Download - Final Report Raj SIP

8/14/2019 Final Report Raj SIP

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Summer internship Programme-2009

Reliance Money

INTRODUCTION

Objective of the Project:To develop an understanding of

various Life

insurance products introduced by various life insurance companies.

Scope:

The study then goes on to evaluate and analyse the findings so as to present a clear

picture of trends in the Insurance sector.

This study can be conducted by comparing the performances & products of three

private & government insurance players in insurance industry.

It provides a high degree of exposure to the schemes available under different

insurance companies.

METHODOLOGY:

As the project is based on primary data analysis all of the data involved in the

study are collected directly by me.

The study is based on primarily focusing on primary data collection i.e. through

questionnaires, personal interviews, market survey.

The study involves both qualitative and quantitative analysis of the data collected.

LIMITATIONS OF THE STUDY:

Inadequacy of the information provided (few confidential matters may not

be furnished by the organization).

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ICFAI BUSINESS SCHOOL


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I wanted to conduct this project on a large scale basis that is on major cities

of India but due to financial and time constraint the study of my project is

limited to Indore city.

Industry Profile

Insurance is a contract between two parties whereby one party called insurer

undertakes in exchange for a fixed amount of money on the happening of a certain

event. Insurance is a protection against financial loss arising on the happening of

an unexpected event. The primary purpose of Life Insurance is the protection of

the family. Insurance in it's various forms protects against such misfortunes by

having the losses of the unfortunate few paid by the contribution of the many who

are exposed to the same risk. This is the essence of insurance- the sharing of losses

and substitution of certainty for uncertainty. Insurance companies collect

premiums to provide for this protection. A loss is paid out of the premiums

collected from the insuring public and the insurance companies act as trustees of

the amount collected. In is a system by which the losses suffered by a few are

spread over many, exposed to similar risks.

Insurance is defined as the equitable transfer of the risk of a loss, from one entity

to another, in exchange for a premium.

Life insurance is a policy that people buy from a life insurance company, which

can be the basis of protection and financial stability after one's death. Its function

is to help beneficiaries financially after the owner of the policy dies.

In some sense we can say that insurance appeared simultaneously with

appearance of human society. In earlier economies, we can see insurance in the

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http://www.lifeinsurancewiz.com/http://www.lifeinsurancewiz.com/


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form of people helping each other. For example, if a house is burnt, the members

of the community help build a new one. Should the same thing happen to ones

neighbor, the other neighbors must come to help? Otherwise, neighbors will not

receive help in the future.

History of life insurance.

Insurance in the modern sense, started as a methods of transferring or

distributing risk were practiced by Chinese and Babylonian traders as long ago

as the 3rd and 2nd millennia BC, respectively. Chinese merchants traveling

treacherous river rapids would redistribute their cargo across many vessels to

limit the loss due to any single vessels capsizing. The Babylonians developed a

system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and

practiced by early Mediterranean sailing merchants. If a merchant received a

loan to fund his shipment, he would pay the lender an additional sum in

exchange for the lenders guarantee to cancel the loan should the shipment be

stolen.

Greek monarchs were the first to insure their people and made it official by

registering the insuring process in governmental notary offices. They invented the

concept of the general average. Merchants whose goods were being shipped

together would pay a proportionally divided premium which would be used to

reimburse any merchant whose goods were jettisoned during storm or sinking of

the vessel in the sea.

History of life insurance in India

The Greeks and Romans introduced the origins of health and life insurance c.

600 AD when they organized guilds called benevolent societies which cared for

the families and paid funeral expenses of members upon death. Guilds in the

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middle Ages served a similar purpose. Before insurance was established in the

late 17th century, friendly societies existed in England, in which people donated.

In India, insurance has a deep-rooted history. It finds mention in the writings of

Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya(

Arthasastra). The writings talk in terms of pooling of resources that could be re-

distributed in times of calamities such as fire, floods, epidemics and famine. This

was probably a precursor to modern day insurance. Ancient Indian history has

preserved the earlies traces of insurance in the form of marine trade loans and

carriers contracts.

Insurance in India has evolved over time heavily drawing from other countries,

England in particular.

1818 saw the advent of life insurance business in India with the establishment

of the Oriental Life Insurance Company in Calcutta. This Company however

failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance

business in the Madras Presidency. 1870 saw the enactment of the British

Insurance Act and in the last three decades of the nineteenth century, the Bombay

Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the

Bombay Residency

In 1914, the Government of India started publishing returns of Insurance

Companies in India. The Indian Life Assurance Companies Act, 1912 was the first

statutory measure to regulate life business.

In 1928, the Indian Insurance Companies Act was enacted to enable the

Government to collect statistical information about both life and non-life business

transacted in India by Indian and foreign insurers including provident insurance

societies.

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In 1938, with a view to protecting the interest of the Insurance public, the earlier

legislation was consolidated and amended by the Insurance Act, 1938 with

comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However,

there were a large number of insurance companies and the level of competition

was high. There were also allegations of unfair trade practices. The Government

of India, therefore, decided to nationalize insurance business.

An Ordinance was issued on 19th January, 1956 nationalising the Life

Insurance sector and Life Insurance Corporation came into existence in the same

year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident

societies245 Indian and foreign insurers in all. The LIC had monopoly till the

late 90s when the Insurance sector was reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in

the west and the consequent growth of sea-faring trade and commerce in the 17 th

century. It came to India as a legacy of British occupation. General Insurance in

India has its roots in the establishment of Triton Insurance Company Ltd., in the

year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd,

was set up. This was the first company to transact all classes of general insurance

business.

