ife insurance corporation of india term paper
TRANSCRIPT
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ife Insurance Corporation of India
From Wikipedia, the free encyclopedia
Life Insurance Corporation of India
c
Type Government-owned
corporation
Industry Insurance
Founded 1 September 1956
Headquarters Mumbai, India
Key people T. S. Vijayan (Chairman)
D. K. Mehrotra, ThomasMathew and A. Dasgupta
(MD)
Products Life insurance
Pensions
Mutual funds
Total assets 9.31 trillion (US$ 211.34
billion)
Owner(s) Government of India
Employees 112,184 (2008)
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Subsidiaries LIC Housing Finance Limited
LIC(Nepal)Ltd
LIC(Lanka)Ltd
LIC(International)BSC(C)
Website www.licindia.in
The Life Insurance Corporation of India (LIC) (Hindi: ) islargest state-owned life insurance company in India, and also the country's
largest investor. It is fully owned by the Go vernment of India. It also funds close
to 24.6% of the Indian Government's expenses. It has assets estimated of 9.31
trillion (US$ 211.34 billion).[1 ] It was founded in 1956 with the merger of mo re
than 200 insurance companies and provident societies. [ 2 ]
Headquartered in Mumbai, financial and commercial capital of Indi a,[ 3 ] the LifeInsurance Corporation of India currently h as 8 zonal Offices and 101 divisional
offices located in different parts of India, a t least 2048 branches located in
different cities and towns of India along with satellite Off ices attached to about
some 50 Branches, and has a network of around 1.2 mil lion agents for soliciting
life insurance business from the public.
Contents
[hide]
1 History
2 Nationalization
3 Current status
4 References
5 External links
[edit]History
The Oriental Life Insurance Company, the first corp orate entity in India offering
life insurance coverage, was established in Calcutta in 1818 by
BipinBehariDasgupta and others. Europeans in India were its primary target
market, and it charged Indians heftier premiums. The Bombay Mutual Life
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Assurance Society, formed in 1870, was the f irst native insurance provider. Other
insurance companies established in the pre- independence era included
Bharat Insurance Company (1896)
United India (1906)
National Indian (1906)
National Insurance (1906)
Co-operative Assurance (1906)
Hindustan Co-operatives (1907)
Indian Mercantile
GeneralAssurance
Swadeshi Life (later Bombay Life)
The first 150 years were marked mostly by turbulent economic conditions. It
witnessed, India's First War of Independence, adverse effec ts of the World War
I and World War II on the economy of Indi a, and in between them the period of
world wide economic crises triggered by the Great depressi on. The first half of the
20th century also sa w a heightened struggle for India's independence. The
aggregate effect of these events led to a high rate
of bankruptcies and liquidation of life insurance companies in India.T
his hadadversely affected the faith of the general public i n the utility of obtaining life
cover.
The Life Insurance Act and the Provident FundAct were passed in 1912, providing
the first regulatory mechanisms in the Life I nsurance industry. The Indian
Insurance Companies Act of 1928 authorized the government to obt ain statistical
information from companies operating in both life and non-life insurance areas.
The subsequent Insurance Act of 1938 brought stricter st ate control over an
industry that had seen several financially unsound ventures fail. A bill was also
introduced in the Legislative Assembly in 1944 to nationalize the insuranceindustry.
[edit]Nationalization
In 1955, parliamentarian AmolBarate raised the matter of insurance fraud by
owners of private insurance companies. In the ensui ng investigations, one of
India's wealthiest businessmen, Ram KishanDalmia, owner of the Times of
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India newspaper, was sent to prison for two yea rs. Eventually, the Parliament of
India passed the Life Insurance of India Act on 1956-06-19, and the Life
Insurance Corporation of India was created on 1956-09-01, by consolidating the
life insurance business of 245 private life insurers and other entities offering life
insurance services. Nationalization of the li fe insurance business in India was a
result of the Industrial Policy Resoluti on of 1956, which had created a policy
framework for extending state control over at least seventeen sectors of the
economy, including the life insurance.
[edit]Current status
LIC building, at Connaught Place, New Delhi, designed by Charles C orrea, 1986.
