Max New York Life Insurance

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Max New York Life Insurance

1.1 Introduction to Indian Insurance Industry

1.1.1 Brief overview

With over 300 million life policies in force, substantial premiums and double-digit

growth in both segments (life and non-life), India’s insurance sector is poised to mark incredible

pace of progress in the years to come. Liberalisation in the sector led to the entry of foreign

players with significant capital commitments and growth aspirations in the Indian insurance

arena. Low penetration, availability of a wide variety of products (like unit-linked insurance

products, whole life, maximum net asset value (NAV) guarantee etc) and government incentives

are the key drivers that would give great impetus to the industry.

Foreign corporate giants are not leaving any stone unturned to be a part of India’s

economic growth story and hence are lobbying hard with their lawmakers to aid them in their

entrance or expansion plans in the fast-growing Asian economy. Lobbying disclosure reports

filed by certain companies with the US Senate reveal that The New York Life Insurance

Company has lobbied on ‘issues related to Insurance Act in India, provisions related to cap on

foreign investment’, while Prudential Financial Inc has lobbied on ‘issues relating to India

financial services market access and equity ownership issues’.

1.1.2 Market Share

State-owned Life Insurance Corporation (LIC) of India held a market share of around 76 per cent

in terms of new business premium for the financial year up to August 2011 while the remaining

was divided among 23 private insurance companies. LIC has been continuously increasing its

market share on the back of its strong base of conventional products, which remained unaffected

by the change in regulations, and its group retirement plans.

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1.1.3 Recent Statistics

Data released by the Insurance Regulatory and Development Authority (IRDA) indicates that the

life insurance industry collected Rs 49,064 crore (US$ 10 billion) in the first six months of 2011-

12 while the non-life insurance industry posted a 26 per cent year-on-year (y-o-y) growth in

gross written premium during the same period. According to the data by IRDA, the non-life

insurance industry gathered a total premium of Rs 28,604 crore (US$ 5.82 billion) during April-

September 2011-12 as against Rs 22,744 crore (US$ 4.63 billion) in the corresponding period

last year.

The four state-run insurers - New India Assurance, United India, National India and Oriental

India - witnessed an increase of 25 per cent while private sector companies registered a growth

of 27 per cent in premium.

During the April-August 2011 , the life insurance industry in India collected premiums worth Rs

71,565.49 crore (US$ 14.57 billion) by writing new policies. While LIC collected Rs 30,912.31

crore (US$ 6.29 billion), private insurers collected Rs 9,740.87 crore (US$ 1.98 billion). In

August itself, the total premium collection by the industry was Rs 13,857.89 crore (US$ 2.82

billion), 62 per cent higher than Rs 8,511.25 crore (US$ 1.73 billion) collected in July.

For the general insurance industry, collections stood at Rs 23,712.75 crore (US$ 4.83 billion) by

writing new policies during the April-July 2011-12, compared with Rs 19,144.06 crore (US$

3.89 billion) collected last year. While private insurers registered a growth of 25.97 per cent at

Rs 9,861.28 crore (US$ 2 billion), the four state-owned general insurance companies' collection

was higher by 22.74 per cent at Rs 13,851.47 crore (US$ 2.82 billion).

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1.1.4 Recent Developments

Warren Buffet’s Berkshire Hathaway ventured into Indian general insurance industry in

March 2011 and is now ready to launch an online term cover to foray into the life

insurance segment. Berkshire India, a joint venture (JV) between Nebraska-based

Berkshire Hathaway and Allianz, is mushrooming at a fast pace and would also launch a

health insurance product soon.

Edelweiss Tokio Life Insurance Company Ltd (ETLICL) - a 74:26 JV company between

Edelweiss Financial Services Ltd and Japanese insurance major Tokio Marine Holdings –

has massive expansion plans on cards. The company is planning to open 33 new branches

at selected locations across India, including 14 in Maharashtra, by December 2012.

With an aim to strengthen its distribution network and reach out to the rural masses

across India, Max Bupa Health Insurance Company Ltd is in talks with regional rural

banks, co-operative banks and post offices to distribute its health insurance products. The

company, majorly relying on the model of ‘bancassurance’, is in talks with IRDA for the

same.

IRDA has given its nod to Videocon Group's general insurance JV with the US-based

Liberty Mutual Group. Liberty Mutual, with 26 per cent stake in the JV initially, will

have an option to increase its stake if regulations permit.

1.1.5 Government Initiatives

IRDA is now planning to allow agents to sell products of more than one insurance company. The

new model would not only allow private insurers to have access to the huge range of agents

selling LIC products, but would also increase the income in the hands of agents. This would also

facilitate deeper penetration of insurance products in the Indian markets.

IRDA is also planning to ban misleading products (which offer so-called highest NAV) and

staggered commissions for agents for the welfare of policy buyers. According to the regulator,

the still-evolving industry needs new set of rules that protect the interests of consumers so that

they do not get carried away with the promises of high returns that are just shown on papers.

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The regulator also stipulated a set of guidelines relating to sale of policies through distance

marketing on October 1, 2011 in order to curb misspelling of insurance policies and protect

consumer interest. The guidelines apply to every activity of solicitation and sale of insurance

products through the internet, e-mail, newspaper inserts, SMS and telephone and require every

insurer to prepare a standardised script for the purpose and file this with the regulator. Every

telephonic conversation with the customer needs to be recorded and a voice copy is to be given

to the consumer (if he/she so desires) at any time during the term of the policy or until a

satisfactory settlement of claim, whichever is later.

Moreover, the Ministry of Finance is holding internal discussions on listing of the four general

insurance companies - New India Assurance, National Insurance, Oriental Insurance and United

India Insurance. The move would give access to public capital to these companies. However, the

four companies would not get listed together.

1.1.6 Road Ahead

According to a survey by Swiss Re, the world’s second largest reinsurance company, India’s

next generation of consumers are increasingly getting aware of the benefits of insurance and will

be more-than-willing to purchase cost-effective policies in years to come.

