shivani life insurance project

Summer Training ReportOn

Various Plan Offered By Reliance life Insurance Submitted In

Partial Fulfillment Of the RequirementOf Masters of Business Administration

Training Supervisor Submitted By:

Submitted To:Banarsidas Chandiwala Institute of Professional Studies, Dwarka,

New Delhi(Affiliated to Guru Gobind Singh Indraprastha University)

DECLARATION

1

I hereby declare that this Project Report titled VARIOUS PLANS OFFERED BY

RELIANCE LIFE INSURANCE COMPANY LIMITED submitted by me to

Banarsidas Chandiwala Institute of Professional Studies, Dwarka is a bonafide

work undertaken during the period from 24 MAY 2010 to 31 JULY 2010 by me

and has not been submitted to any other University or Institution for the award of

any degree diploma / certificate or published any time before.

2

CERTIFICATE

3

ACKNOWLEDGEMENT

TABLE OF CONTENTS

1) ExecutiveSummary…………………………..........…………7

2) Introduction..............................................................................9 About Insurance industry

4

What is Life Insurance Life insurance v/s other savings

3) Objective of Research Study...................................................16

4) Literature Review…………………….…………………........17

5) Company’s Profile………………………….………………...21

6) Corporate Objective……………………….………................23

7) Corporate Mission....................................................................24

8) Research Methodology…………………………………….....27 Secondary data

9) ULIPS offered by Reliance life….……………………….......28 Reliance Money Guarantee Plan Reliance Super Automatic Investment Plan Reliance Child Secured Plan Reliance Wealth + Health Plan Reliance Super Golden Years plan

10) Reliance money Guarantee Plan............................................29 Features Working Benefits Flexibility Charges Tax benefit Term Life Insurance Benefit Free look period

11) Reliance Super Automatic Investment Plan……………......35 Features Benefits Working Tax Benefit

5

12) Reliance Child Secured Plan……………………….…….......38

Features. Working Benefits Fund Options Flexibility Charges Exchange Option Tax Benefit Free look period

13) Reliance Wealth + Health Plan………………….…….............44 Features Benefits Working Flexibility Charges Tax Benefits Free look period

14) Reliance Super Golden years plan...........................................49

15) Analysis……………………………………………………........58

16) Interpretation……………………………………………..........77

17) Findings and recommendations................................................79

18) Conclusion………………………………………………….......80

19) Bibliography…………………………………………………....82

EXECUTIVE SUMMARY

6

In the bur going Indian economy

the service sector has emerged in a big way since the liberalization waves started

blowing in India since 1992 onwards .It was the astounding growth rate of

insurance sector which attracted me to explore and study this area. Life insurance

corporation of India plays a predominant role because of obvious reasons and

already lot of studies have been done on it, this research is to study the new

entrant in the field i.e. Reliance Life Insurance Company Ltd. for my project

work. The research includes the various products of RLI especially ULIPS.

Further the comparison has been made regarding ULIP products between

Reliance Life Insurance Company and ICICI prudential. This research has been

done basically to find out the differences between the products offered by both the

companies and to find out which one is better.

The objective of conducting this research is to study and analyze the various ulip

products of Reliance Life Insurance and further to have a detailed comparison of

the products of ICICI Prudential Life Insurance Co. Ltd.

For the research methodology, only secondary data has taken into consideration.

Now firstly, the research has covered the details of major ulip plans offered by

Reliance Life Insurance such as Super Automatic Investment Plan, Money

Guarantee Plan, Health + Wealth, Secure Child Plan & Super Golden Years Plan.

Secondly, the research has analyzed the comparison of products offered by both

the companies which includes the detail about the features of the products as well

their returns generated with in the time span of two previous financial years.

The overall analysis has been interpreted in following lines as stated,

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“Reliance Life Insurance ulip

products are a complete package for a customer which includes life insurance,

returns on money invested, tax benefit, flexibility to the customer to withdraw full

money after a certain period of time, also offers availability of partial

withdrawals, choice of portfolios to invest their money into different funds and

also provides ample of switches to exercise between the funds.”

The research also interpreted that the returns generated by ICICI Prudential are

better than the Reliance life insurance.

Finally the research has been concluded that despite of providing the above

mentioned features, Reliance life insurance need to improve their fund

management and provide more transparency to their customers in terms of

investment options & better portfolio management services. To establish a

position in the market Reliance life insurance need to work upon their policies,

they have to reframe their plans according to the need of the market.

The research also concludes the latest amendments made by the Insurance

Regulatory Development Authority which further makes the product more

customer friendly and emphasis the company to introduce more customer oriented

products as per the new guidelines set by them.

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INTRODUCTION

The story of insurance is probably as old as the story of mankind.

The same instinct that prompts modern businessmen today to secure themselves

against loss and disaster existed in primitive men also. They too sought to avert

the evil consequences of fire and flood and loss of life and were willing to make

some sort of sacrifice in order to achieve security. Though the concept of

insurance is largely a development of the recent past, particularly after the

industrial era – past few centuries – yet its beginnings date back almost 6000

years. Life Insurance in its modern form came to India from England in the year

1818. Oriental Life Insurance Company started by Europeans in Calcutta was the

first life insurance company on Indian Soil. All the insurance companies

established during that period were brought up with the purpose of looking after

the needs of European community and Indian natives were not being insured by

these companies. However, later with the efforts of eminent people like Babu

Muttylal Seal, the foreign life insurance companies started insuring Indian lives.

But Indian lives were being treated as sub-standard lives and heavy extra

premiums were being charged on them. Bombay Mutual Life Assurance Society

heralded the birth of first Indian life insurance company in the year 1870, and

covered Indian lives at normal rates. Starting as Indian enterprise with highly

patriotic motives, insurance companies came into existence to carry the message

of insurance and social security through insurance to various sectors of society.

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

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

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

in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In

1907, Hindustan Co-operative Insurance Company took its birth in one of the

rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta.

The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life)

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were some of the companies

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

regulate insurance business. In the year 1912, the Life Insurance Companies Act,

and the Provident Fund Act were passed. The Life Insurance Companies Act 1912

made it necessary that the premium rate tables and periodical valuations of

companies should be certified by an actuary. But the Act discriminated between

foreign and Indian companies on many accounts, putting the Indian companies at

a disadvantage. The first two decades of the twentieth century saw lot of growth

in insurance business. From 44 companies with total business-in-force as

Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298

crore in 1938. During the mushrooming of insurance companies many financially

unsound concerns were also floated which failed miserably. The Insurance Act

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

insurance to provide strict state control over insurance business. The demand for

nationalization of life insurance industry was made repeatedly in the past but it

gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938

was introduced in the Legislative Assembly. However, it was much later on the

19th of January 1956 that life insurance in India was nationalized. About 154

Indian insurance companies, 16 non-Indian companies and 75 provident were

operating in India at the time of nationalization. Nationalization was

accomplished in two stages; initially the management of the companies was taken

over by means of an Ordinance, and later, the ownership too by means of a

comprehensive bill. The Parliament of India passed the Life Insurance

Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of

India was created on 1st September, 1956, with the objective of spreading life

insurance much more widely and in particular to the rural areas with a view to

reach all insurable persons in the country, providing them adequate financial

cover at a reasonable cost.

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ABOUT INSURANCE INDUSTRY IN INDIA 2010

Insurance industry records a booming growth

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has

projected a 500% increase in the size of current Indian insurance business from

US$ 10 billion to US$ 60 billion by 2010 particularly in view of contribution that

the rural and semi-urban insurance will make to it.

Rural and Semi-Urban Life Insurance business is expected to touch US$ 20

billion figure in next 4 years from current level of less than US$ 5 billion now as

rural and semi-urban folk will want themselves to ensure them for better future

and their rising purchasing power will motivate them to move towards insurance

sector.

In view of Assocham, the non-life insurance will rise to US$ 15 billion by 2010

from its negligible size now and in Urban areas, life insurance businesses are

anticipated to reach US$ 15 billion and that of non-life insurance US$ 10 billion,

according to Chamber Paper on Insurance Sector : Its Future Perspective.

Assocham has revealed that rural and semi-urban India shall contribute US $35

billion to the Indian insurance industry by 2010, including US $20 billion by way

of life insurance and the rest US $15 billion through non-life insurance schemes.

A large part of rural India is still untapped due to poor distribution, large distances

and high costs relative to returns. Urban sector insurance is estimated to reach US

$25 billion by 2010, life insurance US $15 billion and non-life insurance US $10

billion.

Estimating the potential of the Indian insurance market from the perspective of

macro-economic variables such as the ratio of premium to GDP, Assocham

Papers reveals that India’s life insurance premium, as a percentage of GDP is

1.8% against 5.2% in the US, 6.5% in the UK or 8% in South Korea.

