CONSUMER AWARENESS TOWARD INSURANCE PRODUCT

A six Weeks Internship Report

Submitted for the partial Fulfillment of the Requirement for the Award of Degree of
Master in Business Administration

Under the Mentorship of

Deepak Kaplesh
Designation of the mentor
Submitted by
Narender Singh
University Roll No- 18MBA0312
3rd Semester MBA
Academic Session 2019-20
Himachal Pradesh Technical University Business School
Rajiv Gandhi Government Engineering College Kangra Campus at
Nagrota Bagwan District – Kangra Himachal Pradesh 176047

CERTIFICATE
Dated…./…./…..
Himachal Pradesh Technical University Business School[HPTUBS]
1
Rajiv Gandhi Government Engineering College [RGGEC]
Kangra at Nagrota Bagwan (Massal)
Himachal Pradesh (India) – 176047

This is certify I Narender Singh have carried out the research proposal embodied in present
six weeks internship report for the partial fulfillment of the degree of Master in Business
Administration as per the ordinances of Himachal Pradesh Technical University. I declare to
the best of my knowledge that no part of this internship report earlier submitted for the award
of Master in Business Administration and other reseaech degree of any University.

--------------------------------
Name: Narender Singh
Urn. : 18MBA0312

Dr. Sanjeev Kumar

HPTUBS

ACKNOWLEDGEMENT

First of all I would like to thank the Management of SBI Insurance for giving me the
opportunity to do my 45 days project training in their esteemed organization. I am highly
obliged to Mr. Deepak Kaplesh (Branch Manager) for granting me to undertake my training
at Dharamshala branch.

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I express my thanks to all Employees under whose able guidance and direction, I was able to
give shape to my training. Their constant review and excellent suggestions throughout the
project are highly commendable.

I also express my thanks to my teacher Dr. Sanjeev Kumar for boosting me to complete the
project.
My heartfully thanks go to all the executives who helped me gain knowledge about the actual
working and the processes involved in various departments.

Name – Narender Singh

PREFACE
The liberalization of the Indian insurance sector has been the subject of much heated debate
forsome years. The policy makers where in the catch 22 situation where in for one they
wanted competition, development and growth of this insurance sector which is extremely
essential for channeling the investments in to the infrastructure sector. At the other end the
policy makers had the fears that the insurance premia, which are substantial, would seep out

3
of the country; and wanted to have a cautious approach of opening for foreign participation in
the sector.
As one of the rare occurrences the entire debate was put on the back burner and the IRDA
saw the day of the light thanks to the maturing polity emerging consensus among factions of
different political parties. Though some changes and some restrictive clauses as regards to the
foreign participation were included the IRDA has opened the doors for the private entry into
insurance.

Whether the insurer is old or new, private or public, expanding the market will present
multitude of challenges and opportunities. But the key issues, possible trends, opportunities
and challenges that insurance ser will have still remains under the realms of the possibilities
and speculation. What is the likely impact of opening up India’s insurance sector.

The large scale of operations, public sector bureaucracies and cumbersome procedures hampers
nationalized insurers. Therefore, potential private entrants expect to score in the areas of customer
service, speed and flexibility. They point out that their entry will mean better products and choice for
the consumer. The critics counter that the benefit will be slim, because new players will concentrate
on affluent, urban customers as foreign banks did until recently. This seems to be a logical strategy.
Start-up costs-such as those of setting up a conventional distribution network-are large and high-end
niches offer better returns. However, the middle-market segment too has great potential. Since
insurance is a volumes game. Therefore, private insurers would be best served by a middle-market
approach, targeting customer segments that are currently untapped.

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 ABOUT COMPANY

SBI Life Insurance is a joint venture life insurance company between State Bank of
India (SBI), the largest state-owened banking and financial services company in india,
and BNP Paribas is a French multinational bank and financial services company with
global headquaters in Paris. SBI owns 62.1% of the total capital and BNP Paribas
cardif 22% of the capital. SBI Life Insurance Company Limited (SBI Life)
established in 2001. SBI has unrivalled strength of over 22000 branches across the
country making it the largest banking group in india. BNP Paribas cardif S.A. is the
life and property & casualty insurance arm of BNP Paribas one of the strongest banks
in the world. SBI life offers a comprehensive range of life insurance and pension
products. The company offers individual and group products which include savings
and protection plans to address the insurance needs of diverse customer segments.
SBI Life has a multi-channel distribution network comprising of an expansive
Bancassurance channel with SBI and agent network comprising of 1.13 lakh agents as
on September 30/ 2018 the company had a widespread network of 848 offices across
the country. SBI Life Insurance company Limited was incorporated as a public
limited company at mumbai on october 11 /2000 and received certificate of
commencement of business from the RoC on November 20/2000. The company is
registered with the IRDAI for carrying out business of life insurance pursuant to the
registration certificate dated March 29/2001. During financial year 2002-03 SBI Life
launched Bancassurance channel. It is also paid its first claim during the year. During
financial 2004-05 SBI Life’s Assets Under Management (AUM) crossed Rs. 1000
crore mark. In january 2005 SBI Life launched unit linked product. During financial
year 2005-06 SBI Life became the first new generation private life insurance
company to make profit; the company registered profit after tax of Rs. 2.03 crore for
the year. During financial year 2007-08 SBI Life’s Gross Written Premium (GWP)
crossed the milestone of Rs. 5000 crore and AUM crossed the milestone of Rs. 1000
crore. The company also achieved cumulative breakeven during the year wiping out
all accumulted losses. During the year the company’s share capital increased by Rs.
500 crore to Rs. 1000 crore. During financial year 2009-10 SBI Life’s GWP crossed
the milestone of Rs. 10000 crore. During financial year 2010-11 SBI Life’s branch

