MEANING OF PORTFOLIO MANAGEMENT

8/7/2019 MEANING OF PORTFOLIO MANAGEMENT

1/57

Objective of studyWe had undertaken this study in the city of Ranchi for a period

of 1 month. During this period we interviewed 200 people to

find the following:

1. Knowledge of portfolio management

2. Present status insurance sector in india

3. Look at LIC and its various sehemes

4. Expected returns for customers

5. Customer preferences

6. Objective of their investments7. To study the influence and role of insurance companies in managing a portfolio

of both the companies.

1 | P a g e


2/57

RESEARCH METHODOLOGY

The plan of the study of portfolio management of Life Insurance Corporation. isdescribed as follows. The information has gathered from the two main sources of

data collection. They are-

1. Primary Data : it has been collected through the guidance of our trainer with through knowledge of life insurance and their terminology of product in

detail with each and every insurance products terms and tenure.

2. Secondary Data : it has been collected through the websites, books,magazines, newspaper, journals for collecting information regarding project

under study.

RESEARCH DESIGN

NON-PROBABILITY

EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH

The research is primarily both exploratory as well as descriptive in nature. The

sources of information are both primary & secondary. A well-structured questionnaire

was prepared and personal interviews were conducted to collect the customers

perception and buying behavior, through this questionnaire.

Sampling Technique :

Initially, a rough draft was prepared keeping in mind the objective of the research. A

pilot study was done in order to know the accuracy of the Questionnaire. The final

Questionnaire was arrived only after certain important changes were done. Thus my

sampling came out to be judgmental and convenient.

2 | P a g e


3/57

Sampling Unit:

The respondents who were asked to fill out questionnaires are the sampling units.

These comprise of employees of MNCs, Govt. Employees, Self Employed etc.

Sample size:

The sample size was restricted to only 40, which comprised of mainly peoples from

different regions of Chennai due to time constraints.

Sampling Area:

The area of the research was Ranchi, INDIA.

3 | P a g e


4/57

Contents:

4 | P a g e


5/57

Chapter 1:

Introduction

5 | P a g e


6/57

What is portfolio management:

A vital question in the product innovation battleground is,"How should corporations most effectively invest their R&Dand new product resources?" That is what portfoliomanagement is all about: resource allocation to achievecorporate new product objectives.Todays new productprojects decides tomorrow's product/market profile of thefirm. An estimated 50% of a firm's sales today come fromnew products introduced in the market within the previous

five years. Much like stock market portfolio managers,senior executives who optimize their R&D investments havea much better chance of winning in the long run. But howdo winning companies manage their R&D and productinnovation portfolios to achieve higher returns from theirinvestments? There are many different approaches with noeasy answers. However, it is a problem that every companyis addressing to produce and maintain leading edgeproducts. Portfolio management for new products is a

dynamic decision process wherein the list of active newproducts and R&D projects is constantly revised. In thisprocess, new projects are evaluated, selected, andprioritized. Existing projects may be accelerated, killed, orde-prioritized and resources are allocated (or reallocated) tothe active projects. Portfolio Management A Problem Area!Recent years have witnessed a heightened interest inportfolio management, not only in the technical community,but in the CEO's office as well. Despite its growing

popularity, recent benchmarking studies have identifiedportfolio management as the weakest area in productinnovation management. Management teams confess thatthere are rarely serious Go/Kill decision points and morespecifically, no criteria for making the Go/Kill decision. As aresult, companies are facing too many projects for thelimited resources available! Portfolio management is theselection and management of all of an organizationsprojects, programmers and related business-as-usual

activities taking into account resource constraints. Aportfolio is a group of projects and programmers carried out

6 | P a g e


7/57

under the sponsorship of an organization. Portfolios can bemanaged at an organizational, programmed or functionallevel. The process of managing the assets of a insurancepolicy or policy holder, including choosing and monitoringappropriate investments and allocating funds accordingly. Ithas often been said that portfolio management is not ascience, but an art. Certainly, the human factor manifestingin a portfolio managers ability to create outperformancebears out this truism.OBJECTIVES OF PORTFOLIO MANAGEMENT :

The objective of portfolio management is to invest insecurities is securities in such a way that one maximizesones returns and minimizes risks in order to achieve onesinvestment objective.A good portfolio should have multipleobjectives and achieve a sound balance among them. Anyone objective should not be given undue importance at thecost of others. Presented below are some importantobjectives of portfolio management.1. Stable Current Return: -

Once investment safety is guaranteed, the portfolio shouldyield a steady current income. The current returns should atleast match the opportunity cost of the funds of theinvestor. What we are referring to here current income byway of interest of dividends, not capital gains.2. Marketability: -A good portfolio consists of investment, which can bemarketed without difficulty. If there are too many unlistedor inactive shares in your portfolio, you will face problems inencasing them, and switching from one investment toanother. It is desirable to invest in companies listed onmajor stock exchanges, which are actively traded.3. Tax Planning: -Since taxation is an important variable in total planning, agood portfolio should enable its owner to enjoy a favorabletax shelter. The portfolio should be developed consideringnot only income tax, but capital gains tax, and gift tax, as

well. What a good portfolio aims at is tax planning, not taxevasion or tax avoidance.

7 | P a g e
http://www.mbaknol.com/investment-management/definition-of-portfolio-management/http://www.mbaknol.com/investment-management/what-is-investment-portfolio/http://www.mbaknol.com/investment-management/what-is-investment-portfolio/http://www.mbaknol.com/investment-management/definition-of-portfolio-management/


8/57

4. Appreciation in the value of capital:A good portfolio should appreciate in value in order toprotect the investor from any erosion in purchasing power

due to inflation. In other words, a balanced portfolio mustconsist of certain investments, which tend to appreciate inreal value after adjusting for inflation.5. Liquidity:

The portfolio should ensure that there are enough fundsavailable at short notice to take care of the investorsliquidity requirements. It is desirable to keep a line of creditfrom a bank for use in case it becomes necessary toparticipate in right issues, or for any other personal needs.6. Safety of the investment:

The first important objective of a portfolio, no matter whoowns it, is to ensure that the investment is absolutely safe.Other considerations like income, growth, etc., only comeinto the picture after the safety of your investment isensured.Investment safety or minimization of risks is one of the important objectives of portfolio management. Thereare many types of risks, which are associated with

investment in equity stocks, including super stocks. Bear inmind that there is no such thing as a zero risk investment.More over, relatively low risk investment givecorrespondingly lower returns. You can try and minimize theoverall risk or bring it to an acceptable level by developinga balanced and efficient portfolio. A good portfolio of growthstocks satisfies the entire objectives outline above.

