnan (2008)4 study the links between quality
and consumers' emotions and eventually with their satisfaction. This
study introduces two components of total quality structure; quality of
design and quality of conformance, for analysis of the link between
quality and customers’ emotions. The results show that there is a
significant relationship between possible combinations of two quality
dimensions and customers’ affective responses in terms of both their
valence and intensity. An interesting finding of this study suggests that
customers’ value quality of conformance higher than quality of design.
Gopalakrishnan (2008)5 in his article entitled, “The Insurance
Customers’ – The Customers’ Protection Act, 1986”, portrays that post
sales services- reminders on the renewal of premium, furnishing of
required data, claim servicing and response to customers’ needs – and the
amount of claim received influence the satisfaction level of the
policyholders.
LIC Survey (2008)6 Reveal that customized services, high quality
contract and high quality dissemination of information influence the
satisfaction of high premium paying customers’s.
16
Sunayna Khurana (2008)7 in his article, “Customers’ Preference
in Life Insurance Industry in India”, perceives that effective information
of products and services, efficient claim settlement and fair grievance
redressal system boost the satisfaction level of policyholders.
Nageswara Rao and madhavi (2007)8 in their study “An over
view of the private Insurance Company” divulge that appropriate
communication, extended customers’ service, human approaches,
immediate attention to the customers’ requests and availability of
products with less formalities highly influence the satisfaction level of the
customers’.
Alok Mittal and Akash kumar (2007)9 in their study entitled,
“An Exploratory study’s of factors Affecting Selection of life insurance
products”. Perceives that offering of innovative schemes and effective
handling of complaints lead to higher customers’ satisfaction
VOICE Survey(2006)10 on “Customers’ satisfaction in Insurance
sector,” reveal that courteous behaviour of employees, concentration to
consumers interest, fair redress system, and efficient claim settlement
gain the customers’ base enhance their level of satisfaction.
Song Hongmei (2006)11 in his article, “Insurers Score Low in
Client Satisfaction”, reveals that availability of products at affordable
price and after sales services – clients settlement, response of employees
and agents on customers’ request and effective complaint redressal –
influence the satisfaction of life insurance policyholders on the services
of their insurer.
17
Amit Kumar Chakravarathy (2006)12 in his article entitled, “The
efficiency of LIC during the post Liberalization and Globalization period.
A case study of West Bengal” reveals that the services of agents timely
information about the premium due, assistance in payment of renewal
premium, response to customers’ problem and guidance to clients’
request influence the satisfaction of customers’ and also in procuring
business.
Jagannath and Santhosh Singh Bais (2006)13 in their article
entitled, “Customers’ Satisfaction in Insurance Sector” depict that timely
response to customers’ needs and efficiency to offer the services at the
lowest price with best quality appraise the satisfaction level of
customers’.
Evangelos Tsoukatos and Rand Graham K (2006)14 in their
study titled, “Path Analysis of Perceived Service Quality, Satisfaction and
Loyalty in Greek Insurance”, reveal that reliability, assurance, empathy,
and responsiveness influence customers’ satisfaction while word of
mouth is an antecedent of repurchasing intentions and satisfaction
indirectly influence the latter.
Gordon, Dougall and Terrence Lepesque (2006)15 in their article
entitled, “Customers’s Satisfaction in Service Quality”, state that core
service quality and perceived value are the most important drivers of
customers’s’ satisfaction with relational service quality, a significant but
less important driver.
18
Pramod Pathak and Saumya Singh (2005)16 in their study “Life
Insurance corporation: The leader on the back foot” pointed out,
Traditionally, insurance has been serving ‘protection’ as well as ‘savings’
needs of customers’ with a variety of products .Riders have facilitated
packaging these two elements to offer more beneficial and
comprehensive solution to customers’. It is a win-win situation when
customers’ appreciate the nuances of product configurability and insurers
ensure preparedness of their service delivery mechanism. (Nalini Prava
Tripathy Prabir Pal (2008) – Insurance theory and practice).
Gayathri, Lakshmisha and vinaya (2005)17 in study entitled, “A
pilot study on the services quality of insurance companies”, reveal that
assurance followed by empathy and reliability are the important
determinants that affect the satisfaction levels of the policy holders in
LIC, ING, VYSYA, TATA and HDFC. In addition, tangibles in LIC and
responsiveness in TATA and HDFC contribute to the satisfaction levels.
Rajesh C Jampala and B H Venkateshwara Rao (2005)18
examined the performance of LIC due to competition; they stated that
LIC had withstood the competitive pressures with ease. LIC has
concentrated on the rural sector having recognized immense insurance
potential. The overall performance in terms of policies marketed, sum
assured and rural new business is quiet commendable. LIC is for ahead
of its competitions and it is no exaggeration to state that it may be a day
dream for new insurers to out perform LIC even in the far future. The
rural new business has registered good growth rate as compared to new
players.
19
Mony (2005)19 in the article entitled, “New Initiatives in the
insurance sector : opportunities and challenges”, Reveals that structural
efficiencies coupled with friendly approach and transparency in claims
handling are the drivers for customers’ satisfaction
Das and Samanta (2005)20 consider customers’ satisfaction as a
business survival requirement. The results identify eight factors which
could reflect the customers’ satisfaction level. These are productivity,
quality of delivery, meeting delivery schedule, technical support,
communication, proactive or promptness in response, skill level and
domain knowledge. The authors propose a customers’ satisfaction index
using principal component analysis.
Raman and Gayathri (2004)21 in their research paper had found
out the awareness about new insurance companies and preference of
investors towards investments in insurance companies in future. The
major findings of the research are that the majority of the respondents
have taken insurance to cover risk and also have taken up policies other
than LIC. It is also observed that majority were aware of the new
insurance companies, more over they opted for new companies due to
reasonable premium.
Ayyar, N. (2004)22 Points out that there are three necessary
preconditions for the creation of successful self-financed health insurance
schemes for large poor, rural and informal sector populations:-
1. A system for the mobilization of the widely dispersed poor
population.
2. Design of an administrative vehicle or system to register
subscribers, collect premiums and Issue industry cards.
20
3. Existence of an adequate healthcare delivery infrastructure.
Designing chart- demand-oriented product is a must for the
successful implementation of any scheme.
Banu, V. (2004)23 Pointed out, A report by the CII and Ernst &
Young in 2008 has seen micro-insurance as a suitable aid to reach the
poor and the socially disadvantaged. Out of Rs. 2 Lakh crore premiums
collected in 2010, only Rs. 300 crores of premiums pertain to micro
insurance. The report has suggested deepening of markets for micro-
insurance by the industry. Rural banks can help in this ‘insurance
Inclusion’ as they have done in financial inclusion in this country for
people living below the poverty line. Micro insurance is a great tool in
India to manage risk. It is a switchover from the classes to the masses.
IRDA’s micro-insurance regulations are the catalysts in this direction.
Sincere implementation of these regulations is the sure key to success. In
the golden words of Prof. Dr.C.K Prahalad,” improving the lives of the
billions of people at the bottom of the pyramid is a noble endeavour. It
can also be lucrative.” To quote Prof. Dr.C.K Prahalad,” the bottom of
the pyramid is large and long; and is currently un-served and under-
served”
Shohit and Sanjay Shukla (2004)24 analyzed the failure of private
insurance players in rural areas. Their study revealed that there are major
differences in the objectives and expectations among rural and urban
policy holders. They found that in rural area private players have still not
achieved much success and have failed to catch the pulse of rural India as
compared to public sector players. In urban area consumers belonging to
middle income group prefer policies of public sector players and only
high income group preferred private sector players. The study also
21
revealed that in urban area, services provided at doorstep and efficient
customers’ services were the two major reasons which helped market
penetration by private players.
Agarwal (2004)25 in his article briefly discusses the various
channels of distribution and new avenues being explored by the new
players in the insurance sectors. He views that a customers’ may have
expectation like value added services development of new products,
technology insurance, solvency financial security, quality trained staff
etc., though customers’ satisfaction may be provided by maintaining high
professional standards and nationalized procedure etc. Yet it requires a
new paradigm.
Mathur, S.B (2003)26 in his study points out that the Insurance
market is characteristiced by competition and insurance companies are
trying their best to exploit all available potential. Therefore, there is need
for imaginative new and services products which are customers’ –friendly
and need- centric. Fuelled by globalization, there is now increasing trend
world- wide to privatize Infrastructure products and tender these project –
financed basis. As per latest reports, companies that build roads, ports,
power projects can now raise credit up to $500 million from market
abroad to finance projects in India. The bulk funds invested in large and
infrastructure projects promote economies of scale, promotes economic
development and growth and other economic developments.
Sathya swaroop Dabasish (2003)27 explains that with the
privatization of insurance in India, the insurance industry is slowly
becoming cluttered with numerous private joint ventures. This study
makes an attempt at identifying the key factors responsible for customers’
22
preference for life insurance products in India. The opinion of 600
customers’ on 20 variable/reasons for preference of life insurance were
measured from 45 designated insurance agents of various life insurance
companies of LIC, ICICI prudential, HDFC standard, ING vysya and
Allianz Bajaj. Using the technique of factor analysis this study identified
five major factors. Risk – return factor, promotional factor, service
quality factor, consumer expectation factor and core product factor in the
order of preference. The study identified that out of 20 variables, 7
variables such as Advertisement, Agent recommendation, safety of the
scheme, Transparency, Performance Guarantee, Regular income and
Assured return are highly preferred by the customers’. 10 variables have
moderate preference level and remaining three variables with slight
preference level. A prudent product design, by adding the feature
expected by investors and spelt out in this research will make the new life
insurance product more attractive for the investors.
Thiripurasundari (2002)28 in her study has analyzed the attitude
of policy holders towards the services of LIC branch office of
Mayiladuthurai town in Tamil Nadu. The level of satisfactions’ of policy
holders relating to the rate of bonus and response of the branch office
with regard to various aspects are satisfactory majority of the respondents
expressed their opinion towards the rate of premium as normal and bonus
as moderate of the expiry of maturity period.
Chandra Mohan (2002)29 has found out in his study that the Life
Insurance Company in India is the market leader in the life Insurance
business in Erode District of Tamil Nadu. According to him, the
development officers of the company are the main selling force for life
policies with their experience in sales, social club connections, personal
23
observation of situations and information gathered through friends and
relatives they are able to sell the policy effectively, socio-economic
factors like community, education, income, occupation and wealth had a
direct influence on the buyers and the buyers’ satisfaction level was
found to be good.
Shika Sharma (2002)30 studied about the changing face of Life
Insurance in India. It was revealed that the private players in the under
insured country had raised awareness levels by introduction of innovative
products and by increasing the penetration level, He found that the
consumer was the biggest beneficiary of the competition by a wide range
of products, customers’ focused services and professional advice. It also
stated the necessity of the heightened awareness and consumer education.
He added that there was a vast improvement in service, attitude and
delivery due to raised service levels and technology. He concluded that
the face of Life Insurance has changed due to the challenges in the
industry and credible player will survive.
Dhurva, Mukesh and Rajan A. Kumar (2002)31 in their study
stated that, “Insurance Companies join hands with those institutions that
are engaged in preventing the losses of the society and also are
themselves engaged in taking various measures of improving the risk
factor and implementing a health-micro-insurance programme for the
rural people. This assists in reducing the premium, which means more
business and protection to the masses, thus contributing to the financial
health of the organization itself and of other organizations
24
Insurance Companies provide capital to the society by investing its
accumulated funds in various productive channels. The industries, the
business and the Individuals are benefited by the investments and loans of
the insurers.
The authors Pradeep Gupta and Sanjoy Bhyna (2002)32
discussed the challenges and strategies in the Insurance Industry in India.
An attempt was made to know the marketing position of different
insurance brands and business practices codes given by IRDA to maintain
some minimum standard. As per study after liberalization in November
1999, awareness of LIC brand shows 100% as against ICICI prudential
awareness 70% next HDFC stands 52% etc.,
Mittal and Anil (2002)33 examined the impact and perspective of
insurance sector before and after privatization in the pre-privatized era,
Life Insurance Corporation dominated the marketing. This period was
witnessed by low penetration of insurance lack of agents, productivity, in
efficient customers’ services and more customers’ complaints, in the
privatized scenario more private companies entered into the fray with
foreign joint ventures’.
These companies offered innovative products, conformed services
and professional back up there by enhancing customers’ satisfaction. The
analysis revealed the awareness of public forwards. In insurance has
increased to even after privatization the public trend to choose Life
Insurance Company in contrast to various private companies, due to its
credibility.
25
Pavesh Paranish (2001)34 in his article briefly discussed the
various channels of distribution in the Life Insurance Industry in India
and new awareness being explored by the new players. Importance is
given to the customers’ not only for meeting for his requirement but also
the impact in times of fulfillment quality of service rendered,
complexities of products and so on, one of the recent experiments worth
explaining in bancassurance in the recent survey carried out by piece
water House Coopers on bancassurance. The following emerged as key
issues to improve effectiveness of the sales, channels of products need to
be tailored to conclude that, industry in transition, presents opportunities
that is also fraught will challenges of an unknown magnitude. Therefore,
only the best will survive in the long term which enables to spot emerging
trends and helps to capitalize the benefits of its customers’.
Vanniarajan and Jayakumaran (2000)35 in their research article
entitled “Discriminant Service Quality” among public and private players
in Life Insurance Marketing identifies distribution network, product and
reliability as key discriminate service quality factors that influence the
customers’ satisfaction among the public and private insurance players.
Malhotra (1996)36 under his Chairmanship, a committee on
reforms in the insurance sector was formed to discuss on the issues to
liberalize India’s insurance sector. According to MARG survey the
awareness level of various policies of both GIC and LIC is quite limited.
Secondly, a fair proportion of people are of the opinion that pearless
companies are offering only general insurance. Under general insurance
awareness of policy holders of the four subsidiaries range between 23%
and 67%. Thirdly, non-policy holders did not hold polices of in-ability to
pay the premium and did not perceive the need to acquire policy.
26
Fourthly, it is assumed that 75% of individual’s claims on LIC and 60%
of the GIC subsidiaries are settled with satisfaction. Fifthly, opinion on
rating the overall services of LIC on a fine – point scale is some what
better than those of GIC subsidiaries. Lastly, 90% of LIC agents 78% of
GIC agents expressed satisfaction of their career with the insurance
companies.
Muffatto and Panizzolo (1995)37 develop a framework for
customers’ satisfaction and provide a detailed description of the
relationship structure between the different elements of the organizational
structure. The authors propose a framework for the analysis of the
organizational processes related to customers’ satisfaction. The
framework has three sections; planning processes, design processes and
monitoring processes. This means using an integrative and holistic
approach, which optimizes the interaction of primary processes and
activities.
Mittal and Anil Chandhok (2001)38 attempted to study the impact
and perspective of insurance sector before and after privatization in the
pre-scenario privatization 75% of the business was generated in the
month of January, February and March for income tax saving while the
remaining 25% of the business was procured in the remaining nine
months. In the post-scenario privatization, private companies are likely to
target villages population which is almost untapped. A performance
survey regarding the number of policies sold for the year 2001 is
analyzed in (Ambala City, Kurukshetra, Karnal Branch 1 and 2) selected
branches of LIC in the state of Harayana. Findings of the study were that
85% of the majority of the business in the Life Insurance Sector is from
27
the male segment of the India population and only 15% of the female
population is insured.
Rajkumar (1985)39 views that advertising is influencing a
customers’, who has a limited spending power and it seems to operate
only through familiarizing, spreading news, over coming inertia and
image building. The prime objective of advertising is one among the
corporate image building improving market share, educating informative
and to have staff support.
28
FOOT NOTES
1. N.K. Sharma* and V.S. Kannan Kamala Nathan** (2011) *Faculty
Member, Department of E.A.F.M., University of Rajasthan, Jaipur
– 302 005. **Head of Department of Commerce & Vice-Principal,
KES Shroff College of Arts & commerce, Mumbai: Indian Journal
of Commerce, Vol. 64 No.1, January-March 2011, Pp. 97-101.
2. Dharmendra Singh (2011) Associate Professor, School of
Management Sciences, PO Kashipur, Biruha Gosaigani, 19th KM
Stone,Lucknow-Sultanpur (NH-56), Lucknow – 227 125, Uttar
Pradesh, India: BUSINESS STANDARD REPORTER (2011)30
Mumbai, 1June, 2011.
3. Frank,B.and Enkawa, T. (2009), "Economic influences on
perceived value, quality expectations and customer satisfaction",
International Journal of Consumer Studies, Vol. 33,No. 1, pp. 72-
82.
4. Meirovich,G.and Bahnan,N. (2008), "Relationship between the
components of product/service quality and the customers' emotions
and satisfaction", Journal of Industrial Engineering and
Management, Vol. 1, No. 2, pp. 186-208.
5. Gopalakrishnan G. (2008), “The Insurance Customer – The
Consumer Protection Act, 1986”, Irda Journal, Vol. VI (3), pp.33-
35.
6. LIC Survey (2008), “LIC to Develop Model for ‘High-end’
claints”, Financial Express, 1 st February, 2008.
7. Sunayna Khurana (2008),”Customers Preference in Life Insurance
Industry in India”, ICFAI Journal of service Marketing, Vol. VI.
(3), pp. 60-68.
29
8. “An overview of the private insurance company” Insurance Theory
and practice, Nalini Prava Tripathy and Prabir Pal, Prentice Hall of
India Private Ltd, New Delhi. PP 104-115.
9. Alok Mittal and Akash kumar (2007) An Exploratory studs of
factors Affecting Selection of life insurance products”. Insurance
theory and practice, Nalini prava Tripathy and prabir pal, prewtice-
hall of India private limited, New Delhi pp 72-81
10. VOICE Survey (2006) on “Customer’s satisfaction in Insurance
sector,” Consumer voice Vol 7(3) May-June.
11. Song Hongmei (2006) “Insurers score Low in Client Satisfaction”,
http://chindaily.com.cn, 22nd October.
12. The efficiency of LIC during the post liberalization and
Globalisation period – A case study of West Bengal, Business
Perspection Vol.8 (2) PP 25-39.
13. “Customer satisfaction in Insurance Sector” usmania Journal of
International Business Studies Vol.1 (2)
14. Evangelos Tsoukatos and Rand Graham k. (2006), “Path Analysis
of Perceived Service Quality, Satisfaction and Loyalty in Greek
Insurance”, Managing Service Quality, Vol.16 (5), PP 501 – 519.
15. Gorden H.G., Dougall M.C. and Terrence Lepesque (2006),
“Customers Satisfaction in Service Quality”, Vikalpa, Vol. V (2).
16. Pramod Pathak and Saumya Singh (2005), “Life Insurance
Corporation: The Leader on the Back Foot,” Chapter included in
Insurance: Theory and Practice, Prentice Hall of India pp. 38-49.
17. Gayathri, Lakshmisha and vinaya (2005) in study entitled “A pilot
study on the service quality of Insurance Companies” Journal of
Services research Vol.5 (2) PP 123-138.
18. Rajesh, C Jampala and BH .V.Rao, “The indomitable and
invincible LIC” Insurance chronicle, Aug 2005 pp 31-36].
30
19. Mony S.V (2005) “New Initiatives in the Insurance sector:
opportunities and challenges” Vikal pa Vol:30(3) pp 102 -105.
20. Das, N. and Samanta, N. (2005), "Evaluation of customer
satisfaction level of different projects", Quality Assurance: Good
Practice and Law, Vol. 11, No. 2, pp. 75-84.
21. Raman & Gayathri “A study on customers Awareness towards
New Insurance Companies”, Indian Journal of marketing Vol
XXXIV, January 2004, PP 6-8
22. Ayyar, N. 2004. A Spicy Bouquet of Benefits –New products and
Features of Life Insurers. IRDA Journal, May: 27-29.
23. Banu, V. (2004),” Quality of Service in Non-Life Insurance’,
Insurance Chronicle, April, pp.20-26.
24. Shohit and Sanjay.Shukla, “ An empirical study and analysis of
failure of private insurance players in rural areas “ Insurance
chronicle May 2004 pp 56-62].
25. Agarwal V.K” Insurance expectation in a liberalized insurance
market" Chartered secretary Aug 2004 –pp 238-240]
26. Mathur, S.B (2003),” Strategies…” IRDA Journal, December,
Vol, 11, No.1, pp. 29-30.
27. PARADIGM vol. VIII No. 2 July – December 2003 pp 91-103
28. Thripurasundari attitude of policy holders towards LIC. Kisan
world May 2002 VOl 29 No 5 pp21].
29. Chandra Mohan, “A study on marketing of Life Insurance Services
in Erode District of Tamil Nadu. “Submitted by Mr. Chandra
Mohan (under the supervision of Dr. L.Manivannan) to
Bharathiyar University in Dec. 2002.)
30. Shika Sharma “Changing face of Life Insurance in India, Insurance
chronicle, Dec.2002 PP 25-27.)
31
31. Dhurva, Mukesh and Rajan A. Kumar (2002),”Liberalization of
Insurance Sector: Social Implications”, Indian Management
Studies Journal, vol.6, pp .109-117.
32. Insurance Sector: Challenges and Strategies JIMS8M October –
December 2002 PP 40-44.
33. Mittal and Anil “Privatization of Life Insurance Sector in India
Impact and perspective” Indian Journal of marketing vol. XXXII
No.11 Nov 2002 PP 5-6, 14.
34. (Pavesh Paranish “Distribution of Life Insurance and Industry in
Transition” chartered Secretary, August 2001, PP 230-234)
35. Discriminant Service Quality among public and private players in
Life Insurance marketing journal of Insurance and risk
management. vol.V PP.(10)13- 26.
36. Malhotra RN Liberalizing India’s Insurance Industry” Chartered
Secretary Jan 1996 PP 1-11.
37. Muffatto, M. and Panizzolo, R. (1995), "A process-based view for
customer satisfaction", International Journal of Quality and
Reliability Management, Vol. 12, No. 9, pp. 15469.
38. Mittal and Anil Chandhok (2001) Privatization of Life Insurance
Section and impact and perceptions India found of marketing Vol.
XXXII No.11 No 2002 PP 5-7.)
39. Rajkumar “The role of insurance advertising” Indian Journal at
Marketing. Vol – XV No -2 July 1985 PP 21-33.
32
CHAPTER III
PROFILE OF COMPANIES IN LIFE INSURANCE
BUSINESS AND STUDY AREA
In this chapter an attempt has been made to briefly state the profile
of the companies which are doing life insurance business in India and
profile of the study area.
3.1 PROFILE OF COMPANIES IN LIFE INSURANCE BUSINESS
Insurance is one of the major segments of financial market. The
insurance business is unique in the sense that it is rewarded for managing
the risk of other parties. In India insurance sector is not only playing a
role within the financial system but also has a significant socio-economic
function of providing risk cover to the poor population. With the opening
up of Indian insurance market, competition has become intense. Every
company is trying to woo customers to have large chunk of the market
share but barring a few companies most of the new insurance companies
are struggling to survive in the market. Inspite of the importance of
insurance, it is still in nascent stage in India. Nearly 80 per cent of Indian
population is without Life insurance cover and the Health insurance, the
penetration rates of health and other non-life insurances in India are also
well below the international level.
3.1.1 CONCEPTUAL FRAMEWORK OF INSURANCE INDUSTRY
Insurance may be described as a social device to reduce or
eliminate risks to loss of life and property. Insurance is defined as a
cooperative device to spread the loss caused by a particular risk over a
number of persons who are exposed to it and who agree to ensure
themselves against that risk. The risk cannot be averted but loss occurring
33
due to certain risk can be distributed amongst the agreed persons. They
share the loss by payment of premium, which is calculated on the
probability of loss. Insurance is a system of protection against financial
loss in which risk is shifted to a professional risk bearer (an insurance
company), in exchange for a certain sum of money (the insurance
premium). The insurer agrees to pay the insured if loss occurs.
The earliest references of insurance have been found in Babylonia.
By the middle of 14th century, as evidenced by the earliest known
insurance contract (Geneva, 1347), marine insurance was practically
universal among the maritime nations of the Europe. In London, Lloyd's
coffee House was a place where merchants, ship owners and underwriters
met to transact business. By the end of the 18th century, Lloyd's had
progressed into one of the first modern insurance companies (Rajesham
and Rajender, 2006). In India, Manusmriti (200 BC) provides Indian
version of primitive marine insurance stipulating that "the trader should
be made to pay (taxes or duties)" to the state for providing Yogakshema
(Risk and safety) taking into consideration the terms of purchase, sale,
and the length of the journey, expenses and incidentals (Bodla et al,
2003). The insurance in its modern form came to India from UK, with the
establishment of the Oriental Life Insurance Corporation in 1818, which
failed in 1834. However, the success of Indian life insurance can be
traced back roughly to the second decade of the nineteenth century when
the Madras Equitable began transacting life insurance business in the
Madras Presidency in 1829. After that, it was a rather dull phase with
regard to the growth in life insurance enterprise. 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 established in India. Then the central
34
government took over these companies and as a result the LIC was
formed.
The history of general Insurance dates back to the Industrial
Revolution in the west and the consequent growth of sea-faring trade and
commerce in the 17th century. It came to India as a legacy of British
occupation. The General insurance business in India, 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, framed 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
January 1, 1973 and General Insurance Corporation of India (GIC) was
formed in pursuance of the Act. The existing 107 insurers were
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. These companies were formed as the fully owned
subsidiary companies of GIC. In 1999, regulatory body for insurance
sector was formed with the name of Insurance Regulatory and
Development Authority (IRDA) and the market was opened for private
players. With the entry of private insurers, the GIC subsidiaries were
delinked from the holding company in 2000, and a separate body called
General Insurers (Public Sector) Association (GIPSA) was created to
facilitate interaction among the four. The GIC was converted to function
as the National Reinsurer.
35
The first two decades of the twentieth century saw lot of growth in
insurance business. From 44 companies with total business-in-force as
Rs.22.44 crore, it rose to 176 companies with total business-in-force as
Rs.298 crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed
miserably. The Insurance Act 1938 was the first legislation governing not
only life insurance but also non-life insurance to provide strict state
control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered
momentum in 1944 when a bill to amend the Life Insurance Act 1938
was introduced in the Legislative Assembly. However, it was much later
on the 19th of January, 1956, that life insurance in India was nationalized.
Among 154 Indian insurance companies, 16 non-Indian companies and
75 provident were operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management
of the companies was taken over by means of an Ordinance, and later, the
ownership too by means of a comprehensive bill. The Parliament of India
passed the Life Insurance Corporation Act on the 19th of June 1956, and
the Life Insurance Corporation of India was created on 1st September,
1956, with the objective of spreading life insurance much more widely
and in particular to the rural areas with a view to reach all insurable
persons in the country, providing them adequate financial cover at a
reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch
offices, apart from its corporate office in the year 1956. Since life
insurance contracts are long term contracts and during the currency of the
policy, it requires a variety of services need was felt in the later years to
expand the operations and place a branch office at each district
36
headquarter. Re-organization of LIC took place and large numbers of new
branch offices were opened. As a result of re-organization servicing
functions were transferred to the branches, and branches were made
accounting units. It worked wonders with the performance of the
corporation. It may be seen that from about 200 crores of New Business
in 1957 the corporation crossed 1000 crores only in the year 1969-70, and
it took another 10 years for LIC to cross 2000 crore mark of new
business. But with re-organization happening in the early eighties, by
1985-86 LIC had already crossed 7000 crore Sum Assured on new
policies.
Today LIC functions with 2048 fully computerized branch offices,
109 divisional offices, 8 zonal offices, 992 satellite offices and the
corporate office. LIC’s Wide Area Network covers 109 divisional offices
and connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-line premium
collection facility in selected cities. LIC’s ECS and ATM premium
payment facility is an addition to customer convenience. Apart from on-
line Kiosks and IVRS, Info Centers have been commissioned at Mumbai,
Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune
and many other cities. With a vision of providing easy access to its
policyholders, LIC has launched its SATELLITE SAMPARK offices.
The satellite offices are smaller, leaner and closer to the customer. The
digitalized records of the satellite offices will facilitate anywhere
servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the
liberalized scenario of Indian insurance and is moving fast on a new
growth trajectory surpassing its own past records. LIC has issued over
37
one crore policies during the current year. It has crossed the milestone of
issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous
year.
