accedintal max life insurance

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A PROJECT REPORT

ON

EMERGENCE OF MAX NEW YORK LIFE ONE

OF THE BIGGEST PRIVATE LIFE INSURANCE

PLAYER

A COMPARATIVE ANALYSIS WITH

OTHER MAJOR INSURANCE PLAYERS

Submitted as a part of curriculum in Masters of

Business Administration programme by INSTITUTE

OF MANAGEMENT SCIENCES UNIVERSITY OF

LUCKNOW

Academic Year 2008-2009

AMAR KUMAR GUPTA

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MBA (RETAIL MANAGEMENT)

(INSTITUTE OF MANAGEMENT SCIENCES

UNIVERSITY OF LUCKNOW,LUCKNOW)

CONTENTS

Chapter 1: EXECUTIVESUMMARY 6

Chapter 2: INSURANCE AN INTRODUCTION 7

Chapter 3: INDUSTRY PROFILE 18

3.1 ORIGIN OF INSURANCE

3.2 ORIGIN OF LIFE ASSURANCE IN INDIA

3.3 INSURANCE SECTOR REFORMS

3.4 POTENTIALITY OF INSURANCE IN INDIAN MARKET

Chapter 4: LIFE INSURANCE PRODUCTS 29

4.1: WHOLE LIFE POLICY

4.2: ENDOWMENT POLICY

4.3: MONEY BACK POLICY

4.4: TERM POLICY

4.5: ANNUITY

4.6: JOINT LIFE POLICY

4.7: GROUP INSURANCE

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Chapter 5: IRDA ACT 1999 36

5.1: DUTIES, POWERS, FUNCTIONS

Chapter 6: PLAYERS IN INDIAN INSURANCE INDUSTRY 39

6.1: LIFE INSURERS

6.2: GENERAL INSURERS

6.3: INSURANEC BUSINESS

Chapter 7: COMPANY PROFILE 43

7.1: ABOUT ICICI PRUDENTIAL7.2: PRODUCTS

7.3: ABOUR THE PARTNERS

7.4: INSURANCE PLANS

Chapter 8: MARKETING RESERCH 58

Chapter 9: CONCLUSION 88

Chapter 10: RECOMMENDATION 90

Chapter 11: BIBLIOGRAPHY 92

Chapter 12: ANNEXURE 93

QUESTIONNAIRE

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ACKNOWLEDGEMENTThere is always a sense of gratitude which one express to other for the helpful so

needy services they render during all phases of life. I would like to express my

gratitude towards all those who have been helpful to me in getting this mighty

task of training to a successful end.

First of all, I consider it a pleasant duty to express my heart felt appreciation

, gratitude and indebtedness to Mr. Abhishek Gupta (Manaer! Aen"#

Re"ruit$ent% & Mr.Su$it Naran(Sa'es Manaer% for his keen interest,

invaluable pain taking & excellent guidance, patience, endurance,

encouragement & thoughtful advice throughout the project work duration.

I would also like to be thankful to Mr. Ka'han Kau' (ran"h Manaer) MA*

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NEW YORK L+,E +NSURANCE) S-A-A-AN/UR%) who has given me the right

way to prepare my project report.

I am also thankful to all my friends who gave me constant & continuous

inspiration to complete this project.

(AMAR KUMAR GU/TA%

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/RE,ACE

Insurance market is growing very fast. The opportunity is also high in this sector

as only ! of Indian market is covered by this sector and the players are trying

to extend in to the rest untapped "!.

Though #I$ in India is the market leader, relatively younger private organi%ation

are also doing well in this sector. This is the pick time for all the players to

capitali%e this growth and increase their market share through good distribution

channel network. '( )*+ -/ is one of the major #ife insurance player.

who is emerging a market leader among private insurance group.

The success story of good market share of different organi%ation depends on the

distribution channel network of the organi%ation. The distribution channel network

is the interface between the producer or service provider and user. 0ence it

should be highly effective to create a good brand perception on its user.

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Chapter ! 0

E*ECUT+1E SUMMARY

The Indian Insurance Industry is broadly segmented into public and private

insurance companies. 1efore year 2333, only public sector insurance

companies were allowed to do business in India. 1ut after year 2333, insurance

sector was thrown open for private insurance companies as well.

1ut as of now there now around 4" private life insurance companies and around

" private non5life insurance companies doing business in India.

This report is prepared with an aim to provide an overview of present Indian

Insurance Industry. 'lso with #I$, heading the public life insurance companies

and '( )*+ -/ #IF* heading the private life insurance players, this

report also provides a comparative analysis of #ife policies.

1ased on this report , the prospecting insurance customers would get help in

choosing the right insurance products for themselves.

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Chapter ! 2

+NSURANCE 3 AN +NTRODUCT+ON

Insurance may be described as a social device to ensure protection of economic

value of life and other assets. 6nder the plan of insurance, a large number of

people associate themselves by sharing risks attached to individuals. The risks,

which can be insured against, include fire, the perils of sea, death and accidentsand burglary. 'ny risk contingent upon these, may be insured against at a

premium commensurate with the risk involved. Thus collective bearing of risk is

insurance.

Insurance is a contract whereby, in return for the payment of premium by the

insured, the insurers pay the financial losses suffered by the insured as a result

of the occurrence of unforeseen events. The term 7risk7 is used to describe the

possibility of adverse results flowing from any occurrence or the accidentalhappenings, which produce a monetary loss.

Insurance is a pool in which a large number of people exposed to a similar risk

make contributions to a common fund out of which the losses suffered by the

unfortunate few, due to accidental events, are made good. The sharing of risk

among large groups of people is the basis of insurance. The losses of an

individual are distributed over a group of individuals.

De4initi5ns8

Genera' 6e4initi5n7

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In the words of John Magee, Insurance is a plan by themselves which

large number of people associate and transfer to the shoulders of all,

risks that attach to individuals.

,un6a$enta' 6e4initi5n7

In the words of 9.:. 0ansell, ;Insurance accumulated contributions of all parties

participating in the scheme.ayment on happening of a special event

The amount of payment depends on the nature of losses incurred.

The success of insurance business depends on the large number of

people insured against similar risk.

Insurance is a plan, which spreads the risk and losses of few people among a

large number of people.

The insurance is a plan in which the insured transfers his risk on the insurer.

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Insurance is a legal contract which is based upon certain principles of

insurance which includes, utmost good faith, insurable interest, contribution,

indemnity, causas proxima, subrogation, etc.

The scope of insurance is much wider and extensive.

,un"ti5ns 54 insuran"e7

/ri$ar# 4un"ti5ns7

4. >rovide protection85 Insurance cannot check the happening of the risk, but

can provide for the losses of risk.

2. $ollective bearing of risk8 5 Insurance is a device to share the financial losses

of few among many others.

?. 'ssessment of risk8 5 Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk.

@. >rovide certainty8 5 Insurance is a device, which helps to change from

uncertainty to certainty.

Se"5n6ar# 4un"ti5ns7

4. >revention of losses8 5 Insurance cautions businessman and individuals to

adopt suitable device to prevent unfortunate conseAuences of risk by

observing safety instructions.

2. :mall capital to cover large risks8 5 Insurance relives the businessman from

security investment, by paying small amount of insurance against larger risks

and uncertainty.

?. $ontributes towards development of larger industries.

Other ,un"ti5n7

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eans of savings and investment:

Insurance companies are business houses. The product they sell is financial

protection. To succeed and survive, they must cover theircosts, which

include payments to cover the losses of policyholders, as well as sales and

administrative expenses, taxes and dividends.

+nsuran"e "5$panies ha8e t95 s5ur"es 54 in"5$e for covering these costs8

pre$iu$s and in8est$ent in"5$e. The premiums are collected on a regular

basis and invested in Bovernment 1onds, Bilt, stocks, mutual funds, real estates

and other conservative avenues. 0owever, investment income depends on

market conditions, interest rates, economy etc. and varies from year to year.

1ecause of the uncertainty associated with the investment income, insurance

companies must generate enough income from premiums to cover the bulk of

their expenses.

The risk be"5$es insurab'e i4 the 45''59in re:uire$ents are "5$p'ie6

9ith8

The insured must suffer financial loss if the risk operates.

The loss must be measurable in money,

The object of the insurance contract must be legal.

The insurer should have sufficient knowledge about the risks he accepts.

