STUDY ON PERCEPTION OF

INVESTORS INVESTING IN LIFE

INSURANCE IN INDIA
A Project submitted to
University of Mumbai for partial completion of the degree of
Master’s in commerce
Under the Faculty of Commerce
By
KHAN AYESHA SHAKEEL
Under the Guidance of
DR. SANCHITA DATTA
ROYAL COLLEGE OF ARTS SCIENCE AND COMMERCE
Bhakti Vedanta Swami Marg, Srishti Complex, Mira Road East,
Penkar Pada, Mira Bhayandar, Maharashtra 401107

December, 2019-20

1
 ROYAL COLLEGE OF ARTS SCIENCE AND COMMERCE

CERTIFICATE
This is to certify that Miss KHAN AYESHA SHAKEEL has worked
and duly completed her Project Work for the degree of Master’s in
commerce under the Faculty of Commerce in the subject of accountancy
and her project is entitled, “THE STUDY OF PERCEPTION OF
INVESTORS INVESTING IN LIFE INSURANCE IN INDIA” under
my supervision.
I further certify that the entire work has been done by the learner under
my guidance and that no part of it has been submitted previously for any
Degree or Diploma of any University.
It is her own work and facts reported by her personal findings and
investigations.

DR. SANCHITA DATTA

Date of submission:

2
 ROYAL COLLEGE OF ARTS SCIENCE AND COMMERCE

Declaration by learner
I the undersigned Miss KHAN AYESHA SHAKEEL here by, declare
that the work embodied in this project work titled “THE STUDY OF
INVESTORS INVESTING IN LIFE INSURANCE IN INDIA” under my
supervision, forms my own contribution to the research work carried out
under the guidance of DR. SANCHITA DATTA is a result of my own
research work and has not been previously submitted to any other
University for any other Degree or Diploma to this or any other
University. Wherever references have been made to the previous works
of others, it has been clearly indicated as such and included in the
bibliography. I, here by further declare that all the information of this
document has been obtained and presented in accordance with the
academic rules and ethical conduct.

KHAN AYESHA SHAKEEL

Certified by,
DR. SANCHITA DATTA

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 ROYAL COLLEGE OF ARTS SCIENCE AND COMMERCE

ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous,
and the depth is so enormous.
I would like to acknowledge the following as being idealistic channels
and fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me
chance to do this project.
I would like to thank my Principal, DR. VIKAS VAIDYA for providing
the necessary facilities required for completion of this project.
I would also like to express my sincere gratitude towards my project
guide DR. SANCHITA DATTA whose guidance and care made the
project successful.
I would like to thank my College Library, for having provided various
reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
Parents and Peers who supported me throughout my project.

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 INDEX
SR.NO PATICULARS PG.NO
01. INTRODUCTION 07
1.1 Benefits of life insurance 10
1.2 Traditional v/s Unit linked 15
1.3 Types of life insurance 16
1.4 Advantages and disadvantages of life insurance 23
1.5 Profiles of the organization 26
0.2 RESEARCH METHODOLOGY
2.1 Objectives of the study 40
2.2 Statement of the problem 42
2.3 Methodology 43
2.4 Sampling of data 43
2.5 Sources of data collection 44
2.6 Limitations of the study 45
2.7 Hypothesis 46
0.3 LITERATURE REVIEW 47
04. DATA ANALYSIS, INTERPRETATION & 59
PRESENTATION
4.1 Respondent profile
05. CONCLUSION 89
5.1 Hypothesis testing 90
06. ANNEXURE 92
6.1 Questionnaire
07. LIST OF TABLES 94
08. LIST OF GRAPHS 95
09. BIBLIOGRAPHY 96
10. PLAGIARISM REPORT 97

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A STUDY ON PERCEPTION
OF INVESTORS
INVESTING IN LIFE
INSURANCE IN INDIA
CHAPTER ONE:
INTRODUCTION
Everyone is exposed to various risk. Human life is a most important asset and life
insurance is the most important type of insurance which provides financial
protection to a person and his family at the time of uncertain risks or damage. Life
insurance provides both safety and protection to individuals and also encourages
savings among people. LIC of India plays a vital role in the welfare of human well-
being by providing insurance to millions of people against life risks such as
uncertain death or accident. The present exploratory and descriptive based study
was selected with an objective to identify the perception of investors towards Life
Insurance Corporation of India while their investment decision-making. Various
insurance related factors have been discussed in the paper. The data for the study
has been collected from both primary and secondary sources. The study area is
limited only to Mumbai and sample size is 50 policyholders of LIC. Researcher
has been taken based on demographic and insurance based preference factors and
tested them with the help of percentages method. The analyzed data has been
presented in the form of different graphs and pie-charts.

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An investor; an individual who commits money to investment products with the
expectation of financial return. Generally, the primary concern of an investor is to
minimize risk while maximizing return, as opposed to a speculator, who is willing
to accept a higher level of risk in the hopes of collecting higher-than average
profits. Investors behavior is the study of how individuals make decision to spend
their available resources (time, money and efforts) on investment related items. It
helps the marketers to understand what, why, where, when and how an investor
behaves with respect to products and services. Knowing answer to this question let
marketers to design their marketing strategies accordingly.
Perception; A conscious or unconscious state of awareness or understanding of
one's surroundings that exists within the mind and formed through sensory signals
stimulated by current conditions, expectations and past memories. The confluence
of complex sensory inputs often times creates a perception that is unreliable or
unverifiable. In other words, it may not be based in reality.
Investors Perception: Investor Perceptions is a leading provider of authoritative
and considered investor feedback. IP delivers an independent perspective into how
shareholders and the key underweight institutions view a company, its
management and its prospects. We analyze in depth the key factors that
collectively define a company's investment proposition and ultimately determine
the valuation the market places on the shares. An insightful perception study is an
important and powerful management tool, both from a strategic planning and a
corporate governance perspective. Being aware of the opinions and views of
investors assists companies to improve their communication with the market and to
ensure the investment proposition is properly understood and is reflected in the
valuation of the shares, which in turn will influence its cost of capital.
Everyone is exposed to various risks. Future is very uncertain, but there is way to
protect one’s family and make one’s children’s future safe. Life Insurance
companies help us to ensure that our family’s future is not just secure but also
prosperous. This study titled “Study of Consumers Perception about Life Insurance
Policies” enables the Life Insurance Companies to understand how consumer’s
perception differs from person to person. How a consumer selects, organizes and

7
interprets the service quality and the product quality of different Life Insurance
Policies, offered by various Life Insurance Companies.
In any activity of life there is a possibility that a desired event may fail to occur
and that pecuniary (financial) loss may arise. In adventures by sea the ship may fail
to make the port (remember Titanic or the cargo may be damaged or lost). In the
adventure of life itself, the life may fail and death may occur, causing suffering to
dependents. Death comes to all sooner or later, and it is the only truth in this world.
The rest as they say is all maya (illusion). So if death is the only truth, then why do
we ignore the implications of the event? Because of the nature of its permanence,
and all pervasive; death requires understanding the financial implications on the
dependents. Life insurance is therefore the most important of all forms of
insurance. It’s significance pales the other forms of not just insurance but also all
investment instruments. The theory of insurance, in general terms, may be
expressed to mean that the good fortune of the many compensates for the
misfortune of the few. The consequences of such misfortunes cannot be in many
instances borne by the individual, and so the insurance company is prepared to
shoulder the burden of these consequences in exchange for an assessed payment
for the risk undertaken. Those who avail themselves of this service know that such
misfortunes will occur but do not know to whom, and when, and they are willing to
make such contributions to a common fund to buy the right to be compensated of
misfortunes if they should befall them.
The insurance company is concerned with any factor that may affect normal
longevity, and once the contract is entered into, and premiums are regularly paid
by the policyholder, the company is at a risk on a permanent contract which it
cannot break. From the collation of a vast amount of data, an assessment can be
made of the rate of mortality or the likelihood of death occurring at each age.
Numbers can be quoted, but which individuals will die at each age cannot be
stated. Consequently, all who pay life insurance premiums to the common fund do
so with the same willingness that the fund shall be used to compensate the estates
of those contributors at whatever age in life they may die, within their respective
contract period. This is the basic theory of life insurance. However increasing

8
emphasis on investment aspects has tended to overshadow the primary purpose of
protection against premature death.

1.1 Benefits of Life Insurance Policies.

1) Superior to any other savings plan:
Unlike any other savings plan, a life insurance policy affords full protection against
risk of death. In the event of death of a policy holder, the insurance company
makes available the full sum assured to policy holder’s near and dear ones. In
comparison, any other savings plan would amount to only the total savings plan
accumulated till date. If the death occurs prematurely, such savings can be much
less than the sum assured which means that the potential financial loss to the
family is sizable.
2) Encourages and Forces Thrifts:
A saving deposit can easily be withdrawn. The payment of life insurance premium,
however, is considered sacrosanct and is viewed with the same seriousness as the
payment of interest on a mortgage. Thus, a life insurance policy in effect brings
about compulsory savings.
3) Easy settlement and protection against creditors:
A life insurance policy is the only financial instrument the proceeds of which can
be protected against the claims of a creditor of the assured by effecting a valid
assignment of the policy.
4) Administering the Legacy for Beneficiaries:
Speculative or unwise expenses can quickly cause the proceeds to be squandered.
Several policies have foreseen this possibility and provide for payment over a
period of years or in a combination of installments and lump sum amounts.
5) Ready Marketability and suitability for quick borrowing:
A life insurance policy can, after a certain time period (generally three years) be
surrendered for a cash value. The policy is also acceptable as a security for a
commercial loan, for example, a student loan.

