SUMMER TRAINING REPORT

ON

AN INTRODUCTION ABOUT INSURANCE

SECTOR WITH SPECIAL REFERENCE TO HDFC

STANDARD LIFE INSURANCE COMPANY

LIMITED

(Housing Development & Finance Corporation)

AT

PATIALA

Submitted in partial fulfillment of the requirement for the degree of

Masters of Business Administration

(Session 2006-08)

Submitted to:-

The Department of Management

RIMT (Institute of Engineering & Technology)

Mandi Gobindgarh

Submitted By:

Rajnish Kaushal.

MBA- II SEM.

ROLL NO. 6944

THE DEPARTMENT OF

MANAGEMENT

RIMT (Institute of Engineering &Technology)

Mandi Gobindgarh.

C O N T E N T S

1) Preface

2) Certificate

3) Acknowledgement

4) Introduction

Definition

Need for Life Insurance

Role of Govt.

Role of Life Insurance

Evaluation of Insurance Industries in India

Future Scenario

5) Opening of Insurance sector in India

6) Changing expectation of customer

7) Major player

HDFC standard life insurance

Life Insurance Corporation

ICICI Prudent

Om Kotak Mahindra

Birla Plus Sun Life

8) Comparison of the unit linked plan of various

companies

9) Research Methodology

Objective and limitation

10) Data Analysis and findings

11) Conclusion

Finding

Suggestion

12) Appendices

Query

Bibliography

A C K N O W L E D G E M E N T

I deem it as my personal duty to thank all those who proved indispensable

in the completion of my project. I express my gratitude to Dr.Harpreet

Singh(H.O.D) RIMT Institute of Engineering & Technology, Mandi Gobindgarh

for his constant guidance, encouragement and inspiration given throughout the

course of study.

I would also like to thank Mr. Tejpreet Singh Asstt. Sales Manager, Patiala

who allow me to undergo training at HDFC Standard Live Insurance Patiala.

Least but not last I would like to thank all the Staff members who helped

me in completing the project.

Rajnish Kaushal.

I N S U R A N C E

Insurance is basically risk management device. The losses to assets resulting form

natural calamities like fire, flood, earthquake, accident etc. are met out of the

common pool contributed by large number of persons who are exposed to similar

risks. This contribution of many is used to pay the losses suffered by unfortunate

few. However the basic principle is that losses should occur as a result of natural

calamities or unexpected events which are beyond the human control. Secondly

insured person should not make any gains out of insurance.

It is natural to think of insurance of physical assets such as motor car insurance or

fire insurance but often be forget that creator all these assets is the human being

whose effort have gone along way in building upto assets. In that scene human

life is a unique income generating assets. Unlike physical assets which decreases

with the passage of time. The individual become more experience and mature as

he advances in age. This raises his earnings capacity and the purposes of life

insurance is to protect the income to individual and provide financial security to

his family which is dependent of his income in the event of his pre mature death.

The individual also himself also himself also needs financial security for the old

age or on his becoming permanently disabled when his income will stop.

Insurance also has an element of saving in certain cases.

Insurance is rupees 400 billion business in India and yet its spread In the country

is relatively thin. Insurance as a concept has not being able to make headway in

India. Presently LIC enjoys a monopoly in Life Insurance business while GIC

enjoys it in general insurance business. There has been very little option before

the customer to decide the insurer. A successful passage of the IRA bill have clear

the way of private sector operators in collaboration with their overseas partner. It

is likely to bring in a more professional and focuses approach. More over the

foreign players would bring sophisticated actuarial techniques with them which

would facilitate the insurer to effectively priced the product. It is very important

that the trained marketing professionals who are able to communicate specific

features of the policy should shall sell the policy. In the next millennium all the

activities would play a crucial role in the overall development and maturity of the

insurance industry.

Definition General Definition:-

In the words of D S Hansell, “ Insurance may be defined as a social device

providing financial compensation for the effects of misfortune, the paying being

made from the accumulated contributions of all participating in the scheme.”

Contractual Definition:-

In the words of justice Tindall “insurance is a contract in which a sum of money is

paid to the assured as consideration of insure’ incurring the risk of paying a large

sum upon a given contingency.

Characteristics of Insurance

Sharing of risk

Co-operative device

Evaluation of risk

Payment on happening of special event

The amount of payment depends on the nature of losses incurred

Need of the Life Insurance:-

The original basic intention of life insurance is to provide for one’ family and

perhaps others in the event of death. Originally, polices were to provide for short

periods of time, covering temporary risk situations, such as sea voyages. As life

insurance became more established. It was realized what a useful tool it was in a

number of situations, including:

1. Temporary needs threats:

The original purpose of Life Insurance remains an important element,

namely providing for replacement of income on death etc.

2. Regular saving:

Providing one’s family and oneself, as a medium to long term exercise

(through a series of regular payment of premiums). This has been become more

relevant in recent times as people seek financial independence from their family.

3. Investment:

Put simply, the building up of saving while safeguarding it from ravages of

inflation. Unlike regular saving products are traditionally lump is investments,

where the individual makes are one time payment.

4. Retirement:

Provision for one’s on later years has become increasingly necessary.

Especially in charging culture abs social environment, one can buy a suitable

insurance policy which will provide periodical payments on one’s old age.

BENEFITS:

1. It is superior to traditional saving machine

As well as providing a secure vehicle to build up saving etc. it provides

pieced of mind to the policy holder. In the event ultimately death, of say, the main

earner in the family, the policy will pay out guaranteed sum assured, which is

likely to be significantly more then the total premiums paid. With more

traditional, saving vehicles such as fixed deposits, the only return would be the

amount invested plus any interested accrued.

2. It encourages saving and forces thrift:

Once an insurance contract has been entered into, the insured has an

obligation to continue paying premiums, until the end of the term of policy,

otherwise the policy will lapse. In other words, it becomes compulsory for the

insure to save regularly and spend wisely. In contrast saving held in a deposit

account can be accessed or stop easily.

3. It provides easy settlement and protection against creditors

Once a person appointed for receiving the benefits or a transfer of rights is

made (assignments), a claim under the life insurance contracts can be settled

easily. In addition, creditors have no right to any momies by the insurer, where the

policy is written under trust. Under the married woman’s act the money available

from the policy forms a kind of trust which creditors can not claim on.

4. It can be enchased and facilities borrowing.

Sum contracts may allow the policy can be surrendered for a cash amount,

if policy holder is not in a position to pay the premium. A loan, against certain

policy, can be taken for a temporary period to tide over the difficulty. Presence of

life insurance policy facilitates credit for personal or commercial loans as it can be

offered as collateral security.

5. Tax relief:

The policy holder obtains income tax rebates by paying the insurance

premium. The specified from of saving which enjoys a tax rebate u/s 88 of the

income tax act. Include Life Insurance premiums and contribution to a recognized

PF etc.

Govt. Role:

Govt. keen to reduce the dependency on the state via private pension

provisions. They have a choice between using compulsion and incentives. Most of

the govt. chooses the later method. Tax relief is guaranteed in the pension plants

and is extremely generous, reflecting the value that the govt. and the society and

large place on the provision of retirement benefits. Tax treatments of the benefit

caries by country and by benefits.

In India, the proceeds of gratuity and provident fund are tax free in the

hand of the members. In UK a certain amount of the proceeds can be taken as tax

lump sum and reminder as taxable income. Benefits due on with drawl from

scheme or approved pension plan.

Role of Life Insurance

Role1: Life Insurance as ‘investment’ insurance is an attractive option for

investment. While most people recognize the tax hedging and tax saving potential

of life insurance, many are not aware of its advantage as an investment option as

well as, insurance products yields more compared to regular investment option as

this is besides the added incentives (read bonuses) offered by insurers.

You can not compare an insurance product with other investment schemes

for simple reason that it offers financial protection form risks. Something that is

the missing in non insurance products.

Infect, the premiums you pay for an investment against risk. Thus, before

comparing with other scheme, you must accept that a part of total amount invested

insurance life insurance goes towards providing for the risk cover, while the rest is

used for savings.

Insurance life Insurance, unlike non-products, you get maturity benefits on

survival at the end of the term. In other words, if you take a life insurance policy

for 20 years and survive the term the amount investor as premium insurance the

policy will come back to you with family of the deceased will receive the sum

assured.

Now, let us compare insurance as an investment options. If you invest Rs.

10000/- insurance PPF, year money grows to Rs. 10950 at 9.5% interest over a

year. But insurance this case, the access to your funds will be limited one can

withdraw 50% of the initial deposit only after four years.

The same amount of Rs. 10000/- can give an insurance cover of up to

approx. Rs. 5 to 12 lacs. (depending upon the plan, age and medical condition of

life insure etc.) and this amount can become immediately available to the nominee

of the policy holder on death. Thus insurance is a unique investment avenue that

delivers sound returns insurance addition to protection.

Role 2: Life Insurance as “Risk Cover”

First and foremost, insurance is about risk cover and protection – financial

protection, to be more presize – to help out last unpredictable losses. Designed to

safe guard against losses suffered on account of an unforeseen events. Insurance

provide you with that uniqueness scene of security that no other form of

investment provides. By buying life insurance, you buy peace of mind and are

prepared to face any financial demand that would hit the family incase of an

untimely demise.

To provide such protection, insurance firms collect contributions for many

people who face the same risk. A loss claim is paid out of the total premium

collected by the insurance companies, who act as trustees to the monies.

Insurance also provides a safeguard insurance the case of accident or a

drop insurance income after retirement. As accident or disability can be

devastating and an insurance policy can lend timely support to the family

insurance such time. It also comes as a great help when you retire, insurance case

untoward incident happens during the term insurance the policy.

With the entry of private sector player insurance insurance, you have a

wide range of products and service to choose from. Further, many of these can be

further customizes to fit individual/group specific needs considering the amount

you have to pay now, its worth buying some extra sleep.

ROLS 3: LIFE Insurance as “Tax planning.’’

Insurance serves as an excellent tax saving mechanism too. The Govt. of

India have offered tax incentives to life insurance products insurance order to

facilitate the flow of funds into productive assets, U/S 88 OF Income Tax Act

1961, an individual is entitled to rebate 20% On the annual premium payable on

his/her life and life of his/her children or adult children. The rebate is reducible

from tax payable by an individual or Hindu undivided family. This rebate is can

be availed up to a maximum of Rs 12000/- on payment of yearly premium of Rs

6000/- a year, you can buy anything upward of Rs 100000/- in sum assured. This

means that you get Rs 12000/- tax benefit. This rebate is deductible from the tax

payable by an individual or a Hindu undivided family.

THE EVALUATION OF INSURANCE INDUSTRY IN INDIA:

Life insurance in its modern form is a western concept. The Indian

insurance industry is as old as it is insurance other part of the world. Although life

insurance business has been taking shape for the last 300years, it came to India

with the arrival of Europeans. First Life Insurance Company was established

insurance 1818 as Oriental Insurance, mainly to provide for widows of Europeans.

