basics of insurance and people awareness towards birla sunlife insurance

LOVELY PROFESSIONAL UNIVERSITYDEPARTMENT OF MANAGEMENT

Report on Summer Training

“Basics of insurance and people awareness towards Birla sun life insurance.”

……………………………………..Submitted to Lovely Professional University

In partial fulfillment of theRequirements for the award of Degree of

Master of Business Administration

Submitted by:Ramanpreet Kaur

University Roll No.11002694A31

DEPARTMENT OF MANAGEMENTLOVELY PROFESSIONAL UNIVERSITY

JALANDHAR NEW DELHI GT ROADPHAGWARA

PUNJAB

CERTIFICATE OF ORIGIN

This is to certify that Ms Ramanpreet kaur, a student of Post Graduate Degree as MBA,

of Lovely professional university has worked in Birla Sun Life insurance co, under the

able guidance and supervision of Mr. Hardeep singh, Manager of agency of Birla Sun

Life Insurance. The period for which she was on training was for six weeks, starting from

25/06/2011 to 08/08/2011.

This Summer Internship report has the requisite standard for the partial fulfillment the

Post Graduate Degree in International Business. To the best of our knowledge, no part of

this report has been reproduced from any other report and the contents are based on

original research.

Signature Signature

(Faculty Guide) (Student)

ACKNOWLEDGEMENT

I would like to extend my sincere thanks to Birla Sun Life Insurance Company for

providing me an immense opportunity for undertaking research in their esteemed

organization and providing me with continuous support and guidance which was vital for

the successful completion of the project.

I would like to take this opportunity to express my gratitude to my project guide, Mr.

Tribhuwan sharma, Branch development manager, for a significant contribution

made by him towards my learning, by way of making himself available, providing leads

in course of the project and most importantly for the tremendous source of

encouragement and inspiration he has bestowed on me throughout the project.

I express my sincere gratitude to Mr. Alok kumar jha, Branch Manager of Birla Sun

Life Insurance, Nawanshahr, and also our training officer Mr. Hardeep singh for their

timely guidance and in providing the required facilities and information for completing

the project.

I also want to take this opportunity to express my sincere gratitude to my faculty member,

Mrs. Ashima kalia, who guide and encouraged me throughout the project.

Your’s sincerely,

Ramanpreet Kaur

Table of contents

SR. NO. PARTICULARS

EXECUTIVE SUMMARY

CHAPTER –I :LIFE INSURANCE

1.1 INTRODUCTION

1.2 POTENTIAL OF LIFE INSURANCE BUSINESS IN

INDIA

1.3 LIFE INSURANCE

1.4 OBJECTIVES

1.5 ADVANTAGES

1.6 FUNCTIONS

1.7 CONTRACT FOR INSURANCE

CHAPTER-II: COMPANY PROFILE

2.1 IRDA- REGULATORY

2.2 PRIVATE PLAYERS

2.3 BIRLA SUN LIFE INSURANCE

2.4 SWOT ANALYSIS OF COMPANY

CHAPTER-III :UNDERWRITING AND RISK MGT

3.1 UNDERWRITING

3.2 CLASSIFICATION OF RISK

3.3 RISK MANAGEMENT

3.4 INSURANCE RISK MANAGEMENT

CHAPTER-IV: BRANCH OPERATIONS

4.1 UNDERWRITING GUIDELINES

4.2 POLICY ISSUING PROCEDURE

4.3 CLAIM SETTLEMENT PROCESS

CHAPTER-V : HOW TO SELL INSURANCE POLICY

5.1 SALES PROCESS

CHAPTER-VI : PEOPLE AWARENESS TOWARDS BSLI

CHAPTER-VII : FINDINGS AND SUGGESTIONS

7.1 Findings of the Study

7.2 Suggestions

EXECUTIVE SUMMARY

Life insurance is a contract for payment of a sum of money to the person assured on the

happening of the event insured against. Life insurance is universally acknowledged to be

an institution, which eliminates 'risks', substituting certainty for uncertainty and comes to

the timely aid of the family in the unfortunate event of the death or of total permanent

disability of the breadwinner. By and large, life insurance is civilization's partial solution

to financial uncertainties caused by untimely death.

I got an opportunity to complete my summer training in BIRLA SUNLIFE INSURANCE

Company to learn about the working of insurance company. I personally chose this

industry and this particular company because I want to work in this sector and Birla Sun

Life insurance co is a reputed insurance company. I have been assigned a project related

to the survey regarding the customer satisfaction level towards the company (BIRLA

SUNLIFE INSURANCE ). In addition to this I want to get knowledge about the basics of

insurance, working of insurance, operations at branch level, risk management process,

etc. I have completed my project I have presented all the data and its analysis in this

project. In my survey I made an attempt to determine the presence, strength, and

strategies adopted by various life insurance companies.

The objectives of this study are as following:

To get knowledge about the basics of insurance.

To know that how insurance works and different benefits and functions of life

insurance.

To know about the underwriting process and risk management process.

To know the operations at branch level or process of selling the insurance policy.

to know the customer satisfaction level and their perception regarding BIRLA

SUNLIFE INSURANCE.

I have to study the rural people’s awareness regarding the birla sun life

Insurance. .

Scope of Research

Primary data:

A questionnaire was drafted. The questionnaire contains 12 questions which helps us to

analyze the public who aware of the co or perception of public towards private insurance

company i.e, birla sun life insurance company. It will also clearly show the customers

perception towards insurance compared with the other investment options and financial

instruments, and as to how we can make it better.

Secondary data:

The secondary data was collected through the web sites of different organizations, news

papers and weekly journals of the Birla sun life company. The secondary data is collected

through the Websites related to insurance sectors, Journals & Books on Research

Methodology.

I conducted this study to know the various benefits given by life insurance companies to

the customers, to determine the policy, which is considered to be most popular by the

rural customers, to know the scope of as an investment opportunity and to know the

priority of people while selecting different Saving Schemes, to calculate the rural

customer satisfaction level regarding the policies and toward companies, to calculate the

percentage of the population insured and those interested in getting insured.

During my study I faced some limitations and I mentioned it in the project. The main

limitations of my study is sample size is limited to 100 respondents, so complete

knowledge about subject is not possible. The study is to be limited to the villages of

Nawanshahr District only because of limited time and financial resources. So results of

the study may not be generalized for India as a whole. Human weaknesses such as

inattentiveness cannot be ignored. People generally considered me as an insurance agent

and tried to avoid discussions with me. Another factor could be the existence of biasness

in the respondents mind. Many times, these biasness have greater bearing on the

responses put forward by respondents.

I presented all the data based on questionnaire filled up by me from the peoples of rural

area and I analyzed the data and presented it in the project. I visited ALIPUR village,

SOFI PIND,KASAM PUR, NAWANSHAHR of nawanshahr region and filled up the

questionnaire from the general public to know the awareness level towards the BIRLA

SUNLIFE INSURANCE Company.

This study is very useful for the company to know the satisfaction and awareness level of

the customers and the peoples of rural area. The main aim behind the project is to provide

the data to the company so that they can focus on these areas to expand their business.

As far as the scope or research of the study is concerned, An exploratory research was

carried out through questionnaire for which a stratified sampling technique was adopted

and a sample size of 100 individuals was taken. A questionnaire was drafted to analyze

the dependence of type of insurance policy required, on the life cycle stage of the

individual. It will also clearly show the customers perception towards insurance

compared with the other investment options and financial instruments, and as to how we

can make it better.

Both qualitative and quantitative techniques were applied but this study heavily relied on

qualitative technique and it was proven that the life cycle stage of an individual is an

important determinant for deciding the type insurance policy required by the individual.

Conclusion of the study is that till today a large portion of population is unaware of

various insurance plans, these include uneducated and less educated people. Therefore,

the Private sector insurance companies should focus on improving awareness and the

increase the understanding about insurance plans thus increasing their scope of sale. I

would like to suggest that BIRLA SUNLIFE INSURANCE Company should try to create

awareness among rural people about their company. BIRLA SUNLIFE INSURANCE

should cover rural areas, as they are also the segment of population not aware of the

advantages of policies. BIRLA SUNLIFE INSURANCE should do efforts to promote the

brand name and create awareness through channels such as advertisements

more.Company should focus on introducing the plans for lower income group or middle

class people.

CHAPTER : 1INTRODUCTION TO LIFE INSURANCE

INTRODUCTION

No one likes to think about the bad things that can happen to them, but for many people,

unexpected shocks are a daily threat. Low-income families are particularly vulnerable to

potential losses from a host of situations and may be ill-prepared to cope financially with

their negative impact. Small and frequent shocks, such as children’s illnesses, may only

have short-term impact, while more significant events, such as the destruction wrought

by natural disasters or the death of an income earner, can bring financial ruin. Such crises

wipe out the hard won gains painstakingly accumulated over time. As families go deeper

into debt and/or sell assets to pay their unexpected expenses, their climb out of poverty

can easily be thwarted.

