Perception and Expectation regarding insurance - IndiaStudyChannel by niusheng11


                 Project Study Report
                 Training Undertaken at
                     ICICI PRUDENTIAL
     “Perception and Expectation regarding
           Submitted in partial fulfillment for the
                      Award of degree of
               Master of Business Administration


SUBMITTED BY:                           Submitted To:
Anup . S. Daultani                     Dr.Mahima Birla
M.B.A Part 2


The satisfaction & joy that accompany the success of any work would be
incomplete unless we mention the name of people, whose constant
guidance and encouragement served a beacon and crowned my effect with
It gives me great pleasure to thank the persons who helped prepare this
report. This report is culmination of their insight, their knowledge or kind
attention that they have given me to shape this project report in this fashion.
Everything in this report is now is due to their thankless support,
encouragement and their complete cooperation.
First of all I would like to thank my Area Manager Mr. Santosh Dashwant
for allowing me to do this project.
Big thanks goes to my project guide Dr. Mahima Birla for her kind support
and understanding that she has given towards this project. She has often
taken out time from her extremely tight schedule to meet me and to support
to shape up this project report in this fashion.
My faculty & all staff member has supported me and given me valuable
inputs, without whose guidance, this project without doubt would have been
a cluttered report full of meaningless data. The organized manner in which
this report is presented is because of the interest they have shown and the
help and support, which they have extended to me all the way.
Last but not least big thanks to all respondents who agreed to be
interviewed for gathering all the information.


The main motive behind the live research project of the MBA program is to
provide the practical aspect of the organizations working environment. The
study is the out come of my project that has been produced as partial
fulfillment of the Masters of Business Administration from Pacific Institute of
Management, Udaipur.

This training has helped to visualize and realize about the congruency
between the theoretical learning in the college and the actual practices of
management. This overall project has given me an insight into the actual
corporate world apart from the theoretical environment. It has allowed me to
face the world full of ups and downs and to get a glance of the future
corporate world in which we are going to enter.

Today insurance is the buzz word for the business professionals. Great
opportunities are present in insurance industry Insurance is a fast growing
sector in this scenario of ever increasing demand for safety. Insurance
sector have have complex methods of operations, its logistics and their
management structure to meet the demand of an increasing competitive

All of these changes require that today’s MBA students be better prepared
that ever before to enter the challenging world of professional.
In today business world accounting professiona l or financial professional
have to interact with computer based information system or regular basis.
During the whole duration I got lot of experience and came to know about
real business world.

My project at ICICI Prudential is a complete experience in itself and it has
become an inspirable part of my knowledge of management being learned
in MBA program.
                         EXECUTIVE SUMMARY

The project titled “Perception       and Expectation regarding
insurance”        has been carried out at “ICICI Prudential.” The main

objective of this project is to know the impact of recession on sales and
return of life insurance. ICICI Prudential deals in various insurance
schemes. It include traditional plans, ULIP, health plan and pension plan.
The evaluation of financial planning has been increased through decades.
Now a day’s investment of saving has assumed great importance.

According to the study of the markets, it is being observed that there are a
lot of opportunities with people to get various benefits of safety, saving and
returns etc. after taking cover.

             In this project the great emphasis is given to the sales team of
ICICI Prudential in respect to know the impact of recession on sales and
return of life insurance products.

1. Introduction to the Industry
2. Introduction to Study
3. Introduction to the Organization
4. Research Methodology
       4.1 Title of the Study
       4.2 Duration of the Project
       4.3 Objective of Study
       4.4 Type of Research
       4.5 Sample Size and method of selecting sample
       4.6 Limitation of Study
5. Analysis and Interpretation
6. Facts and Findings
7. Conclusion
8. Bibliography

Introduction to
                                   Chapter 1


After opening up of Indian economy in 1991 there was a huge potential
available in every industry or business. Just like other industry liberalization
of the Indian insurance market was recommended indicating that market
should be to the private sector competition and ultimately to the foreign
private sector competition.


The business of insurance is related to the protection of economic value of
assets .Every asset has a value. The asset have been created through the
efforts of owner in the expectation that either through the income
generated there from or some other output some of his needs would be
met in the case of a factory or a cow, the production is sold and income is
generated .

There is no direct income. There is a normally expected life time for the
asset during which time is expected to perform. The owner aware of this can
so manage of his affairs that by the end of the life time, a substitute is made
available to ensure that the value or income is not lost. However if the asset
gets lost earlier being destroyed or made non functional through an accident
or other unfortunate event, the owner a nd those deriving benefits there from,
suffer insurance is a mechanism that helps to reduce such adverse

Insurance provides us with a sense of financial support especially during
that time of crisis irrespective of the fluctuation in the stock market. It
provides for our career goals right from your childhood years life insurance
is all about making sure that our family has adequate financial resources to
make their plans and dreams come true. It provides financial protection to
help your family or business after your death.

Insurance is basically a sharing device. The losses to assets resulting from
natural calamities (like fire, flood, earthquake, accidents, etc.) are met out of
common pool contributed by a large number of people who is exposed to
similar risks.

Types of insurance :

Any risk that can be quantified can potentially be insured. Specific kinds of
risk that may give rise to claims are known as "perils". An insurance policy
will set out in detail which perils are covered by the policy and which are not.
Below are (non-exhaustive) lists of the many different types of insurance
that exist. A single policy may cover risks in one or more of the categories
set out below. For example, auto insurance would typically cover both
property risk (covering the risk of theft or damage to the car) and liability risk
(covering legal claims from causing an accident). A homeowner's insurance
policy in the U.S. typically includes property insurance covering damage to
the home and the owner's belongings, liability insurance covering certain
legal claims against the owner, and even a small amount of coverage for
medical expenses of guests who are injured on the owner's proper ty.

Business insurance can be any kind of insurance that protects businesses
against risks. Some principal subtypes of business insurance are (a) the
various kinds of professional liability insurance, also called professional
indemnity insurance, which are discussed below under that name; and (b)
the business owner's policy (BOP), which bundles into one policy many of
the kinds of coverage that a business owner needs, in a way analogous to
how homeowners insurance bundles the coverages that a homeowner
        Auto insurance

Auto insurance protects you against financial loss if you have an accident. It
is a contract between you and the insurance company. You agree to pay the
premium and the insurance company agrees to pay your losses as defined
in your policy. Auto insurance provides property, liability and medical

   1. Property coverage pays for damage to or theft of your car.
   2. Liability coverage pays for your legal responsibility to others for bodily
       injury or property damage.
   3. Medical coverage pays for the cost of treating injuries, rehabilitation
       and sometimes lost wages and funeral expenses.

An auto insurance policy is comprised of six different kinds of coverage.
Most countries require you to buy some, but not all, of these coverages. If
you're financing a car, your lender may also have requirements. Most auto
policies are for six months to a year.

