A

PROJECT REPORT ON
CONSUMR PERCEPTAION AND SATISFACTION TOWARDS
UNIT LINK INSURANCE PLANS OF HDFC STANDARD LIFE
INSURANCE
Partial fulfillment of the requirements of the two-year full time course in Master of Business
Administration

Submitted By:
Anurag Vyas

Submitted To:
Roshita Jain

MBA Part-II

H.O.D (M.B.A)

DECLARATION
I here by declare that the work incorporated in the present research CONSUMER
PERCEPTION AND SATISFACTION TOWARDS UNIT LINK INSURANCE PLANS
OF HDFC STANDARD LIFE is my own work and is original.
This work (in part or in full) has not been submitted to any university for the award of a
degree or diploma

Anurag Vyas

ACKNOWLEDGEMENT

I acknowledge my gratitude with sense of reverence to the people who have whole-heartedly
helped in the course of the project. Their valuable guidance and wise direction have enabled
me to complete this project in systematic and smooth manner.
I am indebted to Mr. Atul Menaria (Sales Manager), for giving me this opportunity to learn
with this esteemed organization. I would also like to thank my mentor at the organization.
Mr.Praveen Jha (Branch manager) For providing me valuable insights towards functioning of
the entire project work and his indefatigable cooperation at every possible step of my
endeavor.
I take this opportunity to thank the entire staff of HDFC Std. Life Insurance company,
Udaipur for their continuous support and encouragement to make this project a success.
Last but not the least, I express my sincere thanks to all those people, known and unknown,
who have directly or indirectly contributed in making this project a success.

Anurag Vyas

PREFACE

The objective behind MBA programme is to provide the practical aspect of organizations
working & environment. This study helps to visualize & realize about the congruency
between the theoretical learning in the premises of college & the actual practices of
management & working behind followed in the organization
My project at insurance sector in HDFC STANDARD LIFE INSURANCE is a complete
experience in itself, which has provided me with understanding, which has become an
inseparable part of my knowledge of management being learned in MBA programme.
This research and development project is concerned with Critical Evaluation of how unit
linked insurance plans works, study of different ulip monitors, finding satisfaction level of
customers and fund performance of HDFCSL. The work done by me on the topic, finding
drawn out are presented in this project report along with suggestion for improvement.

CONTENT
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CONTENT
Declaration
Acknowledgement
Preface
Executive Summary
Industry Profile
Major player in india
Company Profile
Glossary
Product Profile
Research Methodology
Research Objective
Data Analysis and Interpretations
Conclusion
suggestion
Bibliography
Abbreviations

PAGE NO.
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3
4
6-10
11-13
14-21
22-26
27-37
38-50
51-53
54
55-66
67
68
69
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Executive Summary
INSURANCE - AN INTRODUCTION
Insurance is a contract between two parties i.e. insurance & insured about a probable
loss in exchange of a certain amount i.e. premium. If that event will occur then, insurer will
protect him against that loss in monetary terms as shown in Diagram 2.1

Insured

Premium

Insurer

Risk
Protection

Yes

Remuneration

No

Diagram 2.1

Insurance may be described in broad sense, as a method of sharing financial losses of

a 'few' from a common fund formed out of contribution of the many who are equally exposed
to the same loss, it is a systematic spreading the losses of an individual over a group of
individuals.

Meaning Of Insurance
Insurance is a social device providing financial compensation for the effects of
misfortune, the payment being made from the accumulated contributions of all parties
participating in the scheme.

Definition Of Some Important Terms

INSURED-Insured is a person who seeks protection against a risk.
INSURER-Insurer is a person who provides protection to the insured.
PREMIUM-The consideration that insured pay to insurer is called premium.
INSURANCE POLICY-The document containing terms and conditions of contract are called
policy.

How Insurance Works

People facing common risks come together and make their small contributions to a
common fund. The contribution to be made by each person is determined on the assumption
that while it may not be possible to tell beforehand, which person will suffer, it is possible to
tell, on the basis of past experiences, how many persons, on an average may suffer losses.

INSURANCE OVERVIEW
Size
US$30 billion industry in India

o Life Insurance - US$25 billion industry with US$14 billion accounting for First Year
Premium (inclusive of Single Premium)
o Non-Life insurance - US$4.8 billion industry; Motor and Health segments account for
54% of total business

Structure
Indian Insurance market was opened to private & foreign investment in 1999-2000
The Indian Insurance industry consists of a total of 31 players
o Life: 1 Public sector player; 15 private players
o Non-Life: 6 public sector players; 9 private players
Major international players like AIG, Aviva, MetLife, New York Life, Prudential, Allianz,
Sun Life, Standard Life and Lombard are already present with minority stakes in joint
ventures with Indian companies for both Life and Non-life segments
Life Insurance market is still dominated by Life Insurance Corporation (LIC) - a public
sector company which has 75% share of first year premium in 2006-07
In Non-life, private sector companies (almost all are joint ventures with foreign insurers)
accounted for 34% of the market in 2006-07

Life Insurance: Major Players

First

year

Premium

(2006-07, US$ million)

Public Sector

LIC

13642

Private Sector
ICICI Prudential

1281

Bajaj Allianz

1041

Birla Sun Life

214

Non-life Insurance: Major Players

Name of Company

First

year

Premium

(2006-07, US$ million)

Public Sector
New India Assurance

1222

National Insurance

9229

Oriental Insurance

960
9

United India Insurance

855

Private Sector

ICICI Lombard

732

Opportunity
Many international players

Non-life penetration is low in IndiaHave entered

the Indian

a potential growth area of the

Insurance market

future

Outlook
Indian Insurance market is expected to be around US$40 billion by 2010
o

Expected CAGR of over 30% p.a.

Potential
Largely untapped market: 17% of the worlds population
o Nearly 80% of the Indian population is without Life, Health and Non-life insurance
o Life insurance penetration is low at 4.1% in 2006-07

10

INSURANCE SECTOR IN INDIA

A brief history of the Insurance sector
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 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 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 nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs. 5 crore from the Government of India.

Insurance sector reforms:

In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor
R.N. Malhotra was formed to evaluate the Indian insurance industry and recommend its
future direction.
In 1994, the committee submitted the report and some of the key recommendations
included:

11

1) Structure

Government stake in the insurance Companies to be brought down to 50%.

Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.

All the insurance companies should be given greater freedom to operate.

2) Competition

Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter
the industry.

No Company should deal in both Life and General Insurance through a single entity.

Foreign companies may be allowed to enter the industry in collaboration with the
domestic companies.

Postal Life Insurance should be allowed to operate in the rural market.

Only One State Level Life Insurance Company should be allowed to operate in each state.

3) Regulatory Body

The Insurance Act should be changed.

An Insurance Regulatory body should be set up.

Controller of Insurance (Currently a part from the Finance Ministry) should be made
independent.

4) Investments

12

Mandatory Investments of LIC Life Fund in government securities to be reduced from

75% to 50%.

GIC and its subsidiaries are not to hold more than 5% in any company (There current
holdings to be brought down to this level over a period of time).

5) Customer Service

LIC should pay interest on delays in payments beyond 30 days.

