Raykar Manjunath-0368-Kotak Life Insurance

Consumer Perception Towards Life Insurance
A study on Customer Perception Towards Life Insurance

Kotak Life Insurance
BANGALORE.
A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE AWARD OF
MBA DEGREE OF BANGALORE UNIVERSITY.
SUBMITTED BY
Raykar Manjunath
Reg. No – 03XQCM6081
UNDER THE GUIDANCE OF
Prof.Sumithra Srinath Mr.Girish Kumar D.V

PROFESSOR, & Sales Manager
MPBIM Kotak (India)
(EXTERNAL GUIDE)
M. P. BIRLA INSTITUTE OF MANAGEMENT

(ASSOCIATE BHARATIYA VIDYA BHAVAN)
#43, Race Course Road, BANGALORE – 560001
Tel: 080-22382798, 080-22389635
(2003-2005 Batch)
M.P Birla Institute of Management 1

(Associate Bharatiya Vidya Bhavan)
Executive Summary
Kotak life insurance has core competence in selling and has a very aggressive sales team.
Since it is a service industry where world of mouth is very important. A negative world of
mouth may remove 10 existing customers on the other hand a positive word of mouth may earn
10 customers. So service should be targeted at a level, which not only should meet the
customer’s expectation but also exceed it.
However understanding the market, consumer preference and introducing new products to
suit different tastes and at the same time offering a value product would be the key steps to fight
competition.
Marketing is an important activity in any organization’s sales strategy. Marketing helps

in promoting the products in the targeted market and create a recall value and branding to the
products. Marketing department perform the initial market study for the suitability of product
launches; study the market requirements in the existing markets to futher strenthen the market
capitalization and identity the feature needed for a longevity of a product.
Research Technique Used:

Marketing Research, which has to be, used systematic designing collection, analyzing
and reporting of data finding relevant to specific marketing situation facing the company.
The following instruments was used in analyzing the data collected from primary and
secondary methods
1. Percentage analysis, waited average
2. Pie diagrams and charts
The Actual collection data was done using the following procedures:
Primary Data – Questionnaire and Interviews
Secondary Data – Records, Trade Journals and Websites
All Primary Data used for analysis were collected from Bangalore

Problem Statement
The problem includes competition presence from multiple companies and dynamic
market conditions. When Kotak started its operation in Bangalore from 2002 the market
was dominated by LIC, ICICI & Birla sun life.
Kotak has core competence in selling & have a very aggressive sales team. Since
it is service industry where word of mouth has a lot of importance, a negative word of
mouth may be removing over 10 existing customers & on the other hand positive word of
mouth may earn 10 companies.
So service should be targeted at a level, which not only meet customer

expectation, but also exceed it.
However understanding the market consumer preference, market potential and

introducing new products to suit different tastes and at the same time offering a value
product would be the key steps to fight competition.

Objective of the Study
• To understand the preference and perception of consumer.

• To examine the variable influencing the consumer buying behavior of insurance product.
• To study the market potential for these products offered by various insurance companies.
• To identify the position of Kotak in consumer needs.
• To understand the purchase behavior towards insurance products.
• To evaluate the impact of advertisement of potential buyers.
• To offer suggestions based upon findings.

Importance
Insurance industry has been undergoing a great transformation during the last decade.
There is a great focus with in the insurance industry to consolidate to provide better
Customer service in order to help these insurance companies in achieving their objectives.
These objectives of this study when translated into action items provide a tremendous
financial and market opportunities.

Introduction to the Life Insurance Industry
Human have always sought security. This quest for security was and important motivating
force in the earliest formation of families, clans, tribes, and other groups. Indeed, groups have
been the primary source both emotional and physical security since the beginning of humankind.
They ensured a less volatile source of life necessities then that which isolated humans & families
could provide & help their less fortunate members in the time of crisis.
Humans today continue their quest to achieve security & reduce uncertainty. We still rely
on groups for financial stability. The group may be our employer, the government, or an
insurance company, but concept is the same. In some ways however, we today are more
vulnerable than our ancestors. The physical & economical securities formerly provided by the
tribe or extended family diminished with industrialization. Our income dependent, wealth
acquiring lifestyle renders us and our families more vulnerable to environmental & societal
changes over which we have no control.
Humans are exposed to many serious perils, such as property loss from fire or windstorm,
and personnel losses from incapacity & death. All though individual cannot predict or
completely prevent such occurrences, they can provide for their financial effects.
Encyclopedia of finance & banking defines insurance as the elimination of or protection

against risk amenable to actual calculation, voidance or reduction of losses occurring through
misfortunes such as death, fire, accident, tornado, shipwreck, etc.
Insurance is a contact between an insurer and the insured where by the insurer identifies
the insured against loss due to specific risks such as from fire, storm and death. Insurance
contracts require an agreement, considerations, capacity, legality, compliance with the statute of
frauds, and delivery. Insurance is an integral part of most enterprises, risk management program.
Insurance does not prevent losses, it substitutes a small certain loss (premium) for a
possible or contingent large loss. The insured is indemnified for the amount of loss, for the
insured amount, or for the face of his policy, in return for payment of periodic premiums.

The principal kinds of insurance are the following.
1. Life – Term, ordinary, endowment, limited payment, group industrial and annuities, with
a variety of combinations of the first four basic forms.
2. Fire & Marine - Fire, ocean marine, motor vehicle, inland navigation and transportation,
tornado and windstorm, sprinkler leakage, earthquake, riot and civil, commotion,
explosion, rain, hale, flood, aircraft, etc.
3. Causality and Surety – Automobile liability, liability other than automobile workers
compensation fidelity and surety, burglary and theft, automobile property damage,
accident in health, steam boiler, machinery, plate glass, etc.
All mutual & legal reserve life insurance companies provides for a participation in
dividends by all policyholders. In this way, the cost of insurance to the insured is reduced.
Insurance History:
Insurance Business:
Insurance business is divided into four classes:
1. Life Insurance.
2. Fire Insurance
3. Marine Insurance
4. Miscellaneous Insurance.
History and present status of insurance market in India
The insurance sector in India has come a full circle from being an open competitive
market to nationalization and back to a liberal and zed market again. Tracing the developments
in Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two
countries.

