TABLE OF CONTENT

TABLE OF CONTENT
Declaration Students Certificate Acknowledgement Preface

Chapter-1 Introduction .(11-38)

Industry profile.. 11 Contribution to the Indian economy. 32 Role of IRDA. 35

Chapter-2 Company profile ..(41-53)

TATA AIA life insurance Ltd. 41 TATA Group49 AIA Group 52

Chapter-3 Services..(57-67)
TATA AIA product details. 57 Claim Process in Life insurance. 65

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Chapter-4 Human Resource..(69-74)

Definition of agent.. 69
Functions/ Responsibilities of agent. 73

Chapter 5 Conceptual Discussion..(77-85)

Theory and concept used in the project77 Function of insurance.. 79 Why we need insurance. 80

Chapter 6 Marketing..(87-90)
Key business strategy... 87 Distribution channel of TATA AIA 90

Objective of the study 91

Chapter 7 Research Methodology..(93-94)
Research Design. 93 Sources of Data Collection 94

Chapter 8 Data Analysis & Interpretation..(97-111) Chapter 9 Findings, Recommendation & Conclusion.(113-117)

Scope of the study118 Limitation of the study.119 Bibliography....121 Annexure.(123-126)

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Chapter - 1
INTRODUCTION

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INTRODUCTION
INDUSTRY PROFILE
Insurance in India
The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. Life Insurance is the fastest growing sector in India since 2000 as Government allowed Private players and FDI up to 26% and recently Cabinet approved a proposal to increase it to 49%. Life Insurance in India was nationalized by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC.

In 1993, the Government of India appointed RN Malhotra Committee to lay down a road map for privatisation of the life insurance sector.

While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending the Insurance Act of 1938 and legislating the Insurance Regulatory and Development Authority Act of 2000. The same year the newly appointed insurance regulator - Insurance Regulatory and Development Authority IRDAstarted issuing licenses to private life insurers.

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A BRIEF HISTORY OF THE INSURANCE SECTOR:

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are given in the following table.

Years

Important milestones in the Indian life insurance business

1912:

The Indian Life Assurance Companies Act came into force for regulating the life insurance business.

1928:

The Indian Insurance Companies Act was enacted for enabling the government to collect statistical information on both life and non-life insurance businesses.

1938:

The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring public.

1956:

245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India.

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The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are given in the following table

Years

Important milestones in the Indian general insurance business

The Indian Mercantile Insurance Ltd. was set up which was the first company of its type to transact all general insurance business.

1907:

1957:

General Insurance Council, an arm of the Insurance Association of India, framed a code of conduct for guaranteeing fair conduct and sound business patterns.

1968:

The Insurance Act improved for regulating investments and set minimal solvency levels and the Tariff Advisory Committee was set up.

1972:

The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India. It was with effect from 1st January 1973.

1996 setting up of (interim) Insurance Regulatory Authority (IRA) Recommendations of the IRA. 1997 Mukherjee Committee Report submitted but not made public 1997 The Government
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gives greater autonomy to LIC, GIC and its subsidiaries with regard to the restructuring of boards and flexibility in investment norms aimed at channeling funds to the infrastructure sector. 1998 The cabinet decides to allow 40% foreign equity in private insurance companies-26% to foreign companies and 14% to NRIs, OCBs and FIIs . 1999 The Standing Committee headed by Murali Deora decides that foreign equity in private insurance should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and Development Authority (IRDA) Bill. 1999 Cabinet clears IRDA Bill. 2000 President gives Assent to the IRDA Bill.

INDIAN INSURANCE MARKET (HISTORY):

Insurance has a long history in India. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalization b) Nationalization and c) Post Nationalization. Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the background of Economic Reform process which commenced from 1991. For this purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 999. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001.

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HOW BIG IS THE INSURANCE MARKET?

The insurance sector was opened up for private participation four years ago. For years now, the private players are active in the liberalized environment. The insurance market have witnessed dynamic changes which includes presence of a fairly large number of insurers both life and nonlife segment. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe. There are now 29 insurance companies operating in the Indian market 14 private life insurers, nine private non-life insurers and six public sector companies. With many more joint ventures in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario. There is pressure from both within the country and outside on the Government to increase the foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV partners to bring in funds for expansion. There are opportunities in the pensions sector where regulations are being framed. Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first license for a standalone health company in the country as many more players wait to enter. The health insurance sector has tremendous growth potential, and as it matures and new players enter, product innovation and enhancement will increase. The deepening of the health database over time will also allow players to develop and price products for larger segments of society. Insurance is a Rs.400 billion business in India, and together with banking services adds about 7% to India's Gap.

INDIAN SCENERIO:Indian economy is the 12th largest in the world, with a GDP of $1.25 trillion and 3rd largest in terms of purchasing power parity. With factors like a stable 8-9 per cent annual growth, rising foreign exchange reserves, a booming capital market and a rapidly expanding FDI inflows, it is on the hinge of an ever increasing growth curve. Indians have a tendency to invest in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small--4-5%. This in itself is an indicator that growth potential for the insurance sector is immense. Its a business growing at the rate of 15-20%

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per annum and presently is of the order of $47.9 billion. India is a vast market for life insurance that is directly proportional to the growth in premiums and an increase in life density. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant. Competition in this market is increasing with companys continuous effort to lure the customers with new product offerings. However, the market share of private insurance companies remains very low -- in the 10-15% range. Even to this day, Life Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of government still dominates the market, with price controls, limits on ownership, and other restraints. The upward growth trend started from 2000 was mainly due to economic policies adopted by the then Indian government. This year saw initiation of an era of economic liberalization and globalization in the Indian economy followed by several reforms and long-term policies that created a perfect roadmap for the success of Indian financial markets

The general insurance industry grew by 16% in 2006-07 as private insurers continued their robust performance, while public sector players like New India Assurance and Oriental Insurance improved their show. Despite continuous fall in business of government-owned National Insurance, the 12 non-life insurers collected Rs 20,378 crore in first year premium in the last fiscal compared to Rs 17,531 crore collected in 2005-06, according to data compiled by regulator IRDA. New India Assurance collected Rs 4,762 crore in premium and continued to lead the non-life sector by cornering 23.36% of the market. National Insurance was at the second
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spot by collecting Rs 3,524 crore in premium, a decline of 7%, but had a market pie of 17.29%. Oriental Insurance mopped up Rs 3,518 crore in premium income after logging 16.6% growth in business to corner a market share of 17.26%. Another PSU insurer United India grew by a modest 6.8% to collect Rs 3,147 crore in premium and had 15.44% of the market. The eight private players expanded their business by 52% to collect Rs 5,427 crore in premium income and increased their combined market share to 26.6% from 20.2% a year ago. ICICI Lombard led the private players by logging 80% growth in premium at Rs 1,592crore, followed by Bajaj Allianz, which grew by 50% to collect Rs 1,287 crore in premium. ICICI Lombard had a market share of 7.81% and Bajaj Allianz had 6.31% of the market.

Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a Code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized t h e general insurance business in India with effect from 1st January 1973. 1 0 7 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
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FUNCTION OF INSURANCE:
Provide protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk: Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also. Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain. Small capital to cover larger risk: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

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Means of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. Source of earning foreign exchange: Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover. ROLES OF THE LIFE INSURANCE: Life insurance as an investment: Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurance companies. Life insurance as risk cover: Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security that no other form of invest can provide. Life insurance as tax planning: Insurance serves as an excellent tax saving mechanism

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IMPORTANCE OF THE LIFE INSURANCE:

Protection against untimely death: Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. Saving for old age: After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age.

Promotion of savings: Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only after the expiry of duration of the policy.

Initiates investments: Life Insurance Corporation encourages and mobilizes the public savings and canalizes the same in various investments for the economic development of the country. Life insurance is an important tool for the mobilization and investment of small savings.

Credit worthiness: Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business.
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Social Security: Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future.

INSURANCE CYCLE:

Policy Renewal/Change Options/Application:The Insurance Cycle begins each year with the insurance offer. Actuarial documents are published annually by the Risk Management Agency (RMA). The actuarial documents list the plan of insurance, crop, type, variety, and practice that may be insured in a state and county, and show the amounts of insurance, available insurance options, levels of coverage, price elections, applicable premium rates, and subsidy amounts. The Special Provisions of Insurance list program calendar dates, and general and special statements which may further define, limit, or modify coverage.
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Sales Closing/Cancellation/Termination Dates:Insurance applications must be completed and signed no later than the sales closing date specified in the crop actuarial documents. Applications signed after the crop sales closing date may be rejected by the insurance provider. Insurance coverage is continuous and can be cancelled by either the insurance provider or the policyholder for the following crop year by providing a written notice to the other party no later than the cancellation date specified in the crop policy. For a policyholder insured the previous crop year, any changes he or she wishes to make to the policy coverage must be made on or before the crop sales closing date. The policy will automatically renew for the subsequent crop year unless the policyholder cancels the policy in writing on or before the crop cancellation date. Insurance coverage may be terminated by the insurance provider for the following crop year for nonpayment of outstanding debt by providing a written notice to the policyholder no later than the termination date specified in the crop policy. The insurance provider may terminate coverage on a crop if no premium is earned for three consecutive years.

Acceptance:Upon receipt of a properly completed and timely submitted insurance application, the insurance provider will accept and process the application, unless the applicant is determined to be ineligible under the contract or Federal statute or regulation. The insurance provider will issue a summary of coverage and the appropriate policy documents to the applicant. After the application is accepted, the policyholder may not cancel the policy for the initial crop year.

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Insurance Attaches: For annual crops, insurance attaches annually when planting begins on the insurance unit. The crop must be planted on or before the crop's published final planting date unless late or prevented planting provisions apply. If prevented planting provisions apply, and the crop cannot be timely planted due to the causes specified in the crop provisions, such acreage may be eligible for a prevented planting payment.

Acreage Reports:The policyholder must annually report for each insured crop in the county the number of insurable and uninsurable acres planted or prevented from being planted if prevented planting is available for the crop, the date the acreage was planted, share in the crop, the acreage location, farming practices used, and types or varieties planted to the insurance provider on or before the applicable acreage reporting date specified in the crop actuarial documents.

Summary of Coverage:The insurance provider will process a properly completed and timely filed acreage report, and issue to the policyholder a summary of coverage that specifies the insured crop, the insured acres and amount of insurance or guarantee for each insurance unit. The policyholder may make changes to the filed acreage report, if permitted by the insurance provider.

