A

PROJECT Consumer buying behaviour

REPORT With respect to life
ON insurance
 REPORT

BY

SOUMEN MANDAL

SPECIAL THANKS TO
Mr. Avinash Kumar Jalan
Senior Agency Head
 Certificate of faculty Guide

This is to certify that the work incorporated in this project Report “Consumer
Buying Behaviour with respect to life insurance” submitted by Soumen Mandal
is an original work and is completed under my supervision. Material obtained
from other sources had been duly acknowledged in the project Report.

Date:
Signature of Mentor

Place: Prof. Rabinarayan Subudhi

 Declaration

I Soumen Mandal (Roll no: 18202197, of batch 2018-20, S.O.M, KIIT

University), hereby declare that this project report titled “Consumer buying
behaviour with respect to life Insurance” submitted by me to KIIT School of
Management, KIIT University under the guidance of Prof. Rabinarayan Subudhi,
KSOM, sincerely regret any unintended discrepancies in this report.

This summer internship report has the requisite standard for the partial fulfilment
of the MBA program at school of management, KIIT University. To best of my
knowledge and belief no part of this report has been reproduced from any other
report and the contents are based on original research and live experiences that I
faced during a period of two months from 12th May 2019 to 12th July 2019.

This is bonafide work undertaken by me and it is not submitted to any other

University or Institution for the award of any degree / Certificate or published
any time before.

Date:

Place: Signature:
 Acknowledgment

I express my sincere thanks and appreciation to all those with whom I had the
opportunity to work and whose thoughts and insights, approach and ideas have
helped me in furthering my knowledge and understanding of the topic, that I have
prepared for the project. My sincere gratitude goes to my corporate guide Mr.
Avinash Kumar Jalan, Senior Agency Head, Kolkata, for his valuable and
continuous support in completing this project. I also extend my thanks to Mr.
Amit Jenamani, for introducing the opportunity of internship at the said firm,
through proper channel of institute’s training and placement cell.

I wish to express my special thanks to course, the very big contribution of my

faculty guide , Prof. Rabinarayan Subudhi. I owe his this project and stay ever
obliged.

Last but not the least I would like to thank KIIT School of Management, for
providing me with this wonderful opportunity and the right platform to shape my
career and excel in my academic knowledge through this summer internship.
 Table of Contents

EXECUTIVE SUMMARY

CHAPTER 1 PAGE NO CHAPTER 4 PAGE NO

AN OVERVIEW OF ORGANIZATION PROJECT DESIGN 26
--INTRODUCTION 1 AND METHODOLOGY
--KEY MILESTONES 3
--AWARDS 4 CHAPTER 5
--SWOT ANALYSIS 6 --INTERPRETATION 28
--PRODUCT PORTFOLIO 7 --FINDINGS 35

CHAPTER 2 CHAPTER 6
LIFE INSURANCE INDUSTRY RECOMMENDATION
--INTRODUCTION 13 --INDUSTRY 36
--SWOT ANALYSIS 14 --COMPANY 36
--PORTER’S FIVE FORCES MODEL 15
--FOREIGN DIRECT INVESTMENT IN INDIA 16 CONCLUSION 37
--FUTURE PROSPECT 17

CHAPTER 3
FINANCIAL INSTRUMENTS BIBLIOGRAPHY 38
--FIXED DEPOSITS 18 ANNEXURE 39
--RECURRING DEPOSITS 19
--KISAN VIKAS PATRA 20
--MONTHLY INCOME SCHEME 21
--PUBLIC PROVIDENT FUND 22
--NATIONAL SAVINGS CERTIFICATE 23
--MUTUAL FUNDS 24
 EXECUTIVE SUMMARY

My project has studied “Consumer buying behaviour with respect to Life insurance”
Influencing the ways that people act in their daily consumption lives is a concern for
researchers in a number of disciplinary areas, including consumer behaviour psychology,
sociology and marketing. IDBI Federal Life Insurance is a joint venture between IDBI bank,
Federal bank and Ageas. It began its operation in march 2008.
This project is focused on analysing the Internal and External factors which aim at determining
the customers buying behaviour towards various investment avenues with respect to life
insurance. It is mainly focused in trying to understand the various factors responsible for the
buying decision. Understanding these factors is a critical task. The purchase decision in general
is prompt by number of factors viz. psycho graphical, Economical, Socio political, Legal and
Demographical. There are certain other factors which need to be understood while keeping in
mind the investment decision made by customers, such as, customer buying behaviour.
Customer preferences and perception, Brand Loyality etc.
While doing this project I have found out that in the age group of 18-30 are not so much
bothered to buy insurance policy.People are more interested in monthly premium scheme rather
than paying annually.I have also found out that LIC is still the market leader in this industry.
The challenges I found out while doing this project is that consumer lack trust over private
insurance company regarding investment.They also lack knowledge about the benefits of life
insurance.
This will also help in analysing future options which can be crucial for pushing new products
in the market.
 CHAPTER 1

AN OVERVIEW OF ORGANIZATION

INTRODUCTION
IDBI Federal is a joint venture life insurance company of:

IDBI holds 48% of the Federal bank holds 26% It is a multinational

shares. It has over 1717 equity shares. It has insurance agent over 190
branches 1252 branches and 1680 years. It holds 26%
ATMS. equity shares

Source: IDBI annual report 2016-17

The company’s life insurance business comprises individual life and pension
and group life including non-participating, health and linked segments.

IDBI Federal has Bancassurance partnership with IDBI Bank and Federal Bank
and also distributes its products through its own network.

