comparative study of HDFC standard life insurance and taxation benifits in india

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A
Project Report
On
Life insurance and taxation
FOR
HDFC standard life insurance
Submitted to SavitriBai Phule Pune University
In partial fulfilment of requirement for the Award of Degree of
MASTER OF BUSINESS ADMINISTRATION
By
Vivek kumar
MBA (finance)
Under the Guidance of
Dr. SHAGUFTA SAYYED
SINHGAD INSTITUTE OF BUSINESS ADMINISTRATION ANDRESEARCH
KONDHWA (BK), PUNE (MAHARASHTRA)
PUNE-411048
2013-2015

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Sinhgad Institute of Business Administration and Research, Kondhwa
(Bk.), Pune
Institution Approval Letter
Summer Internship Program
Mr.VIVEK KUMAR of batch 2013-2015 is granted permission by the institute to do the
Summer Internship Project titled “Comparative analysis of Insurance market in india” of
HDFC STANDARD LIFE INSURANCE from 1st JUNE to 31st JULY.
Dr.SHAGUFTA SAYYED Dr.Avadhoot D. Pol
Project Guide Director
Place:
Date:

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CERTIFICATE
This is to certify that the project report titled comparative analysis of insurance market which is
being submitted herewith for the award of Masters of Business Administration, Pune is the result of
the original work completed by VIVEK KUMAR under my supervision and guidance and to the best
of my knowledge and belief the work embodied in this project report has not formed earlier the basis
for the award of any degree or similar title of this or any other University or examining body
Dr. SHAGUFTA SAYYED Dr.Avadhoot D. Pol
(Project guide) (Director)
Place:
Date:

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DECLARATION
I VIVEK KUMAR student of “Master of Business Administration” from Sinhgad Institute of Business
Administration & Research, Pune hereby declare that all the information facts & figure gathered by me are first
hand in nature and is actually based on my study. Any resemblance from existing works is purely coincidental in
nature.
DATE: VIVEK KUMAR
PLACE: M.B.A. (Financial Administration)

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Acknowledgement
Through this acknowledgment, I express my sincere gratitude to all those people who have
been associated with this assignment and have helped me with it and made it a worthwhile
experience.
Firstly I extend my thanks to the various people who have shared their opinions and
experiences through which I received the required information crucial for my report.
Finally, I express my heartfelt thanks and gratitude to my mentors of HDFC life Mr.
Shambhunath and Mr. Rahul who gave me the corporate exposure in a practical manner
and guided us and gave us valuable suggestions regarding the project report. I also warmly
thank my College mentor Ms. SHAGUFTA SAYYED for her great response and
contribution in making our project a fruitful one.
VIVEK KUMAR

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PREFACE
The liberalization of the Indian insurance sector has been the subject of much heated debate
for some years. The policy makers where in the catch 22 situation wherein for one they
wanted competition, development and growth of this insurance sector which is extremely
essential for channelling the investments in to the infrastructure sector. At the other end the
policy makers had the fears that the insurance premium, which are substantial, would seep out
of the country; and wanted to have a cautious approach of opening for foreign participation in
the sector.
As one of the rare occurrences the entire debate was put on the back burner and the IRDA
saw the day of the light thanks to the maturing polity emerging consensus among factions of
different political parties. Though some changes and some restrictive clauses as regards to the
foreign participation were included the IRDA has opened the doors for the private entry into
insurance.
Whether the insurer is old or new, private or public, expanding the market will present
multitude of challenges and opportunities. But the key issues, possible trends, opportunities
and challenges that insurance sector will have still remains under the realms of the
possibilities and speculation. What is the likely impact of opening up India’s insurance
sector?
The large scale of operations, public sector bureaucracies and cumbersome procedures
hampers nationalized insurers. Therefore, potential private entrants expect to score in the
areas of customer service, speed and flexibility. The critics counter that the benefit will be
slim, because new players will concentrate on affluent, urban customers as foreign banks did
until recently. This seems to be a logical strategy. Start-up costs-such as those of setting up a
conventional distribution network are large and high-end niches offer better returns.
However, the middle- market segment too has great potential. Since insurance is a volumes
game. Therefore, private insurers would be best served by a middle-market approach,
targeting customer segments that are currently untapped.

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INDEX
CHAPTER NO. TABLE OF CONTENT PAGE NO.
1 CHAPTER I
Introduction
Profile of the organization
Research objectives
Research Methodology
Research limitation
2 CHAPTER II
Review of Literature
Concepts & definitions
3 CHAPTER III
Data Presentation
Analysis interpretation
4 CHAPTER IV
Learning
Major Finding
Conclusion of findings
Suggestions and recommendation
5 CHAPTER V
Questionnaire
Bibliography
PAGE NO.

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Executive Summary
As a management trainee I hereby chosen insurance sector because it has large opportunities
and gives me greater exposure not only professionally but morally also and creates better
relationship and social network. Insurance sector is a vast sector and have huge potentiality in
Indian market as demand for investment is growing up as people’s standard of living and per
capita has risen up. It is also a noble work as insurance as it secures the life of person
financially and brings hope to policyholder. Insurance is need for every individual and group
whether in form of family, business, spouse etc. Modern time requires insurance to prevent
unknown risk .The scenario is becoming more complex day by day one can use insurance for
investment purpose.
Working as a trainee I got to know the real picture behind the insurance sector in HDFC life.
We understand clients need in better manner and how to fulfill their needs.
HDFC life gave me perfect platform to understand the market as it is already renowned name
in the market. It is a joint venture between HDFC and a group of company of Standard Life.
HDFC life is one of the oldest private sector insurance company in India and running
successfully with glory. As an organisation it believes in creating standard and harmony with
employees and basic importance is customer satisfaction. Approx 21 companies like LIC, SBI
insurance ICICI prudential, Birla Sun life, Tata AIG, Aviva, Bajaj Allianz, Religare etc. are
giving fierce competition and challenges to HDFC life. IRDA regulates the various activities
of insurance companies and it is autonomous body. The ULIP plan and conventional plan
gives a choice to policyholders to invest according to market share and securities or use
traditional insurance practices. It covers risk of both individual and group.

