A STUDY ON MARKETING OF LIFE INSURANCE PRODUCTS OF TATA AIG IN TATA AIG LIFE INSURANCE COMPANY LTD.

PROJECT BY

V.SHIVA KUMAR
HT.NO:2279-106-72-080 PROJECT WORK SUBMITTED IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF DEGREE OF

MASTER IN BUSSINESS ADMINISTRATION

SIDDHARTHA INSTITUTE OF MANAGEMENT

(Affiliated to Osmania University) NARAPALLY(V),GHATKESAR(M),R.R(DT)

(2010-2012)

CONTENTS
CHAPTER: 1
EXECUTIVE SUMMARY SCOPE OF THE STUDY OBJECTIVE OF THE STUDY

LIMITATION OF THE STUDY RESEARCH METHODOLOGY

CHAPTER: 2
COMPANY INTRODUCTION COMPANY PROFILE HISTORY OF THE AIG GROUP ABOUT TATA AIG LIFE INSURENCES

CHAPTER: 3
A STUDY OF MARKETING THE REFERENCE MARKETING APPROACH

CHAPTER: 4
INSURENCES INDUSTRY INSURENCES MARKET IN INDIA KNOWLEDGE OF LIFE INSURENCES ADVERTISING INSURENCES INDUSTRY PRODUCTS

CHAPTER: 5
ANALYSIS AND INTERPRETATION FINDINGS SUGGESTIONS CONCLUSIONS

APPENDIX
QUESTIONNAIRE BIBLIOGRAPHY

ABSTRACT
The changes after liberalization and globalization process initiated since 1991 has significant impact on the financial sector. In India, personal loan Finance segment has increased in recent years. Personal loan sector is of immense importance. The success of the personal loan companies in the Market rest on the availability of customized product and also the services Quality offered to customers. The future growth of the companies depends upon its qualitative service to the customers. At this juncture, the banks should evaluate their services and identify their distinction from others. Personal loans like housing, it has maximum propensity to generate income and demand for materials, equipments and services. Also the housing sector creates a substantial employment opportunity. Low growth rates in developing markets, changing customer needs, and the uncertain economic conditions in the Developing world are exerting pressure on personal loan companies while testing their ability to survive. The only way to succeed in the market is the Formulation of differentiated service to different customer segments. Hence, It is essential to identify the discriminate service quality among the public And private players in personal loan market. The present study has made an Attempt on the credit appraisal process on personal loans at TATA AIG. The basic premise of globalization is opening of new service markets to provide the developing countries with new opportunities for the expansion of trade and economic growth. Personal loan sector has often been regarded as the engine of economic growth on account of its beneficial forward and backward linkages with the other sectors of the economy. The exposure of the banking sector of personal loan has gone up.

EXECUTIVE SUMMARY
As the title of the project suggests the main aim of the project lies in studying the marketing process of insurance products and during this process to understand the customer behavior and various reactions of the customers as prospects. Insurance business has traditionally been at the mercy of tax savers and business booms in the financial yearend. However the influx of private players in the foray has changed the business outlook of this industry. The project gives an introduction to the concept of insurance followed by its origin and history in the world and in India and then discusses the current market scenario. Further the project gives introductions of TATA-AIG life insurance company ltd. And the various products it has for offering to the public. The project then briefly discusses about the sales interviewing script, methodology of research, consumer opinion analysis direct selling, and market segmentations etc.). A sample size of 50 corporate agents was taken and their responses are briefly analyzed, tabulated, to know the reactions of corporate agents regarding insurance products of TATA-AIGLIFE.

SCOPE OF THE STUDY

By knowing who the customers are for TATA-AIG LIFE products, the target can be made to other customers.

By studying the factors influencing purchase, better strategic decisions can be made to increase the demand.

By knowing the ways of convincing the customers for opting the policy, proper steps should be adopted.

By evaluating the problems faced by the corporate agents, further steps should be taken for solving the problems.

OBJECTIVES OF THE STUDY

To study the marketing practices of corporate agents. To study the problem faced by the corporate agents in marketing of TATA-AIG LIFE To know about the factors influencing customer attitudes towards TATA-AIG products. To understand the selling mechanism and various techniques involved in the marketing of life insurance products

To understand customers perceptions regarding for opting of life insurance.

LIMITATIONS OF THE STUDY

The Limitations encountered during the process of the study are;

The study of the project is limited only to the insurance products of TATA-AIG LIFE Insurance.

The time within which the study is being conducted is too short to carry out a detailed analysis.

Only 50 respondents were covered. The response given by the people was spontaneous and therefore the reflections are the mental predisposition at the time of the Interview.

The time available for this total project is only one month.

