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COMPANY TRAININIG REPORT ON AN ANALYTICAL STUDY OF SAVING SCHEME COMPLETED IN "LIC OF INDIA"
SUBMITTED IN THE PARTIAL FRLFILLMENT OF REQUIREMENT FOR THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION (BBA),GURU JAMBHESHWAR UNIVERSITY OF SCINCE & TECHNOLOGY,HISAR(HARYANA)
B.B.A.
(2007-2010) SUPERVISED BY: MR. SURJEET BISHNOI HOD OF MANAGEMENT SCMIT,SIKAR (RAJ.) SUBMITTEDD BY:Ms. DEEPENDRA SINGH PARMAR BBA FINAL YEAR E/NO-: 07511505007
SUBMITTED TO:DIRECTORATE OF DISTANCE EDUCATION GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY HISAR(HARYANA)125001
GURU JAMBHESWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR (HARYANA) 125001 RESUME OF SUPERVISOR
NAME DESIGNATION QUALIFICATION AREA OF SPECIALIZATION EXPERIENCE OFFICIAL ADDRESS CONTRACT NO. E-MAIL
MR. SURJEET BISHNOI LECTURER, HOD B.Sc, MBA & UGC-NET MARKETING 6 YEARS SCMIT,SIKAR +919414581356 surjeet_bishnoi@yahoo.com
DATE
(SIGNATURE)
DECLARATION
I do hereby declare that this piece of project report entitled An Analytical Study of Saving Scheme at LIC practices in LIFE INSURANCE CORPORATION OF INDIA for partial fulfillment of the requirements from the award of the degree of BBA is a record of original work done by me under the supervision & guidance of Ms. Surjeet Bishnoi , Shekhawati College of Information & Technology, Sikar(Raj.).This project work is a confide work done by me & has neither submitted nor published elsewhere.
Place: Date:
Signature
ACKNOWLEDGEMENT
At The Outset
Summer training is one of the most vital and active part of the curriculum of management students. Its basic idea behind this is to strengthen the students concept through practical training and make them acquainted with actual method and procedures. I did the work as a management trainee at LIC for a period for 01-01-2010 to 14-02-2010. I would like to extend my heartfelt gratitude to Mr. Ramhet Prasad Chief Life Insurance Advisor at LIC, Dholpur for his proper guidance throughout the project. Without her support and cooperation I would have failed in my endeavors and targets in the summer training. I am greatly intended to my guides Mr. Surjeet Bishnoi (HOD OF MANAGEMENT),Shekhawati College Of Management and Information Technology,Sikar(Raj.) for their constant guidance, advice & help which enabled me to finish this project report.
DEEPENDRA PARMAR
(SIGNATURE)
PREFACE
Someone has rightly said that practical experience is far better and closer to the real world then mere theoretical exposure. The practical experience helps the student to view the real business world closely,which in turn widely influences his perceptions and understanding of the real situation. Research work constitutes the backbone of any management education program. A management student has to do research work quite frequently during his entire span. The research work entitled "An Analytical study of Saving Scheme at LIC" Completed in " LIFE INSURANCE CORPORATION OF INDIA" aims to know customer awareness regarding LIC. The present report is a part of the project that contains the work done by me during the training period of LIC OF INDIA, Dholpur(Raj.). True to the core, a properly and executed industrial training helps a lot in understanding of the mode of operation of industrial organization. The project has offered me an opportunity to put all my efforts and the theoretical knowledge to practice and enhance my knowledge, and at the sure time given me practical experience in the field of marketing. It is surly going to help me in future projects too. In the preparation of this report, I have made every effort to ensure that all steps completed in it. Any suggestions for improvement, will be gratefully accepted. I sincerely hope that this will prove pure knowledge imparting, through provoking and thus stimulating future research work on these guideline.
EXECUTIVE SUMMEARY
In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and LIFE INSURANCE CORPORATION (LIC). has given me the opportunity to work and get experience in highly competitive and enhancing sector. Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer. The life insurance industry in India grew by an impressive 47.38%, with premium income at Rs. 1560.41 billion during the fiscal year 2006-2007. Though the total volume of LIC's business increased in the last fiscal year (2006-2007) compared to the previous one, its market share came down from 85.75% to 81.91%. The 17 private insurers increased their market share from about 15% to about 19% in a year's time. The figures for the first two months of the fiscal year 2007-08 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. With the opening up of the insurance industry in India many foreign players have entered the market. The restriction on these companies is that they are not allowed to have more than a 26% stake in a companys ownership. Since the opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 19 private life insurance companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. Some of these products include investment plans with insurance and good returns (unit linked plans), multi purpose insurance plans, pension plans, child plans and money back plans.
CONTENTS
ACKNOWLEDGEMENT EXECUTIVE SUMMARY INTRODUCTION OF INDUSTRY INTRODUCTON OF ORGANIZATION MILESTONES OF LIFE INSURANCE BUSINESS IN INDIA GENERAL INSURANCE CORPORATION OF INDIA MILESTONES IN GENERAL INSURANCE BORAD OF DIRECTORS OF LIC KNOW ABOUT OUR LIFE INSURANCE OPERATE ALL OVER INDIA ADMISSION OF AGE MISSION & VISION OF LIC OBJECTIVE OF LIC AWARDS OF LIC SAVING SCHEME OF LIC PROCUCTED OFFERED TO CUSTOMER BY LIC JEEVAN AKSHAY PLAN BENEFITS OF PLAN JEEVAN SARAL POLICY SMALL SAVING PAY ROLL SAVING SCHEME BANK AND FINANCIAL INSTITUTIONS RESEARCH METHODOLOGY DATA ANALYSIS & INTERPRETATION CONCLUSION SWOT ANALYSIS APPENDIXES QUESTIONNAIRE REFRENCES & BIBLIOGARPHY
INTRODUCTION OF INDUSTRY
The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non - Indian lives, as Indian lives were considered more risky to cover. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge the same premium for both Indian and nonIndian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to Triton Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of the nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during the 1920's and 1930's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over the insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon. The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create the much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State led planning and development. The non-life insurance business continued to thrive with the private sector till 1972. Their operations were restricted to organized trade and industry in large cities. The general insurance industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies- National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company.