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HDFC STANDARD LIFE INSURANCE COMPANY LIMITED
INTRODUCTION
HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since
emerged as the largest residential mortgage finance institution in the country. The corporation
has had a series of share issues raising its capital to Rs. 119 Crores. The gross premium
income for the year ending March 31, 2007 stood at Rs. 2,856 Crores and new
business premium income at Rs.1 624 Crores. The company has covered over
8,77,000 lives year ending March 31, 2007.HDFC operates through almost 450 locations
throughout the country with its corporate head quarters in Mumbai, India. HDFC also
has an
InternationalOf f i c e in Du b a i , UAE wi th s e rvi c e a s s o c i a t e s i n Kuwa i t , Om
an an d Qa t a r .HDFC is the largest housing company in India for the last 27 years.
 Incorporate in 1977 as the first specialized Mortgage Company in India.
 Almost 90% of initial shareholding in the hands of domestic institutes and retail
investors Current 77% of shares held by foreign institutional investors.
 Besides the core business of mortgage HDFC has evolved into financial conglomerate
with holdings In:
 HDFC Standard Life insurance Company- HDFC holds 78.07 %.
 HDFC Asset Management Company – HDFC holds 50.1%
 HDFC Bank- HDFC holds 22.25%.
 Intel net Global (Business Process Outsourcing) – HDFC holds 50%
 HDFC Chubb General Insurance Company – HDFC holds 74%

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LIFE INSURANCE

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Introduction To Insurance Industry
THE HISTORY OF INDIAN INSURANCE INDUSTRY
LIFE INSURANCE
In 1818 the British established the first insurance company in India in Calcutta, the Oriental
Life Insurance Company. First attempts at regulation of the industry were made with the
introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments
to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in
the Act were the power given to the Government to collect statistical information about the
insured and the high level of protection the Act gave to the public through regulation and
control. When the Act was changed in 1950, this meant far reaching changes in the industry.
The extra requirements included a statutory requirement of a certain level of equity capital, a
ceiling on share holdings in such companies to prevent dominant control (to protect the public
from any adversarial policies from one single party), stricter control on investments and,
generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life
insurance companies. Business was heavily concentrated in urban areas and targeted the
higher echelons of society. “Unethical practices adopted by some of the players against the
interests of the consumers” then led the Indian government to nationalize the industry. In
September 1956, nationalization was completed, merging all these companies into the so-called
Life Insurance Corporation (LIC). It was felt that “nationalization has lent the industry
fairness, solidity, growth and reach.”
Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the
life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective
of protecting the interests of the insuring public.
1956: The market contained 154 Indian and 16 foreign life insurance companies.
1938: reviewed and comprehensive legislation was enacted

12. 1973:Non-life insurance business was nationalized and General Insurance Business
(Nationalization) ACT 1972 was promulgated. The efficient and quality functioning of the
Public Sector Insurance Companies. The untapped potential for mobilizing long-term
contractual savings funds for infrastructure. The (Congress) government set up Insurance set
u an Insurance Reforms committee in April 1993. The committee submitted its report in
January 1994, recommended a phased program of liberalization, and called for private sector
entry and restructuring of the LIC and GIC.
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The Insurance Regulatory and Development Authority (IRDA)
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in April
2000 has fastidiously stuck to its schedule of framing regulations and registering the private
sector insurance companies. The other decision taken simultaneously to provide the
supporting systems to the insurance sector and in particular the life insurance companies was
the launch of the IRDA’s online service for issue and renewal of licenses to agents. The
approval of institutions for imparting training to agents has also ensured that the insurance
companies would have a trained workforce of insurance agents in place to sell their products,
which are expected to be introduced by early next year. Since being set up as an independent
statutory body the IRDA has put in a framework of globally compatible regulations. In the
private sector 12 life insurance and 6 general insurance companies have been registered

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COMPANY PROFILE OF HDFC - STANDARD LIFE
The company was incorporated on 14th August 2000 under the name of HDFC Standard Life
Insurance Company Limited. Their ambition from the beginning was to be the first private
company to re-enter the life insurance market in India. On the 23rd of October 2000, this
Ambition was realized when HDFC Standard Life was the first life company to be granted a
Certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with
81.4%, while Standard Life owns 18.6%.HDFC Standard Life Insurance Company Ltd. is one
of India’s leading private life insurance companies, which offers a range of individual and
group insurance solutions. It is a joint venture between Housing Development Finance
Corporation Limited (HDFC Ltd.), India’s leading housing finance institution and one of the
subsidiaries of Standard Life plc, leading providers of financial services in the United
Kingdom. HDFC Incorporated in 1977 with a share capital of Rs 10 Crores , HDFC has since
emerged as the largest residential mortgage finance institution in the country The corporation
has had a series of share issues raising its capital to Rs. 119 crores. The gross premium
income for the year ending March 31, 2007 stood at Rs. 2, 856 crores and new business
premium income at Rs. 1,624 crores. The company has covered over 8,77,000 lives year
ending March 31, 2007. HDFC operates through almost 450 locations throughout the country
with its corporate headquarters in Mumbai, India. HDFC also has an International Office in
Dubai, UAE, with service associates in Kuwait, Oman and Qatar.
Some facts about the company are as follows-
• Incorporated in 1977 as the first specialized Mortgage Company in
India.
• Almost 90% of initial shareholding in the hands of domestic institutes and retail investors.
Current 77% of shares held by foreign institutional investors.
• Besides the core business of mortgage HDFC has evolved into a
financial conglomerate with holdings In:
 HDFC Standard Life insurance Company- HDFC holds 78.07 %.
 HDFC Asset Management Company – HDFC holds 50.1%

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 HDFC Bank- HDFC holds 22.25%.
 Intele net Global (Business Process Outsourcing) – HDFC holds 50%.
 HDFC Chubb General Insurance Company – HDFC holds 74%.
KEY PLAYERS
Mr.Deepak S Parekh Mr.Keki M Mistry
Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive
Chairman of Housing Development Finance Corporation Limited (HDFC Limited).
He joined HDFC Limited in a senior management position in 1978. He was inducted
as a whole-time director of HDFC Limited in 1985 and was appointed as its Executive
Chairman in 1993. He is the Chief Executive Officer of HDFC Limited. Mr. Parekh is
a Fellow of the Institute of Chartered Accountants (England & Wales).
Mr. Keki M. Mistry joined the Board of Directors of the Company in December,
2000. He is currently the Vice Chairman and Chief Executive Officer of HDFC
Limited. He joined HDFC Limited in 1981 and became an Executive Director in
1993. He was appointed as its Managing Director in 2000. Mr. Mistry is a Fellow of
the Institute of Chartered Accountants of India and a member of the Michigan
Association of Certified Public Accountants.
GROUP COMPANIES
 HDFC Bank: World Class Indian Bank- among the top private banks in India.
 HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.
Intelenet Global: BPO services for international customers.
 CIBIL: Credit Information Bureau India Limited.
 HDFC Chubb: Upcoming Private companies in the field of General Insurance.
 HDFC Mutual Fund
 HDFC reality.com: Helps to search properties in all major cities in India
 HDFC securities

