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EXECUTIVE SUMMARY

The objective of the project was to study and evaluate present market share

of two leading insurance company LIC and ICICI PRUDENTIAL.

To complete the project the study has been conducted which based on the

secondary data which is collected through the various books, magazine,

journal and websites.

The main purpose of the study to know that how and what manner people

attract towards the company and how they decide which one should be

chosen.

Finding and recommendation made on the basis of survey most depicts on

the point that insurance plan and policies should be more customer centric

,as many customer are not aware about the policies and plan and are not able

to decide which policies or plan is better for them. so that they can give

proper knowledge to the customers. Frequent change of customers should

not be done on the routes.

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RESEARCH OBJECTIVE

1) To establish an interface between the policy/plans makers and policy

takers, that how and in what manners they show there reaction

towards policy and plan.

to study and analyse the different pension plans of the two company

LIC and ICICI PRUDENTIAL .

to find out How people choose the suitable pension plan for them

from LIC.

2) to know that how and in what manners the different pension plan

attract different age and salary group.

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INTRODUCTION TO THE TOPIC

Introduction seeks to introduce the readers to the backgrounds of the study,

people involved in the research scope of the study. It is a brief rationale as

why we did our study on Comparative Study On Pension Of Leading

Life Insurance Company ( LIC and ICICI Prudential) .

Background and People Involved

In India LIC and ICICI Prudential are the leading Insurance Company. LIC

is from government sector and whereas ICICI prudential is a joint venture of

ICICI Bank of India and prudential Insurance of U.K.

Mainly pension is provided by the government to its employees. But there is

a large no as people who work with private sector industry, after the

retirement the first thing which worry them is how they survive and how

theirs needs and requirements fulfilled?

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INSURANCE IN INDIA:-

Insurance is a federal subject in India and has a history dating back to 1818.Life and general insurance in India is still a nascent sector with huge

potential for various global players with the life insurance premiums

accounting to 2.5% of the country's GDP while general insurance premiums

to 0.65% of India's GDP .[1]. The Insurance sector in India has gone through a

number of phases and changes, particularly in the recent years when the

Govt. of India in 1999 opened up the insurance sector by allowing private

companies to solicit insurance and also allowing FDI up to 26%. Ever since,

the Indian insurance sector is considered as a booming market with every

other global insurance company wanting to have a lion's share. Currently,

the largest life insurance company in India is still owned by the government.

History of Insurance in India

Insurance in India has its history dating back till 1818, when Oriental Life

Insurance Company was started by Europeans in Kolkata to cater to the

needs of European community. Pre-independent era in India saw

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discrimination among the life of foreigners and Indians with higher

premiums being charged for the latter. It was only in the year 1870, Bombay

Mutual Life Assurance Society, the first Indian insurance company covered

Indian lives at normal rates.

At the dawn of the twentieth century, insurance companies started

mushrooming up. In the year 1912, the Life Insurance Companies Act, and

the Provident Fund Act were passed to regulate the insurance business. The

Life Insurance Companies Act, 1912 made it necessary that the premium

rate tables and periodical valuations of companies should be certified by an

actuary. However, the disparage still existed as discrimination between

Indian and foreign companies. The oldest existing insurance company in

India is National Insurance Company Ltd, which was founded in 1906 and is

doing business even today. The Insurance industry earlier consisted of only

two state insurers: Life Insurers i.e. Life Insurance Corporation of India

(LIC) and General Insurers i.e. General Insurance Corporation of India

(GIC). GIC had four subsidiary companies.

With effect from December 2000 , these subsidiaries have been de-linked

from parent company and made as independent insurance companies:

Oriental Insurance Company Limited , New India Assurance Company

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Limited , National Insurance Company Limited and United India Insurance

Company Limited .

Related Acts: -

The insurance sector went through a full circle of phases from being

unregulated to completely regulated and then currently being partly

deregulated. It is governed by a number of acts, with the first one being the

Insurance Act, 1938.

The Insurance Act, 1938

The Insurance Act, 1938 was the first legislation governing all forms of

insurance to provide strict state control over insurance business.

Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19

January 1956 , that life insurance in India was completely nationalized,

through a Government ordinance; the Life Insurance Corporation Act, 1956

effective from 1.9.1956 was enacted in the same year to, inter-alia, form

LIFE INSURANCE CORPORATION after nationalization of the 245

companies into one entity. There were 245 insurance companies of both

Indian and foreign origin in 1956. Nationalization was accomplished by the

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govt. acquisition of the management of the companies. The Life Insurance

Corporation of India was created on 1 September, 1956, as a result and has

grown to be the largest insurance company in India as of 2006 .[2]

General Insurance Business (Nationalization) Act, 1972

The General Insurance Business (Nationalization) Act, 1972 was enacted to

nationalize the 100 odd general insurance companies and subsequently

merging them into four companies. All the companies were amalgamated

into National Insurance, New India Assurance, Oriental Insurance, and

United India Insurance which were headquartered in each of the four

metropolitan cities .[3]

Insurance Regulatory and Development Authority (IRDA) Act,

1999Till 1999, there were not any private insurance companies in Indian

insurance sector. The Govt. of India, then introduced the Insurance

Regulatory and Development Authority Act in 1999, thereby de-regulating

the insurance sector and allowing private companies into the insurance.

Further, foreign investment was also allowed and capped at 26% holding in

the Indian insurance companies. In recent years many private players entered

in the Insurance sector of India. Companies with equal strength competing

in the Indian insurance market. Currently, in India only 2 million people

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(0.2 % of total population of 1 billion), are covered under Mediclaim,

whereas in developed nations like USA about 75 % of the total population

are covered under some insurance scheme. With more and more private

players in the sector this scenario may change at a rapid pace.

