Project Purchase Behaviour

Summer Internship Project

“STUDYING THE INFLUENCE OF FACTORS AFFECTING PURCHASE INTENTION OF INDIAN CUSTOMER TOWARDS LIFE INSURANCE PRODUCTS”

Submitted in partial fulfillment of PGDM program 2008-10

Submitted by

Name: SAURABH SINGH Roll Number: CR/02/30
Company Guide Name: Mr.SATISH CHANDRA PUJARI Designation: Agency Manager. Company: IDBI-Fortis Life Insurance Ltd. Faculty Guide Name: Mr.RAJESH SINHA Designation: Professor

Apeejay School of Management Dwarka, New Delhi July 2009

CERTIFICATE This is to certify that the project work done on title “STUDYING THE INFLUENCE OF FACTORS AFFECTING PURCHASE INTENTION OF INDIAN CUSTOMER TOWARDS PURCHASE OF LIFE INSURANCE PRODUCTS” submitted to Apeejay School of Management, Dwarka by SAURABH SINGH in partial fulfillment of the requirement for the award of PG Diploma in Business Management, is a bonafide work carried out by him/her under my supervision and guidance. This work has not been submitted anywhere else for any other degree/diploma. The original work was carried during 8 TH MAY 2009 to 30TH JUNE 2009 in IDBI-Fortis Life Insurance Ltd. Delhi.

Date: Seal/Stamp of Name of the guide: Mr.Rajesh Sinha Address: Delhi.

the

Organization

ACKNOWLEDGEMENT
It is my proud privilege to express my sincere gratitude to all those who helped me directly or indirectly in completion of this project report. I am greatly indebted to Mr. Satish Pujari (Sr.Agency Manager.IDBI-Fortis Ltd.) & Mr. Rajesh Sinha (Faculty, ASM Dwarka) for their support, guidance and valuable suggestions by which this work has been completed effectively and efficiently . These all contributions are of immense value. Last but not least we are indebted to those entire people who indirectly contributed and whom this work should not have been possible. Endeavour has been made to make the project error free yet I apologies for the mistakes.

Saurabh Singh Date:

Table of Content: CHAPTER 1: EXECUTIVE SUMMARY CHAPTER 2: INTRODUCTION TO THE TOPIC CHAPTER 3: COMPANY PROFILE CHAPTER 4: ABOUT THE PROJECT CHAPTER 5: LITERATURE REVIEW CHAPTER 6: RESEARCH METHODOLOGY CHAPTER 7: DATA ANALYSIS CHAPTER 8: CONCLUSIONS CHAPTER 9: RECOMMENDATIONS CHAPTER 10:BIBILIOGRAPHY CHAPTER 11:APPENDIX 5-6 6-13 13-42 43-44 45-55 56-59 60-78 79-84 85-86 87 88-92

EXECUTIVE SUMMARY

In today’s corporate and competitive world, I find that insurance sector has the maximum growth potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. Despite recession this sector has noticed a growth rate of around 35-40%. The growth potential attracts individuals to enter this sector and IDBI-Fortis Life Insurance Company Ltd has given me the opportunity to get a peek of highly competitive and enhancing sector. The awareness related to life insurance products in India, among the mass, is still very low. The level is even lower in rural areas. Insurance is still considered as a tool for tax planning only, even when companies have attached investment benefits to it. The major factors affecting the purchase of an insurance product are trust, service, product features and relationship with advisors. Firms like LIC are still favored only because of being a government undertaking units. The concept of mis-selling has paralyzed the sector itself. People find it hard to have faith in advisors. Their job is really very hard. People are now getting aware of the various investment tools available in the market. The masses in urban cities like Delhi have started comparing the products. While talking to different people, I found that their purchase decision was highly influenced by their family and colleagues. They purchased the insurance products at the time when they needed it most, which according to them was at the time of tax planning, whereas any insurance product must be bought when the individual needs it least so that they can actually calculate the amount of life cover they need and the type of investment they want. The masses are not actually aware about the money value of their life, for example

a person earning Rs.5 Lacs p.a. at an age of 30yrs has got the risk cover of only Rs.7 Lacs. Few people, who are less aware of life insurance products, purchase an insurance product without comparing the product features and different charges. They trust a brand and purchase it even though they find that the offerings from other company are better in terms of service or product features. Insurance companies should take all the efforts to make people aware about the products and benefits. They can spread awareness by organizing various camps, sending mails or through free counseling for interested people.

INTRODUCTION TO THE TOPIC

The topic of my study is “STUDYING THE INFLUENCE OF FACTORS AFFECTING PURCHASE BEHAVIOUR OF CUSTOMERS TOWARDS LIFE INSURANCE PRODUCTS” The main objective of the topic is to find out what factors out of trust, product features, service and relationship with agents or advisors contribute to the purchase of a life insurance product. Conclusion of this project would give an idea of strategies of different companies which may be helpful to the company. Now days all the insurance companies in India are trying to establish themselves in the competitive market. They are introducing innovative marketing strategies to survive in the market. Many other private companies are looking to enter in the Indian insurance market, so it is very essential to a company to innovate their marketing strategies in terms of:

a) What areas to focus on while selling an insurance product? b) How to pitch the product according to the demographics of the prospect? c) Targeting right set of customers. d) What factors of differentiation customer expects?

CHANGING PERCEPTION
Indian Insurance consumers are like Indian Voters, they are soft but when time is right and ripe, they demand and seek necessary changes. De-tariff of many Insurance Products are the reflection of changing aspirations and growing demand of Indian consumers.

For historical years, Indian consumers were at receiving end. Insurance Product was underwritten and was practically forced onto consumers on a “Take-it-As-it-basis”. All that got changed with passage of IRDA act in 1999. New insurance companies have come into existence leading to open competition and hence better products for customers.

Indian customers have become very sensitive to Coverage / Premium as well as the Products (read Risk Solution), that is given to them. There are not ready to accept any product, no matter even if that is coming from the market leader, should that product is not serving the purpose. A case in point is ULIP Product / Group Life and Credit Life in Life Insurance segment and Travel / Family Floater Health and Liability Insurance in the Non-life segment are new age Avatar. The new products are constantly being demanded

by Indian consumers, which is putting huge pressures on Insurance companies (Read Risk Under-writers) and Brokers to respond.

Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section. Another good reason why we are seeing quick changes in the buying behavior of Insurance from mere Investment to risk mitigation is the cost of Replacement of Goods (ROG) or Cost of Services (COS). Now Indian customers are aware of insurance industry and insurance products provided by companies. They have become more sensitive. They would not accept any type of insurance product unless it fulfills their requirements and needs. In historic day’s customers looking at insurance products as a life cover which can provide security against any unacceptable events, but now customers look at insurance products as an investment as well as life cover. So today’s customers wants good return from the insurance companies. The Indian customer’s forms the pivot of each company’s strategy.

Investment of Indian household savings (as a % in different sector)

BANK DEPOSITS CORP. BANKS SHARES AND DEBENTURES MUTUAL FUNDS NBFC’S GOVT. BONDS INSURANCE PF/ RETIRE FUNDS CURRENCY

35% 2% 8% 8% 3% 4% 23% 14% 3%

Source: - www. avivaindia.com

Changing face of Indian insurance industry: After the Insurance Regulatory and Development Authority Act have been passed there has been establishment of many private insurance companies in India. Previously there was a monopoly business for Life Insurance Corporation of India (L.I.C.) who was the only life-insurance company for the people till 2000. L.I.C. still holds 65.4% of the market share in 2008. But after the introduction of private life insurance companies there is a great competition in Indian market now. Everyone is trying to capture the fresh market here and penetrate it with aggressive marketing strategies. Today life-insurance is not only limited up to just life risk cover and maturity period bonuses but changed to greater return from the investments. With the introduction of the unit linked insurance policies these companies are investing the money in different investment instruments like shares, bonds, debentures, government and other securities. People are demanding for higher returns with the life risk cover and private companies are giving 30-40% average growth per annum. These life-insurance companies have every kind of policies suiting every need right from financial needs of, marriage, giving birth and rearing up a child, his education, meeting daily financial needs of life, pension solutions after retirement. These companies have every aspects and needs of our life covered along with the death-benefit.

In India only 25% of the population has life insurance. So Indian life-insurance market is the target market of all the companies who either want to extend or diversify their business. To tap the Indian market there has been tie-ups between the major Indian companies with other International insurance companies to start up their business. The

government of India has set up rules that no foreign insurance company can set up their business individually here and they have to tie up with an Indian company and this foreign insurance company can have an investment of only 24% of the total start-up investment. Indian insurance industry can be featured by: • • • Low market penetration. Ever growing middle class component in population. Growth of customer’s interest with an increasing demand for better insurance products. • • Application of information technology for business. Rebate from government in the form of tax incentives to be insured

Today, the Indian life insurance industry has more than a dozen private players, each of which are making strides in raising awareness levels, introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. Several of private insurers have introduced attractive products to meet the needs of their target customers and in line with their business objectives. The success of their effort is that they have captured over 38% of premium income in five years.

