PROJECT REPORT

ON

“​A RESEARCH ON CONSUMER PERCEPTION ABOUT​ ​LIFE

INSURANCE POLICIES”
SUBMITTED BY

TWINKLE DEWANI

(ROLL NO-71)

For the degree of

MASTER OF MANAGEMENT STUDIES

UNIVERSITY OF MUMBAI

Under the guidance of

Faculty Guide: ​Prof. Christina Shiju

PILLAI INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

Academic Year: 2017-18

 CERTIFICATE

This is to certify ​Ms. TWINKLE DEWANI successfully completes that project titled“​A
RESEARCH ON CONSUMER PERCEPTION ABOUT ​LIFE INSURANCE
POLICIES” during the IV semester, in partial fulfillment of the Master’s Degree in
Management Studies recognized by the University of Mumbai for the academic year 2016-18
through ​Pillai Institute of Management Studies and Research.

Name:

Date: (Signature of the Guide)

 DECLARATION

I, TWINKLE DEWANI, studying in S. Y. MMS of Pillai’s Institute of Management Studies

and Research, hereby declare that I have successfully completed this project on “​A
RESEARCH ON CONSUMER PERCEPTION ABOUT ​LIFE INSURANCE
POLICIES” ​in the year 2017-18 as per the requirements of Mumbai University as a part of
MMS program.

The information presented in this project is true and original to the best of my knowledge.

Name:

Roll No: Twinkle Dewani

 ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere
thanks to all of them.

A special thanks to ​Dr. Satish Nair​, for giving us the opportunity for their guidance and
advice, which helped me to complete this project.

A special thanks to Prof.Christina shiju​, my faculty guide, for their guidance and constant
supervision as well as for providing necessary information regarding the project & also for
their support in completing the project.

My thanks and appreciations also go to my colleague in developing the project and people
who have willingly helped me out with their abilities.

Thank you.

Twinkle Dewani
 EXECUTIVE SUMMARY

Everyone is exposed to various risks. Future is very uncertain, but there is way to
protect one’s family and make one’s children’s future safe. Life Insurance companies help us
to ensure that our family’s future is not just secure but also prosperous.

This study titled “Study of Consumers Perception about Life Insurance Policies”
enables the Life Insurance Companies to understand how consumers perception differs from
person to person. How a consumer selects, organizes and interprets the service quality and the
product quality of different Life Insurance Policies, offered by various Life Insurance
Companies.

The primary data was collected through questionnaire filling. The secondary data was
collected through the internet.
 INDEX

CHAPTER CONTENT PG.NO

EXECUTIVE SUMMARY

1 INTRODUCTION

1.2 THEORETICAL BACKGROUND

1.3 NEED OF THE STUDY

1.4 SCOPE OF THE STUDY

1.5 SIGNIFICANCE OF THE STUDY

1.6 LIMITATION OF THE STUDY

1.7 OBJECTIVES OF THE STUDY

2 LITERATURE REVIEW

3 RESEARCH AND METHODOLOGY

4 DATA ANALYSIS AND INTERPRETATION

5 CONCLUSION, SUGGESTIONS AND RECOMMENDATION

REFERENCES

APPENDIX
 CHAPTER 1

INTRODUCTION
 1.1 INTRODUCTION

“Life Insurance is a contract for payment of a sum of money to the person assured on
the happening of the event insured against”. Usually the insurance contract provides for the
payment of an amount on the date of maturity or at specified dates at periodic intervals or at
unfortunate death if it occurs earlier. Obviously, there is a price to be paid for this benefit.
Among other things the contracts also provides for the payment of premiums, by the assured.

Life Insurance is universally acknowledged as a tool to eliminate risk, substitute

certainty for uncertainty and ensure timely aid for the family in the unfortunate event of the
death of the breadwinner. In other words, it is the civilized world’s partial solution to the
problems caused by death. Life insurance helps in two ways dealing with premature death,
which leaves dependent families to fend for themselves and old age without visible means of
support.

Life policies are legal contracts and the terms of the contract describe the limitations
of the insured events. Specific exclusions are often written into the contract to limit the
liability of the insurer; common examples are claims relating to suicide, fraud, war, riot, and
civil commotion.

KEY PLAYERS IN THE INSURANCE INDUSTRY

1. LIC

2. ICICI PRUDENTIAL

3. TATA AIG

4. BIRLA SUN LIFE INSURANCE

5. MAX NEW YORK

6. SAHARA LIFE

7. SBI LIFE INSURANCE

8. AXA (AIRTEL, I.E. BHARTI GROUP’S)

9. OM KOTAK

10. ALLIANZ BAJAJ

11. AVIVA

12. ING VYSYA

13. RELIANCE LIFE INSURANCE

14. METLIFE INSURANCE

15. SHRIRAM SANLAM

16 HDFC STANDARD LIFE INSURANCE

Different Life Insurance Plans -

a) Protection plus savings plan

b) Protection plus Liquidity plan

c) Protection plus Asset Building plan

d) Investment Plan

e) Pension plan etc,

Benefits of Life Insurance Policies.

1) Superior to any other savings plan:

Unlike any other savings plan, a life insurance policy affords full protection against
risk of death. In the event of death of a policy holder, the insurance company makes available
the full sum assured to policy holder’s near and dear ones. In comparison, any other savings
plan would amount to only the total savings plan accumulated till date. If the death occurs
prematurely, such savings can be much less than the sum assured which means that the
potential financial loss to the family is sizable.

