A PROJECT REPORT ON

LIFE INSURANCE
SUBMITTED BY

DANISH KHAN

ROLL NO. 315

BACHELOR OF MANAGEMENT STUDY

SEMESTER - VI

UNDER THE GUIDANCE OF

PROF. ____________________

SUBMITTED TO

UNIVERSITY OF MUMBAI

2018-2019

Smt. ParmeshwarideviDurgaduttTibrewala Lions JuhuCollege

Of Arts, Science & Commerce

J. B. Nagar, Andheri (E), Mumbai – 400 059

 Smt. ParmeshwarideviDurgaduttTibrewala Lions JuhuCollege

Of Arts, Science & Commerce

J. B. Nagar, Andheri (E), Mumbai – 400 059

CERTIFICATE

We hereby certify that Name of students of Smt.

ParmeshwarideviDurgaduttTibrewala Lions Juhu College of Arts,
Commerce & Science studying in BACHELOR OF MANAGEMENT
STUDY (Semester VI) has completed project on __LIFE INSURANCE__
the academic year 2018-2019. The information submitted in the project is true
and original to the best of our knowledge.

INTERNA L EXAMINER EXTERNAL EXAMINER

PROJECT CO-ORDINATOR PRINCIPAL

 DECLARATION

I, DANISH KHAN, the student of BACHLORE OF MANAGEMENT

STUDY (Semester VI) (2018-2019) hereby declare that I have completed the
project on LIFE INSURANCE.

The information submitted is true and original to the best of my knowledge.

Signature of Student:

Name of Student: DANISH KHAN

Place: Mumbai
Roll No:315
 ACKNOWLEDGEMENT

I would like to thank the faculty of “SMT. PARMESHWARIDEVI

DURGADUTT TIBREWALA LIONS JUHU COLLEGE OF ARTS,
COMMERCE AND SCIENCE” affiliated to the University of Mumbai for
their excellent suggestion.

A special thanks to PROF Pooja Soni, Coordinator for her constant

encouragement and guidance from the beginning to the end with never ending
patience. His constant support and efforts helped me to complete my project
on time.

I would also like to take an opportunity to thank all friends for co-operating
with me and to all the people who are directly or indirectly connected to the
project above. Special thanks to our Principal Dr. Trishala Mehta and
President Dr. Vinod Tibrewala for their co-operation during the time of
completion of the project.

I would also like to thank our respected Self finance Chief Coordinator,
Dr.NandaIndulkar, and other Professors like, Prof Pooja Soni prof
ganashreekokkulo and teachers who teach u and helped u in the project,
and our Library Attendant KawadeSubhash, without whom the project
would have not come to an end.
 Executive summary
Life insurance - What is it? Life insurance is used to protect the financial
security of the people you love most. A lifeinsurance policy pays
a cash benefit, tax free, to your beneficiaries when you die. The
amo unt o f mo ney fo r whic h yo u are insure d and t he ty pe
o f insuranc e y o u buy depends on your needs. People can get life
insurance through work (some employers offer it through group
benefits plans. This type usually ends when you leave the
employer.) or they buy it on their own (usually from an insurance advisor).
It's understandably difficult for any family to consider death
and making arrangements for it. When t hi s occu rs, deal i ng
wi t h t he emot ional t rauma i s hard enough. By havi ng
t hef i nancial preparat i ons pl anned and under cont rol wi t h
compr ehensi ve l i f e i nsurancecoverage, i t makes t he
si t uati on t hat much easi er f o r your l ov ed on es l ef t
behi nd. By having a life insurance policy in place, your loved
ones will be protected from financial hardships. The protective
qualities of your policy will provide money directly to
your beneficiaries. This settlement from the company that insures you
can be used by your beneficiaries in any way they see fit, such as:
Supplement lost income Funds for children's education Pay off the
family household debt Pay for the cost of the funeral and related
expenses I f you choose t o buy a permanent p ol i cy, you can
have t he opt i on of addi ng a cash val ue component. This cash
value component can be used during your lifetime if needed
 INDEX

SR.NO CHAPTER NAME PAGE.NO

1 INTRODUCTION 6
1.1 INTRODUCTION TO PROBLEM
1.2 DEFINATION OF INSURANCE
1.3 TYPE OF INSURANCE
1.4 IMPORTANCE OF INSURANCE
1.5 THE INSURANCE INDUSTRY TODAY
1.6 EVOLUTION OF INSURANCE IN INDIA
1.7 EVOLUTION OF INSURANCE INORGANISATION
1.8 BACKGROUND OF STUDY
2 RESEARCH DESIGN 22
2.1 STATEMENT TO THE PROBLEM
2.1 SCOPE OF THE STUDY
2.3 NEED OF THE STUDY
2.4 OBJECTIVES OF THE STUDY
2.5 SAMPLE DESIGN
2.6 SOURCE OF DATA
2.7 FIELD OF DATA
2.8 LIMITATION OF STUDY
3 REVIWE OF LITERATURE 27
3.1 PROFILE AND ORGANISATION
4 ANALYSIS AND INTERAPRETATION 39
4.1 INTRODUCTION TO ANALYSIS
4.2 DATA ANALYSIS TOOL
5 FINDING CONCLUSION AND SUGGESTON 48
6 BIBLIOGRAPHY 58
 CHAPTER-1