        Home insurance

Home insurance provides compensation for damage or destruction of a
home from disasters. In some geographical areas, the standard insurances
excludes certain types of disasters, such as flood and earthquakes, that
require additional coverage. Maintenance-related problems are the
homeowners' responsibility. The policy may include inventory, or this can be
bought as a separate policy, especially for people who rent housing. In
some countries, insurers offer a package which may include liability and
legal responsibility for injuries and property damage caused by members of
the household, including pets.
        Health Insurance

Health insurance policies by the National Health Service in the United
Kingdom (NHS) or other publicly-funded health programs will cover the cost
of medical treatments. Dental insurance, like medical insurance, is coverage
for individuals to protect them against dental costs. In the U.S., dental
insurance is often part of an employer's benefits package, along with health

        Disability Insurance

      Disability insurance policies provide financial support in the event the
       policyholder is unable to work because of disabling illness or injury. It
       provides monthly support to help pay such obligations as mortgages
       and credit cards.
      Disability overhead insurance allows business owners to cover the
       overhead expenses of their business while they are unable to work.
      Total permanent disability insurance provides benefits when a person
       is permanently disabled and can no longer work in their profession,
       often taken as an adjunct to life insurance.
      Workers' compensation insurance replaces all or part o f a worker's
       wages lost and accompanying medical expenses incurred because of
       a job-related injury.

        Casualty Insurance

Casualty insurance insures against accidents, not necessarily tied to any
specific property.

      Crime insurance is a form of casualty insurance that covers the
       policyholder against losses arising from the criminal acts of third
       parties. For example, a company can obtain crime insurance to cover
       losses arising from theft or embezzlement.
      Political risk insurance is a form of casualty insurance that can be
       taken out by businesses with operations in countries in which there is
       a risk that revolution or other political conditions will result in a loss.

        Life Insurance

Life insurance provides a monetary benefit to a decedent's family or other
designated beneficiary, and may specifically provide for income to an
insured person's family, burial, funeral and other final expenses. Life
insurance policies often allow the option of having the proceeds paid to the
beneficiary either in a lump sum cash payment or an annuity.

Annuities provide a stream of payments and are generally classified as
insurance because they are issued by insurance companies and regulated
as insurance and require the same kinds of actuarial and investment
management expertise that life insurance requires. Annuities and pensions
that pay a benefit for life are sometimes regarded as insurance against the
possibility that a retiree will outlive his or her financial resources. In that
sense, they are the complement of life insurance and, from an underwriting
perspective, are the mirror image of life insurance.

Certain life insurance contracts accumulate cash values, which may be
taken by the insured if the policy is surrendered or which may be borrowed
against. Some policies, such as annuities and endowment policies, are
financial instruments to accumulate or liquidate wealth when it is needed.

In many countries, such as the U.S. and the UK, the tax law provides that
the interest on this cash value is not taxable under certain circumstances.
This leads to widespread use of life insurance as a tax-efficient method of
saving as well as protection in the event of early death.

        Property

This tornado damage to an Illinois home would be considered an "Act of
God" for insurance purposes
Property insurance provides protection against risks to property, such as
fire, theft or weather damage. This includes specialized forms of insurance
such as fire insurance, flood insurance, earthquake insurance, home
insurance, inland marine insurance or boiler insurance.

      Automobile insurance, known in the UK as motor insurance, is
       probably the most common form of insurance and may cover both
       legal liability claims against the driver and loss of or damage to the
       insured's vehicle itself. Throughout the United States an auto
       insurance policy is required to legally operate a motor vehicle on
       public roads. In some jurisdictions, bodily injury compensation for
       automobile accident victims has been changed to a no-fault system,
       which reduces or eliminates the ability to sue for compensation but
       provides automatic eligibility for benefits. Credit card companies
       insure against damage on rented cars.
          o   Driving School Insurance i nsurance provides cover for any
              authorized driver whilst undergoing tuition, cover also unlike
              other motor policies provides cover for instructor liability where
              both the pupil and driving instructor are equally liable in the
              event of a claim.
      Aviation insurance insures against hull, spares, deductibles, hull wear
       and liability risks.
      Boiler insurance (also known as boiler and machinery insurance or
       equipment breakdown insurance) insures against accidental physical
       damage to equipment or machinery.
      Builder's risk insurance insures against the risk of physical loss or
       damage to property during construction. Builder's risk insurance is
       typically written on an "all risk" basis covering damage due to any
       cause (including the negligence of the insured) not otherwise
       expressly excluded.
      Crop insurance "Farmers use crop insurance to reduce or manage
       various risks associated with growing crops. Such risks include crop
       loss or damage caused by weather, hail, drought, frost damage,
       insects, or disease, for instance." [12]
   Earthquake insurance is a form of property insurance that pays the
    policyholder in the event of an earthquake that causes damage to the
    property. Most ordinary homeowners insurance policies do not cover
    earthquake damage. Most earthquake insurance policies feature a
    high deductible. Rates depend on location and the probability of an
    earthquake, as well as the construction of the home.
   A fidelity bond is a form of casualty insurance that covers
    policyholders for losses that they incur as a result of fraudulent acts
    by specified individuals. It usually insures a business for losses
    caused by the dishonest acts of its employees.
   Flood insurance protects against property loss due to flooding. Many
    insurers in the U.S. do not provide flood insurance in some portions
    of the country. In response to this, the federal government created
    the National Flood Insurance Program which serves as the insurer of
    last resort.
   Home insurance or homeowners' insurance: See "Property
   Landlord insurance is specifically designed for people who own
    properties which they rent out. Most house insurance cover in the
    U.K will not be valid if the property is rented out therefore landlords
    must take out this specialist form of home insurance.
   Marine insurance and marine cargo insurance cover the loss or
    damage of ships at sea or on inland waterways, and of the cargo that
    may be on them. When the owner of the cargo and the carrier are
    separate corporations, marine cargo insurance typically compensates
    the owner of cargo for losses sustained from fire, shipwreck, etc., but
    excludes losses that can be recovered from the carrier or the carrier's
    insurance. Many marine insurance underwriters will include "time
    element" coverage in such policies, which extends the indemnity to
    cover loss of profit and other business expenses attributable to the
    delay caused by a covered loss.
   Surety bond insurance is a three party insurance guaranteeing the
    performance of the principal.
      Terrorism insurance provides protection against any loss or damage
       caused by terrorist activities.
      Volcano insurance is an insurance that covers volcano damage in
      Windstorm insurance is an insurance covering the damage that can
       be caused by hurricanes and tropical cyclones.

        Liability

Liability insurance is a very broad superset that covers legal claims against
the insured. Many types of insurance include an aspect of liability coverage.
For example, a homeowner's insurance policy will normally include liability
coverage which protects the insured in the event of a claim brought by
someone who slips and falls on the property; automobile insurance also
includes an aspect of liability insurance that indemnifies against the harm
that a crashing car can cause to others' lives, health, or p roperty. The
protection offered by a liability insurance policy is twofold: a legal defense in
the event of a lawsuit commenced against the policyholder and
indemnification (payment on behalf of the insured) with respect to a
settlement or court verdict. Liability policies typically cover only the
negligence of the insured, and will not apply to results of wilful or intentional
acts by the insured.

