SUMMER TRAINING PROJECT REPORTON

“Insurance investment is a better than other financial instrument?”IN

BMA Wealth Creator

SUBMITTED IN PARTIAL FULFILLMENT OFDEGREE OF

MASTERS OF BUSINESS ADMINISTRATIONSESSION (2009-2011)

PAPER CODE-(CP-303)

SUBMITTED BY:

Radhey Shyam

MBA 3rd SEM

University Roll No.

SUBMITTED TOICL INSTITUTE OF MANAGEMENT AND TECHNOLOGY

SOUNTLI

(KURUKSHETRA UNIVERSITY, KURUKSHETRA)

1

DECLARATION

I hereby declare that, the project entitled “Insurance investments is better than other

financial instruments?” assigned to me for the partial fulfillment of MBA degree from

Kurukshetra University, Kurukshetra. The work is originally completed by me and the

information provided in the study is authentic to the best of my knowledge.

This study has not been submitted to any other institution or university for the award of

any other degree.

Radhey Shyam

MBA 3rd SEM University Roll. No

2

ACKNOWLEDGEMENT

“Gratitude is the hardest of emotions to express and one often does not find adequate

words to convey what one feels and trying to express it”

The present project file is an amalgamated of various thoughts and experiences .The

successful completion of this project report would have not been possible without the

help and guidance of number of people and specially to my project guide in the company

Mr. Pardeep Kumar, BMA wealth creator. I take this opportunity to thank all those who

have directly and indirectly inspired, directed and helped me towards successful

completion of this project report.

I am also immensely indebted to my project guide, Ms Sandhya kaushal Lecturer, ICL,

for his illumining observation, encouraging suggestions and constructive criticisms,

which have helped me in completing this research project successfully.

There are several other people who also deserve much more than a mere

acknowledgement at their exemplary help. I also acknowledge with deep sense of

gratitude and wholehearted help and cooperation intended to me by them.

Radhey Shyam

3

PREFACE

Summer Training is the bridge for a student that takes him from his theoretical

knowledge world to practical industry world. The main purpose of industrial visit is to

expose for industrial and business environment, which cannot be possible in the

classroom.

The advantages of this sort of integration, which promotes guided to corporate culture,

functional, social and norms along with formal teaching are numerous.

1) To bridge the gap between theory and practical.

2) To install the feeling of belongingness and acceptance.

3) To help the student to develop the better understanding of the concept and

questions already raised or to be raised subsequently during their research period.

The present report gives a detailed view of the “Insurance investment is better than

other financial instruments?”The research is definitely going to play an important role

in developing an aptitude for hard self-confidence.

4

TABLE OF CONTENTS

Chapter 1: Life Insurance Industry Industry profile

important milestones in the life insurance business

Insurance sector reforms

Contribution of Life Insurance in the Economy

Flow of Insurance Industry in India

Structure of life Insurance Industry

Life Insurance industry

Aggregation of Long Term Saving

Spread of financial services in rural Areas

Long term funds for infrastructure Development of Capital Markets/Economic Growth

Employment generation

Growth Potential

Phase of transition

Chapter 3:Company Profile

BMA wealth creator

Chapter5:Research methodology

Chapter6:Objective of research

Chapter7:Intoduction to project

Other financial instruments

Products and plans

5

Special features

Chapter 8: Data Analyses and interpretation

Chapter 9: ConclusionChapter 10: LimitationsChapter 11: Suggestion Chapter 12:ReferencesChapter 13: Annexure

6

Chapter 1:

Industrial profile

Important miles stone in the insurance business

7

Insurance sector reforms

Contribution of life insurance in the economy

Flow of insurance industry in India

Structure of life insurance industry

Life insurance industry

Aggregation of long term savings

Spread of financial services in rural areas

Long term funds for infrastructure development

Brief History of the Insurance Sector in India

8

The business of life insurance in India in its existing form started in India in the year

1818 with the establishment of the Oriental Life Insurance Company in Calcutta. 

The story of insurance is probably as old as the story of mankind. The same instinct that

prompts modern businessmen today to secure themselves against loss and disaster existed

in primitive men also. They too sought to avert the evil consequences of fire and flood

and loss of life and were willing to make some sort of sacrifice in order to achieve

security. Though the concept of insurance is largely a development of the recent past,

particularly after the industrial era – past few centuries – yet its beginnings date back

almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818. Oriental

Life Insurance Company started by Europeans in Calcutta was the first life insurance

company on Indian Soil. All the insurance companies established during that period were

brought up with the purpose of looking after the needs of European community and these

companies were not insuring Indian natives. However, later with the efforts of eminent

people like Babu Muttylal Seal, the foreign life insurance companies started insuring

Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra

premiums were being charged on them. Bombay Mutual Life Assurance Society heralded

the birth of first Indian life insurance company in the year 1870, and covered Indian lives

at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance

companies came into existence to carry the message of insurance and social security

through insurance to various sectors of society. Bharat Insurance Company (1896) was

also one of such companies inspired by nationalism. The Swadeshi movement of 1905-

1907 gave rise to more insurance companies. The United India in Madras, National

Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were

established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth

in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in

Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay

Life) were some of the companies established during the same period. Prior to 1912 India

had no legislation to regulate insurance business. In the year 1912, the Life Insurance

Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies

9

Act 1912 made it necessary that the premium rate tables and periodical valuations of

companies should be certified by an actuary. But the Act discriminated between foreign

and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business.

From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176

companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming

of insurance companies many financially unsound concerns were also floated which

failed miserably. The Insurance Act 1938 was the first legislation governing not only life

insurance but also non-life insurance to provide strict state control over insurance

business. The demand for nationalization of life insurance industry was made repeatedly

in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance

Act 1938 was introduced in the Legislative Assembly. However, it was much later on the

19th of January 1956 that life insurance in India was nationalized. About 154 Indian

insurance companies, 16 non-Indian companies and 75 provident were operating in India

at the time of nationalization. Nationalization was accomplished in two stages; initially

the management of the companies was taken over by means of an Ordinance, and later,

the ownership too by means of a comprehensive bill. The Parliament of India passed the

Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance

Corporation of India was created on 1st September, 1956, with the objective of spreading

life insurance much more widely and in particular to the rural areas with a view to reach

all insurable persons in the country, providing them adequate financial cover at a

reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its

corporate office in the year 1956. Since life insurance contracts are long-term contracts

and during the currency of the policy it requires a variety of services need was felt in the

later years to expand the operations and place a branch office at each district headquarter.

