CHAPTER 1

Introduction of Insurance
WHAT IS INSURANCE?
Insurance is defined as a co-operative device to spread the loss caused by
a particular risk over a number of persons who are exposed to it and who
agree to ensure themselves against that risk. Risk is uncertainty of a
financial loss.
Insurance is a policy from large financial institutions that offers a person,
company, or other entity reimbursement or financial protection against
possible future losses or damages.
MEANING OF INSURANCE:The meaning of insurance is important to understand for anybody that is
considering buying an insurance policy simply understanding the basics
of finance. Insurance is a hedging instrument used as a precautionary
measure against future contingent losses. This instrument is used for
managing the possible risks of the future.
Insurance is bought in order to hedge the possible risks of the future
which may or may not take place. This is a mode of financially insuring
that if such a incident happens then the loss does not affect the present
well-being of the person or the property insured. Thus, through insurance,
a person buys security and protection.
A simple example will make the meaning of insurance easy to understand.
A biker is always subjected to the risk of head injury. But it is not certain
that the accident causing him the head injury would definitely occur. Still,
people riding bikes cover their heads with helmets. This helmet in such
cases acts as insurance by protecting him/her from any possible danger.
The price paid was the possible inconvenience or act of wearing the
helmet; this is equivalent to the insurance premiums paid.Though loss of
life or injuries incurred cannot be measured in financial terms, insurance
attempts to quantify such losses financially. Insurance can be defined as
the process of reimbursing or protecting a person from contingent risk of
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losses through financial means, in return for relatively small, regular

payments to the insuring body or insurance company.

TYPES OF INSURANCE:-

Insurance

Non-Life
Insurance

General
Insurance

Life
Insurance

Miscellaneo
us
Insurance

WHAT IS LIFE INSURANCE?

Life insurance may be defined as a contract in which the insurer in
consideration of a certain premium either in lump sum or other periodical
payments, agrees to pay to the assured or to the person for whose benefits
the policy is taken, a stated sum of money on the happening of a
particular event contingent on the duration of human life. Thus, under a
whole-life assurance, the policy is payable at the of the assured and under
an endowment policy, the money is payable on the assureds surviving a
stated period of years.

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MEANING OF LIFE INSURANCE:According to sec (2) (11) of the Insurance Act, Life insurance business
means the business effecting contracts upon human life. It includes:a. Any contracts whereby the payment of money is assured upon
death (except death by accident only) or the happening of any
contingency dependent on human life.
b. Any contract which is subject to the payment of premium for a
term dependent on human life.
c. Any contract which include the granting of disability and double or
triple indemnity, accident benefits, the granting of annuities upon
human life, and the granting of super-annuation allowances.

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CHAPTER 2
COMPANY PROFILE

LIC Of India .LTD

The Life Insurance Corporation of India has been a national-builder
since its formation in1956. The performance of LIC has been
exemplary and has been growing from strength be it customer base,
agency network, branch office network, new business premium and the
like. It has played a significant role in spreading life insurance widely
across the country. True to objectives of nationalization, the LIC has
invested the funds mobilized from policyholders for the benefit of the
community at large.
The other subsidiary companies under LIC are:
Life Insurance Corporation (LIC) of India International A joint
venture offshore company promoted by LIC which commenced
its operations in July, 1989 with the objective of offering policies
denominated in US $ to NRIs residing in the Gulf.
LIC Nepal Formed in 2001 in joint venture with Vishal Group
of Industries, Nepal.
LIC Lanka Formed in 2003 in joint venture with Bartleet
Group of Companies, Sri Lanka
LIC Housing Finance Established in 19th June, 1989 in Dubai
with the objective of providing long term finance for

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LIC Jeevan Kishore

This insurance policy is designed for
people who wish to save money for a
Future time when there will be a
recurring need for substantial amounts
of money. This is especially true when
it comes to paying large sums of
money for higher education as and
when your son or daughter is studying
to become an Engineer, a Doctor or
specialize in some other field, or is
perhaps planning to go abroad for
higher education.

Features: a) Minimum entry age is 0 year and

maximum 12 year
b) Minimum sum assured is Rs.
50,000.
c) Minimum premium paying term is
15 year and maximum 35 year
d) Tax benefit is available
e) Maturity amount = Sum assured +
bonus
f) Loan facility is available
g) Policy is given on the life of the
child.

Reliance Child Plan

This insurance policy is designed for
people who wish to save money for a
Future time when there will be a
recurring need for substantial
amounts of money. This is especially
true when it comes to paying large
sums of money for higher education
as and when your son or daughter is
studying to become an Engineer, a
Doctor or specialize in some other
field, or is perhaps planning to go
abroad.
This money is payable in equal
instalments over the last 4 years of the
Policy term.
Features: a) Minimum entry age is 20 year and
maximum 60 year
b) Minimum sum assured is Rs.
25,000.
c) Minimum premium paying term is
5 year and maximum
20 year
d) Tax benefit is available
e) Maturity amount = Four equal
instalment of sum insured in last four
year plus vested bonus in the last
year.

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h) Father can propose, Mother can

also propose if she has her own
income.
i) Age of entry is calculated as age at
last birthday & not as age nearer
birthday.
j) life risk will commence from the
policy anniversary after completion of
7 years of age or 2 years from the date
of commencement of the policy,
whichever is earlier
Modes allowed:Premiums can be paid regularly at
yearly, half-yearly, quarterly or
monthly intervals (through ECS only
or through salary deductions) over the
Policy Term.
However, a grace period of one
calendar month but not less than 30
days will be allowed for payment of
yearly or half-yearly or quarterly
premiums and 15 days for monthly
premiums

f) Loan facility is available

Modes allowed:Premiums can be paid regularly at

yearly, half-yearly, quarterly or
monthly intervals (through ECS only
or through salary deductions) over the
Policy Term.
However, a grace period of one
calendar month but not less than 30
days will be allowed for payment of
yearly or half-yearly or quarterly
premiums and 15 days for monthly
premiums

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LIC Endowment Policy Table-14

is the key to all your financial needs.
It is an inexpensive and easy way to
protect you, your family or your
business. In a nutshell this plan will
keep you financially prepared for all
the special occasions in your life your daughters wedding, your childs
university education or even a new
office for your business - by
eliminating the burden that a shortage
of money creates. In the event of your
untimely death, LIC Endowment
Policy will also assist your loved ones
through this difficult time by the
financial support that it provides. LIC
Endowment Policy also gives you the
additional benefit of participating in
the companys profits, which you will
receive at the end of the policy period.

Features: a) Entry age minimum is 12 year and

maximum 65 year
b) Maturity age maximum 75 year
c) Minimum premium paying term is
5 year and maximum 55
d) Most popular plan for fulfilling all
long/short term financial needs
e) Maturity benefit:- Sum assured +
bonus, Final additional bonus is also
given, if premium paid is for 15 years
or more.

