Dilip Singh Chouhan Project Report

8/9/2019 Dilip Singh Chouhan Project Report

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A PROJECT REPORT

ON

RELIANCE LIFE INSURANCE

company

Submitted in partial fulfillment of the requirement of Masters degree

Submitted By:-

Dilip Singh Chouhan

Session 2010-2011


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ACKNOWLEDGEMENT

First things first, I would like to thank God who

showered blessings on me all the way while I was

working on this report.

It was really great to have worked with RELIANCE LIFE

INSURANCE COMPANY. I thank her for providing me

with an opportunity to work with the organization,

providing me a personal exposure to the functioning of

the organization.

I express my deep sense of gratitude to my parents,

relatives and friends for making available their valuable

suggestions from time to time.


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CERTIFICATE

This is to certify that Mr. Dilip Singh Chouhan has

proceeded under by supervision his/her Research Project

Report on RELIANCE LIFE INSURANCE

The work embodied in this report is original and is of the

standard expected of an Masters degree student and has

not been submitted in part or full to this or any other

university for the award of any degree diploma. He has

completed all requirements of guidelines for project

report and the work is fit for evaluation.


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EXECUTIVE SUMMARY

Anil Dhirubhai Ambani Group (ADAG) announces the acquisition of

100 percent shareholding in AMP Sanmar Life Insurance Company

Limited. Reliance Life Insurance Company Limited is officially

launched on February 1, 2006. This was after obtaining the required

regulatory approvals from the Registrar of Companies and the

Insurance Regulatory and Development Authority. Reliance Life

Insurance is the part of the Reliance Capital. Reliance Life Insurance

has plenty of plans on the anvil. It has also 118 branches, with strong

presence in South and a bouquet of products catering savings

protection and investment need of individuals and corporate. The

head-office of it is at Chennai. The company has already added 600

employees in addition to the 1000 plus staff of the erstwhile AMP

Sanmar Life Insurance Company Limited. Reliance Life Insurance

aims to be the consumers preferred life insurer by understanding and

meeting his needs.

Think Bigger, Think Better!


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INDEX

CHAPTER NO SUBJECT PAGE NO.

1. INSURANCE INDUSTRY 62. INTRODUCTION TO THE 28

COMPANY

3. PRODUCT MIX 38

4. HUMAN RESOURCE MANAGEMENT 52

5. MARKETING DEPARTMENT 60

6. RESEARCH METHODOLOGY 73

7. FINANCE DEPARTMENT 90

8. CONCLUSION 93

9. BIBLIOGRAPHY AND REFRENCES 94


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CHAPTER 1 INSURANCE INDUSTRY

MEANING OF INSURANCE

Insurance may be described as a social device to reduce or eliminate

risk of loss to life and property. Insurance is a collective bearing of

risk. Insurance is a financial device to spread the risks and losses of

few people among a large number of people, as people prefer small

fixed liability instead of big uncertain and changing liability.

Insurance can be defined as a legal contract between two parties

whereby one party called insurer undertakes to pay a fixed amount of

money on the happening of a particular event, which may be certain or

uncertain. The other party called insured pays in exchange a fixed

sum known as premium. Insurance is desired to safeguard oneself and

ones family against possible losses on account of risks and perils. It

provides financial compensation forth losses suffered due to the

happening of any unforeseen events.


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IMPORTANCE OF INSURANCEInsurance constitutes one of the major segments of the financial

market.

Insurance services play predominant role in the process of financial

Intermediary. Today insurance industry is one of the most growing

sectors in India. There is lot of potential in the Indian Insurance

Industry.

There are many issues, which require study. The scope of the study of

insurance industry of India would be very great as there are ongoing

developments in the industry after the opening of the sector.

The major issue right now is the hike in FDI (Foreign Direct

Investment)

limit from 26% to 49% in the insurance sector. Government may in

near future allow 49% FDI in Insurance. This would lead to more

capital inflow by foreign partners.

Another major issue is the effects on LIC after the entry of private

players in the market. Though market share of LIC has been affected,

it has improved in terms of efficiency. There are number of other hot


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topics like penetration of Health Insurance, Rural marketing of

insurance, new distribution channels, new product ranges, insurance

brokers regulation, incentive scheme of development officers of LIC

etc. So it offers lot of scope for studying the insurance industry.

Right now the insurance industry has great opportunities in a country

like India or China which huge population. Also the penetration of

insurance in India is very low in both life and non-life segment so

there is lot potential to be tapped. Before starting the discussion on

insurance industry and related issues, we have to start with the basics

of insurance. So first we understand what is insurance? How the

wordinsuranceis different from the wordassurance? Etc.


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DIFFERENCE BEETWEN INSURANCE

AND ASSURANCE

Assurance is older in history and it was used to describe all types of

insurances. From 1826, the term assurance came to be used only for

the risks covered by life insurance and the term insurance was

exclusively used to denote the risks covered by marine, fire, etc.The

word assurance indicated certainty. In life insurance, there is an

assurance from the insurance company to make payment under the

policy either on the maturity or at earlier death. On the other hand the

word insurance was used to denote indemnity type of insurances

where the insurance company was liable to pay only in case of the loss

damage the property.

The insured event was bound to happen sooner or later under

assurance but the event insured against may or may not happen under

insurance. The principle of indemnity applies to insurance

contracts(non-life) only. The scope of the word, insurance is wider.


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PRINCIPLES OF INSURANCE An insurance contract is based on some basic principles of insurance.

(1) Principle of Uberrima Fides or Principle of utmost good

Faith -It means maximum truth. Both the parties should disclose all

material information regarding the subject matter of insurance.

(2) Principle of indemnity-This means that if the insured suffers a

loss against which the policy has been made, he shall be fully

indemnified only to the extent of loss. In other words, the insured is

not entitled to make a profit on his loss.

(3) Principle of subrogation-This means the insurer has the right to

stand in the place of the insured after settlement of claims in so far as

the insureds right of recovery from an alternative source is involved.

The insurer before the settlement of the claim may exercise the right.

In other words, the insurer is entitled to recover from a negligent third

party any loss payments made to the insured. The purposes of

subrogation are to hold the negligent person responsible for the loss


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and prevent the insured from collecting twice for the same loss. The

concept of Third Party Claims is based on the same principle.

(4) Principle of causa proxima-The cause of loss must be direct and

an insured one in order to claim of compensation.

(5) Principle of insurable interest-The assured must have insurance

interest in the life or property insured. Insurable interest is that interest

which considerably alters the position of the assured in the event of

loss taking place and if the event does not take placed, he remains in

the same old position.


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HISTORY OF INSURANCE

The concept of insurance is believed to have emerged almost 4500

years ago in the ancient land of Babylonia where traders used to bear

risk of the carvan by giving loans, which were later repaid with

interest when the goodsarrived safely.The concept of insurance as we

know today took shape in 1688 at a placecalled Lloyds Coffee House

in London where risk bearers used to meet to transact business. This

coffee house became so popular that Lloyds became the one of the

first modern insurance companies by the end of the eighteenthcentury.

Marine insurance companies came into existence by the end of the

eighteenth century. These companies were empowered to write fire

and life insurance as well as marine. The Great Fire of London in 1966

caused huge loss of property and life. With a view to providing fire

insurance facilities, Dr. Nicholas Barbon set up in 1967 the first fire

insurance company known as the Fire office. The early history of

insurance in India can be traced back to the Vedas. The Sanskrit term

Yogakshema (meaning well being), the name of Life Insurance

Corporation of Indias corporate headquarters, is found in the Rig

Veda. The Aryans practiced some form of community insurance


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around 1000 BC.

