Submitted to
Punjab Technical University Jalandhar In partial fulfillment of the Requirement for the award of degree Of Master of Business Administration (MBA) Submitted to: Ms.Nitika Sehgal Assistant Professor Submitted by: Quincy Karwal (3249) Chandni (3229) Michelle (3271) MBA II C
Session: (2011-13)
APEEJAY INSTITUTE OF MANAGEMENT
CERTIFICATE
This is to certify that the project report entitled Customer Perception towards Public and Private Life Insurance Companies submitted by Quincy Karwal, Michelle and Chandni is a bonafide piece of work conducted under my direct supervision and guidance. No part of this work has been submitted for any other degree of any other university. The data sources have been duly acknowledged. It may be considered for evaluation in partial fulfillment of the requirement for the award of degree of Master of Business Administration.
Ms. Nitika Sehgal Asst. Professor of Management Apeejay Institute of Management Jalandhar.
PREFACE
We feel delighted and honored to present our project report on Customer Perception towards Public and Private Insurance Companies the first task for us was to know about the concept on which our project is based. Then we have to set criteria, on the basis of which the above concept was valued. The factors, on the basis of which the research has been done, analyzed, evaluated and then presented.
Someone has rightly said that practical experience is far better and closer to the real world than mere theoretical exposure. The practical experience helps the students to view the real business world closely, which in turn widely influences their perceptions and arguments their understanding of the real situation.
This project requires an in depth study of Public and Private Insurance Companies. Today the awareness of insurance has been increasing day by day as it is not only the matter of better returns but also is a matter of risk coverage for various respondents.
ACKNOWLEDGEMENT
Nothing concrete can be achieved without an optimal combination of inspiration and perspiration. With all humility, we would like to thank God, the almighty, and the compassionate that bestowed us with health and encourage enough to through this crucial juncture. We express our sincere thanks, great respect, and deep sense of gratitude and obligation to our distinguished advisor Ms. Nitika Sehgal (Asst. Professor in Management), without the support and inspiration of whom we would not be able to undergo my project. The sense of gratitude through words would hardly suffice our feelings for our worthy mentor for providing intellectual stimulation and enlightening guidance through the course of present investigation. We are highly indebted for her scholarly suggestions, constructive criticism and consistent and constant encouragement to complete this project. And a sincere thanks to all the concerned teachers, faculty and those individuals who guided me throughout this work. And last, but not the least we would like to convey our regards to our parents for providing our support during our project. Needless to say errors and omission are ours. Quincy Karwal Chandni Michelle
TABLE OF CONTENTS
Certificate Preface Acknowledgements Chapter No. 1 2 3 4 5 6 7 Introduction Review of Literature Need, Scope and Objectives of the study Research Methodology Data Analysis and Interpretation Findings and Recommendations Conclusion Chapter Title i ii iii Page No. 7-40 41-43 44-45 46-49 50-59 60-61 62-63 64-65 66-69
CHAPTER-1 INTRODUCTION
ICICI Prudential Life Insurance Company Limited was incorporated on July 20, 2000. The authorized capital of the company is Rs.2300 Million and the paid up capital is Rs. 1500 Million. The Company is a joint venture between ICICI bank (74%), a premier financial power house and prudential plc (26%), a leading international financial services group headquartered in United Kingdom. The Company was granted Certificate of Registration for carrying out Life Insurance business, by the Insurance Regulatory and Development Authority on November 24, 2000. It commenced commercial operations on December 12, 2000, becoming one of the first few private sector players to enter the liberalized arena. The Company is now operational in Mumbai, New Delhi, Pune, Chennai, Kolkata, Bangalore, Chandigarh, Ahmedabad, Hyderabad, Lucknow, Nasik, Jaipur, Cochin, Meerut, Mangalore and Ludhiana. Till March 31, 2002 the Company has issued 100,000 polices translating into a Premium Income of around Rs. 1,200 Million. ICICI was established in 1955 by the World Bank, the Government of India and the Indian Industry, to promote industrial development of India by providing project and corporate finance to Indian industry. Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has financed all major sectors of the economy, covering 6,848 companies and 16,851 projects. In the fiscal year 2000-2001, ICICI had disbursed a total of Rs 319.65 billion. Today, it has diversified into retail banking and is the largest private bank in the country. ICICI is listed on the Indian Stock Exchanges and on the New York Stock Exchange (NYSE). On September 22, 1999, it became the first Indian company to be listed on the NYSE (symbol: IC and IC.D). This has been followed by the listing of ICICI Bank on NYSE (symbol: IBN) on March 28, 2000.
