PRODUCT

DIVERSIFICATION
ON INSURANCE BUSINESS
AKSHAYA V
KH.AR.P2COM21014
 INDEX

 WHAT IS PRODUCT DIVERSIFICATION ?

 IMPACT OF PRODUCT DIVERSIFICATION
ON INSURANCE BUSINESS .
 PRODUCT DIVERSIFICATION OF LIC .
 MEANING OF PRODUCT
DIVERSIFICATION
 A product diversification strategy is a form of business
development.
 Small businesses that implement the strategy can diversify their
product range by modifying existing products or adding new
products to the range.
 The strategy provides opportunities to grow the business by
increasing sales to existing customers or entering new markets.
 IMPACT OF PRODUCT
DIVERSIFICATION ON INSURANCE
BUSINESS
Product diversification of life insurance business yielded considerable results:
 People are attracted to purchase new policies of insurance which met their demand of
children’s education , marriage of daughter, their risk coverage , pension benefit to spouse
and self , periodical monetary requirement and risk coverage.
 The insurance companies are diversity their products from traditional into innovative and
application oriented
 Products of insurance business are diversified according to the requirements of the policy
holders:
Policies according to
 Duration of policy
 Method of premium payment
 Participation in profit
 Number of lives covered
 Method of payment of claim amount
 Non conventional policies
product diversification thus have a positive impact as:
 The percentage of population covered increased under individual business and under total
insurance business.
 The life insurance carrying capacity is increased due to the introduction of several new insurance
schemes.
 PRODUCT DIVERSIFICATION OF LIC

 In India, there are 82 insurance products has been introduced by various insurance
companies in various periods. Ali the insurance products can be grouped into two rnajor
categories like

A. Traditional Products B. Modern Products

1 . Endowment Policy I . Health insurance Products
2. Whole life Policy 2. Accident insurance Products
3. Money back Policy 3. Key man insurance Products
4. Group insurance Products
5. Rural insurance Products
6. Micro insurance Products
7. Market oriented Products
 Traditional Products
 Endowment, whole life and money back policies are treated as traditional insurance policies
which are the dominated in Indian insurance market. This kinds of insurance products are
introduced mainly for the purpose of risk coverage to the -people.
Endowment Policy
 An endowment plan is a life insurance contract designed to pay a lump sum after a specific term
(on its 'maturity') or on death. Typical maturities are ten, fifteen or twenty years up to a certain
age limit. Endowment policy also pay out in the case of critical illness. Endowment policy are
typically traditional with-profits or unit-linked including those with unitised with-profits funds
the holder then receives the surrender value which is determined by the insurance company
depending on how long the policy has been running and how much has been paid into it.
Whole Life Insurance Policy
A Whole Life Insurance Policy is basically a Term Plan with unlimited term. Thus, it is also a pure
protection plan like a Term Plan, where the nominee gets the Death Benefit on the death of the Life
Insured and there is no Maturity Benefit.

Money back policy

 Money back policy refers to that insurance policy under which the insured gets periodic
payments from the insurance company, which is not the case with other policies where the
insured gets money only after stipulated time or on death of the person and not regularly.
Modern Products

