COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

1.INTRODUCATION

Insurance is an upcoming sector, in India the year 2000 was a landmark year for
life insurance industry, in this year the life insurance industry was liberalized
after more than fifty years. Insurance sector was once a monopoly, with LIC as
the only company, a public sector enterprise. But nowadays the market opened
up and there are many private players competing in the market. There are
fifteen private life insurance companies has entered the industry. After the entry
of these private players, the market share of LIC has been considerably reduced.
In the last five years the private players is able to expand the market (growing at
30% per annum) and also has improved their market share to 18%.For the past
five years private players have launched many innovations in the industry in
terms of products, market channels and advertisement of products, agent
training and customer services etc.

History of insurance

In some sense we can say that insurance appears simultaneously with the
appearance of human society. We know of two types of economies in human
societies: natural or non-monetary economies (using barter and trade with no
centralized nor standardized set of financial instruments) and more modern
monetary economies (with markets, currency, financial instruments and so on).
The former is more primitive and the insurance in such economies entails
agreements of mutual aid. If one family's house is destroyed the neighbours are
committed to help rebuild. Granaries housed another primitive form of
insurance to indemnify against famines. Often informal or formally intrinsic to
local religious customs, this type of insurance has survived to the present day in
some countries where a modern money economy with its financial instruments
is not widespread.Turning to insurance in the modern sense (i.e., insurance in a
modern money economy, in which insurance is part of the financial sphere),

T.Y.BI. 1
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

early methods of transferring or distributing risk were practiced by Chinese and

Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively.
Chinese merchants travelling treacherous river rapids would redistribute their
wares across many vessels to limit the loss due to any single vessel's capsizing.
The Babylonians developed a system which was recorded in the famous Code
of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing
merchants. If a merchant received a loan to fund his shipment, he would pay the
lender an additional sum in exchange for the lender's guarantee to cancel the
loan should the shipment be stolen or lost at sea.

The various life insurers entered India:-

1. HDFC Standard Life Insurance Company Ltd.

2. Max New York Life Insurance Co. Ltd.

3. ICICI Prudential Life Insurance Company Ltd.

4. Kotak Mahindra Old Mutual Life Insurance Limited.

5. Birla Sun Life Insurance Company Ltd.

6. Tata AIG Life Insurance Company Ltd.

7. SBI Life Insurance Company Limited.

8. ING Vysya Life Insurance Company Private Limited.

9. Met life India Insurance Company Ltd.

10. Royal Sundaram Life Insurance Company Limited.

11. Aviva Life Insurance Co. India Pvt. Ltd.

12. Sahara India Insurance Company Ltd.

T.Y.BI. 2
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

13. Shriram Life Insurance Company

14. Life Insurance Corporation of India.

15. Reliance Life Insurance Company Limited.

16. Bharti AXA Life Insurance Company Limited.

Through this project I want to study about the life insurance industry and also
doing the comparative analysis between two insurance players in this industry.
They are,

1. ICICI Prudential Life Insurance

2. Life insurance corporation of India

T.Y.BI. 3
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

2.OBJECTIVES

The entry of foreign MNC’s and the conductive business environment fostered
by the government, it is no wonder that the re-entry of private insurance has
marked a second coming for the sector. In just five years, the sector has
undergone a makeover, offering more choice, better services, quicker
settlement, tighter regulation and greater awareness ‘s the environment become
more and more competitive and services and products become alike, creating
a differentiation is becoming extremely tough

Thus, this project objectives is as follows.

1 To know where Reliance life insurance Company limited &

life insurance Corporation of India companies stands in the market.

2 Find out the strength and the weakness of their plans.

3 And making comparative analysis between the products of

Reliance life insurance Company limited with Life insurance Corporation of

India.

T.Y.BI. 4
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

SCOPE OF THE STUDY:

This study can be conducted by comparing the performances & products of

three private & government insurance players in insurance industry.