Re-organization of LIC took place and large numbers of new branch offices were opened.

As a result of re-organization servicing functions were transferred to the branches, and

branches were made accounting units. It worked wonders with the performance of the

10

corporation. It may be seen that from about 200.00 Corers of New Business in 1957 the

corporation crossed 1000.00 Corers only in the year 1969-70, and it took another 10 years

for LIC to cross 2000.00 crore mark of new business. But with re-organization happening

in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on

new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices,

7 zonal offices and the corporate office. LIC’s Wide Area Network covers 100 divisional

offices and connects all the branches through a Metro Area Network. LIC has tied up

with some Banks and Service providers to offer on-line premium collection facility in

selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer

convenience. Apart from on-line Kiosks and IVRS, Info Centers have been

commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New

Delhi, Pune and many other cities. With a vision of providing easy access to its

policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite

offices are smaller, leaner and closer to the customer. The digitalized records of the

satellite offices will facilitate anywhere servicing and many other conveniences in the

future.

From then to now, LIC has crossed many milestones and has set unprecedented

performance records in various aspects of life insurance business. The same motives

which inspired our forefathers to bring insurance into existence in this country inspire us

at LIC to take this message of protection to light the lamps of security in as many homes

as possible and to help the people in providing security to their families.

Some of the important milestones in the life insurance business in India are:

11

1850Non life insurance debuts with triton insurance company. 1870 Bombay mutual life assurance society is the first Indian owned life insurer 1912 The Indian Life Assurance 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 businesses.

1938 Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956 245 Indian and foreign insurers and provident societies taken over by the central

government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,

with a capital contribution of Rs. 5 Crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in the

year 1850 in Calcutta by the British. Some of the important milestones in the general

insurance business in India are:  

1907    The Indian Mercantile Insurance Ltd. set up, the first company to transact all

classes of genera linsurancebusiness. 

1957    General Insurance Council, a wing of the Insurance Association of India, frames a

code of conduct for ensuring fair conduct and sound business practices. 

1968    The Insurance Act amended to regulate investments and set minimum solvency

margins and the Tariff Advisory Committee set up. 

1972    The General Insurance Business (Nationalization) Act, 1972 nationalized the

general insurance business in India with effect from 1st January 1973. 107 insurers

amalgamated and grouped into four companies’ viz. the National Insurance Company

12

Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and

the United India Insurance Company Ltd. GIC incorporated as a company.

Insurance sector reforms

13

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. 

  

The Malhotra committee was set up with the objective of complementing the reforms

initiated in the financial sector. The reforms were aimed at “creating a more efficient and

competitive financial system suitable for the requirements of the economy keeping in

mind the structural changes currently underway and recognizing that insurance is an

important part of the overall financial system where it was necessary to address the need

for similar reforms…”   In 1994, the committee submitted the report and some of the key

recommendations included.

1997    Insurance regulator IRDA set up 

2000    IRDA starts giving licenses to private insurers: Kotak Life Insurance

ICICI prudential and HDFC Standard Life insurance first private insurers to sell a

policy 

2001    Royal Sundaram Alliance first non life insurer to sell a policy 2002   

Banks allowed to sell insurance plans.

14

The Insurance Regulatory and Development Authority (IRDA)

The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act as a strong and powerful supervisory and regulatory authority for insurance. Post

nationalization, the role of Controller of Insurance diminished considerably in significance since the Government owned the insurance companies.

  But the scenario changed with the private and foreign companies foraying in to the

insurance sector. This necessitated the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken

time, the then Government constituted through a Government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation.

  The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938,

the Life Insurance Corporation Act, 1956 and the General insurance Business (Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of

India (for life insurance business) and General Insurance Corporation and its subsidiaries (for general insurance business).

  The act extends to the whole of India and will come into force on such date as the Central Government may, by notification in the Official Gazette specify. Different dates may be

appointed for different provisions of this Act.  

The Act has defined certain terms; some of the most important ones are as follows  

appointed day means the date on which the Authority is established under the act. Authority means the established under this Act.

Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up by the Central Government through Resolution No. 17(2)/ 94-lns-V dated the 23rd

January, 1996.  

Words and expressions used and not defined in this Act but defined in the Insurance Act, 1938 or the Life Insurance Corporation Act, 1956 or the General Insurance Business (Nationalization) Act, 1972 shall have the meanings respectively assigned to them in

those Acts  

A new definition of "Indian Insurance Company" has been inserted. "Indian insurance company" means any insurer being a company (a) which is formed and registered under

the Companies Act, 1956 (b) in which the aggregate holdings of equity shares by a foreign company, either by

itself or through its subsidiary companies or its nominees, do not exceed twenty-six per

15

cent. Paid up capital in such Indian insurance company (c) whose sole purpose is to carry on life insurance business, general insurance business or re-insurance business.

 FLOW OF Insurance Industry in India

• Structure of Insurance Industry: Snap Shot

• Contribution to Indian Economy

• Special Features

STRUCTURE OF INSURANCE INDUSTRY: Snap Shot

Historical Perspective(i) Prior to 1956 242 companies operating(ii) 1956 - 2001 Nationalization – LIC monopoly player – Government control(iii) 2001 -- Opened up sector

16

IndustrySnap Shot - Contd.• (a) LIC – Fully owned by Government (b) Postal Life Insurance• (ii) Private players -1. Bajaj Allianz Life Insurance Co. Ltd.2. Birla Sun Life Insurance Co. Ltd. (BSLI)3. HDFC Standard Life Insurance Co. Ltd. (HDFC STD LIFE)4. ICICI Prudential Life Insurance Co. Ltd. (ICICI PRU)5. ING Vysya Life Insurance Co. Ltd. (ING VYSYA)6. Max New York Life Insurance Co. Ltd. (MNYL)7. MetLife India Insurance Co. Pvt. Ltd. (METLIFE)8. Kotak Mahindra Old Mutual Life Insurance Co. Ltd.9. SBI Life Insurance Co. Ltd. (SBI LIFE)10. TATA AIG Life Insurance Co. Ltd. (TATA AIG)11. Reliance Life Insurance12. Aviva Life Insurance Co. Pvt. Ltd. (AVIVA)13. Sahara India Life Insurance Co. Ltd. (SAHARA LIFE)14. Shriram Sunlam• (iii) Other likely players – PNB Life Insurance, Axa Bharti Enterprises

17

Potential of the Insurance sector:

Source: Financial Express-Delhi.

