My Training Report

A Project Report on the Topic of “Sales and Distribution of Financial Product” In

Submitted In Partial Fulfillment Of the Requirement of Master Degree in Business Administration

(2008 – 2009) SUBMITTED BY HARIOM MBA (BE) IIIrd SEMESTER

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Serial No.

Topics

Page No.

1.

Certificate by the Organization

3

2.

Certificate by the Faculty guide

4

3.

Preface

5

4.

Acknowledgement

6

5.

Objective of Training

7

6.

Executive Summary

8

7.

Scope of the Study

9

8.

Reliance ADA Group

10

9.

Profile Of the Company

11-12

10.

Business Overview

13-14

11.

Board of Directors

15-16

12.

Partners of the Company

17-18

13.

Products of the Company

19

14.

Reliance Life Insurance

20-26

14.1

Insurance Plans

27-36

15.

Reliance Demat Account

37-43

16.

Reliance Mutual Fund

44-54

17.

Reliance General Insurance

55-59

18.

Market Analysis

60-64

19.

Recommendation

65

20.

Bibliography

66

21.

Conclusion

67

2

3

Dr. Amit Pathak Faculty of Management Studies, Haridwar, Uttarakhand.

CERTIFICATE BY THE FACULTY GUIDE This is to certify that Mr. Hari om, Student of MBA (BE) III Semester has completed the summer training on the topic Sales and Distribution of financial

Products in a reputed company Reliance Money, a Part of the Reliance Capital at DEHRADUN. The summer training project report is based on the work done by the candidate himself and fulfils the requirement of the project necessary for partial fulfillment of the MBA degree. The work carried out by the candidate on the above mentioned topic is up to the mark as supported by the certificate issued by the Organization where the candidate has undergone training for completion of the project work. To the best of my knowledge and belief, the work has not been submitted anywhere else for award of any degree or diploma. We wish him success in his life.

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Private sector is one of the fastest growing sectors in the country. After the Liberalization the Private industry still holds vast opportunities for young and experienced professionals. On the life insurance side public sector life insurance Corporation of India is, of course, the largest player with a history of over 50 years. After Privatization, the PSU has been making efforts to improve efficiency and customer services. Among the private life insurance player Reliance life insurance is the key player. Reliance money - Anil Dhirubhai Ambani Group offers most dynamic web based trading environment to its customers .The Reliance Money stock trading websites uses special security features 'Security Token', which makes you online trading experience more secure without complexity. Reliance ADG provide the vast opportunities to the new aspirants of the business administration. The financial Sector is full of competition even if there are a lot of opportunities to the job in Reliance Money and It is the platform to go on the highest peak in the life of any coming one. Reliance Money is a single window that provide the multisystem facilities of the financial Products. There are many companies in the market which are providing the financial product like insurance, demat account services, mutual funds, general insurance, Portfolio management services(PMS), wealth management, gold coins, Money changing , Money Transfer, and the others. Hence Reliance Money provide many financial product on the single window. Reliance money deals with the product and Investment options are available in... •

Equity (Stock) Trading

•

Derivatives Trading Special feature is available first time to track your positions online, in real time.

•

Forex Trading

•

Commodity Trading

•

IPO's

•

Mutual Funds

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•

Insurance

Sometimes words fall short to show gratitude, the same happened with me during this project. The immense help and support received from Reliance Money Limited overwhelmed me during the project. It was a great opportunity for me to work with Reliance money, pioneers in the field of stock trading, a part of Reliance Capital Ltd. I am extremely grateful to the

entire team of Reliance Money at Dehradun who have shared their expertise and knowledge with me and without whom the completion of this project would have been virtually impossible. My sincere gratitude to Mr. Bhupendra Dwivedi (Center Manager, Reliance money limited, Dehradun) for providing me with an opportunity to work with Reliance Money Limited at Dehradun as a company project guide who has provided me with the necessary information and his valuable suggestion and comments on bringing out this report in the best possible way. I am highly indebted to Mr. Mayank Mittal (Sales executive of Reliance Mutual Funds, Dehradun) and company project guide, who has provided me the necessary information and his valuable suggestion and a good support in understanding the basics of the mutual funds easily. I feel great pleasure to cordial thanks Mr.Varun Chowdhary (Sales Manager Reliance life Insurance, Dehradun) and Mr. Pramod Kumar (Sales Executives Reliance life Insurance Dehradun). I also very thankful to my friends who help me in completion of the project. I am thankful to that power that always inspires me to take right step in the journey of success my life.

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Frankly speaking, any job or the task, have the specific objective i.e. what is need and what is the requirement of the particular work. In the same way my objective is also to learn something from the summer internship program . It means that the training program in any reputed company give the market knowledge of its subject matter of study. The right choice of the company in which a student has to do the training, is also the part of the learning and what he/she want to learn in the summer training. In the short span since the insurance sector was opened up, Many companies have literally dictated the market’s evolution. Catering to all age and income segments, the company stated out with the traditional insurance policies that were easy to understand, the idea was to entice customers used to LIC’s style of functioning. Reliance money began exploring new areas; it introduced modern products, like Unitlinked Product where return are linked to the market performance of the underlying assets. Reliance Money leads and virtually all parameters; size of agent force, number of policies sold, total sum, total sum assured, premium income and productivity of agents it has set exacting standards for its range of products, riders offered, quality of information in promotional material and even in the insurance awareness events organized. What has been in favour of Reliance Money is the range of product in each segment of life insurance-traditional, unit-linked and single premium option, that are for retirement plan or child plan. With such a comprehensive bouquet, it caters to the financial goals of a customer. Reliance Money a growing reputed company give the good platform in selling of the product like insurance, Equity & commodities, derivative, IPO’s, offshore investment, mutual fund, gold coins etc. So the objective of study is to see in the basket of product and satisfaction of customers with the company through research work in Dehradun.

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This project has been a great learning experience for me, at the same time it gave me enough scope to implement my analytical ability. The first part gives an insight about the Demat Account, Life Insurance, General Insurance and mutual funds and theirs various aspects. It is purely based on whatever I learned at Reliance Money. One can have a brief knowledge about mutual funds and all its basics through the project. Other than that the real servings come when one moves ahead. Some of the most interesting questions regarding these products have been covered. Some of them are: •

Why has it become one of the largest financial intermediaries?

•

How investors do chose between funds and these products?

Most popular stocks among fund managers, most lucrative sectors for fund managers, a special report on Systematic Investment Plan, does fund performance persists and the topping of all the servings in the form of portfolio analysis tool and its application. All the topics have been covered in a very systematic way. The language has been kept simple so that even a layman could understand. All the quarries of the customer asked by them, had been solved with the support of the seniors in the organization. The problems of the customer were being recorded for the purpose of the research and development.

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The scope of the study refers to the job that to know about the activities of the organization. The study means that the analysis of the products of the company on which he/she has to focus. During the summer training the volunteer need to find out the corporate strategies of the running company and The mile stone which the company has covered during its journey. In the summer training, it is necessary for the student that he /she involve with the experience guys to get the knowledge about the company. That is how the company has got the success, Or if it is going in the loss, why. In my training period I have found that the reliance group is the biggest group in Indian companies. I felt that I can learn the more in the Reliance Money Limited. Reliance Money Limited is the part of the Reliance Capital Limited which is a growing company in the financial products. Reliance Anil Dhirubhai ambani group is also deals in communication, energy, natural resources, media, and entertainment, healthcare and infrastructure.