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6) Disability Benefits:
Death is not the only hazard that is insured; many policies also include disability
benefits. Typically, these provide for waiver of future premiums and payment of
monthly installments spread over a certain time period.
7) Accidental death Benefits:
Many policies can also provide for an extra sum to be paid (typically equal to the
sum assured) if death occurs as a result of accident
8) Protection for your Loved Ones:
The biggest and most obvious benefit to owning life insurance is being able to
provide to your family, even after you are gone. Life insurance benefits are tax-free
to your beneficiaries. You will want to make sure that the death benefit you select
is large enough to cover your family’s living expenses after your gone, such as:
Mortgage, Income Replacement for at least 10 years, College Tuition for Children,
Medical or Credit Card Debt. Depending on your age and health you should be
able to cover all of this for about what it costs to buy 6 lattes a month. Life
insurance is the cheapest way to make sure your loved ones don’t suffer financially
if you die, especially if you are the sole income provider.
9) Peace of Mind:
We understand that with term life insurance, nobody likes idea of paying all of
those years and when you don’t die, you lose everything that you ever paid in. But
remember, you were protecting your loved ones in the event of a tragedy, so those
premiums were had an important purpose. Life insurance gives you peace of mind
knowing that your loved ones will be taken care of for a long time after you are
gone. Can you really put a price on knowing that they will continue to enjoy the
same lifestyle if a death occurs? We don’t believe so!!
10) Life Insurance Fits Any Budget:
Depending how old you are, your health, and how much coverage you need, life
insurance fits into most consumer’s budgets. Whether you need to protect your
income, pay for burial expenses, or to leave a legacy, there is life insurance that

10
will protect those needs without breaking the bank. Term life insurance is a great
inexpensive life insurance product. It’s designed to protect you for a certain period
of time and provides no cash value, which is the reason for its fairly low premium
costs. The key to finding cheap life insurance is to buy when you are young and
healthy. The younger and healthier you are, the cheaper the premium you will pay.
This could save you hundreds, if not thousands, over the life of a term insurance
policy.

 Drawbacks of Buying Life Insurance:

As we mentioned earlier, life insurance has many benefits and very few
drawbacks. I would like to be transparent and give our readers all the information.
The drawbacks to owning life insurance are:
1.If old or unhealthy, life insurance can be expensive.
2.Whole life insurance is expensive at all ages.
3.The investments in the cash value of permanent life insurance can be weak.
4.Easy to mislead, or worse lied to, if you don’t work with a reputable life
insurance agent.
How to maximize your Benefits of Life Insurance
 Buy when your young and healthy.
We understand when you are young and healthy that you think you are invincible
and you may be right now. But at some point that will change and if you wait, it
could be disastrous. If you buy your life insurance when you are young and
healthy, then you will save hundreds, if not thousands, of dollars for not
procrastinating. Not only will you save money, but you will secure valuable
coverage that even if not needed now, more than likely, it will be needed in the
future.

 Be Honest on the Life Insurance Application

All life insurance policies come with a contestability period of two years from
when the policy goes into effect. During this time the life insurance company can

11
contest a claim, which means not pay, if they believe you misrepresented any
answers on the application and can prove these misrepresentations.
Misrepresentations can include the following:
1.Not being truthful about health problems.
2.Failing to mention a high risk hobby or job.
3.Not being truthful about extra-curricular activities such as drug and alcohol
consumption or tobacco use.

 Buy the Amount of Term Life Insurance Needed and Invest the Rest.
While permanent life insurance fits some people, most consumers will see the
benefits of life insurance more from buying term and investing the rest. The
biggest reason term life is so popular is the cost of premiums. You can get a lot of
death benefit with term life insurance for very little premium.
With a term life insurance policy and proper planning, you can protect your loved
ones throughout your income producing years, while making contributions to your
retirement accounts at the same time. This makes you financially secure whether
you live or die.

 Find an Experienced & Reputable Life Insurance Agent.

The key to making sure your life insurance policy benefits you the most is to first
and foremost, find an experienced life insurance agent with a good reputation. A
good agent will be able to explain all of your options and should have access to the
top life insurance companies in the United States. A simple online search should
tell you all you need to know about someone or company.
When you buy life insurance, you enter into a contract with an insurance company
that promises to provide your beneficiaries with a certain amount of money upon
your death. In return, you make periodic payments, called premiums. The premium
amount is based on factors such as your age, gender, medical history, and the
dollar amount of life insurance you purchase. In the event of your passing, life
insurance provides money directly to your beneficiaries. They can use the money
for:

12
a. Making up for your lost income
b. Funding a child’s education
c. Paying off household debt
d. Paying for your funeral and other related expenses
e. Certain types of life insurance may provide benefits for you and your family
while you’re still living. For example, permanent life insurance offers a cash value
component, which can be put to good use during your lifetime.

 There are two main categories of life insurance.

1. TERM LIFE INSURANCE:
Term life insurance offers protection for your loved ones for a specified period
of time-usually from one to 20 years. If you stop paying premiums, the
insurance stops. Term policies pay benefits if you die during the period covered
by the policy; but they do not build cash value.
2. PERMANENT LIFE INSURANCE:
Permanent life insurance policies do not expire; they are intended to protect
your loved ones permanently, as long as you pay your premiums. Some types of
these policies accumulate cash value.

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1.2 TRADITIONAL v/s UNIT LINKED:
 TRADITIONAL POLICIES
These are policies introduced by the LIC in the form of its various plans like
Jeevan Anand, Komal Jeevan etc. When the Life insurance sector was opened for
its privatization companies like ICICI prudential, Max New York Life etc. came
into the market with their new policies built on the traditional platform being
followed by LIC. In this platform the policyholder chooses his sum assured and
duration of policy and on the basis of his age the premium is determined. The
policy holder pays this premium for the fixed period as per the policy and is able to
withdraw the proceeds / returns after the expiry of the stipulated period under the
policy. In this kind of policy the insured is given a reversionary bonus as a
percentage of his sum assured which can be withdrawn by him on maturity of the
policy only. Till sum time ago this was the largest selling kind of policy but is now
steadily being replaced by Unit Linked Insurance Policies.

 UNIT LINKED POLICIES

These policies were introduced in India by Birla Sun Life Insurance Co. Ltd. and
these policies form a major share of the portfolio of all the other insurance
companies as of date. In these policies the insured chooses the premium he wants
to pay, the duration for which he pays the same and the period for which he wants
the insurance coverage. Consequently the insurance company determines the sum
assured. In these policies the Insurance companies take a certain percentage of the
premium paid towards management charges and mortality charges. The balance
premium is invested according to the insured’s risk profile and units are allocated
according to the unit value of the desired fund. Every year additional units are
allocated to the insured taking into account the additional premium received and
the interest income earned. The policy holder’s investment / return depends upon
the market value of these units. After a determined lock in period the insured can
withdraw any amount from his corpus any time he chooses to. These flexibilities
and user friendliness are the reasons behind the unit linked policies constituting
75% of the fresh policies sold in the industry as of date.

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1.3 TYPES OF LIFE INSURANCE:
1. TERM PLAN:
Term Insurance is also known as Pure Risk Insurance. This covers the risk of the
death of the individual only. One has to pay premium upto a certain period of time
or term, in case insured dies the whole sum assured would be payable to the family
of the insured. There is no return involved if nothing happens to the individual.
This is beneficial to an individual of any age as it provides for the highest sum
insured at the lowest possible rates. A term policy is straight insurance with no
investment component. You're buying life coverage that lasts for a set period of
time provided you pay the monthly premium. Annual-renewable term is purchased
year-by-year, although you don't have to requalify by showing evidence of good
health each year. When you're young, premiums for annual-renewable term
insurance are dirt cheap -- as low as a few hundred dollars per year for $250,000
worth of coverage. As you get older, premiums steadily increase. Level-premium
term has somewhat higher -- but fixed -- premiums for longer periods, anywhere
from five to 30 years. Term insurance is a type of life insurance policy that
provides coverage for a certain period of time or a specified "term" of years. If the
insured dies during the time period specified in the policy and the policy is active,
or in force, a death benefit will be paid. Term insurance is initially much less
expensive when compared to permanent life insurance. Unlike most types of
permanent insurance, term insurance has no cash value. In other words, the only
value is the guaranteed death benefit from the policy.
There are various types of term insurance policies available. Many policies offer
level premiums for the duration of the policy, such as ten, 20, or 30 years. These
are often referred to as "level term" policies. A premium is a specific cost, which is
typically monthly, that insurance companies charge policyholders to provide the
benefits that come with the insurance policy.
The insurance company calculates the premiums based on the individual's health,
age, and life expectancy. A medical exam that reviews the person's health and
family medical history might be required depending on the policy chosen.

15
The premiums are fixed and paid for the length of the term. If the policyholder dies
prior to the expiration of the policy, the insurance company will pay out the face
value of the policy. If the term expires and the individual dies afterward, there
would be no coverage or payout. However, policyholders can extend or renew the
insurance, but the new monthly premium will be based on the person's age and
health at the time of the renewal. As a result, the premiums could be higher for the
renewed policy versus the original term policy that was initiated when the
individual was younger.
Premiums can range depending on the age and the amount of payout. For example,
a 30-year policy with a $250,000 payout can range from $15 per month for a
person in their twenties to less than $60 per month for someone in their fifties. Of
course, each insurance company might have different rates depending on the
policyholder's health, history of smoking, and other factors. Term insurance is a
type of life insurance policy that provides coverage for a certain period of time or a
specified "term" of years. If the insured dies during the time period specified in a
term policy and the policy is active, a death benefit will be paid. Many term
policies offer level premiums for the duration of the policy. Other term policies
offer decreasing or increasing benefits over time as well as the option to convert
from term to permanent insurance.