8 | P a g e


9/57

Scope of Portfolio Management:-Portfolio management is a continuous process. It is a dynamicactivity. The following are the basic operations of a portfolio

management.a) Monitoring the performance of portfolio by incorporatingthe latest market conditions.b) Identification of the investors objective, constraints andpreferences.c) Making an evaluation of portfolio income (comparison withtargets and achievement).d) Making revision in the portfolio.

e) Implementation of the strategies in tune with investmentobjectives.

9 | P a g e


10/57

THE INSURANCE SECTOR IN INDIA :

With an annual growth rate of 15-20%, the potential of theIndian insurance industry is huge. The insurance and bankingservices' contribution to the country's GDP is 12% out of whichthe gross premium collection forms a significant part. The fundsavailable with the state-owned Life Insurance Corporation (LIC)for investments are 9% of GDP.

Till date, only 25% of the total insurable population of India iscovered under various life insurance schemes, the penetrationrates of health and other non-life insurances in India is also wellbelow the international level. These facts indicate the of immense growth potential of the insurance sector.

The year 1999 saw a revolution in the Indian insurance sector,as major structural changes took place with the ending of government monopoly and the passage of the Insurance

Regulatory and Development Authority (IRDA) Bill, lifting allentry restrictions for private players and allowing foreignplayers to enter the market with some limits on direct foreignownership.

Though, the existing rule says that a foreign partner can hold26% equity in an insurance company, a proposal to increasethis limit to 49% is pending with the government. Innovativeproducts, smart marketing, and aggressive distribution have

enabled fledgling private insurance companies to sign up Indiancustomers faster than anyone expected. Indians, who hadalways seen life insurance as a tax saving device, are nowsuddenly turning to the private sector and snapping up the newinnovative products on offer.

There are presently 12 general insurance companies with fourpublic sector companies and eight private insurers. Accordingto estimates, private insurance companies collectively have a

10 | P a g e


11/57

10% share of the non-life insurance market. The major Indiancompanies venturing into insurance business are:

- Life Insurance Corporation of India- ICICI Prudential Life Insurance- Birla Sun Life Insurance- Bajaj Allianz Life Insurance- TATA-AIG Life Insurance- AVIVA Life Insurance- ING VYSYA Life Insurance- HDFC-STD Life Insurance

CHAPTER 2.LIFE INSURANCE

CORPORATION OFINDIA.

11 | P a g e


12/57

COMPANY PROFILE OF LIFE INSURANCECOMPANY OF INDIA LTD :

LIC was established on 1st September, 1956. It is the largestlife insurance company in India and the country's largestinvestor. It is fully owned by the Government of India. It alsofunds close to 24.6% of the Indian Government's expenses. ItsHeadquarter is in Mumbai the LIC currently has 8 zonal Officesand 101 divisional offices located in different parts of India,2048 branches located in different cities and towns of Indiaalong with 500 satellite Offices attached to about some 50Branches, and has a network of around one million and 200thousand agents for soliciting life insurance business from thepublic. Indian Insurance Industry has conceived Life InsuranceIndustry . LICs corporate office is in Mumbai and it is headed bychairman along with 3 Executives directors who are in chargeof their portfolios. LICS Zonal Office is located at various zonesin India. One of the most important South Central Zone of LIC islocated at Hyderabad. Zonal Office is headed by Zonal Managerand his/her team. LICS Divisional Office is the 3 rd in theadministrative system and it is headed by person called asSenior Divisional Manager. Each Branch Office is headed by aManager and in some of the branches also have the concept of Chief Manager, having his team of Development Officers andAgents to do the business At the Administrative Level LIC has aemployee force of 2, 00,000 at various designations. At theMarketing Force LIC works with 12, 0, 000, Agents and 2,00,000 Development Officers for achieving its target. LIC MFstarted in the year 1989 on 19 th June with a corpus of 2, 00,00,000. LIC in the mutual fund industry has got around 50funds. LIC on Mutual Funds set up has got 4 IndependentDirectors for running the admin.LIC HFL has also started Public Deposit Schemes. LIC HFL

12 | P a g e


13/57

promotes Housing Finance for purchase of apartments orindependent flats. LIC also has share pattern as it invests inhousing finance.LIC introduced health insurance in the year 2008 with HealthPlus as its product. Health Plus is a product of health + stockmarket. Health Insurance has got health benefits such as MSB

and HCB and also stock market.

AWARDS AND ACHIVEMENT:

Awards Received in 2010-11

CNBC Awaz Consumer Award ET Brand Equity Award for Top Brand in Insurance

Category

Outlook Money Award for Best Life Insurer AIMA High Performance Award

13 | P a g e


14/57

Readers Digest Trusted Brand Golden Peacock Award for Corporate Governance

CHAPTER-3FINANCIAL PRODUCTOF LIC:

14 | P a g e


15/57

15 | P a g e


16/57

WHOLE LIFE PLAN:- This plan is mainly devised to create an estate for the heirs of

the policy holder 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 inthe 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 of

45 years whichever is later.

Suitable For : This policy is suitable for people of all ages who wish to protect

their families from financial crises that may occur owing to the

policyholders premature death.

BENEFIT S:

The illustrations are based on the investment rates of return set

by the Life Insurance Council (constituted under Section 64C(a)of the Insurance Act 1938) and is not intended to reflect the

actual investment returns achieved or may be achieved in

future LIC. For the year 2009-10 the two rates of investment

return declared by the Life Insurance Council are 10% and 12%

per annum .

16 | P a g e


17/57

PRODUCT SUMMARY : This is a whole of life assurance plan that provides financial

protection against death throughout the lifetime of the Life

Assured.

