bharti project final

8/6/2019 Bharti Project Final

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LIST OF TERMS USED IN LIFE INSURANCE INDUSTRY

Age limits

The predefined minimum and maximum ages below and above which the insuring company

will not accept applications or may not renew policies.

Annuity

A scheme under which a certain amount is paid at regular yearly/half yearly/

quarterly/monthly intervals.

Annuity Plans

These plans provide for a "pension" amount (or a mix of a lumpsum amount and a pension)

to be paid to the insured or his spouse. In the event of death of both of them during the

policy period, a lumpsum amount is paid to the next of kin.

Annuitant

Annuitant is the person who receives certain amounts as income at yearly/half yearly/

quarterly/monthly intervals from an annuity contract. Usually the owner of the contract or

his or her spouse.

Assignment

This term refers to the process of legal transference, by which the policyholder can pass on

his interest to another person. An assignment can be made by an endorsement on the

policy document or as a separate deed. Assignment can be of two ty pes

1. Conditional assignment

2. Absolute Assignment

Adverse Selection

The tendency of persons exposed a higher risk to seek more insurance coverage than those

at a lower risk. Insurers react either by charging higher premiums or not insuring at all, as in

the case of floods. Adverse selection concentrates risk instead of spreading it. The fact is

that insurance works best when risk is shared among large numbers of policyholders.

AIDS

Acronym for Acquired Immune Deficiency Syndrome, a disease.


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Assignee

The person to whom the benefits of a life policy are assigned.

Assignor

Assignor is the person who holds the right/title under the policy and who can make a valid

assignment

Beneficiary

The person(s) or entity(ies) (e.g. corporation, trust, etc.) named in the policy as the recipient

of insurance proceeds upon the death of the insured. (life)

Bonus

This is the amount added on to the basic sum assured under a with -profit life insurance

policy.

Binding Receipt

A temporary receipt given for a premium payment accompanying the application for

insurance. If the policy is approved, this binds the company to make the policy effective

from the date of the binding receipt.

Branch Office System

This is a type of life insurance marketing system under which the company opens branch

offices in various areas. Here the Salaried Branch Managers, who are employees of the

company, are responsible for hiring and training new agents.

Claim Amount

It is the amount payable by the insurer to the insured, or the assignee / beneficiary un der a

policy on a claim arising

Dating Back

Dating Back or Back Dating is an option to the life assured to get the advantage of lower age

wherein the policy is commenced from a date earlier than the actual date of signing of

proposal form. However back dat ing is limited to one year.


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Double/Triple Cover Plans

These plans offer the beneficiaries double/triple the sum assured on death of life assured

during the term of the policy. On survival to the date of maturity, the basic sum assured is

paid to the assured. These are low-premium plans, most useful for situations such as

housing.

Days of Grace

Policyholders are expected to pay regular premium on due dates. A period is 15 -30 days

from the due date is allowed as grace to make payment of premium. This duration is known

as days of grace.

Death Benefit

The payment made to a beneficiary upon the death of the insured person.

Declining

The process of the insurer refuses to insure an individual after careful evaluation of the

application for insurance and any other risk factors.

Deferred Annuity

An annuity plan where the first annuity payment becomes payable after a chosen period

that exceeds one year.

Deferment date

It is the date on which the deferment period ends.

Deferment period

This is the period from the date of commencement of the policy to the date of

commencement of risk on the child's life under a Children's Deferred Endowment Assurance

policy.

Deferred Group Annuity

A type of group annuity providing for the purchase each year of a paid -up deferred annuity

for each member of the group. Here the total amount received by the member at

retirement is the sum of these deferred annuities.


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Defined Benefit Plan

A pension plan stating either (1) the benefits to be received by employees after retirement

or (2) the method of determining such benefits. The employer's contributions under such a

plan are actuarially determined.

Defined Contribution Plan

A plan under which the contribution rate is fixed and benefits to be received by employees

after retirement depend to some extent upon the contributions and their earnings.

Deposit Administration Group Annuity

A type of group annuity providing for the accumulation of contributions in an undivided

fund out of which annuities are purchased as the individual members of the g roup retire.

Deposit Premium

The premium deposit paid by a policyholder when an application is made for an insurance

policy and is applied toward the actual premium when asked to pay.

Deposit Term Insurance

This is a form of term insurance, not really invo lving a "deposit," but one in which the first -

year premium is more than subsequent premiums.

Endowment Policy

The insured amount is payable either at the end of specified number of years or upon the

death of the insured person, whichever is earlier. The as sured has to pay an annual

premium which is determined on the basis of the assured's age at entry and the term of the

policy.

EPDB

Extended Permanent Disability Benefit

Female lives

Category I: Women with income earned by virtue of their employment in any reputed

organisation or institution eligible for Non Medical Special Schemes. Valid for professionals

such as Medicine, Law, Charted Accountancy etc. and lady career agents of LIC.

Category II: Women with unearned income attracting payment on income tax or women

holding sizeable personal properties/investments yielding income attracting assesment for

income tax.


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First Class Life

An Individual is categorised as First Class Life if he/she is eligible to have insurance coverage

at normal rates of premium.

First Unpaid Premium(FUP)

First unpaid premium refers to the first default in paying premium by the policyholder. On

payment of the due premium, a receipt is issued and this receipt indicates the date of next

due. If this due premium is not paid, then that date becomes the date of FUP.

Franchise insurance

A form of insurance in which individual policies are issued to the employees of a common

employer or the members of an association. This is done under an arrangement by which

the employer or association agrees to collect the premium and remit them to the insurer.

Grace Period

A specified period after a premium payment is due, in which the policyholder may make

such payment, and during which the protection of the policy continues

Graded Commission Scale

A commission scale providing for payment of high first-year commission and lower renewal

commissions.

Guaranteed Insurance Sum (GIS)

Guaranteed Insurance Sum is equal to purchase price paid for a pension along with final

bonus that may be earned on the paid up amount.

Gross Premium

The total premium paid by the policyholder.

Gross Rate

The sum of the pure premium and a loading element.

Group Contract

A contract of insurance made with an employer or other entity that covers a group of

persons identified as individuals by reference to their relationship to the entity.

Group Insurance


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Insurance covering a number of people under a single policy, issued to their employer with

whom they are working.

Guaranteed Addition

These Additions are calculated at a pre-defined rate per every thousand of sum assured.

They are added to the basic sum assured and are payable on admittance of claim. This

benefit is allowed exclusively for each year for which premiums are paid.

Insurable Interest

A condition in which the person apply ing for insurance and the person who is to receive the

policy benefit will suffer an emotional or financial loss, if any unforeseen event occurs.

Without insurable interest, an insurance contract is invalid.

Insurability

Insurability refers to all conditions pertaining to individuals seeking insurance; that affect

their health, susceptibility to injury and life expectancy; an individual's risk profile.

