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A PROJECT REPORT ON “MICROINSURANCE: PERCEPTION AND NEED OF LOW INCOME GROUP OF LIFE INSURANCE CORPORATION” SUBMITTED BY KHUSHAL SOMNATH JAIN TYBBI (SEMESTER VI) Roll No – 20 ACADEMIC YEAR 2017-2018 PROJECT GUIDE PROF: ASHWINI MHATRE

SUBMITTED TO UNIVERSITY OF MUMBAI GURU NANAK COLLEGE OF ARTS, SCIENCE & COMMERCE GTB NAGAR, SION, MUMBAI – 400037

CERTIFICATE I hereby certify that Mr. Khushal Somnath Jain student of Guru Nanak College of TYBBI (Semester – VI) has completed the project on MICROINSURANCE: PERCEPTION AND NEED OF LOW INCOME GROUP in the academic year 2017-2018 under the guidance of PROF ASHWINI MHATRE. The information submitted is true and original to the best of my knowledge.

Signature of Co-ordinator

Signature of Principal

Signature of Project Guide

Signature of External Examiner

College Seal

DECLARATION I, Khushal Somnath Jain of TYBBI (Semester – VI) hereby declare the completion of my project on MICROINSURANCE: PERCEPTION AND NEED OF LOW INCOME GROUP in the academic year 2017-2018 under the guidance of PROF. ASHWINI MHATRE. The information submitted is true and original to the best of my knowledge

Signature of Students

Date:

ACKNOWLEDGEMENT I express my profound gratitude and deep regards to my guide PROF. ASHWINI MHATRE for her exemplary guidance, monitoring and constant encouragement throughout the course of this project work.

At this juncture I feel deeply honoured in expressing my sincere thanks to all those for making resources available at right time and providing valuable insights leading to the successful completion of my project.

EXECUTIVESUMMARY ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).As the people are becoming more and more and aware of their Life Style and Income level. They need a plan, which has an optimum balance between their Investment and Savings. They require an integrated financial plan for investment. The customer requires those investment options, which provide them with flexibility and Liquidity and tax benefit. I am found out tools relates to investment in ULIP at ICICI Prudential life insurance. This project emphasis on “Insurance as a investment tool with regards to ULIP at ICICI Prudential Life Insurance Company Ltd, Mumbai”

Chapter 1: INTRODUCTION AND RESEARCH & METHODOLOGY

1.1 INTRODUCTION ABOUT ULIP: The concept of ULIP came in to existence in 1960’s to provide an optimum balance between protection and investment. ULIP distinguishes itself through the multiple benefits it provides to the policyholders. These plans are designed with a view to help the customers to utilize the market opportunities by investing in the share market, capital market and at the same time have the facility of Death Benefit and Maturity Benefit. Unit-linked life insurance products are those where the benefits are expressed in terms of number of units and unit price. They can be viewed as a combination of insurance and mutual funds. The number of units that a customer would get would depend on the unit price when he pays his premium. The daily unit price is based on the market value of the underlying assets (equities, bonds, government securities, etc) and computed from the net asset value. The advantage of unit-linked plans is that they are simple, clear, and easy to understand. Being transparent the policyholder gets the entire upside on the performance of his fund. Besides all the advantages they offer to the customers, unit-linked plans also lead to an efficient utilization of capital. Unit-linked products are exempted from tax and they provide life insurance. Investors welcome these products as they provide capital appreciation even as the yields on government securities have fallen below 6 per cent, which has made the insurers slash payouts. According to the IRDA, a company offering unit-linked plans must give the investor an option to choose among debt, balanced and equity funds. If you choose a debt plan, the majority of your premiums will get invested in debt securities like gilts and bonds. If you choose equity, then a major portion of your premiums will be invested in the equity market. The plan you choose would depend on your risk profile and your investment need. The ideal time to buy a unit-linked plan is when one can expect long-term growth ahead. This is especially so if one also believes that current market values (stock valuations) are relatively low. So if you are opting for a plan that invests primarily in equity, the buzzing market could lead to windfall returns. If one invests in a unit-linked pension plan early on, say when one is 25, one can afford to take the risk associated with equities, at least in the plan's initial stages. However, as one

approaches retirement the quantum of returns should be subordinated to capital preservation. At this stage, investing in a plan that has an equity tilt may not be a good idea. Considering that unit-linked plans are relatively new launches, their short history does not permit an assessment of how they will perform in different phases of the stock market. Even if one views insurance as a long-term commitment, investments based on performance over such a short time span may not be appropriate. Simply put ULIPs work very similar to a mutual fund with a life cover thrown in. They have a mandate to invest the premiums in varying proportions in government securities, bonds, the money markets (call money) and equities. The primary difference between conventional savings-based insurance plans like endowment and ULIPs is the investment mandate- while ULIPs can invest upto 100% of the premium in equities, the percentage is much lower (usually not more than 15%) in case of conventional insurance plans. ULIPs are also available in multiple options like `aggressive' ULIPs (which can invest upto 100% in equities), `balanced' ULIPs (which invest 40-60% in equities) and `debt' ULIPs (which invest only in debt and money market instruments). The exact expense structure/ break-up for ULIPs is as transparent as one would have liked. Broadly speaking, ULIP expenses are classified into three major categories: 1) Mortality Charges: Mortality expenses are charged by life insurance companies for providing a life to the individual. The expenses vary with the age, sum assured and sum-at-risk for the individual. There is a direct relation between the mortality expenses and the above mentioned factors. In a ULIP, the sum-at-risk is an important reference point for the insurance company. Put simply, the sum-at-risk is the difference between the sum assured and the investment value the individual’s corpus as on a specified date.

