Summer Internship Project

A Study on Life Insurance Sector in India

(A Project with TATA AIA LTD)

Submitted in partial fulfillment of the requirements for

Master of Management Studies (MMS)
Academic Year: 2020-21

Submitted By
Saurabh Gupta
Roll No. 82
MMS-II, Batch: 2019-21

Chetana’s R. K. Institute of Management and Research,

Bandra (E), Mumbai 400 051
 Declaration

I hereby declare that this report submitted in partial fulfillment of the requirement of the
award for the Master of Management Studies to Chetana’s R.K. Institute of Management
and Research, is my original work and not submitted for award of any degree or diploma
fellowship or for similar titles or prizes.

I further certify that I have no objection and grant the rights to Chetana’s R.K. Institute of
Management and Research to publish any chapter/ project if they deem fit in
Journals/Magazines and newspapers etc. without my permission.

Place : Mumbai

Date :

Name : Saurabh Gupta

Class : M.M.S; Sem. – II

Roll No. : 82
 Certificate
(Institute LOGO – CRKIMR) – To be taken on colour page from IT Lab

This is to certify that the project submitted in partial fulfillment for the award of Master
of Management Studies of Chetana’s R.K. Institute of Management and Research is a
result of the bonafide research work carried out by Mr. Saurabh Gupta under my
supervision and guidance, no part of this report has been submitted for award of any other
degree, diploma, fellowship or other similar titles or prizes. The work has also not been
published in any Journals/Magazines.

Date:
Place: Mumbai

Dr. Jayashree A. Bhakay Faculty Guide - Prof. Aftab Shaikh

Director CRKIMR
 Color photo copy of summer
internship certificate received
by company.
 ACKNOWLEDGEMENT
It is my great privilege to acknowledge and remain indebted to the people who by their
rich and varied contribution have helped me in understanding the various aspects
included in my project. The successful completion of the project would be incomplete
without the mention of people who made it possible.
Tata AIA life insurance ltd. was a great support and guide for my entire project.

I would like to thank and express my deep sense of gratitude to Dr.Madhumita Patil
(C.E.O of Chetana’s R.K and Institute of Management & Research) and Dr.Jayashree
Bhakay (Director of Chetana’s R.K Institute of Management & Research) for giving me
such a wonderful opportunity to explore corporate work culture and to Mrs Rajshree
jamdade and Mr. Manish Tanpathak (BM) who has given his time and valuable
suggestions, guidance as the industry mentor without which it would have not been
possible to complete the project.

Signature of the Student

Saurabh Gupta
Turnitin Report (Plagiarism Report)
 Executive Summary

This report is based on the Tittle “To study the Life insurance sector in India”. This
report gives an insight of life insurance sector in India, will explain the various
type of Life insurance and General insurance plans available and explain the
history of insurance sector in India how it came in existence, how Malhotra
committee was formed to reform the insurance sector in India, how insurance
sector was nationalized in India, how IRDAI also known as insurance regulatory
and development authority of India was formed. This report explains the benefits
of various types of Life insurance and general insurance and how a person should
buy a life insurance that will fulfill his needs and why one must buy a life
insurance policy.

This research explains about the change in the perception of the consumer related
to Life insurance sector, what he feels about the insurance sector as an investment
avenue and how much public sector dominates the life insurance sector. What are
the factors that influence a consumer before buying an insurance policy? The
research also tells that how COVID-19 had an adverse effect in many of the
households and many households facing financial crisis due to it, how different
sectors are affected due to the torrid effect of COVID-19 in India, and its affect in
insurance sector in India. How many people have changed their investment habits
and how many are not investing in Life insurance sector due to having financial
issues because of COVID-19.
 TABLE OF CONTENTS

CHAPTERS PARTICULARS PAGE NO

1 INTRODUCTION
1.1 Introduction to the Task 8
1.2 Introduction to the Sector/Industry 9
1.3 Introduction to the Organisation 24
1.4 Introduction to the Project 27

2 SUMMER INTERNSHIP TASK

DETAILS
2.1 Literature Review 28
2.2 Objective of the project 29
2.3 Research Methodology 29
2.4 Limitations 30

3 ANALYSIS & FINDINGS

3.1 General Analysis 31
3.2 Observations and findings 41
4 CONCLUSIONS &
RECOMMENDATIONS
4.1 Conclusion 42
4.2 Recommendation 42
5 ANNEXURES
5.1 Questionnaire 43
5.2 Bibliography 47
 Chapter 1
Introduction

1.1 Introduction to task

1. I was assigned to Meet with the clients and offer them guidance on which
type of policy they should invest in based on their needs and wants by
analysing their finances and creating a customized policies and payment
method. Generating maximum business for the insurance company and
promoting the company.

