csdfeff

1. A
Summer Placement Report
on
HDFC Standard Life Insurance Company Limited
Submitted in partial fulfillment for Post Graduate Diploma in Management
from Aravali Institute of Management, Jodhpur.
Submitted to: Submitted by:
Prof. M. M. Mehta Ravi Agarwal
PGP – 2, PGDM
Roll No. - 01
ARAVALI INSTITUTE OF MANAGEMENT
(An institution of Marwar Education Foundation)
Marwar Bhawan, Polo No. 2, Paota,

2. Jodhpur (Raj.)
EXECUTIVE SUMMARY
HDFC Standard Life insurance is the oldest life insurance company in the world. It is the
largest insurer in the UK and is the 28
th
largest company in the world. In India, the
company is marketing life insurance products and unit linked investment plans. From
my research at HDFC SLIC, I found that the company has a lot of competition from
other private insurers like ICICI, Aviva, Birla Sun Life and Tata AIG. It also faces
competition from LIC. To compete effectively HDFC SLIC could launch cheaper and
more reasonable products with small premiums and short policy terms (the number of
year’s premium is to be paid). The ideal premium would be between Rs. 5000 – Rs.
25000 and an ideal policy term would be 10 – 20 years.
HDFC must advertise regularly and create brand value for its products and services.
Most of its competitors like Aviva, ICICI, Max, Reliance and LIC use television
advertisements to promote their products. The Indian consumer has a false perception
about insurance – they feel that it would not benefit them if they do not live through the
policy term. Nowadays however, most policies are unit linked plans where a customer is
benefited even if their death does not occur during the policy term. This message
should be conveyed to potential customers so that they readily invest in insurance.
2

3. Family responsibilities and high returns are the two main reasons people invest in
insurance. Optimum returns of 16 – 20 % must be provided to consumers to keep them
interested in purchasing insurance.
On the whole HDFC standard life insurance is a good place to work at. Every new
recruit is provided with extensive training on unit linked funds, financial instruments and
the products of HDFC. This training enables an advisor/sales manager to market the
policies better. HDFC was ranked 13 in the Best Places to Work survey. The company
should try to create awareness about itself in India. In the global market it is already
very popular. With an improvement in the sales techniques used, a fair bit of advertising
and modifications to the existing product portfolio, HDFC would be all set to capture the
insurance market in India as it has around the globe.
TABLE OF CONTENTS
Introduction to Insurance 5
Research Design 10
Company Profileof HDFC SLIC 16
Company Profile of Tata AIG LIC 29
POP’s and POD’s 33
3

4. Competitive analysis 38
Marketing problems 43
Analysis and Interpretation 46
Future line of research 63
Conclusion 65
References 67
Appendix 68
4

5. ACKNOWLEDGMENT
I would like to thank my project guide Mr. B. K. Panda, Sales Development Manager
HDFC Standard Life Insurance, New Delhi for guiding me through my summer
internship and research project. His encouragement, time and effort are greatly
appreciated.
I would like to thank Prof. Varun Arya, Prof. M. M. Mehta and Mr. Sanjay Diddee for
supporting me during this project and providing me an opportunity to learn outside the
class room. It was a truly wonderful learning experience.
I would like to dedicate this project to my parents. Without their help and constant
support this project would not have been possible.
Lastly I would like to thank all the respondents who offered their opinions and
suggestions through the survey that was conducted by me in Jodhpur.
5

6. CHAPTER I
INDIAN INSURANCE
6

7. INDUSTRY
“AN OVERVIEW”
7

8. THE INSURANCE INDUSTRY IN INDIA
AN OVERVIEW
With the largest number of life insurance policies in force in the world, Insurance
happens to be a mega opportunity in India. It’s a business growing at the rate of 15-20
per cent annually and presently is of the order of Rs 1560.41 billion (for the financial
year 2006 – 2007). Together with banking services, it adds about 7% to the country’s
Gross Domestic Product (GDP). The gross premium collection is nearly 2% of GDP and
funds available with LIC for investments are 8% of the GDP.
Even so nearly 65% of the Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. A large
part of our population is also subject to weak social security and pension systems with
hardly any old age income security. This in itself is an indicator that growth potential for
the insurance sector in India is immense.
A well-developed and evolved insurance sector is needed for economic development as
it provides long term funds for infrastructure development and strengthens the risk
taking ability of individuals. It is estimated that over the next ten years India would
require investments of the order of one trillion US dollars. The Insurance sector, to
some extent, can enable investments in infrastructure development to sustain the
economic growth of the country. (Source: www.indiacore.com)
8

9. HISTORICAL PERSPECTIVE
The history of life insurance in India dates back to 1818 when it was conceived as a
means to provide for English Widows. Interestingly in those days a higher premium was
charged for Indian lives than the non - Indian lives, as Indian lives were considered
more risky to cover. The Bombay Mutual Life Insurance Society started its business in
1870. It was the first company to charge the same premium for both Indian and non-
Indian lives.
The Oriental Assurance Company was established in 1880. The General insurance
business in India, on the other hand, can trace its roots to Triton Insurance Company
Limited, the first general insurance company established in the year 1850 in Calcutta by
the British. Till the end of the nineteenth century insurance business was almost entirely
in the hands of overseas companies.
Insurance regulation formally began in India with the passing of the Life Insurance
Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during the
1920's and 1930's sullied insurance business in India. By 1938 there were 176
insurance companies.
The first comprehensive legislation was introduced with the Insurance Act of 1938 that
provided strict State Control over the insurance business. The insurance business grew
at a faster pace after independence. Indian companies strengthened their hold on this
9

10. business but despite the growth that was witnessed, insurance remained an urban
phenomenon.
The Government of India in 1956, brought together over 240 private life insurers and
provident societies under one nationalized monopoly corporation and Life Insurance
Corporation (LIC) was born. Nationalization was justified on the grounds that it would
create the much needed funds for rapid industrialization. This was in conformity with the
Government's chosen path of State led planning and development.
The non-life insurance business continued to thrive with the private sector till 1972.
Their operations were restricted to organized trade and industry in large cities. The
general insurance industry was nationalized in 1972. With this, nearly 107 insurers were
amalgamated and grouped into four companies- National Insurance Company, New
India Assurance Company, Oriental Insurance Company and United India Insurance
Company. These were subsidiaries of the General Insurance Company (GIC).
KEY MILESTONES
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate
the life insurance business.
10

11. 1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers along with provident societies were taken over
by the central government and nationalized. LIC was formed by an Act of Parliament-
LIC Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.
INDUSTRY REFORMS
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
11

12. companies would have a trained workforce of insurance agents in place to sell their
products.
PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA
The life insurance industry in India grew by an impressive 47.38%, with premium
income at Rs. 1560.41 billion during the fiscal year 2006-2007. Though the total volume
of LIC's business increased in the last fiscal year (2006-2007) compared to the previous
one, its market share came down from 85.75% to 81.91%.
The 17 private insurers increased their market share from about 15% to about 19% in a
year's time. The figures for the first two months of the fiscal year 2007-08 also speak of
the growing share of the private insurers. The share of LIC for this period has further
come down to 75 percent, while the private players have grabbed over 24 percent.
With the opening up of the insurance industry in India many foreign players have
entered the market. The restriction on these companies is that they are not allowed to
have more than a 26% stake in a company’s ownership.
12

