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1.1 INTRODUCTION TO HEALTH INSURANCE


Health Insurance stands for an insurance policy that eliminates the risk of incurring
medical expenses among people in the event of unfortunate natural or manmade
hazards. A policy agreement is to be signed by the customer to ensure a secure life
since the agreement brings along multiple benefits, viz. regular health check-ups and
cashless treatment across the network of hospitals.

Individual Plans Cashless Hospitalization: Medical expenses are sky-rocketing!


Get health insurance and cover your medical costs. With cashless hospitalization stay
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There is no debating on the importance of having a medical insurance in a country
like India that ranks very low on human life index. Every person must buy a good
health plan that covers medical costs, hospitalization costs, treatment and laboratory
test costs and even critical illness. As is rightly said, “Health is wealth”, one must be
prepared to manage such a situation in life. Don’t get confused with questions like –
Which policy to buy? Does this cover everything? What are the diseases excluded
from this cover? PolicyBazaar is here to resolve all such confusions. Just compare
policies from top health insurers on our website and buy a best health plan. Let us
know your basic requirements and we will find the best suited health insurance
quotes. You can then compare them side by side on parameters like premium, riders,
benefits etc and choose the best fit cover.

Types of Health Policies in India


One needs to ensure the security of health of oneself and the family as well. With the
increasing cost of healthcare and medical treatments across private hospitals in India,
health insurance has become almost mandatory for everyone. Health insurance
ensures not only health security but also hassle-free claim reimbursement. In today’s
world of advancements, people have different choices even when it comes to buying

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health insurance. There are various plans readily available in India to cover every
aspect of a medical emergency. Some popular types of policies are explained below:
 Individual Health Plan - This health insurance policy is designed to cover an
individual against various illnesses with cashless hospitalization and other add-on
features.
 Family Floater Mediclaim – With this health insurance policy, you can cover all
your family members against diseases under a single cover. This cover offers a
fixed sum insured for the family members that can be availed either by an
individual member or as a sum total for treatment of one person.
 Surgery & Critical Illness Policy – This is usually brought as a standalone
policy or a rider in case of treatment against serious illnesses like- cancer, kidney
failure, heart attack, paralysis etc. As the treatment of such diseases is expensive
so the premium is also on a higher side.
 Pre-Existing Disease Cover - After a waiting period of 2-4 years, various
policies offer a cover against the pre-existing diseases -e.g. - diabetes,
hypertension, kidney failure, cancer etc. Pre-existing disease cover includes the
diseases or illness that the policyholder had before buying the policy.
 Senior Citizen Health Plan - This offers to protect you from health issues during
your old age. According to IRDA norms, every insurer must provide cover for
people up to the age of 65 years.
 Preventive Healthcare - Undoubtedly health care is expensive and who wants to
fall sick; anyways. So, now we have preventive health care that offers to take care
of you and not let your fall sick. This includes preventive care treatments like
regular checkups, consultation charges and other tests or x-ray fees concessions.
The idea is to monitor your health at timely intervals and provide overall health
care benefits.
 Maternity Health Insurance - Health insurance companies today provide
coverage against maternity and additional expenses, including both pre and post
natal care, child delivery, which sometimes lead to vaccination of newborn babies.
 Personal Accident Cover: These plans are frequently provided as riders to
standard health insurance plans, which provide coverage for hospitalization and
reimbursement of medical expenses, in the case of an accident.

Key Benefits & Features of Health Insurance Policy


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The cost of healthcare in the modern days is increasing at a high pace while one’s
income does not seem to match up that level. Regular health check-ups are getting out
of one’s range of affordability since multiple expenses of thousands are common in
such scenarios. A patient looking forward to availing frequent health check-ups is no
longer expected, whereas a health insurance policy easily covers all such expenses
with assured benefits. A comprehensive health plan comes packed with features. Let
us understand these features in detail so that buying a healthy policy becomes easy.
 Cashless treatment – Every insurance provider will have a list of hospital under
its network and if you get admitted in these hospitals then you don’t need to pay
anything. Just tell your policy number and rest everything will be taken care by
the hospital and the insurance provider. This type of plan is the most preferred on
because there is no stress of claim reimbursement and arranging the
documentation.
 Pre and Post Hospitalization – This feature of health insurance policy takes care
of both pre and post hospitalization charges for a period of 30 to 60 days
depending on the plan purchased.
 Ambulance charges - The policy holder is free from burden of transportation or
ambulance charges as it is paid by the insurer. This is a add-on benefit and you
should have opted for it while purchasing.
 No Claim Bonus - NCB or No Claim Bonus is a benefit provided if the insured
does not claim for any treatment in the previous year. Benefit could be in any
form, either an increment in the sum assured or a discount in premium. You can
avail this benefit on renewal.
 Medical Check- Up - Health insurance policy entitles the policyholder to receive
regular medical check-ups. Free check up is provided by few insurers provided
you have a good history of no claim bonus.
 Tax Benefits – According to India’s tax system if you are paying a premium
amount then you are liable to get tax rebate under section 80D of Income Tax Act
for a maximum value of Rs.25000 for Indians in the age group of 18 to 50 years
and Rs.30000 for senior citizens.
 Co-Payment - According to this feature you can lower the premium amount.
Medical insurance offers co-payment option wherein there is a pre-defined
amount of voluntary deductibles mentioned in the policy to be paid by the insured.

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So in case of a treatment, some amount is paid by the insured and rest by the
insurer.

How to Find the Best Medical Insurance Plan?


There are few factors that you should consider closely to make the right decision and
choose the best.
 Caps and sub-limits - Imposition of sub limits, co-payments or other caps might
reduce the premium you pay for the insurance policy but in the long run it would
alter the benefits. You should understand and assess this factor vis-à-vis your
requirement and paying capacity to get maximum benefit out of a health insurance
plan.
 Claim settlement record - This is an important criterion to assess the credentials
of a insurance provider. You should always go with a company with has good
claim settlement record. Thus you can ensure that your claims and
reimbursements would not be wrongly withheld. Always ask for the company’s
claim settlement ratio before purchasing their health plan and save yourself from
unnecessary harassment.
 Scope of coverage - Just don’t buy a plan by comparing premium. Less amount of
premium does not necessarily mean a good plan. On the contrary such a plan
might not cover your needs properly. Closely look at what the plan covers. Buy a
comprehensive plan.
 Renewability - It is important to see how many years the plan proposes to cover
you. You should not be left without a proper cover when you need the most, say
during your old age.
 Cashless Hospital Network - Check if the hospitals around you are covered as a
network hospital by the company you are considering to buy from. Cashless
hospitalization is hassle free and seamless. You and your family won’t be required
to run around collecting documents and filling reimbursements.
 Premium Loading - We would strongly recommend you to check the terms and
conditions pertaining to premium loading. This will save you from paying a high
incremental premium post making a claim. This aspect though ignored in the
beginning usually becomes a bone of discontentment at a later stage. The best
practice would be to verify the premium fluctuation data of the plan for previous 5
years the least.
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 Internal Team - Check for the plans from insurers who have a dedicated internal
team for handling mediclaim. This comes in handy while expediting the claim
settlement process.
 Floater (family) Size - Everyone has a different family size so you should always
look for the family floater size allowed under the plan before buying it.

