NAME REGISTRATION NO.

REGISTRATION PROGRAMME ADDRESS FOR CORRESPONDENCE

PRATIBHA 420910097 PGDM ( FINANCE ) H .NO. 848 , D.D.A. FLATS G.T.B, ENCLAVE , DELHI-110093 CONSUMER AWARENES & PERCEPTION ABOUT LIFE INSURANCE
MR. DINESH KALRA ABM (SALES) (EMPLOYEE CODE-162621) F-19, SECOND FLOOR, UNITED LIFE INDIA BUILDING, DELHI-110001

TITLE OF THE PROJECT

NAME OF THE PROJECT GUIDE DESIGNATION ADDRESS

WORKING TITLE ON

CONSUMER AWARENES & PERCEPTION ABOUT LIFE INSURANCE

A CASE STUDY OF

LIFE INSURANCE CORPORATION OF INDIA

SUBMITTED TO

ALL INDIA MANAGEMENT ASSOCIATION Management House 14, Institutional Area, Lodhi Road, New Delhi 110003,

CERTIFICATE

This is to certify that project entitled on Consumers Awareness and Perception about LIC. submitted by Miss. Pratibha , ( Reg. no. -420910097) has been done under my guidance and supervision in fulfillment of the requirement for the award of Post Graduate Diploma In Management( Finance ) .

The work and analysis mentioned in this project report have been undertaken by the candidate himself and necessary references have been recognized and acknowledged in the text of the report.

MR. DINESH KALRA ( ASSISANT BRANCH MANAGER ) 3

( PROJECT GUIDE) LIFE INSURANCE CORPORATION OF INDIA

ACKNOWLEDGEMENT
On the eve of admission of this project report I take this pleasure to acknowledge all those personalities who have guided and encouraged as well as cooperated and assisted in accomplishing this project. Success is an endeavor, calls for the cooperation and guidance from the seniors and the colleagues. No amount of written expression is sufficient to show my deepest sense of gratitude to them. This was aptly brought to me while undergoing my training. I would like to take opportunity, especially to express my profound gratitude and indebtedness to Mr. Kanwar Singh Development Officer (code-1478001) LIFE INSURANCE CORPORATION LTD. for his constant assistance and guidance.

I also deem it to be my privilege to acknowledge the encouragement and facilities provided to me by LIFE INSURANCE CORPORATION LTD. (Cannought Place) to make this project a fruitful one. I am thankful to Mr. Vishwa nath- LIC AGENT ( Code- 1018031C) for his exemplary

guidance, monitoring and constant encouragement throughout the project. I am also thankful to all those people of LIFE INSURANCE CORPORATION LTD .Whom I came across for their extended support during the project period. I remain deeply appreciative of persistent cooperation of my project guide MR. DINESH KALRA for his support throughout the project. PRATIBHA

PURPOSE

Most of researchers only observe whether an individual has made a new life insurance decision (i.e., purchased a new policy, or added to/changed an existing policy) but do not observe what the actual policy choice is nor the choice set from which the new policy is selected.

We empirically implement the model using the limited life insurance holding information from the Health and Retirement Study (HRS) data. An important feature of our study is the incorporation of serially correlated unobservable state variables. In our empirical analysis, we show sample evidence that such serially correlated unobservable state variables are important for explaining some key features in the data. Although some aspects of the application process (such as underwriting and insurable interest provisions) make it difficult, life

insurance policies have been used in cases of exploitation and fraud. In the case of life insurance, there is a motivation to purchase a life insurance policy, particularly if the face value is substantial, and then kill the insured. Usually, the larger the claim, and/or the more serious the incident, the larger and more intense will be the number of investigative lawyers, consisting in police and insurer investigation, eventually also loss adjusters hired by the insurers to work independently. Basically my purpose is to understand the process of holding life insurance policy & making able to all be a good consumer of LIC.

AIM & OBJECTIVES AIM

The most successful and admired life insurance company , which means that we are the most trusted company, the easiest to deal with , offer the best value for money, and set the standards in the industry . THE MOST OBVIOUS CHOICE FOR ALL

OBJECTIVES
To analyze the product details of LIC INSURANCE CORPORATION Of INDIA .

 To find out the factors that influence customers to purchase insurance policies and give suggestions for further improvement. To find out the marketing problems of LIC Agents. To make suggestions for the Improvement of LIC Agents. To find out the perception and awareness of the consumer about LIC products & schemes.

