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					                    A REPORT

                        ON



ANALYSIS OF CONSUMER INVESTMENT BUYING BEHAVIOR AND

   INNOVATION IN INSURANCE IN PRESENT SCENARIO




                    15TH MAY 2009
                             CERTIFICATE



This is to certify that the project entitled, “Analysis of consumer investment buying
behavior and market potential Of ULIPs in the NCR Region”, submitted in partial
fulfillment of the degree of Master of Business Administration (MBA) as per requirement,
is based on original project study, conducted by Chani Raj (Enroll. No. 07BS 1073),
under my guidance and supervision.




                                           2
                           EXECUTIVE SUMMARY
The basic project objectives are as follows:

      To study consumer investment behavior
      To study brand awareness of Kotak
      Comparison of ULIPs.
      To discuss various new avenues in insurance and find the Market potential of
       ULIP in NCR regions which was divided into four regions viz: Delhi, Gurgaon,
       Noida, and Greater Noida.

As a part of my project I was required to carry out two surveys.

The following vital conclusions were derived:
      Trust needs to be developed among the customers both as far as the ULIP as a product
       is concerned
      Some respondents despite of knowing about ULIP were hesitant to talk on it because
       they were not too confident about their knowledge. This very fact completely declines
       the concept of providing switches as a lucrative feature in ULIP (which is done by most
       of the companies). The reason is that very rarely people have the ability or time to use
       these features.
      Awareness was missing specifically in Greater Noida and Noida in comparison to Delhi.


Important Recommendations that were suggested are:


      Building trust by providing the customers with adequate knowledge about the company
       and then the product.
      Enhancing the level of awareness in terms of the company, their Partners and then the
       product and special emphasis among the female chunk of the population.
      Adequate advertisement via appropriate media should be done by the various
       companies as is done in the case of mutual Funds.




                INTRODUCTION TO INSURANCE

                                                3
HISTORY OF INSURANCE


I’m sure we’ve all heard of the word, and have an idea of how it works. Is it a great
thing? Is it something concrete or abstract? It depends on the context of the situation.
A quick, simple definition of insurance could be as follows: Reimbursement in a
situation of loss. Usually, someone decides that insurance is needed. In order for the
concept of insurance to arise, a prepayment of some type is required. In the case of
typical, everyday general auto, health and life insurance, for example, the pre payment
is in the form of a premium. Prior to the eve of the year 2000, thousands of people
flocked to the stores, stocking up on numerous supplies. They feared that something
catastrophic was going to take place once the clock struck midnight, and if so, they
wanted to do prepare. Isn’t this a form of insurance? Sure in its basic definition. The
supplies they purchased would act as reimbursement in the case of loss.

Early insurance goes back to the Egyptian times. It was known that around 3000 BC,
Chinese merchants dispersed their shipments among several vessels to avoid the
possibility of damage or loss. There are some insurance companies around today in
the United States that provided insurance back in the mid 1700’s, as well as some that
provided relief to banks during the 1930’s and the Great Depression. Today, there is
insurance for any aspects of daily living: Business, Auto, Health, Life and Travel. Each
of those categories includes sub-categories, branching off into numerous divisions.
From the beginning human societies sought ways to soften the shocks of existence.
Our ancestors were very much aware that no individual could go it alone, that only by
pooling the resources of the many could the unfortunate few be helped.

This simple notion of mutuality persists like a welcome footpath through the incredible
tangle of human history. While empires have risen and collapsed, through wars,
famines and pestilence, during the ebb and flow of struggling generations, the idea of
insurance as “the victory of human thought over the rude violence of life”

 Even as human society emerged from the darkness of unrecorded time, we see it at
once. In ancient Babylonia, where from the confluence of two rivers, enterprising
merchants sent caravans and ships to trade with all parts of the known world: with
Egypt, Phoenicia, India and China.

To reduce the risk of robbery, plunder and capture for ransom, the Babylonians devised
a system of contracts in which the supplier of capital for a venture agreed to cancel the
loan if the trader was robbed of his goods. The trader who borrowed the capital paid an


                                           4
extra amount for this protection (a premium) in addition to the usual interest. As for the
lender, collecting these premiums from many traders made it possible for him to absorb
the losses of the few. This arrangement proved to be more appealing and sensible than
the earlier one of pledging not only the trader’s ships and other tangible property, but
also his life (as a slave) and those of his family as well. Accordingly, the practice was
sensibly legalized in the Code of Hammurab.

       These arrangements became well known to the Phoenicians and to the Greeks,
Hindus we discover a comprehensive code of sea laws, including a principle of “jettison”
or “general average.” It states that if it becomes necessary to throw goods overboard in
order to lighten the ships, such sacrifice for the common benefit should be made good
by a common contribution. The very word “insurance” is derived from the Latin word for
“security.”




                                            5
WHY DO PEOPLE INVEST??
People invest in life insurance owing to a few key reasons, mainly

    Insurance creates financial provisions for the deceased's dependants.
    Insurance provides for the policyholder's old age after his earning power
      diminishes. After all, interest rates may fall and invested holdings may lose
      value and stop gaining dividends, but the value of an insurance policy once set,
      never reduces.
    Insurance also provide a legally authorized way to reduce the incidence of
      Income Tax.
With a view to promote savings and increase awareness regarding insurance, the
government has provided certain benefits through the Income Tax Act for taxpayers if
they choose to opt for life insurance policies. If you plan for your future in a prudent
manner, you can maximize the returns on your insurance portfolio.



      Under Section 10(l0A) (iii) of the Income Tax Act, any payment received by way
      of commutations of pension out of the Jeevan Suraksha annuity plans is
      exempt from tax
      Under Section 10(10D), any sum received under a Life Insurance policy (not
      being a Key Man policy) is also exempt from taxation. But it is wise to
      remember that Pensions received from Annuity plans are not exempted from
      Income Tax.
      Section 80 CCC provides a deduction of up to Rs.10,000/- to an individual
      assessee for any amount paid or deposited to effect or keeping in force any
      annuity plan of LIC for receiving pension from the fund referred in sections 10
      (23AAB). Presently LIC's Jeevan Suraksha plan is one such plan using such
      benefit.




WHAT IS AN ULIP (Unit Linked Insurance Plan)?

                                           6
      A policy, which provides for life insurance where the policy value at any time
varies according to the value of the underlying assets at the time. ULIP is life insurance
solution that provides for the benefits of protection and flexibility in investment. The
investment is denoted as units and is represented by the value that it has attained
called as Net Asset Value (NAV).

     A unit-linked insurance plan provides both insurance and investment benefit. In
unit-linked plans, the premiums paid are invested in funds offered by the company; the
policyholder determines the appropriate ratio of investments into these funds. The funds
are generally invested in equities, debt instruments, money market instruments, and
government securities.

      The value of the policy is determined on any day by multiplying the number of
units issued by the value of units on that day. The value of these units is called the Net
Asset Value (NAV) and is normally published in newspapers on a daily basis. Unit-
linked insurance products are risky because the premium money invested is subject to
market risk. The funds do not offer a guaranteed or assured return. Insurance
companies will only show you a projected return, which may or may not be achieved
during the term of the policy.



Are            Ulips            Similar            To             Mutual             Funds?

