MPBIM 1 INTERNSHIP REPORT ON BAJAJ ALLIANZ LIMITED Submitted in partial fulfillment of the requirements of the MBA Degree Course of Bangalore University Submitted By Annapurna.N.K Under the Guidance and Supervision Of Dr.N.S Viswanath M.P.BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan # 43, Race Course Road Bangalore-560001 2004 – 2006
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MPBIM 1
INTERNSHIP REPORT ON
BAJAJ ALLIANZ LIMITED
Submitted in partial fulfillment of the requirements of the MBA Degree Course of Bangalore University
Submitted By
Annapurna.N.K
Under the Guidance and Supervision Of
Dr.N.S Viswanath
M.P.BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan
Accidents are unpredictable, and so are the consequences. They may lead to a
disability - partial or total. This Benefit provides a financial cushion against such
misfortunes. You will get 50% of the Sum Assured in case of partial disability and 100%
in case of total disability. (Subject to a maximum of Rs. 25,00,000/- for partial and Rs.
50,00,000/- for total disability under all policies with Bajaj Allianz taken together).
Waiver of Premium Benefit
An accident may lead to permanent total disability, limiting one’s ability to earn.
Bajaj Allianz Waiver of Premium benefit is a helping hand when one needs it most. It
waives off all future premiums while keeping the valuable life insurance cover alive, thus
enabling you to live up to your commitments.
Critical Illness Benefit (CI)
Some illnesses are critical. They not only alter one’s life's pattern but also result
in a financial drain. Bajaj Allianz Critical Illness Benefit softens the impact on the family
by paying out the Critical Illness Benefit under the plan immediately, while other policy
MPBIM 26
benefits continue (excluding Hospital Cash Benefit). We cover 11 critical illnesses. You
have the flexibility of choosing Critical Illness cover up to the basic Sum Assured
selected by you (Minimum Rs.50, 000).
Hospital Cash Benefit (HC)
The worry of settling hospital bills (room charges) adds to the trauma of
hospitalization. Bajaj Allianz Hospital Cash Benefit reduces this financial burden and
helps recovery with peace of mind.
Flexibility in Coverage
At Bajaj Allianz, we believe in offering benefits and not just products. We realize
that you are unique and your needs for insurance vary with time. We therefore offer you
the flexibility of inclusion of coverage or exclusion of coverage at each policy
anniversary, subject to conditions relating to such inclusions and exclusion.
You have the flexibility to change your package and move to a package that
provides lower protection at each policy anniversary (premiums would be adjusted
accordingly). “Comprehensive Accident Protection” can be included and excluded at
each policy anniversary. Family Income Benefit, Critical Illness Benefit and Hospital
Cash Benefit can be taken at inception only. FIB, CI & HC can be reduced or excluded
subsequently at any policy anniversary. Once reduced or excluded, they cannot be
increased or included subsequently.
Increase in risk coverage
Every added responsibility in your life calls for increase in your risk cover. We
provide you the option to increase coverage upto 50% of the basic Sum Assured on each
of the following happy moments in life.
• Marriage
• The birth of first child
MPBIM 27
• The birth of second child
This additional coverage is not subject to underwriting. The option should be
exercised within 90 days of the occurrence of the said event.
2. SAVE CARE ECONOMY
As the breadwinner of the family you shoulder several responsibilities. Your
spouse's welfare, your children's education, buying a house or a car - you have a lot to
think about, everyday. Bajaj Allianz, believe that the security and growth of your hard
earned money should not add to these.
Which is why Bajaj Allianz has created the “Bajaj Allianz Save Care Economy -
Single Premium”-the 10-year Single Premium version of our popular product “Save Care
Economy”? It is an ideal plan for a one-time lump sum investment that provides for
savings with high risk-cover.
The "Bajaj Allianz Save Care Economy - SP", is a Single Premium investment
plan for 10 years that also participates in the profits of the company. The highlights of
this plan are:
Minimum Guaranteed Return up to 3.54% (depending on age at entry).
The Minimum Guaranteed Amount (Sum Assured) would grow further by way of
compounded annual bonuses.
A high risk-cover of up to 142% (depending on age at entry) of the sum invested
from the beginning of the policy term as a financial safety net to provide for
unpredictable adversities.
Eligible for Tax Benefits under Section 88 and Section 10 (10 D) of the Income
Tax Act.
