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SHIV SHAKTI
International Journal of in Multidisciplinary and
Academic Research (SSIJMAR)
Vol. 4, No. 4, August 2015 (ISSN 2278 – 5973)
Policyholders Opinion Towards Products Of Lic Of India In Vellore Division,
Tamilnadu
Mr.C. MANIVANNAN
Doctoral Research Scholar, Department of Commerce, Annamalai University, Annamalai
Nagar – 608 002.(Author)
Dr.G. KARUNANITHI
Assistant Professor and Research Supervisor, Commerce Wing, DDE, Annamalai University, Annamalai Nagar- 608 002.
Impact Factor = 3.133 (Scientific Journal Impact Factor Value for 2012 by Inno Space Scientific
Journal Impact Factor)
Global Impact Factor (2013)= 0.326 (By GIF)
Indexing:
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ABSTRACT
The insurance sector acts as a mobilizer of savings and a financial intermediary
and a promoter of investment activities. The Indian life insurance industry has achieved
only a little because of the lack of insurance awareness, poor affordability and low
investment in the life insurance products. The huge and ever rising population levels in
our country provide an attractive opportunity but still nearly 70% Indian lives are un-
insured. The present study was carried out in Vellore division. Since the main objective
of the study was to analyze determinants of awareness of the life insurance, this study
concentrated on the variables like the age, income occupation and number of insurance
policies taken by the respondents. The structured interview schedule, have been utilized
by simple random sampling method and chosen 150 respondents from the study area.
Weighted ranking technique has been applied to analyze the purpose of taking LIC
policies. Majority of the 89 (60% ) respondents gathered the information only through
the agents of LIC. 111 respondents (74% ) are taken LIC policies on the motivation of
agents. Weighted ranking technique has been applied for reasons for selecting the
policies. Most of the respondents give I rank to safety savings (28.20). The success of the
life insurance business depends on the awareness of the policy holder towards the
policies and satisfaction of the services rendered by LIC of India .The study observed
that, majority of the respondents were taken life insurance policies through the advice of
agents.
Keywords:
LIC, Zonal Offices, Divisional Offices, Branch Offices, Satellite Offices, Mini
Offices, Loan, Surrender, Policy, Policyholder, Employees, Agents.
POLICYHOLDERS OPINION TOWARDS PRODUCTS OF LIC OF INDIA IN
VELLORE DIVISION, TAMILNADU
INTRODUCTION
In the huge service sector, insurance sector is one of the most important entities
which has been growing relatively fast in India and offers abundant growth opportunity
to the life insurers. Insurance occupies an important place in the complex of modern
world since risk, which can be insured, has increased enormously in every walk of life.
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The insurance sector acts as a mobilizer of savings and a financial intermediary and a
promoter of investment activities. The Indian life insurance industry has achieved only a
little because of the lack of insurance awareness, poor affordability and low investment in
the life insurance products. The huge and ever rising population levels in our country
provide an attractive opportunity but still nearly 70% Indian lives are un-insured.
The Life Insurance Corporation of India popularly known as LIC of India was
incorporated on 1st September 1956, by nationalizing 245 Indian as well as foreign
companies. It is the largest life insurance company in India and also the largest investors
.It is fully owned by the government India and head quarters in Mumbai. Today, the LIC
of India providing services to its customers through 8 Zonal offices, 113 Divisional
Offices, 2048 Branches, 1346 Satellite Offices, 1242 Mini Offices more than 1.2 lakhs
employees and 11.96 lakhs agents as on 31st march 2014. Vellore division is one the
oldest divisional office in Tamil Nadu. It is also biggest division of south zone on the
basis of volume of business. In Vellore division, there are 22 branches, 20 satellites
offices, 22 mini offices, one direct marketing office and 9,360 agents as on 31st march
2015.