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Premium Billing:The annual premium is earned and payable at the time insurance coverage begins. The insurance provider shall issue a premium billing based upon the information contained in the acreage report no earlier than the premium billing date specified in the crop actuarial documents. The premium billing will specify the amount of premium and any administrative fees that may be due. If the premium or administrative fees are not paid by the date specified in the actuarial documents or policy, the insurance provider may assess interest on the outstanding premium balance. Notice of Damage or Loss: A written notice of damage or loss for each unit is to be filed by the policyholder within 72 hours of the policyholder's initial discovery of damage or loss but not later than 15 days after the calendar date for the end of the insurance period unless otherwise stated in the individual crop policy. The policyholder should refer to the individual crop provisions for additional requirements in the event of damage or loss. These notifications provide the opportunity for the insurance provider to inspect the crop and determine the extent of damage or potential production before the crop is harvested or otherwise disposed of. Inspection:After the insurance provider receives the written notice of damage or loss, it will be processed and, if necessary, a loss adjuster will be sent to inspect the damaged crop and gather pertinent information concerning the damage. If the policyholder wishes to destroy or not harvest the crop,the loss adjuster will gather the appropriate information, conduct an appraisal to establish the crop's remaining value and complete any forms needed. If the crop has been harvested or will
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not be harvested by the end of the insurance period, and the policyholder wishes to file a claim for indemnity, the loss adjuster will gather the appropriate information and assist the policyholder in filing the claim for indemnity. It is the policyholder's responsibility to establish the time, location, cause, and amount of any loss. Indemnity Claim:After the claim for indemnity is processed by the insurance provider, an indemnity check and a summary of indemnity payment will be issued showing any deductions to the amount of indemnity for outstanding premium, interest, or administrative fees. Contract Change Date:Changes to the insurance program may be made by RMA from one year to the next. The insurance provider will notify the policyholder in writing of any changes to the policy, actuarial documents, or the Special Provisions of Insurance prior to the calendar date for contract changes specified in the crop policy. The policyholder will have the opportunity to review the changes and, if he/she desires, continue the insurance coverage for the following crop year, change the policy coverage, or cancel the insurance coverage. Any changes to the policy coverage that the policyholder makes must be made no later than the crop sales closing date. If the policyholder wishes to cancel the policy, a written notice must be submitted to the insurance provider on or before the crop cancellation date.

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List of Life Insurers (as of November 2011)

Apart from TATA AIA, the public sector life insurer, there are 23 other private sector life insurers, most of them joint ventures between Indian groups and global insurance giants.

Life Insurer in Public Sector

1. Life Insurance Corporation of India

Life Insurers in Private Sector

1. SBI Life Insurance 2. PNB Metlife India Life Insurance 3. ICICI Prudential Life Insurance 4. Bajaj Allianz Life 5. Max Life Insurance 6. Sahara Life Insurance 7. Tata AIA Life 8. HDFC Life 9. Birla Sun Life Insurance 10. Kotak Life Insurance 11. Life Insurance Corporation of India 12. Aviva Life Insurance 13. Reliance Life Insurance Company Limited - Formerly known as AMP Sanmar LIC 14. ING Vysya Life Insurance 15. Shriram Life Insurance

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16. Bharti AXA Life Insurance Co Ltd 17. Future Generali Life Insurance Co Ltd 18. IDBI Fedaral Life Insurance 19. AEGON Religare Life Insurance 20. DLF Pramerica Life Insurance 21. CANARA HSBC Oriental Bank of Commerce 22. Star Union Dia-ichi Life Insurance Co. Ltd 23. Edelweiss Tokio Life Insurance Company Ltd

Types of Insurance
There are basically two types of Insurance. They can be classified into following two categories,

INSURANCE

LIFE INSURANCE

GENERAL INSURANCE

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LIFE INSURANCE :
Your family counts on you every day for financial support, food. Shelter, transportation, education, and much more. Insurance provides you with that unique sense of security that no other form of investment provides. Life insurance is all about making sure your family has adequate financial resources to make those plans and dreams come true. It provides financial protection to help your family or business to manage after your death. Whole life policies cover the insured for life. The insured does not receive money while he is alive; the nominee receives the sum assured plus bonus upon death of the insured. Endowment Policies Cover the insured for a specific period. The insured receives money on survival of the term and is not covered thereafter. Money back policies The nominee receives money immediately on death of the insured. On survival the insured receives money at regular Intervals during the term. These policies cost more than endowment with profit policies. Annuities / Childrens policies The nominee receives a guaranteed amount of money at a predetermined time and not immediately on death of the insured. On survival the insured receives money at the same pre-determined time. These policies are best suited for planning childrens future education and marriage costs. Pension schemes There are policies that provide benefits to the insured only upon retirement. If the insured dies during the term of the policy, his nominee would receive the benefits either as a lump sum or as a pension every month.
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GENERAL INSURANCE
Every asset has a value and the business of general insurance is related to the protection of economic value of assets. Assets would have been created through the efforts of owner, which can be in the form of building, vehicles, machinery and other tangible properties.

Concepts of insurance have been extended beyond the coverage of tangible asset. Now the risk of losses due to sudden changes in currency exchange rates, political disturbance, negligence and liability for the damages can also be covered. But if a person judiciously invests in insurance for his property prior to any unexpected contingency then he will be suitably compensated for his loss as soon as the extent of damage is ascertained. Property Insurance The home is most valued possession. The policy is designed to cover the various risks under a single policy. It provides protection for property and interest of the insured and family. Health Insurance It provides cover, which takes care of medical expenses following hospitalization from sudden illness or accident. Personal Accident Insurance This insurance policy provides compensation for loss of life or injury (partial or permanent) caused by an accident. This includes reimbursement of cost of treatment and the use of hospital facilities for the treatment.

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Travel Insurance the policy covers the insured against various eventualities while traveling abroad. It covers the insured against personal accident, medical expenses and repatriation, loss of checked baggage, passport etc. Liability Insurance This policy indemnifies the Directors or Officers or other professionals against loss arising from claims made against them by reason of any wrongful Act in their Official capacity. Motor Insurance Motor Vehicles Act states that every motor vehicle plying on the road has to be insured, with at least Liability only policy. There are two types of policy one covering the act of liability, while other covers insurers all liability and damages caused to ones vehicles. Since a single policy cannot meet all the insurance objectives, one should have a portfolio covering all the needs.

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CONTRIBUTION TO THE INDIAN ECONOMY

Insurance is the only sector which garners long term savings
Insurers are increasingly introducing innovative products to meet the specific needs of the prospective policyholders. An evolving insurance sector is of vital importance for economic growth. While encouraging savings habit it also provides a safety net to both enterprises and Individuals. Insurance Companies receive, without much default, a steady cash stream of premium or contributions to pension plans. Various actuary studies and models enable them to predict, relatively accurately, their expected cash outflows. Liabilities of Insurance companies being long-term or contingent in nature, liquidity is excellent and their investments are also long-term in nature. Since they offer more than the return on savings in the shape of life-cover to the investors, the rate of return guaranteed in their insurance policies is relatively low. Consequently, the need to seek high rates of returns on their investments is also low. The risk-return tradeoff is heavily tilted in favor of risk. As a combined result of all this, investments of insurance companies have been largely in bonds floated by GOI, PSUs, state governments, local bodies, corporate bodies and mortgages of long term nature. Generates Long term funds for infrastructure and strong positive correlation between development of capital markets and insurance/pension sector. For GDP to grow at 8 to 10%, qualitative improvement in infrastructure is essential. Estimates of funds required for development of infrastructure vary widely. An investment of 6,19,600 crore is anticipated in the next 5 years.

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Tenure of funding required for infrastructure normally ranges from 10 to 20 years. The insurance industry also provides crucial financial intermediary services, transferring funds from the insured to capital investment, critical for continued economic expansion and growth, simultaneously generating long-term funds for infrastructure development. In fact infrastructure investments are ideal for asset-liability matching for life insurance companies given their long term liability profile. According to preliminary estimates published by the Reserve Bank of India, contribution of insurance funds to financial savings was 14.2 per cent in 2005-06, viz., 2.4 per cent of the GDP at current market prices. Development of the insurance sector is thus necessary to support continued economic transformation. Social security and pension reforms to benefit from a mature insurance industry. The insurance sector in India, which was opened up to private participation in the year 1999, has completed over seven years in liberalized environment. With an average annual growth of 37 per cent in the first year premium in the life segment and 15.72 per cent growth in the nonlife segment, together with the largest number of life insurance policies in force, the potential of the Indian insurance industry is still large. Life insurance penetration in India was less than 1 per cent till1990-91. During the 1990s, it was between 1 and 2 per cent and from2001 it was over 2 per cent. In 2005 it had increased to 2.53 per cent.

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Spread of financial services in rural areas and amongst socially lessprivileged

IRDA Regulations provide certain minimum business to be done 1. In rural areas 2. In the socially weaker sections Life Insurance offices are spread over nearly 1400 centres. Presence of representative in every tehsil deeper penetration in rural areas. Insurance agents numbering over 6.24 lakhs in rural areas.Policies sold in rural areas (2004-05) - No. of policies 55 lakhs, Sumassured 46,000 crores. Social security - No. of lives covered 2003-04 17.4lakhs 2004-05 42.1 lakhs

Employment generation
Life insurance industry provides increased employment opportunities.Employees in insurance sector as on 31st March, 2005 is around 2 lakhs.Many agents depend on insurance for their livelihood. No. of agents on31st March 2004 15.59 lakhs. Brokers, corporate agents, trainingestablishments provide extra employment opportunities. Many of theseopenings are in rural sectors.

Foreign Direct Investment (FDI) Policy in Insurance Sector

As per the current (March 2006) FDI norms, foreign participation in an Indian insurance company is restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has stipulated that foreign investment in Indian Insurance companies be limited to 26% of total equity issued (FDI limit) with the balance being funded by Indian promoter entities. The limit to foreign investment includes both direct and indirect investment and has been a cause of significant lobbying by foreign insurance companies for a change in regulations to increase the FDI limit to 49% of equity issued.
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The Indian government has supported an increase in the FDI limit, which requires a change in the Insurance Act. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be increased to 49.0%.

A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The Indian government has tabled the bill in the Upper House of Parliament in August 2010.