1957 saw the formation of the General Insurance Council, a wing of the Insurance

Associaton of India. The General Insurance Council framed a code of conduct for

ensuring fair conduct and sound business practices.

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In 1968, the Insurance Act was amended to regulate investments and set

minimum solvency margins. The Tariff Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalisation)

Act, general insurance business was nationalized with effect from 1 st January,

1973. 107 insurers were amalgamated and grouped into four companies, namely

National Insurance Company Ltd., the New India Assurance Company Ltd., the

Oriental Insurance Company Ltd and the United India Insurance Company Ltd.

The General Insurance Corporation of India was incorporated as a company in

1971 and it commence business on January 1sst 1973.

The General Insurance Corporation of India was incorporated as a company.

General insurance business was nationalized with effect from 1st January 1973.

107 insurers were amalgamated and grouped into four companies namely

1)National Insurance Company Ltd.,

2).The New India Assurance Company Ltd.,

3). The Oriental Insurance Company Ltd

4).The United India Insurance Company Ltd.

In 1993 The Government set up a committee under the chairmanship of RN

Malhotra former Governor of RBI to propose recommendations for reforms in the

insurance sector.

In 2000 The IRDA was incorporated as a statutory body in April 2000.

Foreign companies were allowed ownership of up to 26%.

In 2000-Insurance Industry had 16 new entrants, 10 in Life and 6 in General

Insurance

In 2001- Insurance Industry had 5 new entrants, 2 in Life and 3 in General.

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In 2003- Insurance Industry had 1new entrant, Sahara India Insurance Company

Ltd.

In Life Insurance category

In 2004-2005 Insurance Industry had 1new entrant, Shri Ram Insurance company

Ltd.

In 2005-Bharti Axa Life insurance company was granted Certification of

Registration in July,

In 2006-Bharti Axa Life insurance company commenced its operations the newest

player in the insurance sector.

The Insurance Regulatory and Development Authority (IRDA)

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill

in Parliament in December 1999.

The IRDA since its incorporation as a statutory body in April 2000 has

fastidiously stuck to its schedule of framing regulations and registering the private

sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the

insurance sector and in particular the life insurance companies were the launch of

the IRDAs online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that

the insurance companies would have a trained workforce of insurance agents in

place to sell their products, which are expected to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a

framework of globally compatible regulations.

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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIAMAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to

spread the message of life insurance in the country and mobilise peoples savings

for nation-building activities. LIC with its central office in Mumbai and seven

zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and

Bhopal, operates through 100 divisional offices in important cities and 2,048

branch offices. LIC has 5.59 lakh active agents spread over the country.

The Corporation also transacts business abroad and has offices in Fiji, Mauritius

and United Kingdom. LIC is associated with joint ventures abroad in the field of

insurance, namely, Ken-India Assurance Company Limited, Nairobi; United

Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance

Corporation (International), E.C. Bahrain. It has also entered into an agreement

with the Sun Life (UK) for marketing unit linked life insurance and pension

policies in U.K.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion

while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's

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income grew at a healthy average of 10 per cent as against the industry's 6.7 per

cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US).

LIC has even provided insurance cover to five million people living below the

poverty line, with 50 per cent subsidy in the premium rates. LIC's claims

settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of

global average of 40 per cent. Compounded annual growth rate for Life insurance

business has been 19.22 per cent per annum

HDFC Standard Life Insurance Company Ltd.

HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life

insurance companies, which offers a range of individual and group insurance

solutions. It is a joint venture between Housing Development Finance Corporation

Limited (HDFC Ltd.), Indias leading housing finance institution and The

Standard Life Assurance Company, a leading provider of financial services from

the United Kingdom. Their cumulative premium income, including the first year

premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov

2005. They have managed to cover over 11,00,000 individuals out of which over

3,40,000 lives have been covered through our group business tie-ups.

Max New York Life Insurance Co. Ltd.

Max New York Life Insurance Company Limited is a joint venture that brings

together two large forces - Max India Limited, a multi-business corporate,

together with New York Life International, a global expert in life insurance. With

their various Products and Riders, there are more than 400 product combinations

to choose from. They have a national presence with a network of 57 offices in 37

cities across India.

ICICI Prudential Life Insurance Company Ltd.

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ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,

a premier financial powerhouse and Prudential plc, a leading international

financial services group headquartered in the United Kingdom. ICICI Prudential

was amongst the first private sector insurance companies to begin operations in

December 2000 after receiving approval from Insurance Regulatory Development

Authority (IRDA). The company has a network of about 56,000 advisors; as well

as 7 bancassurance and 150 corporate agent tie-ups.

Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between

Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of

expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and

Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001

to conduct General Insurance business (including Health Insurance business) in

India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj

Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany.

Existing Insurance Companies in India

1. HDFC Standard Life Insurance Company Ltd.

2. Max New York Life Insurance Co. Ltd.

3. ICICI Prudential Life Insurance Company Ltd.

4. Kotak Mahindra Old Mutual Life Insurance Limited.

5. Birla Sun Life Insurance Company Ltd.

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6. Tata AIG Life Insurance Company Ltd.

