A Comparative Study on the Offerings of Insurance Products

7/31/2019 A Comparative Study on the Offerings of Insurance Products

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INTRODUCTION

Insurance is basically risk management

device. The losses to assets resulting fromnatural calamities like fire, flood,

earthquake, accident etc. are met out of

the common pool contributed by large

number of persons who are exposed to

similar risks. This contribution of many is

used to pay the losses suffered by unfortunate few. However the basic principle is that loss

should occur as a result of natural calamities or unexpected events, which are beyond thehuman control. Secondly insured person should not make any gains out of insurance. It is

natural to think of insurance of physical assets such as motor car insurance or fire

insurance but often be forget that creator all these assets is the human being whose effort

have gone a long way in building up to assets. In that scene human life is a unique income

generating assets. Unlike physical assets, which

decrease with the passage of time, the individual

become more experienced and mature as headvances in age. This raises his earning capacity

and the purpose of life insurance is to protect the

income to individual and provide financial security

to his family, which is dependent on his income in

the event of his pre-mature death. The individual

also himself also needs financial security for the old age or on his becoming permanently

disabled when his income will stop. Insurance also has an element of saving in certain

cases. Insurance is rupees 400 billion business in India and yet its spread in the country is

relatively thin. Insurance as a concept has not being able to make headway in India.

Presently LIC enjoys a monopoly in Life Insurance business while GIC enjoys it in

general insurance business. There have been very little option before the customer to

decide the insurer. A successful passage of the IRA bill have clear the way of private


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sector operators in collaboration with their overseas partners. It is likely to bring in a more

professional and focused approach. More over the

foreign players would bring sophisticated actuarial

techniques with them, which would facilitate the insurer

to effectively price the product. It is very important that

the trained marketing professionals who are able to

communicate specific features of the policy should sell

the policy. In the next millennium all these activities

would play a crucial role in the overall development and maturity of the insurance

industry.

Insurance is an upcoming sector, in India the year2000 was a landmark year for life insurance

industry, in this year the life insurance industry

was liberalized after more than fifty years.

Insurance sector was once a monopoly, with LIC

as the only company, a public sector enterprise.

But nowadays the market opened up and t here

are many private players competing in the market. There are fifteen private life insurancecompanies has entered the industry. After the entry of these private players, the market

share of LIC has been considerably reduced. In the last five years the private players is

able to expand the market (growing at 30% per annum) and also has improved their

market share to 18%. For the past five years private players have launched many

innovations in the industry in terms of products, market channels and advertisement of

products, agent training and customer services etc.


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GENERAL DEFINITION :

In the words of John Magee, Insurance is a plan by which large numbers of people

associate themselves and transfers to the shoulders of all risks that attach to indi viduals

FUNDAMENTAL DEFINITION:

In the words of D S Hansel, Insurance may be defined as a social device providing

financial compensation for th e effects of misfortune, the payments being made from the

accumulated contributions of all participating in the scheme.

CONTRACTUAL DEFINITION:

In the words of justice Tidal Insurance is a contract in which a sum of money is paid to

the assured as consideration of insurers incurring the risk of paying a large sum upon a

given contingency.

CHARACTERISTICS OF INSURANCE

Sharing of risk Co-operative device Evaluation of risk Payment on happening of special event The amount of payment depends on the nature of losses incurred

ABOUT THE PROJECT

The project deals with comparative analysis of different insurance products offered by

insurance companies.


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PURPOSE OF THE PROJECT

The main purpose of the project is to do comparative analysis of different insurance

products, check the awareness level and perception of insurance by the individuals.The project would also help in understanding preference of people regarding private

and public insurance companies. The main objective of the research is making

comparative analysis between :-

i) Birla sun life insurance with Life insurance Corporation of India.

ii) Birla sun life insurance with Tata AIG life insurance.

iii) National Health Plan with Reliance Health Wise Policy.

Finding out the features and benefits of these plans.

To find out the awareness level of insurance in Kolkata.

To determine customer preference towards private insurance and public insurance

companies.

Marketing of different insurance products.

SCOPE OF THE PROJECT

The entry of foreign MNCs and the conductive business environment fostered by the

government, it is no wonder that the re-entry of private insurance has marked a second

coming for the sector. In just five years, the sector has undergone a makeover, offering

more choice, better services, quicker settlement, tighter regulation and greater awareness

the environment become more and more competitive and services and products become

alike, creating a differentiation is becoming extremely tough. Thus, the main objective of

my project was to find out the preference of people regarding insurance companies.The

study then goes on to evaluate and analyze the findings so as to present a clear picture of

recent trends in the Insurance sector.


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The various life insurers entered India:-

1. HDFC Standard Life Insurance Company Ltd.

2. Max New York Life Insurance Co. Ltd.

3. ICICI Prudential Life Insurance Company Ltd.

4. Kotak Mahindra Old Mutual Life Insurance Limited.

5. Birla Sun Life Insurance Company Ltd.

6. Tata AIG Life Insurance Company Ltd.

7. SBI Life Insurance Company Limited.

8. ING Vysya Life Insurance Company Private Limited.

9. Met life India Insurance Company Ltd.

10. Royal Sundaram Life Insurance Company Limited.

11. Aviva Life Insurance Co. India Pvt. Ltd.

12. Sahara India Insurance Company Ltd.

13. Shriram Life Insurance Company

14. Life Insurance Corporation of India.

15. Reliance Life Insurance Company Limited.

16. Bharti AXA Life Insurance Company Limited.


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REVIEW OF LITERATURE

About Insurance Industry

"Insurance is a contract between two parties

whereby one party called insurer undertakes in

exchange for a fixed sum called premiums, to

pay the other party called insured a fixed

amount of money on the happening of a certain

event."Insurance is a protection against

financial loss arising on the happening of anunexpected event. Insurance companies collect premiums to provide for this protection. A

loss is paid out of the premiums collected from the insuring public and the Insurance

Companies act as trustees to the amount collected. For Example, in a Life Policy, by

paying a premium to the Insurer, the family of the insured person receives a fixed

compensation on the death of the insured. Similarly, in a car insurance, in the event of the

car meeting with an accident, the insured receives the compensation to the extent of

damage. It is a system by which the losses suffered by a few are spread over many,

exposed to similar risks. In the western world, life insurance evolved mainly from the

maritime industry. Started by private financiers who used to gamble on the lives of

seafarers by offering five times the money deposited with them in case of certain

contingencies?In its present form, life insurance has its origin in England and made its

debit in India in the year 1818.Initially, Indians were not considered on par with

Europeans as far as their insurability was concerned. There were also many other failures.

It was in the early part of the 20 th century that some kind of legislation was made to

regulate the industry. From then on life insurance made great strides in the country. At the

time of independence and thereafter, there were more than 200 companies operating in

India and not all of them on sound ethical principles. Many factors combined together to

prompt the then government to nationalize the life insurance industry in 1956 to form the

Life Insurance Corporation of India.The years from 1956 to 1999 saw the life insurance


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corporation of India emerge as a giant financial institution and the lone organization

purveying life insurance, if we ignore the minimal presence of postal life insurance. The

institution succeeded in penetrating in many areas and segments of the population and in

garnering public money for public welfare.

