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SUMMER TRAINING PROJECT REPORTON

“HDFC STANDARD LIFE INSURANCE" Submitted to

RAJASTHAN UNIVERSITY, Jaipur In the partial fulfillment

Of the award of the degree of BBA (Bachelor of Business Administration)

Project guide:- Submitted by:- Ms. Mridula Mudgal Gauarv KhandelwalSr. Lecturer BBA Part III

Alwar Managemant Studies North extension road Alwar IET Groups of institutions

PREFACE

The liberalization of the Indian insurance sector has been the subject of

much heated debate for some years. The policy makers where in the catch

22 situation wherein for one they wanted competition, development and

growth of this insurance sector which is extremely essential for

channeling the investments in to the infrastructure sector. At the other end

the policy makers had the fears that the insurance premium, which are

substantial, would seep out of the country; and wanted to have a cautious

approach of opening for foreign participation in the sector.

As one of the rare occurrences the entire debate was put on the back

burner and the IRDA saw the day of the light thanks to the maturing

polity emerging consensus among factions of different political parties.

Though some changes and some restrictive clauses as regards to the

foreign participation were included the IRDA has opened the doors for the

private entry into insurance.

Whether the insurer is old or new, private or public, expanding the market

will present multitude of challenges and opportunities. But the key issues,

possible trends, opportunities and challenges that insurance sector will

1

have still remains under the realms of the possibilities and speculation.

What is the likely impact of opening up India’s insurance sector.

The large scale of operations, public sector bureaucracies and

cumbersome procedures hampers nationalized insurers. Therefore,

potential private entrants expect to score in the areas of customer service,

speed and flexibility. They point out that their entry will mean better

products and choice for the consumer. The critics counter that the benefit

will be slim, because new players will concentrate on affluent, urban

customers as foreign banks did until recently. This seems to be a logical

strategy. Start-up costs-such as those of setting up a conventional

distribution network-are large and high-end niches offer better returns.

However, the middle-market segment too has great potential. Since

insurance is a volumes game. Therefore, private insurers would be best

served by a middle-market approach, targeting customer segments that are

currently untapped.

2

ACKNOWLEDGMENT

I would like to thank my project guide Mr. Pradeep

choaduary, Sales Development Manager HDFC Standard

Life Insurance, Alwar for guiding me through my summer

internship and research project. His encouragement, time

and effort are greatly appreciated.

I would like to thank Ms. Mirdula Mudgal (Sr.LECTUR) for

supporting me during this project and providing me an

opportunity to learn outside the class room. It was a truly

wonderful learning experience.

I would like to dedicate this project to my parents. Without

their help and constant support this project would not

have been possible.

Lastly I would like to thank all the respondents who offered

their opinions and suggestions through the survey that

was conducted by me in Alwar.

DECLARAION

3

I hereby declare that this work entitled “Potential of Life

Insurance Industry in ALWAR Market” is my work carried out

under the guidance of my faculty guide Mr. Pradeep kumar and my

company guide Mr. Jignesh Madhavani. This report neither full

nor in past has ever been submitted for award of any other degree

of either this University or any other University.

Signature of Candidates

Gaurav Khandelwal

Executive Summary

4

In today’s corporate and competitive world, I find that insurance sector has

the maximum growth and potential as compared to the other sectors.

Insurance has the maximum growth rate of 70-80% while as FMCG sector

has maximum 12-15% of growth rate. This growth potential attracts me to

enter in this sector and ING Life Insurance Company Ltd has given me

the opportunity to work and get experience in highly competitive and

enhancing sector.

The success story of good market share of different market

organizations depends upon the availability of the product and

services near to the customer, which can be distributed through a

distribution channel. In Insurance sector, distribution channel includes

only agents or agency holders of the company. If a company like

RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have

adequate agents in the market they can capture big market as

compared to the other companies.

Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer.

CertificatePreface

5

AcknowledgementDeclarationExecutive Summary

Tables of Contents

Sr.No. Particulars Page No.

1 Introduction of insurance 06 2 Profile & Comparison of organizations 13 2.1 HDFC SLIC 14 2.2 Tata AIG LIC 31 2.3 Other Competitors 34 2.4 HDFC Policies 40 3 Objectives of the Study 43 4 Research Methodology 45 5 Result analysis & interpretation 51 6 Conclusions 73 7 Suggestions 75 8 Questionnaire 77 9 Bibliography 80 10 Glossary 82

6

7

CHAPTER I

INDIAN INSURANCE

INDUSTRY

“AN OVERVIEW”

8

THE INSURANCE INDUSTRY IN INDIA

AN OVERVIEW

With the 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 1560.41

billion (for the financial year 2006 – 2007). Together with

banking services, it adds about 7% to the country’s Gross

Domestic Product (GDP). The gross premium collection is

nearly 2% of GDP and funds available with LIC for

investments are 8% of the GDP.

Even so nearly 65% of the Indian population is without life

insurance cover while health insurance and non-life

insurance continues to be below international standards. A

large part of our population is also subject to weak social

security and pension systems with hardly any old age

income security. This in itself is an indicator that growth

potential for the insurance sector in India is immense.

A well-developed and evolved insurance sector is needed

for economic development as it provides long term funds

for infrastructure development and strengthens the risk

taking ability of individuals. It is estimated that over the

next ten years India would require investments of the

9

order of one trillion US dollars. The Insurance sector, to

some extent, can enable investments in infrastructure

development to sustain the economic growth of the

country. (Source: www.indiacore.com)

HISTORICAL PERSPECTIVE

The history of life insurance in India dates back to 1818

when it was conceived as a means to provide for English

Widows. Interestingly in those days a higher premium was

charged for Indian lives than the non - Indian lives, as

Indian lives were considered more risky to cover. The

Bombay Mutual Life Insurance Society started its business

in 1870. It was the first company to charge the same

premium for both Indian and non-Indian lives.

The Oriental Assurance Company was established in 1880.

The General insurance business in India, on the other

hand, can trace its roots to Triton Insurance Company

Limited, the first general insurance company established

in the year 1850 in Calcutta by the British. Till the end of

the nineteenth century insurance business was almost

entirely in the hands of overseas companies.

Insurance regulation formally began in India with the

passing of the Life Insurance Companies Act of 1912 and

the Provident Fund Act of 1912. Several frauds during the

10

1920's and 1930's sullied insurance business in India. By

1938 there were 176 insurance companies.

The first comprehensive legislation was introduced with

the Insurance Act of 1938 that provided strict State

Control over the insurance business. The insurance

business grew at a faster pace after independence. Indian

companies strengthened their hold on this business but

despite the growth that was witnessed, insurance

remained an urban phenomenon.

