Introduction To Insurance Sector

SUMMER TRAINING REPORT ON AN INTRODUCTION ABOUT INSURANCE SECTOR WITH SPECIAL REFERENCE TO HDFC STANDARD LIFE INSURANCE COMPANY LIMITED (Housing Development & Finance Corporation) AT PATIALA Submitted in partial fulfillment of the requirement for the degree of Masters of Business Administration (Session 2006-08)

Submitted to:The Department of Management RIMT (Institute of Engineering & Technology) Mandi Gobindgarh Submitted By: Rajnish Kaushal. MBA- II SEM. ROLL NO. 6944

THE DEPARTMENT OF MANAGEMENT RIMT (Institute of Engineering &Technology) Mandi Gobindgarh. CONTENTS 1)

Preface

2)

Certificate

3)

Acknowledgement

4)

Introduction

Definition Need for Life Insurance Role of Govt. Role of Life Insurance Evaluation of Insurance Industries in India Future Scenario 5)

Opening of Insurance sector in India

6)

Changing expectation of customer

7)

Major player

HDFC standard life insurance Life Insurance Corporation ICICI Prudent Om Kotak Mahindra Birla Plus Sun Life

8)

Comparison of the unit linked plan of various companies

9)

Research Methodology

Objective and limitation 10) Data Analysis and findings 11)

Conclusion

Finding Suggestion 12)

Appendices

Query Bibliography

AC K N OWLE D G E M E NT I deem it as my personal duty to thank all those who proved indispensable in the completion of my project. I express my gratitude to Dr.Harpreet Singh(H.O.D) RIMT Institute of Engineering & Technology, Mandi Gobindgarh for his constant guidance, encouragement and inspiration given throughout the course of study. I would also like to thank Mr. Tejpreet Singh Asstt. Sales Manager, Patiala who allow me to undergo training at HDFC Standard Live Insurance Patiala. Least but not last I would like to thank all the Staff members who helped me in completing the project.

Rajnish Kaushal.

I NS U RAN C E Insurance is basically risk management device. The losses to assets resulting form natural calamities like fire, flood, earthquake, accident etc. are met out of the common pool contributed by large number of persons who are exposed to similar risks. This contribution of many is used to pay the losses suffered by unfortunate few. However the basic principle is that losses should occur as a result of natural calamities or unexpected events which are beyond the human control. Secondly insured person should not make any gains out of insurance. It is natural to think of insurance of physical assets such as motor car insurance or fire insurance but often be forget that creator all these assets is the human being whose effort have gone along way in building upto assets. In that scene human life is a unique income generating assets. Unlike physical assets which decreases with the passage of time. The individual become more experience and mature as he advances in age. This raises his earnings capacity and the purposes of life insurance is to protect the income to individual and provide financial security to his family which is dependent of his income in the event of his pre mature death. The individual also himself also himself also needs financial security for the old

age or on his becoming permanently disabled when his income will stop. Insurance also has an element of saving in certain cases. Insurance is rupees 400 billion business in India and yet its spread In the country is relatively thin. Insurance as a concept has not being able to make headway in India. Presently LIC enjoys a monopoly in Life Insurance business while GIC enjoys it in general insurance business. There has been very little option before the customer to decide the insurer. A successful passage of the IRA bill have clear the way of private sector operators in collaboration with their overseas partner. It is likely to bring in a more professional and focuses approach. More over the foreign players would bring sophisticated actuarial techniques with them which would facilitate the insurer to effectively priced the product. It is very important that the trained marketing professionals who are able to communicate specific features of the policy should shall sell the policy. In the next millennium all the activities would play a crucial role in the overall development and maturity of the insurance industry. Definition General Definition:In the words of D S Hansell, “ Insurance may be defined as a social device providing financial compensation for the effects of misfortune, the paying being made from the accumulated contributions of all participating in the scheme.” Contractual Definition:In the words of justice Tindall “insurance is a contract in which a sum of money is paid to the assured as consideration of insure’ incurring the risk of paying a large sum upon a given contingency. Characteristics of Insurance Sharing of risk Co-operative device Evaluation of risk Payment on happening of special event The amount of payment depends on the nature of losses incurred

Need of the Life Insurance:The original basic intention of life insurance is to provide for one’ family and perhaps others in the event of death. Originally, polices were to provide for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance became more established. It was realized what a useful tool it was in a number of situations, including: 1. Temporary needs threats: The original purpose of Life Insurance remains an important element, namely providing for replacement of income on death etc. 2. Regular saving: Providing one’s family and oneself, as a medium to long term exercise (through a series of regular payment of premiums). This has been become more relevant in recent times as people seek financial independence from their family. 3. Investment: Put simply, the building up of saving while safeguarding it from ravages of inflation. Unlike regular saving products are traditionally lump is investments, where the individual makes are one time payment. 4. Retirement: Provision for one’s on later years has become increasingly necessary. Especially in charging culture abs social environment, one can buy a suitable insurance policy which will provide periodical payments on one’s old age. BENEFITS: 1. It is superior to traditional saving machine As well as providing a secure vehicle to build up saving etc. it provides pieced of mind to the policy holder. In the event ultimately death, of say, the main earner in the family, the policy will pay out guaranteed sum assured, which is likely to be significantly more then the total premiums paid. With more traditional, saving vehicles such as fixed deposits, the only return would be the amount invested plus any interested accrued. 2. It encourages saving and forces thrift:

Once an insurance contract has been entered into, the insured has an obligation to continue paying premiums, until the end of the term of policy, otherwise the policy will lapse. In other words, it becomes compulsory for the insure to save regularly and spend wisely. In contrast saving held in a deposit account can be accessed or stop easily. 3. It provides easy settlement and protection against creditors Once a person appointed for receiving the benefits or a transfer of rights is made (assignments), a claim under the life insurance contracts can be settled easily. In addition, creditors have no right to any momies by the insurer, where the policy is written under trust. Under the married woman’s act the money available from the policy forms a kind of trust which creditors can not claim on. 4. It can be enchased and facilities borrowing. Sum contracts may allow the policy can be surrendered for a cash amount, if policy holder is not in a position to pay the premium. A loan, against certain policy, can be taken for a temporary period to tide over the difficulty. Presence of life insurance policy facilitates credit for personal or commercial loans as it can be offered as collateral security. 5. Tax relief: The policy holder obtains income tax rebates by paying the insurance premium. The specified from of saving which enjoys a tax rebate u/s 88 of the income tax act. Include Life Insurance premiums and contribution to a recognized PF etc. Govt. Role: Govt. keen to reduce the dependency on the state via private pension provisions. They have a choice between using compulsion and incentives. Most of the govt. chooses the later method. Tax relief is guaranteed in the pension plants and is extremely generous, reflecting the value that the govt. and the society and large place on the provision of retirement benefits. Tax treatments of the benefit caries by country and by benefits.

In India, the proceeds of gratuity and provident fund are tax free in the hand of the members. In UK a certain amount of the proceeds can be taken as tax lump sum and reminder as taxable income. Benefits due on with drawl from scheme or approved pension plan. Role of Life Insurance Role1: Life Insurance as ‘investment’ insurance is an attractive option for investment. While most people recognize the tax hedging and tax saving potential of life insurance, many are not aware of its advantage as an investment option as well as, insurance products yields more compared to regular investment option as this is besides the added incentives (read bonuses) offered by insurers. You can not compare an insurance product with other investment schemes for simple reason that it offers financial protection form risks. Something that is the missing in non insurance products. Infect, the premiums you pay for an investment against risk. Thus, before comparing with other scheme, you must accept that a part of total amount invested insurance life insurance goes towards providing for the risk cover, while the rest is used for savings. Insurance life Insurance, unlike non-products, you get maturity benefits on survival at the end of the term. In other words, if you take a life insurance policy for 20 years and survive the term the amount investor as premium insurance the policy will come back to you with family of the deceased will receive the sum assured. Now, let us compare insurance as an investment options. If you invest Rs. 10000/- insurance PPF, year money grows to Rs. 10950 at 9.5% interest over a year. But insurance this case, the access to your funds will be limited one can withdraw 50% of the initial deposit only after four years. The same amount of Rs. 10000/- can give an insurance cover of up to approx. Rs. 5 to 12 lacs. (depending upon the plan, age and medical condition of life insure etc.) and this amount can become immediately available to the nominee

of the policy holder on death. Thus insurance is a unique investment avenue that delivers sound returns insurance addition to protection. Role 2: Life Insurance as “Risk Cover” First and foremost, insurance is about risk cover and protection – financial protection, to be more presize – to help out last unpredictable losses. Designed to safe guard against losses suffered on account of an unforeseen events. Insurance provide you with that uniqueness scene of security that no other form of investment provides. By buying life insurance, you buy peace of mind and are prepared to face any financial demand that would hit the family incase of an untimely demise. To provide such protection, insurance firms collect contributions for many people who face the same risk. A loss claim is paid out of the total premium collected by the insurance companies, who act as trustees to the monies. Insurance also provides a safeguard insurance the case of accident or a drop insurance income after retirement. As accident or disability can be devastating and an insurance policy can lend timely support to the family insurance such time. It also comes as a great help when you retire, insurance case untoward incident happens during the term insurance the policy. With the entry of private sector player insurance insurance, you have a wide range of products and service to choose from. Further, many of these can be further customizes to fit individual/group specific needs considering the amount you have to pay now, its worth buying some extra sleep. ROLS 3: LIFE Insurance as “Tax planning.’’ Insurance serves as an excellent tax saving mechanism too. The Govt. of India have offered tax incentives to life insurance products insurance order to facilitate the flow of funds into productive assets, U/S 88 OF Income Tax Act 1961, an individual is entitled to rebate 20% On the annual premium payable on his/her life and life of his/her children or adult children. The rebate is reducible from tax payable by an individual or Hindu undivided family. This rebate is can be availed up to a maximum of Rs 12000/- on payment of yearly premium of Rs

6000/- a year, you can buy anything upward of Rs 100000/- in sum assured. This means that you get Rs 12000/- tax benefit. This rebate is deductible from the tax payable by an individual or a Hindu undivided family. THE EVALUATION OF INSURANCE INDUSTRY IN INDIA: Life insurance in its modern form is a western concept. The Indian insurance industry is as old as it is insurance other part of the world. Although life insurance business has been taking shape for the last 300years, it came to India with the arrival of Europeans. First Life Insurance Company was established insurance 1818 as Oriental Insurance, mainly to provide for widows of Europeans. The companies that follow mainly catered to Europeans and charged extra premium on Indian Lives. The first insurance company insuring Indian Lives at standard rates was BOMBAY MUTUAL LIFE INSURANCE COMPANY which was formed insurance 1870. This was also the year when Ist insurance act was passed by the British Parliament.; the years subsequent to the Swadeshi movement saw the emergence of several insurance companies. At the end of the year 1995 there were 245 insurance companies AII the insurance companies were nationalized insurance 1965 and brought under one umbrella. LIFE INSURANCE CORPORATION OF INDIA (LIC) which enjoyed a monopoly of the life insurance business until near the end of 2000. By enacting the IRDA act 1999. the Govt of India effectively ended Lick’s monopoly and opened the door for private insurance companies Collaboration of Indian Companies with Foreign Companies. FUTURE SCENARIO:Before looking insurance future prospectus of the insurance industry, we must take a look into its past history. The independent India started with private sector insurance companies. These companies were nationalized by the Union Govt. in 1965 to form a monopoly known as Life Insurance Corporation of India has being under public sector for over four decades till the govt. opened the insurance sector for private companies in 2000.

