Project on Birla Sunlife ulip

A Project ReportOn

“INSURANCE SECTOR – AN EVALUATION

OF COLLECTIVE RISK BEARING (ULIP)

WITH RESPECT TO BIRLA SUN LIFE”

Submitted by

Neha S. Sharma

Under Supervision of

>>

Datta Meghe Institute of Management Studies

Atrey Layout,nagpur

DATTA MEGHE INSTITUTE OF MANAGEMENT STUDIES

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PREFACE

It’s a magic mantra for the marketer. It says the customer is best satisfied when it

least expects it. Today’s highly –competitive marketplace, when mere satisfaction does not

ensure loyalty, decrees this. To take potential defectors by surprise, you have to behind

customer expectation by anticipating its need and then surpassing them with constantly

superior products or service or delighting the customer. Nor must be delight be a one-off

offering, which can be bartered for a lifetime purchase. You must be prepared for a lifetime

purchase. You must be prepared to it again and again, increasing the level of satisfaction at

each encounter with the customer. It was in the late eighties that corporation discovered the

magic mantra: customer loyalty. In the mid nineties the manta is being modified somewhat.

Instead of merely satisfaction, the enlightened companies have now started talking about

customer loyalty. The distinction is important increasingly research data is showing that

even customers who claim to be satisfied tend to desert a company whenever its rival

unleashes a new marketing program. And any marketing exercising that merely aims at

satisfying customers is unlikely to reap any term benefits.

Marketing’s traditional connection with customer are no longer sufficient I a real time

world focus groups, market research, consumer surveys and other tools for probing the

consumer wants and needs are and always have been limited. Customer surveys must view

with skepticism. By contrast, continuous connection with customers can provide

information that focus groups and surveys cannot. A customer is rarely interested in the

products per she is only interested in what the product Cando for him. That’s why, any

marketer who can help the customer get the maximum benefits from the products stands to

gain a district competitive edge in the market place.


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ACKNOWLEDGEMENT

I would like to express my sincere gratitude to Mr.J.K. Satya Narayan Rao, branch

manager of BIRLA SUN LIFE INSURANCE COMPANY LTD. Nagpur for giving me an

opportunity to undergo this summer training in his esteemed organization.

I also extend my sincere thanks to the employees of BIRLA SUN LIFE INSURANCE CO.

LTD. Nagpur. Without their support and guidance, this project could not be completed.

Though out the project work, they had been a constant source of motivation to me.

Lastly I would like to thank all the facility members of marketing department of our

institute who guided me to fulfill my project.


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STUDENT DECLARATION

STUDENT DECLARATION

I hereby declare that this project entitled “INSURANCE SECTOR -

AN EVALUATION OF COLLECTIVE RISK BEARING (ULIP), w.r.t.

BIRLA SUN LIFE INSURANCE COMPANY LTD.” Submitting for partial

fulfillment of the requirement for the degree of B.B.A. from RTM NAGPUR

UNIVERSITY is of my original work. This report is only for education

purpose and not for any other purpose.

NEHA S. SHARMA

DATE B.B.A (FINAL YEAR)


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CONTENTS

1. PREFACE2. ACKNOWLEDGEMENT3. STUDENT DECLARATION4. CERTIFICATE OF HEAD OF INSTITUTE5. CERTIFICATE OF OFFICER OF CONCERNED ORG.

PART-1

1.0 INTRODUCTION1.1 BRIEF HISTORY OF THE UNIT-LINKED INSURANCE1.2 BRIEF HISTORY OF BIRLA SUN LIFE INSURANCE CO.1.3 ORGANISATION STRUCTURE1.4 BRIEF PROFILE OF SERVICES OF ORGANISATION1.5 AREAS OF EXCELLENCE1.6 GROWTH OF BSLI IN UNIT-LINKED LIFE INSURANCE1.7 PROBLEM IN ORGANISATION

2.0 DISTRIBUTION NETWORK3.0 PRICING POLICY OF THE COMPANY4.0 OBJECTIVES OF THE STUDY

PART-2

5.0 RESEARCH METHODOLOGY

5.1 SAMPLING PLAN

5.2 TIME SCHEDULE

6.0 DATA COLLECTION METHOD

6.1 PRIMARY SOURCES

6.1.1 QUESTIONNAIRE


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6.1.2 SURVEY METHOD

6.1.3 INTERVIEW

6.1.4 OBSERVATION METHOD

6.2 SECONDARY DATA

7.0 TABULATION AND ANLYSIS

8.0 SWOT ANALYSIS

9.0 CONCLUSION

10.0 SUGGESTION

11.0 ANNEXURE

11.1 QUESTIONNAIRE

11.2 SURVEY FORM

11.3 ILLUSTRATION OF THE COMPANY POLICY

(All the documents that are given by the company at the time of the

policy)

12.0 BIBLOGRAPHY


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1.0 INTRODUCTION:

1.1 BRIEF HISTORY OF UNIT- LINKED INSURANCE : The “unit

linked life insurance policy” as it is understood and practiced in the

west was introduced in our country only in 2000 when LIC brought in

to the market a policy called “BIMA PLUS”. As a data, expect two or

three new companies all the companies are selling the unit linked life

insurance policies. The term “unit” in our country is somehow

identified only with the ‘units’ sold by UNIT TRUST OF INDIA. This

product is also called “EQUITY LINKED POLICY” or “MARKET

LINKED POLICY” to indicate that the returns under these plans are

linked to the market returns of the equities or shares.

The credit of introducing the first unit linked plan goes to UTI when

they brought out the Unit linked life insurance (ULIP) in 1971,In 1989

LIC Mutual Fund introduced the ‘DhanRaksha’ Plan identified to the


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ULIP. The term of the policy in either 10 or 15 years. With the effect

from 1-7-02 the target amount under these two schemes has been

introduced to Rs. 2 lakhs from Rs.75, 000.it works like this: from the

uniform contribution for each year (for example @Rs.20,000 for ten

years) a small portion is used to buy term death cover for Rs.2 lakhs

and the balance is invested in units and at the end of ten years the

accumulations made in your account is given as the maturity benefit

along with a 5 or7.5% bonus. There is some restriction in full death

cover in the first two years. After two years the full death benefit will

be paid equal to the target amount. a free accident cover is also given

for Rs.50,000. From April 2000 this plan is made NAV driven and UTI

has made several beneficial changes. In fact, these plans are considered

to be the cheapest insurance with good returns! As life insurance people

are not making these plans, they are not very popular in large numbers.

The concept involved in these unit or equity –linked policies is that as

the major part of your premium amounts paid over a period of years is

invested in equities and other capital market instruments year after year,

the return when it comes will not be affected very much by inflation as

it happens in a maturity value of the policy in any average life

insurance policy for the same period. Of course, the insulation against

inflation is the insulation against inflation is subject to the usual

investment risks and the investments performing reasonably well.


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The idea of linking insurance benefits to the performance of units was

first tried for annuities. The annuity benefit was for a fixed number of

units, the value of which depended upon the market value of a portfolio

of equity assets. The teachers insurance and annuity association in USA

first introduced this method in 1952 to pay the annuities in

collaboration with the college retirement equity fund. The insurance

companies could not follow this method to extend the benefit to the

general public due to legal obstacles and funding problems till 1964. In

1959 the US supreme court ruled that such insures will be subject to the

regulation of securities and exchange commission (SEC) only in 1964

the SEC permitted insurance companies to introduce such annuities.