Insurance companies must be encouraged to set up unit linked pension plans.

Computerisation of operations and updating of technology to be carried out in the

insurance industry The committee emphasized that in order to improve the customer
services and increase the coverage of the insurance industry should be opened up to
competition.

Hence, it was decided to allow competition in a limited way by stipulating the minimum
capital requirement of Rs.100 crores. C6005tteproposed setting up an independent
regulatory body.

Major Policy Changes

Insurance sector has been opened up for competition from Indian private insurance
companies with the enactment of Insurance Regulatory and Development Authority Act, 1999
(IRDA Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory and
Development Authority (IRDA) was established on 19th April 2000 to protect the interests of
holder of insurance policy and to regulate, promote and ensure orderly growth of the
insurance industry. IRDA Act 1999 paved the way for the entry of private players into the
insurance market which was hitherto the exclusive privilege of public sector.

13

BRIEF INTRODUCTION OF MAJOR PLIAYER OF INSURANCE COMPANIES IN

INDIA
1. LIFE INSURANCE CORPORATION
Life Insurance Corporation (LIC) came into existence on 1st September 1956 through
the amalgamation of 154 Indian insurance companies, 16 non-Indian companies and 75
provident. The amalgamation was achieved with the help of Life Insurance Act passed by the
Parliament in the same year. The LIC was created with the goal of reaching all the insurable
people in the country and providing them financial coverage at a reasonable price.
At present, online premium collection facility is being offered in selected cities as LIC
has tied up with some banks and service providers. For providing customer satisfaction the
organization has introduced various schemes such as ECS, ATM premium payment facility,
IVRS, Info centers which are set up in various cities including Mumbai, Bangalore, Chennai,
Kolkata, New Delhi, Pune and many more. It has also come up with SATELLITE
SAMPARK offices providing easy access to policyholders. LIC has crossed many milestones
and set standards for itself fostering unmatched performance
2. ICICI Prudential Life Insurance Company
ICICI Prudential is a joint venture between ICICI bank and Prudential plc, both
having strong operations in their respective countries. ICICI bank is one of the leading banks
in India providing quality financial services and Prudential is an international financial
service provider headquartered at United Kingdom. ICICI and Prudential have respective
shares of 74% and 26%. The Company started operating in December 2000. Currently, total
capital with the company is Rs. 18.15 billion.
ICICI Prudential was the first insurance company in India to receive a National Insurer
Financial Strength rating of AAA (Ind.) from Fitch ratings. It has been given the honour of
being among the Most Trusted Brands in the industry by Economic Times for 3 consecutive
years. It has a network of 450 branches, over 1,50,000 insurance advisors and 18 banc
assurance partners.
14

3. Birla Sun Life Insurance Company Limited

Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between Aditya
Birla Group and Sun Life Financial Inc. BSLI started functioning in March 2001 after getting
the certificate of registration from IRDA.
Birla Sun Life Insurance Company Limited introduced unit Linked Life Insurance
Solutions in India. Within a short span of time it was able to establish itself as a leading
player in the Private Life Insurance Industry . The company shows corporate governance and
a high degree of transparency in all business practices. It has professional knowledge and
global expertise of Aditya Birla Group.
4. HDFC Standard Life Insurance Company Limited
HDFC Standard Life Insurance Company Limited is one of the first companies to be licensed
by IRDA to operate in the Insurance sector. The company came into existence on 14th August
2000. It is one of the most trusted companies; it is easily accessible and approachable,
offering value services to its customers.
The company aims to provide:

Innovative products to cater to different needs of different customers

Customer service of the highest order

Use of technology to improve service standards

Value for money for customers increasing market share

5.Max New York Life Insurance Company

Max New York Life Insurance Company Ltd. is a joint venture between New York
Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business
15

corporations. The company has positioned itself on the quality platform. The strategy is to
establish itself as a trusted life insurance specialist through a quality approach to business.
It now has 38 products covering both life and health insurance and 8 riders that can be
customized to over 800 combinations enabling customers to choose the policy that best fits
their need. Besides this, the company offers 6 products and 4 riders in group insurance
business. The company currently has more than 7500 employees
6. SBI Life Insurance Company
SBI Life Insurance is a joint venture between the State Bank of India and BNP
Paribas Assurance. SBI Life Insurance is registered with an authorized capital of Rs 2000
crores and a Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP
Paribas Assurance the remaining 26%.
SBI Life extensively leverages the SBI Group as a platform for cross-selling
insurance products along with its numerous banking product packages such as housing loans
and personal loans. SBIs access to over 100 million accounts across the country provides a
vibrant base for insurance penetration across every region and economic strata in the country
ensuring true financial inclusion.
Agency Channel, comprising of the most productive force of more than 40,000
Insurance Advisors, offers door to door insurance solutions to customers.
7. TATA AIG Life Insurance Company
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture
company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG
Life combines the Tata Groups pre-eminent leadership position in India and AIGs global
presence as the worlds leading international insurance and financial services organization.
The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the
balance 26 percent. Tata AIG Life provides insurance solutions to individuals and corporates.
Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and
started operations on April 1, 2001.

16

8. AVIVA Life Insurance Company

Aviva is UKs largest and the worlds fifth largest insurance Group. It is one of the
leading providers of life and pensions products to Europe and has substantial businesses
elsewhere around the world. In India, Aviva has a long history dating back to 1834. At the
time of nationalization it was the largest foreign insurer in India in terms of the compensation
paid by the Government of India. Aviva was also the first foreign insurance company in India
to set up its representative office in 1995.
In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group
of companies. A professionally managed company, Dabur is the country's leading producer of
traditional healthcare products.
With a strong sales force of over 30,000 Financial Planning Advisers (FPAs), Aviva
has initiated an innovative and differentiated sales approach to the business. Through the
Financial Health Check (FHC) Avivas sales force has been able to establish its credibility
in the market. The FHC is a free service administered by the FPAs for a need-based analysis
of the customers long-term savings and insurance needs. Depending on the life stage and
earnings of the customer, the FHC assesses and recommends the right insurance product for
them.
Aviva pioneered the concept of Bank assurance in India, and has leveraged its global
expertise in Bank assurance successfully in India. Currently, Aviva has Bank assurance tieups with ABN Amro Bank, American Express Bank, IndusInd Bank, Centurion Bank of
Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, Co-operative Banks in
Gujarat, Rajasthan, Jammu & Kashmir, Bihar, West Bengal, Andhra Pradesh and Maharashtra
and regional Banks.
9- BAJAJ ALLIANZ Life Insurance
is a Union between Allianz SE, one of the worlds largest Life Insurance companies and Bajaj
Auto, one of the biggest 2- &- 3 wheeler manufacturers in the world.Allianz SE is a leading
insurance conglomerate globally and one of the largest asset managers in the world,
17

managing assets worth over a Trillion Euros (Over R. 55,00,000 crores). Allianz SE has over
115 years of financial experience in over 70 countries.

