Hdfcslic

SUMMER TRANING PROJECT

“A STUDY OF PRODUCT PROFILE OF HDFC STANDARD LIFE INSURANCE AND SALES PROMOTION THROUGH RECRUITMENT OF FINANCIAL CONSULTANT”

CONTENTS 1.ABOUT THE PROJECT 2.CONCEPTUAL FRAMEWORK  Why Life Insurance  Introduction to Insurance Industry  Benefit of life Insurance 3.An overview of the Industry  Life Insurance market in India  How big is the Insurance market  Winds of change  Strategic Alternatives  Deregulations 4.About The Company    

Introduction Benefits of selecting a right company Vision Core Values

5.About The Products o Saving Plan     

Endowment Plan Unit Link Endowment Plan Children’s Plan Unit Link Children’s Plan Money Back Plan

o Retirement Plan 2

 Personal Pension Plan  Unit Link Pension Plan

o Investment Plan  Single Premium whole of life Insurance Plan o Protection Plan  Term Insurance  Loan Cover Term Insurance 6.About The Riders    

Critical Illness ASA ADB Waiver Of Premium

7.Sales Promotion Through Recruitment of Financial Consultants               

Definition of Financial Consultants Function of agent Criteria for becoming an agent Training of insurance Agents Licensing Process Code of conduct for insurance agents Termination of Agency Role of Financial Consultants Starting The Project Market segmentation Tele Calling Cold Calling Fixing Appointments and Meeting People Follow Ups Final Documentation

8.Sugessions and Recommendations

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8.Conclusion 9.Bibliography

ABOUT THE PROJECT

INTRODUCTION:

Life insurance is one of the best ways to make the life secure. Even after death it provides benefits to the nominees .In Private sector HDFC Standard Life Insurance is the most respected company. This project is concern about the understanding the products of HDFC Standard life Insurance and Sales Promotion through Recruitment of Financial Consultants. “Man Power Is Our Asset” the saying goes true if the people are employed taking all the aspects into consideration. The overall project deals in studying the facts, which should be considered while Recruiting Financial consultants for the company. The project work Started by understanding the Products of the company after getting familiar with the products of the company the following things had been done: -

1.Market Segmentation To Recruit Quality Peoples 2.Tele calling 3.Fixing Meetings 4.Meeting Clients 5.Follow Ups 6.Final Documentation

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The main objective of this project is to understand the products of the company and to do sales promotion by Recruiting Financial consultants of the company, as the consultants generate the overall business. Emphasis was given in selection of the quality peoples having an appropriate profile those can generate good business for the company.

CONCEPTUAL FRAMEWORK

WHY LIFE INSURANCE?

Uncertainty is part of our everyday life. Human beings cannot ignore the fact that everyone has to die one day, they will grow old and there may happen something by which the income earning capacity is lost. In these situations of a sudden disability, Death and retirement the big question is who would take care of all the medical expenses? Who would pay the mounting household bills? Would life continue smoothly for our children? Since we have no control over life’s ebbs and flows, why not to do something over which we do have control-Plan For Life’s Contingencies -Invest In Insurance. Insurance: The Concept Insurance is the compensation of Financial Loss on happening of an uncertain event. When Insurance is purchased the risk of financial loss due to happening of that uncertain event is transferred from the policyholder to the company. When the claim arises, company will pay a Lump Sum amount to the policy holder or his nominee that will be utilized to generate income from them.It is important to note that the company is not

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protecting the life of the policyholder but the income earning capacity on happening of specified uncertain event. Uncertainty is part of our every day life. However, all the uncertain events cannot be insured. We will be focusing only in those events where the income earning capacity is lost. Income stops on the happening of four major events • • • •

Death Sickness Accident Retirement

First three events are uncertain. Nobody can predict when they will happen so we can have insurance for them. However retirement is a certain event we know our retirement age and it is a certain event and we can plan our retirement hence there is a no risk cover for that. Another important point to be considered is the nature of accidents and sickness. There could be minor Illnesses or accidents resulting in temporary disability. All of them need not results into loss of income earning capacity. Insurance covers only those accidents and sickness where the income earning capacity is lost either permanently or for a specified minimum period.

INTRODUCTION TO INSURANCE INDUSTRY Insurance is as old as civilization. It has been developing from the family form of insurance to mutual associations, stock exchange securities and again to state owned organizations. “Yogakshema” has been the oldest term of insurance used in the “Rigveda” for some kind of insurance.

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The concept of formal insurance originated in the 12th century in the form of protection against financial loss to the seafarers

involved

in

foreign

trade.

Growing

economic

uncertainties caused not only by multiplicity of social, cultural, ethnic

and

political

factors

but

also

natural

calamities

necessitated invention and development of avenues capable of providing economic security to the bereaved family 8in the event of loss of bread earner. And thus began the concept of Life Insurance. With the development of social security and the welfare status of the societies, the business of life insurance assumed multidimensional. The disintegration in most of the societies, of the extended family system, and ancient social institution, which provided a natural umbrella of economic protection and emotional solace upon the death of the bread earner led to a greater acceptability of the doctrine of life insurance and the growth of life insurance industry around the globe.

From

a

meager

beginning

of

providing

pecuniary

protection on the death earner it has moved to become major vehicle in the financial planning both for security and investment purpose. The industry hardly resembles 16th or 17th century. It would have been impossible to conceive then the development that has propelled extensive changes in the product field, customer attitudes and market environment. BENEFITS OF LIFE INSURANCE Superior To Any Other Savings Plan

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Unlike any other savings plan, a life insurance policy provides full protection risk of death. In the event of death of a policyholders, near and dear ones. In comparisons, any other savings plan would amount to the total savings accumulated till date. If any other incidence occurs prematurely, such savings can be much lesser than the sum assured. Evidently, the potential financial loss to the family of the policyholder is cease able. Encourages And Forces Thrift A saving deposit can easily be withdrawn. The payment of life insurance premium, however, is considered sacrosanct and is viewed with the same seriousness as the payment of interest on a mortgage. Thus, a life insurance policy in effect brings about compulsory savings. Easy Settlement And Protection Against Creditors A life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditor of the assured by effecting a valid assignment of the policy. Administering The Legacy For Beneficiaries Speculative or unwise expense can quickly cause the proceeds to be squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installation and lump sum amounts.

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A

Ready

Marketability

And

Suitability

For

Quick

Borrowings A life insurance policy can, after a certain time period (generally 3 years), be surrendered for a cash value. The policy is also acceptable as a security for a commercial loan, for example a student loan, it is particularly advisable for housing loans when an acceptable policy may also cause the lending institution to give loan at lower interest rates. Disability Benefits Death is not the only hazard that is insured, many policies also provide disability benefits. Typically, these provide for waiver of future premiums and payment of monthly installment spread over certain tme period. Accident Death Benefits Many policies can also provide for an extra sum to be paid (typically equal to the sum assured) if death occurs as a result of accident. Tax Relief Under the Indian tax act, the following tax relies are available 1.

30% of the premium paid can be deductible from your total income-tax liability.

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2.

100% of the premium paid is deductible from your total taxable income. When these benefits are factored in, it is found that most

policies offer return that are comparable/or even better than older savings modes such as PPF, NSC etc. Moreover, the cost of insurance is very negligible.

AN OVERVIEW OF THE INDUSTRY: Life Insurance Market in India Many may not be aware that the life insurance industry of India is as old as it is in any other part of the world. The first Indian life insurance company was the Oriental Life Insurance Company, which was started in India in 1818 at Kolkata. A number of players (Over 250 in life and about 100 in non-life) mainly with regional focus flourished all Across the country. However, the Government of India, concerned by the unethical Standards adopted by some players against the consumers, nationalized the industry in Two phases in 1956 (life) and in 1972 (non-life). The insurance business of the country Was then brought under two public sector companies, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). In line with the economic reforms that were ushered in India in early nineties, the Government set up a Committee on Reforms (popularly called the Malhotra Committee) In April 1993 to suggest reforms in the insurance sector. The Committee recommended Throwing open the sector to private players to usher in competition and bring more Choice to the consumer. The objective was to improve the penetration of insurance as a Percentage of GDP, which remains low in India even compared to some developing Countries in Asia. Reforms were initiated with the passage of Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up 10

as an independent regulatory authority, which has put in place regulations in line with global norms. So far in the private sector, INSURANCE MARKET IN INDIA By any yardstick, India, with about 200 million middle class households, presents a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. With the per capita income in India expected to grow at over 6% for the next 10 years and with improvement in awareness levels, the demand for insurance is expected to grow at an attractive rate in India. An independent consulting company, The Monitor Group has estimated that the life insurance market will grow from Rs.218 billion in 1998 to Rs.1003 billion by 2008 (a compounded annual growth of 16.5%).

