anaalysis of life insurance buyers perception towards private life insurance company and policies

“Analysis Of Insurance Buyers’ Perception Towards Private Life Insurance
Company And Policies”
HR Institute of Higher Education, Hassan Page 1
1. INTRODUCTION
Insurance means managing risk. Insurance is a legal contract that transfers risk from
a policyholder to an insurance provider Services are activities and/or benefits that one
party offers to the other and that services are necessarily intangible and do not result in
the ownership of anything. Insurance service is unlike other services, as it is multifaceted
and potential reliant service involves extensive legal characteristics. The life insurance
policies are intangible in nature companies have to identify the means to make their
services more tangible. The insurance providers in India perform a wide range of
activities such as service designing, preparing contract and policy, marketing and selling,
underwriting, rating, reinsurance and other services and claim settlement. India's rural
consumers account for about 73 percent of the total consumers. Life insurance decisions
are often complex, more so, in the context of rural masses. The choice of life insurance
product for an Indian rural consumer is surrounded by plenty of problems, even when
confined to only traditional life insurance products. It is difficult to apply any rule-of
thumb. Because the amount of life insurance one individual needs depends on factors
such as his/her wealth, sources income numbers of dependents, debts, and style. he
buying behaviour of the rural Consumers in India o influenced by several factors, such as
socio-economic conditions, cultural environment, literacy level, occupation, geographical
location, extensive efforts on the part of sellers, exposure to the media, etc.
Life is full of risk and uncertainties. Since we are the social human being we have certain
responsibilities too. Indian consumers have big influence of emotions and rationality on
their buying decisions. They believe in future rather than the present and desire to have a
better and secured future in this direction life insurance services have its own value in
terms of minimizing risk and uncertainties. Indian economy is developing and having
huge middle class societal status and salaried persons. Their money value for current
needs and future desires here the pendulum moves to another side which generate the
reasons behind holding a policy. Here the attempt has been made in this research paper to
study the buying behaviour of consumers towards life insurance services.
India is not only a market with a huge potential but also with a complicated
investment environment. Though great improvements have taken place during the past 12
years, the overall market situation cannot yet be considered to be mature and liberalized.

Since the Indian insurance industry can be considered to be in its transforming shoes, it is
interesting to understand the perceptions of insurance buyers towards life insurance
services offered by private insurance companies. Traditionally, Indian insurance buyers
are conservative, and LIC, being a public sector company was able to penetrate the life
insurance market successfully till the deregulation. Now with the advent of private
insurers, it is interesting to know how insurance buyers react to the concept of private life
insurance in India.
In 1956 most of the private insurance companies filed for bankruptcy then the
government of India nationalized the insurance companies under the name of Life
Insurance Corporation of India. LIC ruled the market for almost five decades. Because of
its monopoly position it never tried to provide any innovative policies and one service
was another area of concern.
1990 saw the emergence of liberalization, Liberalization means listing government
controls and allowing competition to play its free role in the economy. with reference to
insurance sector. liberalization means allowing private companies like TATA-AGI, SBI
life, Reliance, ICICI Prudential, ING vysya, Max New yark life , HDFC etc to operate in
this sector.

1.1 PROBLEM STATEMENT
The present study titled “analysis of insurance buyer’s perception towards private life
insurance company and policies” To measure the significant perception of life insurance
buyers towards life insurance services offered by the private insurance companies on the
basis of economic variables, the present study conduct at Hassan for the duration of 3
month from January to February 2016. The study conducted on the basis of primary and
secondary data.

1.2 OBJECTIES
 To measure the significant perception of life insurance buyers towards life
insurance services offered by the private insurance companies on the basis of
economic variables,
 To develop and standardize a measure to evaluate investment pattern in life
insurance services.
 To evaluate the factors underlying consumer perception towards investment in life
insurance policies.
 To identify whether private insurance policies are up to customers expectations.
 To know the customers opinion whether private insurance policies are better than
public insurance policies.

1.3 METHODOLOGY
Data collection: the data was collected on primary data. the sample frames were the
individuals who are investing in life insurance policies.
Sample design
 Sampling technique: Judgement sampling.
 Sample size:50
 sample unit: In Hassan
1.4 HYPOTHESIS
H0: Life insurance buyers differentiate between life insurance services offered by private
life insurance companies
H1: Life insurance buyers do not differentiate between life insurance service offered by
private life insurance companies
1.5 Scope of the study
The study attempts to explore the dynamics of the life insurance business after the
entry of private life insurance players by analyzing significant perceptions that life
insurance buyers have towards private life insurance in particular variables such as age
gender-occupation income manual status number of dependents qualification location and
so forth were analyzed thoroughly in this study. The present study is in Hassan
geographical area.
1.6 LIMITATION:
 Lack of information about insurance sector
 Study is limited to Hassan district of Karnataka state.
 The study based on information given by the respondents.
 The research on analysis of life insurance services was carried out based on the
perceptions of the sample respondents.
 This study to predict accurately their insurance buying behavior.

2. INDUSTRY PROFILE
2.1 Definition of Insurance
An arrangement by which a company or the state undertakes to provide a
guarantee of compensation for specified loss, damage, illness, or death in return for
payment of a specified premium. Late Middle English (originally as ensurance in the
sense ‘ensuring, assurance, a guarantee’): from Old French enseurance, from enseurer
(see ensure). Sense 1 dates from the mid 17th century
2.2Life insurance or life assurance,
Especially in the Commonwealth, is a contract between an insurance policy holder
and an insurer or assurer, where the insurer promises to pay a designated beneficiary a
sum of money (the benefit) in exchange for a premium, upon the death of an insured
person (often the policy holder). Depending on the contract, other events such as terminal
illness or critical illness can also trigger payment. The policy holder typically pays a
premium, either regularly or as one lump sum. Other expenses (such as funeral expenses)
can also be included in the benefits.
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
limit the liability of the insurer; common examples are claims relating to suicide, fraud,
war, riot, and civil commotion.
An early form of life insurance dates to Ancient Rome; "burial clubs" covered the
cost of members' funeral expenses and assisted survivors financially. The first company
to offer life insurance in modern times was the Amicable Society for a Perpetual
Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas Allen.
Each member made an annual payment per share on one to three shares with
consideration to age of the members being twelve to fifty-five. At the end of the year a
portion of the "amicable contribution" was divided among the wives and children of
deceased members, in proportion to the amount of shares the heirs owned. The Amicable
Society started with 2000 members.
The first life table was written by Edmund Halley in 1693, but it was only in the
1750s that the necessary mathematical and statistical tools were in place for the
development of modern life insurance. James Dodson, a mathematician and actuary, tried

to establish a new company aimed at correctly offsetting the risks of long term life
assurance policies, after being refused admission to the Amicable Life Assurance Society
because of his advanced age. He was unsuccessful in his attempts at procuring a charter
from the government.
His disciple, Edward Rowe Mores, was able to establish the Society for Equitable
Assurances on Lives and Survivorship in 1762. It was the world's first mutual insurer and
it pioneered age based premiums based on mortality rate laying "the framework for
scientific insurance practice and development" and "the basis of modern life assurance
upon which all life assurance schemes were subsequently based".
Mores also gave the name actuary to the chief official - the earliest known
reference to the position as a business concern. The first modern actuary was William
Morgan, who served from 1775 to 1830. In 1776 the Society carried out the first actuarial
valuation of liabilities and subsequently distributed the first reversionary bonus (1781)
and interim bonus (1809) among its members. It also used regular valuations to balance
competing interests. The Society sought to treat its members equitably and the Directors
tried to ensure that policyholders received a fair return on their investments. Premiums
were regulated according to age, and anybody could be admitted regardless of their state
of health and other circumstances.
2.3 Development of Insurance Companies in India
For economic development investments are necessary. Investments are made out
of savings. Life Insurance Company is a major instrument for the mobilization of savings
of people, particularly from the middle and lower group. All good life insurance
companies have huge funds accumulated through the payments of small amounts of
premium of individuals. The economic reform of 1991 played a pivotal role in the
economic development of India. Reaping its benefit the growth of the country reached
around 7.5% in the late 2000s.Insurance is a risk transfer mechanism whereby the
individuals or the business enterprise can shift some of, the uncertainties of life on the
shoulder of other. In peace the insurance provide trade industry which ultimately
contribution towards human progress. Thus, insurance is the most lending force
contribution towards economic, social and technological progress of man.