2) Sales and Administration Expenses: Insurance companies incur these expenses for operational purpose on a regular basis. The expenses are recovered from the premiums that individuals pay towards their insurance policies. Agent commissions, sales and marketing expenses and the overhead costs incurred to run the business on a day-to-day basis are examples of such expenses.

3) Fund Management Charges (FMC):

These charges are levied by the insurance company to meet the expenses incurred on managing the ULIP investment. A portion of ULIP premiums are invested in equities, bonds, government securities and money market instruments. Managing these investments incurs a fund management charge, similar to what mutual funds incur on their investments. FMCs differ across investment options like aggressive, balanced and debt ULIPs; usually a higher equity option translates into higher FMC. Apart from the three expenses, which are primarily optional in nature-the expenses will be incurred if certain choices that are made available to individuals are exercised.

a) Switching Charges: Individuals are allowed to switch their ULIP options. For example, an individual can switch his fund money from 1005 equities to a balanced portfolio, which has say, 60% equities and 40% debt. However, the company may charge him a fee for ‘switching’. While most life insurance companies allow a certain number of free switches annually, a switch made over and above this number is charged.

b) Top-up Charges: ULIPS allow individuals to invest a top-up amount. Top-up amount is paid in addition to the premium amount for a particular year. Insurance companies deduct a certain percentage from the top-up amount as charges. These charges are usually lower than regular charges that are deducted from the annual premium.

c) Cancellation Charges: Life insurance companies levy cancellation charges if individuals decide to surrender their policies (usually) before three years. These charges are levied as a percentage of the fund value on a particular date.

Investment tools of unit linked insurance plans:

FUND NAME ASSEET AND ITS ALLOCATION OBJECTIVES

MIN.

MAX.

R.I.C.H: Returns from equity investment in four types of industries, viz, resources, investment/capital goods, consumption and human capital leveraged. Flexi growth II: Long term returns from an equity portfolio of large, mid and small capital companies. Multiplier II: Long term capital appreciation from equity portfolio.

Equity and equity 80% related securities Debt, money 0% market, and cash.

100%

Equity and equity 80% related securities Debt, money 0% market, and cash.

100%

Equity and equity 80% related securities Debt, money 0% market, and cash

100%

Flexi Balanced II: Balance of capital appreciation and stable returns from an equity (large, mid and small capital) and debt portfolio. Balancer II: Balance growth and steady returns from an equity and debt portfolio. Protector II: Accumulate steady income at a lower risk

Equity and equity 0% related securities Debt, money 40% market, and cash

60%

Equity and equity 0% related securities Debt, money 60% market, and cash

40%

Debt insurance, money market, and 100% cash

1.2 OBJECTIVES OF STUDY:

POTENTIAL RISKREWARD

High 20%

High 20%

High 20%

Moderate 100%

Moderate 100%

100%

Low

MAIN OBJECTIVES:

The main purpose of the study is to find out the factors which are influencing the investment tools regards with ULIP at ICICI Prudential and to suggest some strategies which will help the organization.

SUB OBJECTIVES:  To know the importance and awareness of investment in ULIP  To know the risk perception investment relating to the financial management  To know the elements of risk and returns in ULIP  To examine the performance of the plan

1.2 Research & Methodology: Research methodology is a methodology for collecting all sort so information & data pertaining to the subject in question. The objective is to examine all the issues involved & conduct situation all analysis. The methodology includes the overall research design, sampling procedure & fieldwork done & finally the analysis procedure. The methodology used in the study consistent of sample survey using both primary & secondary data. The primary data has been collected with the help of questionnaire as well as personal observation book, have been referred for secondary data. The questionnaire has been drafted & presented by the researcher himself.

Sample Size: Sample of 50 people was take ninto study, and their data was collected

Sampling technique Judgmental sampling Sample was taken on judgmental basis. The advantage of sampling are that it is much less costly, quicker and analysis will become easier. Sample size taken was100 residents of Mumbai.

Primary Data: The primary data were collected through well designed and structured questionnaires based on the objectives.

Secondary Data: The secondary data are those, which have already been collected bysomeone else and passed through statistical process. The secondary data required of the research was collected through various newspapers, and Internet etc.

Data Analysis: After data collection, I’m able to analyze policy holder’s views, ideas and opinions

CHAPTER 2: COMPANY PROFILE Introduction of ICICI Prudential Life Insurance Company Ltd.: ICICI Prudential Life Insurance Company Limited (‘the Company’) a joint venture Between ICICI Bank Limited and Prudential plc of UK was incorporated on July 20, 2000 as a company under the Companies Act, 1956 (‘the Act’). The Company is licensed by the Insurance Regulatory and Development Authority (‘IRDA’) for carrying life insurance business in India. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and prudential plc, a leading international financial services group headquartered in the United Kingdom (UK). The company brings together the local market expertise and financial strength of ICICI Bank and Prudential’s International life insurance experience. The company was granted a certificate of Registration by the IRDA on November 24, 2000 and eighteen days later, issued its first policy on December 12. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). From its early days, ICICI Prudential seemed to have the wherewithal for a large-scale business. By March 31, 2002, a little over a year since its launch, the company had issued 100,000 policies translating into premium income of approximately Rs. 1,200 million on a sum assured of over Rs.23 billion. When the company began its operations, the need was to build a brand that was relatable to, symbolized trust and was easily recognized and understood. It launched a corporate campaign ICICI Prudential also made using the theme of ‘Sindoor’ to epitomize protection, trust, togetherness and all that is Indian; endearing itself to the masses. The success of the campaign, ‘the calling card of the company’ saw the brand awareness scores almost at par with its 40 year old competitor. The theme of protection was also extended to subsequent product and category specific Campaigns –from child plans to retirement solutions –which highlight how the company will be with its customers at every step of life. From day one, the company has unflinchingly focused on being mass-market player, developing products, creating a distribution network and deploying resources that would further its goal. Apart from ramping up thoroughly training its advisors, the company has twelve ‘Banc assurance’ partners –the largest in the country. It swiftly revised and added to its initial range of products, pioneering market-linked products and pension plans, to offer customers the most flexible life insurance policies in the country. In February 2004, ICICI

