A

SUMMER INTERNSHIP REPORT

On

LIFE INSURANCE AND TAXATION

At

Submitted In Partial Fulfillment for the Degree of

MASTER IN BUSINESS ADMINSTRATION

UNIVERSITY OF LUCKNOW

Under the Guidance of: Submitted By:

Mr. Vineet Mishra, Branch Manager, Namrata Singh

Bhootnath, Lucknow. Roll No. 180012135003

DR. J.K SHARMA, Faculty Mentor 2018-2020

1|Page
 Table of content
[Link] Contents Page. No.
1. Certificate of supervisor……………………………………….…………………..3

2. Certificate of authentication………………………………………………….….4

3. Acknowledgement…………………….……………………………………………..5

4. Preface………………………………………………………………………………….…6

5. Executive Summary…………………………………………………………………..7

6. Objective and scope of research………………………………………………...8

7. Life Insurance

✓ Introduction to insurance industry

IRDA (The insurance regulatory
And development authority)…………………………………….…9
✓ Company profile of TATA AIA life……………….……………...11
✓ Corporate objective and values…………………………………..13
✓ Corporate accolades and recognition………………………….14
✓ Product and services provided by
TATA AIA life…………………………………………………………….15
✓ SWOT analysis of the organization……………………………..18
✓ Methodology…………………………………………………………..…19
✓ Findings and conclusion……………………………………….…...25
1. Comparative Analysis of Insurance market in India
✓ A comparative study of different life insurance
Covers Companies operated in India 2019…………….…..27
✓ ULIP Scenario………………………………………………..…………29
1. Taxation on life insurance
✓ A brief about taxation in life
Insurance sector………………………………………………...……..31
✓ Various section related to
Insurance sector…………………………………………………….…33
✓ Instrument that helps to save tax……………………………....36
1. Conclusion……………………………………………………………………………38
2. Bibliography…………………………………………………………………...…...39
3. Annexure………………………………………………………………………..…….40

2|Page
 Certificate of Supervisor

This is to certify that Ms. NAMRATA SINGH Roll No.

180012135003 has completed the summer project
Titled “INSURANCE AND TAXATION” under my
Supervision in partial fulfillment for the degree of
MASTERS IN BUSINESS ADMINISTRATION

DATE :

PLACE : Supervisor (mentor)

3|Page
 CERTIFICATE OF AUTHENTICATION

This is to certify that the project report is genuinely made

by “ Namrata singh” and no plagiarism is done. The project
is done on the topic “Insurance and Taxation” under the
Guidance of “Mr. Vineet Mishra” and have been completed
Successfully.

Faculty coordinator: Prof. J.K Sharma

4|Page
 acknowledgement

Through this acknowledgement, I express my sincere gratitude to all

those people who have been associated with this assignment and
have helped me with it and made it a worthwhile experience.

Firstly I extend my thanks to the various people who have shared

their opinions and experiences through which I received the
required information crucial for my report.

Finally, I express my heartfelt thanks and gratitude to my mentor of

TATA AIA life Mr. Vineet Mishra who gave me the corporate
exposure in a partical manner and guided us and gave us valuable
suggestion regarding the project report. I also warmly thanks my
college mentor Dr. J. K. Sharma for him great response and
contribution in making our project a fruitful one.

5|Page
 PREFACE
The liberalization of the Indian insurance sector has been the subject of much
heated debate for some years. The policy maker 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
investment in to the infrastructure sector. At the other end the policy makers
had the fears that the insurance premier, 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 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.

Weather 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
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.
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 middle market approach, targeting customer segments that are
currently untapped.

6|Page
 Executive summary
As a management trainee I hereby chosen insurance sector because it has a
large opportunities and gives me greater exposure not only professionally but
morally also create better relationship and social network. Insurance sector is
a vast sector and have a huge potentiality in Indian market as demanded for
investment is growing up as people’s standard of living and per capita has
risen up. It is also a Nobel work as insurance as it secures the life of a person
financially and brings hopes to policy holder. Insurance is need for every
individual and group whether in form of family, business, spouse etc. modern
time requires insurance to prevent unknown risk. The scenario is become
more complex day by day one can use insurance for investment purpose.

Working as a trainee I got to know the real picture behind the insurance
sector in TATA AIA life. We understand clients need in better manner and how
to fulfill their needs.

