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A SUMMER TRAINING PROJECT REPORT ON

Studying the Awareness of Life Insurance with special reference to HDFCSLIC (A case of Allahabad City)

For the partial fulfillment of Master of Business Administration (2012-2014) Under the Guidance of
Dr. Archana Chandra Associate Professor

Submitted by
Ajit Kumar 12MBA023 (MBA 3rd Sem.)

Submitted to
SAM !"##"$ B%&&%M "$S&&"&'&( %) A#*"C'+&'*( &(C!$%+%#, A$D SC"($C(S
1

D((M(D &% B( '$"-(*S"&,

D(C+A*A&"%$
I Ajit Kumar, here declare that the summer training project studying the Awareness of Life Insurance with special reference to HD !"LI!# has $een underta%en $y me and it is my original wor%& 'he conclusion in this (eport is $ased on research conducted during summer training& "am Higgin$ottom Institute of Agriculture 'echnology ) "cience

Ajit Kumar 1*+,A-*. +,A/*-1*0*-112

C(*&")"CA&( %) %*"#"$A+ .%*K


!ertified that the Project (eport titled /Stud0in1 the A2arene33 o4 +i4e "n3urance 2ith 35ecia6 re4erence to !D)CS+"C7 su$mitted to the 8o3e5h Schoo6 o4 Bu3ine33 Studie3, !i11inbottom "n3titute o4 A1ricu6ture9 &echno6o10 : Science39 A66ahabad in partial fulfillment of the re3uirement for the degree of +aster of ,usiness Administration is a $onafied record of research carried out $y Mr. Mohd A3i4 under my super4ision and guidance& 'he Project (eport is recommended for acceptance&

Dr. Archana Chandra A33ociate ;ro4e33or Ad<i3or

C(*&")"CA&( %) &!( (-A+'A&"%$ C%M"&&((


'his summer project titled /3tud0in1 the A2arene33 o4 +i4e "n3urance 2ith 35ecia6 re4erence to !D)CS+"C# has $een prepared and su$mitted $y Ajit Kumar in partial fulfillment of the re3uirement for the award studies, Sam !i11inbotom "n3titute o4 A1ricu6ture &echno6o10AndScience39 A66ahabad9 '.;. $ame=De5artment
Dr& Archana !handra Associate Professor Ad4isor Dr& "ha$ana +a7har Assistant Professor +em$er Dr& /+rs2 (icha "inha Assistant Professor +em$er

(<a6uation
"atisfactory 5 6nsatisfactory "atisfactory 5 6nsatisfactory "atisfactory 5 6nsatisfactory

Si1nature
0000000000000000000

0000000000000000000

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'he Project has $een e8amined $y the a$o4e e4aluation committee and found accepta$le&

Date90
Place90 A66ahabad

;ro4.(Dr.) Ma3ood $a3eer


Dean (8SBS-S!"A&S)

ACK$%.+(D#(M($&
I am than%ful to our 'raining and Placement :fficer Mr. Sandee5 .a36e0 who arrange my summer training in !D)CS+"C Allaha$ad& I am also than%ful to Mr. Mohd A3i4 /"ales De4elopment +anager2 HD !"LI! Allaha$ad who guides me in the period of training and prepare for industry& I am also than%ful to all the staff of HD !"LI! Allaha$ad who helps me at each and e4ery le4el& I am also than%ful to my institution 8.S.B.S., Allaha$ad to help me in attaining the opportunity to learn the practical aspects of my curriculum through this Industrial0 'raining Program& I am also sincerely than%ful to our faculty mem$ers who contri$uted in my de4elopment through their diligent efforts and ma%e me capa$le and confident enough to understand the industrial en4ironment and especially Dr. Archana Chandra who guide me to preparing my training report& At last I am also than%ful to people of Allaha$ad who are directly or indirectly helps me at e4ery stage during the training&

Ajit Kumar 12MBA023 (MBA 3rd Sem.)

PREFACE
'his research report is conduct to %now the awareness of life insurance in Allaha$ad city& 'his report is also gi4e the $rief %nowledge a$out insurance )life insurance& In this report main %nowledge a$out HD !"LI!& Includes company profile& 'hat is a$out the HD ! group, "tandard Life and $rief information a$out the HD< !"LI!& In HD !"LI!, I ha4e told a$out the company portfolio, and products of the company& Includes the main part of research study& In this part all the data are collected from the sur4ey& =ith the help of sur4ey, I want to sol4e the research pro$lem& 'his report is help for all the employees and people who are related to the HD !"LI!& 'his report is also help for the research scholar to understand the life insurance characteristics in Allaha$ad city&

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TA !E " CONTENTS
10 Introduction A$out Insurance A$out Life Insurance *0 !ompany Profile A$out HD ! "LI! .0 :$jecti4e 10 (esearch +ethodology ;0 inding >0 Limitation @0 Analysis ) Interpretation ?0 !onclusion ) "uggestion A0 Buestionnaire ,i$liography 1@ 1@ 1? 1? 1A0;? ;A >-0>1 .@01; ?0.>

INSURANCE
?

Insurance is as old as ci4ili7ation& It was present in the form of mutual help& Coint stoc% companies and corporations are the recent form of insurance& 'he yoga%shema has $een the oldest term used in (ig0Deda for some %ind of insurance& +anu has emphasi7ed that a special charge $e made on goods carried from one town to another to insure their safe carriage +anu smriti says90 'he traders must $e made to pay ta8es or duties ta%ing into account the price of purchase, price of sale the length of journey, incidental e8penses and yoga%shema that is ris% ) safety# Ancient India was the prominent maritime power today the nationali7ation and glo$ali7ation that is pri4ati7ation of life insurance ) general insurance is e8pected to contri$ute ma8imum to the well $eing ) safety of people $y pro4iding insurance ser4ices in e4ery wal% of life& 'he principle ) practice of insurance has $een changing from time to time& 'he code of ham$ura$i and +anu has recogni7ed the ad4isa$ility of pro4ince for sharing the future losses& If we loo% at insurance type then we find that marine insurance is the oldest form of insurance ) first of the insurance has $een framed in 1.1- $y count of landers as a charter of assurance# $y which merchant could insure their goods e8posed to the ris% of sea this law then spread to other areas of <urope as "pain, rance, Portugal, Holland, ) <ngland& :ne of the famous marine insurance companies of oldest time, currently wor%ing is Lloyd it was fire insurance which was de4eloped after marine insurance& It was o$ser4ed in Anglo section guild form for the first time where the 4ictims of fire ha7ards where gi4en personal assistance $y pro4iding necessities for life& It was originated in Eermany in 1>th century the fire insurance got momentum in <ngland after the great fire in1>>> where the fire losses were tremendous almost ?;F of the houses were $urnt to ashes ) property of nearly 1-crores sterling was $urnt off the first& 'he first fire insurance office opened in <ngland in1>?1& It was opened in the name of sun life insurance& Life insurance made its first appearance in <ngland in 1> th century& 'he 1st recorded e4idence in <ngland $eing policy on the life of =illiam gi$$on on 1? Cune 1>;.& Howe4er $efore it the annuities were the common feature in <ngland& 'he first registered life insurance office was Hand in Hand "ociety esta$lished in1>A>& Life insurance did not flourish in 6nited "tates during 1? th century $ecause of serious fluctuations in death rates $ut in 1A th century it greatly flourished& In India, the first life insurance company was opened in 1?1? under the name of :riental Life Assurance !ompany $y some of the <uropeans& 'he year 1?@- was a landmar% in the history of Indian insurance separating the early period of pinioning attempt at life insurance from the su$se3uent period of steady de4elopment at the esta$lishment of Indian life insurance office that is ,om$ay +utual Life assurance "ociety in 1?@1& 'he miscellaneous insurance too% its shape in 1A th century with the industrial re4olution in <ngland& Gow 4arious categories of insurance such as crop insurance, cattle insurance, etc& are ta%ing place& 'he scope of general insurance is increasing with the ad4ancement of the society&

INSURANCE
A

Insurance is defined as cooperati4e de4ice to spread the loss caused $y a particular ris% o4er a num$er of persons who are e8posed to it and who agree to ensure themsel4es against that ris%& Insurance is also defined as a social de4ice to accumulate funds to meet the uncertain losses arising through a certain ris% to persons insured against the ris%& )unction3 o4 "n3urance 1& Primary functions Pro4ide certainty Pro4ides protections (is% sharing *& "econdary functions Pre4ention of loss Pro4ides capital& Impro4es efficiency& Helps in economic progress& $ature o4 "n3urance 1& *& .& 1& ;& >& @& ?& (is% $earing& Act as a cooperati4e de4ice& Daluation of ris%& Payment at contingency& Daluation of amount of payment& Large num$er of insured person& Insurance is not a gam$ling& Insurance is not a charity&

;rinci56e o4 in3urance 1& Principle of cooperation& *& 'heory of pro$a$ility&

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Ro#e and Im$ortance of In%urance


A. &o an indi<idua6 1& "ecurity and safety *& Affords peace of mind .& Protects mortgaged property 1& <liminates dependencies ;& <ncourages sa4ing >& Pro4ides profita$le instrument @& ulfill 4arious need of a person B. &o bu3ine33 1& (educed uncertainty *& Increased efficiency .& Key man indemnification 1& <nhancement of credit ;& ,usiness continuation >& =elfare to employees C. &o 3ociet0 1& Protection of wealth of society *& <conomic growth of country .& (educed inflation

"n3urance contract Insurance can $e defined as a contract $etween two parties where $y one party called insurer underta%es in e8change for affi8ed sum called premium, to pay to other party called insured a fi8ed amount of money on the happening of a certain e4ent& Insurance in4ol4e A& <lement of a general contract and ,& <lement of special contract relating to insurance&

The %$ecia# contract of in%urance in&o#&e% $rinci$#e%'


A. #enera6 contract -

'he 4alid contract, according to sec&1- of Indian contract act 1?@*, must ha4e following essentialities90 1& Agreement *& Legal consideration .& ree consent 1& !ompetency ;& legal o$jecti4e