Life insurance in its modern form came to India from England in

1818. The Oriental Life Insurance Company was the first insurance

company to be setup in India to help the widows of European

community. The insurance companies, which came into existence

between 1818 and 1869, treated Indian lives as subnormal and charged

an extra premium of 15 to 20 per cent. The first Indian insurance

company, the Bombay Mutual Life Assurance Society, came into

existence in 1870 to cover Indian lives at normal rates. The Insurance

Act, 1938, the first comprehensive legislation governing both life and

non-life branches of insurance were enacted to provide strict state

control over insurance business..

By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers,

and75 provident societies carrying on life insurance business in India.

Insurance business flourished and so did scams, irregularities and

dubious investment practices by scores of companies. As a result the

government decided to nationalize the life assurance business in India.

The Life Insurance Corporation of India (LIC) was set up in 1956.


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TIME LINE IN INSURANCE HISTORY (MAJOR

LANDMARKS1818-British introduced the life insurance to India with the

establishment of the Oriental Life Insurance Company in Calcutta.

1850-Non life insurance started with Triton Insurance Company.

1870-Bombay Mutual Life Assurance Society is the first India owned

life insurer.

1912-The Indian Life Assurance Company Act enacted to regulate the

life insurance business.

1938-The Insurance Act was enacted.

1956- Nationalization took place. Government took over 245 Indian

and foreign insurers and provident societies.

1972- Non-life business nationalized, General Insurance

Corporation (GIC) came into being.


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1993-Malhotra committee was constituted under the chairmanship of

former RBI chief R. N. Malhotra to draw a blue print for insurance

sector reforms.

1994-Malhotra committee recommended reentry of private players.

1997-IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurance market in

India.

2000-IRDA started giving license to private insurers. ICICI

Prudential, HDFC were first private players to sell Insurance Policies.

2001- Royal Sundaram was the first non-life private player to sell an

insurance policy.

2002 - Bank allowed selling insurance plans as TPAs enter the scene,

insurers start setting non-life claims in the cashless mode.


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MEANING OF LIFE INSURANCE

There are three parties in a life insurance transaction: the insurer, the

insured, and the owner of the policy (policyholder), although the

owner and the insured are often the same person. Another important

person involved in a life insurance policy is the beneficiary. The

beneficiary is the person or persons who will receive the policy

proceeds upon the death of the insured. Life insurance may be divided

into two basic classes term and permanent.

Term life insurance provides for life insurance coverage for a

specified term of years for a specified premium. The policy does not

accumulate cash value.

Permanent life insurance is life insurance that remains in force until

The policy matures, unless the owner fails to pay the premium when

due.

Whole life insurance provides for a level premium, and a cash value

table included in the policy guaranteed by the company. The primary

advantages of whole life are guaranteed death benefits; guaranteed


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cash values, fixed and known annual premiums, and mortality and

expense charges will not reduce the cash value shown in the policy.

Universal life insurance (UL) is a relatively new insurance product

intended to provide permanent insurance coverage with greater

flexibility in premium payment and the potential for a higher internal

rate of return. A universal life policy includes a cash account.

Premiums increase the cash account. If you want insurance protection

only, and not a savings and investment product, buy a term life

insurance policy. If you want to buy a whole life, universal life, or

other cash value policy, plan to hold it for at least 15 years. Canceling

these policies after only a few years can more than double your life

insurance costs. Check the National Association of Insurance

Commissioners website (www.naic.org/cis) or your local library for

information on the financial soundness of insurance companies.


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HISTORY OF LIFE INSURANCE

Risk protection has been a primary goal of humans and institutions

throughout history. Protecting against risk is what insurance is all

about.

Over 5000 years ago, in China, insurance was seen as a preventative

measure against piracy on the sea. Piracy, in fact, was so prevalent,

that as a way of spreading the risk, a number of ships would carry a

portion of another ship's cargo so that if one ship was captured, the

entire shipment would not be lost. In another part of the world, nearly

4,500 years ago, in the ancient land of Babylonia, traders used to bear

risk of the caravan trade by giving loans that had to be later repaid

with interest when the goods arrived safely. In 2100 BC, the Code of

Hammurabi granted legal status to the practice. It formalized concepts

of bottomry referring to vessel bottoms and respondentia referring

to cargo. These provided the underpinning for marine insurance

contracts. Such contracts contained three elements: a loan on the

vessel, cargo, or freight; an interest rate; and a surcharge to cover the

possibility of loss. In effect, ship owners were the insured and lenders

were the underwriters.


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Life insurance came about a little later in ancient Rome, where burial

clubs were formed to cover the funeral expenses of its members, as

well as help survivors monetarily. With Rome's fall, around 450 A.D.,

most of the concepts of insurance were abandoned, but aspects of it

did continue through the Middle Ages, particularly with merchant and

artisan guilds. These provided forms of member insurance covering

risks like fire, flood, theft, disability, death, and even imprisonment.

During the feudal period, early forms of insurance ebbed with the

decline of travel and long-distance trade. But during the 14th to 16th

centuries, transportation, commerce, and insurance would again

reemerge.

Insurance in India can be traced back to the Vedas. For instance,

yogakshema, the name of Life Insurance Corporation of India's

corporate headquarters, is derived from the Rig Veda. The term

suggests that a form of "community insurance" was prevalent around

1000 BC and practiced by the Aryans. And similar to ancient Rome,

burial societies were formed in the Buddhist period to help families


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build houses, and to protect widows and children.

Modern Insurance

Illegal almost everywhere else in Europe, life insurance in England

was vigorously promoted in the three decades following the Glorious

Revolution of 1688. The type of insurance we see today owes its roots

to 17th century England. Lloyd's of London, or as they were known

then, Lloyd's Coffee House, was the location where merchants, ship

owners and underwriters met to discuss and transact business deals.

While serving as a means of risk-avoidance, life insurance also

appealed strongly to the gambling instincts of England's burgeoning

middle class. Gambling was so rampant, in fact, that when newspapers

published names of prominent people who were seriously ill, bets

were placed at Lloyds on their anticipated dates of death. Reacting

against such practices, 79 merchant underwriters broke away in 1769

and two years later formed a New Lloyds Coffee House that

became known as the real Lloyds. Making wagers on people's

deaths ceased in 1774 when parliament forbade the practice.


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Insurance moves to America

The U.S. insurance industry was built on the British model. The year

1735 saw the birth of the first insurance company in the American

colonies in Charleston, SC. The Presbyterian Synod of Philadelphia in

1759, sponsored the first life insurance corporation in America for the

benefit of ministers and their dependents. And the first life insurance

policy for the general public in the United States was issued, in

Philadelphia, on May 22, 1761. But it wasn't until 80 years later (after

1840), that life insurance really took off in a big way. The key to its

success was reducing the opposition from religious groups.

In 1835, the infamous New York fire drew people's attention to the

need to provide for sudden and large losses. Two years later,

Massachusetts became the first state to require companies by law to

maintain such reserves. The great Chicago fire of 1871 further

emphasized how fires can cause huge losses in densely populated

modern cities. The practice of reinsurance, wherein the risks are

spread among several companies, was devised specifically for such

situations. With the creation of the automobile, public liability

insurance, which first made its appearance in the 1880s, gained


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importance and acceptance? More advancement was made to

insurance during the process of industrialization. In 1897, the British

government passed the Workmen Compensation Act, which made it

mandatory for a company to insure its employees against industrial

accidents.

