WHAT IS BUYER’S POTENTIAL
STUDYING BUYER’S BEHAVIOUR, BASIC TO MARKETING:-
What motivates the buyer? What induces him to buy? Why does he buy a specific brand? Why does he shift from one brand to another brand? How does he react to a new product introduced in the market, or a piece of information addressed to him? What are the stages he travels through, before he makes the decision to buy? These are question of perennial interest to the marketing man. This is because
It is around these issues that his marketing strategies & strategies on the product & promotion revolve. In his strategies & plans, he keeps making assumption regarding how they would respond to his marketing programmes. Knowledge of buyer & his buying motives & buying habits is thus of fundamental importance to marketing man.
Characteristics of a Buyer
(A) Buyer, a complex entity
The buyer is a riddle; he is a highly complex entity. His needs & desire are innumerable, and they vary from security needs to aesthetic needs. These needs & desires are often at different stages of emergence & actualisation.some are latent, some manifest, while some others are highly dominant. And they have different priorities in his scheme of things. The buyer has his own ideas &plans about realizing these needs & desires. The first task of the marketer is to get close to the buyer & understand his needs-structure & priorities.
(b) Selective perception
The buyer is exposed to a world of information – about new products , new service, new uses of existing product , new ideas, &new style, his attitude towards his literal bombardment of information ,however is peculiar. He may ignore certain piece of information, where as he may actively seek out some other information. He may read certain message, but he may not digest them, he may merely over hear some message about some product & it may register in his mind. In other words, he filters information in rather unconscious manner. His perception is selective in the sense that he perceives & retains only what he would normally like to. This selective perception is actually his defence mechanism.
(c) Buyer not bound by set rules in taking buying decision
When the buyer takes a buying decision, no rigid rule binds him, sometimes, the decision in taken on the spot. That does not necessarily mean that it is an irrational decision. Sometimes, he may decide after a long search after evaluating the various alternatives available & after reassuring himself with opinion of those who have already purchased the product. Still, he may subsequently feel that his purchase impulsive or even foolish! He may go to a shop after having taken the decision to buy a product; but he may not buy. For not apparent reason. He may postpone the purchase even drop the very idea of purchasing the product.
The buyer is also influenced by his social environment, which consist of his family, his society, his neighbour, his friend & his job. Every component of his social environment leave some imprint on him influences him in his day to day life. It influences his buying behaviour too.
It would be amply clear from the above discussion that buyer behaviour is a complex subject. The buyer is not a passive being. Allowing himself to be manipulated easily by the marketing man.
He is dynamic & downright difficult.
Influence of other social sciences also dictates the buyer’s behaviour, the other area of knowledge which affect buying behaviour are
(A) Economics
(b) Psychology
(c) Sociology & anthropology
Thus, conclusively we can say that there is no unified, tested, & universally established theory of buying behaviour.The behaviour depends upon the buyer’s needs and such needs keep on changing. Moreover, in many cases, the buyer’s decision wait for the evaluation of the all the alternatives available to him. He cannot always pause to find out the cause-effect relationship on his decision. All that can be said is that he will normally take decision, which he believes will meet his needs.
And a marketer treads on difficult ground when he tries to uncover the complex set of needs of his customers- existing & prospective. But in spite of the difficulty, the job continues to be undertaken by marketers, researchers & behavioral scientist. That is why many theories & concept have been built about buying behavior, at the same time, the more we study the buyer, the more complex he appears. It is only natural that no’ theory ‘of buying behavior has received universal acceptance among marketers as a complete guide to the buyer’s decision-making process. And, the marketer’s job remains challenging .mainly because he has to predict the unpredictable, the buyer.
There are two categories of buyer’s –the individual buyer & the business buyer. While the individual buyer buys things for his own personal & family consumption. The business buyer is a commercial buyer who buys things for manufacturing other products, or for reselling, or for use in the running the enterprise.
CHAPTER-2
CON CEPTUAL FRAME WORK
INDUSTRY PROFILE
(LIFE INSURANCE)
WHAT IS INSURANCE
Insurance is a sharing device. The losses to assets resulting natural calamities (Like fire, flood, earthquakes, accidents etc.) are met out of common pool contributed by large number of persons who are exposed to similar risks.
· Insurance is the method of spreading and transfer of risks
· The fortunate many who are exposed same or similar risks share loss for the unfortunate few.
· Assets (created in expectation of future need /benefits) have a value.
· Loss of assets deprives the owner of the expected benefits.
· Insurance in this context is mechanism that to reduce the adverse consequences due to loss of assets.
Classification of insurance:
Insurance business can be divided into basic categories.
1. Life insurance
2. non-life insurance
Life insurance is concerned with making provision for a specific event happing to the individual non life insurance is commonly concerned with the provision for a specific. Etc.
Event, which affect a property such as fire, flood, theft
What is life insurance?
Life insurance is an agreement between the person insured and the insurer. Under the term of a life insurance. Contract the insurer promises to pay a certain sum on the happing of the event insured against to a beneficiary in exchange for premium payments.
Usually, the insurance contract provides for the payment of and amount on the date of maturity or at specified dates at periodic internals, or in the event of unfortunate death, if it occurs earlier. Life insurance is universally acknowledged as a tool to eliminate risk, replace uncertainty with certainty. And ensure timely aid for the civilized world’s partial solution to the financial problems caused by death.
Why life insurance is required:
Life insurance cannot be and should not be compared with any other form of investment. It provides a life long benefit, with returns when it is most required at right time.
Replacement of income
One prime reason for buying life insurance is to replace the income lost in the event of untimely death of the life insured. When this regular income stops, the proceeds from a life insurance policy can be used to support the family members.
