SYNOPSIS

ON

“A Study of awareness of Financial Planning among customers in

context of investment in Traditional Market and Insurance”

At

HDFC STANDARD LIFE INSURANCE COMPANY

(Submitted in partial fulfillment of the requirement of

Master of Business Administration, Distance Education,
IMT, Ghaziabad)

Research Supervisor: Submitted by:

MR. PRAKASH SUBEDI DEEPTI JAIN
TERRITORY MANAGER, HSLIC Enrollment No. 0621000665
MBA (FINANCE) VI SEM

Session 2006-09
It is hereby informed that myself Deepti Jain Roll No 0621000665 has joined summer

training programme in HDFC STANDARD LIFE INSURANCE CO. for three months.

• Chairman(HDFC Ltd.) : Mr. Deepak Parekh

• C.E.O. & M.D. (HDFC SLIC) : Mr. Deepak Satawalekar

• G.M. Sales : Mr. Suresh Mahalingam

• Regional Manager : Mr. Satish Soni

Under the authority of

Name: Mr. Prakash Subedi

Designation: Territory Manager

Here the respected sir gives me knowledge about their financial planning

process in co. He suggested me how to deal with their customers.

 ACKNOWLEDGEMENT

Any accomplishment requires the effort of many people and this work is no different. It
has been my proud privileges to be attached to do research on such a topic which gave
me the chance to get connected with some great people who are thoroughly professional
i.e., staff of HDFC SLIC. With due respect I express my indebtness to the management of
HDFC Standard Life Insurance Company. For accommodating me to have a look into
their systems and providing me with all information I needed to complete my research
Work

I would also like to thank Mr, Prakash Subedi, my guide and all those who directly or
indirectly helped in this project would have never been accomplished.

I would also thankful to almighty god for his grace and mercy to successfully complete
this project.
 TABLE OF CONTENTS

TOPIC PAGE NO.

1. ACKNOWLEDGEMENT 2

2. INTRODUCTION 3

3. COMPANY’S PROFILE 4

4. OBJECTIVES OF THE STUDY 9

5. SCOPE OF THE STUDY 10

6. METHODOLOGY 12

7. HISTORY OF INSURANCE 13

8. INDIAN INSURANCE INDUSTRY 15

9. MARKET SHARE 24

10. CONCEPTUAL FRAMEWORK 27

11. FINANCIAL PLANNING PROCESS 33

12. TRADITIONAL MARKET VS INSURANCE 41

13. INVESTMENT IN MUTUAL FUND VS ULIPS 45

14. DATA ANALYSIS AND INTERPRETATION 54

15. QUESTIONNAIRE 58

16. CONCLUSION 60

17. RECOMMENDATIONS 62

18. CHALLENGES AND LIMITATIONS 63

19. BIBLIOGRAPHY 64
 INTRODUCTION

Till few years ago one could easily see the monopoly observed by the Life Insurance

Corporation of India (L.I.C.) in the insurance sector in India. As the result of which

Insurance was considered merely as tool for protection against the financial losses that

may arise due the occurrence of a certain miss happening in the family (i.e. death of the

bread earner of the family.

But with the formation of I.R.D.A. (Insurance Regulatory and Development Authority)

and emergence of the private players in the market, insurance has become a vital tool for

Financial Planning. Not only these private players have offered a very stiff competition to

the L.I.C. but also they have improved the quality of the services offered by these

companies.

But the question which is still unanswered is about the awareness of financial planning.

Are we really aware of emergence of insurance as the tool of financial planning? How

will these private companies differentiate there products from traditional investment

instruments like Mutual and Equity shares? What is the future of these products?
 OBJECTIVES OF THE STUDY

The Objective of the study is to determine the extent of awareness of financial planning

in India and the understanding of insurance among the masses. The Scope of the study

involves

 To understand the concept of financial planning.

 To advice people to invest in the Unit Linked Products of HDFC Standard Life

Insurance Co.

 To compare traditional investment instruments (Mutual Funds etc. ) with

investment in Insurance.

 To analyze various Unit Linked Plans offered by HDFC Standard Life Insurance

Company.
 Data Analysis and Interpretation

Q.1 Do you know what is insurance?

35%
Yes
No
65%

Q.2 Do you know about ULIPs?