Brief history of the insurance sector
I918 Oriental Life Insurance Company was established.
1912 The Indian life assurance companies’ act enacted as the first statue to regulate the life
insurance business.
1928 The Indian insurance companies act enacted to enable the government to collect statistcal
information about both life and non life insurance businesses.
1938 Earlier legislation consol dated and amended to by the insurance act with the objective of
protecting the interest of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central
government were nationalized.
Insurance sector reforms
In 1993 Malhotra committee, headed by former finance secretary and RBI governor R N
Malhotra, was formed to evaluate the Indian insurance industry and recommended its future
direct on. The Malhotra committee was set up with the objective of complimenting the reforms
initiated in the financial sector.
In 1994 committee submitted the report and some of the recommendation included.
1) Structure
a) Government stake in the insurance companies to brought down 50%.
b) Government should takeover the wordings of GIC and its subsidiaries, so that these
subsidiaries can act as independent corporations.
c) All the insurance companies should be given greater freedom to operate
2) Competitions
a) Private companies with a minimum paid up capital of Rs. 1 billion should be allowed to
enter the industry no company should deal in both life and general insurance through a
single entity.

b) Foreign companies may be allowed to enter the industries collaboration with the
domestic companies
c) Postal life insurance should be allowed to operate in the rural market.
d) Only one state level life insurance company should be allowed to operate in each state
3) Regulatory body
a) The insurance Act should be changed
b) An insurance regulatory body should be set up.
Life Insurers transact life insurance business; General Insurers transact the rest.
No composites are permitted as per law.
LEGISLATION (as on 1.4.2000):
Insurance is a federal subject in India. The primary legislation that deals with insurance
business in India is:
Insurance Act, 1938, and Insurance Regulatory & Development Authority Act, 1999.
Insurance Products
Life Insurance:
Popular Products: Endowment Assurance (Participating), and Money Back

(Participating). More than 80% of the life insurance business is from these products.
General Insurance:
Fire and Miscellaneous insurance businesses are predominant. Motor Vehicle insurance
is compulsory.
Tariff Advisory Committee (TAC) lays down tariff rates for some of the general
insurance products (please visit website of GIC for details)

Customer Protection:
Insurance Industry has Ombudsmen in 12 cities. Each Ombudsman is empowered to

redress customer grievances in respect of insurance contracts on personal lines where the insured
amount is less than Rs. 20 lakhs, in accordance with the Ombudsman Scheme. Addresses can be
obtained from the offices of LIC and other insurers
Need For Life Insurance
Self
Actualization
Needs
Self Esteem Needs
Belongingness Needs
Organizational
General Example Example
Stability Pension Plan

Safety Needs
Physiological Needs
Maslow’s Need Hierarchy Theory.
Making the person feel “SAFE” other expression of the need for safety occur when
individuals are confronted with real emergencies E.g., accidents, war, crime, natural disasters
like waves, floods, earthquakes etc. Once Physiological needs are met, another set of motives,

safety or security needs, become motivates. The primary motivating force here is to ensure a
reasonable degree of continuity, order, structure and predictability in once environment. Maslow
suggested that the safety needs are most readily observed in infants and young children because
of their relative helplessness and dependence on adults.
Security needs in the organizational context co-relate to such factors as job security,
salary increases, safe working conditions, unionization and lobbying for protective registration.
Risk and uncertainty are part of life great adventures accident illness, thefts, natural
disaster they are all built into the working of the universe, waiting to happen.
Insurance then is man’s answer to the vagaries of life. If you cannot beat the manmade
and natural calamities, wealth, at least be prepared for them and aftermath.
Insurance is contact between two parties one is insurer (insurance company) and the
insured (the person or the entity seeking the coverage). Where the insurer agrees to pay the
insured for the financial loses arising out of any unforeseen events in return for a regular
payment of the premium.
These unforeseen events are determined as “risk” and that is why insurance is called is
the risk cover. Hence the insurance is essential the means to financially compensate for loses that
life throws at people –corporate and otherwise.
India at a glance
Population : 1Billon
Economy : 5th Largest in the world in terms of purchasing

power parity (PPP)
GDP Growth Rate : Over 6% per year on an average for the last
decade.
Savings Rate : Around 26% of GDP
Estimated Middle Class Population : 300 Million
Insured Population : 70 Million

India has an enormous middle class that can afford to by life, health and disability and pens
on plan products. The low level of penetration of life insurance in India compared to other
developed nations can be judged by a comparison of per-capita life premium.
Global Life Insurance Trends.
Country Life premium per capita U.S $ in 1994
Japan 3,817
UK 1280
USA 964
India 4
Life Insurance Market In India
Who’s Going With Whom?
India Company Foreign Company

Kotak Mahindra Chubb
Tata Group AIG
Bajaj Allianz
Max India New York
IDBI Principal
SBI Alliance Capital
HDFC Standard Life
Cholamandalam Axa
ICICI Prudential
Vysa Bank ING
Spic MetLife
Sanmar Group GIO of Australia

Life Insurance Statistics.
Table Showing Premium Collection By Various Insurance Companies
Premium (Rs. in Mn.)
2003-04 2004-05 % Growth