PREMIUMS:

Under Table No.2 & 5 the premiums are payable yearly, half-

yearly, quarterly, monthly or through Salary deductions, as

opted by you. Under Table No 8 the premium is payable in one

lump sum (Single Premium ).

BONUSES:

This is a with-profit plan and participates in the profits of the

Corporations life insurance business. It gets a share of the

profits in the form of bonuses. Simple

Reversionary Bonuses are declared per thousand Sum Assured

annually at the end of each financial year. Once declared, they

form part of the guaranteed benefits of the plan. A

Final (Additional) Bonus may also be payable provided

a policy has run for certain minimum period.

Death Benefit:

The Sum assured plus all bonuses to date is payable in a lump

sum upon the death of the life assured.

Maturity Benefit :It does not have a maturity date. However, have the options to

take the Sum assured plus all bonuses declared under the

policy anytime after 40 years from the date of commencement

of the policy provided you have attained 80.

Supplementary/Extra Benefits:

17 | P a g e


18/57

These are the optional benefits that can be added to your basic

plan for extra protection/option.

Surrender Value:Buying a life insurance contract is a long-term commitment.

However, surrender value is available under the plan on earlier

termination of the plan.

The policy may be surrendered after it has been in force for 3

years or more .

CORPORATIONS POLICY ON SURRENDERS:

In practice, the Corporation will pay a Special Surrender Value

which is either equal to or more than the Guaranteed Surrender

Value. The benefit payable on surrender reflects the discounted

value of the reduced claim amount that would be payable on

death.

SURVIVAL BENEFIT :Sum assured plus accrued bonuses and the terminal bonuses, if

any, on the policyholder attaining age 80 years or on expiry of

term of 40 years from the date of commencement of the policy

whichever is later.

DEATH BENEFIT :

Sum assured plus accrued bonuses and the terminal bonuses, if

any, on the death of the policyholder are paid to his/her

nominees/heirs .

BENEFIT ILLUSTRATION

Table No 2Age at entry: 35 yearsSum Assured: Rs.1,00,000/-Premium Paying term: 45 years

18 | P a g e


19/57

Mode of premium payment: YearlyAnnual Premium: Rs.2917/-

Table No 5Age at entry: 35 yearsSum Assured: Rs.1,00,000/-Premium Paying term: 15 yearsMode of premium payment: YearlyAnnual Premium: Rs.4,444/-

19 | P a g e

Endof yea

r

Totalpremiums paidtill endof year

Benefit payable on death / maturity at theend of year

Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 2917 100000 3900 10800 103900 110800

5 14585 100000 19500 54000 119500 154000

10 29170 100000 39000 108000 139000 208000

15 43755 100000 58500 162000 158500 262000

20 58340 100000 104000 288000 204000 388000

25 72925 100000 130000 360000 230000 460000

30 87510 100000 156000 432000 256000 532000

35 102095 100000 182000 504000 282000 604000

40 116680 100000 208000 576000 308000 676000

45 131265 100000 234000 648000 334000 748000


20/57

Note: This illustration is applicable to non-smoker standard(from medical, life style and occupation point of view) life.Thenon-guaranteed benefits (1) and (2) in above illustration iscalculated so that they are consistent with the ProjectedInvestment Rate of Return assumption of 6% p.a. (Scenario 1)and 10% p.a. (Scenario 2) respectively as the case may be. Themain objective of the illustration is that the client is able toappreciate the features of the product and the flow of benefitsin different circumstances with some level of quantification.

The Maturity Benefit is the amount shown at the end of 45years.

MONEY BACK PLANS (20 YEARS):

20 | P a g e

Endof

year

Totalpremiums paid till

end of

year

Benefit payable on death / maturity at the endof year

Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 4444 100000 3900 10800 103900 110800

5 22220 100000 19500 54000 119500 154000

10 44440 100000 39000 108000 139000 208000

15 66660 100000 58500 162000 158500 262000

20 66660 100000 104000 288000 204000 388000

25 66660 100000 130000 360000 230000 460000

30 66660 100000 156000 432000 256000 532000

35 66660 100000 182000 504000 282000 604000

40 66660 100000 208000 576000 308000 676000

45 66660 100000 234000 648000 334000 748000


21/57

Unlike ordinary endowment plans where the survival benefitsare payable only at the end of the endowment period, thisscheme provides for periodic payments of partial survivalbenefits as follows during the term of the policy, of course so

long as the policy holder is alive. In the case of a 20-yearMoney-Back Policy (Table 75), 20% of the sum assuredbecomes 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 (Table 93), 15% of the sumassured becomes payable each after 5, 10, 15 and 20 years,and the balance 40% plus the accrued bonus become payableat the 25th year. An important feature of this type of policies isthat in the event of death at any time within the policy term,

the death claim comprises full sum assured without deductingany of the survival benefit amounts, which have already beenpaid. Similarly, the bonus is also calculated on the full sumassured.BENEFITS:-Insurance Regulatory & Development Authority (IRDA) requiresall life insurance companies operating in India to provide officialillustrations to their customers. The illustrations are based onthe investment rates of return set by the Life Insurance Council(constituted under Section 64C(a) of the Insurance Act 1938)and is not intended to reflect the actual investment returnsachieved or may be achieved in future by Life InsuranceCorporation of India (LICI).For the year 2004-05 the two rates of investment returndeclared by the Life Insurance Council are 6% and 10% perannum.

PREMIUMS:-Premiums are payable yearly, half-yearly, quarterly, monthly or

through salary deductions as opted by you throughout the term

of the policy, or till the earlier death. This is a with-profit plan

and participates in the profits of the Corporations life insurance

business. It gets a share of the profits in the form of bonuses.

Simple Reversionary Bonuses are declared per thousand Sum

21 | P a g e


22/57

Assured annually at the end of each financial year. Once

declared, they form part of the guaranteed benefits of

the plan. Final (Additional) Bonus may

SURVIVAL BENEFITS:

The percentage of Sum Assured as mentioned below will be

paid on survival to the end of specified durations:

% of Sum Assured paid at the end of specifiedduration

DurationPlan

75 935 20% 15%

10 20% 15%15 20% 15%20 40% 15%25 - 40%

All bonuses declared up to the maturity date will also be paid

along with the final survival benefit.