RESEARCH METHODOLOGY
Methodology selected in order to realize the research objective of the present study of survey by interview RESEARCH DESIGN: The study conducted is exploratory in nature. It involves a survey of Corporate agents for understanding their marketing practices and the factors influencing consumers attitude towards TATA-AIG products with reference ton TATA-AIG PRU LIFE INSURANCE CO. DATA SOURCE: Data and information for the study were collected from both. 1. PRIMART DATA 2. SECONDARY DATA

1. PRIMARY DATA: The data is collected freshly for a specific purpose for a specific project i.e. called Primary Data. Here, the primary data was collected through questionnaires was designed in such way that it covers all aspects.

2. SECONDARY DATA: Secondary data that were collected from the past records Already collected information is known as secondary data
1. Journals

2. Company Records
3. Internet 4. Newspapers 5. Catalogues, etc.

RESEARCH INSTRUMENT: The research instrument used was a structured closedend questionnaire backed by personal interview for data collection. SAMPLESIZE: The study is conducted using basing on the samples taken as 50 corporate agents working in TATA-AIG PRU LIFE, Secunderbad.

Company Introduction
About Tata AIG Life Insurance Company Ltd.
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Groups pre-eminent leadership position in India and AIGs global presence as the worlds leading international insurance and financial services organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 per cent. Tata AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.

American International Group, Inc. (AIG)

American International Group, Inc. (AIG), world leaders in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world.

Understanding the American International Group (A.I.G.)

American International Group, Inc. (AIG) (NYSE: AIG) is a major American insurance corporation based at the American International Building in New York City. The British 10

headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest public company in the world. It was on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008. It suffered from a liquidity crisis after its credit ratings were downgraded below AA levels, and the Federal Reserve Bank on September 16, 2008, created an $85 billion credit facility to enable the company to meet collateral and other cash obligations, at the cost to AIG of the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. In November 2008 the U.S. government revised its loan package to the company, increasing the total amount to $152 billion. AIG is attempting to sell assets to repay the loans. So far the U.S. government has given the company over $170 billion.

History of the AIG group

AIGs history dates back to 1919, when Cornelius Vander Starr established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the

11

Chinese. Right after the Chinese Civil War which put Mao Zedong and the Chinese Communist Party in power, AIG moved out of China and into New York City. After his business became successful in Asia, he expanded to other markets, including Latin America, Europe, and the Middle East. In 1962, Starr gave management of the companys less than successful U.S. holdings to Maurice R. Hank Greenberg, who shifted the companys U.S. focus from personal insurance to high-margin corporate coverage. Greenberg focused on selling insurance through independent brokers rather than agents to avoid selling insurance at prices which occasionally became too low (to cover the future payouts) given marketplace competition. A company with agents must pay their salaries even while selling little to no insurance. Instead, with brokers, AIG could price insurance properly even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. The company went public in 1969. In the mid-2000s AIG became embroiled in a series of fraud investigations conducted by the Securities and Exchange Commission, U.S. Justice Department, and New York State Attorney Generals Office. Greenberg was ousted amid an accounting scandal in February 2005. The New York Attorney Generals investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives. Greenberg was succeeded as CEO by Martin J. Sullivan, who had begun his career at AIG as a clerk in its London office in 1970. On June 15, 2008, under intense pressure due to financial losses and a falling stock price, Sullivan resigned from the CEO position. He was replaced by Robert B. Willemstad, who had served as Chairman of the Board of Directors of the Company since 2006. Willemstad was forced to step down and was replaced by Edward M. Liddy on September 17, 2008.

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H is to r y
A s ia L if e In s u r a n c e C o m p a n y is fo rm e d
A A U open s A m e r ic a n In te r n a tio n a l U n d e r w r ite r s

1919
C .V . S ta r r fo u n d s A m e r ic a n A s ia tic U n d e r w r ite r s

1921

1926

1939
H e a d q u a r te r s m o v e d to N e w Y o r k

13

H is to r y
A IU e n te r s Ja p a n a n d G e r m a n y a f te r W W II F o r e ig n L if e E x p a n s io n

A c q u is itio n s . B a s ic s tr u c tu r e in p la c e fo r D BG

A IG g o e s p u b lic

1 9 4 0 s 1 9 5 0 s 1 9 6 0 s
A IU s p re se n c e in c lu d e s o v e r 7 5 o f f ic e s w o r ld w id e

1967

1969

A IG e s ta b lis h e d a s a h o l d in g c o m p a n y M .R . G r e e n b e r g b e c o m e s P r e s id e n t an d C EO

14

H is to r y
E x p a n s io n in C h in a , L a tin A m e r ic a , Is r a e l, R u s s ia , U z b e k is ta n , F in a n c ia l a n d E a s te r n Se r v ic e s E u ro p e b e g in s e x p a n s io n

1984

1 9 9 0 s

1990

1992

A IG lis ts its s h a re s o n th e N e w Y o rk S to c k Ex ch an g e

A m e r ic a n In te rn a tio n a l A s s u ra n c e C o m p a n y , L td . b e c o m e s th e f ir s t f o re ig n in s u ra n c e c o m p a n y to r e c e iv e a n o p e r a t in g lic e n s e f r o m th e C h in e s e g o ve rn m e n t

15

H is to r y

A c q u is it io n o f S u n A m e r ic a In c .