 Types of Term Insurance

There are various types of term insurance besides the level term policies we've
outlined so far. Each policy has its pros and cons, depending on the needs of the
policyholder.
Convertible Term
Convertible term life insurance allows a term insurance policy, which has a limited
number of years before expiring, to convert into whole life or permanent insurance.
The major benefit of convertible insurance is that the policyholder doesn't have to
submit to a medical exam, nor are any health conditions considered when the term
policy converts to permanent insurance.
Increasing Term

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Some policies allow you to increase the death benefit as time goes on. The
premium increases as well, but it allows policyholders to pay lower premiums
early on in life when they have a lot of bills and expenses. The increasing term
prevents having to qualify for another policy at an older age to get the added
benefit as would be the case with traditional term insurance.
Mortgage Term or Decreasing Term
A mortgage term or decreasing term policy is the opposite of the increasing term
because the death benefit amount decreases over time. The goal is to match the
decline of the term benefit to the reduction of the policyholder's outstanding
mortgage. The idea behind this strategy is that you don't need as much life
insurance if you have less mortgage debt. However, although the premiums are
smaller than term insurance, the premium payments remain constant even as the
benefit declines.
Annual Renewable
As each year passes, the term insurance is renewed but for a higher premium since
the policyholder is a year older. The benefit to annual renewable term insurance is
that the coverage is guaranteed to be approved each year. However, it may not be
the most cost-effective for everyone due to the increased costs over time.
2. ENDOWMENT PLAN:
This is a popular insurance plan which not only provides insurance cover for the
family in the event of premature death but also ensures a lump sum payment after
the prefixed term along with bonus & final additional bonus. This is useful for any
individual who wishes to plan for a future event in his life like the marriage of his
children or for their higher studies or for any other contingency. Here the
individual pays for a certain period and gets the returns at the end of the
determined period. In case of a unit linked plan he can withdraw the money
anytime during the duration of his policy also. An endowment life insurance policy
is a form of life insurance that comes with a guaranteed pay-out, or endowment, at
the end of a set term. This is different from a regular term life insurance policy.
Ordinarily, when the “term” of a term life insurance policy ends, the policyholder

17
doesn’t get money back. A term life insurance policy is meant to snag lower
premiums for peace of mind during the length of the term (generally 10, 20 or 30
years).
An endowment policy takes that model and tweaks it, turning a term life insurance
policy into a savings vehicle. Of course, all life insurance comes with a pay-out if
the policyholder dies. But an endowment policy pays out at the end of the term
even if the policyholder is still alive and kicking. That pay-out can be used to pay
for college – or anything else really. Because they come with a pay-out,
endowment life insurance policies have higher monthly premiums than regular
term life insurance policies. Think of them as a cross between a term life insurance
policy and a cash-value life insurance policy.
When looking at endowment life insurance, take a look at a few things. You’ll
want to factor in the high premiums you pay each month, plus inflation over the
term of the policy. Most of the time, you’ll find that pay-outs from endowment life
insurance policies often don’t provide a particularly high return on investment.
They do, however, provide peace of mind and a form of forced savings, since
you’ll make regular monthly payments over the life of the policy. And as we know
from the dismal average savings rates for Americans, forced saving can be a good
thing. So is it worth it? When deciding how to save for college, consider the return
on investment for your money. Also look at how your savings will measure up
against the actual cost of four years of college.
3. WHOLE LIFE PLAN:
This plan provides protection against the risk of living too long. Under this plan the
individual pays the premium up to a certain period of time and gets the maturity
benefits on the completion of the term. After getting the maturity benefits the life
of the insured is covered up to the age of 70 to 99 varying from company to
company. This policy is beneficial for an individual who wants to protect himself
in his older days and also wants to leave some asset behind for his spouse or his
children on his demise. Whole life insurance provides coverage for the life of the
insured. In addition to providing a death benefit, whole life also contains a savings

18
component where cash value may accumulate. These policies are also known as
permanent or traditional life insurance.
Whole life insurance lasts for a policyholder's lifetime, as opposed to term life
insurance, which is for a specific amount of years. Whole life insurance is paid out
to a beneficiary or beneficiaries upon the policyholder's death, provided that the
premium payments were maintained. Whole life insurance provides a death benefit
but also a savings component, where cash can build up. The savings component
can be invested; additionally, the policyholder can access the cash while alive, by
either withdrawing or borrowing against it, when needed. When insurance
guarantees payment of a death benefit to beneficiaries in exchange for level,
regularly-due premium payments. The policy includes a savings portion, called the
cash value, alongside the death benefit. In the savings component, interest may
accumulate on a tax-deferred basis. Growing cash value is an essential component
of whole life insurance.
4.MONEY BACK POLICY:
These are low-risk savings options that provide insurance coverage as well. It is
often referred to as a source of regular income in the form of Survival Benefits. In
case of the policyholder’s demise during the policy term period, the entire sum
assured is paid to the nominee. Guaranteed Returns from Money back policy
Money back plan simply means that money comes back to the life insured after a
specific interval of time as survival benefit. The money back is guaranteed on the
survival of the policyholder. However, in case of death of the policyholder, the
nominee gets the sum assured and accrued bonuses, if any. Let's us take an
example to understand what the Guaranteed Returns under a money back plan is.
Aditya has opted for a Money Back Life Insurance policy and has a plan with a
plan with a sum assured of Rs. 5 lakhs for a term of 25 years. He would need to
pay a premium for 25 years and get back a part of the sum assured at regular
intervals. That means, he would get 15% of sum assured after the 5th, 10th, 15th,
and 20th year of the policy, which is 15 X 4 = 60% of the Sum Assured as Survival
Benefit. Also, on maturity he would get the remaining 40% of the sum assured and
bonus, if any. Here, the sum assured that he would receive on every 5 years of

19
interval period, is the Guaranteed Return under a money back plan policy.
Additionally, the 40% on maturity is also your Guaranteed Return under a money
back policy. Income during the lifetime of the Money Back Plan
Any particular expense in the future can be taken care as the Money Back policy
guarantees that the insured will get returns or will receive the sum assured every
few years. The survival benefit is accumulated every few years and thus forms a
second source of income to the policyholders. One can use these funds to take a
holiday, save them in case of an uncertain eventuality, save for deposit of your
house or an apartment, or to pay off the children’s school or tuition fees. Therefore,
money back plans have an edge over other life insurance plans available in the
market.

BEST MONEY BACK POLICIES IN INDIA 2018

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5. CHILDREN PLAN:
Child insurance policies are the most prevalent form of insurance covers taken by
the parents to provide for the secured future of their children. Child insurance
policy coverage can be taken in any of the following forms:
Where the Parents, paying The Premium-
In such a case the insured person is the child and the parents pay the premium. In
some cases the parents choose a waiver of premium benefit rider on their life in
which case on the death of the paying parent the insurance company pays the
premium for the remaining period, thus ensuring continuation of the desired
benefits to the insured. This policy is specifically very beneficial for children when
they are insured for a long duration with a limited paying period as the policy
acquires a high value over a long period of time & serves as an asset for the child’s
future.
Where the Child Is The Beneficiary-
In this case the life insured is that of the parent and the child is the beneficiary. In
this case the child gives the claim money in the unfortunate death of the parent.
This policy is useful for parents who want to provide for their child’s future to
protect him against any eventuality.
6. UNIVERSAL LIFE INSURANCE:
Universal life, also known as adjustable life, allows more flexibility than
traditional whole life policies. The savings vehicle (called a cash value account)
generally earns a money market rate of interest. After money has accumulated in
the account, the policyholder will also have the option of altering premium
payments—providing there is enough money in the account to cover the costs.
7. VARIABLE INSURANCE:
Variable life policies combine death protection with a savings account that can be
invested in stocks, bonds and money market mutual funds. The value of the policy
may grow more quickly, but involves more risk. If investments do not perform
well, the cash value and death benefit may decrease. Some policies, however,

21
guarantee that the death benefit will not fall below a minimum level. Another
variant, universal variable life, combines the features of variable and universal life
policies. It has the investment risks and rewards characteristic of variable life
insurance, coupled with the ability to adjust premiums and death benefits that is
characteristic of universal life insurance.

1.4 ADVANTAGES AND DISADVANTAGES OF LIFE

INSURANCE:
ADVANTAGES:
1. PEACE OF MIND:
The number one reason people buy life insurance is that if they died, someone they
cared about would be in a rough spot financially. Life insurance protects your
loved ones from financial hardship caused by losing you. If you’re married, you
might worry about how your spouse will pay off the house or put food on the table
without your income. If you’re a parent, you might worry about your kids paying
for college without you, or how their guardian will pay for childcare. Or maybe
you want to spare your loved ones from digging into their own pockets to pay for
your funeral. Plenty of people lose sleep over these thoughts, but the right life
insurance policy can help you feel confident your loved ones will have everything
they need if you pass away unexpectedly. But having a policy can also help you
live more fully today. Let’s say you want to invest in yourself or improve your
lifestyle right now, but draining your savings to put a down payment on a house or
go back to school makes you nervous. What if you take on all that debt and then
die unexpectedly? Would anyone you love get stuck with the bill? If you have life
insurance, you know your debts will be paid even if the worst happens. You can
feel more confident in taking these financial risks to improve your life now.
2. EXPANDING YOUR FINANCIAL PORTFOLIO
Not all life insurance policies increase your net worth, but those that come with a
cash value component can. Cash value acts like a savings or investment account,
accumulating funds as you pay your premiums and collecting interest along the
way. Many people use their life insurance policies as a way to diversify their

22
retirement savings or “force” themselves to put aside cash for a rainy day. While
cash value shouldn’t replace an emergency fund, you can take out a loan against it
if you need to. You’ll just need to pay it back, or the death benefit your loved ones
receive will be reduced by the amount you owe.
3. TAX BENEFITS
Two main tax benefits may come with life insurance: a tax-free death benefit and
tax-free cash value growth.
Tax-free death benefit payout
If your net worth is already high, you might buy life insurance solely to avoid
estate taxes when leaving an inheritance to your spouse or children. Death benefit
payouts are tax-free in most cases, so if you set your policy up smartly, you could
prevent Uncle Sam from taking a massive cut of your estate.
For most people, the tax benefits of life insurance are more of a perk. Generally,
your beneficiaries won’t have to pay taxes on the money your policy pays them.
Tax-free cash value growth
If you buy a cash value policy, any interest your account earns grows without you
having to claim it on your taxes. People who want to access their cash value can
borrow it from this account tax-free in most cases as well.
4. FLEXIBLE FINANCIAL SECURITY
No one knows what life will send your way, and life insurance is like a Swiss
Army knife of financial protection. Your beneficiaries can wield the death benefit
payout to cover whatever expenses they wish, even if you buy final expense life
insurance specifically. Loved ones can use the money to pay down the mortgage,
send the kids to college, or keep food on the table. Some life insurance policies
offer flexibility for you too. For instance, universal life insurance allows you to
adjust your premiums and death benefit payout as needed. And if you buy a term
life policy with a conversion option, you could extend your life insurance to
provide lifetime coverage. There are even optional riders that allow you to take out
part of your death benefit while you’re still alive if you’ve come down with a