35%
Yes
No
65%

Q.3 What is Investment?

 30%

Yes
No
70%

Q.4 Where you want to invest your money?

20%

60% 20% Security Market

Depository Inst
Financial Inst

Q.5 In which type of financial institutions you want to invest your money?

30% 35%

Insurance Co.
Investement Bank
Mutul Fund

35%
Q.6 Are you interested in Risk cover or Return ?

40%

Yes
60% No

Q.7 Who is Better ?

40% ULIP

Mutul Fund
60%
Q.8 Under which section you are looking for tax exemption?

10%
10%
80 C
80 D

10% 80 E
Other

70%
 Questionnaire

Q.1 Do you know about Insurance?

a. Yes b. No

Q.2 Do you know about ULIP(United Life Insurance Policy)?

a. Yes b No

Q.3 In which policy you want to invest more?

a. Market-Driven

b. Fixed Amount Policy

Q.4 Are you interested in more risk cover or returns?

a. Risk cover

b. Returns

Q.5 Which type of investment you are looking for?

a. Short term Investment

b. Long term Investment

Q.6 How you want to pay your premium?

a. Lump sum

b. Once in year

c. Monthly

Q.7 Where you want to invest your money?

a. In govt. institutions
 b. Private sectors

Q.8 Are you looking for tax assumptions?

a. Yes b. No

Q.9 Under which section you are looking for tax assumptions?

a. 80C b. 80D c.80E

Q.10 Are you looking for retirement plan or not?

a. Yes b. No\

Q.11 Do you like to go for insurance after your policy ends?

a. Yes b. No
 CONCLUSION

Life Insurance is now being regarded as a versatile financial planning tool. Research

indicates that Indians have four basic financial needs during their life time:

1. Asset accumulation such as buying a house or a car.

2. Protecting their family

3. Securing their children’s education

4. Planning for their retirement.

India being a country of vast population of over one billion with only 33.2% of the

insurable population in India possessing Life insurance, the country has a vast potential

which has been left untapped now.

Till some years back, most of the people used to invest in traditional market (i.e. Equity,

Bonds, Mutual funds, Government securities and bonds etc.), but with the emergence and

popularity of Unit Linked Insurance products, the mindset has changed. One can see that

insurance is a better choice while making investment decisions because of features like:

1. Tax savings

2. Better returns

3. Protection from any miss happening.

The need of the hour is recognize the power of the Financial Planning. One who can draw

out a well defined financial plan according to his needs would expect good returns from

the market in the long run. How ever the awareness of financial planning among the

consumers is still low but with the increase in purchasing power of the customers andwith
coming up of new innovative products customers have started to plan for their financial

needs and in coming years the awareness is expected to increase.

Thus insurance industry has tremendous growth opportunities provided that it meets the

expectations of the customers. The changing products of insurance with changing needs

of the customers can be a major cause for the growth of the insurance industry.
 SUGGESTIONS

 Need to innovate and use differentiated strategies in sales, distribution and

marketing.

 Distribution channel should be made more efficient.

 The edge of the ULIPs over the products like mutual funds and investment in

equities should be appropriately promoted and should be made known to the

people.

 The quality of the sales force should be improved.

 Right customer identification and thus segmentation which needs to be accurate.

 The population residing in the rural areas must be prompted to invest in Insurance

products.

 Customer should be informed beforehand about the fluctuating returns from the

market.

 After sales services should be improved

 Claim settlement etc. should be made less harassing.

 CHALLENGES AND LIMITATIONS

1. Lack of financial assistance caused the study to be limited over a confined area.

2. Lack of knowledge among people about insurance as a investment product

remained the cause for not getting proper responses from some of the people.

3. As the Unit Linked plans are market dependent and have certain amount of risk

associated with them, people do not easily trust them.

4. Aggressive sales strategy of Private insurance players may cause inconvenience to

some people. Thus they do not furnish correct information in the questionnaire

filled by them
 BIBLIOGRAPHY

1. Kothari, C.R., Khan, TATA McGraw Hill Publishing Company Ltd., 2004.

2. www.moneycontrol.com

3. www.hdfcinsurance.com

4. www.metlife.com

5. www.sbi-insurance.com

6. www. Bajajallianzlife.com

7. www.sbi-insurance.com

8. www.google.com