STATEMENT OF THE PROBLEM
Today numerous public and private insurance companies are providing Life
Insurance Services to a large number of clientele and there has been mushroom growth in
their numbers and size in India. There is a transition from “sellers market” to “buyers
market”. Customer loyalty depends on satisfaction of this multiple needs. They know
them only when they are told about those needs .The Life Insurance Corporation of India
has devised several life policies to satisfy these diversified needs of the customer. The
efficiency of insurance sector depends upon how best it can deliver services to its target
customers and how far expectations of customers are met. The major objective of this
study is to ascertain the socio-economic profile of sample respondents and identify the
determinants of satisfaction of policyholders in Life Insurance Corporation of India in
Vellore division.
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METHODOLOGY The present study was carried out in Vellore division. Since the main objective of
the study was to analyze determinants of awareness of the life insurance, this study
concentrated on the variables like the age, income occupation and number of insurance
policies taken by the respondents. The structured interview schedule, have been utilized
by simple random sampling method and chosen 150 respondents from the study area.
Weighted ranking technique has been applied to analyze the purpose of taking LIC
policies. Garrett’s ranking technique has been used to rank the satisfaction of
policyholders towards LIC products.
LIMITATIONS OF THE STUDY
The research study was confined to Vellore division only. The limitation in the
time factor was the major constraint in collecting the data from the respondents.
Generalizing the result should be taken care in the near future.
PROFILE OF SELECTED RESPONDED
As mentioned earlier, the researcher has collected the primary data from 150
respondents in Vellore division. Table 1 shows that out of 150 respondents, 85
respondents (57%) are male, 40 per cent of the respondents belong to the age group of
21years old to 40 years old. As far, the educational level of the respondents is concerned,
the highest education level attained by most of the respondents was master degree level
(25%). Moreover, 71 per cent of the respondents are married. Among the 150
respondents, 45 per cent of the respondents reside in an urban area. As per the
classification of occupation is concerned, the majority of the policyholders are
government employees (24 %). Based on family income, 50 per cent of respondents’
family income ranges between Rs.15, 000 to Rs.30, 000.
TABLE 1
DOMOGRAPHIC PROFILE OF RESPONDENTS
Sl.No. Factors Demographics No. of
Respondents
Percentage
1 Gender Male
Female
85
65
56.66
43.33
Total 150
100.00
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2 Age Up to20
21 to 40
Above 40
42
60
48
28.00
40.00
32.00
Total 150 100.00
3 Educational
qualification
Illiterate
SSL
HSc
Under graduate
Post graduate
Professional
7
22
30
32
37
19
5.00
15.00
21.00
21.00
25.00
13.00
Total 150 100.00
4 Marital status Married
Unmarried
107
43
71.00
29.00
Total 150 100.00
5 Area of
Residence
Urban
Semi Urban
Rural
68
35
47
45.00
23.00
32.00
Total 150 100.00
6 Occupation
Agricultural
industrial employees
Government
employees
Businessman
Professional
Student
House wife
17
14
36
20
33
20
10
11.00
9.00
24.00
13.00
22.00
13.00
7.00
Total 150 100.00
7 Family income
(per Month)
Up to Rs.15000
Rs15000 to Rs. 30000
Above Rs. 30000
45
67
38
30.00
45.00
25.00
Total 150 100.00
Source: Primary Data
AWARENESS AND INFLUENCING FACTOR
The sources of information and influencing factor for purchasing the life insurance
product are significant to improve the life insurance business in India. Table 2 exhibit the
awareness and particulars of life insurance policies having policy holder in Vellore
division. Out of 150 respondents, 89 (60% )respondents gathered the information only
through the agents of LIC. Rest of the respondents knowing the information through the
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advertisement, friends and relatives. 111 respondents (74%) are taken LIC policies on the
motivation of agents. Nearly 60 per cent of the respondents have only one policy, 80
respondents (53%) took policies in their own name, 65 respondents ( 43%) have taken
policy for below Rs 1,00,000, 32 respondents (21%) took Endowment type of policies, 66
respondents (43%) paid the premium on monthly basis. Among the 150 respondents, 88
respondents considered that the premium rate charged by LIC is reasonable, 113
respondents ( 75%) has the opined that the bonus rate is normal,134 policyholder (89%)
do not surrender the policy to the LIC, 95 respondents (63%) took loan on LIC policies
and 52 respondents(35%) have availed the loan facilities for the children’s education.
