Bharti Axa Life Insurance
Content
A PROJECT REPORT ON
³CUSTOMER PERCEPTION ABOUT BENEFITS OF BRIGHT STARS PLUS´
WINTER TRAINING ORGANISATION
BHARTI AXA LIFE INSURANCE CORPORATION LTD.
SUBMITTED IN PARTIAL FULFILLMENT FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) (SESSION 2008-2010)
Submitted To: Faculty Institute Roll no. 4046 Uni.Roll No-1378 Uni. Regd. No. 08-HIM-1 Submitted by: S/oSh. ROOP LAL
Mr. GOURAVSOM RAJ (MBA 2nd year)
HIMALAYAN INSTITUTE OF MANAGEMENT, KALA-AMB.
Under the patronage of Maa Saraswati Educational Trust,( Regd. ) Approved By AICTE, Delhi.(Government of India) Affiliated to- Himachal Pradesh University, Shimla
1
Acknowledgement
It is said, ³No learning is possible without any proper guidance and no research endeavour is a solo exercise, some contribution is performed by various individuals´. By acknowledging the guidance, support and assistance, I pay my deepest sense of gratitude to the Management of Bharti Axa Life Insurance Company Limited. I am very much thankful to the management of the Bharti AXA Life Insurance Company Ltd. for giving me an opportunity to do this project as a part of my PGPM program. The completion of this project is a successful and satisfactory out come of so many helping hands. I think it proper to express my deep obligation to my advisers. First and foremost, I am especially thankful to Mr. Naresh Gupta (Agency Development Manager, Bharti AXA Life Insurance company Ltd. Jammu) for his active co-operation and help for the completion of my project at Jammu. I also thankful to Miss. Arpana Bajaj (Agency Manager) and staff member of the organization for rendered service and provide various information to my purpose. Their suggestions are helping me in various stages. I am immensely thankful to Dr. Vikas Arora (Director), Himalayan Institute of Management, kala amb distt.Sirmour (H.p.) for his co-operation at all the time. My special wishes and thanks shall always be for those who responded me and extended their co-operation in preparing and collecting data by which this Project Report has been smoothly conducted.
~2~
~3~
PREFACE
Theoretical knowledge without the practical exposure is of life value. Theoretical studies in classroom are not sufficient to understand the functioning and nature of research. Therefore it becomes necessary to undergo any research project work. Practical project supplements the theoretical studies i.e. it covers what is left uncovered in the classroom. It exposes a student to invaluable pleasure of experiences. I complete my research project on the topic ³Customer Perception about the benefits of BRIGHT STARS PLUS´. During the research project, I got an opportunity to learn valuable things, which I could not have been able to learn from theory classes. In nutshell, whole my project was invaluable experience in the pursuit of knowledge. In the forthcoming pages attempt has been made to present a comprehensive report concerning different aspects of my research. The overall gain to me will be reflected in the report itself.
~4~
Declaration
I hereby declare that this report on ³Customer perception about the benefits of bright stars plus.´ has been written and prepared by me during the academic year 2008-2010.This project was done under the able guidance and supervision ofMr. Naresh Gupta, ADM Jammu Branch in partial fulfilment of the requirement for MBA-marketing course of the Himalayan institute of management, kala amb
I also declare that this project is the result of my own effort and has not been submitted to any other institution for the award of any Degree or Diploma.
Place: Jammu Mr. Som Raj MBA-Marketing.
~5~
INDEX
CONTENTS
1. Organisation overview7-24
A. BhartiAXA Life Insurance fact sheet a) The company b) Bharti AXA Life Insurance company Ltd. (i) Bhartienterprises . (ii) AXA group y History y AXA name y AXA Asia pacific holdings y AXA global set of values (iii) Vision of Bharti AXA life (iv) Our values (v) Ambition 2012, earning preference (vi) Our strategy (vii)Our presence (viii)Management profile (ix) Under the umbrella of Bharti (x) Bharti is the first (xi) Achievements (xii) Awards
PAGE NO.
2.Objective of the report25 3. Scope of the report26 4. Executive summary 5. Literature review
27
28-29
6. Project in the company30-77
(i) Introduction (ii) Background (iii) Indian insurance industry (iv) Purpose and need of insurance (v) How insurance works (vi) Role of insurance in economic development (vii)What is life insurance
~6~
(viii) Why do i need life insurance (ix) Key benefits of life insurance (x)Principle of life insurance (xi) Life insurance contracts (xii) Essentials of a contract (xiii)Section 45 of insurance act 1938 (xiv)Facts which need not be disclosed (xv)Different risks (xvi)Needs and insurance (xvii)Life stage profiler (xviii)Life insurance plans (xix)Human life value (xx) What is linked policy (xxi)Bright stars plus (a)Advantages (b)How does bright stars plus works (c)Benefits of bright star plus (d)Applicable charges (e)Plan details (f)Tax benefits (g)Terms and conditions (h)Computation of unit price (j)Risk of investment in ULIPs
7. Researchmethodology 78-80 8. Data analysis and interpretation81-92 9. Finding 93 10. Limitations of the study
94
11. Suggestion and recommendations 95 12. Conclusion 96 13. Biblography97 14. Annexure98-100
~7~
ORGANSATION OVERVIEW
~8~
A. BHARTI AXA LIFE INSURANCE FACT SHEET
(a) THE COMPANY
Bharti AXA is a joint venture between Bharti enterprises, a trusted brand name and AXA world leader in financial protection and wealth management.
y y
A Trusted Brand Name A Trusted Brand name. All India Presence Global Presence.
~9~
y
Largest In the Telecom industry y Strong Financial Base
Largest In the Insurance Industry. Strong Financial Base
(b)
Bharti AXA Life Insurance Company Limited:-
Bharti AXA Life Insurance is a joint venture between Bharti, one of India¶s leading business groups with interests in telecom, agri. business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 26% stake of AXA. The company launched national operations in December 2006. Today, it has over 5200 employees across over 12 states in the country. Our business philosophy is built around the promise of making people "Life Confident".
(i)Bharti Enterprises:Bharti Enterprises is one of India¶s leading business groups with interests in telecom, retail, manufacturing, agri. business and financial services. Bharti Airtel is Asia¶sleading integrated telecom services provider with operations in India and Sri Lanka. Bharti Airtel has been at the forefront of the telecom revolution and has transformed the sector with its world-class services built on leading edge technologies. In financial services, Bharti is partnering with AXA of France to offer life insurance, general insurance and asset management. Bharti Retail, the 100% subsidiary of Bharti Enterprises operates multiple format consumer friendly stores. Bharti Wal-Mart is a B2B JV with Wal-Mart for wholesale cash-and-carry and back-end supply chain management operations. The other businesses in the group are Beetel for communication and media devices and Bharti Del Monte India, a JV with Del Monte to offer fresh and processed fruits & vegetables in India as well as international markets.
~ 10 ~
(ii) AXA Group:y AXA is a French global insurance companies group headquartered in Paris. AXA is not the name of a single company but a group of companies independently organized and operated according to the regulations of many different countries. The AXA groups of companies are engaged in life, health and other forms of insurance, as well as investment management. The AXA group operates primarily in Western Europe, North America and the Asia Pacific region and the Middle East. The AXA Group encompasses five operating business segments: Life & Savings, Property & Casualty, International Insurance
~ 11 ~
(including reinsurance), Asset Management and Other Financial Services.AXA ranks as the 15th biggest company in the world (based on revenue) on the 2006 Fortune Global 500 list.
y History
The Company was originally founded in 1816 as Mutuelle de L'assurancecontre L'incendie (the Ancienne Mutuelle). It acquired Compagnie Parisiennede Garantie in 1978 and became Mutuelles Unies.It went on to buy the Drouot Group in 1982 at which time it adopted the AXA name.The takeover of The Equitable, a well known American insurer, came in 1991.It bought Union des Assurances De Paris (UAP), France's largest insurer, in 1996 becoming AXA-UAP for a while before reverting to the name AXA in 1999. Then in February 1999 AXA acquired Guardian Royal Exchange. In May 2000 AXA acquired all shares it did not already own in Sun Life & Provincial Holdings. On 14 June 2006 AXA acquired the leading Swiss insurance company Winterthur Group from Credit Suisse for approximately ¼9 billion.
y The AXA name
Despite being written in upper case, "AXA" is not an acronym, but was chosen because its name can be pronounced easily by people who speak any language. After acquiring the Drouot Group in 1982, the company hired an outside consultant to conduct a computer-aided search for a new name. The selection criteria consisted of a short and snappy name to convey vitality, a name that begins with the letter A so that it would appear near the top of all lists, and something that could be pronounced easily in every language, consistent with the group's desire for an international presence. In 1985, Chairman and CEO Claude Bébéar chose the name AXA.
~ 12 ~
y AXA Asia Pacific Holdings
AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian stock exchange and is 52.3% owned by AXA SA. AXA APH is responsible for AXA SA¶s life insurance and wealth management businesses in the Asia-Pacific region. It has operations in Australia, New Zealand, Hong Kong, Singapore, Indonesia, Philippines, Thailand, China, India and Malaysia. AXA APH had A$106.4 billion in total funds under management and administration at 30 June 2007 and reported a profit after tax before non-recurring items of A$374.0 million for the six months ended 30 June 2007
~ 13 ~
(iii) VISION of Bharti AXA
Our vision is to be a leader and the preferred company for financial protection and wealth management in India.
(iv) OUR VALUES
Professionalism Innovation Team Spirit Pragmatism Integrity
(v) Ambition 2012, earning preference
Becoming the preferred company in the industry is the founding objective of ambition 2012. It gives meaning to the initiatives undertaken by axa people around the world, and mobilizes axa people in the workplace.
~ 14 ~
(vi) Our Strategy
To achieve a top 5 market position in India through a multi-distribution, multi-product platform. To adapt AXA¶s best practice blueprints as a sound platform for profitable growth. To leverage Bhartis local knowledge, infrastructure and customer base. To deliver high levels of shareholder return. To build long term value with our business partners by enhancing the proposition for their customers. To be thee employer of choice to attract and retain the best talent in India. To be recognized as being close and qualified by our customers.
(vii) Our presence
Hyderabad Kolkata Chennai Ahmadabad Ludhiana Luck now Surat Kochi Indore Chandigarh Vadodra Nagpur Bhubaneswar Jaipur
Mehsana Nawashair Bhatinda Noida Gurgao Howrah
~ 15 ~
Kharagpur Durgapur Siliguri Jamshedpur Vijayawada Pondicherry Calicut Trivandrum Trissur Erode Amritsar Jalandhar Patiala By 31st December 2008 we will be in 68 cities and 203 points of presence.
~ 16 ~
Management Profile
~ 17 ~
Sunil Bharti Mittal
Founder,Chairman and Managing director of Bharti group
.
Sunil Mittal got interested in push Button Phone while on a trip to Taiwan, and in 1982, introduced the phones to India replacing the old fashioned, bulky rotary phones that were in use in the country then. Bharti Telecom Limited (BTL) was incorporated and entered into a technical tie up with Siemens AG of Germany for manufacture of electronic push button phones. The turning point came in 1992 when the India government was awarding licenses for mobile phone services for the first time. One of the conditions for Delhi cellular license was that the bidder has some experience as telecom operator. Mittal clinched a deal with the French telecom group Vivendi. Two years later, Sunil secured rights to serve New Delhi. In 1995, Bharti Cellular Limited (BCL) was formed to offer cellular services under the brand name Airtel. Within a few years Bharti became the first telecom company to cross the 2million mobile subscriber marks. Always on the move and making and impact and excelling in whatever he did, this clear thinking risk taker has changed the face of the Indian ICT space. For his contributions he has been honoured with several awards. He was chosen as one of the top entrepreneurs in the world for the year 2000 and amongst µStars of Asia¶, by µBusiness Week¶, he received IT Man of the yearAward 2002 from Dataquest and CEO Of the Year, 2002 Award (World HRD Congress). He is the member of National Council of Confederation of Indian Industry (CII), Federation of Indian Chambers of Com. (FICCI), Chairman, Indo-US Joint Business Council, Member, Advisory Committee constituted by Ministry of IT.
~ 18 ~
Nitin Chopra
Chief Executive Officer Nitin Chopra (49) is the Chief Executive Officer (CEO) of Bharti AXA Life Insurance Company Ltd (Bharati AXA). An engineer from Indian Institute of Technology (IIT) Kanpur and an MBA from Indian Institute of Management (IIM) Ahmedabad, Nitin brings with him 24 years of rich experience in the corporate world, of which the last 15 years have been in the financial services industry. He started his career with the Unilever Group, before moving on to Bank of America NT & SA, where he spent nine years in different capacities, including Vice President & Business Director, Retail Liabilities. Nitin was instrumental behind several µfirsts¶ in the Indian retail banking industry, including introducing 365 extended banking, doorstep banking and tiered fee. He played a pivotal role in the transition of Bank of America¶s retail business to ABN AMRO Bank, as a consequence of a regional sale. Following the sale, he moved to ABN Amro Bank N.V as Head of the Consumer Banking Division from July 1999 to May 2006. He played a significant role in conceptualizing best practices in the Banc assurance business in India, with innovative product and distribution strategies. Launch of Bancafe and Mobile Power are some of the market µfirsts¶ to his credit. He enabled the Bank achieve leadership position as a Wealth Manager. During Nitins stint, the revenue for consumer business increased over seven times. As the CEO of Bharti AXA, he manages the entire Indian operations of the private life joint venture between Bharti Enterprises, one of India¶s leading business groups with interests in telecom, agri. business and insurance, and AXA, world leader in financial protection and wealth management
~ 19 ~
Tim Thomas
Chief Operating Officer Tim Thomas is the Chief Operating Officer of Bharti AXA Life Insurance Company. A Bachelor of Commerce and Bachelor of Laws from the University of Melbourne, Tim has over 12 years of experience in financial services. Tim's first assignment was with the chartered accounting and management consulting firm Coopers and Lybrand (now PWC). He then moved to Colonial Group as Corporate Counsel before taking key corporate finance responsibilities. Tim was awarded a corporate scholarship to pursue a Master of Business Administration at the University of Melbourne (Melbourne Business School) which he completed with Honours in 1999.
In 2000 Tim joined Medi bank Private, market leader in the Australian private health insurance market, as Head of Strategy. He then joined AXA Asia Pacific Holdings Ltd in 2002 in Group Strategy where he lead several key strategic initiatives for the group including the design of the successful AXA 6 business programmed for the Australia wealth management business and the India market entry strategy. Tim moved to India in early 2005 as the AXA's Chief Representative and Market Entry Director where he lead the establishment of the joint venture with Bharti across life insurance, general insurance and asset management, and launched the life insurance business. As Chief Operating Officer Tim is currently responsible for the life insurance operating platform, and is involved in several key business change initiatives across AXA in Asia.
~ 20 ~
PriyaRanjan
Director ± Human Resources Priya Ranjan is Director - Human Resources at Bharti AXA Life Insurance Company. He brings to the business over 15 years of HR experience in diverse fields spanning financial services, information technology and manufacturing. He specialises in building large scale businesses from their project days. Before joining Bharti AXA Life, Ranjan was with JPMorgan Chase Bank, Singapore as Vice President & Regional HR Manager - Technology & Operations (APAC) from May 2005, after serving the office of Vice President & Head - HR for the Global Service Centre of the Bank in India for about 3 years. Between June 1997 and May 2002, Ranjan was with GE Capital as Vice President & Head - HR for the credit card business, where he was a part of the Project Team responsible for creating the business in India.
He also has an entrepreneurial venture to his credit with Bangalore-based Team Excel, which specialised in recruitment & HR consulting. His first assignment was with Tata Steel as Sr. Personnel Officer from 1991 to 1994, followed by Microloans Ltd. as Manager - HR for two years. Ranjan is a BA (Hons) from St Xavier's College, Kolkata and holds a Post Graduate Diploma in Personnel Management from XLRI.
~ 21 ~
Shyamal Saxena
Chief Distribution and Marketing Officer Shyamal Saxena is the Chief Distribution and Marketing Officer of Bharti AXA Life Insurance Company.Shyamal Saxena brings to the business over 15 years of experience in the banking and financial services sector. Before joing us in October 2007, he was with HDFC Bank as Executive Vice President ± Retail Banking. He joined the Bank in 1999, after a seven year stint in various retail banking capacities at Bank of America. Shyamal is a management graduate from Jamnalal Bajaj Institute of Management Studies.
~ 22 ~
UNDER THE UMBRELLA OF BHARTI
1. Bharti Airtel Ltd
Bhartiairtel Ltdis India¶s leading provider OF TELECOMMUNICATIONS SERVICES. THE COMPANY HAS 4 DISTINCT BUSINESS DIVISIONS ± MOBILE & TELEPHONE SERVICES, BROADBAND SERVICES, LONG DISTANCE SERVICES AND ENTERPRISES SERVICES.
2. Bharti Tele Tech Ltd
BHARTI TELE TECH LTD. MANUFACTURES AND EXPORTS WORLD-CLASS TELECOM EQUIPMENT UNDER THE BRAND µBEETAL¶.
~ 23 ~
3. Telecom Seychelles Ltd
TELECOM SEYCHELLES LTD PROVIDES TELECOM SERVICES IN SEYCHELLES, UNDER THE BRAND µAIRTEL¶.
4. Bharti Telesoft Ltd
BHARTI TELESOFT LTD DELIVERS BEST-IN-CLASS, REVENUE-CRITICAL VAS PRODUCTS AND SERVICES TO TELECOM CARRIERS.
5. Teletech Services (India) Ltd
TELETECH SERVICES (INDIA) LTD IS JOINT VENTURE WITH TELETECH INC., USA .IT OFFERS A RANGE OF CUSTOMER MANAGEMENT SERVICES.
~ 24 ~
6. Field Fresh Foods Pvt. Ltd
FIELD FRESH FOODS PVT. LTD IS BHARTI¶S VENTURE WITH EL ROTHSCHILD GROUP OWNED ELRO HOLDINGS INDIA LTD., TO EXPORT FRESH AGRI PRODUCTS EXCLUSIVELY TO MARKETS IN EUROPE AND USA.
BHARTI IS THE ³FIRST´
I. II. To launches India¶s first private sector National Long Distance service. Mobile services to cross the three million customer mark and to cross in Himachal. 1, 00,000
III. IV. V. VI.
To launch world¶s first Flexi ± Recharge pre-paid Coupon for its customer. To announce innovative outsourcing to enhancing Quality of Customer services. To launch talk-time transfer service for its pre-paid customers in Delhi. To win the prestigious µMIS Asia IT Excell
~ 25 ~
Achievements
: Bharti crosses 1 million customer mark in mobile services& records top-line growth of 67%. 2002 : Bharti gets international long distance service license and listed on BSE, NSE and DSE 2003 : Bharti tele-ventures near break-even Maintains market leadership with a market share of 26.5% of all India mobile customer base. 2004 : Airtel crosses the 6 million customer mark nationally, 2001 Bharti Tele-Ventures crosses Rs.5, 000 crores revenues &earns net profit of over Rs.600 crores for the year 2005 : Bharti Enterprises and AXA Asia Pacific holdings limited partnership for a life insurance joint venture in India 2006 : Bharti and Wal-Mart sing memorandum of understanding : Sunil B. Mittal chosen for ³Padma Bushan Awards´ announce
2007
Awards
Airtel wins the ³World Communications Best Brand Award´ Bharti Tele-ventures is the ³Asian Mobile news Mobile Operator Of The Year´ Airtel chosen as µMost Preferred Mobile Service¶ by CNBC Awaaz Consumer Awards Bharti Tele-ventures Is the Indian mobile Operator of the Year 2005 Bharti wins Silver Trophy at the Cll National Six Sigma Awards. Bharti Tele-Ventures amongst the top technology companies in the world Business week. Bharti foundation wins Golden Peacock award for corporate social responsibility.
~ 26 ~
OBJECTIVE OF THE PROJECT
y y y y y y y y
To know customer perception about benefits of bright stars plus. To know reasons from customer for purchase of life insurance products. To know the popularity of ULIP in present scenario. To know investment concern of investors. To know investment portfolio of investors. To know which product of Bharti Axa Life will customer like most. To know satisfaction level of customer. To know market share of Bharti Axa Life Insurance Company Ltd
~ 27 ~
SCOPE OF THE PROJECT
The scope of the study lies in finding out the perception of customers about the BENEFITS OF BRIGHT STARS PLUS in JAMMU AND KATHUA CITY through responses taken by 200 customers during a period of 60 days and highlighting the key areas which acquire some concern of the BHARTI AXA LIFE INSURANCE COMPANY LIMITED and improving upon which company may strengthen its customer base. The present study, analysis, findings and suggestions proposed by the present researcher will be of immense use for future researcher with similar studies in insurance market.