Compare and Find the Best Cover Online


There are so many companies offering medical insurance plans and each of them have
a different set of features and benefits that it gets mind-boggling to select one.
Sometimes you end up buying a plan that though costs less but has contradictory
clauses and you practically get nothing when making a claim. On the other hand you
might buy a fancy plan paying a higher premium only to realize at a later stage that
you actually didn’t use or never needed those frill items.
PolicyBazaar facilitates comparison and ensures you buy the best fitted policy. We
help you sieve through the in numerous policies and get you a few best Health
insurance plansbased on your needs. You can then compare them side by side and not
only save money but also buy a policy that covers your properly. Make an informed
choice!
Understanding the low penetration in the Indian Health Insurance Industry (presently
32%), leading MNCs of the world are venturing aggressively in this sector. Indian
health care industry presently, offers immense opportunities to the leading players like
New India Assurance, United India Insurance, National Insurance, ICICI Lombard
and Oriental Insurance, as the penetration in India is still extremely low. Health
insurance policy is a way to safeguard our health from the impact of illnesses as it
helps to reduce the financial impact as well as the mental stress associated with an
illness. The term ‘Health Insurance’ relates to a type of insurance that essentially
covers our medical expenses. A health insurance policy like other policies is a
contract between an insurer and an individual / group in which the insurer agrees to
provide specified health insurance cover at a particular “premium” subject to terms
and conditions specified in the policy.
A Health Insurance Policy would normally cover expenses reasonably and necessarily
incurred under the following heads in respect of each insured person subject to overall
ceiling of sum insured (for all claims during one policy period).
a) Room, Boarding expenses
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b) Nursing expenses
c) Fees of surgeon, anesthetist, physician, consultants, specialists
d) Anesthesia, blood, oxygen, operation theatre charges, surgical appliances,
medicines, drugs, diagnostic materials, X-ray, Dialysis, chemotherapy, Radio therapy,
cost of pace maker, Artificial limbs, cost or organs and similar expenses (IRDA
2012).

1.1.1 Global Scenario


On a Global Setting, healthcare is either funded by the government or by insurance
companies. About 85% of American Population carries health insurance. In Canada &
UK, Health care is absolutely free of cost (Varghese & Koshy 2011). While in India,
complete coverage is still not accessible, despite bulky premium payment. However, a
comparison of the health care spending patterns across the world vs. that of India
gives the picture of household’s contribution in meeting the health care expenditures
in India. While out of pocket expenditure on health care in India is approximately
68% (Mukherji & Swaminathan 2013), the world average is about 18% (Figure 1.1
and Figure 1.2). In many of the cases, this leads to huge financial liabilities for the
affected families. Life styles are changing resulting in new disease patterns that call
for long term medication and cost of medical care is on the rise (Varghese & Koshy
2011). This is further compounded by the government policy to gradually withdraw
from secondary and tertiary medical care.

1.1.2 Methods for Financing Health Care


There is a basic structure & process as to how ‘Healthcare Expenditure’ is financed by
people in India. The flowchart is provided below, highlighting the various options
undertaken to finance their health care expense.
There are mainly 2 ways by way of which health care expense can be tackled. It can
be done either, ‘privately’ (i.e. procure the money personally) or with the help of
‘State or Society/public’. In case of Private financing, there are 3 options, available
with any people, which are mentioned below:-
• Out of Pocket – Self-financing. I.e. the person pays from his or her own pocket &
savings.

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• Private Health Insurance – The expense is taken care by the health policy,
which the person owns.
• External Source – By way of managing personal loans from friends & family or
Banks etc.
In the case of Public Financing option, the person again has 3 options, mentioned
below:-
• State Funded – The Government provides for the medical care or gives some
subsidy.
• Social security – In developed countries by paying a small amount to the state,
you are covered for medical.
• External funded – Aid or grants etc.

1.1.3 Indian Health Insurance Scenario


India is now second fastest growing major economy & third largest economy in the
world. India spends about 6.5 to 7% of GDP on Health care (official estimates around
6%) out of which 1.2% is in the Government sector and 4.7% in private sector. (Singh
2011a)

In Indian market various types of health insurance plans exist today. Many types of
Government or state based health insurance schemes are running in market like
Central Government Health Scheme (CGHS), Employees State Insurance Scheme
(ESIS), & now a day Rashtriya Swasthya Bima Yojana (RSBY) is very popular in
India. Government takes many initiatives for offering other health insurance schemes
to India, for providing better health to our nation’s population (Ramachandran 2013).
Insurance sector is fastest growing sector in India. In the Insurance sector
approximately 44 insurance companies offer health insurance products. Out of these
44, four standalone health insurance companies, 19 General insurance companies and
19 Life insurance companies play an active role in health insurance sector (Source:
http://www.healthinsuranceindia.org/).
A List of Health Insurance Companies active in Indian market:

I. Standalone Health Insurance Companies


• Apollo Munich Insurance Company Limited

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• Max Bupa Health Insurance Company Limited
• Religare Health Insurance Company Limited
• Star Health and Allied Insurance Company Limited
II. General Insurance Companies
• Bajaj Allianz General Insurance Company Limited
• Bharti AXA General Insurance Company Limited
• Cholamandalam MS General Insurance Co Limited
• Future Generali India Insurance Company Limited
• HDFC Ergo General Insurance Company Limited
• ICICI Lombard General Insurance Company Limited
• IFFCO-TOKIO General Insurance Company Limited
• Magma HDI General Insurance Company Limited (Upcoming)
• National Insurance Company Limited
• Raheja QBE General Insurance Company Limited
• Reliance General Insurance Company Limited
• Royal Sundarm Alliance Insurance Company Limited
• Larson & Toubro General Insurance Company Limited
• Liberty Videocon General Insurance Company Limited (Upcoming)
• SBI General Insurance Company Limited
• Shriram General Insurance Company Limited
• Tata AIG General Insurance Company Limited
• The New India Assuance Company Limited
• The Oriental Insurance Company Limited
• United India Insurance Company Limited
• Universal Sompo General Insurance Company Limited
III. Life Insurance Companies
• Aviva Life Insurance Company India Limited
• AEGON Religare Life Insurance Company Limited
• Bajaj Allianz Life Insurance Company Limited
• Bharti AXA Life Insurance Company Limited
• Birla Sun Life Insurance Company Limited
• Future Generali India Life Insurance Company Limited
• HDFC Standard Life Insurance Company Limited
• ICICI Prudential Life Insurance Company Limited