Prudential increased its capital base by Rs. 500 million, its ninth capital hike, bringing the total paid –up equity capital to Rs. 6,750 million. With the authorized capital of the company standing at Rs. 12 billion, ICICI Prudential continues to have the highest capital base amongst all life insurers in the country. The challenge ICICI Prudential now faces is to retain its topnotch position and continue to deliver the finest life insurance and pension solutions to its evergrowing customer base. ICICI Prudential’s equity base stands at Rs. 1185 crore with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the year ended March 31, 2006, the company garnered Rs.2, 412 crore of weighted new business premium and wrote 837,963 policies. The sum assured in force stands at Rs.45, 888 crore. The company has a network of over 72,000 advisors; as well as 9 bancasurance partners and over 200 corporate agent and broker tieups.ICICI Prudential is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA rating is the highest credit rating, and is a clear assurance of ICICI Prudential’s ability to meet its obligations to customers at the time of maturity or claims. For the past five years, ICICI Prudential has retained its position as the No.1 private insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. Vision: To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. Vision, Mission, and Quality Policy

Vision: To be the dominant Life and Pension player built on trust by world class people and service.

This they hope to achieve by:

    

Understanding the needs of customers and offering them superior products and service Leveraging technology service customers quickly, efficiently and conveniently Developing and implementing super risk management and investment strategies to offer sustainable and stable returns to their policyholders Providing an enabling environment to foster growth and learning for their employees And above all, building transparency in all their dealings.

Values 

Customer First: Own Customer; deliver the promise o Keep customer interest in the centre of all decisions. o Promise what you can, deliver it to finish. o Proactively seek Voice of Customer and act on it.



Boundary less: Never say ‘Its not my job’ o Offer help and support across functions to ensure business success. o Seek and share ideas freely o Recognize and respect internal customers. o Understand and value contributions from colleagues.



Ownership: If it is to be, it is up to me o Take responsibility and see tasks through to completion. o Own mistakes, learn from mistakes. o Pursue goals relentlessly, never give up. o Be a team player, take ownership for team performance.



Passion: Boundless energy and enthusiasm o Exhibit ‘Winning Instinct’. o Demonstrate speed and urgency for achieving results. o Challenge status quo and do things differently. o Nurture and motivate team members to reach full potential.



Integrity: Be honest and fair in what you say and do o Practice what you preach o Stand up honestly and fearlessly for what is right o Act in a consistent and equitable manner o Think and act for long term impact.

STAGES IN POLICY ISSURANCE

 Proposal A Proposal Stage is the First stage before the policy is issued at COPS. At this stage, the application form is received by COPS, but it is pending for issuance due to further clarifications required from the customer.

 Login A proposal, which is complete i.e., duly filled with all necessary documents attached to it & accepted by the Branch ops, is called a Login  Reject An Application gets rejected at the Branch Ops level due to necessary details not filled in the form or necessary documents not submitted are a Reject. It is then sent back to the Advisor for completion.

 Issuance Issuance means a policy that is issued to the Customer by Central Ops.

 Decline Status When a customer refuses to take a policy post login but before Issuance is called a Decline

 Cancellation When the cheque given by the customer bounces, it amounts to cancellation of the policy.

 Lapse A policy for which the Customer fails to pay subsequent premiums is a Lapsed Policy.

 Free look

Post issuance of the policy, the policyholder has the option to turn down the policy within 15 days from the date of issuance. This period of 15 days is called Free look Period.

 Surrender When a customer wants to discontinue with the policy it is called Surrender. Top Ten things to know about Life Insurance We all recognize the importance of life insurance. After all, we want to make sure that our loved ones are taken care of when we die. But before you run out and purchase a policy, do some research ahead of time. That way, you'll be sure to get the best possible coverage at the right price. Here are some helpful tips to get you started:  Shop around When it comes to life insurance, it pays to shop around because premiums can vary widely. And thanks to the Internet, it's now easier than ever. Try out one of the many insurance websites that can provide you with instant quotes. Make sure the website you shop from takes into consideration the factors in your medical history that can affect the premiums.  Never buy more coverage than you need The key to purchasing the right amount of life insurance is to have just enough coverage to meet your needs. If you have more life insurance than you need, you'll be paying unnecessarily for higher premiums. On the other hand, it's important not to have too little coverage, resulting in you being underinsured.  The healthier you are, the better the rates It's true – healthy people get better rates on life insurance. You will be asked to pay a higher rate for anything that shortens your life expectancy (e.g., if you smoke, take medications regularly, are overweight, have a bad driving record).