Over its existence of around 50 years, Life Insurance Corporation of India, which
commanded a monopoly of soliciting and selling life insurance in India, c reated
huge surpluses, and contributed around 7 % of India's GDP in 2006.
The Corporation, which started its business with around 300 offices, 5.6 million
policies and a corpus of INR 459 milli on (US$ 92 million as per the 1959 exchange
rate of roughly Rs. 5 for a US $ [ 4 ], has grown to 25000 servicing around 180
million policies and a corpus of over 8 trillion (US$ 181.6 billion)
Submitted To: - Submitted By: -
.RIMT-Maharaja Aggrasen Engineering
College
MandiGobindgarh
ACKNOWLEDGEMENT
1The success of this f inal report is the outcome of Guidance and
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valuable
suggestions provided by all the concerned without whom the report
could not fide on
the right back.
I would like to express my sincere gratitude to Lect. Mrs.
Paramjeetkaur, MBA
Dept.,RIMT-MAEC for giving me an opportunity to do this project
work.
I also express my sense of deep gratitude towards PUNJAB TECHNICAL
UNIVERSITY JALANDHAR for introducing a programme which enables us
to learn
more.
Finally, I will be failing in my duty, if I do not thank my
parents, friends and well
wishers for their enthusiastic support and who have directly orindirectly helped in
some way or the other in making this final report a success.
2Preface
3Table of Content
1. Main Text
1.1 Execut ive Summary5
1.2 Introduction
y Introduction ....6
yObjectives....8
yLimitations..10
2. Finding & Results
yIndustry prof ile. ..11yCompany profile....14
yCompany products.18
ySWOT Analysis.....21
y Research methodology...22
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yAdvantage of life insurance...27
yConclusion.30
3.Appendices. . . 31
4.Bibliog rap hy. .3 4
4Executive Summary
Management Thesis is a part of the MBA Program. The objective of a
Management Thesis is to train the student in designing and
implementing a research
project in respect of a business problem. A Management Thesis is
the culmination of
training provided to the student on practical applicability of the
theoretical conceptslearned by them.
In this study we look at the options of experiential learning and
embedding to the
skills and how the organization get the accreditation from its
training course and
develop the employee exactly and smartly using applying diff erent
models like 360o
feedback, training by telephone, group training, mind mapping,
perceptual awareness
etc.Training is essential to order to understand how to implement the
core principle
of coaching and learning. Most of the people attracted up to the
profession or precisely
the once who are likely to make good trainers. People with
integrity like helping other
and enjoy making different others. Experiential l earning and
embedding skills is an
action oriented behavioral situation. The purpose of the actionsituation is to have
participants generate their own data about each of the key
concepts to be studied.
To get the best f rom experiential learning and embedding skills
method, the
trainer must be a good observer of behavior. When the groups start
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to examine its
experiences and reflect upon them, he is in a position to assist
with this process. His
5responsibilities in focusing learning, and making it clearer for
each participant, are
extremely important.
INTRODUCATION
Insurance is an upcoming sector, in India the year 2000 was a
landmark year
for life insurance industry, in this year the lif e insurance
industry was liberalized after
more than fifty years.Insurance sector was once a monopoly, with LIC as the only
company, a public
sector enterprise. But nowadays the market opened up and there are
many private
players competing in the market. There are fifteen private life
insurance companies has
entered the industry.
After the entry of these private players, the market share of LIC
has been
considerably reduced. In the last f ive years the private players
is able to expand the
market (growing at 30% per annum) and also has improved their
market share to 18%.
For the past f ive years private players have launched many
innovations in the
industry in terms of products, market channels and advertisement
of products, agent
training and customer services etc.
The various l ife insure rs enteredIndia:-
1. HDFC Standard Life Insurance Company Ltd.
2. Max New York Life Insurance Co. Ltd.
3. ICICI Prudential Life Insurance Company Ltd.
4. Kotak Mahindra Old Mutual Lif e Insurance Limited.
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5. Birla Sun Life Insurance Company Ltd.
