CHAPTER 1 AN INTRODUCTION

"The most talked-about and popular Life Insurance product today, is perhaps the Unit Linked Insurance Policy (ULIP). This is an attempt to decipher one of the biggest innovations of the life insurance sector."

Investing prudently and taking adequate life insurance is the key to meet your financial goals. ULIPs offer an ideal avenue that allows you to invest as well as insure.

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

Life insurance is a contract between an insured (insurance policy holder) and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person.

A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies that unlike a pure insurance policy gives investors the benefits of both insurance and investment under a single integrated plan. A Unit Linked Insurance Plan is a combination of Life Insurance and Mutual Fund. A ULIP is basically a combination of insurance and investment product where the investor gets to avail the benefits of insurance as well as investment.

These are unique insurance plans which are basically a mutual fund and term insurance plan rolled into one. The investor doesn't participate in the profits of the plan but gets returns based on the returns on the funds he or she had chosen. Thus ULIP combine the safety of insurance cover with wealth creation prospects.

A Life Insurance ULIP is a special type of insurance plan which offers both, protection for life and at the same time acts as an investment plan. ULIPs have been gaining popularity for their dual role acting as insurance policy and as investment plan simultaneously. Life insurance ULIP plans are particularly useful for people who want a financially secured future. These plans are also useful for those people who cannot afford both investment and insurance at the same time.

CHAPTER 2 PROFILE OF HDFC LIFE

HDFC Life, one of India's leading private life insurance companies, offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), India's leading housing finance institution and Standard Life plc, the leading provider of financial services in the United Kingdom. HDFC Ltd. holds 72.37% and Standard Life (Mauritius Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others.

HDFC Life's product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment and Health. Customers have the added advantage of customizing the plans, by adding optional benefits called riders, at a nominal price. The company currently has 25 retail and 9 group products in its portfolio, along with 10 optional rider benefits catering to the savings, investment, protection and retirement needs of customers.

HDFC Life continues to have one of the widest reaches among new insurance companies with about 500 branches in India touching customers in over 900 cities and towns. The company has also established a liaison office in Dubai. HDFC Life has a strong presence in its existing markets with a strong base of Financial Consultants.

HDFC Limited HDFC Limited, India's premier housing finance institution has assisted more than 4 million families own a home, since its inception in 1977 across 2400 cities and towns through its network of over 311 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRI's and PIO's to own a home back in India. As of March 2012, the total asset size has crossed more than Rs. 1.67 trillion including the mortgage loan assets of more than Rs.1.40 trillion. It is also the largest mobilizer of retail deposit outside the banking system.

Customer Service and satisfaction has been the mainstay of the organization. HDFC has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries.
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Standard Life Established in 1825, Standard Life is a leading long term savings and investment company, with around six million customers worldwide. By understanding and offering innovative products to meet its customers' needs, Standard Life helps people with their financial planning, so they can feel more confident about the future.

Standard Life offers a range of individual and group pensions, SIPPs, ISAs, annuities, life assurance, offshore tax bonds, investment and estate

management,

wealth

management,

planning

management services. Standard Life has created dedicates website for employers, trustees and intermediaries workbenefitszone.com. Standard Life is headquartered in Edinburgh and employs around 9,000 people across the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong and mainland China.

Board Members Mr. Deepak S. Parekh is the Chairman of the Company. He is also the Chairman and Director of Housing Development Finance Corporation Limited (HDFC Limited). Mr. Keki M. Mistry joined the Board of Directors of the Company in December, 2000. He is currently the Vice Chairman and Chief Executive Officer of HDFC Limited. Ms. Renu S. Karnad is the Managing Director of HDFC Limited.
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 Mr. Nathan Parnaby is appointed as the Chief Executive, Europe & Asia of Standard Life in the year 2010. Mr. Norman K. Skeoch is currently the Chief Executive in Standard Life Investments Limited and is responsible for overseeing Investment Process & Chief Executive Officer Function. Mr. Ranjan Pant is a global Management Consultant advising CEO/Boards on Strategy and Change Management.