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network crossed the milestone of 500 branches. During the financial year 2011-12
SBI Life achieved the milestone of profit after tax of Rs. 500 crore; the company
reported PAT of Rs. 556 crore for the year. It also declared a maiden dividend of 5%
during the year. During the financial year 2012-13 the company's AUM crossed the
milestone of Rs.50000 crore and the number of branches crossed 750. During the
financial year 2015-16 SBI Life's GWP crossed the milestone of Rs.15000 crore.
During the financial year 2016-17 SBI Life's renewal premium collection crossed the
milestone of Rs.10000 crore. Also during the year Value Line Pte Ltd. and McRitchie
Investments Pte Ltd. bought stake of 1.95% each in SBI Life from SBI. SBI Life
Insurance increased its market share of New Business Premium generated among
private life insurers in India from 15.87% in Fiscal 2015 to 20.04% in Fiscal 2017.
Between Fiscal 2015 and Fiscal 2017 the Company's New Business Premium
generated increased at a CAGR of 35.45% which is the highest among the top five
private life insurers (in terms of total premium in Fiscal 2017) in India. In Fiscal 2017
SBI Life Insurance enjoyed a market share of Individual Rated Premium of 20.69%
among private life insurers in India and 11.16% of the entire life insurance industry in
India. Between Fiscal 2015 and Fiscal 2017 its Individual Rated Premium increased at
a CAGR of 37.90 % the highest among the top five private life insurers (in terms of
total premium in Fiscal 2017) in India. The Company has also issued the highest
number of individual life policies annually among the top five private life insurers (in
terms of total premium in Fiscal 2017) in India since Fiscal 2014.As of June 30 2017
SBI Life had a comprehensive product portfolio of 37 individual and group products
including a range of protection and savings products to address the insurance needs of
diverse customer segments. Its individual products include participating products non-
participating protection products other non-participating products and unit-linked
products which contributed 10.77% 0.95% 1.69% and 50.36% respectively of its New
Business Premium in Fiscal 2017; while its group products include credit life group
protection products other group protection products group fund management ('Group
FM') products and other group products which contributed 2.72% 1.14% 31.73% and
0.65% respectively of its New Business Premium in Fiscal 2017. During the financial
year 2017-18 SBI Life achieved AUM milestone of Rs.1 lakh crore. State Bank of
India offloaded 8 crore shares and BNP Paribas Cardiff S.A. offloaded 4 crore share

6
 of SBI Life Insurance Company via an initial public offer (IPO) during the period
from 20 September 2017 to 22 September 2017. There was no fresh issue of shares by
the company. The stock debuted on BSE at Rs.733.30 on 3 October 2017 a premium
of 4.75% compared to the IPO price of Rs.700 per share. On 24 September 2018 SBI
Life Insurance Company Limited announced that it has been informed by BNP
Paribas Cardiff SA (BNP Paribas Cardiff) that BNP Paribas Cardiff may consider
reducing its shareholding in the company to ensure compliance with minimum public
shareholding requirements in accordance with applicable law. In this context BNP
Paribas Cardiff has also confirmed that it is yet to make any firm decisions regarding
the size timing or nature of such potential reduction in their shareholding of the
company. Accordingly further updates will be provided in compliance with the
applicable law.

EXECUTIVE SUMMARY

In today’s corporate and competitive world, I find that insurance sector has the maximum
growth and potential as compared to the other sectors. Insurance has the maximum growth
rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth
potential attracts me to enter in this sector and Insurance has given me the opportunity to
work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon the
availability of the product and services near to the customer, which can be distributed through
a distribution channel. In Insurance sector, distribution channel includes only agents or
agency holders of the company. If a company like RELIANCE LIFE INSURANCE, TATA
AIG, MAX etc have adequate agents in the market they can capture big market as compared
to the other companies.

Agents are the only way for a company of Insurance sector through which policies and
benefits
of the company can be explained to the customer.

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Table of Content
Chapter No. Title Page No.

Certificate
Ackowledgement
Preface
About Company
Executive Summary
1. Introduction
1.1 Introduction 11-14
1.2 Life Insurance 15-16
1.3 General Insurane 16-17
1.4 Health Insurance 17-19
1.5 Insurance Sector Reform 20-21
.6 Insurance Regulatory 21-23
Authority
1.6 Best SBI LIFE Insurance plan 23-25
1.7 GENERAL RULES 26-27
.8 Frequently Term Used 27-29

2. Research Methodology
2.1 Reaearch Methodilogy 31
.2 Objective of the Study 31
.3 Research Design 31

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 .4 Data Collection 32
.4.1Colection of Primary Data
.4.2Collection of Secondary 32
Data
.5 Sampling Design 32
.6 Samplin Procedure 33
33
3. Data Interpretation &
Analysis
.1 Classification on the basis of
Age Wise 35
.2 Classification on the Basis
of Insurance Policy 36
.3 Classification on the Basis
of Education Level 37
.4 Classification on the Basis
of Occupation 38

.5 Classifaction on the Basis of

39
Marital Status

.6 Classification on the Basis

40
of No. of Dependents

.7 Classification on the Basis

of Annual Income 41

.8 Classification on the Basis

42
of Reason to Take Policy

.9 Classification on the Basis

43
of Policy Chocie

.10 Classification on the Basis

of Awareness Through 44
4. Conclusion, Finding &
9
Suggestions
.1 Finding 46

.2 Conclusion 47

.3 Suggestion 47

Bibliography 48

Questionnaire 49-50

CHAPTER – I
INTRODUCTION
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1.1 INTRODUCTION

1818 saw the advent of life insurance business in India with the establishment of the Oriental
Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the
Madras Equitable had begun transacting life insurance business in the Madras Presidency.
1870 saw the enactment of the British Insurance Act and in the last three decades of the
nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897)
were started in the Bombay Residency. This era, however, was dominated by foreign
insurance offices which did good business in India, namely Albert Life Assurance, Royal
Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard
competition from the foreign companies.
 