With such a large population and the untapped market area of this population

Insurance happens to be a very big opportunity in India. Today it stands as a business

growing at the rate of 15-20 per cent annually. Together with banking services, it adds

about 7 per cent to the country’s GDP. In spite of all this growth the statistics of the

penetration of the insurance in the country is very poor. Nearly 80% of Indian

populations are without Life insurance cover and the Health insurance. It was due to this

immense growth that the regulations were introduced in the insurance sector and in

continuation “Malhotra Committee” was constituted by the government in 1993 to

examine the various aspects of the industry. The key element of the reform process was

Participation of overseas insurance companies with 26% capital. Creating a more

efficient and competitive financial system suitable for the requirements of the economy

was the main idea behind this reform. Since then the insurance industry has gone

through many sea changes .The competition LIC started facing from these companies

were threatening to the existence of LIC. Since the liberalization of the industry the

insurance industry has never looked back and today stand as the one of the most

competitive and exploring industry in India. The entry of the private players and the

increased use of the new distribution are in the limelight today. The use of new

distribution techniques and the IT tools has increased the scope of the industry in the

longer run.

POTENTIAL OF LIFE INSURANCE BUSINESS IN

INDIA

India’s life insurance market has grown rapidly over the past six years, with new business

premiums growing at over 40% per year. The premium income of India’s life insurance

market is set to double by 2012 on better penetration and higher incomes. Insurance

penetration in India is currently about 4% of its GDP, much lower than the developed

market level of 6- 9%. In several segments of the population, the penetration is lower

than potential. For example, in urban areas, the penetration of life insurance in the mass

market is about 65%, and it’s considerably less in the low-income unbanked segment. In

rural areas, life insurance penetration in the banked segment is estimated to be about

40%, while it is marginal at best in the unbanked segment. The total premium could go

up to $80-100 billion by 2012 from the present $40 billion as higher per capita income

increases per capita insurance intensity. The average household premium will rise to Rs

3,000-4,100 from the current Rs 1,300 as will penetration by the existing and new

players. India’s ratio of life insurance premium to its GDP is around 4 per cent against 6-

9 per cent in the developed world. It could rise to 5.1-6.2 by 2012 in tandem with the

country’s demographic profile. India has 17 life insurers. Life Insurance Corp. of India

dominates the industry with over 70 percent market share, though private players have

been growing aggressively. Considering the world’s largest population and an annual

growth rate of nearly 7 per cent, India offers great opportunities for insurers. US based

online insurance company ebix.com plans to enter the Indian market following

deregulation of its insurance sector. Online insurer, ebix.com’s expansion into India is a

major step for the company to become a global supplier of internet-based insurance tools

for consumers and insurance professionals. In a diverse country such as India it is

imperative that a universal insurance infrastructure be created to maximize efficiency in

the insurance industry. Online insurer ebix.com can offers the Indian market a business-

to-consumer internet portal where consumers have more choice while purchasing

insurance and an internet-based agency management system that will help agents work

more efficiently with multiple carriers. Foreign holding in Indian insurance companies is

limited to 26 per cent. The government wants to increase the cap to 49 percent, but its

communist allies oppose such a move. The market is moving beyond single-premium

policies and unit linked insurance products which are easier to sell. The agency model is

the dominant sales channel accounting for more than 85 per cent of fresh premiums but

overall inactivity and attrition is much higher at 50-55 per cent than the global average of

25 per cent. Opportunities include health insurance and pensions, the report said, adding

only 1.5-2 percent of total healthcare expenditure in India was currently covered by

insurance.

A life insurance policy covers one’s personal self. Unlike with general insurance, it is not

like insuring a vehicle. Having said that, if we consider that India’s population is over

one billion and growing, we get a picture of the true potential of the life insurance sector

in India. LIC has been in business for 50 years now and has not covered the entire

population base yet. About 250 to 300 million Indians are still insurable. LIC has issued

about 120 million policies till now, with new premium income of US$ 1 billion. Its assets

have been estimated at $37 billion and in the last quarter it reported a 60 per cent growth

in new business. LIC’s business is growing at the rate of 20 per cent every year. That is

the kind of potential one is talking about in life insurance in India. It would not be wrong

to say that a lot of the advantage of advertising by new private sector insurance

companies has by default gone to LIC. While they have created a lot of awareness

through private insurer’s advertisements, LIC has benefited. Why? Because LIC has a

much wider branch network, and buyers are surer of LIC because it has been in existence

for long; they are more comfortable about its safety.

LIFE INSURANCE

Life insurance is a contract for payment of a sum of money to the person assured (or

failing him/her, to the person entitled to receive the same) on the happening of the event

insured against. Usually the contract provides for the payment of an amount on the date

of maturity or at specified dates at periodic intervals or an unfortunate death, if it occurs

earlier. Among other things, the contract also provides for the payment of premium

periodically to the Corporation by the assured. Life insurance is universally

acknowledged to be an institution, which eliminates 'risks', substituting certainty for

uncertainty and comes to the timely aid of the family in the unfortunate event of the death

or of total permanent disability of the breadwinner. By and large, life insurance is

civilization's partial solution to financial uncertainties caused by untimely death.

OBJECTIVES OF INSURANCE

There are many reasons for investing in life insurance policies, such as:

1.) Protection for the Family

The most important objective of life insurance is to provide financial protection for the

family in case of an unexpected and premature death of its breadwinner. The purpose is

to protect the dependents against the loss of earning power of the insured through death

or disability. Those who have insured their lives for an adequate sum can live in peace

and comfort, free of the gnawing worry of what would happen to their families in the

event of their sudden and premature death. Life insurance has long been recognized as a

necessary and essential element in a family’s total financial program.

2.) Regular Savings

Saving is not a physical need, unlike hunger or sleep. Many of us may not save unless

there is compulsion to do so. For such people, life insurance is a compulsory, regular

savings scheme, especially the monthly salary savings schemes.

Even if you do not subscribe to the salary savings scheme, you can issue standing

instructions to your bankers to pay the premium regularly without reference to you.

The element of savings in a life insurance contract should be understood in a proper

perspective. Typically, life insurance is made available on the basis of equated periodical

payments. In the initial years, you tend to pay more compared to the risk factor. Strictly,

speaking, the 'savings' aspect in a life insurance policy should not be compared with other

pure savings media.

3.) Tax Benefits

There is a tax rebate under Section 88 on life insurance premium. Many investors,

especially those in higher tax brackets, used to buy life insurance mainly to take

advantage of these tax benefits. Additional tax benefits are available under Section 80DD

and Section 80CCC applicable to specific schemes. Hence, attractiveness from the tax

angle has come down.

ADVANTAGES OF LIFE ANSURANCE

1. Protection against risk of untimely death.

2. Protection during old age

3. Forced savings

4. Educational requirements and charity

5. Nomination and assignment

6. Marketability and suitability for borrowing.

7. Loans from the Insurance Company

8. Tax benefits

9. Protection to wife and children

IMPORTANCE OF INSURANCE

A) Beneficial to an individual

Insurance provides security and safety. In case of life insurance payment is made

when death occurs or the term of insurance is expired.

Insurance affords peace of mind. A sense of security removes all tensions and

fears. It stimulate to more and better work. By means of insurance much of the

uncertainty that centers round the modern life may be eliminated.

Insurance eliminates dependency. The insurance provides adequate amount to the

dependents at the early death of the property owner to pay off the unpaid loan.

Insurance eliminated dependency. In the event of death of the bread winner of the

family or destruction of property, the family suffers a lot. The insurance assists

the family and provides adequate amount at the time of need.

Life Insurance encourages saving. Systematic saving is possible because Regular

premium are required to be compulsorily paid. Unlike bank deposits the deposited

insurance premiums can not be withdrawn. Life Insurance is the best media of

saving.

Life Insurance provides profitable investment. The elements of Investment i.e.

regular saving capital formation and return of the capital are observed in life

insurance. In India in insurance policies carry the exemption from the income tax

and estate duty.

Life Insurance fulfills the needs of a person. The need of a person may be divided

into (i) Family needs, (ii) old age needs, (iii) re-adjustment needs and (iv) special

needs including needs for education, marriage settlement of children etc. (v) clean

up funds for ritual ceremonies, payment of taxes etc.

B) Beneficial to Business

Insurance has been useful of the business society in more than one way.

It reduces uncertainty of business losses. As a huge number of properties are

employed in commerce and industry equally great risks are involved in day to day

functioning. The owner of the business might foresee contingencies that would

bring great loss. By purchasing a policy he can be sured of his earnings.

Business efficiency is increased with insurance. A businessman gets free from

unnecessary botherations and can devote more care and energy to maximize his

profits.

Keyman indemnification. Persons having expertise, experience, ability to

control the business are most important for the employers. Death of such persons

proves a more serious loss then that by fire. The compensation to the dependents

of such employers requires adequate provision which can be met by purchasing

life policies.