The companies that follow mainly catered to Europeans and charged extra

premium on Indian Lives. The first insurance company insuring Indian Lives at

standard rates was BOMBAY MUTUAL LIFE INSURANCE COMPANY which

was formed insurance 1870. This was also the year when Ist insurance act was

passed by the British Parliament.; the years subsequent to the Swadeshi movement

saw the emergence of several insurance companies. At the end of the year 1995

there were 245 insurance companies AII the insurance companies were

nationalized insurance 1965 and brought under one umbrella. LIFE INSURANCE

CORPORATION OF INDIA (LIC) which enjoyed a monopoly of the life

insurance business until near the end of 2000. By enacting the IRDA act 1999. the

Govt of India effectively ended Lick’s monopoly and opened the door for private

insurance companies Collaboration of Indian Companies with Foreign

Companies.

FUTURE SCENARIO:-

Before looking insurance future prospectus of the insurance industry, we

must take a look into its past history. The independent India started with private

sector insurance companies. These companies were nationalized by the Union

Govt. in 1965 to form a monopoly known as Life Insurance Corporation of India

has being under public sector for over four decades till the govt. opened the

insurance sector for private companies in 2000.

When the insurance Industry was nationalized, it was consider a land mark

and a milestone on the way to the socialistic pattern of society that India had

chosen after independence. Nationalization has lent the industry solidity and

growth which is unparalleled. Forever, along with these achievements there also

grew a feelings of

Indian Company Foreign Partner

Kotak Mahindra Chubb

Tata Group AIG

Sundram Finance Winterthur

Spic Metlife

ILFC Cigna

Alpic Finance Allianz

20th Century Canada Life

Vysa Bank ING

Cholamandlam Axa

SBI Alliance Capital

HDFC Standard Life

ICICI Prudential

Hindustan Times Commercial Union

IDBI Principal

Max India New York Life

Insensitivity to the needs of the market, traditions insurance adoption of modern

practices to upgrades technical skills coupled with a scene of lethargy which

probable led to a feeling amongst that the insurance industry was not fully

responsive to customers needs.

The life insurance corporation of India has not succeeded in extending the

insurance cover to all the needy people of the country due to various reasons. LIC

could not insure very fast growth of insurance in India even in a long period

extending over four decades. Hence the penetration of insurance is very low

insurance India. The following indicates as explained and support this contention:

1. While per capita insurance premium in developed country is high, it is

quite low insurance India. For instance, per capital insurance premium

insurance India insurance 1999 was only $8 while it was $4800 for

Japan and $1000 for Republic of Korea, $887 for Singapore, $823 for

Hong-Kong and $144 for Malaysia.

2. Similarly the penetration of insurance is also assessed by the ratio of

insurance premium to gross domestic products in a country. While

insurance premiums as a percentage of GDP was 14% in Japan 13% for

South-Africa, 12% for Korea, 9% for UK and France. It was only

around 2% insurance India insurance 1999. Hence the 34th penetration

of insurance is low here.

3. the penetration of insurance is also assessed by a ratio of insurance

premium to gross domestic savings (GDS). While insurance premium

as a percentage of GDS was 52% for UK, 35% for other European and

American countries, it was only 9% insurance Indian Insurance 1999.

hence even this index indicates low level of penetration of insurance

insurance India.

4. the share of India insurance the world market insurance terms of gross

insurance premium is again very small for instance while Japan 31%,

European union 25%, South Africa 2.3%, Canada 1.7% share of global

insurance premium to is only 0.3% for India.

OPENING OF INSURNACE SECTOR INSURANCE INDIA

The Union Govt. of India decided to open the insurance sector to make it

more dynamic and customer friendly.

Objective of Liberalization of Insurance:-

The main objective for the opening up the insurance sector to the private insures

as under:-

To provide better coverage to the India citizens.

To augment the flow of long term financial resources to finance the

growth of infrastructure.

Insurance Industry in the year 2000-2001 had 16 new entrants, namely:

Life Insurers:

S. No. Registration Number

Date of Reg. Name of the Company

1 101 23-10-2000 HDFC Standard Life Insurance Company Ltd.

2 104 15-11-2000 Max New York Life Insurance Co. Ltd.

3 105 24-11-2000 ICICI Prudential Life Insurance Co. Ltd.

4 107 10-01-2001 Kotak Mahindra Old Mutual Life Insurance Ltd.

5 109 31.01.2001 Birla Sun Life Insurance Co. Ltd.

6 110 12.02.2001 Tata AIG Life Insuance Co. Ltd.

7 111 30-03-2001 SBI Life Insurance Co. Ltd.

8 114 02-08-2001 ING Vysya Life Insurance Co. Pvt. Ltd.

9 116 03-08-2001 Bajaj Allianz Life Insurance Co. Ltd.

10 117 06-08-2001 Metlife India Insurance Co. Pvt. Ltd.

General Insurers:

S. No.

Registration Number Date of Reg. Name of the Company

1 102 23-10-2000 Royal Sundaram Alliance Insurance Co. Ltd.

2 103 23-10-2000 Reliance General Insurance Co. Ltd.

3 106 04-12-2000 IFFCO Tokio General Insurance Co. Ltd.

4 108 22-01-2001 TATA AIG General Insurance Co. Ltd.

5 113 02-05-2001 Bajaj Allianz General Insurance Co. Ltd.

6 115 03-08-2001 ICICI Lombard General Insurance Co. Ltd.

Yr: 2001-2002 (From 1st Jan 2001 to Dec. 2002)

Insurance Industry in this year, so far has 5 new entrants’ namely

S. No.

Registration Number Date of Reg. Name of the Company

1 121 03-01-2002 AMP Sanmar Life Insurance Co. Ltd.

2 122 14-05-2002 Aviva Life Insurance Co. Pvt. Ltd.

General Insurers:

S. No.

Registration Number Date of Reg. Name of the Company

1 123 15-07-2002 Cholamandalam General Insurance Co. Ltd.

2 124 27-08-2002 Export Credit Guarantee Corporation Ltd.

3 125 27-08-2002 HDFC-Chubb General Insurance Co. Ltd.

Yr: 200-2004 (From 1st Jan. 2003 till date)

Insurance Industry in this year, so far has 1 new entrants: namely

Life Insurers:

S. No.

Registration Number Date of Reg. Name of the Company

1 127 06-02-2004 Sahara India Insurance Co. Ltd.

Yr: 2004-2005

Insurance Industry in this year, so far has 1 new entrants; namely

Life Insurers:

S. No.

Registration Number Date of Reg. Name of the Company

1 128 17-11-2005 Shriram Life Insurance Co. Ltd.

CHANGING CUSTOMER EXPECTATIONS IN INSURANCE SECTOR PRE

TO POST LIBERALIZATION

Research Objective & Methodology

Objective:- To provide insights into customer experience prior to recent

liberalization, mapping changes in expectations after liberalization and perceived

performance of insurance players vis expectations.

Research Approach:- In depth qualitative study to capture indicative trends which

can be statistically validated, if required.

Geographical Coverage: Delhi, Mumbai, Kolkata, Hyderabad & Bangalore.

RESEARCH DESIGN

RESPONDENT SEGMENTS

Life Policy Holders

Old Customer: Taken insurance prior to liberalization only

Evolved customer: Taken insurance both insurance pre and post

liberalization

New Customer: Taken insurance in post liberalization only

Non Life Policy Holders

Motor Vehicle Insurance

Health Insurance

Property Insurance

Personal Accident Insurance

Non Policy Holders (Life)

RESEARCH DESIGN

SAMPLING PLAN

RESPONDENT CATEGORY SEC A SEC B SEC C TOTALLIFE POLICY 48 41 37 126NON-LIFE POLICY 43 21 16 80NON POLICY (LIFE) 14 15 16 45TOTAL 105 77 69 251

RESPONDENT CATEGORY Old Customer

Evolved Customer

New Customer

TOTAL

LIFE POLICY 47 40 39 126The Insurance company faces financial challenge when it is not prepared for

disaster management readiness for catastrophe claims and for lack of systematic

approach insurance claims settlement strategies with cash flow.

PRE PURCHASE PROCESS: LIFE

Pre Liberalization Post LiberalizationMotivating Factor(s) for considering insurance

Security 43% Savings 14% Tax Rebate 43%

Security 50% Savings 34% Tax Rebate 16%

Children’s education. Daughter’s marriage retirement plan.

Sources of information on insurance & product awareness Friends, Colleagues, Relatives

and Agent Low awareness of several

insurance products due to poor communication is spite of availability

Additionally form direct mailers, consumer meets internet & media (mass media & outdoor)

Rising level of aeareness of new products of both LIC and private companies

Choice of first policy Money Back 60% Endowment 40%

Money Back 42% Endowment 48%

Whole Life 0% Whole Life 10%This change insurance product-mix reflects maturing of the insurance customer

Approach of the Agent and Consumer’s Experience Approach of Agent-informal and

through referral Long term family type of

relationship Often selling insurance as

commodity Average communication skills

Approach more professional, some times aggressive (insurance one or two private company agents.

Proactive insurance constacting prospectus directly, often has to start form selling concept of insurance rather than product.

Conducts financial health check up and then offers suitable products/solutions

Better communicator & presenter

Handles larger number of queries

Awareness & Consideration of private playersPrivate companies

Overall SECA SEC B SEC C

Awareness 73% 93% 30% 50%Consideration 35% 65% 30% 10%SECB & C prospect not influenced much by direct contact of agent and generally takes decision only after consulting informed family member or friend.

AWARENESS OF NEW PRODUCTS-LIFE

Only some customers have mentioned new products such as

Products with multiply riders medical accident, waiver of premium rider

Though most SEC A & some SEC B customers have generally heard

liberalization but unable to provide any details.

Flexi premium plans-product with singly premium and shout time premium

option.

PURCHASE PROCESSL : LIFE

Pre Liberalization Post LiberalizationRole of Agent and customer’s Experience

Medical Examination: In several cases details filled by agent medical examination very perfunctory

Purchase experience with agent

Medical Examination: Both LIC and private company customers examination, arranged by agent

Experience more satisfactory, agent maintains regular contact

reasonably satisfactory, but often agent not insurance touch later.

post Purchase phase also

Product Offering Limited Products choices and

less flexible products Choice often determined by

Agent push

Product with multiple riders-medical, accident, waiver of premium rider

Pension / retirement benefit plans flexi premium, saving & security plans

Discount Offering Practices No. of customers getting

discount: 50% Fate of discount:25%-50% of

first year premium

Customers getting discount:33% (Highest insurance Delhi)

Rate of discount: more less same

Policy Deliver Mode-Registered post for LIC, Hand delivered by agent insurance 23% case Time taken Up to 1 week 0% One Month 65% > 1 month 35%

Mode-Registered for LIC-courier for private companies

In both cases policy comes in attractive, Protective plastic jacket

Time taken LIC Private Co. Up to 1 week 5% 85%Upto one month 77% 15%

> 1 month 18% 0%CLAIMS SETTLEMENT EXPERIENCE-LIFE (LIC ONLY SO FAR) FINAL

MATURITY CLAIM

Involvement of agent very low (35%)

Payment mostly within 15 days, but 1 to 3 month insurance some situation

such as change of survivors address etc.