ICICI has now developed a whole range of activities to become a Universal Bank. Some of ICICI's spectrum of activities include:
*Commercial Banking - ICICI Bank, India's first internet bank. * Information Technology - ICICI InfoTech, transaction processing, software development * Investment Banking - ICICI Securities, one of the key players in the Indian Capital Markets
* Mutual Fund - Prudential ICICI AMC, leading private sector mutual fund player in India * Venture Capital - ICICI Venture, leading private equity investor with focus on IT and HealthCare
* Retail Services - ICICI PFS, Marketing and Distribution of Retail Asset Products * Distribution - ICICI Capital, Distribution and Servicing of Retail Liability Products Prudential plc was established in 1848 and is presently the largest life insurance company in the UK. Since then it has grown to become one of the largest providers of a wide range of savings products for the individual including life insurance, pensions, annuities, unit trusts and personal banking. It has a presence in over 15 countries, and caters to the financial needs of over 10 million customers. It manages assets of over Rupees 11, 39,600 crores approx. as of December 31, 1999. Prudential plc. has had its presence in Asia for the past 75 years catering to over 1 million customers across 11 Asian countries.
Company Name
Indian Partner
ICICI Bank
Foreign Partner
Prudential Plc
19-12-2000 Mumbai
Sector
Private
Registered Office
Head Office
Branches of company
800
Chairperson
Executive Director
Mr. N.S. Kannan Mr. K. Ram Kumar Mr. Rajiv Sabharwal Mr. Barry Stowe Mr. Adrian OConnor Mr. Keki Dadiseth Prof. Marti G. Subrahmanyam Ms. Rama Bijapurkar Mr. Vinod Kumar Dhall Mr. Sridar Iyengar
Director
Independent Director
ICICI Bank, Federal Bank, Bank of India, South Indian Bank, Lord Krishna Bank, Goa State Co-operative Bank, Jalgaon Peoples Co-operative Bank, Punjab & Maharashtra Co-operative Bank.
LIC PROFILE
The corporation has been established by as act of parliament which received the assent of the president on 18th June 1956. The act came into force on 1st July 1956 and the corporation began to function on 1st September 1956. Since that day the corporation is having the privilege of carrying on life insurance business in India. The nationalization of life insurance aims at widening the channels of public savings and is a important step towards mobilizing these savings more effectively. Nationalized insurance is designed to bring complete security of funds collected by the way of premiums and to utilize profitability such funds for nation building activities. The corporations central office is located at Mumbai there are 7 zonal offices, one each at Chennai, Delhi, Ahmedabad, Bangalore, Kolkata, Pune and Hyderabad. At present the corporation has about 100 divisional offices and over 2100 branch office in India. In addition there are branch offices outside India.
of every cottage and upon the inconceivably small, families and estates can be protected against catastrophes which would blotting book of every publman, because I am convinced for sacrifice which are otherwise smash them up forever. It is our duty to arrest the ghastly waste not merely of human happiness but of national health and strength which follows when through death of the bread winner the frail best in which the families are embraced founders and women women and children and estates are left to struggle in the dark waters of a friendless world.According to Benjamin Franklin, It is a strange that man should be careful to insure their houses, their ships, and their merchandise and yet neglect to insure their lives, surely the most important of all their families and more subject to loss.
(1757). The development of mortality tables was a landmark to the history of life insurance. For the first time in 1807 life insurance was transacted on modern lines in England.
EMERGENCE IN INDIA
In India the 1st company known as Sun Insurance Office Ltd. was set up in Calcutta in year 1710. During the early years of 19th century, a large no of life insurance companies were formed in India. Some of these companies preferred to amalgamate their business with other companies and a good number failed to function effectively. In order to stabilize and strengthen the insurance business, life insurance act 1923 was passed and later amended in 1946, 1958, 1967.Post 1947, India had a great challenge of out of the dark into an era of where many countries were happily progressing on the way of advancement. Besides the infrastructure required for developing the nations industry, young nation also had to build security at all levels among the citizens of the nation, who had recently witnessed the partition. The best way was socialistic pattern of government was adopted thus government nationalized a no of operation that were important for the development of the economy and the social health of the nation. Insurance was one such industry that saw industrialization in year 1956. Prior to this the Indian sector had some 246 companies in the insurance sector. Then, Life Corporation of India was formed and all the other life insurance companies gave their business to the corporation. The basic intention was to take the concept of life insurance to the grass root level of the Indian.