2) Encourages and Forces Thrifts:

A saving deposit can easily be withdrawn. The payment of life insurance premium, however,
is considered sacrosanct and is viewed with the same seriousness as the payment of interest
on a mortgage. Thus, a life insurance policy in effect brings about compulsory savings.

3) Easy settlement and protection against creditors:

A life insurance policy is the only financial instrument the proceeds of which can be
protected against the claims of a creditor of the assured by effecting a valid assignment of the
policy.

4) Administering the Legacy for Beneficiaries:

Speculative or unwise expenses can quickly cause the proceeds to be squandered. Several
policies have foreseen this possibility and provide for payment over a period of years or in a
combination of installments and lump sum amounts.

5) Ready Marketability and suitability for quick borrowing:

A life insurance policy can, after a certain time period (generally three years) be surrendered
for a cash value. The policy is also acceptable as a security for a commercial loan, for
example, a student loan.

6) Disability Benefits:

Death is not the only hazard that is insured; many policies also include disability benefits.
Typically, these provide for waiver of future premiums and payment of monthly installments
spread over a certain time period.
7) Accidental death Benefits:

Many policies can also provide for an extra sum to be paid (typically equal to the sum
assured) if death occurs as a result of accident.
 1.2 THEORETICAL BACKGROUND

History and Development of Life Insurance

1. Life Insurance, in its present form, came to India from the United Kingdom with
establishment of a British firm, Oriental Life Insurance Company in Calcutta in 1818,
followed by Bombay Life Assurance Company in 1823, the Madras Equitable Life Insurance
society in 1829 and Oriental Government security Assurance company in 1874. Prior to
1871, Indian Lives were treated as sub-standard and charged an extra premium of 15% to
20% . Bombay Mutual Life Assurance Society, a Indian insurer which came into existence in
1871 was the first to cover Indian lives at normal rates.

2. The Indian life Assurance Companies Act, 1912 was the first statutory measure to
regulate life insurance business. Later, in 1928, the Indian Insurance Companies Act was
enacted, to enable the government to collect statistical information about both life and
non-life insurance business transacted in India by Indian and foreign insurers, including the
provident insurance societies. Comprehensive arrangement was, however, brought into effect
with the enactment of the Insurance Act, 1938.

Efforts in this direction continued progressively and the act was amended in 1950,
making far-reaching changes, such as requirement of equity capital for companies carrying
on life insurance business, ceiling on share holdings in such companies, submission of
periodical return relating to investments and such other information to the controller of
insurance as he many call for, appointment of administrator for mismanaged companies,
ceiling on expenses of management and agency commission, incorporation of the Insurance
association of India and formation of councils and committees there of.

3. By 1956, 154 Indian insurers, 16 non-Indian insurers and 15 provident societies were
carrying online insurance business in India. On 19th January 1956, the management of the
entire life insurance business of 229 Indian insurers and provident insurance societies and the
Indian life insurance business of 16 non-Indian Life insurance companies then operating in
India, was taken over by the central Government and then nationalized on 1st September
1956 when the Life Insurance Corporation came into existence.

Reforms and Implications

The liberalization of the Indian insurance sector has been the subject of much heated
debate for some years. The sector is finally set to open up to private competition. The
Insurance Regulatory and Development Authority bill will clear the was for private entry into
insurance as the government is keen to invite private sector participation into insurance.

To address those concerns, the bill requires direct insurers to have a minimum paid-up
capital of Rest. 1 billion, to invest policy holder’s funds only in India; and to restrict
international companies to a minority equity holdings of 26 percent in any new company.
Indian Promoters will also have to dilute their equity holding to 26 percent over a 10 year
period.

Over the past three year, around 30 companies have expressed interest in entering the
sector and many foreign and Indian companies have arranged alliances. Whether the insurer
is old or new, private or public, expanding the market will Present challenges.

A number of foreign Insurance Companies have set up representative offices in India

and have also tied up with various asset management companies. Some of the Indian
companies which have tied up with International companies and its market shares are:
MARKET SHARES OF DIFFERENT FIRMS

