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CONSUMER BEHAVIOUR REGARDING INSURANCE AND INVESTMENT PROPOSALS

RESEARCH PROJECT REPORTA COMPARATIVE STUDY OF VARIOUS INSURANCEPRODUCTS OF DIFFERENT COMPANIESSUBMITTED FOR THE PARTIAL FULFILLMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

OFPunjab Technical University SUBMITTED BY

ANJU THAMMAN

ROLL NO. 7123223382

MBA IV SEMESTER

UNDER THE SUPERVISION OF

Ms. KAVITA CHADHA

(SENIOR LECTURER)

Chandigarh Business School, Landran, Mohali

(2007-09)\

Certificate of Supervisor

This is to certify that Ms. ANJU THAMMAN Roll No.7123223382 has completed the research project titled A COMPARATIVE STUDY OF INSURANCE PRODUCTS OF VARIOUS COMPANIES under my supervision in partial fulfillment of the MASTER OF BUSINESS ADMINISTRATION degree of Punjab Technical UniversitySupervisors signature:

------------------------

Miss.KAVITA CHADHA(Senior Lecturer)Date:

Place:

Forwarded for evaluation by the Dean:

(Deans Signature)

Seal of the Dean

Declaration

I, hereby declare that the research project report titled A COMPARATIVE STUDY OF INSURANCE PRODUCTS OF VARIOUS COMPANIES is my own original research work and this report has not been submitted to any University/Institute for the award of any professional degree or diploma.

(ANJU THAMMAN)

M.B.A (IV Semester)Chandigarh Business SchoolDate:Place:

ACKNOWLEDGEMENTIf words are considered as symbol of approval and taken of appreciation then let the words play the heralding role of expressing my sincerest gratitude and thanks

I take this opportunity to express my deep gratitude to all those who helped me in the completion of this study. This work is the result of direct and indirect cooperation of various persons to whom, I wish to express my appreciation and gratitude.

A Project usually falls short of its expectation unless guided by the right person at the right time. Success of a project is an outcome of sincere efforts, channeled in the right direction, efficient supervision and the most valuable professional guidance.

It is my proud prerogative to place on record my sincere thanks toMr.( GURPREET SINGH) (Branch Manager) who guided me through the training. I would like to thank them for their guidance. My special thanks to mentor who gave me full cooperation in completing the project to the best of their knowledge and on time

My special thanks to the management of the company who not only allowed me to have my training here in the company but also provided the necessary stimulus and encouragement in accomplishing my task

Last but not the least I would like to thank GOD for bestowing me with enough courage and determination to complete this project and my family members for all support and motivation.

PREFACEManagement courses without practical training are incomplete. Theoretical studies in the classrooms are not sufficient to understand various activities, problems, and happenings in any industry. Practical training is therefore a process of learning, a sequence of programmed behaviour, application of knowledge and awareness of the rules and procedures.Risks and uncertainties are part of lifes great adventure- accidents, illness, theft, natural disaster they are all built into working of the universe waiting to happen. So far that there is a solution - insurance.

To overcome these risks and uncertainties this project describes about various policies and schemes of different insurance companies. How these companies provide different benefits to policyholders. Insurance is a cooperative venture where risks and uncertainties are shared by many. Now a day a lot is being done to create awareness among the insuring public about the need and importance of the insurance in the field of a human being. In this direction IRDA has planned to create awareness through electronic and print media.

A study of life insurance describes the meaning, various policies, comparison and their analysis market prospective changing customer scenario.

Chapterisation

Index

Page No.

Certificate issued by Project Guide

/Supervisor

1

Declaration

2

Acknowledgements

3

Preface

4

1) Introductions :-

Definition

Need for Life Insurance

Role of Government

Role of Life Insurance

Evaluation of Insurance Industry in India

Future Scenario

2) Opening of Insurance Sector in India

Objectives of Liberalisation of Insurance

3) Changing Expectations of Customers

4) Major Players in Life Insurance

HDFC STANDARD LIFE

Life Insurance of India (LIC)

ICICI Prudential

5) Comparison of the products of various companies

6) Research Methodology

Research Methodology

Objectives

Limitations

7) Data Analysis and Findings

8) Conclusion Findings

Suggestions

9) Appendices Question BibliographyDifferent objectives behind conducting this project-

Identifying Target Customer.

Customer Orientation towards Features available in different insurance products.

Listing of the product preferences in various different insurance companies.

Recommendation on Market potential for insurance.

Insurance is basically risk management device. The losses to assets resulting from natural calamities like fire, flood, earthquake, accident etc. are met out of the contributed by large number of persons who are exposed to similar risks. This contribution of many is used to pay the losses suffered by unfortunate few. However the basic principle is that loss should occur as a result of natural calamities or unexpected events, which are beyond the human control. Secondly insured person should not make any gains out of insurance.

It is natural to think of insurance of physical assets such as motor car insurance or fire insurance often be forget that creator all these assets is the human being whose effort have gone along way in building up to assets. In that scene human life is a unique income generating assets. Unlike physical assets, which decrease with the passage of time, the individual become more experienced and mature as he advances in age. This raises his earning capacity and the purpose of life insurance is to protect the income to individual and provide financial security to his family, which is dependent on his income in the event of his pre-mature death. The individual also himself also needs financial security for the old age or on his becoming permanently disabled when his income will stop. Insurance also has an element of saving in certain cases.

Insurance is rupees 400 billion business in India and yet its spread in the country is relatively thin. Insurance as a concept has not being able to make headway in India. Presently LIC enjoys a monopoly in Life Insurance business while GIC enjoys it in general insurance business. There has been very little option before the customer to decide the insurer. A successful passage of the IRA bill have clear the way of private sector operators in collaboration with their overseas partners. It is likely to bring in a more professional and focused approach. More over the foreign players would bring sophisticated actuarial techniques with them, which would facilitate the insurer to effectively price the product. It is very important that the trained marketing professionals who are able to communicate specific features of the policy should sell the policy. In the next millennium all these activities would play a crucial role in the overall development and maturity of the insurance industry.A. DEFINITION GENERAL DEFINITION:-In the words of John Magee, Insurance is a plan by which large numbers ofpeople associate themselves and transfer to the shouldersof all risks that attach to individuals

B. FUNDAMENTAL DEFINITION:-In the words of D S Hansel, Insurance may be defined as a social device providing financial compensation for the effects of misfortune, the payments being made from the accumulated contributions of all participating in the scheme.C. CONTRACTUAL DEFINITION :-

In the words of justice Tidal Insurance is a contract in which a sum of money is paid to the assured as consideration of insurers incurring the risk of paying a large sum upon a given contingency.

CHARACTERISTICS OF INSURANCE

Sharing of risk

Co-operative device

Evaluation of risk

Payment on happening of special event

The amount of payment depends on the nature of losses incurred

NEED OF THE LIFE INSURANCE:-

The original, basic intention of life insurance is to provide for ones family and perhaps others in the event of death. Originally, polices were to provide for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance became more established. It was realized what a useful tool it was in a number of situations, including:1. Temporary needs/ threats :

The original purpose of Life Insurance remains an important element, namely providing for replacement of income on death etc.

2. Regular Saving :

Providing ones family and oneself, as a medium to long term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence from their family.

3. Investment :

Put simply, the building up of saving while safeguarding it from ravages of inflation. Unlike regular saving products are traditionally lump sum investments, where the individual makes are one time payment.

4. Retirement :

Provision for ones on later years has become increasingly necessary, especially in changing culture and social environment. One can buy a suitable insurance policy which will provide periodical payments in ones old age.

BENEFITS:1. It is superior to traditional saving machine

i. As well as providing a secure vehicle to build up saving etc. it provides piece of mind to the policy holder. In the event ultimately death, of say the main earner in the family, the policy will pay out guaranteed sum assured, which is likely to be significantly more then the total premiums paid. With more traditional saving vehicles, such as fixed deposits, the only return would be the amount invested plus any interested accrued.

2. It encourages saving and forces thrift:

i. Once an insurance contract has been entered into, the insured has an obligation to continue paying premiums, until the end of the term of policy, otherwise the policy will lapse. In other words, it becomes compulsory for the insure to save regularly and spend wisely. In contrast savings held in a deposit account can be accessed or stop easily.

