Investors Behavior Towards THe

Life Insurance Of India

Submitted To:
Kurukshetra University,
Kurukshetra
In partial fulfillment of the degree of
Master OF Business Administration
(Session- 2007-2009)

Under the Guidance of:

Submitted by:
Mr.Rasjesh Gupta Pallavi Rani
Administrative officer M.B.A. Final
LIC (Panipat Branch-I)

MAHARAJA AGRASEN INSTITUTE OF

 MANAGEMENT& TECHNOLOGY
JAGADHRI-135003

PREFACE

“No one can understand the importance of training as a part of ongoing

process to enrich knowledge and skill and levels of oneself”

Management training, however has gained rapid importance only

recently. Management was previously considered as an inborn talent but
in today’s developing world this view has been abandoned.

To develop managerial capabilities and to supplement theoretical

knowledge with practical experience, the management students are
required to go for training in business organizations.

I undertook Two-Months training in LIC of India Panipat Branch-I Here, I

gave a project on “INVESTORS BEHAVIOUR TOWORDS LIC OF
INDIA”This training report is the knowledge acquired during that practical
trai

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 ACKNOWLEDGEMENT

I wish to express my sincere gratitude to Mr. S.k. Saini (Branch Manager LIC
Panipat Branch-I) for giving me the opportunity to do my summer training at his
highly esteemed Organization.
I am grateful to Mr. Rajesh Gupta (Administrative Officer) & Mr. Basant Ballabh
(Assistant Branch Manager) for their Valuable guidance, advice, suggestion and
constant encouragement rendered to me at every stage.
I am also thankful to each and every employee of LIC of India Panipat branch-I for
giving me information and guidance during my training period.
I am also grateful to Dr. Raj Kumar Goel, Hon. Director MAIMT, who was
always there to give my spirits a boost.

Last but not the least; I would like to thank the Almighty God for his
blessings showered on me during the project report.

PALLAVI
RANI

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 M.B.A.
Final
MAIMT

DECLARATION

I,PALLAVI RANI, here by declare that the project report, titled

“INVESTORS BEHAVIOUR TOWARDS LIC OF INDIA” for the partial
fulfilment of the degree of “Master of Business Administration” from
Kurukshetra University, is an original work of mine and the data provided
in the study is authentic, to the best of my knowledge.

This study has not been submitted to any other instead of LIC of India
Panipat Branch-I or other university for award or any other degree.

PALLAVI RANI

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 CONTENTS

1. EXECUTIVE SUMMARY 6
2. INTRODUCTION 8
3. RESEARCH METHODOLOGY 14

 OBJECTIVE OF STUDY
 SIGNIFICANCE OF SYUDY
 RESEARCH DESIGN
 SCOPE OF STUDY
 DATA COLLECTION SOURCES
 SAMPLING DESIGN
 LIMITATIONS
4. INDUSTRY PROFILE 20
5. COMPANY PROFILE 23
 SWOT ANNAYSIS

6. DATA ANALYSIS 33
7. FIDINGS 46
8. CONCLUSION
9. SUGGESTION 48
10. BIBLIOGRAPHY 49
11. APPENDIX

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  QUESTIONNAIRE 50

Executive Summary

“Insurance may be defined as a social device whereby a large group of

individual, through a system of equitable contributions, may reduce or
eliminate measurable risk of economic loss common to all members of the
group.”
Encyclope
dia Britannica

“Insurance is a contract by which one party, for a consideration called

premium, assumes a particular risk of the other party and promises to pay
him or his nomine a certain or ascertainable sum of amount on a specified
contingency.”
E.W
. Patterson

We all are exposed to various risks in our daily life. Even the wisest and
cleverest person cannot provide for or avoid all risks. A risk involves loss.
Not all, but most of the losses can be expressed in terms of money. A
person exposed to some risk may incur a loss. If loss is small he may bear it
alone. If loss is huge he may not be able to bear it alone. However, it will be
better if a device or system is developed to provide help to those who
happen to suffer a loss. Such a device is “insurance.”