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B .S5ecia6 contract3 1& *& .& 1& ;& >& @& ?& A& Insura$le interest 6tmost good faith Indemnity "u$rogation =arranties Pro8imate cause Assignment Gomination and (eturn of premium

i. "n3urab6e "ntere3t or a 4alid insurance contract, the insured must ha4e an insura$le interest in the su$ject matter of insurance& 'he insura$le interest in one where $y policy holders is $enefited $y the su$ject matter e8istence and is prejudiced $y the death or the damage of the su$ject matter& 'he essentials of insurance contract are90 'here must $e su$ject matter to $e insured& 'he policy holder should ha4e monetary relationship with the su$ject matter& 'he relationship $etween the policy holder and the su$ject matter should $e recogni7ed $y law& In other words there should not $e any illegal relationship $etween policy holder and the su$ject matter to $e insured& 'he financial relationship $5w the policy holder and the su$ject matter are such that the policy is economically $enefited $y the e8istence of the su$ject matter and 5or will suffer the economic loss at the death or the e8istence of su$ject matter& 'he su$ject matter is life in life insurance, property and goods in property insurance, lia$ility and insurance in general insurance& Insura$le interest is essentially a pecuniary interest i&e& the loss caused $y the happening of insured ris% must $e capa$le of financial 4aluation no& emotional or sentimental loss& As an e8pectation or an8iety should $e the ground $e one that if it happens, the party suffers financially and if it does not happen, the party is $enefited $y the e8istence& ,ut a mere hope or e8pectation which may $e frustrated $y the happening of some e8tent is not an insura$le interest& ii. 'tmo3t 1ood 4aith 'he doctrine of disclosing all material fact is em$odied in the important principle of utmost good faith# which applies to all form of insurance& ,oth parties of insurance contract must $e of the same mind at the time of contract& 'here should not $e any misrepresentation, non Hdisclosure or fraud concerning the material fact &In case of insurance contract the legal ma8im I!a4eat emptorJ /let the $uyer $eware2 does not pre4ail, where it is regarded the duty of the $uyer to satisfy himself of the genuine of the su$ject matter and the seller is under no o$ligation to supply information a$out it& ,ut in insurance contract the seller i&e& insurer will also ha4e to disclose all the material fact& 1*

Materia6 4act A material fact is one which affects the judgment or decision of $oth the party in entering the contract& acts which count materially are those which %nowledge influences a party in deciding the weather or not to offer or to accept such ris% and if the ris% is accepta$le, on what terms and conditions the ris% should $e accepted& 'hese facts ha4e a direct $earing on the degree of ris% in relation to the su$ject of the insurance& In case of life insurance, the material fact or factors affecting the ris% will $e age, residence, occupation health, income etc& and in case of property insurance, it would $e use, design, owner and situation of the property& )u66 and true di3c6o3ure 'he utmost good faith says that all the material facts should $e disclosed in true and full form& It means that the fact should $e disclosed in that form in which they really e8ist& 'here should $e no concealment, misrepresentation, mista%es or fraud a$out the facts& 'here should $e no false statement and no half truth or any silence or material fact& Dut0 o4 both 5artie3 'he duty to disclose material fact lies on the $oth the parties $ut in practice , the assured has to $e more particular a$out the o$ser4ance of this principle $ecause he is usually in the full %nowledge of the facts relating to the su$ject matter which, despite all effecti4e inspections of the insurer would not disclosed& )act3 need not to be di3c6o3ed b0 in3ured 'he following facts howe4er, are need not to $e disclosed $y the insurer& 1& acts which tends to reduce 5 lessen the ris% *& act of pu$lic %nowledge .& act which could $e inferred from the information disclosed 1& act wai4ed $y the insurer ;& acts go4erned $y the condition of policy& iii& ;rinci56e o4 indemnit0 As a rule all insurance contract e8cept personal insurance are contract of indemnity& According to this principle, the insurer underta%es to put the insured in the e4ent of loss, in the same position that he occupied immediately $efore the happening of the e4ent insured against& In certain form of insurance, the principle of insurance is modified to apply in true sense of indemnity& 'he insured is not entitled to ma%e a profit of his loss& '3e 1& &o di3cour3e o<er in3urance90 indemnity is an essential feature of an insurance contract , in a$sence of which , the industry would ha4e the hue of gam$ling and the insured would tend to effect o4er insurance and then intentionally cause a loss to occur so that a financial gain could $e achie4ed & "o to a4oid this intentional loss only the actual loss $ecome paya$le and not the assured sum& /=hich is higher in o4er insurance2 &if the property in under insured i&e& Insured amount is less than actual 4alue 1.

of the property insured, the insured is generally regarded his own insurer for the amount and in case of loss, he shall share the loss himself& *& &o a<oid an anti 3ocia6 act90 if the assured is allowed to gain more than the actual loss which is against the principle of indemnity, he will $e tempted to gain $y destruction of his own property after getting it insured against a ris% & He will $e inconstant temptation to destroy the property& 'hus the whole society will $e doing only anti social act i&e& the person world $e interested in gaining after destruction of the property& "o the principle of indemnity has $een applied where only the cash 4alue of his loss and nothing more than this will $e compensated, though he might ha4e $een insured for a greater amount& .& &o maintain the 5remium at 6o2 6e<e6 90 if the principle of indemnity is not applied , larger amount will $e paid for a smaller loss and this will increase the cost of insurance and the premium of insurance will ha4e to $e raised & if the premium is raised two things may happen first, person may not $e inclined to insure and second, unscrupulous persons could get insurance to destroy the property to gain from such act &$oth things would defeat the purpose of insurance & 'his principle is here to help them $ecause such temptation is eliminated when only actual loss and not more than actual financial loss is compensated pro4ided there is insurance up to that amount& Condition3 4or indemnit0 i& 'he insured has to pro4e that he will suffer loss on insured matter at the time of happening of e4ent and the loss is actual monetary loss& ii& 'he amount of compensation will $e the amount of insurance indemnification can not $e more than insured amount& iii& If the insured gets more amount than the actual loss the insurer has the right to get the e8tra amount $ac%& i4& If the insured gets some amount from the third party after $eing fully indemnified $y the insurer then the insurer will ha4e the right to get 5recei4e all the amount paid $y the third party 4& It does not apply to personnel insurance $ecause amount of loss is not easily calcula$le& i<. Doctrine o4 3ubro1ation It refers to the right of the insurer to stand in place of insured, after settlement of claims in so far as the insuredIs right of reco4ery from an alternati4e source is in4ol4ed& If the insured is in apposition to reco4er the loss in full or part from a third party, due to whose negligence , the loss ha4e occurred K his right of reco4ery is $eing su$rogated to insurer on the settlement of the claims & 'hereafter, the insurer reco4ers claims from the third party& 'his right can $e e8ercises $y the insurer $efore the payment for the loss also&

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E%%entia#% of doctrine of %ubro(ation


1& Coro66ar0 to the 5rinci56e o4 indemnit0 9 0 it is the supplementary to the principle of the indemnity& 'he latter says that only actual 4alue of loss of property is compensated while latter says that if the damaged property has any 4alue left or any right against the third party, the insurer can su$rogate the left property or the right of property& *& Subro1ation i3 3ub3titution9 0 the insurer $ecomes entitled to all the rights of the insured su$ject matter after the payment $ecause he has paid the actual loss of the property& He su$stituted in place of other person who acts on the right and claims of the property insured& .& "u$rogation is only up to the amount of payment& 1& "u$rogation may $ applied $efore payment &if the assured gets certain compensations from third party $efore $eing fully indemnified $y the insurerK the insurer can pay the $alance of loss& ;& 'his principle does not apply to personnel insurance $ecause the doctrine of indemnity is not applica$le to such insurance& <. .arrantie3 It is that $y which the assured underta%es that some particular things shall or shall not $e done or that some conditions would $e fulfilled or where $y he affirms or negati4es the e8istence of a particular state of facts &warranties which are e8pressed in the policy are e8pressed warranties and which are not are implied warranties & =arranties are an important condition in insurance contract which is to $e fulfilled $y the insured& :n the $reach of the warranties the insurer $ecomes free from the lia$ility& therefore insured must ha4e to fulfill the condition and promises during the insurance contract weather it is important or not in connection with ris% &the contract can continue only when warranties are fulfilled or 4ice 4ersa& <i. ;ro>imate cau3e 'he rule is that immediate and not the remote cause is to $e regarded& 'he ma8im is sad cause pro8imate non remote spectator i&e& "ee the pro8imate cause and not the distant cause& 'he real cause must $e seen while payment of loss& If the real cause of loss is insured, the insurer is lia$le to compensate for the loss& ,ut the pro8imate cause is not a de4ice to a4oid the trou$le of disco4ering the real cause or the common sense cause& Pro8imate cause means the acti4e efficient cause that sets in motion a train of e4ent which $rings a$out a result without interruption of any force started and wor%ing acti4ely from anew and independent source& 'he determination of real cause depends upon the wor%ing and practice of insurance and circumstances to losses& A loss may not $e occasioned $y a mere e4ent& 'here may $e concurrent causes or chain of causes& 'hey may occur in a se3uence or in a $ro%en chain&

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)etermination of $ro*imate cau%e


1& If there is a single cause of loss, the cause will $e pro8imate cause and further if the peril was insured, insurer will ha4e to $e indemnify the loss& *& If there are concurrent losses, the insured peril and e8pected peril ha4e to $e segregated& 'he concurrent cause may $e the first separa$le and insepara$le& 'he loss due to a particular cause may $e separately %nown 5 distinguisha$ly %nown& In such a case, if any cause is e8pected peril, insurer will ha4e to pay up to the e8tent of the loss which occurred due to insured peril& If the circumstances are such that the perils are insepara$le, then the insurers are not lia$le at all where an e8pected peril e8ist& A33i1nment or &ran34er o4 intere3t It is necessary to distinguish $etween assignments of 0 su$ject matter of insurance, policy, and policy money when paya$le& +arine and life insurance policies can $e freely assigned $ut the assignment under fire and accidental insurance policies are not 4alid without the prior consent of the insurer He8cept changes of interest $y will or operation of law & +oreo4er assignment under fire and accidental insurance policies must $e made $efore the insured part with his interest& :nce he has lost the interest, the policy is 4oid and can not $e assigned& Life policies can $e assigned weather the assignee has an insura$le interest or not& Life policies are fre3uently charged, assigned or otherwise dealt with, for they are the 4alua$le securities& A marine policy is fre3uently 5 freely assigned unless it contains terms e8pressly prohi$iting assignment& It is assigned $efore or after loss& Assignment in fire insurance can not $e recogni7ed without prior consent of insurer, change of interest in fire policy are not 4alid unless and until the consent of the insurer is o$tained& <iii. *eturn o4 5remium :rdinarily the premium once paid cannot $e refunded& Howe4er in following cases refund is allowed& a B0 a1reement in the 5o6ic0 - the assured may pay full premium while affecting the insurance , $ut it may $e agreed to reduce it wholly or partially in the happening of the e4ent &for e8ample special pac%ing may reduce the ris%&

$& )or rea3on3 o4 e?uit0 - it includes certain important points9 1. $on attachment o4 ri3@ - where the su$ject matter insured or part there of has ne4er $een imperiled for e8& term insurance with returna$le premium where premium is returned to the policy holder if death does not occur during period of insurance&

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'ndec6ared ba6ance o4 an o5en 5o6ic0 - 'he policy may $e canceled and premium may $e return for short interest allowed pro4ided there was no further interest in the policy& 3. .here a33ured ha3 no in3urab6e intere3t - 'hrough out the currency of the ris%& Premium is returna$le pro4ided policy was not attached $y way of wagering& 4. 'nrea3onab6e de6a0 90 6nreasona$le delay in commencing the 4oyage may also entitle the insurer to cancel insurance $y returning premium A. =here the assured has o4er insured under an un4alued policy, a proportionate part of premium is returna$le& %<er in3urance b0 doub6e in3urance - If there is o4er insurance $y dou$le insurance, a proportionate part of se4eral premiums returna$le pro4ided that if policies are ta%en different times and any earlier policy has at any time $orn the entire ris% or if a claim has $een paid on the policy in the respect of the full insured there$y no premium is returna$le in respect of that policy and when dou$le insurance is affected %nowingly $y assured, no premium is returna$le&