Most customer are satisfied with the overall process.

DEATH CLAIM

Involvement of agent low though considered critical by nominee

Payment takes 3 to 6 month cases, in dispute cases 9 to 12 months.

Process very cumbersome and people faced many difficult

CHANGING CUSTOMER EXPECTATIONS-LIFE TIME EXPECTATIONS

First premium receipt (FPR) delivery to customer insurance 2 days.

Policy document should be delivered within 7 days from FPR

Premium notice should arrive 30 days before due date

Final maturity payment should reach within 10 days of maturity date

Death claim should be settled insurance 30 days.

EXPECTATIONS FROM AGENT

Should Give Information On All Products & Not Push High Commission

Products Only.

Should maintain regular contact with client to give information on new

products/services

Premium payment reminder should come form agent also (besides form

company)

Should college premium payment, deposit and handover receipt (from his

existing customer who desire this service)

Should be actively involved insurance Death Claims settlement and Lapses

Policy Revival.

CHANGING CUSTOMER EXPECTATIONS-LIFE EXPECTATIONS

FROM COMPANY

Premium notice should be sent regularly

Premium payment at banks, internet and special collection centers (Om

Kotak Insurance Mumbai), Payment through Credit Card

Payment through Credit Card

Most SECA & some SEC b would consider payment through credit

card expect customers insurance Delhi who wanted to keep this as last

option.

Company should bear service charge on credit card transaction

Most SEC B & all SEC C not inclined to pay through credit card,

prefer to pay through SEC B & some SEC C were ready for credit card

payment system

Facility of purchasing policy through more channels.

Flexible/wider range of products.

CHANGING CUSTOMER EXPECTATION-LIFE EXPECTATION FROM

COMPANY (CONTD.)

Focus on Consumer Education

Fine Prints/Devil Insurance Detail , Correct Disclosures

Information about systems/processes, particularly handling of

complaints & grievances

Transparent and fair dealings

Information on new product/services through call centers, internet,

mailers and consumer meets. Set up Toll Free Help Line,

Where customer is compelled to change agent due to poor service, new

agent through’ whom premium is deposited be entitled to the

commission thereafter.

ROLE OF IRDA

Educate public on regulatory safeguards, investment guidelines and plough

back of profits (several people had expressed concern about security of

their money, credibility of private insurance company’s investment of

funds insurance foreign markets and repatriation of profits to foreign

countries)

Inform public on Social and Rural Obligations of private players (several

people believed that only LIC was responsible for insuring the poor).

POST PURCHASE PROCESS : LIFE

Pre Liberalization Post LiberalizationPremium Notice Intimation form Company/Reminder from Agent

Notice form company 42% Reminder form Agent 47%

Reminder form Agent 67% Notice form company 77%

Model of premium Payment Cash 43% Cheque 57%

Cash 41% Cheque* 49% Credit Card 10% No case of payment through

internet was observed, due to low awareness and security apprehensions.

# Include deposits at private

company collection centersWho Deposits Premium ? Self* 44% Agent 49% Salary Saving scheme 7% Includes relatives & friends

Self* 37% Agent 49% Salary Saving Scheme 14% Includes relatives & friends

Correspondence (other than premium notice form Company/Agent Generally no correspondence

form either company or agent expect for late premium payment reminder from company

Agent maintained informal contact with close customers

Mailers form both private companies & LIC on product & services, greeting cards on birthdays, anniversary and New Year

Phone calls form private company call centers

Agent insurance regular contact for offering. New products

Delay Insurance Premium Payment Incidence of delay high 30%

(due to irregular receipt of premium notice form company/reminder form agent)

Incidence of delay low 15% (more regular receipt of premium notice form company /reminder form agent)

CHANGING TRENDS INSURANCE SAVINGS PATTERN

Pre Liberalization Post LiberalizationSaving instrument % of respondents Saving instrument % of respondentsInsurance 23Bank Deposit 28PPF 19NSC 12Shares 7Post Office 7Bonds 0Gold 4

Insurance 33Bank Deposit 44PPF 8NSC 0Shares 3Post Office 3Bonds 9Gold 0

Total 100 Total 100* when the respondents were asked where they would invest their extra income, if

any, the top responses were recorded as above.

COMPANY PROFILE

HOUSING DEVELOPMENT FINANCE CORPORTION LTD. (HDFC)

Founded in 1977, HDFC is today the market leader insurance housing finance

insurance India and has extended financial assistance to more than 15 lacs homes.

HDFC has more than 110 offices insurance. Dubai abd 3 nire services associate

insurance Kuwait, Qatar and Sultanate of OMAN. HDFC’s assets base amount to

over 15,000 crores. Its financial strength is reflected in highest safety rating of

“FAAA’ and “MAAA” awarded by CRISIL and ICRA – two of India’s leading

credit rating agency respectively, for the last 6 year consecutively, it has a

depositor base of over 11 lacs customer and a deposit agents force of over 46,000

of the total deposit, 73 are sourced from individual and trust depositors, which

demonstrates the tremendous confidence that retail investors have insurance the

company.

HDFC – Promoted companies have emerged to meet the investors

and customers needs. HDFC bank for commercial banking, HDFC mutual Fund

for mutual fund products, to be allowed very shortly by HDFC Standard Life

Insurance Company for the Life endurance and pension products.

Being an institution that is strongly committed to the highest

standards of quality and excellence, HDFC has won several accolades in the past

few years. One such award is the “Ramakrishna Bajaj National Quality Award”

for the year 1999. this award was instituted to award recognition to Indian

companies for business excellence and quality achievement. HDFC is the only

company so far to receive this award in the service category.

STANDARD LIFE ASSURANCE COMPANY (SLAC):

Founded insurance 1952, Standard Life has been at the for frontry of

the UK insurance industry for 176 years b combining sound financial judgement

with inter gritty and reliability. The Kingdom, Ireland, Spain, Germany and some

more with representative office insurance Hong-Kong and China.

One of the most recent success was the launch of Standard Life Bank on 1st

January 1998. Insurance less than 20 months, the bank collected Rs. 28,000 crore

insurance deposit. The introduction of its innovative mortgage product insuance

Jan. 1999. had an immediate impact on the UK market, accounting for 11% of all

new lending within the first operational tear. The current loans outstanding

amount to Rs. 43,300 crore.

Standard Life has total assets of Rs. 55,000 crore and new premium income last

year 33,000 crore, its UK investment portfolio account for approximately 2% of

all shares listed insurance the London Stock Exchange. Its one of the new

Insurance companies in the World to receive AAA rating form two of the leading

international credit rating agencies. Moody’s and Standard’s And poor’s. The

latter described Standard Life’s ability to meet its claim obligations as

overwhelming under a variety of economic conditions.

Not surprisingly, Standard Life is rated as one of the few strongest companies

insurance the world. Insurance financial terms. The quality and value standard

Life brings to this venture are immense. The company’s reputation insurance UK

market remains unrivalled. Besides, being voted company of the ears of overall

service, for the third consecutive year. Standard Life was recently voted

‘Company of the decade’ by independent brokers.

THE PARTNERSHIPS:-

HDFC and Standard Life commenced discussions about possible joint venture, to

enter the life insurance market, in Jan. 1995. It was clear from the outset that both

companies shared similar values and beliefs and a strong relationship quichly

formed. Insurance Oct. 1995 the companies signed a 3 year joint venture

agreement.

Around this time standard life purchased a 5% stake in HDFC, Further

strengthening the relationship.

A small project term was set up insurance UK and India and set about preparatory

work. Among other things, the team conducted market research, looked at

possible information technology, documented high. Level business process maps

and set about preparing the first project plan.

The next three years were filled uncertainty, due to change

insurance Govt. and booth ongoing delays insurance getting the insurance bill

passed insurance parliament. Despite this both companies remained firmly

committed to venture.

Insurance Oct. 1998, the joint venture agreement was renewed and

additional resources made available. Around this time Standard Life purchased

2% infrastructure Development Finance Company Ltd. (IDFC) standard life also

started to use the services of the HDFC Treasury department to advise them upon

their investments insurance India.

One of the many success stories over the last few years, has been the

actuarial student program. The program was designed to identify high caliber

individuals who would be sponsored by Standard Life to study for their mutual

qualification in the UK

The new company has 1 Indian actuary and 5 actuarial students in

the team, with a further 2 students undergoing training in the UK. Both parents

companies strongly believe the program will benefit the new company insurance

the years to come and are firmly committed to it. Towards the end of 1999. the

opening of the market looked very promising and both companies agreed the time

was right to move the operation to the next level. Therefore, insurance Jan. 2000

and expect team form the UK joined a hand picked team form HDFC to form the

core project based insurance Mumbai.

Around this time Standard Life purchased a further 5% stake in

HDFC and a 5% stake insurance HDFC bank.

Insurance further development standard life to participate insurance

the Assets Management Company promoted by HDFC to enter the mutual fund

market.

The mutual fund market was launched on 20 th July 2000 and one on

on the 10th Nov. 2000 assets under the management reached Rs. 1063 crores.

The company was incorporated on 14th Aug. 2000 under the name of

HDFC Standard Life Insurance Company Limited.

The ambition of the company form as for back as Oct. 1995 was to

be first private company to reenter the life insurance market insurance India. On

23rd of Oct. 2000, this ambition was realized when HDFC standard Life Insurance

Company Limited were only Life company to be grated a certificate of

registration.

HDFC are main shareholders insurance HDFC standard Life

Insurance Company Limited with 81.4% while standard Life own 18.6 given

Standard Life’s existing investment in the HDFC Group. This is max. investment

allowed under current regulations.

MISSION AND VALUES OF HDFC STANDARD LIFE:-

MISSION:-

HDFC Standard Life have clearly on several occasions that they aim

to be the top new life insurance company in the market.

This does not just mean being the largest or the moist proactive company

insurance the market, rather it is a combination of several things.

Professionalism

Value of money

Customer services

Innovative Product

Use of Technology

Market Share

As mentioned earlier the aim is to be yardstick against which all other life

insurance companies and measured.

VISION

“The Most successful and admired life insurance company, which means that we

are the most trusted company, the easiest to deal with, offer the best value for

money, and set the standards in the industry. In short, “The most obvious choice

for all”.

