Investor Behaiour Toward Reliance Life Insurance Policies

7/29/2019 Investor Behaiour Toward Reliance Life Insurance Policies

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PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated

debate for some years. The policy makers where in the catch 22 situation wherein for one

they wanted competition, development and growth of this insurance sector which is

extremely essential for channeling the investments in to the infrastructure sector. At the

other end the policy makers had the fears that the insurance premium, which are

substantial, would seep out of the country; and wanted to have a cautious approach of

opening for foreign participation in the sector.

As one of the rare occurrences the entire debate was put on the back burner and the IRDA

saw the day of the light thanks to the maturing polity emerging consensus among factions

of different political parties. Though some changes and some restrictive clauses as

regards to the foreign participation were included the IRDA has opened the doors for the

private entry into insurance.

Whether the insurer is old or new, private or public, expanding the market will present

multitude of challenges and opportunities. But the key issues, possible trends,

opportunities and challenges that insurance sector will have still remains under the realms

of the possibilities and speculation. What is the likely impact of opening up Indias

insurance sector?

The large scale of operations, public sector bureaucracies and cumbersome procedures

hampers nationalized insurers. Therefore, potential private entrants expect to score in the

areas of customer service, speed and flexibility. They point out that their entry will mean

Study of Investor Behavior Toward Reliance life Insurance Page 1


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better products and choice for the consumer. The critics counter that the benefit will be

slim, because new players will concentrate on affluent, urban customers as foreign banks

did until recently. This seems to be a logical strategy. Start-up costs-such as those of

setting up a conventional distribution network-are large and high-end niches offer betterreturns. However, the middle-market segment too has great potential. Since insurance is a

volumes game. Therefore, private insurers would be best served by a middle-market

approach, targeting customer segments that are currently untapped



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EXECUTIVE SUMMARY

In todays corporate and competitive world, I find that insurance sector has the maximum

growth and potential as compared to the other sectors. Insurance has the maximum

growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This

growth potential attracts me to enter in this sector and RELIANCE LIFE INSURANCE

has given me the opportunity to work and get experience in highly competitive and

enhancing sector.

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. In Insurance sector, distribution

channel includes only agents or agency holders of the company. If a company like

RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in

the market they can capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which

policies and benefits of the company can be explained to the customer.



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INSURANCE INDUSTRY IN INDIA

AN OVERVIEW

With the largest number of life insurance policies in force in the world, Insurance

happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per

cent annually and presently is of the order of Rs 1560.41 billion (for the financial year

2006 2007). Together with banking services, it adds about 7% to the countrys Gross

Domestic Product (GDP). The gross premium collection is nearly 2% of GDP and funds

available with LIC for investments are 8% of the GDP.

Even so nearly 65% of the Indian population is without life insurance cover while health

insurance and non-life insurance continues to be below international standards. A large

part of our population is also subject to weak social security and pension systems with

hardly any old age income security

A well-developed and evolved insurance sector is needed for economic development as it

provides long term funds for infrastructure development and strengthens the risk takingability of individuals. It is estimated that over the next ten years India would require

investments of the order of one trillion US dollars.

HISTORICAL PERSPECTIVE

The history of life insurance in India dates back to 1818 when it was conceived as a

means to provide for English Widows. Interestingly in those days a higher premium was

charged for Indian lives than the non - Indian lives, as Indian lives were considered more

risky to cover. The Bombay Mutual Life Insurance Society started its business in 1870. It

was the first company to charge the same premium for both Indian and non-Indian lives.



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The Oriental Assurance Company was established in 1880. The General insurance

business in India, on the other hand, can trace its roots to Triton Insurance Company

Limited, the first general insurance company established in the year 1850 in Calcutta by

the British. Till the end of the nineteenth century insurance business was almost entirelyin the hands of overseas companies.

Insurance regulation formally began in India with the passing of the Life Insurance

Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during the

1920's and 1930's sullied insurance business in India. By 1938 there were 176 insurance

companies.

The first comprehensive legislation was introduced with the Insurance Act of 1938 thatprovided strict State Control over the insurance business. The insurance business grew at

a faster pace after independence. Indian companies strengthened their hold on this

business but despite the growth that was witnessed, insurance remained an urban

phenomenon.

The Government of India in 1956, brought together over 240 private life insurers and

provident societies under one nationalized monopoly corporation and Life Insurance

Corporation (LIC) was born. Nationalization was justified on the grounds that it would

create the much needed funds for rapid industrialization. This was in conformity with the

Government's chosen path of State led planning and development.

The non-life insurance business continued to thrive with the private sector till 1972. Their

operations were restricted to organized trade and industry in large cities. The general

insurance industry was nationalized in 1972. With this, nearly 107 insurers were

amalgamated and grouped into four companies- National Insurance Company, New India

Assurance Company, Oriental Insurance Company and United India Insurance Company.

These were subsidiaries of the General Insurance Company (GIC).



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KEY MILESTONES

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate

the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended by the Insurance Act with theobjective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers along with provident societies were taken over by

the central government and nationalized. LIC was formed by an Act of Parliament- LIC

Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.



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INDUSTRY REFORMS

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously stuck to its schedule of framing regulations and registering

the private sector insurance companies. Since being set up as an independent statutory

body the IRDA has put in a framework of globally compatible regulations.