Reliance Endowment Plan

Reliance Life Insurances Reliance
Endowment Plan is the key to all your
Financial needs. It is an inexpensive
and easy way to protect you, your
family or your business. In a nutshell
this plan will keep you financially
prepared for all the special occasions
in your life - your daughters
wedding, your childs university
education or even a new office for
your business - by eliminating the
burden that a shortage of money
creates. In the event of your untimely
death, Reliance Endowment Plan will
also assist your loved ones through
this difficult time by the financial
support. That it provides also gives
you the additional benefit of
participating in the companys profits,
which you will receive at the end of
the policy period.
Features: a) Entry age minimum is 5 year and
maximum 65 year
b) Maturity age minimum is 18 year
and maximum 75 year
c) Minimum premium paying term is
5 year and maximum 35 year in case
of regular and in case of single 15
year
d) Maturity benefit:- Sum assured +
bonus

f) Death benefit: - Sum assured + e) Death benefit: - Sum assured +

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accrued bonus is given to the accrued bonus is given to the

nominee. If premium paid is for 15 nominee.
years or more
f) Minimum sum assured is Rs.
25,000 or as determined by the
minimum premium
g) Maximum sum assured is Rs.
5,00,000 (entry age below 18
years and no limit for entry age 18
and above)
h) Loan up to 90% of the surrender
value of the policy
Modes allowed:Modes allowed:Premiums can be paid regularly at Premiums can be paid regularly at
yearly, half-yearly, quarterly or yearly, half-yearly, quarterly or
monthly intervals (through ECS only monthly intervals (through ECS only
or through salary deductions) over the or through salary deductions) over the
Policy Term.
Policy Term.
However, a grace period of one However, a grace period of one
calendar month but not less than 30 calendar month but not less than 30
days will be allowed for payment of days will be allowed for payment of
yearly or half-yearly or quarterly yearly or half-yearly or quarterly
premiums and 15 days for monthly premiums and 15 days for monthly
premiums
premiums

LIC Jeevan Anand

This policy is combination of whole
life & endowment assurance plan.
This insurance policy is designed for

Reliance Special Endowment Plan

This insurance policy is designed for
people who wish to combine savings
with extended security. The unique
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people who wish to combine savings

with extended security. Even after the
premium paying term is over, Risk
cover continuous till the death of the
policyholder.
This
plan
also
participates in the profits.

Features: a) Entry age minimum 18 year and

maximum 65 year
b) Minimum sum assured is Rs.
1,00,000
c) Minimum premium paying term is
5 year and maximum 57 year
d) Tax benefit is available
e) Loan facility is available upto age
70
f) Accident benefit is available during
the premium paying term & thereafter
g) Maturity amount = Sum assured +
bonus with final additional bonus if
any

g) Death amount =
1. If death occurs after the
premium paying term an
additional amount equal to sum
assured is payable & no bonus
is payable
2. If death occurs before the
premium paying term sum
assured plus accumulated bonus
is payable.

feature of this policy is that life

protection continues for five years
after you have stopped the payment of
premium. Payment of sum assured at
the end of premium paying term and
extension of life cover thereafter for
the full sum assured for a period of 5
years, are characteristics of the policy.
This plan also participates in the
profits.
Features: a) Entry age minimum 12 year and
maximum 65 year
b) Minimum sum assured is Rs.
25,000
c) Minimum premium paying term is
10 year and maximum 40 year
d) Unique feature of this policy is that
five year life protection
continues after you have stopped the
payment of premium
e) Tax benefit is available
f) Under this policy bonus is
compounded yearly
g) Loan facility is available

h) Maturity amount = Full sum

assured before maturity date +
Vested bonus at the time of maturity
date
i)Death amount = sum assured +
bonus paid to the nominee

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Modes allowed:Premiums can be paid regularly at

yearly, half-yearly, quarterly or
monthly intervals (through ECS only
or through salary deductions) over the
Policy Term.
However, a grace period of one
calendar month but not less than 30
days will be allowed for payment of
yearly or half-yearly or quarterly
premiums and 15 days for monthly
premiums

Modes allowed:Premiums can be paid regularly at

yearly, half-yearly, quarterly or
monthly intervals (through ECS only
or through salary deductions) over the
Policy Term.
However, a grace period of one
calendar month but not less than 30
days will be allowed for payment of
yearly or half-yearly or quarterly
premiums and 15 days for monthly
premiums

LIC Jeevan Surabhi

Reliance Cash Flow Plan

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This insurance policy is designed for

those who have a recurring need.it is
suitable
for
businessman
&
professionals as money is available
periodically.
The money is payable in instalment.
The instalment is paid in every 4
years of completion of policy years.
For first & second instalment are
same depends on basic sum assured

This insurance policy is designed for

those who have a recurring need for
Reinvestment in business or look for
short-term investment channels. The
advantage of the policy is that they
need not part with a sizable amount of
money at any one time, but create,
through regular premium payments, a
periodic return of lump sums which
become available for reinvestment at
Higher returns, while providing
simultaneously, substantial life cover.
Alternatively, it can be used to meet
any immediate financial crisis in the
family like your son's college
admission,
your
daughter's
engagement, and renovation of your
home or perhaps, a holiday abroad.
The money is payable in instalments.
The first instalment is paid at the end
of the 4th year and thereafter at the
end of every 3rd year.

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Features:a) Minimum entry age is 14 year and

maximum is 55 year
b) Maximum premium paying term is
12 year
c) Loan facility is available
d) In case of death before maturity
sum assured along with bonus is paid
to nominee
e) The survival benefit already paid
will not be deducted from the death
claim amount
f) The risk cover increases by 50% of
the sum assured once in every 5 years

Features:a) Plan with profits

b) Minimum entry age is 15 year and
maximum is 63 year
c) Maximum premium paying term is
34 year
d) Loan facility is not available
e) In case of death full sum assured +
accrued bonuses up to the date of
death is payable immediately
f) In case of survival up to maturity
date all premium paid
g) Rider accident death and critical
illness

Modes allowed:Premiums can be paid regularly at

yearly, half-yearly, quarterly or
monthly intervals (through ECS only
or through salary deductions) over the
Policy Term.
However, a grace period of one
calendar month but not less than 30
days will be allowed for payment of
yearly or half-yearly or quarterly
premiums and 15 days for monthly
premiums

Modes allowed:Premiums can be paid regularly at

yearly, half-yearly, quarterly or
monthly intervals (through ECS only
or through salary deductions) over the
Policy Term.
However, a grace period of one
calendar month but not less than 30
days will be allowed for payment of
yearly or half-yearly or quarterly
premiums and 15 days for monthly
premiums

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LIC Group Term Insurance Scheme

Group (term) Insurance Scheme is meant to provide life insurance
protection to groups of people. Administration of the scheme is on group
basis and cost is low. Under Group (Term) Insurance Scheme, life
insurance cover is allowed to all the members of a group subject to some
simple insurability conditions without insisting upon any medical
evidence. Scheme offers covers only on death and there is no maturity
value at the end of the term.
Group (Term) Insurance Scheme is at present offered under One Year
Renewable Group term assurance plan (OYRGTA). Every year on Annual
Renewal date LIC charges the premium depending upon the changes in
size and age distribution of the age group
Features:a)Group (term) Insurance Scheme has a number of varieties . The Scheme
may provide for a uniform cover to all members of the group or graded
covers for different categories of members, cover for all amounts of
outstanding housing loans or vehicle advances, or some other benefits
(e.g., life cover to supplement pension or PF benefits in case of death).
The schemes may have add-ons like Double Accident Benefit,Critical
Illness Benefit, Disability benefit etc.
b)The premium under such scheme may be wholly paid by the employer
or the Nodal Agency. However, the scheme may be contributory i.e. the
members may also contribute
c)Double Accident Benefit, i.e. payment of double the sum assured on
death due to accident (without permanent disability benefit), may be
allowed under Group Insurance Schemes for an extra premium.
d)For Group Insurance Scheme in lieu of EDLIS the insurability
condition is that should be a member of the Provident Fund Scheme of the
employer. For other GI Schemes of employer-employee groups the
insurability condition is that the member should not be absent on ground
of sickness on the entry date. For all non-employer-employee Group
Schemes the basic insurability condition is that the member should be in
good health on the date of entry.
e)At the commencement and thereafter on each Annual Renewal Date, the
Group Policyholder will have to send all the member's data (and
particulars of the new entrants from time to time) to the P & GS unit of

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LIC. Detailed OYRGTA premium calculation will be made on each

Annual Renewal Date.