Insured

This is term that refers to the indivisdual, whose life is covered by a policy of insurance.

Immediate Annuity

An annuity providing for payment to the beneficiary immediately.

Lapsed Policy

This refers to a policy which has terminated and is no longer in force due to non -payment of

the premium due.

Life Assured

Life Assured refers to the person whose l ife is being insured.

Last Birth Day(l.b.d)

Age at last Birthday

Lien

some cases, extra risk is expected to decrease over a period of time. In such cases proposal

is considered and accepted with lien. Lien operates through out the period, on a decreasing

basis. In the event of death, during the lein period full sum assured is not payable.


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Eg: If 25% decreasing lein is imposed for 5 years. It is understood that in first year risk

cover(sum assured payable) is only upto 75%,second year- 80%, third year-85%, fourth year

90%, fifth year 95%, and from sixth year onwards lien is not operative.

Loyalty Additions

The loyalty addition is given upon the maturity of the policy, and not before. It is a small

percentage of the sum assured. Broadly speaking, loyalty addition is the difference between

the performance of the insurance company and the guaranteed additions.

Maturity

The date on which the face amount of a life insurance policy, if not previously invoked due

to the contingency covered (death), is paid to the policyholder.

Maturity Claim

The Payment made to the policyholder at the end of the chosen term of the policy is known

as Maturity Claim.

Misrepresentation

The act of misrepresenting any terms, benefits or payments of a policy, deliberately

misleading any interested public. It is the act of making, issuing, circulating or causing to be

issued or circulated an estimate, an illustration, a circular or a statement of any kind that

does not represent the correct policy terms, dividends or share of surplus or the name or

title for any policy or class of policies that does not in fact reflect its true nature.

Moral Hazard

Moral Hazard is said to exist in the case where there is an apparent absence of a genuine

need for a life insurance or when a proposal for insurance is submitted by an individual

beyond his means.

It also indicates increase in probability of loss that results from dishonesty in the character

of the insured person. Thus it is the dishonest tendencies on the part of the i nsured person

that may induce that person to attempt to defraud the insurance company.

Near Birth Day(n.b.d)

Age on nearest birthday

Nomination

An act by which the policyholder authorises another person to receive the policy monies.

The person so-authorised is called Nominee.


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Nominee

Nominee is the person who is nominated to receive the amount under a policy and to give a

valid discharge to the insurer on settlement of claim under a life insurance policy.

Non-Standard Life

Any individual, who cannot be gran ted a policy under normal rates of premiums but can be

granted with an extra premium over normal rates of premium, is considered as a Non -

Standard Life.

Occupational Hazards

Occupations which expose the insured to greater than normal physical danger by the very

nature of the work in which the insured is engaged, and the varying periods of absence from

the occupation, due to the disability, that can be expected.

Premium

The payment, or one of the regular periodic payments, that a policyholder makes to an

insurer in exchange for the insurer's obligation to pay benefits upon the occurrence of the

contractually-specified contingency (e.g., death).

Premium Back Term Insurance Plans

These provide for refund of all the premiums paid, in the event of the life assure d surviving

to the end of the policy term. The total sum assured is paid to the beneficiaries in the event

death occurs during the policy term.

Paid-up Insurance

Insurance policy on which all required premiums have been paid.

Paramedical Examination

Physical examination of an applicant by a trained person other than a physician.

Policy

This is the legal hardcopy document that has the conditions of the insurance contract,

formally issued by the insurer in the name of the insured. This document has to b e

produced to the insurer during the term of the policy in case of any changes, claims, etc

made in relation with the policy.


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Policy Period

The period during which a Policy contract offers insurance.

Policy year

Period between a Policies anniversary dates.

Policyholder's funds

Monies set aside by insurers to cover outstanding liabilities to Policyholders. Also known as

technical reserves.

Policyholder's surplus

Amount over and above liabilities available for an insurer to meet future obligations to it s

policyholders.

Policyholder's surplus ratio

The difference between an insurers' asset and its liabilities divided by its liabilities. This is

one measure of an insurer's financial strength.

Premium Notice

Notice of a premium due, sent out by the company or one of its agencies to an insured. It is

also refered to as "Renewal Notice".

Premium Waiver Benefit(PWB)

Premium waiver benefits are the benefits which can be availed under children's policies,

wherein the future premiums payable upto vesting date are waived in the event of death of

the proposer before the vesting date.

Paidup Value

Paidup value is the reduced amount of sum assured, paid by the insurer in case of

discontinuation of the payment of premiums, after paying the full premiums for the first

three years.

PDB

Permanent Disability Benefit


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Premium

Premium is the amount paid to secure an insurance policy.

Premium Waiver Benefit(PWB)

Premium waiver benefits are the benefits which can be availed under children's policies,

wherein the future premiums payable upto vesting date are waived in the event of death of

the proposer.

Proposal Form

It is a form which is to be completed for securin g an insurance policy.

Proposer

Proposer is a person who proposes the insurance policy.

Reinstatement

This process of the restoration of a lapsed policy to in -force status. Reinstatement can only

occur after the expiration of the grace period. The company may require evidence of

insurability (and, if health status has changed, deny reinstatement), and will always require

payment of the total amount of past due premium.

Risk

The obligation assumed by the insurer when it issues a policy. The spreading of risk across abroad base of the population, adjusted for statistical probability, and the protection against

catastrophic loss, is the entire purpose of insurance.

Rider

A provision attached to a policy that adds benefits not available in the original policy o r that

changes the original policy.

Rebating

Giving a consideration, usually all or part of the commission, to the prospect or insured asan inducement to buy or renew a policy. Rebating is officially prohibited, as it takes away

from the earning of the agent.

Reduced Paid-up Insurance

A form of insurance available as a non-forfeiture option. It provides for continuation of the

original insurance plan, but at a reduced amount.


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Renewable Term Insurance

Term insurance which can be renewed at the end of the te rm, at the option of the

policyholder and without evidence of insurability, for a limited number of successive terms.

The rates increase at each renewal as the age of the insured go up and apparent risk

increases.

Salary Saving Scheme

This scheme provides for payment of premiums by money deduction from the salary of the

employees by the employer.

Settlement Options

The several ways, other than immediate payment in cash, which a policyholder or

beneficiary may choose to have policy benefits paid.

Sub Standard Risk

Person who is considered an under-average or impaired insurance risk because of physical

condition, family or personal history of disease, occupation, residence in unhealthy climate

or dangerous habits.

Suicide Clause

Limitation in life insurance policies to the effect that no death benefits will be paid if the

insured commits suicide during a specified initial period, usually the first one year of the

policy.

Sum Assured

Sum assured is the amount that an insurer agrees to pay on the occurance of a s tated

contingency (eg: Death).