~ 28 ~
EXECUTIVE SUMMARY
The project titled ³CUSTOMER PERCEPTION ABOUTBENEFITS OF BRIGHT STARS PLUS´. Possession of Insurance Policy & Recruitment of financial Advisors has been increased through decades, which is best seen in the rise of customer by different Insurance Life Insurance Companies. According the recent market survey, it is being observed that the Insurance companies are doing well in the marketing & retention of customers. In the near future there is a huge possibilities of increase of the Insurance market because of the better service provided by the companies & market competition. In this project the main emphasis is given to the benefits of bright stars plus provided to the customer, perception of customers from the companies, aware the company about customer expectation.
~ 29 ~
LITERATURE REVIEW
Dr.N.Panchanatham & S.jhansi (2008) stated that today maximum number of people have the knowledge of insurance and its benefit as a result the urban population got more attention and it led to good insurance penetration in urban area as well as rural area also. Maximum policy holders have cordial relationship with agents and policy holders are interested to recommend the policy for their friends & relatives.
Sanket vij &H.J.Ghoshroy (2008) find in their present study researcher believe that for enhanced customer satisfaction and better services quality, the customer centric delivery mechanism of insurance services supported by eCRM technologies play a significant role in customer delight movement .And also believed that the service providers positive frame of mind and respect for their clients would delight the customers of life insurance sector of India.
Sunayna khurana (2008) stated that protection is the main purpose of buying an insurance policy. Only 6.3% of the respondent faced problems. And 56%of the respondents are ready to buy new insurance plans from the same company.
Paromita Goswami (2007) observe that proper implementation would not only ensure increased customer satisfaction but also help in acquiring new customers at same time retaining the old customer. Improved customer satisfaction would also result in positive world of mouth and consequently better customer acquisition and retention.
~ 30 ~
B S Bodla and Sushma rani verma (2007) a large number of respondent have got inured themselves for life coverage and for future contingencies. LIC has got the maximum 93% market share among various life insurance players. Most of the respondents were found to be satisfied with performance of the insurance companies. T Sri jyothi (2007) he stressed that the importance of adaptation measures to attract insurance companies towards offer in catastrophic risk insurance and disaster insurance at affordable prices.
Sunil Mahesware (2005) in her article entitled managing insurance managing agent pointed out that only quality agent can sale insurance product in market.
Jack Burke (2005) stated that, the art of building a relationship stressed that only post sale service help in capturing more customers.
Gautam Bansal and Pawan Teneja (2005) find that life insurance advertisement on TV will be more effective if they have emotional appeals has better influence. It is more socially oriented.
Ravi kumar Sharma (2005) he observed that LIC has higher brand awareness. LIC agents are more effective than other private insurance agents. Rural people have less faith in private players.
Dobhal (2002) stated that media had traditionally played little part in influencing decisions, but today there is a growth and shift from print to television.
~ 31 ~
Matienzo peter j (2001) stated that selling of insurance is more effective when a blend of personal involvement is added to it. Value added practices such as ringing the clients telephone on his birthday or
sending a gift. Also providing some value added service to client such as providing information and expert comments on other areas not related to the profession helps.
Tandon,et al (1997) reported that majority of the respondents have a positive attitude towards advertisement in general. They have clearly indicated that advertisement has a useful role to play in the society.
B.K.S.Parkesh Rao and B.H.Venkateswara Rao (2005) stated that the establishment of micro-branches and the appointment of specialized insurance agents in rural areas help policy holders to market different insurance product.
~ 32 ~
PROJECT IN THE COMPANY
~ 33 ~
INTRODUCTION
According to Maslow¶s need hierarchy, security needs are second only to basic needs. Man¶s desire to feel safe and protected from future disasters or undesirable events led to the concept of insurance.A thriving Insurance sector is of vital importance to every type of economy whether developed or developing or under developed, as it encourages the savings habit and provide a safety net to rural/urban enterprises and productive individuals. By saving, people help the nation. The amount paid as premium is the most important tool for development and growth of a nation as it generates long term investible funds. Worldwide, Insurance is used as a risk cover instrument whereas Indian consumer perceives it as a tax-saving and investment option. The vast potential of the 250 million strong middle class population of India, can be unleashed by repositioning it as a risk cover instrument. The factors which could lead to a larger market penetration are Greater market awareness Increase tax base Education Changing socio-economic trends.
All this can be achieved by giving business opportunity to quality people as an agent advisor in insurance sector and thus expanding the distribution channel. Product and prices in an insurance industry are easily duplicated and thus are more or less same. So the difference lies in the services provided by the companies which give competitive edge in the long run. So the channel through which a company can achieve market penetration by providing efficient services should be that of recruiting more and more advisors in its distribution channel. The advisor¶s role is very important in an insurance sector as they are able to accomplish the following important services-: Assessing and analyzing the client¶s risk profile. Finding the best possible solution for the customer. Designing product according to the need of the customer
~ 34 ~
Negotiating the best deal available Continuity of the service throughout the period of Insurance claims advisory services.
The reason why this channel distribution system is lagging in India is because of high cost of recruiting but low revenue due to lower penetration of the market. Channel decisions are now elevated to a strategic level. The overriding concept is to become customer-centric and to focus channels on improving the customer experience. But it is not advisable to use all channels to serve all customers. Some customer segments may prefer certain channels, but if these segments are not profitable, it may be prohibitively expensive to serve them using their preferred channels. Consequently, insurance companies need to tailor their channels to appeal to the largest number of profitable customers to maximize earnings
(ii) Background
By any yardstick, India, with about 200 million middle class households, presents a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. Graphs and statistics reflect the low percentage of per capita penetration of insurance in India compared to other developed and developing countries. The Insurance sector in India is one and half centuries old. Pre-liberalization, the Insurance market was monopolized by LIC, GIC and its four subsidiaries. The opening up of the Insurance sector has seen a surge not only in the number of foreign players entering the market but also in the variety of products being offered. The total premium in India is approximately 2% of our GDP, which is far below the world average of 7.8% the insurance penetration in India is only 2% Per capita income of the India is expected to grow at over 6% for the next 10 years, In a similar way, with the increasing awareness levels among Indian citizens; The demand for insurance is expected to grow at an attractive rate of interest. An independent consulting company, The Monitor Group, has estimated that the Life insurance market will grow from Rs.218 billion in 1998 to Rs.1003 billion
~ 35 ~
By 2008 (a compounded annual growth of 16.5%).
INDIAN INSURANCE INDUSTRY
Life Insurance:
In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. ³Unethical practices adopted by some of the players against the interests of the consumers´ then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that ³nationalization has lent the industry fairness, solidity, growth and reach.´
Some of the important milestones in the life insurance business in India
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: The market contained 154 Indian and 16 foreign life insurance companies.
~ 36 ~
(iv) Purpose and need of insurance:The business of insurance is related to the protection of the economic value of assets. Every asset has value. The asset would have been created through the efforts of the owner, in the expectation that, either through the income generated there from or some other output, some of his needs would be met. In the case of a factory or a cow, the production is sold and income generated. In the case of a motorcar, it provides comfort and convenience in transportation. There is no direct income. There is normally expected life time for the asset during which time it is expected to perform. The owner, aware of this, can so manage his affairs that by the end of that life time, a substitute is made available to ensure that the value or income is not lost. However, if the assert gets lost earlier, being destroyed or made non functional, through an accident or other unfortunate event, the owner and those deriving benefits there from suffer. Insurance is mechanism that helps to reduce such adverse consequences. A human life is also an income generating asset. This asset also can be lost through unexpectedly early death or made non-functional through sickness and disabilities caused by accidents. Accidents may or may not happen. Death will happen, but the timing is uncertain. If it happens around the time of one¶s retirement, when it could be expected that the income will normally cease, the person concerned could have made some other arrangements to meet the continuing needs. But if it happens much earlier when the alternate arrangements are not in place, insurance is necessary to help those dependent on the income.
(v) How Insurance works?
While it may seem complex, insurance is really quite simple: The payments (or premiums) of the many pay for the losses of a few. Your premiums go into a large pool, if you will, at your insurance company. The claims of the few are paid from that pool. Because there are more people contributing to the pool than there are making claims, there is always enough to pay the claims ± even large single claims like when someone is permanently disabled as a result of a car collision, or many smaller claims like those resulting from a natural disaster. (The 1998 ice storm that hit parts of Ontario, Quebec and New Brunswick resulted in an estimated 700,000 claims for damage totaling $1.4 billion.) However, large disasters (such as the ice storm) do come close to emptying the pool.
~ 37 ~
Insurance for insurance companies:Even when the pool comes close to emptying, there is another pool from which insurance companies can draw to pay claims. Some of your premiums are used by your insurance company to buy reinsurance ± insurance for insurance companies. Sometimes losses are so big ± like those resulting from an earthquake ± that there is no way that an insurance company can cover the costs. Reinsuranceis an extra layer of protection against large losses.
Annual replenishing:Your insurance is an annual contract, so the pool operates for only one year at a time. Your premiums and the premiums of others are based on how much money the insurance companies think they will need to pay the coming year¶s claims. Your premiums do not build up over the years ± unlike the premiums for some types of life insurance.
The Business of Insurance:Insurance companies are called insurers. The business of insurance is to (a) brings together persons with common interests (sharing some risks), (b) collect the share or contribution (called premiums) from all of them, and (c) pay out compensations (called claims) to those who suffer from the risks. In India, insurance business is classified primarily as life and non-life insurance or general insurance.
Reinsurance:Reinsurance is a means by which an insurance company can protect itself with other insurance companies against the risk of losses. Individuals and corporations obtain insurance policies to provide protection for various risks (hurricanes, earthquakes, lawsuits, collisions, sickness and death, etc.). Reinsurers, in turn, provide insurance to insurance companies. There are many reasons why an insurance company would choose to reinsure as part of its responsibility to manage a portfolio of risks for the benefit of its policyholders and investors. The main use of any insurer that might practice reinsurance is to allow the company to assume greater individual risks than its size would otherwise allow, and to protect a company against losses. Reinsurance allows an insurance company to offer higher limits of protection to a policyholder than its own assets would allow. For example, if the principal insurance company can write only $10 million in limits on any given policy, it can reinsure (or cede) the amount of the limits in excess of $10 million.Reinsurance¶s highly refined uses in recent years include applications where reinsurance was used as part of a carefully planned hedge strategy
~ 38 ~
(vi) Role of Insurance in Economic Development:For economic development, investments are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments for economic growth. An insurance company¶s strength lies in the fact that huge amounts come by way of premiums. Every premium represents a risk that is covered by that premium. In effect, therefore, these vast amounts represent pooling of risks. The funds are collected and held in trust for the benefit of the policyholders. The management of insurance companies is required to keep this aspect in mind and make all its decisions in ways that benefit the community. This applies also to its investments. This is why successful insurance companies would not be found investing in speculative ventures. Their investments benefit the society the society at large. The very existence of risk that is, uncertainty concerning the future, is a severe handicap in economic activities. Insurance removes the fear, worry and anxiety associated with this future uncertainty and thus encourages free investment of capital in business enterprises and promotes efficient use of existing resources. Thus insurance encourages commercial and industrial development and there by contributes to a vigorous economy and increased national productivity. Present day organization of industry, commerce and trade depend entirely on insurance for their operation, banks and financial institutions lend money to industrial and commercial undertakings only on the basis of the collateral security of insurance. No bank or financial institution would advance loans on property unless it is insured against loss or damage by insurable perils.
(vii) What is Life Insurance?
Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects yours family from financial crises. In addition to serving as a protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably.
~ 39 ~
(viii)Why Do I Need Life Insurance?
Isn't that what you ask yourself all the time? Here's a small answer to that You need Life Insurance because typically the need for income continues for those who are financially dependent on you, but there is no guarantee of your ability to earn consistently and for the rest of your life. Life insurance can help you safeguard the financial needs of your family. This need has become even more important due to steady disintegration of the prevalent joint family system, and emergence of nuclear families. The need to protect your family's ever growing needs is why you need Life Insurance.
(ix)Key Benefits of Life Insurance
Life insurance, especially tailored to meet your financial needs
Need for Life Insurance
Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets.
Let us look at these unique benefits of life insurance in detail. Asset Protection
From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation. The core benefit of life insurance is that the financial interests of one¶s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.
~ 40 ~
Goal based saving
Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence. Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailor-made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. The table below gives a general guide to the plans that are appropriate for different life stages.
Life Stage Young & Single
Primary Need Asset creation
Life Insurance Product Wealth creation plans Wealth creation and mortgage protection plans Education insurance, mortgage protection & wealth creation plans Retirement solutions & mortgage protection Health Insurance
Young & Just married Asset creation & protection Children's education, Asset creation and protection Planning for retirement & asset protection Health plans
Married with kids Middle aged with grown up kids Across all life-stages
~ 41 ~
(x)Principles of Life Insurance:Indeminity
A contract of insurance contained in a fire, marine, burglary or any other policy (excepting life assurance and personal accident and sickness insurance) is a contract of indemnity.
Utmost good faith
Since insurance shifts risk from one party to another, it is essential that there must be utmost good faith and mutual confidence between the insured and the insurer. In a contract of insurance the insured knows more about the subject matter of the contract than the insurer. Consequently, he is duty bound to disclose accurately all material facts and nothing should be withheld or concealed. Any fact is material, which goes to the root of the contract of insurance and has a bearing on the risk involved. It is only when the insurer knows the whole truth that he is in a position to judge (a) whether he should accept the risk and (b) what premium he should charge.
Insurable interest
-A contract of insurance affected without insurable interest is void. It means that the insured
must have an actual pecuniary interest and not a mere anxiety or sentimental interest in the subject matter of the insurance. The insured must be so situated with regard to the thing insured that he would have benefit by its existence and loss from its destruction.
Cause proxima
The rule of cause proxima means that the cause of the loss must be proximate or immediate and not remote.
Risk
In a contract of insurance the insurer undertakes to protect the insured from a specified loss and the insurer receive a premium for running the risk of such loss. Thus, risk must attach to a policy.
Mitigation of loss
In the event of some mishap to the insured property, the insured must take all necessary steps to mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he does not do so, the insurer can avoid the payment of loss attributable to his negligence.
Subrogation
The doctrine of subrogation is a corollary to the principle of indemnity and applies only to fire and marine insurance. According to it, when an insured has received full indemnity in respect of his loss, all rights and remedies which he has against third person will pass on to the insurer and will be exercised for his benefit until he (the insurer) recoups the amount he has paid under the policy. It must be clarified here that the insurer's right of subrogation arises.
~ 42 ~
Contribution
Where there are two or more insurance on one risk, the principle of contribution comes into play. The aim of contribution is to distribute the actual amount of loss among the different insurers who are liable for the same risk under different policies in respect of the same subject matter. Any one insurer may pay to the insured the full amount of the loss covered by the policy and then become entitled to contribution from his co-insurers in proportion to the amount which each has undertaken to pay in case of loss of the same subject-matter.
(xi)Life Insurance Contracts
A life insurance policy is contract, in terms of the Indian Contract Act, 1872. A contract is an agreement between two or more parties to do, or not to do, so as to create a legally binding relationship.
(xii)Essentialsofa Contract
(a) Offer and acceptance (b) Consideration (c) Free consent are consensus µad idem¶ (d) Capacity to contract (e) Legally binding relationship (f) Legality of object or purpose (g) Capability of performance Insurance is a specialized type of contract. Apart from the usual essentials of a valid contract, insurance contracts are subject to two additional principles viz. Principle of Utmost Good Faith & Principle of Insurable Interest. These apply to both life and non-life Insurance.
(xiii) Sec. 45 of Insurance Act 1938
Insurer¶s right to declare the policy void is however, restricted by sec. 45 of Insurance Act 1938 which says that if a policy has run for 2 years or more no insurance company can call it to question on the ground of any false or inaccurate statements unless such misrepresentation is material to the risk and fraudulently made
(xiv) Facts which need not be disclosed:
(a) Facts which which are common knowledge (b) Facts of law (c) Facts which a survey can reveal (d) Facts about with insurance company has waived further information (Principle of waiver) (b)To start with, you must have an insurable interest in the item you want covered. In other words, any untoward happening related to the insured item should result in afinancial loss to you. For instance, you have a financial interest in insuring a house you own. However, if you
~ 43 ~
have rented a house, it¶s your responsibility to get it insured only if it is explicitly stated so in the lease agreement. If it is not stated but you still insure it, and subsequently raise a claim, it is likely to be rejected by the insurer on the grounds that you don¶t have any insurable interest in the property, the owner of the house does. By the same principle, good belonging to others that might be lying in your house are not covered as part of your home insurance policy. If these are stolen or damaged, your insurer is likely to reject any claim made by you.
(xv) Different Risks
The life ins. Business deals with risks relating to life of human beings. The circumstances (perils) that create the loss of damage (risks) are mainly two, death and old age. Ins. Does not prevent either. Human beings also run the risk of sickness, accidents and unemployment these risks are insured by general insurance co. However supplementary benefits are riders. Risk can be managed by. Prevention is avoidance Retention Transfer
(xvi) Needs and Insurance
Risks arise because there are needs to be fulfilled. The risks attached to early death arise because of the need to maintain the family that is left behind. If there were not needs, there would be no risks. Insurance is, therefore, related to the needs of individuals. Different plans are designed with different benefits, so that they may cater to the different needs of people. While selling life insurance, therefore, it is necessary to be aware of the needs of people. Protection of the standard of living of the family is at risk on early death. Insurance must provide the necessary income to maintain the standard, after providing for repayment of loans and other debts. Modern lifestyles subject people to debts on account of car, house, appliances and equipment¶s at home obtained on hire purchase arrangements. Future expenses on account of children¶s education, marriage, start of some business and so on, which are ambitions and dreams these needs have to be met, after meeting the costs of inflation. People would not be consciously aware of these as formidable problems in the future. Even if they do, they may not be willing to sacrifice some of the pleasures of the present in order to provide for the future. This is the difficulty, which life insurance agents¶ face.
~ 44 ~
(xvii) Life Stage Profiler
All through your life, several significant events the birth of your child, moving to a larger home, his or her education and wedding, buying a new car, retiring from work will occur at various stages and demand your financial commitment. If you plan in advance for these events, you will quite naturally be prepared when they occur Life insurance is an effective tool that assists you to plan for your future such that you are financially equipped to meet all your goals. Which important goals should you plan for in advance?
1) Your family's protection - so that your loved ones are secure should an unfortunate event happen to you. Buying Life insurance assures that your family receives a lump sum that safely tides them over any financial crises that might occur in your absence. 2) Child's education: As parent, your primary responsibility is to ensure your children's future. Our Education Insurance plans ensure your child receives money at key stages of his or her education even in your absence. 3) Savings: Savings plans allow you to steadily save towards a pre-decided goal in a secure manner. These plans provide you with a host of benefits. You can choose the premium, the underlying fund in which you want to invest your money, the ratio between protection and investment as per your requirements. 4) Retirement: Retirement plans help you secure regular income for your retired life. During the Accumulation phase, you systematically save while you are working. When you retire, the Payout stage of the plan begins. You then purchase an annuity, which will serve as a steady stream of income, for the rest of your life. 5) Health: An integral part for financial planning is protecting oneself against any medical emergencies as well. Hence, a very prudent decision would be to choose a combination of plans that look after your finances and offer you a protective health cover to ensure your financial planning is in track despite any major illnesses.