Modes allowed:Premiums can be paid regularly at yearly, half-yearly, quarterly or

monthly intervals (through ECS only or through salary deductions) over
the Policy Term.
However, a grace period of one calendar month but not less than 30 days
will be allowed for payment of yearly or half-yearly or quarterly
premiums and 15 days for monthly premiums
Reliance Group Term Assurance Plan
A non-linked, non-participating, one year renewable group term assurance
plan Staying competitive in this market requires a steady focus on your
core business. Reliance Life Insurance Company Limited takes on the
responsibility of providing a customized protection solution to support
and strengthen your core business functions, which, if handled poorly or
inefficiently, can undermine your profitability
Features:a)Helps the employer to provide comprehensive financial security to the
employees at a minimal cost
b)Flexibility for new members to join in and existing ones to leave the
group
c)Simplified procedures for insurability limited or no medical tests
d)Insured members can benefit from free cover limits
e)In case of surrender of the Master Policy, individual members of the
group have an option to purchase death cover with Reliance Life
Insurance Company Limited.
f) In case of death full amount of sum assured is payable to nominee
g)In case of surrender of the Master Policy, individual members of the
group have an option to purchase death cover with Reliance Life
Insurance Company Limited, under an individual term, individual
endowment or whole of life policy, subject to our premium rates, terms,
conditions and availability at that time.

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Modes allowed:Premiums can be paid regularly at yearly, half-yearly, quarterly or

monthly intervals (through ECS only or through salary deductions) over
the Policy Term.
However, a grace period of one calendar month but not less than 30 days
will be allowed for payment of yearly or half-yearly or quarterly
premiums and 15 days for monthly premiums.

Tax Benefits
INCOME
SECTION

ANNUAL

HOW MUCH TAX CAN YOU

SAVE?

Sec. 80C

Across All income Slabs

Upto Rs. 33,990 saved on

investment
of
Rs. 1,00,000.

Sec. 80 CCC

Across
slabs.

income

Upto Rs. 33,990 saved on

Investment of Rs.1,00,000.

Sec. 80 D

Across all income slabs

Upto Rs. 3,399 saved on

Investment
of
Rs. 10,000.

TOTAL SAVINGS
POSSIBLE

TAX

GROSS
SALARY

all

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.

Sec. 10 (10)D

Under Sec. 10(10D), the benefits you

receive
are
completely
tax-free,
subject to the conditions laid down
therein.

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CHAPTER 4
Code of conduct for Agents & Actruty
1. Agents
Insurance Regulatory and Development Authority
(Licensing of Insurance Agents) Regulations, 2000 Code of
Conduct
(1) Every person holding a licence, shall adhere to the code of conduct
specified below:A. Every insurance agent shall,
(a) identify himself and the insurance company of whom he is an
insurance agent;
(b) disclose his licence to the prospect on demand;
(c) disseminate the requisite information in respect of insurance
products offered for sale by his insurer and take into account the
needs of the prospect while recommending a specific insurance
plan;
(d) disclose the scales of commission in respect of the insurance
product offered for sale, if asked by the prospect;
(e) indicate the premium to be charged by the insurer for the
insurance product offered for sale;
(f) explain to the prospect the nature of information required in the
proposal form by the insurer,and also the importance of disclosure
of material information in the purchase of an insurance contract;
(g) bring to the notice of the insurer any adverse habits or income
inconsistency of the prospect, in the form of a report (called
Insurance Agents Confidential Report) along with every
proposal submitted to the insurer, and any material fact that may
adversely affect the underwriting decision of the insurer as regards

16 | P a g e

acceptance of the proposal, by making all reasonable enquiries

about the prospect;
(h) inform promptly the prospect about the acceptance or rejection
of the proposal by the insurer;
(i) obtain the requisite documents at the time of filing the proposal
form with the insurer; and other documents subsequently asked for
by the insurer for completion of the proposal;
(j) render necessary assistance to the policyholders or claimants or
beneficiaries in complying with the requirements for settlement of
claims by the insurer;
(k) advise every individual policyholder to effect nomination or
assignment or change of address or exercise of options, as the case
may be, and offer necessary assistance in this behalf,wherever
necessary;
B. No insurance agent shall,
(a) solicit or procure insurance business without holding a valid
licence;
(b) induce the prospect to omit any material information in the
proposal form;
(c) induce the prospect to submit wrong information in the proposal
form or documents submitted to the insurer for acceptance of the
proposal;
(d) behave in a discourteous manner with the prospect;
(e) interfere with any proposal introduced by any other insurance
agent;
(f) offer different rates, advantages, terms and conditions other than
those offered by his insurer;
(g) demand or receive a share of proceeds from the beneficiary
under an insurance contract;
(h) force a policyholder to terminate the existing policy and to
effect a new proposal from him within three years from the date of
such termination;

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(i) have, in case of a corporate agent, a portfolio of insurance

business under which the premium is in excess of fifty percent of
total premium procured, in any year, from one person (who is not
an individual) or one organisation or one group of organisations;
(j) apply for fresh licence to act as an insurance agent, if his licence
was earlier cancelled by the designated person, and a period of five
years has not elapsed from the date of such cancellation;
(k) become or remain a director of any insurance company;
(iii) Every insurance agent shall, with a view to conserve the
insurance business already procured through him, make every
attempt to ensure remittance of the premiums by the policyholders
within the stipulated time, by giving notice to the policyholder
orally and in writing;

2. Acturies
Legislation or Authority:
1. The Insurance Act 1938 (hereinafter referred to as the Act) and
amendments thereto including the Insurance Regulatory and Development
Authority Act, 1999.
2. The Insurance Rules 1939 (hereinafter referred to as the Rules).
3. Insurance Regulatory and Development Authority (Appointed Actuary)
Regulations 2000 - (hereinafter referred to as AA Regulations).