Surrender Value

Surrender Value is the amount payable to the policy holder on his surrendering his right

under a policy, and terminating the contract of insurance.

Survival Benefit

The payment of sum assured to the insured person which becomes due in installments

under a money back policy.

Target Pension


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This is the amount of pension which one wishes to receive under a pension policy.

Term

Term is the period for which insurance cover age is given.

Term Insurance Rider

An endorsement or attachment to a life insurance policy that provides additional term

coverage for only a specified, limited period. If the insured dies during this time, the

designated beneficiary(ies) can receive death benefit proceeds.

Term Life Insurance

A form of life insurance which provides coverage for a specified period of time and does not

build cash value.

Underwriting

The process of evaluating risks for insurance and determining in what amounts and on what

terms the insurance company will accept the risk.

Unearned Premium

The portion of a premium that a company has collected but has yet to earn because the

policy still has unexpired time to run.

Unenforceable Contract

The contract, though a valid one cannot be e nforced in a court of law because of lack of

some evidential features.

Uninsurable Risk

That which is not acceptable for insurance due to excessive risk.

Vesting Bonus

It is the Bonus, which the insurer declares after evaluating its assets and liabilities, and thatis added to the sum assured under a policy.

Vesting Date

This is the date from which the life assured ie., child becomes the absolute owner of the

policy.


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Void Contract

A contract obtained by fraud is a void contract. It is not a contract at all. Under this there

cannot be any action as no rights or obligations are cast on the parties to the contract.

Voidable Contract

A contract, which is valid until it is treated as voi d by the aggrieved party, is a voidable

contract. Usually in such an event, the insurer would be the aggrieved party and has the

option to repudiate liability.

INDUSTRY PROFILE INSURANCE INDUSTRY

1.1 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 par ticular event,

which may be certain or uncertain. The other party called insured pays in exchange a fixedsum 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 for the losses suffered due to the

happening of any unforeseen events.

1.2 IMPORTANCE OF INSURANCE:Insurance constitutes one of the major segments of the financial market. Insurance servicesplay 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.


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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 impro ved in terms of efficiency.

There are number of other hot 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 an d

non-life segment so there is lot potential to be tapped.

1.3PRINCIPLES OF INSURANCE:An insurance contract is based on some basic principles of insurance.

Main principles of Insurance:

y Utmost good faithy Indemnityy

Subrogationy Contributiony Insurable Interesty Proximate Cause

Utmost Good Faith (Uberrimae Fides)

It is the duty of the client to disclose all material facts relating to the risk being covered. A

material fact is a fact that would influence the mind of a prudent underwriter while d eciding

whether or not to accept a risk for insurance and on what terms. This duty to disclose

operates at the time of inception, at renewal as well as at any point mid term.

Indemnity

When the event that is insured against occurs, the Insured will be plac ed in the same

monetary position that he/she occupied immediately before the happening of the event.

In the event of a claim the insured must:

y Prove that the event occurred


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y Prove that a monetary loss has also occurredy Transfer any rights that he/she may be having for the recovery from another source

to the Insurer, if he/she is fully indemnified.

Subrogation

With regards to insurance, subrogation is a feature of principle of indemnity and therefore

only applies to contracts of indemnity and hence does not apply to life assurance or

personal accident policies. It aims to prevent an insured to recover more than the indemnity

that he receives under his insurance (where that represents the full amount of his loss) and

enables the insurer to recover or reduce t he loss.

Contribution

The right of an insurer to call on other insurers similarly, but not necessarily equally, liable

to the same insured to share the loss of an indemnity payment i.e. a travel policy might have

an overlapping cover with the contents sect ion of a household policy. The principle of

contribution permits the insured to make a claim against one insurer. The insurer then has

the right to call on any other insurers liable for the loss in order to share the claim

settlement

Insurable Interest

If an insured wants to enforce an insurance contract before the Courts he must have an

insurable interest in the subject matter of the insurance, which means that he benefits from

its preservation and suffers from its loss. In case of non -marine insurances, it is necessary

for the insured to have insurable interest when the policy is taken out and also at the date

of loss giving rise to a claim under the policy.

Proximate Cause

An insurer is liable to pay a claim under an insurance contract only if the loss th at gave rise

to the claim was proximately caused by an insured peril. This means that the loss should be

directly credited to an insured peril without any break in the chain of causation.

1.4HISTORY OF INSURANCE IN INDIA:In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (

Manusmrithi), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk

in terms of pooling of resources that could be re -distributed in times of calamities such as

fire, floods, epidemics and famine. This was probably a pre -cursor to modern day insurance.

Ancient Indian history has preserved the earliest traces of insurance in the form of marine


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trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing

from other countries, England in particular.

1818 saw the advent of life insurance business in India with the establishment of the

Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829,

the Madras Equitable had begun transacting life insurance business in the Madras

Presidency. 1870 saw the enactment of the British Insurance Act and in the last three

decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire

of India (1897) were started in the Bombay Residency. This era, however, was dominated by

foreign insurance offices which did good business in India, namely Albert Life Assurance,

Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for

hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in

India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to

regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable

the Government to collect statistical information about both life and non -life business

transacted in India by Indian and foreign insurers including provident insurance societies. In

1938, with a view to protecting the interest of the Insurance public, the earlier legislation

was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions

for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were

a large number of insurance companies and the level of competition was high. There were

also allegations of unfair trade practices. The Government of India, therefore, decided to

nationalize insurance business.

An Ordinance was issued on 19th

January, 1956 nationalising the Life Insurance sector

and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154Indian, 16 non -Indian insurers as also 75 provident societies 245 Indian and foreign

insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was

reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in the west and

the consequent growth of sea-faring trade and commerce in the 17th

century. It came to

India as a legacy of British occupation. General Insurance in India has its roots in the

establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British.

In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to

transact all classes of general insurance business.

1957 saw the formation of the General Insurance Council, a wing of the InsuranceAssociaton of India. The General Insurance Council framed a code of conduct for ensuring

fair conduct and sound business practices.

In 1968, the Insurance Act was a mended to regulate investments and set minimum

solvency margins. The Tariff Advisory Committee was also set up then.


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In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general

insurance business was nationalized with e ffect from 1st

January, 1973. 107 insurers were

amalgamated and grouped into four companies, namely National Insurance Company Ltd.,

the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United

India Insurance Company Ltd. The Ge neral Insurance Corporation of India was incorporated

as a company in 1971 and it commence business on January 1sst 1973.

This millennium has seen insurance come a full circle in a journey extending to nearly 200

years. The process ofre-opening of the sector had begun in the early 1990s and the last

decade and more has seen it been opened up substantially. In 1993, the Government set up

a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose

recommendations for reforms in the insurance sector.The objective was to complement the

reforms initiated in the financial sector. The committee submitted its report in 1994

wherein , among other things, it recommended that the private sector be permitted to

enter the insurance industry. They stated that foreign companies be allowed to enter by

floating Indian companies, preferably a joint venture with Indian partners.