The other decision taken simultaneously to provide the supporting systems to the

insurance sector and in particular the life insurance companies was the launch of the

IRDA online service for issue and renewal of licenses to agents. The approval of

institutions for imparting training to agents has also ensured that the insurance companies

would have a trained workforce of insurance agents in place to sell their products.



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PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA

The life insurance industry in India grew by an impressive 47.38%, with premium

income at Rs. 1560.41 billion during the fiscal year 2006-2007. Though the total volume

of LIC's business increased in the last fiscal year (2006-2007) compared to the previous

one, its market share came down from 85.75% to 81.91%.

The 17 private insurers increased their market share from about 15% to about 19% in a

year's time. The figures for the first two months of the fiscal year 2007-08 also speak of

the growing share of the private insurers. The share of LIC for this period has further

come down to 75 percent, while the private players have grabbed over 24 percent.

With the opening up of the insurance industry in India many foreign players have entered

the market. The restriction on these companies is that they are not allowed to have more

than a 26% stake in a companys ownership.

Since the opening up of the insurance sector in 1999, foreign investments of Rs. 8.7

billion have poured into the Indian market and 19 private life insurance companies have

been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling

private insurance companies to sign up Indian customers faster than anyone expected.

Indians, who had always seen life insurance as a tax saving device, are now suddenlyturning to the private sector and snapping up the new innovative products on offer. Some

of these products include investment plans with insurance and good returns (unit linked

plans), multi purpose insurance plans, pension plans, child plans and money back plans.

(www.wikipedia.com)



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INTRODUCTION TO THE COMPANY

COMPANY PROFILE OF RELIANCE LIFE INSURANCE

FOUNDER

Few men in history have made as dramatic a contribution to their countrys economic

fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left

behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true

genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud

patriot, the leader of men, the architect of Indias capital markets, the champion of

shareholder interest.

But the role Dhirubhai cherished most was perhaps that of Indias greatest wealth

creator. In one lifetime, he built, starting from the proverbial scratch, Indias largest

private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of

barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he

converted this fledgling enterprise into a Rs 60,000 crore colossusan achievement

which earned Reliance a place on the global Fortune 500 list, the first ever Indian

private company to do so.



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Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when

Reliance Textile Industries Limited first went public, the Indian stock market was a

place patronised by a small club of elite investors which dabbled in a handful of

stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail

investors to participate in the unfolding Reliance story and put their hard-earned

money in the Reliance Textile IPO, promising them, in exchange for their trust,

substantial return on their investments. It was to be the start of one of great stories of

mutual respect and reciprocal gain in the Indian markets.

Under Dhirubhais extraordinary vision and leadership, Reliance scripted one of the

greatest growth stories in corporate history anywhere in the world, and went on to

become Indias largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of the ordinary

shareholder uppermost in mind, in the process making millionaires out of many of the

initial investors in the Reliance stock, and creating one of the worlds largest

shareholder families.



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ABOUT RELIANCE

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the

Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading

private sector financial services companies, and ranks among the top 3 private sector

financial services and banking companies, in terms of net worth. Reliance Capital has

interests in asset management and mutual funds, stock broking, life and general

insurance, proprietary investments, private equity and other activities in financial

services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC)

registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of

India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial services

sector in India and aims to become a dominant player in this industry and offer fully

integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limited to offer

need based Life Insurance solutions to individuals and Corporates.



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CORPORATE OBJECTIVE

At Reliance Life Insurance, we strongly believe that as life is different at every stage, life

insurance must offer flexibility and choice to go with that stage. We are fully prepared

and committed to guide you on insurance products and services through our well-trained

advisors, backed by competent marketing and customer services, in the best possible

way.

It is our aim to become one of the top private life insurance companies in India

and to become a cornerstone of RLI integrated financial services business in

India.

CORPORATE MISSION

To set the standard in helping our customers manage their financial future.



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BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY RELIANCE

LIFE INSURANCE

INSURANCE PLANS AVAILABLE

1. Products (Individual Plans)

Savings (Endowment)

2. Reliance Endowment Plan

(formerly Divya Shree)

3. Reliance Special Endowment Plan

(formerly Subha Shree)

4. Reliance Cash Flow Plan

(formerly Dhana Shree)

5. Reliance Child Plan

(formerly Yuva Shree)

6. Reliance Whole Life Plan

(formerly Nithya Shree)

Pensions

7. Reliance Golden Years Plan

(formerly Bhagya Shree)

Investments

8. Reliance Market Return Plan

(formerly Kanaka Shree)

9. Risk / Protection

10. Reliance Term Plan

(formerly Raksha Shree)

http://www.reliancelife.co.in/products/ind_REP.asphttp://www.reliancelife.co.in/products/ind_RSEP.asphttp://www.reliancelife.co.in/products/ind_RCFP.asphttp://www.reliancelife.co.in/products/ind_RCP.asphttp://www.reliancelife.co.in/products/ind_RWLP.asphttp://www.reliancelife.co.in/products/ind_RGYP.asphttp://www.reliancelife.co.in/products/ind_RMRP.asphttp://www.reliancelife.co.in/products/ind_RTP.asphttp://www.reliancelife.co.in/products/ind_REP.asphttp://www.reliancelife.co.in/products/ind_RSEP.asphttp://www.reliancelife.co.in/products/ind_RCFP.asphttp://www.reliancelife.co.in/products/ind_RCP.asphttp://www.reliancelife.co.in/products/ind_RWLP.asphttp://www.reliancelife.co.in/products/ind_RGYP.asphttp://www.reliancelife.co.in/products/ind_RMRP.asphttp://www.reliancelife.co.in/products/ind_RTP.asp