1998

1999

2001
A c q u i s it i o n of A m e ric a n G en eral C o r p o r a t io n

2005
M a r t in J . S u ll iv a n beco m es P r e s id e n t an d C EO

R e o p e n in g o f T h e Bu n d B u il d in g

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AIG in India
Tata AIG Life Tata AIG General AIG System Solutions AIG Global Inv Group
AIG Consumer Finance Group

Life Insurance

General Insurance

IT Solutions Main/ Dev

Pvt Equity Real Estate Asset Mgt

Consumer Finance

Lives covered : 2.33 Million (including Group life) Total premium income was USD 246 Million (Dec05 Nov 06) 28 life insurance product offerings, with over 250 product combinations Channel Partners : HSBC, Citigroup, DBS, UBI, PNB Principal, and many more Operations in 94 locations (in 60 cities) across India Sales force of approx 34,000 advisors (Nov06)

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Premium Income (till Nov 2006) was USD 171 Million (approx 80 cr) (same period in 2005 was USD 128 Million approx 58cr). Network of 40 sales offices in 32 cities across India First company to have a Claims registration service through SMSes Channel partners HSBC, Citigroup, Kotak Mahindra, Bajaj caps, Shriram etc First company to have Mobile Claims van service. Sales force of over 4000 agents.

AIG Systems Solutions (AIGSS) is the member company of AIG providing IT/ Software solutions and services to AIG Companies worldwide Captive Offshore Development Center (ODC) for AIG having 600+ professionals Business Domains: Insurance (Life & General), Financial Services and Retirement Solutions Technology: E-Business, ERP, BPM, HRIS, Mainframe & Client Server technologies Revenues of USD 20 million for the year 2006 (approx 90 cr) Corporate office: Chennai;

Development Centre/Branches: Chennai, Kolkata & USA Sources, executes and monitors direct investment for AIG in the following regions China, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand Cumulative investments more than US$ 500 mn (approx Rs. 225 cr) in India in over 20 companies Ranked among the top 10 largest fund manager globally by the worldwide institutional assets under management 30 dedicated direct investment professional across the regions

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 AIG Global Real Estate is a full service real estate organization Focus on all property types through a strategic network Financial Strength - Current portfolio includes real estate assets with an estimated valuation of US $40.0 billion. India Strategy - Team of Professionals in place Focus areas include Hotel , Retail, Township, SEZ, Office space .

Asset Management business in India is 100% owned by AIG Capital Investment of USD 50 Mn Business in the process of being launched. Sr. Mgt team on board

About Tata AIG Life Insurance

Tata AIG Tata

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Groups pre-eminent leadership position in India and AIGs global presence as one of the worlds leading international insurance and financial services organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 per cent. Tata AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.

THE TATA GROUP

19

Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are USD 62.5 billion (around Rs. 251,543 crores), of which 61% was from business outside India. The Groups Net Profit for 2007-08 is USD 5.4 billion (around Rs. 21,578 crores). The Group employs around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the Tata Group currently encompass seven business sectors Communications and Information Technology, Engineering, Materials, Services, Energy, Consumer Products and Chemicals. The Group's 28 publicly listed enterprises have a combined market capitalization of around $60 billion, among the highest among Indian business houses, and a shareholder base of 2.9 million. The major companies in the Group include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels, Tata Teleservices and Tata Communications.

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T ata G roup he Fam ily T ree T

Jam s etj i T ata Fo u n d er o f In d ia's lar g es t a n d in ter n atio n ally b es t k n o w n g ro u p o f c o m p an ies , Beg a n w ith a tex tile m ill in c en tral In d ia in th e 1 8 7 0 s .

Sir D o r ab ji T ata Sir D o r ab ji T ata T ru s t (1 9 3 2 )

Sir R atan T ata

Jeh an g ir R ata n j i D ad ab h o y T ata (1 9 0 4 1 9 9 3 ) Pio n eered c ivil aviatio n in th e s u b c o n tin en t in 1 9 3 2 F u n d in g D r H o mab h a Bh i R atan N . T ata G ro u p C h air m an

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A STUDYOF MARKETING

What is marketing?
The word market is often misused and therefore misunderstood. It is used instead of the word selling is done in a more grand or better way. A market is a place where are bought and sold, arena for exchange. In its broadest sense, marketing should mean the study of market. Marketing is a compressive team it includes a group of business activities in to create and promote consumer demand and to direct the flow of goods services from the original producer to the final consumer in the process of distribution. American business activity that direct the flow of goods and services from the original producer to the final consumer in the process of distribution.

Philip Kotler defines marketing as the Human activity directed at satisfying needs and wants through exchange process. From the above definitions, it is obvious that traditional description of marketing was mainly concerned with the physical movement of goods, while the modern concept of marketing is consumer oriented. It makes customer the focus of all business activities. Thus one can say that marketing both begins and ends with the customer. The Marketing Channels of the company however consists of all those measures undertaken by the company to create a demand for its products and do not directly contribute to sales but are meant to assist the Sales channels.

22

The Marketing Channels of the company consists of: Advertising The Company to boost sales and its image in the eyes of its customers sends out communication signals to the public at large through various media like the newspapers, television and so on. Sales Promotions The company in addition to its advertising campaigns conducts some special events or activities to simulate demands such as setting up kiosks and conducting road shows etc. The Sales Process The two widely followed methods of selling Insurance are The cold call approach In the cold call approach the Insurance Care Consultant does not know the prospect personally but has a database or leads of the various prospects and thus his main aim is to seek an appointment over the phone and then to do a fact finding on the field as well as make the sales presentation and follow up as the case may demand. The drawbacks however are fear: getting past assistants, secretaries. And other gatekeepers: finding the right contact: and finding a way to make a pitch quickly that will move the sales process forward.

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The Reference marketing approach

1. In the case of reference marketing the Insurance Care Consultant approaches his existing contacts of friends and acquaintances and does not follow any specific methodology. 2. Here the air lies in developing a vast network of friends and acquaintances by various means in order to prospect a larger size of the popular to which he knows personally and is no longer a stranger to. 3. The main drawback of this process however is that the marketer may soon run out of references as he would have finished approaching all his close circles of influence.

Closing the Sale

Although one should never be shy about asking for the business. Prospects will probably give you some signals when they are ready to become customers! Familiarize yourself with the following readiness signals: 1. Asking about availability such as, How soon can someone be here? 2. Asking specific questions about rates, prices or statements about affordability 3. Asking about features, options, quality, guarantees or warranties. 4. Asking positive questions about your business. 5. Asking for something to be repeated. 6. Making statements about problems with previous vendors: they might be seeking reassurance from you that wont pose the same problems. 7. Asking about follow-up service or other products you carry. 8. Requesting a sample or asking you to repeat a demonstration for them or for others in their company or family. 9. Asking about other satisfied customers. You should have a list of satisfied customers ready to give to prospects who ask. (Make sure youve already contacted your customers and gained their approval for providing their names!)

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Follow-Up and Service after the Sale

After the sale follow-up after the sake is just as important as making the sale. Thats when your relationship with a customer really takes hold. It helps to build long term relationships with the customer and helps in retaining him and referring the products to his peers.

Market segmentation
Market segmentation can be defined as the process of dividing the markets into distinct subsets of customers with common needs or characteristic and selecting each target segment with a distinct marketing mix.

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INSURANCEINDUSTRY
The Insurance Industry
Many may not be aware that the life insurance industry of India is as old as it is in any other part of the world. The first Indian life insurance company was the Oriental Life Insurance Company, which was started in India in 1818 at Kolkata1. A number of players (over 250 in life and about 100 in non-life) mainly with regional focus flourished all across the country. However, the Government of India, concerned by the unethical standards adopted by some players against the consumers, nationalized the industry in two phases in 1956 (life) and in 1972 (non-life). The insurance business of the country was then brought under two public sector companies, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). In line with the economic reforms that were ushered in India in early nineties, the Government set up a Committee on Reforms (popularly called the Malhotra Committee) in April 1993 to suggest reforms in the insurance sector. The Committee recommended throwing open the sector to private players to usher in competition and bring more choice to the consumer. The objective was to improve the penetration of insurance as a percentage of GDP, which remains low in India even compared to some developing countries in Asia. Reforms were initiated with the passage of Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority, which has put in place regulations in line with global norms. So far in the private sector, 12 life insurance companies and 9 general insurance companies have Been Registered.

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INSURANCE MARKET IN INDIA By any yardstick, India, with about 200 million middle class households, presents 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. Table 1 reflects the low percentage and per capita penetration of insurance in India compared to other developed and developing countries. With the per capita income in India expected to grow at over 6% for the next 10 years and with improvement in awareness levels, the demand for insurance is expected to grow at an attractive rate in India. An independent consulting company, The Monitor Group has estimated that the life insurance market will grow from Rs.218 billion in 1998 to Rs.1003 billion by 2008 (a compounded annual growth of 16.5%).

WINDS OF CHANGE Reforms have marked the entry of many of the global insurance majors into the Indian market in the form of joint ventures with Indian companies. Some of the key names are AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life Canada and Old Mutual. The entry of new players has rejuvenated the erstwhile monopoly player LIC, which has responded to the competition in an admirable fashion by launching new products and improving service standards. The following are the key winds of change brought about by privatization.