7. SBI Life Insurance Company Limited.

8. ING Vysya Life Insurance Company Private Limited.

9. Met life India Insurance Company Ltd.

10. Royal Sundaram Life Insurance Company Limited.

11. Aviva Life Insurance Co. India Pvt. Ltd.

12. Sahara India Insurance Company Ltd.

13. Shriram Life Insurance Company

14. Life Insurance Corporation of India.

15. Reliance Life Insurance Company Limited.

16. Bharti AXA Life Insurance Company Limited.

17.Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.

18. Aegon Religare Life Insurance Company Limited.

19. DLF Pramerica Life Insurance Company Limited.

20. Star Union Dai-Ichi Life Insurance Company Limited.

21. Future Generali India Life Insurance Company Limited.

22. IDBI Fortis Life Insurance Company Ltd.

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Company Profile

Reliance Money, a Reliance Capital company, is part of the Reliance Anil

Dhirubhai Ambani Group. It is a comprehensive financial services and solution provider providing customers with access to Equity, Equity and Commodity

Derivatives, Portfolio Management Services, Mutual Funds, IPOs, Life and

General Insurance and Gold Coins. Customers can also avail Loans, Credit Card,

Money Transfer and Money Changing services.

The largest broking house in India with over 2.5 million customers and a wide

network of over 10,000 outlets and 20,000 touch points in 5,000+ locations.

Reliance Money endeavors to change the way investors transact in financial

markets and avails financial services. The average daily volume on the stock

exchanges is Rs. 2,000 crores, representing approximately 3% of the total stock

exchange volume.

Reliance Capital is one of India's leading and fastest growing private sector

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

services and banking groups, in terms of net worth.

Sector: Financial

Industry:Brokerage firm

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Employees (last reported count): More than 20,000

Reliance Money has over 22 lakhs customers and more then 10'000 branches in

around 5000 cities in India. Company is among the largest broking and

distribution house of financial products and having share of more then 3% of totalstock market volume at BSE & NSE.

RelianceMoney.com is the web based investment portal (with Online Stock

Trading) from Reliance Money. This website enables its customer to invest &

manage most of the services provided by Reliance Money including Equity

(Stock) Trading, Commodity Trading, Derivatives, Mutual Fund Investment, IPO

Investment, Life Insurances, General insurances, Money Transfer, Forex

exchange, Gold Coins and Credit Cards Services. Company recently entered in to

Wealth Management with tools like investment in equity-linked portfolio

management services, structured products, insurance and mutual funds.

Strong National Network

The company at present has an enviable network of over 10000 branches spread

over 5000 cities across India. All branches are linked on an online real-time basis.

Customers in over 120 locations are also serviced through Telephone service. The

companys expansion plans take into account the need to have a presence in all

major industrial and commercial centers where its corporate customers are

located.

Advantages of Reliance Money

1. Extra security features with 'Security Token'', which is the most secure and tested

technology in computer world.

2. Simple, easy and fast online stock trading.

3. Almost all investment options are available under one account including Equity

Trading, Derivatives, Forex, Commodity, IPO, Mutual Funds and Insurance.

4. Branches are available in all major cities and the number is growing.

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http://funopenchild%28%27http//www.chittorgarh.com/stockmarket/Reliance-Money-Security-Token.asp');http://funopenchild%28%27http//www.chittorgarh.com/stockmarket/Reliance-Money-Security-Token.asp');


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Benefits of reliance money

It's Cost-effective

Lower transaction fees. A flat fee of just Rs. 500/- and transact through

Reliance Money. It offers Single Window Access to almost all financial products.

Its Convenient - Reliance Money's services are through the Internet, Transaction

Kiosks and over the phone.

It's Safe

Accounts are safe guarded with a unique security number that changes every 32

seconds. This number works as a dynamic password to keep your account extra

safe.

It provides you a 3...in...l facility

of Banking, Trading and Demat Account through a single window and transfer

funds across accounts seamlessly.

About Reliance Life Insurance Company Limited:

Reliance Life Insurance Company Limited is an associate company of Reliance

Capital. Limited, a part of the Reliance - Anil Dhirubhai Ambani Group.

Reliance Capital is one of India's leading private sector financial services companies.

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 - Anil Dhirubhai Ambani Group also has presence in Communications,

Energy, Natural Resources, Media, Entertainment, Healthcare and Infrastructure.

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

the Reliance Anil Dhirubhai Ambani Group. The company acquired 100 per cent

shareholding in AMP Sanmar Life Insurance Company in August 2005. Taking

over AMP Sanmar Life provided Reliance Life Insurance a readymade

infrastructure and a portfolio.

AMP Sanmar Life Insurance was a joint venture between AMP, Australia and the

Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices

across the country, 9,000 agents, and more than 900 employees.

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

Reliance Anil Dhirubhai Ambani Group. Reliance Life Insurance is another step

forward for Reliance Capital Limited to offer need based Life Insurance solutions

to individuals and Corporate.

Reliance Capital Ltd. is one of Indias leading and fastest growing 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 Ltd. has

interests in asset management, life and general insurance, private equity and

proprietary investments, stock broking and other financial services.

Whatever your career goal, Reliance Life Insurance is a company big enough for

your dreams. We, along with the other businesses of Reliance Capital, enjoy a

strong position in the financial services category. And this may be the place where

you can have the career you always wanted.