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Assocham findings further

reveals that in the coming years the corporate segment, as a whole will not be a

big growth area for insurance companies. This is because penetration is already

good and companies receive good services. In both volumes

and profitability therefore, the scope for expansion is modest. Survey suggested

that insurer’s strategy should be to stimulate demand in areas that are currently

not served at all.

Insurance companies mostly focus on manufacturing sector, however, the services

sector is taking a large and growing share of India’s GDP. This offers immense

opportunities for expansion opportunities.

Being an agrarian economy again there are immense opportunities for the

insurance companies to provide the liability and risks associated in this sector.

The Paper found that the rural markets are still virgin territories to a great extent

and offer exciting opportunities for insurance companies. To understand the

prospects for insurance companies in rural India, it is very important to

understand the requirements of India's villagers, their daily lives, their peculiar

needs and their occupational structures. There are farmers, craftsmen, milkmen,

weavers, casual labourers, construction workers and shopkeepers and so on.

More often than not, they are into more than one profession.

The rural market offers tremendous growth opportunities for insurance companies

and insurers should develop viable and cost-effective distribution channels; build

consumer awareness and confidence. The Paper found that there are a total 124

million rural households. Nearly 20% of all farmers in rural India own a Kissan

Credit cards. The 25 million credit cards used till date offer a huge data base and

opportunity for insurance companies. An extensive rural agent network for sale of

insurance products could be established. The agent can play a major role in

creating awareness, motivating purchase and rendering insurance services. There

should be nothing to stop insurance companies from trying to pursue their own

unique policies and target whatever needs that they want to target in rural India.

Assocham suggests that insurance needs to be packaged in such a form that it

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appears as an acceptable investment to the rural people. In the near future, when

we’ll see more innovations in agriculture in the form of corporatization or a more

professional approach from the farmers’ side, insurance will definitely be one

option that the rural Indian is going to accept.

What Is Life Insurance?

Life insurance is a contract that pledges payment of an amount to the person

assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:

The date of maturity or Specified dates at periodic intervals or Unfortunate

death, if it occurs earlier.

Among other things, the contract also provides for the payment of

premium periodically to the Corporation by the policyholder. Life

insurance is universally acknowledged to be an institution, which

eliminates 'risk', substituting certainty for uncertainty and comes to the

timely aid of the family in the unfortunate event of death of the

breadwinner.

By and large, life insurance is civilization’s partial solution to the

problems caused by death. Life insurance, in short, is concerned with two

hazards that stand across the life-path of every person:

1) Dying prematurely leaving a dependent family to fend for itself.

2) Living till old age without visible means of support.

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LIFE INSURANCE VS. OTHER SAVINGS

Protection

Savings through life insurance guarantee full protection against risk of

death of the saver. Also, in case of demise, life insurance assures payment

of the entire amount assured (with bonuses wherever applicable) whereas

in other savings schemes, only the amount saved (with interest) is payable.

Aid to thrift:

Life insurance encourages 'thrift'. It allows long-term savings since

payments can be made effortlessly because of the 'easy installment' facility

built into the scheme. (Premium payment for insurance is either monthly,

quarterly, half yearly or yearly).

For example: The Salary Saving Scheme popularly known as SSS,

provides a convenient method of paying premium each month by

deduction from one's salary.

In this case the employer directly pays the deducted premium to LIC. The

Salary Saving Scheme is ideal for any institution or establishment subject

to specified terms and conditions.

Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any

policy that has acquired loan value. Besides, a life insurance policy is also

generally accepted as security, even for a commercial loan.

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Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and

wealth tax. This is available for amounts paid by way of premium for life

insurance subject to income tax rates in force.

Assesses can also avail of provisions in the law for tax relief. In such cases the

assured in effect pays a lower premium for insurance than otherwise.

Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can

be effectively used to meet certain monetary needs that may arise from time-to-

time.

Children's education, start-in-life or marriage provision or even periodical needs

for cash over a stretch of time can be less stressful with the help of these policies.

Alternatively, policy money can be made available at the time of one's retirement

from service and used for any specific purpose, such as, purchase of a house or

for other investments. Also, loans are granted to policyholders for house building

or for purchase of flats (subject to certain conditions).

Who Can Buy A Policy?

Any person who has attained majority and is eligible to enter into a valid

contract can insure himself/herself and those in whom he/she has insurable

interest.

Policies can also be taken, subject to certain conditions, on the life of one's

spouse or children. While underwriting proposals, certain factors such as

the policyholder’s state of health, the proponent's income and other

relevant factors are considered by the Corporation.

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OBJECTIVE OF RESEARCH STUDY

The objective of research study can be categorized as:

1) PRIMARY OBJECTIVE: To understand and analyze the various ulip

plans offered by Reliance Life Insurance company

2) SECONDARY OBJECTIVE: To compare the various products offered

by Reliance life insurance Company with Icici prudential company with

respect to their features and returns generated.

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LITERATURE REVIEW

The concept of insurance is believed to have emerged almost 4500 years ago in

the ancient land of Babylonia where traders used to bear risk of the carvan by

giving loans, which were later repaid with interest when the goods arrived safely.

The concept of insurance as we know today took shape in 1688 at a place called

Lloyd’s Coffee House in London where risk bearers used to meet to transact

business.

This coffee house became so popular that Lloyd’s became the one of the first

modern insurance companies by the end of the eighteenth century.

Marine insurance companies came into existence by the end of the eighteenth

century. These companies were empowered to write fire and life insurance as well

as marine. The Great Fire of London in 1966 caused huge loss of property and

life. With a view to providing fire insurance facilities, Dr. Nicholas Barbon set up

in 1967 the first fire insurance company known as the Fire office.

The early history of insurance in India can be traced back to the Vedas. The

Sanskrit term ‘Yogakshema’ (meaning well being), the name of Life Insurance

Corporation of India’s corporate headquarters, is found in the Rig Veda. The

Aryans practiced some form of ‘community insurance’ around 1000 BC.

Life insurance in its modern form came to India from England in 1818. The

Oriental Life Insurance Company was the first insurance company to be set up in

India to help the widows of European community. The insurance companies,

which came into existence between 1818 and 1869, treated Indian lives as

subnormal and charged an extra premium of 15 to 20 per cent.

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The first Indian insurance company, the Bombay Mutual Life Assurance Society,

came into existence in 1870 to cover Indian lives at normal rates.

The Insurance Act, 1938, the first comprehensive legislation governing both life

and non-life branches of insurance were enacted to provide strict state control

over insurance business. This amended insurance Act looked into investments,

expenditure and management of these companies.

By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers, and 75

provident societies carrying on life insurance business in India. Insurance

business flourished and so did scams, irregularities and dubious investment

practices by scores of companies. As a result the government decided to

nationalize the life assurance business in India. The Life Insurance Corporation of

India (LIC) was set up in 1956. The nationalization of life insurance was followed

by general insurance in 1972.

Insurance may be described as a social device to reduce or eliminate risk of loss

to life and property. Insurance is a collective bearing of risk. Insurance is a

financial device to spread the risks and losses of few people among a large

number of people, as people prefer small fixed liability instead of big uncertain

and changing liability. Insurance can be defined as a “legal contract between two

parties whereby one party called insurer undertakes to pay a fixed amount of

money on the happening of a particular event, which may be certain or uncertain.”

The other party called insured pays in exchange a fixed sum known as premium.

Insurance is desired to safeguard oneself and one’s family against possible losses

on account of risks and perils. It provides financial compensation for the losses

suffered due to the happening of any unforeseen events.

Insurance constitutes one of the major segments of the financial market.

Insurance services play predominant role in the process of financial intermediary.

18

Today insurance industry is one of the most growing sectors in India. There is lot

of potential in the Indian Insurance Industry. There are many issues, which

require study. The scope of the study of insurance industry of India would be very

great as there are ongoing developments in the industry after the opening of the

sector.

The economy of a country is highly influenced by the Financial System of the

country. The Indian Financial System has been broadly divided into two

segments: the organized and the unorganized segments. An investor has a wide

array of investment avenues available. Economic well being in the long run

depends significantly on how wise the investments are.

In the present financial scenario where the economy is poised to grow approx. at

9% ,as stated by our finance minister P Chidambaram, and the present bulls run in

the capital market ,where lot of money is being pumped into the economy by FIIs,

and increasing disposable income with the generation next has created a problem

of investment because there is lot money on hand but they don’t know where to

invest as there is significantly less attractive return in the bank FD, PPF, KVP,

NSC, MIS, and other Post saving scheme. Uncertainties in share market and low

interest rate have left investors puzzled, i.e. to spend the money or save the

money. If they want to save the money then where can they save it so that they

can get better returns with flexibility, tax benefit and as well as capital

appreciation. So it is necessary for investor to find the answer and way of capital

growth with better return rather than uncertain share market and other low yield

investment avenues.