The Government of India in 1956, brought together over

240 private life insurers and provident societies under one

nationalized monopoly corporation and Life Insurance

Corporation (LIC) was born. Nationalization was justified on

the grounds that it would create the much needed funds

for rapid industrialization. This was in conformity with the

Government's chosen path of State led planning and

development.

The non-life insurance business continued to thrive with

the private sector till 1972. Their operations were

restricted to organized trade and industry in large cities.

The general insurance industry was nationalized in 1972.

With this, nearly 107 insurers were amalgamated and

grouped into four companies- National Insurance

Company, New India Assurance Company, Oriental

11

Insurance Company and United India Insurance Company.

These were subsidiaries of the General Insurance

Company (GIC).

KEY MILESTONES

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 by the

Insurance Act with the objective of protecting the interests

of the insuring public.

1956: 245 Indian and foreign insurers along with

provident societies were taken over by the central

government and nationalized. LIC was formed by an Act of

Parliament- LIC Act 1956- with a capital contribution of Rs.

5 crore from the Government of India.

INDUSTRY REFORMS

12

Reforms in the Insurance sector were initiated with the

passage of the IRDA Bill in Parliament in December 1999.

The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously stuck to its schedule of framing

regulations and registering the private sector insurance

companies. Since being set up as an independent

statutory body the IRDA has put in a framework of globally

compatible regulations.

The other decision taken simultaneously to provide the

supporting systems to the insurance sector and in

particular the life insurance companies was the launch of

the IRDA online service for issue and renewal of licenses to

agents. The approval of institutions for imparting training

to agents has also ensured that the insurance companies

would have a trained workforce of insurance agents in

place to sell their products.

PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN

INDIA

The life insurance industry in India grew by an impressive

47.38%, with premium income at Rs. 1560.41 billion

13

during the fiscal year 2006-2007. Though the total volume

of LIC's business increased in the last fiscal year (2006-

2007) compared to the previous one, its market share

came down from 85.75% to 81.91%.

The 17 private insurers increased their market share from

about 15% to about 19% in a year's time. The figures for

the first two months of the fiscal year 2007-08 also speak

of the growing share of the private insurers. The share of

LIC for this period has further come down to 75 percent,

while the private players have grabbed over 24 percent.

With the opening up of the insurance industry in India

many foreign players have entered the market. The

restriction on these companies is that they are not allowed

to have more than a 26% stake in a company’s ownership.

Since the opening up of the insurance sector in 1999,

foreign investments of Rs. 8.7 billion have poured into the

Indian market and 19 private life insurance companies

have been granted licenses.

Innovative products, smart marketing, and aggressive

distribution have enabled fledgling private insurance

companies to sign up Indian customers faster than anyone

expected. Indians, who had always seen life insurance as a

tax saving device, are now suddenly turning to the private

14

sector and snapping up the new innovative products on

offer. Some of these products include investment plans

with insurance and good returns (unit linked plans), multi –

purpose insurance plans, pension plans, child plans and

money back plans. (www.wikipedia.com)

CHAPTER II

15

PROFILE OF ORGANIZATION

2.1 HDFC STANDARD LIFE INSURANCE COMPANY

LIMITED

INTRODUCTION

HDFC Incorporated in 1977 with a share capital of Rs 10

Crores, HDFC has since emerged as the largest residential

mortgage finance institution in the country. The

corporation has had a series of share issues raising its

capital to Rs. 119 Crores. The gross premium income for

the year ending March 31, 2007 stood at Rs. 2,856 Crores

and new business premium income at Rs. 1,624 Crores.

The company has covered over 8,77,000 lives year ending

March 31, 2007.

HDFC operates through almost 450 locations throughout

the country with its corporate head quarters in Mumbai,

16

India. HDFC also has an International Office in Dubai, UAE

with service associates in Kuwait, Oman and Qatar. HDFC

is the largest housing company in India for the last 27

years.

SNAPSHOT-I

Incorporated in 1977 as the first specialized Mortgage

Company in India.

Almost 90% of initial shareholding in the hands of

domestic institutes and retail investors. Current 77%

of shares held by foreign institutional investors.

Besides the core business of mortgage HDFC has

evolved into a financial conglomerate with holdings

In:

HDFC Standard Life insurance Company- HDFC

holds 78.07 %.

HDFC Asset Management Company – HDFC holds

50.1%

HDFC Bank- HDFC holds 22.25%.

Interline Global (Business Process Outsourcing) –

HDFC holds 50%.

HDFC Chubb General Insurance Company – HDFC

holds 74%.

SNAPSHOT-II

17

Loan Approvals Rs. 805 billion.

(up to Dec 2007) (US $ 18.30

bn.)

Loan Disbursements Rs.669

billion

(up to Dec. 2007) (US $ 15.20

bn)

Housing Units Financed 2.5 million.

Distribution

Offices 181

Outreach Programs 90

KEY PLAYERS

Mr. Deepak S Parekh is the Chairman of the Company.

He is also the Executive Chairman of Housing

Development Finance Corporation Limited (HDFC Limited).

He joined HDFC Limited in a senior management position

in 1978. He was inducted as a whole-time director of HDFC

Limited in 1985 and was appointed as its Executive

Chairman in 1993. He is the Chief Executive Officer of

HDFC Limited. Mr. Parekh is a Fellow of the Institute of

Chartered Accountants (England & Wales).

18

Mr. Deepak M Satwalekar is the Managing Director and

CEO of the Company since November, 2000. Prior to this,

he was the Managing Director of HDFC Limited since 1993.

Mr. Satwalekar obtained a Bachelors Degree in Technology

from the Indian Institute of Technology, Bombay and a

Masters Degree in Business Administration from The

American University, Washington DC.

GROUP COMPANIES

HDFC Bank: World Class Indian Bank- among the top

private banks in India.

HDFC AMC: One of the top 3 AMCs in India- Preferred

investment manager.

Intelenet Global: BPO services for international customers.

CIBIL: Credit Information Bureau India Limited.

19

HDFC Chubb: Upcoming Private companies in the field of

General Insurance.

HDFC Mutual Fund

HDFC reality.com: Helps to search properties in all major

cities in India

HDFC securities

STANDARD LIFE

Standard Life is Europe’s largest mutual life assurance

company. Standard Life, which has been in the life

insurance business for the past 175 years is a modern

company surviving quite a few changes since selling its

first policy in 1825. The company expanded in the 19th

century from kits original Edinburgh premises, opening

offices in other towns and acquitting other similar

businesses.

20

Standard Life Currently has assets exceeding over £ 70

billion under its management and has the distinction of

being accorded “AAA” rating consequently for the six

years by Standard and Poor.

SNAPSHOT

Founded in 1875, company supporting generation for

last 179 years.

Currently over 5 million Policy holders benefiting from

the services offered.

Europe’s largest mutual life insurer.