WINDS OF CHANGE Reforms have marked the entry of many of the global insurance majors into the Indian Market in the form of joint ventures with Indian companies. Some of the key names are AIG, New York Life, Allianz, Prudential, Standard Life, Sun Life Canada and Old Mutual. The entry of new players has rejuvenated the erstwhile monopoly player LIC, which has Responded to the competition in an admirable fashion by launching new products and Improving service standards. The following are the key winds of change brought about by privatisation. Market Expansion: There has been an overall expansion in the market. This has been Possible due to improved awareness levels thanks to the large number of advertising campaigns launched by all the players. The scope for expansion is still unlimited as virtually all the players are concentrating on large cities and towns - except by LIC to an extent there was no significant attempt to tap the rural markets. New Product Offerings:

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There has been a plethora of new and innovative products offered by the new players, mainly from the stable of their international partners. Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional money-back policies, which is not considered very appropriate for long-term protection and savings. However, there are still some key new products yet to be introduced - e.g. health products. Customer Service: Not unexpectedly, this was one area that witnessed the most significant change with the entry of new players. There is an attempt to bring in international best practices in service and operational efficiency through use of latest technologies. Advice and need based selling is emerging through much better trained sales force and advisors. There is improvement in response and turnaround times in specific areas such as delivery of first policy receipt, policy document, premium notice, final maturity payment, settlement of claims etc. However, there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels. Channels of Distribution: Till two years back, the only mode of distribution of life insurance products was through Agents. While agents continue to be the predominant distribution channel, today a number of innovative alternative channels are being offered to consumers. Some of them are banc assurance, brokers, the Internet and direct marketing. Though it is too early to predict, the wide spread of bank branch network in India could lead to banc assurance emerging as a significant distribution mechanism. STRATEGIC ALTERNATIVES If one analyses the history of growth of the insurance industry since reforms, it is marked by all-round growth of all players. More or less all players (including the market leader LIC) have 12

aggressively recruited and trained advisors, appointed agents, launched new products, improved customer service standards and revamped/expanded their distribution networks. If at all there was any major difference between players it was only in time lag in launching of services. Every player would like the customers to believe that its service standards are the best or that its agents are the most informed and ethical, but is debatable whether there are any significant differences. In other words, each company is trying to be ‘everything to everybody’. Our argument is that the strategy of being everything to everybody is risky. Some players justify the above strategy on the basis that the Indian market is huge and it can accommodate everybody. Still, in a market where it is difficult to distinguish oneself sufficiently on service or any other parameter to be able to charge a premium, it will lead to unmitigated price competition to the detriment of all players. One may achieve sales turnover, but margins and profitability will suffer severely. In the insurance industry where large amounts of capital are required, this is risky. While there is room for a few scale players with a finger in every pie, it is profitable for other players to focus on different segments to survive and thrive in a multi-firm open environment. While each company has to choose its own unique positioning based on its unique strengths, the below-mentioned generic positioning alternatives appear worth considering. Needless to say the positioning choices discussed here are not mutually exclusive and can be overlapping.

Variety-based Positioning This type of positioning is based on varieties in products and services rather than customer segments. It is a sensible strategy for those companies who have distinctive advantages or strengths in offering certain products and services. In the insurance industry too, it is possible to achieve a unique position by focusing on certain category of products. Then there is the entire category of pension products which is widely touted to have immense growth potential in India due to imminent pension

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reforms. It is possible to achieve profitable positioning by focusing and excelling in only pension products. Needs-based Positioning This is the most commonly understood positioning and is based on the differing needs of Different groups of consumers. This can be done successfully if a company has unique strengths to service a group of customer needs better than others. The insurance needs of customers vary significantly for different groups of customers. The insurance needs of young family with small children will be quite different from that of a family in which the income-earner is close to retirement. However, in India most of the life insurance companies have a wide variety of products tailored for different customer needs and there is no company focusing on a particular customer need. An example would be a life insurance company that focuses only on High Net-worth Individuals (HNIs). The needs of HNIs would be quite different from those of a general consumer and would require an entirely different marketing mix right from the type of products offered and the way they are distributed, to the promotion methods employed. Access-based Positioning Positioning of customers can also be done by the way they are accessible. That is different groups of customers may be accessible in different ways even though they may have Similar needs. Access is typically a function of customer geography or customer scale. There is excellent opportunity in the insurance industry to employ access-based positioning by targeting the rural insurance sector. The rural market for life insurance is very different from the urban market in terms of needs, income levels and distribution (seasonality, for example), penetration of media and so on. So far except for LIC, no other player has paid any attention or focus on the rural sector. Contrary to common perception it is a big opportunity as emphasized repeatedly by such eminent strategists like Mr. C.K. Prahlad. Rural market can be a highly profitable position if one is able to carefully plan and tailor an entire set of low-cost activities of advertising, distribution, and product design etc. to successfully exploit the potential. 14

DEREGULATION NEED FOR PRIVATIZATION We cannot directly attribute the reasons for opening up the insurance sector to any external influence. A more possible reason could be that the government is pressed for more longterm funds for investments in infrastructure projects. Committees like the Rakesh Mohan committee on insurance sector for tapping it as a resource of long-term funds. Whatever is the stimulant for its opening up it is a long delayed step towards meeting a very legitimate need. Number apart, privatization of the insurance sector is expected to bring in some competition and with that an improvement in the insurance products and services. With the increase in number of players it may not be a difficult task to extend the insurance coverage to a larger part of the society. It depends upon the kind of products that will be offered and the kind of marketing strategy that will be adopted. In fact, the marketing strategy will be determining the speed at which the sector is going to develop. Product designing is no doubt a major part of marketing strategy, but even a good product fails to take off, if it is not marketed properly. ISSUES RELATED TO DEREGULATION Even as the story of this newly opening insurance sector is unfolding, there of issues that are bothering the regulators as well as interest groups in the industry. Resource Mobilization Although the insurance sector is being opened up for the private players, the government does not want to lose its grip over the resources it will be generating. Thus, we see that it is trying to 15

direct the process of growth in this sector to achieve its objectives of mobilizing saving for developmental purposes.

Inflow/Outflow of Funds There are still restrictions of giving foreigners free access to our markets. Thus, the limit to their investments is restricted to 26% only. It is feared that foreign would plough away the premium income from the county, leading to net outflow rather than net inflow of resources. It is true that the insurance industry in most of the developed countries is going through rough patch. It is said that the mergers and acquisitions that are taking place among them will not really help them much because that will not be something similar to what our banks are presently suffering from. Most of their policies were written in a period of high interest rate, whose servicing has become burdensome as the interest rate fell. Servicing period of such policies are longer than the longest available period. Thus, there is a mismatch between their costs and returns. They can get out of this fix either by reducing their costs or by increasing their returns. The best way to reduce their cost is by expanding their policy base. But, the markets are not only stagnating but also oversupplied. Thus, the scope for expanding their policy base at lower costs is virtually impossib

Market Potential The order issue is this whether the potential market is realistically estimated or not. For, the potential premiums are estimated without factoring in the impact of numbers of players in the market, the level of competition etc. Thus although people may have the ability to pay such level of premium Rs.3500 or 10000/- per annum, the actual premium may come down depending upon the level of competition among the insurance suppliers and the actual demand for insurance. The supply does

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not automatically insure demand especially given the fact that there is a lot of distrust in the Healthy Competition The new players will have to first work on the system to include confidence and to prove its ability to provide better service than is presently being provided. All this will take long time unlike for the tangible goods, weather pent up demand could be quickly tapped, and in a service industry like insurance the need is more futuristic, the credibility of the firm the service needs to be established before there can be any significant level of demand for such product. Only those who can stand long and strive to establish there credibility can survive in this industry. Impact On Financial Sector The next issue is regarding the impact of the expansion of this sector on other real or financial sectors. The question is whether the expansion of the insurance sector will lead to mobilization of extra savings or mere redistribution of existing savings. The savings rate has been falling in the recent past, it look more lightly that admission of one more avenue to save will increase the competition for funds and lead to a rise interest rate. Thus, while on one hand the expansion of insurance sector may provide the much-needed long-term funds for the infrastructure development, it may indirectly lead to a higher cost of borrowings for other corporate investments. Thus its overall impact will depend on the ability of the insurance industry to place its products not as substitute for any other instruments of savings, insurance is only a hedge against highly unforeseeable events like death and ill health. Thus, there is an important need for both the insurance company and the individual buying insurance to view the product from this angle. Investment And Profitability Alternatively they can tap the emerging markets where not only the growth rates will be very high but also the cost of writing new policies will be lower given the lower wage and other costs. The other way to improve their finances is by improving their returns on their investments. Given the falling stock prices in the stock 17

markets and the thin supply of debt in the US markets, the scope on this front is very limited. Thus, it is understood that the insurance companies from the developed companies are showing a great interest in entering the Indian market, where both the potential volumes as well as yields may be much higher.

ABOUT THE COMPANY INTRODUCTION “Experto Credite” (Trust the one who has proved it) We have known this truth for a long time (about 2000 years ago!). It is especially important when it comes to investing money. Life insurance, being a long-term business, the money is managed over longer periods. One needs to entrust his money to a company that can be trusted not only for the protection services that it offers but also for its expertise in managing money. This has to be with reference to the time factor. Selection of a good company becomes imperative. There are a lot of benefits associated with a right selection. Benefits of selecting a right company Safety: Safety of money invested is a fundamental benefit. It means preservation of capital invested. It is all the more important considering the time scales involved in life insurance business. Value of money: Value for money is a relative concept. It means the best possible value for your money invested. It also means that these benefits come to you at the best possible costs. So it’s the matching of your costs with the gains. Professional money management: One of the important benefits that you get is professional money management when you select a right company. Professional money management ensures that your money in managed in the best possible manner to offer you the value for your money.