1 The number of respondents to be surveyed can be improved.

2 This study can be conducted to analyze the market stand of

Reliance life insurance Company limited and Life insurance Corporation of

India insurance companies

T.Y.BI. 5
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

3.TYPES OF INSURANCE

As life is full of uncertain events; it is good idea to get insured. There are
different types of insurance provided by various insurance companies. You only
need to decide the perfect insurance that fits your financial plans. Given below
are different kinds of insurance. Choose the one that you require and need most.

 Life insurance

Life insurance is one of the most well known and common insurance.
This insurance is taken against the risk of death. It provides cash benefits
to the decedent's family or other designated beneficiary and may specially
provide for burial and other final expenses.

 Auto insurance

Another kind of insurance that is often required is auto insurance. It is

typically taken against the risks of road accident. It helps cover against
theft, financial loss caused by accidents and any subsequent liabilities.

 Health insurance

Health insurance is taken against the risks of sickness and accidents. It

covers all the medical expenses incurred because of sickness or accidents.

 Property insurance

This type of insurance protects you against loss from risks associated
with a variety of types of property such as houses, cars, boats, businesses
etc from fire, theft or weather damage.

T.Y.BI. 6
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 Disability insurance

Disability insurance provides financial help to the policy holder when

he/she is unable to work due to injuries or severe illness. It gives a
monthly stipend that replaces a portion of the disabled person's income.

 Liability insurance

This insurance type covers legal claims against the insured. The
protection given by this insurance is two fold, a legal defense in the event
of lawsuit commenced against the policyholder plus indemnification with
respect to settlement or court verdict.

 Business Interruption Insurance

Protecting individuals and companies against various financial risks,
these types of insurance also cover the failure of a creditor to pay
money it owes to the insured.
 Pollution Insurance

This insurance kind consists of first-party coverage for contamination of

insured property either by external or on-site sources, arising from
contamination of air, water, or land due to the sudden and accidental
release of hazardous materials from the insured site. Covering the costs of
cleanup, it may include coverage for releases from underground storage
tanks.

 Purchase insurance
The purpose of these types of insurance is to provide protection on the
products people purchase. Purchase insurance can cover individual
purchase protection, warranties, guarantees, care plans and even mobile
phone insurance.

T.Y.BI. 7
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

4.BENEFITS OF INSURANCE

Insurance is a defensive measure against the financial losses that might occur in
our future. There is always a need of insurance in order to protect our financial
future. Buying an insurance policy will benefit you in many ways.

One of the basic benefits of insurance is receiving the financial compensation in

case of actual occurrence of the loss, hazard or damage. It also relieves the
policy holder from all the worries and anxieties they have about how they
would meet the cost of risk.

Some of the insurance benefits given below:

 Easy to afford

One of the great advantages of insurance in today’s world is the low insurance
rate and premium one has to pay. We always look at the insurance rate and the
other associated benefits before we choose any insurance policy. The lesser the
insurance rate, the more the affordable insurance becomes.

 Easy accessibility

The easy accessibility of insurance is another benefit of insurance. One has an

easy access online to a wealth of information about insurance, insurance
companies and their policies. You can search, compare and select their
insurance coverage just by the click of a mouse right from your home.

T.Y.BI. 8
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 Pre-tax insurance benefits

Pre-tax benefits are added advantages to the policyholders. These benefits help
them to save a large portion of their tax payment. When the tax-payment gets
reduced, their disposable income increases.

 Reduce losses and risks

Insurance can also help in reducing losses. Many insurance companies employ
surveyors who go out and look at premises which people may want to insure.
Based on their experience and suggestions, they offer ways to reduce risk and
hazards which could injure employees. Their advice on behalf of insurance
companies cannot help but reduce the likeliness of the risks occurring

One of the benefits of insurance is the use to which the insurance company puts
the money it holds in the common pool. The money collected as premium is not
used immediately; they hold the money until one of the member of the pool
suffers a loss. The money it holds is invested in a wide range of investments
which will go towards aiding government, industry, commerce and
consequently the whole country. Optional insurance benefits are also given by
the companies to their policy holders in order to entice them to access their
insurance package.

One will find that with time, more and more insurance companies have cropped
up. The competition among them has increased and each company is trying to
lure all the customers into its fold. You will come across more and more
innovative insurance benefits for the consumers.