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Reliance Capital

Reliance Reliance General Mutual fund Insurance Mutual Fund

Reliance Life Reliance Money Insurance

Reliance Consumer Finance

Reliance money is a part of the reliance Anil Dhirubai Ambani Group and is promoted by Reliance capital, the fastest growing private sector financial services company in India, ranked amongst the top 3 private sector financial companies in terms of net worth. Reliance money is a comprehensive financial solution provider that enables you to carry out trading and investment activities in a secure, cost-effective and convenient manner. Through reliance money, you can invest in a wide range of asset classes from Equity, Equity and commodity Derivatives, Mutual Funds, insurance products, IPO’s to availing services of Money Transfer & Money changing. Reliance Money offers the convenience of on-line and offline transactions through a variety of means, including its Portal, Call & Transact, Transaction Kiosks and at it’s network of affiliates. Some key steps of the company that are as…..

“Success is a journey, not a destination.” If we look for examples to prove this quote then we can find many but there is none like that of Reliance Money. The company which is today known as the largest financial service provider of India.

• Success sutras of Reliance Money:

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The success story of the company is driven by 8 success sutras adopted by it namely

trust,

integrity,

dedication,

commitment,

enterprise, hard work and team play, learning and

innovation, empathy and humility. These are the

values that bind success with Reliance Money.

• Vision of Reliance Money To achieve & sustain market leadership, Reliance Money shall aim for complete customer satisfaction, by combining its human and technological resources, to provide world class quality services. In the process Reliance Money shall strive to meet and exceed customer's satisfaction and set industry standards.

• Mission statement: “Our mission is to be a leading and preferred

service provider to our customers, and we aim to achieve this leadership position by building an innovative, enterprising , and technology driven organization which will set the highest standards of service and business ethics.”

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Reliance Capital has interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking, depository services, distribution of financial products, consumer finance and other activities in financial services. Reliance Mutual Fund is India's no.1 Mutual Fund. Reliance Life Insurance is India's fastest growing life insurance company and among the top 4 private sector insurers. Reliance General Insurance is India's fastest growing general insurance company and the top 3 private sector insurers. Reliance Money is the largest brokerage and distributor of financial products in India with more than 2.5 million customers and the largest distribution network. Reliance Consumer finance has a loan book of over Rs. 8,000 crores

at

the

end

of

June

2008.

Reliance Capital has a net worth of Rs.6,862 crores (US$ 1.6 billion) and total assets of Rs. 19,940 crores (US$ 4.6 billion) as of June 30, 2008 and over 26,000 employees. Money has increased its market share among private financial companies to nearly Convenient & effective – Anytime & anywhere financial transaction capability. Launched in April 2007. It provides the Flat fees system. It has 2.2 million customers in 1 year of official launch. It has over 5,000 outlets across 700 towns/cities. Average daily turnover – in excess of Rs 2,000 crores. Considering the entire life market, including the Rs. 12,890 crores booked by life insurance Corporation, Reliance life insurance market share works out to around 6.25% . The life insurance market continuous to be dominated by LIC which has about 67% share this only a marginal dip from its 73% share in end-July . These comparisons are only for first year or new business premium. The gap between Reliance life insurance and the second-in-line private insurer is vast. In fact, this scenario has led some analysts to wonder if the company is not a trifle too aggressive. But others say this has more to do with the companies’ customer-centric

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focus, its pan-India presence and superior risk management and investment strategies. Reliance Money is not, however, resting on its laurels. Company’s customer centric approach will be studied during the training period and the finding of the research work will definitely focus on the present condition & future requirement (if any) relating to products of company.

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Anil Dhirubhai Ambani - Chairman Regarded as one of the foremost corporate leaders of contemporary India, Shri Anil D Ambani, 50, is the chairman of all listed companies of the Reliance ADA Group, namely, Reliance Communications, Reliance Capital, Reliance Energy, Reliance Natural Resources and Reliance Power. He is also Chairman of the Board of Governors of Dhirubhai Ambani Institute of Information and Communication Technology, Gandhi Nagar, Gujarat. Till recently, he also held the post of Vice Chairman and Managing Director in Reliance Industries Limited (RIL), India's largest private sector enterprise. Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and was centrally involved in every aspect of the company's management over the next 22 years. He is credited with having pioneered a number of path-breaking financial innovations in the Indian capital markets. He spearheaded the country's first forays into the overseas capital markets with international public offerings of global depositary receipts, convertibles and bonds. Starting in 1991, he directed Reliance Industries in its efforts to raise over US$ 2 billion. He also steered the 100-year Yankee bond issue for the company in January 1997.

Amitabh Jhunjhunwala - Vice-Chairman Shri Amitabhabh Jhunjhunwala, 51, is a Fellow Chartered Accountant. He has vast experience in the areas of financial services and capital markets. Shri Jhunjhunwala was appointed to the Board on March 7, 2003 and was appointed Vice Chairman on March 20, 2006. He is a Director on the Board of Harmony Art Foundation and Reliance Anil Dhirubhai Ambani Group Pvt. Ltd.

Rajendra Chitale - Independent Director Shri Rajendra P. Chitale, 46, an eminent Chartered Accountant, is the Managing Partner of M/s M. P. Chitale & Associates. He is a Director on boards of the National Securities 16

Clearing Corporation Limited, Asset Reconstruction Company (India) Ltd, Hinduja TMT Limited, HTMT Global Solutions Ltd, Ambuja Cement Limited, SME Rating Agency of India Limited, Ishan Real Estate PLC and Reliance General Insurance Company Ltd. He is also a member of the advisory board of the Insurance and Regulatory Authority of India (IRDA). He has also served on the boards of Life Insurance Corporation of India, Unit Trust of India, SBI Capital Markets Ltd., National Stock Exchange of India Ltd. and Small Industries Development Bank of India. Shri C. P. Jain Shri C.P. Jain, 61, is the former Chairman and Managing Director of NTPC Ltd. (National Thermal Power Corporation). Shri Jain has an illustrious career spanning over four decades of contribution in the fields of financial management, general management, strategic management and business leadership. He is a fellow member of the Institute of Chartered Accountants of India with an advanced diploma in Management and is a law graduate. Shri C. P. Jain joined the Board of NTPC in 1993 as Director (Finance), was elevated as Chairman & Managing Director in September 2000 and superannuated in March 2006. He is Chairman of the Global Studies Committee of World Energy Council (WEC), world's largest energy NGO with nearly hundred member-nations. He has been on several important committees of the Government of India, latest being the 'Adhoc Group of Experts on Empowerment of CPSEs'. He was Chairman of Standing Conference of Public Enterprises (SCOPE) between April 2003 and March 2005. He is a Director on the Board of IL & FS Infrastructure Development Corporation and, is also a member of the Audit Advisory Board of the Comptroller and Audit General of India.

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•

Reliance Life Insurance

• Demat Account Services

20

•

Reliance Mutual Funds

•

Reliance General Insurance

Reliance Life Insurance, a part of the Reliance - Anil Dhirubhai Ambani Group is India's fastest growing life insurance company and among the top 4 private sector life insurers. Reliance Life Insurance has a pan India presence and a range of products catering to individual as well as corporate needs. Reliance Life Insurance has over 700 branches and 1, 80,000 agents. It offers 26 products covering savings, protection & investment requirements. Reliance Life Insurance will endeavor to attain a leadership position in the market over the next few years, by further expanding and strengthening its distribution network and offering a diverse array of products to suit the varied and specific needs of individual customers.