General Insurance Business (Nationalization) Act, 1972

The General National Insurance, New India Assurance, Oriental

Insurance, United India Insurance which were headquartered in each of

the four metropolitan cities .[3]LIC:- LIFE INSURANCE CORPRATION OF

INDIA )

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BRI EF H I STORY OF L I F E I NSURANCE

CORPORATI ON (L I C)

Bharat Insurance Company (1896) was also one of such companies inspired

by nationalism. The Swadeshi movement of 1905-1907 gave rise to more

insurance companies. The United India in Madras, National Indian and

National Insurance in Calcutta and the Co-operative Assurance at Lahorewere established in 1906. In 1907, Hindustan Co-operative Insurance

Company took its birth in one of the rooms of the Jorasanko, house of the

great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General

Assurance and Swadeshi Life (later Bombay Life) were some of the

companies established during the same period. Prior to 1912 India had no

legislation to regulate insurance business. In the year 1912, the Life

Insurance Companies Act, and the Provident Fund Act were passed. The

Life Insurance Companies Act, 1912 made it necessary that the premium

rate tables and periodical valuations of companies should be certified by an

actuary. But the Act discriminated between foreign and Indian companies on

many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance

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business. From 44 companies with total business-in-force as Rs.22.44 crore,

it rose to 176 companies with total business-in-force as Rs.298 crore in

1938. During the mushrooming of insurance companies many financially

unsound concerns were also floated which failed miserably. The Insurance

Act 1938 was the first legislation governing not only life insurance but also

non-life insurance to provide strict state control over insurance business. The

demand for nationalization of life insurance industry was made repeatedly in

the past but it gathered momentum in 1944 when a bill to amend the Life

Insurance Act 1938 was introduced in the Legislative Assembly. However, it

was much later on the 19th of January, 1956, that life insurance in India was

nationalized. About 154 Indian insurance companies, 16 non-Indian

companies and 75 provident were operating in India at the time of

nationalization. Nationalization was accomplished in two stages; initially the

management of the companies was taken over by means of an Ordinance,

and later, the ownership too by means of a comprehensive bill. The

Parliament of India passed the Life Insurance Corporation Act on the 19th of

June 1956, and the Life Insurance Corporation of India was created on 1st

September, 1956, with the objective of spreading life insurance much more

widely and in particular to the rural areas with a view to reach all insurable

persons in the country, providing them adequate financial cover at a

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reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart

from its corporate office in the year 1956. Since life insurance contracts are

long term contracts and during the currency of the policy it requires a variety

of services need was felt in the later years to expand the operations and place

a branch office at each district headquarter. re-organization of LIC took

place and large numbers of new branch offices were opened. As a result of

re-organization servicing functions were transferred to the branches, and

branches were made accounting units. It worked wonders with the

performance of the corporation. It may be seen that from about 200.00

crores of New Business in 1957 the corporation crossed 1000.00 crores only

in the year 1969-70, and it took another 10 years for LIC to cross 2000.00

crore mark of new business. But with re-organization happening in the early

eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on

new policies.

Today LIC functions with 2048 fully computerized branch offices, 100

divisional offices, 7 zonal offices and the corporate office. LICs Wide Area

Network covers 100 divisional offices and connects all the branches through

a Metro Area Network. LIC has tied up with some Banks and Service

providers to offer on-line premium collection facility in selected cities.

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LICs ECS and ATM premium payment facility is an addition to customer

convenience. Apart from on-line Kiosks and IVRS, Info Centers have been

commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,

Kolkata, New Delhi, Pune and many other cities. With a vision of providing

easy access to its policyholders, LIC has launched its SATELLITE

SAMPARK offices. The satellite offices are smaller, leaner and closer to the

customer. The digitalized records of the satellite offices will facilitate

anywhere servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario

of Indian insurance and is moving fast on a new growth trajectory surpassing

its own past records. LIC has issued over one crore policies during the

current year. It has crossed the milestone of issuing 1,01,32,955 new policies

by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the

corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set

unprecedented performance records in various aspects of life insurance

business. The same motives which inspired our forefathers to bring

insurance into existence in this country inspire us at LIC to take this message

of protection to light the lamps of security in as many homes as possible and

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to help the people in providing security to their families.

Life Insurance Corporation of India

Some Ar eas

The traditional life insurance business for the LIC has been a little more than

a savings policy. Term life (where the insurance company pays a

predetermined amount if the policyholder dies within a given time but it

pays nothing if the policyholder does not die) has accounted for less than 2%

Life Insurance.

Corporation of India

Some Ar eas of F uture Growth

Life Insurance

The traditional life insurance business for the LIC has been a little more than

a savings policy of the insurance premium of the LIC (Mitra and Nayak,

2001). For the new life insurance companies, term life policies would be the

main line of business.

Health Insurance

Health insurance expenditure in India is roughly 6% of GDP, much higher

than most other countries with the same level of economic development. Of

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that, 4.7% is private and the rest is public. What is even more striking is that

4.5% are out of pocket expenditure (Berman, 1996). There has been an

almost total failure of the public health care system in India. This creates an

opportunity for the new insurance companies.

Thus, private insurance companies will be able to sell health insurance to a

vast number of families who would like to have health care cover but do not

have it.

Pension

The pension system in India is in its infancy. There are generally three forms

of plans: provident funds, gratuities and pension funds. Most of the pension

schemes are confined to government employees (and some large

companies). The vast majority of workers are in the informal sector. As a

result, most workers do not have any retirement benefits to fall back on after

retirement. Total assets of all the pension plans in India amount to less than

USD 40 billion.

Therefore, there is a huge scope for the development of pension funds in

India. The finance minister of India has repeatedly asserted that a Latin

American style reform of the privatized pension system in India would be

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welcome (Roy, 1997). Given all the pros and cons, it is not clear whether

such a wholesale privatization would really benefit India or not (Sinha,

2000).

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OBJECTIVES OF LIC

Spread Life Insurance widely and in particular to the rural areas and to

the socially and economically backward classes with a view to

reaching all insurable persons in the country and providing them

adequate financial cover against death at a reasonable cost.

Maximize mobilization of people's savings by making insurance-

linked savings adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust, without losing sight of

the interest of the community as a whole; the funds to be deployed to

the best advantage of the investors as well as the community as a

whole, keeping in view national priorities and obligations of attractive

return.

Conduct business with utmost economy and with the full realization

that the moneys belong to the policyholders.

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Act as trustees of the insured public in their individual and collective

capacities.

Meet the various life insurance needs of the community that would

arise in the changing social and economic environment.

achievement of Corporate Involve all people working in the

Corporation to the best of their capability in furthering the interests of

the insured public by providing efficient service with courtesy.

Promote amongst all agents and employees of the Corporation a sense

of participation, pride and job satisfaction through discharge of their

duties with dedication towards the achievement of the goal.

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VISION AND MISSION

Vision To be the best Housing Finance Company in the country.