The Indian insurance market is the 19th largest globally and ranks 5th in Asia,
after Japan, South Korea, china and twain. In 2003, total gross premiums collected
amount to USD 17.3billion representing just under 0.6%of world premiums. Similar to
the pattern observed in other regional market and reflecting the country’s high savings
rate, life insurance business accounted for 78.5% of total gross premiums collected in the
year, against 21.5 for non-life insurance business. Another measure of insurance
development is per capita spending on insurance, i.e. insurance density. By this measure
India is among the lowest spending nations in Asia in respect of purchasing insurance. An
average Indian spent USD16.4 on insurance products comprising USD 12.9 for life
insurance and USD 3.5 for non-life insurance products. One factor that has been slowing
down the improvement of insurance density is India’s relatively high population growth
rate, which has averaged 1.7% over the past ten years.
LIC is one of the largest families in India consisting of over 1 lack employees and
11 lack agents.LIC as a responsible corporate citizen has been fulfilling its social
responsibilities from time to time. In fact most of their investments are geared towards
industrial growth, infrastructure growth and national infrastructure growth and national
development. With a view to channelize their social responsibilities and give a formal
shape to the same they have formed a public Trust named,” LIC Golden Jubilee
Foundation”.
2.4 Indian Life Insurance
Life insurance companies in India have their history dating back to 1818.The first
life insurance Company in India was oriental life insurance company in Kolkata. It was
started by the Europeans to provide insurance cover to the Europeans. The life insurance
companies work in close association with the life insurance agents and brokers. Special
training and education is provided to each insurance agent or broker about of Life
Insurance, how it works, industry info, insurance leads, types of Insurance leads, types of
insurance policies on offer, claims settlements, Life Insurance laws in India, knowledge
about the return of premium procedure of the life insurance company and the tax savings
the insurance policy would provide.

2.5 Milestone’s in the Life Insurance Business in India
1912: The Indian life Assurance Companies Act enacted as the first statute to regulate the
life insurance business.
1928: The Indian life Assurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance business.
1938: Earlier legislation consolidated and amended to by the insurance Act with the
objective of protecting the interest of the insuring public.
1956: 245 Indian and foreign insurance and provident societies taken over by the central
government and nationalized LIC formed by an Act.
2.6 Market Share of Indian Insurance Industry
Notwithstanding the rapid growth of the sector over the last decade insurance in
India remains at an early stage of development .At the end of 2003 the Indian insurance
market was the 19th largest in the world only slightly bigger than that of Denmark and
comparable to that of Ireland. The Indian insurance market is the 19th largest globally
and ranks 5th in Asian after Japan ,south, Korea china and Taiwan .In 2003 total gross
premiums collected amount to USD 17.3 billion representing just under 0.6%of world
premiums.
The introduction of private players in the industry has added value to the
industry. The initiative taken by the private players are very competitive and have given
immense competition to the on time monopoly of the market LIC. The new players have
improved the service quality of the insurance. As a result LIC down the years have seen
the declining phase in its career. The market share was distributed among the private
players LIC market share has decreased from 95 %( 2002-03) to 81 %( 2004-05).

The following companies have the rest of the market share of the insurance industry.
Mane of the some Players in the Market Name of the company Nature of holding
 Bajaj Allianz Life Insurance Co.( Private)
 Aviva Life Insurance (Private)
 Birla Sun Life Insurance Co( Private)
 HDFC standard Life Insurance (Private)
 ICICI Prudential Life Insurance (Private)
 ING Vysya Life Insurance (Private)
 Sahara life insurance (private)
 Shriram (private)
 Life Insurance Corporation of India( Public)
 Max New York Life Insurance Co (Private )
 Met Life Insurance Co (Private)
 Kotak Mahindra Life Insurance (Private)
 Reliance Insurance (Private)
 SBI Life Insurance Co( Private)
 TATA –AIG Life Insurance Co.( Private )
There are total of 13 Life Insurance companies operating in India, of which one is a
public sector undertaking and the balance 12 are private sector Enterprises.
India with about 200 million classes household shows a huge untapped potential
for players in the insurance industry. Saturation of markets in many developed economies
has made the Indian market even more attractive for global insurance majors. The
insurance sector in India has come to a position of very high potential and
competitiveness in the market. Consumers remain the most important centre of the
insurance sector. This is an evolutionary change in the technology that has revolutionized
the entire insurance sector. The insurance companies today must meet the need of the
hour for more and more personalized approach for handling the customer.

2.7 Current scenario:
The Indian Government opened up this sector for the private players in 1999, and
also allowed for foreign Direct Investment up to 26% after which it began to thrive and
Boom.
Currently a $ 41 billion industry, India is the world’s 5th largest Life Insurance
market and growing at rapid space of 32- 34% annually as per Life Insurance Council
Studies.
2.8 Future Trends:
The prospects of this industry look promising by way of growth as for as one can
judge from the present statistics and the general environment prevailing in the economy.
In terms of new product and sources Health insurance and Banc assurance are very likely
to dominate the insurance scene in the coming few years. Also, IT is expected to play a
big in the growth of this sector in the coming year. The growth of sector in the coming
year
2.9 Insurance Regulatory Development Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in
April 2000 has fastidiously stuck to its schedule of framing regulations and registering the
private sector insurance companies since being set up as an independent statutory body
the IRDA has put in a framework of globally compatible regulations. The other decision
taken simultaneously to provide the supporting systems to the insurance sector and in
particular the life insurance companies was the launch of the IRDA online service for
issue and renewal of licenses to agents. The approval of institutions for imparting training
to agents has also ensured that the insurance companies would have a trained workforce
of insurance agents in place to sell their products.

2.10 Insurance Today
When people buy insurance today, they are still sharing their risk. Modern insurance
companies study statistics that show the frequency of past losses-for example, losses from
shop fires to try to predict what losses their clients will experience in the future. The
insurance company uses the funds paid by many clients to compensate the clients who
suffer losses
2.11 Fundamental Principles of Insurance
Terminologies used in Insurance.
A) Indemnity
A contract of insurance contained in a fire, marine, burglary or any other policy
excepting life assurance and personal accident and sickness insurance) is a contract of
indemnity. This means that the insured, in case of loss against which the policy has been
issued, shall be paid the actual amount of loss not exceeding the amount of the policy, i.e.
he shall be fully indemnified. The object of every contract of insurance is to place the
insured in the same financial position, as nearly as possible, after the loss, as if his loss
had not taken place at all. It would be against public policy to allow an insured to make a
profit out of his loss or damage
B) Utmost Good Faith
Since insurance shifts risk from one party to another, it is essential that there must be
utmost good faith and mutual considence between the insured and the insurer. In a
contract of insurance the insured knows more about the subject matter of the contract than
the insurer. Consequently, he is duty bound to disclose accurately all material facts and
nothing should be withheld or concealed. Any fact is material, which goes to the root of
the contract of insurance and has a bearing on the risk involved. It is only when the
insurer knows the whole truth that he is in a position to judge (a) Whether he should
accept the risk and (b) What premium he should charge If that were so the insured might
be tempted to bring about the event insured against in order to get money.

C) Insurable Interest
A contract of insurance affected without insurable interest is void it means that the
insured must have an actual pecuniary interest and not a mere anxiety or sentimental
interest in the subject matter of the insurance. The insured must be so situated with regard
to the thing insured that he would have benefit by its existence and loss from its
destruction. The owner of a ship run a risk of losing his ship, the charterer of the ship runs
a risk of losing his freight and the owner of the cargo incurs the risk of losing his goods
and profit so, all these persons have something at stake and all of then have insurable
interest. It is the existence or insurable interest in a contract of insurance, which
distinguishes it from a mere watering agreement
D) CausaProxima
The rule of causaproxima means that the cause of the amo proximate or immediate
and not remote in the proximate cause of the loss is a peril insured against the insured can
recover when a loss has been brought about by two or more causes, the question arises as
to which s the causaproxima, although the result could not have happened without the
remote cause but is the loss is brought about by any cause attributable to the misconduct
of the insured, the insurer is not liable.
E) Risk
In a contract of insurance the insurer undertakes to protect the insured from a
specified loss and the insurer receive a premium for running the risk of such loss. Thus,
risk must attach to a policy.
F) Mitigation of Loss
In the event of some mishap to the insured property, the insured must take all
necessary steps to mitigate or minimize the loss, just as any prudent person would do in
those circumstances. If he does not do so, the insurer can avoid the payment of loss
attributable to his negligence. But it must be remembered that though the insured is bound
to do his best for his insurer, he is not bound to do so at the risk of his life.

G) Subrogation
The doctrine of subrogation is a corollary to the principle of indemnity and applies
only to sire and marine insurance. According to it, when an insured has received full
indemnity in respect of his loss, all rights and remedics which he has againstThird person
win pass on to the insurer and will be exercised for his benefit until he (the insurer)
recoups the amount he has paid under the policy. It must be clarified here that the
Insurer's right of subrogation arises only when he has paid for the loss for which he is
liable under the policy and this right extends only to the rights and remedies available to
the insured in respect of the thing to which the contract of insurance relates.
H) Contribution
Where there are two or no- insurance on one risk, the principle of contribution comes
into play. The aim of contribution is to distribute the actual amount of loss among the
different insurers who are liable for the same risk under different policies in respect of the
same subject matter. Any one insurer may pay to the insured the full amount of the loss
covered by the policy and then become entitled to contribution from his co-insurers in
proportion to the amount which each has undertaken to pay in case of loss of the same
subject-matter.
In other words, the right of contribution arises when
 There are different policies, which relate to the same subject matter.
 The policies cover the same per which caused the loss and
 All the policies are in force at the time of the loss, and
 One of the insurers has paid to the insured more than his share of the loss.
Life Insurance Policy is a form of security for the person who insures his life and
his family life insurance policies have helped trade and other economic activities to
flourish in a great manner. It has generated loss of job opportunities. It is looked upon as
a lucrative career option. Life insurance companies have also entered the international
business scenario.