India’s insurance industry is anticipated to reach US$ 350-400 billion in terms of premium

income by 2020, making it among the top three life insurance markets, according to a report by a

leading industry body and US-based Boston Consulting Group (BCG). India is expected to be

one of the top 15 non-life insurance markets by 2020. The report further stated that penetration

of the insurance industry, premium as percentage of the country's gross domestic product (GDP),

has improved from 2.3 per cent in 2001 to 5.2 per cent in 2011.

Exchange Rate Used: INR 1 = US$ 0.0204 as on November 7, 2011

1.2 Introduction to Max New York Life Insurance

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1.2.1History

Max New York Life Insurance Company Ltd. is a joint venture between Max India Ltd.,

one of India’s leading multi-business corporations and New York Life Enterprises, a business

unit of New York Life, a Fortune 100 company. Incorporated in 2000, Max New York Life

started commercial operation in 2001 and today is one of India’s leading private life insurance

companies and has positioned itself on the quality platform. In line with its vision to be the most

admired life insurance company in India, it has developed a strong corporate governance model

based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. The

company offers long term savings and protection solutions through a suite of individual and

group life insurance products and is present across the country through a wide distribution

network of multi channel distribution.

Agency distribution is at the core of our multi-channel distribution network

complemented by bancassurance, partnership distribution and employed sales force. The

Company places a lot of emphasis on its selection process for agent advisors, which comprises

four stages - screening, psychometric test, career seminar and final interview. The agent advisors

are trained in-house to ensure optimal control on quality of training.

195 agent advisors have qualified for the Million Dollar Round Table (MDRT)

membership in 2010. MDRT is an exclusive congregation of the world’s top selling insurance

agents and is internationally recognized as the standard of excellence in the life insurance

business.

The company corporate agency and broking tie-ups with banks and other distributors of

financial products.

Max New York Life offers a suite of flexible products. It has 23 individual life and health

insurance products and 9 riders that can be customised to suite every need of the customer.

Besides this, the company offers 4 products and 7 riders in group insurance business.

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In line with its values of financial responsibility, Max New York Life has adopted

prudent financial practices to ensure safety of policyholder's funds. The Company's paid up

capital as on 31st March, 2011 was Rs. 1976 crore.

Max New York Life Insurance has emerged as a key player in the Life Insurance Industry

since the government allowed entry of private players in 2000. The Company’s business model

has evolved by earning trust of key stakeholders like Policyholders, Shareholders & Regulator

(Insurance Regulatory and Development Authority). During the year, Max New York Life took

major steps towards strengthening its multi-channel distribution architecture by entering into

corporate agency tie-up with Axis Bank.

Key aspects regarding Max New York Life Insurance’s performance are detailed below. (All

figures as of March 31st 2011)

Max New York Life Insurance covered 127.63 lacs lives (in-force) providing a total

insurance cover of over Rs. 1, 54,000 crores to its customers.

Market Share has increased up to 7.5% on Adjusted Individual First Year Premium.

Total Capital stood at Rs. 1,976 crores.

Assets under management at Rs. 13,836 crores.

Solvency Margins stood at 365% as against the 322% for the previous year.

1.2.2 Vision,Mission and Values

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Vision

To become the most admired Life Insurance Company in India for all stakeholders.

Mission

Amongst top 5 private life insurance companies by profitable new business sales

National Player

Brand of choice

Employer of Choice

Principal of Choice for Distribution & Suppliers

Values

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This vision to become India's most admired life insurance company will be realized through our

unique set of values, which are as follows:

Caring: Max New York Life is redefining the life insurance paradigm by focusing on customers

first. The service process is responsive, personalized, humane and empathetic. Every individual

who represents the company is for us our brand champion.

Honesty: Honesty is the heart of the life insurance business. It is all about trust. Transparency,

integrity and dependability form the cornerstones of the Max New York Life experience. The

company ensures that everyone who represents the brand carries a promise: we care - in word as

well as deed.

Excellence: Excellence at Max New York Life implies the ability to perform at a consistently

high level. Focused on the value of continuous improvement in people, processes and the

organization, the company strives for the highest standards of quality in every aspect of its

business.

Knowledge: Knowledge leads to expertise; and our expertise is in helping people protect

themselves. Perfectly combining global expertise with local knowledge, we are India's life

insurance specialist. Max New York Life believes that for knowledge to be of value it must be

focused, current, tested and shared.

Integrity: Integrity is the cornerstone of any ethical deed. Adhering to the professional code of

conduct and adherence to processes and systems is of utmost importance.

Teamwork: Teamwork implies the ability to share exchange and provide information and

support team members which is at the core of any successful venture. Selflessly putting the team

interest above personal agenda enables the company to perform better in every aspect.

1.2.3 Products offered by Max New York Life Insurance

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1.2.3.1 PROTECTION PLANS

Max New York Life Platinum Protect

Max New York Life’s Platinum Protect is a comprehensive life insurance plan that fulfills the

protection needs for you and your family. It is a unique plan that supports your family's financial

requirements in case of your absence. Max New York Life's Platinum Protect is the best solution

for you to fulfil all your family's dreams, no matter what.

Benefits:

Comprehensive Insurance cover at affordable rates

Low Premium rates for leading a healthy life style

Premium discounts for high sum assured

Life Cover continues even if you stop paying premium

Riders to protect your family from death, disease, and disability

Comprehensive medical report at the time of policy issuance

Key Features:

Death Benefit:

An amount equal to Sum Assured will be paid to the nominee in case of death of the Life

Assured.

Max New York Life Premium Return Term Plan

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Your family is the center of your world. You care for your loved ones more than anyone

else does and you definitely have hopes and aspirations for them. On the other hand, your loved

ones look up to you for everything at every step of their lives - from the smallest necessities to

the biggest needs. You want to provide them with the best of everything, from education to

marriage to healthcare and financial support for household expenses, EMIs, rent, etc.

We all know that life is full of uncertainties, and we never know what lies ahead of us in the

future. Therefore, it is critical to secure the future of our loved ones and provide for them,

whether we are there with them or not. This is exactly what Max New York Life Premium

Return Term Plan (UIN – 104N069V01) will help you do!

