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A PROJECT REPORT ON INCLINATION TOWARDS ULIP (A STUDY ON SECURITY AND INVESTMENT PLAN)

D.A.V. INSTITUTE OF MANAGEMENT SESSION (20062009)


Approved by AICTE and Affiliated to MAHARISHI DAYANAND UNIVERSITY, ROHTAK

Submitted To: In partial fulfillment of the requirement for the degree of BACHELOR OF BUSINESS ADMINISTRATION (BBA)

Submitted By Rishabh Gupta BBA Vth sem Roll No.

CONTENTS OF THE PROJECT


PAGE NO. Preface Certificate from the Organization Acknowledgement Declaration Introduction Objectives & methodology Industry profile Company profile Topic taken in the Organization

INCLINATION TOWARDS ULIP (A Study on security and investment plan) Findings Recommendation Conclusion /summary Bibliography Annexure

PREFACE
Beginning of the system project is entirely creative. This does not come all of a sudden, but it comes by result of discussion, consultation and contemplation. Problem unsolved here can never be satisfactory eliminated later. It is therefore a slow process. Moreover practical training is an important part of management courses. The theoretical studies are not sufficient to get into the corporate world. Only practical knowledge can help us to understand the complexities of large scale organizations. To develop healthy managerial and administration skill in potential managers, it is necessary that theoretical knowledge must be supplemented with exposure to the real environment. Actually, it is life for, a management itself is realized. In my case I confronted myself to ICICI prudential Life insurance company Ltd. And the exposure that I could not have gained from the books. I found it very interesting and challenging. I did my training at GURGAON branch office and my topic of project is INCLINATION TOWARDS ULIP security and Investment solution with special reference to ICICI PRUDENTIAL LIFE INSURANCE.

ACKNOWLEDGEMENT

Heartfelt thanks to the following people. A Few typewritten words of thanks can-not really express the sincerity of my gratitude. But I am still trying to put into words my gratefulness towards all who have helped & encouraged me in carrying out this project. I would like to thank Dr. N. K. Sharma (Director, DAVIM) to give me guidelines and my worthy thanks to my teacher Ms. Meera Wadhwa (faculty member) for their valuable contribution during the academic session and guidance in preparation of this project report. This report conveys my heartiest thanks to Mr. KAPIL CHAWLA, Agency Manager of ICICI PRUDENTIALS LIFE INSURANCE CO. LTD . for giving me this project & helping me in completion of this project. No praise is ample for the never tiring efforts of my colleagues whose constant support feedback, guidance & practical suggestions helped me in completing this Project successfully.

DECLARATION
I hereby declare that the project INCLINATION TOWARDS ULIP (A Study on security and investment plan) for ICICI PRUDENTIAL LIFE INSURANCE is original and bon-a-fide work done by me. The project is being submitted in partial fulfillment requirements for the award degree of Master of Business Administration, Maharishi Dayanand University, Rohtak. The contents of this project are based on the field work and analysis done by me during my tenure at ICICI Prudential, Gurgaon.

RISHABH GUPTA

CHAPTER 1 INTRODUCTION

INTRODUCTION
Insurance Insurance may be described as to protect the economic value of asset. It can be said to be a system of spreading the losses of an individual over a group of individuals. Since it is an intangible product, Insurance Industry is a service industry. Insurance Industry does not produce any goods but sell the promise. A promise to take care of the customers or their dependents in case they suffer a loss due to some peril during the term of policy. What is insurance: Mankind is exposed to many serious perils such as property losses from fire and windstorm and personal losses from disability and premature death. Although it is impossible for an individual to foretell or completely prevent their occurrence but it is possible to provide against their financial effect the loss of property and earnings. From the point of view of the individual the life Insurance may be defined as a contract whereby for a Consideration amount called the premium, one party (the insurer) agrees to pay to the other (the insured) or a beneficiary a particular amount upon the occurrence of death or any other agreed event.

Insurance is the method of spreading and transfer of risks Losses of few unfortunate are shared by and spread over to many exposed to the same risk.

Assets created by the owner in expectation of future needs have a value. Losses of assets for any reason deprive the owner of the expected benefits. It acts as a form of a safeguard against misfortunes.

From the point of view of community life insurance may be defined as a social device to make accumulations to meet uncertain losses resulting from premature death or disability.

Purpose and need of insurance : As said earlier that the making is exposed to many serious perils which risk the security of their belongings. The risk here means that there is a possibility of occurrence of loss or damage to the property, it may happen or may not happen. Insurance is relevant only in the contingency of uncertainty. If there is no uncertainly about the occurrence of the loss it cant be insured against:

Assets are likely to be destroyed or made non-functional due to perils like firefloods, breakdowns, lightning and earthquake.

Damage to assets caused by any perils is the risk that assets are exposed to. Insurance become relevant only if there is uncertainly of occurrence of event leading to loss.

No uncertainty No insurance. We can say that the human life value is an ongoing generating asset, which can be lost on early death or disability caused by accidents.

Insurance doesnt protect the assets but only compensates the economic or financial loss.

Basically insurance covers tangible assets but the concept can be extended to intangible also.

FUNCTIONS OF INSURANCE
The functions of Insurance can be bifurcated into two parts: 1. Primary Functions 2. Secondary Functions The primary functions of insurance include the following: 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. 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. 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. 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: 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 of losses 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. Small capital to cover larger risks - Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty.

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Contributes towards the development of larger industries - Insurance provides development opportunity to those larger industries having more risks in 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.

Life Insurance
Life insurance is a contract where the person requiring and insurance pays a consideration / premium to maintain a policy and the insurer promises to pay a sum assured or a guaranteed amount on the happening of an eventuality. If no eventuality occurs then the insured may be eligible for some bonus also. Why life insurance : 1. Protection of the interest of the family member. 2. Provision for education and marriage of the children. 3. Post retirement income for self and dependents 4. Special needs for medical expenses. 5. Provision for health /illness. 6. Provision for housing. 7. Provision for income tax rebate.

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Benefits of Insurance
Insurance not only serves the ends of individuals or of special groups of individuals but also is advantageous to the society as a whole.