Market share:

2005-06 2006-07 2008-09 2009

LIC98% 94% 87% 78%

PrivatePlayers

2% 6% 13% 22%

Industry growth rate at 36% (2004-05) with premium income From new business. Source: Financial Express- Delhi

Market Share

18

Total population 1.1 billion

Total population of Insurable class

253 millions

Total population Insured

88.5 millions

CONTRIBUTION TO INDIAN ECONOMY

19

Company Indian Promoter/

Partner

Foreign Insurance

Market share based on premium

Aviva life Dabur Aviva, UK 1.12Bajaj Allianz Bajaj Auto Allianz,

Germany6.12

Birla sun life Aditya Birla group

Sun Life, Canada

1.84

HDFC Standard

HDFC Standard Life, UK

2.96

ICICI Prudential

ICICI Bank Prudential, UK 7.11

ING Vysya Vysya Bank ING Insurance, Netherlands

0.63

Kotak Mahindra, Old Mutual

Kotak Mahindra

Bank

Old Mutual South Africa

0.71

Max New York

Max India New York Life, US

1.32

MetLife Jammu & Kashmir Bank

MetLife, US 0.40

Sahara Life Insurance

Sahara India None 0.80

SBI Life SBI Cardiff, France 1.52Tata AIG Tata Group AIG, US 1.78

(i) Life Insurance is the only sector which garners

long term savings

(ii) Spread of financial services in rural areas and

amongst socially less privileged

(iii) Long term funds for infrastructure

(iv) Strong positive correlation between

development of capital markets and insurance/

pension sector

(v) Employment generation

Aggregation of Long Term Savings

(i) Total Assets of Life Insurance Companies

2005-2006 2006-2007 2007-20082,80,450Cr 3,52,608Cr 4,23,000 Cr

20

(ii) Total Premium generated

2005-2006 2006-2007 2007-200894,000 Cr 1,12000 Cr 1,33,000 Cr

(iii) Industry is growing @ 19 p.a.

(v) Life Insurance funds account for 15% of household savings.

(vi)The industry has the potential to increase the share to 20%.

Spread of financial services in rural areas and amongst socially underprivileged

• IRDA Regulations provide certain minimum business to be done

(i) In rural areas

(ii) In the socially weaker sections

• Life Insurance offices are spread over nearly

1400 centers.

• Presence of representative in every tensile –

deeper penetration in rural areas.

• Insurance agents numbering over 6.24 lakhs

in rural areas.

• Policies sold in rural areas (2004-05) - No. of

policies - 55 lakhs Sum assured 46,000 cr

• Social security - No. of lives covered 2003-04

17.4 lakhs 2004-05 42.1 lakhs

Long term funds for infrastructure

21

• For GDP to grow at 8 to 10%, qualitative improvement in infrastructure is essential.

• Estimates of funds required for development of infrastructure vary widely.

• An investment of 6, 19,600 crore is anticipated in the next 5 years (Source : SSKI India)

• Tenure of funding required for infrastructure

normally ranges from 10 to 20 years.

• Major portion of these funds are routed through debt/private equity

participation

Development of Capital Markets/Economic Growth

•Industry also contributes in economic development through investments in capital

market. Present level of investments is over Rs. 40,000 crore. (Mark to Market basis

around 80,000 Crores).

•Annual Investment of around 9000 Crores in capital markets.

•Contribution to Five Year Plans9th Plan 2, 30,900 Crores Last Two Years 1, 70,900

Crores

• Helps inculcate a sense of security by protecting earning of people in case of untimely

death. Benefits to Policy Holders

2005-2006 2006-2007 2007-2008

20,800 Cr 24,200 Cr 28,700 Cr

EMPLOYMENT GENERATION

22

• Life insurance industry provides increased

employment opportunities.

• Employees in insurance sector as on 31st March,

2005 is around 2 lakhs.

• Many agents depend on insurance for their

Livelihood–No. of agents on 31st March 2004 –

15.59 lakhs

•Brokers, corporate agents, training establishments

provide extra employment opportunities.

• Many of these openings are in rural sectors.

23

Chapter 2:

Company profile

Company Overview

BMA Wealth Creators Pvt., Ltd. operates as a financial services organization in India. It

provides individual and corporate financial and investment solutions. BMA Wealth

24

Creators Pvt., Ltd. was formerly known as BMA Stock Broking Pvt., Ltd. and changed its

name in July 2007. The company was incorporated in 2004 and is based in Kolkata,

India.

A premier financial services organisation providing individual and corporates with

customized financial solutions. We work towards understanding your financial goals and

risk profile. Our expertise combined with thorough understanding of the financial

markets results in appropriate investment solutions for you. At Wealth Creators we

realize your dreams, needs, aspirations, concerns and resources are unique. This is

reflected in every move we make with and for you. We have deep appreciation for the

Value of building an everlasting relationship with YOU.

We inherit the legacy of BMA group which has been one of the dominant entities in

Ferrous and Ferro Alloy industry in India. The BMA Group has created its niche in by

promoting successful ventures in the fields of coal mining, refractory, steel and ferro

alloy. The strive to achieve excellence and dynamic growth has been possible through

optimum mix of technology, customer orientation, best business practices, forging

alliances, high quality standards and proactive business culture. Millenium City

Management team

Our Company is managed by a team of highly qualified and experienced professionals

from the finance industry across the country. Know more about them:

ANUBHAV BHATTER

As the Managing Director and Chief Executive Officer, Mr Anubhav Bhatter is

the guiding force of the Company. A graduate in Commerce from St Xaviers

College, Kolkata and a Chartered Financial Analyst, Mr Anubhav Bhatter

25

founded one of the leading financial services company in India, BMA Wealth

Creators Limited. With over nine years of financial experience, he has set new

standards and established niche operations to bring BMA Wealth Creators

Limited to a position that it has reached today.

AVINASH AGARWALLA

An MBA from Xavier Institute of Management, Bhubaneshwar, Mr Avinash

Agarwal is the voice of knowledge on the Board of Directors of the Company.

With over nine years of severe market experience in Financial as well as the

Product Manufacturing industry, Mr Avinash Agarwal has given shape to the

growth of BMA Wealth Creators Limited. With an extensive knowledge of the

nuances involved in the financial sector and a strong foot hold over the market,

the entire Group looks up to his contribution.