~ 45 ~
(xviii) Life Insurance Plans
Life insurance products assure your family will receive financial support, even in your absence. Put simply, when you buy insurance you provide your family with a sum of money, should something happen to you. It thus permanently protects your family from financial crises. In addition to serving as a protective cover, when you buy insurance you create a flexible money-saving scheme, which empowers you to accumulate wealth to buy a new car, get your children educational solutions, and even retire comfortably. Today, there is no shortage of investment options for a person to choose from. Given the plethora of choices, it becomes imperative to make the right choice when investing your hardearned money, and online insurance is an ideal choice in today¶s technology driven world. Buying Life insurance online is a way to make a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets. From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, buying life insurance online gets you the unique reassurance of asset protection, along with a strong element of asset appreciation. When you buy life insurance online the core benefit is that the financial interests of one¶s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, buying life insurance online gives a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and online insurance products occupy a unique space in the landscape of investment options available to a customer. As your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Online insurance products are the only investment option that offer specific products tailor-made for different life stages. You are thus ensured that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. On the basis of which life stage you are in and the corresponding insurance needs, Bharti AXA plans can be categorized into the following three types:
~ 46 ~
Wealth Confident plans
Guarantee Builderplans
Dream Life Pension plans
~ 47 ~
Aspire Life plans
Save Confident plans
~ 48 ~
Secure Confident plans
(xix) Human Life Value
What is your Human Life Value? Beyond all doubt, your life is invaluable. Yet, there is a certain worth that can be attributed to the financial support you offer your parents, spouse or children. This worth is referred to as Human Life Value (HLV). In the future, if your family does not have the protective blanket of your presence, they will no longer be able to enjoy the benefits of the income you earned. Put simply, Human Life Value is the present value of your future earnings. Why should you calculate your Human Life Value? You should calculate your Human Life Value so you can accordingly invest in insurance plans that provide your family with adequate finances and hence security even in your absence. How do you determine your Human Life Value? Your Human Life Value is determined by 3 factors: 1. Your age 2. Current and future expenses 3. Current and future income As a thumb rule, if you are 30 years of age, you should insure yourself for an amount approximately 8 times your annual income. At 35, your investment should be close to 6 times your income. Of course, the exact amount of your investment should be determined by the number of people who depend on you, you¶re existing investments and your life stage. For example, if you are 30 years of age and have two children and parents to provide for, the amount you invest should be reflective of your requireme
~ 49 ~
(xx) What is linked policy?
Most importantly, what are ULIPs? Here, you will find all the information you need to set your mind at ease about how to invest in ULIPs, and which ULIP is right for you. ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by you. Simply put, ULIPs are structured in such that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency. Working of ULIPs It is critical that you understand how your money gets invested once you purchase a ULIP: When you decide the amount of premium to be paid and the amount of life cover you want from the ULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known as the Premium Allocation charge, and varies from product to product. The rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the ULIP fund management charges are adjusted from NAV on a daily basis. Since the fund of your choice has an underlying investment ± either in equity or debt or a combination of the two ± your fund value will reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the time of maturity. The pie-chart below illustrates the split of your ULIP premium: Broadly, insurance plans can be distinctly divided into ULIP (Unit Linked Insurance Plans) and traditional plans. A brief detail of both segments: (a) ULIPs (Unit Linked Insurance Plans) ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the attractive features they offer. Benefits include flexibility, Transparency, Liquidity, and Fund Options.
~ 50 ~
Flexibility Flexibility to change your life cover: ULIPs give you the flexibility to choose your sum assured (insurance cover) at the time of policy inception. Moreover, some ULIPs allow you to increase your sum assured over the term of the plan. This is crucial as your protection needs keep on changing with time .Typically, greater the financial liabilities you have such as repayment of a home loan, greater will be your need for protection. Flexibility to change premium amount: With ULIPs you can easily change premium amount as most ULIPs provide you the option to increase or reduce premiums after a certain period of time to match your premium paying capability. Another distinguishing feature of ULIP is Top up which is an additional contribution over &above regular premium so that if you receive extra money today you can invest the amount in your policy & maximize your investment gains. Flexibility to opt for a rider: ULIPs also enable you to customize the policy with optional riders to enjoy additional protection. Riders are additional or supplementary benefits that are bought along with the main insurance policy. Some of the commonly offered riders by most insurance companies are critical illness benefit rider, accident & disability benefit rider, waiver of premium rider etc. For ex. a critical illness rider cover major critical illnesses like heart attack etc. In case of contracting any of the above illness, the insurance company pays the insured amount.
Flexibility to choose your fund option: Most of the ULIPs come with an in - built range of fund options to choose from ±ranging from aggressive funds to conservative funds so that you can decide to invest your money in line with your investment preferences and needs. What¶s more, ULIPs even come with the option of switching between different fund options so that you are able to reap maximum benefits from your investments.
Transparency
ULIPS offer a high degree of transparency, where all charges in the plan as well as the entire net amount invested is made known to the customer. ULIPs also offer the convenience of tracking your investment performance on a day to day basis, so you can decide instantly where you want your assets allocated.
~ 51 ~
Liquidity
A ULIP offers you the option of withdrawing money a few years into the plan, allowing for the exigencies of life. Alternatively, a ULIP will also allow for partial/systematic withdrawal should the need arise. Fund Options A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a combination of the three. The customer is also afforded the option of choosing your fund mix based on your desired asset allocation. Equity Funds: In this type of fund, sometimes also called growth funds,there would be more investments in equities which are shares/stocks traded in the stock market. Debt Funds: In this type of fund, also called Bond funds, the investments are primarily in Government and Government guaranteed securities and such safe debts and other high investment grade corporate bonds. Money market funds: In this type of fund, sometimes also called liquid funds, the investment may be more in short term money market instruments such as treasury bills, commercial papers, etc. Balanced Funds: In this type of funds, the investments are in both equity as well as debts. (b) Traditional Plans These are the oldest types of insurance plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: 1. Steady Investment 1. Major chunk of investible funds are in debt instruments. 2. Steady and almost assured returns over the long term. 2. Features 1. Death benefit is Sum Assured + guaranteed & vested bonus. 2. Helps in asset creation as they are for a long tenure. 3. Premium to Sum Assured ratios are fixed for each plan and age. 4. Generally withdrawals are not allowed before maturity
~ 52 ~
Bright stars PLUS
{The launch pad for your child¶s bright future}
~ 53 ~
Bharti Axa life
In this Policy, the investment risk in the investment portfolio is borne by the Policyholder. As a caring parent, you want only the best for your child. As your child grows, his aspirations will grow too and so will your responsibilities. Whether it¶s higher studies abroad, a grand wedding or a comfortable home « you can now ensure that your child is always one step ahead ± financially. Bharti AXA Life Bright Stars with Jumpstart Benefit is a unique child plan designed to give your child the right launch pad into a promising future. At maturity, this plan offers an additional lump sum amount to take care of the finances at the key stages of your child¶s life. What¶s more, the plan also provides you with a life protection cover ± so should anything unfortunate happen to you, Bharti AXA Life Bright Stars ensures that your dreams for your child still live on. The plan also offers the flexibility to make modifications, depending on the changing needs of your child. As his dreams grow, the plan will grow too« so financial hurdles will never come in the way of his growing dreams! With Bharti AXA Life Bright Stars, you can fulfill all the dreams you have for your child, and give him what he deserves. A bright future!
~ 54 ~
What is Bharti Axa Life Bright Stars PLUS?
This is a regular premium unit-linked Insurance Policy, which offers you the twin, benefits of protecting your loved ones & creating wealth for them over the desired period. You can plan & invest in a systematic manner through this product for certain important events (financial goals) in your life like your child¶s higher education / marriage or buying a house! Bharti AXA Life Bright Stars plus offers you the twin benefits of protecting your loved ones & creating wealth for them over the desired period. (a)What are your advantages with Bharti Axa Life Bright Stars plus: Smart financial solution for protecting your family- in unfortunate event of deathThe sum assured gets paid out to your nominee immediately PLUS Bharti AXA Life will pay ALL your future premium into the investment funds to ensure that the ambitions of your loved ones are achevied PLUS Jumpstart benefits during the policy term Jumpstart benefit (7% or 5% of average fund value depending on term chosen ) is credited to your investment fund irrespective of whether the life is alive or not You can in any of 6market ± linked investment funds A number of flexibilities to take care of your changing needs- switches, premium redirection, Top- ups, Partial withdrawals, Decrease of premium, Cover continuance etc The death benefit is payable even if you have opted for the cover continuance option You can enchance your protection in this product by adding riders Tax benefits for premiums paid and benefits received, as per the prevailing tax laws
‡ ‡
‡ ‡
‡ ‡
‡ ‡ ‡
Enjoy the benefits of high returns along with a life cover. Also, receive an additional amount through Jumpstart Benefit at Policy maturity.
~ 55 ~
(b)How does Bharti AXA Life Bright Stars PLUS work
Choose your premium and Policy Benefit Period, which decides the Sum Assured
Enhance your protection by Adding riders
Choose from 6 Investment Funds to invest your premiums
In case of death, Sum Assured is paid out
Bharti AXA Life Pays all future Premiums into
On maturity, you will get Policy Fund Value + Jumpstart Benefit
~ 56 ~
(c)Benefits of Bharti AXA Life Bright Stars plus
1. Life Insurance Benefit:
The Sum Assured under the Policy is based on the Policy benefit period chosen by you. Policy Benefit Period Sum Assured
7 years 10 years 15 years 20 years 25 years
5 times Annualized Regular Premium 5 times Annualized Regular Premium 8 times Annualized Regular Premium 10 times Annualized Regular Premium 10 times Annualized Regular Premium
In the unfortunate event of death of the Life insured during the Policy benefit period, the following benefits are available: Payment of Sum Assured immediately All the future premiums payable till maturities are waived off and The Policy continues until maturity with the nominee having the right to exercise all the applicable benefits under the Policy 2. Maturity Benefit: On maturity of the Policy, you or your nominee will get the Policy Fund Value PLUS Jumpstart Benefit. The Jumpstart Benefit gives you financial freedom, so your child is not constrained when it comes to taking advantage of various career opportunities. Life Insurance Benefit:With built-in life insurance plus critical illness cover (optional), it provides complete, all-round protection for your child.
~ 57 ~
3. SpecialAdditions with Jumpstart Benefit:
Policy term 7 years &10 years 15 years 20 years &25 years Jumpstart benefit 5% of average fund value 7% of average fund value 7% of average fund value Credited to investment fund At maturity At maturity 5 years before maturity (End of 15th / 20th policy year)
*calculated as a %of average policy fund value at the end of previous 36 policy months.
4. Critical Illness Benefit Rider:
In addition to your life insurance benefit, you can also enhance your protection by adding Critical Illness Benefit Rider by paying a nominal amount. This rider will pay the chosen Rider Sum Assured in case you are diagnosed with any of the below mentioned critical illnesses and subject to the terms and conditions Contained in the Critical Illness Benefit Rider ± Policy Bond:
Cancer Coronary Artery Bypass Surgery Heart Attack Kidney Failure Major Organ Transplant Stroke
You can use this Rider Sum Assured to meet various expenses that are generally incurred in treatment of critical illnesses like hospitalization expenses, surgery, cost of medicines, diagnosis, possible loss of pay etc. Please ask your advisor to show you the separate rider brochure for details of applicable terms and conditions of this rider.
~ 58 ~
5. Choice of Investment Funds:
You have a choice of investing your premiums in any or all of the four investment funds, as per your financial objective.
Investment Fund Growth Opportunities Fund Objective To provide long term capital appreciation through investing in stocks across all market capitalization ranges. To provide long term capital appreciation through investing across a diversified high quality equity portfolio. To provide steady accumulation of income in medium to long term by investing in high quality debt papers and government securities and a limited opportunity of capital appreciation. To provide steady accumulation of income in medium to long term by investing in high quality debt papers and government securities To provide capital protection through investment in low risk money market and short term debt instruments with maturity of 1year or lesser To provide long term capital appreciation through exposure to equity investment in infrastructure and allied sectors, and by diversifying investment across various sub-sector of the infrastructure sector Asset Allocation Listed equities: 80%100%, Cash and money market instruments:0%-40% Listed equities:80%-100%, Cash and money market instrument:0%-40% High. Listed equities:0%-60%, Corporate bonds and bank deposits:0%-50%, Government bonds and securities:0%-40%, Cash and money market instruments:0%-40% Corporate bonds and bank deposits:20%-80%, Government bonds and securities:20%-80%, Cash and money market instruments:0%-40% Corporate bonds and bank deposits:0%-60%, Government bonds and securities;0%-60%, Cash and money market instruments:0%-40% Listed equities:80%-100%, Cash and money market instruments:0%-20%, corporate bonds and bank deposits:0%-20% Risk-Return Potential
High.
Grow Money Fund
Save µn¶ grow Money Fund
Moderate.
Steady Money Fund
Low.
Safe Money Fund
Low,
Build India Fund
High.
~ 59 ~
6. Manage your investments with Switch and Premium Redirection facility:
Through the feature of switches & premium redirection you can manage your asset allocation between equity & debt depending on your needs. For example you may wish to move your money to a low-risk investment fund option before maturity of the Policy to protect against adverse movements in equity markets You can switch 12 times in a Policy year free of charge, beyond which a charge of Rs. 100 per switch is levied. The minimum value of a switch should be Rs. 1000. You can also redirect your future premiums after first Policy year into different funds with Premium Redirection facility. This facility can be availed of any number of times free of charge. The minimum allocation in any chosen investment fund should be 5%.
7. Top-up Premiums:
You can invest a bonus received from your employer or profits earned from your business or any other surplus in your existing investments to achieve your financial goals faster. With the top-up option, you can boost your contribution any time after the first Policy year. The minimum amount of a single top-up is Rs. 1000. The total amount of top-up in a Policy year cannot be more than 25% of total regular premiums paid till that date. Top-up premium has no effect on your Sum Assured.
8. Liquidity Benefit with Partial Withdrawal:
We all need money during our lifetime to full fill certain goals. From time to time, you may need money to pay for your child¶s education, going on a long vacation, pay off an existing loan etc. You can withdraw money from your Policy Fund Value any time after completion of three Policy years. Each partial withdrawal should be a minimum of Rs. 1000 and after withdrawal the Policy Fund Value should not be less than 120% of the Annualized Regular Premium. Two partial withdrawals are free of charge in a Policy year and each subsequent partial withdrawal will be subject to a charge of Rs. 100.
~ 60 ~
9. Decrease in Premium:
While we recommend that you pay the agreed amount of annual premium for the entire term of the Policy, we also understand that sometimes you may face financial constraints which might make it difficult for you to pay the agreed premium throughout the term. Therefore, in this product, we allow you to decrease the premium amount any time after completion of two Policy years. Decrease in premium will decrease your Sum Assured in the same proportion. Annualized Regular Premium can be reduced subject to the following condition: During 3rd policy year, the Annualized Regular Premium can be reduced such that the revised premium is at least higher of 75% of first year Annualized Regular Premium Minimum Annualized Regular Premium From 4th policy year onwards, the Annualized Regular Premium can be reduced to the minimum Annualized Regular Premium.
10. Cover Continuance Option:
While we recommend that all your regular premiums be paid on the respective due dates, we also understand that due to sudden changes in lifestyle like increased responsibilities or unexpected increase in household expenses may affect your future ability to pay premiums. Now you need not worry if you are unable to pay premiums into your Policy. The cover continuance option entitles you to continue your Policy with all benefits if you are unable to pay premiums (as per the table below). Once you have opted for this option, you cannot pay any further premiums or top-ups under the Policy. Policy Benefit Period 7 years Cover continuance available after payment of A flexible plan that adapts to the changing needs of your child over time. 10 years 15 years 20 years 25 years
3 annualized 3 annualized 5 annualized 5 annualized 5 annualized regular regular regular regular regular premiums premiums premiums premiums premiums
~ 61 ~
11. Extended Maturity Benefit with Settlement Option:
You may want to take advantage of Bharti AXA Life¶s fund management expertise even after maturity of your Policy. You can avail any of the following options at maturity: Take entire maturity proceeds (Policy Fund Value + Jumpstart Benefit) as lump sum payment on maturity; or Take the maturity proceeds (Policy Fund Value + Jumpstart Benefit) at regular intervals in installments over 5 years after the maturity A combination of the above mentioned two options date (extended maturity period). The value payable at such intervals will be calculated at the unit price as on the relevant date At any time during the extended maturity period, you have an option to withdraw the balance available Policy Fund Value as on that date. However, you will not be entitled to life insurance benefit or partial withdrawals / switches between investment funds or top-ups during this period. UPlease note that during the extended maturity period, the investment risk in the investment portfolio continues to be borne by the Policyholder.
~ 62 ~
(d) What are the applicable charges in this product?
1. Premium allocation charge: This charge is levied at the time of premium allocation and depends on the premium amount, Policy benefit period and the Policy year. Premium Band 1 = Annualized Regular Premium between Rs. 15,000 and Rs. 99,999. Premium Band 2 = Annualized Regular Premium of Rs. 1,00,000 & above. Policy 7 years 10 years 15 years 20 years Term Policy Year 1 Premium 28% 35% 35% 45% Band 1 Premium 25% 32% 32% 36% Band 2 2 Both 9% 15% 15% 24% Premium 3 5% 5% 5% 5% Bands 4++ 0% 0% 0% 0% Top-up premium subject to an allocation charge of 1.5% for both Premium Bands. 25 years
50% 50% 24% 5% 0%
2. Risk benefit charge: This charge is applied on the Sum Assured and isdeducted proportionately on a monthly basis by cancellation of units from the Policy Fund Value. The risk benefit charge will depend on your age at entry and Policy benefit period chosen and this charge will remain the same throughout the Policy benefit period. Annual Risk Benefit charges per Rs. 1000 of Sum Assured are as follows: Risk Benefit Charge for a 30-year-old
Age
Policy Benefit Period 7 years 10 years Rs. 3.74 Rs. 3.38 15 years Rs. 4.15 Rs. 3.60 20 years Rs. 5.02 Rs. 4.21 25 years Rs. 6.68 Rs. 5.49
Male Female
Rs. 2.95 Rs. 2.75
~ 63 ~
3. Policy Administration Charge: This charge is deducted by cancellation of units from the Policy Fund Value on a monthly basis. The charge is Rs. 60 per month increasing at 5% p.a. on every policy anniversary.
5. Fund Management Charge: This is a charge that is levied on each of the Investment Funds and is adjusted in the unit price calculation on a daily basis. The charges for the funds are as follows: Fund Name % of policy fund Fund Name % of policy fund value (p.a.) value (p.a.)
Growth opportunities 1.35% plus Grow money plus 1.35% Build India 1.35%
Save n Grow money 1.25% Steady money Safe money 1.00% 1.00%
5. Surrender Charges: The Surrender Charge is applied if and when you surrender your Policy in the first 5 Policy years. The surrender value that you will receive will be the Policy Fund Value less this charge. The surrender charges are applicable on the Policy Fund Value and are as follows:
Surrender year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 ++
7 years 75% 50% 25% 0% 0% 0%
10 years 75% 50% 25% 0% 0% 0%
15 years 91% 80% 50% 25% 10% 0%
20 years 91% 80% 50% 25% 10% 0%
25 years 91% 80% 50% 25% 10% 0%
If the Policy is surrendered within the first three Policy years then the surrender value as on the date of intimation of surrender will be paid only after the completion of three Policy years.
~ 64 ~
(e) Plan details :
Parameter Policy term options available Minimum age at entry Maximum age at entry Maximum age at maturity
Eligibility criteria 7 years, 10 years, 15 years, 20 years, & 25 years 18 years 70 years less policy term (7, 10, 15 & 20- year terms) 75 years for 25- year term 70 years (7, 10, 15 &20- year terms) 75 years for 25- year term
Minimum premium (RS. P.a.)
Minimum premium Annual mode Semiannual mode Quarterly mode Monthly mode
7years
10years
15years
20 years
25 years
36, 000
20, 000
15, 000 15, 000
15, 000 15, 000
12, 000 12, 000
18, 000 24, 000 18, 000
18, 000 18, 000
12, 000 12, 000
* Through ECS only Get tax benefits under section 80C & section 10 (10D)
~ 65 ~
The following table shows the benefit of Bharti AXA Life Bright Stars for a 30-year-old Male paying a premium of Rs. 36,000 per annum under annual mode. Monthly_Equity_Roundup_±_November_2009_ Policy Benefit Period 10 years 6% Sum Assured (Rs.) Policy Fund Value at Maturity (Rs.) Jumpstart Benefit (Rs.) 17,247 Total Maturity Benefit 4,18,59 1 (Rs.) Death Benefit (Rs.) 5,98,59 1 20,592 5,17,77 5 6,97,77 5 30,002 7,01,71 5 9,89,71 5 39,976 45,595 68,498 1,80,000 4,01,34 4 4,97,18 4 10% 15 years 6% 2,88,000 6,71,71 3 10% 20 years 6% 3,60,000 9,30,931 10,02,48 15,69,6 9 10 10%
9,70,907 10,48,08 16,38,1 5 08 12,58,90 14,08,08 19,98 7 5 ,108
6% and 10% are assumed gross investment rates per annum on Grow Money Fund.
(f) What are the tax benefits under this product?
You can avail of the tax benefits on the premiums paid and the benefits received as per the prevailing tax laws under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. The tax benefits are subject to change as per change in Tax laws from time to time.