JOINT VENTURE

HDFC Standard Life Insurance Company Limited was one

of the first companies to be granted license by the IRDA to

operate in life insurance sector. Reach of the JV player is

highly rated and been conferred with many awards. HDFC

is rated ‘AAA ’ by both CRISIL and ICRA. Similarly, Standard

Life is rated ‘AAA’ both by Moody’s and Standard and

21

Poor’s. These reflect the efficiency with which HDFC and

Standard Life manage their asset base of Rs. 15,000 Cr

and Rs. 600,000 Cr. respectively.

HDFC Standard Life Insurance Company Ltd was

incorporated on 14th August 2000. HDFC is the majority

stakeholder in the insurance JV with 81.4% staple and

Standard of as a staple 18.6% Mr. Deepak Satwalekar is

the MD and CEO of the venture.

HDFC Standard Life Insurance Company Ltd. Is one of

India’s leading Private Life Insurance Companies, which

offers a range of individual and group insurance solutions.

It is a joint venture between Housing Development Finance

Corporation Limited (HDFC Ltd.) India’s leading housing

finance institution and the Standard Life Assurance

Company, a leading provider of financial services from the

United Kingdom. Both the promoters are will known for

their ethical dealings and financial strength and are thus

committed to being a long-term player in the life insurance

industry- all important factors to consider when choosing

your insurer.

BUSINESS GROWTH

22

Track Record so far

The gross premium income of HDFC, for the year ending

March 31, 2007 stood at Rs. 2,856 crores and new

business premium income at Rs. 1,624 crores.

The company has covered over 8,77,000 lives year ending

March 31, 2007. Company also declared our 5th

consecutive bonus in as many years for our ‘with profit’

policyholders.

KEY STRENGTH

Financial Expertise

As a joint venture of leading financial services groups.

HDFC standard Life has the financial expertise required to

manage long-term investments safely and efficiently.

Range of Solutions

HDFC SLIC has a range of individual and group solutions,

which can be easily customized to specific needs. These

group solutions have been designed to offer complete

flexibility combined with a low charging structure.

Strong Ethical Values:

23

HDFC SLIC is an ethical and Cultural Organization. False

selling or false commitment with the customers is not

allowed.

Most respected Private Insurance Company

HDFC SLIC was awarded No-1 Private Insurance Company

in 2004 by the World Class Magazine Business World for

Integrity, Innovation and Customer Care.

CORPORATE OBJECTIVE

Vision 'The most successful and admired life insurance

company, which means that we are the most

trusted company, the easiest to deal with, offer the

best value for money, and set the standards in the

industry'.

'The most obvious choice for all'.

Values

.Integrity

.Innovation

.Customer centric

.People Care One for all

.Teamwork

.Joy and Simplicity

PRODUCTS & SERVICES

The right investment strategies won't just help plan for a

more comfortable tomorrow -- they will help you get “Sar

Utha ke Jiyo”. At HDFC SLIC, life insurance plans are

24

created keeping in mind the changing needs of family. Its

life insurance plans are designed to provide you with

flexible options that meet both protection and savings

needs. It offers a full range of transparent, flexible and

value for money products. HDFC SLIC products are modern

and contemporary unitized products that offer unique

customer benefits like flexibility to choose cover levels,

indexation and partial withdrawals. (Source:

www.hdfcslic.com)

PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE INSURANCE

Individual Products

Protection Plans

 

A person can protect his family against the loss of his

income or the burden of a loan in the event of his

unfortunate demise, disability or sickness. These plans

offer valuable peace of mind at a small price. Protection

range includes our Term Assurance Plan & Loan

Cover Term Assurance Plan.

 

Investment Plans

25

 

HDFC SLIC’s Single Premium Whole of Life plan is

well suited to meet long term investment needs. This

provides attractive long term returns through regular

bonuses.

 Pension Plans

 

Pension Plans help to secure financial independence

even after retirement. Pension range includes Personal

Pension Plan, Unit Linked Pension , Unit Linked

Pension Plus.

 Savings Plans

 

Savings Plans offer a flexible option to build savings for

future needs such as buying a dream home or fulfilling

your children’s immediate and future needs.

Savings range includes Endowment Assurance Plan,

Unit Linked Endowment, Unit Linked Endowment

Plus, Unit Linked Endowment Plus II, Money Back,

Unit Linked Enhanced Life Protection II, Children's

Plan, Unit Linked Young Star, Unit Linked Young

Star Plus, Unit Linked Young Star Plus II.

26

Group Products

One-stop shop for employee-benefit solutions

HDFC Standard Life has the most comprehensive list of

products for progressive employers who wish to provide

the best and most innovative employee benefit solutions

to their employees. It offers different products for

different needs of employers ranging from term

insurance plans for pure protection to voluntary plans

such as superannuation and leave encashment.

HDFC SLIC offers the following group products to

esteemed corporate clients:

Group Term Insurance

Group Variable Term Insurance

Group Unit-Linked Plan

 

An investment solution that provides funding vehicle

to manage corpuses with Gratuity, Defined Benefit

or Defined Contribution Superannuation or Leave

Encashment schemes of your company

Also suitable for other employee benefit schemes

such as salary saving schemes and wealth

management schemes

27

Social Product

Development Insurance Plan

Development Insurance plan is an insurance plan which provides life cover to members

of a Development Agency for a term of one year. On the death of any member of the

group insured during the year of cover, a lump sum is paid to those member

beneficiaries to help meet some of the immediate financial needs following their loss.

Eligibility 

Members of the development agency and their

spouses with:

   - Minimum age at the start of the policy 18 years last

birthday

   - Maximum age at the start of policy 50 years last

birthday

Employees of the Development Agency are not eligible

to join the group. The group to be covered is only

eligible if it contains more than 500 members.

   Premium Payments

  The premium to be paid will be quoted per member in

the group and will be the same for all members of the

group.

The premium can only be paid by the Development

Agency as a single lump sum that includes all premiums

for the group to be covered. Cover will not start until the

28

premium and all the member information in our

specified format has been received.

Benefits  On the death of each member covered by the policy

during the year of cover a lump sum equal to the sum

assured will be paid to their beneficiaries or legal heirs.

Where the death is as a result of an accident, an

additional lump sum will be paid equal to half the sum

assured. There are no benefits paid at the end of the

year of cover and there is no surrender value available

at any time.

   The role of the Development Agency

  Due to the nature of the groups covered, HDFC

Standard Life will be passing certain administrative

tasks onto the Development Agency. By passing on

these tasks the premium charged can be lower. These

tasks would include:

  Submission of member data in a specified computer

format

Collection of premiums from group members

Recording changes in the details of group members

Disbursement of claim payments and the mortality

rebate (if any) to group members

29

These tasks would be in addition to the usual duties of a

policyholder such as:

Payment of premiums

Reporting of claims

Keeping policy holder information up to date

  Training and support will be available to give guidance

on how to complete the tasks appropriately. Since these

additional tasks will impose a burden on the

Development Agency, the Development Agency may

charge a Rs. 10 administration fee to their members.