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!IFE INSURANCE
Life insurance contract may $e defined as the contract where$y the insurer in consideration of a premium underta%es to pay a certain sum of money either on the e8piry of the fi8ed period or on the death of the insured& According to section * /*2 of Insurance Act 1A.? life insurance also includes annuity $usiness& "ince the life insurance contract is not an indemnity contract, the underta%ing on the part of the insurer is an a$solute one to pay a definite sum of money maturity of policy at the death or an amount in installment for affi8ed period or during the life&

Feature% or E#ement% of !ife In%urance contract


1& *& .& 1& ;& >& @& ?& Gature of general contract Insura$le interest 6tmost good faith =arranties Pro8imate cause Assignment and nomination (eturn of premium :thers&

In life insurance contract, the first three features are 4ery important, while rests of them are complimentary in nature&

+, Nature of (enera# contract


Life insurance is also a short of general contract& It includes all the essential features of general contract, as agreement, competency, legal o$jecti4es, legal considerations, free consent of parties etc& a& %44er and acce5tance - An offer or proposal is intimation to another of oneJs intention to do or to a$stain from doing anything with a 4iew to o$tain the assent of that other person to such an act& =hen the person to whom the proposal is made signifies his assent to it, the offer is said to $e accepted& 'he offer and acceptance of life insurance is of typical type& 'he proposal form is completed $y the proposer and along with the proposed for first premium is paid& 'he same may $e accepted at the normal rate and norms& 'he agentsJ can4assing or pu$lication of prospectus and of uses of insurance constitutes in4itation to offer $ecause the pu$lic in general and indi4idual in particular are limited to ma%e proposal for insurance& "u$mission of proposal along with the premium is an offer and dispatch of acceptance letter is acceptance& 'he ris% will commence as soon as acceptance letter dispatched $y the insurer& =hen the proposal in not accompanied with first premium, it would $e an in4itation to offer $y prospects and the letter of insurer /generally letter of acceptance with modification is sent2 as%ing the proposer to pay the first without any alteration is an offer and payment of first premium is acceptance&

1A

$& Com5etenc0 the essential element of a 4alid contract is that the parties to it must $e legally competent to contract& <4ery person is competent to contract H who is of the age of majority according to the law, who is of the sound mind, and who not dis3ualified from contracting $y any law& 'he insurer will $e competent to contract if he has got the license to carry on insurance $usiness& 'he insurer is wor%ing with the article of association and memorandum of association or deed of partnership& c& )ree con3ent $oth the parties must $e of the same mind at the time of the contract& If the two parties do not meet in this respect, there is no perfect agreement $etween them& It is necessary to call it free consent of the parties that the contract is not made through coercion, undue influence, fraud, misrepresentation or mista%es& In life insurance $usiness $oth parties must %now a$out the nature of ris% to $e underwritten& If the consent is not free , the contract is generally 4oida$le at the option of the other party whose consent was not freely gi4en&/section 1.2 d& +e1a6 con3ideration the presence of a lawful consideration is essential for a legal contract& 'he insurer must ha4e some consideration in return for his promise to pay a fi8ed sum at maturity or death whiche4er may $e the case& 'he consideration need not $e money only& It should $e any thing 4alua$le or to which 4alue may $e assigned& It may $e interest, di4idend, right etc& In (aj Garayan 4s& Hindustan !ooperati4e Insurance, the insurance was accepted $ut policy was not issued $y the insurer& 'he insured died and could get the policy amount in allegiance of the policy $ecause at the payment of the premium contract was complete& 'he first premium is consideration and the su$se3uent premium is merely conditions to contract& e& +e1a6 objecti<e3 the contract would $e legal only when the o$ject is legal& 'he o$ject of the legal life insurance contract is to protect oneself or one family against financial losses at the death of the insured& 'he contract is some times to pro4ide for financial contingencies5emergencies that may occur in old age& In $rief the contract will $e lawful only when the o$jecti4e is legal& 'he o$jecti4e will $e legal only when there is insura$le interest& =ith out ha4ing this interest, the o$jecti4e of the contract would not $e legal& It would $e a wager contract and against pu$lic policy& 2. In%urab#e intere%t It is a pecuniary interest& 'he insured must ha4e an insura$le interest in the life to $e insured for a 4alid contract& Insura$le interest arises out of pecuniary relationship that e8ist $etween the policyholders and the life assured so that the former stands to loose $y the death of the latter and 5or continues to gain $y his sur4i4al& Insura$le interest in life insurance may $e categori7ed in two parts that is9 a. in3urab6e intere3t in o2n3 6i4e An indi4idual has an insura$le interest in his own life& Its presence is not re3uired to $e pro4ed& ,unyon says that e4ery man is presumed to possess an insura$le interest in his estate for the loss of his future gains or sa4ings *-

which might $e the result of his premature death&# According to the definition of insura$le interest it is also e4ident that the person will continue to gain financially while he is sur4i4ing and he will suffer losses if he is dead $ecause he will $e una$le to earn or protect the property& 'he insura$le interest in his own life is unlimited $ecause the loss to the insured and his dependent can not $e measured in terms of money and therefore no limits can $e placed to the amount of the insurance that one may ta%e on oneJs own life& 'hus theoretically a person can ta%e a policy to any unlimited amount on his own lifeK $ut in practice no insurer will issue a policy for an amount larger than amount seems suita$le to the circumstances and means of applicant& Eenerally, it is mentioned one cannot purchase policy usually more than 1- times of his one year income& 'he premium can $e paid $y the .rd party pro4ided there is no intention to speculation& If there is possi$ility of wager contract it would $e 4oid& b. "n3urab6e intere3t in other 6i4e Life insurance can $e affected on the life of . rd party pro4ided the proposer has insura$le interest in others life& 'here are * type of insura$le interest a) .hen no 5roo4 i3 re?uired 0there are only * cases when no proof is re3uired for the insura$le interest as they are legally presumed 1) 2i4e ha<e in3urab6e intere3t in the 6i4e o4 hu3band 0it is presumed ) decided $y reed Ds royal e8change /1@A;2 that wife is presumed to ha4e insura$le interest in the life of her hus$and $ecause hus$and is legally $ound to support the life of his wife& 'he wife who will suffer financially if hus$and is dead and will continue to gain if hus$and is sur4i4ing& "ince the e8tent of loss or gain can not $e measured in this case hence wife has insura$le interest in the hus$and life up to an unlimited e8tent 2) !u3band ha3 in3urab6e intere3t in the 6i4e o4 2i4e 0 Insura$le interest presumed to e8ist here and no proof is re3uired& It was decided Eriffith 4s& leming /1A-A2 that the hus$and has insura$le interest in his wifeJs life $ecause of domestic ser4ices performed $y his wife& If the wife is dead the hus$and has to employ other person to render domestic ser4ices ) certain other financial e8penditure will in4ol4e at her death which is not calculated& 'he hus$and is $enefited at the sur4i4alK of his wife, so it is self pro4ed that hus$and has insura$le interest in his wifeJs life& "ince monetary loss at her death or monetary $enefit at her sur4i4al can not $e measured there is unlimited insura$le interest in the life of wife& b) ;roo4 i3 re?uired Insura$le interest has to $e pro4ed in following cases90 1) ,usiness relationship9 0 the policyholder may ha4e insura$le interest in the life of assured due to the $usiness or contractual relations& In this case the amount of insura$le corresponds with the amount of ris% in4ol4ed& some of the e8amples are0 A creditor has in the life of de$tors& A trustee has insura$le interest in respect of interest of which he is trustee A partner has insura$le interest in the life of the other partners& An insurer has in the life of the insured& An employee has in the life of %ey man& 2) family relationship9 0 insura$le interest may arise due to family relationship if pecuniary interest e8ist $etween policyholders and life assured $ecause mere relationship or ties of $lood and of affection does not constitute insura$le interest, the proper must ha4e reasona$le e8pectation of financial $enefit from the *1

continuance of the life of the person to $e insured or of financial loss from his death& 'he interest must $e $ased on 4alue and not on mere sentiments& "imilarly moral o$ligations are not sufficient to warrant e8istence of insura$le interest although legal o$ligations to get support will form insura$le interest of the person who is supported in life or the person who is supporting& 'hus a son can insure his fatherJs life only when he is dependent on him and father can ta%e insurance policy on his sonJs life only when he is dependent on his son&

Genera# ru#e of in%urab#e intere%t in #ife in%urance


1) &ime o4 in3urab6e intere3t9 0 'he insura$le interest must e8ist at the time of proposal& Policy without insura$le interest will $e wager& It is not essential that insura$le interest must $e present at the time of claim& 2) Ser<ice3 0 e8cept the ser4ice of wife, ser4ices of other relati4es will not essentially form insura$le interest& 'here must $e financial relationship $etween proposer and the life insured& In other words, ser4ices performed $y the son will not constitute insura$le interest of the father in the life of his son& Dice 4ersa is not essentialK for forming insura$le interest& 3) "n3urab6e intere3t mu3t be <a6uab6e 9 0 In $usiness relations the 4alue or the e8tent of insura$le interest must $e determined to a4oid wager contract of additional insurance& Insurance is limited only up to the amount of insura$le interest& 4) "n3urab6e intere3t 3hou6d be <a6id9 0 insura$le interest should not $e against the pu$lic policy and it should $e recogni7ed $y the law& 'herefore the consent of the life assured is 4ery essential $efore the policy can $e issued& A) &he 6e1a6 re35on3ibi6it0 ma0 be on the ba3i3 o4 the in3urab6e intere3t 9 0 since the person will suffer financially up to the e8tent of responsi$ility, the proposer has insura$le interest to that e8tent& or instance a person will $e under the legal responsi$ility to e8pose at the funeral of his wife and childrenK he can purchase insurance in their li4es up to that e8tent& B) "n3urab6e intere3t mu3t be de4inite9 0 the insura$le interest must $e present at the time of proposal& +ere e8pectation of gain or support will not constitute insura$le interest& C) +e1a6 con3e?uence39 0 the insura$le interest must $e there to form legal and 4alid insurance contract& =ith out insura$le interest, it would $e null and 4oid& 3. Utmo%t (ood faith 'he life insurance re3uires that the principle of utmost good faith should $e preser4ed $y $oth parties& 'his says that $oth parties i&e& insured and insurer must $e of the same mind at the time of contract $ecause only then the ris% may $e correctly ascertained& 'hey must ma%e full and true disclosure of the facts material to the ris%& Materia6 4act3 - In life insurance national facts are age, income occupation, health, ha$its, residence, family history and plan of insurance& 'hese are not determined or the $asis of opinion and therefore all facts must $e disclosed which insured feel as material& Dut0 - It is the duty of $oth the parties to disclose all material facts which are going to influence the decision of other party since the decision is ta%en on the $asis of su$ject matter, the life to $e insured in insurance and national facts relating to su$ject matter are **

