PROJECT REPORT

ON
INSURANCE
In Chandigarh city
At

To be Submitted for the partial fulfilment of the requirements for the

award of the degree of MASTERS OF BUSINESS ADMINISTRATION (FINANCE)
(2018-2020)

Submitted To: Submitted By:

Internal Guide Mehak Batra
Mr. Lalit Malhotra Class: MBA (3rd Sem)
Roll No: 1811038

TILAK RAJ CHADHA INSTITUTE OF MANAGEMENT &

TECHNOLOGY

(AFFILIATED TO KURUKSHETRA UNIVERSITY,

KURUKSHETRA)

1
 ACKNOWLEDGEMENT

A Successful project is fruitful culmination of efforts of many people, some directly involved,
and others who have quietly encouraged and extended their support, while being in the
background. I take this opportunity to extend my deep sense of gratitude and heartfelt thanks
to all those who have helped us directly or indirectly during the course of my project. My
colleagues and associates at Tilak Raj Chadha Institute of Management & Technology
continue to have important impact on my thinking. I am in debt to my corporate guides Mr.
LALIT MALHOTRA(Branch Head) & Mr. HARPREET SINGH(Asst. Financial Planner)
and MR. SACHIN VERMA(Asst. Financial Planner) of “Bajaj Capital” sec- 35B, near Axis
Bank, Chandigarh. I would like to also thank the other member of Bajaj Capital MR. SUMIT
THAKUR, MR. SAHIL MR. VIPIN for their valuable suggestion and time to time
guidance in completion of my project.

This dissertation could not have been written without MRS. GINNI SYAL (Asst. Professor)
Who not only served as my supervisor but also encouraged and challenged me throughout my
academic program who patiently guided me through the dissertation process, never accepting
less than my best efforts. I am also appreciative of all that I have learned from working with
industry executives.

I would like to give thanks to all the staff of “Bajaj capital” sec- 35B, near Axis Bank,
Chandigarh. branch for their valuable and sincere cooperation and plying all the database of
“Bajaj Capital”,sec-35B, near Axis Bank, Chandigarh branch. I am thankful to my parents, &
my entire family who are always my source of brainchild & unplumbed exertion towards the
Journey of my life.

At last but not the least I am grateful to Omnipotent God for his manifold blessing in this
endeavour of mine.

Mehak Batra
MBA(3rd semester)
1811038
2018-2020

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 DECLARATION

I hereby declare that the following documented project report titled Insurance is an authentic
work done by me. The study was undertaken as a part of the course curriculum of MBA full
time programme

Kurukshetra University, Kurukshetra

I hereby declare that the study has not been submitted to any other Institute/organization for
the reference.

Mehak Batra
MBA(3rd semester)
1811038
2018-2020

3
 PREFACE

Investment is the sacrifice of certain present value for the uncertain future reward. It entails
arriving at numerous decisions such as type, mix, amount, timing, grade etc. of investment
and disinvestments. Further, such decisions making has not only to be continuous but rational
too. Broadly speaking, an investment decision is a trade-off between risk and return. All
investment choices are made at points of time in accordance with the personal investment
ends and in contemplation of an uncertain future. Since investments in securities are
revocable, investment ends are transient and investment environment is fluid, the reliable
bases for reasoned expectations become more and more vague as one conceives of the distant
future. Investors in securities will, therefore, from time to time, reappraise and re-evaluate
their various investment commitments in the light of new information, changed expectations
and ends.

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 CONTENTS

 Introduction
 Company profile
 Aims and objective
 Introduction to insurance
 History of insurance
 Insurance regulatory and development authority
 Benefits of insurance
 Importance of insurance
 Types of insurance
 Life insurance
 Types of life insurance
 General insurance
 Types of general insurance
 Research methodology
 Data analysis and interpretation
 Findings
 Limitations
 Suggestion/recommendation
 Conclusion
 Bibliography
 Annexure

COMPANY PROFILE

Bajaj capital is one of India’s leading financial services companies offering free advice on
investments, insurance, tax saving, retirement planning, financial planning, children’s future
planning and other services. We also have a wide range of products and services for
corporates, high net worth individuals, and NRI’s all under one roof. At Bajaj capital, we

5
believe in dreaming big. Dreams inspire us to excel. They ignite hope and kindle in us the
passion to stretch our limits. We also believe that nothing can or should stop us from realising
our dreams and financial constraints should be the last thing to stop anyone.

Four decades of excellence

For over four decades, we have been helping people realise their aspirations by helping them
make their wealth grow, and plan their financial lives. Today, we are a one of the largest
financial planning and investment advisory companies in India, with a strong presence all
over the country. We take pride in serving our customers - both individual and institutional -
and are known for our strong professionalism and work ethics.

Wide range of services

We offer a comprehensive range of services including financial planning and investment

advice, and the entire gamut of financial instruments and investment products of almost all
major companies, both public and private. In addition, we also provide investment assistance
by helping you complete all the formalities, and help you keep regular track of your
investments. These services and products are delivered through our network of 134 Bajaj
Capital investment centres located all over the country. We are also a SEBI-approved
category merchant banker. We raise resources for over 1,000 top institutions and corporate
houses every year, and offer specialised services to non-resident Indian (NRI’s) and high net
worth clients.

What you can expect from us

 Sound, research- based advice

 Unbiased, independent and need- based advice
 Honest, ethical dealings
 Accessibility

MILESTONES

The history of Bajaj capital

Bajaj capital has contributed to the growth of the Indian capital market at every step. In 1965,
we were the first to innovate the companies fixed deposit. Today, we are playing an active

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role in the growth of the Indian mutual fund industry. We are also working closely with
private insurance companies to deepen India’s insurance market.

Here is a brief gist of our journey through the years.

1964

Bajaj capital sets up its first investment centre in new Delhi to guide individual investors on
where, when and how to invest. India’s first mutual fund, unit trust of India is incorporated in
the same year.

1965

Bajaj capital is incorporated as a company. In the same year, the company introduces an
innovative financial instrument - the company fixed deposit. EIL ltd. (oberoi hotels, then
known as associated hotels of India ltd.) becomes the first company to raise resources
through company fixed deposits.

1966

Bajaj capital expands its product range to include all UTI schemes and government saving
schemes in addition to company fixed deposits.

1969

Bajaj capital manages its first equity issue (through an associate company) of Grauer &
wells India ltd.; right from drafting the prospectus to marketing the issue.

1975

Bajaj capital starts offering need-based investment advice to investors, which would later be
known as financial planning in the investment world.

1981

Sail becomes the first government company to accept deposits, followed by IOC, BHEL,
BPCL,HPCL and others; thus opening the floodgates for growth of retail investment market
in India. Bajaj capital plays an active role in all the schemes as principal brokers.

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1986

Public sector undertakings (PSUs) begin making public issues of bonds MTNL, NHPC, IRFC
offer a series of bond issues. Bajaj capital is among the top ranks of resource mobilisers.

1987

SBI leads the launch of public sector mutual funds in India. Bajaj capital plays a significant
role in fund mobilisation for all these players.

1991

SBI issues India development bonds for NRIs. Bajaj capital becomes the top mobiliser with
collections of over us $20 million.

