CUSTOMERS PERCEPTION OF LIFE INSURANCE

INTRODUCTION TO INSURANCE INDUSTRY

1. WHAT IS INSURANCE? Insurance is a tool by which fatalities of a small number are compensated out of funds (premium payment) collected from plenteous. Insurance is a safeguard against uncertain events that may occur in the future. It is an arrangement where the losses experienced by a few are extended over several who are exposed to similar risks. It is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premium to provide security for the purpose. Loss is paid out of the premium collected from people and the insurance companies act as trustees to the amount so collected. These companies have proposal forms which are filled to give details of insurance required. Depending upon the answers in the proposal form insurance companies assess the risk and decide on the premium. Insurance companies are risk bearers. They underwrite the risk in return for an insurance premium. the function of insurance is to provide protection, prevent losses, capital formation etc. hence insurance can be defined as a tool in which a sum of money as a premium is paid by the insured in consideration of the insurers bearing the risk of paying a large sum .it may also be defined as a contract wherein one party (insurer) agrees to pay the other party (insured) or his beneficiary, a certain sum upon a given contingency against which insurance is required.

CUSTOMERS PERCEPTION OF LIFE INSURANCE

Insurance industry commands massive funds through sales of insurance products to large number of clients. Insurers also create liabilities and commit themselves to compensate for losses occurring to the policyholders on future date. It also plays an important role in process of capital formation. 2. NATURE OF INSURANCE a) Risk sharing and risk transfer: Insurance is used to share the financial losses that might occur to an individual or his family on the happening of specified events. The loss arising from such events are shared by all the insured in the form of premium. Example: suppose in a village, there are 250 houses, each valued at Rs.200000.Every year one house gets burnt, resulting into a total loss of Rs 200000.If all the 250 owners come together and contribute Rs.800 each, the common fund would be Rs200000.This is enough to pay to the owner whose house gets burnt. Thus the risk of one owner is spread over 250 house owners of the village. b) Risk assessment in advance: Insurance companies are risk bearers. They assess the risk before insuring to charge the amount of premium.

c) Its not gambling or charity: The uncertainty is changed to certainty by insuring property and life because the insurer promises to pay a definite sum at damage or death. Insurance is antithesis of gambling. Failure of insurance amounts to gambling because the uncertainty of loss is always looming.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Moreover insurance is not possible without premium. So it is different from charity because charity is given without consideration.

d) Huge number of insured people: It is essential to insure larger number of people or property to make cost of insurance less consequently premium would also be less.

e) Assists in capital formation: Insurance provides capital to society. Accumulative funds are invested in productive channels.

3. SEMANTICS

1.Risk: It is defined as an uncertainty of a financial loss. It is the unintentional decline in or disappearance of value arising from contingency.

2. Policy: It is the document which embodies the insurance contract 3. Whole life policy: It is the policy under which the amount of policy will be paid only on death of the insured. Premiums may be payable throughout the life or for a limited period. 4. Endowment policy: Endowment policies entitle the insured to receive the amount of the policy on his reaching a certain age and premiums also stops. If death occurs earlier, amount of the policy will be paid at that time and payment of premium will also stop at that time. 5. Claim: It is the amount which an insurer has to pay against a policy.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

6. Reinsurance: It refers to placing a part of the risk by an insurer with another insurer. The object is to reduce the possible loss to be borne by the original insurer, who pays premiums at the ordinary rates to the reinsurer. Reinsure must pay commission to the original insurer. 7. Premium: A periodic payment made on an insurance policy.

8. Insurance penetration: It is defined as insurance premium as a share of gross domestic product.

9. Insurance density: Insurance density is defined as per capita expenditure on insurance premium i.e. premium per capita. 10. Actuary: The actuary is a specialist who combines an understanding of risks and mathematical technique to develop financial products to manage these risks, price these products. He helps in designing insurance plans and then evaluates the financial risk of the company which it takes while selling an insurance policy.

CUSTOMERS PERCEPTION OF LIFE INSURANCE

PSYCHOLOGY OF AN INDIAN WHEN IT COMES TO LIFE INSURANCE .