   

Prohibition of rebates

  Section 41 of the Insurance Act, 1938 states

  No person shall allow or offer to allow, either directly or

indirectly, as an inducement to any person to take out

or renew or continue an insurance in respect of any

kind of risk relating to lives or property in India, any

rebate of the whole or part of the commission payable

or any rebate of the premium shown on the policy, nor

shall any person taking out or renewing or continuing a

policy accept any rebate, except such rebate as may

be allowed in accordance with the published

prospectus or tables of the insurer

If any person fails to comply with sub regulation

30

(previous point) above, he shall be liable to payment of

a fine which may extend to rupees five hundred

INTROUCTION TO UNIT LINKED FUNDS

Unit linked plans are based on the component of the

premium or the contribution of the customer towards

the plan. This contribution can be in different modes

like yearly, half yearly, quarterly and monthly. Unit

linked plans have multiple benefits like life protection,

rider protection, savings, transparency, investment

choices, liquidity and planning for taxes. These plans

work like mutual funds.

The premium is collected from the policy holder. He is

allotted a certain number of units based of his

contribution. The Net Asset Value is the value of each

unit of the fund. It is found by subtracting the charges

and current liabilities from the current assets and

investments and dividing this number by the total

31

number of outstanding units.

Let us take an example. There are 100 investors and each invests Rs. 10 in a fund. The

total value of the fund is Rs. 1000 and each person is allotted 1 unit of Rs 10. Now the

money (Rs. 1000) is invested in the debt or equity market. Suppose the fund value

increased by 20%. As a result the Rs. 1000 invested became Rs. 1200. Hence the value

of every investor is now Rs. 12 and not Rs. 10.

UNIT LINKED VERSUS OTHER FINANCIAL INSTRUMENTS

Paramete

rs

RBI

Bonds

Fixed

Deposits

Mutual

Funds

Unit

linked

Safety High High Medium High

Liquidity None High High High

Returns Low Low High High

Life Cover 1 time

amount

1 time

amount

1 time

amount

10 times

Tax

benefits

Tax free Taxed Taxed Tax free

32

We find that life insurance unit linked plans is a good

area to invest money in as it provides liquidity, safety,

high returns, life cover and tax benefits in a single

plan. HDFC SLIC offers the option of indexation to beat

inflation. Risk is reduced to a large extent as the

company invests in a diversified portfolio of stocks.

Tax Benefits

INCOME TAX

SECTION

GROSS

ANNUAL

SALARY

HOW MUCH

TAX CAN YOU

SAVE?

HDFC STANDARD

LIFE PLANS

Sec. 80C Across All

income Slabs

Upto Rs. 33,990

saved on

investment of

Rs. 1,00,000.

All the life

insurance plans.

Sec. 80 CCC Across all

income slabs.

Upto Rs. 33,990

saved on

Investment of

Rs.1,00,000.

All the pension

plans.

33

Sec. 80 D Across all

income slabs

Upto Rs. 3,399

saved on

Investment of

Rs. 10,000.

All the health

insurance riders

available with the

conventional plans.

TOTAL SAVINGS

POSSIBLE

Rs37,389

Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male with gross annual income exceeding Rs. 10,00,000.

2.2 TATA AIG

TATA AIG LIFE INSURANCE COMPANY LIMITED

Introduction

Tata AIG Life Insurance Company Limited (Tata AIG Life) is

a joint venture company, formed by the Tata Group and

American International Group, Inc. (AIG). Tata AIG Life

combines the Tata Group’s pre-eminent leadership

position in India and AIG’s global presence as the world’s

leading international insurance and financial services

organization. The Tata Group holds 74 per cent stake in

the insurance venture with AIG holding the balance 26

percent. Tata AIG Life provides insurance solutions to

individuals and corporate. Tata AIG Life Insurance

34

Company was licensed to operate in India on February 12,

2001 and started operations on April 1, 2001.

THE TATA GROUP

The Tata Group is one of India's largest and most

respected business conglomerates, with revenues in 2004-

05 of $17.8 billion (Rs. 799,118 million), the equivalent of

about 2.8 per cent of the country's GDP. Tata companies

together employ some 215,000 people. The Group's 32

publicly listed enterprises - among them standout names

such as Tata Steel, Tata Consultancy Services, Tata Motors

and Tata Tea - have a combined market capitalization that

is the highest among Indian business houses in the private

sector, and a shareholder base of over 2 million. The Tata

Group has operations in more than 40 countries across six

continents, and its companies export products and

services to 140 nations.

AIG

American International Group, Inc. (AIG), world leaders in

insurance and financial services, is the leading

international insurance organization with operations in

more than 130 countries and jurisdictions. AIG companies

serve commercial, institutional and individual customers

through the most extensive worldwide property-casualty

35

and life insurance networks of any insurer. In addition, AIG

companies are leading providers of retirement services,

financial services and asset management around the

world. AIG's common stock is listed on the New York Stock

Exchange as well as the stock exchanges in London, Paris,

Switzerland and Tokyo.

Tata AIG has strong brand name and recall factor which

most of its competitors lack in. Other than the public

behemoth Life Insurance Corporation (LIC) of India which

has a major hold in the market share (of approximately

79%), the private players too are having more and more

opportunities to tighten their hold of the market. Of the

private players, ICICI Prudential comes first with an almost

4.50% of the market share followed by Tata AIG with about

2.10% of the pie. The private players have everything to

work for, especially with LIC not meeting the needs of its

clientele with respect to the services they need. This

provides a prospect for the private sector players to

increase their share of the market. Companies with a

familiarity such as Tata AIG can especially achieve their

targets due to the brand image that the Tata group has.

(Source: www.tata-aig-life.com)

A recent survey conducted by the Voluntary Organization

in Interest of Consumer Education (VOICE) revealed Tata

36

AIG Life Insurance Company (Tata AIG Life) as the clear

winner in terms of customer satisfaction in the life

insurance category. This is India's first-ever customer

satisfaction study for the insurance sector.

The survey also revealed that Tata AIG Life had a high

recall as a reputed brand name. The ability to provide

innovative and customer-focused service such as allowing

the maximum grace period for premium payment has not

only further distinguished Tata AIG Life from other life

insurance companies but also appealed to consumers.

2.3 OTHER COMPETITORS

LIFE INSURANCE CORPORATION OF INDIA (LIC)

LIC has an excellent money back policy which provides for

periodic payments of partial survival benefits as long as

the policy holder is alive. 20% of the sum assured is

payable after 5, 10, 15 and 20 years and the balance 40%

is payable at the 20th year along with accrued bonus.