At Maturity you will receive the Sum Assured (Minimum Guaranteed Amount)
along with the accrued bonuses.
MPBIM 28
Death Benefit: In case of death during the term of the plan, the nominee will be
paid the Sum Assured (Minimum Guaranteed Amount) plus accrued bonuses. In case of
death of a minor (below age 7), the death benefit will be the surrender value or Single
Premium whichever is higher.
3. INVESTGAIN
It takes only a moment to make promises and a lifetime to keep them. Keeping
promises made to your loved ones is not just a responsibility, but a commitment that you
have to live up to. When you promise to see your family through thick and thin you need
to make sure that you have planned for all the eventualities that may befall on them. You
need to be prepared that even if there ever is an instance that you are not there with them
you have saved enough to see them through their entire life. We understand this need,
which is why we have developed Bajaj Allianz’s InvestGain, the plan that helps you in
saying "My family, May you always be happy!”
Available as:
• Bajaj Allianz Investgain Economy: The basic package
• Bajaj Allianz Investgain Gold: With double protection
• Bajaj Allianz Investgain Diamond: With triple protection
• Bajaj Allianz Investgain Platinum: With quadruple protection All these
packages participate in the profits of the company by way of bonuses, and therefore,
grow with time
Family income benefit
You can select the unique Family Income Benefit from Bajaj Allianz that ensures
total financial protection for your loved ones. In case of death or accidental total
permanent disability, a guaranteed monthly income of 1% of the sum assured (12% per
annum) is paid till the end of the policy term or at least for a period of 10 years,
whichever is higher. Moreover, all future premiums are waived.
MPBIM 29
Popular Products: Endowment Assurance (Participating) and Money Back
(Participating). More than 80% of the life insurance business is from these products.
4. UNIT LINKED INSURANCE POLICY
The thumb rule for buying insurance is that your insurance needs are minimal in
your early earning years, increase with added responsibilities (Marriage, children, loans
etc.) and taper off by the time you retire. It is difficult to find a single insurance plan that
can take care of all your changing requirements in life – additional protection, more
money to invest, sudden requirement of cash or a steady post-retirement income.
With Bajaj Allianz UnitGain, you can invest in one life insurance plan that can
take care of all your changing requirements throughout your life. This plan has been
designed to provide you with maximum flexibility, so that you do not have to worry
about your changing needs.
Bajaj Allianz UnitGain offers the unique option of combining the protection of
life insurance with the attractive prospects of investing in securities. You can choose the
investment funds you want to invest your money, providing you with an opportunity to
have a direct stake in the performance of the financial markets. You also benefit from
attractive tax advantages and can protect your loved ones against unfortunate events.
• Unit Gain Plus : A Unit Linked Plan
Bajaj Allianz Unit Gain Plus offers the unique option of combining the
protection of life insurance with the attractive prospects of investing in
securities. Customers have the choice of 6 investment funds with flexible
investment management; they can change funds at any time. Customers also
benefit from attractive tax advantages and unmatched flexibility -to match
their changing needs. And the advantage of low fund management & fund
administration costs.
MPBIM 30
• Unit Gain Plus SP : A Single Premium Unit Linked Plan
This plan enables the customers to protect their loved ones, while making
their money grow faster with the advantage of low fund management & fund
administration costs. It provides the customers the option of allocating 98% of
the single premium to purchase units in any/all of the 6 funds available with
company
• Unit Gain : A Unit Linked Plan
This amazingly flexible unit linked life insurance plan provides the
customers the opportunity to participate in market linked returns while
enjoying the valuable benefits of life insurance
• Unit Gain SP : A Single Premium Unit Linked Plan
This plan enables the customers to protect their loved ones, while making
their money grow faster. It provides them the option of allocating 100% of the
Single Premium to purchase units in any/all of the 6 funds available with
company.
• Lifelong Gain Plan : Unit Linked Whole Life Plan
This is the perfect plan to take care of ongoing and future family expenses like
debts, expenses on children, living expenses, etc. It can also take care of unforeseen
expenses like accidents, illnesses, hospitalization, etc. and provides customers family
with a safety net. It provides whole life protection with only 10 or 15 years of
contributions. Guaranteed Survival Benefits @3% are available under this policy.