,un6a$enta's 54 +nsuran"e

The fundamental >rinciples of the Insurance are as follows8

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C5ntributi5n8 'n insured may have several insurance on the same subject

matter. If he recovers his loss under all these insurance, he will obviously

make a profit out of loss. This will be an infringement of the principle of

indemnity. $ommon #aw has, therefore, evolved the doctrine of contribution

whereby the insured is prevented from recovering more than his loss, despite

his having several insurance on the subject matter.

Subr5ati5n7The principle of indemnity seeks to prevent the insured from

making profit out of loss. 0owever, it may so happen that that the insured may

recover his loss under his policy and he may also have rights against third

parties. If, after the insurance claim is settled, the insured is allowed to

enforce his rights against third parties and to retain whatever damages he

receives from them, he will certainly make a profit and the principle of

indemnity will be infringed.

$ommon #aw has therefore, evolved the doctrine of subrogation as corollary

to the principle of indemnity. :ubrogation may be defined as the transfer of

rights and remedies of the insured to the insurers who have indemnified the

insured in respect of the loss. The $ommon #aw right of subrogation is

implied an all contracts on indemnity, as it arises only after payment of loss.

Ut$5st G556 ,aith7 In all Beneral Insurance contracts we know that a

property or interest or liability or life is offered for insurance and the insured

has to take decisions on the acceptance of the proposal. If he decides to

accept the proposal a premium commensurate with the risk has to be

charged. To enable him to take necessary decision in this regard, the insurer

must have certain facts about the risk offered. These facts influence the

judgment of the insurer in deciding about the acceptance or otherwise of the

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risk and the rate of premium to be charged, if accepted. :uch facts are known

as material facts.

Nature 54 +nsuran"e C5ntra"ts

+hen the insured pays the premium and the insurers accept the risks, the

contract of insurance is concluded. The policy issued by the insurers is the

evidence of the contract. The contract of insurance, likeany other contract,for

example a contract for the sale of goods, is subject to the general law of contract

as embodied in the Indian $ontract 'ct,4DE2.

'ccording to this 'ct, a contract must have certain essential features in order to

make it legally valid and enforceable. The following are the essential elements8

a -ffer and acceptance8 6sually, the offer is made by the proposer, and

acceptance made by the insurer.

b $onsideration8 This means that the contract must involve some mutual benefit

to the parties. The premium is the consideration from the insured and the

promise to indemnity is the consideration from the insurers.

c 'greement between the parties8 1oth the parties should agree to the same

thing in the same sense.

d $apacity of the parties8 1oth the parties to the contract must legally competent

to enter into the contract. For example, minors cannot enter into insurance

contracts.

e #egality8 The object of the contract must be legal and the contract should not

violate any legal reAuirements. *.g. no insurance can be had for smuggled

goods.

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isk

easonable or not, risks are inescapable in business. *very business venture is

something of a gamble, because the possibility of loss is as real as the prospects

for profits. 'nd even though managers do everything possible to ensure that their

business succeeds, they cannot guard against every conceivable form of risk.

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>ure isk versus :peculative isk

>ure isk8 *vents representing the kind of risk that no business can predict or

escape, known as >ure isk, it is the threat of a loss without the possibility of

gain. In other words, a disaster such as avalanche or fire is costly for the

business it strikes, but the fact that no disaster occurs contributes nothing to a

firmGs profit.

:peculative isk8 It is the type of risk that offers the prospect of making profit

5 and prompts people to go into business in the first place. *very business

accepts the possibility of losing money in order to make money.

'pproaches to isk anagement

isk anagement is the process of reducing the threat of loss due to

uncontrollable events. :teps in selecting a risk management approach8

To identify all the things those can possibly go wrong. H

To consider the probability that an event will occur.

TechniAues of isk anagement are8

4. 'voiding the isk8 +hen a company avoids risk, it eliminates the possibility

that a particular event will occur. To avoid the possibility of a suit, for example,

not to produce any products 5which would, of course, eliminate both the threats

of a lawsuit and the opportunity to profit. +ith rare exceptions, avoiding risk

entirely is extremely difficult.

2. educing isk8 ' more practical approach is to reduce the risk by taking

precautions. isk reduction is an important element in most companiesG approach

to risk management. Typical precautions include putting safety locks on doors to

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prevent robberies, installing overhead sprinklers to minimi%e fire damage, and

periodic checking motor vehicles to prevent accidents.

?. 'ssuming risk8 any companies draw on current revenues or set aside a

7$ontingency Fund7 to cover unexpected losses. :etting aside money on regular

basis could be cheaper than purchasing insurance. oreover, the company can

earn interest on the reserved cash. :uch assumption of risk is also called self5

insurance or risk retention.

@. Transferring the risk8 ost companies still rely on outside insurance firms for

financial protection against catastrophic losses. In buying insurance, companies

transfer the risk of loss to an insurance firm, which agrees to pay for certain types

of losses. In exchange, the insurance firm collects a fee known as a premium.

Insurable and 6ninsurable isks8

Insurable risks8 'n insurable risk 5 one that an insurable company will cover 5

Benerally meets the following reAuirements. The peril insured against must not

be under the control of the Insured. This means, of course that insurer do not pay

for losses that are intentionally caused by an insured, caused at the InsuredGs

direction, or caused with the insuredGs collusion. For example, a fire insurance

policy excludes loss caused by the Insured=s own arson. It does, however,

include loss caused by an employeeGs arson. #osses must be calculable, and the

cost of insuring must be economically feasible. To operate profitably, insurance

companies must have data on the freAuency of losses caused by a given peril. If

this information covers a long period of time and is based on a large number of

cases, Insurance companies can usually predict Auite accurately how many

losses will occur in the future. For example, the insurance companies to fix up

the rate of premium of >ersonal 'ccident Insurance may use the information of

the number of people who will die each year in India in accidents. The peril must

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be unlikely to affect all insured simultaneously. 6nless an insurance company

spreads its coverage over large geographic areas or a broad population base or

different classes of Insurance, a single disaster might force it to pay out all its

policies at once. The possible loss must be financially serious to the Insured. 'n

Insurance company could not afford the paperwork involved in handling

numerous small claims of a few upees each. 's a result, many policies have a

clause specifying that the insurance company will pay only that part of a loss

greater than an amount 5 the deductible or excess 5 stated in the policy. The

excess represents small losses that the Insured has to absorb.

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$hapter ?

I)96:T >-FI#*

?.4 -rigin of #ife Insurance

#ife 'ssurance was born in *ngland when the first policy providing temporary

cover for a period of 42 months was issued as easy as 4D? '.9. The 'micable

:ociety started granting fluctuating sum on death since 4E3 and a fix sum since

4EE, +ith the development of mortality tables, the life 'ssurance acAuired ascientific character. The *Auitable :ociety founded in 4EJ2 was the first :ociety

established on scientific basis.

?.2 -IBI) -F #IF* '::6')$* I) I)9I'

In India, after failure of two 1ritish companies, the *uropean and the 'lbert in

4DE3, which attempted writing business on Indian lives, first Indian #ife

'ssurance :ociety was formed in the same year called 1ombay utual

'ssurance :ociety #td. It was followed by the -riental #ife 'ssurance $ompany

#imited in 4DE@, 1harat in 4D"J and *mpire of India in 4D"E. The Idea of

insurance was born out of a desire of the people to share loss of an individual by

many. -riginally it restricted to forms other than life assurance. It started with

arine Insurance, where the losses on account of perils of sea were shared by

all who were engaged in trade. eference to some forms of insurance, is found in

the codes of 0ammurabi, anu Kanav 9harma :hastra. The word

Logakshema= is used in the ig Meda suggesting that some form of communityinsurance was practiced by the 'ryans in India over ?333 years ago. In India

during 1uddhist period burial societies existed which were mutual in their

character and used to help a family by building a house, protecting the widow,

marrying the girls.

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The :wadeshi ovement of 4"3 provided impetus to the formation of several

companies such as the L0industan $ooperative=, the L6nited India=, the L1ombay

#ife=, the L)ational=. Further in the wake of freedom movement number of

companies such as the L)ew India=, the LNupiter= the L#akshmi= emerged.

The Bovernment began to exercise a certain measure of control on Insurance

business by passing the LInsurance 'ct= in 4"42. For controlling investment of

funds, expenditure and management, a comprehensive 'ct was passed known

as LThe Insurance 'ct 4"?D=. For controlling the affairs, the office of $ontroller of

Insurance was established. The act was extensively amended in 4"3.

In the year 4", approximately 4E3 Insurance -ffices and D3 >rovident Fund

:ocieties had been registered for transacting #ife 'ssurance business in India.

