INTRODUCTION

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 INTRODUCTION

Insurance is a social device whereby a large group of individuals, through a system of

equitable contributions, may reduce or eliminate measureable risk of economic loss common

to all members of the group. It is a financial agreement that spreads the costs of losses among

the members of an insurance pool. “Insurance is a contract by which one party for the

consideration called premium, assures a particular risk of the other party and promises to pay

to him or his nominee, a certain or ascertainable sum of amount on a specified contingency”.

With such a large population and the untapped market area of this population, Insurance

happens to be a very big opportunity in India. Today it stands as a business growing at the

rate of 15-20% annually. Together with banking services, it adds about 7% to the country’s

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GDP. In spite of all this growth the statistics of the penetration of the insurance in the country

is very poor. Nearly 80% of Indian populations are without Life insurance cover and the

Health insurance. This is an indicator that growth potential for the insurance sector is

immense in India. It was due to this immense growth that the regulations were introduced in

the insurance sector and in continuation “Malhotra Committee” was constituted by the

government in 1993 to examine the various aspects of the industry. The key element of the

reform process was Participation of overseas insurance companies with 26% capital.

Creating a more efficient and competitive financial system suitable for the requirements of

the economy was the main idea behind this reform.

Since then the insurance industry has gone through many sea changes. The competition LIC

started facing from these companies were threatening to the existence of LIC. Since the

liberalization of the industry the insurance industry has never looked back and today stand as

the one of the most competitive and exploring industry in India. The entry of the private

players and the increased use of the new distribution are in the limelight today. The use of

new distribution techniques and the IT tools has increased the scope of the industry in the

longer run.

IDBI Federal Life Insurance Co Ltd is one of the major players in Indian insurance market.

It 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

3
insurance companies to garner Rs 100 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 31st March, 2012, the company

has issued over 3.76 lakhs policies with over 21,578 Cr in Sum Assured.

The scope of insurance business in India has been clearly understood by both foreign and

Indian companies. IDBI bank has joined with Federal bank and with the help of an

international company like ageas started “IDBI Federal Life Insurance Company” for

introducing the majority of Indian population to insurance. And this study is to understand

the sales of insurance products in its Lucknow branch.

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INTRODUCTION TO BUYING BEHAVIOUR OF CUSTOMERS
Customer loyalty is one of the main business challenges, also for the insurance sector. Here

the conceptual framework for studying this problem in insurance and propose a methodology

to address it. With a methodological approach, it is possible to estimate the probability that a

household with more than one insurance contract (policy) in the same insurance company

(cross-buying) would cancel all policies simultaneously. For those who cancel part of their

policies, but not all of them, and estimate the time they are going to stay in the company after

that first policy cancellation, that is to say, the time the company has to try to retain a

customer who has just given them a clear signal of leaving the company. Additionally,

discuss the results obtain when applying our methodology to a policy cancellation dataset

provided by a Danish insurance company, and we outline some conclusions regarding the

factors associated to a higher or lower customer loyalty.

IDENTIFICATION OF FACTORS AFFECTING BUYING BEHAVIOR

Consumer behaviour is the study of how individuals, groups, and organizations select, buy,

use and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.

With respect to financial products from an insurance company the consumer behaviour is not

clearly defined. Consumer behaviour for services generally vary from that of products,

however when it comes to financial products the available literature on buying behaviour

falls short. The aim of this project is to identify all possible factors which influence

consumers one way or the other with respect to IDBI Federal Life Insurance Co Ltd financial

products.

To accomplish this task the methodology used and schedule of events is described later on in

this report.

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LITERATURE SURVEY

1. Historically the factors affecting consumer behaviour have been broadly classified as:

 Cultural Factors

 Social Factors

 Personal Factors

For financial products however we can’t use this framework, we can say that buying of

insurance can be attributed to Personal Factors, but these also include the concepts of

PERSONALITY and SELF-CONCEPT which do not explain the buying behaviour of

insurance.

2. The motivational theories of consumer behaviour which have been formulated are:

 FREUD’S Theory

 MASLOW’S Theory

 HERZBERG’S Theory

However, none of these theories give valuable insight when it comes to motivation for buying

financial products.

3. The Five-Stage Buying Decision Model is widely accepted as a basic framework for

the consumer behaviour:

 Problem Recognition

 Information Search

 Evaluation of alternatives

 Purchase Decision

 Post purchase Behaviour

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It is known that consumers do not always pass through all five stages in buying a product;

they might skip or reverse some. Keeping this in mind we can say this model is helpful to get

a basic idea of how consumers buy financial products. The information sources are vital in

educating the consumers and this can be done through Personal, Commercial and Public

Sources. The evaluation of alternatives however can’t be explained for financial products.

There is no information available as to how people filter out alternatives when it comes to

deciding on a particular financial product offering

4. Elaboration Likelihood Model

Richard Petty and John Cacioppo’s model of attitude formation and change describes how

consumers make evaluations in both low- and high- involvement circumstances. They

describe the Central Route where attitude formation is based on diligent, rational

consideration of the most important product information; and the Peripheral Route where

attitude formation is due to association with some positive or negative peripheral cues which

include celebrity endorsement as well as insurance agents.

This particular model gives a basic idea as to how people may develop attitudes towards

insurance products. The central route will not differ as the products offered in this industry

are tailored to suit the needs of the consumer. The peripheral cues are the most important as

the brand name; advertisements, agents etc. play an important role in attitude formation for

the consumer.

It would thus be helpful to understand all these cues in order to create favourable attitude

towards IDBI Federal Financial Products.

5. Low-Involvement Marketing Strategies

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One type of Low-Involvement Marketing Strategy is to design advertising to trigger strong

emotions related to personal values or ego-defence. This can be observed in the insurance

industry as most advertisements are designed in order to trigger feelings of uncertainty which

can be quelled by purchase of an insurance product.

6. Process or methodology of study.

PROCEDURE:

The procedure that followed enlisted below:

 Studying the product

 Decision on objective needed to be work on.

 Developing Survey instruments.

 Getting questionnaire filled through interacting with different age groups, sex,

monthly income and occupation.

 Finally analysing the data of various areas and trying to study about various influence

factors.

PROCESS ADOPTED:

Gaining knowledge about the product

Reading about the product was the first step undertaken. This gave not only in depth

knowledge about what is been offered by the insurance but also proved useful while

developing the questionnaire.

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Customer Survey

The survey is important tool as clear perception of people about the product can be estimated

and known. The need levels of the people regarding the insurance product been observed

through survey. It was very useful in knowing about the requirements of the people.

I had done my data collection majority of the data collected are from my home town in

Kerala. I managed to collect 200 filled up questionnaires from the people the sample

population consists of students, teachers, bank employees, doctors, officeexecutives, almost

every kind of people.

Scope of the study

The study is limited to the Lucknow branch of “IDBI federal Life Insurance Co.”

The customers are the people from mid- Kerala especially from Lucknow district.

CHAPTERISATION

The first chapter deals with the introduction to the insurance industry along with the

introduction to the IDBI Federal Life Insurance Company. The second chapter contains

literature review which is the details for various projects already conducted by students of

various institutions. Third chapter is the theoretical framework of the insurance industry.

Chapter four consists of the profile of insurance industry with details of giant insurance

providers. Fifth chapter deals with the organizational profile of IDBI Federal Life Insurance

Company with special reference to its Lucknow branch. Chapter six contains the analysis

and chapter seven and chapter eight deals with findings and suggestions respectively.

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 THEORETICAL FRAMEWORK OF INSURANCE COMPANIES

The Indian Life Insurance company act 1912 was the first statutory body that started to

regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75

provident firms were been established in India. Then the central government took over these

companies and as a result the LIC was formed. Since then LIC has worked towards spreading

life insurance and building a wide network across the length and the breath of the country.

After the liberalization the entrance of foreign players has added to the competition in the

market.

Insurance Sector Reforms In 1993, Malhotra Committee, headed by former Finance

Secretary and RBI Governor was formed to evaluate the Indian insurance industry and give

its recommendations. The committee came up with the following major provisions

 Private Companies with a minimum paid up capital of Rs.1bn should be allowed to

enter the industry.

 Foreign companies may be allowed to enter the industry in collaboration with the

domestic companies.

 Only one State Level Life Insurance Company should be allowed to operate in each

state.

It was after this committee came into effect the regulatory body for insurance sector was

formed with the name of IRDA.

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INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY (IRDA):

The IRDA since its incorporation as a statutory body has been framing regulations and

registering the private sector insurance companies. IRDA being an independent statutory

body has put a framework of globally compatible regulations.

IMPACT OF LIBERALIZATION

The introduction of private players in the industry has added to the colors in the dull industry.