 Buy sooner rather than later

If you've been putting off purchasing life insurance because you don't want to pay the premiums, you may be doing yourself a disservice in the long run. The younger you are when you purchase life insurance, the lower your premiums will be.  Realize

the

importance

of

periodically

reviewing

your

coverage

Any life change signals the need for a review of your overall financial plan. When it comes to life insurance coverage, you'll want to make sure that this major life event (e.g., birth of a child, children are grown) won't leave you underinsured or over insured.  You

don't

necessarily

have

to

pay

a

commission

One of the reasons for higher premiums is that most life insurance policies pay commissions to the agent/broker. However, you may be able to purchase a no-load policy through an insurer that sells no-load policies directly to consumers.  You

may

be

paying

more

for

monthly

premium

payments

You may not realize it, but you may be paying more for your life insurance if you pay your premium in monthly installments. Many insurance companies charge extra fees if you make monthly premium payments instead of paying the annual premium.  Don't

rely

solely

on

the

life

insurance

offered

by

your

employer

Many employers offer their employees some sort of group life insurance. But this amount of coverage is usually not enough to adequately meet your life insurance needs. In addition, group life insurance policies are not portable, meaning that if you leave your job, you can't take your life insurance coverage with you.  Tell the whole truth and nothing but the truth If you're thinking about lying on your insurance application, think again. If your insurance company finds out that you lied about a health-related condition or your lifestyle (e.g., smoking habit), they may be able to terminate your coverage.

Board of Director:

Ms. Chanda D. Kochhar Chairperson

Mr. N. S. Kannan Director

Mr. V. Sridar Independent Director

Mr. Raghunath Hariharan Director

Mr. M. S. Ramachandran Independent Director

Mr. Vinod Kumar Dhall Independent Director

Mr. Dilip Karnik Independent Director

Mr. R. K. Nair Independent Director

Mr. Dileep Choksi Independent Director

Mr. Puneet Nanda Executive Director

AWARDS AND ACHIEVEMENTS

Mr. Sandeep Batra Executive Director

Mr. Sandeep Bakhshi Managing Director and CEO

ICICI Pru Life ranked as the Most Trusted Pvt Life Insurance brand in the Brand Equity "Most Trusted Brands 2009" survey

ICICI Prudential Life won a Gold award for AboutULIPS.com and Health Saver campaign, innovation award for www.taxguru08-09.com and a silver award for its Insurance yoga campaign at the ICICI Group Marketing Excellence award.

Confederation of Indian Industry (CII) - Western Region recently awarded ICICI Prudential Life a 'Commendation for Strong Commitment to HR Excellence 2008' at the CII HR Summit 2008.

ICICI Prudential Life Insurance was awarded with the coveted 'ICAI Award for Excellence in Financial Reporting' by the Institute of Chartered Accountants of India (ICAI) for the financial year ended March 31, 2008.

ICICI Prudential Life was awarded the Life Insurance Company of the Year at the12th Asia Insurance Industry Awards 2008.

ICICI Prudential Life was awarded with two Bronze Effie's in the services category for its Corporate campaign and Retirement Number campaign

ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner up at the Outlook Money & NDTV Profit Awards 2008

ICICI Prudential Life was awarded the SAP ACE 2008 Best Business Objects Award for its IT practices

ICICI Prudential Life won the Award for Brand Excellence in the Banking and Financial services category at the Asia Brand Congress 2008

Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance Co. Ltd. was adjudged the Businesswoman of the year at The Economic Times Awards for Corporate Excellence, 2007-08.

ICICI Prudential Life won the UK Trade & Investment India Business Awards 2008 in the Business Partnership Award-Large Company category

ICICI Prudential Life won the ICICI Group Marketing Excellence Award 2008 in three key categories for its marketing initiatives

ICICI Prudential Life was awarded the INDY’s Award for Excellence in Mass Communication in the category of Most Creative Advertisement-Television

India's Most Customer Responsive Insurance Company. Avaya Global Connect Economic Times. Customer Responsiveness Awards, 2007

Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was adjudged as one of the 50 Most Powerful Women in Business by The Financial Express.

Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was adjudged the Entrepreneur of the Year-Manager at the Ernst and Young Entrepreneur Awards 2007

Ms. Shikha Sharma, MD & CEO, ICICI Prudential Life Insurance was awarded the Outstanding Businesswoman of the Year at CNBC TV18's India Business Leader Awards 2007

ICICI Prudential Life Insurance won the award for the Best Life Insurer-Runner up at the Outlook Money & NDTV Profit Awards 2007

INSURANCE PRODUCT AND SERVICE: ICICI Prudential’s ultimate promise is financial security. A strong brand certainly boosts sale, but without customer-friendly, innovative products, even the best brand would not last long. ICICI Prudential’s product range has been developed on the understanding that different people have their own sets of needs at various stages of their lives. It has thus built a flexible portfolio of products that can be customized to cater to varying needs of people at each stage, and thus ensure protection in every step of life. The company’s philosophy has been to help customers understand their financial needs and work closely with them to customize a product that would meet. Advisors can offer a complete range of products –Savings plans, Child plans, Market-linked plans, Protection plans, and Retirement plans – and tailor a flexible solution to meet customers’ changing needs at every stage of life. In fact, ICICI Prudential was the first to un-bundle product benefits, pioneering the concept of ‘riders’ and soon after introduce comprehensive market-linked and retirement plans. ICICI Prudential has launched a handful of products that are analyzed below: ICICI Prudential's life insurance products may be loosely categorized under three forms: pure life insurance products without an investment angle to them; a product that is a mix of a cumulative investment scheme and an insurance product; and, finally, standard products such as money-back and endowment policies.