Maintenance of lifestyle:
eventuality. In case of the death life insured, family members are often hard-pressed trying to arrange for funds those can maintain of living that they have grown. Accustomed to life insurance offers protection against such an unfortunate
Expenses due to pre-mature death:
Life insurance can play a crucial role to pay off any debt left behind by the person Insured. For example car loans, medical bill, mortgages, credit card payment, etc. are often left in case of sudden death. These obligations can be met with life insurance without any depletion in family assets.
Planning for important event life children’s marriage etc.
With the cost of living going up day by day prudent people would go for a life insurance as the most cost effective means to ensure that the important mile stone in their children’s lives are not hampered by the uncertainties of life.
Investment:
Life insurance can also be an investment instrument apart from ten benefits that are also allowable. By the government of India for investing to life insurance some life insurance policies offer returns on investment along with the cover for life. Life can help you with long-term financial goals.
Charity:
Life insurance is Great Avenue to help. A charitable cause, or people with philanthropic desire but short of means, life insurance provides the option to contribute much more than is possible by the life insured.
Benefits of life Insurance:
· superior to any other saving plan:-
Life insurance policies offer protection against the risk of death which is nit Available in any other contemporary saving plan. In the event of death of a Policy holder’s the insurance makes available the full sum assured to the Policies holders near and dear ones. In comparison any other saving plan would amount to the total saving accustomed till date. If the death occurs prematurely, such saving can be much lesser than the sum assured.
· Encourage thrift: - A saving deposits can easily be withdrawn. The payment of life insurance premiums however is considered sacrosanct payment of interest on mortgage.thus; a life insurance policy in fact brings about compulsory savings. and is viewed with the same seriousness as the payment of interest on mortgage. Thus, a life insurance policy in fact brings about compulsory savings.
· Easy settlement and protection against creditors: - A life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditor of the assured by effecting a valid assignment.
· Administering the legacy for beneficiaries: - Speculative or unwise expenses can quickly cause the squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installments and lump sum amounts.
· Ready marketability and suitability for quick borrowing: - A life insurance policy can after a certain time period (generally three years) most cost effective means to ensure that the important milestones in their children’s lives are not hampered by the uncertainties of life.
· Investment: - Life insurance also is an investment. Apart from the tax benefits that are also allowable by the government of India for investing in life insurance, some life insurance policies offer returns on investment along with the cover for life. This can help you with long-term financial goals.
· Critical illness benefit: - Many policies can also provide for cover against critical illness.
· Hospital cash benefit: - Many policies can also provide for covering the hospitalization expenses, along with cover for life.
· Tax benefit:- Under the Indian income tax act, tax relief under section 88 is available for premium paid and section 10,10D benefit are available for death/ maturity/surrender proceeds from a life insurance policy.
HISTORY OF INSURANCE
1) 1st Insurance Company started in 1818.
2) It was “oriental insurance company” a UK based company.
3) By 1868 there was 256 insurance companies had business in Indian market.
4) 2nd Indian Insurance Company: “Oriental Insurance” by Firozshah Mehta.
5) 1956,”Life Insurance Corporation of India” started operations from September 1st.
6) 1999, IRDA Act was passed by which Insurance sector was opened for Private Companies. According to this investment by companies is Rs. 100 crores and the total of investment is 75% (Indian) + 26 %( foreign) max.
Types of insurance - All policies are not the same. Some give coverage for your lifetime and others cover you for a specific number of years. Here is a snapshot of the types of policies and what they offer.
1. Term InsuranceTerm insurance covers you for a term of one or more years. It pays a death benefit only if the policy holder dies during the period the insurance is in force. Term insurance generally offers the cheapest form of life insurance. You can renew most term insurance policies for one or more terms even if your health condition has changed.
2. Whole Life Insurance Whole life insurance covers you for as long as you live if your premiums are paid. You generally pay the same premium amount throughout your lifetime.
Some whole life policies let you pay premiums for a shorter period such as 15, 20 or 25 years. Premiums for these policies are higher since the premium payments are made during a shorter period. There are options in the market to have a return of premium option in a whole life policy. That means after a certain age of paying premiums, the life insurance company will pay back the premium to the life assured but the coverage will continue.
3. Money Back Insurance The money back plan not only covers your life, it also assures you the return of a certain per cent of the sum assured as cash payment at regular intervals. It is a savings plan with the added advantage of life cover and regular cash inflow. This plan is ideal for planning special moments like a wedding, your child's education or purchase of an asset, etc. Money back plan have "participating" and "nonparticipating" versions in the market.
4. Endowment Assurance Endowment insurance is a level premium plan with a savings feature. At maturity, a lump sum is paid out equal to the sum assured (plus dividends in a par policy). If death occurs during the term of the policy then the total amount of insurance and any dividends (par policy) are paid out.
5. Universal LifeThis is a flexible life insurance policy and is also market sensitive. You decide on the several investment options on how your net premium are to be invested. While the money invested has the potential for significant growth, such funds are subject to market risks including the loss of the principal.
6. Unit Linked ProductMarket-linked plans or Unit-linked insurance plans (ULIP) are similar to traditional insurance policies with the exception that your premium amount is invested by the insurance company in the stock market.
Market-linked insurance plans (MLP) are the way to invest mutual funds and invest in a basket of securities, allowing you to choose between investment options predominantly in equity, debt or a mix of both (called balanced option).
The major advantage market-linked plans offer is that they leave the asset allocation decision in the hands of investors themselves.
You are in control of how you want to distribute your money among the broad class of instruments and when you want to do it or pull out. Any of the products mentioned above except term products could be unit-linked.
Riders
Riders are additional add-on benefits that you could opt to include in your policy over and above what the policy may provide. However, these additions come at an extra premium charge depending of the rider you opt for. These riders cannot be bought separately and independently. The extra premium, nature and characteristics of the riders are based on the base policy that is offered.