Addition in credit. The business can obtained loan by pledging the policy as

collateral security for the loan. As the assets are insured therefore, in the event of

loss the compensation can be paid.

Business Continuation. The partnership business may be discontinued at the

death of a partner. The insurance policy provide adequate funds at the time of

death therefore, the legal representative can be paid easily.

Employee Welfare. Provision for welfare for employees can be made by the life

insurance in case of accident or sickness benefit and pensions.

C) Beneficial to Society

Wealth of society is protected. Insurance provides loss of human wealth. Loss of

damage of property can also be indemnified by the insurance company.

Economic growth of the company. As insurance provides protection against loss

of property thus, if any such damage arise the assets can be replaced without loss

of production thus, Economic development of the country is not effected.

Accelerate the production growth. Adequate capital from Insurance Company

can accelerate production circle in the country. Economic growth of the country is

not only assured but the process of growth is accelerated which is more essential

in a country like India where the population is increasing very fast.

Reduction in inflation. The insurance company in the form of premium gets lot

of money supply from the public which insurance corporation put into production

thus the money which would have come into circulation might have gone for

productive purposes.

FUNCTIONS OF INSURANCE

PRIMARY FUNCTION

(i) Certainty of Compensation of Loss: -

Insurance provides certainty of payment at the uncertainty of loss. The element of

uncertainty is reduced by better planning and administration. The insurer charges

premium for providing certainty. Life is always full of risks. Life without risks and

uncertainties is unthinkable. Man has always encountered risks of various types since the

inception of civilization. Minor risks can be ignored but the major risks cannot be ignored

and their avoidance is desirable. One of the ways or techniques of meeting the risks loss

prevention and insurance. Insurance removes all uncertainties and the assured is given

certainty of payment of loss. The insurer charges premium for providing the said

certainty.

(ii) Insurance provides protection: -

The risk will occur or not, when will occur, how much loss will be there? There are

uncertainties of happenings of time and amount of loss. The main function of the

insurance is to provide protection against the probable chances of loss. The insurance

cannot check the happening of risk. The insurer gives certainty of payment of loss to the

assured by charging premium.

(iii) Risk sharing: -

Risk is uncertain and therefore, the arising from the risk is also uncertain. All business

concerns face the problem of risk and if the concern is big enough the handling of risk

become a specialized function. Risk and insurance are interwoven with each other.

Insurance, as a device is the outcome of the existence of various risks in our day to day

life. It does not eliminate risks but it reduces the financial loss caused by risks. Insurance

speeds the whole loss over the large number of persons who are exposed by a particular

risk.

SECONDARY FUNCTION

(i) Prevention of loss:

Prevention is always better than cure. Prevention of loss is by far the best solution to the

problem of risk. It is the most effective and cheapest method to avoid the unfortunate

consequences. By having the fire resistant construction, observing safety instructions,

installation of automatic sparker system etc. fore can be prevented. Similarly better roads,

better lights, and better traffic regulations automobile accidents can be prolonged. But

some times prevention of protection is not always possible and effective. When

prevention fails other methods must be adopted. The insurance joins hands with those

institutions which are actively engaged in preventing the losses of the society. Reduction

in loss causes lesser payment to the assured and so more saving is possible which will

assist in reducing the premium. Lesser premium invites more business and more business

in its turn results in lesser share to the assured. Reduced premiums stimulate more

business and more and better protection to the insured

(ii) It provides capital:-

It provides capital to the society. For planned development of a country there is great

need for huge amount of capital. The accumulated funds are invested in providing proper

infrastructure and in investing in productive channel. Now a day, the insurance

companies are rendering positive help in the development of trade, commerce, and

industries of a country through different scheme of investment. A country’s natural

resources can be exploited with long term and huge amount of investment by the

insurance companies.

(iii) Adequate Financial cover:

The need of insurance is largely felt to give a cover to the rural areas and to the socially

and economically backward classes with a view to reach all insurable person in the

country and provide them adequate financial cover against death at a reasonable cost.

(iv) Mobilization of Savings:

In insurance the savings of masses is collected by insurance corporations.

CONTRACT FOR INSURANCE

Life Insurance can be defined as a contract, where for stipulated considerations

called the premium the insurer agrees to pay the insured or a beneficiary, a

defined amount upon the occurrence of death or some other specified event.

A contract of insurance is a contract of utmost good faith, technically known as

‘Ubermiea fides’. The doctrine of disclosing all material facts is embodied in this

important principle, which applies to all forms of insurance.

The Proposer, who is one of the parties of the contract, is presumed to have means

of knowledge, which are not accessible to the Company, who is the other party to

contract. Therefore, the Proposer is bound to tell the insurer everything, which

might affect the judgments of the insurer, no matter how unimportant it may seem

to him. In all the contracts of insurance, the Proposer is bound to make full

disclosure of all material facts and not merely those, which he thinks material.

Misrepresentation, non-disclosure, or fraud in any document leading to the

acceptance of the risk automatically discharges the Company from all liability

under the contract the client loses out.

Insurable Interest

An Insurable interest is one of the most basic of all requirements in insurance & it

must be met for an insurance contract to be valid.

The Principle of Indemnity cannot be applied & does not apply to a Life

Insurance contract because of the difficulty of putting a monetary value on the

human life. However, here also Insurable Interest must be present to distinguish

the contract from a mere gamble.

The Insurable Interest must:

Be definite

Be capable of valuation

Be legally valid & subsisting

Involve a loss of a legal right

CHAPTER: 2COMPANY PROFILE

THE INSURANCE REGULATORY AND

DEVELOPMENT AUTHORITY.

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously stuck to its schedule of framing regulations and registering

the private sector insurance companies. Since being set up as an independent statutory

body the IRDA has put in a framework of globally compatible regulations. The other

decision taken simultaneously to provide the supporting systems to the insurance sector

and in particular the life insurance companies was the launch of the IRDA online service

for issue and renewal of licenses to agents. The approval of institutions for imparting

training to agents has also ensured that the insurance companies would have a trained

workforce of insurance agents in place to sell their products which are expected to be

introduced by early next year. Since being set up as an independent statutory body the

IRDA has put in a framework of globally compatible regulations. In the private sector

151ife insurance and 15 non-life insurance companies have been registered.

ENTRY OF PRIVATE PLAYERS

The introduction of private players in the industry has added to the colors in the dull

industry. The initiatives taken by the private players are very competitive and have given

immense competition to the on time monopoly of the market LlC. Since the advent of the

private players in the market the industry has seen new and innovative steps taken by the

players in this sector. The new players have improved the service quality of the

insurance.

The following companies are present in the Life Insurance Industry in India.

Bajaj Allianz Life Insurance Company Limited.

Birla Sun Life Insurance Co. Ltd

HDFC Standard Life Insurance Co. Ltd

ICICI Prudential Life Insurance Co. Ltd

ING Vysya Life Insurance Company Pvt. Ltd.

Life Insurance Corporation. of India

Max New York Life Insurance Co. Ltd

Met Life India Insurance Company Pvt. Ltd.

Kotak Mahindra Old Mutual Life Insurance Limited

SBI Life Insurance Co. Ltd

Tata AIG Life Insurance Company Limited

Reliance Life Insurance Company Limited.

Aviva Life Insurance Co. India Pvt. Ltd.

Sahara India Life Insurance Co, Ltd.

Shriram Life Insurance Co, Ltd.

Bharti AXA Life Insurance Company Ltd.

BIRLA SUN LIFE INSURANCE

Established in 2000, Birla Sun Life Insurance Company Limited (BSLI) is a joint

venture between the Aditya Birla Group, a well known and trusted name globally

amongst Indian conglomerates and Sun Life Financial Inc, leading international

financial services organization from Canada. The local knowledge of the Aditya

Birla Group combined with the domain expertise of Sun Life Financial Inc., offers a

formidable protection for its customers' future.

With an experience of over 10 years, BSLI has contributed significantly to the

growth and development of the life insurance industry in India and currently ranks

amongst the top 6 private life insurance companies in the country.

Known for its innovation and creating industry benchmarks, BSLI has several firsts

to its credit. It was the first Indian Insurance Company to introduce "Free Look

Period" and the same was made mandatory by IRDA for all other life insurance

companies. Additionally, BSLI pioneered the launch of Unit Linked Life Insurance

plans amongst the private players in India. To establish credibility and further

transparency, BSLI also enjoys the prestige to be the originator of practice to

disclose portfolio on monthly basis. These category development initiatives have

helped BSLI be closer to its policy holders' expectations, which gets further

accentuated by the complete bouquet of insurance products (viz. pure term plan, life

stage products, health plan and retirement plan) that the company offers.

About Aditya Birla Group

A US $30 billion corporation, the Aditya Birla Group is in the league of Fortune

500 worldwide. It is anchored by an extraordinary force of 130,000 employees,

belonging to 40 different nationalities. The group operates in 27 countries across six

continents – truly India's first multinational corporation.