Life Insurance Plans Education Insurance Plans  Smart Kid New Unit-linked  Regular Premium  Smart Kid New Unit-linked  Single Premium

 Smart Kid Regular Premium Wealth Creation Plans  Wealth Advantage  LifeStage Assure  LifeTime Gold  LifeLink Super  LifeStage RP Premium Guarantee Plans  InvestShield Life New  InvestShield CashBank

Protection Plans  Pure Protect  Life Guard  Save 'n' Protect  CashBak  Home Assure Retirement Solutions  Life Stage Pension  LifeTime Super Pension  LifeLink Super Pension  ForeverLife Plan  Immediate Annuity Health Coverage Plans  Health Saver  Medi Assure  Hospital Care  Crisis Cover  Cancer Care

 Diabetes Care Active  Diabetes Assure ICICI Pru Group Solutions Advantage  Group Super Annuation  Group Gratuity Plan  Annuity Solutions  Group Term Insurance Plan  Group Term Insurance in lieu of EDLI Rural Plans o ICICI Pru Suraksha o ICICI Pru Suraksha Kavach Micro Insurance Plans  ICICI Pru Sarv Jana Plan PRODUCTS: Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder.  Life Time Gold is a unit-linked plan which offers potentially higher returns over the long term with flexible investment options to help you achieve your goals. It offers 8 fund options - Preserver, Protector, Return Guarantee Fund, Balancer, Flexi Balanced Multiplier, R.I.C.H and Flexi Growth.  Life Stage RP is unit linked plan that provides you with an option of lifecycle-based portfolio strategy that continuously re-distributes your money across various asset classes based on the customer’s profile, helping him achieve his desired financial goals.

 LifeLink Super is a single premium unit linked insurance which offers attractive premium allocation along with the opportunity to enjoy potentially high returns over the long term, without compromising on the protection of your family.  Invest Shield Life New is a unit linked plan that provides premium guarantee and allows the customer to enjoy the benfits of potentially higher returns while guaranteeing him that he will get back atleast all the premiums paid by him, while providing protection to your family with a life insurance cover.  Invest Shield Cashbak is a unit linked plan that provides premium guarantee while maintaing a balance between return, safety & liquidity.  Wealth Advantage s a unique whole life single premium unit linked plan that provides long term coverage upto the age of 70 years and provides you the option to systematically withdraw your money.  Life Stage Assure a unit linked insurance plan that provides Guaranteed Maturity Addition of 100%- 450% of first year premium based on the term and number of premiums paid, with the additional advantage of a lifecycle based portfolio strategy that allocates the investor’s money across various asset classes based on his age and risk appetite Protection Solutions  Pure Protect is a flexible and affordable term product, with which you can ensure your life and provide total security for your family in case of an unfortunate event.  Life Guard is a protection plan, which offers life cover at low cost. It is available in 2 options –level term assurance with return of premium & single premium.  Home Assure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner Child Plans Smart Kid New ULRP The policy is designed to provide money at key educational

milestones in the child's life. SmartKid plans are also Retirement Solutions  Forever Life is a traditional retirement product that offers guaranteed returns for the first 4 years.  Life Time Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5,10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement.  Life Stage Pension is a regular premium unit linked pension plan that provides you with a unique lifecycle-based strategy that continuously re-distributes your money across various asset classes based on your age and risk profile.  Life Link Super Pension is a single premium unit linked pension plan.  Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options. Health Solutions  Hospital Care is a fixed benefit plan covering various stages of treatment – hospitalization, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20 years.  Crisis Cover is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death.  Diabetes Care Active is a long term insurance policy created for individuals with Type II diabetes and pre-diabetes. It offers long term (upto 20 years)

control over diabetes through a specially designed Wellness Programme including regular health checkups and a Diabetes Coach to facilitate diabetes management. It also provides you coverage against seven major critical illnesses.  Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions.  Medical Assure is a health insurance policy that provides assured insurability till age 75 years, assured coverage for accepted pre-existing illnesses after 2 years and an assured price for 3 years.  Health Saver provides comprehensive hospitalization cover and reimburses all other medical expenses by building a health fund.  available in traditional form Flexible Rider Options ICICI Prudential Life offers flexible riders, which can be added to the Basic policy at a marginal cost, depending on the specific needs of The customer Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser. If the death occurs while traveling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. Critical illness benefit: Critical Illness Benefit Rider provides protection against 9 critical illnesses to the policyholder when attached to the basic plan. Waiver of premium: On total and permanent disablement due to accident all future premiums under the base plan will be waived till the end of the term of the rider or death of assured life, if earlier. Income benefit rider: In case of death of the Life Assured during the term of the policy,

10% of the Sum Assured is paid annually to the nominee on each policy anniversary till the maturity of the rider.

CHAPTER 3: INDUSTRY PROFILE INTRODUCTION As finance is the lifeblood for all economic activities, one aspect of financial arena, which plays a very important role, is the Insurance. Insurance is the outcome of Man’s search for safety and security, and to find out ways and means to minimize the hardship, which are beyond his control. Because of the economic reforms introduced by our government we can see that due to this Globalization and privatization there is enormous increase in the private sector players queuing in the insurance sector. This entry of Private players has enhanced the competitiveness and Quality of service with many innovated products. Now in India there are totally 28 players including 14 Life and 14 General Insurance Companies. And Life Insurance is one of the most common forms of insurance. ICICI Prudential Life Insurance Company is an emerging star in the Private players with the competition being Global in nature BRIEF HISTORY OF INSURANCE: The business of insurance started with marine business. The first insurance policy was issued in 1583 in England. Some of the important milestones in the insurance business in India are: 1818: -The British introduce to India, with the establishment of the Oriental Life Insurance Company in Calcutta. 1850: - Non life insurance debuts, with Triton Insurance company. 1870: - Bombay Mutual Life Assurance Society is the first India-owned life insurer. 1907: - Indian Mercantile Insurance is the first Indian non-life insurer. 1912: -The Indian life assurance Companies act enacted to regulate the life insurance business. 1938: - The insurance act, which forms the basis for most current insurance laws, replaces earlier act. 1956: - Life insurance nationalized, government takes over 245 Indian and foreign insurers and provident societies.

1972: - Non Life insurance nationalized, GIC set up. 1993: - Malhotra Committee, headed by former BBI governor R.N. Malhotra, set up to draw up a blue print for insurance sector reforms. 1994: -Malhotra Committee recommends re-entry for private players, autonomy to PSU insurers. 1997:-Insurance regulator IRDA (Insurance Regulatory and Development Authority) set up. 2000:-IRDA starts giving licences to private insurers, ICICI Prudential and HDFC Standard Life first private insurers to sell a policy. 2002:- Banks were allowed to sell insurance plans, as TPAs enter the scene, insurers start settling non-life claims in the cashless mode.

Insurance: Definition and Meaning Functional definition: In the words of R.S.Sharma “Insurance is a Co-operative devices to spread the loss caused by particular risk over a number of persons who were exposed to it and who agree top insure themselves against the risk” Contractual Definition: According to E.W.Patterson, “Insurance is a contract by which one party, for a consideration called a premium, assures a particular risk of other party ad promises to pay to him or his nominee a certain or ascertainable sum of money on a specified contingency. According to the U.S Life Office Management Association Inc (LOMA), Life Insurance is defined as follows: Life insurance provides a sum of money if the person who is insured dies whilst the policy is in effect Other terms used in relation to insurance and their meaning: Agent: The authorized representative of the insurer, licensed by the concerned authorities like IRDA to canvass insurance.

Bonus: The yearly share of policy holders profit declared by the company based on its profits which gets added to the policy amount and is payable upon its maturity. Claim: The amount entitled to the policy holder or his nominee/assignee under a policy contract in the event of the happening of the contingency insured against. Insurable Interest: Evidence suggesting financial losses due to the occurrence of the event insured against. Policy: The evidence of contract between the insurer and the insured. A stamped sealed and signed document issued by the insurer to the insured in proof of insuring his life. Premium: The amount mentioned in the policy contract to be paid by the insurer periodically to the insure to keep the policy in full force

Insurance in Indian Financial System: In India insurance is in practice since 12th century as per the records. The first life insurance company to operate in India the Oriental Life Insurance company was established in 1818 in Calcutta. However it was a British company. The first Indian Insurance company, the Bombay Mutual Life Assurance Society started its operation in 1871. The Indian Life Insurance company Act was passed in 1928.Subsequently, both of these Acts were merged and the insurance Act 1938 was promulgated. Independent India amended the Insurance Act in 1950 and in 1956, the then fiancé minister of the nation Mr. C D Deshmukh nationalized all insurance companies, 154 Indian Insurance companies and 75 provident societies. Finally the life insurance Corporation was born on 1st September 1956. The story of non-life insurance in India is no different. Though Lloyd’s insurance pioneered the general Insurance way back in 1688, the first non-life Insurance Company set up shop in India was the Triton Insurance company of Calcutta. In 1907 the first Indian general insurer the Indian Mercantile insurance company started its operations. The New India Assurance Company Limited was incorporated in 1919. After independence the India Reinsurance Corporation was set up in 1956 and in 1957 the office of the controller of the

insurance was constituted. In 1968, that tariff advisory committee was set up to regulate the investment of the players and finally in 1972, the non-life insurance business in the country was nationalized and the general insurance company was formed as holding company with four subsidiaries, the National Insurance, Oriental Insurance, United India Insurance and the new India Assurance Company Limited. In the same year the National Insurance Company Limited was amalgamated with 22 foreign and 11 Indian Insurance companies. Thus over a period of two centuries, the Indian insurance industry has gone through the full circle. From being an open competitive market, it went through nationalization and has been subsequently liberalized again. Keeping in mind the national economic and commercial objective of India the government has set up IRDA on 7th December 1999. Through which the reforms process of the industry got under way. Insurance in Indian Financial System – Its Importance Insurance industry is one of the corner stone of any economy and financial System. Insurance industry contributes its major part in increasing the saving and the fund collected is utilized in developmental programs. The Financial sector in our country is in the process of change with the objective o the overall growth of the economy. The insurance sector as every one knows constitutes a very important and vital financial intermediary for the growth of the economy. Insurance has become part and parcel of the financial system because it: 

Reduces the uncertainty of business loses.



Increases business efficiency.



Identifies key men.



Enhances the credit.



Takes care of welfare of the society.



Protect the wealth of the nation.



Helps to attain economic growth.



Reduces the inflation level.

The advantages of Life Insurance :



Life insurance is brought not because someone is going to die, but because someone is going to live.



Life insurance means peace of mind.



Life insurance promises payment of the full sum assured from the moment the first premium is paid.



Life insurance encourages regular savings and guards against extravagances.



In most cases life insurance possesses a cash value after the first three years.



Life insurance removes the worry of looking after your savings. Experts safely and profitably invest your money on your behalf by experts.



Life insurance guarantees payment in cash and is backed by the Government of India.



Life insurance is a tax saving product.



Life insurance is free from loss, from theft, fire, misplacement etc.



A life insurance contract is one sided, i.e., always in favor of the insured and his family. One can withdraw from the contract anytime, but the company’s cannot.



Life insurance replaces uncertainty with certainty. It provide a complete, balanced and perfect hedge against economic threats, which confront all person, the danger of living too long or the danger of dying soon.

How Insurance Works Suppose there are 1000 person all aged 35 years and healthy lives. They are insured for one year against the risk of death. Each person is insured for Rs. 50,000. if the past experience indicates the 4 out of 1000 people die during the year, expected amount claimed to be paid to the family of 4 persons would come to Rs. 2,00,000. the contribution to be paid by the each of the 1000 will come to Rs.200 per year. Thus, all the 1000 persons share loss caused to the 4 unfortunate families. 996 persons who survived till 1 year have not lost any thing as they have secured peace of mind and a feeling of security for their family. While insurance cannot prevent accident or premature death, it can help, protect the family of the deceased against the loss of income caused by the of the main breadwinner. In return for specified payments, insurance will provide protection against the insurance of an uncertain event such as premature death.

