Summer Training Project Report

On
A STUDY ON CHILD INSURANCE POLICIES - IDBI
FEDERAL LIFE INSURANCE COMPANY LTD

Submitted in partial fulfilment of the requirements

For the award of the degree of
Bachelor of Commerce (Hons.) programme
Submitted By:
SHANTO.P.THOMAS
B COM (H) 5th Semester
Roll No.: 08296788813
Batch (2014-2017)
External Guide:

Internal Guide:

Mr. KAPINDRA TIWARI

Ms. GURJEET KAUR

Kamal Institute of Higher Education and Advance Technology

K-1 Extension, Mohan Garden, New Delhi 110059
(Affiliated to GGSIPU, Delhi)

CERTIFICATE BY THE GUIDE

This is to certify that project title A STUDY ON CHILD INSURANCE

POLICIES IDBI FEDERAL LIFE INSURANCE CO. is the original work of
SHANTO. P . THOMAS (08296788813) student of BCOM (H)5th semester and
has been duly completed his project under my guidance and supervision up to my
satisfactory level.
This work has been done in partial fulfillment of the requirement for the award of
the degree of Bachelor of Commerce from Kamal Institute Of Higher Education
And Advance Technology, GGSIPU and has not been submitted anywhere in any
other university for the award of any degree.

Ms.Gurjeet kaur
Asst. Professor
KIHEAT

DECLARATION

I hereby declare that the summer training project entitled A STUDY ON CHILD
INSURANCE POLICIES- IDBI FEDERAL LIFE INSURANCE CO is based
on my original study and under the guidance of MS Gurjeet kaur submitted in
the partial fulfillment of degree of Bachelor of Commerce (hons) 5th semester from
KAMAL INSTITUTE OF HIGHER EDUCATION AND ADVANCE
TECHNOLOGY NAWADA , NEW DELHI. This is an original piece of work
and I have not submitted it elsewhere .

SHANTO . P . THOMAS
08296788813

ACKNOWLEDGEMENT

It is pleasure to acknowledge many people who knowingly and unwittingly helped

me, to complete my project. First of all let me praise god for all the blessing, who
carried me through all those years. I am particularly indebted to Director Dr. J S
GUJRAL,

KAMAL

INSTITUTE

OF

HIGHER

EDUCATION

AND

ADVANCE TECHNOLOGY, which inculcated in me utmost request for human

values and groomed me up to take on the challenges of the competitive world. First
and foremost, I would like to express my regards to MS. Gurjeet for her constant
encouragement and support. I would also like to express my immense gratitude
towards all the lectures of our college for providing the invaluable knowledge,
guidance, encouragement extended during the completion of this project.

I extend my sincere gratitude to all my teachers and guide who made

unforgettable contribution. Due to their sincere efforts I was able to excel in the
work entrusted upon me.

SHANTO . P . THOMAS
02396788813

CHAPTER-1

INDUSTRY PROFILE
Introduction

Insurance is a form of risk management that shields insured from the risk of any
uncertain of unfortunate events. In simple terms insurance can be defined as transfer
of risk from one entity to another in exchange of the payment. The transaction
consists of insured assuming a guaranteed small loss in the form of payment to the
insurer in exchange of the promise to compensate insured in case of any kind of
financial loss to insured. In a laymans term, insurance is a guard against monetary
loss arising on the happening of an unforeseen event. In developing countries like
India insurance sector still holds lot of potential which need to be tapped.
Types of Insurance:
Insurance can be classified into three categories:
1. Life Insurance:
Life Insurance is a concord between the insurer and the policyholder, where
insurer promises to pay beneficiary designated sum of money upon death of the
insured person. Life Insurance covers number of contingencies like Death,
Disability, Disease.
2. General Insurance:
General Insurance is a non-life insurance policy including automobile and
homeowner policy. General insurance specifically consist of non- life
insurance. It includes property insurance, liability insurance and other forms of
insurance. Fire and Marine insurance are called property insurance.
3. Social Insurance:
Social insurance is another type of insurance for weaker section of the society.
It provides protection to weaker section of the society who are unable to pay
premium. Industrial Insurance, sickness insurance, pension plan, disability
benefits, unemployment benefits are some the type of social insurance.

INDUSTRYS DOMINANT ECONOMIC FEATURES:

Insurance Sector in India:
Indian insurance sector has gone through different phases of competition, from being
an open competitive market to a nationalized market and then again getting back to
liberalized market. Indian insurance sector has witnessed complete dynamism in past
few centuries.
6

Insurance sector in India has a deep- rooted history. Its mention has been found in
writings of Manu (Manusmriti), Yagnavalkya (dharmashastra) and Kautilya
(Arthshastra). Ancient Indian history has preserved traces of insurance in the form of
marine trade loans and carrier contracts.
Insurance industry in India is governed by Insurance Act of 1938, Life Insurance
Corporation Act of 1956 and General Insurance business Act, 1972, Insurance
Regulatory and Development Authority (IRDA) Act of 1999 and other related acts.
Insurance industry in India is considered as an industry with big potential market. One
of the reason that India is seen as huge potential market is because of its huge
population and untapped market area of this population. In terms of population India
has an immense potential expanding their life insurance cover. Majority of people in
India are unaware of the functions and benefits of Insurance because of which
insurance sector has a bright future in India. But it is relevant to consider factors like
different varieties of social structure, urban and rural composition other than very
important factors like age, sex, income level, literacy level. Making assessment of
Life Insurance potential of India is very difficult task due to wide variance in every
aspect of Indian circumstances and without a refined analysis any estimate would be
meaningless.

Indian Insurance Industry at present:

Life Insurance Corporation (LIC) had the monopoly over the market till the late 90s
when the insurance sector in India was opened for private players. Before that there
7

were only two state insurer, one was LIC (Life Insurance Corporation of India) and
GIC (General Insurance corporation of India).
Indian insurance sector at present has undergone many structural changes in 2000.
The Government of India has liberalized the insurance sector in 2000 with IRDA
(Insurance Regulatory and development authority) lifting all entry restriction of
foreign players with a specific limit on direct foreign ownership. Under the current
guideline 26% of equity cap is there for foreign players in an insurance company and
proposal is being given to increase this limit to 49%. Post liberalization insurance
industry in India have come a long way and today it stands as one of the most
competitive, challenging and exploring industry in India. Increased use of new
distribution channels are in limelight today due to entry of private players. In the long
run the use of these distribution channels and modern IT tools has increased scope of
the insurance industry. Also the changing economics patterns, changing political
scenario, modern IT tools will eventually help in reshaping future of Indian financial
market and Life Insurance business in the country.
Insurance is a contract between the insurance company (insurer) and the policyholder
(insured). In return for a consideration (the premium), the insurance company
promises to pay a specified amount to the insured on the happening of a specified
event.

BACKGROUND OF THE TOPIC

8

Insurance is an integral part of any personal financial plan. The type of insurance and
the amount of coverage you obtain all depends on your unique financial and family
circumstances, and must be evaluated carefully. When considering purchasing
coverage, you should review all the potential risks and the financial impact of these
risks on your financial health. This will help you determine what options to look for
and what questions to ask. And as with any type of financial product, you must read
the fine print and consult with a competent advisor.
Insurance is a form is risk management in which the insured transfers the cost of
potential loss to another entity in exchange for monetary compensation known as the
premium.
Why insurance is important in present scenario:

protecting family after one's death from loss of income

Ensuring debt repayment after death
Covering liabilities.
Protecting against the death of a key employee or person in your business.
Protecting your business from business interruption and loss of income.
Protection against unforeseeable health expenses.
Protecting your home against theft, fire, flood and other hazards.

Major Players:
9

Various players in Indian Life insurance are given below:

1. Life Insurance Corporation of India
2. IDBI federal Life Insurance Co. Ltd
3. Bajaj Allianz Life Insurance Co. Ltd
4. Birla Sun Life Insurance Co. Ltd
5. HDFC Standard Life Insurance Co. Ltd
6. ICICI Prudential Life Insurance Co. Ltd
7. ING Vysya Life Insurance Co. Ltd
8. Max New York Life Insurance Co. Ltd
9. Met Life India Insurance Co. Ltd
10. Kotak Mahindra old Mutual Life Insurance Ltd
11. SBI Life Insurance Co. Ltd
12. Tata AIG Life Insurance Co. Ltd
13. Reliance Life Insurance Co. Ltd
14. Aviva Life Insurance Co. India Pvt. Ltd
15. Sahara India Life Insurance Co. Ltd
16. Shriram Life Insurance Co. Ltd
17. Bharti AXA Life Insurance Co. Ltd
18. Futute Generali Life Insurance Co. Ltd
19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd
20. AEGON Religare Life Insurance Co. Ltd
21. DLF Pramerica Life Insurance Co. Ltd
22. Star Union Dai-ichi Life Insurance Co. Ltd

Latest market share of all insurance companies as of march 2011:

10

Regulatory Issues:
Insurance Regulatory and Development Authority (IRDA) is a national agency of
government of India. It was formed by an act of Indian Parliament known as IRDA
Act 1999 which was amended in 2002 to incorporate some upcoming requirement. It
is responsible for protecting the interest of policy holders, to regulate and promote
orderly growth of Insurance Industry in India. To achieve this objective IRDA has
taken following steps:
1. IRDA has notified protection of policyholders Interest Regulation 2001 to
provide for: policy proposal document is in easily understandable language;
claims procedure in both life and non-life; setting up grievance redress
machinery; speedy settlement of claims and policy holders servicing. The
regulation also provides for payment of interest by insurer for delay in
settlement of claims.
2. Solvency margins are to be maintained by the insurer so that they can be in a
position to meet their obligation towards the policyholder with respect to
payment of claims.

11

3. The Insurance Company has to clearly disclose the benefits, terms and
condition under the policy.
4. The advertisement issued by the insurer should not mislead the insuring
public.
5. Proper grievance redress machinery should be set up in the head office and all
6.

the other offices by the insurer.

If any complaints are received by the policyholder with respect to the services
provided by the insurer under the insurance contact, then the authority takes

up with the insurer.

7. Insurer has to maintain separate account related to the fund of Policyholder.
The funds of the policyholder should be retained within the country.
8. According to the new regime, Insurance companies will have to exposure to
rural and social sector.

PORTER'S FIVE FORCES

12

Threat of New Entrants. The average entrepreneur can't come along and start a
large insurance company. The threat of new entrants lies within the insurance industry
itself. Some companies have carved out niche areas in which they underwrite
insurance. These insurance companies are fearful of being squeezed out by the big
players. Another threat for many insurance companies is other financial services
companies entering the market. What would it take for a bank or investment bank to
start offering insurance products? In some countries, only regulations that prevent
banks and other financial firms from entering the industry. If those barriers were ever
broken down, like they were in the U.S. with the Gramm-Leach-Bliley Act of 1999,
you can be sure that the floodgates will open.

Power of Suppliers. The suppliers of capital might not pose a big threat, but the
threat of suppliers luring away human capital does. If a talented insurance underwriter
is working for a smaller insurance company (or one in a niche industry), there is the
chance that person will be enticed away by larger companies looking to move into a
particular market.

Power of Buyers. The individual doesn't pose much of a threat to the insurance
industry. Large corporate clients have a lot more bargaining power with insurance
companies. Large corporate clients like airlines and pharmaceutical companies pay
millions of dollars a year in premiums. Insurance companies try extremely hard to get
high-margin corporate clients.

Availability of Substitutes. This one is pretty straight forward, for there are plenty of
substitutes in the insurance industry. Most large insurance companies offer similar
suites of services.In some areas of insurance, however, the availability of substitutes
are few and far between. Companies focusing on niche areas usually have a

13

competitive advantage, but this advantage depends entirely on the size of the niche
and on whether there are any barriers preventing other firms from entering.
Competitive Rivalry. The insurance industry is becoming highly competitive. The
difference between one insurance company and another is usually not that great. As a
result, insurance has become more like a commodity - an area in which the insurance
company with the low cost structure, greater efficiency and better customer service
will beat out competitors. Insurance companies also use higher investment returns and
a variety of insurance investment products to try to lure in customers. In the long run,
we're likely to see more consolidation in the insurance industry. Larger companies
prefer to take over or merge with other companies rather than spend the money to
market and advertise to people.

DRIVERS FOR CHANGE IN THE BROAD ENVIRONMENT

Domestic Economic Conditions:
Domestic economic conditions play a major role in growth or downfall of an
Insurance company, No matter how financially stable an insurer is; none is immune
to the slow economic growth. In an Indian economy double digit inflation is one the
uncomfortable factor and RBI which is the central bank of India has a huge task of
controlling the inflation without hampering the economic growth. Trade off between
Interest rates and Inflation has been the core the business of the RBI and the past one
year has been very difficult for the RBI. In an attempt to manage inflation, RBI has
been constantly raising repo rate and reverse-repo rates every quarter but it has not
succeeded in moderating inflation. This simply implies that inflation is more of a
supply side issue than a monetary implication. The implications of this relatively
high interest rates and high inflation regime are unlikely to be positive for insurance
industry. It would be difficult for an Insurance industry to manage return
expectations as they are likely to be high. While competing with a fixed income
product higher assured returns are required for high.
14

Interest rates in order to increase penetration. There may be some reductions in

actual growth rates, but Indians long term fundamentals remain intact as life
Insurance being an industry with long time horizon, it would be able to tide over
economic cycle.
Inflation on the other hand means lower disposal incomes in the hand of the
consumer leading to lower household savings which currently stands at 34.7%,
though significantly lower than china which is 50%.

Global Economic Environment:

According to the Swiss Res newly appointed Economist, Kurl Karl low interest rates
and euro debt crisis will prove to be a problem for insurance industry. According to
Kurt karl momentum of growth has been slowed down due to this two factors, but the
only bright spot according to him is the ongoing growth in the emerging market.
However Kurl is lot more optimistic looking forward to 2013 forecasting a pick-up in
investment yield and premium in a modest improvement in economic conditions.
1. Political Development:
Political developments are the more serious threat in Europe and US. In
Europe this can lead to serious sovereign defaults and also exit from the
euro monetary union.
2. Emerging markets has been negatively impacted by faltering growth in the
developed economy. Also tighter monetary policies on the part of several
emerging economies also slowed down growth.
3. Both global in-force and new business life insurance fell in 2011, but it
again recovered. According to the economist in order to return to the precrisis profitability short- term factors like low investment returns, high
hedging cost and more onerous capital requirement. Life Insurance
industrys capitalization has improved markedly and it is in the better
shape to cope up with the future challenges.
15

4. Because of some Regulatory changes in China and India, coming two

years will see life insurance business in emerging market returning to its
long term trend of around 8%.

Demand Drivers:
Insurance industry in India has become lot more competitive in recent years. With
private players entering into the market, competition level has significantly increased
with more private players trying to gain more market share. Some of the demand
drivers that give change to the smaller companies to compete against giants like Life
Insurance Corporation of India Ltd (LIC) which has 70% market share are:
1. Rural market:
According to the Mckinsey report, titled India Insurance 2012: Fortune
Favors the Bold, finds that the sector is still in a dissident with different
players in different stage of development and market presence. According
to the Mckinseys report the rural penetration is likely to increase from
about 25% at present to around 35-40% in 2012. With 65% of the Life
insurance coming from rich urban class, smaller companies can look for
rural and low income group as potential demand driver.
2. Product Mix;
A better product mix would also drive growth of insurance companies,
with companies making a move to lower the share of single premium
products.
3. Life insurance product can also fill the gap that is created by growing
demand for investment products and long-term savings.

16

COMPANIES IN THE STRONGEST/WEAKEST POSITIONS:

Competitor analysis in marketing and strategic management is a judgment of
strength and weakness of the competitors. Companies generally do this analysis to
understand the strength and weakness of their current and potential competitors.
This analysis provides both offensive and defensive strategy to identify both
opportunity and threats. IDBI federal Life Insurance is one of emerging insurance
company. It is one of the few companies that have shown rapid growth since the day
of its inception. In order to gain higher market Share Company has to understand its
competitors that is their strength and weakness. Competitor analysis will help IDBI
to understand strength and weakness of their competitors. It will IDBI to come up
with offensive or defensive strategy to identify both opportunity and threats.
Some of the main competitors of IDBI federal are:
1. Life Insurance Corporation of India (LIC)
2. ICICI prudential
3. SBI Life
4. HDFC standard Life
5. Bajaj Alliance
1. Life Insurance Corporation of India ( LIC):
LIC was founded in 1956 with the merger of 243 insurance company and
provident societies. It is the largest insurance and investment company in
India. It is a state owned with 100% stake owned by government of India.
Products offered by LIC are:
1. Jeevan Arogya plan:
Jeevan arogya plan is a unique non-linked health insurance plan which
provides health insurance against certain specified health risk. LICs
jeevan arogya plan is a direct competition to IDBIs Healthsurance plan.

2. Bima Account plan:

17

Under this plan the premiums payed by the customer after deduction of all
charges, will be credited to the policyholders account maintained
separately for each policyholder. If all premiums are paid the amount held
in policyholders account will earn an annual interest rate of 6% p.a
3. Endowment plan:
Its a unit linked endowment plan which offers investment cum insurance
cover during the term of the policy.
4. Children Plans
5. Plan for Handicapped Dependents
6. Endowment assurance plans
7. Plans for high worth Individual
8. Money Back Plans
9. Special Money Back Plan for Women
10. Whole Life Plans
11. Term assurance plans
12. Joint Life Plan

KEY SUCCESS FACTORS(KSFs)

18

Post Liberalization Insurance industry in India has become very competitive. With
private players entering into the India market making the market lot more
competitive. Insurance industry in India has become highly competitive with different
companies and individual agents competing against each other to gain higher market
share. In order to gain higher market share companies have to differentiate themselves
from others. Companies can differentiate themselves in the market by using a number
of critical success factors:
1. Product Quality:
One the most important factor that differentiates companies is by the quality of
product it offers. Quality of product instills a confidence in the customer that
the product offered by the company is better. Better the quality of product,
more successful is the company.
2. Developing relationships with the customer:
Insurance Industry is a highly competitive industry. In order to gain the market
share first priority is to be given to the customer. Range of product and
services should be designed to give the customer what he desires.
3. Market Segmentation:
Greater market segmentation should be done in which target audience should
be divided into homogenous groups and products and services should be
targeted towards such market. This would tie company to their client by
customized combination of coverage, easy payment plan, risk management
advice and quick claim handling.

4.

Designing new strategies:

Insurance Industry cannot be satisfied with consolidation of their existing
market, but have to achieve future growth and penetration. Companies must
focus on new distribution channels, strengthening their existing point of
services, direct contact with their ultimate customer, refresh their marketing
setup, new comers should focus on tapping the market which is left
unexploited by public sector companies.
4. Shift towards Rural market:
Rural market is India is still uncovered by this sector. Insurance penetration
can be achieved by tapping the untapped rural market of India.
19

5. Motivating sales force:

Sales force is one the major strength that the company has that could
differentiate them from their competitors. A good sales force can do wonders
to the future of the company, because of which a proper motivation of sales
force is very important for the company. Life Insurance Company should
constantly involve in motivating their sales force so that they can meet their
target on time.
6. Use of technology:
Technology plays a very important role in the success of the company. Internet
based Life insurance will help companies to reduce time and transaction cost
and also improves quality of services to its customer.

INTRODUCTION TO CHILD INSURANCE

Life insurance for your child may not be the first thing that you think about when
you bring them home from the hospital. In fact, you may not even be aware that
Childrens Whole Life insurance is available. We want to help you understand the
whole life insurance options available to your child.
Child Plan is insurance cum investment plan that serves 2 purposes

To financially secure your childs future

To finance the turning points in his life such as higher education and
marriage

20

So, like a double-edged sword, the best Child Plan is designed to protect the future of
your child in case of your unfortunate demise and at the same time, builds a corpus
over a term to be utilized to finance the prime moments in his life like higher
education and marriage.

Need for Child Plans in India:

Child Plan gives you various benefits such as life cover, building a corpus for the
child's education, future needs and the option of adding specific riders. Go ahead and
invest in an Education Plan, but always compare quotes before you finally sign on the
dotted line.
How is it different from a Term Plan?
Term Plan
Is case the Policy Holder
dies

In case the Policy Holder

survives

Death Benefit Paid Policy

Ends

Child Plan
Death Benefit Paid Policy
Continues

Rest

of

the

Premium Paid by Insurer

No Maturity Benefit

Maturity Benefit

Features and Flexibilities of a Typical Child Plan:

Work out the detailed specifications of the needs you are looking to fulfill through a
Child Plan. Here are the key parameters you should look forPremium Amount It more or less depends on the Sum Assured and Maturity
Amount you choose.
Mode of Premium Payment
Regular premium As the name implies, the premium is paid on a regular basis. This
can be yearly, half yearly or even quarterly.
Single premium The premium is paid as a single payment.

21

Sum Assured -The thumb rule to follow is that the Sum Assured should be around 10
times your present income.

Policy Term - An ideal Policy Term for a Child Plan is the time you think your child
needs to get on his feet. If your child is 10 years old, your policy term should be 8
years.
Maturity Amount - Sit with your financial advisor and taking into account the
inflation rate and other such factors, work out a Maturity Amount that you would
require at the end of the Policy Term. Maturity Amount can be received as a lump sum
or in a frequent period of 5 years.
Waiver of Premium This is a kind of rider that comes inbuilt in Child Plans.
However, if this is not a part of the policy, it is always advisable to opt for the same.
In case of death of the insured, this rider enables the policy to continue by passing off
the financial burden to pay the rest of the premium to the insurer.

Partial Withdrawals - Some parents prefer withdrawing chunks of Maturity Amount

at pre-fixed intervals instead of getting a lump sum amount at one go. The intention to
opt for this feature is to meet the financial needs of your kid at the key moments in his
life.
Riders and Benefits These are the add-ons that make your coverage financially and
qualitatively more valuable

Premium Waiver Benefit

Accidental Death and Disability Benefit

Critical Illness Rider Benefit

22

Types of Child Plans

Child ULIPs A fraction of the premium flows into debt instruments and the rest into
equity instruments. The decision of switching between the funds remains in the hands
of the insured. Since its a market linked plan, the return is decided by the net value of
the assets at the maturity period.

Child Endowment Plans - The premium flows into debt instruments, the decision of
which is at the discretion of the insurance company. Return is decided by the bonus
payable on maturity.

A Case Scenario:
Mr. Ketan buys a Child Plan for his 8 year old kid with a policy term of 10 years,
aiming to get a maturity benefit of Rs 20,00,000. He opts for a life cover of Rs
25,00,000. He suffered a heart attack after 4 years the policy began. The insurer is
liable to pay the appointee a sum of Rs 25,00,000 and also to borne the premium to be
paid for the rest of the policy term left i.e 6 years. The child will also get the maturity
benefit of Rs 20,00,000 once he reaches the age of 18 years. The same has been
illustrated:

23

COMPETITORS CHILD PLANS

LICs JEEVAN ANKUR
LICs Jeevan Ankur is a conventional with profits plan, specially designed to meet the
educational and other needs of your child. If you are the parent of a child aged upto 17
years, LICs Jeevan Ankur is the most suitable insurance plan for you which ensures
that your responsibilities are met whether you survive or not and without depending
on anyone else.

24

The risk cover under this plan will be on your life as a parent and the named child
shall be the nominee under the plan. The policy term shall be based on the age at
maturity of the child.
1.Benefits
i) Death benefit:
On death of the Life Assured during the policy term: Basic Sum Assured shall be
payable to the nominee and an income benefit equal to 10% of Basic Sum Assured
shall be payable on each policy anniversary, from the policy anniversary coinciding
with or next following the date of death, till the end of the policy term.
On death of child, when Life Assured is alive: On death of the child, the Life
Assured will have an option to nominate another child/person and the policy will
continue with the same benefit payable to new nominee/legal heirs after the death of
the Life Assured during the term of the policy.
On death of child/nominee after Life Assureds death: The policy shall continue and
the

benefits

shall

be

payable

to

the

legal

heir(s).

ii)Maturity Benefit: At the end of the policy term an assured maturity benefit equal
to Basic Sum assured along with Loyalty Addition, if any, shall be payable
irrespective of survival of the Life Assured.

iii) Loyalty Addition: Depending

upon the Corporations experience the policy

will be eligible for Loyalty addition on the stipulated date of maturity irrespective
of

survival

2. Optional Benefits: You

payment

of
may

choose

of

Life
the

following

additional

Assured.
optional

riders by
premium

i) Accident Benefit Rider: This benefit is available under regular premium

25

policies only. An additional sum equal to Accident Benefit Rider Sum Assured is
payable upon death due to accident. The Accident Benefit Rider Sum Assured may be
opted for an amount upto the Basic Sum Assured subject to minimum of Rs. 25,000
and maximum of Rs. 50 lakh (including all policies with LIC of India and other
insurers). This benefit will be available only till the age nearer birthday of the Life
assured is 70 years.
ii) Critical Illness Rider: An amount equal to Critical Illness Rider Sum Assured
will be payable in case of diagnosis of defined categories of Critical Illnesses. The
Critical Illness Rider Sum Assured may be opted for an amount upto the Basic Sum
Assured subject to a minimum of Rs. 50,000 and a maximum of Rs. 5 lakh (including
all policies with LIC of India). This benefit will be available provided the policy
matures on or before the Life Assured attains 60years of age.
Critical Illness Rider can be availed with or without Premium Waiver Benefit. If
Critical Illness Rider is opted with Premium Waiver Benefit, then in the event of Life
Assured diagnosed with any of the Critical Illnesses covered under the policy, the
total future premium in respect of the policy will be waived. The Basic Sum Assured
under such policies should be equal to the Critical Illness Rider Sum Assured.

3. Eligibility Conditions and Other Restrictions (For Basic Plan):

a) Minimum Sum Assured

: Rs. 100,000

b) Maximum Sum Assured

: No Limit

(The Sum Assured shall be in multiples of Rs. 5000/-)

c) Minimum Age at entry for Life Assured : 18 years (completed)
26

d) Maximum Age at entry for Life Assured : 50 years (nearest birthday)

e) Maximum Maturity Age for Life Assured : 75 years (nearest birthday)
f) Minimum Age at entry for child

: 0 years (last birthday)

g) Maximum Age at entry for child

: 17 years ( last birthday)

h) Minimum Term

: Higher of (18 age of child, 8) years

i) Maximum Term

: (25 age of child) years

4. Sample premium Rates:

Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly mode
(through ECS only) or through SSS mode over the term of policy. Alternatively, a
single premium can be paid.
A grace period of one calendar month but not less than 30 days will be allowed for
payment of yearly or half-yearly or quarterly premiums and 15 days for monthly
premiums.

Following are some of the sample premium rates (exclusive of service tax) per Rs.
1000/- S.A.:
Single Premium
Age

Policy term
10

15

20

25

615.45

494.95

405.95

348.00

30

618.80

503.35

422.10

375.30

40

638.75

541.60

483.60

463.60

20

27

Annual Regular Premium

Age

Policy term
10

15

20

25

20

90.65

56.45

39.70

31.10

30

91.20

57.50

41.35

33.50

40

94.70

62.35

47.80

41.75

6. Revival:
If premiums are not paid within the grace period then the policy will lapse. A lapsed
policy can be revived from the date of first unpaid premium and before the date of
maturity by paying all the arrears of premium together with interest within a period of
five years, subject to submission of satisfactory evidence of continued insurability.
The Corporation reserves the right to accept at original terms, accept at revised terms
or decline the revival of a discontinued policy. The revival of discontinued policy
shall take effect only after the same is approved by the Corporation and is specifically
communicated to the life assured. Riders shall be revived along with the basic plan
and not in isolation.

7. Paid-up Value:
Under regular premium policies, if after atleast three full years premium have been
paid and any subsequent premiums be not duly paid, this policy shall not be wholly
void, but shall continue as a paid-up policy for a reduced paid-up sum assured. This
Paid-Up Sum Assured shall be payable on the date of maturity or on Life Assureds
prior death.

28

Further, in case of death during the term of the policy, the paid up value shall be paid
immediately on death. But, neither income benefit nor paid up value on maturity shall
be payable.
Accident Benefit and Critical Illness riders do not acquire any paid-up value.
8. Surrender Value:
The Guaranteed Surrender Value will be as under:
1. Single Premium Policies: The Guaranteed Surrender value will be available
after completion of atleast one policy year and is equal to 90% of the premium
paid excluding premium for optional rider and extras, if any.
2.

Regular Premium Policies: The Guaranteed surrender value will be

available after completion of three policy years and atleast three full years
premiums have been paid and is equal to 30% of the premiums paid excluding
the premium paid for the first year and all premiums in respect of optional
rider and extras, if any.

9. Policy Loan:
No loan facility will be available under this plan.

10. Service Tax:

29

Service tax, if any, shall be as per the Service Tax laws and the rate of service tax as
applicable from time to time.
The amount of service tax as per the prevailing rates shall be payable by the
policyholder on premium(s) as and when the premiums are paid.
11. Cooling-off period:
If you are not satisfied with the Terms and Conditions of the policy you may return
the policy to them within 15 days from the date of receipt of the policy bond.
12. Exclusion:
Suicide:- This policy shall be void if the Life Assured commits suicide (whether sane
or insane at that time) at any time within one year from the date of commencement of
risk and the Corporation will not entertain any other claim by virtue of this policy
except to the extent of a maximum of 90% of single premium paid excluding any
extra premium (in case of single premium policies).

CHILD CAREER PLAN

Introduction:
This plan is specially designed to meet the increasing educational and other needs of
growing children. It provides the risk cover on the life of child not only during
the policy term but also during the extended term (i.e. 7 years after the expiry of

30

policy term). A number of Survival benefits are payable on surviving by the life
assured

to

the

end

of

the

specified

durations.

Options:
You may choose Sum Assured (S.A.), Maturity Age, Policy Term, Mode of
Premium

payment

Payment
You may

and

Premium
of

pay

the

premiums regularly at

Waiver

Benefit.
Premiums:

yearly, half-yearly, quarterly or

through Salary deductions over the term of policy. Premiums may be paid either
for 6 years or upto 5 years before the policy term.

KOMAL JEEVAN
Product summary:
This is a Children's Money Back Plan that provides financial protection against death
during the term of plan with periodic payments on survival at specified durations.
The plan can be purchased by any of the parent for a child aged 0 -10 years.
Commencement of risk cover:
The risk commences either after 2 years from the date of commencement of policy
or from the policy anniversary immediately following the completion of 7 years of
age of child, whichever is later.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary
deductions, as opted by you, up to the policy anniversary immediately after the life
assured (child) attains 18 years of age or till the earlier death of the life assured.
31

Alternatively, the premium may be paid in one lump sum (Single premium).
Guaranteed

Additions:

The policy provides for the Guaranteed Additions at the rate of

Rs.75 per

thousand Sum Assured for each completed year. The Guaranteed Additions are
payable at the end of the term of the policy or earlier death of the Life Assured.
Loyalty

Additions:

This is a with-profit plan and participates in the profits of the Corporations life
insurance business.

It gets a share of the profits in the form of loyalty

additions which are terminal bonuses payable along with death or maturity
benefit. Loyalty addition may be payable depending
Corporation.

HDFC LIFE
Children's Insurance Plans

32

on the

experience of the

Successful parenting is no mean accomplishment. A huge contributor to this success is

financial planning for your child's future needs at the right age! There is really no
better gift you can give your child, than the promise of a secure future with YoungStar
Plans from HDFC Life.
HDFC Life YoungStar Udaan
Since the birth of the child, parents make sincere efforts to ensure that their child can
dream big without having second thoughts. We, at HDFC Life, are here to help you
empower your childs dreams and live the rest of your life as the proud parents you
deserve to be.
HDFC Life Young Star Udaan, is a traditional participating insurance plan and is ideal
for parents who wish to make provision for:
1.

Academic expenses that occur prior to college education

2.

Specific goals like college fees or marriage expenses etc

3.

All

miscellaneous

and

extracurricular

expenses

that

occur

during

college/school
4.

Three Maturity benefit options to choose from based on which your

survival/maturity benefits payable are decided

1.Aspiration (Endowment benefit) Lumpsum pay-out at maturity
2.Academia (Moneyback benefit) payouts during last 5 policy years with
first guaranteed payout higher than subsequent guaranteed payouts.
3.Career (Moneyback benefit) payouts during last 5 policy years with last
guaranteed payout higher than previous guaranteed payouts.
3. Two Death Benefit options to choose from based on which death benefit
payable are decided
1. Classic: Policy Terminates after payment of

33

death benefit

2. Classic Waiver: Policy continues after payment of death benefit +

Future Premiums waived
4. Limited PPT of 7, 10 or Policy term minus 5 years
5. Flexibility to choose your policy term from 15 to 25 years as per your childs
future needs
6. Guaranteed Additions during first 5 policy years, if applicable
7. Participating plan with accrued bonuses payable at maturity
8. Option to take this policy by filling a Short Medical Questionnaire (SMQ)2
9. Tax Benefits3 under Section 80C and Sec 10(10D) of Income Tax Act 1961.

Survival/Maturity Benefits:
The table below specifies the series of money back/endowment payouts, payable at the end of
each year, for a premium paying or a fully paid-up policy.

SA: Sum Assured on maturity. GA: Guaranteed Additions

34

Death Benefit:
Death Benefit Options

Death Benefits

Classic

Basic

Death

benefit

AccruedGuaranteed Additions+ Accrued

Bonuses, if any
Classic Waiver

Basic Death benefit + Premium Waiver

The table below describes each of the above benefits in detail.

Basic Death Benefit

The basic death benefit shall be the higher of:

o

Sum Assured on Death

105% of Premiums paid

The Sum Assured on Death shall be the higher

of:
o

Sum Assured on Maturity^

10

times

Annualised

Premium for entry age up to 50 years and

7 times Annualised Premium for entry age
greater than 50 years
Premium Waiver

All future outstanding premiums under the

policy will be waived. The contract shall
continue and the benefits as per Survival
benefit

and

available.

35

Maturity

Benefit

shall

be

HDFC SL YoungStar Super Premium

Children insurance plans help build savings so that over time there is enough to
finance your childs education, marriage, house or car. HDFC SL YoungStar Super
Premium, a unit-linked insurance plan (ULIP) designed to accumulate savings for
your child's future, even in your absence.
Every parent naturally wants the best for his or her child in every sphere, particularly
education. Best-in-class education is no longer a luxury; its a must-have for anyone
who wants to excel in his or her career. But that is easier said than done, given the
escalating cost of education at premier institutes coupled with increasing competition.
Fortunately for you, help is at hand. Children insurance plans help build savings so
that over time there is enough to finance your childs education, marriage, house or
car.

Flexibility to choose from 4 funds to suit your risk appetite:

1.

Income Fund: Higher potential returns due to higher duration and

credit exposure.

2.

Balanced Fund: Dynamic equity exposure to enhance the returns

while the debt allocation reduces the volatility.

3.

Blue chip Fund: Investments in large cap equities.

4.

Opportunities Fund: Investments in mid-cap equities.

36

Flexibility to select premium amount no ceiling on maximum premium

Flexibility to select tenure of 10, 15 - 20 years

Flexibility to select the Sum Assured

ADVANTAGES

Save Benefit - In case of unfortunate death of the parent or a critical illness

1. Sum Assured is paid to the beneficiary (child)
2. No need to pay any further premiums as we will pay 100% of the
future premiums
3. On maturity, fund value is again paid to the beneficiary

Save-n-Gain Benefit - In case of unfortunate death of the parent or a critical

illness
1. Sum Assured is paid to the beneficiary (child)
2. No need to pay further premiums as we will pay 50% of the future
premiums towards the policy and 50% of the premiums to the
beneficiary on the premium due date
3. On maturity, fund value is paid to the beneficiary

Customize a plan suited for your child with the premium, Sum Assured and
the plan option of your choice

Manage your investment fund(s) either by switching across fund options or redirecting future premiums into a different fund option

Tax benefits subject to provisions contained under sections 80C and 10(10D)
of the Income Tax Act 1961.

ANALYSIS AND SUMMARY

Industrys Attractiveness and Prospects for Long-Term Profitability:
37

The Indian insurance industry has undergone transformational changes since 2000
when the industry was liberalised. With a one-player market to 24 in 13 years, the
industry has witnessed phases of rapid growth along with extent of growth moderation
and intensifying competition.
There have also been a number of product and operational innovations necessitated by
consumer need and increased competition among the players. Changes in the
regulatory environment also had a path-breaking impact on the development of the
industry. While the insurance industry still struggles to move out of the shadows cast
by the challenges posed by economic uncertainties of the last few years, the strong
fundamentals of the industry augur well for a roadmap to be drawn for sustainable
long-term growth.
The decade 2001-10 was characterized by a period of high growth (compound annual
growth rate of 31 percent in new business premium) and a flat growth (CAGR of
around two percent in new business premium between 2010-12), according to KPMG.
There was exponential growth in the first decade of insurance industry liberalization.
Backed by innovative products and aggressive expansion of distribution, the life
insurance industry grew at jet speed. However, this frenzied growth also brought in its
wake issues related to product design, market conduct, complaints of management
and the necessity to make course correction for the long term health of the industry.
Regulatory changes were introduced during the past two years and life insurance
companies adopted many new customer-centric practices in this period. Productrelated changes, first in ULIPs (Unit Linked Insurance Plans) in September 2011 and
now in traditional products, will have the biggest impact on the industry.

In the long run the insurance industry is still poised for a strong growth as the
domestic economy is expected to grow steadily. This will lead to rise in per capita and
disposable income, while savings are expected to be stable.

38

Insurance growth drivers in India

The demand for insurance products is likely to increase due to the exponential growth
of household savings, purchasing power, the middle class and the countrys working
population. Listed below, are the various underlying growth drivers for Indias
insurance industry:

Growing of the financial industry as a whole

Growth of life and non-life industry

Promoting innovation and removing inefficiency

Competition and orderly growth

Growth of specific insurance segments such as motor insurance

Emerging trends

Multi-distribution i.e. increasing penetration through new modes of

distribution such as the internet, direct and telemarketing and NGOs

Product innovation i.e. increased levels of customization through product

innovation

Claims management i.e. timely and efficient management of claims to prevent

delays which can increase the claims cost.

Profitable growth i.e. expanding product range, developing innovative

products and expanding distribution channels

Regulatory trends i.e. mandated regulatory changes by the IRDA to promote a

competitive environment in both the life and non-life insurance sectors.

Life insurance: key challenges

In FY12, the life insurance industry witnessed a decline in the first year premium
collected which dropped from INR1, 258 billion in FY11 to INR1, 142 billion, a drop

39

of approximately 10%. This was owing to the following challenges that the industry
faced in

Products strategy and design

Cost

Taxation

Prospects and challenges of various channels

Compensation

Customer service

Governance and regulatory issues

Way Forward:
The Indian insurance market is poised for strong growth in the long run.
Significant latent market - The insurance market has a considerable amount of latent
potential, given the fact that the Indian economy is expected to do well in the coming
decades leading to increase in per capita incomes and awareness.
Channelizing industry focus - In meeting the significant potential, the industry has
an increased role and responsibility. Three areas of focus could be a) product
innovation matching the risk profile of the policy holders b) reengineering the
distribution and more significantly c) making sales and marketing more responsible
and answerable.
Distribution - Distribution channels evolved in response to market dynamics and
changing consumer preferences. The alignment of economic incentives with
distribution dynamics should be driven by market forces rather than regulatory
intervention.The stakeholders should eventually work toward maintaining a
favourable environment for stable growth, increasing the penetration of insurance to
rural and increasing the contribution to the economy.

40

THE COMPANY PROFILE

41

THE ORGANISATON: BIRDS VIEW

IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, Indias premier
development and commercial bank, Federal Bank, one of Indias leading private
sector banks and Ageas, a multinational insurance giant based out of Europe. In this
venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity
each.
IDBI federal endeavors to deliver the product that provides value and convenience to
the customer. IDBI federal started in March 2008 and within few months of inception
it became one of the fastest growing new insurance companies. The company offers
its services through a vast nationwide network across the branches of IDBI bank and
Federal Bank in addition to sizeable network of advisors and partners.
Vision:
To be the leader provider of the wealth management, protection and retirement
solution that meets the need of the customer.
Mission:
1. To continue strive to enhance customer experience through innovative
product

offering, dedicated relationship management and superior service

while striving to interact with our customer in most convenient and cost
effective way.
2. To be transparent in the way we deal with our customer and act with
integrity.
3. To invest in and build quality human capital in order to achieve our mission.
Values:
1. Transparency: Crystal clear communication to our partners and stake
holders
2. Value to customer: A product and service offering in which customer
perceive value.
3. Rock solid and Delivery on promise: This translates into being
financially strong, operationally robust and having clarity in claims.
4. Customer friendly: Advice and support in working with customers and
partners.
5. Profit to stakeholders: Balance the interest of the customers, partners,
employees and community at large.

42

HISTORY

2006: IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis
Insurance International NV signed a MoU to start a life insurance company

2008: IDBI Fortis Life Insurance Co. Ltd., which started its operations in
March 2008

2008: IDBI Fortis opens its second branch in Andhra Pradesh in Vijayawada

2008: IDBI Fortis Life positive on assured return products

2008: IDBI Fortis launches the Bondsurance Plan

2009: IDBI Fortis announces Rs 250cr capital infusion

2009: IDBI Fortis launches Retiresurance Pension Plan

2009: IDBI Fortis scores with Goalsurance

2009: IDBI Fortis launches Incomesurance Immediate Annuity

2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009'

2009: IDBI Fortis Life Insurance introduces financial inclusion plan in rural
Orissa

2009: IDBI Fortis launches Termsurance Protection Plan

2009: IDBI Fortis redefines endowment & money back with Incomesurance

2009: IDBI Fortis to open 65 more branches; raise headcount by 1,000

2010: IDBI Fortis now renamed as IDBI Federal Life Insurance Company

BOARD OF DIRECTORS
43

o Vighnesh Shanhane
CEO & Whole Time Director
o Ajay Oberoi
Chief People Officer & Head - Administration
o Aneesh Srivastava
Chief Investment Officer
o Arvind Shahi
Chief Risk Officer
o Ashley Kennedy
Chief Distribution Officer West & East
o Ganesha Ratnam
Chief Distribution Officer North & South
o Karthik Raman
CMO Head Products & Strategy
o Kedar Patki
Chief Financial Officer
o Lalitha Bhatia
Chief operating Officer
o Mahesh Keni
Vice President Internal Audit
o Rajesh Ajgonkar
Chief Compliance & Legal Officer and Company Secretary

44

o Shivank Chandra
Appointed Actuary
o Sivaram Maganty
Executive Vice President Partnerships & E Commerce
o Ishwar S. Gopashetti
Vice President (Actuarial)

THE ORGANISATION STRUCTURE:

VIGHNESH
SAHANE
(MD & CEO)

45

BUSINESS SEGMENTATION:
Businesses Segment can be defined as technique used by the companies to separate
business to reflect key develop, sell and develop differences. Segmentation is
basically done by grouping customer according to homogenous attributes.
Segmentation of business allows companies to focus its marketing where it is most
productive. IDBI federal has done its business segmentation by introducing
different range of products into the market.

PRODUCT:
A product means what we produce. If we produce goods, it means tangible product
and when we produce or generate services, it means intangible service product. A
product is both what a seller has to sell and a buyer has to buy. Thus, an Insurance
company sells services and therefore services are their product. When a person or an
organization buys an Insurance policy from the insurance company, he not only buys
a policy, but along with it the assistance and advice of the agent, the prestige of the
insurance company and the facilities of claims and compensation. It is natural that the
users expect a reasonable return for their investment and the insurance companies
want to maximize their profitability. Hence, while deciding the product portfolio or
the product-mix, the services or the schemes should be motivational. IDBI Federal
provides many products which cater to the needs of the Indian customers.

46

IDBI Federal Products: WEALTHSURANCE

INCOMESURANCE
TERMSURANCE
HEALTHSURANCE
GROUP MICROSURANCE
BONDSURANCE
CHILDSURANCE

Products and Services Offered by IDBI Federal Life Insurance:

1. Childsurance:

IDBI federals childsurance is for the parents who are looking to make their
childs future shock-proof is its powerful insurance benefits. Childsurance
allows to you to protect your child plan with triple insurance benefits so that
your wealth-building plan remains unaffected by unforeseen events and your
child future remains secure.

47

2. Healthsurance:

IDBI federal Healthsurance Hospitalization and surgical plan offers host of

features and benefits that is designed to help the customers to manage extra
burden that comes with hospitalization.

3. Lifesurance:

IDBI feral Lifesurance Plan is a saving insurance plan that helps you to
safeguard your wealth at the same time will present better opportunity to
earning better return.

48

4. Bondsurance:

Bondsurance is designed for customer looking for guaranteed returns which

will not get affected by financial market conditions. It offers guaranteed
return on investment along with life insurance cover.

5.Wealthsurance:

Wealthsurance plan enables the policyholder to save and build wealth to

meet their financial goals. Wealthsurance plan comes up with a wide range
of 13 investment option and 7 insurance benefits with low charge structure
and unmatched flexibility.
6.Homesurance:

Homesurance protection plan provides full insurance cover for properties

under construction, thus ensuring that beneficiary gets the full sanctioned
amount in case of an unfortunate event. It also has an innovative fixed cover
for those who would prepay their loans early.
49

7.Incomesurance:

Knowing customer helped us to combine the Endowment & Money Back

plans into a single plan. It linked the returns to the G-sec rates, transparently
declared by the government. Also, the Guaranteed Annual Payout and other
benefits upon death are tax- free under Sec 10(10D).
8 .Termsurance:

Teramsurance protection plan of IDBI federal offers unique increasing cover

option that can automatically increase the cover every year

without

increasing the premium.

Promotional Practices:
IDBI federal Life Insurance Co Ltd is been involved in number of promotional
practices. IDBI uses different modes of advertisements for promoting their
products. Following are the different modes through which IDBI federal
promotes its products:
1. Print Media:
Print media is one the most reliable, cost effective and easy mode of
advertisement to reach the masses. Main ways of advertising via print media
are:
1. Newspaper:

Paper

Pages

50

Cost (in Rs.)

The Economic

3rd

320 per sq. cm

Times
Times of India

3rd

320 per sq. cm

The Hindu

1st

400 per sq. cm

2. Pamphlets:
Pamphlets are distributed across India at least 5 times in a month without
any cost. This distribution is mainly done to create maximum awareness
about the products/services.
3.Magazines:
There is no specific magazine in which advertisement is given. Magazines
are selected based on their sales and reputation like outlook , money etc.

2.Television:
Television is another mode of advertisement used by IDBI federal Life
Insurance Co. Ltd. Like print media television is also very popular mode of
advertisement which easily grasps attention of masses. Mainly the
advertisements of IDBI federal are shown on Cricket channels, star channels
because of their popularity.
Main promotion is done in the month of February and March to:

Highlight tax benefits

To combat competition as all the competitor insurance companies
would advertise during this time at great frequency.

Also the companies will soon start displaying their advertisement on satellite
TV like Sun network etc.

51

Following are the cost associate with running the TVC:

Region/ Channel

Cost (in Rs.)

Duration/ SLOT

Tamil Nadu

45,000

10 seconds

Local Channels

6000-8000

10 seconds

Cricket channels

60,000 onwards

10 econds

3.Word of Mouth:
A strong network of distributors and parent advisors also helps a lot in
promoting products/ services of IDBI federal by Word of mouth.

4.Online:
A viral campaign also runs on the internet by wherein flash videos of working
of product are explained in a very humorous manner. This video is shown on
www.bosskaboss.com
5.Hoarding:
As of now, total number of Hoardings which are put up in Hyderabad region
counts to be 17.
Cost (in Rs.)

Time Lease

4,00,000

52

Months

6.Local Events:
Some events are created in and out of the city by IDBI federal to create more
awareness about the IDBI federal and free gifts were given wherein local
marketing people interact with the prospects and try to gauge their financial
needs and respectively pitch the products.
The overall costs associated with such an events totals to Rs. 2, 00,000 pm.
Such events are generally conducted in apartments and schools etc.

Business Life Cycle:

Business life cycle is referred as various stages of development of a small business.
Every stage has its own unique characteristics and focus on. There are five different
stages of business Life Cycle:

53

1. Stage 0- The Aspirational Stage:

Stage 0 is referred as the aspiration stage or can also be termed as start-up
stage, this is the starting stage of business where people start their business.
2. Stage 1- The Entry Stage:
Stage 1 is the entry stage where people have decided to start their business and
they work actively building market and offers. IDBI federal was at entry stage
on March 2008 when it started its operations.
3. Stage 2- The Growth Stage:
Stage 2 is the growth stage. The entrepreneurs in the growth stage have a
business plan and are growing their revenues by meeting new clients and
54

customers. IDBI federal being started in March 2008 is in its Growth stage.
The company is growing very rapidly by becoming fastest growing new
insurance company to garner Rs. 100 cr. in premium.
4. Stage 3-The Crucible Stage:
Stage 3 is the Crucible stage or the maturity stage. In this stage the
entrepreneurs work at full stream but the demands for their goods and services
exceed their ability to meet it.
5. Stage 4- The Cruise Stage:
Stage 4 is the cruise stage or can also be termed as the decline stage. In this
stage the entrepreneurs have to identify the bottlenecks that arrived at stage 3
and try to remove them. They have the necessary team that allows them to
focus on their core competencies.

CHAPTER-3
RESEARCH METHEDOLOGY
55

RESEARCH METHODOLOGY

The research so carried out is exploratory research on the market of insurance

products available. The research design formulated involves the following.
SAMPLE: The insurance policy holders or insurance policy prospects, who want buy
a policy
SAMPLE SIZE: The required sample size would range about 100 respondents.

PRIMARY DATA:
The primary data is collected with the help of questionnaire response from the
customers.

56

SECONDARY DATA:
The data is obtained from books and website which help in further process of the
project work.

OBJECTIVES OF THE STUDY

Every organization has to achieve its organization goals. For this it is very essential
for an organization to know about the view of consumers and their competitive
products . This objective of the study is as under: To analyze Life Insurance products of IDBI Federal Life Insurance Co Ltd.
To compare the children insurance products with other companies money back
plans.
To understand the factors contributing to the product and its promotion.
To provide the company with valid and research based suggestions which
might help the company increase the market share.
To know the Pros and Cons of the Childsurance plan.
To make comparative study of the major players in Childsurance plan.
To know about customer acceptance of the product.

57

SCOPE OF THE STUDY

Knowing about insurance based companies in India and performing a

comparative analysis.
Evaluation of child insurance on the basis of customer data collection.
Primary data collection through the questionnaires and generate primary
information by processing the crude data.
Knowing the advantages and disadvantages of insurance policies with IDBI
federal with competitors.
Comparing and highlighting the advantages of the products of IDBI with
reference to children insurance plan.

58

CHAPTER-4
THE DATA ANALYSIS & FINDINGS

59

DATA ANALYSIS
1. Are you insured?

PARTICULARS

NO.OF

PERCENTAGE

RESPONDENTS
YES

56

56%

NO

44

44%

TOTAL

100

100%

FINDINGS: From the above pie chart it is interpreted that 56%

respondents are insured.

60

2.In which company do you have/had policies?

PARTICULARS

NO. OF

PERCENTAGE

RESPONDENTS
LIC
SBI LIFE

61
16

61%
16%

IDBI FEDERAL
HDFC

12
8

12%
8%

OTHERS
TOTAL

3
100

3%
100%

FINDINGS: From the above pie chart , it is interpreted that 61%

respondents

have

policies

12% in IDBI Federal,8% in

in

LIC,16%

in

SBI

Life,

HDFC.

3. Are you aware of child policies?

PARTICULARS

NO. OF

61

PERCENTAGE

RESPONDENTS
YES

65

65%

NO

35

35%

TOTAL

100

100%

FINDINGS: From the above pie chart , it is interpreted that 65% of

respondents are aware about child policies.

4. If yes which companys child policy are you aware?

FINDINGS: From the above pie chart , it is interpreted that 46% of

respondents are aware about IDBI Federal child policy,28% about LIC,
18% about SBI Life.
62

5. Do you have/had a child policy?

FINDINGS: From the above pie chart , it is interpreted that 83% of

respondents do not have child policies.