2.12 Market trends
Life insurance premiums written in 2005According to a study by Swiss Re, the
EU was largest market for life insurance strange originated Life insurance or stol is a life
insurance policy that is held or financed by a person who has no relationship in the
insured person. Generally, the purpose of life insurance is to provide peace of mind by
assuring that financial loss or hardship will be lessened or climinated in the event of the
insured person's death. STOL has often been used as an investment technique whereby
investors will encourage someone (usually an olderly person) to purchase life insurance
and name the investors as the beneficiary of the policy. This undermines the primary
purpose of life insurance as the investors have no financial loss that would occur if the
insured person were to die. In some jurisdictions, there are laws to discourage or prevent
STOLL premiums written in 2005 followed by the USA and Japan. Although some
aspects of the application process (such as underwriting and insurable interest provisions)
make it difficult, life insurance policies have been used in cases of exploitation and fraud.
In the case of life insurance, there is a motivation to purchase a life insurance policy,
particularly if the face value is substantial, and then kill the insured. Usually, the larger
the claim, and/or the more serious the incident, the larger and more intense win be the
number of investigative lawyers, consisting in police and insurer investigation. Eventually
also loss adjusters hired by the insurers to work independently recently, vertical
settlements have created problems for use insurance carriers. A vertical settlement
involves the purchase of a life insurance policy from anclictly or seminally ill policy
holder. The policy holder sells the policy (including the right to name the beneficiary) to a
purchaser for a price discounted from the policy value. The seller has cash in hand, and
the purchaser will realize a profit when the seller dies and the proceeds are delivered to
the purchaser. In the meantime, the purchaser continues to pay the premiums. Although
both parties have reached an agreeable settlement, insurers are troubled by this trend.
Insurers calculate their rates with the assumption that a certain portion of policy holders
will seek to redeem the cash value of their insurance policies before death. They also
expect that a certain portion will stop paying premiums and forfeit their policies.
However, vertical settlements ensure that such policies will with absolute certainly be
paid out. Some purchasers, in order to take advantage of the potentially large profits, have
even actively sought to collude with uninsured elderly and terminally ill patients, and

created policies that would have not otherwise been purchased. Likewise, these policies
are guaranteed losses from the insurers' perspective
2.13 Life insurance premiums written in 2005
The sale of life insurance in the U.S. began in the 1760s. The Presbyterian Synods
in Philadelphia and New York City created the Corporation for Relief of Poor and
Distressed Widows and Children of Presbyterian Ministers in 1759; Episcopalian priests
organized a similar fund in 1769. Between 1787 and 1837 more than two dozen life
insurance companies were started, but fewer than half a dozen survived. In the 1870s,
military officers banded together to found both the Army (AAFMAA) and the Navy
Mutual Aid Association (Navy Mutual), inspired by the plight of widows and orphans left
stranded in the West after the Battle of the Little Big Horn, and of the families of U.S.
sailors who died at sea.
2.14Type of insurance
 Term insurance
Term assurance provides life insurance coverage for a specified term. The policy
does not accumulate cash value. Term insurance is significantly less expensive than an
equivalent permanent policy but will become higher with age. Policy holders can save to
provide for increased term premiums or decrease insurance needs (by paying off debts or
saving to provide for survivor needs).
 Mortgage life insurance
Mortgage life insurance insures a loan secured by real property and usually
features a level premium amount for a declining policy face value because what is insured
is the principal and interest outstanding on a mortgage that is constantly being reduced by
mortgage payments. The face amount of the policy is always the amount of the principal
and interest outstanding that are paid should the applicant die before the final instalment
is paid.

 Group life insurance
Group life insurance (also known as wholesale life insurance or institutional life
insurance) is term insurance covering a group of people, usually employees of a
company, members of a union or association, or members of a pension or superannuation
fund. Individual proof of insurability is not normally a consideration in its underwriting.
Rather, the underwriter considers the size, turnover, and financial strength of the group.
Contract provisions will attempt to exclude the possibility of adverse selection. Group life
insurance often allows members exiting the group to maintain their coverage by buying
individual coverage. The underwriting is carried out for the whole group instead of
individuals.
 Permanent life insurance
Permanent life insurance is life insurance that covers the remaining lifetime of the
insured. A permanent insurance policy accumulates a cash value up to its date of
maturation. The owner can access the money in the cash value by withdrawing money,
borrowing the cash value, or surrendering the policy and receiving the surrender value.
The three basic types of permanent insurance are whole life, universal life, and
endowment.
 Whole life
Whole life insurance provides lifetime coverage for a set premium.
 Universal life coverage
Universal life insurance (UL) is a relatively new insurance product, intended to
combine permanent insurance coverage with greater flexibility in premium payments,
along with the potential for greater growth of cash values. There are several types of
universal life insurance policies, including interest- sensitive (also known as "traditional
fixed universal life insurance"), variable universal life (VUL), guaranteed death benefit,
and equity-indexed universal life insurance.
Universal life insurance policies have cash values. Paid-in premiums increase
their cash values; administrative and other costs reduce their cash values.
Universal life insurance addresses the perceived disadvantages of whole life –
namely that premiums and death benefits are fixed. With universal life, both the

premiums and death benefit are flexible. With the exception of guaranteed-death-benefit
universal life policies, universal life policies trade their greater flexibility off for fewer
guarantees.
"Flexible death benefit" means the policy owner can choose to decrease the death
benefit. The death benefit can also be increased by the policy owner, usually requiring
new underwriting. Another feature of flexible death benefit is the ability to choose option
A or option B death benefits and to change those options over the course of the life of the
insured. Option A is often referred to as a "level death benefit"; death benefits remain
level for the life of the insured, and premiums are lower than policies with Option B death
benefits, which pay the policy's cash value—i.e., a face amount plus earnings/interest. If
the cash value grows over time, the death benefits do too. If the cash value declines, the
death benefit also declines. Option B policies normally feature higher premiums than
option A policies.
 Endowment policy
Endowments are policies which will pay a lump sum at either the death of the
insured or after a set term, called the policy's maturity. Endowments require higher
premiums than whole life and universal life policies because of the additional lump sum
benefit at the maturity of the policy. Endowments are not technically permanent insurance
because they do not cover the insured's lifetime; however they are commonly included in
this class because of their high premiums.
The US Technical Corrections Act of 1988 tightened the rules on tax shelters such
as modified endowments. These follow the same tax rules as annuities and IRAs.
Endowments mature and are paid out after a prespecified period (e.g. 15 years) or at a
prespecified age (e.g., 65), whether the insured is alive or has already died.
 Money back policy
A money back policy is a variant of the endowment plan. It gives periodic
payments over the policy term. To that end, a portion of the sum assured is paid out at
regular intervals. If the policy holder survives the term, he gets the balance sum assured.
In case of death over the policy term, the beneficiary gets the full sum assured.[18]

 Accidental death
Accidental death insurance is a type of limited life insurance that is designed to
cover the insured should they die as the result of an accident. "Accidents" run the gamut
from abrasions to catastrophes but normally do not include deaths resulting from non-
accident-related health problems or suicide. Because they only cover accidents, these
policies are much less expensive than other life insurance policies.
Such insurance can also be accidental death and dismemberment insurance or
AD&D. In an AD&D policy, benefits are available not only for accidental death but also
for the loss of limbs or body functions such as sight and hearing.
Accidental death and AD&D policies very rarely pay a benefit, either because the
cause of death is not covered by the policy or because death occurs well after the
accident, by which time the premiums have gone unpaid. To know what coverage they
have, insured’s should always review their policies. Risky activities such as parachuting,
flying, professional sports, or military service are often omitted from coverage.
Accidental death insurance can also supplement standard life insurance as a rider. If a
rider is purchased, the policy generally pays double the face amount if the insured dies
from an accident. This was once called double indemnity insurance. In some cases, triple
indemnity coverage may be available.
 Senior and pre-need products
Insurance companies have in recent years developed products for niche markets,
most notably targeting seniors in an aging population. These are often low to moderate
face value whole life insurance policies, allowing senior citizens to purchase affordable
insurance later in life. This may also be marketed as final expense insurance and usually
have death benefits between $2,000 and $40,000. One reason for their popularity is that
they only require answers to simple "yes" or "no" questions, while most policies require a
medical exam to qualify. As with other policy types, the range of premiums can vary
widely and should be scrutinized prior to purchase, as should the reliability of the
companies.
Health questions can vary substantially between exam and no-exam policies. It
may be possible for individuals with certain conditions to qualify for one type of coverage
and not another. Because seniors sometimes are not fully aware of the policy provisions it