Initial Public Offer (IPO) rules for Indian Life Insurance Companies
A key piece of legislation impacting on the Life Insurance industries capital raising abilities is the lock-in period of 10 years for investment to be limited to promoter group equity investments. Under the Insurance Guidelines, Indian Life Insurance companies can opt for a public issue of equity through an Initial Public Offer (IPO) after 10 years of operations.

In October 2010, the securities market regulator, Securities and Exchange Board of India (SEBI), issued disclosure norms for Indian Life Insurance Companies seeking to make an initial public offer for sale of equity shares to the public.

The Insurance Regulatory and Development Authority

Insurance Regulatory and Development Authority (IRDA) is an autonomous apex
statutory body which regulates and develops the insurance industry in India. It was constituted by a Parliament of India act called Insurance Regulatory and Development Authority Act, 1999
[1] [2]

and duly passed by the Government of India. [3]

The agency operates its headquarters at Hyderabad, Andhra Pradesh where it shifted from Delhi in 2001. The Insurance regulatory and Development Authority (IRDA), batted for a hike in the foreign direct investment (FDI) limit to 49 per cent in the sector from the present 26 per cent.
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I am in favour of hike in the FDI limit for the insurance sector. Unless we go for 49 per cent, we will not have the kind of capital required to underpin the growth of the industry. This sector requires a lot of money, IRDA Chairman J. Hari Narayan(till feb,2013) said on the sidelines of a summit here.

The Insurance Laws (Amendment) Bill has been pending before Parliament for about four years as there has been no consensus among political parties on the issue of raising the FDI limit to 49 per cent.

Coming under pressure from its allies, the UPA II government, in May this year, had postponed a decision on raising the FDI limit in the sector to 49 per cent. The FDI limit in this sector was raised to 49% in July 2013.

Earlier, Mr. Hari Narayan said the IRDA would develop ten standard products in consultation with industry bodies which could be launched by insurance companies without seeking the regulatory nod. We will have to work closely with the Life Insurance Council and the General Insurance Council to see if we can develop such products, he added.

The insurance regulator said the persistence level was very low in the industry and there was a need to bring in complete understanding of the market and insurance companies. The persistence level refers to client retention by insurance companies. He said `Use and

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File would not be in the general interest of the policy-holders since the persistence ratio was high. Recently the Finance Minister of India announced the setting of insurance repository system.

An Insurance Repository is a facility to help policy holders buy and keep insurance policies in electronic form, rather than as a paper document. Insurance Repositories, like Share Depositories or Mutual Fund Transfer Agencies, will hold electronic records of insurance policies issued to individuals and such policies are called electronic policies or e Policies.

History
The IRDA Act, 1999 was passed as per the major recommendation of the Malhotra Committee report (1994) which recommended establishment of an independent regulatory authority for insurance sector in India. Later, It was incorporated as a statutory body in April, 2000. The IRDA Act, 1999 also allows private players to enter the insurance sector in India besides a maximum foreign equity of 26 per cent in a private insurance company having operations in India.

The FDI limit in insurance sector was raised to 49% in July 2013. It serves as an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith.

IRDA role is to protect rights of policy holders & they provides registration certification to life insurance companies & responsible for renewal, modification, cancellation & suspension of this registered certificate.

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Organizational structure
IRDA is a ten member body consisting of:

A Chairman, Five whole-time members and Four part-time members.

All members are appointed by the Government of India.

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Chapter - 2
COMPANY PROFILE

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COMPANY PROFILE
TATA AIA Life Insurance Ltd.
Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint venture company, formed by Tata Sons and AIA Group Limited (AIA). Tata AIA Life combines Tata's pre-eminent leadership position in India and AIA's presence as the largest, independent listed pan-Asia life insurance group in the world spanning 15 markets in Asia Pacific. Tata Sons holds a majority stake (74%) in the company and AIA holds 26% through an AIA Group company. Tata AIA Life Insurance Company Limited was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.lines. The Company's products are available through various channels of distribution like agents, brokers, banks (through bank assurance tie ups) and direct channels like Telemarketing, Digital Marketing, worksite etc.

Integrity
Are consistently honest, follows through on commitments, stand up for their convictions, act responsibly, take accountability for their actions.

Direction setting
Communicate a clear vision, implement strategies and plans, manage strategic objectives, control expenses, hold others accountable for results, and achieve objectives with limited resources.

Customer focus
Gather information from customers to understand their needs, anticipate customers' challenges, take action to meet customers' needs, establish goals with the customer in mind.

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Operating style
Pursue initiatives with energy and urgency, change course when appropriate, are entrepreneurial, make timely decisions, are resilient, work effectively under pressure, demonstrate a drive to win, attend to details.

Working across boundaries

Build relationships with people in different parts of TATA AIA, communicate effectively with people at all levels, collaborates with internal and external resources to get the job done.

TATA GROUP IN INSURANCE:

TATA AIA General Insurance Company Ltd, and TATA AIA Life Insurance Company Ltd., (collectively "TATA AIA") are joint venture companies between the Tata group India's most trusted industrial house and American International Group, Inc. (AIA), the leading U. S. based international insurance and financial services organization. The Late Sir Dorab Tata, was the founder Chairman of New India Assurance Co. Ltd., a group company incorporated way back in 1919. Government of India took over the management of this company as a part of nationalization of general insurance companies in 1972. Not deterred by the move, Tata group have ventured into risk management services having tied up with AIA group, back in 1977, with the incorporationbusiness conglomerates, with revenues in 2006-07 of $28.8 billion (Rs129,994 crore), the equivalent of about 3.2 per cent of the country's GDP, and a market capitalization of $72.2 billion as on December 6, 2007. Tata companies together employ some 289,500 people.

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ABOUT TATA-AIA:
TATA AIA Insurance Solutions is one of the leading insurance companies that provide both life insurance as well as general insurance. This pioneer company is a joint collaboration between the American International Group, Inc. (AIA) and Tata Group. They own the company in the ratio of 26:74. It is a leading financial institution that has carved a niche for itself all over the world. TATA AIA Insurance provides facilities to both corporate and individuals. Starting its operations on April 1, 2001, it seeks to serve different categories of people. It acquired its license for carrying out operations in India on February 12, 2001. TATA AIA Insurance Solutions is one of the most prestigious organizations in the business world. It employs thousands of employees and offers various opportunities to people to build a prospective career. As a leading name in the financial world, it identifies the potential and experience of the individual. This insurance company identifies the clients needs and works accordingly. It stresses on innovative aspect and opening of new markets. It believes in new economy and latest Internet technology. TATA AIA Insurance offers a number of products for the General Insurance holders. General insurance products include: Individual insurance Small business insurance Corporate insurance

TATA AIA Insurance offers flexible life insurance to the individuals, business organization and other association. For the corporate, there are various insurance products like group pensions, employee benefits, work place solutions and credit life. For the individuals, TATA AIA Insurance offers various products for adults, children and for retirement planning.

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Change leadership
Develop creative solutions to address business problems, encourage innovation and original thinking, support risk-taking, monitor progress toward goals, make persuasive presentations, express optimism about the future, balance multiple priorities, learns from mistakes and encourage others to do so.

Business acumen
Solve problems by addressing root causes, identify critical information, work toward bottom-line goals, understand current issues facing TATA AIA, consider the business overall when making decisions.

History
TATA AIA General Insurance Company Limited (TATA AIA General) is a business Collaboration of the Tata Group and AIA. TATA AIA General merges two major finance organizations i.e. the Tata Group's prominent headship place in India and AIA's global presence as the world's leading international insurance and financial services Organization. This joint venture has started its operations in India from 1st April 2001. The company provides both corporate and personal insurance services. The organization offers an array of general insurance covers which are well thought-out under commercial and consumer demands. The commercial sector covers Energy, Marine, Property and several specialized Financial covers, while the consumer insurance service offers a variety of general Insurance products such as insurance for Automobiles, personal accident, casualty, home, health and travel. The company has made the availability for its services from end to end channels of distribution like agents, banks (through banc assurance tie ups), brokers and direct channels like tele-marketing, e-commerce, website, etc. The headquarters of the company is situated in Mumbai. The company has provided the
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employment to more than 2000 qualified professionals across the country in more than 160 locations.

TATA AIA General Insurance won the Claims Service Company of the Year and the Best NonUrban Coverage Award at the India Insurance Awards 2012 held in Mumbai on June 7, 2012.

For any customer, the moment of truth arrives when he or she claims against their policy. The Insurers promise made to their policy holders to protect them for the risks they are insured against is tested at the time of making a claim.

TATA AIA believes that Claims servicing is about empathy for a customer's loss. With this in mind, the Company has focused on deploying the latest in technology and systems, which utilized by a team of experienced claims professionals; ensure a smooth experience for customers from time of claim notification to resolution. Recognizing this commitment to effective and speedy claims settlement and the Companys leadership in claims servicing, India Insurance Awards awarded TATA AIA with The Claims Service Company of the Year Award 2012. The jury honoured the Company for maintaining the highest levels of client service, satisfaction and focus in claims handling in the fiscal year 2011-12. The award citation mentions, TATA AIA General has maintained high standards in claims servicing through leadership in claims settlement and average turnaround times. It further adds, The Companys customer commitment in this area is reflected through initiatives such as an inhouse multi-lingual call center for claims, an online claims registration and tracking system for ease of contact, mobile claims for cars and green channel settlement for faster service.

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Commenting on the Award, Gaurav D. Garg, MD & CEO of TATA AIA General said, With cutting-edge knowledge, sound judgment born of experience, and innovative technology, our professionals are well prepared to ensure that claims servicing is a pleasant experience for our policy holders. This award further exemplifies TATA AIAs dedication to build a customerfocused claims network that is committed to service excellence. He added.

TATA AIA was recognized not just for its exemplary claims service but also for its commitment to excel in its social obligations. India Insurance Awards awarded TATA AIA with the Best Non-Urban Coverage Award 2012.

The Best Non-Urban Coverage Award honours TATA AIA as a general insurer focused on and exceeding its commitments to the non-urban Indian market; in the process pushing the frontiers by creating newer markets for insurance offerings for both, the company and other players to partake of. The award citation elaborates, TATA AIA demonstrated excellence in reach, business volumes, focused product offerings and innovative business models and partnerships to service non-urban India. TATA AIA considers Rural Insurance an integral part of its business. With this objective in mind the Company has strengthened its focus in the non-urban market and has more than doubled its top line, expanding in newer geographies as well as consolidating its base in existing areas in non-urban India.