Om Kotak 352.1 1271.2 260.98
Allianz Bajaj 633.89 1797.05 183.50
ING Vaysa 176.59 726.27 311.16
AMP Sanmar 63.15 278.82 341.51
SBI Life 718.81 1959.01 172.53
Tata AIG 522.08 1801.55 245.07
HDFC Standard 1293.14 2093.33 61.88
ICICI Prudential 3641.07 7509.10 106.23
Birla Sun Life 1295.68 4498.62 247.20
Aviva 134.66 771.38 472.84
Max New York 673.14 1314.88 95.34
Met Life 76.99 233.82 203.70
Private Total 9581.3 24254.64 153.15
LIC 159767.62 162846.87 1.93
Total 169348.92 187101.5 10.48

(Source: IRDA Journal May 2005)

Table Showing Market Shares of Life Insurance Companies
Market Share (%)
2003-04 2004-05
Om Kotak 0.21 0.68
Allianz Bajaj 0.37 0.96
ING Vaysa 0.1 0.39
AMP Sanmar 0.04 0.15
SBI Life 0.42 1.05
Tata AIG 0.31 0.96
HDFC Standard 0.76 1.12
ICICI Prudential 2.15 4.01
Birla Sun Life 0.77 2.4
Aviva 0.08 0.41
Max New York 0.4 0.7
Met Life 0.05 0.12
Private Total 5.66 12.95
LIC 94.34 87.05
Total 100 100

(Source: IRDA Journal May 2005)

Registration Of Indian Insurance Companies.
The registration of Indian insurance company involves the following contents .

1) Requisition for the registration
2) Application for registration.
3) Renewal of certificates of registration
4) Action in case default
5) Certificates to existing insurers

The Kotak Mahindra Group
Kotak Mahindra is one of India's leading financial institutions, offering complete

financial solutions that encompass every sphere of life. From commercial banking, to stock
broking, to mutual funds, to life insurance, to investment banking, the group caters to the
financial needs of individuals and corporate.
The group has a net worth of around Rs.1,700 crore and employs over 4,000 employees
in its various businesses. With a presence in 74 cities in India and offices in New York, London,
Dubai and Mauritius, it services a customer base of over 5,00,000.
Kotak Mahindra has international partnerships with Goldman Sachs (one of the world's
largest investment banks and brokerage firms), Ford Credit (one of the world's largest dedicated
automobile financiers) and Old Mutual (a large insurance, banking and asset management
conglomerate).

COMPANY MISSION
“To protect the interests of the policyholders, to regulate, promote and ensure orderly growth of
the insurance industry and for matters connected therewith or incidental thereto”

KOTAK HISTORY
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance
Limited. This company was promoted by Uday Kotak, Sidney A, A. Pinto and Kotak &
Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's
when the company changed its name to Kotak Mahindra Finance Limited. Since then it's been a
steady and confident journey to growth and success.
The evolution at Kotak are briefed below,
1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
1991 The Investment Banking Division is started. Takes over FICOM, one of India’s largest
financial retail marketing networks
1992 Enters the Funds Syndication sector
1995 Brokerage and Distribution businesses incorporated into a separate company - Kotak
Securities. Investment Banking division incorporated into a separate company - Kotak
Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate company - Kotak Mahindra
Primus Limited. Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra
Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited
marks the Group’s entry into information distribution.
1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset Management
Company.
2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business.
Kotak Securities launches kotakstreet.com - its on-line broking site. Formal
commencement of private equity activity through setting up of Kotak Mahindra Venture
Capital
M.P Birla Fund.
Institute of Management 18
commencement of private equity activity through setting up of Kotak Mahindra Venture

Capital Fund.
2001 Matrix sold to Friday Corporation

Launches Insurance Services
2003 Kotak Mahindra Finance Ltd. split into various groups for ease of management.

Products And Service
1. Kotak money back policy
The Kotak Money Back Plan not only covers your life, it also assures you a certain
percent of the sum assured as cash payment at regular intervals of every 5 years. It is a savings
plan with the added advantage of life cover and regular cash inflow. This plan is ideal for
planning special moments like a wedding
What are the advantages of this plan?"
1. The plan not only covers your life but also provides you with a survival benefit payout
every 5 years.
2. In the unfortunate event of death of life insured, the beneficiary would receive the death
benefit. The death benefit keeps increases by 7% of the sum assured every year.
3. On maturity, you would receive the sum of the Survival Benefit, Bonus addition* and
Guaranteed addition**.
* Bonus addition is the amount in the Accumulation Account, in excess of the sum
assured. Accumulation Account is your personal account in which the premiums the
survival benefit payouts, risk and expense charges are deducted.
** Guaranteed addition is the guaranteed amount payable on maturity, over and

above the Survival Benefit.
4. The amount available in the Accumulation Account is invested in various financial

instruments (as per IRDA regulations) so your money works hard for you.
5. The Automatic Cover Maintenance facility ensures the policy remains in force even if you
miss premium payments. This facility is available after the first three years of the term.
6. You have the benefit of a 15-day free look period.

7. You have the option of paying premiums quarterly, half yearly or year
2. Kotak Capital Multiplier
The Kotak Capital Multiplier Plan is a participating plan that is built in such a way that it
allows your money to multiply, and gives you the flexibility of using this money the way you
need it, in regular withdrawals. This is an endowment plan, which is very flexible, and has a lot
of other in-built benefits.
"What are the advantages of this plan?"
1. You can choose to start making withdrawals from the vesting age, subject to a maximum
of 65 yrs.
2. At the start of your withdrawal period, you can draw the full proceeds; or you can draw up
to 50%, of your Basic Sum Assured or Accumulation Account*, whichever is higher.
3. In the event that you draw the full proceeds, your policy terminates.
4. In the event that you do not draw full proceeds, then you can make one or more
withdrawals yearly (that can alter year to year, as per your needs), total of which will be
between 0% to 25% of the Net Vesting Value**, subject to the rules applicable at the
vesting age. These withdrawals can be made for a maximum period of 15 years after
maturity.
5. You have the choice to opt for an early vesting at any age before the scheduled vesting age
(subject to at least 3 years' premiums having been paid), if need arises. If the early vesting
is due to medical grounds, then the minimum condition of 3 yrs is also waived.
6. In addition to the regular premiums, you can make lump-sum injections into your plan
during the premium-paying period, as and when you want (such lump-sum injections
during a year may not exceed 25% of the Basic Sum Assured). A Supplementary
Accumulation Account will be created for this, and will be combined with the
Accumulation Account at the chosen vesting age.
7. You have the facility of Automatic Cover Maintenance, which ensures that the policy
remains in force even when you miss the premium payments. This facility is available after
the first 3 years of the term.