6. Tata AIG Life Insurance Company Ltd.
67. SBI Life Insurance Company Limited.
8. ING Vysya Life Insurance Company Private Limited.9. Met lif e India Insurance Company Ltd.
10. Royal Sundaram Life Insurance Company Limited.
11. Aviva Life Insurance Co. India Pvt. Ltd.
12. Sahara India Insurance Company Ltd.
13. Shriram Life Insurance Company
14.Life Insurance Corporation of India.
15. Reliance Life I nsurance Company Limited.
16. Bharti AXA Life Insurance Company Limited.
Through this project I want to study about the lif e insurance
industry and also doing thecomparative analysis between two insurance players in this
industry. They are,
ICICI Prudential Life Insurance
Life insurance corporation of India
7OBJECTIVES
The entry of f oreign MNCs and the conductive business
environment fostered by
the government, it is no wonder that the re-entry of private
insurance has marked a
second coming for the sector. In just five years, the sector has
undergone a makeover,
offering more choice, better services, quicker settlement, tighter
regulation and greater
awareness s the environment become more and more competitive and
services and
products become alike, c reating a diff erentiation is becoming
extremely tough.
Thus, this project objectives is as follows
. To know where Reliance life insurance Company limited & life
insurance
Corporation of India companies stands in the market.
Find out the strength and the weakness of their plans.
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And making comparative analysis between the products of Reliance
life
insurance Company limited with Life insurance Corporation of
India.
8Scope of the s tudy:
This study can be conducted by comparing the performances &
products of three
private & government insurance players in insurance industry.
The number of respondents to be surveyed can be improved.
The study can be conducted in Bangalore city only.
This study can be conducted to analyze the market stand of
Reliance lif e
insurance Company limited and Life insurance Corporation of I ndia
insurance
companies.
9LIMITATION
Thought the present study aims to achieve the above mentioned
objectives in full
earnest and accuracy, it may be hampered due to certain
limitations, some of thelimitations of this study may be summarized as follows,
This study is limited to two private insurance companies only.
(Reliance life
insurance company limited & Life insurance corporation of India)
This study is limited to Bangalore city only.
And getting accurate responses from the respondents due to
their inherent
problems. They may be refusing to co-operate. Respondents may have to be contacted repeatedly or alternate
respondent may
have to be identified.
For want of time is restricted.
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Finding & Results
INDUSTRY PROFILE
Insurance is a contract between two parties whereby one party
called
insurer undertakes in exchange for a f ixed amount of money on thehappening of a
certain event. Insurance is a protection a gainst financial loss
arising on the happening
of an unexpected event. The primary purpose of Life Insurance is
the protection of the
family. Insurance in it's various f orms protects against such
misfortunes by having the
losses of the unfortunate f ew paid by the contribution of the many
who are exposed to
the same risk. This is the essence of insurance- the sharing of
losses and substitution of
certainty for uncertainty. Insurance companies collect premiums to
provide for this
protection. A loss is paid out of the premiums collected from the
insuring public and
the insurance companies act as trustees of the amount collected.
In is a system by
which the losses suffered by a few are spread over many, exposed
to similar risks.
In the western world, life insurance evolved mainly from the
maritime industry.
Started by private financiers who used to ga mble on the lives of
seafarers by of fering
five times the money deposited with them in case of certain
contingencies?
In its present form, life insurance has its origin in England and
made its debit in
India in the year 1818.Initially, Indians were not considered onpar with Europeans as
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far as their insurability was concerned. There were also many
other failures. It was in
the early part of the 20th century that some kind of legislation was
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made to regulate the
industry. From then on life insurance made great strides in the
country.
At the time of independence and thereafter, there were more than
200 companies
operating in India and not all of them on sound ethical
principles. Many factors
combined together to prompt the then government to nationalize the
life insurance
industry in 1956 to f orm the Life Insurance Corporation of India.
The years from 1956 to 1999 saw the life insurance corporation of
India emerge
as a giant fi nancial institution and the lone organization
purveying life i nsurance, if we
ignore the minimal presence of postal lif e insurance. The
institution succeeded in
penetrating in many areas and segments of the population and in
garnering public
money for public welfare.
