reliance life insurance
TRANSCRIPT
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A project ReportOn
“To study the Life Insurance Industry and various factors which are responsible for enhancing the life insurance proposal to the customers”.
Submitted for partial fulfillment of the degree ofMasters of Business Administration to Rajasthan technical
university, Kota (Rajasthan)
Submitted To:Submitted To: Submitted By:Submitted By:
RAJASTHANRAJASTHAN ASHISH SHARMA ASHISH SHARMATECHNICALTECHNICAL M.B.A PART-II M.B.A PART-II UNIVERSITYUNIVERSITY SESSION: 2006-08SESSION: 2006-08
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Acknowledgement
I am deeply indebted to and express my sincere appreciation and
gratitude to Mr. Chinmay Sharma of Reliance Life Insurance Company
Ltd. for providing their valuable guidance and encouragement throughout
the summer training for keeping my morale up and making it possible to
complete and submit this project of mine in time. In addition to allowing me
to study the insurance sector and recruit the advisor, they provided me many
in depth details and enlightened me in the preparation of the study report.
I also thank management of insurance brokerage firms, banks &
corporate agents & many people to whom I visited during my training
period.
At last I would like to thanks to Mr. S.M. Juniwal (Director) and all
Faculty Members of Apex Institute Of Management & Science, Jaipur for
encouraging me to go for such a challenging task and sharpen my skills.
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PREFACE
In the Insurance industry, there are two channels of distribution- Alternate Distribution and Tide Agency. Advisor Recruitment is the part of Tide Agency.
My project is about agency recruitment & channel distribution of
Reliance Life Insurance. It means company is recruiting advisors for expanding its business. Company adopts chain marketing as a methodology for expansion. In this project, I have to make a cold call to the target market, get the appointment with them, convince them & close the sale positively. The queries, which are asked by the client, should be solved by the discussion with the company guide.
The MBA curriculum has thus been designed such that it importsThe MBA curriculum has thus been designed such that it imports all the theoretical knowledge assisted by the practical impetus. A student isall the theoretical knowledge assisted by the practical impetus. A student is provided with the study all the subject relevant to him for dischargingprovided with the study all the subject relevant to him for discharging responsibilities of his job in future. It equips a students with all technical,responsibilities of his job in future. It equips a students with all technical, management and human skills this report is an attempt to achieve practicalmanagement and human skills this report is an attempt to achieve practical knowledge of research and for partial fulfillment of MBA.knowledge of research and for partial fulfillment of MBA.
Curricular research holds the title Curricular research holds the title “STUDY OF INSURANCE“STUDY OF INSURANCE DOMAIN”DOMAIN” in RELIANCE LIFE INSURANCE LTD.in RELIANCE LIFE INSURANCE LTD.
(Ashish Sharma)(Ashish Sharma)
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CONTENTS
1. Objective of research 05
2. Methodology 06
3. About reliance 08
4. Research methodology 17
5. Facts and findings 20
6. Introduction of L.I. 31
7. Major player of insurance sector 33
8. Advantage of L.I. 41
9. Various department of organization 42
10.Regulations “The agency law” 43
11.About IRDA 44
12.About ADVISORS 51
13.Advisors- job profile 52
14.S.W.O.T. analysis 70
15.Limitations 72
16.Recommendations 74
17.Conclusion 75
18.Questionnaires 77
19.Analysis Of Questionare 80
20.Bibliography 93
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OBJECTIVE OF RESEARCH
The main objective of our on the job training is to provide us the relevant knowledge and information regarding the share market and investment in it and also to provide with the practical knowledge of the corporate environment and exposure also.
Learn Selling:
The motive of on the job training is to learn selling so that I can illustrate the demo version of product to the customers before selling the company’s product and gain more knowledge about selling skills.
Core objective:
The objective is define as the core objective of the research project the research was conduct aiming at fulfill the following object
-To analyze a comprehensive study of Reliance life with others
-To analyze comparative analyzes of its products and services with other life insurance companies.
Methodology
The different strategies which are involved in the fulfillment of our targets are:
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Firstly we have to make calls to the client if any client to seems to be interested in our product then we fixed a appointment with him/her then we go to his/her place for a demo and if he is satisfies then we fill the form and make him her our customers.
Data collection
The first strategy of on the job training is to collect secondary data from various sources. Sources can be from either company guide or friends or magazines. However secondary data must have clients phone or mobile numbers.
Telecalling
The second strategy of on the job training adopted by me is to call to the clients or people through telephone. The data is collected by me or given by company guide to me and I telecalling to them by which an appointment is fixed by client and going to him and tell him about our products..
Identified needs of the customers
After collection of secondary data while telecalling the strategy has a different way as to identify needs of customer to serve the product in front of him, and when the customer is persuaded then he buys the company’s product.
Personal selling
Personal selling is a very good strategy for me to achieve the proposed target under on the job training I go to the corporate Offices, banks etc, To sell the company’s products this is the way by which
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the customers can be aware for the products and if they are interested then they buy it.
References I can adopted this kind of strategy also in which I meet my
relatives friends etc. and find out the requirements for the company’s products for example my friends made me meet to one client and later he became the customer of the company.
To find out markets in other citiesA very good strategy adopted by me is to find out markets in
other cities also because generally all the competitors have saturated jaipur market and it is very difficult to find out more customers in jaipur. For example I am seeking good markets for insurance in other cities like Ajmer and Kota.
ABOUT RELIANCEGROUP
The Reliance Group founded by Dhirubhai H. Ambani (1932-2002) is India's largest business house with total revenues of over Rs 99,000 crore (US$ 22.6 billion).
The Group's activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers, and
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intermediates), textiles, financial services and insurance, power, telecom and infocom initiatives. The Group exports its products to more than 100 countries the world over. Reliance emerged as India's Most Admired Business House, for the third successive year in a TNS Mode survey for 2003.
Reliance Group revenue is equivalent to about 3.5% of India's GDP. The Group contributes nearly 10% of the country's indirect tax revenues and over 6% of India's exports. Reliance is trusted by an investor family of over 3.1 million - India's largest.
One out of every four investors in India is a Reliance shareholder.With globally competitive capital and operating cost positions, Reliance Group dominates the rapidly growing Indian market deriving over 80% of its revenues from the domestic market.
There was a split in Reliance group in 2005 and it was broken into two separate companies:
Reliance Industries Limited
Reliance Anil Dhirubhai
Ambani Group (ADA Group)
VISION
To build a global enterprise for all our stakeholders, and
A great future for our country,
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To give millions of young Indians the power to shape their destiny,
The means to realize their full potential…
VALUES
Shareholder Interest
We value the trust of shareholders, and keep their interests paramount in every business decision we make, every choice we exercise
People Care
We possess no greater asset than the quality of our human capital and no greater priority than the retention, growth and well-being of our vast pool of human talent
Consumer Focus
We rethink every business process, product and service from the standpoint of the consumer – so as to exceed expectations at every touch point
Excellence in Execution
We believe in excellence of execution – in large, complex projects as much as small everyday tasks. If something is worth doing, it is worth doing well.
Team Work
The whole is greater than the sum of its parts; in our rapidly-changing knowledge economy, organizations can prosper only by mobilizing diverse competencies, skill sets and expertise; by imbibing the spirit of “thinking together” -- integration is the rule, escalation is an exception
Proactive Innovation
We nurture innovation by breaking silos, encouraging cross-fertilization of ideas & flexibility of roles and functions. We create an environment of accountability, ownership and problem-solving –based on participative work ethic and leading-edge research
Leadership by Empowerment
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We believe leadership in the new economy is about consensus building, about giving up control; about enabling and empowering people down the line to take decisions in their areas of operation and competence…
Social Responsibility
We believe that organizations, like individuals, depend on the support of the community for their survival and sustenance, and must repay this generosity in the best way they can.
Respect for Competition
We respect competition – because there’s more than one way of doing things right. We can learn as much from the success of others as from our own failures
The Reliance Anil Dhirubhai Ambani Group works in:
Reliance Communication
Reliance Energy
Reliance Capital
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Reliance Mutual Fund
Reliance Life Insurance
Reliance General
Insurance
Reliance Health
Reliance Entertainment
Reliance Infrastructure
RELIANCE – ADA GROUP
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Reliance Capital
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Reliance Capital is one of India’s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth.
