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as also rewards with bonuses. Life Insurance has come a long way from the earlier days when it

was originally conceived as a risk-covering medium for short periods of time, covering

temporary risk situations, such as sea voyages.

Therefore after going through the discussion let us summarize our points and understand theneed of life insurance:

a) Temporary needs / threats

The original purpose of life insurance remains an important element, namely providing for

replacement of income on death etc.

b) Regular Savings / Family Protection

Providing for one's family and oneself, as a medium to long-term exercise (through a series of

regular payment of premiums). This has become more relevant in recent times as people seek

financial independence for their family.

c) Investment

Put simply, the building up of savings while safeguarding it from the ravages of inflation. Unlike

regular saving products, investment products are traditionally lump sum investments, where the

individual makes a one off payment.

d) Old age provision

Provision for later years becomes increasingly necessary, especially in a changing cultural and

social environment. One can buy a suitable insurance policy, which will provide periodical

payments in one's old age.

e) Children benefit

Provision for the education, marriage and start in life for the children.

f) Special needs provision

Protection against loss arising out of accident, disability, sickness, loan repayment on death.


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WHY IS INSURANCE SUPERIOR TO OTHER FORM OF SAVINGS?

An immediate estate is created in favor of the policyholder.

Protection in case of death.

Liquidity in case of need easy loans are available.

Tax relief income tax, wealth tax etc..

Policies can be offered as collateral security.

Policies can be taken under M.W.P. Act 1874, to protect against creditors.

Let us take an example to understand the need for insurance:

Mr. Atul is 45 and self-employed. His wife Nandini, who is a housewife, looks after their two

children aged 3 and 7 years. They stay in a rented accommodation, where the rent is 15,000

rupees per month. Mr. Atul has taken up a loan of Rs. 2 lakh. His monthly earnings on average

are 40,000 rupees. Mr. Atul passes away in an unfortunate road accident. What are some of the

financial implications of his death on his family?

There may be several financial implications on his family. Some of these are:

a) The monthly income, previously provided by Mr. Atul would stop.

b) His wife and children may have to seek financial assistance from other relatives.

c) His wife may not have enough money to pay back the loan of Rs. 2 lakhs.

d) The family may have to move into a cheaper accommodation.

e) His widow may have to take up work to earn money.

f) The education of his children may suffer.

This simple example illustrates the impact premature death can have on a family, where the main

earner has no life cover.


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Had Mr. Atul taken life cover, his family would not have faced such hardships in the event of his

unfortunate death. A simple life insurance policy could have provided Mr. Atul's family with a

lump sum that could have been invested to provide an income equal to all or part of his income.

In simple words, insurance protects against untimely losses. Insurance has been found useful inthe lives of persons both in the short term and long term. Short term needs like sudden medical

costs and long-term needs like marriage expenses etc can be met with using life insurance.


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LIFE INSURANCE NEEDS AT VARIOUS LIFE STAGES

The need for life insurance changes as ones life changes. When one is young, one typically has

no need for life insurance, but this changes as one take on more responsibility, and as ones

family grows. Then, as responsibilities once again begin to diminish, one need for life insurance

drops off. Let's look at how life insurance needs change throughout ones lifetime.

School days

Childhood is typically a time of no worries, no cares, and no responsibilities. A child depends on

others to take care of them, not the other way around. Although it would be tragic, a child's death

would likely have little financial impact on the child's family. Thus, there is generally no need

for life insurance at this point in an individual's life.

A child's death does create one short-term financial problem: funeral expenses. But buying a life

insurance policy just for that purpose doesn't really make sense. Instead, think about saving the

money one would spend on insurance premiums and open a savings account, or put the money in

some type of investment vehicle. That way, the money can be used for college expenses or a first

home, but it will also be available in case of a tragedy. Alternatively, a burial policy provides

enough money for funeral expenses, at a much lower cost than a typical life insurance policy.

For growing family

When one has young children, the life insurance needs reach a climax. In most situations, life

insurance for both parents is appropriate.

Single-income families are completely dependent on the income of the breadwinner. If he or she

dies without life insurance, the consequences could be disastrous. The death of the stay-at-home

spouse would necessitate costly daycare expenses. Both spouses should carry enough life

insurance to cover the expenses that would result from their death.

Dual-income families need life insurance, too. If one spouse dies, it is unlikely that the surviving

spouse will be able to keep up with the household expenses and pay for childcare with the

remaining income.


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Moving up the ladder

For many people, career advancement means starting a new job with a new company. At some

point, one might even decide to be ones own boss and start his own business. It might not be the

top priority, but it is important to review the life insurance coverage any time one leave anemployer.

Keep in mind; one probably won't be able to keep any life insurance that was provided by ones

employer. If one is going to work for a new company, one might receive a comparable life

insurance benefit. But if one is going into business for him, one will need to purchase an

individual life insurance policy.

Make sure the amount of ones coverage is up-to-date, as well. The policy one purchased rightafter getting married might not be adequate anymore, especially if one has kids, a mortgage, and

college expenses to consider. Business owners may also have business debt to consider. If one is

not incorporated, ones family would have to pay those bills if one die.

Single again

Unfortunately, divorce has become a fact of life in our society. One will have to make many

financial decisions during this stressful time, including the decision of what to do about ones life

insurance. Divorce raises both beneficiary issues and coverage issues. And if one has children,

these issues become even more complex.

If one and his spouse have no children, it may be as simple as changing the beneficiary on ones

policy and adjusting ones coverage to reflect ones newly single status. However, if one has kids,

one will want to make sure that they are provided for in the event of ones death. This may

involve purchasing a new policy and naming them as beneficiaries. The custodial and

noncustodial parent will need to work out the details of this complicated situation. If one can'tcome to terms, the court may make the decisions for you.

The golden years

Once the children are grown, the life insurance needs decrease. One will live off his retirement

savings, and hopefully one has accumulated assets that can be passed on to his heirs when he or


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she dies. Not only is life insurance expensive at this point, but it's probably unnecessary.

Life Insurance is a contract for payment of a sum of money to the person assured (or failing

him/her, to the person entitled to receive the same) on the happening of the event insured against.

Usually the contract provides for the payment of an amount on the date of maturity or atspecified dates at periodic intervals or at unfortunate death, if it occurs earlier. Among other

things, the contract also provides for the payment of premium periodically to the Corporation by

the assured. Life insurance is universally acknowledged to be an institution which eliminates

'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the

unfortunate event of death of the breadwinner. By and large, life insurance is civilisation's partial

solution to the problems caused by death. Life insurance, in short, is concerned with two hazards

that stand across the life-path of every person: that of dying prematurely leaving a dependent

family to fend for itself and that of living to old age without visible means of support.


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Distribution Scenario in the Indian market

In today's Indian insurance market, the challenge to insurers and intermediaries is two-pronged:

Building faith about the company in the mind of the client

Intermediaries being able to build personal credibility with the clients

Traditionally tied agents have been the primary channels for insurance distribution in the Indian

market; the public sector insurance companies have their branches in almost all parts of the

country and have attracted local people to become their agents. The agents are from various

segments in society and collectively cover the entire spectrum of society. A person who has livedin the locality for many years sells the products of the insurance company with a local branch

nearby. This ensures the last mile touch point being closer to the customer. Of course, the profile

of the people who acted as agents suggests they may not have been sufficiently knowledgeable

about the different products offered, and may not have sold the best possible product to the

client. Nonetheless, the customer trusted the agent and company. This arrangement worked

adequately in the absence of competition.

In today's scenario agents continue as the prime channel for insurance distribution in India, as isthe case in most markets, supported by call centers to a small extent. Almost all the new players

follow this model primarily because the regulations for other channels are yet to be put in place.

However there is great excitement in the industry over the impending broker regulations, and

companies are planning possible channels in their enthusiasm to increase volumes. The belief

that all these channels will grow and seamlessly integrate to bring in business seems a fallacy.