Unlike the regular term plans, the Max New York Life Premium Return Term Plan not

only offers protection to your family in case of an eventuality, but also returns your money at the

end of the term so that your family enjoys a secure future

Benefits:

Comprehensive protection along with inbuilt accidental death benefit : This plan

offers base sum assured as death benefit and 50% of base sum assured as an inbuilt

accidental death benefit.

Return of premiums : On survival on maturity date, you get 100% of your premiums

back.

1.2.3.2 CHILD PLANS

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Max New York Life Shiksha Plus II

The needs of children go much beyond securing admissions in the best schools and exploring

opportunities for education. Max New York Life Shiksha Plus II understands this and has

designed a plan to ensure that your children not just get the best of education but also explore

and develop their hidden talents.

Key Features:

Immediate Family Support:

100% of applicable Sum Assured is paid immediately in the event of death of Life Assured. This

ensures that the child doesn't have to depend on anybody else in your absence.

University Education Pool:

Upon policy maturity, the prevailing Fund Value is paid out to take care of higher education

expenses of your child. It is calculated as (Accumulated Units x prevailing NAV).

University Education Support:

In the event of death of Life Assured, all future premiums are funded by us to boost the

University Fund corpus and protect the child’s dreams of studying in an university of his/her

choice.

School Fee Support:

10% of Sum assured will be paid immediately along with Immediate Family support. From the

next policy anniversary following the date of death, 10% of the base sum assured will be paid on

each policy anniversary to provide for school expenses subject to a maximum of 100% of the

base sum assured but not beyond the original term of policy.

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Max New York Life College plan

So, start planning for your child's college education with Max New York Life College Plan - a

traditional participating, money back life insurance plan.

Key Features:

Living and maturity benefit:

The total payout is 120% of Sum Assured. There are guaranteed cash backs every year from

child's age 18 to 21.

Child's age Money back (% of Sum Assured)

18 40%

19 20%

20 20%

2140% + (Accrued Reversionary Bonus + Terminal Bonus,

if any)

Therefore, total guaranteed money back/payout is 120% of Sum Assured.

Bonus:

Reversionary Bonus: Bonus option in this plan is compound reversionary bonus*.

Reversionary bonus is declared from 2nd policy year onwards and once declared is

guaranteed for the life of the contract. The bonus is a percentage of the base Sum

Assured.

Terminal Bonus: Terminal bonus may be declared after the 10th policy anniversary as a

percentage of Reversionary Bonus and is payable only once during the policy lifetime.

*Compound Reversionary Bonus means that the previously declared bonuses will also

participate in successive bonus declarations.

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Death Benefit:

Upon death of Life Assured before attaining 7 years of age, total premiums paid (with interest @

3.5% p.a. compounded annually) and accrued reversionary bonus, if any, is paid.

Upon death of Life Assured after attaining 7 years of age, Sum Assured + Accrued Reversionary

Bonuses + Terminal Bonus, (if any), is paid.

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1.2.3.3 RETIREMENT PLANS

Life partner plus plan

Max New York Life's Life Partner Plus is a life insurance plan that provides you protection for

life and simplifies your financial planning and investment needs. This plan offers you triple

benefits. It gives you maturity benefits at the age of 75, provides you a life coverage insurance

and offers you money back feature as well, where we will pay you a part of the sum assured at

regular intervals to take care of your periodic foreseen needs from age 61 to 75, ensuring that

you can fulfill all your dreams and have a carefree retirement. So enjoy your golden years with

pride and independence.

Benefits:

Guaranteed financial protection

Guaranteed money backs for 15 years

Additional protection through various riders

Bonus declared every year from 3rd policy year onwards

Key Features:

Living Benefit:

Guaranteed returns of 7.5% of Sum Assured will be paid on each policy anniversary from age 61

to 75. 100% of Sum Assured will be paid on policy maturity together with paid-up additions, if

any.

Death Benefit:

An amount equal to initial Sum Assured with sum assured of paid up additions added through

bonuses, (if any), will be paid in case of death of the Life Assured. If death occurs before life

insured reaches age 10 the company will refund all the premiums paid along with interest rate of

3% per annum, subject to a maximum of the sum assured chosen.

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1.2.3.4 Growth plans

Max New York Life Flexi Fortune

Max New York Life Flexi Fortune, a unit-linked life insurance plan offers the advantage of

protection with returns. Max New York Life’s Flexi Fortune allows you to customize your plan

as per your requirements, investment choices, and type of cover.

Key features

Key Features:

Flexibility to choose your own life cover, policy tenure, investment strategy, and

premium payment term.

Protection against market volatility with the Systematic Transfer Plan (STP).

Progressively increasing sum assured for increasing liabilities without additional

underwriting.

Flexibility to make partial withdrawals to meet any unplanned expenses.

Flexibility to opt for additional protection by choosing rider options - Personal Accidental

Benefit (PAB) rider and Dread Disease (DD) rider.

Benefits:

Maturity Benefit:

Upon maturity, policyholder is eligible to an amount equal to Fund Value.

Fund Value = Accumulated Units X Prevailing NAV on maturity date

Death Benefit:

Upon death of the life insured before prior to maturity of policy, an amount equal to Sum

Assured + Fund Value on date of death will be paid to the nominee.

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Max New York Life fast track plan

You are at a stage where you have planned for most of the major responsibilities of your life. At

the initial stages of life you have ensured that your family, your children, have been provided for.

Now is the time to put your life on the Fast Track. You want to maximize your savings, enabling

you to lead a relaxed lifestyle where you can live life to the fullest and focus on fulfilling your

wishes, and realizing your own dreams. But you need to be prepared financially to ensure that

your future years are the best years of your life.