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Service standards: Life insurance is a service intensive industry. Especially with the advent of unit linked plans the definition of service has undergone a lot of change. Contrary to the popular perception, service begins much before even the policy is sold. Service is required starting from identification of needs to suggesting the appropriate solution and also then after sales service. On selection of a right company you can be assured of getting these services. Consistency: As mentioned above, it is the long-term business. Minimum term of a contract starts from 10 years and continues to whole of the life! It is imperative that service standards should be consistent not only in the beginning but also for the entire term of policy. A good company knows the importance of consistency and strives to ensure the same in all of its services. These and other benefits are the strong reasons why it is very important to choose a right life insurance company.

How to choose a Life Insurance Company? Trust Trust assumes great significance in all walks of life and more so in life insurance. When a policyholder buys a policy, he not only trusts his money but also his risk and that too for a considerable period of 20-25 years. This mandates that Trust has to be the core component of this relationship. The key questions are: “Can the company be trusted over a long period?” “What is the guiding philosophy of the company?” “Will the company be there to pay claims?” Parentage Having strong and able promoters with proven track record should weigh heavily in favour of a company. It is worthwhile to find out credentials of the promoters especially with respect of the values that they have and the synergies that they have discovered in their association. Greater the compatibility, better are the prospects of long-term growth needless to mention the stability. Key questions that can be asked are: “Who are the promoters?” “What is their track record?” “What’s their market 19

standing?” “What is their vision about the joint venture?” “What’s the level of expertise that they have contributed to the venture?” Financial Strengths of Promoters Another crucial dimension is the level of financial support or commitment that these parents have extended to their insurance venture. It certainly calls for deeper pockets to commit large funds upfront and continue to do so as and when needed. The key questions are: “What are the financial strengths of respective companies?” “What was the initial commitment/support in the form of capital brought in?” “What are the important indicators/ratios?” Products & Flexibility Post privatization we are witnessing a lot of innovation as a result of which we have new products being introduced at a rapid rate. Companies trying to market these products aggressively have created more jargon than a common man can digest. To evaluate a company on this parameter one needs to ask few key questions like:  What needs are getting satisfied? It is more important that the underlying needs are satisfied rather than the no of products marketed.  Does the company have simple and sound products that would cater to different needs of individuals? The company that emphasizes need based selling (e.g. Disha) and offers flexibility to design solutions according to these needs is clearly a company to be considered. Today companies offer great flexibility in customizing solutions by way of using base products as well as riders. So the need based selling becomes the core proposition.

Technology orientation Technology has transformed the way we do business now a days. It has helped companies to deliver superior quality of service and 20

that too very quickly. It also enables companies to process volumes of business with minimum errors – something very vital for life insurance business! They key question to be asked is: “How the company is making use of IT for its advantage in designing and executing customer centric business processes?” Business Practices Life insurance is a very unique business. Business practices certainly have great impact on overall success of the company. It is well said that life insurance business begins after the policy is sold! It goes without saying that the company that has clear vision of its business is the company to be with. The key question is “what are the strategies a company adopts to maximize returns for the customers?” we can judge this on the basis of following points:

 Focused underwriting/Risk management that results in better assessment of the risk and lower claims experiences.  Cost controls to save every rupee possible and utilize it to give better returns.  Prudent investment to maximize returns.  Respect to the Regulators – A high compliance orientation.  Customer friendly processes. In addition to various points mentioned above, one major area of a evaluation is the Selling practices. Key question: What are the selling practices adopted by the company? Important considerations are:  Professionally well-trained and respectable sales force. 21

 Need based consultative selling method rather than hard selling.  Emphasis on ethical selling. Track Record Taking a closer look at its performance since its inception. It could mean evaluation on various parameters like: Bonuses declared, Claims settled, Business transacted, spread and so on…. The Team After all it’s the team that translates vision into reality – shapes a company from nothing. It would be worthwhile to take a look at the composition of team. A team of highly competent professionals can really make a difference and add real value to all the stakeholders. It would also be interesting to take a look at the efforts that company putting in to upgrade its human capital.

HDFC Standard Life: Company Profile Welcome to HDFCSL, India’s most respected private life insurance company! A company that has already established itself as a company with a difference in the last 4 years. Let’s look at the milestones in the journey.  Partnership discussions with Standard Life commenced in January 1995.  It resulted into the signing of joint venture agreement in October 1995, the agreement was later renewed in October 1998.  With government clearing the decks, a project team was established in Mumbai in January 2000.  Company got Certificate of incorporation on 14th August

2000.

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 HDFCSL

became the first private sector life insurance company when certificate of registration was granted on 23rd October 2000.

 The initial shareholdings were HDFC 81.4% and Standard Life 18.6%. Since then, it’s the journey of excellence. All of us are contributing towards building up a great company that the world will admire. It’s a journey of creating the world-class company. We have already made a mark. Let’s take a look the highlights of the performance so far:  We have insured over 350000 lives and have already underwritten a Sum Assured of 15000 crores.  We are the first private life insurance company to declare

the bonus and last year’s bonus declaration was 4th in the row. It makes us the only private company to have declared bonuses for 4 consecutive years.

 Winner of Outlook Money award for 2 years.  Company with largest distribution network among the private life insurers.  Our claims experience has been best so far across the industry.  Recently voted as ‘India’s most respected private insurance company’ by Business World. Vision: “The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short, “The most obvious choice for all”.

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Core values:  Integrity  Innovation  Customer centric  People care  Team work

Insurance Products Today there are many insurance products available in the market. Each company has its set of products that it offers to the customers. This makes it difficult to keep track of all the products all the time. A better way to understand them is by way of classification. All insurance products can be classified in 4 basic categories.

Protection

Investment

P Pension

Savings

This classification is based on the needs of the customers. Accordingly each of these categories has an end need to be satisfied and all the products coming under that category aim to fulfill that need e.g. Products coming under Investment category aim to provide long term real growth over the period. Thus understanding

these

categories 24

will

not

only

help

us

to

understand various products but also help us to position our products strongly in a competitive market. Let us take a look at the distinctive features of each category.  Protection type of products: A typical protection type of product aims at protecting income-earning capacity of the customers on happening of uncertain events mentioned above during the term of product. These are the pure risk products

having

no

savings

element.

Naturally,

these

products don’t have any maturity benefits. High-risk cover at low costs is the unique feature of this type that makes this category most attractive for the prospects who want high insurance cover without spending much for it. Usually offered for a definite term, mainly the Term Assurances come under this type. Various riders offered by different companies also a part of protection category. The claim is paid only if the stipulated event happens otherwise there are no maturity values at the end of the term. You’ll also find variations when some companies offer to refund all the premiums paid but these products still come under this category.  Investment

type

of

products:

In

investment

type

of

products, the focus is on maximizing returns for the customer over a period time. In a way, it is opposite to Protection type where the focus is maximizing the risk cover. Here the risk cover is very low. The objective is to put maximum in investments. The underlying principle is to commit money for a certain period of time and get the benefits of real long-term growth. The products are usually 25

single premium policies where the entire premium is collected in advance. Surrenders are discouraged and there is a commitment for certain minimum no of years. In death during the term, value of the investments is returned.

 Pension products: This is another very popular type of product. Along with the risk of an untimely death or disability, we also have a risk of living too long – outliving our source of income. In other words, one needs to ensure that he gets a decent income even after his retirement and continues to get it as long as he lives! This is where we have pension products addressing the need for a comfortable retirement. One can opt for an immediate pension or for pension at a future date (also called as deferred pension). There is a range of options that one can have when selecting a pension plan. There is a great amount of flexibility when it comes to selecting a pension product. The important point to be noted is that Pensions is a part of one’s

present

income

that

he

reserves

for

future

consumption. Every year that income is accumulated and invested. The lump sum accumulation then is used for purchasing pension on the vesting date.  Savings type products: People like to save. Our saving rate has been well above 20% of our GDP for last few years. They save for events like children’s marriage, education etc. Savings types of products aim to strike a good balance between risk cover as well as returns. It acts as a protection 26

on savings. Sum assured is usually the targeted savings that one looks for. He gets that amount at the end of the term along with bonuses if it is a participating policy. On the protection side if any unfortunate event happens during the term, the sum assured (in other words the targeted savings) is still paid. So it encourages a person to save for an event at the same time ensures that his savings are protected. This is the unique advantage of savings through life insurance that no other financial product offers. We find very popular products like Endowment Assurances; Money Back plans in this category.

As stated earlier all the products come under these 4 broad categories. To understand a product, it is essential to find out the category of that product based on its features. Needless to say that it will not be possible to compare one category product to another. Each category is unique and caters to particular needs of the customer. The best approach is to find out what customer needs and then suggest a solution accordingly. Our products are discussed in the following pages within the broad framework of PIPS categories.

Term Assurance and Loan Cover Term Assurance

Single Premium Whole of Life Insurance

Personal Pension Plan

Endowment Assurance and Money back Plan

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P I P S

Our Products HDFCSL has currently launched 6 plans as mentioned above to meet various insurance related needs of our customers. Along with these plans we have also introduced 5 riders – additional benefits available on payment of little extra cost that would help him to enhance his insurance cover without incurring heavy costs. Using these 6 products intelligently along with 5 riders, we can design a range of combinations that would practically match almost all the needs of the customer. We, thus, offer a great flexibility to our customers. In the ensuing discussion products are explained first followed by riders. Endowment Assurance Plan Category:

Savings Plan

Ideal For:

Saving for an event like Children’s Education,

Marriage, Housing etc. It encourages savings and ensures that these savings are protected as well as achieved at the end of term. It is a beneficial proposition to save through life insurance compared to other instruments of savings as at any point of time these instruments just return the accumulated values whereas

a

targeted

savings

value

is

created

immediately the moment one pays first premium. It is available all throughout the term of the policy a powerful feature only possible with life insurance! Riders:

4 riders can be attached viz.