There were, however, no full guarantees to the policyholders. The concept of

trusteeship was lacking. any insurance companies went into liAuidation. There

were malpractices in insurance business. For achieving the following purposes it

was felt necessary to nationali%e the insurance business in India. To provide

security to the policyholders

Ki To utili%e the funds for nation5building activities.

KiiTo avoid cut throat competition

Kiii To abolish mal5practices

Kiv To spread the insurance message to the rural areas.

The first step in this direction was taken by the Bovernment of India by issuing

the #ife Insurance Kthe *mergency provisions -rdinance, 4"J on 4" thNanuary,

4"J. The then Finance inister, :hri $. 9. 9eshmukh mentioned the purpose of

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nationalisation as reaching the goal of socialistic pattern of society, rendering

genuine service to the people in the rural area. The #ife Insurance

$orporation 'ct K'ct (((I of 4"J was passed by the >arliament in Nune 4"J

which came in force on 4stNuly 4"J. The #ife Insurance $orporation of India

came into existence on 4st:eptember 4"J.

?.? I):6')$* :*$T- *F-:

0aving looked at the insurance sector, let us look at the efforts made by the

government to make the industry more dynamic and customer friendly. To begin

with, the alhotra committee was set up with the objective of suggesting

changes that would achieve the much reAuired dynamism.

The alhotra $ommittee eport

In 4""?, alhotra $ommittee, headed by former Finance :ecretary and 1I

Bovernor . ). alhotra, was formed to evaluate the Indian insurance industry

and recommend its future direction. In 4""@, the committee submitted the report

and gave the following recommendations8

:tructure

Bovernment stake in the insurance $ompanies to be brought down to 3!

Bovernment should take over the holdings of BI$ and its subsidiaries so that

these subsidiaries can act as independent5corporations

'll the insurance companies should be given greater freedom to operate

arket egulations8

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>rivate $ompanies with a minimum paid up capital of s.4bn should be

allowed to enter the industry

)o $ompany should deal in both #ife and Beneral Insurance through a single

entity

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

the domestic companies

>ostal #ife Insurance should be allowed to operate in the rural market

-nly one :tate #evel #ife Insurance $ompany should be allowed to operate

in each state

egulatory 1ody

The Insurance 'ct should be changed

'n Insurance egulatory body should be set up

$ontroller of Insurance K$urrently a part from the Finance inistry should be

made independent

Investments

andatory Investments of #I$ #ife Fund in government securities to be

reduced from E! to 3!

BI$ and its subsidiaries are not to hold more than ! in any company KThere

current holdings to be brought down to this level over a period of time

$ustomer :ervice

#I$ should pay interest on delays in payments beyond ?3 days

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Insurance companies must be encouraged to set up unit linked pension

plans

$omputeri%ation of operations and updating of technology to be carried out in

the insurance industry

-verall, the committee strongly felt that in order to improve the customer services

and increase the coverage of the insurance industry should be opened up tocompetition.

1ut at the same time, the committee felt the need to exercise caution as any

failure on the part of new players could ruin the public confidence in the industry.

0ence, it was decided to allow competition in a limited way by stipulating the

minimum capital reAuirement of s.4 bn. This amount is not very high for foreign

firms, as it translates to only about 6:O2 million. Further, to date it is unclear

whether eAuity should be payable in one go or should be brought in as

installments. 'lso, the foreign eAuity participation was to be restricted to only

@3!.

The committee felt the need to provide greater autonomy to insurance

companies in order to improve their performance and enable them to act as

independent companies with economic motives. For this purpose, it had

proposed setting up an independent regulatory body.

The industry and analysts find that there is lack of clarity in the following areas85

Though coverage of rural areas was to be made compulsory, it raises the

Auestion as to who would subsidies the rural policies as they would be difficult

to service and hence costs will go up.

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There is some confusion with respect to investments. +here should the funds

be investedP $urrently E3! of the funds with #I$ & BI$ are invested in

Bovernment securities. +ould new entrants be allowed to invest in B-I

securitiesP

The report also does not enumerate exit options available to the new

entrants. In the event of failure, there should be an arrangement made

whereby the other $ompanies pool in to bail the customers, who in all

probability would be middle class individuals.

?.@ >-T*)TI'#IT -F I):6')$* I) I)9I') '/*T

arketing inefficiency of general insurers has kept society in dark even when so

many personal as well as commercial lines of insurance covers are available for

them. Insurers have failed to identify the need of the individual risk factors and

thereafter selecting proper market segments and developing demand of these

needs by adopting proper marketing mix. There is great scope of commercial

line of insurance as we are developing at a very fast rate but the potentiality and

scope of personal lines of insurance is vast as this areas is still under5tapped.

>roduct designing and pricing is also simple and growth of this portfolio is

guaranteed in this country which has a base of over 433 crore population, where

there are about 2 crore dwellings, 23 crore schools, colleges and educational

institutions and about crore small and big shops. 1ut despite this the Indian

insurers share in personal line of business is very low or negligible.

There are enormous growth opportunities to Indian as well as foreign insurers

because of such a huge base of population there is ample scope to introduce the

new line of covers as per the changing needs and to increase the per capita

share of the insurance by encouraging risk transfer by investing small portion of

the savings of the individuals.

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1y opening up the sector far more opportunities has came up in insurance and

reinsurance market. 'fter privati%ation of this sector presence of the foreign

players has also increased. Therefore the insurers, in time to come, will have to

change their attitude from selling of the product to marketing of the protection

needs of the insured and for this what is reAuired is8

*ffective product planning

:uitable pricing

*fficient promotion and physical distribution.

>roper physical evidence.

Bood and well trained sales force.

our >lans, our 9reams & Their Future8

The *ssence of #ife Insurance

our family counts on you every day for financial support8 food, shelter,

transportation, education, and much more. ou and your spouse have plans for

your future and dreams for your family8 another child, a bigger home, a new

business, college education, travel, retirementQ #ife insurance is all about

making sure your family has adeAuate financial resources to make those plans

and dreams come true, if you were to die prematurely. 'nd just as your spouse

and children Kas beneficiaries count on you, you count on your spouse. ThatGs

why coverage for your spouse is also important. If he or she were to dieunexpectedly, you would feel similar financial strains. This is especially true

today, with so many 7double income7 families.

+hen :hould :omeone InvestP

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The answer, of course, is right nowR :ince no one can tell when the best time to

invest is, it is whenever you have the moneyR -ne should first invest in any plans

for which tax5deductible contributions can be made because these types of

savings reduce current taxes. Then, any more surplus funds should be invested

in a variable annuity, especially in eAuities so as to get the maximum growth of

the capital.

Insurance as a :afety )et

The function of insurance is to protect you against losses you canGt afford. This is

done by transferring the risks of a person, business, or organi%ation 55 the

7insured7 55 to an insurance company, or 7insurer.7 The insurer then reimburses

the insured for 7covered7 losses 55 i.e., those losses it pays for under the policyGs

terms.

's the insurance consumer, you pay an amount of money, called a premium, to

the insurer to transfer the risk. The insurer pools all its premiums into a large

fund, and when a policyholder has a loss, the insurer draws funds from the poolto pay for the loss. #ife is full of unexpected events that can create large financial

losses. For example, whenever you drive, it is possible that you may have a

costly accident. isks affect you by causing worry about potential loss and how

to deal with the conseAuences. Insurance reduces anxiety over a possible loss

and absorbs the financial brunt of its conseAuences. 0owever, while insurance

coverage is essential, how much and what type of insurance people need differ

with each individual. ou must decide how much risk youGre willing to tolerate

without insurance. For example, benefits for disability policies typically begin after

a waiting period of one to six months. Therefore, you should ensure that you

have some form of coverage or financial resources before the policy period

begin.

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+here $an I Bet InsuranceP

:ince insurance can be expensive, it makes sense to get more than one price

Auote for coverage. 't one time, we in India had no option but the nationali%ed

insurance companies like #I$, BI$, etc. )ow several private players, often with

foreign tie5ups, are entering the fray. There are now several companies selling

any one type of insurance, each with its own price structures, coverage, and

policy exclusions. To help consumers choose among the various types of

coverage=s, companies train sales representatives in the technical points of theirinsurance products. any representatives work for just one insurance company.

There are also brokers and independent agents 55 self5employed business

people who sell insurance on commission for several insurers 55 who claim they

can comparison shop to get the best coverage=s for consumers. $ertain banks

also sell insurance.

