project [vishwa]

8/9/2019 Project [Vishwa]

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HDFC STANDERD LIFE INSURANCE

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1.1 INDUSTRY PROFILE

BRIEF HISTORY OF INSURANCE IN INDIA

Life insurance activity in its modern form started in India in 1818 to provide insurance for the

European soldiers and civilians to benefit their families. The first Indian Life insurancecompany, the Bombay Mutual Life assurance society started its business in 1870. This was the

first company, which charged same amount of premium on both Indian and Non-Indian lives.

Earlier native Indian lives were considered more risky and hence were charged more premiums

for coverage. Foreign insurance companies dominated insurance business in India and enjoyed

monopoly right up to the end of nineteenth century.

Insurance regulation formally began in India through the passing of two acts, the life Insurance

companies act of 1912 and the provident act 1912, the first legislation was introduced with the

insurance act of 1938 that provided strict state control over insurance business in the country.

This provided an effective cheek on the large-scale frauds that sullied insurance business during

the 1930`s.

In the 1940s, there were more than 220 Insurance companies in India. There was no control over

the starting and closing of insurance companies. Customer`s money was on stake. After

independence, the business of insurance grew at a faster pace as the competition among the

Indian companies intensified. At this juncture, the government of India decided to merge all the

insurance companies. In the year 1956, the merger and nationalization of all existing life

insurance companies were done which resulted in giving birth to the life insurance corporation of

India (LIC). Closed to foreign competition, the Indian insurance industry was run by the


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government for over 40 years through LIC and four general insurance companies that spanned

the length and breadth of the country. LIC enjoyed a monopoly for more than four decades.

GLOBEL MARKET PENETRATION

Penetration of life insurance is beginning to cut across socio-economic classes and

attract people who have never purchased insurance before. With the heightened

awareness and the consumer education comes a willingness to view life insurance

as an integral part of the financial portfolio. No longer is the life insurance a poorly

understood product that is pushed onto people. Nor is it a product that is only to be

bought hurriedly at the time of filling taxes. It`s now catching on as an important

element of the overall financial basket one that is purchased to fulfill specific

rational and emotional needs. Not only there has been a charge in the structure and

nature of the products, but also in the way they are sold.

INSURANCE PENETRATION ACROSS THE NATION:

From being a purely advisor driven business, the sector has seen the emergence

of a number of channels including bank assurance, corporate agents, brokers and

direct marketing. These channels, though new, are quickly gaining importance

primarily because they present the customer with multiple ways of approaching life

insurers. There has been a vast improvement in service attitude and delivery too.

As with privatization in any industry, the benefits aren`t restricted to the customer

alone, but extend to the society at large, by generating employment opportunities

for thousands.


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Over the past two years, insurance companies; both life and non life insurance

have collectively hired at least 6,000 employees to staff their operation across the

country, another 90,000- odd have been appointed as life insurance advisors who

are engaged in counseling and recommending products to the insurance buyers.

The potential for the growth and spread of life insurance is high as in many other

Asian countries. This is due to stronger economic growth, rapid aging of

population, a weak social security and pension system leaves a majority of workers

with no old age income security. A well-developed insurance sector promotes

economic growth by encouraging risk-taking activity, and also has great potential

in mobilizing long-term contractual savings and the rest is crucially needed for

infrastructure development.

INSURANCE DENSITY ACROSS THE NATIONS

The global insurance market stands at 1521.2 billion US dollar and India stands

23rd

position with 9.93 billion US dollar. Out of the 1 billion populations in India

35 millions are insured. India`s life insurance premium as percentage of GDP is

2.32%. The Indian insurance market is set to touch 25 billion US dollar by 2010.

On the assumption of 7% growth in GDP. The role of life insurance is a crucial

one for the development of our country. Life insurance companies have to invest

75% of its revenue in the government specified securities like electricity boards,

housing schemes, water supply and sewage projects, development of road and

transport, industrial development schemes etc.


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INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY

Reforms in the insurance sector were initiated with the passage of the IRDA bill in

parliament in December 1999. The IRDA since its incorporation as a statutory

body in April 2000 has fastidiously stuck to its schedule of framing regulation and

registering the private sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to theinsurance sector and in particular to the life insurance companies was the launch of

the IRDA`s online service for issue and renewal of licenses to agents .

The approval of institutions for imparting training to agents has also ensured that

the insurance companies would have a trained workforce of insurance agents in

place to sell their products, which are expected to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a

framework of globally compatible regulations. In the private sector 14 life

insurance and 6 general insurance companies have been registered.

MISSION OF INSURANCE SECTOR;-


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To protect the interest of the policyholders, to regulate,

promote and ensure orderly growth of the insurance

industry and for matters connected therewith or incidental

thereto.

DUTIES, POWERS AND FUNCTIONS OF IRDA

1. Adjudication of disputes between insurers and intermediaries or insurance

intermediaries.

2. Promoting and regulation professional organizations connected with insurance

and re-insurance business.

3. Specifying requisite qualifications, code of conduct and practical training for

intermediary or insurance intermediaries and agents.

4. Promoting efficiency in the conduct of insurance business

5. Regulation investment of funds by insurance companies

6. Issue the applicant a certificate of registration, renew, modify, withdraw,

suspend or cancel such registration.


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T1; PRIVATE LIFE INSURANCE PLAYERS IN INDIA

REG NO. DATE OF

REG.

NAME OF THE COMPANY

101 23.10.2000 HDFC Standard life insurance company ltd.

104 15.11.2000 Max New York Life insurance company ltd.

105 24.11.2000 ICICI Prudential life insurance company lt6d.

107 10.01.2001 Om Kotak Mahindra life insurance company ltd.

109 31.01.2001 Birla Sun life insurance company ltd.