The Company has expanded its mass insurance capabilities, covering lakhs of customers through retail and government deals. The Company also plans to introduce a new product line - weather insurance, while selling traditional motor, health and commercial insurance products in the rural markets.

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The India Insurance Awards presented on June 7, 2012 in Mumbai honour performance, growth, product and market innovation, customer service and technology. The awards were given out in various categories ranging across growth, claims servicing, geographical coverage, product and technology innovation and social contribution.

In the well-attended presentation ceremony, 24 awards were given out across the Life, General, Health and Overall segments to 17 best performing insurers in the country. TATA AIA General Insurance won the Claims Service Company of the Year Award 2012 and Best Non-Urban Coverage Award 2012.

TATA AIA General Insurance Company

TATA AIA General Insurance Company provides insurance solutions to individuals and corporates. It offers a complete range of general insurance products including insurance for automobile, home, personal accident, travel, energy, marine, property and casualty as well as several specialized financial lines. TATA AIA believes in offering innovative and relevant insurance solutions in the retail and commercial space. Each product offering is backed by expertise and an unparalleled claims service. TATA AIAs products are available through various channels of distribution like agents, brokers, banks (through banc assurance tie ups) and direct channels like Tele Marketing, Digital Marketing, worksite management etc. TATA AIA has its operations in 59 cities.

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TATA AIA Life Insurance

Has a deep rooted commitment to improve the quality of life of its customers, employees and stakeholders.W e d o t h i s b y o u r e f f o r t s w h i c h s t r i v e t o m a k e T A T A A I A L i f e Insurance a corporate with values. Increase Customer Value. Integrated efforts

THE JOINT VENTURE:

TATA AIA Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent has been brought in by Tata Sons and the American partner brings in the balance 26 per cent. Mr. George Oommen has been named managing director of TATA AIA Life. TataAIA plans to provide broad array of life insurance plans to cover to both individuals and groups. The company headquartered in Mumbai, with branch operations in Delhi, Chennai, Hyderabad, Bangalore Calcutta, Pune and Chandigarh.

Tata Enterprises with 82 companies, spread over seven sectors and with an annual turnover exceeding US $ 8.8 billion, employs more than 262,000 people. Tata Group has shown over years that it is a value driven company and has pioneering contributions in various fields including insurance, aviation, iron and steel. In terms of capital market performance as many as 40 listed Tata companies account for nearly 5% of the total market capitalization of all listed companies. The Group has had a long association with India's insurance sector having been the largest insurance company in India prior to the nationalization of insurance.

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THE TATA GROUP

Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are USD 62.5 billion (around Rs. 251,543 crores), of which 61% was from business outside India. The Groups Net Profit for 2007-08 is USD5 . 4 b i l l i o n ( a r o u n d R s . 2 1 , 5 7 8 c r o r e s ) . T h e G r o u p e m p l o ys around 350,000 people worldwide. The business operations of the Tata Group c u r r e n t l y e n c o m p a s s s e v e n business sectors - Communications and Information Technology, Engineering, Materials, Services, Energy, Consumer Products and Chemicals. The Group's 28 publicly listed e n t e r p r i s e s h a v e a combined market capitalization of a r o u n d $ 6 0 b i l l i o n , a m o n g t h e highest among Indian business houses, and a shareholder base of 2.9 million. The major companies in the Group include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels, Tata Teleservices and Tata Communications.

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Tata Group remains a family-owned business, as the descendants of the founder (from the Tata family) own a majority stake in the company. The current chairman of the Tata group is Cyrus Pallonji Mistry, who took over from Ratan Tata in 2012. Tata Sons is the promoter of all key Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata Sons has traditionally been the chairman of the Tata group. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. Tata Group is an Indian multinational conglomerate company headquartered in Mumbai, Maharashtra, India.[3] It encompasses seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. Tata Group was founded in 1868 by Jamsetji Tata as a trading company.

It has operations in more than 80 countries across six continents. Tata Group has over 100 operating companies each of them operates independently. Out of them 32 are publicly listed. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages,

Tata Teleservices, Titan Industries, Tata Communications and Taj Hotels. The combined market capitalization of all the 32 listed Tata companies was INR 6 Trillion ($96.87 billion) as of Sep 2013.[6] Tata receives more than 58% of its revenue from outside India.

Tata Group remains a family-owned business, as the descendants of the founder (from the Tata family) own a majority stake in the company. The current chairman of the Tata group is Cyrus Pallonji Mistry, who took over from Ratan Tata in 2012. Tata Sons is the promoter of all key Tata companies and holds the bulk of shareholding in these companies. The chairman of Tata
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Sons has traditionally been the chairman of the Tata group. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family.

The Tata Group and its companies & enterprises is perceived to be India's best-known global brand within and outside the country as per an ASSOCHAM survey. The 2009, annual survey by the Reputation Institute ranked Tata Group as the 11th most reputable company in the world.

The survey included 600 global companies. The Tata Group has helped establish and finance numerous quality research, educational and cultural institutes in India. The group was awarded the Carnegie Medal of Philanthropy in 2007 in recognition of its long history of philanthropic activities.

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AIA GROUP
AIA Group Limited and its subsidiaries (collectively "AIA" or "the Group") comprise the largest independent publicly listed pan-Asian life insurance group in the world. It has wholly-owned main operating subsidiaries or branches in 14 markets in Asia Pacific Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau and Brunei and a 26 per cent joint venture shareholding in India. The business that is now AIA was first established in Shanghai over 90 years ago. It is a market leader in the Asia Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$114,461 million as of 30 November 2011. AIA meets the savings and protection needs of individuals by offering a range of products and services including retirement planning, life insurance and accident and health insurance. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents and employees across Asia Pacific, AIA serves the holders of more than 24 million individual policies and over 10 million participating members of group insurance schemes. AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code "1299" with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: "AAGIY").

The AIA Group exists to provide our customers with financial protection, security, and a comfortable future.

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As a company, we understand that life is unpredictable. It has its highs as well as its challenges and everyone is on a different journey. Thats why our starting point has always been understanding people. By being genuinely engaged with peoples real lives, we gain deeper insights that enable us to offer a range of insurance and wealth management products that fit the needs of the individual. Over the last 90 years, weve built our business upon serving the ever-changing needs of people and companies in Asia. Our personal, relationship-based approach has made us part of the fabric of life here. And we will continue to protect generations of people, for many years to come, whatever life brings them.

So whether you need support in achieving your ambitions, supporting a family, enjoying retirement, or anything else: we understand where youre coming from, because weve been there ourselves.

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ORGANISATION STRUCTURE

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Chapter 3
Services

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TATA AIA PRODUCT DETAILS

There are two types of products: 1. Traditional. 2. Ulips.

TATA AIA Life Comprehensive Superannuation Scheme Policy Meaning

Our traditional Superannuation product acts as valuable tool to enhance the companys image whilst providing for a dignified retired life for the employees.

Key Features
1) Plan design and advice on Trust Formation/Deed of Variation. 2) Actuarial valuation for Defined Benefit Scheme as per internationally accepted practices once in a year. 3) Scheme registration and ongoing legislative compliance. 4) Investment management and reporting to trustees. 5) Administration services and benefit payments.

Superannuation Schemes can be of two types:

1) Defined Benefit (DB) This defines the amount of benefit that an employee receives at retirement. Actuarial valuation is conducted to determine the funding rate. A pooled fund is maintained for all members of the scheme.
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Upon retirement of a member, the amount required to secure the benefit is drawn from the pooled fund. The pooled fund should achieve the required funding level to enable the employer to meet the benefit obligations. 2) Defined Contribution (DC) This defines the annual contribution that the employer wills deposit into the scheme for each employee. Contributions are usually fixed as a percentage of the employees salary. Individual employee accounts reflecting the contributions and the interest accumulations are maintained. Upon retirement, the individual account is released to provide funds to secure the benefits under the scheme.

Benefit Payments:
Upon the retirement of the member from employment or on cessation of employment, benefits, subject to the provisions of the companys rules, can be utilized in the following manner:

1) Upon Retirement To provide for payment of the commuted value relating to the portion of the pension which the member may, in accordance with the Rules, elect to commute; and / or to purchase an annuity in accordance with the companys Rules. 2) Upon Death To provide for payment of annuity/pension on the life of the beneficiary, in accordance with the Trust rules as framed by the company. 3) Upon Withdrawal 1. To transfer the value of vested benefits to another Superannuation Scheme, if permissible by Trust rules framed by the respective Trustees.
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2. To retain the value of the vested benefits under the policy and provide for a pension from the normal retirement date to the member or to the beneficiary in the event of death of the member prior to his retirement date. 3. To provide for immediate payment of the pension benefit in accordance with Trust rules as framed by the company.

Tax Benefits under Income Tax Act, 1961:

For the employer 1. Annual contributions are treated as deductible business expenses/s 36(1)(iv) 2. Maximum ordinary annual contribution an employer can make is27% (Provident Fund + Superannuation) of employees annual salary - Rule 87 3. 3. Entire income of the fund is tax free u/s 10(25)(iii)

TATA AIA Life Retirement Assure Group Gratuity Scheme Policy Meaning
As per the Payment of Gratuity Act 1972, an employer is obliged to pay gratuity to an employee after he/she has rendered continuous service of at least 5 years. Gratuity is payable to such an employee on: 1) Normal retirement 2) Resignation/early retirement Death or disablement due to accident or disease (completion of 5 years of service is not necessary in such cases).

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How will the Employer/Trustee contribute to the Gratuity Scheme? Employer/Trustee of the Gratuity Scheme shall fund for gratuity liability by: 1) Remitting the recommended contribution for the past service and an annual contribution for the future service 2) Transferring existing assets if any to TATA AIA Life based on mutually agreed asset valuation.

How does the Unit Linked Gratuity Plan Structure work? 1) The Fund will be managed on a unitized basis. 2) Any contribution received will be converted into units based on the applicable fund unit price. 3) The fund value of the Gratuity Fund at any given time is based on the unit price declared at the close of business on the date on which the units are allocated.

Tax Benefits for the Employer*

1) Employers contribution to approved gratuity fund is an deductible business expenditure U/s 36(1)(v) as under: 2) Initial Contribution is allowed as deductible business expense to the extent of 8.33% of the member's salary for each year of employees past service. (Rule 104) 3) Ordinary annual contributions are allowed to the extent of 8.33% of the employees salary. Interest Income on the fund is nontaxable in the hands of the Trustees u/s 10(25) (IV).