These were subsidiaries of the General Insurance Company (GIC). With the largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 1560.41 billion (for the financial year 2006 2007). Together with banking services, it adds about 7% to the countrys Gross Domestic Product (GDP). The gross premium collection is nearly 2% of GDP and funds available with LIC for investments are 8% of the GDP. Even so nearly 65% of the Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. A large part of our population is also subject to weak social security and pension systems with hardly any old age income security. A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and strengthens the risk taking ability of individuals. It is estimated that over the next ten years India would require investments of the order of one trillion US dollars.
INTRODUCTION OF ORGANIZATION
Life Insurance Corporation of India (LIC)
Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years.
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Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Cooperative Assurance at Lahore were established in 1906. In 1907, Hindustan Cooperative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost.
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LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organisation servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satallite offices and the Corporate office. LICs Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued over one crore policies during the current year. It has crossed the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the corresponding period of the previous year. From then to now, LIC has crossed many milestones and has set unprecedented performance records in various aspects of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families.
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The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance Company Limited. (However, with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies.
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In our country, which is one of the most populated in the world, the prominence of insurance is not as widely understood, as it ought to be. What follows is an attempt to acquaint readers with some of the concepts of life insurance, with special reference to LIC. It should, however, be clearly understood that the following content is by no means an exhaustive description of the terms and conditions of an LIC policy or its benefits or privileges. For more details, please contact our branch or divisional office. Any LIC Agent will be glad to help you choose the life insurance plan to meet your needs and render policy servicing. What Is 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 civilisation'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: That of dying prematurely leaving a dependent family to fend for itself. That of living till old age without visible means of support.
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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 instalment' 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 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.
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Keyman Insurance
Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Keyman.
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ADMISSION OF AGE
Admission Of Age: Age is the main basis of calculation of premium under life insurance policies. The following are accepted as evidence of age: Certified extract from Municipal or Local Bodys records made at the time of birth. Certificate of Baptism or Certified Extract Family Bible, if it contains age or date of birth. Certified Extract from School or College records, if age or date of birth is stated therein. Certified Extract from Service Register in the case of Govt. employees and employees of Quasi-Govt. Institutions or Passport issued by the Passport Authorities in India. Payment Of Premium: By cash, local cheque (subject to realization of cheque), Demand Draft at Branch Office. The DD and cheques or Money Order may be sent by post. You can pay your premiums at any of our Branches as 99% of our Branches are networked. Many Banks do accept standing instructions to remit the premiums. So by providing a standing instruction to your Bank to debit your account for the premium amount and send it vide a bankers cheque to LIC, on the due dates and months mentioned on your policy bond. Through Internet : Payment of premiums can be made through Internet through Service Providers viz.HDFC Bank, ICICI Bank, Times of Money, Bill Junction, UTI Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and Bill Desk. Premium payment can also be made through ATMs of Corporation Bank and UTI Bank. Premium payment can also be made through Electronic Clearing Service (ECS) which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New Delhi, Kanpur, Bangalore, Vijayawada, Patna, Jaipur, Chandigarh, Trivandrum, Ahmadabad, Pune, Goa and Nagpur, Secunderabad & Visakhapatnam. A policyholder having an account in any Bank which is a Member of the local Clearing House can opt for ECS debit to pay premiums. The policyholders wishing to use this system would have to fill up a Mandate Form available at our Branches/DO and get it certified by the Bank. The certified Mandate Forms are to be submitted to our BO/DO. Policy can be anywhere in India. Citibank Kiosks at Industrial Assurance Building, Churchgate, New India Building, Santacruz, Jeevan Shikha Building, Borivili are dedicated for collection of premiums through cheques. Days Of Grace: Policyholder should pay the premiums on due dates. However, a grace period of one month but not less than 30 days will be allowed for payment of yearly/halfyearly/quarterly premiums and 15 days for monthly premiums. When the days of grace expire on a Sunday or a public holiday, the premium may be paid on the following working day to keep the policy in force. If the premium is not paid before the expiry of the days of grace, the policy lapses.
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Revival Of Lapsed Policy: If the policy has lapsed, it can be revived during the life time of the life assured, within a period of five years from the date of the first unpaid premium but before the date of maturity subject to certain conditions. The Corporation offers three convenient schemes of revival viz., Ordinary Revival, Special Revival and Installment Revival. Policies can also be revived under Loan-cumRevival and SB-cum-Revival schemes. Request for revival may be made to the Branch Office servicing the policy. Change Of Address And Transfer Of Policy Records: The policyholder should immediately intimate the change of his/her address to the Branch Office servicing the policy. The correct address facilitates better service and quicker settlement of claims. Policy records can also be transferred from one Branch Office to another for servicing, as requested by the policyholder. Loss Of Policy Document: The Policy Document is an evidence of the contract between the Insurer and the Insured. Hence the policyholder should preserve the Policy Bond till the contracted amount under it is settled. Loss of the Policy Document should be immediately intimated to the Branch Office where it is serviced. Loans: Loans are granted on policies to the extent of 90% of Surrender Value of the policies which are in force and 85% of the Surrender Value in case of policies which are paidup, inclusive of the cash value of bonus. The rate of interest charged at present is 9% p.a. payable half-yearly. Loans are not granted for a period shorter than six months. The Conditions and Privileges printed on the back of the Policy Bond states whether a particular policy is with or without the loan facility. Relief To Policyholders: The Corporation generally allows concessions on payment of premiums, settlement of claims, issue of duplicate policies, etc when the policyholder are affected by natural calamities such as droughts, cyclones, floods, earthquakes, etc. Nomination: Nomination is a right conferred on the holder of a Policy of Life Assurance on his own life to appoint a person/s to receive policy moneys in the event of the policy becoming a claim by the assureds death. The Nominee does not get any other benefit except to receive the policy moneys on the death of the Life Assured. A nomination may be changed or cancelled by the life assured whenever he likes without the consent of the Nominee. Ensure nomination exists in the policy for easy settlement of claims.