Supplementary/Extra Benefits:

These are the optional benefits that can be added to your basicplan for extra protection/option. An additional premium is

required to be paid for these benefits.

Surrender Value:

Buying a life insurance contract is a long-term commitment.

However, surrender values are available under the plan on

earlier termination of the contract.

22 | P a g e


23/57

Plan/ Term 75/ 20 Years 93/ 25 YearsAt the end of 5

years 20% 15%

At the end of 10years 20% 15%

At the end of 15years 20% 15%

At the end of 20years

balance 40% +bonus 15%

At the end of 25years NIL

balance 40% +bonus

Age at entry : 35 yearsPolicy Term : 20 YearsMode of premium payment : YearlySum Assured : Rs. 1,00,000 /-Annual Premium : Rs. 6564 /-

23 | P a g e

End

of year

Total

premiums paid till

end of year

Benefit on Death during the year (Rs.)

Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario2

1 6564 100000 2400 4800 102400 104800

5 32820 100000 12000 24000 112000 124000

10 65640 100000 24000 48000 124000 148000

15 98460 100000 36000 72000 136000 172000

20 131280 100000 48000 96000 148000 196000


24/57

Age at entry: 35 yearsPolicy Term: 25 YearsMode of premium payment: YearlySum Assured: Rs. 1, 00,000 /-Annual Premium: Rs. 5507 /-

24 | P a g e

Endof

year

Totalpremiums

paid tillend of

year

Benefit on survival / maturity at the end of year

Guaranteed

Variable Total

Scenario1

Scenario2

Scenario1

Scenario2

1 6564 0 0 0 0 0

5 32820 20000 0 0 20000 20000

10 65640 20000 0 0 20000 20000

15 98460 20000 0 0 20000 2000020 131280 40000 53000 106000 93000 146000

Endof

year


end of year


Guaranteed

Variable Total

Scenario1

Scenario 2

Scenario1

Scenario2

1 5507 100000 2700 4800 102700 1058005 27535 100000 13500 24000 113500 129000

10 55070 100000 27000 48000 127000 158000

15 82605 100000 40500 72000 140500 187000

20 110140 100000 54000 116000 154000 216000


25/57

Note: This illustration is applicable to a non-smoker

male/female standard (from medical, life style and occupation

point of view) life. The non-guaranteed benefits (1) and (2) in

above illustration are calculated 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. Themain objective of the illustration is that the client is able to

appreciate the features of the product and the flow of benefits

in different circumstances with some level of quantification.

Future bonus will depend on future profits and as such is not

guaranteed. However, once bonus is declared in any year and

added to the policy, the bonus so added is guaranteed.

25 | P a g e

Endof

year

Totalpremiums

paid tillend of year


Guaranteed

Variable Total

Scenario1

Scenario2

Scenario1

Scenario2

1 5507 0 0 0 0 0

5 27535 15000 0 0 15000 15000

10 55070 15000 0 0 15000 15000

15 82605 15000 0 0 15000 15000

20 110140 15000 0 0 15000 15000


26/57

THE MONEY BACK POLICY-25 YEARS :Unlike ordinary endowment insurance plans where the survivalbenefits are payable only at the end of the endowment period,this scheme provides for periodic payments of partial survivalbenefits as follows during the term of the policy, of course solong as the policy holder is alive. In the case of a 20-yearMoney-Back Policy (Table 75), 20% of the sum assuredbecomes 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 (Table 93), 15% of the sumassured becomes payable each after 5, 10, 15 and 20 years,and the balance 40% plus the accrued bonus become payableat the 25th year.BONUSES:

This is a with-profit plan and participates in the profits of the

Corporations life insurance business. It gets a share of the

profits in the form of bonuses. Simple Reversionary Bonuses

are declared per thousand Sum Assured annually at the end of

each financial year. Once declared, they form part of the

guaranteed benefits of the plan. Final (Additional) Bonus may

also be payable provided policy has run for certain minimum

period. The Sum assured plus all bonuses to date is payable in

a lump sum upon the death of the life assured during the policy

term irrespective of the Survival benefit /benefits paid earlier.

Survival Benefits: The percentage of Sum Assured as mentioned below will bepaid on survival to the end of specified durations:

26 | P a g e


27/57

% of Sum Assured paid at the end of specifiedduration

DurationPlan

75 935 20% 15%10 20% 15%15 20% 15%20 40% 15%25 - 40%

All bonuses declared upto the maturity date will also be paid

along with the final survival benefit.Supplementary/Extra Benefits :

These are the optional benefits that can be added to your basic

plan for extra protection/option. An additional premium is

required to be paid for these benefits.

Surrender Value :

Buying a life insurance contract is a long-term commitment.However, surrender values are available under the plan on

earlier termination of the contract.

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3

years or more. The guaranteed surrender value is 30% of the

basic premiums paid excluding the first years premium and allsurvival benefits paid earlier.

Corporations policy on surrenders:

In practice, the Corporation will pay a Special Surrender Value

which is either equal to or more than the Guaranteed Surrender

Value. The benefit payable on surrender is the discounted valueof the reduced claim amount that would be payable on death or

27 | P a g e


28/57

at maturity. This value will depend on the duration for which

premiums have been paid and the policy duration at the date of

surrender

Benefit Illustration:

Age at entry: 35 yearsPolicy Term: 20 YearsMode of premium payment: YearlySum Assured: Rs. 1, 00,000 /-Annual Premium: Rs. 6564 /-

28 | P a g e

Endof

year


end of year


Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 6564 100000 2400 4800 102400 104800

5 32820 100000 12000 24000 112000 124000

10 65640 100000 24000 48000 124000 148000

15 98460 100000 36000 72000 136000 172000

20 131280 100000 48000 96000 148000 196000


29/57

Age at entry: 35 yearsPolicy Term: 25 YearsMode of premium payment: Yearly

Sum Assured: Rs. 1, 00,000 /-Annual Premium: Rs. 5507 /-

Endof

year


end of year


Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 5507 100000 2700 4800 102700 105800

5 27535 100000 13500 24000 113500 129000

10 55070 100000 27000 48000 127000 158000

15 82605 100000 40500 72000 140500 187000

20 110140 100000 54000 116000 154000 216000

29 | P a g e

Endof

year

Totalpremiums paidtill end

of year


Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 6564 0 0 0 0 0

5 32820 20000 0 0 20000 20000

10 65640 20000 0 0 20000 20000

15 98460 20000 0 0 20000 20000

20 131280 40000 53000 106000 93000 146000


30/57

note: This illustration is applicable to a non-smoker

male/female standard (from medical, life style and occupation

point of view) life. The non-guaranteed benefits (1) and (2) in

above illustration are calculated 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. The

main objective of the illustration is that the client is able to

appreciate the features of the product and the flow of benefits

in different circumstances with some level of quantification.