The moment someone wants to talk about life insurance to you, what comes to your mind? Not again! I am already having many life insurance policies with me. more should I invest in Insurance. I need some

How much

other investment option. I really dont need insurance now, I can plan for it during the last quarter of financial year or my limit of Rs. 1 lac is over. Now I dont need insurance policy. How should I ignore this Insurance agent? Now he is going to chase

me day and night. How much commission will this agent give back to me? I am too young to have insurance

The above-mentioned are just few of those thoughts that come to an average Indian who has been asked to buy an insurance policy. The fact of the matter is that Indians have not understood purpose behind insurance. Indians have understood Insurance as a Investment planning tool which combines the benefit of tax planning under section 80C and the maturity amount/ claim proceeds is tax free under section 10(10D). Such policies are typically pushed by an agent, who happens to be some relative/ friend/ acquaintance or he is some banker who chases him until he
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

is forced/ under obligation to buy a policy. The main point is that agent is a sales person and is not really advising the client after knowing his full situation. Agents many times suggest what gives them the best commissions. Many agents typically give the client, some part of his commission back as a sweetener because the commission in the first couple of years are high which the investor is ultimately bearing. The investor feels happy to have got some money back at the time of investment. This is very normal for Indians and there is nothing which is amazing here. The sad part is that the questions which actually should arise in the mind of an investor at the time of taking insurance are just not asked. Typically, one should ask himself the following question: What would happen to my family in case I am not there? Are my disposable assets more than my liabilities? Will my family be able to maintain the standard of living which they

are living right now? Will all financial goals of my family will be met if I am no more ?

These questions just dont arise in investors mind. This has much to do with their psychology . We keep reading sad stories every day in the news papers that such and such family has lost bread earner at a very young age and now deceaseds wife and small kids are left alone. Many a times, within our friends and relatives, we see that the family is in financial distress after an unforeseen bad incident happens to the bread earner.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

We do feel sad and scared but after some time, these all remain just a story to us. We are just thankful that such bad incidents have not happened to us. But who knows, such an incident with you could be news for others! This is what one needs to understand. There are things which is beyond our control and we should be prepared for such untoward incidents and always have a PLAN B with us. By the way, most of the people dont even have Plan A. but let us explain both

CUSTOMERS PERCEPTION OF LIFE INSURANCE

Plan A : Everything goes well and one is able to fulfill his financial goals out of his regular income and investment. Plan B: If something goes wrong which we cant foresee today, Insurance takes care of our Plan A. So insurance basically is for eventuality and not for certainty. The fact is that insurance is most needed by persons who have to travel the maximum distance and not for people who have reached their destination. And here we would say that insurance is most needed by a youngster who has many dreams to fulfill but has miles to go. Just imagine, what would be the financial impact if a retired person dies at the age of 65 whose kids are settled with their own families. At this age, he would have achieved all he could achieve in life. Though the social vacuum cannot be compensated, financially the family is not affected. On the contrary, just imagine what would happen to the family if a young person aged 32, dies due to unforeseen circumstance leaving behind a family of two very young kids and wife. Now, here we would like to explain an equation which would clarify the actual need for insurance. Calculate the value of your Disposable Assets and your liabilities. Disposable assets are those assets which are not for your personal use and which can be converted into cash as they are treated as an investment by you. Your own house in which your family and you reside is an Asset but not disposable asset. Liabilities would not only include financial liabilities like home loan etc. but also social liabilities as daughters
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

marriage, kids higher education, aging parents etc. Now you need insurance if Liabilities are more than disposable assets and one does not need insurance if Disposable Assets are more than Liabilities. So when you are young, your liabilities are more or less known to you and you have yet not created disposable assets for you and your family. So one must take insurance when he is young . But what type of insurance? This is a big question. Manufactures (insurance companies) and distributors (agents) would always sell you what they want to sell. Though it sounds rude and tough on them, thats the reality.

CUSTOMERS PERCEPTION OF LIFE INSURANCE

NEED OF INSURANCE FOR A CUSTOMER

Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets. Asset Protection From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation. The core benefit of life insurance is that the financial interests of ones family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Goal based savings Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence. Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailormade for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

MYTHS ABOUT LIFE INSURANCE IN MINDS OF INDIAN CUSTOMERS

Life insurance is not a simple product. Even term life policies have many elements that must be considered carefully in order to arrive at the proper type and amount of coverage. But the technical aspects of life insurance are far less difficult for most people to deal with than trying to get a handle on how much coverage they need and why. This article will briefly examine the top 10 misconceptions surrounding life insurance and the realities that they distort.

