SBI Life Insurance Porter Five(5) Analysis-Snaga (2023)

What are Porter's five powers? How can SBI Levensverzekeringen use it?

SBI Life Insurance (India) executives can use Porter's Five Forces as a strategic management tool for industry analysis. It will assist SBI Life Insurance executives in mapping the various competitive forces prevailing in the financial industry in local and international markets. .

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SBI Levensverzekeringen (SBIL) is listed on the NSE.

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How SBI Life Insurance (India) Can Use Porter Five Forces

By consistently applying the Porter 5 Forces, managers at SBI Life Insurance can gain insight into:

rivalry between existing players in (life) insurance,

bargaining power of buyers of SBI life insurance policies,

bargaining position of SBI life insurers,

The threat of new entrants to the insurance (life) industry,

Threat of substitute products and services in the (life) insurance industry.

Uvod u Porter Five Forces

Michael E. Porter's "How Competitive Forces Shape Strategy" was first published in 1979 and revolutionized strategy. Popularly known as "Porter's Five Forces" - they have not only influenced a generation of academic research, but also provided a map for in-depth analysis of competitive forces.

Porter's five forces shaping the structure of the insurance industry (life insurance).

Porter's five forces shaping the structure of the insurance (life) industry are:

1. Bargaining Power of Insurers (Life Insurance) – If providers have strong bargaining power, they will get higher prices for SBI life insurance. This will impact SBI Life Insurance's ability to outperform the insurance (life) industry.

2. Bargaining Power of SBI Life Insurance Buyers and in the Financial Industry – When buyers have strong bargaining power, they typically tend to lower the price, limiting the potential of SBI life insurance to generate sustainable profits

3. Threat of new entrants in the (life) insurance industry – when there is a strong threat of new entrants in the (life) insurance industry, the current players are willing to make less profit to reduce the threat of new entrants

4. Rivalry between the existing players in the (life) insurance industry - When competition is fierce, it becomes difficult for the existing players such as SBI life insurance to generate sustainable profits.

5. Risk of substitute products and services in the insurance industry (life insurance) - When the risk of substitute products and services is high, SBI Life Insurance must either invest continuously in research and development or risk falling behind industry disruptors.

Why is Porter's Five Forces Analysis important for SBI life insurance?

Executives can use the Porter Five Forces model to analyze the competitive landscape facing SBI Life Insurance in the (life) insurance industry. Porter's Five Forces Analysis of SBI Life Insurance will help understand the nature and magnitude of competition and provide solutions and how SBI Life Insurance can compete.

While different industries may seem very different from the outside, when carefully analyzed these five forces determine the drivers of profitability in any industry. (Executives can use Porter's Five Forces to understand the key drivers of SBI Life Insurance's profitability in the insurance and life insurance industry.)

Porter 5 Strengths, Competitive Forces and Industry Analysis

The primary goal of SBI Life Insurance strategists and executives is to help the organization build a sustainable competitive advantage and thwart the competitive challenges faced by other players in the (life) insurance industry.

Step 1 - Define the relevant industry for SBI Life Insurance. For the purposes of this document, SBI Life Insurance mainly deals with the insurance (life) industry.
Step 2 - Identify SBI Life Insurance's competitors and group them by segment within the financial industry.
Step 3 – Assess Porter's five forces in relation to the (life) insurance industry and assess which forces in (life) insurance are strong and which are weak.
Step 4 - Determine the overall structure of the financial sector and test the consistency of the analysis
Step 5 - Analyze current and future changes in the individual strengths of the insurance (life) industry. This can help predict developments in the financial sector.
Step 6 – Based on the Porter Five Forces, identify aspects of the industry structure that can be influenced by SBI Life Insurance's competitors and new entrants to the (life) insurance industry.

How to use the Porter Five Forces framework to develop SBI life insurance strategies?

In order to achieve above-average profits in the long term compared to other players in the (life) insurance industry, SBI Levensverzekeringen must develop a sustainable competitive advantage. Analyzing the (life) insurance industry using Porter Five Forces can help SBI Life Insurance map the different forces and identify areas where SBI Life Insurance can position itself.