It was in the 1990s that the winds of change started sweeping
over India and
brought in their wake many changes in the economy. Liberalization
ensured
competition in many fields and there was a clamor that theinsurance industry too is
opened up to Private Indian and foreign players t o provide the
customer with a choice.
The Malhotra committee, appointed in 1993 was given the mandate to
study the
industry and to suggest the changes that were necessary to make it
modern and in tune
with peoples aspirations. The report submitted by the committee
was the precursor of
the IRDA Bill.By the passing of the IRDA Bill, the Insurance sector has been
opened up for the
private companies to carry on insurance business. Now th e life
insurance industry in
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India is rapidly evolving and growing. It has witnessed a big
growth as many Indian
and foreign were entered in to the Indian insurance sector. The
life insurance industry in
India has become fiercely competitive with the entry of several
new players including
major multinational insurers after the deregulation of the sector.
It has opened up a
range of untapped opportunities for new entrants into the
industry, as the potential
market for buyers is high since the emerging market in India has a
low insurance
penetration and high growth rates.
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COMPANYPROFILE
ICICIPrudent ialLife Insurance
Overview
ICICI Prudential Life Insurance Company is a joint venture between
ICICI Bank - one
of India's foremost financial services companies-and Prudential
plc - a leadinginternational financial services group headquartered in the United
Kingdom. Total
capital infusion stands at Rs. 47.80 billion, with ICICI Bank
holding a stake of 74%
and Prudential plc holding 26%.
We began our operations in December 2000 after receiving approval
from Insurance
Regulatory Development Authority (IRDA). Today, our nation-wide
team comprises
of over 2100 branches (inclusive of 1,116 micro-offices), over
290,000 advisors; and
18 bancassurance partners.
ICICI Prudential is the first lif e insurer in India to receive a
National Insurer Financial
Strength rating of AAA (Ind) f rom Fitch ratings. For three years
in a row, ICICI
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Prudential has been voted as I ndia's Most Trusted Private Life
Insurer, by The
Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted
Brands'. As we
grow our distribution, product range and cu stomer base, we
continue to tirelessly
uphold our commitment to deliver world-class financial solutions
to customers all over
India.
Our vision:
To be the dominant Life, Health and Pensions player built on trust
by world-class
people and service.
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This we hope to achieve by:
yUnderstanding the needs of customers and offering them superior
products and
service
yLeveraging technology to service customers quickly, eff iciently
and
conveniently
yDeveloping and implementing superior risk management and
investment
strategies to offer sustainable and stable returns to our
policyholders
yProviding an enabling environment to foster growth and lea rning
for our
employees
yAnd above all, building transparency in all our dealings
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The success of the company will be founded in its unflinching
commitment to 5 core
values -- Integrity, Customer First, Boundaryless, Ownership and
Passion. Each of the
values describe what the company stands for, the qualities of our
people and the way
we work.
We do believe that we are on the threshold of an exciting new
opportunity, where we
can play a significant role in redefining and reshaping the
sector. Given the quality of
our parentage and the commitment of our team, there are no limits
to our growth.
Our values :
Every member of the ICICI Prudential team is committed to 5 core
values: Integrity,
Customer First, Boundaryless, Ownership, and Passion. These values
shine forth in all
we do, and have become the keystones of our success.
MangementProfile:
Board of Director
The ICICI Prudential Life Insurance Company Limited Boardcomprises reputed people
from the finance industry both from India and abroad.
Mr. K.V. Kamath,Chairman
Ms. Cha nda Kochhar,Director
Mr. Barry Stowe,Director
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Mr . Adrian O Conn or,Director
Prof. M arti G. Subrahmanyam,Director
Mr. MaheshPrasa d Modi,Director
Ms. Rama Bijapurkar,Director
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Mr. Keki Dadiseth,Director
Ms. Shikha Sharma, Managing Director
Mr. N.S. Kannan, Executive Director
Mr. Bhargav Dasgupta, Executive DirectorManagement Team
The ICICI Prudential Life Insurance Company Limited Management
team comprises
reputed people from the finance industry both from India and
abroad.