Each groundwork for successfully operating unit-linked life insurance

policies was first made in Holland, Netherlands, Canada and UK.

However, life insurance contracts linking to the performance of units

came only in 1976 in USA. The SEC ruled that life insurance contracts

with an equity base would be subject to the securities act of 1933-34

and investment company act 1940. The agents selling such policies

were also to take special licenses.

While it is called “Unit- linked life insurance policy” in UK it is called

“Variable insurance contracts” in USA. It is rightly called “variable”

because both the premiums and the benefits under the policy are

‘variable’ according to eh choice of the policyholder. What is paid


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under the policies is the returns on the performance of the chosen

equities and not a fixed sum as in an ordinary policies. The majority of

them are whole life plans.

Basically, in USA, it offers the life insurance coverage combined with a

tax- differed investment feature. Your premium payment are spent on

three things:

1) The cost of the life insurance;

2) Various insurance company fees-including sales charges which are

deducted from each premium payment and

3) Your tax –deferred investment account, whatever amount is left after

the first two goes into the third. And the amount is probably a lot less

than you would hope. There are stringent regulations on selling these

policies in other countries.

For example, in USA, since the variable life insurance products

switches the investment risk from the insurance company to the policy

owner, these types of policies are considered both insurance contracts

and securities and are regulated by both the securities &exchange

commission and the state insurance commissioner. An agent authorized

to sell variable life insurance must be licensed by the state as well as by

the National Association of Securities Dealers (NASD) to work as a

registered representative.


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As a security, variable insurance products are regulated by the

securities &exchange commission, which brings out a new set of agent

requirements dealing, primarily with full and fair disclosure laws. For

example, any sales presentation or illustration must be preceded by or

accompanied by a prospectus approved by the SEC. all materials used

in selling and the SEC must also approve promoting these product prior

to use.

In our country, however, only the IRDA regulates this policy and the

investment of the premiums collected under the policies. Also it is

enough if the selling agent has passed the basic IRDA insurance license

examination. No special qualifications are need by the agent and SEBI

does not have any control over the designing of or illustration prepared

by the insurance companies in selling such policies.

1.2 BRIEF HISTORY OF BIRLA SUN LIFE INSURANCE COMPANY LTD.:

A joint venture between the Aditya Birla Group and Sun life Financial,

Birla sun life insurance forayed into the life insurance and retirement

planning business by pioneering the unique unit-linked solutions in

India. In just over 2 years of its launch, the company has catapulted to

second position in new business premium in the highly competitive

private life insurance industry based on its strategy of unit-linked plans.


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1.2.1 THE ADITYA BIRLA GROUP: “Aditya Birla”, a name that evokes

all that is positive in business and life. It typifies integrity, quality,

performance, innovation, perfection and above all, character.

In operation for over 50 years now, the Aditya Birla Group is one of

India’s largest business houses. A highly respected and admired group,

rooted in performance ethics based on value creation for its multiple

stakeholders. The Aditya Birla Group’s operations span over 40 units

across 18 countries, anchored by a 72,000 strong committed workforce,

a group turnover exceeding Rs.27, 000 crore, an asset base which

exceeds Rs.20, 000 crore and a market capitalization of over Rs.13, 000

crore spread over 7 lakh shareholders. Known for its rack solid

fundamentals it nurtures a culture where success does not come in the

way of the need to keep learning afresh to continue innovating and to

carry on experimenting.

Being one of the largest corporate houses in India, and Aditya Birla

Group enjoys a dominant position in all the sectors in which it operates.

It is the world’s largest producer of viscose staple fibre, largest single

location aluminum plant and the largest single location refiner of palm

oil. What’s more, it is the second largest producer of insulators and the

fifth largest producer of carbon black in the world.


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In India, the group is the single largest producer of viscose filament

yarn, aluminum, white cement and the third largest in grey cement. Not

to mention, the recognition of being the market leader in the ready to

wear branded apparel segment with brands like Allen solly, Louis

Phillip, van heusen and peter England.

The flagship companies of the Aditya Birla Group include some of the

largest and most respected companies in India such as grasim industries

limited, Hindalco industries limited, Indian Aluminum Company

limited, Indian Rayan Industries Limited, Indo Gulf Corporation

Limited. The Group has larged power relationship with large

corporations like Hindustan Petroleum, Tata, Powergen Plc and AT&T.

The group fosters a culture that promotes excellence and rewards

entrepreneurship. It endeavors to make the workplace a source of

creativity, innovation and self-fulfillment for its employees. Nurturing a

corporate culture imbedded with a high level of commitment and a

sense of shared destiny.

The mission of the Aditya Birla Group is creation of value for its

customers, shareholders, employees and the society at large.


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1.2.2. SUN LIFE FINANCIAL: Sun life financial is a leading international

financial services organization. With a history that dates back to 1871,

Sun life financial has evolved from a single mutual life insurance to one

of the most highly rated insurance and wealth management institution

in the world. Sun life financial knows its value lies in more than assets

and history. It also lies in the culture of the integrity and the pursuit of

excellence that have marked all of the organization endeavors. Today

the sun life financial group of comp anise and the partners are

represented globally in Canada, the United States, the Philippines,

Japan, Indonesia, India and Bermuda.

In March of 2000, Sun life financial services of Canada, inc, Sun life

financier’s parent company, listed its shares on stock markets in

Toronto, New York, London, and Philippines. This new access to

shareholders equity provides Sun life financial with even greater

opportunities to grow around the world.

The Sun life financial group of companies around the world, offer

innovative and practical financial solutions to individuals and

corporations:

Life, Health and Disability

Pension Funds and Plans

Investment Management

Annuities and Savings


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Trust, Brokerage and Banking

Sun life assurance Company of Canada, sun life financier’s primary

insurance business, has excellent ratings with the world’s top ratings

agencies. With assets under management as on September 30, 2000

totaling more than CDN$345 billion, it ranks amongst the largest

international financial services organizations in the world. Sun life

financial enjoys independent rating that place us at the top of the

financial sector in North America.

1.2.3 VISION : To be a world-class of financial security to individuals and

corporate and to be amongst the top three private sector life insurance

companies in India.

1.2.4 MISSION : To be the first preference of our customers by providing

innovative need based life insurance and retirement solutions to

individual as well as corporate. Well –trained professionals through a

multi channel distribution network and superior technology will make

these solutions available.

Our endeavor will be to provide constant value addition to customers

throughout their relationship with us, within the regulatory framework.


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We will provide career development opportunities to our employees

and the highest possible returns to our shareholders.