Mission

Provide secured housing finance at

affordable cost, maximizing shareholders

value with higher customer sensitivity.

Values

Fair and Transparent Business Practices.

Transformation to a Knowledge Organization.

Higher Autonomy in Operations.

Instilling a sense of Ownership amongst Employees.

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PENSION: - A BRIEF INTRODUCTION

What Is Pension

The pension system in India is in its infancy. There are generally three formsof plans: provident funds, gratuities and pension funds. Most of the pension

schemes are confined to government employees (and some large

companies). The vast majority of workers are in the informal sector. As a

result, most workers do not have any retirement benefits to fall back on after

retirement. Total assets of all the pension plans in India amount to less than

USD 40 billion.

Therefore, there is a huge scope for the development of pension funds in

India. The finance minister of India has repeatedly asserted that a Latin

American style reform of the privatized pension system in India would bewelcome (Roy, 1997). Given all the pros and cons, it is not clear whether

such a wholesale privatization would really benefit India or not (Sinha,

2000).

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Introduction to the Pension Plans of LIC.

Pension plan are Individual Plans that gaze into your future and foresee financial

stability during your old age. These policies are most suited for senior citizens and

those planning a secure future, so that you never give up on the best things in life.

Pension Plus Jeevan Nidhi Jeevan Akshay-VI New Jeevan Dhara-I New Jeevan Suraksha-I

Pension Plus

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS

BORNE BY THE POLICYHOLDER

LICs Pension Plus is a unit linked deferred pension plan, which provides

you a minimum guarantee on the gross premiums paid. The plan is without

any life cover.

You have a choice of investing your premiums in one of the two types of

investment funds available. Premiums paid after deduction of allocation

charge will purchase units of the Fund type chosen. The Unit Fund is subject

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to various charges and value of units may increase or decrease, depending on

the Net Asset Value (NAV).

1. Payment of Premiums : You may pay premiums regularly at yearly, half-

yearly or quarterly or monthly (through ECS mode only) intervals over the

term of the policy. Alternatively, a Single premium can be paid.

A grace period of 30 days will be allowed for payment of yearly or half-

yearly or quarterly premiums and 15 days for monthly (through ECS)

premiums.

2 . Eligibility Conditions And Other Restrictions:

a) Minimum Entry Age - 18 years (last birthday)

b) Maximum Entry Age - 75 years (nearest birthday)

c) Minimum Vesting Age - 40 years (completed)

d) Maximum Vesting Age - 85 years (nearest birthday)

e) Minimum Deferment Term - 10 years

f) Sum Assured - NIL

g) Minimum Premium -Regular premium (other than monthly (ECS) mode) : Rs. [15,000] p.a.

Regular premium (for monthly (ECS) mode) : Rs. [1,500] p.m.

Single premium: Rs. [30,000]

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h) Maximum Premium -

Regular premium : Rs. [1,00,000] p.a.

Single premium: No Limit

Annualized Premiums shall be payable in multiple of Rs. 1,000 for other

than ECS monthly. For monthly (ECS), the premium shall be in multiples of

Rs. 250/-.

3. Charges under the Plan:

A) Premium Allocation Charge : This is the percentage of the premium

deducted towards charges from the premium received. The balance

constitutes that part of the premium which is utilized to purchase

(Investment) units for the policy. The allocation charges are as below:

For Single premium policies: 3.3%

For Regular premium policies:

Premium Allocation Charge

First Year 6.75%

2nd to 5th Year 4.50%

thereafter 2.50%

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Allocation charge for Top-up: 1.25%

B) Other Charges: The following charges shall be deducted during the term

of the policy:

1. Policy Administration charge: Rs. 30/- per month during the first

policy year and Rs 30/- per month escalating at 3% p.a. thereafter,

throughout the term of the policy shall be levied.

2. Fund Management Charge It is a charge levied as a percentage of the

value of units at following rates:

0.70% p.a. of Unit Fund for Debt Fund

0.80% p.a. of Unit Fund for Mixed Fund

Fund Management Charge shall be appropriated while computing

NAV.

3. Switching Charge This is the charge levied on switching of monies

from one fund to another. Within a given policy year 2 switches will

be allowed free of charge. Subsequent switches in that year shall be

subject to a switching charge of Rs. 100 per switch.

4. Bid/Offer Spread Nil.

5. Discontinuance Charge The discontinuance charge for regular

premium policies is as under:

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Where the policyis discontinuedduring the policyyear

Discontinuance chargesfor the policies havingannualized premium upto Rs. 25,000/-

Discontinuance chargesfor the policies havingannualized premiumabove Rs. 25,000/-

1Lower of 10% * (AP orFV) subject to a maximumof Rs. 2500/-

Lower of 6% * (AP or FV)subject to maximum of Rs.6000/-

2Lower of 7% * (AP or FV)subject to a maximum ofRs. 1750/-

Lower of 4% * (AP or FV)subject to maximum of Rs.5000/-

3Lower of 5% * (AP or FV)subject to a maximum ofRs. 1250/-

Lower of 3% * (AP or FV)subject to maximum of Rs.4000/-

4Lower of 3% * (AP or FV)subject to a maximum ofRs. 750/-

Lower of 2% * (AP or FV)subject to maximum of Rs.2000/-

5 and onwards NIL NIL

6. AP Annualised Premium

FV Policyholders Fund Value excluding the fund value in respect

of Top-up premiums paid, if any, on the date of discontinuance.

7. There shall not be any discontinuance charge under Single Premium

8. Service Tax Charge A service tax charge, if any, will be as per the

service tax laws and rate of service tax as applicable from time to

time.

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9. Miscellaneous Charge This is a charge levied for change in

premium mode, if opted for by the policyholder during the deferment

term. An alteration may be allowed subject to a charge of Rs. 50/-.

Jeevan Nidhi

LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan.

On survival of the policyholder beyond term of the policy the accumulated

amount (i.e. Sum Assured + Guaranteed Additions + Bonuses) is used to

generate a pension (annuity) for the policyholder. The plan also provides a

risk cover during the deferment period. The USP of the plan being the

pension can commence at 40 years. The premiums paid are exempt underSection 80CCC of Income Tax Act.

Salient Features:

a . Guaranteed Additions : Guaranteed Additions @ Rs.50/- per thousand

Sum assured for each completed year, for the first five years .

b. Participation in profits: The policy shall participate in profits of the

Corporation from the 6th year onwards and shall be entitled to receive

bonuses declared as per the experience of the Corporation.

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c. Benefit On Vesting:

1. Option to commute up to 1/3rd of the amount available on vesting,

which shall include the Sum Assured under the Basic Plan together with

accrued Guaranteed Additions, simple Reversionary Bonuses and

Terminal Bonus, if any.

2 . Annuity as per the option selected : Annuity on the balance amount

if commutation is exercised, otherwise annuity on the full amount.

d. Annuity Options:

On vesting, the annuity instalment, mode of annuity payment and type of

annuity which shall be made available to the Life Assured (Annuitant) /

Nominee will depend upon the then prevailing Immediate Annuity plan of

the Life Insurance Corporation of India and its terms and conditions.

Currently the following options are available under LICs immediate

annuities:

1. Annuity for life: The annuity is paid to the life assured as long as he/she

is alive.

2. Annuity Guaranteed for certain periods : The annuity is paid to the life

assured for periods of 5 or 10 or 15 or 20 years as chosen by him/her,

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whether or not he/she survives that period. After the chosen period, the

annuity is paid to the life assured as long as he/she is alive

3. Annuity with return of purchase price on death: The annuity is paid to

the life assured as long as he/she is alive. On the death of the life assured,

the purchase price of the annuity is paid as death benefit. The purchase price

includes the Sum Assured under the Basic Plan, the accrued Guaranteed

Additions and any accrued bonuses, excluding the commuted value, if any.

4. Increasing annuity: The annuity is paid to the life assured as long as

he/she is alive. The amount of annuity increases every year at a simple rate

of 3% per annum.

5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured

as long as he/she is alive. On death of the life assured, 50% of the annuity is

payable to the nominated spouse as long as the spouse is alive.

6. Death Benefit on death before annuity vests: On the death of the Life

Assured during the deferment period of the policy, i.e. before the annuity

vests, an amount equal to the Sum Assured under the Basic plan along with

the accrued Guaranteed Additions, simple Reversionary Bonuses and

Terminal Bonus, if any, will be paid in a lump sum to the appointed

nominee, provided the policy is in force for full Sum Assured. Nominee will

also have the option to purchase an annuity with this amount.

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Jeevan Akshay VI

Introduction:

It is an Immediate Annuity plan, which can be purchased by paying a lump

sum amount. The plan provides for annuity payments of a stated amount

throughout the life time of the annuitant. Various options are available for

the type and mode of payment of annuities.

Options Available:

The following options are available under the plan

Type of Annuity:

payable for life at a uniform rate.

Annuity Annuity payable for 5, 10, 15 or 20 years certain and

thereafter as long as the annuitant is alive.

Annuity for life with return of purchase price on death of the

annuitant.

Annuity payable for life increasing at a simple rate of 3% p.a.

Annuity for life with a provision of 50% of the annuity payable to

spouse during his/her lifetime on death of the annuitant.

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Annuity for life with a provision of 100% of the annuity payable to

spouse during his/her lifetime on death of the annuitant.

You may choose any one. Once chosen, the option cannot be altered .

Mode:

Annuity may be paid either at monthly, quarterly, half yearly or yearly

intervals. You may opt any mode of payment of Annuity.

Salient features:

Premium is to be paid in a lump sum.

Minimum purchase price : Rs.50,000/= or such amount which may

secure a minimum annuity as under:

Mode Minimum Annuity Monthly Rs. 500 per monthQuarterly Rs. 1000 per quarterHalf-yearly Rs. 2000 per half yearYearly Rs.3000 per year

No medical examination is required under the plan.

No maximum limits for purchase price, annuity etc.

Minimum age at entry 40 years last birthday and Maximum age at

entry 79 years last birthday.

Age proof necessary.

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Annuity Rate:

Amount of annuity payable at yearly intervals which can be purchased forRs. 1 lakh under different options is as under:

Incentives for high purchase price:

If your purchase price is Rs. 1.50 lakh or more, you will receive higher

amount of annuity due to available incentives.

Cooling-off period

If you are not satisfied with the Terms and Conditions of the policy, you

may return the policy to us within 15 days from the date of receipt of the

Policy Bond. On receipt of the policy we shall cancel the same and the

Age lastbirthday Yearly annuity amount under option

( i ) ( ii ) (15 yearscertain) ( iii ) ( iv ) ( v ) ( vi )

40 7510 7440 6930 5610 7310 712045 7770 7660 6960 5890 7500 724050 8140 7950 7000 6280 7760 742055 8650 8330 7050 6810 8130 767060 9350 8790 7110 7530 8640 803065 10410 9330 7180 8590 9400 857070 12080 9830 7260 10220 10560 937075 14510 10220 7360 12590 12240 10590

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amount of premium deposited by you shall be refunded to you after

deducting the charges for stamp duty.

Paid-up value:

The policy does not acquire any paid-up value.

Surrender Value :

No surrender value will be available under the policy.

Loan :

No loan will be available under the policy.

Section 41 of Insurance Act 1938 :

No person shall allow or offer to allow, either directly or indirectly, as

an inducement to any person to take out or renew or continue an

insurance in respect of any kind of risk relating to lives or property in

India, any rebate of the whole or part of the commission payable or

any rebate of the premium shown on the policy, nor shall any person

taking out or renewing or continuing a policy accept any rebate,

except such rebate as may be allowed in accordance with the

published prospectuses or tables of the insurer: provided that

acceptance by an insurance agent of commission in connection with a

policy of life insurance taken out by himself on his own life shall not

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be deemed to be acceptance of a rebate of premium within the

meaning of this sub-section if at the time of such acceptance the

insurance agent satisfies the prescribed conditions establishing that he

is a bona fide insurance agent employed by the insurer.

New Jeevan Dhara-I

Product summary:

These are Deferred Annuity plans that allow the policyholder to make

provision for regular income after the selected term.

Premiums:

Premiums are payable yearly, half-yearly, quarterly, monthly or through

Salary deduction, as opted by you, throughout the term of the policy or till

earlier death. Alternatively, the premium may be paid in one lump sum

(single premium).

Tax Benefits:

Tax relief under Section 80ccc is available on premiums paid under New

Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan

Dhara I (Table No.148) qualify for tax relief under Section 88.

Bonuses :

These are with-profit p lans and participate in the profits of the Corporations

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annuity / pension business. Policies get a share of the profits in the form of

bonuses. Simple Reversionary Bonuses are declared per thousand Sum

Assured annually at the end of each financial year. Once declared, they

form part of the guaranteed benefits of the plan. Final (Additional) Bonuses

may also be payable provided policy has run for a certain minimum period.

New Jeevan Suraksha -I

Product summary:

These are Deferred Annuity plans that allow the policyholder to make

provision for regular income after the selected term.

Premiums:

Premiums are payable yearly, half-yearly, quarterly, monthly or through

Salary deduction, as opted by you, throughout the term of the policy or tillearlier death. Alternatively, the premium may be paid in one lump sum

(single premium)

Tax Benefits:

Tax relief under Section 80ccc is available on premiums paid under New

Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan

Dhara I (Table No.148) qualify for tax relief under Section 88.

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Bonuses :

These are with- profit plans and participate in the profits of the Corporations

annuity / pension business. Policies get a share of the profits in the form of

bonuses. Simple Reversionary Bonuses are declared per thousand Sum

Assured annually at the end of each financial year. Once declared, they

form part of the guaranteed benefits of the plan. Final (Additional) Bonuses

may also be payable provided policy has run for a certain minimum period.

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ICICI PRUDENTIAL

HISTORY OF ICICI PRUDENTIAL

ICICI Prudential is a joint venture between ICICI Bank and Prudential

plc engaged in the business of life insurance in India. ICICI

Prudential is the largest private insurance company and second largest

insurance in India after LIC. ICICI Prudential Life Insurance Company

is a joint venture between ICICI Bank, a premier financial powerhouse,

and Prudential plc, a leading international financial services group

headquartered in the United Kingdom. ICICI Prudential was amongst the

first private sector insurance companies to begin operations in

December 2000 after receiving approval from Insurance Regulatory

Development Authority (IRDA).ICICI Prudential Life's capital stands at

Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential

plc holding 74% and 26% stake respectively. For the year ended March

31, 2008, the company garnered Retail New Business Weighted premium of

Rs. 6,684 crores, registering a growth of 68% over the last year and

has underwritten nearly 3 million retail policies during the period.

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The company has assets held over Rs. 30,000 crore as on April 30,

2008.

Vision & Values

To be the dominant Life, Health and Pensions player built on trust by world-

class people and service.

This we hope to achieve by:

Understanding the needs of customers and offering them superior

products and service.

Leveraging technology to service customers quickly, efficiently and

conveniently.

Developing and implementing superior risk management and

investment strategies to offer sustainable and stable returns to our

policyholders.

Providing an enabling environment to foster growth and learning for

our employees.

And above all, building transparency in all our dealings .

The success of the company will be founded in its unflinching commitment

to 5 core values -- Integrity, Customer First, Boundary less, Ownership and

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Passion. Each of the values describes what the company stands for, the

qualities of our people and the way we work.

How to plan for retirement?5 simple steps to arrive at an ideal retirement plan

Step 1: Decide how much income you require to live comfortably in your

post-retirement years. Remember to take into account aspects like increased

medical costs, vacations and gifts for family, but reduce costs like children's

education and rent, if you own your home. Use our easy Inflation Index

Calculator to calculate the impact of inflation.

Step 2: Determine how much you need to save regularly , starting today.

Use our Retirement Calculator to determine how large a kitty you will need

and how much you need to save each year.

Step 3 : Select the right retirement plan that enables you to meet your post-

retirement requirements. Preferably invest in market-linked plans, which can

provide you with potentially higher returns in the long run. Our Life Stage

Profiler will help you select the plan that meets your criteria

Step 4: Start saving now so you have time on your side and can enjoy the

power of compounding. Use our simple Power of Compounding Calculator.

Step 5: Systematically invest a fixed amount every month for your post-

retirement years.

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Why is retirement planning important?

Retire from work. Not from life.

A retirement plan is an assurance that you will continue to earn a satisfying

income and enjoy a comfortable lifestyle, even when you are no longer

working. To understand why an increasing number of individuals have

already started planning for their retirement , and why you should too, read

on.

Independence is the new way of life: An increasing number of young

Indian professionals are moving away from the traditional joint family

structure. Since support no longer comes easily, parents have realized the

need to provide for themselves during their retirement years.

Costs set to soar: Skyrocketing costs throw even a well-salaried person off

balance. With rates rising everyday, you can imagine how high they will be

when you are ready to retire. A retirement plan provides you with a steady

income every month, to arm you in the face of rising costs.

To understand how inflation can impact your monthly expenses, use our

special tool, the Inflation Index calculator.

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Retirement Solutions

To cater to the needs of a customer looking for retirement planning , ICICI

Prudential presents a wide array of products. These products have been

designed to take into account the diverse set of needs that characterize

individual customers.

ICICI Pru LifeLink Pension SP

ICICI Pru LifeLink Pension SP is a single premium pension policy that provides

you the opportunity to enjoy regular income as pension post retirement by paying

just a single premium. This product comes with the Pension Return Guarantee

Fund (PRGF) that provides you a minimum guaranteed return by way of a

guaranteed NAV at the time of vesting(Conditions Apply*). The policy value at

date of vesting is also subject to the minimum guaranteed return as prescribed

by IRDA from time to time.

Guaranteed NAV

This Policy offers you a minimum guaranteed return, as prescribed by IRDA from

time to time, on the original vesting date. This return is offered by way of a

guaranteed NAV. The applicable guaranteed NAV is declared at the beginning of

the subscription period of the tranche of the Pension Return Guarantee Fund in

which the premium is invested. The NAV applicable at vesting is the higher of the

guaranteed NAV and the then prevailing NAV. The policy value at date of vesting

is also subject to the minimum guaranteed return.

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*In case of surrender and Death Benefit payouts, guaranteed NAV will not be

applicable. There will be a cost of investment guarantee of 0.25% p.a. of Fund

Value which will be charged by adjustment to the fund NAV.

ICICI Pru LifeLink Pension SP at a glance

Minimum/Maximum Age At Entry 35/ 70 years

Minimum / Maximum Vesting Age 45 / 80 years

Policy Term 10 years

ICICI Pru Forever Life

ICICI Prudential Life Insurance presents ICICI Pru Forever Life . A

regular premium deferred pension plan that provides the security of

life cover during the Accumulation Phase and offers five ways to get

your pension, after retirement. When you retire, you can still continue

doing things you have always enjoyed. After all, you would like to

retire from work, not life.

ICICI Pru Forever Life at a glance

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Modes of Premium Payment Yearly / Half yearly / Monthly

Minimum Premium Rs. 6,000 per annum

Minimum Sum Assured Rs.50,000

Minimum / Maximum age at entry 20 / 60 years

Minimum / Maximum age at vesting 50 / 70 years

Minimum / Maximum Policy Term 5 / 30 years

ICICI Pru Immediate Annuity

In your golden years worries about security and comfort become

greater. Presenting ICICI Pru Immediate Annuity from ICICI

Prudential, a plan that gives you the benefit of life time income. With

this unique plan, you can start getting your annuity immediately after

paying the premium.

ICICI Pru Immediate Annuity at a glance

Modes of Annuity Payment Yearly / Half yearly / Monthly

Minimum annuity payable Rs.12,000

Minimum / Maximum age at entry 45 / 80 years

Minimum / age at entry (spouse) 20 years

Minimum / Maximum Policy Term Not applicable

How does the pension plan work?

You need to choose the premium amount for your policy

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After deducting the premium allocation charge, the balance

amount will be invested in the Pension Return Guarantee Fund

At vesting of your policy, you can choose from the available

pension options to receive your pension

In the unfortunate event of death of the Life Assured during the

term of the policy, your nominee will receive the Fund Value. The

guaranteed NAV does not apply on death

Why Life Stage Pension

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Retirement time is the time to live your dream, dream that you have been

putting off as you never had the time for it. But your retirement dream has a

cost attached to it. We call this your retirement number.

To help you achieve your retirement number ICICI Prudential presents to

you, LifeStage Pension .

One of the most distinguishing features of this policy is that it has no

premium allocation charge for regular premiums which means 100% of your

money is invested. Whats more, the policy provides you with a unique

lifecycle-based strategy that continuously re-distributes your money across

various asset classes based on your life stage and risk tolerance, eventually

providing you with a customized retirement solution .

Invest today to attain your retirement number and fulfill your dream

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Why Premier Life Pension

You have strived hard to achieve your dreams and have attained the best

comforts life could offer. After having reached this enviable and secure

position, wouldnt you like to continue living life on your own terms even

after retirement ? If you think so, then you need a retirement solution that

not only suits your needs but also lets you retire RICH.

To help you achieve this, ICICI Prudential Life Insurance presents PremierLife Pension Plan- a limited premium paying, unit-linked

pension policy designed for preferred customers like you.

This unique policy helps you customize your investments by

allowing you to decrease your premium contributions as well as allowing

you to boost your investment kitty by making top-ups at any time. Once you

arrive at your retirement age the accumulated value of your policy provides

you with a regular income (pension ) for life

Why LifeTime Super Pension Plan

ICICI Prudential's LifeTime Super Pension policy is especially designed to

help you systematically save towards a joyful and satisfying retirement.

LifeTime Super Pension Plan is a cost-effective pension plan that delivers

great value in the long run. A regular-premium unit-linked pension policy,

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LifeTime Super Pension ensures you earn a fixed income, for your entire life

after retirement . So you can relax and live moments that truly matter.

.Why Life Link Super Pension

ICICI Prudential's LifeLink Super Pension Plan has been especially

tailored for individuals who would much rather make a lump-sum

investment than pay premiums at regular intervals for their retirement

planning . A cost-effective single premium unit-linked pension policy ,

LifeLink Super Pension Plan provides potentially higher returns that

ensure your golden years are secure and peaceful.

Invest in LifeLink Super Pension Plan today and watch your money

multiply every month, right up to the day you retire. Receive an assured

income from your retirement day, for the rest of your life. Read more about

the features and benefits of this plan.

Why ForeverLife

ICICI Prudential's ForeverLife is a complete insurance cum pension plan

that performs two crucial roles: it acts as a protective cover while you earn

for your retirement , and provides you with regular pensions once you

retire.

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Why Immediate Annuity

Security and comfort during retirement is a top priority for everyone. It

forms the central aspect of a dream that everyone hopes to achieve and

realize at some point or the other during his or her life as a senior citizen.

If you fear that you've missed the bus as far as retirement planning is

concerned, there is no reason to despair. With ICICI Prudential's Single

Premium Product, you can start earning an annuity income immediately after

paying the premium. What's more, the annuity income is guaranteed for life

which means that the insurance company pays you and your spouse (as the

case maybe) a guaranteed pension till you live.

Tax Benefits on Insurance and Pension

Life insurance and retirement plans are effective ways to save taxes when

doing your year end tax planning.

To assist you in tax planning, the tax breaks that are available under our

various insurance and pension policies are described below:

Our life insurance plans are eligible for tax deduction under Sec. 80C.

1. Our Pension plans are eligible for a tax deduction under Sec. 80CCC.

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2. Our health insurance plans/riders are eligible for tax deduction under

Sec. 80D.

3. The proceeds or withdrawals of our life insurance policies are exempt

under Sec 10(10D), subject to norms prescribed in that section.

Invest in ICICI Prudential Life insurance and retirement plans and avail of

these tax planning services to save tax at your year end tax planning!

ULIPs : An Introduction

Most importantly, what are ULIPs? Here, you will find all the information

you need to set your mind at ease about how to invest in ULIPs , and which

ULIP is right for you.

ULIPs are a category of goal-based financial solutions that combine the

safety of insurance protection with wealth creation opportunities. In ULIPs ,

a part of the investment goes towards providing you life cover. The residual

portion of the ULIP is invested in a fund which in turn invests in stocks or

bonds; the value of investments alters with the performance of the

underlying fund opted by you.

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Simply put, ULIPs are structured in such that the protection element and the

savings element are distinguishable, and hence managed according to your

specific needs. In this way, the ULIP plan offers unprecedented flexibility

and transparency.

Working of ULIPs

It is critical that you understand how your money gets invested once you

purchase a ULIP :

When you decide the amount of premium to be paid and the amount of life

cover you want from the ULIP , the insurer deducts some portion of the

ULIP premium upfront. This portion is known as the Premium Allocation

charge, and varies from product to product. The rest of the premium is

invested in the fund or mixture of funds chosen by you. Mortality charges

and ULIP administration charges are thereafter deducted on a periodic

(mostly monthly) basis by cancellation of units, whereas the ULIP fund

management charges are adjusted from NAV on a daily basis.