The business of insurance company called insurer is to bring together persons who are exposed to similar risk, collect contribution (premium) from them on sum equitable basis and pay the losses (claim) to the unfortunate few who suffer.

NEED FOR THE INSURANCE: Unlike other avenues of savings where the amount saved with interest is payable only on maturity, insurance plans provide for payment of the total sum assured along with a bonus, if any, on any eventuality even before the maturity of the policy. And another advantage of insurance is that an insurer can avail loans against the security of the policy from the insurance company. Even banks and other financial institutions advances loans with insurance policies as a collateral security.To provide for one’s family and perhaps; others in the event of death, especially premature death. Originally, policies were to provide for short period of time, covering temporary risky situations, such as sea voyages. As lie insurance became more established, it was realized what a useful tool it was for a number of situation, including: 

Temporary needs/threats:The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc.



Regular savings:Providing for one’s family and oneself, as a medium o long term exercise (through a

series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence from their family. 

Investment; It is the insurance that builds up the savings of the society and thus safeguard the

economy from the ravages of inflation. Unlike regular saving products, investment Products are traditionally lump sum investments, where the individual makes one time payment. 

Retirement:Provisions for one’s own later years become increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in one’s old age.

Why should you take insurance Insurance is desired to safeguard oneself and ones family against possible losses on account of risk and perils. It provides financial compensation for the losses suffered due to the happening

of unforeseen events. By taking life insurance a person can have peace of mind and need not worry about the financial consequences in case of any untimely death. Along with the growth of overall population in the country, crossing the benchmark of hundred crore, there gas been a significant awareness for the need for insurance in the other as well as rural segments and even among the lower middle class and illiterate class of the population.We in India have around 30 crore middle class educated and enlightened people who have not realized that insurance is as necessary as the other basic necessities of life such as food, shelter, clothing. The Insurance Regulatory and Development Authority (IRDA): Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies were the launch of the IRDA’s online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 12 life insurance and 6 general insurance companies have been registered.

Functioning of the IRDA  To exercise all the powers and functions of controller of insurance.  Protection of the interest of the policy holders.  To issue, renew, modify, withdraw or suspend certificate of registration.  To specify requisite qualification and training for insurance intermediaries and agents.

 To promote and regulate professional organizations connected with insurance. 

To conduct inspection/investigation etc.



To prescribe method of insurance accounting.



To regulate investment of funds and margins of solvency.



To adjudicate upon dispute.



To conduct inspection and audit of insurers intermediaries and other organization concerned with insurance.

With a mission of : “ protect the interest of the policy holders to regulate promote and ensure orderly growth of the insurance industry and for matters connected there with or incidental thereto”.

IRDA Enablers: In the new market set up, the IRDA’s role that of an enabler. The new insurers will conduct insurance business in India according to the healthy norms prescribed the IRDA. Regulations for all insurance intermediaries will specify sales-norms. Guidelines for the code of conduct for the surveyors and loss assessors will help all concerned. Efficiency will be promoted in the conduct of insurance business. Professional organizations connected with insurance business will regulate.The role of IRDA, besides regulating the market, it also intents to develop it. The IRDA has the task to promote fair competition in hither to monopolistic insurance market. In such a fast develop scenario were the prospected appears to be brighter both for insurers and the customers COMPETITORS INFORMATION IN INSURANCE INDUSTRY: a) LIC -Fully owned by Government. b) Postal Life Insurance.  Private Players a) Baja Allianz Life Insurance Co. Ltd. b) Birla Sun Life Insurance Co. Ltd.

c) HDFC Standard Life Insurance Co. Ltd. d) ICICI Prudential Life Insurance Co. Ltd. e) ING Vysya Life Insurance Co. Ltd. f) Max New York Life Insurance Co. Ltd. g) MetLife India Insurance Co. Pvt. Ltd. h) Kotak Mahindra Old Mutual Life Insurance Co. Ltd. i) SBI Life Insurance Co. Ltd. j) TATA AIG Life Insurance Co. Ltd k) AMP Sanmar Assurance Co. Ltd. l) Aviva Life Insurance Co. Ltd. m) Sahara India Life Insurance Co. Ltd. n) Shriram Sunlam.  Other Likely Players – PNB Life Insurance, Reliance Life Insurance, Axa Bharti Enterprises. INDIAN INSURER

WEBSITE

Allianz Bajaj life allianzbajaj.co.in

PROMOTER

FOREIGN PROMOTER

Bajaj Auto

Allianz AG

insurance Assurance

ampsanmar.com

Sanmar Group

AMP, Australia

Birla Sun Life

birlasunlife.com

Aditya Birla Group

Sun Life Financial,

Insurance

Canada

Aviva

Life avivindia.com

Dabur India

Aviva Plc

HDFC

Standard Life

ICICI

Prudential Plc

Vysya Bank

ING Group

Govt of India

None

Max India

New York Life

Insurance HDFC

Standard dfcinsurance.com

Life insurance ICICI

Prudential iciciprulife.com

Life Insurance ING

Vysya

Life ingvysyalife.com

Insurance Life

Insurance Licindia.com

Corporation Max New York

maxnewyorklife.com

MetLife

India metlifeindia.com

Insurance OM

J&K Bank,Pallonji Metropolitan & Co

Kotak Omkotakmahindra.com Kotak

Mahindra Life

Life

Insurance mahindra Old Mutual Plc

finance

SBI life insurance

sbilife.co.in

State Bank of India

Cardiff (arm of BNP Paribas)

Tata-AIG insurance

life tata-aig.com

Tata Group

American International Group

CHAPTER 4: DATA ANALYSIS & INTERPRETATION

1) Which of these are important while choosing life insurance? Valid Investment

Frequency 8

Frequency (%) 8%

Security

15

15%

Savings

11

11%

Tax Benefits

8

8%

Returns

27

27%

Financial Future Need

31

31%

Total

100

100%

Investment, 8 Financial Future Need, 31

Security , 15

Savings, 11

Tax Benefits, 8 Returns, 27

2) In which company you have invested?