VALUES

Team Work

Customer Centric

People Care

Innovation

Integrity

Joy and Simplicity

Product

UNIT LINKED YOUNG STAR PLAN

The HDFC Standard Life Unit Linked You:

o An outstanding investment opportunity in a wide range of investment funds

backed by HDFC, leading fund manager.

o Valuable protection in case of the insured parent’s unfortunate demise.

o Valuable protection in case of the insured parent’s unfortunate demise.

o Very flexible benefit combinations and payment options.

o Very flexible benefit combinations and payment options.

o Flexible additional benefit options such as critical illness cover.

Sum Assured you had chosen* plus the fund built up by your and HDFC standard

Life contributions. **

4 easy steps to your own plan

Step1_ choose the premium wish to invest

Step2_ Choose the amount of protection (Sum Assured) You desire.

Step3_Choose the additional benefit options you desire.

Step4_Choose the investment found or funds you desire.

Step 1: Choose your regular Premium

This is the premium you will continue to pay each year of the policy. The

minimum regular premium is Rs. 10000 per year. You can pay quarterly, half

quarterly or annually. You may also choose to pay additional single premiums.

(See additional single premiums).

Step 2: Choose your level or protection

You can choose any amount of Sum Assured with:

A minimum of 5 times you chosen regular premium.

A maximum of 20 times you chosen regular premium.

You can reduce but not increase the sum assured any time during policy term.

Step 3: Choose Additional to the maturity benefit, you can choose from these

benefit options.

o Life Option-Death Benefit

o Life & Health Option – Death Benefit + Critical illness benefit

Step 4: Choose your investment Funds

Choosing your investment options is important. We have 5 funds that give you.

The potential for higher but more variable returns over the term of you

policy; or

More stable returns will lower long term potential.

Your investment will buy units insurance any of 5 funds designed to meet you risk

approach. All units insurance a particular fund are identical. You can choose form all or

any of the following 5 funds.

Fund Details Asset ClassBank Deposit & Money Market

Govt. Securities & Bonds

Equity Risk & Return Rating

Fund Composition Liquid Fund Extremely low capital risk very

stable returns100% -- -- Low

Secure Fund More capital stability than equity funds

-- 100% -- Low

Defensive Fund

* Access to better long term returns through equities* Significant bond exposure keeps risk down

-- 70% tp 85%

15% to 30%

Moderate

Balance Managed Fund

* Increased equity exposure gives better long term return* Bond exposure provides some stability

-- 40 % to 70%

30% to 60%

High

Growth Fund * For those who wish to maximize their returns* 100% investment insurance high Indian equities

-- -- 100% Very high

Flexible products for your children’s needs

We know your life will change as you children grow. We have designed the plan

to meet your children’s needs now and insurance the future. You can use these

features to improve the investment returns.

Flexible Options BenefitsPremium Payments (i) You can pay your regular premium upto 15 days after the

due date to fit in with you r cash flow.Additional Single Premium

(ii) You can, very cost effectively invest any extra money you might have to enhance the long term return and provide the little extras you child deserves(iii) The minimum additional single premium amount is only Rs. 5000

Premium Changes (iv) You can increase or reduce Stop or restart your regular premium at any time.(v) All changes will take place format the next premium due date. (vi) Life cover will continue as long as the policy is insurance force. Charges for life cover and any other risk cover you have chosen will continue to be charged.

Changing your investment decisions

You can change your investment fund choices insurance two ways.* Switching: You can move your accumulate funds form one fund to another anytime.* Premium Redirection: You can pay your future premiums into a different selection of funds, as per your need.

EligibilityThe age and term limits for taking out Unit Linked Young Star Plan are as shown below. Benefit Options

Term Period (Yrs.) Entry Age (Yrs.) Maximum age at expiry (yrs.)

Minimum Maximum Minimum MaximumLife Option 10 25 18 60 75Life and health option

10 25 18 55 65

Accessing your money

a) On maturity

Your policy matures at the end of the policy term you have chosen and your death

and other risk covers ceases. You may redeem your balance units at the then

prevailing unit price and take the fund value with you.

However, you also have the option to take your fund in periodical installments

over the period which may extend to 5 years. This is called the “Settlement

Option”

Your money will remain invested in the funds chosen by you. During such period,

we will continue to deduct charges other than the risk benefit charges such as the

mortality charge.

At the end of this 5 year period, we will redeem the balance units at the then

prevailing unit price and pay the fund value to you.

Your policy will terminate the moment the balance of your units in all the funds

reaches zero.

b) On Death

In case of your unfortunate demise during the policy term, we will:

Pay the sum assured you had chosen to your child

Continue your policy and continue to pay the original regular premiums

you had chosen

Any critical illness cover terminates immediately

c) On Critical Illness

In case you are diagnosed with any of the critical illnesses covered before the end

of policy term, we will

Pay the sum assured you had chosen to your child

Continue your policy and continue to pay the original regular premiums

you had chosen

The Death Benefit cover terminates immediately

d) On surrender or Partial withdrawal

In the first three years

Insurance plans are long term investments with significant tax advantages. Neither

the IRDA now we view them as short term plans.

Therefore, for the first three years of your plan, you may not surrender the plan or

withdraw any portion of your funds from it.

If you stop your regular premium commitment before three years have passed,

your life cover will cease and funds will be held in suspense after deduction of

surrender charges. These funds will be paid out to you only at the end of the third

year or the end of the revival period of 2 years, whichever is later.

From the fourth year onwards

You can choose to surrender the policy at any time and the surrender value will be

the value of the units in the fund. We will enforce surrender only if you have

stopped paying regular premiums and your fund value is less than your original

annual regular premium amount.

You can make lump sum partial withdrawals from your funds at any time within

the policy term chosen provided.

The minimum withdrawal amount is Rs. 10000.

After the withdrawal, the funds does not fall below the sum of top-up

premiums paid in the preceding three years, ignoring all top-up premiums

paid in the three years before the maturity date.

BENEFICIARIES

The beneficiary (your child) is the sole person to receive the benefit under the

policy. Where the beneficiary is less than 18 years of age, the benefit will be paid

to the Appointee.

LOYALTY UNITS

At the end of every policy year we will increase the number of units in each of

your funds by 0.10% as long as your policy is in force or paid up.

The compounding effect of these regular addition is expected to boost your final

maturity value.

CHARGES

The charges under this policy are deducted to provide for the cost of benefits and

the administration provided by us. Our charges, when taken together are

structured to give you better returns and value for money over the long term.

PREMIUM ALLOCATION CHARGE

This is a premium based charge. After deducting this charge from your premiums, the

remainder is invested to buy units. The tables given below will help show how

percentage of your premium is used to buy units. This percentage is called the Allocation

Rate. the allocation rates are guaranteed for the entire duration of the policy term.

Premium Paid During Year (Rs.) Allocation Rate1st year 2nd year onwards

Regular Premiums

Upto 199999 40% 99%From 200000 to 499999 60% 99%From 500000 to 999999 70% 99%From 1000000 to 1999999 80% 99%From 2000000 and above 90% 99%

Single Premium Top-Up(s) 97.50% 99%

FUND MANAGEMENT CHARGE (FMC)

In the long term, the key to building great maturity values is a low FMC. The

daily unit price already includes our low fund management charge of only 0.80%

per annum of the fund’s value.

SURRENDER CHARGE

This is the charge we will apply when the policy is surrendered. It is equal to 60%

of the difference between the regular premiums expected and received in the first

year of the contract.

OTHER CHARGES

The following is the set of other charges that we will take from your policy.

Charges ExplanationPolicy Administration Charge

A charge of Rs. 20 per month is charged to cover regular administration costs. We take the charge by canceling units proportionately from each of the funds you have chosen.

Mortality and other Risk Benefit Charges*

Every month we make a charge for providing you with the death or critical illness cover (which includes the SA plus a value of the future premiums payable) in your policy. The amount of the charge taken each month depends on your age. We take the charge by canceling units proportionately from each of the funds you have chosen.

Switching Charge 24 switching will be given free in a policy year and any additional switch will be charged Rs. 100 per switch

Partial Withdrawal charge

6 partial withdrawal requests will be free in a policy year and any additional partial withdrawal request will be charged Rs. 250 per request

Revival Charge A charge of Rs. 250 is charged for revival to cover for administrative expenses

Miscellaneous Charge This is a charge levied for any alterations within the contract like premium redirection or adhoc policy servicing. 12 premiums redirection request will be free in a policy year and any additional premium redirection request will be charged Rs. 250 per request. 6 policy servicing requests will be free in a policy year and any additional policy servicing request will be charged Rs. 250 per request.

LIFE INSURANCE CORPORATION

PROFILE

OBJECTIVES:-

Spread Life Insurance much more widely and in particular to the rural

areas and to the socially and economically backward classes with a view to

reaching all insurable persons in the country and providing them adequate

financial cover against death at responsible cost.

Maximum mobilization of people’s savings by making insurance linked

savings adequately attractive.

Bear in mind, in the investment of funds. The primary obligation to its

policy holders, whose money it holds insurance trust, without losing sight of the

interest of the community as whole, keeping insurance view national priorities and

obligation of attractive return.

Conduct business with almost and with the full realization that the money belongs

to the policy holders.

Act as trustees of the insured public insurance their individual and

collective capacities.

Involve all people working insurance their individual and collective

capacities. Involve all people working insurance the corporation to the best of

their capability insurance furthering the interest of the insured public by providing

efficient service with courtesy.

Promote amongst all agents and employees of the corporation a sense of

participation, pride and job satisfaction through discharge of their duties with

dedication towards achievement of corporate objective.

VISION:-

“A Tran-nationally competitive

financial conglomerate of

significance to Society &

ride of India”.

MISSION:-

“Explore and enhance the quality of life

of people through financial security by

providing products and services of

as pried attributes with competitive

returns, and by rendering resources

for economic development”.

Products:

FUTURE PLUS

LIC’S Future Plus (T. No. 172) is a unit Linked Pension Plan bundled with lots of

options with insurance built flexibility.

o Future Plus, a deferred pension plan is available with or without life cover,

o It can be taken as a single premium policy or under regular premium

payment mode i.e. yearly or half-yearly.

o The plan comes with a host of riders like accident benefit rider, critical

illness rider etc. which are to be opted at the time of taking the policy.

o On vesting, the customer gets a pension on accumulated bid value of the

units allotted under the plan. Option is available to commute up to one-

third of the fund under the units at the time of vesting.

o The policy can be surrendered at no loss on the bid value of the units after

two years of policy existence and a small charge up to a maximum of 4%

of levied if surrendered within two years.

o The vantage pints of the plan are the Auto cover on the plan (keeps the

policy insurance force even if premiums are not paid subject to certain

conditions). The facility for top-ups (additional premium can be paid to

invest insurance the funds with no upper limit) and of course to opt for

early pension (40 years onwards).

o On death of the customer during the deferment period, basic Sum Assured

plus th bid value of the units become payable by LIC provided life cover

option is exercised. Else, the bid value of the units become payable to the

nominee. The nominee can also opt for a pension insurance lieu of lump

sum death claim amount.

o Persons insurance the age band of 18-65 years are eligible to take Future

Plus.

o The minimum and maximum vesting age offered is 40-75 years. The

minimum policy term is five years.

o The minimum premium payable under single premium mode is Rs. 10000

and Rs. 5000 per annum under regular premium mode.

o Future Plus comes with options to invest in any of the four types of funds,

based on the customer’s choice and risk taking ability.

o Bond fund and income fund are available for risk averse customers where

major portion of the fund is invested insurance Govt. securities and other

secured bond/income funds. Growth fund is available for risk loving

customers. Especially for those who aspire for rewarding returns as major

portion of the found would be invested insurance equity markets. Balanced

fund is also available to customer who wish to strike a balance between the

above two.

o The plan is priced at competitive charges on administrative and fund

management fronts with nil bid-offer spread. The plan extends the

Insurance come tax benefits u/s 80 CCC (i).