When the insurance Industry was nationalized, it was consider a land mark and a milestone on the way to the socialistic pattern of society that India had chosen after independence. Nationalization has lent the industry solidity and growth which is unparalleled. Forever, along with these achievements there also grew a feelings of Indian Company Kotak Mahindra Tata Group Sundram Finance Spic ILFC Alpic Finance 20th Century Vysa Bank Cholamandlam SBI HDFC ICICI Hindustan Times IDBI Max India

Foreign Partner Chubb AIG Winterthur Metlife Cigna Allianz Canada Life ING Axa Alliance Capital Standard Life Prudential Commercial Union Principal New York Life

Insensitivity to the needs of the market, traditions insurance adoption of modern practices to upgrades technical skills coupled with a scene of lethargy which probable led to a feeling amongst that the insurance industry was not fully responsive to customers needs. The life insurance corporation of India has not succeeded in extending the insurance cover to all the needy people of the country due to various reasons. LIC could not insure very fast growth of insurance in India even in a long period extending over four decades. Hence the penetration of insurance is very low insurance India. The following indicates as explained and support this contention: 1.

While per capita insurance premium in developed country is high, it is quite low insurance India. For instance, per capital insurance premium insurance India insurance 1999 was only $8 while it was $4800 for

Japan and $1000 for Republic of Korea, $887 for Singapore, $823 for Hong-Kong and $144 for Malaysia. Similarly the penetration of insurance is also assessed by the ratio of

2.

insurance premium to gross domestic products in a country. While insurance premiums as a percentage of GDP was 14% in Japan 13% for South-Africa, 12% for Korea, 9% for UK and France. It was only around 2% insurance India insurance 1999. Hence the 34th penetration of insurance is low here. 3.

the penetration of insurance is also assessed by a ratio of insurance premium to gross domestic savings (GDS). While insurance premium as a percentage of GDS was 52% for UK, 35% for other European and American countries, it was only 9% insurance Indian Insurance 1999. hence even this index indicates low level of penetration of insurance insurance India.

4.

the share of India insurance the world market insurance terms of gross insurance premium is again very small for instance while Japan 31%, European union 25%, South Africa 2.3%, Canada 1.7% share of global insurance premium to is only 0.3% for India.

OPENING OF INSURNACE SECTOR INSURANCE INDIA The Union Govt. of India decided to open the insurance sector to make it more dynamic and customer friendly. Objective of Liberalization of Insurance:The main objective for the opening up the insurance sector to the private insures as under: To provide better coverage to the India citizens.  To augment the flow of long term financial resources to finance the growth of infrastructure. Insurance Industry in the year 2000-2001 had 16 new entrants, namely: Life Insurers: S. No.

Registration

Date of Reg.

Name of the Company

Number

1 2 3

101 104 105

23-10-2000 15-11-2000 24-11-2000

HDFC Standard Life Insurance Company Ltd. Max New York Life Insurance Co. Ltd. ICICI Prudential Life Insurance Co. Ltd.

4

107

10-01-2001

Kotak Mahindra Old Mutual Life Insurance Ltd.

5 6 7 8 9 10

109 110 111 114 116 117

31.01.2001 12.02.2001 30-03-2001 02-08-2001 03-08-2001 06-08-2001

Birla Sun Life Insurance Co. Ltd. Tata AIG Life Insuance Co. Ltd. SBI Life Insurance Co. Ltd. ING Vysya Life Insurance Co. Pvt. Ltd. Bajaj Allianz Life Insurance Co. Ltd. Metlife India Insurance Co. Pvt. Ltd.

General Insurers: S. No.

Registration Number

Date of Reg.

Name of the Company

1 2 3

102 103 106

23-10-2000 23-10-2000 04-12-2000

Royal Sundaram Alliance Insurance Co. Ltd. Reliance General Insurance Co. Ltd. IFFCO Tokio General Insurance Co. Ltd.

4

108

22-01-2001

TATA AIG General Insurance Co. Ltd.

5 6

113 115

02-05-2001 03-08-2001

Bajaj Allianz General Insurance Co. Ltd. ICICI Lombard General Insurance Co. Ltd.

Yr: 2001-2002 (From 1st Jan 2001 to Dec. 2002) Insurance Industry in this year, so far has 5 new entrants’ namely S. No.

Registration Number

Date of Reg.

1 2

121 122

03-01-2002 14-05-2002

Name of the Company

AMP Sanmar Life Insurance Co. Ltd. Aviva Life Insurance Co. Pvt. Ltd.

General Insurers: S. No.

Registration Number

Date of Reg.

1 2 3

123 124 125

15-07-2002 27-08-2002 27-08-2002

Name of the Company

Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation Ltd. HDFC-Chubb General Insurance Co. Ltd.

Yr: 200-2004 (From 1st Jan. 2003 till date) Insurance Industry in this year, so far has 1 new entrants: namely Life Insurers: S. No.

Registration Number

Date of Reg.

1

127

06-02-2004

Name of the Company

Sahara India Insurance Co. Ltd.

Yr: 2004-2005 Insurance Industry in this year, so far has 1 new entrants; namely Life Insurers: S.

Registration Number

Date of Reg.

Name of the Company

No.

1

128

17-11-2005

Shriram Life Insurance Co. Ltd.

CHANGING CUSTOMER EXPECTATIONS IN INSURANCE SECTOR PRE TO POST LIBERALIZATION Research Objective & Methodology Objective:- To provide insights into customer experience prior to recent liberalization, mapping changes in expectations after liberalization and perceived performance of insurance players vis expectations. Research Approach:- In depth qualitative study to capture indicative trends which can be statistically validated, if required. Geographical Coverage: Delhi, Mumbai, Kolkata, Hyderabad & Bangalore. RESEARCH DESIGN RESPONDENT SEGMENTS Life Policy Holders • Old Customer: Taken insurance prior to liberalization only • Evolved customer: Taken insurance both insurance pre and post liberalization • New Customer: Taken insurance in post liberalization only Non Life Policy Holders • Motor Vehicle Insurance • Health Insurance • Property Insurance • Personal Accident Insurance Non Policy Holders (Life) RESEARCH DESIGN SAMPLING PLAN RESPONDENT CATEGORY LIFE POLICY

SEC A 48

SEC B 41

SEC C 37

TOTAL 126

NON-LIFE POLICY NON POLICY (LIFE) TOTAL

RESPONDENT CATEGORY LIFE POLICY

43 14 105

21 15 77

16 16 69

Old Evolved Customer Customer 47 40

New Customer 39

80 45 251

TOTAL 126

The Insurance company faces financial challenge when it is not prepared for disaster management readiness for catastrophe claims and for lack of systematic approach insurance claims settlement strategies with cash flow. PRE PURCHASE PROCESS: LIFE Pre Liberalization Post Liberalization Motivating Factor(s) for considering insurance • Security 43% • Security 50% • Savings 14% • Savings 34% • Tax Rebate 43% • Tax Rebate 16% Children’s education. retirement plan.

• •

• • •

Daughter’s

marriage

Sources of information on insurance & product awareness Friends, Colleagues, Relatives • Additionally form direct mailers, and Agent consumer meets internet & media (mass media & outdoor) Low awareness of several • Rising level of aeareness of new insurance products due to poor communication is spite of products of both LIC and private availability companies Choice of first policy Money Back 60% • Money Back 42% Endowment 40% • Endowment 48% Whole Life 0% • Whole Life 10% This change insurance product-mix reflects maturing of the insurance customer

Approach of the Agent and Consumer’s Experience • Approach of Agent-informal and • Approach more professional, through referral some times aggressive (insurance one or two private • Long term family type of company agents. relationship • Proactive insurance constacting • Often selling insurance as prospectus directly, often has to commodity start form selling concept of • Average communication skills insurance rather than product.

• Conducts financial health check up and then offers suitable products/solutions • Better communicator & presenter • Handles larger number of queries Awareness & Consideration of private players Private Overall SECA SEC B SEC C companies Awareness 73% 93% 30% 50% Consideration 35% 65% 30% 10% SECB & C prospect not influenced much by direct contact of agent and generally takes decision only after consulting informed family member or friend.