This title of this project carried out in summer training is “INVESTORS

BEHAVIOR TOWARDS THE LIFE INSURANCE CORPATION OF INDIA”

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The training was completed at LIC of India, Branch office, krnal. A
comprehensive study is made on the investors’ preference towards Life
insurance companies. A survey is then conducted to study the satisfaction
level of the investors’ with the Life Insurance Corporation of India. This
feedback has helped to give suggestions to the company to make
improvements in their process.
Following a correct research methodology is imperative for every research.
In order to get the right facts and findings, Descriptive Research Design has
been used. This research design facilitates the study as it is based on the
description of state of affairs as it exists in present. And in this as I have

Analyzed and described the investors’ behavior, this research design is the
most appropriate.I was given the opportunity to carry out different PS
(People Service) operation myself which facilitated my observations for the
description of the process. The descriptive research design has also helped
me to give the suggestions for improvement by carrying out a research with
the local residents of karnal. A sample of 100 has been taken on which the
research had been conducted. The questionnaire is designed keeping in
view different parameters on the basis of which the feedback can be taken.
The sample design consists of Random Sampling. The data has been
collected from primary as well as secondary sources with my own
observation, company’s database and the questionnaire being the most
important data collection tools.

The implications of this study have been positive for LIC. Though there are
certain areas in which improvements are possible but overall most of the
customers are satisfied and have a positive attitude towards the LIC. This
research has come through with the contributions of a number of people
without whose support probably this study would not have been completed.

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 INTRODUCTION
 Insurance

Every asset has a value for its owner and also for those who are benefited
with the existence of that asset. Insurance is concerned with the provision of
economic value of asset.

All of us are interested in the creation of assets because:-

All assets have value. They yield income to the owner. They meet some
other needs of the owner. They may provide satisfaction of some needs and
also yield income to the owner.

Under the life insurance, the insurance company to pay, in consideration of a

regular premium, a certain sum of money to the policy holder on his attaining
a certain age, or to his nominee on his death, whichever is earlier. Life
insurance is also known as Assurance because sooner or later the amount
of the policy must be paid.

Definition
In the words of D.S. Hansel, “Insurance is accumulated contributions of all
parties participating in the scheme”

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 Life Insurance

Life insurance is a contract that pledges payment of an amount to the person

assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

• The date of maturity, or

• Specified dates at periodic intervals, or

• Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of premium
periodically to the Corporation by the policyholder. Life insurance is
universally acknowledged to be an institution, which eliminates 'risk',
substituting certainty for uncertainty and comes to the timely aid of the family
in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilization’s partial solution to the problems
caused by death. Life insurance, in short, is concerned with two hazards that
stand across the life-path of every person:

1. That of dying prematurely leaving a dependent family to fend for itself.

2. That of living till old age without visible means of support.

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Life Insurance vs. Other Savings

Contract Of Insurance:

A contract of insurance is a contract of utmost good faith technically known

as uberrima fides. The doctrine of disclosing all material facts is embodied in
this important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in
the proposal form are correctly answered. Any misrepresentation, non-
disclosure or fraud in any document leading to the acceptance of the risk
would render the insurance contract null and void.

Protection:

Savings through life insurance guarantee full protection against risk of death
of the saver. Also, in case of demise, life insurance assures payment of the
entire amount assured (with bonuses wherever applicable) whereas in other
savings schemes, only the amount saved (with interest) is payable.

Aid To Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments

can be made effortlessly because of the 'easy installment' facility built into
the scheme. (Premium payment for insurance is either monthly, quarterly,
half yearly or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides
a convenient method of paying premium each month by deduction from

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one's salary. In this case the employer directly pays the deducted premium
to LIC. The Salary Saving Scheme is ideal for any institution or
establishment subject to specified terms and conditions.

Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any

policy that has acquired loan value. Besides, a life insurance policy is also
generally accepted as security, even for a commercial loan.

Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and
wealth tax. This is available for amounts paid by way of premium for life
insurance subject to income tax rates in force.
Assesses can also avail of provisions in the law for tax relief. In such cases
the assured in effect pays a lower premium for insurance than otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different

plans can be effectively used to meet certain monetary needs that may arise
from time-to-time.
Children's education, start-in-life or marriage provision or even periodical
needs for cash over a stretch of time can be less stressful with the help of
these policies.
Alternatively, policy money can be made available at the time of one's
retirement from service and used for any specific purpose, such as,
purchase of a house or for other investments. Also, loans are granted to
policyholders for house building or for purchase of flats (subject to certain
conditions).

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Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.

Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant
factors are considered by the Corporation.

Purpose and Need for Insurance

 Assets are likely to be destroyed or made non- functional due

to accidental occurrences called perils. Assets can, therefore,
be insured.
 Possibility of damage to asset caused by a peril is the risk that
asset is exposed to.

 Risk means uncertainty or unpredictability about future loss or

damage, which may or may not happen. This refers to the
losses, which may happen suddenly and unexpectedly.

 This is because of uncertainty about the risk that insurance

plays a role.

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  Insurance becomes relevant only if there are uncertainties of
occurrence of event leading to losses. Insurance is done
against the contingency of the happening of such events.

 No uncertainty- No Insurance.