TATA AIA life gave me a perfect platform to understand the market as it is

already renowned name in the market. TATA AIA life is one of the oldest
private sector insurance companies in India and running successfully with
glory. As an organization believes in creating standard and harmony with
employees and basic importance is customer satisfaction. Approx
21companies like Bajaj Allianz, HDFC life, SBI life, Reliance life insurance, Life
insurance Company, ICICI prudential life insurance, IDBI federal etc. are giving
fierce competition and challenges to TATA AIA life. IRDA regulates the various
activities of insurance companies and it is autonomous body. The ULIP plan
and conventional plan gives a choice to policyholders to invest according to
market share and securities or use traditional insurance practices. It covers
risk of both individual and group.

7|Page
Objective and scope of research

The focus is mainly on what the customer want, how the

organization works, where will we discover better
opportunities, which is the best option to match the market,
when does the investor invest the most and for what purpose.
The scope in insurance business is than one gains trust from
others by selling a concept. This will help in further growth
and networking in future requirement. We know the
insurance market and marketing in better manner.
Insurance and tax goes hand in hand. The tax benefits under
sections 80C and 10 (10D) of the income tax act, 1961 puts on
question how best we can utilize the benefit as per IRDA
norms give best to policy holder.

8|Page
 Introduction To Insurance Industry
THE HISTORY OF INDIAN INSURANCE INDUSTRY
LIFE INSURANCE
In 1818 the British established the first insurance company in India
in Calcutta, the Oriental life insurance company. First attempts at
regulation of the industry were made with the introduction of the
Indian Life Assurance Companies act in 1912. A number of
amendments to this act were made until the insurance act is drawn
up in 1938. Noteworthy features in the act were the power given to
the government to collect statistical information about the insured
and the high level of protection the act gave to the p ublic through
regulation and control. When the act was changed in 1950, this meant
far reaching changes in the industry. The extra requirements
included a statutory requirement of certain level of equity capital, a
ceiling on share holdings in such compani es to prevent dominant
control (to protect the public from any adversarial policies from one
single party), stricter control on investments and generally, much
tighter control. In 1956, the market contained 154 Indian and 16
foreign life insurance companies. Business was heavily concentrated
in urban areas and targeted the higher echelons of society. “Unethical
practices adopted by some of the players against the interest of
consumers” then led the Indian government to nationalized the
industry. In September 1956, nationalization was completed, merging
all these companies into the Life Insurance Corporation (LIC). It was
felt that “nationalization has lent the industry fairness, solidity,
growth and reach.”

Some of the important milestones in the life insurance business in

India are:
1912: The Indian life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.

9|Page
1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance business.

1938: Earlier legislation consolidated and amended to by the insurance act

with the objective of protecting the interest of insuring public.

1956: The market contained 154 Indian and 16 foreign life insurance
companies.

1973: Non-life insurance business was nationalized and general Insurance

business (Nationalization) ACT 1972 was promulgated. The efficient and
quality functioning of the public sector insurance companies. The untapped
potential for mobilizing long-term contractual savings funds for
infrastructure. The (Congress) government set up insurance set u insurance
reforms committee in April [Link] committee submitted its report in
January 1994, recommended a phased program of liberalization, and called
for private sector entry and restructuring of the LIC and GIC.

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
regulation and registering the private sector insurance companies. The other
decision takes simultaneously to provide the supporting system to the
insurance sector and in particular the life insurance company was the launch
of the IRDA’s online service for issue and renewal of licenses to agents. 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 regulation. In the private sector 12
life insurance and 6 general insurance companies have been registered.

10 | P a g e
 Company profile of Tata aia life

Tata AIA Life Insurance Company, operating since April 2001, is a joint
collaboration between Tata Sons and the AIA Group with a stake of 51% and
49% respectively. It is a blend of the unquestionable expertise that the two
organizations hold in their respective fields – Tata’s distinct market presence
across diverse verticals in India, and AIA’s reputation of being the leading
independent life insurance group across over 18 markets in Asia Pacific.

Tata AIA Life Insurance Company, one of the leading insurers in the Indian
private sector, holds a creditable record of a claim settlement ratio of 98% in
the FY 2017-18 and grievance settlement of 100% as per 2016 – 17 statistics.
It is accomplished in offering customized life, health and group insurance
solutions to individuals, businesses across sizes and sectors, and associations.
Any individual who is at least 18 years of age and aged less than 70 years is
eligible for an insurance policy from Tata AIA Life Insurance.

SOME FACTS ABOUT THE COMPANY ARE AS FOLLOWS -

➢ It holds a creditable claim settlement ratio of 98% in the financial year
2017-2018
➢ It achieved a grievance settlement of 100%in the financial year 2015-
2016
➢ TATA AIA intends to secure the lives of 3 million consumers by 2020

BENEFITS OF TATA AIA LIFE INSURANCE –

➢ Avail tax benefits under section 80C and 10 (10D) of the income tax act,
1981
➢ Makes any individual right from18 to 70 years of age eligible for
applying for insurance covers
➢ Includes riders and add-on benefits on additional payment of premiums.
➢ Offers the flexibility to select from a wide range of comprehensive life,
health and group insurance plan, which can be customized to meet your
unique needs.