1
To further diversify its distribution base, it has set up an alternate & Direct
distribution channel.
It has its headquarter in Mumbai, India.
In the year 2006, IDBI Bank, Federal Bank and Belgian-Dutch insurance major
Fortis Insurance international NV signed a MOU to start a life insurance
company in India.

The company has 1941 employees on-roll and over 10,000 agents.

The CEO of the company is Mr. Vighnesh Sahane.

source:http://en.wikipedia.org/wiki/IDBI_Federal_Life_Insurance

date:4/7/2019

time:19:32

Mission
Their mission is to reach out to customers, through empowered & engaged
employees and distributors facilitated by cutting-edge technology, right selling
and seamless service to meet ever evolving needs.

Positioning Statement

“Look ahead Stay ahead”

2
 KEY MILESTONE

March March March

March
October 2017: with
2013:Breaks 2014: 2015:IDBI
December 2016: Rs 1565
March even within Federal
2007:Licence moves to a crore in
Records a crosses:Rs
2008:First 5 years; bigger total
Received profit of 1000 crore premium,I
policy sold among the
from IRDA Rs 80 modern DBI
fastest in the in total Federal
office
crore business registered
industry
27%

Total Premium (in cr.) Net profit (in cr.)

9,107 1,933
1,783
7,503 1,565
6,090
1,240
4,893 1,070
4,383

3
AWARDS

IDBI Federal life Insurance

honoured as Mr. Vighnesh shahane, MD & CEO
the ‘Service Provider of the Year 2019’ at recognised as the ‘Best Chief Executive
the Assocham Insurance Excellence Officer Life – 2018’ at the Insurance Alertss
Awards 2019 Excellence Awards 2019

Ms. lalitha Bhatia,COO recognised as IDBI Federal’s Annual report

for FY2017-
the ‘Best Woman COO of the Year 2018’ 18 bags the award for ‘Best Annual &
by Insurance Alertss CR Report of the Year’ at the Corporate
Communication & PR Summit 2019

4
Some numbers that define IDBI Federal life insurance co.
ltd
1. 3100+ branches in pan India(includes IDBI bank and Federal bank branches).
2. Total policies issued more than 13 lakhs.
3. Total sum assured more than 87,700 crore.
4. Assets under management Rs 9,107 crore.
5. Capital base Rs 800 crore.
6. Employees more than 1700
7. Advisors 14,395

Source:IDBI annual report 2018-19

Date:13.07.2019

Time:19.11

Numbers that define Future Focus strategy of IDBI

Federal Life insurance Co. ltd
1. Individual new business premium grew 8%
2. 31% growth in net profit.
3. 19% renewal premium growth.
4. Recorded the 7th consecutive years of profit.
5. 85% persistency for 13th month, amongst the best in the industry.
6. 21 new HR initiatives lunched.
7. Operating cost to gross premium stood at 14%
8. 21% growth in assets under management.
10. 10% maiden dividend proposed.
11. Successfully maintained 13th rank in new business (individual life).
Source:IDBI annual report 2018-19

Date:13.07.19

Time:19:11

5
SWOT ANALYSIS

1.Alliance between IDBI and Federal bank

giving a strong brand baking.
2. Huge baskets of product range which are
suitable to all age and income groups.
STRENGTH 3. Superior customer service.
4.Strong and well spread network of
qualified intermediaries and sales person.

1. Lack of awareness about insurance on

people.
2. Less penetration in rural market.
3. Low customer confidence on private
WEAKNESS players.
4. Low brand awareness due to lack of
advertisement.

1. Fast growing economy and increasing per

capita income in India.
2. Growing rural and semi urban market.
3. Insurable population.
OPPERTUNITIES 4. Inflow of management and financial
expertise from the foreign companies.

1.Changing government regulations and

financial crisis like recessions.
2. Increase in insurance frauds.
3.Stiff competition in market.
THREAT

6
PRODUCT PORTFOLIO

Incomesurance plan 6 pay

Childsurance Savings Plan

Lifesurance Savings Plan

Wealthsurance Plan

7
 IDBI FEDERAL LIFESURANCE SAVINGS INSURANCE PLAN.

A long term savings plan with bonuses, guaranteed additions and insurance protection.
Often the first step towards a long and arduous journey is the toughest. However, once you
have taken that first stride,the rest of the journey seems easier and more enjoyable.
Everything around us , However,hints at a completely different approach. For instance ,little
drops of water make a mighty ocean, many bricks together makes a massive building and many
indivisuals together make a formidable army.With your investments,it is the same approach
that will ensure you build the right corpus to fulfil your dreams for yourself and your family –
start small save big!

Presenting IDBI Federal Lifesurance Savings Insurance Plan – a fixed term non-linked
participating endowment plan that provides you with the twins benefits of long term savings
and life cover . With IDBI Federal Lifesurance Savings Insurance plan (referred to as
Lifesurance hence), your small investment will grow to big savings that will help you realise
the dreams that you have for yourself and your family.This plan also offers you the benefit of
life cover that will provide financial security to your family in your absence.

Benefits:
1. Safeguard of savings with
guaranteed additions.
2. Added bonous to boost savings
3. Double protection with accidental
death benefit.
4. Enjoy discount on premium
5. Tax benefit on premium paid.

Source: https://www.idbifederal.com/sites/default/files/QC-
2942%20IDBI%20Life%20advantage%20plan%20brochure_R9.pdf

Date:13.07.19

time:20:13

8
 IDBI Federal Life Insurance Guaranteed Wealth Plan
IDBI Federal Life Insurance Guaranteed Wealth Plan is a long-term life insurance plan which
comes with a component of savings element that assures you of guaranteed returns on your
investment. This plan can be used to actualise life’s milestones like children's education and/or
marriage, going for a holiday, renovation of house, buying your dream car etc. Above all the
plan is simple to understand, easy to acquire and maintain.