Key features

Life insurance coverage

Option of short premium payment terms enabling an early maturity and fast track

accumulation

Choice of six well managed funds for investors with different risk appetite

Entry age of life insured upto 60 years

Choice of protection cover basis age of life insured

Systematic Investment through STP option- to safeguard your wealth against market

volatilities

Flexibility to make partial withdrawals to meet unplanned expenses

Flexibility to opt for Personal Accidental Benefit and Dread Disease rider

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1.2.3.5 Savings plans

Max New York Life Life Gain Plus 20

Max New York Life Life Gain Plus 20 Participating Plan requires you to pay premiums only

over a limited period, while you get cover for the entire policy tenure, i.e., up to 20 years. It

ensure growth of your money resulting in a substantial lump sum on maturity. Bonuses and

terminal illness benefit along with the flexibility to add value to your plan with various rider

options makes it an ideal plan for achieving your financial goals.

Key features

Benefits:

Guaranteed financial protection

Flexibility to choose premium payment term

Additional protection through riders

Maturity Benefit:

On maturity of the policy, this plan provides 110 % of the Sum Assured and paid-up additions, if

any.

Death Benefit:

On death of the Life Assured, the following benefits are payable:

100% of the Sum Assured + Sum Assured of paid-up additions, if any (if policy is in

force for less than 5 years)

200% of the Sum Assured + Sum Assured of paid-up additions, if any (if policy is in

force for 5 years or more)

On death before 10 (ten) years of age, this plan gives a refund of premiums with

compound interest at the rate of 4 (four) percent subject to maximum of sum assured.

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Terminal Illness Benefit:

On diagnosis of a terminal illness with a life expectancy of six months or less, the Life Assured

will get:

Up to 50 % of Sum Assured (subject to a maximum of Rs. 5,00,000)

Remainder of Sum Assured on the occurrence of the insured event

Max New York Life Whole Life

Max New York Life Whole Life Participating Plan is designed to provide you a lifetime of

security along with potentially higher returns. The plan builds a Cash Surrender Value, which

can be used to fund your sudden monetary requirements. In addition, you are eligible for bonuses

3 years after the policy comes into effect.

Key features

Benefits:

Protection for life with a guarantee of basic amount insured

Cash Surrender Value after 3 years’ premiums have been paid

Bonus declared every year after 3 policy years

Insurance cover up to age 100

Option for additional protection through riders

Guaranteed fixed premium throughout life, which allows you to plan your finances better

Bonus options:

The plan entitles you to get bonuses with a choice of three options on how you would want it

paid to you:

Cash bonuses: The bonuses will be paid to the Policyholder in cash.

Premium offset: Bonus may be used to offset the premium due.

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Purchase Paid Up Additions: The Bonuses may be used to buy paid-up additions.

Maturity benefit:

Upon maturity, amount equal to Sum Assured along with accrued bonuses, (if any), is payable.

Death benefit:

On death of Life Insured upon attaining ten (10) years of age, an amount equal to Sum

Assured along with Sum Assured of paid-up additions, if any, is payable

On death of the Life Insured before attaining ten (10) years of age, we will refund all the

premiums received by us together with interest at the rate of four (4) percent per annum,

compounded annually, subject to maximum of Sum Insured.

Max New York Life GMI PLAN

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Future needs to be planned. Planning for future requires planning for future income. To be able

to guarantee future income is to guarantee your child’s education, your retirement or any other

financial goal that you have set. For complete peace of mind this income should be guaranteed

and not subject to swings of markets. But how do you go about securing such an income?

Max New York Life brings to you a solution that takes care of all your worries. The Guaranteed

Monthly Income plan not just ensures safety of your investments but also ensures that your

savings are cushioned from ill-effects of inflation. Additionally it ensures that the lifestyle of

your family is protected against any exigencies.

Key features

Benefits:

Short Policy Terms

The plan offers you flexibility to choose your policy terms. You can choose either 6 years

or 11 -year policy terms depending on your financial goals.

Guaranteed Monthly Income for a Payout Period of 10 years after your policy term

The plan lets you choose the guaranteed monthly income you desire. This income is

guaranteed to be paid for a period of 10 years (120 months) from the end of policy term,

payable at payout dates*.

Monthly Income Boosters ("MIB") 12th year onwards

Over and above the guaranteed monthly income, the plan also offers MIB starting year

12, which are payable at payout dates. This ensures that your chosen monthly income is

cushioned against inflation.

Complete Safety of your investments and transparency of returns

The investments will be made only in highly secure investments ensuring minimal risk

and low volatility. A single Monthly Income Booster (MIB) rate is applied to renewal

premiums received on all policies within a particular month. The MIB rate will be

determined using the prevailing 5-year Government Security Benchmark Interest Rate as

on the last working day (end of day) of the previous month, obtained from Fixed Income

Money Market and Derivatives Association of India (FIMMDA).

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Monthly Income Boosters (MIB):

From Policy Year 2 onwards, upon receipt of each due premium, the policy will accrue Monthly

Income Boosters till the end of policy term. For the purpose of applying Monthly Income

Booster rates for renewal premiums received on policies, all the premiums received within a

particular month will be applied a Monthly Income Booster Rate corresponding to FIMMDA 5-

Year Government Security Benchmark Rate as on the last working day (end of day) of the

previous month.

Guaranteed Terminal Benefit

For the 6-year variant, 150% of annual premium will be paid along with last guaranteed monthly

income payment and for the 11-year variant, 200% of annual premium will be paid along with

last guaranteed monthly income payment.

Death Benefit

Death event before end of Policy Term/Premium Payment Term

o All premiums paid by the policyholder prior to date of death are immediately paid

to the Nominee.

o The Nominee will receive Guaranteed Monthly Income ("GMI") payable at

payout date of every month from the Policy Anniversary following the date of

intimation of death till the end of Policy Term.

o The Nominee will receive GMI along with Monthly Income Booster (MIB) as and

when due during the Payout Period.

o Guaranteed Terminal Benefit at the end of Payout Period.

o MNYL will fund the remaining premiums on behalf of the policyholder.

Death event After Policy Term/Payout Period

o Guaranteed Monthly Income (GMI) along with Monthly Income Booster (MIB)

will be paid as and when due for the outstanding Payout Period.

1.2.3.6 Health plans

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Max New York Life Lifeline - MediCash Plus

Our health insurance plans act as an intermediary in safeguarding your peace of mind and

eliminating all worries about your present and future medical expenses.