1993

The first private sector mutual fund - Kothari Pioneer - is launched, followed by Birla and
alliance in the following years. Bajaj capital plays an active role and is ranked among the top
mobilisers for all these schemes.

1995

IDBI and ICICI begin issuing their series of bonds for retail investors. Bajaj Capital is the co-
manager in all these offerings and consistently ranks among the top five mobilisers on an all-
India basis.

1997

Private sector players lead the revival of mutual funds in India through open-ended debt
schemes. Bajaj capital consolidates its position as India’s largest retail distributor of mutual
funds.

1999

Bajaj capital begins marketing life and general insurance products of LIC and GIC (through
associate firms) in anticipation of opening up of the insurance sector. Bajaj capital achieves
the milestone of becoming the top ‘Pension Scheme’ seller in India and launches marketing
of GIC’s health insurance schemes.

2000

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Bajaj capital implements its vision of being a one-stop financial supermarket. The company
offers all kinds of financial products, including the entire range of investment and insurance
products through its investment centre. Bajaj capital offers full-service merchant banking
including structuring, management and marketing of capital issues. Bajaj capital reinvents
financial planning in its international sense and upgrades its entire team of investment experts
into financial planners.

2002

The company focuses on creating investor awareness for financial planning and need-based
investing. To achieve this goal, the company introduced the international college of financial
planning. The graduates of this institute become certified financial planners (CFPs), a coveted
professional qualification.

2004

Bajaj capital obtains the all India insurance broking licence. Simultaneously, a series of
wealth creation seminars are launched all over the country, making Bajaj capital a household
name.

2005

Bajaj capital launches 360° financial planning, a software-based programme aimed at

encouraging scientific and holistic investing.

2007

Bajaj capital launches stock broking and depository (Demat) services.

2008

Bajaj capital launches just trade, an online platform for investing in equities, mutual funds,
IPOs.

MISSION, AIMS & OBJECTIVES

Bajaj capital’s mission statement

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The focus of our organisation is to be the most useful, reliable and efficient provider of
financial services. It is our continuous endeavour to be a trustworthy advisor to our clients,
helping them achieve their financial goals.

Aims

 To serve our clients with utmost dedication and integrity so that we exceed their
expectations and build enduring relationships.
 To offer unparalleled quality of service through complete knowledge of products,
constant innovation in services and use of the latest technology.
 To always give honest and unbiased financial advice and earn our clients everlasting
trust.
 To serve the community by educating individuals on the merits of financial planning
and in turn help shape a financially strong society.
 To create value for all stake holders by ensuring profitable growth.
 To build an amicable environment that accords respect to every individual and
permits their personal growth.
 To utilise the power of teamwork to function as a family and build a seamless
organisation.
 Why invest through Bajaj capital
 Wide range of products and services
 41 years’ experience as investment advisors and financial planners
 More than eight lakh satisfied clients all over India
 Countrywide network of 134 branches
 Over 12,000 NRIs clients across the globe
 Personalised wealth management advice
 24 x 7 online accessibility through [Link]
 Strong team of qualified and experienced professionals including CAs, MBAs,
MBEs, CFPs, CSs, insurance experts, legal experts and others
 SEBI-approved category merchant bankers
 Group co BCIBL is an IRDA-licensed direct insurance broker

FOUNDER AND CHAIRMAN

Mr. K.K. Bajaj

Founder chairman

Mr. K.K Bajaj is M.A (English) and LLB, and is the founder chairman
of Bajaj capital ltd. He established Bajaj capital about 52 years ago and
has vast experience in the field of financial services. Today, Bajaj capital group has about 230

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offices in 100 cities across India. Its investment guidance has touched the lives of millions of
investors. Mr. Bajaj, a prolific writer, has contributed over 800 articles in leading newspapers
like economic times, financial express, business standard, times of India, Hindustan times and
various other magazines like investors India, eternal life etc. He is also the author of book
titled "smart living", a guide dedicated to good health as he feels there is no use of wealth
unless one has good health. Mr. Bajaj is also the founder of “international college of financial
planning” that is the leading in financial education institute in India and has so far imparted
education to over 10,000 financial experts who are now gainfully employed. Mr. Bajaj also
heads the board of editors of the monthly magazine “investors India” - India’s leading
magazine on wealth creation. Mr. Bajaj was given lifetime achievement award by state bank
of India mutual fund at a specially organized function in Melbourne, Australia and also by
ICICI prudential life insurance for his significant contribution to the life insurance industry.

Mr. Rajiv Bajaj

Chairman & managing director

Mr. Rajiv Bajaj is the vice chairman & managing director of Bajaj capital
ltd. He is also the founding chairman of financial planning standards board, India and has
been one of the key people involved in bringing the globally recognized certified financial
planner professional designation to India.

Mr. Bajaj has over 22 years of strategic management experience in the fields of investment
banking, investment advisory, insurance brokerage and financial planning. He had spent his
initial years in setting up of the investment banking business for Bajaj capital. He also played
an important role in expanding the distribution reach of Bajaj capital group from 20 offices in
1990 to around 200 now.

In the last few years, Mr. Bajaj has spent a lot of time in upgrading the operating system and
processes of the group. Under his leadership, Bajaj capital has won various category awards
and recognition nationally like, ‘best financial advisor – retail' award for 2009, 2011 and
2012 by CNBC tv18 and great places to work (2008 and 2009).

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Mr. Bajaj has done his MBA (international wealth management) from university of Geneva,
Switzerland and an executive MBA (international wealth management) from Carnegie
Mellon university, Pittsburgh, USA. He holds an 'international certificate for financial
advisors' from the chartered insurance institute (CII), London, UK. He is also amongst the
first batch of 25 certified financial planner designation holders in India.

Mr. Bajaj is a member of cii mutual fund committee, entrepreneurs' organization (Delhi
chapter) and a council member of European business group. An active speaker and writer on
investment strategy and financial planning in leading print and electronic media, mr. Bajaj is
extremely passionate about spreading financial literacy among the masses. His interests
include golf, yoga, fitness training and meditation.

Mr. Sanjiv Bajaj

Vice chairman & managing director

Mr. Sanjiv Bajaj is the managing director of Bajaj capital ltd. In his role,
he is involved in planning and implementing of several important future projects for the
company and the group. He has been instrumental in conceptualizing and implementing a
highly successful distribution model for life and general insurance, through what are known
as 'insurance planning centres'.

Under the able guidance of Mr. Sanjiv Bajaj, Bajaj capital insurance broking limited, has
emerged as one of India’s leading insurance broking houses within a short span since its
inception in January 2004. He also has keen interest in the information technology area and
heads the function for the company/group.

Mr. Sanjiv Bajaj started his career in 1995, when he worked on various projects which
included developing alternate channels of distribution like associate model, etc. From here,

12
he moved on to investment advisory services, which included understanding the client’s
needs and offering them solutions to meet their requirements by using various planning tools.

Apart from being a post graduate in business management, Mr. Sanjiv Bajaj also holds an
international certificate for financial advisor's from the chartered insurance institute (cii),
London, and is a certified financial planner from financial planning standards board India
(FPSB).

Mr. Bajaj is an active speaker on financial planning, investments, insurance planning and
careers in the financial services industry.