- Critical Illness Benefit (CI) - Double Sum Assured Benefit (DSA) 28

- Accidental Death Benefit (ADB) - Waiver Of Premium Benefit (WOP) Benefits: On maturity basic sum assured + reversionary bonus + terminal bonus is paid. On death during the term, sum assured + reversionary bonus + terminal bonus is paid along with rider benefits if any. Allowed to:

Single Life as well as Joint life first claim basis.

Eligibility:

A chart is produced for ready reference.

Min. age at entry

12

Basic Policy with optional benefits CI ATB ADB WOP 18 18 18 18

Max. age at entry

60

55

60

55

50

Max. age at expiry

75

70

75

65

60

Basic Policy

Terms:

Minimum: 10 years

Maximum: 30 years

There is a minimum premium amount required based on mode selected by the customer as per table given below. Please keep this minimum amount is mind when you work out the premium. This is exclusive or rider premiums. Mode

of

Premium

Payment Annual Half Yearly

Minimum Premium Rs.1800 Rs.1000

29

Quarterly

Rs.550

Money Back Plan Category:

Savings Plan

Ideal For:

Saving for an event like Children’s Education,

Travel etc. with periodical returns of Sum assured. It is suitable for people who would like to have money at regular intervals during the term of the policy. Riders:

4 riders can be attached viz.

- Critical Illness Benefit - Double Sum Assured Benefit - Accidental Death Benefit - Waiver Of Premium Benefit Benefits: Payment of cash (% of SA) in installments (called as ‘Survival Benefits’) On maturity balance sum assured + reversionary bonus + terminal bonus is paid. On death during the term, full sum assured + reversionary bonus + terminal bonus is paid along with rider benefits if any. Allowed to:

Single Life as well as Joint life first claim basis.

Eligibility:

A chart is produced for ready reference.

Basic Policy

Basic Policy for optional benefits CI ATB ADB WOP

Min. age at etry

12

18

18

18

18

Max. age at etry Max. age at expiry

60

55

60

55

50

75

70

75

65

60

30

Terms:

Minimum: 10 years

Maximum: 30 years

There is a minimum premium amount required based on mode selected by the customer as per table given below. Please keep this minimum amount is mind when you work out the premium. This is exclusive or rider premiums. Mode

of

Premium

Minimum Premium

Payment Annual Half Yearly Quarterly

Rs.1800 Rs.1000 Rs.550

Single Premium Whole of Life Insurance Plan Category:

Investment type of product

Ideal For:

An investment oriented person who is looking for

maximizing his returns over a period of time. Here the focus is on long-term real growth resulting out of smoothening effect. This is a single premium policy. Please refer to the detailed write up on this to know the positioning aspect of it. Riders:

Currently no riders can be attached to this plan.

Benefits: In case of death any time after the commencement, full sum assured + compound reversionary bonus + terminal bonus if any is payable. On

completion

of

10

years

from

the

date

of

commencement the policyholder can withdrawal during the 4 week period the full sum assured plus compound reversionary bonus and terminal bonus if any is payable. The Policyholder can continue under the plan even after the completion of 10 years. Similar option of 31

withdrawal will be allowed on the completion of the 15th, 20th.. and every fifth year till death in case the policyholder continues under the plan. It is also eligible for appropriate deductions/ exemptions under the income Tax Act.

Eligibility: Minimum

Maximum

Minimum

Age at Entry Age at Entry Sum Assured 18 years 70 years Rs.25000

Maximum Sum Assured Rs.5000000 per person per year

Terms:

This is a whole of life insurance policy and hence will continue as long as the policyholder lives.

Allowed to:

Single lives only.

Terms Assurance plan Category:

Protection type of product

Suitable for: A prospect who seeks high insurance cover at low costs. A prospect who has higher insurance needs but cannot afford high premiums. Riders:

Accidental Death Benefit Critical Illness Rider OR Accelerated Sum Assured Rider

Benefits: Since it is a pure risk cover product only the sum assured is paid on death during the term of policy. There are no maturity benefits available under this plan.

32

Terms:

Min term under Regular premium policies: 5 years Max Term: 30 years Min term under Single premium policies : 2 years Max Term: 15 years

Eligibility: Age and Term Limits Minimum Term Reg. Sing Pre le m. Pre m Term Assurance 5 2 Plan Accidental 5 2 Death Benefit Critical Illness 5 2 Benefit Accelerated Sum Assured 5 2 Benefit

Maximum Term Reg Sing Pre le m Pre m

Min. age at entr y

Max age at entr y

M ax. age at expi ry

30

15

18

60

65

30

15

18

55

65

30

15

18

55

65

30

15

18

55

65

Minimum Premium Mode

Minimum Premium Rs.1500 Rs.800 Rs.450 Rs.2000

Annual Half Yearly Quarterly Single Premium

Loan Cover Term Assurance Plan Category:

Protection type of product – Decreasing sum

assured limited payments plan. Suitable for: A plan for covering loans, outstanding liabilities. Prospects having opted for different types of loans or 33

prospects with outstanding loans can also opt for this plan during the term. Benefits: It aims to cover the outstanding loan in case of death during term. Nothing is payable on maturity. Premiums are payable only for the 2/3rd of the term of policy. In case of death during the term, the sum assured mentioned in the policy schedule is paid. Allowed to: Riders:

Single life as well as Joint life first claim basis.

Accelerated Sum Assured rider only.

Eligibility: Age and Term Limits Minimum Term Reg. Sing Pre le m. Pre m Loan Cover Term 10 5 Assurance Plan Accelerated Sum Assured 10 5 Benefit

Maximum Minimu Term m age at Reg Sing entry Pre le m Pre m

Maxim um age at entry

30

15

18

55

30

15

18

55

Minimum Premium Mode

Minimum Premium Rs.1500 Rs.800 Rs.450 Rs.2000

Annual Half Yearly Quarterly Single Premium

Personal Pension Plan Old age bestows the mantle of dignity upon those men and women who are financially independent! 34

Retirement as we all know is a certain event. There is no insurance cover available after the retirement. In a survey it is reported that nearly 77% of the Indians have not provided for their retirement! It is also known that after retirement your income may cease but not your needs. One can only save for the retirement. Savings merely are not enough. Putting that money in a proper way so as to ensure income for lifetime is all the more important. This need is satisfied by Pension Plan. Pension is an annuity payable on lump sum paid by the policyholder. Broadly, there are 2 types of pensions viz. Immediate annuity and

Deferred

annuity

(payable

after

certain

period

called

‘Deferment period’) Our Personal Pension Plan is a deferred annuity plan. Here the policyholder saves through deferment period and the accumulation is then utilized to give pension on the vesting date. We have not introduced immediate annuities. When to start? As seen above, on has to ‘purchase’ the pension. A lump sum amount is required to buy the annuity from the insurer. Saving regularly over the period can create this lump sum. The larger the fund the better is the pension. One therefore, has to put aside maximum possible and that too at an early date! The earlier one starts the better. How much? To answer this question we need to understand that the annuity payable is dependent on 3 important variables viz. 1. The rate of Interest prevailing at that point of time (on vesting date) 2. The type of Pension. And 3. The Lump sum accumulated in your 35

account. This will depend upon the inflow of premiums and the returns earned from time to time after deducting related expenses. It will be utilized to purchase pension on the vesting date. Except no.2, other variables can’t be predicted with certainty as on today. Therefore, the best decision is to set aside maximum that one can save. It is a common tendency to ask for the likely annuity amount receivable in the future. However, one needs to understand that unless otherwise stated, these values are nothing but indications that may come true or may not come true. They are based on certain assumptions. It is advisable to make a decision only after analyzing the nature and viability of these assumptions. Category: PPP is a pension category plan. It aims to accumulate money for purchase of pension on the vesting date. Suitable for:

A prospect who would like to provide for a

comfortable retirement and is willing to save over a period of time. Riders:

Currently no riders are allowed under this plan.

Allowed to:

Single lives only.

How does this plan work? As stated above, this is a deferred annuity. It is a savings contract aimed at developing good lump sum at the end of the deferment period (called as ‘Notional Cash Value’). This value is then utilized to provide pension. On vesting date, we will give 3 options: 1.

A part of Notional Cash Value can be converted into actual cash subject to the limits fixed by prevailing regulations. It is also known as Commutation of Pension. We will allow the commutation as prescribed by the statutory provisions 36

applicable on the vesting date. Currently some of the companies have laid down certain percentages. 2.

Annuity from HDFC Standard Life Insurance Company Limited. We have not specified types annuities at present. We

intend

to

offer

all

the

possible

options

to

our

policyholders as on vesting date and thereby offer greater choice

and

freedom

to

select

considering

conditions

prevailing at that time. 3.

If it is permitted by the prevailing regulations, the notional cash value can also be used to buy annuity with any other insurance company. This option is also called as “Open Market Option (OMO)”.

Death Benefits Premium in a PPP can be paid either by Regular Payment or through Single Payment mode. Depending on the mode selected the death benefit changes as follows:  For Single premium policy, it will be Sum Assured along with the attached bonuses declared from time to time.  For a Regular Premium policy, it is lower of a. Sum Assured with

bonuses

or

b.

return

of

premiums

with

8%

compounded interest. The death benefits are not so high for the simple reason that the underlying need is not death risk cover but saving for pension. RIDERS We have introduced following riders: 1.

Double Sum Assured:- Provides additional sum assured on death during the term of this rider. 37

2.

Accidental Death Benefit:- Pays one extra sum assured on death due to accident provided the death takes place within 90 days of accidental disability under this rider.

3.

Waiver of Premium:- As the name indicates, this rider waives of future premiums on disability. However, this disability should be a total disability for and should last for minimum 26 weeks. Future premiums shall be waived off on fulfillment of this condition. These premiums shall be waived of until Recovery, Death, or Maturity whichever is earlier.

4.

Critical Illness:- This rider pays additional sum assured on happening of 6 specified critical illnesses. The payment shall be made on the survival after 30 days. This is a benefit on survival hence the 30 days clause. Basic policy continues after the rider is paid.

5.

Accelerated Sum Assured:- This rider accelerates the payment of basic sum assured on happening of critical illnesses mentioned above. There is no waiting period required. Money is paid immediately on happening. Policy terminates after the rider is paid for. However, there is a major difference between CI and ASA as the former is additional benefit and the later is just the modification of basic contract. In CI policy continues while it terminates in ASA.

Points to remember  Rider sum assured has to be equal to the basic sum assured.  Rider can dropped later but can only be added at the inception of the policy. 38

 Please refer to the latest IRDA guidelines on rider premiums.  Refer chart below for finding out which rider can be given on which plan.

39

Unit Linked Endowment Assurance The unit linked endowment plan is an insurance policy that is designed to pay a lump sum on maturity or on earlier death. The Unit Linked Endowment Plan also gives the option of additional protection against the six common critical illnesses, as well as additional protection if death is as the result of an accident. Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On maturity you receive the value of your units. On death (or critical illness, if chosen) you receive the greater of the value of your units and your selected basic sum assured. What are my Premiums? You agree to pay a level premium regularly, either quarterly, halfyearly or annually, throughout the term of the policy. The minimum premium amount is Rs.10,000 each year. To facilitate increased investment, we allow additional single premium top-ups at any time. The minimum single premium topup is Rs. 5,000 Premiums can be paid by cash, cheque or demand draft. What are the Benefits? There are 4 different options available to choose from: 1. Life Option

On death within the policy term, the greater of the Sum Assured and the value of the unit-linked fund will be paid to your nominee. On survival to the end of the policy term the value of the unit linked fund will be paid to you. 2. Life and Health Option

40

On death or earlier diagnosis of any one of six common critical illnesses within the policy term, the greater of the Sum Assured and the value of the unit-linked fund will be paid to your nominee. On survival to the end of the policy term the value of the unitlinked fund will be paid to you. The illnesses covered under this option are cancer, coronary artery by pass graft surgery, heart attack, kidney failure, major organ transplant (as recipient) and stroke. 3. Extra Life Option

This option pays the same benefits as the Life Option but, should death occur within the policy term as the result of an accident, an extra benefit equal to the Sum Assured will be paid. 4. Extra Life and Health Option

This option pays the same benefits as the Life and Health Option but, should death occur within the policy term as the result of an accident, an extra benefit equal to the Sum Assured will be paid. What levels of protection are available? Depending on your age at entry, you may choose between 3 levels of cover – Low, Medium or High. For each level the Sum Assured is based on the amount of premium you pay each year. Age at Levels of Cover Entry Low Medium 18 40

to 5 Premium

x

41 50

to 5 Premium

x

5 Premium

x

Over 51

10 x Premium 10 x Premium

41

High 20 x Premium

The Sum Assured can not be changed during the term of the contract. How are my benefits paid? Your basic benefits will be paid by cheque. Am I eligible? The age and term limits for taking out a Unit Linked Endowment Plan are: (years)

Minimum Maximum Maximum Minimum Maximum Age at Age at Age at Term Term Entry Entry Expiry Life

10

30

18

60

75

Life and 10 Health

30

18

55

65

Extra Life

10

30

18

55

70

Extra Life 10 and Health

30

18

55

65

Can I alter the level of my premiums? Regular premiums can be increased at any time. If needed, the policyholder can reduce the regular premium levels (even to zero ie the policy is converted to paid up status) provided: • •

3 years of regular premiums have been paid The monetary value of the unit holding across all funds is at least Rs 15,000.

42

What happens if I surrender the policy? The policyholder can surrender the policy at any point of time during the contract term. The amount payable will be the unitised fund value after applying additional surrender charges mentioned below. When can I access my money? You can make lump sum withdrawals from you funds provided the fund balance after withdrawal and charges does not fall below the Sum Assured. The minimum withdrawal amount is Rs. 10,000. What happens if I stop paying premiums? This product has a grace period of 15 days for the payment of each premium after the initial premium. If you stop paying premiums, before you have paid 3 years of annual premiums, we will cancel you policy and return to you the value of your unitised fund, less cancellation charges. If, after three years, you are unable to pay the premiums, you have the option to make the policy paid-up, provided the policy has accumulated sufficient policy value. Currently, this amount will be Rs. 15,000. If you make your policy paid up you will continue to be protected according to the benefits you selected. To provide this cover, we will continue to collect our usual charges on each monthly charge date. It is important to note that if no further premiums are paid, this may reduce the value of your fund over time, or even exhaust it completely. A paid-up policy can be reinstated to premium paying status at any point of time in the future. If the fund value of a paid-up policy falls below Rs. 15,000 we will cancel the policy and return to you the fund value, less cancellation charges. Does this Plan offer me Tax Benefits? Premiums paid under this plan are eligible for tax benefits under Section 88 of the Income Tax Act, 1961. Charges We will deduct charges from the policy to cover our costs. A percentage of each premium is invested to buy units, this percentage is called the Investment Content Rate. The rates are as follows: 43

Investment Content Rate (ICR)

Premium paid Regular - Year 1

73%

Regular - Year 2

73%

Regular - Year 3+

99%

Regular Increases

99%

Premium

Single Premium Top99% Up

The unit price each day will include a fund management charge. This charge is 0.80% of the fund value per annum taken on a daily basis. A flat fee of Rs 15 per month will be deducted by cancellation of units on each monthly charge date. This will be proportioned across funds according to the fund holdings at the time of cancellation of units. Risk benefits (for death sum assured, critical illness, and accidental death) will be charged for by cancelling units on each monthly charge date, based on the person’s age at that time. We charge neither for premium redirections nor for switches but we may do so in the future. We do not charge for altering the regular premium amount (including making a policy paid-up and reinstating a paid-up policy), but we may do so in the future. On cancellation of the policy before 3 years of regular premiums have been paid, we will charge 25% of the outstanding premiums due during this 3-year period. Alteration to Charges No changes can be made to our current charges without prior approval from the Insurance Regulatory and Development Authority. In any case, the fund management charge will not exceed 2% per annum.

44

Exclusions No benefit will be paid if the death has occurred directly or indirectly as a result of suicide within one year from the date of first being covered under the policy. We will not pay health benefits if the critical illness has occurred within 6 months of the start of the contract. We may not pay health benefits if we do not receive a duly completed claim form within 26 weeks of the illness, disability, operation or other circumstances giving rise to the claim. We will not pay health benefits if the critical illness is caused directly or indirectly by any of the following: • •

•

• • •

Intentionally self-inflicted injury or attempted suicide, irrespective of mental condition. Alcohol or solvent abuse, or the taking of drugs except under the direction of a registered medical practitioner. War, invasion, hostilities (whether war is declared or not), civil war, rebellion, revolution or taking part in a riot or civil commotion. Taking part in any flying activity, other than as a passenger in a commercially licensed aircraft. Taking part in any act of a criminal nature. Pregnancy or childbirth or complications arising therefrom.

We will not pay accidental death benefit if death occurs after 90 days from the date of the accident. We will not pay accidental death benefit if death is caused directly or indirectly from any of the following: • •

•

•

Suicide within one year of the Date of Commencement or the date of issue of the Policy, if later Alcohol or solvent abuse, or the taking of drugs except under the direction of a registered medical practitioner. Taking part or practising for any hazardous hobby, pursuit or race unless previously agreed to by us in writing War, invasion, hostilities (whether war is declared or not), civil war, rebellion, revolution or taking part in a riot or civil commotion. 45

• •

Taking part in any flying activity, other than as a passenger in a commercially licensed aircraft. Taking part in any act of a criminal nature.

General Information Unit Prices We will set the unit price of a fund by dividing the value of the assets in the fund at the valuation time by the number of units in existence for the fund. The resulting price will be rounded to the nearest Rs. 0.0001. The value of the assets will be calculated as the Market or Fair Value of the fund’s Investments plus Current Assets (including accrued income) less Current Liabilities and Provisions (including accrued expenses). This price will be published on our company`s website. Prohibition of rebates Section 41 of the Insurance Act, 1938 states: 1. No person shall allow or offer to allow, either directly or

indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. 2. Any person making default in complying with the provisions of this section shall be punishable with fine which may extend to five hundred rupees.

Unit Linked Young Star Plan HDFC Unit Linked Young Star Plan is designed to provide a lump sum to the child at maturity. It also provides financial security to the child in the future, even in case of the insured parent's unfortunate death during the policy term. The Unit Linked Young Star Plan also gives the option of additional protection against the six common critical illnesses. 46

Your premiums are invested in units of the investment funds of your choice, based on the prevailing unit prices. On maturity the value of the units will be paid. On death (or critical illness, if chosen) the selected basic sum assured is paid, and the policy continues until maturity. Following a valid death or critical illness claim, we will pay the future premiums (at the level originally chosen at inception) into your policy,as and when they would have fallen due.

What are my Premiums? You agree to pay a level premium regularly, either quarterly, halfyearly or annually, throughout the term of the policy. The minimum premium amount is Rs. 10,000 each year. To facilitate increased investment, we allow additional single premium top-ups at any time. The minimum single premium topup is Rs. 5,000 Premiums can be paid by cash, cheque or demand draft. Can I switch my monies to any fund? You can switch your existing investments from your any of your unit linked funds, to any other available unit linked fund. You can also give us a premium redirection instruction to redirect future premiums to different unit linked funds.

What are the Benefits? There are 2 different options available: 1. Life Option This option consists of a Maturity Benefit and a Death Benefit. • •

The Maturity Benefit will pay the value of the unit-linked fund at the end of the policy term. The Death Benefit will pay the basic Sum Assured on death of the life assured during the policy term. Following

47

•

payment of this benefit, no further premiums are due from the policyholder. Following a valid death claim, we will pay future premiums on your behalf, as and when they become due. The level of premium will be that chosen by you at inception of the policy.

2. Life and Health Option This option consists of a Maturity Benefit, a Death Benefit and an Extra Health Benefit. • •

•

•

The Maturity Benefit will pay the value of the unit-linked fund at the end of the policy term. The Death Benefit will pay the basic Sum Assured on death of the life assured during the policy term. Following payment of this benefit, no further premiums are due from the policyholder and the Extra Health Benefit will lapse without value. The Extra Health Benefit will pay the basic sum assured on diagnosis of any one of six critical illnesses during the policy term. Following payment of this benefit, no further premiums are due from the policyholder and the Death Benefit will lapse without value. The illnesses covered under this benefit are cancer, coronary artery by pass graft surgery, heart attack, kidney failure, major organ transplant (as recipient) and stroke. Following a valid death or critical illness claim, we will pay future premiums on your behalf, as and when they become due. The level of premium will be that chosen by you at inception of the policy.

What levels of protection are available? Depending on your age at entry, you may choose between 3 levels cover – Low, Medium or High. For each level the Sum Assured is based on the annual amount of premium you choose at inception.

Age at Levels of Cover Entry Low Medium 48

High

18 40

to 5 Premium

x

41 50

to 5 Premium

x

5 Premium

x

Over 51

10 x Premium

20 x Premium

10 x Premium

The level of sum assured can be reduced during the life of the contract but restricted to the available multiples of annual premium chosen at the inception of the policy and using the age of the life assured at entry. Who is entitled for the benefits? The child is the beneficiary under the policy. In case the child is a minor, the proceeds should go to the appointee. Once the child attains 18 years of age, he will be the sole person entitled to the policy proceeds. The benefits will be paid by cheque. Am I eligible? The age and term limits for taking out a Unit Linked Young Star Plan are: (years) Minimum Maximum Maximum Minimum Maximum Age at Age at Age at Term Term Entry Entry Expiry Life 10 Option

25

18

60

75

Life and 10 Health Option

25

18

55

65

Can I alter the level of my premiums? Regular premiums can be increased at any time. If needed, the policyholder can reduce the regular premium levels (even to zero ie the policy is converted to paid up status) provided: 49

• •

3 years of regular premiums have been paid The monetary value of the unit holding across all funds is at least Rs 15,000.

You can pay additional single premium top-up(s) at any point of time. What happens if I surrender the policy? The policyholder can surrender the policy at any point of time during the contract term. The amount payable will be the unitised fund value after applying additional surrender charges mentioned below. When can I access my money? You can make lump sum withdrawals from you funds provided the fund balance after withdrawal and charges does not fall below Rs. 15,000. The minimum withdrawal amount is Rs. 10,000. What happens if I stop paying premiums? This product has a grace period of 15 days for the payment of each premium after the initial premium. If you stop paying premiums, before you have paid 3 years of annual premiums, we will cancel your policy and return to you the value of your unitised fund, less cancellation charges. If, after three years, you are unable to pay the premiums, you have the option to make the policy paid-up, provided the policy has accumulated sufficient policy value. Currently, this amount will be Rs. 15,000. If you make your policy paid up you will continue to be protected according to the benefits you selected. To provide this cover, we will continue to collect our usual charges on each monthly charge date. It is important to note that if no further premiums are paid, this may reduce the value of your fund over time, or even exhaust it completely. A paid-up policy can be reinstated to premium paying status at any point of time in the future. If the fund value of a paid-up policy falls below Rs. 15,000 we will cancel the policy and return to you the fund value, less cancellation charges. Does this Plan offer me Tax Benefits? Tax benefits under Section 88 and Section 10 (10D) of the Income Tax Act, 1961 are applicable. 50

Charges We will deduct charges from the policy to cover our costs. A percentage of each premium is invested to buy units, this percentage is called the Investment Content Rate. The rates are as follows: Premium paid

Investment Content Rate (ICR)

Regular - Year 1

73%

Regular - Year 2

73%

Regular - Year 3+

99%

RegularPremium Increases

99%

Single Premium Top99% Up

The unit price each day will include a fund management charge. This charge is 0.80% of the fund value per annum taken on a daily basis. A flat fee of Rs 15 per month will be deducted by cancellation of units on each monthly charge date. This will be proportioned across funds according to the fund holdings at the time of cancellation of units. Risk benefits will be charged for by cancelling units on each monthly charge date, based on the person's age at that time. We do not charge for premium redirections or switches but we may do so in the future. We do not charge for altering the regular premium amount (including making a policy paid-up and reinstating a paid-up policy), but we may do so in the future. On cancellation or surrender of the policy before 3 years of regular premiums have been paid, we will charge 25% of the outstanding premiums due during this 3-year period. Exclusions

51

No benefit will be paid if the death has occurred directly or indirectly as a result of suicide within one year from the date of first being covered under the policy. We will not pay Extra Health Benefits if the critical illness has occurred within 6 months of the start of the contract. We may not pay Extra Health Benefits if we do not receive a duly completed claim form within 26 weeks of the illness, disability, operation or other circumstances giving rise to the claim. We will not pay Extra Health Benefits if the critical illness is caused directly or indirectly by any of the following: • • •

• • •

Intentionally self-inflicted injury or attempted suicide, irrespective of mental condition. Alcohol or solvent abuse, or the taking of drugs except under the direction of a registered medical practitioner. War, invasion, hostilities (whether war is declared or not), civil war, rebellion, revolution or taking part in a riot or civil commotion. Taking part in any flying activity, other than as a passenger in a commercially licensed aircraft. Taking part in any act of a criminal nature. Pregnancy or childbirth or complications arising therefrom.

General Information Unit Prices We will set the unit price of a fund by dividing the value of the assets in the fund at the valuation time by the number of units in existence for the fund. The resulting price will be rounded to the nearest Rs. 0.0001. The value of the assets will be calculated as the Market or Fair Value of the fund’s Investments plus Current Assets (including accrued income) less Current Liabilities and Provisions (including accrued expenses). This price will be published on our company's website. Alteration to Charges No changes can be made to our current charges without prior approval from the Insurance Regulatory and Development Authority. The following are the maximum caps on each of the different type of charges: The fund management charge will not exceed 2% per annum; the flat fee can be altered from the value at 52

inception increased in line with inflation subject to a maximum of 5% per annum over the period since inception; up to 5 switches will be free in a year, any additional switch can be charged up to 2% of the switched amount; premium redirection and other adhoc policy servicing requests can be charged up to Rs. 250 per request increased in line with inflation subject to a maximum of 5% per annum over the period since inception; the surrender charge can vary upto 100% of outstanding regular premiums due in the first 3 years. The mortality charge rates are guaranteed for the term of the policy.

Prohibition of rebates Section 41 of the Insurance Act, 1938 states: 1. No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. 2. Any person making default in complying with the provisions of this section shall be punishable with fine, which may extend to five hundred rupees.

Unit Linked Pension Plan The unit linked pension plan is basically an insurance contract, which is designed to provide a retirement income for life. Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On vesting the value of your units will be used to buy your retirement benefits.

53

On earlier death, the beneficiary receives the value of your units plus a cash lump sum of Rs. 1,000. What are my Premiums? You agree to pay level premiums regularly, either quarterly, halfyearly or annually, throughout the term of the policy or a single premium at the start of the policy. The minimum premium amount for regular premium mode is Rs. 10,000 each year and for single premium, it is Rs. 25,000. To facilitate increased investment, we allow additional single premium top-ups at any time. The minimum single premium topup is Rs. 5,000. Premiums can be paid by cash, cheque or demand draft. Can I switch my monies to any fund? You can switch your existing investments from any pension unit linked fund to another pension unit linked fund. You can also give us a premium redirection instruction to redirect future premiums to different pension unit linked funds. What are the Benefits? At the chosen vesting date, the unitised fund value will be available to secure pension benefits. Subject to the prevailing regulations, part of this value can be taken in the form of a cash lump sum and the rest converted to an annuity at the rate then offered by HDFC Standard Life. Alternatively, if it is permitted by the prevailing regulations, the proceeds net of any cash lump sum can be used to buy an annuity with any other insurance company who will accept such business. The current maximum limit for any cash lump sum is one-third of the unitised fund value on vesting. On death the unitised fund value will be paid along with a cash lump sum of Rs. 1,000. The beneficiary may use the proceeds to purchase pension benefits for the surviving spouse. How are my benefits paid? Your basic benefits will be paid by cheque. Am I eligible? The age and term limits for taking out a Unit Linked Pension Plan are: (years) 54

Minimum Maximum Minimum Maximum Minimum Maximum Age at Age at Age at Age at Term Term Entry Entry Vesting Vesting Regular Premium 10 Version

40

18

60

50

70

Single Premium 5 Version

40

18

65

50

70

Can I alter the level of my premiums? Regular premiums can be increased at any time. If needed, the policyholder can reduce the regular premium levels (even to zero ie the policy is converted to paid up status) provided: • •

3 years of regular premiums have been paid The monetary value of the unit holding across all funds is at least Rs 15,000.