2. I was assigned to identify clients financial goals, suggesting the right

insurance products by analysing their finances for example term insurance
endowment policy, unit link insurance plan etc. which would help fulfil their
identified goals.

3. Explaining clients advantages related to investing their capital in life

insurance policy and how they can claim tax deduction under 80c.

4. Explaining clients importance of life insurance.

5. Learned how a client can file complain and address his grievances related to
policy purchased and the company.
 1.2 Introduction to the Sector/Industry

History of insurance

Insurance has existed in some way or form since 3000 BC. Different civilizations,
have been practicing the concept of pooling and sharing the losses suffered by some
members of the community among themselves.

Examples

1. Babylonian Traders : These traders made an agreement with the lenders

that they will pay additional sums to them, to write off their loans, in a
situation where their shipment was stolen or lost at sea. Because of these
agreements, loan taken for the security of vessel or goods shall only be repaid
when the ship has arrived safely at its destination.

2. Chinese Traders : In ancient days Chinese traders used to keep the goods in
different ships or boat so, as to minimize the loss when a ship is capsized at
the sea. They thought that even though one of the many ships has capsized
rest of the goods are safe and they have minimized loss by distributing the
goods in different boats and thereby loss being distributed and reduced.

Lloyds Coffee House : The type of commercial insurance business which

everybody uses in these modern times was originated in Lloyds coffee house in
London. The traders gather at the place and they would agree to share the losses
when the goods which was carried by the ship has faced some maritime perils, such
as robbing of goods by the pirate, goods being spoiled or sinking of ship due to bad
weather.

Amicable Society for a Perpetual Assurance :founded in the year 1706 in London
is considered as one of the first Life insurance company in the world.
History of insurance in India

 The origins of insurance started in India in the years of 1800s, with foreign
insurer agencies starting the business of marine insurance in India.

 The Oriental Life Insurance Co. Ltd was the first life insurance company
in India which was an British company.

 Triton Insurance Co. Ltd. : is the First non-life insurer to be estd. In India

 Bombay Mutual Assurance Society Ltd. Was formed in 1870 in Mumbai is

the first non-life insurer company in India.

 National Insurance Company Ltd. Founded in 1906 is the oldest insurance

company in India which is still in business.

In order to regulate the life insurance business in India Life Insurance companies Act
and Provident Fund Act were passed in 1912.

 This act made it mandatory that the premium rates, periodic valuations of
the companies should be done and certified by an actuary.
 But, the was a disparity and discrimination between Indian companies and
foreign companies.

The insurance Act 1938 was the first legislation enacted to regulate the conduct of
the insurance companies in India. This Act has been amended many time and still
followed. Under this Act the controller of Insurance was appointed by the
Government.
Nationalisation of life insurance sector in India

Natinalisation of the life insurance business in India was done on 1 st september 1956
and the LIC also known as the life insurance Corporation of India (LIC) was formed.
At that time in India there were 170 companies and 75 provident fund societies
doing life insurance business. LIC held the exclusive right to do life insurance
business during the period of 1956 to 1999 in India.

Malhotra Committee and IRDAI:

In order to improve the insurance sector in India in 1993 the Malhotra committee
was set up by the government to explore and recommend what are the things that
can be changed in the insurance sector so as to improve the insurance industry
further. The Malhotra committee submitted their recommendation a year later in the
year 1994. In the year 1997 establishment of insurance regulatory authority
(IRA)was done. After insurance regulatory and development Act was passed in
1999, Insurance regulatory and Development Authority of India (IRDAI) was
established in April 2000 as a statutory regulatory body for both non-life, life and
health insurance industry. In the year 2014 IRDA was renamed as IRDAI.