110 12.02.2001 Tata AIG life insurance company ltd.

111 30.03.2001 SBI life insurance company ltd.

114 02.08.2001 ING Vysya life insurance company private ltd.


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116 03.08.2001 Alianz Bajaj life insurance company ltd.

117 06.08.2001 MetLife India insurance company pvt ltd.

122 14.05.2002 Aviva life insurance Co. India pvt ltd.

127 06.02.2004 Sahara India insurance company ltd

128 17.11.2005 Shriram life insurance company ltd.

SOME OF THE IMPORTANT MILESTONES IN THE LIFE

INSURANCE BUSINESS IN India are;

1818: Oriental life insurance company, the first insurance company on Indian

soil started functioning.

1870: Bombay Mutual life assurance society, the first Indian life insurance

company started its business.


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1912: The Indian insurance companies Act enacted as the first Statute to regulate

the life insurance business.

1928: The Indian insurance companies Act enacted to enable the government to

collect statistical information about both life and non life insurance business.

1938: Earlier legislation consolidated and amended to by the insurance Act with

the objective of protecting the interest of the insuring public.

1956: 245 Indian and foreign insurance and provident fund societies take over the

central Govt and nationalized. LIC formed by an Act of Parliament, viz, LIC Act,

1956, with a capital contribution of Rs. 5crore from the Govt of India.

INSURANCE


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Definitions

General Insurance:

A contract in which one party agrees to pay for another parts

financial loss resulting from a specific event (for example, a collision, theft, or

storm damage). Lease agreement generally requires that you maintain vehicle

collision and property damage.

Life insurance:

A system of protection against loss in which a number of individuals

agree to pay certain sums of money, called premiums, to create a pool of money

which will guarantee that individual will be compensated for losses caused by

events such as fire, accident, illness, or death.

Benefits of Insurance: Insurance is the instrument of security, savings and

peace of mind. It Provides several benefits by paying a small amount of premium

to an insurance company as:-

1. Safeguard oneself and ones family for future requirements.2. Peace of mind-in-case of financial loss.3. Tax rebate.4. Protection from the claim by creditors.5. Security against a personal loan or other type of loan.6. Provide a protection cover to industries, agriculture, women and child.7. Provide good returns on investments.


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Private players in the Life insurance industry, which has tied up with various

foreign companies:-

ICICI Prudential ICICI Bank Prudential, UK

Birla Sun Life Aditya Birla Group Sun life, Cananda

Allianz Bajaj Bajai Auto Allianz, Germany

SBI Life SBI Bank Cordiff, France

HDFC Standard Life HDFC Bank Standard Life, UK

TATA-AIG Life TATA Group AIG, US

Max New York Life. Max India New York Life,

US

Aviva Life DABUR Aviva, UK

Kotak Mahindra Life KOTAK Mahindra

Bank

Old Mutual, S.A

ING Vysya Life Vysya Bank ING, Netherlands

Reliance Life Reliance Group None

Metlife India J & K Bank Met life, US

Sahara Life Sahara India None


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COMPANY PROFILE

HDFCS Standard Life Insurance Company Ltd. is one of Indias leading

Private insurance companies, which offers a range of individual and group

insurance solutions, it is a joint venture between Housing Development Finance

Corporation Limited (HDFC Ltd.), and Indias leading housing finance institutionand a Group Company of the Standard Life, UK. HDFC as on March 31, 2007

holds 81.9 Per cent of equity in the joint venture

Our Key strengths

Financial Expertise

As a joint venture of leading financial Services groups, HDFC Standard Life

has the financial expertise required to manager your long-term investments safely

and efficiently.

Range of solutions

We have a range of individual and group solutions, which can be easily

customized to specific needs. Our group solutions have been designed to offer you

complete flexibility combined with a low charging structure

Track Record so far


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Our Gross Premium income, for the year ending March 31, 2008 stood at

Rs. 2, 856 crores and new business premium income at Rs. 1,624 crores.

The company has covered over 8, 77,000 lives year ending March 31, 2008.

HDFC PROFILE

HDFC was incorporated in 1977 with the primary objective of meeting a

social need that of promoting home ownership by providing long-term finance tohouseholds for their housing needs, HDFC was promoted with promoted with an

initial share capital of Rs. Million.

Business Objectives

The primary objective of HDFC is to enhance residential housing stock in

the country through the provision of housing finance in a systematic and

professional manner, and to promote home ownership another objective is to

increase the flow of resources to the housing sector by integrating the housing

finance sector with the overall domestic financial markets.

Organizational Goals

HDFCs main goals are to

1. Develop close relationships with individual households,2. Maintain its position as the premier housing finance institution in the

country.


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3. Transform ideas into viable and creative solutions,4. Provide consistently high returns to shareholders,5. We to grow through diversification by leveraging off the existing

client base

STANDARD LIFE HISTORY

The Standard Life Assurance Company (Standard Life) was

established in 1825 and the first Standard Life Assurance Company Act was

passed by parliament in 1832. Standard Life was reincorporated as a mutual

assurance company in 1925.

The Standard Life group originally operated only through branches or agencies of

the mutual company in the United Kingdom and certain other countries.

Its Canadian branch was founded in 1833 and its Irish operations in 1838. This

largely remained the structure of the group until 1996, when it opened a branch in

Frankfurt, Germany with the aim of exporting its UK Life assurance and pensions

operating model to capitalize on the opportunities presented by EC Directive

92/96/EEC (the Third Life Directive) and offer a product range in that market

with features which local provides were unable to offer.

In the 1990s, the group also sought to diversify its operations into areas,

which complemented its core life assurance and pensions business, which the

intention of positioning itself as a broad range financial services provider.