Application :
This APS is applicable to an Appointed Actuary, appointed in accordance
with provisions contained under AA Regulations, who is appointed by an
Insurer carrying on the business of Life Insurance as defined under
Section 2(11) of the Insurance Act 1938, and shall constitute Professional
Standard within the meaning of Regulation 2(e) of the AA Regulations.
This is also applicable to all other actuaries who as a matter of course get
associated with a life insurer and have to relate directly or indirectly to the
Appointed Actuary of such life insurer.
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1. Legal Framework
1.1. The following regulations and amendments thereto formed under the
Insurance Regulatory and Development Authority Act, 1999 define the
role of the Appointed Actuary in the management of life insurance
companies:
1.1.1. Appointed Actuary,
1.1.2. Registration of Indian Insurance Companies,
1.1.3. Actuarial Report and Abstract,
1.1.4. Assets, Liabilities and Solvency Margin of Insurers,
1.1.5. Investment,
1.1.6. Preparation of Financial Statements and Auditors Report of
Insurance Companies, and
1.1.7. Life Insurance - Re-insurance.
1.2. Section 13(1) of the Act requires the Appointed Actuary to perform
an annual investigation into the financial condition of the life insurance
business
2. Nature of Responsibility
2.1. The responsibilities of an actuary who is appointed under the
AA Regulations, are central to the financial soundness of the life
insurance company to which he is so appointed.
2.2. An Appointed Actuary should ensure, so far as is within his/her
authority, that the life insurance business of the company is
conducted on sound financial lines and that he/she has regard to
Policyholders Reasonable Expectations (PRE).
2.3. The essence of a profession lies in upholding its standards,
technical and ethical, in the public interest. As Actuary, who
becomes doubtful as to the proper course to adopt in relation to a
potentially significant matter, is strongly advised to seek help and
advice from IAI.

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3. Extent of the Appointed Actuarys responsibility

3.1. Every actuary has a responsibility to the profession and his/her
responsibilities to a client must be consistent with this. An
Appointed Actuary is however also in a special position as he/she
has statutory responsibilities to the IRDA. If these two aspects
materially conflict, the Appointed Actuary has to advise the
company as soon as he/she feels that the company has initiated
action or a situation has arisen outside the control of the company
that materially threatens its solvency. If the company does not
remedy the situation, the Appointed Actuary is required to advise
the IRDA but not before informing the company first. This duty
applies, notwithstanding restrict or inhibit discharge of this
responsibility.
3.2. The Appointed Actuary has a continuing responsibility to look
after the reasonable expectations of the companys policyholders,
having regard to; i. the broad nature of the company, and ii. Its
approach to the treatment of policyholders both individual and as a
group vis-- vis shareholders. If a significant change is likely, the
Appointed Actuary must make sure that the company appreciates
the implications of this on its policyholders reasonable
expectations.
3.3. The Appointed Actuary must take all reasonable steps to ensure
that new policyholders are not misled with regard to their
expectations, e.g. in connection with illustrations at the point of
sales.
3.4. The Appointed Actuary must ensure that his or her conduct and
reach and depth of his or her functionalities enable him or her to
discharge his or her duties and obligations in letter and spirit in
accordance with regulation (8) of AA Regulations.
4. The duties of the Appointed Actuary
4.1. Though Sec 13(1) of Insurance Act 1938 requires an
investigation to be made by an actuary into the financial condition
of the Life Insurance business every year, the Appointed Actuary
20 | P a g e

must as any provision or provisions contained in the code of

conduct of the IAI which might seem to Page 4 of 8 Actuarial
Practice standard (APS) 1 a matter of duty have processes and
methodology in place so as to carry out investigations to satisfy
himself/herself that the company is solvent at all times.
4.2. The Appointed Actuary while carrying out the valuation of
liabilities for the purpose of schedule II-A of Insurance Regulatory
and Development Authority (Assets, Liabilities and Solvency
Margin of Insurers), Regulations, 2000 must ensure consistency
with the methodology prescribed and valuation carried out in
respect of the assets.
4.3. The Appointed Actuary must advise the company keeping in
view the provisions contained under Section 49 of the Act as to
how much of any surplus be distributed to policyholders or
transferred to shareholders and recommend the allocation thereof.
4.4 The Appointed Actuary must take all reasonable steps to ensure
that the companys constitution or authorised procedures are or will
be such that it will not make or undertake to make a specific
allocation of surplus (whether to policyholders, shareholders or
both) before the Board of Directors have obtained from the
Appointed Actuary and duly considered a written report containing
the Appointed Actuarys observations and recommendations on the
subject.
4.5 The Appointed Actuary must have regarded to all aspects likely
to affect the financial condition of the company, in particular the
following;
i. The premium rates on which the company has written
existing business and intends writing new business
ii. The nature of the contracts in force and currently being
sold with particular reference to all options and guarantees
iii. The existing investments and continuing investment
policy including the use of derivative instruments.
iv. The marketing plan, in particular the expected volumes
and costs of sales
v. The current and likely future level of expenses vi. the
extent of the company's free assets
vii. The reinsurance and underwriting arrangements
21 | P a g e

viii. The company's policy in regard to the nature and timing

of allocations of surplus to policyholders and/or shareholders
ix. The company's current and likely future taxation position
x. the current and likely future level of policy persistency
rates,
xi. The robustness of the financials in the face of volatile
market conditions, and
xii. The current and likely future mortality and morbidity
experience.
xiii. For linked business the Appointed Actuary shall have
regard to the pricing policy for segregated linked funds.
4.6 The Appointed Actuary must have the above information made
available to him/her and he/she must make sure that the
company understands the necessity of this information and
makes suitable arrangements to ensure that the information is
made available.
5. Premium rates and policy conditions for new products and
existing products on sale
5.1. The Appointed Actuary must be satisfied that premium rates
for new business are appropriate, that is to say sufficient in due
course to enable the company to meet its liabilities. If future new
business is being written on inadequate terms, it will require
support from the free assets in the shareholders fund, the Appointed
Actuary should consider the company's ability to continue to write
new business in the context of how much capital is required and
should inform the Board of Directors accordingly.
5.2. Whether the premium rates are appropriate is a probability
statement and hence the Appointed Actuary must exercise
judgement. This judgement needs to be based on the use of sound
techniques and the Appointed Actuary must specifically consider;
a) the impact of taxation
b) the adequacy of the provision for expenses
c) the existence of any options, including guaranteed
surrender values, and the risk that financial conditions could

22 | P a g e

be such that a policyholder could gain by surrender and reentry.

5.3. If the contract is likely to give rise to significant new business
strain then the Appointed Actuary must be satisfied that the
company can set up the necessary reserves. If need be, he/she
should indicate limits on the volume of sales that may prudently be
accepted and/or how much capital is Page 5 of 8 required and gain
reassurance from the Board of Directors that the required level of
capital will be available and not earmarked for other purposes. For
this purpose the Appointed Actuary will take into account the
shareholders assets, however, it cannot automatically be assumed
that they are equivalent to free reserves held as part of the
policyholders fund because they can be used for other than life
insurance business.
5.4 For linked business, including unitised with profit business the
Appointed Actuary must be satisfied that all discretionary elements
of unit pricing and fund charges are applied consistently with
policyholders reasonable expectations. In addition, the Appointed
Actuary must be satisfied that the procedures for determining
(a) The prices at which units are allocated to or de-allocated
from policies;
(b) The prices at which units are created or cancelled; and
(c) Compensation where errors of a material size in unit
pricing or in the allocation or de-allocation of units to
policies have occurred: are equitable to any policyholders
affected either directly or indirectly. For these purposes the
Appointed Actuary must have regard, inter alia, to the tax
position of the business and to the expected future growth or
decline of the particular fund, if any
6. Capital Requirements
6.1 One of the important factors that will affect the financial
position of a life assurance company is its marketing plan
and the projected volume of new business. The Appointed
Actuary should form an assessment as to whether the
projected volumes are realistic and advise the Board of
23 | P a g e