Some amendments were made in the insurance act in 2015 regarding the formation
of insurance companies in India that In an Indian insurance company and also those
companies in which the aggregate holdings of equity shares by foreign investors,
including portfolio investors, do not exceed forty-nine percent of the paid up equity
capital of such Indian insurance company, which is Indian owned and controlled.
Life insurance industry today

Right now there are 24 life insurance companies working in India their details are
as following

a) LIC of India is the only Public Sector Life Insurance Company operating
in India
b) There are 23 Private sector companies operating in India

c) The postal department, under the Government of India, also sells life
insurance via Postal Life Insurance and the postal department also does not
comes under the regulation of IRDAI

General insurance industry today

Similarly there are 36 general insurance companies working in India their details
are as following

a) National Insurance Company Limited, The New India Assurance Company

Limited, The Oriental Insurance Company Limited, agriculture insurance
company of India, general insurance corporation of India and the United
India Insurance Company Limited are the six public sector general insurance
companies in India.

b) There are 30 general insurance companies in the private sector

How insurance works

Insurance is a financial contract between you (person who was the policy Is
known as the policy holder) and the Insurance company (the insurer).Whenever
there is a loss of an asset due to destruction for a certain undesirable event and if
the person has insured that asset from the insurance company, The insurance
company has an obligation to pay for whatever amount the insurance has insured
the Asset.

The insurance company uses the principle of Losses of few unfortunate

individuals being shared by multiple individuals. For example there is a loss of an
asset for an individual and he has suffered an economic loss. However if we
create a common fund where multiple owners who own same type of asset
contribute a small amount, the amount can be compensated by using the common
fund for the losses suffered by a few unfortunate individuals.

In simple words, whenever there is a certain amount of economic loss Its

consequences can be transferred from one individual to many such individuals by
using the System of insurance.
What will be covered

Insurance pays for only those Losses mentioned in your insurance contract, so it is
very necessary to ask the representatives what are the Different types of losses
covered in the insurance contract and what are not.
An insurance Does not cover the losses of every single thing that you may think
should be covered in your insurance for example the things which are inevitable to
happen those things are not covered in your insurance contract such as if you live in
a flood prone area and your house is flooded with water and you suffer losses due to
that, this type of loss will not be covered because it is an inevitable and will
certainly happen at some point of time and this is not an accident such kind of
situations are not covered in your insurance.
There are 2 types of Insurance

 Life insurance
 General insurance

Life Insurance is a contract between an insurance company and the policy holder.
The insurance company asks to pay a certain amount of premium from the
policyholder for a specific number of years (or till his life is over), and promises
that in return they will pay a sum assured to the nominee upon his death. There are
also some policies which pay a maturity benefit to the policy holder if the
policyholder has survived until the end of the term of the policy. However the
terms may differ from person to person and type of policy.

There are five different types of life insurance policy in India.

1. Term insurance
2. endowment policy
3. whole life insurance
4. money back policy
5. unit linked insurance plan
6. Child plan
7. Retirement plan

Term insurance

A term policy is totally based on pure life cover. In term Life Insurance
a policyholder pays the premium for a specific number of years to the insurance
company and the insurance company in return promise the insured that upon the
untimely death of the policy holder they will pay the sum insured to the members
of the policyholder’s family. But if the policy holder survived during the he is
insured no sum assured and maturity benefits is given to the policy holder (Only
exception is Term plan with return of premium TROP).
Benefits of Term Insurance Plan:
 Term insurance provides higher cover for the lesser premium as
compared to the other type of insurance.
 Term plan with return of premium provide maturity benefits that is you
get the entire premium paid for the period of your policy.

Whole Life Insurance Policy:

Whole life insurance policy as compared to the term insurance policy is for your
whole life and the sum insured is only paid whenever the death of of the
policyholder happens but, the term is not fixed and premium is also high because
the policy cover is for your whole life And it is design such that you will always
get the death benefit promised in your policy.