Benefits To The Individual

Superior to any other saving plans: Unlike any other saving plan, a life insurance policy affords full protection against risk of death. In the event of death of a policy holder, the insurance company makes available the full sum assured to the near and dear of policy holder. In comparison, any other saving plan would amount the total saving accumulated till date. If the death occurs prematurely, such saving can be much lesser than sum assured. Evidently, the potential financial loss of the family of the policy holder is sizable. Encourages and forces thrift: A saving deposit can easily be withdrawn. The payment of Life insurance premiums, however, is considered sacrosanct and is viewed with the same seriousness as the payment of interest on a mortgage. Thus, a life insurance policy in effect brings about compulsory saving. Easy Settlement And Protection Against Creditors: A life insurance policy is the only financial instrument, the proceeds of which can be protected against the claims of a creditor of the assured by affecting a valid assignment of the policy. Ready marketing and suitability for quick borrowing :

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A life insurance policy can, after a certain period (generally Three years), is surrendered for a cash value. The policy is also acceptable as a security for commercial loans, for example, a student loan. Disability benefits : Death is not only hazard that is insured; many policies may include disability benefits. Typically, these provide for waiver of future premiums and payment of monthly installment periods. Accidental death benefits : Many policies can also provide for an extra sum to be paid (typically equal to the sum assured) if death occurs as a result of accident. Tax relief : Under the Indian income tax act, the following tax relief is available 1. 20% of premium can be deducted from total income tax liability. 2. 100% of the premium paid is deductible from your total taxable income.

When these benefits are factored in, it is found that most Policies offer returns that are comparable /or even better than other saving modes such as PPF, NSC etc. moreover, the cost of insurance is a very negligible.

Benefits to business : Insurance results in business continuation and welfare of employees. Uncertainty of business losses is reduced by insurance.

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Benefits of society : The welfare of the society is protected. Insurance results in economic growth of the country and reduction in inflation.

ICICI BANK
The World Bank established ICICI LTD in 1955, the Government of India and the Indian Industry, promote Industrial development of India by providing project and corporate finance to Indian industry. ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions of India. ICICI has financed almost all major sector of the economy, covering 6848 companies and 16851projects. In the fiscal year 2002- 2003, ICICI had disbursed a total of Rs 45673 billion. Assets worth.1676.59 billion as on 31st of march 2005 and customer 6 million and 5 million policyholder account. Multi channel network, 573 branches and 2000+ATMs

PRUDENTIAL
Prudential was founded in 1848. Prudential is the largest life insurance company in the United Kingdom. Provides retail financial services products and services to more than 20 million customers, policyholder and unit holders and manages over 300 billion of funds worldwide (as of 31 December 2006). In Asia, Prudential is the leading European life insurance company with life operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam. Prudential is the second largest retail fund manager for Asian sourced assets ex-Japan as at June 2006. Its fund management business has expanded into a total of ten markets.

ICICI + PRUDENTIAL (JOINT VENTURE)


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A Joint venture ICICI and Prudential of UK ICICI Prudential started its operation in December 2000 The key objective of ICICI prudential is to provide the Indian citizen to suit a variety of needs. Prudential genesis Founded in 1848-U.K. Fourth largest insurance company in the world as per fortune 500 in terms of revenues Leading life insurance Company in United Kingdom. Over US$ 270 BILLION (Rs.12, 69,000 crores) under a management. AAA rating from standard & poors (the highest rating) Over 75 years of experience with operation in 11 countries.

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CHAPTER 2 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

Objective of study Type of research Source of data Sampling unit Sample size Type of sampling Method of data collection Instrument used for data collection Limitation

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RESEARCH METHODOLOGY
Research Methodology deals with, the procedure adopted to carry out the study. According to green and Tull: A research design is the specification of methods and procedures acquiring the information needed It is the overall operational pattern or framework of the project that stipulates which information is to be collected from which sources by what procedures.

OBJECTIVE OF STUDY
The purpose of research is to discover answer to questions through the application of scientific procedures. The main aim of research is to find out truth which is hidden and which has not been discovered as yet. We may think of research objectives as falling into a number of following broad grouping: To check the awareness level of people about insurance. To know the reasons for increasing trend of unit linked insurance plan. To know how ULIP are differ from Traditional plans means how they give better returns than traditional plan. Comparison of ULIP with other investment instrument available in the market.

TYPE OF RESEARCH
Research refers to the search for knowledge. It can be defined as scientific and systematic search for pertinent information on a specific topic. It is careful investigation or enquiry especially through search for new facts of any branch of knowledge. Research plays an important role in the project work. The result of the project is completely based upon the research of the facts and figures collected through the different ways of research. That is why it is also called a movement from known to unknown.

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Exploratory or Formulative research: Exploratory research is conducted to clarify the ambiguous problems. Descriptive research: To portray the characteristics of an individual, group, situation. Diagnostic research: To determine the frequency of occurrence of an event.

SOURCE OF DATA
In the data collection method, we have collected both primary and secondary data to meet our objective. Primary data: The primary data was collected by a survey based on the questionnaire. It was formulated on the basis of information gathered by me with the help of Mr. Kapil Chawla who provide useful guidelines and objective of our study. Secondary data: The secondary data was collected from books and internet. Research Approach: The required information in the form of data is collected through survey method, with the help of personal interview through questionnaire method. Sampling plan: There is a stage where the planning is done about the sample units, sample size, sampling procedures, etc. Sampling units: This means, which is to be surveyed. So as mention earlier that the sample units is potential peoples.. Sample size: The sample size means how many peoples should be surveyed. So that total sample size is 100, which cover from different area of Gurgaon. 19

Sampling Procedures: I choose convenient and judgmental sampling for my research. Data collection method : Personal interview method is used for collection of primary data in the form of questionnaire from respondents. Research Instruments: Once the source of data collection is decided then comes the instrument for data collection or the research instrument. In this survey method a questionnaire was framed. This is Philip by the potential people though personal interview

LIMITATION
How so ever impeccable a thing may see to be there always dwell some possibilities of failure and incompleteness. The result of this work also subject to some of limitations. Which are as follows: The main limitation of the study is the availability of time. As the sufficient time was not available for collection of information. Some respondents were not interested in giving answer and they appeared to be busy. Lack of experience.