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STANDARD LIFE
Standard Life, which has been in the life insurance business for the past 185 years is a
modern company surviving quite a few changes since selling its first policy in 1825. The
company expanded in the 19th century from kits original Edinburgh premises, opening offices
in other towns and acquitting Standard Life is Europe’s largest mutual life assurance
company. other similar businesses.
Standard life currently has assets exceeding over 70 billion under its management and
has the distinction of being accorded “AAA” rating consequently for the six years by standard
and poor. Currently 5 million policy holders benefiting from the services offered.
Joint Venture
HDFC is considered as one of the first company to approach for private insurance
certification in India. It has reached many standards and won many awards, respect and
accolades from various trusts. HDFC life is rated ‘AAA’ by both CRISIL and ICRA.
Standard life is also a leading company and has long experience and customer satisfaction in
insurance and running successfully for 185 years. Standard life is mainly a parent company
who creates and guide the child company HDFC life towards various aspects of insurance
sector. Standard Life is rated ‘AAA’ by Moody’s and Standard and poor’s.
The joint venture of both the big firms creates a better brand image and trust worthiness.
Through joint venture it is also following the regulation of joint venture of private companies
under IRDA act. The asset base of HDFC life and Standard Life is 15000 crore and 60000
crore respectively which reflects the strength of both the organisation in terms of capital asset
value. HDFC is the majority stakeholder in the insurance jv with 81.4% as staple and standard
of as staple 18.6%. Both the companies are long term players and gain trust ethically and
bring financial strength through joint hands of both.

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Corporate objectives and values
Vision
‘The most successful and admired life insurance company, which means that we are the most
trusted company, the easiest to deal with, offer the best value for money, and set the standards
in the industry’.
‘The most obvious choice for all’.
Values
 Integrity- adherence to moral and ethical principles.
 Innovation-Encourage innovation continuously and
 Customer centric-Be friendly with customer and win the trust of customer. Customer
satisfaction is the basic importance in terms of values
 Team work-Encourage better team work and healthy competition with harmony in
different groups.
 People care one for all-Work for people ethically and earn a goodwill through best
services.
 Joy and simplicity-To create a rejoicing and joyful environment in work place for
better output and create simple functions for easiness with customer and employees
both.

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Corporate accolades and recognition
 Rated by 'Business world' as 'India's Most Respected Private Life Insurance Company'
in 2004.
 Rated as the "Best New Insurer - 2003" by Outlook Money magazine, India number 1
personal in finance magazine.
 In year 2008 received some prestigious awards like CIO Bold 100 and CIO Security
Awards for risk bearing and innovation, PC Quest Best IT Implementation Award for
vast IT application on training, inventory, licensing etc as a part of consultant corner,
silver abby at goa fest through AAAI for advertisement and Unit Linked Savings Plan
Tops Mint Best TV Ads Survey.
 Received CIO 'The Ingenius 100 2009' Award for 3rd consecutive year for taking
security to higher level of technological excellence and diamond edge award 2009 for
its mobile workforce portal in the year 2009.
 Got the laurel to be named among the top 50 companies to work with according to
study conducted by the Great Place to Work® Institute, India in partnership with
The Economic Times. It ranked 34th among 50 companies in India in 2010 edition.
Also 'YoungStar Super' Voted 'Product of the Year 2010' according to consumer
survey of product innovation 2010.
]

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Product and Services provided by HDFC life insurance
The tagline of HDFC life ‘Sar Utha ke jiyo’ truly fits the activities done by HDFC life
insurance. One can feel the respect, security and emotion behind the words. HDFC life gives
benefit not only for future risk but ensures financial securities by providing better returns
through various popular plans. HDFC offers plans for both risk cover and investment
purpose. All the plans are mainly based on following plans-
 Conventional
 Unit-Linked Plan
Conventional Plan-These are plans which are traditionally followed and returns are
generally fixed. Customer are used to conventional plan and are widely used. The returns
bonuses are paid after maturity of the policy but flexible plans are also available for
customers. Some of the best suited examples are children plans, retirement plans etc. The
returns are stable and risk are very low.
Sum-assured* and Fund value with terminal bonuses* are given on maturity. Other benefits
given are accidental aids benefit, risk protection of finance of sudden uncertainties. Covers*
are the rate at which sum assured is multiplied to give the actual rate of return for certain
period.
Unit-Linked Plan – Unit linked plan are also popularly known as ULIP plans. These plans
are new concept which depends on security market. The plans rely on highest NAV (Net
Asset Value) of market. The plans are mainly for investment purpose and are designed for the
need for customer who urges for higher return. The risk is high but return is high. Policies
like Crest gives guarantee on higher return through highest return in the plan period. Other
examples are pro growth super, new money back policy etc.
There is also provision of funds like short term fund*, income fund*, balance fund*, blue chip
fund* and opportunity fund*. The risk and returns increases respectively with different funds.
The customer has option to choose any of this fund and invest in it. They also can use the
option of switching in which they can wholly or partially transfer their money from one fund
to another and nominal amount is charged for switching option of the fund.

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( ‘*’ denotes that look for annexure at the back)
Protection plans
The protection plan is for safeguarding well being of the family and protects from uncertain
financial scarcity in time of need. The protection plan mainly covers the uncertain demises,
critical illness, accidental assistance for finance, major operations and transplants. This plan
helps to protect family and individual for future. Some of plans provide by HDFC life under
this heading -
 HDFC Term Assurance Plan
 HDFC Premium Guarantee Plan
 HDFC Loan Cover Term Assurance Plan
 HDFC Home Loan Protection Plan
Children’s plan
The children’s plan mainly emphasis on benefit of child in future. The plan covers child to
youngsters .The plan is designed to secure a better life with protection from uncertainties and
give financial strength for future development of the Children. It indirectly fulfil the need of
education, marriage etc. Some of plans provide by HDFC life under this heading -
 HDFC SL Youngstar Super II
 HDFC SL YoungStar Super Premium
 HDFC Children's Plan

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Health Plans
Health Plans give the benefit for risk of health problems due to change in lifestyle, age,
geographical condition, critical activities like exposure to radioactive material. It ensures the
policy holder is in safety financial no matter how critical the illness is. Some of plans provide
by HDFC life under this heading –
HDFC Critical Care Plan
HDFC SurgiCare Plan
Saving and Investment Plans
A wise family will definitely invest on securing the future and gain financial favour through
its own investment and gain more return. Investment Plans assures the customer lump sum
amount as interest and bonus. The plan also motivates to save and invest more rather than
spending. For faster growth and prosperity saving and investment are best suited for
customer. Mainly young entrepreneur can choose this option. The plan pave the way to
financial goal. HDFC life gives different financial consultancy support on investment plans
purposes through experts and suit the plan according to need of customer. Some of plans
provide by HDFC life under this heading -
 HDFC SL Crest
 HDFC SL ProGrowth Super II
 HDFC SL ProGrowth Maximiser
 HDFC Endowment Assurance Plan
 HDFC SL New Money Back Plan
 HDFC Single Premium Whole of Life Insurance Plan
 HDFC Assurance Plan
 HDFC Savings Assurance Plan
 HDFC SL ProGrowth Flexi
 HDFC SL Endowment Gain Insurance Plan
 HDFC SL ClassicAssure Insurance Plan

