Science, Technology and Development ISSN : 0950-0707

A STUDY ON POLICY HOLDERS SATISFACTION TOWARDS THE PRODUCTS OF LIFE INSURANCE CORPORATION OF INDIA -WITH SPECIAL REFERENCE TO DISTRICT

Dr.E.K.SIVASAKTHIVEL Associate Professor, Research Supervisor and HOD Department of Commerce, Poompuhar College (Autonomous), Melaiyur- 609107, Nagapattinam District Mr. K. THIRUNAVUKKARASU Ph.D., Research Scholar, Department of Commerce, Poompuhar College (Autonomous), Melaiyur- 609107, Nagapattinam District. ABSTRACT In Indian insurance sector is not only playing a role within the financial system, but also has significant socio-economic functions of providing risk cover to the poor populations. Insurance provides financial protection against a loss arising out of happening of an uncertain event. The major objectives of this research are to ascertain the socio-economic profile of sample respondents and identify the satisfaction level of policyholders in LIC`s services. This research has also endeavors to develop the policy holder’s satisfaction. Primary data has been collected for this present study. The primary data was collected from 539 sample respondents from , by simple random sampling method. Interview schedule was the main tool used to collect the pertinent data from the selected sample respondents. Suggested this study, the analysis it is identified that educational qualification and monthly income are found to be associated with policy holder’s satisfaction. They need comfortable environment to move with officials, and new strategies to make the services offerings more effective and efficient. LIC should spread its wings in rural areas; it will enable the policy holders rather they approach in urban area. LIC has to create awareness among female policy holders, regarding the benefits of the LIC policies. To conclude this study; the policyholders of LIC are satisfied with the specified parameters concerned with taking policy, while the policyholders of LIC are more satisfied with their companies. KEYWORDS: Policyholders, Services, Products and LIC. INTRODUCTION Economic development of any country is mainly based on financial market. It transfers the resources from savers to the users. Since insurance is the part of the financial sector positive

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and far-reaching changes towards betterment have come into being in both life and non-life insurance markets. Perceived benefits rather than actual benefits are the backbone of marketing of goods and services and marketing of life insurance is no exception. So, insurance sector found a new dimension to increase its business. Insurance product packaged savings with risk management feature. Insurance sell the promise to pay on future date for a predefined contingency. Insurance is an arrangement to deal with the unpleasant contingencies. The essence of insurance is sharing of losses and substitution of certainly for uncertainly. In an increasingly competitive economy the need for insuring against risk is well recognized. The present business scenario is totally consumer oriented. Every company faces stiff competition from its competitors, each provides the best product at competitive rates. As a result customers have a lot of choices to get the best with the least cost. To face this competition, it is very important to know customer’s behavior, their needs, preference and also the motivation factors. PROFILE OF ARIYALUR DISTRICT Ariyalur town is a district headquarters in the South Indian State of . The town is located at a distance of 310 km (190 mi) from the state capital Chennai. Ariyalur district was carved out of Perambalur district on January 1, 2001. But, it was merged with Perambalur district on March 31, 2002. Ariyalur district was re-carved on November 23, 2007. The district is bordered by the districts of Cuddalore to the north and north-east, Nagapattinam to the east, Thanjavur to the south and south-east, Tiruchirapalli to the south-west and Perambalur to the west. In this district, the LIC of India having a ten branches for rendering services to their customers. REVIEW OF LITERATURE Gupta Ajit Kumar (2006) in his thesis on “LIC Investments in Co- operative and Private Sectors in India: A Comparative Study” highlights the different facets of the investment management of the LIC of India in the Co- operative and Private Sectors within the broader regulatory framework of the IRDA. A comparative analysis of the management practices of the LIC of India relating to funds is discussed and that between the two sectors, the investments in private sector are attracting more returns than co- operative sector in many cases of study. Pooja Bhalla and Gagandeep Kaur (2007) in their article on “Private Players and Life Insurance Industry” present that the opening up of the insurance sector to private players has posed a challenge to the public sector giant i.e. LIC of India. Though, it still enjoys the dominant

position but the proportionate share is decreasing year after year. On the other hand, the private

