PROJECT REPORT ON

“A STUDY ON FACTORS AFFECTING

CUSTOMER’S PREFERENCES TOWARDS
INVESTING IN
LIFE INSURANCE POLICIES”

Submitted in the partial fulfilment of the degree of

Bachelor of Business Administration (2019-2022)

Submitted by:-

NUPUR RASTOGI

04221001719

Under the guidance of

MS. NIKITA JAIN

(SR. ASSISTANT PROFESSOR)

MR. GAGANDEEP SINGH

(ASSISTANT PROFESSOR)

SUBMITTED TO:
 Ideal Institute of Management & Technology
(16 X, Karkardooma Institutional Area, Delhi-92)

CERTIFICATE

This is to certify that Project Report entitled, “A STUDY ON FACTORS

AFFECTING CUSTOMERS PREFERENCE TOWARDS INVESTING IN
LIFE INSURANCE POLICIES” is bonafide work carried out by NUPUR
RASTOGI, student of BBA GENERAL, Ideal Institute of Management and
Technology (affiliated to Guru Gobind Singh Indraprastha University., Delhi) in
partial fulfilment of the requirement for the award of degree of Bachelor of
Business Administration, under my guidance and direction. To the best of my
knowledge and belief the data and information presented by her in the project
report has not been submitted for the award of any other degree.

MS. NIKITA JAIN

(SR. ASSISTANT PROFESSOR)

MR. GAGANDEEP SINGH

(ASSISTANT PROFESSOR)
 ACKNOWLEDGEMENT

I am writing this final Project for the program of Bachelor of Business

Administration on “A STUDY ON FACTORS AFFECTING CUSTOMERS
PREFERENCE TOWARDS INVESTING IN LIFE INSURANCE POLICIES”
for Ideal Institute of Management and Technology affiliated to Guru Gobind
Singh Indraprastha University.

It has been a great challenge but a plenty of learning and opportunities to gain
a huge amount of knowledge on the way of writing this Project Report. I could
not have completed my Project without the constant guidance of Sr. Assistant
Professor MS. NIKITA JAIN & Assistant Professor MR. GAGANDEEP
SINGH, my supervisors, who helped me along the way and was always
prepared to give me feedback and guidelines whenever I needed it.

NUPUR RASTOGI
04221001719

iii
 TABLE OF CONTENT
S.NO. PARTICULARS PA GE
N O.

1. CERTIFICATE ii
2. ACKNOWLEDGEMENT iii
3. CHAPTER – 1, INTRODUCTION TO STUDY 1-4
1.1. Purpose of Study 2
1.2. Objective of Study 2
1.3. Scope of Study 3
1.4. Limitations of Study 3
1.5. Research Methodology 4
4. CHAPTER – 2, INTRODUCTION TO COMPANY 5-9
2.1. About the Company 6
2.2. Mission & Vision 6
2.3. Company’s USP 7
2.4. Services 7
2.5. Insurance Product 8
2.6. About the Product
9
5. CHAPTER – 3, INTRODUCTION TO LIFE INSURANCE 10-16
3.1. What is Life Insurance 10
3.2. Tax Benefits 10
3.3. How Life Insurance Works 11
3.4. Types of Life Insurance 12-16
6. CHAPTER – 4, ANALYSIS & INTERPRETATION OF 17-33
DATA
4.1. SWOT Analysis 18-19
4.2. Interpretation of Data 20-33
7. CHAPTER – 5, CONCLUSION & RECOMMENDATIONS 34-36
5.1. Conclusion 35
5.2. Recommendations 36
8. RESEARCH METHODOLOGY 37
9. FINDINGS OF THE STUDY 38
10. QUESTIONNAIRE 39-40
11. BIBLIOGRAPHY 41
 CHAPTER – 1
INTRODUCTION TO STUDY

1
1. Purpose, Objective, Scope and Limitation of the Study

1.1. Purpose of the Study

 The study aims at understanding the market of Insurance. Insurance
being one of the most important Financial Product in the market, still
has not reached a more number of customers.
 The study also aims to understand various Life
Insurance Products.
 The main motive of the study is to understand the various factors that
affect the customer’s decision in buying a Life Insurance Policy.
 The study also aims to understand the Life Insurance Policy provided
by AIM INDIA Pvt. Ltd.
 To understand the level of awareness regarding insurance products within
the customers.

1.2. Objective of the Study

The research is chosen with an objective of studying factors which influence

customers policy buying decisions and also analyse the customers preferences
while Life policy Investment decision making. Factors related to Insurance
would be studied in this project. Following are the main objectives of the
study:

 To study various factors influencing Customer Investment Decision in

Life Insurance.
 To evaluate preferences of the customers while taking life insurance
investment decision.
 To study and rank the factors responsible for the selection life insurance
as an investment option.

 To offer suggestions for popularizing life insurance among the public at

large.

2
1.3. Scope of the Study

The insurance industry is one of the fastest growing industries in the

country and offers abundance growth opportunity to the life insurers. When
compared with the developed foreign countries, the Indian life insurance
industry has achieved only a little because of the lack of insurance
awareness, ineffective marketing strategies, poor affordability and low
investment in life insurance products. The huge and ever rising population
levels in our country provide an attractive opportunity but still nearly
around 65% Indian lives is un-insured. The study is basically intended to
discover and examine the factors affecting customer’s decision towards
investment in life insurance policy.

1.4. Limitations of the Study

 Lack of awareness regarding AIM INDIA Pvt. Ltd. was a major

problem in reaching to customers.
 Getting personal information like Income, Insurance policy
was a difficult task.
 It was difficult to persuade people about the product of the company.
 This study is conducted with the help of online platform due to the
COVID19 situation.
 The study is limited to respondents from Delhi area only.
 Lesser awareness of various Life Insurance Products was one major
problem while conducting the survey. It was difficult to make people
understand each and every product of Insurance.
 Understanding and filling the Google Form was a difficult task because
of not so easy understanding of Google Form and questions.

3
1.5. RESEARCH METHODOLOGY

The present study is an exploratory and descriptive type of research study.

The study aims to find out the factors influencing customer’s life
insurance investment decision and their preferences at the time of policy
buying decision. The respondents were majorly from the Pune District. In
order to conduct the study, a total of 151 population were taken for survey.

SOURCES OF DATA & DATA COLLECTION

The data for the study has been collected from both primary and
secondary sources. The primary data has been collected through Google
Forms and Surveys. Various interviews were conducted in order to collect
the data. Customer Interaction and telephonic conversations helped to
understand various factors and problems of the customer which were
mentioned in the study. The secondary data has been collected from IRDA
annual reports, insurance journals, magazines and insurance website.

STATISTICAL TOOLS AND TECHNIQUES

For measuring various phenomena and analysing the collected data

effectively and efficiently to draw sound conclusions, a number of
statistical techniques including chi-square, correlation and weighted
average score have been used for the testing of hypotheses. SPSS and
Microsoft Excel has been used for the purpose of analysis.

4
 CHAPTER – 2
INTRODUCTION TO
AIM INDIA PVT. LTD.

5
2.1. About the Company

Accrual Intelligence Manual India Private Limited is one of the leading

provider of professional wealth advisory in India and Abroad, AIM India
delivers a one stop solution/ service to achieve financial independence. Its
principle is to deliver high returns to our clients through our network of
government sector banks in India. Its comprehensive wealth management is
a high level professional service that combines financial and investment
advice in accounting, taxation services and retirement planning. Its wealth
management is much more than just investment advice as we encompass all
parts of an individual's financial life. They coordinate all the services
needed to manage client's money and plan for their own and family's current
and future needs. They maintain and increase their wealth based on
individual's financial situation goals and comfort level with risk.
Their team offers an ongoing support and advice when the customer’s
investment is successfully done. They will keep the customer informed of
the changes in regulations that directly affect the customer and leaving them
to focus on strategies that maximize profitability and productivity in their
investment.
Having more than 50 associates all over India and handling almost 7,000
compliance issues per annum, it is needless to say that the company stay
updated while providing quality in their services.
The leading one stop solution provider for all the financial and investment
services, the company serve over 1,500 clients all over the world and have
provided training to more than 1,350 interns who got International Exposure
as well.

2.2. AIM’s Mission & Vision

 AIM aims to protect the customer’s wealth or the hard earned

money.
 Their mission is to become an organization that is knowledge
centric and offers expert advice to their customers.
 To provide 360 Degree Financial Solutions to its customers.
 Their vision is to deliver high rate of returns to their customers and
to move towards financial independence.

6
 2.3. AIM’s USP

A Wide Range of Services: AIM India is the financial marketplace

in India that offers a complete spectrum of financial products, ranging from
Compliance Services, Accounting Services, Taxation Services, Training and
Development Services, Recruitment Services, Consulting Services, Insurance
Services, Mutual Fund, Retirement Planning, International, Expansion Services
and Wealth Advisory. AIM partners with Bank of Baroda catering to all
segments with varied demographics.

Unbiased & Customized Advise: AIM offers customized solutions

to all lending and investment needs of a customer. The comparison engine is an
intuitive platform that provides unbiased choices to their customers, based on
the profile and needs. After processing on all the details and areas of interest,
this engine helps users arrive at a smarter decision instantly.

A Seamless Journey: AIM also helps customers make the right

choice and assists them throughout the process and even after that. A seamless
product journey and assistance from the team, makes the entire process at AIM
simple and speedy.

Paperless and Presence-less Processes: AIM is currently also using

technology to build presence-less and paperless solutions in the financial
services space. Riding on the Indian Government's India Stack initiative that
aims to digitize customer identification and verification, AIM is working where
processes are completed on its platform without the need for customers to either
visit banks or do multiple sheets of paperwork.

2.4. AIM’s Promoters

 Bank of Baroda
 Union Bank of India
 Carmel Point Investments India Private Limited

2.3. AIM’s SERVICES

7
 Being the only Company of its own kind, AIM India Pvt. Ltd. provides
various services to their customers:
 Compliance Services
 Accounting Services
 Taxation Services
 Training and Development Services
 Recruitment Services
 Consulting Services
 Insurance Services
 Mutual Fund
 Retirement Planning
 International Expansion Services
 Wealth Advisory

2.3.1. AIM’s Insurance Product:

INDIAFIRST LIFE MAHA JEEVAN PLAN

Adding a Dash of Magic to Your Life
About The Product:
 IndiaFirst Maha Jeevan Plan is a participating, non-linked endowment
plan that offers an assured maturity amount plus a revisionary bonus
declared by the company every financial year end and terminal bonus, if
any.

 Through plan customer can accumulate your savings systematically,

through regular premium contributions based on her/his income and
needs.

 Customer can plan future needs and decide when she/he need the assured
amount - anytime between 15 – 25 years.

 Prosper with the guaranteed maturity amount (sum assured) + the bonus
(if any).

 Customer enjoy additional earnings through terminal bonus (if any).

 Customer can opt for Rider and Waiver of Premium Rider to enhance
base plan benefits.

 Tax benefits may be available on the premiums paid and benefits

received as per prevailing tax laws.

8
Categories of the Product:

 Child
 Youngster
 Retirement

Highlights of the Product:

 Zero Risk Involved

 Brand Value
 High Rate of Return
 Additional Bonuses
 Tax Benefit
 Loan Facility
 Ownership Transfer Feature
 Approachability
 Best After Sale Services
 Fulfilling all the needs of Government
 No Fluctuation
 Loyalty Bonuses

Competitors of the Product:

 Bajaj Allianz Life Insurance Co. Ltd.

 Birla Sun Life Insurance Co. Ltd.
 Excide Life Insurance Co. Ltd.
 HDFC Standard Life Insurance Co. Ltd.
 Max Life Insurance Co. Ltd.
 Kotak Mahindra Old Mutual Life Insurance Ltd.
 Sahara India Life Insurance Co. Ltd.
 Reliance Life Insurance Co. Ltd.

9
 CHAPTER – 3
INTRODUCTION TO
LIFE INSURANCE

10
3.1. What Is Life Insurance

Definition: Life insurance (or life assurance) is a contract between an

insurance policy holder and an insurer or assurer, where the insurer promises to
pay a designated beneficiary a sum of money (the benefit) in exchange for a
premium, upon the death of an insured person (often the policy holder).

Life insurance is a contract that offers financial compensation in case of death

or disability. Some life insurance policies even offer financial compensation
after retirement or a certain period of time. Life insurance, thus, helps you
secure your family’s financial security even in your absence. You either make a
lump-sum payment while purchasing a life insurance policy or make periodic
payments to the insurer. These are known as premiums. In exchange, your
insurer promises to pay an assured sum to your family in the event of death,
disability or at a set time. Life insurance can help you support your family even
after retirement.

The purpose of life insurance is to provide financial protection to surviving

dependents after the death of an insured. It is essential for applicants to analyse
their financial situation and determine the standard of living needed for their
surviving dependents before purchasing a life insurance policy. Life insurance
agents or brokers are instrumental in assessing needs and establishing the type
of life insurance most suitable to address those needs. Several life insurance
channels are available including whole life, term life, universal life and variable
universal life policies. It is prudent to re-evaluate life insurance needs annually,
or after significant life events like marriage, divorce, the birth or adoption of a
child and major purchases, like a house.

3.2. Tax Benefits associated with Life Insurance Policies:

 Life insurance not only ensures the well-being of your family, it also
brings tax benefits.

 The amount you pay as premium can be deducted from your total taxable
income.

 However, this is subject to a maximum of RS. 1.5 lakh, under Section

80C of the Income Tax Act.

 The premium amount used for tax deduction should not exceed 10% of
the sum assured.

11
3.3. How Life Insurance Works

There are three major components of a life insurance policy:

1. Death benefit is the amount of money the insurance company guarantees

to the beneficiaries identified in the policy upon the death of the insured.
The insured will choose their desired death benefit amount based on
estimated future needs of surviving heirs. The insurance company will
determine whether there is an insurable interest and if the insured
qualifies for the coverage based on the company's underwriting
requirements.

2. Premium payments are set using actuarially based statistics. The insurer
will determine the cost of insurance (COI), or the amount required to
cover mortality costs, administrative fees and other policy maintenance
fees. Other factors that influence the premium are the insured’s age,
medical history, occupational hazards and personal risk propensity. The
insurer will remain obligated to pay the death benefit if premiums are
submitted as required. With term policies, the premium amount includes
the cost of insurance (COI). For permanent or universal policies, the
premium amount consists of the COI and a cash value amount.

3. Cash value of permanent or universal life insurance is a component which

serves two purposes. It is a savings account, which can be used by the
policyholder, during the life of the insured, with cash accumulated on a
tax-deferred basis. Some policies may have restrictions on withdrawals
depending on the use of the money withdrawn. The second purpose of the
cash value is to offset the rising cost or to provide insurance as the
insured ages.

12
3.4. Types of Life Insurance

3.4.1. Term Life Insurance:

Term insurance is a type of life insurance policy that provides

coverage for a certain period of time, or a specified "term" of years.
If the insured dies during the time period specified in the policy and
the policy is active - or in force - then a death benefit will be paid.

Term insurance is initially much less expensive when compared to

permanent life insurance. Unlike most types of permanent insurance,
term insurance has no cash value. There are many different types of
term insurance policies available. Many policies offer level
premiums for the duration of the policy, such as 10, 20, or 30 years.
These are often referred to as "level term" policies. While premiums
for these level term policies remain level for a set number of years,
after this time period the premium increases significantly, making
the policy cost prohibitive. Most term policies have a built-in
privilege to convert to a permanent policy regardless of any changes
in the insured's health.

Term insurance has two features that make it attractive:

a) A guarantee on the premium and survivor benefit for a defined

amount of years, depending on the company, age of the insured and
other factors.
b) No capability of accumulating cash inside the policy. You can't
pay an extra premium to get extra benefit. You can’t transfer money
from other accounts into the policy. The carrier will not pay
dividends or apply interest to your account.

3.4.2. Whole Life Insurance:

Whole Life Insurance Policy is a life insurance policy which is

guaranteed to remain in force for the insured's entire lifetime,
provided required premiums are paid, or to the maturity date. As a
life insurance policy it represents a contract between the insured and
insurer that as long as the contract terms are met, the insurer will pay
the death benefit of the policy to the policy's beneficiaries when the
insured dies. Because whole life policies are guaranteed to remain in
force as long as the required premiums are paid, the premiums are
typically much higher than those of term life insurance where the

13
 premium is fixed only for a limited term. Whole life premiums are
fixed, based on the age of issue, and usually do not increase with
age. The insured party normally pays premiums until death, except
for limited pay policies which may be paid up in 10 years, 20 years,
or at age 65. Whole life insurance belongs to the cash value category
of life insurance.

Individuals may find whole life attractive because it offers coverage

for an indeterminate length of time. It is the dominant choice for
insuring so-called "permanent" insurance needs, including:

 Funeral expenses
 Estate planning
 Surviving spouse income
 Supplemental retirement income.

3.4.3. Endowment Policy:

An endowment policy is a life insurance contract designed to pay a
lump sum after a specific term (on its 'maturity') or on death. Typical
maturities are ten, fifteen or twenty years up to a certain age limit.
Some policies also pay out in the case of critical illness.

Policies are typically traditional with-profits or unit-linked

(including those with unitised with- profits funds the holder then
receives the surrender value which is determined by the insurance
company depending on how long the policy has been running and
how much has been paid into it. Pension insurance provides many
benefits. They can be used as a low-risk way to save. Policy holders
can choose how much to pay each month and how long they want to
stay, usually for 10 or 20 years.

Benefits of Endowment Plans:

 Dual Benefit: Endowment Plans offer the dual benefit of Long

Term Investment and Insurance. Apart from paying the sum
assured to the beneficiary in case of the policy holder’s demise,
endowment plans also pay a lump sum maturity amount is the
policy holder survives the policy tenure.
 Safe: Even though the returns on endowment plans may be lower,
they are risk free in terms of the sum assured.

14
  Disciplined Savings: Policy holders need to set aside a pre-
determined amount towards the premium payment at a stipulated
time interval, thus encouraging a disciplined approach to saving.
 Assured bonus: Endowment plans declare an annual bonus,
typically paid out as a specific percentage of the sum assured. In
case of policy holder’s survival, additional bonuses accrued
during the policy are paid in addition to the sum assured
 Compounding returns: A key advantage of endowment plans is
that they fetch returns on a compounding basis during a policy
term
 High Liquidity: Endowment Policies are liquid in nature.

3.4.4. Money Back Policy:

Money back plans protect your family’s financial interests from

circumstances such as death or critical illness of the policy holder.
Periodic amounts create wealth for meeting financial commitments at
key stages in life. Money Back plans offer true amalgamation of
Insurance and Investment. Secure your family financially.

Money back plans are one of the most popular life insurance plans in
India. Under these plans, policy holders receive a frequent amounts
as the death benefit, in case the policy holder services. These
packages include both insurance and investment plans. A money back
plan is ideal for people who want a guaranteed return on their
investments and are looking for regular amounts at the same time in
addition to an insurance cover for themselves for the same money
they are putting as a premium. Unlike a standard life insurance policy
that only pays an amount after the maturity of the policy, the money
back plan starts to pay an amount that is called a ‘survival benefit’
over the lifetime of the policy. This survival benefit is given after a
few years from the start of money back plan and continues until the
maturity of the money back policy. The survival benefit is basically
the reward from the company to the insured individual for surviving.
The benefit is only paid if the insured is alive.

15
 Money Back Policy Benefits:

 Low Risk Exposure: Money Back policy plans are insurance

cum return products, hence they don’t entail high risk.

 Regular Source of Income: Money Back policy provides

frequent amounts during the policy terms. This is known as
Survival Benefits.

 Insurance Coverage: Money Back Policy offers insurance

coverage, thus providing financial security to your family
members to meet their obligations after your demise.

 Assured Return on Investment: Money back plans offer an

assured return on the invested amount. Therefore, you need not
worry about losing out on your investment.

3.4.5. Unit Linked Insurance Plan:

ULIP or Unit Linked Insurance Plan is a mix of insurance along with

investment. From a ULIP, the goal is to provide wealth creation
along with life cover where the insurance company puts a portion of
your investment towards life insurance and rest into a fund that is
based on equity or debt or both and matches with your long-term
goals. These goals could be retirement planning, children’s education
or another important event you may wish to save for.

When you make an investment in ULIP, the insurance company

invests part of the premium in shares/bonds etc., and the balance
amount is utilized in providing an insurance cover. There are fund
managers in the insurance companies who manage the investments
and therefore the investor is spared the hassle of tracking the
investments. ULIPS allow you to switch your portfolio between debt
and equity based on your risk appetite as well as your knowledge of
the market’s performance. Benefits like these which offer investors
the flexibility of switching is a huge factor contributing to the
popularity of these investment instruments.

16
Benefits of ULIP:

 Life cover: First and foremost, with ULIPs you get a life
cover coupled with investment. It offers security that a
taxpayer’s family can fall back on in case of emergencies like
the untimely death of the taxpayer, etc.

 Income tax benefits: Not many are aware that the premium
paid towards a ULIP is eligible for a tax deduction under
Section 80C. Additionally, the returns out of the policy on
maturity are exempt from income tax under Section 10(10D)
of the Income-tax Act.

 Finance Long Term Goals: If you have long-term goals like

buying a house, a new car, marriage, etc., then ULIP is a good
investment option because the money gets compounded. As a
result, the net returns are generally more.

 The flexibility of a portfolio switch: As already mentioned,

ULIPS are usually designed in a way that they allow you to
switch your portfolio between debt and equity based on your
risk appetite as well as your knowledge of how the market is
performing.

17
 CHAPTER – 4
ANALYSIS
AND
INTERPRETATION OF DATA

18
4.1. SWOT ANALYSIS OF AIM INDIA PVT. LTD.

 STRENGHTS

1. Various advisory & services are provided on one platform.

2. Platform providing online process opportunity makes AIM India a

technologically advanced company.

3. Customer Retention because of the high level of satisfaction within

the customers.

4. Strong team bonding because of the healthy working environment

and good communication between the employees.

 WEAKNESSES

1. Calling to the Customer is late at times after they have applied for
the policy, which results in losing the customers.

2. Comparatively less returns.

3. Being a Start-up Company, the company is still in a developing

stage, and so not a completely well settled Business.

4. Less customers as the business is still not well settled and

customers find it tough to trust.

19
 DIAGRAM OF SWOT ANALYSIS

1. One stop solution 1. Less return

2. Online platform 2. At a developing
3. Customer retention stage
4. Strong bond 3. Less customers
between employees

1. Understanding the 1. Increase in

reasons competition
2. Increase in number 2. Advancement in
of employees technology
3. Increase in 3. Still setting foot in
promotion market
4. Reaching late to
customers

20
 OPPORTUNITIES

1. Understanding of why the applications are being rejected can help

the company to get better potential customers and also help in
future decisions.

2. Increasing Number of Employees for the company so as to have

faster customer interaction thus leading to less losing of customers.

3. Increasing its promotion for Insurance Products to customers

will help to get more customers for Insurance.

 THREATS

1. Increasing companies providing insurance may lead to loss of

customers.

2. Advancement in Technology with the competitors may affect

the performance of the company.

3. Customers can hesitate while investing with the company as the

company is still setting its foot in the insurance market.

4. Losing customers because of reaching late to a customer on call.

21
4.2 INTERPRETATION OF DATA

Demographic Factors:
4.2.1. Age of the Respondents

1. 21 to 30 years 9 30%
2. 31 to 40 years 11 36.66%
3. 41 to 50 years 6 20%
4. 51 to 60 years 4 13.34%
5. Above 60 years 0 0%
Total 30 100

Age of Respondents
13.34% 30.00%

20.00%

36.66%

21 to 30 years 31 to 40 years 41 to 50 years

51 to 60 years Above 60 years

 INTERPRETATION

The pie chart represents the ages of the respondents. The

majority of the respondents, i.e. 11 were of the age 30 to 41
years, followed by 9 respondents of age 21 to 30 years. There
are 6 respondents of age 41 to 50 years and 4 respondents from
51 to 60 years age. There were zero respondents of age above
60 years.

22
23
4.2.2. Gender of the Respondents

Sr. No. Gender of Respondents Respondents Percentage

1. Male 17 56.6%
2. Female 13 43.3%
Total 30 100

Gender of Respondents

13

17

Female Male

 INTERPRETATION

The respondents for the survey included 56.6% of Male

respondents. Total male respondents were 17. On the other
hand, there were 43.3% of female respondents. The total
comber of female respondents was 13.

24
4.2.3. Income of the Respondents

Sr. No. Income of Respondents Respondents Percentage

1. ₹0 - ₹20000 4 13.34%
2. ₹20001 - ₹40000 4 13.34%
3. ₹40001 - ₹60000 8 26.66%
4. ₹60001 - ₹80000 7 23.34%
5. ₹80001 - ₹100000 2 6.66%
6. ₹100001 and above. 5 16.66%
Total 30 100

Monthly Income of Respondents

16.66% 13.34%

6.66% 13.34%

23.34%
26.66%

₹0 - ₹20000 ₹20001 - ₹40000 ₹40001 - ₹60000

₹60001 - ₹80000 ₹80001 - ₹100000 ₹100001 and above.

 INTERPRETATION

Majority of the respondents, i.e. 8 respondents were from the

salary range between ₹40001 - ₹60000, which is followed by 4
respondents with a salary in between ₹0 - ₹20000. There were
only 5 respondents above ₹100001. 4 respondents of ₹20001 -
₹40000 and 7 and 2 from ₹60001 - ₹80000 & ₹80001 -
₹100000 income bracket respectively.

25
4.2.4. Occupation of the Respondents

Sr. No. Income of Respondents Respondents Percentage

1. Agriculture 1 3.34%
2. Business / Private Sector 9 30%
3. Government Service 6 20%
4. Homemaker 3 10%
5. Professional 8 26.66%
6. Student 3 10%
Total 30 100

Occupation of Respondents
3%
10%
30%

27%

10% 20%

Agriculture Business / Private Sector Government Service

Homemaker Professional Student

 INTERPRETATION

The majority of respondents are 9 from Business/Private Sector

background, followed by Professional Sector of 8 respondents.
3 respondents were students and 6 respondents were
Government Service holders. The respondents included 3 of
homemaker and 1 of agriculture.

26
4.2.5. Number of People having Life Insurance

Question: Do you hold an Insurance Policy(s)?

Sr. No. Responses Respondents Percentage

1. Yes 21 70%
2. No 9 30%
Total 30 100

Total
30%

70%

YES NO

 INTERPRETATION

21 out of 30 respondents were holding an insurance policy.

Hence, there were 70% of respondents who hold an insurance
policy. 9 respondents out of 30 respondents did not hold any
insurance policy which contributed to 30% of respondents not
holding an insurance policy.

27
4.2.6. Number of People having Life Insurance based on their Occupation

Sr. No. Occupation of Respondents Yes No Total

1. Agriculture 1 0 1
2. Business / Private Sector 7 2 9
3. Government Service 5 1 6
4. Homemaker 3 0 3
5. Professional 8 0 8
6. Student 2 1 3
Total 26 4 30
10

8 2 0

6
1
5

4 8
7
3 0
5 1
2
3
1 0 2
1
0
Agriculture Business / Government Homemaker Professional Student
Private Sector Service

YES NO

 INTERPRETATION

The bar graph above shows a detailed information about people

of various occupations owning Life Insurance policies. Majority
of respondents are from business sector who hold a policy,
whereas agriculture had the least number of policy holders.
Majority of Private sectors employees availed a policy by their
employer and hence the ratio was high. Same was the case with
Government Sector employees.

28
4.2.7. Number of People having Life Insurance based on their Age

Sr. No. Age of Respondents Yes No

1. 21 to 30 years 7 2

2. 31 to 40 years 8 3
3. 41 to 50 years 6 0

4. 51 to 60 years 2 2
5. Above 60 years 0 0

Total 23 7

12

10
3

8 2

6 0

4 8
7
6 2
2
2
0 0
21 to 30 years 31 to 40 years 41 to 50 years 51 to 60 years Above 60 years

Series 1 Series 2

 INTERPRETATION

From the graph it is clear that the number of people holding an

insurance policy is maximum in the age of 31 to 40 years
followed by the age group 21 to 30 years.
Majority of the respondents, i.e. 7 out of 9 respondents hold an
insurance policy. 6 people from the age group 41 to 50 years
hold an insurance policy.

29
4.2.8. Preferences of the Policy holders
Life Insurance Companies Count Percentage

Max Life 5 16.67%

ICICI Prudential 2 6.66%

HDFC Standard 2 6.66%

SBI Life 4 13.34%

Bajaj Allianz 6 20%

LIC 8 26.67%

Star Health 2 6.66%

Axis Bank 1 3.34%

Life Insurance Companies

6.66% 3.34%
16.67%
6.66%
26.67%

6.66%

20.00% 13.34%

Max Life ICICI Prudential HDFC Standard SBI Life

Bajaj Allianz LIC Star Health Axis Bank

 INTERPRETATION

From the above graph and table, we can see that the maximum preference of
the people is Life Insurance Company with 26.67% and 8 respondents. The
second rank lies with Max Life with 16.67% and 5 respondents. With a close
gap, ICICI and Star and HDFC holds equally 6.66% and 2 respondents, and
SBI Life hold 13.34% with 4 respondents. Bajaj Allianz with 20% with 6
respondents. Axis being the last hold 3.34% with 1 respondent. Thus it can be
inferred that LIC of India is the most preferred life insurance company and
majority of them prefer government-owned LIC for getting insured because of
security. The other private life insurance companies are having less
percentage of share and those who prefer private insurers are because of better
customer services and high returns.

30
4.2.9. Types of Policy preferred
Types of Policy Count Percentage

Endowment 5 15.62%

Term Plan 6 18.74%

Unit Linked Insurance 8 25%

Money Back 10 31.24%

Don’t Own Any! 2 6.25%

General Insurance 1 3.15%

Types of Policy

6.25% 3.15%
15.62%

31.24% 18.74%

25.00%

Endowment Term Plan Unit Linked Insurance

Money Back Don’t Own Any! General Insurance

 INTERPRETATION

From the above graph, we can say that the maximum number of policies being
purchased or preferred in a market are Money Back Policy with 31.24% and
10 respondents, followed by ULIP with 25% and 8 respondents. Term plan

31
takes the third place with 18.74% and 6 respondent. Endowment plans are the
least preferred in these set of respondents with only 11.8% and 23
respondents. Thus it can depict that among many plans available, the most
preferred one among the mass is money back plan.

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4.2.9. The most attractive features in a Policy
For analysing and ranking various features in a policy, weighted average method is being
used.

Feature 1st 2nd 3rd 4th

Money Back Guarantee 75 51 14 8
Larger Risk Covariance 51 39 46 12
Low Premium 35 50 37 25
Company's Reputation 45 28 20 55

Rank 1st = 4 points, 2nd = 3 points, 3rd = 2 points, 4th = 1 point.

Feature 1st 2nd 3rd 4th Weighted

Scores
Money Back Guarantee 75 51 14 8 489
Larger Risk Covariance 51 39 46 12 425
Low Premium 35 50 37 25 389
Company's Reputation 45 28 20 55 359

 INTERPRETATION

From the weighted averages, we can rank the features as:

1st = Money Back Guarantee

2nd = Larger Risk Covariance
3rd = Low Premium
4th = Company’s Reputation

Thus, we can say that the Money Back guarantee feature plays a vital role in
buying decision of a customer, followed by larger risk covariance. Low
Premium and Company’s reputation stand on 3rd as well as 4th position
respectively. Hence, these are the features a company should keep in mind
while selling a policy to a customer.

33
4.2.9. Preferences in a Company:

Preference in a company Response Percentage

A Trusted Company 9 59.30 %
Good Plans 13 42 %
Friendly Service and Responsiveness 2 35.30 %
Accessibility 6 18 %

Preference in a Company

Accessibility 27

Friendly Service and Responsiveness 53

Good Plans 63

A Trusted Company 89

0 20 40 60 80 100

 INTERPRETATION

It is evident from the graph that a customer looks for a trusted name or a
company while investing in life insurance policies. 59.30% people would prefer
choosing a trusted company. The second factor a customer would look for is a
good plan with 42% people responding for it. 35.30% people whereas think that
Friendly service and responsiveness is what they would choose. Least number
of responses were given to Accessibility with only 18%. Hence, we can
conclude that having a trusted name with good plans can be two factors to
attract people for buying Life Insurance Policies.

34
 4.2.9. Ranking various Benefits (as per the customer) responsible
for investment in life insurance products:
For analysing and ranking various benefits in a policy, weighted average method is being
used.

Ranking of Factors 1st 2nd 3rd 4th 5th

Tax Benefit 69 46 19 7 2
Risk Coverage and Savings 34 22 21 39 23
Security with High Returns 46 39 45 8 1
Insurance Services 28 19 17 33 40
Premium Charges 40 39 28 12 21

Ranking of Factors 1st 2nd 3rd 4th 5th Weighted

Averages
Tax Benefit 69 46 19 7 2 602
Risk Coverage and 34 22 21 39 23 422
Savings
Security with High 46 39 45 8 1 538
Returns
Insurance Services 28 19 17 33 40 373
Premium Charges 40 39 28 12 21 485
st nd rd th th
Rank 1 = 5 points, 2 = 4 points, 3 = 3 points, 4 = 2 points, 5 = 1 point.

 INTERPRETATION

From the weighted averages, we can rank the features as

1st = Tax Benefit

2nd = Security with High Returns 3rd = Premium Charges
4th = Risk Coverage and Savings.
5th = Insurance Services.

It can be depicted that Tax Benefit lies the main concern of customers while
buying a policy and then other benefits mentioned below

35
 CHAPTER – 5
CONCLUSION
&
RECOMMENDATIONS

36
 CONCLUSION

Life Insurance is an important form of insurance and essential for every

individual. Life insurance penetration in India is very low as compared to
developed nations where almost all the lives are covered. Customers are the
real pillar of the success of life insurance business and thus it’s important for
insurers to keep their policyholders satisfied and retained as long as possible
and also get new business out of it by offering need based innovative
products. There are many factors which affect customer’s investment decision
in life insurance and from the study it has been concluded that demographic
factors of the people play a major and pivotal role in deciding the purchase of
life insurance policies.

Life Insurance Companies thus should keep an eye on all these factors while
designing or promoting any life insurance policy as this would help them keep
their customers satisfied and would also help them in Customer Retention.

Life Insurance is growing with its various products like the Money Back and
ULIP plans which many of the customers are still unaware and thus a proper
knowledge regarding the same can be helpful to the customers to choose and
invest in Life Insurance Policies.

Human life is not just unique but is also precious and needs to be secured as
there are many dependents on one human after the death. Thus, one needs to
make sure that he/she secures their lives by taking one or the other Insurance
Policies.

37
 RECOMMENDATIONS

 In today’s competitive world, it is very important to satisfy the customer. It

is one of the most important aspect to retain the customers. Having
customer retention helps a company to survive in the market. Today, private
insurers are hitting the market extensively and thus through their best
services and plans possible, they can reposition and differentiate themselves
from LIC.

 As the study said, the customers look up for a trusted name, thus, like LIC,
Private insurers should also emphasis more on building brand awareness.
From the study, it was found that few of the respondents were not even
aware of various Life Insurance Policies. Thus, private insurers can use
different modes of communication of reaching to people in order to spread
insurance awareness amongst the people.

 Even today, there are many people who do not consider Life insurance
policy as a source of Investment. Thus, insurance companies should come
up with plans with high risk coverage and also focus on encouraging the
customers in doing a long term investment. This will help in more
awareness as well as Investment in Life Insurance.

 If both the Private as well as Government Sector work together in order to

spread awareness amongst the people, it would be beneficial for both the
sectors. To achieve greater insurance penetration, healthier competition has
to be intensified by both the sectors and they should come up with new
innovative products to offer greater variety or choice to the customers and
also make improvement in the quality of services and sell products through
appropriate distribution channel to win-win situation for both the parties.

 If insurance companies come up with products which can give high risk
cover, with less premium and more returns and more such innovative ideas,
it would be helpful for the insurance companies to attract more customers.

38
 RESEARCH METHODOLOGY

The present study is descriptive type of research study. The study aims to find
out the factors influencing customer’s life insurance investment decision and
their preferences at the time of policy buying decision. The respondents were
from Delhi only. In order to conduct the study, a total of 30 population were
taken for survey.

SOURCES OF DATA & DATA COLLECTION

The data for the study has been collected from both primary and secondary
sources. The primary data has been collected through Google Forms. Customer
Interaction and telephonic conversations helped to understand various factors
and problems of the customer which were mentioned in the study. The
secondary data has been collected from annual reports, insurance journals,
magazines and insurance website.

STATISTICAL TOOLS AND TECHNIQUES

For measuring various phenomena and analysing the collected data effectively
and efficiently to draw sound conclusions, some statistical techniques have been
used for the testing. Microsoft Excel has been used for the purpose of analysis.

39
FINDINGS OF THE STUDY

 From the Study, it can be found that the customer decision to buy a Life
Insurance Policy majorly depends on demographic factors like the Age,
Gender and Income Level.

 Majority of the respondents from the age group of 31 to 40 years are found
to be interested in buying a Life Insurance Policy.

 From amongst 30 respondents, 8 people have shown preference towards

buying a Life Insurance policy from LIC followed by Max Life Insurance
amongst the private players. There were being followed by SBI Life, HDFC
and ICICI and lastly Bajaj Allianz.

 Majority of the respondents look for a trusted name in the Insurance

Company followed by Good Plans, Friendly service and response and
accessibility in the last.

 The study also shows highest share in the market is still owned by LIC. And
amongst the private sectors, SBI Life, MAX and BAJAJ are leading because
of high returns assured by them. People chose LIC because of the safety
issues inn term of their investments.

 From the study it was also found out that majority of the policy holders
owned the Money Back Policy of LIC followed by ULIP Plans of private
insurers. The Term Plan and Endowment plans are still existing but has a
lower popularity as compared to Money Back and ULIP plans. Thus we can
say that in present days people are more interested in policies which give
high returns along with risk coverage benefits.

40
 QUESTIONNAIRE

I am Nupur Rastogi, Student of IIMT College pursuing BBA in General, wish to study in depth
the importance of Life Insurance Policies and factors affecting for purchase of Life Insurance
Policies, as a part of Summer Internship Project. The survey would not take more than 5
minutes of your time.

The data collected will be confidential.

Email Address: _________________________________________

1. My Gender -  - Male  - Female

2. My Age  - 21 to 30 years  - 31 to 40
years  - 41 to 50 years  - 51 to
60 years
 - 61 years and above

3. Marital Status  - Single  - Married

4. My Occupation  - Govt. Service  -

Business/Private
 - Professional  - Agriculture
 - Others : __________________________

5. My Salary Range (Monthly)  - ₹0 - ₹20000  - ₹20001 -

₹40000
 - ₹40001 - ₹60000  - ₹60001 - ₹80000
 - ₹80001 - ₹100000  - ₹100001 and above.

6. Do you hold an Insurance Policy(s)?  - Yes  - No

41
(Please answer the further questions based on your thinking even if you don’t own an
Insurance, leave the question if you don’t want to answer it)

7. Do you consider Life Insurance policies as  - Yes  - No

a source of Investment?

8. Are you aware of various Life Insurance Products?  - Yes  - No

9. What preference would you give to Life Insurance?  - High  - Medium  - Low

10. Which Life Insurance do you prefer the most for Insurance?

 - Max Life  - ICICI Prudential  - HDFC Standard  - SBI Life

 - Bajaj Allianz  - LIC
 - Other -__________________________

11. Are you Happy with the Services?  - Yes  - No

12. What type of Insurance Policy do you hold?  - Endowment  - Term Plan
 - Unit Linked  - Money Back
 - Don’t Own any
 -Others-____________________

13. What are the features that you would  - Money Back Guarantee
prefer in Life Insurance Policy?  - Larger Risk Coverance
(Rank each feature in order of your  - Easy Access to Agents
Preference – 1 to 5)  - Low Premium
 - Company’s Reputation

14. What would you prefer in Insurance  - A trusted name

Company? (Multiple Choice)  - Good Plans
 - Friendly Service and Responsiveness
 - Accessibility

BIBLIOGRAPHY

42
WEBSITES:

 www.google.com
 www.scribd.com
 www.slideshare.com
 www.aimindia.com
 www.academia.com

BOOKS & JOURNALS:

 Athma. P and Kumar. R (2007) in the research paper titled “an

explorative study of life insurance purchase decision making: influence
of product and non-product factors".
 Eldhose. V and Kumar. G (2008), “customer perception on life insurance
services: a comparative study of public and private sectors".
 Media Reports, Press Releases, Press Information Bureau, Union Budget
2017-18, Insurance Regulatory and Development Authority of India
(IRDA).
 Newspapers and publishers
 Company’s information guide

43