INTRODUCTION
Everyone is exposed to various risks. Futures are very uncertain, but there is way to
protectone’s family and make one’s children’s future safe. Life Insurance
companies help us to ensure that our family’s future is not just secure but
also prosperous Life Insurance is particularly important if you are the
sole breadwinner for your family. The loss of you and your income could devastate
your family. Life insurance will ensure that if anything happens to you, your loved
ones will be able to manage financially.This study titled “Study of Consumers
Perception about Life Insurance Policies” enablesthe Life Insurance Companies to
understand how consumer’s perception differs from person to person. How a
consumer selects, organizes and interprets the service qualityand the product
quality of different Life Insurance Policies, offered by various Life Insurance
Companies.Insurance is a tool by which fatalities of a small number are
compensated out of funds (premium payment) collected from plenteous.
Insurance companies pay back for financial losses arising out of occurrence of
insured events e.g. in personal accident policy death due to accident, in fire
policy the insured events are fire and other allied perils like riot and strike,
explosion etc. hence insurance safeguard against uncertainties It provides
financial recompense f or losses suffered due to incident of unanticipated events,
insured with in policy of insurance. Moreover, through a number of
acts of parliament, specific types of insurance are legally enforced in our country
e.g. third party insurance under motor vehicles Act, public liability insurance for
handlers of hazardous substances under environment protection Act. Etc

1.1 WHAT IS LIFE INSURANCE(Introduction to the

problem)
It is a commonly acknowledged phenomenon that there are countless risks in every
sphere of life .for property, there are fire risk; for shipment of goods. There are
perils of sea; for human life there are risk of death or disability; and so on
.the chances of occurrences of the events causing losses are quite uncertain
because these may or may not take place. Therefore, with this view in mind, people
facing common risks come together and make their small contribution to the
common fund. While it may not be possible to tell in advance, which person will
suffer the losses, it is possible to work out how many persons on an average out of
the group, may suffer losses. When risk occurs, the loss is made good out of the
common fund .in this way each and every one shares the risk .in fact they share the
loss by payment of premium, which is calculated on the likelihood of loss .in olden
time, the contribution make the above-stated notion of insurance.

1.2 DEFINITION OF INSURANCE

Insurance has been defined to be that in, which a sum of money as a premium
is paid by the insured in consideration of the insurer’s bearings the risk of paying a
large sum upon a given contingency. The insurance thus is a contract where by :a.
Certain sum, termed as premium, is charged in consideration, b. Against the said
consideration, a large amount is guaranteed to be paid by the insurer who received
the premium The compensation will be made in certain definite sum, i.e., the loss
or the policy amount which ever may be, and. The payment is made only upon a
contingency More specifically, insurance may be defined as a contact between
two parties, where in one party (the insurer) agrees to pay to the other party (the
insured) or the beneficiary, a certain sum upon a given contingency (the risk)
against which insurance is required.

1.3 TYPES OF INSURANCE

Insurance occupies an important place in the modern world because of the risk,
which can be insured, in number and extent owing to the growing complexity of
present day economic system. The different type of insurance have come about
by practice within insurance companies, and by the influence of legislation
controlling the transacting of insurance business, broadly, insurance may be
classified into the following categories:

1. Classification from business point of view

a) Life insurance

b) General insurance

2. Classification on the basis of nature of insurance

a) Life insurance

b)Fire insurance

c) Marine insurance

d) Social insurance,

e) Miscellaneous insurance

2. Classification from risk point of view

a) Personal insurance
e) Property insurance

f) Liability insurance

g) Fidelity general insurance

3. Classification from risk point of view

a) Personal insurance

b) Property insurance

c) Liability insurance

d) Fidelity general insurance

1. 4 THE IMPORTANCE OF INSURANCE

Insurance benefits society by allowing individuals to share the risks faced by
many people. But it also serves many other important economic and societal
functions. Because insurance is available and affordable, banks can make loans with
the assurance that the loan’s collateral (property that can be taken as payment if a
loan goes unpaid) is covered against damage. This increased availability of credit
helps people buy homes and cars .Insurance also provides the capital that
communities need to quickly rebuild and recover economically from natural
disasters, such as tornadoes or hurricanes. Insurance itself has become a significant
economic force in most industrialized countries. Employers buy insurance to
cover their employees against work-related injuries and health problems. Because
it makes business operations safer, Insurance encourages businesses to make
economic transactions, which benefits the economies of countries. In addition,
millions of people work for insurance companies and related businesses. In 1996
more than 2.4 million people worked in the insurance industry in the United States
and Canada. Insurance as an investment that offers a lot more in terms of returns,
risk cover & as also that tax concessions & added bonuses Not all effects of
insurance are positive ones. The possibility of earning insurance payments
motivates some people to attempt to cause damage or losses. Without
the possibility of collecting insurance benefits, for instance, no one would think of
arson, the willful destruction of property by fire, as a potential source of money.

1.5 THE INSURANCE INDUSTRY TODAY

Since the 1970s, the insurance business has grown dramatically and under gone
tremendous changes. As a result of the deregulation of financial services
businesses— including insurance, banking, and securities trading—the roles,
products, and services of these formerly distinct businesses have become blurred.
For instance, citizens in the U.S .state of California voted in 1988 to allow banks to
sell insurance in that state. In Canada, banks may also soon be allowed to sell
insurance Advances in communications technology have also allowed traditionally
distinct financial businesses to keep instantaneous track of developments in
other businesses and compete for some of the same customers. Some insurance
companies now offer deposit accounts and mortgages. In the United States, life
insurance companies now sell more pension plans and other asset management
services than they do conventional life insurance. Developments in computer
technology that have given insurance providers the ability to quickly access
and process information have allowed them to custom-design policies to fit the
needs of individual customers. But the increasing complexity of policies has also
made some aspects of buying and selling insurance more difficult. In addition,
improvements in geological and meteorological technology have the potential to
change the way property insurers calculate risks of damage. For example, as
scientists improve their abilities to predict severe weather patterns, such as
hurricanes, and geological disturbances, such as earthquakes, insurers may change
how they provide protection against losses from such events

