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INVESTMENT OPPORTUNITIES IN LIFE INSURANCE
EXECUTIVE SUMMARYThe new millennium saw the dawn of many developments and changes in
insurance industry. In the backdrop of this challenging market scenario it was thought
to be benefiting to undertake a project study on investment opportunities available in
life insurance sector.
In the wonderful world of finance there are wide Varity of choices available
one needs to understand the different investment alternatives such as stocks, bonds,
government securities, bank fixed deposits, private company deposits & insurance.The goal is to help reduce risk and enhance returns.
Life Insurance is a contract for payment of a sum of money to the person
assured (or failing him/her, to the person entitled to receive the same) on the
happening of the event insured against. Usually the contract provides for the payment
of an amount on the date of maturity or at specified dates at periodic intervals or at
unfortunate death, if it occurs earlier. .
Among the competitive and complex market scenario in
India, it is difficult to analyze the changing attitudes, likes, dislikes and satisfactory
levels of customers. The field is such that only the enduring and most outstanding
will survive without being choked. The attempt here is made to assess the awareness
and preference of people in different investment schemes available in insurance
sector.
On the outset itself the problem was identified and defined with the help
of convince sampling. The research carried out this survey keeping in mind the need
and importance of the proposed study. This has enabled the researcher to easily
determine the scope and objectives of this study. A descriptive approach was
considered ideal for the study as it entailed the ever-changing opinion of the investors
and people.
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The findings were taken up for drawing logical conclusions. Based on the
findings suitable suggestions and recommendations were brought for the tangible
benefits of both the company and the investor. The entire project is presented in the
form of a comprehensive study report using a chapter scheme developed logically and
sequentially in a systematic and orderly manner from the beginning to the end.
The respondents were presented with a well-structured questionnaire as a part
of the survey method, which was easy to fill up. The main sources of data were the
questionnaire and other relevant business magazines, books and broachers of the
companies providing insurance schemes.
The specific objectives of the present study are to study the structure of
insurance company and insurance market, to study the existing business of insurance
industry, to study the investors behavior regarding insurance, and investment options
available in insurance sector. To study the investors preferences and attitude towards
insurance companies with regards to investment policies, their schemes and services.
To evaluate the insurance market under investment opportunities.
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INTRODUCTION
PART-A: ABOUT INDUSTRY
History of Insurance
Im sure weve all heard of the word, and have an idea of how it works.
Is it a concept? Idea? Is it something concrete or abstract? It depends on the context
of the situation. A quick, simple definition of insurance could be as follows:
Reimbursement in a situation of loss. Usually, someone decides that insurance is
needed. In order for the concept of insurance to arise, a pre-payment of some type is
required. In the case of typical, everyday general auto, health and life insurance, for
example, the pre-payment is in the form of a premium. Prior to the eve of the year
2000, thousands of people flocked to the stores, stocking up on numerous supplies.They feared that something catastrophic was going to take place once the clock struck
midnight, and if so, they wanted to be prepared. Isnt this a form of insurance? Sure-
in its basic definition. The supplies they purchased would act as reimbursement in the
case of loss.
Insurance is not necessarily an investment from which one expects to get one's
money back. Nor is it gambling. A gambler takes risks, while insurance offers
protection against risks that already exist. Insurance is a way to share risk with others.
Since ancient times, communities have pooled some of their resources to help
individuals who suffer loss. About 3,500 years ago, Moses instructed the nation of
Israel to contribute a portion of their produce periodically for "the alien resident and
the fatherless boy and the widow."-Deuteronomy
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THE ORIGINS OF INSURANCE
Early insurance goes back to the Egyptian times. It was known that around
3000 BC, Chinese merchants dispersed their shipments among several vessels to
avoid the possibility of damage or loss. There are some insurance companies around
today in the United States that provided insurance back in the mid 1700s, as well as
some that provided relief to banks during the 1930s and the Great Depression.
Insurance has existed for thousands of years. A form of credit insurance was
included in the Code of Hammurabi, a collection of Babylonian laws said to predate
the Law of Moses. To finance their trading expeditions in ancient times, ship owners
obtained loans from investors. If a ship was lost, the owners were not responsible for
paying back the loans. Since many ships returned safely, the interest paid by
numerous ship owners covered the risk to the lenders.
It was likewise in a maritime setting that later one of the world's most famous
insurance providers, Lloyd's of London, was born. By 1688, Edward Lloyd was
running a coffeehouse where London merchants and bankers met informally to do
business. There financiers who offered insurance contracts to seafarers wrote their
names under the specific amount of risk that they would accept in exchange for a
certain payment, or premium. These insurers came to be known as underwriters.
Finally, in 1769, Lloyd's became a formal group of underwriters that in time grew
into the foremost market for marine risks.
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INSURANCE IN INDIA A HISTORICAL PROSPECTIVE:
Insurance business is not new to India. It finds mention in the writings of
Manu, Rishi Yagnavalkya and others, indicating that it has existed in India of ancient
times. It has evolved over time and has drawn heavily from the experience of other
countries specially England, where insurance companies have a more than 500 years
of history. Bombay Life Assurance Company was established in Bombay (now
Mumbai) on 1st May 1823. Oriental Life Assurance Company started was in Calcutta
by Europeans. The recorded history of Insurance business in India, however, began in
1914 when the Government of India started publishing returns of Insurance
Companies in India.
The Insurance Amendment Act of 1950 abolished Principal Agencies.
However, there were a large number of insurance companies and the level of
competition was high. There were also allegations of unfair trade practices. The
Government of India, therefore, decided to nationalize the insurance business. An
Ordinance issued on 19th January 1956 nationalized the Life Insurance sector and
'LIFE INSURANCE CORPORATION OF INDIA' (L.I.C.) came into existence in the
same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident
societies. Since then LIC has been the only player.
Similarly, before November 1972, a number of Indian and many foreign
companies did general insurance business in India and this business was linked with
their branches abroad. In addition, LIC, some mutual companies and cooperative
societies also offered this product. In fact, on the eve of nationalization, 68 Indian
(including LIC) and 45 non-Indian entities carried out insurance business in India.
Nationalization saw the business of all these organizations absorbed by the
GENERAL INSURANCE CORPORATION (GIC) with its four subsidiaries.
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Thus Life Insurance Corporation of India in the field of life insurance and
General Insurance Corporation of India in the field of general insurance have enjoyed
absolute monopoly. However, the reforms in financial sector in the early 90s have
since touched Insurance also. The Govt. of India set up a committee with Shri. R.N.
Malhotra as the Chairman to recommend suitable reforms in this sector. As a
consequence of the recommendation of the Malhotra Committee, the Government of
India set up an Insurance Regulatory Authority. On the 2nd December 1999, Indian
Parliament has passed, Insurance Regulatory and Development Act, throwing open
the Insurance sector to Banks and other private parties. Since then, RBI has come out
with draft guidelines for entry to this sector. This is seen as a major step in financial
sector reforms, which introduce, for the first time since nationalization of the
insurance business, an element of competition in this sector. This should bring
competitively priced insurance for the customer and improve the service available to
him.
LIFE INSURANCE MARKET
Life insurance in existing form came in India from UK in 1818 with Oriental
Life Insurance Company. The Indian life Assurance companies Act, 1912 was the
first measure to regulate life Insurance business. Later in 1928 the Indian Insurance
Companies act was enacted, which was amended in 1938. Finally Government of
India amended this act in 1950.
Life Insurance Corporation of India was formed in September 1956 by
passing LIC Act, 1956 in Indian parliament.
The business of life insurance in India in its existing form started in India in
the year 1818 with the establishment of the Oriental Life Insurance Company in
Kolkata.
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Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute
to regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act
with the objective of protecting the interests of the insuring public.