The allocated premiums will be applied to purchase units as per the Fund type.

Chosen. The policyholder’s Unit account will be subject to deduction of charges

as specified insurance the Policy Conditions. The value of the unit insurance the

Unit Fund may increase or decrease, depending on the investment return of the

assets representing the chosen fund.

1. Premiums: Regular premium can be paid either insurance yearly of half-yearly

installments. The minimum annual premium will be Rs. 5000/- increasing

thereafter insurance multiples of Rs. 1000.

Alternatively, a single premium can be paid subject to a minimum of Rs. 1000 and

thereafter insurance multiples of Rs. 1000.

2. Benefits:

A) Death Benefit:

Insurance case of death of the policy holder within the policy term, when the life

cover is opted for and is in force, the nominee will get the sum Assured under the

Basic Plan together with the Bid Value of units held insurance the Policy Holder’s

Unit Account either as a lump sum or as pension on his/her life-the actual amount

of the pension will depend on the then prevailing immediate annuity rates under

the annuity option chosen.

The limits on life cover i.e. the Sum Assured under the Basic Plan are as under:-

For Single Premium Policies: Equal to the Single Premium

For Regular Premium Policies:

5 to 20 (integer) times of the annualized

premium as per the option exercised by the

propose. However, the maximum life cover

shall not exceed the annualized premium

multiplied by the term subject to a minimum

life. Cover of 5 times the annualized premium.

In case the policy is taken without risk cover, then the Bid value of the units held

insurance the Policyholder’s Unit Account shall be payable either as a lump sum

or as a pension on his/her life, which will be based on the than prevailing

immediate annuity the relevant annuity option. If the policy is insurance lapsed

condition, than also the Bid Value of the units held in the policyholders unit

account shall become payable to the nominee, either as a lump sum or as a

pension on his/her life which will be based on the than prevailing immediate

annuity rates under the relevant option.

B) Benefit on vesting:

On the policy holder surviving to the date of vesting, the Bid Value of the units

held insurance the policyholders unit account will compulsorily be utilized to

provide a pension based on the tern prevailing immediate annuity rates under the

relevant annuity option. However, the Policyholder may opt to commute upto one

third of the Bid option. However, the Policyholder’s Unit Account at the time of

vesting of the annuity, which shall be period as a lump sum. Insurance case

communication is opted for, the amount of annuity/pension available will be

reduced proportionately. There will also be an option to purchase pension form

any other insurance company subject to Regulatory provisions.

3. Options:

A) Accident Benefit Option:

Accident Benefit can be availed as on optional Rider benefit by paying an

additional premium of Rs. 0.50 p for every Rs. 1000/- of the Accident Benefit

Sum Assured per policy year by cancellation of appropriate number of units

out of the Policyholder’s Unit Account every month. On Accidental death of

the Policyholder’s during the term of the policy, a sum equal to the Accident

Benefit cover is opted for and is insurance force. The Accident Benefit rider

option will not be available insurance case Basic Sum Assured under the Basic

Plan, subject to an overall limit of Rs. 25 lakh under all policies of the

Policyholder with the Corporation taken together.

B) Critical Illness Benefit Rider:

An amount equal to the critical Illness Rider Sum Assured will be payable in

case of diagnosis of defined categories of Critical Illness subject to certain

terms and conditions, provided the Critical Illness Benefit cover is opted for an

is insurance force. The maximum cover to this rider will be Rs. 5 Lakh under

all policies of the Policyholders with the Corporation taken together. The

Critical Illness Rider Sum Assured shall also not exceed the Sum Assured

under the Basic Plan. So, the critical Illness rider option will not be available

in case Sum Assured under the Basic Plan is zero.

4. ELIGIBILIGY CONDITONS AND OTHERS RESTRICTIONS:

For the Basic Plan:

(a) Minimum Age at entry - 18 years completed

(b) Maximum Age at entry - 65 years (age nearer birthday)

(c) Minimum Age at vesting - 40 years (age last birthday)

(d) Maximum vesting Age - 75 years (age last birthday)

(e) Minimum Policy Term - 5 years for both Single Premium and

Regular Premium policies (with and

without Risk Cover)

(f) Minimum Premium - Rs. 10000 for Single Premium

Rs. 5000 p.a. for Regular Premium

(g) Sum Assured under the Basic Plan (where Life Cover is opted for)-

Single Premium - Equal to the Single Premium

Regular Premium - 5 to 20 9integer) times of the annualized

Premium as per the option exercised by

the proposed However, the maximum

life cover shall not exceed the

annualized premium multiplied by the

term subject to a minimum life cover of

5 times the annualized premium.

Critical Illness Benefit Rider Option:

(a) Minimum Age at entry - 18 years completed

(b) Maximum Age at entry - 50 years (age nearer birthday)

(c) Maximum Maturity Age - 60 years (age nearer birthday)

(d) Minimum Sum Assured - Rs. 50000 provided the Sum Assured

under the Basic Plan is more than or

equal to Rs. 50000

(e) Maximum Sum Assured under Critical

Illness Benefit Rider Option - The maximum Critical Illness Rider

Sum Assured shall be of Rs. 500.000

taking, critical illness riders under all

policies of the Policyholder with the

Corporation and the Critical Illness

Benefit option under the new proposal

into consideration.

Accident Benefit Rider Option :

(a) Minimum Age at entry - 18 years completed

(b) Maximum Age at entry - 65 years (Age nearer birthday)

(c) Maximum Maturity age - 70 years (age nearer birthday)

(d) Minimum Sum Assured - Rs. 25000 provided Sum Assured under

the Basic Plan is Rs. 25000 or more.

(e) Maximum Sum Assured -

under Accident Benefit Option – The Maximum Accident Benefit Sum Assured

shall be of Rs. 2500000 taking Accident

Benefit under all policies of the Policyholder

with the Corporation and the Accident Benefit

Sum Assured under the new proposal into

consideration.

5. Investment of Funds:

The premiums allocated toi purchase units will be strictly invested according to the

investment pattern committed insurance various fund types. Various types of fund

and their investment pattern will be as under:

Fund Type

(i) Bond Fund

(ii) Income Fund

(iii) Balance Fund

(iv) Growth Fund

Investment insurance Govt./Govt. Guaranteed Securities

Not less than 0%

Not less than 70%

Not less than 60%

Not less than 30%

Short term investment such as money market instruments (including Govt. Securities)100%

Not more than 90%

Not more than 80%

Not more than 50%

Investment insurance Listed Equity Share.

Nil

Not more than 20%

Not more than 3%

Not more than 60%The Policyholder has the option to choose any One of the above 4 funds.

Insurance case no fund has been opted from the allocated premiums shall, by

default, be invested insurance the INCOME FUND.

6. Method of Calculation of Unit price:

Units will be allotted based on the Net Asset Value (NAV) of the respective fund

as on the date of purchase of units. There is no Bid-Offer spread (the Bid price

and Offer price of units will both the equal to the NAV). The NAV will be

computed based on investment performance under each fund type and shall be

calculated as under:

Market/Fair value of the chosen fund’s underlying assets plus Current

Assets, accrued income (net of Fund Management charge and other outgo)

Less Current Liability and Provisions

Net Asset Value =

Number of Units existing insurance the fund at the valuation date

7. Charges under the Plan:

I) Allocation Rate: The allocation applicable to the premium to determine the part

of premium utilized to purchase units in the Policy holder’s Unit Account will

depend on whether the policy is a Single Premium or Regular Premium contract

and on the premium size as under:

Single Premium:

Premium Band Allocation Rate*10000 to 19000 0.960020000 to 49000 0.970050000 to 99000 0.9775100000 to 499000 0.9815500000 and above 0.9835* Under Single Premium Policies an amount equal to (1-the allocation rate) times the

Single Premium will also be deducted at the First Policy anniversary by canceling an

appropriate number of units form the Policyholder’s Unit Account.

Premium Band Allocation RateFirst Year & 2nd Year Thereafter

5000 to 9000 0.8700 0.975010000 to 19000 0.8950 0.975020000 to 49000 0.9075 0.975050000 to 99000 0.9150 0.9750100000 to 499000 0.9175 0.9750500000 and above 0.9200 0.9750

Allocation Rate for Top-up (Additional premium) 0.9875

II) Other Charges: the following charges shall be deducted by canceling

appropriate number of units out of the Policyholder’s Unit account:

i) Life cover and Critical Illness Benefit rider charge_ Charges for live cover and

critical Illness Benefit will be taken every month by canceling appropriate number

of units out of the Policyholder’s Unit Account as per the rate prevalent at the

time of policy issue or as amended by LIC form time to time based on actual

experience.

ii) Accident Benefit Charge: Rs. 0.50 per thousand Accident Benefit Sum Assured

per policy year by canceling appropriate number of units out of the policyholder’s

Unit account.

iii) Administrative charge:- If live cover is opted form then there will be an

Administrative charge of Rs. 1% of sum Assured under the Basic Plan Subject to

a maximum of Rs. 1000 insurance each of the first 2 years.

iv) Policy Charge: Rs. 0.10%.0 Sum Assured under the Basic Plan,. Where risk

cover is opted form insurance each of the first 2 years, insurance case no life

cover is opted for, the Policy charge insurance each of the first 2 years will be

equal to Rs. 0.10%0 ot the total premiums payable throughout the policy term.

v) Service Tax Charge:

This charge shall be levied on the life cover.

Accident Benefit and Critical Illness Benefit charged, if any, and shall be taken by

canceling appropriate number of units on a monthly basis as and when the

corresponding life cover, Critical Illness and Accident Benefit charges are

deducted. The level of this charge will be as per the rate of Service Tax premium

if any as applicable form time to time.

vi) Flat Fee Rs. 15/- per month will be charged throughout the term of the policy

by canceling appropriate number of units out of the Policyholder’s Unit Account.