1.2.5. OUR VALUES :

INTEGRITY

TRANSPERENCY

CUSTOMER FOCUS

EXCELLENCE

INNOVATION

MERITOCRACY

RESPECT FOR THE INDIVIDUAL

1.2.6. OUR FEATURES : Our unit-linked flexi products are based on

universal life platform, catering to the customer’s twin needs of

insurance and investment. Our customers have appreciated these

products, which have the beneficial features of life insurance, mutual

funds and banks. Some of these features are described below:

1. PROSPECTS FOR GROWTH WITH UNDERLYING GURANTEES :

According to their risk appetite, the customers can choose out of three

investment options, viz, protector (Representing a low risk portfolio),

Builder (Medium risk portfolio) or Enhancer (High risk portfolio) with

guaranteed returns fund, at present ranging from 3%-6%. The flexibility


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of changing the investment option initially availed by them is also

available.

2. GUARANTEES PROVIDE SAFETY NET : The policyholders enjoy the

upside returns provided by the portfolios in all the investment options.

As on 31st December 2002, the annualized returns since inception under

protector, builder and enhancer options were 9.75%, 11.12% and

14.74% respectively, which is above the minimum level guaranteed.

3. CONVENIENCE IN PAYMENT OF PREMIUMS: The customer has the

option of paying any amount of premium, any number of times (within

a policy year) irrespective of the mode. Traditional products available

in the market do not offer such a facility.

4. BUILT-IN GUARD AGAINST UNITENDED LAPSATION: These products

provide continuity of risk coverage for a long time even if the

premiums remain unpaid. The continuity of risk is ensured with the

help of monthly recovery of cost of insurance and automatic premium

advance facility. A policy can lapse if and only if the policy fund

pertaining to the individual policy becomes negative.

5. RISK COVER DOES NOT DECRESE DURING THE TERM OF THE POLICY :

Unlike traditional life insurance policies, where the sum at risk (Sum

assured –paid up value) actually goes on decreasing, in our flexi


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policies, death benefit is sacrosanct and and remains uniform

throughout the tenure of the policy. In case of death, the face amount as

well as the policy fund representing the saving portion in the premium

is payable.

6. ACCELERATED PAYMENT OF PREMIUM POSSIBLE : Depending on

one’s financial situation a shorter premium-paying period can be

selected, with the advantage of greater accumulation resulting into

higher death/surrender/withdrawals/ maturity benefits.

7. LIQUIDITY ON TAP : Traditionally, insurance products have been know

to be illiquid. Policy loans are at a cost and surrenders defeat the very

purpose of insurance. In such an environment, the facility of

withdrawals without affecting the risk cover is one of our unique

features.

8. NO PENALTY FOR SURRENDER : Unlike in traditional type of life

insurance policies where the policy holders have to suffer a financial

loss on surrender of their policies, our products do not provide any

surrender charge after the first four years.

9. CUSTOMERS CAN SEE THEIR MONEY PERFORM: Our policyholders

are provided with an access code to know the policy values online.

Besides, the investment performance of the various options is published


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every quarter and the policyholders receive a yearly statement

reflecting the status of the policy fund.

10.OTHER BENEFITS :

a. Lower premium for female customers

b. ‘Age last birthday’ gives the customers advantage of lower age

c. A policy can be customized to the policyholder’s requirements.

For instance our ‘Flexi life line’ with the facility of limited

premium payments and withdrawals thereafter, becomes a

veritable pension plan with attendant tax benefits.

d. Detailed illustration at the point of sale


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1.3 ORGANISATION STRUCTURE : two guides Biral sun life

insurance business operations if its core values, namely integrity and

transparency. BSLI complies with a all regulations governing the life

insurance business. A high degree of transparency is followed in al the

business practiced and procedures and all employees are governed by an

internal code of conduct.

BSLI abides by the corporate governance framework in accordance with

the Kumar Managalam Birla committee as applicable to the life insurance

business, as well as the provisions of the insurance act, 1938, the

companies act, 1956 and the IRDA regulations.

The various committees overseeing the business are:

BOARD OF DIRECTORS

Mr. Donald Stewart- chairman

Mr. Kumar Mangalam Birla

Mr. Gary M. Come ford

Mr. Douglas C. Hence

Mr. S.K. Mitra

Mr. B.N.Purankmalka

Hish Highless Maharaja G.Singh

Mr. S.N. Talwar

Mr. G.P. Gupta


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AUDIT COMMITEE

Mr. B.N. Puranmalka Mr. S.K. Mitra Mr. D.C. Henck Mr. G.M. Cmerford

INVESTMENT COMMITEE

Mr. S.k. mitra

Mr. B.N. Puranmalka

Mr. P.J. Akers

Mrs.K.Gupta

Mr. A. Fenn

Mr. N.B. Javeri

Mr. S.Shah

EXECUTIVE COMMITTEE

Mr. G.M. Comeford

Mr. D.C. Heck

Mr. S.K.Mitra

Mr. B.N. Puranmalka


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Apart from the above committees overseeing the business operation, the

CEO and CGO certify the audited accounts of the company and company

secretary submits a compliance certificate.


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THE BSLI MANAGEMENT TEAM

Mr. Nani Javeri

(CEO)

Mr. Peter Akers

(CFO and appointed actuary)

Mr. E.N.Goveia Mr. P.Nandagopal

(Senior vice president –direct sales force) (Senior vice president-alternative

Channel and group life)

Anjana Grewal Jaskirat Kaur Snehal Shah K.S.Gopalkirshnan

(marketing &comm.) (group life &personal) (control & admin.) (actuary)

Mr. K.H. Venkatachalam (chief manager-human resource)

Mr. Mayank Braganaza (chief manager- finance and planning)

Mr. Sanjay Parikh (chief manager- product development)


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1.4 BRIEF PROFILE OF SEVICES OF ORGANISATION:


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Pioneered by Birla sun life insurance, Unit- linked solutions bring

together the best of life insurance and investment, together. A unique

combination of security from life insurance and returns from

investment. Introduced in line with the latest global trends, the unit-

linked plans put you in total control of your money. They are simple

transparent and flexible. What’s more, they offer 3% minimum

guaranteed overall returns on the premium.

Birla sun life insurance provides individual as well as group life

insurance solutions aimed at the corporate sector.

1.4.1 INDIVIDUAL LIFE PLANS: Birla sun life insurance offers number

of individual life plans, which can be given below-

1.4.1. FLEXI SECURELIFE RETIREMENT PLAN: This is a unit-linked

retirement plan to give you efficient returns in the long term so as to

build a sufficiently large corpus of savings on retirement. The planes

built in tow phases: the accumulation phases and annuity phase. During

the accumulation phase the plan gives you a choice of three investment

options to invest your money with an option to switch between these

funds to match your risk appetite. What’s more it offers a guaranteed

minimum return of 3% on your premium (deposit) amount net of all


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charges and deductions in this phase. In the annuity phase the plan

gives 2 options to choose from.

1.4.1.FLEXI LIFE LINE PLAN: This plan offers a life insurance cover till

the age of 100 years thus providing you with a lifetime of security. It is

an investment for your future in which you accumulate large savings

through the benefits of compounding. The plan gives you the flexibility

of making tax-free withdrawals and can be customized as tax efficient

pension during your working years while the plan continues for a

lifetime.

1.4.1 FLEXI SAVE PLUS ENDOWMENT P LAN: It is a flexible life

insurance plan, which offers the dual benefit of a life insurance cover as

well as large tax-free savings in the long term. The plan is taken for a

specified period and the benefits are payable in the events of death

during the tenure of the plan or at maturity. The unit-linked nature of

the plan coupled with the benefits of compounding can lead to very

efficient returns in the long term.

1.4.1 FLEXI CAH FLOW MONEY BACK PLAN : It is a flexible life

insurance plan, which offers a life insurance cover and gives lump sum

payment at periodic intervals. These periodic payments intervals. These

periodic payments help you meet your various financial obligations at

crucial junctures such as education or marriage of your child. The unit-


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linked plan also offers you the option of not withdrawing the lump sum

amounts and continuing it in the plan to take advantage of the benefits

of compounding.

1.4.1 BIRLA SUN LIFE TERM PLAN : The plan offers large life insurance

cover for very low costs for a specified term. It is a low premium, pure

risk coverage plan, which takes care of one’s financial commitments

toward his/her depending should anything unfortunate happen to line

policyholder.

1.4.1 BIRLA SUN LIFE PREMIUM BACK TERM PLAN : The plan

offers you a life insurance cover for a specified term. Unlike other term

plans this plan refunds the entire amount of premium that you pay over

a period of time. There are two options of maturity benefits to choose

from and what is m ore it is a low cost life insurance plan.

1.4.2 GROUP PLANS: Birla sun life insurance Company offers number of

group plans, which can be, described below-

1.4.2 GROUP GRATUITY SOLUTIONS : It works for your future group

gratuity addresses the need of prudent financial management for a

progressive corporate house. The unique benefit being it provides

market-linked returns that present an opportunity for capital


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appreciation in the long term. Besides when the fund yields better

returns, it decreases the contribution to the fund in the years.

1.4.3 GROUP SUPERANNUATION PLAN : Retire in comfort- Birla sun

life insurance offers group superannuating plan as a retirement solution

for employees. The plan has benefits that empower both the employer

and employee. The contribution is invested in unit-linked funds

yielding market-linked returns to meet your future needs efficiently.

Additionally original / principal contribution is guaranteed against

market fluctuation.

1.4.4 GROUP PROTECTION PLAN : Birla sun life insurance provides

group protection plan for a homogenous group. Under this plan, life

insurance cover is provided at an affordable cost. Renewed every year,

it helps fulfill the insurance needs of employees as well as provide

financial security to their families. In the event of death of the member,

the beneficiary (family) of the member gets the benefit. The plan has 6

additional riders and two options.


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PLANS AT A GLANCE

FLEXI SAVE PLUS ENDOWMENT PLAN

FLEXI CASH FLOW MONEY BACK PLAN

FLEXI LIFE LINE PLAN

ELIGIBILITY 30days –65 years 30days –65 years 30days –65 years

MINIUM FACE AMOUNT Rs.50, 000 for minors and Rs75, 000 for adults

Rs.50, 000 for minors and Rs75, 000 for adults

Rs.50, 000 for minors and Rs75, 000 for adults

DURATION OF THE PLAN

As per policy term-5, 10,15,20,25,or 30 years or as per maturity age-15, 20,25,30,35 years for minors and 60,65,70,80 years for adults

As per policy term-5, 10,15,20,25,or 30 years or

as per maturity age-15, 20,25,30,35 years for

minors and 60,65,70,80 years for adults

As per policy term-5, 10,15,20,25,or 30 years or as per maturity age-15, 20,25,30,35 years for minors and 60,65,70,80 years for adults

PREMIUM PAYING PERIOD

Single pay 5,10,15,20 years or over the duration of the plan

Single pay 5,10,15,20 years or over the duration

of the plan

Single pay 5,10,15,20 years or over the duration of the plan

MATURITY BENEFITS Policy fund Policy fund Policy fundAMOUNT DUE TO NOMINEE IN EVENT OF DEATH OF THE LIFE INSURED

Face amount+policy fund Face amount+policy fund Face amount+policy fund

FREELOOK PERIOD 15 days from the date on which you receive the policy document

15 days from the date on which you receive the policy document

15 days from the date on which you receive the policy document

TAX BENEFITS** Under sec 88 and sec 10(10D) of the income tax act 1961

Under sec 88 and sec 10(10D) of the income tax act 1961

Under sec 88 and sec 10(10D) of the income tax act 1961

RIDERS Accidental death and dismemberment benefit rider

Term rider

Accidental death and dismemberment benefit

Rider Term rider

Accidental death and dismemberment benefit rider


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Critical illness rider Critical illness plus

rider Waiver of premium

rider

Critical illness rider Critical illness plus Rider Waiver of premium

rider

Term rider Critical illness

rider Critical illness

plus Rider Waiver of

premium Rider

UNIQUE FEATURES Minimum guaranteed returns of 3% p.a. on your premium net of all policy fees of all policy fees and charges. The entire upside in the performance of the fund is passed on to you.

Three investment fund options: protector, builder and enhancer with option to switch between funds any time after the first policy year.

Options to make tax-free withdrawals you have additional savings. Vary the face amount of policy depending on your changing needs

for life insurance during your lifetime. Surrender your policy without penalty anytime after 4 policy years.


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1.5 AREAS OF EXCELLENCE : Drawing from the strength of the joint

venture partners. The aditya Birla group and sun life financial inc. the

team of Birla sun life insurance has crossed several milestones of

excellence.

Leadership in unit-linked plans- 95% of sales come through unit-

linked plans. The company is one of the largest sellers of unit-linked

plans in one of the fastest growing life insurance markets in the

world.

The company is a p pioneer in introducing unique product features

like a ‘free look period’ and best sales practices such as the use of

“sales illustrations”. The regulator has now introduced the ‘free look

period’ as an industry norm. The mandatory use of a sales

illustration within BSLI set up a standard of transparency in the

industry.

A high persistency ratio of 95.46% by premium.

BSLI has consistently recorded the highest average sum assured of

Rs.3, 26,000 and average premium of Rs.19,500 per policy in the

industry with a unit-linked product range.

A very efficient utilization of capital.

Low claims ratio of 0.06% of total policies.

The first advisor to qualify to the “top of the table” (TOT) amongst

all private life insurance companies.


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1.6 GROWTH OF BIRALA SUN LIFE IN UNIT-LINKED LIFE

INSURANCE: Another successful financial year came to an end. The

company reported an annualized new business income of Rs.478 crore

during the year 2003-04 an increase of 222% over the premium income

lat year. The company of the year-end had an agency force of around

10,250 agents, and 89 ban assurance & corporate partners. All three sales

channels came out with flying colors. During the year 2003-04 the

company has launched two new groups and one individual fund.

During the year 2003-04, the BSE sensex has gone up by 81% but the

first quarter of year 2004 was not very exciting for the market except for

a huge supply of PSU IPOs. In March 2004, the markets have been

choppy and combined with the upcoming elections. This has caused

some amount of investor uncertainty. After a continuous rise between

may 2003 and January 2004, the quarter saw a correction in the market.

The BSE sensex went up to an all time high in January 2004 and the

quarter closed at 5590.60 down almost 4% from December 2003 level.

There was a large supply of IPOs by PSUs, which met with a good

response. The fundamentals remained good and foreign institutional

investors (FIIS) continued buying even though the markets declined. The

GDP growth numbers has also been encouraging at 10.4% in October –

December 2003 quarter.