Company 2011-12 2012-13 2013-14 2014-15 2015-16

LIC 71.8% 71.4% 75.5% 69.3% 70.5%

SBI Life 5.7% 4.8% 4.2% 4.9% 5.1%

ICICI Prudential 3.9% 4.5% 3.1% 4.7% 4.9%

HDFC Life 3.4% 4.1% 3.4% 4.8% 4.7%

Bajaj Allianz 2.4% 2.8% 2.2% 2.4% 2.1%

Max Life 1.7% 1.8% 1.9% 2.3% 2.1%

Birla Sun Life 1.7% 1.7% 1.4% 1.7% 1.6%

Kotak Life 1.0% 1.1% 1.1% 1.4% 1.6%

Reliance Nippon Life 1.6% 1.3% 1.6% 1.8% 1.1%

India First 0.9% 1.2% 1.4% 1.4% 1.1%

PNB Metlife 0.9% 0.8% 0.6% 0.7% 0.7%

Canara HSBC 0.6% 0.6% 0.5% 0.4% 0.6%

Tata AIA 0.8% 0.5% 0.4% 0.3% 0.5%

DHFL Pramerica 0.1% 0.1% 0.1% 0.5% 0.5%

Shriram Life 0.3% 0.4% 0.3% 0.4% 0.5%

Star Union Dai-ichi 0.8% 0.7% 0.5% 0.6% 0.5%

Exide Life 0.6% 0.6% 0.5% 0.6% 0.5%

IDBI Federal 0.3% 0.3% 0.3% 0.4% 0.4%

Bharti AXA 0.2% 0.2% 0.3% 0.4% 0.4%

Aviva 0.7% 0.6% 0.5% 0.5% 0.2%

Future Generali Life 0.3% 0.2% 0.2% 0.2% 0.2%

Edelweiss Tokio 0.0% 0.0% 0.1% 0.1% 0.1%

Aegon Life 0.2% 0.1% 0.1% 0.2% 0.1%

Sahara Life 0.1% 0.1% 0.1% 0.0% 0.0%

Type of life insurance policies

Whole life insurance

Whole life is a form of permanent insurance, with guaranteed rates and guaranteed
cash values. It is the least flexible form of permanent insurance.

Universal life insurance

Universal life is similar to whole life, except that you can change the death benefit
(the money paid to the beneficiary when the insured person dies), the amount of premiums
and how often you pay the premiums.

Variable life insurance

Variable life insurance is the riskiest form of permanent insurance, but it can also give
you the best return for your money. Essentially, the life insurance company will invest your
insurance premiums for you.

If the investments do well, the death benefit and cash value of the policy go up. If
they do poorly, they go down. It's a little like putting your savings into the stock market.

Group life insurance

Many companies allow their employees to buy group life insurance through the
company.

Usually, you can get very good rates for this insurance but you have to give the
insurance up when you stop working there. For that reason, group insurance can be a good
way to buy a little extra life insurance, but it does not make sense to make it your main
policy.
There are a number of policies for specific insurance needs. Some of these
include:

1. Family income life insurance.

This is a decreasing term policy that provides a stated income for a fixed period of
time, if the insured person dies during the term of coverage. These payments continue until
the end of a time period specified when the policy is purchased.

2. Family insurance​.

A whole life policy that insures all the members of an immediate family -- husband,
wife and children. Usually the coverage is sold in units per person, with the primary
wage-earner insured for the greatest amount.

3. Senior life insurance.

Also known as graded death benefit plans, they provide for a graded amount to be
paid to the beneficiary. For example, in each of the first three to five years after the insured
dies, the death benefit slowly increases. After that period, the entire death benefit is paid to
the beneficiary. This might be appropriate if the beneficiary is not able to handle a large
amount of money soon after the death, but would be in a better position to handle it a few
years later.

4. Juvenile insurance.

This is life insurance on a child. Coverage is paid for by an adult, usually the parents
or guardians. Such policies are not considered traditional life insurance because the child is
not producing an income that needs to be protected.

However, by buying the policy when the child is young, the parents are able to lock in
an extremely low premium rate and allow many more years of tax-deferred cash value
buildup.
5. Credit life insurance.

This insurance is designed to pay off the balance of a loan if you die before you have
repaid it. Credit life insurance is available for many kinds of loans including student loans,
auto loans, farm equipment loans, furniture and other personal loans including credit cards.
Credit life insurance can be purchased by an individual. Usually it is sold by financial
institutions making loans, like banks, to borrowers at the time they take out the loan. If a
borrower dies, the proceeds of the policy repays the loan directly to the lender or creditor.

6. Mortgage insurance

This decreasing term coverage is designed to pay off the unpaid balance of a
mortgage if you die before the mortgage is paid off. Premiums are generally level throughout
the term of the policy. The policy is usually independent of the mortgage, meaning that the
financial institution granting the mortgage is separate from the insurance company issuing the
policy. The proceeds of the policy are paid to the beneficiaries of the policy, not the mortgage
company. The beneficiary is not required to use the proceeds to pay off the mortgage

7. Annuity

An annuity is a form of insurance that enables you to save for your retirement.
Basically, you give the insurance company money for a certain period of time, and then after
you retire they will pay you a certain amount of money every year until you die. There are
many different forms of annuities. Most people who buy annuities are 55 or older.
THESE ARE THE VARIOUS LIFE INSURANCE COMPANY:-

● LIFE INSURANCE CORPORATION OF INDIA

Life Insurance corporation of India was formed in September 1956 by passing LIC
Act, 1956 in Indian parliament. On the nationalization of the life insurance in 1956, the
premium rating of Oriental Government security life Assurance company were adopted by
LIC with a reduction of 5% of the tabular premium or Re. 1 per thousand sum assured,
whichever was less. This reduction was made in anticipation of economies of scale that
would emerge on the merger of different insurers in a single entity.

Life Insurance Corporation Of India - there are many things to consider as Life
Insurance Corporation Of India offers various insurance products which are very complex,
but underlying this complexity is a simple fact. The building blocks for all Life Insurance
Corporation Of India are (1) investment return; (2) mortality experience; and (3) expense
management; for your Life Insurance Corporation Of India. LIC is the biggest insurance
player in the country. Out of the total premium of Rs 3766 crore generated by the insurance
industry through group business in the year 2005-06, LIC alone accounted for Rs 3051 crore.

In the financial year 2005-06, LIC has grown at 30.68%. In respect of number of lives
insured, LIC has shown a growth of over 152%. In respect of number of schemes, LIC has a
growth of 2%. LIC's market share in number of individuals covered and number of policies
stands at 77% and 81%, respectively.