It was in the 1990s that the winds of change started sweeping over India and

brought in their wake many changes in the economy. Liberalization ensured competition

in many fields and there was a clamor that the insur ance industry too is opened up to

Private Indian and foreign players to provide the customer with a choice. The Malhotra

committee, appointed in 1993 was given the mandate to study the industry and to suggest

the changes that were necessary to make it modern and in tune with peoples aspirations.

The report submitted by the committee was the precursor of the IRDA Bill. By the passing

of the IRDA Bill, the Insurance sector has been opened up for the private companies to

carry on insurance business. Now the life insurance industry in India is rapidly evolving

and growing. It has witnessed a big growth as many Indian and foreign were entered in to

the Indian insurance sector. The life insurance industry in India has become fiercely

competitive with the entry of several new players including major multinational insurers

after the deregulation of the sector. It has opened up a range of untapped opportunities for

new entrants into the industry, as the potential market for buyers is high since the

emerging market in India has a low insurance penetration and high growth rates.

Logic of insurance

It is a system by which the losses suffered by a few are spread over many, exposed to

similar risks. Insurance is a protection against financial loss arising on the happening of

an unexpected event. Insurance companies collect premiums to provide for this

protection. A loss is paid out of the amount premiums collected from the insuring publicand the Insurance Companies act as trustees to the collected .

Need of insurance

Insurance is desired to safeguard oneself and one's family against possible losses on


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account of risks and perils. It provides financial compensation for the losses suffered

due to the happening of any unforeseen events. By taking life insurance a person can

have peace of mind and need not worry about the financial consequences in case of

any untimely death. Certain Insurance contracts are also made compulsory by

legislation. For example, Motor Vehicles Act 1988, stipulates that a person driving a

vehicle in a public place should hold a valid insurance policy covering Act" risks.

Another example of compulsory insurance pertains the Environmental Protection Act,

wherein a person using or to carrying hazardous substances (as defined in the Act)

must hold a valid public liability (Act) policy.

Insurance in India

Insurance is a federal subject in India and has a history dating back to 1818. Life and

general insurance in India is still a nascent sector with huge potential for various global

players with the life insurance premiums accounting to 2.5% of the country's GDP while

general insurance premiums to 0.65% of India's GDP. The Insurance sector in India has

gone through a number of phases and changes, particularly in the recent years when

the Govt. of India in 1999 opened up the insurance sector by allowing private

companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian

insurance sector is considered as a booming market with every other global insurance

company wanting to have a lion's share. Currently, the largest life insurance company in

India is still owned by the government.


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HISTORY OF INSURANCE IN INDIA

Insurance in India has its history dating back till 1818, when Oriental Life Insurance

Company was started by Europeans in Kolkata to cater to the needs of Europeancommunity. Pre-independent era in India saw discrimination among the life of foreigners

and Indians with higher premiums being charged for the latter. It was only in the year

1870, Bombay Mutual Life Assurance Society, the first Indian insurance company

covered Indian lives at normal rates.

At the dawn of the twentieth century, insurance companies started mushrooming

up. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were

passed to regulate the insurance business. 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. However, the disparage still existed as discrimination

between Indian and foreign companies. The oldest existing insurance company in India

is National Insurance Company Ltd, which was founded in 1906 and is doing business

even today. The Insurance industry earlier consisted of only two state insurers: Life

Insurers i.e. Life Insurance Corporation of India (LIC) and General Insurers i.e. General

Insurance Corporation of India (GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked from parent

company and made as independent insurance companies: Oriental Insurance

Company Limited, New India Assurance Company Limited, National Insurance

Company Limited and United India Insurance Company Limited.

Life insurance corporation act, 1956

Even though the first legislation was enacted in 1938, it was only in 19 January 1956,

that life insurance in India was completely nationalized, through a Government

ordinance the Life Insurance Corporation Act, 1956 effective from 1.9.1956 was

enacted in the same year to, inter-alia, form LIFE INSURANCE CORPORATION after

nationalization of the 245 companies into one entity. There were 245 insurance


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companies of both Indian and foreign origin in 1956. Nationalization was accomplished

by the govt. acquisition of the management of the companies. The Life Insurance

Corporation of India was created on 1 September, 1956, as a result and has grown to

be the largest insurance company in India as of 2006

General Insurance Business (Nationalization) Act, 1972

The General Insurance Business (Nationalization) Act, 1972 was enacted to nationalize

the 100 odd general insurance companies and subsequently merging them into four

companies. All the companies were amalgamated into National Insurance, New India

Assurance, Oriental Insurance, and United India Insurance which were headquartered

in each of the four metropolitan cities.

Insurance Regulatory and Development Authority (IRDA) Act,

1999

Till 1999, there were not any private insurance companies in Indian insurance sector.

The Govt. of India then introduced the Insurance Regulatory and Development Authority

Act in 1999, thereby de-regulating the insurance sector and allowing private companies

into the insurance. Further, foreign investment was also allowed and capped at 26%

holding in the Indian insurance companies. In recent years many private players

entered in the Insurance sector of India. Companies with equal strength started

competing in the Indian insurance market. Currently, in India only 2 million people

(0.2 % of total population of 1 billion), are covered under Mediclaim, whereas in

developed nations like USA about 75 % of the total population are covered under some

insurance scheme. With more and more private players in the sector this scenario may

change at a rapid pace.


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ADVANTAGES OF LIFE INSURANCE

i) Protection against risk of untimely death

Life insurance is a product, which offers protection against the risk of death

the full sum assured is made available under a life assurance policy, whereas under

other savings schemes, the total accumulated savings alone will be available.

ii) Protection during old age

Life insura nce can also be used as a means of saving for ones future.

There are a number of life insurance policies, which in addition to life cover also provide

the means of investing ones income. The sum as per the policy will be received only

after a period of time. This amount thus provides for the old age.

iii) Forced savings

Payment of life insurance premiums is compulsory and becomes a habit.

Savings in other scheme can be easily withdrawn and may be used for less worthy

purpose. Termination of a life insurance policy by the policyholder usually results in

substantial loss in benefits under the policy to the policyholder. One is thus encouraged

to save and keep ones policy alive.

iv) Educational requirements and charity

The object of insurance may be to serve as a security to educational

funds in respect of loans advanced for educational purpose or to provide donations to

charitable institutions like hospital and school.


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v) Nomination and assignment

The life insured can name the person or persons to whom the policy money

would be payable in the event of his death .the proceeds of a life insurance policy can

be protected against the claims of the creditors of the life insured by effecting a valid

assignment of the policy. The beneficiaries are fully protected from creditors expect to

the extent of any interest in the policy retained by the insured. Marketability and

suitability for borrowing after 3 years, if the policyholder finds that he is unable to

continue payment of premiums he can surrender a policy for a cash sum. A life insurance

policy is

accepted as a security for a commercial loan.

vi) Loans from the insurance company

A policy holder can take a loan from his insurance company against the

Security of his life insurance policy provided the terms of the terms of his policy allow

such a loan. This loan can be taken usually after a period of 3 years from

commencement of the policy and is a percentage of its surrender value.

vii) Investment options

The unit link products gives comprehensive insurance solutions that cater

to an individuals dual need of earning potentially high returns as well as stay for life.