INSURANCE INTRODUCTION
highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at the disadvantage. The first two decades of the twentieth century saw lot of the Growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crores in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires
a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the 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 re-organization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the corporate office. LICs Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families.
Some of the important milestones in the life insurance business are as:1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started
functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency margins and
the Tariff Advisory Committee set up.
1972: 107 insurers amalgamated and grouped into four companies viz+ the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. There forms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the committee submitted the report and some of the key recommendations included. i) Structure Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate.
ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state. iii) Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance (Currently a part from the Finance Ministry) should be independent. made the domestic
iv) Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (There current to be brought down to this level over a period of time). v) Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body. holdings
LIFE POLICIES
Life Insurance is a contract for payment of a sum of money to the person assured of his/her nominee entitled to receive the same on the happening of certain event. A family is generally dependent for its food, clothing and shelter on the income brought in at regular intervals by the breadwinner of the family. So long as he lives and the income is received steadily that family is secure, but should death suddenly intervene the family may be left in a very difficult situation and sometimes, in stark poverty. Uncertainty that is risk, which gives rise to the necessity for some form of protection against the financial lose arising from death. Insurance substitutes this uncertainty by certainty.
It is a plan that provides guaranteed educational benefits to the child along with life insurance cover and hence is suitable for parents (between 20-60 years) with children in the age group of 0-12 years.
This is an improved version of the New Children's Deferred Assurance plan. Parents or legal guardians can propose the policy for children between ages 1 and 12 years, with risk commencing at an early age
Salient Features
Salient Features
It is a money back plan where in sum assured is paid at regular intervals. The policy can be so designed that it provides money at important
Children between ages 1 and 12 years are eligible Parents can propose the childs life The Plan is basically endowment type.i.e.Sum assured is payable either on survival to the term or on death happening within the term
milestones of the child's education like secondary education, higher secondary, and graduation and post graduation.
On death of the life assured with in the term, full sum assured is paid
immediately and all future premiums are waived. Death benefits are in additions to the benefits that child is likely to get in the normal course of the policy i.e., child will be eligible for amounts at important milestones of education, irrespective of death of the life assured.
One has the flexibility to choose the exact age of the child (between 22 to 25 years), at which the policy is to mature. The term of the policy is determined by Age of the child on maturity - Age of the child on the date of proposal.
Policyholder has the option to avail additional benefits such as Income benefit rider, Accident Disability
Interpretation
Under this category ICICI smart kid is better than LIC Jivan Kishore, as in smart kid, the parent of the kid is insured and not the kid. And if in some mishappenning the parents with in the term, full sum assured is paid immediately and all future premiums are waived. And these death benefits are in addition to the benefit that child is likely to get in normal course of policy, i.e. at important milestone of education, irrespective of death of the life assured. On the other hand in case of LICs Jivan Kishore the child is insured and a sum assured is payable either on survival to term or on death happening of child within the term and in case the parent happen to die during the defrayment period, the policy has to be continued by regular payment of premiums.
Endowment policies - Cover the insured for a specific period. The insured receives money on
survival of the term and is not covered thereafter. Save 'n' Protect (ICICI PRU Life) Suitability It is an ideal plan for persons who wish to accumulate savings on a regular basis, while having insurance protection. New Janaraksha Suitability This plan is similar to an Endowment Assurance plan
except that it has a special additional feature of a 3 year free risk coverage, even if premiums are defaulted. It also comes with a built-in accident benefit.
This policy is most suitable for persons who are not sure of a regular income every year and who expect their income position to improve after a short while. For example, farmers who
experience
crop
failure
at
The additional premium payable when compared to an ordinary Endowment Assurance plan is marginal. For example, under an Ordinary Endowment Assurance plan, for Age 30 and a term of 25 years, per Rs 1000 sum assured, the premium payable is 42.05 (inclusive of accident benefit). For the New Jana Raksha plan, premium for the same policy is Rs 42.90 i.e. only Rs. 0.85 more, for the additional benefits.
Salient Features It is basically an Endowment Assurance Plan with deferred participation in profits and extended life cover. It is a fixed term plan - combination of both savings & life cover.
Salient Features
Sum assured is payable either on survival to the term or on death happening within the term.
If two years premiums are paid under the policy, the policy will automatically extend for 3 more years even if further premiums are defaulted. This facility is available for any number of times.
