Sie sind auf Seite 1von 76



“Insurance investment is a better than other financial instrument?”

BMA Wealth Creator


SESSION (2009-2011)


Radhey Shyam


University Roll No.



I hereby declare that, the project entitled “Insurance investments is better than other
financial instruments?” assigned to me for the partial fulfillment of MBA degree from
Kurukshetra University, Kurukshetra. The work is originally completed by me and the
information provided in the study is authentic to the best of my knowledge.

This study has not been submitted to any other institution or university for the award of
any other degree.

Radhey Shyam
University Roll. No


“Gratitude is the hardest of emotions to express and one often does not find adequate
words to convey what one feels and trying to express it”
The present project file is an amalgamated of various thoughts and experiences .The
successful completion of this project report would have not been possible without the
help and guidance of number of people and specially to my project guide in the company
Mr. Pardeep Kumar, BMA wealth creator. I take this opportunity to thank all those who
have directly and indirectly inspired, directed and helped me towards successful
completion of this project report.

I am also immensely indebted to my project guide, Ms Sandhya kaushal Lecturer, ICL,

for his illumining observation, encouraging suggestions and constructive criticisms,
which have helped me in completing this research project successfully.

There are several other people who also deserve much more than a mere
acknowledgement at their exemplary help. I also acknowledge with deep sense of
gratitude and wholehearted help and cooperation intended to me by them.

Radhey Shyam

Summer Training is the bridge for a student that takes him from his theoretical
knowledge world to practical industry world. The main purpose of industrial visit is to
expose for industrial and business environment, which cannot be possible in the

The advantages of this sort of integration, which promotes guided to corporate culture,
functional, social and norms along with formal teaching are numerous.

1) To bridge the gap between theory and practical.

2) To install the feeling of belongingness and acceptance.
3) To help the student to develop the better understanding of the concept and
questions already raised or to be raised subsequently during their research period.

The present report gives a detailed view of the “Insurance investment is better than
other financial instruments?”The research is definitely going to play an important role
in developing an aptitude for hard self-confidence.


Chapter 1: Life Insurance Industry

➢ Industry profile

➢ important milestones in the life insurance business

➢ Insurance sector reforms

➢ Contribution of Life Insurance in the Economy

➢ Flow of Insurance Industry in India

➢ Structure of life Insurance Industry

➢ Life Insurance industry

➢ Aggregation of Long Term Saving

➢ Spread of financial services in rural Areas

➢ Long term funds for infrastructure Development of Capital

Markets/Economic Growth

➢ Employment generation

➢ Growth Potential

➢ Phase of transition

Chapter 3:Company Profile

➢ BMA wealth creator

Chapter5:Research methodology

Chapter6:Objective of research

Chapter7:Intoduction to project

➢ Other financial instruments

➢ Products and plans

➢ Special features

Chapter 8:
➢ Data Analyses and interpretation

Chapter 9: Conclusion
Chapter 10: Limitations
Chapter 11: Suggestion
Chapter 12:References
Chapter 13: Annexure

Chapter 1:

➢ Industrial profile

➢ Important miles stone in the insurance business

➢ Insurance sector reforms

➢ Contribution of life insurance in the economy

➢ Flow of insurance industry in India

➢ Structure of life insurance industry

➢ Life insurance industry

➢ Aggregation of long term savings

➢ Spread of financial services in rural areas

➢ Long term funds for infrastructure development

Brief History of the Insurance Sector in India

The business of life insurance in India in its existing form started in India in the year
1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster
existed in primitive men also. They too sought to avert the evil consequences of fire and
flood and loss of life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the recent past,
particularly after the industrial era – past few centuries – yet its beginnings date back
almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company started by Europeans in Calcutta was the first life insurance
company on Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and these
companies were not insuring Indian natives. However, later with the efforts of eminent
people like Babu Muttylal Seal, the foreign life insurance companies started insuring
Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra
premiums were being charged on them. Bombay Mutual Life Assurance Society
heralded the birth of first Indian life insurance company in the year 1870, and covered
Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives,
insurance companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swadeshi
movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative
Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative
Insurance Company took its birth in one of the rooms of the Jorasanko, house of the
great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance
and Swadeshi Life (later Bombay Life) were some of the companies established during
the same period. Prior to 1912 India had no legislation to regulate insurance business. In
the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were
passed. The Life Insurance Companies Act 1912 made it necessary that the premium rate
tables and periodical valuations of companies should be certified by an actuary. But the
Act discriminated between foreign and Indian companies on many accounts, putting the
Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance business.
From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176
companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming

of insurance companies many financially unsound concerns were also floated which
failed miserably. The Insurance Act 1938 was the first legislation governing not only life
insurance but also non-life insurance to provide strict state control over insurance
business. The demand for nationalization of life insurance industry was made repeatedly
in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance
Act 1938 was introduced in the Legislative Assembly. However, it was much later on the
19th of January 1956 that life insurance in India was nationalized. About 154 Indian
insurance companies, 16 non-Indian companies and 75 provident were operating in India
at the time of nationalization. Nationalization was accomplished in two stages; initially
the management of the companies was taken over by means of an Ordinance, and later,
the ownership too by means of a comprehensive bill. The Parliament of India passed the
Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance
Corporation of India was created on 1st September, 1956, with the objective of spreading
life insurance much more widely and in particular to the rural areas with a view to reach
all insurable persons in the country, providing them adequate financial cover at a
reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long-term contracts
and during the currency of the policy it requires a variety of services need was felt in the
later years to expand the operations and place a branch office at each district headquarter.
Re-organization of LIC took place and large numbers of new branch offices were
opened. As a result of re-organization servicing functions were transferred to the
branches, and branches were made accounting units. It worked wonders with the
performance of the corporation. It may be seen that from about 200.00 Corers of New
Business in 1957 the corporation crossed 1000.00 Corers only in the year 1969-70, and it
took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-
organization happening in the early eighties, by 1985-86 LIC had already crossed
7000.00 crore Sum Assured on new policies.

Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the corporate office. LIC’s Wide Area Network covers 100
divisional offices and connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-line premium collection
facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition
to customer convenience. Apart from on-line Kiosks and IVRS, Info Centers have been
commissioned at Mumbai, Ahmadabad, Bangalore, Chennai, Hyderabad, Kolkata, New
Delhi, Pune and many other cities. With a vision of providing easy access to its
policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite
offices are smaller, leaner and closer to the customer. The digitalized records of the
satellite offices will facilitate anywhere servicing and many other conveniences in the

From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives
which inspired our forefathers to bring insurance into existence in this country inspire us
at LIC to take this message of protection to light the lamps of security in as many homes
as possible and to help the people in providing security to their families.

Some of the important milestones in the life insurance business

in India are:

1850Non life insurance debuts with triton insurance company. 1870 Bombay

mutual life assurance society is the first Indian owned life insurer
1912 The Indian Life Assurance Companies Act enacted as the first statute to regulate
the life insurance business.
1928 The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.

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

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

The General insurance business in India, on the other hand, can trace its roots to the
Triton Insurance Company Ltd., the first general insurance company established in the
year 1850 in Calcutta by the British. Some of the important milestones in the general
insurance business in India are:

1907 The Indian Mercantile Insurance Ltd. set up, the first company to transact all
classes of genera linsurancebusiness.
1957 General Insurance Council, a wing of the Insurance Association of India, frames
a code of conduct for ensuring fair conduct and sound business practices.
1968 The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972 The General Insurance Business (Nationalization) Act, 1972 nationalized the
general insurance business in India with effect from 1st January 1973. 107 insurers
amalgamated and grouped into four companies’ viz. the National Insurance Company
Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and
the United India Insurance Company Ltd. GIC incorporated as a company.

Insurance sector reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.
N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its
future direction.

The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector. The reforms were aimed at “creating a more efficient and
competitive financial system suitable for the requirements of the economy keeping in
mind the structural changes currently underway and recognizing that insurance is an

important part of the overall financial system where it was necessary to address the need
for similar reforms…” In 1994, the committee submitted the report and some of the key
recommendations included.

➢ 1997 Insurance regulator IRDA set up

2000 IRDA starts giving licenses to private insurers: Kotak Life Insurance
ICICI prudential and HDFC Standard Life insurance first private insurers to sell a
2001 Royal Sundaram Alliance first non life insurer to sell a policy 2002

Banks allowed to sell insurance plans.

The Insurance Regulatory and Development Authority


The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act
as a strong and powerful supervisory and regulatory authority for insurance. Post
nationalization, the role of Controller of Insurance diminished considerably in
significance since the Government owned the insurance companies.

But the scenario changed with the private and foreign companies foraying in to the

insurance sector. This necessitated the need for a strong, independent and autonomous
Insurance Regulatory Authority was felt. As the enacting of legislation would have taken
time, the then Government constituted through a Government resolution an Interim
Insurance Regulatory Authority pending the enactment of a comprehensive legislation.

The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for
the establishment of an Authority to protect the interests of holders of insurance policies,
to regulate, promote and ensure orderly growth of the insurance industry and for matters
connected therewith or incidental thereto and further to amend the Insurance Act, 1938,
the Life Insurance Corporation Act, 1956 and the General insurance Business
(Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of
India (for life insurance business) and General Insurance Corporation and its subsidiaries
(for general insurance business).

The act extends to the whole of India and will come into force on such date as the
Central Government may, by notification in the Official Gazette specify. Different dates
may be appointed for different provisions of this Act.

The Act has defined certain terms; some of the most important ones are as follows

appointed day means the date on which the Authority is established under the act.
Authority means the established under this Act.
Interim Insurance Regulatory Authority means the Insurance Regulatory Authority set up
by the Central Government through Resolution No. 17(2)/ 94-lns-V dated the 23rd
January, 1996.

Words and expressions used and not defined in this Act but defined in the Insurance Act,
1938 or the Life Insurance Corporation Act, 1956 or the General Insurance Business
(Nationalization) Act, 1972 shall have the meanings respectively assigned to them in
those Acts

A new definition of "Indian Insurance Company" has been inserted. "Indian insurance
company" means any insurer being a company (a) which is formed and registered under
the Companies Act, 1956
(b) in which the aggregate holdings of equity shares by a foreign company, either by
itself or through its subsidiary companies or its nominees, do not exceed twenty-six per
cent. Paid up capital in such Indian insurance company (c) whose sole purpose is to carry
on life insurance business, general insurance business or re-insurance business.

FLOW OF Insurance Industry in India

• Structure of Insurance Industry: Snap Shot

• Contribution to Indian Economy
• Special Features


Historical Perspective
(i) Prior to 1956 242 companies operating
(ii) 1956 - 2001 Nationalization – LIC monopoly
player – Government control
(iii) 2001 -- Opened up sector

Snap Shot - Contd.

• (a) LIC – Fully owned by Government
(b) Postal Life Insurance
• (ii) Private players -
1. Bajaj Allianz Life Insurance Co. Ltd.
2. Birla Sun Life Insurance Co. Ltd. (BSLI)
3. HDFC Standard Life Insurance Co. Ltd. (HDFC STD
4. ICICI Prudential Life Insurance Co. Ltd. (ICICI
5. ING Vysya Life Insurance Co. Ltd. (ING VYSYA)
6. Max New York Life Insurance Co. Ltd. (MNYL)
7. MetLife India Insurance Co. Pvt. Ltd. (METLIFE)
8. Kotak Mahindra Old Mutual Life Insurance Co. Ltd.
9. SBI Life Insurance Co. Ltd. (SBI LIFE)
10. TATA AIG Life Insurance Co. Ltd. (TATA AIG)
11. Reliance Life Insurance
12. Aviva Life Insurance Co. Pvt. Ltd. (AVIVA)
13. Sahara India Life Insurance Co. Ltd. (SAHARA
14. Shriram Sunlam
• (iii) Other likely players – PNB Life Insurance, Axa Bharti Enterprises

Potential of the Insurance sector:

Total population 1.1 billion

Total population of 253 millions

Insurable class
Total population 88.5 millions

Source: Financial Express-Delhi.