In structure, yes; in objective, no. Because of the high first-year charges, mutual funds
are      a     better      option       if     you    have      a     five-year      horizon.
But if you have a long term investment horizon, then ULIPs have an edge. To explain
this further a ULIP has high first-year charges towards acquisition (including agents’
commissions).
As a result, they find it difficult to outperform mutual funds in the first five years. But in
the long-term, ULIP managers have several advantages over mutual fund managers.
Since policyholder premiums come at regular intervals, investments can be planned out
more                                                                                   evenly.
Mutual fund managers cannot take a similar long-term view because they have bulk
investors who can move money in and out of schemes at short notice.



ADVANTAGES OF UNIT-LINKED POLICIES:

                                              7
 A combination of protection and tax advantage, unit-linked policies dominate a
  huge chunk of the portfolio of the private insurers. The annual premium
  contributes over 70% to the premium income.
 In the event of death during the life of the policy, the sum assured or value of the
  policy fund whichever is higher is paid to the nominees.
 There is a lot of flexibility in these plans with falling interest rates. So an investor
  can adjust his risk profile according to his choice. The risk element is transferred
  to the investor and the insurance company enjoys the capital and solvency.
 The client is aware of the "no guarantee" era and he plans his investment
  judiciously.
 The client enjoys transparency, by way of returns on the equity markets
  simultaneously enjoying the benefits of life cover.
 It's tax-free, unlike a mutual fund or any other investment, where the gains are
  taxed.
 The client also has an option of restructuring his investment pattern which is a
  value addition to the original policy (i.e. top-ups)
 Contrary to the traditional policies, the unit linked policies are more transparent,
  flexible and easy to understand. The customer has open options for investment
  and he is consciously aware of the ratio of his premium towards investment and
  life cover.




                       COMPANY PROFILE
                                          8
       KOTAK GROUP is one of the top most financial product service providers in
India. It is one of India's leading financial conglomerates, 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 financial needs of individuals and corporates.

           The group has a net worth of over Rs5,824 crores, employs around 20,000
people in its various businesses and has a distribution network of branches,
franchisees, representative offices and satellite offices across 370 cities and towns in
India and offices in New York, London, San Francisco, Dubai, Mauritius and Singapore.
The group services around 4.4 million customer accounts. It comprises of following sub
units which combines to form such a vast company and group of people.



1. Kotak Securities.

2. Kotak Insurance.

3. Kotak Mahindra bank.

4. Kotak Mutual funds.

5. Kotak Private equity.

6. Kotak Investment banking.

7. Kotak Reality funds.

.

             The Kotak Mahindra Group was born in 1985 as Kotak Capital
Management Finance Limited. This company was promoted by Uday Kotak, Sidney A.
A. Pinto and Kotak & Company. Industrialists Harish Mahindra and Anand Mahindra
took a stake in 1986, and that's when the company changed its name to Kotak
Mahindra Finance Limited. Since then it's been a steady and confident journey to
growth and success.



                               KOTAK DIRECT
                                           9
     KOTAK DIRECT (A Subsidiary of KOTAK SECURITIES) deals with ULIPs (Unit
Linked Insurance Plans). It was started in 2007 with the Head office in Mumbai. The
various branches of Kotak Direct are located throughout the country & new branches
are opening up as well.

Kotak Securities, a subsidiary of Kotak Mahindra Bank, is the stock-broking and
distribution arm of the Kotak Mahindra Group. The institutional business division, which
brings you AKSESS, primarily covers secondary market broking. It caters to the needs
of foreign and Indian institutional investors in Indian equities (both local shares and
GDRs). The division also has a comprehensive research cell with sectoral analysts
covering all the major areas of the Indian economy.

 Kotak Securities Ltd. is one of the oldest and leading stock broking houses in India with
a market Kotak Securities Ltd. has also been the largest in IPO distribution .


Kotak Securities has 877 outlets servicing over 4, 30,000 customers and a coverage of
321 cities. Kotaksecurities.com, the online division of Kotak Securities Limited offers
Internet Broking services and also online IPO and Mutual Fund Investments.

Kotak Securities Limited has over Rs. 3300 crore of Assets Under Management (AUM)
as of 31st March, 2008. The portfolio Management Services provide top class service,
catering to the high end of the market. Portfolio Management from Kotak Securities
comes as an answer to those who would like to grow exponentially on the crest of the
stock market, with the backing of an expert.




                           STRUCTURE OF KOTAK DIRECT
                                           10
                             Vice President



 STRATEGIC
                               Zonal Head
LEVEL OR TOP
   LEVEL


                              Area Head


MIDDLE
 LEVEL
                                                        TEAM of
                             Territory Head
                                                     10 TO 20 people



                          Sales Manager
 OPERATIO
 NAL LEVEL




                       Senior Relationship Manager


                          Relationship Manager




               SYSTEMATIC APPROACH OF THE SALES TEAM

                                   11
       Before going for PITCHING & PRESENTATIONS, the sales team need to follow the
following process for systematic functioning.


               CUSTOMER SUPPORT                                        AGENTS

              (Customer Call Centre)                               (RM’s & SRM’s)


     (Prepares pool of prospective customers)         (Prepares pool of prospective customers)

                   TELE CALLING                                     Prospective Clients




(After talking to prospective clients)     Appointment Fixed




                                           PRE APPROACH               (Study about the client & client’s needs)



                                                APPROACH

                                                                 (Meet the client)

                                         PITCHING & PRESENTATION

                                                                          (Info. about various plans)
                                          QUERY HANDLING

(Replying to confusions & queries)

                                                FOLLOW UP
                                                                   (Persuading the client)




                        FUNCTIONS OF THE OPERATIONS TEAM

                                                       12
      If client is convinced & interested, the following process needs to be performed by the
OPERATION TEAM before the policy is dispatched to the policy holder.


                               Completion of Forms & Documents



                                     Crosscheck at Branches




                                             Form is

                         NO               Error Free
                                          fFrFreeFr
                                     YES
                                              ee
                              Primary underwriting (Zonal Office)




                                                    NO
                                              Form is

                                             Error Free
                                       YES
                                             fFrFreeFr
                                                 ee
                              Secondary underwriting (Main Office)




                                               Case is
       Policy rejected   NO
                                               picked

                                              Error Free
                                             fFrFreeFree
                                                     YES
                                      Case logged in (Live Asia)




                                     Policy Dispatched to Clients




                                                        13
                   POLICIES OF KOTAK DIRECT


                There are basically 3 policies dealt in KOTAK DIRECT



    KOTAK SAFE INVESTMENT PLAN (KSIP)

    KOTAK SMART ADVANTAGE PLAN (KSAP)

    KOTAK HEADSTART FUTURE PROTECT



               Depending upon the needs & wants, clients have the option of choosing
between any of these three plans which provides them with various benefits & growth
options along with an Insurance cover.




                                        14
                        KOTAK SAFE INVESTMENT PLAN (KSIP)



   Kotak Safe Investment Plan is a Unit Linked Insurance Plan that combines the
benefits of insurance and capital market returns into one. This plan from the stable of
Kotak Life Insurance is a true reflection of the company’s essence: innovation that will
benefit the investor.

What makes investing in Kotak Life Insurance truly unique is that you enjoy a
Guaranteed Maturity Value with varying degrees of equity exposure depending on your
risk appetite. So if the market value of your units is higher, you reap the benefits with
the peace of mind that whilst in a bear market your investment is under-pinned by the
Guaranteed Maturity Value. And there is more, the returns are totally Tax free.