13. Since the opening up of the insurance sector in 1999, foreign investments of Rs. 8.7
billion have poured into the Indian market and 19 private life insurance companies have
been granted licenses.
Innovative products, smart marketing, and aggressive distribution have enabled
fledgling private insurance companies to sign up Indian customers faster than anyone
expected. Indians, who had always seen life insurance as a tax saving device, are now
suddenly turning to the private sector and snapping up the new innovative products on
offer. Some of these products include investment plans with insurance and good returns
(unit linked plans), multi – purpose insurance plans, pension plans, child plans and
money back plans. (www.wikipedia.com)
13

14. CHAPTER II
RESEARCH DESIGN
14

15. RESEARCH DESIGN
INTRODUCTION
A Research Design is the framework or plan for a study which is used as a guide in
collecting and analyzing the data collected. It is the blue print that is followed in
completing the study. The basic objective of research cannot be attained without a
proper research design. It specifies the methods and procedures for acquiring the
information needed to conduct the research effectively. It is the overall operational
pattern of the project that stipulates what information needs to be collected, from which
sources and by what methods.
TITLE OF THE STUDY
“To Compare the products of HDFC Standard Life Insurance Company
Limited and Tata AIG Life Insurance Company Limited for HDFC Standard
Life Insurance Company Ltd.”
15

16. STATEMENT OF THE PROBLEM
This study was undertaken to identify which type of insurance plans HDFC SLIC should
market to beat Tata AIG LIC in India. A survey was undertaken to understand the
preferences of Indian consumers with respect to insurance. While marketing policies the
sole duty of an advisor/ agent is to provide insurance plans as per customer
requirements.
In effect plans (insurance products) should be flexible to suit individual requirements.
This research tries to analyze some key factors which influence the purchase of
insurance like the term of the policy, the type of company, the amount of annual
premium payable (capacity and willingness to spend), risk taking ability and the
influence of advertising. Solutions and recommendations are made based on qualitative
and quantitative analysis of the data.
OBJECTIVES OF THE STUDY
 To analysis the product details of HDFC Standard life Insurance Company
limited and Tata AIG life Insurance Company Limited.
 To find ‘Points of Parity’ and ‘Points of Difference’ of HDFC Standard Life
Insurance Company Limited and Tata AIG Life Insurance Company Limited.
16

17.  To find out factors that influence customers to purchase insurance policies
and give suggestions for further improvement.
RESEARCH METHODOLOGY
TYPE OF DATA COLLECTED
There are two types of data used. They are primary and secondary data. Primary data
is defined as data that is collected from original sources for a specific purpose.
Secondary data is data collected from indirect sources. (Source: Research
Methodology, By C. R. Kothari)
PRIMARY SOURCES
These include the survey or questionnaire method, telephonic interview as well as the
personal interview methods of data collection.
SECONDARY SOURCES
These include books, the internet, company brochures, product brochures, the
company website, competitor’s websites etc, newspaper articles etc.
17

18. SAMPLING
Sampling refers to the method of selecting a sample from a given universe with a view
to draw conclusions about that universe. A sample is a representative of the universe
selected for study.
SAMPLE SIZE
The sample size for the survey conducted was 270 respondents. This sample size
was taken on 95% confidence level and 6 significant level. Data universe for this
sample is 10,00,000 which is approx population of Jodhpur excluding people below age
of 18 years.
SAMPLING TECHNIQUE
Random sampling technique was used in the survey conducted.
PLAN OF ANALYSIS
Tables were used for the analysis of the collected data. The data is also neatly
presented with the help of statistical tools such as graphs and pie charts. Percentages
and averages have also been used to represent data clearly and effectively.
18

19. STUDY AREA
The samples referred to were residing in Jodhpur City. The areas covered were Shastri
Nagar, Sardarpura, Masuriya, Subhash Nagar, City Area and Kamla Nehru Nagar.
OVERVIEW OF CHAPTER SCHEME
CHAPTER 1:
Introduction to insurance - An overview of the industry in India, history, key
milestones, reforms in the industry, present scenario in India.
CHAPTER 2:
Research Design - Introduction, title of the study, statement of the problem,
objectives of the study, research methodology, sampling, plan of analysis and study
area.
19

20. CHAPTER 3:
Company profile of HDFC SLIC – Introduction of HDFC SLIC, products and
services, vision and core values, human resource, organizational structure,
introduction to unit linked funds, national & international presence of the
organization.
CHAPTER 4:
Company profile of Tata AIG – Introduction of Tata AIG, products and
services, vision and core values. The advantages of investing in HDFC SLIC
compared to other financial instruments.
CHAPTER 5:
Points of Parity and Points of Difference between HDFC SLIC and Tata
AIG LIC – Comparison between different plans, charges, fees, deductions and
riders available with HDFC SLIC and Tata AIG LIC
CHAPTER 6:
Competitive analysis – Information about the plans offered by LIC and other
private insurers in India. Comparisons between the plans to find the most popular
and beneficial plans which HDFC SLIC can incorporate into their product portfolio.
20

21. CHAPTER 7:
Marketing problems - The techniques used to market insurance and their
advantages and disadvantages along with suggestions for improvement.
CHAPTER 8:
Analysis and Interpretation – A survey on factors that influence people to
purchase Life Insurance Policy.
CHAPTER 9:
Problems requiring more research – Future line of work
CHAPTER 10:
Conclusion
References
Appendices
21

22. CHAPTER III
22

23. COMPANY PROFILE
OF
HDFC STANDARD
LIFE INSURANCE
COMPANY LTD.
23

24. HDFC STANDARD LIFE INSURANCE COMPANY
LIMITED
INTRODUCTION
HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since
emerged as the largest residential mortgage finance institution in the country. The
corporation has had a series of share issues raising its capital to Rs. 119 Crores. The
gross premium income for the year ending March 31, 2007 stood at Rs. 2,856 Crores
and new business premium income at Rs. 1,624 Crores. The company has covered
over 8,77,000 lives year ending March 31, 2007.
HDFC operates through almost 450 locations throughout the country with its corporate
head quarters in Mumbai, India. HDFC also has an International Office in Dubai, UAE
with service associates in Kuwait, Oman and Qatar. HDFC is the largest housing
company in India for the last 27 years.
SNAPSHOT-I
• Incorporated in 1977 as the first specialized Mortgage Company in India.
• Almost 90% of initial shareholding in the hands of domestic institutes and retail
investors. Current 77% of shares held by foreign institutional investors.
24

25. • Besides the core business of mortgage HDFC has evolved into a financial
conglomerate with holdings In:
 HDFC Standard Life insurance Company- HDFC holds 78.07 %.
 HDFC Asset Management Company – HDFC holds 50.1%
 HDFC Bank- HDFC holds 22.25%.
 Intelenet Global (Business Process Outsourcing) – HDFC holds 50%.
 HDFC Chubb General Insurance Company – HDFC holds 74%.
25

26. SNAPSHOT-II
• Loan Approvals Rs. 805 billion.
(up to Dec 2007) (US $ 18.30 bn.)
• Loan Disbursements Rs.669 billion
(up to Dec. 2007) (US $ 15.20 bn)
• Housing Units Financed 2.5 million.
• Distribution
 Offices 181
 Outreach Programs 90
KEY PLAYERS
Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive
Chairman of Housing Development Finance Corporation Limited (HDFC Limited). He
joined HDFC Limited in a senior management position in 1978. He was inducted as a
whole-time director of HDFC Limited in 1985 and was appointed as its Executive
Chairman in 1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is a
Fellow of the Institute of Chartered Accountants (England & Wales).
26