      Directors and officers liability insurance protects an organization
       (usually a corporation) from costs associated with litigation resulting
       from mistakes made by directors and officers for which they are
       liable. In the industry, it is usually called "D&O" for short.
      Environmental liability insurance protects the insured from bodily
       injury, property damage and cleanup costs as a result of the
       dispersal, release or escape of pollutants.
      Errors and omissions insurance: See "Professional liability insurance"
       under "Liability insurance".
      Prize indemnity insurance protects the insured from giving away a
       large prize at a specific event. Examples would include offering prizes
       to contestants who can make a half-court shot at a basketball game,
       or a hole-in-one at a golf tournament.
      Professional liability insurance, also called professional indemnity
       insurance, protects insured professionals such as architectural
       corporation and medical practice against potential negligence claims
       made by their patients/clients. Professional liability insurance may
       take on different names depending on the profession. For example,
       professional liability insurance in reference to the medical profession
       may be called malpractice insurance. Notaries public may take out
       errors and omissions insurance (E&O). Other potential E&O
       policyholders include, for example, real estate brokers, Insurance
       agents, home inspectors, appraisers, and website developers.

        Credit

Credit insurance repays some or all of a loan when certain things happen to
the borrower such as unemployment, disability, or death.

      Mortgage insurance insures the lender against default by the
       borrower. Mortgage insurance is a form of credit insurance, although
       the name credit insurance more often is used to refer to policies that
       cover other kinds of debt.

        Other types

      Collateral protection insurance or CPI, insures property (primarily
       vehicles) held as collateral for loans made by lending institutions.
      Defense Base Act Workers' compensation or DBA Insurance
       provides coverage for civilian workers hired by the government to
       perform contracts outside the U.S. and Canada. DBA is required for
       all U.S. citizens, U.S. residents, U.S. Green Card holders, and all
       employees or subcontractors hired on overseas government
       contracts. Depending on the country, Foreign Nationals must also be
       covered under DBA. This coverage typically includes expenses
    related to medical treatment and loss of wages, as well as disability
    and death benefits.
   Expatriate insurance provides individuals and organizations operating
    outside of their home country with protection for automobiles,
    property, health, liability and business pursuits.
   Financial loss insurance protects individuals and companies against
    various financial risks. For example, a business might purchase
    coverage to protect it from loss of sales if a fire in a factory prevented
    it from carrying out its business for a time. Insurance might also cover
    the failure of a creditor to pay money it owes to the insured. This type
    of insurance is frequently referred to as "business interruption
    insurance." Fidelity bonds and surety bonds are included in this
    category, although these products provide a benefit to a third party
    (the "obligee") in the event the insured party (usually referred to as
    the "obligor") fails to perform its obligations under a contract with the
   Kidnap and ransom insurance
   Locked funds insurance is a little-known hybrid insurance policy
    jointly issued by governments and banks. It is used to protect public
    funds from tamper by unauthorized parties. In special cases, a
    government may authorize its use in protecting semi-private funds
    which are liable to tamper. The terms of this type of insurance are
    usually very strict. Therefore it is used only in extreme cases where
    maximum security of funds is required.
   Nuclear incident insurance covers damages resulting from an
    incident involving radioactive materials and is generally arranged at
    the national level. See the Nuclear exclusion clause and for the
    United States the Price-Anderson Nuclear Industries Indemnity Act)
   Pet insurance insures pets against accidents and illnesses - some
    companies cover routine/wellness care and burial, as well.
   Pollution Insurance, which consists of first-party coverage for
    contamination of insured property either by external or on-site
    sources. Coverage for liability to third parties arising from
    contamination of air, water, or land due to the sudden and accidental
    release of hazardous materials from the insured site. The policy
    usually covers the costs of cleanup and may include coverage for
    releases from underground storage tanks. Intentional acts are
    specifically excluded.
   Purchase insurance is aimed at providing protection on the products
    people purchase. Purchase insurance can cover individual purchase
    protection, warranties, guarantees, care plans and even mobile
    phone insurance. Such insurance is normally very limited in the
    scope of problems that are covered by the policy.
   Title insurance provides a guarantee that title to real property is
    vested in the purchaser and/or mortgagee, free and clear of liens or
    encumbrances. It is usually issued in conjunction with a search of the
    public records performed at the time of a real estate transaction.
   Travel insurance is an insurance cover taken by those who travel
    abroad, which covers certain losses such as medical expenses, loss
    of personal belongings, travel delay, personal liabilities, etc.
    Insurance financing vehicles

   Fraternal insurance is provided on a cooperative basis by fraternal
    benefit societies or other social organizations.[13]
   No-fault insurance is a type of insurance policy (typically automobile
    insurance) where insureds are indemnified by their own insurer
    regardless of fault in the incident.
   Protected Self-Insurance is an alternative risk financing mechanism
    in which an organization retains the mathematically calculated cost of
    risk within the organization and transfers the catastrophic risk with
    specific and aggregate limits to an insurer so the maximum total cost
    of the program is known. A properly designed and underwritten
    Protected Self-Insurance Program reduces and stabilizes the cost of
    insurance and provides valuable risk management information.
   Retrospectively Rated Insurance is a method of establishing a
    premium on large commercial accounts. The final premium is based
    on the insured's actual loss experience during the policy term,
    sometimes subject to a minimum and maximum premium, with the
    final premium determined by a formula. Under this plan, the current
    year's premium is based partially (or wholly) on the current year's
    losses, although the premi um adjustments may take months or years
    beyond the current year's expiration date. The rating formula is
    guaranteed in the insurance contract. Formula: retrospective
    premium = converted loss + basic premium × tax multiplier.
    Numerous variations of this formula have been developed and are in
   Formal self insurance is the deliberate decision to pay for otherwise
    insurable losses out of one's own money. This can be done on a
    formal basis by establishing a separate fund into which funds are
    deposited on a periodic basis, or by simply forgoing the purchase of
    available insurance and paying out-of-pocket. Self insurance is
    usually used to pay for high-frequency, low-severity losses. Such
    losses, if covered by conventional insurance, mean having to pay a
    premium that includes loadings for the company's general expenses,
    cost of putting the policy on the books, acquisition expenses,
    premium taxes, and contingencies. While this is true for all insurance,
    for small, frequent losses the transaction costs may exceed the
    benefit of volatility reduction that insurance otherwise affords.
   Reinsurance is a type of insurance purchased by insurance
    companies or self-insured employers to protect against unexpected
    losses. Financial reinsurance is a form of reinsurance that is primarily
    used for capital management rather than to transfer insurance risk.
   Social insurance can be many things to many people in many
    countries. But a summary of its essence is that it is a collection of
    insurance coverages (including components of life insurance,
    disability income insurance, unemployment insurance, health
    insurance, and others), plus retirement savings, that requires
    participation by all citizens. By forcing everyone in society to be a
    policyholder and pay premiums, it ensures that everyone can become
    a claimant when or if he/she needs to. Along the way this inevitably
    becomes related to other concepts such as the justice system and
    the welfare state. This is a large, complicated topic that engenders
       tremendous debate, which can be further studied in the following
       articles (and others):
          o   National Insurance
          o   Social safety net
          o   Social security
          o   Social Security debate (United States)
          o   Social Security (United States)
          o   Social welfare provision
      Stop-loss insurance provides protection against catastrophic or
       unpredictable losses. It is purchased by organizations who do not
       want to assume 100% of the liability for losses arising from the plans.
       Under a stop-loss policy, the insurance company becomes liable for
       losses that exceed certain limits called deductibles.

