Birla Sun Life Insurance

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A Project Report On
PERFORMANCE EVALUATION OF BIRLA SUN LIFE INSURANCE A STUDY OF JAGADHRI REGION
For the Training Undergone at Birla Sun Life Insurance Ltd.

Under Supervision Of: Mr. Deepak a!"o# $%genc& Manager'

For the (artial Fulfill!ent for the Degree of Bachelor Of Business %d!inistration $)*++,)*+-' Su"!itted B&: Manthan. BB% /th Se!.. Universit& 0eg. 1o. 2 ++,3i!",Su"!itted To: urukshetra Universit&. urukshetra

S. D. Institute Of Manage!ent 4 Technolog& 3agadhri,+5/**5 $%ffiliated to urukshetra Universit&. urukshetra'

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%1167U06 2 I

D68L%0%TIO1
I, Manthan, hereby declare that the work presented in “ (erfor!ance 6valuation of Birla Sun Life Insurance % Stud& of 3agadhri 0egion ” is genuine work originally done by me and has not been published or submitted elsewhere for the requirement of a degree programme. Any literature, data or works done by others and cited within this dissertation has been given due acknowledgement and is listed in the reference section. his pro!ect report is presented as the partial fulfillment for the degree of "achelor of "usiness Administration

M%1T9%1 , India Signature of the Student

%1167U06 2 II
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860TIFI8%TIO1

his is to certify that the #ro!ect $eport title :(erfor!ance 6valuation of Birla Sun Life Insurance; submitted in partial fulfillment for the award of ""A #rogramme of %epartment of "usiness Management &urukshetra 'niversity &urukshetra was carried out by Manthan under my guidance. his has not been submitted to any other 'niversity or Institution for the award of any degree(diploma(certificate.

Mr. %"hishek Tripathi

(06F%86
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o achieve partial and concrete results, it is necessary that theoretical knowledge must be supplemented with practical environment. &eeping this view in mind, I have completed my research work regarding “ (erfor!ance 6valuation of Birla Sun Life Insurance;. "y doing this research work I have learnt a lot of things which would be really helpful for me in future. his e)perience in decision making and practical application of knowledge has contributed greatly to my growth.

%ckno<ledge!ent
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I take this opportunity to e)press my acknowledgement and deep sense of gratitude for rendering valuable assistance and guidance to me by following personality for successful completion of my pro!ect. I am highly obliged to my pro!ect guide Mr. Abhishek Tripathi for his personal encouragement, prompt assistance and help provided to me in completion of my pro!ect. *e has helped me a lot by giving suggestions and guidance whenever needed. *is contribution has been e)tremely useful and is greatly appreciated. I honor his knowledge and competence in the field of management.

T%BL6 OF 8O1T61TS
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Ta"le of 8ontents 8O1T61TS +ist of ables +ist of ,igures +. I- $.%'/ I.). +I 0$A '$0 $01I02 5. I- $.%'/ I.- . /.M#A-3 -. %A A A-A+34I4 5 I- 0$#$0 A I./. ,I-%I-64 ., *0 4 '%3 >. 4'MM0$3 A-% /.-/+'4I."I"+I.6$A#*3 A--07'$0 (%=6 1UMB60S i ii 8 9 :: ;< => =? 9@ 98

LIST OF T%BL6S %1D FI=U06S
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LIST OF T%BL6S
A"+0 ;. 8 ;. : ;. A ;. ; Market 4hare of #rivate /ompanies ;. = ;. 9 ;. > == ypes of #lan 4atisfaction 2ith he #lan 4atisfaction 2ith he 4ervices of he /ompany #eople 2ant o More Investment In "4+I #eople *aving .ther Insurance #lan Apart ,rom "4+I 4hare of %ifferent /ompanies #A60 -'M"0$ ;< =@ =8 =: =A =;

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LIST OF FI=U06S
,I6'$0 ;. 8 ;. : ;. A ;. ; Market 4hare of #rivate /ompanies ;. = ;. 9 ;. > == ypes of #lan 4atisfaction 2ith he #lan 4atisfaction 2ith he 4ervices of he /ompany #eople 2ant o More Investment In "4+I #eople *aving .ther Insurance #lan Apart ,rom "4+I 4hare of %ifferent /ompanies #A60 -'M"0$ ;< =@ =8 =: =A =;

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CHAPTER-1

INTRODUCTION

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+.+ I1T0ODU8TIO1
Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. 2hile it becomes somewhat impossible for a man to bear by himself 8@@B loss to his own property or interest arising out of an unforeseen contingency, insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose."asic human trait is to be averse to the idea of risk taking. Insurance, whether life or nonClife, provides people with a reasonable degree of security and assurance that they will be protected in the event of a calamity or failure of any sort.Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. 'nder the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. he risks, which can be insured against include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. hus collective bearing of risk is insurance. I1SU0%186 I1D6M1IFI6S %SS6TS 4 I18OM6 0very Asset has a value and generates Income to its .wner. here is a normally e)pected +ifeCtime for the Asset during which time it is e)pected to perform. If the Asset gets lost earlier, being destroyed or made -onCfunctional through an Accident or other unfortunate event the .wner is #re!udiced. Insurance helps to reduce /.-40D'0-/04 of such Adverse /ircumstances which are called $isks. I1SU0%186 IS T96 S8I6186 OF S(06%DI1= OF T96 0IS It is the system of spreading the losses of an Individual over a group of Individuals I1SU0%186 IS % M6T9OD OF S9%0I1= OF FI1%18I%L LOSS6S .f a few from a common fund formed out of /ontribution of the many who are equally e)posed to the same loss. 2hat is uncertainty for an Individual becomes a certainty for a 6roup. his is the basis of all insurance operations. hus insurance convert uncertainties to certainty.
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).) 6?OLUTIO1 OF I1SU0%186
he concept of insurance is believed to have emerged almost ;=@@ years ago in the ancient land of "abylonia where traders used to bear risk of the carvan by giving loans, which were later repaid with interest when the goods arrived safely. he concept of insurance as we know today took shape in 89?? at a place called +loydEs /offee *ouse in +ondon where risk bearers used to meet to transact business. his coffee house became so popular that +loydEs became the one of the first modern insurance companies by the end of the eighteenth century. Marine insurance companies came into e)istence by the end of the eighteenth century. hese companies were empowered to write fire and life insurance as well as marine. he 6reat ,ire of +ondon in 8<99 caused huge loss of property and life. 2ith a view to providing fire insurance facilities, %r. -icholas "arbon set up in 8<9> the first fire insurance company known as the ,ire office. he early history of insurance in India can be traced back to the 1edas. he 4anskrit term F3ogakshemaE Gmeaning well beingH, the name of +ife Insurance /orporation of IndiaEs corporate headquarters, is found in the $ig 1eda. he Aryans practiced some form of Fcommunity insuranceE around 8@@@ "/. +ife insurance in its modern form came to India from 0ngland in 8?8?. he .riental +ife Insurance /ompany was the first insurance company to be set up in India to help the widows of 0uropean community. he insurance companies, which came into e)istence between 8?8? and 8?9<, treated Indian lives as subnormal and charged an e)tra premium of 8= to :@ per cent. he first Indian insurance company, the "ombay Mutual +ife Assurance 4ociety, came into e)istence in 8?>@ to cover Indian lives at normal rates. he Insurance Act, 8<A?, the first comprehensive legislation governing both life and nonC life branches of insurance were enacted to provide strict state control over insurance

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business.

his amended insurance Act looked into investments, e)penditure and

management of these companies. "y the midC 8<=@s there were 8=; Indian insurers, 89 foreign insurers, and >= provident societies carrying on life insurance business in India. Insurance business flourished and so did scams, irregularities and dubious investment practices by scores of companies. As a result the government decided to nationaliIe the life assurance business in India. he +ife Insurance /orporation of India G+I/H was set up in 8<=9. he nationaliIation of life insurance was followed by general insurance in 8<>:.