Tax Benefits for the Employee*

Gratuity received is exempt from tax up to half a months salary for every completed year of service or Rs. 3.5 lakhs, whichever is less u/s 10(10).

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* Tax benefits are available as per the provisions of Income-tax Act, 1961 and subject to amendments thereof from time to time. To know whether you are eligible for above mentioned tax benefits, please consult your own professional advisors and TATA AIA Life Insurance Company Limited is not responsible in case you do not get any tax benefits stated above. Please note that the prevailing andapplicable tax laws shall be final and conclusive on the matter and TATA AIA Life Insurance Company Limited is not responsible for the same at any time.

In Built Death Benefit

1) As part of the scheme, an additional benefit of Life Insurance Cover is included. 2) In the unfortunate event of a serving employee's death, the coverage would provide for a lump sum payment equal to sum assured depending on the life cover opted by the Trustees with a minimum of Rs. 1,000/-.

TATA AIA Life Assure Golden Years Plan

Meaning
TATA AIA Life Assure Golden Years (Assure Golden Years) is an endowment policy that provides both safety and steady returns. In the unfortunate event of your death, your dependents will receive the sum assured; otherwise your savings will continue to grow. Should you live past the term of the policy, you will receive both the sum assured as well as a host of bonuses.

Key Features
1) A guaranteed addition of 10% of the sum assured if the policy has been in force for 10 years or more, is payable on death or maturity. 2) A reversionary bonus is payable on death or maturity.

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3) A Terminal bonus paid on maturity or death if the policy has been in force for a minimum 10 years. 4) Reversionary and Terminal bonuses are non-guaranteed and are dependent on Company performance.

Tax Benefits, Riders and Age Eligibility

1) Premiums paid under this plan are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. Any sum received under this plan is exempt from tax under section 10(10D) of the Income Tax Act, 1961.* 2) Term, Accident, Disability and Critical Illness riders are available for added protection. 3) Policy duration runs from the time of purchase up to age 60. 4) Policy is available for persons between 18 to 50 years of age.

TATA AIA Life Maha Life Gold Plan

Meaning
This unique policy is an ideal planning vehicle to fund your retirement. It provides a steady income and insurance coverage for life. Premiums are payable only for the first 15years, and can be used to cover the future expenses of your children.

Key Features
1) A guaranteed annual coupon of 5% of the sum assured every year for the rest of the insureds term from the 10th policy anniversary. 2) Yearly cash dividends are available from the 6th policy anniversary onwards (depending on Company performance). 3) The entire sum assured is paid tax-free as per current Income Tax Laws.

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Tax Benefits, Riders and Age Eligibility

1) The guaranteed 5% coupon and non-guaranteed cash dividends are tax free as per current Income Tax Laws. 2) Premiums paid under this plan are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. Any sum received under this plan is exempt from tax under section 10(10D) of the Income Tax Act, 1961.* 3) Disability, Accident, Term and Critical Illness riders are available for added protection at a nominal extra cost. (For juveniles, only Payer Benefit Rider is available). 4) Policy available for persons between 0 years and 60 years of age.

TATA AIA Life Nirvana plus Plan

Meaning
The TATA AIA Life Nirvana Plus (Nirvana Plus) policy is Indians first and only pension policy with a guaranteed addition of 10% of the sum assured every 5 years. You can choose from three levels of cover, which is your amount of Sum Assured: Rs. 1 lakh, 2 lakhs & 4 lakhs. You can also decide the age you want to retire: 55, 58 or 60 years of age.

Key Features
1) 10% of sum assured is added to your sum assured for every 5 years of paid premiums. 2) Rs. 1 lakh will be paid directly to you should you be diagnosed with a covered critical illness (after a 30 day survival period) for first 3 years of the policy. 3) Deaths that occur during the period of the policy will result in an immediate payment of the full sum assured to your beneficiary, plus guaranteed additions and bonuses (if any).

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4) Deaths that occur due to accidental causes during the plan period will result in an immediate payment of double the sum assured, plus guaranteed additions and bonuses (if any). 5) Payment of up to one third of your Sum Assured as lump sum cash upon reaching your chosen retirement age. The remainder is used to buy a monthly income plan that will generate a monthly cash income. 6) A reversionary bonus will be declared and credited from the 6th policy anniversary onwards. 7) A terminal bonus will be paid upon maturity or death if the policy has been in force for 10 years. 8) Bonus is not guaranteed and will depend on the performance of the company.

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CLAIMS PROCESS IN LIFE INSURANCE

Filing a Life Insurance Claim
Claim settlement is one of the most important services that an insurance company can provide to its customers. Insurance companies have an obligation to settle claims promptly. You will need to fill a claim form and contact the financial advisor from whom you bought your policy. Submittal relevant documents such as original death certificate and policy bond to your insurer to support your claim. Most claims are settled by issuing a cheque within 7 days from the time they receive the documents. However, if your insurer is unable to deal with all or any part of your claim, you will be notified in writing.

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Types of claims
1) Maturity Claim On the date of maturity life insured is required to send maturity claim /discharge form and original policy bond well before maturity date tenable timely settlement. Most companies offer/issue postdated cheques and/ or make payment through ECS credit on the maturity date. In case of delay in settlement kindly refer to grievance redressal.

2) Death Claim (including rider claim) In case of death claim or rider claim the following procedure should be followed.

Follow these four simple steps to file a claim:

Claim intimation/notification The claimant must submit the written intimation as soon as possible tenable the insurance company to initiate the claim processing. The claim intimation should consist of basic information such as policy number, name of the insured, date of death, cause of death, place of death, name of the claimant. The claimant can also get a claim intimation/notification form from the nearest local branch office of the insurance company or their insurance advisor/agent. Alternatively, some insurance companies also provide the facility of downloading the form from their website.

Documents required for claim processing The claimant will be required to provide a claimant's statement, original policy document, death certificate, police FIR and post mortem exam report (for accidental death), certificate and records from the treating doctor/hospital (for death due to illness) and advance discharge form for claim processing. Based on the

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sum at risk, cause of death and policy duration, insurance companies may also request some additional documents.

Submission of required documents for claim processing For faster claim processing, it is essential that the claimant submits complete documentation as early as possible. A life insurer will not be able to take a decision until all the requirements are complete. Once all relevant documents, records and forms have been submitted, the life insurer can take a decision about the claim.

Settlement of claim As per the regulation 8 of the IRDA (Policy holder's Interest) Regulations, 2002, the insurer is required to settle a claim within 30 days of receipt of all documents including clarification sought by the insurer. However, the insurance company can set a practice of settling the claim even earlier. If the claim requires further investigation, the insurer has to complete its procedures within six months from receiving the written intimation of claim.

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Chapter 4
Human Resource

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DEFINITION OF AGENT
A businessman who buys or sells for another in exchange for a commission. A person who sells insurance policies. There are two main types of insurance agents: Adaptive agent can sell only the insurance policies of the company that employs him or her. An independent agent sells the policies of many different companies and attempts to find the best policy for the insurance buyer. An independent agent may also be called an insurance broker.

Procedure followed by an applicant to be an insurance agent

Short title and commencement These regulations may be called Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000.They shall come into force on the date of their publication in the Official Gazette.

Definitions In these regulations, unless the context otherwise requires, 1. Act means the Insurance Act, 1938 (4 of 1938);4. HUMAN RESOURCES 2. Approved Institution means an Institution engaged in education and/or training particularly in the area of insurance sales, service and marketing, approved and notified by the Authority; 3. Authority means the Insurance Regulatory and Development Authority established under the provisions of Section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999); 4. Composite insurance agent means an insurance agent who holds a license to act as an insurance agent for a life insurer and a general insurer; 5. Corporate Agent means a person other than an individual as specified in clause (i); 6. Designated person means an officer normally in charge of marketing operations, as specified by an insurer, and authorized by the Authority to issue or renew licenses under these regulations;
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7. Examination Body means an Institution, which conducts pre-recruitment tests for insurance agents and which is duly recognized by the Authority; 8. License means a certificate of license to act as an insurance agent issued under these regulations; 9. Person means 1. An individual 2. A firm 3. A company formed under the Companies Act, 1956 (1 of 1956), and includes a banking company as defined in clause (4A) of section 2of the Act;

Issue or renewal of license

A person desiring to obtain or renew a license (hereinafter referred to as the applicant) to act as an insurance agent or a composite insurance agent shall proceed as follows:-

The applicant shall make an application to a designated person. 1. In form irda-agents-va, if the applicant is an individual 2. In form irda-agents-vc, if the applicant is a firm or a company

If the designated person refuses to grant or renew a license under this regulation, he shall give the reasons therefor to the applicant.

Qualifications of the applicant

The applicant shall possess the minimum qualification of a pass in 12thStandard or equivalent examination conducted by any recognized Board/Institution, where the applicant resides in a place with a population of five thousand or more as per the last census, and a pass in 10thStandard or equivalent examination from a recognized Board/ Institution if the applicant resides in any other place.
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Practical Training
1) The applicant shall have completed from an approved institution, at least, one hundred hours practical training in life or general insurance business, as the case may be, which may be spread over three to four weeks, where such applicant is seeking license for the first time to act as insurance agent. Provided that the applicant shall have completed from an approved institution, at least, one hundred fifty hours practical training in life and general insurance business, which may be spread over six to eight weeks, where such applicant is seeking license for the first time to act as a composite insurance agent.

2) Where the applicant, referred to under sub-regulation (1), is 1. An associate/fellow of the institute of chartered accountants of India, New Delhi. 2. An associate/fellow of the institute of costs and works accountants of India, Calcutta. 3. An associate/fellow of the institute of company secretaries of India, New Delhi. 4. An associate/fellow of the actuarial society of India, Mumbai. 5. A master of business administration of any institution / university recognized by any state government or the central government. 6. Possessing any professional qualification in marketing from any institution / university recognized by any state government or the central government.

3) An applicant, who has been granted a license after the commencement of these regulations, before seeking renewal of license to act as an insurance agent, shall have completed, at least twenty-five hours practical training in life or general insurance business, as the case maybe, from an approved institution.

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Examination
The Applicant shall have passed the pre-recruitment examination in life or general insurance business, or both, as the case may be, conducted by the Insurance Institute of India, Mumbai, or any other examination body.

Fees payable
1. The fees payable to the Authority for issue or renewal of license to act as insurance agent or a composite insurance agent shall be rupees two hundred and fifty. 2. The additional fees payable to the Authority, under the circumstances mentioned in sub-section (3) of section 42 of the Act, shall be rupees one hundred.