        Closed community self-insurance

Some communities prefer to create virtual insurance amongst themselves
by other means than contractual risk transfer, which assigns explicit
numerical values to risk. A number of religious groups, including the Amish
and some Muslim groups, depend on support provided by their communities
when disasters strike. The risk presented by any given person is assumed
collectively by the community who all bear the cost of rebuilding lost
property and supporting people whose needs are suddenly greater after a
loss of some kind. In supportive communities where others can be trusted to
follow community leaders, this tacit form of insurance can work. In this
manner the community can even out the extreme differences in insurability
that exist among its members. Some further justification is also provided by
invoking the moral hazard of explicit insurance contracts.

In the United Kingdom, The Crown (which, for practical purposes, meant the
Civil service) did not insure property such as government buildings. If a
government building was damaged, the cost of repair would be met from
public funds because, in the long run, this was cheaper than paying
insurance premiums. Since many UK government buildings have been sold
to property companies, and rented back, this arrangement is now less
common and may have disappeared altogether.

Insurance companies

Insurance companies may be classified into two groups:

      Life insurance companies, which sell life insurance, annuities and
       pensions products.
      Non-life, General, or Property/Casualty insurance companies, which
       sell other types of insurance.

General insurance companies can be further divided into these sub

      Standard Lines
      Excess Lines

In most countries, life and non-life insurers are subject to different regulatory
regimes and different tax and accounting rules. The main reason for the
distinction between the two types of company is that life, annuity, and
pension business is very long-term in nature — coverage for life assurance
or a pension can cover risks over many decades. By contrast, non-life
insurance cover usually covers a shorter period, such as one year.

In the United States, standard line insurance companies are "mainstream"
insurers. These are the companies that typically insure autos, homes or
businesses. They use pattern or "cookie-cutter" policies without variation
from one person to the next. They usually have lower premiums than excess
lines and can sell directly to individuals. They are regulated by state laws
that can restrict the amount they can charge for insurance policies.

Excess line insurance companies (aka Excess and Surplus) typically insure
risks not covered by the standard lines market. They are broadly referred as
being all insurance placed with non-admitted insurers. Non-admitted
insurers are not licensed in the states where the risks are located. These
companies have more flexibility and can react faster than standard
insurance companies because they are not required to file rates and forms
as the "admitted" carriers do. However, they still have substantial regulatory
requirements placed upon them. State laws generally require insurance
placed with surplus line agents and brokers not to be available through
standard licensed insurers.

Insurance companies are generally classified as either mutual or stock
companies. Mutual companies are owned by the policyholders, while
stockholders (who may or may not own policies) own stock insurance
companies. Demutualization of mutual insurers to form stock companies, as
well as the formation of a hybrid known as a mutual holding company,
became common in some countries, such as the United States, in the late
20th century. Other possible forms for an insurance company include
reciprocals, in which policyholders 'reciprocate' in sharing risks, and Lloyds

Insurance companies are rated by various agencies such as A. M. Best. The
ratings include the company's financial strength, which measures its ability
to pay claims. It also rates financial instruments issued by the insurance
company, such as bonds, notes, and securitization products.

Reinsurance companies are insurance companies that sell policies to other
insurance companies, allowing them to reduce their risks and protect
themselves from very large losses. The reinsurance ma rket is dominated by
a few very large companies, with huge reserves. A reinsurer may also be a
direct writer of insurance risks as well.

Captive insurance companies may be defined as limited-purpose
insurance companies established with the specific objective of financing
risks emanating from their parent group or groups. This definition can
sometimes be extended to include some of the risks of the parent
company's customers. In short, it is an in-house self-insurance vehicle.
Captives may take the form of a "pure" entity (which is a 100% subsidiary of
the self-insured parent company); of a "mutual" captive (which insures the
collective risks of members of an industry); and of an "association" captive
(which self-insures individual risks of the members of a professional,
commercial or industrial association). Captives represent commercial,
economic and tax advantages to their sponsors because of the reductions in
costs they help create and for the ease of insurance risk management and
the flexibility for cash flows they generate. Additionally, they may provide
coverage of risks which is neither available nor offered in the traditional
insurance market at reasonable prices.

The types of risk that a captive can underwrite for their parents include
property damage, public and product liability, professional indemnity,
employee benefits, employers' liability, motor and medical aid expenses.
The captive's exposure to such risks may be limited by the use of
India has traditionally been a high savings oriented country being on par
with the thrifty Japan. Insurance sector in the United States of America is as
big in size as the banking i ndustry. This gives us an idea of how important
the sector is. Insurance sector channel list the savings of people for long
term investment. In India this sector will bring the nation’s own money for
the nation.

The global life insurance stands at $1,521.2 billion, while the non life
insurance market is placed at $922.4 billion.

India takes the 22nd position with US $ 9.93 billion annual premium
collections. Out of one billion people in India only 35 million people are
covered by insurance.
Indian insurance market is set to touch $ 25 billion by 2010, on the
assumption of 7% annual growth in GDP.

This has made the sector the hottest one in India after IT. With social
security and security to the public at large being the agenda for opening the
sector, the role of the regulator becomes more serious and that would be
carefully watched at every step.

A brief history of the Insurance sector:

The business of life insurance in India in its existing from started in India in
the year 1818 with the establishment of the Oriental Life Insurance
Company in Calcutta. Some of the important milestones in the life insurance
business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute
to regulate the life insurance business.

1928: The Indian Insurance Companies Act enable the government to
collect statistical information about both life and non-life insurance

1938: Earlier legislation was consolidated and amended by the Insurance
Act with the objective of protecting the interests of the insuring public.

1956: 245 Indian and Foreign insurers and provident societies were taken
over by the
Central government and nationalized. LIC formed by an Act of parliament,
viz. LIC Act,
1956, with a capital contribution of Rs.5 crores from the government of
Related Acts:

The insurance sector went through a full circle of phases from being
unregulated to completely regulated and then currently being partly
deregulated. It is governed by a number of acts, with the first one being the
Insurance Act, 1938.

The Insurance Act, 1938

The Insurance Act, 1938 was the first legislation governing all forms of
insurance to provide strict state control over insurance business.

Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19
January 1956, that life insurance in India was completely nationalized,
through a Government ordinance; the Life Insurance Corporation Act, 1956
effective from 1.9.1956 was enancted in the same year to, inter-alia, form
LIFE INSURANCE CORPORATION after nationalization of the 245
companies into one entity. There were 245 insurance companies of both
Indian and foreign origin in 1956. Nationalization was accomplished by the
govt. acquisition of the management of the companies. The Life Insurance
Corporation of India was created on 1 September, 1956, as a result and has
grown to be the largest insurance company in India as of 2006

General Insurance Business (Nationalisation) Act, 1972

The General Insurance Business (Nationalisation) Act, 1972 was enacted to
nationalise the 100 odd general insurance companies and subsequently
merging them into four companies. All the companies were amalgamated
into National Insurance, New India Assurance, Oriental Insurance, United
India Insurance which were headquartered in each of the four metropolitan
Insurance Regulatory and Development Authority (IRDA) Act, 1999

Till 1999, there were not any private insurance companies in Indian
insurance sector. The Govt. of India, then introduced the Insurance
Regulatory and Development Authority Act in 1999, thereby de-regulating
the insurance sector and allowing private companies into the insurance.
Further, foreign investment was also allowed and capped at 26% holding in
the Indian insurance companies. In recent years many private players
entered in the Insurance sector of India. Companies with equal strength
competing in the Indian insurance market. Currently, in India only 2 million
people (0.2 % of total population of 1 billion), are covered under Mediclaim,
whereas in developed nations like USA about 75 % of the total population
are covered under some insurance scheme. With more and more private
players in the sector this scenario may change at a rapid pace.