During the 19th century, many societies were founded to insure the

life and health of their members, while fraternal orders provided low-

cost, members- only insurance. Even today, such fraternal orders

continue to provide insurance coverage to members, as do most labor

organizations. Many employers sponsor group insurance policies for

their employees, providing not just life insurance, but sickness and

accident benefits and old-age pensions. Employees contribute a certain

percentage of the premium for these policies.


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Final Thoughts

Even though the American insurance industry was greatly influenced

by

Britain, the US market developed somewhat differently from that of

the

United Kingdom. Contributing to that was America's size; land

diversity and the overwhelming desire to be independent. As America

moved from colonial outpost to an independent force, from a farming

country to an industrial nation, the insurance business developed from

a small number of companies to a large industry. Insurance became

more sophisticated, offering new types of coverage and diversified

services for an increasingly complex country.


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KEY FEATURES OF LIFE INSURANCE

1) Nomination: - When one makes a nomination, as the policyholder

you continue to be the owner of the policy and the nominee does not

have any right under the policy so long as you are alive. The nominee

has only the right to receive the policy monies in case of your death

within the term of the policy.

2) Assignment: - If your intention is that your policy monies should

go only to a particular person, you need to assign the policy in favor of

that person.

3) Death Benefit: - The primary feature of a life insurance policy is

the death benefit it provides. Permanent policies provide a death

benefit that is guaranteed for the life of the insured, provided the

premiums have been paid and the policy has not been surrendered.

4) Cash Value: - The cash value of a permanent life insurance policy

is accumulated throughout the life of the policy. It equals the amount a

policy owner would receive, after any applicable surrender charges, if


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the policy were surrendered before the insured's death.

5) Dividends: - Many life insurance companies issue life insurance

policies that entitle the policy owner to share in the company's

divisible surplus.

6) Paid-Up Additions: - Dividends paid to a policy owner of a

participating policy can be used in numerous ways, one of which is

toward the purchase of additional coverage, called paid-up additions.

7) Policy Loans: - Some life insurance policies allow a policy owner

to apply for a loan against the value of their policy. Either a fixed or

variable rate of interest is charged. This feature allows the policy

owner an easily accessible loan in times of need or opportunity.

8) Conversion from Term to Permanent: - When in need of

temporary protection, individuals often purchase term life insurance. If

one owns a term policy, sometimes a provision is available that will

allow her to convert her policy to a permanent one without providing


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additional proof of insurability.

9) Disability W

aiver of Premium:-Waiver of Premium is an option

or benefit that can be attached to a life insurance policy at an

additional cost. It guarantees that coverage will stay in force and

continue to grow.


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BENEFITS OF LIFE INSURANCE

1) Risk cover: - Life Insurance contracts allow an individual to have

a risk cover against any unfortunate event of the future.

2) Tax Deduction: - Under section 80C of the Income Tax Act of

1961 one can get tax deduction on premiums up to one lakh rupees.

Life Insurance policies thus decrease the total taxable income of an

individual.

3) Retirement Planning: - What had provided protection against the

financial consequences of premature death may now be used to help

them enjoy their retirement years. Moreover the cash value can be

used as an additional income in the old age.

4) Educational Needs: - Similar to retirement planning the cash

values that flow from ones life insurance schemes can be utilized for

educational needs of the insurer or his children.


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CHAPTER 2 - INTRODUCTION TO THE COMPANY

ABOUT RELIANCE LIFE INSURANCE

` Reliance Life Insurance Company Limited is a part of Reliance

Capital Ltd.of the Reliance - Anil Dhirubhai Ambani Group. Reliance

Capital is one of Indias leading 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 has

interests in asset management and mutual funds, stock broking, life

and general insurance, proprietary investments, private equity and

other activities in financial services Reliance Capital Limited (RCL) is

a Non-Banking Financial Company (NBFC) registered with the

Reserve Bank of India under section 45-IA of the Reserve Bank of

India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing

financial services sector in India and aims to become a dominant

player in this industry and offer fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital

Limited to offer need based Life Insurance solutions to individuals and


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Corporate.

HISTORY

Reliance Capital Limited announced the launch of its life insurance

business on February 1, 2006. This was after obtaining the required

regulatory approvals from the Registrar Of Companies and the

Insurance Regulatory and Development Authority.

It was in August 2005 that the ball was set rolling when Reliance

Capital Limited, the financial arm of Reliance Anil Dhirubhai

Ambani Group (ADAG) announced the requisition of 100%

shareholding in AMP Sanmar Life Insurance Company Limited; and

the formal transfer of shares took place in October 2005. The company

will issue all policy contracts under the Reliance Life Insurance

Company limited name. All the existing policy contracts also stand

transferred to the Reliance Life Insurance entity with all the original

contractual terms and commitments intact.


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2.3 JOURNEY SO FAR

2005August: Anil Dhirubhai Ambani Group (ADAG) announces

the acquisition of 100 percent shareholding in AMP Sanmar Life

Insurance Co Ltd.

2006 January 17: Mr. Nandgopal participates in a one-day

conference onOptimising growth opportunities through Distribution

Matrix: Emerging Banc assurance organized by the Asia Insurance

Post at the Taj President, Mumbai.

February 1: Reliance Life Insurance officially launched.

February 16, 17, 18: Strategy meet at the Reliance Management

Institute. Amongst those who participate are the CEO, COO,

Functional Heads, Regional Managers and Regional Sales Managers.

February 26: A Puja held at the Church gate office situated in

Express Building, 4 Floor, 14 E Road, Mumbai.


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March 1: Church gate office inaugurated by Mr. Amitabh

Jhunjhunwala, Mr. Amitabh Chaturvedi and Mr. Nandgopal.

March 6: Shifting to the new premises at Church gate commences.

March 7: The new office at Chennai, at the Trapezium, First Floor,

#39, Nelson Manickam Road, inaugurated by their CEO Mr.

Nandgopal, Mr. KV Srinivasan and Mr. Sureshbabu also graced the

occasion.

ROLE OF IT AT RELIANCE LIFEINSURANCE

1) World Class DataCentre:

They plan to establish a Primary Data Centre at Navi Mumbai

(Dhirubhai Ambani Knowledge City) which will cater to their

company

needs across India, with fail-over capability to their Chennai Data

Centre

within the same business day in occurance if an incident or Disaster

happens.

2) Inter Office Connectivity: -

All their Branch / Area and Regionaloffices will be


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interconnected to their Data Centre with a 24x7 access to Core

Applications like Lotus Mail, Life-Asia and Internet Applications.

This

will enable their associates to work faster and better with high-speed

Internet connectivity and also ensure faster Turn around Time for their

customers.

3) Customer Care Centre: -

They will host a centralized Customer Care Centre at Dhirubhai

Ambani Knowledge City at Navi Mumbai, which cater services to

internal and external queries and complications. A customer

Relationship Management Tool (CRM) and Lead Management

System

(LMS) are in progress.

4) Web Portal: -

This portal will be an interface between both internal employees

and their external users. Some of the functions included in their portal

are Policy Tracking Systems, Corporate News, Quality Checking


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System, Under Writing Medical System, and Agent Management

System etc.

5) R World: -

Reliance Mobile R-World will provide online information about

their Company, Products, and Policy Services to their existing

customers, Agents/Advisors and Lead Generators.