From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance
business. The same motives which inspired our forefathers to bring
insurance into existence in this country inspire us at LIC to take this
message of protection to light the lamps of security in as many homes as
possible and to help the people in providing security to their families.
3.1.2 SOME OF THE IMPORTANT MILESTONES IN THE LIFE
INSURANCE BUSINESS IN INDIA ARE
In the year 1818 Oriental Life Insurance Company, the first life
insurance company on Indian soil started functioning.
In the year 1870 Bombay Mutual Life Assurance Society, the first
Indian life insurance company started its business.
In the year 1912 The Indian Life Assurance Companies Act was
enacted as the first statute to regulate the life insurance business.
In the year 1928 The Indian Insurance Companies Act was enacted
to enable the government to collect statistical information about both life
and non-life insurance businesses.
In the year 1938 Earlier legislation was consolidated and amended
to by the Insurance Act with the objective of protecting the interests of
the insuring public.
In the year 1956 245 Indian and foreign insurers and provident
societies were taken over by the central government and nationalized.
LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital
contribution of Rs. 5 crore from the Government of India.
38
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.
3.1.3 DEFINITION OF INSURANCE IN FINANCIAL SENSE
Insurance is a financial arrangement, which redistributes the costs
of unexpected losses among the members of the pool. The pool is a
collection of people facing common risks. All members contribute a fixed
amount towards a pool called premium. In exchange for the premium
payment, the person gets an assurance that a certain sum of money is to
be paid to him on the happening of the event insured against. The
assurance is that his loss will be made good. Thus, insurance involves the
transfer of loss exposures to an insurance pool and the redistribution of
losses among the members of the pool.
3.1.4 DEFINITION OF INSURANCE IN LEGAL SENSE
Insurance can be defined as a contract between two parties by
which one party undertakes to make good or indemnify any financial loss
suffered by other party, in consideration of a sum of money, on the
happening of a specified event e.g. fire, accident or death. We call the
party agreeing to pay for the losses of the insurer. We call the party
whose loss makes the ‘insurer’ Pay the claim the insured. We call the
payment insured pays to the insurer the premium. We call the insurance
contract a policy. In the end we can sum up that insurance is a transfer of
risk from the individual to the group and there is a sharing (pooling) of
losses on some equitable basis such that fortuitous losses can be
indemnified (paid).
39
3.1.5 PURPOSE AND NEED
Let us discuss in detail the purpose and need of insurance. As we
all know life is full of uncertainties and insurance is based on
uncertainties and if there are no uncertainties about the occurrence of a
disaster, the concept of insurance will cease to exist. If we all are able to
predict the future dangers correctly then we can take a safeguard action to
move out of the danger but problem is that we cannot predict death,
disaster and danger. All individuals as well as their tangible and
intangible assets are exposed to all types of unforeseen risks. Thus,
insurance is done against such possible contingencies to save the owner
and his family from all sorts of sufferings by making good the losses of
the unfortunate few, through the help of the fortunate many, who were
exposed to the same risk, but saved from the misfortune. As insurance is
a system of sharing risk that seems to be too great to be borne by one
individual we can list out the benefits derived by individual and society
from the insurance as:
1. Indemnifies loss.
2. Reduces worry and fear.
3. Makes available funds for investment.
4. Provides employment to a large number of people.
5. Educates people about loss prevention.
6. Insurance enhances credit worthiness.
7. Social benefits.
40
3.1.6 FEATURES OF THE PRODUCTS OF LIC OF INDIA
The object of this chapter is to analyze the features of the products
of LIC of India. to bring out the common features to differentiate its
products. For the purpose, the products of LIC of India were grouped
into children plans, plans for Handicapped Dependents, Endowment
Assurance plans, plans for High worth individuals, Money Back plans,
Special Money Back plans for women, Whole Life plans, Term
Assurance plans, joint life plan, Unit Linked Insurance plans and Golden
jubilee plan (Special plan). Certain terms used in this chapter are briefly
described as follows.
3.1.6.1 Auto cover
If two full year premium have been paid, any subsequent premium
be not duly paid, full death cover shall continue for a period of two years
from the date of First unpaid premium.
3.1.6.2 Cooling-off period
If a policyholder is not satisfied with the “Terms and Conditions”
of the policy, he/she may return the policy within 15 days from the date
of receipt of the policy.
3.1.6.3 Maturity benefit
Under maturity of a policy, a policyholder receives Sum Assured
plus bonus and loyalty additions if any.
3.1.6.4 Death Benefit
In case of death of a policyholder during policy term, sum assured
plus bonus will be paid to the nominee.
3.1.6.5 Waiting period
A waiting period of one year will apply from the date of
commencement of risk or revival of the policy to the birth of a
congenitally disabled child with congenital disabilities during a period of
one year from the date of commencement of risk or revival.
41
3.1.6.6 Reversionary bonus
The bonus is allotted as a uniform percentage addition to the sum
assured or sum assured plus existing bonus addition and is payable along
with the sum assured according to the terms of the policy.
3.1.6.7 Disability Benefit
The benefit is granted to all the lives assured excepting a few
policies such as Pure Endowment, the Temporary Assurance, Mortgage
Redemption Assurance, convertible Term Assurance, the deferred
Annuity, Retirement Annuity and Restrictive policies. The benefits are
offered free of cost and no premium is charged for the purpose.
3.1.6.8 Rider benefit
Additional benefits are made available through riders. Usually
riders provide for accident benefit, disability benefits, critical illness
rider, major surgical assistance benefit, hospital cash benefit. Additional
premium will have to be paid for these rider benefits.
3.1.6.9 Key man insurance
Key man insurance is generally a term life insurance policy, with
the length term being the time until that employee retires. The company
pays the premium on the policy receives the death benefits if the
employee unexpectedly dies. If the employee retires, the company may
choose to also surrender the insurance contract, giving the employee the
chance to convert the policy to a permanent one.
3.1.7 The Life Insurance Corporation Act, 1956
An Act to provide for the nationalization of life insurance business
in India by transferring all such business to a corporation established for
Life Insurance. The LIC came into being 1956 after the nationalization
and merger of about 250 independent Life Insurance Societies. It is head
quartered in Bombay (Mumbai). The LIC of India invests a considerable
part of its funds in shares and loans of the Industrial Finance Corporation
42
of India (IFCI), the State Financial Corporations and the shares and
debentures of joint stock companies. The corporation also undertakes to
underwrite the issue of shares of joint stock companies. The process of
nationalization of life insurance is divided into two parts.
i. Termination of personal management and
ii. Termination of ownership management (private)
3.1.7.1 Constitution of the Corporation
The Corporation consists of such number of persons not exceeding
(sixteen)as the Central Government may think fit to appoint thereto and
one of them shall be appointed by the Central Government to be the
Chairman thereof.
3.1.7.2 Capital of the Corporation
The original capital of the Corporation shall be five crores of
rupees provided by the Central Government after due appropriation made
by parliament by law for the purpose, and the terms and conditions
relating to the provision of such capital shall be such as may be
determined by the Central Government.
The Central Government may, on the recommendation of the
Corporation, reduce the capital of the Corporation to such extent and in
such manner as the Central Government may determine.
3.1.7.3 Function of the Corporation
It shall be the general duty of the Corporation to carry on life
insurance business, whether in or outside India, and the Corporation shall
so exercise its powers under this Act as to secure that life insurance
business is developed to the best advantage of the community such as:
i. To carry on capital redemption business, annuity certain business
or reinsurance business in so far as such reinsurance business
appertains to life insurance business.
43
ii. To invest the funds of the Corporation in such manner as the
Corporation may think fit and to take all such steps as may be
necessary or expedient for the protection or realization of any
investment; including the taking over of and administering and
property offered as security for the investment until a suitable
opportunity arises for its disposal;
iii. To acquire, hold and dispose of any property for the purpose of its
business.
iv. To transfer the whole or any part of the life insurance business
carried on outside India to any other person or persons, if in the
interest of the Corporation it is expedient so to do.
v. To advance or lend money upon the security of any movable or
immovable property or otherwise.
vi. To borrow or raise any money in such manner and upon such
security as the Corporation may think fit.
vii. To carry on either by itself or through any subsidiary any other
business in any case where such other business was being carried
on by a subsidiary of any insurer whose controlled business has
been transferred to and vested in the Corporation under Act;
viii. To carry on any other business which may seem to the Corporation
to be capable of being conveniently carried on in connection with
its business and calculated directly or indirectly to render profitable
the business of the Corporation;
ix. To do all such things as may be incidental or conducive to the
proper exercise of any of the powers of the Corporation.
In this discharge of any of its functions the Corporation shall act so far as
may be on business principles.
44
3.1.8 Transfer of Assets and Liabilities of Existing Insurers carrying
on controlled business
On the appointed day there shall be transferred to and vested in the
Corporation
The assets appertaining to the controlled business of an insurer
shall be deemed to include all rights and powers, and all property,
whether movable or immovable, appertaining to his controlled business,
including, in particular, cash balances, reserve funds, investments,
deposits and all other interests and right in or arising out of such property
as may be in the possession of the insurer and all books of account or
document relating to the controlled business of the insurer; and liabilities
shall be deemed to include all debts, liabilities and obligations of
whatever kind then existing and appertaining to the controlled business of
the insurer.
3.1.9 Application of the Insurance Act
The following sections of the Insurance Act shall, so far as may be
applied to the Corporation as they apply to any other insurer, namely
Section 2, 2B, 3, 18, 26, 33, 38, 39, 41, 45, 46, 47A, 50, 51, 52, 110A,
110B, 110C, 119, 121,122, and 123. The Central Government shall as
soon as may be after the commencement of this Act, by notification in the
official Gazette, direct that the following sections of the Insurance Act
shall apply to the Corporation subject to such conditions and modification
as may be specified in the notification, namely Section
2D,10,11,13,14,15,20,21,22,23,25,27A,28A,35,36,37,40,40A,40B,43,44,
102 to 106,107 to 110,111,113,114 and 116A.
(2A)Section 42 of the Insurance Act shall have an effect in relation
to the issue to any individual of a license to act as an agent for the
purpose of soliciting or procuring life insurance business for the
Corporation as if the reference to an officer authorized by the Controller
45
in this behalf in sub-section (1) thereof included a reference to an officer
of the Corporation authorized by the Controller on his behalf.
The Central government may, by notification in the Official
Gazette direct that all or any of the provisions of the Insurance Act other
than those specified in sub-section (1) or sub- Section (2), shall apply to
the Corporation subject to such conditions and modifications as may be
specified in the notification.
Every notification issued under sub-section (2) or sub-section shall
be laid for not less than 30 days before both the houses of Parliament as
soon as possible after it is issued, and shall be subjected to such
modifications as Parliament may make during the session in which it is so
laid or the session immediately following.
Save as provide in this section, nothing contained in the Insurance
Act shall apply to the Corporation.
3.1.10 Deduction of Income-Tax not to be made on Interest or
Dividend
Notwithstanding anything contained in Section 193 or Section 194
of the Income-tax Act, 1961 (43 of 1961), no deduction of income-tax
shall be made on any interest or dividend payable to the Corporation in
respect of any securities or shares owned by it or in which it has full
beneficial interest.
3.1.11 Special provision regarding Transfer of controlled Business of
Certain Composite Insurers
Notwithstanding anything contained in clause (c) of section 44, the
Central Government may, by notification in the Official, direct that on
and with effect from such date as may be specified in the notification the
assets and liabilities appertaining to the controlled business of composite
insurer in respect of the management of whose affairs an Administrator
has been appointed under Section 52 A of the Insurance Act shall be
46
transferred to and vested in the Corporation, and on the issue of such a
notification the provision of this Act shall, so far as may be, apply in
relation to such insurer and to the transfer and vesting of the assets and
liabilities of his controlled business in the Corporation as they apply in
relation to all other insurers and to the transfer and vesting of the assets
and liabilities of their controlled business in the Corporation, subject to
the modification that references in this Act to the appointed day shall be
construed as reference to the day specified in the notification.
3.1.12 Defects in Constitution of Corporation or Committees Not
Invalidate Acts or Proceedings
No Act of preceding the Corporation or of any committee of the
Corporation shall be called in question on the ground merely of the
existence of any vacancy or defect in the constitution of the Corporation
or Committee, as the case may be.
3.1.13 Protection of action taken under Act
No suit, prosecution or other legal proceeding shall lie against any
member or employee of the Corporation for anything which is in good
faith done or intended to be done under this Act.
3.1.14 Exception in the case of Insurance Business in respect of
persons residing outside India.
Notwithstanding anything contained in Section 30 or in the
Insurance Act, the Central Government may, by order, permit any person
who has made an application in that behalf, to carry on life insurance
business in India in respect of the lives of persons ordinarily resident
outside India. Subject to such restrictions and conditions as may be
specified in the order and any such order shall be deemed to have effect
as if it were a certificate or restrictions issued by the Controller to such
person under Section 3 of the Insurance Act in respect of that class of
business. Nothing in sub-section (1) shall authorize any person permitted
47
to carry on insurance business of the nature referred to in that sub-section,
to insure the life of any person ordinarily resident outside India, during
any period of his temporary residence in India.
3.1.15 Power to make rules
The Central Government may, by notification in the Official
Gazette, make rules to carry out the purpose of this Act. In particular, and
without prejudice to the generality of the foregoing power, such rules
may provide for all or any of the following mattes, namely:
i. The term of office and the conditions of service of members;
ii. the manner in which the moneys and other assets belonging
to any such fund as referred to in Section shall be
apportioned between the trustees of the fund and the
Corporation;
iii. The services which the chief agent should have rendered for
the purpose of the proviso to section 12;
iv. The terms and conditions of service of the employees and
agents of the corporation, including those who became
employees and agents of the Corporation on the appointed
day under this Act;
v. The jurisdiction of the Tribunals constituted under Section
17;
vi. The manner in which, and the persons to whom, any
compensation under this Act may be paid;
vii. the time within which any matter which may be referred to a
Tribunal for decision under this Act may be so referred to;
viii. The manner in which and the conditions subject to which
investments may be made by the Corporation;
ix. The manner in which an Employee and Agents Relations
Committee may be constituted for each zonal office;
48
x. The form in which the report giving an account of the
activities of the Corporation shall be prepared;
xi. The conditions subject to which the Corporation may
appoint employees;
xii. The fees payable under this Act and the manner in which
they are to be collected;
xiii. Any other matter which has to be or any prescribed.
The regulations and other provisions as in force immediately
before the commencement of the Life Insurance Corporation
(Amendment) Act, 1981, with respect to the terms and conditions of
service of employees and agents of the Corporation including those who
became employee and agents of the Corporation on the appointed day
under this Act, shall be deemed to be rules made under clause (cc) of sub-
mission (2) and shall, subject to the other provisions of this section, have
effect accordingly.
The power to make rules conferred by clause (cc) of sub-section (2)
shall include
i. The power to be given retrospective effect to such rules; and
ii. the power to amend by way of addition, variation or repeal, the
regulation and other provisions referred to in sub-section (2-A),
with retrospective effect, from a date not earlier than the
twentieth day of June, 1979.
(2-C) The provisions of clause (cc) of sub-section (2) and sub-section (2-
B) and any rules made under the said clause (cc) shall have effect, and
any such ruled made with retrospective effect from any date shall also be
deemed to have an effect from that date, notwithstanding any judgments,
decree or order of any court, tribunal or other authority and
notwithstanding anything contained in the Industrial Disputes Act, 1947
49
(14 of 1947) or any other law or any agreement, settlement, award or
other instrument for the time being in force.
Every rule made by the Central Government under this Act shall be
laid, as soon as may be after it is made, before each House of Parliament
while it is in session, for a total period of thirty days which may be
comprised in one session or in two more successive sessions, and if,
before the expiry of the session immediately following the session or the
successive session aforesaid, both Houses agree in making any
modification in the rule or both Houses agree that the rule should not be
made, the rule shall thereafter have effect only in such modified form or
to be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of
anything previously done under that the rule should not be made, the rule
shall thereafter have an effect only in such modified form or to be of no
effect, as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything
previously done under that rule.
3.1.16 ORIGIN AND HISTORY OF LIC OF INDIA
The story of insurance is probably as old as the story of mankind.
The same instinct that prompts modern businessmen to day to secure
themselves against loss and disaster existed in primitive men also.
Through the concept of insurance is largely a development of the recent
past, particularly after the industrial era-past few centuries-yet its
beginnings date back almost 6000 years.
Life insurance in its modern form came to Indian from England in
the year 1818. Oriental Life Insurance Company started by Europeans in
Calcutta was the first Life Insurance Company on Indian soil. All the
insurance companies established during that period were brought up with
50
the purpose of looking after the needs of European community and Indian
natives were not being like Babu Muttylal Seal, the Foreign Life
Insurance Companies started insuring Indian lives. Bombay Mutual Life
Assurance Society heralded the birth of first Indian Life Insurance
Company in the year 1870, and covered Indian lives at normal rates.
Bharat Insurance Company (1986) was also one of such companies
inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise
to more insurance companies. The United India in Madras, National
Indian and National Insurance in Calcutta and the co-operative Assurance
at Lahore were established in 1906. Hindustan co-operative Assurance at
Lahore were established in 1906. Hindustan Co-operative Insurance
Company took its birth in one of the rooms of the Jorasanko, house of the
great poet Rabindranath Tagore, in Calcutta. In the year 1912, the Life
Insurance companies Act, and the Provident Fund Act were passed. The
premium rate tables and periodical valuations of companies should be
certified by an actuary.
3.1.17 Objectives of LIC of India
The Objectives of LIC of India are:
i. Spread life insurance widely and in particular to the rural areas
and to the socially and economically backward classes with a
view to reaching all insurable persons in the country and
providing them adequate financial cover against death at a
reasonable cost.
ii. Maximize mobilization of people’s savings by making
insurance linked savings adequately attractive.
iii. Bear in mind, in the investment of funds, the primary obligation
to its policyholders, whose money it holds in trust, without
losing sight of the interest of the community as a whole; the
51
funds to be developed to the best advantage of the investors as
well as the community as a whole, keeping in view national
priorities and obligations of attractive return.
iv. Conduct business with utmost economy and with the full
realization that the money belongs to the policyholders.
v. Act as trustees of the insured public in their individual and
collective capacities.
vi. Meet the various Life Insurance needs of the community that
would arise in the changing social and economic environment.
vii. Involve all people working in the corporation to the best of their
capabilities in furthering the interests of the insured public by
providing efficient service with courtesy.
viii. Promote amongst all agents and employees of the corporation a
sense of participation, pride and job satisfaction through
discharge of their duties with dedication towards achievement
of corporate objectives.
The Mission is to
“Explore and enhance the quality of life of people through
financial security by providing products and services of aspired
attributes with competitive returns and by rendering”.
The Vision is
“A trans-nationally competitive financial conglomerate of
significance to societies and price of India”.
3.1.18 LIC OF INDIA OPERATIONS
The LIC transacts business throughout India with a four tier
structure, the central office at Mumbai, seven zonal offices, 100
Divisional offices and about 2048 Branch offices in India. it also transacts
business in the united kingdom (U.K), Mauritius, Fiji through its Branch
52
offices, which report directly to the central office. In Bahrain, Nepal,
Kenya and Sri Lanka, the business is done through joint ventures
incorporated locally. All offices have clearly demarcated geographical
areas of operations, except the Divisional and Branch offices in big cities,
which have common areas.
Almost 90 per cent of the activities relating to policyholders, from
receipt of proposal to settlement of claims, are done at level of the branch
offices. The other offices have supervisory and advisory functions.
Actuarial and Investments functions are usually done at the central office.
The chief Actuary, responsible for certifying new plans of assurance,
studying mortality and other experiences, making periodical valuations
and determining the bonus allocations, will be at the central office. All
contacts and correspondence with the Government will be from the
central office.
3.1.19 INVESTMENT PATTERN OF LIC OF INDIA
Life insurance is a long duration contract which generates
investable surplus which is invested keeping in view the safety and
security of the funds spread over different categories. Industry and region
so as to serve larger economic and social interest while optimizing yield.
The investment of the corporation fund is governed by section 27 A of
the Insurance Act 1938 and subsequent guidelines/ Instructions issued by
the government of India from time to time. The modified section 27 A of
the Indian Insurance Act 1938 prescribes percentage wise ceiling of
maximum limit in different categories of investment. These have been
modified from time to time with a view to preempting and increasing
proportion of its funds in Govt. / Govt. guaranteed / Approved/ Socially
oriented investments. The LIC has been directed to concentrate move on
the financing of socially oriented investments.
53
LIC is one of the largest investors in government securities,
infrastructure and social sector. The corporation helps to boost up the
industrial growth in the country. It help the small and medium scale
industries by granting loans for setting up co-operative industrial estates.
The corporation assists state level financial corporation and all
India financial corporations like, IDBI, IFCI, ICICI, etc. by way of
subscription to bonds debentures issued by such institution. It also makes
investment in the corporate sector in the form of long medium of short
term loans to companies/ corporations.
Based on the recommendation of the Jaganathan committee to
review the investment policies of the LIC, section 27 A was further
amended in 1975. The amended section 27 a stipulated that accretions to
the controlled fund of the LIC could be invested as under.
3.1.19.1 Features of Children plan
This plan is designed in such a way that the parent a legal guardian
or any other near relative of the child to provide for the child’s future by
payment of very low premium. The features of various children plans of
LIC of India have been shown in Table 4.1. As per table 4.1 the children
plans were Jeevan Anurag, Jeevan Kishore, Jeeen Chhaya, Marriage
Endowment/ Education, Koman Jeevan, Child Career Plan and Child
Future plan and Child Dortune plus. The common features in all these
plans were.
i. The premium paid by the parent can be taken as savings for the
purpose of claiming income-tax benefit under sec 80C1 and sec 10
(10D)2 of Income Tax Act, 1961.
ii. The terminal benefits of the products were exempted from income-
tax.
54
iii. Each plan carries death benefit or maturity benefit whichever is
earlier.
iv. The Sum assured shall be in multiples of Rs.5000.
However, each product was distinguished from other product. The
distinctive features among children plans were as follows.
i. Entry age varies for example in case of Jeevan Kishore the entry
age starts from the date of birth and ends upto 20years of age
(Jeevan Anurage). So one can take children plan policy from 0
days of age to 20 years of age.
ii. The maturity age also varies among plans from 26 years of age to
75 years of age. A child can reap the terminal benefit of his / her
life policy even at the age of 75 years.
iii. The policy term varies from 5 years to 35 years. So, it encourages
small savers as well as big savers.
iv. The sum assured also varies from Rs.50, 000 to no maximum limit.
This feature is meant for encouraging all sections of income group.
v. The amount of death benefit also varies from one product to other.
vi. The amount of maturity benefit also varies from one product to
other.
vii. The benefits comprised of sum assured, rider benefit, bonus, GA at
Ra.755 per 1000 of sum assured, premium waiver benefit…… etc.
Thus, The various children’s plan were offered with a view to
cover various section of the society in terms of age, income,
requirement of benefit earlier or later, want to get more benefits,
earlier entry and later entry.
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TABLE-3.1 CHILDREN PLANS OF LIC OF INDIA
FEATURES
Sl No
Kinds of
Child plans
Tax Benefit
Sec 80 C sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Policy Term
Sum Assure
d
Premium payment Option
Death Benefit
Maturity Benefit
Premium
Term Special Features
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
1 Jeevan Anway
Yes 20 to 60
Yrs 70 Yrs
5,10-25 Yrs
50,000 no limit
Yly, Hly, Qly,
Mthly
S.A.+ TAR
SA+TA ABR
Policy term or
ply term-3
1.Rider Benefit-ADR Term AR CI Rider
2.premium waiver Benefit-SA equal to CIR
3.Surrender value-30% of Total Premium 90% of SP
4. Assured Benefit-20% of SA 40% of SA+ Reversionary bonus
2 Jeevan Kishore
Yes 0-12 Yrs 20-45 Yrs 15-35 Yrs
50,000-40
lakhs
Yly, Hly, Qly,
Mthly
1.Rider Benefir – ADR 2.Max SA if age @ entry
levsthanlogrs-15 lakhs
3 Jeevan Chhaya
Yes 18-45 Yrs 65 Yrs 18-25 Yrs
50,000 no limit
Yly, Hly, Qly,
Mthly
SA 25% of SA last 4 yrs of
term
SA &A B, 25%
balance of SA
1.Rider Benefit –ADR
2.SA in multiples- Rs.5000
4
Marriage Endowment/
Education Annuity
Yes 18-60 Yrs 70 Yrs 5-25 Yrs
50,000 no limit
Yly, Hly, Qly,
Mthly
SA + Bonus
SA+Bonus 1.Rider Benefit- ADR
2. SA in multiples- Rs.25000
56
TABLE-3.1 (Contund….) CHILDREN PLANS OF LIC OF INDIA
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
5 Komal Jeevan
Yes 0-10 Yrs 26 Yrs 1 lakh to 25 lakhs
Yly, Hly, Qly,
Mthly
S.A.+ GA @ 75% per 1,000 SA+CA
8-18 Yrs
1.Rider Benefit- Term Rider Benefit 1 lakh 2.premium waiver
Benefit-Propose upto 50 yrs
6 Child
Career Plan Yes 0-12 Yrs
23-27 Yrs
11-27 Yrs1 lakh to 1 crore
Yly, Hly, Qly,
Mthly
CCP Allpram paid +3%
p.a.SA+VB+FAB CFP
CCP 3% of SA+B 15%of SA+B
Gyr or Term 5
Yrs
1.SA in Multiples-Rs.5000
7 Child future
Plan Yes
Allprm paid + 3% p.a
SA+VB+FAB
CFB 25% of the SA 10% of the SA
50% of the SA+Bonus+FA
B
8 Child
Fortune plus
Yes
Child 0-17 Yrs Assured
18-55 Yrs
Child 25 Yrs
Assured 75 Yrs
Assured Age entry
Age which ever is high
Yly, Hly,
Qly, Mthly
SA or full future
premiums paid, fund
value
Fund Values
SP or Same as policy term
1.charges- ply adm, FA,Swft,Bid/offer, Sonice Tax, misch.
Source: Secondary data
57
3.1.19.2 Features of plans for Handicapped Dependents
This plan is designed to make provision for maintenance of Handicapped
Dependent. (H.D). this plan is allowed to all classes of sub-standard lives.
The plan is allowed to group A deformity with loss of one limb (L.A) at
standard rates with AB, PDB & EPDB. Two kinds of products were
available in favour of handicapped dependents viz.., Jeevan Aadhar and
Jeevan Vishwas as per Table 4.2. The common features in these two
plans were.
i. The premium paid by the promoter can be taken as his/her savings
for the purpose of income-tax benefit under 80 C and sec 10(10D)
of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income tax.
iii. Each product carries death benefit or maturity benefit whichever is
earlier.
However, the features which differentiate there the two products were
as follows:
i. Entry age ranges from 20 years of age to 65 years of age.
ii. Policy term varies from 30 years of age to 35 years of age.
iii. Sum assured starts from Rs.50, 000 to no maximum limit.
iv. Premium payment on the basis of monthly, quarterly, half-yearly and
annually.
v. Variation in terminal benefits.
vi. Accident benefit is also available in case of Jeevan Vishwas.
58
TABLE-3.2 PLANS HANDICAPPED DEPENDENTS PLANS OF LIC OF INDIA
FEATURES
Sl No
Kinds of
handicapped
dependents plans
Tax Benefit
Sec 80 C
sec 10 (10) D
Entry Age
Min/Max
Maturity
Age Min/Max
Policy Term
Premium
in multiples
Sum
assured
Premium payment Option
Maturity Benefit
Death Benefit
Special Features
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
1 Jeevan Aadhar
Yes 22 to 65
Yrs 75 yrs
10-35 Yrs
5 Yrs Rs.50,000 no
limit Yly, Hly,
Qly, Mthly
SA+ Terminal Benefit
1. Rebate-Rs.50000 & above Rs. 2. Guaranted addition-Rs.100 per 1000 SA
2
Jeevan Vishwas
Yes 20-60 Yrs 75 Yrs 10-40 Yrs
25 Yrs Rs.50,000 no
limit Yly, Hly,
Qly, Mthly
SA+GA+LA 20%
of Notional
SA
SA+GA+LA 1. accident Benefit-per 1000 SA
Source: Secondary data
59
3.1.19.3 Features of Endowment Assurance plans
This plan is a combination of whole life and end assurance plan.