T.Y.BI. 9
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

LIMITATIONS
Thought the present study aims to achieve the above mentioned objectives in
full earnest and accuracy, it may be hampered due to certain limitations, some
of the limitations of this study may be summarized as follows,

1 This study is limited to two private insurance companies only. (Reliance

Life insurance company limited & Life insurance corporation of India)

2 And getting accurate responses from the respondents due to

their inherent problems. They may be refusing to co-operate.

3 Respondents may have to be contacted repeatedly or alternate respondent

may have to be identified.

4 For want of time is restricted.

T.Y.BI. 10
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

5. PRINCIPLES OF INSURANCE

 INDEMNITY

The insurance company indemnifies, or compensates the insured in the case

of certain losses only up to the insured's interest.

 INSURABLE INTEREST

The insured typically must directly suffer from the loss. Insurable interest
must exist whether property insurance or insurance on a person is involved.
The concept requires that the insured have a "stake" in the loss or damage to
the life or property insured. What that "stake" is will be determined by the
kind of insurance involved and the nature of the property ownership or
relationship between the persons.

 UTMOST GOOD FAITH

The insured and the insurer are bound by a good faith bond of honesty and
fairness.

 CONTRIBUTION

Insurers which have similar obligations to the insured contribute in the

indemnificaStion, according to some method.The insurance company
acquires legal rights to pursue recoveries on behalf of the insured; for
example, the insurer may sue those liable for insured's loss.

T.Y.BI. 11
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 SUBROGATION

insurance company acquires legal rights to pursue recoveries on behalf of the

insured; for example, the insurer may sue those liable for insured's loss.

 CAUSA PROXIMA OR PROXIMATE CAUSE

The cause of loss (the "peril") must be covered under the insuring agreement
of the policy, and dominant cause must not be excluded.

T.Y.BI. 12
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

6.COMPANY PROFILE

ICICI PRUDENTIAL LIFE INSURANCE

 Overview

ICICI Prudential Life Insurance Company is a joint venture between ICICI

Bank – one of India's foremost financial services companies-and Prudential plc
- a leading international financial services group headquartered in the United
Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank
holding a stake of 74%and Prudential plc holding 26%. We began
our operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA). Today, our nation-wide
team comprises of over 2100 branches (inclusive of 1,116 micro-offices), over
290,000 advisors; and18 banc assurance partners. ICICI Prudential is the
first life insurer in India to receive a National Insurer Financial Strength rating
of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has
been voted as India's Most Trusted Private Life Insurer, by The Economic
Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow
our distribution, product range and customer base, we continue to tirelessly
uphold our commitment to deliver world-class financial solutions to customers
all over India.

T.Y.BI. 13
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 Our vision:

To be the dominant Life, Health and Pensions player built on trust by world-
class people and service.

This we hope to achieve by:

• Understanding the needs of customers and offering them superior products and
service

• Leveraging technology to service customers quickly, efficiently and

conveniently

• Developing and implementing superior risk management and investment

strategies to offer sustainable and stable returns to our policyholders

• Providing an enabling environment to foster growth and learning for

our employees

• And above all, building transparency in all our dealings The success of the
company will be founded in its unflinching commitment to 5 core values --
Integrity, Customer

First, Boundary less, Ownership and Passion. Each of the values describe
what the

company stands for, the qualities of our people and the way we work. We do
believe that

we are on the threshold of an exciting new opportunity, where we can play a

significant role in redefining and reshaping the sector. Given the quality of our
parentage and the commitment of our team, there are no limits to our growth.

T.Y.BI. 14
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 Our values :

Every member of the ICICI Prudential team is committed to 5 core

values: Integrity, Customer First, Boundary less, Ownership, and Passion. These
values shine forth in all we do, and have become the keystones of our success

 Management Profile:

Board of Director The ICICI Prudential Life Insurance Company Limited

Board comprises reputed people from the finance industry both from India and
abroad.

The ICICI Prudential Life Insurance Company Limited Management team

comprises reputed people from the finance industry both from India and abroad.