The biggest beneficiary of the competition among life insurers has been the customer. A wide range of products, customer focused service and professional advice has become the mainstay of the industry, and the Indian customer’s forms the pivot of each company’s

strategy. Penetration of life insurance is beginning to cut across socio-economic classes and attract people who have never purchased insurance before. Life insurance is also now being regarded as a versatile financial planning tool. Apart from the traditional term and saving insurance policies, industry has seen the entry and growth of unit linked products. This provides market linked returns and is among the most flexible policies available today for investment. Now products are priced, flexible, and realistic and sustain so people in better position to understand the risk and benefits of the product and they are accepting these innovative products. So it is clear that the face of life insurance in India is changing, but with the changes come a host of challenges and it is only the credible players with a long term vision and a robust business strategy that will survive. Whatever the developments, the future and the opportunities in this industry will surely be exciting. There are 20 private players in Indian life insurance market. 7 bank owned insurers: - HDFC standard life, ICICI prudential, IDBI-FORTIS, ING Vysya, MetLife, OM Kotak, SBI life. 13 independent insurers: - Aviva, Birla sun life, Bajaj Allianz, Max New York life, Tata AIG. Major international insurers are- Prudential and Standard life from UK, Sun life of Canada, AIG, MetLife and New York life of the US.

Increasing growth since liberalization: YEAR FY03 FY04 FY05 FY06 FY07 FY08 LIC (in bn rs.) 110 120 130 140 240 260 PRIVATE PLAYER 10 20 40 60 160 280

Source: - Insurance Industry (ICFAI publication book)

Possibilities for insurance companies in India: • • • • • • • • • • Further deregulation of the market. Greater concern for the customers. Newer products and services. Competition and quality consciousness. Cost effective operations. Restructuring of the public sector. Consolidation of domestic insurance markets. Technology driven shift in product design. Actual operations and distribution. Convergence of financial services.

COMPANY PROFILE
Indian Operation :
Growing at a breakneck pace with a strong pan Indian presence IDBI-FORTIS has emerged as a strong player in India. IDBI-FORTIS Life Insurance Company Limited is a joint venture between three leading conglomerates IDBI, FORTIS and FEDERAL BANK. The Certificate of Registration has been issued by the Insurance regulator IRDA to this Insurance Company on 19th December 2007. According to the agreement, IDBI has a 48per cent stake in the venture, while Fortis and Federal Bank have 26-per cent stake each. While IDBI and Federal Bank are major Indian banks, Fortis has the expertise of bancasurance across global markets. It is one of the best names in the insurance business in Europe and has successful joint ventures in various Asian countries. IDBI Fortis Life Insurance has become 18th life insurer in India.

Founded in 1956, IDBI Ltd. is India’s premier industrial development bank. Today, it is amongst India’s most famous commercial banks which provide a wide range of innovative products and services. IDBI Bank has around 490 branches and more than 600 ATMs all over India. IDBI is a also a part of development activities, as it has been instrumental in sponsoring the development of key institutions involved in India’s financial sector, such as, the Securities and Exchange Board of India (SEBI), National

Stock Exchange of India Limited (NSE) and National Securities Depository Ltd (NSDL).

Federal Bank is one of India’s leading private sector banks. It has a wide spread network in India, but its dominant presence can be seen in the state of Kerala. It has around 550 branches and 450 ATMs spread across the country. Federal Bank is one of the first large Indian banks, having an entirely automated and interconnected branch network. The Bank also provide a wide range of services, such as, internet banking, mobile banking, tele banking, any where banking, debit cards, co-branded credit cards, online bill payment and call centre facilities to offer complete banking convenience to its customers.

Fortis is a European financial services provider which is engaged in banking and insurance. It has its presence in over 50 countries. Fortis offers a comprehensive package of products and services in collaboration with intermediaries and through other distribution partners. Fortis is counted among the 20 largest financial institutions in Europe. IDBI Bank, Federal Bank and Fortis Insurance International with their expertise, now came together to provide the insurance benefits to the customers in India. Characterized by global presence with a local focus and driven by customer orientation to establish high earnings potential and financial strength, IDBI-FORTIS Life Insurance Co. Ltd. was incorporated on March 2008. The company received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) No 116 on 19TH December 2007 to conduct Life Insurance business in India.

It was the 18th company in the life insurance sector in India, in 2007. The company ranks 13th in the whole industry, it has taken a big jump in only one and a half year of its establishment. IDBI Fortis launched its first set of products across India in March 2008, after receiving the requisite approvals from the Insurance Regulatory Development Authority (IRDA). Today, they offer services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners.

At IDBI Fortis the endeavor is to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery they intend to deliver world-class wealth management, protection and retirement solutions to Indian customers.

L ist of Life Insurance Companies
Sl. No. 1. 2. 3. 4. Insurers HDFC Standard Life Insurance Co. Ltd. Max New York Life Insurance Co. Ltd. ICICI-Prudential Life Insurance Co. Ltd. Om Kotak Life Foreign Partners Standard Life Assurance, UK New York Life, USA Prudential , UK Old Mutual, South Regn. No. 101 104 105 107 Date of Registration 23.10.2000 15.11.2000 24.11.2000 10.01.2001 Year of Operation 2000-01 2000-01 2000-01 2001-02

Sl. No.

Insurers Insurance Co. Ltd.

Foreign Partners Africa Sun Life, Canada American International Assurance Co., USA BNP Paribas Assurance SA, France ING Insurance International B.V., Netherlands Allianz, Germany Metlife International Holdings Ltd., USA ---

Regn. No.

Date of Registration

Year of Operation

5. 6.

Birla Sun Life Insurance Co. Ltd. Tata-AIG Life Insurance Co. Ltd.

109 110

31.01.2001 12.02.2001

2000-01 2000-01

7.

SBI Life Insurance Co. Ltd. ING Vysya Life Insurance Co. Ltd. Allianz Bajaj Life Insurance Co. Ltd. Metlife India Insurance Co. Ltd.

111

29.03.2001

2001-02

8.

114

02.08.2001

2001-02

9. 10.

116 117

03.08.2001 06.08.2001

2001-02 2001-02

11.

Reliance Life Insurance Co. Ltd. (Earlier AMP Sanmar Life Insurance Company from 3.1.02 to 29.9.05)

121

03.01.2002

2001-02

12. 13. 14.

AVIVA Sahara Life Insurance Co. Ltd. Shriram Life

Aviva International Holdings Ltd., UK --Sanlam, South

122 127 128

14.05.2002 06.02.2004 17.11.2005

2002-03 2004-05 2005-06

Sl. No.

Insurers Insurance Co. Ltd.

Foreign Partners Africa AXA Holdings, France Pantaloon Retail Ltd.; Sain Marketing Network Pvt. Ltd. (SMNPL), Generali, Italy Fortis, Netherlands HSBC, UK

Regn. No.

Date of Registration

Year of Operation

15. 16.

Bharti AXA Life Insurance Co. Ltd. Future Generali India Life Insurance Company Ltd.

130 133

14.07.2006 04.09.2007

2006-07 2007-08

17.

IDBI Fortis Life Insurance Company Ltd. Canara HSBC OBC Life Insurance Company Ltd. Aegon Religare Life Insurance Company Ltd. DLF Pramerica Life Insurance Co. Ltd.

135

19.12.2007

2007-08

18.

136

08.05.2008

2008-09

19.

Religare, Netherlands Prudential of America, USA

138

27.06.2008

2008-09

20.

140

27.06.2008

2008-09

: Source IRDA website

VISION, MISSION & VALUES

VISION:
To be the leading provider of wealth management, protection and retirement solutions that meets the needs of our customers and adds value to their lives.

MISSION:
To continually strive to enhance customer experience through innovative product offerings, dedicated relationship management and superior service delivery while striving to interact with our customers in the most convenient and cost effective manner.

To be transparent in the way we deal our customers and to act with integrity.

To invest in and build quality human capital in order to achieve the mission.

VALUES:
Transparency: Crystal clear communication with our partners and stakeholders. Value to Customer: A product and service offering in which customers perceive value. Rock Solid & Delivery on Promise: This translates into being financially strong, operationally robust and having clarity in claims. Customer Friendly: Advice and support in working with customers and partners. Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholder and the community at large.