 Why Life Insurance

Life Insurance has come a long way from the earlier days when it was
originally conceived as a risk covering medium for a short period of time,
covering temporary risk situations, such as sea voyages. As life insurance
became more established, it was realized what a useful tool it was for a
number of situations, including:-

a) Temporary needs/ threats:-

The original purpose of life insurance remains an important element, namely

providing for replacement of income on death.

b) Regular Savings:-

Providing for one’s family and oneself, as a medium to long term exercise.
This has become more relevant in recent times as people seek financial
independence for their family.

c) Investment:-

It is the building up of savings, to meet the sudden needs of the family and to
cope with inflation. It is a process of savings for the future needs and to
provide for risk cover.
d) Retirement:-

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Provision for later years becomes increasingly necessary, especially in a
changing cultural and social environment. One can buy a suitable insurance
policy, which periodically.

 Advantages of Life Insurance

 Life insurance is not merely an investment or a saving device-

much more than that.
 In any other investment or saving avenue, like bank deposit,
saving certificate, or mutual funds or shares and stock etc,
amount of funds available at any time will not be more than the
amount saved, appreciation or interest earned till then. In life
insurance, the amount available is the one that one wished to
have end of the saving period which may range upon 30 or
even more years.
 Life Insurance has advantages over the other forms of
savings :
• Facility of nomination and assignment makes the
claim settlement easy on death.
• Life Insurance involves compulsory saving.
• Tax benefits-on premium paid as well as amount
received by the way of claim.
• (Specified policies) Protected against court
attachment.
• Loans can be raised against a life insurance
policy.

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  Insurance Regulatory Development
Body (IRDA)

IRDA- Insurance Regulatory Development Body

 It is like Reserve Bank of India (RBI) which is the father of all banks.
All the banks are regulated by RBI and have to be maintained
according to it and can not go beyond its rules and regulations.

 Same is the case with IRDA, it is the regulating body over all the
existing insurance companies. It checks the proper working of all the
insurance companies and also checks that if the interest of the
customer is secured.

 IRDA Act passed in 1999 to allow and control Private Insurance

Business. IRDA as a regulating authority established by the
Government of India in 2000 to protect the interest of policyholders
and to regulate and promote orderly growth of Insurance Industry.

 IRDA registers a company only after satisfying itself with sound

financial condition, general character of management, capital
structure etc. of the promoters.

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 Every insurance company is to deposit 1% of Total Gross Premium in
RBI (maximum 10 Crores) every year. This sum is solely for meeting
liabilities arising out of policies issued by the company.

 Investment of funds is regulated by IRDA Act- Investment to be made

in Central and State Securities (minimum 50%) and balanced in
approved investments.

 Actuarial variation is to be done every year to see the Financial

Health of the Company.

 IRDA conducts surprise Inspections and Audit.

 Central Government can appoint an administrator of the company if

anything goes wrong.

 Submission of returns to the Central Govt. every year by the

company.

 A Life Insurance Company cannot be wound up voluntarily and

escape policy liability.

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RESEARCH METHODOLOGY
This chapter focuses on the methodology and the techniques used for the
collection, classification and tabulation of data. It shed lights on the research
problem, the objective of study and its limitations. The later part of this
chapter explain the manner in which the data is collected, classified,
tabulated and so as to reach on conclusive results. It is written game plan for
concluding research. There for to design a research problem it is necessary
to design a research methodology as the same may differ from problem to
problem.

To carry out this study descriptive research has been conducted to explore
the hidden fact about the insurance plans provided by the life insurances
companies. Exploratory study useful to narrow the scope of the study. Under
this study, survey method is employed to go inside the problems of the
respondents.

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Objectives of the study

 To study the awareness of the respondents about LIC of India.

 To study the most preferred plan of the LIC.

 To study the satisfaction level of the respondents with the company

plans & services.

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SIGNIFICANCE OF THE
STUDY
Life insurance is universally acknowledge being an institution which
eliminates risk, substitute certainty with uncertainty and comes to the timely
aid of the family in the unfortunate event of death of the bread wind by and
large. Life insurance is civilization partial solution to the problems caused by
death.

Customers are now looking at insurance as complete financial solution

offering stable returns coupled with the protection. Companies will need to
constantly innovate in terms of product development to meet the changing
consumer needs. This will provide valuable insight to the market on the level
of the brand consciousness among respondents and their awareness
towards various life insurance plans. This knowledge would enable company
to devise the marketing strategies based on the findings. Understanding the
customer better will enable the company to design appropriate product,
determine price correctly and increase profitability.