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players with their innovative products, smart marketing, wider distribution networks and better customer service have been successful in attracting a large number of customers. Sai Srinivas Dhulipala (2008) in his article on “Being Cost Effective – Riders in Life Insurance Policies” observes that the riders offer a host of benefits both to the insurer as well as to the insured and thus had come to be accepted as an integral component of life insurance business. Bishnoi Mahender (2010) in his thesis on “CRM Strategies in Indian Life Insurance Industry – A Comparative Study of Public and Private Sector” expresses that the prompt settlement of a genuine claim is an important function of the insurance industry and also a foundation for the CRM Strategies. Further, the CRM strategies are proved to help the company to address the important concerns of the customers and also build their patronage continuously. The potential competition in the industry pushed the way of accepting CRM strategies. Ramakrishnan, R. (2011) in his article on “Hunt for Actuary in the IRDA” observes that an actuary with 15 years experience, or an appointed actuary at present, is getting about three times the remuneration offered by the Government. He further states that the actuary is a rarely visible profession and posing some peculiar problems to even to the Ministry of Finance for filling up of the vacancy of the Member (actuary) on the Board of IRDA. STATEMENT OF THE PROBLEM Insurance products are basically risk protection products. But in India, it is the most mis- sold product and it is sold as investment product rather than a risk protection product. Therefore, the policyholders‟ intent for buying an insurance policy itself is a research question. So, finding out the reasons and factors influencing the selection of life insurance product is necessary for better service. The retention of policyholders largely revolves around the identification and satisfaction of policyholders‟ needs and requirements. Policyholders‟ satisfaction or dissatisfaction gives an opportunity for improving quality of service in order to remain commercially competitive and to develop market base. The perceptions of policy holders on life insurance product will be conducted in Ariyalur division to provide valuable suggestions for the penetration of the industry. OBJECTIVES OF THE STUDY The present study has the following objectives: Hereafter, the Life Insurance Corporation of India was known as LIC of India in this study:  To study the reasons for the selection of LIC of India.

 To measure the level of policyholders satisfaction about life insurance services.

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METHODOLOGY The descriptive research design was used in this study. The study was basically on primary data. Totally, LIC having ten branches in Ariyalur district. The researcher has undertaken all the branches for this study. The researcher has selected all these branches under simple random sampling method. The researcher conducted 600 respondents from ten branches, but 100 respondents are not clearly given the information regarding this title. Therefore, the researcher selected 500 policyholders in order to obtain their opinion of the service offered by LIC of India.

ANALYSIS AND INTERPRETATION

Table 1 shows that the demographic profile of the respondents selected from Ariyalure district. As maintained earlier 500 respondents were selected in this study. Out of which 67.6 percentage of the respondents are male and 30.4 percentage respondents are belongs to the age group of 31 years to 40 years. In this age group only aware of taken out of life insurance policy for their life. The least percentage of 11.2 in age group of below 20 years old. This age group are mostly in students category. In this group policies are taken by the parents of the policy holder. Among the 500 respondents, 78.4 percentage respondents are married and 29.4 percentage respondents have the educational qualification is under graduation. 11.2 percentage respondents are having primary school level. The majority of the occupational status of the respondents is 28.4 percentage are government employees and 3percentage respondents are house wives. Out of 500 respondents, 28.4percentage are come under the annual income category of above Rs.4,00,000 and 7.6 percentage respondents annual income is below Rs.1,00,000. Nearly 57 percentage respondents of the total respondents have 4 to 6 members in their family. It is concluded from the table are of Ariyalure district is agricultural based and labour oriented segment. The highest amount of the policies is not expected from this area.

Table 1

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Demographic Profile of the respondents

Demographic No. of Particulars Percentage Factor Respondents Male 338 67.60 Gender Female 162 32.40 Below – 20 56 11.20 21-30 114 22.80 Age (Years) 31-40 152 30.40 41-50 110 22.00 Above -51 68 13.60 Married 392 78.40 Marital Unmarried 94 18.80 Status Widowers 14 2.80 Primary school 56 11.20 High School 63 12.60 Higher Secondary 99 19.80 Educational Under Graduate 122 24.40 Status Post Graduate 86 17.20 Professional 74 14.80 Businessmen 42 8.40 Agricultural labourers 25 5.00 Govt. Employee 142 28.40 Private Employee 138 27.60 Occupational Professional 58 11.60 Status Housewives 18 3.60 Labourers 15 3.00 Students 62 12.40 Below 2,00,000 38 7.60 2,00,000-4,00,000 93 18.60 Monthly 4,00,000-6,00,000 96 19.20 Income (Rs.) 6,00,000-8,00,000 131 26.20 Above 8,00,000 142 28.40 Up to -4 140 28.00 Family Size 4 – 6 286 57.20 Above 6 74 14.80 Source: Computed from Primary Data

Table 2

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Level of Satisfaction of Respondent

Highly No Highly Statements Satisfied Dissatisfied Total Satisfied Opinion Dissatisfied No. of the 161 141 68 73 57 500 Knowledge Respondents of life insurance Percentage 32.2 28.2 13.6 14.6 11.4 100

No. of the Knowledge 176 187 53 38 46 500 of schemas Respondents available in LIC Percentage 35.2 37.4 10.6 7.6 9.2 100