By conducting an industry analysis using Porter's Five Forces, SBI Life Insurance is able to develop four generic competitive strategies.

PESTEL / STEP / PEST Analysis and solution of SBI life insurance

SWOT analysis and solution of SBI life insurance

Four generic strategies based on Porter's Five Forces analysis from SBI Life Insurance

cost leadership

Cost leadership enables SBI Levensverzekeringen to become a cost-effective producer in the iInsurance (life) industry. How it can become the cost leader depends on the strengths and structure of the financial industry. As part of a cost leadership strategy, SBI Life Insurance may assess the pursuit of economies of scale, proprietary technology, supply chain management capabilities, supplier diversification, preferential access to raw materials and other factors.


SBI Life Insurance may also follow a differentiation strategy based on the strengths of the insurance (life) industry. As part of a differentiation strategy, SBI Life Insurance can strive to be unique in the (life) insurance industry by providing a value proposition that customers appreciate. SBI Life Insurance may select one or more attributes related to products and services that insurance customers (life insurance) value most. The goal is to ask for the best price based on the differentiation and uniqueness of the offer. By analyzing the (life) insurance industry using Porter's five forces, SBI Life Insurance can avoid areas where there are too many competitors.

Focus – Focus on costs and differentiation

Focus's generic strategy is based on the competitive selection of covers within the (life) insurance industry. SBI Life Insurance can select a segment or group of segments and adjust its strategy to serve only that segment. Most organizations follow some variation of a true focus strategy.

The Focus strategy comprises two variants for SBI life insurance

(a) With regard to cost orientation, SBI Levensverzekeringen can claim cost advantages in its preferred segment in the financial sector.

(b) In the SBI life insurance differentiation strategy, differentiation can be made in the target segment in the financial sector.

Both variants of the focus strategy are based on the differences between the target segment of SBI life insurance and other segments of the insurance (life) industry.

Reference for SBI Life Insurance Porter 5 Forces

SBI Levensverzekeringen (2018), annual report of SBI Levensverzekeringen.

ME Porter, Concurrentiestrategie (New York: Free Press, 1980)

OE Williamson, Markets and Hierarchies (New York: Free Press, 1975)


What questions do you answer for life insurance? ›

Most life insurance applications ask about your medical history, driving record, medications/prescriptions, age, hobbies, job, and history with drugs and alcohol. The answers you provide on your application are confirmed during the phone interview.

How is SBI life surrender value calculated? ›

The surrender value of SBI Life insurance policy is calculated as a Single premium multiplied by 75% of the outstanding term to maturity/ total term.

Can I surrender my SBI life policy after 3 years? ›

As per IRDAI guidelines, lock-in period of five years needs to be completed before any payout can be made to the policyholder. How can I surrender my policy? To surrender your policy, please visit the nearest SBI Life Branch and submit the duly filled Surrender Request Form.

How to withdraw money from SBI Life Insurance after maturity? ›

Pension Maturity
  1. Original Policy Document.
  2. Maturity Discharge Voucher.
  3. Option Sheet (available in SBI Life Branch 3 months before the due date)
  4. Life Assured's current address proof.
  5. Life Assured's ID proof.
  6. Direct Credit Mandate form (download sign)Life Assured's Valid## Bank pass book/bank statement/crossed cheque.

How to answer insurance questions? ›

How to Answer Insurance Questions After An Accident
  1. Be honest and stick to facts.
  2. Do not volunteer information when not asked.
  3. Do not agree to provide a recorded statement.
  4. Do not comment on your injuries. ...
  5. Write down the adjuster's name and information to make sure you have it if you need it later.
Apr 25, 2022

What is the most asked question about life insurance? ›

One of the most common life insurance questions is “how much life insurance do I need?” The answer involves many factors. For instance, ask yourself how much your loved ones will need financially to maintain their current lifestyles.