Future bonus will depend on future profits and as such is not

30 | P a g e

Endof

year


end of year


Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 5507 0 0 0 0 0

5 27535 15000 0 0 15000 15000

10 55070 15000 0 0 15000 15000

15 82605 15000 0 0 15000 15000

20 110140 15000 0 0 15000 15000


31/57

guaranteed.

UNIT LINKED INSURANCE PLAN :

A) FORTUNE PLUS:-It is a unit linked assurance plan where premium payment term(PPT) is 5 years and the premium payable in the first year willbe 50% of total premium payable under the policy. The level of cover will depend on the level of premium you agree to pay.Four types of investment funds are offered. Premiums paidafter allocation charge will purchase units of the Fund typechosen. The Unit Fund is subject to various charges and valueof the units may increase or decrease, depending on the NetAsset Value (NAV).Payment of Premiums:

You may pay premiums regularly at yearly, half-yearly,quarterly or monthly (ECS) intervals for 5 years. The minimumFirst year premium will be Rs.20,000/- and you may pay anyamount exceeding it. From second year onwards each yearspremium will be 25% of the first year premium.

Other Features:i) Partial Withdrawals: You may sell the units partially afterthe third policy anniversary subject to the following:

In case of minors, partial withdrawals shall be allowedfrom the policy anniversary coinciding with or nextfollowing the date on which the life assured attainsmajority (i.e. on or after18th birthday).

Partial withdrawals may be in the form of fixed amountor in thfixed number of units.

For 2 years period from the date of withdrawal, theSum Assured under the Basic plan shall be reduced tothe extent of the amount of withdrawals.

ii)Switching: You can switch between any fund types for theentire Fund Value during the policy term subject to switchingcharges,if any.

31 | P a g e


32/57

iii) Discontinuance of premiums: If premiums are payableeither yearly, half-yearly, quarterly or monthly (ECS) and thesame have not been duly paid within the days of grace underthe Policy, the Policy will lapse. A lapsed policy can be revived

during the period of two years from the due date of first unpaidpremium. The benefits payable under the policy in different contingenciesduring this period shall be as under: In case of Death: Higher of Sum Assured under the Basic

Plan or the Policyholders Fund Value. The Sum Assured shallbe subject to provisions of Partial Withdrawals made, if any.

In case of Death due to accident: Accident Benefit Sum

Assured in addition to the amount under A above, if AccidentBenefit is opted for.

C. On Maturity: The Policyholders Fund Value. In case of Surrender (including Compulsory Surrender): The

Policyholders Fund Value. The Surrender value, however,shall be paid only after the completion of 3 policy years.

In case of Partial Withdrawals: For 2 years period from thedate of withdrawal, the sum assured under the basic planshall be reduced to the extent.

In case of Death: The Policyholders Fund Value. In case of death due to accident: Only, the amount as under

F above.iv) Revival: If due premium is not paid within the days of grace,the policy lapses. A lapsed policy can be revived during theperiod of two years from the due date of first unpaid premiumor before maturity, whichever is earlier. The period during

which the policy can be revived will be called Period of revival

Benefits :A) Death Benefit: Higher of Sum Assured or the PolicyholdersFund Value shall be available as death benefit.B) Maturity Benefit : On the Life Assured surviving the maturitydate of the contract, an amount equal to the PolicyholdersFund Value is payable.

Options :

32 | P a g e


33/57

If you are above 18 years of age, you may opt for AccidentBenefit equal to the amount of life cover subject to minimum of Rs. 25,000/- and maximum of Rs. 50 lakh (taken all policieswith LIC of India and other insurers). In case of death by

Accident, an additional sum equal to Accident Benefit sumassured shall be payable.Eligibility Conditions and Other Restrictions:

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 allotment. There is no Bid-Offer spread (the Bid

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

33 | P a g e

(a) Minimum Age atentry 12 years (age last birthday)

(b) Maximum Age atentry 60 years (age nearer birthday)

(c) Minimum MaturityAge 18 years (completed)

(d) MaximumMaturity Age 65 years (age nearer birthday)

(e) Minimum Policy Term 5 years

(f) Maximum Policy Term 20 years

(g) MinimumPremium Rs.20,000/- for first Premium

(h) Sum Assuredunder the Basic

Plan

Higher of 5 times the first yearsannualized premium or half of the policyterm times the first years annualizedpremium.


34/57

NAV will be computed on daily basis and will be based on

investment performance.

Investment of Funds:

Plan offers following four Funds detailed below:

FundType

InvestmentinGovernment/Government

GuaranteedSecurities /CorporateDebt

Short-termInvestmentsuch asmoneymarketInstruments

(IncludingGovt.Securities &CorporateDebt)

Investment inListed

EquityShares

Detailsandobjectiveof the

fund forrisk/return

BondFund

Not less than60% 100% Nil Low risk

SecuredFund

Not less than45% Not more than85%

Not lessthan 15%& Notmore than55%

SteadyIncome -Lower toMediumrisk

BalancedFund

Not less than30%

Not more than70%


BalancedIncomeandgrowth -Mediumrisk

GrowthFund

Not less than20%

Not more than60%


Long termCapitalgrowth -High Risk

CHARGES UNDER THE PLAN:-

34 | P a g e


35/57

A) Premium Allocation Charge: This is the percentage of thepremium deducted from the premium received. The balanceconstitutes that part of the premium which is utilized topurchase (Investment) units for the policy.