AWARENESS OF NEW PRODUCTS-LIFE • Only some customers have mentioned new products such as • Products with multiply riders medical accident, waiver of premium rider • Though most SEC A & some SEC B customers have generally heard liberalization but unable to provide any details. • Flexi premium plans-product with singly premium and shout time premium option. PURCHASE PROCESSL : LIFE Pre Liberalization Post Liberalization Role of Agent and customer’s Experience • Medical Examination: In several • Medical Examination: Both LIC cases details filled by agent and private company customers medical examination very examination, arranged by agent perfunctory • Experience more satisfactory, • Purchase experience with agent agent maintains regular contact reasonably satisfactory, but often post agent not insurance touch later. • Purchase phase also Product Offering • Limited Products choices and • Product with multiple ridersless flexible products medical, accident, waiver of premium rider • Choice often determined by • Pension / retirement benefit Agent push plans flexi premium, saving & security plans Discount Offering Practices • No. of customers getting • Customers getting discount:33%

discount: 50% (Highest insurance Delhi) • Fate of discount:25%-50% of • Rate of discount: more less same first year premium Policy Deliver • Mode-Registered post for LIC, • Mode-Registered for LIC-courier Hand delivered by agent insurance for private companies 23% case • In both cases policy comes in • Time taken attractive, Protective plastic jacket • Up to 1 week 0% • Time taken LIC Private Co. • One Month 65% Up to 1 week 5% 85% • > 1 month 35% Upto one month 77% 15% > 1 month 18% 0% CLAIMS SETTLEMENT EXPERIENCE-LIFE (LIC ONLY SO FAR) FINAL MATURITY CLAIM • Involvement of agent very low (35%) • Payment mostly within 15 days, but 1 to 3 month insurance some situation such as change of survivors address etc. • Most customer are satisfied with the overall process. DEATH CLAIM • Involvement of agent low though considered critical by nominee • Payment takes 3 to 6 month cases, in dispute cases 9 to 12 months. • Process very cumbersome and people faced many difficult CHANGING CUSTOMER EXPECTATIONS-LIFE TIME EXPECTATIONS • First premium receipt (FPR) delivery to customer insurance 2 days. • Policy document should be delivered within 7 days from FPR • Premium notice should arrive 30 days before due date • Final maturity payment should reach within 10 days of maturity date • Death claim should be settled insurance 30 days. EXPECTATIONS FROM AGENT • Should Give Information On All Products & Not Push High Commission Products Only.

• Should maintain regular contact with client to give information on new products/services • Premium payment reminder should come form agent also (besides form company) • Should college premium payment, deposit and handover receipt (from his existing customer who desire this service) • Should be actively involved insurance Death Claims settlement and Lapses Policy Revival. CHANGING CUSTOMER EXPECTATIONS-LIFE EXPECTATIONS FROM COMPANY • Premium notice should be sent regularly • Premium payment at banks, internet and special collection centers (Om Kotak Insurance Mumbai), Payment through Credit Card • Payment through Credit Card • Most SECA & some SEC b would consider payment through credit card expect customers insurance Delhi who wanted to keep this as last option. • Company should bear service charge on credit card transaction • Most SEC B & all SEC C not inclined to pay through credit card, prefer to pay through SEC B & some SEC C were ready for credit card payment system • Facility of purchasing policy through more channels. • Flexible/wider range of products. CHANGING CUSTOMER EXPECTATION-LIFE EXPECTATION FROM COMPANY (CONTD.) • Focus on Consumer Education • Fine Prints/Devil Insurance Detail , Correct Disclosures

• Information

about

systems/processes,

particularly

handling

of

complaints & grievances • Transparent and fair dealings • Information on new product/services through call centers, internet, mailers and consumer meets. Set up Toll Free Help Line, • Where customer is compelled to change agent due to poor service, new agent through’ whom premium is deposited be entitled to the commission thereafter. ROLE OF IRDA • Educate public on regulatory safeguards, investment guidelines and plough back of profits (several people had expressed concern about security of their money, credibility of private insurance company’s investment of funds insurance foreign markets and repatriation of profits to foreign countries) • Inform public on Social and Rural Obligations of private players (several people believed that only LIC was responsible for insuring the poor). POST PURCHASE PROCESS : LIFE Pre Liberalization Post Liberalization Premium Notice Intimation form Company/Reminder from Agent • Notice form company 42% • Reminder form Agent 67% • Reminder form Agent 47% • Notice form company 77% Model of premium Payment • Cash 43% • Cash 41% • Cheque 57% • Cheque* 49% • Credit Card 10% • No case of payment through internet was observed, due to low awareness and security apprehensions. # Include deposits at private company collection centers Who Deposits Premium ? • Self* 44% • Self* 37% • Agent 49% • Agent 49%

• Salary Saving scheme 7% • Salary Saving Scheme 14% • Includes relatives & friends • Includes relatives & friends Correspondence (other than premium notice form Company/Agent • Generally no correspondence • Mailers form both private form either company or agent companies & LIC on product & expect for late premium payment services, greeting cards on reminder from company birthdays, anniversary and New Year • Agent maintained informal • Phone calls form private contact with close customers company call centers • Agent insurance regular contact for offering. New products Delay Insurance Premium Payment • Incidence of delay high 30% • Incidence of delay low 15% (due to irregular receipt of (more regular receipt of premium premium notice form notice form company /reminder company/reminder form agent) form agent) CHANGING TRENDS INSURANCE SAVINGS PATTERN Pre Liberalization Post Liberalization Saving instrument % of respondents Saving instrument % of respondents Insurance 23 Insurance 33 Bank Deposit 28 Bank Deposit 44 PPF 19 PPF 8 NSC 12 NSC 0 Shares 7 Shares 3 Post Office 7 Post Office 3 Bonds 0 Bonds 9 Gold 4 Gold 0 Total 100 Total 100 * when the respondents were asked where they would invest their extra income, if any, the top responses were recorded as above.

COMPANY PROFILE HOUSING DEVELOPMENT FINANCE CORPORTION LTD. (HDFC) Founded in 1977, HDFC is today the market leader insurance housing finance insurance India and has extended financial assistance to more than 15 lacs homes. HDFC has more than 110 offices insurance. Dubai abd 3 nire services associate insurance Kuwait, Qatar and Sultanate of OMAN. HDFC’s assets base amount to over 15,000 crores. Its financial strength is reflected in highest safety rating of “FAAA’ and “MAAA” awarded by CRISIL and ICRA – two of India’s leading credit rating agency respectively, for the last 6 year consecutively, it has a depositor base of over 11 lacs customer and a deposit agents force of over 46,000 of the total deposit, 73 are sourced from individual and trust depositors, which demonstrates the tremendous confidence that retail investors have insurance the company. HDFC – Promoted companies have emerged to meet the investors and customers needs. HDFC bank for commercial banking, HDFC mutual Fund for mutual fund products, to be allowed very shortly by HDFC Standard Life Insurance Company for the Life endurance and pension products. Being an institution that is strongly committed to the highest standards of quality and excellence, HDFC has won several accolades in the past few years. One such award is the “Ramakrishna Bajaj National Quality Award” for the year 1999. this award was instituted to award recognition to Indian companies for business excellence and quality achievement. HDFC is the only company so far to receive this award in the service category. STANDARD LIFE ASSURANCE COMPANY (SLAC):

Founded insurance 1952, Standard Life has been at the for frontry of the UK insurance industry for 176 years b combining sound financial judgement with inter gritty and reliability. The Kingdom, Ireland, Spain, Germany and some more with representative office insurance Hong-Kong and China. One of the most recent success was the launch of Standard Life Bank on 1st January 1998. Insurance less than 20 months, the bank collected Rs. 28,000 crore insurance deposit. The introduction of its innovative mortgage product insuance Jan. 1999. had an immediate impact on the UK market, accounting for 11% of all new lending within the first operational tear. The current loans outstanding amount to Rs. 43,300 crore. Standard Life has total assets of Rs. 55,000 crore and new premium income last year 33,000 crore, its UK investment portfolio account for approximately 2% of all shares listed insurance the London Stock Exchange. Its one of the new Insurance companies in the World to receive AAA rating form two of the leading international credit rating agencies. Moody’s and Standard’s And poor’s. The latter described Standard Life’s ability to meet its claim obligations as overwhelming under a variety of economic conditions. Not surprisingly, Standard Life is rated as one of the few strongest companies insurance the world. Insurance financial terms. The quality and value standard Life brings to this venture are immense. The company’s reputation insurance UK market remains unrivalled. Besides, being voted company of the ears of overall service, for the third consecutive year. Standard Life was recently voted ‘Company of the decade’ by independent brokers. THE PARTNERSHIPS:HDFC and Standard Life commenced discussions about possible joint venture, to enter the life insurance market, in Jan. 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quichly formed. Insurance Oct. 1995 the companies signed a 3 year joint venture agreement.

Around this time standard life purchased a 5% stake in HDFC, Further strengthening the relationship. A small project term was set up insurance UK and India and set about preparatory work. Among other things, the team conducted market research, looked at possible information technology, documented high. Level business process maps and set about preparing the first project plan. The next three years were filled uncertainty, due to change insurance Govt. and booth ongoing delays insurance getting the insurance bill passed insurance parliament. Despite this both companies remained firmly committed to venture. Insurance Oct. 1998, the joint venture agreement was renewed and additional resources made available. Around this time Standard Life purchased 2% infrastructure Development Finance Company Ltd. (IDFC) standard life also started to use the services of the HDFC Treasury department to advise them upon their investments insurance India. One of the many success stories over the last few years, has been the actuarial student program. The program was designed to identify high caliber individuals who would be sponsored by Standard Life to study for their mutual qualification in the UK The new company has 1 Indian actuary and 5 actuarial students in the team, with a further 2 students undergoing training in the UK. Both parents companies strongly believe the program will benefit the new company insurance the years to come and are firmly committed to it. Towards the end of 1999. the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, insurance Jan. 2000 and expect team form the UK joined a hand picked team form HDFC to form the core project based insurance Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake insurance HDFC bank.

Insurance further development standard life to participate insurance the Assets Management Company promoted by HDFC to enter the mutual fund market. The mutual fund market was launched on 20th July 2000 and one on on the 10th Nov. 2000 assets under the management reached Rs. 1063 crores. The company was incorporated on 14 th Aug. 2000 under the name of HDFC Standard Life Insurance Company Limited. The ambition of the company form as for back as Oct. 1995 was to be first private company to reenter the life insurance market insurance India. On 23rd of Oct. 2000, this ambition was realized when HDFC standard Life Insurance Company Limited were only Life company to be grated a certificate of registration. HDFC are main

shareholders insurance HDFC standard Life

Insurance Company Limited with 81.4% while standard Life own 18.6 given Standard Life’s existing investment in the HDFC Group. This is max. investment allowed under current regulations.

MISSION AND VALUES OF HDFC STANDARD LIFE:MISSION:HDFC Standard Life have clearly on several occasions that they aim to be the top new life insurance company in the market. This does not just mean being the largest or the moist proactive company insurance the market, rather it is a combination of several things. • Professionalism • Value of money • Customer services • Innovative Product • Use of Technology

• Market Share As mentioned earlier the aim is to be yardstick against which all other life insurance companies and measured.