The initiatives taken by the private players are very competitive and have given immense

competition to the on time monopoly of the market LIC. Since the advent of the private

players in the market the industry has seen new and innovative steps taken by the players in

this sector. The new players have improved the service quality of the insurance. As a result

LIC down the years have seen the declining phase in its career. The market share was

distributed among the private players. Though LIC holds the 75% of the insurance sector but

the upcoming natures of these private players are enough to give more competition to LIC in

the near future. LIC market share has decreased from 95% (2002-03) to 63.95 %(2010-11)

and now it is further decreasing.

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THE WORKING OF INSURANCE COMPANY

Profit = Earned Premium + Investment Income - Incurred Loss - Underwriting

expenses

Insurers make money in two ways:

1. Through Underwriting, the processes by which insurers select the risks to insure and

decide how much in premiums to charge for accepting those risks, and

2. By investing the premiums they collect from insured.

 Revenue = Premium

 Expenses = (Sum of Claims + Commission payable on procurement

of business + Operating expenses)

 Operating Surplus = (Revenue - Expenses)

Net investment income includes income from trading in and holding stock market securities

including government securities, special deposits with the central government, loans to

several public utilities and service providers in state government. Insurance premium

collected is converted in a pool of fund then divided in to four expenses:

 To pay the expenses of the management

 To pay agency commission

 To pay for the claims

 Surplus money will be invested in government securities

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 CURRENT SCENARIO OF THE INDUSTRY

India with about 200 million middle class household shows a huge untapped potential for

players in the insurance industry. Saturation of markets in many developed economies has

made the Indian market even more attractive for global insurance majors. The insurance

sector in India has come to a position of very high potential and competitiveness in the

market. Innovative products and aggressive distribution have become the say of the day.

Indians, have always seen life insurance as a tax saving device, are now suddenly turning to

the private sector that are providing them new products and variety for their choice. Life

insurance industry is waiting for a big growth as many Indian and foreign companies are

waiting in the line for the green signal to start their operations. The Indian consumer should

be ready now because the market is going to give them an array of products, different in

price, features and benefits. How the customer is going to make his choice will determine the

future of the industry. The private insurance players have significantly improving their

market share when compared to 50 years Old Corporation (i.e. LIC).

INVESTMENT IN LIFE INSURANCE

Life insurance policies are "cash value," which means the fees, or premium, initially are

greater at the start of the policy than they would be in a term policy. The excess premium is

then invested in a "separate account," either by the insurer or in an account controlled by the

policy holder, building up cash value. Any investment gains can be used in a few ways: to

increase the death benefit, to borrow against for any use or to keep the policy in effect if

insured stop paying monthly premiums.

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 INDUSTRIAL PROFILE

Insurance is a nascent sector in India providing a wide potential for the players worldwide.

The premiums of life insurance accounts to about 2.5 % of India's GDP while the premiums

of the general insurance accounts to about 0.65% GDP. In India the Insurance sector went

through a number of changes when the Indian Government allowed the private companies to

solicit insurance by allowing FDI up to 265%.The Indian Insurance scenario received a boost

up as the global insurance companies are craving for a lion's share. The Insurance Companies

like LIC, Bajaj Alliance, ICICI Prudential are booming in this era. The list below will give

the names of the best Insurance Companies of India.

List of Top Insurance Companies of India

Life Insurance Corporation of India :

This leading Insurance Company of India was established in the year 1956 by the alliance of

16 non-Indian companies, 154 Indian Insurance Companies and 75 provident. It has 100

divisional offices, 2048 computerized branches, 7 zonal offices and the company's corporate

office. It has introduced new strategies for the facilitation of the customers like the

IVRS,ECS,ATM Premium payment facility and the company's Info centers in Mumbai,

Delhi, Chennai, Kolkata and many others cities.

Bajaj Allianz:

This Indian Insurance company is a joint venture of Alliance AG, which is one among the

largest Life Insurance companies and Bajaj Auto, one among the biggest 2- & 3 wheeler

producers in the world. The Company has various plans for the customers like the Pension,

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Retirement, Life Time Care, Health Care, Life Insurance Online, Life Insurance Saving

Plans, and online services like the Address change, Renewal Premium Payment etc.

Tata AIG Life :

This renowned life Insurance company in India offers a wide array of products related to life

insurance for associations, individuals and businesses. The company offers high quality

solutions to its corporate Indian clients. It renders services like the AIG Health First, AIG

Health Life Protector, Tata AIG Life Hospital Cash Back, Tata AIG Life Maha Gold, Tata

AIG Life Assure 10 Years and many others. The company is a joint venture of America

International Group and TATA group.

Birla Sun Life Insurance:

It is one of the major insurance companies in India and a joint venture of Sun Life Financials

and Aditya Birla group. The company provides Life Insurance Solutions to meet the needs of

Protection, Retirement and Saving .It has recently launched the Money back Plus Plan.

SBI Life :

This renders premium Insurance solutions like SBI Life-Smart ULIP, SBI Life-Group Criti9,

SBI Life-Unit Plus Child Plan etc. It also offers services like the NRI services, Premium

Payment Procedure, ECS Facility, RPI/RFI and many others. SBI Life is a joint venture of

BNP Paribas Assurance and SBI.

Max New York Life:

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This Life Insurance company in India provides the best solutions related to life insurance like

children's plan, retirement solution, Investment, Protection, Health, Savings etc. The

company has 14 corporate agency tie ups, 33 bank assurance relationships and direct sales

force at 14 locations. It is now covering 36 products related to life and health insurance.

IDBI Federal:

This premier Insurance company in India offers insurance facilities related to Savings,

Investments, Child, Retirement, Protection, Kotak Long Life Secure Plus, Kotak Long Life

Health Plus etc. It opens up services like Insurance Guide, NAV, Premium Payment Options

and many others.

HDFC Standard Life:

This is one of the major market leaders in the insurance sector in India. The company offers

Insurance services like the Group Plans, Health Plans, Protection Plans, Retirement Plans,

Savings and Investment Plans etc. The customer base of the company is about more than 7

million who depend on the company for various needs.

Reliance Life : The company based in India offers the best plans for Life Insurance in

India. Reliance Capital Limited's associate company is Reliance Life which is one of the

leading private sectors in India. The company provides the Protection Plans, Child Plans,

Retirement Plans and Investment plans and is also the ultimate solver of solutions.

ICICI Prudential:

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This major Insurance Company in India provides health Insurance, life insurance, ULIPs,

ULIP, Retirement Plans and many others. Life Insurance Plans of the company covers

Premium Guarantee Plans, Education Insurance Plans etc. Pension Plans encompass

LifeStage Pension, Forever Life. Health Insurance Plans cover Hospital Care, MediAssure.

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 COMPANY
PROFILE
s

18
 COMPANY PROFILE

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

19
started in March 2008, in just five months of inception we became one of the fastest growing

new insurance companies to garner Rs 100 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 31st March, 2012, the company

has issued over 3.76 lakhs policies with over 21,578 Cr in Sum Assured.

Management:
 GV Nageswara Rao is the MD & CEO of IDBI Federal Life Insurance.

 Aneesh Srivastava is the CIO of IDBI Federal Life Insurance.

 Michael J Wood is the appointed actuary of IDBI Federal Life Insurance

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 The sponsors of IDBI Federal Life Insurance Co Ltd.

IDBI Bank Ltd.

It continues to be, since its inception, India’s premier industrial development bank. It came

into being as on July 01, 1964 (under the Companies Act, 1956) to support India’s industrial

backbone. 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 977 branches and 1544 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

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Ltd, SHCIL (Stock Holding Corporation of India Ltd), CARE (Credit Analysis and Research

Ltd).

Federal Bank :

It 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 950 branches and 1002 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 and

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.

Ageas:

It 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

global insurance market. These are grouped around four segments: Belgium, United

Kingdom, Continental Europe and Asia and served through a combination of wholly owned

subsidiaries and partnerships with strong financial institutions and key distributors around the

world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal,

Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Germany, Hong

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Kong and UK. It is the market leader in Belgium for individual life and employee benefits, as

well as a leading non-life player, through AG Insurance, and in the UK, it has a strong

presence as the third largest player in private car insurance and the over 50’s market. It

employs more than 13,000 people and has annual inflows of more than EUR 17billion.

VISION:

To be the leading provider of wealth management, protection and recruitment solutions that

meets the needs of the customers and adds values 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 the customers in the most convenient and most cost effective

manner.

 To be transparent with the customers and to act with integrity.

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

VALUES

 Transparency

 Value to customers

 Financial strength

 Delivery on Promise

 Customer friendly

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  Profit to Shareholders

At IDBI Federal Life Insurance Co. Ltd., the Endeavour is to deliver products that provide

value and convenience to the customer. Through a continuous process of innovation in

product and service delivery, the intent is to deliver world class wealth management,

protection and retirement solutions to Indian customers.

TRACK RECORD

 India’s fastest growing life insurance company with Pan India presence.

 Modal premium Rs.316 crores in the first year of operation.

 Above Rs.3000 crores of sum assured, 90000 policies and 7000 distributors.

 Moved into 13th position from 18th as on 31st March 2009.

 Fastest Rs.100 crores and fastest Rs.300 crores business targets met since inception.

 Funds performing in the top quartile consistently.

 Achieved one of the lowest cost ratios in the industry.

PRODUCTS OFFERED BY IDBI FEDERAL LIFE INSURANCE CO.

LTD.

 Childsurance

 Lifesurance

 Wealthsurance

 Group Microsurance

 Incomesurance

 Healthsurance

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  Bondsurance

 Homesurance

 Termsurance

 Loansurance

 Retiresurance

IDBI Federal Life Insurance Co. Ltd. provides its services through three means. They are:

Bancassurance Channel, Agency Channel and Alliance Channel. The Lucknow branch of

IDBI Federal Life Insurance Co. Ltd. deals with plans like childsurance, lifesurance,

wealthsurance, termsurance and incomesurance.

PRODUCT PROFILE

IDBI Federal Life Insurance Product Table

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Retirement/Pension Plan Retiresurance

Term Plan Termsurance

Savings & Investment Plan Wealthsurance

Savings & Investment Plan Bondsurance

Savings & Investment Plan Incomesurance

Health Plan Healthsurance

PRODUCTS IN DETAIL

 CHILDSURANCE:

IDBI federal’s childsurance is for the parents who are looking to make their child’s 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.

IDBI Federal Childsurance® Dreambuilder Insurance Plan is a Unit linked plan which is

loaded with lots of benefits which will help you to build, create and manage your investment

with great flexibility so that your plan meets your specific needs.

The following are the key benefits Childsurance® Dreambuilder Insurance Plan.

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 Contribute money in a flexible way to suit customer’s savings habit

 A wide choice of investment options, based on customer’s return expectations and

risk tolerance

 Investment strategy according to customer’s profile

 Helps to boost customer’s savings.

 Customers can decide on how to manage their investments.

 Helps to secure child’s future goals

 Tax benefits on contributions and benefits

 Funds can be withdrawn in case of need, after five years

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  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. This plan targets the customers within the age limit of 18 years – 55 years.

The following diagram shows the reasons behind why healthsurance plan should be included

in the financial plan of every individual.

 BENEFITS UNDER HEALTHSURANCE

IDBI Federal Healthsurance® Hospitalization and Surgical Plan is a power packed plan with

loads of benefits that aim to keep you tension free.

 Daily hospital cash benefit paid for each day (24 hours) spent in an eligible hospital

(from day 2 onwards): Rs. 500, Rs. 1,000, Rs. 1,500 or Rs. 2,000 depending on

customer’s choice of benefit level

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 Higher daily hospital cash benefits of Rs 3,000 and Rs. 4,000 available, subject to

suitable proof of income

 Additional daily benefit equal to the daily hospital cash benefit, from day 2 onwards

for hospitalization in an Intensive Care Unit, (up to an overall maximum daily benefit

of Rs. 5,000)

 Additional lump sum surgery benefit paid if customer undergo any of the wide range

of surgical procedures specified in this brochure: either 50 or 100 times customer’s

chosen daily benefit, depending on the severity of the surgery

 Three times customer’s daily hospital cash benefit paid as a lump sum convalescence

benefit (maximum once per year) if customer’s hospital stay is at least 168

continuous hours (at least 7 consecutive days)

 Generous total benefit limits. Up to 500 times customer’s daily hospital cash benefit

each year; up to 2,000 times customer’s daily hospital cash benefit over the lifetime of

customer’s policy

 Cover lasts until customer are aged 65 years, provided customer continue to pay their

premiums in the agreed manner and as long as their lifetime benefits limit (2,000

times your daily hospital cash benefit) has not been reached

 Customer’s choice of nominee, to whom any outstanding benefits will be paid, in the

event of the death of the insured person

 Low-cost monthly premiums that depend on customer’s age at the outset. Customer’s

premium will never increase because of any changes in their age, health, or the

number of claims they make. However, IDBI Federal Life Insurance Co. Ltd. does

reserve the right (subject to IRDA approval) to increase premiums in the future across

all its specified plans.

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  Excluded occupations under Healthsurance

Applications for cover will not be accepted from anyone working in any occupation described

below at the time of applying. In the event of a claim whilst the insured person is active in

any of these occupations, the claim will only be considered with the provision of proof that

the insured person was not working in any of these occupations at the commencement date.

 Working in confined spaces in vessels, tunnels, underground civil works, mines, rigs

(including offshore rigs) or ships.

 Industrial work using heavy machinery or working as a welder

 Working in the agricultural sector or as a forestry worker or as timber camp personnel

 Working with toxic chemicals or explosives or in weapons manufacture or trading,

or in the demolition trade.

 Working in transport business (unless only doing clerical work)

 Working at heights (at least 20 metres above the ground or floor level)

 Working as a fireman, security guard or patrolman, or as a member of the police force

or servig or servicing in the armed forces

 LIFESURANCE:

IDBI federal 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.

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  KEY FEATURES OF LIFESURANCE SAVINGS INSURANCE

PLAN

 Maturity Benefit

On the maturity of your Lifesurance policy, provided all premiums have been paid in full

when due we will pay you the sum insured along with the vested guaranteed additions, vested

reversionary bonuses and terminal bonus, if any, in a lump sum.

Maturity Benefit = Sum insured + Vested guaranteed additions + Vested reversionary

bonuses + Terminal bonus .

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  Death Benefit

On the death of the life insured during the policy term, provided all premiums have been paid

in full when due we will pay the beneficiary, the sum insured along with the vested

guaranteed additions, vested reversionary bonuses, interim bonus, if any and terminal bonus,

if any in a lump sum.

Death Benefit = Sum insured + Vested guaranteed additions + Vested reversionary bonuses +

Interim bonus (if any) + Terminal bonus.

 Guaranteed Additions

Guaranteed additions at the rate 50 per 1,000 sum insured will be added to your policy for

each full annual premium that is due and paid in the first 5 years of the policy. In the case of

premiums paid more frequently than annually, the guaranteed additions will be added on a

pro rata basis as the due premiums are paid in the first 5 years of the policy. The vested

guaranteed additions will become payable along with the sum insured at the time of a claim

or maturity of the policy.

 Bonuses

After the fifth policy year your Lifesurance policy will participate in any profits of our

participating policyholders’ life fund by way of reversionary bonuses and possibly terminal

bonus. The amount of any profits, and hence of any bonuses will depend on the future

experience and performance of the fund. The bonuses will be declared by the Board of IDBI

Federal Life Insurance Company each year, and once added they will form part of the

guaranteed benefits of the policy. The Company may declare an interim bonus in the event of

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a claim before the next bonus declaration. The company may also declare a terminal bonus to

be paid on maturity or death provided all the due premiums have been paid.

 Tax Benefits

 Deduction under Sec 80C: The premiums that you invest in Lifesurance are

eligible for deduction under Sec 80C of the Income Tax Act up to the limit of Rs. 1,

00,000 (along with other eligible investments).

 Tax-free Benefits under Sec 10(10D): The maturity benefit as well as death

benefit are tax-free under Sec 10(10D) of the Income Tax Act

 There is also no tax deduction at source.

 Flexible Premium Payment Term (PPT) & Policy Term (PT)

Policy Term: You can choose the term at the end of which you wish to receive the

maturity benefits. Lifesurance provides you the flexibility to choose between four policy

terms –10, 15, 20 or 25 years.

Premium Payment Term: You can choose the term for which you would like to pay

premiums towards your Lifesurance Plan. The minimum Premium Payment Term is 5 years

for policy terms of 15, 20 and 25 years. The minimum premium payment term is 6 years for

policy term of 10 years. The maximum Premium Payment Term can be equal to the Policy

Term. The minimum premium amount is Rs 20,000 for annual installments, Rs 10,000 for

33
half-yearly installments, Rs 5,000 for quarterly installments and Rs 2,500 for monthly

installments.

 Loans

You can avail of the loan facility from IDBI Federal after the policy acquires surrender value.

The loan amount granted will be up to 85% of the surrender value subject to terms and

conditions specified by IDBI Federal from time to time.

 Advantage Women

Lifesurance offers an additional premium discount for female insured persons. The basic

premium payable for a female policyholder will be equivalent to the premium for a

corresponding three-year younger male policyholder.

 Lifesurance Suvidha Savings Plan

The IDBI Federal Lifesurance Suvidha Savings Insurance Plan (hereinafter referred to as

Lifesurance) is a participating endowment plan that guarantees and allows you to accumulate

considerable savings to meet customer’s long term responsibilities in life. Policy will

participate in the surplus of the company's participating policyholders’ life fund, and

customer’s share of this surplus will be added to customer policy, from the 4th policy year

onwards, by way of reversionary bonuses and a terminal bonus added at the time of maturity,

or on earlier death. As a consequence, participating policyholders who maintain their policies

till maturity will enjoy the benefits of long term debt and equity

investment while being protected from the short term volatility of the securities markets.

34
 Features:

Benefits at Maturity

 Sum Insured along with guaranteed additions at the rate of Rs. 50 per 1,000 of the

Sum Insured for the first 3 years of the policy

 Reversionary bonuses from the 4th policy year onwards

 Terminal bonus added at the time of maturity, or on earlier death

Plan benefits and Eligibility

1. Premiums are exclusive of service tax and education cess.

a. As per the current tax laws, service tax applicable under the policy is 3.09 %

(including education cess) of the premiums paid for the first

year and 1.545% for the renewal premiums. Service tax and education cess are as per

the extant laws.

2. For Lifesurance Suvidha Savings, the maximum aggregate sum insured limit for an

individual life is limited to Rs. 6, 00,000 for each 12 month period and to Rs. 20,

00,000 in total. These limits will be calculated after including all individual and group

policies of IDBI Federal Life Insurance Co. Ltd, except the fully underwritten

policies.

3. Guaranteed Death Benefit is Sum insured plus vested Guaranteed Additions.

 Bondsurance:

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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.

Bondsurance™ Advantage Insurance Plan

The IDBI Federal Bondsurance™ Advantage Insurance Plan is a single premium plan where

you need to make just a one-time investment. You can choose a Maturity Period of 5, 7, 10,

15 or 20 years. At the end of the chosen period, you will receive a guaranteed maturity

amount. In case of death of the insured person.

before the Maturity Date, a guaranteed Death Benefit will be paid. Thus you can get life

insurance cover, while earning an assured return on your investment. Moreover,

Bondsurance™ also offers you tax benefits as per section 80C & 10(10D) of the Income Tax

Act, 1961.

 Flexibility to choose Policy term from multiple options:

Customers can now choose policy term as 5yrs, 7yrs, 10yrs, 15yrs and 20yrs

 Multiple Cover options

Customers can choose their plan from 3 available cover options as per their preference. They

have now option to insure single life and joint life depending on the insurance cover option

chosen by them.

Death benefit:

36
In case of individual life, on death of the insured person the death benefit amount will be

paid. In case of joint life, death benefit will be paid on the death of the last surviving insured

person.

 Minor Life is insured:

You can also take the policy on a minor as the Insured Person. In the case of a minor, the

Bondsurance™ Advantage Insurance Plan will vest in the minor upon attaining majority.

 Maturity Benefit:

Guaranteed maturity value is dependent on the policy term, premium amount, age of the

individual and insurance cover option chosen. Decreasing sum insured options will enhance

your returns.

 Surrender Option

Bondsurance™ also provides liquidity before maturity. After 6 months from the

commencement date, you have the option to prematurely redeem Bondsurance™ Advantage

Insurance Plan by surrendering the policy

 Customers are allowed after 6 months after the policy commencement date.

 Guaranteed surrender value will increase with the policy term.

 Special surrender value higher than Guaranteed surrender value may be payable.

37
  Discount on single premium

If customers choose a Maturity Benefit of Rs 1, 50,000 or higher, they will also get a discount

on the single premium amount as per the Discount Table.

Bondsurance Plan

IDBI Federal Bondsurance™ Plan (Bondsurance™) is a single premium plan which allows

customer to make a one-time investment and get a guaranteed amount on maturity. Customer

can choose a maturity period of 5 or 10 years for your investment. At the end of the chosen

period, they will receive a guaranteed maturity amount.

Besides the guaranteed maturity amount, Bondsurance™ also provides a life insurance cover.

In case of death before the maturity date, a Death Benefit which is also guaranteed will be

paid.

Thus customer can get life insurance cover, while earning an assured return on their

investment.

A.Guaranteed Return on investment

Bondsurance™ gives customer guaranteed returns on their one-time investment. All they

have to do is choose the Maturity Benefit, and the Maturity Period for

38
Their investment. Based on customer’s choice, the investment they have to make by way of

single premium is determined.

B. Life Insurance Cover of 5 times the invested amount

Besides giving assured returns, Bondsurance™ also provides a life insurance cover. In the

unfortunate event of death of the Insured Person before the maturity date, a Death Benefit

equal to five times the single premium amount will be paid. The Death Benefit (which is the

Sum Insured) is guaranteed. The Plan will terminate upon payment of Death Benefit. The life

insurance cover ensures that the financial security of loved ones is secured.

 WEALTHINSURANCE:

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.

Wealthsurance® offers customers Insured Wealth Plans. They allow customers to create,

build and manage wealth by giving several choices and great flexibility so that they plan

meets their specific needs. Customers can decide how they wish to save so that it suits their

savings habit. Customer can choose how their money is invested so that they can grow wealth

as per their investment preferences.

What is even better, Wealthsurance® protects customers wealth plans with life insurance

benefits so that their wealth-building efforts remain unaffected in unforeseen events and their

financial goals can still be achieved.

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  Wealth Plan with a powerful range of Investment Choices

Wealth creation does not happen by chance, it needs a plan. Wealthsurance® is a wealth plan

which allows customers to build and manage wealth. Customer can save into the plan as

much money as they want, whether at regular intervals or as per their convenience.

Wealthsurance® offers a wide choice of investment options from which they can select one or

more, based on their preferences. The investment options offered are designed to meet the

needs of all types of investors depending upon their risk appetite, stage of life or investment

horizon. Customers can choose options that give:

a. Assured fixed returns

b. Variable returns linked to market performance or

c. Returns linked to equity market but with protection of capital.

Wealth grows in plan, based on the options chosen.

 Wealth Plan can be insured against unforeseen events

Wealthsurance® Plan can protect customers Wealth Plan against a range of events such as

death, 17 major diseases, sickness requiring hospitalisation, serious accidental injuries or total

and permanent disablement. With other investment products, if any such event happens,

customer may not be able to save as planned or even be forced to withdraw from their

savings. But in Wealthsurance®, these benefits allow them to meet additional expenses

40
without affecting their fund value so that their plans to save and accumulate wealth are not

affected even if life throws surprises at them.

 Wealthsurance® is for those who will live

Life insurance is sometimes thought of as for those who might die, but Wealthsurance® is for

those who will live. Usually life insurance products provide benefits upon death, but

Wealthsurance® is designed to also give Living Benefits to ensure your well-being in your

own lifetime. There are various Wealthsurance plans offered by the company such as :

 Wealthsurance® Maxigain InsurancePlan

This plan maximizes the gains and the same time are shielded from potential losses.

The plan provides a unique investment fund called the Maxi NAV.

Guaranteed Fund which offers the guarantee of the highest NAV achieved on the reset

dates during the 7 years tracking period from the date of launch of the fund on the

policy maturity date. This special feature can provide customers with benefit from

market increases and protects them from market declines.

 Wealthsurance® Dreambuilder Insurance Plan

This plan ensures that customer’s goals of wealth creation are achieved even in the

events of serious misfortune and remain unaffected in unforeseen events. This plan

offers greater flexibility so that customer can create wealth as per specific needs and

investment preferences.

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  Wealthsurance® Premier Insurance Plan

This plan combines wealth creation and the insurance protection into one powerful

financial solution. Unlike other investment

alternatives, it allows customer to ensure that their goals of wealth creation are

achieved even in case of serious illness.

 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.

 Homesurance Protection Plan

The IDBI Federal Homesurance® Protection Plan is a reducing term plan, which provides

insurance cover equal to the outstanding balance of home loan. In the unfortunate event of

death of the home loan borrower, the insurance cover enables repayment of the home loan

liability.

 Protection against loan liability

A home loan is usually a large liability and if the breadwinner who would repay the loan

were not to be there, it could become a serious burden to the family. The

Homesurance® Protection Plan protects against this liability. The specifics of the plan are as

follows:

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1. Cover Amount reduces over time

Outstanding home loan amount normally reduces over time as customer repay by way of

monthly installments. Accordingly, the cover amount under the Homesurance® Protection

Plan also reduces with time to reflect the outstanding loan amount. At the time of the plan,

customer will receive a Policy Schedule based on the amount and terms of loan, which will

show them the reducing cover amount over time.

2. Benefit Amount is paid on death

In the event of death of the insured, insurer will pay either the cover amount as per the

Homesurance® Protection Plan Policy Schedule as on the date of death, or the actual

outstanding balance in the insured loan account as on the date of death, whichever is higher.

Death due to any cause including illness or accident is covered under the plan. Death,

whether in India or abroad is also covered under the plan.

 Homesurance Plan

IDBI Federal Homesurance® Plan (Homesurance®) is a mortgage reducing term plan which

offers protection to a person and his family from their home loan liability. The plan provides

a cover equal to the outstanding balance of home loan in the unfortunate event of expiry of

the insured.

A. Protection against Loan Liability

Homesurance® covers life for an amount equal to home loan liability as per the home loan

schedule. In case of an unfortunate event of expiry of the insured, the outstanding balance

amount is paid to the nominees in one lump sum, who may then settle the loan liability.

B. Cover for Terminal Illness

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A unique feature of the Homesurance® plan is that it pays an accelerated payment of death

benefit upon the diagnosis of a terminal illness, where the insured has a medical prognosis of

a life expectancy of six months or less. This helps to settle the home loan liability should an

unforeseen terminal illness occur

C. Optional Insurance Benefits

To protect customer and his family from unforeseen events, they can opt for optional

insurance benefits as an addition to Homesurance® base plan.The Optional Insurance Benefit

is available only with the regular premium plan. Additional premiums should be paid for the

term of the optional insurance benefit depending upon the sum insured chosen.

 INCOMESURANCE:

IDBI Federal Incomesurance Endowment and Money back Plan is a plan which is designed

for the customers to reach their goals with confidence. The main features of this plan are:

 Premiums paid for a limited period

 Guaranteed annual payout

 Minimum annual payout declared at the beginning

 Additional annual payout is declared each time the premium is paid.

 Additional annual payout is linked with G- sec interest rates

 Customers can take periodic payments or accumulate till maturity

 Lump sum cover or waiver of premium

 Tax benefits under Sec 80C and Sec 10(10D)

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IDBI Federal Incomesurance™ Endowment and Money Back Plan (Incomesurance™) not

only gives unmatched transparency and flexibility but there are lots of other features which

are inbuilt in the product like convenient premium payment options, Tax benefits and double

advantage of Endowment and Money Back plan.

 TERMSURANCE:

Teramsurance protection plan of IDBI federal offers unique increasing cover option that can

automatically increase the cover every year without increasing the premium.

 Termsurance®Seniors Insurance Plan

Customers over the age of 50 can enroll for this plan till the maximum age of 85. The entry to

the plan is guaranteed without any questions of the state of the health condition. In the

unforeseen event of demise in the first two years of the policy, 125% of total premiums paid

shall be returned. After two years, customers are insured for the amount of sum insured for

life. The amount of premium and cover remain the same throughout the life of the policy,

45
except after age 90. At age 90 the policy gets even better as premiums will stop, but life

insurance cover will continue. There are no maturity benefits.

 Termsurance® Premier Insurance Plan

IDBI Federal Termsurance® Premier Insurance Plan, a term insurance plan that gives insured

the power and flexibility to take complete charge of the financial future of their loved ones.

Termsurance® is designed with a host of benefits and options aimed at satisfying needs. It has

choice of policy term, flexible premium payment options and lots more. It also allows to

create a plan as per insured and his family’s needs and objectives, thus offering them a truly

flexible protection plan.

 Termsurance Protection Plan

IDBI Federal Termsurance® Protection Plan (Termsurance®) comes with three cover options

which insured can select on the basis of their requirement. Termsurance® is designed with a

host of benefits & options aimed at satisfying every need. It not only allows to customise plan

as per individual and family’s needs, it also comes with a host of benefits like convenient

insurance cover options, flexible premium payment terms, choice of policy term and lots

more flexible options.

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  Major benefits of Multiple Cover options

 Multiple cover options give you tailor-made protection

 Flexibility in the policy term to suit your lifestage.

 Flexibility in premium payment terms to suit your wallet.

 Attractive discounts to encourage additional cover

o Advantage Women

o High Sum Insured Rebate

 Tax benefits to help you grow your wealth faster

 Termsurance® Group Life Plan

The IDBI Federal Termsurance® Group Life Plan is a pure term plan designed to cater to a

wide variety of formal and informal groups such as the Employer-Employee groups, bank -–

depositor/customers groups, customer-supplier groups, professional and affinity groups. It is

a group term insurance plan that provides basic life insurance protection to the members of

the plan. Life insurance benefit for all members of the plan is provided by one policy

document that is issued to the policyholder. The policyholder may differ for different groups.

E.g. In the case of a Bank providing life insurance cover to their deposit account holders, the

Bank will be the Master Policy Holder and the deposit account holder/ bank customer shall

be a member of the policy. Similarly, for an employer- employee group, the employer will be

the Master Policy holder and the employees shall be the members of the policy.

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  Termsurance Grameen Bachat Yojana

This is a low cost risk protection plan targeted at rural population. It is an ideal plan to protect

the family members in the event of unfortunate demise of the major bread winner and also to

save for specific needs like repayment of loan, daughter’s marriage or child’s education. The

plan offers life coverage at a nominal cost along with the option of refund of premium at

maturity. Coverage terms offered are 3 years, 5 years and 10 years. The customer has the

flexibility of getting the sum assured ranging from Rs. 5000 to Rs. 100000 in the multiples of

Rs. 1000. IDBI Federal is also providing another “Grameen Suraksha Plan” in rural area

which is similar to this plan

 LOANSURANCE:

Loansurance is a cost effective way to ensure that the outstanding debt is settled in the

unfortunate event of death of the insured. This plan provides cover to a person directly liable

for loan repayment.

There are two cover options available under this plan.

 Reducing Cover

Under the option, the insurance cover reduces as per benefits schedule. The premium amount

is computed over a period of time, taking into account initial loan interest rate, the loan term

and outstanding loan amount.

 Level Cover

This option provides a cover for the sum assured as specified by the insured and can be to the

extent to the full agreed loan amount plus accrued interest as chosen by the insured member.

48
This remains unchanged throughout the cover term. Thus even if the loan liability declines

over time, the plan covers is the sum assured throughout the cover time.

 Microsurance

IDBI Federal Group Microsurance Plan provides affordable life insurance cover to groups.

This plan is extremely useful to micro finance institutions, self help groups and NGO’s to

insure the lives of their group members and thus provide security to the group member’s

families. The plan can also be used for providing loan protection to the group member’s

families.

 RETIRESURANCE:

This is a zero death benefit pension plan, wherein the insured can accumulate a corpus to

enjoy pension after retirement. The plan is open for ages between 18-70 years, with vesting

age between 40 and 75 years. This plan offers varied investment options spread between

100% debt to 100% equity to choose from. Flexibility to reduce future annual premium after

completion of one year to at least 75% and not less than Rs. 10000 There is no switching cost

under this plan. The plan also offers tax deduction under Sec. 80C and tax free returns under

Sec. 10(10D)

 Financial Information:

The total premium earned for the half year ended September 30, 2010 was Rs.3427 million.

The profit after tax for the same period is Rs.513 million. There have been 132 death claims

reported during the period out of which 43 claims were settled and 19 claims were rejected.

49
  Marketing Campaigns:

IDBI Federal Life recently launched television commercials focusing on its frontline

products like Wealthsurance and Incomesurance. The campaign taglines are “Jisne bhi

suna khareed liya” and “Guaranteed Income Ki Bhavishavani”. Whereas the first

advertisement reflects that the product is so great that whoever hears about it, buys it

instantly, the second advertisement promises to be clear and transparent on the issue of

returns in the investment product. IDBI Federal has also introduced two animation characters

by the name of Happy and Lucky to promote the brand. To create an awareness of the

products of the organization among the households, a painting competition “Bright Sparks”

was conducted and certificates were awarded to all participants.

 COMPETITION ANALYSIS

IDBI FEDERAL LIFE INSURANCE Co. Ltd. is in a highly competitive segment i.e.,

insurance sector they are having large number of rival companies fighting along with them in

taking control of the industry.

 Threat of intense segment rivalry

The major plus point for IDBI FEDERAL LIFE INSURANCE Co. Ltd. is the brand value of

its partners. The competition in this market is a very difficult or tough. The market condition

is oligopoly where a few number of big competitors are providing identical product and

services differing only in quality of them. Each competitor has their own trademark attribute.

As we know LIC’s attribute is their hold in rural market. But when we say about population

50
growth, economic growth, or government policies insurance segment is very attractive

because only 25% insurable person are insured secondly 80% population are under age of 45.

 Threat of new entrance

Due to aggressive competition and high entry exit barrier, this is not attractive segment for

new player. For entering in insurance field, mandatory capital is 100 crores. Secondly,

foreign stake limited with 26%, third Indian company have no experience in insurance

business. Exit barrier are also very high because, no company can leave market after entering

due to loss because firstly, 100 crores will be lost secondly, their compensation (customer or

other company) will be very high or more than deposited money. So in long run, company

will try to less their business but they will not leave market. So this is good factor for IDBI

FEDERAL

LIFE INSURANCE Co. Ltd. Because, where entry or exit barrier are high, profit potential

are also high.

 Threat of substitute product

This is not attractive market in view of substitute goods because there is many substitutes in

market but only service style is different. Different insurance company provides at least same

product but presentation is different. In case of lower substitute (means investment purpose)

many product in India for example, share, mutual fund, fixed deposit. Substitute place a limit

on price and on profit.

51
  Threat of buyer’s growing power

In India buyer’s growing power are increasing because they have more concentrated or

organized towards market. Government has established insurance regulator (IRDA) in India

for growing buyer’s barging power. Due to lowest switching, buyers are very price sensitive

and buyers have many sources for knowing about different company product. Due to

education buyer can analysis that, which product is good for him. So due to growing buyer’s

power this segment is not good for new player.