Even after the premium paying term is over, risk cover continues fill the
death of the policyholder. Endowment plan provides financial assistance
to the family of the life assured in the event of policyholder’s early death
or a lump-sum amount on policyholder’s survival up to the selected term.
Endowment plan is best for every reason, for all long and short term
financial needs. Jeevan Milta (Double cover, Triple cover), Jeevan
Anand, New janaraksha policy. Endowment Assurance policy,
Endowment Assurance policy (Limited pay) and jeevan Amrit were the
Endowment Assurance plans of LIC of India as per Table 4.3. The
common features of these plans were as follows.
i. The premium paid by the promoter can be taken as his/her
savings for the purpose of income-tax benefit under sec 80 C
and sec 10 (10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carried death benefit or maturity benefit whoever
is earlier.
iv. Sum assured is in multiples of Rs.5, 000.
v. Payment of premium may be monthly, quarterly, half-yearly
and annually.
However, the endowment plans were distinguished among themselves by
means of the following features viz…,
i. Entry age from 12 years to 60 years. Even senior citizens can
take an endowment plan.
ii. Maturity age ranges from 65 years of age to 70 years.
iii. Policy term varies from 5 years to 25 years.
iv. Minimum sum assured ranges from Rs.50, 000 to 1, 00,000 but
no maximum limit.
60
TABLE-3.3 ENDOWMENT ASSURANCE PLANS OF LIC OF INDIA FEATURES
Sl No
Kinds of Child
plans
Tax Benefit S 80 C sec 10 (10) D
EntryAge Min/Max
Maturity Age
Min/Max
Policy Term
Sum Assured Min/Max
Sum Assure
d in Multipl
e
Premium payment Option
Maturity Benefit
Death Benefit
Special Features
1 Jeevan Mitra
(Double cover, Triple cover)
Yes 18-50 Yrs 70 Yrs 15-30 Yrs
50,000 no limit
Rs.5000
Yly, Hly, Qly, Mthly
Double SA+A.Bonus
Triple SA+A.Bonus
Double 2 times of
SA + Bonus Triple
1.Accident Benefit-per 100 SA
2 Jeevan Anand Yes 18-65 Yrs 65 Yrs 5-57 Yrs
1 lakhs- no limit
Yly, Hly,
Qly, MthlySA+B
SA+Prem paying Term+ Bonus
1.Accident Benefit-per 100 SA
3 New janarakshs
policy Yes 18-50 Yrs 70 Yrs
12-30 Yrs
30,000 no limit
Rs.5000
Yly, Hly, Qly, Mthly
SA+Bonus SA+Bonus 1.accident Benefit-5 lakhs to 7.5 lakhs
4 Endowment
assurance policy Yes 12-60 Yrs 75 Yrs
5-55Yrs
50,000 no limit
Rs.5000
Yly, Hly, Qly, Mthly
SA+B+Final additional
Bonus
SA+AB+FAB
1.Accident Benefit-Rs.extra
5 Endowment
assurance policy (Limited pay
Yes 12-60 Yrs 75 Yrs 5-25 Yrs
50,000 no limit
Rs.5000
Yly, Hly, Qly, Mthly
SA+B+FAB+VRB+FAB
SA+B_VRB+FAB
1.Accident Benefit-Re.1 extra
6 Jeevan Amrit Yes 12-60 Yrs 70 Yrs 10-30 Yrs
1,00,000 no limit
Yly, Hly
1.Premiumpayingform 3/4/5 Yrs 2.Swoceder value –one full Yr.premium paid
Source: Secondary data
61
v. Terminal benefit/death benefit may be single benefit, double
benefit and triple benefit.
vi. To get accident benefit one rupee extra premium for every
Rs.1000 sum assured need to be paid.
vii. Term assurance rider option.
3.1.19.4 Features of plans for High worth individuals
This plan for high worth individuals that provides good financial
security and the privilege of being able to choose any premium paying
term according to policyholder’s suitability. Since this is a business
related plan, the life insured will be given simple reversionary bonuses
coinciding with the profits made in the market. There were two plans for
High worth Individuals viz., jeevan shree and Jeevan Pramukh as per
Table 4.4. The following were the common features for these two plans.
I. The premium paid by the promoter can be taken as his/her
savings for the purpose of income-tax benefit under sec 80 C
and sec 10(10D) of Income Tax Act, 1961.
II. The terminal benefits were exempted from income-tax.
III. Each product carries death benefit or maturity benefit
whichever is earlier.
IV. sum assured is in multiples of Rs.5,000
V. Payment of premium may be monthly, quarterly, half-yearly
and annually.
However, these two plans were distinguished with the following
features viz.,
i. Entry age ranges from 18 years to 65 years so as to enable the
senior citizens to join the plan.
ii. Sum assured ranges from Rs.5 lakhs to no limit.
iii. Sum assured is in multiples of Rs.1 lakh.
62
TABLE-3.4 HIGH WORTH INDIVIDUALS PLANS OF LIC OF INDIA
FEATURES
Sl No
Kinds of plans for
high worth
Tax Benefit
Sec 80 C
sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Policy Term
Sum assured
Sum assured in Multiple
Premium payment Option
Maturity Benefit
Death Benefit
Special Features
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
1 Jeevan shree
Yes 18-65 Yrs 75 yrs 5-25 Yrs
5 lakhs no limit
Rs. 1 lakh Yly, Hly,
Qly, Mthly
SA+VGA@Rs.50 per
1000 SA+Reversionary Bonus
SA+VGA@ 50 per 1000 SA
1.Term assurance Rider option Rs.4 per 1000 SA
2
Jeevan Pramukh
Yes 18-65 Yrs 75 Yrs 5-25 Yrs
10 lakhs no limit
Rs. 1 lakh Yly, Hly,
Qly, Mthly
SA+GA@ 500 per
1000 SA
SA+GA+Reversionary Bonus
1.Prem payment Term-3,4 or 5 yrs
2.Paid up value-GA vested Rev.Bonus
3.Surrender value-1 yr premium have been paid
Source: Secondary data
63
iv. Maturity benefit is SA + VGA@Rs.50 per 1000
SA+Reversionary bonus.
v. Premium payment term ranges from 3 years to 5 years.
Thus, it is a short period policy, Senior citizens may take this
policy to get the terminal benefits in their life-time.
3.1.19.5 Features of Money-back plans of LIC of India
This plan holds special interest to people who besides wishing to
provide for their old age and family feel the need for lump-sum benefits
at periodical intervals. It provides money at regular installments. The
money back plans of LIC of India were Jeevan surabi-15 years, Jeevan
Surabi-20 years, Jeevan Surabi-25 years, Money Back Polucy and Bima
bachat as per Table 4.5. The common features of money back plans were
as follows.
i. The premium paid by the promoter can be taken as his/her
savings for the purpose of income-tax benefit under sec 80 C
and sec 10(10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carries death benefit or maturity benefit whoever
is earlier.
iv. Sum assured is in multiples of Rs.5,000
v. Payment of premium may be monthly, quarterly, half-yearly
and annually.
However, the Money-Back plans of LIC of India were distinguished
with the following features
i. Entry age ranges from 13 years to 66 years and the maturity age
may go up to 70 years of age so as to enable the senior citizens
to opt money back plans.
ii. Minimum sum assured shall be Rs, 20,000 and no maximum.
64
TABLE-3.5 MONEY BACK PLANS OF LIC OF INDIA FEATURES
Sl No
Kinds of plans for
high worth
Tax Benefit
Sec 80 C
sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Policy Term
Sum assured
Sum assured in Multiple
Premium payment Option
Maturity Benefit
Death Benefit
Special Features
1 Jeevan
surabi-15 Yrs
Yes 14-55 Yrs 70 Yrs 12 Yrs 50,000 no limit
Rs.5000 Yly, Hly,
Qly, MthlySA
15 times of SA 2 times
of SA
1.Accident Benefit-Rs.1 extra
2
Jeevan surabi-20
Yrs Yes 14-55 yrs 70 yrs 15 yrs
50,000 no limit
Rs.5000 Yly, Hly,
Qly, MthlySA
1.5 times of SA 2 times of SA 2.5
times of SA
1.Accident Benefit.Rs.1 extra
3 Jeevan
surabi-20 yrs
Yes 14-55 yrs 70 yrs 18 yrs 50,000 no limit
Rs.5000 Yly, Hly,
Qly, MthlySA
1.5 times of SA 2 times of SA 2.5
times of SA 3 times of
SA
1.Accident Benefit Rs.1 extra
4 Money
Back Policy Yes 13-50 yrs 70 yrs
20 to 25 Yrs
50,000 no limit
Rs.5000 Yly, Hly,
Qly, MthlySA SA+Bonus
1.Accident Benefit Rs.1 extra
5 Bimaba
chat Yes 15-66 Yrs 75 yrs
9,12 0r 15 yrs
20,000 no limit
Rs.5000 Single
premium SA
1.Surrender value-GSV is equal to 90% SP
Source: Secondary data
65
iii. Sum assured is the only maturity benefit.
iv. Death benefit will be 1.5 times of SA or 2 times of SA or 3
times of SA. To get accident benefit Rs.1 extra for every
Rs.1000 sum assured shall be paid.
v. Survival benefit starts after the end of 5th year.
3.1.19.6 Features of special Money Back plan for women
This plan has been specially designed for women. It covers the security
for critical illness and congenital disabilities. It is a money-back policy
and has a fixed term of 15 years or 20 years. Only one product by name
Jeevan Bharathi was introduced by the LIC of India as per Table 4.6. It
has the following common features.
i. The premium paid by the promoter can be taken as his/her savings
for the purpose of income-tax benefit under sec 80 C and sec
10(10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carries death benefit or maturity benefit whichever is
earlier.
iv. Sum assured is in multiples of Rs.5,000
v. Payment of premium may be monthly, quarterly, half-yearly and
annually.
The distinguished features of Jeevan Bharati were as follows.
i. Entry age 18years to 55 years.
ii. Sum assured ranges from Rs.50,000 to 25 lakhs
iii. Bonus was given in the form of annuity
iv. Death benefit will be SA + Reversionary bonus + additional
bonus.
v. Waiting period – 1 year.
66
TABLES-3.6 LIC OF INDIA’S SPECIAL MONEY BACK PLAN FOR WOMEN
FEATURES
Sl No
Kinds of special Money
Back plan for women
Tax Benefit
Sec 80 C
sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Terms Allowed
Sum assured
Sum assured in Multiple
Death Benefit
Maturity Benefit
Special Features
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
1 Jeevan
Bharati-1 Yes 18-55 Yrs 70 yrs
15 & 20 yrs
50,000 –Rs.25 lakhs
Rs.5000
Reversing Bonus+
Additional Bonus
Bonus + 4%
interest per annum
1.Encashment of survival Benefit-Interest @ 4% pa.2.Flexibilities to pay premium- Next yearly prem paid in advance at 5% 3.Auto cover-SA+Vested Bonus+FAB 4.Paid up value-3 full yr.prem have been paid 5.Gfd.Surrender value-3 ply yr.provided the premiums paid 6.Rider Benefit-ABR,CIR,CDB 7.Waiting period-1 yr.
Source: Secondary data
67
vi. If premium is paid in advance of one year a rebate of 5 per cent
will be allowed.
vii. Survival benefit also carries interest at 4 per cent per annum if
retained with LIC of India.
viii. If two years premium have been paid, full death cover was
available for a period of 3 years from the date of first unpaid
premium.
ix. A guaranteed surrender value of 30 per cent of the total amount
of the premiums paid can be availed.
3.1.19.7 Features of Whole Life plans of LIC of India
This plan is a combination of endowment assurance and whole life
plans. It provides financial help against death throughout the life time of
the life assured with the provision of payment of a lump-sum at the end of
the selected term in case of his survival. The whole life plans of LIC of
India were whole Life policy (with profit), Whole life policy (Limited
payment with profit), Jeevan Anand and Jeevan Tarang as per Table 4.7.
These four plans have the following common features.
i. The premium paid by the promoter can be taken as his/her savings
for the purpose of income-tax benefit under sec 80 C and sec
10(10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carries death benefit or maturity benefit whichever is
earlier.
iv. Sum assured is in multiples of Rs.5,000
v. Payment of premium may be monthly, quarterly, half-yearly and
annually.
68
TABLE-3.7 WHOLE LIFE PLANS OF LIC OF INDIA
FEATURES
Sl No
Kinds of plans for
high worth
Tax Benefit
Sec 80 C
sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Sum assured
Premium payment Option
Maturity Benefit
Death Benefit
Sum Assured
in Multiple
Accident Benefit
Special Features
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
1 Whole life
policy (with profit)
Sec 80 c
Sec 10 (10D)D
15-60 Yrs 80 Yrs 50,000 no limit
Yly, Hly, Qly,
Mthly
SA+ Bonus
SA.Bonus Rs.5000 Per 1000 SA
Rs.1 extra
2
Whole life policy (ltd payment
with profit)
Yes 12-60 yrs 80 yrs 50,000 no limit
Yly, Hly, Qly,
Mthly
SA+Bonus
SA.Bonus Rs.5000 Per 1000 SA
Rs.1 extra Policy term-5-55 yrs
3 Jeevan Anand
Yes 18-65 Yrs 75 yrs 1 lakh
no limit
Yly, Hly, Qly,
Mthly
SA+B+FAB
SA+B 5 lakhs
1.Premium payment term min/max-5-57 yrs
2.Rebate-yly 3%,Hyly 12%
4 Jeevan Tarang
Yes 0-60 yrs 70 yrs 1 lakh
no limit
Yly, Hly, Qly,
Mthly
SA+Loyalty addition
SA+VB+LA
Rs.5000 Rs.1 extra + RBCR PWB
1.premium payment term min/max-10,15,20 yrs. 2.Life Cover-100 yrs.
Source: Secondary data
69
However, there have been distinguished among themselves with the
following features.
i. Entry age 12 to 60 years.
ii. Maximum maturity age ranges from 70 years (jeevan Tarang) to
80 years (whole life with profit polices) or 40 years from the
date of commencement.
iii. Minimum sun assured Rs.50, 000 for whole life policy and
Rs.1,00,000 for jeevan Anand and Jeevan Tarang.
iv. Maturity benefit will be SA plus bonus or SA plus loyalty
addition.
v. Accident benefit is available
vi. Policy term 5 to 55 years.
vii. Rebate of 3 percent yearly and 15 percent half yearly premiums.
viii. Life covers 100 years.
3.1.19.8 Features of Term Assurance Plans of LIC of India
This is unique plan of assurance, by for the cheapest policy to buy;
cheaper than even a whole life policy. Ammol jeevan-I (without profit)
and Amulya Jeevan-I were the two term assurance plans of LIC of India
meant for physically handicapped insured as per Table.4.8. The following
are the common features of these plans.
i. The premium paid by the promoter can be taken as his/her savings
for the purpose of income-tax benefit under sec 80 C and sec
10(10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carries death benefit or maturity benefit whichever is
earlier.
iv. Sum assured is in multiples of Rs.5,000
70
TABLE-3.8 TERM ASSURANCE PLANS OF LIC OF INDIA
FEATURES
Sl No
Kinds of plans for
high worth
Tax Benefit
Sec 80 C
sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Policy term
Premium payment Option
Sum Assured
in Multiple
Maturity Benefit
Death Benefit
Special Features
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (12)
1
Ammol Jeevan-I (without profit)
Yes 18-55 yrs 65 yrs 5-25 yrs Yly, Hly,
Qly, Mthly
5 lakhs, 24 lakhs
Un maturity amount will be
paid
SA 1.Allowed to physically
Handicapped
2 Amulya jeevan-I
Yes 18-60 yrs 70 yrs 5-35 yrs Yly, Hly,
Qly, Mthly
25 lakhs no limit
Un maturity amount will be
paid
SA 1.Allowed to physically
Handicapped. 2.Grace period-15 days
Source: Secondary data
71
v. Payment of premium may be monthly, quarterly, half-yearly and
annually.
However, these plans have been distinguished with the following
features.
i. Entry age 18 years of age
ii. Policy term ranges from 5 years to 35 years.
iii. Maturity age ranges from 65 years to 70 years.
iv. Sum assured shall be a minimum of Rs.5 lakhs and no limit.
v. Only to physically handicapped persons with standard extra
rates.
vi. On maturity no amount will be paid to the policyholder.
However, on the death of the policyholder sum assured will be
paid to the nominees.
vii. Proposals are considered on the basis of medical reports.
viii. This is the only plan allowed under key-man insurance.
3.1.19.9 Features of joint Life plan of LIC of India
This plan is specially designed for married couples. it is for
husband and wife who want single policy for joint risk cover. Jeevan
Saathi is the only Joint Life Plan of LIC of India as per Table 4.9. it has
the following common features.
i. The premium paid by the promoter can be taken as his/her savings
for the purpose of income-tax benefit under sec 80 C and sec
10(10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carries death benefit or maturity benefit whichever is
earlier.
iv. Sum assured is in multiples of Rs.5,000
72
TABLE-3.9 JOINT LIFE PLAN OF LIC OF INDIA
FEATURES
Sl No
Kinds of joint life
plan
Tax Benefit Sec 80 C
sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Policy term
Sum Assured Min/Max
Premium payment option
Maturity Benefit
Death Benefit
Sum Assured
In multiple
Special Features
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (12)
1 Jeevan saathi
Yes 20-55 yrs 70 Yrs 15-30
yrs 50,000 no
limit Yly, Hly,
Qly, Mthly SA+Bonus
SA& Future prem are waived
Rs.5000 1.Accident Benefit-per 1000 SA Rs.2 Extra.
Source: Secondary data
73
v. Payment of premium may be monthly, quarterly, half-yearly and
annually.
However, Jeevan Saathi has the following distinctive features.
i. Issued only to working couple or wife should be an income-tax
Assessee. For S.A.of Rs.2 lakh and less, wife need not be an
earning person. Not allowed to Pregnant Ladies.
ii. Wife’s income is also considered to grant insurance cover on
Husband’s life subject to certain restrictions: (1) Wife shoule
belong to Female Category I/II. (2) Wife should be proposer (3)
Husband should have been insured fully based on his own income.
iii. Plan is not allowed for Female lives who have undergone 3 or
more caesarean operations, for female with one/two caesarian is
allowed to take plan with 3 per cent extra premium.
iv. However, Female lives, who have undergone sterilization after 2
caesarean operations, can take this plan without any extra
premium.
v. Similarly, Female Lives with 2 caesarean operation, though not
undergone sterilization, but attained menopause can take this plan
without any extra premium.
vi. Maximum S.A. allowed under the plan to housewives & self-
employed female lives category III, is Rs.2 lakh with standard age
proof and for Female Category II max.S.A.is 50 lakhs.
vii. Housewives: Graduates having medical claim policy or credit card
or driving license or passport – Max.S.A.is 15 lakhs. Proof to be
produced.
Maturity Benefit: if both husband and wife are alive up to maturity,
S.A.+ Bonus is given.
74
Death Benefit
i. On death of either husband/wife, survivor gets S.A.
immediately & future premiums are waived.
ii. If the survicor (husband / wife) survives till maturity, he/she
gets S.A.again with full bonus.
iii. If the survivor also dies before maturity,S.A.+ Bonus till that
time, is paid to the nominee.
3.1.19.10 Features of Unit Plans of LIC of India
Unit plans are investment plans for those who realize the worth of
hard- earned money. These plans helps to choose the level of cover
within the limits, which will depend on whether the policy is a single
premium or regular premium contract and on the level of premium to
pay. The unit plans as per Table 4.10 of LIC of India have the
following common features.
i. The premium paid by the promoter can be taken as his/her
savings for the purpose of income-tax benefit under sec 80 C
and sec 10(10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carries death benefit or maturity benefit
whichever is earlier.
iv. Sum assured is in multiples of Rs.5,000
v. Payment of premium may be monthly, quarterly, half-yearly
and annually.
However, these plans have the following distinctive features.
i. Premium payment term maximum 5 years.
ii. Maturity benefit is the fund value.
iii. Maturity benefit in case of wealth plus plan is the highest net
present value of units during the period of premium payment.
iv. Accident benefit is also available.
75
TABLE-3.10 UNITS PLANS OF LIC OF INDIA FEATURES
Sl No
Kinds of Unit plans
Tax Benefit S. 80 C sec 10 (10) D
Entry Age
Min/Max
Maturity Age
Min/Max
Policy Term
Premium payment Option
Premium Payment Option
Sum Assured Min/Max
Maturity Benefit
Death Benefit
Special Features
1 Profit plus
Yes 0-65 Yrs 18-70 Yrs 5-20 Yrs 3,4,5 SP Yly, Hly,
Qly, Mthly
Min: SP 1.25 times of SP
RP-5 times of AP or half of policy term X
AP
Unit value of policy
holder fund value
SA & Unit Value
whichever is high
1.Sum assured in multiple-Rs.5000 2.Accident Benefit Rider-0.50 per 1000 CIR 3.Charges-Prem.all ch in or fall. I.M.gt,swt,Bid offer,SP,Surrender, SErvce Tax Charge.
2 Foxtune
plus Yes 12-60 yrs 18-65 Yrs 5-20 Yrs 5 Yrs
Yly, Hly, Qly,
Mthly
5 times of AP or half of
policy term X 1st Yr.A.P
Fund Value
SA /value of Units ,Fund W.E. is high
1.Sum assured in multiple-Rs.5000
3 Money
plus Yes 0-65 Yrs 18-75 Yrs 5-30 Yrs
Yly, Hly, Qly,
Mthly
5 times A.P.to 20, 30 times the Ap upto age 45,60,65
Yrs
Fund values
SA or value of units
1.Sum assured in multiple-Rs.5000 2.Accident Benefit Rider-ABR @ 50 per 1000 AB SA per policy yrs C/R
4 Wealth
plus Yes 10-65 Yrs 8-Yrs
3-yrs, 5 times the
AP
Yly, Hly, Qly,
Mthly
3 yrs premium term
1.Partial withdrawals will be allowed twice in a policy year. 2. S.P-Partial withdrawals will be allowed a minimum balance of 25% of the SP
Source: Secondary data.
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3.1.19.11 Features of Golden Jubilee plan of LIC of India
Today’s world is very fast paced. it is imperative that each life is
insured to give an individual security as well as those who are dependent
him/her or living with him/her. A long with security and insurance
benefits LIC’s special plans are opportunities that know on your door
once in a life time. These plans are a perfect blend of insurance
investment. A plan by name New Bema Gold as per Table 4.11 was
introduced on the occasion of golden jubilee of LIC of India. it has the
following common features.
i. The premium paid by the promoter can be taken as his/her savings
for the purpose of income-tax benefit under sec 80 C and sec
10(10D) of Income Tax Act, 1961.
ii. The terminal benefits were exempted from income-tax.
iii. Each product carries death benefit or maturity benefit whichever is
earlier.
iv. Sum assured is in multiples of Rs.5,000
v. Payment of premium may be monthly, quarterly, half-yearly and
annually.
However, the distinctive features of Bema Gold were as follows.
i. Entry age 14 years to 57 years.
ii. This is a unique with profit money back type plan.
iii. Policy term may be extended to the extent of 50 per cent of the
policy term.
iv. Death benefit during the policy term is the sum assured.
v. Survival benefits are also available.
vi. Maturity benefit premium paid mines survival benefits plus
loyalty addition.
vii. Accident benefit is also available
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TABLE 3.11 GOLDEN JUBLIEE PLAN OF LIC OF INDIA (SPECIAL PLANS)
FEATURES
Sl No
Kinds of Golden Jubilee
Plan
Tax Benefit
Sec 80 C sec 10 (10) D
Entry Age
Min/MaxPolicy term
Sum Assured Min/Max
Premium payment option
Accident Benefit
Sum Assured In multiples
(1) (2) (3) (4) (6) (7) (8) (9)
1 New bima
gold Yes 14-57 Yrs
12,1620 Yrs Extended
50,000 no limit Yly, Hly, Qly, Mthly Rs.1 extra Rs.5000
Source: Secondary data
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viii. Auto cover for at least two years from the date of first unpaid
premium.
ix. Cooling off period i.e., the policy can be returned to the
corporation within 15 days if not satisfied with the terms and
conditions of the policy.
3.1.19.12 Conclusion
There were seven different kinds of plan as children plans. These
plans were differentiated in terms of entry age, policy terms, sum assured,
and death benefit maturity benefit and premium waiver. The object of
different plans was to cover different segments of the society. Two plans
were available for physically handicapped dependents. These two plans
were distinguished so as to bring the insured up to 65 years of age. There
were several endowment assurance plans. However, the endowment plans
were differentiated in terms of entry age, maturity age, policy terms,
minimum sum assured, terminal benefits and term assurance rider option.
The object of endowment plans was to cover insured of at different age
groups. Two kind’s plans were available for High worth Individuals with
the distinctive features of lesser premium payment term with high sum
assured. The policies for High worth Individuals were suitable even for
senior citizens.
There were five different kinds of money back plans and these
money back plans were distinguished in terms of entry age, death benefit
and periodical survival benefits. A special money back plan for women
was there with a differentiation of death cover, 4 per cent interest on the
maturity benefit if retained with LIC and rebate is given if the premium is
paid in advance.
There were four kinds of whole life plans with differentiation in
terms of entry age, policy term, life cover up to 100 years, and minimum
maturity age of 80 years or 40 years from the date of commencement.
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There was also a joint life policy on the life of working husband and wife.
There were also plans linking life insurance with share market. Bema
Gold was commemorative policy on the accession of golden jubilee of
LIC of India. Bema Gold has the distinctive features of cooling period,
auto cover for another two years from the date of first unpaid premium,
survival benefits, extended period of coverage and with profit money
back plan. All the plans have the common features of income-tax
exemption for the premium paid and terminal benefits.
3.1.20 PRIVATE PLAYERS IN THE LIFE INSURANCE INDUSTRY
The opening up of the insurance sector leads to a wide spread and
deepening of insurance in India and has effected in restructuring and
revitalizing of the public sector. Currently, the industry holds 23 private
players tapping the insurable population by delivering innovative
products through smart marketing and customized services.
3.1.20.1 Bajaj Allianz Life Insurance Company Limited.
Bajaj Allianz is the joint venture of Bajaj Finserv -India’s
financial service giant and Allianz SE- Germany’s financial services
provider. Registered on 2nd May, 2001 in India, Bajaj Allianz Life
Insurance Company has become one of the top most life insurance brands
in India. For the financial year 2010-2011, it is one of India's leading and
fastest growing insurance companies. Today, they are connected by
technology and communication with over 200 towns across India. Bajaj
Allianz among other life insurance companies in India has been ranked
#2 in terms of number of issued insurance policies and #4 on basis of new
business premium. The Company has an authorized and paid up capital of
Rs 110 crores. Bajaj Finserv Limited holds 74% and the remaining 26%
is held by Allianz SE. Bajaj Allianz Life Insurance Company aims to
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ensure excellent insurance and investment solutions by offering
customized products, supported by the best technology.
3.1.20.2 Birla Sun Life Insurance Co. Ltd
Birla Sun Life Insurance Co. Ltd. (BSLI) is a joint venture between
Aditya Birla Group, an Indian multinational corporation, and Sun Life
Financial Inc, a leading global insurance company. Established in 2000,
BSLI has contributed to the significant growth and development of the
life insurance industry in India and currently ranks amongst the top 5
private life insurance companies in the country. Birla Sun Life
Insurance Company has a vast distribution network of almost 600
branches across India reaching out to more than 1500 towns. The already
established companies of the Aditya Birla Financial Services Group give
it the expertise and reach to service and add more consumers to the life
insurance business. Birla Sun Life Insurance is distinguished as the first
financial solutions company to introduce 'Business Continuity Plan', the
'Free Look Period' and 'Unit Linked Life Insurance Plans' in the Indian
insurance.