Aditya Birla Group through Aditya Birla Financial Services Group (ABFSG), has a

strong presence across various financial services verticals that include life

insurance, fund management, distribution & wealth management, security based

lending, insurance broking, private equity and retail broking The seven companies

representing Aditya Birla Financial Services Group are Birla Sun Life Insurance

Company Ltd., Birla Sun Life Asset Management Company Ltd., Aditya Birla

Finance Ltd., Aditya Birla Capital Advisors Pvt. Ltd., Aditya Birla Money Ltd.,

Aditya Birla Money Mart Ltd, and Aditya Birla Insurance Brokers Ltd. In FY 2009-

10,

About Sun Life Financial

Sun Life Financial is a leading international financial services organization

providing a diverse range of protection and wealth accumulation products and

services to individuals and corporate customers. Chartered in 1865, Sun Life

Financial and its partners today have operations in key markets worldwide,

including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the

Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2011,

the Sun Life Financial group of companies had total assets under management of

$469 billion.

SWOT ANALYSIS OF BIRLA SUN LIFE

INSURANCE

Strength:-

Financial rating of companies

Flexibility of plans

Highly co-operative & skilled staff.

Sales oriented organization.

Aggressiveness of sales force in selling products.

The company has expertise in managing big business.

Effective and wider distribution network.

Product designed for each age group & every area of personal.

Birla Sunlife provide unique training program for insurance advisor called

product training

The company enjoys a very high brand loyalty & recall value among its

customer.

The company has a presence in all metros as well as in most of the major cities

in country.

Weakness:-

Less coverage in rural areas.

Less staff

Lack in making follow – up.

Lack of corporate agent.

Lack of customer services.

Lack of promotional activities.

Opportunity:-

There is continuous growth in insurance sector and rural market is still

untapped.

People have started Turing towards private insurance sector as they know that

security and growth of money is better then another insurance company.

Government has also started investing in private insurance sector.

Market is fully to capture because the branch has recently set up its business

so there is growth chances in the Kota market.

Threats:-

Competition in insurance sector is increase sing with the entry of private giants

like HDFC Standard life , Tata - Aig , Bajaj Allanze, Sahara, Gic, LIC etc.

Continuous follow up of the client and customers by the other insurance

companies.

As LIC has strong market position so it is little bit difficult to capture the market.

Customer is still find risky to place its money in private insurance sector.

CHAPTER :3UNDERWRITING & RISK MGT

UNDERWRITING:

To get an insurance cover, one has to send an application, which is called proposal form.

After receipt of proposal form, risk cover is not granted automatically, but decision by

the underwriter is taken on it. Whenever any proposal is received, its risk is to be

assessed & after verifying the level of risk, new entrants case is admitted for selection &

this assessing of risk is called underwriting. Any wrong assesment of risk of new

proposal can mislead the company for not charging the appropriate premium. The lower

charging of premium will ultimately effect the solvency of funds of the insurer. The cost

of additional risk, not recovered from the proposer would have to be borne by the rest of

the policyholder. If an underwriter finds that the individual proposed to be insured has no

adverse features, the risk is considered as normal or standard or first class life. Oterwise

the proposal is accepted by the uunderwriter on different terms. In some cases the insurer

may also refuse to entertain the case.

Birla Sun Life Insurance (BSLI) is accustomed to ‘firsts.’ In the India market, they have

been the first to start multi-channel distribution, including Banc assurance and Group

distribution. They were the first to offer a free trial period on all products. They were the

first to issue a policy across the counter within 30 minutes of application receipt and the

first to sell policies on the web. Now, they are the first to grow their underwriting

program 100% without adding underwriters. Early in 2005, BSLI made the strategic

decision to grow their market share through various new distribution methods. They were

confident in their ability to design products that fit their market and confident in their

marketing and distribution of those products. Having watched industry trends, they felt

poised for healthy growth. The question that lingered in their minds was in their ability to

handle the growing influx of applications. Would the benefits of their efforts result in

increased time to issue applications? Would it stress their underwriting department to the

breaking point? BSLI knew that it was time to implement an automated underwriting

system that would meet their current and future needs, either by building it themselves or

by partnering with an organization on the outside. BSLI objectives were simple:

• Improve underwriting efficiency to handle increased volumes of business with limited

increase in headcount

• Standardize and enhance the quality of underwriting decisions

• Allow underwriters to focus on complex cases

• Decrease the time it takes to launch new products by improving rules development and

administration

BSLI evaluated potential vendors based on software functionality, technology, vendor

credibility, post-sales service and support, implementation timeframe and total cost. After

their thorough review, BSLI chose RGA Technology Partners (RTP) to help them

integrate AURA into their underwriting process. AURA was built with the flexibility to

work with any existing administration system, so compatibility wasn’t an issue.

Birla Sun Life Insurance Gears Up for Growth Next-Generation Underwriting AURA

helps BSLI prepare for fully-underwritten new business. The scope of implementation

included all of BSLI’s existing life products and health products including all types of

riders. AURA needed to handle multiple application types, complete non-medical

underwriting, medical underwriting involving full medical reports, black box and

interactive underwriting using reflexive questioning. BSLI and RTP held a variety of

meetings to define project scope, requirements (business and technical) module testing,

customizations and more. An ancillary goal of BSLI was to be able to operate completely

independent from RTP soon after implementation. That would mean that administration

tool training and rules training would be an important part of the deliverables. AURA

went live at BSLI on November 11, 2005, seven months after the contract was signed.

The results were immediate. Non-medical underwriting was reduced from two days to

one day, with 50% of the applications approved almost immediately. The consistency of

the decisions was apparent, with anecdotal data to prove that BSLI had significantly

reduced their risk. The number of medical underwriters in-house remained the same

though the volume grew by 100%. Non-medical underwriting headcount was able to be

reduced by 70%. AURA’s response time was calculated at approximately 2 seconds per

case.

CLASSIFICATION OF RISK:

The factors affecting risk on the life of an individual are called hazards. Hazards may be

(i) physical (ii) occupational (iii) moral.

Physical hazards are:

Age : as age increases the probability of death increases. These probabilities are

built into the mortality tables and thereby into the premium rates.

Sex : mortality of female lives are seen more than male lives at younger ages,

among the poorer and uneducated sections.

Build : build includes height, weight,and the chest and abdoment measurements,

may suggest tendencies towards cardiac and other ailments like diabetes or tb.

Physical condition : the medical examination of reflexes ,blood pressure , pulse

rates ,urine etc provides data with regard to the condition of important system of

body.

Physical impairments : blindness, deafness, etc and other conditions ,which are

not illness , are hazards affecting the probalities of death

Personal history : this is important as pointers to the health as well as the life

style of person.

Family history : this is looked at to see weather there is any hereditary factor

that makes the person susceptible to illnesses.

Occupational hazards arise out of one’s job

The nature of the job oor the place in which the job is done have effects on the

worker.

Contact with or inhalation of fumes, excessive temperatures etc effects health and

life spans.

Those on flight duties on aircrafts run a greater risk of death by accident.

Those working in chemical fatries are likely victims of various respiratory

diseases.

The safety factor is important in heavy engineering factories, working at heights,

working with high speed machines, etc.

Moral hazards refers to the intention of the proposer.

If the proposal is being made because there is a genuine need for insurance, there

is no moral hazard. If the intention is to seek undue advantage through the

insurance policy, there is some moral hazards. Moral hazard is not measurable.

Underwriter would hesitate to accept such proposal at any cost.

Moral hazards can be suspected if proposer is old, has not been insured so far and

the proposal is for a large amount.

If the proposal is for the amount much larger than what the income would justify.

A large amount of insurance is proposed on the life of a family member while the

main earning members are not insured or are insured for relatively small amounts.

Data for underwriting:

The underwriter makes his decision on the basis of following:

The statement made by the proposer in the proposal form, which are assumed to

be correct, providing data about himself and the persn to be insured , habits and

family history.

Report of the medical examination

Report of the agent or other officials.

In case of large SA, the underwriter may ask for additional medical reports, or

from senior officials.

A report from the agent is must in all cases.

Risk management:

Risk management is a two-step process - determining what risks exist in an investment

and then handling those risks in a way best-suited to your investment objectives.  Risk

management occurs everywhere in the financial world. It occurs when an investor buys

low-risk government bonds over more risky corporate debt, when a fund manager hedges

their currency exposure with currency derivatives and when a bank performs a credit

check on an individual before issuing them a personal line of credit. The process of

identification, analysis and either acceptance or mitigation of uncertainty in investment

decision-making. Essentially, risk management occurs anytime an investor or fund

manager analyzes and attempts to quantify the potential for losses in an investment and

then takes the appropriate action given their investment objectives and risk tolerance.

