Final Black Book Vishakaha Project.docx

A PROJECT REPORT ON ―STUDY OF LIFE INSURANCE POLICIES PROVIDED BY LIFE INSURANCE CORPORATION OF INDIA.‖

SUBMITTED BY VISHAKHA DEEPAK KADAM ROLL NO – 49 UNDER PARTIAL FULFILLMENT OF B.COM ( ACCOUNTING AND FINANCE ) Semester V UNDER THE GUIDANCE OF PROF. MANOJ .S. WAGH VIDYA PRASARAK MANDAL’S K.G JOSHI COLLEGE OF ARTS & N.G BEDEKAR COLLEGE OF COMMERCE. Chendani Bunder Road, Thane (W) UNIVERSITY OF MUMBAI AY: 2017-18

DECLARARTION

I am Vaishnavi Suhas Padte studying in T.Y.Bachelor of Management Studies hereby declares that I have done a project on Study of Life Insurance provided by Life Insurance Corporation of India . As required by the university rules, I state that the work presented in this thesis is original in nature and to the best my knowledge, has not been submitted so far to any other university. Whenever references have been made to the work of others, it is clearly indicated in the sources of information in references.

Student Vaishnavi Padte

Place: Thane Date:

ACKNOWLEDGEMENT

It gives me great pleasure to declare that my project on study of Insurance Policies provided by Life Insurance Corporation of India has been prepared purely from the point of view of students requirements. This project covers all the information pertaining to life insurance policies. I have tried my best to write project in simple and lucid manner. I have tried to avoid unnecessary discussions and details. At the same time it provides all the necessary information. I feel that it would be of immense help to the students as well as all others referring in updating their knowledge. I would like to thank our Principal Dr.Mrs. SUCHITRA NAIK . I am also thankful to our Coordinator, PROF. NITIN PAGI and also librarian and my colleagues for their valuable support, cooperation and encouragement in completing my project. Special thanks to PROF. SIPRA ROUTARAY my internal guide for this project for giving me expert guidance, full support and encouragement in completing my project successfully. I thank God and my parents for their continuous support and encouragement.

INDEX

EXECUTIVE SUMMARY

Insurance is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium. It is a thing providing protection against a possible eventuality. It is a contract between the policyholder and the insurance company. Insurance are of different types depending on the risk they mitigate. Broad categories include life, health, motor, travel, home, rural, commercial and business insurance. Life insurance is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder). Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policy holder typically pays a premium, either regularly or as one lump sum. Other expenses (such as funeral expenses) can also be included in the benefits. Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot, and civil commotion. Life Insurance Corporation of India (LIC) is an Indian state owned insurance group and investment company headquartered in Mumbai. It is the largest insurance company in India The Life Insurance Corporation of India was founded in 1956 when the Parliament of India passed the Life Insurance of India Act that nationalized the private insurance industry in India. Over 245 insurance companies and provident societies were merged to create the state owned Life Insurance Corporation.

CHAPTER 1 1.1 INTRODUCTION OF INSURANCE In one form or another, we all own insurance. Whether it's auto, medical, liability, disability or life, insurance serves as an excellent risk-management and wealth preservation tool. Having the right kind of insurance is a critical component of any good financial plan. While most of us own insurance, many of us don't understand what it is or how it works. In this tutorial, we'll review the basics of insurance and how it works, then take you through the main types of insurance out there.