● ING VYSYA LIFE INSURANCE

ING Vysya Life Insurance Company Private Limited entered the private life
insurance industry in India in September 2001, and in a span of 5 years has established itself
as a distinctive life insurance brand with an innovative, attractive and customer friendly
product portfolio and a professional advisor sales force.

It has a dedicated and committed advisor sales force of over 21,000 people, working
from 140 branches located in 74 major cities across the country and over 3,000 employees. It
also distributes products in close cooperation with the ING Vysya Bank network. The
Company has a customer base of over 4,50,000 & is headquartered at Bangalore. In 2005,
ING Vysya Life earned a total income in excess of Rs. 400 crore and also has a share capital
of Rs. 440 crore.ING Vysya Life Insurance Company is headquartered at Bangalore and has
established a strong presence in the cities of Delhi, Mumbai, Kolkata, Hyderabad and
Chennai. In addition ING Vysya Life operates in Vizag, Vijayawada, Mangalore, Mysore,
Pune, Nagpur, Chandigarh, Ludhiana and Jaipur.

ING Vysya Life has pioneered product innovations in the Indian life insurance market
with customer-oriented cash bonus endowment and money back products. (Reassuring Life
and Maximising Life), the first anticipated whole life product (Fulfilling Life) and the first
Term/Critical Illness combination product (Conquering Life). Conquering Life is an
innovative term and critical illness product that has been launched recently. Conquering Life
provides affordable term cover and critical illness coverage for 10 critical illnesses of upto
50% of the Sum Assured.

ING Vysya Life Insurance is a joint venture between ING Insurance International BV
a part of ING Group, the world's largest life insurance company . ING Vysya Bank, with 1.5
million customers and over 400 outlets and GMR Technologies and Industries Limited, part
of GMR Group also based in Bangalore and involved in the field of power generation,
infrastructural development and several other businesses. ING Vysya Life has a paid
up capital of Rs.140 crores and an authorised capital of Rs. 200 crores.

● Tata-AIG Life Insurance

Tata-AIG Life Insurance company is a joint venture between the Tata Group and
American International Group Inc (AIG), the leading US-based international insurance and
financial services organisation and the largest underwriter of commercial and industrial
insurance in America.
 Its member companies write a wide range of commercial, personal and life insurance
products through a variety of distribution channels in approximately 130 countries and
jurisdictions throughout the world. AIG’s global businesses also include financial services
and asset management, including aircraft leasing, financial products, trading and market
making, consumer finance, institutional, retail and direct investment fund asset management,
real estate investment management, and retirement savings products.

● HDFC STANDARD LIFE

The Partnership :

HDFC and Standard Life first came together for a possible joint venture, to enter the
Life Insurance market, in January 1995. It was clear from the outset that both companies
shared similar values and beliefs and a strong relationship quickly formed. In October 1995
the companies signed a 3 year joint venture agreement.Around this time Standard Life
purchased a 5% stake in HDFC, further strengthening the relationship.

The next three years were filled with uncertainty, due to changes in government and
ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act
passed in parliament. Despite this both companies remained firmly committed to the
venture.In October 1998, the joint venture agreement was renewed and additional resource
made available. Around this time Standard Life purchased 2% of Infrastructure Development
Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC
Treasury department to advise them upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and both
companies agreed the time was right to move the operation to the next level. Therefore, in
January 2000 an expert team from the UK joined a hand picked team from HDFC to form the
core project team, based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake
in HDFC Bank.
 ● ICICI PRUDENTIAL LIFE INSURANCE COMPANY

ICICI Prudential Life Insurance Company is a joint venture between ICICI, a premier
financial powerhouse and Prudential plc, a leading international financial services group
headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector
insurance companies to begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA).

ICICI Prudential is currently the No. 1 private life insurer in the country. For the
financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business
premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies

● OM KOTAK MAHINDRA Life Insurance Company

OM Kotak Mahindra Life Insurance Company Limited (OMKM), is a joint venture

between Kotak Mahindra Bank Ltd.(KMBL), and Old Mutual plc. At OMKM, the aim is to
help customers take important financial decisions at every stage in life by offering them a
wide range of innovative life insurance products, to make them financially independent.
Jeene Ki Azaadi…

● METLIFE INSURANCE COMPANY

For almost 135 years, Metropolitan Life Insurance Company has been insuring the
lives of the people who depend on them. Their success is based on their long history of social
responsibility, strong leadership, sound investments, and innovative products and services.

MetLife Begins

The origins of Metropolitan Life Insurance Company (MetLife) go back to 1863, when a
group of New York City businessmen raised $100,000 to found the National Union Life .

Supporting Country and Community

Over the years, MetLife has made a difference by supporting urban renewal projects and
community financing. The company's social commitment and its commitment to the security
of its policyholders have proven to be good business.

MetLife Today

● It is the fastest growing private life insurance company in India

● Currently have over 200,000 satisfied customers

● One of India’s leading private life insurance company.

● Total branches of India are, Andhra Pradesh, Delhi, Gujarat, Jammu & Kashmir,
Karnataka, Kerala, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu and West
Bengal.

● BIRLA SUN LIFE Insurance Company

Birla Sun Life Financial Services offers a range of financial services for resident
Indians and Non Resident Indians. Brought together by two large, powerful and reputed
business houses, the Aditya Birla Group and Sun Life Financial , it is our aim to offer diverse
and top quality financial services to customers. The Mutual Fund and Insurance companies
provide wealth management and protection products to customers while the Distribution and
Securities companies provide brokerage and trading services for investment in equities, debt
securities, fixed deposits, etc.