VISION “The Most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short, “The most obvious choice for all”. VALUES  Team Work  Customer Centric  People Care  Innovation  Integrity  Joy and Simplicity

Product UNIT LINKED YOUNG STAR PLAN The HDFC Standard Life Unit Linked You: o An outstanding investment opportunity in a wide range of investment funds backed by HDFC, leading fund manager. o Valuable protection in case of the insured parent’s unfortunate demise. o Valuable protection in case of the insured parent’s unfortunate demise. o Very flexible benefit combinations and payment options. o Very flexible benefit combinations and payment options. o Flexible additional benefit options such as critical illness cover.

Sum Assured you had chosen* plus the fund built up by your and HDFC standard Life contributions. ** 4 easy steps to your own plan Step1_ choose the premium wish to invest Step2_ Choose the amount of protection (Sum Assured) You desire. Step3_Choose the additional benefit options you desire. Step4_Choose the investment found or funds you desire. Step 1: Choose your regular Premium This is the premium you will continue to pay each year of the policy. The minimum regular premium is Rs. 10000 per year. You can pay quarterly, half quarterly or annually. You may also choose to pay additional single premiums. (See additional single premiums). Step 2: Choose your level or protection You can choose any amount of Sum Assured with: • A minimum of 5 times you chosen regular premium. • A maximum of 20 times you chosen regular premium. You can reduce but not increase the sum assured any time during policy term. Step 3: Choose Additional to the maturity benefit, you can choose from these benefit options. o Life Option-Death Benefit o Life & Health Option – Death Benefit + Critical illness benefit Step 4: Choose your investment Funds Choosing your investment options is important. We have 5 funds that give you. • The potential for higher but more variable returns over the term of you policy; or • More stable returns will lower long term potential.

Your investment will buy units insurance any of 5 funds designed to meet you risk approach. All units insurance a particular fund are identical. You can choose form all or any of the following 5 funds. Fund

Liquid Fund Secure Fund Defensive Fund

Balance Managed Fund Growth Fund

Details

Extremely low capital risk very stable returns More capital stability than equity funds * Access to better long term returns through equities * Significant bond exposure keeps risk down * Increased equity exposure gives better long term return * Bond exposure provides some stability * For those who wish to maximize their returns * 100% investment insurance high Indian equities

Asset Class Bank Deposit Govt. & Money Securities Market & Bonds Fund Composition 100% --

Equity

Risk & Return Rating

--

Low

--

Low

--

100%

--

70% 85%

tp

15% to 30%

Moderate

--

40 % to 70%

30% to 60%

High

--

--

100%

Very high

Flexible products for your children’s needs We know your life will change as you children grow. We have designed the plan to meet your children’s needs now and insurance the future. You can use these features to improve the investment returns. Flexible Options Premium Payments

Benefits (i) You can pay your regular premium upto 15 days after the due date to fit in with you r cash flow. Additional Single (ii) You can, very cost effectively invest any extra money you Premium might have to enhance the long term return and provide the little extras you child deserves (iii) The minimum additional single premium amount is only Rs. 5000 Premium Changes (iv) You can increase or reduce Stop or restart your regular premium at any time. (v) All changes will take place format the next premium due date. (vi) Life cover will continue as long as the policy is insurance force. Charges for life cover and any other risk cover you have chosen will continue to be charged. Changing your You can change your investment fund choices insurance two investment decisions ways.

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

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

Term Period (Yrs.)

Minimum Life Option 10 Life and 10 health option

Maximum 25 25

Entry Age (Yrs.) Minimum 18 18

Maximum 60 55

Maximum age at expiry (yrs.) 75 65

Accessing your money a) On maturity Your policy matures at the end of the policy term you have chosen and your death and other risk covers ceases. You may redeem your balance units at the then prevailing unit price and take the fund value with you. However, you also have the option to take your fund in periodical installments over the period which may extend to 5 years. This is called the “Settlement Option” Your money will remain invested in the funds chosen by you. During such period, we will continue to deduct charges other than the risk benefit charges such as the mortality charge. At the end of this 5 year period, we will redeem the balance units at the then prevailing unit price and pay the fund value to you. Your policy will terminate the moment the balance of your units in all the funds reaches zero. b) On Death In case of your unfortunate demise during the policy term, we will: • Pay the sum assured you had chosen to your child • Continue your policy and continue to pay the original regular premiums you had chosen

Any critical illness cover terminates immediately c) On Critical Illness In case you are diagnosed with any of the critical illnesses covered before the end of policy term, we will • Pay the sum assured you had chosen to your child • Continue your policy and continue to pay the original regular premiums you had chosen The Death Benefit cover terminates immediately d) On surrender or Partial withdrawal In the first three years Insurance plans are long term investments with significant tax advantages. Neither the IRDA now we view them as short term plans. Therefore, for the first three years of your plan, you may not surrender the plan or withdraw any portion of your funds from it. If you stop your regular premium commitment before three years have passed, your life cover will cease and funds will be held in suspense after deduction of surrender charges. These funds will be paid out to you only at the end of the third year or the end of the revival period of 2 years, whichever is later. From the fourth year onwards You can choose to surrender the policy at any time and the surrender value will be the value of the units in the fund. We will enforce surrender only if you have stopped paying regular premiums and your fund value is less than your original annual regular premium amount. You can make lump sum partial withdrawals from your funds at any time within the policy term chosen provided. • The minimum withdrawal amount is Rs. 10000. • After the withdrawal, the funds does not fall below the sum of top-up premiums paid in the preceding three years, ignoring all top-up premiums paid in the three years before the maturity date.

BENEFICIARIES The beneficiary (your child) is the sole person to receive the benefit under the policy. Where the beneficiary is less than 18 years of age, the benefit will be paid to the Appointee. LOYALTY UNITS At the end of every policy year we will increase the number of units in each of your funds by 0.10% as long as your policy is in force or paid up. The compounding effect of these regular addition is expected to boost your final maturity value. CHARGES The charges under this policy are deducted to provide for the cost of benefits and the administration provided by us. Our charges, when taken together are structured to give you better returns and value for money over the long term. PREMIUM ALLOCATION CHARGE This is a premium based charge. After deducting this charge from your premiums, the remainder is invested to buy units. The tables given below will help show how percentage of your premium is used to buy units. This percentage is called the Allocation Rate. the allocation rates are guaranteed for the entire duration of the policy term. Premium Paid During Year (Rs.) Upto 199999 From 200000 to 499999 From 500000 to 999999 From 1000000 to 1999999 From 2000000 and above Single Premium Top-Up(s) Regular Premiums

Allocation Rate 1st year 40% 60% 70% 80% 90% 97.50%

2nd year onwards 99% 99% 99% 99% 99% 99%

FUND MANAGEMENT CHARGE (FMC) In the long term, the key to building great maturity values is a low FMC. The daily unit price already includes our low fund management charge of only 0.80% per annum of the fund’s value. SURRENDER CHARGE

This is the charge we will apply when the policy is surrendered. It is equal to 60% of the difference between the regular premiums expected and received in the first year of the contract. OTHER CHARGES The following is the set of other charges that we will take from your policy. Charges Explanation Policy Administration A charge of Rs. 20 per month is charged to Charge cover regular administration costs. We take the charge by canceling units proportionately from each of the funds you have chosen. Mortality and other Every month we make a charge for providing Risk Benefit Charges* you with the death or critical illness cover (which includes the SA plus a value of the future premiums payable) in your policy. The amount of the charge taken each month depends on your age. We take the charge by canceling units proportionately from each of the funds you have chosen. Switching Charge 24 switching will be given free in a policy year and any additional switch will be charged Rs. 100 per switch Partial Withdrawal 6 partial withdrawal requests will be free in a charge policy year and any additional partial withdrawal request will be charged Rs. 250 per request Revival Charge A charge of Rs. 250 is charged for revival to cover for administrative expenses Miscellaneous Charge This is a charge levied for any alterations within the contract like premium redirection or adhoc policy servicing. 12 premiums redirection request will be free in a policy year and any additional premium redirection request will be charged Rs. 250 per request. 6 policy servicing requests will be free in a policy year and any additional policy servicing request will be charged Rs. 250 per request.

LIFE INSURANCE CORPORATION PROFILE OBJECTIVES:Spread Life Insurance much more widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at responsible cost. Maximum mobilization of people’s savings by making insurance linked savings adequately attractive. Bear in mind, in the investment of funds. The primary obligation to its policy holders, whose money it holds insurance trust, without losing sight of the interest of the community as whole, keeping insurance view national priorities and obligation of attractive return. Conduct business with almost and with the full realization that the money belongs to the policy holders. Act as trustees of the insured public insurance their individual and collective capacities. Involve all people working insurance their individual and collective capacities. Involve all people working insurance the corporation to the best of

their capability insurance furthering the interest of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of corporate objective. VISION:“A Tran-nationally competitive financial conglomerate of significance to Society & ride of India”. MISSION:“Explore and enhance the quality of life of people through financial security by providing products and services of as pried attributes with competitive returns, and by rendering resources for economic development”.

Products: FUTURE PLUS LIC’S Future Plus (T. No. 172) is a unit Linked Pension Plan bundled with lots of options with insurance built flexibility. o Future Plus, a deferred pension plan is available with or without life cover, o It can be taken as a single premium policy or under regular premium payment mode i.e. yearly or half-yearly. o The plan comes with a host of riders like accident benefit rider, critical illness rider etc. which are to be opted at the time of taking the policy.