What has emerged is a much more difficult and evolving market scene with existing players,more new players coming in, and global marketing practices and ideas being tested. But none of

this has changed the fundamental character of the market, which we believe will take more time

than expected.


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Public Sector Companies Private Sector Companies

Identity is well established, but the

perception of " poor service providers"

is a stigma.

Have to build their identity in a market

where the public does not distinguishthem.

Products are not attractive and flexible

enough but expensive.

Remove the perception that anythingthat looks good is expensive

To retain their creamy layer clientele

who are the most likely to be wooed by

the new companies

Work against the people's mindset thatthey are not here for the long term

Retain and attract good intermediaries Attract intermediaries especially agentswith the requisite qualifications andattributes who can market the companyand the product.

Match the aura created by the new

companies in the urban market

Run the risk of tapping an alreadyinsured market for repeat insuranceinstead of tapping new virgin pocketsin the market

In this process all are targeting the same market --the existing pie is being cut up further, but no

attempt is being made to increase the size of the pie. For example, while attempts are made to

complete the quota of rural insurance in percentage terms, the rural market potential is yet to be

tapped, as the new insurers are not able to attract the right kind of talent into their distribution

force to address this. Intelligent segmentation of distribution channels to match the market

segmentation is what will help the companies to move in this direction.

Focus on multiple distribution channels

Though a multi-channel strategy is better suited for the Indian market as well, it is important to

keep in mind that this market is really a conglomeration of multiple markets. Each of the markets

within this conglomeration requires a different approach. Apart from geographical spread the

socio-cultural and economic segmentation of the market is very wide, exhibiting different traits

and needs. Let us look at the various insurance distribution channels and the challenges faced by


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them from these perspectives.

Agents

Today's insurance agent has to know which product will appeal to the customer, and also know

his competitor's products in the same space to be an effective salesman who can sell his

company, the product, and himself to the customer. To the average customer, every new

company is the same. Perceptions about the public sector companies are also cemented in his

mind.

The new companies are looking for educated, aware individuals with marketing flair, an elite

group who can be attracted only with high remuneration and the lure of a fashionable job, all of

which may not be possible in this business with its price pressures and the complexity of sellinginsurance. Unable to attract this segment, they have started easing recruitment conditions as

against the stringent norms they had earlier, thereby diluting the process.

While the public sector companies are able to attract agents, they continue to suffer from high

attrition rates due to indiscriminate agent appointment. The most successful of these companies'

tied agents are hardly of the elite variety of salesman. They are still the neighborhood do gooders

-- the postman, the schoolteacher, and the shopkeeper -- who know the people and are

themselves known in the community. The challenge here is the lack of knowledge of thecompetitive market and the inability to do intelligent comparisons with the competitor's products.

Educating and training these agents is a serious challenge for the insurance company.

The relevance of this kind of agent continues even today as agents are sought or contacted by

families by word of mouth. Insurance companies are advised not to follow the path of

FMCG's/credit card companies, believing that a suited and booted customer care consultant or

financial consultant will necessarily appeal to the average Indian customer.

Another social feature in the market is the considerable respect for age in Indian society and a

belief that an older person knows better. A very young up-market agent who is a typical

salesman may not appeal to a large segment of the middle class, which is looking for a solid

trustworthy person from whom they can buy insurance.


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In this context it might be a rewarding exercise to recruit some older people (who have taken

VRS from banks and other financial institutions) to sell some lines of products like pension

plans, annuities etc.

Gender of agents is another relevant feature in the rural context that makes a difference,especially for the female population. Women to whom the customers can relate --e.g., nurses,

gram sevikas -- can target the female segment of the population more effectively. What is

applicable for the rural women and children health programs and population control programs is

equally applicable for insurance selling also. Max New York Life has adopted a version of this

strategy by appointing gram sahayaks to sell and service the rural customers.

With this kind of segmentation of intermediaries the challenge for the insurance company lies in

training and educating these people to become effective sales persons. But this in no way

diminishes the benefits of intermediary segmentation.

ICICI Prudential Insurance and HDFC Standard Life Insurance have already partnered with

NGOs to sell some low cost insurance in rural areas. However, the challenge lies in establishing

regulations that protect the customer and attract the right players into the brokerage market rather

than creating another middlemen segment eroding the premium.

Internet

Though India is joining the fast growing breed of net users, using net for transactions has not yet

caught up. Though a few banks provide online banking, the usage is still a small fragment. The

insecurity associated with transactions over the net is still an inhibiting factor. At present most of

the insurance companies have product information and/or illustrative tools on the web.

We do not see the web evolving into a means for direct selling of insurance in the current

scenario. In the Indian market, where insurance is sold after considerable persuasion even after face-to-face selling, the selling over the net, which must be initiated by the client, would take

some more time.

While the technology capability is there, improvements in bandwidth and infrastructure are

needed. Also needed are simpler products where auto-underwriting is feasible. Automobile


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insurance, one of the segments of insurance purchased "off the shelf" in India, would be the ideal

segment to start with. On the life side, term assurance for standard lives with simplified

underwriting is a possibility.

These channels by themselves will not be able to overcome the mindset of the people, but rather can only be enablers for the human channels.

Invisible Insurer

In this model, the insurance company or its representative is not the entity marketing the

products. The insurance cover is sold by an automobile /credit card company as an add-on

product leveraging the brand of the retailer. The risk is carried by the insurance company, which

underwrites it. Products like creditor insurance, automobile insurance, and credit card relatedinsurance could be distributed using this channel. This model can be adopted in all market

segments for the lines of business mentioned.

Price Considering, the huge, untapped market in India, many companies use price as a tool to

penetrate the market. Moreover, the tough competition compels them to do so.


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NEED FOR LIFE INSURANCE

The need for life insurance comes from the need to safeguard our family. If you care for your

familys needs you will definitely consider insurance. Today insurance has become even more

important due to the disintegration of the prevalent joint family system, a system in which a

number of generations co-existed in harmony, a system in which a sense of financial security

was always there as there were more earning members. Times have changed and the nuclear

family has emerged. Therefore you need to save a part of income for the future too.

This is where insurance helps us.

Factors such as fewer numbers of earning members, stress, pollution, increased competition,higher ambitions etc are some of the reasons why insurance has gained importance and where

insurance plays a successful role.

Insurance provides a sense of security to the income earner as also to the family. Buying

insurance frees the individual from unnecessary financial burden that can otherwise make him

spend sleepless nights. The individual has a sense of consolation that he has something to fall

back on.

From the very beginning of your life, to your retirement age insurance can take care of all your

needs. Your child needs good education to mould him into a good citizen. After his schooling he

need to go for higher studies, to gain a professional edge over the others - a necessity in this age

where cutthroat competition is the rule. His career needs have to be fulfilled.

Insurance is a must also because of the uncertain future adversities of life. Accidents, illnesses,

disability etc are facts of life, which can be extremely devastating. Disability can be taken care of

by insurance. Your family will not have to go through the grind due to your present inability.

Moreover, retirement, an age when every individual has almost fulfilled his responsibilities and

looks forward to relaxing can be painful if not planned properly. Have we considered the

increasing inflation and taxes? Will our investment offer us attractive returns under such

circumstances? Will it take care of our family after us? An insurance policy will definitely take

care of these and a lot more. Insurance has become a necessity today. It provides timely financial


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as also rewards with bonuses. Life Insurance has come a long way from the earlier days when it

was originally conceived as a risk-covering medium for short periods of time, covering

temporary risk situations, such as sea voyages.