%nown or is e8pected to $e %nown $y proposerK it is much more responsi$ility of the proposer to disclose the material facts& It should also $e noted that all the disclosed facts must true to its nature and must $e authenticated& +e1a6 con3e?uence3 - In the a$sence of utmost good faith the contract will $e 4oida$le at the option of the person who suffered loss due to non0disclosure& 'he intention at non0 disclosure counts frauds and is 4oid a$0initio and unintentional non0 disclosure is 4oida$le at the option of party not at fault& :nce the 4oida$le contract not at fault has $een 4alidated $y the party not at fault the contract cannot a4oided $y him later on for instance, if the insurer has continue to accept the premium when certain non disclosure, say mis0statement of age, has $een disclosed the insurer can not in4alid the contract and cannot refute the amount of claims& If the party not at fault does not e8ercise its option, the contract will remain 4alid&

Fact% not re-uired to be di%c#o%ed


!ircumstances which are diminishing the ris%& acts which are %nown or reasona$ly should $e %nown to insurer in his ordinary course of $usiness& acts which the insurer should infer from the information gi4en& acts which are wai4ed $y the insurer& acts which are superfluous to disclose $y reasons of a condition or warranties& acts of pu$lic %nowledge&

., /arrantie%
or understanding warranties representations# are to $e thoroughly understood $ecause in life insurance those representations which are em$odied in the policy and are e8pressly or impliedly forming the part on the $asis of the contract are called warranties& <4ery information gi4en $y the proposer for insurance to the insurer during negotiation is representation& =arranties are an integral part of the contract i&e& these are the $asis of the contract $etween the proposer and insurer and if any statement, weather material or non0 material is untrue, the contract shall $e null and 4oid and the premium paid $y him may $e forfeited $y the insurer& 'he policy issued will contain that the proposal and the Personnel statement shall form part of the policy and $e the $asis of the contract& "o that representation will $e warranties& As has $een disclosed already that the warranties may $e H informati4e and promissory& i& "n4ormati<e 2arrantie39 0 in life insurance the informati4e warranties are more important& 'he person is e8pected to disclose all the material facts to the $est of his %nowledge and $elief& ii& ;romi33or0 2arrantie39 0 warranties related to the future may only $e the statement a$out his e8pectation or intention, for instance the proposer promises that he will not ta%e up any ha7ardous occupation and will inform the insurer if he will ta%e up the ha7ardous occupation&

*.

Breach o4 2arrantie3 If there is $reach of warranties, the insurer is not $ound to perform his part of contract unless he chooses to ignore the $reach& 'he effect of a $reach of warranties is to render the contract 4oida$le at the option of the other party pro4ided there is no element of fraud& In case of fraudulent representation or promise, the contract will $e 4oid a$0 initio& A. Pro*imate cau%e 'he efficient or effecti4e cause which causes the loss is called pro8imate cause& It is the real and actual cause of loss& If the cause of loss /peril2 is insured, the insurer will payK other wise the insurer will not compensate& In life insurance the doctrine of causa pro8ima /pro8imate cause2 is not applied $ecause the insurer is $ound to pay the amount of insurance whate4er may $e the reason of death. It may $e natural or unnatural& "o, this principle is not of much practical importance of connection with life assurance, $ut in the following case the pro8imate causes are o$ser4ed in the life insurance, too& i& .ar ri3@ - where policy issued on e8clusion of war an a4iation ris%, the pro8imate cause of death is important $ecause the insurer wai4es its lia$ilities if death occurred , in this case , while the insured was in field or is engaged in operation of war and a4iation & :nly premium paid or surrender 4alue whiche4er is higher paya$le and the total policy amount is not paya$le& ii& Suicide9 0 if suicide occurs with in one year of the policy, or there, was intention to commit suicide and the payment of policy would $e restricted, only up to the interest of the third party in the policy pro4ided the interest was e8pressed at least one month $efore the suicide& iii& Accident bene4it90a pro$lem arises when an insured under an accident policy is %illed or suffer an injury which has an immediate cause and also a remote cause& In accident $enefit policy, dou$le of policy amount is paid& "o, the cause of death in this policy is of paramount importance&

B. A%%i(nment and cau%e 'he policy in the life insurance can $e assigned freely for the legal consideration or lo4e and affection& 'he assignment shall $e complete and effectual only on the e8ecution of such endorsement either on the policy itself or $y any separate deed& Gotice for such purpose must $e gi4en to the insurer who will ac%nowledge the assignment& :nce the assignment is completed, it can not $e re4o%ed $y the assignor $ecause he ceases to $e the owner of the policy unless reassignment is made $y the assignee in fa4or of the assignor& An assignee may $e the owner of the policy $oth on sur4i4al of the life assured, or on his death according to the terms of transfer& 'he life policy are the only which can $e assigned weather the assignee has insura$le interest or not& Life policies are fre3uently charged , assigned or dealt with for they are 4alua$le securities $ecause a fi8ed sum is certainly paid in life policies e8cepting a few , say, pure endowment and temporary policies &

*1

$omination3 'he holder of a policy of a life insurance on his own life may either at the time $efore the policy matures, nominates the person or persons to whom the money secured $y the policy shall $e paid in the e4ent of his death& A nomination can $e cancelled $efore maturity, $ut unless notice is gi4en of any such cancellation to the insurer, the insurer will not $e lia$le for any $ona fide payment to a nominee registered in a record& =hen the policy matures, or if the nominee dies, the sum shall $e paid to the policyholder or his legal representation& C. Return of $remium :rdinarily, the premium once paid can not $e refunded& Howe4er in the following cases the premiums paid are returna$le9 )or rea3on3 o4 e?uit0 <3uity implies a condition that the insurer shall not recei4e the price of running a ris% he runs &thus, there the contract does not come into effect or it is held to $e 4oid a$s into& or e8ample, an account of misrepresentation or $reach of warranty, the insured, in the a$sence of any e8press condition to contrary, can claim the return of any premium paid& ,ut if the policy runs for a time ) $ecome 4oid later on the insured is not entitled to the return of any part of the premium& =here the insured is guilty of fraud in o$taining a policy, he will fail in his claim to the sum assured& He can not also as% for a return of the premium $ecause he will ha4e to allege his own fraud to succeed in his claim ) no court will assist such person& D. Other feature% Life insurance policies ha4e the following additional features9 I& 'ni6atera6 contract 0 life insurance contract unilateral contract $ecause, here, only the insurer ma%es an enforcea$le promise& 'he proposer had already performed his duty of payment of premiums& If the first premium is paid, the insurer is $ound to accept su$se3uent premium ) to pay the amount claim when it arises e8cept on the ground of fraud& II& Conditiona6 contract9 life insurance is a conditional contract $ecause the insurer shall pay the assured sum only when the contract is continuing $y payment of premium& In addition the insurerJs promise to pay the sum assured is also conditional upon the furnishing of satisfactory proof of death ) other condition mentioned in the policy& III& "ndemnit0 contract i3 not a556ied 9 in life insurance the indemnity contract is not applica$le $ecause the 4alue of loss at death cannot $e ascertained& It is not possi$le to ascertain the time up to which the insured would ha4e sur4i4ed ) it is also difficult to ascertain the amount of money to $e earned $y him during life time& "o, the doctrine of su$rogation is not applica$le too&

*;

C!ASSIFICATION OF PO!ICIES
'he life insurance contract pro4ides an element of protection and instrument& After getting insurance, the policy holders feels a same sense of protection $ecause he feels that he shall $e paid a definite sum at the time of maturity& "ince a definite sum must $e paid, the element of in4estment pro4ides against pre0mature death and a fi8ed sum at the maturity of policy &'he two elements of in4estment and protection e8ist in 4arious degrees in different types of policies& Got only this $ut these element 4ary according to different times in the same policy the older the policy the lesser the element of protection ) higher the element of in4estment ) 4ice-04ersa& Ha4ing different element in different policies, the policyholders are free to choose the policy according the re3uirement& It would $e %nown that no one policy is $est for the entire policy holder due to 4ariance in cost, element of in4estment ) protection re3uirement of policyholder ) a4aila$ility of policy& 'he life insurance policies can $e di4ided in to ; categories9 12 Duration of policy *2 +ethod of premium payment .2 Participation in profit 12 Gum$er of li4es co4ered ;2 +ethod of payment of claim amount

+' Po#icy accordin( to duration of $o#icy


'he life insurance policy according to duration may $e whole life, term insurance, endowment insurance, and sur4i4orship policy& i. .ho6e 6i4e 5o6icie3 - such policies are issued for life& It means that the policy amount must $e paid at the death of the life assured& 'he life assured, thus can not get the policy amount during the life timeK only his dependent will get the ad4antage of this policy& "uch policy can $e affected $y the payment of single payment, continuous payment or limited premium& 'he single premium payment is not 4ery common where as the limited payment is the most common and popular form of whole life policy $ecause of con4enience to the policyholder to arrange the payment of premium during his income earning period& In continuous premium payment, this $enefit is not a4aila$le $ecause premium is not paya$le up to the life of the policyholder& 'his is loosing its importance $ecause only the dependent of the life assured are getting the $enefit& Also in e8treme cases he Lpays more $y way of premium than $enefit recei4a$le under the policy and that too when earning capacity of the assured is reduced& 'his plan is cheaper and $est suited to the young man with limited resources and whose re3uirement for protection is ma8imum& It is also $eneficial to pay estate duty& If the payment of premium ceases after at least . years premium ha4e $een paid as can $e allowed according to the rule will $e automatically secured pro4ided the reduced sum assured is not less than (s& *;-& &erm in3urance 5o6icie3 - "uch policies are for the shorter period ranging from . months to @ years& "um insured is paya$le only in the e4ent of the death of the life assured, occurring during the period, $ut the assurance comes to an endK should the life assured sur4i4ed& *>

ii.