23
terminal illness—and when it comes to expensive chemo treatments, that flexible
option can make all the difference.
5. AFFORDABLE COVERAGE
Most people overestimate the cost of life insurance, believing it costs three times
what they’d actually pay. In particular, millennials overestimate by more than five
times the actual price. The truth is, life insurance can be quite affordable,
depending on your situation and the policy you choose. Term life is cheaper than
whole, for example, and young, healthy people see lower rates than older adults
with preexisting conditions. If you’re looking for life insurance for seniors or you
have preexisting conditions, you may still have inexpensive options. Insurers tend
to specialize in insuring people in specific situations to make a name for
themselves among those shoppers. Some companies are quite forgiving of former
tobacco use, for example. Others may offer low rates for people with diabetes.
DISADVANTAGES:
6. THE COST OF LIFE INSURANCE
While life insurance is cheaper than most people think it is, you’ll probably still
have to open your wallet for your policy. True, many employers sponsor small
amounts of coverage at little or no cost to employees, but this coverage rarely
meets all of the policy owner’s needs. We’re going to level with you: you may
have to adjust your budget to buy life insurance. For a young, healthy person with
low coverage needs, it will likely be a small adjustment. Unfortunately, people
who need life insurance most may see the highest rates.
People older than 50, those with preexisting conditions, and shoppers looking for a
substantial death benefit may need to tighten their belts quite a bit to afford a
policy. It’s super important for these people to shop around.
7. YOU MAY HAVE BETTER INVESTMENTS OPTIONS ELSEWHERE
Hang around the blogosphere researching life insurance for a few minutes, and
you’re sure to run across the most heated argument in life insurance: Term vs.
whole: which is better? Whole-lifers tout the benefits of permanent coverage and
the tax-free investment that comes with cash value. Term-lifers say cash value is a
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weak investment and makes coverage cost too much. Who’s right? They both are.
While cash value grows tax-free, it usually grows pretty slowly. Even though the
rate varies by company and policy, most people see higher returns from their
401(k)s, mutual funds, and the stock market.
If you’re considering cash value life insurance for its investment benefits, make
sure you’re already maxing out your 401(k) and IRA. Also, read your policy
carefully. Some types of cash value life insurance—like those that invest in the
stock market—are riskier than others
8. LIFE INSURANCE REQUIRES PLANNING AHEAD
Life insurance moves at the speed of a lifetime. For starters, the application process
can take several weeks, and you may have to take a life insurance exam. But even
if you choose a no exam policy, you may need to think ahead—into the next
decade or beyond. Most policies last anywhere from 10 years to your entire life—
ideally many decades from now. You can choose a policy with lots of flexibility
baked in, so you’re covered no matter what life throws at you. Or you can build
your own ladder strategy for life insurance. It’s also essential to buy with an
insurer that can stand the test of time. Luckily, there are a few easy ways to vet life
insurance providers for financial stability. Several rating entities grade companies
on their financial strength. Those are:
a) AM Best b) Moody’s Fitch c) S&P

1.5 PROFILES OF THE ORGANIZATION:

 LIFE INSURANCE CORPORATION OF
INDIA
Life Insurance corporation of India was formed in September 1956 by passing LIC
Act, 1956 in Indian parliament. On the nationalization of the life insurance in
1956, the premium rating of Oriental Government security life Assurance company
were adopted by LIC with a reduction of 5% of the tabular premium or Re. 1 per
thousand sum assured, whichever was less. This reduction was made in

25
anticipation of economies of scale that would emerge on the merger of different
insurers in a single entity.
Life Insurance Corporation Of India - there are many things to consider as Life
Insurance Corporation Of India offers various insurance products which are very
complex, but underlying this complexity is a simple fact. The building blocks for
all Life Insurance Corporation Of India are (1) investment return; (2) mortality
experience; and (3) expense management; for your Life Insurance Corporation Of
India.
LIC is the biggest insurance player in the country. Out of the total premium of Rs
3766 crore generated by the insurance industry through group business in the year
2005-06, LIC alone accounted for Rs 3051 crore. In the financial year 2005-06,
LIC has grown at 30.68%. In respect of number of lives insured, LIC has shown a
growth of over 152%. In respect of number of schemes, LIC has a growth of 2%.
LIC's market share in number of individuals covered and number of policies stands
at 77% and 81%, respectively.

 Objectives Of LIC:
• Spread Life Insurance much more widely and in particular to the rural areas and
to the socially and economically backward classes with a view to reaching all
insurable persons in the country and providing them adequate financial cover
against death at a reasonable cost.
• Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
• Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of the interest of
the community as a whole; the funds to be deployed to the best advantage of the
investors as well as the community as a whole, keeping in view national priorities
and obligations of attractive return.
• Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
• Act as trustees of the insured public in their individual and collective capacities.
26
• Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
• Involve all people working in the Corporation to the best of their capability in
furthering the interests of the insured public by providing efficient service with
courtesy. Promote amongst all agents and employees of the Corporation a sense of
participation, pride and job satisfaction through discharge of their duties with
dedication towards achievement of Corporate Objective.
Various policies offered by life insurance corporation of India are;
1) Whole Life Schemes
• Whole life with profit;
• Limited payment whole life;
• Single Premium whole life;
• Convertible whole life plan;
2) Endowment Schemes
• Endowment plan with profit
• Limited payment Endowment
• Jeevan Mitra (Double Cover)
• Jeevan Mitra (Triple cover)
• Bhavishya Jeevan
• Jeevan Anand
• New Jana Raksha
3)Term Assurance Plan
• Anmol Jeevan
• 2 Year Term Assurance
• Convertible Term

27
• New Bima Kiran
4) Plan for needs of Children
• Komal Jeevan
• Jeevan Sukanya
• Jeevan Kishore
• Jeevan Balya
• Jeevan Chaya
• Marriage/educational annuity
• Deferred Endowment
5. Periodic Money Back Plan
• Jeevan Samridhi
• Jeevan Rekha Plan
• Money Back Plan
• Jeevan Surabhi
• Jeevan Bharathi
6. Medical benefits linked insurance
• Asha Deep II
• Jeevan Asha II
7. For benefits to Handicapped
• Jeevan Aadhar
• Jeevan Vishwas
8. Plans to cover housing loans
• Mortgage redemption

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9. Joint life plan
• Jeevan sathi
10. Investment plan
• Bima Nivesh Triple cover
11. Capital market linked plan
• Bima plus.

 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 a 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
3,000 employees. 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 crores.
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

29
cover and critical illness coverage for 10 critical illnesses of up to 50% of the Sum
Assured.
ING Vysya Life Insurance is a joint venture between ING Insurance International
BV a part of ING Group, the world's largest life insurance company. ING Vysya
Bank, with 1.5 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

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  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 consumers 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 October 1995 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

31
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.
Companies 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 be granted 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.

32
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
1) Group Term Insurance
2) Development Insurance

ICICI PRUDENTIAL LIFE INSURANCE

COMPANY
ICICI Prudential Life Insurance Company is a joint venture between ICICI, a
premier 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
33
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 Bank
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

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OM KOTAK MAHINDRA
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. Jeene Ki Azaadi...
The Products offered by the Company are:
1.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
2.Group Plan
Kotak Term Group plan
Kotak Gratuity Group plan
Kotak Credit Term Group plan
Kotak Gramina Bima yojana

35
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 a 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, Tamil nadu 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

36
• Met Gold par
• Met Platinum par
• Met Junior par
• Met junior Non par
3) Money Back
• Met Sukh
• Met Junior MB
4) Term
• Met Mortgage Protector
• Met Riders
• Accidental death

BIRLA SUN LIFE

Birla Sun Life Financial Services offers a range of financial services for resident
Indians and 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 in equities, 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.

37
The life insurance products offered by the company are
Individual life
• Premium Back Term Plan
• Flexi Secure Life Retirement Plan
• Single Premium Bond
• Birla Sun Life Term Plan
• Flexi Life Line Whole Life Plan
• Flexi Cash Flow Moneyback 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 certification. 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.

38
The products are –
Whole Life Participating Convertible
Whole Life-Non-Participating,
Children Endowment at age 18,
Children Endowment at age 24,
20-year Endowment Participating Policy,
Endowment to age 60

39
CHAPTER TWO: RESEARCH
METHODOLOGY
2.1 OBJECTIVE OF THE STUDY:
1. To know about the various investments alternatives that is mostly preferred by
the people.
Different avenues and alternatives of investment include share market, debentures
or bonds, money market instruments, mutual funds, life insurance, real estate,
precious objects, derivatives, non-marketable securities. All are differentiated
based on their different features in terms of risk, return, term etc.
2. Ascertain the profile and characteristics of potential buyers.
This analysis will determine identifying your customer base and ascertaining their
needs, something which helps you develop your product or service in a way that
specifically meets or exceeds those needs.
3. To find out the important criteria that people think about before investing in
a Life Insurance policy.
 Security & Assurance
 If you have debt that you still need to pay, life insurance guarantees that
your debts will be paid. Nobody wishes to hold their families in the position
where they have to deal with the financial liabilities you left behind. Life
insurance will ensure such a day never comes.
 Retirement plans
 Long Term Plans & Dreams
 Tax Saving
4. To have an insight into the attitudes and behaviors of customers.

40
To study the likes and dislikes of people regarding investments decisions. How
customer react to certain policies and schemes and their attitude towards the
insurance company.
5. To find out the differences among perceived service and expected service.
In this study we compare different insurance companies and find out the difference
between all the companies and the services they offer.
6. To produce an executive service report to upgrade service characteristics of
life insurance companies.
To know about the various things that customers expects from companies. We will
in this study ask for suggestions and recommendations for improving the services
offered by life insurance companies.
7. To understand consumer’s preferences.
To study about the preference of customer regarding the company they would like
to invest in. The returns provided by the companies and many other factors.
8. To access the degree of satisfaction of the consumers with their current
brand of Insurance products.
To find out if the customers are satisfied with their current life insurance policies
they have invested in. What other companies offer and what customers think about
other companies in comparison to their current insurance company.
9. To study the benefits of Life Insurance.
Every life insurance have some benefits and drawbacks. In this study we will learn
about many benefits of having and investing in life insurance policy.
10.To study the factors responsible for selection of life insurance as an
investment option.
There are various factors that influence the customers in selecting the life
insurance company such as personal interest, family, friends, agents,
advertisements and many other reasons.