11 | P a g e
 ➢ Competent customer service on a 24*7 basis.
➢ Loyalty addition and bonuses to boost your saving.
➢ Provide flexibility policy term and payment of premium on monthly,
quarterly, half-yearly and yearly basis.
➢ Includes the option of free look period, and return of policy within 15 to
30 days of purchase on being dissatisfied with the policy opted for.
➢ Simplified enrolment and fast claim settlement process available both
online and offline.

GROUP COMPANIES-
➢ Tata consultancy services
➢ Tata motors
➢ Tata steel
➢ Tata chemicals
➢ Tata global beverage
➢ Tata capital
➢ Tata advance system
➢ TATA AIA life insurance
➢ TATA AIG general insurance
➢ Titan
➢ Tata communication
➢ Indian hotels

Each Tata company or enterprise operates independently under the guidance

and supervision of its own board of directors. There are 28 publicly-listed
Tata enterprises with a combined market capitalization of about $145.3
billion (as on March 31, 2018).

12 | P a g e
 CORPORATE OBJECTIVES AND VALUES
VISION
To be the pre-eminent protection provider- enabling dreams, inspiring
healthier and happier lives.

MISSION
To provide the best and simplest life and health insurance solution.

VALUES
CONSUMER OBSESSION

Consumer is paramount in everything we do

• Innovative solution and services to delight our consumers.

• Transparently deliver on promise.

PASSION FOR EXCELLENCE

Set and achieve the highest standards

• Do the right things in the right way

• Take accountability and drive results
• Pioneer change

PEOPLE – OUR CORE

Inspire myself and my colleagues to be and deliver the very best

• Create and take distinctive opportunities for development

• Demonstrate courageous leadership at all times
• Exceptionally reward outstanding performance and right behaviors

13 | P a g e
 CORPORATE ACCOLADES AND RECOGNITION
Tata AIA Life is Aon Best Employer India 2017

• Award testimony to the culture of ownership and performance orientation

built diligently over last two years

• Tata AIA becomes the only Life Insurance company to win this honor twice
in a row

Mumbai, 10th May 2017:

Tata AIA Life Insurance has been recognized as the Aon Best Employer 2017
in India by Aon Hewitt, the global talent, retirement and health solutions
business of Aon. The Aon Best Employers program evaluates employee
opinions to measure engagement, leadership, performance culture and
employer brand and recognizes employer excellence worldwide
.

10th, May, 2018, Mumbai:

Tata AIA Life Insurance Pvt. Ltd. (Tata AIA Life), the life insurance joint
venture promoted by the Tata Group and AIA Group, has been recognized by
Aon Hewitt, the global talent, retirement and health solutions business of
Aon plc (NYSE: AON), as a Best Employer for the year 2018. The Aon Best
Employers Programme measures and recognizes employer excellence
worldwide.

14 | P a g e
PRODUCT AND SERVICES PROVIDED BY TATA AIA LIFE INSURANCE

The tagline of TATA AIA life ‘Rakshakaran Ki Reet’ truly fits the
activities done by TATA AIA life insurance. One can feel the respect,
security and emotion behind the words. TATA AIA life gives benefit
not only for future risk but ensures financial securities by providing
better returns through various popular plans. TATA AIA offers plans
for both risk cover and investment purpose. All the plans are mainly
based on following plans-
➢ Conventional plan
➢ Unit – linked plan
Conventional plan – These are plans which are traditionally
followed and returns are generally fixed. Customers are used to
conventional plan and are widely used. The returns bonuses are
paid after maturity of the policy but flexible plans are also available
for customers. Some of the best suited examples are children’s plan,
retirement plan etc. the returns are stable and risk are very low.
Sum assured* and fund value with terminal bonuses* are given on
maturity. Other benefits given are accidental aids benefit, risk
protection of finance of sudden uncertainties. Covers* are the rate at
which sum assured is multiplied to give the actual rate of return for
certain period.
Unit – Linked Plan - A Unit-Linked Insurance Plan is essentially a
combination of insurance and an investment vehicle. A portion of
the premium paid by the policyholder is utilized to provide
insurance coverage to the policyholder and the remaining portion is
invested in equity and debt instruments. The aggregate premiums
collected by the insurance company providing such plans is pooled
and invested in varying proportions of debt and equity securities in

15 | P a g e
a similar manner to mutual funds. Each policyholder has the option
to select a personalized investment mix based on his/her
investment needs and risk appetite. Like mutual funds, each
policyholder's Unit-Linked Insurance Plan holds a certain number of
fund units, each of which has a net asset value (NAV) that is declared
on a daily basis. The NAV is the value upon which net rates of return
on ULIPs are determined. The NAV varies from one ULIP to another
based on market conditions and fund performance.
Protection Plan - Term plans are typically affordable insurance
plans that provide full protection and financial stability to your
loved ones in case of any unforeseen events. Among life insurance
plans, term insurance provides the highest life insurance
coverage for the lowest premiums during the period of the plan.
Some of plan provide by TATA AIA life under this heading-
➢ Sampoorna raksha plus
➢ Sampoorna raksha
Children’s Plan - The children plan mainly emphasis on benefit of
the child in future. The plan covers child to youngsters. The plan is
design to secure a better life with protection from uncertainties and
give financial strength for future development of the children. It
indirectly fulfill the needs of education, marriage etc. Some of plans
provided by TATA AIA life under this heading-
➢ Smart income plus
➢ Gold income plus
➢ Guaranteed return insurance plan
➢ Guaranteed monthly income plan
Health Plan - Health plans gives the benefit for risk of health
problem due to change in lifestyle, age, geographical condition,

16 | P a g e
critical activities like exposure to radioactive material. It ensures the
policyholder is in safety financial no matter how critical the illness
is. Some of plans provide by TATA AIA life under this heading –
➢ Vital care pro health insurance
Saving and Investment Plans – A wise family will definitely invest
on securing the future and gain financial favors through its own
investment and gain more return. Investment plans assures the
customer lump sum amount as interest and bonus. The plan also
motivates to save and invest more rather than spending. For faster
growth and prosperity saving and investment are best suited for
customer. Mainly young entrepreneur can choose this option. Some
of plans provide by TATA AIA under this heading –
➢ Fortune guaranteed plus
➢ Gold income plan
Retirement plan - A pension plan is a retirement plan that requires
an employer to make contributions into a pool of funds set aside for
a worker's future benefit. The pool of funds is invested on the
employee's behalf, and the earnings on the investments generate
income to the worker upon retirement. Some of plan provided by
TATA AIA under this heading –
➢ Life insurance freedom
➢ Smart annuity plan
Rural products and social products – TATA AIA life also services to
rural development and encourages small saving in rural areas. TATA AIA life
also insure development of large group and provide lump sum amount in
times or requirement or maturity whichever ends first. Some of plan provided
by TATA AIA under this heading – provides

➢ Sath sath insurance plan.

17 | P a g e
 SWOT ANALYSIS OF THE ORGANIZATION

STRENGTH
• Strong brand name which creates trust among the mass
• Domestic player in the country therefore knows the market better
• More competitive sense and better equipped with man power
loyalty
• First mover advantage in insurance market in India
• Strong financial hold in assets and securities

WEAKNESS
• People rely on private insurance less because it is new concept in
India and LIC is having good hold in the market
• Poor retention tied up agents
• Cost of management is heavy in managerial activities like
recruitment, training, purchase as insurance sector definitely
require this activities.

OPPORTUNITIES
• Large Indian market which is unexplored and untapped even now
• Growing standards of people and open thinking of new generation
of ‘spending rather than saving’
• Better outsourcing opportunities in Indian market through
technical skills of Indian experts.

THREATS
• Cut throat competition by the other leading player like LIC, SBI
Insurance, Birla sun life etc,
• Attractive offers and rigorous innovation can divert the minds of
customers towards other players
• Large number of competitors and still the number of competitors
are growing.

18 | P a g e
 RESEARCH METHEDOLOGY
DESCRIPTION OF WORK CARRIED OUT:

Sample size:

89 respondents responded to pre designed questionnaire. Some of the

respondents were working from government/private sector companies, and
had some awareness about the insurance policies.

Period of study:

The period of study was of 45 Days, i.e., from 30th May 2019 to 14th July 2019.

Work Description:

My main task during the internship and during to research work was to study
the life insurance policies of the TATA AIA life Insurance Company limited. I
had to convince the customer to buy the insurance policy from the company. I
was given information about two insurance policies, about which I have given
detailed information above itself. And on the basis of these two policies, I had
conducted research work by studying the life insurance policies of other
insurance companies as well, including LIC.