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CHAPTER 3 INDUSTRY PROFILE

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INSURANCE INDUSTRY PROFILE


Life Insurance : As is evident from its very name, it deals with insurance of human life. Life insurance corporation of India- a public sector undertaking has the monopoly in this sector since its nationalization. In our wordily life, whenever there is uncertainty, there is an involvement of risk. The instinct for security against such risk is one of the basic motivating forces determining human attitudes. As a squeal to this quest for Security, the concept of insurance must have been born. The urge to provide insurance or protection against the loss of life & property must have prompted people to make some sort of sacrifice willingly in order to achieve security through COLLECTIVE CO-OPERATION, in this sense; story of insurance is probably as old as THE story of mankind.

INSURANCE INDUSTRY IN INDIA


India is marching ahead to more prosperous future. The economy is on a high growth path, domestic savings are growing, exports have risen and inflation has stabilized. Infrastructure sector, which even today is woefully inadequate to meet the expected increased industrial activities, has been accorded top priority by the government. All this should reflect in a growth rate of 7 to 8% for the next 3-4 years. With this scenario of high economic growth further reforms in the financial sector are in the Common Minimum Program of the Government. India is regarded as under- insured country with insurance penetration at a very low level of 0.6% of GDP. Insurance, as a rule, has always been given very low priority by corporate India. It is always taken with reluctance, usually only when it is 22

compulsory, and then only by big industrial houses. Without exception it is always inadequate to meet the needs of the corporate sector. In addition to the tradition exposure of fire, floods, workers compensation and the interruption, Corporate India also has to address unpredictable changes in areas such as environment; security; occupational health and safety; public liabilities; Directors and Officers Liability and product liability It therefore becomes quite obvious that purchase of insurance, in itself, will not substitute for a soundly based and property implemented Risk Management Program as insurance can only offer some financial relief by replacing the plants; it cannot replace the loss in development of a business or development of the market. The likely private players: A number of foreign insurance companies have set up representative office in India and have also tied up with various asset management companies. They have either signed Memorandum of Understanding with Indian companies or are trying to do the same. A few of them have been around for the last four to five years. Some have carried out extensive research on the Indian insurance sector. Others have set up liaison offices. All of them are waiting with bated breathe for the opening up of the sector and taking a bite of the great Indian Insurance pie.

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Various Players Presents In The Market

1. Bajaj Allianz Life Insurance Company Limited. 2. Birla Sun Life Insurance Co. Ltd. 3. HDFC Standard Life Insurance Co. Ltd. 4. ICICI Prudential Life Insurance Co. Ltd. 5. ING Vysya Life Insurance Company pvt.Ltd. 6. Life Insurance Corporation of India. 7. Max New York Life Insurance Co. Ltd. 8. Kotak Mahindra Old Mutual Life Insurance Limited. 9. SBI Life Insurance Co. Ltd. 10. Tata AIG Life Insurance Company Limited. 11. Reliance Life Insurance Company Limited. 12. Aviva Life Insurance Co. India Pvt.Ltd. 13. Sahara India Life Insurance Co.Ltd. 14. Shriram Life Insurance Co.Ltd. 15. Bharti AXA Life insurance Company Ltd. 16. Met Life India Insurance Company Pvt. Ltd.

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MOST RELIABLE PVT. LIFE INSURANCE COMPANY

MOST RELIABLE PVT.LIFE INSURANCE CO.


ICICI BIRLA SUN LIFE 39% HDFC STANDARD LIFE MAX NEWYORK LIFE TATA AIG

12% 15%

9%

25%

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INTRODUCTION TO IRDA

Insurance regulatory authority, 1996 (IRA): The IRA was set up in January 1996 The IRA bill has first to be passed by parliament to make the IRA a statutory body. Second, the powers of the erstwhile controller of insurance have to be conferred on the IRA. Third, comprehensive legislation aimed at reviewing the insurance act of 1938 and repealing the LIFE INSURANCE CORPORATION ACT of 1956 and the general insurance (Nationalization) act of 1972 have to be passed. Governments pronouncements: Post statutory status, IRA to be centre piece for future insurance sector reforms IRA will be sole authority, which will be responsible for awarding of licensing i.e. little or no government or political interference in licensing in process. No restriction on the no. of licenses. No composite licenses for life and non life business.

IRDA was set up to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry. After this the private players started entering the market.

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CHAPTER 4 COMPANY PROFILE

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Organizational set up
The organizational set up of a company plays an important role in the overall efficient working of the various departments leading to an improved overall performance. The arrangement has to be made in such a way that activities are carried out in each department in the smooth way. The department has to be made on the basis of various activities of the company. Activities generating revenue should be given more importance than nonrevenue activities. Thus various offices, departments and sections must be created after looking the important activities of the Insurance Company. Important activities: The important activities of the Insurance companies are:- Procuring new proposals for grant of life insurance cover. Scrutiny of proposals and giving decisions for Accepting/rejecting the proposals of Insurance. Issuing a policy document. Keeping track of performance of insurance contract by way of receipt of premiums. Providing assistance in various matters like nominations, assignment, alteration of terms, change of address and payment of claims.

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Other activities like investment of funds, maintenance of accounts, personnel management, data processing and complying with other legal and regulatory requirements.

Structure Of The Company: The ICICI Prudential is a joint venture of ICICI (74%) and Prudential UK (26%). ICICI Prudential Life Insurance was incorporated on July 20, 2000 and was granted a certificate of registration for carrying out life insurance business, by the IRDA on November 24, 2000. ICICI Prudential's capital base stands at Rs. 18.15 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the 9 months ended December 31, 2006, the company garnered Rs.27.22 billion of weighted retail and group new business premium and wrote over 1.1 million policies. Assets held stand at over Rs.1000 billion. It commenced commercial operation on December 19, 2000 becoming one of the first private sector players to enter the liberalized arena. During the short period till March 31, 2003 The company has issued 2.45 policies translating into a premium Income Rs 59.7 million and the sum assured of over Rs 1000 million. The company is now operating in Mumbai. New-Delhi, Pune, Chennai, Kolkata, Bangalore, Ahmedabad, Hyderabad and Lucknow.

ICICI PRUDENTIAL LIFE INSURANCE


ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies and Prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 20.60 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. We began our operations in December 2000 after receiving approval from Insurance 29

Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of over 580 offices, over 230,000 advisors; and 23 bancassurance partners. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India.

Promoters Of Icici Prudential


ICICI Bank : ICICI Bank is Indias second-largest bank with total assets of about Rs.1892.18 billion and a network of about 590 branches and offices and about 2030 ATMs. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital, asset management and information technology.