KEY QUESTIONS / RESEARCH QUESTIONS

Why Do Life Insurance Policyholders Lapse?

Why the intensity of interest varies over time?

What consumers perceives about LIC? Why the investigators found abuses everywhere they looked?
7

Investing in LIC is profitable or not profitable? It is secure, but, Is it profitable compare to other investment options?

To Study the Market Share of LIC.

To find out the comparative Performance of LIC with Private Insurance Companies .

HYPOTHESIS

Hypothesis is considered as principle instrument in research. Hypothesis

is considered as mere assumption that needs to provided or disproved .

The study or project regarding to hypothesis that :

Consumers should be aware about the latest plans of the

policies either by LIC Agents or directly from the website of the concerned department.

METHODOLOGY
To conduct the market research first of all it is necessary to create a research design. A research design is basically a blue print of how a research is to be conducted, it may include; 1. Choosing the approach 2. Determining the types of data needed. 3. Locating the source of data. 4. Choosing a method of data RESEARCH DESIGN Basically there are 3 types of approaches used during the any research: 1. Exploratory 2. Descriptive 3. Experimental.

During this research Descriptive and Exploratory approach is taken into consideration because of the availability of relevant information to describe the relationships between the marketing problem and the available information. In the Descriptive research a comprehensive review of relevant literature Including a computer assisted search will be undertaken in order to develop a understanding of previous work in the field of Insurance. In the stage of Exploratory design the deeply survey has been made and after of survey the conclusions and data interpretation has been done for getting exact idea to complete objective.

TABLE OF CONTENTS

1 2 3 4 5

INTRODUCTION OF INDIAN INSURANCE INDUSTRY PROFILE OF LIC RESEARCH DESIGN COMPETETIVE ANALYSIS CONSUMERS AWARENESS & PERCEPTION ABOUT LIC ANALYSIS & EVALUATION OF CASE STUDY

10

7 8 9 10

FUTURE LINE OF RESEARCH & FURTHER STUDIES CONCLUSION REFERENCES ANNEXURE

CHAPTER I

INDIAN INSURANCE
INDUSTRY
11

 AN OVERVIEW

THE INSURANCE INDUSTRY IN INDIA

AN OVERVIEW

With the largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs1560.41 billion (for the financial year 2006 2007). Together with banking services, it adds about 7% to the countrys Gross Domestic Product (GDP). The gross premium collection is nearly 2% of GDP and funds available with LIC for investments are 8% of the GDP. Even so nearly 65% of the Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. A large part of our population is also

12

subject to weak social security and pension systems with hardly any old age income security. This in itself is an indicator that growth potential for the insurance sector in India is immense. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and strengthens the risk taking ability of individuals. It is estimated that over the next ten years India would require investments of the order of one trillion US dollars. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain the economic growth of the country.

KEY MILESTONES

1912: The Indian Life Assurance Companies Act enacted as the. first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

13

1938:

Earlier legislation consolidated and amended by the Insurance Act with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers along with provident societies were taken over by the central government and nationalized. LIC was formed by an Act of Parliament. LIC Act 1956 - with a capital contribution of Rs. 5 crore from the Government of India.

With the rapid growth of the Indian Insurance industry, in particularly serving a Middle Class that is growing on both size and wealth every year, it is hardly surprisng that Indian insurance companies are growing, and playing an increasingly important role in the nation's financial services industry. This increasing market is creating considerable competition among Indian insurance companies in an industry that 20 years ago was relatively small. To date, India's Insurance Regulatory and Development Authority (IRDA), has granted registration to 12 private life insurance companies and nine general insurance companies. Counting the existing public sector insurance companies, there are currently 13 Indian insurance companies in the life side and 13 Indian insurance companies operating in general insurance.