METHODOLOGY:

The primary source of information was customers and getting the survey
filled from them about their perception and connect towards Life Insurance
products of TATA AIA and acquiring their views and beliefs about the Life
insurance products of the Insurance Industry and so identifying the areas
where the TATA AIA Company can improve their working and services in
order to enhance customer satisfaction and to increase its business. The
secondary data has been derived from the websites of insurance company.

19 | P a g e
 DATA ANALYSIS
FEEDBACK FROM RESPONDENTS

1. Age of respondents:

70.00%
60.00%
50.00%
40.00% Series 1
30.00% Series 2
20.00%
Series 3
10.00%
Series 3
0.00%
Series 2
18-30
31-46 Series 1
47-59
60+

As per given data respondents from age group of 18-30 years forms the most, that is
65.20%, 31-46 years age group forms 23.60%, 47-59 years age group forms 6.70% and age
group of respondents of age group 60 years and more forms the least, that is 4.50%.

2. Gender:

Sales
Male Female

45%
55%

Among all the respondents, 55.10% of the respondents are male and 44.90% of the respondents
are female.

20 | P a g e
 3. Occupation:

OCCUPATION
Student Govt./Pvt Sector Self employed Professional NRI Others

3% 4%
8%

52%
33%

As per the data given above, 51% respondents are students, 33% respondents are from
government or private sector, and 8% are self employed and 3% professionals.

4. How did you come to know about Life Insurance Policies?

Chart Title
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00% Series 1
5.00%
0.00% Column1
Column2

As per the data given above, 10.1% respondents came to know about the life
insurance policies through newspapers and magazines, 22.50% respondents
through Television sources, 18% respondents through Internet sources,
11.20% were contacted by direct sales executives, and 36% gained knowledge
through family and friends. So Friends and families have greater impact from
the other sources given above.

21 | P a g e
 5. Do you have insurance Policy?

Chart Title

52.00%

51.00%

50.00% Series 3

49.00% Series 2
Series 1
48.00%

47.00%

46.00%
Yes No

As per the data given above, 48.3% respondents have some Life insurance policy, while
51.7% respondents do not have any insurance policy.

6. If No, Why Not?

50.00%
45.00%
40.00%
35.00%
30.00%
Series 1
25.00%
20.00% Column1
15.00% Column2
10.00%
5.00%
0.00%
Lack of Returns not Not approached Not affordable
awareness lucrative by
enough intermediaries

As per the data given above, 21.7% of the respondents were not aware about the life
insurance policies, 17.4% respondents think that returns are not lucrative enough to make
them buy life insurance policy, 10.9% respondents think they were not approached by the
intermediaries, and 50% respondents think that they cannot afford the premiums of life
insurance policy.

22 | P a g e
 7. If Yes, which Company’s?

Chart Title

50%

40%
Column2
30%
Column1
20% Series 1
10%

0%
LIC TATA AIA SBI Life Others

As per the data given above, 50% of the respondents are in possession of life insurance
policy of LIC, 10% are possessing policy of TATA AIA, 17% are possessing policy of SBI Life
and 22% respondents are possessing policy of Other Life Insurance companies.

8. What prompted you to buy policy from that company?

Intermediaries/Mar
Sales
keting guys
Friends 12%
14%
Brand Image
46%
Past Performance
28%

As per the data given above, 42.2% of the respondents were influenced by brand image of
the company, 25% respondents were influenced by the past performance records of the
company, 12% respondents were influenced by their friends while buying the life
insurance policy, 11% respondents were influenced by the marketing guys and
intermediaries, 7% respondents were influenced by the advertisements and promotional
activities of the companies, and 3% respondents wanted to try out some new company.

23 | P a g e
 9. Are you customer of TATA AIA?

Sales
Yes No

10%

90%

As per the data given above, 90% respondents are not customers to the TATA
AIA Life Insurance Company, while 10% respondents are customer to the
TATA AIA Company.

10. If yes, what suggestions would you gives for better products?

Chart Title
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Minimum Monthly Others
premium amount premium option
should be less. should be
available.

Series 1 Column1 Column2

As per the given data, 44.8% customers of IDBI Federal feel that minimum
premium amount should be less, 31% customers feel that monthly premium
payment option should also be available.

24 | P a g e
 FINDINGS AND CONCLUSIONS
Following are the findings and conclusions from the above given
data analysis:
1. Most of the respondents that possessed the life insurance policy
were influenced by family and friends, as around 36% respondents
were influenced by Family and friends while purchasing the
insurance policy. Furthermore, around 22.5% respondents were
influenced by television advertisements. So, it is quite clear that the
company should plan the policies that are family centric (for e.g.
Group insurance policies), and also company should invest in
advertisement through television and media to reach out more
customers.
2. Most of the respondents were influenced by the brand image
(around 42%) while taking buying decision. And incidentally second
most number of respondents were influenced by friends (around
12.5%) while taking decision regarding purchasing the life
insurance policy. So company needs to improve its brand image as
well.
3. The most important finding of the survey is that only 10% of all
the policyholders are customers of TATA AIA Company. So, the
company needs to connect to more customers.
4. Among all the Policyholders, who are customers of TATA AIA
Company, around 44% policyholders feel that minimum payable
premium should be less than that is at present, and also 31% policy
holders feel that monthly premium payment option should also be
provided to customers in the policies. Company should invest more
on product designing and should improve the products as per the
changing needs of the customer base.
25 | P a g e
5. The company should increase its workforce and appoint more
marketing guys to connect more customers.
6. Among all the policyholders, almost 50% are customers of LIC,
which shows that people still do not have much trust in private
sector companies. So, private sector companies need to build up
trust among the public, so as to increase their market share and
reach to the customers.
7. The companies need to tap the 18-30 years age group segment,
and try to convince them to purchase life insurance policy.
8. The companies should try to plan the policies with premiums that
are affordable by all the people of all age groups.

26 | P a g e
COMPARATIVE ANALYSIS OF INSURANCE MARKET IN
INDIA 2018 - 2019
Some of the major players in Indian life insurance market
which are with competition on TATA AIA life are as follow-

• Life insurance corporation of India (LIC)

• SBI life insurance company limited
• ICICI prudential life insurance company ltd.
• Birla sun life insurance company ltd.
• HDFC life insurance company ltd.
• Met life India insurance company pvt. Ltd.
• Allianz Bajaj life insurance company ltd.
• AEGON life insurance
• Canara HSBC OBC life insurance
• Bharti AXA life insurance
• IDBI federal life insurance
LIC and is at the pinnacle as it is the oldest running insurance giant in the country
and government undertaking company. Other private companies which follow with
high rise are ICICI prudential life, HDFC life insurance, Aditya birla sun life. The
main reason behind LIC in top slot is that it had gained trust with the people for so
many years and build a big mark

The private players have to compete more for establishing their name in the
market. So far many private companies were established after 2000 after
government deregulated act for privatization of insurance. The private players are
new to the market and are in process to gain some reputation and market share.
Many private has collaboration with experience foreign giants to give better output
and gain experience and also following the regulation of IRDA to joint venture
with parent company of private companies.

27 | P a g e
A Comparative study of different life insurance companies operating

In India 2019

Sales
LIC ICICI AEGON BAJAJ CANARA BHARTI
EXIDE OTHERS TATA AIA SBI HDFC

5% 5%
6%

12%
50%

4%
3% 10%
1%
2% 2%

As per the diagram the biggest pie is possessed by LIC with 50% share. ICICI
prudential is the second in share with 10% and first in private sector to have
the biggest pie. TATA AIA life market share is overall 6% . TATA AIA life has
increased his share from 4.6% (financial year 2017) to 6% (2019) which is
appreciable. The share may look tiny but is expected to grow to 9% due to rise
in market share and growing trust among the people on TATA AIA life. The
returns are also coming back after long investment gradually for the company
which shows positive sign. But comparing to many private companies
expected ICICI prudential TATA AIA life market share is comparatively is in
descent zone and can be placed in second in private sector market share as
per diagram.

28 | P a g e
ULIP SCENARIO – ULIPs contribution to policies sold in 2018-
2019 ( up to 8 March, 2019)
As per life insurance council data, an industry body of life insurance
companiesin india, life insurance industry paid rs. 10954 crore in
commissionto insurance agents in 9 month during april-december
2018 period. Total commission paid to agents fell to 5.88 per cent of
the total premium collected, against 6.41 per cent in the same period
last year. The number of agents also dipped by 2,73,984 to
27,10,301, as compared to 29,84,285 in 2017. Life insurance
corporation, the only state-owned life insurer, also reduced its agent
strength by 62,956 guring the calender.

TATA AIA life has performed well in ULIP sector and earned profit
from ULIP plans. TATA AIA see better earning in ULIP plans
therefore trying to concentrate more in ULIP through various
existing market securities. ULIP is growing trend in indian insurance
market. A tie with SEBI and IRDA regulation are followed by
companies to earn faster profit and growth. There is competition in
ULIP sectors.