Mr. Rahul Parikh

Chief executive officer, Bajaj capital limited

Rahul Parikh has joined as chief executive officer, Bajaj capital limited
in April 2017. His experience in the digital domain will support the company's strategy of
combining face to face relationship with digital advisory, transactions and servicing. Rahul
Parikh has around 17 years of experience in the financial services. In his last assignment as
head Aditya Birla money my universe since April 2012, he has been spearheading the
category creation of online personal finance space in India for digitally savvy but financially
not so savvy young Indians. His past experience has seen him become vice president, in
charge of strategic initiatives and business development at Aditya Birla financial services
group (ABFSG). He has also worked as head business development with Birla SunLife AMC
where he managed distribution channels across India and was instrumental in building the
retail business. Prior to the Birla group, he has worked as an associate vice president –
strategy & business development in his last role at ICICI prudential AMC. He is passionate
about digital and the solutions it can bring to access problems, especially the role it can play
in improving personal finances & wealth creation of individuals and the positive impact it can
create in their lives. He has a holistic understanding of consumer behavior, financial products,
marketing, distribution, technology and digital with strong strategizing, business
development, execution and relationship management skills. Early in his career, he has also
worked with tata motors and Larsen & toubro in strategy, corporate and line roles. Rahul

13
holds master of management studies (mms) – marketing degree from narsee monjee institute
of management studies (NMIMS), Mumbai and has a production engineering degree from Fr.
Conceicao rodrigues college of engineering, Mumbai. He has also done short management
courses from IIM, Ahmedabad and Harvard business school, Boston.

SIGNIFICANCE OF LOGO

Our logo depicts lord Ganesha who is the source of all our values and ethics in business.

14
 The large ears of lord Ganesha remind us to hear more. We listen carefully to our
clients to understand their needs.
 The weight of the trunk on the mouth symbolises silence. We work silently, without
blowing our own trumpet.
 The long trunk symbolises continuous exploration. We explore all avenues to provide
the best investment opportunities for our clients.
 The heavy posture of Ganesha symbolises stability. We help our clients to attain
financial stability through wise investments.
 Lord Ganesha is known as the remover of obstacles and bestowed of prosperity. We
emulate his example and try our best to help our clients attain prosperity by proper
financial planning.
 Our logo has a yellow background. Yellow is the colour of gold, which symbolises
wealth. According to Vedic lore, it is also the colour associated with Brihaspati, the
guru and counsellor of the gods. We offer our clients sage counsel to make their
wealth grow.
 The letters are in red. Red is the colour rajas - symbolising power and incessant
activity. It symbolises our aggressive quest for your well-being and happiness.
 The white streak represents the trunk of lord Ganesha. White is the colour of Satva
Guna, and implies our selfless commitment to your life- long happiness.

INTRODUCTION TO INSURANCE

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Insurance is a means of protection from financial loss. It is a form of risk management,
primarily used to hedge against the risk of a contingent or uncertain loss.

An entity which provides insurance is known as an insurer, insurance company, insurance

carrier or underwriter. A person or entity who buys insurance is known as an insured or as a
policyholder. The insurance transaction involves the insured assuming a guaranteed and
known relatively small loss in the form of payment to the insurer in exchange for the insurer's
promise to compensate the insured in the event of a covered loss. The loss may or may not be
financial, but it must be reducible to financial terms, and usually involves something in which
the insured has an insurable interest established by ownership, possession, or pre-existing
relationship.

The insured receives a contract, called the insurance policy, which details the conditions and
circumstances under which the insurer will compensate the insured. The amount of money
charged by the insurer to the Policyholder for the coverage set forth in the insurance policy is
called the premium. If the insured experiences a loss which is potentially covered by the
insurance policy, the insured submits a claim to the insurer for processing by a claims
adjuster. The insurer may hedge its own risk by taking out reinsurance, whereby another
insurance company agrees to carry some of the risk, especially if the primary insurer deems
the risk too large for it to carry.

HISTORY OF INSURANCE

The history of insurance dates back to ancient times. There has always been a need for
insurance. The basic concept of insurance is to spread the risk among a large enough pool
so that no one person suffers the entire cost of the loss. Ancient insurance concepts date
back to the days of early hunters. Hunters went on hunting expeditions in groups to
minimize the risk of a person's injury by a wild animal .

The first insurance policy came from ancient Babylonia. King Hammurabi established the
"Hammurabi Code." This code established the practice of forgiving a debtor his loans in
the event of a personal catastrophe such as death, disability or loss of property.

16
The earliest forms of insurance were a primitive form of commercial insurance, especially in
regards to shipping goods, since cargo was often lost or damaged or stolen by thieves and
pirates. Please earliest methods of reducing risk involved either the pooling of risk or
transferring the risk to moneylenders or investors of expeditions.

Insurance is the method of transferring, distributing and sharing risk. Insurance is primarily
collective cooperation to share a particular risk. It is basically a sharing device. The losses
to assets or human asset resulting from natural calamities like, Fire, Flood, Earthquake,
Accidents or Natural death are met out of the common pool contributed by a large number of
persons who are exposed to similar risks. This contribution of many is used to pay the
losses suffered by unfortunate few. The basic principle is that loss should occur as a result
of natural calamities or unexpected events which are beyond human control. Moreover, the
insured person shall not think of undue gains out of insurance. It is primarily collective
cooperation to share a particular risk.

THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA)

The Insurance Act, 1938 had provided for setting up of the Controller o f I n s u r a n c e t o
act as a strong and powerful supervisory and regulatory authority
f o r insurance. Post nationalization, the role of Controller of Insurance diminished
considerably insignificance since the Government owned the insurance companies.

But the scenario changed with the private and foreign companies
foraying in to the insurance sector. This necessitated the need for a strong, independent and
autonomous Insurance Regulatory Authority was felt. As the enacting of
legislation would h a v e t a k e n t i m e , t h e t h e n G o v e r n m e n t c o n s t i t u t e d
through a Government resolution

17
anI n t e r i m I n s u r a n c e R e g u l a t o r y A u t h o r i t y p e n d i n g t h e e n a c t m e n t
o f a c o m p r e h e n s i v e legislation.

The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for
the establishment of an Authority to protect the interests of holders of insurance
policies, to regulate, promote and ensure orderly growth of the insurance industry and for
matters connected therewith or incidental thereto and further to amend the Insurance Act,
1938, the Life Insurance Corporation Act, 1956 and the General insurance
Business(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation
of India(for life insurance business) and General Insurance Corporation and its
subsidiaries (for general insurance business).

The act extends to the whole of India and will come into force on such date as the Central
Government may, by notification in the Official Gazette specify. Different dates
may be appointed for different provisions of this Act.

A new definition of "Indian Insurance Company" has been inserted. "Indian

insurance company" means any insurer being a company

(a) Which is formed and registered under the companies Act, 1956

(b) in which the aggregate holdings of equity shares by a foreign company, either by itself
or through its subsidiary companies or its nominees, do not exceed twenty-six percent, Paid
up capital in such Indian insurance company

(c) Whose sole purpose is to carry on life insurance business, general insurance business
or re-insurance business?