The company has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking and other activities in financial services.
Reliance Communications Limited
The flagship company of the Reliance – ADA Group, Reliance Communications Limited, is the realization of our founder’s dream of bringing about a digital revolution that will provide every Indian with affordable means of communication and a ready access to information.
The company began operations in 1999 and has over 20 million subscribers today. It offers a complete range of integrated telecom services. These include mobile and fixed line telephony; broadband, national and international long distance services, data services and a wide range of value added services and applications aimed at enhancing the productivity of enterprises and individuals.
Reliance Energy Limited
Reliance Energy Limited, incorporated in 1929, is a fully integrated utility engaged in the generation, transmission and distribution of electricity. It ranks among India’s top listed private companies on all major financial parameters, including assets, sales, profits and market capitalization.
It is India’s foremost private sector utility with aggregate estimated revenues of Rs 9,500 crore (US$ 2.1 billion) and total assets of Rs 10,700 crore (US$ 2.4 billion).
Reliance Energy Limited distributes more than 21 billion units of electricity to over 25 million consumers in Mumbai, Delhi, Orissa and Goa, across an area that spans 1,24,300 sq. kms. It generates 941 MW of electricity, through its power stations located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa.
The company is currently pursuing several gas, coal, wind and hydro-based power generation projects in Maharashtra, Uttar Pradesh, Arunachal Pradesh
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and Uttaranchal with aggregate capacity of over 12,500 MW. These projects are at various stages of development.
Reliance Energy Limited is vigorously participating in emerging opportunities in the areas of trading and transmission of power. It is also engaged in a portfolio of services in the power sector in Engineering, Procurement and Construction (EPC) through a network of regional offices in India.
Reliance Health
In a country where healthcare is fast becoming a booming industry, Reliance Health is a focused healthcare services company enabling the provision of solution to Indians, at affordable prices. The company aims at providing integrated health services that will compete with the best in the world. It also plans to venture into diversified fields like Insurance Administration, Health care Delivery and Integrated Health, Health Informatics and Information Management and Consumer Health.
Reliance Health aims at revolutionizing healthcare in India by enabling a healthcare environment that is both affordable and accessible through partnerships with government and private businesses.
Reliance Media & Entertainment
As part of the Reliance - ADA Group, Reliance Entertainment is spearheading the Group’s foray into the media and entertainment space. Reliance Entertainment’s core focus is to build significant presence for Reliance in the Entertainment eco-system: across content and distribution platforms.
The key content initiative are across Movies, Music, Sports, Gaming, Internet & mobile portals, leading to direct opportunities in delivery across the emerging digital distribution platforms: digital cinema, IPTV, DTH and Mobile TV.
Reliance ADA Group acquired Adlabs Films Limited in 2005, one of the largest entertainment companies in India, which has interests in film processing, production, exhibition & digital cinema.
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Reliance Entertainment has made an entry into FM Radio through Adlabs Radio, having won 45 stations in the recent bidding, which will soon be the Radio station with the largest footprint in India.
Reliance Capital
Reliance Capital is one of India’s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth.
The company has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking and other activities in financial services.
Reliance Communications Limited
The flagship company of the Reliance – ADA Group, Reliance Communications Limited, is the realization of our founder’s dream of bringing about a digital revolution that will provide every Indian with affordable means of communication and a ready access to information.
The company began operations in 1999 and has over 20 million subscribers today. It offers a complete range of integrated telecom services. These include mobile and fixed line telephony; broadband, national and international long distance services, data services and a wide range of value added services and applications aimed at enhancing the productivity of enterprises and individuals.
Reliance Energy Limited
Reliance Energy Limited, incorporated in 1929, is a fully integrated utility engaged in the generation, transmission and distribution of electricity. It ranks among India’s top listed private companies on all major financial parameters, including assets, sales, profits and market capitalization.
It is India’s foremost private sector utility with aggregate estimated revenues of Rs 9,500 crore (US$ 2.1 billion) and total assets of Rs 10,700 crore (US$ 2.4 billion).
Reliance Energy Limited distributes more than 21 billion units of electricity to over 25 million consumers in Mumbai, Delhi, Orissa and Goa, across an area that spans 1,24,300 sq. kms. It generates 941 MW of electricity, through its power stations located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa.
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The company is currently pursuing several gas, coal, wind and hydro-based power generation projects in Maharashtra, Uttar Pradesh, Arunachal Pradesh and Uttaranchal with aggregate capacity of over 12,500 MW. These projects are at various stages of development.
Reliance Energy Limited is vigorously participating in emerging opportunities in the areas of trading and transmission of power. It is also engaged in a portfolio of services in the power sector in Engineering, Procurement and Construction (EPC) through a network of regional offices in India.
Reliance Health
In a country where healthcare is fast becoming a booming industry, Reliance Health is a focused healthcare services company enabling the provision of solution to Indians, at affordable prices. The company aims at providing integrated health services that will compete with the best in the world. It also plans to venture into diversified fields like Insurance Administration, Health care Delivery and Integrated Health, Health Informatics and Information Management and Consumer Health.
Reliance Health aims at revolutionizing healthcare in India by enabling a healthcare environment that is both affordable and accessible through partnerships with government and private businesses.
Reliance Media & Entertainment
As part of the Reliance - ADA Group, Reliance Entertainment is spearheading the Group’s foray into the media and entertainment space. Reliance Entertainment’s core focus is to build significant presence for Reliance in the Entertainment eco-system: across content and distribution platforms.
The key content initiative are across Movies, Music, Sports, Gaming, Internet & mobile portals, leading to direct opportunities in delivery across the emerging digital distribution platforms: digital cinema, IPTV, DTH and Mobile TV.
Reliance ADA Group acquired Adlabs Films Limited in 2005, one of the largest entertainment companies in India, which has interests in film processing, production, exhibition & digital cinema.
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RESEARCH METHODOLOGY
Defining the research objective
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Review the literature
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Research design
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Sample design
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Data collection
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Analysis of data
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Interpretation of data
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1. Defining the research objective: The research was aimed at the effective of product selling
of reliance life insurance.
2. Review the literature Since a study of effective insurance sector to be made
hence an extensive literature surveys was made at the beginning .The literature and guidance provided by executive and official staff of anand rathi from the base of research work and some of information is directly taken from internet.
3. Research designSince a study of effective trade is to be designed
according to trades and made a questionnaire for survey the research design is as simple as questionnaires.
4. Sample design According to project title the sample size is very small
and not compatible but due to lack of time I had taken a sample size of 110 only
5. Data collectionPrimary data are gathered for specific purpose or a
specific research project data is collected for the first time the data that is collected from primary source of information is known as primary data it is also known first hand information in this the individual conducts his own research and collects data and some data are retrieved from internet and from the corresponding literature.
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6. Analysis of dataData is analyze according to questionnaire filled up some
mathematic tools are also used to get conclusion
7. Interpretation of dataInterpretation of data is made after analyzing it and
interpretation.
Primary data Primary data are data gathered for specified purpose or a specific research project data is collected for the first time the data that is collected from primary source of information is known as primary data it is also known first hand information in this the individual conducts his own research and collect data.
Research instruments Like questionnaires and other mechanical devices
are used to collect primary data for this study questionnaires and personal interview with the respondents was selected.
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Facts and findings
How many companies do know you are in the insurance business?
All, 25
None, 15Few, 60
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Please tell name of insurance companies?
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67
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LIC
RELIANCE LIFEMAX New York Life
Birla Sunlife
Tata-AIG
Bajaj Allianz
SBI Life Insurance
HDFC
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According to you, which is the no. 1 private life insurance company?
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Do you have purchased any life insurance? If yes, then of which company?
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Which product of life insurance you like most ?
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Would you like to associate with “RELIANCE LIFE INSURANCE COMPANY LTD”. ?
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Age of respondents
Table no. 1
Age group No. of respondent Percentage20-30 82 75%30-40 16 15%40-50 6 5%Above 50 6 5%Total 110 100%
Age group
Most of the respondent from 20-30 age groups. Only 15% of respondent are from 30-40 age group.