1.6 EVOLUTION OF INSURANCE IN INDIA

The marine insurance is the oldest form of insurance. If we trace Indian history
there are evidence that marine insurance was practiced here about three thousand
years ago. The code of Manu indicates that there was the practice of marine
insurance carried out by the traders in India with those of Srilanka, Egypt and
Greece .it is wonderful to see that Indians had even anticipated the doctrine of
average and contribution. Fright was fixed according to season and was then very
much at the mercy of the wind and other elements. Travelers by sea and land were
very much exposed to the risk of losing their vessels and merchandise because of
piracy on open seas and highway robbery of caravans was very common. The
practice of insurance was very common during the rule of Akbar to Aurangzeb, but
the nature and coverage of the insurance in this period is not well known. It was
the British insurer who introduced general insurance in India in the modern form.
The Britishers opened general insurance in India around the year 1700 .the first
company known as the sun insurance office was set up in Calcutta in the year
1710.This was followed by several insurance companies like London assurance and
royal exchange assurance (1720), Phoenix Assurance Company (1782). Etc. General
insurance business in the country was nationalized with effect from 1st January
1973 by the General Insurance Business (Nationalization) Act, 1972. More than 100
non-lifeinsurance companies including branches of foreign companies operating
within the country were amalgamated and grouped into four companies, viz., the
National Insurance Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd., and the United India Insurance Company Ltd.
with head offices at Calcutta, Bombay, New Delhi and Madras, respectively. Life
insurance in the current form came in India from united kingdom with the
establishment of a British firm, oriental life assurance company in 1818 followed by
Bombay life assurance company in 1823, the madras equitable life insurance
society in 1829 and oriental life assurance company in 1874.prior to 1871, Indian
lives were treated as sub standard and charged an extra premium of 15% to 20%.
Bombay mutual life assurance society, an Indian insurer that came in to existence
in 1871, was the first to cover Indian lives at normal rates. The Indian insurance
company Act 1923 was enacted inter alia, to enable the government to collect
statistical information about life and non lifeinsurance business transacted in India
by Indian and foreign insurer, including the provident insurance societies. The first
half of the 20th century marked by two world wars, the adverse affects of the
World War I and World War II on the economy of India, and in between them
the period of worldwide economic crises triggered by the Great depression. The
first half of the 20th century was also marked by struggles 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. This had adversely affected the
faith of the general public in the utility of obtaining life cover .In this background,
the Parliament of India passed the Life Insurance of India Act on19th June 1956,
and the Life Insurance Corporation of India was created on 1stSeptember, 1956, by
consolidating the life insurance business of 245 private life insurer sand other
entities offering life insurance services. Since 1972, the insurance sector has been
totally under the control of government of India through LIC and GIC and its
subsidiaries. As a result, revenue of both of them increased in the last years .the
amount of savings pooled by LIC increased from Rs.2704crores in 1974 to Rs .57670
in 1994 with an annual growth rate of 16.53%.similarly premium underwritten by
GIC rose from 280 crores in 193 to 7647 cores in1998 showing an annual growth
rate of 25.18%.Despite increase in premium collected by both LIC and GIC there
were inefficiency and red tape I sum creeped in to the insurance sector. Apart from
that a major policy shift by the Narasimha Rau government during 1990’s.the
Indian economy opened for foreign competition .In this background The
government of India in 1993 had set-up a high powered committee by R.N
Malhothra ,former governor reserve bank of India, to examine the structure of
Indian insurance sector and recommended changes to make it more efficient and
competitive keeping in view structural changes in other part of the financial system
of the country.
Insurance sector has been opened up for competition from Indian private
insurance companies with the enactment of Insurance Regulatory and
Development Authority Act,1999 (IRDA Act). As per the provisions of IRDA
Act, 1999, Insurance Regulatory and Development Authority (IRDA) was
established on 19th April 2000 to protect the interests of holder of insurance policy
and to regulate, promote and ensure orderly growth of the insurance industry.
IRDA Act 1999 paved the way for the entry of private players into the insurance
market, which was hitherto the exclusive privilege of public sector insurance
companies/ corporations.

Insurance sector has been opened up for competition from Indian private
insurance companies with the enactment of Insurance Regulatory and
Development Authority Act, 1999 (IRDA Act). As per the provisions of IRDA
Act, 1999, Insurance Regulatory and Development Authority (IRDA) was
established on 19th April 2000 to protect the interests of holder of insurance policy
and to regulate, promote and ensure orderly growth of the insurance industry.
IRDA Act 1999 paved the way for the entry of private players into the insurance
market, which was hitherto the exclusive privilege of public sector insurance
companies/ corporations.

1.7 EVOLUTION OF INSURANCE ORGANIZATION

With a view to serve the society, the insurance organizations have been
developed in different forms with innovation of insurance practice for
social welfare and development; some of these forms are outlined here.

a) Self-insurance

The arrangement in which an individual or concern sets up a private fund to meet

the future risk. If some losses happened in the future the firm meets the loss out
of the fund. While it may be called ‘self insurance’ it is not a single matter of fact,
insurance at all because there is no hedge, no shifting, or distributing the burden
of risk among larger Persons. It is merely a provision to meeting the unforeseen
event. Here the insured become the insurer for the particular risk. But it can be
effectively worked only when there is wide distribution of risks subjected the same
hazard.