Awards & Accolades

Golden Peacock Awards 2012 HDFC Life has emerged as the winner of the Golden Peacock Innovative Product / Service Award for the year 2012 (for Click 2 Buy). Golden Peacock Awards, instituted by Institute of Directors in 1991, are now regarded as Holy Grail of Corporate Excellence Worldwide.

CIO100 Symposium & Awards Ceremony 2012 Websense, in Association with CIO, hosted the CIO100 Symposium & Awards Ceremony. We were awarded the Security Supremo Special Awards for bridging gaps in compliance and security by creating an effective integrated framework.

 Top 25 India's Best Companies to Work HDFC Life was ranked amongst the Top 25 India's Best Companies to Work. This was Among The Best Companies In Large Organizations With More Than 10,000 Employees. The Best Companies to Work in India is a study conducted by the Great Place to Work Institute, India in partnership with The Economic Times.

CHAPTER 3 THEORETICAL VIEW

A ULIP is basically a combination of insurance and investment product where the investor gets to avail the benefits of insurance as well as investment. A part of the premium paid is utilized to provide insurance cover to the policy holder while the remaining portion is invested in various equity and debt schemes. The money collected by the insurance provider is utilized to form a pool of fund that is used to invest in various markets instruments (debt and equity) in varying proportions just the way it is done for mutual funds. Policy holders have the option of selecting the type of funds (debt or equity) or a mix of both based on their investment need and appetite.

Life insurance ULIP plans are particularly useful for people who want a financially secured future. These plans are also useful for those people who cannot afford both investment and insurance at the same time.

Investing insurance premiums in capital markets can be a good because, the capital markets are on growth path. Every year, the index of stock market has been increasing steadily. With Life insurance ULIPs, one can invest in capital market in risk-free units basis. By investing in units, ULIPs can reap the profits from capital markets.
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Life Insurance ULIP plans are expressed in terms of the number of units. The value that the units will attain over time is called the Net Asset Value. The investment made can be divided in a broad scale as Equity or Growth Funds, Debt Funds, Balanced Funds, Secure or Liquid Funds. Arriving at maximum Net Asset Value is important for the success of life insurance ULIP plan. Life insurance ULIP is being offered by many insurance companies. There are various plans and sub-plans that are offered. Policy holders can choose different life insurance ULIP products according to their income & risk absorbing capacity.

Life insurance ULIP India plans has the advantage of paying premium amounts in lump sum, annually, half-yearly and monthly. These plans are convenient for both salaried as well for business people. Salaried people may not be able to pay in lump sum. On the other hand, business people can opt for half yearly, annual or lump sum amounts depending upon their financial position.

 History
The first ULIP was launched in India in 1971 by Unit Trust of India (UTI). With the Government of India opening up the insurance sector to foreign investors in 2001 and the subsequent issue of major guidelines for ULIPs by the Insurance Regulatory and Development Authority (IRDA) in 2005 several insurance companies forayed into the ULIP business leading to a plethora of ULIP schemes being launched to serve the investment needs of those looking to invest in an investment cum insurance product.

Salient features of ULIP

Unit linked Insurance Plans or ULIP are popular for its triple benefits of life cover, capital appreciation and income tax benefits.

ULIP investment proportion is structured like a mutual fund. The prime objective of this product is insurance and capital appreciation. Accordingly, a part of the premium paid to the company is allocated towards life insurance cover, administrative charges and

management fees. The rest is invested in market-linked instruments like stocks, corporate bonds and government securities, depending on the asset allocation plan. Most ULIP offer policy holders a choice of plans, namely equity oriented, debt oriented and balanced too.
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Policy holders will get units for the amount invested and not on the full premium amount paid. Investor can switch from one plan to another as per the specified number of times.

ULIP policy holders can make use of features such as top-up facilities, switching between various funds during the tenure of the policy, reduce or increase the level of protection, options to surrender, additional riders to enhance coverage and returns as well as tax benefits.

Tenure
ULIP have a minimum tenure of 5 years and the maximum term depends on the age of the investor. These are also subject to a lockin period of three years before which an investor has no access to the investment amount. Lock- in period is minimum time had to remain invested. One can discontinue plan and stop paying premium but can not withdraw money. In case of surrender benefits will be paid after 5 years as per the plan.