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 BENEFITS OF INSURANCE

Insurance is important because both human life and business environment are characterized
by risk and uncertainty. Insurance plays a key role in mitigation of risks. The benefits of
insurance are discussed below:

Benefits of Insurance to insured

1. Insurance provides security against risk and uncertainty.

2. It enables the insured to concentrate on his work without fear of loss due to risk and
uncertainty.

3. It inculcates regular savings habit, as in the case of life insurance.

19
4. The insurance policy can be mortgaged and funds raised in case of financial requirements.

5. Insurance policies, especially pension plans provide for income security during old age.

6. The insured gets tax benefits for the amount of premium paid.

7. Insurance of goods may be a mandatory requirement in certain contracts.

Benefits of Insurance to society

1. Insurance is an important risk mitigation device.

2. Insurance companies provide the required funds for infrastructure development.

3. It provides a sense of security.

4. Insurance provides security to the insured during his life and to his dependents.

5. It provides employment opportunities. With the entry of private insurers employment

opportunities have increased greatly.

6. Insurance provides a sense of livelihood to those who might otherwise not have an income
source — housewives, retired people, students etc can work as agents and earn commission.

7. Insurance works on the principle of pooling of risks and distributes risks over many
people.

8. Insurance is an invaluable aid to trade.

Benefits of Insurance to the Nation

1. Insurance provides funds to the government for providing basic facilities and to develop
infrastructure.

2. It has enabled the country to get foreign exchange (49% FDI is permitted in the insurance
sector in India).

20
3. Insurance relieves the government of the burden of supporting a family, in case of the
untimely demise of the breadwinner.

4. Insurance promotes trade and industry by providing risk cover.

5. Insurance companies pay taxes out of profits earned. This is an important revenue source to
the government.

6. Insurance companies are permitted to invest 5% of the funds in the capital market. LIC
alone has invested around Rs.28,000 crore in the Indian capital markets. Such investments
develop the capital market.

IMPORTANCE OF INSURANCE

[Link] and Safety: It gives a sense of security and safety to the businessman. It enables
him to receive compensation against actual loss. He can concentrate on his business with a
secure feeling that in case of losses arising from insurable risk, his losses will be
compensated.

21
2. Distribution of risk: Risk in insurance is spread over a number of people rather being
concentrated on a single individual.

3. Normal expected profit: An insured trader can enjoy normal margin of profit all the
time. He is protected from unexpected losses because of insurance.

4. Easy to get loans: A trader can get bank loans easily if his stock or property is insured, as
insurance provides a sense of security to the lenders.

5. Advantages of Specialization: Businessmen can concentrate on their business activities

without spending more time on safeguarding their property. The insurance companies, on the
other hand, can provide specialized insurance services.

6. Development of Social Sectors: Insurance funds are available for economic

development particularly for the development of social sectors. Especially for a developing
country like India, insurance funds are an important source for investing in infrastructure
projects (roads, power, water supply, telecom etc).

7. Social cooperation: The burden of loss is shouldered by so many persons. Thus,

insurance provides a form of social [Link] enjoy financial security: No matter
what your financial position is today, an unexpected event can see it all unravel very quickly.
Insurance offers a pay-out so that if there is an unforeseen event you and your family can hopefully
continue to move forward

9. Peace of mind: No amount of money can replace your health and wellbeing – or the role you
play in your family. But you can at least have peace of mind knowing that if anything happened to
you, your family’s financial security is assisted by insurance.

[Link] stress during difficult times: None of us know what lies around the corner.
Unforeseen tragedies such as illness, injury or permanent disability, even death – can leave
you and your family facing tremendous emotional stress, and even grief. With insurance in
place, you or your family’s financial stress will be reduced, and you can focus on recovery
and rebuilding your lives.

22
 TYPES OF INSURANCE

Life throws many unexpected things at all of us. While we usually can't stop these things
from occurring, we can opt to give our lives a bit of protection. Insurance is meant to give us
some measure of protection, at least financially, should a disaster happen. There are
numerous insurance options available and many financial experts tell us that we need to have
these insurance policies in place. Following are the types of insurance.

23
 Lif

Life Term plan

Traditional plan
ULIP
Insurance

General Health Insurance

Home Insurance
Motor Insurance
Insurance Fire Insurance

e insurance

Life Insurance is an arrangement between the Insurance company/Government which

guarantees of compensation for loss of life in return for payment of a specified premium. In
Life Insurance, the beneficiary whose name has been mentioned in the contract receives the
specified sum, from the insurer in case of happening of the event i.e. Loss of Life.

A life insurance policy is a type of insurance that provides coverage against the unexpected
death of the policyholder or after a set-period of time when the policy matures. In order to
avail this protection, the insured pays a certain amount as premium towards maintaining the
policy.

It is nothing but a safety net which provides financial security/protection against loss of life.
The primary purpose of a life insurance policy is to protect the financial interests of the
insured’s family.

There are 3 basic aspects related to life insurance, namely:

 Premium – An individual is accorded cover only if he/she pays a certain sum of

money towards the policy. This is termed the premium. One can consider it to be the initial
investment which offers returns in the future.

24
 Death Benefit/Sum Assured – This is the money which the insurer assures to pay to
the nominee/beneficiary of the policyholder after his/her demise. This varies based on a
number of parameters.
 Term – Each insurance policy is in affect for a specific period which can be chosen
when purchasing the policy. This is called the term, and it could vary based on the type of
policy chosen.

Benefits of Life Insurance

1. Risk Coverage: Insurance provides risk coverage to the insured family in form of
monetary compensation in lieu of premium paid.

2. Difference plans for different uses: Insurance companies offer a different type of plan to
the insured depending on his need for insurance. More benefits come with the more premium.

3. Cover for Health Expenses: These policies also cover hospitalization expenses and
critical illness treatment.

4. Promotes Savings/ Helps in Wealth creation: Insurance policies also come with the
saving plan i.e. they invest your money in profitable ventures.

5. Guaranteed Income: Insurance policies come with the guaranteed sum assured amount
which is payable on happening of the event.

6. Loan Facility: Insurance companies provide the option to the insured that they can
borrow a certain sum of amount. This option is available on selected policies only.

7. Tax Benefits: Insurance premium is tax deductible under section 80C of the income tax
Act, 1961.

TYPES OF LIFE INSURANCE

25
 TRADITIONAL
PLAN

TERM PLAN

ULIP

TRADITIONAL PLAN

Definition: Traditional insurance plans provide multiple benefits like risk cover, fixed
income return, safety and tax benefit. Traditional Insurance plans are the oldest plans and
cater to individuals with a low risk appetite.
Description: Traditional insurance policy plans provide the sum assured and a guaranteed or
a vested bonus at maturity. These plans take a limited exposure in high risk equity and hence
the downside probability is also low. These plans are suitable for the purpose of tax planning.
Unlike ULIPs, premature withdrawal is normally not allowed in the case of traditional plans.

Reasons why Traditional Life Insurance Plans are advisable?

 As a traditional insurance policy works on the 90/10 rule in the industry, the insurance
company can retain only 1/10 of the profits. The rest of it would be shared with the customers

 You get higher returns on investments

 It makes for a risk-free option, as the investment risk is entirely borne by the
insurance company

 Traditional Insurance is closer to protection than ULIPs

26
 Traditional Insurance Plans offer built-in guaranteed benefits, leaving behind the
chances of miss-selling

Features of traditional plan

The following are the basic features of traditional life insurance plans:

[Link] money that you pay as premiums are invested in very low risk financial instruments.
Since the risk is very low, the returns too are low.

