Internship Report-HDFC STD LIFE INSURANCE

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Industry background

INSURANCE:

Definition:

Insurance is a contract providing for payment of a sum of money to the person assured or

failing him to the person entitled to receive the same on the happening of certain event.

Uncertainty of death is inherent in human life. It is this risk, which gives rise to the

necessity for some form of protection against the financial loss arising from death.

Insurance substitutes this uncertainty by certainty.

The objective of insurance is normally to provide:

a) Family protection and / or

b) Provision for old age.

c) Protection against risks

Why Insurance?

Insurance cover is essential because it provides the following benefits:

A lump sum payment to the nominees at the time of the death of the policy holder.

A regular payment to the nominees in the event of the death of the policy holder.

Tax benefits, as premiums paid reduce the liability of tax.

Relieves economic hardships in the family on the uneventful death of the sole income

holder.

Inculcates the habit of savings.

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Need for insurance:

The need for life insurance comes from the need to safeguard the family. Today insurance

has become even more important due to the disintegration of the prevalent joint family

system, a system in which a number of generations co-existed in harmony, a system in

which a sense of financial security was always there as they were more earning members.

Times have changed and the nuclear family has emerged. Apart from other pitfalls of a

nuclear family, a high sense of insecurity is observed in it today besides, the family has

shrunk. Needs are increasing with time and fulfillment of these needs is a big question

mark. How will we be able to satisfy all those needs? Better lifestyle, good education, long

desired house. But again - we just cannot fritter away all our earnings; we need to save a

part of it for the future too - a wise decision. This is where insurance helps us. Ambitions

etc are some of the reasons why insurance has gained importance and where insurance

plays a successful role.

History:

India Insurance Company:

The concept of insurance is intimately related to security. Insurance acts as a protective

shield against risk and future uncertainties. Traditionally, a risk-averse behaviour has been

a characteristic feature of Indians who preferred a “low & certain” disposable income to a

“high & uncertain” one.

Hence insurance has become a close associate of Indians since 1818, when Oriental Life

Insurance Company was started by Europeans in Kolkata to cater to the needs of their own

community. The age was characterized by intense racial discrimination as Indian insurance

policy holders were charged higher premiums than their foreign counterparts. The first

Indian Insurance Company to cover Indian lives at normal rates was Bombay Mutual Life

Assurance Society which was established in the year 1870.

By the dawn of the 20 Th century, new insurance companies started mushrooming up. In

order to regulate the insurance business in India and to certify the premium rate tables and

periodic valuations of the insurance companies, the Life Insurance Companies Act and the

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Provident Fund Act were passed to regulate the Insurance Business in India in 1912. Such

statistical estimates made by actuaries revealed the disparity that existed between Indian

and foreign companies.

The Indian Insurance Sector went through a full circle of phases from being unregulated to

completely regulate and then being partly deregulated which is the present situation. A

brief on how the events folded up is discussed as follows:

The Insurance Act of 1938 was the first legislation governing all forms of insurance to

provide strict state controls over insurance business.

In 19th January, 1956, the life insurance in India was completely nationalized through the

Life Insurance Corporation Act of 1956. At that time, there were 245 insurance companies

of both Indian and foreign origin. Government accomplished its policy of nationalization

by acquiring the management of the companies. Bearing this objective in mind, the Life

Insurance Corporation (LIC) of India was created on 1st September, 1956 which has

grown in leaps and bounds henceforth, to become the largest insurance company in India.

The General Insurance Business (Nationalization) Act of 1972 was formulated with the

objective of nationalizing nearly 100 general insurance companies and subsequently

amalgamating them into four basic companies namely National Insurance, New India

Assurance, Oriental Insurance and United India Insurance which have their headquarters

in four metropolitan cities.

The Insurance Regulatory and Development Authority (IRDA) Act of 1999 deregulated

the insurance sector in India and allowed the entry of private companies into the insurance

sector. Moreover, the flow of Foreign Direct Investment (FDI) was also restricted to 26 %

of the total capital held by the Indian Insurance Companies.

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Some of the important milestones in the life insurance business in India

are:

1912: The Indian insurance Companies Act enacted as the first statute to regulate the

insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956: Indian and foreign insurers and provident societies taken over by the central

government were nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,

with a capital contribution of Rs. 5 crore from the Government of India.

Size:

Insurance is an Rs.400 billion business in India, and together with banking services adds

about 7% to India’s GDP. Gross premium collection is about 2% of GDP and has been

growing by 15 - 20% per annum. India also has the highest number of life insurance

policies in force in the world, and total investible funds with the LIC are almost 8% of

GDP. Yet more than three-fourths of India's insurable population has no life insurance or

pension cover. Health insurance of any kind is negligible and other forms of non-life

insurance are much below international standards.

To tap the vast insurance potential and to mobilize long - term savings we need reforms

which include revitalizing and restructuring of the public sector companies, and opening

up the sector to private players. A statutory body needs to be made to regulate the market

and promote a healthy market structure. Insurance Regulatory Authority (IRA) is one such

body, which checks on these tendencies. IRA role comprises of following three functions:

a. Protection of consumer's interest.

b. To ensure financial soundness and solvency of the insurance industry, and

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c. To ensure healthy growth of the insurance market.