Benefits:
1. Benefit of paying only for the
first 7 years of the policy
2. Get your family financially
secure with a life cover for 14
years
3. Enjoy guaranteed benefits
irrespective of market conditions
4. Flexibility to receive benefits as
lump sum or annual pay outs
5. Get tax benefits on premiums
paid

On death of the insured person, provided the policy is in force and all premiums have been
paid in full, the beneficiary would be paid the Death Benefit.
Death Sum Assured is highest of:
 Guaranteed Sum Assured on Maturity (Maturity Sum Assured),
 10 times of Annualized Premium,
 105% of all Premiums paid as on the date of death,
 Any absolute amount assured to be paid on death which is Basic Sum assured.

Source: https://www.idbifederal.com/sites/default/files/QC-
1878%20Guaranteed%20Wealth%20Plan%20Brochure_R16.pdf

Date:13.07.19

Time: 20:21

9
IDBI Federal Life Insurance Wealthsurance Growth
Insurance Plan

IDBI Federal Life Insurance recognises your expectation and presents to you IDBI Federal
Wealthsurance Growth Insurance Plan SP. A one-time investment plan, whereby paying the
premium once, you can enjoy the growth of your wealth. The plan also offers you life cover
providing your loved ones with financial protection in case of any eventuality. In a nutshell, it
is an ideal plan if you want to maximise the potential of your windfall, rather than let it sit idle.

Benefits:
1. Convenience of one-time payment
2. Option to choose your investment amount as per your financial goal.
3. Flexibility to manage your investments
4. Guaranteed loyalty additions for better growth on your savings
5. Financial security for your loved ones
6. Tax benefits, on the premium paid as well as on the benefits received

https://www.idbifederal.com/sites/default/files/Wealthsurance%20Growth%20Insurance%20Plan%20SP_Brochure_1.pdf

10
 Young Star Advantage Plan

A life insurance plan specially designed to financially secure your child’s future by ensuring
that the plan continues even in your unfortunate absence. In today’s fast-paced life where the
costs and expenses are on the rise, one really needs to plan his/her future in the best possible
manner and also ensure that there is adequate life cover so that the dreams of the family
members are never compromised. The cost of living is on the rise and so is the cost of
education. As responsible parents, it is our duty to provide our children with the best possible
lifestyle and education, and for all this we need a plan which will allow us to start saving today
to take care of tomorrow’s needs. Presenting, IDBI Federal Life Insurance Young Star
Advantage Plan, a life insurance plan designed to help you ensure that your child’s future
financial needs are fulfilled even in case of your unfortunate absence. This plan gives you
guaranteed annual payouts to aid the crucial milestones in your child’s life.

Benefits:
1. Guaranteed annual payouts to fund
important milestones
2. Immediate payout of lump sum on
death of the life insured
3. Guaranteed Additions and Bonuses to
boost your savings
4. Tax benefits2 may be available under
sec 80C and sec 10(10D) of the Income
Tax Act, 1961
5. No future premiums payable post life
insured’s death

In the unfortunate event of your death during the term of the policy provided the policy is in force, the
death benefit is paid immediately. Additionally, no future premiums are payable and your nominee
would be paid the Guaranteed Annual Payouts on their respective due dates. Your policy will
continue to participate in the surplus of the participating policyholder’s life fund and the vested simple
reversionary bonuses, if any, along with the interim bonus, if any and terminal bonus, if any, would be
paid at the end of the term. Accrued Guaranteed Additions would be paid at the end of the term as
well.

Source: https://www.idbifederal.com/sites/default/files/QC-
2730%20IDBI%20Young%20Star%20Advantage%20Plan%20R9.pdf

Date: 13.07.19

Time: 20:11

11
 Wealth Plus Critical Protection Plan

As an elite individual, you need a plan that offers you maximum benefit and protection, making
sure that your money does all the hard work, so that you continue to live your life to the fullest
without any worry. Presenting, IDBI Federal Life Insurance Wealth Plus Critical Protection
Plan, a unit linked insurance plan which helps you strike an apt balance between wealth
accumulation and protection along with an additional critical illness benefit. Along with a life
cover, this plan helps you stay on top of the market changes. This is because, they provide a
combined benefit of life cover along with investment growth which provides you and your
loved ones the cushion of financial protection to safeguard life’s objectives.

Benefits:
1. Dual benefit of life cover and long
term investment returns
2. Option to choose premium payment
term as per convenience
3. Enhanced protection offered by
Critical Illness Benefit
4. Choose from a wide range of funds as
per your risk appetite
5. Unlimited free switches and premium
redirection

In case of death of the life insured during the policy term, provided the policy is in-force, the
Death Benefit will be paid to the beneficiary and the policy will terminate.
During the Policy Term, if life insured is diagnosed with any of the pre-defined 9 critical
illnesses, a lump sum amount will be paid out immediately to help with the treatment and
other lifestyle changes that may arise due to the illness. The future premiums need to
continue to be paid by the Policyholder to keep the policy in force for the remaining term. On
payment of Critical Illness Sum Assured, provided the policy is in force and all premiums are
paid in full, the plan will continue till Maturity with the applicable life cover and no further
Critical Illness benefit shall be payable during the remaining policy term.

https://www.idbifederal.com/sites/default/files/QC-
2392%20%20IDBI%20%20WPCI%20Plan%20Brochure_R19.pdf

Date: 13-07-19

Time:22.17

12
CHAPTER 2

Life insurance industry

Introduction
There are currently, a total of 24 life insurance companies in India. Of these, Life Insurance
Corporation of India (LIC) is the only public sector insurance company. All others are private
insurance companies. Many of these are joint ventures between public/private sector banks and
national/international insurance-financial companies.
Private life insurance companies in India got access to the life insurance sector in the year 2000.
Most private players have tied up with international insurance giants for their life insurance
foray.

Claim settlement ratio as per 2016-17

1. LIC – 98.31%
2. AEGON Life insurance – 97.11%
3. HDFC standard life insurance – 97.62%
4. SBI Life insurance – 96.69%
5. IDBI Federal Life insurance – 90.33%

Source: https://www.policybazaar.com/insurance-companies/life-insurance/

13
 SWOT ANALYSIS

1.A range of new product has been lunched to

different segments of the market.
2.The indian insurance market has great growth
potential,with life premiums predicted to reach
US$230 billion by 2025.
3.There has been increased in proportion of
STRENGTH household assets budgeted for insurance.In fact there
was a 71% increase from 2001 to 2011, according to
IRDA .Indian has large population with an increase
in its per capita income.
4.India’s middle income group is rapidly increasing
and would be emerging as profitable market.
1.Lake of consumer knowledge which creates a
problem for the consumer to understand which
product is best suitable for an indivisual.
2.Lack of rural market penetration.
3.Terms and condition of policy are not properly
explained to customer resulting in delay in the claim
WEAKNESS process.
4.The profitability of the private sector life insurance
companies have been in loses. None of the life
insurance companies are listed on the stock
exchange in india.

1.At present the rural areas of india are non

extensively covered in life insurance.
2.It is seen that the trend of buying life insurance
online is slowly increasing in india.
3.Emerging channel of selling insurance is through
joint ventures with bank. It helps to create trust
OPPERTUNITIES among the consumer base of the bank. It helps to
create trust among the consumer base of the bank.
4.The rising GDP and increase in the per capita
income of population.

1.Steep competition with various products to attract

customer.

2.Pricing wars between the companies confusing the

customer.
THREAT

14
 PORTER’S FIVE FORCES MODEL
1.The market consist of a few large supplier.
2.The product or service is unique.
3.Customers are fragmented and not organiged
into buyer group.
4.Switching costs are high.
Supplier’s Bargaining Power 5.The buyers are under threat low entry costs to
their market and risk of being swallowed up by
big suppliers is present.

1.They buy large volumes and there is a

concentration of buyers
2.There’s a small number of suppliers
3.The product being supplied is undifferentiated
and has high fixed costs of delivery.
Buyer’s Bargaining power 4.Switching cost are generally low.

1.Initial investments required and fixed

costs of operating.
2.Minimum size requirements to achieve
profitability.
3.Licencing requirements.
4.Existing players control of the market or
Threat of new entrants key resources.
5.High switching cost.

1.Brand loyalty of customers

2.Switching costs
3.Belief in the effectiveness of new
products/services.

Threat of substitute

1.There are many suppliers.

2.Competing firms have similar strategies.
3.Barriers of exiting the market are high.
4.Products and services undifferentiated
leading to focus on price over service.
Competition between 5.Low market growth, so growth is usually
suppliers only achieved by taking market share from
another firm.

15
 FOREIGN DIRECT INVESTMENT IN INDIA
Insurance in India is a growing and flourishing industry with both international and national players competing
and growing at rapid rate together with Banking and Real Estate, it constitutes 12.9% of Gross Domestic Product
(GDP) in India.

Insurance sector was liberalized in 2001. Even after the liberalization of the insurance sector, the public sector
insurance companies have continued to dominate the insurance market. They were enjoying 90% of market share.
FDI in Insurance sector would increase the penetration of insurance in India. FDI can meet India’s long term
capital requirements o fund the buildings and infrastructures.

Aside from being a basic driver of monetary development, foreign direct investment (FDI) is a noteworthy
wellspring of non-obligation budgetary asset for the financial advancement of India. Remote organizations put
resources into India to exploit generally bring down wages, extraordinary speculation benefits, for example,
charge exclusions, and so on.
The government administration has taken numerous activities as of late, for example, unwinding FDI standards
crosswise over parts, for example, protection, PSU oil refineries, telecom, control trades, and stock trades,
among others.

According to Department of Industrial Policy and Promotion (DIPP), the total FDI investments India received
during April – September 2016 rose 30 per cent year-on-year to US$ 21.6 billion, indicating that government’s
effort to improve ease of doing business and relaxation in FDI norms is yielding results.

During April – September 2016, India received the maximum FDI equity inflows from Mauritius (US$ 5.85
billion), followed by Singapore (US$ 4.68 billion), Japan (US$ 2.79 billion), (US$ 1.62 billion), and USA (US$
1.44 billion).

Impact investments in India is expected to grow at a compound annual growth rate (CAGR) of 20-24 per cent to
touch US$ 6-8 billion by 2025, from US$ 1 billion in 2015.

Insurance sector has the capability to raise long term capital from the public as it is the only market in
which people invest their money for a long period of time, say 30 years. An increase in FDI in
insurance sector would indirectly be a boom for the Indian Economy.

16
 FUTURE PROSPECTS

Market Structure
There are 49 insurance companies operating in India as of September 2011. Out of which, 24 are in
life insurance business, 24 in general insurance business, and remaining ones in re-insurance business.
General Insurance Corporation of India (GIC) is the sole national re-insurer.
Growth Predictions
The Indian insurance sector is expected to grow at a rapid pace to reach around US$ 400 billion in
premium income by 2020, according to a report released by an industry body and the Boston
Consulting Group (BCG). As per the report, this would make India one of the top three life insurance
and top 15 non-life insurance markets by 2020.
Career Prospects
There are number of career opportunities available in Indian insurance sector. Insurance companies
have job openings in various fields such as marketing, distribution, actuarial, underwriting, operations
and investing departments.

A graduate in the area of finance, marketing, or sales can easily get the job in the insurance
companies. They can earn anything between Rs. 8000 - 20,000 per month in the starting months. Most
of the companies offer a very good remuneration and heavy incentives to retain the qualified
candidates.
Candidates can also take help of various recruitment agencies operating in India for searching the
right job. These job consultancies work on the behalf of companies having job requirements. The job
agencies offer decent job opportunities in various sectors with top most companies and a good salary
package according to candidate’s profile.
Recent Initiatives
The Finance Minister has approved a proposal to raise foreign direct investment (FDI) in insurance
and pension sectors to 49 percent from the existing 26 percent to encourage more investment in the
sector.

The Securities and Exchange Board of India (SEBI) has relaxed rules to allow more life insurers to
launch public offers.
The Government's Financial Sector Legislative Reforms Commission (FSLRC) is working on new
insurance policies' framework that would end LIC's monopoly, empower IRDA and establish a legal
system to handle any lapses at insurers' end.
Road Ahead
The Indian insurance industry is booming, with several national and international players competing
and increasing operations in the country. The Mckinsey report on the outlook for insurance sector in
2012 predicts an exponential growth for the insurance industry in 2012 due to contributing factors
such as increasing household incomes, higher premiums, growing technology, liberal policies, etc.
This will result in more
career opportunities in the coming years.

Source:https://blogs.siliconindia.com/abcconsultants/Career/Prospects-of-Insurance-Sector-in-
India-bid-z2yMlIn949934343.html

17
CHAPTER 3
FINANCIAL INSTRUMENTS
FIXED DEPOSITS

FEATURES:

Interest rates 3.5%-6.90% (different for different bank)

Tenure 7 days to 10 days
Initial investment/deposit Minimum: Rs 100 (Varies bank to bank)
Maximum: No Limit
Deposit frequency Not applicable
Deposit modes Via cash, online transfer
Nomination Applicable

Loan facility Applicable 90% of the principal amount

Renewal Not applicable
Joint accounts Can be in single mode or joint mode
Withdrawals Premature withdrawal is but with a penalty
Tax advantage Under section 80C of IT Act,1961,account
can claim tax benefits.
Interest earned is Taxable(TDS).To prevent
TDS FD holder can submit either from 15G
or 15H to the bank.

Fund transfer Only FD accounts in post office are

transferable from one branch to another.

Source:http://www.policybazaar.com/fixed-deposit/ Date:4/7/2018 time:21:13

18
BENEFITS:
 Returns of fixed deposits are assured,and there is no risk of loss of principle
 There is no effect of market fluctuations on your fixed deposits , which ensures
greater safety of your investment capital.
 We can get benefit from higher interest rate offered by company fixed deposits.
 Some bank also offer greater returns for senior citizens.

WHO CAN APPLY:

 Residents Indian citizen.
 Hindu undivided family (HUF)
 Sole proprietorship, partnership firms and companies including group companies
 Club,associations and societies.

RECURRING DEPOSITS
FEATURES:
Interest rate 6.96%-8.00% ( varies on basis of deposits
term and investment amount)

Tenure 3 months to 10 years

Initial investment/deposits Minimum: Rs 100 (Varies bank to bank)
Maximum: Rs 15 lakh per month

Deposit frequency Monthly

Deposit mode Via cash,online transfer,cash
Nomination Applicable
Loan facility Applicable 90% of the principal amount
Reneweal Not applicable
Joint accounts Can be in single mode or joint mode
Withdrawal Premature withdrawal not allowed.But bank
may allow closing the account before
maturity period sometimes with a penalty
Tax Advantages No tax will be deducted in case interest
earned on RD is upto 10,000.
Interest earned is taxable(TDS).To prevent
TDS FD holder can submit either form 15G
or 15H to the bank
Fund transfer Not applicable

19
BENEFITS:
 Useful for planning short term goals.
 To have a ease of investment.
 We can apply online

WHO CAN APPLY:

 Resident Indian citizen
 Hindu Undivided Family (HUF)

KISAN VIKAS PATRA (KVP)

FEATURES:
Interest rate 7.6%
Tenure 100 months or 8 years and 4 months
Initial investment/deposits Minimum:1000
Max: No limit

Deposit frequency At the starting of opening account

Deposit mode Via cash
Nomination Applicable
Loan facility Applicable. 90% of the principal amount
Reneweal Not applicable
Joint accounts Can be in single mode or joint mode
Withdrawal Premature withdrawal allowed.Lock in
period is 30 months or 2 years 6 months
Tax Advantages No tax deduction on entire money received
at maturity.
Interest earned is taxable (TDS).To prevent
TDS FD holder can submit either form 15G
or 15H to the bank or post office.
Fund transfer It is transferable

20
 BENEFITS:
 No upper limit: There is no cap on the amount that you can invest in KVP. Depending on
the purchasing power, a person can buy any amount.
 Collateral: Kisan Vikas Patra (KVP) certificate can be presented as collateral against loans.
Investors can use the same to obtain a loan from banks.
 Allows premature withdrawal: Applicants have the option to withdraw the amount
prematurely in KVP. The lock-in period is 2 years and 6 months.

WHO CAN APPLY:

 The applicant must be an adult and a resident Indian.
 The applicant can apply for Kisan Vikas Patra in their own name or on behalf of a minor.
 Trusts are eligible to invest in Kisan Vikas Patra. HUFs (Hindu Undivided Family) and NRIs
are not eligible to invest in KVP.

MONTHLY INCOME SCHEME

FEATURES:
Interest rate 7.3%
Tenure 5 years
Initial investment/deposits Minimum:Rs 1500
Maximum: Rs 4,50,000
Deposit frequency At the starting of opening account
Deposit mode Via cash
Nomination Applicable
Loan facility Applicable.90% of the principal amount
Reneweal Not applicable
Joint accounts Can be single mode or joint mode
Withdrawal Premature withdrawal allowed.Lock in
period is 1 year.
Withdraw the deposit within 1 year – you
get nothing
Withdraw the deposit within 1 to 3 years –
you get your deposit back after a nominal
2% deduction (as a penalty)
Withdraw the deposit after 3 years – you get
your deposit back after a nominal 1%
deduction (as penalty)
Tax Advantages No tax benefit
No TDS on the interest amount
Fund transfer It is transferable.

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BENEFITS:
 Income can be earned in the form of interest every month.
 Can be easily transferable from one post office to another
 Money is safe until maturity as it is government backed scheme.

WHO CAN APPLY:

 The only pre-requisite is that the investor should be a resident of India.
 NRIS cannot make investment in POMIS.
 The best thing about this post office scheme is that the lower cap on the entry age is
set at 10 years. So. Even a 10 years old minor can open a POMIS account in his
name.The maximum amount the minor can Invest is Rs 300000.

PUBLIC PROVIDENT FUND

FEATURES:
Interest rate 7.9% (2017-2018)
Tenure 15 years
Initial investment/deposits Rs. 100
Deposit frequency Every year , for 15 years
Deposit mode Via cash,cheque,PO,DD,online fund
transfer
Nomination Allowed
Loan facility From 3 years to year 6
Reneweal Allowed for an extra 5 years at a time
Joint accounts Not allowed
Withdrawal Every year from year 7
Complete withdrawal of funds can be made
only at maturity.
Tax Advantages Interests are tax free.
Deposited amounts are tax deductible U/S
act 80C of income tax act
Fund transfer Easily transferred between bank branches or
post office for free.
Funds or accounts cannot be transferred
between people.

BENEFITS:
 It’s a long term investment plan
 Very useful for retirement plan
 It’s a government backed plan so risk is very low.

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WHO CAN APPLY:
 Any individual who is a resident of India can open a PPF account.
 PPF accounts can also be opened by parents for their minor children.
 NRIs cannot open PPF accounts. However, a resident Indian who has become
an NRI after opening a PPF account can continue the account till maturity.
 Opening of joint accounts and multiple accounts are not allowed.

NATIONAL SAVINGS CERTIFICATE (NSC)

FEATURES:
Interest rate 7.9%
Tenure 5 years to 10 years
Initial investment/deposits Minimum: Rs 100
Maximum: No limit
Deposit frequency Every years for 5 years or 10 years
Deposit mode Via cash we have to buy certificate
Nomination Allowed
Loan facility Allowed
Reneweal Not allowed
Joint accounts Allowed
Withdrawal At the time of maturity.Early withdrawal
allowed with penalty
Lock in period same as tenure
Tax Advantages Interest are Tax free.
Deposited amounts are tax deductible U/S
act 80C of the income tax act.
Fund transfer Easily transferred between bank branches or
post offices.
Fund/accounts can be transferred between
people.

BENEFITS:
 There is no upper limit on the amount that can be invested in these certificate.
 If certificates are lost or damaged, duplicates can be arranged for.
 Investment in an NSC come under 80C of the IT act and afford the investors tax
benefit.
 The interest earned is compounded and reinvested in the scheme by default which
means that without purchasing extra certificates, you can increase the invested
amount.

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WHO CAN APPLY:
 Resident of India
 NRI not allowed
 Above the age of 18. If minor guardian as nominee.

MUTUAL FUNDS
A mutual fund is a type of financial vehicle made up of a pool of money collected from many
investors to invest in securities such as stocks, bonds, money market instruments, and other
assets. Mutual funds are operated by professional money managers, who allocate the fund's
assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's
portfolio is structured and maintained to match the investment objectives stated in its
prospectus.

Mutual funds give small or individual investors access to professionally managed portfolios of
equities, bonds and other securities. Each shareholder, therefore, participates proportionally in
the gains or losses of the fund. Mutual funds invest in a vast number of securities, and
performance is usually tracked as the change in the total market cap of the fund—derived by
the aggregating performance of the underlying investments.

Sponsor: A sponsor is a body corporate who establishes a mutual fund. It may be one person

acting alone or together with another corporate body. Additionally, the sponsor is expected to

contribute at least 40% to the net worth of the AMC. However, if any person holds 40% or

more of the net worth of an AMC, he shall be deemed to be a sponsor and will be required to

fulfill the eligibility criteria specified in the mutual fund regulation.

Board Of Trustees: A mutual fund house must have an independent Board of Trustees, where

two-thirds of the trustees are independent persons who are not associated with the sponsor in

any manner. The Board of Trustees of the trustee company holds the property of the mutual

fund in trust for the benefit of the unit-holders. They are responsible for protecting the unit-

holder's interest.

Asset Management Company: The role of an AMC is highly significant in the mutual fund

operation. They are the fund managers i.e. they invest investors' money in various securities
(equity, debt and money market instruments) after proper research of market conditions and

24
the financial performance of individual companies and specific securities in the effort to meet

or beat average market return and analysis. They also look after the administrative functions of

a mutual fund for which they charge management fee.

Custodian: The mutual fund is required by law to protect their portfolio securities by placing

them with a custodian. Nearly all mutual funds use qualified bank custodians. Only a registered

custodian under the SEBI regulation can act as a custodian to a mutual fund.

Open-ended Fund/ Scheme:

An open-ended fund or scheme is one that is available for subscription and repurchase on a
continuous basis. These schemes do not have a fixed maturity period. Investors can
conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared
on a daily basis. The key feature of open-end schemes is liquidity.

Close-ended Fund/ Scheme:

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open

for subscription only during a specified period at the time of launch of the scheme. Investors

can invest in the scheme at the time of the initial public issue and thereafter they can buy or

sell the units of the scheme on the stock exchanges where the units are listed

25
CHAPTER 4
PROJECT DESIGN AND METHODOLOGY
Research methodology is a set of various methods that to be followed to find out various
information regarding market status of different products.

Area of Study
The study is exclusively done in the area of finance and marketing.Definite care has been taken
while asking question to be eligible customers and not to irritate them.

Primary Source: The primary data was collected by means of online survey. Questionnaires
were prepared and sent over social media and e-mail; the responses were recorded in a google
sheet. The questionnaires contained few questions which reflect on the type of quality of
services provided by IDBI FEDERAL to the customers.It also contained questions regarding
perception of the customers to different financial products.The filled-up information was later
analysed to obtain the required interpretation and findings.The questionnaire is attached as
Annexure

Secondary Source – In order to have a proper understanding of the customer service of IDBI
FEDERAL, a depth study was done from the various sources such as a lot of data is also
collected from the brochures and online website of IDBI FEDERAL.

RESEARCH DESIGN
The research design is exploratory till identification of customer services parameters.Later it
becomes descriptive when it comes to evaluating customer perception of financial products
with respect to Life insurance.

Descriptive research ,also known as statistical research,describes data and characteristics about
the population or phenomenon being studied.Descriptive research answers the questions
who,what,where,when,how.Although the data description is factual,accurate and systematic,
the research cannot describe what caused a situation .Thus,descriptive research cannot be used
to create a casual relationship,where one variable affects another.In other words , descriptive
research can be said to have low requirement for internal validity.The description is used for
frequencies,averages and other statistical calculations.Often the best approach,prior to writing
descriptive research,is to conduct a suvey investigation.Quantitative research often has the aim
of description and research may follow-up with examinations of why the observations exist
and what the implication of findings are.

26
RESEARCH SAMPLE:
SAMPLING PLAN:
Since it is not possible to study the whole universe,It becomes necessary to take sample from
the universe to know about its characteristics.

Sampling Units: Residents of Kolkata and family members.

Sample Technique: Random Sampling

Research Instruments: Structured questionnaire

Contact method: Online & Phone interview

SAMPLE SIZE:
The survey was conducted online with respondents mainly from my family,friends and
relatives. (Approx 100 respondents)

DATA COLLECTION TOOL

Data was collected from various customers through online as well as phone interview. Some
other information was collected through secondary data also.Data was collected through a
structured questionnaire.

SCOPE OF STUDY

The study is only for IDBI FEDERAL LIFE INSURANCE COMPANY LTD. Confined to a
particular location and a very sample of respondents. Hence the findings cannot be treated as
representative of the entire banking industry . Respondents may give biased answers for the
required data.Some of the respondents did not like to respond.This was one of the most
important limitations faced,as it was difficult to analyse and come at a right conclusion.In our
study we have included 100 customers because of time limit.

27
CHAPTER 5
INTERPRETATION

From the survey of 50 responses I have found out that 66% of the
responder has insurance policy while 34% does not have the insurance
policy.
We need to convert these 34% respondent to purchase at least one
insurance for the future risk or for investment purpose.

28
From the above question we have found out that 55% of the respondent
has endowment or money back plan.5% of the respondent has whole
life insurance plan.7% of the respondent have term insurance plan.22%
of the respondent do not have any insurance policy.

From here we can see that the knowledge about benefit of insurance or
seeing insurance as investment purpose has to be increased so that 22%
of the respondent that don’t have life insurance policy can get
converted.

Also very few people are aware about ULIP which is a marked linked
product. Being a market linked product the risk factor of investment is
high.We can see from the graph that respondents are not ready to take
risk.

29
From the above graph we have found that 57% of the respondent
believes their main motive for purchasing life insurance is financial
security for family.They believe in their absence life insurance policy
can help their family to carryout the daily needs.12% of the respondent
believes that not only financial security for family is needed but life
insurance can be used to save tax,as pension,as a steady income for
future and also for wealth creation.

From here we can see that more number of respondent are concerned
for their family safety in their absence.They want to secure their near
and dear ones incase of unforeseen cicumtances.For them saving tax or
steady income or wealth creation comes as secondary option.

30
From the above graph we can depict that 74% of the respondent looks
for the money back gurantee while buying the insurance policy.They
like to use the life insurance policy as one of the main investment tool
to fullfill future dreams.11% of the respondent seek for low premium
feature while buying insurance policy.13% of the respondents looks for
larger risk coverage while buying life insurance policy

31
From the above graph we can depict that 62% respondents believe that
they would like to stay invested in the investment plan for more than 7
years. They believe long term investment helps them to make their
family secure as well as fulfil their future plans.35% respondent like to
stay invested for 3-7 years as they want their money to grow faster with
less span of time.

32
From the above graph we see that 83% of the total respondents believes
that insurance is the best form of investment as it provides higher
returns on investment as compared to bank deposits and other form of
investments.2% believes bank deposits is the best form of investment
because they believe their money is safe in bank.