Insurance constitutes one of the major segments of the financial market. Insurance

services play predominant role in the process of financial intermediary. Today

insurance industry is one of the most growing sectors in India. There is lot of

potential in the Indian Insurance Industry.

19

There are many issues, which require study. The scope of the study of insurance

industry of India would be very great as there are ongoing developments in the

industry after the opening of the sector.

The major issue right now is the hike in FDI (Foreign Direct Investment) limit

from 26% to 49% in the insurance sector. Government may in near future allow

49% FDI in Insurance. This would lead to more capital inflow by foreign

partners.

Another major issue is the effects on LIC after the entry of private players in the

market. Though market share of LIC has been affected, it has improved in terms

of efficiency.

There are number of other hot topics like penetration of Health Insurance, Rural

marketing of insurance, new distribution channels, new product ranges, insurance

brokers’ regulation, incentive scheme of development officers of LIC etc. So it

offers lot of scope for studying the insurance industry.

Right now the insurance industry has great opportunities in a country like India or

China which huge population.

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COMPANY PROFILE OF RELIANCE LIFE INSURANCE

FOUNDER

Few men in history have made as dramatic a contribution to their country’s

economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani.

Fewer still have left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the

true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the

proud patriot, the leader of men, the architect of India’s capital markets, the

champion of shareholder interest. But the role Dhirubhai cherished most was

perhaps that of India’s greatest wealth creator. In one lifetime, he built, starting

from the proverbial scratch, India’s largest private sector enterprise. When

Dhirubhai embarked on his first business venture, he had a seed capital of barely

US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted

this fledgling enterprise into a Rs.60,000 crores colossus—an achievement which

earned Reliance a place on the global Fortune 500 list, the first ever Indian private

company to do so. Dhirubhai is widely regarded as the father of India’s capital

markets. In 1977, when Reliance Textile Industries Limited first went public, the

Indian stock market was a place patronized by a small club of elite investors

which dabbled in a handful of stocks. Undaunted, Dhirubhai managed to convince

a large number of first-time retail investors to participate in the unfolding

Reliance story and put their hard-earned money in the Reliance Textile IPO,

promising them, in exchange for their trust, substantial return on their

investments. It was to be the start of one of great stories of mutual respect and

reciprocal gain in the Indian markets. Under Dhirubhai’s extraordinary vision and

leadership, Reliance scripted one of the greatest growth stories in corporate

history anywhere in the world, and went on to become India’s largest private

sector enterprise. Through out this amazing journey, Dhirubhai always kept the

interests of the ordinary shareholder uppermost in mind.

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ABOUT RELIANCE

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the

Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s

leading private sector financial services companies, and ranks among the top 3

private sector financial services and banking companies, in terms of net worth.

Reliance Capital has interests in asset management and mutual funds, stock

broking, life and general insurance, proprietary investments, private equity and

other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC)

registered with the Reserve Bank of India under section 45-IA of the Reserve

Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial services

sector in India and aims to become a dominant player in this industry and offer

fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limited to

offer need based Life Insurance solutions to individuals and Corporates.

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CORPORATE OBJECTIVE

Reliance Life Insurance strongly believes that as life is different at every stage,

life insurance must offer flexibility and choice to go with that stage. They are

fully prepared and committed to guide their customers on insurance products and

services through their well-trained advisors, backed by competent marketing and

customer services, in the best possible way.

Aim to become one of the top private life insurance companies in India and to

become a cornerstone of RLI integrated financial services business in India.

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CORPORATE MISSION

“To set the standard in helping our customers manage their financial future”.

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SWOT ANALYSIS

STRENGTHS:

1) Reliance Life Insurance Company Limited is the part of the Reliance Capital

which is already an established brand name so its brand name can be used to sell

the products easily.

2) It offers a wide range of products catering to the needs and requirement of the

customer. So it is has the ability to adapt the changes.

3) Reliance has a long and strong history of solvency, financial stability.

4) It has dedicated Employees.

5) It has well efficient management.

6) It has a strong IT base which plays an important role in today’s scenario.

WEAKNESSES:

1) Newly established company, so people seems it risky. It has covered a span of

4 years.

2) Lack of efficient, skilled staff.

3) Lack of advertisement, so most of the customers are not aware of the Reliance

Life Insurance.

OPPORTUNITY:

1) There is a vast untapped market in India. The life insurance penetration in India

is approximately 2.5%. So it has large potential which can be harness.

2) Since Indian economy is a fast growing economy which provides a lot of

opportunity in this sector.

3) Since it has been observed that there is high growth of ULIP industry which

can be catered to.4) There is less coverage in rural areas which can be covered.

25

THREATS:

1) The main threat is from the other players who have captured the greater market

share like LIC, ICICI Prudential.

2) IRDA has put a restriction on the policies offered by the company, although it

is a threat for the whole insurance industry.

26

RESEARCH METHODOLOGY

As this is an exploratory research, therefore the data which has been used for

conducting research is only secondary data.

Secondary data is data that is neither collected directly by the user nor specifically

for the user, often under conditions not known to the user.

Examples include- Government reports.

Secondary information has already been collected for some other purposes. It may

be available from internal sources, or may have been collected and published by

another organization. Secondary data is cheaper and more quickly available than

primary data, but likely to need processing before it is useful.

Some are the sources of secondary data:

•Published reports

•Government statistics

•Scientific and technical Abstracts

•Company’s financial statements

•Company’s website

Secondary source of data has been collected and used in project making.

The research has made use of the information available on the company’s website

as well as the pamphlets of various ULIP plans of company.

27

ULIP PLANS OFFERED BY RELIANCE LIFE INSURANCE

1) Reliance Money Guarantee Plan

2) Reliance Super Automatic Investment Plan

3) Reliance Child Secured Plan

4) Reliance Wealth + Health Plan

5) Reliance Super Golden Years Plan

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Reliance Money Guarantee Plan

Reliance Money Guarantee Plan is a Unit Linked product addressing

comprehensive need to strike that perfect balance of Protection and Savings that a

customer deserve as he grow successfully. The Reliance Money Guarantee Plan is

a Regular Premium Unit Linked Policy which guarantees the entire premium

(including premiums for top- ups) paid by you. This is a plan which helps a

customer to reap all the benefits of a rising market simultaneously protecting him

from the downside risk of the market.

Key Features

1) The sum of all premiums paid is guaranteed on maturity or on death

before the maturity.

2) Unique Return Shield feature to protect your returns

3) Choice to invest in 3 investment fund options

4) Liquidity in the form of partial withdrawals from top-up fund.

The work procedure of the plan

The premium contributed by a customer net of Premium Allocation Charges and

Miscellaneous Charge is invested in fund option of his choice for a specified

period of time as selected by him and units are allocated depending on the price of

units for the fund/funds. The Fund Value is the total value of units that he hold in

the fund. The Policy has a minimum Guaranteed Fund Value which is equal to

total of all premiums paid (excluding any additional and extra premiums if any),

to be payable on survival to maturity or earlier death. The amount of top-up

29

premiums paid is also guaranteed on death provided there is no partial

withdrawal. The amount of top-ups premium is guaranteed on maturity provided

the top-ups premium was paid at least 10 years before the date of maturity and

there is no partial withdrawal. The Sum Assured under the Policy is fixed on the

basis of the selected annual premium and Policy Term.

The Mortality Charges and Policy Administration Charges are deducted through

cancellation of units whereas the Fund Management Charge is priced in the Unit

Value. The premiums for riders, if selected, are payable over and above the

premium for the basic Policy.

Benefits

1) Capital Guarantee

2) Life Cover Benefit

3) Sum Assured

Flexibility

1) Return Shield an innovative way to protect your returns

2) Pay top-ups

3) Switching Option

4) Premium Redirection

5) Convenient Premium Paying options

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Reliance Money Guarantee Plan at a glance

Basic Plan Minimum Maximum

Age at Entry 30 days 55 years last birthday

Age at Maturity 18 years last birthday 80 years last birthday

Policy Term 10 years 30 years

Optional Riders

Term Life Insurance Benefit Rider

Age at Entry 18 years last birthday 59 years last birthday



Sum Assured 25,000Up to basic Policy Sum Assured

Accidental Death and Accidental Total and Permanent Disablement Rider

Age at Entry 18 years last birthday 60 years last birthday



Sum Assured 25,000 Up to basic policy Sum Assured subject to a maximum of Rs 50,00,000 on accidental death and Rs 500,000 per annum on total permanent disability.