is important to make sure that policies last for a lifetime and those premiums do not
increase every 5 years as is common in some circumstances.
 Pre-need life insurance
Policies are limited premium payment, whole life policies that are usually
purchased by older applicants, though they are available to everyone. This type of
insurance is designed to cover specific funeral expenses that the applicant has designated
in a contract with a funeral home. The policy's death benefit is initially based on the
funeral cost at the time of prearrangement, and it then typically grows as interest is
credited. In exchange for the policy owner's designation, the funeral home typically
guarantees that the proceeds will cover the cost of the funeral, no matter when death
occurs. Excess proceeds may go either to the insured's estate, a designated beneficiary, or
the funeral home as set forth in the contract. Purchasers of these policies usually make a
single premium payment at the time of prearrangement, but some companies also allow
premiums to be paid over as much as ten years.
It's one year completion for Modi government and guesses what? Inspired by the political
watchers, critics have started filing the report card of success and failures of the
government that has been in the centre for a year.
The government has launched a few social security schemes, which are of enormous
significance for the masses. At a cost of a nominal premium, these schemes ensure
comfortable future for many.
 Atal PensionYojana
Pension between Rs 1,000 and Rs 5,000 a month. For a monthly pension of Rs
1,000, a 40-year-old subscriber will have to invest Rs 291 per month for 20 years, while
an 18-year-old will have to contribute Rs 42 per month for 40 years. All individuals
between 18 and 40, who will have to contribute till they turn 60, This is an investment
you need to make on behalf of your domestic staff who may not have anyone to look after
them once they stop working.

 Pradhan Mantri Suraksha Bima Yojana
Accidental death and disability cover of Rs 2 lack. Premium is Rs 12 per year.
Anybody who has a savings account in the banks that offer this scheme. Although it is for
everybody, this scheme especially suits drivers, security guards, newspaper vendors,
vegetable vendors and others who are exposed to the risk of accidental death or disability.
 Pradhan Mantri JeevanJyoti Bima Yojana
A pure protection term insurance cover which pays Rs 2 lakh to dependents in the
event of the policyholder's death. Premium is Rs 330 a year. Anybody in the age band of
18-70 years who has a savings account in a bank that offers this scheme. This is a must
for any member of your staff who is the sole breadwinner in his or her family.
 Pradhan Mantri Jan Dhan Yojana
A savings account with no minimum balance. The Repay ATM-cum-debit card
comes with in-built accident and life covers of Rs 1 lack and Rs 30,000 respectively.
Anyone belongs to the economically weaker sections of society. As all future welfare and
subsidy schemes are likely to be linked to it, it is a must for your staff. All those working
in the unorganised sector. You can transfer salaries directly into the accounts of your
domestic staff to inculcate a banking habit in them.
 Health insurance
Cover for expenses incurred during hospitalisation due to illness or surgery?
Rs 700-800 a year for a cover of Rs 50,000 for indivuduals aged between 18 and 40
years. Eligible for All. Hospitalisation can wipe out the entire savings of those already at
a financial disadvantage. Though not offered by the government, affordable policies are
available from state-owned non-life insurers like New India Assurance and Oriental
Insurance. The ET has further calculated how much these might cost.

2.15 HOW IT STACKS UP
Pradhan Mantri Jan Dhan Yojan = NIL.
Pradhan Mantri Jeevan Jyoti Bima Yojana = Rs 330 Pradhan Mantri Suraksha Bima
Yojana = Rs 12.
Atal Pension Yojana = Rs 3,492.
Health Insurance = Rs 800.
All this adds up to = Rs 6,834 (The total amount you need to spend on
staff welfare measures in a year)
Assuming your employee is 40 years old and monthly pension chosen is Rs 1,000 in case
of APY. If minimum requirement is invested

2.16 Life insurance companies and its nature.
Company Promoter Year of
establishment
Nature of
company
ICICI
Prudential
ICICI Bank 2000 Joint venture
HDFC Standard HDFC 2000 Joint venture
SBI Life SBI 2001 Joint venture
Kotak
Mahindra,
Kotak Mahindra
Bank
2001 Joint venture
Bajaj Allianz Bajaj Allianz 2001 Joint venture
ING Vysya Vysya Bank 2001 Incorporated as
joint venture,
but completely
owned by Exide
industry ltd
Met life Punjab national
Bank
2001 Joint venture
Tata AIG Tata group 2001 Joint venture
Birla Sun Life Aditya Birla
Group
2000 Joint venture
Aviva life Dabur 2002 Joint venture

2.17 Brief information about life insurance companies
 ING VYSYA LIFE INSURANCE
ING Vysya Life Insurance Company Private Limited entered the private life
insurance industry in India in September 2001, and in a span of 5 years has established
itself as distinctive life insurance brand with an innovative, attractive and customer
friendly product portfolio and a professional advisor sales force.
It has a dedicated and committed advisor sales force of over 21,000 people,
working from 140 branches located in 74 major cities across the country and over
3,000employees. It also distributes products in close cooperation with the ING Vysya
Bank network. The Company has a customer base of over 4,50,000& is headquartered at
Bangalore. In 2005, ING Vysya Life earned a total income in excess of Rs. 400 crore and
also has a share capital of Rs. 440 crore.
ING Vysya Life Insurance Company is headquartered at Bangalore and has
established a strong presence in the cities of Delhi, Mumbai, Kolkata, Hyderabad and
Chennai. In addition ING Vysya Life operates in Vizag, Vijayawada, Mangalore, Mysore,
Pune, Nagpur, Chandigarh, Ludhiana and Jaipur.
ING Vysya Life has pioneered product innovations in the Indian life insurance
market with customer-oriented cash bonus endowment and money back products.
(Reassuring Life and Maximizing Life), the first anticipated whole life product (Fulfilling
Life) and the first Term/Critical Illness combination product (Conquering Life).
Conquering Life is an innovative term and critical illness product that has been launched
recently.
Conquering Life provides affordable term cover and critical illness coverage for
10critical illnesses of up to 50% of the Sum Assured.
ING Vysya Life Insurance is a joint venture between ING Insurance International
BV apart of ING Group, the world's largest life insurance company. ING Vysya Bank,
with1.5 million customers and over 400 outlets and GMR Technologies and Industries
Limited, part of GMR Group also based in Bangalore and involved in the field of power
generation, infrastructural development and several other businesses.ING Vysya Life has
a paid up capital of Rs.140 crores and an authorized capital of Rs.200 crores.

Life insurance products offered by the company are:
1) Protection plan
 Critical illness plan
 `Endowment plan
2) Savings plan
 Endowment plan
 Child protection plan
 Money back plan
3) Investment Plan
 Whole life plan
 Limited payment endowment plan
 Anticipated whole life plan
4) Retirement Plan
 Best years
 New Future Perfect
 Tata-AIG Life Insurance
Tata-AIG Life Insurance company is a joint venture between the Tata Group and
American International Group Inc (AIG), the leading US-based international insurance
and financial services organization and the largest underwriter of commercial and
industrial insurance in America.
Its member companies write a wide range of commercial, personal and life
insurance products through a variety of distribution channels in approximately 130
countries and jurisdictions throughout the world. AIG’s global businesses also include
financial services and asset management, including aircraft leasing, financial products,
trading and market making, consumer finance, institutional, retail and direct investment
fund asset management, real estate investment management, and retirement savings
products.

Areas of business
Tata-AIG Life Insurance products include a broad array of life insurance coverage
to both individuals and groups. For groups, the company has life products whereas for
individuals, it has term products, endowment products as well as money-back products.
For groups and individuals, various types of add-ons and options are available to
given consumer’s flexibility and choice.
 HDFC STANDARD LIFE
The Partnership:
HDFC and Standard Life first came together for a possible joint venture, to enter
the Life Insurance market, in January 1995. It was clear from the outset that both
companies shared similar values and beliefs and a strong relationship quickly formed. In
October1995 the companies signed a 3 year joint venture agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further
strengthening the relationship.
The next three years were filled with uncertainty, due to changes in government
and ongoing delays in getting the IRDA (Insurance Regulatory and Development
authority) Act passed in parliament. Despite this both companies remained firmly
committed to the venture.
In October 1998, the joint venture agreement was renewed and additional resource
made available. Around this time Standard Life purchased 2% of Infrastructure
Development
Finance Company Ltd. (IDFC). Standard Life also started to use the services of
the HDFC Treasury department to advise them upon their investments in India.
Towards the end of 1999, the opening of the market looked very promising and
both companies agreed the time was right to move the operation to the next level.
Therefore, in January 2000 an expert team from the UK joined a handpicked team from
HDFC to form the core project team, based in Mumbai.
Around this time Standard Life purchased a further 5% stake in HDFC and a 5%
stake in HDFC Bank.