Section 41 Of Insurance Act 1938
³No 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 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 prospectus or tables of the Insurer.´
~ 66 ~
Section 45 Of Insurance Act 1938
³No Policy of life insurance shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the Policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the Policyholder and that the Policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no Policy shall be deemed to be called in question merely because the terms of the Policy are adjusted on subsequent proof that the age of the Life insured was incorrectly stated in the proposal.´
(g) Terms and Conditions
1. If any regular premium due within the first three years of the Policy remains unpaid even after the grace period of 30 days, the Policy lapses and all the benefits under the Policy cease to exist. You can however, revive the Policy by paying all the unpaid premiums within a period of two years from the due date of the last unpaid premium. If the Policy is not reinstated during the Reinstatement Period, the Policy will stand terminated and the Policy Fund Value as at the expiry of Reinstatement Period net of Surrender Charge as on the lapse date shall be payable at the completion of the third Policy year or at the end of the Reinstatement Period, whichever is later. 2. If the due premiums have been paid for at least three consecutive Policy years from the Policy Date and subsequent premiums are unpaid, you may reinstate the Policy within two years from the date of first unpaid premium by resuming premium payment by paying all the unpaid premiums and the appropriate Premium Allocation Charge shall be deducted from the above mentioned payment. During the period allowed for reinstatement, the Policy shall continue to be in effect by levying applicable Policy Charges. At the end of the allowed period for reinstatement, if you have not opted for cover continuance option, only the Policy Fund Value, after deducting applicable surrender charges will be paid and the Policy will terminate. In an event of death during the Reinstatement Period, the death benefit shall be paid out.
~ 67 ~
3. At any time during the Policy benefit period, after completion of 3 Policy years, if the Policy Fund Value falls below 120% of the Annualized Regular Premium, then the Policy will be terminated & the surrender value will be paid out. 4. In case of death of the Life insured during the Policy benefit period a. Where the Life insured and Policyholder are same, the Policy will continue till maturity of the Policy (provided that the nominee gives an undertaking-cumindemnity bond) and nominee is entitled to all the applicable benefits under the Policy, viz. partial withdrawals, switches, surrender, premium redirection & extended maturity benefit. Top-ups & change in annualized regular premium is not allowed. Also, nomination is mandatory where the life insured & policyholder are same. b. Where the Life insured and Policyholder are different, the Policy will continue till maturity of the Policy and the Policyholder is entitled to all the benefits available under the Policy.
5. Top-up benefit is not available after the death of the Life insured. 6. Free-look option: If you disagree with any of the terms and conditions of the Policy, you have the option to return the original Policy Bond along with a letter stating reasons for the objection within 15 days of receipt of the Policy Bond (³the free-look period´). The Policy will accordingly be cancelled and an amount equal to the sum of (Premium Allocation Charge, Policy Administration Charge, Risk Benefit Charge, deducted from the Policy Fund Value) and (the Policy Fund Value less stamp duty and underwriting expenses incurred by the Company), will be refunded to the Policyholder. 7. If the Life insured under the Policy, whether medically sane or insane, commits suicide, within one year of the Issue Date or the date of reinstatement of the Policy, the Policy shall be void and the Company will only be liable to pay the Policy Fund Value as on the date of intimation of death and all the benefits under the Policy shall cease to exist including future payment of premiums by the Company. 8. This is a non-participating Unit Linked Insurance Policy.
~ 68 ~
(h) Computation of Unit Price
The unit pricing shall be computed based on whether the Company is purchasing (appropriation price) or selling (expropriation price) the assets in order to meet the day to day transactions of unit allocations and unit redemptions i.e. the life insurer shall be required to sell / purchase the assets if unit redemptions / allocations exceed unit allocations/redemptions at the valuation date. The appropriation price shall apply in a situation when the Company is required to purchase the assets to allocate the units at the valuation date. This shall be the amount of money that the Company should put into the fund in respect of each unit it allocates in order to preserve the interests of the existing Policyholders. The unit price will be computed as follows: Market value of investment held by the fund plus the expenses incurred in the purchase of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any. This gives the net asset value of the fund. Dividing by the number of units existing at the valuation date (before any new units are allocated), gives the unit price of the fund under consideration.and do not in any manner indicate the quality of the Investment Funds The expropriation price shall apply in a situation when the Company is required to sell assets to redeem the units at the valuation date. This shall be the amount of money that the Company should take out of the fund in respect of each unit it cancels in order to preserve the interests of the continuing Policyholders. The unit price will be computed as follows: Market value of investment held by the fund less the expenses incurred in the sale of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any. This gives the net asset value of the fund. Dividing by the number of units existing at the valuation date (before any units are redeemed), gives the unit price of the fund under consideration.
~ 69 ~
(i) Risks of investment in unit-linked Policies:
Bharti AXA Life Bright Stars is a unit-linked insurance Policy and is different from traditional insurance Policies.
The premium in unit-linked insurance Policy are subject to investment risk associated with capital market and the NAV of the units may go up or own based on the performance of the investment funds and the factors influencing the capital markets and the insured is responsible for his / her decisions.
Bharti AXA Life Insurance Company Ltd. is only the name of the insurance company and Bharti AXA Life Bright Stars is only the name of the unit-linked insurance Policy and does not in any way represent or indicate the quality of the Policy, its future prospects and performance or the returns.
Bharti AXA Life Bright Stars does not provide for participation in the distribution of surplus or profits that may be declared by the Company.
Growth Opportunities Fund, Grow Money Fund, Steady Money Fund and Saveµn¶grow Money Fund are the names of the Investment Funds, their future prospects or returns.
~ 70 ~
RESEARCH METHODOLOGY
Research always starts with a question or a problem. Its purpose is to question through the application of the scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studied. Marketing research is the function which links the consumer, customer and public to the marketer through information- information used to identify and define marketing opportunities and problems generate, refine, and evaluate marketing actions, monitor marketing actions, monitor marketing performance and improve understanding of market as a process. Marketing research specifies the information required to address these issues, designs, and the method for collecting information, manage and implemented the data collection process, analyses the results and communicate the findings and their implication. I have prepared our project as descriptive type, as the objective of the study demands the answers of the question related to find the customers perception about life insurance product and popularity of ULIP in present scenario.
~ 71 ~
SAMPLING METHOD AND SAMPLE SIZE:Introduction:To get final conclusion of my research study and to know customer perception about life insurance product I need to conduct a survey. To full fill my objective I made questionnaires to collect primary data. I have gathered secondary data and primary data and collected information from the combination of these two data.
Primary data: I have taken great care while collecting primary data to answer that it is relevant, accurate, current and unbiased. I have taken a sample of 200 people. I have visited them personally to get data.
Secondary data: Secondary data consist of information that already exists somewhere, having been collected for another purpose. I have gathered secondary data from website of different operators, different magazines, newspapers and libraries.
Sample size: I have taken sample size of 200 respondents. Because the population is too large so it is difficult to survey. The Marketing Research Process: As marketing research is a systemic and formalized process, it follows a certain sequence of research action. The marketing process has the following steps: Formulating the problems Developing objectives of the research Designing an effective research plan Data collection techniques Evaluating the data and preparing a research report In order to accomplish this project successfully following steps have been taken-
~ 72 ~
Step-1 Preparation 1. Introduction: the research process 2. Approaches to research 3. Planning and designing research projects 4. Using the literature 5. Secondary data sources. Step-2 Approaches to Data collection 6. Observation 7. Qualitative methods 8. Questionnaire surveys 9. Experimental methods 10. Sampling and its implications Step-3 Analysis 11. Analyzing secondary data 12. Survey analysis 13. Statistical analysis 14. Qualitative analysis Step-4 Reporting 15. Reporting research results
~ 73 ~
DATA ANALYSIS AND INTERPRETATION
Here I have formed a questionnaire to study why people go for life insurance. What is people¶s major motive behind investing in life insurance? Do they decide upon their own or they take guidance of an agent? What is their perception about Reliance Life Insurance Company Limited?
~ 74 ~
Questions:There are 14 questions in the questionnaire. Out of these 14 questions, some questions are close ended and other questions are open ended.
Target Population:I had conducted this survey among 200 people, and the target group was a mix of people from the society. I asked the questions to people in randomly (only adult) Because every body can be a consumer of life insurance product and it essential for each individual and reduce the financial burden of government and it will give security to dependant. I have taken 123 male and 73 female as sample to know gender biasness in purchasing life insurance product and their awareness. From this sample I have collected 83 samples, whose age between 18 to 30 year and another 117 sample, age more than 30 year.
Analysis: I have used pie charts, and some other statistical measures to analyze the questions.
1. Survey to find out the educational qualification of respondents:
Table 1: Educational Qualification High school Intermediate Degree and above Technical Total No. Of percentage Respondents 30 15% 50 25% 80 40% 40 20% 200 100%
~ 75 ~
Chart 1:
90 80 70 60 50 40 30 20 10 0
80 50 30 40 No. Of Respondents
Interpretation: It is clear from the table and chart that 60% respondents are graduate and above or technically qualified remaining 25%are intermediate and only 15% are high school passed.
~ 76 ~
2. Survey to find out the occupation of respondents: Table 2
Occupation Professional Employee Business Agriculture Total No. Of respondents 60 70 40 30 200 percentage 30% 35% 20% 15% 100%
Chart 2:
No. Of respondents
30 40
60 Professional Employee Business 70 Agriculture
Interpretation: It is clear from above table and chart that occupation wise 35% of respondents
are employee and rest are represented as professional 30%, Businessmen 20% and 15% are agriculturist.
~ 77 ~
3. Survey to find out the annual income of respondents: Table 3:
Annual income (in Rs) Below 80,000 80,000-150,000 150,000-250,000 Above 250,000 Total
No. Of respondents 40 50 80 30 200
percentage 20% 25% 40% 15% 100%
Chart 3:
No. Of respondents
30 40 Below 80,000 80,000-150,000 150,000-250,000 80 50 Above 250,000
Interpretation: It is revealed that majority of respondents are fall in income group 150,000250,000 that is around 40%, and remaining 25% are fall in 80,000-150,000, 20% fall in income group below 80,000 and rest 15% are fall in above 250,000.
~ 78 ~
4. Survey to find out Reason for purchase of life insurance product:
There could be any motive of people behind investing in a life insurance policy. The main purpose of life insurance is the Risk cover of one¶s life. But some people consider different advantages of a life insurance policy. Some people consider Tax benefit as the main advantage of life insurance. Some believe that life insurance is an investment so they tend to invest in life insurance. While some people believe that it is a compulsory saving. Now let¶s see what all people say.
Table 4:
Reason for purchase of life insurance product Peace mind/ security Income protection Recommended by advisor Recommended by family/ friend Tax saving purpose others Total No. Of Respondents 100 50 14 6 24 6 200 Percentage 50% 25% 7% 3% 12% 3% 100%
Here we can see that majority of the people tend to invest in life insurance for the peace mind/security. The next preferred option is income protection. We founded from the discussion with public and some experts that those people with a low income tend to invest in life insurance to gain tax benefit. Others include only loan as a reason to purchase life insurance product.
Chart 4:
Reason for purchase life insurance product
Peace mind/security Income protection Recommended by advisor Recommended by family/friend Tax saving purpose others
~ 79 ~
Interpretation: It is clear from the table 4 and chart 4 that most of customer, 50% purchase insurance product for peace mind/ security. 25% customer are purchase insurance product for income protection and 7% customer are purchase insurance product recommended by advisor, 3% customer are purchase insurance product recommended by family/ friend, 12% customer are purchase insurance product for tax saving and 3% customer for other purposes.
5 Survey to find out criteria most valued by customer as a life insurance purchaser:Generally we know that a person buy policy through agent, we generally assume that there is greater roll of professional advice in purchasing life insurance product. And brand/trust is valued by the customer as a very important criterion. Now day¶s main attraction to buy life insurance plan is to return/fees. So these are the some believe that we value the life insurance product in above way. Now let¶s see what people say.
Table 5:
Most valued by customer as a No. Of respondents life insurance purchaser Return/ fees 74 Brand/ trust 62 Professional advice 28 Product 24 After sale services 12 Others 0 Total 200
Percentage 37% 31% 14% 12% 6% 0% 100%
~ 80 ~
Chart 5:
Criteria most valued by customer as a life insurance purchasers
After sales service 6% Professional advice 14% Return/fees 37% others 0%
Brand/trust 31%
product 12%
Interpretation: It is clear from table 5 and chart 5 that most of customer valued i.e. 37% return/ fees as a life insurance purchasers, 31% customer valued brand/ trust, 14% customer valued professional advice, 12% valued products, 6% after sale services and 0% valued other purposes
6 Survey to find out ³how many people interested to invest and their investment concern´:After introduction of ULIP in life insurance product, life insurance products are known by customer as an investment option. And agents are selling ULIP products as a best investment option. So I have put this question to know how many are really interested to invest and whether they are choosing life insurance product (ULIP) or any other option for investment.
~ 81 ~
Table 6:
Investment concern Respondents Building cash reserve Funding for child Life insurance product Asset purchase Retirement Others Total
of No. Of Respondents 74 34 34 26 24 8 200
percentage 37% 17% 17% 13% 12% 4% 100%
Chart 6:
No. Of Respondents
80 70 60 50 40 30 20 10 0
No. Of Respondents
~ 82 ~
Interpretation: It is clear from the above table and chart that most customer i.e.37% invested for building cash reserve, 17% invested for funding for child, 17% invested for life insurance product, 13% customer¶s investment is concern with asset purchase, 12% invested for retirement and 4% for other purposes.
7 Survey to know current investment portfolio of investors:Objective behind this question is to know the acceptability of ULIP as an investment option. How they decide there investment portfolio and percentage of different investment option in their current investment portfolio. So we can make a product that can fullfill there current demand. Like; we can add different feature like mutual fund, fixed deposit, government securities etc. in our life insurance product. Now let¶s see what all people say««««.
Table 7:
Investment portfolio of investor No. Of Respondents Fixed Deposit 92 ULIP 24 Share Market 16 Government Securities 16 Mutual Fund 16 Bonds 12 Gold 12 Land 8 Total 200
percentage 46% 12% 8% 8% 8% 6% 6% 4% 100%
~ 83 ~
Chart 7:
100 90 80 70 60 50 40 30 20 10 0
92 28
16
16
16
12
12
8
No. Of Respondents
Interpretation: It is clear from the above table and chart that majority of the customer¶s investment portfolio i.e. 46% consist of fixed deposit, 14% investor invest in ULIP, 8% in share market, 8% in government securities, 8% in mutual fund, 6% in bonds, 6% in gold and 4% investor¶s invest in land. Table 8: Customer perception about benefits of BRIGHT STARS PLUS BHARTI AXA LIFE will pay all your future premium into the investment funds Jumpstart benefit 6 market-linked investment funds Cover continuance Tax benefits Total No. of Respondents percentage
90
45%
20 50 30 10 200
10% 25% 15% 5% 100%
~ 84 ~
Chart 8:
100 90 80 70 60 50 40 90 30 20 10 0
50 20 30 10 No. of Respondents
Interpretation: It is clear from the above table and chart that majority of customer i.e. 45% purchase BRIGHT STARS PLUS for the benefits which BHARTI AXA LIFE will pay all your future premium into the investment funds, 25% customer¶s perception about benefit of 6 marketlinked investment funds, 15% for cover continuance, 10% for jumpstart benefit which company gives to its customer and 5% for tax benefits.
~ 85 ~
FINDING
Every study is completed only if it has some outcomes in the form of finding. The finding of my study is as follows.
1. Referring table 1 and chart 1, it is clear that majority of respondents i.e. 60% are degree and above or technical qualified. 2. Referring table 2 and chart 2, it is clear that 35% respondents an employees which gets the services of BHARTI AXA LIFE and only 15% are agriculturist. 3. It is clear from the questionnaire that majority of the customers who gets the services of BHARTI AXA LIFE are between age group 30 ± 50 years. 4. Referring table 3 and chart 3, it is clear that 40% respondents are fall in income group 150,000-250,000 and only 15% respondents have income above 250,000. 5. Referring table 4 and chart 4, it is clear that majority of customer¶s i.e. 50% purchase life insurance product for peace mind/ security and 25% customer purchase life insurance product for income protection. 6. Referring table 5 and chart 5, it is clear that most customer¶s i.e. 37% as a life insurance purchaser gives value to return/ fees and only 6% gives value to after sale services. 7. Referring table 6 and chart 6, it is clear that majority of customer¶s investment concern i.e. 37% for building cash reserve and only 12% concern with retirement. 8. Referring table 7 and chart 7, it is clear that mostcustomers¶ i.e.46% investment portfolio consist of fixed deposit and only 4% customers invested in land. 9. Referring table 8 and chart 8, it is clear that 45% customer give importance to BHARTI AXA LIFE will pay your entire future premium into your investment fund and only 5% gives importance to tax benefits.
~ 86 ~
Limitations of the study:
Inspite of every care taken on the part of the researcher there were certain limitations which could not be overcome and are as follows: Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not given the actual answer of my questionnaire. Sample size is limited to 200 people only. The sample may not adequately represent the whole market. Some respondents¶ were reluctant to divulge personal information which can hinder the validity of all responses. The research study was confined to Jammu and Kathua city only.
The above are some of the aspects which posed real problem in the way of completion of the research work but the majority of respondents were cooperative and my gratitude are due to them.
~ 87 ~
SUGGESTION AND RECOMMENDATION:
To increase the level of insurance penetration BHARTI AXA LIFE may focus on bringing products that suit to be rural customers. The company if possible should invest in advertising, conduct road shows and spend money on hoardings, so that it can better propagate awareness about its various lesser known products. BHARTI AXA LIFE should also tie up with several other banks to sell its products i.e through bancassurance. The company has the option of tying up with local NGO¶s for selling its rural insurance products. Customer friendly documentation i.e it should made easier and faster. BHARTI AXA LIFE should keep a check that its agents equally promote all its products. BHARTI AXA LIFE may provide additional funds to its development officers and agents. All the hidden charges should clearly be stated in the form and explained by the agents and BHARTI AXA LIFE should provide better training to its agents. Claim settlement process should be made fast and must not involve lengthy decision making process. Some special focus should be laid on individual risk coverage while designing the products.
~ 88 ~
Conclusion
After going through this research I found that the perception of the customer on insurance, bharti axa life insurance market position, the products (Bright Stars plus) benefits to the customer, to the advisor that¶s all. When the customers are understand the benefits of the product then they are agree to buy this product. Our exhaustive research in the field of Life Insurance threw up some interesting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. People in general have been impression by the marketing and advertising campaigns of insurance companies. A high penetration of print, radio and Television ad campaigns over the years is beginning to have its impact now. Another hearting trend was in terms of people viewing insurance as a tax saving and investment instrument as much as a protective one. A very high number of respondents have opted for insurance for such purposes and it shows how insurance companies have been successful to attract public money in recent times. The general satisfaction levels among public with regards to policy and agents still Requires improvement. But therein lays the opportunity for a relative new comer like Reliance. LIC has never been known for prompt service or customer oriented methods and Reliance can build on these factors.
~ 89 ~
BIBLIOGRAPHY
The following references and websites that I have followed to complete this project««.. IC 33 LIFE INSURANCE BHARTI AXA LIFE PRODUCTS BROCHURE www.bharti-axalife.com www.goggle.com www.irda.com www.wikepedia.com www.myiris.com
~ 90 ~
ANNEXURE
A SURVEY ON CUSTOMER PERCEPTION ABOUT LIFE INSURANCE PRODUCT
[For Answers Put Tick Mark in the boxes ( Name: Occupation: Address: Age: Email : Phone no.:
]
1.Which product of Bharti Axa Life customer will purchase more: (a).Wealth confident (b).Bright stars plus(c.)Dream life pension plan
(d.)Save confident(e).Aspire life(f.)Secure confident 2. Are you satisfied with the plans of bharti Axa Life insurance: a.)Below 30% b)30% -50% c)50%-70% 3. Reasons for purchase of life insurance product: (a) Peace mind/security (b) Income protection (c) Recommended by advisor
(d) Recommended by family/friends (f) Others:
(e) Tax saving purpose
~ 91 ~
4 If yes, what is your investment concern:(a) Life insurance product (c) Retirement (f) Others (specify): (b) Building cash reserves (e) Funding for children
(d) Asset purchase
10. Your current portfolio consists of:-(You can put more than one (a) Share markets (d)Mutual funds (b) Fixed deposit (e) Bonds (c) Government securities (f) ULIP (g) other (specify):
14.your perception about benefits bright stars plus? (a) Bharti Axa Life will pay all your future premium (b) Jump start benefits (d) cover continuance (e) 6 investment funds (c) Tax benefits
~ 92 ~
³CUSTOMER PERCEPTION ABOUT BENEFITS OF BRIGHT STARS PLUS´
WINTER TRAINING ORGANISATION
BHARTI AXA LIFE INSURANCE CORPORATION LTD.