3.1.20.3 HDFC Standard Life Insurance Co. Ltd
HDFC Standard Life Insurance is a joint venture between HDFC
Limited and Standard Life PLC of United Kingdom. It was the first
private life insurance company to set shop in India and started its
operations in late 2000. HDFC Standard Life Insurance alone has 568
branches and reaches out to customers in 700 cities in India. This along
with the partnerships with group companies like HDFC Bank and HDFC
Limited give it an enviable reach among the private life insurance
companies. The company offers a healthy mix of traditional and unit
linked products which cater to protection, savings, pension, investment
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and health requirements of individual and group insurance solutions.
HDFC Life's product portfolio comprises solutions, which meet various
customer needs such as Protection, Pension, Savings, Investment and
Health. Customers have the added advantage of customizing the plans, by
adding optional benefits called riders, at a nominal price. The company
currently has 25 retail and 9 group products in its portfolio, along with 10
optional rider benefits catering to the savings, investment, protection and
retirement needs of customers. The company has 32 retail and 4 group
products along with 5 rider benefits. Customizing plans have also been
added to make lives better.
3.1.20.4 ICICI Prudential Life Insurance Company Co. Ltd
ICICI Prudential Life Insurance Company Co.Ltd is a joint venture
between ICICI Bank and Prudential PLC. of the United Kingdom. ICICI
Prudential was amongst the first private sector insurance companies to
begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA).ICICI Prudential
Life Insurance has maintained its dominant position (on new business
retail weighted basis) amongst private life insurers in the country. It is
also among the earliest private life insurance companies to start
operations in India. The company has a large distribution network of
2033 branches across the country, with a wide range of flexible products
that meet the needs of the Indian customer at every step in life. Currently
it is among the largest life insurance players in the country and among the
few private life insurance companies which are profitable.
ICICI Prudential Life Insurance Company is the first life insurer in
India that received a National Insurer Financial Strength rating of AAA
(Ind) from Fitch ratings. ICICI Prudential has been voted as India's Most
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Trusted Private Life Insurer for three consecutive years. This company
provides various insurance plans that have been designed for different
individuals, as every individual has different insurance needs.
3.1.20.5 ING Vysya Life Insurance Company Ltd.
ING Vysya Life Insurance Company is a joint venture between
ING Insurance International B.V. (26%), Exide Industries (50%) and
other share holders like Ambuja Cements Limited and Enam Group,
together holding a total of 24%. The company started operations in India
in September 2001.ING Vysya Life Insurance Company Limited is a part
of the ING group, a global financial institution of Dutch origin that offers
banking, insurance and asset management to clients across the world.
ING Life India has over 250 branches present in more than 225 cities
across India. This company also provides special policies, such as
Children's Plans, Retirement Plans, Investment Plans and Savings Plans,
which help people to secure their future financially. It also provides Life
Insurance, Medical Insurance, General Insurance, Long-Term Care
Insurance, Group Insurance, Company Insurance and Financial Services
Insurance Products. ING Vysya Life Insurance recently achieved the
significant milestone of completing 10 years of operations in India.
3.1.20.6 Max New York Life Insurance Co. Ltd
Max New York Life Insurance (MNYL) is a joint venture
between Max India Limited (74%) and New York Life
International (26%). The company started its operations in the April
2001in India. New York Life Insurance Company, is the largest mutual
life insurance company in the United States and one of the largest life
insurers in the world along with being in the business of annuities and
long-term care insurance. The company has a large distribution network
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of 676 branches spanning 389 towns in India. The company has a good
mix of life insurance products – both traditional and unit linked insurance
plans.
Max New York Life offers a variety of flexible products covering
both life and health insurance including 8 riders that can be customized to
over 800 combinations which enable the customers to choose the policy
that suits their needs. Max New York Life also offers 6 products and 7
riders in group insurance business. The company has a plan for every
need, designed as to meet people’s long term financial goals &
aspirations. It is the first life insurance company in India to be awarded
the IS0 9001:2000 certifications. The company has around 133 offices all
over the country.
3.1.20.7 Met Life India Insurance Company Ltd.
PNB MetLife India Insurance Company Limited (PNB MetLife) is
a joint venture where MetLife, Inc. and Punjab National Bank (PNB) are
the majority shareholders. PNB MetLife was previously known as
MetLife India Insurance Company Limited (MetLife India). MetLife
India has been present in India since 2001 and is now ranked 88th on the
"FORTUNE 500 companies" list. This insurance company was awarded
as one of the "100 Best Companies for Working Mothers" by 'Working
Mother' magazine. PNB MetLife is one of the fastest growing life
insurance companies in the country.
MetLife India Insurance Company has a wide range of insurance
products to service its customers. It has more than 50,000 insurance
advisors who help customers choose the right insurance plans in more
than 600 locations across India. The partner institutions also enable them
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to distribute their insurance products to a large number of customers.PNB
MetLife provides a wide range of protection and retirement products
through its Agency sales of over 25,000 financial advisors and bank
partners, and provides access to employee benefit plans for over 800
corporate clients in India. The Company continues to be consistently
profitable and has declared profits for nine consecutive quarters as of Q2
2012-13.
3.1.20.8 Kotak Mahindra Old Mutual Life Insurance Limited
Kotak Mahindra Old Mutual Life Insurance Limited is a joint
venture between Kotak Mahindra Bank (74%) and Old Mutual Plc (26%)
headquartered in London. Kotak Life Insurance is a fast growing life
insurance company in India. The company started operations in 2001, and
strives to offer its customers outstanding value through high customer
empathy, consistent and benchmarked service and a suite of products that
leverage the combined prowess of protection and long term savings. The
Group has a wide distribution network through branches and franchisees
across India. Kotak Mahindra Old Mutual Life Insurance Ltd. offers
various insurance products in India and is considered one of the most
rapidly growing insurance companies in the country. The company has
more than 200 branches in India and along with the distribution reach of
its group companies, is well positioned to reach out to the length and
breadth of the country. It has a large spectrum of life insurance products
catering to protection, savings and retirement solutions.
3.1.20.9 SBI Life Insurance Co. Ltd
SBI Life Insurance Company is a joint venture between the State
Bank of India (74%) and BNP Paribas Assurance (26%) of the capital.
SBI Life Insurance has an authorized capital of 2000 Crore
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(US$370 million) and a paid up capital of 1000 crore (US$180 million).
The company launched its business in the year 2001. SBI Life Insurance
is now among the top life insurance providers in India. It is the largest
private life insurer and was the 1st private life insurance company to
become profitable. The huge customer base and the reach of its banking
channel are the advantages which SBI enjoys over the other insurance
companies. It has a wide array of life insurance products to adequately
cater to the Indian consumer. SBI Life offers a variety of products
designed for various segments of society. These include individual plans,
group plans and health plans. All these products cater to various
requirements of its end users. In 2007-2008, SBI was placed with the
global top 5 life insurance companies with largest number of MDRT
members.
3.1.20.10 Tata AIG Life Insurance Company Limited
Tata AIG Life Insurance Company is a joint venture between
the Tata Group (74%) and American International Group (26%). The
company started its life insurance business in India in April 1,
2001. The life insurance business has a strong distribution network of
branches, agents and bank assurance channels which are present
throughout the length and breadth of India. The company has an excellent
array of protection, savings and up lips which help them serve the
different needs to customers. Tata AIG provides to health Insurance plans
and from child plans to retirement policies, and also provides wealth
plans that offer more liquidity options and help you in achieving all that
is not covered by their other plans.
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3.1.20.11 Reliance Life Insurance Company Limited.
Reliance Life Insurance Company is a part of Reliance - Anil
Dhirubhai Ambani Group (ADAG) Reliance Capital is the holding
company which is a well diversified business with an established
presence in the financial services sector. Reliance Life Insurance is one of
the few private life insurance companies in India which have launched
operations without a foreign partner. Apart from its stand-alone
distribution network the company has access to its large distribution
which already is into the consumer finance business in a big
way. Reliance Life Insurance Company Limited comes under the Anil
Dhirubhai Ambani Group (ADAG) which ranks among the top 3 private
sector financial services and banking companies of India. Reliance
ventured into the life insurance business in October 2005 by acquiring
AMP Sanmar and in 2009-2010, it became the largest private insurer of
India with largest number of policy count.
RLIC has a huge network of around 1145 branches covering a wide
geographical area. It is one of the ISO 9001:2000 certified life insurance
companies of India and has been awarded the "Jamnalal Bajaj Uchit
Vyavahar Puraskar 2007 - Ceritificate of Merit" in the Financial Services
category by Council for Fair Business Practices (CFBP). This company
also won the DL Shah Quality Council of India Commendation award in
February 2008. The Company strives to provide profitable life insurance
solutions catering to requirements in all stages of life – child
plans, pension plans and pure protection solutions. Reliance Life
Insurance offers people products that fulfil their savings and protection
needs.
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3.1.20.12 Aviva Life Insurance Company India Limited
Aviva India Life Insurance Company is a joint venture
between Dabur India and Aviva Plc of UK. Not only largest in the UK,
Aviva is also the fifth largest insurance group in the world and has been
associated with India in various ways since 1834. Partners of the Aviva
group include: The Royal Bank of Scotland since 2002 when the bank
was known as ABN-AMRO, Punjab & Sind Bank since 2004 and DBS,
which is Asia's largest financial service group. Aviva Life Insurance has a
fairly large distribution of network with 195 branches spread across 3000
towns in India. Aviva India also has a large Bank assurance channel with
close to 40 tie-ups with different banks and financial institutions. Aviva
offers various products that are meant to provide customers with
flexibility, transparency and value for money. Given here is a complete
list of products and services offered by Aviva Life Insurance India.
3.1.20.13 Sahara India Life Insurance Co, Ltd.
The Pariwar’s life insurance company – Sahara India Life
Insurance Company Ltd, has been granted licence by the insurance
regulator – the IRDA on 6th February 2004. With this approval Sahara
India Life Insurance Company Ltd. becomes the first wholly and purely
Indian company, without any foreign collaboration to enter the Indian
Life insurance market. The launch is with an initial paid up capital of 157
crores. The operations of the life insurance company are currently
focused North and Central India.
The insurance plans offered by Sahara India Life Insurance
Company Limited are unique in their own terms. The company offers
both individual and group insurance products. Through the different
insurance plans, the company aims to cater to the different needs of the
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Indian society. The Sahara Pariwar, the world's largest 'family' with
diversified business interests, is a recent entrant in the field of life
insurance.
3.1.20.14 Bharti AXA Life Insurance Company Ltd.
Bharti AXA Life Insurance Company is a joint venture between
the Bharti Enterprises (74%) and the Paris based AXA Group (26%) and
started its operations in India December 2006. Today, Bharti AXA Life
has a national footprint of distributors trained to provide quality financial
advice and insurance solutions to the large Indian customer base. Today,
Bharti AXA Life Insurance is making its presence felt across the country
and is catering to the insurance and wealth management needs of the
people.
3.1.20.15 Future Generali India Life Insurance Company Limited
Future Generali India Life Insurance Company is a joint venture
between Future Group of India and Generali Group based in
Italy. The Generali Group is a leading player in the global insurance and
financial markets. It is present in almost 68 countries across the world
with a majority presence in Europe. Established in Trieste in 1831, today
the Group is one of Europe’s largest insurance providers and the
European biggest Life insurer. The Group occupies a leadership position
in Western Europe and an increasingly important place in Eastern Europe
and Asia. This international group functions in 68 countries with
insurance companies, financial companies and real estate sectors.
Generali Group is the largest insurance provider in Europe and is ranked
30th largest company in the Fortune 500 international ranking. Future
Generali Life Insurance Company is well poised to service the Indian
consumer. The group has an established presence in the Indian minds and
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has a large distribution network along with its sister concerns – the
consumer finance arm alone has 150 odd branches across India.
3.1.20.16 IDBI Federal Life Insurance Company Ltd.
IDBI Federal Life Insurance Company is a joint venture
between IDBI Bank Limited (48%), Federal Bank (26%) and Aeges
(26%) The company was earlier called IDBI Fortis Life Insurance
Company. In April 2010, Fortis the foreign partner changed its name
to Aeges which has resulted in the name change in this joint venture too.
Aeges, an international insurance group composed of AG Insurance, is
the overall market leader in life and non-life insurance in Belgium by
distributing its insurance products through the network of BNP Paribas
Aeges Bank and independent insurance brokers, and Aeges Insurance
International with its subsidiaries.
IDBI Federal became one of the fastest growing new insurance
companies to garner Rs 100 Cr in premiums. Through a continuous
process of innovation in product and service delivery IDBI Federal aims
to deliver world-class wealth management, protection and retirement
solutions that provide value and convenience to the Indian customer. The
company offers its services through a vast nationwide network of 2067
partner bank branches of IDBI Bank and Federal Bank in addition to a
sizeable network of advisors and partners. As on 31st January 2013, the
company has issued over 7.70 lakh policies with a sum assured of over
Rs. 25,961 Cr.
IDBI Federal today is recognized as a customer-centric brand, with
an array of awards to their credit. They have been awarded the PMAA
Awards (2009) for best Dealer/Sales force Activity, EFFIE Award (2011)
90
for effective advertising, and conferred with the status of ‘Master Brand
2012-13’ by the CMO Council USA and CMO Asia. IDBI Federal Life
Insurance Co. Ltd. was established in March 2008 and became one of the
fastest growing new insurance companies by gathering Rs.100cr worth of
premium in the first five months itself.
3.1.20.17 Canara HSBC Oriental Bank of Commerce Life Insurance
Company Ltd.
The Company was launched on 16 June 2008 and is a Joint
Venture between Canara Bank (holding 51%), HSBC Insurance (Asia
Pacific) Ltd (holding 26%), the Asian insurance arm of one of the world's
largest banking and financial services groups - HSBC and Oriental Bank
of Commerce (holding 23%). The company started operations in India in
2008. HSBC OBC networked all over the country, in order to cater to its
customers.
Though there are many private insurance organization, only LIC of
India covers the cross section of the society such as people living in urban
areas and rural areas, rich people and poor people, people who get high
income and low income, employed people and unemployed people and
persons who belong to different age groups such as children, adolescents,
married couples, pensioners and ole people. Hence, LIC is a symbol of
safety to the common people who cannot predict their future events in
their lives.
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3.2 PROFILE OF THE STUDY AREA
Namakkal District is named as Platinum district. Once it was a part
the Salem District and the historical background of Salem and Namakkal
remains the same. After the struggle between the Cheras, Cholas and
Pandiyas, the Hoysales rose to power and had control till the 14 th
Century followed by Vijayanagar Kings till 1565 A.D. Then the Madurai
Nayakas came to power in 1623 A.D. Two of the polygons of Thriumalai
Nayak namely, Ramachandra Nayaka and Gatti Mudaliars ruled the
Salem area. The Namakkal Fort is reported to have been built by
Ramachandra Nayakas. After about 1625 A.D., the area came
successively under the rule of Muslim Sultans of Bijapur and Golkinda
Mysore kings and then the Marathas, when about the year 1750
A.D.Hyder Ali came to power. During this period, it was a history of
power struggle between Hyder Ali and later Tippu, with the Brtitish.
The Rock Fort in Namakkal is a special feature of the Town. The
Fort covers an area of one and half acres of flat surface and is accessible
from South-West by a flight of narrow steps. Namakkal was in the hands
of Atikula King called Gunasila who married the daughter of Pallava
King. Later the taulk was overrun by the Cholas in the Kongu Mandalam
which has over run by the cholas in the 9th Century and passed on to
Vijayanagar under the Viuroyultry of madra. Namakkal was held by
Killdhar (Caption) on Hyder Ali until it was captured by British in 1768.
3.2.1 LOCATION AND PHYSIOGRAPHY
Namakkal District is situated at 110 00’ and 120 00’ of the North
latitude and 77 0 40’ and 780 05’ of the East longitude. The altitude of the
district is 300 meters above MSL.
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Namakkal District comes under the North Western Agro climatic
zone (Excluding Tiruchengode Taluk) of Tamil Nadu. it is situated in the
dividing portion of two watersheds between Cauvery and the Vellar
system with the Taluks of Attur, Rasipuram and Namakkal on the East
and Salem, Omalur and Mettur on the West. Tiruchengode taluk alone is
placed under Western Agro-climatic zone.
Besides above two zones, Kollihills in Namakkal and few isolated
hills and ridges scattered over Namakkal Rasipuram and Tiruchengode
along with the Valleys and rolling topography contributes to the
characteristic physiography of the district.
Kollihills the Garden of Namakkal district comprising of 14 village
panchayats called ‘Nadu’ is having an area of 371.03 sq.km at an altitude
of 1300 mts. above MSL.
The Northern portions of Namakkal are mountains and the
Southern areas are plains. The plain area of the district can be divided
into 3 elevating stages. The lower elevation (below 150 m) has Namakkal
and Paramathy taluks which are bringing benefitted by Cauvery River.
The mid elevation (150-300 m above M.S.L), occupies the major area in
all Taluks. The high elevation area (between 300-600m) spreads over
mainly in Rasipuram and Namakkal Taluks. The chief rivers run through
in the district are Cauvery Karipottamaru and Thirumanimuthar. The
Cauvery flows South and South west hugging the border.
The famous Cauvery River flows along the Western and Southern
boundaries of the district at an elevation of 150 m. It benefits most of the
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cultivated lands in Paramathy and Mohanur Block. Its tributaries are
Sarabanga and Tirumanimuthar.
3.2.2 COMMUNICATIONS
The district is well served by road transports. NH-7 and NH-47
pass through all the taluk headquarters, other towns and most of the
villages are connected by motorable roads.
3.2.3 NATURAL RESOURCES
3.2.3.1 Climatic
Namakkal District experiences semi-arid tropical climate wherein four
distinct seasons viz., South west monsoon (June- September.) North East
Monsoon (October – December) winter season (January – February.) and
summer season (March – May) are experienced. The maximum
temperature ranges from 28 to 400 C and the minimum from 14 0 to 26 0
C.During January and February lowest temperatures are recorded while
maximum temperature during April – May. The rainfall during this
period will be very minimum when compared to other periods.
The summer period starts from March and ends by May. This is the
period that the temperature is usually high in the district. During this
period rains, isolated thunder showers accompanied by gale winds are
observed. About 19% of the total annual rainfall is received during this
period, which helps to take sowing of rain fed crops well in advance. If
the summer shower fails, the district normally experiences Water scarcity
for drinking.
The hot climate subsidies when the South West monsoon sets in,
usually during June. 40 % of annual rainfall is recorded during this
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period. Farmers are able to raise Paddy nurseries with the help of this
rain. The remaining unsown rain fed areas are also brought under
cultivation during this period. North east monsoon which prevails from
October to December gives 40.5% of annual Rainfall. This helps the
farmer to take up II crop under rain fed condition. The cold weather
generally commences in December after the cessation of North east
monsoon rains. The minimum temperature of 15-160 C recorded during
December to February generally affects the pollination in cereals
particularly Rice.
3.2.3.2 Temperature
The maximum and minimum temperature ranges are as follows:
Month Maximum Minimum
April-May, July, August….. 37.00 C 24.50C
September, October, November ……. 31.80C 22.30C
December and January………. 30.50C 19.00C
3.2.4 Relative humidity
In general, the district records higher relative humidity due to the
surroundings of hill areas. Relative humidity variation between day and
night are higher resulting in higher probability of pest and disease
incidences.
3.2.5 Wind
From October to March, wind blows generally from North
Easternly and Easternly directions. South Westernly and Westernly winds
predominate from May to September. The wind speed is least in October
to February, while it is higher from July to September.
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3.2.6 Sunshine hours
The sunshine hours are generally long during February to May
ranging from 8.4 hours to 9.5 hours per day. During August, September
and October it ranges from 6.3 to 6.8 hours per day.
3.2.7 Rainfall
The average annual rainfall of the district is 776 mm (Table No.3)
Nearly 80 per cent of the total is received during the SWM and NEM
season. Among these two seasons SWM receives 40% of rainfall and
NEM 40.6%. Summer season records 19.1% of the total rainfall. The
winter season receives only 0.3% of the total rainfall. Among the months
September and October receives more rainfall (125.8 and 124. 7 mm
respectively) followed by November (95.0 mm) and August (92.5mm).
Since rainfall distribution is bi-model in nature and the quantity of
rainfall received during the SWM and NEM is sufficient for raising rain
fed crops, two crops are recommended per year.
3.2.8 ADMINISTRATION
There are 5 Taluks, 14 Block Union and 4 Municipalities in
Namakkal District is given below:
3.2.8.1 TALUKS
1. Namakkal
2. Paramathi – Velur
3. Tiruchengode
4. Rasipuram
5. Kumarapalayam
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3.2.8.2 BLOCK UNIONS
1. Namakkal 6. Puduchatram 11. Sendamangalam
2. Erumaipatti 7. Mohanur 12. Kollikills
3. Rasipuram 8. Namagiripet 13. Vennandur
4. Paramathi 9. Kabilarmalai 14. Tiruchencode
5. Mallasamudram 10. Elachipalayam.
3.2.8.3 MUNICIPALITIES
1. Namakkal
2. Rasipuram
3. Tiruchengode
4. Komarapalaya,
5. Pallipalayam
vagaries of rain fall in dry areas, lack of enough water in the rivers,
lack of work for the agricultural labourers ups and downs in lives of
employed people and business people the growth of population, natural
calamities such as drought and flood and uncertainties in lives of
Namakkal district necessitated them to take shelter in the umbrella of life
insurance policy.
97
98
FOOT NOTES
1. Life insurance premium paid by the employee on a policy taken on his
own life, life of the spouse on any child (male of female) dependent or
independent, married or unmarried at a maximum of 20 percent of sum
assured is savings for deductions from taxable income up to Rs.1,
00,000.
2. Benefits of Life policies are exempted from income-tax.
99
CHAPTER – IV
ANALYSIS AND INTERPRETATION OF DATA – I
In this chapter, an attempt has been to identify the factors that
influence the policy holders’ preference for LIC products by the policy
holders in the study area. for this purpose systematic random sampling
method was employed to collect first hand information from 500 sample
respondents. The respondents have been chosen randomly from the
different parts of the study area. The data thus collected were arranged
into simple tabular form. the level of satisfaction perceived by the
selected sample respondents in their policy holders’ preference is
considered as the dependent variable, the independent variable selected
for the study are gender, age, marital status, type of family, occupation,
educational qualification, income of the family, residential area and
influence factors.
The data were analyzed by using simple statistical tools,
descriptive statistics like percentage, mean, standard deviation and T-
statistics.
TABLE NO 4.1
100
TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF
GENDER, AGE, NO. FAMILY MEMBERS, MARITAL STATUS AND
TYPE OF FAMILY OF THE RESPONDENTS OF LIC POLICY
HOLDERS
Basis of classification Particulars No. of
respondents Percentage
Gender
Male 289 57.80
Female 211 42.20
Total 500 100.00
Age Group
Below 25 years 108 21.60
Between 25 - 35 years 222 44.40
Between 35 - 45 years 91 18.20
Between 45 - 55 years 42 8.40
Above 55 years 37 7.40
Total 500 100.00
Marital Status
Married 436 87.20
Unmarried 64 12.80
Total 500 100.00
Type of Family
Nuclear family 335 67.00
Joint family 165 33.00
Total 500 100.00
No. of Family
Members
2 members 49 9.80
3 members 150 30.00
4 members 147 28.40
5 members 21 4.20
More than 5 133 26.40
Total 500 100.00
Source: Primary data.
101
The above table shows the classification of the respondent of 500
LIC policy holders on the basis of personal and demographical
information. 289 respondents belong to male and 211 respondents are
female. The majority of the respondent 57.8% were male.
The age wise classification shows that 222 respondents belong to
the age group between 25 – 35 years and 108 respondents are below 25
years. In the five level of age wise classification 44.4% are in the age
group between 25 – 35 years.
The majority of the respondents are married. The married
population of this study was 436 that is 87.2% of 500 respondent. 67% of
the respondents are in nuclear family type and 33% are in joint family.
Out of 500 respondents of this study, 150 respondents have more
than 3 members in their family, 147 respondents have less than 4
members in their family. 133 respondents have more than 5 members in
their family.
It is clear from that table that out of 500 respondents 57.8% are
male, 44.4% are in the age group between 25 - 35 years, 87.2% were
married and 67% living nuclear family type, 150 respondents have less
than 3 members in their family
102
Male 58%
Female42%
Chart 1 Gender of the respondnets
103
Below 25 25 to 35 35 to 45 45 to 55 Above 55
Series1 108 222 91 42 37
0
50
100
150
200
250
No.of respondents
Chart 2 Age group of the respondents
104
87%
13%
Chart 3 Marital status of the respondents
Married Unmarried
105
67%
33%
Chart 4 Type of family of the respondents
Nuclear Joint
106
0 20 40 60 80 100 120 140 160
2 members
3 members
4 members
5 members
more than 5 members
No. of respondents
No. o
f family m
embers
Chart 5 No. of family members of the respondents
107
TABLE NO 4.2
TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF
OCCUPATION, QUALIFICATION, INCOME, AND RESIDENTIAL
AREA OF THE RESPONDENTS OF LIC POLICY HOLDERS
Basis of classification Particulars No. of
respondents Percentage
Occupation
Government employees 55 11.00
Private Employees 48 9.60
Business people 191 38.20
Professionals 116 23.20
Others 90 18.00
Total 500 100.00
Qualification
Primary level 167 33.40
Higher Secondary 225 45.00
Graduates 41 8.20
Post Graduates 8 1.60
Professionals 30 6.00
Technicians 29 5.80
Total 500 100.00
Income
Below Rs.5,000 78 15.60
Rs.5,000 - 10,000 268 53.60
Rs.10.000 - 20,000 93 18.60
Rs.20,000 - 30,000 61 12.20
Total 500 100.00
Residential Area
Urban 419 83.80
Rural 81 16.20
Total 500 100.00
Sources: Primary Data
108
The above table reflects the occupation, qualification, Income and
nature of the area that the respondents belong are explained. Regarding
the occupation of the study respondent of 500, 191 respondents are doing
business and 116 respondents are in Professionals. The majority of the
respondents are doing business.
Regarding the six level of educational status of the respondents are
given in the above table. 225 respondents are educated up to higher
secondary. The 167 respondents are educated up to primary level of
education. 8.2% people in the study sample are up to graduate and 1.6%
respondents acquired post graduate level of education. It is clear from
the table Majority of 45% of the respondent are up to higher secondary
level of education.
The monthly income of the respondent is also classified into four
levels. It reflects that 53.6% of the respondents earn Rs. 5,000 to 10,000
pm. It is 268 out of 500 respondents. 1.22% of respondents incomes are
in between Rs. 20,000 to 30,000.
It is concluded that 83.8% of the respondents are belong to urban
area. 53.6% respondents monthly income is in between Rs. 5,000 to
10,000. 45% of respondents who are included in this study are educated
up to Higher Secondary and 38.2% respondents are doing Business.
Out of 500 respondents 83.8% of the respondents belong to the
urban areas, whereas 16.2% of the respondents are in rural areas.