8. You have the option of paying premiums from the Supplementary Accumulation Account,
created for "lump-sum injections", if the need arises.
9. During the build-up period, you get an additional life cover of 10% of the Basic Sum
Assured, which is over and above the life cover you have opted for.
10. During the withdrawal period, you get life cover of 10% of the Basic Sum Assured, and
the Critical Illness Benefit (CI+15), if opted for. This is available for a period of 15 years
from your vesting age or till you turn 75, whichever is earlier.
11. During the withdrawal period, returns will continue to be added to the Accumulation
Account. Such returns cannot be negative.
12. You have the option of paying premiums in quarterly, half-yearly or yearly installments.
13. You have the benefit of a 15-day free look period.
3) Kotak endowment plan
Kotak Endowment Plan is a protection plan that covers your life and at the same time
ensures that your money does not lie idle. It invests a portion of your premium in financial
instruments and ensures a considerable growth in savings. This is a participating plan (with
profits).
1. On maturity, you would receive the sum assured plus the bonus addition. Bonus addition is
the amount in the Accumulation Account*, in excess of the sum assured.
2. The amount available in the Accumulation Account is invested in various financial
instruments (as per IRDA regulations) so your money works harder for you.
3. The Automatic Cover Maintenance facility ensures the policy remains in force even if you
miss premium payments. This facility is available after the first three years of the term.
4. You can take a loan against your policy, after the policy has been in force for at least three
years.

5. You have the option of paying premiums quarterly, half yearly or yearly. You also have
the flexibility to pay premiums through the full term of the policy or pay it for a fixed term
of 3, 5, 7, 10 or 15 years.
6. You have the benefit of a 15-day free look period
4) Kotak Preferred Term plan
The Kotak Preferred Term Plan is designed to provide you with reduced premium rates
for a sum assured of Rs.10 lakhs and above.
"Who is eligible for Kotak Preferred Term Plan?"
1) Males over the age of 18 years, who do not use tobacco in any form.
2) Females over the age of 18 years.
"What are the advantages of this plan?"
• It is a low-cost insurance plan.

• You can choose between a regular premium payment option or a single premium payment
option. In case you opt for the regular premium payment option, you may pay your
premiums either annually, or in half yearly or quarterly installments.
• Your Kotak Term Plan can be converted into any other plan offered by Kotak Life
Insurance (except for another Term plan) provided there are at least 5 years before cover
ceases*.
• In case you forget to pay your premium by the due date, you are entitled to a grace period
of 30 days from the date of unpaid premiums.
• In case of a financial emergency, you have the option to surrender the policy provided you
have taken the single premium payment option
5) Kotak Retirement Income Plan (Unit linked)"
The Kotak Retirement Income Plan is a savings plan designed to build a corpus for your
future. It is a unit-linked plan where your money is invested in the funds of your choice to

generate superior returns. Your sum assured is guaranteed* and you can enjoy the benefits of
investing in the capital markets without worrying.
You may opt for any of the following versions:
• With Cover
• Without Cover
• Single Premium
Benefits payable on retirement*
• You can take a cash lump sum of up to a third of the total amount of (a+b):
a) Basic sum assured or Main Account, whichever is higher; and
b) The value of units in Supplementary Account.
• The balance, i.e. two thirds will be used to buy an annuity of your choice from Kotak Life
Insurance or any other insurer available then.
6) Kotak Term Plan
Kotak Term Plan is a pure risk product that aims to cover your life at a nominal cost. You
may want to take this plan to cover your outstanding debts like a mortgage, a home loan etc.
Since this is a pure risk cover product, there are no maturity benefits payable on survival. This is
a non-participating plan.
1. It is a low-cost insurance plan.

2. You can choose between a regular premium payment option or a single premium payment
option.
In case you opt for the regular premium payment option, you may pay your premiums
either annually, or in half yearly or quarterly installments.
3. Your Kotak Term Plan can be converted into any other plan offered by Kotak Life
Insurance (except for another Term plan) provided there are at least 5 years before cover
ceases*.

4. In case you forget to pay your premium by the due date, you are entitled to a grace period
of 30 days from the date of unpaid premiums.
5. In case of a financial emergency, you have the option to surrender the policy provided you
have taken the single premium payment option*.
7) Kotak Safe Investment Plan
This plan is an opportunity to invest in the capital markets and make market linked
returns. The plan assures you of a minimum guaranteed amount in case of death or on maturity.
Thus, while it invests your money in capital markets, and gives you an opportunity to make high
returns, it protects your downside. What’s more, these returns are tax -free to you.
The premiums paid, net of charges, are converted into units and invested in funds
selected by you. This plan offers you a choice of four professionally managed funds to invest
your money. This is a non-participating (without profits) plan.
Money Market Fund - The portfolio will consist of money market investments such as
treasury bills, commercial paper, certificates of deposit, short-term deposits, bills of exchange,
debentures, bonds and Government securities etc

"Who can avail this plan?"
Role 1: Life insurance as "Investment"