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Assignment: Assignment means transfer of rights, title and interest. When an assignment is executed, all rights, title and interest in respect of the property assigned are immediately transferred to the Assignee/s and the Assignee/s become the owner/s of the policy subject to any lawful condition made in the assignment. Assignment can be either conditional or absolute. On assignment (other than to LIC), Nomination automatically stands cancelled. Hence, when such a policy is reassigned, the policyholder will have to make a fresh nomination to avoid delay in settlement of claim. Survival Benefit/Maturity Claims: LIC settles survival benefit/maturity claims on or before the due date. Policyholder are intimated well in advance by the Branch Office which services the policy regarding the payment, and the necessary Discharge Voucher is also sent for execution by the assured. In case the policyholder does not get any intimation from the Branch Office concerned, he/she should contact them, quoting the Policy Number. Survival Benefit payment up to Rs.60,000/- are settled without insisting for Policy Bond and Discharge Voucher. Death Claims: If the life assured dies during the term of the policy, death claim arises. The death of the policyholder should be immediately intimated in writing to the Branch Office where the policy is serviced along with the following particulars: The No./s of the policy/ies The name of the policyholder Death Certificate issued by concerned Authority The date of death. 1. The cause of death and 2. Claimants relationship with the deceased y On receipt of the intimation of death, necessary claim forms are sent by the Branch Office for completion along with instructions regarding the procedure to be followed by the claimant. early claims and settled within 30 days from the date of receipt of all requirements.
y The claims which have arisen after a period of three years are treated as non-
y The claims that have arisen within a period of two years from the date of
commencement of the policy, are treated as early claims and investigation is compulsory in such cases.
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Initiatives In Policy Servicing Areas: All 2048 Branches of LIC are fully computerized covering all policy servicing aspects to give prompt computerized services from new policy introduction, acceptance of renewal premium, revivals, loans, etc to final claims settlement. Green Channel facility has been introduced for the speedy completion of proposals.Payment of premiums can be made through internet through service providers, viz., HDFC Bank, ICICI Bank, Times of money, Bill Junction, UTI Bank, Bank of Punjab,Citi Bank, Corporation Bank, Federal Bank and Billdesk.
Grievance Redressal Machinery: A machinery for redressal of policyholders grievances exist in all the offices of the Corporation. These are headed by designated Officers who are available at their respective Offices every Monday between 2.30 pm and 4.30 pm. except holidays. Policyholder can approach these officers to get their grievances redressed. The Designated Officers at the various offices of the Corporation are : At Branch Office --- Sr./Branch Manager At Divisional Office --- Marketing Manager At Zonal Office --- Regional Manager (Mktg) At Central Office --- Executive Director (Mktg/IO/CRM) Citizens Charter:
y
Citizens' Charter was presented to the Nation in November, 1997. In the Charter the bench marks were prescribed for 30 servicing areas.
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Vision:
"A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."
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OBJECTIVE OF LIC
y Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. Bear in mind, in the investment of funds, the primary obligation to its policyholders, whose money it holds in trust, without losing sight of the interest of the community as a whole; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return. Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective.
y y
y y y y
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In the year 1956, 245 Indian and foreign companies were nationalized and today, the
three letters LIC, stands as a synonym for insurance, for services, for excellence in strengthening the economic fibre of this country. I dare to say that no other three letters taken together are more recognised to the length and breadth of India than LIC. The performance figures of LIC give an indication why LIC is dear to us, why LIC is a Jewel in our crown and why we will continue to nurture LIC and grow it into a great organization rendering service to the people of India. LICs footprints are now to be found in many other countries in the world. Wherever Indians go - and they go everywhere now, wherever Indians are welcome - and they are welcome in every part of the world, wherever Indians settle down they have found many new homes, wherever Indians excel and they excel in every walk of life, they want LIC they want LIC to protect them, to look after their savings, and provide for protection as well as their retirement. P. Chidambaram Union Finance Minister Excerpts from speeches at the inaugural function of LICs Golden Jubilee Celebrations. Lucknow, September 1, 2005.
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AWARDS OF LIC
OUTLOOK MONEY NDTV PROFIT AWARD 2009 in " BEST LIFE INSURER CATEGORY "
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Meaning of saving scheme: saving schemes are a kind of mutual funds like diversified equity funds with Tax benefits. It is just like other tax saving instruments like National Savings Certificate and Public Provident Fund. Main advantage with ELSS is lock-in period is only 3 years while for NSC it is 6 years and for PPF it is 15 years. At the same time risk factor is high in ELSS. As per Income Tax act 80c investment up to Rs 1,00,000 are eligible for deduction from the gross total income hence reducing the total taxable income. For example if your total annual income is Rs 3,00,000 and you invest Rs 1,00,000 in ELSS then your taxable income will become Rs 2,00,000. Previously there was an upper limit for investing in tax saving instruments like ELSS of 5,00,000. Only individuals with less than 5,00,000 annual income are allowed to invest in tax saving instruments. But last year financial budget removed this restriction and now any individual can invest in ELSS irrespective of their income level. Advantages of ELSS over NSC and PPF 1. Main advantage of ELSS is its short lock-in period. Maturity period of NSC is 6 years and PPF is 15 years. 2. Since it is an equity linked scheme earning potential is very high. 3. Investor can opt for dividend option and get some gains during the lock-in period 4. Investor can opt for Systematic Investment Plan 5. Some ELSS schemes also offer personal accident death cover insurance 6. Provides 30 to 40% returns compared to 8% in NSC and PPF Disadvantages of ELSS 1. Risk factor is high compared to NSC and PPF 2. Premature withdrawal is not allowed but it is allowed in other instruments in some specific conditions.