+hat Type of Insurance 'gent :hould I TrustP

+ith multiple players in the life insurance field now, a choice should be first made

regarding the insurance company before choosing an agent. To determine a

companyGs willingness to pay claims, ask a policyholder who has filed several

claims. -bviously, the more claims an insurer has handled with no complaints,

the more likely that the company will provide you with good service. 1arring #I$,

the remaining players in life insurance are still new in the field, so this kind of

information will not be available for another few years at the least. It remains to

be seen how the newer players will perform on the claims front, but given theregulatory framework and their strong parentage, their performance should be

comparable, if not better than #I$.

It is Auite imperative that your insurance agent be competent and professional

enough to clearly understand your insurance reAuirements and suggest a

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suitable scheme. 'lso, with insurance companies offering varying rate of

commissions on different schemes, there is a likelihood that a Gnot5so5

professionalG agent may be tempted to recommend a scheme which pays him a

higher commission, though it may not be very suitable for your needs. This is

especially so in the case of #I$, sole provider of life insurance in our country till

recently, where the eligibility criteria are not very rigorous and very often the level

of knowledge and competence of the agents leaves a lot to be desired. The new

players seem to be much more stringent in appointing agents and more

committed in providing training to them. In todayGs context, especially in case of

#I$, it may be advisable to go in for an agent who comes recommended from

one of your friends, relatives or associates. Further, the agent should be able to

provide you with a comparison of multiple schemes and also explain them in

simple terms, so that you are are able to make an informed decision. In case an

agent is not inclined to spend the time and resources to provide you with relevant

information and solve your Aueries, it may be better to give a go5by to such a

person and start looking for a new agent. The market is becoming increasingly

competitive and it should not be a difficult task to find a good agent.

#ife Insurance >layers8

1ajaj 'llian% Beneral Insurance8 1ajaj 'llian% Beneral Insurance $ompany

#imited is a joint venture between 1ajaj 'uto #imited and 'llian% 'B of

Bermany. 1oth enjoy a reputation of expertise, stability and strength.

1irla :un #ife Insurance8 The 'ditya 1irla Broup contributes its knowledge ofthe Indian market while :un #ife Financial contributes global expertise in the

areas of protection and wealth management.

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09F$ :tandard #ife Insurance8 09F$ and :tandard #ife have a long and

close relationship built upon shared values and trust. >roviding long term

financial security to policy holders will be the constant endeavor.

I$I$I >rudential #ife Insurance8 The $ompany was granted $ertificate of

egistration for carrying out #ife Insurance business, by the Insurance

egulatory and 9evelopment 'uthority.

I)B Mysya #ife Insurance8 I)B, the world=s second largest life insurance

company together with Mysya 1ank, one of India=s leading private sector

banks, forms I)B Mysya #ife Insurance.

#ife Insurance $orporation K#I$8 #ife Insurance $orporation K#I$ has been

one of the pioneering organi%ations in India who introduced use of Information

Technology in their business.

et#ife India8 The etropolitan #ife Insurance $ompany is the number one

insurer in the 6.:. It is helping build financial independence for its customers.

-riental Insurance8 The -riental Insurance $ompany #td. K-I$# is one of the

leading Beneral Insurance companies in India and is a subsidiary of the

Beneral Insurance $orporation KBI$ of India.

oyal :undaram 'lliance Insurance8 oyal :undaram marks the coming

together of :undaram Finance, one of India=s most respected and trusted

finance companies, and oyal and :un 'lliance, one of the largest insurance

groups in the world.

Tata 'IB Insurance8 #ife insurance & general insurance for individuals &

corporates by Tata 'IB. This site will guide you on how to capitali%e on

opportunities and protect against uncertainties.

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$hapter @

#IF* I):6')$* >-96$T:

@.4 +0-#* #IF* >-#I$

These are low5cost insurance plans where the sum assured is payable on the

death of the insured

' typical whole life policy runs as long as the policyholder is alive. In other words,

the risk is covered for the entire life of the policyholder, which is why it is known

as whole life policies.

The policy money and the bonus are payable only to the nominee of the

beneficiary upon the death of the policyholder. The policyholder is not entitled to

any money during his or her own lifetime, i.e. there is no survival benefit.

+hole life policies are fairly rigid and inflexible and are suitable only in a few,

very specific cases.

+hole #ife >olicy can be a good initial policy to buy since its cost is very low.

That is an important consideration when one is just starting a career.

@.2 *)9-+*)T >-#I$

6nder these plans, the sum assured is pay5able on the maturity of the policy or in

case of death of the insured individual before maturity of the policy. *ndowment

policies cover the risk for a specified period at the end of which the sum assured

is paid back to the policyholder along with the entire bonus accumulated duringthe term of the policy. It is this feature 5 the payment of the endowment to the

policyholder upon the completion of the policy=s term 5, which rightly accounts for

the popularity of endowment policies. The original sum assured and the

accumulated bonus 5 received back comes handy from the endowment can

either be used for buying an annuity policy to generate a

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monthly pension for the whole life, or put it in any other suitable investment of his

choice. 's compared to whole life policies, the premium rates for endowment

policies are higher and the bonus rates are lower. -n the plus side, these polices

offer an endowment 5 representing a return on his premium payments payable to

him in his own lifetime when the policy comes to an end.

@.? -)* 1'$/ >-#I$

6nlike ordinary endowment insurance plans where the survival benefits are

payable only at the end of the endowment period, money back policies provide

for periodic payments of partial survival benefits during the term of the policy, of

course so long as the policy holder is alive.

'n important feature of this type of policies is that in the event of death at any

time within the policy term, the death claim comprises full sum assured without

deducting any of the survival benefit amounts, which may have already been

paid as money5back components. :imilarly, the bonus is also calculated on the

full sum assured

6nder money back policies premiums can be paid as per the insurance

company=s policy. These could be Auarterly, half yearly or annually. The

premiums for these policies are payable for the selected term of years, or till

death if it occurs earlier.

1y buying such policies one can receive income at regular intervals other than

the risk cover it provides. 'lso a good amount of bonus on the full sum assured is

Auite a good bargain Individual before expiry of the policy

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@.@ T* >-#I$8

Term policiesC cover only the risk during the selected term period. If the

policyholder survives the term, the risk cover comes to an end.

' Term plan is designed to meet the needs of people who are initially unable to

pay the larger premium reAuired for a whole life or an endowment assurance

policy, but they hope to be able to pay for such a policy in the near future.

)o surrender, loan or paid5up values are granted under these policies because

reserves are not accumulated. If the premium is not paid with the days of grace,

the policy will lapse without acAuiring a paid5up value.

0owever, a lapsed policy may be revived during the lifetime of the life assured

but before the expiry of the period of two years from the due date of the first

unpaid premium on the usual terms. 'ccident and S or 9isability benefits are not

granted on policies under the Term plan.

@. '))6IT K>*):I-) >#')

These plans provide for either immediate or deferred pension for life. The

pension payments are made till the death of the annuitant Kper5son who has a

pension plan unless the policy has provision of guaranteed period.

'n annuity is an investment that one make, either in a single lump sum or

through installments paid over a certain number of years, in return for which one

receive back a specific sum every year, every half5year or every month, either for

life or for a fixed number of years.

'fter the death of the annuitant or after the fixed annuity period expires for

annuity payments, the invested annuity fund is refunded, perhaps along with a

small addition, calculated at that time.

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'nnuities differ from all the other forms of life insurance discussed so far in one

fundamental way 5 an annuity does not provide any life insurance cover but,

instead, offers a guaranteed income either for life or a certain period.

Typically annuities are bought to generate income during one=s retired life, which

is why they are also called pension plans. 'nnuity premiums and payments are

fixed with reference to the duration of human life.

@.J N-I)T #IF* >-#I$

Noint life policies are similar to endowment policies in as much as these policies

also offer maturity benefits to the policyholders, apart form covering the risks as

all life insurance policies.

1ut these are categori%ed separately as these cover two lives together thus

offering a uniAue advantage in some casesC notable, for a married couple or for

partners in a business firm.

6nder a joint life policy the sum assured is payable on the first death and again

on the death of the survivor during the term of the policy. Mested bonuses would

also be paid besides the sum assured after the death of the survivor. If one or

both the lives survive to the maturity date, the sum assured as well as the vested

bonuses are payable on the maturity date.

The premiums payable cease on the first death or on the expiry of the selected

term, whichever is earlier.

'ccident benefits eAuivalent to the sum assured are available under this plan on

the first death. 0owever, if both lives are covered under 9ouble 'ccident 1enefit

K9'1, the surviving life is covered under 9'1 until the end of the policy year, in

which the first life dies under the cover of the policy.