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  RESEARCH DESIGN

To carry out this study sample survey method has been employed. In this
method, information is gathered from a sample of people using a
questionnaire. This method is very useful in studying the relationship
among different factors, attitude and to explore the problems that can not be
treated by experimental method.

 SCOPE OF STUDY

The scope has been limited to sample size of 100 respondents due to time
and cost constraints. However, the area of study with respect to
geographical city of Karnal.

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  DATA COLLECTION SOURCES

For this project both primary and secondary data were the most valuable
source of information.
Secondary data:-
The data while is derived from someone else like books, Journal, Internet &
so on.
Secondary data provide a starting point for research and offer the valuable
source of information.
The secondary data was the most important source for my project because I
wanted to know about the top ten Insurance companies.

Primary data:-
Primary data are data freshly gathered for a specific purpose. For the
collection of primary data, the respondents were contacted personally and
the tool for gathering the data was the questionnaire.

 SAMPLING DESIGN

Sampling procedure refers to the procedure by which the respondents

should be chosen. In order to obtain a representative sample, convenience-
sampling method has been used in this study without any stratification to
obtain a uniform size of respondents.

a. Selection of Sample

Sample can ideally be selected as percentage of total population of

respondents to increase the accuracy and reliability of the sample. Hence, a

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 sample size of 100 respondents was appropriate to keep sample accurate
as well as manageable.

b. Sampling Unit

The unit refers to the definitions of the particular person who is to be survey.
In this study the unit is the respondents, which are operating in.
Sampling Size

This refers to the procedure by which we describe the total number of

respondents from whom the information is to be collected. Here I have select
120 respondents.

LIMITATIONS

I. The first and foremost limitation was time constraint was only few days but
still efforts have been made to put the picture as clear as possible.

II. The sample size is only 100 respondents, so the sample may not be truly
representative of the population.

III. Samples were selected as per convenience so errors are bound to creep in
the study.

IV. All the professionals & age group were not covered under the survey.

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INDUSTRY PROFILE

Insurance companies in India

Life Insurance Corporation of India was set up in 1956 to take over

around 250 life insurance companies. For years thereafter, insurance
remained a monopoly of the public sector. It was only after seven years
of deliberation and debate – after the R N Malhotra Committee Report of
1994 became the first serious document calling for the re-opening of the
insurance sector to private players – that the sector was finally opened
up to private players in 2001.
The IRDA, an autonomous insurance regulator set up in 2000, has
extensive powers to oversee the insurance business and regulate in a
manner that will safeguard the interest of the insured.
Before insurance sector was opened to the private sector Life Insurance
Corporation (LIC) was the only insurance company in India. After the

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opening up of Insurance sector in India there has been a glut of
insurance companies in India. These companies have come up with
innovative and flexible insurance policies to cater to varying needs of the
individual. Opening up of the Insurance sector has also forced the Lic to
tighten up its belt and deliver better service. All in all it has been a
bonanza for the consumer.

MARKET SHARE 2
K o t a k M a h i nd r a
O l d M u t ua l M et L
I NG V ys ya 0%
1%
T ata A I G 1%

M ax N ew Y or k 1%
1A%v i v a

1%
Major Life insurance Companies in India are:
B i r l a Su nl i f e

Sr. No. Re
Name ofl the 1%
i a nc e Li f e
Company
1%
H D F C St a n da r d
1 Bajaj Allianz Life Insurance Company Limited
2
2 % SB
Birla Sun Life Insurance I L
Co. if e
Ltd
3 HDFC Standard Life Insurance
3 % Co. Ltd
4 ICICI Prudential Life Insurance Co. Ltd.
B a j a j A l l i a nz
5 ING Vysya Life Insurance Company Ltd.
6 I C I C I P6r %
Life Insurance Corporation udIndia
of enti al

7 7 % Co. Ltd
Max New York Life Insurance
8 Met Life India Insurance Company Pvt. Ltd.
9 Kotak Mahindra Old Mutual Life Insurance Limited
10 SBI Life Insurance Co. Ltd
11 Tata AIG Life Insurance Company Limited

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12 Reliance Life Insurance Company Limited.
13 Aviva Life Insurance Co. India Pvt. Ltd.
14 Sahara India Life Insurance Co, Ltd.
15 Shriram Life Insurance Co, Ltd.
16 Bharti AXA Life Insurance Company Ltd.
17 Future Generali Life Insurance Company Ltd.
18 IDBI Fortis Life Insurance Company Ltd.
19 Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd

The market share of all the Indian insurance

companies for the year 2007-08 is as follows:

1. Bajaj
Allianz 6.98%
2. ING Vysya 0.76%
3. Reliance
Life 3%
4. SBI Life 5.15%
5. Tata AIG 1.04%
6. HDFC
Standard 2.88%
7. ICICI
Prudential 8.93%
8. Birla Sun 2.11%

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 life
9. Aviva Life 1.14%
10.Kotak
Mahindra 1.19%
11.MAX New
York 1.71%
12.MetLife 0.89%
13.Sahara
Life 0.13%
14.Shriram
Life 0.33%
15.Bharti
AXA 0.12%
16.Future
Generali 0.00%
17.IDBI Fortis 0.01%
63.64
18.LIC %

Note: Future Generali life insurance company had commenced

business during 2007-08.