SUBMITTED IN PARTIAL FULFILLMENT FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA) (SESSION 2008-2010)
Submitted To: Faculty Institute Roll no. 4046 Uni.Roll No-1378 Uni. Regd. No. 08-HIM-1 Submitted by: S/oSh. ROOP LAL
Mr. GOURAVSOM RAJ (MBA 2nd year)
HIMALAYAN INSTITUTE OF MANAGEMENT, KALA-AMB.
Under the patronage of Maa Saraswati Educational Trust,( Regd. ) Approved By AICTE, Delhi.(Government of India) Affiliated to- Himachal Pradesh University, Shimla
1
Acknowledgement
It is said, ³No learning is possible without any proper guidance and no research endeavour is a solo exercise, some contribution is performed by various individuals´. By acknowledging the guidance, support and assistance, I pay my deepest sense of gratitude to the Management of Bharti Axa Life Insurance Company Limited. I am very much thankful to the management of the Bharti AXA Life Insurance Company Ltd. for giving me an opportunity to do this project as a part of my PGPM program. The completion of this project is a successful and satisfactory out come of so many helping hands. I think it proper to express my deep obligation to my advisers. First and foremost, I am especially thankful to Mr. Naresh Gupta (Agency Development Manager, Bharti AXA Life Insurance company Ltd. Jammu) for his active co-operation and help for the completion of my project at Jammu. I also thankful to Miss. Arpana Bajaj (Agency Manager) and staff member of the organization for rendered service and provide various information to my purpose. Their suggestions are helping me in various stages. I am immensely thankful to Dr. Vikas Arora (Director), Himalayan Institute of Management, kala amb distt.Sirmour (H.p.) for his co-operation at all the time. My special wishes and thanks shall always be for those who responded me and extended their co-operation in preparing and collecting data by which this Project Report has been smoothly conducted.
~2~
~3~
PREFACE
Theoretical knowledge without the practical exposure is of life value. Theoretical studies in classroom are not sufficient to understand the functioning and nature of research. Therefore it becomes necessary to undergo any research project work. Practical project supplements the theoretical studies i.e. it covers what is left uncovered in the classroom. It exposes a student to invaluable pleasure of experiences. I complete my research project on the topic ³Customer Perception about the benefits of BRIGHT STARS PLUS´. During the research project, I got an opportunity to learn valuable things, which I could not have been able to learn from theory classes. In nutshell, whole my project was invaluable experience in the pursuit of knowledge. In the forthcoming pages attempt has been made to present a comprehensive report concerning different aspects of my research. The overall gain to me will be reflected in the report itself.
~4~
Declaration
I hereby declare that this report on ³Customer perception about the benefits of bright stars plus.´ has been written and prepared by me during the academic year 2008-2010.This project was done under the able guidance and supervision ofMr. Naresh Gupta, ADM Jammu Branch in partial fulfilment of the requirement for MBA-marketing course of the Himalayan institute of management, kala amb
I also declare that this project is the result of my own effort and has not been submitted to any other institution for the award of any Degree or Diploma.
Place: Jammu Mr. Som Raj MBA-Marketing.
~5~
INDEX
CONTENTS
1. Organisation overview7-24
A. BhartiAXA Life Insurance fact sheet a) The company b) Bharti AXA Life Insurance company Ltd. (i) Bhartienterprises . (ii) AXA group y History y AXA name y AXA Asia pacific holdings y AXA global set of values (iii) Vision of Bharti AXA life (iv) Our values (v) Ambition 2012, earning preference (vi) Our strategy (vii)Our presence (viii)Management profile (ix) Under the umbrella of Bharti (x) Bharti is the first (xi) Achievements (xii) Awards
PAGE NO.
2.Objective of the report25 3. Scope of the report26 4. Executive summary 5. Literature review
27
28-29
6. Project in the company30-77
(i) Introduction (ii) Background (iii) Indian insurance industry (iv) Purpose and need of insurance (v) How insurance works (vi) Role of insurance in economic development (vii)What is life insurance
~6~
(viii) Why do i need life insurance (ix) Key benefits of life insurance (x)Principle of life insurance (xi) Life insurance contracts (xii) Essentials of a contract (xiii)Section 45 of insurance act 1938 (xiv)Facts which need not be disclosed (xv)Different risks (xvi)Needs and insurance (xvii)Life stage profiler (xviii)Life insurance plans (xix)Human life value (xx) What is linked policy (xxi)Bright stars plus (a)Advantages (b)How does bright stars plus works (c)Benefits of bright star plus (d)Applicable charges (e)Plan details (f)Tax benefits (g)Terms and conditions (h)Computation of unit price (j)Risk of investment in ULIPs
7. Researchmethodology 78-80 8. Data analysis and interpretation81-92 9. Finding 93 10. Limitations of the study
94
11. Suggestion and recommendations 95 12. Conclusion 96 13. Biblography97 14. Annexure98-100
~7~
ORGANSATION OVERVIEW
~8~
A. BHARTI AXA LIFE INSURANCE FACT SHEET
(a) THE COMPANY
Bharti AXA is a joint venture between Bharti enterprises, a trusted brand name and AXA world leader in financial protection and wealth management.
y y
A Trusted Brand Name A Trusted Brand name. All India Presence Global Presence.
~9~
y
Largest In the Telecom industry y Strong Financial Base
Largest In the Insurance Industry. Strong Financial Base
(b)
Bharti AXA Life Insurance Company Limited:-
Bharti AXA Life Insurance is a joint venture between Bharti, one of India¶s leading business groups with interests in telecom, agri. business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 26% stake of AXA. The company launched national operations in December 2006. Today, it has over 5200 employees across over 12 states in the country. Our business philosophy is built around the promise of making people "Life Confident".
(i)Bharti Enterprises:Bharti Enterprises is one of India¶s leading business groups with interests in telecom, retail, manufacturing, agri. business and financial services. Bharti Airtel is Asia¶sleading integrated telecom services provider with operations in India and Sri Lanka. Bharti Airtel has been at the forefront of the telecom revolution and has transformed the sector with its world-class services built on leading edge technologies. In financial services, Bharti is partnering with AXA of France to offer life insurance, general insurance and asset management. Bharti Retail, the 100% subsidiary of Bharti Enterprises operates multiple format consumer friendly stores. Bharti Wal-Mart is a B2B JV with Wal-Mart for wholesale cash-and-carry and back-end supply chain management operations. The other businesses in the group are Beetel for communication and media devices and Bharti Del Monte India, a JV with Del Monte to offer fresh and processed fruits & vegetables in India as well as international markets.
~ 10 ~
(ii) AXA Group:y AXA is a French global insurance companies group headquartered in Paris. AXA is not the name of a single company but a group of companies independently organized and operated according to the regulations of many different countries. The AXA groups of companies are engaged in life, health and other forms of insurance, as well as investment management. The AXA group operates primarily in Western Europe, North America and the Asia Pacific region and the Middle East. The AXA Group encompasses five operating business segments: Life & Savings, Property & Casualty, International Insurance
~ 11 ~
(including reinsurance), Asset Management and Other Financial Services.AXA ranks as the 15th biggest company in the world (based on revenue) on the 2006 Fortune Global 500 list.
y History
The Company was originally founded in 1816 as Mutuelle de L'assurancecontre L'incendie (the Ancienne Mutuelle). It acquired Compagnie Parisiennede Garantie in 1978 and became Mutuelles Unies.It went on to buy the Drouot Group in 1982 at which time it adopted the AXA name.The takeover of The Equitable, a well known American insurer, came in 1991.It bought Union des Assurances De Paris (UAP), France's largest insurer, in 1996 becoming AXA-UAP for a while before reverting to the name AXA in 1999. Then in February 1999 AXA acquired Guardian Royal Exchange. In May 2000 AXA acquired all shares it did not already own in Sun Life & Provincial Holdings. On 14 June 2006 AXA acquired the leading Swiss insurance company Winterthur Group from Credit Suisse for approximately ¼9 billion.
y The AXA name
Despite being written in upper case, "AXA" is not an acronym, but was chosen because its name can be pronounced easily by people who speak any language. After acquiring the Drouot Group in 1982, the company hired an outside consultant to conduct a computer-aided search for a new name. The selection criteria consisted of a short and snappy name to convey vitality, a name that begins with the letter A so that it would appear near the top of all lists, and something that could be pronounced easily in every language, consistent with the group's desire for an international presence. In 1985, Chairman and CEO Claude Bébéar chose the name AXA.
~ 12 ~
y AXA Asia Pacific Holdings
AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian stock exchange and is 52.3% owned by AXA SA. AXA APH is responsible for AXA SA¶s life insurance and wealth management businesses in the Asia-Pacific region. It has operations in Australia, New Zealand, Hong Kong, Singapore, Indonesia, Philippines, Thailand, China, India and Malaysia. AXA APH had A$106.4 billion in total funds under management and administration at 30 June 2007 and reported a profit after tax before non-recurring items of A$374.0 million for the six months ended 30 June 2007
~ 13 ~
(iii) VISION of Bharti AXA
Our vision is to be a leader and the preferred company for financial protection and wealth management in India.
(iv) OUR VALUES
Professionalism Innovation Team Spirit Pragmatism Integrity
(v) Ambition 2012, earning preference
Becoming the preferred company in the industry is the founding objective of ambition 2012. It gives meaning to the initiatives undertaken by axa people around the world, and mobilizes axa people in the workplace.
~ 14 ~
(vi) Our Strategy
To achieve a top 5 market position in India through a multi-distribution, multi-product platform. To adapt AXA¶s best practice blueprints as a sound platform for profitable growth. To leverage Bhartis local knowledge, infrastructure and customer base. To deliver high levels of shareholder return. To build long term value with our business partners by enhancing the proposition for their customers. To be thee employer of choice to attract and retain the best talent in India. To be recognized as being close and qualified by our customers.
(vii) Our presence
Hyderabad Kolkata Chennai Ahmadabad Ludhiana Luck now Surat Kochi Indore Chandigarh Vadodra Nagpur Bhubaneswar Jaipur
Mehsana Nawashair Bhatinda Noida Gurgao Howrah
~ 15 ~
Kharagpur Durgapur Siliguri Jamshedpur Vijayawada Pondicherry Calicut Trivandrum Trissur Erode Amritsar Jalandhar Patiala By 31st December 2008 we will be in 68 cities and 203 points of presence.
~ 16 ~
Management Profile
~ 17 ~
Sunil Bharti Mittal
Founder,Chairman and Managing director of Bharti group
.
Sunil Mittal got interested in push Button Phone while on a trip to Taiwan, and in 1982, introduced the phones to India replacing the old fashioned, bulky rotary phones that were in use in the country then. Bharti Telecom Limited (BTL) was incorporated and entered into a technical tie up with Siemens AG of Germany for manufacture of electronic push button phones. The turning point came in 1992 when the India government was awarding licenses for mobile phone services for the first time. One of the conditions for Delhi cellular license was that the bidder has some experience as telecom operator. Mittal clinched a deal with the French telecom group Vivendi. Two years later, Sunil secured rights to serve New Delhi. In 1995, Bharti Cellular Limited (BCL) was formed to offer cellular services under the brand name Airtel. Within a few years Bharti became the first telecom company to cross the 2million mobile subscriber marks. Always on the move and making and impact and excelling in whatever he did, this clear thinking risk taker has changed the face of the Indian ICT space. For his contributions he has been honoured with several awards. He was chosen as one of the top entrepreneurs in the world for the year 2000 and amongst µStars of Asia¶, by µBusiness Week¶, he received IT Man of the yearAward 2002 from Dataquest and CEO Of the Year, 2002 Award (World HRD Congress). He is the member of National Council of Confederation of Indian Industry (CII), Federation of Indian Chambers of Com. (FICCI), Chairman, Indo-US Joint Business Council, Member, Advisory Committee constituted by Ministry of IT.
~ 18 ~
Nitin Chopra
Chief Executive Officer Nitin Chopra (49) is the Chief Executive Officer (CEO) of Bharti AXA Life Insurance Company Ltd (Bharati AXA). An engineer from Indian Institute of Technology (IIT) Kanpur and an MBA from Indian Institute of Management (IIM) Ahmedabad, Nitin brings with him 24 years of rich experience in the corporate world, of which the last 15 years have been in the financial services industry. He started his career with the Unilever Group, before moving on to Bank of America NT & SA, where he spent nine years in different capacities, including Vice President & Business Director, Retail Liabilities. Nitin was instrumental behind several µfirsts¶ in the Indian retail banking industry, including introducing 365 extended banking, doorstep banking and tiered fee. He played a pivotal role in the transition of Bank of America¶s retail business to ABN AMRO Bank, as a consequence of a regional sale. Following the sale, he moved to ABN Amro Bank N.V as Head of the Consumer Banking Division from July 1999 to May 2006. He played a significant role in conceptualizing best practices in the Banc assurance business in India, with innovative product and distribution strategies. Launch of Bancafe and Mobile Power are some of the market µfirsts¶ to his credit. He enabled the Bank achieve leadership position as a Wealth Manager. During Nitins stint, the revenue for consumer business increased over seven times. As the CEO of Bharti AXA, he manages the entire Indian operations of the private life joint venture between Bharti Enterprises, one of India¶s leading business groups with interests in telecom, agri. business and insurance, and AXA, world leader in financial protection and wealth management
~ 19 ~
Tim Thomas
Chief Operating Officer Tim Thomas is the Chief Operating Officer of Bharti AXA Life Insurance Company. A Bachelor of Commerce and Bachelor of Laws from the University of Melbourne, Tim has over 12 years of experience in financial services. Tim's first assignment was with the chartered accounting and management consulting firm Coopers and Lybrand (now PWC). He then moved to Colonial Group as Corporate Counsel before taking key corporate finance responsibilities. Tim was awarded a corporate scholarship to pursue a Master of Business Administration at the University of Melbourne (Melbourne Business School) which he completed with Honours in 1999.
In 2000 Tim joined Medi bank Private, market leader in the Australian private health insurance market, as Head of Strategy. He then joined AXA Asia Pacific Holdings Ltd in 2002 in Group Strategy where he lead several key strategic initiatives for the group including the design of the successful AXA 6 business programmed for the Australia wealth management business and the India market entry strategy. Tim moved to India in early 2005 as the AXA's Chief Representative and Market Entry Director where he lead the establishment of the joint venture with Bharti across life insurance, general insurance and asset management, and launched the life insurance business. As Chief Operating Officer Tim is currently responsible for the life insurance operating platform, and is involved in several key business change initiatives across AXA in Asia.
~ 20 ~
PriyaRanjan
Director ± Human Resources Priya Ranjan is Director - Human Resources at Bharti AXA Life Insurance Company. He brings to the business over 15 years of HR experience in diverse fields spanning financial services, information technology and manufacturing. He specialises in building large scale businesses from their project days. Before joining Bharti AXA Life, Ranjan was with JPMorgan Chase Bank, Singapore as Vice President & Regional HR Manager - Technology & Operations (APAC) from May 2005, after serving the office of Vice President & Head - HR for the Global Service Centre of the Bank in India for about 3 years. Between June 1997 and May 2002, Ranjan was with GE Capital as Vice President & Head - HR for the credit card business, where he was a part of the Project Team responsible for creating the business in India.
He also has an entrepreneurial venture to his credit with Bangalore-based Team Excel, which specialised in recruitment & HR consulting. His first assignment was with Tata Steel as Sr. Personnel Officer from 1991 to 1994, followed by Microloans Ltd. as Manager - HR for two years. Ranjan is a BA (Hons) from St Xavier's College, Kolkata and holds a Post Graduate Diploma in Personnel Management from XLRI.
~ 21 ~
Shyamal Saxena
Chief Distribution and Marketing Officer Shyamal Saxena is the Chief Distribution and Marketing Officer of Bharti AXA Life Insurance Company.Shyamal Saxena brings to the business over 15 years of experience in the banking and financial services sector. Before joing us in October 2007, he was with HDFC Bank as Executive Vice President ± Retail Banking. He joined the Bank in 1999, after a seven year stint in various retail banking capacities at Bank of America. Shyamal is a management graduate from Jamnalal Bajaj Institute of Management Studies.
~ 22 ~
UNDER THE UMBRELLA OF BHARTI
1. Bharti Airtel Ltd
Bhartiairtel Ltdis India¶s leading provider OF TELECOMMUNICATIONS SERVICES. THE COMPANY HAS 4 DISTINCT BUSINESS DIVISIONS ± MOBILE & TELEPHONE SERVICES, BROADBAND SERVICES, LONG DISTANCE SERVICES AND ENTERPRISES SERVICES.
2. Bharti Tele Tech Ltd
BHARTI TELE TECH LTD. MANUFACTURES AND EXPORTS WORLD-CLASS TELECOM EQUIPMENT UNDER THE BRAND µBEETAL¶.
~ 23 ~
3. Telecom Seychelles Ltd
TELECOM SEYCHELLES LTD PROVIDES TELECOM SERVICES IN SEYCHELLES, UNDER THE BRAND µAIRTEL¶.
4. Bharti Telesoft Ltd
BHARTI TELESOFT LTD DELIVERS BEST-IN-CLASS, REVENUE-CRITICAL VAS PRODUCTS AND SERVICES TO TELECOM CARRIERS.
5. Teletech Services (India) Ltd
TELETECH SERVICES (INDIA) LTD IS JOINT VENTURE WITH TELETECH INC., USA .IT OFFERS A RANGE OF CUSTOMER MANAGEMENT SERVICES.
~ 24 ~
6. Field Fresh Foods Pvt. Ltd
FIELD FRESH FOODS PVT. LTD IS BHARTI¶S VENTURE WITH EL ROTHSCHILD GROUP OWNED ELRO HOLDINGS INDIA LTD., TO EXPORT FRESH AGRI PRODUCTS EXCLUSIVELY TO MARKETS IN EUROPE AND USA.
BHARTI IS THE ³FIRST´
I. II. To launches India¶s first private sector National Long Distance service. Mobile services to cross the three million customer mark and to cross in Himachal. 1, 00,000
III. IV. V. VI.
To launch world¶s first Flexi ± Recharge pre-paid Coupon for its customer. To announce innovative outsourcing to enhancing Quality of Customer services. To launch talk-time transfer service for its pre-paid customers in Delhi. To win the prestigious µMIS Asia IT Excell
~ 25 ~
Achievements
: Bharti crosses 1 million customer mark in mobile services& records top-line growth of 67%. 2002 : Bharti gets international long distance service license and listed on BSE, NSE and DSE 2003 : Bharti tele-ventures near break-even Maintains market leadership with a market share of 26.5% of all India mobile customer base. 2004 : Airtel crosses the 6 million customer mark nationally, 2001 Bharti Tele-Ventures crosses Rs.5, 000 crores revenues &earns net profit of over Rs.600 crores for the year 2005 : Bharti Enterprises and AXA Asia Pacific holdings limited partnership for a life insurance joint venture in India 2006 : Bharti and Wal-Mart sing memorandum of understanding : Sunil B. Mittal chosen for ³Padma Bushan Awards´ announce
2007
Awards
Airtel wins the ³World Communications Best Brand Award´ Bharti Tele-ventures is the ³Asian Mobile news Mobile Operator Of The Year´ Airtel chosen as µMost Preferred Mobile Service¶ by CNBC Awaaz Consumer Awards Bharti Tele-ventures Is the Indian mobile Operator of the Year 2005 Bharti wins Silver Trophy at the Cll National Six Sigma Awards. Bharti Tele-Ventures amongst the top technology companies in the world Business week. Bharti foundation wins Golden Peacock award for corporate social responsibility.
~ 26 ~
OBJECTIVE OF THE PROJECT
y y y y y y y y
To know customer perception about benefits of bright stars plus. To know reasons from customer for purchase of life insurance products. To know the popularity of ULIP in present scenario. To know investment concern of investors. To know investment portfolio of investors. To know which product of Bharti Axa Life will customer like most. To know satisfaction level of customer. To know market share of Bharti Axa Life Insurance Company Ltd
~ 27 ~
SCOPE OF THE PROJECT
The scope of the study lies in finding out the perception of customers about the BENEFITS OF BRIGHT STARS PLUS in JAMMU AND KATHUA CITY through responses taken by 200 customers during a period of 60 days and highlighting the key areas which acquire some concern of the BHARTI AXA LIFE INSURANCE COMPANY LIMITED and improving upon which company may strengthen its customer base. The present study, analysis, findings and suggestions proposed by the present researcher will be of immense use for future researcher with similar studies in insurance market.