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 Redemption procedure
In the case of ULIP the policy holder can redeem units under any of the following situations: End of the period on the maturity date of the ULIP.

Surrender: If the investor surrenders policy, the surrender value as stated in the policy after the lock-in period of three years will be received by him.

Death: In the event of unfortunate demise of the investor, his nominee receives the sum assured or the value of the units, whichever is higher.

Partial Withdrawals: Some funds allow partial withdrawal at periodic time intervals. Units will stand reduced to that extent for the holder.

The Sum Assured and/or value of the fund units is normally payable to the beneficiaries in the event of risk to the life assured during the term as per the policy conditions.

One can invest additional contribution over and above the regular premiums as per their choice subject to the feature being available in the product. This facility is known as TOP UP facility.

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SWITCH option provides for shifting the investments in a policy from one fund to another provided the feature is available in the product. While a specified number of switches are generally effected free of cost, a fee is charged for switches made beyond the specified number.

The Risk

The risk involved here is that due to the fluctuations in the market, the policy fund value at the end of the plan term might be less than the sum of the premiums paid throughout the policy.

Since ULIP returns are directly linked to market performance and the investment risk in investment portfolio is borne entirely by the policy holder, one need to thoroughly understand the risks involved and ones own risk absorption capacity before deciding to invest in ULIPs.

In

unit

linked

products/policies, the

investment

risk

in

investment portfolio is borne by the policy holder.

13

 Working Principles

A ULIP is basically a combination of insurance and investment product where the investor gets to avail the benefits of insurance as well as investment. A part of the premium paid is utilized to provide insurance cover to the policy holder while the remaining portion is invested in various equity and debt schemes.

The money collected by the insurance provider is utilized to form a pool of fund that is used to invest in various markets instruments (debt and equity) in varying proportions just the way it is done for mutual funds.

Policy holders have the option of selecting the type of funds (debt or equity) or a mix of both based on their investment need and appetite. Just the way it is for mutual funds, ULIP policy holders are also allotted units and each unit has a net asset value (NAV) that is declared on a daily basis.

The NAV is the value based on which the net rate of returns on ULIPs are determined. The NAV varies from one ULIP to another based on market conditions and the funds performance.

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 Benefits of ULIPs

Provides flexibility in investments: ULIPs offer a complete selection of high, medium and low risk investment options under the same policy. You can choose an appropriate policy according to your risk taking appetite, coupled with the opportunity to switch between fund options without any additional expense for specified number of switches. ULIPs provide the flexibility to choose the sum assured and investment ratio in the annual targeted premium. It also offers the flexibility of one time increase in investment portfolio, through top-ups to avail investment opportunity offered by external environment or own income flows.

Transparency: The charge structure, value of investment and expected IRR based on 6% and 10% rate of returns, for the complete tenure of the policy are shared with you before you buy a product. Similarly, the annual account statement, quarterly investment portfolio and daily NAV reporting, ensures that you are aware of the status of your investment portfolio at all times. Most companies publish latest NAVs on their respective websites on a daily basis.

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 Liquidity: To cope with unforeseen circumstances, ULIPs offer the benefit of partial withdrawal; wherein after 5 years you can withdraw funds from our Unit Linked account, retaining only the stipulated minimum amount.

Disciplined and regular savings: ULIPs help you inculcate a regular saving habit. Also, the average unit costs tend to be lower than one time investment.

Multiple benefits bundled in one product: ULIP is an outstanding solution for risk cover, long term investments with the benefit of various investment opportunities, coupled with tax benefits.

Spread of risk: ULIPS are ideal for those investors who wish to avail the benefit of market linked growth without actually participating in the stock market, with the added benefit of riskcover.

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 Type

There are a variety of ULIP plans to choose from based on the investment objectives of the investor, his risk appetite as well as the investment horizon. Some ULIPs play it safe by allocating a larger portion of the invested capital in debt instruments while others purely invest in equity. Again, all this is totally based on the type of ULIP chosen for investment and the investor preference and risk appetite.