Company Profile (2006-2007):

About LIC Of India:-

The Life Insurance corporation of India has been a nation- builder since its
formation in 1956 the performance of LIC has been exemplary and has been
growing from strength to strength be it customer base, agency network, branch
office network, new business premium and the like and has significant role in
spreading life insurance widely across the country. True to the objective of

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nationalization the LIC has mobilized the funds invested by the people for life
insurance for the benefit of the community at large. Today in the current scenario
our vision is to emerge as a world class customer centric organization.
Some highlights of their performance are as follows:
New Business During The year 1/4/2006 To 31/3/2007
(Individual Assurances)
Composite Polices (in lakh) Sum Assured(in First Premium
382.09 crore) Income(in crore)
3,03,115.54 39,541.58
Growth Rate 21.02% 5.42% 118.64%

Pension & Group Business & Social Security Schemes

Achievement from 1.4.2006 To 31.03.2007
Pension & Growth Rate Social Security Growth Rate
Group Schemes
Schemes
No. of New 84.02 64% 57.48 lac -9%
Lives
Premium 11282.58 188% 94.34 61%
Income( Rs. In
Crore)

Business in Force as On 31.3.2007

Polices (in Crore) Sum Assured(Rs. In
Crore)
Individual Assurances 21.26 15,90,877
Group Insurance(Lives) 4.19 3,24,716

Other Parameters 1/4/06 TO 31/03/07

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 (Rs. In Crores)

1. Total Income: Rs.1,74,424.76

2. Total Premium Income: Rs.1,27,782.26

3. Amount of claims paid: Rs. 36,537.22

4. Total Life Fund: Rs.5,60,806 (As on 31.3.07)

5. Total Assets: Rs.6,51,883 (As on 31.3.07)

PEOPLE'S MONEY FOR PEOPLE'S WELFARE

The Life Insurance Corporation of India has been a nation- builder since its
formation in 1956. True to the objectives of nationalization, the LIC has
mobilised the funds invested by the people in life insurance for the benefit of
the community at large.

The Corporation has deployed the funds to the best advantage of the
policyholders as well as the community as a whole, true to the spirit of
nationalisation. National priorities and obligation of reasonable returns to the
policy holders are the main criteria of our investments.
The total funds, so invested for the benefit of the community at large
accumulated to Rs. 6,13,266.58 crore as on 31st March, 2007. The
investment of the Corporation's funds is governed by Section 27A of the
Insurance Act, 1938, subsequent guidelines / instructions issued thereunder
by the Government of India from time to time, and the IRDA by way of
regulations. As per the prescribed investment pattern approved by
IRDA, the controlled funds are invested as follows:-
Not less than 50% is invested in Govt. Securities or other approved
Investments.

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Not less than 15% is invested in infrastructural and social sector
Investments.
Not exceeding 35% in others to be governed by exposure prudential norms.

IN VESTMEN TS IN G O VT. & SO CIAL SECTO R (Rs. In Crore)

As on
Type of Investment
31.03.05 31.03.06 31.03.07

01.CENTRAL GO VT.SECURITIES 199785 236959 272498

02. STATE GOVT. & OTHER GOVT..
GUARANTEED MARKETABLE SECURITIES 51303 58928 64285
03. INFRASTRUCTURE AND SO CIAL
SECTO R INVESTMENT
a) HOUSING 16570 19807 22451
b) POWER 22439 29740 37881
c) IRRIGATIO N/ WATER SUPPLY & SEWARAGE 8807 8288 7500
d) RO AD,RAILWAYS ,PO RT & BRIDGES 826 725 1516
e) OTHERS. 4272 3954 4398

TOTAL 304002 358401 410529

SOME POPULAR POLICES

OF LIC
1. Money Back.
2. Endowment Policy
3. Jeevan Surbhi.
4. Jeevan Shree.
5. Pension Plans like.
 Jeevan Surkasha (revised).
 New Jeevan Dhara.
 New Jeevan Aksay.
6. Whole Life Policy.
7. Ulip Policy.
8. Bima Kiran.
9. Bima Nivesh.