1956:245 Indian and Foreign Insurers and the Provident Societies taken over by
the Central Government and Nationalized. LIC formed by an Act of Parliament,
viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the
Government of India.
The Life Insurance market in India is an underdeveloped market that was only
tapped by the state owned LIC till the entry of private insurers. The penetration of life
insurance products was 19 percent of the total 400 million of the insurable population.
The state owned LIC sold insurance as a tax instrument, not as a product giving
protection. Most customers were under- insured with no flexibility or transparency in
the products. With the entry of the private insurers the rules of the game have
changed.
The 12 private insurers in the life insurance market have already grabbed
nearly 9 percent of the market in terms of premium income. The new business
premiums of the 12 private players have tripled to Rs 1000 crore in 2002- 03 over last
year. Meanwhile, state owned LIC's new premium business has fallen.
Innovative products, smart marketing and aggressive distribution. That's the triple
whammy companies to sign up Indian customers faster than anyone ever expected.
Indians, who have always seen life insurance as a tax saving device, are now
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suddenly turning to the private sector and snapping up the new innovative products
on offer.
The growing popularity of the private insurers shows in other ways. They are
coining money in new niches that they have introduced. The state owned companies
still dominate segments like endowments and money back policies. But in the annuity
or pension products business, the private insurers have already wrested over 33
percent of the market. And in the popular unit-linked insurance schemes they have a
virtual monopoly, with over 90 percent of the customers.
The private insurers also seem to be scoring big in other ways- they are
persuading people to take out bigger policies. For instance, the average size of a life
insurance policy before privatization was around Rs 50,000. That has risen to about
Rs 80,000. But the private insurers are ahead in this game and the average size of
their policies is around Rs 1.1 lacks to Rs 1.2 lacks- way bigger than the industry
average.
KINDS OF INSURANCES
Permanent Life Insurance
This is the one that provides for a lifetime of benefits as long as the premiums are
paid as and when they are due. They are beneficial as one can take a loan on the
benefits that can be availed on this type of insurance.
Term Life Insurance
This provides protection for a preset / limited period of time, and would pay the
death benefit only on death happening within the preset time. It is considered to be
insurers require the insured to provide proof of their insurability.
Annuity
An Annuity is a contract that provides an income for a specified period of
time, such as a number of years. And Annuity Consideration is the payment, or one of
the regular periodic payments; an annuitant makes for an annuity.
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The business of Insurance essentially means defraying risks attached to any activity
over time (including life) and sharing the risks between various entities, both persons
and organizations.
Life Insurance is universally acknowledged to be an institution that eliminates
'risk' and provides the timely aid to the family in the unfortunate event of death of the
breadwinner.
Life insurance is a written contract between the insured and the insurer that
provides for the payment of the insured sum on the date of the maturity of the
contract or on the unfortunate death of the insured, whichever occurs earlier.
The contract provides for the payment of an amount on the date of maturity or
at specified dates at periodic intervals or at unfortunate death, if it occurs earlier.
ADVANTAGES / BENEFITS OF INSURANCE
Protection:
Life Insurance guarantees full protection against risk of death of the assured.
In case of death, full sum assured is payable, whereas under other savings schemesthe total accumulated savings alone will be available. The later will be considerably
less then the sum assured, if death occurs during early years.
Long term saving:
Life insurance encourages long term saving. By paying a small premium in
easy installments for a long period a handsome saving can be achieved.
Liquidity:
Loan can be obtained against a policy assured whenever required. Tax Profit:
Tax relief in income tax and wealth tax can be availed on the premium paid
for Life Insurance.
Insurance encourages and forces thrift:
A savings deposit can be too easily withdrawn. Many may not be able to resist
the temptation of using the balance for some less worthy purpose. On the other hand,
the payment of life insurance premiums becomes a habit and comes to be viewed with
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the same seriousness as the payment of interest on a mortgage, thus insurance in
effect brings about compulsory savings.
Easy settlement and protection against creditor:
Life Insurance can assure name of a person to whom the policy moneys would
be payable in the event of his death. The proceeds of a life insurance policy, a married
womans property act policy constitutes a trust in favor of the wife and /or children
and no separate assignment is necessary. The beneficiaries ate fully oriented from
radiators except to the extent if any interest in the policy by the assured.
Need for the Insurance
The possibility of damage to assets caused by any peril is the risk that the
asset is exposed to
Risk means the possibility of loss or damage that may or may not happen.
It is because of the uncertainty about the risk that insurance becomes
important.
No person should be in a position to make the risk happen or occur and take
unfair advantages.
It covers the risk of dying too early and living too long.
Individual he also needs financial security for the old age or on his becoming
permanently disabled when his income will stop.
It covers tangible assets but the concept can be extended to intangibles also.
Human life is an income generating assets that can be lost in case of early
death or disability caused by an accident.
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INSURANCE REGULATORY AND DEVELOPMENT ACT
(IRDA)
On the recommendation of Malhotra Committee, an Insurance Regulatory
Development Act (IRDA) passed by Indian Parliament in 1993.
MISSION
Its main aim is to activate an insurance regulatory apparatus essential for
proper monitoring and control of the Insurance industry.
To protect the interests of the policyholders, to regulate, promote and ensure
orderly growth of insurance industry and for matters connected therewith or
incidental thereto. Due to this Act several Indian private companies have entered into
the insurance market, and some companies have joined with foreign partners.
Reforms in the Insurance sector were initiated with the passage of the IRDA
Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory
body in April 2000 has fastidiously stuck to its schedule of framing regulations and
registering the private sector insurance companies. The other decisions taken
simultaneously to provide the supporting systems to the insurance sector and in
particular the life insurance companies were the launch of the IRDAs online service
for issue and renewal of licenses to agents. The approval of institutions for imparting
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training to agents has also ensured that the insurance companies would have a trained
workforce of insurance agents in place to sell their products, which are expected to be
introduced by early next year. Since being set up as an independent statutory body the
IRDA has put in a framework of globally compatible regulations. In the private sector
12 life insurance and 6 general insurance companies have been registered.
Section 14 of IRDA ACT, 1999 lays down the duties, powers and function of IRDA.
Subject to the provision of this act and any other law for the time being in force,
the authority shall have the duty to regulate, promote and ensure orderly of the
insurance business and reinsurance business.
Without prejudice to the generality of the provision contained in sub section
(1), the powers and function of the authority shall include-
Issue to the applicant a certificate of registration, renew, modify, withdraw,suspend or cancel such registration.
Protection of the interests of the policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable interest, solving
insurance claim, surrender value of policy and terms and conditions of
contract of insurance.
Specifying requisite qualifications, code of conduct and practical training for
inter mediators or insurance intermediately and agents.
Specifying requisite qualifications, code for surveyors and loss assessors.
Levying fees and other charges for carrying out the purposes of this act.
Promoting efficiency in the conduct of insurance and reinsurance business.
Promoting and regulating professional organizations connected with the
insurance and reinsurance business.
Calling for information from, undertaking inspection of, conduction enquires
and investigations including audit of the insurers, intermediaries, insuranceintermediaries and other organizations connected with the insurance business.
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Control and regulation of the rates, advantages, terms and conditions that may
be offered by insurers in respect of general insurance business not socontrolled and regulated by the Tariff Advisory committee u/s section 64U of
the Insurance Act, 1938 (4 of 1938).
Specifying the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers and other
insurance intermediaries.
Regulating investment of funds by insurance companies.
Regulating maintenance of merging of solvency.
Adjudication of disputes between insurers and intermediaries or insurance
intermediaries.
Supervising the functioning of the tariff advisory committee.
Specifying the % of premium income of the insurer to finance schemes for
promoting and regulation professional organizations referred to in clause (f). Specifying the % of life insurance business and general insurance business
and general insurance business to be undertaken by the insurer in the rural or
social sector.