6) SMS Alerts: -

SMS Alerts will be provided to their Sales Managers about the

latest happenings like Contests and Campaigns, Employee Alerts will

include Company News and Welcome/Birthday/Anniversary message

etc. Customer Alerts will include Welcome/Birthday/Anniversary

message, Policy Dispatch Details, Policy Servicing SMS like Premium

Receipt and Renewal Premium reminders etc.

7) Life and Group Asia: -

Single Life and Group Life details will be captured and managed

by Life and Group Asia. A common middleware between these


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applications will enable Group Life Customers to view their individual

Single Life Insurance Plan details taken with Reliance Life Insurance

and vice versa.

8) Advisor Lounge: -

It is a dedicated area for Reliance Life Insurance Agents/Advisors

in all the branches across India. This Lounge will be equipped with

desktops and printers with Internet connectivity, where their Advisors

can bring in the prospects and can have discussions acros s the table

and they can create and print quotes. The Agents/Advisors can use this

area to service their existing customers DMS will enable both policy

issuance and contract servicing through an automated workflow,

which yields a faster turnaround Time to both internal and external

users. This application will enable them to have a paperless office and

thus mitigate the risk of losing vital records/papers.

10) Wireless Data Access: -

This will enable identified Top Sales Managers and Top Advisors

to access real time data for both LMS and CRM on the fly through


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Handheld PDA device.

11) SAP ERP Modules:

SAP (Finance and HR Modules), will automate the Expense,

Travel and Leave Management Systems.

2.5 MISSION

The mission of Reliance Life Insurance Company Limited is to be the

best in every sphere- business results, customer care and employee

focus. The aim of the company is to Think Bigger and Think Better.

2.6 CORE VALUES

Reliance Life Insurance Company Limited has some core values

which are listed as follows:

9) Document Management System: -1) Result Oriented


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2) Performance Driven

3) Customer Focused

4) Learning and Development Oriented

5) Employee Centric

6) Informal and Fun

2.7 FUTURE PLANS

Forty-four new branches to be opened across the country in the

coming months; and a pan India presence with 162 branches in the

coming year.

A state-of-the-art customer care centre will provide continuous,

Responsive services to the caller and promptly address queries, collate

feedback and suggestions from the caller, who may be both

Prospective and existing clientele and from channel partners in

Chennai and Mumbai. It will be launching additional products aimed

at providing unparalleled service to its valued clientele.


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2.8 HEAD OFFICE

Reliance Life Insurance Company Limited,

The Trapezium,

39, First Floor,

Nelson Manickam Road,

Chennai 600 029.

2.9 BRANCHES

They have so many branches and substations in the India. They have

around 160 branches in the India. And they have planned to open more

branches across the country in the coming months.


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CHAPTER NO. 3- PRODUCT MIX

TRADITIONAL PLAN:-

Life insurance products are designed to suit the requirements of

customers. Fundamentally the product provide for:

Risk cover

Investment

Health cover

In every product, to a certain degree, risk cover is imperative for

it to fall under the category of insurance. Based on the coverage of the

Product, the premiums are calculated and the customer pays

accordingly. In order to suggest the right product, it is essential for an

agent to understand the requirements of the customer well. Reliance

Life Insurance Company Limited has offered 8 traditional plans to the

customers, which are listed as follows:

1) Reliance Term Plan

2) Reliance Whole Life Plan


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3) Reliance Child Plan

4) Reliance Endowment Plan

5) Reliance Special Endowment Plan

6) Reliance Cash Flow Plan

7) Reliance Credit Guardian Plan

8) Reliance Special Credit Guardian Plan

Each of the above traditional plans is discussed as follows:

1) Reliance Term plan: -

This insurance policy is designed for those who only want life cover

for the protection of their family, and do not wish to save for

themselves. It can also be useful to business firms that wish to provide

financial security to their business against the sudden loss of partners

or valuable manpower. Since there is no saving element or bonus

provision, the premium is very low. Hence, this is a high-risk plan

with a low premium.

Features: -

a) Purely a term plan


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b) Entry age minimum 18 years and maximum 65 year

c) Maximum premium paying term is 30 year

d) Loan facility N.A.

e) Maturity amount = Sum assured

2) Reliance Whole Life Plan: -

This insurance policy is designed for people who do not wish to avail

of any benefits themselves but wish to create an immediate estate to

protect their family by availing of insurance cover on their life at a

very low cost.

Features: -

a) It is a whole life insurance policy with profits

b) Low cost life cover

c) Maturity age is 85 year or 99 years last birthday as chosen

d) Maturity amount = Sum assured + Vested bonus

e) Tax benefit is available

3) Reliance Child Plan: -


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This insurance policy is designed for people who wish to save money

for a future time when there will be a recurring need for substantial

amounts of money. This is especially true when it comes to paying

large sums of money for higher education as and when your son or

daughter is studying to become an Engineer, a Doctor or specialize in

some other field, or is perhaps planning to go abroad. This money is

payable in equal installments over the last 4 years of the policy term.

Features: -

I. Minimum entry age is 20 year and maximum 60 year

a) Minimum sum assured is Rs. 25,000.

b) Minimum premium paying term is 5 year and maximum 20 year

c) Tax benefit is available

d) Maturity amount = Four equal installment of sum insured in last

four year plus vested bonus in the last year

e) Loan facility is available

4) Reliance Endowment Plan: -

Reliance Life Insurances Reliance Endowment Plan is the key to all

your financial needs. It is an inexpensive and easy way to protect you,


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your family or your business. In a nutshell this plan will keep you

financially prepared for all the special occasions in your life - your

daughters wedding, your childs university education or even a new

office for your business - by eliminating the burden that a shortage of

money creates. In the event of your untimely death, Reliance

Endowment Plan will also assist your loved ones through this difficult

time by the financial support that it provides. Reliance Endowment

Plan also gives you the additional benefit of participating in the

companys profits, which you will receive at the end of the policy

period.

Features: -

a) Entry age minimum is 5 year and maximum 65 year

b) Maturity age minimum is 18 year and maximum 75 year

c) Minimum premium paying term is 5 year and maximum 35 year in

case of regular and in case of single 15 year

d) Minimum sum assured is Rs. 25,000 or as determined by the

minimum premium

e) Maximum sum assured is Rs. 5, 00,000 (entry age below 18 years

and no limit for entry age 18 and above)


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f) Premium mode annual, half yearly, quarterly and monthly

(by salary deduction only)

g) Loan up to 90% of the surrender value of the policy

h) Maturity amount = Guaranteed sum assured + Reversionary bonus

5) Reliance Special Endowment Plan: -

This insurance policy is designed for people who wish to combine

savings with extended security. The unique feature of this policy is

that life protection continues for five years after you have stopped the

payment of premium. Payment of sum assured at the end of premium

paying term and extension of life cover thereafter for the full sum

assured for a period of 5 years, are characteristics of the policy.

This plan also participates in the profits.

Features: -

a) Entry age minimum 12 year and maximum 65 year

b) Minimum sum assured is Rs. 25,000

c) Minimum premium paying term is 10 year and maximum 40 year

d) Unique feature of this policy is that five year life protection

continues after you have stopped the payment of premium


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e) Tax benefit is available

f) Under this policy bonus is compounded yearly

g) Loan facility is available

h) Maturity amount = Full sum assured before maturity date + Vested

bonus at the time of maturity date

6) Reliance Cash Flow Plan: -

This insurance policy is designed for those who have a recurring need

for reinvestment in business or look for short-term investment

channels. The advantage of the policy is that they need not part with a

sizable amount of money at any one time, but create, through regular

premium payments, a periodic return of lump sums which become

available for reinvestment at higher returns, while providing

simultaneously, substantial life cover. Alternatively, it can be used to

meet any immediate financial crisis in the family like your son's

college admission, your daughter's engagement, and renovation of

your home or perhaps, a holiday abroad. The money is payable in

installments. The first installment is paid at the end of the 4th year and

thereafter at the end of every 3rd year.