b) Partnership

A partnership firm may also carry on the insurance business for the sake of profit.
Since it is not an entity distinct from the persons comprising it, the personal liability
of partners in respect to the partnership debts is unlimited. In case of huge loss the
partners may have to pay from their own personal funds and it will not be
profitable to them to starts insurance business .in the early period before the
advent of joint stock companies many insurance undertakings were partnership
firms or unincorporated companies

c) Joint stock companies

The joint stock companies are those, which are organized by the shareholders who
subscribe the necessary capital to start the business. These are formed for earning
profits for the stockholders who are the real owners of the companies. The
management of a company is entrusted to a board of directors who is elected by
the shareholders from amongst themselves. The company can operate insurance
business and policy holders have nothing to do with the management of the
concern. But in life insurance it is the practice to share certain portion of profit
among the certain policyholders.

d) Mutual fund companies

The mutual fund companies are co- operative association formed for the purpose
of effecting insurance on the property of its members. The policyholders are
themselves the shareholders of the companies each member is insured as well as
insured. They have power to participate in management and in the profit sharing
to the full extent. Whenever the income is more than the expenses and claims, it is
accumulated I the form of saving and is entitled in reducing the rate of premium.
Since the insured are insurers also, they always try to reduce the management
expenses and to keep the business at sound level.
e) Co-operative insurance organizations

Cooperative insurance organizations are those concerns, which are incorporated

and registered under Indian cooperative societies Act. The concerns are also called
‘co operative insurance societies’ these societies like mutual fund companies are
nonprofit organization .the aim is to provide insurance protection to its members
at the lowest reasonable net cost .the Indian insurance Act. 1938, has provided
special provisions for the co-operative insurance societies, but after nationalization
the societies have ceased to exist.

F) Lloyd’s Association

Lloyd’s association is one of the greatest insurance institutions in

the world. Taking its name from the coffee house Lloyd where
underwriters assembled to transact business and pick-up news. The
organization traces its origins to the latter part of the seventeenth
century .so it is the oldest insurance organization in existing form in the
world. In 1871,Lloyds Act was passed incorporating the members of the
association into a single corporate body with perpetual succession and a
corporate seal .the powers of Lloyds corporation were extended from
the business of marine insurance to the other insurance and guarantee
business. The Lloyds Association also publishes Lloyd’s list and register of
shipping for the information of insuring public and the insurers.

G) State Insurance

The government of a nation, sometimes, owns the insurance and runs

the business for the benefit of the public. The state insurance is defined
as that insurance which is under public sector. In Brazil, Japan and
Mexico, the insurance are largely nationalized. Previously, the state
undertook only those insurances, which were regarded as vital for the
national interest.
INSURANCE SECTOR REFORMS

Having looked at the insurance sector, the efforts made by the government to make
the industry more dynamic and customer friendly. To begin with, the Malhotra
committee was set up with the objective of suggesting changes that would
achieve the much required dynamism.

The Malhotra Committee Report

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI

Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and
recommend its future direction. In 1994, the committee submitted the report and
gave the following recommendations:
Structure
Government stake in the insurance Companies to be brought down to
50%Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations All the insurance companies
should be given greater freedom to operate.

Competition
Private Companies with a minimum paid up capital of Rs.1bn should be allowed to
enter the industry No Company should deal in both Life and General Insurance
through a single entity foreign companies may be allowed to enter the industry in
collaboration with the domestic companies. Postal Life Insurance should be
allowed to operate in the rural market. Only one State Level Life Insurance
Company should be allowed to operate in each state.

Regulatory Body
The Insurance Act should be changed. An Insurance Regulatory body should be set
up. Controller of Insurance (Currently a part from the Finance Ministry)
Investment.Mandatory Investments of LIC Life Fund in government securities to be
reduced from75% to 50%.GIC and its subsidiaries are not to hold more than 5% in
any company (There current holdings to be brought down to this level over a period
of time).
Customer Service

LIC should pay interest on delays in payments beyond 30 days. Insurance

companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology to be carried out in the
insurance industry .Overall, the committee strongly felt that in order to
improve the customer services and increase the coverage of the insurance industry
should be opened up to competition.

Few Life Insurance policies are:

Whole life policies

- Cover the insured for life. The insured does not receive money while he is alive;
the nominee receives the sum assured plus bonus upon death of the insured.
Endowment policies
- Cover the insured for a specific period. The insured receivesmoney on survival of
the term and is not covered thereafter.
Money back policies
- The nominee receives money immediately on death of theinsured. On survival the
insured receives money at regular intervals during the term.These policies cost
more than endowment with profit policies.
Annuities / Children's policies
- The nominee receives a guaranteed amount of money at a pre-determined time
and not immediately on death of the insured. On survival the insured receives
money at the same pre-determined time. These policies are best suited for
planning children's future education and marriage costs.
Pension schemes
- are policies that provide benefits to the insured only upon retirement. If the
insured dies during the term of the policy, his nominee would receive the benefits
either as a lump sum or as a pension every month. Since a single policy cannot meet
althea insurance objectives, one should have a portfolio of policies covering all the
needs.

1.8 BACKGROUND OF THE STUDY

“Life Insurance is a contract for payment of a sum of money to the person assured
on the Happening of the event insured against”. Usually the insurance contract
provides for the Payment of an amount on the date of maturity or at specified
dates at periodic intervals or At unfortunate death if it occurs earlier. Obviously,
there is a price to be paid for this Benefit. Among other things the contracts also
provides for the payment of premiums, by the assured. Life Insurance is universally
acknowledged as a tool to eliminate risk, substitute certainty for uncertainty and
ensure timely aid for the family in the unfortunate event of the death of the
breadwinner. In other words, it is the civilized world’s partial solution to the
problems caused by death. Life insurance helps in two ways dealing with premature
death, which leaves dependent families to fend for themselves and old age without
visible means of support. The most common types of life insurance are whole life
insurance and term lifeinsurance. Whole life insurance provides a lifetime of
protection as long as you pay the premiums to keep the policy active. They also
accrue a cash value and thus offer a savings component. Term life insurance
provides protection only during the term of the policy and the policies are usually
renewable at the end of the term

There are many Life Insurance Companies like

ALLIANZ LIFE INSURANCE COMPANY.