 Replacement of income

 One prime reason for buying life insurance is to complete the income lost
 in the event of untimely death of the life insured. When this regular income
 stops, the proceeds from a life insurance policy can be used to support the
 family members.

 Maintenance of lifestyle

 In case of the death life insured, family members are often hard pressed
 trying to arrange for funds that can maintain lifestyle. Life insurance offers
 protection against such an unfortunate eventuality.

 Expenses due to premature death

 Life insurance can play a crucial role to pay off any debt left behind by the
 person insured. For example car loans, medical bills, mortgages, credit
 card payment, etc. are often left in case of sudden death. These
 obligations can be met with life Insurance without any depletion in family

Life insurance is Great Avenue to help. A charitable cause, or people with
philanthropic desire but short of means, life insurance provides the option to
contribute much more than is possible by the life insured

   1. Term insurance: It covers the life for a term of 1 or more years. It
      pays only death benefits only if the policy holder dies during the
      period the insurance is in force. Term insurance generally offers the
      cheapest form of life insurance. You can renew most of the term
      insurance policies for one or more terms even if the health condition
      has changed.

   2. Whole life insurance: It covers the life for as long as the person
      lives if his premiums are paid. The person generally pays the same
      premium throughout his life time. Some whole life policies allow to
      pay the premium for a shorter period (15, 20, 25 years). The
      premium for these policies is higher. There are options in the
      market to have a return of premium option in a whole life policy.
      That means after a certain age of paying premiums, the company
      will pay back the premium to the life assured but the coverage will

   3. Money back insurance: The money back plan not only covers your
      life, it also assures you the return of a certain percent of the sum
      assured as cash payment at regular intervals. It is a savings plan
      with the added advantage of life cover and regular cash inflow. This
      plan is ideal for planning for specials moments like a wedding, your
      child’s education or purchase of an assets, etc. Money back plan
      have “participating” and “nonparticipating” versions in the market.

   4. Endowment assurance: Endowment insurance is a level premium
      plan with a savings feature. At maturity, a lump sum is paid out
      equal to the sum assured (plus dividends in a par policy). If death
      occurs during the term of the policy then the total amount of
      insurance and any dividends (par policy) are paid out.
5. Universal life: This is a flexible life insurance policy and is also
   market sensitive. You decide on the several investment options on
   how your net premium are to be invested. While the money
   invested has the potential for significant growth, such funds are
   subject to market risks including the loss of the principle.

6. Unit linked product: Market linked plans or unit linked insurance
   plans (ULIP) are similar to traditional insurance policies with the
   exception that your premium amount is invested by the insurance
   company in the stock market. Market linked insurance plans (MLP)
   are the way to invest mutual funds and invest in a basket of
   securities, allowing you to choose between investment options
   predominantly in equity , debt or a mix of both (called balanced

There are several terms associated with insurance that need to be
known by an individual to understand their impact. Some terms are
technical and hence there might be some effort required in order to
understand them properly and then use them to one’s advantage.


The insurance contract involves the insurer and insured. This means that
there is one party that is giving the insurance and the other party who is
getting the cover of insurance. The insured is the subject matter of the
insurance cover. This means that the person who is insured is the one
whose life is covered in life insurance. Every life insurance policy will
have an insured. One can distinguish the insured from the owner of the
policy who is the person who takes the policy. In many cases, the owner
and the insured might be the same perso n as the person who takes the
policy will also be the one whose life is covered.

The insurer is the entity that provides the insurer. The insurance
company will be covering the life and the property of the various people
entities. The insurer is one of the parties that will complete the insurance
purpose. The strength of the insurance company is very important in
ensuring growth of the insurance sector.

The beneficial is the person who has to receive the proceeds under the
insurance policy on the occurrence of risk. Different people could
become a beneficial under various circumstances. This will main the
beneficial will receive the amount in case of the death of the insure.
In some cases insure or the person whose life is covered will receive the
pay out.
This will happen when there are policies that pay out specific sum on the
completion of certain number of pairs of the policy. If the individual
survives for this time period than the pay out that is specified will be
received by him.


The sum paid by the insured to the insurance company as consideration
for insurance cover. This has to be paid in accordance with the term of
the policy. The premium can be paid monthly, quarterly, half yearly or
annually. While the premium stops after a certain period, the cover on
the life of the person will continue for a longer period.

Surrender value

There may be cases when the person taking the policy is not able to pay
the required amount of premium. The person may like to discontinue the
policy .If the required conditions are met , then there can be a surrender
of the policy to the company. The policy is closed at an early stage and
given back to the insurance company at a price lower than the sum
assured. This price is known as the surrender value.

Paid up value
In some cases when the insurance policy is running the policy holder
would not like to surrender and loss the insurance cover available.
There is an option available to achieve the objective of stopping the
payment of premium but keep the insurance cover. These can be done
when the policy is paid to a certain extent and the cover will be limited to
the proportion of the premiums paid till now.
Unit allocation

When the premium is paid by the investors in unit linked policies a part of
it goes to various expenses and the remaining amount is used to buy
units in the fund specified in the scheme and these will appreciate
according to the movement in the net asset value of the scheme.

Death benefit

The life insurance company pays the beneficiary the amount that is
equal to the sum assured in case of death of person cover under the
policy. This is known as the death benefit given to those who have been
nominated to receive this benefit in case of the death of the insured.

Top up

Several insurance policies have the facility where the insured can raise
the amount of investment by paying necessary additional amount of
premium. Depending upon the nature of the policy, it can lead to
increase in the cover. This facility reduces the workload and conditions
to be fulfilled by the person if he had gone for an additional policy by
paying same amount.

On July 14, 2000, the chairman of the IRDA, Mr. N. Rangachari set forth a
set of regulations in an extra ordinary issue of the Indian gazette those
details of the regulation.

Insurance regulatory and development authority is constituted by the
government of India, which governs all the companies that are operating in
the insurance sector in India. As per the section 4 of IRDA act 1999,
insurance regulatory and development authority (IRDA) specifies the
composition of authority.
The authority is a 10member team consisting of

   1. Chairman
   2. Five whole team members
   3. Four part time member

All appointed by the govt. of India.

Mission of IRDA

To protect the interest of the policy holders, to regulate, to promote and
ensure orderly growth of the insurance industry and for matters connected
with or incidental there to.
 Introduction to Industry:

Indian Insurance Industry : Insurance may be described as a social
device to reduce or eliminate risk of life and property. Under the plan of
insurance, a large number of people associate themselves by sharing risk,
attached to individual.

The risk, which can be insured against include fire, the peril of sea, death,
incident, & burglary. Any risk contingent upon these may be insured against
at a premium commensurate with the risk involved.