Exercising such other powers as may be prescribed.
IRDA also try to generate the awareness and regulate the life insurance sector.
For this job government also use the print media viz. newspapers and
magazines etc. to for public interest. Some of the advertisement cuttings areattached in annexure at end of the project.
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PLAYERS OF INSURANCE BOTH LIFE AND GENERAL
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LIFE GENERAL
ICICI Prudential Life Insurance ICICI-Lombard Insurance
Kotak Mahindra Life Insurance Reliance General Insurance
Max New York Life Insurance IFFCO-Tokyo General Insurance
HDFC Standard Life Insurance HDFC Chubb General InsuranceBajaj Allianz Life Insurance Bajaj Allianz General Insurance
Birla Sun Life Insurance Royal Sundaram General Insurance
Aviva Life Insurance Cholamandalam General Insurance
ING Vysya Life Insurance National Insurance Company
Amp Sanmar Life Insurance New India Assurance Company
Tata AIG Life Insurance Tata AIG General Insurance
MetLife Insurance Oriental Insurance
SBI Life Insurance United India InsuranceLIC
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PART-2 ABOUT SUBJECT
INTRODUCTION
INVESTMENTS An investment means future planning of a savings. In other words
investments means earning income from savings by investing in many ways it may in
the form of purchasing shares in a company or in any kind. The savings of an
individual must earn income and the savings must be secured in such way that it
should be useful in the future.
Investment alternatives
As an investor you have a wide array of investment avenues available to you.
Sacrificing some rigor, bewildering range of investment alternatives is available.
They fall into two broad categories, viz. financial assets and real assets are paper (or
electronic) claims on some issues such as the government or a corporate body. The
important financial assets are equity shares, corporate debentures, government
securities, and deposit with banks, mutual fund shares, insurance policies, and
derivative instruments. Real assets are represented by tangible assets like a residential
house, a commercial property, an agriculture farm, gold, precious stones, and art
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objects. As the economy advances, the relative importance of financial assets tends to
increase. Of course, by and large the two forms of investment of financial assets tend
to increase. Of course, by and large the two forms of investments are complementary
and not competitive.
For sensible investing, you should be familiar with the characteristics and
features of various investment alternatives before you. These may be classified as
shown below chart.
Investment alternatives
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Investment alternatives
Non-marketing
financial assets
Money market
instruments
Bonds
Equity shares
Mutual fundschemes
Lifeinsurance
Real estatePreciousobjects
Financial derivatives
Commodities
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i. EQUITY SHARES
An equity share refers to the ownership of the capital. Equity shares holder
will purchase the shares of the company and control the company. The equity
shareholders enjoy the companys profit or losses. While fixed income Investment
Avenue may be more important to most of the investor, equity shares seen to capture
their interest the most potential rewards and penalties associated.
CALCULATION OF EQUITY SHARE:
Amount of per equity share= net amount available to the equity share
Number of equity shares
ii. NON-MARKETABLE FINANCIAL ASSETS
A good portion of the financial assets of individual is held in the form of non-
marketable financial assets like bank deposits, post office deposits, company deposits
and provident fund deposits.
BANK DEPOSITS:
Perhaps the simplest of investment avenues, opening a bank account and
depositing money in it can make a bank deposit. There are various kinds of bank
account. Current A/c, saving A/c and fixed A/c. while a deposit in a current A/c does
not earn any Interest, deposits in other kind of bank A/c earn interest.
POST OFFICE TIME DEPOSITS:
Similar to fixed deposits of commercial banks, post office time deposits have
the following features:
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Deposits can be made in multiple of Rs 50 without any limits.
The interest rates on post office time deposits are in general, slightly higherthan those on bank deposits.
The interest is calculated half yearly and paid annually.
No withdrawal is permitted up to six months.
Post office time deposits can be pledged.
COMPANY DEPOSITS:
A company fixed deposit is similar to a fixed deposit in a bank. The difference
is that it is with a non-banking finance company popularly called a non-banking
financial corporation (NBFC) entity. It operates like a bank FD, where in you invest
your money for a specified period of time and a specific rate of interest. The factors
that come in to play for a company deposit are the period of the FD the principle
amount and other organizational policies which vary from company to company the
tenures generally vary from 1 year to 5 years.
iii. MONEY MARKET INSTRUMENTS:
Debt instruments, which have a maturity of less than one year at the time of issue,
are called money market instruments. These instruments are highly liquid and have
negligible risk. The major money market instruments are
Treasury bills
Certificate of deposit
Commercial papers
Repos
TREASURY BILLS:
A treasury bill is a short-term money market instruments issued by the central
government. Typically, it has a maturity period of six months or one year it is issued
at a discount and is repayable at par. Due to a large denomination and low rate of
return; it has virtually no appeal for individual investors.
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COMMERCIAL PAPER:
Commercial paper represents short term unsecured promissory note issued by
firm that are generally considered to be financially strong. A commercial paper
usually has a maturity period of 90 to 182 days. It is sold at a discount and redeemed
at par. Hence the implicit rate is a function of size of discount and the period of
maturity.
CERTIFICATE OF DEPOSITS:
A certificate of deposit represents a title to a negotiable time deposit with a
commercial bank. It carries a reasonable attractive interest rate. Since the
denomination of certificates of deposits is very high, it is of interest mainly to
institutions investors and companies.
iv. FINANCIAL DERIVATIVES
A financial derivative is an instrument whose value depends on the value of
some underlying asset. Hence, it may be viewed as a side bet on that asset. From the
point of view of investors and portfolio manager, FUTURES, OPTIONS and SWAPS
are the three most important financial derivatives. They are used for hedging and
speculation. Exchanges for trading these derivatives are expected to be set up soon in
India.
FUTURES:
A future contract is an agreement between two parties exchanges an asset for
cash at pre-determined future date for a price that is specified today. The party, which
agrees to purchase the asset, is said to have a long position and the party, which
agrees to sell the assets said to have a short position.
OPTIONS:
A potion gives its owner the right to buy or sell an underlying asset (our focus
here will be on equity shares) on or before a given date at a pre-determines price.
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Note that options represent a special kind of financial contract under which the option
holder enjoy the right (for which he pays a price), but has no obligation, to do
something. There are two types of options.
Call option
Put option
V. BONDS OR FIXED INCOME SECURITIES
Bonds or debentures represent long-term debt instruments. The issuer of a
bond promises to pays a stipulated stream of cash flows. This generally comprises
periodic interest payments over the life of the instrumented principal payment at the
time of redemption. The following fixed income instruments, government securities,
RBI relief bonds, private sector debentures, PSU bonds and preference shares.
PREFFERANCE SHARES:
Preference share represent a hybrid security that par takes some characteristics of
equity shares and some attributes of debentures. Some of the features are below:
Preference shares carry a fixed rate of dividend.
Preference dividend in payable only out of distributes profits.
Dividend on preference share is generally cumulative.
Currently preference dividend is tax-exempt up to a certain limit.
GOVERNMENT SECURITIES:
Debt securities issued by the central government, state government and quasi
government agencies are referred to as government securities.
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Government securities have maturity ranging from 3-20 years and carry
interest rates that usually vary between 8 and 10 percent. Even though these securities
carry some tax advantages, they have traditional not appealed to individual investors
because of the low rates of interest and long maturities. They typically held by bank,
financial institution, insurance companies and provident fund mainly because of
certain statutory compulsions.
PRIVATE SECTOR DEBENTURES:
Akin to promissory notes, debentures are instruments meant for raising long-
term debt. The obligation of a company towards its debentures holders is similar to
that of a barrower who a promises to pay interest and principal at specified times.
vi. MUTUAL FUNDS
The securities exchange board of India (mutual fund) regulations 1993
defines mutual funds as a fund established in the form of a trust by a sponsor, to
raise money by the trustees through the sale of units to the public under one or more
schemes for investing in securities in accordance with these regulations.