Some riders available in the market are:
1. Accident Death Benefit: Provides a additional amount in case death occurs as a result of an accident.
2. Term Rider: It allows the payment of an additional amount should death of the insured happens.
3. Waiver of Premium: In case of total and permanent disability of life insured due to accident or any other means this rider allows premiums on base policy or riders to be waived.
4. Critical Illness: It provides payment of an additional amount on the diagnosis of some critical illness
Major insurance players existing in India with their respective market share.
COMPANY
MARKET SHARE
1. Life Insurance Corporation of India (LIC)
74.18%
.2. ICICI Prudential Life Insurance
6.97%
3. Bajaj Allianz Life Insurance
5.66%
4. SBI Life Insurance
3.40%
.5. HDFC Standard Life
2.15%
6. Reliance Life Insurance.
1.23%
7. max new York life
1.22%
8. Birla Sun Life.
1.17%
9. Aviva Life Insurance.
0.96%
10. TATA AIG Life.
0.85%
11. Kotak Mahindra.
0.82%
.12 ING VYSYA Life.
0.62%
13. Met Life
0.46%
.14.Shri Ram Life.
0.24%
15. Sahara Life.
0.06%
16. Bharti Axa Life
0 .01%
COMPANY PROFILE (RELIANCE LIFE INSRANCE)
Reliance life insurance was started in 2003 by acquiring AMP SANMAR LIFE INSURANCE COM. Reliance life insurance Company limited is a part of reliance capital ltd. of the Reliance - ANIL DHIRUBHAI AMBANI group. Reliance capital is one of India’s leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services.
Reliance capital limited (RCL) is a non-banking financial company (NBFC) registered with the reserve bank of India under section 45-IA
Of the Reserve Bank of India act, 1934. .
Reliance capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services.
About NIS Sparta
NIS Sparta is Asia's largest Performance Enhancement Solutions Organization which facilitates achievement of ‘mission critical goals’ by impacting people and processes. A part of the Reliance Group, NIS Sparta has provided training and consulting solutions in over 550 organizations to over 10,00,000 professionals across 10 countries and in 18 languages.
NIS Sparta is a Reliance-Anil Dhirubhai Ambani Group Company and Asia’s largest training and learning solutions provider to organizations and individuals. We partner organizations in achieving their mission critical goals through enhanced effectiveness of their people and processes, using proven methodologies.NIS Sparta offers customized solutions for Top management, Middle management and Supervisory level; our training modules are based on Knowledge development, Behavior development, Skill development and Process design and development.
At NIS Sparta, we strongly believe that our people are our strength. Hence, we are committed to investing in our people. While technology, infrastructure and products can be duplicated, it is people who are the key differentiators in the growth of any organization. We have over 500 consultants from diverse educational backgrounds - Engineers, Post Graduates, Management Graduates, Sociologists, Psychologists, Economists, Teachers and Fellows of Insurance Institute of India.
NIS Sparta in the Insurance Sector
NIS Sparta has developed and executed various training modules for the private Life and Non-Life insurance companies.In addition to the programmes, NIS Sparta through its network of over 26 canters delivers Insurance Regulatory Development Authority, prescribed 100 hours training (classroom and online), which helps prospective insurance advisors attain a good understanding of the subject of insurance, thereby enabling them to service the needs of the customers effectively and clear the licensing examination.Over the last 6 years, NIS Sparta has trained over150,000 Insurance Advisors and Company employees.
Scope of Interventions in the Insurance Training sector
· Activation of Advisors
· Increasing Average Case Size
· Self-Paced Online Learning
· Persistency rate
· Product Positioning and Need Based Product Pitch
· Quality Recruitment
· Handling and dealing with Rejection
· Sales Funnel Management
· Creating and Managing an Agency
· Employee and Associate Induction
· Transitioning from Team Member to Team Leader
· Licensing Training
Learning Solutions focus:
Some of the modules developed and delivered by NIS Sparta are:
· Advisor Sales Training (Basic and Advanced)
· Product Training
· Business process and Underwriting training
· Advanced Selling skills
· Financial Planning
· Front Line Manager Induction training
· Coaching skills
· Experiential Training Programmes
· Middle and Senior Management Programmes
· Domain training ,Team Building
KEY EMPLOYEES OF RELANCE LIFE INSURANCE:-
· CEO: MR. P. NANDAGOPAL
· CFO: MR. RAJESH BAHL
· CMO: MR. ROHIT MULL
· COO: MR. K.V. SRINIVASAN
· VICE PRESIDENT: MR. K. SURESH BABU
· APPOINTED ACTUARY: MS.POURNIMA GUPTE
· CHIEF INVESTMENT OFFICER MR. R RANGARAJAN
· HEAD –HR: MS. MANEESHA THAKUR.
· CTO : MR. C. MOHAN
MAJOR PRODUCTS OFFERED BY RELIANCE LIFE INSURANCE
· RELIANCE MONEY GURANTEE PLAN
· RELIANCE ENDOWMENT
· RELIANCE SPECIAL ENDOWMENT PLAN
· RELIANCE CASH FLOW PLAN
· RELIANCE CHILD PLAN
· RELIANCE MARKET RETURN PLAN
· RELIANCE TERM PLAN
· RELIANCE AUTOMATIC INVESTMENT PLAN ( NEW PLAN LAUNCH ON 9TH MAY 2007)
PLANS AND RIDERS OF RELIANCE LIFE INSURANCE COMPANY
1. RELIANCE MONEY GURANTEE PLAN
Key benefits
· Basic Premium and top-up premium guarantee
· Option to move your earning to safer fund whenever you want.
· Readily available liquidity of funds
· Options for additional cover available through riders
Key features
· Capital guarantee is available on both the basic premium as well as on top up premium.
· A unit linked insurance plan
· First of its kind return shield option to move your earning to Safer fund.
· Choices of invest from 3 pre packaged investment fund option.
· Option to package with accidental Death & Disability and Insurance riders.