Thus there is an option to invest money in the products that combine the best of

insurance and investment. In a volatile market conditions it is possible to secure both as

one can hedge the investment with saver investment vehicles that provide a diversified

portfolio.


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viii) Tax benefits

The Indian income tax act provides tax concessions to the policyholder

both on payment of premium and on the maturity amount. Under sec 88 the tax benefits

on premium paid by an individual for life insurance policies on his own life\on the life of

spouse \children minor or major, including married daughters.

Under sec 6 of the married womens property ac t if a married man takes a

policy of life insurance on his own life and expenses on the face of it to be for the

benefit of his wife or of his wife and children or any of them, then it shall be deemed to

be a trust for the benefit of his wife and children or any of them, According to the

interest so expressed and shall not so long as any object of trust remains be subject to

the control of the husband or to his creditors or form part of his estate. An insurance

policy taken by a married man in the above manner is ideal way to protect the interest

of his wife and children, even after his untimely death.


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Pension plan- A pension plan can be looked as more of an investment product

offered by insurers to cater to the golden retire ment years of an individual. Also

referred to as retirement plans, these are designed to ensure that you are financially

independent during your retirement years. Most of the pension plans also provide an

optional life assurance cover in them.

Child plan- It basically aims at ensuring the achievement of life goals of your child.

The goal can be higher education, financial help in establishing a business or

profession, or even marriage. In a child plan, the life assured can be the parent or the

child. The beneficiary for the policy, however, is the child. As a child is a minor, the life

insurance contract is between the parent and the insurance company. In case of early

death of the parent, the premium payment is waived off by the insurance company and

the policy continues as originally planned.

Unit Linked Insurance Plan- ULIPs have been the darling of insurance companies,

intermediaries and the insured population alike over the last five years. The main reason

for this popularity is the twin advantage of a pure life cover (insurance component) and a

range of investment funds or options (savings component) to match your risk profile.

While the pure life cover provides the much needed financial security to your dependents

in the event of your untimely death, the savings component allows you to participate in the

capital markets and build wealth over the long-term tenure of the policy.


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CHANGING FACE OF INDIAN INSURANCE INDUSTRY

Indian life-insurance market is the target market of all the companies who either want to

extend or diversify their business. To tap the Indian market there has been tie-upsbetween the major Indian companies with other International insurance companies to

start up their business. The government of India has set up rules that no foreign

insurance company can setup their business individually here and they have to tie up

with an Indian company and this foreign insurance company can have an investment of

only 24% of the total start-up investment. Indian insurance industry can be featured by:

Low market penetration.

Ever growing middle class component in population.

Growth of customers interest with an increasing demand for better insurance

products.

Application of information technology for business.

Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has a dozen private players, each of which are

making strides in raising awareness levels, introducing innovative products and

increasing the penetration of life insurance in the vastly underinsured country. Several

of private insurers have introduced attractive products to meet the needs of their target

customers and in line with their business objectives.


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INDIA: THE NEXT INSURANCE GIANT

Market Performance & Forecast: In 2000, Indian insurance market size was $21.71

billion. Between 2000 and 2007, it had an increase of 120% and reached $47.89 billion.Between 2000 and 2007, total premiums maintained an average growth rate of 11.96%

and the CAGR growth during this time frame has been 11.96%. It was one of the most

consistent growth patterns we have noticed in any other emerging economies in Asian

as well as Global markets.

Indian Insurance Market

Indian economy is the 12th largest in the world, with a GDP of $1.25 trillion and 3 rd

largest in terms of purchasing power parity. With factors like a stable 8-9 per cent annual

growth, rising foreign exchange reserves, a booming capital market and a rapidly

expanding FDI inflows, it is on the fulcrum of an ever increasing growth curve. Insurance

is one major sector which has been on a continuous growth curve since the revival of

Indian economy. Taking into account the huge population and growing per capita income

besides several other driving factors, a huge opportunity is in store for the insurance

companies in India. According to the latest research findings, nearly 80% of Indian

population is without life insurance cover while health insurance and non-life insurance

continues to be below international standards. And this part of the population is also

subjected to weak social security and pension systems with hardly any old age income

security. As per our findings, insurance in India is primarily used as a means to improve

personal finances and for income tax planning; Indians have a tendency to invest in

properties and gold followed by bank deposits. They selectively invest in shares also but

the percentage is very small 4-5%. This in itself is an indicator that growth potential for

the insurance sector is immense. Its a business growing at the rate of 15-20% per annum

and presently is of the order of $47.9 billion.India is a vast market for life insurance that is

directly proportional to the growth in premiums and an increase in life density. With the

entry of private sector players backed by foreign expertise, Indian insurance market has


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become more vibrant. Competition in this market is increasing with companys continuous

effort to lure the customers with new product offerings. However, the market share of

private insurance companies remains very low -- in the 10-15% range. Even to this day,

Life Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy

hand of government still dominates the market, with price controls, limits on ownership,

and other restraints.

Major Driving Factors

Growing demand from semi-urban population

Entry of private players following the deregulation

Rising demand for retirement provision in the ageing population

The opening of the pension sector and the establishment of the new pension regulator

Rising per capita incomes among the strong middle class, and spreading affluence

Growing consumer class and increase in spending & saving capacity

Public private partnerships infrastructure development

Dearth of innovative & buyer-friendly insurance products

Success of Auto insurance sector.

Emerging Areas

Healthcare Insurance & Pension Plans

Mutual fund linked insurance products

Multiple Distribution Networks .i.e. Bank assurance.


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The upward growth trend started from 2000 was mainly due to economic policies

adopted by the then Indian government. This year saw initiation of an era of economic

liberalization and globalization in the Indian economy followed by several reforms and

long-term policies that created a perfect roadmap for the success of Indian financial

markets. On the basis of several macroeconomic factors like increase in literacy rate &

per capita income, decrease in death rate and unemployment, better tax rebates,

growing GDP etc., we estimate that the Indian insurance sector will grow by $28.65

billion and reach $76.54 billion by 2011 with a CAGR (compounded annual growth rate)

of 12.44% and a growth of 59.82%.


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VALUING THE INVALUABLE

Both under insurance and over insurance can often be attributed to the lack of proper

understanding of the exact insurance needs for oneself and the family, and the failure tospot and cover all liabilities properly and adequately, or being over-conservative in this

regard.

Under Insurance

Under insurance, typically occurs when the existing financial liabilities and insurance

needs are fully taken care of. In the event of the untimely death of the only (or the mainearning) member of the family, his financial liabilities would obviously fall on his

dependents, leaving them in a state of financial distress that could threaten their need

of sustenance.

Over Insurance

Conversely, there are also instances where individuals indulge in life insurance coversthat far exceed in value than what is actually required. This is a classic case of over

insurance, which leads to an unnecessarily higher premium payment, leaving you much

poorer. It results in unnecessary expenditure that could otherwise be wisely invested

elsewhere. The need for an adequate insurance cover is never static and keeps on varying

with changes in the life stages and important events of an individual. The table below

provides an insight into the various life stages and events when life insurance cover

usually requires a revision.