The allocation charges are as below

Premium Band (per annum)Allocation Charge

First year thereafter20,000 to 2,00,000 15.00 % 2.50 %2,00,001 to 3,00,000 14.50 % 2.50 %3,00,001 to 6,00,000 13.00 % 2.50 %6,00,001 and above 13.50 % 2.50 %

B)Charges for Risk Covers:i) Mortality Charge - This is the cost of life insurance coverwhich is age specific and will be taken every month. The lifeinsurance cover is the difference between Sum Assured underBasic plan and the Fund Value after deduction of all othercharges. The charges per Rs. 1000/- life insurance cover forsome of the ages in respect of a healthy life are as under:

Age 25 35 45 55

Rs. 1.42 1.73 3.89 10.76ii) Accident Benefit Charge - It is the cost of Accident Benefitrider (if opted for) and will be levied every month at the rate of Rs. 0.50 per thousand Accident Benefit Sum Assured per policyyear.C) Other Charges:

i) Policy Administration Charge - Rs. 60/- per month during the

first policy year and Rs. 20/- per month thereafter, throughoutthe term of the policy.

ii) Fund Management Charge - It is the charge levied as a

percentage of the value of units at following rates:

0.75% p.a. of Unit Fund for Bond Fund

1.00% p.a. of Unit Fund for Secured Fund

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

35 | P a g e


36/57

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

Fund Management Charge shall be appropriated while

computing NAV.

iii) Switching Charge - This is a charge levied on switching of

monies from one fund to another. Within a given policy year 4

switches will be allowed free of charge. Subsequent switches in

that year shall be subject to a switching charge of Rs. 100 per

switch.

iv) Bid/Offer Spread - Nil.

v) Surrender Charge - Nil.vi) Service Tax Charge - A service tax charge shall be levied on

the Mortality Charges and Accident Benefit rider charges, if

any, on a monthly basis. The level of this charge will be as per

the rate of service tax as applicable from time to time.

Presently, the rate of Service Tax is 12% with an educational

cess at the rate of 3% thereon and hence effective rate is12.36%.

vii) Miscellaneous Charge - This is a charge levied for an

alteration within the contract, such as reduction in policy term,

change in premium mode, etc. An alteration may be allowed

subject to a charge of Rs.50/-.

D) Right to revise charges: The Corporation reserves theright to revise all or any of the above charges except the

Premium Allocation charge and Mortality charge. The

modification in charges will be done with prospective effect

with the prior approval of IRDA.

Surrender:

36 | P a g e


37/57


38/57

Scenario 1Scenario 2

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 20000 200000 1673217384

200000

200000 0 0

5 40000 200000 3951845692

200000

200000

39518 45692

10 40000 200000 4592465433

200000

200000

45924 65433

15 40000 200000 5251194702

200000

200000

52511 94702

20 40000 200000 58090138809

200000

200000

58090

138809

CHILDREN PLANS:

1) CHILD FORTUNE PLUS:All of us wish to ensure the best possible future for ourchildren. With the cost of education sky rocketing, it is allthe more important that an early provision is made toensure that your loved ones get a good head start in life.LICs Child Fortune Plus is a total solution to theireducation and other needs. The plan is a unit linked oneoffering the prospects of long term capital appreciation.

Benefits:

On Maturity: The maturity benefit will be payable on theearlier of; either the child attaining 25 years of age or the life

assured attaining 75 years. On the date of maturity, an amountequal to the policy holder`s fund value is payable. On Death:In the unfortunate event of death of the policy holder, thenominee child will be paid the Sum Assuredunder the policy. Further all futurepremiums will be waived and units equivalent thereof shallbe credited to the policy fund account at the applicable unitprice.

Partial Withdrawal/Surrender:

38 | P a g e


39/57

A Policyholder can partially withdraw the units at any time afterthe third policy anniversary subject to certain conditions. Therewill be no bid offer spread i.e. the sale and purchase price of units will be the same. The NAV shall be declared on day to day

basis.Premium Payment options: The policy can be taken under the lumpsum option or theregular premium option. ECS payment is also available.Revival :In case the policy is lapsed, it can be revived within a period of 2 years (Revival Period), from the date of First Unpaid Premium.If the premiums have been paid for a minimum period of threeyears, the Life cover will continue during the Revival Period. Aunique feature of the plan is that a policyholder can opt for

continuation of cover even beyond the Revival Period, withoutreviving the policy or paying any further premiums byexercising the option at least one month prior to the completionof the Revival Period. The policy cover continues by deductionof relevant charges from the policy fund till the fund valuereaches one annualized premium.2.) CHILDREN DEFFRED ENDOWEMENT ASSURANCEPLANS:-

This is an Endowment Assurance plan designed to enable aparent or a legal guardian or any near relative of the child(called proposer) to provide insurance cover on the life of thechild (called life assured). The plan has two stages, onecovering the period from the date of commencement of policyto the Deferred Date (called deferment period) and the othercovering the period from the Deferred In case of Plan No 50 it isthe policy anniversary date coinciding with or next following the18th birthday of the child Date to the date of maturity. Theinsurance cover on the childs life starts from the Deferred Dateand is available during the latter period. The Deferred Date incase of Plan No 41 is the policy anniversary date coincidingwith or next following the date on which the child completes 21years of age.

Premiums :Premiums are payable yearly, half-yearly, quarterly or monthlyand this shall cease on the death of the lifeassured . Premiums are waived on death of Proposer provided this benefit is availed.

39 | P a g e


40/57

Bonuses :It gets a share of the profits in the form of bonuses. SimpleReversionary Bonuses are declared per thousand Sum Assured

annually at the end of each financial year. Once declared, theyform part of the guaranteed benefits of the plan.Death Benefit:

The Sum Assured along with vested bonuses is payable in alump sum upon the death of the life assured afterthe defrayments period. If death occurs before thedefrayments period all premiums paid is refunded.

Maturity Benefit:Sum assured along with all bonuses declared up to maturitydate is payable in lump sum.