Following the recommendations of the Malhotra Committee report, in 1999, the

Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous

body to regulate and develop the insurance industry. The IRDA was incorporated as a

statutory body in April, 2000. The key objectives of the IRDA include promotion of

competition so as to enhance customer satisfaction through increased consumer choice and

lower premiums, while ensuring the financial security of the insurance market.

The IRDA opened up the market in August 2000 with the invitation for application for

registrations. Foreign companies were allowed ownership of up to 26%. The Authority has

the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from

2000 onwards framed various regulations ranging from registration of companies for

carrying on insurance business to protection of policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India were

restructured as independent companies and at the same time GIC was converted into a

national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July,

2002.

Today there are 24 general insurance companies including the ECGC and Agriculture

Insurance Corporation of India and 23 life insurance companies operating in the country.

The insurance sector is a colossal one and is growing at a speedy rate of 15-20%.

Together with banking services, insurance services add about 7% to the countrys GDP. Awell-developed and evolved insurance sector is a boon for economic development as it

provides long- term funds for infrastructure development at the same time strengthening

the risk taking ability of the country.


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1.5MEANING OF LIFE INSURANCE :

Life insurance is a contract between the policy holder and the insurer, where the insurer

promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of

the insured person. Depending on the contract, other events such as terminal illness orcritical illness may also trigger payment. In return, the policy holder agrees to pay a

stipulated amount (the "premium") at regular intervals or in lump su ms. In some countries,

death expenses such as funerals are included in the premium; however, in the United States

the predominant form simply specifies a lump sum to be paid on the insured's demise.

The value for the policy owner is the 'peace of mind' in knowing that the death of the

insured person will not result in financial hardship.

Life policies are legal contracts and the terms of the contract describe the limitations of the

insured events. Specific exclusions are often written into the contract to l imit the liability of

the insurer; common examples are claims relating to suicide, fraud, war, riot and civil

commotion.

Life-based contracts tend to fall into two major categories:

y Protection policies designed to provide a benefit in the event of specified event,typically a lump sum payment. A common form of this design is term insurance.

y Investment policies where the main objective is to facilitate the growth of capitalby regular or single premiums. Common forms (in the US) are whole life, universal

life and variable life policies.

1.6HISTORY OF LIFE INSURANCE :

Almost 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.

That, perhaps, was how insurance made its beginning.

Life insurance had its origins in ancient Rome, where citizens formed burial clubs that would

meet the funeral expenses of its members as well as help survivors by making some

payments.

As European civilization progressed, its social institutions and welfare practices also got

more and more refined. With the discovery of new lands, sea routes and the consequent

growth in trade, Medieval guilds took it upon themselves to protect their memb er traders

from loss on account of fire, shipwrecks and the like.


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Since most of the trade took place by sea, there was also the fear of pirates. So these guilds

even offered ransom for members held captive by pirates. Burial expenses and support in

times of sickness and poverty were other services offered. Essentially, all these revolved

around the concept of insurance or risk coverage. That's how old these concepts are, really.

In 1347, in Genoa, European maritime nations entered into the earliest known in surance

contract and decided to accept marine insurance as a practice.

The first step...

Insurance as we know it today owes its existence to 17th century England. In fact, it began

taking shape in 1688 at a rather interesting place called Lloyd's Coffee Ho use in London,

where merchants, ship-owners and underwriters met to discuss and transact business. By

the end of the 18th century, Lloyd's had brewed enough business to become one of the first

modern insurance companies.

Insurance and Myth...

Back to the 17th century. In 1693, astronomer Edmond Halley constructed the first mortality

table to provide a link between the life insurance premium and the average life spans basedon statistical laws of mortality and compound interest. In 1756, Joseph Dodson rework ed

the table, linking premium rate to age.

Enter companies...

The first stock companies to get into the business of insurance were chartered in England in

1720. The year 1735 saw the birth of the first insurance company in the American colonies

in Charleston, SC.

In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance

corporation in America for the benefit of ministers and their dependents.

However, it was after 1840 that life insurance really took off in a big way. The trigger:

reducing opposition from religious groups.

The growing years...

The 19th century saw huge developments in the field of insurance, with newer products

being devised to meet the growing needs of urbanization and industrialization.

In 1835, the infamous New Y ork 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. Thepractice of reinsurance, wherein the risks are spread among several companies, was devised

specifically for such situations.

There were more offshoots of the process of industrialization. In 1897, the British

government passed the Workmen's Compensation Act, which made it mandatory for a

company to insure its employees against industrial accidents.


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With the advent of the automobile, public liability insurance, which first made its

appearance in the 1880s, gained importance and acceptance.

In 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 provi de insurance coverage to members as do

most labour 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 certai n percentage of the premium for these policies.

In India...

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

practised by the Aryans.

Burial societies of the kind found in ancient Rome were formed in the Buddhist period tohelp families build houses, protect widows and children.

Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in

1870. Other companies like Oriental, Bharat and Empire of India were also set up in the

1870-90s.

It was during the swadeshi movement in the early 20th century that insurance witn essed a

big boom in India with several more companies being set up.

As these companies grew, the government began to exercise control on them. The

Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of1938 that looked into investments, expenditure and management of these companies'

funds.

By the mid-1950s, there were around 170 insurance companies and 80 provident fund

societies in the country's life insurance scene. However, in the absence of regulatory

systems, scams and irregularities were almost a way of life at most of these companies.

As a result, the government decided nationalise the life assurance business in India. The Life

Insurance Corporation of India was set up in 1956 to take over around 250 life companies.

For years thereafter, insurance remained a monopoly of the public sector. It was only afterseven years of deliberation and debate - after the RN Malhotra Committee report of 1994

became the first serious document calling for the re-opening up of the insurance sector to

private players -- that the sector was finally opened up to private players in 2001.

The Insurance Regulatory & Development Authority, an autonomous insurance regulator set

up in 2000, has extensive powers to oversee the insurance business and r egulate in a

manner that will safeguard the interests of the insured.


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1.7BENEFITS OF LIFE INSURANCE :Need for Life Insurance

Today, there is no shortage of investment options for a person to choose from. Modern day

investments include gold, property, fixed i ncome instruments, mutual funds and of course,life insurance. Given the plethora of choices, it becomes imperative to make the right choice

when investing your hard-earned money. Life insurance is a unique investment that helps

you to meet your dual needs - saving for life's important goals, and protecting your assets.

Let us look at these unique benefits of life insurance in detail.

Asset Protection

From an investor's point of view, an investment can play two roles - asset appreciation or

asset protection. While most financial instruments have the underlying benefit of asset

appreciation, life insurance is unique in that it gives the customer the reassurance of asset

protection, along with a strong element of asset appreciation.