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Occupation of respondent
Table no 2
Occupation No. of respondent PercentageSelf employed 16 14%Professionals 8 7%Businessman 14 13%Employees 62 57%Govt. employee 10 9%Total 110 100%
Most of the respondent 57% are employed in private organizations and most of them are belonging to 20-30 age group.
Then after self employed or businessman 27% self employed and businessman
Only 9% respondents’ are government employee and rest of professionals
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Product of anand rathi which respondents having
Table no 3
products No of respondents PercentageDemat a/c 42 33%No Products 36 28%IPO 12 9%Insurance 30 23%Mutual funds 8 7%Total 128 100%
33% respondents are having de mat a/c with Reliance and from these people most of are from the group of 20-30 and 28% people are not having any products of. Reliance.
23% of respondents are having INSURANCE. Only 7% respondents are having mutual funds from Reliance.
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Mode of awareness or mode of advertisement
Table no 5
Mode of awareness No of respondents PercentagePrint media 9 17%Sales executive 35 65%Any other source 10 18%Total 54 100%
65% of respondents are aware about anand rathi on some extent by sales executives.
Advertisement took very small part in awareness only 17% and rest 18% awareness created by mouth publicity.
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Customers thinking about Reliance.
Table no 6
Options No of respondents PercentageInsurance 52 47%Mutual fund 20 18%Demat a/c 38 35%Total 110 100%
47% people take it as a broker house. 35% people think it is a insurance provider. Only 18% of respondents knows about its mutual fund services.
INTRODUCTION
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Company Profile:Reliance Capital LtdRCL is registered as a depository participant with National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL) under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996. RCL has sponsored the Reliance Mutual Fund within the framework of the Securities and Exchange Board of India (Mutual Fund) Regulations, 1996.RCL primarily focuses on funding projects in the infrastructure sector and supports the growth of its subsidiary companies, Reliance Capital Asset Management Limited, Reliance Capital Trustee Co. Limited, Reliance General Insurance Company Limited and Reliance Life Insurance Company Limited. As of March 31, 2005, the company’s investment in infrastructure projects stood at Rs. 1071 Crores. The investment portfolio of RCL is structured in a way that realizes the highest post-tax return on its investments.
Board of DirectorsAmitabh Jhunjhunwala, Vice-Chairman Rajendra Chitale, Independent Director Shri C. P. Jain
Reliance Life insurance
Reliance Life Insurance is an associate company of Reliance Capital Ltd., which along with its associates has acquired 100% shares in AMP Sanmar Life Insurance Co Ltd. Reliance Life Insurance has a pan presence and a range of products catering to individual as well as corporate needs.Reliance Life Insurance would strive hard to achieve the following goals:-Emerge as transnational Life Insurer of global scale and standardAchieve impeccable reputation and credentials through best business practicesVision : Empowering everyone live their dreams Mission : Create unmatched value for everyone through dependable, effective, transparent and profitable life insurance and pension plans Guiding Principles
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-Customer Care and Satisfaction- Corporate Governance- Creativity and Innovation- Competitiveness
Introduction of Insurance:
Life is a roller coaster ride and is full of twists and turns. You cannot take anything for granted in life. Insurance policies are a safeguard against the uncertainties of life.
Insurance is system by which the losses suffered by a few are spread over many, exposed to similar risks. Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance policy helps in not only mitigating risks but also provides a financial cushion against adverse financial burdens suffered.
Insurance policies cover the risk of life as well as other assets and valuables such as home, automobiles and jewelry. On the basis of the risk they cover, insurance policies can be classified into two categories:
1. Life Insurance
2. General Insurance
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Major Players In Insurance Sector
LIFE INSURANCE
BUSNIESS
NON-LIFE INSURNACE
BUSNIESS
Life Insurance Corporation General insurance Corporation
ICICI Prudential Life
Insurance
National Insurance Company
HDFC Standard Life
Insurance
The New India Assurance Company
Max New York Life Insurance The Oriental Insurance Company
Birla Sun Life Insurance United India Insurance Company
OM Kotak Mahindra Life
Insurance
Reliance General Insurance
Reliance Life Insurance TATA-AIG Insurance
Allianz Bajaj Life Insurance Royal Sundaram Alliance General
Ins.
Dabur CGU Life Insurance Bajaj Allianz General Insurance
ING Vyasa Life Insurance ICICI Lombard Insurance
SBI Life Insurance
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Life Insurance
Life is very fragile and death is a certainty. We cannot control the
uncertainties of life. But, we can cover the risks surrounding us. Life
insurance, simply put, is the cover for the risks that we run during our lives.
It protects us from the contingencies that could affect us.
Life insurance is not for the person who passes away, it for those who
survive. It is the responsibility of every bread earner to guard against the
events that could affect the family in the unfortunate circumstance of his /
her demise. Thus, having a life insurance policy is very vital.
Insurance sector is enjoying a healthy growth in recent year. Many private
companies are also coming into this sector. Reliance life insurance is one of
them. Reliance life insurance Company limited is a part of reliance capital
limited of reliance –Anil Dhirubhai Ambani Group. Reliance Life Insurance
Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil
Dhirubhai Ambani Group. The company acquired 100 per cent shareholding
in AMP Sanmar Life Insurance Company in August 2005. Taking over
AMP Sanmar Life provided Reliance Life Insurance a readymade
infrastructure and a portfolio.
Today a large number of people are investing in the insurance market, and it
would be interesting to know that the number of investors in this market is
increasing day by day with the launch of the new ULIP plans which provide
for returns above 40%. Due to the increase in the Indian economy, more and
more people are taking active participation in this industry as investors,
advisors, or may be on-roll employees in this industry.
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The project is targeted to study the need of life insurance among the people.
As Indian economy is rising, the people need and behavior are also
changing. Firstly people want there life to be insured but now they want
healthy returns on their investment with the risk cover.
Before going for a life insurance policy it is imperative that you know about
various types of life insurance policies. Major among them are:
Endowment Policy
Whole Life Policy
Term Life Policy
Money-back Policy
Joint Life Policy
Group Insurance Policy
Loan Cover Term Assurance Policy
Pension Plan or Annuities
Unit Linked Insurance Plan
Endowment Policy
An endowment policy covers risk for a specified period, at the end of which
the sum assured is paid back to the policyholder, along with the bonus
accumulated during the term of the policy. An endowment life insurance
policy is designed primarily to provide a living benefit and only secondarily
to provide life insurance protection. Therefore, it is more of an investment
than a whole life policy. Endowment life insurance pays the face value of
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the policy either at the insured's death or at a certain age or after a number of
years of premium payment. Endowment policy is an instrument of
accumulating capital for a specific purpose and protecting this savings
program against the saver's premature death.
Whole Life Policy
A whole life policy runs as long as the policyholder is alive. As risk is
covered for the entire life of the policyholder, therefore, such policies are
known as whole life policies. A simple whole life policy requires the insurer
to pay regular premiums throughout the life. In a whole life policy, the
insured amount and the bonus is payable only to the nominee of the
beneficiary upon the death of the policyholder. There is no survival benefit
as the policyholder is not entitled to any money during his / her own
lifetime.
Term Life Policy
Term life insurance policy covers risk only during the selected term period.
If the policyholder survives the term, the risk cover comes to an end. Term
life policies are primarily designed to meet the needs of those people who
are initially unable to pay the larger premium required for a whole life or an
endowment assurance policy.
No surrender, loan or paid-up values are granted under term life policies
because reserves are not accumulated. If the premium is not paid within the
grace period, the policy lapses without acquiring any paid-up value.
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Money-back Policy
Money back policy provides for periodic payments of partial survival
benefits during the term of the policy, as long as the policyholder is alive.
They differ from endowment policy in the sense that in endowment policy
survival benefits are payable only at the end of the endowment period.
An important feature of money back 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 money-back components. The bonus is also calculated
on the full sum assured.
Joint Life Policy
Joint life insurance policies are similar to endowment policies as they too
offer maturity benefits to the policyholders, apart form covering risks like all
life insurance policies.
But joint life policies are categorized separately as they cover two lives
simultaneously, thus offering a unique advantage in some cases, notably, for
a married couple or for partners in a business firm. Under 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. Vested 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.
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Group Insurance Policy
Group insurance offers life insurance protection under group policies to
various groups such as employers-employees, professionals, co-operatives,
weaker sections of society, etc. It also provides insurance coverage for
people in certain approved occupations at the lowest possible premium cost.