TYPES OF FUNDS
On the basis of execution and operation
CLOSED- ENDED FUNDS
Under this scheme, the corpus of the funds and its duration are pre-fixed. The
corpus of the fund and the numbers of units are determined in advance.
OPEN ENDED FUNDS
It is just the opposite of close-ended funds, under this scheme the size of the
fund and or the period of the fund are not pre-determined. The investors are
free to buy and sell any number of units at any point of time.
SCHEMES GALORE:
A variety of schemes offered by mutual funds. Based on the investment policy the
more commonly offered schemes might be broadly classified as follows.
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EQUITY SCHEMES:
1. GROWTH SCHEMES
2. INDEX SCHEMES
3. SECTOR SCHEMES
GROWTH SCHEMES:
The corpus of a growth scheme is invested substantially (80-90%) in equity
related investments. The balance may be an in debt instrument. The principal
objective of such a scheme is to achieve long-term capital growth for the unit holders.
INDEX SCHEMES:
An index scheme is equity schemes that invest its corpus in a basket of equity
stocks that comprise a given stock market. Such as BSE&PCNX, nifty index with
each stock being assigned a weight age equal to what it has in the index thus on index
fund appreciates or depreciates (subject to tracking error) the same way as the index.
The principal objective of an index scheme is to give a return in time with the index
movement.
SECTORAL SCHEMES:
A sectoral scheme invests its corpus in the equity stocks of a given sector such
as pharmaceuticals, information technology, telecommunications, and so on sectoral
scheme appeal to investors interested in taking a bet on those sectors.
BALANCED SCHEME:
A balanced as the name suggests the, invests its corpus across two broad asset classes
via, equity and debt in a more or less balanced manner. A commonly followed
allocation is as follows.
ALLOCATION OF FUNDS
Equity 60% 40%
Debt 60% 40%
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60%
60%
40%
40%
0 0.2 0.4 0.6 0.8 1 1.2
ALLOC
ATION
OFF
UNDS
Equity
Debt
The objective of a balanced scheme is to combine growth with stability.
DEBT SCHEME:
1. INCOME SCHEME
2. GILT SCHEME
3. MONEY MARKET SCHEME
INCOME SCHEMES:
The corpus of an income scheme is invested primarily in fixed income
securities such as government of India securities, debt obligations of state and local
government corporate debentures and money market instruments. A small portion of
the corpus, say 10 to 20% may be invested in equity instruments the primary
objectives of an income scheme is to provide a steady income without impairing the
capital.
GOVERNMENT SECURITIES SCHEME:
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The corpus of a government securities scheme (also referred as gilt scheme)
is invested in sovereign securities issued by the central and the state government and
securities that are unconditionally guaranteed by the central and or state government
for payment of interest and principle. The scheme may also invest in money market
instrument for liquidity purposes. The objective of such a scheme is to earn a modest
return without any credit risk.
MONEY MARKET SCHEME:
The corpus of a money market scheme (also referred to as a liquid scheme) is
invested primarily in money market instruments. Such as Treasury bill, commercial
paper, Certificate of debt and call and notice money. Money market instruments have
negligible interest risk exposure (thanks to their short maturity) as well as credit risk
exposure. The principal value of a unit in a unit in al liquidity scheme remains stable
though the periodic income may vary depending on the conditions in the money
market.
vii. REAL ESTATE:
For the bulk of the investors the most important asset in the portfolio is a
residential house. In addition to a residential house, the more affluent investors are
likely to be interested in the following type of real estate.
Agricultural land
Semi-urban land
Time share in a holiday resort
viii. REAL ASSETS & PRECIOUS OBJECTS:
Precious objects are generally small is size but highly valuable in monetary terms.
The important precious objects are
Gold and silver
Precious stones
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Art objects
ix. LIFE INSURANCE
The Parliament of India passed the Life Insurance Corporation Act on the 19th
of June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more widely
and in particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.
INVESTMENTS IN LIFE INSURANCE AS AN INDIVIDUAL
Agreed, insurance may not be the best place to invest your hard earned
money. But there are sufficient reasons for one to believe that it can be a highly
lucrative avenue to facilitate savings. People often talk about yield on investment and
tend to compare their values with those available on various insurance schemes. This
is particularly typical within the Indian sub-continent where one conveniently forgets
the element of risk covered by life insurance. It is extremely unfair to compare theperformance of insurance against other investments without considering the core
features of insurance. The very essence of insurance is to protect your family from the
uncertainty of your life. Hence it proves very logical to evaluate the costs involved
towards this feature. Ask yourself this question.
When you pay insurance premium for your car, do you get anything if
fortunately no mishap happens? This means that you spent the amount to secure a
valuable property.
Hence you must accept that out of the total amount paid by you for your life
insurance, a certain amount is used for providing the risk cover and only the balance
can be utilized as savings.
In other words, the total premium you pay minus the amount evaluated, as the
cost of insurance must be considered as the amount invested to get the maturity
amount. If you calculate the Yield from returns, you will be in for a surprise.
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Secondly, we tend to think very unrealistically about our life. We often
compare the results after say 10 years from an investment scheme, for instance PPF is
providing a better yield than an insurance policy.
For instance if you invest Rs. 10,000/ - in PPF after 1 year your money will
grow to Rs. 11,100/ - accruing a return of 11 percent. But what if your death occurs in
the first year itself? The Rs. 10,000/ - can give you an insurance cover up to an
approximate sum of Rs. 12 lakes (depending upon the plan, age, etc) and this amount
shall become available to the nominee of the policyholder as against the mere paltry
Rs. 11,100/ - which PPF shall pay.
We shall look after the following schemes of Life insurance, because of their
importance and /or distinctive features:
Endowment assurance policy
Money back policy
Whole life policy
Term assurance policy
Investment plan
THE ENDOWMENT ASSURANCE POLICY
This is the most popular form of life assurance since it not only makes
provision for the family of the Life Assured in the event of his early death, but also
assures a lump sum at any desired age. The amount assured, if not paid by reason of
his earlier death, becomes payable at the end of the endowment term when it may be
invested to provide an annuity during the remainder of his life or in any other way he
may think most suitable at the time.
If payment of premiums ceases after at least THREE years' premiums have
been paid, a free paid-up policy for a reduced sum assured will be automatically
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secured provided the reduced sum assured, exclusive of any attached bonus, is not
less than Rs. 250/-. The reduced sum assured will become payable on the event as
stipulated in the policy. Being an endowment assurance policy, this plan is opt for
people of all ages and social groups who wish to protect their families from a
financial setback that may occur owing to their demise. The amount assured if not
paid by reason of his death earlier will payable at the end of the endowment term
where it can be invested in an annuity provision for the rest of the policyholder's life
or in any other way he may think most suitable at that time.
THE ENDOWMENT ASSURANCE POLICY LIMITED PAYMENT
Just as in the case of limited payment whole life polices, here, too, the
payment of premium can be limited either to a single payment or to a term shorter
than the policy. The endowment is, however, payable only at the end of the policy
term, or on death of the policyholder if it takes place earlier.
If payment of the premiums ceases after at least three years' premiums have
been paid, a free paid-up Policy for an amount bearing the same proportion to the sum
assured as the number of premiums actually paid bears to the number stipulated for inthe policy, will be automatically secured provided the reduced sum assured, exclusive
of any attached bonus, is not less than Rs.250.Such reduced paid-up Policy will not
be entitled to participate in the profits declared thereafter, but such Bonus as has
already been declared on the Policy will remain attached here too.