In a further development Standard Life agreed to participate in the Asset
Management Company promoted by HDFC to enter the mutual fund market. The Mutual
Fund was launched on 20th July 2000
Incorporation of HDFC Standard Life Insurance Company Limited:
The company was incorporated on 14th August 2000 under the name of HDFC
Standard Life Insurance Company Limited.
Company’s ambition from as far back as October 1995, was to be the first private
company to re-enter the life insurance market in India. On the 23rd of October 2000, this
ambition was realized when HDFC Standard Life was the only life company to begranted
a certificate of registration.
HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while
Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC
Group, this is the maximum investment allowed under current regulations.
HDFC and Standard Life have a long and close relationship built upon shared values and
trust. The ambition of HDFC Standard Life is to mirror the success of the parent
companies and be the yardstick by which all other insurance company's in India are
measured.
HDFC Standard Life's cumulative premium income, including the first year
premiums and renewal premiums is Rs. 672.3 Crores for the financial year, Apr-Nov
2005. So far the company has covered over 11,00,000 individuals and has declared 5th
consecutive bonus in as many years for its 'with profit' policyholders.
Products offered by the company are:
INDIVIDUAL PLAN
 With Profit Endowment Assurance
 With Profits Money Back
 Single Premium Whole of Life
 Term assurance Plan
 Loan Cover Term Assurance
 Personal Pension Plan

 Children’s Plan
GROUP PLANS
 Group Term Insurance
 Development Insurance Plan
 ICICI PRUDENTIAL LIFE INSURANCE COMPANY
ICICI Prudential Life Insurance Company is a joint venture between ICICI,
apremier financial powerhouse and prudential plc, a leading international financial
services group headquartered in the United Kingdom. ICICI Prudential was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA).
ICICI Prudential is currently the No. 1 private life insurer in the country. For the
financial year ended March 31, 2005, the company garnered Rs 1584 crore of new
business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000
policies
Products offered by ICICI Prudential are
1) Savings Plan
 Smart kid
 Life Time
 Save ‘n’ Protect
 Cash Back
2) Protection plan
 Life Guard
 Extra Protection Through
 Riders
3) Retirement Plans
 Forever Life
 Life link pension
 Life time pension
 Reassure

4) Investment Plans
 Assure Invest
 Life Link
5) Group plans
 Group Superannuation
 Group Gratuity
 Group Term Assurance
 OM KOTAK MAHINDRA Life Insurance Company
OM Kotak Mahindra Life Insurance Company Limited (OMKM), is a joint
venture between Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At OMKM,
The aim is to help customers take important financial decisions at every stage in life by
offering them a wide range of innovative life insurance products, to make them
financially independent. JeeneKiAzaadi...
The Products offered by the Company are
Individual Plan
 Kotak Endowment Plan
 Kotak Term Plan
 Kotak Retirement Income Plan
 Kotak Child Advantage Plan
 Kotak Preferred Term Plan
 Kotak Capital Multiplier Plan
 Kotak Safe Investment Plan
 Riders
 Exclusions Under Riders
Group Plan
 Kotak Term Grouplan
 Kotak Gratuity Grouplan
 Kotak Credit Term Grouplan
 Riders

 Exclusions Under Riders
Rural
 Kotak Gramina Bimayojana
MET LIFE INSURANCE COMPANY
For almost 135 years, Metropolitan Life Insurance Company has been insuring the
lives of the people who depend on them. Their success is based on their long history of
social responsibility, strong leadership, sound investments, and innovative products and
services.
MetLife Begins
The origins of Metropolitan Life Insurance Company (MetLife) go back to 1863,
when group of New York City businessmen raised $100,000 to found the National Union
Life.
Supporting Country and Community
Over the years, MetLife has made a difference by supporting urban renewal
projects and community financing. The company's social commitment and its
commitment to the security of its policyholders have proven to be good business.
MetLife Today
It is the fastest growing private life insurance company in India
 Currently have over 200,000 satisfied customers
 One of India’s leading private life insurance company.
Total branches of India are, Andhra Pradesh, Delhi, Gujarat, Jammu & Kashmir,
Karnataka, Kerala, Maharashtra, Orissa, Punjab, Rajasthan, Tamilnadu and West Bengal.
Products Offered by the company are
1) Whole Life
 Met 100 Non par
 Met 100 Gold par
 Met 100 Platinum par
2) Endowment
 Met Gold par
 Met Platinum par

 Met Junior par
 Met junior Non par
3) Money Back
 Met Sukh
 Met Junior MB
4) Term
 Met Mortagage Protector
 Met Riders
 Accidental death
 BIRLA SUN LIFE Insurance Company
Birla Sun Life Financial Services offers a range of financial services for resident
Indian sand Non Resident Indians. Brought together by two large, powerful and reputed
business houses, the Aditya Birla Group and Sun Life Financial, it is our aim to offer
diverse and top quality financial services to customers. The Mutual Fund and Insurance
companies provide wealth management and protection products to customers while the
Distribution and Securities companies provide brokerage and trading services for
investment inequities, debt securities, fixed deposits, etc.
Insurance is not about something going wrong. It's often about things going right.
One of the wonders of human nature is that we never believe anything can actually go
wrong.
Surely, life has its share of ifs. At Birla Sun Life however, they believe it has its
equally pleasant share of buts as well. Birla Sun Life stand committed to help you realize
those happy moments which make a life. Be it living the same lifestyle in your post
retirement days or providing a secure future for your loved ones, in case something
happens to you.

The life insurance products offered by the company are
Individual life
 Premium Back Term Plan
 Flexi SecureLife Retirement Plan
 Single Premium Bond
 Birla Sun Life Term Plan
 Flexi Life Line Whole Life Plan
 Flexi Cash Flow Money back Plan
 Group Life
 Pro Group Term Insurance
 Group Superannuation Plan
 Group Gratuity Plan
 MAX NEW YORK LIFE INSURANCE
Max New York Life Insurance Company Limited is a joint venture between Max
India Limited, a multi-business corporate, and New York Life International, a global
expert in life insurance. Max New York Life today emerged as the country's leading
private life insurance company. New York Life is a Fortune 100 company that has over
160 years of experience in the life insurance business. Max India Limited is a multi-
business corporate dealing in Clinical Research, IT and Telecom Services, and Specialty
Plastic Products businesses. Max New York Life Insurance started its operations in India
in 2000. It is the first life insurance company in India to be awarded the IS0 9001:2000
certifications. Max New York offers customized products tailored to suit individual's
needs. With its various Products and Riders, there are more than 400 product
combinations to choose from.

Today, Max New York Life Insurance has a network of 57 offices
spread over 37 cities all over India.
The products are –
 Whole Life Participating d Convertible
 Whole Life-Non-Participating,
 Children Endowment at age 18,
 Children Endowment at age 24,
 20-year Endowment Participating Policy,
 Endowment to age 60

2.18. Research literature Review
Kotler, (1973)1 considers insurance to be in the category of "unsought goods,"
along with products such as preventive dental services and burial plots. He notes that
unsought goods pose special challenges to the marketer.
Slovic.Fischhoff, Lichtenstein, Corrigan, and Combs (1977)2 found that
subjects were more likely to buy insurance against small, high-probability losses than
insurance against large, lowprobability losses, Hershey and Schoemaker (1980) reported
the opposite result.
Mehr and Cammack (1976)3 agrees that Insurance is usually thought of as a of
product that spreads the risk of serious, but low-probability, losses among a s group of
individuals, thus providing some financial protection to each individual.
Kunreuther, (1979)4 said that his product makes good sense, particularly when
the protection is purchased against potential losses so large as to be catastrophic, such as
total destruction of one's home, a large accident liability judgment, or death of primary
family breadwinner. However, it has long been recognized that this sensible product is
difficult to sell.
Kunreuther (1979)5 “It is not the magnitude of a potential loss that inspires
people to buy insurance voluntarily - it is the frequency with which a loss is likely to
occur”
Kahneman&Tversky (1979)6 reported a risk-averse individual therefore should
avoid nearly all types of risk. Empirical evidence, however, suggests most people basis
are risk averse for gains and risk seeking for losses.
Roger. A. Formisano (1981)7 examined, via consumer interviews, the impact of
the National Association of Insurance Commissioner's Model Life Insurance Solicitation
Regulation as implemented in New Jersey. A substantial portion of the insurance buyers
sampled did not become aware of the provisions of the regulation aimed to improve their
buying ability. Further, many life insurance buyers were not well informed concerning the
nature and operation of life insurance contracts, and in particular, the life insurance
policies that they had purchased.
Michael L. Smith (1982)8 said that a typical life insurance contract provides a
package of options or rights to the policy owner that is not precisely duplicated by any
other combination of commonly oc available contracts viewed from this perspective, life