Cancellation of license
The designated person may cancel a license of an insurance agent, if the insurance agent suffers, at any time during the currency of the license, from any of the disqualifications mentioned in sub-section (4) of section 42 of the Act, and recover from him the license and the identity card issued earlier.

Issue of duplicate license

The Authority may issue a duplicate license replace a license lost, destroyed, or mutilated on payment a fee of rupees fifty.

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FUNCTIONS/RESPONSIBILITIES OF AGENT
Every Insurance Agent shall,
1. Identify himself and the insurance company of whom he is an insurance agent. 2. Disclose his license to the prospect on demand. 3. Disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan. 4. Disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect. 5. Indicate the premium to be charged by the insurer for the insurance product offered for sale. 6. Explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance contract. 7. Bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called insurance agents confidential report) along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect. 8. Inform promptly the prospect about the acceptance or rejection of the proposal by the insurer.

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No insurance agent shall

1. Solicit or procure insurance business without holding a valid license. 2. Induce the prospect to omit any material information in the proposal form. 3. Induce the prospect to submit wrong information in the proposal former documents submitted to the insurer for acceptance of the proposal. 4. Behave in a discourteous manner with the prospect. 5. Interfere with any proposal introduced by any other insurance agent. 6. Offer different rates, advantages, terms and conditions other than those offered by his insurer.

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Chapter 5
CONCEPTUAL DISCUSSION

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THEORY & CONCEPTS USED IN THE PROJECT

WHAT IS AN INVESTMENT?
Investment is the commitment of money or capital to purchase financial instruments o r o t h e r a s s e t s i n o r d e r to gain profitable returns i n t h e f o r m o f interest,. I t i s r e l a t e d t o saving or deferring consumption. Investment is involved in many areas of the economy, s u c h a s business management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time.

WHAT IS INSURANCE?
GENERAL DEFINITION: In the words of John Magee, Insurance is a plan by themselves which large number of people associate and transfer to the shoulders of all, risks that attach to individuals. "

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FUNDAMENTAL DEFINITION: In the words of D.S.Hansell, Insurance accumulated contributions o f a l l p a r t i e s participating in the Scheme.

CONTRACTUAL DEFINITION:

In the words of Justice Tindall,"Insurance is a contract in which a sum of money is paid to the assured as consideration of insurers incurring the risk of paying a large sum upon given contingency."

CHARACTERISTICS OF INSURANCE

Sharing of risks

Cooperative device

Evaluation of risk

Payment on happening of a special event

The amount of payment depends on the nature of losses incurred.

Insurance is a plan, which spreads the risk and losses of few people among a large number of people.

The insurance plan is a plan in which the insured transfers his risk on the insurer.

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FUNCTIONS OF INSURANCE
PRIMARY FUNCTIONS
Provideprotection:Insurance cannot check the happening of the risk, but can provide for the losses of risk.

Collective bearing of risk:

Insurance is a device to share the financial losses of few among many others.

Assessment of risk: I n s u r a n c e d e t e r m i n e s t h e p r o b a b l e v o l u m e o f r i s k b y evaluating various factors that give rise to risk.

SECONDRY FUNCTIONS:
Prevention of losses: Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions.

Small capital to cover large risks: Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty.

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WHY WE NEED INSURANCE

Premature Death
1 out of 4 people dont reach the age of 60.

1. You are providing your family with a lifestyle.

2. This lifestyle is dependent on your continued income generating capability.

Living too long

7 out of 10 people endure retirement instead of enjoying it.

1. Do you want financial independence post retirement?

2. Imagine living beyond your working years on a depleted income.

3. My responsibility is to help you secure a financially stable future post retirement.

Childrens Future
To get a premier MBA degree in year 2015 will cost Rs. 18 lakh.

1. It is your responsibility to provide your children with best possible education they can have. 2. Do you want to compromise on their future? My responsibility is to help you build financial assets for your childrens future.

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DO I NEED INSURANCE?
HUMAN LIFE CONCEPT
Y o u r l i f e i s yo u r m o s t v a l u a b l e a s s e t . T h i s i s e a s i l y p r o v e d i f w e w e r e t o a s s i g n m onetary value to your life; this value depends on your incomeearning potential or your Human Life Value. Your income supports your family. Helps them to get the most out of life. Month after month, year after year, you and your dependents live the best way you can use the money you earn. This money enables your household to run smoothly, your children to college, takes care of the medical bills, your vacations and helps maintain your lifestyle. On the basis of your income or earning potential, we can calculate your Human Life Value. A simple rule of thumb to compute it as f ollows: multiply your present annual income by the number of years until you plan to retire. This does not take in factors such as inflation or an increase in your income over time. T h e r e f o r e , yo u r H u m a n L i f e V a l u e i s a g r e a t d e a l h i g h e r t h a n t h e a m o u n t c a l c u l a t e d above. What if an unfortunate incident happens in your life and you were unable to work? Your income would stop. Your family is then, at a risk of losing all your future income. The potential cost of losing your income is too great to ignore.

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WHAT ARE MUTUAL FUNDS?

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments and other securities.

Mutual funds have a fund manager who invests the money on behalf of the investors by buying / selling stocks, bonds etc.

It is substitute for those who are unable to invest directly in equities or debt because of resource, time or knowledge constraints. Benefits include professional money management, buying in small amounts and diversification.

Mutual fund units are issued and redeemed by the Fund Management Company based on the fund's Net Asset Value (NAV), which is determined at the end of each trading session. NAV is calculated as the value of all the shares held by the fund, minus expenses, divided by the number of units issued.

Mutual Funds are usually long term investment vehicle though there are some categories of mutual funds, such as money market mutual funds which are short term instruments.

Currently, the worldwide value of all mutual funds totals more than $US 26 trillion. The United States leads with the number of mutual fund schemes. There are more than 8000 mutual fund schemes in the U.S.A.

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Comparatively, India has around 1000 mutual fund schemes, but this number has grown exponentially in the last few years. The Total Assets under Management in India of all Mutual funds put together touched a peak of Rs. 5,44,535 crs. At the end of August 2008.

WHAT ARE GOVT. BONDS?

A bond is a debt investment in which an investor loans a certain amount of money, for ascertain amount of time, with a certain interest rate, to a company. A government bond Is a bond issued by a national government denominated in the country's own currency? Bonds issued by national governments in foreign currencies are normally referred to as sovereign bonds.

The first ever government bond was issued by the English government in 1693 to raise money to fund a war against France. It was in the form of a tontine. Government bonds are usually referred to as risk-free bonds, because the government can raise taxes to redeem the bond at maturity.

Some counter examples do exist where government has defaulted on its domestic currency debt, such as Russia in 1998 (the ruble crisis"), though this is very rare. As an example, in the US, Treasury securities are denominated in US dollars.

In this instance, the term "risk-free" means free of credit risk. However, other risks still exist, such as currency risk for foreign investors (for example on-US investors of US Treasury securities would have received lower returns in 2004 because the value of the US dollar declined against most other currencies).

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Secondly, there is inflation risk, in that the principal repaid at maturity will have less purchasing power than anticipated if the inflation outturn is higher than expected. Many governments issue inflation-indexed bonds, which should protect investors against inflation risk.

WHAT ARE FIXED DEPOSITS?

Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on deposit earns a fixed rate of interest, according to the terms and conditions that govern the account.

The actual a m o u n t o f t h e f i x e d r a t e c a n b e i n f l u e n c e d b y s u c h f a c t o r s a t t h e t yp e o f c u r r e n c y involved in the deposit, the duration set in place for the deposit, and the location where the deposit is made. Fixed deposits are a credible way to make a return on investment that is somewhat higher than a standard savings.

T h e u s e o f f i x e d d e p o s i t s c a n a l s o b e h e l p f u l w h e n working with various types of currency. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it is possible to choose the type of currency involved in the deposit and lock in a rate of interest.

If the choice of currency is a good one, this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the deposit and earn more than with a standard fixed deposit strategy. However, going with an FCFD does contain a slightly higher amount of risk, since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled.

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If the currency did not fare well in the interim, there is some chance of obtaining a loss, due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete.

The interest rate varies between 4 and 11 percent. The tenure of an FD can vary from 10, 15 or 45 days to 1.5 years and can be as high as 10 years. These investments are safer than Post Office Schemes as they are covered under the Deposit Insurance & Credit Guarantee Scheme of India. They also offer income tax and wealth tax benefits.

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Chapter 6
Marketing

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TATA AIA LIKE KEY BUSINESS STRATEGY

Sound underwriting process is important to ensure long term sustenance. Life insurance is a long term business. Regular persistent business is the key to profitable business. Pricing rightly is another key for profitable business. At TATA AIA life, we believe in persistent regular business, year on year. TATA AIA life wants to be the best in the business. This is only possible when our customers rank us as the best. We are on the right track. Market of different private players of 2009

Distribution Channels in Bank & Insurance

Traditionally, insurance products have been promoted and sold principally through agency systems in most countries. With new developments in consumers behaviors, evolution of technology and deregulation, new distribution channels have been developed successfully and rapidly in recent years. Bank& insurance make use of various distribution channels: 1. Career Agents 2. Special Advisers 3. Salaried Agents 4. Bank Employees / Platform Banking 5. Corporate Agencies and Brokerage 6. Firms Direct 7. Response 8. Internet
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9. E-Brokerage 10. Outside Lead Generating Techniques

The main Characteristics of each of these Channels are

1. Career Agents
Career Agents are full-time commissioned sales personnel holding an agency contract. They are generally considered to be independent contractors. Despite this limitation on control, career agents with suitable training, supervision and motivation can be highly productive and cost-effective. . Moreover their level of customer service is usually very high due to the renewal commissions, policy persistency bonuses, or other customer service-related awards paid to them.

2. Special Advisers
Special Advisers are highly trained employees usually belonging to the insurance partner, who distribute insurance products to the banks corporate clients. Banks refer complex insurance requirements to these advisors. The Clients mostly include affluent population who require personalized and high quality service. Usually Special advisors are paid on a salary basis and they receive incentive compensation based on their sales.

3. Salaried Agents
Having Salaried Agents has the advantages of them being fully under the control and supervision of bank & insurance. These agents share the mission and objectives of the bank & insurance. The only difference in terms of their remuneration is that they are paid on a salary basis and career agents receive incentive compensation based on their sales.