Directors as to the capital requirements associated with

writing the required volume of business.
6.2 The Appointed Actuary should be satisfied that, if new
business strain is likely to be a problem, the company will be
able to meet the necessary reserves and solvency margin
requirements from capital within the shareholders funds.
6.3 The Appointed Actuary should as far as possible assess
the capital requirements by using a cash flow approach.
7. Insolvency
7.1 Where an Appointed Actuary has to use judgement, this can be
based in some circumstances on his/her estimates of the most
probable outcome. If, however, the solvency of the company is
involved, then the Appointed Actuary must apply much more
rigorous standards. The Appointed Actuary shall also ensure that
the ratio of the available solvency margin to the required solvency
margin is reasonable taking into consideration the risk profile of the
assets and liabilities.
7.2 Insolvency - or intervention on the part of the IRDA - can arise
either from factors within the control of a company or from factors
which are outside its control. Where the factors are within the
control of the company, the Appointed Actuary must advise it of the
limits within which it must act and why. Where the factors are
outside the company's control, the Appointed Actuary must take
whatever action he/she considers necessary, including that of
communicating to IRDA after due deliberation with the Board of
Directors.
Guidance to Actuaries who are Directors and Employees of a Life
Insurance Company
1. An actuary should make suitable enquiries and satisfy himself or
herself about the affairs of a company before and after joining its
board, as the public and the other directors will assume that he/she
is satisfied with the way the company is being run;
2. Where the Appointed Actuary is also a member of the Board of
Directors or the senior management, he/she needs to take all
reasonable steps to ensure that other members of the Board of
24 | P a g e

Directors or other senior managers know the capacity in which

he/she is expressing any views.
3. Any other actuary who is on the Board of Directors owes a
special responsibility to the Appointed Actuary and should take
care to respect the status of the Appointed Actuary.
4. The requirement of paragraph (3) above also applies to any
other actuary holding a managerial or other position of authority in
the company.
5. As regards guidance to actuaries - external to a particular
company - who are asked either by the company or someone with a
legitimate interest in it to comment on either a valuation carried out
by the Appointed Actuary or a report he/she has made to the
company, the guidance for such actuaries is that, although there is
room for differences of opinion with regard to actuarial advice and
judgement, they should always take care to respect the status of the
Appointed Actuary. This does not though stop them from making
properly reasoned comments on the work of the Appointed Actuary,
if need be.
Guidance to Independent Actuaries
1. From time to time, an actuary may be called upon to act in an
independent capacity (for example, to function as an independent
actuary in accordance with Section 35(3)(d) of the Act).
2. Such an actuary should exercise an independent judgement in
the matters he/she has been asked to work upon. He/she should
discuss the matters, where appropriate, with the Appointed Actuary,
bearing in mind that there is always a room for differences of
opinion with regard to actuarial matters and judgement.
3. Subject to paragraph B (5), the independent actuary should
provide advice which in his/her opinion is appropriate.

25 | P a g e

CHAPTER 5
MARKETING STRATEGIES IN LIFE INSURANCE BUSINESS
Concept of Marketing
There are many definitions of marketing. The better definitions are
focused upon customer orientation and satisfaction of customer needs: According to Philip Kotler - Marketing is the social process by
which individuals and groups obtain what they need and want
through creating and exchanging products and value with others.
According to P.F Drucker - Marketing is not only much broader
than selling, it is not a specialized activity at all It encompasses the
entire business. It is the whole business seen from the point of view
of the final result, that is, from the customer's point of view.
Concern and responsibility for marketing must therefore permeate
all areas of the enterprise.
The Sales Concept of Marketing
By the early 1930's however, mass production had become commonplace,
competition had increased, and there was little unfulfilled demand.
Around this time, firms began to practice the sales concept (or selling
concept), under which companies not only would produce the products,
but also would try to convince customers to buy them through advertising
and personal selling. Before producing a product, the key questions
were.3
The sales concept paid little attention to whether the product actually was
needed; the goal simply was to beat the competition to the sale with little
regard to customer satisfaction. Marketing was a function that was
performed after the product was developed and produced, and many
people came to associate marketing with hard selling. Even today, many
people use the word "marketing" when they really mean sales.

26 | P a g e

Modern Concept of Marketing

Old concept
New concept

Product /service

Sales

Identify customers needs

Product/Service

Sale
Profit maximization through
sales

Profit through customer

satisfaction

Customer welfare

27 | P a g e

4Ps Of Marketing

Product
planning

Physical
distributio
n

Custom
er

Pricing
policies

Promotion
policies

Figure1. Represents 4 Ps
4 Ps:
Product planning.
Pricing policies.
Physical distribution.
Promotion policies

28 | P a g e

MARKETING MIX FOR INSURANCE COMPANIES

The marketing mix is the combination of marketing activities that an
organization engages in so as to best meet the needs of its targeted
market. The Insurance business deals in selling services and therefore due
weight age in the formation of marketing mix for the Insurance business
is needed. The marketing mix includes sub-mixes of the 7 Ps of
marketing i.e. the product, its price, place, promotion, people, process &
physical attraction. The above mentioned 7 Ps can be used for marketing
of Insurance products, in the following manner:
1. PRODUCT
A product means what we produce. If we produce goods, it means
tangible product and when we produce or generate services, it
means intangible service product. A product is both what a seller
has to sell and a buyer has to buy. Thus, an Insurance company
sells services and therefore services are their product. In India, the
Life Insurance Corporation of India (LIC) and the General
Insurance Corporation (GIC) are the two leading companies
offering insurance services to the users. Apart from offering life
insurance policies, they also offer underwriting and consulting
services. When a person or an organization buys an Insurance
policy from the insurance company, he not only buys a policy, but
along with it the assistance and advice of the agent, the prestige of
the insurance company and the facilities of claims and
compensation. It is natural that the users expect a reasonable return
for their investment and the insurance companies want to maximize
their profitability. Hence, while deciding the product portfolio or
the product-mix, the services or the schemes should be
motivational. The Group Insurance scheme is required to be
promoted, the Crop Insurance is required to be expanded and the
new schemes and policies for the villagers or the rural population
are to be included. The Life Insurance Corporation has intensified
efforts to promote urban savings, but as far as rural savings are
concerned, it is not that impressive. The introduction of Rural
Career Agents Scheme has been found instrumental in inducing the
29 | P a g e

rural prospects but the process is at infant stage and requires more
professional excellence. The policy makers are required to activate
the efforts. It would be prudent that the LIC is allowed to pursue a
policy of direct investment for rural development. Investment in
Government securities should be stopped and the investment
should be channelized in private sector for maximizing profits. In
short, the formulation of product-mix should be in the face of
innovative product strategy. While initiating the innovative process
it is necessary to take into consideration the strategies adopted by
private and foreign insurance companies.
2. PRICING
In the insurance business the pricing decisions are concerned with:
The premium charged against the policies,
Interest charged for defaulting the payment of premium and credit
facility, and
Commission charged for underwriting and consultancy activities.
With a view of influencing the target market or prospects the formulation
of pricing strategy becomes significant. In a developing country like India
where the disposable income in the hands of prospects is low, the pricing
decision also governs the transformation of potential policyholders into
actual policyholders. The strategies may be high or low pricing keeping in
view the level or standard of customers or the policyholders. The pricing
in insurance is in the form of premium rates. The three main factors used
for determining the premium rates under a life insurance plan are
mortality, expense and interest. The premium rates are revised if there are
any significant changes in any of these factors.
Mortality(deaths in a particular area):
When deciding upon the pricing strategy the average rate of mortality
is one of the main considerations. In a country like South Africa the
threat to life is very important as it is played by host of diseases.
Expenses:
The cost of processing, commission to agents, reinsurance companies
as well as registration are all incorporated into the cost of instalments
and premium sum and forms the integral part of the pricing strategy.
Interest:
30 | P a g e