Group insurance plans have low premiums. Such plans are particularly
beneficial to those for whom other regular policies are a costlier proposition.
Group insurance plans extend cover to large segments of the population
including those
Who cannot afford individual insurance.
A number of group insurance schemes have been designed for various
groups. These include employer-employee groups, associations of
professionals (such as doctors, lawyers, chartered accountants etc.),
members of cooperative banks, welfare funds, credit societies and weaker
sections of society
Loan Cover Term Assurance Policy
Loan cover term assurance policy is an insurance policy, which covers a
home loan. Such a policy covers the individual's home loan amount in case
of an eventuality. The cover on such a policy keeps reducing with the
passage of time as individuals keep paying their EMIs (equated monthly
instalments) regularly, which reduces the loan amount.This plan provides a
lumpsum in case of death of the life assured during the term of the plan. The
lumpsum will be a decreasing percentage of the initial sum assured as per
the policy schedule. Since this is a non-participating (without profits) pure
risk cover plan, no benefits are payable on survival to the end of the term of
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the policy. Various insurance companies offering loan repayment protection
insurance policy are
HDFC Standard Life Insurance
Tata AIG
ING Vysya
LIC
Pension Plan or Annuities
A pension plan or an annuity is an investment that is made either in a single
lump sum payment or through installments paid over a certain number of
years, in return for a specific sum that is received every year, every half-year
or every month, either for life or for a fixed number of years. Annuities
differ from all the other forms of life insurance in that 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. By buying an annuity or a
pension plan the annuitant receives guaranteed income throughout his life.
He also receives lump sum benefits for the annuitant's estate in addition to
the payments during the annuitant's lifetime.
Unit Linked Insurance Plan (ULIP)
Unit linked insurance plan (ULIP) is life insurance solution that provides for
the benefits of protection and flexibility in investment. The investment is
denoted as units and is represented by the value that it has attained called as
Net Asset Value (NAV). The policy value at any time varies according to
the value of the underlying assets at the time. ULIP provides multiple
benefits to the consumer. The benefits include:
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Life protection
Investment and Savings
Flexibility
Adjustable Life Cover
Investment Options
Transparency
Options to take additional cover against
Death due to accident
Disability
Critical Illness
Surgeries
Liquidity
Tax planning
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Advantages of Life Insurance
1. It is superior to an ordinary saving plan: Unlike other saving plans,
it affords full protection against risk of death. In case of death, the full
sum assured is made available under a life assurance policy; whereas
under saving scheme the total accumulated saving alone will be
available. The later will be considerably less than the sum assured, if
death occurs during early years.
2. Easy settlement & protection against creditors: The life assured
can name person(s) called Nominee to whom the policy money would
be payable in the event of his death. The proceeds of a life policy can
be protected against the claim of the creditors of the life assured by
effecting a valid assignment of the policy.
3. Ready marketability & suitability for quick borrowing: After an
initial period, if the policyholder finds him unable to continue
payment of premiums, he can surrender the policy for a cash sum.
Alternatively, ha can tide over a temporary difficulty by taking loan
on the sole security of the policy without delay. Further, a life
insurance policy is sometimes acceptable as security for a commercial
loan.
4. Tax Relief: The Indian Income-Tax Act allows deduction of certain
portion of the taxable income, which is diverted to payment of life
insurance premiums from the total income tax liability. When this tax
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relief is taken into account, it will be found that the assured is in effect
paying a lower premium for his insurance.
The various departments in the organization are:
1. The Human Resource Department
2. Investment Department
3. Customer Service and Operations Department
4. Information Technology Department
5. Strategy Department
6. Marketing Department.
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Regulations - The Agency Laws
The basics of the insurance business in India are governed by the Agency
Law, which is part of the Indian Contracts Act, 1872. Further, after the
industry got opened up the regulatory authority has been the Insurance
Regulatory & Development Authority (IRDA).
Agent- The Definition.
According to the section 182 of the Indian Contract Act, 1872, “an agent is a
person employed to do any act for another or to represent another in dealing
with a third person”. In the insurance sector the term “Agent” is ordinarily
applied to a person engaged by the insurer to procure new business.
Powers of the Agent
An agent can act only to the extent of authority may be expressed or implied.
An authority is said to be expressed when it is given by words spoken or
written. It is implied when it is to be inferred from the circumstances of the
case.
Life Insurance Agent
The Insurance Act, 1938 defines an agent as “one who is licensed under the
act & is paid consideration of his soliciting or procuring insurance business
including business relating to continuance, renewal or revival of policies of
insurance”.
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The Insurance Regulatory & Development
Authority
Duties, Powers & Functions
Section 14 of IRDA Act, 1999 lays down the duties, powers & functions of
IRDA.
Subject to the provisions of the Act & any other law for the time being
in force, the Authority shall have the duty to regulate, promote &
ensure orderly growth of the insurance business & re-insurance
business.
Without prejudice to the generality of the provisions contained in sub-
section (1), the powers & functions of the Authority shall include,
1. Issue to the applicant a certificate of registration, renew, modify,
withdraw, suspend or cancel such registration.
2. Protection of the interests of the policy holders, insurable interest,
settlement of insurance claim, surrender value of policy & other terms
& conditions of contracts of insurance.
3. Specifying requisite qualifications, code of conduct, & practical
training for intermediary or insurance intermediaries & agents;
4. Specifying the code of conduct for surveyors & loss assessors;
5. Promoting efficiency in the conduct of insurance business;
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6. Promoting & regulating organizations connected with the insurance &
re-insurance business;
7. Levying fees & other charges for carrying out the purpose of this Act;
8. Calling for information from, undertaking inspection of, conducting
enquiries & investigations including audit of the insurers,
intermediaries, insurance intermediaries & other organizations
connected with the insurance business;
9. Control & regulations of the rates, advantages, terms & conditions
that may be offered by insurer in respect of general insurance business
not so controlled & regulated by the Tariff Advisory Committee under
the section 64U of the Insurance Act, 1938 (4 of 1938);
10.Specifying the firm & manner in which books of account shall be
maintained & statement of accounts shall be rendered by insurers &
other insurance intermediaries;
11.Regulating investments of funds by insurance companies;
12.Regulating maintenance of margin of solvency;
13.Adjudications of disputes between insurers & intermediaries or
insurance intermediaries;
14.Supervising the functioning of the Tariff Advisory Committee;
15.Specifying the percentage of premium income of the insurer to
finance schemes for promoting & regulating professional
organizations referred to in clause (f);
16.Specifying the percentage of life insurance business & general
insurance business to be undertaken by the insurer in the rural or
social sector; &
17.Exercising such other powers as may be prescribed.
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Essentials for the License
The IRDA has prescribed both qualifications & the disqualifications for a
person to be given a license
Qualifications
The person must be
Be at least 18 years old.
Must have passed at least 12th standard or more (if he is appointed in a
place with population of 50,000 or more), 10th standard otherwise.
Have undergone training for at least 100 hours in life or general
insurance business as the case may be from an institute, approved &
notified by the authority.
Should have also passed the pre-recruitment examination conducted
by the Insurance Institute of India or any other examination body
recognized by the authority.
In case of an applicant for the composite insurance agent, he/she
should have completed at least 150 hours practical training in life &
general insurance business, which may be spread over six to eight
weeks.
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Disqualification
The factors that would debar a person from obtaining a license are that
he/she
Has been found to be of unsound mind by a court of competent
jurisdiction
Has been found guilty of criminal breach of trust, misappropriation,
cheating, forgery or abetment or attempt to commit any such offence.
The license once issued can be cancelled whenever the person acquires a
disqualification. In the case of companies & firms who want to become
agents, the test of qualification & disqualification would be applied to all the
directors or partners.
There are two separate forms, one for individuals & another for those other
than individuals, in which the applications are to be made. The two forms
are numbered by IRDA-Agent VB & are annexed to the regulation. The
applications in the respective forms have to be made to the designated
person appointed buy the insurer sponsoring the application.
The application for the license should be accomplished by proofs.
1. Of fee having been remitted to the authority.
2. Of age
3. Of having completed the training & passed the prescribed
examination.