The core benefit of life i nsurance is that the financial interests of ones family remain

protected from circumstances such as loss of income due to critical illness or death of the

policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation

proposition. The customer therefore benefits on two counts and life insurance occupies a

unique space in the landscape of investment options available to a customer.

Goal based savings

Each of us has some goals in life for which we need to save. For a young, newly married

couple, it could be buying a house. Once, they decide to start a family, the goal changes to

planning for the education or marriage of their children. As one grows older, planning for

one's retirement will begin to take precedence.

Clearly, as your life stage and therefore your financial goals change, the instrument in which

you invest should offer corresponding benefits pertinent to the new life stage.

Life insurance is the only investment option that offers specific products tailormade for

different life stages. It thus ensures that the benefits offered to the customer reflect the

needs of the customer at that particular life stage, and hence ensures that the financial

goals of that life stage are met.

The table below gives a general guide to the plans that are appropriate for different lifestages.


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Life Stage Primary Need Life Insurance Product

Young & Single Asset creation Wealth creation plans

Young & Just

marriedAsset creation & protection

Wealth creation and mortgage

protection plans

Married with kids Children's education, Assetcreation and protection

Education insurance, mortgageprotection & wealth creation plans

Middle aged with

grown up kids

Planning for retirement &

asset protection

Retirement solutions & mortgage

protection

Across all life-

stagesHealth plans Health Insurance

1.8CONTRIBUTION TO INDIAN ECONOMYInsurance is the only sector which garners long term savings

Insurers are increasingly introducing innovative products to meet the specific needs of the

prospective policyholders. An evolving insurance sector is of vital importance for economic

growth. While encouraging savings habit it also provides a safety net to both enterprises

and

Individuals.

Insurance Companies receive, without much default, a steady cash st ream of premium orcontributions to pension plans. Various actuary studies and models enable them to predict,

relatively accurately, their expected cash outflows.

Liabilities of Insurance companies being long -term or contingent in nature, liquidity is

excellent and their investments are also long-term in nature. Since they offer more than the

return on savings in the shape of life -cover to the investors, the rate of return guaranteed in

their insurance policies is relatively low. Consequently, the need to seek high rates of

returns on their investments is also low. The risk -return trade off is heavily tilted in favour of

risk.

As a combined result of all this, investments of insurance companies have been largely inbonds floated by GOI, PSUs, state governments, local bodies, corporate bodies and

mortgages of long term nature.

Generates Long term funds for infrastructure and strong positive correlation

between development of capital markets and insurance/pension sector

For GDP to grow at 8 to 10%, qualitative improvement in infrastructure is essential.


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Estimates of funds required for development of infrastructure vary widely. An investment of

6,19,600 crore is anticipated in the next 5 years. Tenure of funding required for

infrastructure normally ranges from 10 to 20 years. The insurance industry also provides

crucial financial intermediary services, transferring funds from the insured to capital

investment, critical for continued economic expansion and growth, simultaneously

generating long-term funds for infrastructure development.

In fact infrastructure investments are ideal for asset -liability matching for life insurance

companies given their long term liability profile. Development of the insurance sector is thus

necessary to support continued econom ic transformation. Social security and pension

reforms too benefit from a mature insurance industry.

The insurance sector in India, which was opened up to private participation in the year

1999, has completed over seven years in a liberalized environment. With an average annual

growth of 37 per cent in the first year premium in the life segment and 15.72 per cent

growth in the nonlife segment, together with the largest number of life insurance policies in

force, the potential of the Indian insurance indust ry is still large.

Life insurance penetration in India was less than 1 per cent till 1990 -91. During the 1990s, it

was between 1 and 2 per cent and from 2001 it was over 2 per cent. In 2005 it had

increased to 2.53 per cent.

Spread of financial services in rural areas and amongst socially less privileged

IRDA Regulations provide certain minimum business to be done

- in rural areas

- in the socially weaker sections

Life Insurance offices are spread over nearly 1400 centres. Presence of representative i n

every tehsil deeper penetration in rural areas.

Insurance agents numbering over 6.24 lakhs in rural areas.

Employment generation

Life insurance industry provides increased employment opportunities. Many agents depend

on insurance for their livelihood. Brokers, corporate agents, training establishments provide

extra employment opportunities. Many of these openings are in rural sectors.


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COMPANY PROFILE BHARTI AXA LIFE INSURANCE

COMPANY LTD.

2.1 INTRODUCTION:

Whatever your plans in life, you can be confident that Bharti AXA Life will offer the right

financial solutions to help you achieve them.

Bharti AXA Life Insurance Company Ltd is a joint venture between Bharti, one of Indias

leading business groups with interests in telecom, agri business and retail, and AXA, world

leader in financial protection and wealth management. The joint venture company has a

74% stake from Bharti and 26% stake of AXA. The company launched national operations in

December 2006. Today, we have over 5200 employees across over 12 states in the country.

Their business philosophy is built around the promise of makin g people "Life Confident". Asthey expand theirr presence across the country to cater to insurance and wealth

management needs with product and service offerings, they continue to bring 'life

confidence' to customers spread across India. Whatever your plans in life, you can be

confident that Bharti AXA Life will offer the right financial solutions to help you achieve

them.

2.2 THE JOINT VENTURE-BHARTI AND AXA

BHARTI ENRERPRISE:

Bharti Enterprises is one of Indias leading business groups with interests in telecom, agri

business, insurance and retail. Bharti has been a pioneering force in the telecom sector with

many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is one of

Indias leading private sector providers of telecommunications services with an aggregate of

60 million customers, spanning mobile, fixed line, broadband and enterprise services. Bharti

Airtel was ranked amongst the best performing companies in the world in the BusinessWeek

IT 100 list 2007. Bharti Teletech is the countrys largest manufacturer and exporter of

telephone terminals. Bharti has a joint venture with ELRo Holdings India Ltd. FieldFresh

Foods Pvt. Ltd - for global distribution of fresh fruits and vegetables. Bharti also has a joint

venture - Bharti AXA Life Insurance Company Ltd. - with AXA, world leader in financialprotection and wealth management. Bharti has recently forayed into the retail business

under a company called Bharti Retail Pvt. Ltd. It also has a joint venture Bharti Wal-Mart

Private Limited with Wal-Mart, for wholesale cash-and-carry and back-end supply chain

management operations.

AXA


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AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse

geographically, with major operations in Western Europe, North America and the

Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of December

31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying

earnings amounted to Euro 4,010 million and IFRS adjusted earnings to Euro 5,140 million.

The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock

Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker

symbol AXA.