RISK MANAGEMENT PROCESS

1. Risk Assessment:

After examining the data available, the underwriter will make a decision about the

level of risk in particular case. The underwriter need not to be actuary but would

be capable of interpreting data in the proposal papers in terms of risk. He may

avail of the assistance of doctors, who have been associated with life insurance

companies and have specialized knowledge about the effect of medical conditions

on mortality. The assessment of risk is mainly a matter of individual judgement.

Some insurers have developed guidelines on how to identify and interpret data,

which is significant to risks.

2. Risk analysis:

(i)Risk identification: Risk identification sets out to identify an organization’s

exposure to uncertainty. This requires an intimate knowledge of the organization,

the market in which it operates, the legal, social, political and cultural

environment in which it exists, as well as the development of a sound

understanding of its strategic and operational objectives, including factors critical

to its success and the threats and opportunities related to the achievement of these

objectives. Risk identification should be approached in a methodical way to

ensure that all significant activities within the organization have been identified

and all the risks flowing from these activities defined.

Hence, risk identification can start with the source of problems, or with the problem

itself.

Source analysis: Risk sources may be internal or external to the system that

is the target of risk management. Examples of risk sources are: stakeholders

of a project, employees of a company or the weather over an airport.

Problem analysis: Risks are related to identified threats. For example: the

threat of losing money, the threat of abuse of privacy information or the threat

of accidents and casualties. The threats may exist with various entities, most

important with shareholders, customers and legislative bodies such as the

government.

(ii) Risk description: The objective of risk description is to display the

identified risks in a structured format, for example, by using a table. The risk

description table overleaf can be used to facilitate the description and assessment

of risks. The use of a well designed structure is necessary to ensure a

comprehensive risk identification, description and assessment process. By

considering the consequence and probability of each of the risks, it should be

possible to prioritize the key risks that need to be analyzed in more detail.

Identification of the risks associated with business activities and decision making

may be categorized as strategic, project/ tactical, operational.

(iii) Risk estimation: Risk estimation can be quantitative, semi quantitative or

qualitative in terms of the probability of occurrence and the possible consequence.

For example, consequences both in terms of threats (downside risks) and

opportunities (upside risks) may be high, medium or low. Probability may be

high, medium or low but requires different definitions in respect of threats and

opportunities of risks. The use of a well designed structure is necessary to ensure

a comprehensive risk identification, description and assessment process. By

considering the consequence and probability of each of the risks, it should be

possible to prioritize the key risks that need to be analyzed.

Risk reporting threats and opportunities:

In this a report is prepared so as to find out the threats and opportunities which

can occur. In this consequences of incidents and the probability of its occurring

are determined. The consequences may be termed in qualitative terms such as

financial loss. It can also be expressed quantitatively. From this a level of risk

may be determined for each threat or hazard.

3. Risk evaluation:

When the risk analysis process has been completed, it is necessary to compare the

estimated risks against risk criteria which the organisation has established.The

risk criteria may include associated costs and benefits, legal requirements,

socioeconomic and environmental factors, concerns of stakeholders, etc. Risk

evaluation therefore, is used to make decisions about the significance of risks to

the organization and whether each specific risk should be accepted or treated.

4. Risk reporting and communication:

Reporting is done by 2 ways:

(i)Internal reporting

(ii)External reporting

In internal reporting is done to:

To know the most significant facing the organization

Ensure appropriate knowledge of awareness throughout the

organization

Know the organization will manage the crisis

know how to manage communications with the investment

community where applicable

understand their accountability for individual risks

Understand that risk management and risk awareness are a key part

of the organization’s culture.

In external reporting, a company needs to report to its stakeholders on a regular basis

setting out its risk management policies and the effectiveness in achieving its objectives.

Increasingly stakeholders look to organizations to provide evidence of effective

management of the organization’s non-financial performance in such areas as community

affairs, human rights, employment practices, health and safety and the environment.

USERS OF RISK MANAGEMENT

Risk Management practices are widely used in public and the private sectors,

covering a wide range of activities or operations. These include:

• Finance and Investment

• Insurance

• Health Care

• Public Institutions

• Governments

Effective Risk Management is a recognized and valued skill. Educational institutions

have formal study courses and award degrees in Risk Management. The Risk

Management process is well established. (International RM process standards.)

Risk Management is now an integral part of business planning.

ADVANTAGES OF RISK MANAGEMENT

To achieve the objective of the organisation

To ensure that the goals short term and long term are achieved without any

delay

To optimize the utilization of resources

To have knowledgeable insurance arrangements and have considered

decisions on insurances not to be availed.

Insurance Risk Management

Risk management is very important for insurance industry. Insurance means that

insurance companies take over risks from customers. Insurers consider every available

quantifiable factors to develop profiles of high and low insurance risk. Level of risk

determines insurance premiums. Generally, insurance policies involving factors with

greater risk of claims are charged at a higher rate. With much information at hand,

insurers can evaluate risk of insurance policies at much higher accuracy. To this end,

insurers collect a vast amount of information about policy holders and insured objects.

Statistical methods and tools based on data mining techniques can be used to analyze or

to determine insurance policy risk levels.

CHAPTER :4BRANCH OPERATIONS

UNDERWRITING GUIDELINES FOR BRANCH

OPERATION –

Understanding Underwriting

Underwriting refers to the task of identifying, selecting, classifying and assessing the risk

accurately so as to safeguard the financial well being of insurance company. It involves

making a decision to either accept or decline a proposed risk and is based on the

interpretation of the available medical and financial data.

Common Terms of Underwriting

• Insurable Interest – A person has an “insurable interest” in something when loss or

damage to it would cause that person to suffer a financial loss. The owner should not

profit out of the death of the life insured.

• Utmost Good Faith – Applicant has a legal responsibility to disclose to the best of his or

her knowledge any information requested by insurance company during the application

and underwriting process.

AURA or Automated Underwriting and Risk Analysis

• AURA is an underwriting software designed with an aim to achieve speed with quality

in arriving at underwriting decisions.

• The AURA Black Box would process applications based on the information available

and the rules set in the AURA engine and arrive at an underwriting decision. Cases which

get cleared through the AURA Black Box would not be handled by a human underwriter

at any stage and would be slotted for issue settle directly by the system.

AURA percentage can be improved by the following mentioned guidelines -

1. Age Proofs

• Get age proof self attested by the client

• Client’s signature on the age proof should tally with the sign done on the application

• Vernacular age proofs should be self – attested by the client and translated. The sign

and designation of the branch person who has translated should be indicated.

• Check whether DOB/Name/Surname in age proof is tallying with that in application

• Check authority signature and stamp on the age proof.

2. Existing policy information

Previous policy numbers with BSLI should be mentioned in the application form.

• First question of the application (Do you have an existing policy with BSLI)

• On the age proof column of the application (between DOB and gender)

3. IAR related

• Avoid overwriting/ use of white ink in any of the IAR questions

• All the questions should be answered

• IAR should be signed by the advisor and witnessed by one of the authorities as per the

application.

• Name of the client should be written on the IAR

• Any overwriting on the IAR should be authenticated by the AURA

4. Application signature and witness

Application should be signed by the client and witnessed by the advisor at the proper

place. In case the Life assured and owners are different in a major life application, then

both the Life assured and owner should sign the application form at the designated

places. In case of advisor’s or AM’s own application, it should be witnessed by higher

authorities eg IA’s own application will be witnessed by AM etc.

Financial Underwriting

• The basic purpose of Life Insurance is to compensate the dependent suffering from

financial loss in case of uncertain death or disability of the bread winner.

• Financial underwriting is an assessment of whether proposed sum assured and product

are reasonable when considering the potential financial loss.

• Need for Insurance and Capacity to Pay are the basis of Life Insurance. “A person

should never be more valuable dead than alive”.

Tools of Financial Underwriting

• Application form

• FIQ - duly completed and signed by the Life Assured

• Financial justification from the BH/RM

• Income Proof

Minor Lives -

Proposer allowed: Natural parents, Legal guardian, Parents who have adopted,

Grandparents (paternal as well as maternal), HUF. Insurable interest must be present.

Additional requirements:

• If Grandparent is the proposer, NOC signed by parents.

• If legal guardian is proposer, guardianship certificate is needed

• If the child has been adopted, Adoption deed is mandatory

Riders :

Only WOP (Death/ TPD/ CI)- if policy owner is a legal guardian/natural parent (father/

mother).

Note -

• Maximum amount of insurance permissible for minors is half of the cover existing on

parent’s lives.

• Financial decision would be based on existing family insurance, adequacy of parents

income.

Female Lives –

Women with earned income by virtue of employment (Gainfully Employed): Financial

underwriting rules would be the same as for male lives.

Women with unearned income (income from Property/Investments):

Widow Lives –

• Widows without any income: No insurance cover will be granted.

• Widows who have received compensation from employer of spouse : May be granted

insurance under investment plans, single premium plans.

• Widows with pension : May be considered for investment plans.

• Widows having own income : Gainfully employed women, financial underwriting as

per employed females.

Requirements –

Special Report from Branch Head/Relationship Manager – Mandatory for all widow

lives.