Guaranteed Survival Benefits that pays 3% of the Sum Assured every year after the
premium payments are over
SUITABILITY
MPBIM 31
This policy is a long-term market linked total protection plan. The plans offer
protections for life at the same time allows the policyholder to get market linked
returns. It is a single product combining the benefits of both an investment product and
insurance plan. This apart, the product offers a lot of flexibility.
DIFFERENT FUNDS
EQUITY INDEX
The investment objective of this fund is to provide capital appreciation
through investment in equities. The plan is expected to match the returns given
by NIFTY Index of the National Stock Exchange. This fund will invest at least
85% in equities and maximum 15% in debt and cash.
EQUITY PLUS FUND
The investment objective of this fund is to provide capital appreciation
through investment in selected equity stocks that have the potential for high
capital appreciation. The fund will invest at least 85% in equities and maximum
15% in debt and cash
DEBT PLUS FUND
The objective of this fund is to provide accumulation of income through
investment in high quality fixed income securities like G-securities and corporate
debt rates AA and above. This fund is invested fully in debt instrument and
money market instrument.
BALANCE PLUS FUND
This fund is a fund of funds. The objective of this fund is to provide a
balanced investment between long-term capital appreciation and current income
through investment in the units of our equity and debt funds. The balanced fund
will invest 30% to 50% in the equity index fund and 50% to 70% debt fund.
MPBIM 32
CASH PLUS FUND
The investment objective of this plan is to have a fund that guarantees
invested capital through investments in liquid money market and short term
instruments like commercial papers, certificate of deposits, money market mutual
funds, bank F.D’s etc. The price of unit in this fund is gu aranteed not to go down.
100% of this fund will be invested in money market instruments. The price of the
units in this fund is guaranteed never to go down.
FOCUSED SALES NETWORK
Bajaj Allianz Life Insurance Company
Banc assurance Group and Alternate Channel
Agency Channel
Branches
Satellite Satellite
Standard Chartered Bank
Syndicate Bank
Centurion Bank
Cosmos Bank
Jankalyan Sahakari Bank
Jijamata Sahakari Co-op Bank
Satellite
Group Employee Benefit
Corporate Agency
Franchisee
Brokers
MPBIM 33
The overall premium target is broken down as follows by distribution channel:
FP + SP ANNUAL(crores)
AGENCY 1,827
BANCASSURANCE 650
ALTERNATE CHANNELS 523
RENEWALS 500
TOTAL 3500
AGENCY CHANNEL:
ÖÖ��Currently the company has some 300 offices made up of 68 branches and
about 239 satellite offices.
ÖÖ��The company will continue with the same hub and spoke structure, but will
increase the number of branches to 100 and satellites to 300.
ÖÖ��The number of STMs a branch or a satellite can have will be between 2 and
8.
ÖÖ��Underwriting and processing of business will continue at the branch level.
ÖÖ��The branches will continue to support the bancassurance and alternate
channels for underwriting and processing of business, as well as offer the
office infrastructure for the other channels staff to operate from.
BANCASSURANCE:
The company has some 6 bank tie ups these will be managed by the bancassurance
team.following are the banks with which the company has tied up:
1. Syndicate bank.
2. Centurion bank.
3. Standard chartered bank.
4. indusland ind bank.
MPBIM 34
ALTERANATE CHANNELS:
The focus will be corporate agency, franchise, brokers, worksite marketing, NRI
business, HNI business, group business and rural
social business
ORGANISATION STRUCTURE OF SALES AGENCY
MPBIM 35
BANK-ASSURANCE/ALTERNATE CHANNEL
CEO
CFO
HOD SALES
ZONAL MANAGER
REGIONAL MANAGER
SENIOR BRANCH MANAGER
BRANCH MANAGER
ASSISTANT BRANCH MANAGER
SALES MANAGER
CONSULTANTS. / AGENTS
MPBIM 36
CEO
CFO
HOD SALES
AREA MANAGER
DEPUTY MANAGER
FINANCIAL SERVICE\PLANNING CONSULTANTS
MPBIM 37
FINANCIAL HIGHLIGHTS YEAR 2004-2005
Particulars 2004-05
Rs. Million
2003-04
Rs.
Million
2002-03
Rs. Million
2001-02
(11 Months)*
Rs. Million
Gross Written Premium 8,560.7 4,798 2,998 1,420
Net Written Premium 4,792.9 2,864 1,808 841
Net Earned Premium 3,709.2 2,306 1,541 98
Net Incurred Claims (2,263.3) (1,542) (1,072) (127)
Net Commissions 419.4 231 155 128
Management Expenses (1,455.9) (984) (689) (370)
Underwriting Results 409.4 11 (33) (271)
Income from Investments 388.8 285 207 143
Others 28.6 22 (3) (5)
Profit Before Tax 769.6 318 171 (133)
Provision for Tax (298.7) (101) (75) 37
Profit After Tax 470.9 217 96 (96)
Claim's Ratio 61% 67% 70% 130%
Commission Ratio -11% -10% -10% -130%
Management Expenses Ratio 40% 42% 43% 376%
Combined Ratio 90% 99% 102% 376%
Return on Equity 34% 20% 9% -9%
Shareholder's Equity 1,824.1 1,380 1,095 997
Assets Under Management 5835.5 3,486 2,709 1,688
Number of Employees 924 480 306 141
MPBIM 38
GROWTH OF BAJAJ ALLIANZ LIFE INSURANCE CO
Fiscal year No of policies sold in FY GWP in FY
2001-2002 (6months) 21376 Rs 7cr
2002-2003 115965 Rs69cr
2003-2004 186443 Rs221cr
2004-2005 288189 Rs1002cr
0
50000
100000
150000
200000
250000
300000
2001-2002(6months)
2003-2004
policies sold in Rs
MPBIM 39
0
200
400
600
800
1000
1200
2001-2002(6months)
2002-2003 2003-2004 2004-2005
GWP in cr
¾�Assets under management Rs936 cr
¾�Shareholder capital base of Rs267cr
¾�Product tailored to suit your needs
¾�Decentralized organization structure for faster response
¾�Wide reach to serve you better-a national wide network of 400 branches
¾�Specialized departments for banc assurance, corporate agency and group business
¾�Well networked customer care centers (CCCs) with state of art IT systems
¾�Highest standard of customer service and simplified claims process in the industry
¾�Website to provide all assistance and information on products and services, online
buying and online renewals.
¾�Toll-free number to answer all your queries, accessible from anywhere in the
country and a strong tele-marketing and direct marking team
¾�Swift and easy claim settlement process
LIFE TRACK OF BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD
Objectives Of The Company For The Year 2004-05:
• to be one of the top 3 private life insurers in terms of gross premium and achieve
a premium target of more than Rs 750 crs.
MPBIM 40
• To be one of the top 2 companies in terms of profitability.
• To be more customer focused and reduce complexity.
The Company’s Major Achievements In The Last Financial Year Are:
• Number 2 amongst the private insurers in terms of new business premium, up to
February 2005.
• Gross premium achieved over Rs 1000crs GWP
• 300 + offices, 2700 + STM’s and 45000 + ICs
• 190 MDRTs , 9COTs
• 6 bancassurance tieups
• intermediaries including franchisees and corporate agents over 400.
• A full basket of products approved.
The Company’s Objectives For The Year 2005-06
• To be one of the top 2 private life insurers in terms of premium and profitability
• Achieve a minimum premium target of Rs 3500 crs(with less than 30% single
premium)each office to look at growing the business from 2004-05levels by
350% to 400%
• Improve customer service at all levels.
• Conduct business in an ethical manner.
THE KEY INITIATIVES THE COMPANY PLANS TO TAKE IN THIS QUARTER
INCLUDE THE FOLLOWING:
¬¬��Increase branch numbers to 100 and satellite offices to 300.
¬¬��Increase STM strength to3500 and IC strength to 50000
¬¬��Products for filing and approval women’s plan, health, tactful and revised ULIP
¬¬��Metro city strategy- increase number of branches in metro cities.
¬¬��Target 5 banks/coop banks for tie ups.
MPBIM 41
¬¬��Increase franchisee and corporate agents tie up.
¬¬��Group and broker team to be strengthened.
¬¬��Tactful team to be setup.
¬¬��NRI and HNI teams to be set up to focus on these areas.
¬¬��Online system to incorporate renewals, switches and withdrawals.