27. Mr. Deepak M Satwalekar is the Managing Director and CEO of the Company since
November, 2000. Prior to this, he was the Managing Director of HDFC Limited since
1993. Mr. Satwalekar obtained a Bachelors Degree in Technology from the Indian
Institute of Technology, Bombay and a Masters Degree in Business Administration from
The American University, Washington DC.
GROUP COMPANIES
HDFC Bank: World Class Indian Bank- among the top private banks in India.
HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.
Intelenet Global: BPO services for international customers.
CIBIL: Credit Information Bureau India Limited.
HDFC Chubb: Upcoming Private companies in the field of General Insurance.
HDFC Mutual Fund
HDFC reality.com: Helps to search properties in all major cities in India
HDFC securities
27

28. STANDARD LIFE
Standard Life is Europe’s largest mutual life assurance company. Standard Life, which
has been in the life insurance business for the past 175 years is a modern company
surviving quite a few changes since selling its first policy in 1825. The company
expanded in the 19
th
century from kits original Edinburgh premises, opening offices in
other towns and acquitting other similar businesses.
Standard Life Currently has assets exceeding over £ 70 billion under its management
and has the distinction of being accorded “AAA” rating consequently for the six years by
Standard and Poor.
SNAPSHOT
• Founded in 1875, company supporting generation for last 179 years.
• Currently over 5 million Policy holders benefiting from the services offered.
• Europe’s largest mutual life insurer.
JOINT VENTURE
28

29. HDFC Standard Life Insurance Company Limited was one of the first companies to be
granted license by the IRDA to operate in life insurance sector. Reach of the JV player
is highly rated and been conferred with many awards. HDFC is rated ‘AAA ’ by both
CRISIL and ICRA. Similarly, Standard Life is rated ‘AAA’ both by Moody’s and Standard
and Poor’s. These reflect the efficiency with which HDFC and Standard Life manage
their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr. respectively.
HDFC Standard Life Insurance Company Ltd was incorporated on 14
th
August 2000.
HDFC is the majority stakeholder in the insurance JV with 81.4% staple and Standard
of as a staple 18.6% Mr. Deepak Satwalekar is the MD and CEO of the venture.
HDFC Standard Life Insurance Company Ltd. Is one of India’s leading Private Life
Insurance Companies, which offers a range of individual and group insurance solutions.
It is a joint venture between Housing Development Finance Corporation Limited (HDFC
Ltd.) India’s leading housing finance institution and the Standard Life Assurance
Company, a leading provider of financial services from the United Kingdom. Both the
promoters are will known for their ethical dealings and financial strength and are thus
committed to being a long-term player in the life insurance industry- all important factors
to consider when choosing your insurer.
BUSINESS GROWTH
29

30. Track Record so far
The gross premium income of HDFC, for the year ending March 31, 2007 stood at Rs.
2,856 crores and new business premium income at Rs. 1,624 crores.
The company has covered over 8,77,000 lives year ending March 31, 2007. Company
also declared our 5
th
consecutive bonus in as many years for our ‘with profit’
policyholders.
KEY STRENGTH
Financial Expertise
As a joint venture of leading financial services groups. HDFC standard Life has the
financial expertise required to manage long-term investments safely and efficiently.
Range of Solutions
HDFC SLIC has a range of individual and group solutions, which can be easily
customized to specific needs. These group solutions have been designed to offer
complete flexibility combined with a low charging structure.
Strong Ethical Values:
HDFC SLIC is an ethical and Cultural Organization. False selling or false commitment
with the customers is not allowed.
Most respected Private Insurance Company
30

31. HDFC SLIC was awarded No-1 Private Insurance Company in 2004 by the World Class
Magazine Business World for Integrity, Innovation and Customer Care.
CORPORATE OBJECTIVE
Vision
'The most successful and admired life insurance company, which means that we are the
most trusted company, the easiest to deal with, offer the best value for money, and set
the standards in the industry'.
'The most obvious choice for all'.
Values
.Integrity
.Innovation
.Customer centric
.People Care One for all
.Teamwork
.Joy and Simplicity
PRODUCTS & SERVICES
31

32. The right investment strategies won't just help plan for a more comfortable tomorrow --
they will help you get “Sar Utha ke Jiyo”. At HDFC SLIC, life insurance plans are
created keeping in mind the changing needs of family. Its life insurance plans are
designed to provide you with flexible options that meet both protection and savings
needs. It offers a full range of transparent, flexible and value for money products. HDFC
SLIC products are modern and contemporary unitized products that offer unique
customer benefits like flexibility to choose cover levels, indexation and partial
withdrawals. (Source: www.hdfcslic.com)
PLANS THAT ARE OFFERED BY HDFC STANDARDS LIFE
INSURANCE
Individual Products
Protection Plans
A person can protect his family against the loss of his income or the burden of a loan
in the event of his unfortunate demise, disability or sickness. These plans offer
valuable peace of mind at a small price. Protection range includes our Term
Assurance Plan & Loan Cover Term Assurance Plan.
Investment Plans
HDFC SLIC’s Single Premium Whole of Life plan is well suited to meet long
32

33. term investment needs. This provides attractive long term returns through regular
bonuses.
Pension Plans
Pension Plans help to secure financial independence even after retirement. Pension
range includes Personal Pension Plan, Unit Linked Pension, Unit Linked
Pension Plus.
Savings Plans
Savings Plans offer a flexible option to build savings for future needs such as buying
a dream home or fulfilling your children’s immediate and future needs.
Savings range includes Endowment Assurance Plan, Unit Linked
Endowment, Unit Linked Endowment Plus, Unit Linked Endowment Plus
II, Money Back,
Unit Linked Enhanced Life Protection II, Children's Plan, Unit Linked
Young Star, Unit Linked Young Star Plus, Unit Linked Young Star Plus
II.
Group Products
One-stop shop for employee-benefit solutions
33

34. HDFC Standard Life has the most comprehensive list of products for progressive
employers who wish to provide the best and most innovative employee benefit solutions
to their employees. It offers different products for different needs of employers ranging
from term insurance plans for pure protection to voluntary plans such as superannuation
and leave encashment.
HDFC SLIC offers the following group products to esteemed corporate clients:
Group Term Insurance
Group Variable Term Insurance
Group Unit-Linked Plan
An investment solution that provides funding vehicle to manage corpuses with
Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave
Encashment schemes of your company
Also suitable for other employee benefit schemes such as salary saving schemes
and wealth management schemes
Social Product
Development Insurance Plan
Development Insurance plan is an insurance plan which provides life cover to members of a
Development Agency for a term of one year. On the death of any member of the group insured
during the year of cover, a lump sum is paid to those member beneficiaries to help meet some
34

35. of the immediate financial needs following their loss.
Eligibility
Members of the development agency and their spouses with:
- Minimum age at the start of the policy 18 years last birthday
- Maximum age at the start of policy 50 years last birthday
Employees of the Development Agency are not eligible to join the group. The group to be
covered is only eligible if it contains more than 500 members.
Premium Payments
The premium to be paid will be quoted per member in the group and will be the same for all
members of the group.
The premium can only be paid by the Development Agency as a single lump sum that
includes all premiums for the group to be covered. Cover will not start until the premium and
all the member information in our specified format has been received.
Benefits
On the death of each member covered by the policy during the year of cover a lump sum
equal to the sum assured will be paid to their beneficiaries or legal heirs. Where the death is
as a result of an accident, an additional lump sum will be paid equal to half the sum assured.
There are no benefits paid at the end of the year of cover and there is no surrender value
available at any time.
The role of the Development Agency
35