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 HDFC Life Sampoorn Samridhi Insurance Plan
Retirement Plans
Retirement plans mainly emphasis on financial stability and security after retirement of
policyholder. The policy holder does not have to face scarcity of money to fulfil his/her need
or depend on others for money and he/she can lead a respectful life through this plans.
Retirement Plan provide them tool to accumulate their savings from regular income. Pension
plans are becoming more critical today as one’s living standard, inflation etc. Some of plans
provide by HDFC life under this heading -
 HDFC Personal Pension Plan
 HDFC Immediate Annuity
 HDFC SL Pension Maximus
 HDFC Life Classic Pension Insurance Plan
Rural Products and Social Products
HDFC life also provides services to rural development and encourages small savings in rural
areas. HDFC life also insure development of large group and provide lump sum amount in
times or requirement or maturity whichever ends first .The dealing in this area is
comparatively lesser than other plans but it is raising for company. Some of plans provide by
HDFC life under this heading -
Rural Products
 HDFC Gramin Bima Kalyan Yojana
 HDFC Gramin Bima Mitra Yojana
 HDFC Bima Bachat Yojana
Social Products
 HDFC Development Insurance Plan

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SWOT ANALYSIS OF THE ORGANISATION
STRENGTH
 Strong brand name which creates trust among the mass
 Domestic player in the country therefore knows the market better
 More competitive sense and better equipped with man power loyalty.
 First mover advantage in Insurance market in India.
 Strong Financial hold in assets and securities.
 Liberalization and Privatization are giving exposure towards foreign investment.
 Large pool of technical knowledge, skilled and talented employees are available.
 Association with very highly qualified, experienced and trusted Company call
Standard life.
WEAKNESS
 People rely on private insurance less because it is new concept in India and LIC is
having already good hold in the market.
 Cost of management is heavy in managerial activities like recruitment, training,
purchases as insurance sector definetly require this activities.
 The returns profit in starting is low as huge investment is done and returns began to
come in later period which may sometime be difficult for company to operate in
liquidity prospect
 Poor retention tied up agents.
OPPORTUNITIES
 Large Indian market which is unexplored and untapped even now.
 Growing standards of people and open thinking of new generation of ‘spending rather
than saving’.
 World class standard and expertise has a huge opportunity towards setting standards.
International companies can help setting a trend and a standard.
 Better outsourcing opportunities in Indian market through technical skills of Indian
experts.

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THREATS
 Cut throat competition by the other leading players like LIC,SBI Insurance, Birla
Sunlife etc.
 Attraction towards Indian market and entrance of big players like AIG through joint
venture with Indian big players like TATA, Reliance etc.
 Attractive offers and rigorous innovation can divert the minds of customers towards
other players.
 Large number of competitors and still the number of competitors are growing.
********************

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OBJECTIVES OF THE STUDY
 To analyze the product details of HDFC Standard life Insurance Company limited
and other insurance company.
 To find ‘Points of Parit y’ and ‘Points of Differen ce’ of HDFC Standard
Life Insurance Company Limited and other insurance company.
 To find out factors that influence customers to purchase insurance
policies and give suggestions for further improvement.
 To study of consumer satisfaction with other insurance company and HDFC.
 To know about the position of HDFC bank.
 To know about tax benefits on insurance.
 To know reason for preference for an insurance policy.

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RESEARCH METHODOLOGY
The project is based on Insurance in India, Future of Insurance in India & unit linked
insurance plan market in India for that , I prepared a questionnaire , based on which , I
took personal interviews . I have also used information from different Websites,
brochures of the organizations & articles from various newspapers. The topics are
dealt with in a general manner. There would be details, which could vary from
company to company. Overall, following tools were used to build this project.
SAMPLING METHODOLOGY
Sampling Technique:
Initially, a rough draft was prepared keeping in mind the objective of the research. A
pilot study was done in order to know the accuracy of the Questionnaire. The final
Questionnaire was arrived only after certain important changes were done. Thus the
sampling came out to be judgemental and convenient.
Sampling Unit:
The respondents who were asked to fill out questionnaires are the sampling units.
These comprise of customers, employees of MNCs, Govt. Employees, Self
Employeds etc.
Sample size:
The sample size was restricted to only 100, which comprised of mainly peoples from
different regions of Gwalior (M.P) due to time constraints.
Sampling Area:
The area of the research was Gwalior (M.P)

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LIMITATIONS OF THE RESEARCH
1. The research is confined to a certain parts of DELHI and does not necessarily
shows a pattern applicable to all of Country .A small number of 100 also does not
show the pattern of the whole city.
2. Some respondents were reluctant to divulge personal information which can affect
the validity of all responses.
3. In a rapidly changing industry, analysis on one day or in one segment can change
very quickly. The environmental changes are vital to be considered in order to
assimilate the findings.
4. The training period was very less.

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Comparative Analysis of Insurance Market in India 2013-2014
Some of the major players in Indian life insurance market which are with
competition to HDFC life are as follows-
 Life Insurance Corporation of India (LIC)
 SBI Life Insurance Company Limited .
 Max New York Life Insurance Co. Ltd.
 ICICI Prudential Life Insurance Company Ltd.
 Om Kotak Mahindra Life Insurance Co. Ltd.
 Birla Sun Life Insurance Company Ltd.
 Tata AIG Life Insurance Company Ltd.
 ING Vysya Life Insurance Company Private Limited
 Allianz Bajaj Life Insurance Company Ltd.
 Metlife India Insurance Company Pvt. Ltd.
 AMP SANMAR Assurance Company Ltd.
 Dabur CGU Life Insurance Company Pvt. Ltd.

28. LIC and is at the pinnacle as it is the oldest running insurance giant in the country and
government undertaking company. Other private companies which follow with high rise are
Tata AIG, Birla sunlife, Kotak Mahindra and Bajaj Allianz. The main reason behind LIC in
top slot is that it had gained trust with the people for so many years and build a big market
share. People are slowly gaining trust on private players but are not fully confident on
investing on private players. In short LIC has built a monopoly in the market.SBI life
insurance company ltd. is also performing well as a government company.
The private players have to compete more for establishing their name in the market. So far
many private companies were established after 2000 after government deregulated act for
privatization of Insurance. The private players are new to the market and are in process to
gain some reputation and market share. Many private has collaborated with experienced
foreign giants to give better output and gain experience and also following the regulations of
IRDA to joint venture with parent company of private companies.
28
A Comparative study of different life insurance companies
operating in India 2011