Since the fund of your choice has an underlying investment either in

equity or debt or a combination of the two your fund value will reflect the

performance of the underlying asset classes. At the time of maturity of your

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plan, you are entitled to receive the fund value as at the time of maturity.

The pie-chart below illustrates the split of your ULIP premium:

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Types of ULIPs

One of the big advantages that a ULIP offers is that whatever be your

specific financial objective, chances are that there is a ULIP which is just

right for you. The figure below gives a general guide to the different goals

that people have at various age-groups and thus, various life-stages.

Depending on your specific life-stage and the corresponding goal, there is a

ULIP which can help you plan for it .

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PLANNING ULIPS FOR RETIREMENT

Retirement is the end of active employment and brings with it the cessation

of regular income. Today an increasing number of people have stated

planning for their retirement for below mentioned reasons

Almost 96% of the working population has no formal provisions for

retirement

With the growing nuclearisation of family structure, traditional

support system of the younger earning members is no longer

available

Developments in the healthcare space has lead to an increase in life

expectancy

Cost of living is increasing at an alarming rate

Pension plans from insurance companies ensure that regular, disciplined

savings in such plans can accumulate over a period of time to provide a

steady income post-retirement. Usually all retirement plans have two

distinctive phases

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The accumulation phase when you are saving and investing during

your learning years to build up a retirement corpus and

The withdrawal phase when you actually reap the benefits of yourinvestment as your annuity payouts begin

In a typical pension plan you have the flexibility to make a lump sum

payment or a regular contribution every year during your earning years.

Your money is then invested in funds of your choice. You can opt to receive

the annuity at any time after vesting age (age at which you become eligible

for pension chosen by you at the inception of the plan).

Most of the Unit linked pension plans also come with a wide range of

annuity options which gives you choice in structuring the post-retirement

benefit pay-outs. Also at the time of vesting you can make a lump sum tax-

exempted withdrawal of up to 33 per cent of the accumulated corpus.

In a retirement plan the earlier you begin the greater you gain post

retirement due to the power of compounding.

Let us take an example of Gaurav & Hari. Both of them want to retire at the

age of 60. Gaurav starts investing Rs. 10,000 every year from the age of 25

till the time that he retires. In all, he would have invested Rs. 350,000. If his

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investments were to earn 7% return every year, at the time of his retirement,

Gaurav will have a retirement corpus of Rs. 13, 82,368.

Now, Hari starts investing 10 years later (i.e. at the age of 35) and in order to

make up for the lost time, invests Rs.15,000 every year (which is 50% more

than Gauravs annual investment). So, by the time of his retirement, he

would have invested Rs. 3,75,000. And assuming the same annual return of

7%, he will end up with a retirement corpus of Rs 9, 48,735.

So, you see how despite setting aside more than 50% of Gauravs annual

contribution, Hari ends up with a retirement corpus which is almost a third

lesser than Gauravs. That is the power of compounding.

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Which is why, it is never too early to invest in a ULIP for retirement

planning

Tax Benefits of ulip

ULIPs are an efficient tax savin g instrument too .The tax benefits that you

can avail in case you invest in ULIPs are described below:

Life insurance plans are eligible for deduction under Sec. 80C

Pension plans are eligible for a deduction under Sec. 80CCC

Health insurance plans and critical illness riders are eligible for

deduction under Sec. 80D

The maturity proceeds or withdrawals of life insurance policies are exempt

under Sec 10(10D), subject to norms prescribed in that section.

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ULIP s FAQ (FREQUENTLY ASKED QUESTION )

Q1. What is a Unit Linked Fund?

Unit Linked Fund is a pool of the premiums paid by the policyholders which

is invested in a portfolio of assets to achieve the fund(s) objective. The price

of each unit in a fund depends on how the investments in the fund would

perform. The fund is managed by the insurance companies.

Q2. What is a Fund Value and how is it calculated?

Fund Value is the product of the total number of units under the policy and

the NAV. The fund value for the purpose of claims, surrenders or any other

clause stated shall be calculated on the basis of NAV.

Q3. What do I get at the end of my policy term?

The benefit received at the end of policy term is termed as maturity benefit.

The policyholder is entitled to receive fund value as maturity benefit.

Q4. What will my family receive if something happens to me?

In the unfortunate event of death during the term of the policy, the person

appointed as nominee shall receive the higher of sum assured or the fund

value. There are also certain ULIPs in market which give sum of Fund value

& sum assured as death benefit.

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Q5. Is investment return guaranteed in ULIPs?

Investment returns from ULIP may not be guaranteed. In unit linked

products/policies , the investment risk in investment portfolio is borne by

the policy holder. Depending upon the performance of the unit linked

fund(s) chosen; the policy holder may achieve gains or losses on his/her

investments. It should also be noted that the past returns of a fund are notnecessarily indicative of the future performance of the fund.

Q6. Can I change / switch my asset allocation?

Yes, you can change the investment pattern by moving from one fund to

other fund (s) amongst the funds offered under a particular product. Such a

change between funds is termed as a Switch. There will be a flat charge

levied for any switch over and above the free switches.

Q7. Can I partially withdraw from my policy?

Yes, you can encash / withdraw a part of the fund anytime after completion

of three years, subject to surrender charges as applicable to each individual

plan.

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RESERCH OBJECTIVE AND METHODOLOGY

RESEARCH PROBLEM

1) To establish an interface between the policy/plans makers and policy

takers, that how and in what manners they show there reaction

towards policy and plan.

Through the study we try to study and analysis the different

pension plans of the different company.

How people choose the suitable pension plan for them from

LIC.

2) We also want to know that how and in what manners the different

pension plan attract different age and salary group.

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HH YY PP OO TT HH EE SSII SS

Hypothesis is couched in terms of the particular independent and dependent

variables that are going to be used in study. Research hypothesis are specifictestable prediction made about the independent and dependent variables in

the study. As data is not originally collected for use in the research project under

consideration, but rather for use some other project, by some other person in

terms of secondary data.

Usually the literature review has given background material that

justifies the particular hypothesis that is to be tested.

There exists two type of hypothesis that is to be :

Null hypothesisAlternate hypothesis

In null hypothesis we assume that LIC pension plan work over the

other private insurance plan like ICICI prudential.