1.2 What Is Insurance? Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium. Insurance allows individuals, businesses and other entities to protect themselves against significant potential losses and financial hardship at a reasonably affordable rate. We say "significant" because if the potential loss is small, then it doesn't make sense to pay a premium to protect against the loss. After all, you would not pay a monthly premium to protect against a $50 loss because this would not be considered a financial hardship for most. Insurance is appropriate when you want to protect against a significant monetary loss. Take life insurance as an example. If you are the primary breadwinner in your home, the loss of income that your family would experience as a result of our premature death is considered a significant loss and hardship that you should protect them against. It would be very difficult for your family to replace your income, so the monthly premiums ensure that if you die, your income will be replaced by the insured amount. The same principle applies to many other forms of insurance. If the potential loss will have a detrimental effect on the person or entity, insurance makes sense. Everyone that wants to protect themselves or someone else against financial hardship should consider insurance

This may include:

 Protecting family after one's death from loss of income  Ensuring debt repayment after death  Covering contingent liabilities  Protecting against the death of a key employee or person in your business  Buying out a partner or co-shareholder after his or her death  Protecting your business from business interruption and loss of income  Protecting yourself against unforeseeable health expenses  Protecting your home against theft, fire, flood and other hazards  Protecting yourself against lawsuits  Protecting yourself in the event of disability  Protecting your car against theft or losses incurred because of accidents  And many more

1.3 HISTORY In India, insurance has a deep-rooted history. It finds mention in the writings of

Manu

(Manusmrit),

Yagnavalkya

(Dharmasastra)

and

Kautilya

(Arthasastra). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Associaton of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the General Insurance Business (Nationalisation) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd.

1.4 TYPES OF INSURANCE

Agricultura l Insurance Fire Insurance

Life Insurance

Types of Insurance

Marine Insurance

Vehicle Insurance

General Insurance

Health Insurance

1: Agricultural insurance: Agriculture in India is highly susceptible to risks like droughts and floods. It is necessary to protect the farmers from natural calamities and ensure their credit eligibility for the next season. For this purpose, the Government of India introduced many agricultural schemes throughout the country.

2: Life insurance: Life insurance (or life assurance, especially in the Commonwealth), is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder). Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policy holder typically pays a premium, either regularly or as one lump sum. Other expenses (such as funeral expenses) can also be included in the benefits.

3: General insurance: General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance is typically defined as any insurance that is not determined to be life insurance. It is called property and casualty insurance in the U.S. and Canada and non-life insurance in Continental Europe.

4: Health insurance: Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for profit entity.

5: Vehicle insurance: Vehicle insurance (also known as car insurance, motor insurance or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles. It primary use is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise there from. The specific terms of vehicle insurance vary with legal regulations in each region.

6.

Marine Insurance Marine insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between the points of origin and final destination. Cargo insurance is a sub-branch of marine insurance, though Marine also includes Onshore and Offshore exposed property, (container terminals, ports, oil platforms, pipelines), Hull, Marine Casualty, and Marine Liability. When goods are transported by mail or courier, shipping insurance is used instead

7.

FIRE Insurance Fire insurance covers damage or loss to a property because of fire. It is a specific form of insurance in addition to homeowner’s or property insurance, and it covers the cost of replacement and repair or reconstruction above what the property insurance policy covers. Fire insurance policies cover damage to the property, and may also cover damage to nearby structures, personal property and costs because of not having the capacity to live in or use the property if damages occur. The policy typically includes additional coverage against smoke or water damage due to a fire. A fire insurance policy is usually set up for one year. The policyholder may renew the policy according to the terms of the policy

Fundamentals Of Insurance:

How does insurance work? Insurance works by pooling risk. What does this mean? It simply means that a large group of people who want to insure against a particular loss pay their premiums into what we will call the insurance bucket, or pool. Because the number of insured individuals is so large, insurance companies can use statistical analysis to project what their actual losses will be within the given class. They know that not all insured individuals will suffer losses at the same time or at all. This allows the insurance companies to operate profitably and at the same time pay for claims that may arise. For instance, most people have auto insurance but only a few actually get into an accident. You pay for the probability of the loss and for the protection that you will be paid for losses in the event they occur.