14

General Insurance Corporation has been approved as the Indian reinsurer for underwriting only reinsurance business. Particulars of the Indian insurance companies including both life insurance companies and general insurance companies are given below:

15

16

CHAPTER II

PROFILE OF

17

LIFE INSURANCE CORPORATION

INTRODUCTION
The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization

18

servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with reorganization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families

CHAPTER III

19

RESEARCH DESIGN

RESEARCH DESIGN

INTRODUCTION

A Research Design is the framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the blue print that is followed in completing the study. The basic objective of research cannot be attained without a proper research design. It specifies the methods and procedures for acquiring the information needed to conduct the research effectively. It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods.
20

TITLE OF THE STUDY

BY GETTING INFORMATION THROUGH CONSUMERS OF THEIR AWARENESS & PERCEPTION ABOUT LATEST SCHEMES OF PRODUCTS OF LIFE INSURANCE CORPORATION

RESEARCH METHODOLOGY TYPES OF DATA COLLECTED There are two types of data used . They are primary and secondary data. Primary data is defined as the data that is collected from the original sources for a specific purpose. Secondary data is collected from indirect sources. (Source : Research Methodology, By, C.R. Kothari )

TYPES OF DATA
Two types of data: PRIMARY DATA SECONDARY DATA PRIMARY DATA: -

21

Primary data is the kind of data, which is collected by the investigator himself for the purpose of the specific study. The data such collected is original in character. The advantage of this method of collections authentic. A set of Questions was put together in the form of five questionnaires . The method of sampling was the random convenient sampling method. SECONDARY DATA: When an investigator uses the data that has been already collected by others is called secondary data. The secondary data could be collected from journals, Reports, internet and various publications.. The researcher of the report also did the same and collected secondary data from various Internet sites like google.com, yellowpages.com and many more. The researcher of the report also visited various libraries for collection of the introduction part.

CHAPTER IV

22

COMPETITIVE ANALYSIS

COMPETITIVE ANALYSIS

LIFE INSURANCE CORPORATION OF INDIA (LIC)

LIC has an excellent money back policy which provides for periodic payments of partial survival benefits as long as the policy holder is alive. 20% of the sum assured is payable after 5, 10, 15 and 20 years and the balance 40% is payable at the 20th year along with accrued bonus. (Source: www.lic.com )

23

ICICI PRUDENTIAL

ICICI Prudential is a stiff competitor for LIC. The company is a merger between ICICI Bank which is the biggest private bank in India and Prudential Plc which is a global life insurance company. (Source: www.iciciprudential.com)

BIRLA SUN LIFE

Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla Group, one of the largest business houses in India and Sun Life Financial Inc., a leading international financial services organization. The local knowledge of the Aditya Birla Group combined with the expertise of Sun Life Financial Inc., offers a formidable protection for your future. (Source: www.birlasunlife.com)

CHAPTER V

CONSUMERS AWARENES
24

AND PERCEPTION ABOUT LIC

CONSUMERS AWARENESS & PERCEPTION ABOUT LIC INTRODUCTION

LICS POLICIES FOR CONSUMERS AWARENESS

In the year 2000, the Government of India opened up the life insurance market to private players. Till then, the Indian life insurance industry had been dominated by Life Insurance Corporation of India (LIC), the only player in the insurance market. This monopoly had created such a strong brand identity and awareness for LIC that LIC became a generic word for life insurance in India. After deregulation, many domestic and international players entered the life insurance market. However, the Indian insurance industry continued to face various problems such as low penetration (only 22% of the insurable population were insured) and low premium to GDP ratio (of 1.3). Growth was also hampered by the existing customer perception that life insurance was a tax

25

saving tool. Another problem was that the entry of many players had cluttered up the market. LIC has been one of the pioneering organizations in India who introduced the leverage of Information Technology in servicing and in their business. Data pertaining to almost 10 crore policies is being held on computers in LIC. We have gone in for relevant and appropriate technology over the years. 1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950s were phased out in 1980s and replaced by Microprocessors based computers in Branch and Divisional Offices for Back Office Computerization. Standardization of Hardware and Software commenced in 1990s. Standard Computer Packages were developed and implemented for Ordinary and Salary Savings Scheme (SSS) Policies.

CONSUMERS PERCEPTION ABOUT LIC

LIC is a must now days and providing it as a service to everybody adds to its significance. Agents with the help of the portal provide all the information to the unaware residents. Everybody remembers how difficult it is to place their complaints on the desks of the officers. The response to the complaints took months and sometimes years. But now those complaints are responded in an advanced manner. Agents move towards a common destination for response.

With an agenda to enroll maximum number of people onto LIC, all agents go 26

through a similar process. The process is incomplete even if a small part of it is missing. It is important for them to arrange everything in order. The information or the missing parts should reach them in a faster way. Hence it is easy for them to move forward from the initial step to finalize the LIC. How easy it becomes to gather all information from a common point.