Built in accident benefit. Bonus for the full term is payable on the date of maturity or in the
Benefits On death occurring within the term. 1. Full SA plus GA & vested bonuses are payable
Benefits On Survival
On survival 1. Full SA plus GA plus vested bonuses during the full term 2. Additionally, one gets a free life cover for 5 years, from date of maturity, for 50% of original sum assured. No Evidence of health is required and no premium need to be paid for this. Riders available Accident & disability benefit 1. Waiver of future premiums 2. 10% of SA each year for 10 years. 3. Additional SA, if death is due to an accident
On Death:
Additional Benefits If 2 years premiums are paid under the policy, the policy is continued uninterrupted for 3 years even if premiums are defaulted. This facility is
available for any number of times. The life assured can pay the defaulted instalments within three years with interest and thus get the cover extended. No evidence of health needs to be produced. The policy also a
while
travelling
as
9 medical conditions are covered. On admission of a claim, full SA + GA + VB is paid and policy contract terminates with all riders ceased. Claim under this
Major Surgical Assistance 43 surgical procedures are covered 1. Major Surgical Procedure - 50% of SA 2. Intermediate Surgical Procedure 30% of SA 3. Minor Surgical Procedure - 20% of SA
Claims can be made for more than one surgical procedure, subject to a maximum of 50% of SA, claim under this rider is not allowed during first 6 months of the policy Level Term Insurance Additional cover in the event of death happening within the term. When one avails extend life cover, no riders are available Benefits On death occurring within the term. 2. Full SA plus GA & vested bonuses are payable
Benefits On Survival Basic Sum Assured + bonus under the With-profit plan On Death: Basic Sum Assured + bonus under the With-profit plan Additional Benefits
On survival 3. Full SA plus GA plus vested bonuses during the full term 4. Additionally, one gets a free life cover for 5 years, from date of maturity, for 50% of original sum assured. No Evidence of health is required and no premium need to be
If 2 years premiums are paid under the policy, the policy is continued uninterrupted for 3 years even if premiums are
paid for this. Riders available Accident & disability benefit 4. Waiver of future premiums 5. 10% of SA each year for 10 years. 6. Additional SA, if death is due to an accident
defaulted.
This
facility
is
available for any number of times. The life assured can pay the defaulted instalments within three years with interest and thus get the cover extended. No evidence of health needs to be produced. The policy also
while
travelling
as
passenger in train or bus Critical illness benefit 9 medical conditions are covered. On admission of a claim, full SA + GA + VB is paid and policy contract terminates with all riders ceased. Claim under this rider is not admissible during first six months of the policy.
Major Surgical Assistance 43 surgical procedures are covered 1. Major Surgical Procedure - 50% of SA 2. Intermediate Surgical Procedure 30% of SA 3. Minor Surgical Procedure - 20% of SA
Claims can be made for more than one surgical procedure, subject to a maximum of 50% of SA, claim under this rider is not allowed during first 6 months of the policy Level Term Insurance
When one avails extend life cover, no riders are available Other Conditions Minimum age 15
Sum
Assured
Maximum age 60 Maximum Maturity age 70 Minimum SA Rs.20,000/Minimum Term 10 years Loans can be availed under the policy and loan interest is chargeable.
Sum
Assured
premium
must
be
Rs.800 per annum Maximum term : 30 yrs Minimum age at entry : 18 yrs Maximum age at entry : 50 yrs
Interpretation
Among these endowment plans Save n Protect of ICICI prudential life and new Janaraksha both plans are same and there is not much difference among them except that in ICICI we get additional free life cover for 5 years from date of maturity for 50% of original sum assured. On the other hand in LIC we dont get this benefit but in LIC, if 2 years premium are paid under the policy, the policy is continued uninterrupted for 3 years even if premium are defaulted. The life assured can pay the defaulted installment within 3 years with interest and get the course extended.
Whole life policies - Cover the insured for life. The insured does not receive money while he is
alive; the nominee receives the sum assured plus bonus upon death of the insured. ICICI Pru Life Guard Suitability
Maximum
thrust
is
on
family
protection. This policy is suitable for people who wish to provide large sums for the benefit of their family at
an economical cost.
this plan an individual gets life coverage for almost whole of his life.
Salient Features
Salient Features
It is a pure risk or term insurance plan. The policy is offered in three variants:
1. ICICI Pru LifeGuard Level Term Assurance 2. ICICI Pru LifeGuard Level Term Assurance with Return of Premium 3. ICICI Pru LifeGuard Single Premium
Premiums have to be paid for 35 years or till age 80 years whichever is more.