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Diagram Courtesy: www.freepress.in
As per the diagram the biggest pie is possessed by LIC with 50% share. ICICI prudential is
the second in share with 10% and first in private sector to have the bigger pie. HDFC life
market share has overall 6%. HDFC life has increased its share from 4.6% (Financial year-
2008) to 6% (2010 December) which is appreciable. The share may look tiny but is expected
to grow to 9% due to rise in market shares and growing trust among people on HDFC life.
The returns are also coming back after long investment gradually for the company which
shows positive sign. But comparing to many Private companies except ICICI prudential
HDFC life market share is comparatively is in descent zone and can be placed in second in
private sector market share as per diagram. Other companies like Reliance, Bajaj, Max, Birla,
Tata, Met and Kotak are holding market shares of 5%, 4%, 3%, 4%, 2%, 1% and 2 %
respectively. Other players holds 8 % of total market share.
April 2010 to February 2011
As per the statistics released by the Insurance Regulatory and Development Authority
(IRDA), the life insurance industry collected weighted new business premium income of
Rs574 billion in the first eleven months of FY2010-11 (April 2010 to February 2011).
Private sector life insurers witnessed a decline of 15.1 per cent in their weighted new business
premium in this period, while state-owned insurer LIC registered a significant increase of
61.0 per cent in its weighted new business premium collection. As a result, the weighted new
business market share of private sector life insurers decreased to 40.0 per cent compared to
55.9 per cent in the corresponding period of FY2009-10.
Despite experiencing a negative growth of 12.9 per cent, ICICI Prudential maintained its
position as the market leader, a position which it has held since the beginning of this financial

30. year. SBI Life ranked second, with a negative growth of 33.2 per cent, down from its position
as the market leader in FY2009-10. HDFC Life, which was ranked fourth in the same period
the previous financial year, registered a 13.0 per cent growth and progressed to the third
position.
Of the 22 private life insurers, only eight registered positive growth in weighted new business
premium in the first eleven months of FY2010-11. This list of positive performers includes
three companies among the top 10 - HDFC Life, Max New York Life and Canara HSBC
OBC Life, with the rest being smaller players with less than one per cent market share.
With insurers reported to increase focus on single premium business through more single
premium product launches, business under single premium domain witnessed an increase of
about 31 per cent in the period April 2010 to February 2011 as compared to the same period
in the previous fiscal. Major increase was due to the private players which saw an increase in
single premiums of about 210 per cent in this period.
The graph given below compares the weighted new business premium income written by
private sector life insurers in the first eleven months of FY2010-11 with the same period of
FY2009-10.
30

31. 31

32. ULIP Scenario- ULIPs Contribution To Policies Sold In 2010-11 (Up To 8
March, 2011)
As per Life Insurance Council data, an industry body of life insurance companies in India,
Life insurance industry paid Rs 10954 crore in commission to insurance agents in 9 months
during April-December 2010 period. Total commission paid to agents fell to 5.88 per cent of
the total premium collected, against 6.41 per cent in the same period last year. The number of
agents also dipped by 2,73,984 to 27,10,301, as compared to 29,84,285 in 2009. Life
Insurance Corporation, the only state-owned life insurer, also reduced its agent strength by
62,956 during the calendar
HDFC life has performed well in ULIP sector and earned profit from ULIP plans. HDFC see
better earnings in ULIP plans therefore trying to concentrate more in ULIP through various
existing market securities .ULIP is growing trend in Indian Insurance market. A tie with SEBI
and IRDA regulation are followed by companies to earn faster profit and growth. There is
competition in ULIP sectors .
32
**********

33. 33
Taxation on Life
Insurance

34. 34
A brief about taxation in life insurance sector
The life insurance market is overflowing with variety products like pure life insurance, health
insurance, children insurance plan, pension plan etc. giving you a wide spectrum to choose
from. Life insurance is an amazing tax-saving tool and an indispensable part of an individual's
financial planning exercise.
Life Insurance is a critical part of an individual's personal insurance portfolio. It's a strategic
part of the future security that one must provide for one's family in the face of the inevitable.
Insurance is an important part of Income tax regulation.
The proper type and the appropriate level of life insurance can be a matter of life and death.
Securing the long-term financial security and quality of life for the people you love most is
crucial, and the first step in securing it is life insurance.
Many individuals also look at life insurance from tax planning perspective.
INCOME-TAX SURCHARGE RATE AS PER INCOME OF INDIVIDUAL AND HUF
A] INCOME-TAX RATES FOR ASSESSMENT YEAR 2011-2012 (FINANCIAL
YEAR 2010-2011)
Income Slabs
Tax Rates
Individual & HUF
below age of 65
years
Woman below age of
65 years
Individual above age of
65 years
Income upto
Rs.1,60,000
Income upto Rs.1,90,000 Income upto Rs.2,40,000 NIL

35. 35
Rs.1,60,001 to
Rs.5,00,000
Rs.1,90,001 to
Rs.5,00,000
Rs.2,40,001 to
Rs.5,00,000
10%
Rs.5,00,001 to
Rs.8,00,000
Rs.5,00,001 to
Rs.8,00,000
Rs.5,00,001 to
Rs.8,00,000
20%
Above Rs.8,00,001 Above Rs.8,00,001 Above Rs.8,00,001 30%
Education Cess : An additional surcharge called as ‘Education Cess’ is levied at the rate of
2% on the amount of Income tax and surcharge (if any) in all cases shall be levied.
Secondary and Higher : An additional surcharge, called the "Secondary and Higher
Education Cess on income- at the rate of 1% of income-tax and surcharge (not including the
“Education Cess on Income-tax”) in all cases shall be levied.
With the introduction of the Direct Tax Code (DTC), to be implemented from the next
financial year i.e. April 2011 onwards, only the approved pure life insurance products and
annuity schemes would fall under the EEE tax status. As per the EEE tax regime the
investments made into the life insurance policy, the earnings and the withdrawal all are
exempt from tax.
As per the DTC, rest of the life insurance schemes apart from those stated above would fall in
the EET (Exempt, Exempt, Tax) category i.e. the withdrawals under these schemes would no
longer be tax free. DTC deals with calculating the income eligible for taxation.
Some of the introductions as per the DTC are -
 The Section 56(2)(f) of the DTC, states that amount that is received from life
insurance policy including any amount received as bonus on the policy will be taxed
under 'gross residuary income'.
 The Section 57(3) of the DTC deals with deductions applicable on `gross residuary
income’. According to this section, bonus and any other amount received on the life
insurance policy, except in case of key man Insurance, will be exempted from tax if