Future Generali is an insurance joint venture headquartered in Mumbai, India between

the Italy-based Generali Group and the India-based Future Group. Future Generali operates
Life and Non-Life insurance businesses through Future Generali India Life Insurance Co.
Ltd. and Future Generali India Insurance Co. Ltd.
The Future Group is a diversified conglomerate with presence in multiple consumercentric businesses like retail, consumer finance, capital, insurance, media, brands and
logistics. The groups flagship enterprise, Pantaloon Retail (India) Limited, Indias leading
organized retailer, owns and manages multiple retail formats including Pantaloons, Big
Bazaar, Central, Food Bazaar, Home Town, among others. With its width and depth of
merchandise, it captures almost the entire consumption basket of the Indian consumer.
Headquartered in Mumbai, the company operates over 5 million square feet of retail space,
has more than 450 stores in different formats across 40 cities in India and employs over
18,000 employees.
Future Groups vision is to deliver Everything, Everywhere, Every time to Every
Indian Consumer in the most profitable manner. One of the core values at the Future Group
is Indian-ness and its corporate credo is Rewrite rules, Retain values.
11. IDBI Fortis Life Insurance Co Ltd,
IDBI Fortis Life Insurance Co Ltd, is a joint venture between three leading financial
conglomerates Indias premier development and commercial bank, IDBI Bank, one of
Indias leading private sector banks, Federal Bank and Europes banking and insurance giant,
Fortis, each of which enjoys a significant status in their respective business segments. In this
venture, IDBI Bank owns 48% equity while Federal Bank and Fortis own 26% equity each.
IDBI Ltd. continues to be, since its inception, Indias premier industrial development
bank. The Bank offers its customers an extensive range of diversified services including
18

project financing, term lending, working capital facilities, lease finance, venture capital, loan
syndication, corporate advisory services and legal and technical advisory services to its
corporate clients as well as mortgages and personal loans to its retail clients. As part of its
development activities, IDBI has been instrumental in sponsoring the development of key
institutions involved in Indias financial sector such as the Securities and Exchange Board
of India (SEBI), National Stock Exchange of India Limited (NSE) and National Securities
Depository Ltd.

Bharti AXA Life Insurance is a joint venture between Bharti, one of Indias leading
business groups with interests in telecom, agri business and retail, and AXA, world leader in
financial protection and wealth management.
As we expand our presence across the country to cater to your insurance and wealth
management needs with our product and service offerings, we continue to bring 'life
confidence' to customers spread across India. Whatever your plans in life, you can be
confident that Bharti AXA Life will offer the right financial solutions to help you achieve
them.

HSBC's origins in India date back to 1853, when the Mercantile Bank of India was
established in Mumbai. The Bank has since, steadily grown in reach and service offerings,
keeping pace with the evolving banking and financial needs of its customers.
In India, the Bank offers a comprehensive suite of world-class products and services
to its corporate and commercial banking clients as also to a fast growing personal banking
customer base.

19

Insurance
HSBC Insurance Brokers (India) Private Limited is licensed by the Insurance
Regulatory Development Authority (IRDA) to operate as a composite insurance broking
company, which will function as a direct and a reinsurance broke.
INDUSTRY STATISTICS
For the period April'2007 to January 2008, the Indian Life Insurance Industry recorded a
growth of around 32% in terms of weighted new premium income over the same period last
year, with private sector players registering a growth in excess of 94%.

COMPANY

April-Jan 2008

April-Jan 2009

ICICI PRU.

30000

50000

BAJAJ ALL.

18000

40000

HDFC SLI

10000

18000

RELIANCE

10000

15000

MAX NEW YORK

5000

11000

AVIVA

5000

6000

INGVYSHA

4000

5000

TATA ING

3000

4000
20

SAHARA

2000

3000

The graph given above shows the weighted new premium income written by private
sector life insurers for the ten month period to January 2008, as per the statistics released by
the IRDA. In this period, the life insurance industry (including the Life Insurance
Corporation of India LIC) collected a weighted new premium income of approx. Rs 399
billion. The new business market share of private sector life insurers increased to 49% in this
period, up from 33% in the first ten months of FY2006-07.ICICI Prudential remained the topranking private life insurer, with a market share of around 13% in terms of weighted new
premium income, followed by Bajaj Allianz Life, with a market share of around 10% and SBI
Life at 4.7%.

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COMPANY PROFILE
HDFC STANDARD LIFE INSURANCE COMPANY LIMITED
HDFC Standard Life Insurance Co. Ltd was incorporated on 14th august 2000. It is a
joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.)
India and UK based Standard Life Company. Both the joint venture partners being one of the
leaders in their respective areas came together in this 81.4:18.6 joint venture
HDFC Standard Life Insurance India boasts of covering around 8.7 lakh lives by
March'2007. The gross incomes standing at a whopping Rs. 2, 856 crores, HDFC Standard
Life Insurance Corporation is sure to become one of the leaders and the first preference for
any life insurance customer
The Banc assurance partners of HDFC Standard Life Insurance Co Ltd are HDFC,
HDFC Bank India Limited, Union Bank of India, Indian Bank, Bank of Baroda, Saraswat
Bank and Bajaj Capital.
The MD and CEO of HDFC Standard Life Mr. Deepak Satwalekar, has given the
company new directions and has helped the company achieve the status it currently enjoys.
HDFC Standard Life brings to you a whole range of insurance solutions be it group or
individual or NAV services for corporations, they can be easily customized as per specific
needs.
Track of records
Gross premium income, for the year ending March 31, 2007 stood at Rs. 2, 856 crores
and new business premium income at Rs. 1,624 crores. The company has covered over 8,
77,000 lives year ending March 31, 2007
AWARDS AND ACCOLADES
1. March, 2008

Unit Linked Savings Plan Tops Mint Best TV Ads Survey

22

2. February, 2008

Deepak M Satwalekar Awarded QIMPRO Gold

3. January, 2008

Sar Utha Ke Jiyo Among Indias 60 Glorious Advertising

4. December, 2007

Pension Plan Tops Mints Survey of Best TV Ads

5. September, 2007

Ranked Sixth Most Effective Advertisement

6.April ,2007

Received 3 awards at adfest 2007

7.March,2007

Selected as 4 Ps power brand

8.January,2007

Ranked as 29th most trusted Indian brand

VISION STATEMENT

Our Vision
'The most successful and admired life Insurance company, which means 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'.

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Values
Values that we observe while we work:

Integrity

Innovation

Customer centric

People Care One for all and all for one

Team work

Joy and Simplicity

GROUP COMPANIES
HDFC

HDFC SECURITIES

HDFC BANK

HDFC MUTUAL FUNDS

HDFC REALTY.COM

INTELNET

CIBIL

HDFC GENERAL INSURANCE COMPANY LIMITED

SOME OF VALUED BANC ASSURANCE PARTNERS
24

HOUSING DEVELOPMENT AND FINANCE CORPORATION

HDFC - History
HDFC Bank was incorporated in August 1994 in the name of 'HDFC Bank Limited',
with its registered office in Mumbai, India. The Bank commenced operations as a Scheduled
Commercial Bank in January 1995. The Housing Development Finance Corporation Limited
(HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of
India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the
Indian Banking Industry in 1994.
HDFC Mission
HDFC Bank began operations in 1995 with a simple mission: to be a "World-class
Indian Bank". They realized that only a single-minded focus on product quality and service
excellence would help them get there. Today, HDFC is proud to say that they are well on their
way towards that goal. It is extremely gratifying that HDFC efforts towards providing
customer convenience have been appreciated both nationally and internationally.
HDFC Vision
The companys vision is to create a niche in housing finance and emerge as the market
leader in todays competitive world.