HEAD OFFICE

IDBI Fortis Life Insurance Co Ltd 1st Floor, Trade View Oasis Complex, Kamala City

P.B. Marg, Lower Parel (W) Mumbai - 400013 Website: www.idbifortis.com

IMPORTANT PERSONS
1. Mr. Yogesh Agarwal Chairman IDBI Fortis Life Insurance Co Ltd

2. Mr. G.V.Nageswara Rao MD & CEO IDBI-Fortis Life Insurance Co. Ltd.

EXPANSION PLANS:
IDBI Fortis is likely to recruit 1,250 people during the current fiscal. Also, it has its plans to increase the number of its standalone branches to 100 from 33. Overall, the company, for which wealthsurance is the flagship product, has got 1,100 branches.

According to an interview given by GV Nageswara Rao, MD & CEO, IDBI Fortis, to a leading business channel said that the recruitments are primarily meant for hiring sales personnel, known as agency managers, for the operation of our forthcoming branches. For the company, agency managers are those that are placed above agents and that are responsible for the entire business operation of the company at the ground level. For new branches, the company is basically focusing Tier-II cities of the country. Currently, the company has got 970 people on its fold, which was likely to cross the mark of 2,000 by the fiscal-end. In the similar veins, the company has got 6,900 advisors on its fold as of now. The company had collected a total premium of Rs 328 crore during the fiscal 2008-09. The sum assured capital of the company was to the tune of Rs 2,825 crore and it had sold over 87,000 policies during the year gone by.

PRODUCTS
WEALTHSURANCE Everyone needs money to fulfill their dreams. Everyone has unique dream and aspiration for themselves and their loved ones. It can be anything like to build a house, educate a child or gain financial security. This list can be longer, but all of them require money.

Make a promise to save adequately and build wealth. Dreams do not come true unless one makes the efforts to bring them true. To meet your cherished goals one needs to make a promise to save enough money and build the wealth you need. But once one has made the promise he or she needs a plan which can ensure that his or her goals will indeed be achieved.

How does Wealthsurance work? Wealthsurance is a wealth-management account with sub-accounts for investments and insurance. It is designed to meet twin goals of wealth-building and insurance protection. Wealth building – The Wealthsurance Investment Account holds the entire investments one has chosen. The investments made out of your premium allow you to manage and build your wealth. Insurance Protection – The Wealthsurance Insurance Account holds the insurance benefits one has chosen, which allows one to claim benefits in the event of a serious ailment, disablement, accident or death.

There are two types of accounts made: 1. My Investment Account: All the premiums one pays goes into his Investment Account. After deduction of the Premium Allocation charge which is like an entry load, the balance amount of premium is invested as per the option one chooses. Under the IDBI Fortis Investment Basket, one can choose a wide choice of investment options to suit his stage of life, risk appetite and liquidity needs. The returns one get depends upon the options one selects. There are

options that give fixed, assured returns and thus carry low risk, as also options where the returns are linked to market performance and thus carry higher risk. The balance in the Investment Account is called Fund Value. At any time, the Fund Value represents the wealth he has built over time. The Fund Value is paid upon maturity. The Fund Value grows from the premiums one contributes as also the returns which accrue on the investment options one has chosen. One can also have the facility of premature withdrawals from the Fund Value to meet any financial needs.

2. My Insurance Account: One can choose from the range of life, health, accident and disablement insurance benefits we offer under IDBI Fortis Insurance Basket. The insurance benefits one has chosen can be seen at anytime in the Insurance Account. One can enjoy the insurance benefits during the term for which he has chosen the benefit. Whenever any major disease, hospitalization, accident, disablement or death happens, a claim can be lodged for the benefits one is entitled to. While life insurance is compulsory, additional insurance benefits are optional.

INVESTMENT BASKET Design your wealth investment yourself.

Wealth Creation by Design: The real power of the Wealthsurance Foundation Plan is that it offers the most comprehensive choice of investment options to develop your wealth plan. These investment options are designed to meet the needs of all types of investors and are offered in the Investment Basket. They are easy to understand and similar in features to familiar investments such as bank deposits, bonds, post office schemes or mutual funds. What’s more, with Wealthsurance, you get tax benefits on your contributions, returns and benefits. In effect, Wealthsurance is a tax-free wealth management account because all the money you put into it grows without any tax To suit ones unique needs to create and manage his plan to build wealth, the IDBI Fortis Investment Basket offers five types of investment options:

1. Capital Guaranteed Fund Give returns linked to equity markets, but with no fear of loss of principal. For those willing to take some risk but with capital protection. 2. Market Linked Funds Funds that invest in bonds, equities and money market that give returns linked to market performance. For those wishing to take full risk and enjoy full rewards of the market. 3. Asset Allocator Funds Fund of Funds that invest in all our investment options with asset allocation managed by our fund managers. For those who wish to leave it all to us to manage their money. In essence, with its truly versatile range of investment choices, the Wealthsurance Foundation Plan provides you with a one-stop solution to accumulate and grow wealth to meet both short and long term financial objectives. Whether one wants to plan for his child’s education coming up in five years or the retirement coming after twenty five years, the Wealthsurance Foundation Plan can meet all the needs. You can make a single investment or even manage most of your financial savings in it by choosing an appropriate mix of investment options. Think about the convenience of managing your entire portfolio in a single account and watch your wealth grow over time.

INSURANCE BASKET: As told earlier in the Investment Basket, it takes a well structured plan to create wealth. However, you must also protect the plan such that it does not deviate from its goals due to

any surprises that life may throw your way. This protection is provided by choosing the right benefits from the Insurance Basket. It offers a range of risk cover choices such as Life, Terminal Illness, Health, Accident and Disablement Insurance benefits. One can choose what he needs and can pay for only those specific benefits. With these benefits, he can ensure that: • His family is not affected financially and his wealth plan continues to work in the case of any unfortunate event. • He is protected against high medical expenses and loss of earning capacity in the event he suffers a serious illness, undergo hospitalization or become disabled. Types of insurance benefits offered:

The following benefits are offered in the IDBI Fortis Insurance Basket.

1. Life and Terminal Illness Insurance: Life and Terminal Illness Benefit: Death Benefit is paid under Wealthsurance in the event of: a. Death of the Insured Person, or

b. Diagnosis of terminal illness where the Insured Person is expected to live for not more than six months. 2. Health Insurance: They offer two Health Benefits as optional Riders: a. Major Diseases Benefit: If the Insured Person is diagnosed with any of the 17 specified major diseases, a lump sum cash amount is paid as benefit. b. Hospital Cash Benefit: At times one may require hospitalisation due to an illness or accidents. Hospitalisation can be a huge drain on his finances, which can affect the wealth creation plan. The Hospital Cash Benefit can help one ease his hospitalisation expenses burden. The Hospital Cash Benefit rider gives a daily allowance for each day of hospitalisation and a higher allowance is given if the treatment requires one to be admitted to an Intensive Care Unit (I.C.U.). To further assist in his recovery, an additional recovery allowance is also given for two days, provided that you had been admitted to a hospital for more than five days. These benefits are payable even if benefits are received under other medical schemes or insurance plans.

3. Accident and Disablement Insurance: They offer two Accident and Disablement Benefits as optional Riders: a. Accidental Death Benefit: In the event of death of the Insured Person due to accident, an additional lump sum cash amount is paid as benefit.

b. Accidental Death and Disablement Benefit: In the event of death or permanent disablement of the Insured Person due to accident, a lump sum cash amount is paid as benefit. 4. Waiver of Premiums:

They offer two Waiver of Premium Benefits as optional Riders: a. Waiver of Premium Benefit on Death: In the event of the death of the Policy Owner, the future regular premiums are waived and treated as paid. b. Waiver of Premium Benefit on Total and Permanent Disablement: In the event of total and permanent disablement of the Policy Owner due to any illness or injury, the future regular premiums are waived and treated as paid.

A COMPLETE FINANCIAL PLAN
Wealthsurance can be your complete financial plan to meet your financial goals. With Wealthsurance one can set up and achieve medium-term as well as long-term financial goals. One can also change his plan as his goals change. Whether he wants to plan for his child’s education coming up in five years or the retirement coming after twenty five years, Wealthsurance can meet all the needs or, as most people do, one can simply build his financial wealth over time and draw upon it as needed. Whichever method he chooses, which is a matter of personal preference, Wealthsurance helps him to meet his goals. Establish a savings plan: One can follow the steps below to establish a financial plan to meet his goals: a. Start with the end in mind – One can first establish how much money he would need at what time to meet his financial goals.

b. Assess Risk Profile – He should determine how much risk he is prepared to take by making an assessment of his risk profile. Risk and return are directly corelated. One cannot expect to get higher return without also taking higher risk. c. Choose investment options - After assessment of the Risk Profile, one can choose the investment options he would like to invest in. d. Find out how much one should save - Based on the investment options, using the expected return, one can calculate how much he needs to save in order to build the target amount on the specified date. e. Monitor and Change the Plan - After one has taken the Wealthsurance Plan, he can periodically monitor how his investment options are faring and whether he is on track to achieve his financial goals. One can adjust his Plan if necessary.