ICICI PRUDENTIAL LIFE INSURANCE
COMPANY.
HDFC STANDARDLIFEINSURANCECOMPANY.
METLIFE INSURANCE COMPANY.
BIRLA SUN-LIFE INSURANCE COMPANY.
 CHAPTER 2
 RESEARCH DESIGN
2.1 STATEMENT OF THE PROBLEM

This Study will help us to understand the consumer’s perception about life
insurance companies. This study will help the companies to understand, how a
consumer selects, organizes and interprets the Quality of service and product
offered by life insurance companies.

2.2 SCOPE OF THE STUDY

This study is limited to the consumers within the limit of Bangalore city. The study
will be able to reveal the preferences, needs, perception of the customers
regarding the life insurance products, It also help the insurance companies to know
whether the existing products are really satisfying the Customers’ needs.

2.3 NEED FOR THE STUDY

1) The deeper the understanding of consumer’s needs and perception, the

earlier the product is introduced ahead of competitors, the expected contribution
margin will be greater .Hence the study is very important.

2) Consumer markets and consumer buying behavior can be understood before

sound product and marketing plans are developed.

3) This study will help companies to customize the service and product, according
to the consumer’s need.
4) This study will also help the companies to understand the experience and
expectations of the existing customers.

5) Apart from creating, manufacturing and distribution capabilities for life

insurance products, and in depth study of the consumers, their preferences and
demand for their product is very necessary for setting up an efficient marketing
network.

2.4 OBJECTIVE OF THE STUDY

Ascertain the profile and characteristics of potential buyers.

To have an insight into the attitudes and behaviors of customers.

To find out the differences among perceived service and expected service.

To produce an executive service report to upgrade service characteristics of

Life insurance companies.

To access the degree of satisfaction of the consumers with their current brand of
Insurance products.

2.6 RESEARCH DESIGN:

A research design is a basic plan, which guides the researcher in the collection and
analysis of data required for practicing the research. Infect the research design is
the
Conceptual structure where the research is conducted. It constitutes the ‘Blue
Print’ for the collection, measurement and analysis of the data. The study is carried
out to understand the Consumer Perception about life insurance companies in
Bangalore city .For this study the researcher used exploratory research design.
These research covers50 consumers in Bangalore city, belonging to various age
groups.

2.7 SAMPLE DESIGN:

The process of drawing a sample from a large population is called sampling.
Population refers to the total of items about which information is defined. Well-
selected samples may reflect fairly and accurately the characteristics of the
population.

SamplingUnit:
The sample unit of this survey was the customers having life insurance policies in
Mumbai city.

Sample Size:
The sample size was 50 customers of different life insurance companies, from the
various parts of the Mumbai city.

Sampling Technique Adopted:

Convenient sampling

2.8 SOURCESOF DATA:

After identifying and defining the research problem and determining specific
information required to solve the problem the researcher will look for the type and
sources of data which may yield the desired results, while deciding about the
method of data collection to be used for the study, there are two types of data.

Secondary Data:

Secondary data means data that are already available i.e. they refer to the data
which have been collected and analyzed by someone and can save both money and
time of the researcher. Secondary data may be available in the form of company
records, trade publications, libraries etc. Secondary data sources are as follows:

Company Reports.
Daily Newspaper.
Standard Textbook.
Various Websites.

Primary Data:

Primary data are those, which are collected for the first time. Primary data is
collected by framing questionnaires. The questionnaire contained questions, which
are both open-ended and closed-ended. Open-ended questions are questions
requiring answers in the responder’s own words. Closed-ended questions are those
wherein the respondent has to merely check the appropriate answer from a list of
options available. Any doubts raised by the respondents were clarified to get the
perfect answers from the distributors. Openendedquestions yielded more
insightful information, whereas closed-Ended questions were relatively simple to
tabulate and analyze.

2.9 FIELD WORK

An interview-schedule and well-structured questionnaire is administered to the
target respondents to collect primary data (Copy of questionnaire is attached in the
appendix) Open and close-ended questions are used in the questionnaire. The
orders of the questions are in such a manner that they begin with simple questions
and lead on the questions that needed more involvement from respondents. The
secondary data are collected from periodicals, magazines, journals and Internet.

OPERATIONAL DEFINITIONS OF THE STUDY

Marketing:

Marketing is a social and managerial process by which individuals and group obtain
what they need and want through creating, offering and exchanging products of
value with others.

Marketing Management:

Marketing Management is the process of planning and executing the conception,

pricing, promotion and distribution of individual and organizational goals.

Marketing Research:
Marketing research is the systematic and objective search for, and analysis of
information relevant to the identification and solution of any problems in the field
of marketing.

Consumer Research:

Consumer research is the methodology used to study consumer behavior.

Consumer Behavior: Consumer behavior is the study of how individuals make

decisions to spend their available resources [time, money, efforts] on consumption
related items

Market Segmentation:

Market segmentation is the process of dividing a market in the distinct subsets

of consumer with common needs or characteristics and selecting one or more
segments to target with distinct marketing mix.

Positioning:
Positioning is the act of designing the company’s offering and image so that they
occupy meaningful and distinct competitive position in the target consumer’s
mind.

Perception:
Perception is the process by which an individual selects, organizes, and interprets
information input to create a meaningful picture of the world. For a marketer to
influence motivated buyer to buy their products rather than competitors they must
be careful to take the perception process into account while designing their
marketing campaigns. Perception therefore influence what product consumer
buys.

ATTITUDE:
An attitude is a person enduring favorable or unfavorable evaluation, emotional
feeling, and action tendencies towards some object or idea.