2.3 VISION AND VALUES: BHARTI AXA LIFE INSURANCE CO. LTD.

VISION:

To be a leader and a preferred company for financial protection and wealth

management in india

VALUES:

y Professionalismy Innovationy Team spirity Pragmatismy Integrity

2.4 STRAREGIES: BHARTI AXA LIFE INSURANCE CO. LTD.

y To achieve a market position among the top 5 in India through a multi -distribution,multi-product platform

y To adapt AXA's best practice blueprints as a sound platform for efficient andprofitable growth

y To leverage Bharti's local knowledge, infrastructure and customer basey To deliver high levels of shareholder returny To build long term value with business partners by enhancing the proposition to

their customers


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y To be the employer of choice to attract and retain the best talent in Indiay To be recognised as being close and qualified by the customers.

2.5 BRAND LOGO:

2.6 GROUP COMPANIES:

Bharti Airtel

Bharti Airtel Limited is a leading emerging

market telecom services provider with

operations in 19 countries across Asia and

Africa. The company is structured into four

strategic business units - Mobile, Telemedia,Enterprise and Digital TV.

Bharti Infratel Limited

Bharti Infratel Limited is amongst Indias

leading telecom passive infrastructure

service providers. The company deploys,

owns and manages telecom towers and

communication structures, for various mobile

operators across 18 states of India.

Bharti Realty Limited

Bharti Realty Limited is a young, vibrant and

dynamic realty company with expanding

interests in commercial, retail and residential

real estate. It has grown from strength to

strength, constructing and managing over ten

top of the line facilities for Bharti group

companies and third party clients.


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Beetel Teletech Limited

Beetel is a leading global technology brand

which offers a wide range of innovative

products in the mobile phones, IT peripherals

and fixed line telephone segments

Comviva

Comviva is the global leader in providing

mobile solutions beyond VAS. With an

extensive portfolio of solutions spanning VAS

infrastructure, application delivery platforms

and customer-facing applications,

Jersey and Guernsey

Jersey Airtel and Guernsey Airtel are

subsidiaries of Bharti group and offer mobile

services on the islands of Jersey and

Guernsey respectively in the Channel Islands

(Europe).

Centum Learning Limited

Centum Learning Limited provides end-to-

end learning and skill-building solutions that

enhance business performance to Bharti

Group and several large corporates.

Bharti Walmart

Bharti Walmart is a B2B joint venture

between Bharti Enterprises and Walmart for

wholesale cash & carry and back-end supply

chain management operations in India to

serve small retailers, manufacturers,institutions and farmers.

Bharti Retail

Bharti Retail is a wholly owned subsidiary of

Bharti Enterprises. The Company operates

easyday neighborhood stores and compact

hypermarket stores called easyday Market.


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Bharti AXA General Insurance

Bharti AXA General Insuranceis a joint

venture between Bharti Group and AXA

Group. The company is one of the fastest

growing in the general insurance segment

and is the first in the industry to receive dual

certifications of ISO 9001:2008 & 27001:2005

within the a year of launching operations.

Bharti AXA Investment Managers

Bharti AXA Investment Managers Private

Limited is a joint venture between Bharti and

the AXA Group. With a presence in more

than 34 locations across the country withinone year of the launch, Bharti AXA

Investment Managers boasts one of the

largest footprints for any AMC in the country

during launch.

Indus Towers

Indus Towers, a JV between Vodafone Essar

(42%), Bharti Group (42%) and Aditya Birla

Telecom Limited (16%) and is Indias leading

mobile towers company

FieldFresh Foods Pvt. Ltd

FieldFresh Foods Pvt. Ltd, a joint venture

company between Bharti Enterprises and Del

Monte Pacific Ltd. The company offers

branded FieldFresh fruits & vegetables across

India and international markets, including

Europe and the Middle East.


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2.7 MAJOR PLAYERS IN INSURANCE FIELD:

Life Insurance Corporation of India :

yThis leading Insurance company of India wasestablished in the year 1956 by the alliance of

16 non-Indian companies,154 Indian

Insurance Companies and 75 provident.

y It has 100 divisional offices,2048computerized branches,7 zonal offices and

the company's corporate office..

Bajaj Allianz Life Insurance:

y This Indian Insurance company is a jointventure of Alliance AG,which is one amongthe largest Life Insurance companies and

Bajaj Auto,one among the biggest 2- & 3

wheeler producers in the world.

y The Company has various plans for thecustomers like the Pension,Retirement,Life

Time Care,Health Care,Life Insurance

Online,Life Insurance Saving Plans, and online

services like the Address change,Renewal

Premium Payment etc.

Tata AIG Life :

y This renowned life Insurance company inIndia offers a wide array of products related

to life insurance for associations,individuals

and businesses.

y The company offers high quality solutions toits corporate Indian clients.

y The company is a joint venture of AmericaInternational Group and TATA group.


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Birla Sun Life Insurance:

y It is one of the major insurance companies inIndia and a joint venture of Sun Life Financials

and Aditya Birla group.

yThe company provides Life InsuranceSolutions to meet the needs of Protection,

Retirement and Saving .It has recently

launched the Money back Plus Plan and offers

Insurance programs like the

Children,NRI,Riders,Health etc.

SBI Life :

y This renders premium Insurance solutions likeSBI Life-Smart ULIP,SBI Life-Group Criti9, SBI

Life-Unit Plus Child Plan etc.

y It also offers services like the NRIservices,Premium Payment Procedure,ECS

Facility,RPI/RFI and many others.

y SBI Life is a joint venture of BNP ParibasAssurance and SBI.

Max New York Life:

y This Life Insurance company in India providesthe best solutions related to life insurance like

children's plan, retirement solution,

Investment, Protection, Health,Savings etc.

The company has 14 corporate agency tie

ups, 33 bankassurance relationships and

direct sales force at 14 locations. It is now

covering 36 products related to life and

health insurance.

Kotak Life Insurance:

y This premier Insurance company in Indiaoffers insurance facilities related to

Savings,Investments,

Child,Retirement,Protection, Kotak Long Life

Secure Plus,Kotak Long Life Health Plus etc.

y It opens up services like Insurance Guide,NAV, Premium Payment Options and many


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others.

HDFC Standard Life:

y This is one of the major market leaders in theinsurance sector in India. The company offers

Insurance services like the Group Plans,

Health Plans, Protection Plans, Retirement

Plans, Savings and Investment Plans etc.

Reliance Life :

The company based in India offers the best plans for

Life Insurance in India. Reliance Capital Limited's

associate company is Reliance Life which is one of

the leading private sectors in India. The company

provides the Protection Plans, Child Plans,

Retirement Plans and Investment plans and is also

the ultimate solver of solutions for Groups and

Individuals.

ICICI Prudential:

This major Insurance Company in India provides

health Insurance, life

insurance,ULIPs,ULIP,Retirement Plans and many

others. Life Insurance Plans of the company covers

Premium Guarantee Plans, Education Insurance Plans

etc. Pension Plans encompass Life Stage Pension,

Forever Life. Health Insurance Plans cover Hospital

Care,MediAssure.