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• IDBI Fortis Life Insurance Company Limited
• India First Life Insurance Company Limited
• Life Insurance Corporation of India
• ING Vysya Life Insurance Company Limited
• IDBI Fortis Life Insurance Company Limited
• Max New York Life Insurance Company Limited
• PNB MetLife India Insurance Company Limited
• Reliance Life Insurance Company Limited
• SBI Life Insurance Company Limited
• Star Union Dai-ichi Life Insurance Company Limited
• Tata AIG Life Insurance Company Limited

Recent market analysis report state that the public sector undertaking (PSUs) United
India Insurance and National India Insurance registered strong market growth of 33%
and 27% respectively. Whereas new India recorded a growth of 17% compared to
previous year. Amongst the private players ICICI Lombard has retained its top
position with a market share 11% and growth of 12 Percent. With the exception of
Reliance General, IFCO Tokyo, Star Health & Allied Insurance and all the other
companies recorded a growth during the period. Standalone health insurance
companies; Apollo Munich & Max Bupa have shown significant growth during the
period. They registered the market share 3% and 1% respectively at the end of
FY2011-2012.

1.1.4 Health Insurance Plans


Indian health insurance industry offers many types of health insurance plans for
different class or different group of people. Few health insurance plans are mentioned
below that offer health insurance companies to public.
(I) Individual Health Plan
These are the so-called 'traditional' health insurance covers, commonly known as
'Mediclaim' policies. They mainly cover hospitalization expenses provided it is for at
least 24 hours. The expenses for hospital bed, nursing, surgeon's fees, consultant
doctor's fees, cost of blood, oxygen and operation theatre charges are the usual
inclusions. However, unlike the past, most plans now come with sub-limits for each of

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these heads. They usually do not cover pre-existing diseases or complications arising
from them for the first four years of the policy. Besides, claims for specific ailments
may not be allowed in the first or second year. For every claim-free year, most plans
add 5 per cent to the sum insured. Market-based systems (voluntary and private) have
mediclaim scheme which covers about 2.5 million of population. There are many
employers who reimburse costs of medical expenses of the employees with or without
contribution from the employee. It is estimated that about 20 million employees may
be covered by such reimbursement arrangements.

(II) Family Floater Plan


These can be seen as agglomerations of individual health plans, for a family. The
benefits remain largely the same, but the sum insured can be availed by any or all
members of the family and not a single person. Rather than buying, say, a INR
200000 health cover for each member of the family of four by spending for a total
cover of INR 800000, if you bought Family Floater for INR 800000, each person
covered under it can avail benefits up to INR 800000 as opposed to INR 200000 in
the earlier instance. This reduces the need for you to pay from your pocket. Also, it
comes at a lower premium than otherwise. A Family Floater can be bought by an
individual who becomes the proposer along with spouse, dependent children up to 25
years or even unmarried, divorced, widowed daughter and dependent parent.
(III) Critical Illness Plan
This is not a substitute for a 'Mediclaim', but you should ideally add this layer to the
latter. It provides financial assistance if the insured develops a serious ailment, such
as cancer, or has a stroke. Each cover has a list of ailments, usually 9-12 of them. One
can get it in the form of a rider attached to a life insurance cover, or as a standalone
policy from either a life insurer or a non-life insurer. If critical illness occurs, it pays
the entire sum insured and terminates and can happen only once for any particular
illness. To get the payout, the insured has to survive for 30 successive days after the
diagnosis. No claim can be made during the first 90 days of the inception of the
policy. The policy term is usually longer (10-20 years) if this cover is bought from a
life insurer as a rider than from a general insurer (1-5 years).
(IV) Senior Citizens Health Plan
Most Individual Health plans, cap the entry age at around 60 years, while Senior
Citizen Health Plans, are generally for the age group of 60-80 years. Most can be
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renewed lifelong or up to the age of 90, and have a fixed coverage of, say, INR
100,000 or INR 200,000. Besides looking for sub limits, those taking SCHP should
watch out for certain illnesses as many ailments are excluded from the plan. Senior
Citizen Health Plans might even have the option to attach a Critical Illness plan rider.
(V) Daily Hospital Cash Benefit
This should be the last option when buying health plans. Most hospital cash plans
might also cause inconvenient you as they offer the benefit after discharge from the
hospital, and only after the policyholder produces proof of the number of days he
stayed there. Hospital cash benefit has a pre-defined limit in most cases, say INR 500
per day for up to 50 days in a year and up to 250 days during the entire term.
(VI) Unit-linked Health Plans
These are mostly defined benefit plans - usually for the long term - and, unlike a
standard health insurance policy, the payout is not dependent on the costs actually
incurred. Health Ulips are made up of two parts - a health plan and a unit-linked
investment plan. Although these policies are being sold by life insurers, they may not
cover life risk. Out of the premium one pays, a portion goes towards medical coverage
and the rest of the premium is invested in a fund that operates like a mutual fund.
(VII) Covers from Life Insurers
Life insurance companies, too, are offering health plans. Most of these are, however,
defined benefit plans - the pre specified amount which is the sum insured is paid as
compensation, irrespective of the actual amount of expenses incurred. Also, these are
long-term, having a fixed premium for, say, three, five, or even 10 years. Most of the
types of plans discussed above are on offer.
1.10 Role of IRDA
IRDA stands for “Insurance Regulatory and Development Authority”. It was
established in 1999 under an act of Parliament to promote and regulate the insurance
industry in India including all its constituents like Insurance Companies, Agents and
Brokers. The Insurance Regulatory and Development Authority (IRDA) was
constituted to regulate and to develop health insurance business in India. As a key part
of its role, it is responsibility to protect the rights of policyholders. The authority shall
have the duty to regulate, promote and ensure orderly growth of the health insurance
business and re-insurance business.

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• IRDA issues a certificate of registration, renew, modify, withdraw, suspend or
cancel such registration to applicant.
• Protection of the interests of the policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and other terms and
conditions of contracts of insurance;
• Specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents;
• Specifying the code of conduct for surveyors and loss assessors;
• Promoting efficiency in the conduct of insurance business;
• Promoting and regulating professional organisations connected with the
insurance and re-insurance business;
• Levying fees and other charges for carrying out the purposes of this Act;
• Calling for information from, undertaking inspection of, conducting enquiries
and investigations including audit of the insurers, intermediaries, insurance
intermediaries and other organisations connected with the insurance business;
• Control and regulation of the rates, advantages, terms and conditions that may
be offered by insurers in respect of general insurance business not so
controlled and regulated by the Tariff Advisory Committee under section 64U
of the Insurance Act, 1938 (4 of 1938);
• Specifying the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers and other
insurance intermediaries;
• Regulating investment of funds by insurance companies;
• Regulating maintenance of margin of solvency;
• Adjudication of disputes between insurers and intermediaries or insurance
intermediaries;
• Supervising the functioning of the Tariff Advisory Committee;
• Specifying the percentage of premium income of the insurer to finance
schemes for promoting and regulating professional organisations referred to in
clause (f);
• Specifying the percentage of life insurance business and general insurance
business to be undertaken by the insurer in the rural or social sector; and
• Exercising such other powers as may be prescribed.
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1.2 OBJECTIVE OF THE STUDY
1. To study the perception of respondents regarding health insurance services.
2. To examine the factors that influence customers while considering purchase of
health insurance.
3. To study the importance of the following attributes in the purchase of health
insurance.
4. To study the barriers in the purchase of health insurance.