Attributes:
Attributes are the strengths and weaknesses of a brand that create attitudes and
are used by consumers to choose between brands that are relatively similar or
functionally equivalent.
Values:
A value is a concept of the desirable. An internalized standard of evaluation a
person possession. This standard determines or guide an individual evaluation of
the many objects encountered in everyday life.
Brand:
A brand is a name, term, sign, symbol, or design or a combination of them, used to
identify the goods or services of one seller or group of seller and the differentiate
them from those of competitors.

2.10 LIMITATIONS OF THE STUDY

Although the study was carried out with extreme enthusiasm and careful planning
there are several limitations, which handicapped the research viz.

Time Constraints:
The time stipulated for the project to be completed is less and thus there
are chances that some information might have been left out, however due care is
taken to include all the relevant information needed.
Sample size:

Due to time constraints the sample size was relatively small and would definitely
have been more representative if I had collected information from more
respondents
Accuracy:

It is difficult to know if all the respondents gave accurate information; some

respondents tend to give misleading information
 CHAPTER 3
REVIEW OF LITERATURE:

The literature review section critically examine the recent or historically significant
studies, company data or industry reports that acts as a basis for proposed studies
to begin with the research discussion of the related literature and
relevant secondary data from a comprehensive prospective, moving to more
specific studies, that are associate with research problem. Basically the literature
should be applied to the study, than the researcher proposes. The literature may
also explain the needs for the proposed work to appraise the short comings and
informational gaps in secondary data sources. To carry the research work the
researcher has gone through a few reports, books, journals and websites. The
details regarding Life Insurance Industry, history ,origin and growth of the industry
is also taken from some books, magazines etc. The sources of this information are
as follows:

 Catalogues and Broachers from various life insurance companies.

 Articles from magazines and news paper.

 Information from various websites.

PROFILE OF THE INDUSTRY

3.1 industry profile
History and Development of Life Insurance
Life Insurance, in its present form, came to India from the United Kingdom with
establishment of a British firm, Oriental Life Insurance Company in Calcutta
in 1818,followed by Bombay Life Assurance Company in 1823, the Madras
Equitable Life Insurance society in 1829 and Oriental Government security
Assurance Company in1874. Prior to 1871, Indian Lives were treated as sub-
standard and charged an extra premium of 15% to 20%. Bombay Mutual Life
Assurance Society, a Indian insurer which came into existence in 1871 was the first
to cover Indian lives at normal rates.The Indian life Assurance Companies Act, 1912
was the first statutory measure toregulate life insurance business. Later, in 1928,
the Indian Insurance Companies Act wasenacted, to enable the government to
collect statistical information about both life and non-life insurance business
transacted in India by Indian and foreign insurers, including the provident insurance
societies. Comprehensive arrangements were, however, brought into effect with
the enactment of the Insurance Act, 1938.By 1956, 154 Indian insurers, 16 non-
Indian insurers and 15 provident societies were carrying online insurance business
in India. On 19th January 1956, the management of the entire life insurance
business of 229 Indian insurers and provident insurance societies and the Indian
life insurance business of 16 non-Indian Life insurance companies then operating
in India, was taken over by the central Government and then nationalized on
1stSeptember 1956 when the Life Insurance Corporation came into existence. With
largest number of life insurance policies in force in the world, Insurance happens
to be a mega opportunity in India. It’s a business growing at the rate of 15-20 per
cent annually and presently is of the order of Rs 450 billion. Together with banking
services, it adds about 7 per cent to the country’s GDP. Gross premium collection
is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per
cent of GDP.Yet, nearly 80 per cent of Indian population is without life insurance
cover whilehealth insurance and non-life insurance continues to be below
international standards.And this part of the population is also subject to weak
social security and pensionsystems with hardly any old age income security. This
itself is an indicator that growth potential for the insurance sector is immense.A
well-developed and evolved insurance sector is needed for economicdevelopment
as it provides long-term funds for infrastructure development and at thesame time
strengthens the risk taking ability. It is estimated that over the next ten yearsIndia
would require investments of the order of one trillion US dollar. The
Insurancesector, to some extent, can enable investments in infrastructure
development to sustain.economic growth of the country.

 INSURANCE AND BUSINESS ENVIRONMENT

Insurance is considered as one of the important segment of the economy for its
growth and development. This industry provides long term funds which are
essential for the growth and development of the nation .so the growth of
insurance industry largely depends up on the environment in which they exists.
Here I would like to mention about Indian business environment and their impact
on insurance sector. There are two type of environment which affect the business
one is environment which is internal to the organization (internal environment) and
the other one which is external to the organization (external environment). Internal
environment includes management, technology, competitors, employees,
shareholders, policyholders, marketing intermediaries. The external environment
of insurance business has been classified in four parts, namely legal, economic,
financial, and commercial. let us discus them in detail by takingone by one.

THE INSURANCE REGULATORY

AND DEVELOPMENT AUTHORITY (IRDA)
The Malhotra Committee felt the need to provide greater autonomy to insurance
companies in order to improve their performance and enable them to act as
independent companies with economic motives. For this purpose, it had proposed
setting up an independent regulatory body- The Insurance Regulatory and
Development Authority. Based on the Malhotra committee report in April 2000
IRDA was incorporated. Since being set up as an independent statutory body the
IRDA has put in a framework of globally compatible regulations. Section 14 of the
IRDA Act 1999, lays the duties, power and functions of the authority .the authority
shall have the duty to regulate, promote anden sure orderly growth of the
insurance business and reinsurance business. keenly interested as; perhaps their
home markets are saturated while emerging countries have low insurance
penetration and high growth rates.