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The fee to be sent to the authority directly is Rs. 250 for new license & for
renewals applied for within the prescribed period, viz, at least 30 days before
the date of expiry. If the application is made after the date of expiry it would
be normally refused. But, if the authority is satisfied that hardship would be
caused otherwise, the license may be renewed. Prior to renewal of the
license of the license the agent should have completed at least 25 hours
practical training in life or general insurance business or at least 50 hours
practical training in life & general insurance business in the case of a
composite insurance agent.
The Duties & Obligations of the Agent
As per the IRDA guidelines every advisor must be trained & licensed to sell
life insurance. The responsibilities & obligations of the advisors have been
clearly defined.
Every insurance agent should himself & the insurance company that
he represents along with the license particulars.
The advisors should take into the actual needs of the clients before
recommending a plan.
All requisite information in respect of the products recommended
should be provided with a ‘Sales Illustration’ & the premium to be
paid.
The agent is obligated to disclose the scales of commission likely to
be earned by him through sale of the recommended product, should
the client wish to know it.
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The nature of information required in the application form should be
adequately explained along with the requirement for supporting
documents.
Once the proposal is submitted, the advisor shall inform the status of
decision by insurer promptly.
In case of a claim, the advisor is required to render necessary
assistance in complying with the requirements for settlement of claims
by the insurer.
He/she should not interfere with any proposal introduced by any other
any insurance advisor/agent or force the client to terminate an existing
policy taken from him/her & take a new proposal within 3 years.
An advisor cannot induce the client to omit any material information
or submit any wrong information in the proposal form.
Further no rebating or offering any inducements in lieu of taking a
policy is allowed.
Code of Conduct for the Agent
The licensing of Insurance Agent Regulations, 2000 lays down a code of
conduct for the agents, which state that, the agent shall
Disclose the license to the prospect on demand.
Explain all available options to the prospect.
Disclose the scales of commission, if asked for by the prospect.
Impress upon the prospect need to disclose all information
Inform the insurer about any adverse habits & materials facts of the
person to be insured.
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Convey to the proper about the acceptance or rejection of the
proposal.
Render necessary assistance to policyholders or claimants or
beneficiaries in complying with the requirements, asked for by the
insurer.
Advise policyholders to affect nomination.
Make every attempts to ensure remittance of premiums by the
policyholders within the stipulated time by giving notice orally or in
written.
Not induce the prospect to submit any wrong information.
Not interfere with the proposal introduced by other insurance agents.
Not demand or receive share of proceeds under an insurance contract.
Not cause the termination of an existing policy with a view to effect a
new proposal.
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Advisors
The importance of advisors
Reliance Life Insurance Co. Ltd. aspires to provide state of the art of
customers’ service & opportunities & avenues for enterprising people to
grow & prosper. The company wish to grow exponentially that is backed by
the latest technology, hence offering its customers:
Complete & diversified product portfolio.
Faster & more accurate service.
Multi-channel distribution systems.
Highly trained professional sales people offering quality pre & post
sales service.
It is in the above mentioned areas of personal specialization where the
importance of an advisor clearly stands out the advisor not only contribute in
brining in new business for the company, but also plays an important part in
offering world-class pre & post sales service to the clients to the clients with
the support of the organization. But the company in its principles clearly
states out that an advisor to means “much more than a salesman or a
saleswoman, we Reliance at recognize our advisors as the ambassadors of
our organization in the market place & we consider the advisor force
would be our biggest differentiating factor in the coming years”. The
advisor is an important asset not only for the organization from the business
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point of view but also to the society on the whole as he/she is someone who
provide valuable service to the community be helping people attain financial
security & build funds for their future needs thereby assisting them in
getting their financial freedom.
If looked from the other side of the business where the company is operating
the competitive Indian market & more so in the business of life insurance
where the customers looks for self-belief & faith then the advisor certainly
holds the vital link in the overall business proposition. They represent the
company’s face & words on which the customers can trust because the
customer knows that face. The advisor helps to create a web fro the business
to grow & driving the customer to come to the company with complete trust
& faith.
THE PROFILE OF AN ADVISOR
Qualifications
1. Age should be ideally between 25-60 years.
2. Minimum education qualification is 10 + 2.
3. Good & convincing communication skills.
4. Capacity to build an impressive network.
5. Engaged in gainful business or corporation.
6. Willing to undergo extensive training & development programs
7. Pleasing personality.
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Skills & Competencies
As quoted by Mr. Pratap gorde, Head HR, Reliance Life Insurance the
company is always on a look out for people who have the following the
skills & competencies that we require in business are:
Actuarial skills.
Investment management skills.
Core operation skills.
Core underwriting skills.
Relationship management skills.
Project management skills.
Leadership & Team skills
A passion for achieving results.
High energy levels & infectious enthusiasm
Open to ideas
Strong team players
High caliber & ability
And above all, unyielding integrity.
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Job profile
As an advisor for the company, the role of the individual is no way limited
to sell the policies of the company. But the role basically starts from the
basics of explaining the life insurance aspects & the potential benefits to the
customers. Further he is required to assist them in deciding upon the plan
that suits them the best in terms of finance and security provided. Therefore
the opportunity provided to the advisor is unlimited in no way and the
typical benefits can be mentioned as followings:
There is absolutely no need of a startup capital.
There is the benefit of flexible working hours.
The freedom to work from anywhere & being one’s own boss.
The unlimited earning benefits in form of remuneration & incentives.
And the privilege of being a part of a world class sales team.
The role of an advisor is multifaceted in the sense that his work scope is in
no way limited. But in a nut shell the expectations from an advisor has been
laid down by the management in the following manner under two main
headings:
1. Providing continuous financial advise to clients
Identifying prospective clients.
Making appointments
Conducting reviews with the prospective/existing clients.
Closing the sales contracts
Getting more referrals so as to increase the network
Providing pre & post sales services to clients
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2. The advisor is also required to regularly follow the internal sales &
the internal reporting system so as to get the feed back & further leads
for the prospective areas of business & improvement.
Benefits & Support Provided
The benefits have already been mentioned very often in the previous section
but it’s necessary to look into them as a comprehensive criterion. The main
benefits & supports that an advisor would be availing of are the distinct
Reliance Life Insurance advantages:
Rewarding career
The job profile as mentioned earlier is unlimited & an advisor will help
people realize their dreams & provide them the financial & psychological
security & faith. The ultimate rewards will be the differences made to all
these lives & that would be most satisfying in the real sense.
Successful Team
Being at Reliance Life Insurance gives the opportunity to be a part of India’s
best team of life insurance advisors. The company is numero uno among the
private players in the industry & has won numerous recognition & awards
that give it the international edge.
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Attractive remuneration
Reliance offers the most competitive remuneration benefits at person in the
industry, which proves to be very useful from long term perspective of
financial security. There is absolutely no limit to one’s earnings & the added
incentives just help as advisor to get more than what he/she expects.
Independence.
At, Reliance the advisor is a boss in himself & in the real sense. There is the
freedom to choose the workplace, the work timings & the amount of
earnings one wants to have. Moreover there is no need of any initial capital
investment, yet one can become an entrepreneur in the most unexpected
manner.
World Class Team
The company leverages on the international linkages that it has got to
provide the best training available in the industry at the present. The
company aims to impart the necessary skills & competencies to all even if
there is no previous experience with the individual. The presence of trained
in-house trainers & professionals provide the necessary aspects of training
required. Moreover, the training is being provided with the help of
professional institutions & centers like the RNIS College.
Career Agency System
Reliance’S commitment to Career Agency System imparts support to the
advisors at every stage of the business. The company believes in
encouraging the advisors to the highest level of success all through their
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career. One of the distinct factor is the opportunity & the option of a
management career option for the successful performers.
Best Infrastructure
The huge investments that the company has made to develop the state of art
infrastructure throughout the business. The infrastructure provides the
necessary tools, technology & human support that enable to build a
profitable long term relationship.
Extensive Product Portfolio
The company has got more than four hundred policies for its customers. This
consists of the unique individuals, groups, & rider policies. This extensive,
diversified & comprehensive range provides the competitive edge that no
other advisor would be having in the market.
Sales & Marketing Support
The company has got unique sales & marketing tools to help & support the
advisors at every stage of the career. The sales, promotions & marketing
collaterals that the company posses help to achieve just that.