Insurance is actually a contract between 2 parties whereby one party called
insurer undertakes in exchange for a fixed sum called premium to pay the
other party happening of a certain event.

Insurance is a contract whereby, in return for the payment of premium by
the insured, the insurers pay the financial losses suffered by the insured as
a result of the occurrence of unforeseen events.

With the help of Insurance, large number of people exposed to a similar risk
make contributions to a common fund out of which the losses suffered by
the unfortunate few, due to accidental events, are made good.

History of life insurance
The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360-
degree         turn witnessed over a period of almost 190 years.

The business of life insurance in India in its existing form started in India in
the year 1818 with the establishment of the Oriental Life Ins urance
Company in Calcutta.

Some of the important milestones in the life insurance
business in India are:

1912 - The Indian Life Assurance Companies Act enacted as the first statute
to regulate the life insurance business.

1928 - The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance businesses.

1938 - Earlier legislation consolidated and amended to by the Insurance Act
with the objective of protecting the interests of the insuring public.

1956 - 245 Indian and foreign insurers and provident societies taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC
Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.
The functions of Insurance can be bifurcated into two

1. Primary    Functions
2. Secondary Functions
3. Other Functions

The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide
protection against future risk, accidents and uncertainty. Insurance cannot
check the happening of the risk, but can certainly provide for the losses of
risk. Insurance is actually a protection against economic loss, by sharing the
risk with others.
Collective bearing of risk - Insurance is a device to share the financial loss
of few among many others. Insurance is a mean by which few losses are
shared among larger number of people. All the insured contribute the
premiums towards a fund and out of which the persons exposed to a
particular risk is paid.
Assessment of risk - Insurance determines the probable volume of risk by
evaluating various factors that give rise to risk. Risk is the basis for
determining the premium rate also
Provide Certainty - Insurance is a device, which helps to change from
uncertainty to certainty. Insurance is device whereby the uncertain risks may
be made more certain.

The secondary functions of insurance include the following:
Prevention of Losses - Insurance cautions individuals and businessmen to
adopt suitable device to prevent unfortunate consequences of risk by
observing safety instructions; installation of automatic sparkler or alarm
systems, etc. Prevention of losses cause lesser payment to the assured by
the insurer and this will encourage for more savings by way of premium.
Reduced rate of premiums stimulate for more business and better protection
to the insured.
Small capital to cover larger risks - Insurance relieves the businessmen
from security investments, by paying small amount of premium against
larger risks and uncertainty.
Contributes towards the development of larger industries - Insurance
provides development opportunity to those larger industries having more
risks in their setting up. Even the financial institutions may be prepared to
give credit to sick industrial units which have insured their assets including
plant and machinery.

The other functions of insurance include the following:

Means of savings and investment - Insurance serves as savings and
investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured's For the purpose of availing income-
tax exemptions also, people invest in insurance.

Source of earning foreign exchange - Insurance is an international
business. The country can earn foreign exchange by way of issue of marine
insurance policies and various other ways.

Risk Free trade - Insurance promotes exports insurance, which makes the
foreign trade risk free with the help of different types of policies under
marine insurance cover.
    Chapter 2
Introduction to the
Investment is the employment of funds on assets with the aim of earning
income or capital appreciation. Investment has two attributes namely time
and risk. Present consumption is sacrificed to get a return in the future. The
sacrifice that has to be borne is certain but the return in the future may be
uncertain. This attribute of investment indicates the risk factor. The risk is
undertaken with a view to reap some return from the investment. For a
layman, investment means some monetary commitment. A person’s
commitment to buy a flat or a house for his personal use may be an
investment from his point of view. This cannot be considered as an actual
investment as it involves sacrifice but does not yield any financial return.

To the economist, investment is the net addition made to the nation’s capital
stock that consists of goods and services that are used in the production
process. A net addition to the capital stock means an increase in the
buildings, equipments or inventories. These capital stocks are used to
produce other goods and services.

Financial investment is the allocation of money to assets that are expected
to yield some gain over a period of time. It is an exchange of financial claims
such as stocks and bonds for money. They are expected to yield returns
and experience capital growth over the years.

The financial and economic meanings are related to each other because the
savings of the individual flow into the capital market as financial
investments, to be used in economic investment.

        Long time horizon.

        Holding period may be from I years to few years.

        Assumes moderate risk.

        Moderate returns.

        Considers fundamental factors and evaluates the
            performance of the company regularly.

        Uses his own funds and avoids borrowed funds.
Investment Objectives

                1. Returns.
                2. Risk
                3. Liquidity
                4. Hedge against inflation
                5. Safety

Investment alternatives:

                       Negotiable instruments.

  1. shares and securities.

  2. Debentures.

  3. I.V.P and K.V.P’s.

  4. Government securities.

  5. Treasury bills.

  6. Commercial Papers.

  7. Certificates of deposits.
2. Non- Negotiable instruments:

a) Bank deposits.

b) Post office deposits.

c) N.B.F.C deposits.

d) P.P.F

e) NSS

f) NSC

   3. Others
                 Insurance

                 Mutual Funds.

                 Real Assets

                 Real Estate

                 Arts and Antiques.
Life Insurance Is Now an Investment Tool

Life Insurance is not longer just a fund to pay your funeral. Life Insurance
has become a very valuable tool in wealth building, tax reduction, and
succession planning.

Life Insurance is very complicated. The perspective that a good practitioner
will have on a client’s need for Life insurance will depend upon many
variables. Three basic things can happen during the term of a Life Insurance
Policy; the policyholder can live, die, or become disabled. In some states,
Life Insurance is protected from creditors. Life Insurance proceeds are tax-
free and can be applied to partnerships, corporations, LLCs and trusts.

Cash Value Policies

The type of Life Insurance that comes to mind upon the mind is what you
know as Term (the type you see on the internet and in commercials).

Term Life is pure insurance; it can be very simple—with cash value
received at the end of the term; but there are now different types, which
complicate the structure of the terms. The main goal of Term Life policies is
to pay a lump sum to a beneficiary upon the death of the policy owner. This
provides some extent of asset protection for a family, in the event that a
spouse dies; the family is provided for with a lump sum cash payment.

Whole Life Insurance provides permanent protection for dependents while
building a cash value account of the policy owner. With this type of
insurance, the insurance company manages the policies various accounts. It
pays a death benefit to the beneficiary named and offers low-risk, tax-free
cash accumulation: it allows the death benefit to vary in relation to the fund
returns of the cash value account: it provides for borrowing from the policy
during the policy lifetime. There is no guarantee on the cash value.
Universal Life Insurance provides permanent protection for your
dependents and is more flexible than whole or variable life. It pays a death
benefit to the named beneficiary and offers a low risk cash value account
and tax deferred accumulation: it allows the policy holder to earn market
rates of interest on the cash value of the account: it offers the right to borrow
or withdraw from the policy during your lifetime.

Why does it not make sense to mix insurance with

In India, life insurance has been sold as a tax-saving product for years. The
savings and investment portion has always been on top of the mind - one bought
life insurance asking, "What will I get from it?" It has been a quirk of character
that allows us all to believe that our lives didn't matter enough to cover the risk
of losing it. Hence the value for the risk cover always seemed insignificant.