Benefits of Whole Life Insurance Policy:

 This type of policy is best for the person who is main earner of the
family and wishes to protect his family from any kind of financial
problems after his or her premature death. The sum assured and the
death benefit is paid to the dependent upon the death of the
policyholder.
 The policy can also be re-invested letting the cash amount grow or we
can also remit a part of the cash value during our lifetime. You can also
take a loan against policy.
Endowment Policies:

In Endowment plans you get two types of benefits in one policy death and survival
benefits. If the policyholder is paying premiums on schedule for a specific number
of years, insurers will then promise to pay the sum which was assured to the
nominee in situation where there is untimely death of the policyholder. however,
he/she receives will receive full lump sum payout plus the maturity benefit if the
policyholder survive the term of insurance.

Benefit of Endowment Policies:

 Endowment policies have a saving component attached to it. You can

use the policy to take a loan against the policy during the times of
financial difficulties.

Moneyback policy:

Moneyback policies are one of most sought variant of the endowment policies in
India. An advantage of this policy is that you receive a portion of the sum assured
at a regular interval during the tenure of the policy. The amount remaining will be
paid along with an bonus at maturity of the term. This type of benefit is not present
in any other life insurance policy. However, if there is premature death of the
policyholder during the tenure of the policy then the entire sum that was assured
will be paid to the nominee, along with the survival benefits that the policyholder
has already received.

Benefit of moneyback policies:

 One of the biggest advantage of the moneyback policy is that you do

not have to wait for the tenure of the policy to end to receive the
benefits you get some amount of sum assured at regular intervals.
Unit Linked Insurance Plans (ULIPs): Unit linked insurance plan, is also known
as ULIP. Unit linked Insurance plan is a combination of insurance as well as
investment. The investments are done by a fund manager who is assigned by the
insurance company. Investments are done in debt and equity, you can even specify
in which type of asset or ULIP fund you want to invest in. even though you are not
promised a guaranteed return, a lump sum amount is paid to the policyholder at the
time of maturity and if there is a premature death of the policyholder, specified
death benefit will be given to the nominee.

Benefit of ULIP:

 ULIP provides a greater return as compared to the other traditional

policy and flexibility in investment.
 Even though there is no guaranteed return specified death benefits are
provided to the nominee.

Child plan: This type of insurance policy is used to build up capital for major
events in the future that arrive in a child’s life such as, higher education, studying
abroad, marriage, etc. Most insurance companies make an annual payment or one-
time payout after the child (insured) reaches 18 years of age.

Instances where the parent of the child passes away and the policy, the term is not
completed, payment of the policy is made to the child or his or her family member.
In some cases where there is the death of the policyholder, life insurance
companies waive off the premium, and payment is made after the maturity period.
Retirement plan: This type of insurance policy is used to build up a substantial
amount of capital for the time of your retirement so that you can live your
retirement in peace.

Annual payments or one-time payout options are given by the insurance company
to the policyholder after the age of 60 years. In a situation where there is the death
of the policyholder, payment is made to the nominee, either based on coverage or
105 percent of the premium is paid.
General Insurance

General insurance acts as a contract between policyholder and insurer. In this type
of insurance the policyholder is offered financial compensation on any type loss
other than loss of life by the general insurance company. General insurance can
insures anything apart from life. A general insurance helps us by compensating for
the financial loss occurred due to liabilities related to house, bike, car, travel,
health, etc. The general insurance company promises to pay the policyholder a sum
assured to cover damage which has happened to your vehicle (car, bike, and
scooter), treatment for medical issues to cure health problems, loss due to theft of
property or fire, or even financial problems arising during travel.

In Simple words, a policy holder can use a general insurance policy to cover the
financial losses and give protection to the policyholder against losses due to to the,
damage, theft, fire, flood, natural disaster. General insurance is different from life
insurance.

There are 5 types of general insurance they are:-

1. Health Insurance
2. Motor Insurance
3. Travel Insurance
4. Home Insurance
5. Fire Insurance
Health Insurance

It is an essential tool for reducing risk and impact of the threat due to health issues
and emergencies, health insurance policy helps in preventing the out-of-pocket
expense that might happen during medical emergency. A general health insurance
plan pays for your hospitalization expenses upto the sum insured in your policy
because it is an indemnity plan. A single individual can use this service or there is
a family floater plan which covers the whole family upto the sum insured until the
end of the insurance period.