29 | P a g e
TAXATION ON LIFE
INSURANCE

30 | P a g e
A BRIEF ABOUT TAXATION IN LIFE INSURANCE SECTOR
The life insurance market is overflowing with variety
products like pure life insurance, health insurance, children
insurance plan, pension plan etc. giving you a wide spectrum
to choose from. Life insurance is an amazing tax-saving tool
and an indispensable part of an individual’s financial
planning exercise.
Life insurance is a critical part of an individual’s personal
insurance portfolio. It’s a strategic part of the future security
that one must provide for one’s family in the face of the
inevitable. Insurance is an important part of income tax
regulation.
The proper type and the appropriate level of life insurance
can be a matter of life and death.
Securing the long-term financial security and quality of life
for the people you love most is crucial, and the first step in
securing it is life insurance.
Many individuals also look at life insurance from tax
planning perspective.

31 | P a g e
EDUCATION CESS : An additional surcharge called as
‘Education cess’ is levied at the rate of 2% on the amount of
income tax and surcharge (if any) in all cases shall be levied.
SECONDARY AND HIGHER: An additional surcharge, called the
“secondary and higher education cess on income – at the rate of 1%
of income-tax and surcharge (not including the “education cess on
income-tax”) in all cases shall be levied.
With the introduction of the direct tax code (DTC), to be
implemented from the next financial year i.e. April 2019 onwards,
only the approved pure life insurance products and annuity schemes
would fall under the EEE tax status. As per the EEE tax regime the
investments made into the life insurance policy, the earnings and
the withdrawal all are exempt from tax.
As per the DTC , rest of the life insurance schemes apart from those
stated above would fall in the EET (Exempt, Exempt, Tax) category
i.e. the withdrawals under these schemes would no longer be tax
free. DTC deals with calculation the income eligible for taxation.

• The section 56(2)(f) of the DTC, states that amount that is

received from life insurance policy including any amount
received as bonus on the policy will be taxed under gross
residuary income .

32 | P a g e
 VARIOUS SECTION RELATED TO INCOME TAX
Purchasing life insurance is a must, especially if your spouse and
children are dependent on your income to survive. Even if your
spouse is earning, it would be a good idea to cover your life – though
this cannot make up for the emotional loss, but at least, your family
members will be financially secure. There are many life insurance
companies in India, offering hundreds of plans for various needs and
age groups. While choosing a plan, you also need to consider the tax
implications of taking a life cover too.

Deduction under Section 80C:

If you have paid an insurance premium to insure your own life or
the life of your spouse or child, such premium payments are eligible
for deduction under section 80C of the Income Tax Act. Irrespective
of your child being dependent or independent, minor or major,
married or unmarried, the deduction under section 80C shall be
allowed. An individual and a HUF, both, can claim this deduction
under Section 80C.
Many taxpayers have a doubt about whether this deduction is
available only in respect of life insurance cover taken with LIC. This
is not true. Premium paid towards a life cover taken with any
insurer that is approved by the Insurance Regulatory and
Development Authority of India (IRDAI), is eligible for a Section 80C
deduction.
However, to claim deduction under section 80C the premium paid
should not exceed 10% of the sum assured where the policy has
been issued after 1st April 2012. For policies issued prior to 1 April
2012, in order to claim this deduction, the premium paid should not
exceed 20% of the sum assured. Further, here it is important to note
that a policy issued after 1 April 2013, covering the life of an
individual with a disability referred to under Section 80U or a

33 | P a g e
disease referred to under Section 80DDB, the requirement to claim
the deduction under Section 80C is that the premium should not
exceed 15% of the sum assured.
“Sum assured” simply means the minimum amount assured under
the policy to the survivor. This amount does not include premium
which has been agreed to be returned or any payment of bonus on
the policy.

Exemption under section 10(10D) on Maturity amount

received

When the premium paid on the policy does not exceed 10% of the
sum assured for policies issued after 1 April 2012 and 20% of sum
assured for policies issued before 1 April 2012– any amount
received on maturity of a life insurance policy or amount received as
bonus is fully exempt from Income Tax under Section 10(10D). Also
covered here are policies taken after 1 April 2013, on the life of a
person with a disability or a disease specified under Sections 80U
and 80DDB respectively, where the amount received on maturity is
tax-free provided the premium paid does not exceed 15% of the sum
assured.

No exemption from income tax on the maturity of

policies
Taxation, where the premium paid, is more than 10% of the sum
assured – Any money received from a life insurance policy, where
the premium is more than 10% or 20% of the sum assured as the
case may be, is fully taxable.