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Features:-

a) Plan with profits

b) Minimum entry age is 15 year and maximum is 63 year

c) Maximum premium paying term is 34 year

d) Loan facility is not available

e) In case of death full sum assured + accrued bonuses up to the date

of death is payable immediately

f) In case of survival up to maturity date all premiums paid

g) Rider accident death and critical illness

h) Mode of payment is available

7) Reliance Credit Guardian Plan: -

This insurance policy is designed for those who not only safeguards

individuals but also families and businesses from the financial

hardship that could arise from unfortunate and unexpected death.

Features: -

a) Loan protection against home, home improvement, two wheelers

and four wheelers

b) In case of death remaining loan amount paid immediately


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c) In case of survival no benefit is available

d) Premium payment option for single and regular is available

e) Premium paying term is 2/3 of loan period and remaining period

paid by the company

8) Reliance Special Credit Guardian Plan: -

This insurance policy is designed for those who not only safeguards

individuals but also families and businesses from the financial

hardship that could arise from unfortunate and unexpected death,

disability or critical illnesses.

Features: -

a) Loan protection against home, home improvement, two wheelers

and four wheelers

b) In case of death remaining loan amount paid immediately

c) In case of survival no benefit is available

d) Premium payment option for regular and single is available

e) Premium payment term is 2/3 of loan period and remaining period

paid by the company

f) Maturity amount = All the premium paid amount


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g) Tax benefit is available

UNIT LINKED PLAN

A unit-linked policy is a life assurance policy in which the benefits

depend on the performance of a portfolio of shares. Each premium

paid by the insured person is split: a part is used to provide life

assurance cover, while the balance (after the deduction of costs,

expenses, etc.) is used to buy units in a unit trust.

In this way, a small investor can benefit from investment in a

managed fund without making a large financial commitment. As they

are linked to the value of shares, unit linked policies can go up or

down in value.

Policyholders can surrender the policy at any time and the surrender

value is the selling price of the units purchased by the date of

cancellation 9lessexpense). A small part of the contribution is used for

providing life cover and the balance is invested in unit. Legal heirs are

entitled to the amount of insurance cover and entitled units in case of

death of the insured. Reliance Life Insurance Company Limited has

also offered the two Unit Linked Plans, which are listed as follows:


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1) Reliance Market Return Plan

2) Reliance Golden Years Plan

Amongst the above plans the Reliance Market Return Plan is the

largest selling plan of the Reliance Life Insurance Company Limited.

The above two ULIP plans are discussed as follows:

1) Reliance Market Return Plan: -

Reliance Market Return Fund is the unit-linked product that helps you

invest in the financial markets in a combination of investment

instruments of your choice. You can enjoy the returns from the

markets without the trouble of monitoring and managing your own

investment portfolio and keeping track of the market movements. At

the same time your investment premiums provide you with insurance

cover. Reliance Market Return Fund unit-linked insurance plan

provides you with a basket of fund options that balances your return

and risk exposure while providing life cover at the same time.

Features: -

a) Minimum entry age is 30 days and maximum entry age is 65 year

b) Maximum policy term 40 year and minimum policy term 5 year


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c) Mode of premium as annual, quarterly, half yearly and monthly Rs.

1000 (for salary deduction only) and Rs. 2500 (standing order/credit

card)

d) Top up premium minimum Rs. 2500

e) Option of investment fund

i. Capital secure 100% fixed interest securities

ii. Balanced minimum 80% fixed interest securities and maximum

20% in equity

iii. Equity 100% equity

iv. Growth minimum 60% fixed interest securities and maximum

40% in equity

f) Loan facility is not available

g) One switches every year free and subsequent switches charged 1%

of the amount switched

h) Partial withdrawals per year under regular and single premium

options is 2 times

I) lock in period till today is 3 year

j) Minimum unit account balance after each withdrawal is Rs. 10,000


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2) Reliance Golden Years Plan: -

Reliance Golden Years Plan.. The Reliance Life Insurance no-

worry stay happy retirement plan. Reliance Golden Years Plan is a

flexible package that provides freedom of choice in choosing the type

of investment, life cover, vesting options such as commuting and

annuity options. Contributions provide Income tax savings as well.

Reliance Golden Years Plan, a flexible pension product is available for

all individuals who are between the ages of 18 and 65.

Features: -

a) Entry age minimum is 18 year and maximum 65 year

b) Minimum premium amount Rs. 10,000 and maximum is unlimited

c) Mode of premium payment is available

d) Pension plan with risk cover and without risk cover

e) Choice of investment

I. Capital secure fund 80% in equity and 20% in government

security

ii. Balanced fund 80% in government and 20% in equity

f) No loan facility is available

g) Tax benefit is available


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h) Annuity options

I. Annuity payable for life

ii. Annuity payable for 5/10/15 years certain and thereafter with life

iii.Annuity payable for life with return of capital on death of the

annuitant.


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CHAPTER NO. 4- HUMAN RESOURCE MANAGEMENT

RECRUITMENT

Recruitment is the process of finding and attracting capable applicants

for employment. The process begins when new recruits are sought and

ends when their applications are submitted. The result is a pool of

applicants from which new employees are selected.

SELECTION

Selection is the process of picking individuals (out of the pool of job

applications) with requisite qualifications and competence to fill job in

the organization. In simple words, it is the process of differentiating

between applicants in order to identify these with a greater likelihood

of success in a job. The Branch Manager, which includes-, will

conduct the process of selection of Sales Manager

1) Personal Interview: The first step of selection of Sales Manager

in the Reliance Life Insurance Company Limited is to conduct a


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personal interview of an applicant by the Branch Manager.

2) Project 40Interview: -After clearing the personal interview, the

project 40 interview will be taken by the Branch Manager. In this step,

the applicant should have to make a list of 40 and then start the

business with them.

3) Interview with Regional Head: After clearing the project 40

interview, the applicant should be interviewed by the Regional Head,

who will check his/her performance.

4) Negotiation: - After clearing the interview with Regional Head,

the negotiation will be provided to the applicant.

5) Medical Examination: - After that, the medical checkup should e

made to the applicant.

6) Selection: -After clearing all the above steps the applicant should

be appointed/selected as a Sales Manager in the company.


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computed as follows:

Training & Development = Standard Performance Actual

Performance

They are providing 100 hours training to their advisors,

who are newly recruited. They are also providing the product training

to their advisors and Sales Managers, who are newly recruited. The

100 hours training is to be conducted at Net Bios Computer Academy

whereas the product training is to be conducted at NIS SPARTA. The

NIS SPARTA

Institute has more than 150 batches and is trained over 3000 agents for

most of the private insurance companies. This institute is approved by

IDRA to train agents/advisors.

CAREER DEVELOPMENT

They are also providing career development plans, which will identify

potential and create avenues for growth.

COMMUNICATION

Communication is the process through which an individual can


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exchange their beliefs, things, information, and experience to others.

In simple words, it is the process of exchanging the information from

one person to another. They are providing an open environment,

which enabling free interaction between all levels. The communication

is provided in the following manner:

INCENTIVES

Incentives are monetary benefits paid to workmen in recognition of

their outstanding performance. They are providing an aggressive

reward and recognition plans, which are including sales incentives.