                        KOTAK SMART ADVANTAGE (KSAP)

    Guaranteed returns of unto 275% of your first year premium at maturity
    Assured bonus additions at regular intervals during he policy term to enhance
     your fund value.
    100% allocation of the premium from 2nd year onwards
    Unique fund offering maximum opportunity for growth and choice for your
     investment needs
    Maximum protection for your loved ones to choose from.


                        KOTAK HEADSTART FUTURE PROJECT



Every child is different. Each has their own set of dreams and aspirations. As a parent
you would like to provide your child with all the building blocks that could develop his or
her potential to the fullest. This could mean extra coaching or tuition for talented
children, special training or equipment for natural athletes or professional training for
born singers. Headstart Child Plans is a specially tailored, cost-effective plan, aims to
give your children the financial means to pursue his or her dreams and live them.




                                            15
The Headstart Advantage:

    Triple Death Benefit : Sum received at death =( Sum assured + Fund value +
     Remaining premium)
      Dynamic Floor Fund
      Maximizes wealth while providing protection
      Joint life option
      Save for 2 children with one plan
      Additional bonus units
      Flexible Withdrawal


Additional Benefits :

 Term / Preferred Term Benefit:


     In the event of death during the term of this benefit, the beneficiary would receive
an additional death benefit amount, which is over and above the sum assured. The
maximum amount of benefit you can avail is equal to the basic sum assured. Where the
Term Benefit cover applied for is more than Rs.10 lakhs, better rates may apply.



 Accidental Death Benefit:


   This benefit provides an additional amount (over and above the sum assured) to the
   beneficiary in the event accidental death of the life insured. The maximum cover
   available under this benefit is equal to the basic sum assured (subject to a maximum
   of Rs.10 lacs).



 Critical Illness Benefit:


   This benefit can be added to the basic life insurance plan to provide financial support
   in the event of medical emergencies. On the first occurrence of critical illness during
   the term of the plan, you would receive a portion of the sum assured to reduce your
   financial burden in this emergency. The maximum Critical Illness Benefit that you
   can avail of is equal to half the basic sum assured (subject to a maximum of Rs.20
   lacks).


                                           16
 Life Guardian Benefit:


   In case of the unfortunate death of the proposer, this benefit keeps the policy alive
   by waiving all future premiums on the policy.



 Accidental Disability Guardian Benefit:


   In case the proposer is permanently disabled as a result of accident, this benefit
   keeps the policy alive by waiving all future premiums on the policy.




                                          17
           COMPARISON BETWEEN VARIOUS POLICIES:




      POLICIES            KSAP                           KSIP               HEADSTART
FEATURES

ENTRY AGE         MIN: 0 Years               MIN:0Years                 MIN:18 Years

                  MAX:65Years                MAX:65Years                MAX:60Years




                  MIN:18Years                MAX:75Years                MIN:18Years

MATURITY AGE      MAX:75Years                                           MAX:70Years




                  REGULAR:10/15              MIN: 10Years or 18 minus   Min: Greater of (10 Yrs
                                             age at entry for minors;   or 18 less child’s
                  /20/25Years                whichever                  present age)
                  FOR MINOR: 10Years
                                             Is higher                  Max: 25 Yrs.
                  or 18 less entry age at
POLICY TERMS      last birthday              MAX: 30Years
                  whichever is higher.




                  REGULAR PPT: Rs.15,        REGULAR:                   REGULAR PPT: Rs.15,
                  000 p.a.                                              000 p.a.
MINIMUM PREMIUM                              Rs.18, 000 p.a.
                  LIMITED PPT:                                          LIMITED PPT:
                                             LIMITED PPT:
                  Rs 36,000p.a.                                         Rs 25,000 p.a



                                            18
                                                Rs 50,000 p.a.       for 4-10 Yrs

                                                                     Rs 50,000 p.a.

                                                                     for 3 Yrs




                    MIN: 0.5 X            HIGH COVER: Policy term x MIN: 0.5 X
                                          annual premium
BASIC SUM ASSURED   (Policy term x annual                           (Policy term x annual
                    premium.)             LOW COVER:                premium.)

                    MAX: Any multiple of Greater    of(5x  annual MAX: Any multiple of
                    premium, subject to premium,0.5xpolicy term x premium, subject to
                    underwriting         annual premiums )        underwriting




                    Critical Illness Benefit                         Critical Illness Benefit



                    Permanent Disability                             Permanent Disability
                    Benefit                                          Benefit
RIDERS
                                                NO RIDERS BENEFITS
BENEFITS
                    Accidental Disability                            Accidental Disability
                    Guardian Benefit:                                Guardian Benefit:
                    Premiums waiver                                  Premiums waiver
                    protection on                                    protection on disability.
                    disability.


                                                                     Accidental Death
                    Accidental Death                                 Benefit
                    Benefit



                    Preferred Term



                                               19
Benefit



Life Guardian Benefit




                        20
             USP OF THE VARIOUS PLANS




      PLAN         KSAP                      KSIP               HEADSTART

             Upto 275 % return Guaranteed           Maturity Triple Death Benefit &
             on     first     year Value for all type of Dynamic Floor fund.
       USP   premium at maturity investors.
             & assured bonuses.




                  COMPARISON OF CHARGES:



POLICIES
                            KSAP                       KSIP            HEADSTART



                                        21
CHARGES


                 Years    <36000     >=36000            Years     charges   Years    Allocation

                                                                                     (15k to 25k)

PREMIUM
                 2-5      2%         Nil                1         14%       1        68%
ALLOCATION
CHARGES          6-10     1%         Nil                >2        3.5%      2        86%

                 11+      Nil        Nil                                    3        93%

                                                                            4-10     99%

                                                                            >11      100%




POLICY           Rs.65p.m. at commencement of           =<Rs.20000 -7%      <Rs100000: flat fee of
ADMINISTRATION   the policy, inflating by 5%p.a.                            Rs.75 p.m. in year 1and
CHARGES                                                 >20000-3.5%         Rs 40 p.m. in year2
                                                                            onwards.

                                                                            >Rs.100000: No
                                                                            charges




                                                   22
                  Dynamic bond fund - 1.2%           Guaranteed/dynam        0.6%   Dynamic         0.6%
                                                     ic money market                money market
                  Dynamic floor fund- 1.75%          fund                           fund
                  Opportunities fund- 2%

FUND MANAGEMENT                                      Guaranteed/dynam        1%     Dynamic gilt    1%
CHARGES                                              ic gilt fund                   fund



                                                     Guaranteed/dynam        1.2%   Dynamic bond    1.2%
                                                     ic bond fund                   fund



                                                     Guaranteed/dynam               Dynamic
                                                     ic floating rate fund   1.2%   floating rate   1.2%
                                                                                    fund


                                                     Guaranteed/dynam
                                                     ic balanced fund               Dynamic
                                                                             1.3%                   1.3%
                                                                                    balanced fund


                                                     Guaranteed/dynam
                                                     ic growth fund                 Dynamic
                                                                             1.5%   growth fund     1.5%

                                                     Aggressive growth
                                                     fund                           Aggressive
                                                                                    growth fund
                                                                             1.6%                   1.6%




                  First four switches in a year are First four switches in a year First four switches in a
                  free.                             are free.                     year are free.
SWITCHING
CHARGES           Rs. 500 will be charged for every Rs. 500 will be charged for Rs. 500 will be charged
                  additional switch.                every additional switch.    for every additional



                                                23
                                                                                switch.