Details required in a Special Report:

• Realistic Income

• Sources of Income

• Active Participation in Business

• Need for Insurance

• Details of Family Insurance

Key Man Insurance -

• Copies of Memorandum and Articles of Association

• A resolution of board of directors intimating their desire to have a policy on the life of

the Key person named in the resolution and the amount and plan desired. It should also

state the name of an authorized signatory of the company who will sign the application

form.

• Key person Questionnaire signed by the key person and authorized signatory of the

company.

• Copy of audited accounts, profit and loss account and balance sheet of the company for

the last three years, duly certified by the company’s signatory and the Insurance advisor.

Financial Requirements -

• Individual income tax return of the key person.

• Consent for the endorsement to be placed on the policy.

Key Man under Partnership –

Only for active partners:

Key man insurance to partnership firm is allowed because active partners are the source

of profits to the firm and in the absence of such partners, there will be significant loss of

the firm. Documentation in this case will be different from key man proposal by a

company.

Financial requirements:

In case of key man partnership, there is no board resolution and memorandum as well as

article of association instead a supplementary partnership deed and letter incorporating all

the details of board of resolution signed by all the partners and the partnership deed.

Employer – Employee Insurance

There are two options available under the employer- employee insurance scheme.

Scheme 1: Employee is both the Life Insured and Owner of the policy

The Application should be accompanied by a letter from Employer stating that the

premium under the Policy will be paid by the Employer.

Scheme 2: Employer is the owner of the policy

Application will be signed by both the employee and the employer’s authorized officer as

life to be insured and owner respectively. The application should be accompanied by a

letter from the employer stating the following 3 clauses:

• Objective of Insurance

• That the employer would assign the policy to the Life Insured immediately on issue of

the policy.

• The letter shall form a part of the proposal.

Restrictions -

The employee should not have beneficial ownership in the employer company in excess

of 5%.

For ascertaining the limit of 5%, shareholding or ownership held by the concerned

employee, his/her spouse, children, parents, brother, sister or son-in-law/daughter-in-law

should be aggregated together.

Hindu Undivided Family (HUF)

• HUF is a joint family consisting of all persons lineally descended from a common

ancestor including wives and unmarried daughters. Hence, HUF can be defined as a

group of members of the same family.

• A single person, male or female, cannot constitute a Hindu undivided family.

• HUF consists of:- Karta , Co parceners

• In HUF cases no nomination/assignment is allowed. The policy is always the property

of the HUF

Underwriting Guidelines –

The sum assured in a HUF policy will be considered only on the basis of the income of

the HUF.

Individual income of karta/ co - parceners will not be taken into consideration for

granting any cover. A HUF addendum, duly signed and stamped by the Karta of the

HUF, should be submitted along with the application and should include the following

details:

• Name and age of the Karta

• Name and age of all co parceners and their relationship with the Karta

• Purpose of HUF

Details of all policies sourced through HUF. The application must be signed by the Karta

as the owner.

Partnership Insurance –

Partnership insurance is a concept developed exclusively for partnership firms to protect

it from the financial liability arising out of the premature death of a partner.

Financial Requirements:

• Copy of original and supplementary partnership deed.

• Consent letter to place an endorsement on the policy.

• Copies of Income Tax Returns for last 3 years

• Copies of latest Audited Profit and Loss Account and Balance sheet for last 3 years

• Statement showing capital amount of the partners.

Married Woman’s Property Act –

• Married Woman’s Property Act, provides that a policy of insurance effected by any

married man on his own life, and expressed on the face of it to be for the benefit of his

wife, & children, or any of them, shall ensure and be deemed to be a trust for the benefit

of his wife, or his wife & children, or any of them according to the interests so expressed,

and shall not, so long as any object of the trust remains, be subject to the control of the

husband, or to his creditors, or form part of his estate.

• Married Woman’s Property Act can be issued to all proposers resident in India

(excluding Jammu & Kashmir State).

• Beneficiaries: The person who can be beneficiaries under MWP Act policies are, the

wife alone, any one or more children alone, or the wife and any one or more children.

Underwriting Guidelines –

• The proposer is not residing in Jammu & Kashmir.

• The proposer is a married man or a widower or a divorced man.

• The policy is on proposer’s own life.

• Nomination and Assigment is not allowed.

• MWP addendum should be completed filled and signed.

POLICY ISSUANCE PROCEDURE

Policy form is received.

Documentation check.

KYC document check.

Age proof check.

Signature verify.

Full form checking.

Header entry in the system.

Receipt issued.

Scanning( AURA)

Courier send to head office.

CLAIM SETTLEMENT PROCESS:

All claims shall be assesed by HO by client services. All the documents other than the

birla sun life claim forms needs to be attested by branch head or relationship manager.

BSLI may also have an investigation made into the bonafide of any claim where it is

considered neessary.

Role of an advisor/ agency manager

on the receipt of claim from the claimant/beneficiary, arrange to submit the

“online claim notification form” duly completed to the HO.

Follow up with beneficiary of the life insured for the requirements, and arrange

for early submission of the same.

On receipt of the requirements, check the same for completeness.

All claim documents including the copy of the death certificate needs to be

attested by the branch head/ specified person.

Ensure all the questions in the forms have been replied, in the claimm forms

whenever there is a mention of documents attached/ reports attached confirm that

the said documents/ reports are duly attached.

Types of claims:

Death claim

Unnatural death claim

CI/ CI17 rider claims

WOP rider claims

AD&D/TPD claims

Mandatory requirements

1. Normal death claim:

The intimation of the death must reach HO through online claim notification form. The

advisor intimating the HO about the event must check that the intimation of event

received by them must satisfy two conditions. It must be from a proper person and must

establish beyond doubt the identity of the deceased person as the life insured under the

policy. The following are the requirements in case of a non-early death claim

Online claim notification form

Death certificate issued by muncipal authority/ gram panchayat in specified

format.

Original policy documents

Claimant statement

Discharge form

Legal evidence of title where there is no nomination, assignment or the policy

has not been issued under MWP act.

Early claims:

A claim is early when a policy has not completed two policy years during the lifetime of

the life assured or policy has been reinstated within two yearsprior to the death of the life

assured.

Claim requirements:

In addition to the requirement called for non early claim the following are the additional

requirements:

Last attending physician statement

Family physician statement

Certificate of treatment in hospital

Employers certificate(if employed)

Advisor confidential report.

2. Unnatural death claim:

If the death of the LA is for any reason other than natural or due to illness, it is termed as

unnatural death claim. In such cases, the following reports would give an indication of

whether the death was by accident or suicide or whether the LA was under the influence

of alcohal,etc.

Requirement for unnatural death claim:

In addition to the normal requirements for natural death claim the following additional

reports would be required in case of unnatural death claim.

FIR

Panchnama report

Police inquest report

Post- mortem report.

3. CI/ CI17 rider claims:

The critical illness rider pays the coverage face amount if the life assured is diagonosed

to be suffering from any one of the four/ seventeen illness specified and the life assured

survives the specified illnesess for a period of atleast 30 days from the date of diogonosis.

Claim requirements:

Critical illness claimentt statement

Family physician stattement

Hospital treatment certificate

Original policy documents

Copies of all medical reports pertaining to the illness

1. laboratory reports

2. histopathology reports

3. specialist reports

4. WOP rider claim:

On the happening of select insured events for which this rider has been purchased and on

approval of the claims by BSLI, co will waive all future premiums due subject to the

conditions specified in the annexure.

Claim requirements:

In addition to the normal requirements for an early claim the following report would be

required.

Deed of relinquishment

5. AD&D/ TPD claims:

This rider pays all or part of the face amount to the life assured if the life assured losses

certain specified body parts provided that all the following events take place:

Dismemberment occurs while the rider is in force

Due proof is filed with head office that dismemberment was caused solely by

external, violent and accidental manner.

Claim requirements:

FIR( if any)

Police inquest report (if any)

Questionnaire to be completed by the life insured claiming dismemberment

benefit

Questionnaire to be completed by the doctor / hospital which treated the life

insured for his injury/ dismemberment.

CHAPTER: 5HOW TO SELL INSURANCE POLICY??

Insurance is considered one of the most difficult products to sell. The sale is mostly push sales, driven by the sales agent/ employee. However, the companies spent a lot of money on advertisement and promotions.

BIRLA SUNLIFE INSURANCE SALE PROCESS

PROSPECTINGActively seeking individuals, who would benefit from your services. To sell the product our first target is to find out the individuals those are interested in taking up the policy. We can start our search as follow:-

Firstly , we can start from your family members. it can any member of your family, your spouse, children, parents

We can contacts with all your friends, relatives those are in your current contact or;

We can also contact with your old friend at college time, old job colleagues.

We can also use are email id facebook to inform your net friends.

If you are in a business you can contact with your old customers.

SEEKING APPOINTMENTSWhen you find out person who are interested in taking up a policy we can fix the appointment with them.

The is usually done over the phone.