PLACE
The product can be purchased from: 1. Fill up an instant online form from the website www.idbifortis.com and the advisor will contact the person in next 48 hrs. 2. Email at [email protected]. Please write at the above email id. Please mention ‘I want to be Wealthsured’ in the subject and provide us with the following details in your email a. Full name b. Phone number (home/mobile) c. City of current residence d. Preferable time when you want to be called.

3. SMS Wealth to 5757515 The Wealthsurance Advisor will get in touch with you within 48 hrs. and fix an appointment to understand your needs and build your Wealthsurance plan. 4. Call on 1800 102 5005 (For non-MTNL subscribers) / 1800 22 1120 (For MTNL subscribers) 5. Visit the office of any of the followings: a. IDBI BANK. b. FEDERAL BANK.

ADVERTISEMENTS IN INSURANCE SECTOR
Most of the insurance companies use all channels of advertising from newspapers and the television to insurance agents and direct mailers. A fierce battle seemed to have begun among Indian insurance companies to make one's own brand win over the other. A majority of Indian customers being very conservative and averse to risk, trust is an extremely important factor in the insurance business. Since LIC was a government owned body, there was an element of security embedded in its services and products. This

proved to be the biggest hurdle for the new insurance companies as Indian customers were reportedly rather skeptical about them. Hence, the new companies focused their campaigns primarily on building an image of trustworthiness and reliability for themselves. Secondly, their advertisements focused on insurance as an investment option and not a mere tax saving tool -another first for the Indian market. Most of these advertisements carried messages like the family's happiness, human bonding, etc., with underlying emphasis on the security that insurance could provide. Also, instead of projecting the idea, that an insurance policy actually starts working only after the death of the insured, the new campaigns projected that insurance protects people throughout their lives.

LIFE Vs OTHER INSURANCE
Life insuracet expenditure) th S.A. 20% he human tendency

20% non-life

80% Life insurace

ADVERTISERS L.I.C HDFC STANDARD LIFE BIRLA SUNLIFE ICICI PRUDENTIAL MAX NEW YORK LIFE BHARTI AXA SBI LIFE INSURANCE AVIVA LIFE INSURANCE ING VYSYA RELIANCE LIFE INSURANCE

RANK 2006 1 2 3 4 5 6 7 8 9 10

RANK 2007 2 1 8 3 6 15 10 5 14 9

: Source- www.livemint.com

1. Life Insurance players had an 80% share of overall TV advertising of 'Insurance' sector in 2007. 2. Life Insurance advertising grew by 72% during 2007 compared to 2006. 3. Life Insurance advertising max. during Q1 across 2006 and 2007. 4. LIC took the top slot among the players of 'Life Insurance' on TV in 2007. 5. Birla Sun life Children’s Dream was the top brand in the new brands list on TV.

: Source- www.livemint.com

IDBI – Fortis ADVERTISEMENT CAMPAGINS :

IDBI Fortis launched an amazing viral campaign based on southern superstar Rajnikant for their insurance product Wealthsurance. With Rajnikant turning out to be a major crowd puller, it has been witnessing a few very interesting virals showcasing him. The ad aims to convey that regardless of market volatility and troubled economic conditions, Bondsurance is the best life insurance product in the market, with guaranteed results, and that this promise is unshakable. Viral marketing was used because it is rare to grab the attention of the consumers for even one minute on TV as they keep switching channels. However, on a computer, consumers watch an ad with their full attention if they find it interesting and that too without switching between windows. The viral ad is a part of the online brand-building campaign and it is aimed at generating awareness about the features of the product. It is not meant to boost sales immediately, but it will obviously help us to get business in the long run. The microsite, Quantum of Shoelace.com, where the viral is available, offers

users the option to share the viral ad through Facebook.com, Orkut.com and other social media sites. It has received more than 2.25 lakh views on that site till date. The company will promote the viral ad by sending mailers to the registered database of IDBI Fortis consumers, employees and insurance agents. Apart from this, Contests2Win will send mailers to the registered users of the website.

IDBI-Fortis sponsored the INDIA-SRI LANKA bilateral cricket one day series held in Srilanka in Feb 2009. India won the series by 4-0.

DISTRIBUTION CHANNELS:
There are three distribution channels on which IDBI-Fortis is relying, namely agency, bancassurance and alliances. The main focus of distribution is through the bancassurance model, although other forms of distribution (including agency and direct sales) will be used as well. While IDBI Bank and Federal Bank are bank partners, Fortis has the expertise of bancasurance across markets where it sells insurance. The company lays special emphasis on the proper distribution of its products. IDBI has discontinued its corporate relationship with Birla SunLife for its life insurance business. IDBI Fortis plans to have a national presence all across the country. In order to achieve the national reach IDBI-Fortis has planned it expansion stage. The company is going to increase number of its branches from 33 to 100 in the next financial year. The main focus will be on Tier – II cities. The company is going to recruit 1250 new heads, mainly for the post of agency managers. While the company is working on various delivery models and product strategies, it has started off by unfolding a host of individual endowment, group and unit linked products, which it has filed with the Irda after receiving requisite approvals. As far as products are concerned, IDBI has demonstrated the ability to put in place a track record of being the first on infusing new products such as money transfer on the ATM,

online air ticketing, bill payments across all channels. Hence the same will for insurance as well.

INSURANCE COMPANY ICICI prudential

ASSOCIATE BANKS ICICI bank, Bank of India, Citibank, Allahabad bank, Federal bank, south Indian bank, Punjab and Maharastra cooperative bank State bank of India Deutsche bank, Citibank, bank of Rajasthan, Andhra bank Vysya bank ABN Amro Bank, Canara Bank Union Bank, Indian Bank Karnataka Bank, J&K Bank Federal Bank, IDBI Bank.

SBI life Birla sun life ING Vysya bank Aviva life insurance HDFC standard life Met life IDBI-Fortis

MAJOR COMPETITORS:
LIFE INSURANCE CORPORATION The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter.

re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organisation servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organisation happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices, 7 zonal offices and the Corporate office. LIC’s Wide Area Network covers 100 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. LIC already has a huge first mover advantage, thanks to its monopoly status from 1956, when it was nationalized, to 1999 when private players were allowed into insurance. In such a scenario, a sovereign guarantee only serves to tilt the field further in its favour.

Indeed, it is to the credit of private players that, despite these twin advantages enjoyed by LIC, they have been able to grab close to 20% of the business, in just seven years. But

that is no reason why this unfair state of affairs should continue. LIC has had enough time to get its house in order.

ICICI PRUDENTIAL

ICICI Prudential life insurance company is a joint venture between ICICI bank, a premier financial powerhouse and prudential plc. A leading international financial service group headquartered in the United Kingdom. ICICI prudential was amongst the first private sector insurance company to being operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential equity base 74% and 26% stake respectively. In the period April-December 2008, the company garnered Rs. Billion of new business premium for a total sum assured of over Rs 90.6 billion and wrote nearly 4,05,000 policies. The company has a network of over 50000 advisor; as well as 7 bank assurance tie-ups. Today, ICICI Prudential has emerged as the No -1 Private Life insured in the country. With a wide range of flexible products that meet the needs of the customer at every step in life.

HDFC standard life insurance:
HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance companies. It is a joint venture of Housing Development Finance Corporation Limited, India's leading housing finance institution and a Group Company of the Standard Life in UK. HDFC as on March 31, 2007 holds 81.9 per cent of equity venture. Gross premium income of the HDFC for the year ending March 31, 2007 was Rs. 2, 856 crores and new

business premium income was Rs. 1,624 crores. The company has covered over 8, 77,000 lives year ending March 31, 2007. HDFC standard is having 1000 advisors in 11 towns. Key features: Creating corporate agents through HDFC bank in India. Creating agents to provide total financial consultancy. Introducing low cost group schemes for companies and NGOs.

Max New York life insurance:
Max New York Life Insurance Company Ltd. is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business corporations The Company's paid up capital is Rs. 907.4 crore. Max New York life is working on the base of six core values• • • • • Excellence, Honesty, Knowledge, Caring, Integrity

The Company practices a lot of importance on its selection process of insurance advisors which comprises four stages - screening, psychometric test, career seminar and final interview. 337 agent advisors have qualified for the Million Dollar Round Table (MDRT) membership in 2007 and Max New York Life has moved up to 21st rank in MDRT global list.