ASIT KUMAR GHOSH

A pillar of strength to the Company, Asit Kumar Ghosh has been associated with

BMA Wealth Creators Limited since the day of its inception. Having joined in the

capacity of a Vice President, currently he is operating as Director, BMA Wealth

Creators Limited. From establishing and strengthening the customer base to

setting up the entire Retail Channel, he has played a vital role in the formation of

the Company.

A Bachelor of Science from the University of Kolkata and a Post Graduate in

Computer Applications, Mr Asit Kumar Ghosh has worked in the capacity of

various managerial positions for numerous organizations including Alliance

Credit & Investments, Tata TD Waterhouse, Anagram Securities and IL&FS

where he successfully proved his worth. With over fifteen years of experience and

his extensive knowledge, Mr Ghosh keeps adding value to the Company.

26

SHIV KUMAR DAMANI

Experience is the greatest education. And you know it when you meet Mr Shiv

Kumar Damani. With a financial career spanning over twenty years, currently he

is operating as Director, BMA Wealth Creators Limited. He has been associated

with the Company since its inception and ever since, he has nurtured the growth

and operation of the Company just as a parent would do for its child.

A Bachelor in Commerce from the University of Calcutta, Mr Shiv Kumar

Damani has studied the financial market from close quarters to manage the risks

involved while working towards the benefit of the Company and the people it is

associated with, thus saving them the wrath of the global economic slowdown.

SAIKAT GANGULY

With over twelve years of financial market experience, Saikat’s knowledge of the

industry is comprehensive. A certified Chartered Financial Analyst and an MBA

from Birla Institute of Management, he held several top managerial positions in

various organizations including Reliance Money before he joined BMA Wealth

Creators Limited in the year 2009 as its Chief Operating Officer.

Ever since, he has led BMA Wealth Creators Limited in handling several niche

Sales, Distribution and Product Management initiatives. He has been instrumental

in setting the pan India foot print of the organization by setting up Branches and

distribution network in every nook and corner of the country. His extensive

knowledge, along with his leadership skills will surely help BMAWC touch

zenith.

Mission & vision

27

MISSION

      To be a premier financial supermarket providing integrated investment

services.

VISION

      To provide integrated financial services building investor wealth and

Confidence.

28

Chapter 3

RESEARCH METHODOLOGY

Research always starts with a question or a problem. Its purpose is to question through

the application of the scientific method. It is a systematic and intensive study directed

towards a more complete knowledge of the subject studied. Marketing research is the

function which links the consumer, customer and public to the marketer through

29

information- information used to identify and define marketing opportunities and

problems generate, refine, and evaluate marketing actions, monitor marketing actions,

monitor marketing performance and improve understanding of market as a process.

Marketing research specifies the information required to address these issues, designs,

and the method for collecting information, manage and implemented the data collection

process, analyses the results and communicate the findings and their implication.

I have prepared our project as descriptive type, as the objective of the study demands the

answers of the question related to find the “Insurance investment is better than

other financial investment?”

The Marketing Research Process

As marketing research is a systemic and formalized process, it follows a certain sequence

of research action. The marketing process has the following steps:

Formulating the problems

Developing objectives of the research

Designing an effective research plan

Data collection techniques

Analysis and Interpretation of Data

Evaluating the data and preparing a research report design

The Research Methodology here includes: -

1. Meaning of research

2. Research problem

3. Research design

4. Sampling design

5. Data collection method

Meaning Of Research

Research is defined as "a scientific & systematic search for pertinent information

on a specific topic. Research is an art of scientific investigation. Research is a

30

systematized effort to gain new knowledge. It is a careful investigation or inquiry

especially through search for new facts in any branch of knowledge. Research is an

academic activity and this term should be used in a technical sense. Research com prices

defining and redefining problems, formulating hypothesis or suggested solutions; making

deductions and reaching conclusions to determine whether they fit the formulating hypo

thesis. Research is thus, an original contribution to the existing stock of knowledge

making for its advancement. The search for knowledge through objective and systematic

method of finding solution to a problem is research.

Research Problem

The first step while conducting research is careful definition of Research problem.

Research Design

A research design is the arrangement of conditions for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in

procedure. Research design is the conceptual structure within which research is

conducted. It constitutes the blueprint for the collection measurement and analysis of

data. Research design includes an outline of what the researcher will do from writing the

hypothesis and its operational implication to the final analysis of data.

A research design is a framework for the study and is used as a guide in collecting

and analyzing the data. It is a strategy specifying which approach will be used for

gathering and analyzing the data. It also includes the time and cost budget since most

studies are done under these two constraints.

Research design can be categorized as:

Exploratory Research

Descriptive Research

Diagnostic Research

Experimental Research

31

The present study is exploratory in nature, as it seeks to discover ideas and insight and to

bring out new relationships. Research design is flexible enough to provide opportunity

for considering different aspects of problems under study. It helps in bringing into focus

some inherent weakness in enterprise regarding which in depth study can be conducted

by management.

Sampling Design

Sampling is necessary because it is almost impossible to examine the entire

parent population (i.e. the entire universe) various factors such as time available, cost,

purpose of study etc. make it necessary for the researchers to choose a sample. It should

neither be too small nor too big. It should be manageable. The sample size of post one

year is taken for present study due to time limitation.

Data Collection Method

After the sample has been taken the type of information to be sought was decided

upon, the next step is to collect the data. As the data collected is to be the base of

what we plan to find out, the relevant care should be taken that the errors in methods

of collection of data involved are minimized. The factors of availability of time, cost

and human involvement come to affect the reliability of the data collected. Broadly

there are two types of data:\

Primary data

Secondary data.

Secondary data means the statistics not gathered for the immediate study at hand but for

some other data. It is the date collected by someone for purposes other than solving the

problem being investigated. On the other hand primary data are generated in a study

specifically designed to accommodate the data needs of the problem at hand. In the

present study we have made use of secondary data collected from their website and from

there records.

32

Research design:

Research Design helps in establishing the way the researcher to go about to

receive the objective of the study.

Acc. to Paulen V Young –

Research design is a logical and systematic planning & deriving a piece of

research. The design results from translating general specific model into various research

procedures.

A research design is the arrangement of conduction for the collection & analysis

of the data in the manner that aims to combine relevance to the research with economy in

procedure. The research design is a conceptual with in which the research is conducted.