STANDARD LIFE INSURANCE

The Standard Life group originally operated only through branches or agencies of the
mutual company in the United Kingdom and certain other countries.
Its Canadian branch was founded in 1833 and its Irish operations in 1838. This largely
remained the structure of the group until 1996, when it opened a branch in Frankfurt,
Germany with the aim of exporting its UK life assurance and pensions operating model to
25

capitalise on the opportunities presented by EC Directive 92/96/EEC (the Third Life

Directive) and offer a product range in that market with features which local providers were
unable to offer.

Standard Life Asia Limited/Joint ventures

The groups Hong Kong subsidiary, Standard Life Asia Limited (SL Asia), was
incorporated in 1999 as a joint venture and became a wholly-owned subsidiary of Standard
Life in 2002. The groups operations in Hong Kong were established to give the group a
presence in the Far East from which it could expand into China. The groups joint ventures in
India with Housing Development Finance Corporation Limited (HDFC) were incorporated
in 2000 (in relation to the life assurance and pensions joint venture) and 2003 (in relation to
the investment management joint venture). The groups joint venture in China with Tianjin
Economic Development Area General Company (TEDA) became operational in 2003
Overall corporate purpose
Why we exist;
Our corporate purpose is to generate sustainable, high-quality returns for our
shareholders.

26

GLOSSARY

o Accident Benefit
An add-on with a life policy. It compensates a policyholder in the event of death or injury by
accident
o Annuity
An investment option that makes a series of regular payments to an individual in exchange
for a premium or a series of premia.
o Appreciate
To grow in value
o Asset
Everything owned or due to a person
o Asset allocation
How your investments are spread across various asset classes
o Bond
It is like an IOU. By buying a bond you loan money to a company, a municipality, state or the
Central Governmenty
o Bonusar

27

The amount paid as return in a with-profit policy. The bonus, expressed as a percentage of
the sum assured, is generally declared every year. The amount is linked to the profits earned
by the insurer. Depending on the time of withdrawal, there are two kinds of bonuses
reversionary and cash. A reversionary bonus can be encashed only on maturity of the policy;
a cash bonus can be withdrawn when declared
o Budget
It is a tool used to monitor and control expenditures and purchases.
o Capital gains
Profit earned from the sale of stocks, mutual fund units and real estate. Long-term capital
gains arise from assets owned for more than a year while short-term capital gains are made
from assets owned for less than a year.
o Compound Interest
Interest computed on principal plus interest accrued during the previous periods of the
investment
o Corpus
The amount of money available with a scheme for investing. If already invested, the corpus is
the current value of the schemes portfolio.
o Cost averaging
A strategy that involves investing a fixed amount of money in an asset class like equity, so
that the average cost of acquiring the asset in the long-term is much lower than that in the
short-term.
o Cover
Another word for insurance; it also refers to the amount of insurance.
28

o Critical illness rider

A rider that provides a policyholder financial protection in the event of a critical illness
o Death benefit
The amount payable to the nominee on death of the policyholder. The amount paid is the sum
assured plus benefits applicable (if any) less outstanding loans.
o Declining term cover
A type of pure life protection insurance policy where the premia remain the same while the
life coverage keeps declining. They are typically used to cover the life of a person with a
pending loan repayment, like home loan.
o Deferred annuity
An annuity plan where the first annuity payment becomes payable after a chosen period that
exceeds one year.
o Discretionary expenses
These are expenses like entertainment, dining out and non-compulsory travel that you can
reduce at will.
o Disability / dismemberment benefit rider
A rider that provides for additional cover in the event of disability, or dismemberment, of the
policy holder due to an accident
o Dividends
Payments made by companies and mutual funds to shareholders and unit-holders,
respectively, from the income generated by it.
o Down payment
29

The money that a home buyer has to contribute, often at least 15 per cent of the value of the
house, when he is taking a home loan.
o Dividend yield
The percentage of dividend paid on a share to the value of the share.
o Emergency fund
The money, in the form of liquid investments in bank savings accounts, two-in-one accounts
and liquid funds, you need, to take care of emergencies like a job loss that your insurance
policies wouldnt cover
o Endowment plans
An insurance plan that provides a policyholder risk cover and some return on investment.
Usually suitable for the risk-averse
o Effective rate of interest
The true rate as against the nominal rate, which may be incorrect.
o Estate
All assets of a person, both financial-like stocks, bonds, mutual funds and fixed deposits and
physical-like a house and gold that can be passed on to his heirs.
o Estate planning
A financial plan to ensure the transfer of all your assets-both financial, such as fixed deposits
and stocks and physical, such as home, after your death to your heirs without any delay or
loss.
o Exclusions

30

Risks and circumstances not covered by a policy. No claim will be entertained in case of
losses arising out of such situations
o ELSS (equity-linked savings schemes)
Diversified equity funds that additionally offer a tax deduction under Section 80C on
investments up to Rs.1 lakh.
o EMI (equated monthly installment)
A borrower must make this payment each month towards repayment of interest and principal
of a loan taken by him.
o Equity
The actual ownership interest in a specific asset or group of assets
o Financial planning
It covers the essential elements of a persons financial affairs and is aimed at achieving a
persons financial goals.
o Fixed deposit
Funds placed on deposit in a bank, company or post office at a fixed rate of interest.
o Fixed-income investment
Any investment that provides a stated percentage of value, say 6 per cent, on the invested
amount.
o Fixed rate loan
Interest rate charged on a loan that remains fixed during the tenure of the loan
o Floating rate loan
31

Interest rate charged on a loan benchmarked to a particular lending rate. The rate gets
adjusted during the tenure of the loan as the benchmark interest rate changes.
o Group Insurance
An insurance policy taken out by employers to provide life cover to their employees. Usually
the cheapest form of insurance.
o Guaranteed additions
The amount paid as returns in assured-return insurance plans. Guaranteed additions are
expressed as a percentage of the sum assured, with the amount payable being stated by the
insurer at the outset.
o Hospital cash benefit rider
A rider that provides cover for hospitalization
o Immediate annuity
An annuity that starts payments immediately after, or soon after, the first premium is paid
o Index fund
A scheme whose portfolio mirrors the progress of a particular index, both in terms of
composition and individual stock weight ages. Its a passive investment option, as a funds
performance will mimic the index concerned, barring a minor tracking error.
o Insured
The policyholder
o Insurer
The insurance company