Key features: • • Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. Investing significantly in its training programme and each agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace. • Using a five-pronged strategy to pursue alternative channels of distribution which include the franchisee model, rural business, direct sales force involving group insurance and telemarketing opportunities, banc assurance and corporate alliances.

ABOUT THE PROJECT OBJECTIVE:
The objective of the project is to: • • • • Study the customer’s perception towards life insurance products. Study which set of customers prefer which sort of products. Changing needs of customers. What factors affect the purchase intention of a customer?

SIGNIFICANCE OF THE PROJECT

I chose the project to study the factors effecting the purchase intention of Indian customers towards life insurance products because

1. It gave me the knowledge of insurance marketing& selling methods.

2. I was able to know the changing mind set of the people towards life insurance products.

3. It gave me opportunity to interact with different professionals and take their views on insurance as a career.

4. It boosted my morale & confidence.

SCOPE AND LIMITATIONS OF THE PROJECT
Every project has its scopes and limitations. There were certain findings as well as certain limitations, beyond which I couldn’t carry out my research work. I did my best in carrying out the project in the best possible manner, but to make error is the human tendency so there may be few negligible errors too. The scope and limitations which I could think of are enlisted below.

SCOPE
• Over view of life insurance industry in India.

•

Comparison among the products of major players (Delhi & NCR Region)

•

Purchase intention of Indian customers.

•

Improving services or products.

LIMITATIONS
• Life Insurance is a vast subject. It is not possible to provide information regarding all the different types of policies which provides different benefits. The project would have been much better if the comprehensive study of all the different types of policy provided by different companies is undertaken. • Due to the time limitations the project was not as good as expected.

LITERATURE REVIEW WHAT IS INSURANCE?

The business of insurance is related to the protection of the economic values of assets. Every asset is expected to last for a certain period of time during which it will perform. After that the benefit may not be available. There is a life time for a machine in a factory or a cow or a motor car. None of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that period or lifetime, a substitute is made available. Thus, he makes sure that the value or income is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it non functional. In that case the owner and those depriving benefits therefrom would be deprived of the benefits and the planned substitute would not have been ready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of such adverse situations.

BRIEF HISTORY OF INSURANCE

The business of insurance started with marine business. Traders, who used to gather in the Lloyd’s coffee house in London, agreed to share the losses to their goods while being carried by ships. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ship. The first insurance policy was issued in 1583 in England. In India, insurance began in 1870 with life insurance being transacted by an English company, the European and the Albert.

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 the lower income groups. These savings are channeled into investments for economic growth.

ADVANTAGES OF LIFE INSURANCE
Life insurance has no competition from any other business. It is also a type of savings. But in comparison with other forms of savings Life Insurance has following advantages which are as follows: 1. In the event of death, the settlement is easy. The heirs con collect the money quicker, because of the facility of nomination and assignment. The facility of nomination is now available with some bank accounts. 2. There is a certain amount of compulsion to go through the plan of savings. In other forms, if one changes the original plan of saving, there is no loss. In insurance, there is a loss. 3. Creditors cannot claim the life insurance money. They can be protected against attachments in court. 4. There are tax benefits, both in income tax and in capital gains. 5. Marketability and liquidity are better. A life insurance policy is property and can be transferred or mortgaged. Loans can be raised against policy.

PRINCIPLES OF LIFE INSURANCE
A life insurance policy is a 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. Apart from the usual essentials of a valid contract, insurance contracts are subject to various principles which are as follows: 1. Principle of Utmost Good Faith 2. Principle of Insurable Interest 3. Principle of Indemnity

1. Principle of Utmost Good Faith:
It is a basic or primary principle applicable to all kinds of insurance. The principle states that, the insured must give to the insurer complete, true and correct information of the subject matter. The insurance company will not pay any compensation, if any information or fact related to the subject matter is concealed or hidden by insured from insurer. In short, the insurance contract should be in good faith. This principle should be followed by the insurer while submitting information to the insurance company in the proposal form. The insurance contract will be null and void, if wrong information is supplied to the insurance company.

2. Principle of Insurable Interest:
This principle states that the insured must have an insurable interest in the subject matter. A person is said to have an insurable interest in the subject matter, when the physical existence of the subject matter gives him some benefit or gain but which is likely to loose by its non- existence. In other words, insured should be interested in protecting the subject matter from financial loss or damage.

3. Principle of Indemnity:
Insurance is meant to compensate losses. By implication, the mechanism of insurance cannot be used to make a profit. This broadly is the Principle of Indemnity. The amount paid out as a claim cannot exceed the amount of loss incurred. Insurance should place the insured in the same financial position after a loss as he enjoyed before it, not better.

LIFE INSURANCE PRODUCTS
Life insurance products are usually referred to as ‘PLANS’ of insurance. If we see in the market there are 100s of products, different products with different companies. By seeing all these products individuals always ask about why all these many products are required. The answer is that the insurance companies operates in the world of demand driven market where it is very necessary to introduce the products as per the need of the customer. So a company should always be innovative in its insurance product and customer tailored. It is not very easy to come out with these innovative products as there are many technical issues involved in it. For that there is one model known as KANO MODEL the details of which is as under.

KANO MODEL FOR A CUSTOMER DRIVEN INNOVATION
The Kano Model helps to identify and prioritize certain product requirements which are important from the customer’s point of view. This knowledge about the customers needs helps the insurance product developers to specify the different attributes of the potential insurance product. The attributes are classified as must-be requirements, one-dimensional requirements, and attractive requirements.

Research report about insured Satisfaction level & business Performance

Strategize with client By agreeing on features To be included in the Product

Analysis & brainstorming of research reports

Plotting preferences for Various insurance products Features, evaluation for Satisfaction and dissatisfaction KANO MODEL FOR INSURANCE PRODUCTS

The figure above shows the importance of different product requirements with respect to customer satisfaction. The insured’s needs are identified by analyzing user research reports. As the product design meets the needs of the customer fully, it’s not only market-ready but also “customer-driven”. Prioritizing customer needs also reduces the time to market duration, an important constraint, which if left unnoticed will render the product obsolete before it reaches the market. These innovative efforts also exerts greater pressure upon the product developers

to make sure that the new insurance product does not disharmonize the existing insurance operations.

TYPES OF PLANS: 1. Term Assurance plans:
Plans of insurance which provides only death cover are called Term Assurance plans. If the insured does not die within the stipulated time, no payment is made under this plan.

Benefits paid only in 0 YRS case of death 20 YRS

2. Term Assurance plans with Return of Premiums:
It is also like a Term Assurance plan but it has some features included in it. In Term Assurance plan the sum assured is paid only if the person dies in the given term or else there is no benefit to the insured due to which people felt that they were cheated. Because of which insurance company brought this plan. Under this plan when the insured dies within the term the company pays the sum assured but if the person do not die then on maturity of the policy the premiums paid by the insured is returned back by the company.

On death sum 0 yrs assured 20 yrs

On maturity premiums

3. Pure Endowment plans: Plans of insurance which provides only survival benefits are called Pure Endowment plans. If the insured dies within the specified period, then no payment is made under this plan. No benefits 0 yrs on death 20 yrs on maturity premiums

4. Endowment Assurance plans:
A Term Assurance plan along with a Pure Endowment plan when offered as a single product is called an Endowment Assurance plans. In this plan the insured will get the sum assured plus bonus either on survival till the date of maturity or only sum assured on the early death. On death 0 yrs S.A. 20 yrs Premium + Bonus

5. Double Endowment Assurance plans:

A Term Assurance plan with a Pure Endowment plan of double the value is called a Double Endowment Assurance plan under which the amount payable on survival is double the amount payable on death. On death S.A 2 times S.A. 0 yrs 20 yrs

5. Whole Life policy: A Term Assurance plan with an unspecified period is called a Whole Life policy. On the death of the insured the sum assured is paid by the insurer. S.A. On death

0 yrs

n yrs

6. Money back plan:
It is also known as Anticipated Endowment plan. Here the insurer has to pay the premium till the end of the policy. But he doesn’t get the entire sum assured at a single time. Within the specified time the insurer gives some percentage of the amount of the sum assured and the rest of the amount is given on maturity. But on the death of the insured before maturity, then the entire sum assured is paid despite the payments made before. 20% 20% 20% 40% + bonuses

0 yrs

5 yrs

10 yrs on death S.A.

15 yrs

20 yrs

7. Unit – Linked plans:
These are also called as “unbundled plans”. Today these are offered by various insurance companies. In this type of plan, part of the premium paid by the insured is for life insurance cover and the rest of the amount is converted into units which are diverted into various funds. The units in the funds depend upon the equity market. As the market goes on increasing then the units are increased and vice-versa. At the time of maturity, the units are converted into money and are paid to the insured.