36. the premium paid is up to a maximum of 5% of the sum assured. Also the receipt from
life insurance should be only after the completion of the policy term or in case of
death of insured.
DTC is framed with a view to improve the Indian Taxation System, making it at par with the
international standards
36
Income Tax on Insurance- A Review
As we already completed the financial year march 2010-11, we start to worry about planning
our investments to ensure maximum tax savings. The fear of finishing and furnishing our
Income Tax details, and filing the IT returns on time engulfs us.
Various Sections relating to Income Tax
As per The Income Tax Act 1961, amended in 2008, there are 9 major sections
1. Section 80C:
Section 80L used to allow deduction of interest earned on, say, a National Savings Certificate or a bank deposit
up to a limit of Rs 12,000. But now all these are gone .In their place has come Section 80C -- "u/s 80CCC, & u/s
80CCD", as the Finance Bill puts it. Thus, the new Section 80C of the Income Tax Act proposed in Union
Budget gives you a bigger tax break than what the current regime offers.
 Deduction in respect of Life Insurance Premia , Contribution to Provident Fund, etc.
 Rs 1 lakh can be invested under this section without any individual sub-limits except in the
case of Rs 10,000 in pension funds.
 Sections 88, 80L, 80CCC and 80CCD in. is clubbed
Schemes eligible for Section 80C benefits
 PPF
 ELSS - Mutual Funds

37. 37
 NSC
 KVP
 Life Insurance
 Senior Citizen Saving Scheme 2004
 Post Office Time Deposit Account
Note : - Section 80CCC is for deduction in respect of contribution to certain Pension Funds. Section 80L is for
deductions in respect to Interest on certain Securities, Dividends, etc
Sections abolished from Union Budget 2005-06
 88 (Rebate on Life Insurance Premia, Contribution to Provident Fund, etc.)
 80L (Deductions in respect to Interest on certain Securities, Dividends, etc.)
 Note :-
Rebate of Rs 5,000 for women and Rs 20,000 for senior citizens have been wiped off.
The key features of the new provision
 Exemption available to all taxpayers irrespective of income bracket -earlier Section 88 did not
provide benefit to those having income exceeding Rs 500,000.
 No exemption/adjustment for interest income
 All saving modes/options under Section 88 covered and also 80CCC and 80CCD covered.
Following benefits will continue irrespective of changes
 Interest paid on housing loan for self-occupied house property.
 Medical insurance premium. (Additional deduction of Rs 15000 u/s 80D to an individual
paying medical insurance premium for his/her parent(s)
 Specified expenditure on disabled dependant.
 Expenses for medical treatment for self or dependant or member of an HUF.
 Deduction in respect of interest on loans for pursuing higher studies - Section 80E.
 Deduction to person with disability.

38. 38
Minimum Period of Holding:
 Unit-linked Insurance Plan -- 5 years,
 Life Insurance Premium -- 2 years
 Cost of construction or purchase of residential property -- 5 years
 Time deposit in Post Office Rules, 1981 -- 5 years
 Senior Citizen Saving Scheme Rules, 2004 -- 5 years.
2. Section 80CCC:
Deduction for Contribution to Pension Funds
3. Section 80D:.
Health Insurance premiums paid for insuring your own health, or that of your spouse, parents
and children also allows you to avail of tax rebates
4. Section 80DD:
Any expenses incurred on the treatment of a handicapped dependent fall under this section.
5. Section 80DDB:
The deduction is allowed only for the diseases/ ailments prescribed in Rule 11DD.

39. 39
6. Section 24 :
The interest paid for a personal loan taken for acquisition, construction and renovation of the
house can be claimed for tax deduction up to Rs. 1.5 lakh.
7. Section 80E:
Deduction in respect of repayment of loan taken for higher education
8. Section 80G:
Deduction in respect of donations to certain Funds, Charitable Institutions etc.
9. Section10(33)
Dividends from mutual funds are fully exempt from income tax under Section 10(33).
Equity funds (schemes that invest 50 per cent of their funds in equity) are also exempt
from dividend tax. This means that unlike companies, they do not have to pay tax at
the rate of 10.2 per cent on the dividend that they distribute.
10. Section88
Upto 31 March 2005, rebates were available on the tax payable under three sections.
According to the section, 30 per cent or 20 per cent or 15 per cent of the amount
invested in certain schemes (schemes referred in Section 80C) was available as a
rebate on the tax payable.
 30 per cent of the amount invested was available as rebate only if the salary income of
the individual was less than Rs. 1 lakh and if it constituted 90 per cent or more of the
assessee’s gross total income.
 20 per cent of the amount invested was available as rebate if the gross total income of
the individual was less than Rs 1.5 lakh and the case did not fall under the above
mentioned case.
 If gross total income was more than Rs. 1.5 lakh but less than Rs 5 lakh of the
individual, a rebate of 15 per cent of the amount invested was available.

40.  If gross total income was more than Rs 5 lakh of the individual, then there is no
40
rebate.
11. Section 88B
Under this section, an individual resident in India and above the age of 65 years was allowed
to a maximum rebate of Rs. 20,000 on the tax payable.
12. Section88C
Under this section a lady resident in India, aged below 65 years, was allowed a
maximum rebate on the tax payable of Rs 5,000.
13. Section89 (1)
This is available to an employee when he receives salary in advance or in arrear or
when in one financial year, he receives salary of more than 12 months or receives
'profits in lieu of salary' W.e.f. 1.6.89, relief u/s 89(1) can be granted at the time of
TDS by employees of all companies co-operative societies, universities or institutions
as well as govt./public sector undertakings. The relief should be claimed by the
employee in Form No. 10E and should be worked out as explained in Rule 21A of the
Income Tax Rules.
Note: The key point to be remembered in all the cases is that the above exemptions can be
availed only if the policy serves the minimum lock in period term i.e. 3 years which is now
raised to 5 years. If an individual withdraws the policy beforehand, these provisions are no
longer applicable.
Instruments that help us Save Tax
Life Insurance: All investments made towards Life Insurance are eligible for are bate u/s 80C
of the Income Tax Act. Life Insurance products with a minimum lock in period of 3 yrs only
are eligible for the rebate. Premiums paid under pension plans of various life insurers are also

41. eligible for Tax rebate. The major advantage of a Life Insurance product is that they provide
tax free interest income.
41
 Equity Linked Saving Schemes:
These are Mutual Fund products and carry market risk. These too, like life insurance
products, are eligible for tax rebate u/s 80C, if they have a lock in period of 3 years. A major
disadvantage of these instruments is that they do not provide life cover.
 Public Provident Fund:
These are 15 year long investments and provide tax-free returns. The current rate of returns is
8%. Maximum investment allowed under this instrument is Rs. 70, 000, which is eligible for
a rebate u/s 80C.
 Bank Deposits:
Tax rebate is available for 5 yrs deposits in any scheduled bank. The point to remember is
that the entire interest income is taxable.
 National Saving Certificates:
Government sponsored securities certificates, which are available in denominations of Rs.
100, Rs.500, Rs. 1000, Rs.5000 & Rs. 10,000 may be purchased from any post office, either
directly or through authorized agents. They currently provide a rate of interest @ 8.16% p.a.
compounded half yearly and paid after the maturity period of six years along with principal.
Interest accruing annually is automatically reinvested and such re invested interest also
qualifies for rebate u/s 80C of Income Tax Act. The interest earned is completely taxable.
 Home Loans:

42. Section 24 of the Income Tax Act allows you to deduct the total interest paid on your home
loan from your taxable income for the same financial year. You can also claim arebate u/s
80C for the principal amount repaid on the home loan.
42
 Tuition Fee:
The entire tuition fee paid for up to two children is exempted from tax. Donations of anykind
like development fee etc. are excluded from the same.
 Loan on Higher Education:
Those servicing a loan taken for higher education can claim a deduction on the interestpaid
for the loan u/s 80E of the Income Tax Act. Currently there is no ceiling on theinterest
amount that can be claimed under this section. The principle amount is however completely
taxable
 Health Insurance Plans:
Rebate is available u/s 80D of the Income Tax Act, for premiums paid for self, spouse,
children and parents. A limit of Rs.15, 000 is fixed for premiums paid for self, spouse and
children’s. There is an additional benefit of Rs. 15,000 on premiums paid for parent(s) and in
case the parents are senior citizens, the upper limit increases to Rs.20,000 .
 Enjoy Dual Tax Benefits with Life Insurance:
 Save tax on Regular Premium pay
 ents - All the premiums paid towards insuring your life are exempted from tax up to
Rs. 1,00,000/- as specified in section 80C of the Income tax act.
 Enjoy Tax free Maturity returns - One of the biggest advantages of investing in Life
Insurance policies is that, the complete maturity amount is tax free.

43.  Thus, you save tax not only at the time of investing in a life insurance plan, you also
43
get completely tax free returns after maturity.
Tax Benefits on Insurance and Pension
Life insurance and retirement plans are effective ways to save taxes when doing your yearend
tax planning. To assist in tax planning, the tax breaks that are available under our various
insurance and pension policies are described below:
1. HDFC life’s life insurance plans are eligible for tax deduction under Sec. 80C.
2. HDFC life’s Pension plans are eligible for a tax deduction under Sec. 80CCC.
3. HDFC life’s health insurance plans/riders are eligible for tax deduction under Sec. 80D.
4. The proceeds or withdrawals of our life insurance policies are exempt under Sec10(10D),
subject to norms prescribed in that section.
A life insurance tax shelter uses investments in life insurance to protect income or assets from tax
liabilities. Life insurance proceeds are not taxable in many jurisdictions. Since most other forms
of income are taxable (such as capital gains, dividends and interest income),consumers are
often advised to purchase life insurance policies to either offset future tax liabilities, or to
shelter the growth of their investments from taxation
Life insurance to cover future taxes
In those jurisdictions where life insurance proceeds are only tax free at death, tax liabilities
that come due at death are often offset by a policy of the same size. Since the mathematics
required to compare different strategies is quite complex, most consumers defer to an
accountant or life insurance agent for advice. However, there are often vast differences
of opinion between these professionals, even given the same starting conditions. This should
not be surprising, given the huge future differences that even small variances in starting
conditions can make.

44. For example, assume that an individual is likely to owe $100,000.00 in taxes at death. If a
permanent life insurance policy with a $100,000.00 death benefit costs $1,000 per year
(remaining level for life), and the life expectancy of the person is 30 years, then thefollowing
events could occur.
 The individual could die early. In this case, it is unlikely that any alternative
investment of the $1000 per year would have yielded the required $100,000.00 at
death.
 The individual could live much longer than expected. The individual could have built
up a significant cash value within the policy, depending on investment selection. As
such, the individual would have access to these cash values tax-free regardless of
growth, provided it is set up properly.
Since one normally does not know which of these will occur (see adverse
selection) calculations must be based on expected life expectancies for people of
similar gender, physical condition, and behaviour.
44
Life insurance to shelter investment growth and income
In an attempt to achieve the "best of both worlds" (protection in the case of early death, and
additional tax-protected returns in the case of long life), life insurance policies were created
containing investment accounts having preferential tax treatment. This is most often done
with a Variable universal life policy. See that article for some discussion of the tax issues.
Some important tax benefits available under various plans of life
insurance are highlighted below-

45. B] SOME IMPORTANT INCOME TAX BENEFITS AVAILABLE UNDER VARIOUS
PLANS OF LIFE INSURANCE ARE HIGHLIGHTED BELOW:
1) Deduction allowable from Income for payment of Life Insurance Premium (Sec.
80C).
(a) Life Insurance premium paid in order to effect or to keep in force an insurance on the life
of the assessee or on the life of the spouse or any child of assessee & in the case of HUF,
premium paid on the life of any member thereof, deduction allowed upto 20% of capital sum
assured during any financial year.
(b) Contribution to deferred annuity Plans in order to effect or to keep in force a contract for
deferred annuity, on his own life or the life of his spouse or any child of such individual,
provided such contract does not contain a provision to exercise an option by the insured to
receive a cash payment in lieu of the payment of annuity is eligible for deduction.
45
(c) Contribution to Pension/Annuity Plans - New Jeevan Dhara-I & Jeevan Akshaya - VI
2) Jeevan Nidhi Plan & New Jeevan Suraksha - I Plan (U/s. 80CCC)
A deduction to an individual for any amount paid or deposited by him from his taxable
income in the above annuity plans for receiving pension (from the fund set up by the
Corporation under the Pension Scheme) is allowed.
NOTE: The premium can be paid upto Rs.1,00,000/- to avail deduction u/s.80C, 80CCC &
80CCD (80CCD- Deduction in respect of contribution to pension scheme of Central
Government.). However, there is no sectoral cap i.e. the limit of Rs.1,00,000/- can be
exhausted by paying premium under any of the said sections.
3) Investment under long-term infrastructure bonds notified by the Central
Government. (Sec. 80CCF)
A deduction up to Rs. 20000/- is available to individuals and HUF for amount paid or
deposited as subscription to long-term infrastructure bonds notified by the Central
Government. This is in addition to Rs. 1 lakh deduction available under section 80C.