An insurance policy protects the buyer at some cost against the financial loss arising from

a specified risk. Different situations and different people require a different mix of risk-

cost combinations. Insurance companies provide these by offering schemes of different

kinds. Unfortunately the concept of insurance is not popular in our country.

As per the latest estimates, the total premium income generated by life and general

insurance in India is estimated at around a meager 1.95% of GDP. However India’s share

of world insurance market has shown an increase of 10% from 0.31 in 1996-97 to 0.34%

in 1997-98. India's market share in the life insurance business showed a real growth of 11

% thereby outperforming the global average of 7.7%. Non-life business grew by 3.1%

against global average of 0.20%. In India insurance spending per capita was among the

lowest in the world at $7.6 compared to $7 in the previous year. Amongst the emerging

economies, India is one of the least insured countries but the potential for further growth is

phenomenal, as a significant portion of its population is in services and the life expectancy

has also increased over the years.

The nationalized insurance industry has not offered consumers a variety of products.

Opening of the sector to private firms will foster competition, innovation, and variety of

products. It would also generate greater awareness on the need for buying insurance as a

service and not merely for tax exemption, which is currently done. On the demand side, a

strong correlation between demand for insurance and per capita income level suggests that

high economic growth can spur growth in demand for insurance. Also there exists a strong

correlation between insurance density and social indicators such as literacy with social

development, insurance demand will grow.

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COMPANY PROFILE:

Incorporated in 1977 with a share capital of Rs. 10 cores, HDFC have since emerged as

the largest residential mortgage finance institution in the largest residential mortgage

finance institution in the country. The corporation has had a series of share issues raising

its capital to Rs.119 cores. The net worth of the corporation as on March 31, 2000 stood at

Rs. 2096 cores.

HDFC operates through 75 locations throughout the country with its Corporate head

Quarters in Mumbai, India. HDFC also has an international office in Dubai, U.A.E., with

service associates in Kuwait, Oman and Qatar.

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Standard Life is Europe's largest mutual life assurance company. Standard Life, which has

been in the life insurance business for the past 175 Years, is a modern company surviving

quite a few changes since selling its first Policy in 1825. The company expanded in the

19th century from its original

Edinburgh premises, opening offices in other towns and acquiring other Similar

businesses.

Standard Life currently has assets exceeding over $119 billion under its management and

has the distinction of being accorded "AAA" rating consequently for the past six years by

Standard and Poor. They have assets under management which are worth more than the

market value of Sainsbury's Boots, Tesco, Cadbury Schweppes and Marks and Spencer

combined.

HDFC standard life insurance is backed by HDFC, the reputed housing financial

institution operating since several decades and Standard Life Assurance Company, one of

the Europe's largest mutual fund company HDFC has 30000 crores of assets and Standard

Life has $119 billion of assets so they can comfortably consider has safe as insurers.

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Your Family, Their Future, Our Help

HDFC are the main shareholders in HDFC Standard Life with 81.4% stake while Standard

Life owns 18.6%. The company is one of the top three performing companies in the

industry. They have tie ups with various banks like Indian bank, Union bank and Kochi

based JRG Financial Services Pvt Ltd. On its bank assurance tie up with Union bank of

India, the bank has been selling HDFC Standard Life products across the country through

its branches. HDFC Standard Life has the widest distribution network among all the

private insurance companies with the presence in 53 locations. HDFC Standard Life

Insurance Company Ltd recorded a 120% growth in the collection of new business

premium over the previous year.

HDFC and Standard Life first came together for a possible joint venture, to enter the Life

Insurance market, In January 1995.it was clear from the outset that both company shared

similar values and beliefs and a strong relationship quickly formed. In October 1995 the

company signed a 3 year joint venture agreement. Around this time Standard Life

purchased a 5% stake in HDFC, Further strengthening the relationship. The next 3 years

were filled with uncertainties, due to changes in government and ongoing delays in getting

the IRDA (Insurance Regulatory and Development Authority) Act passed in parliament.

Despite this both companies remained firmly committed to the venture. In October 1998,

the joint venture agreement was renewed and additional resource made available. Around

this time Standard Life purchased 2% of Infrastructure Development Finance Company

limited.(IDFC).

The Partnership

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Standard Life also started to use the services of the HDFC Treasury department to advice

them upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and both

companies agreed the time was right to move the operation to the next level. Therefore in

January 2000 an expert team from the UK joined a handpicked team from HDFC to form

the core project team, based in Mumbai.

In a further development Standard Life agreed to participate in the Asset Management

Company promoted by HDFC to enter the mutual fund market. The mutual fund was

launched on 20th July 2000.

Incorporation of HDFC Standard Life Insurance Company Limited:

HDFC Standard Life insurance company Limited was the first company to be granted

license by the IRDA to operate in Life insurance sector. Each of the JV player is highly

rated and been conferred with many awards. HDFC is rated 'AAA' by both CRISIL and

ICRA. Similarly Standard Life is rated 'AAA' both by Moody's and Standard and

Poor's .these reflect the efficiency with which HDFC and Standard Life manage their asset

base of Rs .30000 Cr and RS.600, 000Cr respectively.