Moreover, awareness about the actual returns or yields earned on insurance
products was quite low. Insurance customers solely depended on insurance
agents for product information. The agents dumped high premium plans on
the clients, ostensibly to provide higher income (it had a lot more to do with
higher commissions to the agents) compared to low premium pure
insurance plans or term plans. Which would have given exactly the same
benefit at a fraction of the cost.

In order that we better understand the cost implications of using your
insurance plans as an investment tool, let's look at a realistic, if hypothetical

A 30 year old male purchases an endowment plan for a sum of Rs. 10 lakh
for a term of 30 years. He will pay an annual premium of Rs. 29,820. On the
other hand, the annual premium for the same sum and duration for a term
plan would be Rs. 3,430 - less than 12 per cent of the cost of the
endowment plan.
The term plan offers only insurance i.e. no money if the insured survives the
term of the policy. The man might argue that he spends all that money and
gets nothing in the end. Especially when the endowment plan could provide
returns in the range of 6 to 8 per cent per annum. Let us assume the higher
return of 8 per cent per annum, which means the insured receives a sum of
Rs. 36.5 lakh after 30 years. Keep in mind that in order to earn this 8 per
cent per annum return, the insured has to commit an aggregate sum of Rs.
894,600/- to be paid over the next 30 years as insurance premiums.


Positive Perceptions:

    A Necessity

    Useful During Emergencies

    Tax Saving Instrument

    Helps Preserve Saving

    Investment for life

    Good mix of returns and security.

    A way to take care of responsibiliti es

Negative Perceptions:

    Requirement of people over 45.
 Uncertainity about benefits.

 Getting Claim is difficult.

 Important ailments not covered.

 Money goes waste when young.

 Benefits hospitals more than policy holder
Introduction to
Introduction of ICICI Prudential

ICICI Prudential Life Insurance Company is a joint venture between ICICI
Bank - one of India's foremost financial services companies-and prudential
plc - a leading international financial services group headquartered in the
United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI
Bank holding a stake of 74% and Prudential plc holding 26%.

We began our operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). Today, our nation-
wide team comprises of over 2100 branches (inclusive of 1,116 micro-
offices), over 290,000 advisors; and 18 bancassurance partners.

ICICI Prudential is the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings. For three years i n a
row, ICICI Prudential has been voted as India's Most Trusted Private Life
Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most
Trusted Brands'. As we grow our distribution, product range and customer
base, we continue to tirelessly uphold our commitment to deliver world-class
financial solutions to customers all over India.

The ICICI Prudential edge comes from our commitment to our customers, in
all that we do - be it product development, distribution, the sales process or
servicing. Here's a peek into what makes us leaders.

1. Our products have been developed after a clear and thorough
understanding of customers' needs. It is this research that helps us develop
Education plans that offer the ideal way to truly guarantee your child's
education, Retirement solutions that are a hedge against inflation and yet
promise a fixed income after you retire, or Health insurance that arms you
with the funds you might need to recover from a dreaded disease.
2. Having the right products is the first step, but it's equally important to
ensure that our customers can access them easily and quickly. To this end,
ICICI Prudential has an advisor base across the length and breadth of the
country, and also partners with leading banks, corporate agents and brokers
to distribute our products .

3. Robust risk management and underwriting practices form the core of our
business. With clear guidelines in place, we ensure equitable costing of
risks, and thereby ensure a smooth and hassle-free claims process.

4. Entrusted with helping our customers meet their long-term goals, we
adopt an investment philosophy that aims to achieve risk adjusted returns
over the long-term.

5. Last but definitely not the least, our 32,000 plus strong team is given the
opportunity to learn and grow, every day in a multitude of ways. We believe
this keeps them engaged and enthusiastic, so that they can deliver on our
promise to cover you, at every step in life.

Our vision:

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

This we hope to achieve by:

      Understanding the needs of customers and offering them superior
       products and service
      Leveraging technology to service customers quickly, efficiently and
      Developing and implementing superior risk management and
       investment strategies to offer sustainable and stable returns to our
      Providing an enabling environment to foster growth and learning for
       our employees
      And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment
to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and
Passion. Each of the values describe what the company stands for, the
qualities of our people and the way we work.

We do believe that we are on the threshold of an exciting new opportunity,
where we can play a significant role in redefining and reshaping the sector.
Given the quality of our parentage and the commitment of our team, there
are no limits to our growth.

Our values :

Every member of the ICICI Prudential team is committed to 5 core values:
Integrity, Customer First, Boundaryless, Ownership, and Passion. These
values shine forth in all we do, and have become the keystones of our

The Company

ICICI Prudential Life Insurance Company is a joint venture between ICICI
Bank, 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 Life's capital stands at Rs. 4,780 crores (as of January 31,
2008) with ICICI Bank and Prudential plc holding 74% and 26% stake
respectively. For the period April 1, 2008 to December 31, 2008, the
company has posted a growth of 28%, garnering total received premium
(new business + renewal) of Rs. 9,918 crores as against Rs. 7,758 crores
during the corresponding period in FY2008 and has underwritten over 9
million policies since inception. The company has assets held over Rs.
28,500 crores as on January 31, 2009.

ICICI Prudential Life is also the only private life insurer in India to receive a
National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings.
The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI
Prudential's ability to meet its obligations to customers at the time of
maturity or claims.

For the past eight years, ICICI Prudential Life has retained its leadership
position in the life insurance industry with a wide range of flexible products
that meet the needs of the Indian customer at every step in life.

Insurance Plans:

ICICI Prudential has a wide array of insurance plans that have been
designed with the philosophy that different individuals are bound to have
differing insurance needs.

The ideal insurance plan is one that addresses the exact insurance needs of
the individual that will depend on the age and life stage of the individual
apart from a host of other factors.
Life Insurance Plans:

Under Life insurance plans, ICICI Prudential offers plans under the following
major need categories:

      Education Insurance Plans
      Wealth Creation Plans
      Premium Guarantee plans
      Protection Plans

Pension & Retirement Solutions:

The primary objective of a pension plan is to help you provide for your
financial needs in your post retirement years. You will find a Pension
Planning Calculator on the site, meant to make your pension plan review as
simple as possible. The calculator is the first step in your Pension Plan
scheme, there are othe steps towards getting the Indian pension policy
you need.

Click here to know more about our pension plan solutions.

      LifeStage Pension
      LifeTime Super Pension
      LifeLink Super Pension
      ForeverLife

Health Product Suite:

Under Health Product Suite, ICICI Prudential offers plans under the
following major need categories:

Hospitalization Plans

      MediAssure
       Hospital Care

Critical Illness Plans

       Crisis Cover

Cancer Products

       Cancer Care

Diabetes Products

       Diabetes Care Active
       Diabetes Assure

Tax Planning

Tax Benefits on Insurance and Pension

Life insurance and retirement plans are effective ways to save taxes when
doing your year end tax planning.
To assist you in tax planning, the tax breaks that are available under our
various insurance and pension policies are described below:
Our life insurance plans are eligible for tax deduction under Sec. 80C.

    1. Our Pension plans are eligible for a tax deduction under Sec. 80CCC.
    2. Our health insurance plans/riders are eligible for tax deduction under
        Sec. 80D.
    3. The proceeds or withdrawals of our life insurance policies are exempt
        under Sec 10(10D), subject to norms prescribed in that section.