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Standard Life Asia Limited / joint ventures:-

Economic Development Area General Company (TEDA) became

operational in 2003. The groups Hong Kong subsidiary, Standard Life Asia

Limited (SL Asia), was incorporated in 1999 as a joint venture and became a

wholly owned subsidiary of Standard Life in 2002, The groups operations in

Hong Kong were established to give the group a presence in the far East from

which it could expand into China. The groups joint ventures in India which

Housing Development Finance Corporation Limited(HDFC) Were Incorporated

in 2000(in relation to the life assurance and pensions joint venture) and 2003 (in

relation to the investment management joint venture). The groups joint venture in

China with Tianjin

Our vision:

The most successful and admired life insurance company, which means that

we are the most trusted company, the easiest to deal with, offer the best value for

money, and set the standards in the industry. The most obvious choice for all.

Our Values:

Values that we observe while we work:

Integrity

Innovation

Customer centric


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Team work

Joy and Simplicity, People Care One for all and all for one

GROUP COMPANIES

Housing Development Finance Corporation

HDFC Bank

HDFC Mutual Funds

HDFC Securities

HDFC Chubb General insurance company Limited

Board of Directors

y MR Deepak S Parekh Chairmany MR Deepak M Satwalekar MD&CEOy MR Keki M Mistryy

MR Ravi Narainy MR G.N. Bajpaiy MR Alexander M Crombiey MR Gautam R Divan


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y MR Ranjan Panty MRS Marcia Dominic Campbelly MR Keith Norman Skeoch

PROFILE OF THE PRODUCTS

Life insurance is a contract between a person and an insurance company by

which that person pays in a certain agreed-upon amount regularly (usually

monthly) so that upon that persons death, his or her family or other beneficiary

will receive a large lump sum payment and thereafter replaces the loss of income

or pension benefit caused by the death of the policy-holder.

Benefits :-

1. Protection to the family: Helps maintain lifestyle even in the absence ofits earning member.

2. Savings: Life Insurance facilitates financial planning.3. Security: Takes care of loans and debts in the event of the death of the

earning member.

4. Establish an emergency fund for the family to meet unexpected expenses.5. Retirement Benefits.6. Also Tax savings.Different life insurance polities may very by frequency and amount of

payments (some policies have a fixed payment amount that never changes; others

will increase on a regular basis), term of coverage, and the amount and method of


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final payment to the beneficiary. The following are the products offered by HDFC

standard life.

y Savings plansy Protection plansy Retirement plansy Child plansy Investment plans

HDFC Unit Linked Young Star

The HDFC Unit Linked Young Star gives you:

1. Access to your accumulated fund before maturity2. An outstanding investment opportunity by providing a choice of

thoroughly researched and selected investments

3. Valuable protection to your child in case you are not around4. Flexible benefit combinations and payment options Valuable protection

to your child in case you are not around

Your can choose your premium and the investment fund or funds. We will

then invest your premium, net of premium allocation charges in your chosen funds

in the proportion you specify. At the end of the policy term, you will receive the

accumulated value of your funds.

In case of your unfortunate demise during the policy term


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y Pay the Sum Assured you had chosen to your childy Continue your policy AND continue to pay the original regular

premiums you had chosen.

Benefits

Life :- Speaks about death immediately, sum assured is paid & all remaining

premium are paid by insurance company and at the time of maturity fund value is

given.

Life & health :-Speaks about death immediately & Critical illness which ever is

earlier, sum assured is paid & all remaining premium are paid by insurance

company and at the time of maturity fund value is given. Critical illness include

stork, heart, organ transplant, cancer, kidney failure, and coronary artery bypass

surgery.

Note 1: the beneficiary (child) is the sole person to receive the benefit under the

policy. Where the beneficiary is less than 18 years of age, the benefit will be paid

to the Appointee.

Note 2: there is no nomination facility

Premium allocation charges

:KS First Year Second year onwards

.99 60% 1%

.99 40% 1%

.99 30% 1%


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19.99 20% 1%

10% 1%

HDFC Unit Linked Young Star Plus

The HDFC Unit Linked Young Star plus gives you:

1. Access to your accumulated fund before maturity2. An outstanding investment opportunity by providing a choice of

thoroughly researched and selected investments

3. Valuable protection to your child in case you are not around4. Flexible benefit combinations and payment options Valuable protection

to your child in case you are not around

You can choose your premium and the investment fund or funds. We will

then invest your premium, net of premium allocation charge sin your chosen funds

in the proportion you specify. At the end of the policy term, you will receive the


In case of your unfortunate demise during the policy term

Pay the Sum Assured you had chosen to your child

Continue your policy AND continue to pay the original regular premiums

you had chosen.


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Benefits

Life:- Speaks about death immediately, sum assured is paid & all remaining

premium are paid by insurance company and at the time of maturity fund value is

given.

Life & health:-

Speaks about death immediately & Critical illness which ever isearlier, sum assured is paid & all remaining premium are paid by insurance

company and at the time of maturity fund value is given. Critical illness includes

stork, heart, organ transplant, cancer, kidney failure, and coronary artery bypass

surgery.

Note 1: The beneficiary (child) is the sole person to receive the benefit under the

policy. Where the beneficiary is less than 18 years of age, the benefit will be paid

to the appointee.

Note 2: there is no nomination facility

Premium allocation charges

KS First Year Second year onwards

.99 30% 1%

.99 20% 1%

.99 150% 1%

19.99 10% 1%


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5% 1%

Additional Benefit: it given 0.1% of loyalty bonus every year.

UNIT LINKED ENDOWMENT

The HDFC unit Linked Endowment Plan gives you:-

1. An outstanding investment opportunity by providing a choice ofthoroughly researched and selected investments.

2. Valuable protection to your family in case you are not around3. Flexible benefit combinations and payment options4. Flexible additional benefit options such as critical illness cover5. Access to your accumulated fund before maturityYou cans choose your premium and the investment fund of funds. We will


in the proportion you specify. At the end of the policy term you will receive the


In case of your unfortunate demise during the policy term:

We will pay the greater of your Sum Assured (less any withdrawals you have made

in the two years before your claim) and your total fund value to your family.