SERVICES

They are offering following certain services to their employees.

1) They are providing knowledge sharing and certification practices.

2) They are planned team building and fun events.

3) They are creating Reliance Life Insurance family, which includes

employees, associates and their families.


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4) Reliance Life Insurance in a team building mode and is looking for

performance driven, achievement oriented and challenge loving

performance.

PERFORMANCE APPRAISAL

Performance appraisal is the systematic evaluation of the individual

with respect to his/her performance on the job and his/her potential for

development. Performance appraisal is a formal, structured system of

measuring and evaluating an employees job related behaviors and

outcomes to discover how and why the employee is presently

performing on the job and how the employee can perform more

effectively in the future so that the employee, organization and society

all benefit.

They are providing a balanced scorecard approach for strategy

deployment and performance measurement, which goals and measure

financial, customer focused, process related and employee

development related initiatives. In addition to this, the Branch

Manager should measure the performance of the Sales Managers at

every six months and the Sales Manager should measure the


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performance of the advisors/agents. If the performance is best then

he/she will be prompted.

ORGANIZATION FORM ANDSTRUCTURE

CEO

CMO

Channel Head

Regional Head

Branch Head

Sales Manager CEO

Advisors/Agents

Customers


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DEPARTMENT

They are providing following areas or departments:

1) Retail Sales

2) Under Writing

3) Actuarial

4) Insurance Operations

5) Customer Service

6) Quality and Processes

7) Human Resources

8) Finance


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CHAPTER NO.5- MARKETING DEPARTMENT

DISTRIBUTION CHANNEL

Reliance Life Insurance Company Limited is using five types of

distribution channel, which are as follows:

1) Agency: -Independent insurance agents represent a number of

companies and can research these companies products to find the

right combination for their clients. Independent agents & insurance

producer groups are growing in prevalence. Although producer groups

are in their infancy, their emergence may potentially be realignment in

the distribution of financial services. Independent shops realized that

by pooling production and funding a central support office, they had

increased buying power. The one type of distribution channel, which

Reliance Life Insurance Co. Ltd is using, is an agency. This channel

works as follows:


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Branch

Managers

Advisors

Customers

2) Bank Assurance: While a lot of bank relationships with insurance

companies have been established, life insurance sales have been

slower than one would expect the primary bank insurance activities

have been the distribution of annuities, credit life, and direct

marketing insurance.

Banks are failing to incorporate successful sales tactics used to sell

other financial services like investments. Another type of distribution

channel is bank assurance. This channel is tie up with banks. In this

channel the advisors using or targeting the bank customers to make a


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business with them i.e., to sell the policy of the company.

3) Corporate:-To gain a better understanding of the demand amongst

independent advisors for trust services and to gain a better feel for

how independent advisors handle trust services, a research was

performed with independent advisors across several broker/dealers and

custodians.

The interviews revealed that demand is greatest for living trusts

among independent advisors, followed by demand for corporate

trustee services. Another type of distribution channel is corporate,

which are for employee benefits. This channel is tie up with corporate

or small enterprises. Through these small enterprises, the advisors will

sell the products/policy to customers of the small enterprises.

4) Rural Benefits: - Brokerage firms have gained much of the

institutional and personal trust business lost by the banks. These firms

have steadily captured assets, primarily at the expense of the banks.

The number of non-bank trust companies has increased in recent years

as independent trust companies have emerged and more broker/dealers


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are integrated services. Insurance companies view full-service brokers

as a potentially new distribution channel as well. Another type of

distribution channel is rural benefits. This channel works as a

dealership. In this channel, the dealers will sell the policy to the target

customers.

5) Web World: - Direct sales of life insurance are growing rapidly,

but many of the traditional full-serve players seem to be letting it go.

Across all financial services, consumers are expressing a willingness

to deal with a variety of providers on the web. Web sites are starting to

pop up offering consumer insurance products especially designed for

distribution over the web. Another type of distribution channel is web

world. This channel is tie up with customer database. In this channel,

the advisors will sell the policy to the target customers, which are

taken from the customer database, are listed in the website.

PROMOTIONAL PROGRAMMES &TARGET SEGMENT

Promotional programmes and target segment are related to each other.


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The promotional programmes are made to motivate the

advisors/agents and sales managers to do more business i.e., to sell the

more policies. The Reliance Life Insurance Co. Ltd has made three

promotional schemes, which are as follows:

1) Shubh Arambh:- This promotional scheme is detailed as

follows:

SLAB (WRP) REWARD

ACHIEVERS

30,000 Reliance Life T-Shirt

50,000 Table Top Clocks

75,000 Leather Bag

1, 00,000 World Space Radio

1, 50,000 L.G. Microwave- 19L

2, 00,000 DVD/VCD/MP3 Player

3, 00,000 Sony Music System

SUPER ACHIEVERS

5, 00,000 LG Refrigerators GL-233


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7, 50,000 LG Air Conditioner 1T

10, 00,000 Sony Digital Camcorder

15, 00,000 Trip to Dubai 3D/4N

20, 00,000 Hero Honda Splender

STAR ACHIEVERS

50, 00,000 Maruti Alto Std.

75, 00,000 Maruti Swift Lxi

1, 00,00,000 GM Aveo 1.4LS

2) R.A.R.E.:- The full form of R.A.R.E. is Reliance Advisors

Reward Experience. This programs consists of

1. New Advisor Incentive Program

2. Board of Advisors

3. Annual Discovery Series

4. Advisor Career Progression

5. RARE Club Loyalty Program

The above programs are described as follows


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1. R.A.R.E. Program New Advisor Incentives:-

Criteria

There will be two levels in the New Advisor Incentive program

A. Launch Pad

B. Take Off

2. R.A.R.E. Program Board of Advisors:-

Criteria

There will be two levels in the Board of Advisors program

A. Time Period

B. Parameters

3. R.A.R.E. Program Discovery Series:-

Criteria

There will be six levels in the Discovery Series program

A. Qualification period

B. Business criteria

C. The qualification criteria will be the same for both the Global and


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the National Discovery Series

D. Qualification for the Global Discovery Series

E. Qualification for the National Discovery Series

4. R.A.R.E. Program Advisor Career Progression:-

Advisor Career Progression

A. Business Associate

B. Sales Manager

5. R.A.R.E. Privilege Club:-

Levels

A. The RARE Club will have 6 different levels

B. The criteria for entry into each level will be based on

I. Business (WRP)

II. Persistency

III. Product Mix

3) Elite Club Scheme:- In this scheme the advisor, who have login

the regular premium of Rs. 2, 00,000 will be eligible for the Elite Club


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Membership.

COMPARATIVE STUDY

Presently there are 15 Life insurance companies in the country. There

is only one public sector company LIC and the rest 14 are private

sector. Although LIC has been dominating the Life Insurance business

since past few years the private players have now started to take the

momentum.

1) Major Market Players: -

Birla Sun Life Insurance Company: - Birla Sun Life Insurance

Company is a 74:26 joint venture between Birla group and Sun Life

Financial. It is a private sector company the company was registered

on 31/1/2001. The market share for FY 2005-06 was 1.89%.

HDFC Standard: - HDFC standard is a 74:26 joint venture between

HDFC and Standard Life. It is a private sector company. The

company was registered on 23/10/2000. The market share for FY

2005-06 was 2.87%.