What is surrender value after 5 years? ›

Special Surrender Value

If in case, the insurance holder has paid premiums for more than 4 years and less than 5 years, then 90% of the complete maturity sum is provided. If the policyholder is paying premiums for more than 5 years, then he/she receives 100% of the sum assured (maturity amount).

How much is cash surrender value? ›

Your cash surrender value is the amount of cash you've built, minus any surrender charges or fees. Those charges diminish with time, so the longer you've had your account, the closer the cash surrender value will be to the cash value. In most cases, your policy's cash surrender value will be paid in a lump sum.

What is surrender value after 3 years? ›

If you surrender after 3 years, the surrender value will be around 30% of the premiums paid till date. However, this is excluding the premium paid in the first year and the premiums paid towards accidental benefit riders. So, the later the policy is surrendered, the higher will be the LIC surrender value.

Can you cash out a 20 year term life insurance policy? ›

Term life is designed to cover you for a specified period (say 10, 15 or 20 years) and then end. Because the number of years it covers are limited, it generally costs less than whole life policies. But term life policies typically don't build cash value. So, you can't cash out term life insurance.

At what age should you cancel term life insurance? ›

Expenses until retirement age: Your life insurance policy should ideally last until you no longer have any major financial obligations. For many people, this financial independence occurs at the age of retirement, when their children are out of college and their mortgage is paid off.

Can I withdraw from my life policy? ›

You can usually withdraw part of the cash value in a permanent life policy without canceling the coverage. Instead, your life insurance beneficiaries will receive a reduced payout when you die. Typically you won't owe income tax on withdrawals up to the amount of the premiums you've paid into the policy.

Can I withdraw my life insurance money before maturity? ›

In case of life insurance , if you surrender a policy before the completion of its full term, you could get back a portion of the money you paid as premium, after deducting charges. This money is surrender value.

How can I close my SBI life insurance policy before maturity? ›

How to Surrender Your SBI Life Insurance Policy?
  1. Visit your nearest SBI Life Insurance Branch.
  2. Look for the Policy Surrender Form.
  3. Duly fill the form along with the documents listed.

How long does it take to cash out life insurance policy? ›

Payments (minus the fees) from withdraws or loans on a life insurance policy generally are made within 14–60 days from the time the request is received.

What 3 questions should one ask when deciding on life insurance? ›

9 questions to ask about life insurance when shopping around
  • How much coverage do I need? ...
  • What type of life insurance should I buy? ...
  • How long will I need the policy? ...
  • How long do I want to pay premiums? ...
  • Will I need flexibility for my premiums? ...
  • Will I need cash value? ...
  • Who is protecting my family?
Mar 24, 2022

How many life insurance policies actually pay out? ›

99% of all term policies never pay out a claim. This is due to most people letting their policies lapse. If you buy a $250,000, 20-year term policy, and inflation is about 4% a year, your policy will lose 56% of its value over the next 20 years.

Should I answer insurance questions? ›

Anything you say to the other driver's car insurance company can serve as a basis for refusing to pay you anything, or reducing the value of your claim. Only answer the question asked. Do not volunteer additional information or agree to have your statement recorded, whether it's over the phone or in writing.

Should I be honest on life insurance questions? ›

Despite a fear of a higher premium, the best course of action is to truthfully answer life insurance application questions to avoid policy denial or cancellation during the contestability period.

What are 3 factors of life insurance? ›

The premium rate for a life insurance policy is based on two underlying concepts: mortality and interest. A third variable is the expense factor which is the amount the company adds to the cost of the policy to cover operating costs of selling insurance, investing the premiums, and paying claims.

Do you get money back when you surrender a life insurance policy? ›

If you cancel your life insurance policy, the insurance company will send you a check for your policy's cash value. The cash value is the money you have paid into the policy minus any fees or charges. In most cases, you will receive this money within 30 days of canceling your policy.

Who pays surrender value? ›

Cash surrender value is money an insurance company pays to a policyholder or an annuity contract owner if their policy is voluntarily terminated before maturity or an insured event occurs.