It constitutes the method for collection, measurement and analysis. The research design

used in my study is basically descriptive in nature.

Sample design:

Sampling refers to the method of selecting a sample from a given universe with

a view to draw conclusions about that universe. A sample is a representative of the

universe selected for study.

A sample design is a define plan for obtaining a sample from a given population

.It refers to the technologies or the procedure the researcher would adopt in selected items

for the sample.

Sample size :

This refers to the number of it respondents to be selected from the universe to

constitute a sample. The size of sample should neither be excessively large, nor too small.

It should be optimum. The sample size of this research was 100

Analysis And Interpretation Of Data

The data collected in the aforesaid manner have been tabulated in condensed form

to draw the meaningful results. The different techniques are adopted to analyze a data.

33

All the data and the material is arranged through internal resources and the last

part of the project consist of the conclusions drawn from the report, a brief summary and

recommendations and giving the final touch to the report by stating an conclude

34

Chapter 4:

35

Objective behind the project is as follows:

To aware the customer about financial instruments

Aim to help customers take important financial decisions at

every stage in life by offering them a wide range Of innovative life

insurance products, to make them financially independent.

36

Chapter 5:

Introduction to project

About the project

Special features

Product and plans

37

Other financial instruments

About the project

38

The service industry is one of the fastest growing sectors in India today. The upcoming

sectors which are really showing the graph towards upwards are - Telecom, Banking, and

Insurance. These sectors really have a lot of responsibility towards the economy.

Amongst the above-mentioned areas insurance is one sector, which took a lot of time in

positioning itself. The insurance business of non-life companies was not much in

problems but the major problem was with life insurance. Life Insurance Corporation of

India had monopoly for more than 45 years, but the picture then was completely

different. Previously people felt that “Insurance is only for classes not for masses” but

now the picture is vice-versa.

The story of insurance is probably as old as the story of mankind. The same instinct that

prompts modern businessmen today to secure themselves against loss and disaster existed

in primitive men also. They too sought to avert the evil consequences of fire and flood

and loss of life and were willing to make some sort of sacrifice in order to achieve

security. Though the concept of insurance is largely a development of the recent past,

particularly after the industrial era – past few centuries – yet its beginnings date back

almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818. Oriental

Life Insurance Company started by Europeans in Calcutta was the first life insurance

company on Indian Soil. All the insurance companies established during that period were

brought up with the purpose of looking after the needs of European community and these

companies were not insuring Indian natives. However, later with the efforts of eminent

people like Babu Muttylal Seal, the foreign life insurance companies started insuring

Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra

premiums were being charged on them. Bombay Mutual Life Assurance Society heralded

the birth of first Indian life insurance company in the year 1870, and covered Indian lives

at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance

companies came into existence to carry the message of insurance and social security

through insurance to various sectors of society. Bharat Insurance Company (1896) was

also one of such companies inspired by nationalism. The Swedish movement of 1905-

39

1907 gave rise to more insurance companies. The United India in Madras, National

Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were

established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth

in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in

Calcutta. The Indian Mercantile, General Assurance and Swedish Life (later Bombay

Life) were some of the companies established during the same period. Prior to 1912 India

had no legislation to regulate insurance business. In the year 1912, the Life Insurance

Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies

Act 1912 made it necessary that the premium rate tables and periodical valuations of

companies should be certified by an actuary. But the Act discriminated between foreign

and Indian companies on many accounts, putting the Indian companies at a disadvantage.

The formation of IRDA, entrance of private life insurance companies into India with one

foreign partner, compulsory training of Insurance agents etc. developments started to take

place. And this was the time when these companies started searching for proper channel

partners who can help the organization in expanding its network and business in India.

Channel partners are those who are going to be into direct selling of company’s products

i.e. the insurance policies. They are the link between the customers and the management

or company. These channel partners are people with different profiles. They are selected

on some grounds like their network of people, their problem handling ability, convincing

power and lot many things.

The main idea behind company’s Questionnaire Survey is to find out and analyze the

proper profile that can be recruited by company as a channel partner. Company has been

focusing on some of the profile that can be very beneficial for the company. For example

Chartered Accountants, Tax Consultants, Postal agents, Bank’s Daily Collection Agents

etc. the main idea behind targeting the above profile is strong client network which is

really very important for an insurance company.

40

The project title is “Insurance investment is better than other financial

investments?”. This shows the scope for private insurance companies have great

opportunities to cover the market and can insure the customer. With the initiation of the

deregulation in the Indian insurance market, the monopoly of big public sector companies

in life insurance market has been broken. New private players have entered the market

and with their innovative approaches and better use of distribution channels and

technology, they are eating in to the shares of established public sector companies in

Indian Insurance Market. Since the deregulation has been put in to place, the market

share of LIC has come down to 71.4% in life insurance market while the private players

have captured around 17% market in the general insurance segment. This report includes

the key private players in the insurance market such as ICICI Prudential, Kodak Life

Insurance Bajaj Allianz, Birla Sun life, and TATA AIG. It also includes the leading

competitors in the life insurance and general insurance segments along with their market

shares

. SPECIAL FEATURES

41

• Tax clubbing of various savings short term and long term into same bracket have a bias

towards short term savings.

• Distinction between the short term savings and long term savings is critical from

investor’s point of view. More prone to inflationary pressures

• Clearly, long term savings more than 10 years deserve special tax

42

43

Life insurance makes saving possible

One constantly meets with those whose argument against life

insurance is that they prefer to save. The habit of saving should by

all means he encouraged but it should be borne in mind that the

saving of a competence involves the necessary time to save, and

that life insurance is the only certain method to use as a hedge

against the possibility of the saving period being cut short. A

policy of saving can yield only a small amount at the start, while a

policy of insurance from its beginning guarantees the full face

value and thus safeguards the policyholder against failure through

early death to have sufficient time to save adequately through

other channels. Thus, if one is able to save $500 annually it will

take nearly fifteen years to accumulate a fund of $10,000,

assuming that the accumulations are safely invested annually at 4

percent, compound interest. Yet the resolution of the head of the

family to protect the home with such a savings fund is contingent

upon his surviving the full period, and may be defeated by death

before the savings have reached any appreciable sum. To depend

entirely oh saving as a means of providing for the future of the

family is, to say the least, a highly uncertain policy to pursue. The

first requisite in providing for the future support of dependents is

absolute certainty, and this can be secured only by using life

insurance as a hedge against the possible failure to continue the

annual accumulations to the savings fund because of early death.