Invest in ICICI Prudential Life insurance and retirement plans and avail of
these tax planning services to save tax at your year end tax planning!
     CHAPTER 4
Research Methodology
    Research Methodology:

    The objective` of present study can be accomplishing by conducting a
    systematic market research. Research is a scientific and systematic search
    for pertinent information on a specific topic. It is an art of scientific
    investigation. Research is a voyage of discovery. It is also said to be the
    pursuit of truth with the role of research in several fields of applied economics,
    whether related to business or to economy as a whole, has greatly influenced
    in modern times. The increasing complex nature of business & government
    has focused attention on the use of research in solving problems.

    Since it is a systemic effort, therefore, it consists of a number of steps,
    which together is referred as research methodology.
    As it is said “All progress is born of inquiry. Doubt is often better than
    overconfidence, for it leads to inquiry which leads to invention.”

    Various steps in research methodology are as follows :

       Defining the Research Problem & Objective

      Research Design

      Sampling Design

      Data Collection

      Data Analysis and interpretation

      Conclusion

      Suggestion

    Defining the Research Problem & Objective
Any research work that is being undertaken or conducted has some motto to
be achieved. This is guided by the problem behind it. The objective of the
research is to:

Research problem:
“Perception and Expectations regarding insurance.”


            To know the change in perception of existing policy holders.
            To know the expectations of customers regarding insurance.

Research Design
The research design constitutes the blue print for the collection,
measurement and analysis of data. Research design is the plan and
structure of investigation so conceived as to obtain answers to reach
questions. A research design expresses the structure of the problem and
the plan of investigation used to obtain empirical evidence on relation of the

   There are three types of research designs:

1. Exploratory research design
                  Used for discovering ideas and insights
2. Descriptive research design
                  Used for describing characteristics of population
3. Causal research design
                  Used for proving cause-effect relationship
My research approach was descriptive research.
Sampling Design
Sample is a part of entire universe within which the research is to be
conducted and which give complete knowledge about the entire problem.
Sampling units was chosen by Random Sampling consisting of working
population of Udaipur city.

Data Collection:

                       Instruments of Data Collection:

Secondary Data
Secondary data is the data gathered by someone else prior to the current
needs of the researcher. It is already available to the researcher before he
starts conducting his research work.

Advantages of secondary data
             Quickly available
             Economical
             Dependable
             Easy to Use
             Accessible
             Understandable

While conducting study the secondary data was collected as follows:
            Analyse the following data from Management Information Systems
              a. Contact no.
              b. Address
              c. Data relating competitors.

            Other sources:-
              a. Information through various web sites.
              b. Magazines and Journals.
              c. Newsletters and weeklies.
              d. Electronic Media.
    Primary Data

     Depth Interview

  Principle of Depth Interview
             Respondent will reveal truth about sensitive issue after taking him
              in confidence.
             Respondent’s answer will be obtained by probing.

 Characteristics of Depth Interview

             An unstructured interview of the respondent is taken
             Only one respondent is interviewed at a time
             Usually conducted by experienced researcher
             Interviewer’s role is extremely important since the emphasis is on
For conducting the study the respondents selected were jewellers, traders in
metal, farmers and general public.

The researcher originates the primary data. The primary data for the study
was collected as follows:
            Feedback from :
                General Public

The data collected was primary data, i.e. those data which are collected
afresh and thus happen to be original in character. In the survey primary
data was collected through questionnaire.
Contact Method
The method used was Personal interview.

Sample Size
Total of 57 people were interviewed.

Area of study: Udaipur city.

Duration of the project: 6 Months.

         Small size of sample
         Biased people’s perception
         Lack of interest in response
Name          :
Address       :
Age           :                                    Gender    : M     □       F □
Occupation    :
Contact No. :

Ques 1. Do you have any Insurance Policy?

Ques 2. Why did you go for it?
                        □ Safety                             □ Tax Savings

                        □ Return                             □ Obligation
Ques 3. What was the main purpose of taking the policy?

Ques 4.   What are your views in present after buying the policy?
                        □ Safety                             □Tax Savings
                        □ Returns                            □Obligation
Ques5. How long would you like to continue with your policy?
                         □ upto 3 yrs                        □ upto 5 yrs.
                        □ upto 10 yrs                        □throughout term
Ques 6. The combination of policies with which you would like to go...
                  □ only insurance                      □insurance+ investment
                  □life cover+ health+ insurance       □pension + health + life cover
                  □ any of the above.
Analysis and
Ques.1)Do you have any insurance policy?

            YES                                   45

             NO                                   12

Ques2) Why did you go for it ?

                                    1.      2.          3.     4.

       Safety                       37      5           2      1

       Return                       6       23          12     4

       Tax saving                   3       19          18     5
       Obligation                   0       0           12     33

Ques.3What are yours views after buying policy?

                                       1.        2.       3.    4.

       Safety                          34        8        2     1

       Return                          8         19       18    0

       Tax saving                      3         19       18    5
       Obligation                      0         0        6     39

Ques.4) How long would you like to continue with your current policy?

               Up to 3 Years-      6        Up to 10 Years-     6

               Up to 5 Years-      12 Through Term-             21

Ques.5) Would you like to go for the policy which comprises of which

Only Insurance                              9
Insurance+Investment                        24
Life Cover+Health                           12

Pension + Health + Life Cover   6

Any of the above                6
                    Facts and

    o Sample Size-57.

    o Out of which 78.94% are Insurance Policy holders.

   Purpose of going for a Insurance policy:

           82.22% people give safety as their first priority.
        11.11% people give safety as second priority.
        4.44% people give safety as third priority.
        2.22% people give safety as fourth priority.
        13.33% people give return as their first priority.
        51.11% people give return as second priority.
        26.66% people give return as third priority.
        8.88% people give return as fourth priority.
        6.66% people give tax as first priority.
        42.22% people give tax as second priority.
        73.33% people give obligation as fourth priority.

             Change in perception after buying the policy:

 Safety as first priority has registered a decline in 6.67%.
 Return as first priority has registered a growth of 4%.
 There is no change in priority with regard to tax perspective.

        Years of continuation with the policy?

               13.33% holders wish to continue for 3 years.
               13.33% holders wish to continue for 5 years.
               26.66% holders wish to continue for 10 years.
               46.66% holders wish to continue for the term of policy

 Combinations in case of new policy

                             15.78% wish to take policy only with
                               insurance motive.
                             42.10% wish to take policy with
                               investment and insurance.
                             21.05% wish to take policy with life cover,
                               health insurance and investment.
                                10.52% wish to take policy with pension
                                  health and life cover.
10.52% wish to take policy with any of the specific option.

                    Chapter 7

   Perception of customer regarding insurance has been changed.
     Earlier people used to consider it as a safety instrument but now they
     consider it as investment and return providing instrument.
   Even expectations regarding insurance is also changing. So now it is
     not only a safety instrument. Thus preference of consumer has been
 Chapter 8

 As     customers expects more returns from insurance policy so
   company should concentrate more on return guaranteed plans.
 Company should introduce such products which provides benefits of
   safety as well as returns.
 Chapter 8







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