[Link] cannot decide or participate in how your money should be invested. It is decided by the
insurance company and controlled and monitored by them.

[Link] plans offer either a Guaranteed Maturity Amount or offer a bunch of Bonus Amounts
which are declared at various points during the term of the policy.

[Link] plans don’t offer flexibility. You have to be invested for the length of the policy term.
If you try to surrender the plan mid-way, you will get back much less than the amount of
money you have paid as premiums.

[Link] amount of insurance cover which you get in these plans is very limited. Most plans will
offer a 10 times cover of the amount of annual premium that you pay. So if you are paying an
annual premium of Rs. 50,000 you will get a cover of Rs. 5,00,000. Surely 5 lakhs is not a
sufficient amount of insurance cover for your family. So strongly recommended that you take
a term plan before venturing into investment plans.

[Link] are based on the age at the time of entry, life insurance & the period for which
coverage is required.

[Link] paid qualifies for tax benefit under section 80c

[Link] value and the death benefit is tax free under section 10(10D)

TERM PLAN

27
 Term life insurance or term assurance is life insurance that provides coverage at a fixed rate
of payments for a limited period of time, the relevant term. After that period expires,
coverage at the previous rate of premiums is no longer guaranteed and the client must either
forgo coverage or potentially obtain further coverage with different payments or conditions.
If the life insured dies during the term, the death benefit will be paid to the beneficiary. Term
insurance is typically the least expensive way to purchase a substantial death benefit on a
coverage amount per premium dollar basis over a specific period of time.

Term insurance is a life insurance product offered by an insurance company which offers
financial coverage to the policy holder for a specific time period. In case of death of the
insured individual during the policy term, the death benefit is paid by the company to the
beneficiary.
Among life insurance plans, term insurance provides the highest life insurance coverage for
the lowest premiums during the period of the plan.

In your absence, not only does your family remains financially independent, but also is able
to fulfil its future needs like a young child’s higher education.

Features of term plan

 Save Tax U/S 80 - The premium you pay for your term insurance plan can save tax
for you. Critical illness premium saves tax for you u/s 80D, while life insurance premium is
counted u/s 80C of Income Tax, subject to conditions.

 Long Policy Term - You can opt for a longer policy term to stay protected. You can
stay covered for up to 50 years with a term life cover.

 Low Entry Age - Most term Plans have a minimum entry age of 18 years; that is,
you can buy term insurance cover as soon as you hit adult age.

 Death Benefit as Regular Income - Modern term insurance plans allow you to
give your dependents a regular income along with the lump-sum benefit in the event of your
unfortunate demise.

 Premiums Returned on Survival - You can now receive all your money back if
you survive the policy term. T erm insurance plans with the return of premium benefit offer
to return all the paid premiums on the policy as survival benefit.

28
 Add Disability Benefit to Your term plan - Any kind of disability due to
accident or illness can affect your income earning capacity. You can add disability benefit
with your term plan at affordable prices. The disability cover is available on payment of
additional premium.

 Cover Against Life Threatening Diseases - Cancer, heart attack, renal failure are
some curable diseases which can be life-threatening. Don’t let money concern you on the way
to the cure from these diseases. Critical illness cover is available on payment of additional
premium

 High Maturity Age - Of all life insurance plans, term insurance offers the life cover
for the highest age bracket. You can continue the term-insurance cover up to the age of 85

Why should you buy Term Insurance?

Death, disability, disease, all are realities seldom talked about. However, all three are realities
we cannot possibly overcome with certainty.

Term insurance is one tool, which can save you and your family from the financial hardships
brought upon by these three and similar disastrous conditions.

Consider for example a family of four, where the father is the primary breadwinner. The
family needs about Rs. 50,000 a month to fund regular expenses like rent, food, other
groceries, electricity, water, education fee etc Debts, if any are over and above this.

In case of an unfortunate event, life continues and so do these quintessential expenses. The
family will still need Rs. 30,000 to 40,000 a month to meet all their needs. Here, an adequate
term insurance cover comes into the picture. It provides for the family with the following:

 A Lump Sum to meet their Immediate need

 A Regular income to meet their household income (if opted)

The loss of life cannot be compensated, however, a term plan can help to tide over the
financial requirements of a family.

29
Term Insurance – Benefits

 High Life Insurance Amount at affordable premiums: Term insurance plans

provide large amount life insurance cover at an affordable premium. This cover can
compensate for several years of lost earnings.

 Cover Against Critical Illnesses: Along with providing life cover, a new-age term
plan like ICICI Pru I Protect Smart also provides protection against critical illnesses.
For a small additional premium, Critical Illness Cover provides lump sum payments
when a critical illness like a heart attack, cancer, kidney failure etc is first diagnosed.

 Support In Case Of Disability: In new-age Term plans such as ICICI Pru I Protect
Smart, the insurance company pays your future premiums in case of total and
permanent disability. As a result, your life insurance cover continues even if you are
unable to pay premiums.

 Additional Security: To increase the security of your family, a Term Policy

provides additional pay-out (up to ₹2 crores) in case of an accidental death. For
example, if your Life Cover is ₹1 crore, a Term Insurance plan with Accident Cover
pays ₹2 crores to your family in case of an accidental death+.

 Tax Benefits: Term Insurance plans offer tax benefits on premiums paid up to
₹46,800 under Section 80C. New-age Term plans with critical illness cover also offer
additional tax benefits on premiums paid up to ₹7800 under Section 80D. You also
get tax benefits subject to conditions under Section 10(10D) on the money that your
family receives in case of an unfortunate event.

ULIP

ULIP stands for unit linked insurance plans. ULIP is a combination of insurance and
investment. Here policyholder can pay a premium monthly or annually. A small amount of
the premium goes to secure life insurance and rest of the money is invested just like a mutual

30
fund does. Policyholder goes on investing through the term of the policy – 5,10 or 15 years
and accumulates the units. ULIP offers investors options that invest in equity and debt.

Unit Linked Insurance Plan (ULIP) is a mix of insurance along with investment. From a
ULIP, the goal is to provide wealth creation along with life cover where the insurance
company puts a portion of your investment towards life insurance and rest into a fund that is
based on equity or debt or both and matches with your long-term goals. These goals could be
retirement planning, children’s education or another important event you may wish to save
for.

How does ULIP work?

When you make an investment in ULIP, the insurance company invests part of the premium
in shares/bonds etc., and the balance amount is utilized in providing an insurance cover.
There are fund managers in the insurance companies who manage the investments and
therefore the investor is spared the hassle of tracking the investments.

ULIPS allow you to switch your portfolio between debt and equity based on your risk
appetite as well as your knowledge of the market’s performance. Benefits like these which
offer investors the flexibility of switching is a huge factor contributing to the popularity of
these investment instruments.