1.3 NEED AND SCOPE OF THE STUDY


Need
Health care has also become very expensive and as such, it becomes difficult to bear
the increasing costs of the doctor’s fee and hospital charges. A medical insurance or
health insurance policy is a way to safeguard our health from the impact of illnesses
as it helps to reduce the financial impact as well as the mental stress associated with
an illness. Hence health insurance policy is necessary for everyone and to know about
health insurance is very much important, but in India just 15 % people have health
insurance policy. Despite its importance, the Indian people have shown unwillingness
to go for health insurance and through this study, we intent to know the awareness
level, factors that influence in purchase of health insurance and the reasons behind the
low subscription for health insurance.

Scope of the Study


The scope of the study was limited to customers who uses health insurance services in
Jalandhar city only.

1.4 RESEARCH METHODOLOGY


This chapter discusses the research methodology employed in the study. Research
design, data collection, sampling design is discussed under various headings.
Descriptive research was used to conduct the study and quantitative data was
collected in order to gain an insight into the factors influencing health insurance
purchase in Jalandhar.

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A questionnaire was used to study the various demographic aspects of the respondents
and various factors influencing health insurance and barriers in purchase of health
insurance.

1.4.1 Research Design


Research design is the blue print of the research. It has many dimensions, it includes
not only the research methods but also consists the logic behind the methods used in
the context of the study and explains why only a particular method had been used so
that search lend themselves to proper evaluation. Thus in a way it is a written game
plan for concluding research.
1.4.1.1 Descriptive Research
It is a type of descriptive research which we have conducted; the major objective of
this type of research is to provide the description of something usually market
characteristics or functions. This research includes surveys and fact findings and
enquires of different kinds. The major purpose of descriptive research is description
of state of affairs as it exists at present.

1.4.2 Sampling Design


Sampling can be defined as the section of some part of an aggregate or totality on the
basis of which judgment or an inference about aggregate or totality is made. The steps
involved in sampling design are as follows
1.4.2.1 Universe of the study: It includes the overall population of the study i.e. all
the people who are self-employed or government employee in Jalandhar.
1.4.2.2 Sampling size: Sampling size is the total number of units which is covered in
this study. The sample size of this study was 100.
1.4.2.3 Sampling Technique: The sampling technique used was convenient sampling
for conducting this survey.

1.4.3 Data Collection And Analysis


Information has been collected from primary and secondary data.
a) Secondary Data These types of data were known as published data. Data which
were not originally collected was called secondary data. The first step in any research

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was the collection of secondary data. In this project, some of the data has been
collected from Internet which is a source of Secondary data.
(b) Primary Data Primary Data was the one which is of employee's importance and
backbone of any study. In this study primary data is collected through Questionnaire.
In this structured questionnaire was used.

1.4.4 Limitations of the Study


Some of the limitations of the study are summarized as follows.

• The sample size taken was small and may owing to time, cost & effort constraint
may not be sufficient to predict the results accurately.
• The findings have been generalized on the basis of the behavior of 100
respondents in Jalandhar districts, results may not be applicable to other region.
• There may be some biasness in the responses of the respondents which cannot be
ruled out fully.
• The findings of today may not hold good tomorrow.

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2.1 INTRODUCTION TO INSURANCE INDUSTRY
2.1.1 HISTORY OF INSURANCE SECTOR IN INDIA
In India, insurance has a deep-rooted history. It finds mention in the writings of
Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya ( Arthasastra
). The writings talk in terms of pooling of resources that could be re-distributed in
times of calamities such as fire, floods, epidemics and famine. This was probably a
pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest
traces of insurance in the form of marine trade loans and carriers’ contracts. Insurance
in India has evolved over time heavily drawing from other countries, England in
particular.
1818 saw the advent of life insurance business in India with the establishment of the
“Oriental Life Insurance Company” in Calcutta (now Kolkata). This Company
however failed in 1834. In 1829, the Madras Equitable had begun transacting life
insurance business in the Madras Presidency.
Insurance in India started without any regulation in the Nineteenth Century. It was a
typical story of a colonial era: a few British insurance companies dominating the
market serving mostly large urban centres. After the independence, it took a dramatic
turn. Insurance was nationalized. First, the life insurance companies were nationalized
in 1956, and then the general insurance business was nationalized in 1972. Only in
1999 private insurance companies have been allowed back into the business of
insurance with a maximum of 26% of foreign holding. In what follows, we describe
how and why of regulation and deregulation. The entry of the State Bank of India
with its proposal of bank assurance brings a new dynamics in the game. We study the
collective experience of the other countries in Asia already deregulated their markets
and have allowed foreign companies to participate. If the experience of the other
countries is any guide, the dominance of the Life Insurance Corporation and the
General Insurance Corporation is not going to disappear any time soon.

2.1.2 INTRODUCTION TO LIC


The story of insurance is probably as old as the story of mankind. The same instinct
that prompts modern businessmen today to secure themselves against loss and disaster
existed in primitive men also. They too sought to avert the evil consequences of fire
and flood and loss of life and were willing to make some sort of sacrifice in order to