Under each of the above variants, full sum assured is payable on death.
LifeGuard Level Term Assurance with Return of Premium, where in premiums paid are returned without any interest.
Riders enhance the benefits under the policy, which can be availed by paying marginal additional premium. One can avail Accident and Disability rider under all the above variants except ICICI Pru LifeGuard Single Premium
All the premiums paid under the policy are eligible for tax rebate under section 88 of IT Act.
Benefits On Survival
Benefits On Death
On survival to maturity nothing is payable except under ICICI Pru LifeGuard Level Term Assurance with Return of Premium, where in premiums paid are returned without any interest.
Sum assured + vested bonuses are payable to nominees/beneficiaries on death of life assured only.
On Death
Under each of the above variants, full sum assured is payable on death.
Other conditions
Other Conditions
Age at entry: 18 years Maximum age at entry: 50 years. Maximum age at exit : 65 Minimum term: 5 years Maximum term : 25 years( For ICICI Pru LifeGuard Level Term Assurance & ICICI Pru LifeGuard Level Term Assurance with Return of Premium)
Minimum sum assured : Rs 20000. Minimum premium must be Rs.800 per annum
Minimum premium - Rs. 2400 per annum. ( For ICICI Pru LifeGuard Level Term Assurance & ICICI Pru LifeGuard Level Term Assurance with Return of Premium)
Minimum
Sum
assured
Rs.
Interpretation
Among these plans the ICICI prudential life guard is better than LICs whole life plan as in these type of plan no survival benefits are there and we get the sum assured only on the death of the life assured. But ICICIs life guard gives us an option in which premium paid are return but without any interest which is not there in the LICs whole life plan.
Money back policies - The nominee receives money immediately on death of the insured. On
survival the insured receives money at regular intervals during the term. These policies cost more than endowment with profit policies. ICICI Pru Cash Back (ICICI PRU Life) Suitability
Policy is suitable for people who wish to have combined benefit of savings and liquidity all the while having insurance protections. Policy provides for the periodic financial requirements of an individual with the added benefit of insurance
This plan is suitable for people who require lump sum amounts in future to meet specific expenses such as children's education or marriage. At the same time, the policy provides insurance protection for the family as well as old age provision.
Salient Features
It a money back plan where in the lump sum amounts are payable to life assured at regular periodic intervals.
A policy where lump sum amounts are paid to the life assured at periodic intervals on survival
Premiums are payable through out the term of the policy or till earlier death
In case of death of the life assured within the term, the total sum insured is paid to the nominee, irrespective of earlier
survival benefits Bonus is payable under this scheme Premiums are to be paid regularly to get
In case of death of the life assured within the term, the total sum insured
along with guaranteed additions and bonus are paid to the nominee, irrespective benefits
of
earlier
survival
Policy holder can opt for the rider at the time of taking the policy at a marginally additional premium.
Riders available are 1. Accident & Disability benefit 2. Critical Illness Benefit 3. Major Surgical Assistance and 4. Level Term Insurance
Benefits On Survival
Policy Term Survival Payment as a % of basic At the end of sum assured 3 6 9 12 10% 15% 20% 25%
Benefits On Survival
Term At the end Amount of of money back 20% of sum assured 20% " 20% " 40% " 15% of sum assured 15% " 15% " For Example, on a Rs. 1,00,000 policy
5thyear
Rs. 20000
15 years
20 years
15(Maturity)
50% plus guaranteed additions plus vested bonuses. 10% of sum assured 15% 25 years
5thyear
Rs. 15000
4 20 years 8 12
10thyear 15thyear
20%
16
20thyear 25thyear
20 (Maturity)
On Death: On Death:
In case of death of the life assured within the term, the total sum insured along with guaranteed additions and bonus is paid to the nominee, irrespective benefits of earlier survival
Full sum assured is payable in the event of the death of the life assured within the term, without any deduction of earlier survival benefits.
For example, suppose a person takes a Rs. 1,00,000 policy for 20 years. At the end of the 5th and 10th year he receives Rs. 20,000 each as survival benefit. If he happens to die in the 12h year, the nominee of the life assured will receive full 1,00, 000,irrespective of the earlier benefits of Rs. 40,000.