               No mortality charges in 1st year.
               From year 2nd onwards, the cost
               of life cover & will be levied by Thus is the cost of life       Thus is the cost of life

MORTALITY      cancellation of units on a cover & will be levied by             cover & will be levied
                                                 cancellation of units on a     by cancellation of units
CHARGES        monthly basis.
                                                 monthly basis.                 on a monthly basis.



               Age
                            25
               (Yrs)               35     45     55

               Mortality
               charges      1.54   1.83   3.57   9.04

               (Per ’000)




               Partial withdrawal not allowed in Partial withdrawal not         Partial withdrawal not
               the first 3 years. From year 4th allowed in the first 3 years.   allowed in the first 3
               onwards, a part of the fund value                                years. Subsequently,
               can be withdrawn.                 Subsequently, (7-N) % is
    PARTIAL                                      charged      on         each   (7-N) % is charged on
  WITHDRAWAL   No other expense charges for withdrawal, where N is the          each withdrawal, where
    CHARGES    the 1st two withdrawals in the no. of year.                      N is the no. of year.
               policy year. Additional expense
               of

               Rs. 500 per withdrawal for
               subsequent withdrawals.




                                                  24
                             COMPARISON OF PLANS

CHILDREN PLANS


    Children plan are those plans which are launched targeting young couples and who have a
    lot of dreams for their children, but may be their income will not allow them to fulfill their
    dreams after years down the line when their children actually want a adequate of lump sum
    with them for the purpose of higher education, professional qualification etc. As life is
    uncertain, these plans are launched keeping in mind that, whether parents will be their or
    not, children can fulfill their dreams.




    Some of these plans are

             a. Headstart future protect(Kotak Mahindra OM)
             b. Smart kid(ICICI prudential)
             c. Children’s Dream plan(Birla Sun Life)
             d. Child Gain( Bajaj Allianz)
Assumptions while comparing children plans provided by various Insurers-

1. Growth rate is expected to be 20% through out the policy.
2. Other charges are considered with fund management charges and expected to be
   approximately equal.
3. Annual Premium is considered to be same for a better comparison, except Kotak OM and
   ICICI Pru, because these companies are charging different allocation charges for different
   levels.
4. All companies are assumed to be equally proficient; they can offer same levels of returns.
5. Fund management charges charged by various companies are different, but for a better
   comparison we are charging same level of charges. In long term fund management can
   make a lot of difference in returns, but it is not feasible from a customer’s point of view,
   because he may not be able to compare all the plans in the best way.



                                               25
26
From the above table, we can assume that Birla Sun life is providing maximum
returns, but in the case of demise of proposer Kotak OM is the most beneficiary for
family of proposer.




FAMILY PLANs


These plans are more focused on future protection and savings. As these plans are
very different from children plans, because children plans are considered to be long
term plans or most of the times considered for a fixed time period and some of the
condition make it safe for Insurance companies to make it minimum exit period, but
on the other hand Family Plans are more transaction based plans.

Charges are more in case of family plans, in comparison to children plans. So it
becomes more difficult for any Investor to decide which policy can give him
maximum benefits.



While comparing Family plans we are considering these charges as a base of
comparison –

         I.     Allocation charges
         II.    Fund management charges
         III.   Policy administration charges
         IV.    Death benefits
         V.     Growth rate-30%p.a.
         VI.    Charges as fund management charges and mortality charges
         VII.   Policy administration are considered as a part of allocation charges
                and adjusted as a part of allocation charges only.




                                        27
28
                                    SURVEYS

     SURVEY 1
 In order to understand the behavior of customers towards ULIP’s and to determine the
various factors which a consumer actually takes into account while buying a ULIP, a
survey was done.

          We prepared a questionnaire consisiting of 13 factors which plays an important
role in choosing a ULIP and asked the respondents to rate these factors on a scale of 1
to 5(1 being least important & 5 being most important). This questionnaire was not
specific to any particular company and aimed at determining the most important factors
from the consumer point of view. With the help of data thus obtained, a complete
analysis was done and results were obtained.

Sample Size:

The sample size of the survey was 100. The respondents were ensured complete
confidentiality of their opinion and view.

Sample Population:

Our sample population belonged to all the sections of the society i.e. higher income
group, middle income group and lower income group. As a result of this, the data thus
obtained was not confined to a particular section of the society and represented the
view and opinion of all the classes of society in large.




                                          29
                              ANALYSIS OF SURVEY 1


     On the basis of the datas obtained, statistical methods were employed to
determine the most important factors of the 13 factors which are most important from a
consumer point of view before going for a ULIP.



                    FACTORS

QUESTIONNAIRE No.      1        2   3   4        5   6   7   8   9    10    11   12      13

         1             4        3   5   3        5   3   3   3   4    2     4     3      5

         2             5        4   3   3        2   1   3   5   5    5     3     4      5

         3             5        4   5   4        4   3   4   5   4    4     4     5      4

         4             5        4   1   5        5   5   3   4   5    5     4     3      4

         5             5        5   5   3        5   3   4   4   3    4     3     1      5

         6             5        4   2   3        5   1   4   5   5    5     4     4      5

         7             4        5   4   5        5   1   3   4   2    1     1     4      4

         8             1        5   3   2        5   4   3   5   2    4     3     5      4

         9             5        5   2   2        5   5   5   5   4    5     1     2      4

         10            4        5   4   5        5   1   3   4   3    1     1     2      4

         11            5        5   5   4        2   1   5   5   5    5     1     5      5

         12            5        5   5   5        1   1   5   5   5    5     5     5      5

         13            5        5   5   5        1   1   5   5   5    5     1     5      5

         14            4        2   1   2        3   1   1   2   1    4     3     5      2

         15            5        4   2   3        5   1   4   5   5    5     4     4      5

         16            5        4   3   3        5   3   3   3   3    5     4     3      4

         17            5        3   1   2        5   1   3   5   5    5     3     3      5

         18            5        5   3   5        5   2   3   5   3    2     3     3      4