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Products (Group / Corporate Plans)

11. Risk (Protection )

Reliance Group Term Assurance Policy

(formerly Group Term Assurance Policy)

Reliance EDLI Scheme

(formerly EDLI Scheme)

12. Pensions

a. Reliance Group Gratuity Policy(formerly Group Gratuity Policy)

b. Reliance Group Superannuation Policy(formerly Group Superannuation Policy)

13. Reliance Money Guarantee Plan

Tax Benefits

INCOME TAX

SECTION

GROSS ANNUAL

SALARY

HOW MUCH

TAX CAN YOU

SAVE?

HDFC STANDARD

LIFE PLANS

Sec. 80C Across All income

Slabs

Upto Rs. 33,990

saved on

investment of

Rs. 1,00,000.

All the life insurance

plans.

Sec. 80 CCC Across all income

slabs.

Upto Rs. 33,990

saved on

Investment of

All the pension plans.

http://www.reliancelife.co.in/products/ebp_RCESP.asphttp://www.reliancelife.co.in/products/ebp_EDLI.asphttp://www.reliancelife.co.in/products/ebp_RCBP.asphttp://www.reliancelife.co.in/products/ebp_RCPP.asphttp://www.reliancelife.co.in/products/ebp_RCESP.asphttp://www.reliancelife.co.in/products/ebp_EDLI.asphttp://www.reliancelife.co.in/products/ebp_RCBP.asphttp://www.reliancelife.co.in/products/ebp_RCPP.asp


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Rs.1,00,000.

Sec. 80 D Across all income

slabs

Upto Rs. 3,399

saved on

Investment of

Rs. 10,000.

All the health insurance

riders available with the

conventional plans.

TOTAL SAVINGS

POSSIBLE

Rs37,389

Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 underSec. 80 D, calculated for a male with gross annual incomeexceeding Rs. 10,00,000.

2.2 OTHER COMPETITIORS

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIAMAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread

the message of life insurance in the country and mobilise peoples savings for nation-

building activities. LIC with its central office in Mumbai and seven zonal offices at

Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100

divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active

agents spread over the country.


Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free,

subject to the conditions laid down therein.


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The Corporation also transacts business abroad and has offices in Fiji, Mauritius and

United Kingdom. LIC is associated with joint ventures abroad in the field of insurance,

namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance

Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C.

Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit

linked life insurance and pension policies in U.K.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while

GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income

grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in

the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US).

LIC has even provided insurance cover to five million people living below the poverty

line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95

per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent.

Compounded annual growth rate for Life insurance business has been 19.22 per cent per

annum

General Insurance Corporation of India (GIC)

The general insurance industry in India was nationalized and a government company

known as General Insurance Corporation of India (GIC) was formed by the Central

Government in November 1972. With effect from 1 January 1973 the erstwhile 107

Indian and foreign insurers which were operating in the country prior to nationalization,

were grouped into four operating companies, namely, (i) National Insurance Company

Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company



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Limited; and (iv) United India Insurance Company Limited. (However, with effect from

Dec'2000, these subsidiaries have been de-linked from the parent company and made as

independent insurance companies). All the above four subsidiaries of GIC operate all

over the country competing with one another and underwriting various classes of general

insurance business except for aviation insurance of national airlines and crop insurance

which is handled by the GIC.

Besides the domestic market, the industry is presently operating in 17 countries directly

through branches or agencies and in 14 countries through subsidiary and associate

companies.

IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN

PERMITTED TO ENTER INTO INSURANCE BUSINESS: -

The introduction of private players in the industry has added to the colors in the dull

industry. The initiatives taken by the private players are very competitive and have given

immense competition to the on time monopoly of the market LIC. Since the advent of the

private players in the market the industry has seen new and innovative steps taken by the

players in this sector. The new players have improved the service quality of the

insurance. As a result LIC down the years have seen the declining phase in its career. The

market share was distributed among the private players. Though LIC still holds the 75%

of the insurance sector but the upcoming natures of these private players are enough to

give more competition to LIC in the near future. LIC market share has decreased from

95% (2002-03) to 82 %( 2004-05).

1. HDFC Standard Life Insurance Company Ltd.



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HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life

insurance companies, which offers a range of individual and group insurance solutions. It

is a joint venture between Housing Development Finance Corporation Limited (HDFC

Ltd.), Indias leading housing finance institution and The Standard Life Assurance

Company, a leading provider of financial services from the United Kingdom. Their

cumulative premium income, including the first year premiums and renewal premiums is

Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over

11,00,000 individuals out of which over 3,40,000 lives have been covered through our

group business tie-ups.

2. Max New York Life Insurance Co. Ltd.

Max New York Life Insurance Company Limited is a joint venture that brings together

two large forces - Max India Limited, a multi-business corporate, together with New

York Life International, a global expert in life insurance. With their various Products and

Riders, there are more than 400 product combinations to choose from. They have a

national presence with a network of 57 offices in 37 cities across India.

3. ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a

premier financial powerhouse and Prudential plc, a leading international financial

services group headquartered in the United Kingdom. ICICI Prudential was amongst the

first private sector insurance companies to begin operations in December 2000 after

receiving approval from Insurance Regulatory Development Authority (IRDA). The



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company has a network of about 56,000 advisors; as well as 7 banc assurance and 150

corporate agent tie-ups.

4. Om Kotak Mahindra Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak

Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

5.Birla Sun Life Insurance Company Ltd.

Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and

Sun Life financial Services of Canada.

Tata AIG Life Insurance Company Ltd.

SBI Life Insurance Company Limited

ING Vysya Life Insurance Company Private Limited

Allianz Bajaj Life Insurance Company Ltd.

Metlife India Insurance Company Pvt. Ltd.

AMP SANMAR Assurance Company Ltd.

Dabur CGU Life Insurance Company Pvt. Ltd.



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1. Royal Sundaram Alliance Insurance Company

The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram

Finance Limited started its operations from March 2001. The company is Head Quartered

at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi.

2. Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto

Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and

strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and Development

Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General

Insurance business (including Health Insurance business) in India. The Company has an

authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining

26% is held by Allianz, AG, Germany.

3. ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI

Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI



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Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified

financial corporate engaged in general insurance, reinsurance, insurance claims

management and investment management.

Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of

Canada's oldest property and casualty insurers. ICICI Lombard General Insurance

Company received regulatory approvals to commence general insurance business in

August 2001.

4. Cholamandalam General Insurance Company Ltd.

Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture

of the Murugappa Group & Mitsui Sumitomo.

Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh

policies in its first calendar year of operations. The company has a pan-Indian presence

with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune,

Indore, Ahmedabad, Delhi, Chandigarh, Kolkata and Vizag.

5. TATA AIG General Insurance Company Ltd.



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Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the

Tata Group and American International Group, Inc. (AIG). Tata AIG combines the

strength and integrity of the Tata Group with AIG's international expertise and financial

strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG

holds the balance 26 per cent stake.

Tata AIG General Insurance Company, which started its operations in India on January

22, 2001, offers the complete range of insurance for automobile, home, personal accident,

travel, energy, marine, property and casualty, as well as several specialized financial

lines.



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2.3 Reliance Policies

(1) Reliance Children Plans

What could make you happier than knowing, that your child's future is secure? Nothing,we suppose. Which is why, Reliance Life Insurance brings to you Reliance Secure ChildPlan, a unit-linked Insurance Plan, that gives you the freedom to enjoy today with yourchild, because his tomorrow is in safe hands.

Do you see your child becoming a trailblazer?

Will they create the ultimate symphony or give sports a new dimension?

Our children may just be the ones to end the arms race and wipe out poverty from theface of the Earth. But for them to be able to aim for the skies, YOU NEED TO ACT

NOW!

Introducing Reliance Secure Child Plan - a unique life insurance cum savings plan.secure the future of your child.

Key Features

Insurance cover on the life of childYour child is completely protected - we will continue to pay the premiumseven if you are not aliveLife time income to child in the event of disability

Return Shield option to protect your investment returnsLiquidity in the form of partial withdrawalsCapital guarantee available on maturity and on death of the child for basicand top-up premiumsOption to package with Accidental Death and Total and PermanentDisablement Rider, Critical Conditions Rider and Term Life InsuranceBenefit Rider.

(2)Reliance Health + Wealth Policy

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENTPORTFOLIO IS BORNE BY THE POLICYHOLDER.

There are times when late working hours take precedence over your health check-ups.And there are times when a visit to the doctor seems more important than dividends onyour shares. In the rat race to make money, we often forget to take care of ourselves.



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We understand this predicament. Here is a plan that will ensure that your wealth keepsincreasing constantly and yet your health does not take a backseat. The Reliance WealthHealth Plan. A plan that gives you the benefits of wealth bhi. health bhi.

Life changes. And as it does, so do your priorities. After all, the circumstances of your

life can determine the type of health coverage you need.

India has made rapid strides in the health sector. Since Independence, life expectancy hasgone up markedly and survival rates have also increased, still critical health issuesremain. Infectious diseases continue to claim a large number of lives.

Reliance Wealth + Health Plan, a health insurance plan underwritten by Reliance LifeInsurance Company Limited, is designed to work in conjunction with contributionstowards savings.

Key FeatureA Unit Linked plan with Unique Savings ComponentTwin benefit of market linked return and health protectionChoose from two different plan optionsFlexibility to take care of your familys healthFlexibility to switch between funds / plan optionsOption to pay Top-ups

(3) Reliance Pension Policy

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENTPORTFOLIO IS BORNE BY THE POLICYHOLDER.

Retirement means different things to different people, while some want to relax and takea trip around the world, some want to start up a venture of their own, and pursue a dreamharnessed for years. The power to make your autumn years special lies only with you.The Reliance Super Golden Years Plan gives you the power and the right kind of solution- A retirement plan that allows you to save systematically and generate the much-neededcorpus to make your olden years look golden.