TABLE 2
POLICYHOLDERS HAVING INFLUENCE ON PURCHASE OF LIC
POLICIES
Sl.No. Factors Information No. of
Respondents Percentage
1 Source LIC agents
Advertisements
Friends and relatives
Other beneficiaries
89
45
12
4
59,00
30,00
8.00
3.00
Total 150 100.00
2 Influencing Self
Friends
Spouse
Relatives
Agents
12
9
13
5
111
8.00
6.00
9.00
3.00
74.00
Total 150 100.00
3 No. of Policy
Taken
One
Two
Three
Above Three
89
30
24
7
59.33
20.00
16.00
4.67
Total 150 100.00
4 Name under
whom policy
taken
Self
Spouse
Children
Dependent parents
80
26
33
11
53.00
17.00
22.00
8.00
Total 150 100.00
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5 Amount of
policy taken
Below Rs.1,00,000
Rs.1, 00,000-2,00,000
Rs.2,00,000-3,00,000
Above 3,00,000
65
47
24
14
43.33
31.33
16.00
9.34
Total 150 100.00
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Nature of
Policy Taken
Money back Policies
Childrens’ Policies
Endowment Policies
Term Insurance Policies
Jeevan Anand Policy
Single Premium Policies
Pension Policies
Others
29
27
32
14
25
4
12
7
19.33
18.00
21.33
9.33
16.67
2.67
8.00
4.67
Total 150 100.00
7 Mode of
Payment
Monthly
Quarterly
Half yearly
Annually
66
58
9
17
44.00
38.67
6.00
11.33
Total 150 100.00
8 Opinion about
premium rate
Low
Reasonable
High
4
88
58
2.67
58.67
38.66
Total 150 100,00
9 Opinion about
bonus rate
Low
Normal
High
35
113
2
23.33
75.33
1.34
Total 150 100.00
10 Number of
persons
surrendering
the policy
Yes
No
16
134
10.67
89.33
Total 150 100.00
11 Loan on LIC
policies
Yes
No
95
55
63.33
36.67
Total 150 100.00
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12 Purpose of
taking loan on
LIC Policies
House Construction
Business Expansion
Children’s marriage
Children’s education
Family expanses
42
18
7
52
31
28.00
12.00
4.67
34.66
20.67
Total 150 100.00
Source of primary data
PURPOSE OF TAKING LIC POLICY
The policy holders invest their money in LIC policies for various purposes. Table
2 clearly exhibits the purpose of taking LIC policies by the respondents.
TABLE 3
PURPOSE OF TAKING LIC POLICY- WEIGHTED RANKING
TECHNIQUE
Source: Primary data
The rank given by the respondents as I, II, III, IV and V are multiplied by 5,4,3,2
& 1 respectively. Weighted ranking technique has been applied and the results are shown
in Table 3. Most of the respondents were give I rank to safety savings (28.20%), II rank
to protection (21.94%) and III rank to tax benefits (18.65). Some policyholders consider
Purpose Rank
Total
Mean score
(100X/2220)
Rank
I II III IV V
Safety savings 435 124 36 22 9 626 28.20 I
Future protection 120 236 75 40 16 487 21.94 II
Bonus 25 60 15 118 66 284 12.79 V
Simple procedure 35 120 153 78 23 409 18.42 IV
Tax benefits 105 60 171 42 36 414 18.65 III
Total 2220
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the procedure for taking the LIC policy is simple (18.42) and fifth rank goes to bonus
(12.79).The visible fact is that the policyholders taken LIC policies for safety savings.
But not expecting more bonus from their investment.
PREFERENCE OF THE POLICYHOLDERS TOWARDS LIC
After privatization of the life insurance business, the private life insurance
companies are attract the costumers though various services. But most of the peoples
preferring LIC of India for their investment, because of government organization. The
main reasons for preferring the LIC policies are given in Table 4 Garrett ranking
technique has been applied to analyse the of LIC policies and the results are shown in
Table 5.