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Benefits

Life

Life & health

Extra Life option

Extra Life & Health Option

Beneficiaries:

You will receive the benefits due on maturity due on maturity at the end of the

policy term. In the event of your unfortunate demise, your nominee will receive the

benefits due. Nomination facilities are available.

Charges:

Policy administration charges: Rs. 20 per month.

Fund manager charges; 0.8% per annum charge on daily basis.

Mortality charges: depends on age, features (on monthly basis).

Surrender charges are 3% of 2years of o/s premium.

Additional Benefit: It gives 0.1%of 2yours of o/s premium.


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HDFC UNIT LINKED PENSION

The HDFC unit Linked Pension gives you:


2.

A post retirement income for life.3. Flexibility to plan your retirement date4. Freedom to invest premiums as per your preferenceYou cans choose your premium and the investment fund of funds. We will



accumulated value of your funds, which will be used to provide your pension

income.

In the event of your unfortunate demise during the policy term:

Your spouse will receive a cash lump sum to help him or her manage the

retirement years


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Benefits

On retirements

You will get the value of the units in your policy.

Your can take up to 1/3 of your fund value as a tax-free cash lump sum and the rest

must be converted in to annuity

You can buy the annuity from us or any other insurer.

On death:

Unfortunate death your nominee will receive the unit fund value. Policy terminates

there after.

Charges:

Policy administration charges: Rs. 20 per month.

Fund manager charges; 0.8% per annum charge on daily basis.

Revival charge: A charge of Rs. 250 is charged for revival to cover for

administrative expenses


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Miscellaneous charges: This is a charge levied for any alterations with in the

contract like premium redirection for any alterations with in the contract like

premium reduction or ad-hoc policy servicing. 12 premium reduction requests will

be free in a policy year and any additional 12 premium reductions will be charged

Rs. 250 per request.

HDFC UNIT LINKED PENSION PLUS

The HDFC unit Linked Pension plus you:


2. A post retirement income for life.3. Flexibility to plan your retirement date4. Freedom to invest premiums as per your preferenceYou cans choose your premium and the investment fund of funds. We will



accumulated value of your funds, which will be used to provide your pension

income.

In the event of your unfortunate demise during the policy term:

Your spouse will receive a cash lump sum to help him or her manage the

retirement years.


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Benefits

On retirements :- You will get the value of the units in your policy.

Your can take up to 1/3 of your fund value as a tax-free cash lump sum and the rest

must be converted in to annuity

You can buy the annuity from us or any other insurer.

On death: - Unfortunate death your nominee will receive the unit fund value.

Policy terminates there after.

Charges:

Policy administration charges :- Rs. 20 per month.

Fund manager charges :- 0.8% per annum charge on daily basis.

Revival charge:- A charge of Rs. 250 is charged for revival to cover for

administrative expenses

Miscellaneous charges: This is a charge levied for any alterations with in the

contract like premium redirection for any alterations with in the contract like

premium reduction or ad-hoc policy servicing. 12 premium reduction requests will


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be free in a policy year and any additional 12 premium reductions will be charged

Rs. 250 per request.

Additional benefit:

At the end of every policy year we will increase the number of units in each of

your funds by 0.10% as long as your policy is in force or paid-up.

The compounding effect of this regular addition is expected to boost your final

vesting benefits.

AREA OF OPERATION:-

The area of operation was national since origin, but in the year 2000 the

company has a joint venture with standard life UK and entered Global market. So

the area of operation of the company is global since 2000.

OWNERSHIP PATTERN:- HDFC STANDARD LIFE INSURANCE is having

a joint venture with Standard life UK. It was registered on 23.10.2000 & while

registration it took the joint venture with standard life.

COMPETITORS:-

New York Life Insurance Company Ltd

ICICI Prudential Life Insurance Company Ltd

Kotak Mahindra Life Insurance Company Ltd

Sun Life Insurance Company Ltd.


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Tata AIG Life Insurance Company Ltd

Life Insurance Company Ltd

ING Vysya Life Insurance Company Private Ltd

Bajaj Life Insurance Company Pvt. Ltd

Life India Insurance Company Pvt. Ltd

SANMAR Assurance Company Pvt. Ltd


SAHARA India Insurance Company Ltd


INFRASTRUCTURE FACILITIES:-

It covers over 693 cities & towns through its offices in India with over

79000 financial consultants by company. HDFC also has 833 corporate agents and

other sales intermediaries including banks for distribution of insurance products.

The company has a tied agency and an alternate channel. Tied agency mainly deals

with getting business and recruiting the life advisors, alternate channel. Tied

agency mainly deals with getting business and recruiting the life advisors, alternate

channel members are considered as the channel partners and they deal with mutual

funds. In the tied agency as well as alternate channel, each employee is provided


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with a computer to perform their operations and a telephone connection is given as

they have to follow up their clients and telephones are very essential to make feel

calling.

Each branch is provided with a seminar room, a branch manager room,

regional manager room, cash counter for premium receipts and many other safety

and welfare facilities to make employees feel free to perform their work.

AWARDS AND ACCOLADES:-

y Company of the Year for the seventh successive year (MoneyMarketing Awards)

y Best Pension Provider (2004 and 2005 Money Marketing Awards)y Best Pension Product (2003 2005 Money facts Investment, Life &

Pension Awards)

y Group Pensions Provider of the Year (Financial Adviser Life andPension Award 2004).