31

Charges under the plan

1. Premium Allocation Charges:

This is a percentage of the premium appropriated towards charges from the

premium received.

YearPremium Allocation Charge ( as percentage of premium amount)

Year 1 20%

Year 2 5%

Year 3 to 5 3%

Year 6 to 8 2%

9th year onwards 1%For top-up premium the Allocation Charge is 2%.

2. Policy Administration Charges:

Rs 40 will be deducted per month per Policy (charged monthly through

cancellation of units).

3. Switching Charge:

First four switches in any Policy Year are free. There will be a charge of Rs100

per switch on subsequent switches.

4. Surrender Charge:

This charge is levied on the Fund Value at the time of surrender of the Policy as

under:

Year of Surrender of Basic Plan/top-ups

Surrender Charge asa percentage of fund value

1 to 3 Not allowed

4 20%

5 10%

6 onwards Nil

32

5. Service Tax & other applicable charges:

These charges are to be levied on the Mortality Charge and on Rider Premiums.

The level of this charge will be as per the rate of Service Tax along with the other

applicable taxes/ charges on risk premium, if any, as declared by the Government

from time to time. The current rate of Service Tax (including the Education Cess

on Service Tax) on risk premium is 12.24%. Currently, this charge is borne by the

Company. However, the Company reserves the right to pass on this charge as well

as other charges/taxes to the Policyholder in future.

6. Miscellaneous Charge:

Fixed Miscellaneous Charge of Rs 2 per Rs 1000 Sum Assured will be collected

on inception of the Policy.

Tax Benefit

As per current tax rules premiums paid are eligible for tax deduction under

Section 80C of the Income Tax Act, 1961. Provided the premium in any years

during the term of the Policy does not exceed 20% of the Sum Assured, maturity

and withdrawals are eligible for tax benefit under Section 10(10D). Death Benefit

are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section

80C premiums up to Rs 100,000 are allowed as deduction from your taxable

income.

Term Life Insurance Benefit

Customer have the option of taking or removing the Term Life Insurance Benefit

Rider at any time during the term of the Policy subject to Medical and Financial

Underwriting provided the criteria in respect of minimum and maximum age at

33

entry, Policy Term, Premium

Payment Term, Sum. Assured are satisfied.

The maximum Sum Assured under Term Life Insurance Benefit Rider will be

equal to the Sum Assured under Basic Plan.

15 day free look period

A customer is entitled to a free-look period of 15 days. If at the end of this time,

he do not wish to continue this Policy, then he may request us in writing to cancel

this Policy by returning it to the Company. The Company will refund the

premium paid by him after deducting a proportionate premium for the cover the

company provided to the customer during that time. Company will also deduct

any medical examination costs and Stamp Duty Charges incurred by the company

in respect of the Policy.

34

Reliance Super Automatic Investment Plan

Automatic investment plan- The plan that automatically directs an investment and

yield returns like a money plant.

Features

1) Two plan options to choose from Ready-made and Tailor-made

2) Life Stage asset allocation to ensure automatic change in investment

patterns, under the Ready-made Plan option

3) Freedom to decide a customer’s own fund mix based on his risk profile

under the Tailor-made Plan

4) Regular, limited, single premium paying options

5) Unmatched flexibility through company’s ‘Exchange Option’

6) Liquidity in the form of partial withdrawal

7) Option to avail of Accidental Death Benefit, Accidental Total and

Premium Disability.

Benefits

1) A smart plan which adapts to changing risk profile with increasing age

2) Option to lower the average cost of units through systematic transfer of

funds

3) Flexibility to switch between funds and plans

4) Options for additional Insurance cover available through riders

35


A customer have the liberty to choose between the Ready-made and Tailor-made

Plan options. The premium contributions made by him, net of Premium

Allocation Charges and Sum Assured Related Charges are invested in fund/funds

of his choice and units are allocated depending on the price of units for the

fund/funds.

The Fund Value is the total value of units that a customer hold in the fund/ funds.

The Mortality Charges and Policy Administration Charges are deducted through

cancellation of units, whereas the Fund Management Charge is priced in the Unit

Value.

Reliance Super Automatic Investment Plan at a glance


Age at Entry 30 days 65 years last birthday

Age at Maturity

18 years last birthday 80 years last birthday

Premium Paying Term

5 years 30 years

Min Sum Assured

Regular / Limited Premium: Annualised Premium for 5 years or Annualised Premium for half of the policy term, whichever higher

Single Premium 125% of the single premium amount

Max Sum Assured

No Limit

36

Benefit IllustrationAge of the customer 30 35 40 45

Annual Premium Paid 25,000 25,000 25,000 25,000

Policy Term 15 15 15 15

Premium Paying Term 15 15 15 15

Sum Assured 1,87,500 1,87,500 1,87,500 1,87,500

Maturity Values:at 6% investment returnat 10% investment return

4,95,1046,94,534

4,94,4136,93,530

4,93,0176,91,444

4,90,5066,87,755

Minimum Premium

Yearly Half Yearly Quarterly Monthly

Regular Premium option Rs 10,000 Rs 5,000 Rs 2,500 Rs 1,000

Limited Premium Rs 20,000 Rs 10,000 Rs 5,000 Rs 2,000

Single Premium Rs 25,000

Min Top Up amount Rs 2,500

Tax Benefit



during the term of the Policy does not exceed 20% of the Sum Assured, maturity

and withdrawals are eligible for tax benefit under Section 10(10D). Death benefits

are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section

80C premiums up to Rs 100,000 are allowed as deduction from your taxable

income.

37

Reliance Secure Child Plan

Reliance Secure Child Plan – A unique life insurance cum savings plan. Start

saving from now and secure the future of your child.

Features

1) Insurance cover on the life of child

2) Money at critical milestones in child’s career path - college education,

higher education, marriage

3) Child is completely protected – company will continue to pay the

premiums even if customer is not alive

4) Life time income to child in the event of disability

5) Return Shield option to protect investment returns

6) Liquidity in the form of partial withdrawals

7) Capital guarantee available on maturity and on death of the child for basic

and top-up premiums


This is a non profit unit linked endowment plan where the life insured is the child

with premium waiver benefit on death of the proposer (father or mother).

The premium contributed by a customer net of Premium Allocation Charges and

Miscellaneous charges is invested in fund option of his choice for a specified


units for the fund/funds. The Fund Value is the total value of units that customer

hold in the fund/funds. The policy has a minimum guaranteed fund value which is

equal to 95% of total Premiums paid under the basic plan less extra or additional

premiums if any provided no partial withdrawals were made from any of the

funds except redemption of points from e-Account for availing of services of web

38

based community and that the Equity fund was never selected up to the date of

death. The sum assured under the policy is fixed on the basis of the selected

annual Premium and policy term.

The allocation charges and miscellaneous charges are deducted from the

Premiums before allocation of units.

The mortality charges (along with the service tax on mortality), charges for total

and permanent disability due to accident and policy administration charges are

deducted through cancellation of units whereas the fund management charge is

priced in the unit value. The Premiums for riders, if selected, are payable over and

above the Premium for the basic policy.

Benefits

1) Capital Guarantee

2) Commencement of risk cover

3) Life Cover Benefit

The different fund options

A. Funds available in respect of basic plan and top-up premium:

The plan offers three funds for basic plan and top-up contributions namely: Fund

G, Fund H and Equity Fund. A customer has the option to decide his own fund

mix with respect to premiums under the basic plan and top-ups.

B. Funds available in respect of Return Shield Option:

Return Shield Fund will be available if Return Shield Option is selected. The

returns earned under the basic plan and top-up contributions will be transferred to

Return Shield Fund if Return Shield option is selected.

39

Flexibility

a) Return Shield

b) Partial Withdrawals

c) Pay top-ups

d) Switching Option

f) Convenient Premium paying options

Charges Available under the plan

1) Premium Allocation Charges:

This is a percentage of the Premium appropriated towards charges from the

Premium received. It is deducted from the premium as and when the Premium is

received.

The initial allocation charge varies by the amount of the premium paid.

The rates are given below

Initial allocation charge- 25% of the premium in the first year

Year Renewal allocation charge as % of annualized premium

2nd year 5%

3rd year and 4th year 3%

5th year to 10th year 2.50%

40

The allocation charge on the single premium and top-ups will be at the rate of 3%

of the single premium / top-up amount.

2. Policy Administration Charges:

A monthly administration charge will be deducted by canceling units in advance

at the beginning of each monthly anniversary of the policy.

Premium Payment Term Administration charge (Rs. per month)

Regular Premium Policies 40

Limited Premium Policies

(during premium payment term)

40

Limited Premium Policies

(after premium payment term)

35

Single Premium 35

3. Fund Management Charges:

The fund management charges under each fund are given below:

Fund Name Annual Rate

Fund G 1.30% p.a.