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Diversified Equity Schemes and ELSS Both Equity linked saving scheme and diversified equity scheme operates in same way. Both are high return and high risk schemes. But there is a 3 year lock in period of ELSS and it provides tax benefits too.
Systematic Investment Plan Best way to invest in ELSS is through Systematic Investment Plan(SIP). With SIP you can invest a small amount every month for a specific time period. With SIP investor can take advantage of fluctuations in the stock market. So investor will get more units when the market is down and get less units when the market is up. For eg if you are investing Rs 1000 every month and you will get 100 units for when Net Asset Value (NAV) is 10 and will get 50 units when NAV is 20. So investing a fixed sum regularly helps to cover the market fluctuations by rupee costs averaging. Also most of the Asset Management Companies (AMC) charges less entry load for SIP compared to normal purchase.
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y y y y y y
Endowment Policy
y y y y y y
Endowment with Profits - Plan no.14 Limited Payment Endowment with Profits Plan no.48 Jeevan Mitra Plan no.88 New JanaRaksha Policy Plan no. 91 Jeevan Anand Plan no. 149 Jeevan Mitra Triple Cover Plan no.113
Janashree Bima Yojana Group Insurance Scheme in lieu of EDLI Group (Trem) Insurance Scheme Group Saving Linked Insurace Scheme Group Superannuation Scheme Group Mortgage Redemption Assurance Scheme
33
Money Back with Profit - Plan no.75 New Money Back Plan no.93 Jeevan Surabhi 15 yrs plan no.106 Jeevan Surabhi 20 yrs plan no.107 Jeevan Surabhi 25 yrs plan no.108 Jeevan Bharati Plan no.160 Jeevan Samriddhi Plan No 154, 155, 156, 157 Bima Bachat Plan no.175
New Jeevan Dhara - Plan no.148 New Jeevan Suraksha Plan no. 147 Jeevan Akshay IInd Plan no. 163 Jeevan Nidhi Plan no.169 Jeevan Akshat V Plan no.183
Special Plans
y y y y y y y y
Term Assurance - Plan no.43 Mortgage Redemption - Plan no.52 Jeevan Aadhar - Plan no.114 Market Plus - Plan No 181 Jeevan Vishwas Plan No. 136 Jeevan Saral Plan No. 165 Jeevan Pramukh Plan No. 167 Bima Nivesh 2005 Plan No 171 Money Plus-Plan No 180
Term Policy
y y y y y
Convertible Term Assurance - Plan no.58 New Bima Kiran Trem Assurance Anmol Jeevan I Plan No.-164 Amulya Jeevan-Plan No-177
34
Annuity payable for life at a uniform rate. Annuity payable for 5, 10, 15 or 20 years certain and thereafter as long as the annuitant is alive. Annuity for life with return of purchase price on death of the annuitant. Annuity payable for life increasing at a simple rate of 3% p.a. Annuity for life with a provision of 50% of the annuity payable to spouse during his/her lifetime on death of the annuitant. Annuity for life with a provision of 100% of the annuity payable to spouse during his/her lifetime on death of the annuitant.
Mode:
y
Annuity may be paid either at monthly, quarterly, half yearly or yearly intervals. You may opt any mode of payment of Annuity. Salient features:
y y
Premium is to be paid in a lump sum. Minimum purchase price : Rs.50,000/= or such amount which may secure a minimum annuity as under: Mode Monthly Quarterly Half-yearly Yearly Minimum Annuity Rs. 500 per month Rs. 1000 per quarter Rs. 2000 per half year Rs. 3000 per year
y y y y
No medical examination is required under the plan. No maximum limits for purchase price, annuity etc. Minimum age at entry 40 years last birthday and Maximum age at entry 79 years last birthday. Age proof necessary.
35
Annuity Rate: Amount of annuity payable at yearly intervals which can be purchased for Rs. 1 lakh under different options is as under: Age last birthday 40 45 50 55 60 65 70 75 (i) 7510 7770 8140 8650 9350 10410 12080 14510 Yearly annuity amount under option ( ii ) (15 years certain) ( iii ) ( iv ) (v) ( vi ) 7440 6930 5610 7310 7120 7660 6960 5890 7500 7240 7950 7000 6280 7760 7420 8330 7050 6810 8130 7670 8790 7110 7530 8640 8030 9330 7180 8590 9400 8570 9830 7260 10220 10560 9370 10220 7360 12590 12240 10590
Incentives for high purchase price: If your purchase price is Rs. 1.50 lakh or more, you will receive higher amount of annuity due to available incentives. Cooling-off period If you are not satisfied with the Terms and Conditions of the policy, you may return the policy to us within 15 days from the date of receipt of the Policy Bond. On receipt of the policy we shall cancel the same and the amount of premium deposited by you shall be refunded to you after deducting the charges for stamp duty. Section 41 of Insurance Act 1938 :
y
No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer: provided that acceptance by an insurance agent of commission in connection with a policy of life insurance taken out by himself on his own life shall not be deemed to be acceptance of a rebate of premium within the meaning of this sub-section if at the time of such acceptance the insurance agent satisfies the prescribed conditions establishing that he is a bona fide insurance agent employed by the insurer. Any person making default in complying with the provisions of this section shall be punishable with fine which may extend to five hundred rupees.