Through life insurance the suggested fund of $10,000 can be

assured in any case. Upon death the insurance company pays the

face of the policy, while in case of survival the insured is given the

necessary time to accumulate a competence.

Moreover, the roseate views which so many hold concerning their

resolution and ability to accumulate and keep should be tempered

by a frank statement of the distressing facts as they actually exist.

Eighty-five percent, of this country's adults leave no estate at all,

and about one-third of the widows in the country lack the

necessities, and 90 percent, the comforts, of life. The habit of

saving, as already stated, should be encouraged, but the foregoing

facts clearly indicate that it is unwise to practice saving to the

exclusion of life insurance. Both should be practiced, and, if only

one is possible because of limited means, insurance should be

selected because of its much greater certainty in leaving a

The Advantages of Life Insurance to Society

The many advantages discussed in the preceding pages, it is apparent,

will greatly benefit the community as a whole if life insurance is widely

used. Mr. Holcombe writes:

It is clear that any agency which improves the mental or moral attributes,

or the material circumstances of any one of its citizens, raises the

condition of the community of which he is a member, and thus benefits

the state. Savings banks encourage thrift and produce accumulations

which would in many cases be otherwise wasted, and thus they constitute

a distinct and tangible benefit to the state. Life insurance promotes a

sense of responsibility, strengthens family ties, and thus elevates the

general character of the nation. It lessens those family discords which end

in divorce, it checks intemperance, and often by its requirements brings a

realization of the benefits of right living. . . . There can be no doubt,

furthermore, that life insurance curtails the expense to the public treasury,

of almshouses and police, of criminal courts and prisons, and of the

various other necessary branches of the public service which have to do

with the prevention and punishment of crime, and the relief of the

suffering and unfortunate. ... It is certain that in many cases the proceeds

of a life-insurance policy are practically all that remain at the death of the

one responsible for the support of helpless dependents, and in a vast

number of these cases, were it not for this aid, many persons would be

forced to accept public charity.

The value of life insurance as an agency for increasing the individual's

sense of responsibility, and for relieving the community of much needless

expense in supporting members of destitute families, has been recognized

for years by the governments of all civilized countries. As early as 1840

the state of New York enacted legislation to the general effect that any

life-insurance policy taken out for the benefit of a married woman, or

assigned to or held in trust for her, or which in case of her death before

payment is to inure to the use of her or her husband's children, was to be

free from all claims of creditors. A large number of our states have since

enacted legislation substantially similar in character, the laws, however,

usually providing that if the annual premium on said insurance should

exceed a stipulated amount (usually $300) the excess together with

interest should be available for satisfying the claims of creditors of the

person paying the premium. Many foreign governments have also done

Depending upon it is a fundamental duty Since life insurance furnishes the surest method

of hedging the family against the uncertainty of life, it is essential that all who have

assumed family obligations should use it as a means of protecting dependents against of

the household that should be given the widest publicity through the pulpit, the school and

the press. In the great majority of instances, life insurance is the only recourse open to the

man of moderate income who finds it difficult or impossible by force of circumstances to

accumulate a savings fund for those dependents who may outlive him.

The growth of life insurance implies an increasing development of the sense of

responsibility. The idea of providing only the uncertain the want that may be occasioned

by an untimely death. The capitalization of the value of a human life for the benefit future

for the benefit of a dependent household. As already explained life insurance is the only

sure means of changing uncertainty into certainty and is the opposite of gambling. He

who does not insure gambles for the present must give way to recognition of the fact that

a person's responsibility to his family is not limited to the years of survival. Emphasis

should be laid on the "crime of not insuring and the ringer of scorn should be pointed at

any man who, although he has provided well while alive, has not seen fit to discount with

the greatest of all chances and, if he loses, makes those dearest to him pay the forfeit".

That the gamble is a risky one is easily demonstrated by any mortality table, and even if

life is granted until age 50, let it not be overlooked that less than one in ten of our

population succeeds in accumulating a reasonable competence, and that through reverses

a great majority of this limited number lose the same by the time that age is reached.

Woman's rights as well as her duty in the matter of life insurance should also be

emphasized. She should be taught that it is not only her husband's duty adequately to

protect the family, if that is at all possible, but that it is also her duty, if necessary, to use

her persuasive powers to get him to act, and if that does not avail, to insist on action as

her right. Not only has she a right to personal protection, but her rights as regards life

insurance are further increased by her interest in the children which are as much hers as

they are her husband's. In addition to the advantage of life insurance as a direct protection

to the family, it also benefits the policyholder personally in a number of important ways.

Six advantages deserve special mention in this respect and all, it should be noted,

44

redound to the benefit of the policy holder's family by qualifying him better to meet its

obligations and to protect its comfort and happiness

Other Financial Instruments

45

EquitiesEquities are a type of security that represents the ownership in a company. Equities are traded (bought and sold) in stock markets. Alternatively, they can be purchased via the Initial Public Offering (IPO) route, i.e. directly from the company. Investing in equities is a good long-term investment option as the returns on equities over a long time horizon are generally higher than most other investment avenues. However, along with the possibility of greater returns comes greater risk.

Mutual fundsA mutual fund allows a group of people to pool their money together and have it professionally managed, in keeping with a predetermined investment objective. This investment avenue is popular because of its cost-efficiency, risk-diversification, professional management and sound regulation. You can invest as little as Rs. 1,000 per month in a mutual fund. There are various general and thematic mutual funds to choose from and the risk and return possibilities vary accordingly.

BondsBonds are fixed income instruments which are issued for the purpose of raising capital. Both private entities, such as companies, financial institutions, and the central or state government and other government institutions use this instrument as a means of garnering funds. Bonds issued by the Government carry the lowest level of risk but could deliver fair returns.

DepositsInvesting in bank or post-office deposits is a very common way of securing surplus funds. These instruments are at the low end of the risk-return spectrum.

Cash equivalentsThese are relatively safe and highly liquid investment options. Treasury bills and money market funds are cash equivalents.

Non-financial Instruments

Real estateWith the ever-increasing cost of land, real estate has come up as a profitable investment proposition.

