Customers Perception of Life Insurance

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CUSTOMERS PERCEPTION OF LIFE INSURANCE

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INTRODUCTION TO INSURANCE INDUSTRY

1. WHAT IS INSURANCE?Insurance is a tool by which fatalities of a small number are compensated

out of funds (premium payment) collected from plenteous. Insurance is a

safeguard against uncertain events that may occur in the future.

It is an arrangement where the losses experienced by a few are

extended over several who are exposed to similar risks. It is a protection

against financial loss arising on the happening of an unexpected event.Insurance companies collect premium to provide security for the purpose.

Loss is paid out of the premium collected from people and the insurance

companies act as trustees to the amount so collected. These companies have

proposal forms which are filled to give details of insurance required.

Depending upon the answers in the proposal form insurance companies

assess the risk and decide on the premium.

Insurance companies are risk bearers. They underwrite the risk in

return for an insurance premium. the function of insurance is to provide

protection, prevent losses, capital formation etc. hence insurance can be

defined as a tool in which a sum of money as a premium is paid by the

insured in consideration of the insurers bearing the risk of paying a large

sum .it may also be defined as a contract wherein one party (insurer) agreesto pay the other party (insured) or his beneficiary, a certain sum upon a

given contingency against which insurance is required.


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Insurance industry commands massive funds through sales of

insurance products to large number of clients. Insurers also create liabilities

and commit themselves to compensate for losses occurring to the

policyholders on future date. It also plays an important role in process of

capital formation.

2. NATURE OF INSURANCE

a) Risk sharing and risk transfer: Insurance is used to share the financial

losses that might occur to an individual or his family on the happening of

specified events. The loss arising from such events are shared by all the

insured in the form of premium.

Example: suppose in a village, there are 250 houses, each valued at

Rs.200000.Every year one house gets burnt, resulting into a total loss of Rs

200000.If all the 250 owners come together and contribute Rs.800 each, the

common fund would be Rs200000.This is enough to pay to the owner whose

house gets burnt. Thus the risk of one owner is spread over 250 house

owners of the village.

b) Risk assessment in advance: Insurance companies are risk bearers. They

assess the risk before insuring to charge the amount of premium.

c) Its not gambling or charity: The uncertainty is changed to certainty byinsuring property and life because the insurer promises to pay a definite sum

at damage or death. Insurance is antithesis of gambling. Failure of insurance

amounts to gambling because the uncertainty of loss is always looming.


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Moreover insurance is not possible without premium. So it is different from

charity because charity is given without consideration.

d) Huge number of insured people: It is essential to insure larger number of

people or property to make cost of insurance less consequently premium

would also be less.

e) Assists in capital formation: Insurance provides capital to society.

Accumulative funds are invested in productive channels.

3. SEMANTICS

1.Risk: It is defined as an uncertainty of a financial loss. It is the

unintentional decline in or disappearance of value arising from contingency.

2. Policy: It is the document which embodies the insurance contract

3. Whole life policy: It is the policy under which the amount of policy will

be paid only on death of the insured. Premiums may be payable throughout

the life or for a limited period.

4. Endowment policy: Endowment policies entitle the insured to receive the

amount of the policy on his reaching a certain age and premiums also stops.If death occurs earlier, amount of the policy will be paid at that time and

payment of premium will also stop at that time.

5. Claim: It is the amount which an insurer has to pay against a policy.


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6. Reinsurance: It refers to placing a part of the risk by an insurer with

another insurer. The object is to reduce the possible loss to be borne by the

original insurer, who pays premiums at the ordinary rates to the reinsurer.

Reinsure must pay commission to the original insurer.

7. Premium: A periodic payment made on an insurance policy.

8. Insurance penetration: It is defined as insurance premium as a share of

gross domestic product.

9. Insurance density: Insurance density is defined as per capita expenditure

on insurance premium i.e. premium per capita.

10. Actuary: The actuary is a specialist who combines an understanding of

risks and mathematical technique to develop financial products to manage

these risks, price these products. He helps in designing insurance plans and

then evaluates the financial risk of the company which it takes while selling

an insurance policy.


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PSYCHOLOGY OF AN INDIAN WHEN IT COMES TO

LIFE INSURANCE .

The moment someone wants to talk about life insurance to you, what comes

to your mind?

- Not again! I am already having many life insurance policies with me.

How much more should I invest in Insurance. I need some

other investment option.

- I really dont need insurance now, I can plan for it during the last

quarter of financial year or my limit of Rs. 1 lac is over. Now I dont need

insurance policy.

- How should I ignore this Insurance agent? Now he is going to chase

me day and night.

- How much commission will this agent give back to me?

- I am too young to have insurance

The above-mentioned are just few of those thoughts that come to an average

Indian who has been asked to buy an insurance policy. The fact of the matter

is that Indians have not understood purpose behind insurance.

Indians have understood Insurance as a Investment planning tool which

combines the benefit of tax planning under section 80C and the maturity

amount/ claim proceeds is tax free under section 10(10D).

Such policies are typically pushed by an agent, who happens to be some

relative/ friend/ acquaintance or he is some banker who chases him until he
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is forced/ under obligation to buy a policy. The main point is that agent is a

sales person and is not really advising the client after knowing his full

situation. Agents many times suggest what gives them the best commissions.

Many agents typically give the client, some part of his commission back as a

sweetener because the commission in the first couple of years are high

which the investor is ultimately bearing. The investor feels happy to have

got some money back at the time of investment.

This is very normal for Indians and there is nothing which is amazing here.

The sad part is that the questions which actually should arise in the mind ofan investor at the time of taking insurance are just not asked.

Typically, one should ask himself the following question:

- What would happen to my family in case I am not there?

- Are my disposable assets more than my liabilities?

- Will my family be able to maintain the standard of living which they

are living right now?

- Will all financial goals of my family will be met if I am no more ?

These questions just dont arise in investors mind. This has much to do with

their psychology . We keep reading sad stories every day in the news papers

that such and such family has lost bread earner at a very young age and now

deceaseds wife and small kids are left alone. Many a times, within our

friends and relatives, we see that the family is in financial distress after an

unforeseen bad incident happens to the bread earner.
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We do feel sad and scared but after some time, these all remain just a story

to us. We are just thankful that such bad incidents have not happened to us.

But who knows, such an incident with you could be news for others!

This is what one needs to understand. There are things which is beyond our

control and we should be prepared for such untoward incidents and always

have a PLAN B with us. By the way, most of the people dont even have

Plan A. but let us explain both


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Plan A : Everything goes well and one is able to fulfill his financial goals out

of his regular income and investment.

Plan B: If something goes wrong which we cant foresee today, Insurance

takes care of our Plan A.

So insurance basically is for eventuality and not for certainty. The fact is

that insurance is most needed by persons who have to travel the maximum

distance and not for people who have reached their destination.

And here we would say that insurance is most needed by a youngster who

has many dreams to fulfill but has miles to go. Just imagine, what would be

the financial impact if a retired person dies at the age of 65 whose kids are

settled with their own families. At this age, he would have achieved all he

could achieve in life. Though the social vacuum cannot be compensated,

financially the family is not affected.

On the contrary, just imagine what would happen to the family if a young

person aged 32, dies due to unforeseen circumstance leaving behind a family

of two very young kids and wife.

Now, here we would like to explain an equation which would clarify the

actual need for insurance. Calculate the value of your Disposable Assets and

your liabilities. Disposable assets are those assets which are not for your

personal use and which can be converted into cash as they are treated as an

investment by you. Your own house in which your family and you reside is

an Asset but not disposable asset. Liabilities would not only include

financial liabilities like home loan etc. but also social liabilities as daughters
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marriage, kids higher education, aging parents etc. Now you need insurance

if Liabilities are more than disposable assets and one does not need

insurance if Disposable Assets are more than Liabilities.

So when you are young, your liabilities are more or less known to you and

you have yet not created disposable assets for you and your family. So one

must take insurance when he is young . But what type of insurance? This is a

big question. Manufactures (insurance companies) and distributors (agents)

would always sell you what they want to sell. Though it sounds rude and

tough on them, thats the reality.


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NEED OF INSURANCE FOR A CUSTOMER

Today, there is no shortage of investment options for a person to choose

from. Modern day investments include gold, property, fixed income

instruments, mutual funds and of course, life insurance. Given the plethora

of choices, it becomes imperative to make the right choice when investing

your hard-earned money. Life insurance is a unique investment that helps

you to meet your dual needs - saving for life's important goals, and

protecting your assets.

Asset Protection

From an investor's point of view, an investment can play two roles - asset

appreciation or asset protection. While most financial instruments have the

underlying benefit of asset appreciation, life insurance is unique in that it

gives the customer the reassurance of asset protection, along with a strong

element of asset appreciation.

The core benefit of life insurance is that the financial interests of ones

family remain protected from circumstances such as loss of income due to

critical illness or death of the policyholder. Simultaneously, insurance

products also have a strong inbuilt wealth creation proposition. The

customer therefore benefits on two counts and life insurance occupies a

unique space in the landscape of investment options available to a customer.


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Goal based savings

Each of us has some goals in life for which we need to save. For a young,

newly married couple, it could be buying a house. Once, they decide to start

a family, the goal changes to planning for the education or marriage of their

children. As one grows older, planning for one's retirement will begin to take

precedence.

Clearly, as your life stage and therefore your financial goals change, the

instrument in which you invest should offer corresponding benefits pertinent

to the new life stage.

Life insurance is the only investment option that offers specific products

tailormade for different life stages. It thus ensures that the benefits offered to

the customer reflect the needs of the customer at that particular life stage,

and hence ensures that the financial goals of that life stage are met.


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MYTHS ABOUT LIFE INSURANCE IN MINDS OF INDIAN

CUSTOMERS

Life insurance is not a simple product. Even term life policies have many

elements that must be considered carefully in order to arrive at the proper

type and amount of coverage. But the technical aspects of life insurance are

far less difficult for most people to deal with than trying to get a handle

on how much coverage they need and why. This article will briefly examine

the top 10 misconceptions surrounding life insurance and the realities that

they distort.

Myth No.1: I'm single and don't have any dependents, therefore I don't

need any coverage.

Even single persons need at least enough life insurance to cover the costs of

personal debts, medical and funeral bills. If you are uninsured, you may

leave a legacy of unpaid expenses for your family or executor to deal with.

Plus, this can be a good way for low-income singles to leave a legacy to a

favorite charity or other cause.

Myth No.2: I only need an amount of life insurance coverage equal to

twice the amount of my annual salary.

You need an amount of life insurance equal to the amount that is actually

required. In addition to medical and funeral bills, you may need to pay off

debts such as your mortgage and provide for your family for several years.

A cash flow analysis is usually necessary in order to determine the true


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amount of insurance that must be purchased - the days of computing life

coverage based only on one's income-earning ability are long gone.

Myth No.3: My term life insurance coverage at work is sufficient.

Maybe , maybe not. For a single person of modest means, employer-paid or

provided term coverage may well be enough. But if you have a spouse or

other dependents, or know that you will need coverage upon your death to

pay estate taxes or create an estate for charity, then additional coverage may

be necessary if the term policy does not meet the needs of the policyholder.

Myth No.4: At least the cost of my premiums will be deductible.

Afraid not , at least in most cases. The cost of personal life insurance is

never deductible unless the policyholder is self-employed and the coverage

is used to insure the business. Then the premiums are deductible on the

Schedule C of the Form 1040.

Myth No.5: I absolutely MUST have life insurance at any cost.

In many cases, this is probably true. However, persons with no debt or

dependents and sizable assets may be better off self-insuring. If you have no

debt and medical and funeral costs are covered, then life insurance coverage

may be optional.

Myth No.6: I should ALWAYS buy term and invest the difference.

Not necessarily. The cost of term life coverage can become prohibitively

high in later years; therefore, those who know for certain that they must be


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covered at death should consider permanent coverage. The

total premium outlay for a more expensive permanent policy may be less

than the ongoing premiums that could last for years longer with a less

expensive term policy.

There is also the risk of non-insurability to consider, which could be

disastrous for those who may have estate tax issues and need life insurance

to pay them. But this risk can be avoided with permanent coverage, which

becomes paid up after a certain amount of premium has been paid and then

remains in force until death.

Myth No.7: Variable universal life policies are always superior to

straight universal life policies over the long run because of their long-

term growth potential.

Many universal policies pay competitive interest rates, and variable

universal life (VUL) policies contain several layers of fees relating to boththe insurance and securities elements present in the policy. Therefore, if the

variable subaccounts within the policy do not perform well, then the variable

policyholder may well see a lower cash value than someone with a

straight universal life policy.

Poor market performance can even generate substantial cash calls inside

variable policies that require additional premiums to be paid in order to keep

the policy in force.


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Myth No.8: Only breadwinners need life insurance coverage.

Non sense. The cost of replacing the services formerly provided by a

deceased homemaker can be higher than you think, especially when it comes

to cleaning and day care.

Myth No.9: I should always purchase the return-of-premium (ROP)

rider on any term policy.

There are usually different levels of ROP riders available for policies that

offer this feature. Many financial planners will tell you that this rider is not

cost-effective and should be avoided. Whether you include this rider will

depend on your risk tolerance and other possible investment objectives .

A cash flow analysis will reveal whether you could come out ahead by

investing the additional amount of the rider elsewhere versus including it in

the policy.

Myth No.10: I'm better off investing my money than buying life

insurance of any kind.

Until you reach the breakeven point of asset accumulation, you need life

coverage of some sort (barring the exception discussed in Myth No.5.) Once

you amass $1 million of liquid assets, you can consider whether to

discontinue (or at least reduce) your million-dollar policy. But you take a big

chance when you depend solely on your investments in the early years of

your life, especially if you have dependents. If you die without coverage for


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them, there may be no other means of provision after the depletion of your

current assets.

These are just some of the more prevalent misunderstandings concerning life

insurance that the public faces today. The key concept to understand is that

you shouldn't leave life insurance out of your budget unless you have

enough assets to cover expenses after you're gone. For more information,

consult your life insurance agent or financial advisor.


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PERCEPTION OF PEOPLE TOWARDS INSURANCE -

THEN AND NOW.

THEN

Prior to liberalization, people perceived that insurance was not necessary as

it was their myth that they will not get any benefits out of it in future. The

level of income being low they resisted to invest in insurance policy. It was

their perception that the bank deposits were enough for them for meeting

their future requirements. Also the insurance companies were not very

transparent in their activities since there was no regulatory authority like

IRDA, as a result of which people felt that their funds were misused. They

were not sure about whether their family will get the sum assured after their

death. Another reason for resistance was that there were limited schemes and

the entry for private sector was restricted.

NOW

The awareness among the people about the insurance has grown. They now

feel the need for insuring their as well as their familys lives. There are many

choices available to the people now for selecting among the various

insurance schemes launched by public sector as well as private sector

insurance companies. After IRDA came into being, the safety and guarantee

of peoples money with insurance companies is assured. Due to inflation the

income of the people has increased and they can now afford to pay insurance

premium by investing in more than one insurance scheme. Entry of private

sector insurance companies has given more choice to the people for selecting

the insurance schemes required by them.


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Reasons for changing perception of customers

1. Increased awareness: Now a days people are aware about the needfor covering their lives and also making investments through various

insurance schemes.

2. IRDA regulation: People are aware about IRDA regulationsgoverning insurance Companies, both in the public sector as well as

private sector. People know that their investment in insurance

schemes is now safe.

3. Tax benefits: Most of the people employed in service, professionalsand self-employed are now a days drawing salaries in higher income

bracket. In order to avail benefits u/s 80 C of the Income Tax Act and

save Income tax to the maximum extent, these people invest in

various insurance policies.

4. Other benefits: Now a days, people can take insurance cover formeeting the higher education needs and marriages of their children.

Hence, they opt for endowment insurance policies.

5. Measure of security: Most of the people are now aware that it isadvisable to opt for insurance policies at a younger age with minimal

insurance premium to make their future secured and be independent.


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INDUSTRY PROFILE OF ICICI AS AN INSURANCE

COMPANY

ICICI PRUDENTIAL LIFE INSURANCE COMPANY

ICICI Prudential Life Insurance Company is a joint venture between

ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading

international financial services group headquartered in the United Kingdom.

ICICI Prudential was amongst the first private sector insurance companies to

begin operations in December 2000 after receiving approval from Insurance

Regulatory Development Authority (IRDA).

ICICI Prudential Life Insurance Company is a joint venture between

ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading

international financial services group headquartered in the United Kingdom.

ICICI Prudential was amongst the first private sector insurance companies to

begin operations in December 2000 after receiving approval from Insurance

Regulatory Development Authority (IRDA).

ICICI Prudential Life is also the only private life insurer in India to

receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch

ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance

of ICICI Prudential's ability to meet its obligations to customers at the time

of maturity or claims.

For the past seven years, ICICI Prudential Life has retained its

leadership position in the life insurance industry with a wide range of


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flexible products that meet the needs of the Indian customer at every step in

life.

a)VISION

To be the dominant Life, Health and Pensions player built on trust by world-

class people and service.

This we hope to achieve by:

Understanding the needs of customers and offering them superior

products and services.

Leveraging technology to service customers quickly, efficiently andconveniently

Developing and implementing superior risk management and

investments strategies to offer sustainable and stable returns to our

policyholders

Providing an enabling environment to foster growth and learning for

our employees

And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment

to 5 core values ,Integrity, Customer First, Boundaryless, Ownership and

Passion. Each of the values describe what the company stands for, the

qualities of our people and the way we work.


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b) VALUES

Every member of the ICICI Prudential team is committed to 5 core

values: Integrity, Customer First, Boundary less, Ownership, and Passion.

These values shine forth in all we do, and have become the keystones of our

success.

c) DEPARTMENTS AND BRANCHES OF ICICI PRUDENTIAL

LIFE INSURANCE COMPANY LIMITED

Branches:

ICICI Prudential Life has one of the largest distribution networks

amongst private life insurers in India. It has a strong presence across India

with over 945 branches in addition to 550 micro-offices and an advisor base

of 270,000.

Distribution Network:

There are four different ways of distributing a Life insurance product namely

1. Agents (Financial Advisors):- Anybody possessing the minimum

qualification of 10+2 after completing 100 hrs of training from the training

institute approved by IRDA can sell life insurance products of any particular

company which has sponsored him to take the training. This is the most

popular distribution channel.


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2. Corporate Agents : Any corporate may apply for license to sell insurance

after complying with the requirements of IRDA.

3. Bancassurance : If the corporate agent is a bank, then it is known as

bancassurance. Banks can sell the policies to their existing as well as

prospective clients. This is becoming quite popular these days and the bank

earns huge fund based income. Bancassurance has 1% share in total

premium collection in 2004- 05.

4. Broker: They are like corporate agents with only difference that they can

sell the products of more than one insurance company.

Departments:

The various departments that can be seen in an insurance organization .

a) Marketing Department: This department mainly deals with the marketing

and promotion part of the Insurance Company. They spend most of theirtime in formulating strategies to make their products known to the common

people and to promote the same in a easy and cost effective way.

b) Sales Department: This department mainly deals with the sales part of the

Insurance Company; the department includes designations like Sales

Manager and Financial Advisor who personally contacts with people for

performing the task of sales of various products.

c) Accounts/ Financial Department: This department has the task of keeping

track of the various expenses incurred by the various other departments of


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the organization and also performs the task of allocating various funds to

different departments according to their requirements.

d) Human Resource Department: This department is handled by the Human

Resource manager of the company. The function of this department involves

the well being of the employees of the company, I,e, to see whether there is

employee grievance in the organization or not and if it is there what are the

possible causes for that and also try to find out solutions for the same if

possible.

e) Investment Department: This department deals with the task of investing

the money of the policy holders in such way that will ensure both safety of

the money and also a steady return on the same. The task of this department

is very difficult as it deals with the money given by the policy holders, so it

requires lot of thinking on the part of the personnel of this department before

deciding where to invest the money.

f) Actuarial Department: This department is under the supervision of an

Actuary who decides the premiums and charges to be taken from the policy

holder on the basis of certain informations (like Age, Annual Income etc.)

provided by the prospective customer. The task also involves the calculation

of mortality charges which requires high statistical knowledge from ones

point of view. So, this department involves in the calculation of various

amounts to be charged from the prospective customers.


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d)ICICI PRUDENTIAL LIFE INSURANCE PRODUCTS

Insurance Solutions for Individuals

ICICI Prudential Life Insurance offers a range of innovative,

customer-centric products that meet the needs of customers at every life

stage. Its products can be enhanced with up to 4 riders, to create a

customized solution for each policyholder.

Savings & Wealth Creation Solutions

Save 'n' Protect is a traditional endowment savings plan that offers life

protection along with adequate returns.

Cash Back is an anticipated endowment policy ideal for meeting

milestone expenses like a child's marriage, expenses for a child's higher

education or purchase of an asset. It is available for terms of 15 and 20

years.

Life Time Gold & Life Time Plus are unit-linked plans that offer

customers the flexibility and control to customize the policy to meet the

changing needs at different life stages. Each offer 6 fund options -

Preserver, Protector, Balancer, Maximiser, Flexi Growth and Flexi

Balanced.

Life Link Super is a single premium unit linked insurance plan which

combines life insurance cover with the opportunity to stay invested in the

stock market. Premier Life Gold is a limited premium paying plan specially

structured for long-term wealth creation.


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Invest Shield Life New is a unit linked plan that provides premium

guarantee on the invested premiums and ensures that the customer receives

only the benefits of fund appreciation without any of the risks of

depreciation.

Invest Shield Cash back is a unit linked plan that provides premium

guarantee on the invested premiums along with flexible liquidity options.

Protection Solutions

Life Guard is a protection plan, which offers life cover at low cost. It is

available in 3 options - level term assurance, level term assurance with

return of premium & single premium.

Home Assure is a mortgage reducing term assurance plan designed

specifically to help customers cover their home loans in a simple and cost-

effective manner.

Education insurance plans Education insurance under the Smart Kid brand provides guaranteed

educational benefits to a child along with life insurance cover for the parent

who purchases the policy. The policy is designed to provide money at

important milestones in the child's life. Smart Kid plans are also available in

unit-linked form - both single premium and regular premium.

Retirement Solutions

Forever Life is a traditional retirement product that offers guaranteed

returns for the first 4 years and then declares bonuses annually.


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Life Time Super Pension is a regular premium unit linked pension plan

that helps one accumulate over the long term and offers 5 annuity options

(life annuity, life annuity with return of purchase price, joint life last

survivor annuity with return of purchase price, life annuity guaranteed for 5,

10 and 15 years & for life thereafter, joint life, last survivor annuity without

return of purchase price) at the time of retirement.

Life Link Super Pension is a single premium unit linked pension plan.

Immediate Annuity is a single premium annuity product that guarantees

income for life at the time of retirement. It offers the benefit of 5 payout

options.

Premier Life Pension is a unique and convenient retirement solution

with a limited premium paying term of three or five years, to suit

professionals and businessmen, especially those who require more flexibility

and customization while planning their finances.

Health Solutions Health Assure Plus: Health Assure is a regular premium plan which

provides long term cover against 6 critical illnesses by providing

policyholder with financial assistance, irrespective of the actual medical

expenses. Health Assure Plus offers the added advantage of an equivalent

life insurance cover.

Cancer Care: is a regular premium plan that pays cash benefit on the

diagnosis as well as at different stages in the treatment of various cancer

conditions.


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Cancer Care Plus: is a wellness plan that includes all the benefits of

Cancer Care and also provides an additional benefit of free periodical cancer

screenings.

Diabetes Care: Diabetes Care is a unique critical illness product

specially developed for individuals with Type 2 diabetes and pre-

diabetes. It makes payments on diagnosis on any of 6 diabetes related critical

illnesses, and also offers a coordinated care approach to managing the

condition. Diabetes Care Plus also offers life cover.

Diabetes Care Plus: is a unique insurance policy that provides an

additional benefit of life cover for Type 2 diabetics and pre-diabetics.

Hospital Care: is a fixed benefit plan covering various stages of

treatment -hospitalization, ICU, procedures & recuperating allowance. It

covers a range of medical conditions (900 surgeries) and has a long term

guaranteed coverage up to 20 years.

Crisis Cover: is a 360-degree product that will provide long-term

coverage against 35 critical illnesses, total and permanent disability, anddeath.

Group Insurance Solutions

ICICI Prudential Life also offers Group Insurance Solutions for companies

seeking to enhance benefits to their employees.


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Findings- data analysis

PERCEPTION OF INSURANCE:Perception No. of

respondents

Safety 10

Tax benefits 6

Company profile 3

Both safety and tax benefits 11

Total 30

Interpretation:

It is clear that most of the people perceive insurance as both safety and tax

benefit. Other factors like company profile and capital growth are secondary.

Safety

Tax benefits

Company profile

Both safety and tax

benefits


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INVESTMENT PREFERRED BY CUSTOMERS:Investment alternative No. of respondents percentage

Short term 3 10Long term 9 30

both 18 60

total 30 100

From the above pie diagram we can observe that customers prefer short

term investment over long term investment. But it is also observed that there

is not much difference between the choice of investments. People mostly

prefer both long term and short term investment.

short

term

long term

both

no. of respondents


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TYPE OF POLICIES PREFERRED BY THECUSTOMERS

Type of policy No. of respondents Percentage

Life insurance 15 50

Education plan 4 13.33

Retirement plan 3 10

Money growth plan 8 26.66

50%

13%

10%

27%

No. of respondents

Life insurance

Education plan

Retirement plan

Money growth plan


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AWARENESS ABOUT JOINT VENTURE BETWEEN ICICI ANDPRUDENTIAL:

Awareness about

ICICI prudential

Employed Professionals and

self- employed

Others

Yes 9 2 3

No 13 1 2

Interpretation:

Now coming to the point of awareness among the people about ICICI

Prudential Life Insurance, the response was very disappointing from the

point of view of the company. Out of 30 respondents 16 respondents did not

have the knowledge about the joint venture between ICICI bank with

0

2

4

6

8

10

12

14

Yes No

Awareness about the joint-venture.

Employed

Professionals and self

employed

Others


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Prudential Plc of UK to form a first private sector insurance company in

India called ICICI Prudential Life Insurance in December 2000, while the

rest 14 had knowledge of the joint venture of Prudential by ICICI.

CHANGING PERCEPTION OF CUSTOMERSTOWARDS PRIVATE INDUSTRY

Most of the customers perceive public sector insurance company as safest.

When asked about whether they would like to invest in ICICI prudential life

insurance most of the customers gave a negative reply.

Out of the sample of 30, only 3 customers had taken insurance policy from

the private insurance companies. It is observed that these people belong to

age group ranging from 20-35 years while others above 35 years of age

mostly prefer insurance from a public sector company (LIC).

Thus it is evident that the perception about the private insurance firm is now

changing. The youngsters now are turning to the private insurance

companies as they have a good risk bearing ability and increased awareness

regarding the credibility of the private insurance companies.

The young generation is also aware about the role played by IRDA in

regulating the insurance companies, due to which their perception is

changing.


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CONCLUSION

Based on the answers to the questionnaire received from people who are in

service, self- employed/ professionals and retired employees, I have arrived

to the following conclusions:

It is also observed that age group has no influence over which insurancepolicy is taken by the customer. Life insurance and health plan are popular

among all the age groups.

Educational plan is preferred by customers for their children. Many havetaken up this policy for their children who are either in college or have just

started their education.

Almost all of them have opted for LIC of India insurance policies as theyperceive that it is safe to insure their life by taking policies from a Public

sector Company.

Most of the people perceive insurance policy as a measure for safety. It hasbeen observed that professional, self employed and retired people consider

safety and capital growth as most important factor to opt for life insurance

policies. In case of those who belong to service sector, tax benefit is the

most important factor.

It is observed that most of the people are aware of the joint venture betweenICICI bank with Prudential of U.K forming a private sector company to

offer Insurance product.


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ICICI has a very good brand image among the customers. But when askedwhether they would like to invest in the Company majority of them gave a

negative response.

Customers were given options like brand image, diversity, growth, potential,transparency, utmost good faith and were asked about their opinion about

which quality of ICICI would make them invest in that Company. Those

who were ready to invest preferred brand image and utmost good faith.


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QUESTIONNAIRE

1) Age:2) Occupation:3) Annual income:4) What percentage of salary do you usually save?

Less than 15%____ 15% - 20% ____

20% - 25% ____ more than 25% ____

5) What kind of investment do you prefer?Short term ____ long term ____

Both ____

6) How do you perceive insurance?Safety____ Capital growth ____

Liquidity ____ Return _____

Tax benefit ____

Company profile and brand image ____


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7) Do you have an insurance policy?Yes____ No____

8) If yes, which insurance companys policy do you have?

9) What scheme of insurance policy have you taken?Life insurance____ Education plan ____

Retirement plan ____ health plan____

Money growth plan____ others____

10) Are you aware about the joint venture between ICICI bank withprudential of UK to form the first private sector company to offer

insurance products?

Yes____ No____

11) Would you like to invest in ICICI prudential life insurance?Yes____ No____


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12) If yes, what will make you to invest in ICICI prudential lifeinsurance?

Brand image ____ Diversity____

Growth____ Potential____

Transparency____ Utmost good faith____

Others____


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Webliography

www.wikipedia.com www.iciciprudentiallifeinsurance.co www.google.com

Documents

Customers Perception of Life Insurance