                                            30
19   5   4   4   5        5   3   4   5   5   4   5   4   5

20   5   4   4   5        5   2   4   4   5   5   5   4   4

21   5   4   3   3        5   2   4   4   3   4   3   4   3

22   5   4   4   5        5   2   4   5   5   5   4   5   4

23   5   4   4   5        5   2   4   5   5   5   4   5   4

24   5   4   4   5        5   2   5   5   5   4   5   4   4

25   5   2   2   5        5   1   5   5   5   5   2   2   5

26   5   5   5   5        5   2   5   5   3   3   2   3   5

27   5   5   1   5        5   1   5   5   1   5   1   3   5

28   5   1   3   5        3   1   3   5   5   5   3   3   5

29   5   4   4   4        3   5   3   5   5   4   4   4   4

30   5   4   3   4        2   4   4   5   4   1   3   4   4

31   3   4   4   5        5   3   3   4   3   4   3   4   3

32   5   4   5   4        5   3   4   4   5   4   3   4   4

33   5   4   1   3        4   2   4   5   4   5   2   5   3

34   3   4   4   3        4   3   4   3   3   4   3   3   3

35   5   5   4   4        5   4   5   5   4   5   5   4   4

36   5   4   4   5        5   3   4   5   5   4   5   4   5

37   5   4   1   5        5   5   5   5   5   5   1   1   5

38   5   4   1   5        5   5   5   5   4   3   1   1   4

39   4   4   5   4        5   3   2   4   4   2   1   4   4

40   5   5   5   5        4   3   3   5   4   3   3   4   4

41   4   3   3   5        5   1   4   5   4   5   3   5   3

42   5   3   3   5        5   2   4   3   4   5   5   4   5

43   5   5   1   5        5   1   5   5   5   3   3   5   5

44   5   4   2   3        5   1   4   5   5   4   4   3   4

45   5   4   1   3        5   1   4   5   5   4   4   3   4

46   4   4   3   3        4   1   4   3   4   3   1   4   4

47   4   4   2   3        3   1   4   4   3   2   3   3   5

48   5   5   3   4        5   1   5   5   4   4   4   4   4




                     31
49   5   5   1   3        4   1   5   5   3   5   5   3   4

50   5   4   4   5        5   2   5   5   4   5   5   2   5

51   5   4   3   4        4   3   4   5   3   3   3   5   5

52   5   4   2   3        4   1   5   5   4   4   3   3   5

53   5   1   4   2        3   2   3   5   4   3   2   4   5

54   5   4   1   3        4   1   3   4   4   5   1   5   5

55   5   5   5   4        5   3   5   4   4   5   4   3   3

56   5   4   3   4        5   2   5   5   2   4   2   4   4

57   5   4   3   4        5   3   5   5   3   5   3   2   5

58   5   4   3   4        5   1   4   3   4   5   2   3   5

59   4   4   3   3        5   3   4   4   3   4   1   4   4

60   5   5   3   4        5   2   4   4   5   3   2   4   5

61   4   3   2   2        4   2   4   5   3   3   3   4   5

62   5   5   2   3        3   2   5   5   4   4   5   4   5

63   5   4   4   4        4   2   4   5   3   2   4   4   5

64   5   4   1   3        4   2   3   5   4   4   2   4   4

65   5   4   3   4        5   1   2   5   4   3   3   5   4

66   5   4   4   4        4   1   4   5   5   5   4   3   4

67   5   4   5   3        5   2   5   5   5   2   4   3   5

68   5   4   2   4        4   2   4   5   4   2   3   4   5

69   5   5   4   5        5   5   5   5   3   5   3   2   5

70   5   5   3   3        3   2   3   5   4   3   4   4   5

71   5   5   4   3        4   3   4   5   3   4   2   4   5

72   5   5   3   4        5   1   2   4   5   5   5   3   5

73   4   4   2   3        3   1   2   4   4   2   1   5   5

74   4   5   4   5        5   3   5   3   4   5   1   2   5

75   5   4   5   4        5   4   5   5   4   4   2   3   3

76   4   5   2   3        4   2   4   4   4   3   2   4   4

77   5   4   4   4        4   1   4   3   4   4   3   4   3

78   4   4   2   2        3   1   4   5   4   2   1   3   4




                     32
  79       5      5      3      4           5      2      5      4      4      4      4      5      5

  80       5      4      3      3           4      1      3      5      4      3      3      4      5

  81       5      4      3      4           4      3      4      5      4      4      3      4      5

  82       5      4      1      3           3      2      3      5      5      5      2      3      4

  83       5      4      4      3           4      2      4      5      5      5      4      4      3

  84       4      4      3      2           3      1      2      3      4      4      1      4      4

  85       5      4      3      4           5      1      4      5      3      3      2      4      4

  86       5      5      3      3           4      3      5      4      4      4      3      4      4

  87       5      3      2      3           3      2      3      5      5      3      3      4      4

  88       5      4      3      2           3      3      3      5      4      4      4      3      4

  89       5      5      4      5           5      1      4      5      3      5      5      3      4

  90       4      4      3      2           3      2      2      5      3      2      1      2      5

  91       5      4      3      3           2      1      2      5      3      4      2      5      4

  92       5      4      3      4           5      1      5      4      4      4      2      4      5

  93       5      5      2      3           5      3      5      5      4      5      3      4      4

  94       5      3      4      2           4      2      5      3      4      3      3      2      3

  95       4      5      5      4           5      4      4      5      5      4      4      3      5

  96       5      5      4      3           4      3      3      3      4      3      3      2      4

  97       4      4      3      4           4      2      4      4      4      4      1      5      4

  98       5      4      2      3           3      2      4      4      3      2      3      3      4

  99       5      4      2      4           4      1      3      3      5      1      1      4      5

  100      5      5      2      4           5      1      4      5      4      4      2      4      5




 SUM      474    415    308    372         425    212    389    451    397    384    291    363    434




AVERAGE   4.74   4.15   3.08   3.72        4.25   2.12   3.89   4.51   3.97   3.84   2.91   3.63   4.34




MEDIAN     5      4      3      3           5      2      4      5      4      4      3      4      4




 MODE      5      4      3      3           5      1      4      5      4      5      3      4      5




                                      33
  S. D.    0.5966235   0.796   1.228   0.986    0.99   1.16   0.94   0.75   0.915   1.143   1.272   0.991   0.699




VARIANCE   0.3559596   0.634   1.509   0.971    0.98   1.34   0.89   0.56   0.837   1.307   1.618   0.983   0.489




                                           34
On the basis of survey done, the following results were obtained:



The 5 most important factors while buying an insurance plan especially ULIP’s are as
follows:




                                 AVER-    MEDI-   MODE        S.D.   VARIANCE
Sr. FACTOR                        AGE      AN
No.

1
      Return On Investment        4.74      5        5     0.59662   0.3559596

      Financial Health
2
      (Company)                   4.51      5        5     0.74529    0.55545

      Comparison with
3
      Financial Products          4.34      4        5     0.69949    0.48929


4
      Tax Saving                  4.25      5        5     0.98857    0.97727


5
      Policy Features             4.15      4        4     0.79614    0.63384




                                           35
            CONCLUSIONS FROM SURVEY 1

 Returns on Investment & Financial Health of the company are the 2 most
  important factors while buying an INSURANCE PLAN.

 Return on Investment gets an average of 4.74 (on a scale of 5) with both median
  & mode being 5. S.D & Variance are 0.56 & 0.36 respectively which are quite
  less & shows high degree of similarity in the views of the people surveyed, on the
  importance of this factor.



 Financial Health of the company gets an average of 4.51 (on a scale of 5) with
  both mean & median being 5. S.D & Variance are 0.75 & 0.56 respectively which
  also show quite a high degree of similarity in the views but comparatively lesser
  than RETURN ON INVESTMENT Factor.

 Comparison with Financial Products, Tax Saving & Policy Features are also very
  important factors & plays a very important role in the purchase of an Insurance
  Policy.



 The above 5 factors are the most important ones which affect the purchase of an
  Insurance Policy.

 An Insurance company needs to pay a lot of attention on these factors before
  developing a policy as they play utmost importance in the purchase of an
  Insurance Policy




                                       36
SURVEY 2
  In order to understand the market potential of ULIPs in the NCR region, we prepared a
questionnaire asking demographic questions such as name age, sex, occupation etc.
This questionnaire was not specific to any particular company and aimed at determining
if

    There is any relation between age and preference for ulips
    Income and preference for ulips
    Occupation and income for ulips

 . With the help of data thus obtained, a complete analysis was done and results were
obtained.

Sample Size:

The sample size of the survey was 280. The respondents were ensured complete
confidentiality of their opinion and view.

Sample Population:

Our sample population belonged to the NCR region namely Delhi, Gurgaon,Noida and
Greater Noida.