46

GoldThe 'yellow metal' is a preferred investment option, particularly when markets are volatile. Today, beyond physical gold, a number of products which derive their value from the price of gold are available for investment. These include gold futures and gold exchange traded funds. Balanced fundThese funds invest in debt and equity instruments. The proportion of investment in debt and equity can vary and these funds offer a balance between risk and return.

Debt fundFunds that invest in medium to long-term debt instruments issued by private companies, banks, financial institutions, governments and other entities are known as Debt / Income Funds. These funds are low risk profile funds and generate fixed and regular income although these are less risky than equity funds; they are subject to liquidity risk, interest rate risk and credit risk (the risk that a bond issuer will fail to repay interest and principal on time). These funds can be further classified as debt funds, Fixed Term Plans, etc.

Debt funds invest in a host of fixed income instruments i.e government issuances, corporate papers and short term papers.

The Fixed Term Plan Series are closed-end schemes of varying maturities which invest as per their defined time line.

Entry loadThe fees or charge paid by the investor at the time of buying units of a mutual fund is called the entry load.

Equity fundEquity funds fall into the highest risk category for mutual funds and have the potential to offer the highest returns too. Ideally, like equities, equity funds must also be held for the long term, i.e. for 3 years or more. Equity funds can be further classified as aggressive funds, sector funds, large cap, mid cap or small cap funds, diversified equity funds, etc.

Aggressive equity funds offer the maximum scope for capital appreciation as the funds invest in less researched and under owned shares. Such investments are most volatile and prone to higher risks than other types of equity funds.

Sector funds/ Mid cap or small cap funds have stated criteria for investments and their portfolios comprise of only those companies that meet their criteria. Sector funds invest in a particular sector say banking, technology or pharmaceutical etc.

Mid cap and small cap companies invest in companies with a mid sized or low market capitalization, respectively, as per their definition. These funds invest only in certain segments of the equity market and are thus, comparatively more risky than diversified funds.

Diversified equity funds invest across the equity space into large, mid and small cap funds and have exposure to a host of sectors thereby reducing sector-specific or company-specific risks.

47

Exit loadA charge levied on an investor at the time of redemption of mutual fund units is called the exit load.

Gilt fundThese funds invest mainly in government securities.

Index fundThese funds invest in stocks that make up a particular stock market index (such as the BSE Sensex and NSE Nifty) in the same proportion as the weight age given to each stock in the index.

InflationInflation can be defined as a sustained increase in the general price levels (wages, prices of goods and services) across the economy over a period of time.

Load

The purchase or redemption fee charged by a mutual fund when an investor purchases or sells units of the scheme, respectively, is called the load.

48

Products and plans

Insurance Plans - At a glance

Broadly, insurance plans can be distinctly divided into  (Unit Linked Insurance Plans) and traditional plans. A brief detail of both segments:

ULIPs (Unit Linked Insurance Plans)

ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the attractive features they offer. Benefits include flexibility, Transparency, Liquidity, and Fund Options. Flexibility  A ULIP offers the customer an acute degree of flexibility: the flexibility to choose the Sum Assured, and to choose the desired premium amount. ULIPs give the customer the option of changing the level of Premium/Sum Assured even after the plan has started, and the flexibility to change asset allocation by switching between funds with ease. Transparency  ULIPS offer a high degree of transparency, where all charges in the plan as well as the entire net amount invested is made known to the customer. ULIPs also offer the convenience of tracking your investment performance on a day to day basis, so you can decide instantly where you want your assets allocated. Liquidity  A ULIP offers you the option of withdrawing money a few years into the plan, allowing for the exigencies of life. Alternatively, a ULIP will also allow for partial/systematic withdrawal should the need arise. Fund Options  A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a combination of the three. The customer is also afforded the option of choosing your fund mix based on your desired asset allocation.

49

Traditional Plans

These are the oldest types of insurance plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: 

1. Steady Investment 1. Major chunk of investible funds are in debt instruments. 2. Steady and almost assured returns over the long term.

2. Features 1. Death benefit is Sum Assured + guaranteed & vested bonus. 2. Helps in asset creation as they are for a long tenure. 3. Premium to Sum Assured ratios are fixed for each plan and age.

Generally withdrawals are not allowed before maturity.

Which important goals should you plan for in advance?

1) Your family's protection - so that your loved ones are secure should an unfortunate event happen to you. Buying  assures that your family receives a lumpsum that safely tides them over any financial crises that might occur in your absence. 2) Child's education: As parent, your primary responsibility is to ensure your children's future. Our Education Insurance plans ensure your child receives money at key stages of his or her education even in your absence. 3) Savings: Savings plans allow you to steadily save towards a pre-decided goal in a secure manner. These plans provide you with a host of benefits. You can choose the premium, the underlying fund in which you want to invest your money, the ratio between protection and investment as per your requirements. 4) Retirement:  help you secure regular income for your retired life. During the Accumulation phase, you systematically save while you are working. When you retire, the Payout stage of the plan begins. You then purchase an annuity, which will serve as a steady stream of income, for the rest of your life. 

50

Chapter: 7

51

1. Age Wise classification of respondents

Interpretation

the age group between 18-25 person 11% are insured .26-30age group 22% are

insured .31-45age group 44% are insured and above 46 age group 23%

2. Gender wise classification of respondents

18-25 26-30 31-45 46 & Above

0

5

10

15

20

25

30

35

40

45

11

22

44

23

Years

No.

of

Cu

stom

ers

52

AGE No Of Members

18-25 11

26-30 22

31-45 44

46 to above 23

Interpretation In sample of 100 .there is 66% people are male which are fully

insured and 34% females are insured

3. No. Of persons are insured in a family

MALE FEMALE0

10

20

30

40

50

60

7066

34

Years

No.

of

Cu

stom

ers

53

Gender No of Member

MALE 66

FEMALE 34

Family member No of Member

2-4 405-8 48

8 to above 12

Interpretation In a sample of 100 persons .2-4 member in a family are 40% are insuranced.5-8 member in a family 48% are insurance and 12% in a 8 member are insured

4. Income wise classification of respondents which are insured

Income No of Members

2 to 4 5 to 8 8 to aboce05

101520253035404550 40

48

12

Members

No of members

No.

of

Cu

stom

ers

54

40K -70K 1770K-1 Lake 41

1 Lake to 3 Lakes 283 Lacks 14

Interpretation There is 17% of respondent which have income 40k-70k and 41% respondent have income is 70K-1lake.28%respondent have income 1lake to 3lake and rest of them are 3lacks