III) Fund Management Charge: Fund dependent deductible on the date of

computation of NAV:

1.00% p.a. of Unit Fund for “Bond” Fund

1.00% p.a. of Unit Fund for “Income” Fund

1.25% p.a. of Unit Fund for “Balanced” Fund

1.50% p.a. of Unit Fund for “Growth” Fund

IV) Bid/Offers Spread-Nil

V) Right to reserves the right to service all or any of the above charges, including

the right to charges the manner insurance, which charges are to be recovered, the

Corporation may also introduce new charges, as and when such a need may arise.

The modification insurance charges will be done with prospective effect with the

prior approval of IRDA after giving the policyholders a notice of 3 months. In

case a policyholder does not agree with the modified charges, he/she shall be

allowed to withdraw the Bid Value of the Units held insurance his/her Unit

Account without any surrender charge, if any.

Although the charges are review able. They will be subject to the following

maximum limits:

- Flat fee will be subject to a maximum of Rs. 50 per month

- Administrative charge shall not exceed Rs. 2%0 Sum Assured under the

Basic Plan, if any, subject to a maximum of Rs. 2000 insurance each of the first 2

years.

- Policy charge will be fixed depending on the amount prescribed by the

Indian Stamp Act, 1989

- Fund Management Charge: The maximum for each Fund will be as

follows:

i) Bond Fund : 2.0% p.a. of Unit Fund

ii) Income Fund: 2.0% p.a. of Unit Fund

iii) Balanced Fund : 2.5% p.a. of Unit Fund

iv) Growth Fund : 3.0% p.a. of Unit Fund

8. Surrender Charge:

The Surrender charge will be under:

i) Single Premium

Duration since date of commencement Surrender Charge

Less than 1 Year : 4% of Bid value of the units held

1 year or more but less than 2 years 2% of Bid value of the units held

2 years or more : Nil

ii) Regular Premium

Number of years premiums have been paid Surrender Charge

If one full year’s premium or less are paid 60% of Bid Value of the Units

held

If more than one full year’s but less 40% of Bid Value of the

Than 2 full years premium are paid units held

If 2 or more full years premiums are paid:

Tax Implication on Surrender

Currently, as per the Sub-section of 80 CCC of the Income Tax Act, 1961 any

amount taken on account of surrender under the above plan shall be chargeable to

tax as income in the year of surrender.

Partial Surrender: No partial surrender of units will be allowed under this plan.

9. Other Features:

i) Auto-cover: if the policyholder has opted for risk cover, then charges for the

same shall be taken by canceling an appropriate number of units out of the

Policyholder’s Unit have not been paid as and when due under the policy.

During the period of Auto-cover any/all unpaid premiums that have fallen due

may be paid at anytime without interest.

For regular premiums policies, when 3 ore more year’s premiums have been paid,

the Auto-cover facility will compulsorily be available throughout the term of the

policy.

However, for Regular premium policies where less than 3 year’s premiums have

been paid, the Auto-cover facility will compulsorily be available only for a period

of 6 months from the due date of the First Unpaid premium. Thereafter, the risk

cover will cease i.e. the policy will lapse. In such cases, the Policyholder shall

have the option of reviving the policy within period of 5 years from the due date

of the First Unpaid Premium, by paying all unpaid premiums without interest and

on submission of proof of continued insurability to the satisfaction of the

Corporation.

Notwithstanding what is stated above, the balance in the Policyholder’s Unit

Account, at all times, should be sufficient to cover the relevant charges. However,

for all Regular Premium Policies where at least 3 years premiums have been paid,

the policyholder’s Unit Account, at all times, shall be subject to a minimum

balance of one year’s annualized premium in the Policyholder’s Unit Account. In

case the Policyholder’s Unit Account falls below this limit, the policy shall

compulsorily be terminated and the balance amount in the Policyholder’s Unit

Account will be refunded to the Policyholder.

ii) Top-up (Additional Premium): The policyholder can pay additional premium in

multiples of Rs. 1000 without any limit at anytime during the term of the policy.

In case of yearly or half-yearly mode of premium payment such Top-up can be

paid only if all premiums have been paid under the policy.

iii) Switching: The policyholder can switch between any funds types during the

policy term within a given policy year 4 switches will be allowed free of charge.

Subsequent switch in that policy year shall be subject to a switching charge of Rs.

100 per switch.

iv) Increase/decrease of benefits: No increase (Except to the extent of Top-up

stated above) of benefits will be allowed under the plan. The Policyholder can,

however, decrease the risk cover once in a year during the Policy term, subject to

the respective minimum limits, provided all due premiums under the policy have

been paid.

v) Conversion to annuity at Vesting Date: The rate at which the amount at vesting

date will be converted to an annuity is not guaranteed and will be based on the

prevailing immediate annuity rates under the relevant annuity option at the vesting

date.

vi) Minimum Guaranteed Growth Rate: For the “Bond” fund, the allocated

premiums, net of all charges and deductions, will have a guaranteed minimum

growth rate of 3% p.a. compounding yearly, provided the minimum policy term is

10 years and the policy is held till the vesting date without any switching to any

other fund in between. The guarantee shall not apply to any Top-up premiums

paid under the policy. There will be no guarantee under other funds.

vii) Paid-up Value: If premiums are payable either yearly or half-yearly and the

same have not been duly paid under the Policy, the Policy shall become paid-up.

10. Revival or reinstatement:

In case of lapsed policy, the Policyholder shall have the option of reviving the

policy at any time during the premium paying term but within a period of 5 years

from the due date of the First Unpaid Premium, by paying all unpaid premium

without interest and on submission of proof of continued insurability to the

satisfaction of the Corporation.

11. Risk borne by the Policyholder:

The Value of the units and hence the Benefit relating to the policyholder’s unit

account is subject to market and other risk and there can be no assurance that the

objectives of any of the above funds will be achieved. Further, the value of units

within each Fund can go up or down depending on different factors affecting the

capital markets and may also be affected by changes in the general level of

interest rates and other economic factors. All benefits under the policy are also

subject to the Tax Laws and other Financial enactments as they exit from time to

time.

12. Cooling off period:

If policyholder is not satisfied with the “Terms and Condition” of the policy, he /

she may return the policy to us within 15 days from the date of receipt of the

Policy Bond.

13. Loan:

No loan will be available under this plan.

14. Assignment:

No assignment will be allowed under this plan.

15 Exclusion:

No risk claim will be paid in case the Policyholder commits suicide (whether sane

or insane at the time) at any time on or after the date on which the risk under the

policy has commenced but before the expiry of one year from the date of

commencement of risk under this policy and the Corporation will not entertain

any claim by virtue of this policy except to the extend of the Bid value of the

Policyholder’s Unit Account on the date of death, subject to deduction of the

charge for premature surrender as mentioned under Section 8 above.

16. Dating Back:

No dating back of the Policy will be allowed under this plan.

Benefit Illustration:

Statutory warning

“Some benefits are guaranteed and some benefits are variable with returns based

on the future performance of your life insurance company. If your policy offers

guaranteed returns then these will be clearly market “guaranteed” in the

illustration table on this page. If your policy offers variable returns then the

illustrations on this page will show two different rates of assumed investment

returns. These assumed rates of return are not guaranteed and they are not upper

or lower limits of what you might get back as the value of your policy is dependent

on a number of factors including future investment performance.”

i) This illustration is applicable to a non-smoker male/female standard (from

medical, life style and occupation point of view) life.

ii) The non-guaranteed benefits (1) and (2) in above illustration are calculate so

that they are consistent with the Projected Investment Rate of Return assumption

of 6% p.a. (Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in

preparing this benefit illustration, it is assumed that the Projected Investment

Rate of Return that LIC1 will be able to earn throughout the term of the policy

will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of

Return is not guaranteed.

iii) The main objective of the Illustration is that the client is able to appreciate of

the product and the flow of benefits in different circumstances with some level of

quantification.

iv) The maturity sum shown in the Illustration is to be annuities. However, the

policyholder can opt to take up to one-third of the maturity sum as a tax-free lump

sum.

SECTION 41 OF INSURANCE ACT 1938

(1) No person shall allow or offer to allow, either directly or indirectly, as an

inducement to any person to take out or renew or continue an insurance insurance

respect of any kind of risk relating to lives or property insurance India, any rebate

of the whole or part of the commission payable or any rebate of the premium

shown on the policy nor shall any person taking out or renewing a policy accept

any rebate except such rebates as may be allowed insurance accordance with the

published prospectuses or tables of the insurer provided that acceptance by an

insurance agent of commission insurance connection with a policy of life

insurance taken out by himself on his own life shall not be deemed to be

acceptance of a rebate of premium within the meaning of this sub-section if at the

time of such acceptance the insurance agent satisfied the prescribed. Conditions

establishing that he is a bona fide insurance agent employed by the insurer.

(2) Any person making default insurance compiling with the provision of this

section shall be punishable with a fine, which may extend to 500 rupees.

I N T R O D U C T I O N

ICICI Prudential Life Insurance Corporation Ltd. was incorporated on 20-

07-2002. this company is a joint venture of ICICI (74%) and Prudential plc UK

(26%)

The company was granted certificate of registration for carrying out life Insurance

Registory and Development authority on Nov. 24.2000. it commenced

commercial operations on Dec. 19.2000, Becoming one of one of the few private

sector players to enter the liberalized arena.

DETAILS OF ICICI:-

This is Indian participate company of this insurance Co. ICICI Ltd. was

established in 1955 by world bank, the govt. of India and the Indian Industry, to

promote industrial development of India by providing project and corporate

finance to Indian Industry.

Since inception, ICICI has grown from a development bank to a financial

conglomerate and has become one of the largest public financial institutions in

India. ICICI has thus far financed all the major sectors of the economy, covering

6848 companies and 16851 projects.

DETAILS OF PRUDENTIAL PLC:-

Prudential Plc was founded in 1848 . since then it has grown to become one of the

largest providers of a wide range of saving products for the individuals including

life insurance, pensions, annuities m unit trust and personal banking. It has

presence in 15 countries, an caters to the financial needs of over 10 millions

customers.

Prudential is the largest life insurance company in the United Kingdom. Asia has

always been an region for prudential and it has had a presence in Asia for 75

years. In fact prudential first Overseas operation was in India, way back in 1923 to

establish Life and General Branch agencies.

1. Save ‘n’ Project

2. Cash Bank

3. Smart Kid

4. ICICI PRU Life Guard

5. Life Time Pension

ICICI Pru Life Time (ICICI PRU Life)

Suitability

o This policy is a long term market linked total protection plan. The plans offer

projections for life at the same time allows the policyholder to get market

linked returns. It is a single product combining the benefits of both an

investment product and insurance plan. This apart, the product offers a lot of

flexibility.

Salient Features

Death benefit will be a multiple of premium paid.

Premium paid will be invested in the fund chosen ( Maximiser, Balancer or

Protector fund ) after deducting mortality charges and administrative

expenses.