36
BENEFITS OF PLAN
The amount of annuity is assured throughout life of the annuitant. What happens if the annuitant dies? If the annuitant dies : 1. Under option (i) annuity ceases. 2. Under option (ii) 3. On death during the guaranteed period - annuity is paid to the nominee till the end of the guaranteed period after which the same ceases. 4. On death after the guaranteed period - annuity ceases. 5. Under option (iii) annuity ceases and the purchase price is paid to the nominee. 6. Under option (iv) annuity ceases. 7. Under option (v) annuity ceases and 50% of the annuity is payable to the surviving named spouse during his/her life time. If the spouse predeceases the annuitant, the annuity ceases. 8. Under option (vi) annuity ceases and full annuity is payable to the surviving named spouse during his/her life time. If the spouse predeceases the annuitant, the annuity ceases. When first instalment of annuity payable: First instalment of annuity is payable after one month, three months, six months or one year from the date of purchase of annuity depending on the mode chosen is monthly, quarterly, half yearly or yearly respectively.
37
Death Benefit: 250 times the monthly premium together with loyalty additions, if any, and return of premiums excluding first year premiums and extra/rider premium, if any, is payable in lump sum on death of the life assured during the term of the policy. Maturity Benefit: The Maturity Sum Assured plus Loyalty additions, if any, is payable in a lump sum. Supplementary/Extra Benefits: These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits. Surrender Value: Buying a life insurance contract is a long-term commitment. However, surrender values are available on earlier termination of the contract. The surrender value will be the greater of the guaranteed surrender value and special surrender. The plan also allows for partial surrenders.
38
Guaranteed Surrender Value: The policy can be surrendered after it has been in force for at least 3 full years. The Guaranteed Surrender value will be equal to 30% of the total amount of premiums paid excluding the premiums for the first year and all the extra premiums and premiums for accident benefit / term rider. Special Surrender Value: 80% of Maturity Sum Assured if 3 or more years but less than 4 years premiums have been paid; 90% of the Maturity Sum Assured, if 4 or more years but less than 5 years premiums have been paid and 100% of the Maturity Sum Assured, if 5 or more years premiums have been paid. The Maturity Sum Assured for this para will be the Maturity Sum Assured corresponding to the term for which premiums have been paid under the policy.
Statutory warning: Some benefits are guaranteed and some benefits are variable with returns based on the future performance of your life insurance company. If your policy offers guaranteed returns then these will be clearly marked guaranteed in the illustration table on this page. If your policy offers variable returns then the illustrations on this page will show two different rates of assumed investment returns. These assumed rates of return are not guaranteed and they are not upper or lower limits of what you might get back as the value of your policy is dependant on a number of factors including future investment performance. Age at entry: 35 years Policy term: 25 years Mode of premium payment: Yearly Amount of annual premium: Rs.4704/-
39
Total End Of Premium Policy paid till end Year of year Guaranteed
Amount payable at the end of year on death during the year (Rs.) Variable Total Scenario 2 100000 104800 109600 114400 119200 124000 128800 133600 138400 161200 208200 291200 426200
Scenario 1 Scenario 2 Scenario 1 1 2 3 4 5 6 7 8 9 10 15 20 25 4704 9408 14112 18816 23520 28224 32928 37632 42336 47040 70560 94080 117600 100000 104800 109600 114400 119200 124000 128800 133600 138400 143200 167200 191200 215200 0 0 0 0 0 0 0 0 0 7000 13000 30000 65000 0 0 0 0 0 0 0 0 0 18000 41000 100000 211000 100000 104800 109600 114400 119200 124000 128800 133600 138400 150200 180200 221200 280200
40
Amount payable on surrender or maturity at the end Total of year End Of Premium paid Variable Total Policy Year till end of Guaranteed Scenario Scenario year Scenario 1 Scenario 2 1 2 1 2 3 4 5 6 7 8 9 10 15 20 25 4704 9408 14112 18816 23520 28224 32928 37632 42336 47040 70560 94080 117600 0 0 8099 12942 18660 23180 27856 32744 37892 43360 75200 106124 135296 0 0 0 0 0 0 0 0 0 7000 13000 30000 65000 0 0 0 0 0 0 0 0 0 18000 41000 100000 211000 0 0 8099 12942 18660 23180 27856 32744 37892 50360 88200 0 0 8099 12942 18660 23180 27856 32744 37892 61360 116200
i) This illustration is applicable to a non-smoker male/female standard (from medical, life style and occupation point of view) life. ii) The non-guaranteed benefits (1) and (2) in above illustration are calculated so that they are consistent with the Projected Investment Rate of Return assumption of 6% p.a.(Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in preparing this benefit illustration, it is assumed that the Projected Investment Rate of Return that LICI will be able to earn throughout the term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of Return is not guaranteed. iii) The main objective of the illustration is that the client is able to appreciate the features of the product and the flow of benefits in different circumstances with some level of quantification. iv) Loyalty additions will depend on future profits and as such is not guaranteed. v) The Maturity Benefit is the amount shown at the end of the policy term.