Key Features Reliance Pension Policy :Invest systematically and secure your golden yearsA flexible unit-linked pension product that is different from traditional lifeinsurance products with Vesting Age between 45 & 70 yearsEight different investment funds to choose fromFlexibility to switch between fundsOption to pay Regular, Single as well as Top-up premiumsFlexibility to advance / extend your Vesting Age



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Tax free commutation up to one third of Fund Value at Vesting Age

(4) Reliance Whole life insurance policy

Youve always loved your family. As a loving person you want to be rest assured thatthey will be happy, even if something were to happen to you. With Reliance Whole LifePlan you can be sure that your family will receive that timely financial support they need.

Go ahead, live your today to the fullest, without a worry about tomorrow.

Key Features

Insurance protection till age 85Choice of extending your insurance coverage till age 99

Convenient Premium Payment TermWealth creation through bonus additionsMore value for your money by way of High Sum Assured Rebate Get SumAssured plus Bonuses in case of your unfortunate deathOption to add two Riders Critical Illness and Accidental Death Benefit andTotal and Permanent Disablement RiderPolicy Loan available after three full years premium payment



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CHAPTER III

OBJECTIVES OF STUDY

The main of the present study of is accomplish the following objective.

Proper understanding and analysis of life insurance industry.

To know about brand awareness of Kotak Life Insurance and customers

preference about Kotak Life Insurance.

According the market survey come know about how much potential of

insurance market in our city.

And base on analysis of the result thus obtained make a report on thatresearch.

Training aims at recruiting maximum number of Life Advisors and to Sell

the maximum policies for the company and bring the business for the

company which ever is going at the particular point of time.



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As the Kotak Life Insurance well reputed company in India its great

chance for me to observed different products launch by other competitor

companies like ICICI prudential, Bajaj alliance ,LIC, Max New York life

etc. In all, it is to understand the overall working of the Life insurancesector.

The objective behind the project is as follows:

To find the right candidate.

To about their family background, occupation, social relation,

Qualification, Age.

CHAPTER IV

RESEARCH

METHODOLOGY



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RESEARCH METHODOLOGY

TITLE:

To determine customer-buying behavior with a focus on market segmentation for

Reliance Life Insurance.

TITLE JUSTIFICATION:

The above title is self explanatory. The study deals mainly with studying the buying

pattern in the insurance industry with a special focus on Reliance life Insurance. The

various segments of the markets divided in terms of Insurance Needs, Age groups ,

Satisfaction levels etc will also studied.

OBJECTIVE

Objective One

To determine reasons behind opting for an insurance.

To provide the company with information of customer's Insurance policy if they

have any and reasons for opting for that particular policies.

To know the most preferred policy.

Objective Two

To determine customers perception towards private insurance companies and their

expectation form private insurance companies.

To determine the feedback on services provided by any other insurance agent.



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To study the types of benefits provided by insurance services.

To determine the use of Internet for valuable information and decision-making

process.

SCOPE OF THE STUDY

A big boom has been witnessed in Insurance Industry in recent times. A large number of

new players have entered the market and are vying to gain market share in this rapidly

improving market. The study deals with Reliance in focus and the various segments that

it caters to. The study then goes on to evaluate and analyse the findings so as to present a

clear picture of trends in the Insurance sector.

SIGNIFICANCE OF THE STUDY

SIGNIFICANCE TO THE INDUSTRY :

This is a limited study which takes into consideration the responses of 100 people. This

data can be explorated to take in the trends across the industry. The significance for the

industry lies in studying these trends that emerge from the study. It is a rapiddly changing

and evolving sector. People are only beginning to wake up to its vast possibilities. A

study like this can attempt to guide the future of the industry based on current trends.

SIGNIFICANE FOR THE RESEARCHER :

To facilitate and provide all the useful informtaion of the studt, the company, the

insurance industry and also provide marketing ways, methods of reliance life insurance.



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RESEARCH DESIGN

NON-PROBABILITY

EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH

The research is primarily both exploratory as well as descriptive in nature. The sources of

information are both primary & secondary.

A well-structured questionnaire was prepared and personal interviews were conducted to

collect the customers perception and buying behavior, through this questionnaire.

SAMPLING METHODOLOGY

SamplingTechnique:

Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot

study was done in order to know the accuracy of the Questionnaire. The final

Questionnaire was arrived only after certain important changes were done. Thus my

sampling came out to be judemental and convinent

Sampling Unit:

The respondants who were asked to fill out questionnaires are the sampling units. These

comprise of employees of MNCs, Govt. Employees, Self Employeds etc.

Sample size:

The sample size was restricted to only 100, which comprised of mainly peoples from

different regions of Delhi due to time constraints.



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Sampling Area :

The area of the research was New Delhi, India.

LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of Delhi and does not necessarily shows

a pattern applicable to all of Country.

2. Some respondents were reluctant to divulge personal information which can affect

the validity of all responses.

3. In a rapidly changing industry, analysis on one day or in one segment can change

very quickly. The environmental changes are vital to be considered in order to

assimilate the findings.



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MARKETING STRATREGIES OF THE COMPANY

SOME OF THE STRATEGIES ADOPTED BY RELIANCE LIFE

INSURANCE COMPANY.

Reliance Life Insurance plans to tap Reliance Communications' 2.5-crore telephony

subscriber base to market its products.

The company is considering a series of options to leverage its relationship with Reliance

Communications.