3. It provides easy settlement and protection against creditors

i. Once a person appointed for receiving the benefits or a transfer of rights is made (assignment), a claim under the life insurance contract can be settled easily. In addition, creditors have no right to any monies by the insurer, where the policy is written under trust. Under the married womans act the money available from the policy forms a kind of trust which creditors can not claim on.

4. It can be encased and facilities borrowing:

i. Sum contracts may allow the policy can be surrendered for a cash amount, if policy holder is not in a position to pay the premium. A loan, against certain policy, can be taken for a temporary period to tide over the difficulty. Presence of life insurance policy facilitates credit for personal or commercial loans as it can be offered as collateral security.

5. Tax relief :

a. The policy holder obtains income tax rebates by paying the insurance premium. The specified form of saving which enjoys a tax rebate u/s 88 of the income tax act. Include Life Insurance premiums and contribution to a recognized PF etc.

GOVT. ROLE :

============

Govt. keen to reduce the dependency on the state via private pension provisions. They have a choice between using compulsion and incentives. Most of the govt. choose the later method. Tax relief is guaranteed in the pension plants and is extremely generous, reflecting the value that the govt. and the society and large place on the provision of retirement benefits. Tax treatments of the benefit varies by country and by benefits.

In India, the proceeds of gratuity and provident fund are tax free in the hand of the members. In UK, a certain amount of the proceeds can be taken as tax lump sum and reminder as taxable income. Benefits due on withdrawal from schemes are generally taxed unless they are transferred to another scheme or approved pension plan.

ROLE OF LIFE INSURANCE

========================

Role 1 : Life Insurance as investment

Insurance is an attractive option for investment. While most people recognize the tax hedging and tax saving potential of life insurance, many are not aware of its advantages as an investment option as well as. Insurance products yield more compared to regular investment option as this is besides the added incentives (read bonuses) offered by insurers.

You can not compare an insurance product with other investment schemes for simple reason that it offers financial protection from risks, something that is the missing in non- insurance products.

Infect, the premium you pay for a investment against risk. Thus, before comparing with other scheme, you must accept that a part of total amount invested in life insurance goes towards providing for the risk cover, while the rest is used for savings.

In life insurance, unlike non-products, you get maturity benefits on survival at the end of the term. In other words, if you take a life insurance policy for 20 years and survive the term the amount investor as premium in the policy will come back to you with added returns. In the unfortunate event of death within the tenure of the policy, the family of the deceased will receive the sum assured.

Now, let us compare insurance as an investment options. If you invest Rs. 10000/- in PPF, year money grows to Rs. 10950 at 9.5% interest over a year. But in this case, the access to your funds will be limited. One can withdraw 50% of the initial deposit only after four years.

The sane amount of Rs. 10000/- can give you an insurance cover of up to approximately Rs. 5 to 12 lacs. (Depending upon the plan, age and medical condition of life insure etc. ) And this amount can become immediately available to the nominee of the policy holder on death. Thus insurance is a unique investment avenue that delivers sound returns in addition to protection.

Role 2 : Life Insurance as Risk Cover

First and foremost, insurance is about risk cover and protection financial protection, to be more precise-to help out last once unpredictable losses. Designed to safe guard against losses suffered on account of an unforeseen events. Insurance provide you with that uniqueness sense of security that no other form of investment provides. By buying life insurance, you buy peace of mind and are prepared to face any financial demand that would hit the family incase of an untimely demise.

To provide such protection, insurance firms collect contributions for many people who face the same risk. A loss claim is paid out of the total premium collected by the insurance companies, who act as trustees to the monies.

Insurance also provides a safeguard in the case of accident or a drop in income after retirement. An accident or disability can be devastating and an insurance policy can lend timely support to the family in such time. It also comes as a great help when you retire, in case untoward incident happens during the term in the policy.

With the entry of private sector player in insurance, you have a wide range of products and services to choose from. Further, many of these can be further customized to fit individual/group specific needs considering the amount you have to pay now, its worth buying some extra sleep.

ROLE 3 : Life Insurance as Tax Planning

deductible from tax payable by a individual or Hindu undivided family. This rebate is can be availed up to a maximum of Rs 12000/- on payment of yearly premium of Rs 60000/- a year, you Insurance serves as an excellent tax saving mechanism too. The Govt. of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. U/S 88 of Income Tax Act 1961, an individual is entitled to rebate 20% on the annual premium payable on his/her life and life of his/her children or adult children. The rebate is can buy anything upward of Rs 100000/- in sum assured. This means that you get Rs 12000/- tax benefit. This rebate is deductible from the tax payable by an individual or a Hindu undivided family.

THE EVALUATION OF INSURANCE INDUSTRY IN INDIA:Life Insurance in its modern form is a western concept. The Indian insurance industry is as old as it is in other part of the world. Although life insurance business has been taking shape for the last 300 years, it came to India with the arrival of Europeans.First Life Insurance Company was established in 1818 as Oriental Insurance Company, mainly to provide for widows of Europeans. The companies that follow mainly catered to European and charged extra premium on Indian Lives. The first insurance company insuring Indian Lives at standard rates was BOMBAY MUTUAL LIFE INSURANCE COMPANY which was formed in 1870. this was also the year when 1st Insurance act was passed by the British Parliament. The years subsequent to the Swedish movement saw the emergence of several insurance companies. At the end of the year 1955 there were 245 insurance companies. All the insurance companies were nationalized in 1956 and brought under one umbrella- LIFE INSURANCE CORPORATION OF INDIA (LIC) which enjoyed a monopoly of the Life Insurance business until near the end of 2000. by enacting the IRDA act 1999, the Govt of India effectively ended LICs monopoly and opened the doors for private Insurance companies.

Collaboration of Indian Companies with Foreign Companies

Indian Company

Foreign Partner

Kotak Mahindra

Chubb

Tata Group

AIG

Sundram Finance

Winterthur

Spic

MetLife

ILFC

Cigna

Alpaca Finance

Allianz

20th Century

Canada Life

Vysa Bank

ING

Cholamandlam

Axa

SBI

Alliance Capital

HDFC

Standard Life

ICICI

Prudential

Hindustan Times

Commercial Union

IDBI

Principal

Max India

New York Life

NUMBER OF REGISTERED INSURERS IN INDIA

Type of businessPublic SectorPrivate SectorTotal

Life Insurance11516

General Insurance6915

Re- insurance1001

Total82432

NEW POLICIES ISSUED:LIFE INSURERS

Insurer2004-052005-06

Private Sector22330753871410

(34.62)(73.37)

LIC2397812331590707

(-11.09)(31.75)

Total2621119835462117

ICICI Prudential

[Company s Profile]

ICICI Prudential Life Insurance Company Pvt. Ltd. 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).

India's Number One private life insurer, ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank-one of India's foremost financial services companies-and prudential plc- a leading international financial services group headquartered in the United Kingdom. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of over 680 offices, over 235,000 advisors; and 23 banc assurance partners.

ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (And) from Fitch ratings. For three years in a row, ICICI Prudential has been votedFUTURE SCENARIO :-

Before looking in future prospectus of the insurance industry, we must take a look into its past history. The independent India started with private sector Insurance companies. These companies were nationalized by the union Govt. in 1956 to form a monopoly known as Life Insurance Corporation of India has being under public sector for over four decades till the govt. opened the insurance sector for private companies in 2000.

When the insurance Industry was nationalized, it was consider a land mark and a milestone on the way to the socialistic pattern of society that India had chosen after independence. Nationalization has lent the industry solidity and growth which is unparalleled. Forever, along with these achievements there also grew feelings of insensitivity to the needs of the market, traditions in adoption of modern practices to upgrades technical skills coupled with a scene of lethargy which probably led to a feeling amongst that the insurance industry was not fully responsive to customers needs.

The life insurance corporation of India has not succeeded in extending the insurance cover to all the needy people of the country due to various reasons. LIC could not insure very fast growth of insurance in India even in a long period extending over four decades. Hence the penetration of insurance is very low in India. The following indicates as explained and support this contention:1. While per capita insurance premium in developed country is high, it is quite low in India. For instance, per capital insurance premium in India in 1999 was only $8 while it was $4800 for Japan $1000 for Republic of Korea, $887 for Singapore, $823 for Hong-Kong and $144 for Malaysia.

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

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

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

OPENING OF INSURANCE SECTOR IN INDIA

The union government of India decided to open the insurance sector to make it more dynamic and customer friendly.