RISK Risks Life is full of risks - some are preventable or can at least be minimized, some are avoidable and some are completely unforeseeable. What's important to know about risk when thinking about insurance is the type of risk, the effect of that risk, the cost of the risk and what you can do to mitigate the risk. Let's take the example of driving a car. Type of risk: Bodily injury, total loss of vehicle, having to fix your car The effect: Spending time in the hospital, having to rent a car and having to make car payments for a car that no longer exists The costs: Can range from small to very large Mitigating risk: Not driving at all (risk avoidance), becoming a safe driver (you still have to contend with other drivers), or transferring the risk to someone else (insurance)

Risk Control There are two ways that risks can be controlled. You can avoid the risk altogether, or you can choose to reduce your risk. Risk Financing If you decide to retain your risk exposures, then you can either transfer that risk (i.e. to an insurance company), or you retain that risk either voluntarily (i.e. you identify and accept the risk) or involuntarily (you identify the risk, but no insurance is available). Risk Sharing Finally, you may also decide to share risk. For example, a business owner may decide that while he is willing to assume the risk of a new venture, he may want to share the risk with other owners by incorporating his business. So, back to our driving example. If you could get rid of the risk altogether, there would be no need for insurance. The only way this might happen in this case would be to avoid driving altogether. Also, if the cost of the loss or the effect of the loss is reasonable to you, then you may not need insurance. For risks that involve a high severity of loss and a low frequency of loss, then risk transference (i.e. insurance) is probably the most appropriate protection technique. Insurance is appropriate if the loss will cause you or your loved ones a significant financial loss or inconvenience. Do keep in mind that in some instances, you are required to purchase insurance (i.e. if operating a motor vehicle). For risks that are of low loss severity but high loss frequency, the most suitable method is either retention or reduction because the cost to transfer (or insure) the risk might be costly. In other words, some damages are so inexpensive that it's worth taking the risk of having to pay for them yourself, rather than forking extra money over to the insurance company each month.

RISK MANAGEMENT PROCESS The Risk Management Process After you have determined that you would like to insure against a loss, the next step is to seek out insurance coverage. Here you have many options available to you but it's always best to shop around. You can go directly to the insurer through an agent, who can bind the policy. The process of binding a policy is simply a written acknowledgement identifying the main components of your insurance contract. It is intended to provide temporary insurance protection to the consumer pending a formal policy being issued by the insurance company. It should be noted that agents work exclusively for the insurance company. There are two types of agents: 1. Captive Agents: Captive agents represent a single insurance company and are required to only do business with that one company. 2. Independent Agent: Independent agents represent multiple companies and work on behalf of the client (not the insurance company) to find the most appropriate policy.

UNDERWRITING Underwriting Underwriting is the process of evaluating the risk to be insured. This is done by the insurer when determining how likely it is that the loss will occur, how much the loss could be and then using this information to determine how much you Investopedia.com – the resource for investing and personal finance education. This tutorial can be found at: http://www.investopedia.com/university/insurance/ (Page 5 of 29) Copyright © 2010, Investopedia.com - All rights reserved. should pay to insure against the risk. The underwriting process will enable the insurer to determine what applicants meet their approval standards. For example, an insurance company might only accept applicants that they estimate will have actual loss experiences that are comparable to the expected loss experience factored into the company's premium fees. Depending on the type of insurance product you are buying, the underwriting process may examine your health records, driving history, insurable interest etc. The concept of "insurable interest" stems from the idea that insurance is meant to protect and compensate for losses for an individual or individuals who may be adversely affected by a specific loss. Insurance is not meant to be a profit center for the policy's beneficiary. People are considered to have an insurable interest on their lives, the life of their spouses (possibly domestic partners) and dependents. Business partners may also have an insurable interest on each other and businesses can have an insurable interest in the lives of their employees, especially any key employees.