Therefore after going through the discussion let us summarize our points and understand theneed of life insurance:

a) Temporary needs / threats

The original purpose of life insurance remains an important element, namely providing for

replacement of income on death etc.

b) Regular Savings / Family Protection

Providing for one's family and oneself, as a medium to long-term exercise (through a series of

regular payment of premiums). This has become more relevant in recent times as people seek

financial independence for their family.

c) Investment

Put simply, the building up of savings while safeguarding it from the ravages of inflation. Unlike

regular saving products, investment products are traditionally lump sum investments, where the

individual makes a one off payment.

d) Old age provision

Provision for later years becomes increasingly necessary, especially in a changing cultural and

social environment. One can buy a suitable insurance policy, which will provide periodical

payments in one's old age.

e) Children benefit

Provision for the education, marriage and start in life for the children.

f) Special needs provision

Protection against loss arising out of accident, disability, sickness, loan repayment on death.


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WHY IS INSURANCE SUPERIOR TO OTHER FORM OF SAVINGS?

An immediate estate is created in favor of the policyholder.

Protection in case of death.

Liquidity in case of need easy loans are available.

Tax relief income tax, wealth tax etc..

Policies can be offered as collateral security.

Policies can be taken under M.W.P. Act 1874, to protect against creditors.

Let us take an example to understand the need for insurance:

Mr. Atul is 45 and self-employed. His wife Nandini, who is a housewife, looks after their two

children aged 3 and 7 years. They stay in a rented accommodation, where the rent is 15,000

rupees per month. Mr. Atul has taken up a loan of Rs. 2 lakh. His monthly earnings on average

are 40,000 rupees. Mr. Atul passes away in an unfortunate road accident. What are some of the

financial implications of his death on his family?

There may be several financial implications on his family. Some of these are:

a) The monthly income, previously provided by Mr. Atul would stop.

b) His wife and children may have to seek financial assistance from other relatives.

c) His wife may not have enough money to pay back the loan of Rs. 2 lakhs.

d) The family may have to move into a cheaper accommodation.

e) His widow may have to take up work to earn money.

f) The education of his children may suffer.

This simple example illustrates the impact premature death can have on a family, where the main

earner has no life cover.


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Had Mr. Atul taken life cover, his family would not have faced such hardships in the event of his

unfortunate death. A simple life insurance policy could have provided Mr. Atul's family with a

lump sum that could have been invested to provide an income equal to all or part of his income.

In simple words, insurance protects against untimely losses. Insurance has been found useful inthe lives of persons both in the short term and long term. Short term needs like sudden medical

costs and long-term needs like marriage expenses etc can be met with using life insurance.


24/90

BENEFITS FROM LIFE INSURANCE

It is superior to a traditional saving vehicles

It encourages saving and forces thrift

It provides easy settlement and protection against creditors

It helps to fulfill the purpose of the life assured

It can be encased and facilitates borrowing

Tax relief


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OBJECTIVE OF RESEARCH

The objective of the research is divided into two folds:

1) To analyse the changing scenario of HDFC Standard Life Insurance Company and to do

the comparative analysis of LIC with the ICICI Prudential

2) To devise the marketing strategy of HDFC Standard Life Insurance Company so as to

further increase its market share.


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RESEARCH METHODOLOGY:

The dissertation is based on the data collected through the secondary sources. The

data collected through the secondary sources are books, magazines, newspaper andInternet.

The methodology that is being adopted is basically a descriptive research .


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TYPES OF INSURANCE POLICIES

Though there are a lot of policies available in the market under different names and bydifferent companies, the policies can broadly be classified into the following

categories:

Term Insurance Policy

Whole Life Policy

Money Back Policy

Endowment Policy

Pension Plans Or Annuities

TERM INSURANCE POLICY

Term insurance provides life insurance coverage for a specific period of t ime.

Presently one year, five year, ten year, and fifteen year, are the periods one can buy

term life insurance policy. If the insured person dies during the period the insurance is

in force, the insurance company pays off the face value of the policy. If the insured

lives longer than the term of the policy, the policy is no longer in effect and nothing is

paid.

Term insurance is the least expensive form of life insurance. It is commonly used when the

insured needs temporary protection or cant afford the premiums for the other forms of life


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insurance. The other reason an insured may want term insurance is to purchase life insurance and

invest the difference between the term policy and cash value policy elsewhere.

Term insurance comes in several forms. There is renewable & non renewable. Non

renewable means that on the expiry of your policy you must go under another physical test and

filling out another questionnaire. On the other hand, with renewable policy you dont need to

undergo these formalities again and you automatically re qualify to continue your policy.

Then there is convertible & non convertible policy. Convertible policy is the one which can be

converted into a permanent policy, whereas non convertible is the one which cannot be

converted into a permanent policy or in other words the policy cannot be converted to any other

form of life insurance policy.

WHOLE LIFE POLICY

The whole life policy provides insurance coverage for the entire life of the insured

regardless of how many years the insurance is paid. Premiums may be paid throughout

the insureds entire life or for a portion of his life. Additionally, the premium can be

paid in one lump sum when the policy is taken out. This is referred to as a single

premium whole life policy.

When the premium is paid through out the life it is known as straight life policy, but when the

premium is paid for a specified period of time it is known as limited life policy.

The premiums are higher for Whole life insurance as opposed to term insurance. The reason for

this is that the policy has investment features as well as death benefits. The cash value portion of

the whole life insurance belongs to the insured. One can take it out in the form of policy loans or

can cash the policy in. Another advantage of whole life insurance is that the premiums are fixed,

i.e. regardless of your age, you pay the same amount for the coverage each year.


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UNIVERSAL LIFE INSURANCE POLICY

Universal life insurance is a variation of Whole Life. The difference is that with Universal Life

the insurance part of the policy is separated from the investment portion of the policy. The cashvalue portion of the policy is treated as an accumulation fund and investment income is credited

to the accumulation fund.

MONEY BACK POLICY

Money back policies provide for periodic payments of partial survival benefits duringthe term of the policy, as long as the policyholder is alive.

An important feature of this type of policies is that in the event of the death at nay

time within the policy term, the death claim comprises the full sum assured, without

deduction of nay of any of the survival benefit amounts, which may have already been

paid as money back components. Similarly the bonus is also calculated on the entire

sum assured.

ENDOWMENT POLICY

An endowment policy covers the risk for a specified period, at the end of which the

sum assured is paid back to the policyholder, along with the bonus accumulated during

the term of the policy. This feature of payment of endowment to the policyholder when the policys term is complete is responsible for the popularity of endowment

policies.

The amount received on maturity can either be utilized either to buy an annuity policy to

generate a monthly pension for the rest of the life, or put it into any other suitable investment of


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our choice. This is one important benefit, which the endowment policy offers over a whole life

insurance policy.

Overall, endowment policies are the most suitable of all insurance plans for covering the risks to

a family breadwinners life. Not only do these policies provide financial risk cover for thefamily, were the policyholder to die prematurely but the insurance amount is also repaid once

this risk is over. The endowment amount can then be used for meeting major expenditures such

as childrens education and marriage, etc.

Alternately, the endowment sum is available for a suitable investment geared to providing an

income for the remainder of ones own life. These types of plans are particularly suitable to those

who other than having a risk cover are also interested in a savings component simultaneously.

PENSION PLAN OR ANNUITIES

An annuity is an investment that we make, either in a single lump sum or through installments

paid over a certain number of years, in return for which we receive a specific sum every year,

every half year or every month, either for whole life or a fixed number of years.

After the death of an annuitant, or after the fixed annuity period expires for annuity payments,

the invested annuity fund is refunded, perhaps along with a small addition, calculated at that

time. Annuities differ from all the other form of life insurance in one fundamental way an

annuity does not provide any life insurance cover but instead offers a guaranteed income either

for life or a certain period.

Typically annuities are bought to generate income during ones retired life, which is why they

are also called pension plans. Annuity premiums and payments are fixed with reference to the

duration of human life.

Kind Of Policy

Broad Definition When Received


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Term Policy Like whole life but offers risk

cover for defined periods.

Risk cover in case of

death within term of

policy.

Whole life Policy Allows risk cover for whole life.

Premiums are paid throughout

life.

