INTRODUCTION
Introduction of Life Insurance
Life insurance is designed to protect life and to product family against financial uncertainties that may result due to unfortunate demise or illness. It can also view as a comprehensive financial instrument, as a part of the financial planning offering savings & investment facilities along with cover against financial loss. By choosing the right policy as per the needs. i.e. customized solutions, you will be able to plan for a secure future for yourself and your loved ones.
We all have different financial needs and objectives. But life insurance plays a fundamental role in most of our plans for financial security. That's because of the variety of life insurance plans available and the many ways they can be customized to meet unique needs at different periods of your life.
Statement of the problem
Insurance sector is a booming sector and the penetration in India is quiet low. So, all the private players are trying to increase the market share in the public. This study also involves creating awareness among the urban and rural consumer about the insurance sector and also the various policies involving various premium rates. Since the penetration of private companies and policies is low among the consumer, it is necessary to create awareness about life insurance policies and to know the satisfaction level among consumer. Hence the present studies entitled awareness about it among the consumer.
1.1 Objectives of the Study
v To create an awareness about insurance company and policies.
v To identify the potential policy holders among end users and to create a relationship between the companies and potential customers.
v To find out the customer satisfaction level among the go with their respecting insurance companies in which they hold the polices.
v To find out the awareness of people about insurance policies.
v To offer suggestions based on findings.
Insurance Industry
The business of insurance started with marine business. Traders, who used to gather in the Lloyd’s coffee house in London, agreed to share the losses to their goods while being carried by ships. The losses used to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ship. The first insurance policy was issued in 1583 in England. In India, insurance began in 1870 with life insurance being transacted by an English company, the European and the Albert. The first Indian insurance company was the Bombay Mutual Assurance Society Ltd, formed in 1870. This was followed by the Oriental Life Assurance Co. in 1874, the Bharat in 1896 and the Empire of India in 1897.
Later, the Hindustan Cooperative was formed in Calcutta, the United India in Madras, the Bombay life in Bombay, the National in Calcutta, the New India in Bombay, the Jupiter in Bombay and the Lakshmi in New Delhi. These were all Indian companies, started as a result of the swadeshi movement in the early 1900s. By the year 1956, when the life insurance was nationalized and the Life Insurance Corporation of India (LIC) was formed on 1st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India. After the amendments to the relevant laws in 1999, the L.I.C. did not have the exclusive privilege of doing life insurance business in India. By 31.3.2002, eleven new insurers had been registered and has begun to transact life insurance business in India.
Need of Insurance
Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc, are perils. If such perils can cause damage to the asset, we say that the asset is exposed to that risk. Perils are the events. Risks are the consequential losses or damages. The risk to an owner of a building, because of the peril of an earthquake, may be a few lakhs or a few crores of rupees, depending on the cost of the building and the contents in it.
The risk only means that there is a possibility of loss or damage. The damage may or may not happen. Insurance is done against the contingency that it may happen. There has to be an uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. In the case of a human being, death is certain, but the time of death is uncertain. In the case of a person who is terminally ill, the time of death is not certain, though not exactly known. He cannot be insured.
Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The peril can sometimes be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. It only compensates the losses – and that too, not fully.
Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of non-economic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovate and creative abilities, etc.
Types of insurance
v Automobile insurance
v Aviation insurance
v Boiler insurance
v Builder’s risk insurance
v Casualty insurance
v Disability insurance
v Liability insurance
v Marine cargo insurance
v Purchase insurance
v Credit insurance
v Crime insurance
v Crop insurance
v Directors and officers liability insurance
v Property insurance
v Terrorism insurance
v Title insurance
v Travel insurance
v Workers’ compensation
v Life insurance
v Total permanent disability insurance
v Locked funds insurance
v Marine insurance
v Financial loss insurance
v Health insurance
v Professional indemnity insurance
v Environmental liability insurance
v Pet insurance
v Political risk insurance
Profile of HDFC STANDARD LIFE INSURANCE Co.Ltd
HDFC Standard Life Insurance Company Ltd. is one of India's leading private insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India's leading housing finance institution and a Group Company of the Standard Life, UK.
HDFC Standard Life is one of the leading life insurance companies having a track record of declaring bonuses every year since inception. HDFC as on March 31, 2007 holds 81.9 per cent of equity in the joint venture.
STRENGTHS OF HDFC STANDARD LIFE INSURANCE
v FINANCIAL EXPERTISE
HDFC Standard Life Insurance has the financial expertise required to manage long-term investments safely and efficiently.
v RANGE OF SOLUTIONS
HDFC Standard Life Insurance has a range of individual and group solutions, which can be easily customized to specific needs. HDFC Standard Life Insurance’s group solutions have been designed to offer a complete flexibility combined with a low charging structure to people.
v TRACK RECORD
HDFC Standard Life Insurance’s cumulative premium income, including the first year premiums and renewal premiums is Rs. 1532.21 Crores Apr-Mar 2005 - 06.