41
SMALL SAVING
There are different kinds of Small Savings Schemes suitable for various segments of the population. The Government of India have reduced the rate of interest for many of the Small Savings Scrips w.e.f. 01.03.2003 as follows:
7. 8. *
Rs. 10 becomes Rs. 10 becomes Rs. 10 becomes Rs. 758.53 after 5 years Rs. 748.49 after 5 years Rs. 728.90 after 5 years NSC- VIII 9.50 % 9.00 % 8.16 % PPF 9.50 % 9.00 % 8.00 % KVP Doubles in Doubles in Doubles in seven years and three seven years and eight Eight years and seven months months months POSA 4.50 % 3.50 % 3.50 % SCSS 9.00% - NSS -92 Scheme was withdrawn by the G.O.I. w.e.f 01.11.2002
42
Details of Waste Lands in India as per (NRSA) Estimates Details Culturabel Wastelands Saline Gullied and Ravinous Waterlogged Undulating uplands with or without Scrub Jhum Cultivation and Forest Blanks Sandy Areas Total Unculturable Wastelands Barren Hills and Rock out-Crops Snow Bound Area Total Grand Total
Area in m.ha. 3.9 4.32 0.89 10.79 2.4 10.53 32.83 2.75 17.7 20.45 53.28
43
State-wise Length of Coastline and Population in India (1991) Length of Area Population 1991 States/UTs Coastline ( ' 000 Sq. (Lakh) (Km.) Km.) Gujarat 1600 196.00 41.20 Maharashtra 840 307.70 78.70 Goa 300 3.70 1.20 Karnataka 400 191.80 44.80 West Bengal 950 88.70 68.00 Tamil Nadu 720 130.10 55.60 Orissa 560 155.70 31.50 Kerala 1014 39.00 29.00 Andhra Pradesh 960 275.00 66.30 Andaman & Nicobar Islands 8.50 0.30 Lakshadweep 0.03 0.05
Dam Commenced through Decades in India Decades/Periods Before 1900 1901-1950 1951-1960 1961-1970 1971-1980 1981-1990 1991-1996 1996-2000 No. Built 42 251 234 461 1190 1066 116 695
44
(Rs. in Crore) Institution IDBI IFCI ICICI IIBI IDFC SIDBI Exim Bank NABARD 2000-01 1743.6 2152.7 31664.5 1709.8 766.5 6441.4 2070.5 1412 1151 1096.9 25831 1070 1506.1 5919.3 3869.2 1897 2001-02 2002-03 3924.2 1796.5 1091.9 949.3 6789.4 6047.8 2216.4
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Statewise Priority Sector Lending of Public Sector Banks in India (1997 to 1999) (Rs. in Crore) States/UTs Andhra Pradesh Arunachal Pradesh Assam Bihar Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Karnataka Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Delhi Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh West Bengal Andaman & Nicobar Islands Chandigarh Dadra & Nagar Haveli Daman & Diu Lakshadweep Pondicherry March 1997 7205.62 20.27 1018.89 2993.98 269.47 4675.29 2487.61 487.06 247.54 5971.12 3395.40 4205.57 10453.26 96.31 49.26 19.18 66.46 3743.13 1901.25 4695.32 2808.41 17.63 9049.19 122.53 7435.39 4639.25 15.97 509.34 6.36 6.59 1.76 104.73 1998 8727.80 23.79 963.16 3107.43 339.87 5542.48 2893.73 558.05 302.80 7017.59 3499.60 4909.41 12697.68 102.86 62.05 22.72 58.92 4639.57 2089.20 5502.57 3614.73 24.67 9736.06 132.43 8360.68 5155.67 16.90 509.27 11.99 7.50 2.16 104.33 1999 9202.44 29.93 1083.80 3604.20 421.09 6228.66 3506.50 640.79 342.98 8601.58 3918.86 5638.55 15457.85 111.10 67.02 27.35 65.90 5902.95 2105.74 6583.48 4197.77 27.82 10467.29 138.73 9298.93 5680.61 24.89 576.50 17.04 8.40 2.27 113.10
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State-wise Net Small Savings Collections in India (1998-99 to 2001-02) (Rs. in Crore) Net Amount (including P.P.F.) Collected through Post Offices 199819992000200199 2000 01 02 1121.10 1566.33 1809.68 1752.95 95.29 464.63 513.74 471.08 14.39 10.29 15.32 11.71 1676.50 1970.52 2210.29 1438.79 0.00 881.79 2661.90 3276.96 4281.25 3759.71 74.42 80.94 102.47 110.20 907.32 970.23 978.18 1129.83 60.69 (-)507.27 235.79 304.12 231.36 254.98 300.34 273.00 1162.16 1336.94 1570.96 1366.66 555.54 689.62 491.71 495.46 1021.85 1215.50 993.28 1184.73 363.68 326.39 2977.83 3171.76 4100.36 3406.98 16.57 21.39 25.47 13.48 21.12 19.72 33.07 24.17 7.90 8.51 15.48 9.75 7.80 6.14 8.66 13.26 435.06 521.18 545.18 569.98 1642.08 1920.04 2181.06 1832.03 1594.02 2203.26 2609.22 2973.24 9.41 12.05 12.70 9.41 874.19 1304.50 1600.22 1520.98 71.71 104.70 138.27 126.06 3717.51 4334.12 4042.99 3979.95 462.60 484.07 4424.08 5249.12 6181.67 6488.02 4.82 1.73 (-)4.37 1.11
States/UTs Andhra Pradesh Assam Arunachal Pradesh Bihar Bihar-Jharkhand Gujarat Goa Haryana Himachal Pradesh Jammu & Kashmir Karnataka Kerala Madhya Pradesh M.P. Chattisgarh Maharashtra Manipur Meghalya Mizoram Nagaland Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal Andaman & Nicobar Islands Chandigarh Daman & Diu Delhi Lakshadweep Army Post Office Pondicherry India
31.01 17.14 3.40 51.85 5.39 5.73 4.27 2.47 1326.29 1087.93 1672.06 1571.74 0.05 0.20 0.11 0.05 13.48 23.36 18.39 28.79 8.26 20.90 61.47 80.88 26771.10 31363.15 37578.97 36694.69
47
RESEARCH METHODOLOGY
TOPIC:- ANALYTICAL STUDY OF SAVING SCHEME DURATION:- 45 Days
Research methodology systematically solves the research problems. It has many dimensions & research methods constitute a part of the research methodology. Thus when we talk about research methodology , we do not only talk of the research methods but also consider the logic behind the methods. We use being evaluated either by researcher himself or by others. To effectively carry out in research , I would use the following research process, which consists of series of actions or steps. 1. 2. 3. 4. Formulating the research problems. Research design & sample design Analysis of data gathered. Graphics & interpret.