Received only at the time

of death of life assured.

Money Back Policy Allows planning return of sum

assured as lump sum after defined

intervals of time.

Received at fixedintervals during the termof the policy.

Endowment Policy Available for a period and life.

Sum assured may be paid in case

of death within the term of the

policy.

Either on maturity or in

the event of death of the

insured, whichever is

earlier the sum assured

plus the bonus is

received by the beneficiary.


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Pension Plans Or

Annuities

Installments paid for certain years

and in turn a specific sum is

received every year or month.

Either on the death of theannuitant or on expiry of the fixed annuity period.


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VARIOUS PRIVATE LIFE INSURANCE COMPANIES IN INDIA

Presently there are 12 Life Insurance companies operating in the market. These are:

1) HDFC Standard Life Insurance company

2) ICICI Prudential Life Insurance company

3) Birla Sunlife Insurance company

4) TATA AIG Life Insurance Company

5) OM Kotak Mahindra Life Insurance company

6) MAX New York Life Insurance company

7) Allianz Bajaj Life Insurance company

8) ING Vysya Life Insurance company

9) Met Life India Insurance company Pvt. Ltd

10) Aviva Life Insurance company Pvt. Ltd

11) AMP Sanmar Assurance Company Ltd

12) Sahara India Life Insurance Company


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PENETRATION OF INSURANCE IN VARIOUS COUNTRIES

(YEAR 2005-06)

COUNTRIES INSURANCE PENETRATION

(PREMIUMS AS A % OF G.D.P)

U.S 4.58

U.K 8.82

BRAZIL 1.58

RUSSIA 1.62

INDIA 2.86

CHINA 2.50

LIFE INSURANCE CORPORATION


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The Life Insurance Corporation (LIC) was established about 44 years ago with a view to provide

an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a

monopoly status and became synonymous with life insurance.

Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six lakhagency force.

LIC has hundred divisional offices and has established extensive training facilities at all levels.

At the apex, is the Management Development Institute, seven Zonal Training Centres and 35

Sales Training Centres.

At the industry level, along with the Government and the GIC, it has helped establish the

National Insurance Academy. It presently transacts individual life insurance businesses, group

insurance businesses, social security schemes and pensions, grants housing loans through its

subsidiary; and markets savings and investment products through its mutual fund. It pays off

about Rs 6,000 crore annually to 5.6 million policyholders


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OBJECTIVES OF LIC

Spread Life Insurance much more widely and in particular to the rural areas and to the

socially and economically backward classes with a view to reaching all insurable persons

in the country and providing them adequate financial cover against death at a reasonable

cost.

Maximize mobilization of people's savings by making insurance-linked savings

adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policyholders,

whose money it holds in trust, without losing sight of the interest of the community as a

whole; the funds to be deployed to the best advantage of the investors as well as the

community as a whole, keeping in view national priorities and obligations of attractive

return.

Conduct business with utmost economy and with the full realization that the moneys

belong to the policyholders.

Act as trustees of the insured public in their individual and collective capacities.

Meet the various life insurance needs of the community that would arise in the changing

social and economic environment.

Involve all people working in the Corporation to the best of their capability in furthering

the interests of the insured public by providing efficient service with courtesy.

Promote amongst all agents and employees of the Corporation a sense of participation, pride and

job satisfaction through discharge of their duties with dedication towards achievement of

Corporate Objective


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INFORMATION TECHNOLOGY AND LIC

LIC has been one of the pioneering organizations in India who introduced the leverage of

Information Technology in servicing and in their business. Data pertaining to almost 10 crore

policies being held on computers in LIC. We have gone in for relevant and appropriate

technology over the years.

1964 saw the introduction of computers in LIC. Unit Record Machines introduced in late 1950s

were phased out in 1980s and replaced by Microprocessors based computers in Branch and

Divisional Offices for Back Office Computerization. Standardization of Hardware and Software

commenced in 1990s. Standard Computer Packages were developed and implemented for

Ordinary and Salary Savings Scheme (SSS) Policies.

FRONT END OPERATIONS

With a view to enhancing customer responsiveness and services , in July 1995, LIC started a

drive of On Line Service to Policyholders and Agents through Computer. This on line service

enabled policyholders to receive immediate policy status report , prompt acceptance of their

premium and get Revival Quotation, Loan Quotation on demand. Incorporating change of

address can be done on line. Quicker completion of proposals and dispatch of policy documents

have become a reality. All our 2048 branches across the country have been covered under front-

end operations. Thus all our 100 divisional offices have achieved the distinction of 100% branch

computerisation. New payment related Modules pertaining to both ordinary & SSS policies have

been added to the Front End Package catering to Loan, Claims and Development Officers

Appraisal. All these modules help to reduce time-lag and ensure accuracy.

METRO AREA NETWORK

A Metropolitan Area Network, connecting 74 branches in Mumbai was commissioned in

November, 1997, enabling policyholders in Mumbai to pay their Premium or get their Status

Report, Surrender Value Quotation, Loan Quotation etc. from ANY Branch in the city. The

System has been working successfully. More than 10,000 transactions are carried out over this

Network on any given working day. Such Networks have been implemented in other cities also.


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WIDE AREA NETWORK

All 7 Zonal Offices and all the MAN centres are connected through a Wide Area Network

(WAN). This will enable a customer to view his policy data and pay premium from any branch

of any MAN city. As at May 2002, we have 91 centers in India with more than 1320 branchesnetworked under WAN.

INTERACTIVE VOICE RESPONSE SYSTEMS (IVRS)

IVRS has already been made functional in 59 centers all over the country. This would enable

customers to ring up LIC and receive information (e.g. next premium due, Status, Loan Amount,

Maturity payment due, Accumulated Bonus etc.) about their policies on the telephone. This

information could also be faxed on demand to the customer.

LIC ON THE INTERNET

The Internet site is an information provider. It has displayed information about LIC & its

subsidiaries-LIC (International) E.C., LIC (Nepal)Ltd, LIC Mutual Fund, LIC Housing Finance

and their products. Efforts are on to upgrade our web site to make it dynamic and interactive.

The addresses/e-mail Ids of its Zonal Offices, Zonal Training Centers, Management

Development Center, Overseas Branches, Divisional Offices and also all Branch Offices with a

view to speed up the communication process.

PAYMENT OF PREMIUM AND POLICY STATUS ON INTERNET

LIC has given its policyholders a unique facility to pay premiums through Internet absolutely

free and also view their policy details on Internet premium payments.There are 11 service

providers with whom L I C has signed the agreement to provide this service.


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VARIOUS POLICIES OF LIC

(PENSION PLAN)

JEEVAN DHARA

Minimum Age at entry: 18 years last birthday.

Maximum age at entry: 65 years last birthday.

Minimum vesting age: 50 years last birthday.

Maximum vesting age: 79 years last birthday.

Minimum deferment period: 2 years.

Minimum Notional Cash option:Rs. 50,000 for regular premium

policies.

Minimum Single Premium: Rs. 10,000/-

Minimum amount of AnnualPremium:

Rs. 2500

Maximum deferment period: 35 years.

Age Proof: Standard Age Proof required.

JEEVAN SURAKSHA

:

Minimum Age at entry : 18 years last birthday.

Maximum age at entry: 65 years last birthday.

Minimum vesting age: 50 years last birthday.

Maximum vesting age: 79 years last birthday.

Minimum deferment period:2 years.

Minimum Notional Cash option:Rs. 50,000 for regular premium

policies.

Minimum Single Premium: Rs. 10,000/-

Minimum amount of AnnualPremium:

Rs. 2500


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Maximum deferment period: 35 years.

Age Proof: Standard Age Proof required.


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(SPECIAL PLAN)

BIMA NIVESH

Bima Nivesh 2005 is a plan with compound rate of guaranteed additions and loyalty additions.