).5 @9%T IS I1SU0%186A
Insurance is a mechanism that ensures an individual to thrive on adverse consequences by compensating the individual, his(her loss financially. 0very individual in the world and all activities connected with him(her, be it life, profession, business, travel or any other pursuits are sub!ect to unforeseen and uncalled for haIards or dangers. he benefit that an individual en!oys in his life by owning a car or a house or a factory can be snatched by sudden accident which can render even the individual immobile, and his family vulnerable. At this critical !uncture, only insurance helps him not only to survive but recover his loss and continue his life in a normal manner, which would otherwise be unthinkable. he concept of insurance is quite simple. #eople, who are in similar trade and are e)posed to the same risks, congregate and some to an agreement that if any individual member suffer a loss, then the loss will be shared by others and minimiIed in order to enable the individual member recover from the loss and cover his ground. 4imilarly the different kinds of risks can be identified and separate groups can be formed to counter such risks and reduce to impact to manageable proportion, in which the share could be collected from the members either after the loss or in advance, at the time of admission to the group. his is an e)emplary sign of humanity and insurance therefore serve the mankind to a great e)tentJ a point most of the individual tend to overlook, since monetary aspect is involved. -ow such is for tangible assets.
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he concept of insurance has been e)tended beyond the coverage of tangible assets. 0)porters run the risk of importers in other country defaulting as well as losses due to sudden fluctuations in the currency e)change rates, economic policies turmoil. he risk are not insured. %octors run the risk of being charged with negligence and can subsequently liable for damage. he amount in question can be fairly large, beyond the capacity of the individual to bear. hese are insured. hus insurance is e)tended to intangible assets. In some countries even the voice of a singer , legs of the footballer can be insured, even though the advantage of spread may not be available in these cases. 4atisfaction of economics needs requires generation of income from some sources. If the property, which is the source of such income, were lost fully or partially, permanently, or temporarily, the income too would stop. he purpose of insurance is to safeguard against such misfortune few, through the help of the fortune many, who were e)posed to the same risk , but saved from the misfortune . losses substitute certainty by uncertainty. he different types of human activities that come under the umbrella of insurance are as followsK 8. *ouse(office(factory or any moveable ob!ect destroyed in life :. 4hipment or transportation of goods by ship, destroyed in catastrophe. A. Lewellery (cash( household goods stolen or robbed ;. 6oods in transit by roads or railways destroyed. =. heft or accident of vehicles C"urglar nsurance C/arrier insurance C1ehicle insurance C*ealth insurance CMarine insurance C ,ire insurance hus the essence of insurance is to share

9. ,inancial cover in ailment (surgery etc

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All these are nonClife insurance. In conclusion one can safely say that the purpose of insurance be it or nonClife is to transfer the financial loss to the insurance company who spreads in over to the policyholders.

).5.+ Life Insurance
+ife insurance G+ife Assurance in "ritish 0nglishH is a type of insurance. As in all insurance, the insured transfers a risk to the insurer. he insured pays a premium and receives a policy in e)change. he risk assumed by the insurer is the risk of death of the insured. ).5.+.+ 9o< life insurance <orks here are three parties in a life insurance transactionJ the insurer, the insured, and the owner of the policy GpolicyholderH, although the owner and the insured are often the same person. ,or e)ample, if Lohn 4mith buys a policy on his own life, he is both the owner and the insured. "ut if Mary 4mith, his wife, buys a policy on LohnMs life, she is the owner and he is the insured. he owner of the policy is called the grantee Ghe or she will be the person who will pay for the policyH. Another important person involved is the beneficiary. he beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured. he beneficiary is not a party to the policy, but is designated by the owner, who may change the beneficiary unless the policy has an irrevocable beneficiary designation. 2ith an irrevocable beneficiary, that beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of cash value. he policy, like all insurance policies, is a legal contract specifying the terms and conditions of the risk assumed. 4pecial provisions apply, including a suicide clause wherein the policy becomes null if the insured commits suicide within a specified time for the policy date Gusually two yearsH. Any misrepresentation by the owner or insured on the application is also grounds for nullification. Most contracts have a contestability period, also usually a twoCyear periodJ if the insured dies within this period, the insurer has a legal right to contest the claim and request additional information before deciding to pay or deny the claim.
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he face amount of the policy is normally the amount paid when the policy matures, although policies can provide for greater or lesser amounts. he policy matures when the insured dies or reaches a specified age. he most common reason to buy a life insurance policy is to protect the financial interests of the owner of the policy in the event of the insuredMs demise. he insurance proceeds would pay for funeral and other death costs or be invested to provide income replacing the deceasedMs wages. .ther reasons include estate planning and retirement. he owner Gif not the insuredH must have an insurable he interest in the insured, i.e. a legitimate reason for insuring another personEs life.

insurer Gthe life insurance companyH calculates the policy prices with intent to recover claims to be paid and administrative costs, and to make a profit. he cost of insurance is determined using mortality tables calculated by actuaries. Actuaries are professionals who use actuarial science which is based in mathematics Gprimarily probability and statisticsH. Mortality tables are statistically based tables showing average life e)pectancies. he three main variables in a mortality table are age, gender, and use of tobacco. he mortality tables provide a baseline for the cost of insurance. In practice, these mortality tables are used in con!unction with the health and family history of the individual applying for a policy in order to determine premiums and insurability. he current mortality table being used by life insurance companies in the 'nited 4tates and their regulators was calculated during the 8<?@s. here is currently a measure being pushed to update the mortality tables by :@@?. he current mortality table assumes that roughly : in 8,@@@ people aged := will die during the term of coverage. his number rises roughly quadratically to about := in 8,@@@ people for those aged 9=. 4o in a group of one thousand := year old males with a N8@@,@@@ policy, a life insurance company would have to, at the minimum, collect N:@@ a year from each of the thousand people to cover the e)pected claims. he insurance company receives the premiums from the policy owner and invests them to create a pool of money from which to pay claims, and finance the insurance companyMs operations. /ontrary to popular belief, the ma!ority of the money that insurance companies make comes directly from premiums paid, as money gained through investment of premiums will never, in even the most ideal market conditions, vest enough money per year to pay
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out claims. $ates charged for life insurance increase with the insuredMs age because, statistically, a people are more likely to die as they get older. 4ince adverse selection can have a negative impact on the financial results of the insurer, the insurer investigates each proposed insured Gunless the policy is below a companyCestablished minimum amountH beginning with the application, which becomes part of the policy. 6roup Insurance policies are an e)ception. his investigation and resulting evaluation of the risk is called underwriting. *ealth and lifestyle questions are asked, and the answers are dutifully recorded. /ertain responses by the insured will be given further investigation. +ife insurance companies in the 'nited 4tates support he Medical Information "ureau, which is a clearinghouse of medical information on all persons who have ever applied for life insurance. As part of the application, the insurer receives permission to obtain information from the proposed insuredMs physicians. +ife insurance companies are never required by law to underwrite or to provide coverage on anyone. hey alone determine insurability, and some people, for their own health or lifestyle reasons, are uninsurable. he policy can be declined Gturned downH or rated. $ating means increasing the premiums to provide for additional risks relative to that particular insured. Many companies use four general health categories for those evaluated for a life insurance policy. hese categories are #referred "est, #referred, 4tandard and obacco. #referred "est means that the proposed insured has no adverse medical history is not under medication for any condition, and his family Gimmediate and e)tendedH has no history of early cancer, diabetes or other conditions. #referred is like #referred "est, but it allows that the proposed insured is currently under medication for the condition and may have some family history. Most people are in the 4tandard category. #rofession, travel, and lifestyle also factor into not only which category the proposed insured falls, but also whether the proposed insured will be denied a policy. ,or e)ample, a person who would otherwise be in the #referred "est category will be denied a policy if he or she travels to a high risk country. 'pon the death of the insured, the insurer will require acceptable proof of death before paying the claim. he normal minimum proof is a death certificate and the insurerMs claim form completed, signed, and often notariIed. If the insuredMs death was suspicious and the
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policy amount warrants it, the insurer may investigate the circumstances surrounding the death, before deciding whether there is a legal obligation to pay the claim. #roceeds from the policy may be paid in a lump sum or as an annuity paid over time in regular recurring payments for either for the life of a specified person or a specified time period. ).5.+.) 8ontri"ution of Life Insurance in Develop!ent of 6cono!&  /ontribution of +ife Insurance 4ector in the 0conomy  ,low of Insurance Industry in India  4tructure of insurance industryK 4nap 4hot Industry  Aggregation of long term savings  4pread of financial services in rural Areas  +ong term funds for infrastructure development of capital Markets( 0conomic 6rowth

5.+ 8OM(%1B (0OFIL6
Birla Sun Life Insurance 8o!pan& Li!ited is a !oint venture between The %dit&a Birla =roup, one of the largest business houses in India and Sun Life Financial Inc., a leading international financial services organisation. he local knowledge of the Aditya "irla 6roup combined with the e)pertise of 4un +ife ,inancial Inc., offers a formidable protection for your future. he Aditya "irla 6roup has a turnover of close to $s. 8,8<,@@@ crores, with a market capitalisation of $s. 8,AA,?>= crores Gas on A8st March :@8@H. It has over +.**.*** e!plo&ees across all its units worldwide. It is led by its /hairman C Mr. &umar Mangalam "irla. 4ome of its key companies are *indalco, 6rasim and Aditya "irla -uvo.
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Sun Life Financial 4un life financial Obased in /anadaCstarted in 8?9=. It operates in all the important markets of the world like /anada, the 'nited 4tates, the 'nited &ingdom, *ong &ong, the #hilippines, Lapan, Indonesia, India, /hina and "ermuda. 4un +ife ,inancial Inc. has assets under management of over '4% ;@;.> billion Gas on A8st March, :@8@H. It is a leading performer in the life insurance market in /anada.