~ 28 ~
EXECUTIVE SUMMARY
The project titled ³CUSTOMER PERCEPTION ABOUTBENEFITS OF BRIGHT STARS PLUS´. Possession of Insurance Policy & Recruitment of financial Advisors has been increased through decades, which is best seen in the rise of customer by different Insurance Life Insurance Companies. According the recent market survey, it is being observed that the Insurance companies are doing well in the marketing & retention of customers. In the near future there is a huge possibilities of increase of the Insurance market because of the better service provided by the companies & market competition. In this project the main emphasis is given to the benefits of bright stars plus provided to the customer, perception of customers from the companies, aware the company about customer expectation.
~ 29 ~
LITERATURE REVIEW
Dr.N.Panchanatham & S.jhansi (2008) stated that today maximum number of people have the knowledge of insurance and its benefit as a result the urban population got more attention and it led to good insurance penetration in urban area as well as rural area also. Maximum policy holders have cordial relationship with agents and policy holders are interested to recommend the policy for their friends & relatives.
Sanket vij &H.J.Ghoshroy (2008) find in their present study researcher believe that for enhanced customer satisfaction and better services quality, the customer centric delivery mechanism of insurance services supported by eCRM technologies play a significant role in customer delight movement .And also believed that the service providers positive frame of mind and respect for their clients would delight the customers of life insurance sector of India.
Sunayna khurana (2008) stated that protection is the main purpose of buying an insurance policy. Only 6.3% of the respondent faced problems. And 56%of the respondents are ready to buy new insurance plans from the same company.
Paromita Goswami (2007) observe that proper implementation would not only ensure increased customer satisfaction but also help in acquiring new customers at same time retaining the old customer. Improved customer satisfaction would also result in positive world of mouth and consequently better customer acquisition and retention.
~ 30 ~
B S Bodla and Sushma rani verma (2007) a large number of respondent have got inured themselves for life coverage and for future contingencies. LIC has got the maximum 93% market share among various life insurance players. Most of the respondents were found to be satisfied with performance of the insurance companies. T Sri jyothi (2007) he stressed that the importance of adaptation measures to attract insurance companies towards offer in catastrophic risk insurance and disaster insurance at affordable prices.
Sunil Mahesware (2005) in her article entitled managing insurance managing agent pointed out that only quality agent can sale insurance product in market.
Jack Burke (2005) stated that, the art of building a relationship stressed that only post sale service help in capturing more customers.
Gautam Bansal and Pawan Teneja (2005) find that life insurance advertisement on TV will be more effective if they have emotional appeals has better influence. It is more socially oriented.
Ravi kumar Sharma (2005) he observed that LIC has higher brand awareness. LIC agents are more effective than other private insurance agents. Rural people have less faith in private players.
Dobhal (2002) stated that media had traditionally played little part in influencing decisions, but today there is a growth and shift from print to television.
~ 31 ~
Matienzo peter j (2001) stated that selling of insurance is more effective when a blend of personal involvement is added to it. Value added practices such as ringing the clients telephone on his birthday or
sending a gift. Also providing some value added service to client such as providing information and expert comments on other areas not related to the profession helps.
Tandon,et al (1997) reported that majority of the respondents have a positive attitude towards advertisement in general. They have clearly indicated that advertisement has a useful role to play in the society.
B.K.S.Parkesh Rao and B.H.Venkateswara Rao (2005) stated that the establishment of micro-branches and the appointment of specialized insurance agents in rural areas help policy holders to market different insurance product.
~ 32 ~
PROJECT IN THE COMPANY
~ 33 ~
INTRODUCTION
According to Maslow¶s need hierarchy, security needs are second only to basic needs. Man¶s desire to feel safe and protected from future disasters or undesirable events led to the concept of insurance.A thriving Insurance sector is of vital importance to every type of economy whether developed or developing or under developed, as it encourages the savings habit and provide a safety net to rural/urban enterprises and productive individuals. By saving, people help the nation. The amount paid as premium is the most important tool for development and growth of a nation as it generates long term investible funds. Worldwide, Insurance is used as a risk cover instrument whereas Indian consumer perceives it as a tax-saving and investment option. The vast potential of the 250 million strong middle class population of India, can be unleashed by repositioning it as a risk cover instrument. The factors which could lead to a larger market penetration are Greater market awareness Increase tax base Education Changing socio-economic trends.
All this can be achieved by giving business opportunity to quality people as an agent advisor in insurance sector and thus expanding the distribution channel. Product and prices in an insurance industry are easily duplicated and thus are more or less same. So the difference lies in the services provided by the companies which give competitive edge in the long run. So the channel through which a company can achieve market penetration by providing efficient services should be that of recruiting more and more advisors in its distribution channel. The advisor¶s role is very important in an insurance sector as they are able to accomplish the following important services-: Assessing and analyzing the client¶s risk profile. Finding the best possible solution for the customer. Designing product according to the need of the customer
~ 34 ~
Negotiating the best deal available Continuity of the service throughout the period of Insurance claims advisory services.
The reason why this channel distribution system is lagging in India is because of high cost of recruiting but low revenue due to lower penetration of the market. Channel decisions are now elevated to a strategic level. The overriding concept is to become customer-centric and to focus channels on improving the customer experience. But it is not advisable to use all channels to serve all customers. Some customer segments may prefer certain channels, but if these segments are not profitable, it may be prohibitively expensive to serve them using their preferred channels. Consequently, insurance companies need to tailor their channels to appeal to the largest number of profitable customers to maximize earnings
(ii) Background
By any yardstick, India, with about 200 million middle class households, presents a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. Graphs and statistics reflect the low percentage of per capita penetration of insurance in India compared to other developed and developing countries. The Insurance sector in India is one and half centuries old. Pre-liberalization, the Insurance market was monopolized by LIC, GIC and its four subsidiaries. The opening up of the Insurance sector has seen a surge not only in the number of foreign players entering the market but also in the variety of products being offered. The total premium in India is approximately 2% of our GDP, which is far below the world average of 7.8% the insurance penetration in India is only 2% Per capita income of the India is expected to grow at over 6% for the next 10 years, In a similar way, with the increasing awareness levels among Indian citizens; The demand for insurance is expected to grow at an attractive rate of interest. An independent consulting company, The Monitor Group, has estimated that the Life insurance market will grow from Rs.218 billion in 1998 to Rs.1003 billion
~ 35 ~
By 2008 (a compounded annual growth of 16.5%).
INDIAN INSURANCE INDUSTRY
Life Insurance:
In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. ³Unethical practices adopted by some of the players against the interests of the consumers´ then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that ³nationalization has lent the industry fairness, solidity, growth and reach.´
Some of the important milestones in the life insurance business in India
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: The market contained 154 Indian and 16 foreign life insurance companies.
~ 36 ~
(iv) Purpose and need of insurance:The business of insurance is related to the protection of the economic value of assets. Every asset has value. The asset would have been created through the efforts of the owner, in the expectation that, either through the income generated there from or some other output, some of his needs would be met. In the case of a factory or a cow, the production is sold and income generated. In the case of a motorcar, it provides comfort and convenience in transportation. There is no direct income. There is normally expected life time for the asset during which time it is expected to perform. The owner, aware of this, can so manage his affairs that by the end of that life time, a substitute is made available to ensure that the value or income is not lost. However, if the assert gets lost earlier, being destroyed or made non functional, through an accident or other unfortunate event, the owner and those deriving benefits there from suffer. Insurance is mechanism that helps to reduce such adverse consequences. A human life is also an income generating asset. This asset also can be lost through unexpectedly early death or made non-functional through sickness and disabilities caused by accidents. Accidents may or may not happen. Death will happen, but the timing is uncertain. If it happens around the time of one¶s retirement, when it could be expected that the income will normally cease, the person concerned could have made some other arrangements to meet the continuing needs. But if it happens much earlier when the alternate arrangements are not in place, insurance is necessary to help those dependent on the income.
(v) How Insurance works?
While it may seem complex, insurance is really quite simple: The payments (or premiums) of the many pay for the losses of a few. Your premiums go into a large pool, if you will, at your insurance company. The claims of the few are paid from that pool. Because there are more people contributing to the pool than there are making claims, there is always enough to pay the claims ± even large single claims like when someone is permanently disabled as a result of a car collision, or many smaller claims like those resulting from a natural disaster. (The 1998 ice storm that hit parts of Ontario, Quebec and New Brunswick resulted in an estimated 700,000 claims for damage totaling $1.4 billion.) However, large disasters (such as the ice storm) do come close to emptying the pool.
~ 37 ~
Insurance for insurance companies:Even when the pool comes close to emptying, there is another pool from which insurance companies can draw to pay claims. Some of your premiums are used by your insurance company to buy reinsurance ± insurance for insurance companies. Sometimes losses are so big ± like those resulting from an earthquake ± that there is no way that an insurance company can cover the costs. Reinsuranceis an extra layer of protection against large losses.
Annual replenishing:Your insurance is an annual contract, so the pool operates for only one year at a time. Your premiums and the premiums of others are based on how much money the insurance companies think they will need to pay the coming year¶s claims. Your premiums do not build up over the years ± unlike the premiums for some types of life insurance.
The Business of Insurance:Insurance companies are called insurers. The business of insurance is to (a) brings together persons with common interests (sharing some risks), (b) collect the share or contribution (called premiums) from all of them, and (c) pay out compensations (called claims) to those who suffer from the risks. In India, insurance business is classified primarily as life and non-life insurance or general insurance.
Reinsurance:Reinsurance is a means by which an insurance company can protect itself with other insurance companies against the risk of losses. Individuals and corporations obtain insurance policies to provide protection for various risks (hurricanes, earthquakes, lawsuits, collisions, sickness and death, etc.). Reinsurers, in turn, provide insurance to insurance companies. There are many reasons why an insurance company would choose to reinsure as part of its responsibility to manage a portfolio of risks for the benefit of its policyholders and investors. The main use of any insurer that might practice reinsurance is to allow the company to assume greater individual risks than its size would otherwise allow, and to protect a company against losses. Reinsurance allows an insurance company to offer higher limits of protection to a policyholder than its own assets would allow. For example, if the principal insurance company can write only $10 million in limits on any given policy, it can reinsure (or cede) the amount of the limits in excess of $10 million.Reinsurance¶s highly refined uses in recent years include applications where reinsurance was used as part of a carefully planned hedge strategy
~ 38 ~
(vi) Role of Insurance in Economic Development:For economic development, investments are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments for economic growth. An insurance company¶s strength lies in the fact that huge amounts come by way of premiums. Every premium represents a risk that is covered by that premium. In effect, therefore, these vast amounts represent pooling of risks. The funds are collected and held in trust for the benefit of the policyholders. The management of insurance companies is required to keep this aspect in mind and make all its decisions in ways that benefit the community. This applies also to its investments. This is why successful insurance companies would not be found investing in speculative ventures. Their investments benefit the society the society at large. The very existence of risk that is, uncertainty concerning the future, is a severe handicap in economic activities. Insurance removes the fear, worry and anxiety associated with this future uncertainty and thus encourages free investment of capital in business enterprises and promotes efficient use of existing resources. Thus insurance encourages commercial and industrial development and there by contributes to a vigorous economy and increased national productivity. Present day organization of industry, commerce and trade depend entirely on insurance for their operation, banks and financial institutions lend money to industrial and commercial undertakings only on the basis of the collateral security of insurance. No bank or financial institution would advance loans on property unless it is insured against loss or damage by insurable perils.
(vii) What is Life Insurance?
Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects yours family from financial crises. In addition to serving as a protective cover, life insurance acts as a flexible money-saving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably.
~ 39 ~
(viii)Why Do I Need Life Insurance?
Isn't that what you ask yourself all the time? Here's a small answer to that You need Life Insurance because typically the need for income continues for those who are financially dependent on you, but there is no guarantee of your ability to earn consistently and for the rest of your life. Life insurance can help you safeguard the financial needs of your family. This need has become even more important due to steady disintegration of the prevalent joint family system, and emergence of nuclear families. The need to protect your family's ever growing needs is why you need Life Insurance.
(ix)Key Benefits of Life Insurance
Life insurance, especially tailored to meet your financial needs
Need for Life Insurance
Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets.
Let us look at these unique benefits of life insurance in detail. Asset Protection
From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation. The core benefit of life insurance is that the financial interests of one¶s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.
~ 40 ~
Goal based saving
Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence. Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailor-made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. The table below gives a general guide to the plans that are appropriate for different life stages.
Life Stage Young & Single
Primary Need Asset creation
Life Insurance Product Wealth creation plans Wealth creation and mortgage protection plans Education insurance, mortgage protection & wealth creation plans Retirement solutions & mortgage protection Health Insurance
Young & Just married Asset creation & protection Children's education, Asset creation and protection Planning for retirement & asset protection Health plans
Married with kids Middle aged with grown up kids Across all life-stages
~ 41 ~
(x)Principles of Life Insurance:Indeminity
A contract of insurance contained in a fire, marine, burglary or any other policy (excepting life assurance and personal accident and sickness insurance) is a contract of indemnity.
Utmost good faith
Since insurance shifts risk from one party to another, it is essential that there must be utmost good faith and mutual confidence between the insured and the insurer. In a contract of insurance the insured knows more about the subject matter of the contract than the insurer. Consequently, he is duty bound to disclose accurately all material facts and nothing should be withheld or concealed. Any fact is material, which goes to the root of the contract of insurance and has a bearing on the risk involved. It is only when the insurer knows the whole truth that he is in a position to judge (a) whether he should accept the risk and (b) what premium he should charge.
Insurable interest
-A contract of insurance affected without insurable interest is void. It means that the insured
must have an actual pecuniary interest and not a mere anxiety or sentimental interest in the subject matter of the insurance. The insured must be so situated with regard to the thing insured that he would have benefit by its existence and loss from its destruction.
Cause proxima
The rule of cause proxima means that the cause of the loss must be proximate or immediate and not remote.
Risk
In a contract of insurance the insurer undertakes to protect the insured from a specified loss and the insurer receive a premium for running the risk of such loss. Thus, risk must attach to a policy.
Mitigation of loss
In the event of some mishap to the insured property, the insured must take all necessary steps to mitigate or minimize the loss, just as any prudent person would do in those circumstances. If he does not do so, the insurer can avoid the payment of loss attributable to his negligence.
Subrogation
The doctrine of subrogation is a corollary to the principle of indemnity and applies only to fire and marine insurance. According to it, when an insured has received full indemnity in respect of his loss, all rights and remedies which he has against third person will pass on to the insurer and will be exercised for his benefit until he (the insurer) recoups the amount he has paid under the policy. It must be clarified here that the insurer's right of subrogation arises.
~ 42 ~
Contribution
Where there are two or more insurance on one risk, the principle of contribution comes into play. The aim of contribution is to distribute the actual amount of loss among the different insurers who are liable for the same risk under different policies in respect of the same subject matter. Any one insurer may pay to the insured the full amount of the loss covered by the policy and then become entitled to contribution from his co-insurers in proportion to the amount which each has undertaken to pay in case of loss of the same subject-matter.
(xi)Life Insurance Contracts
A life insurance policy is contract, in terms of the Indian Contract Act, 1872. A contract is an agreement between two or more parties to do, or not to do, so as to create a legally binding relationship.
(xii)Essentialsofa Contract
(a) Offer and acceptance (b) Consideration (c) Free consent are consensus µad idem¶ (d) Capacity to contract (e) Legally binding relationship (f) Legality of object or purpose (g) Capability of performance Insurance is a specialized type of contract. Apart from the usual essentials of a valid contract, insurance contracts are subject to two additional principles viz. Principle of Utmost Good Faith & Principle of Insurable Interest. These apply to both life and non-life Insurance.
(xiii) Sec. 45 of Insurance Act 1938
Insurer¶s right to declare the policy void is however, restricted by sec. 45 of Insurance Act 1938 which says that if a policy has run for 2 years or more no insurance company can call it to question on the ground of any false or inaccurate statements unless such misrepresentation is material to the risk and fraudulently made
(xiv) Facts which need not be disclosed:
(a) Facts which which are common knowledge (b) Facts of law (c) Facts which a survey can reveal (d) Facts about with insurance company has waived further information (Principle of waiver) (b)To start with, you must have an insurable interest in the item you want covered. In other words, any untoward happening related to the insured item should result in afinancial loss to you. For instance, you have a financial interest in insuring a house you own. However, if you
~ 43 ~
have rented a house, it¶s your responsibility to get it insured only if it is explicitly stated so in the lease agreement. If it is not stated but you still insure it, and subsequently raise a claim, it is likely to be rejected by the insurer on the grounds that you don¶t have any insurable interest in the property, the owner of the house does. By the same principle, good belonging to others that might be lying in your house are not covered as part of your home insurance policy. If these are stolen or damaged, your insurer is likely to reject any claim made by you.
(xv) Different Risks
The life ins. Business deals with risks relating to life of human beings. The circumstances (perils) that create the loss of damage (risks) are mainly two, death and old age. Ins. Does not prevent either. Human beings also run the risk of sickness, accidents and unemployment these risks are insured by general insurance co. However supplementary benefits are riders. Risk can be managed by. Prevention is avoidance Retention Transfer
(xvi) Needs and Insurance
Risks arise because there are needs to be fulfilled. The risks attached to early death arise because of the need to maintain the family that is left behind. If there were not needs, there would be no risks. Insurance is, therefore, related to the needs of individuals. Different plans are designed with different benefits, so that they may cater to the different needs of people. While selling life insurance, therefore, it is necessary to be aware of the needs of people. Protection of the standard of living of the family is at risk on early death. Insurance must provide the necessary income to maintain the standard, after providing for repayment of loans and other debts. Modern lifestyles subject people to debts on account of car, house, appliances and equipment¶s at home obtained on hire purchase arrangements. Future expenses on account of children¶s education, marriage, start of some business and so on, which are ambitions and dreams these needs have to be met, after meeting the costs of inflation. People would not be consciously aware of these as formidable problems in the future. Even if they do, they may not be willing to sacrifice some of the pleasures of the present in order to provide for the future. This is the difficulty, which life insurance agents¶ face.
~ 44 ~
(xvii) Life Stage Profiler
All through your life, several significant events the birth of your child, moving to a larger home, his or her education and wedding, buying a new car, retiring from work will occur at various stages and demand your financial commitment. If you plan in advance for these events, you will quite naturally be prepared when they occur Life insurance is an effective tool that assists you to plan for your future such that you are financially equipped to meet all your goals. Which important goals should you plan for in advance?
1) Your family's protection - so that your loved ones are secure should an unfortunate event happen to you. Buying Life insurance assures that your family receives a lump sum that safely tides them over any financial crises that might occur in your absence. 2) Child's education: As parent, your primary responsibility is to ensure your children's future. Our Education Insurance plans ensure your child receives money at key stages of his or her education even in your absence. 3) Savings: Savings plans allow you to steadily save towards a pre-decided goal in a secure manner. These plans provide you with a host of benefits. You can choose the premium, the underlying fund in which you want to invest your money, the ratio between protection and investment as per your requirements. 4) Retirement: Retirement plans help you secure regular income for your retired life. During the Accumulation phase, you systematically save while you are working. When you retire, the Payout stage of the plan begins. You then purchase an annuity, which will serve as a steady stream of income, for the rest of your life. 5) Health: An integral part for financial planning is protecting oneself against any medical emergencies as well. Hence, a very prudent decision would be to choose a combination of plans that look after your finances and offer you a protective health cover to ensure your financial planning is in track despite any major illnesses.