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Market Expansion:
There has been an overall expansion in the market. This has been possible due to improved awareness levels thanks to the large number of advertising campaigns launched by all the players. The scope for expansion is still unlimited as virtually all the players are concentrating on large cities and towns - except by LIC to an extent there was no significant attempt to tap the rural markets.

New Product Offerings:

There has been a plethora of new and innovative products offered by the new players, mainly from the stable of their international partners. Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional money-back policies, which is not considered very appropriate for long-term protection and savings. However, there are still some key new products yet to be introduced - e.g. health products.

Customer Service:
Not unexpectedly, this was one area that witnessed the most significant change with the entry of new players. There is an attempt to bring in international best practices in service and operational efficiency through use of latest technologies. Advice and need based selling is emerging through much better trained sales force and advisors. There is improvement in response and turnaround times in specific areas such as delivery of first policy receipt, policy document, premium notice, final maturity payment, settlement of claims etc.However, there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels.

Channels of Distribution:
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Till two years back, the only mode of distribution of life insurance products was through Agents. While agents continue to be the predominant distribution channel, today a number of innovative alternative channels are being offered to consumers. Some of them are banc assurance, brokers, the internet and direct marketing. Though it is too early to predict, the wide spread of bank branch network in India could lead to banc assurance emerging as a significant distribution mechanism. Table 2 below gives a snapshot of the performance for 2003-04 (up to October) of the 13 life insurance payers in India based on the first year premium

Knowledge of Life Insurance products What is life insurance?

A Life insurance policy is a contract between you (the policy owner-insured) and an insurance company (the insurer). Under the terms of a life insurance contract, the insurer promises to pay a certain amount of money (death benefit) to someone you choose (a beneficiary) when you die, in exchange for your premium payments.

Do you need life insurance?

The need for life insurance is simple; you should consider life insurance if anyone depends on your income. Essentially, you transfer the risk (loss of your income) to the insurer by paying a fee, or premium, to the insurer. The insurer, with a large capital base and expertise in risk selection and management, is better able to accept this risk than any single individual would be.

This risk transfer may be helpful in both personal and business situations. Personal needs:
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Dependent's Support:
The major reason people buy life insurance is to replace income that would be lost because

of the death of an income earner. If you support or help support a family, the loss of income that would result from your death could mean that your surviving dependents may face financial difficulties. Household expenses continue, utility bills and school fees must be paid, and food and clothing must be purchased. Life insurance provides you with a sense of security in the knowledge that the life insurance money will be available to help support family members in case of your death.

Education Costs:
One of your primary objectives may be to send your children to a university or college.

Due to an untimely death, the tuition may become beyond your family's reach. Life insurance may be used to provide for the tuition expense.

Burial expenses and estate planning:

Life insurance may be used to pay funeral or burial expenses. In addition, it may be used to

pay inheritance taxes.

Investment Income:
Life insurance policies that accumulate savings can also be used as vehicles for personal

savings and investment. Over a period of time, the accumulated savings in a permanent life insurance policy can grow to a substantial sum and, while growing, will still provide the insured with life insurance coverage.

Charity:
You can purchase life insurance in order to donate the proceeds to a charitable

organization, such as a church or an educational institution.

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Business needs:

A business continuation insurance plan:

When the owner or a key person (any person whose death would cause the business a

significant financial loss) dies, a business continuation life insurance plan may be used to provide the necessary fund for the business' continued operation.

Buy-Sell Agreement:
If your business partner dies and you don't have enough money to buy your partner's financial

interest in the company, life insurance may be arranged to cover this cost.

Life insurance as Employee Benefits:

Businesses often use life insurance to provide benefits for their employees. Employers pay for

all or part of these employee benefits as part of the total package under which they compensate their employees.

Which insurance do you need?

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Although you may hear about many names for different types of life insurance policies, the majority of policies contain benefits derived from one or more of three basic types. These types are briefly outlined in very general terms below.

Term Life Insurance:

Term insurance is issued for a specific period, or term. This term usually ranges from 1 to 30 years. You may choose the length of the term that best suits you. Term insurance is considered an affordable insurance choice. If you are young with a family and need a large amount of protection without paying high premiums, this type of life insurance may be of interest to you. Under a Term policy, in case of death during the term of the policy, your beneficiary receives the cash payment equal to the insurance amount, or death benefit. The death benefit amount is chosen when you buy the policy. Term insurance protection ends when the period or term is over, and only pays out in case of death. For this reason this product type offers higher protection at a lower cost. It is a pure risk transfer product. Term insurance can be divided into three main types: level term, increasing term, and decreasing term. Level term means that the death benefit remains the same throughout the term of the policy. Increasing term means the death benefit gets larger throughout the term of the policy. Decreasing term means the death benefit gets smaller.