"irla 4un +ife Insurance G"4+IH has been operating for 88 years. It has contributed significantly to the growth and development of the life insurance industry in India. It pioneered the launch of 'nit +inked +ife Insurance plans amongst the private players in India. It was the first player in the industry to sell its policies through the "ancassurance route and through the Internet. It was the first private sector player to introduce a #ure erm plan in the Indian market. "4+I has covered more than : million lives since it commenced operations. And its customer base is is spread across more than 8,=@@ towns and cities in India. March :@8@. 2ith an e)perience of over 88 years, "4+I has contributed significantly to the growth and development of the life insurance industry in India and currently ranks amongst the top = private life insurance companies in the country.
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he company has a capital base of $s. 8,:>;.= crores as on A8st

&nown for its innovation and creating industry benchmarks, "4+I has several firsts to its credit. It was the first Indian Insurance /ompany to introduce “,ree +ook #eriod” and the same was made mandatory by I$%A for all other life insurance companies. Additionally, "4+I pioneered the launch of 'nit +inked +ife Insurance plans amongst the private players in India. o establish credibility and further transparency, "4+I also en!oys the prestige to be the originator of practice to disclose portfolio on monthly basis. hese category development initiatives have helped "4+I be closer to its policy holdersE e)pectations, which gets further accentuated by the complete bouquet of insurance products GviI. pure term plan, life stage products, health plan and retirement planH that the company offers. Add to this, the e)tensive reach through its network of 9@@ branches and 8,>=, @@@ empanelled advisors. his impressive combination of domain e)pertise, product range, reach and ears on ground, helped "4+I cover more than : million lives since it commenced operations and establish a customer base spread across more than 8=@@ towns and cities in India. o ensure that our customers have an impeccable e)perience, "4+I has ensured that it has lowest outstanding claims ratio of @.@@B for ,3 :@@?C@<. Additionally, "4+I has the best urn around ime according to +.MA on all claims #arameters. 4uch services are well supported by sound financials that the /ompany has. he A'M of "4+I stood at $s. ?,89= crs as on ,ebruary :?, :@@<, while as on March A8, :@@<, the company has a robust capital base of $s. :@@@ crs. 5.+.+ %chieve!ents of BSLI
 8st to introduce ULI( fund options.

 8st to launch illustrations so that customers understand the products better before they buy.  8st to issue -A1s of funds for better transparency.  8st to disclose portfolio on a monthly basis.

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 8st to introduce “,ree +ook #eriod” and the same was made mandatory by I$%A for all other +ife Insurance /ompanies.

5.)

6B (6O(L6 OF O0=%1IS%TIO1

5.).+ Board of Directors
• • • • • • • • • • Mr. &umar M "irla Mr. %onald A 4tewart, Mr. "ishwanath - #uranmalka Mr. A!ay 4rinivasan Mr. 6ary M /omerford Mr. 4uresh - alwar Mr. 6ian # 6upta *is *ighness Mahara!a 6 4ingh Mr. 4tephan $a!otte %r. "harat & 4ingh

5.).) Invest!ent 8o!!ittee
• • • • Mr. ". -. #uranmalka Mr. 0ugene +undrigan Mr. A!ay 4rinivasan Mr. 1ikram Mehmi
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• • •

Mr. Mayank "athwal Mr. ,abien Leudy Mr. 1ikram &otak

5.).5 Manage!ent Tea!
• Mr. ?ikra! Meh!i C#resident 5 /hief C0)ecutive .fficer • • • • Mr. Ma&ank Bath<al Mr. Mario BraganCa Mr. 6.1. =oveia Mr. %!it (unchhi C/hief ,inancial .fficer C/hief .perating .fficer C*ead C %irect 4ales ,orce C4enior 1ice #resident C hird #arty C %istribution C*ead C 6roup +ife 5 #ensions C4enior 1ice #resident C .perations C4enior 1ice #resident C Marketing 5 /ommunications C4enior 1ice #resident C %4, 0)pansion • • • • • Mr. 0a#esh Bho#ani Mr. .9. ?enkatachala! C1ice #resident O *uman $esource C1ice #resident, /hief 5 Appointed Actuary C1ice #resident C /ompliance C1ice #resident O $isk Management and Internal Audit
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• • •

Mr. Bhavesh Sanghvi Mr. Snehal Shah Ms. %n#ana =re<al

Mr. Fa"ien 3eud& Mr. Lalit ?er!ani Mr. Melv&n DDsouCa

C1ice #resident C Investments • • Mr. ?ikra! otak C1ice #resident O 4trategy

Mr. Bhalachandra 1a&ak

5.).- 8o!petitors
• +ife insurance corporation • I-6 vysya life insurance • Ma) network life insurance • Met+ife insurance • Aviva life insurance • "harathi A)a life insurance • "a!a! AllianI life insurance • ata AI6 life insurance

• I/I/I #rudential +ife Insurance • $eliance life insurance • &otak Mahindra life insurance 5.).-.+ 8o!petitors in Detail  %viva life insurance: Aviva +ife Insurance /ompany India #vt. +td. is a !oint venture between Aviva of '& and %abur, one of IndiaMs leading producers of traditional healthcare products. Aviva holds a :9 per cent stake in the !oint venture and the %abur group holds the balance >; per cent share.
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 Ba#a# %llianC: "a!a! AllianI is a !oint venture between AllianI A6 one of the worldMs largest insurance companies, and "a!a! Auto, one of the biggest : and A wheeler manufacturers in the world. "a!a! AllianI is into both life insurance and general insurance. AllianI 6roup is one of the worldMs leading insurers and financial services providers. ,ounded in 8?<@ in "erlin, AllianI is now present in over >@ countries  9DF8 Standard Life Insurance 8o. Ltd: is a !oint venture between *%,/ +td., IndiaMs largest housing finance institution and 4tandard +ife Assurance /ompany, 0uropeMs largest mutual life company. It was the first life insurance company to be granted a certificate of registration by the I$%A on the :Ard of .ctober :@@@.  I1= ?&s&a Life Insurance 8o!pan& Li!ited: is a !oint venture between 1ysya "ank and I-6 6roup of *olland, the worldMs ;th largest financial services group, with presence across =@ countries, and a heritage of over 8=@ years.  otak Mahindra Old Mutual Life Insurance Ltd: is a !oint venture between &otak Mahindra "ank +td. G&M"+H, and .ld Mutual plc. &otak Mahindra is one of IndiaMs leading financial institutions and offers a range of financial services such as commercial banking.  Life Insurance 8orporation of India: G+I/H is an autonomous body authoriIed to run the life insurance business in India with its *ead .ffice at Mumbai. It has been established by an act of the #arliament and started functioning from 8(<(8<=9.  I8I8I (rudential Life Insurance : I/I/I #rudential life insurance is a part of I/I/I "ank.  MaE 1e< Bork Life Insurance 8o!pan& Li!ited is a !oint venture between Ma) India +imited, a multiCbusiness corporate, and -ew 3ork +ife International, a global e)pert in life insurance. -ew 3ork +ife is a ,ortune 8@@ company that has over 89@ years of e)perience in the life insurance business.

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 MetLife India Insurance 8o. (vt Ltd is a !oint venture between Met+ife 6roup and its Indian partners. he Indian partners include L5& "ank, %hanalakshmi "ank, &arnataka "ank, &arvy /onsultants, 6eo!it 4ecurities, 2ay:2ealth, and Mini Muthoothu.  0eliance Life Insurance 8o!pan& +imited is a part of $eliance /apital +td. of the $eliance C Anil %hirubhai Ambani 6roup. he company acquired 8@@ per cent aking over shareholding in AM# 4anmar +ife Insurance /ompany in August :@@=. portfolio.  SBI Life Insurance is a !oint venture between the 4tate "ank of India and /ardiff 4A of ,rance. 4"I +ife Insurance is registered with an authoriIed capital of $s =@@ crore and a paid up capital of $s A=@ cores.  Tata %I= Life Insurance 8o!pan& +imited is a !oint venture between ata 6roup and American International 6roup, Inc. GAI6H. ata 6roup is one of the oldest and leading business groups of India. ata 6roup has had a long association with IndiaMs insurance sector having been the largest insurance company in India prior to the nationaliIation of insurance. he +ate 4ir %orab ata was the founder /hairman of -ew India Assurance /o. +td., a group company incorporated way back in 8<8<.  Shrira! Life Insurance 8o!pan& +td is a !oint venture between the /hennaiCbased 4hriram 6roup and the 4outh African insurance ma!or 4anlam. he company launched its operation in India in %ecember :@@=.

AM# 4anmar +ife provided $eliance +ife Insurance a readymade infrastructure and a

5.5 S@OT %1%LBSIS 5.5.+ Strength:
 MultiCchannel distribution and one of the largest distribution networks in India.  Implementing SiE,Sig!a process.  8usto!er centric products and services.
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 4uperior investment and risk management framework  + Million (olicies sold within A and half years.  /ompany has !aEi!u! nu!"er of MD0T as well as good number of 91I advisors.  raining process of the company is very strong.

 %ifferent plan for different peoples.  According to the change in surrounding environment like changes in customer requirement.

5.5.) @eakness:
 /.M#A-3 does not penetrate on the rural market at a time.  here is no plan for the low income group.

 ,ees for the advisor is high than the other company.

5.5.5 Opportunit&:
 Insurance market is very big, where company can e)pand its horiIon in insurance industry.   hrough good investment and insurance it is easy to top Indian customers. he huge insurance market G>>BH is left so company has opportunity to e)pand our products.  o associate with the more number of *-I.

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5.5.- Threats:
 .+% *A"I 4 %I0 *A$%K ItEs still difficult task to win the confidence of public towards private company.  he company is facing ma!or threats from LI8 Cwhich is an only government company.  #lans for all income groups are not available which can create adverse effect later on the market share of the company.