In this step you tell him about your company, about your plan, and get information whether the person is interested in buying your product.

This is the first step towards your goal.

MEETING THE PROSPECTS:

If the person is interested for taking the policy we meet with the customer. This is the first formal face to face meeting with your future customer.

Our preparation decides yours chances of moving to the next stage. Advisor/agent should have following qualities;

he/she should be very confident, he should have all the knowledge about plans, about company, so he/she can easily give the answers of customer.

Advisor/agent having good communication skill at the stage,

Have good personality

IDENTIFYING PROSPECTS NEEDS There are different products of birla sun life insurance, according to the needs of customers. for example, Individuals plans and nri plans group and it is the responsibility of agent to identify the need of customer and give information about that policy and plan. BSLI is the company that provide demo to the customer how the policy perform. For example advisor give all the information that accrording to your needs that are the plans, this is interest rate. And if you are taking up a policy you get this much amount.

PRESENTING SOLUTIONS When advisor identify the needs of customer, by asking some question

o How many member they have

o Their income, dream of life

o Children

o Any health diseases on the basis of this advisor should what is the need of

customer and tell them about that particular policy. For example if a person have 2 child and he is a driver he wants to take up a policy that suit to their income. Than advisor tell him about only that plan that fulfil his needs as well as suit to his income.

CLOSING & REFERENT

When person is ready, to invest money in your insurance then, Advisor give him proposal form and ask for all the documents required. Proposal form is 4 page document that contain all the necessary information that are related to the insured and owner of the policy. Document required along with the proposal form.

Date of birth proof Address and id proof Income certificate Medical certificate only if insurer is a senior citizen.

SERVICING Now after the insurance is sold. All the requirements are completed. Advisors needs to maintain good relation with policyholder. Insurer further business with the exciting policyholder are satisfied with the services being provided by advisor of co. The BSLI always inform the policyholder by sending email or letter by post about their premium has received and their reaming premium and date at which you have deposit the money with BSLI.

CHAPTER: 6PEOPLE AWARENESS TOWARDS BIRLA

SUNLIFE INSURANCE

I presented all the data based on questionnaire filled up by me from the peoples of

rural and urban area and I analyzed the data and presented it in the project. I

visited alipur, kasampur, sofi pind, nawanshahr region and filled up the

questionnaire from the general public to know the awareness level towards the

BIRLA SUN LIFE INSURANC Company.

Te sample size is 100 and I analyzed the questionnaire filled up by the rural public

and I interpret the data. I presented it by graphs. This data is very beneficial for the

company to focus on these regions.

TOTAL NO. OF RESPONDENTS

Village Name No. of Respondents

ALIPUR 30

SOFI PIND 30

KASAM PUR 20

NAWANSHAHR 20

Total 100

Interpretation:-. From the above graph it is clear that 30 respondents belong to

ALIPUR, 30 to SOFI PIND, to 20 to and 20 to NAWANSHAHR. The total no. of

the respondents are 100.

1) Do you know about BIRLA SUN LIFE INSURANCE ?

No of

respondents

in %

ALIPUR SOFIPIND KASAM

PUR

NAWANS

HAHR

Yes 60% 56. 67% 15% 70 %

NO 40% 43.33% 60% 30%

Interpretation:

From the above graph it is clear that majority of the respondents are aware of

BIRLA SUN Life Insurance.

In Alipur only 60% respondents are aware of Birla Sun Life

Insurance and remaining 40% are not aware of it.

In Sofi Pind only 56.67% respondents are aware of Birla Sun Life

Insurance and remaining 67.50% are not aware of it.

In kasam pur only 15% respondents are aware of Birla sun Life

Insurance and remaining 85% are not aware of it.

In nawanshahr 70% respondents are aware of Birla sun Life

Insurance and remaining 30% are not aware of it.

Q2) Do you know what is life insurance?No of

respondents

in %

ALIPUR SOFIPIND KASAM

PUR

NAWANS

HAHR

Yes 80% 90% 57% 95 %

NO 20% 10% 43% 5%

Interpretation:

From the above figure it is clear that majority of the respondents know what is

Life Insurance.

In ALIPUR 80% respondents are aware of Life Insurance and

remaining 20%are not aware of it.

In SOFI PIND 90 % people are aware of life insurance and

remaining 10% all the respondents are aware of Life Insurance.

In KASAM PUR 53% respondents are aware of Life Insurance and

remaining 43% are not aware of it.

In NAWANSHAHR 100% respondents are aware of Life Insurance

and remaining are not aware of it..

Q3) What Kind of investment products you have?

Kind of

investment

Alipur Sofi

pind

Kasam

pur

nawansh

ahr

MF 3.33% 10% - 30%

PO 56.67% 60% 23.3% 60%

FD 23.3% 16.67% 6.67% 35

Saving A/c 86.6% 93.35 93.3% 95

Other 36.67% 20% 60% 15

Q4) Do you have life insurance policy?

No of

respondents

in %

ALIPUR SOFI

PIND

KASAM

PUR

NAWANS

HAHR

Yes 66.67% 73.33% 25% 45%

NO 36.67% 26.67% 75% 55%

Interpretation:

From the above graph it is clear that majority of the respondents have life

insurance.

In ALIPUR village 66.67% respondents have life insurance policy

and remaining 36.67% respondents haven’t any life insurance

policy.

In SOFI PIND 73.3% respondents have life insurance policy and

remaining 26.7% respondents haven’t any life insurance policy.

In KASAM PUR 25% respondents have life insurance policy and

remaining 75% respondents haven’t any life insurance policy.

In NAWANSHAHR 45% respondents have life insurance policy and

remaining 64% respondents haven’t any life insurance policy.

Q6) If yes, from which company?

Company ALIPUR SOFI PIND KASAM PUR NAWANSH

AHR

LIC 85% 95% 90% 98%

Bajaj Allianz 5% 0% 6% 0%

Birla sun life 8% 5% 0% 3%

ICICI Prudential 15% 6% 4% 5%

Other 25% 13% 2% 27%

Interpretation:

As we know that LIC is the oldest and Govt Company and majority of the

respondents have Life Insurance with LIC.

In ALIPUR 85% respondents have insurance with LIC, 5% with

Bajaj Allianz, 8% BIRLA SUN LIFE and 15% respondents have

insurance with ICICI Prudential.

In SOFI PIND, 95% respondents have insurance with LIC, 5% with

BIRLA SUN LIFE INSURANCE, 6% with ICICI Prudential.

In KASAM PUR 90% respondents have insurance with LIC,

6%with Bajaj Allianz and 4 % with ICICI Prudential.

In, NAWANSHAHR,98% people have insurance policy with lic.,

and remaining 5 % deposited in icici.

Q7) what kind of insurance/investment plan do you want to take?

Kind of Insurance

/Investment Plan

ALIPUR KASAM

PUR

SOFI

PIND

NAWANS

HAHR

Long Term 11% 15% 53% 22%

Short Term 89% 85% 47% 30%

Interpretation:

From the above graph it is clear that majority of the respondents would like to

invest in Long Term Plans.

In ALIPUR village 11% respondents want to take Long Term Plan

and 89% respondents are in the favor, of short term plans.

In SOFI PIND village 15% of respondents want to take Long Term

Plan & 85% want to take short term plan.

In KASAM PUR village 53% respondents want to take Long Term

Plan and 47% respondents are in the favor of short term plans.

In NAWANSHAHR village 22% respondents want to take Long

Term Plan and 78% respondents are in the favor of short term plans.

Q8) what is your basic requirement from your investment and

insurance plan? (Rank them)

Particulars ALIPUR SOFI

PIND

KASAM

PUR

NAWANS

HAHR

Liquidity 40% 20% 52% 65%

Security 50% 60% 45% 25%

Returns 90% 82% 75% 95%

Tax Benefit 25% 33% 15% 30%

From the above graph it is clear that most of the respondents buy insurance policy

for the purpose of good returns.

In ALIPUR 90% respondents buy insurance policy for the purpose

of good returns, 50% respondents have given preference to security,

40% each to liquidity and 25% respondents to tax benefits.

In SOFI PIND village 82% respondents buy insurance policy for the

purpose of good returns, 60% respondents have given preference to

security, 20% to liquidity and 33% respondent wants to tax benefits.

In KASAM PUR village 75% respondents buy insurance policy for

the purpose of good returns, 45% respondents have given preference

to security, 52% to liquidity and 15% respondents want to tax

benefits.

In NAWANSHAHR village 65% respondents buy insurance policy

for the purpose of good returns, 25% respondents have given

preference to security, 95% to liquidity and 30% respondents want to

tax benefits.

9) What are the purposes of your investment?

Particulars ALIPUR SOFI

PIND

KASAM

PUR

NAWANS

HAHR

Children Education 90% 75% 34% 70%

Child marriage 25% 45% 67% 17%

Returns/Profits 45% 65% 0% 30%

Retirement 37% 45 10% 37%

Business 0% 52% 0% 45%

Interpretation:

From the above graph it is clear in rural areas majority of the respondents would

like to make their investment in Children Education.