41
2.2 STATEMENT OF THE PROBLEM:
This Study will help us to understand the consumer’s perception about life
insurance policies. This study will help the companies to understand, How a
consumer selects, organizes and interprets the Quality of service and product
offered by life insurance companies.
1. SCOPE OF THE STUDY
This study is limited to the consumers within the limit of Bangalore city. The study
will be able to reveal the preferences, needs, perception of the customers regarding
the life insurance products, It also help the insurance companies to know whether
the existing products are really satisfying the customer needs.
2. NEED FOR THE STUDY
1) The deeper the company’s understanding of consumer’s needs and perception,
the earlier the product is introduced ahead of competition, the greater the expected
contribution margin. Hence the study is very important.
2) Consumer markets and consumer buying behavior can be understood before
sound product and marketing plans are developed
3) This study will help companies to customize the service and product, according
to the consumer’s need.
4) This study will also help the companies to understand the experience and
expectations of the existing customers.
5) Apart from creating, manufacturing and distribution capabilities for life
insurance products, an in depth study of the consumers, their preferences and
demand for their product is very necessary for setting up an efficient marketing
network.
3. BACKGROUND OF THE STUDY:
“Life Insurance is a contract for payment of a sum of money to the person assured
on the happening of the event insured against”. Usually the insurance contract
provides for the payment of an amount on the date of maturity or at specified dates

42
at periodic intervals or at unfortunate death if it occurs earlier. Obviously, there is a
price to be paid for this benefit. Among other things the contracts also provides for
the payment of premiums, by the assured.
Life Insurance is universally acknowledged as a tool to eliminate risk, substitute
certainty for uncertainty and ensure timely aid for the family in the unfortunate
event of the death of the breadwinner. In other words, it is the civilized world’s
partial solution to the problems caused by death. Life insurance helps in two ways
dealing with premature death, which leaves dependent families to fend for
themselves and old age without visible means of support.

2.3 METHODOLOGY:
This study involves secondary as well as primary data information by conducting
literature review. The materials used includes texts, journals and articles within a
period of last one decade. Also primary research has been used in the form of
survey. Sample size was approximately 50. Simple random samplings has been
applied. This will help in finding out what has been researched by others and it will
also examine the perceptions of investors investing in Life Insurance Policies.

2.4 SAMPLING OF DATA:

The process of drawing a sample from a large population is called sampling.
Population refers to the total of items about which information is defined. Well
selected samples may reflect fairly and accurately the characteristics of the
population.
2.1) Sampling Unit:
The sample unit of this survey was the customers having life insurance policies in
Mumbai City, Maharashtra.
2.2) Sample Size:
The sample size was 50 customers of different life insurance companies, from
various parts of the Mumbai City
2.3) Sampling Technique Adopted: Convenient sampling

43
2.5 SOURCES OF DATA COLLECTION:
After identifying and defining the research problem and determining specific
information required to solve the problem the researcher will look for the type and
of data which may yield the desired results, while deciding about the method of
data collection to be used for the study, there are two types of data.
They are as follows
1) Primary Data:
Primary data are those which are collected for the first time. Primary data is
collected by framing questionnaires. The questionnaire contained questions which
are both open-ended and closed-ended. Open-ended questions are questions
requiring answers in the respondents own words. Closed-ended questions are those
wherein the respondent has to merely check the appropriate answer from a list of
options available. Any doubts raised by the respondents were clarified to get the
perfect answers from the distributors.
Open-ended questions yielded more insightful information, whereas closed-ended
questions were relatively simple to tabulate and analyze.
2) Secondary Data:
Secondary data means data that are already available i.e. they refer to the data
which have been collected and analyzed by someone and can save both money and
time of the researcher. Secondary data may be available in the form of company
records, trade publications, libraries etc Secondary data sources are as follows:

 Company Reports
 Daily Newspaper
 Standard Textbook
 Various Websites

44
2.6 LIMITATIONS OF THE STUDY:
Although the study was carried out with extreme enthusiasm and careful planning
there are several limitations which handicapped the research viz.,
1. Time Constraints:
The time stipulated for the project to be completed is less and thus there are
chances that some information might have been left out, however due care is taken
to include all the relevant information needed.
2. Sample size:
Due to time constraints the sample size was relatively small and would definitely
have been more representative if I had collected information from more
respondents.
3. Accuracy:
It is difficult to know if all the respondents gave accurate information some
respondents tend to give misleading information.

45
2.7 HYPOTHESIS:
 NULL HYPOTHESIS (H0):
Most people prefer investing in LIC among other life insurance companies.
LIC of INDIA is the best on claim settlement, with the competitor companies.
LIC Bonus rate is more than other companies.
LIC’s Life Fund is around 20 lac crores.
LIC of INDIA is number ONE in Life Insurance Company among all Pvt.
Insurance companies with a market share of more than 70% coverage since
privatization. It is giving better services to the nation in many ways along with
insurance coverage in India.

 ALTERNATE HYPOTHESIS (H1):

People prefer investing in other life insurance companies rather than LIC.
Other life insurance companies such as HDFC, MET Life insurance, Bajaj Allianz,
ICICI Prudential, TATA AIG, offer variety of schemes and policies which people
find suitable. Due to low risk and high returns in some of the companies people
prefer to invest in other Life Insurance Companies rather than LIC.

46
 CHAPTER THREE:
LITERATURE REVIEW
This chapter presents the review of literature to identify and understand the
implications of different issues related to consumer behavior and life insurances in
India. A comprehensive review of related past studies helps the researcher to
adopt, modify and improve the conceptualization of framework and provide a link
with past approaches. The findings and recommendation of the past literature
relating to consumer behavior towards life insurance services are not many. Only
few comprehensive studies exclusively towards consumer behavior on endowment
policy are carried out in India. Based on the review of literature the researcher has
enable to identify her source for the present study. The available studies are
collected from research articles, committee reports, projects and surveys
conducted.

 Khan, M.K. (1978):

Attempt to know the opportunities and prospects in the career of a life insurance
sector. He explains about what a good career is and how a good career should be
for selling of life insurance products. There is no age barrier and it requires no
previous occupational experience, but one must be a professional and capable of
creating opportunities in building personality. The relationship of life Insurance
agent with clients is not temporary and the service rendered has no substitutes. He
also observes that life insurance agent remains, in a sense, permanent server to the
clients.

 Ramesh Jain (1980):

Conducts a case study at Sagar branch, Calcutta, of Life Insurance Company view
the spread of life insurance in a particular area and to channelize the mobilized
saving for nation building activities. Analyzing the processing of procurement of
insurance business and administration of Life Insurance Company in branch level,
the study also brings out the growth of total new business and about 30% of Life

47
Insurance Companies individual assurance business originated from the rural
sector - it adds to the privilege of Life Insurance Company to contribute their
investments to many of the vital projects and schemes under 20 point programmer.
The findings of the study were to establish servicing center to have continuous
interaction with the policyholders and the sagar branch has still greater
potentialities of expansion in rural area.

 Rajkumar (1985):
Views that advertising is to influence a customer, who has a limited spending
power and it seems to operate through familiarizing spreading news over cog
inertia and image building improving market share, educating, informative and to
have staff support. As far as insurance industry is concerned, misconception is a
common problem and the pre-testing revealed that most of the rich people are
associated with insurance and he viewed that the treatment of Life Insurance
Company to the public is always unfair.

 Shesha Ayyar, V. (1986):

In his article entitled “Product Development” has discussed various issues
connected with developing new polices such as the importance of developing new
schemes and various problems involved in the development of new schemes in
Company. He suggested the need for including ancillary benefits such as accident
benefits, disablement and hospitalization benefits.

 Rajan Saxena (1986):

In his article entitled “Life Insurance Services” discusses various issues relating to
life insurance. The author insists on the importance of life insurance and discusses
on various strategies of life insurance.

 Mishra, M.N. (1987):

Made a study to appraise the strategies of Life Insurance Company. While
reviewing the strategies, the author felt that before 1960 Life Insurance Company
did not give much attention to the objective of customer satisfaction, but from

48
1980 onwards the corporation has taken several remedial measures to provide
better customer service and improve the customer satisfaction.

 Ashish Deb Roy (1987):

In his article entitled “We Care for our Customers” has examined the nature and
importance of better customer services to policyholders and has emphasized the
need for quality in service. He has given a detailed note on the various steps to be
taken by Life Insurance Company to improve the customer service such as training
programmes conducted by Company to its agents and employees, opening new
branches and introduction of computers in insurance branch offices.

 Venkatesh, N.C. (1987):

In his article entitled “On the Trail of Better Service” has discussed the
importance of better and personal servicing to the customers and has emphasized
the importance of satisfying the policyholders.

 The Planning Wing of the LIC Divisional Office, Thanjavur (1987)

Has conducted a sample survey on “Customer Satisfaction”. The objectives of the
study found the level of consumer satisfaction regarding the services, particularly
on the aspects such as timely dispatch of discharge forms, reminders, the
cooperation given by agents or development officers, courtesy and sympathy of
Company officials, receipt of the policy amount within the due date etc. The results
of the study revealed the following points. They are:
• Discharge forms are received before the due date by seventy- nine per cent of the
policyholders.
• Eleven per cent of the policyholders approached the agent or development officer
for help in the submission of the requirement and they are happy with the services
rendered by them.
• Twenty -one per cent of the policyholders submitted the requirements after
receiving a reminder from the branch office.
• Six per cent of the policyholders approached the branch office for discharge
forms.