2. RELIANCE ENDOWMENT PLAN
It takes a lot for a dream to become a reality. And money is surely one of them. Reliance Endowment Plan gives you just the financial independence to realize your dreams in the future. It lets you decide how much you would like to set as your sum assured based on your current financial position and your expected future expenses.
Key Features
· On maturity receive Sum Assured plus bonuses.
· Wealth creation through bonus additions.
· More value for your money by way of High Sum Assured Rebate
· Increase your insurance protection by adding Term Cover.
· Choose to pay regular or single premium.
· Choose to add the benefit of two riders - Critical Illness Rider and Accidental Death Benefit & Total and Permanent Disablement Rider.
· Choose to avail of a Policy Loan after three full years’ of premium payment.
BenefitsMaturity Benefit: On maturity you get Sum Assured plus accumulated bonuses (if any) till that date.
Life Cover Benefit: In the unfortunate event of loss of life, your family will receive the Sum Assured plus accumulated bonuses (if any) till that date.
Rider Benefit: You also have the option to add three additional benefits to customize the Policy as per your needs for the regular premium plan
a. Term Life Insurance Benefit Rider
b. Accidental Death Benefit & Total and Permanent Disablement Rider
c. Critical Illness Rider
3. RELIANCE SPECIAL ENDOWMENT PLAN
Reliance Special Endowment Plan is key to all your financial needs. You get a desired lump sum after a specified period, however your life insurance protection continues for an extended period. If anything were to happen to you, your beneficiary will get another sum assured along with the bonuses. The policy comes with an added feature of a limited premium term, which is always 5 years less than the policy term.
Key Features
· Twin benefit of protection and savings.
· Sum Assured is paid on survival, at the end of the premium paying term Life Cover for full Sum Assured continues beyond premium paying term Extended Life Cover for 5 years after premium paying term.
· Wealth creation through bonus additions.
· More value for your money by way of High Sum Assured Rebate
· Choose to add the benefit of two riders – Critical Illness Rider and Accidental Death Benefit & Total and Permanent Disablement Riders.
· Choose to avail of a Policy Loan available after 3 full years’ of premium payment.
· Policy participates in profits even after premium paying term.
BenefitsSurvival Benefit: On survival at the end of the premium paying term you get the Sum Assured.
Maturity Benefit: On survival to maturity you get accumulated bonuses.
Life Cover Benefit: Your Beneficiary will get Sum Assured plus accumulated bonuses in case of your unfortunate death at any time during the Policy term. This life cover benefit continues even after the payout of Sum Assured after premium paying term.
Rider Benefit: You also have the option to add 2 additional benefits to customize the Policy as per your needs
a. Accidental Death Benefit & Total and Permanent Disablement Rider
b. Critical Illness Rider
4. RELIANCE CASH FLOW PLAN
While most insurance plans block your money for a certain period of time, Reliance Cash Flow Plan gives you the double benefit of life insurance along with easy liquidity through lump sum cash. It provides money periodically when you need it.
It lets you live life to the fullest today and at the same time, helps you stay protected for tomorrow by giving you the flexibility of receiving a specified percentage of the Sum Assured at specified intervals.
Key Feature
· Easy Liquidity - Get periodic cash flows at the end of the fourth year and thereafter at the end of every three years.
· Wealth creation through bonus additions.
· On maturity receive accumulated bonuses along with final lump sum payout.
· More value for your money by way of High Sum Assured Rebate
· Full Sum Assured plus bonuses in case of your unfortunate death. This is over and above the Survival Benefits already paid
· Option to add two riders – Critical Illness Rider and Accidental Death Benefit & Total and Permanent Disablement Riders.
BenefitsSurvival Benefit: Get a percentage of the Sum Assured on the fourth anniversary and on every third Policy Anniversary till maturity.
Maturity Benefit: On maturity you get the remaining percentage of the Sum Assured plus accumulated bonuses.
Life Cover Benefit: In the unfortunate event of loss of life, your Beneficiary will receive the full Sum Assured plus accumulated bonuses till that date.
Rider Benefit: You also have the option to add two additional benefits to customize the Policy as per your needs:
a. Accidental Death Benefit & Total and Permanent Disablement Rider.
b. Critical Illness Rider
5. RELIANCE CHILD PLAN
As a parent, it is only natural to dream of a smooth and blissful life for your child. This is exactly why you need to secure your child’s tomorrow, today. Reliance Child Plan helps you save systematically so that you can give your child the much-needed financial security in the future. Simply put, Reliance Child Plan gives you the freedom to enjoy every moment with your child today, without worrying about his/her tomorrow.
Key Features
· Risk protection for you during the term of the Policy.
· Accumulated bonus at the end of the Policy Term.
· 25% of Sum Assured payable every year as lump sum benefit during the last four Policy anniversaries.
· All future premiums are waived in the event of unfortunate loss of life.
· Guaranteed Fixed Benefits continue even after loss of life of the Policyholder.
· More value for your money by way of High Sum Assured Rebate
· Choose to add the benefit of two riders – Critical Illness Rider and Accidental Death Benefit & Accidental Death Benefit & Total and Permanent Disablement Rider.
· Policy participates in profit even after the loss of life of the Life Assured.
BenefitsLife Cover Benefit: In the unfortunate event of loss of life, your Beneficiary will receive the Sum Assured immediately and all future premiums will be waived.
Guaranteed Fixed Benefit: Get 25% of Sum Assured every year on the last four Policy Anniversaries irrespective of the survival of the Life Assured.
For example if you have taken a Policy for Rs 1 lakh for 20 years, then fixed benefits payable will be Rs 25,000 each at the end of 17th, 18th, 19th and 20th year.
Maturity Benefit: On maturity you get accumulated bonuses irrespective of the survival of the Life Assured.