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4. Platform Bankers
Platform Bankers are bank employees who spot the leads in the banks and gently suggest the customer to walk over and speak with appropriate representative within the bank. The platform banker may be a teller or personal loan assistant and the representative being referred to may be attained bank employee or a representative from the partner insurance company.

5. Direct Response
In this channel no salesperson visits the customer to induce a sale and no face-to-face contact between consumer and seller occurs. The consumer purchases products directly from the bank & insurance by responding to the company's advertisement, mailing or telephone offers.

6. Internet
Internet banking is already securely established as an effective and profitable basis for conducting banking operations. The reasonable expectation is that personal banking services will increasingly be delivered by Internet banking. Bank& insurance can also feel confident that Internet banking will also prove an efficient vehicle for cross selling of insurance savings and protection products.

7. E-Brokerage
Banks can open or acquire an e-Brokerage arm and sell insurance products from multiple insurers. The changed legislative climate across the world should help migration of bank & insurance in this direction. The advantage of this medium is scale of operation, strong brands, easy distribution and excellent synergy with the internet capabilities.

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DISTRIBUTION CHANNEL OF TATA AIA

The winds of liberations initiated vast changes in the functions of the industry today. Increasing number of multinational partnership with private insurer have paved the way for a radical shift in insurance selling through number of new distribution channels besides bringing about more awareness on the need for insurance and also stressing on the important role technology can play.

In the developed markets, many insurer have a prefer mode of distribution. In India many players are hedging their bets because the need for or the sale outweighs consideration of focus and because non-agency distribution, which is presently operational for the last two years, forms a basis for studies.

TATA AIA has a corporate agency channel, which handles its corporate agents and has tie-ups with 38 corporate houses. Insurer wants to lower distribution costs by finding more efficient channels. The new private players are developing multiple channel models; many insurer use are plan to use several banks as distributors .because most of bank have strong religion bias, in this regards has agreement with HBSC through that its doing both life insurance and general insurance. Because most banks have strong religious bias, Insurer can use banks without creating large overlap. Many large are sourcing product several insurer acting as manufacturer.

As important distribution challenge facing insures is the ruler and social sector legislative requirements stipulated in terms of markets opening. For TATA AIA its takes ruler insurance as an opportunity and not an obligation. For achieving objective in an rural area it has also tie with NGOs.in this project mainly focus on distribution channel of life insurance of TATA AIA also.as the whole topic of distribution channel can be known for the both company of TATA AIA. Gradually channels are incorporating day by day for the growth of business.

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OBJECTIVES OF THE STUDY

The objectives mark the right direction to carry out any study. So, the objectives of this study are as under:

To learn and understand the market segmentation of insurance products.

To identify the insurance needs of the Indian population with respect to their emotional, physical and financial conditions.

To study the various factors which influence the purchase of insurance products

To match the needs of the population with the products in hand or else design a new product.

To understand the focus of the competitors. To understand the real life situation of the insurer.

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Chapter 7
Research Methodology

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RESEARCH METHODOLOGY
The research is carried on in a proper planned and systematic manner. This methodology includes: Familiarization with the concept of insurance and its various terms. Thorough study of the information collected.

Conclusions based on findings. The research methodology which is adopted to conduct this study is both qualitative as well as quantitative.

Quantitative
In order to understand the market segmentation of insurance products and to study the various factors which influence the purchase decision of insurance products require the quantitative study.

RESEARCH DESIGN
DESCRIPTIVE RESEARCH
This study is based on a descriptive research design wherein the risks a n d r e t u r n s associated

with the various products have been studied and the reasons for customer perception regarding these products have been found out.

SAMPLE SIZE
Total sample of 100 was selected.

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SAMPLE DESIGN
As the research is based on analyzing the consumer preference among various investments for that a sample size of 100 was taken which was picked up on random basis for the purpose of survey. Rating scale has been adopted to conduct this study.

SAMPLE UNIT
The sample unit considered for this study is Investor who invests in various avenues available in the market. The respondents have been selected from the Universe defined above.

SOURCES OF DATA COLLECTION:

Both the Primary and Secondary sources have been used to collect the desired data for the study.

Primary data
Collection has been done through the means of:

Questionnaires
In order to get the primary data, a close ended questionnaire has been design to conduct the study.

InterviewsIn addition to the questionnaire, some other relevant questions were also asked to get the information regarding their marked choices.

Secondary data:
T h e s e i n c l u d e b o o k s , t h e i n t e r n e t , c o m p a n y b r o c h u r e s , p r o d u c t brochures, the company website, competitors websites etc., newspaper articles etc.

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Chapter 8
DATA ANALYSIS & INTERPRETATION

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DATA ANALYSIS
1. What is your age? (a) Less Than 20 (c) 20-30 (b) 30-45 (d) More Than 45

SAMPLE SIZE 100 Less than 20 yr 20-30 yr 30-45yr Above 45 yrs TOTAL

FREQUENCY 12 37 33 18 100

PERCENTAGE 12 37 33 18 100

Sales
40 35 30 25 20 15 10 5 0 less than 20 20-30 30-45 more than 45 12 18 37 33

Inference
It can be observed from the pie-chart that: 12% of the investors are less than that of 20 years of age. 37% lie in the age group of 20-30 years as such investors are returns oriented and are risk takers. 33% lie in the age group of 30-45 years as these investors want safe products. Only 18% of the investors lie in the age group of more than 45 years. Such investors are risk averse

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2. What is your marital status?

(a) Married (b) Unmarried

SAMPLE SIZE 100 Married Unmarried TOTAL

FREQUENCY 82 18 100

PERCENTAGE 82 18 100

90 80 70 60 50 40 30 20 10 0

82

18

married

unmarried

Inference
It can be seen from the pie-chart that: 82% of the investors are married as they have dependents so they are more conscious towards the health and life of their family members. 18% of the investors are unmarried.

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3. What is your annual income?

Less than 1,00,000 1,00,000-2,50,000 SAMPLE SIZE 100 Income less than 1 Lac 1-2.5 Lac 2.5- 5 More than 5 Lac TOTAL More than 5,00,000 2,50,000-5,00,000 FREQUENCY PERCENTAGE 15 36 40 9 100 15 36 40 9 100

data

45 40 35 30 25 20 15 10 5 0 less than 1lac 1-2.5 lac 15 36

40

2.5-5

more than 5

Inference
It can be derived from the pie-chart that 15% of the investors are in the income group of less than 1 lac. 36% of the investors lie in the income slab of 1-2.5 lacs. 40% of the investors are in the income group of 2.5-5 lacs. 9% of the investors lie in the age group of more than 5 lacs.

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4. Which Avenues do you prefer for investment?

Stock Market Govt. Bonds Any other SAMPLE SIZE 100 Stock Market Mutual Funds Govt. Bonds Fixed Deposit Any other TOTAL FREQUENCY 27 22 32 9 10 100 PERCENTAGE 27 22 32 9 10 100 Mutual funds Fixed deposit

DATA
35 30 25 20 15 10 5 0 Stock market Mutual Fund Govt Bond Fixed deposit Any other 9 10 27 22 32

InferencesIt can be inferred from the pie-chart that 27% of the investors invest in stock market due to its high returns capability and investors are risk takers as well. 22% of the investors invest in mutual funds as they are quite structured avenues, offer good returns and are safe too. 32% of the investors invest in govt. bonds as they are safe investment options and risk associated is less. 9% of the investors invest in fixed deposits as they are the traditional investment avenues 10% of the investor invest in other investment programs.

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5. Are you aware about the benefits of Insurance?

o Yes o No

SAMPLE SIZE 100 Yes No TOTAL

FREQUENCY 91 09 100

PERCENTAGE 91 09 100

100 80 60 40 20 0

91

9 yes No

InferenceIt can be seen from the pie-chart that 91% of the investors are aware about the benefits of insurance. 7% of the investors are unaware of the benefits of insurance

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6. Are you and your family members insured? All members including you No one
SAMPLE SIZE 100 All members including you Only you No one TOTAL FREQUENCY 77 13 10 100 PERCENTAGE 77 13 10 100

Only you

90 80 70 60 50 40 30 20 10 0 all members including you only you no one 13 10 77

InferenceIt can be derived from the pie-chart that 77% of the investors have taken insurance plans for their family as well as themselves as they are concerned about their dependents. 13% of the investors have taken insurance plans for themselves only. 1 0 % o f t h e i n v e s t o r s h a v e n e i t h e r t a k e n i n s u r a n c e p l a n s f o r their family nor for themselves

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7. If yes, from which company are you insured?

LIC HDFC OTHERS ICICI TATA AIA

SAMPLE SIZE 100 LIC ICICI HDFC TATA AIA Others Total

FREQUENCY 22 20 15 25 08 90

DATA
30 25 25 20 15 15 10 5 0 LIC ICICI HDFC TATA AIA Other 8 22 20

InferenceIt can be observed from the pie-chart that 22 of the investors invest in LIC insurance plans due to their good records of returns and safety. 20 the investors invest in ICICI as it holds a good record in private sector insurers and has huge customer equity. 15 of the investors have taken insurance plans from HDFC due to their good experiences with it. 25 have chosen TATA AIA for its attractive scheme and good service. 8 have taken plans from other insurance companies like Birla sun life, SBI life
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8. Which of the following features which affects your purchase? Brand Time Period Returns EMI

SAMPLE SIZE 100 Brand EMI Returns Time period TOTAL

FREQUENCY 32 08 43 17 100

PERCENTAGE 32 08 43 17 100

brand 50 40 30 20 10 0 brand 32

Emi

returns 43

time period

17 8

Emi

returns

time period

InferenceIt can be seen from the pie-chart that 32% of the investors are affected by the brand image of the company in the market as it reflects their past performances as well. 8% of the investors are affected by EMIs that is demanded by the plan. 43% are concerned with the returns offered by the plan. 17% are concerned with the tenure of the plans

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9. What is the annual premium you are paying? 5000-10000 25000-50000 10000-25000 Above 50000

SAMPLE SIZE 100 5000-10000 10000-25000 25000-50000 Above 50000 TOTAL

FREQUENCY 09 36 38 17 100

PERCENTAGE 9 36 38 17 100

17

9 36

5000-10000 10000-25000 25000-50000

38

Above 50000

InferenceIt can be seen from the pie-chart that 9% of the investors pay an annual premium between Rs.5000-10000. 36% pay an annual premium in the range of Rs.10000-25000. 38% pay an annual premium of Rs.25000-50000. 17% of the investors pay an annual premium above Rs.50000

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Q10.Which type of plan you prefer now? Traditional plans ULIPs SAMPLE SIZE 100 Traditional ULIPs TOTAL FREQUENCY 12 88 100 PERCENTAGE 12 88 100

Traditional

ULIP
12%

88%

Inference:
It can be observed from the pie-chart that 88% of the investors prefer ULIPs over Traditional plans due to several benefits they offer. 12% of the investors still prefer Traditional plans over ULIPs due to unawareness about the products and its benefits.