 Threat of supplier’s growing power

Due to oligopoly market condition insurance company cannot raise price but they can

increase their profit from selling more policies in market. In India, supply-growing power

(agent, broker, bancassurance) are growing due to lot of company availability in IDBI

Federal Life Insurance Co. Ltd.

52
 ORGANIZATION STRUCTURE

CHAIRMAN

CEO

ZONAL
MANAGER

REGIONAL
MANAGER

AREA MANAGER

BRANCH
MANAGER

MARKETING ADMINISTRATIO PADP

N

SALES BRANCH IC
MANAGER
SUPERVISIOR
53
INSURANCE
ASISTANT
ADVISOR
BRANCH
SUPERVISOR

CUSTOMER
SUPPORT
EXECUTIVE

CUSTOMER SUPPORT REPRESENTATIVE

54
 Departments of the company:

Human Resource Department

The success of an organization depends upon the quality of its work force. HR department is
responsible for the recruitment and selection of employees based on ability, skills and
qualification. The HR department is also responsible of certain activities concerned with the
employees.

Objectives of Human Resource Department:

 To maintain a healthy relationship and act as a mediator between the employer and
employees.
 To recruit and select prospective candidate, arrange for an interview and fill vacancies
in the concerned department.
 To take care of the activities done by the other departments.
 Personnel department is responsible for all the good and bad works done by the
workers.
 HR department has to maintain the good relationship with all the other departments.

Recruitment:

 It handles the recruitment and the appointment of the required staff for various
department of an organization.

Induction:

 Later the induction programmed of the employees will be arranged for to introduce all
the department of company by the labor officer as well as the concerned department
head. Therefore, the employees can come in terms with the objectives of the
company and his participation in fulfillment of the company objectives considering
himself as an essential ingredient of the company.

Training:

55
  This is also one of the important functions of the department, keeping in view to
update his/her knowledge and to increase his/her efficiency, so after sometime such
programs are arranged by this department and employees of the company are kept

 in touch with the least ways of the morale booster and fondness towards the company
is injected in the blood of employees.

On the Job Training:

 Employees are couched and instructed by training instructions, they learn the job by
personal observation and practice. It is learning by doing.
 HR Policies & Procedures
The policies and procedures laid down here promote the philosophy of
the company with regard to standards of excellence, Terms of employment.
Employee development and employee services. The objective of this section is to
inform you of the polices related to Travel, compensation,Medi claim, and Transfers
etc. We recommend that you make yourself aware of the entitlements

 Compensation Components
The compensation that is given in your appointment letter comprises of base
Salary, FCP (Flexible Compensation Plan), and Employers contribution to provident
Fund and Employers contribution to Gratuity. Base salary is as per company policy is
not flexible amount since a lot of statutory and non-statutory benefits are linked to the
base salary.

 Statutory Benefits

The Provident Fund and Gratuity are governed by Acts of Law and are mandatory.

 Provident Fund

The Provident Fund is a one of the mandatory schemes established by the

government of India to provide social security to the service class. It is a scheme,
which is bearing on the employer and the staff member and provides security to the
staff member and / or his dependants on retirement, disability or death.

56
  Gratuity

The Gratuity Fund is regulated by the gratuity fund Act, 1972. At present, the
following benefit is available. All Permanent staff members of the company, who
have completed five years continuous service, are eligible for payment of gratuity at
the time of retirement.

 FINANCE DEPARTMENT CHART

Financial head

Fund Manager

Portfolio Manager

Staff

Financing and Accounting Department

Accounting Department: In this section accounts are maintained. Accounts are maintained in
traditional methods only. This is ledger.

 The main functions are recording all the accounts including employees’ and workers’
salary and their PF etc.
 It records all the payments of the company.
 It records all the transactions of the company.

Accounting process:

 Recording the transactions:

 Classifying the transactions
 Summarizing the transactions
 Analyzing and interpreting the results.

57
Finance Department

Planning & MIS – monitoring of organization performance - sales, quality, Trends- on a

continuous basis. With insights into MIS, socio economic factors & competitor
behavioral patterns, we contribute to sales targets, strategic initiatives projected branches,
and projected work force the road ahead.

Internal Audit – Risk Management, Business Continuity Plan, Best Practices, policy manuals
are not mere words on paper adhere to them. We ensure ‘Practice what you preach.

Corporate planning and MIS provide feedback on business strategies.

The Accounts function includes preparation and maintenance of financial records, Funds
management, and expense processing and treasury operations. Compliance ensures that
every action is within the regulatory framework. This includes reviewing compliance
requirements and supporting the ethical framework of RIL. Internal audit provides
assurance to the management over the organizations’ control framework and includes
process risk management, information security assessment and business continuity
assessment.

MARKETING DEPARTMENT

Marketing at IDBI FEDERAL Life Insurance covers an array of activities- advertising,

branding, channel support, direct and alliance marketing and corporate communication.
The people in each of these sub-functions perform a unique job.

The advertising and branding section has schedules of advertising campaigns and a
detailed on what BALIC corporate identity stands for, why it’s important to be
consistent and guidelines that must be adhered to. This section also details the
branding across training, advisor and advertising collaterals with references.

Market development has lucid presentations about our products and how they compare to
those of competition. You will also find an update on the recent happenings in the life and
pensions sector. Channel marketing aims to streamline the design and development of
collaterals across distribution channels. You will find examples of posters, flyers,
banners, danglers sales toolset developed for tied agent, Bank assurance and corporate
agent’s, as well as for product lunches and campaigns.

58
Corporate communications handles media relations and is responsible for some of the news
regarding BALIC that you see in the press. You can check out the most recent clips in the
BALIC in the new section.

Customer Service & Operation

The operation department the work process between the customer and the company to
ensure consistent and quality service to the customer. To streamline the Operations, the
operation department interfaces between the claims and the agents, the branches and
underwriters, and manages work processes.

Information Technology Department

The IT function at BALIC is committed to enable business through the use of technology. It
is segmented into 4 groups to enable highest levels of delivery to the customers: Life
Asia Solutions Group - Web that provides real – time information to customers and is
responsible for customer relationship management, IT Architecture & corporate Solutions
Group is in charge of developing and maintaining a blueprint for the IT architecture
for the enterprises as a whole. This team works as an in house R&D Solutions Group,
exploring new technological initiatives and also caters to information needs of corporate
functions in the organization.

SKILLS

It is a more reputed insurance company, as it is providing financial solution of where to

invest, how to invest and number of products with having more benefits to investors. It has
reputed customers who are loyal to the organization. The service given to the customers are
accomplished as per their requirements. Financial services generally do mass supporting
services are rendered to all types (classes) of customers. More over the people feel their task
is in safe hands of the industry. The organization is having various capabilities over the
competitors. These skills are unique from the competitors of IDBI FEDERAL.

The skills are broadly categorized as follows:-

59
Market knowledge, analytical skills, Services, Research, Personal/administration, Soft skills,
Supporting, Medical, Finance, Information relations, others.

Most of the employees at IDBI FEDERAL are recruited from management and technical
streams.

STYLE

IDBI FEDERAL follows participative management, where in each major decision regarding
the company is taken in tip down fashion and other decision like targets and growth aspects
IDBI FEDERAL follows bottom up style.

We think it is important to distinguish between the basic personality of a top management

team and the way the team comes across to the organization. Organization may listen to what
managers say but they believe what managers do. Not words, but pattern of action is decisive.
The power of style then is essentially manageable.

One aspect of style is symbolic behavior. Typically have more people on board who
understand exploration are have headed exploration department. Typically they fund
exploration more consistently.

STRATEGY

By “strategy” we mean those actions that a company plans in response to or anticipation of

changes in its customers, its competitors. Strategy is the way A Company aims to improve its
position vis-à-vis competition perhaps through low cost production or delivery, perhaps by
providing better value to the customer, perhaps by achieving sales and service dominance. it
is, or ought to be, an organization way of saying:” here is how we will create unique value”.

The IDBI FEDERAL has set of objectives, strategies to achieve the objective, the course of
action to be taken to achieve the objective and guidelines for the course of action.

IDBI FEDERAL adopts low pricing strategy to generate huge returns and good market share
in the industry, since it has well expanded its business all over INDIA.

60
IDBI FEDERAL charges minimal to its clients for the services. It provides more benefits to
customers compared to its competitor. Hence it is known for the good pricing strategy in the
industry.

SYSTEM

The IDBI FEDERAL has various techniques to control this procedure as system like to
improve the back office targets by giving addition support.

Information system: the implementation of computers has made information flow fast and
reliable. The information is versatile. Since IDBI FEDERAL has good backup system.

Recruitment, training and development system

Recruitment process starts with the identification of the vacancies by the department head of
the respective department. A form requesting for the human resource is sent from the
department to HRD.

STAFF

Staff (in the sense of people, not line/staff) is often treated in one of two ways. At the hard
end of the spectrum, we talk of appraisal systems, pay scales, formal training program and the
like. At the soft end, we talk about morale, attitudes, motivation and behavior.

The IDBI FEDERAL is in the course of cutting down the cost of service. If it starts
recruiting, the selection is done based on the education qualification first class degree.

The various training program to the employees are taken like refresher course, job rotation
and job training. The promotion in the organization is taken place based upon the service,
seniority and educational qualification. The performance appraisal is also taken as a basis for
promotion so officer’s staff makes it. Staffing is a process of acquiring human resources for
the organization and assuring that they have the potential to achievement of the
organizational goal.Staffing necessity for allotting the duties and responsibility among the
employees.

Duties and responsibilities of Manger:

61
 Determine the objectives or goals of the organization.
 Framing policies and making plans to achieve the objectives.
 Setting up organizational frame work.
 Assembling the resources of money, man, materials, machines and methods.
 Exercising effective control.
 Providing overall leadership.
 Duties and responsibilities of staff towards the organization.
 To maintain the discipline in the organization.
 To obey the order of the supervisor.
 To work effectively and efficiently in the organization.
 To maintain good relations with all the workers in the organization.

62
 MCKINSEY 7-S MODEL

The 7-s model with reference to IDBI FEDERAL life insurance:

The 7s model are a frame work for analyzing organizations and their effectiveness. It looks
at seven key elements that make the organization successful, or not; a structure; a system,
strategy, skills, staff, shared values.

Consultants at McKinseys and company developed by 7s models in the late 1970s to help
managers address the difficulties of the organization change. The model shows that
organizational immune system and the many inter connected variables involved make change

63
complex, and that an effective change effort must address many of these issues
simultaneously.

The 7s model is a tool for managerial analysis and action that provides structure with which
to consider a company as whole, so that the organizational problems may be diagnosed and a
strategy may be developed and implemented.

The seven diagrams illustrates the multiplicity interconnectedness of elements that

organization’s ability to change. The theory helped to managers thinking about how
company could be improved. It says that it is not just a matter of devising a new strategy and
following it through. Nor is it a matter of setting a new system and letting them generate
improvements?

To be effective, your organization must have degree of fit or internal alignment among all the
7s. Each S must be consistent with the reinforcement of the other ‘S’. All ‘S’ are interrelated
so a change in one has a ripple effect on all others. It is impossible to make progress on one
without making progress on all. Thus, to improve the organization you have to master
system thinking and pay attention to all of the seven elements at the same time. There is no
starting point or implied hierarchy different factors may drive the business in any one
organization.

64
 SWOT ANALYSIS:

Environmental Scan

Internal Anal ysis External Analysis

Strength Threats
Weaknesses Opportunities

A SWOT anal ysis is a strategic planning tool used to evaluate the strengths,
weakness, opportunities and threats involved in a project or in a business or
in any other situation requiring a decision. It involves monitoring the
marketing environment internal and external to the company. The technique
is credited to Albert Humphrey, who led a research project at Stanford
Universit y in the 1960s and 1970s using data f rom the fortune 500
companies.

 Strengths: attribute of the organization that are helpful to achieving the

objectives.

 Weakness: attributes of the organization those are harmful to achieving

the objectives.

 Opportunities: external conditions those are helpf ul to achieving the

objectives.

65
  Threats: external conditions those are harmful in achieving the
objectives.

The aim of any SWOT anal ysis is to isolate the key environmental factors
that are important to the plans of the organization. SWOT groups key pieces
of information into two main categories:

 Internal factors: The strengths and weakness internal to the

organization, i.e. its strategies and its relation to its competition.
 External factors: the opportunities and threats presented by the external
environment and completion

 STRENGHTS

1. Strong Brand Image

2. Dedicated sales team

3. Value added services.

4. IDBI FEDERAL Life Insurance is the first large pvt.sector life insurance co. with a

pan India network and strong retail focus to declare substantial profits for the

financial year.

5. IDBI FEDERAL Life is most profitable pvt.life insurer for last year. Company has

achieved profit of more than 1000 crore last year.

6. Largest distribution network to reach the customers across the country with 2, 13,000

agents, 900 offices in 840 towns, 200 corporate agents & Banc assurance partners.

7. Life insurance industry is a rapid growing and a nobler service industry.

66
  WEAKNESSES

They have to compete with the Government Companies like LIC and UTI who has been very
established in this field. So they will have to attain the same trust of the public as it is in case
of LIC and UTI.

 OPPORTUNITIES

1. Life insurance has captured its mere15 – 20% growth therefore a wide open untapped
market is open to the company to develop, grow and measure its success.
2. Still the numbers of companies are few and company has every capability to grow and
forward its performance areas to the widest.
3. Distinguishable product.

 THREATS

1. People are hesitant to invest and put their hard earned money to the private life insurance
company with the fear of getting lost.
2. Belief towards LIC as it is a government corporation phobia is continue to surmount the
people of India despite lots of flaws and development and liberalization of life insurance.
3. Alternative financial services such as mutual fund, banking services, share and securities
also pose problems and threats to the working of the life insurance sector.
4. Illiteracy and unemployment also pose threat.
5. Rising real estate industry also pose threat as people are investing a bulk of their money
over to that industry.
6. Presence of very strong competitors.

67
OBJECTIVES
OF
THE STUDY

68
 OBJECTIVES OF THE STUDY

 To develop and standardize a measure to evaluate investment Pattern in life insurance

services.

 To conduct market surveys on a sample selected from the entire population and

study of the consumer buying behavior.

 To evaluate the factors underlying consumer perception towards investment in life

insurance policies.

 To compare the differences in consumer perception of male and female consumers

 To open new vistas for further researches.

69
 RESEARCH
METHODOLOGY

70
 RESEARCH METHODOLOGY

RESEARCH STATEMENT

Study of Customers Behavior Towards Insurance and Likeness in Investing in IDBI

FEDERAL

RESEARCH DESIGN:

Descriptive Research

SAMPLE DESIGN:

Simple Random Sampling

SAMPLE UNIT:

Employees in IDBI Federal Lucknow.

SAMPLE SIZE: 100

UNIVERSE OF STUDY:

LUCKNOW

71
DATA SOURCE

The data source refes to the sources from which the data are collected for conducting the

study.Data may be of two types-

1. Primary Data

2. Secondary Data

PRIMARY DATA

The data which are collected from the field under the control and supervision of an

investigator is known as Primary Data.This type of data are generally afresh and collected for

the first time.In this case primary data was mainly collected through

1. unstructured pesonal interviews which involved personal discussions without any

premoulded question set

2. content analysis using documentary materials such as news paper,statistical

reports,etc.

SECONDARY DATA

Secondary data are collected from the sources which have been already collected for purpose

other than the problem at hand.Secondary data were collected from

1. Company files and reports,

2. Annual reports and brochures of the company,

3. Business journals and magazines,

4. Records of the company,

5. Internet websites,

72
Data Collection : - Data is collected from various customers through personal interaction.

Specific questionnaire is prepared for colleting data. Data is collected with more interaction

and formal discussion with different respondents and we collect data about preference of

potocopier product by face to face contact with the persons from whom the information is to

be obtained (known as informants). The interviewer asks them questions pertaining to the

survey and collects the desired information. This is a descriptive research with sample

size 100.

Problem and Limitations of the study

As I was asked to carry on my vocational training I found the following limitations

during my training period. So I could not collect all information regarding my topic.

1. Shortage of time factor was one of the biggest constraints.

2. Most stress was given on the primary data as it was difficult to collect secondary data

from the organization and distribution since it is difficult to ascertain the authenticity of

their statements.

3. All the observation and recommendation will be made on the feed back.

73
 DATA ANALYSIS
AND
INTERPRETATION

74
 DATA ANALYSIS AND INTERPRETATION

1. Classifications of respondents.

1.1 Table showing distribution of Gender

Male 78%

Female 22%

Gender

78%

Male
Female

3.2

INTERPRETATION:

Majority of the respondents are male i.e 78% while female are only 22%

75
1.2 What is your age?

18-25 years 25%

25-35 years 30%

35-45 years 26%

45-60 years 19

age group

19% 25%

18-25

26% 25-35

30% 35-45
45-60

INTERPRETATION:

Majority of the respondents were of the age group between 25-35 years, and the least were of

45-60 years age group. Respondents of age group between 18-25 and 25-45 years are 25%

and 26% respectively.

76
1.3 What is your occupation?

Student 8%

Serviceman 35%

Businessman 41%

Housewives 16%

occupation

16% 8%

students
35%
servicemen

41% businessmen
housewives

INTERPRETATION:

Majority of the respondents are businessmen i.e 41%, while least are students i.e 8%

, housewives and servicemen are 16% and 35% respectively.