5.- D6T%ILS OF (0ODU8TS
+ife is unpredictable. "ut in face of adversity, our responsibilities towards our parents, children and loved ones need not be compromised. Insurance planning equips you to smooth out the uncertainties and adversities that life might send your way, so that the best that life has to offer, secure in the knowledge that your beloved ones are well provided for. "4+I offers a complete range of insurance products. +. (rotection (lans ). Savings (lans 5. 8hild (lans -. Invest!ent (lans /. 0etire!ent (lans >. =roup (lans F. 0ural (lans

5.-.+ Insurance (lans

26

"4+I offers Lifeguard C a set of pure protection plans. /hoose from amongst three different product structures to insure your life and provide total security to your family, at a very affordable cost. 5.-.+.+ Level Ter! %ssurance <ith return of pre!iu!  .n death the entire sum assured will be paid.  .n maturity, all the premiums paid will be returned. 5.-.+.) Level Ter! %ssurance <ithout return of pre!iu!  .n death the entire sum assured will be paid.  -o survival or maturity benefits. 3ou can also enhance the above two policies by adding Accident 5 %isability "enefit $ider and 2aiver of #remium $ider G2.#H 5.-.+.5 Level Ter! %ssurance , Single pre!iu!:  .n death the entire sum assured will be paid.  -o survival or maturity benefits.

5.-.) (rotection (lans
"4+I offers a variety of policies that give you the benefits of protection and the opportunity to save for important assets or events, like a home, a car or a wedding. A regular premium unitClinked insurance plan with an assurance of /apital 6uaranteeP with the added advantage of fle)ible liquidity option. An ideal plan for long term planning with the benefit of liquidity.

27

The ke& features of the plan are:  ,le)ibility to choose a specific level of protection G4um AssuredH, based on a multiple of the annual premium. 3ou can also choose the term of the plan.  At the end of the term, the higher of the value of units or the guaranteed value is paid. .n death, 4um Assured along with the higher of value of units or the guaranteed value is payable.  ,acility to make withdrawals from the 9th policy year onwards till the end of the policy term. 0very year withdraw up to 8@B of the value of units.  Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.  Additional insurance for 8@ years after the maturity, for an amount of =@B of the 4um Assured

5.-.5 Savings (lans
 ,le)ibility to make additional investment with the help of the topCup facility.  ,le)ibility to increase ( decrease your annual premium Amount  ,acility of Automatic #remium #aymentC 2ith this facility you can take a temporary break from premium payment.   otal transparency with the premium allocations, and other charges declared upfront. he guaranteed value of the unit fund is the value of all invested premiums Gpremiums net of all chargesH along with the declared bonus interests. 2ith Automatic #remium #ayment facility, you can avail a temporary break from premium payment for a ma)imum of 8 year. his facility is available once if the premium paying term is less than 8= years and twice, if it is 8= years or more. 3ou can also enhance your policy by adding Accident 5 %isability "enefit $ider , 2aiver of #remium
28

$ider and /ritical Illness $ider. A regular premium unitClinked insurance plan with an assurance of /apital 6uaranteeP An ideal plan for your longCterm savings and protection requirement. The ke& features of the plan areK  ,le)ibility to choose a specific level of protection GSu! %ssuredH, based on a multiple of the annual premium. 3ou can also choose the term of the plan.  At the end of the term, the higher of the value of units or the guaranteed value is paid. .n death, 4um Assured along with the higher of value of units or the guaranteed value is payable  Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.  Additional insurance for 8@ years after the maturity, for an amount of =@B of the 4um Assured.  ,le)ibility to make additional investment with the help of the top,up facility.  ,le)ibility to increase G decrease your annual premium amount  ,acility of Automatic #remium #aymentC 2ith this facility you can take a te!porar& "reak from premium payment.  otal transparency with the premium allocations, and other charges declared upfront. he guaranteed value of the unit fund is the value of all invested premiums Gpremiums net of all chargesH along with the declared bonus interests. 2ith Automatic #remium #ayment facility, you can avail a temporary break from premium payment for a ma)imum of 8 year. his facility is available once if the premium paying term is less than 8= years and twice, if it is 8= years or more.

29

he capital guarantee is applicable only on the invested premium and the declared bonus interests. 3ou can also enhance your policy by adding Accident 5 %isability "enefit $ider, 2aiver of #remium $ider and /ritical Illness $ider. A unitClinked insurance plan with an assurance of /apital 6uarantee which offers you the benefit of a limited premium payment term. An ideal plan for protection with wealth creation that offers the fle)ibility of a limited premium paying term.  ,le)ibility to choose a premium payment term of =, > or 8@ years for a maturity term of 8@, 8= or :@ years respectively.  ,le)ibility to choose a specific level of protection G4um AssuredH, based on a multiple of the annual premium.  At the end of the term GmaturityH, the higher of the value of units or the guaranteed value is paid. .n death, 4um Assured along with the higher of value of units or the guaranteed value is payable.  Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.  ,acility to make withdrawals from the 9th policy year onwards till the end of the policy term. 0very year withdraw up to 8@B of the value of units  ,le)ibility to make additional investment with the help of the topCup facility.  ,le)ibility to increase ( decrease your annual premium amount


otal transparency with the premium allocations, and other charges declared upfront. he guaranteed value of the unit fund is the value of all invested premiums Gpremiums net of all chargesH along with the declared bonus interests.





he capital guarantee is applicable only on the invested premium and the declared bonus interests. 3ou can also enhance your policy by adding Accident 5 %isability "enefit $ider and /ritical Illness $ider.
30

 #resenting #remier +ife O he #referred plan for the #referred /ustomer. features of the plan areK

he key

 +imited premium payment optionK /hoose from among a A, =, > or 8@ year premium paying term.  /hoice of sum assuredK /hoose a sum assured, which is a minimum multiple of 8 and a ma)imum multiple of := times the annual contribution.  Additional allocation of units on a periodic basis.  ,acility to topCup your investment any time you have surplus funds.  /hoose from among four funds, based on your investment ob!ective and risk appetite. FleEi"ilit& to decrease &our su! assured.  AddCon riders to protect you against any eventuality.  +oans against the policy. 3ou can also enhance your policy by adding 8ritical Illness 0ider. %ccident 4 Disa"ilit& Benefit 0ider. #resenting +ife ime O unit Olinked plans that meet your changing needs over a lifetime. hese solutions have been developed to meet your savings, protection and investment needs at every stage in life. (rotection  /hoose a specified level of protection Gavailable only with +ifetimeH.  wo levels of 4um Assured to choose from Gavailable only with +ifetime IIH.

 ,le)ibility to increase or decrease your sum assured.  AddCon riders to protect you against any eventuality.
31

Savings  ,le)ibility to increase or decrease your contribution.  ,acility of #remium *oliday, wherein the policy continues even if there is a temporary break in the payment of annual contribution Gavailable only with +ife imeH.  ,acility of Automatic /over /ontinuance, wherein the policy continues even if there is a temporary break in the payment of annual contribution  ,acility to topCup your investment any time you have surplus funds.  Additional allocation of units on a periodic basis.  +oans against the policy. Invest!ent  /hoose from among four funds, based on your investment ob!ective and risk appetite.  /hoice to switch between investments options G; free switches every policy yearH. 3ou can also enhance your policy by adding /ritical Illness $ider, Ma!or 4urgical Assistance $ider, Accident 5 %isability "enefit $ider, Accident "enefit $ider Gavailable only with +ife imeH and 2aiver of #remium $ider. An insurance plan that gives added protection, savings and multiple options, all in oneQ   he fle)ibility to choose your premium contribution. he fle)ibility to choose amongst three levels of cover Gin the form of sum assuredH for the same amount of total annual contribution.   he fle)ibility of shifting between the three levels of cover, as you require. he fle)ibility of receiving your maturity proceeds as a lump sum or in equal annual installments over A or = years.
32

3ou can also enhance your policy by adding 1ariety of $iders An insurance plan that gives you added protection, savings, multiple options, plus the power of liquidity.   he fle)ibility to choose your premium contribution. he fle)ibility to choose amongst three levels of cover Gin the form of sum assuredH for the same amount of total annual contribution.   he fle)ibility of shifting between the three levels of cover, as you require. he fle)ibility of receiving your maturity proceeds as a lump sum or in equal annual installments over A or = years.  he fle)ibility of withdrawing up to 8@B of the accumulated value of your policy, after the first = policy years. 3ou can also enhance your policy by adding 1ariety of $iders An ideal plan for those who want to accumulate funds on a regular basis while en!oying insurance protection.  =uaranteed Benefits: 6uaranteed additions R A.=B of the 4um Assured, compounded annually for the first ; years of the policy.  6Etended Life 8over: An e)tended cover for = years after the maturity of the policy, for =@B of the sum assured, at no e)tra cost.  Maturit& Benefit: At the end of the term, the policyholder receives the full sum assured, the guaranteed additions and the vested bonuses.  Death Benefit: he beneficiary receives the sum assured, the guaranteed additions and the vested bonuses in case the life assured were to meet with an unfortunate event. In case the life assured is aged > years or less, the basic premium paid will be returned. 3ou can also enhance your policy by adding /ritical Illness $ider, Ma!or 4urgical Assistance $ider, Accident 5 %isability "enefit $ider, 2aiver of #remium $ider G2.#H As a responsible parent, you will always strive to ensure a hassleCfree, successful life for your child. *owever, life is full of 'ncertainties and even the bestClaid plans can go
33

wrong. *ereEs how you can give your child a 8@@B safe and assured tomorrow, whatever the uncertainties. 4mart &id is especially designed to provide fle)ibility and safeguard your childEs future education and lifestyle, taking all possibilities into account. /hoose from amongst a basket of ; plansK  S!art  S!art  S!art  S!art id regular pre!iu! id unit,linked regular pre!iu! id unit,linked regular pre!iu! II id unit,linked single pre!iu! II