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BIRLA SUN LIFE INSURANCE

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. as leadinginternational financial services organization. The local knowledge of the Aditya Birla

group combined with the expertise of Sun Life Financial Inc. offer a formidable protection

for your future. The Aditya Birla group has a turnover of Rs. 1,33,875crores(as on 31st

march 2008). It has over 100,000 employees across all its units worldwide.It is led by its

chairman Mr. Kumar Mangalam Birla. Some of its key companies are Hindalco, Grasim

and Aditya Birla Nuvo. Sun Life Financial Inc. and its partners, have operations in key

markets worldwide. These include Canada, U.S, U.K, Hong Kong, the Philippines, Japan,

Indonesia, India, China and Bermuda. Sun Life Financial Inc. has assets under

management of over us$ 404.7 BILLION (as on 31st March, 2008). It is a leading

performer in the life insurance market in Canada.

Birla sun life insurance (BSLI) has been operating for 7 years. It has contributed

significantly to the growth and development of the life insurance industry in India. It

pioneered the launch of unit linked life insurance plans amongst the private player in

India. It pioneered the launch of united linked life insurance plans amongst the private

players in India. It was the first player in industry to sell its policies through the

Bancassurance route and through the internet. It was the first private sector player to

introduce a pure term plan in the Indian market. BSLI has covered more than 2 million

lives since it commenced operations.


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LIFE INSURANCE CORPORATION OF INDIA

Mission

"Explore and enhance the quality of life of people through financial security by providing

products and services of aspired attributes with competitive returns, and by rendering

resources for economic development."

Vision

"A trans-nationally competitive financial conglomerate of significance to societies and

Pride of India Every day we wake up to the fact that more than 220 million lives are part

of our family called LIC. We are humbled by the magnitude of the responsibility we carry

and realize that the lives that are associated with us are very valuable indeed. Although

this journey started five decades ago, we are still conscious of the fact that, while

insurance may be a business for us, being part of millions of lives every day for the past

52 years has been a process called TRUST.

PRODUCTS OF LIFE INSURANCE CORPORATION OF INDIA

Children's Policy Komal Jeevan - Plan No. 159 Children Deferred - Plan no.41

Jeevan Kishore - Plan no.102 Jeevan Chhaya - Plan no.103 Marriage Endowment/Educational Annuity - Plan No. 90 Jeevan Anurag - Plan no.168


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Endowment Policy Endowment with Profits - Plan no.14 Limited Payment Endowment with Profits - Plan no.48

Jeevan Mitra - Plan no.88 New JanaRaksha Policy - Plan no.91 Jeevan Anand Plan no. 149 Jeevan Mitra Triple Cover - Plan no.133

Group Insurance Policy Janashree Bima Yojana

Group Insurance Scheme in lieu of EDLI Group (Term) Insurance Scheme Group Savings Linked Insurance Scheme Group Superannuation Scheme Group Mortgage Redemption Assurance Scheme Shiksha Sahayog Yojana

Joint Life Policy Jeevan Saathi - Plan no.89

Money Back Policy Money Back with Profit - Plan no.75 New Money Back - Plan no.93 Jeevan Surabhi 15 yrs - Plan no.106

Jeevan Surabhi 20 yrs - Plan no.107 Jeevan Surabhi 25 yrs - Plan no.108 Jeevan Bharati Plan No 160 Jeevan Samriddhi Plan No 154, 155, 156 157 Bima Bachat- Plan no.175


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Pension Plans or Annuities New Jeevan Dhara - Plan no.148 New Jeevan Suraksha Plan no. 147

Jeevan Akshay II Plan no. 163 Jeevan Nidhi Plan no. 169 Jeevan Akshay V Plan no. 183

Special Plans Term Assurance - Plan no.43 Mortgage Redemption - Plan no.52

Jeevan Aadhar - Plan no.114 Market Plus - Plan No 181 Jeevan Vishwas Plan No. 136 Jeevan Saral Plan No. 165 Jeevan Pramukh Plan No. 167

Term Policy

Convertible Term Assurance - Plan no.58 New Bima Kiran Term Assurance Anmol Jeevan I Plan No- 164 Amulya Jeevan-Plan No-17

Whole Life Policy

Whole Life with Profits - Plan no.2 Limited Payment Whole Life with Profits - Plan no.5 Single Premium Whole Life - Plan no.8 Jeevan Tarang- Plan no.178


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PENSION PLAN PRODUCTS OF LIC INDIA & ITS FEATURES

LIC of India retirement income plan LIC of India retirement income plan (unit linked)

What is the LIC of India retirement income plan?

The LIC of India retirement Income plan is a saving plan designed to meet your post

retirement needs. It is a plan that gives you jeene ki azaadi . It gives you the choice to

remain independent even after retirement .The LIC of India retirement income plan is a

participating plan. The plan comes in two forms: One with cover and one without cover .

WHO CAN AVAIL OF THE LIC OF INDIA RETIREMENT INCOME PLAN?

How old do you have to be to avail of this plan?

Minimum age -18 years

Maximum age 60 years


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For what term can choose to pay the premiums?

5 years 30 years

At what interva ls can you pay premiums?

Quarterly Half yearly Annually

What are the advantages of this plan?

You can choose to retire at any age between 45 years and 65 years. On retirement: Annuity option: Early retirement benefits:

Other products are:

Money plus Auto plus Child plan Health plan


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SWOT ANALYSIS

Strengths:

a. Dedicated Employees.

b. Well Efficient Management.

c. Technology.

d. Diversification of funds.

e. Strong and popular brand name.

f. Adaptability to changes.

Weakness:

a. Lack of good services.

b. Lack of awareness about insurance among people.

c. Less coverage in Rural Areas.

Opportunities:

a. Fast growing economy.b. Increasing per capita income in India.

c. Saving behavior.

d. High growth of ULIP industry.

Threats:

a. Arrival of new entrants in the insurance industry.

b. Cut throat competition within the industry


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TATA AIG LIFE-A NEW LOOK AT LIFE

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company,

formed by the Tata Group and American International Group, Inc. The Tata Group holds74 percent stake in the insurance venture with AIG holding the balance 26 percent. Tata

AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life

Insurance Company was licensed t operates in India on February 12, 2001 and started

operations on April 1, 2001.

Tata AIG Life offers a broad array of life insurance coverage to both individuals and

groups, providing various types of add-ons and options on basic life products to give

consumers flexibility and choice.

MAX NEW YORK LIFE INSURANCE

Max New York Life Insurance Company Ltd. is a joint venture between Max India Ltd.,

one of Indias multi -business corporations and New York Life Enterprises, a business unitof New York Life, a Fortune 100 company. Incorporated in 2000, Max New York Life

started commercial operation in 2001 and today is one of Indias leading private life

insurance companies. The company offers individual and group life insurance products

and is present across the country through a wide distribution network of multi channel

distribution

Max New York Life has 23 individual life and health insurance products and 9 riders that

can be customised. Besides this, the company offers 4 products and 7 riders in group

insurance business. The Company's paid up capital as on 31st March, 2011 was Rs. 1976

crore.