49
• Ninety per cent of the policyholders were satisfied with the prompt service
rendered by the branch office.
• Some policyholders stated that the corporation should insist the agents and
development officers render all possible help to their clients at the time of claim
and survival benefits settlement.
The overall conclusion from the above study were:
• There is an imperative need for keeping up the tempo of maturity claims
settlement operations at the present level.
• It is desirable to verify the policy ledgers every fortnight for omissions in the
computer list so that the delays can be reduced, and all the claims can be settled
before the due date.
• A few policyholders, who expressed their grievances at the delay, could have
been satisfied, if some courteous and prompt attention had been paid to them when
they came to office.
The Insurance Institute of India prepared a Project Report on “Marketing of Life
Insurance”, (1987) This project was undertaken to examine the following aspects:
Extent of life insurance coverage, awareness, attitudes and beliefs of people on life
insurance, perceptions, sense of identification of employees with Life Insurance
Company. He concluded that LIC is a better avenue of investment than bank
deposits. LIC products are sold easily among the consumers on account of its
reliability.
 Rao, B.S.R. and Appa Rao Machiraju (1988):
In their article entitled “Life Insurance and Emerging Trends in Financial Services
Market”, contends that the agents of life insurance should improve their services to
the level of financial experts. The authors felt that the change in the economic
scenario would help the corporation in better services field.
 Raghunadhan, R. (1988):
In his article “Population - Insurable and Insured” made an attempt to analyze the
insurance coverage of the insurable population and concluded that more self-
employed and agricultural laborers are to be tapped. The author gave a suggestion
to improve and introduce new schemes to satisfy the groups.

50
The National Council of Applied Economic Research, New Delhi conducted two
surveys in 1988 and 198913 on “Appraisal of Quality Service Organizations” and
“Quality Services in Life Insurance Company” respectively. These two studies
were sponsored by the Life Insurance Company. The policyholders’ general
feeling is that the demand notice must be sent in time. Some policyholders rated
the quality of services was excellent. Hence, by providing prompt services, the
customer relationship is maintained for a long period of time.
 Patki, V.V. (1989):
In his article “Rural Marketing” discussed the problems of selling the life
insurance in the rural areas and gave many suggestions to penetrate into the rural
market. The suggestions are participation in village fairs, using audiovisual
methods and explaining the merits of the life insurance to the villagers etc.
 Shejwalker, P.C. (1989):
In his article “Training in life Insurance” discussed the importance of trained agent
force to develop the life insurance business. He stressed that present selection
pattern of the agent should be changed. He expressed his opinion that private or
independent institute should be invited to impart training to the agents.
 Krirubashni, B. (1991):
In her study attempts to know the level of awareness, preference and influencing
factor pertaining to policy holdings and to test the relationship between the
influencing factors and policy holdings. The study reveals that the majority of the
respondents aware of the endowment assurance policy and considered to rank it as
number one. The study also revealed that there was a significant relationship
between personal factors and policy holdings.
 Appi Reddy and Narasimha Murthy, G. (1992):
Have attempted to examine true marketing practices followed by Life Insurance
Company in rural areas and problems involved in providing the services. The
organization appoints development officers with responsibility in a specified
territory (Trust with Trust) and special promotional efforts like field publicity vans,
film shows, exhibitions etc are insisted. The study found that only 4.55 crores
people have been insured against the insurable population of 21 crores, in spite of
consistent efforts.

51
  Seetaramaiah, M. (1992):
In his article entitled “Fluctuations in New Business” identified the reasons for
heavy work load on new business during the year ending period. He suggested
some steps to overcome them. They are closing the half yearly accounts in
September, giving heavy discount for the premium received in the first quarter,
giving a special rebate of premium in the lean months, and completing the
promotion and posting of officials by the first week of April.
 Gidwani, S.J. (1996):
Tries to find probable solution as to why human life is valued after death in
monetary terms and to what extent the life insurance is needed for an individual.
He adopts three methods to study the situation.
(i) Ability to look into one’s pocket to decide how much one can save fixed sum of
money so that maximum life insurance can be purchased.
(ii) Calculate individual average earning from future personal effort over the
remaining year of productive life time, and
(iii) Total expenditure met during lifetime represents cost of acquisition of human
asset which is productive in subsequent year.
 Narasima Murthy, G. (1996):
In his paper attempts to examine and evaluate the customer service provided by
company at Hanamkonda branch in Andhra Pradesh. For this purpose, opinion
of the policyholders were grouped as professional and managerial group,
regular income group, self employed group and agricultural group. A sample of
100 customers on random basis were selected and the data were collected, using
structured questionnaire. The findings of the study were that majority of the
policyholders are satisfied with premium rates fixed by Life Insurance
Company and remaining felt that rates should be reviewed in view of declining
mortality rate.
 Malhotra, R.N. (1996):
A committee on reforms in the insurance sector was formed to discuss on the
media’s insurance sector - According to his survey, the awareness level of various
policies of both General and Life Insurance Company is quite limited. He is also of

52
the view that a fair proportion of people are of the opinion that peerless companies
are offering only general insurance.
 Modawat, S.L. (1997):
Studies the change that had taken place between two decades in life insurance
with particular reference to policyholders’ weal and loops. The twin objective at
the time of inception was to provide protection to all the section of society and to
make available the investment in priority sectors. The study revealed no
spectacular increase in business from rural areas, but all efforts were made to
exploit the vast and untapped potential from rural business. Life fund registered an
increase at 12.83% in the year 1975-76. 17.7% the net lapse ratio was due to the
misguidance of agents and development officers, but targets were fixed
realistically to bring down it.
 Shekar Chandra (1998):
In his article “Future strategies for Life insurance” discussed various issues
relating to life Insurance. He has given a detailed note about new kinds of products
and intimacy with the constant technology adoption for survival as well as for
consistent growth.
 Pamela L. Alreck and Robert B. Settle (1999):
Felt that the central objective of the marketer’s is not simply to have a relationship
with buyer but also to build the relationship with buyer in the form of linking the
brand to a particular need, associating it with a pleasant mood, appealing to sub
conscious motives: conditioning buyers to prefer the brand through reward;
penetrating perceptual and cognitive
barriers to create preferences and providing attractive models for buyers.
 Ajit Ranode and Rajeev Abuja (1999):
Present an overview of the operation of Life Insurance Company in India and
identify the strategic issues in liberalization and the entry of private players in
insurance. The author brings out the need of private players, enhances efficiently in
operation, achieving a greater density and penetration of life Insurance, mobilize
long term savings for infrastructure and to bring freedom in investment in order to
survive and adapt to the liberalized scenario.

53
  Raghu Gulati (1999):
In his survey attempts to observe the Life insurance market in relation to products
and customers. A basic understanding of life insurance business, product portfolio,
strategy the company adopts, demographic analysis, the customer strategy that the
organization repeatedly follows when launching insurance etc. is studied. The
study also reveals that the company has deep penetration in urban areas, but the
people are under insured, yet there exist potential to increase the coverage of
insurance. 50% of Life Insurance Company business comes from rural areas and
agents seem to be the most effective channels regarding sales. In product strategy,
if the customer is in need of basis insurance product, the company should come
forward to launch term profit that is to be matched with risk; a unit link product is
to be launched etc.
 Shesha Ayyer, V. (1999):
In his article entitled “New Insurance Products in the Next Century” expressed his
views about new products. The possibility of the aged living too long has become
real because of advancement in medical facilities. Pension schemes have thus
become popular though at a slow pace. Divorce rates are increasing, and the
insurer can look into the problem and introduce new schemes to fit them.
 Vijayavani, J. (1999):
In her prize-winning technical paper entitled “Cost Effective Distribution
Channels of Life Insurance Products” discussed the various methods to improve
the channels of distribution. The concept of floating rebate schemes to the
customer not only spreads insurance coverage but also attracts extra customer. She
suggested health insurance products for different segments. She further suggested
that free offer schemes should be introduced to the customers to improve business.
 Lajput Ray Chandhani (1999):
Attempts to study the monetary value of key man’s life, maximum Sum Assured
and other requirements. Though introduced five years back in India, it is yet to
gain prominence in the field of life insurance. He viewed that key man insurance
holds good to mitigate the losses that might materiality affect the organizations
profit, reduce sales, increase cost, restrict credit etc and that might be caused by
key employees whose skill and knowledge is more valuable to the organization and
remains almost indispensable.

54
  Vinay Verma (1999):
In his technical paper entitled “Retailing Personal Covers” gave some suggestions
to improve the insurance business. He suggested that health insurance products for
different segments. As the need of the target groups should be developed. He also
suggested that free offer schemes should be introduced to the customers to improve
business.
 Jaya Basu and Chandra Sekhar (2000):
Discuss the problem faced by the insurance players towards majority of
population being ignorant of the policies. Only 15 per cent of the total population
is insured and the penetration level of insurance policies in India is only 0.5% as
against 2.86% in Israel and 2.43% in Hong Kong. If this status is to be increase in
India, there is a need to create customer awareness in rural areas, innovate low-
prices units with a low premium and right distribution techniques with planning for
rigorous training to agents, direct marketing, bank assurance etc, which can
definitely prove to be a boon to new the companies entering this sector.
 Ramakrishna Reddy and Raghunadha Reddy (2000):
Attempt to study the issues and relate conclusion on certain matters like whether
premium rates reflect the life expectancy, or the policy designed only for
government employees or semi - government employees or reputed commercial
firms etc. The spirit of the policyholders to know about the working, drawbacks
and short comings of the Life Insurance Company is discussed. The study reveals
that the rates of premium charged under postal life insurance are less and cheaper
compared to the rates of premium of Life Insurance Company. As it is covered for
a confined class of selective masses, it is felt necessary to concentrate on
uncovered areas and non-salaried class as potential Market segments. The foremost
change required is to provide transparency of information to the community, as
they have the freedom to access any information about the working of Company.
 Malliga, R. (2000):
In her study examines the association between Socio Economic Status, Personality
Traits of the Agents and the Performance in Tirunelveli, Tuticorin and
Kanyakumari districts. Further, the impact of marketing strategies and attitude of
the agents towards the organization and their performance is studied with a sample
of 100 respondents using stratified random sampling. The results of the data show