                                          37
                         MARKET PROFILE-DELHI

BRIEF DEMOGRAPHY OF THE CITY

                 PARAMETERS                     UNIT     DESCRIPTION

                  Population               Lac./Crores    15,412,000

                      Area                      Sq km     1,483 sq km 2


                 Literacy Rate                   %         81.82 %

             Literacy Rate - Male                %          83.63%

            Literacy Rate - Female               %          60.28%




General Characteristics of the Markets
   Delhi is a densely populated medium sized city
   Has a good youth population by virtue of the presence of several industries and
     other offices.
   But there are only a few mid-sized markets and only few potential outlets
   The markets are modern and developed.
   There is sufficient awareness among consumers regarding new innovations in
     the field of commerce and industry.
   Purchasing power of the territory is also good
   The markets are small but moderately good.




                                           38
                        MARKET PROFILE-GURGAON

BRIEF DEMOGRAPHY OF THE CITY


                 PARAMETERS                     UNIT        DESCRIPTION

          Geographical Area            Sq. Km.             220

          Population                   Lac.& Crore         5,73,542

          Population Density           Per Sq. Km.         331

                                                           77 % Population
          Literacy Rate                %
                                                           Literate.




General Characteristics of the Markets



  Gurgaon is a huge market in terms of size and has around 25 market places

   Few markets are pro middle class and few exclusively cater to the elite class

   This city is an ideal combination of traditional culture and modernization

   It has got a high purchasing power

   Youth and old age person are found more in this city.

   Mostly all the call centres of big MNCs are in this city.




                                           39
                           MARKET PROFILE-NOIDA

BRIEF DEMOGRAPHY OF THE CITY


                PARAMETERS                    UNIT        DESCRIPTION

                  Population             Lac./Crores             293,908

                     Area                     Sq km            203.16sq km 2


                Literacy Rate                  %                  68 %

             Literacy Rate - Male              %                  74%

            Literacy Rate - Female             %                  61%




General Characteristics of the Markets


   The city makes for a good market place but the mostly there are small, crowded,
     traditional markets
   There are many offices and many of the persons are working in these offices so
     this city has good potential for the product placement.
   The persons here are much aware about the ULIPs than any other city.
   But there are only a few mid-sized markets
   The city and its consumers are growing up because of the growing industry.




                                         40
                  MARKET PROFILE-GREATER NOIDA

BRIEF DEMOGRAPHY OF THE CITY


                PARAMETERS                    UNIT        DESCRIPTION

                  Population             Lac./Crores            1,73,542

                     Area                     Sq km            173.16sq km 2


                Literacy Rate                  %                  68 %

             Literacy Rate - Male              %                  74%

            Literacy Rate - Female             %                  61%




General Characteristics of the Markets

   There are many offices and many of the persons are working in these offices so

     this city has good potential for the product placement.

   The persons here are much aware about the ULIPs than any other city.

   But there are only a few mid-sized markets

   The city and its consumers are growing up because of the growing industry.




                                         41
ANALYSIS AND CONCLUSIONS OF SURVEY 2


ESTIMATION OF MARKET POTENTIAL USING Z-TEST

In order to estimate the population proportion who were interested in ULIP I am using
Z-test and during this I have taken a confidence level of 95% to determine the
population proportion. I have taken an assumption in this also because it was very
difficult for me to take the original data from the new census report i.e. many of the
income information is included in that report and also the population proportion which I
am calculating is for the whole of population but our sample starts from 20 years so
these calculations are according to whole population.

P = Population Proportion
p^= Sample Proportion=%age who are interested
q^= (1-p^)
n= Size of Sample
Confidence Level =95%
Z at 95% = 1.96

By Using the Formula for Z-Test i.e.

                                                    p^ q^
                                  P = p^ ± Z
                                                      n

                                        DELHI

p^ =%age who are interested =60/70=8
q^ = 15
Z= 1.96

              85  15
P = 85 ±1.96
                70
P=85±1.96 x 4.26
P=85±8.37

P= {76.63%, 93.37 %}

Therefore ULIP can be found popular among 76.63 % to 93.37% of population above
21 years of age and above 2 lacs income group in Delhi


                                               42
                                   GURGAON

p^ =%age who are interested = 55/70=78
q^ = 22
Z= 1.96

               78  22
P = 78 ±1.96
                 70

P=78±1.96 x 4.95
P=78±9.70
P= {68.30 %, 87.70%}

Therefore ULIP can be found popular among 68.30 %to 87.70%of population above 21
years of age and above 2 lacs income group in Gurgaon.




                                      NOIDA

p^ =%age who are interested = 52/70=74
q^ = 26
Z= 1.96

               74  26
P = 74 ±1.96
                 70

P=74±1.96 x 5.24
P=74±10.27
P= {63.63 %, 84.27%}

Therefore the market potential for the region of Noida ranges from 63.63 %, to 84.27%




                                         43
                              GREATER NOIDA

p^ = 80
q^ = 20
Z= 1.96

               80  20
P = 80 ±1.96
                 70

P=80±1.96 x 4.78
P=80±9.37
P= {70.63 %, 89.37%}

Therefore ULIP can be found popular among 70.63% to 89.37% of population above 21
years of age and above 2 lacs income group in Greater Noida.




                                       44
ESTIMATION OF MARKET POTENTIAL USING CHI-SQUARE TEST

We have segregated the NCR region into four parts namely; Noida, Gurgaon, Greater
Noida and Delhi respectively. The table below represents the response of the people in
the various regions.


Sample response concerning ULIP preference:



                  Noida       Gurgaon           Greater      Delhi          Total
                                                 Noida
Number who
  prefer to         52           55               56          60             223
 have ULIP
Number who
   do not           18           15               14          10              57
  prefer to
 have ULIP
    Total
  number            70           70               70          70             280
 sampled in
each region


Suppose we find out the proportion of people who prefer to have ULIP:
Pn  Proportion in Noida who prefer ULIP
Pg  Proportion in Gurgaon who prefer ULIP
Pu  Proportion in Greater Noida who prefer ULIP
Pd  Proportion in Delhi who prefer ULIP


Let:
Ho: Pn= Pg=Pu=Pd  Null hypothesis
H1: Pn, Pg, Pu and Pd are not all equal  Alternate Hypothesis
Combined proportion who prefer ULIP = 223/280 = 0.8

                                           45
Proportion of people who are interested in ULIP in each of the four regions:

                        Noida        Gurgaon        Greater         Delhi
                                                    Noida
   Total number
      sampled             70            70            70             70
     Estimated
  proportion who
    prefer ULIP           0.8          0.8            0.8            0.8
 Number expected
   to have ULIP
                          56            56            56             56

   Total number
      sampled             70            70            70             70
     Estimated
  proportion not
  preferring ULIP         0.2          0.2            0.2            0.2
 Number expected
  not to buy ULIP
                          14            14            14             14




                                      46
Comparison of expected and observed frequencies of Sampled Data:

                      Noida       Gurgaon        Greater Noida        Delhi
   Frequency
 preferring to
invest in ULIP
   Observed            52              55              56              60
  Frequency
    Expected           56              56              56              56
  Frequency
   Frequency
preferring not
  to invest in
      ULIP
   Observed            18              15              14              10
  Frequency
    Expected           14              14              14              14
  Frequency



The Chi-Square Statistic:

fo               fe            fo-fe             (fo-fe)^2       (fo-fe)^2)/fe

     52                56              -4              16             0.28
     55                56              -1              1              0.01
     56                56               0              0               0
     60                56               4              16             0.28
     18                14               4              16             1.14
     15                14               1              1              0.07
     14                14               0              0               0
     10                14              -4              16             1.14

                                   Total= 2.92

As the value at 3 degrees of freedom and 95% confidence interval is 0.352 which is
much less than the calculated value that is 2.92.
Thus, our Null hypothesis is rejected that is the proportion of people interested in
investing in ULIP is not the same for all the four regions.