77
1.4 How much you earn per month?

10-20 thousands per month 22%

20-30 thousands per month 25%

30-40 thousands per month 33%

40-50 thousands per month 20%

income

20% 22%

10-20 K
20-30 K
30-40 K
40-50 K
25%
33%

INTERPRETATION:

Majority of the respondents are earning 30-40 thousands per month, while the least are from
the group of 40-50 thousands per month i.e 20%. Respondents earning 20-30 thousand and
10-20 thousands per month are 25% and 22% respectively.

78
2. Do you have any insurance policy?

Yes 67%
No 33%

Distribution of Insured & Uninsured

Respondents

33%
No. of Insured Respondents
No. of uninsured respondents
67%

INTERPRETATION:
Figure shows that the Indian market has lot of potential for the life insurance industry as more
than 50% are still not insured.

79
3. Which company do you prefer for any insurance policy?

LIC 66%
ICICI Prudential 9%
HDFC Std 6%
SBI Life 11%
Kotak Life 2%
TATA AIG 5%
Reliance Life 1%

Preference of Respondents of Insurance

Companies
1%
2%
5%
LIC
11% ICICI Pru
HDFC Std
6%
SBI Life
9% Kotak Life
66%
TATA AIG
Reliance Life

INTERPRETATION:
This figure clearly explains that LIC is still the most recalled brand in the mind of the Indian
consumers while the least preffered brand is Reliance life.

80
4. What is your preference of policy terms?

<5 years 20%

5-10 years 17%
10-20 years 58%
>20 years 1%
Whole life 4%

Preference of Policy Terms

1%
4%
20%
< 5 years
5 - 10 years
10 - 20 years
17%
> 20 years

58% Whole Life

INTERPRETATION:
This figure shows that people are willing to buy policies for 10-20 years. This is due to the
fact that many wants insurance to be a investment tool.

81
5. What do you think about the benefits of Life Insurance?

Covers future uncertainty 34%

Tax Savings 13%
Investments 6%
Comprehensive Investment &Risk 47%
coverage instrument

People's Perception About Insurance

Covers Future Uncertainty

34%
Tax Savings
47%

Investments

Comprehensive Investment &

Risk Coverage Instrument
13%
6%

INTERPRETATION:
This figure makes it clear that people prefer insurance as a comprehensive investment and
risk coverage i.e 47% while they percieve it least as investments i.e 6%.

82
6. What are the feature Of Insurance Policy That Attracted Respondents ?

Money Back Guarantee 7%

Large Risk Coverage 30%
Low Premium 11%
Company’s Credibility 37%
Easy Access To Agents 7%

Feature Of Insurance Policy That Attracted

Respondents

7%
15%
Money Back Guarantee
Larger Risk Coverage

37% Low Premium

30% Company's Credibility
Easy Access to Agents

11%

INTERPRETATION:
This figure says that most of the people wants companies credibility i.e 37% as well as they
prefer larger risk coverage i.e 30%.

83
7. How have you bought / would buy a Life Insurance policy?

Customer approaching Insurance 45%

company/Agent
Insurance Company/ Agent 55%
approaching the customer

Buying Preference Of The Respondents

Customer Approaching
45%
Insurance Company / Agent
Insurance Company / Agent
55%
Approaching The Customer

INTERPRETATION:
This figure makes it clear that agents & life advisors are the main source for company to
bring business i.e 55%.

84
8. Are you satisfied with your Life Insurance policy?

Highly satisfied 39%

Satisfied 21%
Not so satisfied 40%

Satisfaction Of Respondents w.r.t.

Life Insurance Policy

40% 39% Highly Satisfied

Satisfied
Not So Satisfied

21%

INTERPRETATION:
This figure states the percentage of policy holders satisfaction level to their company.
Majority of the respondents are not satisfied i.e 40% because of service after sales or during
claims, while 39% are highly satisfied and 21% are just satisfied.

85
9. According to you, what is the right age to buy insurance?

Anytime 52%
25-35 years 29%
35-45 years 10%
>45 years 9%

People's Perception On Appropriate Age For

Buying Insurance

9%

25 - 35 years

29% 35 - 45 years
52% > 45 years
Anytime

10%

INTERPRETATION:
This figure states that majority of people don’t consider their age while buying an insurance
policy i.e 52%. This shows that people don’t plan their policies they just buy at whatever age.

86
FINDINGS
OF
THE STUDY

87
 FINDINGS

 Majority of the respondents are male i.e 78% while female are only 22%.

 Majority of the respondents were of the age group between 25-35 years, and the least

were of 45-60 years age group.

 Majority of the respondents are businessmen i.e 41%, while least are students i.e 8%.

 Majority of the respondents are earning 30-40 thousands per month, while the least

are from the group of 40-50 thousands per month i.e 20%.

 Indian market has lot of potential for the life insurance industry as more than 50% are

still not insured.

 LIC is the most recalled brand in the mind of the Indian consumers while the least

preffered brand is Reliance life.

 People are willing to buy policies for 10-20 years.

 People prefer insurance as a comprehensive investment and risk coverage i.e 47%

while they percieve it least as investments i.e 6%.

 Most of the people wants companies credibility i.e 37% as well as they prefer larger

risk coverage i.e 30%.

 Agents & life advisors are the main source for company to bring business i.e 55%.

 Majority of the respondents were not satisfied i.e 40%.

 Majority of people don’t consider their age while buying an insurance policy i.e 52%.

88
 SUGGESTIONS
AND
RECOMMENDATIONS

89
 SUGGESTIONS AND RECOMMENDATIONS

 We need to tap the young crowd in the age group 18-30 and convince them that

buying a life insurance policy is necessary because life is very unpredictable.

 More plans should be made that involve less period of premium payment.

 As friends and family members are major influencers of customers, our

advertisements and promotions should be family and friend-centred.

 Group insurance policies like ‘full family insurance’ schemes should be made.

 Our reach needs to be increased through social media (Facebook, Twitter, and

YouTube campaigns), television, radio, newspapers etc.

 Our insurance policies should have a range of premiums to suit every pocket size.

 In terms of distribution, we should increase the number of marketers- more channels

of distribution and more intermediaries.

 Our advertisements should cover the benefits of our policies and what differentiates

our policies from those of other companies, in brief.

 Our company should have more offices at smaller towns and uncovered segments in

the cities.

 Mobile Commerce is the next big thing! We can have a mobile app where our

customers can get all the information related to our products as well as pay their

premiums.

90
CONCLUSION
OF
THE STUDY

91
 CONCLUSION

 During the survey, it has been found that people have great awareness about various

companies but a lot more has to be done, especially by smaller companies like IDBI

Federal to establish their market presence.

 People are beginning to look beyond LIC for their insurance needs and are willing to

trust private players with their hard earned money.

 People in general have been influenced by the marketing activities of insurance

companies. A high penetration of print, radio and TV ad campaigns over the years is

beginning to have its impact now.

 Another important trend was in terms of people viewing insurance as a tax saving and

investment instrument as much as protective one.

 The general satisfaction levels among public with regards to policy and agents still

requires improvement. Here lies the opportunity for a relatively new comer like IDBI

Federal. LIC has never been known for prompt service or customer oriented methods

but IDBI Federal can build its reputation based on these factors.

92
LIMITATIONS
OF
THE STUDY

93
 LIMITATIONS OF THE STUDY

 The study was restricted to a single branch of the company.

 The study is made based on available information, it may not be authentic.

 Time constraint was a limitation of the study.

 Employees were not able to provide much help due to their work.

 Increased competition

 Lack of awareness about the earning opportunity in the insurance and Policy

sector.

94
 BIBLIOGRAPHY

BOOKS

 Kothari. C.R (2004): Research Methodology Methods & Techniques‟, New Age
International Publishers, New Delhi, 2nd Edition.

 Richard I. Levin, David S. Rubin (2004): „Statistics for Management‟, Prentice Hall
of India Private Limited, New Delhi, 7th Edition.

Websites
 www.Idbifederal.com
 www.idbi.com

95
ANNEXURE

96
 QUESTIONNAIRE

Name …………………………………………...

Address or customer …………………………...

Occupation……………………………………..

Age……………………………………………..

Annual Income…………………………………

1. Information source about IDBI Federal ?

News Paper
T.V ad
Trade show
Internet
Peer group
Personal approach by dealer

2. Which language News paper and T.V channel do you prefer ?

Hindi
English
Other

3. Have you seen IDBI advertisement (print or T.V or commercial ) ?

Print ad
T.V , commercial

4. Was that advertisement effective for marketing mix ?

97
 Yes
No

5. What was the influencing power of marketing mix ?

Discount
Brand ambassador
Free gifts
Performance

6. What is influencing power of Insurance ?

Return
Life security
Income
Family safety

7. Are you satisfied with plans of IDBI Federal Insurance plans ?

Yes
No

8.what do you want to the insurance plan ?

Return
Safety
Regular income
Family safety

98