Myth No.1: I'm single and don't have any dependents, therefore I don't need any coverage. Even single persons need at least enough life insurance to cover the costs of personal debts, medical and funeral bills. If you are uninsured, you may leave a legacy of unpaid expenses for your family or executor to deal with. Plus, this can be a good way for low-income singles to leave a legacy to a favorite charity or other cause.

Myth No.2: I only need an amount of life insurance coverage equal to twice the amount of my annual salary. You need an amount of life insurance equal to the amount that is actually required. In addition to medical and funeral bills, you may need to pay off debts such as your mortgage and provide for your family for several years. A cash flow analysis is usually necessary in order to determine the true
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

amount of insurance that must be purchased - the days of computing life coverage based only on one's income-earning ability are long gone.

Myth No.3: My term life insurance coverage at work is sufficient. Maybe , maybe not. For a single person of modest means, employer-paid or provided term coverage may well be enough. But if you have a spouse or other dependents, or know that you will need coverage upon your death to pay estate taxes or create an estate for charity, then additional coverage may be necessary if the term policy does not meet the needs of the policyholder.

Myth No.4: At least the cost of my premiums will be deductible. Afraid not , at least in most cases. The cost of personal life insurance is never deductible unless the policyholder is self-employed and the coverage is used to insure the business. Then the premiums are deductible on the Schedule C of the Form 1040.

Myth No.5: I absolutely MUST have life insurance at any cost. In many cases, this is probably true. However, persons with no debt or dependents and sizable assets may be better off self-insuring. If you have no debt and medical and funeral costs are covered, then life insurance coverage may be optional.

Myth No.6: I should ALWAYS buy term and invest the difference. Not necessarily. The cost of term life coverage can become prohibitively high in later years; therefore, those who know for certain that they must be
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

covered at death should consider permanent coverage. The total premium outlay for a more expensive permanent policy may be less than the ongoing premiums that could last for years longer with a less expensive term policy. There is also the risk of non-insurability to consider, which could be disastrous for those who may have estate tax issues and need life insurance to pay them. But this risk can be avoided with permanent coverage, which becomes paid up after a certain amount of premium has been paid and then remains in force until death.

Myth No.7: Variable universal life policies are always superior to straight universal life policies over the long run because of their longterm growth potential. Many universal policies pay competitive interest rates, and variable universal life (VUL) policies contain several layers of fees relating to both the insurance and securities elements present in the policy. Therefore, if the variable subaccounts within the policy do not perform well, then the variable policyholder may well see a lower cash value than someone with a straight universal life policy. Poor market performance can even generate substantial cash calls inside variable policies that require additional premiums to be paid in order to keep the policy in force.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Myth No.8: Only breadwinners need life insurance coverage. Non sense. The cost of replacing the services formerly provided by a deceased homemaker can be higher than you think, especially when it comes to cleaning and day care.

Myth No.9: I should always purchase the return-of-premium (ROP) rider on any term policy. There are usually different levels of ROP riders available for policies that offer this feature. Many financial planners will tell you that this rider is not cost-effective and should be avoided. Whether you include this rider will depend on your risk tolerance and other possible investment objectives . A cash flow analysis will reveal whether you could come out ahead by investing the additional amount of the rider elsewhere versus including it in the policy.

Myth No.10: I'm better off investing my money than buying life insurance of any kind. Until you reach the breakeven point of asset accumulation, you need life coverage of some sort (barring the exception discussed in Myth No.5.) Once you amass $1 million of liquid assets, you can consider whether to discontinue (or at least reduce) your million-dollar policy. But you take a big chance when you depend solely on your investments in the early years of your life, especially if you have dependents. If you die without coverage for

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

them, there may be no other means of provision after the depletion of your current assets.

These are just some of the more prevalent misunderstandings concerning life insurance that the public faces today. The key concept to understand is that you shouldn't leave life insurance out of your budget unless you have enough assets to cover expenses after you're gone. For more information, consult your life insurance agent or financial advisor.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

PERCEPTION OF PEOPLE TOWARDS INSURANCE THEN AND NOW.