This is the revised version of our popular Bima Nivesh Plan 2004 and is introduced to meet the

overwhelming demand for a single premium plan from our customers. It is a single premium,

ideal investment plan for those who have no regular income but good periodical income. Bima

Nivesh 2005 is available for terms 5 and 10 years. The guaranteed surrender value is payable

after the policy has run for at least one year. Term Assurance Rider is also available by payment

of a single premium at the option of the proposer.


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(DOUBLE COVER ENDOWMENT PLAN)

JEEVAN MITRA

The benefits of this policy are considered normally for standard and substandard lives Class I

and II. It cannot be allowed for people engaged in hazardous occupations. Female lives under

Category I & II allowed. Non-medical special is allowed only if the Sum Assured does not

exceed Rs.1,00,000/-

Besides the usual benefits offered by any endowment insurance plan, this policy provides for an

additional insurance cover equal to the sum assured in the event of a policy holders death during

the term of the policy. In other words, the death claim in the case of this policy is twice the basic

sum assured.

The survival claim, on the other hand, is the basic sum assured, plus the accrued bonuses. Bonus

is, similarly, calculated only on the basic sum assured at rates applicable to endowment policies.

For instance, if a person insured for Rs.10,000 under this policy were to die before its maturity,

the death claim payable would be Rs.20,000 plus the accrued bonus on Rs.10,000, the basic sum

assured. If the policy holder survives the full term of the policy, the payment on maturity would be Rs.10,000 plus the accumulated bonus.

Suitable For:

Being a high-risk endowment assurance policy, this plan is suitable for people of young ages

who wish to protect their families from a financial setback that may occur owing to their

premature death. The amount assured if not paid by reason of his death earlier will payable at the

end of the endowment term where it can be invested in an annuity provision for the rest of the

policyholder's life or in any other way he may think most suitable at that time.

JEEVAN SURABHI


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Jeevan Surabhi plan is similar to other money back plans. However main differences in regular

money back plans and Jeevan Surabhi are as under Maturity term is more than premium paying

term.Early and higher rate of survival benefit payment.

Risk cover increases every five years.

The actual term and the premium paying term for these plans are as under.

Plan

no.

Policy

Term

Premium Paying

Term

106 15 years 12 years



Full sum assured is paid back as survival benefit by the end of premium paying term. However,

the risk cover and additional risk cover continue and the policy participates in profits till the end

of policy term.

Accident Benefit is restricted to the premium paying period and to the overall limit of Rs.5 lakhs

on a single life.

SuitableFor:

This plan holds special interest to people who besides wishing to provide for their old age and

family feel the need for lump sum benefits at periodical intervals.


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ICICI Prudential Life Insurance

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

financial powerhouse and Prudential plc, a leading international financial services groupheadquartered 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).

ICICI Prudential's equity base stands at Rs. 11.85 billion with ICICI Bank and Prudential plc

holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the

company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780

crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors;

as well as 7 bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI

Prudential has retained its position as the No. 1 private life insurer in the country, with a wide

range of flexible products that meet the needs of the Indian customer at every step in life.


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HDF C Standard Life

ABOUT HDFC

BACK GROUD

HDFC was incorporated in 1977 with the primary objective of meeting a social need- that of promoting home ownership by providing long term finance to household needs. HDFC was promoted with an initial share capital of Rs.100 million.

BUSINESS OBJECTIVE

The primary objective of HDFC is to enhance residential housing stock in the country throughthe provision of housing finance in a systematic and professional manner, and to promote homeownership. Another objective is to increase the flow of resources to the housing sector by

integrating the housing finance sector with the overall domestic financial markets.ORGANIZATIONAL GOALS

HDFCs main goals are to

a) develop close relationships with individual households, b) maintain its position as the premier housing finance institution in the country,c) transform ideas into viable and creative solutios,d) provide consistently high returns to shareholders, ande) to grow through diversification by leveraging off the existing client base.

THE PARTNERSHIP

HDFC and Standard Life first came together for a possible joint venture, to enter the Life

Insurance market, in January 1995. It was clear from the outset that both companies shared

similar values and beliefs and a strong relationship quickly formed. In October 1995 the

companies signed a 3 year joint venture agreement.

Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the

relationship.

The next three years were filled with uncertainty, due to changes in government and ongoing

delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in

parliament. Despite this both companies remained firmly committed to the venture.

In October 1998, the joint venture agreement was renewed and additional resource made

available. Around this time Standard Life purchased 2% of Infrastructure Development Finance


46/90

Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury

department to advise them upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and both companies

agreed the time was right to move the operation to the next level. Therefore, in January 2000 an

expert team from the UK joined a hand picked team from HDFC to form the core project team,

based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC

Bank.

In a further development Standard Life agreed to participate in the Asset Management Company

promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th

July 2000.

Incorporation of HDFC Standard Life Insurance Company Limited:

The company was incorporated on 14th August 2000 under the name of HDFC Standard Life

Insurance Company Limited.

Its ambition from as far back as October 1995, was to be the first private company to re-enter the

life insurance market in India. On the 23rd of October 2000, this ambition was realised when

HDFC Standard Life was the only life company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns

18.6%. Given Standard Life's existing investment in the HDFC Group, this is the maximum

investment allowed under current regulations.

HDFC and Standard Life have a long and close relationship built upon shared values and trust.

The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the

yardstick by which all other insurance company's in India are measured.

Mission:

It aims to be the top new life insurance company in the market.

This does not just mean being the largest or the most productive company in the market, rather it

is a combination of several things like-

Customer service of the highest order

Value for money for customers


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Professionalism in carrying out business

Innovative products to cater to different needs of different customers

Use of technology to improve service standards

Increasing market share

Values:

SECURITY: Providing long term financial security to its policy holders will be its

constant endeavour. It will do this by offering life insurance and pension products.

TRUST: It appreciate the trust placed by its policy holders in them Hence, it will aim to

manage their investments very carefully and live up to this trust.

INNOVATION: Recognising the different needs of the customers, it will be offering a

range of innovative products to meet these needs.

Its mission is to be the best new life insurance company in India and these are the values that will

guide in this.


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PRODUTCS

Each of us leads a unique life and so has unique needs. HDFC Standard Life Insurance offers arange of products and invites you to choose the one that suits you the best.

PLAN BENEFITS

1.SAVING PLAN

Endowment Assurance Plan Life insurance and saving with choice of

investment funds.

Unit Linked Endowment Plan Life insurance and saving with choice of

investment funds.

Childrens Plan Financial security for your child

Unit Linked Youngster Plan Financial security for your child with

choice of investment funds.

Money Back Plan Life insurance with savings.

2.INVESTMENT PLAN

Single Premium Whole Of Life Investment with life insurance.

3.PROTECTION PLAN

Term Assurance Plan Life insurance at an affordable price

Loan Cover Term Assurance Plan Life insurance customized for home loans.

4.RETIREMENT PLANS

Personal Pension Plan Saving for retirement.

Unit Link Pension Plan Retirement saving with a choice of

investment funds.


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MARKET SHARE OF VARIOUS LIFEINSURANCE COMPANIES

74%

6%

2%2%

3%

6%

%

LICICICIBAJAJ ALLIANZHDFCBIRLA SUN LIFETATA AIGOTHERS

74%

1.According to you, which have played a major role in thefield of life-insurance companies.

Insurance Pvt.

Employees

Govt.

Employees

Business

ManLIC 10 13 10

HDFC 5 3 5

ICICI 3 3 4

Others 2 1 1

0

2

4

6

8

10

12

14

LIC HDFC ICICI Others

N o .

o f R e s p o n

d e n

t s Pvt. Employees

Govt. Employees

Business Man

After analyzing this data it is found that from the giventhree respective level of Pvt. Govt. and Business 10 outof 20 (30%), 13 out of 20 (39%) and 10 out of 20 (30%)are in favour of LIC, while 5 out of 20 (15%), 3 out of 20(9%) and 5 out of 20 (6%), 1 out of 20 (30%) and 1 outof 20 (30%) are in favour of other Pvt. Companies.