On death S.A + Fund Value 0 yrs 20 yrs.

S.A. + Fund Value + Bonus

8. Children’s plans:
Insurance can be taken on the lives of the children, who are not majors. The proposal will have to be made by a parent or a guardian. In these plans, the risk on the life of the insured child will begin only when the child attains a specified age. Practices vary widely. The time gap between the date of commencement of the policy and the commencement of risk is called the “Deferment Period”. The date on which the risk will commence, at the end of the deferment period, is called the “Deferred Date”.

There is no insurance cover during the deferment period. If the child dies during the deferment period, the premiums will be returned. Risk will commence automatically on the deferred date, without any medical examination. The main advantages of these plans is that the premiums would be relatively low (age of the child at commencement) and cover will be obtained irrespective of the state of health of the child. These policies have conditions whereby the title will automatically pass on to the insured child, on attaining the age of maturity. This process is called vesting. The vesting age cannot be earlier than 18. After vesting, the policy becomes a contract between the insurer and the insured person.

RIDERS
Rider is a clause or condition that is added on to a basic policy providing an additional benefit, at the choice of the proposer. Some of the riders being offered by insurers in India are mentioned below: • Increased death benefit, being twice or even more than survival benefit.

• Accident benefit allowing double the Sum Assured if death happens due to accident

• Permanent disability benefits, covering loss of limbs, eyesight, hearing, speech, etc.

• Premium waiver, which would be useful in the case of children’s assurances, if the parent dies before vesting date or in the case of permanent disability and sickness.

• Dreaded diseases cover, providing additional payments (in lump or in installments), if the life insured requires medical attention because of specified conditions like cancer, cardiac or cardiovascular surgeries, stroke, kidney failure, major organ transplants, major burns, total blindness caused by illnesses or accidents, etc.

• Guaranteed increases in cover at specified or annually.

• Cover to continue beyond maturity age for same Sum Assured or higher Sum Assured

• Option to increase cover within specified limits or dates.

As per the Regulations made by the IRDA (INSURANCE REGULATORY DEVELOPMENT AUTHORITY) in April 2002 and amended in October 2002. •The premium on all the riders relating to health or critical illnesses shall not exceed 100% on the basic of premium of the main policy.

•And the premium on all the other riders put together should not exceed 30% of the basic premium.

RESEARCH METHODOLOGY
Research can be defined as systematized effort to gain knowledge. A research is carried out by different methodology, which has their own pros and cons. Research methodology is a way to solve research problem along with the logic behind them. Thus when we talk of the research methodology we not only take of research method but also context of our research study and explain why we are using a particular method or techniques and why we are not using other so that research result are capable of being evaluated either by the researchers himself or by others. Research methodology means the method carried out to study the problem. It shows the type of the sample design used, its size and the procedure used to dew sample. The extent of precision achieved and the method used for handling any special problem during the course of the study. Research methodology has following steps: Step: 1 Step: 2 Step: 3 Step: 4 Step: 5 Step: 6 Step: 7 Step: 8 To decide the objective of the study. To design research design. To determine the source of data. To design data collection form. To determine sample size and sample design. To organize and conduct fieldwork. To process and analyze the collected data. To prepare the research report.

Explanation
Step: 1 To decide the objective of the study to be carried out.  To study about behaviour of customers towards various brands of life insurance products available.  To understand factors affecting purchase intention of Indian customers towards life insurance products Step: 2 To decided the research design. What is research design? Research design is a plan, structure, strategy of investigation conceived so as to obtain answer to research question and control variance. There are three types of research design system.   Exploratory Research. Conclusive Research Descriptive Research

Causal Research.

Among the above mentioned types descriptive research design has been chosen. Descriptive research is to find the views of customers. In order the study the characteristics and variables, cross sectional analysis was conducted by using field survey method. In the process of field survey, a questionnaire was developed and circulated to the respondents, which formed the basis for entire research. Step: 3 To determine the source of data. Data source are the data resources or collection of fresh and data to obtain results. There are two types of data sources: thus happen to be original in character.

Primary Data: Primary data is that which is collected fresh and thus happen to be original in character.

Secondary data: Secondary data is any data, which have been gathered earlier for some other purpose. Among the above mentioned types primary data was used for the study and analysis of the objective of this project Reason for selecting primary data: In terms of primary data structure questionnaire was prepared for people in Delhi and NCR region. Analysis clearly reflected the views and preference regarding the perception of the people towards Life Insurance Products.

Step 4: To design data collection. There are two types of mode to collect the data:Observation method. Survey method. As for as the data collection method for this project is concerned, designing the data collection forms or survey forms is applicable to the project. The method selected survey method. People were selected on convenience and judge-mental method. Then the questionnaire was designed. It consisted of five questions related to the topic. There were few open ended questions; few questions were on likert scale. The respondent just had to mark his choices.

Step 5 To determine sample size.

Sample size specification was 110, which included professionals, unemployed student, housewives, and working ladies. The age group of 20-40 yrs was selected. The area under consideration was Delhi and NCR. Step 6: Field work

FIELD METHODOLOGY
The methodology adopted in the field to collect the data represented diagrammatically below:

Segmentation of People Meeting with People

Step

7:

Filling up questionnaire

Processing and Analysis

of collected data The data collected was processed using SPSS 14.0 software. All the relevant information was fed and the results were fetched in graphical, percentage and implications form.

DATA ANALYSIS & FINDINGS
The following are the pattern of responses to the questions asked, by the respondents. Each question is followed by a graphical presentation and a short interpretation.

Quest.1 Do you have a Life Insurance or Investment Policy?
Frequency 94 16 110 Valid Percent 85.45455 14.54545 100 Cumulative Percent 85.45454545 100

Valid

YES NO Total

Clearly we can see that 85% of the respondents already had an life insurance product. Q2. Name the Brand/Company product which you have purchased?
Cumulative Percent 10 54 57 78 81 85 89 91 93 98 100

Valid

HDFC LIC RELIANCE ICICIPRU AVIVA TATA-AIG SBI BAJAJ BIRLA SUNLIFE MAX IDBI Total

Total

Frequency 11 48 4 23 3 4 5 2 2 6 2 110 110

Valid Percent 10 44 4 21 3 4 5 2 2 5 2 100

L.I.C. is still most favorable brand when it comes to life insurance products, followed by ICICI PRUDENTIAL. Important to notice here is that no other brand is has crossed even 5% mark (except for HDFC). IDBI FORTIS is purchased by only 2% of respondents. Q3. Which brand you perceive better in terms of service?
Cumulative Percent 14 44 23 3 14 57 80 83

Valid

HDFC LIC ICICIPRU TATA AIG

Frequency 15 48 25 3

Valid Percent

SBI BAJAJ BIRLA SUNLIFE MAX IDBI FORTIS Total

2 1 2 11 3 110

2 1 2 10 3 100

85 85 87 97 100

The graph shows that LIC is considered as best in terms of service provided among all the listed life insurers. Q4 Which brand you perceive better in terms of trust ?
Frequency 8 75 10 4 5 2 4 2 110 Valid Percent 7 68 9 4 5 2 4 2 100 Cumulative Percent 7 75 85 88 93 95 98 100

Valid

HDFC LIC ICICIPRU TATA AIG SBI BIRLA SUNLIFE MAX IDBI FORTIS

Total

The results in this question were not surprising; most of people (around 70%) have deep faith in LIC. The reason may be that it is a Govt company. But still LIC has no competitor when it comes to trust as a differentiating factor. Q5. Which brand you perceive better in terms of product features?
Frequency 14 46 16 4 6 4 2 10 3 Valid Percent 13 42 15 4 5 4 2 9 3 Cumulative Percent 13 55 69 73 78 82 84 93 95

Valid

HDFC LIC ICICIPRU AVIVA TATA AIG SBI BAJAJ BIRLA SUNLIFE MAX

IDBI FORTIS Total

5 110

5 100

100

The graph displays a better show by the private life insurers in terms of product features. Some of the companies have scored better in terms of products features as compared to LIC. People have shown faith in HDFC and ICICI PRUDENTIAL when it comes to product offerings. IDBI Fortis has also been rated good in this regard when the trend is seen in comparison to the purchase of the brand.

Q6. Which brand you perceive better in terms of relationship with agents/advisors?