The company was incorporated on 14th August 2000 under the name of HDFC Standard

Life Insurance Company Limited.

Our ambition as far back as October 1995 was to be the first private company to re-enter

the life insurance market in India. On the 23 of October 2000, this ambition was realized

when HDFC Standard Life was the only life company to be granted a certificate of

registration.

HDFC are the main share holders in HDFC Standard Life, with 81.4%, while Standard

Life owns 18.6%. Given Standard Life's existing investment in the HDFC group, this is

the maximum investment allowed under current regulation.

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HDFC and Standard Life a long and close relationship built upon shared values and trust.

The ambition of HDFC Standard Life is to mirror the success of the parent companies and

be the yardstick by which all other insurance companies India are measured.

Service:

It has employed well-equipped and trained consultants to whom question can be asked for

any policy purchased or any other queries.

MISSION OF THE COMPANY

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The company aim is to be the top new life insurance company in the market.

This does not just mean being the largest or the most productive company in the market.

Rather it is a combination of several things like-

• Customer service of the highest order

• Value for money for customers

• Professionalism in carrying out business

• Innovative products to cater to different needs of different customers

• Use of technology to improve service standards

• Increasing market share

VISION OF THE COMPANY

“The most successful and admired life insurance company, which mean that we are the

most trusted company, the easiest to deal with, offer the best value for money, and set the

standards in the industry.”

“The most obvious choice of all.”

VALUES OF THE COMPANY

SECURITY: providing long term financial security to its policy holders will be co's

constant endeavor. It will be doing this by offering life insurance and pension products.

TRUST: Co appreciates the trust placed by its policy holders in it hence; Co will aim to

manage their investments very carefully and live up to this trust.

INNOVATION: recognizing the different needs of customer, Company will be offering a

range of innovative products to meet these needs.

Strategic objectives of the insurance companies:

 As a leading insurance company, we are committed to providing the best possible service

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for our clients. Since the establishment of the company, we have set a number of long term strategic goals.

We are keen to achieve. On top of our goals is to build a strong loyal customer base that

we always try to enrich by providing the best services at competitive costs. We have

broadened our range of services over the years, in order to reach out for more customers

and meet their precise needs.

One of the main objectives of the company is to maintain a stable financial position in the

market along with a stable growth in capital over the years.

To be able to compete in a fast emerging market, we have to keep up with needs of our

clients. Our services are updated according to their demands.

Innovative services were presented according to the needs of the new market. We try to

cover as many sectors as possible using our long experience in the insurance field.

Finally, our achievements and clients speak for us, which proves that we are on the right

track.

Reaching the top is hard... staying on top is the hardest

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ORGANISATION STRUCTURE OF THE BRANCH OFFICE I WORKED:

Branch manager is the head of the branch under whom the whole branch office is dealt

with. Next to the branch manager is the business development managers of 1 or 2 of them.

The sales development manager falls under business development manager but is

accountable to branch manager only. Below the business development manager and sales

development manager are the financial consultants who are not the employees of the

company but the agents who give the business. Operational officer and the agency support

officers are the staff members employed to maintain the inner transactions and to keep

account of all the receipts and payments. Even they are accountable to the branch manager

only.

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Table showing the various individual products offered by HDFC standard life

insurance company:

Plan Benefits

Savings series

Endowment Assurance Plan Life Insurance with Savings

Unit Linked Endowment plan Life Insurance and savings with choice of

investment in funds

Children's plan Financial Security for your child

Money Back plan Life Insurance with Savings

Unit linked young star Life Insurance and savings with choice of

investment in fundsInvestment Series

Single Premium Whole Of Life plan Investment with life insurance

Protection series

Term Assurance plan Life Insurance at an affordable

price(i.e. high risk cover with low

premium)

Retirement Series

Personal Pension Plan Savings for retirement

Unit Linked Pension Plan Retirement savings with choice of

investment in funds

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THE VARIOUS GROUP PRODUCTS OFFERED BY HDFC STANDARD

LIFE:

Group Term Insurance:

HDFC Standard Life offers a Group Insurance scheme for companies called "Group Term

Insurance". This product has been designed to offer innovative features and a high degree

of customization.

Gratuity Plan:

The HDFC gratuity plan is an insurance policy. Which offers you, as an employer and

gratuity scheme trustee, a new and flexible way to fund your gratuity liability? The

contributions that you decide to invest in this policy will assist you in meeting your

gratuity obligations in a systematic manner.

Leave Encashment Plan:

The HDFC leave Encashment plan is a flexible insurance policy, which helps employers,

and leave encashment scheme trustees in funding leave encashment obligations without

the employer's profit and loss account being unexpectedly impacted.

Development Insurance Plan:

This product is well suited for the economically weaker sections of society and caters

specifically to their needs. It makes available life cover at affordable rates.