50/90

1. Which insurance companies have been successful to

make strong public base by advertisement?

Insurance Pvt.Employees

Govt.Employees

BusinessMan

LIC 12 14 12

HDFC 3 2 4

ICICI 4 3 3

Others 1 1 1

0

2

4

6

8

10

12

14

16


N o .

o f R e s p o n

d e n

t s Pvt. EmployeesGovt. EmployeesBusiness Man


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2. Which insurance company has gained massive public

support in the current fiscal year?

Insurance Pvt.Employees

Govt.Employees

BusinessMan

LIC 12 14 10

HDFC 3 2 5

ICICI 3 2 4

Others 2 2 1

0

2

4

6

8

10

12

14

16


N o .

o f R e s

o n

d e n

t s Pvt. Employees

Govt. Employees

Business Man

From the above table, it is found that from the given three sector

Private, Govt. and Business 12 out of 20 (36%), 14 out of 20

(42%), 10 out of 20 (30%), are in the favour of LIC 3 out of 20

(9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in favour of ICICI,


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whereas only 2 out of 20 (6%), 2 out of 20 (6%) 1 and out of 20

(3%) favour others company.

3. Do you think insurance policy is in the direction of public welfare?

Pvt. Sector Govt.

Sector

BusinessMan

Yes 13 16 12

No 7 4 8

0

2

4

6

8

10

12

14

16

18

Pvt. Sector Govt. Sector Business Man

N o .

o f R e s

o n

d e n

t s Yes

No

The above table shows that from private sector 13 out of 20

(30%) agree and 7 out of 20 (21%) disagree, from govt. sector 16

out of 20 (48%) think it right but 4 out of 20 (12%) dont thick it


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so and from business man 12 out of 20 (36%) are in favour of the

above statement but 8 out of 20 (24%) dont favour it.


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4. Is retirement bond or pension policy launched by the

number of private player as well as public sector

company in the direction of secured old age?

Pvt. Sector Govt.

Sector

BusinessMan

Yes 15 18 13

No 5 2 7

0

2

46

8

10

12

14

16

1820


N o .

o f r e s p o n

d e n

t s YesNo

It is obvious from the above table that 15 out of 20(45%), 18 out of 20 (54%) and 13 out of 20 (39%) fromthe given three think retirement bend or pension policy alegitiment step in the diretion of secure old age but 5 out20 (15%), 2 out of 20 (6%) and 7 out 20 (21%) dontagree with the opinion of the majority class.


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5. Do you think that risk coverage factor included in

Insurance policy attracts general public towards the

policy?

Pvt. Sector Govt.

Sector

BusinessMan

Yes 12 16 11

No 8 4 9

0

2

4

6

8

10

12

14

16

18


N o . o

f r e s p o n

d e n

t s Yes

No

From the above table it is found that 12 out of 20 (36%)from Private sector 16 out of 20 (48%). From Govt.sector and 11 out of 20 (33%) thinks risk coverage factorattractive but rest 8 out of 20 (24%), 4 out of 20 (12%)and 9 out 20 (27%) from the above them sector dontthink it so encouraging towards saving trend whereas 3out of 20 (9%), 2 ot of 20 (6%) and 4 out of 20 (12%)dont think it so.


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6. What according to you, the term plan that only covers

risk and doesnt cover maturity benefit on survival at

the end of the term provides security cover over

policy holders or a smart way of accumulative moneyfrom policy holders?

Pvt.

Sector

Govt.

Sector

Business

Man

Security Cover 11 15 12

Accumulative Money9 5 8

0

2

4

6

8

10

12

14

16


N o .

o f R e s p o n

d e n t s

Security Cover

Accumulative Money

It is obvious from the above data that 11 out of 20

(33%), from the Pvt. Sector, 15 out of 20 (45%) from

Govt. sector and 12 out of 20 (36%) think term plan as a


57/90

security cover but 9 out of 20 (27%), 5 out of 20 (15%)

and 8 out of 20 (24%) from the three respective group

think it as a way of accumulating money insurance

company.7. Do you think that the arrival of so many private

companies in this insurance sector envisage a lot of

choice to policy holder?

Pvt.

Sector

Govt.

Sector

BusinessMan

Yes 16 18 16

No 4 2 4

0

2

4

6

8

10

12

14

16

18

20


N o .

o f R e s p o n

d e n

t s Yes

No

From analyzing the above data it is found that 16 out of 20 (48%)from Pvt. Sector, 18 out of 20 (54%) from Govt. sector and 16 out of 20 (48%) think that the arrival of private players envisage a lot of


58/90

choice to policy holder. But 4 out of 20 (12%), 2 out of 20 (6%) and 4hout of 20 (12%) dont think it so.


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8. Do you agree that customer-centricity and

transparency are the buzzwords for success in this

evolving industry?

Pvt.

Sector

Govt.

Sector

BusinessMan

Yes 18 20 19

No 2 - 1

0

5

10

15

20

25


N o . o

f R e s p o n

d e n

t s

YesNo

From this above data, it is found the 18 out of 20 (54%) from Pvt.

Sector and 20 out of 20 (60%) from Govt. Sector 19 out of 20 (57%)

from Business men agree with this statement whereas only 2 out of 20

(6%) from Pvt. Sector and 1 out of 20 (3%) from Business men do not

agree with this statement.


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A COMPARATIVE STUDY OF LIC AND ICICI PRUDENTIAL

POLICIES

LIC and ICICI Pru both provide different policies and plans depending upon the various

requirements of people. Different plans are been categorised under seven major categories of

policies. Then a comparative analysis is done between the plans of both LIC and ICICI

Prudential. Both the company provides similar types of plan just with the difference in the

features or premium amounts.

WHOLE LIFE POLICIES

LIC ICICI Prudential

WHOLE OF LIFE PLANS

The most cheapest form of LIC policy

Premiums are payable through out the life

Sum assured is payable on the death of the

life assured

LIFE TIME PLAN

Policy that meets your changing need over a lifetime

Premium part is adjusted towards mortality and

administrative charges and rest is invested in plan of

your choice.

Bringing the difference in the plan of LIC and ICICI Pru we can find out that LIC

plans are very simple to understand whereas the other provide plans according to your

the changing needs of people.


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ENDOWMENT POLICIES

LIC ICICI Prudential

ENDOWMENT WITH PROFITS

These are the policies of limited duration

payable on maturity or death of the life

assured.

These plans are available with different

option like with or without profit or

double or special endowments

ICICI PRU SAVE N PROTECT

An ICICI ideal plan for those who want

to accumulate funds on a regular basis

with life cover

It is a fixed term policy that combines

saving with life cover. The premium is

paid regularly during the term

On death up to age7: - basic premiumreturned without interest

On death after age 7: - sum [email protected]% compounded interest for first 4yrs and then vested bonus.

It can be made out by comparing the plans of both the companies that while ICICI are

more concerned about saving and are categorised for the different section of people.

LIC is straight and simple plan.


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MONEY BACK POLICIES

LIC ICICI PRUDENTIAL

JEEVAN MITRA

A high risk low cost plan and with profit

plan

This plan provide for an additional

insurance cover, equal to the sun assured

in the event of policy holder death during

the term of policy.

JEEVAN SURBHI

Premium payable for limited periods

available with periods of 12,15 and 18 yrs

Money back at interval of 4 and 5 yrs as

per policy term

JEEVAN SANCAY

Plan having a provision of guarantee

addition at 70p.a. per thousand and

loyalty addition payable on date of

maturity.

ICICI PRU CASH BAK

An ideal plan for every milestone of life.

It combines life cover+liquidity+savings.

It provides survival benefit after every 3

or 4 yrs and add-on benefit for a nominalextra premium.