Max New York Life Lifeline - MediCash PlusTM is a health insurance plan that provides you with

cash benefit till you completely recover from your illness. With this plan, you get fixed cash

benefit towards hospitalization, ICU and recuperation (post-hospitalization), which will lessen

your monetary burden in an already difficult situation.

Key features

Multiple claims and cashless hospitalisation:

Cashless hospitalisation and cash benefit is available in over 4000+ network hospitals

across the country irrespective of actual billing.

In case you are hospitalized in a hospital outside our network, submit your bills,

discharge summary, etc and the amount will be reimbursed after assessment.

Premium guarantee:

The premiums are guaranteed / fixed for 5 years from the effective date. After 5 years, the

premium rates may be revised after reviewing the claims experience subject to prior approval of

IRDA.

Other benefits:

Guaranteed long term coverage for 10 years subject to premium payments made by you

and termination provisions

You may be entitled to certain tax benefits on your premiums and benefits. Please note all

the tax benefits are subject to tax laws prevailing at the time of payment of Premium or

receipt of benefits by you.

Benefits

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Hospital Cash Benefits:

In case of an unfortunate event of your being hospitalized for a medically necessary treatment or

surgery for any illness or injury, for a continuous and consecutive period of at least 48 hours, the

company shall pay fixed per diem benefit as per the unit/ scale of benefit applicable, for the

period of hospitalization but excluding the first 24 hours of such hospitalization and subject to

limits of the policy.

This is a fixed amount paid irrespective of your actual hospital bill.

In scenarios, when you are hospitalized again for the same illness or injury that occurred during

previous hospitalization, within 30 days from the date of discharge, we will pay from the first 24

hours of such hospitalization.

ICU Cash Benefit:

In case of your being required to and is admitted into an intensive care unit for a medically

necessary treatment or surgery of any illness or injury for a continuous period of 8 hours or more

during hospitalization for a continuous period of 24 hours or more, in addition to hospital cash

benefit, an intensive care unit cash benefit equivalent to 200% of hospital cash benefit will be

payable on per diem basis as per the unit/ scale of benefit subject to the terms and conditions of

the policy.

Recuperating Benefits:

Expenses don't stop at hospital discharge, do they? LifeLine - MediCash PlusTM also offers a

fixed lump sum recuperation cash benefit to help you meet your follow-up investigation costs,

consultation fees, cost of medicines etc.

Provided there has been a continuous and consecutive period of hospitalization of 7 days or more

and is discharged alive from the hospital. Then in addition to hospital cash and ICU cash benefit,

a lump sum recuperating cash benefit equivalent to 300% of the hospital cash benefit will be

payable as per the unit/ scale of benefit.

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Surgical Cash Benefit:

Over and above routine hospitalization expenses, a fixed Lump-sum amount will be paid under

LifeLine - MediCash PlusTM for more than 400 listed surgeries that you may undergo. These

surgeries are divided into 5 categories depending on clinical severity. Accordingly a certain

percentage of the maximum benefit will be paid out for a surgery undergone by you.

We also understand that cost of medical facilities is rising year by year. To partner with you in

attempting to meet them, our surgical cash benefit will increase every year at a simple rate of 5%

of the benefit amount at policy inception.

Total amount of Surgical Cash Benefit that can be availed throughout the policy term will be

twice the applicable benefit amount for that particular year surgical cash benefit for a few

surgeries is payable for few covered surgeries carried out in the first 90 days of the effective date

and few covered surgeries carried out in the first 24 months of the effective date except where

the surgery is carried out for treatment of an injury. List of such surgeries can be provided on

demand.

Max New York Life LifeLine Wellness Plus plan

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Max New York Life LifeLine Wellness Plus plan brings to you the advantage of a 360° benefit

plan. With medical expenses rising constantly, it is vital to protect yourself financially against

unforeseen events. Max New York Life’s LifeLine Wellness Plus plan provides coverage for a

wide variety of diseases and conditions, allowing you to live your life peacefully.

Key features

Critical Illness Coverage:

Covers 38 critical illnesses / conditions and offers up to 100% of the Sum Assured with a

maximum limit of Rs. 20 Lacs.

Term Period:

Premiums can be paid for a chosen period of term of 10, 15 or 20 years as per your needs.

Benefits:

You can choose any unit from 1 to 10 as your insurance coverage at the time of buying the

insurance. With Max New York Life’s LifeLine Wellness Plus plan, the scale of benefits is

drawn as below:

Max New York Life’s LifeLine-Safety Net

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Max New York Life’s LifeLine-Safety Net is a non -linked and non- participating term cum

health insurance plan that offers complete all round financial protection for you and your family.

It gives you an opportunity to live your life peacefully as it covers all your health needs under a

single plan at affordable rates. So choose Max New York Life’s LifeLine-Safety Net plan and

enjoy the best healthcare protection

Key features

Critical Illness Benefit:

On the diagnosis of any of the critical illnesses (Cancer, Coma, Kidney failure, Multiple

sclerosis, Heart attack, Paralysis/paraplegia and Stroke) Or

On the actual undergoing of the surgery of Major organ transplant, Coronary artery,

bypass surgery, Heart valve surgery, the company shall advance 50% of the sum assured

subject to the survival of the life insured for at least 28 (Twenty Eight) days after the

happening of the such insured event. .

Benefits:

Death Benefit Equal to the Sum Assured (minimum 6 lakhs and

maximum 40 lakhs) subject to deduction of Critical

Illness Benefit, if paid any

Critical Illness Benefit 50% of the Sum Assured (acceleration of basic death

benefit)

Total Permanent Disability Additional benefit of 50% of the Sum Assured

Accidental Death Benefit Additional benefit of 100% of the Sum Assured

1.2.3.7 Group plans

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Max Super Life

Max Super Life is a group term life solution that provides comprehensive protection against

death due to both accidental, non accidental causes. This product is a widely prevalent benefit

that helps a group in creating additional social security by means of life insurance for its

members. It could be offered to the following groups:

Max Super Life for Employer Employee Group

Max Super Life for Affinity Groups

Max Super Life in Lieu of Employees' Deposit Linked Insurance (EDLI) Scheme

Group traditional gratuity

Group Credit Life Insurance is a reducing term cover. The sum insured can be linked to the loan

repayment schedule; which means the insured member will get covered for outstanding loan

liability (as per the schedule) by payment of applicable premium.

As per the Gratuity Act of 1972, any establishment with at least 10 employees has a statutory

liability for payment of gratuity at a minimum of 15 days of last drawn basic salary + DA, for

every completed year of service subject to a maximum of Rs. 10 Lacs under the following

circumstances under -:

On normal / early retirement / resignation (Completion of 5 Years is applicable)

On his death, disablement due to an accident or disease (Completion of 5 years is not

applicable)

Employers can provide more than 10 Lacs of benefit as the act does not curtail them to

provide better benefits for their employees

On his / her Superannuation

Group Credit Life

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Group Credit Life Protects the Credit portfolio of the bank or any institution which grants loans,

by insuring the debt given to the borrower.

Let us explore some of the reasons why should life insurance be given while giving credit to the

borrower -:

Most of the financial institutions in the business of lending create provisions for the borrowers to

address scenarios' like loss of income due to disability or loss of job and protect death due to

accidental causes. However this provision is not complete as the lending institutions today have

various options to ensure borrowers convenience to pay for the mortgage, like, by extending the

mortgage schedule or mortgage payment deferment and by doing so, the lending institution also

makes profit through additional interest earnings.

Besides the cover provided through these products is not comprehensive for the borrower, due to

many fine print conditions and clauses that make the claim settlement difficult and thus

nullifying the purpose of insurance to cover the mortgage liability.

In comparison to any of the above bundle insurance products, Life insurance is a wholistic

solution that covers the borrower’s liability without any fine print exclusions and conditions, in

the event of death due to both accidental and non accidental 0r natural causes.

The financial institution with the advantage of a group platform can extend the benefits of life

insurance cover not only to their entire term loan product line from home, financial and personal

loans, but can also look at extending it to other products like deposits & other Para banking

solutions.

While innovative Insurance solutions could be created for the benefit of the customer, the cost

and administrative benefits and the flexibility at a group platform could be enjoyed by both the

financial institution & customer.

2.1 Service

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“A service is any act or performance that one party can offer to another party ..i.e.

essentially intangible and does not result in the ownership of any of the factor of production. Its

production may be tied to a physical product.”

2.1.1Characteristics of service:-

Intangibility: services are intangible in nature unlike tangible products insurance service

cannot be seen, touch or senced but it’s services and utility can be felt.

Inseparability: Service are typically produced and consumed simultaneously. This is not

true of physical goods, which are manufactured, put into inventory, distributed through

multiple agencies and consumed later. If a person renders the service then the providers is

a part of service, because the client is also present as the service is produced, provider-

client interaction is a special feature of service marketing. Both provider and client affect

the outcomes several strategies exit for getting around the shortage of time problem. The

service provider can learnt to work larger groups. The service provider can learn to faster.

The service organization can trained more service providers and build up client

confidence.

Variability: because the services depends on who provides them and where they are

provided services are highly performing ascertaining operations, other are less successful.

Service firm can take three steps towards quality control:

1. Investing in insurance hiring and training advisers.

2. Standard dizing the service performance process throughout the organizations.

3. Monitoring customer satisfaction through suggestion and complaint system,

customer surveys and comparison in investment.

Perishability : services cannot be started. The perishability of services is not a problem

when demand is steady. When demand fluctuates, service firms have problem for

example : public transportations companies have to own much more equipments because

of rush-hours demand than if demand were even throughout the day.

2.2 What is service Gap?

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The difference between what customer expected and what they perceived was delivered

we have adopted and extended their framework to identify a total of seven types of gaps that can

occur at different point during the design and delivery of a service performance.

Service gap

It is defined as the difference between what the customer was expecting and what is

being delivered.

Service gap is the difference between what customer expected and what they perceived

was delivered.

2.2.1 Service performance

Performance indicates the response time of the service as experienced by the and user. There are

three types of service performance matrics

Effectiveness matrics:

For eg number of error-free order or bills processed the number of customers giving you are

excellent rating.

Capability matrics:

For eg the mean rating of attributes of service like friendliness of greeting, service time, service

knowledge about, service features etc.

Efficiency matrics:

For eg the average utilization of manpower, average time spent on reworking of fault service ,

average overtime, in a period etc.

2.3 Service Qaulity

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The service is defined as “A set of quality requiremqnts on the collective behavior of one

or more objects.”

The 10 criteria that customer rely on while evaluating the service quality

Reliability

Access

Security

Credibility

Degree of customer understanding

Responsibleness

Competence

Courtesy

Tangibles

Communication

2.3.1 Types of service gap

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1. Knowledge gap:

Difference between what service provider believe customer expect and customer

actual needs and expectation

2. Standards gap:

Difference between management’s perceptions of customer expectations and the

quality standards established for service delivery.

3. Delivery gap:

Difference between specified delivery standards and the service provider’s actual

performance on these standards.

4. Internal communication gap:

Difference between what the company’s advertising and sales personnel think are

the product’s features, performance, and service quality level and what the company is

actually able to deliver.

5. Perceptions gap:

Difference between what is, in fact, delivered and what customers perceive they

have received.

6. Interpretation gap:

Difference between what a service provider’s communication efforts promise and

what a customer thinks was promised by these communications.

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PerceivedService

Expected Service

CUSTOMER

COMPANY

CustomerGap

GAP 1

GAP 2

Gaps Model of Service Quality

GAP 3

External Communicat

ions to Customers

GAP 4Service Delivery

Customer-Driven Service Designs and Standards

Company Perceptions of

Consumer Expectations

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3.1 Main Objectives:

The main objective of preparing this report is to compare the difference between perceived

quality and service provided by Max New York Life Insurance company Ltd in surat city and to

know the public awareness regarding life insurance and their knowledge, attitude, and preference

towards various insurance policies and investments.

3.2 Sub-objectives:

Proper understanding and analysis of life insurance industry.

To know why one has to invest in life insurance.

To know the Preferences of the customers.

Current trends life insurance in the Indian market.

Customer’s expectation from the service providers.

Different views of professional advisors.

To know about brand preference about Max New York Life Insurance and consumers

preference about Max New York Life Insurance.

Conduct market survey on a sample selected from the entire population and derived

opinion on that research.

3.3 Nature of Research:

There are two types of research:

1. Basic Research

2. Applied Research

I am comparing GAP Between perceived quality and service provided by Max New York Life

Insurance and I am doing basic research.

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3.4 Scope of research:

The survey helps Max New York Life insurance company to analyse the customer expectation

from the company regarding service provided by them. It also helps in knowing consumer

preference and attitude towards various investment option and help manager in framing policy

and deciding strategies.

It helps to know about savings and investment by public and various investments option and to

know the financial condition and scope of insurance market.

3.5 Data collection:

There are two methods to collect the data:

1. Primary data

2. Secondary data

This report is based on primary data. Research has been done by primary data collection, and

primary data has been collected by interacting with various people.

3.6 Data collection Time Period :

The time period for the research is from January begining up to february Beginning.

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3.7 Sampling:

i) Sample Size:

I have conducting a survey a sample size of 100 people and it is selected randomly without any

bias.

ii) Sampling Frame

I have conducted our survey in Surat City.

iii.) Sample Element

I am conducting service gap between perceived quality and service provided by Max New York

Life insurance company so for this my element is its customer’s.

iv). Sampling Method

There are two types of sampling methods:

1) Probability sampling method

2) Non- Probability sampling method

I have adopted Non- Probability sampling method as our method and in Non- Probability

sampling method I have adopted Convenience Sampling for our survey.

v.) Survey Tool & Method

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A brief questionnaire is prepared for conducting a survey this question are prepared on the base

of study and results and properly analyzed.

There are four types of survey methods:

1) Telephonic Interview

2) Mail Interview

3) Personal Interview

4) Electronic Interview

I have used Personal Interview method to do the survey.

3.8 Response Rate:

The rate of response of sample population is good most of them are familiar with this investment

option and we can say that our response rate is 100%.

3.9Pilot Survey:

We have conducted a pilot survey and our questionnaire was passed in pilot survey. There was

no correction require in our questionnaire.

3.10 Limitations of the Study:

The major limitation was unwillingness of respondents to reveal information. Due to lack of

sufficient time and hesitation to reveal information regarding their investments, it was a difficult

task to extract information from them. Sample size was also small i.e. 100. Therefore, it is very

difficult to infer correct conclusions from small sample.

Data analysis

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Q.1) Have you purchased any policy from Max New York Life Insurance?

Ans code Option No of

response

1 Yes 100

2 No 0

Chart 1

Yes No 1 2

0

20

40

60

80

100

120

No of response

No of response

Table 1

Interpretation : The people surveyed were all customers of max new York life insurance

company as they all had purchased policy of the company.

Q.2) From where do you come to know about Max New York Life Insurance?

Page


Ans code Option No of response Percentage

1 Advertisement 41 41

2 Hoarding 25 25

3 Insurance agent 16 16

4 Friend, relative or

family member

15 15

5 Any other, please

specify

1 1

Chart 2

Advertisement Hoarding Insurance agent Friend, relative or family member

Any other, please specify

1 2 3 4 5

0

10

20

30

40

50No of response

TABLE 2

Interpretation: From the survey we found out that maximum people were aware of Max New

York Life Insurance Company through advertisement and hording. Company needs to advertise

more in order to be recognize by people.

Q.3) Rank the following features according to your choice?

Ans code Option Mean Rank

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1 Goodwill of the

company

2.89 3

2 Good rate of

return

2.21 2

3 Service provided

by the company

1.44 1

4 Advice by others 3.39 4

Chart 3

Good

will

of t

he co

mpa

ny

Good

rate

of r

etur

n

Serv

ice p

rovi

ded

by th

e co

mpa

ny

Advi

ce b

y ot

hers

1 2 3 4

32

1

4

Rank Rank

Table 3

Interpretation: The cusromers choose service provided by the company as their fisrt preference

ahead of good return and goodwill of the company. While good rate of return was their second

prefence and goodwill of the company was third.

Q.4) In Which plan you have invested ?

Ans Option No of Percentage

Page


code response

1 Protection plan 37

2 Child plan 32

3 Retirement plan 19

4 Growth plan 24

5 Savings plan 35

6 Health plan 41

7 Group plan 12

Chart 4

No of response05

1015202530354045

1 Protection plan2 Child plan3 Retirement plan4 Growth plan5 Savings plan6 Health plan7 Group plan

Table 4

Interpretation: From the survey I found out that most of the people invested in health and life

insurance. There is moderate growth among those people investing in child and savings plan.

Q.5) Are you updated with New Schemes of Max New York Life Insurance ?


response

Percentage

Page


1 Yes 69 69

2 No 31 31

Chart 5

69%

31%

No of response

1 Yes 2 No

Table 5

Interpretation: From the survey it can be seen that majority of the people are updated with new

schemes of the company.

Q.6) Mention the quality for below services in Max New York Life Insurance ?

Service Excellent Good Satisfactory Poor Total

Employee 12 29 46 13 100

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behaviour

Premium plan 31 37 27 5 100

Loyalty 20 41 31 8 100

New schemes 35 41 10 14 100

Total 98 138 114 40 400

Chart 6

Excellent Good Satisfactory Poor 0

5

10

15

20

25

30

35

40

45

50

Employee behaviour Premium plan Loyalty New schemes

Table 6

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Interpretation: From the survey it is found that majority of the customers were satisfied with

the employees behaviuor as well as they like the schemes of the company and they felt that

premium plan were good for

them.

Q.7) Do you get regular updates of

premium payment from the

company?

Chart 7

Table 7

No of response

1 Yes 2 No

Chart 7


response

Percentage

1 Yes 72 72

2 No 18 18

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Interpretation: From the survey we

found that 72% of the customers were

getting regular updates regarding

premium payment. In insurance

industry it is very important to keep

customers updated with their

investment and policies.

Q.8) How is the behaviour of employees towards you?

Table 8


response

Percentage

1 Excellent 37 37

2 Good 14 14

3 Average 41 41

4 Not bad 8 8

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Excellent Good Average Not bad1 2 3 4

05

1015202530354045

No of response

No of response

Chart 8

Interpretation: From the survey it is seen that 37 % of customers were happy with employees

behavior with them while 41% found it very ordinary. Where as 14% of people found it good. In

any service providing company it is very important for employees to maintain good behavior in

order to retain customers.

Q.9) Are you satisfied with the service that you received ?

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Table 9

High

ly S

atisfi

ed

Satis

fied

Neut

ral

Diss

atisfi

ed

High

ly D

issati

sfied

1 2 3 4 5

12

5519 9 5

No of responseNo of response

Chart 9

Interpretation: From the survey we can say that 55% of the employees were satisfied with the

service they received and less than 10% were not satisfied.

Q.10) Have you ever any problem or complain for Max New York Life Insurance ?


response

Percentage

1 Highly Satisfied 12 12

2 Satisfied 55 55

3 Neutral 19 19

4 Dissatisfied 9 9

5 Highly Dissatisfied 5 5

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response

Percentage

1 Yes 54 54

2 No 46 46

Chart 10

Yes No 1 2

42

44

46

48

50

52

54

56

No of response

No of response

Table 10

Interpretation: From the survey it was found that 46% of respondents had no complaint against

company while 54% respondents had their complaints. The 54% respondents shared their conplaints

regarding various reason in the following question. This results shows the shortfalls of the company and

give chance to improve them

Q.11) If yes ,related to

Ans code Option No of Percentage

Page


response

1 Product 16 29

2 Premium 15 28

3 Service 11 20

4 Other 2 4

Chart 11

Product Premium Service Other 1 2 3 4

0

5

10

15

20

25

30

35

Percentage of Response

Percentage

Chart 11

Interpretation:From the survey it was found that 54% of customers had complaints out of

which 20% of the complains were related to the service provided to them. And 29% of customers

had complaints regarding policies of the company while 28% of customers had problem

regarding premium payment.

Q.12) Have your problems(s) were heard and solved by respective company authorities?

Ans code Option No of Percentage

Page


response

1 Yes 91 91

2 No 9 9

Table 12

No of response

1 Yes2 No

Chart 12

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Interpretation: from the survey we found that 91% of the problems were solved by the

authorities.

Q.13) Rate the standard of the

advisor?

Table 13

excellent good satisfactory poor1 2 3 4

0

5

10

15

20

25

30

35

40

No of response

No of response

Chart 13


response

Percentage

1 excellent 29 29

2 good 38 38

3 satisfactory 20 20

4 poor 13 13

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Interpretation: from the survey we found that the standard of advisor is found ood by majority

of the people.

Q.14) Will you recommend Max

New York Life Insurance to other

Table 14

Yes No 1 2

0

10

20

30

40

50

60

70

No of response

No of response

Chart 14


response

Percentage

1 Yes 68 68

2 No 32 32

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Interpretation: from the survey we found 68% customers are willing to recommend it to the

other people.

5. Findings

From the above survey the following results were found.

Max New York Life Insurance is one of the biggest company in the private insurance

market and has wide range of policies. There is lot to offer to the customers by the

company.

Advertisement is one of the biggest marketing tool to create awareness among people

about the company. Max New York Life Insurance Company has used this tool very

effectively as maximum of their customers came to about the company through

advertisement.

In insurance market customers give equal importance to service quality of the company

than rate of return on their investment. As it is very necessary to maintain customers trust

that their investment is in safe hands and will be return to them when they will need.

There is a rapid increase in the people investing in life insurance as well as in other

schemes life retirement plan, health plan, child plan etc. Thus it very important to offer

various range of policies to the customers as per their requirement. The insurance market

has increase grown to 23 thousand crore market in 2011.

Insurance business depends upon timely payment of premium by them so it very

necessary to give updates of when and how much premium is to be paid. Max New York

Life Insurance Company provides these services to their customers. Of which 72% of

customers said they received this service.

In order to retain customers behavior of the employees plays important role. Most of the

customers of Max New York Life Insurance Company are satisfied with behavior and

they are also satisfied the service that they received from the employees.

The gap between perceived quality of service and service provided by the company

occurs when either consumer expects much more than what is offered ro them or when

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the company fails to provide the service which was promised by them. In Max New York

Life Insurance Company the customers are experiencing the Gap because of high

expectation by the customers.

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6.1 Recommendations

The study has provided with the useful data from the respomdents. There is lot to be

recommended. Following are the recommendations:

There is a need for better promotions for the investment products and services. The

company should advertise its products through television because it will reach to the

masses.

More returns should be provided on Insuarnce plans.

Policies should be easy to understand by the common man as when they have proper

information it will create good effect on the customers.

There should be guaranteed return with minimum risk of investment.

The customers should be provided with extra services like reminder of paying premium,

they should be aware how much premium is to be paid.

Personnel should be properly trained to understand the customers problem and try to

solve it as early as possible.

Customers griveinces should be solved as soos as possible.

As the company provides various facilities to its customers. It should be made clear that they get

maximum benefit of the service available to them. They should have choice while selecting a

suitable insurance plan. This will definitely add to the goodwill of the company and profit will

increase.

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6.2 Conclusion

After overhauling the all situation that boosted a number of Pvt. Companies associated with

multinational in the Insurance sector to give benifitting competition to the established behemoth

to Max New York Life Insurance ltd, I come at the conclusion that

There is very tough competitions among the private insurance companies on the level of

new trend of advertising to lull a major part of customers.

Max New York Life Insurance ltd left behind in the present race of advertisement.

Max New York Life Insurance ltd has vast market and very firm grip on its traditional

customers.

IRDA is also playing very comprehensive role by regulating norms mandating to private

players in this sector, that increases the confidence level of the customers to the private players.

Max New York Life Insurance

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