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 10. Bima Plus.
11. Children Plan.
 Jeevan Kishore.
 Komal Jeevan.
 Children Money Back.

Some New product

launches
1. New Bima Gold

2. Gratuity Plus

3. Jeevan Madhur (Micro Insurance)

4. Market Plus

5. Child Career Plan & Child Future Plan.

6. Jeevan Amrit

7. Fortune Plus

8. Profit Plus

CLAIM SETTLEMENT PERFORMANCE (2006-2007)

1. Total Claims Settled – Over 132 lakh claims.

2. LIC settles over 45600 claims every working day i.e.2.21 claims per
second.

3. 96.99% of Maturity Claims are settled on or before the date of

maturity.

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 4. 92.06% of Non-early Death Claims are settled within 20 days of
intimation.

5. O/s Claims Ratio – (Maturity + SB) is 0.07 %, Death Claims is

2.03 %

VISION:-
"A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India."

Mission
"Explore and enhance the quality of life of people through financial security
by providing products and services of aspired attributes with competitive
returns, and by rendering resources for economic development."

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Organizational structure of LIC

- 32 -
 Central
Office

Zonal
Offices

Division Division Division

al Office al Office al Office

Branch Branch Branch

Offices Offices Offices

Satellite Satellite
Satellite
Sampark Sampark
Sampark
Offices Offices
Offices
(SSO’S) (SSO’S)
(SSO’S)

LIC Operate all over India

- 33 -
- 34 -
 SWOT ANALYSIS

STRENGTHS:-

 Brand Name of LIC:-The name of the LIC is known in all over the
country as number one insurance company in the market and this
is the name which people have trusted for many years. LIC has
been awarded as the “MOST TRUSTED SERVICE BRAND” for five
continuous years.
 STRONG FINANCIAL BACKING: - The LIC had a strong financial
backing which helps the company to build trust in the mind of the
people.
 CLAIM SETTLEMENT: - LIC has best claim settlement ratio. It is
approximately 98% as compared to other private players.
 EDMS (Enterprise Document Management System) Project:
- This project is being implemented by LIC in phase manner and by
completing this project the office will be paperless.
 STRONG SALES FORCE: - The Company has a very strong sales
force of good marketing brain, which gives an edge over the other
competitor especially our immediate competitors like HDFC
Standard and ICICI Prudential insurance company. And secondly it
has a very good distribution channel which helps the company to
get more clients from these reliable sources. These channel
include

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 Banks like

 Central Bank of India

 Indian Overseas Bank

 Corporation Bank

 UCO Bank

 Allahabad Bank

 Dena Bank

Strong Marketing and Sales Promotion team

 ULIPs: Almost 70% of the total business of LIC is the business with
the sale of ULIPs and only 30% of the products are the traditional
insurance policies. So this is the strength on which LIC can work
upon more to get the maximum positive results.

WEAKNESS:-
 Most of the Plans are too complicated: - Some of the
insurance plans are too complex to understand for a layman, and
this makes most of the people to avoid such plans because they
feel difficulties to understand. The same is in the case of Mutual
Funds.
 E-Banking: - LIC has not started e-banking on a very large scale
though the concept is good and very popular.
 Lack of movement of field staff:- Some of the agents are
doing part- time business, as a result they cannot give their full
contribution to their work which results in less new business to LIC.
 Lack of knowledge of new technology:- Agents as well as
customers are not aware about new technologies and facilities
provided by LIC due to their ineffective implementation.

- 36 -
 OPPORTUNITIES:-
 CLIAs’:- The new concept of CLIA (Chief Life Insurance Advisor)
has been introduced by LIC which authorizes its club members to
recruit/sponsor new agents and accordingly train them for bringing
the new business. This is one of the alternate channels from which
LIC is expecting good business.
 Financial service executive: - An alternate channel enforces
their team with young and enthusiastic people who are specifically
appointed to support Public sector Banks to procure business as a
corporate agent in the insurance sector.
 Huge untapped Market:- Huge market is literally untapped out
of estimated 320 million is usable markets only 20% of the
population is insured.

THREATS:-
 Threat with some private companies: - There are some private
companies which are providing good services to their customers
and slowly taking away a good market share.

- 37 -
 DATA ANALYSIS &
INTERPRETATION

Q.1 Do you have life insurance policy?

1. Table

Insurance Policy No. of respondent Percentage

Yes 100 83
No 20 17

- 38 -
 17%

yes
no

83%

Interpretation

According to my study 83% people covered under the life insurance it

might be both public as well as private.