5.-.- 8hild (lans
%ll these plans offer &ou:  Financial Benefits: $egular payments at critical stages in your childEs life, like "oard e)aminations, 6raduation and #ostCgraduation.  Total peace of !ind. even if &ou are not around  Su! %ssured is paid i!!ediatel&: 0nsures that your loved ones stay financially secure, even in your absence.  %ll future pre!iu!s are <aived: 0nsuring that your family is not financially burdened in your absence.  (olic& "enefits continue: he educational benefits of the policy continue, ensuring that your child can realiIe his or her dreams without any hassles.  Develop!ent %llo<ance: 4mart &id guarantees regular income to secure your childEs educational career and also ensures his or her allCround development, for a nominal additional amount. he Inco!e Benefit 0ider takes care of this through an annual payment of 8@B of the sum assured, to your child, till the maturity of the policy, in the unfortunate event of the death of the parent. All 4mart &id plans can be enhanced with
34

the %ccident 4 Disa"ilit& Benefit 0ider and Inco!e Benefit 0ider . 3ou can also an Accident "enefit $ider to a 4mart &id $egular #remium policy, and a @aiver of (re!iu! 0ider $@O(' to 4mart &id unitClinked regular premium policy. +ife +ink II is a unique plan that combines the security of a life insurance policy with the opportunity of en!oying high returns on your investments, without the market risks compromising on the protection of your familyQ Death Benefit: he 4um Assured under the product has : options, either =@@B of the initial premium or 8@=B of the initial premium. In the event of an unfortunate death, the beneficiary will receive higher of the value of units or the initial death benefit, less any withdrawals. @ithdra<al Benefit: .ne can make partial withdrawals from the accumulated value of the policy after completion of one policy year. FleEi"ilit&: /hoose from four fund options, based on your investment ob!ective and risk appetite. If at a later stage your financial priorities change, you can switch between the various fund options, absolutely free, ; times a year.

5.-./ Invest!ent (lans
+ife 0)pectancy has been rising rapidly and today you can e)pect to live longer than your earlier generations. ,or you, this increase will mean a longer retirement life, stretching into a couple of decades. "4+I $etirement 4olutions that combine the best of insurance and investment. hese solutions are developed to ensure your peace of mind for the years to come. 8. 2hy plan for retirementS :. *ow much should I set aside for retirementS A. he impact of inflation on your retirement savings ;. 2hy plan earlyS
35

=. About Annuities

5.-.> 0etire!ent (lans
@h& plan for retire!entA ,or too many people, the !oy of retirement after years of hard work is eclipsed by the financial uncertainties that it brings. %espite all the planning and saving, you can never sure whether your money will last a lifetime. $etirement planning offers a way to ensure a more en!oyable, stress free tomorrow. A prudent plan will ensure that increasing life e)pectancy, higher inflation and increasing ta)es do not eat away into your hard earned savings. 9o< !uch !ust I set aside for retire!entA o ensure a comfortable retired life, you would be wise to invest money into additional avenues like pension plans. *ow much you need to invest can be answered by answering some questions such asK 8. *ow long do you have to save that amount before retirementS :. 2here can you invest your retirement moneyS A. *ow much risk are you willing to take on your investmentsS In an era of competitive parity, the only asset that makes a decisive difference between corporate success and failure is the quality of human capital. 0mployee benefits have proven to be an e)cellent tool to optimiIe the retention of talent and improve an organiIationEs bottomCline. he quality of an organiIationEs employee benefits establishes and maintains a companyMs image as a caring employer. .ptimum care of employees is a longCterm investment that results in a sustained competitive advantage for an organiIation in the times to come.

5.-.F =roup Solutions
36

BSLI =roup Solutions %dvantage:  An integrated basket of employee benefits solutions that offer incomparable fle)ible benefits.  4ound investment management that focuses on safety, stability and profitability of the portfolio.  #ersonaliIed financial planning for your employee that takes care of his(her changing financial needs at every stage of life.  Duality service initiatives and transparency across all operations, promising superlative operational efficiency. =roup Ter! %ssurance: *elps provide affordable cover to members of a group. =roup =ratuit& (lan: *elps employers fund their statutory gratuity obligation in a fle)ible and hassleCfree manner. =roup Superannuation (lan: A fle)ible scheme Gdefined benefit and defined contributionH to provide a retirement kitty for each member of the group. 5.-.F.+ =roup Ter! %ssurance: "4+I fle)ible group term solution helps provide affordable cover to members of a group. he cover could be uniform or based on designation(rank or a multiple of salary, and can be e)tended to all employees between the ages of 8? and 9= years. he benefit under the policy is paid on the event of the memberEs death to the beneficiary nominated by the member. It is a oneCyear renewable policy where one master policy covers all proposed employees comprising the group, with a minimum group siIe of := persons. -ew members can !oin the group and outgoing members can leave the group at any point during the policy term. 9ighlights include:

37

 =reater convenience for the employees with rela)ed underwriting and medical requirements.  :Free 8over Li!its: with simplified underwriting depending upon the number of employees in the group and the level of cover chosen.  =uaranteed "enefit: .n death during the term of the contract Gwhile in 4erviceH, the sum assured will be paid to the beneficiary of the employee.  /hoice of additional coverage in form an Accident and %isability "enefit $ider and /ritical Illness /over  #remium is viewed as a business e)pense in the year of payment. 5.-.F.) =roup =ratuit& (lan: BSLI group gratuity plan helps employers fund their gratuity obligation in a scientific manner. 0mployers can avail of the ta) benefits as applicable to approved gratuity funds. he plan can also be customiIed to structure schemes that can provide benefits beyond the statutory obligations. *ighlights includeK  @ider choice of invest!ents <ith Market Linked (lans C to meet the diverse financial goals. 2e offer ; investment options GshortCterm debt, debt and balanced and capital guarantee planH where investments will be made in accordance with the fund ob!ectives.  Transparenc& through %aily disclosure of 'nit 1alue and regular disclosure of the portfolio of each of the investment option  FleEi"ilit& through switching and contribution redirection option to enable reshuffling of portfolio  Bundled Life 8over greater value to the employee by packaging life insurance covers with the gratuity, with minimal amount of underwriting.  %ctuarial services to provide a scientific estimation of the gratuity liability.
38

 Lo< eEplicit charge structure with the conditions for e)it specified upfront.  6nhanced service levels through faster claim settlement, easier access to information and regular statements.  /omplete end to end solution in the legal and regulatory approval process for scheme set up or transfer. 6!plo&ee Benefits:  he contribution made by the employer is not included in the value of ta)able perquisites in the hands of the employee.  6ratuity received up to $s A=@@@@ is e)empt from Income ta) under 4ec 8@G8@H  Annual contribution up to ?.AAB of salary bill in a financial year is allowed a deduction for the purpose of computation of profits and gains of business.  /ontribution towards past service liability is allowed as deduction as per the Income a) rules.

5.-.F.5 =roup Superannuation (lan: BSLI Superannuation 4cheme Gfor both %efined "enefit and %efined /ontribution fundsH offers substantial benefits to both employers and employees. he employer and employee can avail of ta) benefits applicable to an approved superannuation trust. he scheme will provide for a retirement fund for each participating employee. An employee would be able to choose from various annuity options or opt for partial commutation of corpus at retirement. 9ighlights include:  @ider choice of invest!ents <ith Market Linked (lans O to meet the diverse financial goals. 2e offer = investment options $short,ter! de"t. de"t. "alanced.
39

gro<th and capital guarantee plan' where investments will be made in accordance with the fund ob!ectives.  8ontrol C 0ach member(employer can e)ercise greater control over investments by choosing one or more of the investment options.  Multiple %nnuit& Options C = annuity options and open market option  Transparenc& C ransparency through %aily disclosure of 'nit 1alue and regular

disclosure of the portfolio of each of the investment option  FleEi"ilit& C ,le)ibility through switching and contribution redirection option to enable reshuffling of portfolio  Lo< eEplicit charge structure with conditions for e)it specified upfront.  6nhanced service levels through faster claim settlement, easier access to information and regular statements.  8o!plete end to end solution in the legal and regulatory approval process for scheme set up or transfer BSLI $ural #roducts are designed to meet the needs of the rural consumers. hese products offer the following featuresK 8. +ow and Affordable #remiums :. +ife /over A. 4avings .ption ;. *assle free procedure