A general insurance usually pays or reimburses the amount that you pay towards
yours medical treatment, injury or illness.

Motor insurance

Motor insurance policy usually cover damages related to, accidents, theft, fire, etc.
against your vehicle. Motor insurance is of two types comprehensive and third-
party. A comprehensive motor insurance policy provides your vehicle cover
against damages caused due to flood, fire, accident, theft, etc. Along with this
comprehensive motor insurance provide all the benefits of the third party motor
insurance.

Whereas, whenever a third party vehicle is damaged by your vehicle the damages
done to the third party vehicle is taken care of by third party insurance. This type
of insurance does not take care of damages done to your vehicle during this type of
incident. The Motor Vehicle Act 1988 has made it compulsory for the vehicle to
have a third party insurance.
Travel insurance

During the time of international travel or domestic travel there are many a time
when one can experience contingencies like delay in flight, losing your baggage or
passport, medical emergencies etc. are taken care by travel insurance. It will
compensate of pay for the financial liabilities that arise during the term period.

Travel Insurance is of 2 types .

Single Trip Policy

 Provides cover for a single trip that lasts under 180 days.

Annual Multi Trip

 Provides cover for multiple trips you take during a year.

Home insurance

Home insurance policy is used to secure the house and the contents belonging in
the house from the damages that can be suffered because of a man-made or natural
disasters, fire, theft, flood etc. Many home insurance policies are also providing
coverage for temporary living expenses in such cases where you are living on rent,
because your home undergoing renovation.
1.3 Introduction to the Organisation

Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint venture
company, formed by Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA). Tata AIA
Life combines Tata’s pre-eminent leadership position in India and AIA’s presence
as the largest, independent listed pan-Asian life insurance group in the world
spanning 18 markets in the Asia Pacific region.

Tata AIA Life has written retail new business weighted premium of Rs. 2,692
crore for the financial year 2019-20. For the same period, the individual death
claims settlement ratio was 99.06%. One of the fastest growing companies in the
Life Insurance sector,

Tata AIA Life is ranked at no. 5, based on individual weighted new business
premium.
Mission
 Tata AIA mission is to provide the best and simplest life as well as health
insurance solutions.

Vision
 To be the pre-eminent protection provider - enabling dreams, inspiring
healthier and happier lives

Values

Consumer Obsession
 Consumer is paramount in everything they do.
 Innovate solutions and services to delight their customers.
 Transparently deliver on promise.

Passion for Excellence

 Set and achieve the highest standards
 They believe in doing right things the right way
 Take accountability and drive results
 Pioneer Change

People - our Core

 Create and take distinctive opportunities for development
 Demonstrate courageous leadership at all times
 Exceptionally reward outstanding performance and right behaviour
Claim settlement ratio

Tata AIA has highest claim settlement ratio (CSR) of 99.06%. Claim settlement
ratio is a great indicator to compare the life insurance companies as higher the
claim settlement ratio, greater the confidence consumers will have towards the life
insurance company.

CSR shows the percentage of the claims that the policyholders has made during the
financial year has been paid by the insurer . In simple words CSR is defined as the
percentage of insurance claims settled by the insurer as compared to the no. of
insurance claims received.

Claim settlement ratio is also a good indicator of how company implements its
overall risk management ability and uses necessary technology and process to
verify the applications can be approved or not.

CSR are calculated using the following formula

Claim settlement ratio = (Number of claims settled/Number of claims received) x 100

Higher death claim settlement ratio indicates greater chance of claim being settled
by the insurer.

Awards

Tata AIA is the winner AON best employer awards for four years in a row.
 Introduction to the project

Life Insurance sector has 24 life insurance companies out of which LIC is the only
public sector company and the rest are the private sector companies. We want to
analyse whether the people's perception related to the private sector companies has
changed or the majority of the people still see LIC as the preferred company to buy
insurance.

Consumers usually buy a life insurance policy as a protection plan for future
unforeseen circumstances and to have peace of mind. But, some consumers also
see insurance as an investment avenue as well as to gain tax benefits under 80C.
We want to analyse whether consumers buy life insurance policies as an
investment or not.