insurance enjoy unique position in the field of investments and should be judged in this
light. The paper shows that an options viewpoint provides a more complete explanation of
policy owner behavior towards life insurance than the conventional savings-and-
protection view.
Kahneman&Tversky, (1984)9 stated indeed, repeated demonstrations have shown
most people lack an adequate understanding of probability and risk concepts Dhar, (1997)
Greenleaf and Lehmann (1995) Tversky and Shafir. (1992) have shown that offering
more options can generate decision conflict and preference uncertainty, leading to
decision deferral.
Michael L. Walden (1985)10 told that the option's package view of the whole life
insurance policy suggests that a whole life policy is a package of options, each of which
has value and is expected to influence the price of the policy. This viewpoint implies the
general hypothesis that price differences between whole life policies can be explained by
differences in policy contract and provisions and differences in selected company
characteristics. The option's package theory was empirically investigated using regression
analysis on data from a sample of policies marketed in North Carolina The results suggest
support for the options package theory.
Christiansen (1988)11 focused on the consumer perception of products, services, and
companies of the U.S. life insurance industry. The author found that life insurance
companies shared a common theme of negative consumer perceptions, but found a
positive change in the consumer’s view of life insurance policies for funding college
education for their children, and concluded that the role of insurance agents in affecting
consumer perception was highly significant.
Evan Mills, Ph.D. (1999)12 Studied the insurance industry is rarely thought of as
having much concern about energy issues. However, the historical involvement by
insurers and allied industries in the development and deployment of familiar technologies
such as automobile air bags, fire prevention/suppression systems, and anti-theft devices,
shows that this industry has a long history of utilizing technology to improve safety and
otherwise reduce the likelihood of losses for which they would otherwise have to pay. We
have identified nearly 80 examples of energy-efficient and renewable energy technologies
that offer “loss-prevention” benefits, and have mapped these opportunities onto the

appropriate segments of the very diverse insurance sector (life, health, property, liability,
business interruption, etc.).
Kircher and Angela-Christian Hubert (1999)13 found that the present study
aims at describing spouses relative dominance in decisions concerming different forms of
investment. As determinants of spouses dominance.partnership characteristics, such as
partnership role artitudes, marital , and individual expertise in relation to different
investment were considered. A questionnaires on spouses dominance in making decisions
on various investments on the characteristics of particular investments and on partnership
characteristics was completed by 142 Austrian couple, Basically, wae appeared to adopt
to the dominance exerted by their husband, in saving and investment decisiond were
dominance was highest in egalitarian partnership, where autonomic and wife dominaed
decisions were reported more frequently than in traditional partnership. Additionally
spouses relative expertise in relation to the investments in question showed strong effects
on dominance distribution. spouses with highet expertise than their experties more
dominaince in decision-making processes.
Ramade and Ahuja (1999)14 presented an overview of life insurance operations
in India, and identified the emergingstrategic issues inlight of liberalization and the
impending private sector entry into insurance. The need for private sector entry was
justified on the basis of enhancing the efficiency of operations, achieving a greater
density and penetration of life insurance in the country. In the wake of such coming
competition, the government monopoly of LIC is a strong incumbent, and is in a position
to take advantage of its wide reach and more than 40 years of experience.
Beck and webb(2003)15 found that economic indicators such as inflation, income
per capita, bank sector development, and religious and institutional indicators are
robutsperdictors of the use of life insurance they opined that education, life expectancy,
the young dependency ratio and the size of the social security sysemt appear to have no
robust assocation with life insurance consumption. Their results highlight the importance
of price stability and banking sector development in fully realizing the savings and
investment functions of life insurance of an economy.

Srivastava,Shrivastava and Agrawal (2004)16 conducted a study covering 1000
individuals in the city of Bhillai. and concluded that the leadership lies not in getting the
maximum policies sold, but in understanding the demography of the customers and
targeting them in their way.
Amy Wong, (2004)17 empirically examined the role of emotional satisfaction in
service encounters. Specifically, this study seeks to: investigate the relationship between
emotional satisfaction and key concepts, such as service quality, customer loyalty, and
relationship quality, and clarify the role of emotional satisfaction in predicting customer
loyalty and relationship quality. In doing so this study used the relationship between
emotional satisfaction, service quality. customer loyalty, and relationship quality as a
context, as well as data from a sample survey of l,261 Australian retail customers
concerning their evaluation of their shopping experiences to address this issue. The
results show that service quality is positively associated with emotional satisfaction.
which is positively associated with both customer loyalty and relationship quality. Further
investigations showed that customers feelings of enjoyment serve as the best predictor of
customer loyalty, while feelings of happiness serve as the best predictor of relationship
quality. The findings imply the need for a service firm to strategically leverage on the key
antecedents of customer loyalty and relationship quality in its pursuit of customer
retention and long-term profitability.
Stephen Diacon (2004)18 presents the results of a detailed comparison of the
perceptions by individual consumers and expert financial advisers of the investment risk
involved in various UK personal financial services' products. Factor similarity tests show
that there are significant differences between expert and lay investors in the way financial
risks are perceived. Financial experts are likely to be less loss averse than lay investors,
but are prone to affiliation bias (trusting providers and salesmen more than lay investors
do), believe that the products are less complex, and are less cynical and distrustful about
the protection provided by the regulators. The traditional response to the finding that
experts and non-experts have different perceptions and understandings about risk is to
institute risk communication programmes designed to re-educate consumers. However,
this approach is unlikely to be successful in an environment where individual consumers
distrust regulators and other experts.

Kruse and Ozdemir (2004)19 explore the relationship between individual's risk
perceptions and their willingness-to-pay for increased safety in a low-probability, high-
consequence event.
Raman and Gayatri (2004)20have observed the customers s towards new insurance
companies. They found that 53% of the respondents belong to the age group below 30,
24% to the age group 31-40, 2% belong to the age group of 41-50 and the rest of the
respondents belong to the group of above 50. They also observed that a large percentage
of the insured respondents (32%) are professional, and 56% of the respondents are
married it also found that 52% of the respondents have taken a policy to cover risk and
44% of them to avoid tax and the remaining to invest their surplus amount
Sharma (2005)21 performed a study on Insurance perspective in Eastern-up with the
objective of probing into the reasons or the factors behind the purchase of the insurance
product. It was found that according to 93.86% of respondents insurance policies are
considered indispensable for risk protection.
Helmut Gründl, Thomas Post, Roman Schulze, (2005)22 found that demographic
risk, i.e., the risk that life tables change in a nondeterministic way, is a serious threat to
the financial stability of an insurance company having underwritten life insurance and
annuity business. The inverse influence of changes in mortality laws on the market value
of life insurance and annuity liabilities creates natural hedging opportunities.
Namasivayam et al., (2006)23, examined the socioeconomic factors that are
responsible for purchase of life insurance policies and the preference of the policyholders
towards various types of policies of LIC. From the analysis, the study concluded that
factors such as age, educational level and sex of the policyholders are insignificant, but
income level, occupation and family size are significant factors
Chadha and Kapoor (2008)24 showed that customers insurance buying decisions are
influenced by customer relationship management practices and reputation of the
company. In a competitive market, each of the players should create its niche domain
only this would ensure that the customer derives the best benefits out of the competition.
Praveen Sanu, GauravJaiswal and Vijay Kumar Panday (2009)25in their article,
"A Study of Buying Behavior of Consumers towards Life Insurance Company", Prestige
institute of Management and Research, Gwalion revealed that in present Indian market,

the investment habits of Indian consumers are changing very frequently. The individuals
have their own perception towards various types of investment plans.
selvavinayagam, K. and Mathivanan, R. (2010)26 article has revealed that the
competitive climate in the Indian insurance market has changed dramatically over the last
few years. At the same time, changes have been taking place in the government
regulations and technology. The expectations of policyholders are also changing. The
existing insurance companies have to introduce many new products in the market, which
have competitive advantage over the products of life insurance companies.
Perumal (2010)27 illustrated that the Indian insurance sector has adopted the path of
liberalization, and consequently both the positive and negative impacts of globalization
on the economy have been felt. The opening up of the insurance sector to the private
players has definitely been a positive development. The socio demographic and
psychographic trends in the liberalized era are very favourabic for the growth of the
insurance sector. The author concluded that LIC and the private companies should devise
their schemes with due consideration to these challenges.
Ramanathan, K.V. (2011)28research has resulted in the development of a reliable
and valid instrument for assessing customer perceived service quality, awareness level,
and satisfaction level of customers towards life insurance industry. Here, service quality
needs to be measured using a six dimensional hierarchal structure consisting of assurance,
competence, personalized financial planning, corporate im-age, tangibles and technology
dimensions.
S.pushpalathaP.Himajagathi (2013)29are discussed that rural market is vibrant and
holds tremendous potential of growth of insurance schemes with easy premium. the
marketing challenge lies in creating insurance awareness and the identified agents for
promoting life insurance. The preferential factors for opting insurance can be identified as
tax planning and risk cover in spite of various factors like financial compensation,
maximum return and financial safety. There is a major demand for traditional policies
than newly emerged plans such as ULIPS and children plans Agent's behavior along with
brand image made the respondents to choose an insurance company and to select an
appropriate plan.