 Due to emerging needs and liberalization of Indian financial system, insurance industries
are under the compulsion to adopt new strategies and introduced multidimensional
insurance products. Specialised insurance products were introduced to attract and capture
the customers. Health insurance including mediclaim insurance products, rural insurance
and micro insurance are among the popular products.
 The above products are again classified into four major categories on the basis of the
nature of the products;
 Savings plan
 Protection plan
 Retirement plan
 Investment plan
Health insurance
 A comprehensive health insurance package specially designed to offer life insurance complete
protection to the insured and family is offered. The policy covers the spouse, children and
dependent parents for all health worries. In India, around 17 million persons cover under health
insurance.
 Diabetics and Heart attack policies of star health and allied insurance company, Reliance health
wise policy of Reliance health insurance, and AIG Health protector of AIG Vysya insurance
company are the popular in the line of health insurance.
Accident insurance
 Accident insurance package is designed to take care of the individual and the family in the
unfortunate event of a fatal accident or disability.
 Accident insurance products are dealt by ICICI prudential life insurance, Birla sun and Max New
York life insurance etc.
Key insuranceman
 one of the new concepts in the Indian insurance industry. Under this schemes, key man of the
institution or organisation can be protect due to any accident or dislikeable events. Key man
insurance is taken out by a business firm on the life of the key employees in order to protect the
firm against any financial loss which may occur due to the premature demise of the key man.
 Aviva life insurance ICICt prudential life insurance, Bajaj Allianz life insurance are some of the
company which provides key man insurance.
Group insurance
 Government of India announced a special scheme to cover the entire group of the family in
a single policy. This kind of policy would be useful and suitable to attract more customers
with fewer premiums.
 Group insurance schemes are now channelised into various sub products and this kind of
products are mainly concentrated by Life Insurance Corporation and followed by SBI life
insurance etc
Rural Insurance
 In India, rural population constitutes 60% of the total population but insurance companies
captured only 15% of the rural market. Hence, the government of India and Life insurance
corporation jointly announced a scheme to protect the life of the rural people as we!! as
provides, opportunities to rural people to get the benefits of the insurance services.
 Life insurance corporation is playing a major role in the field of rural insurance and the
private sector insurance companies are not concentrating more in rural insurance because
of the low premium and the rural people will not pay that on a regular basis.
 Money back policy, Janata policy and low premium policies are popular in the rural
insurance
Micro insurance
 Micro insurance is a relatively new service that is being offered along with credit and
savings for providing more elaborate and complementary set of services to the under
privileged. The target group of micro insurance products with low premium and sum
assured comprises self groups, farmers, small scale entrepreneurs, migrant workers and
tribal
 Aviva life insurance has developed the concept of micro insurance in India in partnership
with Micro Finance Institutions like BASIX and KBSLAB.
Market oriented insurance
 Market oriented insurance products are very popular in the recent days which provides
opportunities to get the benefits. from the stock market. This type of products are suitable
to the short term investors those need more return. Majority of the insurance industry
involved in the market oriented insurance products of Life Insurance Corporation.
 ICICI orudential life insurance company also introduced a market oriented insurance
product. Market oriented insurance products are the fast growing and high yield insurance
products in the recent years.
 The Life Insurance Coorporation of India realised the importance of product
diversification and thus increased different types of policies:

 Jeevan Akshay
LIC Jeevan Akshay is an Immediate Annuity plan offered by Indian Life insurance and investment company Life
Insurance Corporation of India (LIC). It is a single premium policy and has to be purchased by paying a lumpsum
amount at once. The annuity can be paid monthly, quarterly, biannually or annually as chosen.
1. 10 annuity options on the payment of a lump sum amount
2. Payment of annuity throughout the lifetime of the annuitant
3. Minimum purchase price of INR 1 lakh
4. No maximum purchase limit
5. Minimum annuity of INR 12,000 per year
6. Loan facility against the policy
7. A grace period of 30 days
• Jeevan dhara
The New Jeevan Dhara – I Plan from LIC is a retirement/annuity plan that can guarantee
financial security during the policyholder’s post-retirement years. In addition to providing a
comprehensive risk cover, this plan also guarantees a lump sum maturity benefit and annuity
payments.
 Jeevan Kishor
The policy has been especially conceptualized for the benefit of children aged below 12 years.
Any of the parents or the grandparents may purchase this child's plan. In case, parents of the
child aren’t alive, a legal guardian can also buy this policy.
Under this LIC policy, the risk cover on a child’s life begins either after 2 years from the
policy issuance date or after completing a child’s 7 years of age, whichever is later. On the
policy's Maturity date, the policyholder or the nominee is paid the Sum Assured with the
Bonuses. Jeevan Kishore Insurance Policy (Table no. 102) also provides policyholders with the
option of securing their children's future with Premium Waiver Benefit riders.
 Jeevan sukanya
LIC Jeevan Sukanya plan is specially designed and it is exclusively for female children aged
between 1 to 12 years.

LIC Jeevan Sukanya plan is a limited premium payment plan which provides risk cover after
deferment period (Period between date of commencement of policy and first installment) on the life of
female child and when she gets married, policy extends the risk cover to the life of her husband also,
provided premiums have been paid fully for the premium paying term

 Jeevan suraksha
LIC New Jeevan Suraksha Plan is with bonus deferred annuity plan. This is a non unit-linked pension
plan. The corpus is created to provide pension for old age after Vesting Date. In this plan, the premium is
paid till the end of the policy term, i.e. till the pension starts from the Vesting Date.
CONCLUSION
 Diversification of insurance products is an endless process due to changing financial
environment and life style of the people.
 The growth and development of insurance industry and products will reach up to the
satisfaction of the human beings. But the human being is never satisfied and he is always
think about his future.
 When people think about their future, the insurance industry also think about their future
products.It never sustained and it will ahead.