6. If yes in which company do you have/had?

FINDINGS: IDBI Federal Childsurance was taken by 41% of

who have child policies and then SBI Life followed by LIC.

63

people

7. Why do you/people go for child policies generally?

FINDINGS: From the above pie chart , it is interpreted that 45% of

respondents go for child policy for childs education, followed by future
benefits.

8. How did you come to know about child policies?

FINDINGS: From the above pie chart , it is interpreted that 47% of

respondents came to know about child policies through family and
friends,20% agents and 19% through promotions.

64

9.

Which factor mostly affects your buying decision of child policy ?

FINDINGS: From the above pie chart , it is interpreted that 42% of

respondents go for child policy for more returns and 32% for premium
amount.
10. Any up gradation in child policy do you think should be done? If
yes mention.

FINDINGS: From the above pie chart , it is interpreted that 57% of

respondents wanted upgradation in child policy.
65

11. Are you aware of IDBI federal Childsurance policy? If yes what
is the source?

FINDINGS: From the above pie chart , it is interpreted that 54% of

respondents know about IDBI Federal childsurance policy from family
and friends.
12. IDBI Federal Childsurance is better than other Child policies.

FINDINGS: From the above pie chart , it is interpreted that 65% of

respondents agree that IDBI Federal childsurance policy is better.
13. Have you seen any advertisements or promotions of IDBI
Federal Childsurance policy? If yes where?

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FINDINGS: From the above pie chart , it is interpreted that 43% of

respondents know about IDBI Federal through advertisement in T.V.

FINDINGS OF THE STUDY

FINDINGS:
56% of people from sample are insured.
63% of people from sample have Life insurance and 30% people have health
insurance.
61% of people from sample have policies in LIC, followed by SBI Life.
65% of the people from the sample are aware of Child policies and the rest are
not aware of child policies.
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 46% of people from the sample are aware about IDBI Federal child policy.
83% of people from the sample do not have child policy.
41% of people from the sample have child policies in IDBI followed by SBI
Life.
47% of people from sample came to know about child policy through friends
and family.
Almost 95% from the sample agree that Child policies are very useful.
45% said they take child policies for childs education and the factor which
affects their buying decision is mostly more returns.
54% of people from the sample came to know about Childsurance through
Interns, Family and friends.
Only 20% from the sample knew IDBI Federal through Promotions in media
and social network.

S.W.O.T ANALYSIS
With the above synapses in mind we would like to apply a SWOT Analysis to the
insurance

Major Strengths
Premium rates are increasing and so are commissions.
The variety of products is increasing.
Prospects expect more services from their brokers.

Major Weaknesses
Insurance companies are often slow to respond to changing needs.
There is an increasing trend of financial weakness among the companies.
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 There are more competitors for agencies to compete with banks and Internet
players.

Opportunities
The ability to cross sell financial services is barely being tapped.
Technology is improving to the point that paperless transactions are available.
The client's increasing need for an "insurance consultant" can open new ways
to service the client and generate income.

Threats
The increasing cost and need for insurance might hit a point where a backlash
will occur.
Government regulations on issues like health care, mold and terrorism can
quickly change the direction of insurance. Increasing expenses and lower
profit margins will hit hard on the smaller agencies and insurance companies.
Increasing expenses and lower profit margins will hit hard on the smaller
agencies and insurance companies.

CHAPTER-5
CONCLUSION AND RECOMMENDATIONS
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CONCLUSION

The data were collected from the customers response of the IDBI Federal Life
Insurance Corporation Limited Hyderabad branch. Based on the percentage of the
customers 100 sample size was collected. The age, gender, marital statuses,
educational qualification, occupation, monthly income, were analyzed as personal
information in the questionnaire. According to the collected personal information,
most of the sample customers were young age, single, educated, higher income
customers who got insurance. According to the research the IDBI Federal Life
Insurance Corporation Limited Hyderabad needs to create awareness among people as
only 20% of people know about IDBI Federal Life insurance Co. ltd through
promotions.

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LIMITATIONS OF THE STUDY

Duration of the project is 8 weeks. Within this short time, completion of the
project is a challenge.
Targeting the customers for the product (Childsurance) and conducting
primary research is a challenge.
From the data collected through primary and secondary research analyzing it
and giving recommendations and conclusions within this short time is again a
challenge.
Information is partly based on secondary data and hence the authentic of the
study can be visualized and is measurable.
Level of accuracy of the results of research is restricted to the accuracy level
with which the customers have given their answers and the accuracy level of
the answers cannot be predicted.

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RECOMMENDATIONS AND SUGGESTIONS

From the responses I have collected following are few recommendations given by the
people and few are suggestions given by me:
IDBI Federal Childsurance is a good plan designed for childs future and
security for the childs future in the absence of parents. If it can be redesigned
with some sub-plans in such a way that it fulfills specific needs of customers
like Child education planner, Plan for mentally or physically challenged
children.
The premium amount can be customized for child plans according to the
income level of people so that even low income parents also can insure their
children at least with less maturity benefit.
Using Childsurance giving some less interest rate for education loans in IDBI
bank can be provided.
Awareness among people about IDBI Federal Childsurance is very less so it
will be better if promotions are increased in TV, Radio, Internet, newspapers in
order to build the brand image.
To ensure increase in sales they can tie up with the hospitals also.
They should highlight the benefits and should differentiate from other child
policies in the promotions and more awareness is needed.
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 Expansion of branches even in rural areas is required.

Facilitating customers by linking policies to bank accounts so that money can
be drawn from the account every year if the policy holder wants it to happen.

QUESTIONNAIRE
1. Gender
a) Male
b) Female

2. Marital Status
a) Single
b) Married
3. If married how many children you have?
a) 1
b) 2
c) >=3
d) None
4. Age of your child/children?
a) 1 month - 4 years
b) 5 years - 10 years
c) 11years-17 years
d) 18years & above

5.

Occupation
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a) Govt sector
b) Private sector
c) Businessmen
d) Others.

6.

Education Qualification
a) Post Graduate & above
b) Graduate
c) 12th passed
d) 10th passed

7. Annual Income
a) 6,00,000 &above
b) 3,00,000-5,00,000
c) 1,00,000-2,00,000
d) Below 1,00,000
8. Are you insured?
a) yes
b) No
9. If yes which policies do u have?
10. In which company do you have/had policy?
a) LIC
b) SBI Life
c) IDBI Federal
d) HDFC
e) others

11. Are you aware about child policies?

a) yes
b) No
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12. If yes which companys child policy are you aware?

a) LIC
b) SBI Life
c) IDBI Federal
d) HDFC
e) others
13. Do you have/had child policy?
a)Yes
b)No
14. If yes which company you have/had child policy?
a) LIC
b) SBI Life
c) IDBI Federal
d) HDFC
e) others
15. Why do you/people go for child policies generally?
a) Education
b) Childs Marriage
c) Future benefits
d) Others

16. How did you come to know about child policies?

a) Agents
b) Family &Friends
c) Promotions
d) Others

17. Child policies are very useful

a) Strongly Agree
b) Agree
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c) Strongly Disagree
d) Disagree
18. Which factor mostly affects your buying decision of child policy
a)Premium Amount
b)Premium paying term
c)More returns
d)Others
19. Any up gradation in child policy do you think should be done?

20. Are you aware of IDBI federal Childsurance policy? If yes what is the
source?
a) Agents
b) Family &Friends
c) Promotions
d) Others

21. IDBI Federal Childsurance is better than other Child policies?

a) Strongly Agree
b) Agree
c) Strongly Disagree
d) Disagree

22. Have you seen any advertisements or promotions of IDBI Federal

Childsurance policy? If yes where?
a) T.V
b) Internet
c) Newspaper
d) others

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