36. Due to the nature of the groups covered, HDFC Standard Life will be passing certain
administrative tasks onto the Development Agency. By passing on these tasks the premium
charged can be lower. These tasks would include:
Submission of member data in a specified computer format
Collection of premiums from group members
Recording changes in the details of group members
Disbursement of claim payments and the mortality rebate (if any) to group members
These tasks would be in addition to the usual duties of a policyholder such as:
Payment of premiums
Reporting of claims
Keeping policy holder information up to date
Training and support will be available to give guidance on how to complete the tasks
appropriately. Since these additional tasks will impose a burden on the Development Agency,
the Development Agency may charge a Rs. 10 administration fee to their members.
Prohibition of rebates
Section 41 of the Insurance Act, 1938 states
No person shall allow or offer to allow, either directly or indirectly, as an inducement to any
person to take out or renew or continue an insurance in respect of any kind of risk relating
to lives or property in India, any rebate of the whole or part of the commission payable or
any rebate of the premium shown on the policy, nor shall any person taking out or renewing
or continuing a policy accept any rebate, except such rebate as may be allowed in
accordance with the published prospectus or tables of the insurer
36

37. If any person fails to comply with sub regulation (previous point) above, he shall be liable to
payment of a fine which may extend to rupees five hundred
INTROUCTION TO UNIT LINKED FUNDS
Unit linked plans are based on the component of the premium or the contribution of the
customer towards the plan. This contribution can be in different modes like yearly, half
yearly, quarterly and monthly. Unit linked plans have multiple benefits like life protection,
rider protection, savings, transparency, investment choices, liquidity and planning for taxes.
These plans work like mutual funds.
The premium is collected from the policy holder. He is allotted a certain number of units
based of his contribution. The Net Asset Value is the value of each unit of the fund. It is
found by subtracting the charges and current liabilities from the current assets and
investments and dividing this number by the total number of outstanding units.
Let us take an example. There are 100 investors and each invests Rs. 10 in a fund. The
total value of the fund is Rs. 1000 and each person is allotted 1 unit of Rs 10. Now the
money (Rs. 1000) is invested in the debt or equity market. Suppose the fund value
increased by 20%. As a result the Rs. 1000 invested became Rs. 1200. Hence the value of
every investor is now Rs. 12 and not Rs. 10.
UNIT LINKED VERSUS OTHER FINANCIAL INSTRUMENTS
37

38. Parameters RBI Bonds Fixed Deposits Mutual Funds Unit linked
Safety High High Medium High
Liquidity None High High High
Returns Low Low High High
Life Cover 1 time amount 1 time amount 1 time amount 10 times
Tax benefits Tax free Taxed Taxed Tax free
We find that life insurance unit linked plans is a good area to invest money in as it provides
liquidity, safety, high returns, life cover and tax benefits in a single plan. HDFC SLIC offers
the option of indexation to beat inflation. Risk is reduced to a large extent as the company
invests in a diversified portfolio of stocks.
Tax Benefits
INCOME TAX
SECTION
GROSS
ANNUAL
SALARY
HOW MUCH
TAX CAN YOU
SAVE?
HDFC STANDARD
LIFE PLANS
38

39. Sec. 80C Across All income
Slabs
Upto Rs. 33,990
saved on
investment of
Rs. 1,00,000.
All the life insurance
plans.
Sec. 80 CCC Across all income
slabs.
Upto Rs. 33,990
saved on
Investment of
Rs.1,00,000.
All the pension plans.
Sec. 80 D Across all income
slabs
Upto Rs. 3,399
saved on
Investment of
Rs. 10,000.
All the health insurance
riders available with the
conventional plans.
TOTAL SAVINGS
POSSIBLE
Rs37,389
Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399
under Sec. 80 D, calculated for a male with gross annual income
exceeding Rs. 10,00,000.
39
Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-
free, subject to the conditions laid down therein.

40. CHAPTER IV
COMPANY PROFILE
OF
40

41. TATA AIG LIFE
INSURANCE
COMPANY LTD.
41

42. TATA AIG LIFE INSURANCE COMPANY LIMITED
Introduction
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company,
formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life
combines the Tata Group’s pre-eminent leadership position in India and AIG’s global
presence as the world’s leading international insurance and financial services
organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG
holding the balance 26 percent. Tata AIG Life provides insurance solutions to
individuals and corporate. Tata AIG Life Insurance Company was licensed to operate in
India on February 12, 2001 and started operations on April 1, 2001.
THE TATA GROUP
The Tata Group is one of India's largest and most respected business conglomerates,
with revenues in 2004-05 of $17.8 billion (Rs. 799,118 million), the equivalent of about
2.8 per cent of the country's GDP. Tata companies together employ some 215,000
people. The Group's 32 publicly listed enterprises - among them standout names such
as Tata Steel, Tata Consultancy Services, Tata Motors and Tata Tea - have a
combined market capitalization that is the highest among Indian business houses in the
private sector, and a shareholder base of over 2 million. The Tata Group has operations
in more than 40 countries across six continents, and its companies export products and
services to 140 nations.
42

43. AIG
American International Group, Inc. (AIG), world leaders in insurance and financial
services, is the leading international insurance organization with operations in more
than 130 countries and jurisdictions. AIG companies serve commercial, institutional and
individual customers through the most extensive worldwide property-casualty and life
insurance networks of any insurer. In addition, AIG companies are leading providers of
retirement services, financial services and asset management around the world. AIG's
common stock is listed on the New York Stock Exchange as well as the stock
exchanges in London, Paris, Switzerland and Tokyo.
Tata AIG has strong brand name and recall factor which most of its competitors lack in.
Other than the public behemoth Life Insurance Corporation (LIC) of India which has a
major hold in the market share (of approximately 79%), the private players too are
having more and more opportunities to tighten their hold of the market. Of the private
players, ICICI Prudential comes first with an almost 4.50% of the market share followed
by Tata AIG with about 2.10% of the pie. The private players have everything to work
for, especially with LIC not meeting the needs of its clientele with respect to the services
they need. This provides a prospect for the private sector players to increase their share
of the market. Companies with a familiarity such as Tata AIG can especially achieve
their targets due to the brand image that the Tata group has.
(Source: www.tata-aig-life.com)
43

44. A recent survey conducted by the Voluntary Organization in Interest of Consumer
Education (VOICE) revealed Tata AIG Life Insurance Company (Tata AIG Life) as the
clear winner in terms of customer satisfaction in the life insurance
category. This is India's first-ever customer satisfaction study for the insurance sector.
The survey also revealed that Tata AIG Life had a high recall as a reputed brand name.
The ability to provide innovative and customer-focused service such as allowing the
maximum grace period for premium payment has not only further distinguished Tata
AIG Life from other life insurance companies but also appealed to consumers.
PRODUCTS & SERVICES:
Corporate life insurance products:
44

45. • Employee Benefits
• Credit Life
• Group Pensions
• Workplace Solutions
Individual life insurance products:
• Health First
• Health Protector
• Mahalife
• InvestAssure II, InvestAssure Gold
• Shubh life, Nirbhay life
With respect to individual life insurance products, Tata AIG has an array of policies to
suit the needs and requirements of all age groups viz, children, students, adults,
retirees etc.
The ‘SUPPORT’ arm of Tata AIG Life is constituted of Operations, Human Resources,
Marketing, Corporate Training, Finance and Compliance.
Tata AIG Life possesses the philosophy and drive to customize retirement obligations
(for the company) which occur in the form of cash outflows, for the maximum benefit of
both the employer and the departing employee.
45