OBJECTIVE OF LIBERALIZATION OF INSURANCE :-

The Main objective for the opening up the Insurance sector to the private insures as under:-

To provide better coverage to the India citizens.

To augment the flow of long term financial resources to finance the growth of infrastructure.

Indian Insurance industry has ten new entrants in year 2000-2001 in Life Insurance sector.

S.NoReg NoDate of RegName of Company

1

10123.10.2000HDFC Standard Life Insurance CO. Ltd

2104

15.11.2000Max New York Life Insurance CO. Ltd

3105

24.11.2000ICICI Prudential Life Insurance CO. Ltd

4107

10.01.2001OM Kotak Mahindra Life Insurance CO Ltd

5109

31.01.2001Birla Sun Life Insurance CO. Ltd

6110

12.02.2001Tata AIG Life Insurance CO. Ltd

7111

20.03.2001SBI Life Insurance CO. Ltd

8114

02.08.2001ING Vyasa Life Insurance CO. Ltd

9116

03.08.2001Allianz Bajaj Life Insurance CO. Ltd

1011706.08.2001

MetLife India Life Insurance CO. Ltd

Insurance Industry in the year 2000 has one new entrant in Life Insurance Business name :-

S.NoReg NoDate of Reg.Name of Company

112103.01.2002AMPSANMAR Assurance Co. ltd

CHANGING CUSTOMER EXPECTATIONS IN INSURANCE SECTOR PRE TO POST LIBERALISATION

RESEARCH OBJECTIVE AND METHODOLOGY

OBJECTIVE :-

To provide insight into customers experiences prior to recent liberalization, mapping changes in expectations after liberalization and perceived performance of insurance players vis a vis expectations.1. To know about the requirement habit of the people in the region of Patiala.

2. To know about the views of people regarding various Insurance Companies.

3. Position of the Insurance companies in the mind of the consumer

4. To know about the competition regarding various Insurance Companies.

5. To find out the position of Insurance Companies in the market.

LIMITATIONS:-

1. Most of the people are not interested to give the right data.

2. Some people dont know about the private Companies.

3. A span of 6 weeks training was too short for survey.

RESEARCH APPROACH :-

In depth qualitative study to capture indicative trends which can be strictly validated, if required :

Geographical coverage : Delhi, Mumbai, kolkata, Hyderabad and BangaloreRESEARCH DESIGN :-

RESPONDENT SEGMENT

Life Policy Holders:-

Old Customers: Taken Insurance prior to liberalization only.

Evolved Customer: Taken insurance both in per and post liberalization.

New customers: Taken Insurance in post liberalization only.

Non Policy holders (Life)

RESEARCH DESIGNRespondentOld CustomerEvolvedNew CustomerTotal

Life Policy

473023126

Sources of information on Insurance and Product Awareness

Friend, colleagues, relatives and agent Additionally from direct

Low awareness of several Insurance mailers, customer meets

Products due to poor communication Internet and media.

in spite of availability. Rising level of awareness of new product of both LIC and private Company

CHOICE OF FIRST POLICY

Money Back

60%

Money Back

42%

Endowment

40%

Endowment

48%

Whole Life

0%

Whole Life

10%

Approach of the Agent and Consumers Experience

Approach of the agentinformal

Approach more professional

And through referral

something aggregative private co..

Long term family type of Proactive in contacting

Relationship prospectus directly often has to start from selling concept of insurance rather than product

Often selling insurance asconducts financial health check

Commodity up and then offers suitable products/ solution.

Better communication and presenter

Handless Larger number of queries.

AWARENESS AND CONSIDERATION OF PRIVATE PLAYERS

Private companies Overall SEC A SEC B SEC C

Awareness 73% 93% 83% 50%

Consideration 35 % 65% 30% 10%

AWARENESS OF NEW PRODUCTS-LIFE

Only some customers have mentioned new products.

Products with multiply riders medical, accident, waiver of premium rider

Through most SEC A and SEC B customers have generally heard of liberalization but unable to provide any details.

Flexi premium plans-products with singly premium and shot out time premium option

PURCHASE PROCESS : LIFE

Pre Liberalization Post Liberalization

Role of Agent and Customers Experience

Medical examination: in several cases details filled by medical agent medical examination very perfunctory some time no formula examination.

Purchase experience with agent reasonably satisfactory, but often agent not in touch later.Medical examination : Both LIC and private company

Customers examination arranged by agent.

Experience regular contact

Post purchase

Product Offering

Limited Products choices and less flexible products

Choice often determined by agent push

Product with multiple riders-medical, accident, waiver of premium rider Pension/retirement benefit plans flexible premium, saving and security plans.

Discount offering practices

No. of customers getting discount : 50%

Rate of discount: 25%-50% of first year premiumCustomers getting discount 33% (Delhi)

Rate of discount : More less plans

Policy Delivery

Mode

Registered posts for LIC hand

delivered by agent 23% case

Time taken

Upto week 0%

One month 65%

> 1 month 35%

Mode

Registered for LIC

Courier for private companies.

In both cases, policy comes in attractive. Protective plastic jacket

Time taken LIC Private Co

Up to week 5% 85%

One month 77% 15%

>1 month 18% 0%

CLAIMS SETTLEMENT EXPERIENCE-LIFE (LIC ONLY SO FAR)

FINAL MATURITY CLAIM :-

Involvement of agent very low (35%)

Payment mostly within 15 days, but 1 to 3 month in some situations such as change of survivors address etc.

Most customers are satisfied with the overall process.

DEATH CLAIM :-

Involvement of agent low though considered critical by nominee

Payment takes 3 to 6 months in normal cases, in disputed cases 9 to 12 months

Process very cumbersome and people faced much difficulty.

CHANGING CUSTOMER EXPECTATIONS LIFE

TIME EXPECTATIONS: First premium receipt (FPR ) delivery to customers in two days.

Policy document should be delivered within 7 days from FPR.

Premium notice should arrive 30 days before due date.

Final maturity payment should reach within 10 days of maturity date.

Death claim should be settled in 39 days.

EXPECTATIONS FROM AGENT:-

==========================

Should give information on all products and not push high commission products only.

Should maintain regular contact wiyh client to give information on new products.

Premium payment reminder should come from agent also.

Should collect payment, deposit and handover receipt.

Should be actively involved in Death claims settlement and Lapsed Policy Revival.

CHANGING CUSTOMER EXPECTATIONS LIFE

EXPECTATIONS FROM THE COMPANY:

Premium notice should be settled regularly.

Premium payment reminder should be sent through SMS and E-Mail.

Cheque payment at bank, internet and special collection centre ( Om Kotak in Mumbai )

Payment through credit cards.

Facility of purchasing policy through more channels.

Flexible/wider range of products.

Focus on customer education.

Fine/prints in detail, correct disclosures.

Transparent and fair dealings.

Information on new products/services through call centers, internet, mailers, new agent customer meets. Set up toll free help line.

Where customer is cancelled is deposited should be entitled to be the commission thereof.

ROLE OF IRDA: Educate public on regulatory safeguards, investments guidelines and plough back of profits (several people have expressed concern about security of their money, credibility of private insurance company investment of funds in foreign markets.

Inform public on social and rural obligation of private players ( several people believe that only LIC was responsible for insuring the poor.

POST PURCHASE PROCESS : LIFE

Pre Liberalization

Post Liberalization

Premium Notice Intimation from company/reminder from agent

* Cash43%

* Cash

41%

* Cheque57%

* Cheque

49%

* Credit Card10%

* No case of payment through internet

was observed, due to low awareness

and security apprehensions.

* Includes deposits at private company

Collection centers.

WHO DEPOSITS PREMIUM?* Self

44%

* Self

37%

* Agent

49%

* Agent

49%

* Salary saving Scheme7%

* Salary saving Scheme14%

includes relatives & friends

includes relatives & friends

CORRESPONDENCE (Other than premium notice) FROM COMPANY/AGENT Generally no correspondence from either company or agent except for late premium payment reminder from company

Agent maintained informal contact with close customers Mailers from both private companies and LIC on product and services, greetings cards on birthdays, anniversary and new product.

Phone calls from private company call centers.

Agent in regular contact for offer new product.

DELAY IN PREMIUM PAYMENT

Incidence of delay high 30%

( due to irregular receipt of premium notice from company/reminder from agent ) Incidence of delay high 30%

( due to irregular receipt of premium notice from company/reminder from agent )

CHANGING TRENDS IN SAVINGS PATTERN

Pre LiberalizationPost Liberalization

Saving Instrument % of RespondentsSaving Instrument % of Respondents

Insurance 23%

Bank Deposit 28%

PPF 19%

NSC 12%

Share 7%

Post Office 7%

Bonds 0

Gold 4%Insurance 33%

Bank Deposit 44%

PPF 8%

NSC 0

Share 3%

Post Office 3%

Bonds 9%

Gold 0%

Total 100Total 100

When the respondents were asked where they would invest their extra income, if any, the top respondents were recorded as above.

COMPANY PROFILE

HDFCHOUSING DEVELOPMENT FINANCE CORPORATION LTD.==========================================================

Founded in 1977, HDFC is today the market leader in housing finance in India and has extended financial assistance to more than 15 lacs homes. HDFC has more than 110 offices in India presently. It has also one international office in Dubai and 3 more services associate in Kuwait, Qatar and sultanate of OMAN. HDFCs assets base amount to over 15,000 crore. Its financial strength is reflected in highest safety rating of FAAA and MAAA awarded by CRISIL and ICRA two of Indias leading credit rating agency respectively, for the last 6 year consecutively.It has a depositor base of over 11 lacs customer and a deposit agents force of over 46,000 of the total deposit, 73% are sourced from individual and trust depositors, which demonstrates the tremendous confidence that retail investors have in the company.

HDFC- promoted companies have emerged to meet the investors and customers needs. HDFC bank for commercial banking, HDFC Mutual Fund for mutual fund products, to be followed very shortly by HDFC Standard Life Insurance Company for the life insurance and pension products.

Being an institution that is strongly committed to the highest standards of quality and excellence, HDFC has won several accolades in the past few years. One such award is the Ramakrishna Bajaj National Quality Award for the year 1999. this award was instituted to award recognition to Indian companies for business excellence and quality achievement. HDFC is the only company so far to receive this award in the service category.

STANDARD LIFE ASSURANCE COMPANY ( SLAC ) :

Founded in 1952, Standard Life has been at the for front of the UK Insurance industry for 176 years by combining sound financial judgment with integrity and reliability. The kingdom, Ireland, Spain, Germany and some more with representative office in Hong-Kong and China.

One of the most recent successes was the launch of standard Life Bank on 1st January 1998. in less than 20 months, the bank collected Rs. 28,000 crore in deposit. The introduction of its innovative mortgage product in Jan. 1999, had an immediate impact on the UK market, accounting for 11% of all new lending within the first operational tear. The current loans outstanding amount to Rs. 43,300 crore.

Standard Life has total assets of Rs. 55,000 crore and new premium income last year 33,000 crore. Its UK investment portfolio account for approximately 2% of all shares listed in the London Stock Exchange. Its one of the new Insurance companies in the world to receive AAA rating from two of the leading international credit rating agencies. Moodys and Standards And Poors. The latter described Standard Lifes ability to meet its claim obligations as overwhelming under a variety of economic conditions.

Not surprisingly, Standard Life is rated as one of the few strongest companies in the world, in financial terms. The quality and value standard Life brings to this venture are immense. The companys reputation in UK market remains unrivalled. Besides being voted Company of the ears for overall service, for the third consecutive year. Standard Life was recently voted Company f the decade by independent brokers.

THE PARTNERSHIPS :-HDFC and Standard Life first commenced discussions about possible joint venture, to enter the life Insurance market, in Jan. 1995. it was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In oct. 1995 the companies signed a 3 year joint venture agreement.

Around this time standard Life purchased a 5% stake in HDFC, further strengthening the relationship.

A small project team was set up in UK and India and set about preparatory work. Among other things, the team conducted market research, looked at possible information technology, documented high level business process maps and set about preparing the first project plan.

The next three years were filled uncertainty, due to change in Govt. and both ongoing delays in getting the insurance bill passed in parliament. Despite this both companies remained firmly committed to venture.

In Oct. 1998, the joint venture agreement was renewed and additional resources made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC ) Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India.

One of many success stories over the last few tears has been the actuarial student program. The program was designed to identify high caliber individuals who would be sponsored by Standard Life to study for their actuarial qualification in the UK.

The new company has 1 Indian actuary and 5 actuarial students in the team, with a further 2 students undergoing training in the UK. Both parents companies strongly believe the program will benefit the new company in the years to come and are firmly committed to it. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in Jan. 2000 and expect team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC bank.In further development standard Life to participate in the Assets Management Company promoted by HDFC to enter the mutual fund market.

The Mutual Fund market was launched on 20th July 2000 and one on the 10th Nov. 2000 assets under the management reached Rs. 1,063 crores. The company was incorporated on 14th Aug 2000 under the name of HDFC Standard Life Insurance Company Limited.

The ambition of the company from as far back as Oct. 1995 was to be first private company to reenter the Life Insurance market in India. On 23rd of Oct. 2000 . this ambition was realized when HDFC standard Life Insurance Company Limited were only Life company to be grated a certificate of registration.

HDFC are main shareholders in HDFC standard Life Insurance Company Limited with 81.4% while standard Life own 18.6 given Standard Lifes existing investment in the HDFC Group, this is max. Investment allowed under current regulations.

MISSION AND VALUES OF HDFC STANDARD LIFE :-

MISSION :-

HDFC Standard Life have clearly on several occasions that they aim to be the top new Life Insurance company un the market.

This does not just mean being the largest or the moist productive company in the market, rather it is a combination of several things. :

Professionalism Value of money

Customer services

Innovative product

Use of technology

Market share

As mentioned earlier the aim is to be the yardstick against which all other life insurance companies are measured.

VALUES :-

The core value of the company are Security , trust and Innovation .

SECURITY :-

HDFC Standard Life will invest their policy holders money prudently in order to achieve the aim of long term stable growth.

TRUST :-

HDFC Standard Lifes are committed to development products for the specific needs of the Indian customer. The company will also use the latest technology to ensure they develop the highest quality service to both their customers and their consultants.

PRODUCTS1. TERM ASSURANCE PLAN

2. ENDOWMENT ASSURANCE PLAN

3. MONEY BACK PLAN

4. CHILDRENS PLAN

5. PERSONAL PENSION PLAN

6. SINGLE PREMIUM WHOLE OF LIFE INSURANCE PLAN

7. UNIT LINKED PENSION PLAN

8. UNIT LINKED ENDOWMENT PLAN

Protection against uncertainties of life

TERM ASSURANCE PLAN :-

=====================

Under this plan, a sum assures is payable in case of death of the life assure during the tem of the contract. One can choose the lump sum that would replace the income lost to ones family in the unfortunate event of ones death. Since this non participating (without profits) plan is a pure risk cover plan, no benefits are payable on the survival to the end of the term of the policy.

Minimum age 18 years.

Maximum age 60 years.

TERMS TO AVAIL PLAN :

20,25 and 30 years that plan can cover till 65 years.

Advantage of this plan :-

=================

On maturity, you would receive the sum assure plus the bonuses addition. Bonuses addition is the amount in the accumulation account. In access of the sum assure

Cover you for a term (years) of your choice.

At the same time does not burden you with the liability to pay premiums for that entire term.

Entitled you to bonus addition for the entire term of the plant.

Premium to be paid for the full term of the plan.

You have the choice of paying you premium either in yearly , half yearly and quarterly modes or of paying a single one time premium, depending on your conveniences.ENDOWMENT PLAN :-

=================

It is participating ( with profits ) insurance plan that offers the following features.

Provides financial support to the family by way of a lump sum payment in case of the unfortunate death of the life assured within a term of policy.

Provides a lump sum payments to the life assured on the survival up to maturity.

The lump sum mentioned is the basic sum assured plus any bonus additions.



TERM TO AVAIL LOAN :-

====================

Minimum term 10 years.

Maximum term 30 years.

Maximum age that plan can cover till 75 years.

ADVANTAGE OF THIS PLAN :-

========================

On maturity, you would receive the sum assures plus the bonuses addition. Bonuses addition is the amount in the accumulation account. In access of the sum assure

Cover you for a term (years) of your choice.

At the same time does not burden you with the liability to pay premiums for that entire term.

Entitled you to bonus addition for the entire term of the plant.

You have the choice of paying you premium either in yearly, half yearly and quarterly modes or of paying a single one time premium, depending on your conveniences.

Endowment assurance plan offers the tax benefits u/s 88, section 80D and section 10 ( 10 D ) of the income tax act are applicable. Applicable to premium paid for CI and WOP.

MONEY BACK PLAN :-

=================

It is participating (with profits) plan. That offers the following features :-

Payment of cash lump sum, each of which is a proportionate of the basic sum as assured, at five years intervals during the term of policy.

On survivals up to maturity, a payment equal to the basic sum assured plus any bonus addition less the cash lump sum paid earlier is provided.

In case of the unfortunate death of the life assure within the term policy , the basic sum assure plus any bonus addition is provided.

This is over and above the earlier payouts.

Term policy termNo. of years from policy date

510152025

10

15

20

25

3040%

30%

25%

20%

15%30%

25%

20%

15%25%

20%

15%20%

15%15%



TERM TO AVAIL PLAN :-

===================

Minimum term 10 tears

Maximum age 30 tears

Maximum age that plan can cover till 75 years.

Advantages of this plan :-

==================

The plan not only covers your life but provides you with a survive benefit payout every five years.

In the fortunate event of the death of life insure, the beneficiary would receive the death benefit.

On maturity, you would receive the sum of survival benefits, bonus addition and guaranteed addition.

You have the choice of paying your premium either in yearly, half yearly or quarterly modes, depending upon your conveniences.

Money back plan offers the tax benefits u/s 88, sec 80D and sec 10 ( 10D ) of the income tax act are applicable. Applicable to premium paid for CI and WOP.

CHILDEREN PLAN :-

================

Childrens flag is designed to provide a lump sum to the child at maturity it also provides financial security to the child in the future , even in the case of insured parents unfortunate death during the policy term. Children plan will receive simple reversionary bonuses, which are usually added annually. This is a flexible plan with three option for you to choose from, depending on your requirements.. the details of these options are explained in the next section.

OptionOn the death of the insured person during the policy termOn maturity

Maturity benefitFuture premiums waived and the policy continued till maturitySum assured + bonuses

Accelerated benefit planSum assured + bonus paid and the policy stopsOn the survivals of the insurance. Parent of the maturity date

Sum assured + bonus paid

Double benefit planSum assured paid, future premium waived and the continueSum assured + bonuses paid

Minimum age 18 years

Maximum age 60 years


Minimum term 10 years

Maximum term 25 years

Maximum age that plan can cover till 75 years

ADVANTAGE OF THIS PLAN :-

========================

On maturity you would receive the sum assured plus the bonuses addition.

The automatic cover maintenance facility ensures the policy remains enforces even if you miss premium payments. This facility is available after the first three years of the term.

You can take a loan against this plan; after policy has been enforce at least 3 years.

You can have the option of paying premiums quarterly, half yearly or yearly.

Money back plan offers the tax benefits u/s 88, sec 88D and section10 ( 10 D ) of the income tax act are applicable . Applicable to premium paid for CI and WOP.

PERSONAL PENSION PLAN :-

=======================

This participating (with profits) plan is basically a saving contract, which is designed to provide and income for life fro retirement. It does this by accumulating in national lump sum on retirement, comprising of sum assured plus any attaching bonus. Subject to the prevailing regulations, part of these lump sum can be taken in form of cash and the rest converted to an annuity at the rate offered by HDFC Standard Life. Alternatively if it permitted by the prevailing regulations notional lump sum can be used to by and annuity with any other insurance company who will accept such business.

On earlier death after the first year, for regular premium policies all premium paid to date will return with compounded interest rate calculated @ 8% per annum, subject to a maximum of the sum assured plus bonuses declare to date. For single premiums, it is sum assured plus bonuses declare to date. Normally we will declare a reversionary bonus once a year , once added , it can not be reduced reversionary will take the form of a single addition to your policy benefits. In addition, on maturity a terminal bonus might be payable. On death an interim business, reflecting the period since the last addition of reversionary bonus might also be payable term

Term101520

30n/an/a4309

35n/a60984327

40957761774357

Minimum age 18 years



===================

In case of death the family will receive the sum assured plus bonuses.

You can surrender the policy at any time. If premium have been paid continuously for at least 3 years, surrender value will be subjected to be guaranteed minimum.

You have the choice of paying your premium either in yearly, half yearly or quarterly modes, depending upon your conveniences.

Money back plan offers the tax benefits u/s 88, sec 88D and section10 ( 10 D ) of the income tax act are applicable . Applicable to premium paid for CI and WOP.

SINGLE PREMIUM WHOLE OF LIFE INSURANCE :-

Single premium whole of life insurance plan is well suited to meet your long term investment needs. This is participating (with profit) plan. Your money will be invested in your with profit fund. The fund aims to provide secure and stable long term growth. Normally, you will declare a compound reversionary bonus for your policy every year and add it to your policy on its anniversary. In addition, on death, surrender or on the guaranteed dates, a terminal bonus is payable. You pay us single premium and the policy will pay you a lump sum.



You can buy the product on a single life basis

Minimum sum assured 25000

Maximum sum assured 500000

Premium : Rs 950 per thousand of sum assured


==================

Flexibility of this term :-

Even after choosing your policy, you can decide on the policy. For 4 weeks after any one of the 10th, 15th, 20th and subsequence 5 year anniversaries 5 year anniversaries you can choose to receive the sum assured plus any attaching, in full. Once the money has been received, your policy will cease.

Surrender Policy :-

You can terminate the policy any time, after it has been force at least 6 month, and receive a surrender value

In case of unfortunate death :-

Your nominee gets the sum assured squared by your premium, plus any attaching bonus.

No medical requirements :-

We do not require you to undergo any medical test for this plan.

GENERAL BENEFITS :-

PREMIUM WAIVER BENEFIT :-

For a policy taken on the life of a child (children policies jeewan Kishore, Jeewan sukanya, Jeewan balya and children money back policy) the premium is paid by the proposer. Under these polices the proposers life is not covered. It means if proposer dies before maturity of the policy, no money becomes payable to the family. On death of the proposer, the family will loose the income of the proposer. In addition to this problem the family has to continue the payment of premium. To avoid this problem, the premium waiver benefit can be opted for, by the proposer. Under this benefit, if the proposer dies before maturity of the policy, future premium are waived future premium not to be paid by the other family members. The premium waiver benefit may be obtained by paying some extra premium depending upon the age of the policy holder. This extra premium is calculated per 100 rupee of basic premium per thousand.

. Tax BenefitsINCOME TAX SECTIONGROSS ANNUAL SALARYHOW MUCH TAX CAN YOU SAVE?HDFC STANDARD LIFE PLANS

Sec. 80C

Across All income Slabs.

Upto Rs. 33,990 saved on investment of Rs. 1,00,000.

All the life insurance plans.

Sec. 80 CCC

Across all income slabs.

Upto Rs. 33,990 saved on Investment of Rs.1,00,000.

All the pension plans.

Sec. 80 D*

Across all income slabs.

Upto Rs. 3,399 saved on Investment of Rs. 10,000.

All the health insurance riders available with the conventional plans.

TOTAL SAVINGS POSSIBLE **

Rs. 37,389Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male with gross annual income exceeding Rs. 10,00,000.

Sec. 10 (10)D

Under Sec. 10(10D), the benefits you receive are completely tax-free, subject to the conditions laid down therein.

* Applicable to premiums paid for Critical Illness Benefit, Accelerated Sum Assured and Waiver of Premium Benefit.** These calculations are illustrative and based on our understanding of current tax legislations, which are subject to change.Please contact your tax consultant for exact calculation of your tax liabilities.

Pie Chart of market share of private life insurance companies

PROFILEOBJECTIVES :-

Spread Life Insurance much more widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at responsible cost.

Maximum mobilization of peoples savings by making insurance-linked savings adequately attractive.

Bear in mind, in the investment of funds, the primary obligation to its policy holders, whose money it holds in trust, without losing sight of the interest of the community as whole, keeping in view national priorities and obligation of attractive return.

Conduct business with almost and with the full realization that the money belongs to the policy holders.Act as trustees of the insured public in their individual and collective capacities.

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 achievement of corporate objective.

VISION:A Tran-nationally competitive financial conglomerate of Significance to society & Pride of IndiaMISSION :-

Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development

PRODUCTS :-

1. Term Insurance Plan

2. Endowment Plan

3. Money Back Plan

4. Jeevan Mitra Plan

5. Jeevan Sathi Plan6. Jeevan Surbhi Plan

7. Children Plan

a. Bal Vidya

b. Jeevan Chhaya

c. Children Money Back

TERM INSURANCE PLAN :-

Term insurance plan is a pure risk product that aims to cover your life at a nominal cost. You may want to take this plan to cover your outstanding debts like a mortgage, Home Loan etc. Since this is a pure risk cover product, there is no maturity benefits payable on survival. This is non participating plan.

Availability of Plan :-

Minimum Age of 12 Years

Maximum Age of 60 YearsTerm to Avail Plan :-

Minimum Term 5 years

Maximum Term 55 years

Maximum Age that plan cover 70 years

Advantages of this Plan :-

It is low cost insurance plan

You can choose between a regular premium payment option or a single premium payment option.

In case you forget to pay your premium by due date, you are entitled to a grace period of 30 days from the date of unpaid premiums.

In case of financial emergency, you have the option to surrender the policy provided you have taken the single premium payment option.

ENDOWMENT PLAN

=================

Endowment plan is a protection plan that covers your life and at the sane time ensures that your money does not lie idle. It invests a portion of your premium is financial instruments and ensures a considerable growth in saving. This is a participating plan (With Profits). This is most popular plan which helps fulfilling many long terms and short term financial needs.

Availability of the plan :

==================


Maximum age 65 years.Term to Avail plan :

Minimum term 5 years.

Maximum term 55 years.

Maximum age that the plan cover 75 year.

Advantage of this plan :-==================

On maturity, you would receive the sum assure plus the bonuses addition. Bonuses addition is the amount in the accumulation account, in access of the sum assure.

Cover for a term (years ) of your choice.

At the same time does not burden you with the liability to pay premiums for that term.

Entitled you to bonus addition for the entire term of the plan.

For age at entry 61 to 65 years, minimum sum assured is Rs. 250000/- and proposal has to be refereed to divisional officer.

Premium to be paid for the full policy term or policy holders death, which ever is earlier.

MONEY BACK PLAN:-

=================

The money back plan not only covers your life, it also assure you a certain percent of the sum assure as cash payment at regular intervals of every five years. It is a saving plan with the added advantage of life cover and regular cash inflow. This plan is ideal for planning special movement like a wedding, your child education or purchase of an asset etc. this is a participating plan (with profits).

How old does the child have to be to avail this plan?



Term to Avail Plan :

20,25 and 30 years for regular premium.

Maximum age that plan will cover till 70 years.

Advantage of this plan :

=================

The plan not only cover your life but also provides you with a survives benefit payout every five years.

In case of death before the policy the policy term ends, full sum assure plus accumulated bonuses is given to the nominee. The survival benefit already paid, if any, is not deducted in case of death claim.

On maturity, you would receive the sum of the survivals benefit, bonus addition and guarantee addition.

Benefits on maturity :-

On maturity, you would receive the sum of the survivals benefit, bonus addition and guaranteed addition. The table below in illustrates the survival benefit for Rs. 1000/- of sum assure.

Survival benefits payout for every Rs. 1000/- sum assured.

Payout (in rupees) .

5th years, 10th years, 15th years, 20th years, 25th years

15 years plan

Survivals benefit 250, 250, 500

Guaranteed addition 200

20 years plan

Survivals benefits 200, 200, 200, 400

Guaranteed addition 300

JIVAN MITRA POLICY :-

====================

Jivan Mitra plan is a protection plan that covers your life and at the same time assures that your money does not lie idle. It is most popular plan of LIC. This plan is best suited for people who are insurance oriented and also want to provide a big sum insurance protection to their family, in case of their unfortunate death. This plan is most preferred by traveling persons like sales representatives, marketing executives, medical representatives.

Availability of the Plan :-

=================

Minimum Age 18 years

Maximum Age 50 years

Term to Avail plan :-


Maximum age 30Years

Maximum Age that Plan cover is 70 years.

Advantages of this Plan:-

==================

On maturity, basic sum assured plus bonus is given.

In case of death three times of sum assured plus bonus is given.

In case of accidental death, four times of sum assured plus bonus is given, provided policy was covered for accident benefit.

The returns of the policy will totally tax free U/s 88.

JIWAN SATHI

============

Jiwan Sathi plan is most suitable for newly married couple. It covers the life risk of both under the single policy. This policy is very economical and affordable. It is wise to take one Jiwan Sathi, instead of investing in two different policies individually. This policy is issued only to working couple or wife should be an income tax assessed. For sum assured 50000 and less, wife need not to be earning person. Age taken as mean of both.

Availability of the Plan :-

Minimum Age 20 years




Maximum age 30Years



==================

In case of survival till maturity you would receive sum assure plus full bonuses.

If the survivor dies before maturity, sum assure plus bonus till that time, is pay to the nominee.

If both husband and wife are alive upto maturity, sum assure plus bonus is given.

On death of either husband or wife, the survivor gets sum assured immediately and future premium are waived.

CHILDREN PLAN:-

===============

The children plan is an investment plan designed to meet your childs future financial needs. Its a plan that gives your child to realize his dreams. This plan divide into two parts :

1. CHILD AS A POLICY HOLDER

2. PARENTS AS A POLICY HOLDER & CHILD AS BENIFICIARY

Child as a policy Holder :-

Jeewan Sukanya

Jeewan Kishore

Jeewan Sukanya :-

This policy given on the life of female child is the best gift. Policy takes care of the need of the girl for the entire life. Female childs age should between 1 to 12 years. Father can propose, mother can propose, if she has her own income. Age at entry is calculated as age last birthday and not as age nearer birthday. Life risk cover starts from seventh year of the girl child.Availability of the Plan :-

Minimum Age 1 years




Maximum age 49Years



==================

On maturity girl surviving till she reaches 50 years of age, bonuses up to the age is paid.

After the marriage of girl, husband life is also covered for the amount equal to sum assure. No additional premium to be paid.

In case of death of the girl after commencement of risk but before the maturity date, full sum assure with bonuses is paid.

CHILDREN MONEY BACK POLICY :-

In this policy parents are policy holders and child is beneficiary this is the best policy for making provisions in advance for childrens higher education. Policy is an ideal gift for the child male/female. Mother/Father can propose. Life risk starts from 7th year of child. Parents insurance need not be sister on insurance up to Rs 100000/-

Availability of the Plan :-Minimum Age 0 years




Maximum age 26Years



==================

In this 18 & 20 years of child, 20% of the sum assure is given respectively. After 22 & 24 of the child 30% each of the sum assure is given respectively. After 26 year of the child, bonus upto that period is given. In addition, guaranteed addition plus loyalty addition, if any is given also.

If the policy holder dies after the commencement of the risk but before maturity full sum assure together with guaranteed addition is given to the nominees without deducting earlier installments paid.

If policy holder (child) dies before the policy risk commerce, premium paid till them is refunded.

GENERAL BENEFITS :-

PREMIUM WAIVER BENEFITS :-

For a policy taken on the life of a child (children policies-jeewan kishore, jeewan sukanya, jeewan balya & children money back policy) the premium is paid by the proposer. Under these policies the proposers life is not covered. It means if proposer dies before maturity of the policy, no money becomes payable to the family. On the death of the proposer, the family will loose the income of the proposer. In addition to this problem, the other family members have to continue the payment of premium. To avoid this problem, the premium waiver benefit can be opted for, by the proposer. Under this benefit, if the proposer dies before maturity of the policy, future premium are waived future premium not be paid by the other family members. The premium waiver benefit may be obtained by paying some extra premium depending upon the age of the policy holder. This extra premium is calculated 100 rupee of basic premium per thousand.

TERM RIDER BENEFIT :-

Under children money back policy, the life risk covered is that of the child. If the proposer dies pre maturely, no money becomes payable to the family. To avoid this problem the term rider can be added to the childrens money back policy. Under this benefit if proposer dies before 18 years of the child a sum equal to 20% of the sum assure becomes payable to the family. Other benefits to the child

TAX BENEFIT :-

The premiums paid under the plan qualify for rebate U/s 88 of the Income Tax Act, 1961 and the returns are fully exempted under sec 10(10D).

OPTIONAL BENEFITS :-

Critical Illness, Double Sum Assured Benefits, Accidental Death Benefit etc.

INTRODUCTIONICICI Prudential Life Insurance Corporation Ltd. was incorporated on 20.7.2002. this company is a joint venture of ICICI(74%) and Prudential plc UK(26%).

The company was granted certificate of registration for carrying out Life Insurance Business, by the Insurance Register and Development authority on Nov 24.2000. it commenced commercial operations on Dec 19.2000, becoming one of the few private sector players to enter the liberalized arena.

DETAILS OF ICICI :-

This is Indian participate company of this insurance Co.. ICICI Ltd was established in 1955 by world bank, the Govt. of India and the Indian Industry, to promote industrial development of India by providing project and corporate finance to Indian Industry.

Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has thus far financed all the major sectors of the economy, covering 6848 companies and 16851 projects.

DETAILS OF PRUDENTIAL PLC :-

Prudential Plc was founded in 1848. since then it has grown to become one of the largest providers of a wide range of savings products for the individuals including life insurance, pensions, annuities, unit trust and personal banking. It has presence in 15 countries, and caters to the financial needs of over 10 million customers.

Prudential is the largest life insurance company in the United Kingdom. Asia has always been a region for prudential and it has had a presence in Asia for 75 Years. In fact Prudential first Overseas operation was in India, way back in 1923 to establish Life and General Branch agencies.

This is the only company who market maximum product with goof feature in competition with LIC. In my opinion these companiess stand seconds in merits. It has introduced the following Insurance product:-

1. Save n Protect

2. Cash Back3. Smart Kid

4. ICICI PRU Life Guard

5. Life Time Pension.

1. SAVE N PROTECT :-

It is a fix term policy that combines saving with life cover in this plan, you pay premium regularly during the term. On death of the life assure up to age 7 years the basic premium paid will be return without interest. On the death of the life assured after 7 years, the beneficiary will get the sum assured, guaranteed additions 3.5% compounded interest annually for the first 4 years and the vested bonuses was the policy matured at the end of the term, you can get the full sum assure and guaranteed addition, 3.5% compounded annually for the 1st 4 years as well as the vested bonuses.Minimum Age 0 years


Term to Avail the plan :

Minimum term 10 years, maximum term 30 years

The maximum cover ceasing age is 70 years.

Advantages of this plan :

The plan not only covers your life but also provides you with a survives benefit payout every five years.

In the unfortunate event of death of life insure, the beneficiary would receive the death benefit.

On the maturity, you would receive the sum of the survivals benefit, bonus addition and guaranteed addition.

You have the choice of paying your premium either in yearly, half yearly modes, depending upon your conveniences.

Money back plan offers the tax benefit U/s 88, Sec 80D and Sec 10(10D)

of the Income Tax Act, 1961 are applicable.

You can take a loan against this plan.

2. CASH BANK :-

A fixed term policy of 15 to 20 years in which premiums are paid through out the term of the policy. Survival benefit payment at regular intervals are paid to provide you with the liquidity full sum assured, along with the guaranteed addition 3.5% compounded annually for the 1st four years at the vested bonuses would be payable on death, irrespective of the survival benefit paid. On death of the life assured, the beneficiary will get the full sum assure, the guaranteed bonuses and the vested bonuses, irrespective of the survival benefit already paid. The survival benefit payable is as per the table:Policy Term

15 YearsPolicy Term 20 Years

At end of yearSurvival pay. a % basic

sum assuredAt the end of year Survival pay a % bas sum assured

3

10%

410%

6

15%815%

9

20%1220%

12

25%1625%

15 (Maturity)

50% add. bonus20 (Maturity)50% add. bonus

Minimum Age 16 Years


Term to Avail Plan:


Maximum Term 20 Years

The maximum maturity age is 70 years


The plan not only covers your life but also provide you with survivals benefit payout every five years.

In the unfortunate event of death of the life insure, the beneficiary would receive the death benefit.

On maturity, you would receive the sum of the survivals benefit, bonus addition and guaranteed addition.

You have the choice of paying your premium either in yearly, half yearly modes, depending on your conveniences.

Money back plan offers the tax benefits U/s 88, Sec 80D and Sec 10(10D) of the Income tax Act, 1961 are applicable.

3. SMART KID:-

===========

Smart kid is so designed that it provides you the flexibility to structure the benefit in accordance to your needs. You get the security of assured payments under your plan depending upon the benefit structure chosen by you. Whats more, you can decide the term of the plan, so that the benefit are paid when you need it. You can also choose the policy to mature between 22-25 years of the childs age. In case of survivals during the term of the policy you can get the payouts after some intervals.At the end of

Childs age

Payouts

10 yr of the policy

15 years

20% of the sum assured

12 yr of the policy

17 years


15 yr of the policy

20 years


17 yr of the policy

22 years


+ GA + VB

Minimum Age 0 Years


Parents of Minimum age 20 years and Maximum age 60 years

Term to Avail Plan:




On maturity you would receive the sum assured plus the bonus addition

The automatic cover maintenance facility ensures the policy remains inforce for at least 3 years.

You have the option of paying premium half yearly or yearly.

Money back plan offers the tax benefit U/s 88, Sec 80D and Sec 10(10D) of the Income tax Act,1961 are applicable.

4. LIFE TIME PLAN:-

ICICI Prudential Life time Pension Plan combine the best of investment and insurance. The solution gives the power of maintaining your life style needs for as long as you live. It is a regular premium plan it gives you the freedom to choose the amount, the premium, and invest your money in the market-linked funds, to generate potentially higher returns. A part of the premium paid is used to pay for the death benefit (if any) opted for by you and the rest be invested in the plan of your choice. On the retirement date the accumulated value of the units will be used to purchase and annuity-to provide you with regular income for life.



Term to Avail Plan:




Power to choose the retirement age between 52-70 years.

You can increase your investment during the deferred period.

You can increase or decrease the protection level.

You can invest in a plan based on your priorities.

Money back plan offers the tax benefit U/s 88, Sec 80D and Sec 10(10D) of the Income tax Act, 1961 are applicable.

Your policy acquires a paid up and surrender value after 3 years premiums are paid in life time pension plan.5. LIFE GUARD :-

Under this plan, a sum assures is payable in case of death of the life assure during the term of contract. One can choose the lump sum that would replace the income lost to ones family in the unfortunate event of the ones death. Since this non-participating (without profits) plan is a pure, risk cover plan, no benefits are payable on survival to the end of the term of the policy.



Term to Avail Plan:



Maximum age that plan covers are 65 years

Minimum premium payable is 2400 per annum


On maturity, you would receive the sum assure plus the bonuses addition. Bonuses addition is the amount in the accumulation account. In cases of the sum assure.

Cover you for a term (years) of your choice

At the same time does not burden you with the liability to pay premiums for the entire life

Entitled you to a bonus addition for the entire term of the plan.

Premium to be paid for the Full policy term or policy holders death, whichever is earlier.

You have the choice of paying premium either in yearly, half yearly and quarterly modes or of paying a single one time premium

Level term Assurance life guard plan will have the option with returns of premium. In case of death you will receive the sum assure plus bonuses. On survival till maturity, the entire premium paid, will be returned without interest. The minimum premium payable is Rs 2400/- per annum

Money back plan offers the tax benefit U/s 88, Sec 80D and Sec 10(10D) of the Income tax Act, 1961 are applicable.

GENERAL BENEFITSAccident Death Benefit:-This benefit provides an additional amount (Over and above basic sum assured) to the beneficiary in the death of the accidental death of the assured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs 10 lac). If accident death occurs while traveling as a passenger in mass transport system like train or bus amount payable would be double of the sum assure.

Critical Illness Benefit:-

The benefit can be taken with the basic life insurance policy to provide financial support in the event of medical emergencies. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency.

Permanent Disability Benefit:-

This benefit provides financial support in case of your permanent disability due to an accident. The amount payable is over and above the basic sum assured and would be paid out as an annuity. The maximum permanent disability benefit that permanent disability is defined as a permanent and immediate inability to work, the permanent loss of two limbs or a total and permanent loss of a sightMajor Surgical Rider:-

This is a cover available against the major surgical procedures. Depending upon the surgery, 50%, 30% or 20% of the sum assured under the rider is paid. This provides the cover of the sum, subject to maximum of 65 years. Claims for this rider are not admitted for the first 6 months of the policy.