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achieve security. Though the concept of insurance is largely a development of the
recent past, particularly after the industrial era – past few centuries – yet its
beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first life
insurance company on Indian Soil. All the insurance companies established during
that period were brought up with the purpose of looking after the needs of European
community and Indian natives were not being insured by these companies. However,
later with the efforts of eminent people like Babu Muttylal Seal, the foreign life
insurance companies started insuring Indian lives. But Indian lives were being treated
as sub-standard lives and heavy extra premiums were being charged on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life
insurance company in the year 1870, and covered Indian lives at normal rates.
Starting as Indian enterprise with highly patriotic motives, insurance companies came
into existence to carry the message of insurance and social security through insurance
to various sectors of society. Bharat Insurance Company (1896) was also one of such
companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise
to more insurance companies. The United India in Madras, National Indian and
National Insurance in Calcutta and the Co-operative Assurance at Lahore were
established in 1906. In 1907, Hindustan Co-operative Insurance Company took its
birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath
Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life
(later Bombay Life) were some of the companies established during the same period.
Prior to 1912 India had no legislation to regulate insurance business. In the year 1912,
the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life
Insurance Companies Act, 1912 made it necessary that the premium rate tables and
periodical valuations of companies should be certified by an actuary. But the Act
discriminated between foreign and Indian companies on many accounts, putting the
Indian companies at a disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to
176 companies with total business-in-force as Rs.298 crore in 1938. During the
mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
19
governing not only life insurance but also non-life insurance to provide strict state
control over insurance business. The demand for nationalization of life insurance
industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative
Assembly. However, it was much later on the 19th of January, 1956, that life
insurance in India was nationalized. About 154 Indian insurance companies, 16 non-
Indian companies and 75 provident were operating in India at the time of
nationalization. Nationalization was accomplished in two stages; initially the
management of the companies was taken over by means of an Ordinance, and later,
the ownership too by means of a comprehensive bill. The Parliament of India passed
the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance
Corporation of India was created on 1st September, 1956, with the objective of
spreading life insurance much more widely and in particular to the rural areas with a
view to reach all insurable persons in the country, providing them adequate financial
cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long term
contracts and during the currency of the policy it requires a variety of services need
was felt in the later years to expand the operations and place a branch office at each
district headquarter. Re-organization of LIC took place and large numbers of new
branch offices were opened. As a result of re-organisation servicing functions were
transferred to the branches, and branches were made accounting units. It worked
wonders with the performance of the corporation. It may be seen that from about
200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in
the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of
new business. But with re-organisation happening in the early eighties, by 1985-86
LIC had already crossed 7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 113 divisional
offices, 8 Zonal offices, 1381 Satellite offices and the Corporate office. LIC's Wide
Area Network covers 113 Divisional offices and connects all the branches through a
Metro Area Network. LIC has tied up with some Banks and Service providers to offer
on-line premium collection facility in selected cities. LIC’s ECS and ATM premium
payment facility is an addition to customer convenience. Apart from on-line Kiosks
and IVRS, Info Centres have been commissioned at Mumbai, Ahmedabad, Bangalore,
20
Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision
of providing easy access to its policyholders, LIC has launched its SATELLITE
SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere
servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past
records. LIC has issued over one crore policies during the current year. It has crossed
the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives
which inspired our forefathers to bring insurance into existence in this country inspire
us at LIC to take this message of protection to light the lamps of security in as many
homes as possible and to help the people in providing security to their families.

Some of the important milestones in the life insurance business in India are:
1818: Oriental Life Insurance Company, the first life insurance company on Indian
soil started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company
started its business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalised. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
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.

21
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 (Nationalisation) Act, 1972 nationalised the
general insurance business in India with effect from 1st January 1973.
107 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.

2.1.3 DLF Pramerica Life Insurance Company Ltd. (DPLI)


It is a joint venture between DLF Limited and Prudential International Insurance
Holdings, Ltd. (referred to hereafter as "PIIH"). PIIH is a fully owned subsidiary of
Prudential Financial, Inc. (referred to hereafter as "PFI"). The combination of the
strength of the DLF brand and PFI's insurance expertise provides the strongest
possible foundations for DPLI to succeed in the rapidly growing Indian life insurance
market.
 Founded in 2007.
 Headquartered in Gurgaon, Haryana.
 DLF holds 74% equity in the venture while PIIH holds 26% equity as per FDI
Norms.
 Capital base of over Rs 180 crores.
 Expanding at a fast pace with presence currently in Del NCR, Himachal Pradesh,
Punjab, Haryana & Gujrat.
DLF is one of the largest and most respected organisations in the real estate sector in
India with over six decades of experience and a track record of sustained growth,
customer satisfaction, and innovation. In September 2006, DLF Limited was the only
real estate firm to be nominated amongst the "Super brands of India" in the consumer
validated category. After strengthening its position in the core business of residential,

22
commercial and retail property development, the DLF group has now made forays
into the infrastructure, SEZ and hotel businesses by entering into several strategic
alliances with global industry leaders like Laing O‘Rourke Plc. and Hilton Hotels
Corporation.DLF is committed to quality, trust and customer sensitivity, and to
deliver on promises with agility, financial prudence and in tune with the highest
global standards.
PFI is a U.S. based financial services leader with its headquarters in Newark, New
Jersey, with approximately US$ 638 billion of assets under management as of June
30, 2008 and operations in the United States, Asia, Europe and Latin America. PFI is
focused on helping its customers achieve financial prosperity and peace of mind.PFI
ranks among the Top 100 in the 2007 Forbes Global 2000 List, an annual tabulation
of the world's largest public companies and ranks 1st on Fortune Magazine's list of
World's Most Admired Companies in the Insurance: Life and Health Insurance
Category two years running, in 2007 and 2008. With more than 130 years in financial
services, PFI is focused on helping approximately 50 million individual and
institutional customers grow and protect their wealth. The company's well recognized
'Rock' symbol is an icon of strength, stability, expertise and innovation that has stood
the test of time. PFI's businesses offer a variety of products and services, including
life insurance, annuities, retirement-related services, mutual funds, investment
management, and real estate services. PFI's legacy is based on a long history of social
responsibility, strong leadership, sound investments, and innovative products and
services.
VISION: At DLF Pramerica, our vision is to ensure that every life we touch feels
secure and enriched.
MISSION: We shall be a guide and a mentor to people so that they are able to make
the most informed insurance decisions to meet their life goals.
VALUES:
 Customer Focused- Be someone who places customers and their needs at the
forefront while developing and managing their financial solutions.
 Mutual Respect- Build mutual respect by being an equal partner, who knows and
willingly shares, helping people go further rather than walking ahead and leading
them or walking behind and following.

23
 Worthy of Trust- Build trust by choosing the right path rather than the easy path and
tell the truth the way it is. Be someone who keeps promises, meets commitments and
behaves with integrity at all times.
 Winning- Be positive and confident; seize every moment, every day, with a winning
perspective, fearlessly facing the uncertainties of life.
Every organization requires competent employees (Sales Managers) for the successful
functioning of its various departments. To ensure that the staff works efficiently and
effectively, the organization has to continuously evaluate their performance and
bridge any performance gaps by providing appropriate training to them. For, it is the
people who “make or break” an organization. Traditionally, the training policy in an
organization focused on enhancing the productivity and effectiveness of the
employees so that the medium term and long term strategies of the organization could
be successfully fulfilled. Since upgradation of skills and knowledge has direct
relevance to performance. This necessitates huge investments in the training programs
for providing the requisite skill set to the staff.
The ultimate aim of any training program is to achieve:
- Continuous Improvement.
- Change-in-Attitude.
- Cost Saving.
- Total Productivity.