Insurance Contract The insurance contract is a legal document that spells out the coverage, features, conditions and limitations of an insurance policy. It is critical that you read the contract and ask questions if you don't understand the coverage. You don't want to pay for the insurance and then find out that what you thought was covered isn't included

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA (IRDAI) Introduction Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous apex statutory body tasked with the regulation and promotion of the insurance and Re-insurance industries in India. It was constituted by an Act of Parliament called the Insurance Regulatory and Development Authority Act, 1999,duly passed by the Government of India. The agency operates from its headquarters at Hyderabad, Telangana where it shifted from Delhi in 2001. IRDA batted for a hike in the foreign direct investment (FDI) limit to 49 per cent in the insurance sector from the erstwhile 26 per cent. The FDI limit in insurance sector was raised to 100% in June 2016.

3.2 Powers and functions of IRDAI The powers and functions of the IRDAI are defined under Section 14 of the IRDAI Act, 1999.They include: 

Issuing, renewal, modification, withdrawal, suspension or cancellation of registrations;



Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance;



Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents



Specifying the code of conduct for surveyors and loss assessors



Promoting efficiency in the conduct of insurance business;



Promoting and regulating professional organizations connected with the insurance and re-insurance business;



Levying fees and other charges for carrying out the purposes of this Act;



Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);



Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries;



Regulating investment of funds by insurance companies;



Regulating maintenance of margin of solvency;



Adjudication of disputes between insurers and intermediaries or insurance intermediaries;



Supervising the functioning of the Tariff Advisory Committee;



Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f);



Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector.

3.3 Growth of Life Insurance corporation of India: As of September 30, 2010, Insurance players have infused more than Rs.30, 000 crore of capital and are a major contributor to economic development, especially infrastructure development. The industry plays a critical role in mobilizing savings, providing risk cover and has played a pivotal role in stabilizing the financial markets. During the global financial crisis of 2008-09, the life insurance industry invested more than Rs.51, 562 crore in the equity market when foreign institutional investors pulled out approximately Rs.. 47,000 crore. Life insurance premiums generate long-term capital which is required to build infrastructure projects, which have long gestation period. As of September 30, 2010, infrastructure investment by life insurers stood at Rs.1, 44,877 crore. Despite an uncertain environment, the total premium of the life insurance industry increased by 23 per cent to Rs 1,25,254 crore from Rs.1,01,973 crore for the first six months. The growth in total premium is derived from the increase in new business premium by 60 per cent, backed by strong performance by Life Insurance Corporation. The growth is all the more noticeable since this period was marked by significant changes in product profile of unit-linked insurance policies female is up to 30 years and if she does not have an income attracting Income Tax.

3.4 Objectives of LIC 

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.

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

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

CHAPTER 2

2.1 RESEARCH METHODOLOGY

In order to conduct the research an appropriate methodology became necessary. The information provided in this project has been collected from various sources. The data – the material for the project has been collected keeping in view the objectives of a project and accordingly data has been found out from the following two sources:

Primary Data:In this research with sample size of 30 customers data will be available in the form of questionnaire in terms of different question influencing the life insurance policy preferred by them. Only the customers of LIC of India are taken into consideration. Also the view of agent of LIC taken in the consideration.

Secondary Data:The Secondary data has been collected referring the various books, websites, magazines and other sources related to Life insurance policies and companies. The data collected is pertaining to the theoretical aspects of insurance sector. Collection of information for the project is done from different kinds of books and through interne

2.2 NEED AND OBJECTIVE OF STUDY 

To study the life insurance services provided by LIC of India.



To obtaining information about the life insurance products.



To study the performance of LIC.



In order to study the growth cycle of LIC during post liberalization era



This research aims at finding out the impressions of the public about the basic need for life insurance.



To examine the Indian Insurance market and make a comparative study of the operations and claim settlement procedures



To study the different mechanisms of risk calculations, underwriting procedures, premium and bonuses offered and claim settlement procedures



To have an in depth understanding of the problems faced Life Insurance Companies and suggest suitable remedies.

2.3 SCOPE OF STUDY The study involves the life insurance services provided by the LIC of India and to show the better performance of LIC. This is done by interviewing the agent of LIC, policy holders of the respective company. Therefore the scope of the study is limited to some extent information gathered from these people. The study seeks to collect information from among the existing customer about their satisfaction level with regards to the services provided by the company. The scope is limited to the thane branch and it is collected from the people nearby holding life insurance policies.