32

o Investments
Assets like fixed deposits, post office savings, bonds and stocks that are acquired for the
purpose of earning a return
o Investment risks
The risks that your investments face. These include the risk of interest rate fluctuations
impacting your debt investments or the prices of equities going down.
o Level term cover rider
A rider that increases the life cover in non-term plans, up to a maximum of the sum assured
on the base policy. The rider offers death benefit along, and serves the need for extra
protection for a specified time period.
o Liabilities
Monies owed, debt and other financial obligations of a person
o Life annuity
An annuity that makes regular income payments till the policyholder is alive. On the
policyholders death, all income payments cease and there are no beneficiary benefits.
o Liquidity
The quality of assets that can be easily and quickly converted into cash without any, or
significant, loss in value.
o Loyalty additions
Additional benefits (other than guaranteed additions/bonus) paid to policyholders on maturity
of certain investment-based insurance plans for staying on through its term. Loyalty additions
are paid as a percentage of the sum assured, with the amount depending on the insurers
financial performance.
33

o Lock-in period
The period of time for which investments made in an investment option cannot be withdrawn.
o Marginal tax rate
The highest tax rate applicable to a person for paying income tax.
o Market value
The monetary value an asset will fetch if sold in the market today.
o Maturity date
The date on which a policy term or fixed-income investment like fixed deposit or bond comes
to an end.
o Money-back plans
A variant of endowment plans in which survival benefits are disbursed through the policy
term, rather than in a lump sum at the end.
o Net asset value (NAV)
The simplest measure of how a scheme is performing, it tells how much each unit of it is
worth at any point in time. A schemes NAV is its net assets (the market value of the financial
securities it owns minus whatever it owes) divided by the number of units it has issued.
o Nominee
The person(s) nominated by the policyholder to receive the policy benefits in the event of his
death.
o Participative plans
See with-profit policy
34

o Pension Plan
Investment products offered by insurance companies and mutual funds that required the
investor to make defined contributions over regular periods, mostly every year. The
contributions are invested according to a pre-decided investment plan. At retirement, the
accumulation is paid out through regular pay-out options.
o Periodic payment investments
Investment options that have payouts in fixed intervals. For example, money-back life
insurance policies.
o Permanent partial disability
Permanent loss of any body part, one eye, one limb or one finger or a toe, or injuries that
render the insured in capable of earning an income from the date of the accident onwards
from any work, occupation or profession. While the loss of the body part may be permanent ,
its effects on the insureds life are partial.
o Permanent total disability
Permanent loss of use of any two limbs, or permanent and complete loss of sight in both eyes
or any other injury that renders the insured incapable of earning an income. Cover this risk to
secure your wealth.
o Policy
The legal document issued by an insurance company to a policyholder that states the terms
and conditions of an insurance contract.
o Policyholder
The person who buys an insurance policy. Also referred to as the insured.
o Policy term
35

The period for which an insurance policy provides cover

o Post office schemes
Also known as Small Savings schemes, they are offered at post offices and carry the highest
returns among fixed income instruments. Government backing makes these instruments like
Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP)
and Post Office Monthly Income Scheme (POMIS) risk-free
o Pre-payment
Partial or full repayment of the loan before the end of the tenure.
o Premium
The amount paid by the insured to the insurer to buy cover
o Recurring deposit
This is offered both in post office and banks where you are required to contribute a fixed
amount ever month. It is a great tool for making small and regular savings.
o Rest
The frequency at which interest is calculated on the outstanding loan balance. The more
regularly the interest is calculated on the outstanding loan amount, the lesser the interest costs
and cheaper the loan. For example, monthly rests would make a loan with the same rate
cheaper than a quarterly rest.
o Revolving credit
A pre-established credit line, typically in a credit card, against which a person may borrow to
make purchases.
o Riders
36

Additional covers that can be added to a life policy, for a cost

o Small savings
See post office schemes
o Sum assured
The amount of cover taken under a life insurance policy, it is the minimum amount that will
be paid on death of the policyholder during the policy term.
o Surrender value
The amount payable by the insurer to the owner of an investment-based plan in case he opts
to terminate the policy after three years (the mandatory lock-in period) but before its maturity
date. The surrender value will be the premia paid till date minus surrender charges and any
outstanding loans due.
o Survival benefits
The amount payable to a policyholder under an investment-based plan if he survives the
policy term. Typically, it is the sum assured plus returns (guaranteed additions / bonus)
accrued.
o Temporary total disability
An injury that results from an accident and renders a person immobile or affects his earning
capacity temporarily. For instance, a fracture in the arm or leg that keeps you from work: you
may be mobile but the injury may prevent you from working.
o Term plans
A plan that provides life cover for a specified period of time, but no return on the premia paid
o Terminal bonus
37

A one-time bonus paid on maturity of a with-profit plan

o Vesting date

PRODUCT PORTFOLIO
At HDFC Standard Life, they offer a bouquet of insurance solutions to meet every
need. They cater to both, individuals as well as to companies looking to provide benefits to
their employees. They have incorporated various downloadable forms and product details so
that you can make an informed choice about buying a policy.
For individuals, they have a range of protection, investment, pension and savings
plans that assist and nurture dreams apart from providing protection. Customer can choose
from a range of products to suit their life-stage and needs.
For organizations they have a host of customized solutions that range from Group
Term Insurance, Gratuity, Leave Encashment and Superannuation Products. These affordable
plans Apart from providing long term value to the employees help in enhancing goodwill of
the company
The various products by HDFC Standard Life include:
INDIVIDUAL PRODUCTS
Protection Plans
1. Term Assurance Plan
2. Loan Cover Term
3. Assurance Plan
Investment plan
1. Single Premium Whole Life Plan
38

Pension Plans
1. Personal pension plan
2. Unit liked pension plan
3. Unit linked pension plus
Saving Plans
1. Endowment assurance plan
2. Unit linked endowment plan
3. Unit linked endowment plus
4. Money back plan
5. Children plan
6. Unit linked youngster plan
7. Unit linked youngster plus
GROUP PRODUCTS
1. GROUP term insurance
2. Group variable term insurance
3. Group unit linked plan
OTHER PRODUCTS
1. Rural product
2. Social development insurance plan
39

3. Tax benefit schemes

Key strengths
Financial expertise
As a joint venture of leading financial services groups, HDFC Standard Life has the
financial expertise required to manage your long-term investments safely and efficiently.
Range of solutions
We have a range of individual and group solutions, which can be easily customized to
specific needs. Our group solutions have been designed to offer you complete flexibility
combined with a low charging structure.
PROTECTION PLANS
As the name suggests this category of plan are designed to protect the income earning
capacity of life assured. The present income of life assured therefore forms the basis of the
insurance plan. A person with no income cannot be offered this plan. The premium collected
under this category of plans is generally sufficient to cover the risk insured. There is no return
of premium on the expiry of cover; however saving element can be built under the plan to
return the saving amount at maturity. The plans do not share in the profits of the company and
dont have any bonuses

HDFC STANDARD LIFE has launched two products in this category they are:
1.

TERM ASSURANCE PLAN

2.