GROWTH & PROSPECTS:-


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The company is performing well at present. It has increased sales by 65% to

euro 70m (2006:euro42m) of which standard life share was euro 12m

(2006:euro11m). There was an increase of 57.9% growth during the year (2007-

2008). It also has the present share of 2.15%. As the HDFC is in various domains

of finance like Banking, Life insurance, Personal loan, Home loan, Mutual

Funds, Securities, and General insurance.

Mc Kinsley 7s Model:

Mc Kinsley model is familiarly known as 7s model. Two persons namely, Tom

peter and Robert Waterman developed it. They have been consultants at Mc

Kinsley & co. at that time, they published their 7s model in their article structure

is not organization (1980) and in their books the art of Japanese management

(1981) and in search of excellence (1982)

The model is based on concept that an organization is not just structure, but

consists of seven elements.


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The Mc Kinsley 7s model is widely discussed framework for viewing the

interrelationship of strategy formulation and implementation. It helps to focus

managers attention on the importance of linking the chosen strategy to a variety of

activities that can affect the implementation of that strategy.

STRUCTURE:

The structure of the organization basically a network of authority and

responsibility, which has been assumed and delegated to the employees.


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Organization structure defines the pattern of formal relationship of superiors and

subordinates. It may be regarded as network of role, relationship, assigned work

and delegated authority of employees. It provides the basic which the managers

and non-managerial employees perform the job assigned to them.

Organization & Management

HDFC is professionally managed organization with a board of directors consistingof eminent persons who represent various fields including finance, taxation,

construction and urban policy & development. The board primarily focuses on

strategy formulation, policy and control, designed to deliver increasing value to

shareholders.

Board of Directors

y MR Deepak S Parekh Chairmany MR Deepak M Satwalekar MD&CEOy MR Keki M Mistryy MR Ravi Narainy MR G.N. Bajpaiy MR Alexander M Crombiey MR Gautam R Divany MR Ranjan Pant


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y MRS Marcia Dominic Campbelly MR Keith Norman Skeoch

Departments:

HDFC SLIC strongly believes that the structure of an organization needs to be

dynamic, constantly evolving and responsive to changes both in the external and

internal environments.

The organizational structure is designed to support the business objectives, and isflexible while at the same time ensuring effective control and supervision and

consistency in standards across business groups.

HDFC SLIC organization structure is flexible enough to counter balance of the

external and internal environment. This will help in the smooth functioning of the

company.

There are ten boards of directors who decide on & have the authority to take

decision. And in the next level the managing director who controls over finance,

marketing, IT, sales HR departments who comes under the top management.

Zonal officer, branch manager, territory manager, sales manager, all comes under

middle level management.

Assistant sales manager, agency manager, unit manager, assistant unit manager and

advisers comes lower level management.

Functional Departments:


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y Finance departmentsy Marketing departmentsy Information departmentsy Sales departments

Motivating & involving every one in the organization for active participation

towards continuous improvement in its activities.

SKILLS:

TRAINING:

According to Dale S. Beach Training is organized procedure by which

people learn knowledge and skill for a definite purpose.

Thus training is a short-term education al process and utilizing a systematic

and organized procedure by which employees learn technical skill and

knowledge for a specific purpose.

Experienced and knowledgeable professionals of the company as well as

great achievers of the industry conduct more frequent training programs at

HDFC SLIC.


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Need for training:

Every organization big or small, productive or non-productive, economic

or social, old or newly established should provide training to all employees

irrespective of their qualification, skill, suitability, for job etc.

HDFC SLIC is keen in developing competent work force by conducting

ongoing training programs.

Specifically, the need for training arises due to the following reasons:

y To match the employee specification with the job requirement andorganizational needs.

y Organizational viability and the transformation process due to changes ininsurance industry,

y Technological advances.y Organizational complexity due to diversified services change in job

assignment, etc.


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STYLE:-

Style of management comprise of employees shard and common way of thinking

and individuals creative and innovative approaches to their work that can be

segregated into two significant components.

y Organizational culture: the dominant values and beliefs, and norms, whichdevelop over time and become relatively enduring features of organizational

life.

Management style: more a matter of what managers do than what they say, how do

companies managers spend their time? What are they focusing attention on?

An HDFC the leadership style followed is democratic group effect.

Here all employees play an active part in giving suggestion for decision making.

All major decisions is taken in the branch concerned. Managing director & DGM

of the concerned department take the major decisions.

STRATEGY:-

The strategy is concerned with the direction in which various resources of

organization will be mobilized and utilized for maximizing the chance of

accomplishing specific objectives. It may be concerned as an action plan, initiativeor response of the organization foe seeking achievement of the objectives in

specific situation. Strategy is unified, comprehensive and integrated action plan

designed to achieve specific objectives.


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Now we shall look in to the strategy of the bank studying the TECHNOLOGY

IMPLEMENTATION In its branches.

The technology implementation will be looked after by department of information

technology, it will follow the following procedure in procuring and implementing

necessary software and hardware in installing core banking solution in its

branches.

1.Policy and planning IT activities.First step in any new technology implementation will be planning the things

which are essential while implementing the technology as such, accordingly

vijaya Bank has planned systematically on how to implement the core Banking

solution (CBS). In the beginning the Board of Directors(BOD)will take decision

on information technology implementation in its branches. In the later stages

rest of the procedure will looked after by department of information technology

(DIT). It will prepare the plans on following factors which are very essential for

implementing the technology:

y Procurement of hardware and softwarey Training to employees on how to operate the softwarey Deployment of trained employeesy Recruitment and placement of IT staffy Evaluation of project plans of technology and implementation

2.Procurement policy:


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The second step in implementing technology in its branches is

procurement policy. In this step the DIT will find the ways to procure the

Hardware and Software at a minimum cost. It follows centralized

procurement policy, wherein the Head Office procures the necessary

Hardware and Software. DIT will do the following works in the step:

y Centralized procurementy Procurement of Hardware and Softwarey Tendering process

All the material will be procured through a systematic tendering

process. When any supplier willing to supply the necessary material in

the tendering process, his offer will be measured by two parameters; they

are

y Technical EvaluationHis materials must be in complying with Banks requirement.