Financial Strength
Reliance offers the advisors & the customers’ unmatched financial strength
& solidity. The huge amount of paid up capital & growing revenues are an
indicator of the same.
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Support provided by the Sales Manager
Field visits for the incumbents
Training on products & selling skills
Regular business reviews to monitor the progress
The SM acts both as a coach & a mentor
The SM recognizes the high performers
Helps in becoming financially independent
But- the expectations from the team
To achieve the sales targets given
To participate in all the meetings being placed
Attending all the training programs being arranged
Report for the weekly reviews at the office
Regularly following the sales process
And the advisors are also required to follow the weekly reporting
process.
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Career progression
The Tiger team
It is exclusive program achievers among the advisors but the scope of
progression is limited only to a few hand picked all round performers. The
TIGER TEAM represents a fast track career path for the advisors. The
successful candidates are recognized as Tigers. One continues to do his/her
business but the benefits come added on. The criteria for selections are:
Age 25-40 years
At least one year of working in the system
Case count should be at least of two per month.
The Mobile Tigers
This program offers the following benefits:
Part time career as a trainee
To conduct foundation programs
Opportunity to share the best field practices
Chance to replicate one’s own business
Freedom to continue with one’s business
The selection criteria for this program are:
Age 25-40 years
At least six months of working in the system
Case count of at least two per month
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The Pinnacle Program
This program is for the high achievers in the system & the major benefits
that are on offer are as following:
A full time career as a Sales Manager
The possibility of growth within Reliance
Greater earning potential
The scope for personal development
The selection criteria for this program are:
Age 25-40 years
At least six months of working in the system
Case count of at least two per month
Fast Track Pinnacle Program
This program offer following features:
Offering a full time career as a Asst Sales Manager
Opportunity of growth within Reliance
Scope of greater earning potential
The scope for personal development
The selection criteria for this program are:
Age 25-40 years
At least six months of working in the system
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Case count of at least five per month (for 6 months)
Agency Champion
This is the highest level of career progression on offer. It has got several
distinct features, which sets it apart from all the above-mentioned programs.
This program aims at rewarding the super-achievers working with the
company. The features of this program are as follows:
The chance of taking one’s business to higher level.
To develop one’s own business, i.e. to develop into an entrepreneur
The freedom of recruiting new advisors & making one’s own team
The potential of increased reach of network
The selection criteria for this program are as following:
At least one year of working I the system
Minimum of 36 policies & Rs. 3.60 lacs premium
Selection process (assessment center)
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The Typical Career Progression Path
ASM
TRAINER 12-18
MONTH ADVISOR
SALES MANAGER
Commission Structure
The production targets shall be split into two stages:
1. Minimum Business Guarantee (MBG)
2. Bonus Target
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SMTrainer 12-18
MonthsAgency Manager
Trainer RoleBSM
2
The procedures of becoming an advisor
Reliance believes in getting who can align with the company’s principle &
beliefs well enough to grow on their own. In the words of the top
management the company believes that one can become an advisor for the
leader only & only if he/she has the following:
Confidence
Self-motivation
Persuasion
Urge to be financially independent
Relationship skills
The broad steps that best describe the procedure of becoming an advisor in
the company are as following:
Confirmation of mutual interest as between the company & the
individual
Appearing & clearing the selection interview
Profiling of the test dates between parties
Draft payment favoring ‘Reliance Life Insurance Co. Ltd.’, payable
Mumbai
Finalizing of the training dates & the venue
The company provides for the all-round development of the individual &
any previous experience or inexperience in the related field is not an
obstacle. The professional approach of the company in the training module
helps it to train the incumbents in the best possible manner. The company
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has got a professional in-house training staff that is one of the best in the
practice. The company has laid down for a State-of-art training on:
Selling skills
Product knowledge
Relationship skills
The training is delivering through several convenient options keeping in
view the requirements of the individuals & the target of the company. The
training is done at the timing & venue decided upon by the parties
concerned.
The incumbents have to complete hundred hours of training in any model
that they choose from. The guidelines laid down for the training are as per
the books IRDA. The training concept can be classified according to very
different aspects, which can be the delivery medium, & the time involved.
On the basis of the delivery medium the process can be of:
Face to face training
Online training
Self learning
On the basis of the time involved the process can be of:
Full time- involving 15 days
Part time- involving 27 days
Online training- involving 2 months
So if we summarize the steps & formalities involved in the whole process,
the formalities for a candidate to become the advisor as per the IRDA are:
Filling up the insurance advisor form
Documents required
7 passport size photographs
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Acceptable age proof
Acceptable education proof
Acceptable residence proof
Payment through the demand draft
Completion of the training
Reporting of the form with the DOPS
Different types of Reliance Life Insurance:
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Reliance Automatic Investment plan
Reliance Cash Flow plan
Reliance Child Insurance plan
Reliance Connect 2 Life Insurance
Reliance Credit Guardian Insurance
Reliance Insurance plan
Reliance Golden Years plan
Reliance Market return plan
Reliance Money Guarantee plan
Reliance Simple Term plan
Reliance Special Credit Guardian plan
Reliance Special Endowment plan
Reliance term Plan
Reliance Whole Life Insurance plan
Reliance Secure Child Plan
Reliance Wealth+ Health Plan
ULIPs vs Mutual Funds
Parameter’s ULIP’s Mutual fund
Investment Determined by the Minimum investment
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amount investor and can be
modified as well.
amounts are determined
by the fund house.
Expense’s No upper limits,
expenses determined
by the insurance
company.
Upper limits for expenses
chargeable to investors
have been set by the
regulator.
Portfolio
disclosure
Not mandatory. Quarterly disclosures are
mandatory.
Modifying
asset
allocation
Generally permitted
for free or at a nominal
cost.
Entry/exit loads have to
be borne by the investor.
Tax Benefit’s Section 80C benefits
are available on all
ULIP investments.
Section 80C benefits are
available only on
investments in tax-saving
funds.
Unit Linked Insurance Policies (ULIPs) as an investment avenue are
closest to mutual funds in terms of their structure and functioning. As is the
case with mutual funds, investors in ULIPs are allotted units by the
insurance company and a net asset value (NAV) is declared for the same on
a daily basis.
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Similarly ULIP investors have the option of investing across various
schemes similar to the ones found in the mutual funds domain, i.e.
diversified equity funds, balanced funds and debt funds to name a few.
Generally speaking, ULIPs can be termed as mutual fund schemes with an
insurance component.
However it should not be construed that barring the insurance element there
is nothing differentiating mutual funds from ULIPs.
4 Reasons why ULIP’s get and edge over others
1. Insurance cover plus savings- ULIPs serve the purpose of providing life
insurance combined with savings at market-linked returns. To that extent,
ULIPs can be termed as a two-in-one plan in terms of giving an individual
the twin benefits of life insurance plus savings. This is unlike comparable
instruments like a mutual fund for instance, which does not offer a life
cover.
2. Multiple investment options- ULIPs offer a lot more variety than
traditional life insurance plans. So there are multiple options at the
individual's disposal. ULIPs generally come in three broad variants:
Aggressive ULIPs (which can typically invest 80%-100% in equities,
balance in debt)
Balanced ULIPs (can typically invest around 40%-60% in equities)
Conservative ULIPs (can typically invest upto 20% in equities)
3. Flexibility-The difference lies in the flexibility that ULIPs afford the
individual. Individuals can switch between the ULIP variants outlined above
to capitalise on investment opportunities across the equity and debt markets.
Some insurance companies allow a certain number of `free' switches. This is
an important feature that allows the informed individual/investor to benefit
from the vagaries of stock/debt markets.
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4. Works like an SIP -Individuals have probably already heard of the
Systematic Investment Plan (SIP) which is increasingly being advocated by
the mutual fund industry. With an SIP, individuals invest their monies
regularly over time intervals of a month/quarter and don't have to worry
about `timing' the stock markets. These are not benefits peculiar to mutual
funds. Not many realise that ULIPs also tend to do the same, albeit on a
quarterly/half-yearly basis.
S.W.O.T. ANALYSIS
STRENGTH
Reliance Life Insurance Company Limited is right now the market leader in
Private Insurer segment.
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WEAKNESS
The company right now has lesser number of agents (i.e. financial advisors)
than LIC of India, which affects their sales in comparison to LIC of India.