The rate of interest is one of the major factors which determines

peoples willingness to invest in insurance. People would not be
willing to put their funds to invest in insurance business if the interest
rates provided by the banks or other financial instruments are much
greater than the perceived returns from the insurance premiums.

3. PROMOTION
The insurance services depend on effective promotional measures.
In a country like India, the rate of illiteracy is very high and the
rural economy has dominance in the national economy. It is
essential to have both personal and impersonal promotion
strategies. In promoting insurance business, the agents and the rural
career agents play an important role. Due attention should be given
in selecting the promotional tools for agents and rural career agents
and even for the branch managers and front line staff. They also
have to be given proper training in order to create impulse buying.
Advertising and Publicity, organization of conferences and
seminars,
incentive
to
policyholders
are
impersonal
communication. Arranging Kittens, exhibitions, participation in
fairs and festivals, rural wall paintings and publicity drive through
the mobile publicity van units would be effective in creating the
impulse buying and the rural prospects would be easily transformed
into actual policyholders
4. PHYSICAL DISTRIBUTION
Distribution is a key determinant of success for all insurance
companies. Today, the nationalized insurers have a large reach and
presence in India. Building a distribution network is very expensive
and time consuming. If the insurers are willing to take advantage of
Indias large population and reach a profitable mass of customers,
then new distribution avenues and alliances will be necessary.
Initially insurance was looked upon as a complex product with a
high advice and service component. Buyers prefer a face-to-face
interaction and they place a high premium on brand names and
reliability. As the awareness increases, the product becomes simpler
and they become off-the-shelf commodity products. Today, various
31 | P a g e

intermediaries, not necessarily insurance companies, are selling

insurance. For example, in UK, retailer like Marks & Spencer sells
insurance products. The financial services industries have
successfully used remote distribution channels such as telephone or
internet so as to reach more customers, avoid intermediaries, bring
down overheads and increase profitability. A good example is UK
insurer Direct Line. It relied on telephone sales and low pricing.
Today, it is one of the largest motor insurance operators.
Technology will not replace a distribution network though it will
offer advantages like better customer service. Finance companies
and banks can emerge as an attractive distribution channel for
insurance in India. In Netherlands, financial services firms provide
an entire range of products including bank accounts, motor, home
and life insurance and pensions. In France, half of the life insurance
sales are made through banks. In India also, banks hope to
maximize expensive existing networks by selling a range of
products. It is anticipated that rather than formal ownership
arrangements, a loose network of alliance between insurers and
banks will emerge, popularly known as banc assurance. Another
innovative distribution channel that could be used is the nonfinancial organizations. For an example, insurance for consumer
items like fridge and TV can be offered at the point of sale. This
increases the likelihood of insurance sales. Alliances with
manufacturers or retailers of consumer goods will be possible and
insurance can be one of the various incentives offered.

32 | P a g e

CHAPTER 6
FDI in Insurance & Market share
Life Insurance is the fastest growing sector in India since 2000 as
Government allowed Private players and FDI up to 26% and recently
Cabinet approved a proposal to increase it to 49%. Life Insurance in India
was nationalized by incorporating Life Insurance Corporation (LIC) in
1956. All private life insurance companies at that time were taken over by
LIC.
In 1993, the Government of India appointed RN Malhotra Committee to
lay down a road map for privatization of the life insurance sector.
While the committee submitted its report in 1994, it took another six
years before the enabling legislation was passed in the year 2000,
legislation amending the Insurance Act of 1938 and legislating
the Insurance Regulatory and Development Authority Act of 2000. The
same year the newly appointed insurance regulator - Insurance Regulatory
and Development Authority IRDAstarted issuing licenses to private life
insurers.
Foreign Direct Investment (FDI) Policy in Insurance Sector
s per the current (March 2006) FDI norms, foreign participation in an
Indian insurance company is restricted to 26.0% of its equity / ordinary
share capital. The Insurance Regulator has stipulated that foreign
investment in Indian Insurance companies be limited to 26% of total
equity issued (FDI limit) with the balance being funded by Indian
promoter entities. The limit to foreign investment includes both direct and
indirect investment and has been a cause of significant lobbying by
foreign insurance companies for a change in regulations to increase the
FDI limit to 49% of equity issued.The Indian government has supported
an increase in the FDI limit, which requires a change in the Insurance Act.
The Union Budget for fiscal 2005 had recommended that the ceiling on
foreign holding be increased to 49.0%.

33 | P a g e

A change in the Insurance Act requires a passage of the bill in both houses
of Parliament. The Indian government has tabled the bill in the Upper
House of Parliament in August 2010.
Initial Public Offer (IPO) rules for Indian Life Insurance Companies
A key piece of legislation impacting on the Life Insurance industries
capital raising abilities is the lock-n period of 10 years for investment to
be limited to promoter group equity investments. Under the Insurance
Guidelines, Indian Life Insurance companies can opt for a public issue of
equity through an Initial Public Offer (IPO) after 10 years of operations.
In October 2010, the securities market regulator, Securities and Exchange
Board of India (SEBI), issued disclosure norms for Indian Life Insurance
Companies seeking to make an initial public offer for sale of equity shares
to the public

Birla Sun Life Insurance Company: Birla Sun Life Insurance Company is a 74:26 joint venture
between Birla group and Sun Life Financial. It is a private
sector company. The company was registered on 31/1/2001.
The market share for FY 2012-13 was 1.72%.
HDFC Standard: HDFC standard is a 74:26 joint venture between HDFC and
Standard Life. It is a private sector company. The company
was registered on 23/10/2000. The market share for FY
2012-13 was 1.66%.
ICICI Prudential Life Insurance: ICICI Prudential Life is a 74:26 joint venture between ICICI
and Prudential. It is a private sector company. The company
was registered on 24/11/2000. The market share for FY
2012-13 was 6.91%.
Life Insurance Corporation of India (LIC): Life Insurance Corporation of India is a 100% government
held Public Sector Company. Being the first to be established
34 | P a g e

LIC is the forerunner in the Life Insurance sector. The

market share for FY 2012-13 was 76.07%.