LOAN COVER TERM ASSUARANCE PLAN

INVESTMENT PLANS
40

The plans are designed to help the person reduce some of the risk of investments. All
the investment risk cannot be reduced. What these plans try to do is to create a pool of
investors so that they ca get the advantage of large funds, diversified investments,
proffessinal management and better returns. Investment plans can be designed to protect the
policyholder against the market fluctuations. However all the policyholder cannot be
protected at the same time.
ONE OF THE objectives of the investment type of plans is to give a good return to
the policyholder when risk covers integrated with the investment plans the cost of the risk
covers reduce the returns to the policyholders. To avoid the risk cover costs the plan do not
offer huge risk cover. So the policyholder has to pay a premium which is almost equal to sum
assured.
Investment plans are single premium plans where the client has to pay the premium and wait
for the investment to grow.
Investments
POLICYHOLDER

with profit funds

Premium

Expenses
Investment returns

Sum assured + bonus

Death or maturity

The policyholder pays the premium, which is invested by the insurance company. The
returns are distributed to the policy holder by means of bonus mechanism, which tries to
achieve a smoothening of the returns. The SINGLE PREMIUM WHOLE OF LIFE PLAN of
HDFCSL falls in this category of products.
41

PENSION PLANS
PENSION PLANS are designed to provide pension. With the interest rate fluctuating and the
increase in longevity the interest in the pension products has been growing in the recent days.
Life pension provides an income till death.
Pension plus helps the client to build the pension fund, which is earmarked to provide for the
pension and pay the pension on the chosen retirement date
Pension plans can be further classified into 2 categories:
1. Deferred pension plan
2. Immediate pension plan
Investments
POLICYHOLDER

with profit funds

Premium

Expenses
Investment returns

Sum assured + bonus

Used to purchase annuity
at the end of the term in
event of death premium
is returned with interest

The policyholder pays the premium, which is invested by the insurance company. The returns
are distributed to the policy holder by means of bonus mechanism, which tries to achieve a
smoothening of the returns. On the chosen date of retirement the fund is used to purchase an
annuity.
HDFC STANDARD LIFE has launched two products in this category they are:
42

1.

PERSONAL PENSION PLAN (with profits)

2.

UNIT LINKED PENSION PLAN

3.

UNIT LINKED PENSION PLUS

ABOVE PLANS CAN BE OFFERED AS A WITH PROFIT OR A UNIT LINKED

PLAN.WITH PROFIT PLANS WORKS ON BONUS MECHANISM WHILE ULIPS

DEPENDS ON MOVEMENTS OF THE UNIT PRICE.
SAVING PLANS
The saving plans are designed to help a person save for a long term event. Long term
savings have inherent uncertainties. Besides long term savings instrument are not available in
the market. The saving plans aim to provide a solution to the client in this area with the
benefit of life insurance.
It is important to note that the insurance covered offered is on the savings while
purchasing the plan that the policyholder has a saving target in mind. The plan aims to protect
in this target in the event of death of the life assured.
The premium paid by the policyholder consists of the savings. The risk cover cost on
the savings forms a very small portion of the premium this effectively means the premium
paid by the policyholder would determine the maturity amount that the policyholder would
ultimately get.
The policyholder pays the premium, which is invested by the insurance company. The returns
are distributed to the policy holder by means of bonus mechanism, which tries to achieve a
smoothening of the returns.
HDFCSL offers the following saving plans:
1.

ENDOWMENT ASSURANCE PLAN (MONEY BACK)

o

Unit Linked Endowment

43

Unit Linked Endowment Plus

Unit Linked Endowment Plus II

o
2.

MONEY BACK PLAN (MONEY BACK)

3.

CHILDRENS PLAN (MONET BACK)

o Unit Linked Young Star
o Unit Linked Young Star Plus
o Unit Linked Young Star Plus II.
o

4.

UNIT LINKED ENDOWMENT PLAN

5.

UNIT LINKED ENHANCED LIFE PROTECTION II,

ABOVE PLANS CAN BE OFFERED AS A WITH PROFIT OR A UNIT LINKED

PLAN.WITH PROFIT PLANS WORKS ON BONUS MECHANISM WHILE ULIPS
DEPENDS ON MOVEMENTS OF THE UNIT PRICE.

Unit linked Insurance plan

Most insurers in the year 2004 have started offering at least a few unit-linked plans.
Unit-linked life insurance products are those where the benefits are expressed in terms of
number of units and unit price. They can be viewed as a combination of insurance and mutual
funds.

44

The number of units that a customer would get would depend on the unit price when
he pays his premium. The daily unit price is based on the market value of the underlying
assets (equities, bonds, government securities, et cetera) and computed from the net asset
value.
The advantage of unit-linked plans is that they are simple, clear, and easy to
understand. Being transparent the policyholder gets the entire upside on the performance of
his fund. Besides all the advantages they offer to the customers, unit-linked plans also lead to
an efficient utilization of capital.
Unit-linked products are exempted from tax and they provide life insurance. Investors
welcome these products as they provide capital appreciation even as the yields on
government securities have fallen below 6 per cent, which has made the insurers slash
payouts.
According to the IRDA, a company offering unit-linked plans must give the investor an
option to choose among debt, balanced and equity funds. If you opt for a unit-linked
endowment policy, you can choose to invest your premiums in debt, balanced or equity
plans.
If you choose equity, then a major portion of your premiums will be invested in the
equity market. The plan you choose would depend on your risk profile and your investment
need. If you choose a debt plan, the majority of your premiums will get invested in debt
securities.
If one invests in a unit-linked pension plan early on, say when one is 25, one can
afford to take the risk associated with equities, at least in the plan's initial stages. However, as
one approaches retirement the quantum of returns should be subordinated to capital
preservation. At this stage, investing in a plan that has an equity tilt may not be a good idea.
Unit linked guidelines were notified by IRDA on 21st December 2005. The main intent
of the guidelines was to ensure that they lead to greater transparency and understanding of
these products among the insured, especially since the investment risk is borne by the
policyholder. It is the endeavor of IRDA to enable the buyer to make the most informed
decision possible when planning for financial security
45

IN A UNIT LINKED POLICY, THE INVESTMENT RISK IS GENERALLY

BORNE BY THE INVESTOR.
The allocated (invested) portions of the premiums after deducting for all the charges
and premium for risk cover under all policies in a particular fund as chosen by the policy
holders are pooled together to form a Unit fund.
The latest guidelines dictate that:
1. Term/Tenure
The ULIP client must have the option to choose a term/tenure. If no term is defined,
then the term will be defined as '70 minus the age of the client'. For example if the client is
opting for ULIP at the age of 30 then the policy term would be 40 years. The ULIP must have
a minimum tenure of 5 years.
2. Sum Assured
On the same lines, now there is a sum assured that clients can associate with. The
minimum sum assured is calculated as:
(Term/2 * Annual Premium) or (5 * Annual Premium) whichever is higher.
There is no clarity with regards to the maximum sum assured. The sum assured is
treated as sacred under the new guidelines; it cannot be reduced at any point during the term
of the policy except under certain conditions - like a partial withdrawal within two years of
death or all partial withdrawals after 60 years of age. This way the client is at ease with
regards to the sum assured at his disposal.
3. Premium payments
If less than first 3 years premiums are paid, the life cover will lapse and policy will be
terminated by paying the surrender value. However, if at least first 3 years premiums have
been paid, then the life cover would have to continue at the option of the client.
4. Surrender value
46

The surrender value would be payable only after completion of 3 policy years.
5. Top-ups
Insurance companies can accept top-ups only if the client has paid regular premiums till date.
If the top-up amount exceeds 25% of total basic regular premiums paid till date, then the
client has to be given a certain percentage of sum assured on the excess amount. Top-ups
have a lock-in of 3 years (unless the top-up is made in the last 3 years of the policy).
The client must necessarily sign on the sales benefit illustrations. These illustrations are
shown to the client by the agent to give him an idea about the returns on his policy. Agents
are bound by guidelines to show illustrations based on an optimistic estimate of 10% and a
conservative estimate of 6%. Now clients will have to sign on these illustrations, because
agents were violating these guidelines and projecting higher returns.