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ICICI Prudential Life Insurance: - ICICI Prudential Life is a 74:26

joint venture between ICICI and Prudential. It is a private sector

company. The company was registered on 24/11/2000. The market

share for FY 2005-06 was 7.35%.

Life Insurance Corporation of India (LIC): - Life Insurance

Corporation of India is a 100% government held Public Sector

Company. Being the first to be established LIC is the share for FY

2005-06was 71.44%.

Kotak Mahindra OLD Mutual: - Kotak Mahindra OLD Mutual is a

74:26 joint venture between Kotak Mahindra bank and Old Mutual. It

is a private sector company. The company was registered on

10/1/2001. The market share for FY 2005-06 was 1.11%.

Max New York Life: - Max New York Life is a 74:26 joint venture

between J & Bank, Pallonji & Co and MetLife. It is a private sector

company. The company was registered on 6/8/2001. The market share


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for FY 2005-06 was 1.23%.

Aviva

Life Insurance Indi

a: - Aviva Life insurance is a 74:26 joint

venture between Aviva and Dabur. It is a private sector co mp any.

The company was registered on 14/5/2002. The market share for FY

2005-06 was 1.14%.

ING Vysya Life insurance: - ING Vysya Life Insurance is joint

venture between Exide (50%), Gujarat Cements (14.87%), Enam

(9.13%) and ING (26 %). It is a private sector company. The company

was registered on 2/8/2001. The market share for FY 2005-06 is

0.79%.

Baja j Allianz Life Insurance Co.: - Bajaj Allianz Life Insurance

Company is a 74: 26 Joint venture between Bajaj Auto limited and

Allianz AIG. The company was registered on 3/8/2001. The market

share for FY 2005-06 was 7.56%.

SBI Life Insurance Company Ltd: -SBI Life Insurance Company is


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a 74: 26 Joint venture between SBI and Cardiff S.A. The company

was registered on 31/3/2001.It is a private sector company. The

market share for FY 2005-06 was 2.31%.

The TATA AIGGroup: -TATA AIG group is a 74:26 JV between

Tata Group and AIG. It belongs to the private sector. The company

was registered on 12/2/2001. The market share for FY 2005-06 was

1.29%.

SaharaIndia Life Insurance Company Ltd.: -First Wholly Indian

Owned Private Life Insurance Company. The Company commenced

operations from 30th October 2004. The market share for FY 2005-06

was 0.06 %.

Shriram life insurance company Ltd: - Shriram Life is a recent

entrant into the life insurance sector It is a 74:26 joint venture between

the Shriram group through its Shriram Financial Holdings and Sanlam

Life Insurance Limited, South Africa. The company expects to start

operations soon.


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2) Market Sh

are: -

Sr. No Insurer Market Share (%)

1 LIC 71.44

2 Bajaj Allianz 7.56

3 ICICI Prudential 7.35

4 HDFC Standard 2.87

5 SBI Life 2.31

6 Birla Sun Life 1.89

7 Tata AIG 1.29

8 Max New York 1.23

9 Aviva 1.14

10 Kotak Mahindra OLD Mutual 1.11

11 ING Vysya 0.79

12 Reliance Life 0.54

13 MetLife 0.4

14 Sahara Life 0.06

15 Shriram Life 0.03


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CHAPTER NO.6- RESEARCH METHODOLOGY

OBJECTIVES OF STUDY

1) To get some good market exposure by dealing with the prospects

face to face.

2) To improve our ability to sell a financial product like life

insurance.

3) To know the perception of the consumer about life insurance.

4) To get a deep knowledge of the financial product like insurance.

5) To get some information about the market share of Reliance Life

Insurance as compared to the giants like LIC and to know the standing

of the company in the market.

QUESTIONNAIRE

It is most common instrument whether administered in person by

phone or online questionnaires are very flexible. The form of each

question is also important. Closed end question include all the possible


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answers and subjects matters choices among them. I have used open-

end questions so that customers can write answer in their own words.

I have also used closed-end questions, which provide answers

that are easier to interpret and tabulate. I have taken care in the

wording and ordering of questions. I have used simple, direct,

unbiased wording questions, which are arranged in a logical order. I

have asked personal questions at last so that respondent does not

become defensive.

Questionnaire of the customer

I have made questionnaire consisting seventeen questions to get

customers view about life insurance. I have asked personal questions

at last so that they do not become defensive. I have tried to know their

performance i.e. whether they want to invest, where they want to

invest, up to what amount and since when.


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SAMPLING METHOD AND SAMPLE SIZE

Introduction:-

Any organization whether big or small, private or public need

different types of information are to know its popularity. I have

gathered secondary data and primary data and collected information

from the combination of these two data.

Secondary data: -

Secondary data consist of information that already exists somewhere,

having been collected for another purpose. I have gathered secondary

data from website of different operators, different magazines,

newspapers and libraries.

Primary data: -

I have taken great care while collecting primary data to answer that it

is relevant, accurate, current and unbiased. I have taken a sample of 50


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people. I have visited them personally to get data.

Sample size: -

I have taken sample size of 50 respondents. Because the population is

too large so it is difficult to survey.

LIMITATIONS

I am a human hang, so there is some limitation of the human hangs

which is reflected in this research. The following are the

limitation of this research study.

1) The sample size of 50 might not represent the perception of whole

population, as the sample size is too small for total population of

Jaisalmer city.

2) The opinion expressed by the respondents may be biased.

3) The attitude of the research might be biased.

4) One of the most influencing and most critical limitations is that I

am not trained for the research study and this is my first study. I tried

hard to come at conclusion, but there is lack of expertise.


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ANALYSIS OF QUESTIONNAIRE

Here I have formed a questionnaire to study why people go for life

insurance. What is peoples major motive behind investing in life

insurance? Do they decide upon their own or they take guidance of an

agent? What is their perception about Reliance Life Insurance

Company Limited?

Questions:-

There are 7 questions in the questionnaire. Out of these 7 questions, 6

questions are close ended and one question is an open ended one.

Target Population:- I had conducted this survey among 50 people,

and the target group was a mix of people from the society. I asked the

questions to Doctors, Professionals, Professors, Advocates, Engineers,

and general public.

Analysis: - I have used pie charts, and some other statistical measures


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to analyze the questions.

Q.1 What is your m

ain motive behind investing in life insur

ance?

(a) Tax Benefit

(b) Savings

(c) Risk Cover

(d) Return/Yield

MOTIVE NO.

TAX 20

SAVING 05

RISK COVERAGE 23

RETURN/YIELD 02

TOTAL 50

Here we can see that majority of the people tend to invest in life

insurance for the risk coverage. The next preferred option is Tax


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Saving. We founded from the discussion with public and some experts

that those people with a low income tend to invest in life insurance to

gain tax benefit. Saving motive constitutes very small part of the total

sample. Return comes last.

But this is the general conclusion of 50 people. If we take a larger

sample, we can get a different result. As the private players have

launched ULIPs, more and more people are turning towards these

products so the Investment motive has been gaining command. Also

the number of those people who wish to invest for return is also

increasing.

According to a life insurance expert (Vinod Thakkar), life insurance is

for protection first then for Savings and Tax benefits all those things.


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Q.2 Rank the

above motives

according to your preference

MOTIVE OFINVESTMENT

PRE. TAX SAVINGS RISK RETURN/

COVER YIELD

1 21 3 24 1

2 19 11 16 4

3 8 25 7 10

4 2 11 3 34

We can see from the table and that the number one motive of people

about investing in life insurance is risk coverage, which is the main

theme of life insurance followed by Tax benefit. The third position is

of saving and fourth is Return. This shows that still people consider

other financial tools more viable for return and life insurance is for

Tax benefit and risk cover.