1. Waiver of future premiums 2. 10% of SA each year for 10 years. 3. Additional SA, if death is due to an accident while travelling as a
9 medical conditions are covered. On admission of a claim, full SA + GA + VB are paid and policy contract terminates with all riders ceased. Claim under this rider is not admissible during first six months of the policy. Major Surgical Assistance 1. 43 surgical procedures are covered. Major Surgical Procedure - 50% of SA
2. Intermediate
Surgical
Procedure - 30% of SA 3. Minor Surgical Procedure 20% of SA Claims can be made for more than one surgical procedure, subject to a
maximum of 50% of SA, claim under this rider is not allowed during first 6 months of the policy Level Term Insurance Additional cover in the event of death happening within the term. Other Conditions Minimum amount of Sum Insured - Rs. 40,000 Minimum premium must be Rs.800 per annum Minimum age at entry-13 years Maximum age at entry : 1. 20 year policy - 50 years 2. 25 year policy - 45 years Bonus additions to the policy are calculated for full sum assured. They are payable only along with final maturity benefit on date of maturity or on death, whichever is earlier No loan will be granted under these policies
Other Conditions Minimum amount of Sum Insured Rs. 50,000 Minimum age at entry 16 years Maximum age at entry 55 years
Interpretation
Among these plans ICICIs Cash Back is a step ahead of LICs Money Back policy. On the basis that as where on survival of term in LIC we get 100% of basic sum assured plus vested bonus, we get 120% of basic sum assured in ICICIs Cash Back plus guaranteed addition and vested bonus. So here we get 20% extra or additional benefit than LICs Money Back policy.
Pension schemes Pension schemes are policies that provide benefits to the insured only upon
retirement. If the insured dies during the term of the policy, his nominee would receive the benefits either as a lump sum or as a pension every month. Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies covering all the needs. ICICI Pru Forever Life (Deferred Pension) Suitability
New Jeevan Suraksha 1 Suitability This is a unique plan designed to provide pension from a chosen retirement date. The plan can be taken by anyone who wishes to set apart an amount as pension.
The plan is suitable for people who are not in any pension schemes and wish to provide regular income for life after a stipulated date. The amount you receive depends on the premium you pay till the stipulated date and the option you choose. It also offers life cover during the deferment (i.e., premium paying) phase.
Other Conditions
Regular Premium Single Premium Policy
Other Conditions
Minimum age to apply 18 32
Minimum age at entry: 18 years. Maximum age at entry: 65 years. Minimum vesting age: 50 years. Maximum vesting age: 79 years. Minimum deferment period: 2 years. Maximum years. Minimum Notional cash option for regular premium policies :Rs.50000 Minimum premium: Rs.2500 p.a. for deferment period: 35
Rs. 50,000/-
Rs. 50,000/-
Minimum term is
5 Years
Vesting age
45 to 65 years
45 to 65 years
Maximum Term Assurance Sum Assured would be equal to twice the Notional Cash Option subject to a maximum of Rs. 25,00,000 (overall limit on riders on all plans).
Minimum Term Assurance Sum Assured: Rs.1,00,000 If monthly mode is opted: Rs.150.
Maximum age at entry 50. Minimum Term 10 years. Maximum Term 35 years. Term Assurance Rider cover ceases at age 60 years.
Interpretation
Among the pension plans of ICICI prudential (Forever Life) and LICs New Jeevan Suraksha, ICICIs plan is step ahead as it gives you the option to postpone the vesting age up to a maximum of 65 years. Secondly the policy holder is at an option to opt pension from any other insurance company. Thirdly he has having an option to terminate his policy after 3 years premium are paid and a guaranteed surrender value is payable.
flexibilities to the policyholders both in the accumulation & deaccumulation phase. It provides various investments options during the accumulation phase with the flexibility of changing the annual contribution and also choosing a life insurance Cover.
Death Benefit: Death benefit in this product is the higher of the sum assured chosen and the value
of investments at the time of the death.
Value of units: Value of units in the policy would be the total sum of all the value of units held by
the policyholders in the various investment options at particular point of time.
Commutation Benefit: At the time of retirement, the policyholder would have the options of
taking up to 33 1/3% of the purchase price as lump sum and use the rest for buying the annuity.
Open Market Option Benefit: The policyholder at the time of retirement would have the
option of taking the annuity from any other annuity player of his choice at the time of retirement additionally the policyholders would have the option of using the OMO at the time of each of the annuity resets.
CHAPTER-2
REVIEW OF LITERATURE
Press and his colleagues (1997):- They noted that the issues most highly linked to overall
satisfaction involve complaint management. Efficiently handling problems, being attentive to concerns, and being capable to resolve troubles over the telephone emerged as critically vital to insurance customer satisfaction.