109
0
50
100
150
200
250
Gvt. Employee Private Employee
Business Professional Others
No. o
f respondents
Occupation
Chart 6 Occupation wise classification of the respondents
110
0
50
100
150
200
250
No. o
f respondents
Chart 7 Educational Qualification of the respondents
111
0
50
100
150
200
250
300
Below Rs. 5,000 Rs. 5,000 to Rs. 10,000
Rs. 10,000 to Rs. 20,000
Rs. 20,000 to Rs. 30,000
No. o
f respondents
Monthly Inome
Chart 8 Monthly income of the respondents
112
Urban84%
Rural16%
Chart 9 Residential area of the respondents
113
TABLE NO 4.3
TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF THEIR
ASSETS ACQUIRED, PREFERENCE TO INVEST, INFLUENCE OF
PERSONS, PURPOSE OF TAKING INSURANCE POLICY AND
BUYING AN INSURANCE OF THE RESPONDENTS
Basis of
classification Particulars
No. of
respondents Percentage
Assets have you at present
Own individual house 65 13.00Own House 213 42.60Two Wheeler 100 20.00Car 48 9.60Plot 74 14.80 Total 500 100.00
Preference to invest
Insurance Company 226 45.20Bank 172 34.40Both 102 20.40 Total 500 100.00
Purpose of taking insurance
Premium Outflow 50 10.00 Company Reputatin 175 35.00Service Quality 80 16.00 product Quality 107 21.40Return on Investments 88 17.60 Total 500 100.00
Influence of person
Personal interest 45 9.00 Friends 173 34.60 Family 76 15.20Agents 114 22.80Advertisement 92 18.40Total 500 100.00
Purpose of Buying an Insurance
A life risk coverage 254 50.80Family need 159 31.80Purpose of saving 87 17.40
Total 500 100.00
Source: Primary data
114
The above table reflects the assets hold by the respondents. Six
levels assets are classified. Out of 500 respondents, 42.6% of the
respondents are having own house. 20% of the respondents having two
wheeler. The respondents expressed their desire of investment either
Insurance or Bank.
Out of 500 respondents 45.2% respondents prefer investment in the
insurance company and 34.4% of the respondents prefer Bank investment
and remaining 20.4% prefer both Bank and insurance investment. The
respondents are asked to give their opinion why they want invest in LIC.
Their answers are categorized into five level.
Out of 500 respondents, 35% are investing in LIC for the
Reputation of LIC name. 21.4% are investing their money in LIC for a
Product Quality and 10% of respondent concern about premium.
Moreover 34.6% respondents are motivated by their friends to take
Insurance Policy.22.8% of the respondents are motivated by the LIC
advisors. Just only 9% of the respondents taking policy on their own
personal interest. It is concluded that 42.6% respondents have own house.
45.2% of the respondents prefer to invest their money in insurance
company. 35% of the respondents invest their money in LIC for the
reputation of the company. 34.6% of the respondents are motivated by
their friends. 50.8% respondents are taking insurance for a life risk
coverage purpose.
The purposes of taking insurance policy are classified into three
levels. Out of the three levels 50.8% of the total respondents concerned
for their life risk coverage. 31.8% of the respondents are taking insurance
because of Family need. Just 17.4% are taking insurance for saving
purpose.
115
0 50 100 150 200 250
Own individual house
Own house
Two wheeler
Car
Plot
No.of respondents
Have you assets
Chart 10 Assets have you at present of the respondents
116
Insurance Company
45%
Bank35%
Both20%
Chart 11 Preference to investment of the respondents
117
0 50 100 150 200
Premium outflow
Company reputation
Service quality
Product quality
Return on investment
No. of respondents
Influence to take insurance
Chart 12 Purpose of taking insurance of the respondents
118
9%
35%
15%
23%
18%
Chart 13 Person influence to take insurance of the respondents
Personal interest Friends Family Agents Advertisement
119
0 50 100 150 200 250 300
A life risk coverage
Family need
Purpose of saving
Buying an
insurance
Chart 14 Purpose of buying an insurance of the respondents
120
TABLE NO - 4.4 TABLE SHOWS THE CLASSIFICATION ON THE BASIS OF TYPES OF PLAN, NO. OF POLICY, VALUE OF TOTAL POLICY AND AMOUNT OF PREMIUM OF THE
RESPONDENTS OF THE POLICY HOLDERS
Basis of classification Particulars No. of
respondents Percentage
Type of plan
ULIP 112 22.40
Term Plan 111 22.20
Health Plan 74 14.80
Traditional Plan 203 40.60
Total 500 100.00
No. of Policy
One 42 8.40
Two 73 14.60
Three 52 10.40
Four 104 20.80
Five 229 45.80
Total 500 100.00
Value of total Policy
Rs. 50,000 49 9.80
Rs. 50,001 to 1,00,000 169 33.80
Rs. 1,00,001 to 2,00,000 108 21.60
Rs. 2,00,001 to 5,00,000 74 14.80
Rs. 5,00,001 and above 100 20.00
Total 500 100.00
Amount of Premium
Below 5000 75 15.00
5001 to 10,000 145 29.00
10,001 to 20,000 80 16.00
20,001 to 30,000 50 10.00
30,001 to 50,000 90 18.00
50,001 and above 60 12.00
Total 500 100.00
Source: Primary data
121
Regarding the selection of type of insurance policy, 40.6% of
policy holders opt Traditional plan for their investment. 22.4% select
ULIP plan, 22.2% of select Term plan and 14.8% of the respondent opt
Health plan. It is clear from the table that 40.6% choose Traditional plan.
Regarding the selection of the No. of policies, 45.8% of
respondents have more than five policies. 20.8% respondents have four
policies, 14.6% of respondents have two policies, 10.4% of respondents
have three policies and 8.4% of respondents have one policy. It is clear
from the table that 45.8% choose five policies.
Regarding the value of the policy 33.8% of respondents have a
worth of Rs. 50,001 to Rs. 1,00,000, 21.6% of respondents have a worth
of Rs. 1,00,001 to 2,00,000, 20.0% of respondents have a worth of Rs.
5,00,001 and above, 14.8% of respondents have a worth of Rs. 2,00,001
to Rs. 5,00,000 and 9.8% of respondents have a worth of Rs. 50,000.It is
clear from the table that 33.8% of the respondents have a value of worth
Rs. 50,001 to 1,00,000.
Regarding the amount of premium paid by the respondents, 29% of
the respondents are paying Rs. 5,000 to 10,000 as a premium, 18% of the
respondents are paying Rs. 30,001 to Rs. 50,000 as a premium, 16% of
the respondents are paying Rs. 10,0001 to 20,000 as a premium, 15% of
the respondents are paying below Rs.5,000 as a premium, 12% of the
respondents are paying Rs. 50,001 and above as a premium, 10% of the
respondents are paying Rs. 20,001 to 30,000 as a premium. It is clear
from the table that 29% of the respondents are Rs. 5,000 to 10,000 as a
premium paid.
122
0
50
100
150
200
250
ULIP Term Plan Health Plan Traditional Plan
Series1 112 111 74 203
No. o
f responden
tsChart 15 Type of plan of the respondents
123
0
50
100
150
200
250
One Two Three Four Five
No. o
f respondents
No.of Policy
Chart 16 No. of policy of the respondents
124
0
20
40
60
80
100
120
140
160
180
Rs. 50,000 Rs. 50,001 to Rs.
1,00,000
Rs. 1,00,001 to Rs.
2,00,000
Rs. 2,00,001 to Rs.
5,00,000
Rs. 5,00,001 and above
No. o
f respondetns
Sum assured value
Chart 17 Value of sum assured of the respondents
125
0
20
40
60
80
100
120
140
160
Below Rs. 5,000
Rs. 5,001 to Rs. 10,000
Rs. 10,001 to Rs. 20,000
Rs. 20,001 to Rs. 30,000
Rs. 30,001 to Rs. 50,000
Rs. 50,001 and above
No. o
f respondents
Amount of premium
Chart 18 Amount of premium of respondents
126
TABLE NO 4.5
TABLE SHOWS THAT CLASSIFICATION ON THE BASIS OF
PREMIUM PAID, METHOD OF PREMIUM PAID AND MODE OF
PAYMENT OF THE RESPONDENTS
Basis of classification Particulars No. of
respondents Percentage
Premium paid
Monthly 72 14.40
Quarterly 109 21.80
Half-yearly 214 42.80
yearly 105 21.00
Total 500 100.00
Method of Premium
paid
Through agent 260 52.00
By self 180 36.00
Through Bank 60 12.00
Total 500 100.00
Mode of payment
By cheque 102 20.40
By cash 338 67.60
By Debit and Credit Card 60 12.00
Total 500 100.00
Source: Primary data
127
Regarding the selection of premium paid. 42.8% of respondents are
paying their premium in half-yearly payment option, 21.8% of
respondents are paying in Quarterly payment, 21.0% of respondents are
paying their premium in yearly payment option and 14.4% of the
respondents are paying their premium in monthly payment. It is clear
from the table that 42.8% of the respondents are paying premium in half-
yearly payment.
Regarding the selection of method of premium paid. 52% of the
respondent are paying their premium through their LIC Agent, 36% of
respondents are paying their premium by self and remaining 12% of the
respondents are paying their premium through their LIC Agent.
Regarding the selection of mode of payment. 67.60% of the
respondents are paying by cash, 20.4% of the respondents are paying by
cheque and 12% of the respondents are using bank for their payment of
premium. It is clear from the table that 67.6% of the respondents are
paying their premium by cash.
128
Monthly14%
Quarterly22%
Half yearly43%
Yearly21%
Chart 19 Premium paid of the respondents
129
0 50 100 150 200 250 300
Through agent
By self
Through bank
No. of respondents
Premium paid
Chart 20 Method of premium paid by the respondents
130
0
50
100
150
200
250
300
350
400
By cheque By cash By debit and credit card
No. o
f respondents
Mode of payment
Chart 21 Mode of payment by the respondents
131
TABLE NO-4.6
INDEPENDENT SAMPLE T-TEST AGE VS OVERALL RATING OF
SATISFACTION OVER THE FUNCTIONS OF LIC
Group Statistics
Gender No. of respondents Mean Std. Deviation Std. Error Mean
Male 289 2.30 1.355 0.080
Female 211 2.62 1.444 0.099
Independent Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 6.594 0.011 -2.563
Equal variances not assumed - - -2.538
Independent Samples Test
Overall rating of the LIC
functions
t-test for Equality of Means
df Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.011 -0.323
Equal variances not assumed 435.515 0.012 -0.323
The above table shows the opinion of male and female respondents
regarding overall satisfaction on functions of LIC. To check whether or
not male and female respondents differed significantly in terms of their
mean ratings on this five point scale opinion. On the five point scale,
males gave a mean rating of approximately 2.30, whereas females gave a
mean rating of approximately 2.62.
132
Hypotheses
Null Hypothesis: There is no difference between Mean score of the
overall satisfaction of LIC functions of Male and Female.
Alternative Hypothesis: There is a difference between Mean score
of the overall satisfaction of LIC functions of Male and Female.
The result of test statistics shows the F value 6.594, the p value of
.011 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3there is no significant relationship
that the mean satisfaction score of joint family respondents and nuclear
family respondents are the same for the two family type. There is no
significant relationship that the mean satisfaction score of joint family
respondents and nuclear family respondents are the same for the two
family type. There is no significant relationship that the mean satisfaction
score of joint family respondent and nuclear family respondents are the
same for the two family types. A difference of magnitude of -0.323 (2.30-
2.62) could be occurred from chance. At the α = 0.05 level of
significance, there is not enough evidence to conclude that the mean
satisfaction score of Male and female are the same for the two areas.
133
TABLE NO – 4.7
INDEPENDENT SAMPLE T-TEST ON MARITAL STATUS OF THE
RESPONDENT VS OVERALL RATING OF SATISFACTION OVER
THE FUNCTIONS OF LIC
Group Statistics
Marital Status No. of respondents Mean Std. Deviation Std. Error Mean
Married 436 2.38 1.385 0.066
Unmarried 64 2.81 1.457 0.182
Independent Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 2.193 0.139 -2.325
Equal variances not assumed - - -2.239
Independent Samples Test
Overall rating of the LIC
functions
t-test for Equality of Means
df Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.020 -0.434
Equal variances not assumed 80.617 0.028 -0.434
The above table shows the opinion of respondents regarding
overall satisfaction on functions of LIC. The respondents are based on the
marital status. To check whether or not married and unmarried
respondents are differed significantly in terms of their mean ratings on
this five point scale opinion. On the five point scale, Married respondent
134
gave a mean rating of approximately 2.38, whereas Unmarried
respondent gave a mean rating of approximately 2.81.
Hypotheses
Null Hypothesis: There is no differences between Mean score of
the overall satisfaction of LIC functions of married and unmarried
respondents.
Alternative Hypothesis: There is a differences between Mean score
of the overall satisfaction of LIC functions of married and unmarried
respondents.
The result of test statistics shows the F value 2.193, the p value of
.139 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of -
0.434 (2.38-2.81) could be occurred from chance. At the α = 0.05 level of
significance, there is not enough evidence to conclude that the mean
satisfaction score of married and unmarried respondents are the same for
the two areas.
135
TABLE NO – 4.8
INDEPENDENT SAMPLE T TEST ON FAMILY TYPE OF THE
RESPONDENT VS OVERALL RATING OF SATISFACTION OVER
THE FUNCTIONS OF LIC
Group Statistics
Type of Family No. of respondents Mean Std. Deviation Std. Error Mean
Nuclear family 335 2.54 1.409 0.077
Joint family 165 2.22 1.362 0.106
Independents Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 3.292 0.070 2.430
Equal variances not assumed - - 2.458
Independent Samples Test
Overall rating of the LIC
functions
t-test for Equality of Means
df Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.015 0.322
Equal variances not assumed 336.616 0.014 0.322
The above table shows the opinion of respondents regarding
overall satisfaction on functions of LIC. The respondents are classified on
their family type of living. There are naturally either nuclear family type
or Joint family type. To check whether or not Nuclear family respondents
and Joint family type of respondents differed significantly in terms of
their mean ratings on this five point scale opinion. On the five point scale,
136
Married respondents gave a mean rating of approximately 2.54, whereas
Unmarried respondents gave a mean rating of approximately 2.22.
Hypotheses
Null Hypothesis: There is no difference between Mean score of the
overall satisfaction of LIC functions of Joint family and nuclear family
respondents.
Alternative Hypothesis: There is a difference between Mean score
of the overall satisfaction of LIC functions of Joint family and nuclear
family respondents.
The result of test statistics shows the F value 3.292, the p value of
.070 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of
0.322 (2.54-2.22) could be occurred from chance. At the α = 0.05 level of
significance, there is not enough evidence to conclude that the mean
satisfaction score of joint family and nuclear family respondents are the
same for the two areas.
137
TABLE NO 4.9
INDEPENDENT SAMPLE T TEST ON NATURE OF THE AREA OF
THE RESPONDENT VS OVERALL RATING OF SATISFACTION
OVER THE FUNCTIONS OF LIC
Group Statistics
Nature of area No. of respondents Mean Std. Deviation Std. Error Mean
Urban 419 2.67 1.401 0.068
Rural 81 1.21 0.410 0.046
Independent Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 177.294 0.000 9.300
Equal variances not assumed - - 17.769
Independent Samples Test
Overall rating of the LIC
functions
t-test for Equality of Means
df Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.000 1.461
Equal variances not assumed 429.949 0.000 1.461
The above table shows the opinion of respondents regarding
overall satisfaction on functions of LIC. The respondents are classified on
their nature of geographical area of living. The respondents are living
either Urban area or Rural area. To check whether or not urban
respondents and Rural respondents are differed significantly in terms of
their mean ratings on this five point scale opinion. On the five point scale,
138
urban respondents gave a mean rating of approximately 2.64, whereas
Unmarried respondents gave a mean rating of approximately 1.21.
Hypotheses
Null Hypothesis: There is no difference between Mean score of the
overall satisfaction of LIC functions of urban respondents and rural
respondents.
Alternative Hypothesis: There is a difference between Mean score
of the overall satisfaction of LIC functions of urban respondents and rural
respondents.
The result of test statistics shows the F value 177.294, the p value
of .000 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of
0.322 (2.54-2.22) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of urban respondents and rural respondents are the same for the two
areas.
139
TABLE NO 4.10
INDEPENDENT SAMPLE T TEST ON NATURE OF THE AREA THE
RESPONDENT LIVING VS OVERALL SATISFACTION RATING OF
VARIOUS LIC POLICY
Group Statistics
Nature of the area No. of respondents Mean Std. Deviation Std. Error Mean
Urban 419 2.58 1.425 .070
Rural 81 2.88 .399 .044
Independent Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 172.939 0.000 -1.888
Equal variances not assumed - - -3.651
Independent Samples Test
Overall rating of the LIC
functions
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.060 -0.301
Equal variances not assumed 443.693 0.000 -0.301
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC Policy. The respondents are classified
on their nature of geographical area living. The respondents living either
Urban area or Rural area. To check whether or not urban respondents and
rural respondents are differed significantly in terms of their mean ratings
on this five point scale opinion. On the five point scale, urban
140
respondents gave a mean rating of approximately 2.58, whereas Rural
respondents gave a mean rating of approximately 2.88.
Hypotheses
Null Hypothesis: There is no difference between Mean score of the
overall satisfaction of LIC functions of urban respondents and rural
respondents.
Alternative Hypothesis: There is a difference between Mean score
of the overall satisfaction of LIC functions of urban respondents and rural
respondents.
The result of test statistics shows the F value 172.939, the p value
of .000 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of -
0.301 (2.58-2.88) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of urban respondents and rural respondents are the same for the
two areas.
141
TABLE NO 4.11
INDEPENDENT SAMPLE T TEST ON NATURE OF THE FAMILY
THAT RESPONDENT LIVING VS OVERALL SATISFACTION
RATING OF VARIOUS LIC POLICY
Group Statistics
Type of family No. of respondents Mean Std. Deviation Std. Error Mean
Nuclear family 335 2.65 1.372 0.075
Joint family 165 2.58 1.205 0.094
Independent Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 4.865 0.028 0.574
Equal variances not assumed - - 0.600
Independent Samples Test
Overall rating of the LIC
functions
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.566 0.072
Equal variances not assumed 366.666 0.549 0.072
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC Policy. The respondents are classified
on their nature of family type. The respondent living either Joint family
or nuclear family type. To check whether or not joint family respondents
and nuclear respondents are differed significantly in terms of their mean
ratings on this five point scale opinion. On the five point scale, Joint
142
family respondents gave a mean rating of approximately 2.65, whereas
nuclear family respondents gave a mean rating of approximately 2.58.
Hypotheses
Null Hypothesis: There is no difference between Mean score of the
overall satisfaction of LIC functions of Joint family respondents and
Nuclear family respondents.
Alternative Hypothesis: There is a difference between Mean
score of the overall satisfaction of LIC functions of urban respondents
and rural respondents.
The result of test statistics shows the F value 4.865, the p value of
.028 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of
.072 (2.65-2.58) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of joint family respondents and nuclear family respondents are the
same for the two family type.
143
TABLE NO – 4.12
INDEPENDENT SAMPLE T TEST ON MARITAL STATUS OF THE
RESPONDENT LIVING VS OVERALL SATISFACTION RATING OF
VARIOUS LIC POLICY
Group Statistics
Marital status No. of respondents Mean Std. Deviation Std. Error Mean
Married 436 2.62 1.293 0.062
Unmarried 64 2.66 1.493 0.187
Independent Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 6.029 0.014 -0.209
Equal variances not assumed - - -0.188
Independent Samples Test
Overall rating of the LIC
functions
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.834 -0.037
Equal variances not assumed 77.489 0.851 -0.037
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC Policy. The respondents are classified
on their marital status of the respondents. The respondents living either
Joint family or nuclear family type. To check whether or not married
respondents and unmarried respondents are differed significantly in terms
of their mean ratings on this five point scale opinion. On the five point
144
scale, Joint family respondents have a mean rating of approximately 2.62,
whereas nuclear family respondents have a mean rating of approximately
2.66.
Hypotheses
Null Hypothesis: There is no difference between Mean score of
the overall satisfaction of Various LIC policy of married respondents and
unmarried respondents.
Alternative Hypothesis: There is a difference between Mean score
of the overall satisfaction on various LIC policy of married respondents
and unmarried respondents.
The result of test statistics shows the F value 6.029, the p value of
.014 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of -
.037 (2.62-2.66) could be occurred from chance. At the α = 0.05 level of
significance, there is significant relationship that the mean satisfaction
score of Married respondents and unmarried respondents are the same for
the two types.
145
TABLE NO - 4.13
INDEPENDENT SAMPLE T TEST ON GENDER VS OVERALL
SATISFACTION RATING OF VARIOUS LIC POLICY
Group Statistics
Gender No. of respondents Mean Std. Deviation Std. Error Mean
Male 289 2.47 1.250 0.074
Female 211 2.83 1.382 0.095
Independent Samples Test
Overall rating of the LIC
functions
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 0.907 0.341 -3.071
Equal variances not assumed - - -3.023
Independent Samples Test
Overall rating of the Various
LIC Products offered
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 .002 -0.364
Equal variances not assumed 425.139 .003 -0.364
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC Policy. The respondents are classified
on their gender. To check whether or not Male respondents and female
respondents are differed significantly in terms of their mean ratings on
this five point scale opinion. On the five point scale, male respondents
have a mean rating of approximately 2.47, whereas female respondents
have a mean rating of approximately 2.83.
146
Hypotheses
Null Hypothesis: There is no differences between Mean score of
the overall satisfaction of Various LIC policy of Male respondents and
female respondents.
Alternative Hypothesis: There is a differences between Mean score
of the overall satisfaction on various LIC policy of Male respondents and
female respondents.
The result of test statistics shows the F value .907, the p value of
.341 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of -
.364 (2.47-2.83) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of Male respondents and female respondents are the same for the
two types.
147
TABLE NO 4.14
INDEPENDENT SAMPLE T TEST ON GENDER VS OVERALL
SATISFACTION RATING OF SERVICES OF LIC TO CUSTOMERS
Group Statistics
Gender No. of respondents Mean Std. Deviation Std. Error Mean
Male 289 2.30 .944 .056
Female 211 2.40 .912 .063
Independent Samples Test
Overall rating of the LIC
services to customers
Levene's Test for
Equality of Variances
t-test for Equality
of Means
F Sig. t
Equal variances assumed 0.640 0.424 -1.193
Equal variances not assumed - - -1.200
Independent Samples Test
Overall rating of the Various
LIC services to customers
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.233 -0.101
Equal variances not assumed 461.205 0.231 -0.101
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC services. The respondents are
classified on their gender. To check whether or not Male respondents and
female respondents are differed significantly in terms of their mean
ratings on this five point scale opinion. On the five point scale, male
respondents gave a mean rating of approximately 2.30, whereas female
respondents gave a mean rating of approximately 2.40.
148
Hypotheses
Null Hypothesis: There is no difference between Mean score of the
overall satisfaction of Various LIC services of Male respondents and
female respondents.
Alternative Hypothesis: There is a difference between Mean score
of the overall satisfaction on various LIC services of Male respondents
and female respondents.
The result of test statistics shows the F value .640, the p value of
0.424 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of -
.101 (2.30-2.40) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of Male respondents and female respondents are the same for the
two types.
149
TABLE NO 4.15
INDEPENDENT SAMPLE T TEST ON MARITAL STATUS VS
OVERALL SATISFACTION RATING OF SERVICES OF LIC TO
CUSTOMER
Group Statistics
Marital Status No. of respondents Mean Std. Deviation Std. Error Mean
Married 436 2.35 0.923 0.044
Unmarried 64 2.30 .987 0.123
Independent Samples Test
Overall rating of the LIC
services to customers
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 0.118 0.731 0.397
Equal variances not assumed - - 0.377
Independent Samples Test
Overall rating of the Various
LIC services to customers
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.692 0.049
Equal variances not assumed 80.031 0.707 0.049
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC services. The respondents are
classified on the basis of marital status. To check whether or not married
respondents and unmarred respondents are differed significantly in terms
of their mean ratings on this five point scale opinion. On the five point
150
scale, married respondents gave a mean rating of approximately 2.35,
whereas unmarried respondents gave a mean rating of approximately
2.30.
Hypotheses
Null Hypothesis: There is no differences between Mean score of
the overall satisfaction of Various LIC services of married respondents
and unmarried respondents.
Alternative Hypothesis: There is a differences between Mean score
of the overall satisfaction on various LIC services of married respondents
and unmarried respondents.
The result of test statistics shows the F value .118, the p value of
.731 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude of
.049 (2.35-2.30) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of married respondents and unmarried respondents are the same
for the two types.
151
TABLE NO 4.16
INDEPENDENT SAMPLE T TEST ON FAMILY TYPE VS OVERALL
SATISFACTION RATING OF SERVICES OF LIC TO CUSTOMERS
Group Statistics
Type of Family No. of respondents Mean Std. Deviation Std. Error Mean
Nuclear family 335 2.37 0.909 0.050
Joint family 165 2.28 0.973 0.076
Independent Samples Test
Overall rating of the LIC
services to customers
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 0.391 0.532 1.032
Equal variances not assumed – - 1.009
Independent Samples Test
Overall rating of the Various
LIC services to customers
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.302 0.091
Equal variances not assumed 307.547 0.314 0.091
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC services. The respondents are
classified on the basis of their family type. To check whether or not
nuclear type of family respondents and Joint family respondents are
differed significantly in terms of their mean ratings on this five point
scale opinion. On the five point scale, nuclear type of respondents gave a
152
mean rating of approximately 2.37, whereas Joint family type of
respondents gave a mean rating of approximately 2.28.
Hypotheses
Null Hypothesis: There is no difference between Mean score of the
overall satisfaction of Various LIC services of Nuclear family
respondents and Joint family respondents.
Alternative Hypothesis: There is a difference between Mean score of
the overall satisfaction on various LIC services of Nuclear family
respondents and Joint family respondents.
The result of test statistics shows the F value .391, the p value of .532
indicates that the null hypothesis of equal variances for the two groups
cannot be rejected at the customary significance level of .05. The p value
implies that the odds are 2 to 3 that a difference of magnitude .091 (2.37-
2.28) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of nuclear family respondents and joint family respondents are the
same for the two types.
153
TABLE NO 4.17
INDEPENDENT SAMPLE T TEST ON AREA OF RESPONDENT
LIVING VS OVERALL SATISFACTION RATING OF SERVICES OF
LIC TO CUSTOMERS
Group Statistics
Nature of area No. of respondents Mean Std. Deviation Std. Error Mean
Urban 419 2.37 0.947 0.046
Rural 81 2.21 0.832 0.092
Independent Samples Test
Overall rating of the LIC
services to customers
Levene's Test for
Equality of Variances
t-test for
Equality of
Means
F Sig. t
Equal variances assumed 0.004 0.947 1.376
Equal variances not assumed - - 1.501
Independent Samples Test
Overall rating of the Various
LIC services to customers
t-test for Equality of Means
d.f Sig. (2-
tailed)
Mean
Difference
Equal variances assumed 498 0.169 0.155
Equal variances not assumed 123.594 0.136 0.155
The above table shows the opinion of respondents regarding
overall satisfaction on various LIC services. The respondents are
classified on the basis of locality. To check whether or not urban
respondents and rural respondents are differed significantly in terms of
their mean ratings on this five point scale opinion. On the five point scale,
154
male respondents gave a mean rating of approximately 2.37, whereas
female respondents gave a mean rating of approximately 2.21.
Hypotheses
Null Hypothesis: There is no differences between Mean score of
the overall satisfaction of Various LIC services of Urban respondents and
rural respondents.
Alternative Hypothesis: There is a differences between Mean score
of the overall satisfaction on various LIC services of Urban respondents
and rural respondents.
The result of test statistics shows the F value .004, the p value of
..947 indicates that the null hypothesis of equal variances for the two
groups cannot be rejected at the customary significance level of .05. The
p value implies that the odds are 2 to 3 that a difference of magnitude
.155 (2.37-2.21) could be occurred from chance. At the α = 0.05 level of
significance, there is no significant relationship that the mean satisfaction
score of urban respondents and rural respondents are the same for the
two types.
155
CHAPTER – V
ANALYSIS AND INTERPRETATION OF DATA – II
In this chapter, an attempt has been to identify the factors that
influence the policy holders’ preference for LIC products by the policy
holders in the study area. for this purpose systematic random sampling
method was employed to collect first hand information from 500 sample
respondents. The respondents have been chosen randomly from the
different parts of the study area. The data thus collected were arranged
into simple tabular form. the level of satisfaction perceived by the
selected sample respondents in their policy holders’ preference is
considered as the dependent variable, the independent variable selected
for the study are gender, age, marital status, type of family, occupation,
educational qualification, income of the family, residential area and
overall ratings.
The data were analyzed by using simple statistical tools,
descriptive statistics like ANOVA, multiple regression analysis and
reliability analysis.