55
that performance of the agents in terms of number of policies, the Sum Assured
and the total commission received was found to be dependent on the Socio-
economic status. There is a significant correlation between the marketing strategies
of the agents and their performance.
 Achamma Samuel (2000):
Has made an attempt to make an overview of the insurance system in India. As the
insurance sector facilitates for economic development, the author tries to evaluate
the insurance penetration and makes a comparison with the world standards. The
study reveals that India’s insurance penetration was only 2.3% as against the
world’s average of 7.8% in the year 2000. The low insurance penetration reflects
on the vast potential for the development of insurance markets in India. The share
of insurance as a percentage of real Gross Domestic Product during the period
1981-82 to 2000-01 was below 1%. The insurance sector has been only a marginal
contributor to the country’s Gross Domestic Product. One of the reasons
attributable to this could be the lack of effective competition (due to the monopoly
position enjoyed) by the public sector. Opening up of the insurance sector may
argue well for the growth in income from this sector.
 Vijay Srinivas (2000):
In his article entitled, “How Returns Linked Insurance Products can be
Popularized?” emphasized that the insurers should link insurance products with
other benefits. Low incomes, social structure, lack of understanding among the
public, lack of availability of new schemes are the main reasons for low
productivity for insurance in India.
 Kotler, P. (2000):
In his book, mentioned that a company practicing market segmentation realizes
that buyers differ in their needs and wants, purchasing behavior, demographic
characteristics, product service usage patterns, geographic locations, buying habits
and other characteristics. India is poised to experience major changes in its
insurance markets as insurers operate in an increasingly deregulated and liberalized
environment. For consumers, opening up of the insurance sector will mean new
products, better packaging and improved customer service product innovation and
channel diversification would gain momentum, in line with the global trend of
financial services convergence, the non-life insurance industry in India is thus set
to see some

56
major drama unfolding in the near future, with the public sector companies tussling
with the private companies for the potentially lucrative Indian General Insurance
Market.
 Mishra and Simita Mishra (2000):
Brings the position of insurance compared with European countries, where life
insurance accounts for 58% of global direct premium and non-life 42% during the
year 1997. The study states that the need for insurance arises when economic
activity increases, family becomes nuclear and individual become more dependent
on employment.
 Anabil Battacharya (2000):
In his article “Indian Banks - Entry into Insurance Sector” has stated that the
banking industry is perpetrating into the insurance industry. He suggested that the
eligibility criteria (Framed by the IRDA - Minimum net worth to the extent of
Rs.500 Crores, reasonable level of nonperforming assets of the bank, continuous
profit for the first three years) might be relaxed (10% of the net worth Rs.50 Crores
as Minimum net worth).
 Sankariah, Rudra Saibaba and Pervaram Sreenath (2001):
Attempt to articulate the objectives like marketing strategies, progress in Life
Insurance Company, different facilities to meet risk coverage and highlights of the
new policies offered by the insurance companies in the context of privatization,
liberalization and globalization. On comparing with private firms, the study
elicited that different varieties of policies offered by Life Insurance Company are
not available with other insurance companies as they offered only endowment and
money back policies. The progress of Company is highly remarkable which
recorded only 9.32 Lakhs. New policies in the year 1956 as against 148.43 Lakhs
new policies in the year 2000. There is every possibility in the growth of insurance
business as 57.6% of the insurable population is still uncovered. LIC intends
shifting from mass - marketing to target marketing of individuals and extends
reaching out to customer in the most cost-effective way with target offers.
 Mahesh Chandra Garg (2001):
Brings out the new paradigm in the insurance industry by imposing the increase in
life expectancy of individuals and disintegration of joint family system. According
to his view, the rate of insured which was around 7 per cent of the population in

57
1999 has to grow very fast because private sector operator in collaboration with
their overseas partners are likely to bring in more professional and focused
approach. Once competition grows, lower premium may also become a reality and
the regulatory body has to ensure a balance in the enactment of the regulation in
the overall development and maturity of the insurance industry.
 Agarwal, R.F. (2001):
Has attempted to study the importance of information technology in the insurance
industry and brings out the efficient need of providing improved services when
there is competition due to private entry. In an insurance company, the service of it
may be utilized in many areas like customer service, claim management, human
resources etc. It is assumed that to have an overall increase in the size of the
insurance market, information technology must be used on a much vigorous basis
for more extensive penetration.
 Paresh Parasnis (2001):
In an article briefly discusses the various channels of distribution in the life
insurance industry in India and new avenue cues being explored by the new player.
The greater importance is given to the customer not only for meeting his
requirements but also the impact in times of fulfillment, quality of service
rendered, complexity of products etc is given priority. To conclude, the life
insurance industry in transition presents - opportunities, but is also fraught with
challenges of an - unknown magnitude. Therefore, only the best will survive in the
long-term which enables to spot the emerging trends and helps to capitalize the
benefits of its customers.

58
 CHAPTER FOUR:
DATA ANALYSIS,
INTERPRETATION AND
PRESENTATION
In order to extract meaningful information from the data them. The analysis can be
conducted by using simple statistical tools like percentages, averages and measures
of dispersion. Alternatively, the collected data may be analyzed collected, the data
analysis is carried out. The data are first edited, coded and tabulated for analyzing
by using diagrams, graphs, charts, pictures etc. Data analysis is the process of
planning the data in an ordered form, combining them with the existing
information and extracting from them. Interpretation is the process of drawing
conclusions from the gathered data in the study.
In this research the data analysis tools used are percentages and graphs. The
various attributes were analyzed separately and the importance to each was
calculated on the basis of the percentage. The rank having the maximum
percentage was taken to be preferred importance to the particular attribute. After
looking at each attribute separately, all the attributes were considered together to
develop a map on the most preferred rank for all the attributes.

59
TABLE NO. 01
AGE OF RESPONDENTS:

The above table classified the respondents according to

their age group. The majority of the respondents belong to
the age group 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.

60
GRAPH NO. 01
AGE OF RESPONDENTS:

INTERPRETATION:
Majority of the insurance holders are belonging to the age
group of 20-30 years.

61
TABLE NO. 02
GENDER OF RESPONDENTS:

This table helps us to understand that there are more

number of male consumers with 74% market share than
the female consumers with 26% market share.

62
GRAPH NO. 02
GENDER OF RESPONDENTS:

INTERPRETATION:
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.

63
TABLE NO. 03
OCCUPATION OF RESPONDENTS:

It could be inferred that majority of consumers of life

insurance policies are private employees with 48% and
Government employees with 40%, followed by students,
house wives and retired persons with 4 % each.

64
GRAPH NO. 03
OCCUPATION OF RESPONDENTS:

INTERPRETATION:
The above graph shows that the employees are the large
proportion of insurance holders compared to other
categories.
65
TABLE NO. 04
INCOME LEVEL OF RESPONDENTS:

The majority of dominant income group having life

insurance policies belong to the income group of 5,000 to
10,000, which is middle class group. Followed by the
income group of 10,000 to 15,000.

66
GRAPH NO. 04
INCOME LEVEL OF RESPONDENTS:

INTERPRETATION:
The above table shows that most of the consumers of
insurance policies are belonging to the income group of
5000-15000.

67
TABLE NO. 05
ATTRIBUTES FROM RESPONDENTS:

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 company reputation, and
then premium outflow followed by service quality and
product quality.

68
GRAPH NO. 05
ATTRIBUTES FROM RESPONDENTS:

INTERPRETATION:
The above figure shows 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 company reputation,
and then premium outflow followed by service quality
and product quality.

69
TABLE NO. 06
FACTORS WHICH INFLUENCED TO BUY LIFE
INSURANCE POLICY:

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 consumer to buy a
life insurance product, followed by family, friends, agents
and advertisements.
70
GRAPH NO. 06
FACTORS WHICH INFLUENCED TO BUY LIFE
INSURANCE POLICY:

INTERPRETATION:
The above figure shows that the key factor which
influences the consumers to buy the life
insurance product is personal interests, followed by
family, friends, agents and advertisements.

71
TABLE NO. 07
VALUE OF LIFE INSURANCE POLICY:

It can be inferred that majority of consumers buy the life

insurance policy which costs more than Rs. 1,00,000
followed by Rs. 50,000 to Rs.1,00,000, followed by
Rs. 25,000 to Rs. 50,000.

72
GRAPH NO. 07
VALUE OF LIFE INSURANCE POLICY:

INTERPRETATION:
The above figure shows that majority of consumers buy
the life insurance policy which costs more than Rs.
1,00,000 followed by Rs. 50,000 to Rs.1,00,000, followed
by Rs. 25,000 to Rs. 50,000.

73
TABLE NO. 08
PREFERENCE TO INVEST THEIR MONEY:

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.

74
GRAPH NO. 08
PREFERENCE TO INVEST THEIR MONEY:

INTERPRETATION:
The above figure shows that most of the respondents are
preferred to invest their money in bank rather than
insurance sector.

75
TABLE NO. 09
MARKET SHARE OF DIFFERENT COMPANIES
(in ranks):
COMPANIES RANKS
LIC 1

ICICI PRUDENTIAL 2
HDFC 3
TATA AIG 4

ING VYSYA 5
BAJAJ ALLIANZ 6
MET LIFE 7
OTHERS 8

From the table it can rank the life insurance companies,

LIC stands first, followed by ICICI Prudential followed
by HDFC Standard life, followed by TATA AIG.

76
GRAPH NO. 09
MARKET SHARE OF DIFFERENT COMPANIES
(In ranks):

INTERPRETATION:
From the above figure it can ranked the life insurance
companies, LIC stands first, followed by ICICI Prudential
followed by HDFC Standard life, followed by TATA
AIG.

77
TABLE NO. 10
RESPONDENTS SATISFIED WITH CURRENT
LIFE INSURANCE POLICY:

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.

78
GRAPH NO. 10
RESPONDENTS SATISFIED WITH CURRENT
LIFE INSURANCE POLICY:

INTERPRETATION:
From the above figure it could be inferred that most of the
consumers are satisfied with the service and quality of
products of their life insurance companies.

79
TABLE NO. 11
RATING OF SERVICES OFFERED BY YOUR LIFE
INSURANCE COMPANY:

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.