Insurance is an attractive option for investment. While most people recognize the risk
hedging and tax saving potential of insurance, many are not aware of its advantages as an
investment option as well. Insurance products yield more compared to regular investment
options, and this is besides the added incentives, (read bonuses) offered by insurers.
You cannot compare an insurance product with other investment schemes for the simple
reason that it offers financial protection from risks, something that is missing in non-insurance
products.
In fact, the premium you pay for an insurance policy is an investment against risk. Thus,
before comparing with other schemes, you must accept that a part of the total amount invested in
life insurance goes towards providing for the risk cover, while the rest is used for savings.
In life insurance, unlike non-life products, you get maturity benefits on survival at the end
of the term. In other words, if you take a life insurance policy for 20 years and survive the term,
the amount invested as premium in the policy will come back to you with added returns. In the
unfortunate event of death within the tenure of the policy, the family of the deceased will receive
the sum assured.
Now, let us compare insurance as an investment options. If you invest Rs 10,000 in PPF,
your money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the access to
your funds will be limited. One can withdraw 50 per cent of the initial deposit only after 4 years.
The same amount of Rs 10,000 can give you an insurance cover of up to approximately
Rs 5-12 lakhs (depending upon the plan, age and medical condition of the life insured, etc) and
this amount can become immediately available to the nominee of the policyholder on death.
Thus insurance is a unique investment avenue that delivers sound returns in addition to
protection.
Role 2: Life insurance as "Risk cover"

First and foremost, insurance is about risk cover and protection - financial protection, to
be more precise - to help outlast life's unpredictable losses. Designed to safeguard against losses
suffered on account of any unforeseen event, insurance provides you with that unique sense of

security that no other form of investment provides. By buying life insurance, you buy peace of
mind and are prepared to face any financial demand that would hit the family in case of an
untimely demise.
To provide such protection, insurance firms collect contributions from many people who
face the same risk. A loss claim is paid out of the total premium collected by the insurance
companies, who act as trustees to the monies.
Insurance also provides a safeguard in the case of accidents or a drop in income after
retirement. An accident or disability can be devastating, and an insurance policy can lend timely
support to the family in such times. It also comes as a great help when you retire, in case no
untoward incident happens during the term of the policy.
With the entry of private sector players in insurance, you have a wide range of products
and services to choose from. Further, many of these can be further customized to fit
individual/group specific needs. Considering the amount you have to pay now, it's worth buying
some extra sleep.
Role 3: Life insurance as "Tax planning"

Insurance serves as an excellent tax saving mechanism too. The Government of India has
offered tax incentives to life insurance products in order to facilitate the flow of funds into
productive assets. Under Section 88 of Income Tax Act 1961, an individual is entitled to a rebate
of 20 per cent on the annual premium payable on his/her life and life of his/her children or adult
children. The rebate is deductible from tax payable by the individual or a Hindu Undivided
Family. This rebate is can be availed up to a maximum of Rs 12,000 on payment of yearly
premium of Rs 60,000. By paying Rs 60,000 a year, you can buy anything upwards of Rs 10
lakhs in sum assured. (Depending upon the age of the insured and term of the policy) This means
that you get an Rs 12,000 tax benefit. The rebate is deductible from the tax payable by an
individual or a Hindu Undivided Family.

REVIEW OF LITERATURE
Purpose
The first step of the research is literature survey. During literature survey the specific
areas and issues up on which data has to be gathered is decided based on type objectives of the
study. Literature survey is of paramount importance because it equips the researcher with a
macro view of a micro issue and vice versa. It provides exhaustive information in the area of
researcher and provides the researcher with diversified views on particular issue. For the
purpose, the abstracting and indexing journals and published or unpublished bibliographic are
the first place to go to. Academic journals conference proceedings, government reports, books
etc; must be tapped depending on the nature of problem.
In this process, it should be remembered that one source would lead to another. The
earlier studies, if any which are similar to the study, concerning the problem at hand must
necessarily be surveyed and examined before a definition of the research problem is given.
He must devote sufficient time to reviewing of research already undertaken on related

problems. This is done to find out what data and other materials, if any are available for optional
purpose.
This would also helps to a researcher to know if there are certain gaps in the theories
applicable to the problem under study are inconsistent with each other, or weather the findings of
different studies do not follow a pattern consistent with the theoretical expectation go on,
All this will enable a researcher to take new strides in the field for furtherance for
knowledge, i.e., he can move up starting from the existing premise.
Methodology
To study the topic of problem secondary data should be collected. Secondary data means
data that are already available, i.e., they refer to the data, which has been collected and analyzed
by somebody else secondary data may be either published data are available in, technical and
trade journals, books, magazines, and newspaper, report and publication of various associations
connected with business and industry.

Conclusion
The central idea in review of literature is data gathering. So, review of literature is carried
on. A researcher should carefully scrutinize the available information and use discretion, to find
out whether the gathered data is adequate and sufficient for the problem. One enquiry, that is
suitable for one enquiry may not be found suitable in another enquiry. Hence, if the available
data are found unsuitable the researcher should not use them.
In this project I have used technical and trade journals, books, magazines, and newspaper,
reports and publication of various associations connected with business and industry,
Benefits Of Literature Review
Once the problem of study is identified, one takes steps a conclusion. In this process one
comes across several books and magazines that serve the purpose of data.
The secondary data, on the other hand which someone else has already collected and
which have already been passed through the statistical process.
From all these, one can extract the necessary available data which can be used as a
secondary data which can be used as a secondary data in his study.
As secondary data is inexpensive compare to primary data, it can be used in one’s study.
But one must be cautious in choosing secondary data. One has to be judicious because the data
available may be unsuitable or may be inadequate in the context of problem.

Theoretical Framework
1. It helps the company to understand market situation for there insurance.

2. It also helped them to know the changes there should be made in the there
policies for the growth.
3. It also helps them to know which age group should the policies more concentrated.
4. It helps to know how to improve the performance of the company.
5. It helps to company carry out the different benchmark for the improvement of
performance, quality & services.
6. It helps to know about the expectations of public.