It has covered over 1.6 million individuals out of which over 5, 00,000 lives have been covered through our group business tie-ups.
VISION
The most successful and admired life insurance company, which mean that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry.
'The most obvious choice for all'
VALUES:
Values that HDFC Standard Life Insurance observes are
v Integrity
v Innovation
v Customer centric
v People Care “One for all and all for one”
v Team work
v Joy and Simplicity
Major competitors of HDFC STANDARD LIFE
v Life Insurance Corporation of India
v ICICI Prudential Life Insurance
v Bajaj Allianz Life
v SBI Life Insurance
PRODUCT PROFILE OF HDFC STANDARD LIFE
HDFC Standard Life Insurance offers various insurance solutions to meet every ones need. HDFC Standard Life Insurance offers various insurance solutions to individuals as well as to companies looking to provide benefits to their employees.
The products that are offered by are mainly classified as follows,
Ø Individual Products.
Ø Group Products.
INDIVIDUAL PRODUCTS
1. Production plan
(a)Term assurance plan
A pure risk cover plan, which gives you protection against the uncertainties of life. The Term Assurance Plan is an insurance policy that is designed to help secure your family's financial needs.
(b) Loan cover term assurance plan
An ideal way to cover your home loan or other loan liabilities. This Plan provides a lump sum on the unfortunate death of the life assured within the policy term.
2. Investment plan
(a)Single premium whole of life plan
Our Single Premium Whole of Life plan is well suited to meet your long term investment needs. We provide you with attractive long term returns through regular bonuses.
3. Pension plans
(a)Personal pension plan
It provides a post retirement income in your golden years and gives you the flexibility to plan your retirement date and Gives you tax benefits on your premiums. The plan receives simple Reversionary Bonuses, which are usually added annually. At the end of the term an additional Terminal Bonus may be paid depending on the performance of the underlying investment.
(b) Unit linked pension
It's an outstanding investment opportunity by providing a choice of thoroughly researched and selected investments and post retirement income for life and also Flexibility to plan your retirement date.
(c)Unit linked pension plus
It's an outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. Regular Loyalty Units to boost your fund value every year and post retirement income for life and also Flexibility to plan your retirement date.
4. Savings plan
(a)Endowment assurance plan
It's an ideal way to secure your long-term financial goals. Valuable protection to your family by way of lump sum payment in case of your unfortunate demise within policy term and Lump sum payment on survival up to maturity date
(b) Unit linked Endowment
It's an outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. Valuable protection to your family in case you are not around and Flexible benefit combinations and payment options and also flexible additional benefit options such as critical illness cover.
(c) Unit linked Endowment plus
It's an outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. Regular Loyalty Units to boost your fund value every year. Valuable protection to your family in case you are not around and Flexible benefit combinations and payment options and also flexible additional benefit options such as critical illness cover.
(d) Money back plan
A proportion of the basic sum Assured as Cash lump sums at regular 5-year intervals within the policy term an ideal way to secure your long- term as well as short-term financial goals and a lump sum payment on survival up to maturity date. Valuable protection to your family by way of lump sum payment in case of your unfortunate death within the policy term.
(e) Children's plan
The Children's Plan is designed to secure your child's future by giving your child a guaranteed lump sum, on maturity or in case of your unfortunate demise, early in the policy term. The premiums, paid by you, are invested by the company to give you good long-term returns.
(f) Unit linked young star
It's an outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. Valuable protection to your child in case you are not around. Flexible benefit combinations and payment options and also flexible additional benefit options such as critical illness.
(g)Unit linked young star plus
It's an outstanding investment opportunity by providing a choice of thoroughly researched and selected investments. Regular Loyalty Units to boost your fund value every year and Valuable protection to your child in case you are not around and Flexible benefit combinations and payment options and also flexible additional benefit options such as critical illness cover.
GROUP PRODUCTS
(1)GROUP TERM INSURANCE PLAN
The Group Term Insurance (GTI) plan meets this need and serves as an ideal way for companies to reinforce their bond with their employees. The sort of needs, you, as an employer need to cater to could be in form of:
v Employee benefits
v Cover for housing or vehicle loans given by you to your employees
v A GTI cover for future service gratuity liability to be taken along with the Group Unit Linked Plan
v One year renewable term insurance plan.
v One master policy issued covering all members of the group.
(2) GROUP VARIABLE TERM INSURANCE
The Group Variable Term Insurance is a tailor made insurance policy for third party institutions. HDFC Standard Life Insurance Company will offer life insurance to customer’s of one or more of the third party’s specific products in order that in the event of their death, there will be a lump sum available.
The Group Variable Term Insurance:
v On death, will pay a lump sum known as a sum assured. The sum assured varies over time in order that the customer receives the cover that they need.
v Is a group policy.
v Has no lengthy underwriting procedure.
v Is simple to administer.
INSURANCE IN INDIA
About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies