Recruitment of Advisor

8/6/2019 Recruitment of Advisor

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CONTENTS

Insurance

y Property and Casualty Insurance

y Professional malpractice and Liability Insurance

y Health and Long term care Insurance

y Life and Disability Insurance

Brief history of Life Insurance

Purpose and need of Insurance

Role of Insurance in Economic Development

Advantages of Insurance

Insurance Regulatory and Development Authority

Life Insurance

y Term

y Permanent

MajorPlayers in Indian Insurance Sector

Private as well Public Sector Companies Market Share in Life Insurance

Business.

RECRUITMENT OF AN ADVISOR

Who is an Advisor

Who is & who can be a principal

Who can be an Advisor

Who is an Insurance Advisor


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Authority of Advisor

Agency Regulations

Procedure for becoming an Advisor

Practical Training

Pre-recruitment Examination

Application for Issue or Renewal of License

Fee For Renewal Of License

Insurance Advisor as a Career in Placewell Advisors

Rewards and Recognition

Ideas to motivate good candidates to become Insurance Advisors

y The pitch to be taken forProspective Advisors

y Different routes to locate Insurance Advisors

Advisors Role

Working Environment

Your Opportunity

Selection Process

Commission Structure of an Advisor

Research Methodology

y Research Design

y

Sampling

y Sample Size

y Sampling Procedure

y Source of Data


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y Field Work

Objective of Study

Limitation of the Study

Suggestions

Analysis and Findings

Conclusion

Bibliography


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INTRODUCTION

INSURANCE:DEFINATION

It is a promise of reimbursement in the case of loss; paid to people or companies

so concerned about hazards that they have made prepayments to an insurance company. It

is basically a contract that provides compensation for specific losses in exchange for a

periodic payment. An individual contract is known as an insurance policy, and the

periodic payment is known as an insurance premium. It is a formal social device for

reducing risk by transferring the risks of several individual entities to an insurer. The

insurer agrees, for a consideration, to pay for the loss in the amount specified in the

contract. It is a protection against a specific loss over a period of time that is secured by

the payment of a regularly scheduled premium.

In big bet poker, it is possible to reach a situation in which you are uncomfortable

with the amount of money you have invested in a pot. To reduce variance, players will

sometimes take insurance against an unfortunate outcome, essentially selling the actual

outcome of the hand for its mathematical equity (at a slight discount). For example, if

you hold a flush against a player who has three of a kind, your equity in the pot is a

percentage of the pot equal to the probability that the other player will not fill up.

If the pot is large, and you don't want to risk coming away with nothing, you

might take insurance from somebody who has more money and would be glad to have the

overlay.


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Insurance is a system of exchange under contract where payments over a period

of time (premiums) entitle individuals compensation by an organization (insurance

company) in the event of loss due to pre-specified conditions. It is basically a mechanism

for shifting a risk from a person, business, or organization to an insurance company in

exchange for payment of premiums. The insurance company commits to be responsible

for covered losses.

Contractual meaning of insurance is shifting the burden of pure risks through

pooling to minimize financial loss. Individuals and businesses Insurance do not only

mean insuring or safe guarding a living being but guarding against any kind of property

loss or damage making payments in the form of premiums to an insurance company,

which pays an agreed-upon sum to the insured in the event of loss. It is actually sharing

the costs of the risk of incurring losses, whether for health expenses or property and

casualty losses, across a base large enough to protect any one entity against the actual

costs of an incurred loss. The costs of spreading the risk are assumed to be less than the

costs of an actual loss. The insured group or insurance company is at financial risk for

assuming the guarantee against loss for the specific instance. we will discuss the broad

classes of insurance.

Property and Casualty Insurance

Investments in real property and hard assets are at risk for theft or destruction by

natural causes, accident, or mischief. Property and casualty insurance helps manage these

risks. Property and casualty insurance is available in the form of home insurance,


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automobile insurance, boat insurance, business property insurance, etc. It protects

specific assets from many forms of loss and insures the property owner against liability

for damages resulting from the asset's use. The cost of property and casualty insurance is

based upon the value of the insured assets and the environment in which the assets are

located.

Professional Malpractice and Liability Insurance

Many occupations and professions risk causing damage to others that can result in

financial awards against them. If one were sued for malpractice, this would cause

financial hardship when one had to liquidate assets or assign future income to pay the

awards. Doctors, lawyers, accountants, financial advisors, construction workers, and

anyone else whose occupation can inadvertently cause harm to others or others' property

may be liable for financial damages. Financial damages, whether paid from assets, future

income, or both, can be daunting and pose a severe financial hardship. There is specific

insurance that helps manage these risks arising from one's occupation. Premiums for such

insurance are based upon industry statistics and the history of the insured person.

Sometimes claims against a person may not be made for years after the occurrence of the

action causing the claim, so it is important to know the conditions under which the policy

will cover claims.

Health and Long-Term Care Insurance

We all know people who have high medical care costs. Often paid by employer

contributions, health care insurance is essential to assure an adequate level of medical


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care. Yet, most Americans have inadequate or no health care insurance at all. There are

many forms of health care insurance, ranging from private physician plans to health

maintenance organizations' (HMOs) managed care plans. Premiums are based upon

group statistics and levels of care provided. With the aging of America, there is a strong

need for long-term health care insurance to cover costs of nursing homes and assisted

living care for the elderly. For eligible individuals, federal Medicare and state-sponsored

Medicaid insurance help defray the high cost of medical care.

Life and Disability Insurance

If a family were to lose its income due to the death or disability of the principal

earners, it would face financial hardship. While no one can put a monetary value on

human life, one can put a value on his or her earning ability. Life insurance and disability

insurance pay benefits to replace lost earnings due to death or disability. The premiums

for this insurance are based upon statistics for the age, health, and occupation of the

insured, as well as the amount of benefits to be paid. While both life and disability

insurance are available through groups, such as employer plans, individuals can buy

policies tailored to their specific needs. Life insurance is so versatile that many

individuals use it for advanced financial planning purposes, such as retirement planning

and savings, as well as for death benefits.

Special forms of insurance are available to cover almost any other financial risks.

For example, there is unemployment insurance, investment insurance, and

dismemberment insurance (for loss of a body part). Some fashion models are even

insured against loss of income due to loss of their good looks. Premiums for such


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insurance are also based upon the likelihood of an event occurring and the amount of

benefits to be paid.

A brief history of life insurance

Insurance in India has its history dating back till 1818, when Oriental Life

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

european community. Pre-independent era in India saw discrimination among the life of

foreigners and Indians with higher premiums being charged for the latter. It was only in

the year 1870, Bombay Mutual Life Assurance Society, the first Indian insurance

company covered Indian lives at normal rates.

At the dawn of the twentieth century, insurance companies started mushrooming

up. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were

passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made

it necessary that the premium rate tables and periodical valuations of companies should

be certified by an actuary. However, the disparage still existed as discrimination between

Indian and foreign companies.

Purpose and Need of Insurance:

y Insurance is primarily not saving or investment. It is only protection of an asset of

economic value and saving investment is are incidence or consequence of insurance.

y Insurance is nearest substitute for love and affection and is result of sacrifice, a

person makes of his/her present needs to protect future of wife, children etc. or even

himself


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y Unknown risk or risk which is not certain cannot be insured in insurance we know

death is certain but we dont know when or who. If we know who or when will, we

will not underwrite such risk.

y It meets variable needs of person that is needs which arise at different stages of life

like birth, child hood, education, marriage, retirement

Role of Insurance in Economic development

It has economic impact on individual, society and also the nation.

y

It generates employment by employing persons from Agent to the top in the

organization.

y By providing protection it reduces individual worry and anxiety. It reduces social

security load on society/nation.

y The money collected by way of premiums is invested by the insurance companies as

per the Policy framed by the Govt. in projects (having welfare angle) such as water

supply, Electricity Roads and Industries, as controlled by S.27A of Insurance Act

1938.

y This investments affects Financial Markets and Stock exchange also.

y As Insurance is a properly, the holder can use it, transfer it & dispose it off. It can be

pledged/ Mortgaged as a collateral security.

Advantage of Insurance

y This inculcates the habits of Compulsory and regular saving.


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y It enables the Life assured to make a provision for the prote-ction of economic value

of an asset from the probable loss.

y It also enables the L.A. to raise a quite reasonable amount over a number of years, to

fulfill a future family commitment

y It enables Life assured to avail Income Tax benefit on the premium being paid by

him/her as an incentive for saving.

y When Policy proceeds are paid to the life assured by the Insurance Company, no tax

is deducted from or payable thereon, subject to exceptions.

y The Insurance policy being property, it can be transferred to other person by way

Assignment or it can be mortgage.


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INSURANCE REGULATORY DEVELOPMENT AUTHORITY (IRDA)

T

he opening up of the sector has been long standing and with the passing ofT

he

Insurance Regulatory and Development Authority IRDA bill a significant step has been

taken.

IRDA is formed as an authority to protest the interests of holders of insurance

policies, to regulate promote, and ensure orderly growth of insurance industry and for

matters connected therewith or incidental thereto.

With the Insurance Regulatory and Development Act, the focus shifted to the following:

y The Insurance Regulatory and Development Authority (IRDA) should give priority to

health insurance while issuing certificates of registration:

y Policyholders funds will be invested in the social sector and infrastructure. The

percentage may be specified by the IRDA and such regulations will apply to all

insurers opening in the country.

y Insurers will be expected to undertake a certain percentage of business in the rural or

social sector and provide policies to persons residing in rural areas, workers in the

unorganized and informal economically basic;


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In case of the insurers fail to meet the social sector obligation a fine of Rs. 2.5

million would be imposed the first time. Subsequent failures would result in cancellation

of licenses.

Expectations

The law of India has following expectations from IRDA

1. To protect the interest of and secure fair treatment to policyholders;

2.T

o bring about speedy and orderly growth of the insurance industry (including

annuity and superannuation payments), for the benefit of the common man, and to

provide long term funds for accelerating growth of the economy;

3. To set, promote, monitor and enforce high standards of integrity, financial

soundness, fair dealing and competence of those it regulates;

4. To ensure that insurance customers receive precise, clear and correct information

about products and services and make them aware of their responsibilities and duties in

this regard;

5. To ensure speedy settlement of genuine claims, to prevent insurance frauds and

other malpractices and put in place effective grievance redressal machinery;

6. To promote fairness, transparency and orderly conduct in financial markets

dealing with insurance and build a reliable management information system to enforce

high standards of financial soundness amongst market players;


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7. To take action where such standards are inadequate or ineffectively enforced;

8. To bring about optimum amount of self-regulation in day to day working of the

industry consistent with the requirements of prudential regulation.

LIFE INSURANCE :DEFINITION

Life Insurance could be defined as a policy that will pay a specified sum to

beneficiaries upon the death of the insured.

It is an agreement that guarantees the payment of a stated amount of monetary

benefits upon the death of the insured. Life Insurance could be said as protection against

the death of the insured in the form of payment to a designated beneficiary, typically a

family member or business

In big terms Life Insurance is a contract agreement between the certificate holder

and the insurance company, providing a specified sum to beneficiaries upon the death of

the insured. It is a coverage that pays out a set amount of money to specified beneficiaries

upon the death of the individual who is insured. It is a policy that will pay a specified

sum to beneficiaries upon the death of the insured. There are many types of life

insurance, including whole life, term life, universal life, etc. It is an insurance relating to

a risk depending on human life. This includes contracts providing payment on the insured

person's death, endowments providing payment either on survival to a specified date or

on earlier death and annuities which are paid throughout the annuitant's lifetime but cease

on death.


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This type of insurance is characterized by it's defined time period that is named

when the contract is initially put into force. In the case of ART (Annual Renewable

Term), this is not the case. This is due to the fact that coverage is provided for one year.

Term

Term life insurance provides for life insurance coverage for a specified term of

years for a specified premium. The policy does not accumulate cash value. Term is

generally considered "pure" insurance, where the premium buys protection in the event of

death and nothing else. .

The three key factors to be considered in term insurance are: face amount

(protection or death benefit), premium to be paid (cost to the insured), and length of

coverage (term).

Various insurance companies sell term insurance with many different

combinations of these three parameters. The face amount can remain constant or decline.

The term can be for one or more years. The premium can remain level or increase. A

common type of term is called annual renewable term. It is a one year policy but the

insurance company guarantees it will issue a policy of equal or lesser amount without

regard to the insurability of the insured and with a premium set for the insured's age at

that time. Another common type of term insurance is mortgage insurance, which is

usually a level premium, declining face value policy. The face amount is intended to

equal the amount of the mortgage on the policy owners residence so the mortgage will

be paid if the insured dies.


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Guaranteed renewability is an important policy feature for any prospective owner

or insured to consider because it allows the insured to acquire life insurance even if they

become uninsurable.

Permanent

Permanent life insurance is life insurance that remains in force until the policy

matures (pays out), unless the owner fails to pay the premium when due (the policy

expires). The policy cannot be cancelled by the insurer for any reason except fraud in the

application, and that cancellation must occur within a period of time defined by law

(usually two years). Permanent insurance builds a cash value that reduces the amount at

risk to the insurance company and thus the insurance expense over time. This means that

a policy with a million dollars face value can be relatively inexpensive to a 70 year old

because the actual amount of insurance purchased is much less than one million dollars.

The owner can access the money in the cash value by withdrawing money, borrowing the

cash value, or surrendering the policy and receiving the surrender value.

The three basic types of permanent insurance are whole life, universal life, and

endowment.

Whole


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Whole life insurance provides for a level premium, and a cash value table

included in the policy guaranteed by the company. The primary advantages of whole life

are guaranteed death benefits, guaranteed cash values, fixed and known annual

premiums, and mortality and expense charges will not reduce the cash value shown in the

policy. The primary disadvantages of whole life are premium inflexibility, and the

internal rate of return in the policy may not be competitive with other savings

alternatives. Riders are available that can allow one to increase the death benefit by

paying additional premium. The death benefit can also be increased through the use of

policy dividends.P

remiums are much higher than term insurance in the short-term, but

cumulative premiums are roughly equivalent if policies are kept in force until average life

expectancy. Cash value can be accessed at any time through policy "loans". Since these

loans decrease the death benefit if not paid back, payback is optional. Cash values are not

paid to the beneficiary upon the death of the insured; the beneficiary receives the death

benefit only.

Universal

Universal life insurance (UL) is a relatively new insurance product intended to

provide permanent insurance coverage with greater flexibility in premium payment and

the potential for a higher internal rate of return. A universal life policy includes a cash

account. Premiums increase the cash account. Interest is paid within the policy (credited)

on the account at a rate specified by the company. This rate has a guaranteed minimum

but usually is higher than that minimum. Mortality charges and administrative costs are


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charged against (reduce) the cash account. The surrender value of the policy is the

amount remaining in the cash account less applicable surrender charges, if any.

With all life insurance, there are basically two functions that make it work.

There's a mortality function and a cash function. The mortality function would be the

classical notion of pooling risk where the premiums paid by everybody else would cover

the death benefit for the one or two who will die for a given period of time. The cash

function inherent in all life insurance says that if a person is to reach age 95 to 100 (the

age varies depending on state and company), then the policy matures and endows the face

value of the policy.

Naturally, it's easy to see that out of a group of 1000 people, if even 10 of them

live to age 95, then the mortality function alone will not be able to cover the cash

function. So in order to cover the cash function, a minimum rate of investment return on

the premiums will be required in the event that a policy matures.

Universal life policies basically guarantee you the death function, but not the cash

function - thus the flexible premiums and interest returns. If interest rates are high, then

the dividends help reduce premiums. If interest rates are low, then the customer would

have to pay additional premiums in order to keep the policy in force. When interest rates

are above the minimum required, then the customer has the flexibility to pay less as

investment returns cover the remainder to keep the policy in force.

Interestingly enough, UL's are closely linked to relatively stable markets, such as

the 3 year treasury bill. What's interesting is not what UL's closely follow - but due to


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how they're linked, you'll notice that when people are happy about how little they're

paying for life insurance with a UL, they're at the same time complaining about how

expensive their variable rate mortgages are getting.

The universal life policy addresses the perceived disadvantages of whole life.

Premiums are flexible. The internal rate of return is usually higher because it moves with

the financial markets. Mortality costs and administrative charges are known. And cash

value may be considered more easily attainable because the owner can discontinue

premiums if the cash value allows it. And universal life has a more flexible death benefit

because the owner can select one of two death benefit options, Option A and Option B

Option A pays the face amount at death as it's designed to have the cash value

equal the death benefit at age 95. Option B pays the face amount plus the cash value, as

it's designed to increase the net death benefit as cash values accumulate. Option B does

carry with it a caveat. This caveat is that in order for the policy to keep it's tax favored

life insurance status, it must stay within a corridor specified by state and federal laws that

prevent abuses such as attaching a million dollars in cash value to a two dollar insurance

policy. The interesting part about this corridor is that for those people who can make it to

age 95-100, this corridor requirement goes away and your cash value can equal exactly

the face amount of insurance. If this corridor is ever violated, then the UL will in be

treated and in effect turn into a Modified Endowment Contract (or more commonly

referred to as a MEC).


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But universal life has its own disadvantages which stem primarily from this

flexibility. The policy lacks the fundamental guarantee that the policy will be in force

unless sufficient premiums have been paid and cash values are not guaranteed.

Variable universal life Insurance (VUL) is not the same as Universal Life, even

though they both have cash values attached to them. These differences are in how the

cash accounts are managed; thus having a great affect on how they are treated for

taxation.

Endowments

Endowments are policies which the cash value build up inside the policy, equals

the death benefit (face amount) at a certain age. The age this commences is known as the

endowment age. Endowments are considerably more expensive (in terms of annual

premiums) than either whole life or universal life because the premium paying period is

shortened and the endowment date is earlier.

In the United States, the Technical Corrections Act of 1988 tightened the rules on

tax shelters (creating modified endowments. These follow tax rules as annuities and IRAs

do.

Endowment Insurance is paid out whether the insured lives or dies, after a specific

period (ie: 15 years) or a specific age (ie: 65).


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Major Players In Indian Insurance

Life Insurance

y Public

o Life Insurance Corporation of India

y Private

o HDFC Standard Life Insurance

o Max New York Life Insurance

o

P

lacewell Advisors Life Insurance

o Om Kotak Mahindra Life Insurance

o Birla Sun-Life Insurance

o TATA AIG Life Insurance

o SBI Life Insurance

o ING Vysya Life Insurance

o Bajaj Allianz Life Insurance

o MetLife Insurance

o AMP Sanmar Life Inssurance

o Aviva Life Insurance

o Sahara India Insurance

o Shriram Life Insurance

o Reliance life insurance


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General Insurers

y Public

o

National Insurance

o New India Assurance

o Oriental Insurance

o United India Insurance

y Private

o Bajaj Allianz General Insurance

o ICICI Lombard General Insurance

o IFFCO-Tokio General Insurance

o Reliance General Insurance

o Royal Sundaram Alliance Insurance

o TATA AIG General Insurance

o Cholamandalam General Insurance

o Export Credit Guarantee Corporation

o HDFC Chubb General Insurance

Who is an Advisor?

In terms of Section 182 of the Indian Contract Act 1872 an advisor is a person

employed to do any act for another or to represents another with third person.


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Who is & who can be a Principal:

The person for whom the agent does an act or to whom the agent represents is

called Principal. Under Section 183 of the Contract Act, any person who is major and

who is of sound mind can employ an agent. Any contract entered through an agent and

obligation arising from an act done by the agent are enforceable in the same manner and

will have the same legal consequences as if the contract has been entered into and the act

was done by the Principal himself.

Who can be an Advisor?

Under Section 184 Contract Act, as between principal and third party any person

may become agent legally speaking. However in case of an agent who is minor or of

unsound mind, while the principal would be bound by the acts of such agent who is

minor or of un sound mind, the agent will not be responsible for any act or omission to

the principal. The principal would be responsible for the acts of such agent to the third

person as if the principal himself entered in to contract with third party directly.

Who is an insurance Advisor

In terms of section 2 (10) of the Insurance Act 1938, insurance agent Who is licensed

under section 42 of the Act and who receives or agrees to receive payment by way of

commission or other remuneration in consideration of soliciting or procuring

insurance business including business relating to the continuance or renewal or

revival of policies.


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It is important to note difference between renewal and revival. The policy is renewed

with payment of premium when due, When the premim is not paid when due, it

lapsed and such lapsed policies are revived on fulfillment of prescribed conditions

which we will see later on.

Authority of an Advisor:

Under Section 186 of the Contract Act, an agent can act only within the scope of

authority granted to him by the principal.

Such authority can be express or implied. An Authority is said to be express when it

is given by words spoken or written. It is implied when it is to be inferred from the

circumstances of the case.

To illustrate the point, Life Insurance Corporation of India does not autheorize its

agents to collect premium or other amounts from its policy holders or to assume

or accept risk. An insurance company may, however, grant such authority to its agent

as it may consider expedient. In case an agent collects premium from the policy

holder in absence of su ch authority the company shall not be bound for

consequences of such unauthorized act of the policy holder and not the company.

It further follows that the authority of an agent is not decided by Insurance Act, or

Contract Act or IRDA Act. It is decided by the company.

Agency Regulations:

We have seen earlier in this chapter that Insurance Agent is one who has been

licensed under section 42 of the Insurance Act. The matter relating to act as an Agent


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is regulated by Insurance Regulatory and Development Authority (Licensing of

Insurance Agents) Regulation 2000 issued under Section 26 of IRDA Act 1999.

These regulations also, inter-alia, specify the procedure for grant of license, required

qualification, practical training, examination fee, fee for license & its renewal payable

therefore. The regulations also lay down Code of Conduct for the agent and the

circumstances under which license can be cancelled or terminated etc.

Procedure for becoming an Advisor:

In terms of Insurance Act read with Regulations referred to above the

[A] Pre-requisites for obtaining License:

1) Age : Applicant should have attained minimum age of 18 years. There is no maximum

age.

2) Educational Qualifications:

a. If the applicant resides at a place where population is 4999 or less, he should be at

least Xth Standard or should have equivalent recognized qualification.

b. If the applicant resides at a place where population is 5000 or more He should have

passed XII Standard or recognized equivalent.

Practical Training:

An agent can become agent of one Life Insurance Company or one General

Insurance Company. In case he is for Life Insurance Company he will be called Life

Insurance Agent but if is for General Insurance Co. in which case he will be General


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Insurance Advisor. However a person can be Advisor for one Life Insurance

Company and one General Insurance Company in which case he will be called

Composite Advisor.

In each case he has to undergo practical Training at a training Institute Accredited by

IRDA. The duration of practical training will be as under:

a. For either Life or General Insurance 100 hrs for composite Agent 150 hrs.

b. For candidates who are having any of the following special qualification

T

he period ofP

racticalT

raining is reduced.

1. M.B.A.

2. Having professional qualification in Marketing.

3. Associate or Fellow of

Insurance Institute of India.

Institute of Chartered Accountants of India.

Institute of Cost & Work Accountant of India.

Institute of Company Secretaries of India.

Actuarial Society of India.

In these cases Practical Training for Life or General is reduced to 50 hours and for

composite it is reduced to 70 hours.

After the successful completion of training, the Institute imparting the Practical

Training will issue a Certificate to that effect.


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1. Pre-recruitment Examination:

After undergoing the prescribed Practical Training, the applicant has to pass

Examination in Life and / or General Insurance business conducted by the Insurance

Institute of India or any other examining body approved by IRDA.

Note: A license is valid for three year only and after that it is to be renewed again.

Before renewal of license an agent for life insurance and general insurance has to

undergo a practical training as above for 25 hours and a composite agent has to

undergo practical training for 50 hours.

Application for issue or renewal of license

The application for issue or renewal of license shell be made on prescribed form

to the designed person an officer normally in charge of marketing operations each

company as specified by the insurance company and duly authorized by the IRDA along

with application proof for the following are to be submitted

License fee having been paid

Age

Education qualification

Completion of practical training

Passing the prescribed examination


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Fee for Renewal of license:

a. Like grant of License, fee for renewal is also 250/- provided the application

along reaches the issuing authority(Designated Person) 30 days before the

b. License ceases to be in force.

c. If it reaches later than above but before expiry of license he will have to

pay a fine of Rs. 100/- and total fee will be 250+100=350/-.

d. In genuine cases the Designated Person may renew license if the application

reaches after expiry of license but then the fine will be 750/- and the fee will

be-250+ 750=1000/-.

e. The designated person shall grant or renew the license within a period of 3

months from the date of application. The designated person shall if the

consideration of application is likely to be delayed within 60 days of the

receipt of the application form, inform the applicant the reasons for such delay

and likely time it will take to do so. If the designated person refuses to grant

or renew the license under these regulation, he shall give the reasons therefore

to the applicant.

Insurance advisor as a Career:

At Placewell Advisors, career development is emphasized upon from the very day

the advisor joins the system. Though individual meetings with his or her manager, the

advisor can discuss various issues related to business development and career

enhancement. Expectations from the organization in terms of chalking a career in the

insurance industry are also discussed. Tiger Team:Placewell Advisors offers the Tiger


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Team programme for identified high potential advisors. Hand picked by the

management, these advisors are placed on a fast-track career path and recognized as

Tiger trainers. The advisors can participate in this programme, subject to certain criteria

being fulfilled. Pinnacle Programme: Absorption into the management is another career

enhancement option provided at Placewell Advisors through the Pinnacle Program. This

program helps advisors build a full time career as a unit manager in the organization,

offering great potential for managing a team of advisors and personal development. Fast

track Pinnacle programme is also available to advisors who are able to meet the

performance criteria within the stipulated time

Rewards and Recognition:

Placewell Advisors advisors are constantly recognized and rewarded for their

performance. Numerous contests all year round promote healthy competition amongst

advisors and recognition for their efforts. Depending on the level of business the advisor

achieves in a year, he or she can become a member of various clubs such as the

Presidents club, Placewell Advisors Star International and the Placewell Advisors Star

India club. Each of these clubs are entitled to attend seminars held at exotic international

and domestic locations each year. Advisors can also qualify for the reknowned MDRT

(Million Dollar Round Table), an exclusive international insurance advisors club.


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(1) Ideas to motivate good candidates to become insurance advisors.

(A) The pitch to be taken for prospective advisors

The typical reasons for opposition/reluctance from prospective advisors are

- They look down upon becoming commission-based wage-earners.

- They look down upon becoming life insurance polies.

The points that were thrown up that could effectively tackle this resistance were

1. T

his is one of the few professions where the employee gets to choose his own

timings for working.

2. This is one of the few professions where the employee gets to choose the

customers which he wishes to serve.

3. This is one of the few professions where there is unlimited opportunity to earn

there is no upper limit.

4. This is the ONLY profession where there are definite benefits derived for

todays work for the next 10-40 years.

5. This is the ONLY profession which gives upto 35% gross margin without ANY

capital investment in the business.

6. This is the only profession which gives regular income.

7. This is the only profession which gives opportunity to make on role employee of

the company.

8. This is the only profession which gives extra benefits like foreign trip, extra

cash reward.


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(B) Different routes to locate insurance advisor.

1. Members of Multilevel Marketing chains (Amway, Modicare, Tupperware, RCM

business, etc.) they have good contact bases

2. Secretaries/Chairmen ofHousing Societies these are local opinion leaders

3. Secretaries/Chairmen of local community groups these are local opinion leaders

4. Accounts / Purchase personnel in companies these are opinion leaders.

5. Ration Shop / Kirana shop merchants /photo studio worker these are local

opinion leaders.

6.P

lacement Consultants they have a good database

7. Leading Members of Clubs like Rotary, Lions, civil line, etc. local opinion

leaders.

8. Leading members of trade unions/MR unions opinion leaders.

9. Student leaders in collages opinion leaders.

10. Medical representatives/other salesman they have good contact base.

11. Family members of employees in the IT department opinion leaders

12. STD Booth Owners have good contact bases

13. Employees in telecom companies/banking sector good contact bases.

14. Doctors/advocates opinion leaders, good contact bases.

15. Hoteliers/Caterers/wholesalers good contact bases.

16. LPG dealers/ mobile dealers good contact bases.

17. Relatives of Sarpanches/Gram Sewaks /Agri Samiti Members/members (for rural

advisors) local opinion leaders.

18. Veterinary doctors in rural sector- good contact bases.


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19. Accountant /clerk in public sector- good contact bases.

ADVISOR ROLE

y To provide ongoing financial advice for his/her clients :

Identify future clients:

Making appointments

Conduct financial review meetings with prospects/clients

Close sale

Get referrals

Provide service to clients

y Follows internal sales and reporting system

WORKING ENVIRONMENT

y To be part of world class sales team

y Work from your own office and residence

y Work fulltime and part time

y Earn commission, bonus & incentives

y No upper limits on earnings

YOUR OPPORTUNITY

y No start up capital required

y Flexible working environment


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y Be your own boss

y Unlimited earning potential

y To be part of world class team

Following are the steps taken in the selection process.

Filling of the Agency Application form

Selection Test

Initial screening by UM and discussion on the interest free Training cum

performance deposit of Rs.1000.

Interview by Branch/Resident Manager with the help of the UM.

Acceptance of training cum Performance deposit.

Recommendation for IRDA training.


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LIST OF PRIVATE COMPANIES IN LIFE INSURANCE

Sr.

No.

Name of Private Life Insurance Companies

Foreign

Equity

(in percent)

Foreign

Partner

1. Allianz Bajaj Life Insurance Company Ltd. 26 Allianz

2. Birla Sunlife Insurance Company Ltd. 26 Sunlife

3. HDFC Standard Life Insurance Company Ltd. 18.6 Standard Life

4. Placewell Advisors Life Insurance Company Ltd. 26 Prudential

5. ING Vysya Life Insurance Company Ltd. 26 ING

6. Max New York Life Insurance Company Ltd. 26 New York Life

7. Metlife India Insurance Company Ltd. 26 Metlife

8. Om Kotak Mahindra Life Insurance Company Ltd. 26 Old Mutual

9. SBI Life Insurance Company Ltd. 26 Cardiff

10. Tata AIG Life Insurance Company Ltd. 26 AIG

11. AMP Sanmar Life Insurance Company Ltd. 26Sanmar Life

Insurance Co.

12. Dabur-CGU Life Insurance Company Ltd. 26

CGU Life

Assurance Co.

13. Aviva Life Insurance Company India Pvt. Ltd. 26 Aviva Life Co.

14. Sahara India Insurance Company Ltd. Nil -

15. Reliance Life Insurance Company Ltd. Nil -


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LIST OF PRIVATE COMPANIES IN GENERAL INSURANCE

Sr. No.

Name of Private General Insurance

Companies

Foreign Equity

(in percent)

Foreign

Partner

1. Royal Sundaram Alliance Insurance Co. Ltd. 26 Royal Sun

Alliance

2. Reliance General Insurance Company Ltd. Nil

3. IFFCO- Tokio General Insurance Co. Ltd. 26 Tokio

Marine

4. Tata-AIG General Insurance Co. Ltd. 26 AIG

5. Bajaj Allianz General Insurance Co. Ltd. 26 Allianz

6. ICICI Lombard General Insurance Co. Ltd. 26 Lombard

7. Cholamandalam General Insurance Co. Ltd. Nil

8. HDFC-CHUBB General Insurance Co. Ltd. 26 CHUBB


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RESEARCH METHODOLOGY

Research in common practice refers to a search for knowledge. One can also

define research as a scientific and system search for pertinent information on a specific

topic. In, fact, it is an art of scientific investigation.

Research is not only concerned with the revision of the facts and building up to

the date knowledge but also to discover the new facts evolved through the process of

dynamic changes in the society.

D. Slenginer and M. Stephenson clarified the concept of research. In their words,

the research is the manipulation of things, concepts or symbols for the purpose of

generalizing to extend, correct or verify knowledge whether that knowledge aids in

construction of theory or in the practice of an art.

Research Design

Under this project of comparative study, the Research Design is Exploratory in

nature under which an attempt is made to obtain the relevant result with regards to

question or problems in hand.

Sampling

In this project probability sampling techniques is adopted in such a way that each

member of the universe has a known equal chance of being selected.

Sample Size

The sample size is restricted to 100 respondent of BATHINDA CITY.


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Sampling Procedure

The sample was randomly selected and also used convenient sampling.