COVID-19, has affected many households and many people have died due to the
coronavirus infection. People are restricted in their houses due to lockdown and
many have faced problems due to it, some have lost their jobs, salaries have been
reduced, spending has increased, etc. we are analysing whether people still see
insurance as an investment avenue in these turbulent times.
 Chapter 2
Summer internship task details

Literature review

 Amish Patel(2019)
In this literature titled” A Comparative Study of Public and Private Sector
Life Insurance Companies in India: Post Liberalization Span” we will find
how insurance industry was nationalized and how it penetrated the Indian
market, how the population of our country kept on increasing and how the
penetration of insurance kept on decreasing. This literature compare LIC and
all the other private sector companies, how after nationalization private
sector kept on increasing their market share and how LIC kept on losing its
dominance over the Life insurance sector.it explains the breakup of life
insurance policies issued to insurer between LIC and the private sector and
explains how the premium collected by the life insurance companies
increased year on year.

 Tripathi. S (2009) in this dissertation titled “A comparative analysis of LIC

and private life insurance companies” compares how LIC is performing as
compared to the private life insurance companies in India. He has done
comparison on the basis of productivity, growth of the company, size and
how their mechanism for grievance handling. Explains how LIC is getting
direct competition from private insurance companies. LIC has been a
dominating the sector even after privatization and at present there is an
abundance scope for expansion in life insurance sector. He explains how
huge LIC’s customer base is. He concluded by saying that LIC is the leading
brand in the Life insurance sector but private sector companies are not far
behind and they are competing with LIC by using the approach of aggressive
marketing.
2.2 Objective of the project

The research objectives are-

 To study whether consumers prefer life insurance as an investment avenue

 To study whether consumers prefer public or private sector insurance
company
 To study change in consumers investment behavior in COVID-19
environment.

2.3 Research Methodology

Phase1 Phase2
Research Design Exploratory Research Descriptive Research

Data Collection Source Secondary Sources Primary Sources

Data Collection Quantitative/Qualitative

Method/Research
Method
Accessing basic Qualitative: Depth
information from Interview Method
Data Collection selected websites
Technique/Tool Quantitative: Survey
Method(Questionnaire)

Analysis Tool used Nil Data analysis and

interpretation
Sampling Framework:

1. Sample unit:
 Qualitative: Sample unit consist of different household having and
not having interest in Life insurance.
2. Sample size: sample size of 63 different household.
3. Sample design: The sample design would include convenience sampling.

Area of Study: A survey 63 different households in Mumbai which will be taken

up for research.

Analysis Techniques: Analysis is done through data interpretation technique.

2.4 Limitations

 People might be reluctant to provide complete information about them

which may have affect in validity of the responses
 Data collection is limited to Mumbai city and city like Mumbai has a
diverse population, whereas the sample size collected was very small as
compared to population of Mumbai which might result in biased and
inappropriate conclusions.
 Time Constraint.
 Area covered while collecting response was small.
 Sample size of 63 is small and might not give accurate view.
 Time period of research was restricted.
 Chapter 3

Analysis and findings

Data analysis and interpretation

Collection of data has been done through the use of questionnaire. And analysis
has been done through the use of tables and graph along with relevant description.
Logical conclusions are drawn based on the findings through the use of raw data.

3.1 General analysis

Q.1. Age of respondents?

Age Number Percentage

Below 25 17 27%
25 to 40 28 44.4%
40 to 60 16 25.4%
Above 60 2 3.2%
Total 63

From the above graphical representation we can say that greater part of the
respondents are between the age group of 25 to 40 with 44.4% and second highest
group with the age group of below 25 with 27% and the third highest age group is
between 40 to 60 with 25.4% and the lowest is the age group of above 60 with
3.2%.
Q.2. Profession/ Occupation of the respondents?

Occupation/ Profession Number percentage

Public sector employee 8 12.70%
Private sector employee 25 39.68%
Businessman 10 15.87%
Retired 4 6.35%
Others 16 25.40%

From the above table representation we can say that majority of the respondents
belong to the private sector employee with 39.68% and second highest
respondents belong to others category with 25.40%.