46. CHAPTER V
POINTS OF PARITY
AND
46

47. POINTS OF
DIFFERENCE
BETWEEN
HDFC SLIC AND TATA
AIG
47

48. Points of Parity
Funds available with ULIP Plans
General Description Nature of Investments Risk Category
Equity Funds
Primarily invested in company
stocks with the general aim of capital
appreciation
High
Income, Fixed Interest
and Bond Funds
Invested in corporate bonds,
government securities and other fixed
income instruments
Medium
Cash Funds
Sometimes known as Money
Market Funds — invested in cash, bank
deposits and money market instruments
Low
Balanced Funds
Combining equity investment
with fixed interest instruments
Medium
Generally all life insurance companies have three types of fund which are Equity fund,
Debt fund and Balance fund. These fund have different risk profile. Equity fund has high
risk but it gives high return, Debt fund has low risk so it gives low return and Balanced
fund is combination of both Equity and Debt fund so risk is medium and return is also
low.
Both HDFC SLIC and Tata AIG LIC have 7 types of funds based on combination of
Debt–Equity fund. These are liquid fund, stable managed fund, secure
managed fund, defensive managed fund, balanced managed fund, equity
managed fund, growth fund.
48

49. Indexation
You have the option to increase your regular premiums by an indexation rate at any
policy anniversary to protect the real value of your investment against inflation. The rate
of indexation will be in line with the increase in the Whole Sale Price Index (or in the
event that this Index ceases to be published such other index as the Company may
select for this purpose). The base sum assured and sum assured of any attached rider
would also be increased by the corresponding indexation increase.
Charges, Fees and Deductions in ULIP
• Premium Allocation Charge
This is a premium-based charge. After deducting this charge from premiums, the
remainder is invested to buy units. The Allocation charges are guaranteed for the entire
duration of policy term.
• Mortality Charge
The Mortality Charge will apply on the Sum at Risk (SAR = Sum Assured less the Fund
Value pertaining to regular premiums). It will be deducted by monthly cancellation of
units from the accumulation unit account. The Mortality Charge shall remain guaranteed
throughout the policy term.
• Fund Management Charge
49

50. 1% p.a. on With Profits Fund, 1% p.a. on Debt Fund, 1.25% p.a. on Balanced Fund and
1.50% p.a. on Growth Fund. FMC will be applied on the fund while calculating NAV on a
daily basis. The maximum FMC on any fund is 2% p.a. subject to prior approval by the
IRDA.
• Policy Administration Charge
Rs. 60 per month, which will increase by 5% p.a. on the 1st of January each year. PAC
will be deducted monthly by cancellation of units from the accumulation unit account. If
premiums are discontinued, this charge would reduce to 60% of the charge applicable
for the premium paying policies
• Surrender Charge
This is the charge that applies when the policy is surrendered. It is equal to 50% of the
difference between regular premiums expected and those paid in the first year of the
contract.
• Service Tax Deductions
12.36% service tax is applicable on the first premium of life insurance policy.
50

51. Tax Benefits
Tax benefits will be as per Section 80C & Section 10(10D) of the Income Tax Act, 1961.
Insurance is tax free up to Rs. 100000 per annum and the returns on investment on
maturity of the policy are also tax free.
Riders and Bonuses
HDFC Standard Life
Insurance
Tata AIG Life
Insurance
Free Look Period 15 days 15 days
Reversionary Bonus
Based on company's
performance
Based on company's
performance
Terminal Bonus
Based on company's
performance
Based on company's
performance
TOP UP Minimum Rs. 5000 Minimum Rs. 5000
Riders
Critical Illness (CI)
Benefit
Gives on diagnosis of
anyone
of 6 critical illness
Gives on diagnosis of
anyone
of 12 critical illness
Additional Term Benefit
(ATB)
Provides Provides
Accidental Death Benefit
(ADB)
Provides Provides
Double Benefit Provides Does not provide
Triple Benefit Provides Does not provide
Payer Benefit Rider
(PBR)
Does not provide Provides
51

52. Waiver of Premium
(WOP) Benefit
Provides Provides
Points of Difference
HDFC Standard Life
Insurance
Tata AIG Life
Insurance
Grace Period 15 days 31 days
Policy Administration
Charge
Rs. 60 per month Rs. 55 per month
Guaranteed Bonus Does not give
10% on sum-assured
after 10 year
Loyalty Bonus 0.1% every year
0.25% after every 4
th
year
Fund Switching Charge
Total 24 free switches in a
policy
after this Rs. 100 per
Switch
4 free switches per year
after this
Rs. 250 per switch
Guaranteed Surrender
value
50% of all premium
paid excluding 1
st
premium
30% of all premium
paid excluding 1
st
premium
Fund Management
Charge
0.80% per annum
on the fund value
1.75% per annum
on the fund value
Premium Redirection
Charge
Total 12 free Premium
Redirection
in a policy after this Rs.
250 per Premium
Redirection
First 2 Premium
Redirection in a
year is free after this
Rs. 1000
per Premium
52

53. Redirection
Last Year Return 42.70% 72%
We see that both the life insurance companies’ products are almost same. They
have same charges, fees and deductions. There is slightly difference in charges
and maximum limits of all charges are fixed by IRDA. Before buying any life
insurance policy one should check charges and fees on policy and company’s
overall performance and return given to its consumer.
53

54. CHAPTER VI
COMPETITIVE
ANALYSIS
54

55. COMPETITIVE ANALYSIS
LIFE INSURANCE CORPORATION OF INDIA (LIC)
LIC has an excellent money back policy which provides for periodic payments of partial
survival benefits as long as the policy holder is alive. 20% of the sum assured is
payable after 5, 10, 15 and 20 years and the balance 40% is payable at the 20
th
year
along with accrued bonus. (www.lic.com)
55

56. For a 25 years term , 15% of the sum assured becomes payable after 5,10,15 and 20
years and the balance 40% plus the accrued bonus becomes payable at the 25
th
year.
An important feature of these types of policies is that in the event of the death of the
policy holder at any time within the policy term the death claim comprises of full sum
assured without deducting any of the survival benefit amounts which have already been
paid. The bonus is also calculated on the full sum assured.
HDFC SLIC does not have a money back policy. It could offer a money back plan and
capture some portion of this market. While marketing insurance products I found that
many customers wanted to purchase these plans.
LIC offers 66 different plans; plans are formulated for specific occasions – whole life
plans, term assurance plans, money back plan for women, child plans, plans for the
handicapped individuals, endowment assurance plans, plans for high worth individuals,
pension plans, unit linked plans, special plans, social security schemes – diversified
portfolio of products. HDFC SLIC could diversify its product portfolio. It could add more
plans for high worth individuals and women.
ICICI PRUDENTIAL
ICICI Prudential is a stiff competitor for HDFC SLIC. The company is a merger between
ICICI Bank which is the biggest private bank in India and Prudential Plc which is a
global life insurance company.
56

57. The company has an investment plan which is market related – Invest Shield Life. In
this plan even if the market falls, the premium will be returned to investors. It is a
guaranteed plan which ensures the company carefully invests your money. The stock
market performance of ICICI Prudential is much better than HDFC SLIC. The returns on
the growth fund were 46.28% compared to the 42.70% offered by HDFC SLIC.
Customers are attracted by higher returns and this is a plus point for Prudential.
The company is very well advertised. The advertisements are showcased in movies,
television, newspapers, magazines, bill boards, radio etc. The company has an
excellent brand ambassador – Mr. Amitabh Bacchan. His promotion of the company
builds trust and faith in the minds of our people.
However the charges are very high in the plans offered by ICICI Prudential. It is 35%
during the first year, 15% in the next year and 3% from the third year onwards. Also a
higher minimum premium of Rs. 8000 is charged. Hence the policies are not accessible
to the lower strata of the society. (Source: www.iciciprulife.com)
BIRLA SUN LIFE
57

58. Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla
Group, one of the largest business houses in India and Sun Life Financial Inc., a
leading international financial services organization. The local knowledge of the Aditya
Birla Group combined with the expertise of Sun Life Financial Inc., offers a formidable
protection for your future. (Source: www.birlasunlife.com)
The Aditya Birla Group has a turnover close to Rs. 33000 crores with a market
capitalization of Rs. 53400 crores (as on 31st March 2007). It has over 72000
employees across all its units worldwide. It is led by its Chairman - Mr. Kumar
Mangalam Birla. Some of the key organizations within the group are Hindalco and
Grasim.
Sun Life Financial Inc. and its partners today have operations in key markets worldwide,
including Canada, the United States, the United Kingdom, Hong Kong, the Philippines,
Japan, Indonesia, India, China and Bermuda. It had assets under management of over
US$343 billion, as on 31st March 2007. The company is a leading player in the life
insurance market in Canada.
Being a customer centric company, BSLI has invested heavily in technology to build
world class processing capabilities. BSLI has covered more than a million lives since
inception and its customer base is spread across more than 1000 towns and cities in
India. All this has assisted the company in cementing its place amongst the leaders in
58

59. the industry in terms of new business premium income. The company has a capital
base of 520 crores as on 31
st
July, 2007.
Its Flexi Life Line Plan offers life long insurance cover till the policy holder is 100 years
of age. There are guaranteed returns of 3% p.a. net of policy charges after every 5
years from the eleventh policy year onwards. However the charges are very high. The
initial charges for the first year are 65%. Hence the fund value is greatly reduced.
BAJAJ ALLIANZ
Bajaj Allianz is a joint venture between Allianz AG with over 110 years of experience in
over 70 countries and Bajaj Auto, a trusted automobile manufacturer for over 55 years
in the Indian market. Together they are committed to offering you financial solutions that
provide all the security you need for your family and yourself. Bajaj Allianz is the
number one private life insurer for the year 2005 – 2006. It is leading by 78 crores. It
has experienced a whopping growth of 216% in the last financial year.
The company has sold 13, 00,000 policies and is backed by 550 offices across India. It
offers travel insurance, motor insurance, home insurance, health and corporate
insurance. The mortality charges are lower than HDFC SLIC. The entry age could be
zero years which allow even new born babies to be insured. (Source:
www.bajajallianz.com)
59

60. TATA AIG
Tata Aig is a joint venture between the Tata group and American International Group
Inc. In one of the plans the company offers hospital cash benefit wherein it will pay Rs.
2500 per day in case of hospitalization and Rs.12.5 lakhs in case the person suffers
from any critical illness. Annual premium is much less (about Rs. 6712) to avail such a
good benefit. Charges are relatively low compared to HDFC SLIC for some policies.
The company offers high coverage plans at low cost. There is a plan even for a policy
term of 1 year. Your family can continue to enjoy their current lifestyle even in the case
of something happening to you. These plans are very flexible and HDFC SLIC could
adopt this idea of insuring individuals for short periods of time. For example; there is a
family of four. The only earning member is the father.
He has just taken a loan from a bank of 20 lakhs to purchase a new home. He is able to
repay the loan with his current salary in 15 years. The problem arises if something were
to happen to him within these fifteen years. Not only will the family face the emotional
and financial loss of their father but they will also have to repay the home loan or risk
being homeless. (Source: www.tataaig.com)
60

61. 61

62. CHAPTER VII
MARKETING
PROBLEMS
62

63. MARKETING PROBLEMS
The old and out dated technique of tele marketing is used to prospect customers. More
modern techniques must be adopted. The company must sponsor shows and give
presentations in corporate houses. The financial health check must be performed for
every prospect to assess his/her true financial position and needs. Some of the advisors
skip this vital step and the prospect ends up with a plan they do not appreciate and
soon surrender or discontinue.
Some of the main problems in marketing the policies are:
 Large amount of competition (18 players in the market)
63

64.  Other brands are well advertised and have higher recall value
 LIC is considered a safer option
 Face competition from banks and mutual funds
 High premium policies are difficult to market
 Incorrect perception about insurance
 Interested prospects might have a lack of time and postpone investments
 Customers get defensive if you cold call
 Short term plans are available only at large premium
 Customers do not have risk appetite to invest in shares
 Some prospects have already invested and are not interested in further
investments
 Consumers don’t want to undertake medical examinations
 Large amount of documentation
 Customers do not like their money locked up for many years
 Lack of awareness about the unit linked funds in the market
 No money back plan present in the product portfolio
64

65. SUGGESTIONS FOR IMPROVEMENT
 Advertise about the company and its products – it motivates individuals to
purchase insurance
 Create a positive perception about insurance
 Speak about the good features a plan offers like high returns, life cover, tax
benefits, indexation, accident cover while prospecting customers
 Try to sell the product/plan which the consumer requires and not the plan where
the advisors benefit is higher
 Improve the efficiency in operations
 Bring out policies with small premiums payable for short periods of time – Rs.
5000 – Rs. 10000 per annum for 10 years
 Attract the youth of India with higher returns on investment as returns are the
motivating factor which influence purchase of insurance
 Promote insurance in colleges and corporate houses
 Promote HDFC SLIC as an Indian Company to build trust
 HDFC SLIC could have a brand ambassador or a mascot to promote its services
 Should have partial withdrawals from the first year onwards
65

66.  Tap the rural market where there is large potential
 Diversify product portfolio
 Make products more straight forward – reduce complexities
CHAPTER VIII
ANALYSIS
66

67. &
INTERPRETATION
ANALYSIS & INTERPRETATION
“A SURVEY ON THE LIFE INSURANCE INDUSTRY IN INDIA”
67

68. AGE GROUP OF SURVEYED RESPONDENTS
TABLE 1:
Age group No. of Respondents
18 - 25 years 127
26 - 35 years 67
36 - 49 years 46
50 - 60 years 24
More than 60 years 6
CHART 1:
Analysis:
68

69. From the chart above we find that 47% of the respondents fall in the age group of 18 –
25 years, 25% fall in the age group of 26 – 35 years and 17% fall in the age group of 36
– 49 years.
Therefore most of the respondents are relatively young (below 26 years of age). These
individuals could be induced to purchase insurance plans on the basis of its tax saving
nature and as an investment opportunity with high returns.
Individuals at this age are trying to buy a house or a car. Insurance could help them with
this and this fact has to be conveyed to the consumer. As of now many consumers have
a false perception that insurance is only meant for people above the age of 50. Contrary
to popular belief the younger you are the more insurance you need as your loss will
mean a great financial loss to your family, spouse and children (in case the individual is
married) who are financially dependent on you.
GENDER CLASSIFICATION OF SURVEYED RESPONDENTS
TABLE 2:
Particulars No. of Respondents
Male 193
Female 77
CHART 2:
69

70. CUSTOMER PROFILE OF SURVEYED RESPONDENTS
TABLE 3:
Customer profile No. of respondents
Student 62
Housewife 5
Working Professional 116
Business 49
Self Employed 24
Government service employee 14
CHART 3:
70