Steps to selecting the right ULIP

Here's a 5-step investment strategy that will guide investors in the selection process and
enable them to choose the right Unit-Linked
Insurance Plans (ULIPs).
But before we get there, let's understand what ULIPs are all about?
For the generation of insurance seekers who thrived on insurance policies with assured
returns issued by a single public sector enterprise, unit-linked insurance plans are a
revelation.
Perhaps insurance policies then were symbolic of the times when high interest rates and the
absence of a rational risk-return trade-off were the norms.
The subsequent softening of interest rates introduced a degree a much-needed rationality to
insurance products like endowment plans; attractive returns at low risk became a thing of the
47

past. The same period also coincided with an upturn in equity markets and the emergence of a
new breed of market-linked insurance products like ULIPs.
More importantly ULIPs (powered by the presence of a large number of variants) offer
investors the opportunity to select a product which matches their risk profile; for example an
individual with a high risk appetite can shun traditional endowment plans (which invest about
85% of their funds in the debt instruments) in favour of a ULIP which invests its entire
corpus in equities.
In traditional insurance products, the sum assured is the corner stone; in ULIPs premium
payments is the key component. ULIPs are remarkably alike to mutual funds in terms of their
structure and functioning; premium payments made are converted into units and a net asset
value (NAV) is declared for the same.
Investors have the choice of enhancing their insurance cover, modifying premium payments
and even opting for a distinct asset allocation than the one they originally opted for.
Also if an unforeseen eventuality were to occur, in case of traditional products, the sum
assured is paid along with accumulated bonuses; conversely in ULIPs, the insured is paid
either the sum assured or corpus amount whichever is higher.
How to select the right ULIP
For a product capable of adding significant value to investors' portfolios, ULIPs have far too
many critics. We Personal have interacted with a number of investors who were very
disillusioned with their ULIPs investments; often the disappointment stemmed from poor and
inappropriate selection.
We present a 5-step investment strategy that will guide investors in the selection process
and enable them to choose the right ULIP.
1. Understand the concept of ULIPs
Do as much homework as possible before investing in an ULIP. This way you will be fully
aware of what you are getting into and make an informed decision.
48

More importantly, it will ensure that you are not faced with any unpleasant surprises at a later
stage. Investors on most occasions fail to realise what they are getting into and unscrupulous
agents should get a lot of 'credit' for the same.
Gather information on ULIPs, the various options available and understand their working.
Read ULIP-related information available on financial Web sites, newspapers and sales
literature circulated by insurance companies.
2. focus on your need and risk profile
Identify a plan that is best suited for you (in terms of allocation of money between equity and
debt instruments). Your risk appetite should be the deciding criterion in choosing the plan.
As a result if you have a high risk appetite, then an aggressive investment option with a
higher equity component is likely to be more suited. Similarly your existing investment
portfolio and the equity-debt allocation therein also need to be given due importance before
selecting a plan.
Opting for a plan that is lop-sided in favour of equities, only with the objective of clocking
attractive returns can and does spell disaster in most cases.
3. Compare ULIP products from various insurance companies
Compare products offered by various insurance companies on parameters like expenses,
premium payments and performance among others. For example, information on premium
payments will help you get a better picture of the minimum outlay since ULIPs work on
premium payments as opposed to sum assured in the case of conventional insurance products.
Compare the ULIPs' performance i.e. find out how the debt, equity and balanced schemes are
performing; also study the portfolios of various plans. Expenses are a significant factor in
ULIPs, hence an assessment on this parameter is warranted as well.
Enquire about the top-up facility offered by ULIPs i.e. additional lump sum investments
which can be made to enhance the policy's savings portion. This option enables policyholders
to increase the premium amounts, thereby providing presenting an opportunity to gainfully
invest any surplus funds available.
49

Find out about the number of times you can make free switches (i.e. change the asset
allocation of your ULIP account) from one investment plan to another. Some insurance
companies offer multiple free switches every year while others do so only after the
completion of a stipulated period.
4. Go for an experienced insurance advisor
Select an advisor who is not only conversant with the functioning of debt and equity markets,
but also independent and unbiased. Ask for references of clients he has serviced earlier and
cross-check his service standards.
When your agent recommends a ULIP from a given company, put forth some product-related
questions to test him and also ask him why the products from other insurers should not be
considered.
Insurance advice at all times must be unbiased and independent; also your agent must be
willing to inform you about the pros and cons of buying a particular plan. His job should not
be restricted to doing paper work like filling

50

RESEARCH METHODOLOGY
1) Define the research problem,

2)

a)

Improve existing services and satisfy customer expectation.

b)

Find out the selling module which will help the company in its

business.

Data collection approach,

This was carried out by internal data (Primary Data)

a)

Collection of information from company,

b)

Data provided by company,

c)

Systematic collection of information direct from branch manager.

External data collection (secondary Data)

a)

Internet

c)

Newspapers

3)Analytical Approach,
Data analysis involve converting a series of recorded observation in descriptive statement with
the help of,
a)

Charts

51

b)

4)

Graphs

Coverage,

The area covered for the project was Udaipur,Rajasthan

5)

Define population ,
a) Salaried employees
b) Self employe
c) Business professionals

6)Hypothesis
He present service and product offered by HDFC Std meet customer expectations.

Research Duration

1st March. to 15thApril

Research Area

Udaipur city

Research Design

Exploratory Research

Survey Approach

Sample Survey

Sampling Method

N on-Probabilistic Sampling Method

52

Sampling Unit

Corporate office

Contact Method

Personal Interview/Telephonic Conversation

Research Instrument

Questionnaire

Data Source

Primary + Secondary Data

Sample Size

160

53

RESEARCH OBJECTIVE

To study Consumer Perceptions or customers view points on product, service and other
decisive attributes determining the choice of Insurance policy

To create Awareness in the market about the ULIPs

To find out ways that could help HDFC increase its existing market share for ULIPs

To find out new potential markets/untapped segment.

54

DATA COLLECTION & ANALYSIS

Q. Age of the person taking insurance policy
at entry.
Table 1.1 Break-up of samples age

Below 25

26-35

36-45

46-55

Above 55

10

43

80

25

The maximum number of person taking insurance policy are in he age group of 36 45.

The next level is the age group of 26 35

The lowest level is the above 55

55

Q. Profession of the person paying premium.

Table 2.1 Break-up of samples Profession

Gove. Employee

Private Employee

Self Employee

Professional

57

56

38

All the most people from all profession go for insurance.