(www.lic.com)

37

For a 25 years term , 15% of the sum assured becomes

payable after 5,10,15 and 20 years and the balance 40%

plus the accrued bonus becomes payable at the 25th year.

An important feature of these types of policies is that in

the event of the death of the policy holder at any time

within the policy term the death claim comprises of full

sum assured without deducting any of the survival benefit

amounts which have already been paid. The bonus is also

calculated on the full sum assured.

HDFC SLIC does not have a money back policy. It could

offer a money back plan and capture some portion of this

market. While marketing insurance products I found that

many customers wanted to purchase these plans.

LIC offers 66 different plans; plans are formulated for

specific occasions – whole life plans, term assurance plans,

money back plan for women, child plans, plans for the

handicapped individuals, endowment assurance plans,

plans for high worth individuals, pension plans, unit linked

plans, special plans, social security schemes – diversified

portfolio of products. HDFC SLIC could diversify its product

portfolio. It could add more plans for high worth individuals

and women.

38

ICICI PRUDENTIAL

ICICI Prudential is a stiff competitor for HDFC SLIC. The

company is a merger between ICICI Bank which is the

biggest private bank in India and Prudential Plc which is a

global life insurance company.

The company has an investment plan which is market

related – Invest Shield Life. In this plan even if the market

falls, the premium will be returned to investors. It is a

guaranteed plan which ensures the company carefully

invests your money. The stock market performance of

ICICI Prudential is much better than HDFC SLIC. The

returns on the growth fund were 46.28% compared to the

42.70% offered by HDFC SLIC. Customers are attracted by

higher returns and this is a plus point for Prudential.

The company is very well advertised. The advertisements

are showcased in movies, television, newspapers,

magazines, bill boards, radio etc. The company has an

excellent brand ambassador – Mr. Amitabh Bacchan. His

promotion of the company builds trust and faith in the

minds of our people.

However the charges are very high in the plans offered by

ICICI Prudential. It is 35% during the first year, 15% in the

39

next year and 3% from the third year onwards. Also a

higher minimum premium of Rs. 8000 is charged. Hence

the policies are not accessible to the lower strata of the

society. (Source: www.iciciprulife.com)

BIRLA SUN LIFE

Birla Sun Life Insurance Company Limited is a joint venture

between The Aditya Birla Group, one of the largest

business houses in India and Sun Life Financial Inc., a

leading international financial services organization. The

local knowledge of the Aditya Birla Group combined with

the expertise of Sun Life Financial Inc., offers a formidable

protection for your future. (Source: www.birlasunlife.com)

The Aditya Birla Group has a turnover close to Rs. 33000

crores with a market capitalization of Rs. 53400 crores (as

on 31st March 2007). It has over 72000 employees across

all its units worldwide. It is led by its Chairman - Mr. Kumar

Mangalam Birla. Some of the key organizations within the

group are Hindalco and Grasim.

Sun Life Financial Inc. and its partners today have

operations in key markets worldwide, including Canada,

40

the United States, the United Kingdom, Hong Kong, the

Philippines, Japan, Indonesia, India, China and Bermuda. It

had assets under management of over US$343 billion, as

on 31st March 2007. The company is a leading player in

the life insurance market in Canada.

Being a customer centric company, BSLI has invested

heavily in technology to build world class processing

capabilities. BSLI has covered more than a million lives

since inception and its customer base is spread across

more than 1000 towns and cities in India. All this has

assisted the company in cementing its place amongst the

leaders in the industry in terms of new business premium

income. The company has a capital base of 520 crores as

on 31st July, 2007.

Its Flexi Life Line Plan offers life long insurance cover till

the policy holder is 100 years of age. There are

guaranteed returns of 3% p.a. net of policy charges after

every 5 years from the eleventh policy year onwards.

However the charges are very high. The initial charges for

the first year are 65%. Hence the fund value is greatly

reduced.

BAJAJ ALLIANZ

41

Bajaj Allianz is a joint venture between Allianz AG with

over 110 years of experience in over 70 countries and

Bajaj Auto, a trusted automobile manufacturer for over 55

years in the Indian market. Together they are committed

to offering you financial solutions that provide all the

security you need for your family and yourself. Bajaj

Allianz is the number one private life insurer for the year

2005 – 2006. It is leading by 78 crores. It has experienced

a whopping growth of 216% in the last financial year.

The company has sold 13, 00,000 policies and is backed

by 550 offices across India. It offers travel insurance,

motor insurance, home insurance, health and corporate

insurance. The mortality charges are lower than HDFC

SLIC. The entry age could be zero years which allow even

new born babies to be insured. (Source:

www.bajajallianz.com)

TATA AIG

Tata Aig is a joint venture between the Tata group and

American International Group Inc. In one of the plans the

company offers hospital cash benefit wherein it will pay

Rs. 2500 per day in case of hospitalization and Rs.12.5

lakhs in case the person suffers from any critical illness.

Annual premium is much less (about Rs. 6712) to avail

42

such a good benefit. Charges are relatively low compared

to HDFC SLIC for some policies.

The company offers high coverage plans at low cost. There

is a plan even for a policy term of 1 year. Your family can

continue to enjoy their current lifestyle even in the case of

something happening to you. These plans are very flexible

and HDFC SLIC could adopt this idea of insuring individuals

for short periods of time. For example; there is a family of

four. The only earning member is the father.

He has just taken a loan from a bank of 20 lakhs to

purchase a new home. He is able to repay the loan with his

current salary in 15 years. The problem arises if something

were to happen to him within these fifteen years. Not only

will the family face the emotional and financial loss of their

father but they will also have to repay the home loan or

risk being homeless. (Source: www.tataaig.com)

2.4 HDFC Policies

43

HDFC Children PlansAs a parent, your priority is your child's future and being able to meet your child's dreams and aspirations. Today, providing a good education, establishing a professional career or even a modest wedding is expensive. Costs are increasing fast. Just imagine how much you'll need when your child takes these important steps in life!

The   HDFC CHILDREN'S PLAN :

Gives valuable protection and invaluable financial support to the child.

Works on Beneficiary concept, where beneficiary is the sole person to receive the benefit under the policy.

Provides you multiple options for multiple benefits.

Plan OptionDeath Benefit(on death of insured parent during the policy term)

Maturity Benefit

Accelerated Benefit Plan

Sum Assured + Bonuses Declared.

The policy terminates immediately.

Sum Assured + Bonuses Declared

Maturity Benefit Plan

Your family need not pay any further premiums and the policy continues.

Sum Assured + Bonuses Declared

Double Benefit Plan

Sum Assured.

Your family need not pay any further premiums.

Sum Assured + Bonuses Declared

HDFC Young star Champion PlansToday, providing a good education, establishing a professional career or even a modest wedding is expensive. Costs are increasing fast. Just imagine how much you will need when your children take these important steps in life.