The LIC under money back policies provide various plans each having different kinds

of features. On the other hand ICICI Pru, which combines all the features in just one


64/90

single plan. The LIC plans like jeevan surbhi are suitable for high income and tax

categories.

SINGLE PREMIUM POLICIES


BIMA NIVESH

This is a unique, short-term, multiple

benefits insurance plan which provide

safety, liquidity attractive returns and tax

benefit.

This plan can be assigned as a collateral

security

It provides loyalty and guarantee addition

too.

ICICI PRU REASSURE

A safe and comprehensive plan for those

about to retire or has retired. It combines

best of insurance and investment

Liquidity with assured and steady annual

returns. Life cover up to 110% of

premium paid.

ICICI PRU ASSURE INVEST

An investment with healthy returns and

added benefit of insurance.

This policy has a fixed term of 7 or10 yrs

ICICI PRU LIFE LINK

An ideal market linked insurance plan

that enables you to enjoy the upside of

market returns

It gives flexibility of choosing investmentoption between growth, income or

balanced plan.

Under the single premium policies heading LIC just provides one policy as compared

to ICICI Pru, which gives different policies. Moreover ICICI Pru gives higher assured


65/90

returns and various other benefits.

TERM INSURANCE PLANS


BIMA KIRAN

A plan with the provision for return of 90

premium paid on surviving of the term

Free term cover after maturity provided

the policy is in full force

Having an added attraction of loyalty

addition

JEEVAN GRIHA

For people desirous of obtaining a

housing loan with policy acting as

collateral security

It ensure repayment of loan in the event

of premature death of the borrower

ICICI PRU LIFE GUARD

An ideal low cost policy that covers lifewith uncertainties

It comes with a choice of two convenient

premium payment modes-one time and

regular

It gives the flexibility of accident and

disability cover for a extra premium

Minimum premium payable 2400 per annum. It has no maturity benefits


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A high risk low cost plan

Available as double and triple cover plans

Comparison between the plans of both the companies shows that while ICICI Pru

provide more flexible and stable return plans the LIC are safer plan taking care of

family as a whole. Again LIC provides different plan under this category of life

insurance.

CHILDREN POLICIES


JEEVAN BALYA

Plan provides for a monthly income up to

age of 21 in case of unfortunate death of

parents

Premium waiver benefit is available

BAL VIDYA

The plan takes care of family expenses-

on school college, health or just starting a

career

Money in regular monthly instalment and

in lump sum at specific point of time.

SMART KID

Plan designed for critical educational

milestone include specialised course in

the country and abroad

The sum assured is paid immediately

from 100,000 to 300,000

All future payments are waived off

Most importantly the Childs willcontinue to receive the policy benefits.


67/90

It can be made out that LIC provide different plans for children as compared to ICICI

Pru, which gives only one plan for kids. Both aims at providing the parents aid for

higher studies of their children. While LIC policies are designed to meet the different

need of family budget ICICI Pru are more customer tailored.


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ANNUITY PLANS


JEEVAN SURAKSHA

This plan is suitable for every individual

salaried or self employed or any

professional like C.A., Dr.

The plan can be availed for a life long

monthly pension with an option to

commute 25%of the sum assured.

JEEVAN DHARA

This plan is suitable for executives; self-

employed, professional young employed

or people working wit 15 yrs experience.

The plan guarantees life long pension and

are tax deferred, guarantee return

presently 12.5%

Policy provides competitive and

attractive annuity rates.

ICICI PRU FOREVER LIFE

An ideal solution for people around

30 yrs of age, which offers

retirement benefit and takes care of

protection need

Health cover till 65 through add on

benefit

100% spouse pension

ICICI FOREVER LIFE LINK PENSIONPLAN

A single premium market linked pension

plan. For premium between

Rs 40000 to 99999 it is 2%

Rs 100,000 to 499,999 it is 1.5%

Rs 500,000 and above it is 1.25 % of

the premium


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Lump sum payment to the annuitants

here.

Insurance coverage is equal to 105% of

the initial premium and the top ups

Can opt for 0 insurance cover too

ICICI PRU LIFE TIME PENSION

PLAN

A regular premium linked pension plan

On retirements the accumulated value of

your investment is used to provide

pension

For less than 50000- it is 20%

For premiums equal to or more than

50000- it is 18%

In case of zero death benefit it is 18% and

15% of the premium.

Both LIC and ICICI Pru provide various plans for pension. The LIC plans are more suitable

for all age of people whereas the other one are especially for aged people. Moreover ICICI Pru

plans are made such that each income level can opt depending upon their potentials.


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ENDOWMENT POLICIES

LIC HDFC STANDARD LIFE

ENDOWMENT WITH PROFITS

These are the policies of limited duration

payable on maturity or death of the life

assured.

These plans are available with different

option like with or without profit or

double or special endowments

HDFC STANDARD SAVE N

PROTECT

This plan ensures that ones family

remains financially independent even if

the insured person is not around.

It is a fixed term policy that combines

saving with life cover. The premium is

paid regularly during the term

The plan receives simple reversionary

bonuses, which are usually added

annually. At the end of the terminal

bonus may be paid depending on the

performance

It can be made out by comparing the plans of both the companies that while HDFC aremore concerned about saving and are categorised for the different section of people.

LIC is straight and simple plan.


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MONEY BACK POLICIES


INSURANCE

JEEVAN MITRA

A high risk low cost plan and with profit

plan

This plan provide for an additional

insurance cover, equal to the sun assured

in the event of policy holder death during

the term of policy.

JEEVAN SURBHI

Premium payable for limited periods

available with periods of 12,15 and 18 yrs

Money back at interval of 4 and 5 yrs as

per policy term

JEEVAN SANCAY

Plan having a provision of guarantee

addition at 70p.a. per thousand and

loyalty addition payable on date of

maturity.

HDFC STANDARD CASH BACK

An ideal plan for every milestone of life.

It combines life cover+liquidity+savings.

It provides the optional benefit to

customize the policy to suit the needs

through critical illness (C.I.), Accidental

term benefit (ATB) and accidental death

benefit (ADB).

Premium payable for periods rangingfrom 10 years to 30 years

The LIC under money back policies provide various plan each having different kinds

of features. On the other hand HDFC Standard life, which combines all the features in

just one single plan. The LIC plans like jeevan surbhi are suitable for high income and


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tax categories.

SINGLE PREMIUM POLICIES


INSURANCE

BIMA NIVESH

This is a unique, short-term, multiple

benefits insurance plan which provide

safety, liquidity attractive returns and tax

benefit.

This plan can be assigned as a collateral

security

It provides loyalty and guarantee addition

too.

HDFC STANDARD SOUND

INVESTMENT

This plan is well suited to meet long term

investment needs.

A compound reversionary bonus is being

added to the policy every year.

An investment with healthy returns and

added benefit of insurance.

The eligibility ages are minimum 18

years and maximum 70 years.

It gives flexibility of choosing investmentoption between growth, income or

balanced plan.

Under the single premium policies heading LIC just provides one policy as compared

to HDFC Standard life insurance which gives different policies. Moreover HDFC

Standard life gives higher assured returns and various other benefits.


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TERM INSURANCE PLANS


INSURANCE

BIMA KIRAN

A plan with the provision for return of 90

premium paid on surviving of the term

Free term cover after maturity provided

the policy is in full force

Having an added attraction of loyalty

addition

JEEVAN GRIHA

For people desirous of obtaining a

housing loan with policy acting ascollateral security

It ensure repayment of loan in the event

of premature death of the borrower

A high risk low cost plan

Available as double and triple cover plans

HDFC STANDARD LIFE ASSURED

A sum assured is payable in case of death

of life assured during the term of the

contract.

This plan comes at a minimal cost and is

well suited for the value-conscious

customer.

It gives optional benefits to customise the

needs through critical illness (C.I.),

Accidental term benefit (ATB) and

accidental death benefit (ADB).