Kotak Mahindra OLD Mutual:

Kotak Mahindra OLD Mutual is a 74:26 joint venture
between Kotak Mahindra bank and Old Mutual. It is a
private sector company. The company was registered on
10/1/2001. The market share for FY 2012-13 was 0.71%.
Max New York Life: Max New York Life is a 74:26 joint venture between Max
Life Insurance & New York Life Insurance. It is a private
sector company. The company was registered on 6/8/2001.
The market share for FY 2012-13 was 1.28%.
Aviva Life Insurance India: Aviva Life insurance is a 74:26 joint venture between Aviva
and Dabur. It is a private sector company. The company was
registered on 14/5/2002. The market share for FY 2012-13
was 1.08%.
ING Vysya Life insurance: ING Vysya Life Insurance is joint venture between
Exide(50%), Gujarat Cements (14.87%), Enam (9.13%) and
ING (26 %). It is a private sector company. The company
was registered on 2/8/2001. The market share for FY 201213 is 0.54%.
PNB Met Life India: Met Life India is a 74:26 joint venture between 74:26 JV
between J &K Bank, PNB Bank and MetLife M. Pallonji &
Company. It is a private sector company. The company was
registered on 6/8/2001. The market share for FY 2012-13
was 0.37%.
Bajaj Allianz Life Insurance Co.: 35 | P a g e

Bajaj Allianz Life Insurance Company is a 74: 26 Joint

venture between Bajaj Auto limited and Allianz AIG. The
company was registered on 3/8/2001. The market share for
FY 2012-13 was 4.75%.
SBI Life Insurance Company Ltd: SBI Life Insurance Company is a 74: 26 Joint venture
between SBI and Cardiff S.A. The company was registered
on 31/3/2001.It is a private sector company. The market
share for FY 2012-13 was 2.98%.
The TATA AIG Group: TATA AIG group is a 74:26 JV between Tata Group and AIG.
It belongs to the private sector. The company was registered
on 12/2/2001. The market share for FY 2012-13 was 1.46%.
Sahara India Life Insurance Company Ltd.: First Wholly Indian Owned Private Life Insurance Company.
The Company commenced operations from 30th October
2004. The market share for FY 2012-13 was 0.03 %.
Shriram life insurance company Ltd: Shriram Life is a recent entrant into the life insurance sector
It is a 74:26 joint venture between the Shriram group through
its Shriram Financial Holdings and Sanlam Life Insurance
Limited, South Africa. The company expects to start
operations soon.
Reliance Life Insurance Co. :Reliance Life has acquired AMP SANMAR in 2001.Reliance
Life is a subsidiary of Reliance Capital. From 2011 Nippon
Life Insurance has taken joint venture, it has 74:26 holding.
SAHARA Life :Sahara life is a private player in insurance market in India. It
is purely Indian company operating in India without any
foreign collaboration.
36 | P a g e

Market share of insurance company

Name of the company
Life Insurance Corporation of India

Market share(%)
76.07 %

ICICI Prudential Life Insurance Co

6.91 %

Allianz Bajaj Life Insurance Co

4.75%

SBI Life Insurance Co

2.98%

Birla Sun Life Insurance Co

1.72 %

HDFC Standard Life Insurance Co

1.66 %

TATA- AIG Life Insurance

Company

1.46 %

Max New York Life Insurance Co.

1.28 %

Aviva Life Insurance

1.08 %

Om Kotak Mahindra Life Insurance

0.71 %

ING Vysya Life Insurance Co.

0.54 %

PNB MetLife Insurance Co.

0.37 %

Reliance Life Insurance Co.

0.46%

37 | P a g e

SAHARA LIFE

0.03%
*Source: - www. Life insurance .com

Market Share
ICICI Prudential Life Insurance Co

Life Insurance Corporation of India

Allianz Bajaj Life Insurance Co

SBI Life Insurance Co

Birla Sun Life Insurance Co

HDFC Standard Life Insurance Co

TATA- AIG Life Insurance Company

Max New York Life Insurance Co.

Aviva Life Insurance

Om Kotak Mahindra Life Insurance

ING Vysya Life Insurance Co.

PNB MetLife Insurance Co.

Reliance Life Insurance Co.

SAHARA LIFE

38 | P a g e

CHAPTER 7
Data Analysis & Interpretation
1) DATA GIVES INFORMATION OF THE INSURED
RESPONDENTS OF INSURER COMPANY
SECTOR

NO. OF
RESPONDENTS

SHARE

PUBLIC SECTOR
LIFE INSURER

14

70

PRIVATE SECTOR
LIFE INSURER

30

(%)

Sector

Public sector
Private sector

39 | P a g e

Interpretation:In this study 70% of respondents like take insurance from public
life insurer & only 30% of respondents take insurer from private life
insurer. This shows respondents are more prone to take life insurance
from public life insurer. It indicates that public life insurer has better
goodwill than private life insurer.
2) DATA GIVES INFORMATION OF THE INSURED
RESPONDENTS ABOUT PREFRENCE OF INSURER
PREFRENCE

NO. OF
RESPONDENTS

SHARE

REPUTATION

40

PRICE OF PREMIUM

20

BENEFIT

15

FLEXIBLE PREMIUM
PAYMENT

25

(%)

40 | P a g e

Preference

Reputation
Price of Premium
Benefits
Flexible Premium Payment

Interpretation:This study shows that respondents prefer to take insurance depends

on individuals preference. Respondents prefer reputation than any other
factors. Reputation has 40% share & Flexible premium payment has 25%
share. These are the two measure factors that are taken into consideration.

3) DATA GIVES INFORMATION OF THE INSURED

RESPONDENTS ABOUT PREMIUM
PREMIUM

NO. OF
RESPONDENTS

SHARE

YES

11

55

NO

45

(%)

41 | P a g e

Premium

Yes
No

Interpretation:This study shows that respondents are more concern with premium
of policy. 55% of respondents are satisfied with the payment of insurance
premium & 45% of respondents are not satisfied with the payment of
insurance premium.

4) DATA GIVES INFORMATION OF THE INSURED

RESPONDENTS ABOUT PERIOD SELECTED
PREMIUM PERIOD

NO. OF
RESPONDENTS

SHARE

0-10 YEARS

15

10-15 YEARS

20

15-20 YEARS

25

20 YEARS OR MORE

40

(%)

42 | P a g e

Premium Payment Period

0-10 Years
10-15 Years
15-20 Years
20 Years Or More

Interpretation:This study shows that respondents while taking life insurance take
into consideration payment premium period. Respondents prefer 20 years
or more for taking life insurance & 0-10 years are less preferred. 20 years
or more,15-20 years,10-15 years & 0-10 years has 40%,25%,20% & 15%
respectively.

