Rajasthan Technical University, Kota

Project Study Report

On

Training Undertaken at

Kotak Life Insurance

Titled
“The study of Portfolio of Kotak Life Insurance”

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By: - Submitted To:-

JITENDRA KUMAR Miss. Bhawana Maheshwari
MBA Part III Asst. Prof.

2008-2010
LUCKY INSTITUTE OF PROFESSIONAL STUDIES, JODHPUR

1
 Rajasthan Technical University, Kota

Project Study Report

On

Training Undertaken at

Kotak Life Insurance

Titled
“The study of Portfolio of Kotak Life Insurance”

Submitted in partial fulfillment for the

Award of degree of

Master of Business Administration

Submitted By: - Submitted To:-

JITENDRA KUMAR Miss. Bhawana Maheshwari
MBA Part III Asst. Prof.

2008-2010
LUCKY INSTITUTE OF PROFESSIONAL STUDIES, JODHPUR

2
LUCKY INSTITUTE OF PROFESSIONAL STUDIES, JODHPUR
3
 PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated
debate for some years. The policy makers where in the catch 22 situation wherein for one
they wanted competition, development and growth of this insurance sector which is
extremely essential for channeling the investments in to the infrastructure sector. At the
other end the policy makers had the fears that the insurance premium, which are
substantial, would seep out of the country; and wanted to have a cautious approach of
opening for foreign participation in the sector.

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

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

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

Acknowledgement
4
I express my sincere thanks to my project guide, Mr. KAPIL LAKHARA, Sales Manager, in
Kotak Life Insurance, for guiding me right forms the inception till the successful completion
of the project. I sincerely acknowledge him/her/them for extending their valuable guidance,
support for literature, critical reviews of project and the report and above all the moral
support he/she/they had provided to me with all stages of this project.
I would also like to thank the supporting staff of Management Department of Lucky Institute,
for their help and cooperation throughout our project.

(Signature of Student)

Mr. Jitendra Kumar

EXECUTIVE SUMMARY

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I am ‘JITENDRA KUMAR’, a student of ‘Lucky Institute of Professional Studies,
Jodhpur’. I was given the opportunity to pursue my internship in KOTAK LIFE INSURACE
for a period of 40 days. My project is titled “THE STUDY OF PORTFOLIO OF KOTAK
LIFE INSURANCE.”

The basic project objectives are as follows:

 To study consumer investment behavior

 To study brand awareness of Kotak

 Comparison of ULIPs.

 To discuss various new avenues in insurance and find the Market potential of ULIP.

 Identify various group security of portfolio.

 The also main object of this project is collection of fund from where and this fund
invests in which various fund.

For the achieve this object I have done a study. In this study I conduct a survey and take
100 sample sizes. In this survey I take Thirteen (13) major factors related to existing
portfolio of Kotak Life Insurance and among these factor the Five (5) most important
factors is Return on Investment, Financial Health (Company), Comparison with Financial
Products, Tax Saving, and Policy Features.

From the help of this survey I find out the consumer behavior on the bases of Standard
Deviation and Variance of these factors. And with the help of this survey I find out the
consumer want high Return on the lower Risk.

In this report I build manly three type of Portfolio on the base of consumer demand
is: - Aggressive / Risky Fund
Balance / Low Risky Fund
Conservative / Non-risky Fund

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The Aggressive funds prefer a higher risk taker person with the high return. The Balance
funds prefer an average risk taker person. The Conservative funds prefer a low risk taker
person.
The following vital conclusions were derived:

Trust needs to be developed among the customers both as far as the ULIP as a product
is concerned.

Some respondents despite of knowing about ULIP were hesitant to talk on it because
they were not too confident about their knowledge.

That people know that insurance is a tax saving tool.

People prefer to do saving rather than doing investment because high return carry high
risk. So, fixed deposit scheme & government securities is favored by maximum number
of people

Returns on Investment & Financial Health of the company are the 2 most important
factors while buying an INSURANCE PLAN.

Important Recommendations that were suggested are:

The Kotak Life Insurance builds Portfolio on the basis of different age group people.

The proper fundamental and technical analysis of privet securities then it include in the
portfolio for maximum return earn on minimum risk.

Building trust by providing the customers with adequate knowledge about the company
and then the product.

Enhancing the level of awareness in terms of the company, their Partners and then the
product and special emphasis among the female chunk of the population.

Adequate advertisement via appropriate media should be done by the various

companies as is done in the case of mutual Funds.

Regular survey of this kind can help the company to know the response of the people
towards policies.

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Se. no Particulars Page No.

1. Introduction Of The Industry 8

1.1 Life Insurance. 8
1.2 History of Insurance Co. in India 9

2. Introduction Of The Organization 13

3. Research Methodology 23
3.1 Title of the Study 23
3.2 Duration of the Project. 23
3.3 Objective Of The Project. 23
3.4 Type of Research. 24
3.5 Sampling Plan. 27
3.5.1 Sampling Technique. 27
3.5.2 Sampling Units. 28
3.5.3 Sample Size 28
3.5.4 Fieldwork Plan 28
3.6 Scope Of Study 32
3.7 Limitations of Study. 33

4. Facts & Findings 34

5. Analysis & Interpretation 53

6. SWOT Analysis 56

7. Conclusions 58

8. Recommendations & Suggestion 60

9. Appendix 61

10. Bibliography 67

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 INTRODUCTION OF THE INDUSTRY

1.1 LIFE INSURANCE:-

In the last several decades, the life insurance industry has developed a number of
products that combine the protection of life insurance death benefits, with a significant cash
value element. Policies such as universal life, variable life, and universal-variable life allow
an individual to purchase a single financial instrument providing for both life insurance
and long-term accumulation goals. Such policies may serve as a form of “forced
investment" for those who find it difficult to put funds aside on a regular basis, but-who-
routinely-pay-their-bills.

Additionally, life insurance company “annuities,” with either a fixed or variable return, tax-
deferred method of accumulating additional-retirement-funds.

 Uses: Life insurance products are commonly used for long-term

accumulation goals. Available cash values may also serve as an
"emergency reserve," if needed, or a source of loans, since life policies
frequently include features permitting borrowing against these cash
values.

 Risks: Fixed contracts rely on the financial strength of the issuing life
insurance company. Inflation may negatively impact a fixed return
contract. Variable contracts share the risks of the underlying
investments. Loans and withdrawals must be carefully structured to
avoid negative income tax results.

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1.2 History of Insurance Companies in India:-

Insurance has been known to exist in some form or other since 3000 b.c. Babylonian
traders would agree to pay additional sums to lenders, as the price for writing off loans, in
case of shipment being stolen.

The Greeks had started benevolent societies in the late seven centuries AD, to take care of
the funeral and families of members who died. The friendly societies of England were
similarly constituted. The great fire of London in 1666, in which more than 13000 houses
were lost, gave a boost to insurance and the first fire insurance company, called the fire
office, was started in 1680.

In India, Insurance is a national matter, in which life and general insurance is yet a booming
sector with huge possibilities for different global companies, as life insurance premiums
account to 2.5% and general insurance premiums account to 0.65% of India's GDP. The
Indian Insurance sector has gone through several phases and changes, especially after
1999, when the Govt. of India opened up the insurance sector for private companies to
solicit insurance, allowing FDI up to 26%. Since then, the Insurance sector in India is
considered as a flourishing market amongst global insurance companies. However, the
largest life insurance company in India is still owned by the government.

The history of Insurance in India dates back to 1818, when Oriental Life Insurance
Company was established by Europeans in Kolkata to cater to their requirements.
Nevertheless, there was discrimination among the life of foreigners and Indians, as higher
premiums were charged from the latter. In 1870, Indians took a sigh of relief when Bombay
Mutual Life Assurance Society, the first Indian insurance company covered Indian lives at
normal rates. Onset of the 20th century brought a drastic change in the Insurance sector.