Insurance is not about something going wrong. It's often about things going right. One
of the wonders of human nature is that we never believe anything can actually go wrong.

Surely, life has its share of ifs. At Birla Sun Life however, they believe it has its
equally pleasant share of buts as well. Birla Sun Life stand committed to help you realise
those happy moments which make a life. Be it living the same lifestyle in your post
retirement days or providing a secure future for your loved ones, in case something happens
to you.
 ● MAX NEW YORK LIFE INSURANCE

Max New York Life Insurance Company Limited is a joint venture between Max
India Limited, a multi-business corporate, and New York Life International, a global expert
in life insurance. Max New York Life today emerged as the country's leading private life
insurance company. New York Life is a Fortune 100 company that has over 160 years of
experience in the life insurance business. Max India Limited is a multi-business corporate
dealing in Clinical Research, IT and Telecom Services, and Specialty Plastic Products
businesses. Max New York Life Insurance started its operations in India in 2000. It is the first
life insurance company in India to be awarded the IS0 9001:2000 certification. Max New
York offers customized products tailored to suit individual's needs. With its various Products
and Riders, there are more than 400 product combinations to choose from. Today, Max New
York Life Insurance has a network of 57 offices spread over 37 cities all over India.
 1.3 NEED FOR THE STUDY

1) The deeper the company’s understanding of consumer’s needs and perception, the
earlier the product is introduced ahead of competition, the greater the expected contribution
margin. Hence the study is very important.

2) Consumer markets and consumer buying behaviour can be understood before sound
product and marketing plans are developed

3) This study will help companies to customize the service and product, according to the
consumer’s need.

4) This study will also help the companies to understand the experience and expectations
of the existing customers.

5) Apart from creating, manufacturing and distribution capabilities for life insurance
products, an in depth study of the consumers, their preferences and demand for their product
is very necessary for setting up an efficient marketing network.
 1.4 SCOPE OF THE STUDY

● This study is limited to the consumers within the limit of NAVI MUMBAI.

● The study will be able to reveal the preferences, needs, perception of the customers
regarding the life insurance products, It also help the insurance companies to know
whether the existing products are really satisfying the customers needs .
 1.5​ ​ ​SIGNIFICANCE OF THE STUDY

● This Study will help us to understand the consumer’s perception about life insurance
policies.

● This study will help the companies to understand, How a consumer selects, organizes
and interprets the Quality of service and product offered by life insurance companies.
 1.6 LIMITATIONS OF THE STUDY

● Some of the persons were not so responsive.

● The sample size may not adequately represent the whole population.

● Some respondents were reluctant to divulge personal information which can affect the
validity of all responses.

● The research is confined in NAVI MUMBAI.

 ​1.7 OBJECTIVE OF THE STUDY

● To gain a thorough understanding of the attributes that buyers ascribe to life

insurance policies.

● To have an insight into the attitudes and behaviors of customers.

● To understand consumer’s preferences for different Life Insurance Policies.

 CHAPTER 2

LITERATURE REVIEW
 LITERATURE REVIEW

Chandhok (2012) explained that after the opening of the insurance sector in 1999,
many new players have entered in the business of Life insurance sector; the degree of
competition has increased multifold. The private insurance companies are launching new
innovative insurance plans for their survival and growth. At the same time, Life Insurance
Corporation of India has upgraded their quality of service to retain, maintain and attract new
business. An attempt has been made to study the impact of privatization on LIC. The
Development Officers were contacted to know their observations about the impact of
privatization on their life insurance business and their views as how their life insurance
business has been influenced by the opening of the sector. LIC has made a lot of changes in
its operation and latest technology is being used to serve the customer. The customer
grievances are properly attended and all maturity claims are settled to the entire satisfaction
of the policyholders. The privatization of the sector has brought lot of opportunities for all the
players. Under such situation, fittest of the fit will survive and the rest will vanish over a
period of time.

Gautam and Kumar (2012) stated that the attitudes of Indian consumers towards the
insurance services. The study has been made by collecting the responses of consumers
through structured questionnaire on five point Likert scale. A total 377 responses were
collected to assess the level of awareness about the insurance services and their attitude
towards insurance services. Findings of the research show that basic socio demographic and
economic variables have significant impact on consumers’ attitudes towards insurance
services in Indian scenario. The findings of the present study may act as input for the
insurance companies in Indian market to frame marketing strategies based on socio
demographic and economic variables.

Huber and Schlager (2011) explained that in real world decision-making under risk
and uncertainty presents one of the most challenging areas of research nowadays. To date,
only little is known about the underlying attitudes that present the foundation of
decision-making. They develop a causal model examining the antecedents of consumers'
purchase behavior in the context of long-term savings, particularly unit-linked life insurance
products. Our experimental approach (n = 929) builds on two theoretical foundations: the risk
as analysis and risk as feeling perspective which they apply to shed further light on the
formation of product perceptions. Our research identifies a pivotal role of risk avoidance and
uncertainty avoidance. Moreover, they complement our findings by investigating the
conditions under which the two components exert their full influence on purchase behavior.
The results indicate moderating effects of trust in the industry product guarantees, as well as
expertise, which underline the risk as feeling and risk as analysis perspective.