Rider Benefit: You also have the option to add two additional benefits to customize the policy as per your needs.
a. Accidental Death Benefit & Total and Permanent Disablement Rider
b. Critical Illness Rider
6. RELIANCE MARKET RETURN PLAN
You have always aspired for the best in life. And we help you achieve just that. With Reliance Market Return plan you can have the twin advantage of insurance protection as well as reaping the benefits of investment growth. It is a flexible plan which works all through your life and meets the changing requirements like additional protection, liquidity through cash, option to invest in different asset class, steady golden years and many more.
Key Features – Reliance Market Return Plan:
· Twin benefit of market linked return and insurance protection
· A Unit Linked Plan, different form traditional Life Insurance products, with maximum maturity age of 80 years
· Option to create your own portfolio depending on your risk appetite
· Choose from 4 different investment funds
· Flexibility to switch between funds
· Option to pay regular as well as single premium & Top-ups
· Option to package with Accidental riders
· Flexibility to increase the Sum Assured
· Liquidity through partial withdrawals
BenefitsLife Cover Benefit: You can choose the basic Sum Assured within the minimum and maximum levels mentioned below
Minimum Sum Assured:
· Regular Premium: Annualized Premium for 5 years or for half the Policy term
· Single Premium: 125% of the single premium
Maximum Sum Assured: No Limit (Rs. 500,000 for age up to 12 years)
In case of unfortunate loss of life, your Beneficiary will get sum Assured or Unit Account Value whichever is higher.
Maturity Benefit: On survival, at maturity the value of your Unit Account will be paid out.
7. RELIANCE TERM PLAN
Life, as we know, is full of uncertainties. And to keep ahead of them, you need to plan ahead. Reliance Term Plan is a pure life insurance plan that offers you comprehensive and affordable coverage for a limited period of time to suit your needs.
Key Features
· Get higher insurance protection at economical rates
· Optional accidental & disability rider to enhance protection
· Economical way to protect your family against financial liabilities like loss of income and outstanding loans etc.
· Discount on premium rates for women
· Suitable for business owners who want to cover the life of their key employees
Benefits
Life Cover Benefit: In the unfortunate event of loss of life, your beneficiary will receive the Sum Assured.
Maturity Benefit: There is no Maturity Benefit payable under this Policy.
Rider Benefit: You also have the option to add Accidental Death Benefit and Total and Permanent Disablement Rider
8. AUTOMATIC INVESTMENT PLAN (NEW PLAN LAUNCH ON 9TH MAY 2007)
The Key benefits of Reliance Automatic Investment Plan are as follows:
· A smart plan which adapts to your changing risk profile with increasing age
· Option to lower the average cost of units through systematic transfer of your funds
· Flexibility to switch between funds and plans
· Options for additional Insurance cover available through rider
Key Features Reliance Automatic Investment Plan
· Two plan options to choose from Ready-made and Tailor-made
· Life Stage asset allocation to ensure automatic change in investment patterns, under the Ready-made Plan option
· Freedom to decide your own fund mix based on your risk profile under the Tailor-made Plan
· Regular, limited, single premium paying options
· Unmatched flexibility through our ‘Exchange Option’
· Liquidity in the form of partial withdrawal
· Option to avail of Accidental Death Benefit, Accidental Total, Premium Disability and Term Insurance riders
RIDERS
Riders are the additional benefits that you may buy and add to you policy. The additional of riders helps you to customize the RELIANCE LIFE INSURANCE solution to match your present and future needs.
1. Accidental Death and Dismemberment Rider.
2. Term Rider
3. Critical Illness Rider
1. Accidental Death and Dismemberment Rider
1 .100% of the coverage. Face amount paid in case of death due to accident
2. 100% of the coverage amount paid in case of loss of more than one limb or sight in both eyes or loss of one limb sight in one eye.
3. 50% of the coverage face amount is paid in case of one limb or sight in one eye.
4. The rider coverage terminate once we pay all or part of the coverage face amount
EXCLUSIONS:
The Rider will not be payable if death or dismemberment results from or is accelerated by:
i. Suicide or self flitted injury whether the life insured is medically sane or insane.
ii. War terrorism, invasion, act of foreign enemy hostilities (whether war be declared or not) civil war, material law revolution insurrection, riot or civil commotion war means any war whether declared or not.
iii. Service in the armed forces, or any policy organization of any country at war or service in any force of an international body.
iv. Committing an assault, a criminal offence, an illegal creativity or any breach of law.
v. Taking or absorbing accidentally or otherwise any intoxicating liquor, drug, narcotic, medicine, sedative or poison, expect as prescribed by a licensed doctor other than the owner of this policy or life insured.
vi. Inhaling any gas or fumes accidentally or otherwise except accidentally in course of daily.
vii. Body or mental infirmity or any disease.
viii. Participating in aviation other than as a fare paying passenger in an air craft which is authorized by the relevant regulation to carry passenger between established aerodromes.
Term Rider
Benefit
Provide for payment of the coverage face amount event of death of the life insured.
Exclusion
Death due to suicide in the first twelve months of coverage.
b. Critical Illness Rider
Benefits
1. Loving amount is paid. If the life insured is diagnosed to is suffering from any of the 4 illness specified.
2. The life insured survives the specified illness for a period of least 30 days from the date of diagnosis
CHAPTER-3
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
What is Research?
Research is a common parlance, which refers to a search for knowledge. One can define research as scientific and systematic search for pertinent. Research is of a great importance to find out the nature, extent and cause of the research issue under study.
Research Methodology is the process in which various steps that are generally adopted by a research are outlined.
THE MARKETING RESEARCH PROCESS:-
As marketing research is a systemic & formalized process. It follows a certain sequence of research action. The marketing research process
Has the following step.
1. Formulating the problem.
2. Developing objective of the research.
3. Designing an effective research plan.
4. Data collection Techniques
5. Evaluating the data & preparing a research report.
(1) Formulating the problem
The problem formulation is the first & the most important step of the marketing research process. The problem has to be defined clearly & specifically, as an ill-defined problem may result in an ineffective solution.
Though errors & biases can creep into marketing research at any stage of the process. If the decision makers & researchers do not agree completely on the definition of the problem. The research effort will be wasted .At this stage, the precise information requirements to make the marketing decision should be defined.
(2) Developing objective of the research
The objective of the research should clear & specific. The objectives should cover questions regarding the purpose of the study, how the study should be conducted, the information needs & the sources of information.
(3) Designing an effective research plan
Normally the research design is broadly classified into exploratory research, descriptive research, & causal research.
Exploratory research helps the management identify the presence of potential opportunities & threats for the company. It is generally conducted with minimum expenditure of time &cost during the initial
Stages of decision making process.
Descriptive research is generally conducted after the exploratory research. As the problem is clearly defined in exploratory research,
The quantum or intensity of the problem is identified in descriptive research. Descriptive studied usually involve a small number of subjects. In casual research, the cause & effect relationships between two variables are analyzed. This research helps managers select a particular strategy. It is carried out with a detailed questionnaire & with clearly defined objectives.
Research Instruments
The research instruments generally used to collect primary data are questionnaire & mechanical instrument.
(a) Questionnaires
Questionnaires are formal sets of questions prepared to collect the required information. This is one of the most effective and popular techniques used in surveys. Before deciding on the question, it is important to understand the exact nature of the information required & who should be interviewed. The contents, phrasing and the sequence of the questionnaire should also be clear & unambiguous. The Knowledge level of target respondents should be kept in mind while drawing up the question.
(b) Mechanical instruments
Mechanical instrument such as galvanometers measure the responses on various parameters such as emotions, interesting an advertisement or a picture, etc. The tachistoscope is another instrument where a message is flashed for about one hundredth of a second several times & the subject behaviour is observed.
(c) Sampling
A sample is a subset of a unit or a population, collected as representation of it. Sample should be the representative of the population. A sample is used to discover one or more properties of the population. Collection of sample is called sampling, proper sampling design is essential in marketing research. The sample has to be collected in such way that it represents the population.
(d) Sampling units
The portion of the population that researchers need to target & that represents the entire population is known as the sampling unit. The target population is defined on the basis of research objectives defined earlier. The target population should be selected in such a way that everyone in the population has equal chances of being included in the sample.
(e) Sample size
The size of the sample is an important element in the research process. As the size of a sample increases. Accuracy & reliability of result also increase. However, the cost of research also increases. Therefore, researchers need to make a trade-off between the accuracy & cost of research.
(f) Sampling procedure
Sampling procedure is the way in which we select a sample .This method for selecting samples include stratified & unstratified sampling. Probability and nonprobabilitiy sampling. Single stage sampling & multistage sampling, equal unit probability sampling & unequal unit probability sampling, and single unit sampling and cluster of units sampling. Probability sampling & nonProbability sampling are procedures. Which are widely used. Probability sampling is a sampling technique where each unit has known chance of being selected in the sample. Simple random sampling, stratified sampling and cluster sampling are methods that come under profitability sampling Nonprofitability sampling method include convenience sampling. Quota sampling, judgment sampling, etc.
(4) Data collection techniques
Primary data is direct or first-hand data collected from respondents. It is collected using research instruments like questionnaire, mailers, telephonic interview, and etc. Secondary data is collected from already available sources such as published paper, journals, magazines, reports, company literature, etc. Researchers need to evaluate the cost effectiveness of the sources before selection.
(A) Primary data collection
Primary data is collected by surveying the sampling units or the elements of the sampling units. Primary data is the first- hand information gathered to solve the research need.
(I) Mail interviews
Mail interviews are widely used for the collection of information, since the cost is relatively low. Respondents in a mail interview can remain
Anonymous if they wish to. In such cases, they can their opinions openly, criticize products & services, and provide confidential & accurate information. The advantage of the mail interview is that the respondent can respond to the questionnaire at his convenience. One of the biggest problems in mail interview is low response rate.
(II) Telephonic interviews
Telephonic interviews are often conducted when the information required is not great & needs to be collected quickly. Research regarding non-confidential & general information can be easily elicited through telephonic interview. People can be easily reached on telephones & the reluctance level of respondents is usually low. But the response rate is telephonic interview is also low, since on average only one call per six call is picked up. Normally structured interview are used. This is because the amount of information is also well defined & not confidential in nature. Therefore, structured interviews are more suitable for telephonic interview.
(III) Personal interviews
Personal interviews are conducted when an interviewer & interviewee are physically present at one place. They can be one-to-one or one-to-many. The interviewer asks questions & records the responses from the respondents. He can record the responses during the interview or
At the end of interview. However, He needs to ensure that the information is recorded in an unambiguous manner. It also inherent drawbacks such as bias on the part of researcher as well as respondent. Respondent may be reluctant to share the confidential information may be essential for the research procees.But with a properly select sample and well trained interviewers, important information can be gathered from respondents.
(IV) Observation
This method is collecting the information from respondents is effective only when the interviewer is highly trained & intelligent enough to draw the appropriate conclusions through active observation of the respondent.
(B) Secondary data
Secondary data is collected from the company‘s internal & external resources. While the internal sources include the company‘s literature,
Annual reports, sales reports, etc.The external sources could be independent magazine, journals, legal document, government gazettes, etc. Compared to be data, the collection of secondary data is cheaper & less time consuming.
(5) Evaluating the Data & Preparing a Research Report
Once the information is collected, it is edited & coded. The data after conducting is tabulated & evaluated using statistical applications. After data analysis, a detailed research report indicating the extant to which the objective set for the research process have been fulfilled.