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2.8 PRODUCTS OF BHARTI XA LIFE INSURANCE:

The Life Insurance Plans that Bharti AXA is offering are as follows :

Protection Plans-

Bharti AXA Life Elite Secure

y Pure Life Insurance cover at very competitive premiums. Option to cover your life till75 years with a unique term till 75 years of age.

Bharti AXA Life Secure Confident:

y The Life Secure Confident offers a term assurance for 5,10,15,20 & 25 year. It gives afinancial protection against unfortunate death at an affordable price.

Bharti AXA Life Family Income Secure

y Guaranteed yearly Income for your family in case of any contingency 100% return ofpremium at maturity.

Bharti AXA Life Protect Plus

y Financial security for your family.Guaranteed Cash Back on maturity.

Wealth Creation with Protection :

Bharti AXA Life Child Plan

Bharti AXA Life Bright Stars EDGE

y Double security Benefits for your loved ones - Sum assured Plus Fund value is paid incase something unfortunate were to happen to you.


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Bharti AXA Life Guaranteed Plan

Bharti AXA Life Aajeevan Anand :

y A plan that provides regular payouts throughout your lifetime.You need to pay for alimited period and enjoy long term benefits.

Bharti AXA Life SaveConfident :

y It is a money back insurance product. SaveConfident is a mixture of liquidity, long-term savings & Life Insurance benefits.

Bharti AXA Life True Wealth

y Highest every day NAV achieved throughout the Tracking Period of the True WealthFund is payable at maturity subject to a minimum NAV Guarantee of Rs 12!

Health Plan

Bharti AXA Life Easy Health

y A range of Daily Hospital Cash Benefit options, with additional benefits in case ofaccidental hospitalization in an ICU or otherwise.

Group Plan

Life Insurance

Bharti AXA Life Shield

y It is a simple, inexpensive life insurance solution that financially secures the family ofthe group member by providing a life insurance cover.

Bharti AXA Life Sanjeevani

y It is a single premium group term life insurance product provides financial protectionto your loved ones.

Credit Protection

Bharti AXA Life Credit Secure


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y It is a single premium group reducing term life insurance product, that makes sureyour family is not burdened with your loan liability in your absence.

Bharti AXA Life Mortgage Credit Shield

y It is a group product planned for the customers of Institutions/Banks - protecting thefamily of the borrower in the happening of death by paying an amount to resolve the

outstanding loan.

Bharti AXA Life Credit Shield

y It is a group product - which protects the family of the borrower in the event ofdeath by paying an amount to resolve the outstanding loan.

Health Plan

Bharti AXA Life Swasthya Sanjeevani

y It is a single premium group critical illness product helps you secure yourselffinancially against Six critical illnesses namely cancer, heart attack, coronary artery

bypass surgery, kidney failure, stroke and loss of limbs.


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RESEARCH METHODOLOGY

3.1 OBJECTIVE OF THE STUDY:

y To get some good market exposure by dealing with the prospectus face to fece.y To know the perception of the consumer about life insurance. y To get the deep knowledge of the financial product like life insurance. y To get the information about the market share of BHARTI AXA LIFE INSURANCE as

compared to the giant like LIC and life insurance companies and to know the

standing of the company in the market.

3.2 RESEARCH DESIGN:

y Research design is the plan, structure to answer whom, when, where and how thesubject is under investigation. Here plan is an outline of the research scheme &

which the researcher has to work. The structure of the research is a more specific

outline and the strategy out, specifying the methods to be used in the connection &

analysis of the data.

Descriptive Research Design

The type of research design used in this study is the descriptive research. The main

characteristics of this method is that the researcher has no control over the variables and he

can only report what has happened or what is happening. This study which compares the

performance of BHARTI AXA LIFE INSURANCE with its industrial competitors has been

undertaken based on the opinions of the consumers. Hence, this research study is

categorized as Descriptive Research Method

3.3 DATA COLLECTION:

The main source of information for this study is based on the data collection. Data collected

are both primary and secondary in nature.


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Primary Data:Primary data have been directly collected from the clients of Bharti Axa as well from the

clients of other insurance companies by survey method through undisguised structured

questionnaire.

Questions like open ended, close ended, multiple choice, dichotomous and ranking type

have been used for the purpose of data collection.

Secondary Data:Secondarydata have been collected from official website ofBharti Axa and also from other

official websites related to life insurance industry.

3.4 SAMPLING:

Convenience sampling is been used in the study. This type of sampling is basically used

when you simply stop anybody in the street who is prepared to stop, or when you wander

round a business, a shop, a restaurant, a theatre or whatever, asking people you meet whether

they will answer your questions. In other words, the sample comprises subjects who are

simply available in a convenient way to the researcher. There is no randomness and the

likelihood of bias is high. You can't draw any meaningful conclusions from the results you

obtain.

However, this method is often the only feasible one, particularly for students or others with

restricted time and resources, and can legitimately be used provided its limitations are clearly

understood and stated.

SAMPLE SIZE

Sample size is the total number of samples selected for the study from the sampling

population. Sample size is 100.

3.5 LIMITATIONS:There were certain limitations in undertaking this research work. As it is understood

that the limitations are a part of the project, they have been overshadowed by the

benefits of the study.


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The survey conducted may not be considered as comprehensive as only limitedrespondents could be contacted because of the time constraint.

Objectives and the purposes of the study and the questions had to be explai ned to therespondents and their responses may be biased.

Some of the respondents were reluctant to give their responses.

Only limited sample size had been considered for the study and therefore, theconclusions drawn based on this may not be a reflectio n of the entire population.


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3.6.2 TABL

SHOWINGG

N

OF RESPON ENTS

S.No G nd No. OfRespondents Percent

e (

)

1 Male 71 71

2 Fe

ale 29 29

Tot l 100 100

3.6.2 CHART SHOWINGGEN ER OF RESPON ENTS

Findin

s:

The above tableshows that71

of res

ondents are male and 29

are female res

ondents

Inference:It is inferred that there is a higher percentage (i.e.71 of male respondents.

0

10

20

30

40

50

0

7080

Male Female

Percent e ( )

ercentage (%)


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3.6.3 TABLE SHOWING OCCUPATION OF RESPONDENTS

S.No Occupation No. Of Respondents Percentage (%)

1 Service 21 21

2 Govt. employee 12 12

3 Business 19 19

4 Professional 15 15

5 Others 33 33

Total 100 100

3.6.3 CHART SHOWING OCCUPATION OF RESPONDENTS

Findings:

The above table shows that 21% of respondents belong to the category of services, 12% are

government employees, 19% belong to the category of business, 15% are professional and the rest

33% belong to other category, which comprises of private sector employee

Inference: It is inferred thatthere is a higher percentage (i.e.33%) of respondents in the categorycomprising private sector employees.