o On vesting, the customer gets a pension on accumulated bid value of the units allotted under the plan. Option is available to commute up to onethird of the fund under the units at the time of vesting. o The policy can be surrendered at no loss on the bid value of the units after two years of policy existence and a small charge up to a maximum of 4% of levied if surrendered within two years. o The vantage pints of the plan are the Auto cover on the plan (keeps the policy insurance force even if premiums are not paid subject to certain conditions). The facility for top-ups (additional premium can be paid to invest insurance the funds with no upper limit) and of course to opt for early pension (40 years onwards). o On death of the customer during the deferment period, basic Sum Assured plus th bid value of the units become payable by LIC provided life cover option is exercised. Else, the bid value of the units become payable to the nominee. The nominee can also opt for a pension insurance lieu of lump sum death claim amount. o Persons insurance the age band of 18-65 years are eligible to take Future Plus. o The minimum and maximum vesting age offered is 40-75 years. The minimum policy term is five years. o The minimum premium payable under single premium mode is Rs. 10000 and Rs. 5000 per annum under regular premium mode. o Future Plus comes with options to invest in any of the four types of funds, based on the customer’s choice and risk taking ability. o Bond fund and income fund are available for risk averse customers where major portion of the fund is invested insurance Govt. securities and other secured bond/income funds. Growth fund is available for risk loving customers. Especially for those who aspire for rewarding returns as major portion of the found would be invested insurance equity markets. Balanced

fund is also available to customer who wish to strike a balance between the above two. o The plan is priced at competitive charges on administrative and fund management fronts with nil bid-offer spread. The plan extends the Insurance come tax benefits u/s 80 CCC (i). The allocated premiums will be applied to purchase units as per the Fund type. Chosen. The policyholder’s Unit account will be subject to deduction of charges as specified insurance the Policy Conditions. The value of the unit insurance the Unit Fund may increase or decrease, depending on the investment return of the assets representing the chosen fund. 1. Premiums: Regular premium can be paid either insurance yearly of half-yearly installments. The minimum annual premium will be Rs. 5000/- increasing thereafter insurance multiples of Rs. 1000. Alternatively, a single premium can be paid subject to a minimum of Rs. 1000 and thereafter insurance multiples of Rs. 1000. 2. Benefits: A) Death Benefit: Insurance case of death of the policy holder within the policy term, when the life cover is opted for and is in force, the nominee will get the sum Assured under the Basic Plan together with the Bid Value of units held insurance the Policy Holder’s Unit Account either as a lump sum or as pension on his/her life-the actual amount of the pension will depend on the then prevailing immediate annuity rates under the annuity option chosen. The limits on life cover i.e. the Sum Assured under the Basic Plan are as under:For Single Premium Policies: Equal to the Single Premium For Regular Premium Policies: 5 to 20 (integer) times of the annualized premium as per the option exercised by the propose. However, the maximum life cover shall not exceed the annualized premium

multiplied by the term subject to a minimum life. Cover of 5 times the annualized premium. In case the policy is taken without risk cover, then the Bid value of the units held insurance the Policyholder’s Unit Account shall be payable either as a lump sum or as a pension on his/her life, which will be based on the than prevailing immediate annuity the relevant annuity option. If the policy is insurance lapsed condition, than also the Bid Value of the units held in the policyholders unit account shall become payable to the nominee, either as a lump sum or as a pension on his/her life which will be based on the than prevailing immediate annuity rates under the relevant option. B) Benefit on vesting: On the policy holder surviving to the date of vesting, the Bid Value of the units held insurance the policyholders unit account will compulsorily be utilized to provide a pension based on the tern prevailing immediate annuity rates under the relevant annuity option. However, the Policyholder may opt to commute upto one third of the Bid option. However, the Policyholder’s Unit Account at the time of vesting of the annuity, which shall be period as a lump sum. Insurance case communication is opted for, the amount of annuity/pension available will be reduced proportionately. There will also be an option to purchase pension form any other insurance company subject to Regulatory provisions. 3. Options: A) Accident Benefit Option: Accident Benefit can be availed as on optional Rider benefit by paying an additional premium of Rs. 0.50 p for every Rs. 1000/- of the Accident Benefit Sum Assured per policy year by cancellation of appropriate number of units out of the Policyholder’s Unit Account every month. On Accidental death of the Policyholder’s during the term of the policy, a sum equal to the Accident Benefit cover is opted for and is insurance force. The Accident Benefit rider option will not be available insurance case Basic Sum Assured under the Basic

Plan, subject to an overall limit of Rs. 25 lakh under all policies of the Policyholder with the Corporation taken together. B) Critical Illness Benefit Rider: An amount equal to the critical Illness Rider Sum Assured will be payable in case of diagnosis of defined categories of Critical Illness subject to certain terms and conditions, provided the Critical Illness Benefit cover is opted for an is insurance force. The maximum cover to this rider will be Rs. 5 Lakh under all policies of the Policyholders with the Corporation taken together. The Critical Illness Rider Sum Assured shall also not exceed the Sum Assured under the Basic Plan. So, the critical Illness rider option will not be available in case Sum Assured under the Basic Plan is zero. 4. ELIGIBILIGY CONDITONS AND OTHERS RESTRICTIONS: For the Basic Plan: (a) Minimum Age at entry -

18 years completed

(b) Maximum Age at entry -

65 years (age nearer birthday)

(c) Minimum Age at vesting

-

(d) Maximum vesting Age -

75 years (age last birthday)

(e) Minimum Policy Term

-

40 years (age last birthday) 5 years for both Single Premium and Regular Premium policies (with and without Risk Cover)

(f) Minimum Premium

-

Rs. 10000 for Single Premium Rs. 5000 p.a. for Regular Premium

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

-

Equal to the Single Premium

Regular Premium

-

5 to 20 9integer) times of the annualized Premium as per the option exercised by the proposed However, the maximum life

cover

shall

not

exceed

the

annualized premium multiplied by the

term subject to a minimum life cover of 5 times the annualized premium. Critical Illness Benefit Rider Option: (a)

Minimum Age at entry

-

18 years completed

(b)

Maximum Age at entry

-

50 years (age nearer birthday)

(c)

Maximum Maturity Age

-

60 years (age nearer birthday)

(d)

Minimum Sum Assured

-

Rs. 50000 provided the Sum Assured under the Basic Plan is more than or equal to Rs. 50000

(e)

Maximum Sum Assured under Critical

Illness Benefit Rider Option

-

The maximum Critical Illness Rider Sum Assured shall be of Rs. 500.000 taking, critical illness riders under all policies of the Policyholder with the Corporation and the Critical Illness Benefit option under the new proposal into consideration.

Accident Benefit Rider Option : (a) Minimum Age at entry

-

18 years completed

(b) Maximum Age at entry

-

65 years (Age nearer birthday)

(c) Maximum Maturity age

-

70 years (age nearer birthday)

(d) Minimum Sum Assured

-

Rs. 25000 provided Sum Assured under the Basic Plan is Rs. 25000 or more.

(e) Maximum Sum Assured

-

under Accident Benefit Option – The Maximum Accident Benefit Sum Assured shall be of Rs. 2500000 taking Accident Benefit under all policies of the Policyholder with the Corporation and the Accident Benefit Sum Assured under the new proposal into consideration.

5.

Investment of Funds:

The premiums allocated toi purchase units will be strictly invested according to the investment pattern committed insurance various fund types. Various types of fund and their investment pattern will be as under: Fund Type

(i) Bond Fund

Investment insurance Short term Investment insurance Govt./Govt. Guaranteed investment such as Listed Equity Share. Securities money market instruments (including Govt. Securities) Not less than 0% 100% Nil

(ii) Income Fund

Not less than 70%

Not more than 90%

Not more than 20%

(iii) Balance Fund

Not less than 60%

Not more than 80%

Not more than 3%

(iv) Growth Fund

Not less than 30%

Not more than 50%

Not more than 60%

The Policyholder has the option to choose any One of the above 4 funds. Insurance case no fund has been opted from the allocated premiums shall, by default, be invested insurance the INCOME FUND. 6. Method of Calculation of Unit price: Units will be allotted based on the Net Asset Value (NAV) of the respective fund as on the date of purchase of units. There is no Bid-Offer spread (the Bid price and Offer price of units will both the equal to the NAV). The NAV will be computed based on investment performance under each fund type and shall be calculated as under: Market/Fair value of the chosen fund’s underlying assets plus Current Assets, accrued income (net of Fund Management charge and other outgo) Less Current Liability and Provisions Net Asset Value = Number of Units existing insurance the fund at the valuation date 7. Charges under the Plan: I) Allocation Rate: The allocation applicable to the premium to determine the part of premium utilized to purchase units in the Policy holder’s Unit Account will

depend on whether the policy is a Single Premium or Regular Premium contract and on the premium size as under: Single Premium: Premium Band 10000 to 19000 20000 to 49000 50000 to 99000 100000 to 499000 500000 and above

Allocation Rate* 0.9600 0.9700 0.9775 0.9815 0.9835

* Under Single Premium Policies an amount equal to (1-the allocation rate) times the Single Premium will also be deducted at the First Policy anniversary by canceling an appropriate number of units form the Policyholder’s Unit Account. Premium Band 5000 to 9000 10000 to 19000 20000 to 49000 50000 to 99000 100000 to 499000 500000 and above

Allocation Rate First Year & 2nd Year 0.8700 0.8950 0.9075 0.9150 0.9175 0.9200

Thereafter 0.9750 0.9750 0.9750 0.9750 0.9750 0.9750

Allocation Rate for Top-up (Additional premium) 0.9875 II) Other Charges: the following charges shall be deducted by canceling appropriate number of units out of the Policyholder’s Unit account: i) Life cover and Critical Illness Benefit rider charge_ Charges for live cover and critical Illness Benefit will be taken every month by canceling appropriate number of units out of the Policyholder’s Unit Account as per the rate prevalent at the time of policy issue or as amended by LIC form time to time based on actual experience. ii) Accident Benefit Charge: Rs. 0.50 per thousand Accident Benefit Sum Assured per policy year by canceling appropriate number of units out of the policyholder’s Unit account. iii) Administrative charge:- If live cover is opted form then there will be an Administrative charge of Rs. 1% of sum Assured under the Basic Plan Subject to a maximum of Rs. 1000 insurance each of the first 2 years.

iv) Policy Charge: Rs. 0.10%.0 Sum Assured under the Basic Plan,. Where risk cover is opted form insurance each of the first 2 years, insurance case no life cover is opted for, the Policy charge insurance each of the first 2 years will be equal to Rs. 0.10%0 ot the total premiums payable throughout the policy term. v) Service Tax Charge: This charge shall be levied on the life cover. Accident Benefit and Critical Illness Benefit charged, if any, and shall be taken by canceling appropriate number of units on a monthly basis as and when the corresponding life cover, Critical Illness and Accident Benefit charges are deducted. The level of this charge will be as per the rate of Service Tax premium if any as applicable form time to time. vi) Flat Fee Rs. 15/- per month will be charged throughout the term of the policy by canceling appropriate number of units out of the Policyholder’s Unit Account. III) Fund Management Charge: Fund dependent deductible on the date of computation of NAV: 1.00% p.a. of Unit Fund for “Bond” Fund 1.00% p.a. of Unit Fund for “Income” Fund 1.25% p.a. of Unit Fund for “Balanced” Fund 1.50% p.a. of Unit Fund for “Growth” Fund IV) Bid/Offers Spread-Nil V) Right to reserves the right to service all or any of the above charges, including the right to charges the manner insurance, which charges are to be recovered, the Corporation may also introduce new charges, as and when such a need may arise. The modification insurance charges will be done with prospective effect with the prior approval of IRDA after giving the policyholders a notice of 3 months. In case a policyholder does not agree with the modified charges, he/she shall be allowed to withdraw the Bid Value of the Units held insurance his/her Unit Account without any surrender charge, if any. Although the charges are review able. They will be subject to the following maximum limits:

-

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

-

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

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

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

Indian Stamp Act, 1989 -

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

follows: i)

Bond Fund :

2.0% p.a. of Unit Fund

ii)

Income Fund:

2.0% p.a. of Unit Fund

iii)

Balanced Fund :

2.5% p.a. of Unit Fund

iv)

Growth Fund :

3.0% p.a. of Unit Fund

8. Surrender Charge: The Surrender charge will be under: i) Single Premium Duration since date of commencement

Surrender Charge

Less than 1 Year :

4% of Bid value of the units held

1 year or more but less than 2 years

2% of Bid value of the units held

2 years or more :

Nil

ii) Regular Premium Number of years premiums have been paid

Surrender Charge

If one full year’s premium or less are paid

60% of Bid Value of the Units held

If more than one full year’s but less

40% of Bid Value of the

Than 2 full years premium are paid

units held

If 2 or more full years premiums are paid: Tax Implication on Surrender

Currently, as per the Sub-section of 80 CCC of the Income Tax Act, 1961 any amount taken on account of surrender under the above plan shall be chargeable to tax as income in the year of surrender. Partial Surrender: No partial surrender of units will be allowed under this plan. 9. Other Features: i) Auto-cover: if the policyholder has opted for risk cover, then charges for the same shall be taken by canceling an appropriate number of units out of the Policyholder’s Unit have not been paid as and when due under the policy. During the period of Auto-cover any/all unpaid premiums that have fallen due may be paid at anytime without interest. For regular premiums policies, when 3 ore more year’s premiums have been paid, the Auto-cover facility will compulsorily be available throughout the term of the policy. However, for Regular premium policies where less than 3 year’s premiums have been paid, the Auto-cover facility will compulsorily be available only for a period of 6 months from the due date of the First Unpaid premium. Thereafter, the risk cover will cease i.e. the policy will lapse. In such cases, the Policyholder shall have the option of reviving the policy within period of 5 years from the due date of the First Unpaid Premium, by paying all unpaid premiums without interest and on submission of proof of continued insurability to the satisfaction of the Corporation. Notwithstanding what is stated above, the balance in the Policyholder’s Unit Account, at all times, should be sufficient to cover the relevant charges. However, for all Regular Premium Policies where at least 3 years premiums have been paid, the policyholder’s Unit Account, at all times, shall be subject to a minimum balance of one year’s annualized premium in the Policyholder’s Unit Account. In case the Policyholder’s Unit Account falls below this limit, the policy shall compulsorily be terminated and the balance amount in the Policyholder’s Unit Account will be refunded to the Policyholder.

ii) Top-up (Additional Premium): The policyholder can pay additional premium in multiples of Rs. 1000 without any limit at anytime during the term of the policy. In case of yearly or half-yearly mode of premium payment such Top-up can be paid only if all premiums have been paid under the policy. iii) Switching: The policyholder can switch between any funds types during the policy term within a given policy year 4 switches will be allowed free of charge. Subsequent switch in that policy year shall be subject to a switching charge of Rs. 100 per switch. iv) Increase/decrease of benefits: No increase (Except to the extent of Top-up stated above) of benefits will be allowed under the plan. The Policyholder can, however, decrease the risk cover once in a year during the Policy term, subject to the respective minimum limits, provided all due premiums under the policy have been paid. v) Conversion to annuity at Vesting Date: The rate at which the amount at vesting date will be converted to an annuity is not guaranteed and will be based on the prevailing immediate annuity rates under the relevant annuity option at the vesting date. vi) Minimum Guaranteed Growth Rate: For the “Bond” fund, the allocated premiums, net of all charges and deductions, will have a guaranteed minimum growth rate of 3% p.a. compounding yearly, provided the minimum policy term is 10 years and the policy is held till the vesting date without any switching to any other fund in between. The guarantee shall not apply to any Top-up premiums paid under the policy. There will be no guarantee under other funds. vii) Paid-up Value: If premiums are payable either yearly or half-yearly and the same have not been duly paid under the Policy, the Policy shall become paid-up. 10. Revival or reinstatement: In case of lapsed policy, the Policyholder shall have the option of reviving the policy at any time during the premium paying term but within a period of 5 years from the due date of the First Unpaid Premium, by paying all unpaid premium

without interest and on submission of proof of continued insurability to the satisfaction of the Corporation. 11. Risk borne by the Policyholder: The Value of the units and hence the Benefit relating to the policyholder’s unit account is subject to market and other risk and there can be no assurance that the objectives of any of the above funds will be achieved. Further, the value of units within each Fund can go up or down depending on different factors affecting the capital markets and may also be affected by changes in the general level of interest rates and other economic factors. All benefits under the policy are also subject to the Tax Laws and other Financial enactments as they exit from time to time. 12. Cooling off period: If policyholder is not satisfied with the “Terms and Condition” of the policy, he / she may return the policy to us within 15 days from the date of receipt of the Policy Bond. 13. Loan: No loan will be available under this plan. 14. Assignment: No assignment will be allowed under this plan. 15 Exclusion: No risk claim will be paid in case the Policyholder commits suicide (whether sane or insane at the time) at any time on or after the date on which the risk under the policy has commenced but before the expiry of one year from the date of commencement of risk under this policy and the Corporation will not entertain any claim by virtue of this policy except to the extend of the Bid value of the Policyholder’s Unit Account on the date of death, subject to deduction of the charge for premature surrender as mentioned under Section 8 above. 16. Dating Back: No dating back of the Policy will be allowed under this plan. Benefit Illustration:

Statutory warning “Some benefits are guaranteed and some benefits are variable with returns based on the future performance of your life insurance company. If your policy offers guaranteed returns then these will be clearly market “guaranteed” in the illustration table on this page. If your policy offers variable returns then the illustrations on this page will show two different rates of assumed investment returns. These assumed rates of return are not guaranteed and they are not upper or lower limits of what you might get back as the value of your policy is dependent on a number of factors including future investment performance.” i) This illustration is applicable to a non-smoker male/female standard (from medical, life style and occupation point of view) life. ii) The non-guaranteed benefits (1) and (2) in above illustration are calculate so that they are consistent with the Projected Investment Rate of Return assumption of 6% p.a. (Scenario 1) and 10% p.a. (Scenario 2) respectively. In other words, in preparing this benefit illustration, it is assumed that the Projected Investment Rate of Return that LIC1 will be able to earn throughout the term of the policy will be 6% p.a. or 10% p.a., as the case may be. The Projected Investment Rate of Return is not guaranteed. iii) The main objective of the Illustration is that the client is able to appreciate of the product and the flow of benefits in different circumstances with some level of quantification. iv) The maturity sum shown in the Illustration is to be annuities. However, the policyholder can opt to take up to one-third of the maturity sum as a tax-free lump sum. SECTION 41 OF INSURANCE ACT 1938 (1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance insurance respect of any kind of risk relating to lives or property insurance India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy nor shall any person taking out or renewing a policy accept

any rebate except such rebates as may be allowed insurance accordance with the published prospectuses or tables of the insurer provided that acceptance by an insurance agent of commission insurance connection with a policy of life insurance taken out by himself on his own life shall not be deemed to be acceptance of a rebate of premium within the meaning of this sub-section if at the time of such acceptance the insurance agent satisfied the prescribed. Conditions establishing that he is a bona fide insurance agent employed by the insurer. (2) Any person making default insurance compiling with the provision of this section shall be punishable with a fine, which may extend to 500 rupees.

INTRODUCTION ICICI Prudential Life Insurance Corporation Ltd. was incorporated on 2007-2002. this company is a joint venture of ICICI (74%) and Prudential plc UK (26%) The company was granted certificate of registration for carrying out life Insurance Registory and Development authority on Nov. 24.2000. it commenced commercial operations on Dec. 19.2000, Becoming one of one of the few private sector players to enter the liberalized arena. DETAILS OF ICICI:This is Indian participate company of this insurance Co. ICICI Ltd. was established in 1955 by world bank, the govt. of India and the Indian Industry, to

promote industrial development of India by providing project and corporate finance to Indian Industry. Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has thus far financed all the major sectors of the economy, covering 6848 companies and 16851 projects. DETAILS OF PRUDENTIAL PLC:Prudential Plc was founded in 1848 . since then it has grown to become one of the largest providers of a wide range of saving products for the individuals including life insurance, pensions, annuities m unit trust and personal banking. It has presence in 15 countries, an caters to the financial needs of over 10 millions customers. Prudential is the largest life insurance company in the United Kingdom. Asia has always been an region for prudential and it has had a presence in Asia for 75 years. In fact prudential first Overseas operation was in India, way back in 1923 to establish Life and General Branch agencies. 1. Save ‘n’ Project 2. Cash Bank 3. Smart Kid 4. ICICI PRU Life Guard 5. Life Time Pension ICICI Pru Life Time (ICICI PRU Life) Suitability o This policy is a long term market linked total protection plan. The plans offer projections for life at the same time allows the policyholder to get market linked returns. It is a single product combining the benefits of both an investment product and insurance plan. This apart, the product offers a lot of flexibility. Salient Features  Death benefit will be a multiple of premium paid.

 Premium paid will be invested in the fund chosen ( Maximiser, Balancer or Protector fund ) after deducting mortality charges and administrative expenses.  Policy holder has the option to vary the amount of insurance projection vis-àvis investment while maintaining the same premium.  The returns depend on the plan chosen- growth. Balanced and income and one can switch from one fund to another depending on the financial priorities. Once in a year switching is done free of cost.  Benefits can be enhanced by adding Accident & Disability Benefit. Major Surgical Assistance, Critical Illness benefits at a nominal extra premium.  Entry into the plan will be based on the Unit Value applicable on the date of policy issue. The amount of premium towards to wards death benefit decreases with the increase in the value of the units.  One has the flexibility to increase the death benefit by 25% subject to a maximum of Rs. 100.00 every third year opto 3 times. Without any underwriting. Death benefit can be increased beyond this limit with underwriting.  Apart from the above the policy holder can increase the death benefit at different state of life such as Marriage, birth of first child and birth of second child. This is irrespective of when the last increase was done.  One can decrease the death benefit in the multiple of Rs. 100.00. However a minimum death benefit of Rs. 100.00 has to be maintained.  Policy holder has the option to increase the investment by the way of top ups with a lump sum payment at any time.  If after at least 3 years premium payments are made and then one is unable to pay the subsequent premiums towards the life cover under the policy will continue and the premiums towards the life cover and riders will be debited from the unit fund.  Unit value is calculated bi-weekly on a forward pricing basis every Tuesday and Friday Unit Value=

 Market/Fair Value of the relevant Plan’s Investments plus Current Assets less Current Liabilities and Provisions -----------------------------------Number of units outstanding under the relevant Plan * The returns depend on the plan chose. Maximiser (Growth) Plan  If high growth is your priority this is the plan for you. You can long-term capital appreciation from a portfolio that is invested primarily in equity and equity-related securities. Protector (Income) Plan  If on the other hand your priority is steady returns, you can opt for the Income Plan. Here you can accumulate a steady income at a low risk across a medium to long term period. Balancer (Balanced) Plan  If you prefer a balance of growth and steady returns choose our Balanced Plan. This would ensure that your portfolio is invested in equity and equity linked securities as well as in fixed income securities. Benefits On Death  In the event of death of the policyholder, beneficiaries will be paid the higher of death benefit and value of the units. On Survival  There is no maturity period and policy holder has the option to withdraw units under the plan at anytime after the policy has been in force for three years. Riders Accident & disability benefit  10% of SA each year for 10 years in case of permanent total disability

 Additional SA, if death is due to an accident while traveling as a passenger in train or bus. Critical Illness Benefit  9 medical conditions are covered. On admission of a claim, sum assured under the rider is paid and the rider comes to and end. Claim under this rider is not admissible during first six months of the policy.  43 surgical procedures are covered 1. Major Surgical Procedure – 50% of SA 2. Intermediate Surgical Procedure – 30% of SA 3. Minor Surgical Procedure – 2% SA Claims can be made for more than one surgical procedure, subject to a maximum of 50% of SA, claim under this rider is not allowed during first 6 months of the policy. Other Conditions  Minimum age at entry : 0 year  Maximum age at entry: 60 years (completed years)  Minimum premium: Rs. 18000 per annum  Minimum sum assured under riders: Rs. 100000  Maximum sum assured under riders : Rs. 1000000 Following are the charges applicable under the policy:  The initial administrative charges in the 1st year would be 20% of the

premium, for premium amounts less than Rs. 50000/- for premiums equal to or more than Rs. 50000/- it is 18% of the premium.  Other charges: Annual administrative charges of 1.00% p.a. of the net assets for protect (Income) and 1.25% p.a. for Maximiser (Growth) and Balancer (Balanced) options. Annual investment charge of 0.5% p.a. of the net assets for Protector and 1% p.a. of the net assets for Maximiser and Balanced.  Mortality charge towards death benefit

 Initial charges of 1% on Top ups  One free switch every year after which a switching fee of 1% of the switching amount will be levied. Any unutilized free switch cannot be carried forward. Note: In case the unit value is inadequate to cover charges, the policy will terminate.

OM KOTAK INVESTMENT PLAN PRODUCT Suitability The policy is an investment cum endowment insurance plan, and suitable for people who are looking at investment option with good return and the security of the investment. Salient Features  This is an endowment cum plan and hence benefits are payable both on death and on maturity

 Premiums paid are invested in capital markets providing the policyholder an opportunity to earn market linked returns. Policyholder can avail of all the profits from the markets and in case the market does not perform well, he would still get back the guaranteed Sum Assured thus protecting him from the adverse affects of market.  The plan assures a minimum guaranteed amount on maturity, or in case of death.  This is a non participating plan.  The premiums paid, net of charges, are converted into units and invested in funds selected by the policyholder. Based on his risk appetite policyholder has the to choose any of the four funds offered under the policy  Money market Fund – A portfolio invested primarily in money market instruments and other short-term investments. It provides access to a low risk portfolio and is useful when one wants to avoid the risks associated with long-term investments. Min. investment Money Market Instruments / Bank 100%

Maximum 100%

Risk Profile Low

Deposit Equity shares of blue chip companies

80%

Medium

40%

to

High Securities issued by Central Govt. / 20% Guaranteed by Central Govt. Short Term Bank deposit / Call money 0%

60%

Low

20%

Medium Low

to

/ Cash

 Policy holder has the flexibility to switch the money (or a part of it) from one fund to the other is available. Funds can be switched any number of times during the term of the plan, at daily declared selling and buying prices.  Loan can be availed provided the policy has been in force for 3 years  Automatic Cover Maintenance facility: This facility keeps the policy in force even on non-payment of premium. However, this facility is available only if

the policy has been in force for a period of 3 years. Under this facility, in case policyholder misses premium payments, units would be liquid dated at the prevailing selling price to meet the ridk and expense charges an policy would be in force. As long as the value of units is sufficient to meet the expenses, the policy would be in force, on maturity, the residual value of uits would be paid as a benefit to the policy holder.  The premiums paid under the plan will qualify for rebate under Sec. 88 of the Income Tax Act, 1961 and the returns are fully Tax exempt under Sec 10 (10D). premiums paid for Critical Illness Benefit qualify for rebate under Sec,. 80 D.  The policy benefits can be enhanced by adding riders to it. The riders available with the policy are:o Term / Preferred Term Benefit o Accidental Death Benefit o Permanent Disability Benefit o Critical Illness Benefit o Life Guardian Benefit o Accidental Disability Guardian benefit Benefit On Maturity Full Sum Assured or the market value of the units, whichever is higher is payable, On Death Full Sum Assured or the market value of the units, whichever is higher is payable Riders Term/Preferred Term Benefit: In the event of death during the term of this benefit, the beneficiary would receive and additional death benefit amount, which is over and above the sum assure. The maximum amount of benefit one can avail is equal to the basic sum assured. Where the Term Benefit cover applied for is more than Rs. 10 Lakhs. Better rates may apply, subject to meeting eligibility requirements.

Accidental Death Benefit: This benefit provides an additional amount (over and above the sum assured) to the beneficiary in the event accidental death of the life insured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs. 10 lakhs). Permanent Disability Benefit: In case of permanent disability due to an accident, the riders pays an additional amount, which is paid out as an annuity, the maximum, permanent Disability Benefit that one Can avail of is equal to the basic sum assured (subject to a maximum of Rs. 10 lakhs) Critical Illness Benefit:- This benefit can be added to the basic life insurance plan to provide financial support in the event of medical emergencies. On the first occurrence of critical illness during the term of the plan, policyholder would receive a portion of the sum assured to reduce your financial burden in this emergency. Life Guardian Benefit: In case of the unfortunate death of the proposer, this benefit keeps the policy alive by waiving all future premiums on the policy. Accident Disability Guardian Benefit: In case the proposer is permanently disabled as a result of accident, this benefit keeps the policy alive by waving all future premiums on the policy Other Conditions  Minimum Age at entry : 18 years  Maximum Age at entry : 60 years  Maximum maturity age : 75 years  Term of the policy : 10-30 years  Minimum Premium 1. Quarterly – Rs.2620 2. Half yearly – 5115 3. yearly – 10000 Exclusions

In case the life insured commits suicide during the first year of the plan, the beneficiary would not receive any of the benefits outlined in the plan. Exclusions for Accidental Death Benefit, Permanent Disability Benefit, Critical Illness Benefit, and Accidental Disability Guardian Benefit q. Self inflicted injuries, suicide, insanity, immorality, committing any breach of law or being under the influence of drugs. Liquor etc. r. when the life insured / proposed is engaged in aviation or aeronautics other than as a passenger on a license commercial aircraft operating on a schedule route. s. due to injuries from war (whether war is declared or not), invasion, hunting, mountaineering, motor racing of any kind, other dangerous hobbies or activities, or having been on duty in military, para military, security or police organization. Additional Exclusions for Critical Illness Benefit t. Unreasonable failure to seek or follow medical advice. u. any pre-existing medical conditions not disclosed at inception. v. infection with Human Immunodeficiency Virus (HIV) or condition due to any Acquired Immune Deficiency Syndrome (AIDS) w. Infection with Human Immunodeficiency Virus (HIV) or condition due to any Acquired Immune Deficiency Syndrome (AIDS) x. In addition, no benefit would be paid in respect of the exclusions specific to each critical illness.  Gilt Fund – the portfolio primarily consists of securities issued by or guaranteed by the Central Government of India. Short-term investments will also be made with banks. There is no credit risk associated with this portfolio, suitable for investors looking for regular and steady income. Min. Investment Securities issued by Central Govt. / Guaranteed by 80% Central Govt. Short Term Bank Deposit / Call Money / Cash 0%

Maximum Investment 100%

Risk Profile Low

20%

Low

 Balanced Fund – A portfolio invested primarily in share of wellmanaged companies and in highly rates securities of Central Govt. this portfolio offer you a balance of steady returns and growth. Min. Investment Equity shares of blue chip companies 30% Securities issued by Central govt. / Guaranteed by 20% Central Govt. Short Term Bank Deposit / Call money / Cash 0%

Maximum Investment 60% 70%

Risk Profile Medium Low

20%

Low

 Growth Fund – A portfolio invested judiciously in equity and equity

related investments of well-managed companies. Security will be enhanced through holdings in highly rated securities and short term deposits. This fund is suitable for investors looking for growth and capital appreciation in the term.

BIRLA SUN LIFE PRODUCT Single Premium Bond (Birla Sun Life) Suitability  This is an investment plan, suitable for people who seek market-linked returns and the same time are averse to any capital erosion. This policy also provides life insurance cover. Salient Features  This is a single premium, unitized investment plan.