Dependence of Age and Preference:

                                            47
If we try to find out that if there is any relation between age and preference for ULIP, we find
the tabulated data as follows:


Crosstabs:

Null Hypothesis: There is no association between age and preference of ULIP.

Alternative Hypothesis: There is association between age and preference of ULIP.



                                 Case Processing Summary



                       Valid                Missing                     Total

                         N       Percent       N         Percent          N         Percent

 Age * Preference       280      100.0%        0           .0%           280        100.0%



Age group categories are:-




a) 21-30 yrs

b) 31-40 yrs

c) 41-50 yrs

d) >50 yrs




                                              48
                        Age * Preference Cross tabulation Count



                                            Yes/no                                Total

                                              Yes                No

  >50/21-30/31-40/41-50       21-30           102                25                127

                               31-40          59                 18                77

                               41-40          27                 14                41

                               >50            34                  1                35

            Total                             222                58                280



In the above table we are studying the cross tabulations between age and preference either to
go for ULIP or not.



Chi-Square Tests


Suppose we find out the proportion of people who prefer to have ULIP:
Pa  Proportion in age group 21-30 who prefer ULIP
Pb  Proportion in age group 31-40 who prefer ULIP
Pc  Proportion in age group 41-50 who prefer ULIP
Pe  Proportion in age group >50 who prefer ULIP
Total proportion of interested people = 224/280= 0.8




     Age group                21-30           31-40             41-50             >50
    Total number
      sampled                  127                 77             41                35
Estimated proportion
  who prefer ULIP
                               0.8              0.8              0.8                0.8




                                              49
Number expected to
   have ULIP
                           102                     62               33               28

    Total number
      sampled              127                     77               41               35
Estimated proportion
 not preferring ULIP
                           0.2                 0.2                  0.2              0.2
Number expected not
   to buy ULIP
                            25            15                        8                7




Fo             Fe                fo-fe                  (fo-fe)^2         (fo-fe)^2)/fe

     102             102                  0                  0                 0
      59             62                  -3                  9                0.14
      27             33                  -6                  36               1.09
      34             28                   6                  36               1.28
      25             25                   0                  0                 0
      18             15                   3                  9                0.6
      14             8                    6                  36               4.5
      7               7                   0                  0                 0

Chi cal = 7.61
As the value at 3 degrees of freedom and 95% confidence interval is 0.352 which is
much less than the calculated value that is 7.61.
Thus, our Null hypothesis is rejected and we can conclude that the preference of
investment in ULIP and age group are not independent.




                                              50
Dependence of Income and Preference:


If we try to find out that if there is any relation between income and preference to invest in
ULIP, we find the tabulated data as follows:



Crosstabs


Null Hypothesis: There is no association between income and preference.

Alternative Hypothesis: There is association between income and preference.



                            Valid                  Missing                        Total

                              N        Percent         N           Percent         N      Percent

 Income * Preference        276        98.6%           4            1.4%          280     100.0%



                       Income* Preference Cross tabulation Count



                                                           Yes/No                         Total

                                                             Yes             No

Upto 2 Lacs/2-5 Lacs/5-7 Lacs/7-10 Lacs Upto 2 Lacs          55              10            65

                                           2-5 Lacs          97              22           119

                                           5-7 Lacs          47              12            59

                                           7-10 Lacs         17              8             25

                                           > 10 lacs         6               2             8

                  Total                                      223             53           276


                                             51
                                  Chi-Square Tests

Suppose we find out the proportion of people who prefer to have ULIP:
Pa  Proportion in income group (upto 2 lacs) who prefer ULIP
Pb  Proportion in income group (2-5 lacs) who prefer ULIP
Pg  Proportion in income group (5-7 lacs) who prefer ULIP
Pc  Proportion in income group (7-10 lacs) who prefer ULIP
Pe  Proportion in income group (>10 lacs) who prefer ULIP

Total proportion of interested people = 223/276= 0.8


Income group           Upto 2      2-5 lacs     5-7 lacs      7-10 lacs   Above 10
                        lacs                                              lacs
  Total number
     sampled             65          119           59           25            8
    Estimated
 proportion who
   prefer ULIP          0.8          0.8          0.8           0.8          0.8
Number expected
  to have ULIP
                         52          95            47           20            6

  Total number
     sampled             65          119           59           25            8
    Estimated
 proportion not
 preferring ULIP        0.2          0.2          0.2           0.2          0.2
Number expected
 not to buy ULIP
                         13        23              12            5            2




                                           52
Fo              fe             fo-fe             (fo-fe)^2    (fo-fe)^2)/fe

     55              52                 3               9          .173
     97              95                 2               4          0.04
     47              47                 0               0          0
     17              20                -3               9          0.52
     6                6                 0               0            0
     10              13                -3               9          0.69
     22              23                -1               1          .043
     12               12                0               0            0
     8                5                 3               9           1.8
     2                2                 0               0            0


Chi cal =3.26


As the value at 4 degrees of freedom and 95% confidence interval is 0.711 which is
much less than the calculated value that is 3.26.
Thus, our Null hypothesis is rejected and we can conclude that the preference of
investment in ULIP and income level of the customers is not independent.




                                            53
Dependence of Occupation and Preference:


If we try to find out that if there is any relation between occupation and preference to invest in
ULIP, we find the tabulated data as follows:



Crosstabs


Null Hypothesis: There is no association between occupation and preference.

Alternative Hypothesis: There is association between occupation and preference.



                                  Valid                 Missing                    Total

                                    N        Percent         N      Percent         N      Percent

   Occupation* Preference          280       100.0%          0          .0%        280     100.0%



                     Occupation* Preference Crosstabulation Count

                                                                 Yes/No                    Total

                                                                  Yes         No

      Govt Service/Student/Others/Pvt          Govt Service       24          4             28
             Service/Business

                                                 Student          13          1             14

                                                  Others          24          6             30

                                               Pvt Service        107         39           143

                                                 Business         56          9             65

                    Total                                         224         56           280



                                               54
In the above tables we have shown crosstabs between occupation and preference


We have taken the categories of

 a)   Government service
 b)   Private Service
 c)   Student
 d)   business
 e)   others
                                     Chi-Square Tests

Suppose we find out the proportion of people who prefer to have ULIP:
Pa  Proportion in occupation group (Govt service) who prefer ULIP
Pb  Proportion in occupation group (private service) who prefer ULIP
Pg  Proportion in occupation group (student) who prefer ULIP
Pc  Proportion in occupation group (business) who prefer ULIP
Pe  Proportion in occupation group (others) who prefer ULIP

Total proportion of interested people = 224/280= 0.8


      Occupation            Govt      Private        Student   Business   Others
                           service    service
  Total number
     sampled                 28           14           30        143        65
    Estimated
 proportion who
   prefer ULIP              0.8           0.8         0.8        0.8       0.8
Number expected
  to have ULIP
                             22           11           24        114        52

  Total number
     sampled                 28           14           30       143         65
    Estimated
 proportion not
 preferring ULIP            0.2           0.2         0.2        0.2       0.2
Number expected
 not to buy ULIP
                             6        3                 6        29         13


                                                55
Fo               fe            fo-fe             (fo-fe)^2    (fo-fe)^2)/fe

     24               22                2              4           .18
     13               11                2              4           .36
     24               24                0              0              0
     107              114              -7              49           .42
     56               52                4              16          .30
      4                6               -2              4           .67
      1                 3              -2              4           1.3
      6                6                0              0             0
     39                29               0              0             0
      9                13              -4              16          1.23


Chi cal = 4.46


As the value at 4 degrees of freedom and 95% confidence interval is 0.711 which is
much less than the calculated value that is 4.46.
Thus, our Null hypothesis is rejected and we can conclude that the preference of
investment in ULIP and occupation of the customers are not independent.