COMPANY PRODUCT

Product Details of Reliance Life Insurance

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Products:-

Individual Plans

Reliance Wealth + Health Plan

Reliance Secure Child Plan

Reliance Automatic Investment Plan

Reliance Money Guarantee Plan

Reliance Endowment Plan

Reliance Special Endowment Plan

Reliance Cash Flow Plan

Reliance Child Plan

Reliance Term Plan

Reliance Whole Life Plan

Reliance Market Return Plan

Reliance Golden Years Plan

Reliance Golden Years Plan Value

Reliance Golden Years Plan Plus

Reliance Simple Term Plan

Reliance Special Term Plan

Reliance Credit Guardian Plan

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Reliance Connect 2 Life Plan

Employee Benefit Plans

Group Term Assurance Policy

Reliance EDLI Scheme

Reliance Group Gratuity Policy

Reliance Group Superannuation Policy

1.Automatic investment plan:-

The Key benefits of Reliance Automatic Investment Plan are as follows:

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

Option to lower the average cost of units through systematic transfer of your funds

Flexibility to switch between funds and plans

Options for additional Insurance cover available through riders

Key Features Reliance Automatic Investment Plan

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

Life Stage asset allocation to ensure automatic change in investment patterns,

under the Ready-made Plan option

Freedom to decide your own fund mix based on your risk profile under the Tailor-

made Plan Regular, limited, single premium paying options

Unmatched flexibility through our Exchange Option

Liquidity in the form of partial withdrawal

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Option to avail of Accidental Death Benefit, Accidental Total, Premium Disability

and Term Insurance riders

How does this Plan work?

As a customer you will have the liberty to choose between the Ready-made and

Tailor-made Plan options. The premium contributions made by you, net of

Premium Allocation Charges and Sum Assured Related Charges are invested in

fund/funds of your 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 you hold in the fund/ funds. TheMortality Charges and Policy Administration Charges are deducted through

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

Value.

Reliance Automatic Investment Plan at a glance

Basic Plan Minimum Maximum

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

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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

Minimum premium

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Regular

Premium

option

Rs

10,000

Rs5,000

Rs 2,500

Rs 1,000

Limited

Premium

Rs

20,000

Rs10,000

Rs 5,000

Rs 2,000

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Reliance Super MarketReturn Plan

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT

PORTFOLIO IS BORNE BY THE POLICYHOLDER.

You have always aspired for the best in life. And we help you achieve just that.

With Reliance Super Market Return plan you can have the twin advantage of

insurance protection as well as reaping the benefits of investment growth. It is a

flexible plan which works all through your life and meets the changing

requirements like additional protection, liquidity through cash, option to invest indifferent asset class, steady golden years and many more.

Key features:

Twin benefit of market linked return and insurance protection

A Unit Linked Plan, different form traditional Life Insurance

products, with maximum maturity age of 80 years last birthday

Option to create your own portfolio depending on your risk appetite

Choose form eight different investment funds

Flexibility to switch between funds

Option to pay regular as well as single premium & Top-ups

Option to package policy with Reliance Major Surgical Benefit

Rider, Reliance Critical Conditions (25) Rider, Reliance Term Life

Insurance Benefit Rider, Reliance Accidental Death and Total andPermanent Disablement Rider.

Liquidity through partial withdrawals.

How does this Plan work?

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The premium paid by you, net of Premium Allocation Charges is invested in

fund/funds of your 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 you 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.

Benefits

Life Cover Benefit: In case of unfortunate loss of life, your

Beneficiary will get sum Assured or Fund Value, whicheveris higher.

You can choose the basic Sum Assured within the minimum

and maximum levels mentioned below.

Minimum Sum Assured:

Regular Premium: 5 times of the annualized premium.

Single Premium: 110% of the single premium .

Maximum Sum Assured and Regular Premium

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Single premium

Rider Benefit: The following optional riders are available on payment of

additional premium on the life of the Life assured;

1. Reliance Major Surgical Benefit Rider: Provides lump sum amount to cover

surgical expenses from a list of 33 surgeries including Open Heart surgery, Kidney

Transplant, Cornea transplantation, Transplant of Lungs and many more.

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2. Reliance Critical Conditions (25) Rider: Provides lump sum amount to take

care of 25 critical conditions including Cancer, Heart Attack, Paralysis, Major

Organ transplant and many more.

3. Reliance Term Life Insurance Benefit Rider: Provide additional death benefit

depending on the sum assured selected under the rider.

4. Reliance Accidental Death and Total and Permanent Disablement Rider:

Provide additional death/disability benefit if the death/disability occurs as a result

of an accident. Also, the Waiver of Premium benefit under the rider continues the

plan incase of disability.

The eight different funds offered areFundNameTargetInvestment Objectives Asset Category (%)AssetAllocation

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Range (%)Reliance Money Guarantee PlanUNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE

BY THE POLICYHOLDER.

Key FeaturesCapital Guarantee: The sum of all premiums paid is guaranteed on maturity or on

death before the maturity.

Capital Guarantee is available on both the basic premiums as well as on top-up

premiums.

Unique Return Shield feature to protect your returns.

Choice to invest from 3 pre-packaged investment fund options.

Unmatched flexibility through our Exchange Option to move between the

Reliance Life Insurance Unit Linked products offered, as you grow up the ladder.