Minimum premium payable per annum

having the age of life assured being 20

years is 1566.

Minimum premium payable 2400 per annum. It has no maturity benefits

Comparison between the plans of both the companies shows that while HDFC

Standard life provide more flexible and stable return plans the LIC are safer plan

taking care of family as a whole. Again LIC provides different plan under this


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category of life insurance.

CHILDREN POLICIES


INSURANCE

JEEVAN BALYA

Plan provides for a monthly income up to

age of 21 in case of unfortunate death of

parents

Premium waiver benefit is available

BAL VIDYA

The plan takes care of family expenses-

on school college, health or just starting a

career

Money in regular monthly installment

and in lump sum at specific point of time.

HDFC STANDARD CHILDS FUTURE

Plan designed to secure the childs future

by giving the child (beneficiary) a

guranteed lump sum on maturity or in

case of the insured parents unfortunate

demise.

The beneficiary will receive the benefits

as per the plans options namely

accelerated benefit plan, maturity benefit

plan or double benefit plan.

Premiums can be paid either quarterly,

half yearly or annually depending on the

insured parents convenience.

Most importantly the Childs willcontinue to receive the policy benefits.

It can be made out that LIC provide different plans for children as compared to HDFC

Standard life, which gives only one plan for kids. Both aims at providing the parents

aid for higher studies of their children. While LIC policies are designed to meet the


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different need of family budget HDFC Standard life are more customer tailored.

ANNUITY PLANS

LIC HDFC STANDARD LIFE INSURANCE

JEEVAN SURAKSHA

This plan is suitable for every individual

salaried or self employed or any

professional like C.A., Dr.

The plan can be availed for a life long

monthly pension with an option to

commute 25%of the sum assured.

JEEVAN DHARA

This plan is suitable for executives; self-

employed, professional young employed

or people working wit 15 yrs experience.

The plan guarantees life long pension and

are tax deferred, guarantee return

presently 12.5%

Policy provides competitive and

attractive annuity rates.

Lump sum payment to the annuitants

here.

HDFC STANDARD POST RETIREMENT

INCOME

An ideal solut ion designed to provide a

post-retirement income for l ife with the

freedom to choose the retirement date.

Flexibility to select any ages one which to

retire at (vesting age), between 50 years 70

years.

One can choose to pay a single premium. For a

single premium policy, the premium payable is

equal to sum assured.

The Premium one has to pay depends on age,

sum assured chosen, the premium paying

frequency and the term of the policy.

For a regular premium policy, one will continue

to pay an annual premium for each year of the

policy.

On retirements the accumulated value of is usedto provide pension.

Both LIC and HDFC Standard life provide various plans for pension. The LIC plans are more

suitable for all age of people whereas the other one are especially for aged people. Moreover

HDFC Standard life plans are made such that each income level can opt depending upon their


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potentials.


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SWOT ANALYSIS

SWOT Analysis is mainly used to find out the specific areas in the companys operations, which

need more care and attention, by comparing them with that of the competitor. Here S means

Strengths of the company, W means Weaknesses of the company, O means Opportunities and

T means Threats to the company. Both Strengths and Weaknesses are inherent with the

company while Opportunities and Threats are usually outside factors, which affect the existence

of the company at large. Let us make the SWOT Analysis for all the players mentioned so far, ie.

Life Insurance Corporation, ICICI Prudential and HDFC Standard Life Insurance together so that

one gets a comprehensive idea.

Strengths

Life Insurance Corporation ICICI Prudential HDFC Standard Life

Insurance

Established agency network

during the last decades

More awareness among the

people

More penetration in the rural

parts of India

The uncomparable supremacy

in the number of agents

The network of ICICI Banks The network of HDFC Banks

The trust they have created so

far

The name and fame created

by the ICICI Bank

The name and trust people have bestowed upon HDFC Bank

The early bird advantage The professional and

aggressive marketing set-up

The early bird advantage amongthe private players

WEAKNESSES


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Life Insurance

Corporation

ICICI Prudential HDFC Standard Life

Insurance

As a public company the

staff are not that muchsincere and active

The marketing approach is

not that much professional

The cumbersome processes

to become a policyholder

Do not have a strong andefficient agency network

The sluggishness of the

activities have given, at

times, a bad repute

As a private company the

people do not have that

much belief

As a private company the people do not have thatmuch belief

opportunities

Life Insurance

Corporation

ICICI Prudential HDFC Standard LifeInsurance

The high growth rate of

Indian Economy

The high growth rate of

Indian Economy

The high growth rate of Indian Economy

The people are becoming

more aware of Insurance

and have started

considering it as a

necessity.

The people are becoming

more aware of Insurance

and have started

considering it as a

necessity.

The people are becomingmore aware of Insuranceand have startedconsidering it as anecessity.

The penetration of

Insurance in the rural area is

minimal. This has to be

explored.

The penetration of

Insurance in the rural area is

minimal. This has to be

explored.

The penetration of Insurance in the rural area is

minimal. This has to beexplored.

The Government policies

are offering more and more

rebates on the insured

The Government policies

are offering more and more

rebates on the insured

The Government policiesare offering more and morerebates on the insuredamount and such a scenario


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amount and such a scenario

will help more people

getting interested in it.

amount and such a scenario

will help more people

getting interested in it.

will help more peoplegetting interested in it.

As people become moreinternet savvy, the ad.

Spend will come down as

the prospective clients can

be approached through the

net.

As people become moreinternet savvy, the ad.

Spend will come down as

the prospective clients can

be approached through the

net.

As people become moreinternet savvy, the ad.Spend will come down asthe prospective clients can

be approached through thenet.

Threats

Life Insurance

Corporation

ICICI Prudential HDFC Standard LifeInsurance

The aggressive style of

marketing by the private

players is a threat to LIC.

As the number of agents are

considerably huge, efficient

management of all the field

force need greater strain and

effort.

More and more companies

are coming into the field

and the existing ones haveto struggle hard to keep the

customers loyal and to get

more customers

More and more companies

are coming into the field

and the existing ones haveto struggle hard to keep the

customers loyal and to get

more customers

More and more companiesare coming into the fieldand the existing ones have

to struggle hard to keep thecustomers loyal and to getmore customers

Now as India is on the brim Now as India is on the brim Now as India is on the brimof emerging out as an


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of emerging out as an

economic power centre,

stringent laws can be

expected in the comingfuture.

of emerging out as an

economic power centre,

stringent laws can be

expected in the comingfuture.

economic power centre,stringent laws can beexpected in the comingfuture.

The opening up of the insurance sector has changed the whole look of the industry. While the

LIC in order to face the competition is coming with new strategies. New players like ICICI Pru

and HDFC Standard Life are leading the sector due to their strategic management and tailored

made projects.

From the research also it can be concluded that though the awareness and people opting for LIC

plans are more as compare to ICICI Pru and HDFC Standard Life but the later are gaining

momentum in the market day by day.


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INTERPRETATION

It is no doubt that LIC is an established and market leader in life insurance industry in India. But,

with he coming up of private Life Insurance companies as a passage of IRDA, its share is getting

reduced.

Now, the private companies have acquired 25.74% of the market share in just a small span of 5

years.

This is so because of the innovative products of the private Life Insurance companies.

The basic difference between LIC and private players ICICI prudential and HDFC Standard

Life is that LIC mainly focuses more on standardized products whereas LIC caters to the needsof the customers and focuses on customized products.

The interpretation as a result of comparative analysis is as follows:

Whole Life Policies: LIC plans are very simple to understand whereas the private players

provide plans according to the changing needs of the customers.

Endowment Policie s: LIC is quite simple and straight forward whereas ICICI Pru and HDFC

Standard Life are more concerned about saving and are categorized for the different section of

people.

Money Back Plan: LIC has provided various plans under it having different features. On the

other hand, the private players combine all the features in just one single plan.

Single premium policies: The private players -

final. setting

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