2.4 LIMITATIONS OF STUDY 1. The Cons of a Life Insurance chosen carefully is almost negligible. However the disadvantage of Life Insurance arises when it is used as an investment product. Insurance companies also promote these as people are uncomfortable in paying premiums on which returns are uncertain. 2. People buy insurance when they have no need for example an old woman buying life insurance. Also the example of buying life insurance for a very long time period till you are 80 years old. At that age you have no need since you would have no dependents and earning power as well. 3. Millions of people every year buy insurance products without understanding it. Most of the complex products give suboptimal returns and have no suitability for the buyers. Agents frequently give bad advice to get more commissions. Companies also make more money by selling complex product which people don’t understand. 4. People have little clue and don’t compare life insurance products even from the same provider. Sometimes they buy insurance policies which are far too expensive leading to heavy burden which is unnecessary.

CHAPTER 3 REVIEW OF LITERATURE

CHAPTER 4: DATA ANALYSIS AND INTERPRETATION

1. Are you a LIC policy holder?

4%

YES NO 96%

Interpretation: Among total respondents 96% respondents hold Life Insurance policy of LIC, while 4% do not hold Life Insurance policy of LIC.

2. You have been dealing with LIC for the last how many years?

11%

4%

18%

Less than 2 years 2 to 5 years

67%

5 to 10 years More than 10 years

Interpretation: Among total respondents 11% respondents are dealing with LIC for less than 2 years, 4% for 2 to 5 years, 18% for 5 to 10 years and 67% for more than 10 years.

3. Main reason for sticking to LIC of India?

23%

Quality Less Premium

47% 7%

Better terms Better services All of the above

13% 10%

Interpretation: Among total respondents 23% respondents are dealing with LIC because of its quality, 7% because of less premium, 13% because of better terms,10% because of better services and 47% because of all of the above services provided

4. Are you happy with the services of LIC of India?

3%

YES NO 97%

Interpretation: Among total respondents 97% respondents are happy with the services of LIC and the remaining 3% are not happy with the services of LIC.

5. What is the periodicity of premium?

28%

Monthly 5%

59% 8%

Quarterly Half Yearly Yearly

Interpretation: Among total respondents 28% respondents pay their premium monthly, 5% pay their premium quarterly, 8% pay their premium half yearly and 59% pay their premium yearly.

6. Your mode of premium?

17%

13%

Cash

3%

Cheque Credit card Debit Card 67%

Interpretation: Among all respondents 13% respondents pay their premium in cash, 67% pay their premium by cheque, 3% pay their premium by credit card and 17% pay their premium by debit card.

7. Life Insurance in your opinion is important because of?

30%

30%

Risk Cover Tax Saving

10%

10% 20%

Investment Confidence Building All of the above

Interpretation: Among total respondents 30% respondents think life insurance is important because of risk cover, 10% because of tax saving, 20% Because of investment, 10% because of confidence building and 30% because of all of the above.

8. Your level of satisfaction with LIC?

0% 4% 20%

13%

Bad Worse Average Very good Excellent 63%

Interpretation: The satisfaction level of respondents with LIC is as follows; 4% bad, 0% worse, 13% average, 63% very good and 20% excellent.