33

The interest rates remained range bound in the quarter with some amount

of volatility. The 10- year benchmark G-sec closed at 5.15% at the end of

the quarter.

The rupee strengthened further to close the quarter at 43.60/ US $ against

Rs.45.61 at the end of December quarter and Rs.47.50 a year ago. Forex

reserves have crossed $ 110 bn in March 2004 on the back of strong

growth in FDI and FII inflows.

We will continue to invest in diversified and quality portfolio with a

long-term view.

Returns on unit-linked individual life funds.

(Based on unit price growth, net of charges) as on 31st march 2004

PARTICULARS RETURN ON

INVESTMENT

(SINCE INCEPTION) %

ANNUALISED

RETURN

(SINCE INCEPTION)%

LAST I YEAR

(%)

PROCTER 39.20 12.95 20.62

BUILDER 51.11 16.88 28.33

ENHANCER 70.98 23.45 38.56


34

Returns on unit –linked pension funds:

PARTICULARS RETURN ON INVESTMENT

(SINCE INCEPTION)%

ANNUALISED RETURN

(SINCE INCEPTION)%

LAST I YEAR

(%)

NOURISH 13.94 13.21 13.30

GROWTH 15.54 14.97 14.90

ENCRICH 18.78 17.80 18.10


35


36

1.7 PROBLEMS IN ORGANISATION:

Problems in the organization, which are assigned by officer, are not so

big problem. It is clear that BIRLA SUN LIFE INSURANCE

COMPANY is a unit- linked insurance, which are basically involved in

the life insurance solutions. There are number of problem which are as

follows-

1) The main problem of the organization is that the it is not

government organization like a life insurance solutions.

2) The second main problem is that lack of believes on the

organization by the people.

3) The third problem assigned by the organization that there are the

few branches of the BRILA SUN LIFE INSURANCE

SOLUTION.

4) Another problem is that the lack of good quality, good skill

insurance advisors.


37


38

2.0 DISTRIBUTION NETWORK

BIRLA SUN LIFE INSURANCE COMPANY LTD, distribution

strategy is aimed at creating a national presence through a scaleable

model, which would achieve convenience, accessibility and quality

service for the customers.

2.1 DIRECT SALES FORCE: Through this channel, the company sets up

brick and mortar branches on a standardizes template, across the country

selling life insurance though trained career agents called ‘insurance

advisor’. The team of agency managers and advisors are geared for

productivity enhancement national presence in 44branches and

9development centers.

2.2 LTERNATE CHANNELS: The experience in various countries for

selling life insurance through banks, corporate agents, brokers, call

center, Internet and these distribution alternatives will be pursed by the

organization from the inception stage. While in India there was no

precedent for selling life insurance though these alternate modes, a

philosophy of piloting and stabilizing the model was adopted.

The successful business models for banassurance, corporate agency,

brokerage, affinity group and direct marketing are being consolidated.


39

use of the call center and the internet will continue to be part of the

direct marketing initiatives .with a winning multi-channel distribution

system in place ,BSLI alternate channels are frontrunners in

bancassurance business, in partnership with Citibank ,Deutsche

bank,Bankof Rajasthan,BankMuscat,Catholic Syrian Bank, Development

credit bank and IDBI Bank.

2.3 OUP INSURANCE: The selling of insurance to corporate and affinity

groups is developed though dedicated relationship managers. The

business focus is on the Aditya birla group companies and the top

corporate in India.

Through this channel, the company has established relationships with

more than 100 blue chips corporate across the country by providing

group protection and group retirement solution. The company has

achieved leadership position in-group business in private life insurance

position in providing fund management services for the group retirement

plans.

2.4 DISTRIBUTION IN TUNE WITH TECHNOLOGY: Technology

plays the crucial role, when distribution spans across more than 50

locations .the IT strategy revolves around selecting and implementing

critical business applications to support contemporary products like

universal life and aligning process to provide world-class customer


40

services. The systems are web enabled and equipped to provide

consistent information across all touch points (branches, callcenters

website etc.). A high quality wide area network (WAN) was set up to

interconnect all branches and the headquarters at mumbai.

2.5 TRANNING TO SUPPORT DISTRIBUTION: In keeping with

support throughout the country. Birla sun life insurance’s mission of

providing life insurance solutions though “well trained” professionals,

our tanning team has geared up to meet the challenge. We have a team of

qualified professionals to provide the crucial support throughout the

country.


41


42

6.0 PRICING POLICY OF THE COMPANY:

6.1 KEEP TRACK OF YOUR POLICY FUND: Birla sun life insurance

sends you an annual policy statement on every policy anniversary to

keep you completely informed on the performance of our various funds

based on the unit price will be available on our website.

6.2 ELECTRONIC CLEARING SERVICE (ECS) : The ECS is a convenient and

hassle- free method of paying premiums through an electronic debit to

your bank account.

UPPER LIMIT OF %ASSETS IN:

PROTECTOR BUILDER ENHANCER

Government and government approved securities

85% 70% 55%

Rated corporate bonds (AA and above)

30% 30% 30%

Money market and other liquid assets

20% 20% 20%

Infrastructure sectors as defined by the IRDA

25% 25% 25%

Listed equities 10% 20% 35%

INVESTMENT FUND PORTFOLIO:


43

6.3 FEES AND CHARGES : The policy loading fee* is an up-front charge

and varies as per the premium payment mode and the policy year as

given under:

PAY PERIODPOLICY YEAR SINGLE 5-PAY 10-PAY 15-PAY OR GREATER

1 3% 29.9% 54.6% 65%

2 N/A 5.0% 7.5% 7.5%

3 N/A 5.0% 7.5% 7.5%

4+ N/A 5.0% 5.0% 5.0%

As a percentage of premium. The policy-loading fee for top up wills 2.0 percent.

6.5 CHARGES:

6.5.1. Charges towards the cost of insurance will be

deducted by cancellation of units at the prevailing unit price on a

monthly basis. The annual insurance charges per thousand-face amount

for sample ages for healthy lives are as follows:

Sex/age (yrs) 20 30 40 50 60

Female 0.90 1.16 1.66 4.03 10.66Male 1.02 1.17 2.15 5.53 13.73


44

6.5.2. An investment management free not exceeding

1.5% p.a. of the fund will be charged by adjustment of daily unit prices.

Currently this fee is 1% p.a.

6.5.3 The following administration fees will be deducted by canceling units

on a monthly basis.

(a) Rs. 22 per month

(b) An annual charge of Rs. 2.88 per thousand face amount will be

deducted in the first 10 years of the policy expect in the second year

where it will be Rs. 15.24 per thousand face amount. From the 11 th

year onwards this annual charge will increase subject to a maximum

of 3.75%per year.

6.5.4 A monthly rider deduction will apply by cancellation of units on a

monthly basis based on the equivalent monthly rider premium payable

over the entire coverage benefit period. If rider deductions are not

guaranteed, then the minimum policy values of your policy might be

affected due to any change in the rates of the rider coverage.