I have carried out the research by using following technique:
(A) Primary source- survey:
A random survey was carried out according to my convenience while going out to contact the respondents. The different govt. offices, private offices & different business houses were kept in mind.
(B) Secondary Sources:
Internal: Company’s Prospectus
External: books, Magazines, Journal’s
1. Data collection techniques:
The data was collected through questionnaire. The data collection period was 2 months.
15 May, 2007 to 15 July, 2007.
(A). Questionnaire:
The data was collected through open and closed ended questionnaire, in which question were Asked in a logical order. Each question has a specific meaning. The data analysis is bases on the data collected through these questions.
2. Market Segmentation:
The market segmentation was done keeping in mind that what types of clients were available in The Market. These segments are namely:
i. Business class
ii. Service class
3. sample design:
Sample design refers to the techniques as the procedure that a researcher would adopt in selective items for sample.
A. Target Population or Sampling Unit:
The universe for the research is Udaipur city.
B. Sample Size :
The sample size taken for the study is 100 respondents:
C. Sample Procedure:
Sample procedure used in the project is non probability sampling. The required information was collected through convenience and judgmental sampling.
Strengths
1. ADAG has trillion rupee m-cap clubs.
2. Issue ‘new business premium’ of 933.Cr. For last financial year.
3. Growth rate of 377% -the highest in the industry. Journeyed from rank 13th to rank 5th as of March 07.
4. Presence in 600+ locations through channel development association.
5. Advisor base grew from 9900 to over 95000.
6. Second company in the life insurance industry to be ISO certified for all process.
7. Life line- phone, physical, & internet based integrated Single point, 24*7 help desk for customer Satisfaction.
Weakness
1. Advisors are not perfectly Trained.
2. Weak Access to Rural Areas.
3. People do not trust Easily in Private companies.
4. Only 20% of the policy holders are fully satisfied.
4. Data Analysis & Interpretation:
Opportunities
1. Untapped Rural Market.
2. Nearly about 6.42% of people in India are Insured that makes a wide scope of market.
3. Use the strong Brand Image.
4. Rural Insurance & micro Credit facilities help in tapping the left Market.
Threats
1. One of major competitor has entered & had taken first mover advantage in Rural insurance market.
2. Tough competition due to growing no. of players in the industry.
3. Low level of Awareness among people regarding Reliance Life Insurance.
4. Tough IRDA Regulation & other Government policies.
Analysis of data was done by drawing inferences through what was collected as input from the respondents. The data analysis & interpretation part is detail on the next page
1 .GENDER- WISE DISTRIBUTION OF POLICY HOLDERS:-
Gender
Percentage
Male
76
Female
24
INTERPRETATION: - Data shows life insurance policy holder was dominated by males as their percentage was higher than females.
2. AGE SEGMENTATION OF POLICY HOLDERS:
Age Group
Percentage
up to 30
12
30 to 50
65
50 & above
23
501
Percentage
up to
30
12%
30 to
50
65%
50 &
Above
23%
Up to 30
30 to 50
50 & above to
INTERPRETATION: - out of total respondents, people of middle aged group (30-50 years) had highest number of policies followed by elder generation (50&above)And least number of policy holders was under 30.People of middle age group are generally working and use insurance as a financial tool for various purposes.
3. Marital status-wise distribution of Policy Holders:-
Marital Status
Percentage
Married
63
Unmarried
37
Percentage
Married
63%
unmarried
37%
Married
Unmarried
INTERPRETATION: - Out of total respondent 63% were married while 37% were unmarried thus results that unmarried persons were least bothered about social security.
Younger Couples take insurance as a good investment option and older couples took it with a perspective of social security.
4. Distribution of Policy Holders According To Educational Profile:-
Education
Percentage
Up to Sec.
26
Graduate
31
Post Graduate
43
INTERPRETATION: - The data show that education profile of respondent and investment in insurance has positive relationship. People who were highly qualified understand the need & importance of insurance and accept it more. On the other hand, people of low educational profile pay less importance to insurance as asocial security or investment tool.
5. DISTRIBUTION OF POLICY HOLDER ACCORDING TO INCOME
Income
Percentage
Below 2 Lakh
21
2-5 Lakh
49
5 Lakh & above
30
Percentage
Below
2
Lakh
21%
Lakh
2-5
49%
5 &
Lakh
above
30%
Below 2 Lakh
2-5 Lakh
5 Lakh & above
INTERPRETATION: - Out of total number of respondents, the highest number (49%) were of middle income group (2-5 lakh) .While higher income group (5 lakh & above) constituted 30% of total sample size. The persons having lowest income (up to 2 lakh)
Was least interested in Insurance (17 % only)
6. Distribution of policy holder according to Occupation:-
Occupation
Percentage
Service
20
Business
68
Professionals
12
INTERPRETATION: - The survey indicates that the highest numbers of respondents were businessman 68% followed by 20% of service class. Less number of professionals was interested in insurance .they take insurance as the last investment option.
7. Distribution of policy holder as per number of Policy Held:
Number of Policy
Percentage
One
64
Two
20
More than 2
16
INTERPRETATION: - It is evident that maximum number 64% of policy holders preferred one policy only, while 20 % of respondents had two policies. The number of respondents 16% preferred more that 2 policies.
8. DISTRIBUTION OF POLICY HOLDER ACCORDING TO THE PURPOSE OF TAKING INSURANCE POLICY:-
Purpose
Percentage
Investment
35
Risk Cover
22
Saving
26
Tax Benefit
17
INTERPRETATION: - The analyses of surveyed population indicate that Mostly people consider insurance as a good investment tool. They use it for earning higher profits. Secondly people option insurance as a method of forced saving .more than one fifth of the population use it for securing their future .less number of people use insurance as a tax benefit.