Policy holder has the option to vary the amount of insurance projection vis-

à-vis investment while maintaining the same premium.

The returns depend on the plan chosen- growth. Balanced and income and

one can switch from one fund to another depending on the financial

priorities. Once in a year switching is done free of cost.

Benefits can be enhanced by adding Accident & Disability Benefit. Major

Surgical Assistance, Critical Illness benefits at a nominal extra premium.

Entry into the plan will be based on the Unit Value applicable on the date of

policy issue. The amount of premium towards to wards death benefit

decreases with the increase in the value of the units.

One has the flexibility to increase the death benefit by 25% subject to a

maximum of Rs. 100.00 every third year opto 3 times. Without any

underwriting. Death benefit can be increased beyond this limit with

underwriting.

Apart from the above the policy holder can increase the death benefit at

different state of life such as Marriage, birth of first child and birth of second

child. This is irrespective of when the last increase was done.

One can decrease the death benefit in the multiple of Rs. 100.00. However a

minimum death benefit of Rs. 100.00 has to be maintained.

Policy holder has the option to increase the investment by the way of top

ups with a lump sum payment at any time.

If after at least 3 years premium payments are made and then one is unable to

pay the subsequent premiums towards the life cover under the policy will

continue and the premiums towards the life cover and riders will be debited

from the unit fund.

Unit value is calculated bi-weekly on a forward pricing basis every Tuesday

and Friday Unit Value=

Market/Fair Value of the relevant Plan’s Investments plus Current Assets

less Current Liabilities and Provisions

------------------------------------

Number of units outstanding under the relevant Plan

* The returns depend on the plan chose.

Maximiser (Growth) Plan

If high growth is your priority this is the plan for you. You can long-term

capital appreciation from a portfolio that is invested primarily in equity and

equity-related securities.

Protector (Income) Plan

If on the other hand your priority is steady returns, you can opt for the

Income Plan. Here you can accumulate a steady income at a low risk

across a medium to long term period.

Balancer (Balanced) Plan

If you prefer a balance of growth and steady returns choose our Balanced

Plan. This would ensure that your portfolio is invested in equity and equity

linked securities as well as in fixed income securities.

Benefits

On Death

In the event of death of the policyholder, beneficiaries will be paid the

higher of death benefit and value of the units.

On Survival

There is no maturity period and policy holder has the option to withdraw

units under the plan at anytime after the policy has been in force for three

years.

Riders

Accident & disability benefit

10% of SA each year for 10 years in case of permanent total disability

Additional SA, if death is due to an accident while traveling as a passenger

in train or bus.

Critical Illness Benefit

9 medical conditions are covered. On admission of a claim, sum assured

under the rider is paid and the rider comes to and end. Claim under this

rider is not admissible during first six months of the policy.

43 surgical procedures are covered

1. Major Surgical Procedure – 50% of SA

2. Intermediate Surgical Procedure – 30% of SA

3. Minor Surgical Procedure – 2% SA

Claims can be made for more than one surgical procedure, subject to a

maximum of 50% of SA, claim under this rider is not allowed during first 6

months of the policy.

Other Conditions

Minimum age at entry : 0 year

Maximum age at entry: 60 years (completed years)

Minimum premium: Rs. 18000 per annum

Minimum sum assured under riders: Rs. 100000

Maximum sum assured under riders : Rs. 1000000

Following are the charges applicable under the policy:

The initial administrative charges in the 1st year would be 20% of the

premium, for premium amounts less than Rs. 50000/- for premiums equal

to or more than Rs. 50000/- it is 18% of the premium.

Other charges: Annual administrative charges of 1.00% p.a. of the net

assets for protect (Income) and 1.25% p.a. for Maximiser (Growth) and

Balancer (Balanced) options. Annual investment charge of 0.5% p.a. of

the net assets for Protector and 1% p.a. of the net assets for Maximiser

and Balanced.

Mortality charge towards death benefit

Initial charges of 1% on Top ups

One free switch every year after which a switching fee of 1% of the

switching amount will be levied. Any unutilized free switch cannot be

carried forward.

Note: In case the unit value is inadequate to cover charges, the policy will

terminate.

OM KOTAK INVESTMENT PLAN PRODUCT

Suitability

The policy is an investment cum endowment insurance plan, and suitable for

people who are looking at investment option with good return and the security of

the investment.

Salient Features

This is an endowment cum plan and hence benefits are payable both on

death and on maturity

Premiums paid are invested in capital markets providing the policyholder

an opportunity to earn market linked returns. Policyholder can avail of all

the profits from the markets and in case the market does not perform well,

he would still get back the guaranteed Sum Assured thus protecting him

from the adverse affects of market.

The plan assures a minimum guaranteed amount on maturity, or in case of

death.

This is a non participating plan.

The premiums paid, net of charges, are converted into units and invested in

funds selected by the policyholder. Based on his risk appetite policyholder

has the to choose any of the four funds offered under the policy

Money market Fund – A portfolio invested primarily in money market

instruments and other short-term investments. It provides access to a low risk

portfolio and is useful when one wants to avoid the risks associated with long-

term investments.

Min. investment Maximum Risk Profile

Money Market Instruments / Bank

Deposit

100% 100% Low

Equity shares of blue chip companies 40% 80% Medium to

High

Securities issued by Central Govt. /

Guaranteed by Central Govt.

20% 60% Low to

Medium

Short Term Bank deposit / Call

money / Cash

0% 20% Low

Policy holder has the flexibility to switch the money (or a part of it) from one

fund to the other is available. Funds can be switched any number of times

during the term of the plan, at daily declared selling and buying prices.

Loan can be availed provided the policy has been in force for 3 years

Automatic Cover Maintenance facility: This facility keeps the policy in force

even on non-payment of premium. However, this facility is available only if

the policy has been in force for a period of 3 years. Under this facility, in case

policyholder misses premium payments, units would be liquid dated at the

prevailing selling price to meet the ridk and expense charges an policy would

be in force. As long as the value of units is sufficient to meet the expenses, the

policy would be in force, on maturity, the residual value of uits would be paid

as a benefit to the policy holder.

The premiums paid under the plan will qualify for rebate under Sec. 88 of the

Income Tax Act, 1961 and the returns are fully Tax exempt under Sec 10

(10D). premiums paid for Critical Illness Benefit qualify for rebate under Sec,.

80 D.

The policy benefits can be enhanced by adding riders to it. The riders available

with the policy are:-

o Term / Preferred Term Benefit

o Accidental Death Benefit

o Permanent Disability Benefit

o Critical Illness Benefit

o Life Guardian Benefit

o Accidental Disability Guardian benefit

Benefit

On Maturity

Full Sum Assured or the market value of the units, whichever is higher is payable,

On Death

Full Sum Assured or the market value of the units, whichever is higher is payable

Riders

Term/Preferred Term Benefit: In the event of death during the term of this benefit,

the beneficiary would receive and additional death benefit amount, which is over

and above the sum assure. The maximum amount of benefit one can avail is equal

to the basic sum assured. Where the Term Benefit cover applied for is more than

Rs. 10 Lakhs. Better rates may apply, subject to meeting eligibility requirements.

Accidental Death Benefit: This benefit provides an additional amount (over and

above the sum assured) to the beneficiary in the event accidental death of the life

insured. The maximum cover available under this benefit is equal to the basic sum

assured (subject to a maximum of Rs. 10 lakhs).

Permanent Disability Benefit: In case of permanent disability due to an accident,

the riders pays an additional amount, which is paid out as an annuity, the

maximum, permanent Disability Benefit that one Can avail of is equal to the basic

sum assured (subject to a maximum of Rs. 10 lakhs)

Critical Illness Benefit:- This benefit can be added to the basic life insurance plan

to provide financial support in the event of medical emergencies. On the first

occurrence of critical illness during the term of the plan, policyholder would

receive a portion of the sum assured to reduce your financial burden in this

emergency.

Life Guardian Benefit: In case of the unfortunate death of the proposer, this

benefit keeps the policy alive by waiving all future premiums on the policy.

Accident Disability Guardian Benefit: In case the proposer is permanently

disabled as a result of accident, this benefit keeps the policy alive by waving all

future premiums on the policy

Other Conditions

Minimum Age at entry : 18 years

Maximum Age at entry : 60 years

Maximum maturity age : 75 years

Term of the policy : 10-30 years

Minimum Premium

1. Quarterly – Rs.2620

2. Half yearly – 5115

3. yearly – 10000

Exclusions

In case the life insured commits suicide during the first year of the plan, the

beneficiary would not receive any of the benefits outlined in the plan.

Exclusions for Accidental Death Benefit, Permanent Disability Benefit,

Critical Illness Benefit, and Accidental Disability Guardian Benefit

q. Self inflicted injuries, suicide, insanity, immorality, committing any breach

of law or being under the influence of drugs. Liquor etc.

r. when the life insured / proposed is engaged in aviation or aeronautics other

than as a passenger on a license commercial aircraft operating on a schedule

route.

s. due to injuries from war (whether war is declared or not), invasion, hunting,

mountaineering, motor racing of any kind, other dangerous hobbies or

activities, or having been on duty in military, para military, security or police

organization. Additional Exclusions for Critical Illness Benefit

t. Unreasonable failure to seek or follow medical advice.

u. any pre-existing medical conditions not disclosed at inception.

v. infection with Human Immunodeficiency Virus (HIV) or condition due to

any Acquired Immune Deficiency Syndrome (AIDS)

w. Infection with Human Immunodeficiency Virus (HIV) or condition due to

any Acquired Immune Deficiency Syndrome (AIDS)

x. In addition, no benefit would be paid in respect of the exclusions specific to

each critical illness.

Gilt Fund – the portfolio primarily consists of securities issued by or

guaranteed by the Central Government of India. Short-term investments will

also be made with banks. There is no credit risk associated with this

portfolio, suitable for investors looking for regular and steady income.

Min. Investment

Maximum Investment

Risk Profile

Securities issued by Central Govt. / Guaranteed by Central Govt.

80% 100% Low

Short Term Bank Deposit / Call Money / Cash 0% 20% Low

Balanced Fund – A portfolio invested primarily in share of well-managed

companies and in highly rates securities of Central Govt. this portfolio offer

you a balance of steady returns and growth.

Min. Investment

Maximum Investment

Risk Profile

Equity shares of blue chip companies 30% 60% MediumSecurities issued by Central govt. / Guaranteed by 20% 70% Low

Central Govt. Short Term Bank Deposit / Call money / Cash 0% 20% Low Growth Fund – A portfolio invested judiciously in equity and equity

related investments of well-managed companies. Security will be

enhanced through holdings in highly rated securities and short term

deposits. This fund is suitable for investors looking for growth and

capital appreciation in the term.

BIRLA SUN LIFE

PRODUCT

Single Premium Bond (Birla Sun Life)

Suitability

This is an investment plan, suitable for people who seek market-linked

returns and the same time are averse to any capital erosion. This policy also

provides life insurance cover.