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These benefits are available with respect to both lives if

1oth lives perish simultaneously owing to an accident. To avoid such an

eventuality, nomination is allowed under the policy -

1oth die within the specified period as a result of the same accident -

The second life also dies in the same policy year as result of another accident. To

avoid such an eventuality, nomination is allowed under the policy.

>articularly for couples 5 Noint life policies provide dual5purpose income and risk

protection for both belonging to every income group and class of society.

6nder a joint life plan though the premium payment stops after the first lifeGs

death, bonuses continue to accrue on the basic :um 'ssured till aturity 9ate or

till the death of the second life, if earlier.

@.E B-6> I):6')$*

Broup Insurance offers life insurance protection under group policies to various

groups such as employer5employee, professionals, co5operatives, weaker

sections of society etc. It also provides insurance coverage to people under

certain approved occupations at the lowest possible premium cost. 1esides

providing insurance coverage, it also offers group schemes to employers, which

provide funding of gratuity and pension liabilities of the employer=s Broup

insurance plans have low premiums. :uch plans are particularly beneficial to

those for whom other regular policies are a costlier proposition. Broup insurance

plans extend cover to large segments of the population including those who

cannot afford individual insurance. 's such the premia one need to pay is

comparatively lower and at the same time one can avail of insurance benefits.

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The main features of the schemes are low premium and simple insurability

conditions. >remiums are based upon age combination of members, occupation

and working conditions of the group.

' number of group insurance schemes have been designed for various groups.

These include employer5employee groups, associations of professionals Ksuch

as doctors, lawyers, chartered accountants etc., and members of cooperative

banks, welfare funds, credit societies and weaker sections of society. $reditor5

9ebtor groups are also offered group insurance schemes. Broup insuranceschemes providing uniform cover can be granted to outstanding loans. These

groups are embers of primary housing societies where housing loans are

granted by :tate 'pex housing societies, borrowers granted loans by Institutional

agencies in >ublicSNoint :ectors for housing purposes and borrower members of

cooperative societiesSbanks formed by employees of the same employers

@.D :>*$I'# >#')

:pecial plans are insurance policy plans available from the national insurance

providers to serve the needs of citi%ens that cannot be commonly classified or

segregated. These special plans are designed to satisfy needs ranging from

debt5clearance in event of the death of the insured to financial aid in the event of

a medical mishap.

:pecial plans also provide financial assistance for handicapped dependants as

well as emergency surgery reAuired if and when a medical condition arises.

:ince special plans are designed for people with diverse and specific needs, the

average citi%en may not necessarily need or use them. et, in the normal course

of life, situations may arise when one may need to provide for unplanned or

unexpected contingencies and mishaps.

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$hapter

I9' '$T 4"""

's per the section @ of I9' 'ctG 4""", Insurance egulatory and 9evelopment

'uthority KI9', which was constituted by an act of parliament specify the

composition of 'uthority.

The 'uthority is a ten member team consisting of 8

Ka a $hairmanC

Kb five whole5time membersC

Kcfour part5time members,

Kall appointed by the Bovernment of India

.4 96TI*:, >-+*: ')9 F6)$TI-): -F I9'

:ection 4@ of I9' 'ct, 4""" lays down the duties, powers and functions of

I9'..

K4 :ubject to the provisions of this 'ct and any other law for the time being in

force, the 'uthority shall have the duty to regulate, promote and ensure

orderly growth of the insurance business and re5insurance business.

K2 +ithout prejudice to the generality of the provisions contained in sub5section

K4, the powers and functions of the 'uthority shall include

Ka issue to the applicant a certificate of registration, renew, modify,withdraw, suspend or cancel such registrationC

Kb protection of the interests of the policy holders in matters

concerning assigning of policy, nomination by policy holders,

insurable interest, settlement of insurance claim, surrender

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value of policy and other terms and conditions of contracts of

insuranceC

Kc :pecifying reAuisite Aualifications, code of conduct and practical

training for intermediary or insurance intermediaries and

agentsC

Kd :pecifying the code of conduct for surveyors and loss

assessorsC

Ke >romoting efficiency in the conduct of insurance businessC

Kf >romoting and regulating professional organi%ations connected

with the insurance and re5insurance businessC

Kg #evying fees and other charges for carrying out the purposes of

this 'ctC

Kh calling for information from, undertaking inspection of,

conducting enAuiries and investigations including audit of the

insurers, intermediaries, insurance intermediaries and other

organi%ations connected with the insurance businessC

Ki control and regulation of the rates, advantages, terms and

conditions that may be offered by insurers in respect of general

insurance business not so controlled and regulated by the Tariff

'dvisory $ommittee under section J@6 of the Insurance 'ct,

4"?D K@ of 4"?DC

Kj :pecifying the form and manner in which books of account shall

be maintained and statement of accounts shall be rendered by

insurers and other insurance intermediariesC

Kk egulating investment of funds by insurance companiesC

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Kl egulating maintenance of margin of solvencyC

Km 'djudication of disputes between insurers and intermediaries or

insurance intermediariesC

Kn :upervising the functioning of the Tariff 'dvisory $ommitteeC

Ko specifying the percentage of premium income of the insurer to

finance schemes for promoting and regulating professional

organi%ations referred to in clause KfC

Kp :pecifying the percentage of life insurance business and

general insurance business to be undertaken by the insurer in

the rural or social sectorC and

KA *xercising such other powers as may be prescribed.

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Chapter 3 8 Insurance Industry in the year 233352334 had 4 new entrants,

namely8

Li4e +nsurers7

S.N5. Na$e 54 the C5$pan#

4 ax )ew ork #ife Insurance $o. #td.

2 09F$ :tandard #ife Insurance $ompany #td.

? I$I$I >rudential #ife Insurance $ompany #td.

@ -m /otak ahindra #ife Insurance $o. #td.

1irla :un #ife Insurance $ompany #td.

J Tata 'IB #ife Insurance $ompany #td.

E :1I #ife Insurance $ompany #imited

D I)B Mysya #ife Insurance $ompany >rivate #imited

" 'llian% 1ajaj #ife Insurance $ompany #td.

43 etlife India Insurance $ompany >vt. #td.

44 eliance #ife Insurance $ompany #td.

42 :hriram #ife Insurance $ompany #td.

4? :ahara India #ife Insurance $ompany #td.

4@ 1harti '(' #ife Insurance $ompany #td.

4 'viva #ife Insurance $ompany #td.

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Genera' +nsurers8

S.N5. Na$e 54 the C5$pan#

4 oyal :undaram 'lliance Insurance $ompany #imited

2 eliance Beneral Insurance $ompany #imited.

? IFF$- Tokio Beneral Insurance $o. #td

@ T'T' 'IB Beneral Insurance $ompany #td.

1ajaj 'llian% Beneral Insurance $ompany #imited

J I$I$I #ombard Beneral Insurance $ompany #imited.


42/90

Insurance 'ct, 4"?D, and Insurance egulatory & 9evelopment 'uthority 'ct,

4""".

+nsuran"e /r56u"ts Kas on [email protected] Kfor latest information get in touch with

the current insurers website information of insurers is provided at the web page

for insurers8

Li4e +nsuran"e7

>opular >roducts8 *ndowment 'ssurance K>articipating and oney 1ack

K>articipating. ore than D3! of the life insurance business is from these

products.

Genera' +nsuran"e7

Fire and iscellaneous insurance businesses are predominant. otor Mehicle

insurance is compulsory.

Tariff 'dvisory $ommittee KT'$ lays down tariff rates for some of the general

insurance products.

)ew products have been launched by life insurers. These include linked5

products. For details, please visit the websites of life insurers.

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Chapter 7

COMPANY PROFILE

7.1 ABOUT MAX NEW YORK

Ma; Ne9 Y5rk Li4e +nsuran"e C5$pan# Lt6 .is a joint venture between )ew ork

#ifeC a Fortune 433 company and ax India #imitedC one of IndiaGs leading multi5

business corporations. The company has positioned Itself on the Auality platform. In line

with its 8isi5n t5 be the M5st A6$ire6 Li4e +nsuran"e C5$pan# in +n6ia , it has

developed a strong corporate governance model based on the core values of excellence,

honesty, knowledge, caring, integrity and teamwork. Thestrate# is t5 estab'ish itse'4

as a Truste6 Li4e +nsuran"e Spe"ia'istthrough a Auality approach to business.