Lock-in-period of ULIP

One of the changes brought about by the Insurance Regulatory and Development Authority of
India (IRDAI) in the year 2010 as regards ULIPs, was to increase the lock in a period from 3
years to 5 years. However, insurance being a long-term product, as an investor you may not

31
really reap the benefits of the policy unless you hold it for the entire term of the policy which
can range from 10 to 15 years.

Income Tax Benefits

Premium paid on ULIPs is eligible for a deduction under Section 80C up to a maximum of Rs
1.5 lakhs during a year. Further, the amount you receive on maturity is tax exempt under
Section 10(10D).

Benefits of ULIP

 Life cover: First and foremost, with ULIPs you get a life cover coupled with
investment. It offers security that a taxpayer’s family can fall back on in case of
emergencies like the untimely death of the taxpayer, etc.

 Income tax benefits: Not many are aware that the premium paid towards a ULIP is
eligible for a tax deduction under Section 80C. Additionally, the returns out of the
policy on maturity are exempt from income tax under Section 10(10D) of the Income-
tax Act. This is a dual benefit that you can claim with this policy.

 Finance Long Term Goals: If you have long-term goals like buying a house, a
new car, marriage, etc., then ULIP is a good investment option because the money
gets compounded. As a result, the net returns are generally more. This stands true
even if you want to exit after the 5 year lock-in period in comparison to not having
invested the amount at all and retaining it in a savings account or in the form of an
FD. But, under ULIP, the mantra is to always keep the policy going for a longer time
horizon to reap the best out of it.

 The flexibility of a portfolio switch: As already mentioned, ULIPS are usually

designed in a way that they allow you to switch your portfolio between debt and
equity based on your risk appetite as well as your knowledge of how the market is
performing. Insurance companies, on the other hand, allow a very few numbers of
switches free of cost.

Types of fees and charges

32
In every investment, there are various charges that need to be paid. In the case of ULIP, the
charges can be broadly classified as:

a. Premium Allocation Charge: Premium Allocation Charge is deducted as a fixed

percentage from the premium paid in the initial years of the policy. This is charged at a higher
rate. The charges include the initial and renewal expenses and intermediary commission
expenses. It is a front load charge as it is deducted from your premium paid.

b. Mortality Charges: This charge is to provide for the insurance coverage under the plan.
Mortality charges depend on a number of factors like age, sum assured, etc., and is deducted
on a monthly basis.

c. Fund Management Charges: Fund Management Charge is the fee imposed by the
insurance company for the management of the various funds in the ULIP. It is levied for the
management of the funds and is deducted before arriving at the NAV figure. The maximum
charge allowed is 1.35 percent per annum of the fund value and is charged daily. Generally,
insurers levy the maximum amount allowed in equity funds, while the charge on non-equity
funds is much lower.

d. Administration charges: This charge is levied for the administration of the policy and
it is deducted on a monthly basis by the cancellation of units from all funds chosen. This
charge can be levied at a fixed rate or as a percentage of your premium.

33
 GENERAL INSURANCE

General insurance includes insurance policies that protect your property and your
financial risk, including motor vehicle, home building and contents and travel insurance.

General insurance helps us protect ourselves and the things we value, such as our homes, our
cars and our valuables, from the financial impact of risks, big and small – from fire, flood,
storm and earthquake, to theft, car accidents, travel mishaps – and even from the costs of
legal action against us. And we can choose the types of risks we wish to cover by choosing
the right kind of policy with the features we need.

In general, insurance works by spreading the cost of unexpected risks among a large number
of people in the same region who share similar risks.

When you take out an insurance policy, you pay a monthly or annual premium. That money
joins the premiums of many thousands of other policyholders and goes into a big pool of
funds.

With any luck, you will never need to draw on that pool. But if you happen to be one of the
unlucky ones affected by an unexpected calamity, perhaps through severe weather or
accident, that pool of funds can be used to help you up to the limit you have selected in your
policy.

If things go wrong, your insurer may either repair or replace the items that have been lost or
damaged, depending on the terms of your policy. You may also have the choice of receiving
a cash settlement for the amount of money agreed in your policy.

34
How does General Insurance work?

 General insurance works by the procedure where you need to buy insurance against
the things you want to get insured like your home, car, etc.

 Every insurer will give you a list of things that can be covered under the policy; you
must make sure to read them in order to avoid any consequences in the future.

 In case you incur a loss of the insured things, you can claim money from the
insurance company, if your claim is valid.

 As soon as your insured item gets damaged by any means, it is ideal to contact your
insurer to know the formalities to get the money.

 The company will assess your claim and will contact you after some time to tell if
your claim can be approved.

 The insurer will make sure that the claim is genuine and will give you your money if
it is proved to be real.

Importance and Benefits of General Insurance

General Insurance helps you lead a risk-free life. It makes sense to insure things bought from
your hard-earned money. Below are few points showing the importance of general insurance:

35
  Winning Peace of Mind

Since life is full of uncertainties, the primary reason people opt for insurance is to earn peace
of mind. General insurance can give you time to enjoy with your family without worrying
about your hard-earned property damage.

 To avoid car damage expenses

If you have insured your car, you do not need to worry about the costs of the damage
occurred. You can claim your insurance amount to pay for your loss.

 To be secured from any kind of mishap

Paying regular insurance premiums is just like doing saving for future needs. The premiums
which we pay will be useful in times accidents or misfortunes. You will get an additional
interest from the insurance company and it will depend upon insurance policy which you buy.

 To Cover Hospital Bills

General insurance can cover your hospital bills if you have bought health insurance. You can
also avail of additional health insurance policies, in case the insurance money is not
sufficient.

 For securing your property

With the full range of choices from various types of insurance, you can select the one or
many to safeguard your family as well as your assets. The general insurance financially
protects your property from any damage.

 Secure business

The general insurance plans include a policy to protect the property and anything related to
your business. This can save you from facing massive financial loss due to natural calamity,
theft or any other unfortunate reasons.

Tax benefits of General Insurance

36
Out of all kinds of general insurance, health insurance has the tax benefits for individual
insurers. As per section 80D of Income Tax Act, 1961, the insurance premium paid on health
insurance plan is a qualified deduction and can be claimed against the taxable income of a
person provided premium must be paid during a financial year.

TYPES OF GENERAL INSURANCE

Insurance can be widely segregated in three categories–life, health and general. General
insurance is insurance for valuables other than our life and health. General insurance covers
the insurer against damage, loss and theft of your valuables. The premium and cover of
general insurance depends upon the type and extent of insurance. A general insurance policy
typically has a period of a few years. In India, general insurance policies are of the following
types:

37
 Health Home
Insurance Insurance

Motor Fire
Insurance Insurance

Health insurance

Health insurance is an agreement whereby insurance company agrees to undertake a

guarantee of compensation for medical expenses in case the insured falls ill or meets with an
accident which leads to hospitalization of the insured. Generally, insurance companies have
tie-ups with the leading hospitals so as to provide cashless treatment to the insured. In case
the insurance company has no tie-ups with the hospital, they reimburse the cost of expenses
incurred by the insured. The government also promotes health insurance by providing a
deduction from income tax.

38
Health insurance is a way to pay for health care. It protects you from paying the full costs of
medical services when you’re injured or sick. Just like car insurance or home insurance, you
choose a plan and agree to pay a certain rate, or premium, each month. In return, your health
insurer agrees to pay a portion of your covered medical costs. Payments by your health
insurance are typically based on discounts they negotiate with doctors and hospitals.