ICICI Bank posted a net profit ofRs.1, 637 crore for the year ended September 30, 2005. ICICI Banks equity shares are listed in India on stock exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock Exchanges, Mumbai and the National stock exchange Of India limited and its American Depositary Receipts (ADRS) are listed other New York Stock Exchange (NYSE).

PRUDENTIAL PLC :

Established in London 1848, Prudential plc is a leading international financial services company In the UK, with around US$300 billion funds under management, and more than 20 Million customers worldwide (as of 31 December). Prudential has 30

brought to market an integrated range of Financial services products that now includes life assurance, pensions, mutual funds, banking investment management and general insurance. In Asia, Prudential is UKs largest life insurance company with a vast network of 24 life and mutual fund operations in twelve countriesChina, Honk Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam.

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Management hierarchy
MD & C.E.O (Ms. SHIKHA SHARMA) EXECUTIVE DIRECTOR (Mr. BHARGAV DAS GUPTA) HEAD OF SALES, HIMALAYAN (Mr. AMIT PALTA) VICE PRESIDENT (Mr. SANTOSH CHACKO) ASSOCIATE REGIONAL MANAGER (Mr. HEMANT SIKKA) AREA MANAGER (Mr. AJAY NEB) SALES MANAGER (Mr. SUNIL BHATIA) AGENCY MANAGER (Mr. KAPIL CHAWLA) UNIT MANAGER

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VISION

To make ICICI Prudential the dominant life, health and Pensions player built on trust by world class people and service. This we hope to achieve by: Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently. Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders. Providing an enabling environment to foster growth and learning for our employees. And above all, building transparency in all our dealings. The success of the company will be founded in its unflinching commitment to 5 core values- integrity, customer first, Boundary less, Ownership and passion. Each of the values describes what the company stands for the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.

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SWOT ANALYSIS OF ICICI PRUDENTIAL


Strengths: ICICI Prudential is the largest private player in the insurance industry in INDIA , with a market share of around 32% amongst the private players. It received best products innovation award from Asian banker in 2001. Vast untapped market. In a country of 1 billion people there is huge potential market for life insurance products. There is a huge pool of skilled professionals to carry out the successful ventures. ICICI Prudential is one of Indias leading financial institutions. Offering a complete financial solution that encompasses every sphere of life. From commercial banking To stock broking To mutual funds To life insurance To investment banking, The group caters to the financial needs of individuals and Corporate. ICICI prudential is the first company, which got license of insurance trading from I.R.D.A. (Insurance Regulatory & Development Authority) ICICI Prudential is leading in securities. The company has a network in 74 cities in India and offices in New-York, London and Dubai. The group services a customer base of over 2.7 million.

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Weaknesses: Though there is a huge market for insurance polices, the middle class who constitutes bulk of this market is burdened with inflationary pressure and therefore is not able to save for future. Less popularity of ICICI Prudential in villagers. Most of the people have faith on LIC as it is a Govt. Organization.

Opportunities: Out of 320 million insurable market only 20% of population is insured. The ICICI Prudential group is going to open 100 branches of ICICI Prudential in coming 4-5 years. The insurance sector is growing so there is opportunity for business growth. Unemployment is today a big problem in our country; therefore people who have the potential should be encouraged to enter in to this sector. Threats : Competition is growing as new entrants are coming in insurance sector . Main threat is COMPETITORS.

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CHAPTER 5 TOPIC TAKEN IN ORGANIZATION

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Classification of Life Insurance Products


We can classify insurance plan in two categories. Traditional ULIP

Traditional
Term Insurance : Under term insurance plan, sum assured is payable only if death occurs during the specified pre-determined term. If death does not take place during such term the amount of premium stands forfeited. Thus it can be seen that the term insurance is nothing but the cost of pure protection. It is a contract, which provides financial protection if death should occur within a specified period. No survival benefits are provided under the contract. Whole life insurance: Whole life insurance provides for the payment of the face value upon the death of the insured, regardless of when it may occur. This policy furnishes permanent protection to the insured at he moderate cost. This is highly important for the average man or woman of moderate salary, who require considerable family protection and whose limited income does not enable him or her both to pay premiums and to accumulate a large savings fund. The whole life policy provides a capital sum of money in the event of death of the assured whenever that may occur. Endowment Policy: 37

Endowment is a product, which includes Risk cover and saving also. In the pure endowment policy the sum assured is payable in the event of death or definitely on maturity. In an endowment sum assured is for sure given to the policyholder on completion of the term. Endowment plans are very popular in developing nations since they serve a dual purpose of life cover and savings. Many a people in our country go for endowment products because of the compulsory saving aspect. An endowment plan on the other hand is not a cheap plan since the insurer has a dual liability of providing life cover and on maturity giving the entire sum assured.

Annuities: Annuities refer to income or other financial provision usually for retirement or old age. An Annuity may be defined as a periodic repayment made during a fixed period or for the duration of a designated life or lives. In one sense the life annuity may be described as the opposite of insurance protection against death in its pure form a life annuity may be defined as a contract whereby for a premium consideration one party (the insurer) agrees to pay the other (the annuitant) a stipulated sum (the annuity) periodically throughout life. The purpose of the annuity is to protect again a riskthe outliving of ones income.

UNIT LINKED INSURANCE PLAN (ULIP)


Unit linked insurance plan (ULIP) is a life insurance solution that provides the client with the benefits of protection and flexibility in investment. It is a solution which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time . The investment is denoted as unit and is represented by the value that it has attained called as Net Asset Value (NAV).

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UNIT LINKED INSURANCE POLICIES

UNITS IN FUNDS

UNDERLYING INVESTMENT

U LIP came into play in 1960s and became very popular in Western Europe and America. 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 clients. 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 the needs of a client like insurance planning, financial needs, financial planning for childrens future and retirement planning.

Structure Of Ulip

PREMIUM

LESS CHARGE

INVESTMENT REPRESENTED AS UNITS

LIFE COVER

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Benefits of unit linked plan :

ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan is a one stop solution providing 1. Life protection 2. Investment and Savings a. Market linked fund based on risk profile b. Switch option c. Premium redirection d. Automatic transfer plan(ATP) 3. Flexibility of cover continuance 4. Transparency 5. Extra protection with riders a. Death due to accident b. Disability c. Critical illness 6. Liquidity a. During the term partial withdrawals b. At Maturity 7. Tax planning

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Charges Under Ulip

Contribution related charges: These are the charges that are represented as a percentage of the regular or single contribution paid. In case of a regular contribution plan, it is usually high in the first year to pay for the distribution cost. This charges pays for the issuance and for distribution commissions. This charges are running for the policy. Administrative charges: These are charges that are levied for the administration of the policy and the related cost of administration of the insurance company,itself. They are more related to the cost like IT , operational, etc cost of continuing the policy. Fund management charges: These are the charges for buying and selling debt and equity. These are the charges are adjusted in NAV it self. Mortality charges: This covers the cost of providing life protection for the insured and may be paid once at the start of the policy for a recurrent manner for example this charges levied to provide the insurance cover under the plan . normally these charges are one year charges as per the age of the holder.

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Rider charges: Rider charges are similar in nature to the mortality charges as they are levied to pay for the other protection benefits that the policy holder has choosen for- like the critical illness benefit or the accident benefit,etc. Surrender charges: When the policy holder decides to surrender the policy or partially withdraw some of the units for cash , a surrender charge may be apply. Surrender charges are used to cover initial expenses that have been incurred by the company but not yet recovered from the policyholder yet. Bid offer charges: In ULIP specifically certain insurers might create a difference in the price at which they sell the unit and the price at which they buy the units. Investors contribution are used to buy units in the investment fund at the offer price and are sold when benefits are required at the bid price. The difference between the offer and bid prices Is known as the bid-offer spread", this is used to cover expenses when setting up the policy. Transactional specific charges: These charges are levied when the client does some specific transaction like changing funds, topping up the investment component or withdrawals .

Investment Option For Your Money

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Maximiser: If high growth is your priority, this is the plan for you. You can enjoy long-term capital appreciation from a portfolio that is invested primarily in equity and equity-related securities Protector: - If on the other hand, your priority is steady returns, you can opt for the protector Plan. Plan, you can accumulate a steady income at a low risk across a medium to long-term period from a portfolio, which is primarily invested in fixed income securities. Balancer:-If you prefer a balance of growth and steady returns, choose our balancer plan. This would ensure that your portfolio is invested in equity-linked securities, as well as in fixed income securities. Preserver: The objective of this plan is not ensuring capital protection by investing in very low risk investments like the cash and call money markets. However, the returns generated may also be on the lower side due to the investment pattern. At inception, investments up to 20% can be allocated to this fund. POTENTIAL RISK /REWARD

FUND TYPE

ASSET MIX Equity& Related securities:

Maxi miser

Max 100% Debt, Money market & Cash: Max 25% Debt. Money market & Cash:

High

Balancer

Min 60% Equity & Related securities: Max: 40% Debt Instruments,

Moderate

Protector

Money market & Cash: Max 100%: Debt Instruments: Max 50%

Low

Preserver

Money market & Cash: Min 50%

Capital preservation

43

COMPARISION OF ULIP WITH TRADITIONAL PLAN


Unit Linked Insurance Product: ULIPs have gained high acceptance due to attractive features they offer. These include: Flexibility o Flexibility to choose Sum Assured. o Flexibility to choose premium amount. o Option to change level of Premium /Sum Assured even after the plan has started. o Flexibility to change asset allocation by switching between funds Transparency o Charges in the plan & net amount invested are known to the customer o Convenience of tracking ones investment performance on a daily basis. Liquidity o Option to withdraw money after few years (comfort required in case of exigency) o Low minimum tenure. o Partial / Systematic withdrawal allowed Fund Options o A choice of funds (ranging from equity, debt, cash or a combination) o Option to choose your fund mix based on desired asset allocation
Traditional Plans :

These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: Steady Investment o Major chunk of investible funds are in debt instruments 44

o Steady and almost assured returns over the long term Features o Death benefit is Sum Assured + guaranteed & vested bonus o Helps in asset creation as they are for a long tenure o Premium to Sum Assured ratios are fixed for each plan and age. o Generally withdrawals are not allowed before maturity. Point of difference Investment Transparency in costs Flexibility in payment Assured Bonus Assured Sum on survival Option to increase investment/premium ULIP Market related (May be stock market or debt market) Yes Yes No No Yes Traditional Policy IRDA? Determined investments No No Yes Yes No

ULIPs better traditional policies Until a couple of years ago, when ULIPs were a rare commodity, nobody knew how life insurance companies charged policyholders for expenses. And nobody seemed to want to know either. Then came the ULIPs with good intentions to make policyholders aware of how much they would pay as expenses. But that move backfired. Policyholders were taken aback by the high amount of fees that ULIPs charged. While the charge structure on ULIPs is something that is open to debate, the issue is that ULIPs alone cannot be isolated. Traditional policies too charge high administrative and management expenses. In ULIPs, the first year charges range from 20-70%, one does not know how much traditional policies charge.

45

This can have a bearing on returns as well. A ULIP may charge you upfront but thereafter, all the returns on the fund are yours while a traditional policy may charge less but share a smaller portion of returns with you. So if you were substituting a traditional endowment with a ULIP, you would be better off with the latter since you would know your charges and your returns. We recommend traditional policies: Where the objective is only Risk cover and not savings and cost has to be minimum. We recommend Unit Linked products where: .

The intention is to provide security for a goal. The purpose is to make the savings grow at a better rate seeking the best solution.

It is a market linked investment where the premia paid is invested in funds Different options are available, like 100% Equity, Balanced, Debt, Liquid etc and according to the fund selected, the risks and returns vary. The costs are upfront and are transparent, the investment made is known to the investor (As he is the one who decides where his money should be invested). There is a greater flexibility in terms of premium payments ie. A premium holiday is possible. You can also invest surplus money by way of top ups which will increase your investment in the fund and thereby provide a push to returns as well. There is no assured Sum on survival, the higher of the Sum Assured or Fund Value is paid at the maturity or incase of death.

Financial planning and tax planning


All of us want to save for a rainy day. We want our money or investment to: (i) (ii) Give the best possible return and Be available to us when we require it. 46

Financial planning makes this possible. Financial planning is an attempt to maximize returns keeping in mind the liquidity and security of our investment. The three basic principles (guiding factors) of financial planning are: Setting realistic financial goals Starting investments early Thinking long term while allowing for short-term needs that may arise.

One can invest money only when one possesses it, which is possible by saving systematically. Selecting a good saving scheme can do this. Feature of a Good Saving Plan: (a) Safety (b) Flexibility (c) Should have incentive to save continuously without default. (d) Tax saving (e) Should fulfill financial objective even in case of death. Features of an ideal Investment Scheme: (a) Safety (b) Liquidity (c) Higher Yield (d) Capital growth (e) Tax saving Safety: refers to financial soundness of investment. Liquidity: means quickness with which an assets can be converted into cash whenever required.

47

Yield: is the amount of money that an investment is expected to earn. Capital growth: Any return, which is not taxable, will be preferred to those on which taxes have to be paid. A good investment is that which earns decent returns after providing for taxes and inflation. However, there is no single wonder investment, which can have all the above features. A prudent person should look for those investments, which offer the ideal solution to his personal needs under his own set of circumstances. High Returns and Best Returns; (i) These are not necessarily the same. (ii) High returns may be offset by risk to capital. (iii) Best returns should be determined by the advantage an investment offers. The Investors Approach: Investors approach can be conservative (safety is of utmost importance), enterprising (willing to take some risks) or speculative (willing to take high risk in order to gain high returns). The investors approach is related to a host of personal factors such as: a) Age and family b) Future responsibilities

Tax Benefits Under Life Insurance Policies


Qualifying premium amount: a) Premiums paid to effect or keep in force an insurance policy on the life of The assessee; or The spouse of the assessee; or Any child (minor or major) of the assessee.

b) Premiums paid to effect or keep in force a contract for a deferred annuity on the life of 48

The assessee; or The spouse of the assessee; or Any child (minor or major) of the assessee provided that such contract, does not contain a provision for exercise by the assured of an option to receive a cash payment in lieu of the annuity.

Tax relief for savings through life insurance An aggregate amount of savings including those paid towards life insurance premium up to Rs. 1 lakh not to be included in the income liable for tax. Premiums paid under an approved pension plan up to Rs. 10,000/- per year of various insurance companies are deductible from the total income up to a maximum Rs. 10,000/- under section 80 CCC. The amounts received as claims whether on maturity or death including the bonus, if any, are not taxable, being capital receipt under section 10(D)

What makes ULIP a total financial planning package?


Potential for Superior returns by switching between Equity & Debt. Liquidity and Flexible Insurance Cover. No Long Term Commitments. 100% Tax Free Returns on Withdrawals & Maturity.

49

Comparison of ULIP with other Investment Modules

OTHER INSTRUMENT

RATE OF TIME RETURN PERIOD

RISK

MIN. INVEST MENT

MAX INVEST MENT No limit 70000 No limit No limit

TAX FREE RETU RN No Yes Yes Yes

TAX BENE FIT Yes Yes Yes Yes

NSC PPF ELSS ULIP

8% 8% Market Return Market Return

6years 15years 3years 5years

No No Risky Risky Modu le No High

100 500 500 500

FD MUTUAL FUND

9.5% Market Return

5years Open Ended

10000 500

No limit No limit

No Capital gain @10% less than 1year Capital gain @10% for time less than year 1

Yes Only in ELSS

for time Funds

STOCK

Variable

No time frame

Very high

Variable

No limit

No

Life Time Super

50

It is necessary that we understand a few terms before look in to the various financial planning ways. Save: this is an activity that helps in the asset allocation. It has both a short term & long term perspective. Invest: this is an activity that focuses asset creation. It involves making money from money. Spend: this is the activity of using the money for our expenses.

SAVE

ASSET ACCUMUL ATION ASSET CREATIO N ASSET PROTECTI ON

INVEST

SPEND

How Life Time Super Provides Asset Pprotection, Asset Creation, Asset Accumulation

51

Flexible policy term: Decide for how long you want your policy. You can invest for a minimum of 10 years and a maximum of 75 years. 3 choices of premium payment: Opt to pay the premium on a monthly, bi-annual or an annual basis. 6 investment funds: Select among Flexi-Growth, Maximiser, Flexi-Balanced, Balancer, Protector, and Preserver, based on your financial goals and risk profile. Systematic withdrawal of money: Withdraw money in installments from the 4th year onwards. Maturity benefit: Receive the Fund Value when your policy matures. Choose to take this value as a single lump-sum amount or in monthly, bi-annual or annual installments. Death benefit: Your family receives the higher of Fund Value or Sum Assured should something happen to you. Switch benefit: Switch between funds anytime to adjust your portfolio, based on your goals and risk profiles. You can switch funds 4 times a year, at no cost. For subsequent switches, you will be required to pay a switch fee of Rs. 100 .

LIFE TIME SUPER at a glance


Minimum/Maximum Entry Age 0 years to 65 years

52

Maximum Age at Policy Maturity 75 years Minimum/Maximum Policy Term 10 years to 75 years Premium Payment Frequency Minimum Premium Minimum Sum Assured Monthly, half-yearly, yearly Rs. 24,000 per annum Annual Premium x Term/2. Subject to a minimum of Rs. 1,00,000
Premium paid for the policy and critical illness benefit

Tax Benefit (8)

rider will be eligible for tax benefit under Sec. 80C and 80D respectively. Any amount paid to you will be eligible for tax benefits under Sec. 10 (10D) as per I Tax laws.

Why life time super: As an individual who desires a lot from life-a car, a beautiful home and of course, the comfort and contentment of your family-you would undoubtedly want to plan your finances such that you can take care of all your requirements. Invest in ICICI Prudential's LifeTime Super policy-a regular-premium unit-linked policy, which offers potentially higher returns that systematically enable you to meet your long-term financial objectives. In addition, LifeTime Super also provides the protective benefit of an insurance cover, which keeps your family secure, always.

Comparision of lifetime super of icici pru with other companies.