Incorporated in 2333, ax )ew ork #ife started commercial operation in 2334. In line

with its values of financial responsibility, ax )ew ork #ife has adopted prudent

financial practices to ensure safety of policyholderGs funds. The $ompanyGs paid up is

s. 4,2?2 crore.

0aving set a est in C'ass Aen"# Distributi5n M56e'in place, the company is spearheading

a major thrust into additional distribution channels to further grow its business. The company

has multi5channel distribution that includes the agency distribution, partnership distribution,

bancassurance, distribution focused on emerging markets and alliance marketing through

employed sales force. The company currently has?? ban"assuran"e re'ati5nships) 0@

"5rp5rate aen"# tie!ups an6 6ire"t sa'es 45r"e at 0@ '5"ati5ns. ax )ew ork #ife has put

in place a uniAue hub and spoke model of distribution to deepen rural penetration. The company

has ?" K" hub office ?3 spoke offices offices dedicated to emerging markets in >unjab and

0aryana. ax )ew ork #ife offers a suite of flexible products. It now has? pr56u"tscovering

both life and health insurance and D riders that can be customi%ed to over D33 combinationsenabling customers to choose the policy that best fits their need. 1esides this, the company

offers J products and @ riders in group insurance business.

The company currently has more than 43,@2@ employees.

/r5$5ters7

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ax )ew ork #ife is a joint venture between ax India #td., one of India=sleading multi5business corporate and )ew ork life, a Fortune 433 company. ax

)ew ork #ife Insurance, incorporated in 2333, is one of India=s leading private

life insurance companies. The company offers both individual and group life

insurance solutions. It has established a wide distribution network across India.

Through its wide network of highly competent life insurance agent advisors and

flexible product solutions, ax )ew ork life Insurance is creating a partnership

for life with its customers in India.

Ma; +n6ia Lt6.

Founded in 4"D, ax India #imited is a >ublic #imited company listed on the):* and 1:* of India with over 2J,333 shareholders. Today, ax India #imitedis a multi5business corporate, driven by the spirit of *nterprise, focused on/nowledge, >eople and :ervice oriented businesses of8

0ealthcare Kax 0ealthcare

#ife Insurance Kax )ew ork #ife Insurance

$linical esearch K)eeman edical International

Ma; a's5 Maintains +nterests in7

:pecialty >lastic >roducts for the packaging industry Kax :peciality

>roducts

0ealthcare :taffing Kax 0ealth :taff

>rominent shareholders are r 'naljit :ingh and a leading private eAuity firm,+arburg >incus which accounts for 2D.E! of the total shareholding. Thebalance shareholding is held by the public and Institutional Investors.

Ti'' 0BBB) The C5$pan#s Main +nterests an6 /artnerships 9ere the45''59in7

usiness

1ulk 'ctive >harmaceuticals

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*lectronic $omponent 9istribution

obile Telephony

M5:'T $ommunications

>lating $hemicals

Information Technology

/artners

9: Bist 1rocades

otorola, 6:'

'vnet Inc., 6:'

0utchison Telecom #td. 0ong /ong

$omsat Investment Inc., 6:' & #ockheed artin, 6:'

'totech, Bermany

ind $rossing, 6:'In 2333, the $ompany reinvented and restructured itself to focus on thebusinesses of #ife= under the them, #ifeQ-ur Focus.

ax )ew ork #ife Insurance, founded as a Noint Menture between ax India#imited and )ew ork #ife, a Fortune 433 company, is one of the leadingprivate life insurers in India.

ax 0ealthcare, a subsidiary of ax India #imited is India=s first provider ofcomprehensive, standardi%ed, seamless, and integrated world5class healthcareservices.

)eeman edical International K)I is an International $linical esearch

provider operating across three locations spanning )orth 'merica, 'sia and#atin 'merica. *ach location is backed by comprehensive infrastructure andhighly skilled and experienced personnel.

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Ne9 Y5rk Li4e LLC

)ew ork #ife Insurance $ompany,Kwww.newyorklife.com a Fortune 433

company founded in 4D@, is the largest mutual life insurance company in the

6nited :tates and one of the largest life insurers in the world. 0eadAuartered in

)ew ork $ity, )ew ork #ife=s family of companies offer life insurance,annuities and long5term care insurance. )ew ork #ife Investment anagement

##$ provides institutional asset management and retirement plan services.

-ther )ew ork #ife affiliates provide an array of securities products and

services, as well as institutional and retail mutual funds.

The mission of )ew ork #ife is to maintain its superior Gfinancial strengthG,

adhere to the highest standards of GintegrityG and demonstrate GhumanityG by

treating its customers, agents and employees with compassion, consideration

and respect.

)ew ork #ife is one of the largest and strongest life insurance companies in

the world with more than 6:9O24 billion assets under management and hasreceived among the highest ratings for financial strength from the life insurance

industryGs principal rating agencies8 '.. 1est K''U, :tandard & >oorGs K''U,

oodyGs K'a4, Fitch K'''. 'ccording to oodyGs, 7)ew ork #ifeGs rating

reflects the companyGs good Auality investment portfolio, ample liAuidity, and

sound capitali%ation, as well as the good growth potential of its international

business.eople retire but needs donGt. ax )ew ork #ife with their retirement planscomes forward to support you in your old age and makes the unfulfilled dreams ofyour life come true. etirement is like a second life, where you can fulfill all yourdreams, which you have been pushing aside in your past because of lack of time.-ur retirement plans make sure that you maintain your comfortable lifestyle anddonGt compromise with your wishes because of lack of financial resources in yourold age.

Eas# Li4e Retire$ent (/ar%

SMART +n8est /ensi5n

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-ea'th /'ans

' very common saying 5 70eath is +ealth7, may have become old but itGs true.9iseases can grab anyone at anytime. :o, you have to pre5plan in such a waythat you donGt have any financial constraint at the time, when your loved ones arein severe pain. *verybody believes that 7prevention is better than cure7 and adaptstrict diet plans, exercise daily for it as well but no matter how well you take careof your self, diseases can grab you anytime. :o, ax )ew ork #ifeGs 0ealth>lans have been designed to take into account the diverse set of needs at timesof an individualGs ill health. These health plans provide you financial security at thetime of health treatments reAuired.

Li4eLine Me6iCash

Li4eLine We''ness /'us

Li4eLine Me6iCash /'us

Li4eLine Sa4et# Net

Li4eLine We''ness

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Sa8ins /'ans

It must be admitted that a certain degree of instability lies in every individualGs life.Foreseen and unforeseen needs can arrive at any point of time. ax )ew ork

#ifeGs savings plans will help you. -ur dual benefits saving plans recogni%es yourneed for a complete all round financial protection and therefore provides you lifecover and helps in the growth of your money.

oney will fly soon, if not taken care of. Therefore, we offer you diverse savingsplans, which would undoubtedly suit your needs and your budget.

Wh5'e Li4e /arti"ipatin

Li4e Gain /'us 2F (/ar%

2= #ear En659$ent (/ar%

Li4e /a# M5ne# a"k

En659$ent t5 Ae


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Rura' /'ans

Can an#b56# re$e$ber 9hen the ti$es 9ere n5t har6 an6 $5ne# n5ts"ar"e

ax )ew ork #ifeGs ural >lans have been tailored especially to meet all kindsof reAuirements of rural customers or investors. The 0assle free procedures and#ow & affordable premiums, being the key features of rural plans, proves ax)ew ork #ife exceptional in offering their incredible services to all the classes ofour society. The following ural plans have been designed keeping in mind therural investors. :o that they donGt have to worry about the high premium rates andcomplex application forms.

Eas# Ter$ /5'i"#

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What is Ma; 1iHa#The a"kr5un6

's human beings we all have dreams and aspirations, a desire to achieve and

go beyond. Bo beyond the present, changing our lives and for some, changingthe lives of others too for the better. +e are all firm believers in the hand ofdestiny=, however that doesn=t deter us from trying, thankfully. et there arethose, who through the drudgeries and miseries of their everyday life,sometimes feel trapped refusing to seek and explore an otherwise unexploredpath.The 1isi5n $reated with the vision to empower every Indian to secure his dreams, ax

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Mijay is an honest endeavor to provide financial security to the under5servedmasses by creating a life insurance product rooted in a deep understanding oftheir financial needs.S5 9hat is Ma; 1iHa#) a sa'utati5n) a 8i"t5r# path 5r an insuran"e p5'i"#ax Mijay is not just another life insurance policy of )#C ax Mijay is thesymbol of victory of the common man, a beacon for a better tomorrow. +ebelieve that true win for India lies in encouraging people to save their hardearned money, a small contribution that would go on to change their future.+hile the underlying reality remains that ;oneyQIt just slips through< axMijay initiative will empower people, provide hope and will offer insurance cumsaving solutions to the under5served packed in the form of an Insurance

:avings 1ox K1eema BullakMa; Ne9 Y5rk Li4e +nsuran"e C5$pan# Li$ite6 pr5u6'# presents a uni:ueLi4e +nsuran"e p5'i"# IMa; 1iHa#Jwhich is

'bout making better tomorrow possible

' $lear sight of goal 5 Fulfillment of dream

' belief in the path to achieve the goal, and

;Mijay< is the Triumph of human life

Chapter!