~ 45 ~
(xviii) Life Insurance Plans
Life insurance products assure your family will receive financial support, even in your absence. Put simply, when you buy insurance you provide your family with a sum of money, should something happen to you. It thus permanently protects your family from financial crises. In addition to serving as a protective cover, when you buy insurance you create a flexible money-saving scheme, which empowers you to accumulate wealth to buy a new car, get your children educational solutions, and even retire comfortably. Today, there is no shortage of investment options for a person to choose from. Given the plethora of choices, it becomes imperative to make the right choice when investing your hardearned money, and online insurance is an ideal choice in today¶s technology driven world. Buying Life insurance online is a way to make a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets. From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, buying life insurance online gets you the unique reassurance of asset protection, along with a strong element of asset appreciation. When you buy life insurance online the core benefit is that the financial interests of one¶s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, buying life insurance online gives a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and online insurance products occupy a unique space in the landscape of investment options available to a customer. As your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Online insurance products are the only investment option that offer specific products tailor-made for different life stages. You are thus ensured that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. On the basis of which life stage you are in and the corresponding insurance needs, Bharti AXA plans can be categorized into the following three types:
~ 46 ~
Wealth Confident plans
Guarantee Builderplans
Dream Life Pension plans
~ 47 ~
Aspire Life plans
Save Confident plans
~ 48 ~
Secure Confident plans
(xix) Human Life Value
What is your Human Life Value? Beyond all doubt, your life is invaluable. Yet, there is a certain worth that can be attributed to the financial support you offer your parents, spouse or children. This worth is referred to as Human Life Value (HLV). In the future, if your family does not have the protective blanket of your presence, they will no longer be able to enjoy the benefits of the income you earned. Put simply, Human Life Value is the present value of your future earnings. Why should you calculate your Human Life Value? You should calculate your Human Life Value so you can accordingly invest in insurance plans that provide your family with adequate finances and hence security even in your absence. How do you determine your Human Life Value? Your Human Life Value is determined by 3 factors: 1. Your age 2. Current and future expenses 3. Current and future income As a thumb rule, if you are 30 years of age, you should insure yourself for an amount approximately 8 times your annual income. At 35, your investment should be close to 6 times your income. Of course, the exact amount of your investment should be determined by the number of people who depend on you, you¶re existing investments and your life stage. For example, if you are 30 years of age and have two children and parents to provide for, the amount you invest should be reflective of your requireme
~ 49 ~
(xx) What is linked policy?
Most importantly, what are ULIPs? Here, you will find all the information you need to set your mind at ease about how to invest in ULIPs, and which ULIP is right for you. ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by you. Simply put, ULIPs are structured in such that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency. Working of ULIPs It is critical that you understand how your money gets invested once you purchase a ULIP: When you decide the amount of premium to be paid and the amount of life cover you want from the ULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known as the Premium Allocation charge, and varies from product to product. The rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the ULIP fund management charges are adjusted from NAV on a daily basis. Since the fund of your choice has an underlying investment ± either in equity or debt or a combination of the two ± your fund value will reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the time of maturity. The pie-chart below illustrates the split of your ULIP premium: Broadly, insurance plans can be distinctly divided into ULIP (Unit Linked Insurance Plans) and traditional plans. A brief detail of both segments: (a) ULIPs (Unit Linked Insurance Plans) ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the attractive features they offer. Benefits include flexibility, Transparency, Liquidity, and Fund Options.
~ 50 ~
Flexibility Flexibility to change your life cover: ULIPs give you the flexibility to choose your sum assured (insurance cover) at the time of policy inception. Moreover, some ULIPs allow you to increase your sum assured over the term of the plan. This is crucial as your protection needs keep on changing with time .Typically, greater the financial liabilities you have such as repayment of a home loan, greater will be your need for protection. Flexibility to change premium amount: With ULIPs you can easily change premium amount as most ULIPs provide you the option to increase or reduce premiums after a certain period of time to match your premium paying capability. Another distinguishing feature of ULIP is Top up which is an additional contribution over &above regular premium so that if you receive extra money today you can invest the amount in your policy & maximize your investment gains. Flexibility to opt for a rider: ULIPs also enable you to customize the policy with optional riders to enjoy additional protection. Riders are additional or supplementary benefits that are bought along with the main insurance policy. Some of the commonly offered riders by most insurance companies are critical illness benefit rider, accident & disability benefit rider, waiver of premium rider etc. For ex. a critical illness rider cover major critical illnesses like heart attack etc. In case of contracting any of the above illness, the insurance company pays the insured amount.
Flexibility to choose your fund option: Most of the ULIPs come with an in - built range of fund options to choose from ±ranging from aggressive funds to conservative funds so that you can decide to invest your money in line with your investment preferences and needs. What¶s more, ULIPs even come with the option of switching between different fund options so that you are able to reap maximum benefits from your investments.
Transparency
ULIPS offer a high degree of transparency, where all charges in the plan as well as the entire net amount invested is made known to the customer. ULIPs also offer the convenience of tracking your investment performance on a day to day basis, so you can decide instantly where you want your assets allocated.
~ 51 ~
Liquidity
A ULIP offers you the option of withdrawing money a few years into the plan, allowing for the exigencies of life. Alternatively, a ULIP will also allow for partial/systematic withdrawal should the need arise. Fund Options A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a combination of the three. The customer is also afforded the option of choosing your fund mix based on your desired asset allocation. Equity Funds: In this type of fund, sometimes also called growth funds,there would be more investments in equities which are shares/stocks traded in the stock market. Debt Funds: In this type of fund, also called Bond funds, the investments are primarily in Government and Government guaranteed securities and such safe debts and other high investment grade corporate bonds. Money market funds: In this type of fund, sometimes also called liquid funds, the investment may be more in short term money market instruments such as treasury bills, commercial papers, etc. Balanced Funds: In this type of funds, the investments are in both equity as well as debts. (b) Traditional Plans These are the oldest types of insurance plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: 1. Steady Investment 1. Major chunk of investible funds are in debt instruments. 2. Steady and almost assured returns over the long term. 2. Features 1. Death benefit is Sum Assured + guaranteed & vested bonus. 2. Helps in asset creation as they are for a long tenure. 3. Premium to Sum Assured ratios are fixed for each plan and age. 4. Generally withdrawals are not allowed before maturity
~ 52 ~
Bright stars PLUS
{The launch pad for your child¶s bright future}
~ 53 ~
Bharti Axa life
In this Policy, the investment risk in the investment portfolio is borne by the Policyholder. As a caring parent, you want only the best for your child. As your child grows, his aspirations will grow too and so will your responsibilities. Whether it¶s higher studies abroad, a grand wedding or a comfortable home « you can now ensure that your child is always one step ahead ± financially. Bharti AXA Life Bright Stars with Jumpstart Benefit is a unique child plan designed to give your child the right launch pad into a promising future. At maturity, this plan offers an additional lump sum amount to take care of the finances at the key stages of your child¶s life. What¶s more, the plan also provides you with a life protection cover ± so should anything unfortunate happen to you, Bharti AXA Life Bright Stars ensures that your dreams for your child still live on. The plan also offers the flexibility to make modifications, depending on the changing needs of your child. As his dreams grow, the plan will grow too« so financial hurdles will never come in the way of his growing dreams! With Bharti AXA Life Bright Stars, you can fulfill all the dreams you have for your child, and give him what he deserves. A bright future!
~ 54 ~
What is Bharti Axa Life Bright Stars PLUS?
This is a regular premium unit-linked Insurance Policy, which offers you the twin, benefits of protecting your loved ones & creating wealth for them over the desired period. You can plan & invest in a systematic manner through this product for certain important events (financial goals) in your life like your child¶s higher education / marriage or buying a house! Bharti AXA Life Bright Stars plus offers you the twin benefits of protecting your loved ones & creating wealth for them over the desired period. (a)What are your advantages with Bharti Axa Life Bright Stars plus: Smart financial solution for protecting your family- in unfortunate event of deathThe sum assured gets paid out to your nominee immediately PLUS Bharti AXA Life will pay ALL your future premium into the investment funds to ensure that the ambitions of your loved ones are achevied PLUS Jumpstart benefits during the policy term Jumpstart benefit (7% or 5% of average fund value depending on term chosen ) is credited to your investment fund irrespective of whether the life is alive or not You can in any of 6market ± linked investment funds A number of flexibilities to take care of your changing needs- switches, premium redirection, Top- ups, Partial withdrawals, Decrease of premium, Cover continuance etc The death benefit is payable even if you have opted for the cover continuance option You can enchance your protection in this product by adding riders Tax benefits for premiums paid and benefits received, as per the prevailing tax laws
‡ ‡
‡ ‡
‡ ‡
‡ ‡ ‡
Enjoy the benefits of high returns along with a life cover. Also, receive an additional amount through Jumpstart Benefit at Policy maturity.
~ 55 ~
(b)How does Bharti AXA Life Bright Stars PLUS work
Choose your premium and Policy Benefit Period, which decides the Sum Assured
Enhance your protection by Adding riders
Choose from 6 Investment Funds to invest your premiums
In case of death, Sum Assured is paid out
Bharti AXA Life Pays all future Premiums into
On maturity, you will get Policy Fund Value + Jumpstart Benefit
~ 56 ~
(c)Benefits of Bharti AXA Life Bright Stars plus
1. Life Insurance Benefit:
The Sum Assured under the Policy is based on the Policy benefit period chosen by you. Policy Benefit Period Sum Assured
7 years 10 years 15 years 20 years 25 years
5 times Annualized Regular Premium 5 times Annualized Regular Premium 8 times Annualized Regular Premium 10 times Annualized Regular Premium 10 times Annualized Regular Premium
In the unfortunate event of death of the Life insured during the Policy benefit period, the following benefits are available: Payment of Sum Assured immediately All the future premiums payable till maturities are waived off and The Policy continues until maturity with the nominee having the right to exercise all the applicable benefits under the Policy 2. Maturity Benefit: On maturity of the Policy, you or your nominee will get the Policy Fund Value PLUS Jumpstart Benefit. The Jumpstart Benefit gives you financial freedom, so your child is not constrained when it comes to taking advantage of various career opportunities. Life Insurance Benefit:With built-in life insurance plus critical illness cover (optional), it provides complete, all-round protection for your child.
~ 57 ~
3. SpecialAdditions with Jumpstart Benefit:
Policy term 7 years &10 years 15 years 20 years &25 years Jumpstart benefit 5% of average fund value 7% of average fund value 7% of average fund value Credited to investment fund At maturity At maturity 5 years before maturity (End of 15th / 20th policy year)
*calculated as a %of average policy fund value at the end of previous 36 policy months.
4. Critical Illness Benefit Rider:
In addition to your life insurance benefit, you can also enhance your protection by adding Critical Illness Benefit Rider by paying a nominal amount. This rider will pay the chosen Rider Sum Assured in case you are diagnosed with any of the below mentioned critical illnesses and subject to the terms and conditions Contained in the Critical Illness Benefit Rider ± Policy Bond:
Cancer Coronary Artery Bypass Surgery Heart Attack Kidney Failure Major Organ Transplant Stroke
You can use this Rider Sum Assured to meet various expenses that are generally incurred in treatment of critical illnesses like hospitalization expenses, surgery, cost of medicines, diagnosis, possible loss of pay etc. Please ask your advisor to show you the separate rider brochure for details of applicable terms and conditions of this rider.
~ 58 ~
5. Choice of Investment Funds:
You have a choice of investing your premiums in any or all of the four investment funds, as per your financial objective.
Investment Fund Growth Opportunities Fund Objective To provide long term capital appreciation through investing in stocks across all market capitalization ranges. To provide long term capital appreciation through investing across a diversified high quality equity portfolio. To provide steady accumulation of income in medium to long term by investing in high quality debt papers and government securities and a limited opportunity of capital appreciation. To provide steady accumulation of income in medium to long term by investing in high quality debt papers and government securities To provide capital protection through investment in low risk money market and short term debt instruments with maturity of 1year or lesser To provide long term capital appreciation through exposure to equity investment in infrastructure and allied sectors, and by diversifying investment across various sub-sector of the infrastructure sector Asset Allocation Listed equities: 80%100%, Cash and money market instruments:0%-40% Listed equities:80%-100%, Cash and money market instrument:0%-40% High. Listed equities:0%-60%, Corporate bonds and bank deposits:0%-50%, Government bonds and securities:0%-40%, Cash and money market instruments:0%-40% Corporate bonds and bank deposits:20%-80%, Government bonds and securities:20%-80%, Cash and money market instruments:0%-40% Corporate bonds and bank deposits:0%-60%, Government bonds and securities;0%-60%, Cash and money market instruments:0%-40% Listed equities:80%-100%, Cash and money market instruments:0%-20%, corporate bonds and bank deposits:0%-20% Risk-Return Potential
High.
Grow Money Fund
Save µn¶ grow Money Fund
Moderate.
Steady Money Fund
Low.
Safe Money Fund
Low,
Build India Fund
High.
~ 59 ~
6. Manage your investments with Switch and Premium Redirection facility:
Through the feature of switches & premium redirection you can manage your asset allocation between equity & debt depending on your needs. For example you may wish to move your money to a low-risk investment fund option before maturity of the Policy to protect against adverse movements in equity markets You can switch 12 times in a Policy year free of charge, beyond which a charge of Rs. 100 per switch is levied. The minimum value of a switch should be Rs. 1000. You can also redirect your future premiums after first Policy year into different funds with Premium Redirection facility. This facility can be availed of any number of times free of charge. The minimum allocation in any chosen investment fund should be 5%.
7. Top-up Premiums:
You can invest a bonus received from your employer or profits earned from your business or any other surplus in your existing investments to achieve your financial goals faster. With the top-up option, you can boost your contribution any time after the first Policy year. The minimum amount of a single top-up is Rs. 1000. The total amount of top-up in a Policy year cannot be more than 25% of total regular premiums paid till that date. Top-up premium has no effect on your Sum Assured.
8. Liquidity Benefit with Partial Withdrawal:
We all need money during our lifetime to full fill certain goals. From time to time, you may need money to pay for your child¶s education, going on a long vacation, pay off an existing loan etc. You can withdraw money from your Policy Fund Value any time after completion of three Policy years. Each partial withdrawal should be a minimum of Rs. 1000 and after withdrawal the Policy Fund Value should not be less than 120% of the Annualized Regular Premium. Two partial withdrawals are free of charge in a Policy year and each subsequent partial withdrawal will be subject to a charge of Rs. 100.
~ 60 ~
9. Decrease in Premium:
While we recommend that you pay the agreed amount of annual premium for the entire term of the Policy, we also understand that sometimes you may face financial constraints which might make it difficult for you to pay the agreed premium throughout the term. Therefore, in this product, we allow you to decrease the premium amount any time after completion of two Policy years. Decrease in premium will decrease your Sum Assured in the same proportion. Annualized Regular Premium can be reduced subject to the following condition: During 3rd policy year, the Annualized Regular Premium can be reduced such that the revised premium is at least higher of 75% of first year Annualized Regular Premium Minimum Annualized Regular Premium From 4th policy year onwards, the Annualized Regular Premium can be reduced to the minimum Annualized Regular Premium.
10. Cover Continuance Option:
While we recommend that all your regular premiums be paid on the respective due dates, we also understand that due to sudden changes in lifestyle like increased responsibilities or unexpected increase in household expenses may affect your future ability to pay premiums. Now you need not worry if you are unable to pay premiums into your Policy. The cover continuance option entitles you to continue your Policy with all benefits if you are unable to pay premiums (as per the table below). Once you have opted for this option, you cannot pay any further premiums or top-ups under the Policy. Policy Benefit Period 7 years Cover continuance available after payment of A flexible plan that adapts to the changing needs of your child over time. 10 years 15 years 20 years 25 years
3 annualized 3 annualized 5 annualized 5 annualized 5 annualized regular regular regular regular regular premiums premiums premiums premiums premiums
~ 61 ~
11. Extended Maturity Benefit with Settlement Option:
You may want to take advantage of Bharti AXA Life¶s fund management expertise even after maturity of your Policy. You can avail any of the following options at maturity: Take entire maturity proceeds (Policy Fund Value + Jumpstart Benefit) as lump sum payment on maturity; or Take the maturity proceeds (Policy Fund Value + Jumpstart Benefit) at regular intervals in installments over 5 years after the maturity A combination of the above mentioned two options date (extended maturity period). The value payable at such intervals will be calculated at the unit price as on the relevant date At any time during the extended maturity period, you have an option to withdraw the balance available Policy Fund Value as on that date. However, you will not be entitled to life insurance benefit or partial withdrawals / switches between investment funds or top-ups during this period. UPlease note that during the extended maturity period, the investment risk in the investment portfolio continues to be borne by the Policyholder.
~ 62 ~
(d) What are the applicable charges in this product?
1. Premium allocation charge: This charge is levied at the time of premium allocation and depends on the premium amount, Policy benefit period and the Policy year. Premium Band 1 = Annualized Regular Premium between Rs. 15,000 and Rs. 99,999. Premium Band 2 = Annualized Regular Premium of Rs. 1,00,000 & above. Policy 7 years 10 years 15 years 20 years Term Policy Year 1 Premium 28% 35% 35% 45% Band 1 Premium 25% 32% 32% 36% Band 2 2 Both 9% 15% 15% 24% Premium 3 5% 5% 5% 5% Bands 4++ 0% 0% 0% 0% Top-up premium subject to an allocation charge of 1.5% for both Premium Bands. 25 years
50% 50% 24% 5% 0%
2. Risk benefit charge: This charge is applied on the Sum Assured and isdeducted proportionately on a monthly basis by cancellation of units from the Policy Fund Value. The risk benefit charge will depend on your age at entry and Policy benefit period chosen and this charge will remain the same throughout the Policy benefit period. Annual Risk Benefit charges per Rs. 1000 of Sum Assured are as follows: Risk Benefit Charge for a 30-year-old
Age
Policy Benefit Period 7 years 10 years Rs. 3.74 Rs. 3.38 15 years Rs. 4.15 Rs. 3.60 20 years Rs. 5.02 Rs. 4.21 25 years Rs. 6.68 Rs. 5.49
Male Female
Rs. 2.95 Rs. 2.75
~ 63 ~
3. Policy Administration Charge: This charge is deducted by cancellation of units from the Policy Fund Value on a monthly basis. The charge is Rs. 60 per month increasing at 5% p.a. on every policy anniversary.
5. Fund Management Charge: This is a charge that is levied on each of the Investment Funds and is adjusted in the unit price calculation on a daily basis. The charges for the funds are as follows: Fund Name % of policy fund Fund Name % of policy fund value (p.a.) value (p.a.)
Growth opportunities 1.35% plus Grow money plus 1.35% Build India 1.35%
Save n Grow money 1.25% Steady money Safe money 1.00% 1.00%
5. Surrender Charges: The Surrender Charge is applied if and when you surrender your Policy in the first 5 Policy years. The surrender value that you will receive will be the Policy Fund Value less this charge. The surrender charges are applicable on the Policy Fund Value and are as follows:
Surrender year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 ++
7 years 75% 50% 25% 0% 0% 0%
10 years 75% 50% 25% 0% 0% 0%
15 years 91% 80% 50% 25% 10% 0%
20 years 91% 80% 50% 25% 10% 0%
25 years 91% 80% 50% 25% 10% 0%
If the Policy is surrendered within the first three Policy years then the surrender value as on the date of intimation of surrender will be paid only after the completion of three Policy years.
~ 64 ~
(e) Plan details :
Parameter Policy term options available Minimum age at entry Maximum age at entry Maximum age at maturity
Eligibility criteria 7 years, 10 years, 15 years, 20 years, & 25 years 18 years 70 years less policy term (7, 10, 15 & 20- year terms) 75 years for 25- year term 70 years (7, 10, 15 &20- year terms) 75 years for 25- year term
Minimum premium (RS. P.a.)
Minimum premium Annual mode Semiannual mode Quarterly mode Monthly mode
7years
10years
15years
20 years
25 years
36, 000
20, 000
15, 000 15, 000
15, 000 15, 000
12, 000 12, 000
18, 000 24, 000 18, 000
18, 000 18, 000
12, 000 12, 000
* Through ECS only Get tax benefits under section 80C & section 10 (10D)
~ 65 ~
The following table shows the benefit of Bharti AXA Life Bright Stars for a 30-year-old Male paying a premium of Rs. 36,000 per annum under annual mode. Monthly_Equity_Roundup_±_November_2009_ Policy Benefit Period 10 years 6% Sum Assured (Rs.) Policy Fund Value at Maturity (Rs.) Jumpstart Benefit (Rs.) 17,247 Total Maturity Benefit 4,18,59 1 (Rs.) Death Benefit (Rs.) 5,98,59 1 20,592 5,17,77 5 6,97,77 5 30,002 7,01,71 5 9,89,71 5 39,976 45,595 68,498 1,80,000 4,01,34 4 4,97,18 4 10% 15 years 6% 2,88,000 6,71,71 3 10% 20 years 6% 3,60,000 9,30,931 10,02,48 15,69,6 9 10 10%
9,70,907 10,48,08 16,38,1 5 08 12,58,90 14,08,08 19,98 7 5 ,108
6% and 10% are assumed gross investment rates per annum on Grow Money Fund.
(f) What are the tax benefits under this product?
You can avail of the tax benefits on the premiums paid and the benefits received as per the prevailing tax laws under Section 80C and Section 10 (10D) of the Income Tax Act, 1961. The tax benefits are subject to change as per change in Tax laws from time to time.