THE MONEY BACK POLICY
Unlike ordinary endowment insurance plans where the survival benefits arepayable only at the end of the endowment period, this scheme provides for periodic
payments of partial survival benefits as follows during the term of the policy, of
course so long as the policy holder is alive. In the case of a 20-year Money-Back
Policy, 20% of the sum assured becomes payable each after 5, 10, 15 years, and the
balance of 40% plus the accrued bonus become payable at the 20th year.
For a Money-Back Policy of 25 years, 15% of the sum assured becomes payable
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each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus
become payable at the 25th year.
An important feature of this type of policies is that in the event of death
at any time within the policy term, the death claim comprises full sum assured
without deducting any of the survival benefit amounts, which have already been paid.
Similarly, the bonus is also calculated on the full sum assured.
THE WHOLE LIFE POLICY
This plan is mainly devised to create an estate for the heirs of the policyholder as the
plan basically provides for payment of sum assured plus bonuses on the death of
the policyholder. However, considering the increased longevity of the Indian
population, the Corporation has amended the above provision, thereby providing
for payment of sum assured plus bonuses in the form of maturity claim on
completion of age 80 years or on expiry of term of 40 years from date of
commencement of the policy whichever is later. The premiums under the policy
are payable up to age 80 years of the policyholder or for a term 35 years
whichever is later.
If the payment of premium ceases after 3 years, a paid-up policy for such reduced
sum assured will be automatically secured provided the reduced sum assured
exclusive of any attached bonus is not less than Rs.250/-. Such reduced paid-up
policy is not entitled to participate in the bonus declared thereafter but the bonuses
already declared on the policy will remain attach, provided the policy is converted in
to a paid-up policy after the premiums are paid for 5 years.
THE WHOLE LIFE POLICY-LIMITED PAYMENT
This is the best form of life assurance for family provision since it enables the
Life Assured to pay all the premiums during the ordinarily vigorous and most
productive years of life. He need not pay any premium in the later stages of life if and
when his condition might be become adverse.
With Profits Limited Payments Policies do not cease to participate in profits after
completion of the premium-paying period but continue to share in the periodical
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Bonus Distribution until the death of the Life Assured. The Without-Profit option is
available
Under this scheme.
If the policyholder pays at least 3 years' premiums and then discontinues
paying any more premiums, a reduced paid-up assurance policy comes into force.
Such a reduced paid-up Policy will not be entitled to participate in the profits declared
thereafter, but such Bonus as has already been declared on the Policy will remain
attached thereto. The premium paying term under this plan is five years minimum and
55 years maximum.
THE CONVERTIBLE TERM ASSURANCE POLICY
This plan of assurance is designed to meet the needs of those who are initially
unable to pay the larger premium required for a Whole Life or Endowment Assurance
Policy, but hope to be able to pay for such a policy in the near future.
This plan would be found useful also in cases where it is desired to leave the
final decision as to the plan to a later date when, perhaps a better choice could be
made. Policyholders get an option of converting a policy into endowment assurance
or limited payment whole life assurance.
INVESTMENT PLANS: (ULIPs)
Investments in Life insurance something like investing youre saving to earn
income and getting value to the life. In this investment plan we are going to study
about the unit linked plans that is invest life is the HDFC SLIC unit linked plan.
INVEST LIFE:
IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT
PORTFOLIO IS BORNE BY THE POLICYHOLDER
This is a unit linked Endowment plan, which offers investment cum insurance
during the term of the policy. You can choose the level of cover within the limits,
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which will depend on whether the policy is a Single premium or Regular premium
contract, term chosen and on the level of premium you agree to pay.
The allocated premiums will be applied to purchase units as per the Fund type
chosen. Your Unit Account will be subject to deduction of charges as specified in the
Policy Conditions. The value of the units in the Unit Fund may increase or decrease,
depending on the investment return of the assets representing the chosen Fund Type.
PAYMENT OF PREMIUMS
You may pay premiums regularly at yearly, half-yearly or quarterly intervals
over the term of the policy. The minimum annual premium will be Rs.5, 000/-
increasing thereafter in multiples of Rs.1, 000/-. Alternatively, a Single premium can be
paid subject to a minimum of Rs.10, 000/- and thereafter in multiples of Rs.1, 000/-.
RESEARCH DESIGN
INTRODUCTION
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A systematized study requires proper planning and implementation of the
same. So, this research design includes an outline of the study, which was conducted
at HDFC Standard Life Insurance Company Limited. Bangalore. The design
of the study contains information stating the statement of the problem, objective of
the study, need for the study, and scope of the study, significance of the study,
research methodology, and sources of data, tools and techniques of data collection,
plan of analysis, limitations of the study and operational definition of the concepts,
sampling and sampling design.
STATEMENT OF THE PROBLEM
It is always very difficult to make investment decisions in this world of
insurance business.
It demanded investors to be knowledgeable and tact full regarding the
insurance market. Since, many insurance products are introduced with in a very short
span of time; people even having lot of money are confused to invest their hard
earning money in effective manner in insurance sector, because they need their ownpreferred policies to invest.
There are lot of insurance companies are offering a number of insurance
policies with different schemes and benefits. These policies have to frame considering
interest and preferences of the different kinds of people. The insurance companies has
to know which type of the policies can satisfy the needs and preferences of the
different people in the society, so that the investor can invest his/ her savings in thosepolicies which are most suitable & beneficial. Therefore this study was conducted to
throw the light on some of the policies and to study the investors preferences
regarding insurance products, and awareness of different products, services, likes and
dis-likes of the investors and what are all the benefits expected from the life insurance
products by the investors.
The study of Investment opportunitieshelps the company in knowing the
requirements, needs and preferences of general public in line with insurance products
and helps companies providing such plans to customize their products according to
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the preference of investors and also to create awareness among people about the
investment options.
OBJECTIVES OF THE STUDY
To provide a clear picture on various life insurance policies offered by HDFC
To study the profile of the investors owning the policies of HDFC.
To shows the problems faced by investors in investing in insurance sector.
To shows the insurance company (HDFC) about the investors preferences,
expectation and benefits for their investment in insurance schemes.
To suggest various measures to improve their services.
SCOPE OF THE STUDY
1. The result of the study will be useful to make difference in their investment
opportunities offered to the public.
2. The result of the study will be useful to an individual to invest where there is
no risk and other benefit available to invest.
The study enlightens the insurance company to spread its products and
services to various segments improve on existing products and it also gives
rise to introduction of new products and services.
LIMITATIONS OF THE STUDY:
Survey will be conducted only for individuals
This survey is useful only to certain period of time
The survey will be conducted only in Bangalore city,
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The survey will be conducted only to working respondents
Some of the major points of the life insurance policy were not let out.
Some of the information was confidential. Which do company & its employees
only use? So such informations are not reviled outside for the general public
Methodology of Research:
I. Type of Research
The research carried out in this study is both exploratory and descriptive in
nature.
II. Sample size
Convenience sampling has been adopted for the study. The sample size taken
up for the study was 100 respondents. The respondents include professionals,
self-employed, employed, and businessmen.
III. Tool for data collection
The study was done based on the collection of Primary & Secondary data.
Primary Data: Primary data was collected with the use of questionnaire and
personal interaction with the company employees and general public.
Secondary Data: Secondary data was collected by:
Referring several books on insurance issues.
Referring different books and previous project reports in a college
library.
Referring from fact sheets, brochures, journals, reference books, etc.
Referring some of the articles, reports and magazines on insurance.
IV. Method of analysis
An analytical research was carried out first to gain insight and proper
understanding of the life insurance and its different parameters connected to
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the investment plans. This was done through questionnaire and personal
interaction with the employees of HDFC SLIC .
Operational definition of the concepts
Premium: The fee paid by the insured to the insurer for assuming the risk.