Q2. If yes, then who is your insurer?

2. Table

Insurer No. of respondent Percentage

LIC 57 57
HDFC 23 23
ICICI PRUDENTIAL 8 8

- 39 -
OTHERS 12 12

57
60
50
40
30 23 S eries 1
20 12
8
10
0
LIC HDFC ICICI Others
P RU.

Interpretation

Above table shows that 57% respondents insurance with LIC and rest 43%
insurance with HDFC, ICICI Pru. & others.

Q3.What was or will be the purpose of you being taking an

insurance policy?

- 40 -
 3. Table

Choice No. of %age

Respondents
Saving 60 60
Risk Coverage 25 25
Tax Benefits 15 15

N o . o f R e s p o n d e n ts

15%
S a vin g
R is k C o ve ra g e
25% 60% Ta x B e n e fit s

Interpretation

Mostly people have policy for the purpose of saving.

- 41 -
Q4. If choice is given to you, in which you will invest first?

4. Table

Choice No. of %age

Respondents
FD 33 33
Post Office 20 20
Insurance 43 43
NSS/ NCC 0 0
Shares 4 4

50
43
45
40
No. of respondent

33
35
30
25 20 No. of Respondents
20
15
10 4
5 0
0
e
FD

es
C
ce

nc

NC

ar
ffi

ra
O

Sh
S/
su
st

NS
In
Po

Choice

Interpretation

- 42 -
The above graph shows that the investors when given choice
generally like to invest in insurance then FD and others.

Q5. Who is your consultant while investing in any insurance

plan?

5. Table

Option No. of %age

Respondents
Professional 25 25
Friend/ Relative 65 65
Family Agent 10 10

No. of Respondents

10% 25%
Professional
Friend/ Relative
Family Agent
65%

Interpretation

Mostly investor consult friends/ relatives while investing any insurance plans.
Q6. What is your occupation?

6. Table

- 43 -
 Occupation of Respondent

Occupation No. of %age

Respondents
Govt. Job 37 37
Private Job 32 32
Self Employee 31 31

No. of Respondents

31% 37% Govt. Job

Private Job
Self Employee
32%

Interpretation

Mostly those people who is in Govt. job like to invest in insurance

Q7. Which plan you have taken?

7. Table

- 44 -
 Preferred Plans
Plans No. of Respondent Percentage
Endowment Plan 23 23
Children Plan 10 10
Pension Plan 12 12
Money Back Plan 30 30
ULIP Plan 20 20
Others 5 5

35 30
30
No.of Respondent

25 23
20
20
Series1
15 12
10
10 5
5
0
an
n

an

s
an
la

an

er
Pl

Pl

Pl
tp

th
Pl
n

O
en

ck
re

io

IP
Ba
m

ns
ld

UL
i
w

Ch

Pe

ey
do

on
En

Plans

Interpretation Above table shows that investors give more

preferences to money back plan after that endowment plan than ULIP and
than others.

Q.8.Please tick the policies to which you are familiar?

8. Table

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Plans No. of Respondent percentage
Endowment Plan 24 24
Money back Plan 33 33
Pension Plan 12 12
ULIP Plan 21 21
Children Plan 10 10

35 33
30
24
Respondents

25 21
20 Series1
15 12 Series2
10
10
5
0
n

an
an
an
an
la

pl
pl
pl
pl
tp

n
IP
on
ck
en

re
UL
ba

i
m

ns

ld
i
w

Pe

Ch
ey
dp

on
En

plans

Interpretation The above table shows that the awareness of people

regarding invest in money back & Endowment plan is maximum while they
have less knowledge about pension & children plan.
9. Are you satisfied with the services of your insurance
company?

9. (I) Table

LIC of India
Response No. of %age

- 46 -
 Respondents
Yes 46 81
No 11 19
Total 57 100

19%

yes
no

81%

9. (ii) Table

HDFC
Response No. of %age
Respondents
Yes 10 43

- 47 -
 No 13 57
Total 23 100

43%
yes
no
57%

- 48 -
9. (iii) Table
ICICI
Response No. of %age
Respondents
Yes 3 38
No 5 62
Total 8 100

38%
yes
no
62%

- 49 -
 Others
Response No. of %age
Respondents
Yes 3 33
No 6 67
Total 12 100

9. (IV) Table

33%

yes
no

67%

- 50 -
Interpretation

The above tables depict that the maximum investor satisfy with the services
given by LIC of India and mostly investor dissatisfy with the services given
by the ICICI , HDFC and others.
Q10. Should life insurance be made compulsory?