Ms. Shikha Sharma, Managing Director & CEO

Mr. N. S. Kannan, Executive Director
Mr. Bhargav Dasgupta, Executive Director
Ms. Anita Pai, EVP – Customer Service & Technology
Mr. Azim Mithani, Chief Actuary
Mr. Puneet Nanda, Chief Investments Officer
Mr. Binayak Dutta, Chief – Sales and distribution

Management Team

The ICICI Prudential Life Insurance Company Limited Management

team comprisesreputed people from the finance industry both from India and
abroad.

Ms. Shikha Sharma, Managing Director & CEO

Mr. N. S. Kannan, Executive Director

T.Y.BI. 15
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

Mr. Bhargav Dasgupta, Executive Director

Ms. Anita Pai, Executive Vice President – Customer Service & Technology

Dr. Avijit Chatterjee, Appointed Actuary

Mr. Puneet Nanda, Executive Vice President & Chief Investment Officer

T.Y.BI. 16
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

LIFE INSURANCE CORPORATION OF INDIA

LIC of India is one of India’s leading financial institutions,

offering complete financial solutions that encompass every sphere of
life. From commercial banking to stock broking to mutual funds to life
insurance to investment banking, the group caters to the financials needs of
individuals and corporate. The LIC has a net of over Rs. 1,800 crore and
employs over 7,500 employees units various businesses. With a presence
in 82cities in India and it services a customer base of over 20,00,000.

 Date of Establishment

1 Sep. 1956

 Address

1st Floor, West Wing, Mumbai Do-Iv, Yogakshema, Jeevan Bima Marg,
Mumbai - 400 021, India

 Branches

8 Zonal Offices and 101 Divisional Offices

 MShri D.K. Mehrotra, (CHAIRMAN, LIC )

Shri Thomas Mathew T. (Managing Director, LIC )

Shri Sushobhan Sarker (Managing Director, LIC )

T.Y.BI. 17
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 OVERVIEW

The largest life insurance company in India, Life Insurance Corporation is

fully owned by the government. It provides individual life insurance,
group insurance and pension plans. Its subsidiaries include Life Insurance
Corporation of India International, LIC Nepal, LIC Lanka, LIC Housing
Finance and LICHFL Care Homes. It has over 12 million policy holders and
over 9 lakh agents. It has underwritten more than 120 million policies.

LIC saw computers in 1964. Today the company is on the Internet and is
utilizing Information Technology in servicing its clients. It has bagged various
award including Loyalty Awards 2008 in Insurance Sector, NDTV Profit
Business Leadership Award – 2007, CNBC Awaaz Consumer Awards2007
and Outlook Money NDTV Profit Awards 2007.

T.Y.BI. 18
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

7.PRODUCTS OFFERED BY COMPANIES

 PRODUCT DETAILS OF ICICI PRUDENTIAL LIFE INSURANCE:-

•Life Time Gold

•Premium Life Gold

•Life Stage Pension

•Life Time Super Pension

•Hospital Care

•Life Link Super

•Premier Life Pension

•ICICI Pru______ + MediAssur

•Invest Shield Life

T.Y.BI. 19
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

PRODUCT OF LIFE INSURANCE CORPORATION OF INDIA

 CHILDREN'S POLICY

Komal Jeevan - Plan No. 159

Children Deferred - Plan no.41

Jeevan Kishore - Plan no.102

Jeevan Chhaya - Plan no.103

Marriage Endowment/Educational Annuity - Plan No. 90

Jeevan Anurag - Plan no.168

 Endowment Policy

Endowment with Profits - Plan no.14

Limited Payment Endowment with Profits - Plan no.48

Jeevan Mitra - Plan no.88 New JanaRaksha Policy - Plan no.91

Jeevan Anand Plan no. 149 Jeevan Mitra Triple Cover - Plan no.133

 Group Insurance Policy

Janashree Bima Yojana Group Insurance Scheme in lieu of EDLIGroup (Term)

Insurance Scheme Group Savings Linked Insurance SchemeGroup

Superannuation SchemeGroup Mortgage Redemption Assurance SchemeShiksha
Sahayog Yojana