Alternate hypothesis if our assumption that the LIC pension plan work

over the other private company pension plan go wrong, alternate

hypothesis exists. It proves that ICICI prudential plan has greater

share.

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RESEARCH METHODOLOGY

RESEARCH: -

Research is an organized and systematic way of finding answers

to question.

Research is an enquiry or examination to discover new

information or rela tionship and to extent and to verify existing knowledge.

Redman & Mory define research as a systematized effort to

gain new knowledge.

Methodology is define as

1. The analysis of the principle of methods, rules, and postulates

employed by a discipline or

2. The development of methods, to be applied within a discipline

3. A particular procedure or set of procedure.

Research design

The framework of conducting research is known as research design.

Research design is the plan, struc ture, and strategy of investigation

conceived so as to obtain answers to research question and to control

variance.

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Types of research Design:-

There are three types of Research Design:-

1. Exploratory Research Design: - The major emphasis in exploratory

Research Design is on discovery of ideas and insights.

2. Descriptive Research Design: - The descriptive Research Design

study is typically concerned with determining the frequency with

which something occurs or the relationship between two variables.

3. Causal Research Design: - A Causal Research Design is concerned

with determining cause and effect relationship.

4. For the study, Descriptive Research Design was undertaken as it

draws the opinion of employees/workers on specific aspect

Why pension plans offer the best retirement solutions Mohan Shahs father Prakash retired last year from Central Bank of India.

During his 29 years of service, he failed to opt for any pension scheme. And

being the sole earning member, Prakash retired with little savings. The little

that was there in his bank account was used up last December to pay for his

second daughters wedding.

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Today, he and his wife live with Mohan and are forced to rely on their

children for financial support. But for how long? Having turned 60 last

month, and looking at the mortality tables, Mohans father has probably

another 15 to 20 years left. Added to daily expenses, in January this year,

Mohans mother was diagnosed with diabetes and has to take insulin

regularly.

This means medical expenses for Mohan. Health and medical costs have

increased manifold and will quadruple over the next 10 years. This is an

additional expense for Mohan, as doctors visits become a regular feature as

one ages. Its not just medical costs alon e. Even daily expenses like food,

petrol and transportation end up costing more. A kilo of potatoes used to

cost just Rs 1.50 some time back. Today, a kilo costs Rs 8, and if inflation

rises at the annual rate of five to six per cent, 10 years from now potatoes

could cost Rs 43 a kilo! Petrol prices have equally shot up from Rs 17 a litre

10 years back to Rs 34-35 plus today, and could well rise to Rs 60 a litre 10

years from now. Enter pension, to reduce tension. Pension is all about

insuring oneself financially against the risk of living too long. It is about

fund management, long-term savings, protection and annuity income.

Moreover, investment in pension plans offers taxpayers a direct tax

deduction of Rs 10,000 from ones taxable income under Section 80 CCC

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(1) of the Income Tax Act. Unlike Section 88, the tax benefits under this

section are available to persons in all income brackets. Even for those

eligible to save tax under Section 88, the saving on an investment of Rs

10,000 is higher in the case of pension plans. The tax saved is Rs 3,150,

whereas under Section 88 a Rs 10,000 investment yields a maximum tax

rebate of Rs 2,000. However, one doesnt invest in pension schemes only for

tax savings. Considering the high cost of living and falling interest rates,

people ought to be saving far more than Rs 10,000 a year if they wish to

retain their present lifestyles. Take the Life Insurance Corporations (LIC)

Jeevan Suraksha pension plan. A 30-year-old paying Rs 10,238 every year

for a term of 20 years will be entitled to a pension of just Rs 14,200 per

month on retiring at the age of 50. LIC assumes an annual bonus rate of Rs

65 per Rs 1,000. This is purely an illustration, which could vary depending

on interest rates and investment strategies. A pension plan also allows a

policyholder to withdraw a certain percentage of the accumulated funds on

retirement to take care of some large expenses. Most of the private players -

ICICI Prudential, HDFC Standard Life, Tata AIG and Aviva Life - have

followed in the L ICs footsteps and offer a maximum withdrawal of 25 per

cent of the accumulated corpus at the time of retirement. OM Kotak

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Mahindra Life is the only one to offer a maximum withdrawal of 33 per cent

of the accumulated amount.

Should you not opt to withdraw a part of the accumulated corpus, you can

expect a monthly pension of Rs 12,388 based on LICs current indicative

calculations. A lot, however, depends on interest rates at the point of

retirement. A warning is in order, though: The incentive to save more than

Rs 10,000 is low because the balance has to come from post-tax income. On

the other hand, if you do save more and entitle yourself to higher pension,

that pension income will be taxed again as normal income. So, its a double

whammy double taxation of pension savings and pension income. Yet,

Mohan, learning from his fathers failure to save for post -retirement life,

signed his first pay cheque away towards the purchase of an ICICI

Prudential pension plan. He plans to religiously put aside Rs 20,000 every

year to get himself a worthwhile pension and in the hope that the

government will increase the tax deduction in the years to come. Meanwhile,

his life gets covered during the savings/ accumulation period. ICICI

Prudential also offers a health cover and guarantees capital protection during

the accumulation phase. To be sure, pension plans are not the only available

instruments in the market today for long-term savings. During the

accumulation phase, one could opt for mutual funds, the governments tax -

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free bonds, the public provident fund, or government securities. But there is

no tax exemption or inherent life cover in mutual funds; in the case of PPF,

you get section 88 benefits for incomes up to Rs 5 lakh, but not above. The

interest is, however, tax-free. Some infrastructure bonds also offer Section

88 benefits.

HOW MUCH PENSION?

In retirement planning, one needs to calculate backward to figure out how

much one should invest - with or without tax breaks. First, ask yourself

when you wish to retire. Then, what kind of income do you need to maintain

your present standard of living. If you think you need Rs 10,000 a month

(pre-tax) if you were to retire today, assuming a six per cent inflation rate,

you would need Rs 17,908 after 10 years, Rs 23,965 after 15, and Rs 32,071

after 20 years. If you assume a more benign inflation rate of, say, four per

cent, the required amounts would be Rs 14,802, Rs 18,009 and Rs 21,911

after 10, 15 and 20 years of saving. You will then need to talk to your

pension plan advisor and figure out what you need to put away every year to

achieve your targeted pension income. We have to, of course, assume that

taxation will be indexed to inflation - in which case your post-tax income 20

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