As per the Garrett ranking technique, the policyholders opinion towards
preference of selecting a LIC policies from the Vellore division has exhibit that
Government guarantee got I-rank, the features of the policy ranked in II place and the
Loan facility stand in the third place, Bonus Facility (3.67) get IV rank and Policy
surrender (3.32) obtained V rank.
TABLE 4
PREFERENCE OF THE LIC POLICY
Preference
Rank Total
I II III IV V
Govt. Guarantee 90 15 9 10 26 150
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Source: Primary data
TABLE 5
PREFERENCE OF LIC POLICY– GARRETT’S RANKING TECHNIQUE
Preference Mean Score Rank
Govt. Guarantee 5.71 I
Features of the policy 4.17 II
Loan facility 3.78 III
Bonus facility 3.67 IV
Policy surrender 3.32 V
Source: Primary data
LEVEL OF SATISFACTION OF THE RESPONDENTS TOWARDS LIC’s
SERVICES
Policyholders opinion has been measured with the help of 10 statements indicating
the services of LIC. Five points have been assigned for the measurement of opinion of the
policyholders. The five points are namely, SA-Strongly Agree (5 points), A-Agree (4
points), N-No opinion (3 points), D-Disagree (2 points) and SD-Strongly Disagree (1
point). If the respondents have given strongly Agree for 10 statements, the maximum
marks scored by him is 50. If the respondents have given strongly Disagree for 10
statements, the maximum marks obtained by him is 10. Therefore, each respondent gets a
score ranging from 10 to 50.
Features of the policy 14 40 35 58 3 150
Loan facility 23 28 47 35 17 150
Bonus facility 18 23 38 27 44 150
Policy surrender 5 44 21 20 60 150
150 150 150 150 150
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The responses given by the policyholders are multiplied by 5,4,3,2 and 1
respectively to find out the total score. On the basis of total score, ranks are given and the
results are given in Table 6.
TABLE 6
LEVEL OF SATISFACTION OF THE RESPONDENTS TOWARDS LIC’s
SERVICES – LIKERT’S FIVE POINT SCALING TECHNIQUE
Source: Primary data
From the result given in Table 6, it can be seen that the statement “Safety
Investment” has secured a highest score of 646 followed by “Services of agents” (597)
and “introduction of new schemes” (560) and so on.
SUMMARY
The success of the life insurance business depends on the awareness of the policy
holder towards the policies and satisfaction of the services rendered by LIC of India .The
Factors SA A No DA SDA Total
Score Rank
Services of agents 335 176 54 22 10 597 II
Reasonable premium rate 85 164 132 64 16 461 VIII
Attractive bonus rate 140 260 123 22 5 550 V
Safety Investment 445 128 57 12 4 646 I
Surrender procedure 60 12 297 42 15 426 X
Location of the branch 185 72 30 158 6 451 IX
Introduction of new
schemes 255 188 60 50 7 560 III
Advertisement about LIC 125 152 96 86 12 471 VII
Claims settlement 205 180 114 32 10 541 VI
Loan procedure 120 320 90 20 6 556 IV
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study observed that, majority of the respondents were taken life insurance policies
through the advice of agents. The LIC of India should concentrate to improve their
business with the co-operation of agents of LIC and try to improve the quality of services
to attract new customers.
REFERENCES:
1. Karunanithi.G, Manivannan.C and Banumathy.S, “ Life Insurance Industry in India”,
Zenith International Journal of Multidisciplinary Research (Online), Vol.3. March 2013,
pp.143-152.
2. Karthivel.N and Radhanamani.S,” Policyholder’s Awarness of LIC’s Services With
reference to Tirupur District, Tamil Nadu” , International Journal of Engineering
Inventions, Vol.3, Issue 8, March 2014, pp.17-22.
3. Syamala Rao, “Policyholder’s Perception on LIC Policies and Services with reference to
Srikakulam District in Andra Pradesh” , International Journal of Management and Socila
Sciences Research, Vol.1, No.1, October 2012, pp.25-28.
4. Karunanithi.G. and Banumathy.S.” Marketing Strategy of LIC of India in the Global
Scenario” AARJSSH (Online), Vol.1, Issue 5, November 2012, pp.135-146.