46. 46
3) Deduction under section 80D
1. Deduction allowable upto Rs.15,000/- if an amount is paid to keep in force an
insurance on health of assessee or his family (i.e. Spouse & children)
2. Additional deduction upto Rs.15,000/- if an amount is paid to keep in force an
insurance on health of parents
3. In case of HUF, deduction allowable upto Rs.15,000/- if an amount is paid to keep in
force an insurance on health of any member of that HUF
.
4) Jeevan Aadhar Plan (Sec.80DD) :
Deduction from total income upto Rs.50000/- allowable on amount deposited with LIC under
Jeevan Aadhar Plan for maintenance of an handicapped dependent (Rs.1,00,000/- where
handicapped dependent is suffering from severe disability)
5) Exemption in respect of commutation of pension under Jeevan Suraksha & Jeevan
Nidhi Plans:
Under Section 10(10A) (iii) of the Income-tax Act, any payment received by way of
commutations of pension out of the Jeevan Suraksha & Jeevan Nidhi Annuity plans is
exempt from tax under clause (23AAB).
6) Income tax exemption on Maturity/Death Claims proceeds under Section 10(10D)
Under the provisions of section 10(10D) of the Income-tax Act, 1961, Maturity/Death claims
proceeds of life insurance policy, including the sum allocated by way of bonus on such policy
(other than amount to be refunded under Jeevan Aadhar Insurance Plan in case of
handicapped dependent predeceases the individual or amount received under a Keyman
Insurance Plan) is exempted from income-tax. However any sum (not including the premium
paid by the assessee) received under an insurance policy issued on or after the 1st day of
April, 2003 in respect of which the premium payable for any of the years during the term of
the policy exceeds 20% of the actual capital sum assured will no longer be exempted under
this section.

47. 47
Finding
 Customers are less aware about the private insurance company in
market .
 Some customer l ikes to join HDFC as FCs because it is a Part -time
job.
 Customers d o n ’ t want to join as financial consul tant because i t’ s on
commission basis and they want the job on salary basis. .
 Educated customers are now vending twards private insurance
companies due to the at tract ive package and service provided by
various new insurance companies.
 LIC has created a branded image in 3-4 decades, due to which new
insurance companies are facing trouble in capi tal market share
 HDFC SLIC is having good retent ion strategies for their financial
consul tant .
 As the people think that insurance is a tool to protect their family & a tax saving
device. They are aware of the fact & realizing its, importance. The company should
try to expand & build up its infrastructure because there is a large potential for
insurance in India.

48. 48
Suggestions
 To make people aware about the benefits of HDFC standard life insurance policy,
following activities promotional activities should be carried out:
.Printed media
. Hoardings & Banners
 The fear in the customer mind should be removed by company.
 The insurance companies should try to nurture their brand name t imely
and attractive facility provide to customer.
 Since HDFC Standard Life Insurance Company Ltd is leading with several
companies’ policies it should be easy for them to penetrate into the market and secure
a good position if they increase the number of branches and diversify their business to
various other regions. .
 As seen from the survey that at present 70% of the customer are having insurance
policy out of which 87.5% of the customer are planning for new investments. So it can
be a good potential for the company and they should make an attempt to tap these
customers.

49. 49
CONCLUSION
Life Insurance plays a vital role and has become an important part in our life. This is a
popular medium which assures us hope to lead a better life with financial security and
strength and make us care free from unknown financial risk such as scarcity in times of need
in future. It is truly a noble job.
With change in time the face of insurance sector has changed and grown to better level
because of the complexity in the social, political and culture. Insurance has become a new
medium of investment. The best part is that tax is not levied in life insurance plans. So many
investors take it as a better option to invest for savings and relief from tax.
Life Insurance is surely beneficial and encourages saving. The purpose behind life
Insurance is not only investment or tax saving but also to create value for money. It promises
stability of our hard earned money and gives extra benefits in return like bonus, accidental
aids, bonus, savings, child and retirement benefits etc.
The privatisation of Insurance companies by government of India created a milestone in
booming of Insurance market in India. Companies like HDFC life has are new born babies in
this sector but they have huge scope in future to come. The main strength of HDFC life is
knowing of domestic market better so it should take more advantage from its strength. The
standard in service of Insurance market is flourishing due to entry of many private companies
but competition has grown in much faster pace. Therefore new born companies and foreign
companies has to be more competitive, alert, aware and innovative to survive in such
scenario.

50. 50
QUESTIONNAIRE
1. ARE YOU EMPLOYED?
YES NO
2. YOUR MONTHLY INCOME?
a)<5L b)5L-10L c)10L-15L d)15L<
3. DO YOU HAVE ANY INSURANCE POLICY?
YES NO
4. WHICH INSURANCE POLICY DO YOU HAVE?
LIFE NON-LIFE BOTH
5. WHAT IS YOUR PURPOSE OF TAKING AN INSURANCE COVER?
(RANK THEM)
a) COVER FUTURE UNCERTAINITY
b) TAX DEDUCTIONS

51. 51
c) FUTURE INVESTMENT
d) ANY OTHER _________ (Specify)
6. WHAT FACTORS AFFECT YOUR POLICY BUYING DECISION?
(RANK THEM)
a) LOW PREMIUM
b) LARGER RISK COVERANCE
c) MONEY BACK GUARANTEE
d) REPUTATION OF COMPANY
e) EASY ACCESS TO AGENTS
f) ANY OTHER _________ (Specify)
7 DO YOU PREFER PRIVATE INSURANCE COMPANIES OVER GOVERNMENT
COMPANIES ?

52. 52
YES
NO
8. WHICH CO’S INSURANCE POLICY YOU PREFER THE MOST?
(RANK THEM)
a) LIC
b) ICICI PRUDENTIAL
c) SBI LIFE INSURANCE
d) ING VYSYA LIFE
e) RELIANCE LIFE INSURANCE
f) TATA AIG LIFE
g) ANY OTHER ________( Specify)
9. WHAT IS YOUR REASON FOR PREFERENCE OF AN INSURANCE POLICY ?
a) EASY ACCESSABILITY

53. 53
b) MORE SECURITY
c) BETTER SECURITY
d) MORE INFORMATION & HELP
e) CUSTOMER ORIENTATION
10. YOUR INSURANCE PLAN INSURES YOU FOR HOW MANY YEARS ?
(Please Tick)
a) >5Yrs b) 5-10 Yrs c) 10-15 Yrs d) 15Yrs<
11. DO YOU PAY TAXES?
YES NO
12. WHERE HAVE YOU INVESTED FOR TAX SAVING?
(RANK THEM)

54. 54
a) LIC
b) NSC
c) BONDS
d) PPF
e) PF
f) EPF
13. ARE YOU SATISFIED WITH THE POLICY?
a) SATISFIED
b) NOT SATISFIED
c) NO COMMENTS
14 . WOULD YOU BE INTERESTEDIN AVALING ANY OF THE FOLLOWING FINANCIAL PLANNING
SERVICES?

55. 55
a) WEALTH CREATION PLANS
b) INVESTMENT PLANS
c) CHILDREN FUTURE PLANS
d) TAX PLANNING
e) RETIREMENT PLANS
f) RISK MANAGEMENT & INSURANCE

56. 56
Bibliography
websites
www.moneycontrol.com
www.hdfclife.com
www.irdaindia.com
www.wikipedia.com
www.authorstream.com
www.scribd.com
www.investmentmoney.com
www.incometaxindia.gov.in
Journals and books
 Peraswamy, P., Principles and Practices of Insurance, 1st edition,
Himalaya Publishing house 2003.
 Outlook money
 Economic times

57. 57