5. No. of person are insured

40 k to 70k 70k to 1 Lake

1 Lake to 3 Lakes

3 Lake to Above

0

5

10

15

20

25

30

35

40

45

17

41

28

14

Income Wise Classification

Income (P.A)

No.

of

Cu

stom

ers

55

Interpretation Only 42%people having insurance so it is potential for insurance company to capture to all that market

6. Type of persons are insured either it is self, spose, children, all

YES42%

NO58%

NO OF MEMBER HAVING INSURANCE

56

Insurable Member Uninsurable member42% 58%

Interpretation Among that 42% people who having insurance, they have insurance 40% for self 28%for spouse 21% for children and 18% for their parents and 11% for all family member

7. Type of polices taken by the respondents

Different policy bought buy customers

Self Spouse Children Parents All

0

5

10

15

20

25

30

35

40

40

28

2118

11

No

. o

f C

ust

om

ers

57

Having insurance No of membersSelf 40

Spouse 28Children 21Parents 18

All 11

Interpretation In a Insurance sector there is great share of LIC company in all planes.

8. No. of person are under insured and fully insured

Potential of life insurance

Under insurable persons Fully insurable persons82% 18%

Term Plan En-dow-ment

Whole life Money Back

Retirement Child Plan Unit Link Plan

0

5

10

15

20

25

30

35LIC

ICICI

Birla Sun-life

SBI

HDFC

Bajaj Al-liance

TATA AIG

Kotak Mahindra

ING Vyasya

Max Newyork

Met LifeDifferent PlansN

o. o

f C

ust

omer

s

58

Interpretation Only 42 % people having life insurance but among them 82% people are underinsurance and only 18% people are fully insured according to them income

9. Market share of insurance planes in the insurance sector

Market share of insurance plan

Insurance Plan Market ShareTerm Plan 39%Money back Plan 14%Endowment Plan 15%Child Plan 8%

Fully Insured 18%

Under Insured82%

Potential of life insurance

59

Unit link Plan 24%

InterpretationIn insurance sector there is 39% of share of

term planes.

14% share of money back plan.15%share of endowment plan.8% share of child plan. And 24% share of unit link plans

10. No. of respondents which are taken the benefits of insurance

Benefits taken by the Respondents

Benefit taken by the respondents Not know35% 75%

Endownment Plan15%

Moneyback Plan14%

Term Plan39%

Unitlink plan24% Child Plan

8%

Market share of diffrent Insurance plan

60

Benefited

Not know

Interpretation Only 35% peoples know about the benefits of insurance Rest of 75% peoples not know about benefits and they invest Their money in traditional plans

11. No. of respondents are aware about insurance instruments

Aware Not aware42% 58%

61

AwareNot aware

Interpretation Only 42% people are aware about the insurance sector Rest 58% people are not aware about the insurance

62

Chapter 8:

63

Conclusion

According the survey only 42% people are insured in so

remaining other part is potential for insurance sector.

Among that 42% people who having insurance, they have insurance 40%

for self 28%for spouse 21% for children and 18% for their parents and

11% for all family member, .

Only 42% people having insurance and 82 % people are under insured

and other 18% people are fully insured according to their income so that is

also plus point for insurance sector

Only 35% peoples having take benefits of insurance and rest of not aware

about the insurance benefits

64

Chapter 9:

Limitation

Some of the difficulties and limitations faced by me during my training are as

follows:

65

Lack of awareness among the people – This is the biggest limitation found in

this sector. Most of the people are not aware about the importance and the

necessity of the insurance in their life. They are not aware how useful life

insurance can be for their family members if something happens to them.

Perception of the people towards Insurance sector – People still consider

insurance just as a Tax saving device. So today also there is always a rush to buy

an Insurance Policy only at the end of the financial year like January, February

and March making the other 9 months dry for this business.

Insurance does not give good returns – Still today people think that Insurance

does not give good returns. They are not aware of the modern Unit Linked

Insurance Plans which are offered by most of the Private sector players. They are

still under the perception that if they take Insurance they will get only 5-6%

returns which is not true nowadays. Nowadays most of the modern Unit Linked

Insurance Plans gives returns which are many times more than that of bank Fixed

deposits, National saving certificate, Post office deposits and Public provident

fund.

Lack of awareness about the earning opportunity in the Insurance sector –

People still today are not aware about the earning opportunity that the Insurance

sector gives. After the privatization of the insurance sector many private giants

have entered the insurance sector. These private companies in order to beat the

competition and to increase their Insurance Advisors to increase their reach to the

customers are giving very high commission rates but people are not aware of that.

Lack of cooperation

There is lack of cooperation with the respondents they have no time

to give answer to my question

66

Shortage of time

For my research there is shortage of time so the sample size is small .so the

findings are not very effective

67

Chapter 9:

Suggestions:

All the insurance company must advertise more in the market because not all people know more about life Insurance policy.

68

Most number of people wants Guaranteed Returns so company must focus on this for the customer investment.

Make insurance policy which can buy any one so we can insure them through this type of life insurance policy.

All the companies must be aware there new plans to the customers by which the returns will be max.

All the companies must aware the customer to other financial instruments and compare the insurance with them

69

Chapter10

References

In order to obtain more information regarding the present study and to substantiate it with

theoretical proof, the following references were made: -

70

Websites visited :

www.kotaklifeinsurance.com

www.google .com

71

Chapter 11:

Annexure

72

Questionnaire

1) Name ______________________________

2) Age

1) 18-25 2)26 to 30 3) 31 to 45 4) 46 to above

3) Gender 1) male ____) female____

4) Occupation:

1) Service 2) Business 3) Professional 4 ) other

5) Family member 1) 2 to 4 2) 5 to 8 3) 8 to above

6) Do u have a life insurance?

Yes_______ No_______

If yes, Which is it?

Company’s name

Term plan

Endowment

Whole life

Money back

Retirement

ChildPlan

Unit linkPlan

LICICICI Prudential Birla Sunlife SBI Life HDFC Standard LifeBajaj AllianceTATA AIGKotak MahindraING VysyaMax Newyork Met LifeReliance Shri Ram Sahara

73

7) What is your annual income? 1) 40 K to 70 K 2) 70 K to 1 lake 3) 1 lake to 3 lakes 4) 3 lakes to above

8) Are you aware about the benefits of insurance?

Yes______ No______

9) Are you know about the insurance? Yes______ No______

74