48
Sample Design A sample design is a definite plan determined before any data is actually collected for obtaining a sample. Researcher must select a sample design, which should be reliable & appropriate for this report.
Primary Data
Primary data are the data that are collected afresh & for the first time. Thus happens to be in character. Primary data are collected by the following ways: Observations Interview Schedule Questionnaire
Secondary Data
Secondary data are the data that are collected & are already collected & are only analyzed by different sources. These are as follows: Corporate magazine Manuals of various companies Books, journals & newspaper Employment exchange
I collected the secondary data from internet, mainly from annual reports of AXIS BANK & Books of different authors of repute.
49
COMPANYS NAME L.I.C. RELIANCE LIFE INSURANCE ICICI PRUDENTIAL SBI LIFE HDFC TOTAL
2 7 3 10
LIC REL ICICI SBI HDFC
78
INTERPRETATION 78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1 by that percent of respondents. DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY RESPONDENTS
50
25% 55%
20%
Future Investment
INTERPRETATION 55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy. Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and future investments respectively.
51
30%
7%
LOW PREMIUM
REPUTATION OF COMPANY
INTERPRETATION Majority of the respondent (37%) found Larger risk coverance as the most attracted feature of the all.
52
NATURE OF POLICY
45
LIFE POLICY
75
25
BOTH
INTERPRETATION 75% of the respondents have Life Insurance Policy while 45% have both. (The % is calculated out of 280 positive response)
53
100
81
SAVING TOOL
74
INTERPRETATION 81% of the respondents have perception of Insurance being a saving tool. And 74% of the respondents have perception of Insurance being a tax saving device. But 100% of the respondents are with the view that Insurance is a tool to protect your family.
54
30%
70%
Yes No
INTERPRETATION Of the sample size of 400 surveyed respondents 70% of the respondents are having Insurance policy. 30% of the respondents are either not having any Insurance policy at present or their policy is already matured. And at present 100% of the respondents are with the view that Insurance is a tool to protect your family.
55
BUYING PROCESS Customer approached Insurance company/Agent Company/agent approached customer Total
56% 44%
56
RESPONSE
SHARE (%)
80
100
80
INTERPRETATION 80.71% of the Respondents opted for Insurance for tax saving benefits. 80.71% of the Respondents opted for saving / Investments. But all of them, i.e. 100% of the respondents have opted for insurance for their family protection.
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RESPONSE
40%
0%
60%
Satisfied
Not satisfied
Not Responded
INTERPRETATION 60% of the respondents are more or less satisfied with their existing policy. 40% of the respondents are not satisfied with their existing policy. In this case all of those who have taken a policy have responded.
58
RESPONSE
55.00%
45.00%
Satisfied
Not satisfied
INTERPRETATION y y y 45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent. All of those who have taken a policy have responded.
59
0%
100%
Paying tax
INTERPRETATION y Of the sample size of 400 respondents, all the respondents are paying tax.
60
11 21
51
25
32
33
LIC
NSC
BOND
PPF
PF
EPF
INTERPRETATION y 51% of the respondents save their tax by investing in LIC, which is the highest among all Investment. This shows that most people for getting taxes benefits invest in LIC. y y 33.25% of the respondents do their tax saving by investing in NSC. 32.25% of the respondents to their tax saving by investing in bonds.
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DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OF INVESTMENT FOR SECURING THEIR FUTURE
NO. OF RESPONDENTS Fixed Assets Bank deposits Jewellery Securities i.e. bonds, MFs Shares Insurance 75 11 25 40. 10 70 SHARE (%) 75% 11% 25% 40% 10% 70%
Fixed Assets
70 75
Bank deposits Cash & Jewellery Securities i.e. bonds, MFs Shares Insurance
10 40 25
11
INTERPRETATION y 75.25% of the respondents as with the view that Fixed Assets is the best form of investment for securing their future.
y 70.5% of the respondents are with the perception that Insurance is the best form of investment for securing their future, which is one of the highest and this shows that insurance is an important key for securing your future.
62
71
100
90
Security
Tax benefits
INTERPRETATION y y y 100% of the respondents intent to gain saving and returns from their investment. 90% of the respondents intent to gain security from their investments. Whereas, 71.75% of the respondents intent to gain tax benefits from their investments.
63
29%
60.61% 10.10% 0%
After 25 years
After 35 years
After 45 years
Anytime
INTERPRETATION y 29% of the respondents are with the view that insurance should be bought after the age of 25 years. y 10.5% of the respondents are with the view that insurance should be buyed after the age of 35 years. y Whereas, 60.5% of the respondents are with the view that buying of insurance do not have any thing to do with age i.e. there is no age limitations. It can be purchased any time according to the need.
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0 24 33 26 29 10 67
INTERPRETATION
y y y y y y y 67% of the respondents have the opinion that Indian Insurance Companies have Rigid plans. 29.5% feel that Indian Insurance companies are Non-user friendly. 26.5% feel that services of Indian Insurance companies are Unsatisfactory. 35.75% of the respondents are with the view that Indian Insurance companies are Non-aggressive. 24% of the respondents feel that products and services of Indian Insurance companies is Satisfactory. Whereas only 10.25% feel that it is Good enough. And according to the data, no single person has felt that it is very good.
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DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE COMPANY RESPONSE A trusted name Friendly service responsiveness Good plans Accessibility & NO. OF RESPONDENTS 82 71 81 49 SHARE (%) 82% 71% 81% 49%
49 82
81
71
INTERPRETATION y y y 82% customers look for a Trusted name in a company for insurance. 81.5% customers look for a good plan in a company for insurance. Friendly service & responsiveness and Accessibility are also important factors looked by customers in a company.