Endowment Life Insurance:

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Endowment life insurance generally guarantees that a sum of money will be available to you or your beneficiaries, whether you live until the policy ends (or matures,) or in case of an untimely death. Endowment insurance usually provides a guaranteed death benefit and has a savings component called the cash value. Generally, if you buy an endowment policy and keep it until maturity, it will provide a lump-sum cash payout equal to the insurance amount, or death benefit. In case of death before maturity, the death benefit would be paid to your beneficiary. Endowment insurance can be useful for people who know that they will have to incur a specific expense in the future like a wedding or college tuition. They know that regardless of what the future may hold, the expense will have to be paid. Endowment insurance allows them to be certain that the money will be there.

Money Back Policy:

Unlike ordinary endowment insurance plans, where the survival benefits are payable only at the end of the endowment period, money-back policies provide for periodic payments of partial survival benefits during the term of the policy, as long as the policyholder is alive. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises the full sum assured, without deduction of any of the survival benefit amounts, which may have already been paid as money-back components. Similarly, the bonus is also calculated on the full sum assured.

Children's Insurance Policies:

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Children's insurance policies include those through which parents or legal guardians can provide for life insurance for their child from birth. The risk cover commences from the child attaining the age of 12 / 17 / 18 / 21 (known as the Date of Risk), and will vest itself on the child upon his or her attaining majority on completion of age 21, if the case demands. Until the child attains majority, the parents are the owners of the policy and have to pay the premium periodically. It is important that these policies are considered only after the insurance portfolios of the parents have been completed. The family's insurance budget should primarily buy as much life insurance as possible on the lives of the breadwinner and should not be frittered away on the children's lives as their insurance is useless in the event of any premature death of the breadwinner. In fact, those lives should be insured that have maximum economic benefits. Quite often, policies lapse if and when the premium-paying breadwinner of the family dies before the vesting age. After all, the child may not be in a position to continue paying the premiums.

Pension Plans or Annuities:

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An annuity is an investment that you make, either in a single lump sum or through installments paid over a certain number of years, in return for which you receive a specific sum every year, every half-year or every month, either for life or for a fixed number of years. After the death of the annuitant or after the fixed annuity period expires for annuity payments, the invested annuity fund is refunded, perhaps along with a small addition, calculated at that time. Annuities differ from all the other forms of life insurance discussed so far in one fundamental way - an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period. Typically, annuities are bought to generate income during one's retired life, which is why they are also called pension plans. Annuity premiums and payments are fixed with reference to the duration of human life. Annuities are an investment, which can offer an income you cannot outlive and provide a solution to one of the biggest financial insecurities of old age; namely, of outliving one's income.

Special plans:
Special plans are insurance policy plans available from the national insurance providers to serve the needs of citizens who cannot be commonly classified or segregated. These special plans are designed to satisfy needs ranging from debt-clearance in the event of the death of the insured to financial aid in the event of a medical mishap. Special plans also provide financial assistance for handicapped dependants as well as emergency surgery required if and when a medical condition arises.

Whole Life Insurance:

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Whole life insurance has many of the same features as Endowment insurance, but it is designed to remain in force during the insured's entire lifetime. Like Endowment insurance, it provides a guaranteed death benefit, and has a savings component called the cash value. As you pay your premiums, a portion of each payment is set aside to create the cash value. The insurance company typically invests the cash value, which continues to grow as long as the policy is in force.

Some of the advantages of a policy's cash value are that:

You can cancel or surrender the policy in total or in part and receive the cash value; however, since this is a long-term policy, in the early years the cash value may be small or even equal to zero.

If you find that you need to skip a premium payment, you can use the cash value to continue your current insurance protection for some time. In most cases, you may borrow from the insurance company, using the cash value in your life insurance as collateral.

Other types of whole life insurance: Universal Life Insurance:

Universal life insurance has all the features of Whole life insurance. In addition to those features, it offers flexibility in premium payment and face amount, and it provides current interest rates. Unlike whole life and term, Universal life allows you, after payment of your initial premium, to pay premiums at any time, in virtually any amount, subject to certain minimums and maximums. You also can reduce or increase the death benefit more easily than under traditional whole life policy.

Variable Universal Life Insurance:

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Variable universal life insurance has all the features of Universal life insurance coverage, but, instead of earning an interest rate, its cash value is linked to non-guaranteed equity investment funds, bond investment funds, or similar investments. Your premiums will be invested in the various investment options that you have chosen, and you assume the investment risks. The amount of the policy benefit is dependent on the performance of your investments. A number of supplementary benefits can also be added to the various forms of life insurance policies. These additional benefits are usually provided by adding riders to the life insurance policy. The most common supplementary benefits include:

Waiver of Premium for Disability Benefits:

The insurer waives its right to collect premiums that become due while the insured is totally disabled.