In addition, you can pay single premium top-up(s) at any point of time. What happens if I surrender the policy? The policyholder can surrender the policy at any point of time during the contract term for regular premium paying policies. For single premium contracts, the contract needs to remain in-force for a minimum period of six months before you can surrender. The amount payable will be the unitised fund value after applying additional surrender charges mentioned below. What happens if I stop paying premiums in regular premium paying contract? This product has a grace period of 15 days for the payment of each premium after the initial premium. If you stop paying premiums, before you have paid 3 years of annual premiums, we will cancel your policy and return to you the value of your unitised fund, less cancellation charges. If, after three years, you are unable to pay the premiums, you have the option to make the policy paid-up, provided the policy

55

has accumulated sufficient policy value. Currently, this amount will be Rs. 15,000. If you make you policy paid up you will continue to be protected according to the benefits you selected. To provide this cover, we will continue to collect our usual charges on each monthly charge date. It is important to note that if no further premiums are paid, this may reduce the value of your fund over time, or even exhaust it completely. A paid-up policy can be reinstated to premium paying status at any point of time in the future. If the fund value of a paid-up policy falls below Rs. 15,000 we will cancel the policy and return to you the fund value, less cancellation charges. Does this Plan offer me Tax Benefits? Premiums paid under this plan are eligible for tax benefits under Section 80CCC of the Income Tax Act, 1961. Charges We will deduct charges from the policy to cover our costs. A percentage of each premium is invested to buy units, this percentage is called the Investment Content Rate. The rates are as follows:

Investment Content Rate (ICR)

Premium paid (Rs) Single Premium Initial Payment

94%

Single Premium Top-Up(s)

99%

Regular Premiums Year 1

78%

Year 2

78%

Year 3 +

99%

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Regular Premium Increases

99%

Single Premium Top-Up(s)

99%

The unit price each day will include a fund management charge. This charge is 0.80% of the fund value per annum taken on a daily basis. A flat fee of Rs 15 per month will be deducted by cancellation of units on each monthly charge date. This will be proportioned across funds according to the fund holdings at the time of cancellation of units. We do not charge for the flat death cover of Rs. 1,000, but we may do so in the future. We do not charge for premium redirections or switches but we may do so in the future. We do not charge for altering the regular premium amount (including making a policy paid-up and reinstating a paid-up policy), but we may do so in the future. On cancellation or surrender of the policy before 3 years of regular premiums have been paid, we will charge 20% of the outstanding regular premiums due during this 3-year period. Alteration to Charges No changes can be made to our current charges without prior approval from the Insurance Regulatory and Development Authority. In any case, the fund management charge will not exceed 2% per annum. Exclusions There will be no exclusions on this policy. General Information Unit Prices We will set the unit price of a fund by dividing the value of the assets in the fund at the valuation time by the number of units in existence for the fund. The resulting price will be rounded to the nearest Rs. 0.0001. The value of the assets will be calculated as the Market or Fair Value of the fund’s Investments plus Current Assets (including accrued income) less Current Liabilities and

57

Provisions (including accrued expenses). This price will be published on our company’s website. Prohibition of rebates Section 41 of the Insurance Act, 1938 states: 1. No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. 2. Any person making default in complying with the

provisions of this section shall be punishable with fine which may extend to five hundred rupees.

What investment funds can I invest in? The policy is fully unitised with a range of funds to match your needs and approach to risk. (By risk we mean the likely volatility in the value of units in the fund.) Each investment fund is composed of units. All the units in a fund are identical. You can choose from the following funds: Liquid fund The Liquid fund invests 100% in bank deposits and high quality short-term money market instruments. The fund is designed to be cash secure and has a very low level of risk; however unit prices may occasionally go down due to the use of short-term money market instruments. 58

Secure Managed The Secure Managed fund invests 100% in Government Securities and Bonds issued by companies or other bodies with a high credit standing, however a small amount of working capital may be invested in cash to facilitate the day-to-day running of the fund. This fund has a low level of risk but unit prices may still go up or down. Defensive Managed 15% to 30% of the Defensive Managed fund will be invested in high quality Indian equities. The remainder will be invested in Government Securities and Bonds issued by companies or other bodies with a high credit standing. In addition, a small amount of working capital may be invested in cash to facilitate the day-today running of the fund. The fund has a moderate level of risk with the opportunity to earn higher returns in the long term from some equity investment. Unit prices may go up or down. Balanced Managed 30% to 60% of the Balanced Managed fund will be invested in high quality Indian equities. The remainder will be invested in Government Securities and Bonds issued by companies or other bodies with a high credit standing. In addition a small amount of working capital may be invested in cash to facilitate the day-today running of the fund. The fund has a higher level of risk with the opportunity to earn higher returns in the long term from the higher proportion it invests in equities. Unit prices may go up or down. Growth fund The Growth fund invests 100% in high quality Indian equities. In addition a small amount of working capital may be invested in cash to facilitate the day-to-day running of the fund. The fund has a higher level of risk with the opportunity to earn higher returns in the long term from the investment in equities. Unit prices may go up or down.

59

Financial Consultant Recruitment CERTIFIED FINANCIAL CONSULTANTS AND CORPORATE AGENTS In HDFC Standard Life the policies are sold through Certified Financial Consultants and some channels.

Definition of An Agent The Indian Contract Act of 1872 defines an agent as “a person employed to do any act for another or to represent another in dealing with a third person.” Why We Have Chosen the Title ‘Consultants’? Typically people associate agents with product providers, who merely act as middlemen, between the customer and the company. HDFC Standard Life looks at its representatives much more than just agents.

60

Our representatives are professional and skilled advisors who are able to recommend the best solutions based upon the individual customer’s needs. Furthermore, with the imminent entry of new players into the market, we believe products will become more complex, and customer expectations of financial advisors will increase. Given this environment we believe that the successful advisor will have to assume the responsibility of a financial ‘Consultant’. The title Consultant therefore reflects the image we wish to develop in the market. Functions of an Agent The duties and functions of an agent are as follows: 1.

To contract business according to the directions given by the person/company they represent.

2.

To exercise reasonable and diligence and skill while conducting business.

3.

To submit paper accounts to the person/company.

4.

To

act

in

good

faith

towards

the

person/company

(disclose all material facts, etc.). 5.

To perform his duties personally.

Criteria for becoming an Agent It is required that a person making an application for a license to act as on insurance agent:  Is a citizen of India  Is at least 18 years of age as on the date of application

61

 Possesses the minimum educational qualification of a pass

in 12th Standard of equivalent examination conducted by any recognized Board/Institute of Education. If the person resides in a place with a population of less than five thousand, he should at least be 10th standard pass or equivalent examination.  Has not been found to of unsound mind by a Court of competent jurisdiction.  Has not been found guilty of criminal misappropriation or criminal breach of trust or of cheating or of forgery or of an abatement of or attempt to commit any such offence.  Has not been found guilty of, or has not knowingly participated in or connived at any fraud, dishonesty or misrepresentation against an insurer or an insured.  Has not been found violating the code of conduct as may be specified by the IRDA regulations. Training of Insurance Agents The IRDA have specified that each person aspiring to e an agent has to undergo practical training. The training has  To be of 100 hours in life insurance business, as the case may be.  To be conducted by an institute approved and notified by IRDA. Licensing Process The

licensing

process

would

start

with

the

insurer

sponsoring a candidate for practical training. On completion of the mandated training, the applicant has to make an application 62

in specified format for undergoing a written exam. On clearing of both his written and oral exam, the applicant will make an application to the ‘designated person’ of the sponsoring insurer. Based on meeting all the above requirements and submission of application fee, the designated person will issue the license along with the identity card. The license is valid for a period of 3 years unless terminated or surrendered. For any renewal of license, the agent needs to undergo additional 25 hours of training in either life or general from an approved institution. If the designated person refuses to grant or renew a license under this regulation, he shall give the reasons therefore to the applicant. Code of Conduct for Insurance Agents Every person licensed to act, as an insurance agent shall be subject to a code of conduct specified below: Every agent shall  Identify himself and the insurance company of which he is an insurance agent, disclosing his certificate of license to the prospect on demand for the purpose of soliciting or procuring insurance business.  Disseminate

the

requisite

information

in

respect

of

insurance products offered for sale by his insurer, and also by other insurers in the market, taking into account the needs of the prospect for insurance before offering any insurance product.  Disclose the commission offered to him in respect of the insurance product offered for sale.