 Type of life insurance policies

Whole life insurance

Whole life is a form of permanent insurance, with guaranteed rates and guaranteed
cash values. It is the least flexible form of permanent insurance.

Universal life insurance

Universal life is similar to whole life, except that you can change the death benefit
(themoney paid to the beneficiary when the insured person dies), the amount of
premiumsand how often you pay the premiums.

Variable life insurance

Variable life insurance is the riskiest form of permanent insurance, but it can also
give you the best return for your money. Essentially, the life insurance company
will invest your insurance premiums for you. If the investments do well, the death
benefit and cashvalue of the policy go up. If they do poorly, they go down. It's
a little like putting your savings into the stock market.

Group life insurance

Many companies allow their employees to buy group life insurance through
the company.Usually, you can get very good rates for this insurance but you have
to give the insurance up when you stop working there. For that reason, group
insurance can be a good way to buy a little extra life insurance, but it does not make
sense to make it your main policy.There are a number of policies for specific
insurance needs. Some of these include:
1.Family income life insurance.

This is a decreasing term policy that provides a stated income for a fixed period
of time, if the insured person dies during the term of coverage. These
paymentscontinue until the end of a time period specified when the policy is
purchased.

2. Family insurance.

A whole life policy that insures all the members of an immediate family --husband,
wife and children. Usually the coverage is sold in units per person, with the primary
wage-earner insured for the greatest amount.

3. Senior life insurance.

Also known as graded death benefit plans, they provide for a graded amount to
be paid to the beneficiary. For example, in each of the first three to five years
after the insured dies, the death benefit slowly increases. After that period, the
entire death benefit is paid to the beneficiary. This might be appropriate if
the beneficiary is not able to handle a large amount of money soon after the death,
but would be in a better position to handle it a few years later.

4. Juvenile insurance.

This is life insurance on a child. Coverage is paid for by an adult, usually the parents
or guardians. Such policies are not considered traditional life insurance

Because the child is not producing an income that needs to be protected.

However, by buying the policy when the child is young, the parents are able to lock
in an extremely low premium rate and allow many more years of tax-deferred cash
value build up.

5. Credit life insurance.

This insurance is designed to pay off the balance of a loan if you die before youhave
repaid it. Credit life insurance is available for many kinds of loans includingstudent
loans, auto loans, farm equipment loans, furniture and other personalloans
including credit cards. Credit life insurance can be purchased by anindividual.
Usually it is sold by financial institutions making loans, like banks, to borrowers at
the time they take out the loan. If a borrower dies, the proceeds of the policy repay
the loan directly to the lender or creditor.

6. Mortgage insurance

This decreasing term coverage is designed to pay off the unpaid balance of
amortgage if you die before the mortgage is paid off. Premiums are generally
levelthroughout the term of the policy. The policy is usually independent of
themortgage, meaning that the financial institution granting the mortgage is
separatefrom the insurance company issuing the policy. The proceeds of the policy
are paid to the beneficiaries of the policy, not the mortgage company. The
beneficiaryis not required to use the proceeds to pay off the mortgage

7. Annuity

An annuity is a form of insurance that enables you to save for your retirement.
Basically, you give the insurance company money for a certain period of time,and
then after you retire they will pay you a certain amount of money every year until
you die. There are many different forms of annuities. . Most people who
buyannuities are 55 or older

3.2 profile of the organization

1] OM KOTAK MAHINDRA LIFE INSURANCE COMPANY
Established in 1985 as Kotak Capital Management Finance promoted by UdayKotak
the company has come a long way since its entry into corporate finance. It has
dabbled in leasing, auto finance, hire purchase, investment banking, consumer
finance, broking etc. The company got its name Kotak Mahindra as industrialists
Harish Mahindra and Amanda Mahindra picked a stake in the company. Kotak
Mahindra is today one of India's leading Financial Institutions Old Mutual plc is an
international financial services group based in London with expanding operations
in life assurance, asset management, banking and general insurance. Old Mutual is
listed on the London Stock Exchange (where it is included on the FTSE 100 Index)
and also on the South African, Namibian, Malawi and Zimbabwe stock exchanges.
It has 156 years of experience in the life insurance business. The

Products offered by the Company is

1. Individual Plan
•Kotak Endowment Plan

•Kotak Term Plan

•Kotak Retirement Income Plan

•Kotak Child Advantage Plan

•Kotak Preferred Term Plan

•Kotak Capital Multiplier Plan

•Kotak Safe Investment Plan

2. Group Plan
•Kotak Term Group plan

•Kotak Gratuity Group plan

•Kotak Credit Term Group plan

•Riders
•Exclusions Under Riders

•Rural

•Kotak Gramina Bima Yojana

ICICI PRUDENTIAL LIFE INSURANCE COMPANY

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,a
premier financial powerhouse, and prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst
the first private sector insurance companies to begin operations in December 2000
after receiving approval from Insurance Regulatory Development Authority
(IRDA).ICICI Prudential’s equity base stands at Rs. 925 crore with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. In the quarter ended June
30,2005 , the company garnered Rs 335 crore of new business premium for a total
sumassured of Rs 2,619 crore and wrote 111,522 policies. For the past four years,
ICICIPrudential has retained its position as the No. 1 private life insurer in the
country, with awide range of flexible products that meet the needs of the
Indian customer at every stepin life.