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In 1912, the Govt. of India passed two acts - the Life Insurance Companies Act, and the
Provident Fund Act - to regulate the insurance business. National Insurance Company Ltd,
founded in 1906, is the oldest existing insurance company in India. Earlier, the Insurance
sector had only two state insurers - Life Insurers i.e. Life Insurance Corporation of India
(LIC), and General Insurers i.e. General Insurance Corporation of India (GIC). In December
2000, these subsidiaries were de-linked from parent company and were declared
independent insurance companies: Oriental Insurance Company Limited, New India
Assurance Company Limited, National Insurance Company Limited and United India
Insurance Company Limited.

1.2.1 The evolution of Insurance in India can be summarized as:-

Yare Changes

Oriental Insurance Company. The first Insurance Company in India.

1818

Bombay Mutual Life Assurance Company. First Indian Insurance

1870
Company.

The Indian Life Assurance Company enacted the first law to regulate the
1912
life insurance business in India.

The Indian Assurance Company act enacted to enable the government to

1926
collect statistical information about the insurance.

The earlier legislation consolidated and amended the life insurance act
1938
with the objective of protecting the interest of insurance in the public.

1956 245 Indian and foreign players and prudent societies are taken once by
Central govt. and nationalized.

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 1.3 The Insurance Regulatory And Development Authority
(IRDA)

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in April
2000 has fastidiously stuck to its schedule of framing regulations and registering the private
sector insurance companies. The other decisions taken simultaneously to provide the
supporting systems to the insurance sector and in particular the life insurance companies
were the launch of the IRDA’s online service for issue and renewal of licenses to agents.

The Insurance Act, 1938 had provided for setting up of the controller of Insurance to act as
a strong and powerful supervisory and regulatory authority for insurance. Post
nationalization, the role of Controller of Insurance diminished considerably in significance
since the Government owned the insurance companies.

But the scenario changed with the private and foreign companies foraying in to the
insurance sector. This necessitated the need for a strong, independent and autonomous
Insurance Regulatory Authority was felt. As the enacting of legislation would have taken
time, the then Government constituted through a Government resolution an Interim
Insurance Regulatory Authority pending the enactment of a comprehensive legislation.

The approval of institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in place to sell
their products, which are expected to be introduced by early next year.
Since being set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations. In the private sector 12 life insurance and 6 general
insurance companies have been registered.

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Since 1956, with the nationalization of insurance industry, the state-run Life Insurance
Corporation of India (LIC) has held the monopoly in that country's life insurance sector.
General Insurance Corporation of India (GIC), with its four subsidiaries, was its counterpart
in the casualty sector. Over time, taking advantage of its monopoly and virtual prerogative
in establishing premiums, LIC has evolved into a monolith. With around 600,000 agents in
every nook and corner of the vast country, it has created an enviable brand name,
particularly among the rural population of the country. It has around $40 billion as its life
fund and is a strong player in the financial sector. However, on the qualitative side, it has
very little to take pride in. And there lies the potential for foreign players to challenge this
behemoth.

A new definition of "Indian Insurance Company" has been inserted. "Indian insurance
company" means any insurer being a company:-
(a) Which is formed and registered under the Companies Act, 1956?
(b) In which the aggregate holdings of equity shares by a foreign company, either by
itself or through its subsidiary companies or its nominees, do not exceed twenty-six percent,
paid up capital in such Indian insurance company.
(c) Whose sole purpose is to carry on life insurance business, general insurance
business or re-insurance business?

2.9.1 Political Scenario:-

The eagerly awaited Insurance Regulatory and Development Authority (IRDA) Bill to open
the insurance sector in India to private and foreign players, was passed by the Lok Sabha
on December 2, 1999 and by the Rajya Sabha on December 7, 1999. The Bill seeks to
grant statutory status to the interim Insurance Regulatory Authority and amend the 1938
Insurance Act, the 1956

Life Insurance Corporation Act and the 1972 General Insurance Business (Nationalization)
Act to end the public sector monopoly. The IRDA Bill incorporates the recommendations
made by the parliamentary Standing Committee on Finance.

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 INTRODUCTION OF THE ORGANIZATION

2.1 HISTORY:-

Kotak Mahindra one of India's leading financial institutions was born in 1985 as
Kotak Capital Management Finance Limited. This company was promoted by Mr. Uday
Kotak, Mr. Sidney A. A. Pinto and Kotak & Company. Industrialists Mr. Harish Mahindra and
Mr. Anand Mahindra took a stake in 1986, and that's when the company changed its name
to Kotak Mahindra Finance Limited.

It's been a steady and confident journey to growth and success:-

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1990 The Kotak Mahindra Group started The Auto Finance Business into a separate
company – Kotak Mahindra Prime Limited. Kotak Mahindra Prime Limited
(KMPL) is a subsidiary of Kotak Mahindra Bank Limited. KMPL is India’s one of
the largest nation wide dedicated car finance company.

1996 Kotak Mahindra Prime Limited (KMPL) was incorporated on February 28, 1996.
It was formed as a Joint Venture with Kotak Mahindra Bank Limited holding 60%
and the balance being held by Ford Credit International Inc., U.S.A

1998 Enters the Mutual Fund market with the launch of Kotak Mahindra Asset
Management Company -
Kotak Mahindra Asset Management Company Limited, a wholly owned
subsidiary of KMBL. KMAMC started operations in December 1998 and has over
10 lac investors in various schemes.
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2000 Kotak Mahindra ties up with Old Mutual plc (South Africa). for the Life Insurance
business.
Kotak Securities launches its on-line broking site (now www.kotaksecurities.com).
Commencement of private equity activity through setting up of Kotak Mahindra
Venture Capital Fund.

2001 Launches Insurance Services-

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak
Mahindra Bank Ltd. and Old Mutual plc.
Kotak Mahindra Old Mutual Life Insurance is a 74:26 joint venture between Kotak
Mahindra Bank Ltd. and Old Mutual plc.
Old Mutual, a company with 160 years experience in life insurance, is an
international financial services group listed on the London Stock Exchange and
included in the FTSE 100 list of companies.

2003 In February 2003, Kotak Mahindra Finance Ltd. converts to a commercial bank –
the first Indian company to do so – Kotak Mahindra Bank. It is the first company
in India to convert to a bank.

2004 In 2004 Launches India Growth Fund, a private Equity fund. Kotak Private Equity
Group (KPEG) is a specialist Private Equity arm of Kotak Mahindra Bank.

2005 Kotak Realty Fund, Established in May 2005, is one of India’s first private equity
funds with a focus on real estate and real estate intensive business.

2008 Tell 2008-09, the total Asset under Management of Kotak Group is Rs 37,185
crores approximately. And Net worth of over Rs 6,485 crore. Over the 56 Lakh
customer account in

2.2 Kotak Life Insurance

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Kotak Life Insurance is an Authorize company in Insurance Regulatory & Development
Authority (IRDA). It is a ties up company between Kotak Mahindra Bank Ltd. with Old
Mutual plc. in the ration is 74:26.

2.2.1 Features of Kotak Life Insurance:-

• It is 1st and only NBFC (Non Banking Financial Company) to get converted into
bank in March 2003,
• It is 3rd biggest bank in Pvt. Sector
• Global Indian financial services brand
• Most preferred employer in financial services
• Highly trusted financial services company
• Value creation for all stakeholders*

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2.3 Reason of Kotak Life Insurance Choose

There are many reasons why people should choose Kotak Life Insurance Company Ltd. as
their partner in meeting their insurance need:

a) Innovative products to meet customer’s needs.

b) Efficient customer service team.
c) Good financial track record of both parents – Kotak Group & Old Mutual Plc.
d) Certified Financial Consultants to advice prospective customers.
e) Professional approach in managing customer’s investments.
f) Receive high Rate of Return on Investment compare to other.
g) Income Tax benefits for their insurance products.
2.4 Old Mutual

Old Mutual is a tie up company with Kotak Bank Ltd. It is a 161 Year’s experience
company. It is working in South Africa, UK & US. It is a Life Insurance company.

2.4.1 Features of Old Mutual:-

• It is 161 years of Experience Company.