21

12

19

15

33

0

5

10

15

20

25

30

35

Service Govt.

employee

Business Professional Others

Percentage (%)

Percentage (%)


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3.6.4 TABLE SHOWINGANN AL INCOME OF RESPON ENTS

S.No Annu linco e No. OfRespondents Percent

e (!

)

1 Less than Rs.2 lakhs 27 27

2 Rs.2-5 lakhs 47 47

3 Rs.5-10 lakhs 16 16

4 Rs.10-20 lakhs 5 5

5 Above Rs.20 lakhs 5 5

Tot " l 100 100

3.6.4CHART SHOWINGANN # AL INCOME OF RESPON $ ENTS

Findin%

s:

The above tableshows that 27% of respondents fall under the incomecategory of less than 2 lakhs&

47% fall under thecategory of 2-5 lakhs& 16% fall under the incomecategory of5-10 lakhs& 5% in

thecategory of10-20 lakhs and the rest 5% in the incomecategory above20 lakhs

Inference: It is inferred that there is a higher percentage (47%) of respondents in the income

category of2-5 lakhs and comparatively a very lower percentage (5%) of respondents in the income

category of10-20 lakhs and above20 lakhs

0

10

20

30

40

50

Less than

Rs.2 lakhs

Rs.2-5 lakhs Rs.5-10

lakhs

Rs.10-20

lakhs

Above Rs.20

lakhs

27

47

16

5 5

Percent e ( )

'ercentage (%)


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3.6.5 TABLE SHOWING WHETHERTHE RESPODENT HAVE LIFE INSURANCE

POLIC(

OR NOT

S.No Opinion No. OfRespondents Percent )0

e (1

)

1 Yes 100 100

2 No 0 0

Tot ) l 100 100

3.6.5CHART SHOWING WHETHERTHE RESPODENT HAVE LIFE INSURANCE

POLIC(

OR NOT

Findin2

s:

The above tableshows that all the100% of respondents hold life insurance policy.

Q. WHAT IS YOUR MAIN MOTIVE BEHIND INVESTING INLIFE INSURANCE?(a) Tax Benefit

(b) Savings

(c) Risk Cover

(d) Return/Yield

0

20

40

60

80

100

Yes No

100

0

Percent e ( )

3ercentage (%)


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3.6.6 TABLE SHOWING MOTIVE OF THE RESPONDENT FOR HAVING THE LIFE

INSURANCE POLICY

S.No Moti4

es No. OfRespondents Percent 56

e (7

)

1 Tax benefit 40 40

2 Saving 10 10

3 Risk cover 46 46

4 Return 4 4

Tot 5 l 100 100

3.6.6 CHART SHOWING MOTIVE OF THE RESPONDENT FOR HAVING THE LIFE

INSURANCE POLICY

FINDINGS:

Therecould be any motive of people behind investing in a life insurance policy. The main

purpose of life insurance is theRisk cover of one8 s life. But some peopleconsider different

advantages of a life insurance policy. Some peopleconsider Tax benefitas the main

advantage of life insurance. Some believe that life insurance is aninvestment so they tend

to invest in life insurance. Whilesome peoplebelieve that it is a compulsorysaving. Nowletssee what all peoplesay

Here wecan see that majority of the people tend to invest in life insurancefor the risk

coverage. The next preferred option is Tax Saving. We foundedfrom the discussion with

public and someexperts that those people with alow income tend to invest in life insurance

to gain tax benefit. Saving motiveconstitutesverysmall part of the total sample. Return

comes last.

40

10

46

4

Percent e ( )

Tax benefit

Saving

Risk cover

Return


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But this is the general conclusion of100 people. If we take a larger sample9wecan get a

different result.

Q. RANK THE ABOVE MOTIVES ACCORDING TO YOUR PREFERENCE

3.6.7 TABLE SHOWING RANKING OF THE MOTIVES

MOTIVES

PREFERENCE TA@

BENEFIT SAVING RISKCOVER RETURN

1 42 6 48 2

2 38 22 32 8

3 16 50 14 20

4 4 22 6 70

TOTAL 100 100 100 100

3.6.7CHART SHOWING RANKING OF THE MOTIVES

FINDINGS:

Wecan see from the table and the graph that the number one motive ofpeople about

investing in life insurance is risk coverage9

which is the main theme of life insurance

followed by Tax benefit. The third position is ofsaving and fourth is Return. Thisshows that

still peopleconsider other financial tools moreviable for return and life insurance is for Tax

benefit and risk cover.

0

10

20

30

40

50

60

70

TAX BA

NEFIT SAVING RISB

COVER RETURN

Series1

Series2

Series3

Series4


45/46

Q. HOW DO YOU DECIDE ABOUT INVESTING INLIFE INSURANCE?

(a) On my own

(b) Family decision

(c) Employer decides

(d) As per the guidance of agent

This is a verycrucial question as most of the people are not much familiarabout different

life insurance plans offered by different lifeinsurance companiesso people take help of the

life insurance agent and as he guidesunderstanding the needs of the individual, people

would invest.

Here one hazardous factor is the moral hazard. People tend to invest in lifeinsurance plans

to maintain relations though they are not in need of lifeinsurance.

Also sometimes it depends upon theconvincing power of the agent.

3.6.8 TABLE SHOWING THE SOURCE OF DECISION OF THE INVESTOR

SR.NO SOURCE NO.OF RESPONDENT

1 My own 28

2 Family decision 14

3 Employer decides 0

4 As per the guidance of agent 58

TOTAL 100

3.6.8

CHART SHOWING THE SOURCE OF DECISION OF THE INVESTOR

28

14

0

58

NO.OF RESPONDENT

My own

Family decision

Employer decides

As per the guidance of agent


46/46

FINDINGS:

Here we can see that majority people (58%) decides as per the guidance of the agent in life

insurance while 28% persons decide on their own. 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.

3.6.9 TABLE SHOWING COMPANIES ENJOYING HIGH REPUTATION AMONGST

CUSTOMERS.

S.No Companies No. Of Respondents Percentage (%)

1 LIC 42 42

2 BAJAJ ALLIANZ 11 11

3 BIRLA SUN LIFE 12 12

4 TATA AIG 7 7

5 MAX NEW YORK 10 10

6 KOTAK LIFE INSURANCE 10 10

7 BHARTI AXA LIFE INSURANCE 8 8

Total 100 100

Findings:

The above table shows that 42% of respondents have stated LIC, 11% have stated BAJAJ

ALLIANZ, 12% have stated BIRLA SUN LIFE, 7% have stated TATA AIG, 10% of them have

stated MAX NEW YORK, 10% of them have stated KOTAK LIFE INSURANCE and 8% have

stated BHARTI AXA LIFE INSURANCE

bharti project final

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