5.-.H 0ural (lans
BSLI offers ) speciall& designed rural plans. aH BSLI O 0ndowment #lan bH BSLI C $egular #remium
40

BSLI 6ndo<!ent (lan: BSLI offers the following featuresK  +ife /over and 4avings  $egular #remiums  Age at entry 8? C ;= 3rs  #remium Mode *alf 3early ( 3early  erm =,8@,8= 3rs

 4um Assured $s.=,@@@ C:@,@@@  #remium ( 3ear $s. =@> C ==A G 4AK $s.8@,@@@H  Maturity(%eath benefit 4um Assured BSLI , 0egular (re!iu!: BSLI is a regular premium policy with the following featuresK  Individual policy  .nly +ife cover  erm C A 5 = 3rs

 Age independent premium  Age at entry 8? C ;= 3rs  4um Assured 4ingle  #remium ( 3ear $s =@ O :@@  Maturity(%eath benefit $s.=,@@@ C :@,@@@
41

 %eath "enefit 4um Assured

5./ I0D%
he insurance sector has been opened up in India, as there was an urgent need. he

international e)perience indicates those country with a liberaliIed insurance sector have witnessed a rapid growth in premium volumes enhancing the domestic saving rate. his happened in 8hina. Mala&sia and Singapore where a competitive market has led to improvement in 4ervices and quicker settlement of claims. It is also important to note that competition will bring about advancement in information, communication and technology. And rightly therefore a decision was taken by the 6overnment of India to open up Insurance sector. he establishment of I0D% in the !onth of %pril )*** has been important development in this direction, making the end of monopoly in the insurance sector.

5.> @9B I1SU0%186 I1 I1DI%
 .nly ::B of the insurance population has been e)tended cover. Market penetration is low and the potential to e)ploit is high.  Insurance premium per capita is very low.  +ack of comprehensive social system benefit and welfare means that demand for pension products is high.  *uge middle class of appro)imately A@@ Million.  0)isting insurance company score low on customer service front. he insurance market registered growth in the Asian region even though IndiaEs share in global insurance is less than @.=B G8<??H as compared to '4A G:;.:BH and Lapan G:8BH. 4tudies have revealed that in an emerging market, as disposable income rises, Insurance premiums as a ratio of 6%# shoots up. he confederation of Indian Industry pro!ected a growth of +ife Insurance premiums from $s.A=@ "illion at present to $s.8;@ "illion. he
42

6rowth of nonClife insurance premium is e)pected to increase from >= billion to A>= billion. .ut of which, only 8@B is tapped by the e)isting insurer. Insurance even more than banking is a volume game. A very e)clusive approach in view is unlikely to provide meaningful numbers. /urrently, insurance is bought for the purpose of ta)Cbenefits. A higher percentage of business is in the rural market. he share of rural new "usiness insurance total new business is ==B in terms of policies and ;>B in terms of sum assured. *owever, this needs to be viewed in the light of some recent issues that have been raised regarding as to what constitutes the rural market. that are presently une)ploited. *ow many Indians are aware that +I/ has more than 9@ #roducts and 6I/ has more than 8?@ #roductsS -ot only there is a reduction in the premiums of +ife Insurance products have long overdue since Indian morality rate has decreased three folds in the last =@ years. here is also scope to increase the yield on life insurance policies Gpresently 9BH with proper risk management in place. It is been debated that insurance business does not produce profit in the first five years cross subsidiIation is a feature of Indian market. 0ven the first portfolio vote that is considered profitable, cross subsidiIes other departments. ariffs reduction is likely to reduce profitsJ further insurers have to institute proper claims management progress in order to e)tract efficiencies. At present life insurance business in the country is ta)ed at 8:.=B of the profit in financial year. he government is soon to present a new model of ta)ing life insurance companies at international rates. -ew entrants should be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that alliance related to distribution rather than to produce or technology will prove most valuable in the long run. "anks and financial companies will emerge, as attractive distribution channel for this insurance trend will be led by two factors, which already apply in other world market. ,irst "anking food insurance, fund management and other financial services companies are being to increase their profitability and provide ma)imum value to their customers.
43

herefore, private

insurers will be best served by middle market approach, targeting the customer segments

herefore, they are themselves looking for a range of products to distribute. In other market notably 0uropeJ this has resulted in bank assurance. "ank entering into the insurance business in India to bank hope to ma)imiIe e)pensive e)isting network by selling a range of products more of a loss alliance between insurance and bank than a formal ownership. 4ome Indian entrants like I/I/I, *%,/ and $eliance hope to ride their e)isting network and customer bases.

Literature 0evie< KC Asurvey of literature refers to “ (erfor!ance 6valuation of
Birla Sun Life Insurance % stud& of 3agadhri 0egion ” 4pecifically have been mase to identify the current status of research on topic. G/hapterC:H he obstract all the statics has been given.

44

Chapter-2 LITERATURE REVIE

LIT60%TU06 06?I6@
0a!ku!ar $)**5' studied the role of relationship marketing in life insurance sector. In todayEs impersonal marketplace, customer satisfaction, retention and loyalty are rapidly become the thing of the past. $elationship marketing brings them back to the forefront, providing easy to apply solutions and strategies for establishing meaningful bonds with customers and turning them into reliable, lifeClong partners. $elationship marketing can be defined as the process to “identify and establish, maintain and enhance and, when necessary, terminate relationships with customers and other stakeholders at a profit so that the ob!ective of all parties involved are metJ and this is done by mutual e)change and fulfillment of promises”. he important ob!ectives of relationship marketing are to
45

acquire new customers, maintain and enhance e)isting relationships with e)isting customers, reactivation of e)Ccustomers, and handling of customer terminations. he key ob!ective of relationship marketing is to establish a one to one relationship with all the customers. his may sound like a daydream few years agoJ but thanks to the technology breakthrough and technological solutions providers it is very much of reality. 0a#esha! $)**-' revised that insurance sector has not only been playing a leading role within the financial system in India but also has significant socioCeconomical function, making inroads into the interiors of the economy and is being considered as one of the fast developing area in the Indian financial sector too. It has also been facilitating economic development with an ob!ective to build an efficient, effective and a stable insurance business in India as well as a strong base to both the needs of the real economy and socioCeconomic ob!ective of the country. It has been mobiliIing long term saving through lifeC insurance to support economic growth and also facilitating economic development, insurance cover to a large segment of people, while the nonClife insurance and reinsurance firms in India are main providers of risk financing for manmade disasters and natural catastrophes. hus, both life insurance and nonClife insurance are found playing a significant role in avoiding or facing the risk of life and business enterprises and also aiding to certain e)tents for their smooth sailing. herefore, an attempt is made in this paper to highlight the developments of insurance sector in India in a phased manner and to e)amine the reasons for the entry of private and foreign insurance players into Indian insurance market and to present the changing scenario of insurance business in India. It is also attempted to e)amine the growth of Indian insurance sector during the period of pre and post liberaliIation and finally to suggest the strategies and challenges need to be adopted by Indian insurance sector in the light of global scenario so as to enhance its market share. Mehra $)**/' studied that economic growth in the emerging markets has time and again outpaced the developed and industrialiIed countries. Alongside the rising importance of emerging economics, their life insurance sectors are also drawing more attention. ItEs been four years since the life insurance sector was opened up for private players in India. he reasons that prompted the government to bring in reform in this sector are well
46

known. 2hile the public sector life insurance companies made enormous contribution in the spread of awareness about insurance, and e)panded the market, it was recogniIed that their reach was still limited, the range of product offered restricted to the services to the consumer inadequate. It was also felt that the rapid economic growth witnessed in the <@s couldnEt be sustained without a thriving insurance sector. oday, the private accounts for nearly :@B of the market. he market share of the private players has to be seen in the conte)t of this enlarged market. here has been a flurry of private players providing a wide range of innovation products, services and customiIed solutions. 0merging marketsC such as /hina, India, Me)ico, and $ussiaC are home to some ?9B of the worldEs population. /ollectively, they account for :AB of world economic output. 3et, insurance business is underdeveloped in these markets. In fact, India as a country is underCinsured. .nly A=B of the :=@ million insurable population is insured. 0)ploiting the growth potential of emerging insurance marketC India and /hina are in the spotlight. "oth the countries currently attract a lot of attention due to their siIe, strong growth performance and favorable regulatory changes. o begin with, India and /hina are the most populous countries and both have sustained impressive economic growth in the last decade. "etween 8<<A and :@@A, annual real 6%# growth averaged ?.<B in china and =.<B in India. Interestingly, both markets have gone through a similar period of nationaliIation of their insurance business, although /hina revoked state monopoly earlier than India. 8alandro and Fl&nn $)**/' studied that many insurance companies vigorously pursue topCline growth, even though it has the potential to develop unprofitably over time. he time lagGor tailH between when insurance is sold and when claims are paid generates risks unique to insurance companies. ,urthermore, the insurance market is both mature and efficient Gi.e. its level of completion is very highH, which means that profitable opportunities are both rare and untenable unless protected by competitive advantage. here currently no practical measure available G of which the authors are aware H at the business unit level to evaluate insurance premium growth in the face of the industryEs risk, impairing e)ecutivesE ability to assess segment opportunities Gand haIardsH, thus hampering strategies decision making. he purpose of this paper is to introduce a he paper introduces '2$ which was
47

practical measure developed by the authors called 'nderwriting $eturn G'2$H which aims at helping to alleviate this situation.