OPPURTUNITY
Reliance Life Insurance Company Limited can give LIC of INDIA agents an
opportunity to join Reliance Life Insurance Company Limited as Reliance
has got more incentive packages & servicing quality better than LIC of
INDIA. Doing this they can reduce their cost of training and can exploit
their experience.
THREAT
Other big brand names like ICICI Prudential, BIRLA’S, TATA, HDFC,
SBI, and AVIVA. etc.
POLITICAL
Right one Reliance Life Insurance Company Limited, can go for opening up
more & more offices, as the present political environment is business
friendly.
ECONOMIC
Insurance as we have already discussed is very essential for every person on
this face of earth. Being an insurance company, the responsibility of the
company also increases by many multiples, as they have to keep an eye on
each & every happening going around & provide better & fast service to
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customers. Along with this, insurance is also very important for building up
the infrastructure of any country. The money collected from the people is
invested in many sectors to develop the infrastructure & hence ultimately
make the life of the citizens better.
SOCIAL
Reliance Life Insurance Company Limited enjoys a good brand name; they
can use it for their profit.
TECHNOLOGICAL
Reliance Life Insurance Company Limited uses latest technology for their
operations, which give them an edge over the competition.
LIMITATIONS
As the movement throughout the city is not possible due to certain
constraints so the movement was quite restricted.
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People are not ready to go for training. As the training period is of 17
days and it involves full day, so it becomes difficult for them to leave
their offices or shops for such a long time.
The compulsion of selling 12 policies in a year also restricts them from
becoming advisors. If they do not fulfill this target, then their license is
cancelled after a year.
Lack of trust on any company of Private Sector.
Lack of knowledge about the products of Reliance and their total and
blind faith on LIC.
Sometimes, fresh graduates want to become advisors but the company
denies making them an advisor as they are very fickle-minded and also
unreliable.
There is a problem in targeting Chartered Accountants. ICAI, which is
the governing body of Chartered Accountants, does not allow them to
become advisors. However, now they have permitted some CA’s to
become advisors, but these are only those ones who are doing jobs
somewhere and not allowed the ones who are doing their practice. So,
still this decision is very dicey.
Sometimes, even those people want to become advisors for the company
who are not a locality but then the major problem that they face is that
they have got no natural market, so they are very susceptible about their
performance and whether they will be able to generate business for the
company or not, so they avoid to take up this challenge.
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It was a great problem to get appointments from people in the month of
March, as most of them were busy in filing their returns.
Some people ask about comparative analysis with LIC.
Some people consider IRDA fees of Rs. 1000 as a constraint.
Non-availability of part-time training.
All small towns are not open for doing this business.
One person cannot take Life Insurance Agency of two different
Companies.
Time constraint is the biggest constraint in taking up the study.
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Recommendations
After going through the above table regarding market share of various
companies in the financial year 2007-2008, there is no reason why Reliance
should rejoice of being the number one company in the country. The growth
that companies like ICICI PRUDENTIAL, BIRLA SUNLIFE, SBI LIFE
INSURANCE, TATA-AIG, BAJAJ ALLIANZ, OM KOTAK MAHINDRA,
AVIVA, ING VYASA, METLIFE, & AMP SANMAR have produced that
can be quite a big unseen threat for the company in the coming years. So the
company should start thinking of what they want from the market & where
they want to see themselves after a span of 10 years because if the popularity
of these companies continues then one day they will become good
competitors of Reliance & then the consequences can be quite disturbing for
the company.
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Conclusion
1. RELIANCE LIFE INSURANCE COMPANY has great goodwill in
market in liberalized Indian market there are approximately 13 big
companies in Indian market and RELIANCE is the No.1 Group . I
found this fact in my recent survey.
2. There are lots of scope of life insurance in India only 2.5 people are
secure with life insurance so the insurance sector is its booming stage
this boom will more increase in 2 or 3 years.
3. Good profile insurance advisor could do the better job. If RELIANCE
mentions the level of advisor then they may give great sales to the
company.
4. RELIANCE has tuff competition with LIC as well as ICICI
PRUDENTIAL, TATA AIG, BAJAJ ALLIAZE, BIRLA SUNLIFE
INSURANCE, SAHARA, ING VYSVA, OM KOTAK MAHINDRA,
HDFC INSURANCE AND SBI LIFE.
5. If the company starts to concentrate on village segment market. Then
company can get great business.
6. RELIANCE has interested and profitable planes for different age
group.
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7. I got the good profile people near by bank and share market. When I
concentrated on the 20-25 year age group people I found good result.
8. Within 20-25 year age group the sincerity level is high. They are
career oriented and want to earn more.
9. In this age group people made interest to purchase the kids plan and
pension plan and money back plan.
10. In the age group of 30-35 year the people who earning more than 3
lakh p.a. made interest to purchase ULIP.
11. I found that in insurance sector a person should have great
communication and convenience skill.
12. People made interest in the business opportunity of RELIANCE
because there are lots of chances to increase earnings and make high
place in the company.
13. People took interest in pinnacle programmed and also life the
professional environment of the company.
14. In my survey I found that low percentage of people is aware with the
life insurance.
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QUESTIONNAIRE Study of ‘LIFE
INSURANCE’ needs and habits among people
AGE: ______________
GENDER:
EDUCATION: ________________
OCCUPATION: _________________________________________________
Q1) what is your preference for Any Financial Investment? (Please Rank)
A) Bank/ Fixed Deposits B) Company Fixed Deposits
C) Share D) Mutual Funds
E) Real Estate F) Gold/ Silver
G) Insurance Cover- Life H) Insurance General- (Non
Life/life)
Q2) what do you think of Life Insurance primarily?
A) As a risk cover B)As an investment
C) As a mixture of both D) any other…………
Q3) what are the important features of an insurance investment for you?
(Please Rank)
A) Safety B) Liquidity
C) Growth D) Insurance risk for self
E) Insurance risk for family members F) Income tax saving
G) Risk against theft (General Insurance) H) Premium amount
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I) Money back J) Service rendered
K) Ease in payment L) Responsiveness
M)Online details
N) Availability of a Company Representative in need
Q4) whom do you rely on before buying an insurance policy? (Please Rank)
A) Self (through comparison of various policies)
B) Self (through comparison of various companies)
C) Agent
D) Parents/ Elders
E) Past experience with the company
F) Friends
G) Spouse
H) Company advertisement
I) Any other (Please specify…………….)
Q5) If you rely on an insurance agent please rank the following attributes
you look for in him/ her?
A) Product knowledge B) Competitive knowledge
C) Attitude/ Agreeability D) Ability to calculate my
insurance needs
E) Ability to communicate well F) Responsiveness
G) Familiarity H) Confidence
I) Any other (Please specify….)
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Q6) Do you think you will like to buy an insurance policy after scrutinizing
features online?
Yes No
Q7) how do you think you will like to pay premiums? (Please rank)
a) Deposit Cheques in insurance companies office
b) Deposit Cheques in collection boxes
c) Agent comes to collect cheque
d) Online payment through credit card
e) Automatic debit through bank account
Q8) what is your preferred premium payment frequency? (Please tick one)
A) Monthly B) Quarterly
C) Half Yearly D) Yearly
Q9) what is your preferred time period of insurance? (Please tick one)
A) 1 year B) <5year
C) 5 to 10 year D) 10 to 15 year
E) >15 year
ANALYSIS OF QUESTIONNAIRE:
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The sample size of the survey is 40 and people of different age, occupation,
gender and education been considered in this survey because life insurance
is just not for elite class as an investment but it is also a need of every
individual to protect his life and his family from unforeseen circumstances.
So it was the requirement of this survey to include people of every age,
occupation, gender and education to generate a comprehensible outcome so
that is beneficial for the company to understand the customers and their
requirements.
In earlier times people use to buy life insurance just to cover the risk but
now days the trend has changed during my survey I realized with launch of
ULIP’s people have started taking life insurance as a financial investment
and it provides with the tax benefit under section 80C so many people prefer
to invest in ULIP plans.