Research Methodology
Types of research:
The basic plan, which guides the data collection analysis and phrase of the project, is the
framework. That specifies the type of information to be collected the source of data and the data
collection procedure.
Marketing Research, which has to be, used systematic designing collection, analyzing
and reporting of data finding relevant to specific marketing situation facing the company.
Research instrument:
The following instruments would be used in analyzing the data collected from primary
and secondary methods
1 Percentage analysis, waited average
2 Pie diagrams and charts
Sampling methods:
Method adapted was non-probability convenience sampling.
Sampling size:
90 respondents
Sampling Plan;
Element: customer
Extent: Bangalore
Actual collection data:

Primary data – questionnaire and interviews
Secondary data – Records, trade journals and websites
Technique analysis:
Data collected has been classified, tabulated and represented graphically for effective
Limitation:
1. The study was restricted to Bangalore city only.
2. Simple represents a population as a whole hence it need not

1. This table shows the different age group and the number of the people who have taken
the policies.
SL No AGE No %
1 20-30 15 16.67
2 30-40 60 66.67
3 40-50 10 11.11
4 50-60 5 5.56
1. This graph shows the different age group and the number of people who have taken
polices.
Age
4
3 1
1
a
2
3
4

Findings;
1. The maximum no. of people who have taken the policies are from the age group between 30-40
2. The people who have taken the policies are of earning groups.
3. The people of age group between 50 –60 least know about the Kotak life insurance
4. The people are more interested in the LIC of government then any other private insurance
5. All the people are interested in savings the money in insurance
Suggestion;
1. The company have to more concentrate more on the people of age group between the 20-30
2. They should introduce the policy for the age group of the 50-60
3. They should have strong marketing team because very few people are aware of Kotak life
insurance.
4. The policy should be more flexible in the terms of installment
5. It should be able to target the common people

2. This table shows the people of different income group are surveyed
Sl. No Income No %
1 <1 lakh 30 33.33
2 1-2 lakh 25 27.78
3 2-5 lakh 25 27.78
4 >5 lakh 10 11.11
2. This graph shows the people of different income group are surveyed.
Income
4
11% 1
1
33%
2
3
28% 3
2 4
28%

Findings:
1. The people whose annual income are less than lakh are interested in saving the money
insurance
2. The people are of salary more than 2 lakh
3. The people are more interested in saving the money in the more appropriate way
4. They want their returns in shorter period
5. They lack the correct idea about the policies
Suggestions:
1. There should be better policies for the people of lower income

2. There should be policies where the installment capital will vary according to the earnings
especially for the businessman.
3. They should make to understand the terms, conditions and benefits correctly.
4. There should be separate policy for the lower income people
5. The policy should be more flexible in the terms of installment

3. This table shows the comparison between different companies.
Company Performance Quality Service

Kotak 5 7 8
LIC 12 11 10
ICICI 5 8 9
Birla sun life 5 8 7
3. This graph shows the comparison between different companies.
comparision
15 1211
10
10 78 89 87 performance
value
5 5 5 quality
5
service
0
1 2 3 4
company name

Findings:
1. Comparing to private company insurance the LIC having very good quality, service &
performance.
2. The Kotak & ICICI having same level of service

4. This table shows different type approach to the customer.
Approaching system No %
Telecalling 20 22.22
E-mail 10 11.11
Agents 50 55.56
Courier 5 5.56
Other 5 5.56
4. This graph shows different type of approach to the customer.
kotak approachment
Other
Telecalling Telecalling
Courier E-mail
Agents
E-mail
Courier
Agents
Other

Findings:
1. The people are more likely to approached by the agents so that they can fully explained
the detail of all the policies
2. The busy people are more likely to be approached by the email.
3. The business people are likely to approached by the telephoning
4. Very less time it is found to be success by the courier approach
5. The people believe more in what they see than what they hear.
Suggestions:
1. One should have strong marketing team in order have more clients
2. The people should be made to understand the policies with easy and more accurately
3. The people should more frequently approach.
4. The detail of the policy should be given
5. The agent should win confident of the client.

5. This table shows the level of importance of life insurance.
Opinion No %
Highly imp 50 55.56
Imp 40 44.44
Very Imp 0 0
5. This graph shows the level of importance of life insurance.

Findings:
1. The people of today give more importance to the life insurance.

2. People are getting the aware of the importance of life insurance and the traditional view
of just been seeing as a tax benefit is changing
Suggestions:
1. We have to capture the current trend of the market and make them to invest in the good
policies.
2. The people in village are also should be made to understand importance of insurance.

6. This table shows the different type of policy which people are preferred.
SL No Policy Preferred %
1 Money back policy 19 21.11
2 Term policy 8 8.89
3 Endowment policy 17 18.89
4 Preferred plan 8 8.89
5 Child advantage plan 8 8.89
6 Flexi plan 20 22.22
7 Easy growth plan 11 12.22
6. This graph shows the different type of policy which people are preferred.
POLICY
25 20
19
20 17 Money back
Prefered
15 11 Term
10 8 8 8 Endowment
5 K preferred
0 K child adv
x K flexi
Name K easy growth

Findings:
1. People are more interested in the policies like flexi, money back endowment
2. The people require the policy that gives maximum beneficial during their life time
3. It should give some profit even before the term matures.
4. It should be small installment and good returns
5. It should not long term policy.
Suggestions:
1. The policy made should be such that the time period for maturity should be minimum.
2. The policy like money back should given more encouragement.
3. There should policies suitable for children’s marriage, education etc.,

7. This table shows the different ratings for importance.
No. Ratings No. %

1 Excellent 5 5.56
2 Very good 10 11.11
3 Good 50 55.56
4 Satisfactory 20 22.22
5 Bad 5 5.56
7. This graph shows the different ratings for importance
Rank
60
50
40
30 Rank
20
10
0

Findings:
1. The people in the rural places are not much aware of the Kotak life insurance.
2. The people who are aware rated it good
3. The people always compare this with life insurance company (LIC INDIA)
Suggestions:
1) The people in the rural are made understand about company.