63

 Determine the premium to be charged by the insurer for the insurance product offered for sale.  Explain to the prospect in regard to information required in the proposal form by the insurer, and also the importance of disclosure of material information to the insurer.  Bring to the notice of the insurer any habits or income of the prospect, in the form of a report (may be called as Insurance Agent’s Confidential Report) along with every proposal submitted to the insurer, any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect.  Inform the prospect regarding the acceptance of the proposal by the insurer promptly.  Ensure that all possible steps for delivery of the policy bond from the insurer to the prospect within 45 days of the date of proposal (insurer is ultimately responsible for the delivery of the policy documents).  Obtain the requisite documents (including medical reports in case of life insurance business) at the time of filing the proposal form with the insurer; and other documents asked by the insurer for completion of the proposal.  File with the designated person, the certified copy of his agreement with the insurer (copy of the agreement shall be certified by any officer of the insurer authorized by the designated person) within fifteen days from the date of his appointment as insurance agent as mentioned in regulation 4 above.

64

 Handover a copy of the proposal form or any other form to the proponent before submitting such form to the insurer for purchase of insurance contract.  Abide by any matter that has been notified by the Authority in its notifications. Every agent shall not  Solicit or procure insurance business without holding a certificate of valid license.  Advise or induce the prospect to omit to disclose the material information in the proposal form.  Submit wrong information in the proposal form or in the documents submitted to the insurer for acceptance of the proposal.  Utilize his handwriting in respect of answers to the questions in the proposal form, which contains the signature of the prospect.  Provided that if the prospect is an illiterate, the handwriting in the proposal form shall be from another person who is not an insurance agent, and such proposal shall be countersigned by him (the insurance agent) as a witness.  Utilize his handwriting in respect of answers to the questions in the medical reports.  Behave in discourteous manner with the prospect.  Interfere

with

any

proposal

introduced

by

any

other

insurance agent.  Offer better terms and conditions than offered by his insurer.

65

 Part to or share his agency commission with any prospect or with any other person.  Receive a share of the benefit payment payable to the policyholder or the claimant or the beneficiary.  Give advice to any policyholder for termination of the insurance contract with any insurer in order to effect a new proposal within one hundred eighty days from date of such termination.  Indulge in any action, which is against the agreement between him and his insurer.  Apply for fresh license to act as an insurance agent if his earlier one has been terminated by the Authority within five years from the date of termination.  Remain or become a director of an insurer carrying on insurance business in India.  Obtain the signature of the proposer, or the signature of the life assured, or the signature of any other relevant person, in any form, which remains unanswered or blank to the questions therein at the time of such signature.  Every insurance agent shall, with a view to conserve the insurance business already procured from all persons who have become policyholders of the insurer through him.  Advise

every

policyholder

to

effect

nomination

or

assignment or change of address or exercise of options, as the case may be, offering necessary assistance in this behalf wherever necessary.  Make every attempt to ensuring remittance of the premiums by the policyholders within the stipulated time.

66

 Make every attempt to prevent the lapsation of policy to enable the policy to remain in force for the full benefits under the policy.  Render

necessary

assistance

to

the

policyholders

or

claimants or beneficiaries in filling and filling claim forms and in complying with the requirements laid down in relation to settlement of claims by the insurer.  An insurance agent shall comply with sections 40, 40-A, 41, 42, 44, 48-A, 102 and 103 of the Act, or regulations or notifications of the said Act or of any relevant Act, or of any notification regarding code of conduct, or any direction by the Authority.  Explanation: In this regulation, ‘any other for’ means such forms, which shall be supplementary to the proposal form, which is furnished to the insurer by the proponent at the request of the insurer. For example, the proponent may inform in a form to the insurer to reduce the sum assured or the plan of assurance or the mode of payment of premium, after the proposal form has been furnished to the insurer before the acceptance of insurance contract. Termination of Agency The license of an agent will get terminated in the event of • Cancellation or non-renewal of the license. • The

agent

acquiring

any

of

the

following

disqualification 1. Permanent incapacity 2. Found of unsound mind by a court

67

legal

3. Conviction of a criminal misappropriation 4. Criminal breach of trust 5. Cheating or forgery 6. Any violation of the code of conduct Please note that the total commission payable in the first 5 years is capped at 60% of the annual premium. This means that if we pay 40% in year 1, we can only pay a further 20% between years 2 and 5 inclusive (Example – 40% in year 1 followed by 5% in years 2 to 5). Personal Competencies required: Interpersonal sensitivity  Planning and organizing  Professionalism & Business Integrity  Decision making & judgment  Customer focus  Contribution to Results (including Preference for Action, Achievement Drive)  Communication & influencing  Decision making and judgment  Strong Network in the NCR  Result oriented dedication

Sales Promotion Through Recruitment of Financial Consultants 68

Starting The Project: The project was started by Understanding the products and the selection criteria specified by IRDA to become a Agent of the company, after getting familiar with the products of the company and the norms of IRDA the task was to recruit the Financial Consultants for the company with a desired Profile. Market Segmentation:

Market is full of peoples but every candidate taken from the market is not a promising candidate hence market segmentation is essential to employ quality people to have quality results. Selling Insurance requires a good understanding about the policies hence following profile were chosen to give the agency they are: 1.Charted Accountants 2.Mutual Fund Advisors 3.Tax Consultants 4.High Income Group

Tele calling After Market segmentation Tele calling was the medium to interact with the peoples on phone line and then fix the appointments for the further conversation. Tele calling was done on the data provided by management of the company and some data was collected from the sources like Just Dial Services, Internet, Display Boards, and References. While Tele calling a proper pitch was developed to talk to peoples because it is a job to perform as the best offering which a person can think of, while offering the same thing a different way was developed to talk to people having different background. Cold Calling Cold calling was also tried as a tool for sales promotion but it has given results in very few cases, the reason behind less success of this source was unavailability of the people at their office or they 69

are busy and few of them take cold calling casually. The profile that was targeted requires proper channel to contact them and move forward.

Fixing Appointments and meeting People

While Tele calling a proper pitch is maintained to meet the persons requirement by offering them the best what they want, when a person is convinced on phone, a appointment was fixed to have further discussion about the products. After fixing the appointments it is very important to reach in time and proper documentation is required about the appointments so that one should not miss an appointment in confusion. Supporting Documents really help a lot while meeting peoples, as people believe in the proofs. While taking to people it was observer that with the information about the industry sometime making a relationship with them by any means helps a lot in doing a job. Follow Ups

Follow up was instrumental in the entire project this is the thing to which I will like to give utmost importance. As selling insurance and appointing Financial consultants requires two or more than two meetings hence proper follow up is required to have good results. The reason behind giving so much importance to follow up is any person who is targeted to offer the agency may not in a position to take the agency at that point of time or he wants to weigh all the alternatives available in the market. In such cases follow-up becomes the Key to Success.

Final Documentation Final Documentation is done when a person gets ready to take the agency. This step requires all the basic formalities to be completed. After the documentation the training starts and after taking a training of 100 hours specified by IRDA a candidate has to appear for the test and once he passes the test he/she becomes liable to sell Insurance. 70

Suggestions and Recommendations Marketing Support: - More marketing support is required to create awareness in the market about the policies of the company as done by the close competitors. It was observed that people are really very conscious about the advertisement run by the company, and it can affect the sales of the company. While appointing agents this problem was faced as they questioned about the less marketing support by the company. Good Attractive Brochures: -Good attractive Brochures are required to have a good impact on the customers because once the policy is communicated by the agent to the customer the brochure remains the key representative of the company. Hence agents requires good more attractive brochures.

More Number of Policies: - It was observed that if a company have more number of policies designed to cater the specific need of people then it will have a different impact on people. HDFC Standard Life has a lot of options available to cater the needs of different segments but if they can provide the policies under the specific name then it would be very beneficial in sales promotion. Company also needs to concentrate on the competitors to have some good policies to beat the close competitors. Service Satisfaction: - Service satisfaction is very important in the service industry and HDFC as a group has a good name in rendering quality services but due to some loopholes in some branches the services gets affected and hence have wrong impact on customers mind about the whole group hence service has to be given the utmost important to create goodwill in the market. 71

Continuous up gradation: - Financial Consultants wants a continuous up gradation about the policies of the company. They should be continuously upgraded as HDFC Standard life does and this point should be highlighted while offering the agency.

Conclusion Today marketing must be understand not in the old sense of making a sale “telling and selling”-but in the new sense of satisfying customer needs. While selling life insurance one does not sell any tangible product That’s why it becomes very essential to understand customer needs, which will help to distribute and promote the product effectively and it will be easy to sell the products. Life Insurance is all about selling life, for which one should be very realistic and practical because it’s a matter of a person’s life. Selling of insurance policies is not an easy job it is all about convincing people, winning their confidence and assuring them for a safe future. HDFC Standard life Insurance is most respected private life insurance company. In very short time it has won the confidence of people because of its unique features like good services and promising future in insurance sector. While working on this project I came to know facts about insurance business, that there is a cutthroat competition and every company is trying its best to sell the products. Hence it is required to strengthen the selling chain so as to compete in the market, as a part of my project I have tried to strengthen the chain by employing few people for the company with a desired profile. I have discussed various issues in the project, which should be taken care of while recruiting the financial consultants for the company.

72

Lastly I would like to conclude by saying quoting the following quote, which signifies the importance of Life insurance in ones, Life.

“Iron is strong but fire melts it, Man is strong but death is stronger, So survive death through Life Insurance”

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