However, a joint product or a co-branded solution would require approval from the

Insurance Regulatory and Development Authority

Customers of R World, the information and entertainment portal of Reliance

Communications, would also be able to pay premiums through a bank account, provided

the bank is listed on the network.

Reliance Life Insurance officials, however, offered no comment when asked whether

there would be an arrangement for payment of commission to Reliance Communications.

As an alternative channel for distribution, insurance companies usually tie up with banks.

In the case of banc assurance, where there is a corporate agency tie-up, the commission

could range from 5 per cent to 40 per cent of first-year premium depending on the

commission loaded on to the product at the time of registration with IRDA.



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CHAPTER V

RESULT ANALYSIS

&



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INTERPRETATION

DATA ANALYSIS & INTERPRETATION

DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCECOMPANIES

COMPANYS NAMENO.OF

RESPONDENTSHARE (%)

L.I.C. 78 78

RELIANCE LIFE

INSURANCE3 3

ICICI PRUDENTIAL 10 10

SBI LIFE 7 7

HDFC 2 2

TOTAL 100 100



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78

3

10

7 2

LIC

REL

ICICI

SBI

HDFC

INTERPRETATION

78% of the people contacted prefer LIC policy to any other and therefore it is

ranked no.1 by that percent of respondents.

DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY

RESPONDENTS

BENEFITSNO.OF

RESPONDENTSSHARE (%)

Cover Future Uncertainty 55 55

Tax Deductions 20 20

Future Investment 25 25

TOTAL 100 100



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INTERPRETATION

55% of the respondents believe that covering future uncertainty is the biggest

benefit of an insurance policy.

Whereas, 20% and 25% of them believe that the other benefits are Tax deduction

and future investments respectively.

DATA PROVIDES FEATURES OF INSURANCE POLICY THAT

ATTRACTED RESPONDENTS

FEATURE NO.OF

RESPONDENTS

SHARE (%)

Money Back Guarantee 15 15

Larger Risk Coverance 37 37


55%

20%

25%

Cover FutureUncertainty

Tax Deductions

Future Investment


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Easy Access to Agents 7 7

Low Premium 30 30

Companys Reputation 11 11

TOTAL 100 100

FEATURES OF INSURANCE POLICY

15%

37%

7%

11%

30%

MONEY BACK

GUAARENTEE

LARGER RISK

COVERANCE

EASY ACCESS TO

AGENTS

LOW PREMIUM

REPUTATION OF

COMPANY

INTERPRETATION

Majority of the respondent (37%) found Larger risk coverance as the most

attracted feature of the all.



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DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE

RESPONDENTS

POLICY TYPE NO. OFRESPONDENTS

SHARE (%)

LIFE POLICY 75 75

NON LIFE POLICY 25 25

BOTH 45 45

NATURE OF POLICY

75

25

45

LIFE

POLICYNON LIFE

POLICY

BOTH

INTERPRETATION

75% of the respondents have Life Insurance Policy while 45% have both. (The % is

calculated out of 280 positive response)



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DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

A saving tool 81 81%

A tax saving device 74 74%

A tool to protect your family 100 100%

81

74

100

SAVING

TOOL

TAX SAVING

TOOL

FAMILY

INTERPRETATION

81% of the respondents have perception of Insurance being a saving tool.

And 74% of the respondents have perception of Insurance being a tax saving device.

But 100% of the respondents are with the view that Insurance is a tool to protect

your family.



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DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Yes 70 70%

No 30 30%

Total 100 100%

INTERPRETATION


70%

30%

Yes

No


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Of the sample size of 400 surveyed respondents 70% of the respondents are having

Insurance policy.

30% of the respondents are either not having any Insurance policy at present or their

policy is already matured.

And at present 100% of the respondents are with the view that Insurance is a tool to

protect your family.

DATA SHOWS BUYING PROCESS OF THE PEOPLE

BUYING PROCESS NO. OF

RESPONDENTS

SHARE (%)

Customer approached Insurancecompany/Agent

45 45%

Company/agent approachedcustomer

55 555

Total 100 100%


55%

45%

Customer approached Insurance company/Agent

Company/agent approached customer


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INTERPRETATION

44.5% of the respondents approached the Insurance Company / Agent.

Whereas, 55.5% of the respondents were approached by the Company /Agent.



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DATA SHOWS REASONS BEHIND FOR INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Tax saving 80 80%

Saving / Investment 80 80.%

Family protection 100 100%

INTERPRETATION

80.71% of the Respondents opted for Insurance for tax saving benefits.

80.71% of the Respondents opted for saving / Investments.

But all of them, i.e. 100% of the respondents have opted for insurance for their

family protection.


80

100

80

Slice 1 Slice 2 Slice 3


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DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO

POLICY

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Satisfied 60 60%

Not satisfied 40 40%

Not Responded 0 0.0%

Total 100 100%

INTERPRETATION

60% of the respondents are more or less satisfied with their existing policy.

40% of the respondents are not satisfied with their existing policy.

In this case all of those who have taken a policy have responded.


0%

40%

60%

Satisfied Not satisfied Not Responded


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DATA SHOWS SATISFACTION OF +RESPONDENTS WITH RESPECT TO

SERVICE AGENT

RESPONSE NO. OFRESPONDENTS

SHARE (%)

Satisfied 45 45%

Not satisfied 55 55%

Not Responded 0 0.0%

Total 100 100%

INTERPRETATION

45% of the respondents are satisfied with their existing service agent.