Surrender Value:Buying a life insurance is a long-term commitment. However,

surrender values are available on the plan on earlier

termination of the contract.

Benefit Illustration:

Table 41Age at entry: 10 yearsPolicy Term: 25 Years Deferment period: 11 yearsPremium Paying Term: 25 YearsMode of premium payment: Yearly

Sum Assured: Rs. 1, 00,000 /-Annual Premium: Rs. 2673 /-

40 | P a g e


41/57

41 | P a g e

Endof

year


end of

year

Benefit payable on death / maturity at the endof year

Guaranteed

Variable Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1 2673 2673 - - 2673 2673

5 13364 13364 - 13364 13364

10 26728 26728 - - 26728 26728

15 40092 100000 8400 22000 108400 122000

20 53456 100000 18900 49500 118900 149500

25 66819 100000 46400 122000 146400 222000


42/57

Table 50Age at entry: 10 years

Policy Term: 25 Years Deferment period: 8 yearsPremium Paying Term: 25 YearsMode of premium payment: YearlySum Assured: Rs. 1,00,000 /-Annual Premium: Rs. 2924 /-

42 | P a g e

Endof

year

Totalpremiums

paid tillend of year

Benefit payable on death / maturity at the end of year

Guaranteed

Variable Total

Scenario1

Scenario2

Scenario1

Scenario2

1 2924 2924 - - 2924 2924

5 14620 14620 - 14620 14620

10 29240 100000 4200 11000 104200 111000

15 43859 100000 14700 38500 114700 138500

20 58479 100000 25200 66000 125200 166000

25 73099 100000 46700 124500 146700 224500


43/57

GROUP INSURANCE :

1) GROUP GRATUITY SCHEME:-Under the Payment of Gratuity Act, 1972, it is employers

statutory liability to pay 15 days salary (15/26 of a month's

wages) for every completed years service to each of his

employees on their exit, for any reason after five years of

continuous service, subject to maximum limit of 3.5 lacs.

Higher benefits can be paid if the employer so desires. Gratuity

payable to the employees can be paid as and when liability

arises and can be claimed as deductable expense under P & L

A/c of the relevant financial years. However, the sound system

of financial management envisages providing for Gratuity

liability every year and claiming the tax benefits as it is

mandatory as per Accounting Standards 15 (AS15) to account

for the liability on Actual basis.

ATTRACTIVE RETURN:1. LIC offers a very attractive rate of interest depending upon

the size of the fund

2. Employers ordinary annual contribution is allowed asdeduction in full in computation of business income as perSection 36(1) (v).

3. Employer's initial contribution: No. limit on amount as per

Rule 104.It is to be paid on the date of setting up of fund

in full or in 5 yearly equated installments from such date.

4. Benefits to employees Employer's initial and ordinary

annual contribution are not treated as taxable perquisites.

43 | P a g e


44/57

5. Gratuity is salary and hence taxable, it is taxed under Sec.17(i) (iii).

6. Gratuity is tax free upto half month's average salary (of

last 10 months) for each year of service, subject to amaximum of Rs. 3.5 lakhs as per Sec. 10(10).

2) GROUP LEAVE ENCASHMENTSCHEME:Many employers are providing Leave Encashment benefit in

addition to other retirement benefits to their employees which

are a lump sum amount payable to the employees or their

dependants on retirement, death, disablement, voluntary

retirement etc.

Nature of liability:

The amount depends upon the leave to the credit of the

employee and his/ her salary at the time of exit. Liability is of increasing nature as it is linked with salary as well as leave

position.As per the amended section 209 (3) of the Company's

Act 1956 and Accounting Standard (AS-15) dated January,

1995, the employers have to account for the liability in respect

of leave encashment facility, if any, available to the employees

and to provide for the same in their Annual Accounts. It is,therefore, necessary for the companies to ascertain liability in

respect of Leave Encashment facilities, if any, available to the

employees and provide for the same in the books of accounts

every year. It helps the employers in ascertaining the true cost

of their products and services.

The Features:

44 | P a g e


45/57

Group Leave Encashment Schemes (GLES) of LIC helps the

employers in funding of their lave encashment liability. The

salient features of the scheme are as follows:-

1. The Company will submit the employees' data and rules

for Leave Encashment. LIC will make actuarial valuation

and find out the funding requirements which shall be

quoted to the company. The company will contribute as

per the advice of LIC.

2. A uniform life cover per employee or graded cover will beprovided under One Year Renewable Group Term

Assurance Plan of LIC. A small term insurance premium

will be charged in addition to contributions for funding.

3. A Running Account will be maintained under the scheme

and the contributions (excluding term assurance

premium) will be credited to this account and all claims

except term assurance cover will be settled out of the

Running Account. Interest at the rate declared by LIC from

time to time will be credited to the Running Account at the

end of the financial year.

Benefits:1. On the exit of an employee or encashment of leaves

during the service the Leave Encashment amount will be

paid from the Fund of the scheme maintained with LIC.

2. On the death of an employee, in addition to his / her leave

encashment benefit, his/her family will be entitled to the

amount of Insurance Cover, which will be tax-free.

45 | P a g e


46/57

3. The Life Insurance Corporation of India will do the

Actuarial Valuation and will provide necessary certificate

as per AS-15.

4. The amount of Term Insurance Premium paid for LifeInsurance Cover will be treated as business expenses.

EDUCATION INSURANCE PLANS:-One of your most important responsibilities as a parent is

to ensure that your child gets the best possible education

that can be provided. ICICI Prudential offers a wideportfolio of education insurance plans that are designed to

provide peace of mind to you, as a parent, that your

child's education will be secure. These plans ensure that

money is made available at the crucial junctures in a

child's education - Class X, Class XII, graduation and post-

graduation - to fund crucial commitments for the child'sfuture. Importantly, education insurance plans ensure that

in the unfortunate event of the death of a parent, the

child's education continues unhampered.Under the

education insurance plans platform, LIC brings the

following products to you. Please click on the product

name to know more about the plans.