developed during the course and scope of the authorsE work in the insurance industry, and their research into applying valueCbased management to that industry. he paper finds that '2$ is a practical measure that property and casualty e)ecutives can use at the business unit level to help quantify market segments to grow, hold, harvest and abandon. A variety of strategies analysis tools, such as the popular "oston /onsulting 6roup matri), are utiliIed today. In general, the application of such tools is hampered by an imprecision of measurement but each can add a level of insight to e)ecutiveE resource allocation options. '2$ can further aid insurance e)ecutive in strategic analysis by helping to quantify in which segments to compete, and which ones to abandon. he paper demonstrates the utility of the measure in an e)ample based on an actual analysis. %non $)**/' studied all the aspects of the Indian insurance industry along with an outlook for potential developments. he report e)amines the trends in industry, besides the competitive landscape offers a brief analysis on the main players in the industry. It contains an assessment based on (6ST anal&sis, covering the relevant political, economic, social and technological factors that have implications for the development of the industry. he report also evaluates the industry within th Michael porter fra!e<ork. It goes on to describe the competitive landscape and provides a comparative financial study of the ma!or players in the industry. Insurance constitutes an important and increasing proportion of the gross financial savings of the household sector in india. he private sector, in life as well as the nonClife segments gained more prominent in the life insurance sector. he factors that have driven change includeK Increasing 6ross ,inancial *ousehold 4avings. %eregulation in the Indian Insurance Market. Increase in dependency ratio *owever, dearth of new products represents a ma!or implication. Sethi $)**/' studied the concept of banc assurance in India. "anc assurance has mostly been a phenomenal success and , although slow to gain pace, is now taking off across Asia, especially now that banks are starting to become more diverse financial institutions, and the concept of universe banking is being accepted. In India, the signs of initial success are already there despite the fact that it is completely new phenomenon. he factor and principles of why it is a success elsewhere e)ists in India, and there is no doubt

48

that banks are set to become a significant distributor of insurance related products and services in the years to come. 0ao $)**/' analyIed that the insurance industry has grown by ?A percent since the opening up the sector. $emarking on the performance of the insurance industry, / 4 $ao, /hairman, Insurance 0egulator& 4 Develop!ent %uthorit& $I0D%', said public sector players have not suffered with the opening up of the sector. Insurance premium income has risen to $s ?:,;8= crore G$s ?:;.8= billionH in :@@AC:@@;, against $s ;=,@@@ crore G$s ;=@ billionH in :@@@C@8. $ao e)pects premium income in the life insurance sector to rise further by 8=C89 percent and nonClife insurance premium by 8; percent in :@@=C@9. sector. annan $)**>' reviewed in their study that the market potential for private insurance companies is found to be greater in the long run as most of the Indians are of the opinion that, private insurance companies would be able to perform well in the future. he private and foreign insurance companies have too immediate steps in appointing more number of agents and(or advisors in addition to the employees as it has found that agents are the best channel to reach the general public regarding selling of insurance products. he private and foreign insurance companies have to concentrate on the factors like Fprevention of lossE, Fassured returnsE and Flong term investmentE. hey can also focus on an insurance amount of $s. 8C: lakhs with Fmoney back policiesE. *ence, the market has potential. he private and foreign insurance companies that are taking immediate steps can tap it. Sasidharan San#eev $)**>' studied that the insurance sector in India has come a full circle from being an open competitive market to nationaliIation and back to a liberaliIed market again. racing the developments in the Indian insurance sector reveals the A9@C degree turn witnessed over a period of almost two centuries. %th!a $)**F' reviewed that in globaliIation policy, insurance company face a dynamic global business environment. he e)isting insurers are facing challenges from nonC traditional competitors who are entering into the retail market with new approaches and through new channels. 2hile quality of service is the main influencing factor in the
49

he growth comes on the back of healthy demand from the manufacturing

finance market, in the insurance market, product attributes are the main factors that influence the success of insurance companies. hough, there has been growth in life insurance industry over the past few years, comparatively, insurance penetration in India has not increased in spite of the considerable growth potential of Indian life insurance market. 2ith liberaliIation, many insurance players have entered this field from the year :@@@, and the task before them now is to identify what factors influence in decisionC making. In this conte)t, this study assumes importance. he main ob!ective of the paper is to identify the factor s which the consumers take into consideration before selecting life insurance products and determine the e)tent to what these factors are taken into consideration for choosing the life insurance products. through selfCstructured questionnaires. his research is carried out by collecting primary data from :@@ policyholders of +ife Insurance /orporation on India he sample consists of 8@@ policyholders from urban area and 8@@ policyholders from rural area. /: test is employed to test if there is any association is used to find out which factor has more influence. "oth, product and nonCproduct attributes have been found to be important in selecting a policy but they have been rated differently. $ating is different in urban and rural areas. 9sieh $)**H' investigated the relationship between customer perception of public relations G#$H and customer loyalty to test for the moderating role of brand image in that relationship. %ata were collected in a survey of customers of the insurance industry in aiwan, using a questionnaire designed on the basis of focusCgroup discussions with A@ consumers. *ierarchical regression analysis of data from A9> respondents was used to test two hypotheses. he results show that consumersE perception of an organiIationEs #$ practice is an antecedent of loyalty. he impact of public relation perception G#$#H on customer loyalty is stronger and more significant when the brand image is favorable. he effect of #$# on customer loyalty is negligible. his study e)tends previous research by e)amining the moderate of brand image. ,urther research is indicated, to identify the key moderators of the driving force of #$ in relation to customer relationship marketing. his paper proposes an original eightCitem scale for the assessment of customer #$# activity, which can be applied in practice to measure its effectiveness under different brandCimage conditions.
50

Chapter-! RESEARCH METHOLOGY
51

06S6%089 M6T9OLO=B +.). 1eed
+ife insurance is chiefly a risk management tool, meant to offer financial protection to your dependents in the unfortunate event of your death. "ut in India, as the most other developing market, life insurance has come to present more than !ust risk cover. his particular study is conducted on the topic titled “#erformance 0valuation of "irla 4un +ife Insurance /ompany”. he aim of this research study is to know about life insurance. It is done to know the perception of people towards the insurance policy. "ancassurance has mostly been a phenomenal success and, although slow to gain pace, is now taking across Asia, especially now that banks are starting to become more diverse financial
52

institutions, and the concept of universal banking is being accepted. In India, the signs of initial success are already there despite the fact that it is a completely new phenomenon.

+.).) OB368TI?6. 166D 4 S8O(6 OF T96 STUDB
 To deter!ine and anal&Ce the Market (otential of the Birla Sun Life Insurance 8o!pan&.  To kno< the the custo!er a<areness regarding the Birla,sun life insurance and its products.  To stud& and deter!ine the co!petitor position in the !arket.  To kno< the future plans of the people for "u&ing the policies.

+.).5 Scope
he study is restricted to Lagadhri region only. he study also analyses the preferences regarding different life insurance policies of "irlaCsun life insurance. ,or this study 8@@ respondents of Lagadhri are chosen. -ow days there are lot of private companies in market so itEs important to know what motivates the customer to buy the policy. "irla sun life is the fastest growing private insurance company in India. It determines market share of the various private companies in India.

+.5 06S6%089 M6T9ODOLO=B
$esearch means a search for knowledge or gain some new knowledge and methodology can properly refer to the theoretical analysis of the methods appropriate to a field of study or to the body of methods and principles particular to a branch of knowledge.

+.5.+ 0esearch Design
A research design is the arrangement of conditions for the collections and analysis of data in a manner that aims to combine relevance to research purpose with economy in procedure.
53

+.5.) Universe
he universe of the study is Lagadhri.

+.5.5 Sa!ple Unit
he sample unit pertaining to the study is 8@@ respondents of Lagadhri region.

+.5.- Sa!ple SiCe
he sample siIe of 8@@ served the purpose of the study.

+.5./ Sa!ple Method
he sampling method used is nonCprobability convenience sampling.

+.5.> Methods of data collection +.5.>.+ Data collection
he word data means any raw information, which is either quantitative or qualitative in nature, which is of practical or theoretical use. he task of data collection begins after a research problem has been defined and research design chalked out. 2hile deciding about the method of data collection, the researcher should keep in mind that there are two types of data primary and secondary.

 (ri!ar& data
his is those, which are collected afresh and for the first time, and thus happen to be original in character. here are many ways of data collection of primary data like observation method, interview method, through schedules, pantry reports, distributors audit, consumer panel etc. he eam Managers and employees of both the %epartment were consulted to get information about procedure of both the online and off line share trading. "ut the method used by us for the primary data collection was through questionnaires.
54

Iuestionnaire Method ,or the collection of primary data I used questionnaire method. A formal list of questions, which are to be asked, is prepared in a questionnaire and questions are asked on those bases. here are some merits and demerits of this method. hese as underK Merits: 8. +ow cost even when universe is large. :. It is free from bias of interviewer. A. $espondents have proper time to answer. ;. $espondents who are not easily approachable can also be reachable. =. +arge samples can be made.