Kothari, et al., (2011) ​stated that the life insurance is one of the most important
social security measures undertaken in the country. Based on primary data generated through
direct contacts, this study attempts to identify determinants of life insurance ownership in the
country. This resulted into finding out what factors play very important role in life insurance
policies purchase. Total 100 respondents were there used in this study. Item to total
correlation was applied to check the consistency of the questionnaire. The measures were
standardized through computation of reliability and validity tests. Factor analysis was applied
to identify the underlying factors. The findings of this study provide the individual perception
about the insurance policies.

Rajeswari and Kartheeswari (2011) determined that the customer satisfaction as the
perception of customers on the service whether that service has met his needs and
expectations. Service quality, personal factors, perception of equity and fairness, price,
product quality, situational factors and attributions for service success or failure are the
factors that influence the customer satisfaction. However, the perceptions and expectations of
the policyholders who have taken the policies from Life Insurance Companies vary from
person to person. This study emphasizes the perceptions of the policyholders about the
service rendered by the LIC of India and intends to promote a better theoretical understanding
and recognition of the complexities to service quality and its measurement with respect to life
insurance. The study is based on 380 policyholders from Virudhunagar District situated in
South Tamil Nadu. The giant public sector life insurance company in the study area with their
thick infrastructure facilities and network of branches enjoyed a monopoly status in spite of
the competition with private players on the basis of their service quality. The opinion survey
with the policyholders also brings to the fore that the LIC has served them well in regard to
dissemination of product knowledge, issue of policies, after sales service before and after
claim even though a slight discontent is reported by minority.

Sandhu and Bala (2011) inferred that the service quality has become a highly
instrumental coefficient in the aggressive competitive marketing. For success and survival in
today’s competitive environment, delivering quality service is of paramount importance for
any economic enterprise. Life Insurance Corporation of India, the leading insurance company
has set up ‘benchmarks’ in enervating the whole concept of service quality. The present study
aims to measure customers’ perception towards life insurance service quality by applying a
framework developed by them. An advocated procedure has been used to develop, refine and
validate a scale. Data has been collected from 337 customers from the three cities of Punjab
(a progressive State of India). The findings of the study demonstrate that five-factor structure
has been refined to seven factor construct (consisting of 34 items) representing Proficiency;
Media and presentations; Physical and ethical excellence; Service delivery process and
purpose; Security and dynamic operations; Credibility; and Functionality. Besides, the study
also investigates the relationship between each of the generated service quality dimensions
and customers overall evaluation of life insurance service quality. It reveals that among these
seven factors, three viz., Proficiency; Physical and ethical excellence; and Functionality have
significant impact on the overall service quality of Life Insurance Corporation of India.
Managerial implications and directions for further research have also been discussed.

Yusuf et al., (2009) described the Nigerians attitude towards the insurance institution.
The attitudes, most often negative are mirrored through low patronage of insurance services.
It discusses such social-cultural factors that account for these attitudes and what role
marketing strategies can play to change such negative tide. Drawing from theoretical
foundation, an empirical survey was conducted among 392 members of the public-insuring
and non-insuring-to gauge their awareness level and general attitudes towards insurance
companies and their operations. The findings present different demographic factors and their
attitudes towards insurance companies and their services. It is expected that findings from
such survey would constitute vital input for insurers in designing marketing strategies that
would further stimulate and boost patronage and perception of insurance services.
 CHAPTER-3

RESEARCH METHODOLOGY
 RESEARCH METHODOLOGY

Method of Data Collection:

● Primary data​: Primary data was collected through survey using questionnaire with
sample size of 63 respondents.
● Secondary Data​: Secondary Data was collected from various sources such as books,
internet, and newspapers.
● Questionnaire​: In this study, the research has used a questionnaire consisting of
fifteen multiple-choice based questions.
● Tool used​:- In this research the data analysis tools used are percentages and graphs.
The various attributes were analysed separately and the importance to each was
calculated on the basis of the percentage. The rank having the maximum percentage
was taken to be preferred importance to the particular attribute.After looking at each
attribute separately, all the attributes were considered together to develop a map on
the most preferred rank for all the attributes.
● Graphical representation of data​: Graphical representation tool such as Bar Graphs
and Pie Charts have been used for the data analysis.
 CHAPTER-4

DATA ANALYSIS AND

INTERPRETATION
 DATA ANALYSIS AND INTERPRETATION

1- AGE

INTERPRETATION:-

1. 68.3% of the respondent age is between 20-25.

2. 25.4% of the respondent age is between 26-30.
3. 4.8% of the respondent age is between 31-40.
4. 1.6% of the respondent age is between 41-50.

2-GENDER

INTERPRETATION:-

1. 50.8% of the respondent are Female.

2. 49.2% of the respondent are Male.
3-OCCUPATION

INTERPRETATION:-

1. 57.1% of the respondent are Students.

2. 38.1% of the respondent are Government employee.
3. 3.2% of the respondent are Housewife.
4. 1.6% of the respondent are retired.

4-INCOME

INTERPRETATION:-

1. 53.2% of the respondent income is under 5000 rs.

2. 32.3% of the respondent income is between 5000-20000 rs.
3. 11.3% of the respondent income is between 20000- 40000 rs.
4. 3.2% of the respondent income is between >40000.
5- DO YOU OWN?

INTERPRETATION:-

1. 49.2% of the respondent owns house.