'hese are the cheapest policies& 'hese policies are without profit policies& 'erm insurance policies are useful to those 9 =ho need e8tra protection for a shorter duration or =ho need protection for longer duration $ut are una$le to purchase for the time $eing due to ill health or lesser income A young $usiness man can ta%e the policy to sa4e the $usiness disaster during initial stages of $usiness A %ey manJs insurance is generally on term insurance $asis A mortgagor of the property may $e $enefited $y this scheme A father can ta%e up this policy during the education of his children Any person who is willing to pro4ide insurance for a shorter period& iii& (ndo2ment 5o6ic09 these policies are of 4arious types9 a) ;ure endo2ment 5o6ic0 - 'he sum assured is paya$le on the life assureds sur4i4ing the endowment term& In the e4ent of his death within the term premium may $e returna$le or not& In corporations all the premium paid without any deduction will $e refunded to& 'hus the pure endowment policy is opposite to the term policy& Actually these two policies i&e& pure endowment and term policy are the $ases of all the policies& Pure endowment policies are for the $enefit of others& "o the pure endowment policy has the element of protection& Pure endowment grants protection against li4ing too long# while term insurance policy grants protection against li4ing too short#& 'he former is old age protection while latter is for family protection& b) %rdinar0 endo2ment 5o6ic0 - 'his is the policy which actually represents life insurance in true sense& It pro4ides an ideal com$ination of $oth the family protection and in4estment& It is ta%en out for a specific term of years, the sum assured $eing paya$le <ither on the assured death during the period or on his sur4i4al to the end of the period& Premium are paya$le through out the term of the policy or to a limited period or till the prior death of the life assured& :rdinary endowment policy is the com$ination of term insurance and pure endowment& "o net premium for the endowment policy is e3ual to the net premium of term and pure endowment polices issued at same age, for the same period of time& 'his pro4ides solutions to 4arious pro$lems of life weather li4ing too long or too short& In other words old age pro4ision and family protection is possi$le $y purchasing only this single policy& +oreo4er compulsory sa4ing in possi$le due to this policy which is not present in other type of sa4ing &it is a means of hedging against the this possi$ility of sa4ing period $eing cut short $y death& 'he neat ad4antage of this policy is to meet marriages, educations other re3uirement of family& c) 8oint 6i4e endo2ment 5o6ic0 - this policy co4ers more than one life under the single policy& 6nder this plan, the sum assured is paya$le on e8piry of the term or on the death of one of the assured li4es during the endowment period& Premiums are paya$le throughout the endowment period or till the prior death of any one of the li4es assured& 'he premium is calculated with certain modifications according to the age of all the insured partners& Paid up and surrender 4alue are paya$le on the policies& 'his policy is suited to a partner of the firm $ecause firm will not discontinue on the tremendous outflow of the fund at the death of the partner& It is also $eneficial to a couple& *@

*?

2. Po#icie% accordin( to the $remium $ayment'0 It can $e again classified into two heads i&e&9 a& Sin16e 5remium 5o6ic09 0 in this policy the whole premium is paid at the $eginning of the policy& As compared to the annual premium paya$le, it is costlier , $ut as compared to aggregate of all the premium annually paya$le , it is much smaller $ecause all the premium are recei4ed in ad4ance and the insurer can earn additional amount on premium recei4ed & 'his type of policy can $e afforda$le $y those who get a windfall gain 5 income and are e8pected not to continue such return in the su$se3uent years& 'he single premium policy is not useful to other persons $ecause of the chances of the deaths where after the su$se3uent premium are not re3uired to $e paid& b& 6e<e6 5remium 5o6ic09 0 under this policy regular and e3ual premium are paid at the definite inter4al& 'his premium is lesser than the single premium and is con4enient to ma%e premium at a regular period& 'his may ta%e the shape of an e8pense and can $e paid& 'he e3ual installment may $e paid monthly, 3uarterly, half yearly, and yearly& "o it suits the re3uirement of different types of policyholder&

3. Po#icie% accordin( to $artici$ation in $rofit


a. .ithout 5ro4it or non- 5artici5atin1 5ro4it 9 'he holders of such policy are not entitled to share the profit of the insurer& 'his policyholder gets only the sum assured and no $onus is gi4en to them& b. .ith 5ro4it or 5artici5atin1 5ro4it9 the holder of such policies are entitled to share profit and not the loss, they can not $e treated as the co0owner of the $usiness& I f there is any lossK the policyholder can not get the $onus i&e& the share in the profit& 'he amount of $onus depends on the profit after deduction of pro4ision for the ta8es, contingencies etc& "uch policy does not guarantee that policyholder will get $onus or something $y way of profit e4ery year& 1& ;o6icie3 accordin1 to the number o4 5er3on3 in3ured a. Sin16e 6i4e 5o6ic09 6nder such policy only one indi4idual is insured& It is not necessary that the policy should $e issued in oneJs own life, it may $e in others life, $ut the fact is that this policy insures only one life& 'he policy amount is paya$le only when insured e4ent occurs& b. mu6ti56e 6i4e 5o6ic09 In this policy more than one life is insured& It may $e0 joint life policy or last sur4i4orship policy& 8oint 6i4e 5o6ic0 - It co4ers more than two life and the policy amount is paya$le on first death& 'his is $eneficial to the partners of a firm and to a couple& +a3t 3ur<i<or3hi5 5o6ic0 - the policy amount is paya$le at the death& "o long as any insured is ali4e, no payment is made&

A. ;o6icie3 accordin1 to the method o4 5a0ment *A

a& +um5 3um 5o6ic0 - where the sum is assured is paid in lump sum at the e4ent insured against& $& "n3ta66ment or annuit0 5o6ic0 - 6nder this policy the policy amount is paya$le in installment& It is $eneficial to those whose earning capacities are reduced to minimum in old age& At that time, this policy may $e more helpful& He may continue to get up to a fi8ed period or up to death or $oth&

RIS1 AN) ITS C!ASSIFICATION


C6a33e3 o4 ri3@39 'he 4arious life ris%s cannot $e treated indi4idually so they are put under a few $road categories $ased on the degree of ris%s& 'here are two main classes of ris%s9 12 6ninsura$le ris%s *2 Insura$le ris%s 'nin3urab6e ri3@39 If the insurance can $e purchased at higher premium there should not $e any uninsura$le ris%s& 'heoretically, after in4estigating all factors affecting a ris% the life insurance company should $e a$le to gi4e each due considerations and determining the premium charge for the insurance& Practically, howe4er there are a num$ers of reasons why some persons are not insura$le& 'he premium would $e much high for these persons which will $e against the insurance principle $ecause higher premium will stimulate only to those who are at the death $ed& If they are allowed it would $e a case of speculation $ecause after payment of a few premiums he will $e gaining& It would $e unfair to other healthy policyholders& "o, in order to protect the e8isting policyholder, the insurance company must accept those ris%s against which it can assess ade3uate and fair premium to pro4ide for claims& "n3urab6e ri3@39 Insura$le ris%s are those which after the selection process can $e carried out $y an insurer although there can $e different terms and conditions for different policyholders& 'here is a standard of ris%s, if the ris%s are not too great it can $e insured as su$ standard ris% e4en if he does not meet the re3uirement of a standard ris%& 'he ris% of death among su$ standard li4es 4aries $ut in all cases it is higher than that of standard li4es& Insura$le ris%s are di4ided in to three $road categories0 standard, su$ standard and super standard ris%s& <4ery insurer does not use all these classifications& a2 Standard ri3@ 'he standard ris% is related with the normal life where there is no much or no less ris%& 'here are certain criteria on which the ris% is judged as normal life& It does not refer ideal or first class life $ut it is rather it is rather a mi8 of good and $ad li4es& 'his group does not contain only those persons who are free from all the impairments or those persons who are under serious illness& It is the group where majority of persons can $e included and who may $e either more or less than a4erage& $2 Sub Standard ri3@ "u$ standard ris% is those ris%s which are higher though insura$le than the standard ris%& 'hus, the su$ standard ris%s are a$o4e the standard ris%s and $elow the uninsura$le ris%s& If the life proposed crosses the ma8imum limit of su$ standard ris% that will $e treated as uninsura$le& 'he su$ standard ris% is insured after the payment of additional premium& .-

c2 Su5er 3tandard ri3@9 the super standard ris% is present where there is lesser ris% than the standard ris%& 'his is also called preferred ris%& An insurer does not prefer ris% policies $ecause it increases the premium on the other standard ris% which may cause reduction in losses of $usiness&

PREMIUM AN) CUSTOMER SATISFACTION


'he premium is of two types0 net premium and gross premium& 'he two premiums are further su$ di4ided in to two parts90a2 single premium and $2 le4el premium& 'he net premium is $ased on mortality and interest rate whereas the gross premium depends on mortality rate, the assumed interest rate, the e8penses and the $onus loading& "ingle premium is paid in one lump sum while the le4el premium is paid periodically in installments& 'he le4el premium is yearly, half yearly, 3uarterly and monthly& irstly net premium is calculated and other premiums are $ased on this calculation& $et 3in16e 5remium It is that premium which is recei4ed $y the insurer in a lump sum and is e8actly ade3uate, along with the return earned thereon, to pay the amount of claims where4er it arises whether at death or e4en at surrender& It does not pro4ide for e8penses of management and for contingencies& Ste5 4or ca6cu6ation 1. Determine what constitute a claim /a2 death, /$2 sur4i4al, or /c2 $oth& 2. Determine when claims are paid /a2 at the $eginning, /$2 at the end, or /c2 during the year& 3. Determine the num$er of insured& 4. Determine the duration of policy& A. Determine the pro$a$le num$er of claims per year& B. Determine the 4alue of claims per year& C. Determine the num$er of year of interest in4ol4ed and find the present 4alue of a rupee& D. Determine the present 4alue of claims for each year& E. Determine the present 4alue of all future claims& 10. Determine the net single premium di4ided $y num$er assumed for $uying policy& A33um5tion under60in1 the rate com5utation3 'here are certain 4aria$les which are to $e assumed at a le4el for calculation and alterations in premium calculation are made at later stage according to the changes in the 4aria$les& 'he following factors are assumed while calculating the net single premium& 1& As many policies of the gi4en type are $eing issued as are the num$er of persons *& Premium is collected in ad4ance or in the $eginning of the period& .& All collections are immediately in4ested and will remain in4ested until money is needed for the payment of claims 1& 'he insurer will recei4e an assumed rate of interest& 'he assumed rate should $e conser4ati4e to a4oid future decline in interest rate& .1

;& 'he interest or di4idend or any return of the in4ested fund is immediately in4ested for re0earning& >& +ortality rate will $e same as gi4en in the mortality ta$le and will $e uniformly distri$uted through out the year& @& All policies are of same amount& ?& !laims will $e paid only at the end of the period& 'hese assumptions may not $e totally practica$le $ut they are ta%en for ma%ing calculations easy& 'he changes in the assumptions can $e adjusted accordingly& 'he premium does matter in all types of policies& It is the premium rate which is determined and thus has an impact on the customer& 'he customers who adopt the life policy mainly $elong to lower0 middle, middle, and upper0 middle class of the society& Hence premium amount matters a lot& Higher the premium lower will $e the customer $ase and 4ice0 4ersa& Howe4er, if the policy pro4ides certain e8tra $enefit to the customer then customer satisfaction would $e higher&