80
GRAPH NO. 11
RATING OF SERVICES OFFERED BY YOUR LIFE
INSURANCE COMPANY:

INTERPRETATION:
From the above figure shows that most of the respondents
have rated their current life insurance companies
performance as good.

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TABLE NO. 12
INSURANCE COMPANY PREFERRED BY
RESPONDENTS:

This table helps us to understand the market share of

different life insurance companies. LIC has a major share
of 78 %, followed by ICICI Prudential with 8% market
share, followed by HDFC Standard Life with 6% market
share.

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GRAPH NO. 12
INSURANCE COMPANY PREFFERED BY
RESPONDENTS:

INTERPRETATION:
The above graph shows that 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.

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TABLE NO. 13
RESPONDENTS WILLINGNESS TO
COMMUNICATE THE SERVICES OFFERED BY
THEIR LIFE INSURANCE COMPANY:

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.

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GRAPH NO. 13
RESPONDENTS WILLINGNESS TO
COMMUNICATE THE SERVICES OFFERED BY
THEIR LIFE INSURANCE COMPANY:

INTERPRETATION:
From the above figure it can be noted that the majority of
consumers would like to communicate the service offered
by life insurance companies.

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TABLE NO. 14
NUMBER OF LIFE INSURANCE COMPANIES
KNOWN BY RESPONDENTS:

This table helps us to know the consumer awareness

about the life insurance companies. 58% of the consumers
are aware about less than 5 life insurance companies,
followed by 36% consumers who know 5 to 7 life
insurance companies.

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GRAPH NO. 14
NUMBER OF LIFE INSURANCE COMPANIES
KNOWN BY RESPONDENTS:

INTERPRETATION:
The above figure shows that most of the respondents are
aware about, around five companies.

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RECCOMENDATION AND SUGGESTIONS FOR
IMPROVING THE SERVICES OFFERED BY LIFE
INSURANCE COMPANIES:

With regard to insurance products, consumers respond at different rates, depending

on the consumers characteristics. Hence Insurance companies should try to bring
their new product to the attention of potential early adopters.

a) Due to the intense competition in the life insurance market, the life insurance
companies have to adopt better strategies to attract more customers.
b) Keeping the cost, quality and return on investment in tact is necessary in
order to tackle the competition.
c) Life insurance products are taken mainly by middle- and higher-income
group. Hence, they should be regarded as maim targeted income groups.
Life insurance products which are suitable for lower income group should
also be released so that the market share increases.
d) Return on investment company reputation and premium outflow are most
preferred attributes that are expected by the respondents. Hence greater
focus should be given to these attributes.
e) Private life insurance companies should adopt effective promotional
strategies to increase the awareness level among the consumers.
f) Life insurance companies should ask for their consumer feedback to know
whether the consumers are really satisfied or dissatisfied with the service
and product of the companies. If they are dissatisfied, then the reasons for
dissatisfaction should be found out and should be corrected in future.
g) The LIC brand name has earned a lot of goodwill and enjoys a high brand
equity. As there is intense competition in life insurance market, LIC should
work hard to maintain its top position and offer better service and product.

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 CHAPTER FIVE:
CONCLUSION
This study titled “Study of Consumers Perception about Life Insurance Policies”
enables the Life Insurance Companies to understand how consumer’s perception
differs from person to person. How a consumer selects, organizes and interprets the
service quality and the product quality of different Life Insurance Policies, offered
by various Life
Insurance Companies.
The response of the insurance companies has been very positive and within a short
span on time, the Indian insurance market scenario has seen a perceptible change
in terms of improved customer service benchmarks and introduction of innovative
and tailors made products.
Most of the insurance majors have represented in the form of joint venture in
Indian market.
The new products that have been introduced by the companies have certain
innovative features in terms of better customer services and also wider covers. This
has given customer ample choice to select products.

• The majority of respondents belong to the age group of 19 to 28 years with 56%
followed by age group of 29 to 38 years with 18%.

• The male consumers capture the Market share with 74%, followed by the female
consumers with 26%.

• The majority of the consumers of life insurance policies are private employees
with 48% and Government employees with 40%.

• The dominant income group having life insurance group belong to the group of
5001 to 10,000 followed by 10,001 to 15,000.

• LIC has a major market share of 78%.

• The factors which influenced to buy life insurance policy is the personal factor,
followed by family, friends, agents and advertisements.

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• The value of respondent’s life insurance policy costs more than 5,00,000
followed by 1, 00,000 to 5, 00,000.

• Majority of the people (52%) prefer to invest in bank others (48%) prefer to
invest in insurance company.

• Majority of consumers are satisfied with the service and quality of products of
their life insurance companies.

• Majority of consumers (78%) would like to communicate the service offered by

life insurance companies.

• Majority of consumers (58%) are aware about less than 5 life insurance
companies.

• LIC stands first followed by ICICI prudential, followed by HDFC Standard Life.

5.1 HYPOTHESIS TESTING:

In this study “The Perception Of Investors Investing In Life Insurance In India” the
sample size was 50 respondents.
The Null Hypothesis (H0) states that most people prefer investing in Life
Insurance Corporation among other life insurance companies.
The Alternate Hypothesis (H1) states that people prefer investing in other life
insurance companies rather than LIC.
According to the data collected from respondents LIC has 78% of major market
share and it is ranked 1st among other insurance companies.
It can be clearly said from the data collected that most people prefer LIC in India
among other insurance companies.
Respondents who invested in LIC 94% of them are satisfied with the services
offered by Life Insurance Corporation.

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 ( . )( . )

If Zcal is greater than Ztab then Null hypothesis is rejected and if Zcal is less than
Ztab then the null hypothesis fails to be rejected.

N = total number of respondent (sample size)

X = number of people who prefers investing in Life Insurance Corporation.

( . )( . )

Zcal=3.9594 is greater than Ztab= 1.645

Using the P-value approach it is concluded that we accept the Null
Hypothesis (H0) i.e. most people prefer in investing in LIC India among
other life insurance companies.

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 ANNEXURE: (QUESTIONNAIRE)
TO STUDY THE PERCEPTION OF
INVESTORS INVESTING IN LIFE
INSURANCE IN INDIA
1. Name:
2. Age:
3. Gender:
4. Occupation:
5. Monthly income:
 <5000
 5001-10,000
 10,000-15,000
 15,001-20000
 20,001-25,000
 >25,000
6. What factors do you consider while buying a life insurance policy?
 Premium Outflow
 Company Reputation
 Service Quality
 Product Quality
 Return on Investment
7. What factors influenced to buy Life Insurance Policy?
 Personal interest
 Friends Family
 Agents
 Advertisements
 others
8. What is the value of your life insurance?
 >10,000
 10,000-25,000
 25,000-50,000
 50,000-1,00,000
 >1,00,000

9. Do you prefer to invest your money in a Insurance company or in a Bank?

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  Insurance Company
 Bank
10. Do you have a Life Insurance Policy with any of these Life Insurance
Company?
 LIC
 HDFC
 ING VYSYA
 MET LIFE INDIA INSURANCE
 BAJAJ ALLIANZ
 ICICI Prudential
 TATA AIG
 Others
11. Are you satisfied with your current Life Insurance Company?
 Yes
 No
12. How do you rate the service offered by your Life Insurance Company?
 Excellent
 Very Good
 Good
 Average
 Poor
13. Would you like to communicate the service offered by your Life Insurance
Company to others?
 Yes
 No
14. How many Life insurance Companies do you know?
 <5
 5-7
 8-10
 >10
15. Any suggestions for improving the service offered by life insurance
Companies.

93
 LIST OF TABLES
SR.NO LIST OF TABLES PG.NO
1. AGE OF RESPONDENTS 60
2. GENDER OF RESPONDENTS 62
3. OCCUPATION OF RESPONDENTS 64
4. INCOME LEVEL OF RESPONDENTS 66
5. ATTRIBUTES FROM RESPONDENTS 68
6. FACTORS WHICH INFLUENCED TO BUY LIFE 70
INSURANCE POLICY
7. VALUE OF LIFE INSURANCE POLICY 72
8. PREFERENCE TO INVEST THEIR MONEY 74
9. MARKET SHARE OF DIFFERENT COMPANIES 76
10. RESPONDENTS SATISFIED WITH CURRENT LIFE 78
INSURANCE POLICY
11. RATING OF SERVICES OFFERED BY YOUR LIFE 80
INSURANCE COMPANY
12. INSURANCE COMPANY PREFFERED BY 82
RESPONDENTS
13. RESPONDENTS WILLINGNESS TO COMMUNICATE 84
THE SERVICES OFFERED BY THEIR LIFE
INSURANCE COMPANY

14. NUMBER OF LIFE INSURANCE KNOWN BY 86

RESPONDENTS

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 LIST OF GRAPHS
SR.NO LIST OF GRAPHS PG.NO
1. AGE OF RESPONDENTS 61
2. GENDER OF RESPONDENTS 63

3. OCCUPATION OF RESPONDENTS 65
4. INCOME LEVEL OF RESPONDENTS 67
5. ATTRIBUTES FROM RESPONDENTS 69
6. FACTORS WHICH INFLUENCED TO BUY LIFE 71
INSURANCE POLICY

7. VALUE OF LIFE INSURANCE POLICY 73

8. PREFERENCE TO INVEST THEIR MONEY 75
9. MARKET SHARE OF DIFFERENT COMPANIES 77
10. RESPONDENTS SATISFIED WITH CURRENT LIFE 79
INSURANCE POLICY

11. RATING OF SERVICES OFFERED BY YOUR LIFE 81

INSURANCE COMPANY

12. INSURANCE COMPANY PREFFERED BY 83

RESPONDENTS
13. RESPONDENTS WILLINGNESS TO COMMUNICATE 85
THE SERVICES OFFERED BY THEIR LIFE
INSURANCE COMPANY

14. NUMBER OF LIFE INSURANCE KNOWN BY 87

RESPONDENTS

95
 BIBLIOGRAPHY
WEBSITES :-

WWW.GOOGLE.COM

WWW.LIC.COM

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