Valid

HDFC LIC ICICIPRU AVIVA TATA AIG SBI BAJAJ BIRLA SUNLIFE MAX IDBI FORTIS Total

Frequency 15 43 22 2 3 3 1 3 15 3 110

Valid Percent 14 39 20 2 3 3 1 3 14 3 100

Cumulative Percent 14 53 73 75 77 80 81 84 97 100

The figures clearly suggest that LIC which scored heavily in terms of trust lacks when it comes to relationship with their advisors or agents. In this term, we see that ICICIPRU and HDFC have gained popularity, steadily. Q7. At the time of your purchase, how did you perceive the brand you purchased in terms of service?

Valid

VERYGOOD GOOD AVG Total

Frequency 44 56 10 110

Valid Percent 40 51 9 100

Cumulative Percent 40 91 100

This graph shows that most of the people do not compromise to a great extent when it comes to service. Q8. At the time of your purchase, how did you perceive the brand you purchased in terms of trust?
Valid VERY GOOD GOOD AVG Frequency 54 44 12 Valid Percent 49 40 11 Cumulative Percent 49 89 100

Total

110

100

The figure says that 49% people are satisfied with the trustworthiness of the brand they purchased. It is notable here that people purchase a product even if the service is not good but people still rate trust as more important factor for purchase. Q9. At the time of your purchase, how did you perceive the brand you purchased in terms of product features?
Valid VERY GOOD GOOD AVG Total Frequency 60 47 3 110 Valid Percent 55 43 3 100 Cumulative Percent 55 97 100

55% of people do not want to compromise in terms of product features. Q10. At the time of your purchase, how did you perceive the brand you purchased in terms of relationship with agents/advisors?
Valid VERY GOOD GOOD AVG Total Frequency 40 50 20 110 Valid Percent 36 45 18 100 Cumulative Percent 36 82 100

Only 36% people say that relationship with the agents or advisors affect their purchase decision. This figure is least if we compare it service (40%), trust (49%), product features (55%). So if we arrange these factors in increasing order then: Relationship with agents < Service < Trust < Product Features is the order of preference when it comes to purchase.

Q11.

Rank product features as factor according to their importance while purchasing a

Life Insurance/Investment Product:

Valid

Rank 1 2 3 4 Total

Frequency 60 20 20 10 110

Valid Percent 55 18 18 9 100

Cumulative Percent 55 73 91 100

PRODUCTRANK
60 50 40 30 20 10 0 1 2 RANK 3 4 %

55% of people think that product features is the most important factor so as to make them purchase the product. Q12. Rank service as factor according to their importance while purchasing a Life Insurance/Investment Product
Valid 1 2 3 4 Total Frequency 25 40 30 15 110 Valid Percent 23 36 27 14 100 Cumulative Percent 23 59 86 100

23% people consider that service is the most important factor. Where as 36% people think that it is the second most important factor for deciding which life insurance product to purchase. Q13. Rank trust as factor according to their importance while purchasing a Life Insurance/Investment Product?
Valid Rank 1 2 3 4 Total Frequency 49 28 24 9 110 Valid Percent 45 25 22 8 100 Cumulative Percent 45 70 92 100

45% people are influenced by trust while 25% people think that trust comes second. Q14. Rank relationship as factor according to their importance while purchasing a Life Insurance/Investment Product?
Frequency 18 17 9 66 110 Valid Percent 16 15 8 60 100 Cumulative Percent 16 32 40 100

Valid

1 2 3 4 Total

Only 16% people care about their relationship with the agents or advisors, majority of people (60%) do not consider relationship with agent as an important factor at all. Q15. Gender
Frequency 76 34 110 Valid Percent 69 31 100 Cumulative Percent 69 100

Valid

M F Total

This is just to show that the respondents were not from only a specific gender. The sample constituted of 69% of males and 31% of females. This may even be the scenario when a life insurance product is purchased. Mainly, male of the family decides on which brand of life insurance were to be purchased. Even during the field work most of the females were not aware of majority of life insurance products, except for those who were working. Hence the ratio of male to female respondents is 2.22

Q16. MARITAL STATUS
Frequency 68 42 110 Valid Percent 62 38 100 Cumulative Percent 62 100

Valid

S M Total

This is also just to mention here that the sample consisted of both married as well as single respondents, so as to get a fair view of the society.

EFFECT OF GENDER ON BRAND PURCHASED:
Valid N 110 Percent 100 Total N 110 Percent 100

BRANDPURCHASED Vs GENDER Crosstabulation: BRANDPURCHASED HDFC LIC RELIANCE ICICIPRU AVIVA TATA-AIG SBI BAJAJ BIRLA SUNLIFE MAX IDBI Total M% 11 47 3 21 3 3 3 1 1 7 1.31 76 F% 9 35 6 21 3 6 9 3 3 3 3 34

The figure shows that 47% of males readily purchase LIC product, whereas 35% females are ready to purchase LIC products. The acceptance for ICICI PRUDENTIAL is equal among both. So it is easy to convert females from buying LIC to IDBI Fortis.

SERVICE Vs GENDER Crosstabulation SERVICE RANK 1 2 3 4 M% 18 37 30 14 F% 32 35 21 12

We can clearly see that female are more concerned about very good services than their male counterparts.
TRUST Vs GENDER Crosstabulation TRUST RANK 1 2 3 4 M% 49 24 20 8 F% 35 29 26 9

Trust is more of the guiding factor for males than females.

PRODUCT Vs GENDER
PRODUCTRANK 1 2 3 4 M% 42 16 28 14 F% 30 19 33 18

We can see that product features is important function for males as compared to females. Therefore males look into the details about the product more often as compared to females.

RELATIONSHIP WITH AGENT Vs GENDER
RELAATIONSHIPRANK 1 2 3 4 M% 16 14 8 62 F% 18 18 9 56

RELATIONSHIP with agent or advisor is not at all important factor for both males and females. There any firm may not just focus only on relationship aspect between customer and agent.

CONCLUSIONS
The summer internship was a phase where we are supposed to get acquainted with the practical scenario. All the theoretical concepts were supposed to be applied in this duration.

During my summer internship at IDBI-Fortis Life Insurance Ltd at their Delhi office, I was trained and taught about sales. The world of sales is not static rather highly dynamic. It changes very rapidly. The more you update yourself the more successful you are. The company has introduced the concept of “WEALTHSURANCE” in India, for the first time. The most important person in sales of a life insurance product is financial advisor or more commonly called as insurance agent. Most people have their first contact with an insurance company through an insurance sales agent. These workers help individuals, families, and businesses select insurance policies that provide the best protection for their lives, health, and property. As an Agency manager one has two roles, firstly to make sales of insurance products and secondly to build a team of insurance advisors. Life insurance agents specialize in selling policies that pay beneficiaries to a policyholder. Depending on the policyholder’s circumstances, a cash-value policy can be designed to provide retirement income, funds for the education of children, or other benefits as well. Insurance sales agents also obtain many new accounts through referrals, so it is important that they maintain regular contact with their clients to ensure that the clients’ financial

needs are being met. Every sales agent involved in the solicitation, selling, or negotiation of insurance must have IRDA issued license. The life insurance industry works on human touch values. It is not a sector where technology can have much of its play. Increasing competition in the insurance industry has spurred carriers and agents to find new ways to keep their clients satisfied.

There has been lot of debates over the penetration level of private life insurers as compared to LIC. First, the basic objective of introducing privatization in India was the low
penetration of insurance. Therefore, improving the level of the penetration of insurance is one of the critical objectives towards a positive fundamental change. One such positive change is the introduction of the new forms of distribution channels. Earlier, we had agents, but now we have corporate agents. Not only banks but also bancassurance has substantially contributed to the growth of insurance. New intermediaries like broking companies and corporate agents have made the market quite dynamic. So, in these five years, new players have come up, new products like ULIP have raised the level in the life insurance market, and most of the private players have done huge business.

The insurance companies are differentiating their products and services to achieve the competitive edge. So customization is the new key in life insurance sector, there has to be products which should each and every segment of customers, without the concept of customization it would be difficult to survive in this sector.

Customization constantly faces challenges like ‘excess, awareness and affordability’. For excess, you need to have excellent distribution network, vibrant broking systems, and agents being in touch with the customer, which is quite critical.

With the growth of Indian insurance market, the market experience more and more product development catering to particular segments of the market there by allowing the companies to develop better relationship with their own customer Today the customer wants products tailor made to their needs. To fulfill this need, companies are launching products which can hit the customers need. for eg-; the cost of education is rising day by day so to cater this high cost of education companies have launched child gain programs which provide money when it is needed the most ie in the age between 18to 24 .Earlier product did not have riders but now all the product are equipped with attractive riders like critical illness benefit, accidental death benefit, hospital cash benefit, waiver of premium benefit and many more. Their is flexibility in the plans which allows the customer to increase or decrease the amount of investment .To create a space in the consumers minds the insurance companies have maximized their innovation skills. Earlier people use to associate insurance policy with death but now they buy insurance as a investment instrument .eg-; unit link products which give maximum retunes.