Q1) what is your preference for Any Financial Investment? (Please Rank)
A) Bank Fixed Deposits B) Company Fixed Deposits
C) Share D) Mutual Funds
E) Real Estate F) Gold/ Silver
G) Insurance Cover- Life H) Insurance General- (Non Life/life
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From the above question it is very much clear that 1st preference of many
people for any financial investment is Life Insurance (ULIP’s Plan) and Mutual
Funds the reason behind this is that growing market and economy and now days
they are the best option as there are numerous plans in the market with pleasing
feature like Tax Benefit, SIP, STP etc.But for people who would like to invest a
large amount they still prefer investing in real estate.
The elder people still prefer to invest in bank fixed deposit or company fixed
deposit on which they can trust and they have been dealing with them in past as
they are not much aware of mutual fund and ULIP’s Plan .
Mostly females preferred to invest in gold and silver as they find it easy to buy
as a financial investment.
And they were 12% people whose 1st preference was investing in share’s they
were those people who could analyze the share market with time.
Basically for any financial investment people’s preference depend on the
amount he has to invest, the time period for which he has to invest and off
course on its risk appetite.
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Q2) what do you think of Life Insurance primarily?
B) As a risk cover B)As an investment
C) As a mixture of both D) any other…………
From the above Pie Chart it very much clear that most of the people take up
life insurance as mixture of both risk cover and investment because before
the launch of ULIP Plan there were many plans in which u can invest and
after its maturity or on some uncertainty the insurer or its family gets the
sum assured. 25% of people take up life insurance as a investment because it
provides with tax benefit and upon that by investing in ULIP’s one can earn
higher returns such people were already have other life insurance policy
which was taken up for the risk and they now invest in life insurance as an
investment. there were few people who has taken up life insurance as a risk
covering policy and for there financial investment they prefer other option.
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Q3) what are the important features of an insurance investment for you?
(Please Rank)
A) Safety B) Liquidity
C) Growth D) Insurance risk for self
E) Insurance risk for family member’s F) Income tax saving
G) Risk against theft (General Insurance) H) Premium amount
I) Money back J) Service rendered
K) Ease in payment L) Responsiveness
M) Online details
N) Availability of a Company Representative in need
Important feature for Insurance investment
0%5%
10%15%
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7
Safety Liquidity
Growth Insurance risk for self
Insurance risk for family IncomeTax Saving
Risk against theft Premium amount
Money back Service renderd
Ease in payments Responsiveness
Online details Availability of a Company Representative in need
From the analysis of the above question the most important feature which
people prefer in any insurance investment are the service rendered by that
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insurance company ,availability of a representative in need ,Premium
amount, the tax saving factor in there scheme’s. There were many people
who opted there 1st preference as safety and growth of there money.
Basically everybody’s 1st three or four preferences were these only as
anyone investing in life insurance judge the policies on these parameter’s
because other things are secondary one can compromise on other factor’s but
these are the most important features which customer’s require in the
policies before investing in them .
The most important feature which almost every people consider an the most
important feature which affects its performance is the service rendered and
the premium amount as the USP of any policies lies in the service’s which
they provide and the USP only takes it to the first position because now days
there is a cut throat competition everywhere to create a market for one’s
product they should be able to retain its customers and create new customers
with there USP’s.
Q4) whom do you rely on before buying an insurance policy? (Please Rank)
A) Self (through comparison of various policies)
B) Self (through comparison of various companies)
C) Agent
D) Parents/ Elders
E) Past experience with the company
F) Friends
G) Spouse
H) Company advertisement
I) Any other (Please specify…………….)
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While deciding upon buying an insurance the most important factor which
affects is the past experience of the company or the policy .If a customer had
a bad experience in past like delay in its services, late settlements of claims
etc. Then this will surely hampers its present performance as that customer
will not invest with that company again and will discourage others to invest
so through the survey the first and the foremost factor which the buying of
insurance is the customer’s past experience with that company.
Now days as there is lot of competition people do self comparison of
different insurance companies and its policies before buying one. And before
buying a policy a customer consult many other people and they may change
his mind if they think he has some better option or they have invested in
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better option .therefore there are many factors but the past experience affects
a lot so one should try his level best to satisfy its customers and there needs
so that they convince other’s also to invest and he also retained.
Q5) If you rely on an insurance agent please rank the following attributes
you look for in him/ her?
A) Product knowledge B) Competitive knowledge
C) Attitude/ Agreeability D) Ability to calculate my
insurance needs
E) Ability to communicate well F) Responsiveness
G) Familiarity H) Confidence
I) Any other (Please specify….)
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Attributes in an agent
0%
5%
10%
15%
20%
25%
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Rank 8
Product Knowledge Competitive Knowledge
Attitude/Agreeability Ability to calculate my Insurance needs
Ability to communicate well Responsivenss
Familarity Confidence
A customer expects at least an agent should have enough product knowledge
and should have the capability to communicate well to its customers as there
should be no confusions into customers mind everything should be clear to
him so that he can take suitable decision .An agent is also expected that he
should be able to calculate its customers insurance needs and should have
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competitive knowledge and is expected to prove its product better than its
competitor’s so that the customer is convinced to buy his product .
An agent should have confidence in whatever he tells his customers as he is
the one who is introducing them to the company and its products.
Basically one should be able make his customer understand his product and
all its features and should prove it to be better that other’s.
Q6) Do you think you will like to buy an insurance policy after scrutinizing
features online?
Yes No
How many people prefer to buy Insurance after screening its feature online
No of people, Yes, 6, 15%
No of people, No, 34, 85%
Yes No
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Now as we are into 21st century and where India has progressed a lot.
Computer’s and internet is available in the remote parts of the country then
also there are very few people who would prefer to invest after screening the
feature of an Insurance investment online .Now also more that 85% people
included in this survey prefer that a representative or an agent should come
and explain as they trust word of mouth more or than there eyes.
Customer’s think that by having a face to face conversation he will be able
to understand more and clear all his doubts which he may not be able to
clear through net even through live chat’s which are now days available .so
most of the people feel comfortable with the old trend rather than adapting
the new one.
Q7) how do you think you will like to pay premiums? (Please rank)
A) Deposit Cheques in insurance company’s office.
B) Deposit Cheques in collection boxes .
C) Agent comes to collect cheque.
D) Online payment through credit card .
E) Automatic debit through bank account.
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Customers most prefered way of payment
0%
10%
20%
30%
40%
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
Deposit Cheques in insurance co office Deposit Cheques in collection boxes
Agent comes to collect cheque Online payment through credit card
Automatic debit through bank account
Now days also most of the customer’s prefer to pay there insurance
premium by either depositing it in the insurance company office or they
want an agent should come to collect it from them but there are many other
ways where it could be paid very easily through credit card but it was not the
1st preference of many people .
There are people who have time problem so they prefer to either automatic
debit from there account or by payment through credit card.
Basically people according to there comfort prefer to pay in whatever they
feel easy.
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Q8) what is your preferred premium payment frequency? (Please tick one)
A) Monthly B) Quarterly
C) Half Yearly D) Yearly
People's prefered payment Frequency
Monthly, 4, 10%
Quaterly, 8, 20%
Half yearly, 8, 20%
Yearly, 20, 50%
Monthly Quaterly Half yearly Yearly
Basically most of the customer’s prefer to pay there premiums annually
because they feel it is easy as they don’t have to make payment very
frequently and there are many other bills etc . Which they have to pay
monthly or quarterly .but there were few people for prefer to pay half
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yearly ,quarterly or monthly because they said its difficult to pay it in
lumsum.
Q9) what is your preferred time period of insurance? (Please tick one)
A) 1 year B) <5year
C) 5 to 10 year D) 10 to 15 year
E) >15 year
Prefered time period of Insurance
1 year, 3, 8%
< 5 years, 11, 27%
5 to 10 years, 12, 29%
10 to 15 years, 9, 23%
> 15 years, 5, 13%
1 year < 5 years 5 to 10 years 10 to 15 years > 15 years
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BIBLOGRAPHY
Books:
Barley, Fundamental of investment, pearson third edition
Haugen, Morden investment theory, pearson sixth edition
Mathew,M J, Fundamental of insurance, Tmh second edition
Web sites:
www.reliancelife.com
www.reliance.com
www.icici.com
www.irdaindia.org
www.indiacore.com
www.maxnewyorklife.com
Magazines:
Insurance Plus
Business India
Economic Times
Material provided by the company
Survey
Search Engines:
www.google.com
www.yahoo.com
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