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NATIONAL INSURANCE COMPANY LIMITED

National Insurance Company Limited was incorporated in 1906 with its registered office

in Kolkata. Consequent to passing of the General Insurance Business Nationalisation Actin 1972, 21 Foreign and 11 Indian Companies were amalgamated with it and National

became a subsidiary of General Insurance Corporation of India (GIC) which is fully

owned by the Government of India. After the notification of the General Insurance

Business (Nationalisation) Amendment Act, on 7th August 2002, National has been

delinked from its holding company GIC and presently operating as a Government of India

undertaking. National Insurance Company Ltd (NIC) is one of the leading public sector

insurance companies of India, carrying out non life insurance business. Headquartered in

Kolkata, NIC's network of about 1000 offices, manned by more than 16,000 skilled

personnel, is spread over the length and breadth of the country covering remote rural

areas, townships and metropolitan cities. NIC's foreign operations are carried out from its

branch offices in Nepal. National transacts general insurance business of Fire, Marine and

Miscellaneous insurance. The Company offers protection against a wide range of risks to

its customers. The Company is privileged to cater its services to almost every sector or

industry in the Indian Economy viz. Banking, Telecom, Aviation, Shipping, Information

Technology, Power, Oil & Energy, Agronomy, Plantations, Foreign Trade, Healthcare,

Tea, Automobile, Education, Environment, Space Research etc. National Insurance is the

second largest non life insurer in India having a large market presence in Northern and

Eastern India.


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RELIANCE GENERAL LIFE INSURANCE

Reliance General Insurance is the fastest growing private sector general insurance

company in India with innovative product offerings and customer service standards thatare benchmarked to the best insurance practices in the world. Reliance General Insurance

offers a range of products for corporate and individual customers. With a focus on

customer-centric products, multiple distribution channels and technology, reliance general

insurance aims to increase its presence in the retail sector.

Reliance General Insurance is 100% subsidiary of reliance capital limited, which is one of

the Indias leading and fastest growing private sector financial services companies. It

ranks among the top three private sector financial companies and banking groups in terms

of net worth. Reliance capital has interests in asset management and mutual funds, life

insurance, general insurance, private equity and proprietary investments, stock broking

and other activities in financial services.

Reliance capital is a part of the Reliance Anil Dhirubhai Ambani Group. Reliance

Capital Ltd. is one of Indias leading and fastest growing private sector financial services

companies, and ranks among the top 3 private sector financial services and banking

companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management,

life and general insurance, private equity and proprietary investments, stock broking and

other financial services. Whatever your career goal, Reliance Life Insurance is a company

big enough for your dreams. We, along with the other businesses of Reliance Capital,

enjoy a strong position in the financial services category. And this may be the place where

you can have the career you always wanted.


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Product Details of Reliance Life Insurance Products:-

Individual Plans

Reliance Wealth + Health Plan

Reliance Secure Child Plan

Reliance Automatic Investment Plan

Reliance Money Guarantee Plan

Reliance Endowment Plan

Reliance Special Endowment Plan

Reliance Cash Flow Plan Reliance Child Plan

Reliance Term Plan Reliance Whole Life Plan

Reliance Market Return Plan Reliance Golden Years Plan

Reliance Golden Years Plan Value Reliance Golden Years Plan Plus

Reliance Simple Term Plan

Reliance Special Term Plan Reliance Credit Guardian Plan

Reliance Connect 2 Life Plan

Employee Benefit Plans

Group Term Assurance Policy

Reliance EDLI Scheme

Reliance Group Gratuity Policy

Reliance Group Superannuation Policy


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Automatic investment plan:-

The Key benefits of Reliance Automatic Investment Plan are as follows:

A smart plan which adapts to your changing risk profile with increasing age Option to lower the average cost of units through systematic transfer of your funds

Flexibility to switch between funds and plans

Options for additional Insurance cover available through riders

Key Features Reliance Automatic Investment Plan

Two plan options to choose from Ready-made and Tailor-made

Life Stage asset allocation to ensure automatic change in investment patterns,under the Ready-made Plan option

Freedom to decide your own fund mix based on your risk profile under the Tailor-

made Plan

Regular, limited, single premium paying options

Unmatched flexibility through our Exchange Option

Liquidity in the form of partial withdrawal

Option to avail of Accidental Death Benefit, Accidental Total, Premium Disabilityand Term Insurance riders

How does this Plan work?

As a customer you will have the liberty to choose between the Ready-made and Tailor-

made Plan options. The premium contributions made by you, net of Premium Allocation

Charges and Sum Assured Related Charges are invested in fund/funds of your choice and

units are allocated depending on the price of units for the fund/funds. The Fund Value is

the total value of units that you hold in the fund/ funds. The Mortality Charges and Policy

Administration Charges are deducted through cancellation of units, whereas the Fund

Management Charge is priced in the Unit Value.


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HDFC STANDARD LIFE INSURANCE

HDFC Standard Life Insurance is a joint venture between HDFC Limited and Standard

Life Plc of United Kingdom. It was the first private life insurance company to set shop in

India and started its operations in late 2000.

HDFC Limited is a leader in Indias housing finance industry and has been in operatio ns

since 1977. It has more than 270 offices and services more than 2400 cities across India.

The World Bank has praised HDFC as a model housing finance company for the

developing countries. The UK based Standard Life Group is an insurance and investmentindustry specialist with a history dating back to the last decade and an international

presence. It manages assets of more than 156bn pounds globally.

HDFC Standard Life Insurance alone has 568 branches and reaches out to customers in

700 cities in India. This along with the partnerships with group companies like HDFC

Bank and HDFC Limited give it an enviable reach among the private life insurance

companies. The company also has entered into tie-ups with Sarswat Bank and Indian Bank

to sell their insurance products through their network. The companys advertisement

campaign of Sar Utha ke Jiyo was a successful one which did strike a chord in the

Indian consumer minds. The company offers a healthy mix of traditional and unit linked

products which cater to protection, savings, pension, investment and health requirements

of individuals.

Amitabh Chaudhry is the Managing Director and CEO of HDFC Standard Life Insurance

Company.


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HDFC Life Insurance Plans-:

Term Insurance Plans Unit Linked Insurance Plans - ULIPs

HDFC Life Click 2 Protect Plan HDFC SL Crest

HDFC Term Assurance Plan HDFC SL Pro Growth Super II

HDFC Premium Guarantee Plan HDFC SL Pro Growth Flexi

HDFC SL Pro Growth Maximiser

Money Back Plan

HDFC New Money Back Plan Retirement Plans

HDFC Personal Pension Plan *

Endowment Plans HDFC Immediate Annuity

HDFC Endowment Assurance Plan HDFC SL Pension Maximus *

HDFC Assurance Plan

HDFC Savings Assurance Plan Whole Life Plan

HDFC Endowment Gain Insurance Plan HDFC Whole of Life Insurance - Single

Premium

HDFC ClassicAssure Insurance Plan Sampoorn Samridhi Insurance Plan

Child Plans Health Plans

HDFC Children Plan HDFC Critical Care Plan

HDFC SL Young Star Super II ULIP HDFC Surgi Care Plan

HDFC SL Young Star Super Premium ULIP

Loan Cover Plans HDFC Loan Cover Term Assurance Plan

HDFC Home Loan Protection Plan
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BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj

Finserv Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Both enjoy

a reputation of expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and Development

Authority (IRDA) certificate of Registration on 2nd May, 2001 to conduct General

Insurance business (including Health Insurance business) in India. The Company has an

authorized and paid up capital of Rs 110 crores. Bajaj Finserv Limited holds 74% and the

remaining 26% is held by Allianz, SE.