TABLE 3.1
Age of Respondent
SL.NO AGE IN YEARS NUMBER
OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1 19 – 28 28 56%
2 29 – 38 9 18%
3 39 – 48 6 12%
4 49 – 58 6 12%
5 59 – 68 0 0%
6 69 – 78 1 2%
TOTAL 50 100%
SOURCE: - SURVEY DATA
INTERPRETATION
The above table classified the respondents on the basis of their age group.
The majority of the respondents belong to the age group of 19 to 28 years with 56% and
the second age group is 29 to 38 years with 18%, followed by 39 to 48 years and 49 to 58
years with 12% each. Majority of the insurance holders are belonging to the age group of
20-30 years.
The reason for 20-30 year group people opt for insurance because in Indian culture
marriage will make 20 year to 30 year therefore the persons responsibility will increase.

GRAPH 3.1
Age of Respondents
56%
18%
12% 12%
0%
2%
0%
10%
20%
30%
40%
50%
60%
19-28 29-38 39-48 49-58 59-68 69-78

TABLE 3.2
Proportionate of male and female respondents
TYPES OF
RESPONDENTS
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
MALE RESPONDENTS 37 74%
FEMALE
RESPONDENTS
13 26%
TOTAL 50 100%
INTERPRETATION
This table helps us to understand that there is more number of male consumers
with 74% than the female consumers with 26%. Most of the insurance holders are male
people, so we can reach a conclusion that the male people are more aware about the
insurance and its importance
The reason for male group people opt for insurance because in India male is the
head of the family and his risk is high. To reduce his risk male will buy the insurance.

GRAPH 3.2
Proportionate of male and female respondents
0%
10%
20%
30%
40%
50%
60%
70%
80%
MALE RESPONDENTS FEMALE RESPONDENTS

TABLE 3.3
Insurance investors’ occupation
SL.NO OCCUPATION NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1 STUDENTS 4 8%
2 GOVERNMENT
EMPLOYEES
18 36%
3 PRIVATE
EMPLOYEES
21 42%
4 HOUSE WIFE 7 14%
TOTAL 50 100%
INTERPRETATION
It could be inferred that majority of consumers of life insurance policies are
private employees with 42% and Government employees with 36%, followed by students,
house wife’s. The employees are the large proportion of insurance holders compared to
other categories.
The private and government employees respectly invest there money in insurance
for getting the benefit for tax exemption.

GRAPH 3.3
Insurance investors’ occupation
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
STUDENTS GOVERNMENT
EMPLOYEES
PRIVATE EMPLOYEES HOUSE WIFE

TABLE 3.4
Income Group of Respondents
SL.NO INCOME GROUP NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1 LESS THAN
5000
5 10%
2 5001 –
10,000
8 16%
3 10001 –
15000
14 28%
4 15001 – 25000 19 38%
5 GREATER
THAN 25000
4 8%
TOTAL 50 100%
INTERPRETATION
The majority of dominant income group having life insurance policies belong to
the income group of 15,001 to 25,000, which is middle class group followed by the
income group of 10,001 to 15,000. Most of the consumers of insurance policies are
belonging to the income group of 5000-25000 because now days the salary is base is
5000 to 25000.

GRAPH 3.4
Income Group of Respondents
10
16
28
38
8
0
5
10
15
20
25
30
35
40
5000 5001 – 10,000 10001 – 15000 15001 – 25000 GREATER THAN
25000

TABLE 3.5
Attributes of Respondents
SL.NO ATTRIBUTE SCORE RANK
1 RETURN ON
INVESTMENT
40 1
2 PREMIUM
OUTFLOW
35 2
3 COMPANY
REPUTATION
25 3
4 SERVICE
QUALITY
19 4
5 PRODUCT
QUALITY
17 5
INTERPRETATION
This table shows the strengths and weaknesses of the brand, and what are the
important criteria or attributes on which decision making is done. From this table we can
infer that consumers give more importance for Return on investment, secondly they
prefer premium outflow, and then company reputation followed by service quality and
product quality. The strengths and weaknesses of the brand, and what are the important
criteria or attributes on which decision making is done. From this figure we can infer that
consumers give more importance for Return on investment, secondly they prefer premium
outflow.
Almost all the invest in insurance except the good return on their investment with
consideration of premium.

GRAPH 3.5
Attributes of Respondents
1
2
3
4
5
0
1
2
3
4
5
6

TABLE 3.6
Factors Influenced For Buy Life Insurance Policy
SL.NO FACTORS NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1 PERSONAL
INTEREST
21 42%
2 FAMILY FRIENDS 14 28%
3 AGENTS 6 12%
4 ADVERTISEMENT 9 18%
TOTAL 50 100%
INTERPRETATION
This table is helpful in knowing which media is best suitable for promoting a life
insurance product. It can be seen that personal interest influences a consumers to buy a
life insurance product, followed by family friends, advertisements and agents.
The key factor which influences the consumers to buy the life insurance product is
personal interests, followed by family friends, advertisements and agents.
For family safety the people will buy insurance with personal interest.

GRAPH 3.6
Factors Influenced For Buy Life Insurance Policy
42%
28%
12%
18%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
PERSONAL INTEREST FAMILY FRIENDS AGENTS ADVERTISEMENT

TABLE 3.7
Respondents Preference to Invest Their Money
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
INSURANCE
COMPANY
24 48%
BANK 26 52%
TOTAL 50 100%
INTERPRETATION
From the table it is clear that majority of people (52%) prefer to invest in
Bank and others (48%) prefer to invest in Insurance companies. most of the
respondents are preferred to invest their money in bank rather than insurance sector.
48% of respondent ready to invest in insurance.

GRAPH 3.7
Respondents Preference to Investment
48%
52%
46%
47%
48%
49%
50%
51%
52%
53%
INSURANCE COMPANY BANK

TABLE 3.8
Satisfaction Level of Respondents with Current Life Insurance Company
RESPONSE NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES 47 94%
NO 3 6%
TOTAL 50 100%
INTERPRETATION
From this table it could be inferred that 94% of the consumers are satisfied with
the service and quality of products of their life insurance companies. Only 6% of
consumers are not satisfied. It could be inferred that most of the consumers are satisfied
with the service and quality of products of their life insurance companies.

GRAPH 3.8
Satisfaction level of respondents with current life Insurance Company
94%
6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
YES NO

TABLE 3.9
Ratings of the Services Offered by Life Insurance Company to the Respondent’s
RATINGS NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
EXCELLENT 7 14%
VERY GOOD 12 24%
GOOD 20 40%
AVERAGE 11 22%
POOR 0 0%
TOTAL 50 100%
INTERPRETATION
From this table it could be inferred that 40% of the consumers have rated service
offered as good, 24% of them have rated them as very good, 22% of them have rated as
average and 14% of them have rated as excellent. Most of the respondents have rated
their current life insurance company’s performance as good.

GRAPH 3.9
Ratings of the Services Offered by the Respondent’s Life
Insurance Company
14%
24%
40%
22%
0%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
EXCELLENT VERY GOOD GOOD AVERAGE POOR

TABLE 3.10
Investors’ willingness to communicate the service offered by their life insurance
company
RESPONSES NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES 39 78%
NO 11 22%
TOTAL 50 100%
INTERPRETATION
From this table it can be noted that the majority of consumers (78%) would like to
communicate the service offered by life insurance companies and 22% of consumers
would not like to communicate the service offered. It can be noted that the majority of
consumers would like to communicate the service offered by life insurance companies
The Investors’ willingness to communicate the service offered by their life insurance
company because the company response and quality is good therefore they like to
communicate with other investor.

GRAPH 3.10
Investors’ willingness to communicate the service offered by their life insurance
company
78%
22%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
YES NO

TABLE 3.11
Number of Life Insurance Company Known by Respondents
NUMBER OF LIFE
INSURANCE
COMPANY KNOWN
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
< 5 24 48%
5 – 7 19 38%
8 – 10 5 10%
>10 2 4%
TOTAL 50 100%
INTERPRETATION
This table helps us to know the consumer awareness about the life insurance
companies. 48% of the consumers are aware about less than 5 life insurance companies,
followed by 38% consumers who know 5 to 7 life insurance companies. Most of the
respondents are aware about, around five to six Companies

GRAPH 3.11
Number of Life Insurance Company Known by Respondents
48%
38%
10%
4%
0%
10%
20%
30%
40%
50%
60%
< 5 5 – 7 8 – 10 >10

TABLE 3.12
Different Life Insurance Companies Know By Respondents
COMPANIES NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
LIC 25 50%
TATA AIG 3 6%
HDFC 5 10%
ICICI 8 16%
MET LIFE 2 4%
BAJAJ ALLIANZ 2 4%
ING VYSYA 3 6%
OTHER 2 4%
TOTAL 50 100%
INTERPRETATION
This table helps us to understand the different life insurance companies. LIC has a
major share of 78 %, followed by ICICI Prudential with 16% market share, followed by
HDFC Standard Life with 10% market share. Most of the insurance holders are the
consumers of LIC Since it can be understand that the people are having more trust in the
LIC compared to other private insurance companies.