Banks officials will visit the warehouse of supplier and evaluate the

product whether it satisfy the Banks requirement or not.

y Price evaluationBanks officials also evaluate the prices of the respective materials.

y Supply and delivery of materialy Inspection in case of Hardware

3.Implementation :After buying necessary Hardware and Software from suppliers, the DIT

officials visit the necessary branches and install the Hardware and Software.


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When the branch is computerized the DIT officials train all the employees in

respective branch.

For the purpose of computerization and training the Bank has created two teams

called core Banking solution team and Net-work team. These teams consists the

DIT employees and their work is to look after the successful installation of

computers in the branches.

4.Inspection and EvaluationIt is like follow-up of what has been done. This work will be done by the

CBS team and Net-work team. There are problem occurs these teams will set right

the problem .

SYSTEM:-

The System contains certain rules and regulation and requires all the work

to be done accordingly. Planning and development department is an integaral part

of any system. In HDFC SLIC also P&D department performs various functions

such as Branch expansion, corporate planning, Management Information, and

Economic Research, now for the purpose of understanding how it works on above

function, we will study BRANCH EXPANSION function.

In the first step Banks officials goes to the area where it is planning to set up

branch. It conducts necessary surveys to find out the potentials of that particular


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place and evaluates the competition in that place. Officials also project the deposit

and advances it can mobilize and lend there.

Next step is obtaining permission from RBI. Permission for opening new

branch is mandatory for all banks. All banks have to fulfill the stringent rules laid

down by RBI for setting up new branch.

When permission obtained from RBI, the Bank has to plan for procuring

necessary buildings, HR and furniture for opening branch.

STAFF:

According to waterman and his colleagues the term staff refers to the way

organization introduces young recruits into the main stream of their activities and

the manner in which they manage their careers as the new develop into future

managers.

HDFC SLIC CO LTD has a well established system of recruiting graduates

from well known technical and management institution and providing them with

on

The job training in a number of functional areas before deciding on the final

placement in consultation with person concerned. Recruitment is done through

consultancy services, tele-recruitment or through advertisement. Generally

advertisement are given only for the high posts & that too after consultation with

the unit head skills refer to the ability to perform certain task based on companys


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strategy. Skills implemented at HDFC SLIC have been classified into three levels.

They are:

1. Strategic level:Strategic level requires more conceptual skills, experience, and

decision making ability.

2. Managerial level:Managerial level requires managerial skill, problem solving

capacity

3. Operational level:Operational level requires more technical skill, operational

knowledge training and development programs ensure people to know

how to do their jobs and stay up to date with latest techniques. HDFC

SLIC organizes series of training and development programs to

improve the skills of the employees. Executives are also required to

have very strong verbal and written communication skills and

especially dealer point service skills, as most of the time they will

need to communicate effectively with clients.

Managers also need to be skilled in multi tasking, efficient planning

and implementing of projects, like wise be good in time keeping and

managing staff.

And more essentially have a pleasing temperament, which is

important in the servicing industry, to improve the efficiency of


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The shared values considered by HDFC SLIC are customer first, boundary

standard.

a) Customer first:Own the customer, deliver the promise.

y Keep customer interest in the center of all decisions.y Promise what you can, deliver it to.y Proactively seek of customer and act on it.

b)Boundary less:Never say its not my job

y Offer help and support across function to ensure business success.y Seek and share ideas freely.y Recognize and respect internal customers.y Understand and value contribution from colleagues.

c)Ownership:If is it be, it is up to me

y Take responsibility and see tasks to completion.y Own mistakes, learn from failures.y Pursue goals relentlessly, never give up.y Be a team player, take ownership for team performance.

d)Passion:Boundless energy and enthusiasm


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y Exhibit winningy Demonstrate speed and urgency for achieving results.y Challenge status quo and do things differently.y Motivate lease members to reach full potential.

e)Integrity:Be honest and fair in what you say and do

y Practice what you preach.y Stand up honestly & fearlessly for what is right.y Act in a consistent & equitable manner.

STRENGTHS WEAKNESS OPPORTUNITIES AND THREATS ANALYSIS

STRENGTHS :-

y Advanced Technology :Technology plays a vital role in todays banking and insurance sector to be

very fast and accurate and in the process meet its day-to-day operations at a

lighting pace and tremendous accuracy. HDFC STANDARD LIFE is using

advanced technology to satisfy the customers in a large way.

y Commanding market share :-HDFC enjoys a commanding market share of around 15% in the private

insurance sector where other insurance companies are fighting a battle to get theirmarket share into double figures.

y Providing innovative products and services :-


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To attract new customers and retain old customers HDFC has range of

products tailor made for everyones requirements ranging from investment plans to

child plans to retirement solutions. An array of products that cannot be found in

the shelf of any other life insurance company.

y High quality infrastructure :-HDFC perhaps has got the best infrastructure support both for its employees

and the advisors. They made huge investments in IT to make the company techno

savvy and competitive.

y Premium rates are increasing and so are commissions.y The variety of products is increasing.y Prospects expect more services from their brokers.y Huge pool of skilled professionals

WEAKNESSES:-

y Absent in the rural market :-HDFC has not catered into the rural market where there are tremendous

opportunities for the companys products provided they develop some innovative

products for the rural markets.

y Lack of Band image in rural areas :-The company is well known in urban areas due the promotions undertaken

in the city but HDFC does not have the brand recognition of an LIC in the rural

area. So HDFC has to undertake promotional activities to generate interest among

the rural folks if it intends to have substantial market share.

y Too many subsidiaries :-


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HDFC group has many subsidiary products like General insurance. Mutual

funds, Securities, Retail banking etc.

y Premium is high :-The company fixed the minimum premium that difficult to pay for low-

income class people.

y Insurance companies are often slow to respond to changing needs.y There is an increasing trend of financial weakness among the companies.y There are more competitors for agencies to compete with banks and Internet

players.