THEN Prior to liberalization, people perceived that insurance was not necessary as it was their myth that they will not get any benefits out of it in future. The level of income being low they resisted to invest in insurance policy. It was their perception that the bank deposits were enough for them for meeting their future requirements. Also the insurance companies were not very transparent in their activities since there was no regulatory authority like IRDA, as a result of which people felt that their funds were misused. They were not sure about whether their family will get the sum assured after their death. Another reason for resistance was that there were limited schemes and the entry for private sector was restricted. NOW The awareness among the people about the insurance has grown. They now feel the need for insuring their as well as their familys lives. There are many choices available to the people now for selecting among the various insurance schemes launched by public sector as well as private sector insurance companies. After IRDA came into being, the safety and guarantee of peoples money with insurance companies is assured. Due to inflation the income of the people has increased and they can now afford to pay insurance premium by investing in more than one insurance scheme. Entry of private sector insurance companies has given more choice to the people for selecting the insurance schemes required by them.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Reasons for changing perception of customers

1. Increased awareness: Now a days people are aware about the need for covering their lives and also making investments through various insurance schemes.

2. IRDA regulation: People are aware about IRDA regulations governing insurance Companies, both in the public sector as well as private sector. People know that their investment in insurance schemes is now safe.

3. Tax benefits: Most of the people employed in service, professionals and self-employed are now a days drawing salaries in higher income bracket. In order to avail benefits u/s 80 C of the Income Tax Act and save Income tax to the maximum extent, these people invest in various insurance policies.

4. Other benefits: Now a days, people can take insurance cover for meeting the higher education needs and marriages of their children. Hence, they opt for endowment insurance policies.

5. Measure of security: Most of the people are now aware that it is advisable to opt for insurance policies at a younger age with minimal insurance premium to make their future secured and be independent.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

INDUSTRY PROFILE OF ICICI AS AN INSURANCE COMPANY

ICICI PRUDENTIAL LIFE INSURANCE COMPANY ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past seven years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

flexible products that meet the needs of the Indian customer at every step in life. a) VISION To be the dominant Life, Health and Pensions player built on trust by worldclass people and service. This we hope to achieve by: Understanding the needs of customers and offering them superior

products and services. Leveraging technology to service customers quickly, efficiently and

conveniently Developing and implementing superior risk management and

investments strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for

our employees And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5 core values ,Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

b) VALUES Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.

c) DEPARTMENTS AND BRANCHES OF ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED

Branches: ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with over 945 branches in addition to 550 micro-offices and an advisor base of 270,000. Distribution Network: There are four different ways of distributing a Life insurance product namely

1. Agents (Financial Advisors):- Anybody possessing the minimum qualification of 10+2 after completing 100 hrs of training from the training institute approved by IRDA can sell life insurance products of any particular company which has sponsored him to take the training. This is the most popular distribution channel.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

2. Corporate Agents : Any corporate may apply for license to sell insurance after complying with the requirements of IRDA.

3. Bancassurance : If the corporate agent is a bank, then it is known as bancassurance. Banks can sell the policies to their existing as well as prospective clients. This is becoming quite popular these days and the bank earns huge fund based income. Bancassurance has 1% share in total premium collection in 2004- 05.

4. Broker: They are like corporate agents with only difference that they can sell the products of more than one insurance company.

Departments: The various departments that can be seen in an insurance organization . a) Marketing Department: This department mainly deals with the marketing and promotion part of the Insurance Company. They spend most of their time in formulating strategies to make their products known to the common people and to promote the same in a easy and cost effective way. b) Sales Department: This department mainly deals with the sales part of the Insurance Company; the department includes designations like Sales Manager and Financial Advisor who personally contacts with people for performing the task of sales of various products. c) Accounts/ Financial Department: This department has the task of keeping track of the various expenses incurred by the various other departments of
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