156
TABLE NO - 5.1
One-Way ANOVA –Overall Rating of LIC by Respondents’ Age
(Dependent variable: Rating LIC, Factor: Occupation)
This procedure performs a one-way analysis of variance for overall
Rating of LIC. It constructs various tests and graphs to compare the
mean values of Overall Rating of LIC by Respondents’ Age for the 5
different levels of Age. The F-test in the ANOVA table will test whether
there are any significant differences amongst the means. The Multiple
Range Tests will show that which means are significantly different from
which others.
ANOVA Table for Overall Rating of LIC by Respondent Age
Source Sum of Squares D.f Mean Square F-Ratio P-Value
Between groups 36.0957 4 9.02392 4.74 0.0009
Within groups 942.726 495 1.9045
Total (Corr.) 978.822 499
Above 55 yearsBelow 25 yearsBetween 25 - 35 yearsBetween 35 - 45 yearsBetween 45 - 55 yearsoriginal data.Age
Analysis of Means Plot for B_original data.RatingLICWith 95% Decision Limits
1.5
1.8
2.1
2.4
2.7
3
Mea
n
UDL=2.75CL=2.43LDL=2.12
157
The ANOVA table decomposes the variance of Overall Rating of
LIC by Respondents’ Age into two components: between-group
component and within-group component. The F-ratio, which in this case
equals 4.73821, is a ratio of the between-group estimate to the within-
group estimate. Since the P-value of the F-test is less than 0.05, there is a
statistically significant difference between the mean Overall Rating of
LIC from one level of by Respondent Age to another at the 95.0%
confidence level.
Multiple Range Tests for Overall Rating of LIC by Respondents’ Age
Method: 95.0 percent LSD
Level of Age Count Mean Homogeneous
Groups
Between 45 - 55 years 42 1.59524 X
Between 35 - 45 years 91 2.38462 X
Between 25 - 35 years 222 2.48649 X
Below 25 years 108 2.60185 X
Above 55 years 37 2.7027 X
158
Contrast Sig. Difference +/- Limits
Above 55 years - Below 25 years 0.100851 0.516504
Above 55 years - Between 25 - 35 years 0.216216 0.481476
Above 55 years - Between 35 - 45 years 0.318087 0.528671
Above 55 years - Between 45 - 55 years * 1.10746 0.611351
Below 25 years - Between 25 - 35 years 0.115365 0.318105
Below 25 years - Between 35 - 45 years 0.217236 0.38583
Below 25 years - Between 45 - 55 years * 1.00661 0.493073
Between 25 - 35 years - Between 35 - 45 years 0.101871 0.337503
Between 25 - 35 years - Between 45 - 55 years * 0.891248 0.45625
Between 35 - 45 years - Between 45 - 55 years * 0.789377 0.505805
* denotes a statistically significant difference.
The table no: 5.1 apply a multiple comparison procedure to
determine which means are significantly different from others. The
bottom half of the output shows the estimated difference between each
pair of means. An asterisk has been placed next to 4 pairs, indicating that
these pairs show statistically significant differences at the 95.0%
confidence level. The second table indicates that 2 homogenous groups
are identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
159
TABLE NO – 5.2
One-Way ANOVA –Overall Rating of LIC by Respondents’
Occupation
(Dependent variable: Rating LIC, Factor: Occupation)
This procedure performs a one-way analysis of variance for Rating
of LIC. It constructs various tests and graphs to compare the mean values
of Overall Rating of LIC for the 5 different levels of Respondents’
Occupation. The F-test in the ANOVA table will test whether there are
any significant differences amongst the means.
ANOVA Table for Overall Rating of LIC by Respondent Occupation
Source Sum of Squares Df Mean Square F-Ratio P-Value
Between groups 55.6428 4 13.9107 7.46 0.0000
Within groups 923.179 495 1.86501
Total (Corr.) 978.822 499
BusinessGovernment employeeOthersPrivate EmployeeProesssionalsoriginal data.Occupation
Analysis of Means Plot for B_original data.RatingLICWith 95% Decision Limits
1.9
2.1
2.3
2.5
2.7
2.9
Mea
n
UDL=2.75CL=2.43LDL=2.12
160
The ANOVA table decomposes the variance of Overall Rating of
LIC by Respondents’ Occupation into two components: a between-group
component and a within-group component. The F-ratio, which in this
case equals 7.45879, is a ratio of the between-group estimate to the
within-group estimate. Since the P-value of the F-test is less than 0.05,
there is a statistically significant difference between the mean Overall
Rating of LIC from one level of by Respondents’ Occupation to another
at the 95.0% confidence level.
Multiple Range Tests for Overall Rating of LIC by Respondents’
Occupation Method: 95.0 percent LSD
Level of Occupation Count Mean Homogeneous Groups
Others 90 1.92222 X
Government employee 55 1.96364 X
Professionals 116 2.49138 X
Business 191 2.66492 X
Private Employee 48 2.875 X
Contrast Sig. Difference +/- Limits
Business - Government employee * 0.701285 0.410603
Business - Others * 0.742699 0.343058
Business - Private Employee -0.210079 0.433226
Business - Professionals 0.173542 0.315846
Government employee - Others 0.0414141 0.459234
Government employee - Private Employee * -0.911364 0.529992
Government employee - Professionals * -0.527743 0.439279
Others - Private Employee * -0.952778 0.479568
Others - Professionals * -0.569157 0.376908
Private Employee - Professionals 0.383621 0.460495
* denotes a statistically significant difference.
161
The table no 5.2 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. An asterisk has been placed next to 6 pairs,
indicating that these pairs show statistically significant differences at the
95.0% confidence level. At the top of the page, 2 homogenous groups are
identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
162
TABLE NO – 5.3
ONE-WAY ANOVA –OVERALL RATING OF LIC BY
RESPONDENTS’ QUALIFICATIONS
(Dependent variable: Rating LIC Factor : Qualification)
This procedure performs a one-way analysis of variance for
Overall Rating of LIC by Respondents’ Qualifications. It constructs
various tests and graphs to compare the mean values of Overall Rating of
LIC for the 6 different levels of Respondents Qualifications. The F-test
in the ANOVA table will test whether there are any significant
differences amongst the means. If there are, the Multiple Range Tests
will tell you which means are significantly different from which others.
ANOVA Table for Overall Rating of LIC by Respondent
Qualification
Source Sum of Squares Df Mean Square F-Ratio P-Value
Between groups 30.8676 5 6.17352 3.22 0.0072
Within groups 947.954 494 1.91894
Total (Corr.) 978.822 499
GraduateHigher SecondaryPost GraduatePrimary levelProfessional Technicaloriginal data.Qualification
Analysis of Means Plot for B_original data.RatingLICWith 95% Decision Limits
1.2
1.7
2.2
2.7
3.2
3.7
Mea
n
UDL=2.80CL=2.43LDL=2.07
163
The ANOVA table decomposes the variance of overall satisfaction
rating of LIC by respondents qualifications into two components: a
between-group component and a within-group component. The F-ratio,
which in this case equals 3.21716, is a ratio of the between-group
estimate to the within-group estimate. Since the P-value of the F-test is
less than 0.05, there is a statistically significant difference between the
mean overall satisfaction rating of LIC from one level of by respondent
qualification to another at the 95.0% confidence level.
164
Multiple Range Tests for overall Rating of LIC by Respondents’
Qualifications Method: 95.0 percent LSD
Level Count Mean Homogeneous
Groups
Post Graduate 8 1.375 X
Graduate 41 2.09756 XX
Primary level 167 2.26347 XX
Professional 30 2.3 XXX
Higher Secondary 225 2.64444 X
Technical 29 2.68966 XX
Contrast Sig. Difference +/- Limits
Graduate - Higher Secondary * -0.546883 0.46217
Graduate - Post Graduate 0.722561 1.05198
Graduate - Primary level -0.165912 0.47438
Graduate - Professional -0.202439 0.653915
Graduate - Technical -0.592094 0.660393
Higher Secondary - Post Graduate * 1.26944 0.979233
Higher Secondary - Primary level * 0.380971 0.277996
Higher Secondary - Professional 0.344444 0.529009
Higher Secondary - Technical -0.0452107 0.536996
Post Graduate - Primary level -0.888473 0.985055
Post Graduate - Professional -0.925 1.08301
Post Graduate - Technical * -1.31466 1.08693
Primary level - Professional -0.0365269 0.539708
Primary level - Technical -0.426182 0.547539
Professional - Technical -0.389655 0.708779
* denotes a statistically significant difference.
165
The table no 5.3 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. An asterisk has been placed next to 4 pairs,
indicating that these pairs show statistically significant differences at the
95.0% confidence level. At the top of the page, 3 homogenous groups are
identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
166
TABLE NO 5.4
ONE-WAY ANOVA – OVERALL RATING OF LIC BY PREMIUM
PAID
Dependent variable: B_original data. Rating LIC Factor: original data.
premium
This procedure performs a one-way analysis of variance for
Overall Rating of LIC by premium paid. It constructs various tests and
graphs to compare the mean values of Overall Rating of LIC for the 6
different levels of by premium paid. The F-test in the ANOVA table will
test whether there are any significant differences amongst the means.
ANOVA Table for Overall Rating of LIC by premium paid
Source Sum of Squares Df Mean
Square F-Ratio P-Value
Between groups 2.61584 5 0.523168 0.26 0.9322
Within groups 976.206 494 1.97613
Total (Corr.) 978.822 499
10 001 to 20 00020 001 to 30 00030 001 to 50 00050 001 and above5000 to 10 000Below 5000original data.premiun
Analysis of Means Plot for B_original data.RatingLICWith 95% Decision Limits
1.9
2.1
2.3
2.5
2.7
2.9
3.1
Mea
n
UDL=2.80CL=2.43LDL=2.07
167
The ANOVA table decomposes the variance of Overall Rating of
LIC by premium paid into two components: a between-group component
and a within-group component. The F-ratio, which in this case equals
0.264744, is a ratio of the between-group estimate to the within-group
estimate. Since the P-value of the F-test is greater than or equal to 0.05,
there is not a statistically significant difference between the mean overall
satisfaction rating of LIC performance from one level of original data.
premium to another at the 95.0% confidence level.
168
Multiple Range Tests for Overall satisfaction rate of LIC by amount
of premium paid by the respondent Method: 95.0 percent LSD
Level of Premium Paid Count Mean Homogeneo
us Groups
10 001 to 20 000 80 2.3625 X
20 001 to 30 000 50 2.4 X
5000 to 10 000 145 2.4069 X
30 001 to 50 000 90 2.42222 X
Below 5000 75 2.45333 X
50 001 and above 60 2.61667 X
Contrast Sig. Difference +/- Limits
10 001 to 20 000 - 20 001 to 30 000 -0.0375 0.497924
10 001 to 20 000 - 30 001 to 50 000 -0.0597222 0.424404
10 001 to 20 000 - 50 001 and above -0.254167 0.471699
10 001 to 20 000 - 5000 to 10 000 -0.0443966 0.384666
10 001 to 20 000 - Below 5000 -0.0908333 0.443927
20 001 to 30 000 - 30 001 to 50 000 -0.0222222 0.487169
20 001 to 30 000 - 50 001 and above -0.216667 0.52888
20 001 to 30 000 - 5000 to 10 000 -0.00689655 0.45297
20 001 to 30 000 - Below 5000 -0.0533333 0.504267
30 001 to 50 000 - 50 001 and above -0.194444 0.460331
30 001 to 50 000 - 5000 to 10 000 0.0153257 0.370638
30 001 to 50 000 - Below 5000 -0.0311111 0.431829
50 001 and above - 5000 to 10 000 0.20977 0.423974
50 001 and above - Below 5000 0.163333 0.47839
5000 to 10 000 - Below 5000 -0.0464368 0.392842
* denotes a statistically significant difference.
169
The table no 5.4 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. There are no statistically significant differences
between any pair of means at the 95.0% confidence level. At the top of
the page, one homogenous group is identified by a column of X's. Within
each column, the levels containing X's form a group of means within
which there are no statistically significant differences. The method
currently being used to discriminate among the means is Fisher's least
significant difference (LSD) procedure. With this method, there is a
5.0% risk of calling each pair of means significantly different when the
actual difference equals 0.
170
TABLE NO – 5.5
ONE-WAY ANOVA – OVERALL SATISFACTION RATING OF
LIC POLICY BY RESPONDENTS’ AGE
(Dependent variable: Rating of LIC Policy, Factor: Age)
This procedure performs a one-way analysis of variance for
Overall satisfaction Rating of LIC Policy by Respondents’ Age. It
constructs various tests and graphs to compare the mean values of Overall
satisfaction Rating of LIC Policy for the 5 different levels of Respondent
Age. The F-test in the ANOVA table will test whether there are any
significant differences amongst the means.
ANOVA Table for Overall Rating of LIC Policy by Respondents’
Age
Source Sum of Squares Df Mean Square F-Ratio P-Value
Between groups 28.6916 4 7.17291 4.23 0.0022
Within groups 838.62 495 1.69418
Total (Corr.) 867.312 499
Above 55 yearsBelow 25 yearsBetween 25 - 35 yearsBetween 35 - 45 yearsBetween 45 - 55 yearsoriginal data.Age
Analysis of Means Plot for B_original data.RatingPWith 95% Decision Limits
2.1
2.3
2.5
2.7
2.9
3.1
3.3
Mea
n
UDL=2.92CL=2.62LDL=2.33
171
The ANOVA table decomposes the variance of Overall satisfaction
Rating of LIC Policy by Respondents’ Age into two components: a
between-group component and a within-group component. The F-ratio,
which in this case equals 4.23385, is a ratio of the between-group
estimate to the within-group estimate. Since the P-value of the F-test is
less than 0.05, there is a statistically significant difference between the
mean Overall satisfaction Rating of LIC Policy from one level of
Respondents’ Age to another at the 95.0% confidence level.
172
Multiple Range Tests for Overall satisfaction Rating of LIC Policy by
respondents’ Age Method: 95.0 percent LSD
Level Age of the Respondent Count Mean Homogeneo
us Groups
Between 35 - 45 years 91 2.32967 X
Above 55 years 37 2.43243 X
Below 25 years 108 2.4537 X
Between 45 - 55 years 42 2.47619 XX
Between 25 - 35 years 222 2.88739 X
Contrast Sig. Difference +/- Limits
Above 55 years - Below 25 years -0.0212713 0.487151
Above 55 years - Between 25 - 35 years * -0.454955 0.454114
Above 55 years - Between 35 - 45 years 0.102762 0.498627
Above 55 years - Between 45 - 55 years -0.043758 0.576607
Below 25 years - Between 25 - 35 years * -0.433684 0.300027
Below 25 years - Between 35 - 45 years 0.124033 0.363903
Below 25 years - Between 45 - 55 years -0.0224868 0.465052
Between 25 - 35 years - Between 35 - 45 years * 0.557717 0.318322
Between 25 - 35 years - Between 45 - 55 years 0.411197 0.430321
Between 35 - 45 years - Between 45 - 55 years -0.14652 0.47706
* denotes a statistically significant difference.
173
The table no 5.5 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. An asterisk has been placed next to 3 pairs,
indicating that these pairs show statistically significant differences at the
95.0% confidence level. At the top of the page, 2 homogenous groups are
identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
174
TABLE NO 5.6
ONE-WAY ANOVA - OVERALL RATING OF LIC POLICY BY
OCCUPATION
Dependent variable: Overall Rating of LIC Policy Factor: original data.
Occupation
This procedure performs a one-way analysis of variance for
Overall satisfaction rating of LIC Policy. It constructs various tests and
graphs to compare the mean values of Overall satisfaction rating of LIC
policy for the 5 different levels of Respondent Occupation. The F-test in
the ANOVA table will test whether there are any significant differences
amongst the means.
ANOVA Table for Overall satisfaction rating of LIC policy by
Respondents’ Occupation
Source Sum of Squares Df Mean Square F-Ratio P-Value
Between groups 17.6075 4 4.40187 2.56 0.0376
Within groups 849.705 495 1.71657
Total (Corr.) 867.312 499
BusinessGovernment employeeOthersPrivate EmployeeProesssionalsoriginal data.Occupation
Analysis of Means Plot for B_original data.RatingPWith 95% Decision Limits
2.1
2.3
2.5
2.7
2.9
3.1
Mea
n
UDL=2.92CL=2.62LDL=2.32
175
The ANOVA table exposes the variance of overall satisfaction
rating of LIC Policy into two components: a between-group component
and a within-group component. The F-ratio, which in this case equals
2.56433, is a ratio of the between-group estimate to the within-group
estimate. Since the P-value of the F-test is less than 0.05, there is a
statistically significant difference between the mean overall satisfaction
rating of LIC Policy from one level of Respondents’ Occupation to
another at the 95.0% confidence level. To determine which means are
significantly different from which others, select Multiple Range Tests
from the list of Tabular Options.
176
Multiple Range Tests for overall satisfaction rating of LIC Policy by
Respondents’ Occupation Method: 95.0 percent LSD
Level of Respondent Occupation Count Mean Homogene
ous Groups
Government employee 55 2.2 X
Private Employee 48 2.33333 XX
Business 191 2.70681 X
Processionals 116 2.7069 X
Others 90 2.75556 X
Contrast Sig. Difference +/- Limits
Business - Government employee * 0.506806 0.393925
Business - Others -0.0487493 0.329123
Business - Private Employee 0.373473 0.415628
Business - Professionals -0.000090269 0.303017
Government employee - Others * -0.555556 0.44058
Government employee - Private Employee -0.133333 0.508464
Government employee - Professionals * -0.506897 0.421436
Others - Private Employee 0.422222 0.460088
Others - Professionals 0.048659 0.361599
Private Employee - Professionals -0.373563 0.44179
* denotes a statistically significant difference.
177
The table no 5.6 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. An asterisk has been placed next to 3 pairs,
indicating that these pairs show statistically significant differences at the
95.0% confidence level. At the top of the page, 2 homogenous groups are
identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
178
TABLE NO - 5.7
ONE-WAY ANOVA OVERALL RATING OF LIC POLICY BY
RESPONDENTS’ QUALIFICATIONS
Dependent variable: B_original data. Rating P Factor: original data.
Qualification
This procedure performs a one-way analysis of variance for
Overall satisfaction Rating of LIC Policy by Respondents’
qualifications’. It constructs various tests and graphs to compare the
mean values of Overall satisfaction Rating of LIC Policy for the 6
different levels of original respondents’ Qualifications. The F-test in the
ANOVA table will test whether there are any significant differences
amongst the means
ANOVA Table for Overall Rating of LIC Policy by respondents’
Qualifications
Source Sum of
Squares Df
Mean
Square F-Ratio P-Value
Between groups 16.8527 5 3.37054 1.96 0.0835
Within groups 850.459 494 1.72158
Total (Corr.) 867.312 499
GraduateHigher SecondaryPost GraduatePrimary levelProfessionalTechnicaloriginal data.Qualification
Analysis of Means Plot for B_original data.RatingPWith 95% Decision Limits
1.5
1.9
2.3
2.7
3.1
3.5
3.9
Mea
n
UDL=2.97CL=2.62LDL=2.28
179
The ANOVA table decomposes the variance of Overall Rating of
LIC Policy into two components: a between-group component and a
within-group component. The F-ratio, which in this case equals 1.95782,
is a ratio of the between-group estimate to the within-group estimate.
Since the P-value of the F-test is greater than or equal to 0.05, there is not
a statistically significant difference between the mean B_original data.
Rating P from one level of Respondents’ Qualifications to another at the
95.0% confidence level.
180
Multiple Range Tests for Overall Rating of LIC Policy by
respondents’ Qualification Method: 95.0 percent LSD
Level Count Mean Homogeneous
Groups
Professional 30 2.26667 X
Higher Secondary 225 2.56889 X
Primary level 167 2.61677 X
Technical 29 2.62069 XX
Graduate 41 3.09756 X
Post Graduate 8 3.25 XX
Contrast Sig. Difference +/- Limits
Graduate - Higher Secondary * 0.528672 0.437759
Graduate - Post Graduate -0.152439 0.996411
Graduate - Primary level * 0.480795 0.449323
Graduate - Professional * 0.830894 0.619376
Graduate - Technical 0.476871 0.625512
Higher Secondary - Post Graduate -0.681111 0.927511
Higher Secondary - Primary level -0.0478776 0.263312
Higher Secondary - Professional 0.302222 0.501067
Higher Secondary - Technical -0.0518008 0.508633
Post Graduate - Primary level 0.633234 0.933025
Post Graduate - Professional 0.983333 1.0258
Post Graduate - Technical 0.62931 1.02952
Primary level - Professional 0.3501 0.511201
Primary level - Technical -0.00392319 0.518619
Professional - Technical -0.354023 0.671342
* denotes a statistically significant difference.
181
The table no 5.7 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. An asterisk has been placed next to 3 pairs,
indicating that these pairs show statistically significant differences at the
95.0% confidence level. At the top of the page, 2 homogenous groups are
identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
182
TABLE NO 5.8
ONE-WAY ANOVA – OVERALL RATING OF LIC POLICY BY
AMOUNT OF .PREMIUM PAID
Dependent variable: Overall Rating of LIC policy, Factor: Amount of
premium
This procedure performs a one-way analysis of variance for
Overall Rating of LIC Policy by amount of premium paid. It constructs
various tests and graphs to compare the mean values of overall
satisfaction rating of LIC policy for the 6 different levels of amount of
premium paid. The F-test in the ANOVA table will test whether there are
any significant differences amongst the means.
ANOVA Table forOverall Rating of LIC Policy by amount of
.premium paid
Source Sum of
Squares Df
Mean
Square F-Ratio P-Value
Between groups 4.73012 5 0.946025 0.54 0.7446
Within groups 862.582 494 1.74612
Total (Corr.) 867.312 499
10 001 to 20 00020 001 to 30 00030 001 to 50 00050 001 and above5000 to 10 000Below 5000original data.premiun
Analysis of Means Plot for B_original data.RatingPWith 95% Decision Limits
2.1
2.3
2.5
2.7
2.9
3.1
Mea
n
UDL=2.97CL=2.62LDL=2.28
183
The ANOVA table decomposes the variance of Overall Rating of
LIC Policy by amount of .premium paid into two components: a between-
group component and a within-group component. The F-ratio, which in
this case equals 0.541788, is a ratio of the between-group estimate to the
within-group estimate. Since the P-value of the F-test is greater than or
equal to 0.05, there is not a statistically significant difference between the
mean Overall Rating of LIC Policy by amount of .premium paidfrom one
level of amount of premium to another at the 95.0% confidence level.
184
Multiple Range Tests for Overall Rating of LIC Policy by amount of
premium paid Method: 95.0 percent LSD
Level Count Mean Homogeneous
Groups Below 5000 75 2.53333 X
20 001 to 30 000 50 2.54 X
50 001 and above 60 2.55 X
30 001 to 50 000 90 2.57778 X
10 001 to 20 000 80 2.6 X
5000 to 10 000 145 2.77241 X
Contrast Sig. Difference +/- Limits
10 001 to 20 000 - 20 001 to 30 000 NS 0.06 0.46805
10 001 to 20 000 - 30 001 to 50 000 NS 0.0222222 0.398941
10 001 to 20 000 - 50 001 and above NS 0.05 0.443399
10 001 to 20 000 - 5000 to 10 000 NS -0.172414 0.361587
10 001 to 20 000 - Below 5000 NS 0.0666667 0.417293
20 001 to 30 000 - 30 001 to 50 000 NS -0.0377778 0.45794
20 001 to 30 000 - 50 001 and above NS -0.01 0.497149
20 001 to 30 000 - 5000 to 10 000 NS -0.232414 0.425794
20 001 to 30 000 - Below 5000 NS 0.00666667 0.474013
30 001 to 50 000 - 50 001 and above NS 0.0277778 0.432713
30 001 to 50 000 - 5000 to 10 000 NS -0.194636 0.348401
30 001 to 50 000 - Below 5000 NS 0.0444444 0.405921
50 001 and above - 5000 to 10 000 NS -0.222414 0.398537
50 001 and above - Below 5000 NS 0.0166667 0.449688
5000 to 10 000 - Below 5000 NS 0.23908 0.369273
The table no 5.8 applies a multiple comparison procedure to
determine which means are significantly different from which others.
185
The bottom half of the output shows the estimated difference between
each pair of means. There are no statistically significant differences
between any pair of means at the 95.0% confidence level. At the top of
the page, one homogenous group is identified by a column of X's. Within
each column, the levels containing X's form a group of means within
which there are no statistically significant differences. The method
currently being used to discriminate among the means is Fisher's least
significant difference (LSD) procedure. With this method, there is a
5.0% risk of calling each pair of means significantly different when the
actual difference equals 0.
186
TABLE NO – 5.9
ONE-WAY ANOVA – OVERALL RATING OF LIC SERVICES BY
RESPONDENTS’ AGE
Dependent variable Overall satisfaction Rating of LIC Services Factor:
Respondent Age
This procedure performs a one-way analysis of variance for
Overall satisfaction Rating of LIC Services by Respondent Age. It
constructs various tests and graphs to compare the mean values of Overall
satisfaction Rating of LIC Services for the 5 different levels of original
data of Age. The F-test in the ANOVA table will test whether there are
any significant differences amongst the means.
ANOVA Table for Overall Rating of LIC Services by Respondents’
Age
Source Sum of Squares Df Mean Square F-Ratio P-Value
Between groups 2.53093 4 0.632733 0.73 0.5725
Within groups 429.669 495 0.868018
Total (Corr.) 432.2 499
Above 55 yearsBelow 25 yearsBetween 25 - 35 yearsBetween 35 - 45 yearsBetween 45 - 55 yearsoriginal data.Age
Analysis of Means Plot for B_original data.RatingSWith 95% Decision Limits
1.9
2.1
2.3
2.5
2.7
Mea
n
UDL=2.55CL=2.34LDL=2.13
187
The ANOVA table decomposes the variance of Overall Rating of
LIC Services by Respondent Ageinto two components: a between-group
component and a within-group component. The F-ratio, which in this
case equals 0.72894, is a ratio of the between-group estimate to the
within-group estimate. Since the P-value of the F-test is greater than or
equal to 0.05, there is not a statistically significant difference between the
mean B_ original data. Ratings from one level of original data. Age to
another at the 95.0% confidence level.
188
Multiple Range Tests for Overall Rating of LIC Services by
Respondents Age
Method: 95.0 per cent LSD
Level of Respondent Age Count Mean Homogeneo
us Groups
Between 35 - 45 years 91 2.21978 X
Above 55 years 37 2.2973 X
Below 25 years 108 2.30556 X
Between 45 - 55 years 42 2.38095 X
Between 25 - 35 years 222 2.40541 X
Contrast Sig. Difference +/- Limits
Above 55 years - Below 25 years NS -0.00825826 0.348697
Above 55 years - Between 25 - 35 years NS -0.108108 0.325049
Above 55 years - Between 35 - 45 years NS 0.0775171 0.356911
Above 55 years - Between 45 - 55 years NS -0.0836551 0.412729
Below 25 years - Between 25 - 35 years NS -0.0998498 0.214756
Below 25 years - Between 35 - 45 years NS 0.0857753 0.260478
Below 25 years - Between 45 - 55 years NS -0.0753968 0.332878
Between 25 - 35 years - Between 35 - 45 years NS 0.185625 0.227851
Between 25 - 35 years - Between 45 - 55 years NS 0.024453 0.308019
Between 35 - 45 years - Between 45 - 55 years NS -0.161172 0.341474
189
The table no 5.9 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. There are no statistically significant differences
between any pair of means at the 95.0% confidence level. At the top of
the page, one homogenous group is identified by a column of X's. Within
each column, the levels containing X's form a group of means within
which there are no statistically significant differences. The method
currently being used to discriminate among the means is Fisher's least
significant difference (LSD) procedure. With this method, there is a
5.0% risk of calling each pair of means significantly different when the
actual difference equals 0.
190
TABLE NO 5.10
ONE-WAY ANOVA OVERALL RATING OF LIC SERVICES
RESPONDENTS’ OCCUPATION
Dependent variable: Overall Rating of LIC Services Factor: Respondent
Occupation
This procedure performs a one-way analysis of variance for
Overall Rating of LIC Services by Respondents’ Occupation. It
constructs various tests and graphs to compare the mean values of Overall
Rating of LIC Services by Respondents’ Occupation for the 5 different
levels of original data of Occupation. The F-test in the ANOVA table
will test whether there are any significant differences amongst the means.