Market share:

2005-06 2006-07 2008-09 2009

98% 94% 87% 78%
Players 2% 6% 13% 22%

Industry growth rate at 36% (2004-05) with premium income

From new business.
Source: Financial Express- Delhi

Market Share

Company Indian Foreign Market

Promoter/ Insurance share based
Partner on premium

Aviva life Dabur Aviva, UK 1.12

Bajaj Allianz Bajaj Auto Allianz, 6.12
Birla sun life Aditya Birla Sun Life, 1.84
group Canada
HDFC HDFC Standard Life, 2.96
Standard UK
ICICI ICICI Bank Prudential, UK 7.11
ING Vysya Vysya Bank ING Insurance, 0.63
Kotak Kotak Old Mutual 0.71
Mahindra, Mahindra South Africa
Old Mutual Bank
Max New Max India New York Life, 1.32
York US
MetLife Jammu & MetLife, US 0.40
Kashmir Bank
Sahara Life Sahara India None 0.80
SBI Life SBI Cardiff, France 1.52
Tata AIG Tata Group AIG, US 1.78

(i) Life Insurance is the only sector which garners
long term savings
(ii) Spread of financial services in rural areas and
amongst socially less privileged
(iii) Long term funds for infrastructure
(iv) Strong positive correlation between
development of capital markets and insurance/
pension sector
(v) Employment generation

Aggregation of Long Term Savings

(i) Total Assets of Life Insurance Companies

2005-2006 2006-2007 2007-2008

2,80,450Cr 3,52,608Cr 4,23,000 Cr

(ii) Total Premium generated

2005-2006 2006-2007 2007-2008
94,000 Cr 1,12000 Cr 1,33,000 Cr

(iii) Industry is growing @ 19 p.a.

(v) Life Insurance funds account for 15% of household savings.

(vi)The industry has the potential to increase the share to 20%.

Spread of financial services in rural areas and amongst socially underprivileged

• IRDA Regulations provide certain minimum business to be done
(i) In rural areas
(ii) In the socially weaker sections
• Life Insurance offices are spread over nearly

1400 centers.
• Presence of representative in every tensile –
deeper penetration in rural areas.
• Insurance agents numbering over 6.24 lakhs
in rural areas.
• Policies sold in rural areas (2004-05) - No. of
policies - 55 lakhs Sum assured 46,000 cr

• Social security - No. of lives covered 2003-04
17.4 lakhs 2004-05 42.1 lakhs
Long term funds for infrastructure

• For GDP to grow at 8 to 10%, qualitative improvement in infrastructure is essential.

• Estimates of funds required for development of infrastructure vary widely.

• An investment of 6, 19,600 crore is anticipated in the next 5 years (Source : SSKI


• Tenure of funding required for infrastructure

normally ranges from 10 to 20 years.

• Major portion of these funds are routed through debt/private equity


Development of Capital Markets/

Economic Growth

•Industry also contributes in economic development through investments in capital

market. Present level of investments is over Rs. 40,000 crore. (Mark to Market basis
around 80,000 Crores).

•Annual Investment of around 9000 Crores in capital markets.

•Contribution to Five Year Plans9th Plan 2, 30,900 Crores Last Two Years 1, 70,900

• Helps inculcate a sense of security by protecting earning of people in case of untimely

death. Benefits to Policy Holders

2005-2006 2006-2007 2007-2008

20,800 Cr 24,200 Cr 28,700 Cr


• Life insurance industry provides increased

employment opportunities.
• Employees in insurance sector as on 31st March,
2005 is around 2 lakhs.
• Many agents depend on insurance for their
Livelihood–No. of agents on 31st March 2004 –
15.59 lakhs
•Brokers, corporate agents, training establishments
provide extra employment opportunities.
• Many of these openings are in rural sectors.

Chapter 2:

Company profile

Company Overview
BMA Wealth Creators Pvt., Ltd. operates as a financial services organization in India. It
provides individual and corporate financial and investment solutions. BMA Wealth
Creators Pvt., Ltd. was formerly known as BMA Stock Broking Pvt., Ltd. and changed

its name in July 2007. The company was incorporated in 2004 and is based in Kolkata,

A premier financial services organisation providing individual and corporates with

customized financial solutions. We work towards understanding your financial goals and
risk profile. Our expertise combined with thorough understanding of the financial
markets results in appropriate investment solutions for you. At Wealth Creators we
realize your dreams, needs, aspirations, concerns and resources are unique. This is
reflected in every move we make with and for you. We have deep appreciation for the
Value of building an everlasting relationship with YOU.

We inherit the legacy of BMA group which has been one of the dominant entities in
Ferrous and Ferro Alloy industry in India. The BMA Group has created its niche in by
promoting successful ventures in the fields of coal mining, refractory, steel and ferro
alloy. The strive to achieve excellence and dynamic growth has been possible through
optimum mix of technology, customer orientation, best business practices, forging
alliances, high quality standards and proactive business culture. Millenium City

Management team
Our Company is managed by a team of highly qualified and experienced professionals
from the finance industry across the country. Know more about them:


As the Managing Director and Chief Executive Officer, Mr Anubhav Bhatter is

the guiding force of the Company. A graduate in Commerce from St Xaviers
College, Kolkata and a Chartered Financial Analyst, Mr Anubhav Bhatter
founded one of the leading financial services company in India, BMA Wealth
Creators Limited. With over nine years of financial experience, he has set new
standards and established niche operations to bring BMA Wealth Creators
Limited to a position that it has reached today.


An MBA from Xavier Institute of Management, Bhubaneshwar, Mr Avinash

Agarwal is the voice of knowledge on the Board of Directors of the Company.
With over nine years of severe market experience in Financial as well as the
Product Manufacturing industry, Mr Avinash Agarwal has given shape to the
growth of BMA Wealth Creators Limited. With an extensive knowledge of the
nuances involved in the financial sector and a strong foot hold over the market,
the entire Group looks up to his contribution.


A pillar of strength to the Company, Asit Kumar Ghosh has been associated with
BMA Wealth Creators Limited since the day of its inception. Having joined in
the capacity of a Vice President, currently he is operating as Director, BMA

Wealth Creators Limited. From establishing and strengthening the customer base
to setting up the entire Retail Channel, he has played a vital role in the formation
of the Company.

A Bachelor of Science from the University of Kolkata and a Post Graduate in

Computer Applications, Mr Asit Kumar Ghosh has worked in the capacity of
various managerial positions for numerous organizations including Alliance
Credit & Investments, Tata TD Waterhouse, Anagram Securities and IL&FS
where he successfully proved his worth. With over fifteen years of experience
and his extensive knowledge, Mr Ghosh keeps adding value to the Company.


Experience is the greatest education. And you know it when you meet Mr Shiv
Kumar Damani. With a financial career spanning over twenty years, currently he
is operating as Director, BMA Wealth Creators Limited. He has been associated
with the Company since its inception and ever since, he has nurtured the growth
and operation of the Company just as a parent would do for its child.

A Bachelor in Commerce from the University of Calcutta, Mr Shiv Kumar

Damani has studied the financial market from close quarters to manage the risks
involved while working towards the benefit of the Company and the people it is
associated with, thus saving them the wrath of the global economic slowdown.


With over twelve years of financial market experience, Saikat’s knowledge of the
industry is comprehensive. A certified Chartered Financial Analyst and an MBA
from Birla Institute of Management, he held several top managerial positions in
various organizations including Reliance Money before he joined BMA Wealth
Creators Limited in the year 2009 as its Chief Operating Officer.

Ever since, he has led BMA Wealth Creators Limited in handling several niche
Sales, Distribution and Product Management initiatives. He has been instrumental
in setting the pan India foot print of the organization by setting up Branches and
distribution network in every nook and corner of the country. His extensive
knowledge, along with his leadership skills will surely help BMAWC touch

Mission & vision


To be a premier financial supermarket providing integrated investment



To provide integrated financial services building investor wealth and


Chapter 3

Research always starts with a question or a problem. Its purpose is to question through
the application of the scientific method. It is a systematic and intensive study directed
towards a more complete knowledge of the subject studied. Marketing research is the
function which links the consumer, customer and public to the marketer through
information- information used to identify and define marketing opportunities and
problems generate, refine, and evaluate marketing actions, monitor marketing actions,
monitor marketing performance and improve understanding of market as a process.

Marketing research specifies the information required to address these issues, designs,
and the method for collecting information, manage and implemented the data collection
process, analyses the results and communicate the findings and their implication.
I have prepared our project as descriptive type, as the objective of the study demands the

answers of the question related to find the “Insurance investment is better than
other financial investment?”

The Marketing Research Process

As marketing research is a systemic and formalized process, it follows a certain sequence
of research action. The marketing process has the following steps:
➢ Formulating the problems
➢ Developing objectives of the research
➢ Designing an effective research plan
➢ Data collection techniques
➢ Analysis and Interpretation of Data
Evaluating the data and preparing a research report design
The Research Methodology here includes: -
1. Meaning of research
2. Research problem
3. Research design
4. Sampling design
5. Data collection method

Meaning Of Research

Research is defined as "a scientific & systematic search for pertinent information
on a specific topic. Research is an art of scientific investigation. Research is a
systematized effort to gain new knowledge. It is a careful investigation or inquiry

especially through search for new facts in any branch of knowledge. Research is an
academic activity and this term should be used in a technical sense. Research com prices
defining and redefining problems, formulating hypothesis or suggested solutions; making
deductions and reaching conclusions to determine whether they fit the formulating hypo
thesis. Research is thus, an original contribution to the existing stock of knowledge
making for its advancement. The search for knowledge through objective and systematic
method of finding solution to a problem is research.

Research Problem

The first step while conducting research is careful definition of Research


Research Design
A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in
procedure. Research design is the conceptual structure within which research is
conducted. It constitutes the blueprint for the collection measurement and analysis of
data. Research design includes an outline of what the researcher will do from writing the
hypothesis and its operational implication to the final analysis of data.

A research design is a framework for the study and is used as a guide in

collecting and analyzing the data. It is a strategy specifying which approach will be used
for gathering and analyzing the data. It also includes the time and cost budget since most
studies are done under these two constraints.
Research design can be categorized as:
➢ Exploratory Research
➢ Descriptive Research
➢ Diagnostic Research

➢ Experimental Research
The present study is exploratory in nature, as it seeks to discover ideas and insight and to
bring out new relationships. Research design is flexible enough to provide opportunity
for considering different aspects of problems under study. It helps in bringing into focus
some inherent weakness in enterprise regarding which in depth study can be conducted
by management.
Sampling Design

Sampling is necessary because it is almost impossible to examine the entire

parent population (i.e. the entire universe) various factors such as time available, cost,
purpose of study etc. make it necessary for the researchers to choose a sample. It should
neither be too small nor too big. It should be manageable. The sample size of post one
year is taken for present study due to time limitation.

Data Collection Method

After the sample has been taken the type of information to be sought was decided
upon, the next step is to collect the data. As the data collected is to be the base of
what we plan to find out, the relevant care should be taken that the errors in methods
of collection of data involved are minimized. The factors of availability of time, cost
and human involvement come to affect the reliability of the data collected. Broadly
there are two types of data:\

➢ Primary data
➢ Secondary data.
Secondary data means the statistics not gathered for the immediate study at hand but for
some other data. It is the date collected by someone for purposes other than solving the
problem being investigated. On the other hand primary data are generated in a study
specifically designed to accommodate the data needs of the problem at hand. In the

present study we have made use of secondary data collected from their website and from
there records.

Research design:
Research Design helps in establishing the way the researcher to go about to
receive the objective of the study.

Acc. to Paulen V Young –

Research design is a logical and systematic planning & deriving a piece of
research. The design results from translating general specific model into various research
A research design is the arrangement of conduction for the collection & analysis
of the data in the manner that aims to combine relevance to the research with economy in
procedure. The research design is a conceptual with in which the research is conducted.
It constitutes the method for collection, measurement and analysis. The research design
used in my study is basically descriptive in nature.
Sample design:
Sampling refers to the method of selecting a sample from a given universe with
a view to draw conclusions about that universe. A sample is a representative of the
universe selected for study.
A sample design is a define plan for obtaining a sample from a given
population .It refers to the technologies or the procedure the researcher would adopt in
selected items for the sample.

Sample size :
This refers to the number of it respondents to be selected from the universe to
constitute a sample. The size of sample should neither be excessively large, nor too
small. It should be optimum. The sample size of this research was 100

Analysis And Interpretation Of Data
The data collected in the aforesaid manner have been tabulated in condensed
form to draw the meaningful results. The different techniques are adopted to analyze a

All the data and the material is arranged through internal resources and the last
part of the project consist of the conclusions drawn from the report, a brief summary and
recommendations and giving the final touch to the report by stating an conclude

Chapter 4:

Objective behind the project is as follows:
➢ To aware the customer about financial instruments

➢ Aim to help customers take important financial decisions at

every stage in life by offering them a wide range Of innovative life
insurance products, to make them financially independent.

Chapter 5:

➢ Introduction to project
➢ About the project
➢ Special features
➢ Product and plans
➢ Other financial instruments

About the project
The service industry is one of the fastest growing sectors in India today. The upcoming
sectors which are really showing the graph towards upwards are - Telecom, Banking, and
Insurance. These sectors really have a lot of responsibility towards the economy.

Amongst the above-mentioned areas insurance is one sector, which took a lot of time in
positioning itself. The insurance business of non-life companies was not much in
problems but the major problem was with life insurance. Life Insurance Corporation of
India had monopoly for more than 45 years, but the picture then was completely
different. Previously people felt that “Insurance is only for classes not for masses” but
now the picture is vice-versa.

The story of insurance is probably as old as the story of mankind. The same instinct that
prompts modern businessmen today to secure themselves against loss and disaster
existed in primitive men also. They too sought to avert the evil consequences of fire and
flood and loss of life and were willing to make some sort of sacrifice in order to achieve

security. Though the concept of insurance is largely a development of the recent past,
particularly after the industrial era – past few centuries – yet its beginnings date back
almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company started by Europeans in Calcutta was the first life insurance
company on Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and these
companies were not insuring Indian natives. However, later with the efforts of eminent
people like Babu Muttylal Seal, the foreign life insurance companies started insuring
Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra
premiums were being charged on them. Bombay Mutual Life Assurance Society
heralded the birth of first Indian life insurance company in the year 1870, and covered
Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives,
insurance companies came into existence to carry the message of insurance and social
security through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism. The Swedish movement
of 1905-1907 gave rise to more insurance companies. The United India in Madras,
National Indian and National Insurance in Calcutta and the Co-operative Assurance at
Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company
took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath
Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swedish Life (later
Bombay Life) were some of the companies established during the same period. Prior to
1912 India had no legislation to regulate insurance business. In the year 1912, the Life
Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance
Companies Act 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act discriminated
between foreign and Indian companies on many accounts, putting the Indian companies
at a disadvantage.

The formation of IRDA, entrance of private life insurance companies into India with one
foreign partner, compulsory training of Insurance agents etc. developments started to
take place. And this was the time when these companies started searching for proper
channel partners who can help the organization in expanding its network and business in

Channel partners are those who are going to be into direct selling of company’s products
i.e. the insurance policies. They are the link between the customers and the management
or company. These channel partners are people with different profiles. They are selected
on some grounds like their network of people, their problem handling ability, convincing
power and lot many things.

The main idea behind company’s Questionnaire Survey is to find out and analyze the
proper profile that can be recruited by company as a channel partner. Company has been
focusing on some of the profile that can be very beneficial for the company. For example
Chartered Accountants, Tax Consultants, Postal agents, Bank’s Daily Collection Agents
etc. the main idea behind targeting the above profile is strong client network which is
really very important for an insurance company.

The project title is “Insurance investment is better than other financial

investments?”. This shows the scope for private insurance companies have great
opportunities to cover the market and can insure the customer. With the initiation of the
deregulation in the Indian insurance market, the monopoly of big public sector
companies in life insurance market has been broken. New private players have entered
the market and with their innovative approaches and better use of distribution channels
and technology, they are eating in to the shares of established public sector companies in
Indian Insurance Market. Since the deregulation has been put in to place, the market
share of LIC has come down to 71.4% in life insurance market while the private players

have captured around 17% market in the general insurance segment. This report includes
the key private players in the insurance market such as ICICI Prudential, Kodak Life
Insurance Bajaj Allianz, Birla Sun life, and TATA AIG. It also includes the leading
competitors in the life insurance and general insurance segments along with their market

• Tax clubbing of various savings short term and long term into same bracket have a bias
towards short term savings.

• Distinction between the short term savings and long term savings is critical from
investor’s point of view. More prone to inflationary pressures

• Clearly, long term savings more than 10 years deserve special tax

Life insurance makes saving possible
One constantly meets with those whose argument
against life insurance is that they prefer to save. The
habit of saving should by all means he encouraged
but it should be borne in mind that the saving of a
competence involves the necessary time to save,
and that life insurance is the only certain method to
use as a hedge against the possibility of the saving
period being cut short. A policy of saving can yield
only a small amount at the start, while a policy of
insurance from its beginning guarantees the full face
value and thus safeguards the policyholder against
failure through early death to have sufficient time to
save adequately through other channels. Thus, if
one is able to save $500 annually it will take nearly
fifteen years to accumulate a fund of $10,000,
assuming that the accumulations are safely invested
annually at 4 percent, compound interest. Yet the
resolution of the head of the family to protect the
home with such a savings fund is contingent upon
his surviving the full period, and may be defeated
by death before the savings have reached any
appreciable sum. To depend entirely oh saving as a
means of providing for the future of the family is, to
say the least, a highly uncertain policy to pursue.
The first requisite in providing for the future
support of dependents is absolute certainty, and this
can be secured only by using life insurance as a
hedge against the possible failure to continue the
The Advantages of Life Insurance to Society
The many advantages discussed in the preceding pages, it is
apparent, will greatly benefit the community as a whole if life
insurance is widely used. Mr. Holcombe writes:
It is clear that any agency which improves the mental or moral
attributes, or the material circumstances of any one of its citizens,
raises the condition of the community of which he is a member,
and thus benefits the state. Savings banks encourage thrift and
produce accumulations which would in many cases be otherwise
wasted, and thus they constitute a distinct and tangible benefit to
the state. Life insurance promotes a sense of responsibility,
strengthens family ties, and thus elevates the general character of
the nation. It lessens those family discords which end in divorce,
it checks intemperance, and often by its requirements brings a
realization of the benefits of right living. . . . There can be no
doubt, furthermore, that life insurance curtails the expense to the
public treasury, of almshouses and police, of criminal courts and
prisons, and of the various other necessary branches of the public
service which have to do with the prevention and punishment of
crime, and the relief of the suffering and unfortunate. ... It is
certain that in many cases the proceeds of a life-insurance policy
are practically all that remain at the death of the one responsible
for the support of helpless dependents, and in a vast number of
these cases, were it not for this aid, many persons would be
forced to accept public charity.
The value of life insurance as an agency for increasing the
individual's sense of responsibility, and for relieving the
community of much needless expense in supporting members of
Depending upon it is a fundamental duty Since life insurance furnishes the surest method
of hedging the family against the uncertainty of life, it is essential that all who have
assumed family obligations should use it as a means of protecting dependents against of
the household that should be given the widest publicity through the pulpit, the school and
the press. In the great majority of instances, life insurance is the only recourse open to
the man of moderate income who finds it difficult or impossible by force of
circumstances to accumulate a savings fund for those dependents who may outlive him.
The growth of life insurance implies an increasing development of the sense of
responsibility. The idea of providing only the uncertain the want that may be occasioned
by an untimely death. The capitalization of the value of a human life for the benefit
future for the benefit of a dependent household. As already explained life insurance is the
only sure means of changing uncertainty into certainty and is the opposite of gambling.
He who does not insure gambles for the present must give way to recognition of the fact
that a person's responsibility to his family is not limited to the years of survival.
Emphasis should be laid on the "crime of not insuring and the ringer of scorn should be
pointed at any man who, although he has provided well while alive, has not seen fit to
discount with the greatest of all chances and, if he loses, makes those dearest to him pay
the forfeit". That the gamble is a risky one is easily demonstrated by any mortality table,
and even if life is granted until age 50, let it not be overlooked that less than one in ten of
our population succeeds in accumulating a reasonable competence, and that through
reverses a great majority of this limited number lose the same by the time that age is
reached. Woman's rights as well as her duty in the matter of life insurance should also be
emphasized. She should be taught that it is not only her husband's duty adequately to
protect the family, if that is at all possible, but that it is also her duty, if necessary, to use
her persuasive powers to get him to act, and if that does not avail, to insist on action as
her right. Not only has she a right to personal protection, but her rights as regards life
insurance are further increased by her interest in the children which are as much hers as
they are her husband's. In addition to the advantage of life insurance as a direct
protection to the family, it also benefits the policyholder personally in a number of

important ways. Six advantages deserve special mention in this respect and all, it should
be noted, redound to the benefit of the policy holder's family by qualifying him better to
meet its obligations and to protect its comfort and happiness

Other Financial Instruments
Equities are a type of security that represents the ownership in a company. Equities are
traded (bought and sold) in stock markets. Alternatively, they can be purchased via the
Initial Public Offering (IPO) route, i.e. directly from the company. Investing in equities
is a good long-term investment option as the returns on equities over a long time horizon
are generally higher than most other investment avenues. However, along with the
possibility of greater returns comes greater risk.

Mutual funds
A mutual fund allows a group of people to pool their money together and have it
professionally managed, in keeping with a predetermined investment objective. This
investment avenue is popular because of its cost-efficiency, risk-diversification,
professional management and sound regulation. You can invest as little as Rs. 1,000 per
month in a mutual fund. There are various general and thematic mutual funds to choose
from and the risk and return possibilities vary accordingly.

Bonds are fixed income instruments which are issued for the purpose of raising capital.
Both private entities, such as companies, financial institutions, and the central or state
government and other government institutions use this instrument as a means of
garnering funds. Bonds issued by the Government carry the lowest level of risk but could
deliver fair returns.

Investing in bank or post-office deposits is a very common way of securing surplus
funds. These instruments are at the low end of the risk-return spectrum.

Cash equivalents
These are relatively safe and highly liquid investment options. Treasury bills and money
market funds are cash equivalents.

Non-financial Instruments

Real estate
With the ever-increasing cost of land, real estate has come up as a profitable investment

The 'yellow metal' is a preferred investment option, particularly when markets are
volatile. Today, beyond physical gold, a number of products which derive their value
from the price of gold are available for investment. These include gold futures and gold
exchange traded funds.

Balanced fund
These funds invest in debt and equity instruments. The proportion of investment in debt
and equity can vary and these funds offer a balance between risk and return.

Debt fund
Funds that invest in medium to long-term debt instruments issued by private companies,
banks, financial institutions, governments and other entities are known as Debt / Income
Funds. These funds are low risk profile funds and generate fixed and regular income
although these are less risky than equity funds; they are subject to liquidity risk, interest
rate risk and credit risk (the risk that a bond issuer will fail to repay interest and principal
on time). These funds can be further classified as debt funds, Fixed Term Plans, etc.
• Debt funds invest in a host of fixed income instruments i.e government issuances,
corporate papers and short term papers.
• The Fixed Term Plan Series are closed-end schemes of varying maturities which
invest as per their defined time line.
Entry load
The fees or charge paid by the investor at the time of buying units of a mutual fund is
called the entry load.

Equity fund
Equity funds fall into the highest risk category for mutual funds and have the potential to
offer the highest returns too. Ideally, like equities, equity funds must also be held for the
long term, i.e. for 3 years or more. Equity funds can be further classified as aggressive
funds, sector funds, large cap, mid cap or small cap funds, diversified equity funds, etc.

• Aggressive equity funds offer the maximum scope for capital appreciation as the
funds invest in less researched and under owned shares. Such investments are most
volatile and prone to higher risks than other types of equity funds.
• Sector funds/ Mid cap or small cap funds have stated criteria for investments and their
portfolios comprise of only those companies that meet their criteria. Sector funds
invest in a particular sector say banking, technology or pharmaceutical etc.
• Mid cap and small cap companies invest in companies with a mid sized or low market
capitalization, respectively, as per their definition. These funds invest only in certain
segments of the equity market and are thus, comparatively more risky than diversified
• Diversified equity funds invest across the equity space into large, mid and small cap
funds and have exposure to a host of sectors thereby reducing sector-specific or
company-specific risks.
Exit load
A charge levied on an investor at the time of redemption of mutual fund units is called
the exit load.

Gilt fund
These funds invest mainly in government securities.

Index fund
These funds invest in stocks that make up a particular stock market index (such as the
BSE Sensex and NSE Nifty) in the same proportion as the weight age given to each
stock in the index.

Inflation can be defined as a sustained increase in the general price levels (wages, prices
of goods and services) across the economy over a period of time.

The purchase or redemption fee charged by a mutual fund when an investor purchases or
sells units of the scheme, respectively, is called the load.

Products and plans

Insurance Plans - At a glance

Broadly, insurance plans can be distinctly divided into (Unit Linked Insurance
Plans) and traditional plans. A brief detail of both segments:
ULIPs (Unit Linked Insurance Plans)
ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the
attractive features they offer. Benefits include flexibility, Transparency, Liquidity, and
Fund Options.


A ULIP offers the customer an acute degree of flexibility: the flexibility to choose the
Sum Assured, and to choose the desired premium amount. ULIPs give the customer the
option of changing the level of Premium/Sum Assured even after the plan has started,
and the flexibility to change asset allocation by switching between funds with ease.


ULIPS offer a high degree of transparency, where all charges in the plan as well as the
entire net amount invested is made known to the customer. ULIPs also offer the
convenience of tracking your investment performance on a day to day basis, so you can
decide instantly where you want your assets allocated.


A ULIP offers you the option of withdrawing money a few years into the plan, allowing
for the exigencies of life. Alternatively, a ULIP will also allow for partial/systematic
withdrawal should the need arise.

Fund Options

A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a
combination of the three. The customer is also afforded the option of choosing your fund
mix based on your desired asset allocation.

Traditional Plans
These are the oldest types of insurance plans available. These plans cater to customers
with a low risk appetite. Some of the common features of traditional plans are:

1. Steady Investment
1. Major chunk of investible funds are in debt instruments.
2. Steady and almost assured returns over the long term.
2. Features
1. Death benefit is Sum Assured + guaranteed & vested bonus.
2. Helps in asset creation as they are for a long tenure.
3. Premium to Sum Assured ratios are fixed for each plan and age.
Generally withdrawals are not allowed before maturity.
Which important goals should you plan for in advance?
1) Your family's protection - so that your loved ones are secure should an unfortunate
event happen to you. Buying assures that your family receives a lumpsum that safely
tides them over any financial crises that might occur in your absence.

2) Child's education: As parent, your primary responsibility is to ensure your children's

future. Our Education Insurance plans ensure your child receives money at key stages of
his or her education even in your absence.

3) Savings: Savings plans allow you to steadily save towards a pre-decided goal in a
secure manner. These plans provide you with a host of benefits. You can choose the
premium, the underlying fund in which you want to invest your money, the ratio between
protection and investment as per your requirements.

4) Retirement: help you secure regular income for your retired life. During the
Accumulation phase, you systematically save while you are working. When you retire,

the Payout stage of the plan begins. You then purchase an annuity, which will serve as a
steady stream of income, for the rest of your life.