2) They should develop necessary benchmark developed of LIC
3) They should all the market strategies to compete and develop

8. This table shows the reason why life insurance is so important
Reason 1 2 3 4
Security 8 3 3 4
Risk savings 4 4 5 5
Good returns 2 8 5 3
Tax benefit 4 3 5 6
8. This graph shows the reason why life insurance is so important.
Importance of Insurance
10
8 1
6
Value
2
4 3
2 4
0
security risk savings good returns tax benefit
Reason

Findings;
1. Most of the people have opted for the insurance mainly for the financial securities.
2. The rich has taken the policies for the tax benefit
3. The people are began care for the future of their children education benefits.
4. The loan facility available for housing is one of the reason they opt for it
5. It is one easy saving with minimum amount.
Suggestions:
1. Company must consciously try to change the mindset of people from investing in Life
Insurance for the sake of tax exempt on to that of worry exempt on.
2. Policy with loan facilities should be considered

9. This Table shows the reason why life insurance is important
Sl. No. Reason and Ranking

1 Risk cover for self &spouse 80
2 Critical illness 65
3 Returns 79
4 Tax planning 51
5 Repaying your loan 56
6 Children’s marriage 53
7 Children’s education 34
9. This graph shows the reason why life insurance is important.
Risk cover for self

Priority &spouse
critical illness
100
80
Returns
Value
60
40
Tax planning
20
0 Repaying your
1 loan
type childerns marriage

Findings:
1. Most of the people have opted for the insurance mainly for the financial securities.
2. The rich has taken the policies for the tax benefit
3. The people are began care for the future of their children education benefits.
4. The loan facility available for housing is one of the reason they opt for it
5. It is one easy saving with minimum amount.
Suggestions:
1. Company must consciously try to change the mindset of people from investing in Life
Insurance for the sake of tax exempt on to that of worry exempt on.
2. Policy with loan facilities given more importance

10. This Table shows the level of satisfaction.
SL
Satisfaction No %
No
1 Excellent 10 11.11
2 Very good 15 16.67
3 Good 55 61.11
4 Satisfactory 10 11.11
5 Bad 0 0
10. This graph shows the level of satisfaction.
satifaction
55
60
50
40
30
15
20 10 10
10 0
0
y
nt
od
d
d
or
Ba
oo
le
go
ct
el
fa
Ex
ry
tis
Ve
Sa

Findings and conclusion
1 It can be seen that most respondents are satisfied with the services provided.
2 Users find less coverage in rural area sectors, compared to urban areas.
3 Lack of publicity has also affected the satisfaction levels.

11. This Table shows consumer who want to approach different proposal
Opinion Response Percentage

Yes 70 78 %
No 20 22 %
Can’t Say 0 0%
11. This graph shows the consumer who wants to approach different proposal.
Demand
No Cant say
22% 0%
Yes
No
Yes Cant say
78%

Findings and conclusion
1. Majority of the customer (78%) said that they are going to for a policy and some
customer (22%) are not going for a policy.
2. It can be inferred that there is a market potential for Kotak Life Insurance Company.
3. In view of this company should approach the customer with better products to tap the
resources.

12. This table shows the Type of policy preferred.
Policies No %
Traditional 15 16.67
Unit link 50 55.55
Term loan 25 27.78
12.This graph shows the type of policy preferred.
policy
Traditional
Unit link
Term loan

Findings:
Unit Link Policies have been preferred for the added advantages of term bonus and are more
stable.

Summary Of Findings
1. Out of 90 people surveyed only thirty of them have taken Kotak Life Insurance Policy
and 50 of them having LIC policy, this show that still LIC are dominating the life
insurance market.
2. Policyholder prefer bank as 2nd option of saving other than insurance.
3. People have taken policy mainly on tax purpose .as such these perceptions of the people
have to be changed by educating people through innovative technique.
4. As per economics times may 2005 Kotak life insurance having 6th place among private
insurance companies.
5. Kotak has developed its product in such in way as to meet the different needs of the
customer.
6. Kotak life insurance facing competition from LIC and other private insurer like ICICI,
Birla sun life, Tata AIG etc
7. Media especially print and television media have helped in spreading knowledge of the
company.
8. Kotak has a wide distribution network. It has its operation in every major city.
9. Majority of policyholders lie in the age group of 30-40. It can be interpreted that young
people perceptions towards private sector have changed.
10. The people of age group of 20-30 are not aware of the importance of insurance.
11. Young people still prefer e-mails and telecalling rather than any other modes.

12. Reliability, Brand and stability in performance are what drive an investor to invest in a
particular company.
13. Media, especially Print and television media have helped in spreading knowledge about
the company.
14. Kotak life insurance is facing the stiff competition from LIC, ICICI, TATA AIG and
many more.
15. Kotak is doing well in pens on product and unit –linked products. With new private
insurance companies entering the industry, competition has increased.

Suggestions And Recommendations
1. Kotak Life Insurance Company Limited is doing well as it has made good growth.
2. Insurance is moving from a push to a pull product with people slowly realizing it’s
important. Thus the passion to excel with the right attitude is what will help attract
customers.
3. It should come up with affordable and feasible policy for younger and retired people
4. Company should target various sub –urban and rural insurable population by coming up
with policies for farmers
5. It should advertise about its product in all the available media based on the consumer
target group.
6. Since the company is still infant stage, the company has a long future ahead.
7. Indian customers have always been using insurance as a tax saving tool and perceived. It
as instruments for earning fixed returns in the future, rather than as a risk managing
instruments.
8. Insurance agents are best salesmen. Companies should train professional to build and sell
the products because they are the one who makes policyholder to pay regularly.
9. Tie-ups with corporate companies and institutions to provide policies to their employees
would create a better recognition & profit in the market.
10. Low premium policies for rural sector could be implemented to tap the rural sector
market.
11. Kotak can also diversify into General insurance like most other competitors who have
majority of the market share.