 Joint Life Policy

Jeevan Saathi - Plan no.89

T.Y.BI. 20
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 Money Back Policy

Money Back with Profit - Plan no.75

New Money Back - Plan no.93

Jeevan Surabhi 15 yrs - Plan no.106

Jeevan Surabhi 20 yrs - Plan no.107

Jeevan Surabhi 25 yrs - Plan no.108

Jeevan Bharati Plan No 160Jeevan Samriddhi Plan No 154, 155, 156 157

Bima Bachat- Plan no.175

 Pension Plans or Annuities

New Jeevan Dhara - Plan no.148

New Jeevan Suraksha Plan no. 147

Jeevan Akshay II Plan no. 163

Jeevan Nidhi Plan no. 169

Jeevan Akshay V Plan no. 183

 Special Plans

Term Assurance - Plan no.43

Mortgage Redemption - Plan no.52

Jeevan Aadhar - Plan no.114

Market Plus - Plan No 181

Jeevan Vishwas Plan No.136

Jeevan Saral Plan No. 165

T.Y.BI. 21
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

Jeevan Pramukh Plan No. 167

Bima Nivesh 2005 Plan No 171

Money Plus-Plan No 180

 Term Policy

Convertible Term Assurance - Plan no.58

New Bima Kiran

Term Assurance

Anmol Jeevan I Plan No- 164

Amulya Jeevan-Plan No-177

 Whole Life Policy

Whole Life with Profits - Plan no.2

Limited Payment Whole Life with Profits - Plan no.5

Single Premium Whole Life - Plan no.8

Jeevan Tarang- Plan no.178

 PENSION PLAN PRODUCTS OF LIC INDIA & ITS FEATURES

•LIC of India retirement income plan

•LIC of India retirement income plan (unit linked)

T.Y.BI. 22
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

What is the LIC of India retirement income plan?

The LIC of India retirement Income plan is a saving plan designed to

meet your post – retirement needs. It is a plan that gives you “jeene ki azaadi “.
It gives you the choice to remain independent even after retirement.

The LIC of India retirement income plan is a participating plan. The plan
comes in two forms:

One with cover and one without cover

Who can avail of the LIC of India retirement income plan?”

How old do you have to be to avail of this plan?”

Minimum age -18 years

Maximum age – 60 years

For what term can choose to pay the premiums?

5 years – 30 years

At what intervals can you pay premiums?”

•Quarterly

•Half yearly

•Annually

T.Y.BI. 23
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

What are the advantages of this plan?”

•You can choose to retire at any age between 45 years and 65 years.

•On retirement:

•Annuity option:

•Early retirement benefits:

Other products are:

•Money plus

•Auto plus

•Child plan

•Health plan

T.Y.BI. 24
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

8.SWOT ANALYSIS

1.Life Insurance Corporation of India (LIC)

SWOT Analysis

Strength

1. Largest state-owned life insurance company in India, and also the country's
largest investor
2. Has over 2000 branches across all parts of India and more than 10,00,000
agents.
3. With Largest fund base it is the biggest investor in India
4. Has over 115,000 employees across India
5. According to The Brand Trust Report, LIC is the 8th most trusted brand of
India
6. LIC has subsidiaries like LIC Housing Finance Limited, LIC Cards Services
Limited, LIC Nomura Mutual Fund, LIC(Nepal)Ltd, LIC(Lanka)Ltd,
LIC(International)BSC(C)

Weakness

1. It has an image of a Government agency and hence lacks innovation

2. Being a Government agency, red tape and bureaucracy causes
problems
3. Managing a huge workforce during economic crisis meant
overburdened due to salaries

T.Y.BI. 25
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

Opportunity

1. Use of Technology to provide effective services to cater to urban population.

2. Government Schemes implementation

Threats

1. Economic crisis
2. Entry of new NBFCs in the sector
3. Varying Govt policies

Competition

Competitors

1. SBI Life Insurance

2. Sahara Life Insurance

3. HDFC Standard Life

T.Y.BI. 26
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

2.ICICI PRUDENTIAL LIFE INSURANCE

SWOT Analysis

Strength

1. Customised and Flexible Insurance Solutions and large product portfolio

2. Robust Risk control Framework
3. Network of 500 branches and agents across 700 cities

4. Strong Financial Expertise and popular advertising

5. Globally, Standard Life plc has 1.5 million shareholders in more than 50
countries and over 6 million customers
6. Alliance between HDFC and Standard Life giving a strong brand backing