the organization and also performs the task of allocating various funds to different departments according to their requirements. d) Human Resource Department: This department is handled by the Human Resource manager of the company. The function of this department involves the well being of the employees of the company, I,e, to see whether there is employee grievance in the organization or not and if it is there what are the possible causes for that and also try to find out solutions for the same if possible. e) Investment Department: This department deals with the task of investing the money of the policy holders in such way that will ensure both safety of the money and also a steady return on the same. The task of this department is very difficult as it deals with the money given by the policy holders, so it requires lot of thinking on the part of the personnel of this department before deciding where to invest the money. f) Actuarial Department: This department is under the supervision of an Actuary who decides the premiums and charges to be taken from the policy holder on the basis of certain informations (like Age, Annual Income etc.) provided by the prospective customer. The task also involves the calculation of mortality charges which requires high statistical knowledge from ones point of view. So, this department involves in the calculation of various amounts to be charged from the prospective customers.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

d) ICICI PRUDENTIAL LIFE INSURANCE PRODUCTS Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder. Savings & Wealth Creation Solutions Save 'n' Protect is a traditional endowment savings plan that offers life

protection along with adequate returns. Cash Back is an anticipated endowment policy ideal for meeting

milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years. Life Time Gold & Life Time Plus are unit-linked plans that offer

customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 6 fund options -

Preserver, Protector, Balancer, Maximiser, Flexi Growth and Flexi Balanced. Life Link Super is a single premium unit linked insurance plan which

combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life Gold is a limited premium paying plan specially

structured for long-term wealth creation.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Invest Shield Life New is a unit linked plan that provides premium

guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. Invest Shield Cash back is a unit linked plan that provides premium

guarantee on the invested premiums along with flexible liquidity options.

Protection Solutions Life Guard is a protection plan, which offers life cover at low cost. It is

available in 3 options - level term assurance, level term assurance with return of premium & single premium. Home Assure is a mortgage reducing term assurance plan designed

specifically to help customers cover their home loans in a simple and costeffective manner.

Education insurance plans Education insurance under the Smart Kid brand provides guaranteed

educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the child's life. Smart Kid plans are also available in unit-linked form - both single premium and regular premium.

Retirement Solutions Forever Life is a traditional retirement product that offers guaranteed

returns for the first 4 years and then declares bonuses annually.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Life Time Super Pension is a regular premium unit linked pension plan

that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement. Life Link Super Pension is a single premium unit linked pension plan. Immediate Annuity is a single premium annuity product that guarantees

income for life at the time of retirement. It offers the benefit of 5 payout options. Premier Life Pension is a unique and convenient retirement solution

with a limited premium paying term of three or five years, to suit professionals and businessmen, especially those who require more flexibility and customization while planning their finances.

Health Solutions Health Assure Plus: Health Assure is a regular premium plan which

provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover.

Cancer Care: is a regular premium plan that pays cash benefit on the

diagnosis as well as at different stages in the treatment of various cancer conditions.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Cancer Care Plus: is a wellness plan that includes all the benefits of

Cancer Care and also provides an additional benefit of free periodical cancer screenings. Diabetes Care: Diabetes Care is a unique critical illness product developed for individuals with Type 2 diabetes and pre-

specially

diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover. Diabetes Care Plus: is a unique insurance policy that provides an

additional benefit of life cover for Type 2 diabetics and pre-diabetics. Hospital Care: is a fixed benefit plan covering various stages of

treatment -hospitalization, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage up to 20 years. Crisis Cover: is a 360-degree product that will provide long-term

coverage against 35 critical illnesses, total and permanent disability, and death.

Group Insurance Solutions ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Findings- data analysis PERCEPTION OF INSURANCE:

Perception No. of respondents Safety Tax benefits Company profile Both safety and tax benefits Total 10 6 3 11 30

Safety Tax benefits Company profile Both safety and tax benefits

Interpretation: It is clear that most of the people perceive insurance as both safety and tax benefit. Other factors like company profile and capital growth are secondary.
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

INVESTMENT PREFERRED BY CUSTOMERS: Investment alternative Short term Long term both total No. of respondents 3 9 18 30 percentage 10 30 60 100

no. of respondents
short term

long term both

From the above pie diagram we can observe that customers prefer short term investment over long term investment. But it is also observed that there is not much difference between the choice of investments. People mostly prefer both long term and short term investment.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