Basics of Life Insurance

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What is Life Insurance? An amount of money paid to someone (called beneficiary) when the Life Assured (in whose name the insurance policy is taken) dies. This amount can be used to pay the expenses related to Life assureds death or can be invested to generate income that will replace your salary. Life Insurance is an important tool in any investors portfolio & can be used for - wealth creation, asset building, provide for contingencies and retirement planning.

The main reason to buy Life Insurance is to provide income replacement for your loved ones

Types of Life Insurance Policies •

Most Insurance policies are a combination of Savings & Protection.

•

Products are formulated by either increasing or decreasing either one of these components.

•

These combinations can be broadly divided into 4 groups - ULIPs -

Term Insurance

-

Endowment Policies : Whole Life; Unit Linked etc

-

Annuities & Pension

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Life Stage in Life Insurance

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Peak earning age range. High asset creation & build up of liabilities. Critical stage for dependents

Introduction of dependents. Start of financial planning – balance between asset creation & protection

Asset base build up & liabilities reduced/ taken care of. Need for retirement planning more than protection.

Need for protection low. Greater need for regular income flow.

No dependents/ liabilities therefore need for insurance is less

18-25 (Unmarrie d)

25-30 Marrid couples with no kids

Endowment / ULIP’s

30-45 years Couples with children

45 yrs and above Matured couple

Endowment / ULIP’s + Term

Retire d

Annuities

At each stage , requirements, responsibilities and Financial Needs differ

Need Analysis in life Stages

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AGE

STATUS

INSURANCE NEEDS 1.Go

18yrs - 25yrs

25yrs -30yrs

Unmarried

Married

on a holiday 2.Buy a new Car 3.Set up a new house 4.Set up Interiors 5.Buy jewellery 1.High Debt, high expenditure Phase 2.Family dependency on your income 3.Low accumulated wealth 4.Need for Planning Requirement

1.Retirement

30yrs - 45yrs

60yrs and above

Matured couple

Post Retirement

Planning 2.Wealth transfer or saving vehicles 3.Returns on investment 4.Opting for guaranteed Product 1.Protection in case you live long 2.Protection for spouse in case of death 3.Wealth accumulation for children

Life Stage Example

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SUGGESTED PRODUCTS Short Term Endowment Product

Temporary term or whole life Product

Profits or Unit Linked Endowment/ Deferred annuities

1.Single Premium

annuities 2.Long term care products 3.Whole life products

T erm

Endowme nt

Annuitie s

Savera has just come to our lives. As proud parents, We need to protect her as well as create her own financial standing

Hello, I am Philip, sailor. Have seen the world. Always on cruise and keep worrying about family and the loans. I need financial Protection if I do not return from one voyage Worked for almost 25 years, now want to live… live…. I want something that will make my life Chintafree after retirement… retirement….

Products of Life Insurance Life Insurance products are usually referred to as ‘plans’ of insurance. These plans have two basic elements, one is the “Death Cover” providing for the benefits being paid on the

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death of the insured person within a specified period. The other is the “Survival Benefit” providing for the benefit being paid on survival of a specified period. •

Plans of insurance that provide only death cover are called “Term Assurance” Plans.

•

Plans of insurance that provide only survival benefits are called “Pure Endowment” Plans.

Term Life Insurance Term Life Insurance provides protection for a specified period of time. A death benefit is paid to the beneficiary if the insured dies within a specified period of time while the policy is still in force.

Whole Life Insurance Whole Life insurance is a permanent life insurance and provides protection for life. As long as premiums are paid, a death benefit is paid to the beneficiary.

ULIPs A ULIP is a life insurance which provides a combination of Life Insurance protection and investment. Money can be invested in the following fund:- Equity Fund, Debt Fund, Money Market Fund (Liquid Fund) and Balance Fund.

Annuities Annuities are practically the same as pension. Pension provides periodical payments to the employees, who have retired. They are paid as long as the recipient is alive. Annuities are called the “reverse” of Life Insurance.

Solutions for Individuals - RGI

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Taking time out from your daily schedule to plan your future is a necessary task. You could do with some help, but who can help you? Reliance Life Insurance is here with Solutions for Individuals, a series of plans that will help you make wise investments, protect your family, secure your child’s future and even chalk out a plan for your retirement.

•

Protection Plans 28

Protect your family even when you’re not around by investing in Reliance Protection Plans. Choose a limited period plan or a lifetime protection plan depending on your needs. The latest Protection Plans are as below… 1. Reliance Term plan 2. Reliance Simple Term plan 3. Reliance Special Term plan 4. Reliance Credit Guardian plan 5. Reliance Special Credit Guardian plan 6. Reliance Endowment plan 7. Reliance Special Endowment plan 8. Reliance Connect 2 Life plan 9. Reliance Whole Life plan 10. Reliance Wealth + Health plan 11. Reliance Cash Flow plan

•

Savings & Investment Plans

Reliance Savings & Investment Plans help you to set aside some money to achieve specific goals in life, which means that you can enjoy life and provide for your family’s daily needs. The savings and investment Plans are as below… 1. Reliance Total Investment Plan Series I - Insurance 2. Reliance Wealth + Health plan 3. Reliance Automatic Investment plan 4. Reliance Money Guarantee plan 5. Reliance Cash Flow plan 6. Reliance Market Return plan 7. Reliance Endowment plan 8. Reliance Special Endowment plan 9. Reliance Whole Life plan 10. Reliance Golden Years Plan 11. Reliance Golden Years Plan Value

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12. Reliance Golden Years Plan Plus 13. Reliance Connect 2 Life plan

•

Retirement Plans

Invest today in Reliance Retirement Plans and save money to enjoy life even after retirement. You will never have to depend on another person or make any compromises to maintain your current lifestyle. The latest Retirement Plans are as below… 1. Reliance Total Investment Plan Series II – Pension 2. Reliance Golden Years Plan 3. Reliance Golden Years Plan Value 4. Reliance Golden Years Plan Plus 5. Reliance Wealth + Health plan 6. Reliance Automatic Investment Plan 7. Reliance Money Guarantee Plan

•

Child Plans

Save systematically and secure your child’s future needs by investing in Reliance Child Plans. You can always be there for your child when he or she needs you. The Childs plans are as below… 1. Reliance Child plan 2. Reliance Secure Child plan 3. Reliance Wealth + Health plan

Market Return Plan Under This plan the investment risk in the investment portfolio is borne by the policyholder.

key features

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•

Twin benefit of market linked return and insurance protection

•

A unit linked plan, different from traditional life insurance products with maximum maturity age of 80 years.

•

Option to create your own portfolio depending on your risk appetite.

•

Choose from four different investment funds

•

Flexibility to switch between funds

•

Option to pay regular as well as single premium & top- ups

•

Option to package your policy with accidental rider

•

Flexibility to increase the sum assured

•

Liquidity through partial withdrawals

How does this plan work The premium paid by the client net of premium allocation charges is invested in fund/funds of your choice and units are allocated depending on the price of units for the fund/funds. The fund value is the total value of units that you hold in the fund/funds. The mortality charges and policy administration charges are ducted through cancellation of units whereas the fund management charge is priced in the unit value.

Benefits Life cover Assured: in case of unfortunate loss of life, the beneficiary will get sum assured or fund value, whichever is higher. The client can choose the basic sum assured within the minimum and maximum levels mentioned below.

Minimum sum Assured: •

Regular premium: annualized premium for 5 years or annualized premium for half the policy term, whichever is higher.

•

Single premium: 125% of the single premium.

Maximum sum Assured No limit (50000 for age up to 12 years)

Maturity Benefits 31

On survival to maturity the fund value on maturity will be paid out.

Rider Benefits The Client can add the Accidental Death & Total and Permanent Disablement Benefit Rider (available only with the regular premium option). This benefits doubles the life coverage in case of accidental death or accidental total and permanent disablement at a very nominal additional cost. The maximum cover is Rs. 50,00,000 per life. In case of accidental death of the life assured during the policy term, the accident benefit sum assured will be paid immediately in a lump sum. In case of accidental total and permanent disablement, 1/10th of the accident benefit sum assured will be paid at the end of each year for ten years. If the

total and permanent

disablement has commenced, the accidental death benefit cover ceases. In case of maturity or on death of the life assured before payment of all installments of accidental total and permanent disablement benefits, the remaining unpaid installments of any will be paid in one lump sum along with death or maturity benefit. Accidental total and permanent disablement means disability caused by bodily injury, which causes permanent inability to perform any occupation or to engage in any activities for remuneration or profits. This disability should last for at least 6 months before being eligible for accidental total and permanent disablement benefits. Accidental total and permanent disablement includes loss of both arms or both legs or one arm and one leg or of both eyes. Loss of arms or legs means dismemberment by amputation of the entire hand or foot. Loss of eyes means entire and irrecoverable loss of sight.

What are the different fund options. We understand the value of your hard earned money and in our Endeavour to help you grow your wealth, we offer you 4 different tailor-made investment funds. You have the option to allocate your premium in these funds as you wish.

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They are: 1. Capital Secure Fund: The investment objective of this fund is to maintain the value of all contributions (net of charges) and all interest additions. This fund offers steady return for little risk. The risk profile of this fund is low. Investments would be 100% in bank deposits, government bonds and debt instruments that offer financial security. Further, allocation in Capital Secure Fund for a policy is subject to a maximum limit of 40% at any time.

2. Balanced Fund: The investment objective of this fund is to provide you with investment returns, which exceed the rate of inflation in the long term while maintaining a low probability of negative investment returns. Here, a major portion of your funds are invested in Fixed Securities while a small percentage is invested in the equity market, which is exposed to market movements. The risk profile of this fund is low to medium. Investments would be at least 80% in fixed interest securities and maximum 20% in equities.

3. Growth Fund: The investment objective of this fund is to provide you with investment returns, which exceed the rate of inflation in the long term while maintaining a moderate probability of negative investment returns. A greater portion of your funds are invested in fixed securities while a small percentage is invested in the equity market, which exposed to market movements. The risk profile of this fund is medium to high. Investment would be at least 60% in fixed interest securities and maximum 40% in equities.

4. Equity Fund:

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The investment objective of this fund is to provide policyholders with high exposure to equities and the possibility of investment returns, which generate a high real rate of return in the long term while recognizing that there is a significant probability of negative investment returns in the short term. This fund offers a totally equity based investment option. Your returns depend entirely upon the performance of the equity market. The risk profile of this fund is high. The higher risk of this portfolio means that expected returns would also be higher. Investment would not exceed 30% in bank deposits and may be up to 100% in equities.

Value of Units: The market value of assets plus/less expenses incurred In the purchase/sale of assets plus current assets plus Any accrued income net of fund management charges Less current liabilities less provision

Unit Value

= Total number of units on issue (before any new units are allocated/redeemed.)

Who can Buy the product

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Minimum age at entry

30 days

Maximum age at entry

65 years

Maximum age at maturity

80 years

What is the policy term Minimum policy term

5 years

Maximum policy term

40 years

Flexible premium payment modes: Choose from five premium payment modes. a) Annual – minimum premium is Rs. 10,000. b) Half – yearly – minimum premium is Rs. 5,000. c) Quarterly – minimum premium is Rs. 2,500. d) Monthly – minimum premium is Rs. 1,000. e) Single premium – minimum premium is Rs. 25,000.

Charges under the plan: 1. Premium allocation charge For regular premium policies: Term of the policy as below

Years

5-9

10 - 14

15+

First year Thereafter

10% 5%

15% 5%

20% 5%

(The premium allocation charge for single premium & top – ups is 2%.)

2. Policy Administration charges: Rs. 40 will be deducted from your unit account each month.

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3. Fund Management Charges: (The fund management charges will be deducted on a daily basis.) Unit Linked Funds

Annual Rate

Capital Secure Balanced Fund Growth Fund Equity Fund

1.50% 1.50% 1.75% 1.75%

Revision of charges: The fund management charges are subject to revision at any time, but hey will not exceed 2% p.a. for the capital secure fund and 2.5% p.a. for the other funds. Any changes made to the charges under this policy will be subject to IRDA approval.

4. Partial Withdrawal Charges: Rs. 100 per withdrawal will be deducted from your unit account.

5. Switching Charge: 1% of the amount switched, with a maximum of Rs. 1,000/- per switch.

6. Mortality Charges: The Mortality charges, based on your attained age, are determined using 1/12th of the charges are different.

7. Surrender Charge: This charge is levied on the unit fund at the time of surrender of the policy as under:

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Number of years premiums paid

Surrender charge as percentage of fund value

Less than 1 1 2 3 and more

100% 50% 20% NIL

8. Service Tax Charge This charge will be levied on mortality, accident & disability benefit charges. The level of this charge will be as per the rate of service tax on risk premium levied by the government from time to time the correct rate of service tax is 12.36% this charge shall be collected along with charges.

How safe is your investment •

The investments made in the unit funds are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of the fund and the factors influencing the capital market, and the insured is responsible for his/her decisions.

•

The unit price is a reflection of the financial and equity/debt market conditions and can increase or decrease at any time due to this.

•

Benefits payable under the policy will be made according o the tax laws and other regulations in force at that time.

•

There are no guarantees for any fund of any kind under this policy. The benefit payable on maturity will be equal to the value of your units.

•

The name in the funds in n way indicates the returns derived from them.

•

Please note that Reliance life Insurance company limited is only the name of the insurance company and Reliance market return plan is only the name of the unit linked life insurance policy and does not in anyway indicate the quality of the policy or its future prospects or returns

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Free Look Period. In case the policyholder disagrees with any of the terms and conditions of the policy, he may return the policy to the company within 15 days of its receipt for cancellation, stating his/her objections in which case the company will refund an amount equal to the non allocated premium plus the charges levied by cancellation of units plus fund value as on the date of receipt of the request in writing for cancellation, less the proportionate premium for the period the company has been on risk and the expenses incurred by the company medical examination and stamp duty charges. If the risk acceptance date falls within cooling off period, then on cancellation RLIC shall pay fund value less of charges.

Overview of Demat Account.

38

In India, a Demat account, the abbreviation for dematerialised account, is a type of banking account which dematerializes paper-based physical stock shares. The dematerialised account is used to avoid holding physical shares: the shares are bought and sold through a stock broker. This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should possess a Permanent Account Number (PAN), and the deadline for submission of PAN details to the depository lapsed on January 2007.

Procedure 1. Fill demat request form (DRF) (obtained from a depository participant or DP with whom your depository account is opened). 2. Deface the share certificate(s) you want to dematerialise by writing across Surrendered for dematerialisation. 3. Submit the DRF & share certificate(s) to DP. DP would forward them to the issuer / their R&T Agent . 4. After dematerialisation, your depository account with your DP, would be credited with the dematerialised securities.

Reliance Money Demat Account Services Reliance Money – Transacting and investing simplified. Get ready to change the way you transact and invest in financial products and services.

39

Whether you wish to transact in equity, equity & commodity derivatives, IPO’s offshore investments or prefer to invest in mutual funds, life & general insurance products or avail money transfer and money changing services, you can do it all through reliance money. Simply open a reliance money account and enjoy the convenience of handling all your key financial transactions through this one window.

Benefits of having a reliance money account •

It’s cost effective

You pay comparatively lower transaction fees. As an introductory offer, we invite you to pay a flat fee of just Rs. 500/- and 750/- and transact through reliance money. This fee is valid for two months or a specified transaction value See the table below for details.

• Its offers single – window access Through reliance money’s associates, you can transact in equity, equity and commodities derivatives, offshore investments mutual funds, IPO’s life insurance, general insurance, money transfer, money changing and credit cards, amongst others.

• Its convenient You can access reliance money’s services through •

The internet

•

Transaction kiosks 40

•

The phone (call & transact)

•

Our all – India network of associates

On an assisted trade (through the call centre or our network of associates) a charge of Rs 12 per executed trade will be applicable.

• Its Safe Your account is safeguarded with a unique security number that changes every 32 seconds. This number works as a dynamics password to keep your account extra safe.

• Its provides you a demat account You get your own demat account with reliance capital at an annual fee of just Rs. 50/-. • Its provides you a 3-in-1 facility. You can access your banking, trading and demat account through a single window and transfer funds across accounts seamlessly.

• It provide you value- added services At www.reliancemoney.com, you get •

Reliable research, including views of external experts with an enviable track record

•

Live news updates from Reuters and Dow Jones

•

CEO’s / expert views on the economy and financial markets

41

•

Tools that help you plan your investments, tax, retirement, etc. in the personal finance section

•

Risk Analyser for analysis of your risk profile

•

Asset allocators to build an appropriate investment portfolio

•

Innovative use of technology for facilitating convenient trading/investments – kiosks (similar to ATM’s)

Reliance Money Provide the kiosks (similar to ATM’s) Facilities, to their customer through which the customers can trade on available kiosks at the particular Branch of Reliance Money. The company are going to open these kiosks in the market as the ATM’s of the Banks. Reliance Money provides 3 different trading platforms for equity trading: Insta Trade

42

Fast Trade Easy trade

The benefits • • • •

A safe and convenient way to hold securities; Immediate transfer of securities; No stamp duty on transfer of securities; Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.;

• • • • •

Reduction in paperwork involved in transfer of securities; Reduction in transaction cost; No odd lot problem, even one share can be sold; Nomination facility; Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately;

•

Transmission of securities is done by DP eliminating correspondence with companies;

•

Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc.

•

Holding investments in equity and debt instruments in a single account.

Required Documents The extent of documentation required to open a demat account may vary according to your relationship with the institution. If you plan to open a demat account with a bank, a savings, current and, or other account for which the holder have been issued a check book, such holder has an edge over the non-account holder. In fact, banks usually offer additional incentives to customers who open a demat account with them. Along with the 43

application

form,

your

photographs

(with

co-applicants)

and

proof

of

identity/residence/date of birth have to be submitted. The DPs also ask for a DP-client agreement to be executed on non-judicial stamp paper. Here is a broad list: •

A canceled check, preferably MICR

•

Proof of Identification

•

Proof of Address

•

Proof of Pan card (mandatory)

•

Recent photographs, one and, or more

For proof of identification and, or address self-attested facsimile copies of PAN card, Voter’s ID, Passport, Ration card, Driver’s license, Photo credit card, Employee ID card, Bank attestation, latest IT returns and, or latest Electricity/Landline phone bill are sufficient. While they only ask for photocopies of the documents, they will need the originals for verification.

Points To Remember 1. Only securities admitted by NSDL can be dematerialised. The list is available with your DP. 2. Only securities registered in the name of the account holder can be dematerialised. 3. Dematerialisation is normally completed within 15 days after the share certificates have reached the issuer/ their R&T Agent. Thus it may take you a month from the date you hand over shares, to receive demat credit. 4. Dematerialisation would be done only when the issuer / their R&T Agent is satisfied of genuineness of securities & ownership status. 5. All the joint holders should sign the DRF. 6. The pattern of holding in the DRF should match the pattern of holding on the share certificate & the pattern in which account is opened. 7. Demat requests with name(s) not matching exactly with the name(s) appearing on the certificates merely on account of initials not being spelt out fully or put after

44

or prior to the surname, would be processed, provided the signature(s) of the client(s) on the DRF tallies with the specimen signature(s) available with the issuer/ their R & T agent. 8. If the signature in the DRF does not match with the signature available with the issuer/ their R & T agent, the issuer/ their R & T agent may at the time of demat confirmation, ask for additional documentation (like bank attestation/ notarisation, etc.) to prove that the certificate belongs to the person who forwarded the DRF. 9. In case there is any problem in processing the DRF, contact your DP and if he cannot resolve the problem you may contact NSDL.

The Concept of Mutual Fund A mutual fund is a common pool of money into which investors place their contributions that are to be invested in accordance with a stated objective. The ownership of the fund is thus ‘joint’ and ‘mutual’; the fund belongs to all investors 45

Reliance Mutual Fund Reliance Mutual Fund (RMF), a part of the Reliance - Anil Dhirubhai Ambani Group, is India's leading Mutual Fund, with average Assets Under Management of Rs. 90,813 crores for the month of June 2008, and an investor base of over 6.7 million. Reliance Mutual Fund offers investors a well rounded portfolio of products to meet varying investor requirements. Reliance Mutual Fund has a presence in 300 cities across the country and constantly endeavors to launch innovative products and customer service initiatives to increase value to investors. Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Ltd., a wholly owned subsidiary of Reliance Capital Ltd.

Types of Mutual Funds on the Basis of Risk Vs Returns

46

Sector Funds Diversified Equity Funds Balanced Funds

R e t u r n s

MIPs Gilt Funds Income Funds Floaters Money Market Funds

Risk

Frequently used term in Mutual Funds •

Net Asset Value (NAV)

Net Asset Value is the market value of the assets of the scheme minus its liabilities. The per unit NAV is the net asset value of the scheme divided by the number of units outstanding on the Valuation Date.

• Sale Price Is the price you pay when you invest in a scheme. Also called Offer Price. It may include a sales load.

• Repurchase Price Is the price at which a close-ended scheme repurchases its units and it may include a back-end load. This is also called Bid Price

47

• Redemption Price Is the price at which open-ended schemes repurchase their units and close-ended schemes redeem their units on maturity. Such prices are NAV related.

• Sales Load Is a charge collected by a scheme when it sells the units. Also called, ‘Front-end’ load. Schemes that do not charge a load are called ‘No Load’ schemes

• Repurchase or ‘Back-end’ Load Is a charge collected by a scheme when it buys back the units from the unit holders.