Products offered by ICICI Prudential are

1. Savings Plan
•Smart kid

•Life Time

•Save ‘n’ Protect

•Cash Back

2. Protection plan

•Life Guard

•Extra Protection Through

•Riders

3. Retirement Plans

•Forever Life

•Life link pension

•Life time pension

•Reassure

4. Investment Plans

•Assure Invest

•Life Link

5. Group plans

•Group Superannuation

•Group Gratuity

•Group Term Assurance

 CHAPTER 4
ANALYSIS AND INTERPRETATION
4.1 INTRODUCTION TO ANALYSIS:
In order to extract meaningful information from the data them. The analysis can be
conducted by using simple statistical tools like percentages, averages and measures
of dispersion. Alternatively the collected data may be analyzed, the data analysis is
carried out. The data are first edited, coded and tabulated for analyzing by using
diagrams, graphs, charts, pictures etc. Data analysis is the process of planning the
data in an ordered form, combining them with the existing information and
extracting from them. Interpretation is the process of drawing conclusions from the
gathered data in thestudy. In this research the researcher has analyzed the data
using percentages and graphs.

4.2 DATA ANALYSIS TOOLS USED:

In this research the data analysis tools used are percentages and graphs. The
various attributes were analyzed separately and the importance to each was
calculated on the basis of the percentage. The rank having the
maximum percentage was taken to be preferred importance to the particular
attribute. After looking at each attribute separately, all the attributes were
considered together to develop a map on the most preferred rank for all the
attributes.
 CHAPTER 5
FINDINGS, CONCLUSION ANDSUGGESTIONS
5.1 FINDINGS
•The majority of respondents belonged to the age group of 19 to 28years which
formed 48% followed by age group of 29 to 38 years which formed 26%.

•The male consumers capture the Market share with 68%, followed byte female
consumers with 32%

•The majority of the consumers of life insurance companies are private employees
with 48% and Government employees with 40%

•The dominant income group having life insurance group belong to thegroup of
10001 to 15,000 followed by 5,001 to 10,000.

•LIC has a major market share of 78%.

•The factors which influenced to select a life insurance company is the personal
factor, followed by family, friends, agents and advertisements.

•The value of respondents life insurance policy costs more than1, 00,000 followed
by 50,000 to 1,00,000.
•Majority of the people (52%) prefer to invest in bank others (48%) prefer to invest
in insurance company.

•Majority of consumers are satisfied with the service and quality of products of
their life insurance companies.

•Majority of consumers (78%) would like to communicate the serviceoffered by life

insurance companies.

•Majority of consumers (58%) are aware about 5 to 7 life insurancecompanies.

•LIC stands first followed by ICICI prudential, followed by HDFCStandard Life.

5.2 CONCLUSION

An Insurance policy is an investment oriented plan. As compared to other

investment plans, the investment portfolio of the Insurance Policy functions like a
mutual fund and other investment. It is invested in a portfolio of debt and equity
instruments, inconformity with the announced investment policy. Hence it grows
or erodes in line with the performance of that portfolio. From this study it reveals
that the consumer’s attitude towards Insurance Policy and Insurance Company
changed a lot. A 5 years before the consumers and the general public were not
interested to take an Insurance Policy but now days there are many options and
choices in front of the customers. They are interested to take high return policies
in order to secure their lives. People are aware of all the benefits and returns of
insurance policies. As a result of this new international and domestic companies
are coming to the Indian Market.Since there are many players in the Indian
Insurance Market the competition level is very high. So the companies are
introducing new schemes. From this it is found that The LIC is the major market
share holder in the insurance field. Even if there are many players inthis field still it
is an untapped market. Only a few portion of Indian population is insured.

5.3 RECOMMENDATIONS AND SUGGESTIONS

With regard to insurance companies, consumers respond at different rates,
depending on the consumers characteristics. Hence Insurance companies
should try to bring their new product to the attention of potential early adopters

.a) Due to the intense competition in the life insurance market, the life
insurance companies have to adopt better strategies to attract more customers.

b) Keeping the cost, quality and return on investment in tact is necessary in order
to tackle the competition.

c) Life insurance products are taken mainly by middle and higher income group
.Hence they should be regarded as maim targeted income groups. Life
insurance products which are suitable for lower income group should also be
released so that the market share increases.

d) Return on investment, company reputation and premium outflow are

most preferred attributes that are expected by the respondents.

e) Private life insurance companies should adopt effective promotional strategies

to increase the awareness level among the consumers.

f) Life insurance companies should ask for their consumer feedback to know
whether the consumers are really satisfied or dissatisfied with the service
and product of the companies. If they are dissatisfied , then the reasons
for dissatisfaction should be found out and should be corrected in future.

g) The LIC brand name has earned a lot of goodwill and enjoys a high brand equity.
As there is intense competition in life insurance market, LIC should work hard to
maintain its top position and offer better service and product. whether the
consumers are really satisfied or dissatisfied with the service and product of the
companies. If they are dissatisfied , then the reasons for dissatisfaction should be
found out and should be corrected in future. g) The LIC brand name has earned a
lot of goodwill and enjoys a high brand equity. As there is intense competition in
life insurance market, LIC should work hard to maintain its top position and offer
better service and product.

ANNEXURE
QUESTIONNAIRE:
 CHAPTER 6
BIBLIOGRAPHY
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 LIC Annual Reports.

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 Publication. Mishra M.N. (2002) Law of insurance CLA.

 M. J. Mathew (1998) Insurance (theory and practices) , RBSA Publishers.

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 Haleferies. ICICI Prudential Annual Reports.

 Westfall Reports Boyal Halper W. (1998) Marketing Research , INC.

Newspapers:

• Economic Times

• Business Line

World Wide Web:

• www.lic.com

• www.irda.org

• www.wikipedia.com

 www.bimaonline.com

 www.licindia.com

 www.absolutelowestrates.com / glossary

 www.banknorth.com / insurance

 www.farmers.com /farm comm.

 www.finet.com / hk/ insurance

 www.google.co.in definition of insurance

 www.iciciprudential .com

 www.insuranceleacon.com

 www.irda.org

 www.msagroup.co
THANK YOU…..!!!!!