¬¬��Finalization of accounts for 2004-2005
¬¬��Recruitment of training head and trainers for branches
MPBIM 42
THE VARIOUS RESPONSIBILITIES AND THE WORK CARRIED OUT IN THE
BANGALORE BRANCH OFFICE
1. Bangalore is the area office.
2. There are different channels namely bancassurance, retail banking, agents and
agency managers headed by respective managers.
3. Primary responsibility of all the channels is to meet the targets set by the head
office.
4. Policy logins are done here.
5. Underwriting and medical checkups are done here.
6. After the preliminary verification policies are sent to head office for issuance.
7. Training is also held for the newly appointed employees.
8. Certificate for selling insurance is given once employees clear the IRDA exam.
MPBIM 43
MICROSCOPIC STUDY
MPBIM 44
PROJECT TITLE:
“A COMPARATIVE STUDY OF INSURANCE PRODUCTS OF BAJAJ
ALLIANZ LIFE INSURANCE COMPANY WITH COMPITITORS”
PRODUCTS FOR COMPARISON
• UNIT LINKED PLAN
• CHILDREN PLAN
• ENDOWMENT PLAN
COMPANIES FOR THE COMPARISON:
MPBIM 45
• BAJAJ ALLIANZ LIFE INSURANCE COMPANY
• ICICI PRUDENTIAL
• LIFE INSURANCE CORPORATION (LIC)
UNIT LINKED PLANS:
Most insurers in the year 2004 have started offering at least a few unit-linked plans. 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, et cetera) 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 opt for a unit-linked
endowment policy, you can choose to invest your premiums in debt, balanced or equity
plans.
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
MPBIM 46
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. However, should the buzz die down, investors could be left
stung.
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.
Particulars/
Name Of The
Company
ICICI Prudential Bajaj Allianz Life
Insurance Co,Ltd
LIC
Name of the
policy
LIFE TIME 11 UNIT GAIN
PLUS
BIMA PLUS
Min age of
entry
0 0 12
Max age of
entry
60 60 55
Min premium
yearly
18,000 15,000
MPBIM 47
yearly
Term Choice rests with the
customer with a min
premium payment for 10
yrs
Choice rests with
the customer with
a min premium
payment for 3 yrs
10yrs
Sum assured Min SA is Rs 1,00,000.
Max SA is Rs 50,00,000.
Min SA is 5 times
of the premium.
Max SA is as per
the age ie 125
times of the
premium . SA can
be increased or
decreased.
Maximum up to
2lakhs
Maturity
benefit
Any time after 4th yrs
contribution 100% of the
surrender value is
avaliable
Anytime after
payment of 3 full
yrs premiums,
can withdraw
100% of the fund
value or the SA
whichever is
higher.
Fund value of
the units along
with maturity
bonus at 5% of
the SA
Death benefit Higher of SA or value of
units. The value of units
will be treated as the
death benefit if the life
assured is less than 7 yrs
of age or more than 70 yrs
of age.
Higher of SA or
value of units.
The value of units
will be treated as
death benefit if
the life assured is
less than 7 years
of age and more
than 70 yrs of age.
Death benefit
during the first
6 months-30%
of the SA +value
of units, next
6months-60% of
the SA+ value of
units .death
after 1st year –
SA +value of
units. Death
during the 10th
yr-105%of the
SA+ value of
MPBIM 48
units. Death
during the 10th
yr-105%of the
SA+ value of
units
Withdrawal
benefit
Partial withdrawal is
available from the 3rd
year onwards. 100%
surrender value is
available after 4th yrs
contribution.
Partial or
complete
withdrawal is
available after 3rd
yr contribution.
Withdrawal
allowed after 1
year.
Flexibility to
increase or
decrease the
premium
The max decrease in
premiums can be upto
20%of the initial
premium chosen at the
time of the inception of
the policy. There is no
limit for increasing the
premium. This can be
done with or without
increase in the SA
Flexibility to raise
the premium is
available with or
without increase
in the SA. The SA
can be even
decreased. The
premiums cannot
be reduced.
Not avaliable
Investment
options
Maximiser, Balancer,
protector & preserver.
Equity Index,
Equity Plus, Debt
Plus, Balanced
Plus, Cash Plus,
Mid cap
Balanced,
Secured &
Risk
Increase/
decrease of
death benefit
Available. Any increase of
SA is subjected to
underwriting
SA can be
increased without
any medical test
every 3rd year
upto 4 times. The
increase would be
25% of the
original SA or Rs
1, 00,000 which
Not available
MPBIM 49
increase would be
25% of the
original SA or Rs
1, 00,000 which
ever is lower. SA
can be decreased
at any time.
Top ups Available. Minimum top
up amount is Rs 10000 in
multiples of 500.
Available.
Minimum top up
amount is 5000
Available
Switches 4 free switches per year,
with a minimum switch
amount being Rs
10000.all other switches
will be charged Rs100 per
switch.
3 free switches
every policy year.
Subsequent
switches would be
charged @1% of
the switch or Rs
100 whichever is
higher.
No free
switches. Cost
of switching 2%
of the fund
value.
Automatic
cover
continuance
Available after the 1st 3
yrs premiums have been
paid. Can be availed upto
a max of 2 yrs at a time in
the 1st 10 yr of the policy.
After the 10 yrs of the
policy the customer can
avail the cover
continuance without any
limits.
Premium holiday
or the cover
continues after
the payment 3 full
years premium.
the cover
continues till the
age of 70
Not avaliable
Charges
Initial charges
% Of premium allocation.
% Of premium
allocation.
MPBIM 50
18,000-35,999:
1st yr-81%; 2nd to5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
36,000-99,999:
1st yr-83%; 2nd to 5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
1,00,000-4,99,999:
1st yr-85%; 2nd to 5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
5,00,000++:
1st yr-88%; 2nd to 5th yr-
96%; 6th to 10th yr-98%;
11th yr onwards-99%.
allocation.
1st year -76%,
2nd year-97%,
3rd year-99%,
4th year
onwards100%
allocation is
made.
Allocation for top
ups is 100%
Admin charges Admin charges of Rs
60/month
Annual admin
charges of Rs 20
per
month,escalating
at 5%per annum
at the end of each
financial year.
This will be 1%
of the Fund per
annum, charged
on a weekly
basis
Riders Accident and disability
rider
Critical illness.
Major surgical assistance
benefit rider.
Accidental death
benefit.
Accidental
permanent
total/partial
disability.
Critical illness.
Inbuilt
accidental
benefit.
MPBIM 51
Hospital cash
benefit
Surrender value Acquires a surrender
value after 3 complete
years of the policy
provided 1st three
premium are been paid.
The surrender value is
100% of the investments.
Acquires a
surrender value
after 3 complete
years of the policy
provided 1st three
premium are been
paid. The
surrender value is
100% of the
investments.
Additional
allocation of
units
Declared as % of unit
value. Paid at the end of
4th, 8th &12th policy year.
The allocation of units
would be only made if the
annual contribution till
that date were made in
total.
<=75,000-5,00,000:0.15 %
75,001-5,00,000:0.2%
5,00,001-10,00,000:0.25%
10,00,001-50,00,000:0.30
50,00,001&above:0.35%
Not available Not available
MPBIM 52
ANALYSIS
From the above table it is very clear that the policies of the companies are
almost similar and it shows only minor differences between them making the product
more attractive from the customer’s viewpoint.
For Bajaj Allianz and ICICI the minimum age of entry is zero but in the case
of LIC ,policy starts only at the age of 18.hence LIC have to concentrate another
product for targeting the zero to 18 age group where as Bajaj and ICICI can cover
these groups with this policy. Naturally customer base for unit gain and unit gain plus
of Bajaj and life time of ICICI will be more compared to the LIC’s Bima plus.
The minimum premium when compared, ICICI has the highest premium, bajaj
allianz with Rs 15,ooo which cannot be affored by every one.
The minimum SA provided by all the companies is 5 times. But in case of
maximum sum assured, Bajaj Allianz is leading with 125 times coverage of annual
MPBIM 53
premium. On the other side ICICI is assuring only 50 times so we can predict that
Bajaj is giving more value to a person’s life. Bajaj allianz and ICICI pru provide
facility to increase or decrease the SA with or without increase in premium,but this
facility is not available in LIC.
The customer has to pay the premium for the minimum period of 3 yrs in unit
gain plus. Hence the premium holiday can be extended till there are enough funds in
the policy to cover the risk of the policyholder. Where as in lifetime 2, the
policyholder has to pay premium for the first 3 years and can take premium holiday up
2 years then he has to continue paying the premium till the 10th year of the policy.