Types of Reliance Mutual Funds 1. Reliance Growth Fund 2. Reliance Vision Fund 3. Reliance Banking Fund 4. Reliance Diversified Power Sector Fund 5. Reliance Pharma Fund 6. Reliance Media & Entertainment Fund 7. Reliance NRI Equity Fund 8. Reliance Equity opportunities Fund 9. Reliance Index Fund 10. Reliance Tax Saver (ELSS) Fund 11. Reliance Equity Fund 12. Reliance Long Term Equity Fund 13. Reliance Regular Saving Fund

The key term in mutual funds

48

Dividend Policy: Dividend will be distributed from the available distributable surplus after the deduction of the divided distribution surplus after the deduction of the dividend distribution tax and the applicable surcharge, if any. The mutual fund is not guaranteeing or assuring any dividend. Pease read the offer document for details. Further payment of all the dividends shall be in compliance with SEBI circular No. SEBI/IMD/CIR No. 1/64057/06 dated 4/4/06.

Applicable NAV : Sale of units by reliance mutual fund: in respect of valid applications received up to 3 p.m. by the mutual fund alongwith a local cheque or a demand draft payable at par at the place where the application is received, the closing NAV of the day on which application is received shall be applicable.

Repurchase including Switch-out: in respect of valid applications received upto 3 pm by the mutual fund, same day’s closing NAV shall be applicable. In respect of valid applications received after 3 p.m. by the mutual fund, the closing NAV of the next business day shall be applicable.

Daily net Asset Value(NAV) publication: the NAV will be declared on all working days and will be published in 2 newspaper. NAV can also be viewed on www.reliancemutualfund.com and www.amfiindia.com .

Tax Benefits to the mutual fund:

Reliance Mutual Fund is a Mutual fund

registered with the securities & exchange board of India and hence the entire income of the mutual fund will be exempt from income tax in accordance with the provisions of section 10(23D) of the income tax act, 1961. The mutual fund will receive all income without any deduction of tax at source under the provisions of section 196(iv) of the act. An exemption has been granted under the finance (No.2) act, 2004 to open ended equity oriented mutual funds from paying distribution tax on income distributed without any time limit, effective from 1 April 2004.

Securities transaction Tax: Name of Transaction

Payable by

Rate of Tax

Purchase and sale of equity Both purchaser as well as 0.125% shares or units of equity seller oriented mutual funds on a

49

recognised stock exchange on delivery basis Sale on stock exchange of seller equity shares or units of equity oriented mutual funds on non- delivery basis sale of derivatives Seller reorganized stock exchange Sale of units of equity Seller oriented mutual funds to the mutual fund There are two types of investment in Mutual Funds.

0.025%

0.017% 0.25%

•

Lump Sum

•

Systematic Investment Plan(SIP)

•

Lump sum: In Lump sum the investment is only one times that

.

is of Rs. 5,000. and if the investment is monthly then the investment will be 6,000/-.

•

Systematic Investment Plan(SIP) :

We have already mentioned about SIPs in brief in the previous pages but now going into details, we will see how the power of compounding could benefit us. In such case, every small amounts invested regularly can grow substantially. SIP gives a clear picture of how an early and regular investment can help the investor in wealth creation. Due to its unlimited advantages SIP could be redefined as “a methodology of fund investing regularly to benefit regularly from the stock market volatility. In the later sections we will see how returns generated from some of the SIPs have outperformed their benchmark. But before moving on to that lets have a look at some of the top performing SIPs and their return for 1 year: Amoun t NAV

Scheme Reliance diversified power sector retail 1000 Reliance regular savings equity

1000

50

NAV Date 30/5/20 62.74 08

Total Amount

22.20 30/5/20 8 08

13584.94 4

14524.07

principal

global

opportunities fund 1000 DWS investment opportunities fund

1000

BOB growth fund

1000

30/5/20 18.86 08

14247.72 8

30/5/20 35.31 08 30/5/20 42.14 08

13791.15 7 13769.15 2

In the above chart, we can see how if we start investing Rs.1000 per month then what return we’ll get for the total investment of Rs. 12000. There is reliance diversified power sector retail giving the maximum returns of Rs. 2524.07 per year which comes to 21% roughly. Next we can see if anybody would have undertaken the SIP in Principal would have got returns of app. 18%. We can see reliance regular savings equity, DWS investment opportunities and BOB growth fund giving returns of 13.20%, 14.92%, and 14.74% respectively which is greater than any other monthly investment options. Thus we can easily make out how SIP is beneficial for us. Its hassle free, it forces the investors to save and get them into the habit of saving. Also paying a small amount of Rs. 1000 is easy and convenient for them, thus putting no pressure on their pockets. Now we will analyze some of the equity fund SIP s of Birla Sunlife with BSE 200 and bank fixed deposits In a tabular format as well as graphical.

Exposure of Mutual Funds Companies in India The concept of mutual funds in India dates back to the year 1963. The era between 1963 and 1987 marked the existence of only one mutual fund company in India with Rs. 67bn assets under management (AUM), by the end of its monopoly era, the Unit Trust of India (UTI). By the end of the 80s decade, few other mutual fund companies in India took their position in mutual fund market. The new entries of mutual fund companies in India were SBI Mutual Fund, Canbank Mutual Fund, Punjab National Bank Mutual Fund, Indian Bank Mutual Fund, Bank of India Mutual Fund. The succeeding decade showed a new horizon in Indian mutual fund industry. By the end of 1993, the total AUM of the industry was Rs. 470.04 bn. The private sector funds

51

started penetrating the fund families. In the same year the first Mutual Fund Regulations came into existence with re-registering all mutual funds except UTI. The regulations were further given a revised shape in 1996. Kothari Pioneer was the first private sector mutual fund company in India which has now merged with Franklin Templeton. Just after ten years with private sector players penetration, the total assets rose up to Rs. 1218.05 bn. Today there are 33 mutual fund companies in India in which some are as below. •

ABN AMRO Mutual Funds

•

Birla Sun life mutual Funds

•

Bank of Baroda Mutual Fund

•

HDFC Mutual Fund

•

HSBC Mutual Fund

•

ING Vysya Mutual Fund

•

Prudential ICICI Mutual Fund

•

Sahara Mutual Fund

•

State Bank of India Mutual Fund

•

Tata Mutual Fund (TMF)

•

Kotak Mahindra Asset Management Company (KMAMC)

•

UTI Asset Management Company Private Limited

•

Reliance Mutual Fund (RMF)

•

Standard Chartered Mutual Fund

•

Escorts Mutual Fund

•

Alliance Capital Mutual Fund

•

Benchmark Mutual Fund

•

Canbank Mutual Fund

•

Chola Mutual Fund

•

LIC Mutual Fund

•

GIC Mutual Fund 52

Working of a Mutual Fund

Terms and conditions •

This facility offered only to the investors having bank accounts in selected cities which are specific in the form of the SIP.

•

Submit the following document at least 21 working days before the first SIP date for ECS( Electronic clearing Service).

•

The first SIP cheque should be issued from the same bank account which is to be debited under ECS for subsequent installments.

•

The bank account provided for ECS(Debit) should participate in local MICR clearing.

•

SIP auto debit facility is available only on specific dates of the month i.e. 2nd or 10th or 18th or 28th .

•

The investor agrees to abide by the terms and conditions of ECS facility of Reserve bank of India.

•

An investor can opt for monthly or quarterly frequency.

•

Only one SIP per month or per quarter is permitted per folio/account.

53

•

Minimum investment amount – monthly SIP option – 60 installments of Rs. 100/each or 12 installment or Rs. 500/- each or 6 installments of Rs. 1000/- each and in multiples of Re.1/- thereafter.