2. 39.3% of the respondent owns Two wheeler.
3. 11.5% of the respondent owns car.

6-​ Do you have a Life Insurance Policy with any Life Insurance Company?

INTERPRETATION:-

1. 46.8% of the respondent ​have a Life Insurance Policy with Kotak Mahindra.
2. 37.1% of the respondent ​have a Life Insurance Policy with LIC.
3. 25.8% of the respondent ​have a Life Insurance Policy with ICICI.
4. 24.2% of the respondent ​have a Life Insurance Policy with HDFC.
5. 16.1% of the respondent ​have a Life Insurance Policy with METLIFE.
6. 11.3% of the respondent ​have a Life Insurance Policy with TATA AIG.
7- What factors do you consider while buying a life insurance policy?

INTERPRETATION:-

1. 61.9% of the respondent consider Returns while buying a life insurance policy.
2. 41.3% of the respondent consider Service Quality while buying a life insurance
policy.
3. 34.9% of the respondent consider Premium Outflow while buying a life insurance
policy.
4. 25.4% of the respondent consider Product Quality while buying a life insurance
policy.
5. 23.8% of the respondent consider Reputation while buying a life insurance policy.

8- What factors influenced to buy Life Insurance Policy?

INTERPRETATION:-

1. 50.8% of the respondent buy life insurance policy by their own Personal interest.
2. 25.4% of the respondent buy life insurance policy through family.
3. 23.8% of the respondent buy life insurance policy through Friends.
9- What is the value of your life insurance?

INTERPRETATION:-

1. 47.6% of the respondent prefer to buy life insurance policy under 10000.
2. 31.7% of the respondent prefer to buy life insurance policy between 10000-20000.
3. 20.6% of the respondent prefer to buy life insurance policy between 20000-30000
4. 4.8% of the respondent prefer to buy life insurance policy between >30000

10- Do you prefer to invest your money in a Insurance company or in a Bank?

INTERPRETATION:-

1. 77.4% of the respondent prefer to invest their money in insurance company.

2. 21% of the respondent prefer to invest their money in banks.
3. 1.6% of the respondent prefer to invest their money in stock markets.
11- Are you satisfied with your current Life Insurance Company?

INTERPRETATION:-

1. 39.7% of the respondent are satisfied with their current Life Insurance Company.
2. 36.5% of the respondent are Neutral with their current Life Insurance Company.
3. 17.5% of the respondent are very satisfied with their current Life Insurance
Company.
4. 6.3% of the respondent are dissatisfied with their current Life Insurance Company.

12- How do you rate the service offered by your Life Insurance Company?

INTERPRETATION:-

1.
2. 30.2% of the respondent rate Good as service offered by their Life Insurance
Company.
3. 19% of the respondent rate Average as service offered by their Life Insurance
 Company.
4. 12.7% of the respondent rate Very Bad as service offered by their Life Insurance
Company.
5. 6.3% of the respondent rate Bad as service offered by their Life Insurance Company.

13- Would you like to communicate the service offered by your Life Insurance Company to
others?

INTERPRETATION:-

1. 87.3% of the respondent would like to communicate the service offered by their Life
Insurance Company to others.
2. 12.7% of the respondent would like to communicate the service offered by their Life
Insurance Company to others.

14- How many Life insurance Companies do you know?

INTERPRETATION:-

1. 47.6% of the respondent knows more than 5 life insurance companies.

2. 30.2% of the respondent knows 5-7 life insurance companies.
3. 12.7% of the respondent knows 8-10 life insurance companies.
4. 9.5% of the respondent knows more than 10 life insurance companies.

15- How do you rate the following Life Insurance Companies?

INTERPRETATION:-

1. Most of the respondent rate 3rd out of 5 rank to LIC.

2. Most of the respondent rate 2nd out of 5 rank to HDFC.
3. Most of the respondent rate 3rd out of 5 rank to TATA-AIG.
4. Most of the respondent rate 3rd out of 5 rank to METLIFE.
5. Most of the respondent rate 1st out of 5 rank to KOTAK MAHINDRA.
 CHAPTER-5

FINDINGS, CONCLUSION AND

RECOMMENDATION
 FINDINGS

1. To gain a thorough understanding of the attributes that buyers

ascribe to life insurance policies.
There are various attributes that buyers ascribe to life insurance policies are Returns,
Reputation, Premium outflow, Service quality, Product quality etc. ​Most of the respondents
personally prefer to invest their money in insurance company better than banks and stock
market because of their best services. Respondents gave the major priority to the returns they
get from life Insurance company than other various factors. They feel secure to buy life
insurance less than 10000.

2. To have an insight into the attitudes and behaviors of customers.

As most of the respondents’ income is less than 5000, they mostly concentrate on
returns and security. 31.7% of the respondent rate Very Good as service offered by their Life
Insurance Company.The respondents are very much satisfied with the services that are
provided to them but they are not aware about all the life insurance companies that are
available today.

3. To understand consumer’s preferences.

LIC AND KOTAK brand name has earned a lot of goodwill and enjoys a high brand
equity. As there is intense competition in life insurance market, LIC AND KOTAK should
work hard to maintain its top position and offer better service and product.