Beckettetal (2000):- He illustrate tentative conclusions as to why consumers emerge to stay loyal
to the similar insurance provider, even though in many instances they hold less favorable views
toward these service providers. For instance, many consumers emerge to perceive small differentiation between insurance providers, making any change essentially worthless.
Duborvski (2001):- He described a multi-phases model of consumers buying decision and the
task of customer satisfaction in achieving business excellence. The writer indicated that existing studies confirm important connection between satisfaction levels, on one side, and repeated buying, greater brand loyalty and spreading a positive view of the product, on the other side.
Jamal and Naser (2002):- He proposes that customer satisfaction is based not only on the
decision of customers towards the reliability of the delivered service, but also on customers experiences with the service delivery method.
Deemas (2002):- He studied the satisfaction levels of a sample of customers of the insurance. The
primary part asked the respondents to provide universal background information (e.g., gender, age category, nationality and so on). The next part listed the 21 attributes and asked respondents to specify their satisfactions with each attribute using a 5-point Likert-type scale. The outcomes indicate that UAE nationals and Arabs are the most predominant in their contributions to overall satisfaction whereas non- Arabs are the lowest. In addition, the outcomes show no difference in the levels of customer satisfaction between men and women respondents.
Dove and Robinsons (2002):- His study indicated that insurance customers have much
superior satisfaction levels when they believe their troubles with the insurance company have been resolved.
J.Dsouza (2004):- The writer indicated that existing studies confirm important connection
between satisfaction levels, on one side, and repeated buying, greater brand loyalty and spreading a positive view of the product, on the other side.
Dr. Rajarajan (2006):- He interpreted in his study that customers expect low insurance premium
that too with better opportunities, services and brand loyalty.
Need of the Study: To analyze the customer perception towards the public and private life insurance companies. To study the level of satisfaction among customers. To study the overall functioning of life insurance companies.
Scope of Study:The study is limited only to Phagwara city due to shortage of time.
RESEARCH METHODOLOGY
Research Methodology is a way to systematically solve the research problem. Advanced learners dictionary of current English lays down the meaning of research as `` A careful investigation or inquiry especially through search for new facts in any branch of knowledge. Research is thus an original contribution to an existing stock of knowledge making for its advancement. It involves
systematic collection, analysis and reporting of data and finding relevant solution to a specific situation or problem.
Primary sources: The primary data was that which was collected a fresh and for the first time for
the problem at hand, Method of collecting primary data may include observation, survey by means of questionnaire, interviews etc Primary data in this project was collected by way of structured questionnaire containing both the open ended and close ended questions.
Secondary sources: The Secondary data which has been collected by someone else and may be
used by some other person. Secondary sources of data include use of Books, Journals, and internet services. The data was collected for this project through book and internet services.
Methodology
Location : Phagwara, Distt. Kapurthala PUNJAB. Sample Type : Non probability (Convenience Sampling) Sample Size : 100
Limitations of Study:Every research work does have some limitations and so this research work is also having its limitations. The following are the limitations of this research study.
There may be possibility of biasness on the part of some respondents but very much been taken to make this report unbiased.
care has
Some respondents might not given the correct information due to their lack of interest and shortage of time. In order to keep their views secret some of the respondents might have provided wrong information. Lack of time availability i.e. one month only. Small sample size and lack of resources.
40%
35% 30% 25% 20% 15% 10% 5% 0%
Govt. Private
Self employed
Any others
INTERPRETATION
From the above data, we can analyze that after the research of 100 odd people, 32% people belongs to government category, 36%belongs to private category, 30% belongs to self employed category and remaining 2%people belongs to other category.
INTERPRETATION
From the above data, we can analyze that after the research of 100 odd people, 35% people have annual income less than 1 lacs, 29%have 1-2 lacs, 32% have 2-3 lacs and remaining 4% people have annual income of 3 lacs and above.
Yes No
57% 43%
43%
57%
INTERPRETATION
From the above pie chart, it is clear that out of 100 respondents, 57% have life insurance policy and 43% do not have any life insurance policy.
Public sector Insurance companies Private sector Insurance companies Both None
None
INTERPRETATION
From the above graph, we can analyze that 37% of respondents have the insurance policy from public sector insurance companies, 10% have the insurance policy from private sector insurance companies, 10% have from both the companies while 43% do not have the life insurance policy.
Q5. Which of the following public and private Insurance companies are you aware of?