In ALIPUR village 90%respondents have made investment in

children education and 25% respondents made investments in child

education and 45%peole wants profit and only 37% for retirement.

In SOFI PIND, village 75% respondents have made investment in

children education or 45% in child marraige and 65% respondents

made investments for good returns & 52% respondents made

investments for business and only 45% for retirement.

In KASAMPUR village 34% respondents have made investment in

children education while, 67% people invest money for child

marriage and 22% for good returns and 10% for retirement and no

one for investment.

In NAWANSHAHR village 70% respondents have made investment

in children education, 30% for good returns and 45% for the purpose

of business.17% for child marriage and 37% for retirement.

Q10) Are you satisfied with your current investment plan?

No of

respondents

in %

ALIPUR S0FI

PIND

KASAM

PUR

NAWANS

HAHR

Yes 85% 90% 90% 92%

NO 15% 10% 10% 8%

Interpretation:

From the above graph we can conclude that most of the respondents are satisfied

with their current investment plan.

In ALIPUR village 85%respondents are fully satisfied with their

current investment plan and 15% are not satisfied with it.

In SOFI PIND village 90% respondents are fully satisfied with their

current investment plan and 10% are not satisfied with it.

In KASAM PUR village 90% respondents are fully satisfied with

their current investment plan and10% are not satisfied with it.

In NAWANSHAHR village 92% respondents are fully satisfied with

their current investment plan and 8% are not satisfied with it.

Q11) Do you about other plans offered by BIRLA SUN LIFE INSURANCE?

No of

respondents

in %

ALIPUR S0FI

PIND

KASAM

PUR

NAWANS

HAHR

Yes 5% 17% 0% 6%

NO 95% 83% 100% 94%

Interpretation:

From the above graph we can conclude that most of the respondents are satisfied

with their current investment plan.

In ALIPUR village 5%respondents said that they have knowledge

about the other plan providing by the company. But the majority of

people of this village have no such knowledge.

In SOFI PIND village 90% respondents said they have knowledge

only about one plan under which they invested their money and 17%

are aware about other plans

In KASAM PUR village no one is aware about other plan providing

by company.

In NAWANSHAHR village, only 6% respondents have knowledge

that company providing many other plans like NRI PLAN group

plan and time to time they company change plan or introduce new

plans.

Q 12) DO YOU THINK LIFE INSURANCE PROVIDES YOU LIFE TIME VALUE?

No of

respondents

in %

ALIPUR S0FI

PIND

KASAM

PUR

NAWANS

HAHR

Yes 90% 98% 90% 92%

NO 10% 2% 10% 8%

Interpretation:

From the above graph we can conclude that most of the respondents are satisfied

with their current investment plan.

In ALIPUR village 90%respondentsthink life insurance provide life

time value while 105 think oppositely.

In SOFI PIND village 98 respondents are more positive they think

yes life insurance provide security to our lives and only 2% people

are against of this.

In KASAM PUR village 90% respondents said yes that life

insurance provides life time value and on the other hand side, 10

percent said no.

In NAWANSHAHR village 92% view that life insurance provides

life time value while 8% said that insurance not provides life time

value. Because we cant withdrew money when we need. it.

Q 13) Do you think life insurance is better than other investments? For

example Saving account, FD, PO OTHERS.

No of

respondents

in %

ALIPUR S0FI

PIND

KASAM

PUR

NAWANS

HAHR

Yes 65% 98% 93% 88%

NO 35% 2% 7% 12%

Interpretation:

From the above graph we can conclude that most of the respondents are satisfied

with their current investment plan.

In ALIPUR village 65%respondentsthink life is better option than

other investment

In SOFI PIND village 98 respondents are more positive they think

yes life insurance is good than other investement because you get

almost double amount after a long period. 2% people are against of

this.

In KASAM PUR village 93% respondents said yes that life

insurance is better than other and on the other hand side, 10 percent

no because they feel there is same interest rate as in the banks

because bank

In NAWANSHAHR village 92% view that life insurance provides

life time value while 8% said that insurance not provides life time

value. Because we can’t withdrew money when we need. it.

CHAPTER :7

FINDINGS AND SUGGESTIONS

FINDINGS:

Birla Sun Life Asset Management Company has one of the largest team

of research analysts in the industry, dedicated to tracking down the best

companies to invest in.

There is a good relation exist between the employees and management. 

BSLI provides good welfare facilities.

The age groups of selected advisors are quiet encouraging. 53 % are over age of

55 years which is quite good for company because they much more trusted by the

prospect than the other age group.

Most of the selected advisors have a good qualification. Most of them are

graduate and post graduate.

All most 50% of the new advisors give full time to their profession. This shows

how new advisors are dedicated towards their new profession.

Employees wish to acquire skills through continuous training.

Selection is advisors in base on commission basis so there is always a

big possibility of extra income. Hard working advisors can earn more than

expectation, because there is no limit of earning. If advisors sell more policy he

can get more commission.

From the above study it is clear that majority of the respondent do not aware of

Birla sun life insurance. Even when I ask that you never see advertisement in the

T. V. they said, “no.” only few people know about Birla that is an insurance

company. All the people know about LIC.

People have knowledge about insurance but they don’t even know the interest

amount only few respondents those have knowledge about plan under which they

deposit there money.

Some people said they think there is no benefit of life insurance because when

they need money for some other purpose they can’t withdrew it and I saw 5 cases

who lost their money just because of they don’t have money at that time.

Majority of people said, it is better to deposit you money in the saving account

rather than depositing in the insurance company.

Mostly agent don’t give exact and true information and they even many agent sell

their policy of other company with the name of LIC.

Here I would like to add one case of village alipur, one respondent said, when

they took a policy agent said that you have to deposit 1lac 25 thousand annually

but after one year they come to know that you have to deposit your money

quarterly now you have to deposit 5 lac. They were shocked and talked with the

branch manager and he ask for that agent. They said they don’t have information

of such person. And they lost their 1 lac rupees.

From the above study it is clear that majority of the respondents know what is

Life Insurance.

It is clear from the above study that in rural areas, majority of the respondents

have made investments in Saving Accounts.

From the above study it is clear that majority of the respondents have life

insurance. And they invest money in the long term returns. But actually they are

not satisfied with this. They want short term returns period 5 year they said 10

year is a long period but there is benefit of deposit money in short term because

interest rate is less but after a long period they get almost double amount.

LIC is the oldest and government undertaking corporation so majority of the

respondents have Life Insurance with LIC.

From the above study it is revealed that most of the respondents buy insurance

policy for the purpose of child education and marriage and returns. But people in

the villages don’t take policy to safe their old age. Only few people who invest

money for retirement

From the above study it is clear in rural areas majority of the respondents would

like to make their investment in Children Education.

From the above study we can conclude that most of the respondents are satisfied

with their current investment plan. Because they don’t have other information

about other investments plans.

SUGGESTIONS:

Even though most of the policy holders are satisfied with policies, plans they have

but some new attractive insurance plans should be introduce to bind them not to

switch over to other companies insurance plans.

The company should find out the no. of people who are not having any of the

insurance plans through an intensive market research and motivate them to get

insured.

Leveraging technology to service customers quickly, efficiently and conveniently.

Developing and implementing superior risk management and investment

strategies to offer sustainable and stable returns to our policyholders.

Company should target each and every class of the society.

Company should provide full information to the customers before targeting so

they can take interest.

Birla sun life insurance should cover uneducated people, as they are not aware of

the advantages of the policies for tax savings.

Birla sun life insurance should cover rural areas, as they are also the segment of

population not aware of the advantages of policies.

Birla sun life insurance must conduct seminars and presentations at all kinds of

places whether cities or towns and focus should be on people who have large

network of references.

Moreover presentations should be conducted at places where more and more

people are available such as village panchayats, educational institutes, hospitals

etc.

The agent should be provided with more and more incentives so that they can keep

further some assistants who can help them to fetch more policies side by side

what agents themselves fetch out.

Birla sun life insurance should do efforts to promote the brand name and create

awareness through channels such as advertisements.

Measures to build faith among people about Birla sun life insurance Life Insurance

must be taken on accounts of its reliability, credibility, responsibility, sincerity

and the long lasting establishment.

Since all the riders attached with any of its products is along with a slight increment

in the premium rates, as such a few cost free riders should be designed to attract

more customers.

The agent should not only be provided with training at the time of selection but they

should also be given refresher training periodically. It increases their

professionalism and make them more competitive. Every year the agents should

be given the training for at least one week.

The agent should be given sufficient traveling allowance so as to compensate the

expenditures made by them to meet customers from one village to another village.

Bibliography:

www.birlasunlife.comwww.irda.gov.in

Birla sun life New Advisor Book

www.google.com

Brochures of company

Fund flash of company

“Dream weavers” provided by the branch