6.6 FUND SWITICHING CHARGES:

6.6.1 In a year, one switch between investment fund options is free.

6.6.2 For every additional switch, a charge of Rs.100 will be levied.


45

6.7 SURRENDER CHARGES : The surrender charges is levied in the

first four years and varies based on the year in which the policy is

surrender. During the first 24 months of the policy, the charge will be

an amount equal to the annulled premium payable for this policy .for

the purpose of surrender charge only, annualilsed premium is defined

as the amount that is payable if the coverage paying period is equal to

the coverage benefit period. In the 25th month, the surrender charge is

24 percent of the annualized premium. The surrender charge percent

reduces by one for e very month thereafter. If the policy is

surrendered at any time after the 49th month, the surrender charge is

zero.

6.8 WITHDRAWAL CHARGES :

In a year tow withdrawals are free of charge

For every additional withdrawal, a charge of Rs.100 will be levied.


46

AN ILLUSTRATION, WHICH IS SHOWING THE PRICING POLICY OF

THE COMPANY:

THIS PRESENTATION IS PREPARED FOR: Mrs.Nisha Singh

Name of life insured: Mrs.Nisha Singh

Date of birth 01/07/1964/ female

Coverage type Face amount coverage annual

(Rs.) benefit coverage

period premium

(years) (Rs.)

Flexi save plus (age) 90,000 30 4,563.60

Accidental Death &

Dismemberment rider 90,000 25 151.20

Policy premium 4,714.80

Due and payable Quarterly

The premium and associated benefits are described in the product

brochures and the following illustration. The details provided in the

following illustration would enable you to see how your p premium

is being used. If you need help to interpret please contact your

insurance advisor or call Birla sun life insurance Company’s toll

free number, which is 1600227000.


47

Some benefits are guaranteed and some benefits are variable with

returns based on the future performance of your insure carrying on

life insurance business. If your policy offers variable returns then

the policy fund values table will show two different rates of assumed

future investment returns. These rates return are not guaranteed

and they are not upper or lower limits of what you might get back,

as the value of your policy is dependent on a number of factors

including future investment performance. The guaranteed amounts

are the minimum amount that you can expect if all the conditions

mentioned later are fulfilled.

This illustration ignores the impact of the provisions of the income

tax act, 1961. The provisions of section 88 of the income tax act,

1961 govern a tax rebate for premiums paid towards an insurance

policy. The tax exemption for the benefits paid under a life

insurance policy is governed be section 10(10D) of the I income tax

act, 1961. Both these sections may be applicable to this policy .you

may consult a qualified tax advisor for specific tax advice related to

you. If required by the act, we will withhold taxes from the benefits

payable under this policy. We also reserve to you. If required by the

act, we will withhold taxes from the benefits payable under this

policy. We also reserve the right to recover from you levies such as

service tax levied by the authorities on insurance transactions.


48

Please note that in the following pages that illustrate the policy fund

values:

The premium and all values shown are for the life insurance

coverage and do not include riders. The rider benefit amount will be

payable, wherever applicable in case of happening of the events as

mentioned in the rider brochure in consideration of the payment of

additional premium/charges.

Policy fund values shown as at the end of the year and assume:

(1) Premiums are paid in full when due,

(2) No withdrawals are made,

(3) No outstanding policy loans exit,

(4) The investment fund options is not changed throughout the

lifetime of the policy,

(5) Increase in premiums or charges for riders having non-

guaranteed premiums or charges are not recovered from the

policy fund,

(6) No change is made in the face amount of the life insurance

coverage and

(7) Policy fees and charges are at current levels as explained in

the section “policy fees and charges”. The premium


49

mentioned in this illustration does not include top-up

premium or any underwriting extras.

Upon surrender or maturity of the policy, the amount payable to the

policy owner is the sum of:

(1) Guaranteed policy fund surrender /maturity value, and

(2) Non-guaranteed policy fund

Less any amounts owed to the company.

The sum of 1 and 2 above constitutes the policy fund.

With drawls can be made from the holding account, which

comprised the non-guaranteed policy fund.

Upon the death of the life insured, the death benefit is sum of

(1) Life insurance coverage face amount, and

(2) Policy fund

Less any amounts owed to the company

Provided that where the death of the life insured takes place before

the commencement of the policy anniversary, on or immediately

following the age when the life insured reaches one year, only the

policy fund shall be payable.

The non-guaranteed policy fund may or may not arise depending on

the performance of the investment fund supporting the policy .an


50

investment by you in any of the investment funds I s subject to

market and other risks, the value of the investment fund can go up

or down depending on the factors and forces affecting financial

markets. Other than explicit guarantees provided by the company,

there can be no assurance that the objectives of any investment fund

will be achieved.

FEES AND CHARGES: The policy loading fee* is an up-front

charge and varies as per the premium payment mode and the policy

year as given under:

PAY PERIODPOLICY YEAR

SINGLE 5-PAY 10-PAY

15-PAY OR GREATER

1 3% 29.9% 54.6% 65%

2 N/A 5.0% 7.5% 7.5%

3 N/A 5.0% 7.5% 7.5%

4+ N/A 5.0% 5.0% 5.0%

In addition to the above policy-loading fee, the following policy fees

and charges will be recovered from the policy fund.

1) The cost of insurance of the life insurance coverage will be deducted

by cancellation of units at the prevailing unit price on a monthly basis.

The annual insurance charges per thousand of the life insurance

coverage face amount for sample ages for healthy lives are as follows:


51

Sex/age (yrs)

20 30 40 50 60

Female 0.90 1.16 1.66 4.03 10.66Male 1.02 1.17 2.15 5.53 13.73

2) An investment management fee not exceeding 1.5 percent per

annum of the investment fund will be charged by adjustment of the

daily unit prices. Currently this fee is 1 percent per annum.

3) Policy administration fees for the life insurance coverage will be

reeducated by canceling units on a monthly basis, as follows:

a) Rs. 22 per month; and

b) Annual charge of Rs. 2.88 per thousand of the life insurance

coverage face amount will be deducted in the first 10 years of the

policy expect in the second policy year when it will be Rs. 15.24 per

thousand of the life insurance coverage face amount. From the 11th

year onwards this annual charge (Rs. 2.88 per thousand of the life

insurance coverage face amount) increases at an annualized rate of

a maximum of 3.75%, every year.

4) The surrender charges to be levied vary based on the duration of the

policy. During the first 24 months of the policy, the charges will be

an amount equal to the annaslised premium payable for this p

policy. For the purpose of surrender charges only, annualized


52

premium is defined, as the amount that is payable if the coverage

playing period is equal to the coverage benefit period. In the 25th

month, the surrender charge is 24 percent of the annuallised

premium. The surrender charge percent reduces by one for every

month thereafter. If the policy is surrendered at any time after the

49th, the surrender charge is zero

.

The premium net of all charges and fees will earn a minimum life

insurance net return of 3 percent per annum, which constitutes the

guaranteed fund. Any returns earned by the policy fund in excess of

the guarantied fund constitute non-guaranteed fund.

For a detailed description of the features of the product, please refer

to the product broacher.

Acronyms used:

TPD- Total And Permanent Disability,

TPD/CI- Total And permanent Disability or Critical illness,

Death/TPD –Death or And Permanent Disability,

Death/TPD/CI- Death or Total Permanent Disability or Critical

illness.


53

5.


54

5.0 OBJECTIVE OF THE STUDY:

The main objective of this study is found out the view of different

people about the unit-linked life insurance. And find out what they

take insurance advisors advise for their investment or not. If not

indicate the people for their life insurance and tells them why life

insurance is necessary for every persons. There are some reason

which indicates why life insurance is necessary for every person given

below-

5.1 MARKETING OBJECTIVE :

The main marketing objective of this project report for the company

is find out marketing position of the life insurance and makes the

present and future market strategy of the company.

5.2 RESEARCH OBJECTIVE:

1. Identifying the sources of money or funds a p person has and what

happens to that money (where is goes) than

2. Determining the person short and long term priorities

3. Analyzing this information or ones can advice changes to the

person financial habits or enable him to achieve his goals.


55


56

6. RESEARCH METHODOLOGY : For defining research

methodology there are three basic types of methods for marketing

research. They are as follows:

a) The observation method.

b) The experimental method.

c) The survey method inclusive of panel method.

In observation method data are collected on the direct observation. No

talks place by observing the person the analysis makes the inventory as

to product used by him at his hoe or kept as retailers stocks.

In experimental method it is based on the concept that small-scale

experiment is useful to indicate the expectation of large-scale

experiment.

The survey method information is gathered directly from individuals in

three ways;

1) Telephone

2) Mail

3) Personal interview

This survey method is also suffered to as the questionnaire technique.

There is also organized by-

1) In factual survey


57

2) Interpretative survey

3) Opinion survey

In my project point of view I have taken mainly the method of personal

interview by questionnaire technique in the personal interview by

questionnaire.

Technique I usually gathered information by face to face interviewing.

In this survey method I saw that the respondent was shown the exhibit

and advertisement to give his personal opinion and attitude.

In this method the direct interaction on occurred with the retailers and I

could collect the reliable information from them.


58

RESEARCH PROCESS

FEED BACK


59

DEFINING RESEARCH

PROBLEM

INTENSIVE LITREATURE

SURVEY

COLLECTION OF DATA

ANALYSIS OF DATA

RECOMMENDATION AND REPORT WRITING

RESEARCH DESIGN

6.1 SAMPLING PLAN : Sampling plan of this project report

basically related to the number of points which are given below-

The universe studied prospectors in the areas of Nagpur region.

The sampling unit is a single prospector outlet, which may be any

types.

Elements: potential prospector.

The geographical limit is the area of Nagpur .

Keeply the number of prospector in mind the sample size arrived

at was 200.

The sampling method followed was judgmental sampling.


60

6.2 TIME SCHEDULE :

TOTAL DURATION 17 JULY TO 21AUGUST

PREPATION FOR DATA COLLECTION 20 JULY TO 12 AUGUST

DATA COLLECTION 21 JULY TO 15 AUGUST

DATA CALIFFICATION AND PREPARATION

OF REPORT

16 JULY TO 21 AUGUST


61


62

7.0 DATA COLLECTION METHOD:

In my project report, which has entitled “a research repot on market

potential in life insurance solution in NCR region”, has been collected

data from the two method-

(A) PRIMARY SOURCE

(B) SECONDARY SOURCE

Under the primary source data collected by me through the observation,

survey and personal interview.

QUESTIONNAIRE METHOD: Through the questionnaire method

number of question asked by the different people from the different

region mainly DELHI, GHAZIABAD, NOIDA, GURGON by me. My

questionnaire method is a open ended method in which questions asked

by me has a limited number. The main purpose of this questionnaire is

find out the view of the people that they take insurance advisor’s advice

or not. In which they like to investment their savings. The format of

questionnaire of this company is given next page-

Survey method: This project report is also suffered by the

survey method for collecting the relevant information, so that marketing


63

executive will be success for making marketing strategy according to

that survey.

The main purpose of this survey which help the insurance advisors to

identify the type of market in which insurance advisors may be

prospecting and selling should he enter the life insurance business.

It will also aid management in estimating their sales potential and in

determining the type of training that would be most beneficial to him.

The names you enter represent people you know today. Should you

enter the business of selling life insurance, you will learn proven ways

to meet new people and expand these markets.

While many of those you list are presently prospect for life insurance

and others are not, do not make the need for life insurance a

requirement for adding their names. Do not list names by any

predetermined selection rating. Simply list the first 100 names of those

who come to your mind most readily.


64

(Sampling page)

Sources Of Names

A. School / college friends

B. Family friends

Source Letter

Persistency source

C. Neighbours

D. Through Spouse

E. Through children

F. Through Hobbies / Spot

G. Previous employment

YEARLY INCOME

(In Rupees)

> 1 Lakh

> 1 Lakh but < 2.5 Lakhs

> 2.5 Lakhs but < 5 Lakhs

> 5 Lakhs

AGE

18 – 25 YEARS

26 – 35 YEARS

35 – 44 YEARS

OVER 45 YEARS

OCCUPATION Professional / proprietor

Manager / Executive

MARITAL STATUS Single

Married

ABILLITY TO

PROVIDE REFERALS

Good

Fair


65

NA

ME

S S

UB

MIT

TE

D

INTERVIEW: This project report is also affected by the interview

method. The data is also collected through the interview. Under this method

we go through the –

Telephone interview

Mail interview

Personal interview

Under the telephone interview is used when the information to be collected

limited. This method is suitable for inquiry about information just released or

telecast by radio or television.

Under the mail interview data is collected when the data is more important.

Because there is no interviewer in mail surveys to ask questions and record

answers. It cannot be used to conduct an unstructured study.

Under the personal interview data is collected through the door to door. This

method is very relevant and it is also very difficult task to collect the

information. And takes much time.

OBSERVATION METHOD: This project report is also suffered by the

observation method. Because some time it is also happened when the number

of people was not ready to give the relevant information used this techniques

to collect the information.


66

This observation is used when the research problem has been

formulated precisely and the researcher is told to observe the area of

sturdy. The researchers are asked to record their observations.

(B) SECONDARY DATA: under this project report data is also collected

through the secondary data. Under this source data is collected through

the magazine, through the web site, through the newspaper, through the

other insurance organization.


67


68

8.0 TABULATION & ANALYSIS:

From the above questionnaire, we found number of findings and

according to them we can do analysis that which type of strategy should

be adopted for improving the earnings of the company given below-

QUESTION NO 1- How many people plan for their savings and

investment?


YES NO

PEOPLE (IN %) 64% 36%

69

QUESTION NO.2- How many people take help of professional advisor for

their investment?


YES NO

PEOPLE (IN %) 35% 65%

70

QUESTION NO. 3- Number of people save regularly for-

SAVING ALTERNATIVS PEOPLE IN %

RETIREMENT 15%

CHILDREN’S EDUCATION 25%

CHILDREN’S MARRIGE 40%

TAXATION 15%

OTHERS 5%


71

QUESTION NO. 4 – How many people save through insurance?


YES NO

PEOPLE (IN %) 35% 65%

72


73

7.0 SWOT ANALYSIS:

SWOT analysis of this company is given below-

7.1 STRENGTHS : Strength of this company is given below-

7.1.1 There is transparency in the scheme. The performance of the fund can

be monitored on daily or bi-weekly basis through the daily- declared

NAV/ Unit prices and also through the website of the company. At

any given time you will k now the accumulations under your policy

due to the investment accruals.