10. Table

INSURANCE SHOULD BE COMPULSORY OR NOT

Response No. of %age
Respondents
Yes 57 57
No 43 43

No. of Respondents

43%
Yes

57% No

- 51 -
Interpretation
People are not much aware about life insurance factors. So only 57% people
are agree with necessity of life insurance and 43% simply refuses the
requirements of life insurance.

FINDINGS

1.) 2.Table show the preference of the people who had invested in the
insurance sector, and from the chart it is very clear that LIC is the leading
company in this field, because of many factors such as:-.
 LIC is leading in this field mainly, because it is the first mover in the
insurance sector and had capture most of the market by being first
mover in this sector
 LIC had provided better service in the past which had made trust in
the mind of the people and for that reason they feel more comfortable.
 HDFC and ICICI Pru are the second in this field mainly because they
had opened their branches recently and slowly they are capturing the
market and in the future the ratio is decrease, because there are
many opportunity to cash in by both the company .
2) By the study we come to know that maximum people are looking for
saving coverage then looking for risk coverage and tax benefits.

3) Friends / Relative 65% are the best resource for the financial
consultancy then high status family are talking about professional
qualified person 25% then respective family agent 10% the resource.

- 52 -
 4) People are not much aware about life insurance factors. So only
57% people are agree with necessity of life insurance and 43% simply
refuses the requirements of life insurance.

5) 81% people are satisfied with the services provide by LIC but still
rest 11% are not satisfied. (Table 9).

6.) I found that maximum people preferring Money Back Plan then
Endowment plan then ULIP then Pension Plan then Children
Assurance Plan and then Others plan.

CONCLUSION

1. Brand Name of LIC:-The name of the LIC is known in all over the country as
number one Insurance sector and this is the name which people have trusted for
many years,. So LIC, do not have the crises of the brand name.
2. LIC of India has good market image and thus attract more customers.

3. LIC had a very good network of agents, and those are the back bone of
the company.
4.Customer perception about the security of money invested is that public
sector is safer for insurance.
5. Popular Plan: Money Back, Endowment & ULIP.

- 53 -
 SUGGESTIONS
Awareness of customer is very low in India. Even educated person are
ignorant about various products of insurance.

I. Company should have make endeavour in this context like Advertisement.

II. Give assurance to people that they will go any where we take care of their
money, because this is regulated by IRDA and back up by RBI.

III. Company should provide more benefits with their products like Major
Surgical Benefits and Income Benefits.

IV. Company’s should open customer service points in rural areas also.

V. Company should advertise its plans in Local News Papers to attract the
rural market.

VI. Investors which are not satisfied with the services of LIC same important
which should be satisfied later on by providing to the best services.

- 54 -
BIBLIOGRAPHY

Books

 Zikmund, William, business Research Methodology.

 Batra K Satish & Kazmi (Consumer Behavior)
 IC33,Life Insurance prepared with the assistant of
S.Balachandran.
 Ready Recknor LIC Plans

Internet Website

 www.licindia.com
 www.google.com

- 55 -
  www.bima.com

QUESTIONNAIRE

Name………….. Age
……………………..

Male/Female………
……….. Contact No…………..

Income……………………
Address………………………

…………………………
……………

Q.1 Do you have life insurance policy?

a) Yes b) No

- 56 -
Q2. If yes, then who is your insurer?

a) LIC…… b) ICICI…… c) HDFC SLI…… d) Others……..

Q3.What was or will be the purpose of you being taking an

insurance policy?

a) Saving…… b) Risk Coverage…… c) Tax Benefits……

Q4. If choice is given to you, in which you will invest first?

a) FD… b) Insurance..... c) Post office……d) NSS/NCC.....

e) Shares…… f) any other……

Q5. Who is your consultant while investing in any insurance plan?

a) Professional…b) Friend/Relative… c) Family… d) Agent……

Q6. What is your occupation?

a) Govt.Job… b) Private Job… c) Self Employee… d) Any other...

Q7. Which plan you have taken?

- 57 -
a) Endowment Plan…b) Children Plan…c) Pension Plan…

e) d) Money Back Plan…e) ULIP Plan…. f) Any other…

Q.8.Please tick the policies to which you are familiar?

a) Endowment Plan….. b) Money back Policies… c) Pension Plan

d) ULIP Plan….. e) Children Plan…….

Q9. Are you satisfied with the services of your insurance

company?

a) Yes……. b) No……

Q10. Should life insurance be made compulsory?

a) Yes…… b) No……

Q.11.Any suggestion would you like to give your insurer

company?
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………

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……………………………………………………………………………
………………………………………………………………….

(Signature)

- 59 -