OPPORTUNITIES :-

y Every growing population :-As the population of our country is increasing the steadily the demand for

the insurance and other financial products are increasing simultaneously as there

are more people with a variety of needs.

y Expand more branches :-As the awareness increase in people about insurance. There is need to

expand more branches.

y More growth for few products :-Increase in population in particular area. There is large growth in Retirement

solution and Health products.

y The ability to cross sell financial services is barely being tapped.


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y Technology is improving to the point that paperless transactions areavailable.

THREATS :-

y Cut throat competition :-HDFC is given a tough run for its money due to the competition from other

private insurance companies like ICICIPRU, Bajaj Allianz and Birla Sun Life

insurance companies.

y Nonexistent in the rural market :-y Arrival of more insurance companies in India.y The increasing cost and need for insurance might hit a point

where a backlash will occur.

y Government regulations on issues like health care, mold andterrorism can quickly change the direction of insurance.

y Increasing expenses and lower profit margins will hit hard on thesmaller agencies and insurance companies.


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y Increasing expenses and lower profit margins will hit hard on thesmaller agencies and insurance companies.

y Human Resource Challenges.


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Annexure

QUESTIONNAIRE

I am Manohara.B. student of MBA, Nitte Meenakshi Institute Of

Technology, have undertaken a summer project regarding the topic CUSTOMER

perception towards insurance products of HDFC standard life insurance of HDFC

Standard life insurance I need your feedback for some of the questions.

Name:

Address:

1) Age :a) Below 30 Years b) 30 40 years

c) 40 50 years d) 50 & above

2) Are youa) Salaried b) Self Employed

3) What is your income every month?a) Less than Rs. 10,000 b)Rs. 10,000 Rs. 15,000

c) Rs. 15,000 Rs. 20,000 d) above Rs. 20,000

4) Do you know about Insurance?Yes No

If yes, the type of insurance

a) Life Insurance Yes No

b) General Insurance Yes No

5) Do you think insurance is necessary for your life?A) Yes b) No


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6) If yes, Why?

-----------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------

7) Rate the following Insurance Company?

[Put to most preferred and 4 for least preferred]

a) LIC [ ] b) HDFC Standard Life Insurance [ ]

c) ICICI Prudential [ ] d) Bajaj Alliance [ ]

8) What is the benefit of securing yourself in insurance company?

{Rank them accordingly}

a) Safe and secure [ ] b) High returns [ ]

c) Death Benefits [ [ d) Tax Benefits [ ]

9) What is the % of investment in Life Insurance out of total savings?

a) Below 10% b) 10 to 20%

c) 20 30% d) 30% to 40%

10) Which insurance company do you prefer most?

{Put 1 to most preferred and 4 for least preferred}

a) LIC [ ] b) ICICI Prudential [ ]

c) Bajaj Alliance [ ] d) HDFC Standard Life Insurance [ ]

11) Which company is accessible for you?


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{Give 1 to most accessible and 5 to least accessible}

a) LIC [ ] b) HDFC Standard Life Insurance [ ]

c) Bajaj Alliance [ ] d) ICICI Prudential [ ] e)

Others [ ]

12) Which of standard life plans do you prefer most?

{Give 1 to most accessible and 4 to least accessible}

a) Protection plans [ ] b) Investment Plans [ ]

c) Saving Plans [ ] d) Pension Plans [ ]

13) Which plans to you prefer most?

a) Traditional Plan b) Unit Liked plan

14) In Unit linked plans, which plan is most preferable by you?

a) Freedom plan b) High life plan

c) New future perfect plan

15) In savings plan, which plan is most preferable by you?

a) Reassuring Life Plan b) Creative Plan c) Freedom plan

d) High life plan e) Endowment plan

16) How do you feel about the service of HDFC Standard Life Insurance

Company?


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a) Good b) Satisfactory

c) Average d) poor

17) Give your suggestions about HDFC Standard Life insurance Company?

Thank you for your kind cooperation

Date: Signature


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2. Design of the Study

2.1 Title of the Project:-

A study on Customer perception towards insurance products of HDFC

standard life insurance

2.2 Statement of the Problem:-

The title of the research is Customer perception towards insurance products

of HDFC Standard life Insurance

2.3 Objectives of the Study:-

The main aim of the present study is to accomplish the following objectives:

y To know the customers perception towards HDFC insuranceproducts:

y To identify insurance needs of the customer.


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y To know customer expectations with respect to the HDFC insuranceproducts.

y To study the preference of customers on different insurance productsHDFC.

2.4 SCOPE OF STUDY:

The study is confined only to insurance investors who invested in various

insurance companies with special reference to HDFC Standard life insurance

Bangalore.

RESEARCH METHODOLOGY

Research is a systematic and formalized process it follows a certain sequence of

actions. A Systematic research methodology is followed to complete the study the

steps through which the research is undergone are

Date resources:- The data required for the research can be either primary data or

secondary data or both. Primary data is the first hand information that is freshlygathered by surveying the samples selected. Secondary data is the collected from

companys internal and external resources like company website, magazines, etc.


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Sample size: - Different people were randomly selected from different areas in

Bangalore were selected for survey. The sample size was 150.

Sampling procedure: - It is the technique in which we selected the sample. The

non-probability sampling method the approaches for survey under which I have

selected the samples as per my convenience.