No. of the 140 131 96 119 14 500 Pamphlets Respondents for all the policies Percentage 28 26.2 19.2 23.8 2.8 100

No. of the Guidance 177 130 76 65 52 500 for Respondents selection of policies Percentage 35.4 26 15.2 13 10.4 100

No. of the 184 146 67 67 36 500 Easy Respondents accessibility Percentage 36.8 29.2 13.4 13.4 7.2 100

No. of the 289 138 28 37 8 500 Regular Respondents meet with customers Percentage 57.8 27.6 5.6 7.4 1.6 100

No. of the 199 120 74 61 46 500 Assistance Respondents to availing of loans Percentage 39.8 24 14.8 12.2 9.2 100

No. of the Assistance 179 178 69 45 29 500 to get the Respondents duplicate policy Percentage 35.8 35.6 13.8 9 5.8 100

No. of the 188 116 95 49 52 500 Respondents

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Assistance to surrender Percentage 37.6 23.2 19 9.8 10.4 100 of policy No. of the 182 204 49 41 24 500 Assistance Respondents to death claims Percentage 36.4 40.8 9.8 8.2 4.8 100

Source: Computed from Primary Data

Table 2 shows that the level of satisfaction of the respondent from the services provided by the LIC agents in Ariyalur District. Majority of the services provided by the LIC are highly satisfied by the respondent. Only less than 10 percent of the respondents are dissatisfied with agents for his services. SUGGESTIONS AND RECOMMENDATIONS: The following suggestions are recommended for improving the performance of the Life Insurance Corporation of India, Ariyalur District.  Product satisfaction can definitely be improved by keeping the premium low while enhancing the returns and liquidity aspects of the LIC products in comparison with other financial products. Since the cost of life policy (premium) is based on mortality rate, management expenses and investment income, any improvement in these variables should go to the benefit of policyholders. For this purpose, LIC should periodically revise the mortality table once in five years and review the premium rates once in three years. If any 44reduction in the premium rates takes place as a result of such reviews, the benefit can be passed on to the policyholders.  Liquidity of life insurance policies can be improved by introducing short-term products. Moreover, if value added benefits like switch- over option to other plans, introduction of flexible products, rider benefits and the like are added to the existing product benefits, it would increase product satisfaction among the policyholders.  To improve the tangibility dimension of branch offices, customer facilities like seating arrangements, drinking water, toilets and the like may be provided where these facilities are found inadequate.  Since the majority of the population lives in rural areas, the LIC needs to develop the proposal forms in the regional language so that the customers are able to understand what is contained in the form. The cooling period of 15 days presently fixed may be extended to 30 days,

entitling the policyholder to return the policy and claim premium refund subject to the insurer‟s

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charges and cost of risk cover provided. Further, the policyholder may be given a copy of the proposal form along with the policy document. CONCLUSION: Ariyalur district is basically depended on agricultural business. After liberalization of an economy and privatization of the insurance industry, the insurance knowledge of the rural people is very poor. They need comfortable environment to move with officials, and new strategies to make the services offerings more effective and efficient. LIC should spread its wings in rural areas; it will enable the policy holders rather they approach in urban area. As per this study, the analysis is identified that educational qualification and monthly income are found to be associated with policy holder‟s satisfaction. LIC has to create awareness among female policy holders, regarding the benefits of the LIC policies. To conclude this study; the policyholders of LIC are satisfied with the specified parameters concerned with taking policy. The policyholders of LIC are more satisfied with their services. REFERENCES 1. Avadhani, V.A, Marketing of Financial Services, Himalaya Publishing House, Mumbai. 2. Gordon and Natarajan, Financial Markets and Services, Himalaya Publishing House, Mumbai 3. Insurance Principles and practice, M.N. Mishra, S.Chand company Ltd. New Delhi. 4. Kothari. C.R. Researck Methodology, New Age international Publishers, New Delhi,2009. 5. LIC of India-A review and Financial Highlights: The Insurance Times, Vol.7, January 1987. 6. Mishra, M.N. and Mishra, S.B., “Insurance Principles and Practice”, S.Chand & CompanyLtd., New Delhi, 2010. 122 Gupta, P.K.., “Insurance and Risk Management”, Himalaya Publishing House, Mumbai,2010. 7. RamaDevi, V and A.Ramesh “Life insurance industry in India” life insurance today Vol: IV NO: 1 APR 2008 8. Ramakrishnan, R., “Hunt for Actuary in the IRDA”, The Hindu, June 13, 2011. 9. Srinivasa Rao, K and Malyadri, P. “Customer service in insurance industry: Challenges ahead” the insurance times Vol:XXVIII No:7 July 2008.

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