MARKET RESEARC-

What is Market Resear"h

arket research is the systematic design, collection, analysis, and reporting of

data and findings relevant to a specific marketing situation facing the company.

arket research firms fall in to the three categories8

4 :yndicated5service research firms5These firms gather consumer and trade

information, which they sell for a fee.

2 $ustoms market research firms5These firms are hired to carry out specific

projects. They design the study and report the findings.

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? :pecialty5line market research firms5These firms provide speciali%ed

research services to other firms.

ene4its 54 Market Resear"h

Information gained through marketing research isnGt just 7nice to know.7 ItGs solid

information that can guide your most important strategic business decision.

arket research is effective when the findings or conclusions you reach have a

value that exceeds the cost of the research itself.

Market resear"h ui6es #5ur "5$$uni"ati5n 9ith "urrent an6 p5tentia'

Cust5$ers

-nce you have good research, you should be able to formulate more effective

and targeted marketing campaigns that speak directly to the people youGre trying

to reach in a way that interests them. For example, some retail stores ask

customers for their %ip codes at the point of purchase. This information, which

pinpoints where their customers live, will help the storeGs managers plan suitable

direct mail campaigns.

Market resear"h he'ps #5u i6enti4# 5pp5rtunities in the $arketp'a"e.

For example, if you are planning to open a retail outlet in a particular geographic

location and have discovered that no such retail outlet currently exists, you have

identified an opportunity. The opportunity for success increases if the location is

in a highly populated area with residents who match your target market

characteristics. The same might be true of a service you plan to offer in a specific

geographic area or even globally, via the Internet.

Market resear"h $ini$ies the risk 54 65in business.

Instead of identifying opportunities, the results of some market research may

indicate that you should not pursue a planned course of action. For example,

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marketing information may indicate that a marketplace is saturated with the type

of service you plan to offer. This may cause you to alter your product offering or

choose another location.

Market research helps you evaluate your success.

Information gathered through market research helps you to determine if youGre

reaching your goals. In the above example, if your productGs target market is

women between the ages of ? and 3, then youGre making progress toward your

goal. KIf not, this information can indicate a needed change in marketing

strategyR

Marketplace competition is in45r$ati5n ab5ut the 5ther "5$panies

+ithin your area of business. esearch answers these Auestions8 +ho are my

primary competitors in the marketP 0ow do they compete with meP In what

ways do they not compete with meP +hat are their strengths and weaknessesP

're there profitable opportunities based upon their weaknessesP +hat is their

market nicheP +hat makes my business uniAue from the othersP 0ow do my

competitors position themselvesP 0ow do they communicate their services to

the marketP +ho are their customersP 0ow are they perceived by the marketP

+ho are the industry leadersP +hat is their sales volumeP

Environmental factors in45r$ati5n un"58ers e"5n5$i"a' an6 p5'iti"a'

$ircumstances that can influence your productivity and operations. Vuestions

to be answered include8 +hat are the current and future population trendsP

+hat are the current and future socio5economic trendsP +hat effects do

economic and political policies have on the your target market or my industryP

+hat are the growth expectations for my marketP +hat outside factors

influence the industryGs performanceP +hat are the trends for this market and for

the economyP Is the industry growing, at a plateau, or decliningP

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Target market. +hat is the best target market for the products or services being

offered by the organi%ationP 0ow large is the target market and how can it be

describedP +hat are the attitudes, opinions, preferences, lifestyles ) and so on of

its members

/r56u"tsser8i"es. egarding particular, products and services, how satisfied or

dissatisfied is the target. market with what is currently availableP

+hat product features and benefits do those consumers desireP 0ow do they

compare the organi%ation=s product with those offered by competitorsP

Price.0ow much value does the target market place on the product in AuestionP

+hat products are they willing to substitute for the product in AuestionP +hat

prices are charged for those substitutesP +hat advantagesW in features or

benefits or appealsWdoes the organi%ation=s product have that might allow it to

charge a higher priceP

Distribution.+hat distribution channel is the target market most likely to use

when purchasing the product in AuestionP Is the organi%ation=s pricing in line with

what the target market expects to pay for the product when purchased through

that channelP 9oes the pricing include the si%e of margin the channel traditionally

expects to receiveP +ill the channel be able to provide the service or support

needed for the productP

/r5$5ti5n. +hat can the organi%ation say in its advertisements about its

product that will appeal to the target market and lead them to consider the

organi%ation=s product more attractive, than those offered by competitorsP

Through what mediumKs Ktelevision, newspaper, billboards, etc. should the

organi%ation advertiseP +hat specific vehicles Ki.e., what specific television

programs or newspapers should the organi%ation use to carry the

advertisementsP 0ow often should the advertisements appear, and how much

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money should the organi%ation spend on advertisingP :hould personal selling be

used and, if so, howP +hat kinds of promotions would have a favorable effect on

the target marketP

Market Resear"h

The /r5"ess

arket research, like other components of marketing such as advertising, can beAuite simple or very complex. ou might conduct simple market research such as

including a Auestionnaire in your customer bills to gather demographic

information about your customers. -n the more complex side, you might engage

a professional market research firm to conduct primary research to aid you in

developing a marketing strategy to launch a new product.

egardless of the simplicity or complexity of your marketing research project,

youGll benefit by reviewing the following seven steps in the market researchprocess.

Step One7 De4ine the /r5b'e$s) the 6e"isi5n a'ternati8es) an6 the resear"h

5bHe"ti8es7

The market research process begins with identifying and defining the problems

and opportunities that exist for your business, such as8

4 #aunching a new product or service.

2 #ow awareness of your company and its products or services.

? #ow utili%ation of your companyGs products or services. KThe market is familiar

with your company, but still is not doing business with you.

@ ' poor company image and reputation.

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>roblems with distribution, your goods and services are not reaching the

buying public in a timely manner.

Step T957 Set ObHe"ti8es) u6et an6 Ti$etab'es

Objective:+ith a marketing problem or opportunity defined, the next step is to

set objectives for your market research operations. our objective might be toexplore the nature of a problem so you may further define it. -r perhaps it is to

determine how many people will buy your product packaged in a certain way and

offered at a certain price. our objective might even be to test possible cause and

effect relationships. For example, if you lower your price by 43 percent, what

increased sales volume should you expectP +hat impact will this strategy have

on your profitP

Buget:

0ow much money are you willing to invest in your market researchP

0ow much can you affordP our market research budget is a portion of your

overall marketing budget. ' method popular with small business owners to

establish a marketing budget is to allocate a small percentage of gross sales for

the most recent year. This usually amounts to about two percent for an existing

business. 0owever, if you are planning on launching a new product or business,

you may want to increase your budget figure, to as much as 43 percent of your

expected gross sales. -ther methods used by small businesses include

analy%ing and estimating the competitionGs budget, and calculating your cost of

marketing per sale.

Timetables:>repare a detailed, realistic time frame to complete all steps of the

market research process. If your business operates in cycles, establish target

dates that will allow the best accessibility to your market. For example, a holiday

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greeting card business may want to conduct research before or around the

holiday season buying period, when their customers are most likely to be thinking

about their purchases.

Step Three7 Se'e"t Resear"h T#pes) Meth56s an6 Te"hni:ues

There are two types of research7 primary research or original information

gathered for a specific purpose and seconary research or information that

already exists somewhere. 1oth types of research have a number of activities

and methods of conducting associated with them.

:econdary research is usually faster and less expensive to obtain that primary

research. Bathering secondary research may be as simple as making a trip to

your local library or business information center or browsing the Internet.

:ee arket esearch Types, ethods and TechniAues for more details about the

activities and methods for primary and secondary research.

Step ,5ur7 Desin Resear"h +nstru$ents

The most common research instrument is the Auestionnaire. /eep these tips in

mind when designing your market research Auestionnaire.