34 | P a g e
TDS on life insurance policy

Starting October 2014, if the amount received from a life insurance

policy is more than Rs 1,00,000, on policies not covered under an
exemption under Section 10(10D), then TDS @ 1% shall be
deducted by the insurer before making this payment. TDS will also
be deducted on bonus payments. If the amount received is less than
Rs 1,00,000, no TDS shall be deducted but the amount received shall
be fully taxable for you. You can claim credit for the TDS deducted in
your Income Tax Return.
The union budget 2019 has proposed to amend the TDS on
insurance policy proceeds to 5% on the amount of income
comprised in the proceeds paid or payable upon maturity on or after
1st September 2019.

35 | P a g e
INSTRUMENT THAT HELPS TO SAVE TAX

LIFE INSURANCE – All investments made toward life insurance

are eligible for are bate u/s 80C of the income tax act. Life insurance
are eligible for the rebate. Premium paid under pension plan under
pension plan of various life insurers are also eligible for tax rebate.
The major advantage of life insurance product is that they provide
tax free interest income.

➢ Equity linked saving scheme:

These are mutual fund products and carry market risk. These too,
like life insurance products, are eligible tax rebate under Section
80C, if they have a lock in period of 3 years. A major disadvantage of
these instruments is that they do not provide life cover.

➢ Public provident fund:

These are 15 year long investment and provide tax-free returns. The
current rate of returns is 8%. Maximum investment allowed under
this instrument is Rs. 70,000, which is eligible for a rebate u/s 80C.

➢ Bank deposits:

Tax rebate is available for 5 yrs deposits in any scheduled bank. The
point to remember is that the entire interest income is taxable.

➢ Home loans:

Section 24 of the income tax act allows you to deduct the total
interest paid on your home loan from your taxable income for the

36 | P a g e
same financial year. You can also claim a rebate u/s 80C for the
principle amount repaid on the home loan.

➢ Tuition fee:

The entire tuition fee paid for up to two children is exempted from
tax. Donation of any kind like development fee etc. are excluded
from the same

➢ Loan on higher education:

Those servicing a loan taken for higher education can claim a
deduction on the interest paid for the load u/s 80E of the income tax
act. Currently there is no ceiling on the interest amount that can be
claimed under this section. The principle amount however
completely taxable.

37 | P a g e
 CONCLUSION
Life insurance plays a vital role and has become an important part in
our life. This is a popular medium which assures us hope to lead a
better life with financial security and strength and make us care free
from unknown financial risk such as scarcity in times of need in
future. It is truly a noble job.
With change in time the face of insurance sector has changed and
grown to better level because of the complexity in the social,
political and culture. Insurance has become a new medium of
investment. The best part is that tax is not levied in life insurance
plans. So many investors take it as a better option to invest for
saving and relief from tax.
Life insurance is surely beneficial and encourage saving. The
purpose behind life insurance is not only investment or tax saving
but also to create value for money. It promises stability of our hard
earned money and gives extra benefits in return like bonus,
accidental aids, bonus, savings, child and retirement benefits etc.
The privatization of insurance companies by government of India
created milestones in booming of insurance market in India.
Companies like TATA AIA life has are new born babies in this sector
but they have huge scope in future to come. The main strength of
TATA AIA life is knowing of domestic market better so it should take
more advantages from its strength. The standard in service of
insurance market is flourishing due to entry of many private
companies but competition has grown in much faster pace.
Therefore new born companies and foreign companies has to be
more competitive, alert, award and innovation to survive in such
scenario.
38 | P a g e
 BIBLIOGRAPHY

[Link]
[Link]
[Link]
[Link]
[Link]
[Link]
[Link]
Journals and books

• Outlook money

• Economics times

39 | P a g e
 ANNEXURE

1. Questionnaire

Life Insurance

* Required
1. Name

2. Age *
• 18-30
• 31-46
• 47-59
• 60+

3. Gender *
• Male
• Female

4. Occupation *
• Student
• Govt./Private sector
• Self employed
• Professional
• NRI
• Others

5. How did you come to know about Life Insurance Policies? *

• Newspaper/Magazines
• Television
• Internet
• Family/Friends

40 | P a g e
 • Direct Sales Executive
• Others

6. Do you currently have an insurance policy? *

• Yes
• No

7. If No, why not?

• Lack of awareness
• Returns not lucrative enough
• Not approached by intermediaries
• Not affordable

8. If Yes, which company's?

• LIC
• TATA AIA
• SBI Life
• Others

9. What prompted you to buy policy from that Company?

• Brand Image
• Past performance record
• Friends
• Intermediaries/marketing guys convinced me
• Impressed by advertisements/promotions
• Desire to try out new company

10. Are you Customer of TATA AIA? *

• Yes
• No
11. If yes, what suggestions would you give for better products?
• Minimum Premium amount should be less
• Monthly premium option should be available
• Others

41 | P a g e