GRAPH 3.12
Different Life Insurance Companies Known By Respondents
50%
6%
10%
16%
4% 4%
6%
4%
0%
10%
20%
30%
40%
50%
60%
LIC TATA AIG HDFC ICICI MET LIFE BAJAJ
ALLIANZ
ING VYSYA OTHER

TABLE 3.13
Investor Like To Continue With the Same Life Insurance Company
RESPONSES NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES 45 90%
NO 5 10%
TOTAL 50 100%
INTERPRETATION
This table helps us to know that 90% of consumer would like to continue with
same life insurance company. 10% of consumer would not like to continue with same life
insurance company. The most of the insurance holders are like to continue with the same
life insurance company. Some of consumer would not like to continue with same life
insurance company because the satisfaction level is good with their company.

GRAPH 3.13
Investor Like To Continue With the Same Life Insurance Company
90%
10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
YES NO

TABLE 3.14
Number of life insurance policy hold by investors’
SCHEME NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
WHOLE LIFE 19 38%
ENDOWMENT PLUS 13 26%
MONEY BACK 11 22%
PENSION FUND 7 14%
TOTAL 50 100%
INTERPRETATION
This table helps us to know the consumers mostly buy the life insurance product
of 38% of whole life, 26% endowment plus, 22% money back, 14% pension fund. Most
of the insurance holders have a policy scheme of whole life and secondly Endowment
plus. Because whole life policy is best policy

GRAPH 3.14
Number of life insurance policy hold by investors’
38%
26%
22%
14%
0%
5%
10%
15%
20%
25%
30%
35%
40%
WHOLE LIFE ENDOWMENT PLUS MONEY BACK PENSION FUND

TABLE 3.15
Satisfaction Level towards Services Offered By Private Life Insurance
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
FULLY SATISFIDE 15 30%
PARTIALLY SATIFIED 29 58%
NOT SATIFIED 6 12%
TOTAL 50 100%
INTERPRETATION
This table helps us to know the consumer’s satisfaction level firstly 58% are
partially satisfied, secondly 30% are fully satisfied and 12% are not satisfied. Most of
consumer is partly satisfied and some consumer is fully satisfied and also some consumer
not satisfied.

GRAPH 3.15
Satisfaction Level towards Services Offered By Private Life Insurance
30%
58%
12%
0%
10%
20%
30%
40%
50%
60%
70%
FULLY SATISFIDE PARTIALLY SATIFIED NOT SATIFIED

TABLE 3.16
Formalities in Private Life Insurance Companies
RESPONSES NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES 5 10%
NO 45 90%
TOTAL 50 100%
INTERPRETATION
This table helps us to know that 90% of consumer said that private life insurance
company don’t have a complex formalities and 10% consumer of said that private life
insurance company have a complex formalities in private life insurance company. It can
be noted that the majority of consumers said that private life insurance don’t have
complex formalities and some of them said that private life insurance company have a
complex formalities in private life insurance company.

GRAPH 3.16
Formalities in Private Life Insurance Companies
10%
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
YES NO

TABLE 3.17
New Policy Would You Like To Go For
RESPONSES NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
LIC 40 80%
PRIVATE LIFE
INSURANCE
10 20%
TOTAL 50 100%
INTERPRETATION
This table shows the strengths and weaknesses of the brand, and what are the
important criteria or attributes on which decision making is done. From this table we can
infer that consumers give more importance for LIC, secondly they prefer Private Life
Insurance. The strengths and weaknesses of the brand, and what are the important criteria
or attributes on which decision making is done. From this figure we can infer that
consumers give more importance for LIC, secondly they prefer Private life insurance.

GRAPH 3.17
New Policy Would You Like To Go For
80%
20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Category 1 PRIVATE LIFE INSURENCE

TABLE 3.18
Satisfaction of private life insurance policy holder towards private life insurance
company
RESPONSES NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
YES 44 88%
NO 06 12%
TOTAL 50 100%
INTERPRETATION
This table shows the consumer opinion on agents of private life insurance 88% of
consumer say that they provide correct information and 12% of consumer say that did not
provide correct information. The consumer opinion on agents of private life insurance
consumer say that they provide correct information and some consumer say that did not
provide correct information

GRAPH 3.18
Satisfaction of private life insurance policy holder towards private life insurance
company
88%
12%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
YES NO

TABLE 3.19
Investor like More in Insurance Policies of Private Life Insurance
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
MORE BENEFITS 17 34%
MORE SECURITY 18 36%
BOTH 15 30%
TOTAL 50 100%
INTERPRETATION
This table helps us to know the consumer’s what expects from private life
insurance firstly 58% are expects more benefits, secondly 36% are expects more security
and 30 % are expects both . The consumer’s what expects from private life insurance
firstly are expects more benefits, secondly are expects more security and are expects both.
36% of people expect more from the insurance.

GRAPH 3.19
Investor like More in Insurance Policies of Private Life Insurance
0%
50%
100%
150%
200%
250%
300%
350%
400%
MORE BENEFITS MORE SECURITY BOTH

TABLE 3.20
Overall Satisfaction with Insurance Policies of Private Life Insurance
NUMBER OF
RESPONDENTS
PERCENTAGE OF
RESPONDENTS
HIGHLY
SATISFACTORY
10 20%
SATISFACTORY
AVERAGE
32 64%
DISSATISFACTORY 5 10%
HIGHLY
DISSATISFACTORY
3 6%
TOTAL 50 100%
INTERPRETATION
This table helps us to know the consumer’s satisfactory level of consumer firstly
64% are satisfactory average, secondly 20% are highly satisfactory and 10% are
dissatisfactory and finally 6% are highly dissatisfactory. The consumer’s satisfactory
level of consumer firstly is satisfactory average, secondly is highly satisfactory and is
dissatisfactory and finally is highly dissatisfactory.

GRAPH 3.20
Overall Satisfaction with Insurance Policies of Private Life Insurance
0%
10%
20%
30%
40%
50%
60%
70%
HIGHLY SATISFACTORY SATISFACTORY
AVERAGE
DISSATISFACTORY HIGHLY
DISSATISFACTORY

4. FINDINGS
 The 56% of respondents there willing to invested in insurance there are belongs to
the categories of 19-28 year age group, the major reason are 19-28 group people
invested in insurance because in India and special malnad region male and female
met the marriage in between 19-28 years therefore they want to minimize the risk
and uncertainty they invest the money in insurance.
 The 2% of people invest in insurance managerial for health insurance.
 72% of male respondent showing the positive attitude to invest money in
insurance the major reason, main is the head of the family.
 42% and 36% of private employees and government employees respectly invest
the money in insurance for getting the benefit for tax exemption.
 38% respondent are belongs to the income level of Rs 15,000-25,000 as annual
income.
 Almost all the investor in insurance expects the good return on their investment
with consideration of premium.
 28% life insurance policy is purchase by life insurance holder family and friend.
 48% of respondent ready to insurance in insurance.
 94% of people are satisfied by the life insurance company because liablaraties
policy.
 40% respondents there given good rating for Life Insurance Company.
 78% of respondents are willing to communicate the services.
 48% of respondents are holding a less than 5 insurance policy.
 80% of people ready to invest money in LIC.
 36% of people expect more safety form the insurance.
 10% of respondent they won’t continue in the company because of inadicvates
information and unsatisfactory service.

5. SUGGESTION
 56% of respondents invested money in insurance therefore insurance company
special private insurance company plan to introduce new type of policy to attract
the people who are belongs to 19-28 year group.
 The age group of 59-68 they want invest in insurance the major reason is 59-68
period of retirement.
 Only 26% of female respondent showing positive attitude in invest the money in
insurance therefore support attractive policy for female is essential.
 52% of respondents ready to invest money in bank because they expect high level
of safety therefore high bread instrument is essential to attract people and give a
high level of safety and return.
 22% people there give the average rating for life insurance company therefore
high bread instrument are essential.
 Only 20% respondent invests money in private life insurance company therefore
private life insurance company very careful about framing new policies.

anaalysis of life insurance buyers perception towards private life insurance company and policies

anaalysis of life insurance buyers perception towards private life insurance company and policies

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