Salient Features

This is a single premium, unitized investment plan.

This plan is similar to a mutual fund providing market linked returns with an

added advantage of having no down side risk of capital erosion.

Policy provides an insurance cover to the extent of 50% of premium paid or

policy fund which ever is higher.

Policy is be offered for 10 and 5 years terms

Policy holder has the option to choose the type of investment fund based on

his risk appetite. While for 10 year plan, policyholder can choose from

protector, Builder or enhancer options for 5 year plan only protector option is

available.

Premium paid is invested in the fund chosen after deducting the

administrative and other expenses.

Policy fund is expressed in terms of units. Net Assets Value per of each

investment fund is announced at least once in a week.

Policyholder can surrender the policy and receive Policy fund cash value.

However if the policy is surrendered in the policy year, a surrender charges

of 25% of the premium paid is applicable.

Premiums paid under the policy are eligible for tax rebate under section 88

of IT Act 1961. Further benefits paid under the policy are entirely tax under

section 10 (10D).

Benefits

Maturity Benefit

On maturity of the plan (when the plan comes to n end) the higher of the Policy Fund

of the Policy Premium will be paid.

On Death

An amount equivalent to 105% of premium paid of policy fund which ever is higher is

payable.

Other conditions

Minimum Age at Entry : no age limit

Maximum age at entry : 70 years

Maximum age at Exit : 80 years

Minimum premium : Rs. 25000 and multiples of Rs. 5000 thereof.

Term available : 5 and 10 years

Comparative Analysis of Unit Linked PlanS. No.

Company Name

HDFC Std. Life Insurance

LIC ICICI Prudential

Om Kotak Mahindra

Birla Sun Life

1 Plan Name Youngstar Future Plus Life Time Kotak Sale Investment Plan

Classic Life

2 Age 18 – 65 18 to 65 0 to 60 18 to 65 18 to 653 Sum

AssuredMin. 100000 Max. no limit

Min. 50000 Max. No limit

Min. 1 lacMax. 1 Crore

Subject to minimum premium

Min. 5 Lac. Sub. To pre. Amount

4 Premium Min. 10000 Max. no Limit

Min. 5000 Max. no limit

Min. 18000 Max. no limit

Min. 10000 Max. no limit

Min. 25000 max. no limit

5 Lock in period

3 years No lock period

3 years 3 years One year

6 Surrender allowed

After 3 years : no charges before lock period 25% of O/S amount

Less than one year: regular 40% of bid value single 96% of bid value more than one but less than 2 year regular 60%

After 3 year partial or final min. Rs. 2000

After 3 year value is equal to NAV – 2.5%

Loans/surrender is allowed after one year min withdrawal of amount will have to be Rs. 25000 surrender charges is applicable first

bid value single: 98% of bid value

75%

7 Death and maturity

On Death : Sum Assured + Annual premium is given by HDFC as a bonus to policyholder on Maturity: Market value of Unit held by Policyholder is given

On death some Assured + Bid value of unit held b policyholder is given on maturity : Lumpsum market value of unit held is given

On death some assured or bid value of unit which ever is higher there is no maturity date

On death market value of fund or SA which ever is higheron maturitySA or market value which ever is higher

On death *higher of policy fund or the face amount reduce by all withdrawals made in the 6 month preceding the death of LA * in death of a Minor before the year policy fund is payable

8 Fund option

* Growth fund* Liquid fund* Secure fund* Defensive F.* Balance managed fund

* Bond fund* Income F.* Balance F.* Growth F.

* Protector* Balance* Maximiser* One free switchover every year there after 1% OP switching amount and buying price

* Money market* GILT* Balance* Growth* Switch over any number times during the year at selling fund to another

* Protector* Builder* Enhancer* Creator* Switch over is allowed after one year form one two switches are free

9 Term Rider For Accident * Critical Illness Max 2500000

Accidental allowed upto * Critical Illness* Major Surgical Max upto 10 Lac

* Accident benefit disability benefit allowed 80+40 paise per thousand* Critical Illness* Life Guardian* WOP on Pid

* Accidental and permanent* Accidental death and dismemberment Rider* Critical Illness* Critical Illness Plus

10 Charges Fund Management Charges–0.80% p.a. Administration charge – Rs. 15 per month Risk

The Accidental benefit charges 0.50% p.a. CIB Charges – depending

Addition charges 1st

year – 20% of premium is less then 50000 18% if premium

Sales related 1st

year – 14% 2nd year onward 3.5% * Admn

1st year prm. 25000-49999-15% 50000 – 99999 – 14%one lac and above – 13% subsequent year

benefit charges Depends upon your age fund switching charging, premium redirection charges – after there years no charges cancellation charges – before three year 25% of O/S premium

upon age *flat – Rs. 15 p.m. * Admn. Charges – Rs. One% of SA* Switch over charges Rs. 100 service tax – 10.2%

higher then 50000 * 1% to 1.25% annual fund management charges

charges 1st

year – 7% upto 20000 pre. And 3% there after* under writing charges based on age 0.2 to 0.6%* fund charges money market – 0.6%* Guilt fund – 1%Balance-1.3%* Growth 1.5%

–4% * Investment Management fee is 1% p.a. Protector, Builder, Enhancer and 1.25% for Creator.

RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

1. To know about the requirement habits of the people in the region of patiala.

2. To know about the views of people regarding various Insurance

Companies.

3. Position of the Insurance companies in the mind of the consumer.

4. Position of the Insurance Competition regarding various Insurance

Companies.

5. To find out the position of Insurance Companies in the market.

LIMITATIONS:-

1. Most of the people are not interested to give the right data.

2. Some people don’t know about the private companies.

3. A span of 6 weeks training was too short for survey

DATA ANALYSIS AND FINDINGS:-

Respondent Profile:-

Respondent profile has been analysed:-

Ques 1:- Awareness of the various Insurance companies:-

S. No. Particulars %age

A ICICI 80%

B HDFC Std. Life Insurance 75%

C Om Kotal Mahindra 5%

D LIC 90%

E Birla Plus 10%

Respondent response about the awareness of the insurance comapneis

Ques 2:- What the people think about the Insurance

S. No. Particulars %age

A Necessity for protection security 89%

B Imposition of an burden of expenses 5%

C A compulsory tool for tax saving 78%

Ques 3:- Main consideration that a customer looks at while purchasing an

Insurance policy.

S. No. Particulars %age

A TAX 90%

B SAVING 75%

C PROTECTION 80%

D PENSION 25%

E INVESTMENT 35%

Ques 4:- What a respondents see while purchasing a Insurance from the

Company.

S. No. Particulars %age

A Standing & Goodwill of the Company 90%

B Product Range of the Company 1%

C Advertisement being released by the Company 5%

D Services being given by the Company 80%

E Communication and knowledge of the

Representatives

10%

F Returns of Bonus declared by the Company 85%

CONCLUSIONS

FINDINGS AND RECOMMENDATIONS:

1. The monopoly of LIC has been broken because private Insurance

companies came into the market.

2. 09% respondents are aware of privatization of Insurance Industry and

10% respondents do not know about private companies.

3. 90% people know about LIC Insurance Company. 75% people know

about HDFC Insurance Co. and 15% people know about other

companies.

4. Some people preferred to the private companies because of their better

services.

5. Some people believe only or preferred only Public Insurance

Companies like LIC.

6. As majority of the population of Patiala City belongs to the services

class so they consider tax saving rather purchasing a life insurance

7. The financial growth of private companies is much more Life Insurance

companies

8. The private companies always keep in touch with their customers with

the latest information.

9. Most of the respondent said that private companies should not be

trustworthy

10. Most of the people go for Children benefit because of triple benefit.

11. Now, a days people preferred to invest the money in Insurance policy

rather than in Banks because of better benefits of Insurance policies

growth money with life cover.

12. The respondents are above 45 they believe in Public Insurance

companies and those respondents who are less than 45 believe in

Private Insurance companies.

13. HDFC has made its presence felt in the market in a short span of time.

SUGGESTIONS:

1. Advertisement should be done on television and especially posters and

banners. This will greatly help in raising awareness level.

2. Insurance company should show more commitment with the customer.

3. Private companies give better services to the customers comparatively to

public companies.

4. The private company should create good relation and communication.

5. Private companies should work together to spread awareness regarding the

benefit given by the Private companies.

6. Private Insurance Companies give some discount to after the customer.

7. A public relation officer should be appointed in the company who with

customers and their need.

8. Cross training should introduce in private companies.

9. Private companies needs to the market their products better and should

create greater awareness about their product and services. They need

extensive market advertisement about the additional benefit provided by

them in comparison to the policies offered by LIC.

10. Agents have got maximum influence on a customers. They are the one who

introduce the prospect to different policies. So agents should be give full-

fledged training and the training should be strict.

* QUESTIONAIRE *

(This Information is for our internal use only, will not to be disclosed to any other

organization / department)

Consumer Behavior towards various Investment and Insurance Products.

A-STUDY

Name Address

Telephone Age

Occupation Annual Income

Marital Status Single Ø Married Ø (Age of Children if applicable)

---------------------------------------------------------------------------------------------------

Q. 1 Any There Insurance Companies, which you are aware of ?

Q. 2 What do you think Insurance Is ?

A3. Necessity for Protection and security Ø

Imposition as an Extra Burden on expenditure Ø

A compulsory Tool for Tax Saving Ø

Q.4 What are the main considerations that a customer looks at while purchasing

an insurance policy.

A4. Tax Ø Saving Ø Protection Ø Pension Ø Investment

Ø

Q.5 What would you see while purchasing an Insurance Policy from a

Company ?

A5. Standing and Goodwill of the Company Ø

Product range of the Company Ø

Advertisement being given by the company Ø

Services beings given by the Company Ø

Communications and Knowledge of the representative Ø

Returns and Bonus declared by the Company Ø

Other Ø Please specify _________________________________

Q6. Why you want to buy another Insurance ?

A6. Tax Benefits Ø Savings Ø Other Ø

Q.7 If saving, What are your financial needs in next 10-20 years.

A7. Child Education Ø Marriage House Construction Retirement Needs

Ø

Q. 8 Are you aware about the Unit Link Plans beings launched by various

Insurance Companies.

A.8. Yes Ø No Ø (If yes, name the Co. and products)

Any other comments :

________________________________________________________________

________________________________________________________________

________________________________________________________________

(Thank You)

B I B L I O G R A P H Y

Study Material HDFC Standard Life Insurance

Study Material LIC

Study Material ICICI Prudent

Study Material Om Kotak Mahindra

Study Material Sun Birla Plus

Websites

www.hdfcinsurance.com//http//www/hdfcinsurance

www.iciciprulife.com //http//www/iciciprulife.com

www.licindia.com //http//www/licindia.com

www.bimaonline //http//www.bimaonline.com