Life Maker- Level Features


Premium Pay Frequency Death Benefit

Life Time Super


Regular Premium Higher of the Fund Value or Sum Assured, reduced by the applicable

Insurance Cover
Regular Premium Higher of Sum Assured or Fund Value

53

partial withdrawals Maturity Benefit Minimum Annual Premium Min Term Max Term Fund Value Rs 24,000 pa 10 years 75 years 6 Funds Flexi Growth , Flexi Balanced , Maxi miser, Balancer , Choice of Funds Top-ups Switches Protector, Preserver Not Allowed currently 4 switches free in a policy year. Min amt. Rs.2000 Allowed after completion of 3 policy Partial Withdrawals Special Conditions (if any) Surrender Values (At end of year 1) (At end of year 2) (At end of year 3) (At end of year 4) (At end of year 5) Riders Settlement Period Options Automatic Transfer Plan Boundary Conditions Min Age at Entry Max Age at Entry Max Age at maturity Min/Max Sum Assured Increase/Decrease in Annual Premium Increase/Decrease in Term Increase/Decrease in Sum Assured years. Min Amount is Rs.2000 None Nil Nil 98% 99% 100% ADBR,CIBR,WOPR Available. Upto a period of 5 years Available 0 65 75 Term/2*AP , subject to a min of Rs.1,00,000 Not Allowed Not Allowed Increase allowed Decrease not allowed Fund Value Rs. 15,000 /10 58 4 Funds : Secure Plan, Balanced Plan, Growth Plan, Conservative Fund Allowed 2 switches free in a policy year Allowed after completion of 3 policy years. Redirection of Premium Nil Nil Nil Nil Nil Personal Accident Benefit Rider, Dread Disease Rider Not Available Not Available 12 60 70 years Min Rs. 100,000 Increase allowed Not Allowed Not Allowed

Charges
Premium Allocation Charges Year 1 Year 2 Yr 3 onwards Life Time Super 18000-49999 : 20%, 50000 & above : 18% 7.5% 4% Life Maker Plan 0.75% 0.80% 1%

54

Fund Management Charges Flexi Growth / Maximiser - 2.25%, Flexi Balanced / Balancer - 2.25%, Protector- 1.5% & Preserver - 0.75% Policy Administration Charge No Charge Rs. 100 for subsequent switch over 4 Switching Charge Partial Withdrawal Charge switches in a policy year No charge Varies from 0.90 % to 1.25 % Rs 50 per month Rs. 100 for subsequent switch over 2 switches in a policy year 0.25 % of the amount A one-time charge payable at the inception Miscellaneous Charge None of the policy of Rs. 700

Reliance Market Features


Premium Pay Frequency Death Benefit Maturity Benefit Minimum Annual Premium Min term Max Term Investment Related: Regular Premium Higher of the Fund Value or Sum Assured, reduced by the applicable partial withdrawals Fund Value Rs 24,000 pa 10 75

Life Time Super

Return Plan
Regular and Single Premium Higher of the Fund Value or Sum Assured,\ which ever is the higher Fund Value Rs 10,000 for Regular & Rs. 25,000 for Single Prem. 5 40 4 Funds : Capital Secure,

6 Funds - Flexi Growth, Flexi Balanced, Choice of Funds Switches Maxi miser, Balancer, Protector, Preserver 4 switches free in a policy year. Min Switch Amt :RS 2000 Allowed after completion fo 3 policy years. Partial Withdrawals Special Conditions (If Any) Surrender Values (At end of year 3) (At end of year 4) (At end of year 5) Min Amount is Rs.2000 None 98% 99% 100%

Balanced Fund, Growth Fund, Equity Fund 1 switch free in a policy year 2 Partial wdrwl Allowed after completion of 3 policy years. Min Amt is Rs.10000 Redirection of Premium 100% 100% 100%

55

Accidental Death & Accidental Total and Permanent Disablement Riders Settlement Period Options Automatic Transfer Plan Boundary condition Min Age at Entry Max Age at Entry Max Age at maturity ADBR,CIBR,WOPR Available Up to a period of 5 years Available 0 65 75
Term/2*AP , subject to a min of Rs.1,00,000

Benefit Available Up to a period of 5 years Not Available 0 65 80


Min : For Single Premium -125% of SP, For Regular : Annualized Premium for 5 years or for half the Policy term

Min Sum Assured Increase/Decrease in Annual Premium Increase/Decrease in Term Increase/Decrease in Sum Assured Not Allowed Not Allowed Increase allowed Decrease not allowed

Not Allowed Not Allowed Increase allowed Decrease not allowed

Charges
Life Time Super Premium Allocation Charges 18000-49999 : 20%, Year 1 Year 2 Yr 3 onwards 50000 & above : 18% 7.5% 4% Flexi Growth / Maximiser - 2.25%, Flexi Balanced / Balancer - 2.25%, Fund Management Charges Policy Administration Charge Switching Charge Partial Withdrawal Charge Miscellaneous Charge Protector- 1.5% & Preserver 0.75% No Charge Rs. 100 for subsequent switch over 4 switches in a policy year No charge None For 5-9 term yr - 10%, 10-14 term yr- 15%, 15+ yrs - 20% 5% thereafter For Single Premium its 2% throughout Capital Secure - 1.50 % , Balanced Fund- 1.50%, Growth Fund - 1.75% , Equity Fund- 1.75 % Rs 40 per month Rs. 100 for subsequent switch over 4 switches in a policy year Rs 100 per withdrawl None Reliance Market Return Plan

56

CHAPTER 6 FINDING AND DATA ANALYSIS

57

Finding and data analysis


SAMPLE SIZE

RESPONDENT CATOGERY Service Man Business Man Shopkeeper Housewife Other TOTAL

NO. OF PEPOLE 28 33 17 8 14 100

Q1. Do you have any insurance policy?

OPENION YES NO

NO OF PEOPLE 87 13

58

NO OF PEOPLE

13%

YES NO

87%

Q2. Which companys policy you are having?

COMPANIES
LIC ICICI HDFC OTHER NON POLICY HOLDER

PEOPLE
61 8 7 11 13

59

PEOPLE

13% 11%

LIC ICICI HDFC OTHER NON POLICY HOLDER

7% 8%

61%

Q3.Why did you purchase insurance plan?

CATEGORIES FOR PROTECTION FOR SAVING FOR INVESTMENT FOR TAX SAVING

NO. OF PEPOLE 15 21 35 29 60

NO. OF PEPOLE

29%

15% FOR PROTECTION FOR SAVING 21% 35% FOR INVESTMENT FOR TAX SAVING

Q4. Are you satisfied with your Investment?

CATEGORIES SATISFIED UNSATISFIED NO POLICY HOLDER

NO. OF PEOPLE 56 31 13

61

NO. OF PEOPLE

13% SATISFIED UNSATISFIED 31% 56% NO POLICY HOLDER

Q5. Have you ever invested in ULIP?