2.1.3 Bajaj Allianz Life Insurance Company


Bajaj Allianz Life Insurance Company Limited is a Union between Allianz SE, one of
the world’s largest Life Insurance companies and Bajaj Auto, one of the biggest 2- &-
3 wheeler manufacturers in the world.
Allianz SE is a leading insurance conglomerate globally and one of the largest asset
managers in the world, managing assets worth over a Trillion Euros (Over R.
55,00,000 crores). Founded in 1890 in Berlin, Allianz SE has over 115 years of
financial experience in over 70 countries.
Bajaj group is the largest manufacturer of two-wheelers and three-wheelers in India
and one of the largest in the world.

24
Today, Bajaj Allianz is one of India’s leading and fastest growing insurance
companies. Currently, it has presence in more than 550 locations with over 60,000
Insurance Consultants.

Organisational Set-Up
Organizational set-up is important for the overall efficient working of various
departments and for improved performance for an insurer. The departments have to be
set up on the basis of various activities of the company. Activities generating revenue
are given more importance. Thus, various offices, departments and sections are
created to look after the important activities of the insurance company. Important
activities of an insurance company are:
 Procuring new business for insurance.
 Scrutiny of proposal and giving decision of acceptance or otherwise for proposals
for insurance
 Issuing policy documents. Keeping track of performance of insurance contracts by
way of receipt of premiums
 Providing assistance in various matters like nominations, assignments, alterations,
payment of claims etc.
 Other activities like, investment of funds maintenance of accounts, personnel
management, data processing and complying with legal and regulatory
requirements

Structure of the company:


Market profitability - Market share
Market : Goodwill–healthy record
Expenses control : Marketing Selling cost Administrative
Maintenance of : Policy administration Business Agency
Administration Post sale communication
Conservation of business
Product mix

Product Details
An insurance company offers products in the form of different insurance plans like: -
 Term insurance plan

25
 Loan cover term insurance plan
 Single premium whole of Bajaj Allianz insurance plan
 Pension plan
 Endowment plan
 Money back plan
 Insurance Documents
The responsibility of a certified financial advisor includes proper filling of forms of
the clients. The agent/advisor forms the link between the customer and the insurance
company. In insurance business certain documents forms the basis of contract.

These documents are: -


 Proposal form
 Agent’s confidential report
 Medical report
 Occupational questionnaire
 Proof of age
 Special reports
It is important that the above forms are filled in the right manner and no material fact
should be concealed. It is on the basis of these forms that the underwriter decides to
accept the policy or not Proposal form contains all personal details of the client
Agent’s confidential report verifies the information in proposal form and also contains
agent/advisor recommendations whether to accept the proposal or not. Medical report
is obtained from the medical examiner appointed by the company who conducts
medical examination and then gives his opinion about the proposer’s state of health.
Occupational questionnaire has been developed to know about the exact nature of
work so that extra premium can be calculated wherever necessary. Proof of age is
most important to determine the risk and for calculation of premium.

2.1.4 Aviva Life Insurance Company


Aviva India is a joint venture between one of the country’s oldest and largest groups,
Dabur, and Aviva Group, one of the UK's largest insurance group, whose association
with India dates back to 1834.
Our vision is to be amongst India’s leading life insurers with a quality business
model, focused on sustainable growth. We seek to build a robust product portfolio

26
meeting all customer lifecycle needs related to – Protection, Retirement, Savings
and Investments.
With a strong sales force of over 14,000 Financial Planning Advisers (FPAs), we have
initiated and pioneered many innovative sales approaches, including the concept of
Bancassurance and Financial Health Check services. We are among the first
companies to introduce the contemporary unit-linked products.
A seasoned team of fund managers make our fund management one of the key
differentiators. In India, with a wide distribution network of 134 branches spreading
across nearly 1,000 towns and cities, we operate in partnership with the Dabur Group
through our 26% interest in Aviva Life Insurance Company India Ltd.
Keeping with our commitment of social responsibility, we have been successful in
reaching out to the underprivileged strata through our Microinsurance initiatives

27
28
DATA ANALYSIS AND INTERPRETATION
The data had been processed and analysed by tabulation interpretation so that findings
can be communicated and can be easily understood. The findings are presented in the
best possible way. Tables and graphs had been used for illustration of findings of the
research.
Table 3.1 Demographic Profile of Customers

DEMOGRAPHICS No. of Respondents Percentage


GENDER Male Respondents 60 60
Female Respondents 40 40
Total 100 100
AGE 19-30 years 60 60
31-40 years 30 30
41-50 years 8 8
Above 60 years 2 2
Total 100 100
EDUCATION Undergraduate 20 20
Graduate 41 41
Postgraduate 39 39
Total 100 100
MONTHLY Rs 0 -10,000 10 10
INCOME
Rs 10,001-20,000 32 32
Rs 20,001- 30,000 23 23
Rs 30,001- 40,000 20 20
Above Rs 40,000 15 15
Total 100 100

29
Analysis and Interpretation: It was found that majority of respondents i.e.60% were
between age group of 19-30 years and majority of the persons i.e. 60% of them were
Male and only 40% of them were Female. Majority of respondents monthly income
level under between Rs 10,001 – 20,000.

30
Statement 1: Awareness about the existing health insurance policies
Table 3.2 Awareness About The Existing Health Insurance Policies
Awareness No. of Respondents Percentage
Yes 100 100
No 0 0
Total 100 100

Figure 3.1 Awareness About The Existing Health Insurance Policies

120

100
100

80

60

40

20

0
0
Yes No

Analysis and Interpretation


From the above data we can interpret that the awareness regarding health insurance,
100% respondent are aware the health insurance policies.

31
Statement 2: Subscribed to any health insurance plan
Table 3.3 Subscribed To Any Health Insurance Plan
Subscription No. of Respondents Percentage
Yes 100 100
No 0 0
Total 100 100

Figure 3.2 Subscribed To Any Health Insurance Plan

120

100
100

80

60

40

20

0
0
Yes No

Analysis and Interpretation


From the above data we can interpret that the subscription of any health insurance
policies the 100% of the respondent are subscribed the insurance policies.

32
Statement 3: Services for health insurance are availed by you at present

Table 3.4 Services For Health Insurance Are Availed By You At Present
Company Name Respondents Percentage

New India Insurance 10 10


United India insurance 12 12
National Insurance 15 15

ICICI Lombard 2 2
Oriental Insurance 6 6
Star Health & Allied Insurance 1 1
Apollo Munich 2 2
Bajaj Allianz Insurance 17 17
LIC 19 19
CHOLA MS. General 3 3
Others 13 13
Total 100 100

Figure 3.3 Services For Health Insurance Are Availed By You At Present

20 19
18 17
16 15
14 13
12
12 10
10
8 6
6
4 3
2 2
2 1
0

33
Analysis and Interpretation
From the above table, we can interpret that maximum number of the respondents have
subscribed Company’s Lic health insurance policies 19% subscribed and 17% by
Bajaj Allianz. On the other hand, less number of respondents has subscribed Public
Limited company’s 15% by National Insurance policies and 10% by New India
Insurance policies. 12% by united India insurance, and 13% of respondent are
subscribed by other companies.