Benefits of having a Health insurance Policy

1. Cashless Treatment: If you are insured, you can get cashless treatments as your
insurance company would work in collaboration with various hospital networks.

2. Pre and post hospitalization cost coverage: Insurance policy also covers pre and post
hospitalization charges up to the period of 60 days, depending on the insurance plans
purchased.

3. Transportation Charges: Insurance policy also covers the amount paid to ambulance
towards the transportation of insured.

4. No Claim Bonus (NCB): This is the bonus element which is paid to the insured if the
insured does not file a claim for any treatment in the previous year.

5. Medical Check-up: Insurance policy also provide options for health check-ups. Free
health check-up is also provided by some insurers based on your previous NCBs.

6. Room Rent: Insurance policy also covers room expenses depending on the premium
being paid by the insured.

7. Tax Benefit: Premium paid on Health insurance is tax deductible under section 80D of
the Income Tax Act.

Types of Health Insurance

1. Individual Health Insurance: This policy covers the health expenses and
hospitalization expenses of individual who has taken the policy. Premium under this policy is
determined as per the age of insured.

2. Family Health Insurance Plan: Under this policy, an individual can include all the
family members against multiple diseases under a single cover. Family health plan offers a

39
fixed sum assured for the family members, which can be availed by all members of the
family or by any one individual in the family.

3. Senior Citizen Health insurance Plan: This policy is designed for the senior citizens
or individuals over 60 years of age offering protection from health issues during old age.

4. Surgery and Critical Illness Insurance Plan: This plan is suitable for the insured
that requires treatment against critical illness, such as kidney failure, paralysis, cancer, heart
attack etc. As the medical expenses of these treatments are very high, the premium applicable
to these types of policies is also high.

5. Maternity Health Insurance Plan: This policy covers costs, including pre and
postnatal care, child delivery expenses of new born babies. This policy is also covered for the
new born up to a certain period of time as mentioned in the plan. Ambulance costs are also
covered.

6. Personal Accident Plan: This policy covers hospitalization expenses in the event of an
accident. Premium amount is depending upon the amount of cover taken.

7. Unit Linked Health Plan: These plans offer a unique combination of insurance and
savings both at the same time. This policy helps in building a corpus which can be used to
meet those expenditures which are not covered by the insurance policy.

Tax Benefits on Health Insurance

Under this section, deduction of upto ₹100000 can be claimed in respect of premium paid by
any mode other than cash towards health insurance policy of various general insurance
companies.

scenarios Health insurance premium paid for & Tax deduction under
maximum tax deduction limits section 80D
Self-spouse & Parents (whether

40
 dependent children dependent or not)
No one in .your Upto ₹ 25000 Upto ₹ 25000 ₹ 50000
family has attained
60 years of age
The eldest member Upto ₹ 25000 Upto ₹ 30000 ₹ 55000
in your family
(yourself, spouse &
dependent children
) is less than 60
years &your parents
(either mother or
father ) are above 60
years of age
The eldest member Upto ₹ 50000 Upto ₹ 50000 ₹ 100000
in your family
(yourself, spouse &
dependent children
) has attained 60
years &your parents
(either mother or
father ) are above 60
years of age

Home insurance

A home offers the peace, serenity and warmth that you may be looking for after a tiring day at
work. Therefore, buying a home insurance is utmost important. It offers protection to the
entire structure of your house and ensures utmost security for all the belongings that you may
collected over the years. There are certain home insurance policies that offer coverage till 5
years. You would have to pay a premium based on the value of the belongings in your home.

Home Insurance Covers the Structure and Content of your home from below

Fire and Peril Cover:

 Due to Fire, Explosion

41
  Aircraft Damage
 Lightning
 Earthquake
 Missile Testing Operations

Natural Calamities

 Flood
 Hurricane
 Storm
 Landslide and Rockslide
 Cyclone, etc.

Man Made Calamities

 Riot
 Strike
 Theft or Burglary

Home insurance, however, doesn't include loss or damage due to nuclear perils, any
consequential loss, damage due to war, damage or any loss due to pollution, contamination,
etc. Also, valuables like bullion, gold and silver are not covered, however, if you wish to,
then you can certainly opt for a special cover.

Motor insurance

Motor insurance includes car insurance and two-wheeler insurance, covers all damages and
liability to the vehicle. Moreover, according to the Motor Vehicles Act, 1988, driving a motor
vehicle without insurance in a public place is a punishable offence.

A motor vehicle can be covered either by a Liability Only policy which is a statutory
requirement and covers the legal liability for injury, death, and/or property damage caused to
a third party in the event of an accident caused by or arising out of the use of the vehicle, or a
package policy which includes the Liability Only policy and covers the damage to owner’s
vehicle, usually called Third Party Insurance.

Let’s look at the two key types:

42
 1. Car Insurance

It’s precious—your car. You paid lakhs of rupees to buy that beauty. Even a single scratch can
be painful, forget about bigger damages.

Car insurance can reduce this pain for a few thousand rupees.

How it works:

What the insurer will pay for depends on the type of car insurance plan you purchase

2. Two-wheeler Insurance

This is your bike’s guardian angel. It’s similar to Car insurance.

You cannot ride a bike or scooter in India without insurance.

How it works:

As with car insurance, what the insurer will pay depends on the type of insurance and what it
covers.

Types of Motor Insurance:

Third Party Insurance Comprehensive Car Insurance
Compensates for the damages caused to Covers all kinds of damages and liabilities caused to you or a third
another individual, their vehicle or a third- party. It includes damages caused by accidents, sabotage, theft,
party property. fire, natural calamities, etc.

43
Fire Insurance

Fire insurance pays or compensates for the damages caused to your property or goods due to
fire.

It covers the replacement, reconstruction or repair expenses of the insured property as well as
the surrounding structures.

It also covers the damages caused to a third-party property due to fire.

In addition to these, it takes care of the expenses of those whose livelihood has been affected
due to fire.

Types of fire insurance

Some of the common types are:

Valued policy The insurer firsts value the property and then undertakes to pay
compensation up to that value in the case of loss or damage.
Floating policy It covers the damages to properties lying at different places.

Comprehensive This is known as an all-in-one policy.

policy It has a wide coverage and includes damages due to fire, theft, burglary,
etc.
Specific policy This covers you for a specific amount which is less than the real value of
the property.

44
 RESEARCH METHODOLOGY

Research always starts with a question or problem. It’s ;purpose is to question through the
application of the scientific method. It is a systematic and intensive study directed towards a
more complete knowledge of the subject studied. Marketing research is the function which
links the consumer, customer and public to the marketer through information-information
used to identify and define marketing opportunities and problems

Generate, refine, and evaluate marketing actions, monitor marketing actions,

monitor marketing performance and improve understanding of market as a process. The
data for this research project has been collected through self-admiration. A structured
questionnaire was framed as it is less time consuming, generates specific and to
the point information, easier to tabulate and interpret. Moreover respondents
prefer to give direct answers. In questionnaires open ended and closed ended, both
the types of questions has been used.

SAMPLING DESIGN

45
Since it is not possible to study whole population, it is necessary to obtain representative
samples from the population to understand its characteristics.