Q.3 How do you decide about investing in life insurance?

(a) On my own


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TOTAL 50

Here we can see that majority people (58%) decides on their about

investing in life insurance. 28% persons decide as per the guidance of

the agent. There is no contribution of employers in the decision of

ones investment in life insurance. 14% people invest in life insurance

as per the family decision.

Q.4. Which life insurance policy would you prefer to buy?

(a) Term Assurance

(b) Whole Life

(c) Endowment

(d) Combination of Whole Life and Endowment

(e) Unit Linked

This is another crucial question as there are number of products

offered life insurance companies. The products range from pure Term

Assurance Plans to Unit Linked Insurance Plans, which are relatively

new entrant in the market. We have already explained all these


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policies ahead. Now lets find out what people have to say:

Type of policy N0.

Term Assurance 9

Whole Life 9

Endowment 7

Combined 19

ULIPs 6

TOTAL 50

As it is evident from the table 38% people prefer combination of

Whole Life and Endowment product. It gives people double

advantage. The person would get some amount at the end of the

stipulated period; for instance 20 years, and after that period the risk

cover continues and the rest of the amount would be paid when the

person dies.

Q.5 Would you prefer Reliance Life Insur

ance or LIC for buying

thelife insurance policy?

(a) Reliance Life Insurance

(b) LIC


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This is the most important question as it reflects the scope of the

study. It is the main theme of this questionnaire. Prior to 2000 LIC

was the only player in the life insurance market and it had the total

market. So people had to go to LIC for buying life insurance policy.

But after the entry of private players in 2000, some people have also

turned to private life insurers.

Reliance Life Insurance Company Limited is newly launched

company. So it has fewer customers as compared to LIC. But the

ULIP plans are sold more of Reliance life insurance as compared to

LIC in todays environment. Now lets see what people say:

Particulars No.

Reliance Life Insurance 15

LIC 35

TOTAL 50

As evident from the table that 30% of people would prefer Reliance

Life

Insurance while 70% would prefer LIC.


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Personal Details: -

1) Age

(a) 18 to 30

(b) 31 to 50

(c) 51 to 65

Age No.

18 to 30 5

31 to 50 30

51 to 65 15

TOTAL 50

As evident from the table that I have taken a sample of 50. Out of

which 10% people are aged between 18 to 30, 60% people are aged

between 31 to 50 and remaining 30% people are aged between 51 to

65.

2) Occupation


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(a) Service

(b) Business

(c) Profession

(d) Housewife

(e) Retired

OCCUPATION NO.

Service 5

Business 15

Profession 10

Housewife 5

Retired 15

TOTAL 50

As the evident from the table that out of 50 respondents 10% are of

service men, 30% are of business men, 20% are of professions, 10%

are of housewives and remaining 30% are of retired.

3)Income

(a) 50,000 to 1, 00,000

(b) 1, 00,000 to 5, 00,000

(c) More than 5, 00,000


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Income (Per Annum) No.

50,000 to 1, 00,000 10

1, 00,000 to 5, 00,000 25

More than 5, 00,000 15

TOTAL 50

As the evident from the table out of 50 respondents 20% are earning

annually between 50,000 to 1, 00,000, 50% are earning between

1,00,000 to 5, 00,000 and 30% are earning more than 5, 00,000.

4)Family members

(a) 2

(b) 3

(c) 4

(d) More than 4

Family Members No.

2 5

3 15

4 20


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More than 4 10

TOTAL 50

As the evident from the table out of 50 respondents 10% have 2

family members, 30% have 3 family members, 40% have 4 family

members and remaining 20% have more than 4 family members.

SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors,

which have impact on the survival of any organization. Now lets

make SWOT analysis for reliance Life Insurance Company Limited.

STRENGTHS:

1) Reliance Life Insurance Company Limited is the part of the

Reliance Capital.

2) The brand name is enough to sell the products easily.

3) Private placement of Rs. 10,000 crs worth of securities with RBI

by the government. Led to an improvement in market securities.

4) Strong liquidity from FII was the major reason for the up move.

5) Range of products

6) Reliance has a long and strong history of solvency, financial

stability.


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motive of tax benefit may turn to other instruments.

CHAPTER NO.7- FINANCE DEPARTMENT

FUND PERFORMANCE:-

There are four fund options, which Reliance Life Insurance Company

Limited has offered, which are as follows:

1)Capital Secure Fund:-

This fund is for Reliance Golden Years Plan, and Reliance Market

Return Plan.

In line with the objective of protecting the capital against any erosion,

61.4% of the funds were invested in short-term Government

Securities (Gilts) and to meet liquidity requirement higher about 40%

of funds are kept in short term bank deposits. The net return credited

to policyholders and the asset composition ratios are given in the

boxes below.

Net Returns during last 1 month (Mar.06) 0.36%

Net Returns during the last 3 months (Jan.-Mar.06) 1.10%

Net Returns during the last 12 months (Apr.05-Mar.06) 4.09%


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Net Returns since Inception in Feb03 (Annualized) 3.89%

Bank

Fixed Deposits

Asset Name % of total assets

Total Bank Deposit 38.60

Gilts

6.75% GOI 2006 6.75

11.68% GOI 2006 13.69

11.75% GOI 2006 40.96

Total Gilts 61.40

Total 100.00%

2) Balanced Fund:-


Return Plan. To take advantage of the bullish trend in the equity

market, the equity holdings in the fund was maintained as close as

possible to the maximum of 20% allowed for the fund. Bank deposits

were maintained only for the purpose of liquidity management. To

reflect their bearish view on the debt market the duration of the fixed


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income portfolio was kept low. Within the fixed income portfolio,

allocation to Gilts was higher than corporate bonds. All the bonds in

the portfolio are top rated.

3)Growth Fund:


Return Plan To take advantage of the bullish trend in the equity

market, the equity holdings in the fund was maintained as close as

possible to the maximum of20% allowed for the fund. To reflect their

bearish view on the debt market the duration of the fixed income

portfolio was kept low. All the bonds in theportfolio are top rated.

4) Equity Fund: - This fund is for Reliance Market Return Plan. In

line with thestated asset allocation pattern and their view of the

market, the entire corpus of the fund was invested in equities.


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CHAPTER NO. 8 CONCLUSION

1. After the deep study of insurance sector of India, I can tell that this

is the sector, which has most business opportunities perhaps in India.

2. Insurance industry is one of the fastest sectors in India. Insurance

sector has been growing by 25% to 30% and it is expected to increase

by 50% in coming 5 years. After the opening up of the insurance

sector, it has become much competitive and insurance awareness

among people has increased.

3. As far as the comparison of Reliance Life Insurance and other

player is concerned, there are both positive as well as negative

impacts on both the sides.

4. For Reliance Life Insurance, the negative aspect is that its market

share is low.

5. For private players the negative aspect is that they have to fight

with the public sector giant which is established player with a high

brand value.


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6. But the positive impact is that the life insurance awareness has

increased and the business of Reliance Life Insurance has increased.

CHAPTER NO.9- BIBLIOGRAPHY AND REFERENCES

www.reliancelife.com

www.indiainfoline.com

www.bimaonline.com

www.google.com

Life Time Magazine of Reliance Life Insurance

Net Bios Computer Academys Life Insurance Book

Broachers of Reliance Life Insurance


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Dilip Singh Chouhan Project Report

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Transcript of Dilip Singh Chouhan Project Report