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Rider:

Rider is not a basic plan offered by the company it is an additional benefit given by

receiving additional premium with the basic plan's premium

Riders Offered By the Company:

1) Critical illness benefit (CI)

This rider pays an additional sum assured on happening of the 6 specified critical illnesses,

along with the sum assured of the basic plan.

2) Additional term benefit (ATB)

Additional Term benefit provides additional sum assured on death during the term of this

rider along with the sum assured of the basic plan.

3) Accidental death benefit (ADB)

This rider pays one extra sum assured on death due to accident.

4) Waiver of premium benefit (WOP)

As the name indicates, this rider waives of future premiums on disability of the

policyholder.

5) Accelerated sum assured (ASA)

This rider accelerates the payment of the basic sum assured on happening of critical illness

(6 specific illnesses).

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VARIOUS PRODUCTS AND OTHER FEATURES:

Savings Series Endowment Assurance Plan:

This plan is with profits saving plan and is well suited for saving money for long term

financial goals. This plan also provides the needs of a family in the absence of incoming

earning capacity of the a family (unfortunate death of earner) by paying out a lump sum in

the event of unfortunate death of policy holder during the term of the policy

Features

Provides financial support to the family by way of a lump sum payment in case of the

unfortunate death of the life assured within the term of the policy.

Provides a lump sum payment to the life assured on survival up to maturity of the policy.

The lump sum mentioned is the basic Sum Assured plus any bonus addition.

The Riders Allowed Under the Plan:

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• Critical illness benefit (CI)

• Additional term benefit (ATB)

• Accidental death benefit (ADB)

• Waiver of premium benefit (WOP)

Payment options:

Payment of premium can be done either in yearly, half yearly or quarterly modes,

depending on the convenience.

Benefits:

On maturity basic sum assured + Reversionary bonus + Terminal bonus (if any) is paid.

On death basic sum assured + Reversionary bonus + Terminal bonus (if any) is paid along

with the rider benefits if any.

Allowed to: single life as well as joint life first claim basis Eligibility:

Basic policy Rider options with corresponding

eligibility ages chart

CI ATB ADB WOPMin age at entry 12 18 18 18 18Max age at entry 60 55 60 55 50Max age at expiry 75 70 75 65 60

Terms:

Minimum: - 10years

Maximum: - 30years

UNITLINKED ENDOWMENT PLAN:

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MARKET- linked insurance plans (MLP) are fast becoming popular HDFC plans plays a

lump sum either on death or maturity but the returns are directly linked to the underlying

investments.

Term period Age at entry Maximum age at

maturity

Option Min Max Min Max

Life option 10 30 18 60 7

Life and health

option

10 30 18 55 65

Extra life option 10 30 18 55 70

Extra life and death

option

10 30 18 55 65

MONEY BACK PLAN

The plan has a 5 investments options- liquid fund, secure managed, defensive managed,

balanced, and growth fund.

SWICHING OPTIONS:

Policy holder can have the option to switch between funds and also redirect future

premiums into a different fund.

PREMIUM ALTERATION:

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Premium levels can be either reduced or increased .if regular premium have been paid for

3 years or the policy value is at least Rs.15, 000.

WITHDRAWALS:

Withdrawals can be made from the fund any time provided the balance does not fall below

the SA.

CHARGES:

The charge is lower compared to other plans. You can pay minimum premium in the first

2 years and subsequently increase them. the charges in the subsequent years are

substantially lower, even on top ups, moreover, you will not be charged for altering your

premium, switch between funds redirecting your premium into other.

CHILDREN'S PLAN

FEATURES:

The plan can be taken those in the 18-60 age groups with the maximum age at maturity

being 75. The minimum and maximum terms are 10 & 25 respectively. Under this plan,

the payer of the premium is the life insured and child is the beneficiary. Children's plan is

design to provide a lump sum to the child at maturity. It also provides financial security to

the child in the future, incase of insured person's unfortunate death during the policy term.

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Policy receives simple reversionary bonuses, which are usually added annually. This is a

flexible plan with three options to choose from .depending on the requirements they are:

Maturity Benefit Plan:

If the life insured die during the term of the plan. The future premiums are waived and the

policy continues till maturity.

On maturity, the beneficiary will receive the sum assured and the accumulated bonuses.

Bonuses under the plan are of reversionary in nature and are on sum assured.

Accelerated benefit plan:

If the life insured dies during the term of the plan. The beneficiary will receive the sum

assured and the accumulated bonuses immediately and the policy terminates. Bonuses

under the plan are of reversionary in nature and are on sum assured.

Double benefit plan:

If the life insured dies during the term of the plan. The beneficiary will receive the sum

assured and the accumulated bonuses immediately and the policy continues till the date of

maturity. The future premiums are waived on maturity, the beneficiary will receive

another sum assured and the accumulated bonuses. Bonuses under the plan are of

reversionary in nature.

This plan helps you plan for future anticipated expenses by paying a periodic cash lump

sum to you at regular intervals

Features:

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Payment of cash lump sum, each of which is a proportion of the basic sum assured at a 5

year intervals during the term of the policy.