44

Plan today to ensure a bright future for your children. Start building savings today with our HDFC Unit Linked YoungStar Champion so that your child is able to lead a life of respect and dignity with a secured financial future.

Feature The HDFC Unit Linked YoungStar Champion gives you

Valuable protection to your child in case you are not around

An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments

Bumper Addition to the fund value at maturity

Flexible premium payment options

No need to go for medicals. Just filling the Short Medical Questionnaire will do

BenefitThe HDFC Unit Linked YoungStar Champion gives you

In case of unfortunate demise of the parent, HDFC Standard Life will: Pay the Sum Assured you had chosen to your child.

Continue to pay 50% of the original regular premium towards the policy

HDFC Pension Plan

The HDFC Unit Linked Pension II is an insurance policy that is designed to provide a retirement income for life with the freedom to maximise your investment returns. Stride into your golden years of retirement with dignity and pride. 

45

Features-

The HDFC Unit Linked Pension II gives you

An outstanding investment opportunity by providing a choice of thoroughly researched and selected investments

Freedom from tracking the market with Asset Allocation Option

Bumper Addition of 50% of original annualized premium at vesting and on death

Provides a post retirement income for life

Gives you the flexibility to plan your retirement date

You can choose your premium and the investment strategy. We will then invest your premium, net of premium allocation charges according to your chosen investment strategy. At the end of the policy term, you will receive the accumulated value of your funds, which will be used to provide your pension income.

The HDFC Unit Linked Pension II benefits you in the following ways:

Take 1/3rd of the fund value as tax-free cash lump sum and purchase annuity with the balance amount.

Purchase annuity from HDFC Standard Life or any other insurer

46

CHAPTER III

OBJECTIVES OF STUDY

The main of the present study of is accomplishing the following objective.

Proper understanding and analysis of life insurance industry.

To know about brand awareness of HDFC Life Insurance and

customer’s preference about HDFC Life Insurance.

47

Conduct market survey on a sample selected from the entire

population and derived opinion on that research.

According the market survey come know about how much

potential of insurance market in our city.

Training aims at recruiting maximum number of Life

Advisors and to Sell the maximum policies for the company

and bring the business for the company which ever is going at

the particular point of time.

Along with it I will be gaining the thorough knowledge of

insurance sector. This will give me in more confidence in

marketing products given to me.

As the HDFC Life Insurance well reputed company in India

it’s great chance for me to observed different products launch

by other competitor companies like ICICI prudential, Bajaj

alliance ,LIC, Max New York life etc. In all, it is to

understand the overall working of the Life insurance sector.

The objective behind the project is as follows:

To find the right candidate.

To about their family background, occupation, social relation,

Qualification, Age.

Finalize candidates for the IRDA training

48

CHAPTER IV

RESEARCH

METHODOLOGY

RESEARCH METHODOLOGY

49

TITLE:

To determine customer-buying behavior with a focus on market

segmentation for HDFC Standard Life Insurance.

TITLE JUSTIFICATION :

The above title is self explanatory. The study deals mainly with

studying the buying pattern in the insurance industry with a special

focus on HDFC Standard Life Insurance. The various segments of the

markets divided in terms of Insurance Needs, Age groups , Satisfaction

levels etc will also studied.

OBJECTIVE

Objective One

To determine reasons behind opting for an insurance.

To provide the company with information of customer's Insurance

policy if they have any and reasons for opting for that particular

policies.

To know the most preferred policy.

Objective Two

50

To determine customers perception towards private insurance

companies and their expectation form private insurance companies.

To determine the feedback on services provided by any other

insurance agent.

To study the types of benefits provided by insurance services.

To determine the use of Internet for valuable information and

decision-making process.

SCOPE OF THE STUDY

A big boom has been witnessed in Insurance Industry in recent times. A

large number of new players have entered the market and are vying to

gain market share in this rapidly improving market. The study deals with

HDFC Standard Life in focus and the various segments that it caters to.

The study then goes on to evaluate and analyze the findings so as to

present a clear picture of trends in the Insurance sector.

SIGNIFICANCE TO THE INDUSTRY :

51

This is a limited study which takes into consideration the responses of 100

people. This data can be explorated to take in the trends across the

industry. The significance for the industry lies in studying these trends

that emerge from the study. It is a rapiddly changing and evolving sector.

People are only beginning to wake up to it’s vast possibilities. A study

like this can attempt to guide the future of the industry based on current

trends.

SIGNIFICANE FOR THE RESEARCHER :

To facilitate and provide all the useful informtaion of the studt, the

company, the insurance industry and also provide marketing ways,

methods of HDFC Standard Life insurance.

RESEARCH DESIGN

NON-PROBABILITY

EXPLORATORY & DISCRIPTIVE EXPERIMENTAL

RESEARCH

52

The research is primarily both exploratory as well as descriptive in nature.

The sources of information are both primary & secondary.

A well-structured questionnaire was prepared and personal interviews

were conducted to collect the customer’s perception and buying behavior,

through this questionnaire.

SAMPLING METHODOLOGY

SamplingTechnique: Initially, a rough draft was prepared keeping in

mind the objective of the research. A pilot study was done in order to

know the accuracy of the Questionnaire. The final Questionnaire was

arrived only after certain important changes were done. Thus my

sampling came out to be judgmental and continent

Sampling Unit:

The respondents who were asked to fill out questionnaires are the

sampling units. These comprise of employees of MNCs, Govt.

Employees, Self Employed etc.

Sample size:

53

The sample size was restricted to only 100, which comprised of mainly

peoples from different regions of Chennai due to time constraints.

Sampling Area :

The area of the research was CHENNAI,TAMILNADU, INDIA.

LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of CHENNAI

(MADRAS) and does not necessarily shows a pattern applicable to all

of Country.

2. Some respondents were reluctant to divulge personal information

which can affect the validity of all responses.

3. In a rapidly changing industry, analysis on one day or in one

segment can change very quickly. The environmental changes are vital

to be considered in order to assimilate the findings.

54

CHAPTER V

RESULT ANALYSIS &

INTERPRETATION

55

ANALYSIS & INTERPRETATION

“A SURVEY ON THE LIFE INSURANCE INDUSTRY IN INDIA”

AGE GROUP OF SURVEYED RESPONDENTS

TABLE 1:

Age group No. of Respondents18 - 25 years 12726 - 35 years 6736 - 49 years 4650 - 60 years 24More than 60 years 6

CHART 1:

Analysis:

56

From the chart above we find that 47% of the respondents fall in the

age group of 18 – 25 years, 25% fall in the age group of 26 – 35 years

and 17% fall in the age group of 36 – 49 years.