Life insurance: Insurance that guarantees a specific sum of money to a
designated beneficiary upon the death of the insured or to the insured if he or
she lives beyond a certain age.
Group Insurance: Group insurance is a scheme that provides insurance
benefits to a number of people under a single policy.
Insured: An individual who is covered under the policy is called the insured
or policyholder.
Maturity: The period for which the insurance policy has been taken is known
as the maturity period.
Protection: Savings through life insurance guarantee full protection against
risk of death of the saver. In life insurance, on death, the full sum assured is
payable (with bonuses wherever applicable).
HDFC SLIC: HDFC Standard Life Insurance Company.
CHAPTER SCHEME
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CHAPTER 1Introduction.
PART-A: About industryPART-B: About subject
CHAPTER 2
Research Design.
CHAPTER 3Company Profile.
CHAPTER 4
Presentation and Analysis of Data & Interpretation.
CHAPTER 5
Summary of Findings, Suggestions and Conclusions.
BIBLIOGRAPHY
ANNEXURES
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COMPANY PROFILE
INTRODUCTION
HDFC Standard Life Insurance Company Ltd. is one of India's leading private life
insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture
between Housing Development Finance Corporation Limited (HDFC Ltd.), India's leading housing finance
institution and The Standard Life Insurance Company, a leading provider of financial services from the United
Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus
committed to being a long-term player in the life insurance industry.
HDFC standard life insurance company was started on 14th august 2000
and received a license 23rd October 2000.HDFC and Standard Life first came
together for a possible joint venture, to enter the Life Insurance market, in January
1995. It was clear from the outset that both companies shared similar values and
beliefs and a strong relationship quickly formed. In October 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. The next three years were
filled with uncertainty, due to changes in government and ongoing delays in getting
the IRDA (Insurance Regulatory and Development authority) Act passed in
parliament. Despite this both companies remained firmly committed to the venture. In
October 1998, the joint venture agreement was renewed and additional resource made
available. Around this time Standard Life purchased 2% of 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 inIndia.
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, in January 2000, an expert team from the UK joined a handpicked team
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from HDFC to form the core project team, based in Mumbai. Around this time
Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank.
In a further development Standard Life agreed to participate in the Asset
Management Company promoted by HDFC to enter the mutual fund market. The
Mutual Fund was launched on 20th July 2000.
Incorporation of HDFC Standard Life Insurance Company Limited:
The company was incorporated on 14th August 2000 under the name of
HDFC Standard Life Insurance Company Limited. Our ambition from as far back as
October 1995 was to be the first private company to re-enter the life insurance market
in India. On the 23rd of October 2000, this ambition was realized when HDFC
Standard Life was the only life company to be granted a certificate of registration.
HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while
Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC
Group, this is the maximum investment allowed under current regulations.
HDFC and Standard Life have a long and close relationship built upon shared
values and trust. The ambition of HDFC Standard Life is to mirror the success of the
parent companies and be the yardstick by which all other insurance companies in
India are measured.
HDFC has always been market-oriented and dynamic with respect to resource
mobilization as well as its lending programme. This renders it more than capable to
meet the new challenges that have emerged. Over the years, HDFC has developed a
vast client base of borrowers, depositors, shareholders and agents, and it hopes to
capitalize on this loyal and satisfied client base for future growth. Internal systems
have been developed to be robust and agile, to take into account changes in the
volatile external environment.
HDFC has developed a network of institutions through partnerships with some of the
best institutions in the world, for providing specialized financial services. Each
institution is being fine-tuned for a specific market, while offering the entire HDFC
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customer base the highest standards of quality in product design, facilities and
service.
HDFC is a professionally managed organization with a board of directors
consisting of eminent persons who represent various fields including finance,
taxation, construction and urban policy & development. The board primarily focuses
on strategy formulation, policy and control, designed to deliver increasing value to
shareholders.
Company Mission
The company aim to be the top new life insurance company in the market. This does
not just mean being the largest or the most productive company in the market; rather
it is a combination of several things like,
Customer service of the highest order.
Value for money for customers.
Professionalism in carrying out business.
Innovative products to cater to different needs of different customers.
Use of technology to improve service standards.
Increasing market share.
Company Values
SECURITY: Providing long term financial security to our policy
holders will be our constant endeavor. We will be do this by offering
life insurance and pension products. TRUST: We appreciate the trust placed by our policy holders in us.
Hence, we will aim to manage their investments very carefully and
live up to this trust.
INNOVATION: Recognizing the different needs of our customers, we
will be offering a range of innovative products to meet these needs.
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Their mission is to be the best new life insurance company in
India and these are the values that will guide them in this.
LOCATION
HDFC standard life insurance company limited operates its business through
its Branches The HDFC Standard Life Insurance company holding their main
Regional office in Mumbai.
CORPORATE OFFICE
HDFC Standard Life Insurance Company Limited,
IL&FS Financial Centre,
Plot C22 - G Block,
Bandra Karla Complex, Bandra (East),
Mumbai - 400 051.
Tel: 56932666
Website -hdfcinsurance.com
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OBJECTIVES
Spread Life Insurance 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 a reasonable cost.
Maximize mobilization of people's savings by making insurance-linked
savings adequately attractive.
Conduct business with utmost economy and with the full realization that the
moneys belong to the policyholders.
Act as trustees of the insured public in their individual and collective
capacities.
Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
Involve all people working in the Corporation to the best of their capability in
furthering the interests 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.
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VISION STATEMENT
The most successful and admired life insurance company, which mean 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
Integrity
Honest and truthful in every action.
Transparency.
Stick to principles irrespective of outcome.
Be just and fair to everyone.
Innovation
Building a store house of treasures through experiences.
Looking at every product and process through fresh eyes.
Customer centric
Understanding Customer expectations by keeping him as the centre-point.
Understanding customer needs and deliver solutions.
People care
Genuinely understanding the people we work with.
Create an environment of trust.
Guiding their development through training and support.
Know them on a personal front.
Respect for the time of others.
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Team work
Co-operate and support across departmental boundaries.
Identify strengths and weaknesses accordingly allocate responsibilities to
achieve common objectives.
Joy and Simplicity
Environment that fosters fun in the form of celebration of individual and
team success.
To encourage work as fun that contributed to personal and organizational
development.
Joy is also derived through simple processes and forms.
Being approachable, radiate simplicity and spreads a sense of joy. Moreover
leads to results.
ACHEIVEMENTS
Awards: 2008
Ms Renu Sud Karnad selected as the Best Woman Corporate Leader of the
Year by Business & Economy Magazine
HDFC selected as the top Indian company in FIs / NBFCs / Financial
Services Sector for the DUN & BRADSTREET - American Express
Corporate Awards 2007
Mr Deepak Parekh recognized by Finance Asia for his lifetime
achievements, at their Achievement Awards ceremony held in Hong Kong
on24thJan,2008.