ANOVA Table for Overall Rating of LIC Services Respondents’
Occupation
Source Sum of Squares Df Mean Square F-Ratio P-Value
Between groups 4.60649 4 1.15162 1.33 0.2565
Within groups 427.594 495 0.863825
Total (Corr.) 432.2 499
BusinessGovernment employeeOthersPrivate EmployeeProesssionalsoriginal data.Occupation
Analysis of Means Plot for B_original data.RatingSWith 95% Decision Limits
2
2.2
2.4
2.6
2.8
Mea
n
UDL=2.55CL=2.34LDL=2.13
191
The ANOVA table decomposes the variance of Overall Rating of
LIC Services by Respondent Occupation into two components: a
between-group component and a within-group component. The F-ratio,
which in this case equals 1.33317, is a ratio of the between-group
estimate to the within-group estimate. Since the P-value of the F-test is
greater than or equal to 0.05, there is not a statistically significant
difference between the mean B_ original data. Ratings from one level of
original data. Occupation to another at the 95.0% confidence level.
192
Multiple Range Tests for Overall Rating of LIC Services by
Respondents’ Occupation. Method: 95.0 percent LSD
Level Count Mean Homogeneo
us Groups
Business 191 2.25654 X
Private Employee 48 2.27083 XX
Government employee 55 2.34545 XX
Professionals 116 2.36207 XX
Others 90 2.52222 X
Contrast Sig. Difference +/- Limits
Business - Government employee -0.08891 0.279444
Business - Others * -0.265678 0.233475
Business - Private Employee -0.0142888 0.29484
Business - Professionals -0.105524 0.214956
Government employee - Others -0.176768 0.312541
Government employee - Private
Employee 0.0746212 0.360696
Government employee - Professionals -0.0166144 0.29896
Others - Private Employee 0.251389 0.326379
Others - Professionals 0.160153 0.256512
Private Employee - Professionals -0.0912356 0.313399
* denotes a statistically significant difference.
193
The table no 5.10 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. An asterisk has been placed next to 1 pair, indicating
that this pair shows a statistically significant difference at the 95.0%
confidence level. At the top of the page, 2 homogenous groups are
identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
194
TABLE NO – 5.11
ONE-WAY ANOVA - OVERALL RATING OF LIC SERVICES BY
RESPONDENTS’ QUALIFICATION
Dependent variable: Overall Rating of LIC Services, Factor:
Respondents’ Qualification
This procedure performs a one-way analysis of variance for
Overall Rating of LIC Services by Qualifications. It constructs various
tests and graphs to compare the mean values of Overall Rating of LIC
Services by Qualification for the 6 different levels of Qualifications. The
F-test in the ANOVA table will test whether there are any significant
differences amongst the means
ANOVA Table for Overall Rating of LIC Services by Respondent
Qualification
Source Sum of
Squares Df
Mean
Square F-Ratio P-Value
Between groups 1.77072 5 0.354144 0.41 0.8444
Within groups 430.429 494 0.871314
Total (Corr.) 432.2 499
GraduateHigher SecondaryPost GraduatePrimary levelProfessionalTechnicaloriginal data.Qualification
Analysis of Means Plot for B_original data.RatingSWith 95% Decision Limits
1.5
1.8
2.1
2.4
2.7
3
3.3
Mea
n
UDL=2.58CL=2.34LDL=2.10
195
The ANOVA table exposes the variance of Overall Rating of LIC
Services by Respondent Qualification into two components: a between-
group component and a within-group component. The F-ratio, which in
this case equals 0.406448, is a ratio of the between-group estimate to the
within-group estimate. Since the P-value of the F-test is greater than or
equal to 0.05, there is not a statistically significant difference between the
mean Overall Rating of LIC Services from one level of by Respondents’
Qualification to another at the 95.0% confidence level.
196
Multiple Range Tests for Overall Rating of LIC Services by original
data. Qualification Method: 95.0 percent LSD
Level Count Mean Homogeneous
Groups Higher Secondary 225 2.29333 X
Graduate 41 2.34146 X
Primary level 167 2.35329 X
Professional 30 2.43333 X
Technical 29 2.44828 X
Post Graduate 8 2.625 X
Contrast Sig. Difference +/- Limits
Graduate - Higher Secondary 0.0481301 0.311429
Graduate - Post Graduate -0.283537 0.708864
Graduate - Primary level -0.01183 0.319656
Graduate - Professional -0.0918699 0.440634
Graduate - Technical -0.106812 0.445
Higher Secondary - Post Graduate -0.331667 0.659847
Higher Secondary - Primary level -0.0599601 0.187325
Higher Secondary - Professional -0.14 0.356467
Higher Secondary - Technical -0.154943 0.36185
Post Graduate - Primary level 0.271707 0.66377
Post Graduate - Professional 0.191667 0.729773
Post Graduate - Technical 0.176724 0.732417
Primary level - Professional -0.0800399 0.363677
Primary level - Technical -0.0949824 0.368954
Professional - Technical -0.0149425 0.477604
197
The table no 5.11 applies a multiple comparison procedure to
determine which means are significantly different from which others.
The bottom half of the output shows the estimated difference between
each pair of means. There are no statistically significant differences
between any pair of means at the 95.0% confidence level. At the top of
the page, one homogenous group is identified by a column of X's. Within
each column, the levels containing X's form a group of means within
which there are no statistically significant differences. The method
currently being used to discriminate among the means is Fisher's least
significant difference (LSD) procedure. With this method, there is a
5.0% risk of calling each pair of means significantly different when the
actual difference equals 0.
198
TABLE NO – 5.12
ONE-WAY ANOVA - OVERALL RATING OF LIC
SERVICES BY AMOUNT OF PREMIUM PAID
Dependent variable: Overall Rating of LIC Services
Factor: amount of premium paid
This procedure performs a one-way analysis of variance for
Overall Rating of LIC Services by amount of premium paid. It constructs
various tests and graphs to compare the mean values of Overall Rating of
LIC Services by amount of premium paid for the 6 different levels of
amount of premium paid per annum. The F-test in the ANOVA table will
test whether there are any significant differences amongst the means.
ANOVA Table for Overall Rating of LIC Servicesby
amount of premium paid
Source Sum of Squares Df Mean Square F-Ratio P-Value
Between
groups 4.71062 5 0.942125 1.09 0.3657
Within groups 427.489 494 0.865363
Total (Corr.) 432.2 499
10 001 to 20 00020 001 to 30 00030 001 to 50 00050 001 and above5000 to 10 000Below 5000original data.premiun
Analysis of Means Plot for B_original data.RatingSWith 95% Decision Limits
2
2.2
2.4
2.6
2.8
Mea
n
UDL=2.58CL=2.34LDL=2.10
199
The ANOVA table exposes the variance of Overall Rating of LIC
Services by amount of premium paid into two components: a between-
group component and a within-group component. The F-ratio, which in
this case equals 1.0887, is a ratio of the between-group estimate to the
within-group estimate. Since the P-value of the F-test is greater than or
equal to 0.05, there is not a statistically significant difference between the
mean Overall Rating of LIC Services by amount of premium paid from
one level of original data. Premium to another at the 95.0% confidence
level.
200
Multiple Range Tests for Overall Rating of LIC Services by amount
of premium paid Method: 95.0 percent LSD
Level Count Mean Homogeneo
us Groups
10 001 to 20 000 80 2.2125 X
30 001 to 50 000 90 2.24444 XX
20 001 to 30 000 50 2.34 XX
50 001 and above 60 2.35 XX
5000 to 10 000 145 2.37241 XX
Below 5000 75 2.52 X
Contrast Sig. Difference +/- Limits
10 001 to 20 000 - 20 001 to 30 000 -0.1275 0.3295
10 001 to 20 000 - 30 001 to 50 000 -0.0319444 0.280848
10 001 to 20 000 - 50 001 and above -0.1375 0.312145
10 001 to 20 000 - 5000 to 10 000s -0.159914 0.254552
10 001 to 20 000 - Below 5000 * -0.3075 0.293767
20 001 to 30 000 - 30 001 to 50 000 0.0955556 0.322382
20 001 to 30 000 - 50 001 and above -0.01 0.349985
20 001 to 30 000 - 5000 to 10 000 -0.0324138 0.299752
20 001 to 30 000 - Below 5000 -0.18 0.333697
30 001 to 50 000 - 50 001 and above -0.105556 0.304623
30 001 to 50 000 - 5000 to 10 000 -0.127969 0.245269
30 001 to 50 000 - Below 5000 -0.275556 0.285761
50 001 and above - 5000 to 10 000 -0.0224138 0.280563
50 001 and above - Below 5000 -0.17 0.316573
5000 to 10 000 - Below 5000 -0.147586 0.259962
* denotes a statistically significant difference.
201
The table no 5.12 applies a multiple comparison procedure to
determine which means are significantly different from others. The
bottom half of the output shows the estimated difference between each
pair of means. An asterisk has been placed next to 1 pair, indicating that
this pair shows a statistically significant difference at the 95.0%
confidence level. At the top of the page, 2 homogenous groups are
identified using columns of X's. Within each column, the levels
containing X's form a group of means within which there are no
statistically significant differences. The method currently being used to
discriminate among the means is Fisher's least significant difference
(LSD) procedure. With this method, there is a 5.0% risk of calling each
pair of means significantly different when the actual difference equals 0.
202
TABLE NO – 5.13
MULTIPLE REGRESSIONS ON OVERALL SATISFACTION
RATING OF THE VARIOUS LIC PRODUCTS OFFERED BY
PRODUCT VARIABLES
Result of Multiple Regression - Model Summaryb
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .366a .134 .116 1.239
Predictors: (Constant), LIC Polices give positive image, High rate of
return, Suitable for the needs, Convenient method to pay premium,
Acceptable penalty charges, Financial security for the family, Policies are
superior to others, Fullest satisfaction of the requirement, one knows all
the features of the policy, Gives one confidence about one’s future
Dependent Variable: Overall Satisfaction rating of the Various LIC
Product offered
ANOVAa
Model Sum of
Squares df
Mean
Square F Sig.
1
Regression 116.262 10 11.626 7.570 .000b
Residual 751.050 489 1.536 - -
Total 867.312 499 - - -
Predictors: (Constant), LIC Polices give positive image, High rate of
return, Suitable for the needs, Convenient method to pay premium,
Acceptable penalty charges, Financial security for one’s family, Policies
203
are superior to other, Fullest satisfaction of one’s requirement, one knows
all the features of the policy, Gives one confidence about one’s future
Dependent Variable: Overall Satisfaction rating of the Various LIC
Product offered.
The ANOVA table, as displayed in table shows F ratio for the
regression model that indicates that the chosen ten product variables
significantly contribute for the dependent Overall Satisfaction rating of
the Various LIC Product offered The variance independent variable that
is associated with dependent variable is referred to as explained variance.
204
Coefficients
Product Variables
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
B Std.
Error Beta
(Constant) 2.276 .212 10.755 .000
Policies are superior to other (P1) .059 .041 .064 1.415 .158
Suitable for my needs (P2) .076 .044 .077 1.741 .082
Financial security for my family (P3) .087 .042 .096 2.096 .037
Fullest satisfaction of my requirement (P4) .067 .056 .059 1.191 .234
I know all the features of the policy (P5) .198 .059 .189 3.385 .001
Gives me confidence about my future (P6) .027 .058 .027 .461 .645
High rate of return (P7) .009 .045 .009 .206 .837
Convenient method to pay premium (P8) .258 .060 .191 4.317 .000
Acceptable penalty charges (P9) -.158 .054 -.164 -2.943 .003
LIC Polices gives positive image (P10) -.509 .078 -.354 -6.524 .000
205
Dependent Variable: Overall Satisfaction rating of the Various LIC
Product offered
The output shows the results of fitting a multiple linear regression
model to describe the relationship between Overall Satisfaction rating of
the Various LIC Product offered and 10 independent variables. The
equation of the fitted model is Overall Satisfaction rating of the Various
LIC Product = 2.27597 + 0.0585407*P1 + 0.0759576*P2 +
0.0871784*P3 + 0.066932*P4 + 0.198373*P5 + 0.0268555*P6 +
0.0091829*P7 + 0.258408*P8 - 0.157586*P9 - 0.508603*P10
Since the P-value in the ANOVA table is less than 0.05, there is a
statistically significant relationship between the variables at the 95.0%
confidence level. The R-Squared statistic indicates that the model as
fitted explains 13.4049% of the variability in Overall Satisfaction rating
of the Various LIC Product. The adjusted R-squared statistic, which is
more suitable for comparing models with different numbers of
independent variables, is 11.634%. The standard error of the estimate
shows the standard deviation of the residuals to be 1.23931. This value
can be used to construct prediction limits for new observations by
selecting the Reports option from the text menu. The mean absolute error
(MAE) of 1.01111 is the average value of the residuals. Since the P-
value is less than 0.05, there is an indication of possible serial correlation
at the 95.0% confidence level. In determining whether the model can be
simplified, notice that the highest P-value on the independent variables is
0.8367, belonging to P7. Since the P-value is greater or equal to 0.05,
that term is not statistically significant at the 95.0% or higher confidence
level. Consequently, you should consider removing C.P7 from the
model. Age group of the respondents, occupational status of the
respondents and their family size were not a significant predictor in this
model.
206
Chart 22
Financial security for one’s family (P3), one knows all the features
of the policy (P5), Convenient method to pay premium (P8), Acceptable
penalty charges (P9) and LIC Polices gives positive image (P10) are
significant predictor of this model. However the variables namely
Policies are superior to other policies (P1), Suitable for one’s needs (P2),
Fullest satisfaction of one’s requirement (P4), Gives one confidence
about one’s future (P6), High rate of return (P7) are not significant
predictor of this model.
207
Chart 23
Path diagram shows the Overall Satisfaction Rating of LIC Product
by its Product Variables
208
TABLE NO – 5.14
MULTIPLE REGRESSION ON OVERALL SATISFACTION
RATING OF THE LIC SERVICES TO CUSTOMERS BY
SERVICES VARIABLES
Model Summaryb
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .393a .155 .137 .864
Predictors: (Constant), Speedy documentation and settlement of claims,
Give truthful advice on investments/tax benefits, Customers feel safe and
secure in their transactions, Sufficient number of LIC branches is
available, Agents/employees competence to answer specific queries,
Problems are solved by the LIC employees as quick as possible, Like to
communicate the LIC services/products to others, Regular intimation
about the due date for premium, Regular intimation about the new
policies and its services, Agents / employees understand the needs of the
customer.
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customer
ANOVAa
Model Sum of
Squares df
Mean
Square F Sig.
1
Regression 66.780 10 6.678 8.936 .000b
Residual 365.420 489 .747
Total 432.200 499
209
Predictors: (Constant), Speedy documentation and settlement of claims,
Give truthful advice on investments/tax benefits, Customers feel safe and
secure in their transactions, Sufficient number of LIC branches are
available, Agents/employees competence to answer specific queries,
Problems are solved by the LIC employees as quick as possible, Like to
communicate the LIC services/products to others, Regular intimation
about the due date for premium, Regular intimation about the new
policies and its services, Agents/employees understand the needs of the
customers.
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customers
The ANOVA table, as displayed in table shows F ratio for the
regression model that indicates that the chosen ten services variables
significantly contribute for the dependent Overall Satisfaction rating of
the Various LIC services offered. The variance independent variable that
is associated with dependent variable is referred to as explained variance.
210
Coefficients
Models
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
B Std. Error Beta
(Constant) 1.274 .195 6.547 .000
Regular intimation about the due date for premium (S1) -.060 .039 -.077 -1.542 .124
Regular intimation about the new policies and its services(S2) -.048 .033 -.073 -1.480 .139
Agents/employees competence to answer specific queries(S3) .220 .040 .252 5.493 .000
Agents/employees understand the needs of the customer(S4) .050 .037 .075 1.359 .175
Give truthful advice on investments/tax benefits(S5) .052 .038 .060 1.373 .170
Sufficient number of LIC branches is available(S6) .179 .045 .183 4.007 .000
Problems are solved by the LIC employees as quick as possible
(S7) .003 .031 .005 .109 .913
Like to communicate the LIC services/products to others(S8) .132 .042 .163 3.154 .002
Customers feel safe and secure in their transactions(S9) .068 .032 .089 2.102 .036
Speedy documentation and settlement of claims(S10) -.058 .035 -.074 -1.663 .097
211
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customer
The output shows the results of fitting a multiple linear regression
model to describe the relationship between Overall Satisfaction rating of
the LIC Services to customer and 10 independent variables. The equation
of the fitted model is Overall Satisfaction rating of the LIC Services to
customer = 1.2735 - 0.0604512*S1 - 0.0482675*S2 + 0.220369*S3 +
0.049829*S4 + 0.0522458*S5 + 0.179291*S6 + 0.00335607*S7 +
0.132492*S8 + 0.0680429*S9 - 0.0578546*S10
Since the P-value in the ANOVA table is less than 0.05, there is a
statistically significant relationship between the variables at the 95.0%
confidence level. The R-Squared statistic indicates that the model as
fitted explains 15.4513% of the variability in Overall Satisfaction rating
of the LIC Services to customers. The adjusted R-squared statistic, which
is more suitable for comparing models with different numbers of
independent variables, is 13.7223%. The standard error of the estimate
shows the standard deviation of the residuals to be 0.864453. This value
can be used to construct prediction limits for new observations by
selecting the Reports option from the text menu. The mean absolute error
(MAE) of 0.665487 is the average value of the residuals. In determining
whether the model can be simplified, notice that the highest P-value on
the independent variables is 0.9131, belonging to S7. Since the P-value is
greater or equal to 0.05, that term is not statistically significant at the
95.0% or higher confidence level. Consequently, it should consider
removing S7 from the model.
212
Chart 24
Agents/employees competence to answer specific queries (S3),
Sufficient number of LIC branches is available(S6), Like to communicate
the LIC services/products to others(S8), Customers feel safe and secure in
their transactions(S9) are significant predictors of overall satisfaction of
LIC services. The following services variables namely Regular intimation
about the due date for premium (S1), Regular intimation about the new
policies and its services (S2), Agents/employees understand the needs of
the customers (S4), Give truthful advice on investments/tax benefits (S5),
Problems are solved by the LIC employees as quick as possible (S7),
Speedy documentation and settlement of claims (S10) are not significant
predictor of this model.
213
Chart 25
Path diagram shows Overall Satisfaction Rating of LIC services by
its services Variables
214
TABLE NO – 5.15
MULTIPLE REGRESSION ON OVERALL SATISFACTION
RATING OF THE LIC FUNCTIONS TO CUSTOMER BY
PRODUCT
Model Summaryb
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .373a .406 .400 .834
Predictors: (Constant), LIC Polices give positive image, Convenient
method to pay premium, Financial security for one’s family, Acceptable
penalty charges, one knows all the features of the policy.
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customer
ANOVAa
Model Sum of
Squares df
Mean
Square F Sig.
1
Regression 398.084 5 79.6167 67.73 .000b
Residual 580.738 494 1.17558
Total 978.822 499
Predictors: (Constant), LIC Polices give positive image, convenient
method to pay premium, financial security for one’s family, Acceptable
penalty charges, one knows all the features of the policy.
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customers.
215
The ANOVA table, as displayed in table shows F ratio for the
regression model that indicates that the chosen five significant product
variables significantly contribute for the dependent Overall Satisfaction
rating of the Various LIC functions. The variance independent variable
that is associated with dependent variable is referred to as explained
variance.
216
Coefficients
Models
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
B Std. Error Beta
(Constant) 0.671 .128 13.178 .000
Financial security for my family (P3) -0.039 .029 .102 2.263 .024
I know all the features of the policy (P5) 0.457 .042 -.024 -.428 .000
Convenient method to pay premium (P8) 0.038 .043 .017 .371 .455
Acceptable penalty charges (P9) 0.342 .035 .186 3.584 .000
LIC Polices gives positive image (P10) -0.042 .050 .113 2.271 .489
217
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customers.
The output shows the results of fitting a multiple linear regression
model to describe the relationship between Overall Satisfaction rating of
the LIC Services to customers and 5 independent variables. The equation
of the fitted model is Overall Satisfaction rating of the LIC Services to
customers = 0.671023 - 0.0399416*P3 + 0.457439*P5 + 0.0382507*P8 +
0.342127*P9 - 0.0420733*P10. Since the P-value in the ANOVA table is
less than 0.05, there is a statistically significant relationship between the
variables at the 95.0% confidence level. The R-Squared statistic indicates
that the model as fitted explains 40.6697% of the variability in Overall
Satisfaction rating of the LIC Services to customers. The adjusted R-
squared statistic, which is more suitable for comparing models with
different numbers of independent variables, is 40.0692%. The standard
error of the estimate shows the standard deviation of the residuals to be
1.08424. This value can be used to construct prediction limits for new
observations by selecting the Reports option from the text menu. The
mean absolute error (MAE) of 0.834949 is the average value of the
residuals. Since the P-value is less than 0.05, there is an indication of
possible serial correlation at the 95.0% confidence level. In determining
whether the model can be simplified, notice that the highest P-value on
the independent variables is 0.4894, belonging to B.P10. Since the P-
value is greater or equal to 0.05, that term is not statistically significant at
the 95.0% or higher confidence level. Consequently, one should consider
removing P10 from the model.
Among the five significant influential product variables, the
variables namely, Financial security for my family (P3), I know all the
features of the policy (P5), Acceptable penalty charges (P9) are
218
significantly influence the overall satisfaction of LIC performance.
However, the remaining variables like Convenient method to pay
premium (P8), LIC Polices give positive image (P10) are not significant
in this model.
219
Chart 26
220
Chart 27
Overall Satisfaction Rating of LIC performance by its significant
Product variables
221
TABLE NO – 5.16
MULTIPLE REGRESSION ON OVERALL SATISFACTION
RATING OF LIC FUNCTIONS BY SERVICE VARIABLES
Model Summary
Model R R Square Adjusted R
Square
Std. Error of the
Estimate
1 .193a ..253 .247 .868
Predictors: (Constant), Customers feel safe and secure in their
transactions and they, Like to communicate the LIC services/products to
others, Agents/employees competence to answer specific queries,
sufficient number of LIC branches is available
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customers.
ANOVAa
Model Sum of
Squares df
Mean
Square F Sig.
1
Regression 247.939 4 61.98 41.98 .000b
Residual 730.883 495 1.47
Total 978.882 499
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customers.
222
Predictors: (Constant), Customers feel safe and secure in their
transactions, Like to communicate the LIC services/products to others,
Agents/employees competence to answer specific queries, sufficient
number of LIC branches is available.
The ANOVA table, as displayed in table shows F ratio for the
regression model that indicates that the chosen five significant services
variables significantly contribute for the dependent Overall Satisfaction
rating of the Various LIC functions. The variance independent variable
that is associated with dependent variable is referred to as explained
variance.
223
Coefficients
Significant Service variables
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
B Std. Error Beta
1
(Constant) 1.2747 .149 7.982 .000
Agents/employees competence to answer specific queries (S3) -0.2649 .037 .242 5.750 .000
Sufficient number of LIC branches is available (S6) 0.0650 .041 .172 4.072 .262
Like to communicate the LIC services/products to others (S8) 0.5728 .034 .174 4.108 .000
Customers feel safe and secure in their transactions (S9) 0.1100 .032 .090 2.149 .014
224
Dependent Variable: Overall Satisfaction rating of the LIC Services to
customers.
The output shows the results of fitting a multiple linear regression
model to describe the relationship between C. Rating LIC and 4
independent variables. The equation of the fitted model is Overall
Satisfaction rating of the LIC Services to customer = 1.27487 -
0.264948*S3 + 0.0650455*S6 + 0.5728*S8 + 0.110092*S9
Since the P-value in the ANOVA table is less than 0.05, there is a
statistically significant relationship between the variables at the 95.0%
confidence level.
The R-Squared statistic indicates that the model as fitted explains
25.3304% of the variability in Overall Satisfaction rating of the LIC
Services to customers. The adjusted R-squared statistic, which is more
suitable for comparing models with different numbers of independent
variables, is 24.727%. The standard error of the estimate shows the
standard deviation of the residuals to be 1.21513. This value can be used
to construct prediction limits for new observations by selecting the
Reports option from the text menu. The mean absolute error (MAE) of
0.959859 is the average value of the residuals. Since the P-value is less
than 0.05, there is an indication of possible serial correlation at the 95.0%
confidence level. Plot the residuals versus row order it is clear if there is
any pattern that can be perceived. In determining whether the model can
be simplified, notice that the highest P-value on the independent variables
is 0.2622, belonging to C.S6. Since the P-value is greater or equal to
0.05, that term is not statistically significant at the 95.0% or higher
confidence level. Consequently, one should consider removing C.S6
from the model.
225
Chart 28
Among the most influential service variables the following
variables highly influence the overall satisfaction of LIC performance.
Agents/employees competence to answer specific queries (S3), Like to
communicate the LIC services/products to others (S8), Customers feel
safe and secure in their transactions (S9). The remaining variable namely
Sufficient number of LIC branches is available (S6) are not significant in
this model.
226
Chart 29
Path Diagram Overall Satisfaction Rating of LIC performance by its
significant services variables
227
TABLE NO- 5.17
RELIABILITY OF SCALES AND ITEM-CONSTRUCT LOADINGS-
FACTORS RELATED TO PREFERENCE OF POLICY HOLDERS TO
THE SERVICES OF THE LIC
Sl.No. Items Scale Mean
if item deleted
Cronbach'sAlpha if item deleted
1 Remittance is easy. 28.96 0.698
2 Certificates are quickly sent by the LIC 28.96 0.667
3 Capital appreciation is good 27.76 0.681
4 Bonus rates are high 26.90 0.741
5 There are possibilities for reinvestment. 27.50 0.692
6 Borrowing loan from the LIC is easy. 28.93 0.714
7 Documents are easily transferred in the LIC
officers 28.80 0.714
8 Tax Rebates are sufficient. 28.89 0.662
9 LIC agents are sincere and helpful. 28.59 0.753
10 I feel happy to know that my funds through
the LIC are used in Nation are used 27.73 0.658
MEAN 31.45
VARIANCE 45.761
STD. DEVIATION 6.765
CRONBACH'S ALPHA 0.722
NO. OF ITEMS 10
228
The reliability of scales used in this study were calculated by
Cronbach's coefficient alpha. Cronbach’s alpha reliability coefficient
normally ranges between 0 and 1. However, there is actually no lower
limit to the coefficient. The closer Cronbach’s alpha coefficient is to 1.0
and the greater the internal consistency of the items in the scale. Based
upon the formula _ = rk / [1 + (k -1) r] where k is the number of items
considered and r is the mean of the inter-item correlations, the size of
alpha is determined by both the number of items in the scale and the
mean inter-item correlations. The coefficient alpha values exceeded the
minimum standard of .70. It has provided good estimates of internal
consistency reliability. As shown in Table 1, coefficient alpha values
ranged from 0.658 to 0.753 for all the Statements of preference of policy
holders. All statements obtained an acceptable level of a coefficient
alpha above .70, indicating that the scales used in this study were reliable.
It provides the following rules of thumb: “_ > .9 – Excellent, _ > .8 –
Good, _ > .7 – Acceptable, _ > .6 – Questionable, _ > .5 – Poor and _ <
.5 – Unacceptable”. While increasing the value of alpha is partially
dependent upon the number of items in the scale, it should be noted that
this has diminishing returns. It should also be noted that an alpha of 0.753
is probably a reasonable goal. It should also be noted that while a high
value for Cronbach’s alpha indicates good internal consistency of the
items in the scale, it does not mean that the scale is one-dimensional.
Factor Analysis is a method to determine the dimensionality of a scale.
229
CHAPTER – VI
FINDINGS, SUGGESTION AND CONCLUSION
6.1 FINDINGS
1. Out of 500 respondents, 289 respondents belong to male and 211
respondents are female. The majority of the respondent 57.8%
were male.