Valid

Frequency

Frequency (%)

LIC

39

39%

ICICI Prudential

51

51%

Reliance Insurance

2

2%

Bajaj Allianz’s

7

7%

If any other

1

1%

Total

100

100%

LIC

ICICI Prudential

Reliance Insurance

Bajaj Allianz's

If any other

1%

2%

7% 39%

51%

Interpretation: According to our project survey out of 100 respondent 39% invest in LIC, 51% invest in ICICI Prudential life insurance, 2% invest in Reliance insurance, 7% invest in Bajaj Allianz’s and 1% of respondent other companies

3) How did you come to know the life insurance?

Valid

Frequency

Percent

T.V. Advertisement

3

3%

News paper/magazines’

4

4%

Company advisor(agent)

61

61%

reference(friends relatives)

26

26%

if any other Total

6 100

6% 100%

Frequency

6% 3% 4% 26%

T.V. Advertisement News paper/magazines’ Company advisor(agent) 61%

reference(friends relatives) if any other

Interpretation: According to our project survey out of 100 respondent information

people get the

3% on T.V.advertisement, 4% on news paper and magazines,61% company

advisors, 26% reference( friends and relatives). According to our project survey shows that more people get information from company advisors.

4)

Are you aware of ULIP in ICICI Prudential life insurance? Valid Yes No Not respond Total

Frequency 74 24 2 100

Percent 74.% 24% 2% 100%

Frequency Yes

No

Not respond

Total

37% 50%

12%

1%

Interpretation: According to our project survey out of 100 respondent, awareness of ULIP in ICICI Prudential life insurance is 74%, and non awareness of ULIP is 24%, and not respondents are 2%.it indicates that awareness of ICICI Prudential is more.

5) If yes, which insurance plan would like to invest in ICICI Prudential life insurance? Valid Smart kid lifetime gold retirement solution if other specify Not respond Total

Frequency 20 17 39 1 23 100

Percent 20.0 17.0 39.0 1.0 23.0 100.0

Frequency Smart kid

lifetime gold

retirement solution

23%

if other specify

Not respond

20%

1% 17% 39%

Interpretation: According to our project survey out of 100 respondent 20% respondents like to invest smart kid, 17% lifetime gold, 39% retirement solution, 1% respondents like to invest rest of the plans, 23% not respondents, according to our survey people would like to invest more in retirement solution plan.

6) What factor consider while making the ULIP in ICICI

flexibility Security Returns Full withdrawal Not respond Total

Frequenc y

Percent

9 11 43 14 23

9.0 11.0 43.0 14.0 23.0

100

100.0

Frequency flexibility

Security

23%

Returns

Full withdrawal

Not respond

9%

11%

14% 43%

Interpretation: According to our project survey out of 100 respondents 9% considered for making ULIP is flexibility, 11% considered for security, 43% for returns 14% for full withdrawals and 23% not respondent It shows people considered ULIP for the purpose of returns.

7) Which premium payment method you have opted for

yearly half yearly quarterly monthly not respondent Total

Frequen cy 28 34 9 6 23 100

Percent 28.0 34.0 9.0 6.0 23.0 100.0

Frequency yearly

half yearly

quarterly

monthly

23%

not respondent

28%

6% 9% 34%

Interpretation: According to our project survey out of 100 respondent 28% opted for yearly, 34% half yearly, 9% quarterly and remaining 6% for monthly. It will indicates more people opted for investment premium payment method for half yearly basis.

8) How much risk involved in ULIP

Frequenc y 5

Perc ent 5.0

averag e High

40

40.0

32

32.0

Not respon d Total

23

23.0

100

100.0

Low

Conclusion To conclude, the survey results highlight some important facts, though ICICI Prudential may be comparatively competitive with other companies ULIP. The choice of people investing in insurance is more as 31% and awareness of ICICI Prudential ULIP is more as 74%, 61% people get information from company advisors and satisfaction level of ULIP is more as 53% it will shows that ULIP is grow more in future days.

Recommendations  For ICICI to have a larger market share it has to widen the customer base, so it should come up with intensive market strategy and aggressive publicity stunts such as:  Deployment of addition sales force for proper marketing.  Continuous bombardment of Advertisement by ICICI Prudential as a Life Insurance  Company for a common man as well as for well educated and good salaried people.  Hoardings in and around the important areas(public concentrated areas)  The company should concentrate on the people aged between 18-25 for individual and also the age category 35-55 for family.  Since individuals are interested in insuring their family members the company should concentrate on insuring the individual’s family members.  ICICI Prudential should concentrate on geographical areas for its expansion and to penetrate through rural areas it should tie-up with rural banks such as M.G.Bank etc.  34% respondents would like to pay half yearly premium. The company should also emphasis on yearly payment of premium  Top of mind insurance company is LIC, because of its trust what people keep in it and its awareness. So ICICI Prudential should emphasis heavy advertisement.  31% respondents would like to invest money in insurance for financial future need. So ICICI to provide different financial future satisfaction plans to the people.