Life Insurance ULIPs

A Life Insurance ULIP is a special type of insurance plan which offers both, protection for life and at the same time acts as an investment plan. ULIPs have been gaining popularity for their dual role acting as insurance policy and as investment plan simultaneously. Life insurance ULIP plans are particularly useful for people who want a financially secured future. These plans are also useful for those people who cannot afford both investment and insurance at the same time. Some of the life insurance ULIP products in the present market include:
Aviva New Life Line Bajaj Allianz New Unit Gain II HDFC Endowment Super Suvidha
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 Pension ULIPs

Pension plans are designed to provide annuity amounts in the future with regular payment of premiums in the present. Premiums paid under pension plans are invested in ULIPs. These are also called pension ULIPs. Pension ULIPs are very similar in nature and operation to regular life insurance ULIP plans. In a pension ULIP plan, premiums paid are invested in units. After the completion of the stipulated time period of the pension plan, unlike insurance where the amount is paid in lump sum, annuity is paid to the policy holder either in lump sum, annually, half yearly or monthly for life time.

Various pension ULIP plan in India include:

o o o o o

HDFC Unit Linked Pension ICICI LifeTime Super Pension Birla Sun Life Flexi SecureLife Retirement Plan Max New York Life Insurance SMART Invest Pension Plan Bajaj Allianz Life Insurance New UnitGain Easy Pension Plus

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 Child ULIPs

In order that the investment will increase its value, one must invest in child ULIP insurance. ULIP or Unit linked Insurance Policies are increasing their popularity in the recent times. These are regarded as high risk high return investments that are spread over long periods of time. Each of these policies differs in their growth rate. So, one must consider all aspects before investing in various child ULIP plans.

There is a significant amount of flexibility in child ULIP policies. A parent can invest in lump sum or can invest annually, half-yearly or monthly depending upon his/her financial status and permeability.

Child ULIP comparison is a must for parents who want to invest for their children. This is because various insurance companies offer different child ULIP plans which differ in premiums, premium waiver and guaranteed amount after the maturity. In such condition, child ULIP comparison can derive the best child ULIPs plan.

Some of the best child ULIPs plans in India include:

Smart Steps Plan from Max New York Life Insurance Reliance Secure Child Plan from Reliance Life Insurance SmartKid New Unit Linked Regular Premium from ICICI Prudential Life Insurance
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 ULIPS For Long Term Wealth Creation ULIPs are the right insurance solutions for you if you are looking for a strong wealth creation proposition allied to a core insurance benefit. Such plans are ideal for people who are in their late 20s and early 30s and by investing in such a plan get the flexibility of using it to fund any of their long-term financial goals such as purchase of a house or funding their childrens education. The added element of life cover serves to make these plans a wholesome financial investment option.

Wealth Creation ULIPs can be primarily classified as:

o Single premium - Regular premium plan: Depending upon you needs & premium paying capacity you can either opt for a single premium plan where you need to pay premium only once during the term of entire policy or regular premium plans where you can premium at a frequency chosen by you depending upon your convenience.

o Life Stage based Non life Stage based: Life Stage based ULIPs factor in the fact that your priorities differ at different life stages & hence distribute your money across equity & debt. Here the initial allocation is decided as per your age since age is a significant indicator of risk appetite. Such a strategy ensures that the asset allocation at all times is in sync with your age and changing financial needs.

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o Guarantee plans Non-guarantee plans: Today there are wealth creation ULIPS which also offer guaranteed benefit. These plans are ideal insurance-cum-investment option for customers who want to enjoy the potentially higher returns (over the long term) of a market linked instrument, but without taking any market risk. On the other hand non guarantee plans comes with an in - built range of fund options to choose from ranging from aggressive funds (Primarily invested in equities with the general aim of capital appreciation) to conservative funds (invested in cash, bank deposits and money market instruments with aim of capital preservation) so that you can decide to invest your money in line with your market outlook, time horizon and your investment preferences and needs.

ULIPS for Heath Solution Health ULIP is a recent innovation from the health insurance industry. In a health ULIP part of your premiums are allocated for investment designed specifically to build a health fund to meet future health related expenses. It aims to create a health savings kitty by investing in a long term flexible savings plan with multiple fund options. The health fund thus created allows you to claim for health related expenses of any kind and also fund your future health insurance charges. You can also avail of tax benefit on premium paid u/s 80D.
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 Unit Fund
The allocated (invested) portions of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund. Most insurers offer a wide range of funds to suit ones investment objectives, risk profile and time horizons. Different funds have different risk profiles. The potential for returns also varies from fund to fund. The following are some of the common types of funds available along with an indication of their risk characteristics. General Description Equity Funds Nature of Investments Risk Category Primarily invested in company Medium to stocks with the general aim of High capital appreciation Income, Fixed Interest and Bond Funds Cash Funds Invested in corporate bonds, government securities and other fixed income instruments Sometimes known as Money Market Funds invested in cash, bank deposits and money market instruments Balanced Funds Combining equity investment with fixed interest instruments Medium Low Medium

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 Charges, fees and deductions in a ULIP

ULIPs offered by different insurers have varying charge

structures. Broadly, the different types of fees and charges are given below. However it may be noted that insurers have the right to revise fees and charges over a period of time.

o Premium Allocation Charge This is a percentage of the premium appropriated towards charges before allocating the units under the policy. This charge normally includes initial and renewal expenses apart from commission expenses.

o Mortality Charges These are charges to provide for the cost of insurance

coverage under the plan. Mortality charges depend on number of factors such as age, amount of coverage, state of health etc.

o Fund Management Fees These are fees levied for management of the fund(s) and are deducted before arriving at the Net Asset Value (NAV).

o Policy/ Administration Charges These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate.
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o Surrender Charges A surrender charge may be deducted for premature partial or full encashment of units wherever applicable, as mentioned in the policy conditions.

o Fund Switching Charge Generally a limited number of fund switches may be allowed each year without charge, with subsequent switches, subject to a charge.

o Service Tax Deductions Before allotment of the units the applicable service tax is deducted from the risk portion of the premium.

Premium to purchase units The full amount of premium paid is not allocated to purchase units. Insurers allot units on the portion of the premium remaining after providing for various charges, fees and deductions. However the quantum of premium used to purchase units varies from product to product.

The total monetary value of the units allocated is invariably less than the amount of premium paid because the charges are first deducted from the premium collected and the remaining amount is used for allocating units.
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 NAV Calculation

Each funds unit has a value attached to it, which is unique to that fund and known as the fund's NAV i.e., Net Asset Value. Investment value is the number of units allocated to you multiplied by the funds NAV. The NAV changes daily, as per the value of the fund's total investments. The NAV movement will give you a fair idea on the performance of fund.

The NAV is calculated in the Following Manner

Net Asset Value (NAV) = (Market Value of investment held by the fund +/- the expenses incurred in the purchase/sale of assets + value of Current Assets + any accrued income net of fund management charges - value of Current Liabilities- Provisions) divided by Number of outstanding units in the Fund. Because of the sheer benefits associated with ULIPs, an insurance portfolio without this type of policy is truly incomplete.

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 SEBI-IRDA Conflict Regarding ULIP

Traditionally the ULIP has been under the regulation of the Insurance Regulatory and Development Authority or IRDA. This regulatory dominance has been challenged by the Securities and Exchange Board of India or SEBI. SEBI contends that the ULIP should come under its own purview.

SEBI is the securities regulator and IRDA regulates insurance companies. The prevalent practice is that any financial scheme which has an insurance component tends to be regulated by the insurance regulator. ULIP happened to act as mutual funds, which are subject to the securities regulator. ULIPs also account for 50 per cent and more of the life insurance business and the money collected through them are invested in equities.

The question arose as to whether IRDA or SEBI should regulate ULIPs.