Disability Income Benefits:

The insurer provides a monthly income benefit to the policy owner insured if he becomes totally disabled.

Critical Illness Benefits:

The insurer agrees to pay a portion of the policy's face amount to a policy owner insured who suffers from one of a number of specific, critical illnesses.

Advertising industry is a rapidly growing industry and determines to a considerable

extent the GDP or the gross domestic product of any country. The advertising industry besides 37

functioning as an intermediate between the manufacturers and the customers plays an important role in the economy of the country. This industry necessitates investment for funding different resources. One cannot measure the degree of development by interpretation of inputs in the economy which yields some production. In the event when consumption levels far exceed than what is reckoned, this is not a means of triggering or bringing about transformation in the culture, society or development in human resources or economy. What the time demands is optimum and efficient execution of advertising projects by involving appropriate technology along scientific lines. As per report by ZenithOptiMedia, ..expect advertising expenditure in India to increase from 0.50% of the gross domestic product (GDP) to 0.53% over the next three years, Worldwide, the ad industry is expected to grow 6.7% to reach $61 bn and Internet advertising is expected to surpass magazine advertising; and the upswing will be triggered by quadrennial events like Olympics, US elections and Euro 2008. As far as Indian market is concerned:

Internet advertising contributes only 1.8 % of the countrys total advertising spend. Internet medium is set to witness 150 per cent growth in 2008.

For every hundred rupees spent by advertisers, Rs 91 is spent on television and the print media while the outdoor media accounts for Rs 5. The rest is divided between cinema, radio and the Internet. (the Indian entertainment industry, too is expected to grow by CAGR of 18% to reach Rs. 1 trillion numbers by 2011). Though these numbers may sound great (and most of the times theoretical), what is really important and worth noticing is the rise of ad networks by newspapers/magazines worldwide (after all they are the ones who have a strong relationship with local advertisers as well as readers) which are essentially competing with ad networks from Google/Yahoo/MSN and online companies. TABLE SHOWING THE LITERACY LEVEL OF THE RESPONDENTS

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RATING OF PARAMETERS Under Graduation Graduation Post Graduation

NUMBER OF RESPONDENTS 13 29 8

% 26 58 16

90 80 70 60 50 40 30 20 10 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East West North

INTERPRETATION:From the above table it is clear that out 50 respondents 26% are under graduates, 58% are graduates and 16% are postgraduates.

TABLE SHOWING THE RESPONDENTS QUANTUM OF MONTHLY INCOME

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RATING OF PARAMETERS 5000 10000 10000 15000 > 15000

NUMBER OF RESPONDENTS 11 24 15

% 22 48 30

50 40 30 20 10 0 NUMBER OF RESPONDENTS % 5000 10000 10000 15000 > 15000

INTERPRETATION:From the above table it is understood that out of 50 respondents 22% of them earn between 5000 10000 income monthly, 48% of them earn 10000 15000 income monthly, and 30% of them earn more than 15000.

TABLE SHOWING THE RESPONDENTS AWARENESS METHOD TOWARDS THE BUSINESS

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RATING OF PARAMETERS News Papers Internet Corporate advisors

NUMBER OF RESPONDENTS 23 16 11

% 46 32 22

50 40 30 20 10 0 NUMBER OF RESPONDENTS % News Papers Internet Corporate advisors

INTERPRETATION:It is evident from above table out of 50 respondents 46% are came to know about the business through news papers, 32% of them came to know through Internet, and 22% of them through corporate advisors TABLE SHOWING THE REASONS BY WHICH RESPONDENTS ENTERED IN TO THIS FIELD :

RATING OF PARAMETERS

NUMBER OF RESPONDENTS

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Self Employment Additional Income

34 16

68 32

70 60 50 40 30 20 10 0 NUMBER OF RESPONDENTS % Self Employment Additional Income

INTERPRETATION:From the above table it is inferred that out of 50 Respondents 68% respondents have entered into this field for self employment, and 32% are entered for additional income.

TABLE SHOWING THE SOURCES OF RESPONDENTS FOR REACHING CUSTOMERS

RATING OF PARAMETERS

NUMBER OF RESPONDENTS

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Friends Cold Calling Others

16 24 10

32 48 20

50 40 30 20 10 0 NUMBER OF RESPONDENTS % Friends Cold Calling Others

INTERPRETATION:From the above table it is clear that out of 50 respondents 32% respondents reached the customers through their friends, 48% of them reached through cold calling, and 20% of them reached through others.

TABLE SHOWING THE TARGETED CUSTOMERS OF RESPONDENTS

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RATING OF PARAMETERS High class Upper Middle Middle

NUMBER OF RESPONDENTS 9 29 12

% 18 58 24

60 50 40 30 20 10 0 NUMBER OF RESPONDENTS % High class Upper Middle Middle

INTERPRETATION:From the above table it is inferred that out of 50 respondents the targeted customers of 18% respondents are High class, targeted customers of 58% respondents are Upper middle class and 24% are middleclass.