IN2ESTMENT OF FUN)S
=hile calculating the premium, it has $een assumed that the accumulated premiums are in4ested& 'he funds are in4ested to earn at least assumed rate of interest& $eed o4 in<e3tment 1& Payment of claims9 'he first and the most important o$ligation of the insurer are to pay the amount of claims whene4er they arise& or this, insurer is getting a su$stantial amount in the form of premiums and has to preser4e them for payment later on& 'o %eep such amount idle will $e failure on the part of the insurer who is e8pected to in4est them on $ehalf of policyholder& *& 'o a4oid financial deficit9 If the funds are not in4ested, the total income of the insurer will fall short of its re3uirement for meeting its commitment $ecause a particular rate of interest on its in4estment has $een assumed while calculating the rate of premium& Again, if the funds are not in4ested and interest not earned, it would $e an under estimation of its future lia$ility which may pro4e disastrous at the time of higher mortality& .& Gational interest9 A huge fund of the society is ta%en $y the insurer in form of premiums& 'herefore, it is essential for the insurer to in4est the funds for the economical de4elopment of the country&

Source3 o4 4und3 1& Premiums .*

*& Interest .& !apital gains 1& Gon payment of claims &he 5rinci56e3 o4 in<e3tment 1& "afety *& Profita$ility .& Li3uidity 1& Di4ersification ;& Increase in life $usiness

a%i% of formu#ation of in&e%tment $o#icy by a #ife in%urer


1& *& .& 1& ;& >& @& ,asic principle 'he outloo% of management 'he present composition of in4estment portfolio Present position of insurer A4aila$ility of suita$le securities Ade3uacy of funds "ocio0 economic needs

PO!IC3 CON)ITIONS AN) CUSTOMER SATISFACTION


'he policy conditions are studied in fi4e forms9 1& !onditions relating to commencement of ris% *& !ondition of premium .& !ondition relating to continuation of policies 1& Lapsed conditions and ;& !laims conditions&

CON)ITION RE!AING TO COMMENCEMENT OF RIS1S


Commencement o4 ri3@ 'he letter of acceptance is not a co4er note, it only intimates that the ris% will commence when the first premium is offered to and accepted $y the insurer& If the premium was paid along with proposal form, the date of letter of acceptance will $e the date of commencement of ris%& After acceptance of ris%, policy is issued& 'he policy contains terms and conditions of the insurance and is a document which can $e used as a proof of insurance& ;roo4 o4 a1e9 'he proof of age must $e produced at the time of proposal $ecause the rate of premium depends on the age of life insured& 'he insurer does not withhold the issue of policy for the want of proof of age, $ut does not admit any claims unless the age is pro4ed to the satisfaction of the insurer& Howe4er, if it is su$se3uently found that the age at entry was mentioned lower than the correct age, the assured sum is reduced to such amount as would ha4e $een purchased at the true age& If the actual age comes out to $e lower than the stated age, the difference ..

is either refunded or adjusted towards future premium or policy amount& 'he proof of age is 4ery essential at the time of proposal in the term policies& +ulti purpose policy, !hildren Deferred <ndowment Assurance, Immediate Annuity and Deferred Annuity, where the life assured has not completed *- years or where the life to $e assured has completed ;- years of age or the proposal is under the "alary "a4ing "cheme&

CON)ITION OF PREMIUM
;a0ment o4 5remium 'he premium rate is calculated annually, $ut for the con4enience of the assured, it can $e paid half0yearly, 3uarterly, or e4en monthly& It should $e remem$ered that these premiums are not just the portion of yearly premium $ecause the insurer losses interest on the unpaid premium of a year and e8penses are in4ol4ed for fre3uent calculation of premium& =hen premium are not annual $ut fractional and if death ta%es place $efore all the premium ha4e fallen due for the current year , the corporation deduct the unpaid installment from policy year, the corporation deduct the unpaid installment form the assured sum at the time of settling the claims& Da0 o4 1race Premium is paid at or $efore the due date& ,ut for the con4enience of the policyholder certain additional period called day of grace, is allowed to pay the premium& 'he insured can pay the premium with in the day of grace and the policy would not lapse up to the day of grace& :ne calendar month $ut not less than .- days is allowed for payment of premium& ;remium notice In order that the policyholder may not forfeit the $enefit of his policy, notice of premium falling due will $e regularly sent to him e8cept in the case of policies under which the mode of payment of premium is monthly where no such notice is re3uired, the insurer is not $ound to gi4e notice and the want of it can not $e admitted as an e8cuse for not paying the due premium in time&

CON)ITIONS RE!ATING TO T4E CONTINUE PO!IC3


"ndi35utab6e c6au3e In order to protect the interest of the assured, indisputa$le clause is added which pro4ides that the policies shall $e indisputa$le after a state period, i&e& two years from the date of issue e8cept for non payment of premium or for fraud& "ection 1; of the insurance act has pro4ided that the policy will not $e disputed on the ground of unintentional misstatement, misrepresentation or non disclosure of a material fact after two years of the issue of policy& Howe4er on the ground of fraud it can $e disputed at any time during the currency of the policy& A6teration3 in 5o6icie3 'he insurer permits certain alterations in terms and conditions of the policy at the re3uest of the policyholder& 'he insurer reser4es the right to decline .1

such re3uest without assigning any reason& Alteration may $e change9 in class or term, reduction in term of sum assured, increase in sum assured, changes in the mode of premium payment, splitting up of the policy in to two or more policies and so on& 'he insurer, generally, does not permit alterations which increase the amount of ris% to the insurer& +o3t 5o6ic0 'he insured must inform to the insurer whene4er the policy is lost or destroyed& :n the satisfactory e4idence of loss or destruction, the insurer will issue a duplicate copy after ad4ertising the fact and will charge the assured the fee for issuing the duplicate copy& $omination3 According to the section .A of insurance act 1A.?, the holder of a policy of life insurance on his own life may, when effecting the policy or at any time $efore the policy matures for the payment, nominate a person or persons to whom the policy money secured $y the shall $e paid in the e4ent of his death& Gominee is the person named $y the policyholder to whom the policy amount may $e paid if the policy amount is paya$le on the death and the nominee is ali4e when the life assured e8pires& In a$sence of any of these the nominee does not ac3uire any of the right in the policy& If policy matures $y e8piry of time, the policy amount is paya$le to the insured himself and not to the nominee&

!APSE CON)ITIONS
+a53e o4 5o6ic0 'he insurer shall remain lia$le for the payment of the claims so far the assured continues to pay the premium when they fall due& If the policyholder fails to pay any of the due premiums with in the day of grace, the insurerJs lia$ility ordinarily ceases under the policy and the contract comes to an end& 'hus the policy is lapsed and all the $enefit related to the policy is terminated& 'he insurer, howe4er, pro4ides certain alternati4es to help the insured at the time of lapsation& *e<i<a6 o4 6a53ed 5o6icie39 If a policy lapses $y non payment of premium within the days of grace, it may $e re4i4ed to the full policy amount at any time during the life time of the life assured, $ut with in a period of fi4e years form the due date of the first unpaid premium and $efore the date of maturity& 'he re4i4al is possi$le within si8 month from the due date of the first unpaid premium with out e4idence of health on the Payment of premium in arrear with the interest at the rate of @&;Fper annum compounded annually& 'he re4i4al after the first si8 month from the due date of the first unpaid premium will $e effecti4e only on the satisfactory production of e4idence of health and ha$it of the life assured and no ad4erse changes in personal or family history or occupation&

S5ecia6 *e<i<a6 Scheme +any policyholders find it difficult to pay the arrears of premium with interest to re4i4e their policies& or them the special re4i4al scheme is $eneficial .;

to gain the co4er of insurance& 6nder this scheme, the date of commencement of policy will $e fi8ed $y dating $ac% the policies& 'he period for which the policy will $e dated $ac% depends upon the amount of premium paid& 'he plan and the period of insurance will $e same as those under the original policies& 'he re4i4al will $e effected ordinarily $y issue of a fresh policy&

)E2E!OPING IN)IAN INSURANCE SECTOR


'he insurance sector has come to a full circle from $eing an open mar%et to nationali7ation and $ac% to li$erali7ed mar%et again& 'racing the de4elopment in the Indian insurance sector re4eals .>- degree turn witnessed o4er a period of almost ten centuries&

RIEF 4ISTOR3 OF INSURANCE SECTOR IN )E2E!OPING IN)IA


1A1*9 Indian life insurance corporation act enacted to regulate the life $usiness in India& 1A*?9 India insurance company act enacted to ena$le the go4ernment to collect statistical information a$out $oth life and non life insurance $usiness& 1A.?9 All the act consolidated and amended $y the insurance act with the o$jecti4e to protect the pu$licJs interest& 1A;>9 Gearly *1; India and foreign insurance and pro4ident societies are ta%en o4er and nationali7ed& ormulation of LI! act and its esta$lishment with the initial capital of (s& ;crores from go4t&

INSURANCE SECTOR REFORMS


In 1AA., +alhotra !ommittee, headed $y the former finance secretary and (,I go4ernor (&G& +alhotra was formed to e4aluate the Indian insurance $usiness industry and recommend its future direction& It was set up with the o$jecti4e to compliment the reform initiated in the financial sector& (eforms aims at the creating more efficient and competiti4e financial system suita$le for the re3uirement of the economy %eeping in mind the structural changes currently under way and recogni7ing that insurance is an important part of the o4erall financial system where was necessary to address the need for the similar reform & !ommittee su$mitted the following report in 1AA1 and the recommendations gi4en are90 12 "tructure39 Eo4ernment sta%e in insurance company to $rought down to ;-F& 'a%e o4er of EI! and its su$sidiaries so as to ma%e them to act as insurance corporations& +ore freedom to operate to the company& *2 Com5etition39 Pri4ate company with a minimum capital of (s& 1$illion to $e .>

allowed to enter the industry& Go company should deal in $oth life and non0life $usiness through a single entity& oreign company $e allowed to enter the industry and should $e allowed colla$orate with the domestic companies& Postal life insurance should $e allowed to operate in rural areas& 3) *e1u6ator0 bod0 !hange in insurance act to $e made& Insurance regulatory $ody to $e made& !ontroller of insurance /currently a part of +inistry of inance2 should $e made independent& 4) "n<e3tment +andatory in4estment of LI! life fund to go4t& securities $e reduced to ;-F from @;F& Holding of securities or share of EI! in other companies $e reduced to ;F& A) Cu3tomer 3er<ice !ompanies must $e encouraged to set up unit lin%ed pension plans&

.@

.?

4)FC STAN)AR) !IFE INSURANCE COMPAN3 !T),


HD ! "tandard life Insurance !ompany ltd& Is one of the IndiaJs leading pri4ate insurance companies, which offers a wide range of indi4idual and group insurance products 5 solutions& It is a joint 4enture $etween Housing De4elopment and inance !orporations Limited /HD ! Ltd&2, IndiaJs leading housing finance institution and a group company of "tandard life, 6K& HD ! and "tandard Life first came together for the possi$le joint 4enture, to enter the Indian life $usiness, in Canuary1AA;& It was clear from the outset that the $oth the companies share same 4alues and $eliefs and a strong relations 3uic%ly formed& In :cto$er 1AA;, the company signed . years agreement on the 4enture& HD ! ltd& Holds @*&.@F and "tandard Life /+auritius Holding2 Ltd& Holds *>&--F of e3uity in the joint 4enture, while the rest is held $y others& HD ! LifeJs product portfolio comprises solutions, which meet 4arious customer needs such as Protection, Pension, "a4ings, In4estment and Health& HD ! Life continues to ha4e one of the wide reaches among new insurance companies with a$out ;-- $ranches in Indian touching customers in o4er A-- cities and towns

.A

INCORPORATION OF 4)FC STAN)AR) !IFE INSURANCE COMPAN3 !T).