34
Statement 4: Sources of information which influence you in purchase of health
insurance.

Table 3.5 Sources of Information Which Influence You In Purchase of Health


Insurance
Sources of Information Respondents Percentage
Internet 16 16
Doctor & Consultant 14 14
Newspaper 8 8
Radio 1 1
Insurance Agents 29 29
Friends & Relatives 22 22
Any Others 10 10
Total 100 100

Figure 3.4 Sources of Information Which Influence You In Purchase of Health


Insurance

35
29
30

25 22
20
16
14
15
10
10 8

5
1
0
Internet Doctor & Newspaper Radio Insurance Friends & Any Others
Consultant Agents Relatives

35
Analysis and Interpretation
From the above table, we can interpret that maximum number of the respondents are
influenced with the information of insurance agent 29%, followed by Friend &
relative 22%. After that 16% of respondent get information from internet, 14% of
respondent are get information from doctor & consultant, 8% and 1% get information
from Newspaper and Radio respectively. As the health insurance company’s focuses
on providing information related to their products on their websites, social media sites
and other useful sites. They are also providing complete information to their insurance
agents and it creates the more influence consumers for purchasing health insurance
policies.

36
Statement 5: Presently insurance plan subscribed by respondent

Table 3.6: Presently Insurance Plan Subscribed By Respondent


Insurance Plan No. of Respondents Percentage

Individual Health Insurance 48 48


Family Floater 25 25
Critical Illness 17 17
Any Others 10 10
Total 100 100

Table 3.5: Presently Insurance Plan Subscribed By Respondent

60

50 48

40

30 25

20 17
10
10

0
Individual Family Floater Critical Illness Any Others
Health
Insurance

Analysis and Interpretation


From the above table, we can interpret that maximum number of the respondents 48%
are having Individual health insurance plan followed by Family Floater Plan are
having 25%. A very less number of respondents have critical illness plan are 17% and
10% are having other plans. As the health insurance companies focus on promoting
their Individual insurance plan as well as Family floater health insurance plan.

37
Statement 6: Your Annual Premium

Table 3.7: Annual Premium


Annual Premium (in Rs.) No. of Respondents Percentage

Below 5000 48 48
5000-10000 25 25
10000-25000 17 17
Above 25000 10 10
Total 100 100

Table 3.6: Annual Premium

60

50 48

40

30
25

20 17

10
10

0
Below 5000 5000-10000 10000-25000 Above 25000

Analysis and Interpretation


From the above table, we can interpret that maximum number of the respondents i.e.
48% below 5000 followed 25% between 5000-10000. 17% respondents pay between
10000-25000 and remaining 10% pay above 25000 rs.

38
Statement 7: Important factor that motivates you for purchasing health
insurance.
Table 3.8 Factor That Motivates You For Purchasing Health Insurance
Motives No. of Respondents Percentage
Reduction in Out of Pocket Expenditure 30 30
Better safety for health 50 50
Emergency Health Care 5 5
Tax Benefit 5 5
Better health care facility 10 10
Total 100 100

Table 3.7 Factor That Motivates You For Purchasing Health Insurance

60
50
50

40
30
30

20
10
10 5 5

0
Reduction in Better safety for Emergency Tax Benefit Better health
Out of Pocket health Health Care care facility
Expenditure

Analysis and Interpretation


Aspects respondents have to assign rank in the descending order of the importance: 1
for most preferred, 2 for next preferred and so on. 30% Respondents assign 1rank to
motive of reduction in our pocket expenditure , 20% assign rank 2 ,30 % assign rank
3( i.e. neutral), and 20 %assign rank 4 ( i.e. not preferred, 50% respondent assign 1
rank to Better safety for health, 25% assign rank 2, 10% assign rank 3 and 15% assign
rank 4. Emergency health care 5% respondent assign rank 1, Tax Benefit 5%
respondent assign rank 1. At last better health care facility only 10% respondent
assign rank 1.

39
Statement 8: Importance of the following attributes in the purchase of health
insurance.
Table 3.9 Importance of the Following Attributes In The Purchase of Health
Insurance

Attributes Most Significant Nether Insignificant Most


Significant Significant nor Insignificant
Insignificant
Tax Rebate 10 40 40 6 4
Risk Coverage 40 40 10 7 3
Incentives 10 10 60 10 10
Health Care 35 50 5 5 5
Expense
Compensation 30 30 30 5 5
Cashless Policy 10 10 70 8 2

Analysis and Interpretation


Aspects respondents have to assign rank in the descending order of the importance: 1
for most preferred, 2 for next preferred and so on. 30% Respondents assign 1rank to
motive of reduction in our pocket expenditure , 20% assign rank 2 ,30 % assign rank
3( i.e. neutral), and 20 %assign rank 4 ( i.e. not preferred, 50% respondent assign 1
rank to Better safety for health, 25% assign rank 2, 10% assign rank 3 and 15% assign
rank 4. Emergency health care 5% respondent assign rank 1, Tax Benefit 5%
respondent assign rank 1. At last better health care facility only 10% respondent
assign rank 1.

40
Statement 9: The following barriers in the purchase of health insurance.
Table 3.10 The following barriers in the purchase of health insurance.

Barriers Very High Neutral Low Very Summated


High Low Score
(5) (4) (3) (2) (1)
No return on Investment 70 5 15 10 0 475
Better investment options 60 10 10 10 10 400
Low Income/non 80 5 15 0 0 465
availability of funds
Lack of adequate 60 2 28 12 8 424
guidance
Lack of comprehensive 50 5 40 5 5 405
coverage
Difficulty to approach 10 5 15 40 30 225
insurance agents
Inadequacy of knowledge 10 5 20 35 30 230
on the part of insurance
agents
Incompetence of 5 5 60 10 20 265
insurance agents
Poor accessibility of 5 5 10 65 15 220
linked hospitals

Analysis and Interpretation


According to the above table it is quite clear that no return on investment is the major
barrier in the purchase of health insurance followed by low income/non availability of
funds, lack of adequate guidance, lack of comprehensive coverage and better
investment options are the main barriers in the purchase of health insurance.