Conclusion
We can conclude that the consumer have preference for some services that are more
profitable like Kotak Flexi Plan and Kotak Endowment Plan. We can also state that advertising
through television is the most appropriate media for the particular products since it reaches a
mass audience. We need to extend our operations towards semi-urban and rural areas to sustain a
profitable market growth.
Finally to increase the growth rate of the insurance sector, awareness among public about
the benefits of Insurance policies has to be undertaken for creating a suitable market in India
along with suitable marketing strategies.

BIBLOGROPHY
• Company broacher and pamphlet.
• Websites:
www.kotak.com
www.omkotakmahindra.com
www.google.com
• Newsletter and magazines.
• Corporate journals. Kotak investors.
• Kennith Jr black, Harold D, Jr skipper, life insurance; Prentice Hall; 1993
• Philip Kotler: Marketing Management.
• Research Methodology: Cooper & Shindler

Questionnaire
I MANJUNATH S RAYKAR student of M P Birla Institute of Management am doing

project on customer perception towards Insurance Life in Kotak Life Insurance. So I request you
kindly to fill up the questionnaire and accomplish the needed details.
1) Name:
2) Gender:
3) Occupation:
4) Age (please tick the appropriate)
a) 20-30
b) 30-40
c) 40-50
d) 50-60
5) Annual income
a) Below 1 lakh
b) 1 lakh - 2 lakh
c) 2 lakh - 5 lakh
d) More than 5 lakh

What is your perception about Kotak insurance as compared to other insurance companies
you are familiar with?
PERFORMANCE QUALITY SERVICE
KOTAK
LIC
ICICI
BIRLA SUN LIFE
6) What type of policy do you want from Kotak life insurance?
a) Money back policy
b) Term policy
c) Endowment policy
d) Kotak preferred plan
e) Kotak child advantage plan
f) Kotak flexi plan
g) Kotak easy growth plan
7) Rank the reason for taking the policy
a) Risk covers for self and spouse

b) Critical illness
c) Returns
d) Tax planning
e) Repaying your loan
f) Children marriage
g) Children education

6) How satisfied are you with the overall service provided by Kotak life insurance
a) Excellent
b) Very good
c) Good
d) Satisfactory
e) Bad
7) How do you rate for Kotak life insurance? (Rank them)
a) Excellent
b) Very good
c) Good
d) Satisfactory
e) Poor
8) Would you like Kotak to approach you about the different proposals?
a) Yes
b) No
9) How would you like Kotak to approach?
a) Telecalling
b) E-mail
c) Agents
d) Courier
e) Other

10) Which type of insurance policy would you prefer?
a) Traditional
b) Unit link
c) Term loan
11) Rate of importance of life insurance
a) Highly imp
b) Importance
c) Not importance
12) Why insurance is important? (1 – least imp 4– most imp)
a) Security
b) Spread of risk Savings
c) Good returns
d) Tax benefits
13) Any comments or suggestions to improve Kotak service.


Raykar Manjunath-0368-Kotak Life Insurance

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Consumer Perception Towards Life Insurance

A study on Customer Perception Towards Life Insurance

A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE

UNDER THE GUIDANCE OF

Prof.Sumithra Srinath Mr.Girish Kumar D.V

M. P. BIRLA INSTITUTE OF MANAGEMENT

M.P Birla Institute of Management 1

Marketing is an important activity in any organization’s sales strategy. Marketing helps

Research Technique Used:

1. Percentage analysis, waited average

2. Pie diagrams and charts

M.P Birla Institute of Management 2

So service should be targeted at a level, which not only meet customer

However understanding the market consumer preference, market potential and

M.P Birla Institute of Management 3

Objective of the Study

• To understand the preference and perception of consumer.

M.P Birla Institute of Management 4

M.P Birla Institute of Management 5

Introduction to the Life Insurance Industry

Encyclopedia of finance & banking defines insurance as the elimination of or protection

M.P Birla Institute of Management 6

The principal kinds of insurance are the following.

Insurance business is divided into four classes:

History and present status of insurance market in India

M.P Birla Institute of Management 7

Brief history of the insurance sector

I918 Oriental Life Insurance Company was established.

Insurance sector reforms

M.P Birla Institute of Management 8

No composites are permitted as per law.

LEGISLATION (as on 1.4.2000):

Popular Products: Endowment Assurance (Participating), and Money Back

M.P Birla Institute of Management 9

Insurance Industry has Ombudsmen in 12 cities. Each Ombudsman is empowered to

Need For Life Insurance

Self Esteem Needs

Stability Pension Plan

Maslow’s Need Hierarchy Theory.

M.P Birla Institute of Management 10

Economy : 5th Largest in the world in terms of purchasing

Savings Rate : Around 26% of GDP

Estimated Middle Class Population : 300 Million

Insured Population : 70 Million

M.P Birla Institute of Management 11

Global Life Insurance Trends.

Country Life premium per capita U.S $ in 1994

Life Insurance Market In India

Who’s Going With Whom?

India Company Foreign Company

M.P Birla Institute of Management 12

Life Insurance Statistics.

Table Showing Premium Collection By Various Insurance Companies

Premium (Rs. in Mn.)

2003-04 2004-05 % Growth

Private Total 9581.3 24254.64 153.15

LIC 159767.62 162846.87 1.93

Total 169348.92 187101.5 10.48

M.P Birla Institute of Management 13

Table Showing Market Shares of Life Insurance Companies

Market Share (%)

Private Total 5.66 12.95

LIC 94.34 87.05