7.1.2 Normally any time after one to three years time depending upon the

scheme, you can chose to withdraw your money by partial or

complete surrender of units. The death benefit will be proportionately

reduced.

7.1.3 You can surrender the policy and get a guaranteed surrender value.

7.1.4 You can also take a loan on a policy after three years duration.

7.1.5 You can switch from one stream of investment to the other every year

by paying a small fee according to your changing needs.

7.1.6 You can top up your premium anytime during the term to increase your

benefits.

7.1.7 The plans are available as endowment whole life money back or as

pension plans.

7.1.8 In fact some companies allow you to have the contract as long as you

want without a fixed term, even up to death.


74

7.1.9 The option of with or without profits is also available in some plans.

Actually some companies give a guaranteed bonus as a percentage of

the sum assured as bonus

7.1.10The normal riders such as accident benefit, disability benefit critical

illness or major surgical assistance covers are also available.

7.1.11The policies are issued with the usual “free-look” provision.

7.1.12One company has floated a unit-linked policy for women with a critical

rider benefit specifically covering some gynecological illnesses.

7.1.13You can buy the policy with a single premium like a bond or pay

premium by the usual yearly, half-yearly or quarterly mode.

7.1.14Some companies offer even “premium holiday option”. If after paying

premiums for three years you are not able to pay the premium, the

policy will be continued adjusting the overdue premiums from your

unit fund.

7.2 WEAKNESS : Weakness of this company is given below-

7.2.1 The expenses deducted from the premiums especially in the first two

years considerably shrink the amount that goes towards your

investment corpus.

7.2.2 The heavy frontloading of the effectively acts as a disincentive for early

withdrawals.

7.2.3 The unit-linked plans completely pass on the investment risk to the

policyholder and he has to be ever vigilant.


75

7.3 OPPORTUNITIES : Opportunities of this company is given below-

7.3.1 If unit-linked policies can be given section 88 benefits there is a valid

reason that investment in an ordinary mutual fund should also be

given the same benefit, as they are basically same except for the

addition of insurance element in the unit-linked policy.

7.3.2 The rear end tax-free benefit is a very attractive tax break for the unit-

linked policy as per the current tax laws.

7.3.3 The return by way of capital appreciation in mutual fund as well as

from the sale of stocks are taxed as capital gains with the indexation

benefit, according to the current tax laws. Only the dividends are tax-

free.

7.4 THREATS : Threats of this company is given below-

7.4.1 This is company is also suffered by the great market competition. There

are number of competitors of this company.

7.4.2 Another threat of this company is that the changing environment.

Changing environment means change in government, change in

government policy, change is competitor’s policy.


76


77

8.0 CONCLUSION:

Unit – linked policies are a very valuable addition to the existing array

of insurance producers. But, when sold to a wrong prospect or brought

a wrong agent it will become useless. IRDA and the companies should

take care that well- trained and professional agents market these

product.

In view of what was discussed above, the buyer if they need such plans

according to their risk appetite should select a known, well- informed

agent who is reliable. Agents who are already dealing with investment

or saving instrument or mutual funds, if they sell life insurance also

would be a good choice. In case they hence doubts about the

availability of such agents, it would be more advisable to go to

corporate agent with a background in financial instruments or still

better, to a good broker who are likely to be better equipped than an

ordinary agent. Continued advice and guidance will be available with

the corporate agent and the broker as they are corporate entities.


78

Chapter No.9


79

SUGGESTIONS:

By this project report there are the number of suggestion which can be

given to the company are given below-

9.1Company should recruit well-informed, well-qualified, well-financial

knowledge. So that he will success to satisfy the potential customer for

their investment or savings.

9.2In fact, the contract to buy the product in my opinion is not the usual

insurance contract governed by the principle of unerimma fides but one

of caveat emptor. Under the principle of utmost good faith, the

company expects the proposes to give all the material facts so that it can

charge the “correct premium” based on the factors of risk presented.

9.3How to deal with the situation? The companies or IDRA cannot educate

the policyholder. They should educate the agent.

9.4Prospective unit-linked policy buyers should understand the structure of

the plans , the factors that determine how good their returns will be and

the risks involved and then figure out if they have the risk appetite,

whether they can get better returns on their investment elsewhere and

whether their investment horizon matches the long lock-ins over which

these plans offer the best rewards.

9.5Insurance companies will generally give you a picture on the basis of the

past performance of the fund but the past performance of the fund is

never an indicator of how the fund might perform in the future.


80

9.6Insurance companies allow you to shift from one fund to the other at any

point of time. This can be useful if you want to plan your investment

based on your life needs.


81


82

ANNEXURE:

Under the annexure we include-

Questionnaire

Survey form

An illustration of the company policy ( All the documents which are received by

the client at the time of policy)


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QUESTIONNAIRE:

Birla Sun Life Insurance Co. Ltd.

Life insurance coverage survey

Name: -----------------------------------------------------------------------------------------

Address: ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Occupation: -----------------------------------------------------------------------------------Tel.: Residence ---------------------------- Office ------------------------------------------Date of Birth: ------------------------------ Annual Income -------------------------------Family Particulars:Name of spouse ------------------------------------------------------- Age ------------------

No. Of Children --------------------------------------------------------------------------------

1. Do you plan your savings and investments?

Yes No

2. Do you take help of professional advisor for your investment?

Yes No

3. Do you save regularly for

Retirement Children’s marriage

Children’s education Taxation Others

4. Do you save through insurance?

Yes No

5. Would you like to get professional advice in insurance solution?

Yes No


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(Sampling page)

Sources Of Names

A. School / college friends

B. Family friends

Source Letter

Persistency source

C. Neighbours

D. Through Spouse

E. Through children

F. Through Hobbies / Spot

G. Previous employment

YEARLY INCOME

(In Rupees)

> 1 Lakh

> 1 Lakh but < 2.5 Lakhs

> 2.5 Lakhs but < 5 Lakhs

> 5 Lakhs

AGE

18 – 25 YEARS

26 – 35 YEARS

35 – 44 YEARS

OVER 45 YEARS

OCCUPATION Professional / proprietor

Manager / Executive

MARITAL STATUS Single

Married

ABILLITY TO

PROVIDE REFERALS

Good

Fair


85

NA

ME

S S

UB

MIT

TE

D

SURVEY


86

BIBLIOGRAPHY

B00KS- C.R.KOTHARI, PHILIP KOTLER.

MAGAZINE- INSURANCE WATCH, INDIA TODAY, BUSINESS

TODAY, BUSINESS WORLD.

NEWS PAPER- THE TIMES OF NEW INDIA, HINDUSTAN

TIMES, ECONOMICS TIMES, BUSINESS --

STANDARD.

WEB-SITE- www.birlasunlife.com , www.google.com


87

http://www.google.com/

http://WWW.birlasunlife.com/

Project on Birla Sunlife ulip

Documents

hobbies spot

current tax

collective

sun life financial

aditya birla

previous employment

life insurance

life insurance