LIC ICICI Prudential TATA AIG HDFC Standard Bajaj Allianz Kotak Mahindra Max New York Any others
95% 18% 1% 8% 9% 2% 7% 5%
LIC
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
ICICI Prudential TATA AIG HDFC Standard Bajaj Allianz Kotak Mahihdra Max New York Any others
INTERPRETATION
From the above graph, we can analyze that 95% of the respondents are aware of LIC Insurance companies, 18% are aware of ICICI Prudential companies 1% are aware of TATA AIG companies, 8% of HDFC standard, 9& of Bajaj Allianz 2% of Kotak Mahindra, 7% are aware of Max New York and 5% respondents are aware of any other insurance companies.
Yes No
62% 38%
38%
62%
INTERPRETATION
From the above pie chart, we can analyze that 62% of the respondents supports Privatization of insurance sector while the rest of the 38% respondents dont support the privatization of insurance sector.
Q7.Do you think that Pvt. Companies provide better services than Govt. Insurance companies?
64 24 12
12
INTERPRETATION
From the above pie chart, it is clear that 64% of the respondents think that private companies provide better services than the govt. insurance companies whereas 24% of the respondents dont think so and 12% of the respondents cant say anything about it.
19%
INTERPRETATION
From the above pie chart, we can analyze that out of 100, 49% of the respondents would like to shift over to private insurance companies,32% of the respondents would not like to do so whereas 19% of the respondents cant say anything about it
Q9. Which factor is better in public and private insurance companies from your point of view? Factor Reliability Service Cost Easy Claim Process Public Insurance 79% 64% 30% 63% Private Insurance 21% 36% 70% 37%
50%
40% 30% 20% 10% 0% Public Insurance Private Insurance
INTERPRETATION
From the above graph, it is very clear that reliability, service, cost and easy claim process are better factors for public insurance companies as compared to the private insurance companies.
Findings of Study
Private companies are providing better services than public companies as 64% respondents are satisfied with their services. People are aware more of the public sector insurance as it is there in the market for more than 50 years. Market acceptability of the public sector insurance is more than that of private insurance because of its reliability and low cost. sector
Suggestions of Study
So first of all ICICI Prudential should try to bring its premium a little down to tap the market. ICICI Prudential should try to concentrate on low-income group also. Where as it is only targeting the middle and high-income group from where it can fetch large premium in one shot. It should try to flout variety of plans in market as per the actual needs of the customer. It should try to build faith about the creditworthiness of the company in general public and try to clear the myths that being a private company it can run away or it can go insolvent at any point in future.
CONCLUSION
CONCLUSION In the end we would like to conclude in a way that although ICICI products are better than LIC But LIC is there in the market for more than 50 years and it is the King who is having a large number of products that too with low premiums.
REFERENCE
Beckettetal (2000):- He illustrate tentative conclusions as to why consumers emerge to stay loyal
to the similar insurance provider, even though in many instances they hold less favorable views toward these service providers. For instance, many consumers emerge to perceive small differentiation between insurance providers, making any change essentially worthless.
Duborvski (2001):- He described a multi-phases model of consumers buying decision and the
task of customer satisfaction in achieving business excellence. The writer indicated that existing studies confirm important connection between satisfaction levels, on one side, and repeated buying, greater brand loyalty and spreading a positive view of the product, on the other side.
ANNEXURE
QUESTIONNAIRE
Dear Sir/Madam, We Quincy Karwal, Michelle, and Chandni the students of APJ Institute of Management, conducting a research on Customer Perception towards Public and Private Life Insurance Companies. I request you to fill this questionnaire & I assure that this data will be used only for study purpose & it will be kept confidential. 1 Name 2. Age
a) _________________________________
Less than 25
b) 25 35
3. Which employed category do you belong to? a). Government c). Private d). Any other
b) Self employed 4. Your annual income? a). b). Less than 1 lakh 1 lakh to 2 lakh
6. From which sector do you have life insurance policy? a. b. c. d. Public Sector Private Sector Both None
7.
Which of the following Public and Private companies are you aware of ? a. LIC b. ICICI Prudential c. TATA AIG d HDFC Standard e f Bajaj Allianz Kotak Mahindra
9. Do you think that Pvt. Companies provide better services than Govt. Insurance Companies? a) b) c) Yes No Cant Say
11. Which factor is better in Public and Private Insurance Companies from your point of view? Factor Reliability Public Insurance Private Insurance
Service
Cost
12.