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

Option to package with Accidental Death & Disability and Term Insurance riders.

Some product of LIC

1. Jeevan aannad

Product summary:

This plan is a combination of Endowment Assurance and Whole Life plans. It

provides financial protection against death throughout the lifetime of the life

assured with the provision of payment of a lump sum at the end of the selected

term in case of his survival.

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

salary deductions as opted by you throughout the selected term of the policy or till

earlier death.

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Bonuses:

This is a with-profit plan and participates in the profits of the Corporations life

insurance business. It gets a share of the profits in the form of bonuses. Simple

Reversionary Bonuses are declared per thousand Sum Assured annually at the end

of each financial year. Once declared, they form part of the guaranteed benefits of

the plan. Bonuses will be added during the selected term or till death, if it occurs

earlier. Final (Additional) Bonus may also be payable provided the policy has run

for certain minimum period.

2. Jeevan saral

This is an Endowment Assurance plan where the proposer has simply to choose

the amount and mode of premium payment. The plan provides financial protection

against death throughout the term of the plan. The death benefit is directly related

to the premiums paid. The Maturity Sum Assured depends on the age at entry of

the life to be assured and is payable on survival to the end of the policy term. It

also offers the flexibility of term and a lot of liquidity.

Premiums:

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

deductions as opted by you throughout the term of the policy or till earlier death.

Loyalty Additions: This is a with-profits plan and participates in the profits of theCorporations life insurance business. It gets a share of the profits in the form of

loyalty additions which are terminal bonuses payable along with death benefit or

maturity benefit. Loyalty Additions may be payable from the 10th year onwards

depending upon the experience of the Corporation.

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BENEFITS:

On Death: 250 times the monthly premium, plus return of premiums excluding

extra/rider premium and first year premium, plus the loyalty addition, if any.

On Maturity: Maturity sum assured, plus The Loyalty Additions, if any

SPECIAL FEATURES:

High risk cover at low premium

Extended risk cover for one year after 3 years premium payment.

Optional higher cover through Term Riders

The policyholder can choose a maximum term but can surrender at any time

without any surrender penalty or loss after 5 years

Any number of withdrawals through partial surrendering

OTHER ELIGIBILITY CONDITIONS:

Premium : Minimum premium of Rs.250/- per month for entry age upto 49

years.

and Rs.400/- per month for entry age 50 years and above.

The maximum premium will be Rs.10,000/- per month.

3. Jeevan Tarang

This is an Endowment Assurance plan where the proposer has simply to choose

the amount and mode of premium payment. The plan provides financial protection

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against death throughout the term of the plan. The death benefit is directly related

to the premiums paid. The Maturity Sum Assured depends on the age at entry of

the life to be assured and is payable on survival to the end of the policy term. It

also offers the flexibility of term and a lot of liquidity.

Premiums:

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

deductions as opted by you throughout the term of the policy or till earlier death.

Loyalty Additions:

This is a with-profits plan and participates in the profits of the Corporations life

insurance business. It gets a share of the profits in the form of loyalty additions

which are terminal bonuses payable along with death benefit or maturity benefit.

Loyalty Additions may be payable from the 10th year onwards depending upon

the experience of the Corporation.

BENEFITS:

On Death: 250 times the monthly premium, plus return of premiums excluding

extra/rider premium and first year premium, plus the loyalty addition, if any.

On Maturity: Maturity sum assured, plus The Loyalty Additions, if any

SPECIAL FEATURES: High risk cover at low premium

Extended risk cover for one year after 3 years premium payment.

Optional higher cover through Term Riders

The policyholder can choose a maximum term but can surrender at any time

without any surrender penalty or loss after 5 years

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Any number of withdrawals through partial surrendering

OTHER ELIGIBILITY CONDITIONS:

Premium : Minimum premium of Rs.250/- per month for entry age upto 49years.

and Rs.400/- per month for entry age 50 years and above.

The maximum premium will be Rs.10,000/- per month.

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Different types of plan

Endowment Assurance Plan

Endowment assurance plan is a participating (with profits) insurance plan

that offers the following features:

Provides financial support to the family by way of a lump sum payment in

case of the unfortunate death of the life assured within the term of the policy.

provides a lump sum payment to the life assured on survival up to maturity

This plan is with profits saving plan and is well suited for saving money for your

long term financial goals. This plan also helps provide for the needs of your family

in your absence by paying out a lump sum in the event of your unfortunate death

during the term of the policy.

Optional benefits

You can add the following optional benefits to customise your policy to suit yourneeds:

Critical Illness (CI) Benefit provides an amount, equal to the sum assured

chosen under this optional benefit, on diagnosis of any one of the 6

common critical illnesses(1). The sum assured is payable if you survive for

30 days after the date of the claim. Once such a claim has been met, no

further Critical Illness Benefit is payable. However, your basic policy

continues even after we pay a claim On this benefit.

Additional Term Benefit(ATB) provides an additional amount equal to

the sum assured chosen under this optional benefit, in case of your

unfortunate death.

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Accidental Death Benefit(ADB) provides an additional amount, equal

to the sum assured chosen under this optional benefit, in case of your

unfortunate death:

-due to an accident and within 60 days of an accident.

Waiver Of Premium (WOP) Benefit waives the premium for you in case

you become totally disabled. The waiver is applicable during the period of

total disability.