TABLE SHOWING WHETHER THE SALES OF ICICI PRODUCTS ARE AFFECTED BY PRICE

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RATING OF PARAMETERS Yes No

NUMBER OF RESPONDENTS 32 18

% 64 36

90 80 70 60 50 40 30 20 10 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

East West North

INTERPRETATION: From the above table it is clear that 64% of TATA-AIG products sales are affected by its price.

TABLE SHOWING THE FACTORS INFLUENCING THE CUSTOMERS TO TAKE POLICY 45

RATING OF PARAMETERS Risk Coverage Tax Benefit Big Returns

NUMBER OF RESPONDENTS 12 24 14

% 24 48 28

90 80 70 60 50 40 30 20 10 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East West North

INTERPRETATION From the above table it is found that out of 50 respondents 24% say that customers take policy for Risk Coverage, 48% of them for Tax Benefit, and 28% of them take for Big returns

TABLE SHOWING THE WAYS OF CONVINCING THE CUSTOMERS TO TAKE POLICY

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RATING OF PARAMETERS Demonstration Comparison Benefits

NUMBER OF RESPONDENTS 13 24 13

% 26 48 26

100 80 60 40 20 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East West North

INTERPRETATION: From the above table it is clear that out of 50 respondents 26% of respondents are convinced with effective demonstration, and 48% of respondents are convinced with comparison, and 26% of respondents are convinced with the explanation about the benefits our products offers

FINDINGS

The company is mostly emphasizing on upper middle customers (58%).

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Most of the customers are takes the policy for tax benefits (48%) and risk coverage (24%). Corporate agents reached 48% of customers through cold calling. Corporate agents convince most of the customers by comparison of our products with others (48%).

SUGGESTIONS

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The company has to give priority for service, which is most important element in service industry.

Along with the product, service has to give sample opportunity to differentiate along the competitors as styling and services.

In order to overcome the competitive market and to attract customers the company can adopt suitable sales promotional techniques.

A continuous research study should be carried out to have a perfect knowledge of its customers needs, wants and demands, which are constantly changing.

Enhancing the value added features in the products. The premiums of policies are very high so that middle level people should not payable.

CONCLUSION

Most of the people interested to take the policy for tax benefit and risk coverage.

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84% market share has been covered by LIC. Most of the peoples are joined insurance sector by corporate agents Most of the customers are convinced by comparison of our products with others (48%).

58% of people are insured in unit linked insurance plans. Both commitments and lack of trust are leading to face a huge problem for corporate agents to market the TATA-AIG products.

QUESTIONNAIRE ON A STUDY ON MARKETING OF LIFE INSURANCE PRODUCTS OF TATA AIG

50

TATA AIG LIFE INSURANCES COMPANY LTD. HYDERABAD

General information I) II) III) IV) V) Name : Age : Educational Qualifications : Designation : Experience :

1. What is your Educational Qualifications?

a) Under Graduation b) Graduation c) Post Graduation

2. What is yours monthly income? a) 5000-10000 b) 10000-15000 c) >15000

3. How do you come to know about TATA AIG? a) News papers b) Internet

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c) Corporate advisors

4. Why do you choose insurance field? a) Self employment b) Additional income

5. What are the sources for reaching customers? a) friends b) cold calling c) others

6. Who are your target customers? a) High class b) Upper middle c) Middle

7. Whether the sales of TATA AIG sale products are affected by price?

a) Yes b) No

8. What are the factors influences to take policy? a) Risk coverage b) Tax benefit

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c) Big returns

9. How do you get convinces to take policy? a) Demonstration b) Comparison c) Benefits

10.)

From how many years you are been insured? (a) 0-1 years (b) 2-5 years (c) 5-10 years (d) 10 years and above

11) Would you like to have insurance updates on phone or over mail? (a) Yes (b) No (c) If yes specify: ____________ 12) Do you agree that services offered online are trust worthy & are secure? (a) Strongly agree (b) Agree (c) Undecided (d) Disagree (e) Strongly disagree 13) The Company serving their customers needing many services through Media? (a) Strongly agree (b) Agree

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(c) Undecided (d) Disagree (e) Strongly disagree

14) What made you to take a decision on taking policy from TATA AIG? (a) Full information over the mail (b) Media like TV, News Papers etc., (c) Others Specify: _________

BIBILOGRAPHY

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1) www.tata-aig life.com 2) www.irdaindia .com 3). Insurance Journals INSURANCE PLUS 4) Marketing Management - Philip Kotler 5) Marketing Research Beri G.C 6) Services Marketing Zeithmal Valorie

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