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11. If your preferred avenue has been changed then please mentions the reason Potential for better returns. Flexibility in investment. Greater transparency Higher liquidity

SAMPLE SIZE 100 Potential for better return Greater transparency Flexibility in investment Higher liquidity TOTAL

FREQUENCY 52 20 18 10 100

PERCENTAGE 52 20 18 10 100

10
18

Potential for better return Greater Transparen cy Flexibility in Investment Higher Liquidity

20

52

InferenceIt can be seen from the pie-chart that 52% of the investors are interested in potential for better returns. 20% of the investors prefer transparent services. 18% of the investors want flexibility in investment. 10% of the investors invest according to the companys liquidity.

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12. Occupation Wise classification:

Occupation Serviceman Businessman Student Housewive

No Of Respondent 40 25 20 15

OCCUPATION
45 40 35 30 25 20 15 10 5 0 Serviceman Businessman Student Housewife

Interpretation: This charts depicts that 40% servicemen and25% business men are respondent in my report.

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13. Which kind of policies do you have?

NO 1 2 3 4 5

POLICIES LIFE INSURANCE HEALTH INSURANCE GENERAL INSURANCE ALL OF THEM TOTAL

N0 of Respondent 25 11 14 50 100

PARCENTAGE 25% 11% 14% 50% 100%

POLICIES
60 50 40 30 20 10 0 Life insurance Health Insurance General Insurance All Of Them

POLICIES

Interpretation: It is clear from the chart that 50% people come to take all policies its mean customer have more aware to the all type of insurance.

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14. Are you aware all the plans and updates from company?

PLANS AND UPDATES YES NO TOTAL

N0 of Respondent 67 33 100

PARCENTAGE 67% 33% 100%

PLANS AND UPDATE

33%

YES NO

67%

Interpretation: It is clear from the chart that 48 people say yes and 24say no . Its mean customer have more aware to the all plans and updates for the company.

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15. How do you come to know about this company product?

NO 1 2 3 4 5

SOURCE NEWS PAPER AGENT ADVERTISMENT MOUTH OF SPREAD TOTAL

NO OF RESPONDENT 19 45 19 17 100

PARCENTAGE 19% 45% 19% 17% 100%

AWARENESS
50 45 40 35 30 25 20 15 10 5 0 News Paper Agent Advertisment Mouth Of Spread AWARENESS

Interpretation: This chart shows that agent is the most communicational tool for insurance company.

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Chapter 9
Findings, Recommendations &Conclusion

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FINDINGS
After collecting primary data and analyzing them graphically it can be concluded that:

12% of the investors are less than that of 20 years of age.37% lie in the age group of 20-30 years as such investors are returns oriented and are risk takers.33% lie in the age group of 3045 years as these investors want safe products with assured returns.Only 18% of the investors lie in the age group of more than 45 years. Such investors are risk averse.

It was found that in a sample of 100, 36 (36%) of people had annual income between Rs.100000-250000. Out of these 36, 14 people pay a premium below Rs. 10000, 22 pay premiums between Rs. 10000-20000.

In the same sample of 100, 40 (40%) people had annual income between Rs. 250000-500000. Out of these 25, 7 people pay premium between Rs. 10000-20000, 14 people pay premium between Rs. 20000-50000, and 9 of them pay premium above Rs. 500000.

The highest market share from the sample was of LIC with 47% respondents having LIC policy, followed by ICICI PRUDENTIAL with a market share of 27%, HDFC STANDARD LIFE with 11% share , TATA AIA with 5% and OTHERS with 10% share.

Most people choose LIC for its Brand Image and since it is a PSU, also it offers to its customers low EMIs, but on the other hand private players offer better returns.

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It was found that most of the people considered Returns 43% as a major factor while buying insurance with positive responses, 32% Brand Image as the prime factor, 8(8%) prefer EMI and 17(14%) prefer Time Period.

The most preferred avenue for investment was found out to be Stock Market preferred by 37% respondents, followed by Mutual Fund preferred by 22% respondents, 32% preferred Govt. Bonds, 9% preferred Fixed Deposit.

Out of the entire sample of 100, 78(78%) preferred Traditional Insurance Plans, and 22(22%) preferred ULIPs 3 years ago but in present scenario 12% prefer Traditional Plans and 88% prefer ULIPs. Among the reasons for this change 52(52%) respondents prefer Potential for better returns, 20(20%) prefer Greater Transparency, 18(18%) prefer Flexibility in investment and 10(10%) prefer Higher liquidity.

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RECOMMENDATIONS
Recommendations for whole Insurance Industry
As it can be seen that that most of the investors are inclined toward stock market and mutual funds there is a strong need to take some important steps on the part of government and insurance companies which would help this sector grow at a faster pace.

The government should make life insurance mandatory, because most of the people live with the myth I dont need insurance, so this myth should be eradicated from the mind of the consumers by highlighting the benefits of life insurance, government can launch camp to increase awareness especially in the rural sector.

The companies should highlight the advantages of life insurance in comparison together investment avenues such as mutual funds, stock market, as only ULIPs offer returns plus life cover which other investment options do not provide, also capital gains or maturity amount is exempted from tax under Section 10(10) D of the Income Tax Act.

There should be strong distribution channel of the insurance companies so that they are closely connected to consumers, distribution channel that is the agents of life insurance companies are foundation of life insurance business, they must be properly trained by the companies to sell products according to the needs of the customer, give suitable suggestions to the customer to make his/her future secure.

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CONCLUSION
Earlier Life Insurance was taken as an option for risk cover or a tax saving by people. Burin the present scenario the mind set and outlook of people has changed a lot. They now consider Life insurance as an investment opportunity in long run. Clients have also shifted a lot from traditional plans to Unit linked insurance plan (ULIP).

ULIP provide t h e i n v e s t o r w i t h b e n e f i t s l i k e P o t e n t i a l f o r b e t t e r r e t u r n s . U n d e r I R D A g u i d e l i n e s , traditional plans have to invest at least 85% in debt instruments which results in low returns. On the other hand, Ulips invest in market linked instruments with varying debt and equity proportions and if you wish you can even choose 100% equity option.

The state owned insurance companies such as LIC and GIC have limited number of policies to offer to their subscribers while in case of private insurance companies, their policy numbers are many more and the premium amount as well as the maturity period is much competitive as against those of government insurance companies. The private sector insurance players have started exploring the rural markets in which until recently, the state owned companies had the monopoly. Here it can be concluded that the summer internship program, done for partial fulfillment of the MBA course in UPTU University, in TATA AIA Life Insurance Co. Ltd. has been completed successfully.

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Following are the achievements done during the summer internship from 20th JUNE 2013 to 14 AUG 2013. a) Survey done with interest of TATA AIA has been conducted successfully and results are discussed above. b) Sales done during the time have done great business to the company. c) The experience gained during the internship has sharpen my skills and given a corporate exposure.

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SCOPE OF THE STUDY

In the present scenario as our economy is growing and the per capita income is rising people at large have got more money with them to invest in the market, who according to their choice invest in share market, government bonds, life insurance, mutual funds, realestate. so in order to study the consumer preferences, the various factors that influence the buying behavior of a consumer buying life insurance, a sample of 50 was chosen from ALIGARH.

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LIMITATION OF THE STUDY

By working on this project, a lot of knowledge about the insurance sector in INDIA has b e e n g a i n e d . H o w e v e r , t h e r e w e r e m a n y l i m i t a t i o n s o r p r o b l e m s t h a t I f a c e d w h i l e working on this project. The following are the limitations:

Small Sample Size:

The study was relied more on the primary data and the data was collec ted from a small population of 100, therefore, the findings may not be applicable in their true sense when it is applied in general.

Time Constraint:
As the duration of internship was only 8 weeks, therefore, it was very difficult to conduct the entire study about the vast insurance sector

Small Universe:
The stud y is rest ricted to some areas of ALIGARH.

Biased Responses:
The answers of the customers could have been biased which may affect the analysis of the study.

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BIBLIOGRAPHY

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BIBLIOGRAPHY
BOOKS
Insurance Distribution An Introduction, Insurance Series, ICFAI University K ot h a ri , C . R : R e s e a rc h me t h od ol o g y , 2 nd e d i t i o n , 1 9 9 0 , n e w a g e international (p) ltd, New Delhi IC-24, Legal Aspect of Life Insurance issued by IRDA Marketing Management Philip Kotler,13th edition

WEBSITES
http://www.TATA AIA.com http://www.irdaindia.org/ www.google.com http://economictimes.indiatimes.com

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Annexure

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QUESTIONNAIRE
1. What is your age? Less Than 20 30-45 20-30 More Than 45

2. What is your marital status? Married Unmarried

3. What is your annual income? Less than 1,00,000 More than 5,00,000 1,00,000-2,50,000 2,50,000-5,00,000

4. Which Avenues do you prefer for investment? Stock Market Mutual funds Govt. Bonds Fixed deposit

5. Are you aware about the benefits of Insurance?

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Yes No

Q6. Are you and your family members insured? All members including you Only you No one

Q7. If yes, from which company are you insured? LIC HDFC TATA AIA Any other

Q8. Which of the following features affect your purchase? Brand EMI Return Time period

Q9. What is the annual premium you are paying? 5000-15000 15000-30000 30000-50000 More than 50000

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Q10. Which type of plan you prefer now? Traditional UPILs

Q11. If your preferred avenue has been changed then please mention the reason? Potential for better return Greater transparency Flexibility in investment Higher liquidity

12. Occupation Wise classification:

Occupation Serviceman Businessman Student Housewive

No Of Respondent

13. Which kind of policies do you have? LIFE INSURANCE HEALTH INSURANCE GENERAL INSURANCE ALL OF THEM TOTAL

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14. Are you aware all the plans and updates from company? YES NO

15. How do you come to know about this company product?

NEWS PAPER AGENT ADVERTISMENT MOUTH OF SPREAD TOTAL

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THANK YOU

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