Ms. Shikha Sharma,Managing Director & CEO
Mr. N. S. Kannan,Executive Director
Mr. Bharg av Dasgupta,Executive Director
Ms . Anita Pai,Executive Vice President Customer Service &
Technology
Dr.AvijitChatterjee, Appointed Actuary
Mr .PuneetNanda,Executive Vice President & Chief Investment
Office
Life insurance Corporation of IndiaLIC of India is one of Indias leading financial institutions,
offering complete
financial solutions that encompass every sphere of life. From
commercial banking to
stock broking to mutual funds to life insurance to investment
banking, the group caters
to the financials needs of individuals and corporate.
The LIC has a net of over Rs. 1,800 crore and employs over 7,500
employees inits various businesses. With a presence in 82cities in India and
it services a customer
base of over 20,00,000.
Date of Establishment1 Sep. 1956
Address
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1st Floor,West Wing, Mumbai Do-Iv, Yogakshema, JeevanBimaMarg, Mumbai - 400
021, India
Branches 8 Zonal Offices and 101 Divisional Offi ces
Management Team
T.S. Vijayan - Chairman
D.K. Mehrotra - MD, LIC
Thomas Mathew T - MD, LIC
A K Dasgupta - MD, LIC
ArunRamanathan - Secretary, Financial Services, Dept. of Financial Services,
Ministry of Finance,
Govt of India
SindhushreeKhullar - Addl. Secretary, Dept of Economic Affairs, Ministry of
Finance
YogeshLohiya - Chairman cum MD, GIC of I ndia
T.C. Venkat Subramanian - Chairman & MD, Export Import Bank of India.
Overview
The largest life insurance company in India, Life Insurance Corporation is
fully owned by the
government. It provides individual life insurance, group insurance and pension
plans. Its subsidiaries
include Life Insurance Corporation of India International, LIC Nepal, LICLanka, LIC Housing
Finance and LICHFL Care Homes. It has ov er 12 million policy holders and over
9 lakh agents. It has
underwritten more than 120 million policies.
LIC saw computers in 1964. Today the company is on the Internet and is
utilizing Information
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Technology in servicing its clients. It has bagged various award including
Loyalty Awards 2008 inInsurance Sector, NDTV Profit Business Leadership Award 2007, CNBC Awaaz
Consumer Awards
2007 and Outlook Money NDTV Profit A wards 2007.
LIC provides a rewarding career as sales a gents. It offers world class
training, freedom to work and
unmatched financial strength.
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COMPANYPRODUCT
Product D etailsofICICIPrudentialLifeInsurance Products:-
yLife Time Gold
yPremiumLifeGoldyLife Stage Pension
yLife Time SuperPension
yHospital Care
yLife Link Super
yPremierLife Pension
yICICIPru______+ M ediAssu re
yInves t Shield Life
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Product o fLifeInsuranceCorporationofIndia
Children's Policy
KomalJeevan - Plan No. 159
Children Deferred - Plan no.41
Jeevan Kishore - Plan no.102
JeevanChhaya - Plan no.103
Marriage Endowment/Educational Annuity - Plan No. 90JeevanAnurag - Plan no.168
EndowmentPolicy
Endowment with Profits - Plan no.14
Limited Payment Endowment with Profits - Plan no.48
JeevanMitra - Plan no.88
New JanaRaksha Policy - Plan no.91
JeevanAnand Plan no. 149
JeevanMitra Triple Cover - Plan no.133
GroupInsurance Policy
JanashreeBimaYojana
Group Insurance Scheme in lieu of EDLI
Group (Term) Insurance Scheme
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Group Savings Linked Insurance Scheme
Group Superannuation Scheme
Group Mortgage Redemption Assurance Scheme
ShikshaSahayogYojana
Joint Life Policy
JeevanSaathi - Plan no.89
Money BackPolicy
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Money Back with Profit - Plan no.75
New Money Back - Plan no.93
JeevanSurabhi 15 yrs - Plan no.106
JeevanSurabhi 20 yrs - Plan no.107JeevanSurabhi 25 yrs - Plan no.108
JeevanBharati Plan No 160
JeevanSamriddhi Plan No 154, 155, 156 157
BimaBachat- Plan no.175
Pension PlansorAnnuities
New JeevanDhara - Plan no.148
New JeevanSuraksha Plan no. 147
JeevanAkshay II Plan no. 163
JeevanNidhi Plan no. 169
JeevanAkshay V Plan no. 183
SpecialPlans
Term Assurance - Plan no.43
Mortgage Redemption - Plan no.52
JeevanAadhar - Plan no.114