71. Analysis:
From the chart above it can clearly be seen that 43% of the respondents are working
professionals, 23% are students and 18% are into business. Therefore the target
market would be working individuals in the age group of 18 – 25 years having surplus
income, interested in good returns on their investment and saving income tax.
NO. OF RESPONDENTS WHO HAVE LIFE INSURANCE POLICY IN THEIR
NAME
TABLE 4:
Person who have life insurance policy
Yes 103
71

72. No 167
CHART 4:
ANALYSIS:
This graph shows that out of total 270 respondents only 103 or 38% respondents have
life insurance policy in their name. Rest all don’t have a single policy in their name. So
there is a very big scope for life insurance companies to cover these people. So in
future business of life insurace will gro further.
MARKET SHARE OF LIFE INSURANCE COMPANIES
TABLE 5:
LIFE INSURER NUMBER OF POLICIES
HDFC STANDARD LIFE 4
BIRLA SUN LIFE 3
AVIVA LIFE INSURANCE 6
BAJAJ ALLIANZ 7
LIC 55
TATA AIG 6
ICICI PRUDENTIAL 12
ING VYSYA 6
BHARTI AXA 2
72

73. OTHERS 2
CHART 5:
Analysis:
In India, the largest life insurance company is Life Insurance Corporation of India. It has
been in existence in India since 1956 and is completely owned by the Government of
73

74. India. Today the organization has grown to 2048 offices serving 18 crore policies and
has a corpus of over 340000 crore INR.
74

75. ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE
TABLE 6:
Premium paid (p.a.) No. of respondents
Rs. 5000 - Rs. 10000 40
Rs. 10001 - Rs. 15000 26
Rs. 15001 - Rs. 24900 18
Rs. 25000 - Rs. 50000 10
Rs. 50001 - Rs. 60000 4
Rs.60001 - Rs. 80000 2
Rs. 80001 - Rs. 100000 3
CHART 6:
ANNUAL PREMIUM PAID BY INDIVIDUALS FOR LIFE INSURANCE
75

76. Analysis:
From the chart above we find that, 39% of the respondents surveyed pay an annual
premium less than Rs. 10001 towards life insurance. 25% of the respondents pay an
annual premium less than Rs. 15001 and 17% pay an annual premium less than Rs.
25000. Hence we can safely say that HDFC SLIC would be able to capture the market
better if it introduced products/plans where the minimum premium starts at Rs. 5000 per
annum.
Only 19% of the respondents pay more than Rs. 25000 as premium and most products
sold by HDFC SLIC have Rs.12000 as the minimum annual premium amount. They
should introduce more products like Easy Life Plus and Safe Guard where the minimum
premium is Rs.6000 p.a. and Rs. 12000 p.a. respectively. This would definitely increase
their market share as more individuals would be able to afford the policies/plans offered.
76

77. POPULAR LIFE INSURANCE PLANS
TABLE 7:
Type of Plan No. of Respondents
Term Insurance Plans 105
Endowment Plans 122
Pension Plans 16
Child Plans 8
Tax Saving Plans 19
77

78. CHART 7:
POPULAR LIFE INSURANCE PLANS
Analysis:
From the chart given above we can clearly see that 45% of the respondents hold
endowment plans and 39% of the respondents hold term insurance plans. Endowment
plans are very popular and serve two purposes – life cover and savings.
If the policy holder dies during the policy term the nominee gets the death benefit that
is, sum assured and accumulated bonus. On survival the policy holder receives the
survival benefit with a bonus.
A term plan is a pure risk cover plan wherein the insured pays a lower premium for a
higher sum assured. Term insurance is the cheapest form of insurance and helps the
policy holder insure himself for a relatively low premium. For the returns sensitive
78

79. investor term plans do not find favor as they do not offer a return in case the individual
does not die during the policy term.
AWARENESS OF UNIT LINKED INSURANCE PLANS
TABLE 8:
Awareness of Unit Linked Plans No. of Respondents
Yes 154
No 116
CHART 8:
AWARENESS OF UNIT LINKED INSURANCE PLANS
79

80. Analysis:
From the chart given above we find that 57% of the respondents are aware of unit
linked life insurance plans and 43% are not aware of such plans. These plans should be
promoted through advertising. The company can advertise through television, radio,
newspapers, bill boards and pamphlets. This would increase awareness and arouse
curiosity in the minds of the consumer which would enable the company to market its
products more effectively.
Unit – linked plans are those where the benefits are expressed in terms of number of
units and unit price. They can be viewed as a combination of insurance and mutual
funds. The number of units a customer would get would depend on the unit price when
they pay the premium.
When the policy matures the individual gets his fund value. The value of his fund is
calculated by multiplying the net asset value and number of units held by them on that
day.
CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM
TABLE 9:
80

81. Willingness to spend on premium No. of respondents Percentage
Less than Rs. 6,000 41 15%
Rs. 6,001 - Rs. 10,000 73 27%
Rs. 10,001 - Rs. 25,000 110 41%
Rs. 25,001 - Rs. 50,000 41 15%
Rs. 50,001 - Rs. 1,00,000 5 2%
CHART 9:
CONSUMER WILLINGNESS TO SPEND ON LIFE INSURANCE PREMIUM
Analysis:
From the graph above, we can clearly see that 41% of the respondents would be willing
to spend between Rs. 10001 – Rs. 25000 for life insurance. 27 % would be willing to
81

82. spend between Rs. 6001 – Rs. 10000 per annum. Only 15% would be willing to spend
more than Rs. 25000 per annum as life insurance premium.
We could say that the maximum premium payable by most consumers is less than Rs.
25000 p.a. This is further reduced as most customers have already invested with LIC,
ICICI Prudential, Birla Sun Life, Bajaj Allianz etc.
HDFC SLIC is faced with a large amount of competition. There are 18 insurance
companies in India inclusive of LIC. Hence to capture a larger part of the market the
company could introduce more reasonable plans with lesser premium payable per
annum.
CHART SHOWING IDEAL POLICY TERM
TABLE 10:
Ideal policy term No. of respondents
3 - 5 years 51
6 - 9 years 41
10 - 15 years 95
16 - 20 years 38
21 - 25 years 24
26 - 30 years 5
More than 30 years 3
Whole life Policy 13
82

83. CHART 10:
CHART SHOWING IDEAL POLICY TERM
Analysis:
From the chart given above it can be seen that 35% of the respondents prefer a policy
term of 10 – 15 years, 19% prefer a term of 3 – 5 years and 15% prefer a term of 6 – 9
years. This means that HDFC SLIC could introduce more plans wherein the premium
paying term is less than 15 years.
83

84. The outlook of insurance as a product should be changed from something which you
pay for your whole life (whole life policy) and do not receive any benefit (the nominee
only receives the benefit in case of your death) to an extremely useful investment
opportunity with the prospects of good returns on savings, tax saving opportunities as
well as providing for every milestone in your life like marriage, education, children and
retirement.
FACTORS THAT MOTIVATE RESPONDENTS TO PURCHASE
INSURANCE
TABLE 11:
Parameter No. of Respondents
Advertisements 35
High returns 84
Advice from friends 46
Family responsibilities 89
Others 16
CHART 11:
84

85. Analysis:
From the chart above it can be seen that 33% of the respondents purchase life
insurance to secure their families, 33% take life insurance to get high returns, 17%
purchase insurance on the advice of their friends and 13% purchase insurance because
of the influence of advertisements.
The main purpose of insurance is to cover the financial or economic loss that occurs to
the family in case of the uncertain death of the policy holder. But now a days this trend
is changing. Along with protection (life cover), a savings element is being added to
insurance.
With the introduction of the new unit linked plans in the market, policy holders get the
option to choose where their money will be invested. They can invest their money in the
equity market, debt market, money market or a combination of these. The debt and
85