Contact methods: - The selection of the method is used for the present study

under which the respondents are contacted personally and filled the Questionnaire

through them.

Collect the Information:- The required data is collected through the respondents

i.e. the need of life insurance and the opinion regarding private sector.

The community is adult day care centers, in alternate living facilities or in

nursing happens to be a mega opportunity in India. Its a business growth at rate of

15-20% annually and presently is of the order of rs450 billion. Together with

banking services, it adds about 7% to the countrys GDP. Gross premium

collection is nearly 2% GDP and funds available with LIC for investing are 8% of

GDP.

Life insurance can ensure that, should the worst happen, your dependents

and any outstanding debts are taken care of

The government of India in 1956 brought together over 240 private life

insurance and provident societies under one nationalized monopoly corporation


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y Accuracy of findings is not exactly the opinion of whole Bangaloreregion.

y The study is based on a sample size and hence the findings cannot begeneralized.

3. Analysis and Interpretation

y Analysis of the Questionnaire1) Age

Objective:- To Know the age of the respondent.

2) Are you salaried or self Employed?

Objective:- To know whether they are salaried or self employed.

3) What is the monthly income?

Objective:- To know income of the people every month.

4) Do you know about Insurance?Objective:-To know, how many people are aware of Insurance

5) Do you think insurance is necessary for you fife?Objective:-The main aim to frame the question is to know how important life

insurance in todays world.

6) If yes, why?Objective:- To know the opinion of the customer why they secure their life

and what are reasons.


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7) How do you rate following insurance company?Objective:-The purpose is to know the position of the insurance company when

the customer thinks of life insurance and to which company they prefer most.

8) What are the benefits for securing yourself in life insurance?Objective:- To know what basic benefits are that the customers expects when they

secure their life.

9) What is your investment in Life Insurance as a Percentage of Totalsavings?

Objective:-To Know the peoples percentage of investment of savings in Life

Insurance

10) Which of the insurance company do you prefer most?

Objective:- The aim is know, how many people are aware of HDFC Standard

Life Insurance.

11)Which company is accessible for you?Objective:-This Question is posed to know the, accessibility whether the

customer are getting the service easily or not.

12)Which of HDFC standard Life insurance Plans do you prefer most?Objective:-This question is asked to know which plan of HDFC is preferred

more by the customer.

13)Which plan do you prefer in traditional and unit linked plans?


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Objectives:-To know which plan is mostly preferable by people.

14)In Unit linked Plans, Which plan is most preferable by you?Objective:-To know which plan in the unit linked is preferred.

15)In savings plans, which plan is most preferable by you?Objective:-To know which plan in savings series is mostly preferred by

people.

16)How do you feel about the service of HDFC Standard Life InsuranceCompany?

Objective:-To know the customers satisfaction about HDFC Standard Life

Insurance Company service


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ANALYSIS FO DATA

1.Data showing the age group of respondents

Table no:

Age Group No. of

Respondents

Percentage (%)

Below 30

30-40

40-50

Above 50


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Total

2.Table showing the details of the respondent is earningsalaried or self Employed shown as follows:-

Table no: 2


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Earning areasNo. of

Respondents

Percentage (%)

Salaried

Self Employed

Total

0

10

20

30

40

50

60

male female

gender

precenta


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3.Table showing the details of income earned byrespondents on monthly basis as follows:-

Table no: 3

Income Range No. of

Respondents

Percentage (%)

Below Rs.10000

Rs. 10000-15000

Rs. 15000-20000


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Above Rs.20000

Total

4.Table Related to awareness of insurance amongpeople:-


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Table no:

4

Responses No. of

Respondents

Percentage (%)

Yes

No

Total


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5.Table showing the whether insurance is necessary foryour life:-

Table no:5

Responses No. of

Respondents

Percentage (%)

Yes

No

Total


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6.The respondents given the rate to the insurancecompany as follow:-

Table no: 6


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Insurance

companys

No. of Respondents Percentage (%)

LIC

ICICI Pru Life

Insurance

HDFC Standard

life

Bajaj Alliance

Total


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7.The benefits of the respondents from insurance takenby customers:-

Table no: 7

Benefits No. of

respondents

Percentage (%)

Safe & secure

High returns

Death benefits

Tax benefits

Total


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8.Data showing percentage investment in life insuranceout of the respondents savings:-

Table no:8

Range No. respondents Percentage (%)

Below 10%

10-20%


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9.The respondents prefer the following insurancecompany as follows :-

Table no: 9

Insurance

companys


LIC

ICICI Pru Life

Insurance

HDFC Standard

life

Bajaj Alliance

Total


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c

10. The respondents feel easy to accessible:-

Table no:10

Insurance

companys


LIC

ICICI Pru Life

Insurance


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HDFC Standard

life

Bajaj Alliance

Total


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11. the respondents preferred the HDFC Standard Lifeinsurance plans are as follows

:-

Table no:11

Insurance plans No. of

respondents

Percentage (%)

Protection Plans

Investment Plans

Savings Plans

Pension Plans

Total


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12. The respondents preferred the following PensionPlan in HDFC:-

Table no:12

Plans No. of

respondents

Percentage (%)

Traditional Plan

Unit Linked Plan

Total


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13. In unit Linked plans, the respondents preferred thefollowing plan:-

Table no:13

Plans No. of Percentage (%)


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14. In savings plan, the following plan is preferred bythe respondents:-

Table no:14

Plans No. of

respondents

Percentage (%)

Reassuring life plan

Creative plan

Freedom plan

High life plan

Endowment plan

Total


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15. Data showing opinion of respondents about HDFCSTANDARD LIFE INSURANCE:-

Table no:15

Opinion No. of

respondents

Percentage (%)

Good

Satisfactory


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Average

Poor

Total

project [vishwa]

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