5) DATA GIVES INFORMATION OF THE INSURED

RESPONDENTS ABOUT MODE OF PREMIUM
MODE OF PREMIUM

NO. OF
RESPONDENTS

SHARE

SINGLE PREMIUM

15

REGULAR
PREMIUM

17

85

(%)

43 | P a g e

Mode Of Premium

Single Premium
Regular Premium

Interpretation:This study shows that respondents think more about the mode of
premium. Respondents are majorly pays the premium on regular basis
that can be monthly ,quarterly ,half-yearly ,yearly basis.85% of
respondents pays premium on regular basis on the other hand only 15%
respondents pays single premium on their life insurance.
6) DATA GIVES INFORMATION OF THE INSURED
RESPONDENTS
ABOUT
BEST
OPTION
FOR
INVESTMENT
INVESTMENT
OPTION

NO. OF
RESPONDENTS

SHARE

POST OFFICE

15

LIFE INSURANCE

20

MUTUAL FUND

15

SHARE MARKET

20

BANK DEPOSITS

30

(%)

44 | P a g e

Investment Option

Post Office
Life Insurance
Mutual Fund
Share Market
Bank Deposits

Interpretation:This study shows that respondents investment option for investing

there valuable resources. Most of the respondents are risk averse.30%
respondents invests there funds in bank deposit because they have less
risk appetite & they are older. Which gives them fixed & regular return
.Respondents invest there fund in share markets are 20% because they
have high risk appetite & they are younger. Respondents invest in mutual
fund has 15% share they are moderate investor.
7) DATA GIVES INFORMATION OF THE INSURED
RESPONDENTS ABOUT PROMOTIONAL MEDIA OF
INSURER
PROMOTIONAL
MEDIA
TV ADVERTISEMENT
HOARDINGS
PAPER
ADVERTISEMENT
BANNERS
AGENTS

NO. OF
RESPONDENTS
6
2
3

SHARE
(%)
30
10
15

1
8

5
40

45 | P a g e

Promotional Media

TV Advertisement
Hoardings
Paper Advertisement
Banners
Agents

Interpretation:This study shows that respondent while taking insurance consider the
promotional strategies of companies. Respondents prefer the olden ways
like agents for taking insurance because it gives better details of insurance
product & helps in further investment related education. Agents has 40%
share in this study. TV advertisement has 30% share because easy access
to TVs. Nowadays all the families have TV sets so it easy to attract
potential customers. Hoardings , Banners ,Paper advertisement has little
share 10% ,5% , 15% respectively.it shows customer are not so much rely
on those type of marketing strategies.
8) DATA GIVES INFORMATION OF THE INSURED
RESPONDENTS ABOUT SUGGETION
SUGGETION

NO. OF
RESPONDENTS

SHARE

YES

45

NO

11

55

(%)

46 | P a g e

Suggetion

Yes
No

Interpretation:This study shows that respondents suggests about insurance product and
the best company which gives you better services.45% of respondents
suggests about product & service offered by insurer, they suggests details
to their friends , families .55% of respondents do not suggest to take
insurance from any specific company

47 | P a g e

RECOMMENDATIONS

There is huge potential market for LIFE INSURANCE companies in

India as out of 110 crore population only 8 crore people are insured. The
insurance companies should educate people about insurance, its
importance, different policies, and benefits of policies.
The people opt for policy by taking into consideration price of premium
of policy, benefits of policy and least importance is given to brand name.
So the life insurance companies should look over the price of premium,
benefits of policy and even flexible payment options from the point of
untapped potential market in India.
The price of premium of a policy must be within the budget of common
man and life insurance companies should provide flexible payment
options. By doing so, the private insurance companies can surely capture
the untapped market along with creating brand name.
LIC of India & Reliance life insurance, it has huge past experience around
the world. But coming to Indian perspective its positioning is not properly
done in the customers mind. The advertisement of LIC of India &
Reliance life insurance in TV should contain briefly relevant message
about its policy and benefits of a policy. It should formulate strategies for
attracting customers though good promotional activities and informative
ads, so that common man can have an idea of what Reliance life
insurance is offering in a policy.
Though people generally to do the savings by various means, like Post
Office, Fixed Deposit, Mutual Fund, Gold, Real Estate, and Share Market
etc.

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FACTS/FINDINGS
1.As the people think that insurance is a tool to protect their family & a
tax saving device. They are aware of the fact & realizing its, importance.
The companies should try to expand & build up its infrastructure because
there is a large potential for insurance in India.
2.Company should come up with more branches in with the objective and
goals to meet the demands & expectations of the public. Because the
entrance of private players will increase the competition and it would be a
tough task to secure a good position in market.
3.Since , LIC of India & Reliance Life Insurance is leading with several
companies policies it should be easy for them to penetrate into the market
and secure a good position if they pay greater attention to the service part
provided to their customer and thereby forming a long and trusted
relationship.
4.As seen from the survey that at present 70% of the customer are having
insurance policy out of which 87.5% of the customer are planning for new
investments. So it can be a good potential for the company and they
should make an attempt to trap these customers.
5. 43% of the customer is even ready to go for insurance if a service
provider away from their home is providing it. But intend they should
provide good products and services. The company should try to convince
these customers and get them in its favor.

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CONCLUSIONS
From the project analysis and interpretation the conclusions are:
1)
Most untapped insurance market in India contains mostly middle
class and lower class people.
2)
The customers give preference more to Brand name and flexible
payment. Premium of policy and benefits of the policy options are
given less importance.
3)
Even though the premium price is not within the customer budget,
if the benefits offered by policy are good customers is ready to take
the policy.
4)
The customers want the premium price to be within the budget,
with good benefits.
5)
The private insurance companies are unable to tap the untapped
insurance market certain strategies should be formulated to grab the
market.
Most customers feel that setting up of stalls at appropriate locations and
providing information regarding various policies and benefits offered by
the insurance company and create awareness about the insurance
company.

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CHAPTER 9
QUESTIONNAIRE
A study of Life Insurance plan as a part of financial planning
Please fill the following details.
Name:
Age:
Gender:
Qualification:
Designation:
Phone No.:
Email ID:
1. In which company you have Life Insurance Policy?
a) Public Life Insurance

b) Private Life Insurance

2. Among various insurance companies why did you chose the above
mentioned company?
a) Due to reputation of the company

b) Due to Price of premium of policy

c) Due to benefit of the policy

d) Flexible premium payment options

3. Is the premium within your budget?

a) Yes

b) No

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4. Period of plans selected?

a) 0-10 years [

b) 10-15 years [

c) 15-20 years [

d) 20 or more [

5. Mode of premium?
a) Single premium [
b) Regular premium [

]
]

6. What is the best option of investment?

a) Post Office schemes

b) Life Insurance

c) Mutual Fund

d) Share Market

7. Which promotional media do you think is the best one to make

people educate about an insurance policy
a) TV advertisement

b) Hoardings

c) Paper advertisement

d) Banners

e) Agents

8. Did you suggest your colleagues, relatives or any of your friends

about which is the best company to opt for an insurance policy
a) Yes

b) No

]
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CHAPTER 10
BIBLIOGRAPHY

1.

BOOKS/MAGAZINES REFFERED:
STUDY GUIDE- PRINCILES & PRACTICES OF LIFE /
GENERALINSURANCE, by AIMA.
Books published by INSURANCE INSTITUTE OF INDIA
LIFE-INSURANCE, by Mc GILL
INSURANCEWATCH.
MONEYOUTLOOK.

2.

WEBSITES REFFERED:
WWW.RELIANCELIFE.COM
WWW.CIFAINSURANCE.COM
WWW.MONEYOUTLOOK.COM
WWW.INSURANCE.IND.COM
www.licindia.in

3.

REPORTS/ARTICLES REFFERED:
REPORT: ISSUES & CHALLENGES
INSURANCE INDUSTRY. Dec2009.

FACING

THE

BRIEF PROFILE OF LIC, INDIADec 2012.

REPORT: COPING WITH COMPETITIONJan2012

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