Q.3. Monthly income of the respondents

Monthly income Number Percentage

Below 30000 25 39.7%
30,000 - 60,000 20 31.7%
60,000 - 1 Lakh 5 7.9%
1 Lakh - 2 Lakhs 8 12.7%
Above 2 Lakhs 5 7.9%

From the above table representation we can say that majority of the respondents
have a monthly income of below 30000 with 39.7% and second highest
respondents have a monthly income between 30000 to 60000 with 31.7%.
Q.4. Do people consider insurance as an investment avenue?

Which investment avenue do Percentage

you prefer
Fixed Deposits 20 31.7%
Stock Market 12 19.0%
Insurance 6 9.5%
Mutual Funds 11 17.5%
Real estate 7 11.1%
Gold and Silver 4 6.3%
Post-Office Schemes 3 4.8%
Total 63

Investment preference
25

20

15

10

It is quite clear to see from above graphical representation that respondents don’t
consider insurance as an investment avenue they prefer Bank FDs, stock market,
mutual funds and real estate as better investment than insurance sector.
Q.5. Percentage of Respondents who own life insurance policy and there
preference over public sector company and private sector company?

1)

2)

From above graphical representation we can conclude that 79% of the respondents
out of 63 own Life insurance policy and their preferred company is public sector
company (LIC).
Q.6. Type of policy they own and their reason for buying the policy?

1)

2)

Respondents prefer term insurance and endowment policy as the most preferred
policies and majority of the respondents buy the life insurance policy in order to
avail all the benefits we get after purchasing life insurance their second priority is
safety and then investment and last is tax benefits.
Q.7. How much is a consumer willing to pay as a premium for insurance
policy?

From above pie chart we can conclude that 46% consumers prefer to pay an
amount of up to rs10000, and 21% of consumers prefer to pay rs10000 to 20000.
Q.7. To find out effect of Covid-19 on consumers?

From the above 3 graphical representation we can conclude that 63% of the
household out of 63 household surveyed have been effected by the outbreak of
COVID-19 in our country and 52% of them have seen their monthly income
reduced and 46% of the respondents have seen their spending’s being reduced
due to lockdown .
Q.8. Are they investing money in any investment avenues in these challenging
times and what are their preference?

1)

2)

From the above to graph we can conclude that more than half the no. of
respondents are not willing to invest the money and those who are investing their
investment preference is stock market, FDs, mutual funds but not insurance.
Q.9. To find out whether consumers are willing to buy life insurance policies
and the preference of those who are willing to buy life insurance policy?

1)

From the above 2 graphical representation we can say that 65% of the consumers
are not willing to buy life insurance policy and those who are willing to buy prefer
term insurance policy as compared to other insurance policies as they value safety
more during these torrid times.
Q.10. Why is consumer not investing in insurance policy?

From above graphical representation we conclude that main reason for not
investing in insurance policy is households facing financial issues due to COVID-
19 environment and other is they prefer other investment avenues.
3.2 Observations and findings

Following are some of the points that were observed during the research

1. Consumers still prefer bank FD as a major investment avenue and then the
stock market and mutual funds insurance is a preferred investment avenue
only for few.
2. The public sector is still preferred over the private sector in the life insurance
industry.
3. The term insurance policy is the most preferred policy of the consumers and
then the endowment policy.
4. Consumers buy an insurance policy mainly because it gives benefits of
safety, investment as well as a tax benefit.
5. Consumers are not willing to spend much amount on the insurance premium
up to 10000rs is the preferred amount and the next preferred amount is
between 10000 to 20000rs.
6. Many households have been affected due to the COVID-19 pandemic, many
households have seen their monthly income reduced and increased
household spending due to the COVID-19 pandemic.
7. Not many consumers are investing their many in these torrid times.
8. Those consumers who are investing prefer the stock market as their ideal
investment place.
9. Many consumers are also not willing to invest in life insurance as many face
financial issues due to COVID-19 and many prefer other investment
avenues.
10. Those who are willing to buy life insurance policies are mostly parking their
many in the term insurance policy.
 Chapter-4

Conclusions & recommendations

4.1 Conclusion

From the above research we can conclude that what is the perception of the
consumer related Life insurance sector, what he feels about the insurance sector as
an investment avenue and how much public sector dominates the life insurance
sector. What are the factors that influence a consumer before buying an insurance
policy? We can also conclude that COVID-19 had an adverse effect in many of
the households and many households have seen their income decrease also
different sectors are also not spared due to the torrid effect of COVID-19 in India,
and insurance sector is also one of them people are not investing their money for
buying policy due to financial problem and those who do care for their safety and
majorly by term insurance.