9. What is your overall perception about LIC of India?

3%

Positive Negative 97%

Interpretation: The overall perception about LIC is 97% positive and 3% negative

CHAPTER 5 RECOMMENDATION AND SUGGESTION The insurance company must offer loan or bonus after a specified duration so that the amount given to the policyholder may help in supplement liquidity requirement like marriage, child care, untoward incidents and emergencies, for acquiring assets. 2. The agents must be trained enough to use need analyzer and apply financial planning to an individual policyholder so that they may explain all the benefits associated with the policy to their respective client. 3. On maturity the procedure of settlement of claim should be easy, fast and concise. The policyholder should able to get their surrender value/maturity value well in time with hassle free paper work. 4. Some of the policyholders face problem when they surrender their policy and want to withdraw the deposited amount against any policy. The agents emphasize that they should continue the policy and necessary explanation should be given in order to continue the policy. 5. The company should provide option for auto-switching option and fund transfer options to the policyholders according to the profitable portfolio available in the market from least profitable plans to most profitable plan. 6. The companies should also consider the time value of money and the insurance policies may be reframed by which the insurer may get higher yield and return. 7. Money back policies are needed to be restricted in a better way so that investor may get some recurring amount after a periodic interval. This could motivate the policyholder to take insurance as a continuous profitable opportunity. 8. Low premium insurance policy should be introduced to cater the need of low income groups, students and dependents. One time premium policies should be offered to the poor with low premium amount so that more people could get insured. 9. Policyholders demand a policy with lump sum return or regular income at frequency ntervals of time and at the verge of retirement, for children marriage and education. 10. Policyholders expect more novelty in the products of LIC since is a known, familiar and trusted brand among urban and rural policy holders.

CONCLUSION The study was a concise study of the variables related to policyholder buying decisions and the factors influencing buying decisions for purchasing insurance policy. The findings help in the development of a valid conclusion for assessing determinants of policyholder behaviour for life insurance policy in. After processing, analyzing and summarizing the collected data the crux of the study presented in this chapter. The study was primarily based on a selfdesigned structured questionnaires therefore the research instrument was statistically tested and various statistical methods were applied to conclude the research findings. The main objective of study was to show that how LIC of India is better than Life insurance policy companies. The data is collected from the policy holders of both the companies. The results indicated that the quality of services offered to the policyholders and reputation of the insurance company was the another influencing criteria for the policyholder of the insurance policy followed comfort and promptness provided to the policyholder. Ambience and experience of service provider also influence the policyholders in deciding the insurance policy up to some extent. The policyholders are rational and want to take investment and financial decisions after exhaustive study therefore expect transparent and precise terms and conditions for ease.

BIBLIOGRAPHY  www.wikipedia.org  www.licindia.com  www.pdfcoke.com  www.irdai.gov.in  www.easypolicy.com  www.myinsuranceclub.com  http://en.wikipedia.org/wiki/Insurance  http://www.economywatch.com/indianeconomy/india-insurance-sector.html 

Primary data by survey

ANNEXURE QUESTIONNAIRE FOR POLICY HOLDERS Name: Q.1. Age  Less than 30 years  30 to 40 years  40 to 50 years  50 years and above Q.2. Gender  Female  Male Q.3. Marital Status  Married  Unmarried Q.4. Educational Qualification  Matriculation and below  Under- graduate  Graduate  Post graduate  Professional qualifications(if any) Q.5. Family Size  Less than 2  2 to 4 members  4 to 6 members  More than 6

Q.6. Occupation  Government employee  Private employee  Business man  Retired employee  Professional Q.7. Monthly Income  Below Rs 10000  Rs 10000 to 20000  Rs 20000 to 50000  More than Rs 50000 Q.8. Are you a LIC policy holder?  Yes  No  Other Q.9. You have been dealing with LIC for the last how many years?  Less than 2 years  2-5 years  5- 10 years  More than 10 years Q.10. Main reason for sticking to LIC of India  Quality  Less premium  Better terms  Better services  All of the above

Q.11. Are you happy with the services of LIC of India?  Yes  No Q.12. What is the periodicity of premium?  Monthly  Quarterly  Half yearly  Yearly Q.13. Your mode of premium?  Cash  Cheque  Credit card  Debit card Q.14. Life insurance in your opinion is important because of?  Risk Cover  Tax saving  Investment  Confidence building  All of them Q.15. Your level of satisfaction with LIC  Bad  Worse  Average  Very good  Excellent

Q.16. What is your overall perception about LIC of India?  Positive  Negative