The IRDA had asked the life insurers to ignore the SEBI order. The matter escalated to the Ministry of Finance but no conclusion could be reached at the meeting between the Finance Ministry and Chairman of IRDA and SEBI. The regulatory bodies were asked to move the court as well. The RBI Act, the Insurance Act, the SEBI Act and the Securities Contracts Regulation Act were amended on 18 June 2010 and clarity on regulation of ULIPs was brought.
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The Indian Government on 19 June 2010 put an end to the Securities and Exchange Board of India (SEBI)- Insurance Regulatory and Development Authority (IRDA) conflict over unit-linked plans (ULIPs) maintaining that ULIPS would be regulated by IRDA.

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CHAPTER 4 ULIP- CASE STUDY

HDFC Life offers different ULIPs which can help customer to meet their specific financial objectives. The different ULIPs offered by HDFC Life are as follows:

ULIPs for Children: HDFC SL YoungStar Super II

HDFC SL YoungStar Super Premium

ULIPs for Savings & Investment: HDFC SL ProGrowth Super II

HDFC SL ProGrowth Flexi

HDFC Life ProGrowth Plus

HDFC Life Smart Woman Plan

HDFC SL ProGrowth Maximiser

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HDFC Life Invest Wise Plan

HDFC SL Crest

Group ULIPs: Group Unit Linked Plan Gratuity

Group Unit Linked Plan Leave Encashment

Woman ULIPs: HDFC Life Smart Woman Plan

1) ULIPs for Children:

Features: Regular premium: Minimum premium is Rs. 15000/- and there is no limit on maximum premiums. Premiums are to be paid annually only.

Term limits: term is 10, 15 to 20 years.

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Level of protection: customer can choose any sum assured multiple between 10 times annual premium to 40 times annual premium.

Choice of fund: customer can invest in any fund i.e. Short term fund, Income fund, balanced fund, Blue chip fund, Opportunity fund.

Age limits: for life option minimum 18 years and maximum 65 years.

HDFC SL YoungStar Super II There is no bigger joy than being able to fulfill child's dream. With HDFC SL YoungStar Super II customer can fulfill child's immediate and future needs. So tomorrow when child needs support parents don't have to depend on anyone else. This is ULIP which aims to help to achieve long term savings.

In case of unfortunate demise or critical illness, HDFC Life pays the greater of Sum Assured (less partial withdrawals) or Fund Value to child (Beneficiary). The policy will terminate. HDFC Life will pay 100% of all the future regular premiums to the Beneficiary as and when due, on an annual basis.

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Customer can customize the ideal plan for their child by choosing the premium they wish to invest along with the Sum Assured, depending on the level of protection required.

This plan can be taken by filling Short Medical Questionnaire, which may not require going for medicals.

one can change investment fund choices in two ways:

o

Switching: customer can move their accumulated funds from one fund to another anytime

Premium Redirection: Customer can pay their future premiums into a different selection of funds, as per customer need.

Tax benefits are offered under section 80C and 10(10D) of the Income Tax Act, 1961

HDFC SL YoungStar Super Premium

With HDFC SL YoungStar Super Premium customer can fulfill their child's immediate and future needs- all on their own. Start saving now with this unit linked insurance plan and be assured that savings for their child will continue, even in their absence. This ULIP plan offers customer choice of cover options and benefit payment preferencesall designed to suit their needs.
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The Triple Insurance Benefit helps customer secure their child's immediate and future needs. In case of their unfortunate demise or critical illness, we will pay the Sum Assured to their child (Beneficiary). Their family need not pay any further premiums. With Save -n- Gain benefit, we will pay 50% of all the original regular premiums towards their policy and 50% of the premiums will be paid to the Beneficiary as and when due, on an annual basis. Any Death Benefit or Critical Illness cover terminates immediately. Customer can customize the ideal plan for their child by choosing the premium customer wish to invest along with the Sum Assured, depending on the level of protection required and Benefit payment preference.

This plan can be taken by filling Short Medical Questionnaire, which may not require customer to go for medicals. Kindly refer to the product brochure for details.

Customer can change customer investment fund choices in two ways:

o

Switching: Customer can move customer accumulated funds from one fund to another anytime

Premium

Redirection:

Customer

can

pay

customer

future

premiums into a different selection of funds, as per their need

32

Tax benefits are offered under section 80C and 10(10D) of the Income Tax Act, 1961

2) ULIPs for Savings & Investment:

HDFC Life ProGrowth Plus Customer work hard to attain their dreams. Their money should work harder so that customer can attain their dreams and aspirations. Investing in a unit linked insurance plan is a nice way to build wealth and also enjoy life insurance cover. We understand that customer would like to actively manage their own investment, and prefer to create their own investment strategy.