Weakness

1. Less penetration in rural areas

2. Controversies like job cuts, racism and data loss have affected image

Opportunity

1. Growing rural market and better opportunities in the semi-urban areas

2. Group Insurance through large employers

Threats

1. Economic instability and global crisis

2. Entry of new NBFCs in the sector

T.Y.BI. 27
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

Competition

Competitors

1. Bajaj Allianz

2. Sahara Life Insurance

3. Reliance Life Insurance

T.Y.BI. 28
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

9.OBSERVATIONS

RESEARCH METHODOLOGY

TYPE OF RESEARCH

The research includes different options. They are:

 Exploratory research:
It is usually a small-scale study undertaken to define the exact nature of
a problem and to gain a better understanding of the environment within
which the problem has occurred. It is the initial research, before more
conclusive research is under taken.
 Descriptive research:
It is to provide an accurate picture of some aspects of market
environment. Descriptive research is used when the objective is to provide a
systematic description that is as factual and accurate as possible. It provides the
number of time something occurs, or frequency, lends itself to satisfied
calculations such as determining average number of occurrences.
 Casual research:
If the objective is too determined which variable might be causing a
certain behavior that is whether there is a cause and effect relationship between
variable, casual research must be undertaken. In order to determine causality, it
is important to hold the variable that is assumed to cause the change in the other
variable constant and then measure the changes in the variable. This type of
research is very complex and the researcher can never be completely certain that
there are no other factors influencing the casual relationship, especially
when dealing with people’s attitudes and motivation. This research is about

T.Y.BI. 29
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

understanding the market stand and also finds the

strength& weakness of the products of three insurance companies by making co
mparing analysis of the products of the companies, mainly descriptive research
methodology readopted. Descriptive research was adopted since it provides
accurate picture about some aspect of market environment such as which brand
is performing well and what the company can do to improve its market share.

 SAMPLING PROCEDURE

How should the respondents be chosen? To obtain a

representative sample and non- probability sample can be drawn, they are

 Judgment sample:

The researcher selects population numbers who are good

prospects for accurate information. For collection of research data judgment-
sampling technique is used where all of them are employees of the three
insurance companies as they are good prospect for accurate information.

 Actual collection of data sources:

The sources of data include either secondary data or primary data and
even some times the combination of both. The present study is more
concentration on both primary and secondary data.

 Primary data:
Primary data is collected through face-to face interaction with employees
of the insurance companies, by meeting them in personal.

 Secondary data:
The secondary data used for their study are inclusive of the data collected
from the internet, catalogues and brochures and magazines.

T.Y.BI. 30
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

METHODOLOGY

The study will conduct on the bases of survey through questionnaires

given to respondents.

Sampling Design

Population: Mumbai

Sample Size: Population of 100

Sample Technique: Convenience Sampling

Statistical Tools: Correlation.

T.Y.BI. 31
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

10ADVANTAGES OF LIFE INSURANCE

 Protection against risk of untimely death

Life insurance is a product, which offers protection against the risk of
death the full sum assured is made available under a life assurance
policy, whereas under other savings schemes, the total accumulated savings
alone will be available.

 Protection during old age

Life insurance can also be used as a means of saving for one’s future.
There are a number of life insurance policies, which in addition to life cover
also provide the means of investing one’s income. The sum as per the policy
will be received only after a period of time. This amount thus provides for the
old age.

 Forced savings
Payment of life insurance premiums is compulsory and becomes a habit.
S a v i n g s i n o t h e r s c h e me c a n b e e a s i l y wi t h d r a wn a n d ma y be
u s e d f o r l e s s wo r t h y purpose. Termination of a life insurance policy
by the policyholder usually results insubstantial loss in benefits under the
policy to the policyholder. One is thus encouraged to save and keep one’s policy
alive.