On survival up to maturity, a payment equal to the basic sum assured plus any bonus

addition less the cash lump sum paid earlier is provided.

In case of the unfortunate death of the life assured with in the term of the policy, the basic

sum, assured plus any bonus addition is provided. This is a cover and above the earlier pay

outs.

OPTIONAL BENEFITS:

The following optional benefits can be added to customize the policy to suit the personal

needs.

Critical illness benefit

Additional term benefit

Accident death benefit

Waiver of premium benefit.

Eligibility:

Min, age at entry 12 years

Max age at entry 60

Max age at expiry 75 years

Min term 10 years

Max term 30 years Payment options

Payment of premium can be done either in yearly, half yearly or quarterly modes,

depending on the convenience.

SINGLE PREMIUM WHOLE OF LIFE INSURANCE PLAN

FEATURES:

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A sound investment: the money is invested in their with profit funds. A compound

reversionary bonus is declared for the policy every year and added to the policy on its

maturity.

Flexibility of term: even after choosing the policy, you can decide on the policy term.

Surrender value: the policy can be terminated any time, after it has been in force for at

least 6 months. And receive a surrender value.

In case of unfortunate death: the nominee gets the sum assured secured by your premium.

Plus any attached bonus.

No medical benefits: no medical test is required for this plan

Eligibility:

Min, age at entry 18 years

Max, age at entry 70 years

Payment options:

A single premium can be paid by cheque, cash or demand draft.

Indicative premium:

Minimum sum assured Rs.25, 000

Maximum sum assured Rs.5.00.000

Premium 950 per thousand sum assured

PROTECTION SERIES

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T E R M A S S U R A N C E P L A N

Under this plan sum assured is payable in case of death of the assured during the tern of

the contract. One can choose the lump sum that would replace the income lost to one's

family in the unfortunate event o f one's death. Since this is non participating (with profits)

plan is a pure risk cover plan. No benefits are payable on survival to the end of the term of

the policy.

Optional benefits:

Critical illness benefit

Accident death benefit

Accelerated sum assured benefit

ELIGIBILITY:

Basic policy policy with optional benefits

Min, age at entry 18 18

Max, age at entry 60 55

Max age at expiry 65 65

Payment option:

Payment of premium can be done either in yearly, half yearly or quarterly modes or a

single one time premium depending on the convenience.

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LOAN COVER TERM ASSURANCE:

This plan provides a lump sum on the unfortunate death of the life assured during the term

of the policy. The lump sum will be a decreased percentage of the initial sum assured, as

the outstanding loan decreases as per the loan schedule, the cover under the policy

schedule.

Eligibility:

Min, age at entry 18 years

Max, age at entry 55 years

Max, age at expiry65 years

Payment option:

Payment of premium can be done either in yearly, half yearly or quarterly modes, or a

single one time premium depending on the convenience.

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RETIREMENT PLANS

PERSONAL PENSION PLAN:

This plan is basically savings contract, which is designed to provide an income for life

from retirement.

Eligibility:

Min, age at entry RP -18 sp -35

Max, age at entry 60

Min, age at retirement 50

Max, age at retirement 70

Surrender value:

You can surrender the policy at any time. if premiums have been paid continuously for at

least 3 years. The surrender value will be subject to a guaranteed minimum.

Unit Linked Pension Plan

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The unit linked pension plan is a basically an insurance contract, which is designed to

provide a retirement income for life.

Your premiums are invested in units of the investment fund of your choice based on the

prevailing unit price.

Funds which can be chosen:

Liquid fund

Secured managed fund

Defensive managed fund

Balanced managed fund

Eligibility:

Min, age at entry RP-18 SP-18 Max age at entry RP 60 SP-65

Min, age at retirement 50

Max, age at retirement 70

Tax Benefits:

Tax benefits under various sections of the Income Tax Act, 1961 are as follows:

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** Applicable to premiums paid for Cl, WOP and ASA.

Problem Statement

Plan Tax Benefits

Endowment Assurance Sec. 88, Sec. 80D** and Sec. 10 (10D)

Children' s Plan Sec. 88 and Sec. 10 (10D)

Money Back Sec. 88, Sec. 80D** and Sec. 10 (10D)

Single Premium Whole Of Life Sec. 88

Term Assurance Sec. 88, Sec. 80D** and Sec. 10 (10D)

Loan Cover Term Assurance Sec. 88, Sec. 80D** and Sec. 10 (10D)

Personal Pension Plan Sec. 80 CCC

** Applicable to premiums paid for Cl, WOP and ASA.

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To evaluate the customer awareness and satisfaction towards different

policies of HDFC standard life insurance at Tumkur

Objectives of the study:

To evaluate the customer awareness with regard to different HDFC Std life insurance

policies

To identify the satisfaction level of the customers with respect to the various criteria’s like

modes of payment, level of returns, amount of premium and so on...

Scope of the study:

The study is confined to Tumkur city and to the HDFC Standard life insurance company.

SURVEY METHODOLOGY:

Questionnaire - The research instrument used is a questionnaire. The questionnaire has more

close ended questions as the study was specific. Through the questionnaire the measurement of

the customers’ level of satisfaction and awareness would be easier.