We present HDFC Life ProGrowth Plus, a simple savings-cuminsurance plan that will enable customer to enjoy life cover and benefit from comfort of creating their own investment strategies. This ULIP plan aims to help customer achieve long term savings while providing insurance coverage as per option selected by customer. i.e. Life and Extra Life.

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Features: Regular premium: Minimum regular premium is Rs. 24000/- for annual, Rs. 10000/- for half yearly and 2500/- for monthly.

Term limits: choose policy term of 10 to 30 years.

Level of protection: customer can choose any sum assured multiple between 10 times annual premium to 40 times annual premium.

Choice of fund: customer can invest in any fund i.e. Short term fund, Income fund, balanced fund, Blue chip fund, Opportunity fund.

Age limits: for life option minimum 18 years and maximum 65 years.

This plan provides valuable protection to their family in case customers are not around. In case of their unfortunate demise during the policy term, we will pay the greater of the Sum Assured or their total fund value to their nominee.

Customer can choose any of the following 2 plan options as per their requirement.
o o

Life Option = Death Benefit Extra Life Option = Death Benefit + Accidental Death Benefit

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On maturity, customer can take the Fund Value at the prevailing unit prices as lump sum or customer can opt for settlement option.

Customers have flexibility of creating their own investment strategies, as per their risk and return appetite.

Customer have flexibility to make partial withdrawals to meet any unplanned expenses

Tax benefits are offered under section 80C and 10(10D) of the Income Tax Act, 1961, as per provisions contained therein.

HDFC SL ProGrowth Flexi Nothing should hold customer back in life. Uncertainties of life can throw best laid plans and aspiration off gear. It's prudent to be prepared and life insurance solutions enable customer to build their savings and enjoy life cover.

With HDFC SL ProGrowth Flexi, customer has a smart savings-cuminsurance unit linked plan that will enable customer to simply provide the finest for their loved ones.

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In this plan customer also enjoy life insurance coverage so that customers loved ones financial future is secured even in their absence. This unit linked plan aims to help policy holder build his/her savings in long term. There are no bonuses attached in this plan.

This plan provides valuable protection to their family in case customer is not around. In case of their unfortunate demise during the policy term, we will pay the greater of the Sum Assured or their total fund value to their nominee.

Customer can choose any of the following 2 plan options as per their requirement.
o o

Life Option = Death Benefit Extra Life Option = Death Benefit + Accidental Death Benefit

On maturity, customer can take the Fund Value at the prevailing unit prices as lump sum or customer can opt for settlement option.

Customer have flexibility of

o

Switching: Customer can move their accumulated funds from one fund to another anytime

Premium Redirection: Customer can pay their future premiums into a different selection of funds, as per their need
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Tax benefits are offered under section 80C and 10(10D) of the Income Tax Act, 1961.

Other ULIPs Savings and Investment plans offered by HDFC Life are:

HDFC SL ProGrowth Super II

HDFC SL ProGrowth Flexi

HDFC Life Smart Woman Plan

HDFC SL ProGrowth Maximiser

HDFC Life Invest Wise Plan

HDFC SL Crest

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3) Group ULIPs
Gratuity Schemes

Most employers have a statutory obligation to pay a gratuity to its employees on termination of employment. This gratuity is in the form of a one-off payment made on termination of employment. It depends on salary and number of years of service, so will therefore increase with time. The HDFC Group Unit Linked plan is a new and innovative unit-linked plan, which offer employers and gratuity scheme trustees a flexible and cost effective way to fund this gratuity liability.

The plan helps a corporate by:

Building a fund systematically, which will be used to meet their future gratuity liability

Providing the opportunity to maximize investment returns and thus provide the benefit in a cost-effective manner

One factor that helps customer to maximize the investment returns is low charges. Our charges are the lowest in the industry and therefore can improve their long-term returns.