'he company was incorporated on 11 th August *--- under the name HD ! "tandard Life !ompany Ltd& 'he companyJs am$ition from as far $ac% as :cto$er 1AA; was to $e the first pri4ate company to re0enter the life insurance mar%et in India& :n the *.rd :cto$er *---, this am$ition was reali7ed when HD ! "tandard Life was the only company to $e granted a certificate of registration& HD ! are the main shareholder in it with ?1&1F share and "tandard Life owns 1?&>F& HD ! and "tandard Life ha4e a close relationship $uilt upon the shred 4alues and trust& 'he am$ition of the HD ! "tandard Life is to mirror the success of the parent companies and $e the yard stic% $y which all other insurance companies&

A OUT 4)FC
Incorporated in 1A@@, as a pu$lic limited company "peciali7e in the pro4ision of hou@sing finance to the indi4iduals, cooperati4e societies and corporate sectors& Listed on ,"< and G"< +ar%et capitali7ation as on Cune *--*is (s&@A $illion /6" M 1&>2 Increase in deposit $ase from (s& 11&;? $illion in N A1 to (s&?1&A1 in N-* Get increase in N-* of (s& 1*&11 $illion :4er ;*--- deposits agent and o4er 1&. million depositors AAA# rated $y !(I"IL and I!(A for eight consecuti4e years

Achie&ement by 4)FC
,est managed company01AA;)A> +ost competiti4e Indian company01AA@ <8cellent in ser4ice industry01AA? Gational 3uality award01AAA ,est managed company/Asia money20*--AsiaJs top $est managed company0*--1 ,est non $an%ing financial company in Asia $y II(E0*--,est product Inno4ation Award *-11J for their product IHD ! "L !restJ at the Indian Insurance Awards*-11& #Life Insurer of the Near# Award at the ,loom$erg 6'D inancial Leadership Awards *-1*&

A OUT STAN)AR) !IFE


ounded in 1?*; +utual life insurance company since 1A*; Largest mutual life insurance company in <urope 1-

AAA# $y +oodyJs and "tandard and PoorJs Assets o4er (s& ;?1--- crores

GROUP COMPANIES
HD HD HD HD HD HD ! Limited ! ,an% Limited ! Assets +anagement companies Limited ! "ecurities Limited ! reality Limited ! !hu$$ Eeneral Insurance !ompanies Limited

ANCASSURANCE PARTNERS
HD ! HD ! ,an% 6nited ,an% of India Indian ,an% "araswat ,an% ,ajaj !apital ,an% :f ,aroda

2ISION STATEMENT
'he most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offers the $est 4alue for the money and set standard in the industry&#

MISSION STATEMENT
'he company included in its mission statement as9 =e aim to $e the top new life insurance company in the mar%et& 'his does not mean $eing the largest or the most producti4e company in the mar%et rather a com$ination of se4eral things90 !ustomer ser4ice of higher order Dalue for money for customers Professionalism in carrying out $usiness Inno4ati4e products to cater to the needs of the customers 6se of technology to impro4e se4eral standards Increasing mar%et share

11

2A!UE STATEMENT
"ecurity 'rust Inno4ation Integrity !ustomer !entric People !are 'eam !are Coy and "implicity

Di3tribution %44ice3 In its dri4e to deepen and widen the penetration in the mar%et, the company opened an additional 1-@ offices during the year, ta%ing the total to *@> across *? regions& In addition, the company also adopted the hu$ and spo%e model and opened 1>* spo%es during the year& 'hrough the networ% of these offices the companyJs financial consultant, corporate agent and $ro%ers are a$le to ser4ice the customers in almost @-- cities and towns across the country& )inancia6 Con3u6tant 'he companyJs distri$ution strategy continues to lays down strong emphasis on the de4elopment of the agency channel& 'he num$er of the licensed financial consultant appointed $y the company increased from o4er ..,--- in the pre4ious year to o4er @1,--- in the current year, with a large part of the increase happening in the latter part of the year& 'his position the company well to ta%e the ad4antage of a larger trained sales force in the coming year& 'he company pro4ides e8tensi4e and thorough training, to not only complies with the regulatory re3uirement, $ut also to e3uip the financial consultants to appropriately assess the customerJs insurance needs& 'he need $ased analysis approach adopted $y the sales force has resulted in a significant increase in the a4erage premium, e4en $eyond the limits of ta8 $enefit a4aila$le& Cor5orate a1ent3 "imultaneously the company too% ad4antage of the interest in distri$uting insurance product that was e4inced $y $an%s and other corporate agents& 'his channel ha yielded good result and account for o4er 1.F of all first year premia collected during the year&

1*

Ser<icin1 the cu3tomer During the year, the company has esta$lished additional touch points for rendering the effecti4e and efficient customer ser4ice& 'he customer can now 4isit the offices, call the ser4ice helpline, send emails, access the ser4ice through the financial consultants& Premium payment can $e made easily using options li%e the direct de$it facility as also through net $an%ing that has $een ena$led on the company we$site& 'hrough effecti4e use of digital security systems, the company now issues policy document with secured digital signatures& "n<e3tment3 In4estments of insurance companies are regulated under the I(DA (egulations, *--- as amended from time to time& 'he company has compiled with all the re3uirements under the said regulations& 'he total assets under management as on +arch .1st *--@ are (s& 1A@> crores as against (s& *;;1 crores in the pre4ious year& 6nder the unit lin%ed products, the company offers the choice of > funds ranging from growth to li3uid funds& Ca5ita6 During the year, the company raised the paid up e3uity capital from (s& >*crores to o4er (s&?-1 crores& urther the company has also enhanced the authori7ed capital from (s& >*- crores to (s& 1,;-- crores& 'he shares su$scri$ed to $y standard life assurance company had demutualised during the year& *i3@ Mana1ement ;o6ic0 'he company has a ris% management policy& 'his in4ol4ed ris% identification, impact e4aluation and mitigant identification e8ercise& A re4iew mechanism has also $een put in place to trac% the mo4ement of 4arious ris%s, $oth at the unit le4el and at the corporate le4el& (egular updates in this regard will $e placed $efore the audit committee of directors and the $oard of directors& Di<idend As the company has not earned profit, the directors do not recommend any di4idend&

1.

T4E PRO)UCTS OF 4)FCS!IC


HD !"LI! reali7e that not e4eryone has the same %ind of needs& Keeping this in mind, we ha4e a 4aried range of products that you can choose from to suit all you r needs& 'hese will help secure your future of your family& ;rotection 56an3 &erm A33urance ;6an +oan Co<er &erm A33urance ;6an "n<e3tment ;6an3 Sin16e ;remium .ho6e %4 +i4e ;6an ;en3ion ;6an ;er3ona6 ;en3ion ;6an 'nit +in@ed ;en3ion ;6an 'nit +in@ed ;en3ion ;6u3 ;6an

Sa<in1 ;6an3 (ndo2ment A33urance ;6an 'nit +in@ed (ndo2ment ;6an 'nit +in@ed (ndo2ment ;6u3 ;6an Mone0 Bac@ ;6an Chi6drenF3 ;6an 'nit +in@ed ,oun1 3tar ;6an 'nit +in@ed ,oun1 3tar ;6u3 ;6an

COMPETITORS OF 4)FC STAN)AR) !IFE INSURANCE CO,


A4i4a ,ajaj Allian7 ,irla sun life I!I!I Pru Ing 4ysya Life insurance corporation +a8 new Nor% life +etLife India 11

:m %ota% mahindra (eliance life insurance ",I life insurance 'ata AIE

ORGANISATIONA! SRUCTURE OF 4)FC STAN)AR) !IFE


+D ) !<:

E+0 "AL<" ) +A(K<'IGE

H:D0 I'

H:D0 L<EAL ) "<!(<&

E+0 IGAG & A!!'& +<DI& A'(L&

H:D0 H(

E+0 :P<(A'I:G"

,6"IG<"" H<AD 0G:('H ,6"IG<"" H<AD0 ":6'H H:D H IG"'I'6'I:GAL "AL<"

O:GAL +AGAE<( O:GAL +AGAE<(

:P<(A'I:G 6GD<(=(I'I0 GE

H:D0 !HAGG<L D<D<L:P+<G' ) "AL<" H:D 0 +A(K<'IGE

H:D0,6"IG<"" P(:!<"" )(<"<A(!H

1;

ORGANISATIONA! STRUCTURE AT A!!A4A A)

&(*"&%*, MA$A#(*

B*A$C! MA$A#(*

ASS"S&A$& B*A$C! MA$A#(*

ASS"S&A$& SA+(S MA$A#(*

B*A$C! D(-(+%;M($& MA$A#(*

SA+(S D(-(+%;M($& MA$A#(*

1>

1@

SCOPE AN) O JECTI2E OF T4E PRO !EM5 STU)3


'he main aim $ehind study is to %now a$out the satisfaction le4el pro4ided $y the HD ! "tandard life to its customers& :ne of the aim is also to descri$e the importance of customer in the modern era of $usiness as far ads insurance industry is concerned& 'he other o$jecti4es are90 'o study the 4arious types of insurance policies offered $y HD ! 'o study the awareness le4el of customer with respect to the different insurance policies offered $y HD !& 'o study of the claim process of the HD !"LI!& 'o find out the most preferred insurance plan $y the customers&

RESEARC4 MET4O)O!OG3
&,;( %) *(S(A*C! - Descripti4e research design M(&!%D %) *(S(A*C! G!on4enience sampling Data co66ection method9 Primary data were used for the purpose of research& Area o4 re3earch9 HD !, !i4il Lines ,ranch at Allaha$ad !ity& Sam56e 3iHe9 1-- respondents &oo6 o4 re3earch9 "tructured 3uestionnaire consisting of $oth open ended and closed ended 3uestions was used for the purpose of research Stati3tica6 too63 4or ana603i39 Percentage system

1?