Hence unit gain plus is more beneficial to the customer than life time2.because the fear
of lapsation of the policy to the customer is reduced to a greater extent.
Customers can switch their money between funds according the market
situations. In this case ICICI is giving a more switches than bajaj and LIC. The
switching charges of LIC is higher than other 2 companies with no free switches.
The following table shows the fund allocations of different policies in different
years.
From the above table we can predict that for a investor of less than 5 years unit
gain plus is much better. For a long-term investment it is better to invest in Unit gain
why because after the 3 rd year it will invest 100 % premium to the funds.
All the policies are providing tax benefits to its customers. It is a main
advantage to the investors by comparing with mutual funds and other investment
year Unit gain plus Unit gain Life time
1st year 76% 30% 80%
2nd year 97% 98% 92.5%
3rd year 97% 99% 96%
4th year 97% 100% 96%
5th year onwards 97% 100% 96%
MPBIM 54
options. The tax benefits are given according to the section 10(10) D of Income Tax
Act and section 88.
�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.
�7KH� DGYDQWDJH� RI� XQLW -linked plans is that they are simple, clear, and easy to
understand.
�7UDQVSDUHQF\�%HLQJ� WUDQVSDUHQW� WKH� SROLF\KROGHU� JHWV� WKH� HQWLUH� XSVLGH� RQ� WKH�performance of his fund.
�,QYHVWRUV�ZHOFRPH� WKHVH�SURGXFWV� DV� WKH\�SURYLGH�FDSLWDO�DSSUHFLDWLRQ�HYHQ�DV� WKH�yields on government securities have fallen below 6 per cent, which has made the
insurers slash payouts.
�7KH�LGHDO�WLPH�WR�EX\�D�XQLW -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.
�/LTXLGLW\��)OH[LELOLW\�
�The inherent strengths of ULIP make it adaptable to any and every other product
offering from the competition. The product is ‘all-in-one’ and can tackle every customer
need. The rider offerings namely Term, Critical Illness, Waiver of Premium and
Accidental Death & Dismemberment rider add to the attractiveness of the product, which
can provide various permutations and combinations.
�
MPBIM 55
CHILDREN PLANS:
Particulars\name of
the company
Bajaj Allianz Life Insurance, Co. Ltd ICICI Prudential LIC
Name of the
product
Child gain 21 or 24 Smart kid Komal jeevan
Minimum Term: 5 10 8
Maximum term 18 25 18
Minimum age of
entry(child)
0 0 0
Maximum age of
entry(child)
13 12 10
Max age of child at
maturity
21 or 24 22yrs to 25yrs 26
Minimum age of
entry(parent)
20 20yrs
MPBIM 56
entry(parent)
Maximum age of
entry(parent)
50 60yrs
Min sum assured Rs 1,00,000 Rs 1,00,000 1,00,000
Max sum assured Rs 50,00,000 Rs 30,00,000 25,00,000
Min premium
payment p.a
Rs 5,000 Rs 8,400 Policy will be issued only in
multiples of Rs.25, 000/-.
Death benefit 1. Future premium waived.
2. Family income benefit.
3. Guaranteed payouts.
4. Additional SA paid at the age of 21
or 24(as opted) of the child as “Start
Of Life Benefit” in case of Child gain
21 Plus and Child gain 24 Plus.
Sum assured +waiver of
premium+ periodic benefits
continue as it is
Sum Assured + Guaranteed
Additions + Loyalty Addition
if any
Survival benefit A guaranteed % of SA returned at
various ages and the vested bonus
along with the terminal bonus if any
will be given at the time of first cash
payout.
A guaranteed % of SA
returned at various terms and
the vested bonus if any will be
given at the time of first cash
payout.
SA + Guaranteed additions +
Loyalty Additions
Riders 1. Premium waiver benefit.
2. Family income benefit.
1. Accidental and disability
benefit.
2. Accident benefit rider.
3. Income benefit rider.
1. Premium waiver benefit.
2. Family benefit.
Additional benefits Start of life Rider(available in child
gain 21 plus & child gain 24 plus)
The policy holder can choose
between the 2 cash flow
payments or the periodic
benefits .
Cash flow intervals CHILD GAIN 21 & CHILD GAIN21
PLUS:
Policy anniversary following
completion of age
PERIODIC BENEFIT-1
T-7 : 20% OF SA
T-5 : 25% OF SA
T-2 : 25% OF SA
Age of the
child
MPBIM 57
completion of age
Policy
Term: 8-
21 years
Guarante
ed Payout
Policy Term:
8-21 years
Payout if
interest rates
are 7% at
the
beginning of
the payouts
18 20% +
Bonus*
20% +
Bonus*
19 25% 25%
20 25% 25%
21 35% 43%**
Total
payout
105% +
Bonus*
105% +
Bonus*
T : 30% OF SA+
Guaranteed additions @ 3.5%
compounded annually (for
first 4 years) + VB
PERIODIC BENEFIT-2
T-4 : 25% OF SA
T-3 : 20% OF SA
T-2 : 20% OF SA
T-1 : 20% OF SA
T : 20% OF SA+
Guaranteed additions @ 3.5%
compounded annually (for
first 4 years) + VB
child
18
20
22
24
26
CHILD GAIN 24 & CHILD GAIN 24
PLUS:
Policy anniversary following
completion of age
Policy
Term: 8-
21 years
Guarante
ed Payout
Policy
Term: 8-21
years
Payout if
interest
rates are
7% at the
beginning
of the
payouts
MPBIM 58
of the
payouts
18 20% +
Bonus*
25% +
Bonus*
20 25% 25%
22 25% 25%
24 35% 40%
Total
payout
105% +
Bonus*
115% +
Bonus*
Rebate Large sum assured discount:
Less than 2,00,000 : nil
2,00,000-4,99,999 :Re 1 per
1000
5,00,000 and above: Rs 2 per
1000
For yearly mode:2%of
premium
For half yearly mode:1%of
premium
Quarterly -No rebate
Sum Assured Rebates:
Sum Assured greater than or
equal to Rs.200000/- : Rs.1.00
per thousand Sum Assured
MPBIM 59
MPBIM 60
ANALYSIS
From the above comparison it can be found that,
1.The minimum payment term in Child gain is the least as
compared to that of Smart kid and Komal Jeevan. Because the
maximum age of entry in child gain is higher ie 13 yrs.
2. The minium SA for all the three products is the same but the
maximum SA is highest in case of child gain which inturn
benefits the customer the most.
3. The minimum premium is least in case of child gain, which
makes the policy more affordable by the customer.
4. All the products have almost same riders but the product Child
Gain plus has another benefit called “start of life” which means
the child is given another SA in case of death of the parents so
that the child can leads its life without many hurdles.
5. The total payout at maturity of the plan in case of Chid Gain and
smart kid is almost the same ie 105% but in case of Komal
Jeevan the payout at maturity is 100%
MPBIM 61
ENDOWMENT PLAN:
Particulars\name
of the company
Bajaj Allianz Life
Insurance, Co. Ltd
ICICI Prudential LIC
Name of the policy Invest gain Save N Protect Endowment
assurance plan(with
profits)
Minimum term 5 10 5
Maximum term 40 30 55
Min age at entry 0 0 12
Max age at entry 65 60 65
Max age at expiry 70 70 75
Min sum assured 50,000 50,000 20,000
Max sum assured No limit 1,00,00,000 No limit
Min premium 5,000 yearly 6,000yearly
Death benefit Sum assured +
bonuses
SA+GB+VG SA+VB
Maturity benefit Sum assured +
bonuses
SA+GB+VG SA+ VB+ final
additional bonus
Rider benefit • Family income
benefit.
• Comprehensive
accidental.
Protection.
• Accidental
death benefit.
• Accidental
permanent
total/ partial
disability
benefit.
• Accident&
disability
benefit
• Critical
illness
• Major
surgical
assistance
• Disability
benefit.
• Accident
benefit
• Waiver of
premium
benefit.
MPBIM 62
permanent
total/ partial
disability
benefit.
• Waiver of
premium
benefit.
• Critical illness
benefit.
• Hospital cash
benefit.
• Accident
rider
benefit
Rebate For every Rs 10,000
SA above Rs 50,000
For yearly:3%
Half year:1.5%
SA 25000 to 49000: 1
SA 50000 & above:2
Loan Can avail loan upto
90% of the surrender
value.
Can avail loan
upto 90% of the
surrender value.
No loans granted
Surrender After 3 full policy year After 3 full policy