This plan can be taken on a single life basis or a joint life (first claim)

basis.

Eligibility

This plan can be taken as a single life basis or a joint life (first claim) basis. The

eligibility ages are as follows:

Basic Policy Basic policy with optional benefits

CI ATB ADB WOP

Min. age of entry 12 18 18 18 18

Max. age of entry 60 5 60 55 50

Max. age of expiry 75 70 75 65 60

Minimum term: 10 years Maximum term: 30 years

Tax Benefits

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Tax benefits described in Section 88, Section 80D and Section 10 (10D) of the

income Tax Act are applicable.

Applicable to premium paid for CI and WOP

Payment options

you have the choice of paying your premium either in yearly, half-yearly or

quarterly modes, depending on your convenience

Unit Linked Endowment Plan:

The unit linked endowment plan is an insurance policy that is designed to pay a

lump sum on maturity or on earlier death. The Unit Linked Endowment Plan also

gives the option of additional protection against the six common critical illnesses,

as well as additional protection if death is as the result of an accident.

Your premiums are invested in units of the investment fund of your choice, based

on the prevailing unit price. On maturity you receive the value of your units. On

death (or critical illness, if chosen) you receive the greater of the value of your

units and your selected basic sum assured.

Premiums

Premiums can be paid either quarterly, half-yearly or annually, throughout the

term of the policy. The minimum premium amount is Rs. 10,000 each year.

Premiums can be paid by cash, cheque or demand draft.

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Benefits

There are 4 different options available to choose from:

1. Life Option

On death within the policy term, the greater of the Sum Assured and the

value of the unit-linked fund will be paid to your nominee.

On survival to the end of the policy term the value of the unit linked fund will

be paid to you.

2. Life and Health Option

On death or earlier diagnosis of any one of six common critical illnesses

within the policy term, the greater of the Sum Assured and the value of the

unit-linked fund will be paid to your nominee.

On survival to the end of the policy term the value of the unit-linked fund

will be paid to you.

The illnesses covered under this option are cancer, coronary artery by

pass graft surgery, heart attack, kidney failure, major organ transplant (as

recipient) and stroke

3. Extra Life Option

This option pays the same benefits as the Life Option but, should death

occur within the policy term as the result of an accident, an extra benefitequal to the Sum Assured will be paid.

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4.Extra Life and Health Option

This option pays the same benefits as the Life and Health Option but,

should death occur within the policy term as the result of an accident, an

extra benefit equal to the Sum Assured will be paid.

Levels of protection

Depending on your age at entry, you may choose between 3 levels of cover Low,

Medium or High. For each level the Sum Assured is based on the amount of

premium you pay each year.

The Sum Assured cant be changed during the term of the contract.

Functions of Insurance

The functions of Insurance can be bifurcated into three parts:

1. Primary Functions

2. Secondary Functions

3. Other Functions

The primary functions of insurance include the following:

1) Provide Protection - The primary function of insurance is to provide protection

against future risk, accidents and uncertainty. Insurance cannot check the

happening of the risk, but can certainly provide for the losses of risk. Insurance is

actually a protection against economic loss, by sharing the risk with others.

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2) Collective bearing of risk- Insurance is a device to share the financial loss of

few among many others. Insurance is a mean by which few losses are shared

among larger number of people. All the insured contribute the premiums towards a

fund and out of which the persons exposed to a particular risk is paid.

3) Assessment of risk - Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk. Risk is the basis for determining the

premium rate also.

4) Provide Certainty - Insurance is a device, which helps to change from

uncertainty to certainty. Insurance is device whereby the uncertain risks may be

made more certain.

The secondary functions of insurance include the following:

1) Prevention of Losses - Insurance cautions individuals and businessmen to adopt

suitable device to prevent unfortunate consequences of risk by observing safety

instructions; installation of automatic sparkler or alarm systems, etc. Prevention oflosses causes lesser payment to the assured by the insurer and this will encourage

for more savings by way of premium. Reduced rate of premiums stimulate for

more business and better protection to the insured.

2) Small capital to cover larger risks - Insurance relieves the businessmen from

security investments, by paying small amount of premium against larger risks and

uncertainty.

3) Contributes towards the development of larger industries - Insurance

provides development opportunity to those larger industries having more risks in

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their setting up. Even the financial institutions may be prepared to give credit to

sick industrial units which have insured their assets including plant and machinery.

The other functions of insurance include the following:

1) Means of savings and investment - Insurance serves as savings and

investment, insurance is a compulsory way of savings and it restricts the

unnecessary expenses by the insured's For the purpose of availing income-tax

exemptions also, people invest in insurance.

2) Source of earning foreign exchange - Insurance is an international business.

The country can earn foreign exchange by way of issue of marine insurance

policies and various other ways.

3) Risk Free trade - Insurance promotes exports insurance, which makes the

foreign trade risk free with the help of different types of policies under marine

insurance cover.

TAXATION

TAX BENEFITS OF INSURANCE AND PENSION PLAN.

Life insurance and retirement plans are effective ways of saving

taxes. The tax breaks that are available under various insurance

and pension policies are described below:

1. Life insurance plans are eligible for deduction under Sec.

80C.

2. Pension plans are eligible for a deduction under Sec.

80CCC.