Market Plus - Plan No 181
JeevanVishwas Plan No. 136
JeevanSaral Plan No. 165
JeevanPramukh Plan No. 167
BimaNivesh 2005 Plan No 171
Money Plus-Plan No 180
Term Policy
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Convertible Term Assurance - Plan no.58
New BimaKiran
Term Assurance
AnmolJeevan I Plan No- 164
AmulyaJeevan-Plan No-177
Whole Life Policy
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Whole Life with Profits - Plan no.2
Limited Payment Whole Life with Profits - Plan no.5
Single Premium Whole Life - Plan no.8
JeevanTarang- Plan no.178
PENSIONPLANPRODUCTS OFLICINDIA &ITSFEATURES
yLIC of India retirement income plan
yLIC of India retirement income plan (unit linked)
What is the LIC of India retirement income plan?
The LIC of India retirement Income plan is a saving plan designed
to meet your post
retirement needs. It is a plan that gives you jeenekiazaadi
. It gives you the choice to
remain independent even after retirement.The LIC of India retirement income plan is a participating plan.
The plan comes in two
forms:
One with cover and one without cover
Who can avail of the LIC of India retirement income plan?
How old do you have to be to avail of this plan?
Minimum age -18 years
Maximum age 60 years
For what term can choose to pay the premiums?
5 years 30 years
At what intervals can you pay premiums?
yQuarterly
yHalfyearl
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Annually
What are the advantages of t his plan?
yYou can choose to retire at any age between 45 years and 65
years.
yOn retirement:
yAnnuity option:
yEarly retirement benefits:
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Other products are:
yMoney plusyAuto plus
yChild plan
yHealth plan
SWOTANALYSIS
Strengths:
a. Dedicated Employees.
b. Well Eff icient Management.c. Technology.
d. Diversification of funds.
e. Strong and popular brand name.
f. Adaptability to changes.
Weakness:
a. Lack of good services.
b. Lack of a wareness about insurance among people.
c. Less coverage in Rural Areas.
Opportunities:
a. Fast gro wing economy.
b. Increasing per capita income in India.
c. Saving behavior.
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d. High growth of ULIP industry.
Threats:
22
a. Arrival of new entrants in the insurance industry.
b. Cut throat competition within the industry
Observations
RESEARCH METHODOLOGY
TYPE OFRESEARCH
The research includes different options. They are:
Exploratory research:
It is usually a small-scale study undertaken to define the exact
nature of a
problem and to gain a better understanding of the environment
within which the
problem has occurred. It is the initial research, before more
conclusive research is under
taken.
Descriptive research:
It is to provide an accurate picture of some aspects of market
environment.
Descriptive research is used when the objecti ve is to provide a
systematic description
23
that is as factual and accurate as possible. It provides the
number of time something
occurs, or frequency, lends itself to satisfied calculations such
as determining average
number of occurrences.
Casual research:
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If the objective is too determined which variable might be causing
a certain
behavior that is whether there is a cause and effect relationship
between variable, casual
research must be undertaken. In order to determine causality, it
is important to hold the
variable that is assumed to cause the chang e in the other variable
constant and than
measure the changes in the variable. This type of research is very
complex and the
researcher can never be completely certain that there are no other
factors inf luencing the
casual relationship, especially when dealing with peoples
attitudes and motivation.
This research is about understanding the market stand and also
find the strength
& weakness of the products of three insurance companies by making
comparing
analysis of the products of the companies, mainly descriptive
research methodology are
adopted. Descriptive research was adopted since it provides
accurate picture about some
aspect of market environment such as which brand is performing
well and what thecompany can do to improve its market share.