55% of the respondents are not satisfied with their existing insurance agent.

All of those who have taken a policy have responded.


55.00%45.00%

Satisfied Not satisfied


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DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Paying tax 100 100%

Not paying tax - 0%

Total 100 100%

INTERPRETATION

Of the sample size of 400 respondents, all the respondents are paying tax.


0%

100%

Paying tax Not paying tax


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DATA SHOWS RESPONDENTS INVESTMENTS FOR TAX SAVING

INVESTMENTS NO. OF

RESPONDENTS

SHARE (%)

LIC 51 51%

NSC 33 33%

Bonds 32 32%

PPF 25 25%

PF 21 21%

EPF 11 11%

INTERPRETATION

51% of the respondents save their tax by investing in LIC, which is the highest

among all Investment. This shows that most people for getting taxes benefits invest

in LIC.

33.25% of the respondents do their tax saving by investing in NSC.

32.25% of the respondents to their tax saving by investing in bonds.


33

32

25

2151

LIC NSC BOND PPF PF EPF


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DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OFINVESTMENT FOR SECURING THEIR FUTURE

NO. OF

RESPONDENTS

SHARE (%)

Fixed Assets 75 75%

Bank deposits 11 11%

Jewellery 25 25%

Securities i.e. bonds, MFs 40. 40%

Shares 10 10%

Insurance 70 70%

INTERPRETATION

75.25% of the respondents as with the view that Fixed Assets is the best form of

investment for securing their future.


11

2540

10

7075

Fixed Assets

Bank deposits

Cash &

JewellerySecurities i.e.

bonds, MFsShares

Insurance


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70.5% of the respondents are with the perception that Insurance is the best form of

investment for securing their future, which is one of the highest and this shows that

insurance is an important key for securing your future.

DATA SHOWS WHAT PEOPLE INTENT TO GAIN FROM THEIR

INVESTMENT

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Saving & Returns 100 100%

Security 90 90%

Tax benefits 71. 71.%

INTERPRETATION


90

71

100

Saving & Returns Security Tax bene fits


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100% of the respondents intent to gain saving and returns from their investment.

90% of the respondents intent to gain security from their investments.

Whereas, 71.75% of the respondents intent to gain tax benefits from their

investments.

DATA GIVES PEOPLES PERCEPTION ON APPROPRIATE AGE FOR

BUYING INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

After 25 years 29 29%

After 35 years 10 10%

After 45 years 0 0%

Anytime 60 60%



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INTERPRETATION

29% of the respondents are with the view that insurance should be bought after the

age of 25 years.

10.5% of the respondents are with the view that insurance should be buyed after the

age of 35 years.

Whereas, 60.5% of the respondents are with the view that buying of insurance do not

have any thing to do with age i.e. there is no age limitations. It can be purchased any

time according to the need.


0%

29%

10.10%60.61%

After 25 years After 35 years After 45 years Anytime


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DATA SHOWS PEOPLE OPINION ABOUT INDIAN INSURANCE

COMPANIES

RESPONSE NO. OFRESPONDENTS

SHARE (%)

Rigid plans 67 67%

Non user friendly 29 29%

Unsatisfactory services 26 26%

Non Aggressive 35 35%

Satisfactory 24 24%

Good 10 10%

Very good 0 0%

INTERPRETATION


2926

24

10 0

Inflexible plans Non user friendly

Unsatisfactory services Non AggressiveSatisfactory GoodVery good


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67% of the respondents have the opinion that Indian Insurance Companies have

Rigid plans.

29.5% feel that Indian Insurance companies are Non-user friendly.

26.5% feel that services of Indian Insurance companies are Unsatisfactory.

35.75% of the respondents are with the view that Indian Insurance companies are

Non-aggressive.

24% of the respondents feel that products and services of Indian Insurance

companies is Satisfactory.

Whereas only 10.25% feel that it is Good enough.

And according to the data, no single person has felt that it is very good.



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DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE

COMPANY

RESPONSE NO. OFRESPONDENT

S

SHARE (%)

A trusted name 82 82%

Friendly service &responsiveness

71 71%

Good plans 81 81%

Accessibility 49 49%

INTERPRETATION

82% customers look for a Trusted name in a company for insurance.

81.5% customers look for a good plan in a company for insurance.


71

81

49

82

A trusted name

Friendly service & responsiveness

Good plans

Accessibility


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Friendly service & responsiveness and Accessibility are also important factors

looked by customers in a company.

DATA SHOWS PEOPLE PLANNING FOR NEW INVESTMENTS

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Planning 87 87%

Not planning 13 13%

Total 100 100%

INTERPRETATION

Only 12.5% of the customers contacted are not planning for new investments

presently.

Whereas, 87.5% of the customers are still planning for new investments this can be a

great potential for Reliance Life Insurance to take them on their favor.


87.0%

13.0%

Planning Not planning


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DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A

SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER

SERVICE & PRODUCTS

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Yes 43 43%

No 44 44%

Uncertain 13 13%

Total 100 100%

INTERPRETATION

The interested customers i.e. 43% are ready to go for insurance even away from a city if

services and products are worthwhile, which again is a good prospect (potential) for

Reliance Life Insurance to take them on their favor.