 This plan is similar to a mutual fund providing market linked returns with an added advantage of having no down side risk of capital erosion.  Policy provides an insurance cover to the extent of 50% of premium paid or policy fund which ever is higher.  Policy is be offered for 10 and 5 years terms  Policy holder has the option to choose the type of investment fund based on his risk appetite. While for 10 year plan, policyholder can choose from protector, Builder or enhancer options for 5 year plan only protector option is available.  Premium paid is invested in the fund chosen after deducting the administrative and other expenses.  Policy fund is expressed in terms of units. Net Assets Value per of each investment fund is announced at least once in a week.  Policyholder can surrender the policy and receive Policy fund cash value. However if the policy is surrendered in the policy year, a surrender charges of 25% of the premium paid is applicable.  Premiums paid under the policy are eligible for tax rebate under section 88 of IT Act 1961. Further benefits paid under the policy are entirely tax under section 10 (10D). Benefits Maturity Benefit On maturity of the plan (when the plan comes to n end) the higher of the Policy Fund of the Policy Premium will be paid. On Death An amount equivalent to 105% of premium paid of policy fund which ever is higher is payable. Other conditions  Minimum Age at Entry : no age limit  Maximum age at entry : 70 years  Maximum age at Exit : 80 years

 Minimum premium : Rs. 25000 and multiples of Rs. 5000 thereof.  Term available : 5 and 10 years

Comparative Analysis of Unit Linked Plan S. No. 1

Company Name Plan Name

2 3

Age Sum Assured

4 5 6

HDFC Std. LIC Life Insurance Youngstar Future Plus

ICICI Prudential Life Time

Om Kotak Mahindra Kotak Sale Investment Plan 0 to 60 18 to 65 Min. 1 lac Subject to Max. 1 Crore minimum premium Min. 18000 Min. 10000 Max. no limit Max. no limit 3 years 3 years

18 – 65 18 to 65 Min. 100000 Min. 50000 Max. no limit Max. No limit Premium Min. 10000 Min. 5000 Max. no Limit Max. no limit Lock in 3 years No lock period period Surrender After 3 years : Less than After 3 year After

Birla Sun Life Classic Life 18 to 65 Min. 5 Lac. Sub. To pre. Amount Min. 25000 max. no limit One year

3 Loans/surrender

allowed

no charges before lock period 25% of O/S amount

7

Death and On Death : maturity Sum Assured + Annual premium is given by HDFC as a bonus to policyholder on Maturity: Market value of Unit held by Policyholder is given

8

Fund option

9

Term Rider

* Growth fund * Liquid fund * Secure fund * Defensive F. * Balance managed fund

one year: regular 40% of bid value single 96% of bid value more than one but less than 2 year regular 60% bid value single: 98% of bid value On death some Assured + Bid value of unit held b policyholder is given on maturity : Lumpsum market value of unit held is given

partial or year value final min. Rs. is equal to 2000 NAV – 2.5%

is allowed after one year min withdrawal of amount will have to be Rs. 25000 surrender charges is applicable first 75%

On death some assured or bid value of unit which ever is higher there is no maturity date

On death market value of fund or SA which ever is higher on maturity SA or market value which ever is higher

* Bond fund * Income F. * Balance F. * Growth F.

* Protector * Balance * Maximiser * One free switchover every year there after 1% OP switching amount and buying price

For Accident * Critical Illness Max 2500000

Accidental allowed upto * Critical Illness * Major Surgical Max upto 10 Lac

* Money market * GILT * Balance * Growth * Switch over any number times during the year at selling fund to another * Accident benefit disability benefit allowed 80+40 paise per thousand * Critical Illness * Life Guardian

On death *higher of policy fund or the face amount reduce by all withdrawals made in the 6 month preceding the death of LA * in death of a Minor before the year policy fund is payable * Protector * Builder * Enhancer * Creator * Switch over is allowed after one year form one two switches are free

* Accidental and permanent * Accidental death and dismemberment Rider * Critical Illness * Critical Illness Plus

10

Charges

Fund Management Charges–0.80% p.a. Administration charge – Rs. 15 per month Risk benefit charges Depends upon your age fund switching charging, premium redirection charges – after there years no charges cancellation charges – before three year 25% of O/S premium

The Accidental benefit charges 0.50% p.a. CIB Charges – depending upon age *flat – Rs. 15 p.m. * Admn. Charges – Rs. One% of SA * Switch over charges Rs. 100 service tax – 10.2%

Addition charges 1st year – 20% of premium is less then 50000 18% if premium higher then 50000 * 1% to 1.25% annual fund management charges

* WOP on Pid Sales related 1st year – 14% 2nd year onward 3.5% * Admn charges 1st year – 7% upto 20000 pre. And 3% there after * under writing charges based on age 0.2 to 0.6% * fund charges money market – 0.6% * Guilt fund – 1% Balance1.3% * Growth 1.5%

1st year prm. 25000-4999915% 50000 – 99999 – 14% one lac and above – 13% subsequent year –4% * Investment Management fee is 1% p.a. Protector, Builder, Enhancer and 1.25% for Creator.

RESEARCH METHODOLOGY OBJECTIVES OF THE STUDY 1. To know about the requirement habits of the people in the region of patiala. 2. To know about the views of people regarding various Insurance Companies. 3. Position of the Insurance companies in the mind of the consumer. 4. Position of the Insurance Competition regarding various Insurance Companies.

5. To find out the position of Insurance Companies in the market. LIMITATIONS:1. Most of the people are not interested to give the right data. 2. Some people don’t know about the private companies. 3. A span of 6 weeks training was too short for survey

DATA ANALYSIS AND FINDINGS:Respondent Profile:Respondent profile has been analysed:Ques 1:- Awareness of the various Insurance companies:S. No. A

Particulars ICICI

%age 80%

B C D E

HDFC Std. Life Insurance Om Kotal Mahindra LIC Birla Plus

Birla Plus E LIC D

Om Kotal Mahindra C

75% 5% 90% 10%

ICICI A

HDFC Std. Life Insurance B

Respondent response about the awareness of the insurance comapneis Ques 2:- What the people think about the Insurance S. No. A B C

Particulars Necessity for protection security Imposition of an burden of expenses A compulsory tool for tax saving

%age 89% 5% 78%

A com pulsory tool for tax saving C Im position of an burden of expenses B

Necesaity for protection security A

Ques 3:- Main consideration that a customer looks at while purchasing an Insurance policy. S. No. A B C D E

Particulars TAX SAVING PROTECTION PENSION INVESTMENT

%age 90% 75% 80% 25% 35%

Ques 4:- What a respondents see while purchasing a Insurance from the Company. S. No. A B C D E

Particulars Standing & Goodwill of the Company Product Range of the Company Advertisement being released by the Company Services being given by the Company Communication and knowledge of the

%age 90% 1% 5% 80% 10%

F

Representatives Returns of Bonus declared by the Company

85%

A Standing and Goodw ill of the Co.

B Product range of the Co.

C Advertisement being released by the Co.

D Services being by the Co.

E Communication and know ledge of the Rep.

F Returns of Bonus declared by the Co.

CONCLUSIONS FINDINGS AND RECOMMENDATIONS: 1.

The monopoly of LIC has been broken because private Insurance companies came into the market.

2.

09% respondents are aware of privatization of Insurance Industry and 10% respondents do not know about private companies.

3.

90% people know about LIC Insurance Company. 75% people know about HDFC Insurance Co. and 15% people know about other companies.

4.

Some people preferred to the private companies because of their better services.

5.

Some people believe only or preferred only Public Insurance Companies like LIC.

6.

As majority of the population of Patiala City belongs to the services class so they consider tax saving rather purchasing a life insurance

7.

The financial growth of private companies is much more Life Insurance companies

8.

The private companies always keep in touch with their customers with the latest information.

9.

Most of the respondent said that private companies should not be trustworthy

10.

Most of the people go for Children benefit because of triple benefit.

11.

Now, a days people preferred to invest the money in Insurance policy rather than in Banks because of better benefits of Insurance policies growth money with life cover.

12.

The respondents are above 45 they believe in Public Insurance companies and those respondents who are less than 45 believe in Private Insurance companies.

13.

HDFC has made its presence felt in the market in a short span of time.

SUGGESTIONS: 1. Advertisement should be done on television and especially posters and banners. This will greatly help in raising awareness level. 2. Insurance company should show more commitment with the customer. 3. Private companies give better services to the customers comparatively to public companies. 4. The private company should create good relation and communication. 5. Private companies should work together to spread awareness regarding the benefit given by the Private companies. 6. Private Insurance Companies give some discount to after the customer. 7. A public relation officer should be appointed in the company who with customers and their need. 8. Cross training should introduce in private companies. 9. Private companies needs to the market their products better and should create greater awareness about their product and services. They need extensive market advertisement about the additional benefit provided by them in comparison to the policies offered by LIC. 10. Agents have got maximum influence on a customers. They are the one who introduce the prospect to different policies. So agents should be give fullfledged training and the training should be strict.

* QUESTIONAIRE * (This Information is for our internal use only, will not to be disclosed to any other organization / department) Consumer Behavior towards various Investment and Insurance Products. A-STUDY Name

Address

Telephone

Age

Occupation

Annual Income

Marital Status Single Ø Married Ø

(Age of Children if applicable)

--------------------------------------------------------------------------------------------------Q. 1

Any There Insurance Companies, which you are aware of ?

Q. 2

What do you think Insurance Is ?

A3.

Necessity for Protection and security Ø Imposition as an Extra Burden on expenditure Ø A compulsory Tool for Tax Saving Ø

Q.4

What are the main considerations that a customer looks at while purchasing an insurance policy.

A4.

Tax Ø Ø

Saving Ø

Protection Ø

Pension Ø

Investment

Q.5

What would you see while purchasing an Insurance Policy from a Company ?

A5.

Standing and Goodwill of the Company Ø Product range of the Company Ø Advertisement being given by the company Ø Services beings given by the Company Ø Communications and Knowledge of the representative Ø Returns and Bonus declared by the Company Ø Other Ø Please specify _________________________________

Q6.

Why you want to buy another Insurance ?

A6.

Tax Benefits Ø Savings Ø Other Ø

Q.7

If saving, What are your financial needs in next 10-20 years.

A7.

Child Education Ø Marriage

House Construction Retirement

Needs

Ø Q. 8

Are you aware about the Unit Link Plans beings launched by various Insurance Companies.

A.8.

Yes Ø No Ø (If yes, name the Co. and products) Any other comments :

________________________________________________________________ ________________________________________________________________ ________________________________________________________________

(Thank You)

BIBLIOGRAPHY Study Material

HDFC Standard Life Insurance

Study Material

LIC

Study Material

ICICI Prudent

Study Material

Om Kotak Mahindra

Study Material

Sun Birla Plus

Websites www.hdfcinsurance.com//http//www/hdfcinsurance www.iciciprulife.com

//http//www/iciciprulife.com

www.licindia.com

//http//www/licindia.com

www.bimaonline

//http//www.bimaonline.com