A

SUMMER TRAINING REPORT

ON
COMPARATIVE STUDY
OF
MAX NEW YORK LIFE INSURANCE POLICIES
V/S
LIFE INSURANCE CORPORATION OF INDIA
AT

Submitted To:
GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY
IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
SESSION-2015-2017

Submitted to
Mrs. Megha
ASS. PROF.

Submitted by
Neha
M.B.A. 3rd sem
1511510030

SHAH SATNAM JI INSTITUTE OF TECHNOLOGY &

MANAGEMENT
SIRSA (HARYANA)
1

ACKNOWLEDGEMENT

First of fall I would like to thank the Management at MNYL for giving me the
opportunity to do my two-month project training in their esteemed organization. I express
my thanks to all Sales Managers 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.
My heartfelt thanks go to all the executives who helped me gain knowledge about the
actual
working and the processes involved in various departments

In end, my sincere thanks to all the particulars of training that extended help willingly
and made the training highly enjoyable and interesting

( Neha )

PREFACE
Lectures, class room theoretical knowledge are internal part of management study. But
training gives an opportunity to the students to expose themselves with industrial
environment which is very much different from class room teaching. Practical knowledge
is more important than theoretical knowledge.
Theoretical knowledge makes clear the fundamental concept of management but
not their application in actual practice. Correct result of the class room learning need
realties of practical situation. It enables the students to undergo those experiences which
will help them later when they join the corporate world.
I consider myself very lucky to get my summer Training in MNYL. I had
undergone weeks training in Sirsa (Hry). It really helped me to get practical knowledge
worked out into actual business environment.

STUDENT DECLARATION

I, Neha, hereby declare that the Summer Training Project Report Entitled Max New
York Life Insurance Policies v/s Life Insurance Policies submitted in the partial
fulfillment of the requirement, of Master of Business Administration to GURU
JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY
is my original work and the same has not been submitted to any other institute for the
award of any other degree and suggestion as approved by the training guide and
supervisor are duly incorporated.

(Neha)

Table of Contents
Chapter No.
Chapter 1

CONTENTS
INTRODUCTION

PAGE NO.
8

Life Insurance
What is Life Insurance ?
Life Insurance V/S Other Insurances
Who Can buy a policy?
Company Profile
Chapter 2

Chapter 3

RESEARCH
METHODOLOGY

23

Objectives of project
Research Methodology Used
Market Research Design
DATA ANALYSIS & INTERPRETATION
30
Data Processing i.e. Classification & Tabulation,
Analysis & Interpretation Of Data

Chapter 4
Chapter 5

Max New York Life Insurances v/s Life Insurance

Corporation

51

RECOMMENDATIONS
66
CONCLUSIONS
ANNEXURE
QUESTIONNAIRE
BIBLIOGRAPHY

68

Chapter: 1
INTRODUCTION

INTRODUCTION
Life Insurance
Life insurance in India made its debut well over 100 years ago.
In our country, which is one of the most populated in the world, the prominence of
insurance is not as widely understood, as it ought to be. What follows is an attempt to
acquaint readers with some of the concepts of life insurance, with special reference to
LIC.
It should, however, be clearly understood that the following content is by no means an
exhaustive description of the terms and conditions of an LIC policy or its benefits or
privileges.
For more details, please contact our branch or divisional office. Any LIC Agent will be
glad to help you choose the life insurance plan to meet your needs and render policy
servicing.
What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person assured (or
his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:

The date of maturity, or

Specified dates at periodic intervals, or

Unfortunate death, if it occurs earlier.

9

Among other things, the contract also provides for the payment of premium periodically
to the Corporation by the policyholder. Life insurance is universally acknowledged to be
an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to
the timely aid of the family in the unfortunate event of death of the breadwinner.

By and large, life insurance is civilizations partial solution to the problems caused by
death. Life insurance, in short, is concerned with two hazards that stand across the lifepath of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.
Life Insurance Vs. Other Savings

Contract of Insurance:

A contract of insurance is a contract of utmost good faith technically known as

uberrima fides. The doctrine of disclosing all material facts is embodied in this
important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the
proposal form are correctly answered. Any misrepresentation, non-disclosure or
fraud in any document leading to the acceptance of the risk would render the
insurance contract null and void.

Protection:
Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.
10

Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can
be made effortlessly because of the 'easy installments' facility built into the
scheme. (Premium payment for insurance is monthly, quarterly, half yearly or
yearly).

For example: The Salary Saving Scheme popularly known as SSS, provides a
convenient method of paying premium each month by deduction from one's
salary.

In this case the employer directly pays the deducted premium to LIC. The Salary
Saving Scheme is ideal for any institution or establishment subject to specified
terms and conditions.

Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy
that has acquired loan value. Besides, a life insurance policy is also generally
accepted as security, even for a commercial loan.

Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth
tax. This is available for amounts paid by way of premium for life insurance
subject to income tax rates in force. Assesses can also avail of provisions in the
law for tax relief. In such cases the assured in effect pays a lower premium for
insurance than otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can be
11

effectively used to meet certain monetary needs that may arise from time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs for
cash over a stretch of time can be less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of one's retirement
from service and used for any specific purpose, such as, purchase of a house or for
other investments. Also, loans are granted to policyholders for house building or for
purchase of flats (subject to certain conditions).

Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid contract can
insure himself/herself and those in whom he/she has

insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's spouse or
children. While underwriting proposals, certain factors such as the policyholders state of
health, the proponent's income and other relevant factors are considered by the
Corporation.
Insurance For Women

Prior to nationalization (1956), many private insurance companies would offer insurance
to female lives with some extra premium or on restrictive conditions. However, after
nationalization of life insurance, the terms under which life insurance is granted to female
lives have been reviewed from time-to-time.
At present, women who work and earn an income are treated at par with men. In other
cases, a restrictive clause is imposed, only if the age of the female is up to 30 years and if
she does not have an income attracting Income Tax.

12

Medical And Non-Medical Schemes

Life insurance is normally offered after a medical examination of the life to be assured.
However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC
has been extending insurance cover without any medical examination, subject to certain
conditions.
With Profit And Without Profit Plans

An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if
any, after periodical valuations are allotted to the policy and are payable along with the
contracted amount.

In 'without' profit plan the contracted amount is paid without any addition. The premium
rate charged for a 'with' profit policy is therefore higher than for a 'without' profit policy.

13

Company Profile of MAX New York Life Insurance

Company
Max New York Life Insurance Company Ltd. is a joint venture
between New York Life, a Fortune 100 company and Max India
Limited, one of India's leading multi-business corporations. The
company has positioned itself on the quality platform. In line with its vision to be the
most admired life insurance company in India, it has developed a strong corporate
governance model based on the core values of excellence, honesty, knowledge, caring,
integrity and teamwork. The strategy is to establish itself as a trusted life insurance
specialist through a quality approach to business.
Max New York Life is the first life insurance company in India to be awarded the IS0
9001:2000 certifications.
Max New York Life was among the top 25 companies to work with in India, according to
2003 Business World magazine, "Great Workplaces In India", Max New York Life was
ranked at the 20th position. This survey is the local version of the "Great Places To Work"
survey carried out every year in 22 countries.
14

It is among top five most respected private life insurance companies in India according to
a 2004 Business World survey.

Financial Strength
In line with its values of financial responsibility, Max New York Life has adopted prudent
financial practices to ensure safety of policyholder's funds. The Company's paid up
capital is Rs. 587 crore, which is more than the norm laid down by IRDA.

Type of Products Offered

Max New York Life offers a suite of flexible products. It now has 22 life insurance
products and 8 riders that can be customized to over 400 combinations enabling
customers to choose the policy that best fits their need. The basic categories are:
Distribution System
Max New York Life has identified individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process, which
comprises four stages - screening, psychometric test, career seminar and final interview.
The agent advisors are trained in-house to ensure optimal control on quality of training.
Max New York Life invests significantly in its training programme and each agent is
trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA
15

before beginning to sell in the marketplace. Training is a continuous process for agents at
Max New York Life and ensures development of skills and knowledge through a
structured programme spread over 500 hours in two years. This focus on continuous
quality training has resulted in the company having amongst the highest agent pass rate in
IRDA examinations and the agents have the highest productivity among private life
insurers.
201 agent advisors have qualified for the Million Dollar Round Table (MDRT)
membership in 2005. MDRT is an exclusive congregation of the worlds top selling
insurance agents and is internationally recognized as the standard of excellence in the life
insurance business.
Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further grow its
business. The company is using a five-pronged strategy to pursue alternative channels of
distribution. These include:

franchisee model
Rural Business
Direct sales force involving group insurance
Telemarketing Opportunities

Vision/Mission
Vision
To become the most admired life insurance Company in India.
16

 Values
This vision to become India's most admired life insurance company will be realized
through its unique set of values, which are as follows:
Caring
Max New York Life is redefining the life insurance paradigm by focusing on customers
first. The service process is responsive, personalized, humane and empathetic. Every
individual who represents the company is for us MNYL brand champion.
Honesty
Honesty is the heart of the life insurance business. It is all about trust. Transparency,
integrity and dependability form the cornerstones of the Max New York Life experience.
Excellence
Excellence at Max New York Life implies the ability to perform at a consistently high
level. Focused on the value of continuous improvement in people, processes and the
organization, the company strives for the highest standards of quality in every aspect of
its business.

Mission
Become one of the top quartile life insurance companies in India
Be a national player
Be the brand of first choice
Be the employer of choice
Become principal of choice for agents

COMPANY PROFILE OF LIFE INSURANCE CORPORATION

17

Brief History of Insurance

The story of insurance is probably as old as the story of mankind.
The same instinct that prompts modern businessmen today to
secure themselves against loss and disaster existed in primitive
men also. They too sought to avert the evil consequences of fire and flood and loss of life
and were willing to make some sort of sacrifice in order to achieve security. Though the
concept of insurance is largely a development of the recent past, particularly after the
industrial era past few centuries yet its beginnings date back almost 6000 years.
Life Insurance in its modern form came to India from England in the year 1818. Oriental
Life Insurance Company started by Europeans in Calcutta was the first life insurance
company on Indian Soil. All the insurance companies established during that period were
brought up with the purpose of looking after the needs of European community and
Indian natives were not being insured by these companies. However, later with the efforts
of eminent people like Babu Muttylal Seal, the foreign life insurance companies started
insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy
extra premiums were being charged on them.

Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance
company in the year 1870, and covered Indian lives at normal rates. Starting as Indian
enterprise with highly patriotic motives, insurance companies came into existence to
carry the message of insurance and social security through insurance to various sectors of
society. Bharat Insurance Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance
companies.
The United India in Madras, National Indian and National Insurance in Calcutta and the
Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Cooperative Insurance Company took its birth in one of the rooms of the Jorasanko, house
18

of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General
Assurance and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to regulate
insurance business. In the year 1912, the Life Insurance Companies Act, and the
Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it
necessary that the premium rate tables and periodical valuations of companies should be
certified by an actuary. But the Act discriminated between foreign and Indian companies
on many accounts, putting the Indian companies at a disadvantage.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long term contracts
and during the currency of the policy it requires a variety of services need was felt in the
later years to expand the operations and place a branch office at each district headquarter.
Re-organization of LIC took place and large numbers of new branch offices were opened.
As a result of re-organization servicing functions were transferred to the branches, and
branches were made accounting units. It worked wonders with the performance of the
corporation.
It may be seen that from about 200.00 crores of New Business in 1957 the corporation
crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to
cross 2000.00 crore mark of new business. But with re-organization happening in the
early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new
policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional offices,
7 zonal offices and the corporate office. LICs Wide Area Network covers 100 divisional
offices and connects all the branches through a Metro Area Network. LIC has tied up
with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LICs ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centres have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New
Delhi, Pune and many other cities. With a vision of providing easy access to its
19

policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices
are smaller, leaner and closer to the customer. The digitalized records of the satellite
offices will facilitate anywhere servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian
insurance and is moving fast on a new growth trajectory surpassing its own past records.
LIC has issued over one crore policies during the current year. It has crossed the
milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives
which inspired our forefathers to bring insurance into existence in this country inspire us
at LIC to take this message of protection to light the lamps of security in as many homes
as possible and to help the people in providing security to their families.

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

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil
started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company
started its business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate
the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the
objective of protecting the interests of the insuring public.
20

1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to the
Triton Insurance Company Ltd., the first general insurance company established in the
year 1850 in Calcutta by the British.

OBJECTIVES

Spread Life Insurance widely and in particular to the rural areas and to the socially
and economically backward classes with a view to reaching all insurable persons in
the country and providing them adequate financial cover against death at a reasonable
cost.

Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as
a whole.

Mission/ Vision
Mission:- Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering resources for
economic development."
Vision:-"A trans-nationally competitive financial conglomerate of significance to societies and Pride
of India."

21

OPERATIONS

22

23

CHAPTER: 2
RESEARCH
METHODOLOGY

RESERACH METHODLOGY
OBJECTIVE OF THE PROJECT
24

The project titled Comparative study of MNYL Policies with LIC Policies has been
prepared keeping in mind the current scenario in the insurance environment. This is done
to not only know the contrast between a government company and a private company but
also to base it with the help of primary data. It could be:
To know about comparison is done between a public sector company and a
private sector company.
To know about introduction regarding the working of both the organizations is
given such that the reader can better understand the companies.
To know about study based on the primary data has been conducted to know
the exact ground reality.
To know about findings of the project are classified with the help of statistical
tools such as pie charts and bar graphs.
Findings have been analyzed and conclusions are drawn which help in future in decision
making process.

RESEARCH METHODOLOGY USED

25

After specifying the objective of research it becomes essential to make an efficient plan
for gathering the needed information
Market research involves the following steps:
Step 1: Define the research objective
After discussing with the external project guide the topic for the project was selected as:
Product analysis of LIC and Max New York Life Insurance in insurance industry
Step 2: Developing the research plan
Questionnaire method
Marketing researchers have the best instrument in collecting primary data i.e. a
questionnaire to collect the data and to establish the view of the people from all the
sectors of the society.
Questionnaires are designed to elicit information that meets the studies requirements.
Questions should be:
o

clear

easy to understand

Directed towards meeting an objective.

The questionnaire designed for this project contains open-ended questions. All the
questions are clearly defined. The questions are framed keeping in mind the objective of
research and kind of information required .Sampling method
To select representative units from a total population. A population "universe", all
elements, units or individuals that are of interest to researchers for a specific study. IE all

26

registered voters for an election. Sampling procedures are used in studying the likelihood
of events based on assumptions about the future.
Random sampling is selected as the sampling method for this project.
Selection Method
o Mail-wide area, limited funds, need incentive to return the questionnaire
Mail panels, consumer purchase diaries. Must include a cover letter to
explain survey!!
o Telephone-speed, immediate reaction is negative, WATS, computer
assisted telephone interviewing.
o Personal interviews-flexibility, increased information, non-response can be
explored. Most favored method among those surveyed. Can be conducted
in shopping malls.
o In home (door-to-door) interview, get more information but it is costly and
getting harder to accomplish.
o Mall intercepts-interview a % of people passing a certain point. Almost
half of major consumer goods and services orgs. use this technique as a
major expenditure. Can use demonstration, gauge visual reactions.
Regarding social behavior, mall surveys get a more honest response than
telephone surveys. There is a bias toward those that spend a lot of time in
malls. Need to weight for this. Focus groups-observe group interaction
when members are exposed to an idea or concept, informal, less
structured. Consumer attitudes, behaviors, lifestyles, needs and desires can
be explored in a flexible and creative manner. Questions are open ended.
Cadillac used this method to determine that they should be promoting
safety features.

27

Contact/Observation method
Record overt behavior, note physical conditions and events. Can be combined with
interviews, i.e. get demographic variables.
Mechanical observation devices, IE cameras, eye movement recorders, scanner
technology, Nielsen techniques for media.
Observation avoids the central problem of survey methods, motivating respondents to
state their true feelings or opinions. If this is the only method, then there is no data
indicating the causal relationships.

Step 3: Collection of information

The information of the project was gathered in 2 forms:
Primary data
In primary data collection, you collect the data yourself using methods such as interviews
and questionnaires. The key point here is that the data you collect is unique to you and
your research and, until you publish, no one else has access to it.
There are many methods of collecting primary data and the main methods include:

Questionnaires

Interviews

Observation

Case-Studies
28

 Secondary data
Secondary data - collected by others to be "re-used" by the researcher.

What Form Does Secondary Data Take?

o

Qualitative Sources

Sources for Qualitative Research:

Newspapers - public interest & opinion

Novels & Literature In General Handbooks, Policy Statements,

Planning Documents, Reports, Historical & Official Documents
(Hansard, Royal Commission reports)

Quantitative Sources

Published Statistics:

National Government Sources

Local Government Sources

Other Sources

Non-Published / Electronic Sources

Data Archives e.g. the Data Archive At Essex

On-Line Access To National Computing Centers

International Sources on Internet & Web

29

For this project the secondary sources used are:

Journals

Company product brouchers

Internet

Step 4: Data Analysis

The analysis was conducted by editing and coding the data. Coding was done in the form
of tabulation and editing was done by reviewing the questions
.
Step 5: Present the findings
The findings of the project are the presented along with the recommendations.

Research Design
Research

Descriptive type

Data Source

Primary & secondary

Research approach

Survey method

Research instrument

Questionnaire

Type of questions

Closed ended

Sample sizes

80 samples

1. Male

: 55 , Female: 25

2. 24 people were of 15 to 25 year, 44 people were of 25 to 40 year and 12 people

were more than of 40 year.
3.

Earning per month

Mode of collecting data

Collection

Rs 15000 to 30000
Respondents to be
Chosen randomly.

30

31

Chapter: 3
DATA ANALYSIS
&
INTERPRETATION

DATA ANALYSIS AND INTERPRETATION

32

Q1. Do you have a policy of MNYL?

Yes
No

Chart 3.6
Interpretation
Yes around 72.5% peoples are having their policies in LIC.

Q2. Which policy you have?

33

 New Janaraksha plan

Jeevan Anand policy
Endowment Assurance policy
Other

Respondents

Policy of LIC
35
30
25
20
15
10
5
0

32

28
18

12

LIC

Chart 3.7
Interpretation
Endowment assurance policy is the most popular policy in the market.

34

Q3. If other then which policy does you have?

Child policy
Group policy
Joint policy

Chart 3.8
Interpretation
Child policy is the most preferred policy.

35

Q1. Are you aware of Life Insurance Corporation?

Yes
No

Awareness about LIC

72

100
75
Respondents
50
25

0
1

2
LIC

Chart 3.1
Interpretation

90%people know Life Insurance Corporation whereas 10% people are still
unaware.

36

Q2. What kind of products do you think Life Insurance Corporation provides?
Individual life insurance
Group insurance
Children policy
Retirement benefits
All of the above

Chart 3.2
Interpretation
Mostly people think that LIC provide individual life insurance products their in
Market

37

Q3. Have you ever been solicited by life insurance corporation advisor?
Yes
No

Solicitation by LIC Agent

11

1
2

69

Chart 3.3
Interpretation
Yes the people are being solicited by LIC advisor.

38

Q4. How would you rate

Life Insurance Corporation against other companies?
Below par
At par
Above par

Performance of LIC
50

44

Respondents
40
30

20

20
10

0
1

LIC

Chart 3.4

Interpretation
39

 LIC being the superior power in the market as around 56% are being ruled by
the LIC.

40

Q5.
Rate Life Insurance Corporation on a scale of 5?
Future Generali
HDFC Standard
LIC
Max New York
Metlife

Chart 3.5
Interpretation
Life insurance corporation has been rated at three.

41

Q6. Do you have a policy of Life Insurance Corporation?

Yes
No

Chart 3.6
Interpretation
Yes around 72.5% peoples are having their policies in LIC.

42

Q7. Which policy you have?

New Janaraksha plan
Jeevan Anand policy
Endowment Assurance policy
Other

Chart 3.7
Interpretation
Endowment assurance policy is the most popular policy in the market.

43

Q8. If other then which policy does you have?

Child policy
Group policy
Joint policy

Chart 3.8
Interpretation
Child policy is the most preferred policy.

44

Q9. Are you satisfied with the product?

Yes
No

20

60

Chart 3.9
Interpretation
45

 75% people are satisfied with the products

46

Q10.
What distinguishing feature do you find in Life Insurance corporation products?
Better service
Individual attention
Claim settlement
Superior products

Chart 3.10
Interpretation
LIC Products are more superior to any other competitive products.

47

Q11. Do you know the following?

LIC is a governmental organization
LIC has tied up with some Banks and Service providers to offer online premium collection facility in selected cities
LICs ECS and ATM premium payment facility is an addition to
customer convenience
LIC has launched its SATELLITE SAMPARK offices with a vision of
providing easy access to its policyholders
LIC has crossed the milestone of issuing 1,01,32,955 new policies by
15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.

Chart 3.11
Interpretation
48

 LIC is the Government Organization

RECOMMENDATIONS
1) MNYL should be made educated about the importance of life insurance.
2) MNYL should be motivated to go for life insurance.
3) Both the companies should try to make cordial relations with their customers.
4) Both the companies should reduce premium amount.
5) More and more different kind of life insurance policies should be introduced to
satisfy their customers and so that maximum people get life insurance cover.
6) Both the companies should increase the claim amount.
7) MNYL should emphasize on advertising its name, as very few people are aware
of it in comparison to LIC.
8) Better customer services should be provided by both the companies

49

FINDINGS
Points in Favors of MNYL
Good Market penetration
As seen from the data obtained MNYL has good marker penetration for a
relatively new company with more than 60% of people having its policy.
Satisfactory Knowledge about product
Knowledge about MNYL product is quite good in the market with a majority
telling about the products offered by MNYL.
Majority of Policyholders satisfied
More than 90% of policyholders are satisfied with the product, a phenomena
which augurs well for the company.
Advisor good at convincing People
Advisors presentation is one of the clinching factors while deciding the policy. A
point which again vindicate the advisors.
Chances of new prospects HIGH
Both the existing and non-existing policyholders are showing a keen interest in
the company.
Those who dont have policy majority cited Already have one as reason.

50

This shows that supposed or actual inferiority of MNYL product do not have a big
hand in people selecting other policy over MNYL.
(49)
Even those who dont have policy would like to be our customer.
A welcoming trend which means that there are chances of increased customer
base for MNYL
Conclusion of MNYL
MNYL has market penetration and awareness about it is high in the market.
But it can take following steps to even better itself:
Increase number of people solicited by MNYL
Since MNYL is a new company it should strive to increase its solicitation rate.
Create awareness in people about high quality standards which MNYL
possess.
People should be made aware of the high quality standards adopted by the
MNYL, especially that the fact that it is the only company authorized by
IRDA to have in-house training for aspiring advisors.
Popularize Group Policy.
Group policy must be advertised as awareness about it is quite less among
people.
Give personal attention to customer.
Personal attention must be provided to all as it is cited as one of the
deficiencies of MNYL.
Advertise about MNYL special feature.
51

MNYL special features should be well advertised to ensure that people know
what set MNYL apart from its competitors.

Analysis of Data
Points in favor of LIC
Market awareness
High market awareness is seen, with over 92% of population aware of LIC. This shows
strong brand presence in the market.
Knowledge of product
A majority of population is aware of LIC product. This gives an advantage to the LIC as
it will be much easier to pitch for its product.
Rating above average
A majority of the population has rated LIC as an above average company.
Marker penetration
About 75% of the population is a policyholder of the LIC which shows its high market
penetration.
Endowment policy
LICs endowment policy is most popular which shows that it is the product for the future.
Superior products
LIC products are rated as Superior by the respondents.
52

 Prospective customer
Most of the respondents who do not have the LIC policy are willing to buy a policy from
the LIC.

53

Points against LIC

Inexact knowledge of product
Knowledge of the LIC product is still inexact with low awareness of the range of
products offered by the LIC.
Ranked At Par
LIC is ranked At Par which is bad performance for a company with about 50 years
experience.
Average market penetration
Market penetration though appreciable is still less for a company like LIC.
Low rating on Service & Claim settlement
Service & Claim settlement, two of the most important activities are rated low by the
customers.
Low Awareness of LIC special features
Both policyholders and non policyholders have no or low knowledge about the special
features of the LIC
Conclusion of LIC
Though LIC has shown that it has shown good performance following points will help
LIC:
Increased knowledge about products
Knowledge about the LIC products should be increased to enable that the prospective
customers are well aware of all the policies provided by the LIC.

54

 Higher market penetration

LIC has high market penetration which can be used to leverage the market and prospects
of LIC.
Greater focus on customer satisfaction
Customer satisfaction should be paid attention as it has been listed as a reason for low
customer satisfaction.
Better claim settlement
Claim settlement process should be speed up to ensure that LIC fulfill its moral and legal
obligation.
Advantage of strong Brand Presence
LIC has a strong Brand Presence which will help it in creating a distinct identity in the
market.
Strong Network
LIC has a strong network of agents who are working very well and are helping in
increasing the customer base.

55

Chapter: 4
Max New York Life
Insurance v/s Life
Insurance
Corporation

56

MNYL Policies V/S LIC Policies

1. Whole life participating policy
Whole Life Participating Policy provides an insurance cover that is guaranteed for
your entire life. This policy also builds cash value, which you can use during your
lifetime to fund any unforeseen needs either by surrendering accumulated PUAs
(explained below) or taking a loan. In addition this policy is also eligible for bonuses.
Key Benefits
On death of life insured: Sum Assured plus accrued bonuses
On Maturity (attaining age 100): Sum Assured plus accrued bonuses
Bonus: From 3rd policy year, we will declare bonuses every year
Tax benefits:
You are entitled to the following tax benefits under Income Tax Act 1961.

Your DD rider premiums are eligible for an additional deduction u/s 80D up to
Rs.10, 000/- every year.

Your claim amounts (from death, through surrenders or on maturity) are eligible
for tax exemption u/s 10(10D).

They offer you the flexibility to enhance the value of your policy by using the
following riders/options:

57

Option to Participate in Progressive Bonuses: Allows you to top up your

premiums to purchase additional Sum Assured in your existing policy. It also
generates further bonuses.

Dread Disease (DD) Rider: Pays a lump sum amount in case you contract any of
the ten diseases covered e.g. Heart Attack, Cancer, etc.

Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in

case of death or disability caused by an accident.

Term / Term R&C Riders: Offers additional Sum Assured to match your
changing needs. The R&C also allows you the freedom to buy a fresh insurance
plan later in your life.

Guaranteed Insurability Option (GIO) Rider: Allows you to buy guaranteed

additional insurance at seven different stages in your life.

Unique features in this policy:

Cash Bonuses: You can use your bonuses in the following ways:

Pay your premiums: bonus will be used to pay the next premium.

Increase your Sum Assured: bonus will be used to buy additional layers of
insurance cover in the

existing policy by buying Paid up Additions (PUA).

Purchase term insurance: bonus will be used to purchase additional coverage valid
for one year.

Terminal Illness Benefit: Pays 50% of Sum Assured (subject to maximum of

Rs. 5,00,000/-) to you in case you are diagnosed to be suffering from a terminal
illness that can lead to death in 6 months; you can use this money for your

58

treatment. The balance of the sum assured and the bonuses will be payable to
your family on the occurrence of the Insured Event.
Non Forfeiture Options: In case you are unable to pay your premiums, your
policy will lapse and we will utilize your cash value to buy you insurance
coverage in one of the following ways:

Reduced Paid Up: A lower Sum Assured for the remaining term of your policy.

Extended Term Insurance: The same Sum Assured for part of the remaining term
of your policy.

2.New Janaraksha Plan

Features
a.) Product summary:
This is an Endowment Assurance plan that provides financial protection against
death

throughout

the

term

of

plan.

It

pays

the

maturity

amount

on

survival to the end of the term.

b.) Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary
deductions, as opted by you, throughout the term of the policy or earlier death. After at
least two full years premiums have been paid, full insurance cover is available even
when

premiums

are

not

paid

for

up

to

three

years.

c.) Bonuses:
This is a with-profit plan and participates in the profits of the Corporations life
insurance business. It gets a share of the profits in the form of bonuses. Simple
Reversionary Bonuses are declared per thousand Sum Assured annually at the end of
each financial year. Once declared, they form part of the guaranteed benefits of the plan.
Final (Additional) Bonus may also be payable provided a policy has run for certain
minimum period.
59

Benefits
1. Death Benefit:
The Sum assured plus all bonuses to date is payable in a lump sum upon the
death of the life assured during the policy term.
2. Accident Benefit:
The Sum assured (subject to a limit of Rs.5 lakhs) is payable in a lump sum on
accidental death of the life assured during the policy term. In case of permanent
disability of the life assured due to accident during the policy term, this benefit is
payable in installments.
3. Maturity Benefit:
The Sum Assured plus all bonuses declared up to maturity date is payable in a
lump sum on survival to the end of the policy term.
4. Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
5. Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender
value will be available under the plan on earlier termination of the contract.
6. Guaranteed Surrender Value:
The policy may be surrendered after it has been in force for 3 years or more.
The guaranteed surrender value is 30% of the basic premiums paid excluding the
first years premium.
7. Corporations policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value which is either
equal to or more than the Guaranteed Surrender Value. The benefit payable on

60

surrender reflects the discounted value of the reduced claim amount that would
be payable on death or at maturity.
Comparison between Whole Life Participating Policy and New Janraksha Plan
Whole life Participating Policy

New Janraksha Policy

1. Provides Insurance cover and terminal

1. Endowment Plan

illness benefit

2. Builds cash value which can be used

2. Provide protection for a limited period

during life time to fund any need either

through

surrendering

accumulated

PUA or taking a loan.

3. Eligible for bonus after 3 years.

3. Pays at the end of term or death

whichever is earlier

4. Income tax concession available

4. Profit participation through bonuses

which are not available in hand but is
added in the sum assured

5. Increase in sum assured available

5. Accident benefit

6. Riders:

6. Guaranteed surrender value

Dreaded disease rider

Personal accident benefit rider
Waiver of premium
Term / Term R&C Riders
Guaranteed Insurability Option (GIO)
Rider
61

 Option to Participate in Progressive

Bonuses

2. Life Partner Plus

Life Partner PlusTM Plan offers you powerful triple benefits of

Money if you live i.e. maturity benefit at age 75

Money if you don't i.e. a Life Insurance coverage till age 75

Money Backs i.e. a part of the Sum Assured at regular intervals to take care of
your periodic foreseen needs.

Key Benefits
On death of life insured: Initial Sum Assured Plus Sum Assured of Paid Up
Additions through bonuses
On survival: Money backs @ 7.5% of the Initial Sum Assured will be paid on each
policy anniversary from age 61 to 75.
On maturity: 100% of Sum Assured with Sum Assured of Paid Up Additions, if
any.
On Surrender of Policy: Surrender value.
Limited Premium Payment term: You can choose to pay the premiums over 4
terms i.e. 3 years, 7 years, 10 years or 20 years.
Bonus: From 3rd policy year, we will declare bonuses every year.
Tax benefits:
62

You are entitled to the following tax benefits under Income Tax Act 1961:

Your premiums are eligible for deduction u/s 80C up to Rs.100,

000/- every year.

Your DD rider premiums are eligible for an additional deduction u/s

80D up to Rs.10, 000/- every year.

Your claim amounts (from death, on maturity, or Money Backs or

through surrenders) are eligible for tax exemption u/s 10(10D).

Customize your policy to meet your specific needs:

They offer you the flexibility to enhance the value of your policy by using the following
riders/options:
1. Dread Disease (DD) Rider: Pays a lump sum amount in case you contract any
of the ten diseases covered e.g. Heart Attack, Cancer, etc.
2. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage
in case of death or disability caused by an accident.
3. Term / Term R&C Riders: Offers additional Sum Assured to match your
changing needs. The R&C also allows you the freedom to buy a fresh insurance
plan later in your life.
4. Waiver of Premium (WOP) / Pay or Riders: Waives your future premiums in
case you suffer total disability. The pay or rider waives future premiums on
your childs policy in case you suffer total disability.

Unique features in this policy

63

 Cash Bonuses: You can use your bonuses in the following ways:
Withdraw

in cash: bonus will be paid to you by cheque.

Pay your

premiums: bonus will be used to pay the next premium.

Increase

your Sum Assured: bonus will be used to buy additional layers of

insurance cover in the existing policy by buying Paid Up Additions (PUA).

Terminal Illness Benefit: Pays 50% of Sum Assured (subject to maximum of Rs.
5,00,000/-) to you in case you are diagnosed to be suffering from a terminal
illness that can lead to death in 6 months; you can use this money for your
treatment. The balance of the sum assured and the bonuses will be payable to your
family on the occurrence of the Insured Event.
Non Forfeiture Options: In case you are unable to pay your premiums, your
policy will lapse and we will utilize your cash value to buy you insurance
coverage in one of the following ways:
Reduced

Paid Up: A lower Sum Assured for the remaining term of your policy.

Extended

Term Insurance: The same Sum Assured for part of the remaining term

of your policy.
Jeevan Anand Policy
Features
a.) Product summary:
This plan is a combination of Endowment Assurance and Whole Life plans. It provides
financial protection against death throughout the lifetime of the life assured with the
provision of payment of a lump sum at the end of the selected term in case of his
survival.
b.) Premium:
64

Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions
as opted by you throughout the selected term of the policy or till earlier death.
c.) Bonuses:
This is a with-profit plan and participates in the profits of the corporations life insurance
business. It gets a share of the profits in the form of bonuses. Simple Reversionary
Bonuses are declared per thousand Sum Assured annually at the end of each financial
year. Once declared, they form part of the guaranteed benefits of the plan. Bonuses will
be added during the selected term or till death, if it occurs earlier.
Benefits
1. Benefits in case of death during the selected term: The Sum Assured along
with the vested bonuses is payable on death in a lump sum.
2. Benefits in case of survival to the end of selected term: The Sum Assured
along with the vested bonuses is payable in a lump sum on survival to the end
of the term. An additional Sum Assured is payable on death thereafter.
3. Accident Benefit:
An additional Sum Assured (subject to a limit of Rs.5 lakh) is payable in a
lump sum on death due to accident up to age 70 of life assured. In case of
permanent disability of the life assured due to accident this additional Sum
assured is payable in installments.
4. Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra
protection/option. An additional premium is required to be paid for these
benefits.
5. Surrender Value:
Buying a life insurance contract is a long-term commitment. However,
surrender values are available on the plan on earlier termination of the contract.
65

6. Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or more.
The guaranteed surrender value is 30% of the basic premiums paid excluding
the first years premium. Any extra premium(s) paid and premium(s) towards
Accident Benefit are also excluded.
7. Corporations policy on surrenders:
In practice, the Corporation will pay a Special Surrender Value which is
either equal to or more than the Guaranteed Surrender Value. The benefit
payable on surrender reflects the discounted value of the reduced claim amount
that would be payable on death or at maturity.

Comparison between Life Partner Plus and Jeevan Anand

Life Partner Plus
1. Provide life protection

Jeevan Anand
1. Combination

of

endowment

and

whole life policy

2. Money at maturity (Age: 75 years)

2. Bonus added to the sum assured.

or at death whichever is earlier

3. Money back at regular intervals

3. Benefit at the time of maturity or at

death whichever is earlier.

4. Money of sum assured available

from the age of 61 years, payable

4. Payment of some amount at the time

of death after maturity.

till the age of 75 years.

66

5. Riders:

5. Accident benefit

Dreaded disease rider

Personal

accident

benefit

rider

Waiver of premium

Term / Term R&C Riders

Guaranteed

Insurability

Option (GIO) Rider

Option to Participate in
Progressive Bonuses

6. Bonus to be paid after 3 years.

6. Guaranteed surrender value

67

Life Pay Money Back Plan (Participating) Policy

Life Pay Money Back Plan (Participating) Policy will keep paying you a part of the Sum
Assured at regular intervals, to take care of your periodic foreseen needs, and the balance
keeps growing to take care of your long term saving needs, as well as provides insurance
coverage till maturity. In addition this policy is also eligible for bonuses.
Key Benefits
On death of life insured: Sum Assured plus Sum Assured of Paid Up Additions
(without deducting any money back installments, if already paid).
On maturity: Sum Assured less money backs already paid plus 10% of SA as
guaranteed addition plus accrued bonuses.
Bonus: From 3rd policy year, we will declare bonuses every year.
Tax benefits:

You are entitled to the following tax benefits under Income Tax Act
1961:

Your premiums are eligible for deduction u/s 80C up to Rs.100,

000/- every year.

Your DD rider premiums are eligible for an additional deduction u/s

80D up to Rs.10, 000/- every year.

Your claim amounts (from death, through surrenders or on maturity)

are eligible for tax exemption u/s 10(10D).

Unique features in this policy:

Cash Bonuses: You can use your bonuses in the following ways:
Withdraw

in cash: bonus will be paid to you by cheque.

68

 Pay your

premiums: bonus will be used to pay the next premium.

Increase

your Sum Assured: bonus will be used to buy additional layers of

insurance cover in the existing policy by buying Paid Up Additions (PUA).

Non Forfeiture Options: In case you are unable to pay your premiums, your
policy will lapse and we will utilize your cash value to buy you insurance
coverage in one of the following ways:
Reduced

Paid Up: A lower Sum Assured for the remaining term of your policy.

Extended

Term Insurance: The same Sum Assured for part of the remaining term

of your policy.
In case you do not want either of the above, you can choose to take the cash value by
cheque.
6.Endowment Assurance Policies

Features

Moderate Premiums

High bonus

High liquidity

Savings oriented.

This policy not only makes provisions for the family of the Life Assured in event of his
early death but also assures a lump sum at a desired age. The lump sum can be reinvested
to provide an annuity during the remainder of his life or in any other way considered
suitable at that time. Premiums are usually payable for the selected term of years or until
death if it occurs during the term period.

69

Suitable For:
Being an endowment assurance policy, this plan is apt for people of all ages and social
groups who wish to protect their families from a financial setback that may occur owing
to their demise.
Benefits
Disability Benefit:
In case policy holder becomes totally and permanently disabled due to an accident
before reaching the age of 70 and the policy is in full force, he will not be
required to pay further premiums, (the Disability Benefit is available in respect of
the first Rs.20, 000 sum assured on any one life) and the policy will continue to be
in force.
Accident Benefit:
By paying a small extra premium of Rs.1 per Rs.1000/- sum assured per year he
or his family are entitled to the following benefits on death or permanent
disability caused by accident. Even students above the age of 18 years can avail of
this benefit.
Premium Stoppage: If payment of premiums ceases after at least THREE years'
premiums have been paid , a free paid-up policy for a reduced sum assured will be
automatically secured provided the reduced sum assured, exclusive of any
attached bonus, is not less than Rs. 250/-. The reduced sum assured will become
payable on the event as stipulated in the policy.
Bonus:
Is there anything extra payable besides the sum assured at the time of claim
settlement? Yes, but only if it is a with profits policy. Every year the Life
Insurance Corporation distributes its surplus among policyholder to with profits

70

polices in the form of bonuses. Substantial bonuses have been declared in the past
after each valuation of policy liabilities.

Comparison between Life Pay Money Back and Endowment Assurance

Policies
Life pay money back policy

Endowment assurance policy

1. Pay a part of sum assured at regular

intervals

and

the

rest

keep

1. Endowment policy and bonuses

available for with profit policy

accumulating to pay at the end

2. Policy is eligible for bonuses

2. Payment of premium limited up to

a certain period

3. In case of death full benefits

3. Suitable for all people of all ages

irrespective of sum paid before

4. Income tax benefits

4. Disability benefit

5. Riders:

5. Accident benefit

Dreaded disease rider

Personal accident benefit rider

Waiver of premium

Term / Term R&C Riders

Guaranteed

Insurability

Option

(GIO) Rider

Option to Participate in Progressive

Bonuses
71

6. Benefit

of

deferred

premium

payment

CHAPTER-5
RECOMMENDATION

72

RECOMMENDATIONS
1.MNYL should be made educated about the importance of life insurance.
2.MNYL should be motivated to go for life insurance.
3.Both the companies should try to make cordial relations with their customers.
4.Both the companies should reduce premium amount.
5.More and more different kind of life insurance policies should be introduced to satisfy
their customers and so that maximum people get life insurance cover.
6.Both the companies should increase the claim amount.
7. MNYL should emphasize on advertising its name, as very few people are aware of it in
comparison to LIC.
8.Better customer services should be provided by both the companies

73

CONCLUSIONS
ANNEXURE
QUESTIONNAIRE
BIBLIOGRAPHY

74

CONCLUSIONS
After analyzing and interpreting we come to a conclusion that:
1) Customer is more aware about LIC than MNYL.
2) The comparative study which we have done tells that LIC is the more trusted one
and 80% of upper class and 50% of middle class them feel that L1C is the one
which can provide them good and handsome returns.
3) Most of the people havent heard about MNYL, this can be because of less effort
on advertising. The most important part of a marketing mix is advertising and if
this is not done properly then chances are there that no body would come to know
about you and you will not be able to compete with your competitor .
4) Then we saw that comparability on the basis of the amount of premium. In this
also LIC takes over MNYL because the premium amount of LIC is much lower
than that of MNYL. In my opinion premium amount must be that much which a
person could pay easily and also should not be a burden on the people. So
everybody feels that MNYLs premium amount is much higher than that of LIC.
5) LIC is the most reliable, preferable and the more trusted company and it has the
maximum market share around 80%.
6) 60% of middle class people are more aware about LIC where as 20%of middle
class are more aware about MNYL.

75

ANNEXURE
QUESTIONNAIRE

Q1. Are you aware of Life Insurance Corporation?

Yes
No
Q2. What kind of products do you think Life Insurance Corporation provides?
Individual life insurance
Group insurance
Children policy
Retirement benefits
All of the above
Q3. Have you ever been solicited by life insurance corporation advisor?
Yes
No
Q4. How would you rate Life Insurance Corporation against other companies?
Below par
76

 At par
Above par

Q5. Rate Life Insurance Corporation on a scale of 5?

Future Generali
HDFC Standard
LIC
Max New York
Metlife

Q6. Do you have a policy of Life Insurance Corporation?

Yes
No

For those who have answer YES to Q6

Q7. What policy you have?
New Janaraksha plan
Jeevan Anand policy
Endowment Assurance policy

77

 Other
Q8. If other then which policy does you have?
Child policy
Group policy
Joint policy
Q9. Are you satisfied with the product?
Yes
No
Q10. Why you took a Life Insurance Policy?
Advisor presentation
Friends advice
Your own judgment
Q11. Do you know the following?
LIC is a governmental organization
LIC has tied up with some Banks and Service providers to offer online premium collection facility in selected cities
LICs ECS and ATM premium payment facility is an addition to
customer convenience

78

 LIC has launched its SATELLITE SAMPARK offices with a vision of

providing easy access to its policyholders
LIC has crossed the milestone of issuing 1,01,32,955 new policies by
15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year

Q12. Would you take another Life Insurance Corporation policy?

Yes
No

79

BIBLIOGRAPHY

BOOKS
Kotler Philip, Marketing Management Leslie Lazar Kanuk, Consumer Behaviour
C.R Kothari, Research Methodology

WEBSITES

www.licindia.com

www.insurance.com

www.maxindia.com
80

www.mnyl.com

81