43%

44%

13%

Yes No Uncertain


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CHAPTER VI

CONCLUSION

CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some interesting trends

which can be seen in the above analysis. A general impression that we gathered during

Data collection was the immense awareness and knowledge among people about various

companies and their insurance products. People are beginning to look beyond LIC for



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their insurance needs and are willing to trust private players with their hard earned

money.

People in general have been impression by the marketing and advertising campaigns of

insurance companies. A high penetration of print , radio and Television ad campaigns

over the years is beginning to have its impact now.

The general satisfaction levels among public with regards to policy and agents still

requires improvement. But therein lays the opportunity for a relative new comer like

ING. LIC has never been known for prompt service or customer oriented methods and

Reliance can build on these factors.

CHAPTER VII

SUGGESTION



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Suggestion

According the survey only 42% people are insured in Alwar so reaming

other part is potential for insurance sector.

Among that 42% people who having insurance, they have insurance 40%

for self 28%for spouse 21% for children and 18% for their parents and

11% for all family member, also its very help full for insurance sector so

they should take necessary step for capture this potential.

Only 42% people having insurance in Alwar in that 42% there are 82 %

people are under insured and other 18% people are fully insured according

to their income so that is also plus point for insurance sector to capture the

market



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CHAPTER VIII

QUESTIONNAIRE

QUESTIONNAIRE

1. ARE YOU EMPLOYED?

YES NO

If YES, only then proceed

2. DO YOU HAVE ANY INSURANCE POLICY?

YES NO

3. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE NON-LIFE BOTH

4. WHICH COS INSURANCE POLICY YOU PREFER THE MOST?(RANK THEM)

a) LIC

b) ICICIPRUDENTIAL

c) SBI LIFE INSURANCE

d) ING VYSYA LIFE

e) RELIANCE LIFE INSURANCE

f) TATA AIG LIFE

g) ANY OTHER ________( Specify)



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5. FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY?

(Please Tick)

a)


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a) A SAVING TOOL

b) A TAX SAVING DEVICEc) A TOOL TO PROTECT FUTURE

11. HOW HAS/WOULD YOU BOUGHT/BUY AN INSURANCE?

a) CUSTOMER APPROCHED INSURANCE COs

b) INSURANCE COs APPROCHED CUSTOMER

12. AREYOU SATISFIED WITH THE POLICY?

a) SATISFIED SAVING TOOL

b) NOT SATISFIEDc) NOT RESPONDING

13. ARE YOU SATISFIED WITH THE SERVICE AGENT?

a) SATISFIED SAVING TOOL

b) NOT SATISFIEDc) NOT RESPONDING

14 DO YOU PAY TAXES?

YES NO

15. WHERE HAVE YOU INVESTED FOR TAX SAVING?

(RANK THEM)

a) LIC

b) NSC



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c) BONDS

d) PPF

e) PF

f) EPF

16.WHICH IS THE BEST FORM OF INVESTMENTS?

(RANK THEM)

a) FIXED ASSETS

b) BANK DEPOSITS

c) JEWELLERY

d) SECURITIES, i.e. Bonds, MFs

e) SHARES

f) INSURANCE



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17. WHAT DO YOU INTENT TO GAIN FROM INVESTMENTS?

a) SAVING & RETURNS

b) SECURITY

c) TAX BENIFITS

18. WHATS THE RIGHT AGE TO BUY INSURANCE?

a) AFTER 25 Yrs

b) AFTER 35 Yrs

c) AFTER 45 Yrs

d) ANYTIME

19.HOW WOULD YOU RATE INDIAN INSURANCE COs?

a) RIGID PLANS

b) NON-USER FRIENDLY

c) UNSATISFATORY SREVICES

d) NON-AGGRESSIVE

e) SATISFACTORY

f) GOOD

g) VERY GOOD



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20.ARE YOU PLANNING FOR NEW INVESTMENTS?

PLANNING NOT PLANING

21. WOULD YOU GO FOR INSURANCE IF A SERVICE PROVIDER AWAY

FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS?

a) YES

b) NO

c) UNCERTAIN



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BIBLIOGRAPHY

1. BOOKS/MAGAZINES REFFERED:

STUDY GUIDE- PRINCILES & PRACTICES OF LIFE /

GENERALINSURANCE, by AIMA.

Books published by INSURANCE INSTITUTE OF INDIA

LIFE-INSURANCE, by Mc GILL

INSURANCEWATCH.

MONEYOUTLOOK.

2. WEBSITES REFFERED:

WWW.RELIANCELIFE.CO.IN

WWW.CIFAINSURANCE.COM

WWW.MONEYOUTLOOK.COM

WWW.INSURANCE.IND.COM

3. REPORTS/ARTICLES REFFERED:

REPORT: ISSUES & CHALLENGES FACING THE INSURANCE

INDUSTRY. Dec2005.

BRIEF PROFILE OF LIC, INDIADec 2006.

REPORT: COPING WITH COMPETITIONJan2007
http://www.cifainsurance.com/http://www.moneyoutlook.com/http://www.insurance.ind.com/http://www.cifainsurance.com/http://www.moneyoutlook.com/http://www.insurance.ind.com/

Documents

Investor Behaiour Toward Reliance Life Insurance Policies