0 /eep it simple.

2 Include instructions for answering all Auestions included on the survey.

? 1egin the survey with general Auestions and move towards more specific

Auestions.

@ /eep each Auestion brief.

F If the Auestionnaire is completed by the respondent and not by an interviewer

or survey staff member, remember to design a Auestionnaire that is

graphically pleasing and easy to read.

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< emember to pre5test the Auestionnaire. 1efore taking the survey to the

printer, ask a few people5such as regular customers, colleagues, friends or

employees5to complete the survey. 'sk them for feedback on the surveyGs

style, simplicity and their perception of its purpose.

> ix the form of the Auestions. 6se scales, rankings, open5ended Auestions

and closed5ended Auestions for different sections of the Auestionnaire. The

7form7 or way a Auestion is asked may influence the answer given.

1asically, there are two Auestion forms7 close!en "uestionsand open!en "uestions.

Step ,i8e7 C5''e"t Data

To help you obtain clear, unbiased and reliable results, collect the data under the

direction of experienced researchers. 1efore beginning the collection of data, it is

important to train, educate and supervise your research staff. 'n untrained staff

person conducting primary research will lead to interviewer bias.

:tick to the objectives and rules associated with the methods and techniAues you

have set in :tep Two and :tep Three. Try to be as scientific as possible in

gathering your information.

Step Si;7 Oranie an6 Ana'#e Data

-nce your data has been collected, it needs to be 7cleaned.7 $leaning research

data involves editing, coding and the tabulating results. To make this step easier,

start with a simply designed research instrument or Auestionnaire.

:ome helpful tips for organi%ing and analy%ing your data are listed below.

0 #ook for relevant data that focuses on your immediate market needs.

2 ely on subjective information only as support for more general findings of

objective research.

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? 'naly%e for consistencyC compare the results of different methods of your

data collection. For example, are the market demographics provided to you

from the local media outlet consistent with your survey results

@ Vuantify your resultsC look for common opinions that may be counted

together.

Step Se8en7 /resent an6 Use Marketin Resear"h ,in6ins

-nce marketing information about your target market, competition and

environment is collected and analy%ed, present it in an organi%ed manner to the

decision makers of the business. For example, you may want to report your

findings in the market analysis section of your business plan. 'lso, you may want

to familiari%e your sales and marketing departments with the data or conduct a

company5wide informational training seminar using the information. In summary,

the resulting data was created to help guide your business decisions, so it needs

to be readily accessible to the decision makers.

RESEARC- STUDY

.0. RESEARC- OECT+1ES

The objective of the project is to find out the consumer :atisfaction or

>reference and behavior of customer towards ;Insurance :ector especially

towards '( )*+ -/.

+hat all are the stimuli effecting there choices before selecting a Insurance

company. Is it the credibility, good return or celebrity endorser.

It also helps in letting the above Insurance know its basic position in relation to its

competitors in the market & how better can it help re5design its product in

achieving higher sales growth.

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The study of this research also analyses the findings and provide MA* NEW

YORKwith the effective recommendations or suggestions.

RESEARC- MET-ODOLOGY

Resear"h Desin

' research design is a type of blue print prepared depending on various types of

blueprints available for the collection, measurement and analysis of data. '

research design calls for developing the most efficient plan of gathering the

needed information. The design of research study is based on the purpose of the

study.

' research design is the specification of methods and procedures for acAuiring

the information needed. It is overall operational pattern or framework

of the project that stipulates what information is to be collected from

which source by what procedures.

T#pes) Meth56s an6 Te"hni:ues

Se"5n6ar# Resear"h

6sually the easiest and least expensive, secondary research is information that

already exists somewhere. It may be a study, a group of articles on a topic, or

demographic or statistical data gathered by someone else. For example, the

demographic data about car owners in your county available from your $hamber

of $ommerce may be just the information you need5and itGs already gatheredR

Se"5n6ar# Resear"h A"ti8ities

4 eview and analy%e the existing data on your target markets available from

maga%ines, books, published research studies, government publications, etc.

2 *valuate the competition.

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? 'ssess environmental factors such as social, economic, political, etc.

Se"5n6ar# Resear"h Meth56s

1ecause secondary research already exists, no specific scientific method or

techniAue is needed to collect information. Instead, your efforts are spent locating

and gathering market information from reliable sources. 9onGt forget the Internet.

any of the resources listed below, such as maga%ines, trade associations and

government resources now have materials available online.

:ome resources for gathering secondary research information include8

4 Libraries an6 5ther pub'i" in45r$ati5n "enters 5 #ook in reference

centers for resource materials and other existing data on your market.

2 55ks an6 business pub'i"ati5ns 5 any books have been written on

specific industries and markets. #ook for helpful existing data and

environmental factors.

? Maaines an6 ne9spapers 5 *ach and every day, studies and other

survey results are released as news events. 'lso, look into news about

environmental factors such as the leading economic indicators or the

upcoming local political elections.

@ Tra6e ass5"iati5ns5 ost associations have reports on the industries they

serve, the standards they operate under and leaders in the field.

any even conduct educational seminars on trends and other issues.

'ssociations are also helpful in researching the competition. $hambers of

$ommerce 5 The local $hamber is a terrific resource for information on the

community you hope to serve, other local businesses and maps of the area.

-ne can also learn from other members at $hamber networking events.

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1 1anks, real estate and insurance companies may keep information and

statistics on the communities they serve.

2 Wh5'esa'ers an6 $anu4a"turers 5 $ontact these enterprises for

information on the industry standards, customers, costs, distribution, potential

problems

3 Indian government resources can provide extensive demographic data on

population, markets and the economy like $ensus 1ureau of India .

4 Me6ia representati8es 5 'dvertising salespeople at TM, radio, and print

media outlets keep information on the markets their viewers, listeners, and

readers to help influence potential advertisers.

5 C5$petiti5n5 'sk directly for company brochures, menu of products and

services, prices, annual reports, etc. -ne may have to disguise himSher self

as a potential customerR

/ri$ar# Resear"h

:ometimes, the information you need doesnGt exist5anywhereR ouGve searched

the Internet, you scoured the library, journals and databases all to no avail. ThatGs

when you may need to conduct primary research, or research conducted for a

specific purpose. FI, the secondary research you may have used was probably

someoneGs primary data once.

/ri$ar# Resear"h A"ti8ities

4 $onducting surveys to create market data or using other research

Instruments such as Auestionnaires, focus groups, interviews, etc.

2 )oting first5hand observations

? $onducting experiments

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/ri$ar# Resear"h Meth56s

*ach methodology uses 7sampling7 which allows the researcher to reach

conclusions about a population within a certain degree of accuracy without

having to survey everyone. It is not necessary to have a large sample si%e.

:amples as few as one percent of a target market can often provide reliable

results, under the direction of experienced researchers.

>rimary research can be either :ua'itati8e 5r :uantitati8e.

Vualitative research provides definitive market information regarding the opinions

and behaviors of the subjects in the market research study.

Vualitative research is used to achieve a variety of objectives.

4 -btain helpful background information on a market segment

2 *xplore concepts and positioning of a business or product

? Identify attitudes, opinions and behavior shared by a target market

@ >rioriti%e variables for further study

Fully define problems

J >rovide direction for the development of Auestionnaires

Sa$p'in

Sa$p'e

' sample is the set of observations obtained from experimental unit that wereselected from a larger group Kthe population. 1y studying the sample it is hoped

to draw valid conclusions about the larger group. If the conclusions drawn from a

sample are to be meaningful the sample must be obtained in a random fashion.

This means that each member of the population has an eAual chance of being

included in the sample. This ensures that the sample is unbiased. 6nfortunately,

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it is not always easy to obtain a truly random sample from sampling units that are

widely dispersed.

' representative sample is only possible if, before collecting the sample, the

researcher has carefully and completely defined the population, including a

description of the members to be included.

#hy $ample%

:ampling is done in a wide variety of research settings. #isted below are a few of

the benefits of sampling8

4. Re6u"e6 "5st8 It is obviously less costly to obtain data for a selected subset

of a population, rather than the entire population. Furthermore, data collected

through a carefully selected sample are highly accurate measures of the larger

population. >ublic opinion researchers can usually draw accurate inferences for

the entire population of the 6nited :tates from interviews of only 4,333 people.

2. Spee68 -bservations are easier to collect and summari%e with a sample thanwith a complete count. This consideration may be vital if the speed of the

analysis is important, such as through exit polls in elections.

?. Greater s

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