Fund H 1.30% p.a.

New Fund I( New return shield fund) 1.25% p.a.

New equity fund, new pure equity fund, infrastructure fund, energy fund, madcap fund

1.35% p.a.

4. Switching Charge:

First four switches in any policy year are free. There will be a charge of Rs.100

per switch on subsequent switches.

41

5. Mortality Charge:

The Mortality Charges are based on customer attained age, are determined using

1/12th of the charges mentioned in the Mortality Charge table below and are

deducted by canceling the units from his fund every month.

6. Surrender charge/Partial withdrawal charge:

This charge is levied on the Fund Value at

the time of surrender of the Policy as

under:

Year Of Surrender/ partial

withdrawal

Surrender Charge/ Partial Withdrawal Charge as a percentage

of Fund Value Being Surrendered/partially Withdrawn In

Case of Regular Premium Policies

1 to 3 20%

4 20%

5 10%

6 onwards Nil

7. Service Tax & other applicable charges:

These charges are to be levied on the Mortality charge. The level of this charge

will be as per the rate of Service Tax along with the other applicable taxes/charges

on risk premium, if any, as declared by the Government from time to time. The

current rate of service tax (including the education cess on service tax) on risk

premium is 12.36%.

42

Exchange Option

This option is available for existing policyholders after completion of three policy

years from the date of commencement. Under this option, the policy holder can

transfer policy benefits (surrender, maturity etc.) either fully or partially to

another plan wherein exchange option is available.

Tax Benefit



during the term of the Policy does not exceed 20% of the Sum

Assured, maturity and withdrawals are eligible for tax benefit under Section

10(10D). Death benefits are tax free under Section 10(10D) of the Income Tax

Act, 1961. Under Section 80C premiums up to Rs. 100,000 are allowed as

deduction from your taxable income.


In Case the Policy Holder disagrees with any of the terms and conditions of the

policy, he may return the policy to the Company within 15 days of its receipt for

cancellation, stating his/her objections in which case the company will refund an

amount equal to the non allocated premium plus the charges levied by

cancellation of units plus fund value as on the date of receipt of the request in

writing for cancellation, less the proportionate premium for the period the

company has been on risk and the expenses incurred by the company on medical

examination and stamp duty charges.

43

Reliance Wealth + Health Plan

Reliance Wealth + Health Plan, a health insurance plan underwritten by Reliance

Life Insurance Company Limited (Reliance Life), is designed to work in

conjunction with contributions towards Savings. The uniqueness of this plan is

that it not only provides benefits for covered injuries but also for other injuries by

encashment from the unit Fund. This plan from Reliance Life offers the

Hospitalization and Surgical Benefits and also covers Critical Illnesses. In short

this plan provides a customer with a quality Health cover that fits his Life Style.

Features

1) A Unit Linked plan with Unique Savings Component

2) Twin benefit of market linked return and health protection

3) Flexibility to take care of customer family’s health

4) Option to pay Top-ups

Benefits

1) A comprehensive health plan that

- helps a customer to pay the routine medical expenses

- covers multiple major surgeries

- takes care of the follow-up tests and medicines post hospitalization.

2) Fund option including Equity fund to harvest the best from the growing Equity

market.

44

3) Income tax benefit under

section 80C, 80 D and 10(10D) of the Income Tax will be available.


This is a non profit unit linked health plan where there can be multiple

lives insured. The principal insured is the policyholder and the other

insured person(s) are the family member(s). The family consists of the

Principal Insured (Policyholder), the Spouse as Insured Spouse and the

first two eligible children by seniority in age. The plan takes care of the

hospitalization expenses which include:

1) Daily Hospitalization expenses

2) Intensive Care Unit expenses

3) Post Hospitalization expenses in the form recuperation benefits

The premium contributed by customer net of Premium Allocation Charges and

Miscellaneous charges is invested in fund option of his choice for a specified


units for the fund/funds. The Fund Value is the total value of units that he hold in

the fund/funds.

The allocation charges are deducted from the premiums before allocation of units.

The insurance charges (along with the service charge), are deducted through

cancellation of units whereas the fund management charge is priced in the unit

value. The premiums for riders, if selected, are payable over and above the

premium for the basic policy.

45

Flexibility

1) Partial Withdrawals

2) Pay top-ups.

3) Switching Option

4) Premium Redirection

5) Premium paying options

Reliance Wealth + Health Plan at a glance:


Age at Entry of the Child

3 month(Completed) 19 years last birthday

Age at Entry of the Principal Insured / Spouse

18 years last birthday 55 years last birthday

Age at Maturity of the Child

- 20 years last birthday

Age at Maturity/Benefit ceasing age of the Principal Insured / Spouse

- 65 years last birthday

Policy Term (in multiples of 5 years)

10 years 25 years

46

Charges under this plan

1. Allocation charges:

These are deducted from the savings

premiums as they are paid and are as

follows:

Year Allocation charge as a % of

Annualised Premium

1 25%

2 year onwards 5%

2. Hospitalization charges:

This charge will apply for all Lives from inception. These hospitalization charges

will be deducted on a monthly basis on the beginning of first day of each policy

month using 1/12th of the Hospital Cash Benefit rates.

3. Policy administration charge:

A monthly administration charge of Rs.40 will be deducted by canceling of units

in advance at the beginning of the month.

4. Switching charge:

There are 52 free switches during any policy year. Subsequent switches if any will

have a fixed charge of Rs.100 per switch.

5. Fund management charge:

47

Fund Name

Money Market Fund 1.25% p.a.

Gilt Fund 1.25% p.a.

Corporate Bond Fund 1.25% p.a.

Equity Fund 1.50% p.a.

6. Service Tax Charge:

This charge (along with education cess) will be levied on the morbidity charges.

The level of this charge will be as per the rate of Service Tax on risk premium,

declared by the Government from time to time. The current rate of service tax

(including education cess) on risk premium is 12.36%.

Tax Benefit

Benefits and premiums payable under the policy are subject to tax laws

and other financial enactments as they may exist from time to time.

As per current tax rules premiums paid in respect of hospitalization charges

are eligible for tax deduction under section 80 D of the Income Tax Act,

1961( the Act). The balance of premium is eligible to tax deduction under

section 80 C of the Act, provided the annual premium during the year does not

exceed 20% of the Sum Assured.


In Case the Policy Holder disagrees with any of the terms and conditions

of the policy, he may return the policy to the Company within 15 days of

its receipt for cancellation , stating his/her objections in which case the

company will refund an amount equal to the non allocated premium Plus

48

the charges levied by

Cancellation of units plus fund value as on the date of receipt of the

request in writing for cancellation , less the proportionate premium for the

period the company has been on risk and the expenses incurred by the

company on medical examination and stamp duty charges.

RELIANCE SUPER GOLDEN YEARS PLAN

Retirement means different things to different people, while some want to relax

and take a trip around the world, some want to start up a venture of their own, and

pursue a dream harnessed for years. The power to make your autumn years

special lies only with customer. The Reliance Life Traditional Golden Years Plan

gives him the power and the right kind of solution - A retirement plan that allows

a customer to save systematically and generate the much-needed corpus to make

his old age years look golden.

Under this plan the investment risk in the investment portfolio is borne by

the policyholder.

Key Features

- Non linked non- profit plan

- Addition of Accumulation Rate at the of every calendar month - Rate for

FY 2010-11: 7.75% p.a.

- Flexibility to increase your savings any time by paying additional

premium.

- Tax free commutation up to one third of benefits at Vesting Age.

The work procedure of Reliance Life Traditional Golden Years Plan

49

The plan works in two parts - the

Accumulation Period (i.e. the Policy Term) and the Distribution Period (i.e. after

the Vesting Date). The Accumulation Period is the time when a customer builds

his Account values through premium payment.

He pay premium every year for the entire term and get accumulated value which

will be maintained in a separate account called 'Accumulation Account' in respect

of each policyholder, which will be credited with accumulation rate at the end of

every calendar month.

The accumulation rate shall be applied proportionately to any increase in the

Account values. An additional accumulation account will be maintained

for any additional premiums paid.

After the Vesting Date, the Annuity Payments begins. Vesting Date means the

date from which the pension will start.

Plan at glance

Minimum Maximum

Age at Entry 18yrs last b’day 75yrs b’day

Maximum Vesting

Age

85yrs last birthday

Minimum Policy Term [10 or up to age 45 years, whichever is higher]in

years

Base Premium Yearly-10,000 No Limit

Half-Yearl-5000

Quarterly-2500

Monthly-1000

Additional Premium Rs.1000/- Per

Installment

No limit. However the

50

total of additional

premiums at any point

of time shall not

exceed

50% of the total base

plan premium paid

till that time

An Accumulation Account

Accumulation Account is a separate account specially maintained for a customer.

All the premiums he pay will be credited in the Accumulation Account after

deducting the Allocation fees for the relevant year.

The rate of allocation fees under the plan is stated below.

Year Allocation Fee as percentage

of annualised premium

Year 1 7.5%

Year 2 to 10 5%

Year 11 onwards 1%

Single premiums 2%

The rate of allocation fees under additional premiums will be 2% of the

additional premiums. In addition to the premiums, his accumulation Account will

be credited with accumulation Rate. The accumulation Rate will be declared in

advance at the start of every financial year.

51

However this will be added to

customer’s account pro-rata at the end of every calendar month.

While there is no upper limit on the accumulation Rate that will be declared from

year to year, the company undertakes that the accumulation Rate to be declared in

future will not be less than the Savings Bank deposit interest rate declared by the

Reserve Bank of India (RBI).

The accumulation Rate for the FY 2010-11 will be 7.75% p.a. annually, declared

accumulation rate would be available on our website www.reliancelife.com

Once the accumulation rate is declared and credited to the accumulation account

and additional accumulation account, it will be guaranteed for the rest of the

policy term. After adding the accumulation Rate to customer’s account, company

shall deduct account administration fees of 1.25% p.a. of the account value, at the

end of every calendar month. There shall be monthly deductions of Policy

administration Fee of Rs 40 per month from customer accumulation account.

An Additional Accumulation Account

Any additional premium that a customer pay over and above the regular premium

will be credited into this account after deducting the allocation fees of 2% of the

additional premiums paid.

At the end of every calendar month, the additional accumulation Account will be

credited with the accumulation rate on pro-rata basis. The accumulation Rate on

additional accumulation account will be at the same level as the rate declared on

the accumulation account.

After addition of the accumulation rate, account administration fees of 1.25% p.a.

will be deducted from the additional accumulation account, at the end of every

calendar month. There will not be any further deductions from the additional

accumulation account.

A company shall accept the additional premiums as long as all the due premiums

under the base policy are paid.

52

Benefits a customer can avail in this policy

At Vesting:

1. On vesting, a customer can purchase annuity plan for the total of balances

in the accumulation account and additional accumulation account, if any.

2. Customer may commute up to one third of benefit as tax free lump sum

and the balance can be used for the purchase of annuity

3. Open Market Option: customer can purchase an annuity either from

Reliance Life Insurance Company Limited or from any other registered Life

Insurance Company.

At Death: In the unfortunate event of death during the Policy term, the beneficiary

will get the total of balances in the accumulation account and additional

accumulation account, if any as on intimation of death and will be paid in full.

The policy terminates on payment of death benefit.

Grace Period for payment of premiums

There is a grace period of 30 days from the due date for payment of regular

premiums. In case of monthly mode, the grace period is of 15 days.

Surrender the Basic Policy (Accumulation Account)

The policy will acquire a surrender value after two full years' premiums have been

paid. The surrender value will be available after completion of two complete

policy years.

Whenever full surrender value of the basic plan is paid, the surrender value of any

additional premium will also be paid without any deductions.

53

Once a policy is surrendered, it

cannot be reinstated. The Policyholder may take the full surrender value in cash or

may purchase an annuity with the surrender proceeds the surrender value will

depend on the number of premiums paid and the year of surrender.

Surrender Value on accumulation account under the base policy is stated below:

Year of Surrender Surrender Value (provided two full

years premiums have been paid) as a %

of

Accumulation Account

First 3 years Surrender not allowed

4th policy year 80%

5th policy year 90%

6th and subsequent policy year 100%

Surrender the Additional Accumulation Account

A full surrender can be done on the additional accumulation account. The full

surrender value will be available in respect of on Additional Accumulation

Account. Surrender value will be the balance in Additional Accumulation

Account on the date of surrender. On full partial surrender of Additional

Accumulation Account, there will not be any deduction towards surrender

penalty.

Discontinuation of the Premium Payment

If a customer discontinue the premium payments before premiums are paid for

first two consecutive policy years. If the payment of premiums is discontinued

before premiums are paid for first two consecutive policy years, the policy lapses.

The Policy Administration fees will be deducted. The Company will credit

Accumulation Rate to the Accumulation Account and Additional Accumulation

Account if any at the end of every calendar month and debit the Accumulation

54

Account and Additional Account

with the Account Administration fees.

Any additional premiums can not be paid while a policy is in lapsed condition.

However, an Additional Accumulation Account already existing on the date of

lapse will remain intact. If a policyholder dies while the policy is in a lapsed

condition, the balance in the Accumulation Account and Additional Accumulation

Account, if any on the date of intimation of death will be paid.

A lapsed policy can be revived within the revival period (i.e. a period of 5 years

from the due date of first unpaid premium or maturity date whichever is earlier).

If a lapsed policy is not revived at the end of period of revival, the policy will be

terminated.

If at any point of time during the revival period, the balance in Accumulation

Account is not sufficient to cover the Policy Administration Fee for the next

month, the balance in Additional Accumulation Account will be utilized for

meeting the Policy Administration Fee.

If the balances in Accumulation Account and Additional Accumulation Accounts

are not sufficient to meet the policy administration fees for the next month, the

policy will be terminated. A terminated policy cannot be reinstated. Whenever the

base policy is terminated, the Additional Accumulation Account will also be

terminated by paying the balance in the Additional Accumulation Account to the

policyholder.

If you discontinue the premium payments after premiums are paid for two

complete policy years:

If the payment of regular premiums is discontinued after the regular premiums for

two complete policy years are paid, a policy will be in "Paid-up" status.

Policy Administration fees will be deducted from the accumulation Account.

At the end of every calendar month, the Company will credit the Accumulation

Account and Additional Accumulation Account with the Accumulation Rate and

debit the Accumulation and Additional Accumulation Accounts with Account

Administration Fees.

55

Additional premiums cannot be

paid while a policy is in paid up condition.

The death benefit under a paid up policy will be the balance in the Accumulation

Account and Additional Accumulation Account, if any. If at any point of time

during the revival period, the balance in Accumulation Account is not sufficient

to cover the Policy Administration Fee for the next month, the balance in

Additional Accumulation Account will be utilized for meeting the Policy

Administration Fee. If the balances in Accumulation Account and Additional

Accumulation Accounts are not sufficient to meet the policy administration fees

for the next month, the policy will be terminated. A terminated policy cannot be

reinstated. Whenever base policy is terminated, the Additional Accumulation

Account will also be terminated by paying the balance in the Additional

Accumulation Account to the policyholder.

A paid up policy can be revived during the revival period (i.e. a period of 5 years

from the due date of first unpaid premium or maturity date whichever is earlier).

If the policy is not revived during the period of revival, the policy will be

terminated by paying the surrender value at the end of revival period .

Revival of the policy

A customer can revive lapsed or paid-up policy by recommencing the payment of

premiums at any time within a period of five years from the due date of first

unpaid premium but before the maturity date of the policy.

A loan facility under this Policy

Not Available

15 day free look period:

56

In the event the policyholder

disagree with any of the terms and conditions of the policy, he/she may return the

policy to the Company within 15 days of its receipt for cancellation, stating

his/her objections in which case he/she shall be entitled to a refund of the

premium paid.

Nomination and Assignment

Nominations will be allowed under this plan as per Section 39 of the Insurance

Act, 1938. Assignment not allowed under this plan.

General Exclusion

If the life insured, whether sane or insane, commits suicide within 12 months

from the date of commencement of this policy or the date of any revival of the

policy the company will limit the death benefit to the accumulation account Value

and Additional Accumulation Account value, if any.

Tax Benefit

Premiums paid are eligible for tax deduction under the Income Tax Act, 1961 and

subsequent amendments.

Please note that all benefits payable under the policy are subject to tax laws and

other financial enactments as they may exist from time to time. You are

recommended to consult your tax advisor.

57

ANALYSIS

FOR THE ANALYSIS A COMPARSION HAS BEEN DONE AMONG THE

PRODUCTS AND THEIR RESPECTIVE RETURNS GENERATED, WITH IN

THE TIME SPAN OF TWO YEARS, OF RELIANCE LIFE INSURANCE

WITH ICICI PRUDENTIAL.

NOW FOLLOWING ARE THE BASIC COMPARISON DETAILS:

RELIANCE MONEY GUARANTEE PLAN AND ICICI INVEST

SHIELD LIFE

COMPARISON MONEY GUARANTEE PLAN

INVEST SHIELD LIFE

58

SEGMENTATION NOT AVAILABLE.CUSTOMER SEGMENTATION IS MADE.