As on 31st March 2010, Bajaj Allianz General Insurance maintained its premier position

in the industry by achieving growth as well as profitability. Bajaj Allianz has made a

profit before tax of Rs. 180 crores and has become the only private insurer to cross the

Rs.100 crore mark in profit before tax in the last four years. The profit after tax was Rs.

121 crores, 27% higher than the previous year.

Bajaj Allianz today has a countrywide network connected through the latest technology

for quick communication and response in over 200 towns spread across the length and

breadth of the country. From Surat to Siliguri and Jammu to Thiruvananthapuram, all the

offices are interconnected with the Head Office at Pune.

Vision

To be the first choice insurer for customers

To be the preferred employer for staff in the insurance industry

To be the number one insurer for creating shareholder value


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Mission

As a responsible, customer focused market leader, we will strive to understand the

insurance needs of the consumers and translate it into affordable products that deliver

value for money.

A Partnership Based on Synergy

Bajaj Allianz General Insurance offers technical excellence in all areas of General and

Health Insurance as well as Risk Management. This partnership successfully combines

Bajaj Finserv's in-depth understanding of the local market and extensive distribution

network with the global experience and technical expertise of the Allianz Group. As aregistered Indian Insurance Company and a capital base of Rs. 110 crores, the company is

fully licensed to underwrite all lines of general insurance business including health

insurance.

Our Achievements

Bajaj Allianz has received iAAA rating, from ICRA Limited, an associate of Moody's

Investors Service, for Claims Paying ability. This rating indicates highest claims paying

ability and a fundamentally strong position.

Bajaj Allianz General Insurance has received the prestigious "Business Leader in General

Insurance", award by NDTV Profit Business Leadership Awards 2008. The company was

one of the top three finalists for the year 2007 and 2008 in the General Insurance

Company of the Year award by Asia Insurance Review.


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OLD MUTUAL

Old Mutual plc is an international long-term savings, protection and investment Group.

Originating in South Africa in 1845, the Group provides life assurance, asset management,

banking and general insurance to more than 15 million customers in Europe, the

Americas, Africa and Asia. Old Mutual plc is listed on the London Stock Exchange and

the Johannesburg Stock Exchange, among others. In the year ended 31 December 2010,

the Group reported adjusted operating profit before tax of 1.5 billion (on an IFRS basis)

and had 309 billion of funds under management, from core operations.


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ICICI PRUDENTIAL LIFE INSURANCE

OVERVIEW:

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one

of India's foremost financial services companies-and Prudential plc - a leading

international financial services group headquartered in the United Kingdom. Total capital

infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and

Prudential plc holding 26%. We began our operations in December 2000 after receiving

approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-

wide team comprises of over 2100 branches (inclusive of 1,116 micro-offices), over290,000 advisors; and 18 bancassurance partners.

ICICI Prudential is the first life insurer in India to receive a National Insurer Financial

Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI

Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic

Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our

distribution, product range and customer base, we continue to tirelessly uphold our

commitment to deliver world class financial solutions to customers all over India.

VISION:

To be the dominant Life, Health and Pensions player built on trust by world-class people

and service.This we hope to achieve by:

Understanding the needs of customers and offering them superior products and service.

Leveraging technology to service customers quickly, efficiently and conveniently.

Developing and implementing superior risk management and investment strategies to

offer sustainable and stable returns to our policyholders.

Providing an enabling environment to foster growth and learning for our employees.

And above all, building transparency in all our dealings.


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The success of the company will be founded in its unflinching commitment to 5 core

values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the

values describe what the company stands for, the qualities of our people and the way we

work.

We do believe that we are on the threshold of an exciting new opportunity, where we can

play a significant role in redefining and reshaping the sector. Given the quality of our

parentage and the commitment of our team, there are no limits to our growth.

VALUES:

Every member of the ICICI Prudential team is committed to 5 core values: Integrity,

Customer First, Boundaryless, Ownership, and Passion. These values shine forth in all we

do, and have become the keystones of our success.

PRODUCT DETAILS OF ICICI PRUDENTIAL LIFE INSURANCEPRODUCTS :-

Life Time Gold

Premium Life Gold

Life Stage Pension

Life Time Super Pension

Hospital Care

Life Link Super

Premier Life Pension

Invest Shield Life


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RESEARCH METHODOLOGY

TYPES OF RESEARCH:

The research includes different options. They are:

Exploratory research:

It is usually a small-scale study undertaken to define the exact nature of a problem and to

gain a better understanding of the environment within which the problem has occurred. It

is the initial research, before more conclusive research is under taken.

Descriptive research:

It is to provide an accurate picture of some aspects of market environment. Descriptive

research is used when the objective is to provide a systematic description that is as factual

and accurate as possible. It provides the number of time something occurs, or frequency,lends itself to satisfied calculations such as determining average number of occurrences.

Casual research:

If the objective is too determined which variable might be causing a certain behavior that

is whether there is a cause and effect relationship between variable, casual research must

be undertaken. In order to determine causality, it is important to hold the variable that is

assumed to cause the change in the other variable constant and than measure the changes

in the variable. This type of research is very complex and the researcher can never be

completely certain that there are no other factors influencing the casual relationship,

especially when dealing with peoples attitudes and motivation. This research is about

understanding the market stand and also find the strength & weakness of the products of

three insurance companies by making comparing analysis of the products of the


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companies, mainly descriptive research methodology are adopted. Descriptive research

was adopted since it provides accurate picture about some aspect of market environment

such as which brand is performing well and what the company can do to improve its

market share.

SAMPLING PROCEDURE

How should the respondents be chosen? To obtain a representative sample and non-

probability sample can be drawn, they are

Judgment sample:

The researcher selects population numbers who are good prospects for accurate

information. For collection of research data judgment-sampling technique is used where

all of them are employees of the three insurance companies as they are good prospect for

accurate information

ACTUAL COLLECTION OF DATA

Data sources:

The sources of data include either secondary data or primary data and even some times the

combination of both. The present study is more concentration on both primary and

secondary data.

Primary data:

Primary data is collected through face-to face interaction with employees of the insurance

companies, by meeting them in personal.

Secondary data:

The secondary data used for their study are inclusive of the data collected from the

internet, catalogues and brochures and magazines.