Section 41 Of Insurance Act 1938
³No 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 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 prospectus or tables of the Insurer.´
~ 66 ~
Section 45 Of Insurance Act 1938
³No Policy of life insurance shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the Policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the Policyholder and that the Policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no Policy shall be deemed to be called in question merely because the terms of the Policy are adjusted on subsequent proof that the age of the Life insured was incorrectly stated in the proposal.´
(g) Terms and Conditions
1. If any regular premium due within the first three years of the Policy remains unpaid even after the grace period of 30 days, the Policy lapses and all the benefits under the Policy cease to exist. You can however, revive the Policy by paying all the unpaid premiums within a period of two years from the due date of the last unpaid premium. If the Policy is not reinstated during the Reinstatement Period, the Policy will stand terminated and the Policy Fund Value as at the expiry of Reinstatement Period net of Surrender Charge as on the lapse date shall be payable at the completion of the third Policy year or at the end of the Reinstatement Period, whichever is later. 2. If the due premiums have been paid for at least three consecutive Policy years from the Policy Date and subsequent premiums are unpaid, you may reinstate the Policy within two years from the date of first unpaid premium by resuming premium payment by paying all the unpaid premiums and the appropriate Premium Allocation Charge shall be deducted from the above mentioned payment. During the period allowed for reinstatement, the Policy shall continue to be in effect by levying applicable Policy Charges. At the end of the allowed period for reinstatement, if you have not opted for cover continuance option, only the Policy Fund Value, after deducting applicable surrender charges will be paid and the Policy will terminate. In an event of death during the Reinstatement Period, the death benefit shall be paid out.
~ 67 ~
3. At any time during the Policy benefit period, after completion of 3 Policy years, if the Policy Fund Value falls below 120% of the Annualized Regular Premium, then the Policy will be terminated & the surrender value will be paid out. 4. In case of death of the Life insured during the Policy benefit period a. Where the Life insured and Policyholder are same, the Policy will continue till maturity of the Policy (provided that the nominee gives an undertaking-cumindemnity bond) and nominee is entitled to all the applicable benefits under the Policy, viz. partial withdrawals, switches, surrender, premium redirection & extended maturity benefit. Top-ups & change in annualized regular premium is not allowed. Also, nomination is mandatory where the life insured & policyholder are same. b. Where the Life insured and Policyholder are different, the Policy will continue till maturity of the Policy and the Policyholder is entitled to all the benefits available under the Policy.
5. Top-up benefit is not available after the death of the Life insured. 6. Free-look option: If you disagree with any of the terms and conditions of the Policy, you have the option to return the original Policy Bond along with a letter stating reasons for the objection within 15 days of receipt of the Policy Bond (³the free-look period´). The Policy will accordingly be cancelled and an amount equal to the sum of (Premium Allocation Charge, Policy Administration Charge, Risk Benefit Charge, deducted from the Policy Fund Value) and (the Policy Fund Value less stamp duty and underwriting expenses incurred by the Company), will be refunded to the Policyholder. 7. If the Life insured under the Policy, whether medically sane or insane, commits suicide, within one year of the Issue Date or the date of reinstatement of the Policy, the Policy shall be void and the Company will only be liable to pay the Policy Fund Value as on the date of intimation of death and all the benefits under the Policy shall cease to exist including future payment of premiums by the Company. 8. This is a non-participating Unit Linked Insurance Policy.
~ 68 ~
(h) Computation of Unit Price
The unit pricing shall be computed based on whether the Company is purchasing (appropriation price) or selling (expropriation price) the assets in order to meet the day to day transactions of unit allocations and unit redemptions i.e. the life insurer shall be required to sell / purchase the assets if unit redemptions / allocations exceed unit allocations/redemptions at the valuation date. The appropriation price shall apply in a situation when the Company is required to purchase the assets to allocate the units at the valuation date. This shall be the amount of money that the Company should put into the fund in respect of each unit it allocates in order to preserve the interests of the existing Policyholders. The unit price will be computed as follows: Market value of investment held by the fund plus the expenses incurred in the purchase of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any. This gives the net asset value of the fund. Dividing by the number of units existing at the valuation date (before any new units are allocated), gives the unit price of the fund under consideration.and do not in any manner indicate the quality of the Investment Funds The expropriation price shall apply in a situation when the Company is required to sell assets to redeem the units at the valuation date. This shall be the amount of money that the Company should take out of the fund in respect of each unit it cancels in order to preserve the interests of the continuing Policyholders. The unit price will be computed as follows: Market value of investment held by the fund less the expenses incurred in the sale of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any. This gives the net asset value of the fund. Dividing by the number of units existing at the valuation date (before any units are redeemed), gives the unit price of the fund under consideration.
~ 69 ~
(i) Risks of investment in unit-linked Policies:
Bharti AXA Life Bright Stars is a unit-linked insurance Policy and is different from traditional insurance Policies.
The premium in unit-linked insurance Policy are subject to investment risk associated with capital market and the NAV of the units may go up or own based on the performance of the investment funds and the factors influencing the capital markets and the insured is responsible for his / her decisions.
Bharti AXA Life Insurance Company Ltd. is only the name of the insurance company and Bharti AXA Life Bright Stars is only the name of the unit-linked insurance Policy and does not in any way represent or indicate the quality of the Policy, its future prospects and performance or the returns.
Bharti AXA Life Bright Stars does not provide for participation in the distribution of surplus or profits that may be declared by the Company.
Growth Opportunities Fund, Grow Money Fund, Steady Money Fund and Saveµn¶grow Money Fund are the names of the Investment Funds, their future prospects or returns.
~ 70 ~
RESEARCH METHODOLOGY
Research always starts with a question or a problem. Its purpose is to question through the application of the scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studied. Marketing research is the function which links the consumer, customer and public to the marketer through information- information used to identify and define marketing opportunities and problems generate, refine, and evaluate marketing actions, monitor marketing actions, monitor marketing performance and improve understanding of market as a process. Marketing research specifies the information required to address these issues, designs, and the method for collecting information, manage and implemented the data collection process, analyses the results and communicate the findings and their implication. I have prepared our project as descriptive type, as the objective of the study demands the answers of the question related to find the customers perception about life insurance product and popularity of ULIP in present scenario.
~ 71 ~
SAMPLING METHOD AND SAMPLE SIZE:Introduction:To get final conclusion of my research study and to know customer perception about life insurance product I need to conduct a survey. To full fill my objective I made questionnaires to collect primary data. I have gathered secondary data and primary data and collected information from the combination of these two data.
Primary data: I have taken great care while collecting primary data to answer that it is relevant, accurate, current and unbiased. I have taken a sample of 200 people. I have visited them personally to get data.
Secondary data: Secondary data consist of information that already exists somewhere, having been collected for another purpose. I have gathered secondary data from website of different operators, different magazines, newspapers and libraries.
Sample size: I have taken sample size of 200 respondents. Because the population is too large so it is difficult to survey. The Marketing Research Process: As marketing research is a systemic and formalized process, it follows a certain sequence of research action. The marketing process has the following steps: Formulating the problems Developing objectives of the research Designing an effective research plan Data collection techniques Evaluating the data and preparing a research report In order to accomplish this project successfully following steps have been taken-
~ 72 ~
Step-1 Preparation 1. Introduction: the research process 2. Approaches to research 3. Planning and designing research projects 4. Using the literature 5. Secondary data sources. Step-2 Approaches to Data collection 6. Observation 7. Qualitative methods 8. Questionnaire surveys 9. Experimental methods 10. Sampling and its implications Step-3 Analysis 11. Analyzing secondary data 12. Survey analysis 13. Statistical analysis 14. Qualitative analysis Step-4 Reporting 15. Reporting research results
~ 73 ~
DATA ANALYSIS AND INTERPRETATION
Here I have formed a questionnaire to study why people go for life insurance. What is people¶s major motive behind investing in life insurance? Do they decide upon their own or they take guidance of an agent? What is their perception about Reliance Life Insurance Company Limited?
~ 74 ~
Questions:There are 14 questions in the questionnaire. Out of these 14 questions, some questions are close ended and other questions are open ended.
Target Population:I had conducted this survey among 200 people, and the target group was a mix of people from the society. I asked the questions to people in randomly (only adult) Because every body can be a consumer of life insurance product and it essential for each individual and reduce the financial burden of government and it will give security to dependant. I have taken 123 male and 73 female as sample to know gender biasness in purchasing life insurance product and their awareness. From this sample I have collected 83 samples, whose age between 18 to 30 year and another 117 sample, age more than 30 year.
Analysis: I have used pie charts, and some other statistical measures to analyze the questions.
1. Survey to find out the educational qualification of respondents:
Table 1: Educational Qualification High school Intermediate Degree and above Technical Total No. Of percentage Respondents 30 15% 50 25% 80 40% 40 20% 200 100%
~ 75 ~
Chart 1:
90 80 70 60 50 40 30 20 10 0
80 50 30 40 No. Of Respondents
Interpretation: It is clear from the table and chart that 60% respondents are graduate and above or technically qualified remaining 25%are intermediate and only 15% are high school passed.
~ 76 ~
2. Survey to find out the occupation of respondents: Table 2
Occupation Professional Employee Business Agriculture Total No. Of respondents 60 70 40 30 200 percentage 30% 35% 20% 15% 100%
Chart 2:
No. Of respondents
30 40
60 Professional Employee Business 70 Agriculture
Interpretation: It is clear from above table and chart that occupation wise 35% of respondents
are employee and rest are represented as professional 30%, Businessmen 20% and 15% are agriculturist.
~ 77 ~
3. Survey to find out the annual income of respondents: Table 3:
Annual income (in Rs) Below 80,000 80,000-150,000 150,000-250,000 Above 250,000 Total
No. Of respondents 40 50 80 30 200
percentage 20% 25% 40% 15% 100%
Chart 3:
No. Of respondents
30 40 Below 80,000 80,000-150,000 150,000-250,000 80 50 Above 250,000
Interpretation: It is revealed that majority of respondents are fall in income group 150,000250,000 that is around 40%, and remaining 25% are fall in 80,000-150,000, 20% fall in income group below 80,000 and rest 15% are fall in above 250,000.
~ 78 ~
4. Survey to find out Reason for purchase of life insurance product:
There could be any motive of people behind investing in a life insurance policy. The main purpose of life insurance is the Risk cover of one¶s life. But some people consider different advantages of a life insurance policy. Some people consider Tax benefit as the main advantage of life insurance. Some believe that life insurance is an investment so they tend to invest in life insurance. While some people believe that it is a compulsory saving. Now let¶s see what all people say.
Table 4:
Reason for purchase of life insurance product Peace mind/ security Income protection Recommended by advisor Recommended by family/ friend Tax saving purpose others Total No. Of Respondents 100 50 14 6 24 6 200 Percentage 50% 25% 7% 3% 12% 3% 100%
Here we can see that majority of the people tend to invest in life insurance for the peace mind/security. The next preferred option is income protection. We founded from the discussion with public and some experts that those people with a low income tend to invest in life insurance to gain tax benefit. Others include only loan as a reason to purchase life insurance product.
Chart 4:
Reason for purchase life insurance product
Peace mind/security Income protection Recommended by advisor Recommended by family/friend Tax saving purpose others
~ 79 ~
Interpretation: It is clear from the table 4 and chart 4 that most of customer, 50% purchase insurance product for peace mind/ security. 25% customer are purchase insurance product for income protection and 7% customer are purchase insurance product recommended by advisor, 3% customer are purchase insurance product recommended by family/ friend, 12% customer are purchase insurance product for tax saving and 3% customer for other purposes.
5 Survey to find out criteria most valued by customer as a life insurance purchaser:Generally we know that a person buy policy through agent, we generally assume that there is greater roll of professional advice in purchasing life insurance product. And brand/trust is valued by the customer as a very important criterion. Now day¶s main attraction to buy life insurance plan is to return/fees. So these are the some believe that we value the life insurance product in above way. Now let¶s see what people say.
Table 5:
Most valued by customer as a No. Of respondents life insurance purchaser Return/ fees 74 Brand/ trust 62 Professional advice 28 Product 24 After sale services 12 Others 0 Total 200
Percentage 37% 31% 14% 12% 6% 0% 100%
~ 80 ~
Chart 5:
Criteria most valued by customer as a life insurance purchasers
After sales service 6% Professional advice 14% Return/fees 37% others 0%
Brand/trust 31%
product 12%
Interpretation: It is clear from table 5 and chart 5 that most of customer valued i.e. 37% return/ fees as a life insurance purchasers, 31% customer valued brand/ trust, 14% customer valued professional advice, 12% valued products, 6% after sale services and 0% valued other purposes
6 Survey to find out ³how many people interested to invest and their investment concern´:After introduction of ULIP in life insurance product, life insurance products are known by customer as an investment option. And agents are selling ULIP products as a best investment option. So I have put this question to know how many are really interested to invest and whether they are choosing life insurance product (ULIP) or any other option for investment.
~ 81 ~
Table 6:
Investment concern Respondents Building cash reserve Funding for child Life insurance product Asset purchase Retirement Others Total
of No. Of Respondents 74 34 34 26 24 8 200
percentage 37% 17% 17% 13% 12% 4% 100%
Chart 6:
No. Of Respondents
80 70 60 50 40 30 20 10 0
No. Of Respondents
~ 82 ~
Interpretation: It is clear from the above table and chart that most customer i.e.37% invested for building cash reserve, 17% invested for funding for child, 17% invested for life insurance product, 13% customer¶s investment is concern with asset purchase, 12% invested for retirement and 4% for other purposes.
7 Survey to know current investment portfolio of investors:Objective behind this question is to know the acceptability of ULIP as an investment option. How they decide there investment portfolio and percentage of different investment option in their current investment portfolio. So we can make a product that can fullfill there current demand. Like; we can add different feature like mutual fund, fixed deposit, government securities etc. in our life insurance product. Now let¶s see what all people say««««.
Table 7:
Investment portfolio of investor No. Of Respondents Fixed Deposit 92 ULIP 24 Share Market 16 Government Securities 16 Mutual Fund 16 Bonds 12 Gold 12 Land 8 Total 200
percentage 46% 12% 8% 8% 8% 6% 6% 4% 100%
~ 83 ~
Chart 7:
100 90 80 70 60 50 40 30 20 10 0
92 28
16
16
16
12
12
8
No. Of Respondents
Interpretation: It is clear from the above table and chart that majority of the customer¶s investment portfolio i.e. 46% consist of fixed deposit, 14% investor invest in ULIP, 8% in share market, 8% in government securities, 8% in mutual fund, 6% in bonds, 6% in gold and 4% investor¶s invest in land. Table 8: Customer perception about benefits of BRIGHT STARS PLUS BHARTI AXA LIFE will pay all your future premium into the investment funds Jumpstart benefit 6 market-linked investment funds Cover continuance Tax benefits Total No. of Respondents percentage
90
45%
20 50 30 10 200
10% 25% 15% 5% 100%
~ 84 ~
Chart 8:
100 90 80 70 60 50 40 90 30 20 10 0
50 20 30 10 No. of Respondents
Interpretation: It is clear from the above table and chart that majority of customer i.e. 45% purchase BRIGHT STARS PLUS for the benefits which BHARTI AXA LIFE will pay all your future premium into the investment funds, 25% customer¶s perception about benefit of 6 marketlinked investment funds, 15% for cover continuance, 10% for jumpstart benefit which company gives to its customer and 5% for tax benefits.
~ 85 ~
FINDING
Every study is completed only if it has some outcomes in the form of finding. The finding of my study is as follows.
1. Referring table 1 and chart 1, it is clear that majority of respondents i.e. 60% are degree and above or technical qualified. 2. Referring table 2 and chart 2, it is clear that 35% respondents an employees which gets the services of BHARTI AXA LIFE and only 15% are agriculturist. 3. It is clear from the questionnaire that majority of the customers who gets the services of BHARTI AXA LIFE are between age group 30 ± 50 years. 4. Referring table 3 and chart 3, it is clear that 40% respondents are fall in income group 150,000-250,000 and only 15% respondents have income above 250,000. 5. Referring table 4 and chart 4, it is clear that majority of customer¶s i.e. 50% purchase life insurance product for peace mind/ security and 25% customer purchase life insurance product for income protection. 6. Referring table 5 and chart 5, it is clear that most customer¶s i.e. 37% as a life insurance purchaser gives value to return/ fees and only 6% gives value to after sale services. 7. Referring table 6 and chart 6, it is clear that majority of customer¶s investment concern i.e. 37% for building cash reserve and only 12% concern with retirement. 8. Referring table 7 and chart 7, it is clear that mostcustomers¶ i.e.46% investment portfolio consist of fixed deposit and only 4% customers invested in land. 9. Referring table 8 and chart 8, it is clear that 45% customer give importance to BHARTI AXA LIFE will pay your entire future premium into your investment fund and only 5% gives importance to tax benefits.
~ 86 ~
Limitations of the study:
Inspite of every care taken on the part of the researcher there were certain limitations which could not be overcome and are as follows: Some of the persons were not so responsive. Possibility of error in data collection because many of investors may have not given the actual answer of my questionnaire. Sample size is limited to 200 people only. The sample may not adequately represent the whole market. Some respondents¶ were reluctant to divulge personal information which can hinder the validity of all responses. The research study was confined to Jammu and Kathua city only.
The above are some of the aspects which posed real problem in the way of completion of the research work but the majority of respondents were cooperative and my gratitude are due to them.
~ 87 ~
SUGGESTION AND RECOMMENDATION:
To increase the level of insurance penetration BHARTI AXA LIFE may focus on bringing products that suit to be rural customers. The company if possible should invest in advertising, conduct road shows and spend money on hoardings, so that it can better propagate awareness about its various lesser known products. BHARTI AXA LIFE should also tie up with several other banks to sell its products i.e through bancassurance. The company has the option of tying up with local NGO¶s for selling its rural insurance products. Customer friendly documentation i.e it should made easier and faster. BHARTI AXA LIFE should keep a check that its agents equally promote all its products. BHARTI AXA LIFE may provide additional funds to its development officers and agents. All the hidden charges should clearly be stated in the form and explained by the agents and BHARTI AXA LIFE should provide better training to its agents. Claim settlement process should be made fast and must not involve lengthy decision making process. Some special focus should be laid on individual risk coverage while designing the products.
~ 88 ~
Conclusion
After going through this research I found that the perception of the customer on insurance, bharti axa life insurance market position, the products (Bright Stars plus) benefits to the customer, to the advisor that¶s all. When the customers are understand the benefits of the product then they are agree to buy this product. Our exhaustive research in the field of Life Insurance threw up some interesting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. People in general have been impression by the marketing and advertising campaigns of insurance companies. A high penetration of print, radio and Television ad campaigns over the years is beginning to have its impact now. Another hearting trend was in terms of people viewing insurance as a tax saving and investment instrument as much as a protective one. A very high number of respondents have opted for insurance for such purposes and it shows how insurance companies have been successful to attract public money in recent times. The general satisfaction levels among public with regards to policy and agents still Requires improvement. But therein lays the opportunity for a relative new comer like Reliance. LIC has never been known for prompt service or customer oriented methods and Reliance can build on these factors.
~ 89 ~
BIBLIOGRAPHY
The following references and websites that I have followed to complete this project««.. IC 33 LIFE INSURANCE BHARTI AXA LIFE PRODUCTS BROCHURE www.bharti-axalife.com www.goggle.com www.irda.com www.wikepedia.com www.myiris.com
~ 90 ~
ANNEXURE
A SURVEY ON CUSTOMER PERCEPTION ABOUT LIFE INSURANCE PRODUCT
[For Answers Put Tick Mark in the boxes ( Name: Occupation: Address: Age: Email : Phone no.:
]
1.Which product of Bharti Axa Life customer will purchase more: (a).Wealth confident (b).Bright stars plus(c.)Dream life pension plan
(d.)Save confident(e).Aspire life(f.)Secure confident 2. Are you satisfied with the plans of bharti Axa Life insurance: a.)Below 30% b)30% -50% c)50%-70% 3. Reasons for purchase of life insurance product: (a) Peace mind/security (b) Income protection (c) Recommended by advisor
(d) Recommended by family/friends (f) Others:
(e) Tax saving purpose
~ 91 ~
4 If yes, what is your investment concern:(a) Life insurance product (c) Retirement (f) Others (specify): (b) Building cash reserves (e) Funding for children
(d) Asset purchase
10. Your current portfolio consists of:-(You can put more than one (a) Share markets (d)Mutual funds (b) Fixed deposit (e) Bonds (c) Government securities (f) ULIP (g) other (specify):
14.your perception about benefits bright stars plus? (a) Bharti Axa Life will pay all your future premium (b) Jump start benefits (d) cover continuance (e) 6 investment funds (c) Tax benefits
~ 92 ~