In 1914, the Government of India started publishing returns of Insurance Companies in India.
The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate
life business. In 1928, the Indian Insurance Companies Act was enacted to enable the
Government to collect statistical information about both life and non-life business transacted
in India by Indian and foreign insurers including provident insurance societies. In 1938, with
a view to protecting the interest of the Insurance public, the earlier legislation was
consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for
effective control over the activities of insurers.

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 The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were
a large number of insurance companies and the level of competition was high. There was also
allegation of unfair trade practices. The Government of India, therefore, decided to
nationalize insurance business.
An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and
Life Insurance Corporation came into existence in the same year. The LIC absorbed 154
Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign
insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector. 
The history of general insurance dates back to the Industrial Revolution in the west and the
consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a
legacy of British occupation. General Insurance in India has its roots in the establishment of
Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the
Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes
of general insurance business.
1957 saw the formation of the General Insurance Council, a wing of the Insurance
Association of India. The General Insurance Council framed a code of conduct for ensuring
fair conduct and sound business practices. 
In 1968, the Insurance Act was amended to regulate investments and set minimum solvency
margins. The Tariff Advisory Committee was also set up then.
 In 1972 with the passing of the General Insurance Business (Nationalization) Act, general
insurance business was nationalized with effect from 1st January, 1973. 107 insurers were
amalgamated and grouped into four companies, namely National Insurance Company Ltd.,
the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United
India Insurance Company Ltd. The General Insurance Corporation of India was incorporated
as a company in 1971 and it commence business on January 1sst 1973.
This millennium has seen insurance come a full circle in a journey extending to nearly 200
years. The process of re-opening of the sector had begun in the early 1990s and the last
decade and more has seen it been opened up substantially. In 1993, the Government set up a
committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose
recommendations for reforms in the insurance sector. The objective was to complement the
reforms initiated in the financial sector. The committee submitted its report in 1994 wherein,

12
among other things, it recommended that the private sector be permitted to enter the
insurance industry. They stated that foreign companies be allowed to enter by floating Indian
companies, preferably a joint venture with Indian partners.
 Following the recommendations of the Malhotra Committee report, in 1999, the Insurance
Regulatory and Development Authority (IRDA) was constituted as an autonomous body to
regulate and develop the insurance industry. The IRDA was incorporated as a statutory body
in April, 2000. The key objectives of the IRDA include promotion of competition so as to
enhance customer satisfaction through increased consumer choice and lower premiums, while
ensuring the financial security of the insurance market.
 The IRDA opened up the market in August 2000 with the invitation for application for
registrations. Foreign companies were allowed ownership of up to 26%. The Authority has
the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from
2000 onwards framed various regulations ranging from registration of companies for carrying
on insurance business to protection of policyholders’ interests.
 In December, 2000, the subsidiaries of the General Insurance Corporation of India were
restructured as independent companies and at the same time GIC was converted into a
national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July,
2002.
Today there are 31 general insurance companies including the ECGC and Agriculture
Insurance Corporation of India and 24 life insurance companies operating in the country.
The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together
with banking services, insurance services add about 7% to the country’s GDP. A well-
developed and evolved insurance sector is a boon for economic development as it provides
long- term funds for infrastructure development at the same time strengthening the risk taking
ability of the country.

LIFE INSURANCE:-

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In 1818 the British established the first insurance company in India in Calcutta, the Oriental
Life Insurance Company. First attempts at regulation of the industry were made with the
introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments
to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in
the Act were the power given to the Government to collect statistical information about the
insured and the high level of protection the Act gave to the public through regulation and
control. When the Act was changed in 1950, this meant far reaching changes in the industry.
The extra requirements included a statutory requirement of a certain level of equity capital, a
ceiling on share holdings in such companies to prevent dominant control (to protect the
public from any adversarial policies from one single party), stricter control on investments
and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign
life insurance companies. Business was heavily concentrated in urban areas and targeted the
higher echelons of society. “Unethical practices adopted by some of the players against the
interests of the consumers” then led the Indian government to nationalize the industry. In
September 1956, nationalization was completed, merging all these companies into the so-
called Life Insurance Corporation (LIC). It was felt that “nationalization has lent the industry
fairness, solidity, growth and reach.”

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

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

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

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

1956: The market contained 154 Indian and 16 foreign life insurance company.

1.3 GENERAL INSURANCE

The General Insurance industry in India dates back to the Industrial Revolution and the
subsequent increase in trade across the oceans in the 17th century. As for Life Insurance, the
British brought General Insurance to India, and a similar path was followed in the
development of this industry. A number of private companies were in existence for years and
years until, in 1971, the Indian Government decided that the public interest would be served
by nationalizing the industry, merging all the 107 companies into four companies, depending
on the sort of business transacted (Marine, Fire, Miscellaneous). These were the National
Insurance Company Ltd., the Oriental Insurance Company Ltd., the New India Assurance
Company Ltd., and the United India Insurance Company Ltd. located in Calcutta, New Delhi,
Bombay and Madras respectively. The General Insurance Corporation (GIC) was set up in
1972 as a ‘holding’ company, having these four companies as its subsidiaries.

Some of the important milestones in the general insurance business in India

are:
15
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code
of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the general
insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and
grouped into four companies viz. the National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.