3. Health riders are eligible for deduction under Sec. 80D.

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4. The proceeds or withdrawals of life insurance policies are exempt

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

Tax Rates for Individuals

The rates of income tax for FY 2005-06 are as follows:

Total Income (Rs.)

Rate of tax

Senior

citizen

Women

below 65

years

Other

s

Up to Rs 1, 10,000/-Nil Nil Nil

Above Rs 110,000/- to

125,000/-

Nil Nil 10%


150,000/-

Nil 10% 10%


250,000/-

20% 20% 20%

Above Rs 250,000/- 30% 30% 30%

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HDFC PENSION-II VS BIRLA FLEXI SECURE LIFE

RETIREMENT VS BAJAJ ALLIANZ UNIT GAIN VS LIC

BIMAPLUS AND RELIANCE LIFE

Featur

es

HDFC

PENSION

BIRLA Flexi

Secure Life

Retirement

Allianz Bajaj

Unit gain LIC Bima

Plus

Reliance

Life

{MRP}

Age 18 - 60

years

18 - 60 years 0 60 years

12 - 55

years

30days

to 65

year

Term 10 - 30

years

Minimum Term

of 10 years

Choice rests

with the

consumer

with aminimum

premium

payment

term of 3

years 10 years

10year(m

in) and

30year

(max.)

Sum

Assure

d

Only 5,

10, 20

(age-

based)

multiples

Minimum Sum

Assured is Rs.

50,000. Zero

Death Benefit

is also

Minimum

Sum Assured

is 5 times

the premium

paid.

Maximum

limit up to

Rs. 2 lakhs

58 times

of

premium

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are

allowed as

Sum

Assured.

available.

Surviv

al

benefi

t

Value of

units

partly in

cash

partly

convertedto annuity.

Unit Value is

used to

purchase an

annuity

Value of

Fund at Bid

price

Bid Valueof the fund

units

Value of

units

partly in

cash

partly

converted to

annuity.

Death

benefi

t

Value of

units, no

sum

assured isgiven.

Value of units

in this case

the Sum

Assured iszero.

Higher of

Sum Assured

or value of

units.

Death

during the

first 6

months -30% of SA

+ value of

units, next

6 months -

60% of SA

+ value of

units.

Death

after 1st

year - SA

Max of

S,A,

Andfund

value

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+ value of

units.

Death

during the

10th year -

105% of

SA + value

of units.

Withdr

awal

benefi

t

No Partial

withdrawa

ls are

available.

No Partial

withdrawals

are available

Partial or

complete

withdrawal

at bid price

after 3rd

year

Premature

withdrawal

allowed

after one

year (after

applying

bid-offer

spread.

Partial or

complete

withdraw

al at bid

price

after 3rd

year

Contri

bution

/

premi

um

Minimum:

Rs.

10,000

p.a.

Minimum Rs.

5,000 p.a.

Minimum:

Rs. 10,000

p.a. Minimum

Rs. 10,000

p.a

Minimum:

Rs.

10,000

p.a.

Flexibl

e

Available Not available Only an

increase in

Not

available

Available

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contri

bution

contribution

is allowed

Invest

ment

option

s

5 Fund

Options-

Balanced,

Defensive

Managed,

Safe

Managed,

Liquid &Growth

Nourish,

Growth and

Enrich

Equity Fund,

Debt Fund,

Balanced

Fund, Cash

Fund

Balanced,

Secured &

Risk

8 funds

Surren

der

Value

The

surrender

charge is

25% of 3

years ofregular

premium.

No

charges

after 3

years

Surrender is

available from

the 1st year

itself. In the

1st yearsurrender

charges are

75%, in the

2nd year the

charges are

50%, in the

3rd year the

charges are

25%..

A selling /

purchase

price spread

of 5% will be

applicablefrom the 3rd

year

onwards

Partial

surrender

up to 50%

of bid

value ofunits

allowed

after 3

years from

date of

commence

ment

4th yr 5%

5th yr 3%

Nil

therafter

Top-up Available Available, with Available Available 2500

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with a

minimum

top-up of

Rs 5,000

and

maximum

of 20% of

sum

assured.

a minimum

top-up of Rs.

10,000

(Charges:

1.5% of

the top-up)

Switch 24 Switchesare free.

2 free switchesevery year. Every

additional switch

will be charged at

0.5% of the switch

amount.

Three freeswitches every

policy year.

Subsequent

switches would

be charged

@1% of switch

amount or Rs.

100, whichever

is higher.

No free

switches.

Cost of

switching is

2% of the

fund value.

52 switches

Free p.a.

Initial

Charge

Charges Charges Charges Charges

1st yr-27%,

2nd yr- 27%,

3rd yr

onwards- 1%

20% of the initial

premium in the 1st

year and 2% of the

premium from the

2nd year onwards.

1st year - 70%;

2nd year - 2%;

3rd year - 1%;

No charges

from the 4th

Not

Disclosed

4th yr 5%

5th yr 3%

Nil therafter

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year onwards

Admin

Charge

Admin

charges of

Rs.180 fixed

charge

Per annum.

Policy admin fee

of Rs. 20 per

month

Annual admin

charges of

1.25% p.a. of

net assetsNot

applicable

1.5%-1.75%

Fund

Manage

ment

Charges

Least in the

industry

0.8% of the

fund per

annum

A fund based fee

of 2.25 % p.a. of

the policy fund.