4.2 Recommendations

Following are the recommendation found after the research:

1. Public Sector Company is dominating the life insurance sector, private

sector companies should reach out to the consumers faster, with a
competitive or better plan than LIC which is the only public sector company
in the Life insurance sector.
2. Private sector companies should recruit more agents so as to increase their
reach, also train the agents and support them financially so that the agent
will work towards the betterment of himself as well as the company.
3. A highly skilled individual infuses confidence in the customer and the
customer will believe that he will be satisfied with the service provided by
the company.
4. Due to the pandemic and in fear of the safety of their loved ones consumers
are focusing on buying term insurance, Life insurance companies should
focus on selling term insurance and improve the benefits provided in term
insurance plan so that consumers will buy their products.
 Chapter-5

ANNEXURES

5.1 Questionnaire

Q.1) What is your name?

Q.2) Age?
 Below 25
 25 to 40
 40 to 60
 Above 60

Q.3) Occupation/ Profession ?

 Public sector employee
 Private sector employee
 Businessman
 Retired
 Others

Q.4) Monthly income ?

 Below 30000
 30,000 - 60,000
 60,000 - 1 Lakh
 1 Lakh - 2 Lakhs
 Above 2 Lakhs

Q.5) Which investment avenue do you prefer most?

 Fixed Deposits
 Stock Market
 Insurance
 Mutual Funds
 Real estate
 Gold and Silver
 Post-Office Schemes
 Other:
Q.6) Do you own a life insurance policy ?
 Yes
 No

Q.7) Which company do you prefer to buy a life insurance policy from?
 Public sector company (LIC)
 Private sector company (HDFC, SBI, ICICI, TATA, etc.) )

Q.8) Which type of Life insurance policy do you own?

 Endowment policy
 Term insurance
 Money-back policy
 Unit Linked Insurance Plans (ULIPs)
 Whole Life Insurance Policy
 Child plan
 Retirement plan
 Not Applicable

Q.9) Reason for buying the policy?

 Safety
 Investment
 Tax savings
 All of the above
 Not applicable

Q.10) If you were to get insurance, how much money would you be willing to pay
as an insurance premium?
 Up to 10000
 10000 to 20000
 20000 to 35000
 35000 to 50000
 50000 and above
Q.11) Has COVID-19 affected your household anyway?
 Yes
 No

Q.12) Did your monthly income gets affected due to COVID-19?

 Yes
 No

Q.13) Has your spending increased or decreased due to the COVID-19

environment?
 Has increased
 Has decreased
 Has remained the same

Q.14) Have you invested your money somewhere during the lockdown period?
 Yes
 No

Q.15) If yes, please specify?

 Fixed Deposits
 Stock Markets
 Insurance
 Mutual Funds
 Gold and Silver
 Real estate
 Post office schemes
 Others
 Did not invest

Q.16) Would you be willing to invest in a Life insurance policy during the
COVID-19 environment?
 Yes
 No
Q.17) If yes, which type of Life insurance policy do you prefer?
 Endowment policy
 Term insurance
 Money-back policy
 Unit Linked Insurance Plans (ULIPs)
 Whole Life Insurance Policy
 Child plan
 Retirement plan
 Not applicable

Q.18) If not, what is the reason for not wanting insurance?

 Financial Issues
 Not possible due to Covid-19 environment
 Don’t think insurance is necessary
 Prefer other investment avenues such as stock market, FD’s, etc.
 Not Applicable
 Already have insurance
 Other:
5.2. Bibliography

https://www.policybazaar.com/general-insurance/

https://www.bloombergquint.com/business/double-digit-premium-growth-for-life-
insurers-continues-in-december

https://www.ibef.org/home/search

https://www.tataaia.com/