Is life insurance taxable? ›

Answer: Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received.

What is the cash value of a $100000 life insurance policy? ›

The cash value of your settlement will depend on all the other factors mentioned above. A typical life settlement is worth around 20% of your policy value, but can range from 10-25%. So for a 100,000 dollar policy, you would be looking at anywhere from 10,000 to 25,000 dollars.

What is the cash value on a $25000 life insurance policy? ›

Example of Cash Value Life Insurance

Consider a policy with a $25,000 death benefit. The policy has no outstanding loans or prior cash withdrawals and an accumulated cash value of $5,000. Upon the death of the policyholder, the insurance company pays the full death benefit of $25,000.

How do I find out the cash value of my life insurance policy? ›

The value of the policy typically refers to the death benefit. The death benefit is the amount that is paid out to your beneficiary when you die. The easiest way to determine the value is to contact the company that issued it. They should be able to tell you immediately what the value of your policy is.

When can the cash surrender value be paid out? ›

The insurance company will pay you the cash surrender value when you cancel your policy. This amount may be taxable, so you will need to consult with a tax advisor to determine how much of it is taxable. In most cases, the insurance company will also refund your premiums.

Can surrender value be higher than cash value? ›

Cash value, or account value, is equal to the sum of money that builds inside a cash-value–generating annuity or permanent life insurance policy. Surrender value is the amount you'll receive if you try to withdraw all of your cash value, and it may be less than cash value if surrender fees are charged.

What is surrender value calculator? ›

How is Cash Surrender Value Calculated? Calculating the surrender value of your insurance plan is quite simple. All you need to do is add the total premiums paid and subtract the charges levied by your insurer for surrendering the plan mid-term.

What life insurance has no cash value? ›

Term life insurance policies have no cash surrender value. This means that if you decide to give up your coverage to the insurer, you won't receive anything in return. However, it's also why term life insurance is several times less expensive than cash value life insurance.

How to use life insurance to build wealth? ›

How can policyholders build wealth through life insurance? Permanent life insurance plans enable policyholders to accumulate cash value in addition to the death benefit. They can use these funds to pay their premiums, take out a loan at a lower rate than banks offer, and supplement their retirement income.

What happens when you outlive your term life insurance? ›

Your coverage ends if you outlive your term life policy. Before it expires, you can choose to convert your policy to permanent insurance, buy a new policy, or go without coverage.

Is life insurance worth it after 60? ›

If you retire and don't have issues paying bills or making ends meet, you may not need life insurance. If you retire with debt or have children or a spouse that is dependent on you, keeping life insurance is a good idea. Life insurance can also be maintained during retirement to help pay estate taxes.

Is life insurance worth it after 50? ›

If you buy life insurance in your 50s, it does cost significantly more — there's no way around it. If you no longer have financial dependents and have enough savings to cover debts or final expenses, a term life insurance policy might be an unnecessary expense.

Can a 65 year old get term life insurance? ›

Term or permanent life insurance may still be an option into your 60s and beyond, although you may need to take a medical exam as part of the buying process. If you're older or have health issues, there are still options available that don't require a medical exam. Learn more about your options here.

How much does a $1 million dollar whole life insurance policy cost? ›

The cost of a $1 million life insurance policy for a 10-year term is $32.05 per month on average. If you prefer a 20-year plan, you'll pay an average monthly premium of $46.65.

Can I sell my life insurance policy for cash? ›

If your policy has built up a cash value, you can withdraw money or take a loan on the policy. If it has a cash surrender value, you can stop the policy and get the money built up in the cash value. However, there may be charges for surrendering early.

When can you cash into life insurance? ›

Generally, you can cash out life insurance if you have a policy that has accumulated cash value. This can be a permanent life insurance policy or a convertible term life policy. But the idea is the same: There has to be some cash value in the policy for you to be able to withdraw it.

What is the maturity amount of SBI life insurance? ›

The policyholders will get guaranteed benefits at maturity of 100/115% of the full premium paid on the basis of policy term.

Is SBI life insurance Safe? ›

Yes, SBI Life Insurance is Safe. The SBI Life Insurance Company provides the best life insurance policy at reasonable premiums. The Company offers life insurance cover and an excellent claim settlement ratio to secure your family and it will help to protect your loved ones even after death.

Can I withdraw SBI life insurance? ›

SBI life insurance policy can be withdrawn by the policyholder at any point time after the policy start date. But if the policy is to be withdrawn within the free look period, it can be done without any premium deduction by the insurance company.

What are 10 things you absolutely need to know about life insurance? ›

10 Things You Should Know Before Purchasing Life Insurance
  • Review Your Insurance Needs. ...
  • Decide How Much Coverage You Need. ...
  • Assess Your Current Life Insurance Policy. ...
  • Compare The Different Kinds of Insurance Policies. ...
  • Be Sure You Can Afford the Premium Payments.

What questions are asked for no exam life insurance? ›

There is no exam and there are no questions to answer, with age generally being the only restriction. These policies offer very limited coverage (typically about $25,000) and will cost much more than traditional life insurance.

What is the most important thing in life insurance? ›

Financial Security

The primary importance of a life insurance policy is that it provides your family with long-term financial security. Life insurance policies provide a lump sum money to financially support your family in the case of your early demise.

What are the 5 principles of life insurance? ›

Principles of Insurance
  • Insurable Interest.
  • Utmost good faith.
  • proximate cause.
  • Indemnity.
  • Subrogation.
  • Contribution.

What are the five 5 things to know before getting insurance? ›

The first 5 things you need to consider are:
  • Assess your insurance needs. ...
  • Compare insurance policies. ...
  • Choose a cover that you can afford. ...
  • Evaluate the future of your insurance policy. ...
  • Check the claim settlement history of the insurance company.

What do they test for when getting life insurance? ›

The life insurance medical exam records your height, weight, and blood pressure. It uses blood and urine tests to screen for any health conditions, such as high blood pressure or high cholesterol. It also tests for drug use and nicotine and cotinine to determine if you should receive smoker rates.

What all is tested for life insurance? ›

The life insurance medical exam tests for various factors, including drug use and general health. Your insurer pays for the medical exam, which includes questions concerning your health, lifestyle, family medical history, and other factors that might affect your eligibility for life insurance.

Can I get life insurance with no exam? ›

The good news is there are two types of life insurance policies available without a medical exam or waiting period. A no-exam life insurance policy, like a simplified issue or guaranteed issue, may be just the option for you and your family.

What are the 3 most important insurance? ›

Most experts agree that life, health, long-term disability, and auto insurance are the four types of insurance you must have.

What are the 5 benefits of insurance? ›

Benefits of Insurance Coverage
  • Provides Protection.
  • Provides Certainty.
  • Risk Sharing.
  • Value of Risk.
  • Capital Generation.
  • Economic Growth.
  • Saving Habits.
Nov 9, 2022

What are the 4 living benefits of life insurance? ›

4 Some common types of living benefit riders for term life insurance include:
  • Terminal illness rider. ...
  • Critical illness rider. ...
  • Chronic illness rider. ...
  • Return of premium rider. ...
  • Disability waiver of premium.

What disqualifies life insurance payout? ›

If you intentionally lie on your life insurance application, are murdered by your beneficiary, or die doing something that is excluded by your policy, your life insurance beneficiary will not receive any money.

What three questions should you ask yourself before buying life insurance? ›

10 Important Questions to Ask Yourself Before Buying Life...
  • Why do I Need Life Insurance? ...
  • Who or What do I Want to Protect? ...
  • How Much Coverage is enough? ...
  • How Much Premium Can I Afford? ...
  • Do I Need Coverage to Last My Lifetime or a Specific Period of Time? ...
  • Do I only Need a Death Benefit?

Can an unhealthy person get life insurance? ›

Pre-existing conditions can make it more difficult and expensive to get life insurance, but even if you have a chronic or terminal health problem, you can likely find a policy you qualify for if you shop around.


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