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Awards: 2007
Mr Keki Mistry awarded the Best Performing CFO in the financial
services sector for 2007 by CNBC-TV 18
Business Today selects Renu Sud Karnad as a Powerful Woman in
Indian Business
HDFC emerged as the best 'Investment Management Company in India
at the Liquid Real Estate Awards 2007 organised by EUROMONEY
HDFC ranked 3rd amongst the Asian Banking and Finance Sector for
Highest Return on Equity by Asia money
Ms Renu Sud Karnad, Executive Director, was one of the eminent
women felicitated by the FICCI Ladies Organization at their Women
AchieversAward-2007
Awards: 2006
Mr Deepak Parekh, Chairman HDFC Ltd. awarded the Best Non
Executive Director 2006 by the Asian Centre for Corporate Governance
Mr Keki Mistry, Managing Director HDFC Ltd. awarded the Best
Performing CFO in the Financial Services Sector at the CNBC-TV18
CFO Awards 2006
HDFC won the award for 'Investment Management in India' at the
EUROMONEY 2006 Real Estate Awards
'Best Home Loan Provider' title at the Zee Business Pinnacle Awards,
2006
Limca Book of Records, 2006: HDFC for the landmark achievement of
Rs. One Lakh Crore
Best Strategy, at the 4Ps Business, Marketing & Advertising Power
Awards 2006
Dun & Bradstreet American Express Corporate Awards 2006
LORVEN COLLEGE OF SCIENCE AND MANAGEMENT Page 43
http://pop%28%27/news/cnbctv_kkmistry.htm');http://pop%28%27/news/cnbctv_kkmistry.htm');http://www.hdfc.com/we_awards.asp#%23http://www.hdfc.com/we_awards.asp#%23http://www.hdfc.com/we_awards.asp#%23http://pop%28%27/realestatte_awards.htm');http://pop%28%27/realestatte_awards.htm');http://pop%28%27/awardasiamoney_10042007.htm');http://pop%28%27/awardasiamoney_10042007.htm');http://pop%28%27/awardasiamoney_10042007.htm');http://pop%28%27/awardasiamoney_10042007.htm');http://pop%28%27/renu_karnad.htm')http://pop%28%27/renu_karnad.htm')http://pop%28%27/renu_karnad.htm')http://pop%28%27/renu_karnad.htm')http://pop%28%27/news/asawards_041206.htm')http://pop%28%27/news/asawards_041206.htm')http://pop%28%27/news/cfoawards_281106.htm')http://pop%28%27/news/cfoawards_281106.htm')http://pop%28%27/news/cfoawards_281106.htm')http://pop%28%27/news/euromoneyawards_171106.htm')http://pop%28%27/news/euromoneyawards_171106.htm')http://pop%28%27/news/euromoneyawards_171106.htm')http://pop%28%27/news/zeeawards_161106.htm');http://pop%28%27/news/zeeawards_161106.htm');http://pop%28%27/news/limca_161106.htm');http://pop%28%27/news/limca_161106.htm');http://pop%28%27/news/4p_161106.htm');http://pop%28%27/news/4p_161106.htm');http://pop%28%27/news/4p_161106.htm');http://pop%28%27/news/aeawards06.htm');http://pop%28%27/news/cnbctv_kkmistry.htm');http://pop%28%27/news/cnbctv_kkmistry.htm');http://www.hdfc.com/we_awards.asp#%23http://www.hdfc.com/we_awards.asp#%23http://pop%28%27/realestatte_awards.htm');http://pop%28%27/realestatte_awards.htm');http://pop%28%27/awardasiamoney_10042007.htm');http://pop%28%27/awardasiamoney_10042007.htm');http://pop%28%27/renu_karnad.htm')http://pop%28%27/renu_karnad.htm')http://pop%28%27/renu_karnad.htm')http://pop%28%27/news/asawards_041206.htm')http://pop%28%27/news/asawards_041206.htm')http://pop%28%27/news/cfoawards_281106.htm')http://pop%28%27/news/cfoawards_281106.htm')http://pop%28%27/news/cfoawards_281106.htm')http://pop%28%27/news/euromoneyawards_171106.htm')http://pop%28%27/news/euromoneyawards_171106.htm')http://pop%28%27/news/zeeawards_161106.htm');http://pop%28%27/news/zeeawards_161106.htm');http://pop%28%27/news/limca_161106.htm');http://pop%28%27/news/limca_161106.htm');http://pop%28%27/news/4p_161106.htm');http://pop%28%27/news/4p_161106.htm');http://pop%28%27/news/aeawards06.htm');7/28/2019 Main ProjectI
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Mr. Deepak Parekh, Chairman, HDFC Ltd. conferred with the
prestigious PadmaBhushanaward
Awards : 2005
HDFC receives award for 'The Best Presented Accounts' of The Institute
of Chartered Accountants of India for 2004-05
HDFC Ranked as Indias Third Best Managed Company by Finance
Asia 2005
Mr Deepak Parekh awarded the 'Hall of Fame' award by Outlook Money
magazine.
HDFC receives the 'Dream Home' award for the best Housing Finance
company for 2004 from Outlook Money magazine
Awards: 2004
Awards galore by HDFC at the 44th ABCI Awards!!!
5th Best Company to work for in India, ranked by Business Today in
November 2004
Economic Times Corporate Citizen of the Year Award, November 2004
Rated by Deutsche Bank as one of the top 5 banks/Financial Institutions
in Asia in October 2004
Ranked among the Top 20 companies to deliver healthiest returns to
shareholders, Outlook Money Magazine - September 2004
1st Prize at the New York Festival's Gold Midas Awards for
Environmental Communication Ad in August 2004
Features in the Forbes list of Top 20 Leading Indian Companies in May
2004.
One of the Top 10 Investor Friendly Companies, ranked by Business
Today in March 2004.
LORVEN COLLEGE OF SCIENCE AND MANAGEMENT Page 44
http://pop%28%27/padmabhushan0306.htm');http://pop%28%27/padmabhushan0306.htm');http://www.hdfc.com/we_awards.asp#%23http://www.hdfc.com/we_awards.asp#%23http://pop%28%27/16052005.htm')http://pop%28%27/16052005.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/abciaward131204.htm')http://pop%28%27/pdf/BestEmp.pdf');http://pop%28%27/pdf/BestEmp.pdf');http://pop%28%27/etaward021104.htm');http://pop%28%27/goldaward.htm');http://pop%28%27/goldaward.htm');http://pop%28%27/padmabhushan0306.htm');http://pop%28%27/padmabhushan0306.htm');http://www.hdfc.com/we_awards.asp#%23http://www.hdfc.com/we_awards.asp#%23http://pop%28%27/16052005.htm')http://pop%28%27/16052005.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/OutlookMoneyAwards.htm')http://pop%28%27/abciaward131204.htm')http://pop%28%27/pdf/BestEmp.pdf');http://pop%28%27/pdf/BestEmp.pdf');http://pop%28%27/etaward021104.htm');http://pop%28%27/goldaward.htm');http://pop%28%27/goldaward.htm');7/28/2019 Main ProjectI
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HDFC Ranked No. 3 - 'India's Best Managed Companies' by Finance
Asia
Awards: 2003
Clean Sweep by HDFC at the 43rd ABCI Awards!!!
National Award for Excellence In Corporate Governance by The Institute
of Company Secretaries of India
2nd Best Company for Corporate Governance in India by The Asset
magazine.
The Economic Times Lifetime Achievement Award - 2003. (For Mr.
Deepak Parekh - Chairman, HDFC Ltd.)
One of the Top Ten - Most Admired Companies in India ' - 2003 by
Business Barons
One of the Top Ten - Most Admired CEOs in India ' - 2003 by Business
Barons ( for Mr. Deepak Parekh )
India's Second Best Managed Company - 2003 by Finance Asia.
India's Biggest Wealth Creator in the banking and financial services by the
fourth Business Today - Stern Steward Survey.
One of the Top Ten - Most Respected Companies in India' by Business
world.
Highest rating for ' Governance and Value Creation ' by CRISIL.
One among the top ten ' Company Leaders in India' by the Far Eastern
Economic Review Survey.
Best Managed Financial Institution in India' by fox Pitt Survey.
LORVEN COLLEGE OF SCIENCE AND MANAGEMENT Page 45
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Board of Directors
Mr. D M Sukthankar
Mr. Deepak S Parekh - Chairman
Mr. Keshub Mahindra- Vice Chairman
Mr. Keki M Mistry - Vice Chairman &Managing Director
Ms. Renu S. Karnad - Joint Managing Director
Mr. Shirish B Patel
Mr. B S Mehta
Mr. D M Sukthankar
Mr. D N Ghosh
Dr. S A Dave
Mr. D M Sukthankar
Dr. Ram S Tarneja
Mr. N M Munjee
Dr. Jamshed J Irani
Mr. D M Satwalekar
HDFC has a staff strength of 1388 (as on 31st March, 2007), which
includes professionals from the fields of finance, law, accountancy, engineering and
marketing
Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive
Chairman of Housing Development Finance Corporation Limited (HDFC Limited).
