A

PROJECT REPORT ON THE

CONSUMER BUYING BEHAVIOR TOWARDS FINANCIAL

PRODUCTS OF IDBI FEDERAL
At

SUBMITTED TO:

PARUL INSTITUTE OF MANAGEMENT & RESEARCH (MBA)

In the partial fulfillment of the requirements for the award of degree
of

Master of Business Administration (MBA-Regular)

Submitted by
MANSI PATEL
SEM - II
(150617200123)
Under The Guidance of
PROF.PARESH PATE

INSTITUTE CERTIFICATE
It is here by certified that the Summer Internship Report submitted in partial fulfillment of Master
of Business Administration at from Parul Institute of Management & Research, (MBA)
Vadodara by Mansi M. Patel, Enrolment No. 150617200123 has been completed under my
guidance and it is satisfactory.

Date:

Signature of the Guide

Paresh Patel
(Professor)

Signature of the Director

Dr. Bijal Zaveri
(Director)

DECLARATION:
I Patel Mansi Patel, hereby declare that the Research report entitled Consumer
buying behavior towards financial products of IDBI Federal is an original piece of
work done by me for the fulfillment of degree of Master of Business
Administration and whatever information has been taken from any source has been
duly acknowledged.

Date:
Student name: Mansi M. Patel
Signature:

ACKNOWLEDGEMENT
Training is major part of study in respect of MBA or any other course. Through these
report I want to express my whole gratitude towards all those persons who have
guided me in preparation of this report and also provided me organizational training.
It would like to my deferential thanks to, Dr.Bijal Zaveri (Dean, faculty of management
studies, Parul university of Baroda) for her encouragement and blessing on my way of
progress.
For this report I received full support from all quarters. Firstly I would be thankful to
Prof.Paresh Patel (Project Guide) who has advised me the right way for training and
I am also thankful to all the Management Faculties.
I am thankful to Miss Honey Javd, the trainer of IDBI Federal Life Insurance. who
has given me the permission for my summer training and provided me the useful
knowledge & training of Insurance.
Last but not least I am thankful to all other departmental head & staff of the company
who have shared their incredible knowledge and experience with me and given me
full support in preparation of this report.

MANSI M PATEL

PREFACE
The M.B.A program is well structured and integrated course of business studies. The main
objective of practical training at M.B.A level is to develop skill in student by supplement to the
theoretical study of business management in general. Industrial training helps to gain real life
knowledge about the industrial environment and business practices. The MBA program provides
student with a fundamental knowledge of business and organizational functions and activities, as
well as an exposure to strategic thinking of management.
In every professional course, training is an important factor. Profession gives me theoretical
knowledge of various subjects in the college but they are practically exposed of such subjects
when they get the training in the organization. It is only the training through which I come to
know that what an industry is and how it works. I can learn about various departmental
operations being performed in the industry, which would, in return, help me in the future when I
will enter the practical field.
Training is an integral part of MBA and each and every student has to undergo the training for 60
days in a company and then prepare a project report on the same after the completion of training.
During this whole training I got a lot of experience and came to know about the management
practices in real that how it differs from those of theoretical knowledge and the practically in the
real life.
In today's globalization world, where cut throat competition is prevailing in the market,
theoretical knowledge is not sufficient. Beside this one need to have practical knowledge, which
would help to individual in his/her carrier activities and it is true that "Experience is best
teacher".

EXECUTIVE SUMMERY
My internship in IDBI Federal Life Insurance Co Ltd started on 10th May 2016. As per the
program we had training for IRDA and the different products offered by the company to pitch for
our prospective clients.
The work assigned to me was to achieve a sales target of 2 policies each of minimum Rs. 15,000
annually in terms of premium collected. I managed to convert my pitches into sales and sell 2
policies for the company.
Along with selling I also worked on the project Consumer Buying Behavior towards financial
products of IDBI Federal. The project is focused on analyzing the factors which aim at
determining the customers buying behavior towards financial products of IDBI Federal. Buying
behavior is a vast and important marketing subject. It is mainly focused in trying to understand
the various key factors which influence a prospective consumer of life insurance the most when
considering the purchase of an insurance product. Understanding these factors is a critical task. A
questionnaire was prepared and I surveyed 100 respondents to understand their buying behavior
and pattern.

INDEX
SR
NO

TABLE OF CONTENTS

PAGE
NO.

Declaration
Acknowledgement
Preface
Executive summary
CH.1 INTRODUCTION

1.1

Problem Statement

1.2

Rationale of the Problem

1.3

Consumer Buying Behavior

CH.2 DETAILS OF THE ORGANIZATION

2.1

History of Insurance

2.2

Industry background

2.2.1) A Brief History of Insurance Sector in India

2.2.2) Indian Insurance Market

10

2.2.3) Industry Dynamics

11

2.2.4) Types of Insurance

11

IDBI Federal Life Insurance Co. Ltd

12

2.3.1) Products in Brief

15

2.3.2) Organizational Structure

17

2.3.3) HR Practices

19

SWOT Analysis

21

2.3

2.4

CH.3 RELEVANT LITERATURE REVIEW

Review of Relevant Literature

CH.4 RESEARCH METHODOLOGY

23
24
26

4.1

Research Objective

27

4.2

Scope of the Study

27

4.3

Research design

28

4.4

Data Collection Method

29

4.5

Limitation of the Study

30

4.6

Presentation of Data and Analysis

31

CH.5 DATA ANALYSIS AND INTERPRETATION

42

5.1

Findings and Interpretation of Findings

43

5.2

Conclusion

46

CH.6 RECOMMENDATIONS

47

6.1

Descriptions of Recommendations / suggestions

48

6.2

Gains from the Project

50

6.3

Scope for Further Work

51

References / Bibliography

52

ANNEXURE

53

CHAPTER 1: INTRODUCTION

1|Page

1.1) Problem statement:

IDBI Federal Life Insurance is still a growing company in the insurance sector and has
many tough competitors so it is very important for the company to know the perception
of the potential customers and there buying behavior. Therefore the managerial decision
problem or the problem at hand is to understand the consumer buying behavior of
consumers towards the financial products of IDBI Federal Life Insurance and reaction
towards the same. The main of this project are:

2|Page

To analyze the investment perception about IDBI Federal.

To study the consumer behavior towards financial products of IDBI Federal.

To study the reactions of the consumers with reference to IDBI Federal.

To suggest ways for creating awareness about the products of IDBI Federal.

To find various competitors of IDBI Federal.

1.2) Rationale of the problem:

In todays corporate and competitive world, the insurance sector has a potential of huge
growth as compared to other sector. Insurance has maximum growth rate of 70-80% according to
the report by Market Research Firm RNCOS, analyzing the Indian Insurance Market. Large
insurance sector is a sector which is largely driven by propensity of people to save.

Yet nearly 80% of Indian population is without life insurance cover and this part of the
population is also subject T to weak social security and pension system with hardly any old age
income security. Thus it is an indicator that growth potential for the insurance sector is immense.

In the introduction stage of the product life cycle a firm seeks to create awareness and
develop a market for the product and IDBI Federal Life Insurance Co Ltd is in its introduction
stage of its PLC.
Thus this report will help me in understanding what are the consumers perception and
buying behavior towards IDBI Federal and will help me to recommend those crucial factors
which influence a prospective life insurance investor the most when they go ahead in purchasing
a life insurance product, so that they can create maximum awareness and attract maximum
customers and thus develop a market for their customers.

3|Page

1.3) Consumer Buying Behavior:

Consumer Buying Behavior may be dened as the interplay of forces that takes place
during a consumption process, within a consumers self and his environment.

- This interaction takes place between three elements viz. knowledge, affect and behavior;
- It continues through pre-purchase activity to the post purchase experience;
- it includes the stages of evaluating, acquiring, using and disposing of goods and services.
The consumer includes both personal consumers and business/industrial/organizational
consumers. Consumer behavior explains the reasons and logic that underlie purchasing decisions
and consumption patterns; it explains the processes through which buyers make decisions.

The study includes within its purview, the interplay between cognition, affect and
behavior that goes on within a consumer during the consumption process: selecting, using and
disposing of goods and services.

Cognition: This includes within its ambit the knowledge, information processing and
thinking part; It includes the mental processes involved in processing of information,
thinking and interpretation of stimuli (people, objects, things, places and events). In our
case, stimuli would be product or service offering.

Affect: This is the feelings part. It includes the favorable or unfavorable feelings and
corresponding emotions towards stimuli (e.g. towards a product or service offering or a
brand). These vary in direction, intensity and persistence.

Behavior: This is the visible part. In our case, this could be the purchase activity: to
buy or not a buy (again specific to a product or service offering, a brand or even related
to any of the 4 Ps).

4|Page

CHAPTER 2: DETAILS OF THE ORGANIZATION

5|Page

2.1) History of Insurance:

In some sense we can say that insurance appeared simultaneously with appearance of
human society. In earlier economies, we can see insurance in the form of people helping each
other. For example, if a house is burnt, the members of the community help build a new one.
Should the same thing happen to ones neighbor, the other neighbors must come to help?
Otherwise, neighbors will not receive help in the future. Insurance in the modern sense,
started as a methods of transferring or distributing risk, were practiced by Chinese and
Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants
travelling treacherous river rapids would redistribute their cargo across many vessels to limit the
loss due to any single vessels capsizing. The Babylonians developed a system which was
recorded in the famous Code of Hammurabi, c.1750 BC, and practiced by early Mediterranean
sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an
additional sum in exchange for the lenders guarantee to cancel the loan should the shipment be
stolen.
Greek merchants were the first to insure their people and made it official by registering
the insuring process in governmental notary offices. They invented the concept of the general
average. Merchants whose goods were being shipped together would pay a proportionally
divided premium which would be used to reimburse any merchant whose goods were jettisoned
during storm or sinking of the vessel in the sea. The Greeks and Romans introduced the origins
of health and life insurance in 600 AD when they organized guilds called-benevolent societies
which cared for the families and paid funeral expenses of members upon death. Guides in the
middle Ages served a similar purpose. Before insurance was established in the late 17th century,
friendly societies existed in England, in which people donated amounts of money to a general
sum that could be used for emergencies. Separate insurance contracts (i.e., insurance policies not
bundled with loans or others kinds of contracts) were invented in Greeks rules in the 14th
century, as were insurance pools backed by pledges of landed estates.

6|Page

These new insurance contracts allowed insurance to be separated from investment, a

separation of roles that first proved useful in marine insurance. Insurance became far more
sophisticated in post-Renaissance Europe, and specialized varieties developed. Insurance as we
know today can be traced to the Great Fire of London, which in 1666 A.D devoured 13,200
houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In
1680, he established Englands first fire insurance company, the fire office to insure brick and
frame homes. The first insurance company in the United States underwrote fire insurance and
was formed in Charles Town (modern-day Charleston), South Carolina, in 1732.

7|Page

2.2) Industry background:

The insurance industries of India consist of 51 insurance companies of which 24 are in
life insurance business and 27 are non-life insurance. Among the life insurance, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from that, among the non-life
Insurance, there are six public sector insurers. In addition to these, there is sole national
reinsurer, namely, General Insurance Corporation of India. Other stakeholders in Indian
insurance market include Agents (Individual and Corporate), Brokers, Surveyors and Third Party
Administrators servicing Health Insurance claims. Out of 27 non-life insurance companies, 4
private sector insurers are registrated to underwrite policies exclusively in Health, Personal
Accident and travel insurance segments. They are Star Health and Allied Insurance Company
Ltd, Apollo Munich Health Insurance Company Ltd and Relegate Health Insurance Company
Ltd. There are two more specialized insurers belonging to public sector, namely, Export Credit
Guarantee Corporation of India for credit insurance and Agriculture insurance company Ltd for
Crop Insurance. Insurance penetration of India i.e. Premium collected by Indian insurers is
4.10% of GDP in FY 2011-12. Per capita premium underwritten i.e. insurance destiny in India
during FY 2011-12 is US$59.0.
The insurance sector in India has come to a full circle from being an open competitive
market to nationalization and back to a liberalization market again. Tracing the developments in
the Indian insurance sector reviles the 360-degre turn witnessed over a period of almost two
centuries.

8|Page

2.2.1) A Brief History of Insurance Sector in India:

Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company started by Europeans in Calcutta was the first life insurance company
on Indian soil. All the insurance companies established during that period were brought up with
the purpose of looking after the needs of European community and Indian natives were not being
insured be these companies. However, later with the effort of eminent people like Babu Muttylal
seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives and heavy extra premiums were being charged on them.
Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company
in the year 1870, and covered Indian lives at normal rates.
Insurance is an Rs450 billions industry in India. The life insurance segment writes about
80% of overall market value. Indian insurance market was at its all-time high in 2003 with a
growth of about 17.4% over the previous year. Since 2001 insurance segment writes banking
service, it adds about 7% to the countrys GDP.

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

1818: oriental Life Insurance Company, the first life insurance company on Indian soil
started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its
business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the
life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non -life insurance business.

9|Page

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crores from the Government of India.

2.2.2) Indian Insurance Market:

The insurance sector which stood at a strong US$ 72 billion in 2012 has the potential to grow to
US$ 280 billion by 2020. This growth is driven by India's favorable regulatory environment which
guarantees stability and fair play. This environment has given rise to an insurance market which encourages
foreign investors to tap into the sector's massive potential. Ever since the Indian government liberalized the
insurance sector in 2000 and opened the doors for private participation, the sector has gone from strength to
strength.
The resultant competition has provided the consumer with a never -before -seen range of products and providers, and
also enhanced service levels markedly. The health of the insurance sector reflects a country's economy. This sector not only
generates long-term funds for infrastructure development, but also increases a country's risk -taking capacity. India's
economic growth since the turn of the century is viewed as a significant development in the global economy. This view is
helped in no small part by a booming insurance industry.

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2.2.3) Industry Dynamics:

Factors that influence consistent growth in insurance sector are:

Effective distribution channels The efficiency and cost of the various distribution strategies used by companies
are significant to their success in the insurance business. This particularly holds true for the retail business.

Focus on overall financial inclusion As time evolves, so must the approach of the insurance sector in India. The
objective of the insurance sector should ideally be to offer a broader range of activities to a wider populace.

Consumer needs and preferences The growth of India's insurance industry can be attributed to product
innovation, dynamic distribution channels, and vibrant publicity and promotional campaigns run by insurance
companies. Benefits attached to the products and the manner in which they are delivered (through various marketing
tie- ups) have helped bring customers and insurance companies closer to each other and made the latter more relevant

2.2.4) Types of Insurances:

Insurance business is divided into four classes:
1. Life Insurance
2. Fire
3. Marine
4. Miscellaneous Insurance.

Life insurers undertake the Life Insurance business; general insurers handle the rest. The Business of
insurance essentially means defraying risks attached to an activity (including life) and sharing the
risks between various entities, both persons and organizations. Insurance companies are important
players in financial markets as they collect and invest large amounts of premium in various
investment instruments.

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2.3) IDBI Federal Life Insurance Co. Ltd.:

IDBI Federal Life Insurance Co Ltd is a joint -venture of IDBI Bank, India's premier development and
commercial bank, Federal Bank, one of India's 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. At IDBI Federal, we endeavor to deliver products that provide value and
convenience to the customer. Through a continuous process of innovation in product and service delivery we
intend to deliver world- class wealth management, protection and retirement solutions to Indian customers.
Having started in March 2008, in just five months of inception we became one of the fastest growing new
insurance companies to garner Rs100 Cr in premiums. The company offers its services through a vast
nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network
of advisors and partners. As on January 31st 2011, the company has issued over 2.68 lakh policies with
over Rs14, 230 Cr in Sum Assured.

About the sponsors of IDBI Federal Life Insurance Co Ltd:

IDBI Bank Ltd. continues to be, since its inception. India's premier industrial development bank.
Created in 1996 to support India's industrial backbone, IDBI Bank has since evolved into a powerhouse of
industrial and retail finance. Today, it is amongst India's foremost commercial banks, with a wide range of
innovative products and services, serving retail and corporate customers in all corners of the country from
783 branches and 1328 ATMs. The Bank offers its customers an extensive range of diversified services
including project financing, term lending, working capital facilities, lease finance, venture capital, loan
syndication, corporate advisory services and legal and technical advisory services to its corporate clients as
well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI
Bank has been instrumental in sponsoring the development of key institutions involved in India's financial
sector National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd,
SHCIL (Stock Holding Corporation of India Ltd), CARE (Credit Analysis and Research Ltd)

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Federal Bank is one of India's leading private sector banks, with a dominant presence in the state of
Kerala. It has a strong network of over 739 branches and 797 ATMs spread across India. The bank
provides over four million retail customers with a wide variety of financial products. Federal Bank is one of
the first large Indian banks to have an entirely automated and interconnected branch network. In addition to
interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile
Banking, Tele Banking, Any Where Banking, debit cards, online bill payment and call Centre facilities to
offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing
innovative technological solutions to its customers and the Bank has won several awards and
recommendations.

Ageas is an international insurance company with a heritage spanning more than 180 years. Ranked
among the top 20 insurance companies in Europe. Ageas has chosen to concentrate its business
activities in Europe and Asia, which together make up the largest share of the its business activities
in Europe and Asia, which together make up the largest share of the global insurance market. They are
grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia. It is an undisputed
leader in the Belgian market for individual life and employee benefits, as well as a leading non -life player,
through AG Insurance. Internationally Ageas has a strong presence in the UK, where it is the second
largest player in private car insurance. The company also has subsidiaries in France. Germany and I
long Kong. Ageas has a track record in developing partnerships with strong financial institutions and key
distributors in different markets around the world and successfully operates partnerships in Luxembourg,
Italy, Portugal, China, Malaysia, India and Thailand. Ages employs more than 13,000 people and has annual
inflows of almost EUR 18billion.

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Vision, Mission and Values of the IDBI Federal:

Vision:
To be the leading provider of wealth management, protection and retirement solutions that meets the needs of our
customers and adds value to their lives.

Mission:

To continually strive to enhance customer experience through innovative product offerings, dedicated
relationship management and superior service delivery while striving to interact with our customers in
the most convenient and cost effective manner.

To be transparent in the way we deal with our customers and to act with integrity.

To invest in and build quality human capital in order to achieve their mission.

Values:

Transparency: Crystal Clear communication to our partners and stakeholders.

Value to Customers: A product and service offering in which customers perceive value.

Rock Solid and Delivery on Promise: This translates into being financially strong, operationally
robust and having clarity in claims.

Customer -friendly: Advice and support in working with customers and partners.

Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholders and the
community at large

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2.3.1) Products in Brief:

1) IDBI Federal Lifesurance Savings Insurance Plan : is a fixed term non -linked plan that
provides twin benefits of long-term savings and life cover. With customers small savings
will help them to realize their big dreams that they have for their family. The benefits of life
cover will provide financial security to their family in their absence.

2) IDBI Federal Childsurance Saving Protection Insurance Plan: is a non linked endowment
plan that ensures a child future. Childsurance plan is designed to give their customers
guaranteed annual payouts. In the unfortunate event of the parents not around the policy
would continue exactly as they have planned it without any further premium being paid. In
other words the plan ensures that their child gets to live his/her dream exactly they have
planned.

3) IDBI Federal Incomesurance Guaranteed Money Back Insurance Plan: is non- linked non participating money back plan which gives guaranteed return on an investment so that the
customers stop worrying about their future. This plan also guarantees a secure future for their
families even when they are not around.

4) Wealthsurance Growth Insurance Plan: is a unit -linked plan that gives customer the
freedom to build his wealth exactly the way he wants. The IDBI Federal Wealthsurance
Growth Insurance Plan is a regular premium unit -linked insurance plan. A plan that gives you
freedom to decide how much you want to invest and for how long you want to stay invested.
With a bouquet of 9 fund offerings, it gives you how long you want to stay invested. With a
bouquet of 9 fund offerings, it gives you the freedom to invest in one or more funds, basis
your risk appetite and financial goals in life. Plus it comes with a life cover benefit that
ensures financial security for your loved ones. In a nutshell, a smart investment plan that
helps you designs your investments, your way!

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5) Wealthsurance Suvidha Growth Insurance Plan: is a simple unit-linked plan that

helps to build wealth wed ease and even protects your loved ones a life covers in your
absence. It is a plan that helps you take your first step towards wealth creation and that
too, with ease. What's more, the life cover with this plan provides financial protection to
your loved ones.

6) Wealthsurance Future Star insurance Plan: is a unit-linked insurance plan that

enables the customer to fulfill his childs dream This plan with its occlusive 'waiver of
premium benefit ensures Mat the plan continues even in the case of an eventuality and
provides the maturity benefit as you had initially planned.

7) Wealthsurance Growth Insurance Plan SP: The IDBI Federal Wealthsurance SP is a

single premium unit-linked Insurance plan. A one time investment plan, whereby
paying the premium once, you allow your investment to enjoy returns of the selected
funds The plan also offers your life cover providing your loved ones with financial
protection in case of any eventuality. In a nutshell, it is a smart investment plan that helps
you maximize the potential of your windfall, rather than let it sit idle.

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2.3.2) Organizational Structure:

Vighnesh Shahane
(MD and CEO)

Aneesh Khanna
(Country Head Sales)

North Zone Head

Area Agency
Head

South Zone Head

Area Agency Head

East Zone Head

West Zone Head

Area Agency Head

Area Agency
Head

Manager
Distribution
Deputy
Chief Senior

Manager
Distribution
Deputy
Senior

Manager
Distribution
Deputy
Chief Senior

Manager
Distribution
Deputy
Senior

Distributer
And Trainees
And Agencies

Distributer
And Trainees
And Agencies

Distributer
And Trainees
And Agencies

Distributer
And Trainees
And Agencies

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Zonal-Wise organizational Structure:

Country Head

NORTH
ZONEHEAD

EAST
ZONEHEAD

PUNJAB

MUMBAI

LUCKNOW

LUCKNOW

UP

ORISSA

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WEST
ZONEHEAD

SOUTH
ZONEHEAD

GUJARAT

COIMBA
TORE

JAIPUR

BANGLO
RE
HYDERA
BAD

2.3.3) HR Practices:
Around 2200 Employees and about 7500 agents are working for the organization. IDBI federal
Bank provides many facilities to the employees as well as agents. Let us see the Human resource
department structure, Recruitment process, Training process and other privileges of the
Organization. At IDBI Federal, the managerial style is Participative in nature.

Recruitment Process
The Recruitment process of IDBI Federal is completely through the resume screening and
interview methods. Based on the Real time experience the candidates are recruited to the
organization. The selected candidates are proposed to Achieve target policies. The Target of the
each employee is 5 products sale. So, each candidate should sell 5 products to make him as the
employee of the organization. This is the selection method where the organization is recruiting
the lower level managers which are based on the task performing.

Training
Training is must for every individual when he enters into the organization. Even though
the candidate has experience he also should get training. Why because the organization culture,
values and beliefs are different from one organization to other. Thats why the training program
plays a key role in every organization. Training program following by IDBI Federal is different
at various levels. Mainly in training program the company concentrates on sales managers,
agents, operations executives and tele-callers.

Performance Appraisal
The Performance appraisal of IDBI federal is based upon 2 types.
1. Employees Appraisal.
2. Agents Appraisal.

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Employees Appraisal: The Employee appraisal is based upon the target system. There are three
levels in the performance appraisal.

Lower level: For the Post of Manager Level, the employee must achieve the product sales
worth of 7.2 lakhs at the Annual period of the year.

Higher level: For the Post of Senior Manager Level, the employee must achieve the
product sales worth of 22.2 lakhs at the Annual period of the year

Agents Appraisal: The Agents are paid with commission percentage for every sale
which is depending upon the products.

AWARDS
The awards and the other grievances are provided only based upon the individual performance.
The Company Provides free foreign trip for the employees all the year and best performer
Awards of the year.

OTHER RELAVANT INFORMATION

The Company provides non-interest loan for the employees in the 1081 Bank and Federal Bank.
It also provides health insurance to the family members of the employee. Programs like Quick
Starter king/Queen, Hero March, Super April, Best performer and Best Project augmented the
morale of the interns. Monetary compensation in the form of commission and non-monetary
compensation (Stature oriented) like Best performer and Best project really gave us the drive to
work in for the company.

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2.4) Swot Analysis:

Strengths:

Wide range of products to suit the need of each type of customer

Sufficient cash base and stable foreign shareholders.

Can learn from the mistakes of the first 17 life insurance companies of India

Uses a unique method of expansion, in which its next branch in a region is opened only
when, the earlier one reaches its break-even point.

Weaknesses:

Late entrant in the market.

Lack of knowledge about the company and the products of the company. Need brand
awareness and promotional activities.

Opportunities:

Abilities to tap the growing internet space for marketing and selling the products.

Prospective easing up of the FDI in insurance industry to 49% from the current 26%.

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Threats:

Presence of highly competitive market. Presence of established players such as LIC, SBI
life, ICICI prudential etc.

Increasing expenses and lowering margins due to cut throat competition are hitting hart
companies with low market share.

The insurance companies are being over regulated by IRDA. It is hampering the
Companies

Government regulations on issues like health care and terrorism can quickly change the
direction of insurance.

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CHAPTER 3: RELEVANT LITERATURE REVIEW:

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Review of Relevant Literature:

Ravipa L. & Mark S. (2004) state that customer perceived that life insurance is a longterm investment. With the long-term policy of life insurance, customers want to confirm
that they understand how to receive their money back when the maturity date of
insurance policy in the future, or that their family knows how to get it when they have
any unfortunately happen. Fundamentally, customers need personal commitment from
salespeople whom they trust to make sure their money will not be lost cause of the poor
investment by the insurance company. Besides that, customers want to have someone
who will help them take care their interest and can be contacted easily when they need
claim for themselves.

Moller (2004) found that income and social security which are the own wages, ability to
provide for family, insurance against illness and death, and income in old age have been
regarded as one of the major pointers of quality of life, this point of view stresses the
importance of insurance to human life.

Tajudeen, Ayantunji and Dallah (2009) believed that people with education have more
positive attitude toward insurance than people who less education ones. Besides that, they
also find out the respondents who have highest positive attitude towards insurance is the
people in age group between 56 and 65 years than other age groups this is due to the
people in this age group are at the end of the active life and they are more aware of their
retirement life. They also found that high household income groups have highest positive
attitude toward insurance than the low household incomes groups, in fact, the wealthy
household comparatively feel protected commonly in Nigerian economic environment.
From the other point of view, the low household income groups are less authorized and
usually they feel that the insurance is further than their reach.

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Kunreuther (1979) It is not the magnitude of a potential loss that inspires people to buy
insurance voluntarily it is the frequency with which a loss is likely to occur.

Roger. A. Formisano (1981) examined, via consumer interviews, the impact of the
National Association of Insurance Commissioners Model Life Insurance Solicitation
Regulation as implemented in New Jersey. A substantial portion of the insurance buyers
sampled did not become aware of the provisions of the regulation aimed to improve their
buying ability. Further, many life insurance buyers were not well informed concerning
the nature and operation of life insurance contracts, and in particular, the life insurance
policies that they had purchased.

Dr. Praveen Sahu, Gaurav Jaiswal & Vijay Kumar Pandey (2009) stated that the
consumers perception towards Life Insurance Policies is positive. It developed a positive
mind sets for their investment pattern, in insurance policies. Still some actions are needed
for developing insurance market. The major factors playing the role in developing
consumers perception towards Life Insurance Policies are Consumer Loyalty, Service
Quality, Ease of Procedures, Satisfaction Level, Company Image, and Company-Client
Relationship.

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CHAPTER 4: RESEARCH METHODOLOGY

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4.1) Research Objective:

Data collection is an important aspect of any type of research study. It is a term used to describe
a process of preparing and collecting data from all sources and observations. Data has been
collected from both primary and secondary resources.
Primary Data: obtaining first hand by speaking to customers and getting the
questionnaire from filled by them about the insurance products of IDBI Federal and
observing their views, reactions and beliefs about the overall insurance products.

4.2) Scope of the Study:

The scope of a subject refers to everything that is studied as part of that subject. When we
set out explain the scope of consumer behavior we need to refer to all that which forms
part of consumer behavior.

Consumer behavior includes not only the actual buyer and his act of buying but also the
various roles played by different individuals and the influence they exert on final
purchase decision.

To define the scope of a subject it is important to set parameter of a framework within

which it shall be studied. This framework is made up of three main sections-the decision
process as represented by the inner-most circle, the individual determinants on the middle
circle and the external environment which is represented by the outer circle. The study of
all these three sections constitutes the scope of consumer behavior.

In this project I will discover what are the featured that people consider before buying an
insurance policy and what is their buying behavior towards the products of IDBI Federal.
27 | P a g e

4.3) Research Design:

1. Research Design: Descriptive Research Design

2. Sample Frame: Due to the nature of the study, people residing or working in
Vadodara have been taken into consideration.

3. Sample Unit: People belonging to any age group with or without an insurance policy
have been taken into consideration.

4. Sample Size: Keeping in mind all the constraints the size of the sample of the study
was selected as 100.

5. Sampling Method: Simple Random Sampling method has been used wherein people
were taken into consideration on a completely random basis and questions were asked
from them. Research was conducted on clear assumption that the respondents would
give frank and fair answers in a pragmatic way and without any bias.
6. Time Frame: 60 days time frame was taken to conduct the research.

7. Data Analysis Technique: Analysis will be carried out through with help of software
like MS-Excel. Likert scale multiple choice questions will be used in the
questionnaire.

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4.4) Data Collection Method:

Data for the research has been collected by obtaining first-hand information by speaking to
customers and getting the survey form lled by them about the insurance products of IDBI
Federal and observing their views, reactions and beliefs about the overall insurance products.
This will help us in recording their reaction towards the products of nancial products by IDBI
Federal and will help in knowing the major strength areas and also in finding out the weaknesses
where the company can work towards for increasing customer satisfaction and increase the
business of the company.

Both primary and secondary methods have been used for data collection:-

Primary Data: - Primary data includes questionnaire having open and close ended
questions for the purpose of understanding the perception and buying behavior of
investors towards insurance policies provided by IDBI Federal Life insurance Co.Ltd.

Secondary Data: - Secondary data will be collected through company websites, journals
and magazines to find about the history of the organization and their position in the
market and their competitors.

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4.5) Limitations of the study:

Due to constraints of time and resources, the study is likely to suffer from certain limitations.
Some of these are mentioned here under so that the findings of the study may be understood in a
proper perspective.

The limitations of the study are:

Some of the respondents of the survey were unwilling to share information. People retain
from giving personal details.

The research was carried out in a short period of 8 weeks. Therefore the sample size and
other parameter were selected accordingly so as to finish the work within the given time
frame.

The information given by the respondents might be biased because some of them might
not be interested to give correct information.

The research was confined to Vadodara city only.

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4.6) Presentation of Data and Analysis:

(1) The respondents were asked to which occupation they belonged to.
Table 1: Occupation of respondents
Occupation

Frequency

Percentage

Business

20

20%

Service

25

25%

Professional

8%

Retired

8%

Student

32

32%

Housewife

7%

OCCUPATION
7%
20%

business

service
professional

32%

retired
25%

student
housewife

8%

8%

Interpretation:
Majority of the respondent who were targeted were students, businessmen and people
working in some organization. The respondents were asked through what all sources do they
came to know about insurance policies.
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(2) Major sources of awareness in regard to insurance policies.

Table: 2. Major sources of awareness in regard to insurance policies.
Sources

Frequency

Percentage

Newspapers

30

30.00%

Insurance Agents

40

40.00%

Internet

25

25.00%

Friends & Family

45

45.00%

Television

40

40.00%

Telemarketing

20

20.00%

Others

0.00%

SOURCES
Others

Telemarketing

0.00%
20.00%

Television

40.00%

Friends & Family

Internet

45.00%
25.00%

Insurance Agents
Newspapers

40.00%
30.00%

0.00% 5.00% 10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%

Interpretation:
Television, insurance agents and referrals from friends and families are some of the major
sources of awareness about insurance policies.

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(3)The respondents were asked what features they consider before taking an
insurance policy.
Table 3: Features investors consider before taking an insurance policy.
Frequency

Percentage

Insurance Coverage

70

70.00%

High Returns

55

55.00%

Low Premium

30

30.00%

Flexible Withdrawals

25

25.00%

Risk Involved

20

20.00%

Others

0.00%

Percentage
70.00%
70.00%
55.00%

60.00%
50.00%
40.00%

30.00%
25.00%

30.00%

20.00%

20.00%
10.00%

0.00%

0.00%
Insurance High Returns
Coverage

Low
Premium

Flexible
Withdrawals

Risk
Involved

Others

Interpretation:
Insurance coverage and high returns are some of the main features that an investor wants
to have in an insurance policy.
33 | P a g e

(4) The respondents were whether they have an insurance policy.

Table: 4 Percentage of respondents having insurance policy.
Insurance policy

Frequency

Percentage

Yes

71

71.00%

No

29

29.00%

INSURANCE POLICY

29.00%
Yes
No

71.00%

Interpretation:
It was found that 71% of the population under consideration has an insurance policy and
29% did not.

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(5) The respondents were asked that if they did not have an insurance policy
then the reason behind it is.
Table: 5. Reasons behind not investing in insurance policies.
Reasons

Frequency

Percentage

Lack of Awareness

6.00%

Returns are not Good

22

22.00%

Not Affordable

47

47.00%

Others

25

25.00%

REASONS
50.00%

47%

45.00%
40.00%
35.00%
30.00%

25%

25.00%

22.00%

20.00%
15.00%
10.00%

6.00%

5.00%
0.00%
Lack of Awareness

Returns are not Good

Not Affordable

Others

Interpretation:
Many people could not afford investing in insurance policies due to high premium
amount and that is a major reason why they did not purchase an insurance policy. Others people
thought that insurance policies do not give good returns.

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(6) The respondents were asked in which bank they have an insurance policy.
Table: 6. most preferred banks of investors.
Bank

Frequency

Percentage

LIC

70

70.00%

SBI

20

20.00%

ICICI Prudential

08.00%

IDBI Federal

05.00%

Others

02.00%

BANK
70.00%
60.00%
50.00%

40.00%

70.00%

30.00%
20.00%
20.00%

10.00%

8.00%

5.00%

0.00%
LIC

SBI

ICICI
Prudential

IDBI Federal

2.00%
Others

Interpretation:
It was found out that LIC by a significant margin is the most preferred insurance company in
comparison to others. Most of the investors purchase insurance policies from LIC.

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(7) The respondents were asked the reason behind taking an Insurance policy.
Table: 7. Reason behind taking insurance policy.
Reasons

Frequency

Percentage

Risk Coverage

70

70.00%

Investment Purpose

50

50.00%

Pension Schemes

20

20.00%

Tax Benefits

25

25.00%

Others

0.00%

REASONS
70.00%
70.00%
60.00%

50.00%

50.00%

40.00%
25.00%

30.00%

20.00%

20.00%
10.00%

0.00%

0.00%
Risk Coverage

Investment
Purpose

Pension
Schemes

Tax Benefits

Others

Interpretation:
The risk that is covered by life insurance policies is the main purpose why people
purchase insurance policies. Second reason is for investment purpose.

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(8) What prompted you to buy from that company?

Table: 8. Prompted to buy insurance from that company.
Prompted

Frequency

Percentage

Brand Image

50

50.00%

Word of mouth

25

25.00%

Advertising

20

20.00%

Agents

25

25.00%

Others

10

10.00%

PROMPTED
60.00%
50.00%
50.00%
40.00%
30.00%

25.00%

25.00%
20.00%

20.00%
10.00%
10.00%
0.00%

Brand Image

Word of mouth

Advertising

Agents

Others

Interpretation:
Most of the people are prompted by the Brand image of the Insurance Company. And
other is prompted by word of mouth n agents.

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(9) The respondents were asked whether they are aware about the products
offered by IDBI Federal Life Insurance.
Table: 9. Awareness about products of IDBI Federal.
Awareness

Frequency

Percentage

Yes

62

62%

No

38

38%

AWARENESS

38%
YES
NO
62%

Interpretation:
The awareness level of IDBI Federal amongst the investor is very less. Almost 62% of
the population under consideration is not aware about the financial products offered by IDBI
Federal.

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(10) The respondents were asked whether they are a customer of IDBI
Federal Life Insurance Co. LTD.
Table: 10. Customers of IDBI Federal Life Insurance Co. LTD.
Customers

Frequency

Percentage

Yes

95

95.00%

No

05.00%

CUSTOMERS

100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%

95.00%

5.00%
YES

NO

Interpretation:
It was found out that out of the people surveyed only 5% (approximately) had invested in
IDBI Federal.

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(11) The respondents were asked whether they would like to invest in IDBI
Federal in future.
Table: 11. Investors who would like to invest in IDBI Federal in future.
Investors

Percentage

Yes

31%

No

69%

INVESTORS

31%

Yes
69%

No

Interpretation:
It was found out 31% of the people were interested in investing in IDBI Federal in the
future only if they were made fully aware about the products of the company and the returns
were higher. On the other hand 69% of the people were not interested.

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CHAPTER 5: DATA ANALYSIS AND

INTERPRETATION

42 | P a g e

5.1) Finding and Interpretation of Findings:

Majority of the respondents who were targeted were students, businessmen and people
working in some organizations belonging to the service sector.

Shares and Debentures are the most preferred option of investors to invest in as provide
greater returns than insurance policies.

Televisions, Insurance agents are some of the major sources of awareness about
insurance policies. Friends and Family are major influencers on customers when it comes
to the decision of buying a life insurance policy.

The main feature that investors consider before taking an insurance policy is the life
cover that insurance provides and also would like to get high returns from their insurance
policies.

Low premium amount is the also another which people consider before investing in
insurance schemes. Paying premium annually is the most preferred mode of payment
according to investors.

Approximately 71% of the respondents were insured and rest 29% had not invested in
insurance policies.

There is a good amount of people in the age group 18-30 who have not bothered to buy a
life insurance policy because they are very sure that nothing would happen to them as
they are fit and fine.

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Those who had not invested in insurance policies said that they could not afford
purchasing an insurance policy and wanted the annual premium amount to be low while
others did not feel the need of it at the moment.

LIC by a significant margin is the most preferred company by the investors and almost
82% of the respondents have purchased insurance policies from LIC. Brand image and
word of mouth in favor of LIC has significant impact on the selection of investors.

The risk that is covered by insurance policies is the main purpose or reason why people
purchase insurance policies. Second reason is investment purpose.

The awareness level amongst the consumers is very low. Approximately 63% of the
respondents were not aware about the products offered by IDBI Federal. Some were not
even aware about the companys existence as well.

Out of the 37% that aware about more than 95% of the respondents are not customers of
IDBI Federal.

Lack of knowledge or awareness about the products, other companies have better returns
are some of the major reasons why people are not investing in IDBI Federal. Some
already have enough insurance policies and hence do not want to buy another policy.

Some have not heard concrete positive reviews about the returns or performance of the
company from their friends or family members. LIC or other private banks provides
much better and beneficial plans in comparison to IDBI Federal.

Some were hesitant in giving their mobile or other contact numbers because they did not
wanted to be disturbed by the calls from the companys side.

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It was found that 31% of the people were interested in investing in IDBI Federal in the
future only if they were made fully aware about the products of the company and the
returns were higher. On the other hand 69% of the people were not interested.

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5.2) Conclusion:
While the fresh air of competition in every sector of economy brings in major changes in
consumer expectations, the insurance industry has experienced a few unique aspects, such as
regulation-inspired efforts to educate insurance buyers and a vast change of skills and
capabilities of the intermediaries involved in the distribution the life insurance industry in India
has immense potential with nearly 80% of the population without insurance cover. Life insurance
is a sector which is largest driven by propensity of people to save and in comparison to the west,
Indians have a higher propensity to save. Understanding the consumer buying behavior pattern
can give the companies a slight as to what a customer wants before investing in an insurance
policy. People are having good knowledge about insurance companies through advertisement
and insurance agents and most of the respondents at least once in their life have been approached
by an insurance agent.
With respect to life insurance, potential buyers are drivers of buying a policy for one or
more of these 3 major reasons: risk that is covered by insurance policies, for investment purpose
or for the availability of tax benefits. The challenge for the insurance companies is to address the
motivating factors of customers and come up with genuine solutions. The potential buyer
primarily expects that the saving should be a painless process and that the money saved should
be absolutely safe. The challenge is to provide not only convenient payment options, but also
mechanisms that could offer some measure of protection and relief to the customer if he is forced
to disrupt the payment arrangement for unforeseen reasons. People view insurance as tax saving
and investment as much as a protective one.
The comparatively new player IDBI Federal will have to and must advertise well enough
to make the people aware about their products and schemes because most of the time a
prospective insurance customer will look for a brand name like that of LIC. The company has a
potential of growing in the coming year as still more than half the population of India is still not
insured. Thus here lies the opportunity for IDBI Federal to increase their customer base by
increasing the awareness level of potential investors in regard to their products and by providing
schemes according to the needs and requirements of the customers.

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CHAPTER 6: RECOMMENDATIONS

47 | P a g e

6.1) Description of Recommendations/ Suggestions:

Most of the respondents had only one suggestion to make, and that is to increase
awareness through advertisements and promotional activities and keep them updated
about the products and their respective benefits from time to time.

Increasing awareness about the products offered by IDBI Federal is the first and the
foremost important aspects that IDBI should focus upon as a large chunk of people are
still not aware about the products of IDBI, and the company even.

As television and friends & families are major sources of awareness about insurance
policies, advertisements should be broadcasted on televisions which have an emotional
appeal. The advertisements or promotional activities should be friends and families
centered and trigger a feeling on uncertainty.

There are still a lot of people in the age group of 20-35 who has not invested in insurance
policies and IDBI should try to convince them life is full of uncertainties and is very
unpredictable. New schemes can be launched which are affordable by students or
freshers who do not earn much.

The rural areas are more also quiet heavily populated. Thus this rural population must be
made aware about the company and its offerings and gain their trust by appointing agents
from the rural areas itself. The plans should be affordable by these segments of the
society.

Insurance agents must be able to clearly tell all the benefits and features attached to a
particular policy to its customers and also provide after sales service to them to increase
customer satisfaction. Approach and conviction of agents is very important and so the
best efforts should be made to recruit and train their clients and handle potential
customers.

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Another suggestion from the respondents was that the returns are too low and the annual
premium amount is quiet high in comparison. Thus plans can be introduced which have
low premium amount along with flexible withdrawals and also provide good returns.

Since M-Commerce is the next big thing in the banking or insurance industry, IDBI
Federal should launch a mobile application of its own to make the investors aware about
their schemes and products.

The app will also help the customers in knowing about the next premium due dates and
also pay the premiums. This will save the time of the customers.

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6.2) Gains from the Project:

During my internship with IDBI Federal Life Insurance Co. LTD I got valuable
knowledge about the insurance sector and growth potential in this sector is quiet high. A large
part of the population is still not insured.
As I had some sales target as well, I realized how difficult it was to approach,
demonstrate and convince a customer especially in the insurance industry while working for
IDBI which is still in its growing phase. Some people already have life insurance policies and
wont buy another one. Selling of life insurance indeed is very difficult and one can only master
it by meeting more and more customers daily.
Another important thing that I learned is that it is not important what the company thinks
about a product. What is important is that how customers perceive your product or services in
my case. The consumers have to be told how your product will provide them more benefits and
value added services in comparison to other companies.

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6.3) Scope for Future Work:

The data collected for this research was from a sample size of 100. Although the sample
size is quite small, still the responses are quite consistent. The same questionnaires can used to
survey a large sample to study the consumer behavior towards the insurance industry at large.
This research was carried out in the city of Vadodara and hence the results reflect the
sentiments of the urban population. This research could be further carried out in tier-2 and tier-3
cities. The questionnaire can be translated in the local language to conduct the same survey in
village dwellers are not proficient in English language.

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References / Bibliography:

www.idbifederal.com

www.idbifederal.com/Press/PressRelease

http://www.insidebusiness360.com/index.php/why-it-is-important-to-study-consumerbehavior-8478/

https://en.wikipedia.org/wiki/IDBI_Federal_Life_Insurance

http://www.policybazaar.com/life-insurance/companies/idbi-federal-life-insurancecompany-ltd/

https://apps.aima.in/ejournal_new/articlespdf/gaurav_jaiswal_nrc3_24080992200933892
94.pdf

52 | P a g e

ANNEXURE

QUESTIONNAIRE
(Hello! Please help us by kindly filling up the following information. We appropriate your
response and thank you for your precious time)

Name:
Age:

Gender:

(a) Male
(b) Female

Occupation:

(a) Business
(b) Service
(c) Professional
(d) Retired
(e) Students
(f) Housewife

53 | P a g e

How did you come to know about insurance policies? (You can
choose more than one)
(a) Newspapers

(b) Insurance agents

(c) Internet

(d) Friends & Families

(e) Television

(f) Telemarketing

What are the features you consider before taking an insurance

policy? (You can choose more than one)
(a) Insurance Coverage

(b) High Returns

(c) Low Premium Amount

(d) Flexible Withdrawals

(e) Risk Involved

(f) Others: _______________________

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Do you own as Insurance Policy?

(a)

Yes

(a) Lack of awareness

(b) Returns are not good

(c)

(b) No

If not, why not?

Not affordable

(d) Others: _______________________

If yes, which company?

(a)

LIC

(b) ICICI Prudential

(c) SBI

(d) IDBI Federal

(e) Others: _______________________

Reasons behind taking an insurance policy?

(a) Risk Coverage

(b) Investment purpose

(c) Pension schemes

(d) Tax benefits

55 | P a g e

(e) Others: _________________________

What prompted you to buy from that company? (You can

choose more than one)
(a) Brand Image

(b) Word of mouth

(c) Advertising

(d) Agents

(e) Others: _________________________

Are you aware of the products offered by IDBI Federal?

(a) Yes

(b) No

Are you a customer of IDBI Federal?

(a) Yes

(b) No

If not, what is the reason behind it?

______________________________________________________
______________________________________________________
_____________________________________________________
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If yes, mention the plan

______________________________________________________
______________________________________________________

Would you like to invest in IDBI Federal in future?

(a) Yes

(b)

No

Any suggestion for IDBI Federal?

______________________________________________________
______________________________________________________
______________________________________________________

(Thank you for your time taken in completing this questionnaire. The
results of this work will be important for determining the consumer
buying behavior towards the financial products of IDBI Federal)

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