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COMPARATIVE ANALYSIS:


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Min to Max Age Premium Base Comparison Min to Max. term

12-60 years Endowment Plan 10-30 years

Name of the

company

HDFC SLIC LIC ICICI PRO OM KOTAK

Age of the

person

30 years 30 years 30 years 30 years

Term of thepolicy


Sum assured 1,00,000 1,00,000 1,00,000 1,00,000

Basic

premium

(without any

premium)

5,100 4,895 5,216 5,321

Returns (on

death)

S.A. + Bonus S.A. +

Accumulated

Bonus

S.A. + Bonus S.A. + Bonus

Returns (on

maturity)

S.A. + Bonus S.A. + Bonus S.A. + Bonus+

GA

S.A. + Bonus

Other

benefits

(CI),(ADB),(DSA),(

WOP)

(WOP), (ADB) (ADB),(ABR),

(CI),(MSR)

(CI),(ADB)(DS

A),(2GD), (TB)


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18-60 years Term Plan 10-30 years

Name of the

company


Age of the

person


Term of the

policy


Sum assured 1,00,000 1,00,000 1,00,000 1,00,000

Basic premium

(without anypremium)

10,300 9,324 11,809 11,237

Returns (on

death)

S.A. + Bonus S.A. +

Bonus

S.A. + Bonus S.A. + Bonus

Returns (on

maturity)

NI2 NI2 NI2 NI2

other benefits (CI),(ADB),(ASA) (WOP),

(ADB)

(ADBR),(ABR) (CI),(ADB)(PDB)


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Min to Max Age of Child 0-17 Premium Base Comparison Min to Max. term

Min to Max Age of Policy Holder Children Policy 10-30 years

12-60 years

Name of thecompany


Age of the Child 6 years 6 years 6 years 6 years

Term of the policy 15 years 15 years 15 years 15 years

Sum assured 1,00,000 1,00,000 1,00,000 1,00,000

Basic premium

(without any

premium)

7,500 6,380 7,991 7,620

Returns (on death) Future premium

waived and

Policy continue

till maturity

Future

premium

waived and

Policy continuetill maturity

Future premium

waived and sum

assured

immediatelyafter the death

Future premium

waived and Policy

continue till maturity

Returns (on

maturity)

Sum assured+

Bonus

Return after 2-

2 years

gap 20 % -

20%-30% -

30% and Bonus

Return after 2-2

years gap on

maturity S.A.+

Bonus

Sum assured+ Bonus

Other benefits (ADB,(WOP) (PWP), (TRB) (ADB),(IBR),

(ABR),(WOP)

(LGB),(ADB),(WO

P)


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12-60 years Money Back Policy 10-30 years

Name of the

company

HDFC SLAIC LIC ICICI PRO OM KOTAK

Age of the

person


Term of the

policy


Sum assured 1,00,000 1,00,000 1,00,000 1,00,000

Basic

premium

(without any

premium)

7,585 6,380 7,019 6,040

Returns (on

death)

S.A. + Bonus S.A. + Bonus S.A. + Bonus S.A. + Bonus

Returns (on

maturity)

Return after 5-5

years

For 20 Years

Policy 20%-20%

and 20% alte 5-5

years gap+ Bonus

Return after 5-

5 years

For 20 Years

Policy 20%-

20% and 20%

alte 5- 5 years

gap+ Bonus

In 20 years

Policy returns

after 4-4

years gap.

1st year-10%

2nd year-15%

3rd year-20%

4th year-25%

On maturity-

Return after 5-5

years

For 20 Years

Policy 20%-20%

and 20% alte 5-5

years gap+ Bonus


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50%+ Bonus

Other

benefits

(CI),(ADB),(DSA)

,(WOP)

(WOP),

(ADB)

(ADB),(DAB

), (CI),(MSR)

(CI),(ADB),(PDB)

, (2GD)


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FINDINGS AND INTERPRETATIONS

We have presented below the findings and analysis of the questionnaire addressed to

the respondents to gauge the attitude and perception of the people towards insurance.

Respondents having life Insurance

The question was asked to the respondents to know how many of the respondents had

a life insurance policy.

From the survey it was found out that 85% of the respondents had a life insurance

policy whereas 15% of the respondents didnt had a life insurance policy.


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Insurance policy taken from which company

The question was asked to the respondents so as to get to know from which insurance

company they have bought the policy?

The finding which came out from the survey was that 40% of the respondents who have

a life insurance cover bought life insurance from Life Insurance Corporation of India

(LIC). LIC is the most preferred brand in the insurance industry because it is the onlygovernment company which offers insurance. People prefer to buy insurance from LIC

because of the security being one of the prime factors. In the figure we can also see

that nowadays people mindset have changed towards insurance and are opting for

private company for insurance cover or policy.


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PREFERENCE OF INSURANCE SECTOR ACCORDING TO AGE

GROUP

AGE GROUP BEYOND 40


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PIE CHART


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AGE GROUP BETWEEN 25 40


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PIE CHART


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RESULTS

After the survey it was found that still major portion of customers go for public insurance

companies, but with the entry of more and more private companies the scenario ischanging rapidly, people with a need of more and better returns are opting for private

companies, and this can be justified by the increasing market share of private companies

in the Indian insurance sector.There are various ways in which private companies are

found much more lucrative than public companies and the facts which support this

statement are as follows:-

1. Versatility of products.

2. Efficient fund managers.3. Better customer services.

4. More returns.

5. Regular follow up.

6. Quicker settlement

SUGGESTIONS AND RECOMMENDATIONS

People are not aware of the life insurance. Most of them know only one companywhich provides life insurance i.e. LIC. So awareness campaign should be run so that

people are aware of different life insurance companies in India.

People should be educated about the different types of products or plans offered by

the life insurance companies. Most of the m dont know much of the different types of

plan or products.

It was felt that most of the people took life for tax savings or just to cover up their

life, not as an investment avenue. Life Insurance companies need to advertise in

such a manner that people start investing in life insurance like the way they invest in

the stock market

Now at the time of global turmoil insurance company had to hold on to the

Policyholders trust which might lead the company to the path of success.


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ROLE OF LIFE INSURANCE

Role 1 : Life Insurance as INVESTMENT

Insurance is an attractive option for investment. While most people recognize

thetax hedging and tax saving potential of life insurance, many

are not aware of its advantages as an investment option as well

as. Insurance products yield more compared to regular

investment option as this is besides the added incentives (read

bonuses) offered by insurers.You cannot compare an insurance

product with other investment schemes for simple reason that it

offers financial protection from risks, something that is the

missing in non- insurance products. Infact, the premiu m you

pay for a investment against risk. Thus, before comparing with other scheme, you must

accept that a part of total amount invested in life insurance goes towards providing for the

risk cover, while the rest is used for savings. In life insurance, unlike non-products, you

get maturity benefits on survival at the end of the term. In other words, if you take a life

insurance policy for 20 years and survive the term the

amount investor as premium in the policy will come

back to you with added returns. In the unfortunate event

of death within the tenure of the policy, the family of the

deceased will receive the sum assured. Now, let us

compare insurance as an investment o options. If you

invest Rs. 10000/- in PPF, year money grows to Rs. 10950 at 9.5% interest over a year.

But in this case, the access to your funds will be limited. One can withdraw 50% of the

initial deposit only after four years. The same amount of Rs. 10000/- can give you an

insurance cover of upto approximately Rs. 5 to 12 lacs. ( depending upon the plan, age

and medical condition of life insure etc. ) and this amount can become immediately

available to the nominee of the policy holder on death.Thus insurance is a unique

investment avenue that delivers sound returns in addition to protection.