9. Distribution of policy holder according to whether they compared different Policy before purchasing present policy
Comparison
Percentage
Yes
83
No
17
INTERPRETATION: - Majority of population compare different insurance plans before purchasing. This trend was majorly observed in ULIP.plan this implies that today’s consumer is well informed and aware about his rights.
Any company existing in insurance sector has to upgrade its products and services frequently.
10. SATISFACTION LEVEL OF POLICY HOLDERS:-
Level of Satisfaction
Percentage
Completely satisfied
20
Satisfied
58
Partially Satisfied
17
Dissatisfied
3
completely Dissatisfied
2
Percentage
20%
58%
17%
3%
2%
Completely satisfied
Satisfied
Partially Satisfied
Dissatisfied
Completely Dissatisfied
INTERPRETATION: - The highest numbers of policy holders were satisfied with the policy they have opted. While 20 & 17% of respondents were highly & partially satisfied respectively. Only 5% of policy holders were not satisfied. Only these were dissatisfied & 2% were completely dissatisfied with their policies.
Major reasons for less satisfaction were:
1. Lack of Knowledge
2. Lack of Return
3. Lack of Belief
4. Problem in claim.
11. Agents meet & updated about new Products:-
Agent Service
Percentage
Yes
44
No
56
INTERPRETATION: - The highest numbers of respondents 56% were not satisfied with service provided by the agent while 44% of respondents were satisfied with agent services.
REASONS:
1. Lack of service.
2. No claim guidance from Agent side about gain from claim.
12. Awareness about Life Insurance Policy:-
Awareness through
Percentage
Agent
45
People
12
Media
35
CA
8
INTERPRETATION: - Majority of people came to know about insurance Through Agents. Electronic media, print media, and various camps organized by company were another major information provider about insurance .Few people got the knowledge about insurance plans through internal references.
13. Suggestion for Reliance Life Insurance to complete with other life’s: Insurance co. (from existing customers)
Suggestion
Percentage
New Marketing Strategy
35
Advertisements
34
Training to Agent
21
Structure of Premium
4
Returns
6
INTERPRETATION: - New marketing strategy advertisement & training to agent will help Reliance Life Insurance to compete with other private life insurance company. Few of the marketing strategies could be (I) Organize more & more camps for providing knowledge about Reliance life insurance. (II) Advertisement in print & electronic media.
LIMITATIONS
v Unavailability of information: - Some Information related to difference Policies and their premium calculation was not available.
v Time constraint: - it was from the side of customer as they were having short time.
v For answering to the question asked in the questionnaire.
v Biasness of Respondent: - People were biased towards Govt. Sector.
v People are not aware about the Reliance life insurance.
CHAPTER-4
FINDINGS ,CONCLUSION ,LIMITATIONS
CONCLUSION
Ø Many people are purchasing like insurance policies due to the other benefits they are getting with the tax benefit, risk cover, saving.
Ø Marketing strategy like frequent advertising, organizational of educative camps will help in competing with other life insurance companies.
Ø People are not aware about the concept of fully insured & they just understand the basic of insurance & not think full insurance of much use.
Ø Insurance policy holder is dominated by males as their percentage was higher than females
Ø 58% policy holders are satisfied. Only one fifth of the policy holders are fully satisfied with company services.
Ø Still in India, purchasing of insurance policy & other financial decision dominated by males.
SUGGESTION
1) Overall the company is having good run in the market of Udaipur city, but in order to improve or strengthen its position in the market, it must generate more faith in the minds of the people.
2) Time to time proper information about growth & changes in the company should be made known to the people. This with help in development of the company.
3) The company should adopt aggressive advertisement. Mentioning feature of products, timely maturity payments and commitment for higher returns.
4) Knowledge should be given to the policy holders regarding the concept of fully insured or underinsured.
5) Market potential is high but awareness & reliability about the brand is yet to be created.
QUESTIONNAIRE
NAME: - ……………………………………………………………………………..
AGE:- …………………………………………………………………………………
GENDER: - MALE ( ) FEMALE ( )
EDUCATION: - ………………………………………………………………………….
OCCUPATION:-…………………………………………………………………………
MARRIED: - YES ( ) NO ( )
ANNUAL INCOME:…………………………………………………………………….
ADDRESS:………………………………………………………………………………
PHONE NO:……………………………..MOBILE NO………………………………..
Q.1. No. of policies acquired by the respondent?
(a) One (b) two (c) more than two
Q.2. why did you opted for insurance?
(a) Investment (b) risk covers (c) saving (d) tax benefit
Q. 3. How did you take the decision of taken insurance policy?
(a) Without comparison (b) with comparison
Q.4 Are you satisfied with the services & policies provide by company?
(a) Completely satisfied (b) satisfied
(c) Partly satisfied (d) dissatisfied
(e) Completely dissatisfied
Q.5 Are you being informed about new product & services offered by the company through agent?
(a) Yes (b) No
Q.6 How did you come to know about insurance policy?
(a) Agent (b) media
(c) CA (d) people
Q.7 what are suggestion for improvement of reliance life insurance in insurance sector?
(a) New Marketing Strategy (b) Advertisement
(c) More Training to Agent (d) Flexible structure of Premium
(e) Returns
APPENDIX
(1) CEO : Chief executive officer
(2) CFO : Chief financial officer
(3) CMO : Chief marketing officer
(4) COO : Chief operating officer
(5) CTO : Chief technical officer
(6) ULIP : unit linked insurance plan
(7) MLIP : Market linked insurance plan
BIBLIOGRAPHY
Books:-
Ø Kothari .C.R. ( Research methodology)
News paper:-
Ø Times of India ( 3-10-2006, Ahmedabad)
Journals & Magazines:-
Ø Nafa Nuksaan (15-5-2006)
Websites:-
Ø www.google.com
Ø www.reliancelife.co.in
Ø http://www.insure2bsecure.com/insure/information/
Ø CompanyInfo/omkotak.asp