Annual

investment

charge of 1%

p.a. of fund.

1% of the

fund per

annum

Rs40 p.a.

Bonus

units

Available Not Available Not Available Available Not

Available

DATA ANALYSIS & INTERPRETATION

DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE

COMPANIES

COMPANYS NAMENO.OF

RESPONDENTSHARE (%)

L.I.C. 78 78

RELIANCE LIFE

INSURANCE 3 3

ICICI PRUDENTIAL 10 10

SBI LIFE 7 7

HDFC 2 2

TOTAL 100 100

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78

3

10

7 2

LIC

REL

ICICI

SBI

HDFC

INTERPRETATION

78% of the people contacted prefer LIC policy to any other and therefore it

is ranked no.1 by that percent of respondents.

DATA GIVES BENEFITS OF INSURANCE PERCEIVED BY

RESPONDENTS

BENEFITS

NO.OF

RESPONDENT

S

SHARE (%)

Cover Future Uncertainty 55 55

Tax Deductions 20 20

Future Investment 25 25

TOTAL 100 100

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25%Cover Future

Uncertainty

Tax Deductions

Future Investment


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INTERPRETATION

55% of the respondents believe that covering future uncertainty is the

biggest benefit of an insurance policy.

Whereas, 20% and 25% of them believe that the other benefits are Tax

deduction and future investments respectively.

DATA PROVIDES FEATURES OF INSURANCE POLICY THAT

ATTRACTED RESPONDENTS

FEATURE NO.OF

RESPONDENTS

SHARE (%)

Money Back Guarantee 15 15

Larger Risk Coverance 37 37

Easy Access to Agents 7 7

Low Premium 30 30

Companys Reputation 11 11

TOTAL 100 100

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15%

37%

7%

30%

11%

FEATURES OF INSURANCE POLICY

MONEY BACKGUAARENTEE

LARGER RISK COVERANCE

EASY ACCESS TO AGENTS

LOW PREMIUM

REPUTATION OF COMPANY

INTERPRETATION

Majority of the respondent (37%) found Larger risk coverance as the

most attracted feature of the all.

DATA PROVIDES NUMBER OF INSURANCE POLICY TYPE

RESPONDENTS

POLICY TYPE NO. OF

RESPONDENTS

SHARE (%)

LIFE POLICY 75 75

NON LIFE

POLICY

25 25

BOTH 45 45

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NATURE OF POLICY

75

25

45

LIFE

POLICYNON LIFE

POLICYBOTH

INTERPRETATION

75% of the respondents have Life Insurance Policy while 45% have both . (The

% is calculated out of 280 positive response)

DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE

(%)

A saving tool 81 81%

A tax saving device 74 74%

A tool to protect your family 100 100%

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81

74

100

SAVING

TOOL

TAX SAVING

TOOL

FAMILY

INTERPRETATION

81% of the respondents have perception of Insurance being a saving tool.

And 74% of the respondents have perception of Insurance being a tax saving

device.

But 100% of the respondents are with the view that Insurance is a tool to

protect your family.

DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE NO. OF

RESPONDENTS

SHARE (%)

Yes 70 70%

No 30 30%

100 100%

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30%

Yes

No


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INTERPRETATION

Of the sample size of 400 surveyed respondents 70% of the respondents are

having Insurance policy.

30% of the respondents are either not having any Insurance policy at present or

their policy is already matured.

Experiences at Reliance money

This project is helping me to learn how to communicate when work has to be done

at the front-end. Some prospects will listen to you and will give positive response.

Its not easy to work at the front-end one has to be patient and calm. If one is a good

listener than make sure that your half work is done.

While on the other hand some customers will not even listen to you and will give

reactions that one will not even dare to go back to them. It hard sometimes to take

appointments and when its given then person is not available. The golden rule is

how well you communicate to your customers.

RECOMMENDATIONS

As the people think that insurance is a tool to protect their family & a tax

saving device. They are aware of the fact & realizing its, importance. The

company should try to expand & build up its infrastructure because there is a

large potential for insurance in India.

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Company should come up with its branch in various cities. With the objective

and goals to meet the demands & expectations of the public. Because the

entrance of private players will increase the competition and it would be a

tough task to secure a good position in market.

Since Reliance Life Insurance is leading with several companies policies it

should be easy for them to penetrate into the market and secure a good position

if they pay greater attention to the service part provided to their customer and

thereby forming a long and trusted relationship.

As seen from the survey that at present 70% of the customer are having

insurance policy out of which 87.5% of the customer are planning for new

investments. So it can be a good potential for the company and they should

make an attempt to trap these customers.

43% of the customer is even ready to go for insurance if a service provider

away from their home is providing it. But intend they should provide good

products and services. The company should try to convince these customers

and get them in its favor.

CONCLUSION

Our exhaustive research in the field of Life Insurance threw up some intresting

trends which can be seen in the above analysis. A general impression that we

gathered during Data collection was the immense awareness and knowledge among

people about various companies and their insurance products. People are beginning

to look beyond LIC for their insurance needs and are willing to trust private players

with their hard earned money.

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In these type of market conditions the ULIP plan are giving better return to

investor.

Todays ULIP product are better than mutual fund because in this we have

switching options .

References

www.reliancemoney.com

Google search engine

World economic forum

IRDA website

www.reliancelife.com

Hdfc.com

www.licindia.com