1.4 Health Insurance

Over the last 50 years India has achieved a lot in terms of health improvement. But still India
is way behind many fast developing countries such as China, Vietnam and Sri Lanka in
health indicators (Satia et al 1999). In case of government funded health care system, the
quality and access of services has always remained major concern. A very rapidly growing
private health market has developed in India. This private sector bridges most of the gaps
between what government offers and what people need. However, with proliferation of
various health care technologies and general price rise, the cost of care has also become very
expensive and unaffordable to large segment of population. The government and people have
started exploring various health financing options to manage problems arising out of growing
16
set of complexities of private sector growth, increasing cost of care and changing
epidemiological pattern ofdiseases.
The new economic policy and liberalization process followed by the Government of India
since 1991 paved the way for privatization of insurance sector in the country. Health
insurance, which remained highly underdeveloped and a less significant segment of the
product portfolios of the nationalized insurance companies in India, is now poised for a
fundamental change in its approach and management. The Insurance Regulatory and
Development Authority (IRDA) Bill, recently passed in the Indian Parliament, is important
beginning of changes having significant implications for the health sector. The privatization
of insurance and constitution IRDA envisage to improve the performance of the state
insurance sector in the country by increasing benefits from competition in terms of lowered
costs and increased level of consumer satisfaction. However, the implications of the entry of
private insurance companies in health sector are not very clear. The recent policy changes
will have been far reaching and would have major implications for the growth and
development of the health sector. There are several contentious issues pertaining to
development in this sector and these need critical examination. These also highlight the
critical need for policy formulation and assessment. Unless privatization and development of
health insurance is managed well it may have negative impact of health care especially to a
large segment of population in the country. If it is well managed then it can improve access to
care and health status in the country very rapidly.
Health insurance as it is different from other segments of insurance business is more complex
because of serious conflicts arising out of adverse selection, moral hazard, and information
gap problems. For example, experiences from other countries suggest that the entry of private
firms into the health insurance sector, if not properly regulated, does have adverse
consequences for the costs of care, equity, consumer satisfaction, fraud and ethical standards.
The IRDA would have a significant role in the regulation of this sector and responsibility to
minimize the unintended consequences of this change. Health sector policy formulation,
assessment and implementation is an extremely complex task especially in a changing
epidemiological, institutional, technological, and political scenario. Further, given the
institutional complexity of our health sector programmers and the pluralistic character of
health care providers, health sector reform strategies in the context of health insurance that
have evolved elsewhere may have very little suitability to our country situation. Proper

17
understanding of the in dial health situation and application of the principles of insurance
keeping in view the social realities and national objective are important. This paper presents
review of health insurance situation in India the opportunities it provides, the challenges it
faces and the concerns it raises. A discussion of the implications of privatization of insurance
on health sector from various perspectives and how it will shape the character of our health
care system is also attempted. The paper following areas:

• Economic policy context

• Health financing in India
• Health insurance scenario in India
• Health insurance for the poor
• Consumer perspective on health insurance

• Models of health insurance in other countries

This paper is partly based on a deliberations of a one day workshop (IIMA 1999) and a
conference held at 11M Ahmedabad (IIMA 2000) in 1999-2000 on health insurance
involving practicing doctors, representatives from government insurance companies, medical
associations, training institutes, member-based organizations and health policy researchers.
Workshop and conference were part of the activities of Health Policy Development Network
(HELPONET) and is supported by the International Health Policy Program. The paper also
draws on several published and unpublished papers and documents in the area of health
insurance.

1.5 INSURANCE SECTOR REFORM:

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI GovernorR.N.
Malhotra was formed to evaluate the Indian insurance industry and recommend itsfuture,
direction. The Malhotra committee was set up with the objective of complementing the
reforms initiated in the financial sector.
In 1994, the committee submitted the report and some of the key recommendations included:
1.5.1 STRUCTURE:
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 1. Government stake in the insurance Companies to be brought down to 50%.
2. Government should take over the holdings of GlC and its subsidiaries so that
thesesubsidiaries can act as independent corporations.
3. All the insurance companies should be given greater freedom to operate.

1.5.2 COMPETION:
1. Private Companies with a minimum paid up capital of Rs. 1 bn should be allowed
toenter the industry
2. No Company should deal in both Life and General Insurance through a single entity.
3. Foreign companies may be allowed to enter the industry in collaboration with
thedomestic companies.
4. Postal Life Insurance should be allowed to operate in the rural market.
5. Only one State Level Life Insurance Company should be allowed to operate in
eachstate.

1.5.3 REGULATORY BODY:

1. The Insurance Act should be changed.
2. An Insurance Regulatory body should be set up.Controller of Insurance (Currently a
part from the Finance Ministry) should be madeindependent.
3. Government stake in the insurance Companies to be brought down to 50%.
4. Government should take over the holdings of GlC and its subsidiaries so that
thesesubsidiaries can act as independent corporations.
5. All the insurance companies should be given greater freedom to operate.

1.5.4 INVESTMENT:
1. Mandatory Investments of LIC Life Fund in government securities to be reduced
from75% to 50%.

19
 2. GIC and its subsidiaries are not to hold more than 5% in any company (There
currentholdings to be brought down to this level over a period of time).

1.5.5 CUSTOMER SERVICES:

1. LIC should pay interest on delays in payments beyond 30 days.
2. Insurance companies must be encouraged to set up unit linked pension plans.
3. Computerization of operations and updating of technology to be carried out in
theinsurance industry.The committee emphasized that in order to improve the
customerServices and increase the coverage of the insurance industry should open up
tocompetition. But at the same time, the committee felt the need to exercise caution as
anyfailure on the part of new players could ruin the public confidence in the industry.
Hence,it was decided to allow competition in a limited way by stipulating the
minimum capitalrequirement of Rs. 100 crores. The committee felt the need to
provide greater autonomyto insurance companies in order to improve.