CAPITAL GUARANTEE IS AVAILABLE. IS AVAILABLE.

UNIQUE FEATURE RETURN SHIELD OPTION INVEST SHIELD OPTION

POLICY ADMIN. CHARGE

RS40 PER MONTH RS50 PER MONTH

FUND MANAGEMENT CHARGES

1.29%P.A.

1.25%P.A.

PREMIUM ALLOCATION CHARGES

1ST YEAR-20%2ND YEAR-5%3RD TO 5TH YEAR-3%6TH TO 8TH YEAR-2%9TH YEAR ONWARDS-1%

1ST YEAR-30%2ND YEAR-10%3RD ONWARDS-3%(AND THIS VARY ACC. TO AMOUNT OF PREMIUM)

LOAN FACILITY NO LOAN CAN BE AVAILED.

LOAN CAN BE AVAILED, CURRENTLY – 40% OF TH E SURRENDER VALUE.

RIDERS AVAILABLE NEW MAJOR

SURGICAL BENEFIT RIDER

NEW CRITICAL CONDITIONS(25) RIDER

TERM LIFE INSURANCE BENEFIT RIDER

ACCIDENTAL DEATH AND TOTAL AND PEMANENT DISABLEMENT RIDER

CRITICAL ILLNESS RIDER

ACCIDENTAL AND DEATH BENEFIT RIDER

WAIVER OF PREMIUM RIDER

59

COMPARISON WITH THE HELP OF RETURNS GENERATED WTIH IN THE PAST TWO YEARS

RETURNS OF RELIANCE MONEY GUARANTEE PLAN

Fund Performance

NAV Performance Analysis

Following are the Unit values from 01 April 2008 to 31 Aug 2010 for MGP - Return Shield Fund.

60

MGP - Return Shield Fund

Fund NameNAV

Growth(CAGR %)

MGP - Return Shield Fund 8.2046 %

RETURNS OF ICICI PRU INVEST SHIELD PLAN

Fund Performance


Following are the Unit values from 01 April 2008 to 31 Aug 2010 for INVEST SHIELD LIFE Fund.

61

INVEST Shield life Fund

Fund Name NAV Growth(CAGR %)

INVEST shield life fund 9.42%

RELIANCE SUPER AUTOMATIC INVESTMENT PLAN AND ICICI PRU LIFE TIME SUPER PLAN

62

COMPARISON SUPER AUTOMATIC INVESTMENT PLAN

LIFE TIME SUPER

PREMIUM RS10,000 P.A. RS18000 P.A.

LOAN FACILITY NO LAON IS AVAILABLE LOAN IS AVAILABLE UPTO 40% OF SURRENDE VALUE

SUM ASSUREDMIN- 5 TIMES OF THE ANNUALISED PREMIUM.MAX-30 TIMES OF THE ANNUALISED PREMIUM.

SUM ASSURED IS A MULTIPLE OF THE ANNUAL PREMIUM PAID.

FUND OPTION READY MADE TAILOR MADE

MAXIMISER BALANCER PROTECTOR LIQUID

RIDERS NEW MAJOR

SURGICAL BENEFIT RIDER

NEW CRITICAL CONDITIONS(25) RIDER

TERM LIFE INSURANCE BENEFIT RIDER

ACCIDENTAL DEATH AND TOTAL AND PERMANENT DISABLEMENT RIDER

CRITICAL ILLNESS BENEFIT RIDER

ACCIENTAL AND DISABLEMENT RIDER

UNIQUE FEATURE SYSTEMATIC TRANSFER PLAN OPTION IS AVAILABLE

FLEXIBILITY TO KEEP CHANGING THE CUSTOMER’S LIFE TIME NEEDS

PREMIUM ALLOCATION 1ST YEAR-20%2ND & 3RD YEAR-3%

1ST YEAR-20% (PRE.<50,000)

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CHARGES4TH & 5TH YEAR-2%6TH YEAR ONWARD-1%

-18% (PRE.>50,000)2ND YEAR-8.5%3RD YEAR ONWARDS-4%

FUND MANAGEMENT CHARGES

READY MADE-1.32%P.A.

TAILOR MADE-1.31%P.A.

MAXIMISER-2.25% BALANCE-2.25% PROTECTOR-1.5% PRESERVER-0.75%

SWITCHES 52 FREE SWITCHES 4 FREE SWITCHES


RETURNS OF RELIANCE SUPER AUTOMATIC INVESTMENT PLAN

Fund Performance


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Following are the Unit values from 01 April 2008 to 31 Aug 2010 for AIP - Equity Fund.

AIP - Equity Fund

Fund NameNAV

Growth(CAGR %)

AIP - Equity Fund 8.2200 %

RETURNS OF ICICI PRU LIFE TIME SUPERFund Performance


Following are the Unit values from 01 April 2008 to 31 Aug 2010 for LIFE TIME SUPER Fund

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LIFE TIME SUPER Fund


LIFE TIME SUPER Fund 7.15% 8.94%(MAXIMISER F)

RELIANCE HEALTH+WEALTH PLAN AND ICICI PRU HOSPITAL CARE

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COMPARISON HOSPITAL CARE

WAITING PERIOD 90 DAYS 90DAYS

MAX AGE AT ENTRY 60 YEARS 55 YEARS

DAILY HOSPITALISATION CASH BENEFIT

AVAILABLE AVAILABLE

SURGICAL BENEFIT BUILT INTO THE PLAN, OVER 900 SURGERIES

PREM. PAYING RIDER, 33 MAJOR SURGERIES ONLY

RECUPERATING BENEFIT

ON 5 DAYS OF DHCB; 3*DHCB

ON 5 DAYS OF DHCB; 2*DHCB

CRITICAL ILLNESSNOT AVAILABLE; BUT 33 ILLNESSES UNDER CRISIS COVER

PREM. PAYING RIDER; ONLY 25 ILLNESSES COVERED

ICU BENEFIT YES YES

COVERAGE FRO FIRST 48 HOURS

AVAILABLE PAYABLE FROM THIRD DAY ONWARDS

ANNUAL LIMIT 90 DAYS PER POLICY YR (30 DAYS FOR ICU)

FIRST YR- 18 DAYS(7 FOR ICU)THEREAFTER-60 DAYS(30 FOR ICU)

LIFE TIME LIMIT 1800*DHCB 180 DAYS(90 DAYS FOR CHILDREN BELOW 5 YRS)

MAX. COVERAGE AVAILABLE

PLAN D-RS 4000 PER DAY FOR EACH MEMBER OF THE FAMILY

RS2500 PER DAY FOR PRIMARY; RS1500 FRO SPOUSE AND RS1250 FOR CHILDREN

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HOSPITALISATION & SURGERY COVERAGE

SUPERIOR COVERAGE LIMITED COVERAGE

FUNDS AVAILABLE NO FUNDS 4 FUNDS

PORTFOLIO STRATEGY

NA READY MADE OR TAILOR MADE

INEDPENDENT OF MEDICLAIM

YES YES

LIFE COVER BUILT INTO PLAN PREMIUM PAYING RIDER

PREM. ALLOCATION CHARGE

NIL FY-20%THEREAFTER-3%

POLICY ADMIN CHARGE

RS60 PER MONTH RS40 PER MONTH


RETURNS OF RELIANCE HEALTH AND WEALTH PLAN

Fund Performance


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Following are the Unit values from 01 April 2008 to 31 Aug 2010 for RELIANCE HEALTH AND WEALTH FUND

W+HP - Equity Fund

Fund NameNAV

Growth(CAGR %)

W+HP - Equity Fund 0.4674 %

RELIANCE SUPER GOLDEN YEARS PLAN AND LIFE TIME PENSION PLAN

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COMPARISON SUPER GOLDEN YEARS PLAN

BASIC UNIT-LINKED PENSION PRODUCT

SAVING CAN BE MAXIMISED BY TAKING THE ADVANTAGE OF THE MARKET.

SUM ASSURED 5 TIMES OF THE ANNUALISED PREMIUM.

RS1,00,000

AGE AT ENTRY(PROPOSER)

MIN-18 YEARSMAX-65 YEARSMAX AGE AT VESTING-75 YEARS

MIN- 18 YEARSMAX-60 YEARSMAX AGE WITH ZERO BENEFIT-65 YEARS

TERM MIN-16 YEARS MIN-10 YEARS

ANNUITY OPTION LIFE ANNUITY LA WITH RETURN LA GUARANTEED

FOR 5,10 OR 15YRSTHEREAFTER

LIFE ANNUITY LA WITH RETURN LA GUARANTEED JOINT LIFE LAST

SURVIVOR(RETURN) JLLS(WITHOUT

RETURN)

OPEN MARKET OPTION AVAILABLE AVAILABLE

EXTENSION OF RETIREMENT DATE

AVAILABLE AVAILABLE

COMMUTATION OPTION AVAILABLE AVAILABLE

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FUND OPTION8 FUNDS(MONEY MKT, BALANCE, GROWTH, GILT, ENERGY, MID CAP ETC.)