Sales figure/ Market share

Sales figure of ICICI Prudential in last 3 financial years

(In crore Rs.)

Years

First year

premiumRenewal

premiumSingle PremiumTotal Premium

2004-0555.773.0557.56116.38

2005-06209.8853.52154.22417.62

2006-07629.12238.43121.73989.28

As it is difficult to compare all the policies of all the companies because they vary in their benefits etc. So in this project I am comparing only four policies of three Companies i.e. HDFC Standard Life, LIC, ICICI Prudential.

Policies are named as: TERM ASSURANCE PLAN

ENDOWMENT ASSURANCE PLAN

MONEY BACK PLAN

CHILD ADVANTAGE PLAN

Min to Max Age Premium Base Comparison Min to Max. term

18-60 years Term Plan 10-30 years

Name of the companyHDFC SLICLICICICI PROOM KOTAK

Age of the person

30 years30 years30 years30 years

Term of the policy10 years10 years10 years10 years

Sum assured

1,00,0001,00,0001,00,0001,00,000

Basic premium (without any premium)10,3009,32411,80911,237

Returns (on death)S.A. + BonusS.A. + BonusS.A. + BonusS.A. + Bonus

Returns (on maturity)NI2NI2NI2NI2

other benefits(CI),(ADB),(ASA)(WOP), (ADB)(ADBR),(ABR)(CI),(ADB)(PDB)


12-60 years Endowment Plan 10-30 years


Age of the person30 years30 years30 years30 years


Sum assured1,00,0001,00,0001,00,0001,00,000


Returns (on death)S.A. + BonusS.A. + Accumulated BonusS.A. + BonusS.A. + Bonus

Returns (on maturity)S.A. + BonusS.A. + BonusS.A. + Bonus+ GAS.A. + Bonus

Other benefits(CI),(ADB),(DSA),(WOP)(WOP), (ADB)(ADB),(ABR), (CI),(MSR)(CI),(ADB)(DSA),(2GD), (TB)


12-60 years Money Back Policy 10-30 years

Name of the companyHDFC SLAICLICICICI PROOM KOTAK

Age of the person30 years30 years30 years30 years


Sum assured1,00,0001,00,0001,00,0001,00,000


Returns (on death)S.A. + BonusS.A. + BonusS.A. + BonusS.A. + Bonus

Returns (on maturity)Return after 5-5 years

For 20 Years Policy 20%-20% and 20% alte 5-5 years gap+ BonusReturn after 5-5 years

For 20 Years Policy 20%-20% and 20% alte 5-5 years gap+ BonusIn 20 years Policy returns after 4-4 years gap.

1st year-10%

2nd year-15%

3rd year-20%

4th year-25%

On maturity- 50%+ BonusReturn after 5-5 years

For 20 Years Policy 20%-20% and 20% alte 5-5 years gap+ Bonus

Other benefits(CI),(ADB),(DSA),(WOP)(WOP), (ADB)(ADB),(DAB), (CI),(MSR)(CI),(ADB),(PDB), (2GD)

Min to Max Age of Child 0-17 Premium Base Comparison Min to Max. term

Min to Max Age of Policy Holder Children Policy 10-30 years

12-60 years


Age of the Child6 years6 years6 years6 years


Sum assured1,00,0001,00,0001,00,0001,00,000


Returns (on death)Future premium waived and Policy continue till maturityFuture premium waived and Policy continue till maturityFuture premium waived and sum assured immediately after the deathFuture premium waived and Policy continue till maturity

Returns (on maturity)Sum assured+ BonusReturn after 2-2 years

gap 20 % - 20%-30% -30% and BonusReturn after 2-2 years gap on maturity S.A.+ BonusSum assured+ Bonus

Other benefits(ADB,(WOP)(PWP), (TRB)(ADB),(IBR), (ABR),(WOP)(LGB),(ADB),(WOP)

OTHER BENEFITS:-

1. Tax Benefit

2. Loan Facility

3. The policy holder can pay the premium yearly, half yearly and quarterly

4. If policy holder avail any additional, he will paid more premium

5. The best of most popular plan of:

HDFC

CHILDREN PLAN

ICICI

LIFE TIME

LIC

JEEVAN MITRA

OM KOTAK

CAPITAL MULTIPLE

6. When the age of the person grow old. The premium also increased

7. Premium rate increased in case of person taking intoxicants in comparison to healthy person.

1) Questionnaire method was used by me, with most of the questions as the closed ended questions.

2) Sample Size- 1263) Age Group - above 22DATA ANALYSIS AND FINDINGS :-

QUES 1: Awareness of the Various companies:S.No.

Particulars%age

A

ICICI80%

B

HDFC75%

C

OM Kotak Mohindra5%

D

MAX New York Life Insurance15%

E

SBI Life Insurance10%

Respondent response about the awareness of the insurance CompaniesQUES 2 : How the people know about the companies

S.No.Particulars%age

ANewspaper75%

BTV Ads60%

CBanners/Posters2%

DFriends90%

QUES 3: What the people think about the InsuranceS.No.

Particulars%age

A

Necessity for protection Security89%

B

Imposition of an extra burden of expenses5%

C

A compulsory tool for tax saving78%

QUES 4: Main considerations that a customer looks at while purchasing an

Insurance Policy


ATAX90%

BSAVING75%

CPROTECTION80%

DPENSION25%

EINVESTMENT35%

QUES 5 : What a respondents see while purchasing a Insurance from the

Company.


AStanding and Goodwill of the company90%

BProduct Range of the company10%

CAdvertisement being released by the company5%

DServices being given by the company80%

ECommunications and knowledge of the Representatives

10%

FReturns of Bonus declared by the company85%

QUES 6 : Excising Policy


AYes80%

BNo20%

QUES 7 : From where a respondent purchase the previous Insurance

Policy


ADirectly from the company10%

BAny unknown agent10%

CAny known agent90%

DOthers5%

QUES 9 : Other Investment and Saving Tools where respondent InvestS.No.Particulars% age

ANSC90%

BBank Deposits40%

CKVP5%

DTax Saving Bonds55%

EPPF and Post Office92%

FOthers5%

ANALYSIS AND INTERPRETATIONFINDINGSThe Monopoly of LIC has been broken because private Insurance companies came into the market.

1. 90% respondents are aware of privatization of Insurance Industry and 10% respondents do not know about private companies.

2. 80% people know about ICICI Insurance Company. 75% people know about HDFC Insurance Company and 15% people know about other companies.

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

4. Some people believe only or preferred only Public Insurance companies like LIC.

5. As majority of the population of belongs to the service class so they consider tax saving rather than purchasing a Life insurance.

6. The Financial growth of Private companies is much more than Life Insurance companies

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

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

9. Most of the people go for Children benefit because of Triple benefit.

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

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

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

CONCLUSION

ICICI Prudential Life Insurance Company is the number one private life insurance company in India with a market share of 32%. Bajaj Alliance stands second in private life insurance companies with a market share of 15%. Looking in private sector ICICI Prudential has been the dominant player because the amount of gap between the market shares is huge.

But if we analyze in all sectors of life insurance then LIC has been the most dominant player since 1956. The impact of LIC has been so much in both rural and urban areas that people use the term LIC instead of life insurance.

ICICI prudential faces a big challenge in front of them to stay in the race with Life insurance corporation (LIC) because with the entrance of other companies like Max New York, Tata-AIG & Aviva the competition has become more tough.

But insurance is also growing day by day, India has a population of 1.2 billion and only 33.3% population is insured. This means insurance is an upcoming industry but ICICI prudential has to work a lot on their strategies to overcome LIC.

SUGGESTIONS AND RECOMMENDATIONS :

1. Advertisement should be done on Television and especially Posters and Banners. This will greatly help in raising awareness level.

2. Insurance company should show more commitment with the customer.

3. Private companies give better services to the customers comparatively to Public companies.

4. The private company should create good relation and communication.

5. Private companies should work together to spread awareness regarding the benefit given by the Private Companies.

6. Private Insurance Companies give some discount to attract the customer

7. A public relation officer should be appointed in the company who deals with customers and their needs.

8. Cross training should introduce in Private Companies.

9. Private Companies needs to the market their product better and should create greater awareness about their product and services. They need extensive marketing advertising about the additional benefit provided by them in comparison to the policies offered by LIC.

10. Agents have got maximum influence on a customer. They are the one who

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