Source of Data

To make the research complete it is very important to have the necessary and

useful data some times data can be available readily in one form. The other and

sometimes they have to be collected. A research can take from too heads:

1. Primary Data -: Questioners, Personal Interviews.

2. Secondary Data -: Magazines, Internet, and Newspapers.

Field Work

The fieldwork is done at consumer-to-consumer basis.


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OBJECTIVE OF THE STUDY

To know about the habit of people in the region of BATHINDA.

To know what the people think about the insurance sector and advisors.

To know about the views of people regarding various insurance companies.

To know the main consideration of the people while joining as the advisors.

Awareness about the new incentive schemes provided to the advisors.

Position of the insurance company in the mind of people.

To know about the competition regarding various insurance companies.

T

o find out the position of the company in the market.


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Q no.1: Do You Have Any Life Insurance Policy?

Feedback:

PIE CHART

This diagram shows that 70 respondents have life insurance policy and 30 respondents

have not any life insurance policy.

70%

30%

YES NO


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Q.no.2: From Which Company You Take YourPolicy?

Feedback:

PIE CHART

In this diagram 55 respondents from lic, 10 from icici pru.,4from bajaj allienze,2 from

birla sun life,2 from mex new York and 3 respondent from others take there policies.

72%

13%

5%

3%

3%

4%

LIC ICICI Pru

ajaj

llinze

irla Sun Life ax Newyork Other


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Reasons For Not Having a Life Insurance Policy :

PIE CHART

There are 14 respondents who doesnt want security and 19 respondents are not want any

saving , there is only a person who dont want family security.

56%

41%

3% 0%

Dont want saving

Dont wantSecurityDont want family security

Dont wantto save income tax


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Respondents that now, wants life insurance policy:

PIE CHART

53%

47%

YES NO


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Q. From Which Company You Are Interested To Take Policy?

Feedback:

PIE CHART

This diagram shows that in this time there are 5 person want policy from lic, 9 person

want policy from icici pru., and only one, one person from bajaj allenze and birla sun life.

32%

56%

6% 0%6%

LIC ICICI Pru

ajaj

llinze

irla Sun Life Other


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Reasons for choosing ICICI:

PIE CHART

54%19%

19%

8%

ICICI

Brand Name Service Product Reach


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Reasons for choosing Bajaj Allinze:

PIE CHART

67%16%

0%17%

BajajAllinze

Brand Name Service Product Reach


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Q. Would You Like To Do Work As An Advisor?

Feedback:

PIE CHART

There are only 13 persons ready to join as an advisor out of 100 respondents

13%

87%

YES NO


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Q. Which Company you want to join as an Insurance Advisor?

Feedback:

PIE CHART

This diagram shows that there are 4 respondents to join as advisors in LIC and there are 9

respondents ready to join as advisors in Placewell Advisors.

31%

69%

0% 0%

LIC ICICI Pru Bajaj

llinze Birla Sun Life


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LIMITATION OF THE STUDY

Although the survey has been conducted very cautiously but due to small samples size of

a vast population, some limitations are there. The main limitations can be:-

The sample size is very small as compared to the market of the insurance sector

The survey is conducted on only specific areas.

Sometimes the respondents do not give exact information due to some personal

reasons.

Lack of the published and unpublished literature on the particular topic is also a

limitation.

Sometimes the respondents were not having time to answer the questionnaire

because they were in their own schedule.

Sometimes respondents were not interested in survey because they do not find it useful in

any means, so they do not find it necessary to answer the survey.


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SUGGESTIONS

1. The people in the rural areas should be taped and brought under the life insurance

policies.

2. More and More advertising should be used to tap the customers. More awareness

campaign should be under taken so that people can relay on the company.

3. Life insurance policies should be made Compulsory to all the earning individual.

4. Short term policies should be advertised heavily as it is still unknown area from most

of the people.

5. Services should be improved procedure to get life insurance policy should be made

easily assessable.

6. More and more of bonus and extra benefit should be given.

7. Investment plans should be made to as suitable to individual need.

8. Investment plans suitable to the female population (Female child) should be brought

in the market with minimum premium and additional benefit.

9. Life insurance should be customized as the requirement of the customer.


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CONCLUSION

It is clear from the analyses and findings that insurance sector is a big market with many

players engaged in a competition. Placewell Advisors Life Insurance is the number one

company in the private sector. LIC is public sector company so, this is the main reason to

take the excess business. The fact shows from my survey that mostly peoples joint

Placewell Advisors as an Advisors on Commission basis.


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BIBLIOGRAPHY

Websites

y www.iciciprulife.com

y www.licindia.com

y www.bimaonline.com

y www.irda.com

y www.wikipedia.org/wiki/Life_insurance

Books

y Taurus institute of insurance training book

y Examination hand book

Recruitment of Advisor

Documents