T.Y.BI. 32
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 Educational requirements and charity

The object of insurance may be to serve as a security to educational funds
in respect of loans advanced for educational purpose or to provide donations to
charitable institutions like hospital and school.

 Nomination and assignment

The life insured can name the person or persons to whom the policy
money would be payable in the event of his death .the proceeds of a
life insurance policy can be protected against the claims of the creditors of the
life insured by effecting a valid assignment of the policy. The beneficiaries are
fully protected from creditors expect to the extent of any interest in the policy
retained by the insured.

 Marketability and suitability for borrowing

After 3 years, if the policyholder finds that he is unable to continue
payment of premiums he can surrender a policy for a cash sum. A life insurance
policy is accepted as a security for a commercial loan.

 Loans from the insurance company

A policy holder can take a loan from his insurance company against the
Security of his life insurance policy provided the terms of the terms of his policy
allow such a loan. This loan can be taken usually after a period of 3 years from
commencement of the policy and is a percentage of its surrender value.

T.Y.BI. 33
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

 Investment options
The unit link products gives comprehensive insurance solutions that cater
to an individual’s dual need of earning potentially high returns as well as stay
for life. Thus there is an option to invest money in the products that combine the
best of insurance and investment. In a volatile market conditions it is possible to
secure both as one can hedge the investment with saver investment vehicles that
provide a diversified portfolio.

 Tax benefits
The Indian income tax act provides tax concessions to the policyholder
both on payment of premium and on the maturity amount. Under sec 88 the
tax benefits on premium paid by an individual for life insurance policies on his
own life\on the life of spouse \children minor or major, including married
daughters.

 Protection to wife and children

Under sec 6 of the married women’s property act if a married man
takes a policy of life insurance on his own life and expenses on the face of it to be
for the benefit of his wife or of his wife and children or any of them, then it
shall be deemed to be a trust for the benefit of his wife and children or any of
them, According to the interest so expressed and shall not so long as any object
of trust remains be subject to the control of the husband or to his creditors or
form part of his estate. An insurance policy taken by a married man in the above
manner is ideal way to protect the interest of his wife and children, even after
his untimely death.

T.Y.BI. 34
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

11.CONCLUSION

The financial markets have continued to witness unprecedented liberalization,

growth and reforms over the last decade prompted by regulatory compulsions
and a rapid integration between domestic and global markets. And as a result,
one has seen substantial growth in the number of financial firms (insurance
companies, mutual funds, brokerages, banks etc.) and in the number and variety
of financial products and services offered by them. As the need of the people is
changing so is changing the investment habits of the people and this has brought
in a spate of new products and schemes where people can invest. The concept of
insurance as an investment option has arrived where people first identify the
varying needs of money then converts the needs into specific amount of money
and time required to achieve the objective of investments plans.

The objective of insurance as an investment is to ensure that investments

are driven by predetermined and well thought out investment plan and that the
investments are suitable and adequate to meet these plans. But for this the
planner must understand the universe of investments options. He/she must be
well informed on the risk and return attributes of these options. In addition to
the above, companies should also innovate to come up with better products that
would suit the Indian population and should also try to market and sell their
products through new channels of distribution that can be effective in selling
their products to the masses. People should identify their needs and then decide
on the type of policy they want to invest in.
insurance is a good investment option for those people who do not know
where to invest and who do not want to the risk of capital erosion. But, people
who are financially savvy can opt for term insurance and invest the rest in other
options that may give them higher returns.

T.Y.BI. 35
 COMPARATIVE STUDY OF TWO INSURANCE COMPANIES

12.BIBLOGRAPHY

Website

WWW.WIKIPEDIA.COM

Books:

1. Indian Insurance Sector in 2st Century an Outlook:

By A. Vijayakumar, Kalpaz publication.

2. Insurance Theory and Practice.

By Tripathy & Pal, PHI Learning Pvt. Ltd.

3. Insurance Theory and Practice.

By Rob Thoyts, Routlege Taylor & Francis Groups.

T.Y.BI. 36