HENCE, WE GET AN OVERVIEW THAT THE PREFERENCE OF
INVESTMENT DIFFERS AND IS SIGNIFICANTLY DEPENDENT ON
AGE-GROUP, INCOME, AND OCCUPATION OF THE CUSTOMERS.




                                            56
RECOMMENDATIONS

 1. Building trust by providing the customers with adequate knowledge about the
    company and then the product.


 2. The private players should try to establish Brand awareness and credibility
    especially among the senior customers so as to divert their interest from the clean
    sweep made by LIC and UTI.

 3. The companies should target more of female consumers as they have money to
    invest but are completely unaware about the options available to them and ULIP
    should be made to look more attractive to them.

 4. Adequate advertisement via appropriate media should be done by the various
    companies as is done in the case of mutual Funds.


 5. Customers are not aware about the ULIP being offered by their own banks.So,
    proper counters should be there to facilitate customer awareness.



 6. Certain discount charges should be made available because of the severe
    competition within the private players as well as the biggest threat posed by LIC
    and SBI.

 7. ULIP is a highly untapped market and here the right strategies and hitting the bulls
    eye by propagating the most sought after benefit among the customers will attract
    most of the customers.

 8. Every individual should be encouraged to do insurance planning. Life Insurance
    cover should be taken when young and the person is able to service the
    premiums. The amount of coverage depends on the requirements.




                                          57
KOTAK AGGRESSIVE GROWTH FUND




             58
KOTAK DYNAMIC FLOOR FUND




           59
KOTAK DYNAMIC GROWTH FUND




           60
KOTAK GUARANTEED GROWTH FUND




             61
 KOTAK DYNAMIC BOND FUND




KOTAK GUARANTEED BOND FUND




            62
              QUESTIONNAIRE ON ULIP (Unit Linked Insurance Plan)




                                                                Questionnaire No.


Sir/Madam,


    This research project is a part of our curriculum. This is a general study of
Insurance Plans especially ULIP & thus we seek to know only your general views about
insurance companies. This is not specific to any particular company.


Please grade the following questions on the given 1 to 5 scale.
Features preferred during purchase of ULIP.
                (1 – Not required at all; 5 – Very essential)


Please rate the factors in the empty cells.




Sr.     Factors
No.

1       Return on Investment
                                                                      1   2   3   4   5

2       Policy Features
                                                                      1   2   3   4   5

3       Investment Risk
                                                                      1   2   3   4   5

4       Length of Investment
                                                                      1   2   3   4   5

5       Tax Savings
                                                                      1   2   3   4   5


                                              63
6       Forced Savings
                                                                1   2   3   4   5

7       Brand Equity of the company
                                                                1   2   3   4   5

8       Financial Health (Company)
                                                                1   2   3   4   5

9       Core competency of the company in that sector.
                                                                1   2   3   4   5

10      Interpersonal Skills (Sales Staff)
                                                                1   2   3   4   5

11      Influence of Relatives/Friends in investment decision
        making                                                  1   2   3   4   5

12      Post Sales Services support.
                                                                1   2   3   4   5

13      Comparison with other Financial product (eg. Mutual
        Funds)                                                  1   2   3   4   5


When you think of investment in Insurance, which company name immediately
creeps in your mind? Rank in the order of preference.



           Sr. No.        Company                               Rank*

           1              HDFC Life Insurance

           2              ICICI Prudential

           3              KOTAK Life Insurance

           4              LIC

           5              OTHERS




(*: From 1 to 5; 1 is most preferred & 5 is least preferred)




                                             64
     While investing in an insurance policy whether the company is local or
      multinational affects your decision & Why?




.
             Thank You for your cooperation & we assure you complete confidentiality
of the information you have so kindly, sincerely & patiently shared with us.




                                          65
                                       QUESTIONNAIRE



   We are conducting a survey on the Unit Linked Insurance Plan (ULIP). We request the
Respondents to provide their valuable views on the same by answering to this Questionnaire
.The information provided by you will be used solely for Academic purpose and to study the
present Market Potential of ULIP.



NAME:                                                       PLACE:

AGE:

a) 15-20 yrs                                                         b) 21-30 yrs

c) 31- 40 yrs                                                        d) 41-50 yrs

e) >50 yrs

GENDER:

a) Male                                                              b) Female

OCCUPATION:

a) Government Service                                                   b) Private Service

c) Business                                                           d) Student

e) Others

ANNUAL INCOME:

a) Up to 2lacs                                                          b) Between 2-5 lacs

c) 5-7 lacs                                                             d) 7-10 lacs

e) Above 10 lacs

1. Are you aware about Unit Linked Insurance Plan (ULIP)?

a) Yes                                                                b) No

2. Have you invested in the ULIP of any company; (i) if yes then please tick the following?




                                               66
a) ICICI Prudential life insurance                                b) HDFC Standard Life

c) Bajaj Allianz Life Insurance                                       d) Kotak Life Insurance

e) Any other (please specify)




(ii) If No, then would you like to invest in ULIP?

a) Yes                                                                 b) No

3. What is the reason for investment in the ULIP?

a) Child Education                                            b) Child Marriage

c) Pension                                                    d) Income Growth

e) Tax Rebate                                                 f) 2 in 1 benefits

4. What is your time horizon when investing in ULIP?

a) Up to 3 yrs                                                      b) Between 4-7 yrs

c) 7-10 yrs                                                         d) 10-15 yrs

e) Over 15 yrs

5. When investing in a ULIP, what would be your preference?

a) Low Risk, Low Gain                                         b) Moderate Risk, Moderate Gain

c) High Risk, High Gain                                d) No Risk




                                                 67
REFERENCES
Books:

   1. Churchill & Brown; Basic Marketing Research;Thomas Publications,5th edition
   2. Paul Hague, Nick Hague and Carol-Ann Morgan; Market Research in Practice; Kogan
      Page limited,1st South Asian edition 2004.
   3. Harper W.Boyd, Jr. Ralph Westfall, Stanley F. Stasch; Marketing Research; All India
      Traveller Book Seller, 7th edition.
   4. William O. Bearden, Richard G. Netemeyer, Mary F. Mobley; Handbook of Marketing
      Skills; SAGE Publications.
   5. “Malhotra Naresh (2002), Marketing Research”, Prentice Hall of India.
   6. “Kotler Philip(2004),Marketing Management”

Websites:



        www.kotakdirect.in
        http://www.thehindubusinessline.com/2005/07/04/stories/2005070401261200.htm
        www.wikipedia.org
        http://www.thehindubusinessline.com/2004/09/14/stories/2004091400100900.htm
        www.mouthshut.com
        www.financeindiamart.com
        www.businesstoday.com
        www.howstuffworks.com
        www.google.com
        www.icici.com
        www.kotak.com
        www.hdfcbank.com




Personnel:



   1     Mr. Dipanjan Hore
   2     Mr. Ajay Narang




                                             68
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