)"$D"$#
After critical analysis of the 4iew of respondent/1--units2& 'he following ha4e come out which are as follows90 In4estment plans are mostly adopted $y 1?0.- years age group& 'he sa4ing plan is still the $est choice for the older age group& A insurance policy the reasons specified are sa4ing purpose& It always facilitates the customers with the easiest mode of claims of their amount& +ost of people say that HD ! is the pri4ate company and I donJt $elie4e in this type of company&

!IMITATIONS
1& *& .& 1& 'he information disclosed $y the respondent may not $e 4ery accurate& At some places difficulty faced in o$taining the information due to a$sence of the proprietor& 6nwillingness on the part of few respondents to disclose the information as per the 3uestionnaire& Indecisi4eness on the part of the respondents regarding some 3uestions,

1A

;-

;eo56e ha<in1 6i4e in3urance 5o6ic0


life insurance policy
80% 70% 60% 50% persons 40% 30% 20% 10% 0% yes acceptance no 28% 72%

Ana603i3 rom the a$o4e graph we, can easily interpret that there are *?F people who ha4e life insurance policy and @*F people do not ha4e any life policy& It can also $e seen from the a$o4e graph that their acceptance le4el is high, howe4er the case is seen only in the high and middle high class and not in lower middle and lower class people&

;1

;eo56e 2ho ha<e 6i4e in3urance 5o6ic0 o4 !D)CS+"C

9! ! '! &! %! $! #! "! 1! ! 19

(es )o

In the Allaha$ad there are percentage of people who %now the HD !"LI! is 4ery high $ut ratio of people ha4e the life insurance policy are 4ery low only 1AF of people ha4e the policy of HD !"LI! and rest ?1F donJt ha4e the policy in HD !"LI! $ut they ha4e the life insurance policy of other companies& +ost of people say that HD ! is the pri4ate company and I donJt $elie4e in this type of company&

;*

A1e 1rou5 In these the highest percentage is the age group of 1?0.- that is >*F, the percentage of .-01; age group is *.F, only 1;F of people ha4e life insurance policy $elonging to the age group of 1;0>-,and the people a$o4e the age of >- years their proportion is -F&

Life policy
70% 60% * er s o n s 40% 30% 20% 10% 0% 18-30 30-45 Age 45-60 23% 15% 0% 60-above 50%

62%

;.

&05e o4 6i4e in3urance 5o6ic0 5eo56e ha<e


types of policies
60% 50% 40% persons 30% 20% 20% 10% 0% protection investment policy pension saving 12% 41% 27 %

Series1

Ana603i3
rom the a$o4e graph we can see that 4arious policies 5 plans ha4e $een classified into four parts and then they ha4e $een 4alued $y the customers 11F persons ha4e opted for protection plans& It is due to the fact that the people of India are conser4ati4e in nature and always thin% for future growth& 'he second preferred plan is sa4ing plan i&e& they ha4e $een wanted $y more than *-F& 'he person ha4e the in4est plan *@F&

A1e 1rou5 ana603i3 urther the plans ha4e $een classified in to 4arious age group li%e0 1?0.-, .-01;, 1;0>-, >- ) a$o4e& In4estment plans are mostly adopted $y 1?0.- years age group and other age group are less enthusiastic a$out the in4estment plan&

;1

people ha+ing in+est,ent plan


60% 50% 40% 30% persons 30% 20% 10% 10% 0% 18-30 30-45 45-60 60-above age group 4% Series1 56%

Howe4er, as against the in4estment policy, the sa4ing plan is still the $est choice for the older age group li%e 1;0>-and >- and a$o4e& ,oth the group shares same percentage le4el in the plan&
persons ha+ing sa+ing plans
33% 33%

35% 30% 25% persons 20% 15% 10% 5% 0% 18-30 30-45 12% 22%

45-60

60-above

age groups

*ea3on3 4or ta@in1 a 5o6ic0

;;

reasons for ta-ing policy

35% 30% 25% persons 20% 15% 10% 5% 0%

31%

32%

20% 17%

security

saving reasons

future need

ta rebate

Ana603i3 'he a$o4e graph represents the reasons why a person ta%es a life policy the reasons specified are sa4ing purpose, securing the money, for future need or for getting re$ate in ta8 payment& In it the people ga4e their first preference to sa4ing and then to security for securing their future needs& 'hey said that $y maintaining $oth will ser4e the future needs& Dery less people prefers to ta8 re$ate facility as they are unaware a$out this $enefit&

;>

*atin1 the !D)C Standard 6i4e


.ating HDFC Standard life

60% 50% 40% *ersons 30% 20% 10% 0%

51%

32% 24%

3% ! ce""ent #ood Scale of rating $air %oor

Ana603i3 'he people ran%ed the HD ! "tandard life $est on a scale of comparison of it with other company& Gearly ;1F persons ran%ed the company as the e8cellent and .*F ran%ed it as good& 'his shows the image of the company has formed in the mar%et place& And also shows it goodwill which it has crated in the minds of the customers&

*atin1 the cu3tomer 3er<ice in !D)C Standard 6i4e


.ating custo,er ser+ice
80% 70% 60% 50% *ersons 40% 30% 20% 10% 0% ! ce""ent #ood $air %oor Scale of rating 4% 0% 22% 74%

Ana603i3 'his graph shows that the people ha4e rated the customer ser4ice $etter than the other company& Gearly all the customers are satisfied with the facility pro4ided to them& 'he graph shows that nearly @1F of the customers are satisfied with the wor%ing&

;@

*atin1 unit 6in@ed 56an3 a3 the be3t 56an3 4or the modern era

.ating /LI* plans


80% 70% 60% 50% *ersons 40% 30% 20% 10% 0% ! ce""ent #ood Scale of rating $air %oor 4% 0% 22% 74%

'he graph shows that there is a great popularity of 6LIP plans of HD ! "tandard life& Almost @1F -f the respondents ha4e ran%ed the plans as the $est one in comparison to other companies& Almost **F of the responds said that the fund performances of 6LIP plans are the good one&

&he c6aim 5roce33 o4 the com5an0

clai, process
80% 80% 70% 60% 50% persons 40% 30% 20% 10% 0% e e""ant good fair poor scale of rating 12% 8% 0%

'he claims process seems to $e 4ery much settled in the company, the other company always faces such pro$lems& 'he company has pad the claims amount in a direct way& It always facilitates the customers with the easiest mode of claims of their amount&

;?

Com5ari3on o4 traditiona6 56an3

co,parision of plans

80% 70% 60% 50% persons 40% 30% 20% 10% 0% traditiona" plans 22%

72%

u"ip p"ans

Source o4 a2arene33 o4 !D)CS+"C


0nowledge a1out HDFC Standard Life
42% 33%

45% 40% 35% 30% persons 25% 20% 15% 10% 5% 0% add& friends sources fami"y fc 17% 8%

'he people who are %now a$out HD !"LI! $y the different sources& 'his proportion of people shows that media which are more suita$le for awareness and how a company adapts their promotional strategy to increase their mar%et share now here only I descri$e the way $y which people %now a$out HD !"LI! & 'he proportion different sources are as fallows9

;A

Ad4ertisement riend !ircle amily +em$er inancial !onsultant of HD !"LI!

..F 1@F ?F 1*F

Arran1ement3 4or (n?uir0 : A33i3tance


or en3uiry and assistance facility of the HD !"LI! Allaha$ad *-F customer of the company says 4ery good .-F customer gi4e his mar% for good, .;F are satisfied and -nly 1;F customers accept these facilities are poor&

40 35 30 25 20 15 10 5 0
!) )! *+ ,! . # / / 0 +/ -. # / / 0 %/ / -

Series1

!' (

S1 +2

S$

1(

>-

C%$C+'S"%$S : S'##(&"%$S
+ost of peoples prefer sa4ing and in4estment plans in comparison of other plans In4estment plans are mostly adopted $y 1?0.- years age group and other age group are less enthusiastic a$out the in4estment plan& 'here are 4arious policies 5 plans, 11F customers ha4e opted for protection plans $ecause they are conser4ati4e nature and others are less conser4ati4e, *@F customers opted in4estment plans, 1*F customers opted pension plans and *-F customers opted sa4ing plans& 'he company pays the claims amount in a direct way& It always facilitates the customers with the easiest mode of claims of their amount& Eood customer ser4ice was a challenge in the past as it is at present& 6nless insurance companies in India could realign their systems and procedures with customer needs, ta%e proacti4e stance in not only rendering good 3uality customer ser4ice, $ut also anticipating their changing as well as latent needs to add 4alue to the ser4ice, $ringing a$out total customer satisfaction& HD ! "tandard Life insurance continuous to $ecome the $iggest challenge $efore than in the future also& Go insurance is an island& A few wee%s insurance can $ring down5tap the $lood of all& 'here are no dou$ts each insurance company& Ha4e to formulate and implement its own diagnosis specific and 4ision matching strategy& !umulati4ely, the Indian insurance system as whole must $e up graded& 'he strategy adopted will ha4e to $e self renewing in the sense that it will unco4er the resources needed, s%ill needed , e8pertise re3uired from within rather than from without the insurance system and the country in the 4ery process of implementationK A precondition of course is the change in our mindset recogni7ing the opportunities of computeri7ation and enhancing the 4alue addition of our insurance companies& :wn heritage of systems procedures and human resources, enthroning e3uality of opportunity facilitating $etter performance to collect higher rewards& It will wea4e the safety net that will protect all stoc% holders, including la$or, customers and of course the insurance companies

>1

Anne*ure
I'(S&"%$$A"*(
$AM( PPPPPPPPPPPPPP #($D(* Ma6e )ema6e A1e 1?0.- .-01; 4A-B0 B0 and abo<e ;ro4e33ion Ser<iceman Bu3ine33man ;ro4e33iona6 other39 56ea3e 35eci40JJJJJJJJJJJJJJJJJJJJJJ ADD*(SSPPPPPPPPPPPPPPPPPPPPP&&&&&&& C%$&AC& $'MB(*PPPPPPPPPPPPPPPPP *(S(*C!(* $AM(9 Ajit Kumar Do you ha4e a life insurance in policyQ Nes/ 2 Go/ 2 How many people of Allaha$ad ha4e policy in HD !"LI! Q Go / 2

Nes / 2

=hich type of life insurance policy do you ha4e Pension plan / 2 "a4ing plan / 2

Protection plan / 2 In4estment plan / 2

Do you in4est in in4estment plan according to age criteria .-01; / 2 R >- / 2

1?0.- / 2 1;0>- / 2

Do you ha4e sa4ing plan according to age criteria .-01; / 2 R>- / 2

1?0.- / 2 1;0>- / 2

Please indicate the reason for in4estment in insurance policyJs or security or sa4ing or future need or ta8 re$ate /2 /2 /2 /2

Kindly (ate the customer ser4ice in HD ! "'AGDA(D LI < IG"6(AG!< Q Eood / 2 Poor / 2 >*

<8cellent / 2 air /2

Kindly rate the satisfaction le4el regarding the 6LIP PLAG -f HD ! "'AGDA(D LI < IG"6(AG!<Q <8cellent / 2 Eood / 2 air /2 Poor / 2 Kindly rate the claim process adopted at HD ! "'AGDA(D LI < IG"6(AG!< Q Eood / 2 Poor / 2

<8cellent / 2 air /2

Among the following types of plans gi4en $elow state /tic%2 your choice of preferenceQ 6lip plan / 2

'raditional plan / 2

Kindly state the source of awareness regarding HD ! "'AGDA(D LI < IG"6(AG!< Q

Print Ad4ertisement9 +aga7ine $e235a5er <lectronic amily, (elati4es and friends / 2 inancial !onsultant of HD ! / 2

>.

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