1.6 INSURANCE REGULATORYAUTHORITY

On the recommendations of the Malhotra Committee, government has set up an
interimInsurance Regulatory Authority (IRA), with a view to activate an insurance
regulatoryapparatus essential for proper monitoring and control of the insurance industry. The
IRAis headed by a chairman who is also Controller o0f insurance and chairman of TBC.
Theother members of the IRA, not exceeding seven in number of whom not more than
threeshall serve full time, shall be nominated by the central government.

1.6.1 GENERAL INSURERS:

 General Insurance Corporation of India (GIC) (with effect from Dec ‘2000, a national
reinsure)

General Insurance Corporation of India (GIC)

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The general insurance industry in India was nationalized and a government company known
as General Insurance Corporation of India (GIC) was formed by the Central Government in
November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign
insurers which were operating in the country prior to nationalization, were grouped into four
operating companies, namely, (i) National Insurance Company Limited; (ii) New India
Assurance Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United
India Insurance Company Limited.  (However, with effect from Dec'2000, these subsidiaries
have been de-linked from the parent company and made as independent insurance
companies). All the above four subsidiaries of GIC operate all over the country competing
with one another and underwriting various classes of general insurance business except for
aviation insurance of national airlines and crop insurance which is handled by the GIC.
In other word, General insurance means managing risk against financial loss arising due to
fire,marine or miscellaneous events as a result of contingencies, which may or may not occur.

General Insurance means to “Cover the risk of the financial loss from any naturalcalamities
viz. Flood, Fire, Earthquake, Burglary, etc.. i.e. the events which are beyondthe control of the
owner of the goods for the things having insurable interest with theutmost good faith by
declaring the facts about the circumstances and the products bypaying the stipulated sum , a
premium and not having a motive of making profit from theinsurance contract.”

Best 5 SBI Life Insurance Plans in 2019-20

21
SBI Life Insurance, a joint venture between State Bank of India (SBI) and BNP Paribas
Assurance, provides comprehensive life insurance cover at competitive prices. SBI Life
Insurance provides Unit Linked Plans, Child Plans, Pension Plans, Term Insurance Plans,
Endowment Plans and Group Plans.
SBI Life Insurance plans cater to individuals aged from 18 years up to 65 years. The
company offers customized plans for salaried, self-employed, professional and business
persons. Some key highlights of SBI Life Insurance Plans are:
 Cover up to Rs 1 crore (at the rate of Rs 18 per day)
 High claim settlement ratio
 Three-way grievance redressal procedure
Top SBI Life Insurance Plans in 2019-20:
SBI Insurance Plan Type Entry Age Maximum Policy Term
plan Maturity Age
SBI - eShield Online Term Plan 18 – 60/65 years 70 years 5/10 – 30
years
SBI Life – Traditional 18 - 50/55/60 75 years 15/20/25
Smart money Participating years years
Planner Money Back
Endowment plan
SBI Life – Traditional Joint 18 – 46 years 65 years 10 – 30 years
Smart Humsafar Life Insurance
Plan
SBI Life – CSC Traditional 18 – 55/60 years 70 years 10/15 years
Saral Sanchay Participating
Endowment Plan
SBI Life – Non Participating 18 – 45 years 65 years 10/150 – 30 years
Smart power Unit Linked
Insurance Plan

1. SBI Life – eShield

SBI Life – eShield plan is an individual, non-participating, non-linked pure term assurance
plan with customized benefits for the individuals who want the best financial security for
their families at affordable rates. The plan also rewards the individuals maintaining a healthy
22
lifestyle. Besides that, there is an additional Accidental Death Benefit rider offered with the
plan.
The minimum entry age for the plan is of 18 years; while, the maximum entry age limit is of
70 years. The minimum policy tenure can be chosen as 5 years and the maximum limit goes
up to 30 years. The basic sum assured offered in SBI eShield is of Rs 20,000.

2. SBI Life – Smart Money Planner

SBI Life – Smart Money Planner is a non-linked participating Endowment Policy with
money back facility. The main purpose of this money back plan is to provide maximum
benefits in the form of savings, income and insurance cover to you and your family. SBI Life
– Smart Money Planner also offers the flexibility to choose from four plan options with
different policy tenures and premium payment modes. As a money back plan, SBI Life-
Smart Money Planner pays out a fixed amount of the sum assured annually throughout the
benefit period. On maturity or on the death of the life insured, the plan offers guaranteed sum
assured along with additional bonuses. The plan does not offer any additional rider option. In
case of an emergency, the plan allows you to obtain loan against your policy. The basic sum
assured in this plan is Rs 1 lakh (minimum) and offers life coverage up to the age of 75 years.

3. SBI Life – Smart Humsafar

SBI Life – Smart Humsafar is a unique plan of the company for married couples to
complement their efforts to achieve prosperity along with protection. It is a joint life non-
linked participating endowment plan. It offers multiple benefits of savings and insurance
cover for both husband and wife. SBI Life – Smart Humsafar provides financial protection in
the event of death of either or both the lives of the insured. There’s a guaranteed minimum
bonus for first 3 years at the rate of 2.50% of the basic sum assured. Another benefit is the
premium waiver in case of death of any of the lives assured for in force policies, and has
option for additional rider benefit at affordable price. The basic sum assured in this plan is Rs
1,00,000 and the minimum policy term is 10 years.
4. SBI Life – CSC Saral Sanchay
SBI Life – CSC Saral Sanchay is a joint life, non-linked, participating endowment plan with
benefits of savings and life insurance cover. This plan helps policy seekers to save so as to

23
achieve their future goals and support their family in achieving those goals. SBI Life – CSC
Saral Sanchay offers a guaranteed interest rate of 1.00% pa, which will be applicable
throughout the policy term. This plan is suitable for anyone between 18 and 60 years. It
provides the option of partial withdrawals and benefits on death of the life assured or on
maturity of the policy.

5. SBI Life – Smart Power

SBI Life – Smart Power insurance plan is a simple, low premium product that caters to the
changing needs of the policyholder. This plan, launched in October 2015, comes with two
options – level cover option and increasing cover option. It has two fund options – Trigger
Fund option with an advantage of buying low and selling high, and Smart Funds that has the
option to choose from seven funds. The policy term in this plan are 10, 15 and 30 years and
the minimum age group to buy this plan is 18 years and maximum is 45 years with the
maximum age of maturity being 65 years.

SOME OF THE GENERAL RULES:

MIS-DESCRIPTION:
The insurance policy shall be void and all the premiums paid by insured may beforfeited by
the insurance company in the event of mis-presentation or mis-declaration and/or non-
disclosure of any material facts.

REASONABLE CARE:
The insured shall take all reasonable steps to safeguard the property insuredagainst any loss
or damage. Insured shall exercise reasonable care that onlycompetent employees are
employed and shall take all reasonable precautions toprevent all accidents and shall comply
with all statuary or other regulations
FRAUD:
If any claim under the policy may be in any respect fraudulent or if any fraudulentmeans or
device are used by the insured or any one acting on the insured’s behalf to obtain any benefit
under the insurance policy, all the benefits under theinsurance policy may be forfeited.

24
FEW BASIC PRINCIPAL OF GENERAL INSURANCE ARE:
a. Insurable interest
b. Utmost good faith
c. Subrogation
d. Contribution
e. Indemnity

RISK OF LOSS NOT COVERED GENERAL INSURANCE ARE:

The loss or damage or liability or expenses whether direct or indirect occasion byhappening
through or arising from any consequences of war, invasion, act of foreignenemy, hostilities
(whether war be declared or not), civil war, rebellion revolution, civilcommotion or loot or
pillage in connection therewith and loss or damage caused bydepreciation or wear and tear.
However the risk of loss or damage by war can be insuredby payment of additional premium
in some cases only.

1.8 FREQUENT TERMS USED

AGENT: An insurance company representative licensed by the state, who

solicits,negotiates or effects contracts of insurance, and provides service to the policyholder
farthe insurer.

ACTUAL TOTAL LOSS

It is a loss where the goods are completely lost and become irrecoverable

ADDITIONAL COVER
An insurance policy extended to cover additional risk perils such as strikes. Riotsand Civil
commotion etc on payment of extra premium.

AGREED VALUE POLICY:

25
Policy which undertakes to pay a specified amount in case of total loss.Under this case the
policy does not take into account the current market value.

ASSESOR:
Person who estimates the value of goods for the purpose of apportioning the sumpayable by
the underwriters to settle the claims. Also called as Surveyor.

ASSURED:
Party indemnified against 19ss by means of insurance.

BURGLARY:
It is a theft committed by breaking into or out of the premises. Evidence of breaking In, Is
necessary.

COVERAGE:
The scope of protection provided under a contract of insurance; any of several riskscovered
by a policy.

CARGO INSURANCE:
A generic term used in both inland marine and ocean marine insurance todesignate the type’s
of insurance available to provide coverage for cargo that is beingtransported by truck, rail,
air, ship, or boat.

CERTIFICATE OF INSURANCE:
A statement of coverage issued to an individual insured, specifying the insurancebenefits and
principal provisions applicable to the member.

CLAIM:
The formal request by a policyholder or a claimant for payment of loss under aninsurance
policy.

26
CO-INSURANCE:
A provision under which an insured who carries less than the stipulatedpercentage of
insurance to value, will receive a loss payment that is limited to the sameration which the
amount of insurance bears to the amount required.

COVER NOTE:
Is the document that is issued provisionary pending issuance of insurance Policy.

INDEMNITY:
Legal principle that specifies an insured should not collect more than the actualcash value of
a loss but should be restored to approximately the same financial positionas existed before the
loss.
 
INSURABLE INTEREST:
A condition in which the person applying for insurance and the person who is toreceive the
policy benefit will suffer all emotional or financial loss, if any untouchedevent occurs.
Without insurable interest, an insurance contract is invalid.

INSURANCE:
Social device for minimizing risk of uncertainty regarding loss by spreading therisk over a
large enough number of similar exposures to predict the individual chance of loss.

NET PREMIUM:
The portion of premium rate which is designed to cover benefits of the policy,excluding
expenses, contingencies and profit.

POLICY:
Is the legal document that has the conditions of the insurance contract.Premium:It is the
amount paid to secure an insurance policy.

27
SALVAGE:
Recovery made by an insurance company by the sale of property which has beentaken over
from that insured as a part of loss settlement. The remains of damaged vehicleor any other
property.

THIRD PARTY:
Any person other than the two parties signing an insurance, contract.

CHAPTER II
28
 RESEARCH METHODOLOGY

2.1 RESEACRH METHODOLOGY

A research methodology is a sample framework or a plan for study that is used as a guide for
conducting research. It is a blueprint that is followed in processing research work. Thus in
good research methodology the line of action has to be chosen carefully from various
alternatives. A research design is the arrangement of conditions for the collection of data and
analysis of data. In fact research design is the conceptual structure within which research is
conducted.
The research specifies the information required to address needed issues, designs the methods
for collecting information, manages and implements the data collection process analyzes and
communicates the finding and their implications.
The research methodology implemented in this research report primarily consists of personal
interviews with those very investors in Dharamshala city who invest through the insurance
companies in Dharamshala.

2.2 OBJECTIVE OF THE STUDY

29
The project consumer awareness towards insurance products is undertaken to achive the
following objectives:
1. To create the awareness of the insurance products in people.
2. To give buying tips to make their insurance prosper.
3. To known the investor perception towards investment in insurance fund as compare
with other investment tools.

2.3RESEARCH DESIGN
The research design refers to the overall strategy that you choose to integrate the different
components of the study in a coherent and logical way, thereby ensuring you will effectively
address the research problem it constitutes the blueprint for the collection measurement and
analysis of data.
Research design stands for advance planning of methods to be adopted for collective the
relevant data and the techniques to be used in their analysis keeping in the view the objective
of research and the availability of the time and money. Research design in the fact has a great
bearing on reliability of result arrived at.
The research study carried out is descriptive and diagnostic in nature. Descriptive research
includes surveys and fact finding and enquires of different kinds. The major purpose of these
types of research id descriptive of states of affair as it exists at present. The main
characteristics of this study method are that the researcher has no control over the variables;
he can only report what is happening.
In this research we seek to measures item like:
 Preference of people among various investment options and insurance policies
 Awareness of insurance among general public
 Behaviour patern of investors

2.4 DATA COLLECTION

] The data is of two types:
 Primary data
 Secondary data

30
Primary data are those which are collected a fresh and for the first time and thus happens to
be original in character. Secondary data are those which have already been collected by some
one else and which have been passed through the statistical process. In our research we have
used both types of data
2.4.1 COLLECTION OF PRIMARY DATA
We have collected primary data using:-
 Questionnaires
 Telephone

2.4.2 COLLECTION OF SECONDARY DATA

In our research we are using various sources of collection of published and unpublished data
with the help of fact sheets of various companies, annual reports, news bulletins and
information broachers, web sites.

2.5 SAMPLING DESIGN

After research design is made, next step is to design a sample and the sample will made after
considering the objectives of research and budgetary constrains.

2.6 SAMPLING PROCEDURE

The sample size taken in the research is 100. In our research we have used random sampling.
In the study the population from which the sample to be drawn does not constitute a
homogenous group. So, we apply stratified sampling so as to obtain representative sample.
Under the techniques, the population is stratified in to different sub population known as
strata ad sample items are selected for each stratum.

31
 CHAPTER III

DATA ANALYSIS & INTERPRETATION

32
DATA ANALYSIS & INTERPRETATION

Data analysis and interpretation is the process of inspecting, cleaning, transforming and
modeling data with the goal of discoveries useful information, suggesting conclusion and
supporting decision making.
Data interoperation is that in which we analysis the whole collected data & tries to give itin
simple words to be understandable.

3.1 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

AGE WISE

Age Group No. Of Respondent % of Respondant

Up to 30 29 29

30-40 34 34

40-50 24 24

Above 50 13 13

Total No. Of Repondent 100 100

FIG 3.1

33
 Age Group
45
40
35
30
Age Group
25
20
15
10
5
0
up to 30 30-40 40-50 Above 50

Interpreation:

The following graph depicts that 63% of the respondents below the age of 40 and the only
13% respondents are above the age 50. The indicates that young people are more aware and
conscious toward insurance policies category.

3.2 TABLE CLASSIFIACTION OF RESPONDENTS ON THE BASIS

INSURANCE POLICY

Policy No. Of Respondent % of Respondemt

Life Insurance 42 42

General Insurance 36 36

Health Insurance 22 22

FIG 3.2

34
 Policy

Life Insurance
General Insurance
Health Insurance

Interpreation :

The following graph depicts that 42% of the respondents brought life insurance policy, 36%
of the respondents are brought general insurance and only 22% of the respondents are
brought health insurance.

3.3 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS

OF EDUCATION LEVEL

Education level No. Of Respondents % of Respondents

10th level 14 14

12th level 24 24

Graduates 48 48

Post Graduates 14 14

Total 100 100

FIG 3.3

35
 Education Level
50
40
30 Education Level
20
10
0
10th level
12thlevel
Graduates
Post Graduates

Interpreation :

following graph depicts that 14% of the respondents have education till 10th and 24% of the
respondents are 12th pass, 48% respodents are graduates, 14% are post graduates. It inclides
that graducates are much concious than under gradutates.

3.4 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

OCCUPATION

OCCUPATION No. Of Respondents % of Respondents

Govt. 28 28

Private 42 42

Professional 18 18

Self Employed 12 12

Total 100 100

FIG 3.4

36
 OCCUPATION
45
40
35
30
25 OCCUPATION

20
15
10
5
0
Govt. Private Professional Self Employed

Interpreation :The following figure show that 42% of the respondents are private
employees, 28% are govt. Employees, 18% are professional and 12% are self employee it
means emoployyes are more aware towards insurance policies.

3.5 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

MARITAL STATUS

Marital Status No. of Respondents % of Respondents

Married 66 66

Single 34 34

Total 100 100

FIG 3.5

37
 Marital Status

70
60
50
40
30
20
10
0
Married
Single

Marital Status

Interpreation :It is observe that from the above table that 66% respondents are married &
34% respondents are single married persons are more aware of insurance.

3.6 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

NO. OF DEPENDENTS

Dependents No. of Respondents % of Respondents

1 32 32

2 16 16

More than 2 52 52

Total 100 100

FIG 3.6

38
 Dependents
60

50

40
Dependents
30

20

10

0
1 2 More than 2

Interpreation :It is observed that from the above table that 52% repondents have more than 2
dependents, 16% repondents have 2 depentdents and 32% have 1 dependents.