24
SAMPLINGPROCEDURE
How should the respondents be chosen? To obtain a representative
sample and nonprobability
sample can be drawn, they are
Judgmentsample:The researcher selects population numbers who are good prospects
for accurate
information.
For collection of research data judgment-sampling technique is
used where all of
them are employees of the three insurance companies as they a re
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good prospect for
accurate information.
ACTUAL COLLECTION OFDATA
Data s ources:The sources of data include either secondary data or primary data
and even some times
the combination of both. The present study is more concentration
on both primary and
secondary data.
Primary data:
Primary data is collected through face-to face interaction with
employees of theinsurance companies, by meeting them in personal.
25
Secondary data:
The secondary data used for their study are inclusive of the data
collected
from the internet, catalogues and brochures and magazines.
METHODOLOGY
The study will conduct on the bases of survey through
questionnaires given to
respondents.
Sampling Design
Population:Ludhiana
Sample Size: Population of 100
Sample Technique: Convenience SamplingStatistical Tools: Correlation.
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ADVANTAGES OFLIFEINSURANCE
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Protection against riskof untimely death
Life insurance is a product, which offers protection against the
risk of death the
full sum assured is made available under a life assurance policy,
whereas under othersavings schemes, the total accumulated savings alone will be
available.
Protection during old age
Life insurance can also be used as a means of saving for ones
future. There
are a number of life insurance policies, which in addition to life
cover also provide the
means of investing ones income. The sum as per the policy willbe received only after a
period of time. This amount thus provides for the old age.
27
Payment of life insurance premiums is compulsory and becomes a
habit.
Savings in other scheme can be easily withdrawn and may be used
for less worthy
purpose. Termination of a life insurance policy by the
policyholder usually results in
substantial loss in benefits under the policy to the policyholder.
One is thus encouraged
to save and keep ones policy alive.
Educational requirements a nd c harity
The object of insurance may be to serve as a security to
educational funds in
respect of loans advanced for educational purpose or to provide
donations to charitableinstitutions like hospital and school.
Nominationand assignment
The life insured can name the person or persons to whom the policy
money
would be payable in the event of his death .the proceeds of a life
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insurance policy can
be protected against the claims of the creditors of the life
insured by effecting a valid
assignment of the policy. The beneficiaries are f ully protected
from creditors expect to
the extent of any interest in the policy retained by the insured.
Marketability a ndsuitability f or b orrowing
After 3 years, if the policyholder finds that he is unable to
continue payment of
premiums he can surrender a policy f or a cash sum. A life
insurance policy is accepted
as a security for a commercial loan.
Loans from the i nsurance company28
A policy holder can take a loan from his insurance company against
the
Security of his life insurance policy provided the terms of the
terms of his policy allow
such a loan. This loan can be taken usually af ter a period of 3
years from
commencement of the policy and is a percentage of its surrender
value.
Investment options
The unit link products gives comprehensive insurance solutions
that cater to
an individuals dual need of earning potentially high returns as
well as stay for life.
Thus there is an option to invest money in the products that
combine the best of
insurance and investment. In a volatile market conditions it ispossible to secure both as
one can hedge the investment with saver investment vehicles that
provide a diversified
portfolio.
Tax benefits
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The Indian income tax act provides tax concessions to the
policyholder both
on payment of premium and on the maturity amount. Under sec 88 the
tax benefits on
premium paid by an individual for life insurance policies on his
own life\on the life of
spouse \children minor or major, including married daughters.
Protection to wife and children
Under sec 6 of t he married womens property act if a married man
takes a
policy of life insurance on his own life and expenses on the face
of it to be for the
benefit of his wife or of his wife and children or any of them,
then it shall be deemed to
be a trust for the benefit of his wife and children or any of
them,
29
According to the interest so expressed and shall not so long as
any object of trust
remains be subject to the control of the husband or to his
creditors or form part of hisestate. An insurance policy taken by a married man in the above
manner is ideal way to
protect the interest of his wife and children, even after his
untimely death.