33
From the above graph we can see that 47% of the respondents looks
for a trusted name, friendly service, good plans and accessibility when
they start looking for insurance policy. 11% looks for good plans in
an insurance company. 38% respondents looks for friendly service
and responsiveness while buying the insurance policy.

34
FINDINGS
 66% of the respondents have life insurance.
 55% of the respondents have empowerment and money back plan.
 57% of the respondents believes financial security of the family is the
important motive when they purchase life insurance.
 83% of the respondents believes that they consider insurance as both
investment and savings option.
 74% of the respondent will consider money back guarantee feature of
life insurance policy while buying.
 62% of the respondents believe 25-35 years is the right age to buy
insurance.
 68% of the respondents are satisfied with their life insurance policy.
 70% of the respondents bought or would buy a life insurance policy
when insurance company or agent approaches the customer
 84% of the respondents are satisfied with the transparency of their
existing insurance plan.
 60% of the respondents prefer to stay invested for more than 7
years.
 83% of the respondents believes insurance is the best form of
investment.
 94% of the respondent believes it is necessary to have life insurance
in present scenario.
 52% of the respondents looks for a trusted name , friendly service,
good plans and accessibility in life insurance company.
 56% of the respondents agrees that insurance product have high rate
of returns as compared to other savings instrument.
 46% of the respondents agrees that the amount of premium they are
paying is low compared to the benefits they are getting.
 84% of the respondents have heard about IDBI Federal Life
Insurance Co. Ltd.

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CHAPTER 6

RECOMMENDATATION

INDUSTRY
1. More transparency in premium disclosure. The company should give
breaks up of premium amount like expense ratio, mortality charges and
investment.
2. Bench marking of mortality costs against mortality tables that should
be created by individual company.
3. Insurance company should pay reasonable amount to policy holders
on surrenders of policy.
4. Insurance company should disclose asset allocation and portfolios
on their websites.
5. There should be offline and online risk meter to analyse the risks in
ULIPS.
IDBI FEDERAL LIFEINSURANCE CO. LTD
1. The number of branches of company should increase in pan India to
reach out to more customers.
2. Lack of advertisement. Advertisement is one of the marketing
instruments that should be used by company.
3. Increase in number of product portfolios with rider benefit.
4. Targeting rural market as it is one of the emerging market of India.

36
 CONCLUSION

Life insurance is one of the best product of investment in the present

scenario. But while doing this product I found out that consumer lacks
much knowledge regarding life insurance .They believe it is just
another investment where money is involved. It is the duty of the
company to make the consumer understand the importance and benefits
of having insurance. Another thing that I found out is that after bank
laundering case in recent times people have started fearing investing in
insurance company. The challenges for insurance companies are
1. Gaining trust of customer.
2. Giving more benefit with a minimum premium
3. The importance of insurance at present times.
4. Correct financial advice and guidance.
5. Benefits and return the consumer will get by investing low amount.
6. Exploiting rural market.

India is a growing economy. The per capita income of a people has

increased. So it is a great opportunity for a insurance company.

37
BIBILIOGRAPHY

1. IDBI Federal Life Insurance annual report 2018-19

2. http://www.idbifederal.com/

38
 ANNEXURE

NAME:
AGE:
GENDER:
EDUCATIONAL QUALIFICATION
PROFESSION: BUSINESS PROFESSIONAL SERVICE OTHERS
ANNUAL INCOME: <2 LAKH 2-5 LAKHS 5-10 LAKHS >10 LAKHS
1.Do you have insurance policy ?
a)Yes
b)No

2.What type of insurance cover you have ?

a)Endowment/Moneyback/Pension plan
b)ULIP-Market linked insurance plan
c)Term insurance plan-Only Death benefit
d)Whole life insurance plan
e)I am not sure about the detail of my insurance plan
f)I do not have a life insurance policy

3.What according to you is the most important motive when you purchase a life
insurance policy ?
a)Save Tax
b)Financial security for family
c)Pension
d)Wealth creation
e)Steady income for future
f)All of the above reasons.

39
4.Which feature of life insurance policy will you consider while buying?
a)Moneyback gurantee
b)Larger Risk coverage
c)Low premium
d)Easy access to agents
e)Company’s credibility

5.Do you consider insurance as an investment option or savings option?

a)Investment- I want my money to grow
b)Savings- I want my money to be safe
c)Both- I want my money to be safe as well as grow.

6.According to you what is the right age to buy insurance ?

a)<25 years
b) 25-35 years
c)35-45 years
d)>45 years

7.Are you satisfied with your life insurance policy?

a)Highly satisfied
b)Satisfied
c)Not Satisfied

8.How have you bought or would buy a life insurance policy?

a)Customer approaching insurance company or agent.
b)Insurance company/agent approaching the customer.

9.Are you satisfied with the transparency of the existing insurance plan?
a)Yes
b)No

40
10.How long would you prefer to stay invested in an insurance/wealth maximization
plan?
a)Less than a year
b)1-3 years
c)3-7 years
d)More than 7 years

11.According to you which are the best for the investment?

a)Insurance
b)Bank Deposits
c)Jewellery
d)Shares
e)Fixed assets
f)Bonds

12.Do you really think the necessity of insurance in today’s scenario?

a)Very essential
b)Essential
c)Not required

41
13.What would you look for a insurance company?
a) A trusted name
b)Friendly service and responsiveness
c)Good plans
d)Accessibility
e)All of the above

14.Highly rate the return of insurance products as compared to the other savings
instruments(fixed deposits in banks,national saving certificates etc)
a)Strongly agree
b)Agree
c)Neither agree nor disagree
d)Strongly disagree
e)No
f)May be

42