LIC agent portal is a source for all agents to a spontaneous flourish of the service. Service is just an entity, until it is provided in the right manner. LIC agent portal is the right way to spread the LIC service. Going through the portal anyone can understand what steps are being taken to ease of the pressure on agents. The deposition of mails speaks for itself; it is not hard to work as an agent.

CHAPTER VI ANALYSIS & EVALUATION

27

OF CASE STUDY

ANALYSIS & EVALUATION

A SURVEY ON THE LIFE INSURANCE INDUSTRY IN INDIA AGE GROUP OF SURVEYED RESPONDENTS TABLE 1:

Age group 18 - 25 years

No. of Respondents 15 10

26 - 35 years 05 36 - 49 years 03 50 - 60 years More than 60 years Total 02 35

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ANALYSIS From the table above we find that 47% of respondents fall in the age group of 18 to 15 years, 25% fall in the group of 26 to 35 years, and 17% fall in the group of 36 to 49 years. Therefore most of the respondents are relatively young (below 26 years of age ) . These individuals could be induced to purchase life insurance plans on the basis of tax saving nature and investment opportunities with high returns.

CHAPTER VII FUTURE LINE OF RESEARCH AND FURTHER STUDIES

29

FUTURE LINE OF RESEARCH & FURTHER STUDIES

The future topics for research in the organization could be setting up of an appropriate ad campaign. It is very vital to the companies success that the people of India know about LIC, its products and their special features and how insurance in general can help them in their future. The advertisements have to be emotionally appealing. They might also include a celebrity. The brand name of LIC could be used to give a push to LIC and its products. The general perception of insurance as inauspicious should be done away with and individuals and corporations accept insurance on power with other investment opportunities.

The other area of research could be in the management of funds LIC possesses and how it can maximize returns for its investors. A

30

research project could be undertaken on how to ensure that the money gets invested in the right companies and earns a medium high return on investment. Another area of research could be an analysis of the sales and marketing techniques used by LIC . A large number of changes could be introduced and this would help in saving operating costs and improving the efficiency of the firm.

CHAPTER VIII

CONCLUSION

31

CONCLUSION

Life Insurance Corporation of India (LIC) was formed in September, 1956, by an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital contribution from the Government of India. The then Finance Minister, Shri C.D. Deshmukh, while piloting the bill, outlined the objectives of LIC thus to conduct the business with the utmost economy, and a spirit of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to invest the funds for obtaining maximum yield for the' policy holders consistent with safety of the capital; to render prompt and efficient service to policy holders, thereby making insurance widely popular. Since nationalization, LIC has built up a vast network of 2,048 branches, 100 divisions and 7 zonal offices spread over the country. The Life Insurance Corporation of India also' transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, KenIndia ,Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance Corporation (International) E.C.Bahrain. The Corporation has registered a joint venture

32

company in 26th December, 2000 in Katmandu, Nepal by the name of Life Insurance Corporation (Nepal) Limited in collaboration with Vishal Group Limited, a local industrial Group. An off-shore company L.I.C. (Mauritius) Offshore Limited has also been set up in 2001 to tap the African insurance market.

CHAPTER IX

REFERENCES

33

REFERENCES INTERNET

www.lic.com www.irdaindia.com www.moneycontrol.com

MAGAZINE Insurance World The Outlook Money Secrets of Successful Insurance Sales By Mr. Jack Kinder

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OTHERS-

Employees of LIC , Cannaught Place, Branch Code (31-C) Colleagues Questionnaires

CHAPTER X

ANNEXURE
35

Page-1

QUESTIONNAIRE

1. PERSONAL DETAILS Name-.. Address Mobile-. Marital Status 1. Married Divorced DETAIL OF FAMILY MEMBERS S.no . Name Age Relation Occupation 2. Single 3.

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2..PROFFESION a. Self Employed b. Employed

If Employed Then, Name Of the Employer. Designation. Salary (p.a.) ... If Self Employed Then, Nature of the Business.. Turnover (p.a.) .. 3. What is Your Preference on Insurance Plans?

37

a. Conventional Plan c. Not Interested 4.

b. Unit Linked Plan

Are You LIC Customer? a. Yes b. No

5..

What do you Know about LIC?

6. How much you are Aware with LIC Plans & from where do you get the Information?

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39