(MAXIMISER, BALANCER,PROTECTOR, PRESERVER ETC.)

POLICY ADMIN CHARGE RS40 PER MONTH RS20 PER MONTH

FUND MGMT CHARGE 3.5%P.A. 1%P.A.

PREMIUM ALLOCATION CHARGE

1ST YR-7.5%2ND TO 10TH YR-5%11TH YR ONWARDS-1%

1ST YR-22%2ND YR-15%3RD TO 10TH YR-1%11TH YR ONWARDS-NIL

SURRENDER VALUE1ST 3 YRS-NIL4TH YR-80% OF F.V5TH YR-90% OF F.V6TH YR ONWARDS-100%

BESIDE 1ST YR- NILAFTER 1ST YR-25% OF F.VAFTER 2ND YR-40%AFTER 3RD YR- 60%AFTER 4TH YR-100%


RETURNS OF RELIANCE SUPER GOLDEN YEARS PLAN

Fund Performance


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Following are the Unit values from 01 April 2008 to 31 Aug 2010 for RELIANCE SUPER GOLDEN YEARS FUND

GYP - Equity Fund

Fund NameNAV

Growth(CAGR %)

GYP - Equity Fund 11.3793 %

RETURNS OF ICICI PRU LIFE TIME PENSION PLAN

Fund Performance


Following are the Unit values from 01 April 2008 to 31 Aug 2010 for ICICI LIFE TIME PENSION FUND

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LIFE TIME PENSION Fund


LIFE TIME PENSION Fund 7.84%

RELIANCE LIFE SECURE CHILD PLAN AND ICICI PRU SMART KID PLAN

COMPARISON RELIANCE SECURE CHILD PLAN

ICIC PRU SMART KID

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BASIC FEATURE MONEY AT CRITICAL MILESTONES OF CHILD’S CAREER

SAVING + PROTECTION

SUM ASSURED ANNUALISED PREM. * POLICYTERM/2

MIN=RS1,00,000MAX=INFINITY

AGE AT ENTRY(CHIL) MIN-0YRMAX-15YRS

MIN-30 DAYSMAX-15YRS

AGE AT ENTRY(PARENT)

MIN-21YRSMAX-50YRS

MIN-20YRSMAX-60YRS

PARTIAL WITHDRAWALS

AFTER 3YRS AFTER 5YRS

AMNT OF WITHDRAWALS

20% OF FUND VALUEFLEXIBILITY TO

DECIDE, 5 WITHDRAWALS IN THE

WHOLE TERM(20%, 25%, 30%, 35%,

40%)

E-ACCOUNT AVAILABLE NOT AVAILABLE

RETURN SHIELD OPTION

AVAILABLE NOT AVAILABLE

FUNDS 8 FUNDS 7 FUNDS

RIDERS 6 RIDERS AVAILABLE 3 RIDERS AVAILABLE

SETTLEMENT OPTION AVAILABLE NOT AVAILABLE

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PREMIUM ALLOCATION

CHARGES

1ST

YR-25%2ND YR-5%

3RD TO 4TH YR-3%5TH TO 10TH YR-2.5%

2ND TO 5TH YR-4%6TH TO 10TH YR-2%

11TH ONWARDS-1%


RETURNS OF RELIANCE SECURE CHILD PLAN

Fund Performance


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Following are the Unit values from 01 April 2008 to 31 Aug 2010 for RELIANCE SECURECHILD FUND

.

SCP - Equity Fund

Fund NameNAV

Growth(CAGR %)

SCP - Equity Fund 6.9022 %

RETURNS OF ICICI PRU SMART KID PLAN

Fund Performance


Following are the Unit values from 01 April 2008 to 31 Aug 2010 for ICICI PRU SMART KID FUND

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SMART KID Fund

Fund NameNAV

Growth(CAGR %)

SMART KID Fund 9.6 %

INTERPRETATION

While studying about the Unit Linked Insurance Plans of Reliance life, certain

things can be interpreted. These are as follows:

1) Insurance plans offered by reliance, provides insurance benefits to its

customers.

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2) Reliance helps its

customers to safeguard their investment.

3) ULIPs help the people to save their hard earned money.

4) These plans provide tax benefits to its customers.

5) Company’s allocation charges are quite high in its money guarantee plan.

6) Company provides assured amount on some of its policies if the amount

has been deposited for specific period of time.

7) Company also provides switching option to its customers, which enables

the investor to guide his investment to various funds as per the market

fluctuations.

8) Company also provide with the readymade investment option which helps

the customers to understand the funds more clearly.

9) Free look period of 15 days is provided by the company to its customers,

which enables the people to get its policies cancelled within the 15 days

from the date of issuance of policy.

FURTHER THE INTREPRETATON IS DONE WHILE CONSIDERING THE ICICI PRU PRODUCTS

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We can see the returns generated

by both the companies, the past track record of ICICI Prudential is much

competent than of reliance life insurance company’s products.

As observed from the above data, the fund performance of ICICI Prudential Life

Insurance is much better than of Reliance Life Insurance, but it is also true that

ICICI Prudential is into Life Insurance business since 2000 and Reliance has

entered into the market in 2006.

As far as returns and claims are concerned, ICICI Prudential has given decent

returns in the past 2 years & claim process is also quite fast.

Despite of 4yrs of existence in the market, Reliance is improving on giving better

returns to their customers. Therefore, good returns are expected in future as well.

Reliance is also offering a vast Portfolio of funds offered in various plans, and

also it gives an option to the customer to invest his money into various funds,

called Tailor-Made Option.

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Recommendations

1) Company must reduce its charges on various plans to make the product more

customer oriented.

2) The company should introduce some short term plans along with long term

plans to make more options available to the customers.

3) The company should increase the limit of partial withdrawal after the relavant

time given in a policy.

4) The company must guide their task to the transparency factor for their

customers.

5) The company should enhance its fund management, so that better returns are

generated in future.

6) The Company should send periodical statements to the customers, so that

they can review their investments & returns regularly.

7) Company should focus more on Brand Building through print media as well

as television advertisement, so that they can increase their visibility in the

market.

CONCLUSION

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After the in-depth research conducted the conclusion can be viewed as , the

Overall returns of the ICICI Prudential are more lucrative than Reliance life

insurance. But due to some new changes made by IRDA (Insurance regulatory

development authority) the sales for the products are more competitive, less

margins are available to the agents and products have become more customer

oriented.

The new guidelines employed by IRDA are like:

Allocation charges for any company for a ulip product can not be more

than 30% in a 10 year term.

The commission paid to the insurance agent can not be more than 10%

through out the 10 year term.

Surrender of any ulip plan can not be done before 5 years, incase of

surrender of policy before 5 year, a huge surrender charges are to be borne

by the policy holder.

Partial withdrawals for ulip plan were earlier allowed after three years but

the facility of partial withdrawal is extended to 5 years in any ulip plan.

Partial withdrawals were earlier available free of cost but from now

onwards some nominal charges are paid by the policy holder per

withdrawal.

Insurance companies are now focusing on long term products; the

minimum term of any product is 15 years instead of 10 years.

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After analyzing the above

mentioned points, it has been concluded that by implementation of new changes,

IRDA has made the insurance products more customer oriented, as well as there is

maximum participation of funds in the product. Also, companies are focusing on

long term products, so that better returns can be given to the customers. A new

step has been taken by the IRDA is to aware the customer about the earnings of

the agents made through them in a Ulip Product.

After the overall conclusion, these changes will increase the interest of a customer

to invest in a Ulip Product.

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B

IBLIOGRAPHY

Books:

1) Life insurance, McGill, McGill’s Life Insurance( Huebner School Series),

American College 3rd edition (January 1994), page no. 484

2) Principles and Practices of Life Insurance(1892), Nathan Willey and

Henry Worthington Smith, Kessinger Publishing, page no. 201

Magazines and pamphlets:

1) Reliance plans pamphlets

2) Insurance watch magazine.

3) Icici plans pamphlets

Websites referred:

1) www.reliancelife.co.in

2) www.wikipedia.com

3) www.irdaindia.org

4) www.iciciprulife.com

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http://www.iciciprulife.com/

http://www.irdaindia.org/

http://www.wikipedia.com/

http://www.reliancelife.co.in/

shivani life insurance project

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