2. In the five level of age wise classification 44.4% are in the age
group between 25 – 35 years.
3. The majority of the respondents are married. The married
population of this study was 436 that is 87.2% of 500 respondent.
4. 150 respondents have more than 3 members in their family, 147
respondents have less than 4 members in their family.
5. Out of 500 respondents 83.8% of the respondents belong to the
Urban, whereas 16.2% of the respondents are in Rural.
6. 191 respondents are doing business and 116 respondents are
Professionals. The majority of the respondents are doing business.
7. Regarding the six levels of educational status of the respondent are
given in the table no 4.2, 225 respondents are educated up to higher
secondary. The 167 respondents are educated up to primary level.
8. Majority (45%) of the respondent are up to higher secondary level
of education.
9. The monthly incomes of the respondents are also classified in to
four levels. It reflects that 53.6% of the respondents earn Rs. 5,000
to 10,000 P.M. It is 268 out of 500 respondents.
10. Out of 500 respondents, 42.6% of the respondents are having own
house. 20% of the respondents are having two wheeler.
11. Out of 500 respondents 45.2% respondents prefer investment in the
insurance company and 34.4% of the respondents prefer Bank
230
investment and remaining 20.4% prefer both Bank and insurance
investments.
12. Out of 500 respondents, 35% are investing in LIC for the
Reputation of LIC name. 21.4% are investing their money in LIC
for a Product Quality and 10% of respondents concern about
premium.
13. The purposes of taking insurance policy are classified into three
levels. Out of the three levels 50.8% of the total respondents
concern their life risk coverage. 31.8% of the respondents are
taking insurance because of Family need.
14. 34.6% respondents are motivated by their friends to take Insurance
Policy.22.8% of the respondents are motivated by the LIC
advisors. Just only 9% of the respondents taking policy on their
own personal interest.
15. 50.8% respondents are taking insurance for life risk coverage
purpose. 35% of the respondents invest their money in LIC for a
reputation of company.
16. 22.4% select ULIP plan. 14.8% of the respondent opt Health plan.
It is clear from the table that 40.6% choose term plan.
17. 45.8% of respondents have more than five policies. 20.8%
respondents have four policies.
18. Regarding the value of the policy 33.8% of respondents have a
worth of Rs. 50,001 to 1,00,000 policy. 21.6% of respondents have
a worth of Rs. 1,00,001 to 2,00,000 of Policy.
19. 29% of the respondents are paying Rs. 5,000 to 10,000 as premium
per annum. 16% of the respondents are paying Rs. 10,0001 to
20,000 as premium per annum.
231
20. 42.8% of the respondents are paying their premium in half-yearly
mode of payment and 21.8% of the respondents are paying in
Quarterly mode of payment.
21. 52% of the respondents are paying their premium through their
LIC Advisors. 36% of the respondents are paying their premium by
themselves directly.
22. 12% of the respondents are using bank for their payment of
premium. 67.6% of the respondents are paying their premium by
cash.
23. The male and female respondents have overall opinion of
satisfaction regarding the function of LIC. On the five point scale,
males gave a mean rating of approximately 2.30, whereas females
gave a mean rating of approximately 2.63.
24. The result of test statistics shows the F value 6.594, the p value of
.011 indicates that there is not enough evidence to conclude that
the mean satisfaction score of Male and female are the same for the
two areas.
25. The opinion of respondents regarding overall satisfaction on
functions of LIC: On the five point scale, Married respondents
gave a mean rating of approximately 2.38, whereas Unmarried
respondent gave a mean rating of approximately 2.81.
26. The result of test statistics shows the F value 2.193, the p value of
.139 indicates that there is not enough evidence to conclude that
the mean satisfaction score of married and unmarried respondents
are the same for the two areas.
27. The opinion of respondents regarding overall satisfaction on
functions of LIC. Married respondent gave a mean rating of
approximately 2.54, whereas Unmarried respondent gave a mean
rating of approximately 2.22.
232
28. The result of “t” test statistics shows the F value 3.292, the p value
of .070 indicates that that the mean satisfaction score of joint
family and nuclear family respondents are the same for the two
areas.
29. The opinion of respondents regarding overall satisfaction on
functions of LIC: On the five point scale, Urban respondents gave
a mean rating of approximately 2.64, whereas Unmarried
respondents gave a mean rating of approximately 1.21.
30. The result of test statistics shows the F value 177.294, the p value
of .000 indicates that there is no significant relationship that the
mean satisfaction score of urban respondent and rural respondents
are the same for the two areas.
31. The opinion of respondents regarding overall satisfaction on
various LIC Policy: On the five point scale, urban respondents
gave a mean rating of approximately 2.58, whereas rural
respondent gave a mean rating of approximately 2.88.
32. The result of test statistics shows the F value 172.939, the p value
of .000 indicates that there is no significant relationship that the
mean satisfaction score of urban respondent and rural respondents
are the same for the two areas.
33. The opinion of respondent regarding overall satisfaction on various
LIC Policy. On the five point scale, Joint family respondents gave
a mean rating of approximately 2.65, whereas nuclear family
respondents gave a mean rating of approximately 2.58.
34. The result of test statistics shows the F value 4.865, the p value of
.028 indicates that there is no significant relationship that the mean
satisfaction score of joint family respondent and nuclear family
respondents are the same for the two family type
233
35. The opinion of respondent regarding overall satisfaction on
functions of LIC: On the five point scale, Married respondents
gave a mean rating of approximately 2.38, whereas Unmarried
respondents gave a mean rating of approximately 2.81.
36. The opinion of respondent regarding overall satisfaction on various
LIC services. On the five point scale, male respondents gave a
mean rating of approximately 2.37, whereas female respondents
gave a mean rating of approximately 2.21.
37. The result of test statistics shows the F value .004, the p value of,
947 indicates that there is no significant relationship that the mean
satisfaction score of urban respondents and rural respondents are
the same for the two types.
38. The opinion of respondents regarding overall satisfaction on
various LIC services: On the five point scale, nuclear type of
respondents gave a mean rating of approximately 2.37, whereas
Joint family type of respondents gave a mean rating of
approximately 2.28.
39. The result of test statistics shows the F value .391, the p value of
.532 indicates that there is no significant relationship that the mean
satisfaction score of nuclear family respondent and joint family
respondents are the same for the two types.
40. The F-ratio is ANOVA, which in this case equals 4.73821, is a
ratio of the between-group estimate to the within-group estimate.
Since the P-value of the F-test is less than 0.05, there is a
statistically significant difference between the mean Overall Rating
of LIC from one level of by Respondents Age to another at the
95.0% confidence level.
234
41. An asterisk has been placed next to 4 pairs among the five level of
age group, indicating that these pairs show statistically significant
differences at the 95.0% confidence level.
42. The F-ratio IN ANOVA, which in this case equals 7.45879, is a
ratio of the between-group estimate to the within-group estimate.
Since the P-value of the F-test is less than 0.05, there is a
statistically significant difference between the mean Overall Rating
of LIC from one level of by Respondents Occupation to another at
the 95.0% confidence level
43. An asterisk has been placed next to 6 pairs amount the six level of
respondents occupation, indicating that these pairs show
statistically significant differences at the 95.0% confidence level.
44. The F-ratio, which in this case equals 3.21716, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is less than 0.05, there is a statistically
significant difference between the mean overall satisfaction rating
of LIC from one level of by respondents qualification to another at
the 95.0% confidence level.
45. An asterisk has been placed next to 4 pairs among the six level of
education indicating that these pairs show statistically significant
differences at the 95.0% confidence level.
46. The F-ratio, which in this case equals 0.264744, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is greater than or equal to 0.05, there is not a
statistically significant difference between the mean overall
satisfaction ratings of LIC performance from one level of original
data of premium to another at the 95.0% confidence level.
235
47. There are no statistically significant differences between any pair
of means between the education statuses of the respondents at the
95.0% confidence level.
48. The F-ratio, which in this case equals 4.23385, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is less than 0.05, there is a statistically
significant difference between the mean Overall satisfaction Rating
of LIC Policy from one level of Respondents’ Age to another at the
95.0% confidence level.
49. An asterisk has been placed next to 3 pairs, indicating that these
pairs show statistically significant differences at the 95.0%
confidence level.
50. The F-ratio, which in this case equals 2.56433, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is less than 0.05, there is a statistically
significant difference between the mean overall satisfaction ratings
of LIC Policy from one level of Respondents’ Occupation to
another at the 95.0% confidence level.
51. An asterisk has been placed next to 3 pairs, indicating that these
pairs show statistically significant differences at the 95.0%
confidence level.
52. The F-ratio, which in this case equals 1.95782, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is greater than or equal to 0.05, there is not a
statistically significant difference between the mean B_ original
data. Rating from one level of Respondents Qualification to
another at the 95.0% confidence level.
236
53. An asterisk has been placed next to 3 pairs, indicating that these
pairs show statistically significant differences at the 95.0%
confidence level.
54. The F-ratio, which in this case equals 0.541788, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is greater than or equal to 0.05, there is not a
statistically significant difference between the mean Overall Rating
of LIC Policy by amount of .premium paid from one level of
amount of premium to another at the 95.0% confidence level.
55. There are no statistically significant differences between any pair
of means at the 95.0% confidence level.
56. The F-ratio, which in this case equals 0.72894, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is greater than or equal to 0.05, there is not a
statistically significant difference between the mean B_ original
data. Ratings from one level of original data. Age to another at the
95.0% confidence level.
57. There are no statistically significant differences between any pair
of means at the 95.0% confidence level.
58. The F-ratio, which in this case equals 1.33317, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is greater than or equal to 0.05, there is not a
statistically significant difference between the mean B_ original
data. ratings from one level of original data. Occupation to another
at the 95.0% confidence level.
59. An asterisk has been placed next to 1 pair, indicating that this pair
shows a statistically significant difference at the 95.0% confidence
level.
237
60. The F-ratio, which in this case equals 0.406448, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is greater than or equal to 0.05, there is not a
statistically significant difference between the mean Overall Rating
of LIC Services from one level of by Respondents’ Qualification to
another at the 95.0% confidence level.
61. There are no statistically significant differences between any pair
of means at the 95.0% confidence level.
62. The F-ratio, which in this case equals 1.0887, is a ratio of the
between-group estimate to the within-group estimate. Since the P-
value of the F-test is greater than or equal to 0.05, there is not a
statistically significant difference between the mean Overall Rating
of LIC Services by amount of premium paid from one level of
original data. Premium to another at the 95.0% confidence level.
63. An asterisk has been placed next to 1 pair, indicating that this pair
shows a statistically significant difference at the 95.0% confidence
level.
64. The results of fitting a multiple linear regression model to describe
the relationship between Overall Satisfaction rating of the Various
LIC Product offered and 10 independent variables.
65. Financial security for the family (P3), knowing all the features of
the policy (P5), convenient method to pay premium (P8),
Acceptable penalty charges (P9) and LIC Polices gives positive
image (P10) are significant predictor of this model.
66. The variables namely Policies are superior to other policies (P1),
Suitable for my needs (P2), fullest satisfaction of my requirement
(P4), Gives me confidence about my future (P6), High rate of
return (P7) are not significant predictor of this model.
238
67. F ratio for the regression model that indicates that the chosen ten
services variables significantly contribute for the dependent
Overall Satisfaction rating of the Various LIC services offered
68. Agents/employees competence to answer specific queries (S3),
Sufficient number of LIC branches is available (S6), Like to
communicate the LIC services/products to others (S8), Customers
feel safe and secure in their transactions (S9) are significant
predictors of overall satisfaction of LIC services.
69. Services variables namely Regular intimation about the due date
for premium (S1), Regular intimation about the new policies and
its services (S2), Agents/employees understand the needs of the
customers (S4), Give truthful advice on investments/tax benefits
(S5), Problems are solved by the LIC employees as quick as
possible(S7), Speedy documentation and settlement of claims(S10)
are not significant predictor of this model.
70. F ratio for the regression model that indicates that the chosen five
significant product variables significantly contribute for the
dependent Overall Satisfaction rating of the Various LIC functions.
71. Among the five significant influential product variables, the
variables namely, Financial security for my family (P3), I know all
the features of the policy (P5), Acceptable penalty charges (P9) are
significantly influence the overall satisfaction of LIC performance.
72. Convenient method to pay premium (P8), LIC Polices gives
positive image (P10) are not significant in this model.
73. F ratio for the regression model that indicates that the chosen five
significant services variables significantly contribute for the
dependent Overall Satisfaction rating of the Various LIC functions.
74. The most influential service variables the following variables
highly influence the overall satisfaction of LIC performance.
239
Agents/employees competence to answer specific queries (S3), like
to communicate the LIC services/products to others (S8),
Customers feel safe and secure in their transactions (S9).
75. The remaining variable namely sufficient number of LIC branches
are available (S6) are not significant in this model.
76. It reveals that all the seven measurement scale items are reliable as
the Cronbach Alpha coefficient is 0.770. It is greater than the
threshold level of 0.70. It has provided good estimates of internal
consistency reliability. It indicates that the scales used in this study
were reliable. It clearly indicates that the above scale items are
consistent with each other and they are reliable measure of opinion
on Factors related to the policy holders to the services of the LIC.
240
6.2 SUGGESTIONS
This study analyzes the Investors satisfaction on LIC functions
including its policies and its services. Based on the above said findings,
the following suggestions are made in order to give highest satisfaction to
its customers. There by the value of LIC has increased in the competitive
market environment. The Preferences of policy holders regarding the LIC
Policies and services are analyzed in the way of its product and service
satisfaction. The suggestions are made on the basis of product and service
satisfaction of the Policy holders of LIC.
Product Variables: out of ten important product variables which
decide the satisfaction of the policy holders, the following variables are
mostly influence the customers’ satisfaction: Financial security for the
family, knowing all the features of the policy, Convenient method to pay
premium, Acceptable penalty charges and LIC Polices give positive
image are significantly influence the satisfaction of Product offered by
the LIC. However the LIC has concentrated the following product
variables in order to improve their value of the firm in the market. The
LIC has to inform the public how the Policies are superior to other
product of competitors. It is also suggested that the LIC have to satisfy
the Policy holders in the way of explaining the importance of the policy
and how it is Suitable for family needs.
Service Variables: The service rendered by the LIC to its
customers is important to get continuous support from the existing
customers and it attracts the new people to its business. The service
variables namely Agents/employees competence to answer specific
queries, sufficient number of LIC branches is available, Like to
communicate the LIC services/products to others, Customers feel safe
241
and secure in their transactions are significant predictors of overall
satisfaction of LIC services. The above said variables are important to
increase the level of the customer satisfaction in the service it’s offered.
The following services variables are lacking in getting the
customers satisfaction. Therefore it is important to get fullest satisfaction
of its customers. Therefore the following suggestions are made to give
more effective of service satisfaction. It is important to give Regular
intimation about the due date for premium. Many customers felt that due
date of premium is not informed well in advance. They received the
intimation either a day before the due date or expiry of the due date. So, it
is import to inform the policy holder well in advance by using a modern
mode of communication devises.
It also important to retain their customers by Regular intimation
about the new policies and its services. It is also suggested that the
Agents/employees are well trained in order to understand the needs of the
customers and supply the right policy to its customers. It is also suggested
that to give truthful advice on investments and tax benefits to its
customers. It is also suggested to solve the service Problems by the LIC
employees as quickly as possible. It is also suggested to reduce or
simplify the procedure of settlement of matured policy and speedy
documentation and settlement of claims
Overall satisfaction of LIC functions: even though many private
insurance operators are entered into the market, still Life Insurance
corporation role is inevitable in the society. LIC is playing important role
give risk coverage and other benefits at lowest cost to the rich or Poor.
Regarding the overall functional satisfaction, the LIC has to concentrate
242
on the area like arranging convenient method of premium payment. This
area is lacking behind in the satisfaction level. The management should
make proper and convenient method of premium payment according to
the satisfaction of the customers. Another variable namely, limited
number of branches, which is lacking behind to get higher satisfaction of
the customers. It is suggested that the management to establish braches
where is it necessary. Opening new branches involve cost, however the
benefit to the policy holders is huge and it helps to attract new customer.
Close to 80 percent of Indians do not hold an insurance policy.
According to a recent survey agricultural and rural areas remain largely
untouched. It is evident that all the private sector life insurance
companies have branches only in cities and urban areas. No private sector
has branches in villages or taluk levels. Almost majority of the LIC
agents are marketing the LIC products targeting rural and semi urban
peoples. Therefore LIC may grow their business if it concentrates more in
rural areas.
The study shows that 45.2% of the respondents paying their premium
through the life insurance advisor’s called agents. This types of practice
should be avoided by the respondents because, all the agents are not
honest to pay the customers premium in due date. Some agents using the
money given for payment of premium by the customers are used for his
personal purpose. Therefore some policies of the customers are under
lapsed conditions. Some of the agents absconding with the policyholder’s
money and some of them are committing suicide also. Therefore it is
suggested that the policy holders’ should be educated to pay the premium
directly to the LIC branch or by cheque or draft or ECS method.
243
Each LIC branch in Namakkal District is servicing to an extent of
more than 30 kms radious from the place of existence. Therefore the
policy holders; and the agents feel very difficult to pay the premium.
Therefore the LIC authorities should open more number of sub-offices in
a village having population of more than 5000 or more. More number of
licenses should be given to the reputed agents or club members’ agents to
collect premium in important areas of the district. It will enable the policy
holders to pay their premium in time.
At present the LIC is intimating the due date of premium by post only.
Due to the development of information technology, it may be informed
by SMS through mobile phone and E-mail.
Before purchasing a policy the investor should take care to understand
each and every policy offered by the LIC agents. He must have full
knowledge about the salient futures of each and every policy. It is
advisable to invest under low premium with high risk and more maturity
value. The agents are more concerned with commission. They do not
offer any good policies with low commission. Therefore it is the duty of
policy holders’ to select the best policy from among the varieties of
policies offered by the LIC agent of the corporation.
244
6.3 CONCLUSION
This study shows that the customers called policy holders when
they comes to buy a policy, they give first preference to Endowment
policy, second preference for money back policy and third preference for
whole life policy because they want to get back something against the
premium paid during lifetime.
This study shows that the majority of the respondents belong to
male category. The age groups between 25 – 35 years of age are more
interested to invest their money in LIC policies. The majority of the
policy holders are married. They wanted to protect their family after his
death and to receive the maturity amount during his lifetime.
The investors are mainly belong to nuclear family and majority of
them are living with 3 – 5 members. The policy holders belong to
business is more than professionals and government employees. Majority
of the LIC policy holder’s educational level is higher secondary level.
Middle income group people invest more in LIC product than higher
income and majority of them belong to urban areas.
Company reputation is set to be an important reason for preference
to invest in LIC products. In case of investment, friends influence is set to
be major reason to take insurance policies. It is evident from the study
that risk coverage is the major purpose of taking insurance.
245
BIBLIOGRAPHY
BOOKS
1. Mishra, M.N. (1979), Insurance - Principles and Practices. New
Delhi : S.Chand & Company Ltd.
2. Motihar, M. (2004), Insurance Principles, Practices, Management
and Salesmanship. Allahabad: Sharda Pustak Bhawan.
3. Periyasamy, P.(2005), Principles and Practice of Insurance.
Mumbai: Himalaya Publishing House.
4. Motihar, M.(2004), Insurance Principles, Practices, Management
and Salesmanship. Allahabad: Sharda Pustak Bhawan.
5. Sushil Chandra Pal (2007). Insurance Industry in New Millennium (A
Case of LIC : Challenges and Response). New Delhi : Rajat Publications.
6. Ray, R.M. (1941). Quoted in Insurance Industry in New Millennium
(A Case of LIC : Challenges and Response) by Sushil Chandra Pal,
(2007). New Delhi: Rajat Publications.
7. Jha, S.M., (2003). Services Marketing, Mumbai : Himalaya Publishing
House.
8. Stanton, (1994), Fundamentals of Marketing. New York: Mc Graw
Hill Road, Company.
9. Philip Kotler (2005). Marketing Management, Analysis, Planning and
control. New Delhi: Prentice-Hall of India. p.59.
10. Bodla, B.S., Garg, M.C. and Singh, K.P. (2003), Insurance -
Fundamentals, Environment and Procedures, New Delhi : Deep & Deep
Publications Pvt.
11. Gupta, P.K. (2004), Pricing of insurance products- actuarial to
managerial. The Management Accountany.
246
JOURNALS
Balasubramanian, M.V., A Little extra customer service that loads
to ECstacy, Southern Splender, September 1994.
Case for making LIC, GIC Liable to punitive damages, the Times
of India, New Delhi, 21st December, 1990.
Chandrasekarn R, An agent is an entrepreneur, Southern Splender,
December 1995.
Chronica, M.P., Reforms in the insurance sector, Patriot, July
1993.
Customers our life blood, Yogakshema, May 1987.
Das S.K., Insurance scene in U.K – it’s past, present, Yogakshema,
October/November 1995.
Indian insurance industry needs a user – friendly – life, the
insurance Times, December 1995.
Innovative schemes help LIC attract new business, The Hindu,
Madras, 15th September 1988.
Inquiry panel on LIC fraud, Business standard, August, 1995.
Insurance salesmanship, federation of insurance institutions 1986.
LIC security schemes launched, the Economic Times, 2nd October,
1994.
LIC step angers policyholder, the time of India, New Delhi, and
12th August, 1993.
Life Insurance is the Monopoly justified? The Hindu, January,
1991.
Loopholes in LIC System to be probed, National herald, New
Delhi, 27th August, 1995.
247
REPORTS
Report of the committee to review the working of LIC, Govt.of India,
Report of the committee on reforms in the insurance sector, Govt, of
India, Ministry of Finance.
LIC Annual Report 2008-2009.
MAGAZINES
Insurance Times, December, 2009.
Insurance Times, March.2009
Insurance Times, October.2008
Insurance Times, January.2008
Insurance Times, February.2008
Monthly Commentary, April, 2008.
WEBSITES
WWW.licinternational.com
WWW.licindia.com
WWW.mylicindia.com
WWW.balallianzlife.co.in
WWW.birlasunlife.com
WWW.hdfcinsurance.com
WWW.icicipraife.com
WWW.ingvysyalife.com
WWW.maxnewyorklife.com
WWW.kotaklifeinsurance.com
WWW.sbilife.co.in
WWW.reliancelife.co.in
WWW.avivaindia.com
WWW.sriramlife.com
WWW.idbifortis.com
WWW.canarashsbclife.in
248
POLICY HOLDERS’ PREFERENCE FOR LIC PRODUCTS
QUESTIONNAIRE
Name of the policy holder :
1.Gender a. Male [ ] b. Female [ ]
2.Age
a. Below 25 years [ ] b. 25 years – 35 years [ ]
c. 35years – 45 years [ ] d.45years -55years [ ]
e. Above 55 years [ ]
3. Educational Qualification :
a. Primary level [ ] b. Higher Secondary [ ]
c. Graduate [ ] d. Post Graduate [ ]
e. Professional [ ] f. Technical [ ]
4.Occupational Status :
a. Government Employee [ ] b. Private Employee [ ]
c. Business [ ] d. Professionals [ ]
e. Others [ ]
5.Monthly Income :
a. Below Rs 5000 [ ] b. Rs5000-10000 [ ]
c. 10001 to Rs.20000 [ ] d. Rs 20001 to 30000 [ ]
e. Rs.30001 to 40000 [ ] f. Rs.40001 to 50000 [ ]
g. Rs.50,001 and above [ ]
6. Marital Status:
a. Married [ ] b. Unmarried [ ]
7. Type of family
a. Joint family [ ] b. Nuclear family [ ]
8. Number of members in your family
a. 2 [ ] b. 3 [ ] c. 4 [ ]
d. 5 [ ] e. 6 and above [ ]
249
9. Name of the assets which you at present
a. Own individual House [ ]
b. Two Wheeler [ ] c. Car [ ] d. Plot [ ]
10.Residential area :
a. Urban [ ] b. Rural [ ]
11. Give your preferences to invest your money.
a. Insurance Company [ ]
b. Bank [ ] c. Both [ ]
12. What factors do you consider while selecting a life insurance
company?
a. Premium Outflow [ ] b. Company Reputation [ ]
c. Service Quality [ ] d. Product Quality [ ]
e. Return on Investment [ ]
13. Who influence you to select a Life Insurance company?
a. Personal interest [ ] b. Friends [ ]
c. Family [ ] d. Agents [ ]
e. Advertisements [ ]
14. What purpose for buying an insurance policy?
a. For a purpose of saving [ ]
b. For a Life risk coverage [ ]
c. For my family need [ ]
15. What factor motivates to you choose particular life insurance policy?
a. Self interest [ ] b. Friends/relatives [ ]
c. Insurance advisor [ ] d. Brand and Advertisement [ ]
16. Which type of insurance place would you prefer?
a. ULIP [ ] b. Traditional Plan [ ]
c. Health Plan [ ] d. Term Plan [ ]
250
17. How many policies have you bought (Number of policy)?
a. One [ ] b. Two [ ]
c. Three [ ] d. Four [ ]
e. Five [ ]
If More than five give number of policy --------
18. What is the value of all your life insurance policy?
a. Up to Rs. 50,000 [ ]
b. 50001 to 1,00,000 [ ]
c. 1,00,001 to 2,00,000 [ ]
d. Rs, 200,00,000 to 5,00,000 [ ]
e. Rs.5,00,000 and above [ ]
19. Amount that you paid for a insurance premium per year
a. Below Rs 5,000 [ ]
b. 5000 to 10,000 [ ]
c. Rs. 10,000 to 20,000 [ ]
d. Rs 20,001 to 30,000 [ ]
e. Rs. 30,001 to 50,000 [ ]
f. Rs.50,001 and above [ ]
20. Which mode of premium would you like to prefer
a. Monthly [ ] b. Quarterly [ ]
c. Half early [ ] d. Yearly [ ]
21. How do you pay your insurance premium
a. Through agent [ ] b. By self [ ]
c. Through bank [ ]
22. By what mode you pay insurance premium
a. By cheque [ ] b. By cash [ ]
c. By Debit and Credit card [ ]
251
23. Would you like to continue with the same Life Insurance Company?
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
Product perception
1. LIC Policies and plans are superior to or more attractive than the
private insurance companies
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
2. LIC policy that I take was more suitable for my need
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
3. The policy has given financial security for my family
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
4. The policy has got the fullest satisfaction of my requirement
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
5. As a policy holder i agree that I know all the features of the policy
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
252
6. LIC policy gives me confidence about my future
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
7. High rate of return on insurance products as compared to the other
saving instruments
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
8. Convenient to pay premium on due date
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
9. Reasonable penalty charged for late premium payment
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
10. Whatever the product I take / gives me a positive image
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
Service perception
11. I got intimation about the due of my premium payment regularly
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
253
12. Frequently the LIC has informed me about the new policies
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
13. Agents and employees who have the proper knowledge and
competence to answer customers‟ specific queries and requests
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
14. Agents and employees who understand the specific needs of their
customers
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
15. Ability of agents to give truthful advice on investments /tax benefits
etc.
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
16. There is a sufficient number of LIC branches available
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
17. All the products related problems are solved by the LIC staff as quick
as possible
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
254
18. I would like to communicate the service offered by LIC to others
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
19. Making customers feel safe and secure in their transactions
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
20. Speedy documentation and processes from the time of issue of
policies up to the settlement of claims (e.g. premium and default notices
etc.)
a. Strongly disagree [ ] b. Disagree [ ]
c. Neither agree nor disagree [ ]
d. Agree [ ] e. Strongly agree [ ]
Overall Satisfaction
21. How do you rate the service offered by your Life Insurance
Company?
Low Rating 10 – 20 – 30 – 40 – 50 – 60 – 70 – 80 – 90 – 100 High
Rating
22. Give your rate of satisfaction over the policy that hold with you at
present
Low Rating 10 – 20 – 30 – 40 – 50 – 60 – 70 – 80 – 90 – 100 High
Rating
23. Give your overall rate of satisfaction over the services provided by
the LIC
Low Rating 10 – 20 – 30 – 40 – 50 – 60 – 70 – 80 – 90 – 100 High
Rating
Thanking you
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