SAMPLE SIZE:

The customer’s data needed for the survey was collected from the company’s web site.

The address of 100 respondents was given to me who resided it different parts of Tumkur.

Since the respondents resided in different part of Tumkur and in different locations or

areas, I had to divide the survey as North, South, East and West. As we know that HDFC

is still in its infant stage and is gaining its name, there were not enough customers in one

area to conduct the survey hence I was suggested by my guide to conduct the survey on

the available data.

DATA COLLECTION:

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Primary data collection tool - Questionnaire were administered to respondents, to study the

name, occupation, income, needs, risks, awareness and satisfaction level of the customers.

Secondary data collection tool - Secondary data are gathered from numerous sources. The

secondary data is collected from the internal research such as trade journals, insurance journals,

general library research sources, internet, company web sites (green page).

SAMPLING FRAME:

In this research, 100 respondents were selected in Tumkur city. They were approached

given a brief explanation about the study and the purpose of the study. The respondents

were then asked to fill a questionnaire with 20 questions including the basic details which

had more close ended questions than open ended, so that the respondents can easily fill the

questionnaires.

The purpose of this research is to gain in-depth knowledge of customer awareness and the

factors that influence their satisfaction level.

SAMPLING METHOD :

The selection of the respondents are based on the nonprobability sampling where selected

samples were as per the convince. As the sample is selected as per the convince and it has

become a purely a nonprobability research.

SAMPLING TECHNIQUE:

The technique used in the questionnaire was simple attitude scaling and category scaling

techniques.

Population - The information is generated from respondents in Tumkur city.

Sampling unit - Respondents were randomly selected for the purpose of the research.

LIMITATIONS OF THE STUDY:

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(a) The study is confined to the city of Tumkur in Karnataka.

(b) The findings of the study are based on the assumption that respondents have

disclosed accurate information.

(c) The study was limited to 100 respondents of the company.

(d) The information, data collected and analysed is restricted to the researcher’s

knowledge and ability.

DATA ANALYSIS AND INTERPRETATION:

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FOLLOWING TABLES AND BAR DIAGRAMS SHOWS THE SATISFACTION LEVEL OF

THE CUSTOMERS IN DIFFERENT PARTS OF TUMKUR:

TABLE SHOWING THE SATISFACTION LEVEL OF THE HDFC CUSTOMERS:

NORTH SOUTH EAST WEST

SATISFIED 65% 72% 84% 78%

UNSATISFIED 30% 20% 10% 15%

NO RESPONSE 5% 8% 6% 7%

Table no: I

FIGURE SHOWING THE SATISFACTION LEVEL OF THE CUSTOMERS:

Figure no: I

Inference:

84% of the HDFC customers residing in the east region of Tumkur are more satisfied than

any other regions pertaining to the Tumkur region. And at the same time the 30% of the

customer from the north region is more unsatisfied than any other region of Tumkur.

TABLE SHOWING THE AWARENESS OF THE DIFFERENT HDFC POLICIES TO

THE CUSTOMERS:

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NORTH SOUTH EAST WEST

AWARE 56% 75% 90% 92%

NOT AWARE 40% 15% 4% 1%

NO RESPONSE 4% 10% 6% 7%

Table no: II

FIGURE SHOWING AWARENESS OF THE DIFFERENT HDFC POLICIES TO THE CUSTOMERS:

Figure no: II

Inference:

92% of the HDFC customers residing in west region of Tumkur are more aware than any

other regions pertaining to the Tumkur city. And at the same time 40% of the customer in

the north region is mainly not aware compared to other regions of Tumkur.

TABLE SHOWING THE BASIS OF RETURN KNOWN TO THE CUSTOMERS:

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NORTH SOUTH EAST WEST

KNOWN 50% 48% 30% 52%

UNKNOWN 35% 50% 60% 40%

NO RESPONSE 15% 2% 10% 8%

Table no: III

FIGURE SHOWING THE BASIS OF RETURN KNOWN TO THE CUSTOMERS:

Figure no: III

Inference:

52% of the HDFC customers residing in west region of Tumkur know the returns from

their policy than any other regions pertaining to the Tumkur region. And at the same time

the 60% of the customers from the east region are not aware of the returns they get from

their policy compared to other regions of Tumkur.

36

TABLE SHOWING THE AWARENESS ON THE PAYMENT OF PREMIUMS ON

DUE DATES TO THE CUSTOMERS:

NORTH SOUTH EAST WEST

AWARE 93% 96% 96% 93%

NOT AWARE 1% 1%

NO RESPOND 7% 3% 4% 6%

Table no: IV

FIGURE SHOWING THE AWARENESS ON THE PAYMENT OF PREMIUMS ON

DUE DATES TO THE CUSTOMERS:

Figure no: IV

Inference:

96% 0f the HDFC customers residing in east region of Tumkur know the due dates of

premiums they pay for the policy they own than any other regions pertaining to the

Tumkur city. And 1% of the customers in the south region are not aware of the due dates

of premium they are suppose to pay to the policy they own compared to other regions of

Tumkur. But in common almost all the customers are aware of the amount they are

supposed to pay every year.