CONCLUSION
The financial markets have continued to witness unprecedented
liberalization,
growth and reforms over the last decade prompted by regulatory
compulsions and a
rapid integration between domestic and global markets. And as a
result, one has seen
substantial growth in the number of financial firms (insurance
companies, mutual funds,
brokerages, banks etc.) and in the number and variety of financial
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products and services
offered by them. As the need of the people is changing so is
changing the investment
habits of the people and this has brought in a spate of new
products and schemes where
people can invest. The concept of insurance as an investment
option has arrived where
people first identify the varying needs of money then converts the
needs into specific
amount of money and time required to achieve the objective of
investments plans. The
objective of insurance as an investment is t o ensure that
investments are driven by pre
determined and well thought out investment plan and that the
investments are suitable
and adequate to meet these plans. But for this the planner must
understand the universe
of investments options. He/she must be well informed on the risk
and return attributes
of these options.
In addition to the above, companies should also innovate to come
up with better
products that would suit the I ndian population and should also try
to market and selltheir products through new channels of distribution that can be
effective in selling their
products to the masses. People should ident ify their needs and
then decide on the type
of policy they want to invest in. insurance is a good investment
option for those people
who do not know where to invest and who do not want to the risk of
capital erosion.
30
But, people who are f inancially savvy can opt for term insurance
and invest the rest in
other options that may give them higher returns.
APPENDICES
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QUESTIONNAIRE
I,Kunjbiharipaliwal, student of ICFAI National Collage,
pursuing my
MBA, carrying out a project work in partial f ulfillment of
my live project. Iam undertaking a project
Acomparative study on the offerings of Insurance produc ts
between
Reliance LifeInsurance Company Ltd
Vs
LifeInsurance Corporation of IndiaIn view of this, I hereby request you to give your feed
back on the
questionnaire given below. Please note that your response
will be kept
confidential. Please mark the appropriate answer
NAME-- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
----------------------------
AGE--- --- --- -- National ity--- --- --- --- --- --- --- -- Income
------------------------
31
Contact number- --- --- --- --- --- --- --- --- --- --- - ,
--------------------------------------------
Address---------------------------------------------------
--------------------------------
-------
----------------------------------------------------------
----------------------------------
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--------
1. Occupation
a) Businessman [ ] b) Professional [ ]
c) Students [ ] d) House wife [ ]
2. Do u have Insurance? If yes of which company?
a)Yes b) No
3. Have u heard about Reliance Lif e Insurance?
a)Yes b) No
4. Are you a ware about the various plans offered by
Insurance Company?
a)Yes b) No
5. According to you, Insurance policies are for?
a) Child [ ] b) Adults [ ]
c) Couple [ ] d) Old people [ ]
6. Is there any age, gender, or other limitation in
getting insurance?
a)Yes b) No
7. At what age should a person think about taking an
insurance policy?
.
8. Have you or any of your family members got the benefit
out of
Insurance?
a)Yes b) No
32
9. Do you know about Unit Linked Insurance Plans (ULIP)?
a) Yes b) No
10. How did you come to know about ULI P?
Friends/Close circle Advertisements Agents
Periodicals/Books/Internet Investors11. In which Reliance Lifes scheme did you invest?
life invest life maker investment
life maker premium life maker gold
If any other please specify.
12. Why did you prefer above-mentioned Reliance Lif e
policy?
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High returns Security wide acceptance
Less risk Flexible Tax benefit
If any other please specify.
13. How long have you been investing in the above Reliance
Life
policy?
Less than 1 year 1 year-2 years
2 year-3years 3 years and more
14. How do you rate the quality of service provided by
Reliance Life?
Good Very good Average
Bad cant say
15. Did you try out any other Companys policy?
Yes No
If any other please specify.
16. How do you rate Reliance Life by our other company
insurance
Policy?
Good Very good Average
33
Bad cant say
Thank you
Date: Signature
Bibliography
BOOKS:
Life and Health Insurance Kenneth Black and Harold D.
Fundamental of Risk and Insurance- Emmet J Vaughan and
John Willy
WEBSITES
www.licindia .com
www.irdaindia.org
www . icic iprulife.co
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