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Role 2 : Life Insurance as RISK COVER

First and foremost, insurance is about risk cover and protection financial

protection, to be more presize-to help out last once unpredictable losses. Designed to safe

guard against losses suffered on account of an unforeseen even ts. Insurance provide youwith that uniqueness sense of security that no other form of investment provides. By

buying life insurance, you buy peace of mind and are prepared to face any financial

demand that would hit the family in case of an untimely demise. To provide such

protection, insurance firms collect contributions for many people who face the same risk.

A loss claim is paid out of the total premium collected by the insurance companies, who

act as trustees to the moneys. Insurance also provides a safeguard in the case of accident

or a drop in income after retirement. An accident or disability can be devastating and aninsurance policy can lend timely support to the family in such time. It also comes as a

great help when you retire, in case untoward incident happens during the term in the

policy. With the entry of private sector player in insurance, you have a wide range of

products and services to choose from. Further, many of these can be further customized to

fit individual/group specific needs considering the amount you have to pay now, its worth

buying some extra sleep.

Role 3 : Life Insurance as TAX PLANNING

Insurance serves as an excellent tax saving mechanism too. The Govt. of India have

offered tax incentives to life insurance products in order to facilitate the flow of funds into

productive assets. U/S 88 of Income Tax Act 1961, an individual is entitled to rebate 20%

on the annual premium payable on his/her life and life of his/her children or adult

children. The rebate is reductible from tax payable by a individual or Hindu undivided

family. This rebate is can be availed upto a maximum of Rs 12000/- on payment of yearlypremium of Rs 60000/- a year, you can buy anything upward of Rs 100000/- in sum.

assured. This means that you get Rs 12000/- tax benefit. This rebate is deductible from the

tax payable by an individual or a Hindu undivided family


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LIMITATIONS

Useful Financial insights are not easily available.

Due to time constraint sufficient research on all the investment tools is difficult.

The survey sample is not very large for analysis.

Properly convincing people to invest in insurance products is challenging.

Due to recession there is liquidity crunch in the market.

There might have been tendencies among the respondents to amplify or filter

their responses under the testing conditions.

The research is confined to Kolkata and does not necessarily shows a pattern

applicable to other parts of the country.


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FUTURE SCENARIO:-

Before looking in future prospectus of the insurance industry, we must take a look into its

past history. The independent India

started with private sector Insurance

companies. These companies were

nationalized by the union govt in

1956 to form a monopoly known

as Life Insurance Corporation of

India has being under public sector

for over four decades till the govt.

opened the insurance sector for

private companies in 2000.

When the insurance Industry was

nationalized, it was consider a land mark and a milestone on the way to the socialistic

pattern of society that India had chosen after independence. Nationalization has lent the

industry solidity and growth which is unparalleled. Forever, along with theseachievements there also grew a feelings of insensitivity to the needs of the market,

traditions in adoption of modern practices to upgrades technical skills coupled with a

scene of lethargy which probably led to a feeling amongst that the insurance industry was

not fully responsive to customers needs.

The life insurance corporation of India has not succeeded in extending the insurance cover

to all the needy people of the country due to various reasons. LIC could not insure very

fast growth of insurance in India even in a long period extending over four decades. Hence

the penetration of insurance is very low in India.


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The following indicates as explained and support this contention:

1. While per capita insurance premium in developed country is high, it is quite low in India.

For instance, per capital insurance premium in India in 1999 was only $8 while it was

$4800 for Japan $1000 for Republic of Korea ,$887 for Singapore, $823 for Hong-Kong

and $144 for Malaysia.

2. Similarly the penetration of insurance is also assessed by the ratio of Insurance premium

to gross domestic products in a country. While insurance premium as a percentage of GDP

was 14 % in Japan, 13% for South-Africa, 12% for Korea, 9% for UK and France. It wasonly around 2% in India in 1999. hence the penetration of insurance is low here.

3. The penetration of Insurance is also assessed by a ratio of Insurance premium to gross

domestic savings (GDS). While insurance premium as a percentage of GDS was 52% for

UK, 35 % for other European and American countries, it was only 9% in India in 1999.

Hence even this index indicates low level of penetration of insurance in India.

4. The share of India in the world market in terms of gross insurance premium is again very

small. For instance while Japan has 31%, European union 25%, South Africa 2.3%,

Canada 1.7% share of global insurance premium is only 0.3% for India.


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CONCLUSION

The financial markets have continued to witness

unprecedented liberalization, growth and reforms

over the last decade prompted by regulatorycompulsions and a rapid integration between

domestic and global markets. And as a result, one has

seen substantial growth in the number of financial

firms (insurance companies, mutual funds,

brokerages, banks etc.) and in the number and variety

of financial products and services offered by them.

As the need of the people is changing so is changing the investment habits of the people

and this has brought in a spate of new products and schemes where people can invest. The

concept of insurance as an investment option has arrived where people first identify the

varying needs of money then converts the needs into specific amount of money and time

required to achieve the objective of investments plans.

The objective of insurance as an investment is to ensure that investments are driven by pre

determined and well thought out investment plan and that the investments are suitable and

adequate to meet these plans. But for this the

planner must understand the universe of

investments options. He/she must be well

informed on the risk and return attributes of

these options. In addition to the above,

companies should also innovate to come up with

better products that would suit the Indian

population and should also try to market and sell

their products through new channels of

distribution that can be effective in selling their

products to the masses.


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People should identify their needs and then

decide on the type of policy they want to

invest in insurance is a good investment

option for those people who do not know

where to invest and who do not want to the

risk of capital erosion. But, people who are

financially savvy can opt for term insurance

and invest the rest in other options that may

give them higher returns.

Insurance is one sector that witnessed continuous growth owing to the reforms in 2000.

The insurance sector is likely to attain a size of Rs. 2,00,000 crore ($ 51.2 billion) in 2009-2010. In life insurance, the business grew by 23.3% to Rs. 93,000 crore in 2007-08.The

sector alone employs close to 30 lakh people (including agents and direct employees).A

well-functioning insurance market plays an important role in economic development and

financial stability of developing economies such as Indias. First, it inculcates and

encourages the habit of saving. Second, it provides a safety net to rural and urban

enterprise and productive individuals. The life insurance market in India is on a growth

path. In spite of this, the country lags far behind the others in awareness about lifeinsurance. The challenge is to spread awareness about life insurance and it true benefits.

The industry has to convince people to park their hard earned money in long-term

insurance

and not

just look

at it as a

tax savinginstrument

.


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BIBLIOGRAPHY

REFERENCES:

BOOKS:

Life and Health Insurance Kenneth Black and Harold D.

Fundamental of Risk and Insurance- Emmet J Vaughan and John Willy

WEBSITES :

www.lic.co.in

www.wikipedia.com www.tata-aig-life.com

www.birlasunlife.com

www.irdaindia.org

www.google.com

www.wikipedia.com
http://www.lic.co.in/http://www.wikipedia.com/http://www.tata-aig-life.com/http://www.birlasunlife.com/http://www.irdaindia.org/http://www.google.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.google.com/http://www.irdaindia.org/http://www.birlasunlife.com/http://www.tata-aig-life.com/http://www.wikipedia.com/http://www.lic.co.in/

A Comparative Study on the Offerings of Insurance Products

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