Chapter: 7

AGE No Of Members
18-25 11
26-30 22
31-45 44
46 to above 23

1. Age Wise classification of respondents


the age group between 18-25 person 11% are insured .26-30age group 22% are insured .
31-45age group 44% are insured and above 46 age group 23%

2. Gender wise classification of respondents

Gender No of Member



Interpretation In sample of 100 .there is 66% people are male which are fully
insured and 34% females are insured

3. No. Of persons are insured in a family

Family member No of Member
2-4 40
5-8 48
8 to above 12

In a sample of 100 persons .2-4 member in a family are 40% are
insuranced.5-8 member in a family 48% are insurance and 12% in a 8 member are

4. Income wise classification of respondents which are insured

Income No of Members
40K -70K 17
70K-1 Lake 41
1 Lake to 3 Lakes 28
3 Lacks 14

There is 17% of respondent which have income 40k-70k and 41% respondent have
income is 70K-1lake.28%respondent have income 1lake to 3lake and rest of them are

5. No. of person are insured

Insurable Member Uninsurable member

42% 58%

Only 42%people having insurance so it is potential for insurance company to capture to
all that market

6. Type of persons are insured either it is self, spose, children, all

Having insurance No of members

Self 40
Spouse 28
Children 21
Parents 18
All 11

Among that 42% people who having insurance, they have insurance
40% for self 28%for spouse 21% for children and 18% for their parents and 11% for all
family member

7. Type of polices taken by the respondents

Different policy bought buy customers

In a Insurance sector there is great share of LIC company in all planes.

8. No. of person are under insured and fully insured

Potential of life insurance

Under insurable persons Fully insurable persons
82% 18%

Only 42 % people having life insurance but among them 82% people
are underinsurance and only 18% people are fully insured according to them income

9. Market share of insurance planes in the insurance sector

Market share of insurance plan

Insurance Plan Market Share
Term Plan 39%
Money back Plan 14%
Endowment Plan 15%
Child Plan 8%
Unit link Plan 24%

In insurance sector there is 39% of share of
term planes.
14% share of money back plan.15%share of endowment plan.8% share of child plan.
And 24% share of unit link plans

10. No. of respondents which are taken the benefits of insurance

Benefits taken by the Respondents

Benefit taken by the respondents Not know
35% 75%

Only 35% peoples know about the benefits of insurance
Rest of 75% peoples not know about benefits and they invest

Their money in traditional plans

11. No. of respondents are aware about insurance instruments

Aware Not aware

42% 58%

Only 42% people are aware about the insurance sector
Rest 58% people are not aware about the insurance

Chapter 8:


• According the survey only 42% people are insured in so

remaining other part is potential for insurance sector.
• Among that 42% people who having insurance, they have insurance 40%
for self 28%for spouse 21% for children and 18% for their parents and
11% for all family member, .

• Only 42% people having insurance and 82 % people are under insured
and other 18% people are fully insured according to their income so that
is also plus point for insurance sector
• Only 35% peoples having take benefits of insurance and rest of not aware
about the insurance benefits

Chapter 9:


Some of the difficulties and limitations faced by me during my training are as


➢ Lack of awareness among the people – This is the biggest limitation found in
this sector. Most of the people are not aware about the importance and the
necessity of the insurance in their life. They are not aware how useful life
insurance can be for their family members if something happens to them.

➢ Perception of the people towards Insurance sector – People still consider

insurance just as a Tax saving device. So today also there is always a rush to buy
an Insurance Policy only at the end of the financial year like January, February
and March making the other 9 months dry for this business.

➢ Insurance does not give good returns – Still today people think that Insurance
does not give good returns. They are not aware of the modern Unit Linked
Insurance Plans which are offered by most of the Private sector players. They are
still under the perception that if they take Insurance they will get only 5-6%
returns which is not true nowadays. Nowadays most of the modern Unit Linked
Insurance Plans gives returns which are many times more than that of bank Fixed
deposits, National saving certificate, Post office deposits and Public provident

➢ Lack of awareness about the earning opportunity in the Insurance sector –

People still today are not aware about the earning opportunity that the Insurance
sector gives. After the privatization of the insurance sector many private giants
have entered the insurance sector. These private companies in order to beat the

competition and to increase their Insurance Advisors to increase their reach to the
customers are giving very high commission rates but people are not aware of that.

➢ Lack of cooperation

There is lack of cooperation with the respondents they have no time

to give answer to my question

➢ Shortage of time

For my research there is shortage of time so the sample size is small .so the
findings are not very effective

Chapter 9:


➢ All the insurance company must advertise more in the market because not all
people know more about life Insurance policy.

➢ Most number of people wants Guaranteed Returns so company must focus on this
for the customer investment.

➢ Make insurance policy which can buy any one so we can insure them through this
type of life insurance policy.

➢ All the companies must be aware there new plans to the customers by which the
returns will be max.

➢ All the companies must aware the customer to other financial instruments and
compare the insurance with them


In order to obtain more information regarding the present study and to substantiate it
with theoretical proof, the following references were made: -

Websites visited: .com

Chapter 11:


1) Name ______________________________
2) Age
1) 18-25 2)26 to 30 3) 31 to 45 4) 46 to above
3) Gender 1) male ____) female____
4) Occupation:
1) Service 2) Business 3) Professional 4 ) other

5) Family member

1) 2 to 4 2) 5 to 8 3) 8 to above

6) Do u have a life insurance?

Yes_______ No_______

If yes,
Which is it?
Company’s Term Endowme Whole Money Retirem Child Unit
name plan nt life back ent Plan link
Birla Sunlife
SBI Life
Standard Life
Bajaj Alliance
ING Vysya
Max Newyork
Met Life
Shri Ram

7) What is your annual income?

1) 40 K to 70 K 2) 70 K to 1 lake 3) 1 lake to 3 lakes 4) 3 lakes to above

8) Are you aware about the benefits of insurance?

Yes______ No______

9) Are you know about the insurance?

Yes______ No______