He joined HDFC Limited in a senior management position in 1978. He was inducted
as a whole-time director of HDFC Limited in 1985 and was appointed as its
Executive Chairman in 1993. He is the Chief Executive Officer of HDFC Limited.
Mr. Parekh is a Fellow of the Institute of Chartered Accountants (England & Wales).
Mr. Keki M Mistry joined the Board of Directors of the Company in December,
2000. He is currently the Managing Director of HDFC Limited. He joined HDFC
Limited in 1981 and became an Executive Director in 1993. He was appointed as its
Managing Director in November, 2000. Mr. Mistry is a Fellow of the Institute of
Chartered Accountants of India and a member of the Michigan Association of
Certified Public Accountants.
LORVEN COLLEGE OF SCIENCE AND MANAGEMENT Page 46
http://www.hdfc.com/directors_detail.asp#sukthankarhttp://www.hdfc.com/directors_detail.asp#parekhhttp://www.hdfc.com/directors_detail.asp#mahindrahttp://www.hdfc.com/directors_detail.asp#mahindrahttp://www.hdfc.com/directors_detail.asp#mistryhttp://www.hdfc.com/directors_detail.asp#karnadhttp://www.hdfc.com/directors_detail.asp#patelhttp://www.hdfc.com/directors_detail.asp#mehtahttp://www.hdfc.com/directors_detail.asp#mehtahttp://www.hdfc.com/directors_detail.asp#sukthankarhttp://www.hdfc.com/directors_detail.asp#ghoshhttp://www.hdfc.com/directors_detail.asp#davehttp://www.hdfc.com/directors_detail.asp#sukthankarhttp://www.hdfc.com/directors_detail.asp#tarnejahttp://www.hdfc.com/directors_detail.asp#munjeehttp://www.hdfc.com/directors_detail.asp#iranihttp://www.hdfc.com/directors_detail.asp#satwalekarhttp://www.hdfc.com/directors_detail.asp#sukthankarhttp://www.hdfc.com/directors_detail.asp#parekhhttp://www.hdfc.com/directors_detail.asp#mahindrahttp://www.hdfc.com/directors_detail.asp#mistryhttp://www.hdfc.com/directors_detail.asp#karnadhttp://www.hdfc.com/directors_detail.asp#patelhttp://www.hdfc.com/directors_detail.asp#mehtahttp://www.hdfc.com/directors_detail.asp#sukthankarhttp://www.hdfc.com/directors_detail.asp#ghoshhttp://www.hdfc.com/directors_detail.asp#davehttp://www.hdfc.com/directors_detail.asp#sukthankarhttp://www.hdfc.com/directors_detail.asp#tarnejahttp://www.hdfc.com/directors_detail.asp#munjeehttp://www.hdfc.com/directors_detail.asp#iranihttp://www.hdfc.com/directors_detail.asp#satwalekar7/28/2019 Main ProjectI
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INVESTMENT OPPORTUNITIES IN LIFE INSURANCE
Mr. Alexander M Crombie joined the Board of Directors of the Company in April,
2002. He has been with the Standard Life Group for 34 years holding various senior
management positions. He was appointed as the Group Chief Executive of the
Standard Life Group in March 2004. Mr. Crombie is a fellow of the Faculty of
Actuaries in Scotland.
Ms. Marcia D Campbell is currently the Group Operations Director in the Standard
Life group and is responsible for Group Operations, Asia Pacific Development,
Strategy & Planning, Corporate Responsibility and Shared Services Centre. Ms.
Campbell joined the Board of Directors in November 2005.
Mr. Keith N Skeoch is currently the Chief Executive in Standard Life Investments
Limited and is responsible for overseeing Investment Process & Chief Executive
Officer Function. Prior to this, Mr. Skeoch was working with M/s. James Capel &
Co. holding the positions of UK Economist, Chief Economist, Executive Director,
Director of Controls and Strategy HSBS Securities and Managing Director
International Equities. He was also responsible for Economic and Investment Strategy
research produced on a worldwide basis. Mr. Skeoch joined the Board of Directors in
November 2005.
Mr. Gautam R Divan is a practising Chartered Accountant and is a Fellow of the
Institute of Chartered Accountants of India. Mr. Divan was the Former Chairman and
Managing Committee Member of Midsnell Group International, an International
Association of Independent Accounting Firms and has authored several papers of
professional interest. Mr. Divan has wide experience in auditing accounts of large
public limited companies and nationalised banks, financial and taxation planning of
individuals and limited companies and also has substantial experience in structuring
overseas investments to and from India.
Mr. Ranjan Pant is a global Management Consultant advising CEO/Boards on
Strategy and Change Management. Mr. Pant, until 2002 was a Partner & Vice-
President at Bain & Company, Inc., Boston, where he led the worldwide Utility
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INVESTMENT OPPORTUNITIES IN LIFE INSURANCE
Practice. He was also Director, Corporate Business Development at General Electric
headquarters in Fairfield, USA. Mr. Pant has an MBA from The Wharton School and
BE (Honours) from Birla Institute of Technology and Sciences.
Mr. Ravi Narain is the Managing Director & CEO of National Stock Exchange of
India Limited. Mr. Ravi Narain was a member of the core team to set-up the
Securities & Exchange Board of India (SEBI) and is also associated with various
committees of SEBI and the Reserve Bank of India (RBI).
Mr. Deepak M Satwalekar is the Managing Director and CEO of the Company
since November, 2000. Prior to this, he was the Managing Director of HDFC Limited
since 1993. Mr. Satwalekar obtained a Bachelors Degree in Technology from the
Indian Institute of Technology, Bombay and a Masters Degree in Business
Administration from The American University, Washington DC.
Ms. Renu S. Karnad is the Executive director of HDFC Limited, is a graduate in law
and holds a Master's degree in economics from Delhi University. She has been
employed with HDFC Limited since 1978 and was appointed as the Executive
Director in 2000. She is responsible for overseeing all aspects of lending operations.
THE STRATEGY
Too many options simply confuse the users where as too few will
surely turn them away. HDFC SLIC has thankfully introduced products with basic
premiums serving specific needs of all. Most products have some additional optional
value adding benefits at marginal additional premiums. The proponent is free to
choose any of the basic products along with none or some of the option as per his
needs.
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INVESTMENT OPPORTUNITIES IN LIFE INSURANCE
PRODUCTS PROFILE:
Individual Products
Each of us leads a unique life and so has unique needs. HDFC Standard Life
offers a range of products and invites you to choose the one that suits you best.
With Profits Endowment Assurance
This policy provides a combination of saving and life insurance. The sum
assured plus any bonuses will be payable at the end of the term or on death if earlier.
The customer commitment is to pay a level premium regularly throughout the life of
the policy. The Endowment Assurance can be customized to meet your needs by
adding any combination of up to_4 rider benefits.
The HDFCSL Endowment Assurance Plan gives you:
An ideal way to secure your long-term financial goals Valuable protection to
your family by way of lump sum payment in case of your unfortunate death within
policy term Provides lump sum payment (basic Sum Assured plus any bonus additions)
on survival up to maturity date Very flexible benefit options and payment options
In case of your unfortunate demise during the policy term, this participating (With
Profits) insurance plan will pay your family the Sum Assured (together with the
attached bonuses) you had chosen. The plan receives simple Reversionary Bonuses,
which are usually added annually. At the end