37

TABLE SHOWING THE BASIS OF MODE OF PAYMENT OF PREMIUM :

NORTH SOUTH EAST WEST

CASH 32% 23% 12% 19%

CHEQUE 55% 68% 75% 80%

DEMAND

DRAFT

0% 0% 0% 0%

INTERNET

PAYMENT

SYSTEM

2% 0% 3% 0%

ECS MODE 11% 9% 10% 1%

Table no: V

FIGURE SHOWING THE BASIS OF MODE OF PAYMENT OF PREMIUM :

Figure no: V

Inference:

80% of the HDFC customers pay the premiums in cheque and cash. It’s only a small

percentage pay the premium through internet mode of payment and ECS mode. And none

of them prefer to pay through demand draft since they have to pay the D.D. charges.

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TABLE SHOWING A COMPARITIVE ANALYSIS OF ALL THE ABOVE

CRITERIA’S:

Table no: VI

FIGURE SHOWING A COMPARITIVE ANALYSIS OF ALL THE ABOVE

CRITERIA’S:

Figure no: VI

Inference:

SATISFIED/AWARE/KNOWN/CHEQUE

UNSATISFIED/NOTAWARE/UNKNOWN/ECS MODE

SATISFACTION LEVEL

74.75% 18.75%

AWARENESS TOWARDS THE POLICIES

78.25% 15%

RETURNS KNOWN

45% 46.25%

AWARENESS OF PAYMENT OF PREMIUM DUE DATES

94.5% 0.5%

MODE OF PAYMENT

69.5% 7.75%

39

The satisfaction level of the customers is 74.75% and the unsatisfied level of the

customers is 18.75%, this is mainly because of the mode of payment that is available is not

satisfied to the customers. Most of the customers who pay through cheque or by cash have

to pay the premium by going to the company itself. They commonly prefer to pay by ECS

mode of payment which is available only in the corporation cities and not in any other

district. At the same time the customer awareness towards the payment of premium due

dates and awareness towards the returns they get from the policies they own are

interlinked. Customers are aware of the due dates but concerned to the returns they are not

aware where their premium amount will be invested by the company and how they are

going to give the returns back to them. The customers who own a policy must know

whether their premium amount is a purely market linked, or 50% of market linked or

purely an insurance.

Though 45% of customers know the actual returns which they will get from their policies,

46.25% of them don’t know the actual returns which they might get on the maturity date

of their policy. This shows that the rate of unknown customers with respect to their returns

is higher than the rate of customers who know their actual returns.

Though 78.25% customers are aware of the policy they own and the premium due dates

there are many customers who pay the premium with fine of Rs. 250. This is mainly due to

the customer’s busy hours which delays in the payment of premium on the due date and

most of them pay through cheque and cash which they have to come to the company and

pay.

40

FNDINGS/OBSERVATIONS OF THE STUDY:

74.75% of the customers are satisfied with the company’s performance, but 18.75% of

them prefer easy mode of payment and premiums of fewer amounts which they are ready

to pay every month.

Though 45% of the customers know the returns they are going to get, 46.25% of them are

not aware of the actual returns they are going to get which is due to the unawareness of the

company’s method of generating the amount.

94.5% of the customers know the due date of payment of premiums but due to their busy

hours they are not able to come to the company and pay the amount on date.

69.5% of the customers pay the premium through cheque.

78.25% of the customers are aware of the different policies in HDFC but 15% of them

don’t even know the features of the policy they own.

General findings:

There are no specific policies to the students and retired people.

The reasons for not buying insurance policy or unsatisfaction in customers show that the

company should make effort to convenience people of their reliability and long-term

existence which also satisfies the existing customers.

Most of the customers have purchased the policy for the tax benefit, this perception have

to be changed by educating them and offering them beneficial short investment plans

where the returns are known to them at the time they purchase the policy.

The ECS mode of payment is available only in corporation cities, and not in any other

districts.

41

SUGGESTION AND RECOMMENDATIONS:

18.75% of people prefer premiums of lower rate; hence for rural sector new policies with

low premiums can be implemented to tap the rural market.

46% of the customers do not know their returns from the investments they have made;

therefore it is necessary for the company to provide the customers the details of their

investments and the tools and techniques used by the company to generate the returns.

The returns should be specified even in case of market link policies.

The bonus amount that will be declared on their policy every year should be informed to

customers. Also the company’s declaration details of bonus amount should be made

available to the public in order to attract more customers.

69.5% of the customers pay the premium through cheque, but they still prefer ECS mode

in order to avoid late payment and lapsation of the policy. Hence the company can

facilitate the customers to pay the premium every month in the banks with which they

have their daily transactions.

94.5% of the customers know the due dates of the premium payable yet it is necessary to

remind them on regular intervals regarding their premium due date by E-Mails, post cards,

telecalls, etc; because due to their busy hours they may forget the exact due date.

15% of the customers are not aware of the different policies and its features, HDFC

standard life should create more awareness campaigns to the public regarding different

policies and its features through various media.