Plan Name Plan Type

SmartKid New Unit-linkedRegular Premium

SmartKid New Unit-linked

Unit Linked

Unit Linked

46 | P a g e


47/57

Single Premium

SmartKid Regular Premium

Traditional

BENEFITS:-Life insurance, especially tailored to meet your financial needsNeed for Life Insurance

Today, there is no shortage of investment options for a personto choose from. Modern day investments include gold,

property, fixed income instruments, mutual funds and of

course, life insurance. Given the plethora of choices, it becomes

imperative to make the right choice when investing your hard-

earned money. Life insurance is a unique investment that helps

you to meet your dual needs - saving for life's important goals,and protecting your assets.

Let us look at these unique benefits of life insurance in detail.Asset ProtectionFrom an investor's point of view, an investment can play two

roles - asset appreciation or asset protection. While most

financial instruments have the underlying benefit of asset

appreciation, life insurance is unique in that it gives the

customer the reassurance of asset protection, along with a

strong element of asset appreciation.

The core benefit of life insurance is that the financial interests

of ones family remain protected from circumstances such as

47 | P a g e
http://www.iciciprulife.com/public/Life-plans/SmartKid.htmhttp://www.iciciprulife.com/public/Life-plans/SmartKid.htm


48/57

loss of income due to critical illness or death of the

policyholder. Simultaneously, insurance products also have a

strong inbuilt wealth creation proposition. The customer

therefore benefits on two counts and life insurance occupies a

unique space in the landscape of investment options available

to a customer.

Goal based savingsEach of us has some goals in life for which we need to save. For

a young, newly married couple, it could be buying a house.

Once, they decide to start a family, the goal changes to

planning for the education or marriage of their children. As one

grows older, planning for one's retirement will begin to take

precedence.

Clearly, as your life stage and therefore your financial goals

change, the instrument in which you invest should offer

corresponding benefits pertinent to the new life stage.

WEALTH CREATION PLAN:-It gives the customer the dual benefit of protection along with

the potentially higher returns of market-linked instruments. The

most important benefit of ULIPs is the flexibility they give the

customer in choosing the premium amount and also choosing

the underlying fund in which this money is to be invested.

Wealth creation plans also offer the customer more liquidity

options as compared to traditional plans.

48 | P a g e


49/57

Chapter 4 .Data analysis ,interpretations

49 | P a g e


50/57

age 50

No. of

Investors

12 18 30 24 20 16

Interpretations:

According to this chart out of 200 people 120 peopletake some kind of insurance policy,maximum from 36-40and minimum in


51/57

Different policy bought bye customers

51 | P a g e


52/57

Only 42 % people having life insurance but among them 82%people are underinsurance and only 18% people are fullyinsured according to them income

52 | P a g e

Under insurable persons Fully insurable persons82% 18%

Insurance Plan Market Share Term Plan 39%Money back Plan 14%Endowment Plan 15%Child Plan 8%Unit link Plan 24%


53/57

53 | P a g e


54/57

SUGGESTION

1.) Life insurance has to expand their financial product base forservice orientation .

2) Any company in life insurance has to come with shorterpremium payment term plan related to life insuranceinvestment.

3) Life insurance company have to be periodically monitored bycentral government officially for a smooth effective running.

4 ) Brand preference from the customer have to be taken into

consideration for achieving customer satisfaction &enhancingthe professional service related to life insurance investment .

5 ) Management has to clear related its investment option whenit comes to public investment .

RECOMMENDATION

1) IRDA has to take steps in insuring maximum to maximum

safety &clarity when its comes to life insurance investmentrelated to any company operated in India.

2) Company has to take step in order to improve the internalportfolio related to the investment of the public.

3) An insurance company has to improve on outstanding claimsettlement ratio when its come to policy holder claims.

4) Insurance company has to improve on the internalinfrastructure of the organization for giving professional serviceto policy servicing.

5) Insurance companies have to work on corporate lines withIRDA & set a professional image in front of IRDA

CONCLUSION

After Findings we can see about LIC features and his The

54 | P a g e


55/57

tendency to take the expedient approach and focus on the far

right of the LIC spectrum, Peacetime Contingency Operations

and conduct training as usual, while briefing that the LIC block

has been checked, will lead us to a possibly fatal false sense of

security.

Instinctive behavior and ingrained training must be adjusted tofit new circumstances. STXs must be developed locally orborrowed from units who have already been through the

training. The probability of becoming involved in a LIC operation is high. The potential to attract international attention, even withlimited forces, is also great. Units have demonstrated that witha balanced training focus and proper preparation, many pitfallsoutlined above can be avoided.

LIC is not conventional warfare. This is critical for thecounterinsurgent to understand. The insurgents violent andcoercive strategy is applied so as to achieve political, civil,military and psychological results. Hence, the counterinsurgentmust counter all of these strategic elements individually. Inaddition, the target of the insurgents violence and coercion isthe population. This is because the population is the centre of gravity in LIC. Therefore the counterinsurgent must also focuson the population to be successful. In terms of militaryprinciples in counterinsurgency, doctrinal precision,professionalism, independence, initiative, force precision,

restraint, combined arms, precision engagement, joint force,effective population based intelligence, integratedcommunications, a civil affairs approach and high levels of training are critical.

So we can say that so many merits and Demerits in lifeinsurance Corporation of India.

55 | P a g e


56/57

LIMITATION

The following are the deficiencies or limitations of the study.

The study is restricted to only to INSURANCE COMPANIESIt is restricted to Life Insurance Corporation Of india and ICICIC

PRUDENTIAL LIFE CORPORATION hence the conclusion can be

generalised

for all the LIFE INSURANCE COMPANY on one hand for the

entire INSURANCE sector on the other hand.

There can be differences in the monitoring system and policiesamong the different Insurance Companies even they are

following IRDA norms

This study restricted to only for study purposes not for .OTHER

PURPOSES. The whole data is collected in 40 DAYS.. This is for

COLLEGE PURPOSES ONLY. The whole study is based on LIFE INSURACE CORPORATION OF

INDIA LTD AND ICICI PURDENTIAL LIFE INSURANCE COMPANIES

DIFFERENT PORTFOLIO

And Their Benefits with TAX.

56 | P a g e


57/57

Documents

MEANING OF PORTFOLIO MANAGEMENT