•

The gap between the 1st cheque/ installment & the 2nd cheque / installment should be at least 21working days. However subsequent cheques should have a gap of at least a month or a quarter depending upon the frequency chosen.

Advantages of Mutual Funds •

Diversification: The best mutual funds design their portfolios so individual investments will react differently to the same economic conditions. For example, economic conditions like a rise in interest rates may cause certain securities in a diversified portfolio to decrease in value. Other securities in the portfolio will respond to the same economic conditions by increasing in value. When a portfolio is balanced in this way, the value of the overall portfolio should gradually increase over time, even if some securities lose value.

•

Professional Management: Most mutual funds pay topflight professionals to manage their investments. These managers decide what securities the fund will buy and sell.

•

Regulatory oversight: Mutual funds are subject to many government regulations that protect investors from fraud.

•

Liquidity: It's easy to get your money out of a mutual fund. Write a check, make a call, and you've got the cash.

•

Convenience: You can usually buy mutual fund shares by mail, phone, or over the Internet.

•

Low cost: Mutual fund expenses are often no more than 1.5 percent of your investment. Expenses for Index Funds are less than that, because index funds are

54

not actively managed. Instead, they automatically buy stock in companies that are listed on a specific index •

Transparency

•

Flexibility

•

Choice of schemes

•

Tax benefits

•

Well regulated

Drawbacks of Mutual Funds Mutual funds have their drawbacks and may not be for everyone: •

No Guarantees: No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money.

•

Fees and commissions: All funds charge administrative fees to cover their dayto-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund.

•

Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made.

•

Management risk: When you invest in a mutual fund, you depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the manager

55

does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers

56

Reliance General Insurance, a part of the Reliance - Anil Dhirubhai Ambani Group and a Subsidiary of Reliance Capital, is one of the first non-life companies to get the license from the IRDA. Reliance General Insurance is India's fastest growing general insurance company and the top 3 private sector insurers. Reliance General Insurance has 200 branches across 171 cities and over 20,000 intermediaries. Reliance General Insurance offers an exhaustive range of insurance products that covers most risks including Auto, Health, Property, Marine, Casualty and Liability. Insurance Indemnifies Assets & Income. Every Asset has a value and generates Income to its Owner. There is a normally expected Life-time for the Asset during which time it is expected to perform. If the Asset gets lost earlier, being destroyed or made Non-functional through an Accident or other unfortunate event the Owner is Prejudiced. Insurance helps to reduce CONSEQUENCES of such Adverse Circumstances which are called Risks •

Insurance is the SCIENCE OF SPREADING OF THE RISK. It is the system of spreading the losses of an Individual over a group of Individuals

•

Insurance is a Method of sharing of financial losses of a FEW from a COMMON FUND formed out of Contribution of the MANY who are equally exposed to the same loss

•

What is UNCERTAIN for an Individual becomes a CERTAINTY for a Group. This is the basis of All Insurance Operations. Thus INSURANCE CONVERTS UNCERTAINTY TO CERTAINTY

RGICL PRODUCTS HEALTH •

Individual Mediclaim Insurance Policy

•

Group Mediclaim Insurance Policy

•

Oversees Travel Care Insurance Policy 57

•

Reliance Health Wise Policy (inclusive of PED & Critical Illness) – NEW - a specialized retail product

PERSONAL ACCIDENT •

Personal Accident Insurance (Individuals) Policy

•

Group Personal Accident Insurance

•

Standard Fire and Special Perils Policy

•

Industrial All Risks Insurance Policy

•

Consequential Loss (Fire) Insurance Policy

FIRE

ENGINEERING •

Erection All Risks/Storage-cum-Erection Insurance Policy

•

Contractor’s All Risks Insurance Policy

•

Contractor’s Plant and Machinery Policy

•

Machinery Breakdown Insurance Policy

•

Machinery Loss of Profits Insurance Policy

•

Boiler & Pressure Plant Insurance Policy

•

Electronic Equipment Insurance Policy

MARINE •

Marine Cargo Insurance Policy

•

NEW - Marine Turnover based Policy

•

NEW - Multi Transit Policy

58

MOTOR •

Private Car Comprehensive Insurance Policy

LIABILITY •

Directors and Officers Liability Insurance Policy

•

Public Liability (Act) Insurance Policy

•

Public Liability Insurance Policy

•

Product Liability Insurance Policy

•

Professional Indemnity Insurance Policy

•

Workmen’s Compensation Insurance Policy

PACKAGED POLICIES FOR CORPORATES •

Industry Care Insurance Policy

•

Commercial Care Insurance Policy

•

Office Package Insurance Policy

•

Fidelity Guarantee Insurance Policy

•

Burglary and Housebreaking Policy

•

Money Insurance Policy

•

Householder’s Package Insurance Policy

•

Shopkeeper’s Package Insurance Policy

Reliance Shopkeeper’s package Policy Key Advantage •

Comprehensive coverage against various perils spread across different sections of the policy.

59

•

The policy offers the flexibility to customize the policy by selecting appropriate covers.

•

The coverage is available at reasonably priced premiums.

•

Insured has the option of selecting covecage either on the basis of market value or the reinstatement value.

•

Discounts ranging from 5% to 20% for customers opting for four or more sections, for favorable claims experience and on renewal of the policy.

Scope of the cover Coverage under this policy is spread across 11 optional sections, enabling you to choose from them and customize the policy

Section 1A. – fire and allied perils for building Section 2B. – fire and allied perils for contents The physical structure of your shop (under section 1A) and the contents therein (under section 1B) can be covered against fire and allied perils. These comprise•

Fire

•

Lightning

•

Explosion / implosion

•

Aircraft Damage

•

Riot, Strike and Malicious Damage

•

Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood, and Inundation

•

Impact Damage

•

Subsidence and landslide including Rockslide demolition, construction, structural alterations or repair of any property or ground works or excavations

•

Bursting and / or overflowing of water tanks, apparatus and pipes.

•

Missile testing operations

•

Leakage from automatic sprinkler installations

•

Bush fire

•

Terrorism cover (optional)

60

Policy exclusions At reliance general insurance, we would like our policy to be as transparent as possible. To ensure that you do not face any unpleasant surprises when you make a claim, we would like you to know some of the major exclusions under the policy. •

Loss or damage due to war and nuclear perils

•

Damage to property due to pollution and contamination

•

Loss or damage due to wear and tear, gradual deterioration or slowly developing flaws

•

Consequential loss of any kind

•

Willful act or gross negligence on the part of the insured

61

Markets In tune with the global stock markets that began to recover from the second half of 2003; Indian stock markets too witnessed rapid growth. India’s two leading indices, the most popular BSE Sensex, and the one most used by the markets the National Stock Exchanges’ S&P CNX Nifty rose to record levels. Both primary and secondary market activity experienced sharp surge. Much progress was made in further strengthening and streamlining risk management, market regulation and supervision. A few aspects of the major developments in the India’s stock markets are described below. And the insurance sector is also play an important role in the growth of the financial market.

Market Structure Indian securities market is fairly large as compared to several other emerging markets. There are 22 stock exchanges in the country, though the entire liquidity is shared between the country’s two national level exchanges namely, the National Stock Exchange of India and the Bombay Stock Exchange Ltd. The regional stock exchanges are in pursuit of business models that make them viable and vibrant. Meanwhile, these exchanges have become members of the national level exchanges through formation of subsidiaries whose business is showing continuous growth and progress. The number of brokers in various stock exchanges rose from 6,711 in 1994-95 to 9,335 in FY06. The number of brokers in all the exchanges together peaked to 10,213 in the year FY01 but gradually declined thereafter when the regional stock exchanges began to lose business in the light of wide ranging market structure reforms introduced since then.

62

In FY01, when the markets were in upswing, several regional stock exchanges were generating business owing to the availability of deferral products, such Badla and different settlement calendars prevailing at that time in these exchanges. For instance in FY01, the Delhi Stock Exchange registered cash market turnover of Rs 838.71 bn; Uttar Pradesh Stock Exchange, Rs 247.47 bn, Ludhiana Stock Exchange Rs 97.32 bn, Pune Stock Exchange Rs 61.71 bn as against Rs 13,395.11 bn of the turnover at the National Stock Exchange and Rs 10,000.32 bn turnover at the Bombay Stock Exchange. With the abolition of the deferral products and introduction of uniform T+2 settlement cycle, the liquidity in these exchanges flowed to the national level system consisting of NSE and BSE.

Major Player in the Insurance Sector There are many reputed companies in the market which provide the Insurance for living being and non living beings. The companies in life Insurance are as follows.

Life Insurer in Public Sector •

Life Insurance Corporation of India

Life Insurer in Private Sector •

Reliance life Insurance Company Limited

•

ICICI Prudential Life Insurance

•

Bajaj Allianz Life Insurance

•

Tata AIG Life Insurance corporation Limited

•

HDFC Standard Life Insurance

•

Birla Sun Life Insurance

•

SBI Life Insurance

•

Kotac Mahindra old Mutual Life Insurance

•

Aviva Life Insurance

•

MetLife India Life Insurance

63

•

ING Vysya Life Insurance

•

Max New York Life Insurance

•

Shriram Life Insurance

•

Bharti AXA Life Insurance Co. Limited

•

IDBI Forties Life Insurance Co. Limited

•

Argon Religare Life Insurance Co. Limited

Major Broking house During the analysis of the market it has been found that there are a lot of the brokeing house in the market which are providing the online trading facility to the individuals or the group of the individuals.

• 5paisa.com You can now buy and sell shares on 5paisa.com with speeds comparable and at times better than NSE's NEAT Terminal. This speed and reliability comes only with perseverance of pioneer backed by huge investment in technology! You can now buy and sell shares on 5paisa.com with speeds comparable and at times better than NSE's NEAT Terminal. This speed and reliability comes only with perseverance of pioneer backed by huge investment in technology. •

Advani Share Brokers

Advani Share Broker, a reputed Bombay based on investment house, operates from India's financial hub, Dalal Street, since sixty years. It deals in equities, debt and derivatives on the Bombay Stock Exchange and the National Stock Exchange of India. •

AGROY Group of Companies

Agroy group of companies is a well established name in the field of capital markets and financial services. AGROY Finance & Investment Ltd. (AFIL) is the group's flagship company engaged in capital markets as a premier financial and stock broking house. The company was formed in July 1992. Since then it has enjoyed patronage of a large number of valued customers and business partners. •

Anand Rathi Securities Limited

64

Anand Rathi Securities Limited provides financial and advisory services including wealth management, investment banking, corporate advisory, brokerage & distribution of equities, commodities, mutual funds and insurance - all of which are supported by powerful research teams. •

India bulls

India bulls is India's leading retail financial services company with 70 locations spread across 62 cities. While our size and strong balance sheet allow us to provide you with varied products and services at very attractive prices, our over 450 Client Relationship Managers are dedicated to serving your unique needs. •

Religare Securities Ltd.

Religare Enterprises Limited (A Ranbaxy Promoter Group Company) through Religare Securities Limited, Religare Finvest Limited, Religare Commodities Limited and Religare Insurance Advisory Services Limited provides integrated financial solutions to its corporate, retail and wealth management clients. Provides various financial services which include Investment Banking, Corporate Finance, Portfolio Management Services, Equity & Commodity Broking, Insurance and Mutual Funds. •

Jaypee Capital Services Ltd.

Jaypee Capital Services Ltd. is a registered self-clearing member with National Stock Exchange and SEBI. It has the expertise and the experience to capitalize on daily stock movements and employ over 20 specialist traders certified by the NSE. •

ICICI Direct

Online share and mutual funds trading facility by the ICICI group. •

Arcade Share & Stock Brokers

Arcadia group began its modest journey in 1995 and now Arcadia proudly boasts about membership

to

NSE,BSE,

Depository

Participant

(CDSL),MCX,NCDEX

.The

philosophy of client servicing backed by all principal Indian Stock and Commodity exchange gives Arcadia edge over other players in the industry segment to offer value based services to its customers. •

Indianstockmarket.net

65

Indianstockmarket.net is an effort to educate Indian investor by providing useful stock news, stock market websites, informative articles, resources to various investment guides.

Major Developments in equity brokerage industry in India •

Corporate memberships

•

Wider product offerings

•

Greater reliance on research

•

Accessing equity capital markets

•

Foreign collaborations and joint ventures

•

Specialized services/niche broking

•

Online broking

•

Emerging challenges and outlook for the brokerage industry

•

Fragmentation

•

Global Opportunities

•

Competition from foreign firms

•

Investor Protection

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The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not investing. Mutual funds offer a lot of benefit which no other single option could offer. But most of the people are not even aware of what actually a mutual fund is? They only see it as just another investment option. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and time. The advisors may try to highlight some of the value added benefits of Mutual funds such as tax benefit, rupee cost averaging, and systematic transfer plan, rebalancing etc. these benefits are not offered by other options single-handedly. So these are enough to drive the investors towards mutual funds. Investors could also try to increase the spectrum of services offered. Now the most important reason for not availing the services of advisors was spotted was being expensive. The advisors should try to charge a nominal fee at the beginning. But if not possible then they could go for offering more services and benefits at the existing rate. They should also maintain their decency and follow the code of ethics so that the

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investors could trust upon them. Thus the advisors should try to attract more and more persons and turn them into investors and finally their clients.

By the help of Books •

Business Environment written By

“ Francis Cherunilam “ •

Marketing Management written BY

“ Phillip Kotlar”

By the Help of Manuals •

Reliance Money Report of 2007 & Internet.

By the help of Other Sources •

By the head’s and the consultant of the Reliance Money.

By the help of Websites 1. www. IRDAIndia.org. 68

2. www.Reliancemoney.com 3. www.insure2bsecure.com 4. www.google.com 5. www. Wikkipedia.com

With the globalize economy and immense competition among countries for faster development of their respective economies, the significance of Mutual Funds and Foreign investment has taken manifold. With a buoyant vibrant and experienced stock market, India today is looking ahead to surpass China in terms of foreign Investment and growth prospects. Stock exchange being the barometer of the economy plays a vital role in showcasing growth of an economy and luring investment. While studying the role of Mutual fund and FIIs in Stock Market, I discussed with a few persons who are into stock broking business. And the information they have provided shows that though the investment and participation of domestic investors are rising, still, they have not been able to prove themselves to be as influential as mutual funds and FIIs. Importance and the role of Mutual funds and FIIs play in the Indian stock market can be seen from the fact that the recent surge in Sensex and NIFTY is attributed to the active participation of FIIs in the Stock Market. Despite being aware of the Asian economic crisis where FIIs role was of a major concern, the importance of foreign capital in the development of economy can not be undermined in anyway.

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