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 Leave Encashment Schemes

Many employers provide their employees with the option of encashing their leave to their credit at the time of retirement or resignation. Accounting Standard 15 requires that an actuarial valuation of a company leave encashment liability be carried out and reflected in the books of accounts.

The HDFC Group Unit Linked Plan is an innovative plan, which offers employers a flexible and cost effective way to fund this Leave Encashment liability.

The plan helps an organisation by:

Creating a fund that can be built up to meet their future leave encashment liability

Providing the opportunity to maximise investment returns and thus provide the benefit in a cost-effective manner

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 HDFC Life Smart Woman Plan

HDFC Life Smart Woman Plan, a unique insurance cum investment plan designed specifically for women. This plan ensures that their savings continue, while customer adjusts to the new stages of their life, and customer remains confident to live life their way.

This ULIP plan comes with comprehensive coverage options where we will cover customer against pregnancy complications and congenital conditions or for malignant female-specific cancers. During these critical moments, we assure customer the peace of mind by waiving and funding their premiums so that as customer overcome and adjust to their life their investments continue to grow.

Features: Plan option: choose from classic, premium and elite option.

Annual premium: pay premium yearly. Minimum premium of Rs.24000. maximum premium is Rs.100000 per year.

Policy term: 10 years to 15 years

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Choice of funds: range of 5 funds for investors with different risk appetite.

Age limit: minimum age is 18 years and maximum age is 45 years.

Sum Assured: sum assured up to 40 times annual premium.

Customer can choose plan options as per their needs i.e. Classic or Premier or Elite

Uninterrupted savings with Waiver & funding of premiums for next 3 years on the following events
o o

Pregnancy complications or birth of child with congenital disorder Diagnosis of malignant cancer of female organs

Additional periodic cash payouts under Premier & Elite Options

This plan provides valuable protection to their family in case customer is not around. In case of their unfortunate demise during the policy term, we will pay the greater of the Sum Assured or their total fund value to their nominee.

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On maturity, customer can take the Fund Value at the prevailing unit prices as lump sum or customer can opt for settlement option. Customer can use the maturity benefit to fund their needs - be it for child's education, travel, upgrading their entrepreneurship venture etc.

Customers have flexibility to make partial withdrawals to meet any unplanned expenses.

For more details on terms and conditions, please read the Product Brochure carefully and/or consult Financial Consultant before taking a decision.

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CHAPTER 5 CONCLUSION

ULIPs or Unit Linked Insurance Policies are gaining popularity in the recent times. Importance of ULIP policies has grown in the recent times because of the features and advantages that ULIP policies offer. While under traditional insurance policies, the relationship between premium and assured sum is fixed. But, under ULIPs there is freedom of flexibility in premiums and assured sum. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers to the client.

As time progressed the plans were also successfully mapped along with life insurance needs to retirement planning. In todays times ULIP provides solution for all needs of a client like insurance planning, financial planning for childrens future and retirement planning.

If customer wants to take a low exposure to equity market and still get tax free returns, invest in ULIP but make sure that fund customer are invested is conservative fund. If one is not disciplined enough to make regular investments and need a whip to make invest, invest in ULIP.

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ULIP investors have the option of investing across various schemes similar to the ones found in the mutual funds domain, i.e. diversified equity funds, balanced funds and debt funds. Generally speaking, ULIPs can be termed as mutual fund schemes with an insurance component.

ULIP investors also have the choice of investing in a lump sum (single premium) or using the conventional route, i.e. making premium payments on an annual, half-yearly, quarterly or monthly basis. In ULIPs, determining the premium paid is often the starting point for the investment activity.

ULIP investors also have the flexibility to alter the premium amounts during the policy's tenure. The freedom to modify premium payments at one's convenience clearly gives ULIP investors an edge over their mutual fund counterparts.

One can see that insurance is a better choice while making investment decisions because of features like tax savings, better returns and protection from any miss happening.

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Thus insurance industry has tremendous growth opportunities provided that it meets the expectations of the customers. The changing products of insurance with changing needs of the customers can be a major cause for the growth of the insurance industry.

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