 Sampling Area : Chandigarh & Yamunanagar

Sampling Unit: Individual respondents for studying consumer buying behavior

selected randomly.

 Sampling technique : Random sampling

 Sample size : 100 respondents through different parts of locality

 Research instrument : Structured Questionnaire

 Contact method : Direct Interview

DATA COLLECTION

There are two types of data collection method use in my project report. –

 Primary data
 Secondary data

For my project, I decided on primary data collection method for observing the working of
company and approaching customers directly in the field with the help of
questionnaire prepared.

I decided on Secondary data collection method by referring to various websites, books,

magazines, journals and daily newspapers for collecting information regarding project
under study.

46
 DATA ANALYSIS AND INTERPRETATION

Do you have any insurance policy?

In which company you would like to have insurance plan?

47
In which company you will prefer to purchase life insurance product?

Reason behind choosing insurance plan

Which feature of insurance policy will you consider while buying?

48
What kind of insurance plan would you prefer?

How have you bought/ would buy an insurance policy?

Who influence you to get an insurance policy?

49
What is the average term of policies do you have?

How regularly do you pay your premiums?

50
Whether your policy covers all your family members?

What is your annual premium?

What is your average sum insured?

51
According to you, what is the right age to buy an insurance policy?

Are you satisfied with your insurance policy?

FINDINGS

 Based on the survey, it was found that 50% of the people still are not insured.

 LIC tops the list when it comes to brand recall.

 Most of the people prefer policies for short term i.e. for 5-10 years only.

 Many people believe that policies helps to save tax but majority of the
policyholders perceive it as a tool of safety.

 More than 50% had bought the policies from life advisor’s rather than approaching
directly to the company.

52
 Although there are plans for different age groups of the society but majority of people
prefer buying insurance at 25-35 years.

 Insurance also gives advantage to grow your money at a rate greater than FD’s and other
securities so people prefer investing in money back policies.

 Last but not the least is that the level of satisfaction is quite good among the policyholders

LIMITATIONS

Some of the difficulties and limitations faced during my training are as follows:

Lack of awareness among the people

– This is the biggest limitation found in this sector. Most of the people are not
aware about the importance and the necessity of the insurance in their life.

Perception of the people towards insurance sector-

P e o p l e s t i l l consider insurance just as a Tax saving device. So today also there is always
a rush to buy an Insurance Policy only at the end of the financial year.

53
Insurance does not give good returns-

Still people think that Insurance does not give good returns. They are not aware of the
modern Unit Linked Insurance Plans which are offered by most of the Private sector players.
They are still u n d e r t h e p e r c e p t i o n t h a t i f t h e y t a k e I n s u r a n c e t h e y w i l l g e t
o n l y 5 - 6 % r e t u r n s . Nowadays most of the modern Unit Linked Insurance Plans gives
returns which are many times more than that of bank Fixed deposits, National
saving certificate, and PPF.

Lack of awareness about the earning opportunity in the insurance sector-

People still today are not aware about the earning opportunity that the insurance
sector gives. Companies in order to beat the competition and to increase their
Insurance Advisors and increase their reach to the customers are giving very high
commission but people are not aware of that.

Increased competition –

Today the competition in the Insurance sector has become very stiff. Currently
there are more than 20 Life Insurance companies working in India. Today each and
every company is trying to increase their Insurance Advisors so that they can increase their
reach in the market. This situation has created a scenario in which to recruit Life insurance
Advisors and to sell life Insurance Policy has become very difficult.

SUGGESTIONS

 As LIC is still the most recalled brand among the masses so more advertisement needs to
be done via television, radio, hoardings, CSR activities, promotional events etc.

 More than 50% of the market is untapped so networking via life advisors, corporate firms,
other agencies should be done to tap the untapped market.

 Group insurance should be provided to schools. colleges. societies & different

organizations.

 As majority of the population lives in rural areas so they should be targeted simple and
affordable plans for them.

54
 Life Advisor are the one which brings majority of the business for the company. So more
and more advisors should be recruited and paid good commission for their work.

 In today’s corporate world customer satisfaction is the key element to earn profit and run
the business. So the best service should be given before and after the commencement of the
policy.

 Better service quality should include-issuing policy on time, providing claims on time,
proper communication via mail or courier on timely basis to aware customer about the policy
status.

CONCLUSION

 During the survey, it has been found that people have great awareness about various
companies but a lot more has to be done.

 People are beginning to look beyond LIC for their insurance needs and are willing to trust
private players with their hard earned money.

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 People in general have been influenced by the marketing activities of insurance
companies. A high penetration of print, radio and TV ad campaigns over the years
is beginning to have its impact now.

 Another important trend was in terms of people viewing insurance as a tax saving and
investment instrument as much as protective one.

 The general satisfaction levels among public with regards to policy and agents
still requires improvement.

REFERENCES

 [Link]
people/

 [Link]
[Link]

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 [Link]

 [Link]
to-know-about-traditional-insurance-plans

 [Link]

 [Link]

 [Link]

 [Link]
[Link]

 [Link]

 [Link]

 [Link]

 [Link]

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 ANNEXURE

1. Name:

2. Age:

3. Gender:

o Male

o Female

4. Marital status:

o Married

o Unmarried

5. Educational qualification:

o Below matric

o Matric

o Graduate

o Post graduate

o Any other

6. Source of earning:

o Salaried

o Business

o Self employed

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 o Retired

o Defence sector

7. Family income slab:

o Nil

o 10%

o 20%

o 30%

8. Do you have any insurance policy?

o Yes

o No

9. In which company you would like to have insurance plan?

o Private company

o Public company

o Any other

10. In which company you will prefer to purchase life insurance product?

o LIC
ICICI Prudential life insurance

o HDFC standard life insurance

o SBI

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 o Any other

11. Reason behind choosing ….

o Safety

o Tax saving

o Investment

o For future uncertainty

12. Which feature of insurance policy will you consider while buying?

o Money back guarantee

o Large risk coverage

o Low premium

o Company credibility

o Easy access to agent

13. What kind of insurance plan would you prefer?

o Term plan

o Health insurance

o Traditional

o ULIP

14. How have you bought/ would buy an insurance policy?

o Customer approaching insurance company/ agents

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 o Insurance company/ agent approaching the customer

15. Who influenced you to get an insurance policy?

o Media

o Family & Friends

o Insurance agents/ Banks

o Others

16. What is the average term of policies do you have?

o Less than 5 years

o 5-10 years

o 10-20 years

o More than 20 years

o Whole life

17. How regularly do you pay your premiums?

o Monthly

o Quarterly

o Half yearly

o Yearly

18. Whether your policy covers all your family members?

o Yes

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 o No

19. What is your annual premium?

o Below ₹5000

o ₹5000-₹10000

o ₹10000-₹25000

o Above ₹25000

20. What is your average sum insured?

o Below ₹100000

o ₹100000-₹500000

o ₹500000-₹1000000

o Above ₹1000000

21. According to you, what is the right age to buy an insurance policy?

o Less than 25 years

o 25-35 years

o 35-45 years

o More than 45 years

22. Are you satisfied with your insurance policy?

o Yes

o No

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63