66
DATA SHOWS PEOPLE PLANNING FOR NEW INVESTMENTS RESPONSE Planning Not planning Total NO. OF RESPONDENTS 87 13 100 SHARE (%) 87% 13% 100%
13.0%
87.0%
Planning
Not planning
INTERPRETATION y y Only 12.5% of the customers contacted are not planning for new investments presently. Whereas, 87.5% of the customers are still planning for new investments this can be a great potential for Reliance Life Insurance to take them on their favor.
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DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS
RESPONSE Yes No Uncertain Total NO. OF RESPONDENTS 43 44 13 100 SHARE (%) 43% 44% 13% 100%
Yes
No
Uncertain
INTERPRETATION The interested customers i.e. 43% are ready to go for insurance even away from a city if services and products are worthwhile, which again is a good prospect (potential) for Life Insurance Corporation of India to take them on their favor.
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Conclusion
After Findings we can see about LIC features and his The tendency to take the expedient approach and focus on the far right of the LIC spectrum, Peacetime Contingency Operations and conduct training as usual, while briefing that the LIC block has been checked, will lead us to a possibly fatal false sense of security. Instinctive behavior and ingrained training must be adjusted to fit new circumstances. STXs must be developed locally or borrowed from units who have already been through the training. The probability of becoming involved in a LIC operation is high. The potential to attract international attention, even with limited forces, is also great. Units have demonstrated that with a balanced training focus and proper preparation, many pitfalls outlined above can be avoided. LIC is not conventional warfare. This is critical for the counterinsurgent to understand. The insurgents violent and coercive strategy is applied so as to achieve political, civil, military and psychological results. Hence, the counterinsurgent must counter all of these strategic elements individually. In addition, the target of the insurgents violence and coercion is the population. This is
because the population is the centre of gravity in LIC. Therefore the counterinsurgent must also focus on the population to be successful. In terms of military principles in counterinsurgency, doctrinal precision, professionalism, independence, initiative, force precision, restraint, combined arms, precision engagement, joint force, effective population based intelligence, integrated communications, a civil affairs approach and high levels of training are critical. So we can say that so many merits and Demerits in life insurance Corporation of India.
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SWOT ANALYSIS
1 STRENGTHS 1) Strong brand name 2) Large customer base 3) Enhanced quality and long term service commitments 4) Product preference by customers 2 WEAKNESSES 1) New products did not embark predicted sales. 2) New / change look is not undertaken in new products. 3 OPPORTUNITIES 1) Competition is paving way for developing fuel efficient product like splendor. 2) Upper rich segments are need to be targeted. 3) Stylish look need to be adopted in products as per youth demanding. 4 THREAT
1) Competition is getting tougher every day. 2) Rival companies are making their every moves to fight competition. 3) Customers are moving towards four wheeler segment.
70
Appendixes
PERFORMANCE HIGHLIGHTS
Q4
Net Profit Net Interest Income Fee Income Operating Revenue Operating Profit Net Interest Margin Cost of Funds 71 % yoy 89 % yoy 67 % yoy 87 % yoy 82 % yoy 3.93 % 5.82 %
FY08
63 % yoy 76 % yoy 70 %yoy 77 %yoy 76 % yoy 3.47 % 6.02%
71
QUESTIONNAIRE
1. ARE YOU EMPLOYED?
YES
NO
YES
NO
LIFE
NON-LIFE
BOTH
4. WHICH COS INSURANCE POLICY YOU PREFER THE MOST? (RANK THEM)
a)
LIC
b)
ICICIPRUDENTIAL
c)
d)
e)
f)
g) ANY OTHER
________( Specify)
a) 5Yrs
b) 5-10 Yrs
72
1. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE COVER? (RANK THEM) A) B) C) D) COVER FUTURE UNCERTAINITY TAX DEDUCTIONS FUTURE INVESTMENT ANY OTHER _________
(Specify)
2. WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT? (RANK THEM) A) B) C) D) E) F) LOW PREMIUM LARGER RISK COVERANCE MONEY BACK GUARNTEE REPUTATION OF COMPANY EASY ACCESS TO AGENTS ANY OTHER
_________
(Specify)
4. DO YOU REALLY THINK INSURANCE POLICY COVER IN TODAYS SCENARIO IS NOT ESSENTIAL?
(RANK THEM)
a) A SAVING TOOL b) A TAX SAVING DEVICE
73
9.
YES
NO
74
(RANK THEM)
A) LIC B) NSC C) BONDS D) PPF E) PF F) EPF
(RANK THEM)
A) FIXED ASSETS B) BANK DEPOSITS C) JEWELLERY D) SECURITIES, i.e. Bonds, MFs E) SHARES F) INSURANCE
75
A) AFTER 25 Yrs B) AFTER 35 Yrs C) AFTER 45 Yrs D) ANYTIME 14. HOW WOULD YOU RATE INDIAN INSURANCE COs?
A) RIGID PLANS B) NON-USER FRIENDLY C) UNSATISFATORY SREVICES D) NON-AGGRESSIVE E) SATISFACTORY F) GOOD G) VERY GOOD
76
A) PLANNING
B) NOT PLANING
16. WOULD YOU GO FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS?
A) YES B) NO C) UNCERTAIN
77
BIBLIOGRAPHY
Annual Report of LIC from 2004 to 2009 C.R. KOTTHARI, RESEARCH METHODOLOGY Internet Portal
www.licindia.com www.google.com
Releases:
Press Release 08 09 & 09-10 of LIC. Analyst PPT 08 09 & 09-10 of LIC. Annual Performance Report.
News Paper and Magazines: Business World April June Editions. 4Ps of Marketing April June Editions. Economic Times April June Editions
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79