General suggestions:

HDFC standard life can come up with new policy for younger that is also for the students

and for retired people.

Company can target various sub-urban and rural population by coming up with policies for

farmers.

HDFC standard life can bring awareness of Life insurance among college students by

organizing seminars on life insurance at colleges.

42

Insurance agents (financial consultants) are best salesmen. Companies should train them to

build and sell the products because they are the one who makes policyholder to pay

regularly by trying to fulfill their needs and demands.

Tie-ups with corporate companies and institutions to provide policies to their employees

would create a better recognition & profit in the market.

It should advertise about all its product features in all the available media based on the

consumer target group.

43

CONCLUSION:

As per the study many customers are unaware of the returns on their investments and also

since in the current market we notice that lot of fly-by operators exist in the market, the

customers are normally worried about their investments as well as the company’s

existence for a longer period. To subside these worries the HDFC Standard life has to

assure its customers of their existence or stability in the market and it’s also very much

necessary to inform the customers about the returns they generate on their investments

year on year. The company should also actively take measures to ensure the customers

have enough knowledge about the products offered by HDFC Standard life insurance.

Understanding the customer’s mindset and customization of some of the product features

or the mode of payments with respect to individual customer’s focus would benefit the

company in the long run.

Future line of work:

A survey/research can be conducted based on the satisfaction of customers after receiving

claims against the policies of HDFC Standard Life purchased by the consumers.

Since my study covered only the awareness and satisfaction of HDFC Standard life

insurance products, a further research could be done to analyze the customer satisfaction

with regards to the claims against the life insurance policies taken from HDFC Standard

life insurance.

This would benefit HDFC Standard Life Insurance to understand not only customer

satisfaction with regards to claims against its policies but also to understand the customer

perception and expectations which would help the organization to fine-tune or improvise

the claim handling process.

44

BIBILOGRAPHY:

Newspapers:

The Times of India… 17 Aug 2009. "During April-June 2009 quarter, the Indian life

insurance industry”

Deccan Herald… Tuesday 13 October 2009.

Business Today… 4 Mar 2009.

Websites:

www.hdfcinsurance//costumers.asp/insuranceproducts

Last accessed on: 3rd July 2009.

www.irda /indianinsurancemarket.ME6/product

Last accessed on: 12th July 2009.

https://cc.hdfcinsurance.com/ccrevampapp/ams/Presentation/View/Root/Home.aspx?sid=0

Last accessed on: 4th august 2009.

http://www.policybazaar.com/life-insurance/life-insurance-india.aspx

Last accessed on 18th august 2009.

http://www.articlesbase.com/insurance-articles/compare-buy-life-insurance-in-india--

780631.html

last accessed on 28th June 2009.

45

ANNEXTURE:

QUESTIONNAIRE:

HDFC STANDARD LIFE INSURANCE:

To evaluate the customer awareness and satisfaction towards different

policies of HDFC standard life insurance at Tumkur

PERSONAL DATA

1. NAME:

2. AGE :

3. SEX :

4. QUALIFICATION :

5. DESIGNATION :

6. MARITAL STATUS :

46

PLEASE TICK THE APPLICABLE

1. since when are you the customer of the company?

a) <1 year

b) 1year<2 years

c) 2years<5years

d) Five years or more

2. What is the premium amount you are paying annually?

a) 12000 and more

b) More than 25000

c) 50000 and more

3. Were you given information about all the different policies available at the time

you purchased the policy?

a) Yes

b) No

4. If yes are you satisfied with the company?

a) Yes

b) No

5. Are you satisfied with the policy you own?

a) Yes

b) No

6. How many policies do you have in our company?

a) 1

b) 2

c) 3

d) More than 3

47

7. Do you think the customer need is properly judged by the company?

a) Yes

b) No

8. If yes, how do you rate the judgment?

a) Satisfactory

b) Average

c) Non satisfactory

9. What is your total annual income?

a) <200000

b) 200000-300000

c) 300000-600000

d) 600000 & above

10. Does the company remind you at the time of renewal date of your policy?

a) Yes b) No

11. How do the employees react for your quires?

a) Excellent b) Good c) Average d) Fair e) Poor

12. How frequently you will be contacted by Company?

a) Yearly

b) Half-Yearly

13. What type of service system do you prefer?

a) Personal

b) Telephone

c) On line internet system

14. Is proper feedback given to you for your quires?

a) Yes

b) No

48

15. How do you prefer the mode of payment of premium?

a) Cheque

b) Demand Draft

c) Internet payment system

d) ECS mode of payment

e) Cash

16. Are the benefits received by your policy attractive and preferable?

a) Yes

b) No

17. Is the returns from your policies confirmed to you?

a) Yes

b) No

18. If you have received any compensations & rewards is it given to you in time as

specified at the time of purchasing the policy?

a) Yes

b) No

19. Your opinion about the company:

a) Average

b) Good

c) Very good

d) Still to improve

20. Do you like to be called for the meetings from the company?

a) Yes

b) No

Suggestions if any:

SIGNATURE