The Indian insurance market scenario has noticed a change in terms of improved
customer service benchmarks and introduction of innovative and tailors made products.The
new products that have been introduced by the companies have certain innovative features in
terms of better customer services and also wider covers. This has given customer ample
choice to select products.
 CONCLUSION

This study titled “Study of Consumers Perception about Life Insurance Policies”
enables the Life Insurance Companies to understand how consumers perception differs from
person to person. How a consumer selects, organizes and interprets the service quality and the
product quality of different Life Insurance Policies, offered by various Life Insurance
Companies

The response of the insurance companies has been very positive and within a short
span of time, the Indian insurance market scenario has seen a perceptible change in terms of
improved customer service benchmarks and introduction of innovative and tailors made
products.Most of the insurance majors have represented in the form of joint venture in Indian
Market.The new products that have been introduced by the companies have certain
innovative features in terms of better customer services and also wider covers. This has given
customer ample choice to select products
 SUGGESTIONS AND RECOMMENDATION

With regard to insurance products, consumers respond at different rates, depending on

the consumers characteristics. Hence Insurance companies should try to bring their new
product to the attention of potential early adopters.

a) Due to the intense competition in the life insurance market, the life insurance
companies have to adopt better strategies to attract more customers.

b) Keeping the cost, quality and return on investment in tact is necessary in order to
tackle the competition.

c) Life insurance products are taken mainly by middle and higher income group. Hence
they should be regarded as maim targeted income groups. Life insurance products which are
suitable for lower income group should also be released so that the market share increases.

d) Return on investment company reputation and premium outflow are most preferred
attributes that are expected by the respondents. Hence greater focus should be given to these
attributes.

e) Private life insurance companies should adopt effective promotional strategies to

increase the awareness level among the consumers.

f) Life insurance companies should ask for their consumer feedback to know whether
the consumers are really satisfied or dissatisfied with the service and product of the
companies. If they are dissatisfied , then the reasons for dissatisfaction should be found out
and should be corrected in future.

g) The LIC AND KOTAK brand name has earned a lot of goodwill and enjoys a high
brand equity. As there is intense competition in life insurance market, LIC AND KOTAK
should work hard to maintain its top position and offer better service and product.
 BIBLIOGRAPHY

Chandhok A​.,(2012), “A Study on the Attitude of General Public towards LIC after
the Privatization”, IJLESS International Journal of Languages, Education and Social Sciences
2(1), 11-20.

Gautam V. & Kumar M.​,(2012), “A study on attitudes of Indian consumers towards

Insurance Services”, Management Research and Practice 4 (1), 51-62.

Huber C. & Schlager T.​,(2011),“To buy or not to buy Insurance? the antecedents in
the decision-making process and the influence of consumer attitudes and perceptions”,
Working Papers on Risk Management and Insurance No. 90, University of St. Gallen.

Kothari H., Agarwal R., Bhat A. & Sharma S​.,(2011),“A study on factors affecting
individuals investment towards Life Insurance Policies”, Altius Journal of Management,
Commerce and Law 1(1), 35-45.

Rajeswari & Kartheeswari​, (2011),“Perception of customers towards Life Insurance

Services”, Sri Krishna International Research & Educational Consortium 2(12), 1-15.

Sandhu H.S. & Bala N.​, (2011), “Customers’ Perception towards Service Quality of
Life Insurance Corporation of India: A Factor Analytic Approach”, International Journal of
Business and Social Science 2(18), 219-231.

Yusuf T.O., Gbadamosi A. & Hamadu D (2009), “Attitudes of Nigerians towards

Insurance Services: an Empirical Study”, African Journal of Accounting, Economics, Finance
and Banking Research, 4(4), 34-46.
 REFERENCES

www.lifeinsurance.com

https://www.myinsuranceclub.com/articles/market-share-of-life-insurance-companies-2
015-16

https://www.ibef.org/industry/insurance-sector-india.aspx

http://www.livemint.com/Money/3kvSmCikYTKlK4e9ZW8MWL/Life-insurance-indust
ry-set-to-grow-1215-in-FY17-report.html

www.lic.com
 QUESTIONNAIRE

A STUDY CONDUCTED TO UNDERSTAND THE CONSUMER’S PERCEPTION

ABOUT LIFE INSURANCE POLICIES

1.Age:

2.Occupation:

3.Monthly income:

<5000 5001-10,000 10,000-15,000

20,001-25,000 >25,000 15,001-20000

4.Do You Own

House Two Wheeler Car

5.Do you have a Life Insurance Policy with any Life Insurance Company?

Yes No

6.What factors do you consider while buying a life insurance policy?

Premium Outflow Company Reputation

Service Quality Product Quality

Return on Investment

7.What factors influenced to buy Life Insurance Policy?

Personal interest Friends Family

Agents Advertisements others

8. What is the value of your life insurance?

>10,000 10,000-25,000 25,000-50,000

50,000-1,00,000 >1,00,000
9. Do you prefer to invest your money in a Insurance company or in a Bank?

Insurance Company Bank

10. Are you satisfied with your current Life Insurance Company?

Yes No

11. How do you rate the service offered by your Life Insurance Company?

Excellent Very Good Good

Average Poor

12.Would you like to communicate the service offered by your Life Insurance Company
to others?

Yes No

13. How many Life insurance Companies do you know?

<5 5-7 8-10 >10

14. How do you rate the following Life Insurance Companies?

LIC HDFC ING VYSYA METLIFE INDIA INSURANCE

BAJAJ ALLIANZ ICICI Prudential TATA AIG Others

15. Would You like to continue with the same Life Insurance Company?

Yes No