86. money markets usually have low risk attached whereas the equity market is a high risk
investment option.
PREFERRED COMPANY TYPE OF THE RESPONDENTS
TABLE 12:
Type of Company No. of Respondents Percentage
Government Owned Company 127 47%
Public Limited Company 62 23%
Private Company 49 18%
Foreign Company 32 12%
CHART 12:
PREFERRED COMPANY TYPE OF THE RESPONDENTS
86

87. Analysis:
From the graph above we find that 60% of the respondents preferred to purchase
insurance from a government owned company, 29% of the respondents preferred to
purchase insurance from a public limited company and only 4% of the respondents
preferred a foreign based company. Heavy advertising through television, newspapers,
magazines and radio is required.
MINIMUM EXPECTED RETURN ON INVESTMENT
TABLE 13:
Expected Returns No. of respondents
Less than 5% 5
5% - 10% 39
11% - 15% 46
16% - 20% 49
21% - 25% 46
26% - 30% 27
31% - 40% 22
41% - 50% 14
More than 50% 22
CHART 13:
87

88. Analysis:
From the chart above it can clearly been seen that 18% of the respondents would like
16 – 20% returns, 17% would like returns between 21 – 25% and 17% would like
returns of 11 – 15% on their investments. Therefore the average return on investment
should be at least 16 – 20 %.
Most consumers are willing to adapt to some amount of risk but still want some
guaranteed returns. Therefore the bulk of investment should be made in the balanced
fund with 50% debt and 50% equity. The returns on the Secure Fund are guaranteed as
these involve investment is government securities and the debt market. But the returns
on these instruments are low (8 – 10%). If the company invests in shares, returns are
higher (39%) but correspondingly risk borne by the policy holder is also higher.
Therefore a good combination of the two instruments is often a wise choice.
88

89. 89

90. CHAPTER IX
FUTURE LINE OF
RESEARCH
90

91. 91

92. FUTURE LINE OF RESEARCH
The future topics for research in the organization could be setting up of an appropriate
ad campaign. It is very vital to the companies’ success that the people of India know
about HDFC SLIC, its products and their special features and how insurance in general
can help them in their future. The advertisements have to be emotionally appealing.
They might also include a celebrity. The brand name of HDFC could be used to give a
push to HDFC SLIC and its products. The general perception of insurance as
“inauspicious” should be done away with and individuals and corporations accept
insurance on power with other investment opportunities.
The other area of research could be in the management of funds HDFC SLIC
possesses and how it can maximize returns for its investors. A research project could
be undertaken on how to ensure that the money gets invested in the right companies
and earns a medium – high return on investment. Another area of research could be an
analysis of the sales and marketing techniques used by HDFC SLIC. A large number of
changes could be introduced and this would help in saving operating costs and
improving the efficiency of the firm.
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93. 93

94. CHAPTER X
CONCLUSION
94

95. CONCLUSION
HDFC standard life insurance is first life insurance company in India. It has businesses
spread out across the globe. It was registered on 23
rd
December 2000. It currently ranks
number 4 amongst the insurers in India (Source: annual premium provided by the
company)
The company faces a large amount of competition. To sustain itself it must promote its
products through advertising and improve its selling techniques. Consumers must be
aware of the new plans available at HDFC SLIC. The medium of advertising used could
be television since most of its competitors use this tool to promote their products. The
company must be promoted as an Indian company since consumers seem to have
more trust in investing in Indian firms.
The unit linked concept must be specifically promoted. The general perception of life
insurance has to change in India before progress is made in this field. People should
not be afraid to invest money in insurance and must use it as an effective tool for tax
planning and long term savings.
HDFC SLIC could tap the rural markets with cheaper products and smaller policy terms.
There are individuals who are willing to pay small amounts as premium but the plans do
not accept premiums below a certain amount. It was usually found that a large number
of males were insured compared to females. Individuals below the age of 30 (mostly
95

96. male) were interested in investment plans. This was a general conclusion drawn during
prospecting clients.
96

97. REFERENCES
www.hdfcslic.com
www.tata-aig-life.com
www.irdaindia.com
www.lic.com
www.money control.com
www.bajajallianz.com
www.icici.prulife.com
Magazine –
Insurance World
The Outlook Money
Secrets of Successful Insurance Sales by Mr. Jack Kinder
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98. 98

99. A SURVEY ON ‘INSURANCE INDUSTRY’
Dear Sir/Madam,
I am a student of Aravali Institute of Management, Jodhpur. As part of the requirements
for my Post Graduation Diploma in Management I am required to do a research based
project. Kindly spend a few minutes of your valuable time and fill in this questionnaire.
Do you have a life insurance policy/investment
plan in your name?
o Yes o No
If yes which company’s insurance policies do you
hold?
o HDFC Standard
Life Insurance
o Birla Sun Life
Insurance
o Aviva Life
Insurance
o Bajaj Allianz Life
Insurance
o LIC
o Tata AIG Life
Insurance
o ICICI Prudential
Life Insurance
o ING Vysya Life
Insurance
o Bharti Axa Life
Insurance
o Others (specify name)
What is the approximate premium paid by you
annually (in Rupees)?
o Rs. 5,000 – Rs.
10,000
o Rs. 10,001 – Rs.
15,000
99

100. o Rs. 15,001 – Rs.
25,000
o Rs. 25,001 – Rs.
50,000
o Rs. 50,001 – Rs.
60,000
o Rs. 60,001 – Rs.
80,000
o Rs. 80,001 – Rs.
1,00,000
o More than Rs. 1,00,000 (specify premium)
What kind of insurance policy would suit you best
in your current stage of life?
o Life Insurance
o Life Insurance and
Investment Plans
o Pension Plans
o Child Plans
o Tax saving plans
Are you aware of the new unit linked insurance
plans in the market?
o Yes o No
How much would you be willing to spend per
annum if you were to go for an
investment/insurance plan?
o Less than Rs.
6,000
o Rs. 6,001 – Rs.
10,000
o Rs. 10,001 – Rs.
25,000
o Rs. 25,001 – Rs.
50,000
o Rs. 50,000 – Rs.
1,00,000
o More than Rs.
1,00,000
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101. Which according to you is an ideal policy term?
(Number of years you would be willing to pay
premium)
o 3 to 5 years
o 6 to 9 years
o 10 to 15 years
o 16 to 20 years
o 21 to 25 years
o 26 to 30 years
o More than 30
years
o Whole life policy
What motivates you to purchase
insurance/investment plans?
o Advertisements
o High Returns
o Advice from
friends
o Family
responsibilities
o Others (specify)
In which kind of company would you prefer to
make a purchase of insurance?
o Government
owned company
o Public Limited
Company
o Private Company
o Foreign based
company
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102. Typically what kind of returns would you look at
from your investments? (Please note: Higher
returns involve greater risk)
o Less than 5%
o 6% - 10 %
o 11% - 15 %
o 16% - 20 %
o 21% - 25%
o 26% - 30%
o 31% - 40%
o 41% - 50%
o More than 50%
Personal Details:
Name:
Address:
Age: Contact No. :
Profile of respondent:
• Student
• Housewife
• Working
Professional
• Business
• Self – Employed
• Government
Service Employee
Date:
102