The environment has become more competitive and sensitive to the demands of the market .The customers have become the driving force and the companies have recognized the role of the customer in their business planning and decision making. The emerging scenario provides the consumers with choice of insurance, wider range of new &innovative products also competitive pricing of products and services .

As the industry is growing there is large opportunity for employment also for eg Insurance consultancy can be a great career opportunity since less time has to be devoted it can always be a part time job .The growth opportunities are high because of the large untapped market

The FDI norms presented in 2006, restricts the foreign participation in an Indian Insurance Company to 26 % of the latter's share capital. Although the LIC still remains the largest player in the market, the private companies are emerging with a bunch of lucrative policies and investment opportunities for people belonging to all sections of the society. Such policies are promoted through attractive marketing strategies while are luring the society at large. The privatization of life insurance sector has improved the levels of penetration of insurance. New products like ULIPS are extremely successful in the market, due which private players have made market so competitive. The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. If companies like LIC, RELIANCE LIFE INSURANCE,

TATA AIG, MAX etc have adequate agents in the market they can capture big market as compared to the other companies, on the hand new companies like IDBI-Fortis still have to build their distribution network in order to have larger penetration in the market.

Distribution plays key role in service sector. At IDBI-Fortis Life Insurance, distribution channel includes agencies, alliances and bancassurance. The major sales is achieved through the bancassurance channel. The Federal Bank, IDBI Bank contribute to almost 60-70% of the total sales. The importance of bancassurance channel can be gauged by the fact that the life insurance market leader LIC is now planning to get into banking sector to assist the sales of purely insurance products.

The use of technology in insurance sector is low as compared to other sectors like automobile, retail, banking etc. Though companies are now introducing online services like online chat with advisors, intermediaries, online form submission etc.

RECOMMENDATIONS
The level of awareness of IDBI Fortis is very low in comparison to giants like LIC or ICICI PRUDENTIAL. The respondents with whom I interacted found it really difficult to recall the brand. The company can use various methods to increase the brand recognition among the masses like TV commercials, hoardings etc. The companies like ICICI PRUDENTIAL are well established in the market so it may be difficult for IDBI Fortis to displace them in very sooner times until the masses are aware of the products of the company.

The products offered by the company are very innovative and provide an added advantage to advisors over products offered by other firms, but still the product portfolio does not include the traditional products which are very popular in rural parts of the country. The company should diversify the product portfolio. The reach of advisors is also an important factor which I think the organisation should think over. The company does not have its offices or branches in small or TIER –II cities like Haridwar or Meerut.

My research work can also be used for pitching the product like for example if the advisor is pitching the product to a lady then he should focus more on product features whereas if he is pitching the product to a male then he should focus on the trust part more often. The use of technology in IDBI Fortis was observed to be low as compared to other companies like ICICI or HDFC etc. Most of the companies are now introducing online

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services like online chat with advisors, intermediaries, online form submission etc but I could not find any thing like that on IDBI Fortis website. All in all it was a highly learning period for me as I come from a non insurance background. I have learnt so many things during my stay. I am highly thankful to the IDBI Fortis family, especially to Mr. Satish Pujari for taking so much pain to acquaint us with so much knowledge about so many things.

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BIBILIOGRAPHY
1. IC-33, INSURANCE INSTITUTE OF INDIA, 2006 2. EDWEIN D. DITEHI, (1999), INSIGHT INTO INSURANCE. 3. MALTHORA NARESH, (2007), MARKET RESEARCH. 4. PATHAK, (2008) INDIAN FINANCIAL MARKET. 5. C o n s u m e r B e h a v i o r b y L e o n G . S c h i f f m a n & Leslie

Lazer Kanuk . Eastern Economy Edition by Printice hall India private limited. 9th edition 6. www.licinidia.org 7. www.idbifortis.com 8. www.idra.org 9. WWW.LIVEMINT.COM 10.

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APPENDIX

QUESTIONNAIRE:
Q1. Do you have a Life Insurance or Investment Policy? Yes No Name the Brand/Company product which you have purchased?

Q2.

Q3. Which brand you perceive better in terms of (Write the name of brand) a) Service b) Trust

c) Product
d) Relationship with agent/advisor Q4. At the time of purchase, how did you perceive the brand you purchased in terms of: (Please tick the option) Very Good Good Average Poor Very Poor a) Service b) Trust c) Product d) Relationship With Agent

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Q5.

Rank the following according to their importance while purchasing an Life Insurance/Investment Product: (Rank Between 1 – 4) a) Service b) Trust c) Product d) Relationship With Agent

Personal Details: Name Age Gender Marital Status : : : : M Single Yrs. F Married

Class-wise Net Retentions (General Insurance) in India (1999-2000) Class Net Retention Fire 93.03% Marine Cargo 90.01% Marine Huff (including ONGC and 43.83%

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Energy) Total Marine 79.04% Motor & Workmen's Compensation100% Other Miscellaneous 88.13% Aviation 7.50% Total Miscellaneous 91.92% Grand Total 90.81%

Countries United Kingdom Japan United States South States South Africa Australia South Korea India China Indarsis Brazil

Insurance P 12.71 8.70 4.43 14.04 6.04 9.09 1.77 1.12 2.13 0.54 0.36

Insurance 3028.5 3165.1 1611.6 392.9 1193.5 935.6 7.6 8.5 86.4 4.0 12.9

ADVERTISERS L.I.C HDFC STANDARD LIFE BIRLA SUNLIFE ICICI PRUDENTIAL

RANK 2006 1 2 3 4

RANK 2007 2 1 8 3

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MAX NEW YORK LIFE BHARTI AXA SBI LIFE INSURANCE AVIVA LIFE INSURANCE ING VYSYA RELIANCE LIFE INSURANCE

5 6 7 8 9 10

6 15 10 5 14 9

L ist of Life Insurance Companies
Sl. No. 1. 2. 3. 4. 5. 6. Insurers HDFC Standard Life Insurance Co. Ltd. Max New York Life Insurance Co. Ltd. ICICI-Prudential Life Insurance Co. Ltd. Om Kotak Life Insurance Co. Ltd. Birla Sun Life Insurance Co. Ltd. Tata-AIG Life Insurance Co. Ltd. Foreign Partners Standard Life Assurance, UK New York Life, USA Prudential , UK Old Mutual, South Africa Sun Life, Canada American International Assurance Co., USA BNP Paribas Assurance SA, France Regn. No. 101 104 105 107 109 110 Date of Registration 23.10.2000 15.11.2000 24.11.2000 10.01.2001 31.01.2001 12.02.2001 Year of Operation 2000-01 2000-01 2000-01 2001-02 2000-01 2000-01

7.

SBI Life Insurance Co. Ltd.

111

29.03.2001

2001-02

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Sl. No. 8.

Insurers ING Vysya Life Insurance Co. Ltd. Allianz Bajaj Life Insurance Co. Ltd. Metlife India Insurance Co. Ltd.

Foreign Partners ING Insurance International B.V., Netherlands Allianz, Germany Metlife International Holdings Ltd., USA ---

Regn. No. 114

Date of Registration 02.08.2001

Year of Operation 2001-02

9. 10.

116 117

03.08.2001 06.08.2001

2001-02 2001-02

11.

Reliance Life Insurance Co. Ltd. (Earlier AMP Sanmar Life Insurance Company from 3.1.02 to 29.9.05)

121

03.01.2002

2001-02

12. 13. 14. 15. 16.

AVIVA Sahara Life Insurance Co. Ltd. Shriram Life Insurance Co. Ltd. Bharti AXA Life Insurance Co. Ltd. Future Generali India Life Insurance Company Ltd.

Aviva International Holdings Ltd., UK --Sanlam, South Africa AXA Holdings, France Pantaloon Retail Ltd.; Sain Marketing Network Pvt. Ltd. (SMNPL), Generali, Italy

122 127 128 130 133

14.05.2002 06.02.2004 17.11.2005 14.07.2006 04.09.2007

2002-03 2004-05 2005-06 2006-07 2007-08

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Sl. No. 17.

Insurers IDBI Fortis Life Insurance Company Ltd. Canara HSBC OBC Life Insurance Company Ltd. Aegon Religare Life Insurance Company Ltd. DLF Pramerica Life Insurance Co. Ltd.

Foreign Partners Fortis, Netherlands HSBC, UK

Regn. No. 135

Date of Registration 19.12.2007

Year of Operation 2007-08

18.

136

08.05.2008

2008-09

19.

Religare, Netherlands Prudential of America, USA

138

27.06.2008

2008-09

20.

140

27.06.2008

2008-09

: Source IRDA website.

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