3.7 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

ANNUAL INCOME

Annual Income No. of Respondents % of Repondents

Below 100000 18 18

100000-250000 34 34

250000-500000 22 22

Above 500000 26 26

Total 100 100

FIG 3.7

39
 Annual Income
Below 100000 100000-250000 250000-500000 Above 500000

18%
26%

34%
22%

Interpreation :The following graph depicts that 34% of the respondents are in the income
level of 100000-250000, 26% respondents has got above 500000 income, 22% of respondents
comes in net annual income and rest 18% comes under below 100000 category.

3.8 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

REASON TO TAKE POLICY

Reason to take Policy No. of Respondents % of Respondents

To Cover risk 30 30

To Avoid Tax 16 16

Investment 34 34

Good Returns 20 20

Total 100 100

FIG 3.8

40
 Reason to Take Policy
40

35

30

25
Reason to Take Policy
20

15

10

0
To Cover Risk To Avoid Tax Investment Good Return

Interpreation :

It is observed that from the above table that 30 respondents take insurance policy to secure
their future, 16 respondents that take insurance to avoid tax and 34 take insurance for
investment p urpose, 20 respondents observe that it gives good return.

3.9 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS OF

POLICY CHOICE

Particular No. of Respondents % of Respondents

Term Plan 36 36

Money Back 24 24

Riders 20 20

Endowment Plan 20 20

Total 100 100

FIG 3.9

41
 Policy Choice
40
35
30
25
20 Policy Choice
15
10
5
0
Term Plan
Moey Back
Riders
Endowment Plan

Interpreation: The following figure show investor attitude towards the policy 36 respondent
wants to take term plan 24 reapondents wants to take money back 20 respondents wants to
take riders ,consumer is much crazy is taking term policy.

3.10 TABLE CLASSIFICATION OF RESPONDENTS ON THE BASIS

OF AWARENESS THROUGH

Awareness No. of Respondents % of Respondents

Friends 24 24

Agents 36 36

Advertisement 20 20

Other 20 20

Total 100 100

FIG 3.10

42
Interpretation :The following graph depicts that 36% of the respondents get knowledge
through agents in insurance, 24% respondents get knowledge through friends, and 20% get
knowledge from advertisement and other sources.

CHAPTER - IV
FINDING, CONCLUSION & SUGGESTION

43
4.1 FINDING:

Based on my analysis of data collection during my research works on

“Consumer Awareness Towards Insurance Product” I have got following
findings:

1. 63% of the respondents belong to the age group of 40 years.

2. 62% of the respondent have their education level up to college.

3. Majority of the respomdent i.e. 42% belongs to private jobs

4. 66% of the respondents are in married category

5. 52% of the respondents have more than two members as dependents

6. Maximum respondents have income level Rs. 100000-250000

7. Covering risk is the major reason to take insurance

8. Majority of the investors want to take term plans

9. Most of the respondent come to know about new companies through

agents

10.Premium offered is the main reason to choose a new company

44
4.2 CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some intresting trends which
can be seen in the above analysis. A general impression that we gathered during Data
collection was the immense awareness and knowledge among people about various
companies and their insurance products. People are beginning to look beyond SBI for their
insurance needs and are willing to trust govt. players with their hard earned money.

People in general have been impressioned by the marketing and advertising campaigns of
insurance companies. A high penetration of print , radio and Television ad campaigns over
the years is beginning to have it’s impact now.

Another heartning trend was in terms of people viewing insurance as a tax saving and
investment instrument as much as a protective one. A very high number of respondants have
opted for insurance for such purposes and it shows how insurance companies ahve been
successful to attract public money in recent times.

4.3 SUGGESTION

1. Their should be transparency in context of charges taken by insurance companies

2. Allocated of units should be clearly stated in case of ULIPS

45
3. It is advisable for the agents that they should make regular follow up with the insurer.

BIBIOGRAPHY

www.insurancemagic.com
www.investor.com/scripts/insureer.asp
www.moneyguru.com
www.delhischools.com/career/insurance.htm

46
QUESTIONNAIRE
A Study on Consumer buying behavior towards insurance with special reference to
Dharmashala, Himachal Pradesh.
Dear respondent, This questionnaire is aimed at understanding your perception about
Insurance Corporation of India .Your response will be dealt with strict confidentiality and it
will be used only for academic purpose. Thank you for spending your valuable time to fill
this questionnaire.

Name:
Gender A. Male B. Female
Contact No.

1. What is the age?

a) Up to 30 b) 30-40 years
c) 40-50 years d) Above 50

2. What is your Qualification?

a) 10th b) 12th
c) Graduate d) Post Graduate

3. What is the Occupation?

a) Private Job b) Govt. Job
c) Professional d) Self Employed

4. What is Marital Status?

a) Married b) Unmarried

47
5. What is Annual Income?
a) Below 100000 b) 100000-250000
c) 250000-500000 d) Above 500000

6. Reason to take Insurance Policy?

a) Safety c) Tax Saving
b) Investment d) Good Returns

7. Which policy more bought?

a) Life Insurance b) General Insurance
c) Health Insurance

8. Total number of policies bought

a) One b) Two
c) More than two

9. Mode of Payment
a) Monthly b) Quarterly
c) Half-Yearly d) Yearly

10. Policy would u like to prefer?

a) Term Plan b) Endowment plan
c) Riders d) Moey Back

11. What are your sources of awareness?

a) Advertisement b) Friends
c) Agents d) Other

48