As by seeing the graph we can observe that professional(Teachers, Doctors) are

56

Q. Kind of ULIP policies have you subscribed

Table 3.1 Break-up of ULIP policies people subscribed to

Health

Life

Endowment

Childrens Plan

Loan Protection

Retirement Plan

42

45

24

204

40

54

Most of the people goes for Childrens Plan there for we can say that in this segment
potential is more as compared to other.

So if we target more on this segment the success rate will be higher.

57

Q. Satisfaction level by the amount of charges in ULIP

Table 4.1 Satisfaction level by the amount of Premium

Fully Satisfied

Somewhat Satisfied

Dissatisfied

Extremely Dissatisfied

67

65

21

Customers are not completely satisfied with the charges they are paying.

Segment which is displeased by the charges have a general argument to say that company
charges more then what we know at the time of taking the policy.

58

Q. ULIP policies has your household subscribed

Table 5.1 Number of ULIP policies a household subscribed to

More then 4

34

42

56

21

Most of the people go for ULIP between 2 to 3 policies.

There is only 4% of people go beyond 4 ULIPs. Because only those people go for ULIP who
have high disposable income .

Q. The cause behind purchasing ULIP

59

Table 6.1 Reason why people buy ULIP

Tax saving

Security

Investment

Premium for initial 3 years

124

53

68

32

Most of the people goes for ULIPs for Tax saving

The next level of group goes for investment

Very less portion goes for security

Q. How you came to know about ULIP?

Table 7.1

60

Source of information
Through relatives
Through company
representative
Through advertisement
Took initiative to know

No. of persons
24
77
48
11

Graph 7.1

Most of the customers came to know about ULIP through company representative. It means
company should focus on increasing the number of representatives.

61

Particular

Years

Premium income

08-09

07-08

06-07

Rs.2,679.61 crores

Rs.1,624.23 crores

Rs.

1,026.18

crores

New Business

Cumulative

Sum Rs.87,439.41 crores

Rs.67,192.97 crores

Assured

Portfolio

Rs.47,730.40
crores

19 retail and 6 group 21 retail and 6 group 13 retail and 7

products,

products

group products

Policies issued

Over 9,40,000

Over 5,23,000

Over3,97,000

Lives Covered

More than 9,59,000

More than 8,77,000

More

than

5,80,000

Investments

Total assets under Rs. 8,916 crores

management

Rs. 4,976 crores

Rs.2,363.37
crores.

62

Capital

Equity

share Rs. 801 crores to Rs. 620 crores to Rs. 320 crores

capital

over

overRs.801 crores.

to

Rs.

620

crores.
Rs. 1271 crores.

Authorized capital

Rs. 620 crores

to

Rs.

1500

crores.

Solvency

The

margin

is The

margin

is The margin is

maintained at least at maintained at least maintained

1.50
statutory
level.

times

the at 1.50 times the least

required statutory
level.

at

required times

at
1.50
the

statutory
required level.

Dividend

00

00

00

Interim Bonuses

580

300

417

Paid

63

Servicing
customer

the

Robust mechanism to Electronic Clearing Service

capture theVoice of System.

Helpline,

the Customer

portal,
Launch

Meeting

Corporate Account,

Social Responsibility, provides

company has entered options
into

partnership switch,

with a unique BPO redirection

service
employing
workforce.

of

web
net

My banking, digital
which security

servicing systems.
such as
premium
to

be

provider executed by clients,

rural without recourse to
visiting a branch.

64

Risk retained & Risk reinsured

Particulars

As at 31 March 2009

As at 31st March 2008

As at 31st March 2007

Sum at risk (Rs 000)

Sum at risk (Rs 000)

Sum at risk (Rs 000)

Risk retained

300,650,000

61%

180,096,000

55%

109,813

53%

Risk reinsured

188,412,000

39%

149,203,000

45%

98,545

47%

Risk retained

26,458,000

58%

13,952,000

43%

16,232

30%

Risk reinsured

19,213,000

42%

18,495,000

57%

37,183

70%

Individual business

Group business

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Financial Ratios
1) New Business Premium Income Growth (segment wise)Rs.000)

Particulars

%2008-09

%2007-08

%2006-07

150.29%

136.75%

202.89%

145.33%

157.26%

308.71%

180.16%

203.81%

295.52%

350.00%

Life -Individual
300.00% Business
250.00%
200.00%

Life -Group
150.00%Business
100.00%
50.00%

Pension0.00%
%2008-09
Life -Individual Business
Annuities

%2007-08
Life -Group
Business
67.72%

%2006-07
Pension
307.47%

Annuities
18.93%

66

CONCLUSION
After a detailed study of the questionnaire we reached to certain conclusions, which can be summarized
as:

People are not aware about the benefits derived from insurance. Rather they are not aware about the
different policies of insurance.

Most of the people relate insurance only with vehicle insurance and life insurance. General
awareness about different other policies of insurance is very less.

The insurance company has spend less on promoting insurance policy, because mostly respondent
does not fully aware from the features & benefits of the insurance policy..

After analyzing the survey the researcher also found that there are some new challenges and
opportunities, which can be, consider by the company for their betterment.

New challenges:-

1. Distribution
2. Customer service
3. New technology
4. Investment

67

SUGGESTION
Insurance is an upcoming sector where high profit potentials are foreseen. In order to increase the
awareness about this, company should advertise and market their different products in an attractive way
so that people develop their interest in this sector.
HDFC Std. Life Insurance Company is a major player in this field but now that companies have
increased to a great extent it should also follow some steps so that it does not loose hold over the market.
Some of these steps can be:

Company should improve upon the ways of claim settlement & it should be as quick as possible.

Company should increase the no. of agents to increase its market share in the insurance sector.

Training should be given to the insurance agents so to make them more efficient. And management
should also be more efficient in coordination and controlling the employees.

Company should increase its advertisement budget to increase the level of advertisement, which in
turn will help the company to increase loyalty of customer towards the company & more and more
new customers will join as a potential client.

Paper work & documentation should be made less by the company so that customers precious time
is saved and they are easily able to understand the procedure of the company. Like e-banking, einsurance should be promoted so that the customers can easily use it from any part of the world.

68

BIBLIOGRAPHY
Books Referred:
Philip Kotler, Kevin Keller, Abraham Koshy and Mithileshwar Jha, Marketing Management,
twelfth edition, published by Pearson Prentice Hall (year 2007)
Naresh Malhotra, Marketing Research

Websites Referred:

www.irda.com

www.hdfcinsurance.com

www.schoolofinsurance.in

www.wikipedia.com

69

ABBREVIATIONS
1. HDFCSL - HDFC Standard Life Insurance Company Limited
2. IRDA - Insurance Regulatory And Development Authority
3. AML - Anti Money Laundering
4. FC - Financial Consultant
5. UL - Unit Linked
6. CCR - Consultant Confidential Report
7. PEP - Politically Exposed Person
8. NRI - Non Resident Indian
9. HNI - High Net worth Individual
10. KYC - Know your customer

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