41
42
FINDING OF THE STUDY

The purpose of the research was to find out the factors that influence the purchase of
health insurance. The study was focused on purchase motivation factors, importance
and barriers in purchase of health insurance
• Reduction in Out of Pocket Expenditure and Better safety for health were the most
preferred motivation factors in the purchase of the health insurance policy.
• Emergency Health Care and Tax Benefit were the least preferred motivation
factors when it came to purchase health insurance.
• The tax benefit has somewhat little effect in motivation to purchase of health
insurance policy.
• Most of the respondents have subscribed Limited Company’s LIC health
insurance followed by Bajaj Allianz.
• Less number of respondents has subscribed Public Limited company’s New India
Insurance policies followed by Oriental Insurance policies.
• Insurance agents and relatives are most influencing factors to customers in health
insurance purchase.
• Maximum number of the respondents i.e. 48% below 5000 followed 25% between
5000-10000. 17% respondents pay between 10000-25000 and remaining 10% pay
above 25000 rs.
• Most of the respondents have Individual health insurance plan followed by Family
floater health insurance plan.
• Less number of respondents have Critical Illness health insurance plan.
• No return on investment is the major barrier in the purchase of health insurance
followed by low income/non availability of funds, lack of adequate guidance, lack
of comprehensive coverage and better investment options are the main barriers in
the purchase of health insurance.

43
44
5.1 CONCLUSION OF THE STUDY
From detailed analysis, major barriers identified in health insurance purchase are
“Lack of Intermediaries, Outreach and incompetence, Lack of availability and
accessibility of hospital Services, Lack of Guidance and Awareness, Preference to
other mode of Investment”. Internet and Insurance agents are the most influencing
sources for customers to purchase health insurance policy. Emergency health care and
better safety for health were the most preferred motivation factor for purchase the
health insurance policy. All the attributes such as Tax Rebate, Risk Coverage, Health
Care Expense, Incentives, Compensation, and Cashless Policy are important for
purchase of health insurance. Most of the respondents are willing to join health
insurance, if Comprehensive coverage provided with least cost and low premium
costs conditions are fulfilled. The marketers in health insurance industry need to focus
on the major barriers in health insurance industry and try to adopt societal marketing
philosophy along with holistic vision as it will go a long way in brand building apart
from assured success in penetration. The companies should motivate their sales force
to broaden their horizon by aligning their sales efforts to the useful dimensions of
strategies selling model as well as through application of service quality models.
Besides, the appropriate connect with reputed health care agencies of Central
Government; State Government and Non-Government Organizations will go a long
way in serving the needs of destitutes and aspirants. These initiatives may result in
sustainable success of marketers eyeing to capitalize the opportunity prevailing in
Indian health insurance sector.

45
46
6.1 RECOMMENDATIONS OF THE STUDY
After concluding the results of the data, the following recommendations are:
1. From the above study, we found that the Reduction in Out of Pocket Expenditure
and better safety for health were the most preferred motivation factors for
purchase of the policy. The companies should focus on the promotion of health
insurance with emphasis on better safety for health and Reduction in Out of
Pocket Expenditure.
2. Tax Rebate, Risk Coverage, Health Care Expense are important in purchase of
health insurance. While purchasing the health insurance, people should consider
these attributes. Hence companies should focus on these attributes so that they
influence customers with these benefits of health insurance scheme in the Indian
market
3. Incentives, Compensation are the important attributes for purchase of health
insurance. Companies should provide more promotional discounts they can easily
influence the customers with promotional incentive schemes for purchase of
health insurance policy
4. Cashless Policy is also the important attribute in purchase of health insurance.
Companies should more focus on cashless policy. It will be more beneficial to
attract the customers from the market, because every person is busy towards
their jobs they have no time for reimbursement. Generally People have no faith on
insurance company’s claim. So with cashless policy client pay hospital bill or
medical expenses on the spot
5. Insurance agents and relatives are influencing customers to purchase health
insurance policy. Health insurance Company’s focuses on providing information
related to their products on their websites, social media sites and other useful sites.
As well as providing complete information to their insurance agents. Hence they
influence consumers to purchase health insurance policies.
6. Most of the respondents have individual health insurance plan followed by family
floater plan. The companies need to focus on individual and family floater plans to
target the audience.
7. Lack of availability and accessibility of hospital Services are most important
barriers in purchase of health insurance. Companies need to tie up with better
services provider hospitals.

47
48
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10. Ramachandran .(2015) . "Awarness of Life Insurance - A Study of Jammu and
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QUESTIONNAIRE

I am student of MBA-IV from AIMTC, Jalandhar conducting a research on ‘A Study


on factors influencing health insurance purchase in Jalandhar ’. So, I request you
to spare a few minutes from your busy schedule and fill this form. I assure you that
the information will be kept confidential.

Name of the Respondent: _________________________________

Residential Area: ________________________________________

Gender: Male Female

Age (in years): 20 – 30 31 – 40 41 – 50


51 and above

Qualification: Upto 10th 12th Graduation


Post Graduation
Doctorate Any other: (Please specify)
___________________

Occupation: Service Business Self-employed


Student
Not Employed Others (Please specify):_____________

Monthly < 20000 20001-40000 40001-60000


60001-80000
Income: (INR) 80001 and above

52
Q.1 Are you aware about the existing health insurance policies?
Yes No inter.
Q.2 Have you subscribed to any health insurance plan?
Yes No inter.

Q.3 Which company’s services for health insurance are availed by you at
present?

1. New India Insurance 2.United India Insurance


3. National Insurance 4. ICICI Lombard
5. Oriental Insurance 6. Star Health & Allied Insurance
7. Apollo Munich 8.Bajaj Allianz Insurance
9. HDFC ERGO 10. Chola MS. General
Others (please specify)…………………….

Q.4 Please tick the sources of information which influence you in purchase of
health insurance.
1. Internet 2. Doctor & consultant
3. Newspaper 4. Radio
5. Insurance agents 7. Friends and relatives
8.Any other

Q.5 Which plan have you subscribed to presently?


1.Individual health insurance 2. Family Floater
3. Critical Illness 4. Any Others ( please specify)
____________

Q.6 What is your annual premium?


1. Below 5000 2. 2. 5000-10000
3. 10000-25000 4. Above 25000

53
Q.7 What is the important factor that motivates the subscription of health
insurance purchase?

Better health care facility


Tax Benefit
Emergency Health Care
Better safety for health
Reduction in Out of Pocket Expenditure

Q.8 Rate the importance of the following attributes in the purchase of health
insurance.

Attributes Most Significant Nether Insignificant Most


Significant Significant nor Insignificant
Insignificant
Tax Rebate
Risk Coverage
Incentives
Health care Expense
Compensation
Cashless Policy

Q.9 According to you rate the following barriers in the purchase of health
insurance.

Barriers Very High Neutral Low Very


High Low
No return on Investment
Better investment options

Low Income/non availability of funds

Lack of adequate guidance

Lack of comprehensive coverage

Difficulty to approach insurance agents


Inadequacy of knowledge on the part of
insurance agents
Incompetence of insurance agents
Poor accessibility of linked hospitals

54