TYPE OF POLICIES PREFERRED BY THE CUSTOMERS

Type of policy Life insurance Education plan Retirement plan Money growth plan No. of respondents 15 4 3 8 Percentage 50 13.33 10 26.66

No. of respondents

27% Life insurance 50% 10% 13% Education plan Retirement plan Money growth plan

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

AWARENESS ABOUT JOINT VENTURE BETWEEN ICICI AND PRUDENTIAL:

Awareness

about Employed

Professionals and Others self- employed

ICICI prudential Yes No 9 13

2 1

3 2

14 12 10 8 6 4 2 0 Yes No Awareness about the joint-venture. Professionals and self employed Others Employed

Interpretation: Now coming to the point of awareness among the people about ICICI Prudential Life Insurance, the response was very disappointing from the point of view of the company. Out of 30 respondents 16 respondents did not have the knowledge about the joint venture between ICICI bank with
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Prudential Plc of UK to form a first private sector insurance company in India called ICICI Prudential Life Insurance in December 2000, while the rest 14 had knowledge of the joint venture of Prudential by ICICI.

CHANGING

PERCEPTION

OF

CUSTOMERS

TOWARDS PRIVATE INDUSTRY

Most of the customers perceive public sector insurance company as safest. When asked about whether they would like to invest in ICICI prudential life insurance most of the customers gave a negative reply. Out of the sample of 30, only 3 customers had taken insurance policy from the private insurance companies. It is observed that these people belong to age group ranging from 20-35 years while others above 35 years of age mostly prefer insurance from a public sector company (LIC). Thus it is evident that the perception about the private insurance firm is now changing. The youngsters now are turning to the private insurance companies as they have a good risk bearing ability and increased awareness regarding the credibility of the private insurance companies. The young generation is also aware about the role played by IRDA in regulating the insurance companies, due to which their perception is changing.

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CONCLUSION
Based on the answers to the questionnaire received from people who are in service, self- employed/ professionals and retired employees, I have arrived to the following conclusions: It is also observed that age group has no influence over which insurance policy is taken by the customer. Life insurance and health plan are popular among all the age groups. Educational plan is preferred by customers for their children. Many have taken up this policy for their children who are either in college or have just started their education. Almost all of them have opted for LIC of India insurance policies as they perceive that it is safe to insure their life by taking policies from a Public sector Company. Most of the people perceive insurance policy as a measure for safety. It has been observed that professional, self employed and retired people consider safety and capital growth as most important factor to opt for life insurance policies. In case of those who belong to service sector, tax benefit is the most important factor. It is observed that most of the people are aware of the joint venture between ICICI bank with Prudential of U.K forming a private sector company to offer Insurance product.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

ICICI has a very good brand image among the customers. But when asked whether they would like to invest in the Company majority of them gave a negative response. Customers were given options like brand image, diversity, growth, potential, transparency, utmost good faith and were asked about their opinion about which quality of ICICI would make them invest in that Company. Those who were ready to invest preferred brand image and utmost good faith.

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

QUESTIONNAIRE
1) Age: 2) Occupation: 3) Annual income: 4) What percentage of salary do you usually save? Less than 15%____ 15% - 20% ____ 20% - 25% ____ more than 25% ____

5) What kind of investment do you prefer? Short term ____ long term ____ Both ____

6) How do you perceive insurance? Safety____ Liquidity ____ Tax benefit ____ Company profile and brand image ____
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Capital growth ____ Return _____

CUSTOMERS PERCEPTION OF LIFE INSURANCE

7) Do you have an insurance policy? Yes____ No____

8) If yes, which insurance companys policy do you have?

9) What scheme of insurance policy have you taken? Life insurance____ Education plan ____ Retirement plan ____ health plan____ Money growth plan____ others____

10)

Are you aware about the joint venture between ICICI bank with

prudential of UK to form the first private sector company to offer insurance products? Yes____ No____ 11) Would you like to invest in ICICI prudential life insurance?

Yes____ No____
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CUSTOMERS PERCEPTION OF LIFE INSURANCE

12)

If yes, what will make you to invest in ICICI prudential life

insurance? Brand image ____ Growth____ Transparency____ Others____ Diversity____ Potential____ Utmost good faith____

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

Webliography www.wikipedia.com www.iciciprudentiallifeinsurance.co www.google.com

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