• Funds under management –over $400 Billion
• Significant presence in South Africa, UK and US
• A Fortune Global 500 company, Ranked -173
• 12th largest insurance company in the world

2.5 Vision, Mission & Values

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• Vision:-

Kotak Life Insurance has a deep rooted commitment to improve the quality of life of its
customers, employees and stakeholders. We aim at improving the long term value in our
relationship by continuous innovation and improvements. We do this by our three-prong
effort which strives to make Kotak Life Insurance a corporate with values.

♦ Increase Customer Value:

Kotak Life Insurance has gone to the heart of its customer's requirements and developed
products which are unique and serve the customer needs perfectly. We built a relationship
of mutual trust and benefit to serve the Indian customer. At Kotak Life Insurance the
customer always comes first.

♦ Cohesive Work Environment: -

We form long-term partnership with our employees by offering them an invigorating work
experience. We not only demand loyalty, sincerity and values but also give it back in equal
measures. Kotak Life Insurance will like to offer its employees space to grow, innovate and
build a long-term career.

♦ Work with Honor: -

Kotak Life Insurance delivers everyday services in the marketplace with the high sense of
duty and commitment. Our employees strive to build the long-term value for all those come
in contact with Kotak Life Insurance. Our consumers, distributors, employees, shareholders
and the nation have our commitment that we will uphold the values of trust, integrity and a
Sense of Honor in every thought, act and deed in order to positively contribute to
individual, society and nation growth.

• Mission

“At Kotak Life Insurance, we aim to help customers take important financial decisions at
every stage in life by offering them a wide range of innovative life insurance products, to
make them financially independent.”
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• values

Every member of the Kotak Group team is committed to 5 core values: Integrity, Customer
First, Boundary less, Ownership, and Passion. These values shine forth in all we do, and
have become the keystones of our success.

2.6 MANAGEMENT

We at Kotak Life Insurance work as a team and have a flat management structure. Our
top management has many years of experience which has helped guide the company into a
position of leadership.

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2.7 STRUCTURE OF KOTAK LIFE INSURANCE

Its hierarchy in Kotak Life Insurance is like this:-

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2.8 ORGANIZATION CHART:-

2.9 The list of foreign players entering the Indian Life Insurance sector
and their Indian partners:

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 Indian Partner Foreign Insurer

Aditya Birla Group Sun Life, Canada

Kotak Mahindra Finance Old Mutual, South Africa
HDFC Standard Life, UK
Reliance No Foreign Alliance
ICICI Prudential, UK
Max India New York Life, USA
Tata Group AIG, USA
Vysya Bank ING Insurance, Netherland
Hero Group Zurich, Switzerland
Cholamandalam Group Undecided
Hindustan-Times Undecided
Dabur CGNU Life, UK
Bajaj Auto Allianz
Undecided Metlife, USA
Sanmar Group AMP, Australia
SBI Cardiff, France
Corporation Bank Undisclosed
Undisclosed Aegon, Netherlands
Undisclosed Cigna, USA
Undisclosed Nationwide, USA
Undisclosed GE Capital Services
International, USA

2.10 ULIP?

ULIP is a Unit Link Insurance Plan. In this plan we invest the money in own choose Portfolio
whether in Govt. or Privet funds.

A policy, which provides for life insurance where the policy value at any time varies
according to the value of the underlying assets at the time. ULIP is life insurance solution

23
that provides for the benefits of protection and flexibility in investment. The investment is
denoted as units and is represented by the value that it has attained called as Net Asset
Value (NAV). A unit-linked insurance plan provides both insurance and investment benefit.

Advantages of unit-linked policies:-

 A combination of protection and tax advantage, unit-linked policies dominate a huge

chunk of the portfolio of the private insurers. The annual premium contributes over 70%
to the premium income.
 In the event of death during the life of the policy, the sum assured or value of the
policy fund whichever is higher is paid to the nominees.

 There is a lot of flexibility in these plans with falling interest rates. So an investor
can adjust his risk profile according to his choice. The risk element is transferred to the
investor and the insurance company enjoys the capital and solvency.

 The client is aware of the "no guarantee" era and he plans his investment
judiciously.

 The client enjoys transparency, by way of returns on the equity markets

simultaneously enjoying the benefits of life cover.

 It's tax-free, unlike a mutual fund or any other investment, where the gains are
taxed.

 The client also has an option of restructuring his investment pattern which is a value
addition to the original policy (i.e. top-ups)

 Contrary to the traditional policies, the unit linked policies are more transparent,
flexible and easy to understand. The customer has open options for investment and he
is consciously aware of the ratio of his premium towards investment and life cover.

RESEARCH METHODOLOGY

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Research Methodology refers to search of knowledge .one can also define research
methodology as a scientific and systematic search for required information on a specific
topic.
The word research methodology comes from the word “advance learner ‘s dictionary
meaning of research as a careful investigation or inquiry especially through research for
new facts in my branch of knowledge for example some author have define research
methodology as systematized effort to gain new knowledge.

3.1 Title of the Study:-

(A STUDY OF PORTFOLIO OF KOTAK LIFE INSURANCE)

3.2 DURATION OF THE PROJECT:-

The duration of the project is 18’th May to 26’th June 2009. Which is of 40 days training
project report.

3.3 OBJECTIVE OF THE PROJECT:-

The project, as mentioned in the synopsis, is on Portfolio of Insurance Company Funds. For
a multinational company like Kotak Life Insurance Co. Ltd., it is important to know the
awareness/ what people think about Investment of Insurance Company in ULIP &
Traditional Funds?
Hence the objective of this report is……
1. To know the awareness of people considering Insurance as an Investment Tool.
2. To know the awareness of people about what is UILP plan & Traditional plan.
3. To observe the general trend which the people want to follow while investing their money
in private sector rather than Government Sector.
4. To study the trend of people shifting from low return & low risk Investment to high return

25
 & high risk Investment.
5. To give suggestion how to improve the awareness of people.
6. Helping management for getting information and ideas from the report regarding
awareness of the people and to do so.
7. To understand about what is Unit Link Insurance Plan and what is Traditional Plan.
8. The also main object of this project is collection of fund from where and this fund invests
in which various fund.

3.4 TYPE OF RESEARCH

There are three types of research such as follow:-
 For exploratory research study.
 For descriptive and diagnostic research study.
 For hypothesis testing research studies.
Then here I have selected exploratory research type.

3.4.1 Research Design:-

Definition: “A research design is an arrangement of conditions for collection and analysis

of data in a manner that aims to combine the relevancy of the research with economy in
procedure”.

Different Research design:

 For exploratory research study.
 For descriptive and diagnostic research study.
 For hypothesis testing research studies.
For pursuing this particular project exploratory study is the best suited keeping in view its
objective. Thus exploratory research Design has been briefly explained below:

Exploratory research design: This design is also known as formulative research design.
The main purpose of such studies is that of formulating a problem for more precise
investigation or of developing the working hypothesis from the operational point of view.
The major emphasis in such studies is on the discovery of view idea and insight.

26
Research design for exploratory study of Portfolio of Kotak Life Insurance:-
Exploratory research study as already mentioned is also termed as formulative research
studies. The main purpose of this study is formulating problem in the area of arrange the
portfolio and to attempt discovery of idea & insight to provide a platform & facilities solving
of the problem. Clinically working on the ideas & insight so provided should lead to results
which will serve as a solution to problem so identified from this project.
This research has been broadly classified into two phase:
 To know and understand the existing of the Portfolio of Kotak Life Insurance Co.
 To have insight & then suggest measure for optimization.

The first phase is purely of exploratory nature. This phase also includes survey of literature,
gather data and explore the techniques followed in the existing system. This phase also
includes understanding, analyzing & co-relating of data of formulate and precise research
problem/intensifying the specific area for further research.

After collecting data from few sessions of experience survey we are now in a position to
move to the next phase with insight to the problem.

In phase-II of the research we try to co-rater data. This can be done by comparing data
from different sources, finding the interdependence of different data finding out degree of
co-relation among data sets so on and so forth. Some variables affecting the analysis will
be neglecting with the view to simplify the task. Co-relating the data & formulating the
problem associated with the area of study (here Portfolio of Kotak plan) sill initiate the
process of finding & suggestion solution. These solutions and ideas will serve as a platform
for precise and elaborate investigation ultimately developing a working i.e., technically and
financially and feasible solution for the organization.

3.4.2 Data Collection Sources:-

There are two types of data primary & secondary. The primary sources are those which are
collected afresh and for the first time, and thus happen to be original in character. The
secondary sources, on the other hand, are those which have been collected by someone
else and which have already been passed through the statistical process.

27
The source of data collection used in this project is primary data collection source. There
are several methods of collecting primary data. The data are collected through
Questionnaires & some Interview was made through personal visit & through telephonic
interview

3.4.3 Data Collection Methods:-

The data collection methods which are used for this project are explained below:-

1) Collection of data through questionnaire:

This method of data collection is quite popular, particularly in case of big enquiries. In this
method a questionnaire is filled by the concerned person himself. A questionnaire consist of
a number of questions printed or typed in a defined order on a form or set of forms.

In the project the main source of collecting data was through questionnaire. For this
purpose questionnaire was designed and filled by individuals.

2) Interview:

The interview method of collecting data involves presentation of oral-verbal stimuli and
reply in terms of oral-verbal response. There are two methods of interview-personal
interview and telephonic interview.

Interview with the help of questionnaire was carried on with individuals. Few telephonic
interviews were also performed in which the response was average due to time constraints.

3.4.4 Data Collection Instruments:-

The work of data collection is done by preparing a questionnaire. A questionnaire was

designed in consideration that the people filling up the questionnaire should not be
uncomfortable with the question.

After through study & pilot study of the questionnaire, I have prepared a questionnaire
keeping in mind the requisites of a good questionnaire.
So, the characteristics of my questionnaire are:

28
  Questionnaire is short & simple.
 Questionnaire is dichotomous & full of multiple choices.
 Technical terms & vague expression have been avoided to the extent possible.
 Physical appearance of the questionnaire is attractive looking.

3.5 SAMPLING PLAN

In order to know the information from a mass it is not possible to contact individually and
collect information. This is due to following reason:

 Time required is enormous

 Expensive

 Possible to analyze with a sampling plan

A sampling plan is adopted under which numbers of samples are decided along with the
area from which samples are to be chosen. These samples will represent the complete lot
from where the samples are chosen.
Under this project a random sampling plan is found suitable for analyzing the Kotak Plan.

The sampling procedure contains different steps:-

• Define the target population

• Identify the sampling frame

• Select a sampling procedure

• Determine the sample size

• Select the sample elements

• Collect the data from the designated elements.

29
3.5.1 Sampling Techinque

Initially, a rough draft was prepared keeping in mind the objective of the research. The final
Questionnaire was arrived only after certain important changes were done.

3.5.2 Sampling Units

The respondents who were asked to fill out questionnaires are the sampling units. These
comprise from the natural market.

3.5.3 Sample Size

100 persons were contacted on random basis. These persons represent various classes in
the society as below:-
 Student.
 Service.
 Business.
Data in form of Questionnaires were collected from these representative samples to get an
analysis of general trend in investment.

3.5.4 Fieldwork Plan

It is essential to have field work plan before actually processing with the project. The field
work plan would be useful to chalk out the schedule of the project and help us as to
fragment the project into simple tasks.

The field work for the project was planned as below:

1. Data collection through

 Questionnaire
 Interviews:
 Personal Interview
 Telephone Interview
2. Analysis of Data
3. Interpretations
4. Conclusion & Recommendatio

30
 ANALYSIS OF QUESTIONNAIRE No. 1
On the basis of the data’s obtained, statistical methods were employed to determine the
most important factors of the 13 factors related to existing portfolio of Kotak Life Insurance.
This 13 factors are most important from a investment point of view before going for a ULIP
and prefer different portfolios.

Factors

Respondent No. 1 2 3 4 5 6 7 8 9 10 11 12 13
1 4 3 5 3 5 3 3 3 4 2 4 3 5
2 5 4 3 3 2 1 3 5 5 5 3 4 5
3 5 4 5 4 4 3 4 5 4 4 4 5 4
4 5 4 1 5 5 5 3 4 5 5 4 3 4
5 5 5 5 3 5 3 4 4 3 4 3 1 5
6 5 4 2 3 5 1 4 5 5 5 4 4 5
7 4 5 4 5 5 1 3 4 2 1 1 4 4
8 1 5 3 2 5 4 3 5 2 4 3 5 4
9 5 5 2 2 5 5 5 5 4 5 1 2 4
10 4 5 4 5 5 1 3 4 3 1 1 2 4
11 5 5 5 4 2 1 5 5 5 5 1 5 5
12 5 5 5 5 1 1 5 5 5 5 5 5 5
13 5 5 5 5 1 1 5 5 5 5 1 5 5
14 4 2 1 2 3 1 1 2 1 4 3 5 2
15 5 4 2 3 5 1 4 5 5 5 4 4 5
16 5 4 3 3 5 3 3 3 3 5 4 3 4
17 5 3 1 2 5 1 3 5 5 5 3 3 5
18 5 5 3 5 5 2 3 5 3 2 3 3 4
19 5 4 4 5 5 3 4 5 5 4 5 4 5
20 5 4 4 5 5 2 4 4 5 5 5 4 4
21 5 4 3 3 5 2 4 4 3 4 3 4 3
22 5 4 4 5 5 2 4 5 5 5 4 5 4
23 5 4 4 5 5 2 4 5 5 5 4 5 4
24 5 4 4 5 5 2 5 5 5 4 5 4 4
25 5 2 2 5 5 1 5 5 5 5 2 2 5
26 5 5 5 5 5 2 5 5 3 3 2 3 5
27 5 5 1 5 5 1 5 5 1 5 1 3 5
28 5 1 3 5 3 1 3 5 5 5 3 3 5
29 5 4 4 4 3 5 3 5 5 4 4 4 4
30 5 4 3 4 2 4 4 5 4 1 3 4 4
31 3 4 4 5 5 3 3 4 3 4 3 4 3
32 5 4 5 4 5 3 4 4 5 4 3 4 4
33 5 4 1 3 4 2 4 5 4 5 2 5 3
34 3 4 4 3 4 3 4 3 3 4 3 3 3
35 5 5 4 4 5 4 5 5 4 5 5 4 4
36 5 4 4 5 5 3 4 5 5 4 5 4 5
37 5 4 1 5 5 5 5 5 5 5 1 1 5
38 5 4 1 5 5 5 5 5 4 3 1 1 4
39 4 4 5 4 5 3 2 4 4 2 1 4 4
40 5 5 5 5 4 3 3 5 4 3 3 4 4
41 4 3 3 5 5 1 4 5 4 5 3 5 3
42 5 3 3 5 5 2 4 3 4 5 5 4 5

31
43 5 5 1 5 5 1 5 5 5 3 3 5 5
44 5 4 2 3 5 1 4 5 5 4 4 3 4
45 5 4 1 3 5 1 4 5 5 4 4 3 4
46 4 4 3 3 4 1 4 3 4 3 1 4 4
47 4 4 2 3 3 1 4 4 3 2 3 3 5
48 5 5 3 4 5 1 5 5 4 4 4 4 4
49 5 5 1 3 4 1 5 5 3 5 5 3 4
50 5 4 4 5 5 2 5 5 4 5 5 2 5
51 5 4 3 4 4 3 4 5 3 3 3 5 5
52 5 4 2 3 4 1 5 5 4 4 3 3 5
53 5 1 4 2 3 2 3 5 4 3 2 4 5
54 5 4 1 3 4 1 3 4 4 5 1 5 5
55 5 5 5 4 5 3 5 4 4 5 4 3 3
56 5 4 3 4 5 2 5 5 2 4 2 4 4
57 5 4 3 4 5 3 5 5 3 5 3 2 5
58 5 4 3 4 5 1 4 3 4 5 2 3 5
59 4 4 3 3 5 3 4 4 3 4 1 4 4
60 5 5 3 4 5 2 4 4 5 3 2 4 5
61 4 3 2 2 4 2 4 5 3 3 3 4 5
62 5 5 2 3 3 2 5 5 4 4 5 4 5
63 5 4 4 4 4 2 4 5 3 2 4 4 5
64 5 4 1 3 4 2 3 5 4 4 2 4 4
65 5 4 3 4 5 1 2 5 4 3 3 5 4
66 5 4 4 4 4 1 4 5 5 5 4 3 4
67 5 4 5 3 5 2 5 5 5 2 4 3 5
68 5 4 2 4 4 2 4 5 4 2 3 4 5
69 5 5 4 5 5 5 5 5 3 5 3 2 5
70 5 5 3 3 3 2 3 5 4 3 4 4 5
71 5 5 4 3 4 3 4 5 3 4 2 4 5
72 5 5 3 4 5 1 2 4 5 5 5 3 5
73 4 4 2 3 3 1 2 4 4 2 1 5 5
74 4 5 4 5 5 3 5 3 4 5 1 2 5
75 5 4 5 4 5 4 5 5 4 4 2 3 3
76 4 5 2 3 4 2 4 4 4 3 2 4 4
77 5 4 4 4 4 1 4 3 4 4 3 4 3
78 4 4 2 2 3 1 4 5 4 2 1 3 4
79 5 5 3 4 5 2 5 4 4 4 4 5 5
80 5 4 3 3 4 1 3 5 4 3 3 4 5
81 5 4 3 4 4 3 4 5 4 4 3 4 5
82 5 4 1 3 3 2 3 5 5 5 2 3 4
83 5 4 4 3 4 2 4 5 5 5 4 4 3
84 4 4 3 2 3 1 2 3 4 4 1 4 4
85 5 4 3 4 5 1 4 5 3 3 2 4 4
86 5 5 3 3 4 3 5 4 4 4 3 4 4
87 5 3 2 3 3 2 3 5 5 3 3 4 4
88 5 4 3 2 3 3 3 5 4 4 4 3 4
89 5 5 4 5 5 1 4 5 3 5 5 3 4
90 4 4 3 2 3 2 2 5 3 2 1 2 5
91 5 4 3 3 2 1 2 5 3 4 2 5 4
92 5 4 3 4 5 1 5 4 4 4 2 4 5
93 5 5 2 3 5 3 5 5 4 5 3 4 4

32
 94 5 3 4 2 4 2 5 3 4 3 3 2 3
95 4 5 5 4 5 4 4 5 5 4 4 3 5
96 5 5 4 3 4 3 3 3 4 3 3 2 4
97 4 4 3 4 4 2 4 4 4 4 1 5 4
98 5 4 2 3 3 2 4 4 3 2 3 3 4
99 5 4 2 4 4 1 3 3 5 1 1 4 5
100 5 5 2 4 5 1 4 5 4 4 2 4 5

SUM 474 415 308 372 425 212 389 451 397 384 291 363 434

4.2 2.1 3.8 4.5

AVERAGE 4.74 4.15 3.08 3.72 5 2 9 1 3.97 3.84 2.91 3.63 4.34

MEDIAN 5 4 3 3 5 2 4 5 4 4 3 4 4

MODE 5 4 3 3 5 1 4 5 4 5 3 4 5

0.596623 0.79 1.22 0.98 0.9 1.1 0.9 0.7 0.91 1.14 1.27 0.99
S. D. 5 6 8 6 9 6 4 5 5 3 2 1 0.699

0.355959 0.63 1.50 0.97 0.9 1.3 0.8 0.5 0.83 1.30 1.61 0.98
VARIANCE 6 4 9 1 8 4 9 6 7 7 8 3 0.489

On the basis of survey done, the following results were obtained:

The 5 most important factors while buying an insurance plan especially ULIP’s are as
follows:

AVER- MEDI- MODE S.D. VARIANCE

Sr. FACTOR AGE AN
No.

1
Return On Investment 4.74 5 5 0.59662 0.3559596
Financial Health
2
(Company) 4.51 5 5 0.74529 0.55545

Comparison with
3
Financial Products 4.34 4 5 0.69949 0.48929

4
Tax Saving 4.25 5 5 0.98857 0.97727

5
Policy Features 4.15 4 4 0.79614 0.63384

3.5.5 Assumptions

33
During the entire project some assumptions are being made to simplify the task by reducing
the variable factors as for as practicable.

Some of the assumptions are as follows:

 The information gathered through the survey is authentic.

 The sample size taken for the research work is small which may not represent the
actual population.

 The effect of any media has not taken place on the person’s opinion till the analysis
and the computation of the report.

3.6 SCOPE OF STUDY

A big boom has been witnessed in Insurance Industry in recent times. A large number of
new players have entered the market and are vying to gain market share in this rapidly
improving market. The study deals with Kotak Life Insurance in focus and the various
segments that it caters to. The study then goes on to evaluate and analyze the findings so
as to present a clear picture of trends in the Insurance sector.

3.7 LIMITATIONS OF THE STUDY:-

34
The project under its purview the study of Portfolio of Kotak Life Insurance. For the purpose
all the Basic Kotak Plan are studies individually to have an understanding of their trend and
all the parameters of the investment like Return, Safety, Liquidity, Risk Cover, Tax Benefit
and Social Status.

After having an insight of all the Basic Kotak plan it is compared with Insurance. After that
the research work is done on Kotak plans and funds. For this purpose both Graphical &
Quantitative Analysis is carried out. After correlating & analyzing the various Graphical &
Quantitative Analysis and figuring out the scope for future optimization and the area of
concern associated with these attempt will be made to provide with suggestion &
recommendation.

Even after giving all our effort there were some limitations which could not be avoided.

1. Due to lack of data & insufficient knowledge of few analyses could not be carried out.
2. Time was also a constraint.
3. Sometime people did not give the correct & sufficient information regarding their
Investment.
4. Printed questionnaire often created panic in the mind of the individuals and at times they
were reluctant in answering.

CHAPTER-4:
FACTS & FINDINGS
35
 4.1 FINDINDS
We were interested to know how the portfolio constructs with the help of various
securities for the “UNIT LINKED POLICY” The following graph represents the answers to
this question of our.

4.1.1 DIFFERENT TYPE OF FUND/PORTFOLIO:-

There are basically three type of portfolio given and these portfolio divided into different
type of funds:-

• Kotak Aggressive Growth Fund.

AGGRESSIVE / RISKY FUND
• Kotak Dynamic Growth Fund.

• Kotak Dynamic Floor Fund.

BALANCE / LOW RISKY FUND
• Kotak Guaranteed Growth Fund.

• Kotak Dynamic Bond Fund. CONSERVATIVE / UNRISKY

FUND
• Kotak Guaranteed Bond Fund.

AGGRESSIVE / RISKY FUND: - In this fund portfolio, the high proportion invest in privet
security and very low proportion invest in Govt. security and some time 100% invest in
privet security. Like proportion of Privet and Govt. security is 100:0, 90:10 and 80:20.

36
BALANCE / LOW RISKY FUND: - In this fund portfolio, the approximation equally fund
invest in both Privet and Govt. security. Like proportion of Privet and Govt. security is 50:50,
60:40, and 40:60.

BALANCEPORTFOL
,0
IO

Privat Govt. Security'

Govt.
Security, 50%
Security',50% Privat Security

CONSERVATIVE / UNRISKY FUND: - In this fund portfolio, the high proportion invest in
Govt. security and very low proportion invest in privet security and some time 100% invest
in Govt. security. Like proportion of Privet and Govt. security is 10:90, 0:100.

37
 CONSERVATIVEPORTFOLIO

Privat
Security, 10% Govt. Security'
Govt.
Security',90% ,0 Privat Security

KOTAK AGGRESSIVE GROWTH FUND

38
KOTAK DYNAMIC GROWTH FUND

39
KOTAK DYNAMIC FLOOR FUND

40
KOTAK GUARANTEED GROWTH FUND

41
KOTAK DYNAMIC BOND FUND

42
 KOTAK GUARANTEED BOND FUND

4.1.2 PORTFOLIO OF KOTAK LIFE INSURANCE:-

43
On the help of these three portfolios the Kotak Life Insurance prepare basically three plans
namely is:-
 KOTAK SAFE INVESTMENT PLAN (KSIP)
 KOTAK SMART ADVANTAGE PLAN (KSAP)
 KOTAK HEADSTART FUTURE PLAN (KHFP)

Depending upon the needs & wants, clients have the option of choosing between any of
these three plans which provides them with various benefits & growth options along with an
Insurance cover.

KOTAK SAFE INVESTMENT PLAN (KSIP)

Kotak Safe Investment Plan is a Unit Linked Insurance Plan that combines the benefits of
insurance and capital market returns into one. This plan from the stable of Kotak Life
Insurance is a true reflection of the company’s essence: innovation that will benefit the
investor.
What makes investing in Kotak Life Insurance truly unique is that you enjoy a Guaranteed
Maturity Value with varying degrees of equity exposure depending on your risk appetite. So
if the market value of your units is higher, you reap the benefits with the peace of mind that
whilst in a bear market your investment is under-pinned by the Guaranteed Maturity Value.
And there is more, the returns are totally Tax free.

KOTAK SMART ADVANTAGE PLAN (KSAP)

 Guaranteed returns of unto 275% of your first year premium at maturity

 Assured bonus additions at regular intervals during his policy term to enhance your
fund value.
 100% allocation of the premium from 2nd year onwards
 Unique fund offering maximum opportunity for growth and choice for your investment
needs
 Maximum protection for your loved ones to choose from.
KOTAK HEADSTART FUTURE PLAN
44
Every child is different. Each has their own set of dreams and aspirations. As a parent you
would like to provide your child with all the building blocks that could develop his or her
potential to the fullest. This could mean extra coaching or tuition for talented children,
special training or equipment for natural athletes or professional training for born singers.
Headstart Child Plans is a specially tailored, cost-effective plan, aims to give your children
the financial means to pursue his or her dreams and live them.

4.1.3 COMPARISON BETWEEN VARIOUS POLICIES:-

POLICIES
FEATURES KSAP KSIP HEADSTART

ENTRY AGE MIN: 0 Years MIN:0Years MIN:18 Years

MAX:65Years MAX:65Years MAX:60Years

MIN:18Years MAX:75Years MIN:18Years

MATURITY AGE
MAX:75Years MAX:70Years

REGULAR:10/15 MIN: 10Years or 18 Min: Greater of (10 Yrs or

/20/25Years minus age at entry for 18 less child’s present
FOR MINOR: 10Years or 18 minors; whichever age)
POLICY TERMS
less entry age at last birthday Is higher Ma
whichever is higher. MAX: 30Years x: 25 Yrs.

Regular Ppt: Rs.15, 000

Regular Ppt: Rs.15, 000 P.A.
Regular:
Limited Ppt:
P.A. Rs.18, 000 P.A.
MINIMUM Rs 25,000 P.A
Limited Ppt: Limited Ppt: For 4-10 Yrs
PREMIUM Rs 36,000p.A. Rs 50,000 P.A. Rs 50,000 P.A.
For 3 Yrs

45
 MIN: 0.5 X HIGH COVER: MIN: 0.5 X
BASIC SUM (Policy term x annual Policy term x (Policy term x annual
premium.) annual premium premium.)
ASSURED
MAX: Any multiple of LOW COVER: MAX: Any multiple of
premium, subject to Greater of(5x premium, subject to
underwriting annual underwriting
premium,0.5xpolicy
term x annual
premiums )

Critical Illness Benefit Critical Illness

Benefit
Permanent Disability Permanent
Benefit Disability Benefit

RIDERS Accidental Disability Accidental

NO RIDERS Disability Guardian
BENEFITS
Guardian Benefit: BENEFITS Benefit: Premiums
Premiums waiver waiver protection on
protection on disability. disability.
Accidental Death
Benefit Accidental Death
Preferred Term Benefit Benefit
Life Guardian Benefit

4.1.4 USP Of The Various Plans

(USP: - Unique Selling Point)

PLAN KSAP KSIP HEADSTART

Upto 275 % return on Guaranteed Maturity Triple Death Benefit & Dynamic
first year premium at Value for all type of Floor fund.
USP maturity & assured investors.
bonuses.

4.1.5 COMPARISON OF CHARGES:-

46
 POLICIES KSAP KSIP HEADSTART
CHARGES
Years <36000 >=36000 Years charges Years Allocation
(15k to 25k)
2-5 2% Nil 1 14% 1 68%
PREMIUM
6-10 1% Nil >2 3.5% 2 86%
ALLOCATION
11+ Nil Nil 3 93%
CHARGES
4-10 99%
>11 100%

POLICY Rs.65p.m. at =<Rs.20000 -7% <Rs100000: flat fee of

ADMINISTRATION commencement of the >20000-3.5% Rs.75 p.m. in year
CHARGES
policy, inflating by 5%p.a. 1and Rs 40 p.m. in
year2 onwards.
>Rs.100000: No
charges

Guaranteed/dyna Dynamic money

Dynamic bond fund - 1.2% mic money market market fund
Dynamic floor fund- 1.75% fund 0.6% 0.6%
Dynamic gilt fund
Opportunities fund- 2% Guaranteed/dyna 1%
mic gilt fund 1% Dynamic bond
FUND fund
Guaranteed/dyna 1.2%
MANAGEMENT mic bond fund 1.2% Dynamic floating
rate fund
CHARGES Guaranteed/dyna 1.2%
mic floating rate 1.2% Dynamic balanced
fund fund
1.3%
Guaranteed/dyna Dynamic growth
mic balanced fund 1.3% fund
1.5%
Guaranteed/dyna
Aggressive growth
mic growth fund 1.5%
fund 1.6%
Aggressive growth
fund 1.6%

First four switches in a year First four switches in First four switches in a
SWITCHING are free. a year are free. year are free.
CHARGES Rs. 500 will be charged for Rs. 500 will be Rs. 500 will be charged
every additional switch. charged for every for every additional
additional switch. switch.

No mortality charges in 1st

year. From year 2nd Thus is the cost of life Thus is the cost of life
MORTALITY onwards, the cost of life47cover & will be levied cover & will be levied
CHARGES cover & will be levied by by cancellation of by cancellation of units
 SATISFACTION LEVEL OF THE SERVICE
PARAMETERS

100
90
80
70 55
60
50
40
30 20 18
20 6
10 1
0
Extremely Good Neither Bad Very Bad
Good Good nor
Bad

Inference:
We found in our study that more than three fourth of the surveyed customers had a
satisfaction level above average. Where 55% of the respondents rated the service
parameters as good, 20% were in favor that the service parameters are extremely good.
Only 7% of the respondents rated the same as bad or very bad.

48
 SATISFACTION COMPARED TO COMPETITION
5%
34%
13%

21%

27%
After Sales Service Solutions Recommendations
Customer delightment Policy Content
Others

4.1.6 Investment depends upon the Age of the Investor:-

• If investors are between 25-40 years of age:-

If investors are between 25-40 years of age then they are in a position to take average risk
to achieve there financial goals. They can afford to have 70% of their investments in
equities by investing in assets like diversified equity funds, sector funds, tax-saving funds,
balanced funds and stocks. The balance should be in bonds, small saving schemes, debt
funds and cash.

• If investors are between 40-55 years of age:-

If investors are between 40-55 years of age they are in a position to take some risk. This
means that they can invest in equity-oriented products, but not as much as they could have
when you were younger. They must look at building a 60:40 (equity: debt) portfolio.

49
They must consider owning a steady, large cap, diversified equity fund as also a well-
managed mid cap fund. They must consider tax-saving funds while chalking out a tax-
planning strategy. Balanced funds will fit nicely in their portfolio.

• If investor are over 55 years of age:-

If investors are over 55 years of age at this advanced age, it would be prudent to shun risk
and strive to achieve their financial goals by taking on minimal risk. If at all, they can allow
themselves the luxury of a small equity exposure (10-15%) to supplement the existing
investments in their portfolio. Since regular income post-retirement is their most pressing
need, their investments must reflect this important trait.

Age and Gender showed an interesting relationship with the insurance. Where the males
took 84% of the insurance policies only females took a mere 16% of them. Out of these
16% the males in the name of female family members took the major of the policies.

Age Relationship with Investment

In this chart we can see that 25 age to 40 age people likes invest in 70% equity and 30%
govt. security. 40 to 55 age people likes invest in 40% equity and 60% govt. security and 55
above people like in 80% equity and 20% govt. security.

50
 INVESTORS CHOICE

Fixed Deposits
20%
40% Mutual Fund
5%
Shares

Govt.Securities

1% Insurance
30%
4% Properties

In this chart we can see that 40% of the Investor likes to invest in Fixed Deposits, 20% in
Properties, 5% in Insurance and only 1% like to Invest in Mutual Fund.

INVESTMENT CRITERIA

15% 20% Return

5%
Safety

Liquidity
10%
Risk Cover

50% Tax Benefit

When it comes to investment criteria 50% of the people need safety for their Investment &
only 5% of the people choose risk cover for their Investment Criteria.

51
 TAX BENEFIT ON INSURANCE

15%
Yes

No

85%

85% of the people are aware of Tax Benefit on Insurance at its premium & maturity & 15%
are unaware regarding Tax Benefit.

AWARENESS OF ULIPs

5%

Yes

No

95%

95% of the people are unaware of ULIPs and only 5% people are aware of the same

52
 LOOK ON ULIPs

2%

Yes

No

98%

From the above pie chart we can see that people are very aggressive of knowing about
ULIPs so 98% people want to know about ULIPs and only 2% people are not interested or
already aware of it.

WHY WON'T INVEST IN INSURANCE

Low Return

Unsafe

40% 40%
No Liquidity

Unawareness

3% 7%
10% Not Approach

Here we can see that 40% of the people did not invest in Insurance because of Low Return
& another 40% of the people are till not approach and only 3% of the people did not invest
due to Unawareness.

ANALYSIS & INTERPRETATION

53
5.1 Analysis:-

After going through the data surveyed we are in a position to analyze the trend of
people regarding Investment and their perception regarding Insurance as an Investment
Tool and different Portfolio of Kotak Life Insurance, as well as to find out scope for further
optimization. Interpretation of the finding is done below.

5.1.1 DO PEOPLE INVEST: - Now a days in a country like India every person thinks of
their future & save as per their capacity for his/her future & for the future of his family. Now
people are aware that the earning period is limited & in that period they not only have to live
but also have to secure their future by Investing/Saving. For this reason 100% people like to
Invest.

5.1.2 IS IT A SAVING / INVESTMENT TOOL:- India is a developing country here people

work very hard to earn for their living, so they did not want to take much risk to gain high
return. High return means high risk. Here people want guaranteed return, which may be
low. From the survey it is proved that service class people in a middle income group go for
saving rather than Investment. 80% people like to do saving rather than Investment.

5.1.3 INVESTORS CHOICE: - People choose saving scheme like Fixed Deposit scheme
& Government Securities over Investment schemes like Properties, Mutual Fund, Shares,
Insurance etc. because their mindset do not allow them to take the risk of Investment. This
is mainly due to their ignorance on the subject. In the survey we can see that 40% of the
people choose Fixed Deposits, 30% choose Government Securities and only 30% people
choose rest of them. Out of that 20% people choose Properties, 5% choose Insurance, 4%
choose Shares and only 1% choose Mutual Fund for their Investment.
So, this basis the best portfolio is Conservative Portfolio because most of people like safe
investment. But some youth and mature people want high return in long term so for this the
best portfolio is Aggressive portfolio.

54
5.1.4 INVESTMENT CRITERIA: - As discussed earlier people in India did not want to take
risk on their money. They are not able to break out the bondage of safety to take risk. So in
the survey also 50% of the people choose Safety as their first priority. 20% of the people go
for Return, 15% people do saving because of Tax Benefit, 10% of the people want Liquidity
and only 5% go for Risk Cover.

5.1.5 TAX BENEFIT ON INSURANCE: - From the early days Insurance has always been
bought more for tax benefits than for what it actually purported to do i.e. insure human life.
Most of the people (85%) are aware of Insurance as a tax benefit tool and they are also
aware that there is tax benefit on its premium & maturity which is a good perception as this
may lead more people to invest in Insurance and only 15% people are unaware of tax
benefit on the premium & maturity of Insurance.

5.1.6 AWARENESS OF UNIT LINK INSURANCE PLANS (ULIPs): - Now when people
are cautious about their present and think for their future they are unaware about ULIPs,
the hottest Investment Tool in today’s market. This unawareness of the people about ULIPs
has also led them to be unaware of Insurance as an Investment Tool. In the survey it is
found that 95% people are unaware of ULIPs and only 5% people are aware of the same.

5.1.7 LOOK ON ULIPs: - However it is interesting to know from the survey that 98%
people are interested to know about ULIPs to secure their future investment & only 2%
people did not want to know due to lack of knowledge or already aware of it.

5.1.8 WHY WON’T INVEST IN INSURANCE: - The general survey revealed that people
did not invest in Insurance because of its low return and because they have not approached
by anyone. 40% people did not invest in Insurance due to low return & 40% people are till
not approach by anyone. 10% people did not invest due to no liquidity, 7% people think that
investment in Insurance is unsafe and only 3% people are unaware. So, there is a huge
opportunity for the Insurance companies to do their business knowing people about ULIPs
& approaching the not approached people. For its Kotak Life Insurance build ‘Kotak
Aggressive Growth Fund Plan’ and ‘Kotak Dynamic Growth Fund’.

55
5.1.9 KOTAK PORTFOLIO FUNDS: - In the Kotak Plan there are three mostly fund is on
the basis of the people prefer: -
(1) Aggressive Fund: - This portfolio is more risky but highly retune.

(2) Balance Fund: - This portfolio is low risky but average retune.

(3) Conservative Fund: - This portfolio is less risky but low retune.

56
 SWOT ANALYSIS

Strength:
• Money Power, which makes them ignorant about the gestation period
• Brand image, business experience, and innovative products
• The agents are very selectively chosen have excellent communication skills
• Service quality, which is crux of their mission
• Large network branches which is helped to customer for the payment
• Strong and popular brand name.

Weaknesses:
• High targets for financial advisors and for the sales departments.
• Many competitors in the market offer same product by the title difference
the premium and offerings.
• Sustainable to Rick associated with investment in money market.
• Try to catch middle-lower level people also.
• Lack of awareness about insurance among people
• Less coverage in Rural Areas

57
Opportunity:
• Huge market is laterally untapped; out of estimated 320 millions insurable
markets only 20% of the population is insured.
• Health insurance and pension schemes, an estimated market potential of
approximately $15 billion
• Kotak Life Insurance should give the insurance coverage both to the parent
and child so that their life could be covered in both cases. The Customer
doesn’t mind paying some extra premiu7m for that.
• Fast growing economy.

Threats:
• Players like bajaj and birla sun life with low premium for the similar plans Entry of many
other private companies with equally strong experience and financial strength of foreign
partners making the competition difficult and saturating the urban markets.

• Current Govt. Policies do not encourages gross domestic saving. If the tax liability of
the services class rises, the customer will have little money to invest.

58
 CONCLUSIONS

7.1 CONCLUSION

The overall result of the survey showed mixed response among the people. The people
knew about investment/saving and they do so. People prefer to do saving rather than doing
investment because high return carry high risk. So, fixed deposit scheme & government
securities is favored by maximum number of people because of mind set which is very
difficult to change. Where as now people are also investing in mutual fund, insurance &
shares to earn high return. The mind set of the people work for more security rather than
risk cover & other. So, the mind set of the people is to be molded. So for this The Kotak Life
Insurance take all Govt. and Privet securities and build different funds of portfolio.

It is a good thing that people know that insurance can act as a tax saving tool due to tax
policy by the Government. This is why they do not expect high return from insurance.
However they are ignoring the fact that insurance do give high return. As the survey shows
that people are aware of the fact that there is tax benefit on premium & maturity on
insurance and this may lead to more investment. Ignorance of the mass towards insurance
policy has led because of unawareness of ULIPs.

However it is known from the survey that people are eager to know about ULIPs to secure
their future investment. If the ULIPs or the insurance policies are properly covered through
appropriate channel it may change the misconception of people regarding low return in
insurance.

Till data people are Unaware about Portfolio of Kotak Life Insurance so they think of low
return & no liquidity in Insurance. They are not aware of Unit Link Insurance Plan (ULIPs)
which has all the facilities such as High Return, Liquidity, Tax Benefit, Risk Cover, Safety
and Social Status. They must be aware through proper channel which may change the
misconception in the mind of people regarding low return & no liquidity in Insurance
policies.

CONCLUSIONS FROM QUESTIONNAIRE NO: - 1

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  Returns on Investment & Financial Health of the company are the 2 most important
factors while buying an INSURANCE PLAN.

 Return on Investment gets an average of 4.74 (on a scale of 5) with both median &
mode being 5. S.D & Variance are 0.56 & 0.36 respectively which are quite less &
shows high degree of similarity in the views of the people surveyed, on the
importance of this factor.

 Financial Health of the company gets an average of 4.51 (on a scale of 5) with both
mean & median being 5. S.D & Variance are 0.75 & 0.56 respectively which also
show quite a high degree of similarity in the views but comparatively lesser than
RETURN ON INVESTMENT Factor.

 A comparison with Financial Products, Tax Saving & Policy Features is also very
important factors & plays a very important role in the purchase of an Insurance
Policy.

 The above 5 factors are the most important ones which affect the purchase of an
Insurance Policy.

 An Insurance company needs to pay a lot of attention on these factors before

developing a policy as they play utmost importance in the purchase of an Insurance
Policy

To conclude I would say that these 40 day’s of summer project spent with Kotak Life
Insurance Co. was a great experience as it gave the scope of adding knowledge by
interacting with different people of different level as well as building up relation with them.
The project although helped me to gather an insight to the Financial Insurance Sector as a
whole of Kotak Old Mutual Life Insurance Co.Ltd. in particular.

RECOMMENDATIONS & SUGGESTIONS

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There are few recommendations which have been figured out of the project that may be
useful for the organization to improve on the own Portfolio, how ULIP plans are beneficial
and awareness of people regarding Insurance as an Investment Tool:-

1. The Kotak Life Insurance builds Portfolio on the basis of different age group people.

2. The proper fundamental and technical analysis of privet securities then it include in
the portfolio for maximum return earn on minimum risk.

3. A proper channel is required to make the people aware about Portfolio of Kotak is
differ from others. Advertisements in the Daily Newspaper may be a channel of
propaganda.

4. Television is also a very strong media of advertising. It reaches out the masses and is
a very good audio-visual tool.

5. Door to door campaigning can also help the people become aware of the beneficial
policies of Insurance.

6. Regular survey of this kind can help the company to know the response of the people
towards policies.

Appendix:-

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QUESTIONNAIRE:-1

QUESTIONNAIRE ON ULIP (Unit Linked Insurance Plan)

Questionnaire No.

Sir/Madam,

This research project is a part of our curriculum. This is a general study of Insurance
Plans especially ULIP & thus we seek to know only your general views about insurance
companies. This is not specific to any particular company.

Please grade the following questions on the given 1 to 5 scale.

Features preferred during purchase of ULIP.

(1 – Not required at all, 2 – Some Essential, 3 – Average Essential, 4 – Very Essential,

5 – Very Most Essential)

Please rate the factors in the empty cells.

Sr. Factors
No.

1 Return on Investment
1 2 3 4 5

2 Policy Features
1 2 3 4 5

3 Investment Risk
1 2 3 4 5

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4 Length of Investment
1 2 3 4 5

5 Tax Savings
1 2 3 4 5

6 Forced Savings
1 2 3 4 5

7 Brand Equity of the company

1 2 3 4 5

8 Financial Health (Company)

1 2 3 4 5

9 Core competency of the company in that sector.

1 2 3 4 5

10 Interpersonal Skills (Sales Staff)

1 2 3 4 5

11 Influence of Relatives/Friends in investment decision

making 1 2 3 4 5

12 Post Sales Services support.

1 2 3 4 5

13 Comparison with other Financial product (eg. Mutual

Funds) 1 2 3 4 5

When you think of investment in Insurance, which company name immediately

creeps in your mind? Rank in the order of preference.

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 Sr. No. Company Rank*

1 HDFC Life Insurance

2 ICICI Prudential

3 KOTAK Life Insurance

4 LIC

5 OTHERS

(*: From 1 to 5; 1 is most preferred & 5 is least preferred)

 While investing in an insurance policy whether the company is local or multinational

affects your decision & Why?

Thank You for your cooperation & we assure you complete confidentiality of
the information you have so kindly, sincerely & patiently shared with us.

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 QUESTIONNAIRE No. 2

We are conducting a survey on the Unit Linked Insurance Plan (ULIP). We request the
Respondents to provide their valuable views on the same by answering to this
Questionnaire .The information provided by you will be used solely for Academic purpose
and to study the present Market Potential of ULIP.
Name:_______________
__
Address:-_______________
Contact No.:-___________

AGE:

(A) 15-20 yrs (B) 21-30 yrs (C) 31- 40 yrs (D) 41-50 yrs (E) >50 yrs

GENDER:

(A) Male (B) Female

OCCUPATION:

(A) Government Service (B) Private Service (C) Business

(D) Student (E) Others

ANNUAL INCOME:

(A) Up to 2lacs (B) Between 2-5 lacs (C) 5-7 lacs

(D) 7-10 lacs (E) Above 10 lacs

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Q.1. Are you aware about Unit Linked Insurance Plan (ULIP)?

Ans. (A) Yes (B) No

Q.2. Have you invested in the ULIP of any company;

(i) if yes then please tick the following?

(A) ICICI Prudential life insurance (B) HDFC Standard Life

(C) Bajaj Allianz Life Insurance (D) Kotak Life Insurance

(E) Any other (please specify)

(ii) If No, then would you like to invest in ULIP?

(A) Yes (B) No

Q.3. What is the reason for investment in the ULIP?

Ans. (A) Child Education (B) Child Marriage
(B) Pension (D) Income Growth
(E) Tax Rebate (F) 2 in 1 benefit.

Q.4.What is your time horizon when investing in ULIP?

Ans. (A) Up to 3 yrs (B) Between 4-7 yrs (C) 7-10 yrs

(D) 10-15 yrs (E) Over 15 yrs

Q.5. When investing in a ULIP, what would be your preference?

Ans. (A) Low Risk, Low Gain (B) Moderate Risk, Moderate Gain
(C) High Risk, High Gain (D) No Risk

Q.6. where do you like to invest?

Ans. (A) LIC (B) Post Office (C) PPF (D) Other

Q.7. Are you aware of Kotak Life Insurance Co.?

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Ans. (A) Yes (B) No (C) Something

Q.8. Would you like to know about some “Unit Linked Return Plans”?
Ans. (A) Yes (B) No (C) Something
Q.9. Which sectors do you prefer when you choose equity market?
Ans. (A) Large Cap (B) Mid. Cap (C) Small Cap. (D) Nothing

Q.10. Which sectors do you prefer when you choose Debts market?
Ans. (A) Govt. Bond, (B) Debenture (C) Other…..

Q.11. What is your consideration when you invest in Equity Market?

Ans. (A) High Return (B) High Risk (C) Low Risk (D) Other

Q.12. How long you would like to Invest Fund in this market?
Ans. (A) Long term (B) Short term (C) Mid. Term

Q.13. Which type of fund would you like most?

Ans. (A) Aggressive fund (B) Balance fund
(C) Debts fund (D) Cash fund.

Q.14. Do you like our products? Are impressive?

Ans. ___________________________________________________

Q.15. Which products do you find the most impressive?

Ans. (A) Kotak Flexi Plan, (B) Kotak Safe Investment Plan,
(C) Smart Advantage Plan. (D) Other.

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 BIBLIOGRAPHY

A. Books Referred

1. Research Methodology
- By C. K. Kothari

B. Magazines & Newspapers

1. Money Simplified.

2. Economic Times.

C. Brochures of the Company.

D. Website: www.kotaklifeinsurance.com
www.kotakbank.com
www.wikipedia.org
www.google.com
www.licindia.com

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