Therefore most of the respondents are relatively young (below 26

years of age). These individuals could be induced to purchase

insurance plans on the basis of its tax saving nature and as an

investment opportunity with high returns.

Individuals at this age are trying to buy a house or a car. Insurance

could help them with this and this fact has to be conveyed to the

consumer. As of now many consumers have a false perception that

insurance is only meant for people above the age of 50. Contrary to

popular belief the younger you are the more insurance you need as

your loss will mean a great financial loss to your family, spouse and

children who are financially dependent on you.

GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

TABLE 2: Particulars No. of Respondents

Male 193Female 77

CHART 2:

57

CUSTOMER PROFILE OF SURVEYED RESPONDENTS

TABLE 3:

Customer profile No. of respondentsStudent 62Housewife 5Working Professional 116Business 49Self Employed 24Government service employee 14

CHART 3:

58

Analysis:

From the chart above it can clearly be seen that 43% of

the respondents are working professionals, 23% are

students and 18% are into business. Therefore the target

market would be working individuals in the age group of

18 – 25 years having surplus income, interested in good

returns on their investment and saving income tax.

NO. OF RESPONDENTS WHO HAVE LIFE INSURANCE

POLICY IN THEIR NAME

TABLE 4:

Person who have life insurance policy

Yes 103No 167

CHART 4:

ANALYSIS :

59

This graph shows that out of total 270 respondents only

103 or 38% respondents have life insurance policy in their

name. Rest all don’t have a single policy in their name. So

there is a very big scope for life insurance companies to

cover these people. So in future business of life insurace

will gro further.

MARKET SHARE OF LIFE INSURANCE COMPANIES

TABLE 5:

LIFE INSURER NUMBER OF POLICIES

HDFC STANDARD LIFE 4

BIRLA SUN LIFE 3

AVIVA LIFE INSURANCE 6

BAJAJ ALLIANZ 7

LIC 55

TATA AIG 6

ICICI PRUDENTIAL 12

ING VYSYA 6

BHARTI AXA 2

OTHERS 2CHART 5:

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Analysis:

In India, the largest life insurance company is Life

Insurance Corporation of India. It has been in existence in

India since 1956 and is completely owned by the

Government of India. Today the organization has grown to

2048 offices serving 18 crore policies and has a corpus of

over 340000 crore INR.

61

ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE

TABLE 6:

Premium paid (p.a.) No. of respondents

Rs. 5000 - Rs. 10000 40

Rs. 10001 - Rs. 15000 26

Rs. 15001 - Rs. 24900 18

Rs. 25000 - Rs. 50000 10

Rs. 50001 - Rs. 60000 4

Rs.60001 - Rs. 80000 2

Rs. 80001 - Rs. 100000 3

CHART 6: ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE

62

Analysis:

From the chart above we find that, 39% of the respondents

surveyed pay an annual premium less than Rs. 10001

towards life insurance. 25% of the respondents pay an

annual premium less than Rs. 15001 and 17% pay an

annual premium less than Rs. 25000. Hence we can safely

say that HDFC SLIC would be able to capture the market

better if it introduced products/plans where the minimum

premium starts at Rs. 5000 per annum.

Only 19% of the respondents pay more than Rs. 25000 as

premium and most products sold by HDFC SLIC have

Rs.12000 as the minimum annual premium amount. They

should introduce more products like Easy Life Plus and

Safe Guard where the minimum premium is Rs.6000 p.a.

and Rs. 12000 p.a. respectively. This would definitely

increase their market share as more individuals would be

able to afford the policies/plans offered.

63

POPULAR LIFE INSURANCE PLANS

TABLE 7:

Type of Plan No. of Respondents

Term Insurance Plans 105

Endowment Plans 122

Pension Plans 16

Child Plans 8

Tax Saving Plans 19CHART 7:

POPULAR LIFE INSURANCE PLANS

64

Analysis:

From the chart given above we can clearly see that 45% of

the respondents hold endowment plans and 39% of the

respondents hold term insurance plans. Endowment plans

are very popular and serve two purposes – life cover and

savings.

If the policy holder dies during the policy term the

nominee gets the death benefit that is, sum assured and

accumulated bonus. On survival the policy holder receives

the survival benefit with a bonus.

A term plan is a pure risk cover plan wherein the insured

pays a lower premium for a higher sum assured. Term

insurance is the cheapest form of insurance and helps the

policy holder insure himself for a relatively low premium.

For the returns sensitive investor term plans do not find

favor as they do not offer a return in case the individual

does not die during the policy term.

65

AWARENESS OF UNIT LINKED INSURANCE PLANS

TABLE 8:

Awareness of Unit Linked Plans No. of RespondentsYes 154No 116

CHART 8:

AWARENESS OF UNIT LINKED INSURANCE PLANS

Analysis:

From the chart given above we find that 57% of the

respondents are aware of unit linked life insurance plans

and 43% are not aware of such plans. These plans should

be promoted through advertising. The company can

advertise through television, radio, newspapers, bill boards

66

and pamphlets. This would increase awareness and arouse

curiosity in the minds of the consumer which would enable

the company to market its products more effectively.

Unit – linked plans are those where the benefits are

expressed in terms of number of units and unit price. They

can be viewed as a combination of insurance and mutual

funds. The number of units a customer would get would

depend on the unit price when they pay the premium.

When the policy matures the individual gets his fund

value. The value of his fund is calculated by multiplying

the net asset value and number of units held by them on

that day.

CONSUMER WILLINGNESS TO SPEND ON LIFE

INSURANCE PREMIUM

TABLE 9:

Willingness to spend on premium

No. of respondents Percentage

Less than Rs. 6,000 41 15%

Rs. 6,001 - Rs. 10,000 73 27%

Rs. 10,001 - Rs. 25,000 110 41%

Rs. 25,001 - Rs. 50,000 41 15%

67

Rs. 50,001 - Rs. 1,00,000 5 2%

CHART 9:

CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM

Analysis:

From the graph above, we can clearly see that 41% of the

respondents would be willing to spend between Rs. 10001

– Rs. 25000 for life insurance. 27 % would be willing to

spend between Rs. 6001 – Rs. 10000 per annum. Only

15% would be willing to spend more than Rs. 25000 per

annum as life insurance premium.

We could say that the maximum premium payable by

most consumers is less than Rs. 25000 p.a. This is further

68

reduced as most customers have already invested with

LIC, ICICI Prudential, Birla Sun Life, Bajaj Allianz etc.

HDFC SLIC is faced with a large amount of competition.

There are 18 insurance companies in India inclusive of LIC.

Hence to capture a larger part of the market the company

could introduce more reasonable plans with lesser

premium payable per annum.

CHART SHOWING IDEAL POLICY TERM

TABLE 10:

Ideal policy term No. of respondents

3 - 5 years 51

6 - 9 years 41

10 - 15 years 95

16 - 20 years 38

21 - 25 years 24

26 - 30 years 5

More than 30 years 3

69

Whole life Policy 13

CHART 10:

CHART SHOWING IDEAL POLICY TERM

Analysis:

From the chart given above it can be seen that 35% of the

respondents prefer a policy term of 10 – 15 years, 19%

prefer a term of 3 – 5 years and 15% prefer a term of 6 – 9

years. This means that HDFC SLIC could introduce more

plans wherein the premium paying term is less than 15

years.

70

The outlook of insurance as a product should be changed

from something which you pay for your whole life (whole

life policy) and do not receive any benefit (the nominee

only receives the benefit in case of your death) to an

extremely useful investment opportunity with the

prospects of good returns on savings, tax saving

opportunities as well as providing for every milestone in

your life like marriage, education, children and retirement.

FACTORS THAT MOTIVATE RESPONDENTS TO PURCHASE INSURANCE

TABLE 11:

Parameter No. of RespondentsAdvertisements 35High returns 84Advice from friends 46Family responsibilities 89Others 16

CHART 11:

71

Analysis:

From the chart above it can be seen that 33% of the

respondents purchase life insurance to secure their

families, 33% take life insurance to get high returns, 17%

purchase insurance on the advice of their friends and 13%

purchase insurance because of the influence of

advertisements.

The main purpose of insurance is to cover the financial or

economic loss that occurs to the family in case of the

uncertain death of the policy holder. But now a days this

trend is changing. Along with protection (life cover), a

savings element is being added to insurance.

72

With the introduction of the new unit linked plans in the

market, policy holders get the option to choose where

their money will be invested. They can invest their money

in the equity market, debt market, money market or a

combination of these. The debt and money markets

usually have low risk attached whereas the equity market

is a high risk investment option.

PREFERRED COMPANY TYPE OF THE RESPONDENTS

TABLE 12:

Type of CompanyNo. of

Respondents PercentageGovernment Owned Company 127 47%Public Limited Company 62 23%

Private Company 49 18%

Foreign Company 32 12%

CHART 12:PREFERRED COMPANY TYPE OF THE RESPONDENTS

73

Analysis:

From the graph above we find that 60% of the

respondents preferred to purchase insurance from a

government owned company, 29% of the respondents

preferred to purchase insurance from a public limited

company and only 4% of the respondents preferred a

foreign based company. Heavy advertising through

television, newspapers, magazines and radio is required.

MINIMUM EXPECTED RETURN ON INVESTMENT

TABLE 13:

Expected Returns No. of respondents

74

Less than 5% 5

5% - 10% 39

11% - 15% 46

16% - 20% 49

21% - 25% 46

26% - 30% 27

31% - 40% 22

41% - 50% 14

More than 50% 22

CHART 13:

Analysis:

From the chart above it can clearly been seen that 18% of

the respondents would like 16 – 20% returns, 17% would

75

like returns between 21 – 25% and 17% would like returns

of 11 – 15% on their investments. Therefore the average

return on investment should be at least 16 – 20 %.

Most consumers are willing to adapt to some amount of

risk but still want some guaranteed returns. Therefore the

bulk of investment should be made in the balanced fund

with 50% debt and 50% equity. The returns on the Secure

Fund are guaranteed as these involve investment is

government securities and the debt market. But the

returns on these instruments are low (8 – 10%). If the

company invests in shares, returns are higher (39%) but

correspondingly risk borne by the policy holder is also

higher. Therefore a good combination of the two

instruments is often a wise choice.

76

CHAPTER VI CONCLUSION

77

CONCLUSION

HDFC standard life insurance is first life insurance Company in

India. It has businesses spread out across the globe. It was

registered on 23rd December 2000. It currently ranks number 4

amongst the insurers in India.

The company faces a large amount of competition. To sustain

itself it must promote its products through advertising and

improve its selling techniques. Consumers must be aware of the

new plans available at HDFC SLIC. The medium of advertising

used could be television since most of its competitors use this

tool to promote their products. The company must be promoted

as an Indian company since consumers seem to have more trust

in investing in Indian firms.

The unit linked concept must be specifically promoted. The

general perception of life insurance has to change in India before

78

progress is made in this field. People should not be afraid to

invest money in insurance and must use it as an effective tool for

tax planning and long term savings.

HDFC SLIC could tap the rural markets with cheaper products and

smaller policy terms. There are individuals who are willing to pay

small amounts as premium but the plans do not accept premiums

below a certain amount. It was usually found that a large number

of males were insured compared to females. Individuals below

the age of 30 (mostly male) were interested in investment plans.

This was a general conclusion drawn during prospecting clients.

CHAPTER VII

SUGGESTION

79

Finding and Suggestion

According the survey only 42% people are insured in Alwar

so reaming 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, also its

very help full for insurance sector so they should take

necessary step for capture this potential.

Only 42% people having insurance in Alwar in that 42%

there are 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 to capture the market.

80

81

CHAPTER VIII

QUESTIONNAIRE

82

83

84

Chapter IX

Bibliography

85

By the help of Books

Marketing Management written BY

“Phillip Kotlar” (12 edition, page No 99)

By the Help of Manuals

HDFC Report of 2008 & Internet.

By the help of Other Sources

By the head’s and the consultant of the HDFC SLIC.

By the help of Websites

1. www. IRDAIndia.org.

2. www.insure2bsecure.com

3. www.google.com

4. www. Wikkipedia.com

5. www.hdfcinsurance.com/

86

Chapter X

GLOSSARY

Accident Benefit   An add-on with a life policy. It compensates a policyholder in the event of death or injury by accident.

Budget   It is a tool used to monitor and control expenditures and purchases.

Cover   Another word for insurance; it also refers to the amount of insurance.

Disability rider   A rider that provides for additional cover in the event of disability, or dismemberment, of the policy holder due to an accident.

87

Financial planning   It covers the essential elements of a person’s financial affairs and is aimed at achieving a person’s financial goals.

Hospital cash benefit rider   A rider that provides cover for hospitalization.

IRDA Insurance regulatory development Authority. To ensure the equal development of in country.

Liquidity   The quality of assets that can be easily and quickly converted into cash without any, or significant, loss in value.  

Market value   The monetary value an asset will fetch if sold in the market today.

Nominee   The person(s) nominated by the policyholder to receive the policy benefits in the event of his death.

Policyholder   The person who buys an insurance policy. Also referred to as the ‘insured’.

Riders   Additional covers that can be added to a life policy, for a cost.

Sum assured   The amount of cover taken under a life insurance policy, it is the minimum amount that will be paid on death of the policyholder during the policy term.

Terminal bonus   A one-time bonus paid on maturity of a with-profit plan.

Whole-life plans   Class of life insurance policies that provide cover through your lifetime.

88