 Secondar& data
hese are those data, which are not collected afresh and are used earlier also and thus they cannot be considered as original in character. here are many ways of data collection of secondary data like publications of the state and central government, reports prepared by researchers, reports of various associations connected with business, Industries, banks etc. And the method, which was used by us, was with the help of reports of the company.

+.5.F Sa!ple SiCe
I have met :=@ people, to know about their perception regarding companies and there policies after that I have taken := #eople they have fill up the questionnaire and given response.

Chapter-" DATA ANALYSIS AND INTERPRETATION
55

56

D%T% %1%LBSIS %1D I1T60(06T%TIO1
+.@hich Birla life plan do &ou haveA Ta"le -.+ : T&pes Of (lan T&pes of plan +ife insurance plan *ealth insurance plan $etirement plan otal 1o of respondent 9? 10 22 100 Figure. -.+ : T&pes Of (lan (ercentage 9?B 8@B ::B 8@@B

%nal&sis 4 Interpretation he ob!ective of first question was people having an account with "4+I are having which type of plan. In the survey of 8@@ people it was found that 9?B have life insurance plan, ::B have retirement plan and 8@B were having health insurance plan.

57

).%re &ou satisfied <ith the plan &ou haveA Ta"le -.) : Satisfaction @ith The (lan (eople satisfied <ith plan 3es -o otal 1o of respondent >: 28 100 (ercentage 72% 28% 100%

Figure -.) : Satisfaction @ith The (lan

'# &# %# $# "# !# 2# 1# # %nal&sis 4 Interpretation he ob!ective of second question was to find out that how many people are satisfied with the plan. In the survey of hundred people it was found that >:B people are satisfied with the plan while :?B people are not satisfied with the plan. Y e( N)

58

5.%re &ou satisfied <ith the service provided "& the co!pan& a"out ne< sche!es and plansA
Ta"le -.5 : Satisfaction @ith The Services Of The 8o!pan&

%re people satisfied <ith service provided "& co!pan& 3es -o otal

1o of respondent 82 18 100

(ercentage 82% 18% 100%

Figure -.5 : Satisfaction @ith The Services Of The 8o!pan&

%nal&sis 4 Interpretation he ob!ective of third question was to find out whether people are satisfied with the services provided by the company. In the survey it was found that ?:B people are satisfied with the services provided by the company while 8?B people are not satisfied with the services.

59

-. %re &ou interested to !ake !ore invest!ents in BSLIA
Ta"le -.- : (eople @ant To Invest!ent More In BSLI (eople <ant to invest!ent !ore in BSLI 3es -o otal 1o of respondent 9> AA 8@@ (ercentage 9>B AAB 8@@B

Figure -.- : (eople @ant To Invest!ent More In BSLI

%nal&sis 4 Interpretation he ob!ective of fourth question was to find out that do people want to invest more money. It was found that 9>B people want to invest more money while AAB people donEt want to invest more money.

60

/.1u!"er of people have other insurance plan apart fro! BSLI Ta"le -./ : (eople 9aving Other Insurance (lan %part Fro! BSLI (eople having other insurance plan apart fro! BSLI 3es -o otal >? :: 8@@ >?B ::B 8@@B 1o. of people (ercentage

Figure -./ : (eople 9aving Other Insurance (lan %part Fro! BSLI

%nal&sis 4 Interpretation he ob!ective of fifth question was whether people have insurance plan apart from "4+I. In the survey it was found that >?B people have insurance plan other than "4+I while ::B donEt have any other plan.
61

>.(ercentage share of different co!panies in insurance sector Ta"le -.> : Share of Different 8o!panies 1a!e of different co!panies +ife Insurance /ompany "irla 4un +ife Insurance "a!a! AliyanI I/I/I .ther Total (ercentage 9@B <B 88B ?B 8:B +**J

Figure -.> : Share of Different 8o!panies

%nal&sis 4 Interpretation he ob!ective of this study is to find out the percentage share of different companies in the insurance sector. it was found that 9@B is occupied by +I/,<B by "4+I,88B by "a!a! aliyanI,?B by I/I/I and 8:B by other companies.

62

F.Market share of private co!panies Ta"le -.F : Market Share of (rivate 8o!panies List of co!panies I/I/I pru "a!a! AlliaI 4"I *%,/ standard "irla sun life insurance $eliance life Ma) new 3ork ata AI6 Aviva &otak Mahindra Met life I-6 vysya 4hriram life .ther Total (ercentage ::.8B 8A.?B <.?B >.>B >.@B ?.@B ?.@B >.@B A.8B A.9B =.AB :.8B 8.8B 8.8B +**J

63

Figure -.F : Market Share of (rivate 8o!panies

%nal&sis 4 Interpretation: he ob!ective of this study is to find out the market share of different companies in the insurance sector. It was found that icici pru is having the ma)imum share that is ::.8B.

64

.+ FI1DI1=S
 o be successful in marketing of insurance products, the entire business scenario has to be taken into account.  %uring the study to be found that ma!ority of people are aware of life insurance sector.  %uring the survey it was observed that ma!or source of information for consumer are television and newspaper and least preference are given to magaIines, agents and friends.  Attractive schemes and brand image are the most important factor that influences the buying behavior of the consumers.
65

 Ma!ority of respondents will shift to any other insurance company.  #eople are not satisfied with the opted insurance. It was found that the reason for the dissatisfaction of consumer is high premium, delay in claim settlement and poor after sale service.  4o to achieve a greater insurance penetration, insurance sector companies have to create a more vibrant and competitive industry, with greater efficiency, choice of products and value for customers.

CHAPTER-$

SUMMERY AND CONCLUSION

66

>.+ 8O18LUSIO1
he market potential for private insurance companies is found to be greater in the long run as most of the Indians are of the opinion that, private insurance companies would be able to perform well in the future. he private and foreign insurance companies have to take immediate steps in appointing more number of agents and(or advisors in addition to the employees as it has been found out that agents are the best channel to reach the general public regarding selling of insurance products. he private and foreign insurance companies have to concentrate on the factors like M#revention of +ossM, MAssured $eturnsM and M+ong term InvestmentM. hey can also focus on an insurance amount of $s. 8 O : lakhs with Mmoney back policiesM. *ence, the market has potential. he private and foreign insurance companies that are taking immediate steps can tap it easily 5 rapidly.

>.) 068OMM61D%TIO1S
8. 0ven though most of the policy holders are satisfied with policies, plans they have but some new attractive insurance plans should be introduce to bind them not to switch over to other companies insurance plans. :. he company should find out the no. of people who are not having any of the insurance plans through an intensive market research and motivate them to get insured. A. +everaging technology to service customers quickly, efficiently and conveniently. ;. %eveloping and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders. =. /ompany should target each and every class of the society 9. /ompany should provide full information to the customers before targeting so they can take interest.

67

>.5 LIMIT%TIO1S
  4ome of the respondents were not cooperative. here are chances of biased information provided by the respondents.

 As the sample siIe is small compared to the total population, therefore there canEt be full accuracy.  he time was limited.

 Area was limited.

68

BIBLIOGRAPHY

69

BIBLIO=0%(9B

• • •

/.M#A-3 #$.,I+0C "irla 4un +ife Insurance” &othari /.&.$esearch Methodlogy 6upta.%G8<<@H” personal ta)ation and private financial saving in India”

2eb 4its  httpK((www.scribd.com(doc(;<?=<><A("I$+AC4'-+I,0CI-4'$A-/0C 40$1I/04  www.scribd.com(doc(A?=?<>89("irlaC4unlifeCInsuranceC8@@
 www.birlasunlife.com

70

ANNE*URE

71

Iuestionnaire
-ameK............................................................... AddressK TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT .ccupationKTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT el.K$esidenceTTTTTTTTTTTT...fficeTTTTTTTTTTTTTT.. %ate of "irthTTTTTTTTTTTTTAnnual IncomeTTTTTTTTTTT ,amily #articularsTTTTTTTTTTTTTTTTTTTTTTTTTTTT. -ame of spouseTTTTTTTTTTTT TTTTTTTTT..AgeTTTTTT -o. of /hildrenTTTTTTTTTTTTTTTTTTTTTTTTTTTTT 8.2hich "irla 4un +ife 4cheme do you haveS *ealth $etirement +ife *ealth $etirement +ife      

:. Are you satisfied with the Insurance plan you haveS GaH 3es  GbH -o 

72

A. Are you satisfied with the services provided by the company regarding new plans and schemesS GaH 3es  GbH -o 

;. Are you interested to make more investments in "irla 4un +ife S GaH 3es  GbH -o 

=. *ave you any other Insurance #lan apart from "irla 4un +ifeS GaH 3es  GbH -o 

9. If yes, then of which +ife Insurance /ompanyS GaH +I/ GcH "irla 4unlife GeH .thers    GbH "a!a! AllianI GdH $eliance  

>. If you get any attractive plan than are you ready to switch overS GaH 3es  GbH -o 

?. If you get any attractive plan than are you ready to switch overS GaH 3es  GbH -o 

4uggestionsK TTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTTTTTTTTTTTTTTTTTTTTTTT
73

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