62

CATEGORIES YES NO NO POLICY HOLDER

NO. OF PEPOLE 56 31 13

NO, OF PEOPLE

13%

YES NO 31% 56% NO POLICY HOLDER

Q6. If yes, then in which plan?

63

CATEGORIES SAVING PLAN PROTECTION PLAN PENSION PLAN CHILDS PLAN NO POLICY HOLDER

NO. OF PEPOLE 40 23 7 17 13

NO. OF PEOPLE

13% 17% 40% SAVING PLAN PROTECTION PLAN PENSION PLAN CHILD'S PLAN 7% 23% NO POLICY HOLDER

64

Q7. How much return you are expecting from your ULIP?

CATEGORIOES 15-25% 25-35% 35-45% MORE THAN 45% NON POLICY HOLDER

NO OF PEPOLE 20 21 19 27 13

65

NO OF PEPOLE

13%

20%

15-25% 25-35% 35-45%

27% 19%

21%

MORE THAN 45% NON POLICY HOLDER

Q8. Do you think ULIP is a risky investment?

CATEGORIES VERY RISKY MODERATE SAFE VERY SAFE NON POLICY HOLDER

NO.OF PEPOLE 13 18 36 20 13

66

NO. OF PEOPLE

13% 20%

13% 18%

VERY RISKY MODERATE SAFE VERY SAFE NO POLICY HOLDER

36%

Q9. Do you know about the life time super investment plan of ULIP?

CATEGORIES YES NO

NO.OF PEPOLE 59 41

67

NO.OF PEPOLE

41% YES NO 59%

Q10. Do you think life time super investment plan of ICICIPRU is better other plans?

CATEGORIES YES NO DONT KNOW

NO.OF PEPOLE 33 26 41

68

NO.OF PEPOLE

41%

33% YES NO DONT KNOW 26%

Q11. What are the reasons for investment in ULIP?

CATEGORIES LIFE PROTECTION INVESTMENT & SAVING FLEXIBILITY

NO.OF PEPOLE 31 29 11

69

TAX PLANNING NO POLICY HOLDER

16 13

NO. OF PEOPLE

13% 16%

31%

LIFE PROTECTION INVESTMENT & SAVING FLEXIBILITY TAX PLANNING

11%

29%

NO POLICY HOLDER

Q12. What steps do you suggested to the companies to make their ULIP plans more popular?

CATEGORIES

NO. OF PEPOLE

GIVE MORE ADVERTISEMENTS

36 70

ARRANGE MORE WORKSHOPS ARRANGE MORE SEMINARS REDUCE CHARGES CREATE AWARENESS THROUGH ADVISORS

13 14 21 16

NO. OF PEOPLE GIVE MORE ADVERTISEMENTS 16% 36% ARRANGE MORE WORKSHOPS ARRANGE MORE SEMINARS REDUCE CHARGES 14% 13% CREATE AWARENESS THROUGH ADVISORS

21%

FINDINGS

Now people mainly prefer ULIP for saving, then bank and then Post-Office and after that prefer P.P.F. and other. The main reason

71

behind the insurance plan or ULIP preference is switching facility or option to choose fund. protection. I also find that people mainly prefer L.I.C. as compare to private insurance company. In my survey, I also find that only 56% people are satisfied with current policy. It was also find out that only 59% people know about life time super plan of ICICI Prudential. About 56% people finds ULIP is a safe mode of investments. Mainly people prefer low growth safe return as compare to high growth some risky return. People mainly purchase life insurance policy for investment and then for tax-saving they give 2nd preference to

72

CHAPTER 7 RECOMMANDATIONS

RECOMMENDATIONS
1. Emphasis on advertisement: Company should emphasis on insurance plan advertisement, because at present company main focus on conventional product advertisement.

73

2. Increase in commission: Company should also change the commission structure of F.C., because in initial year commission is very high as compare to remaining year. So F.C. does not focus on remaining year and many policies lapsed. 3. Making ICICI more accessible: Here I mean that as 80% of the population of India is rural therefore ICICI must have there branches in important towns so it not only this will increase the awareness among people more over it will help the company to acquire local market and cater to their needs effectively. 4. There should be a product with similar features and low initial premium: A product like Life Time super is suitable for all but the initial premium which cannot be less than 20000 Rs. is on the higher side, therefore the company should derive a product with similar features but with low initial premium so that it is affordable to normal service class. 5. Administration charges should be low as in comparison with mutual funds, national saving certificate (N.S.C) etc.: The Company should lessen down the administration charges so that this product can have an edge over other investment modules like N.S.C, P.P.F etc. 6. Market surveys should be conducted regularly so that to know about customer demands and changing needs: The Company should know about the customers changing needs and demands by conducting market surveys which are helpful in innovating a product which suits the customers requirements. 7. There should be Training batches on weekends: It is advised that the company should have training batches for the already serving class on weekends, so that the willing candidates can opt it as a part time business opportunity.

74

CHAPTER 8 SUMMARY/CONCLUSION

CONCLUSION

In India, insurance is generally considered as a tax-saving device instead of its other implied long-term financial benefits. Indian people are prone to investing in properties 75

and gold followed by banks deposits. They selectively invest in shares also but the percentage is very small4.5%. Even to this day, Life insurance market has become more vibrant. Smashing all doubts over the decision to liberalize the industry, the overwhelming first year performance of the Indian insurance sector is test case of a massive success story of private players entering into the erstwhile state monopoly. The top three insurance companies-ICICI Prudential Life Insurance Company, HDFC Standard Life and Max New York Life- combined managed to sell over two lakh policies in a single year. ICICI Prudential, touted as the number one private life insurer, scored on all three fronts-with the maximum number of policies sold (1,00,000 policies), highest amount of premium collected (Rs. 2,700 crore).

76

CHAPTER 9 BIBLIOGRAPHY

BIBLIOGRAPHY
Printed Sources: 1. ICICI Prudential Life Insurance Company Unit Linked Product Guide. 77

Brochures: ICICI Prudential Life Insurance Company. Life Insurance Corporation Ltd. Birla Sunlife Life insurance Company HDFC Standard Life Insurance Company Om kotak Life Insurance Company Bajaj Allianz Life Insurance Company Publications: www.bimaonline.com www.google.com www.licindia.com www.iciciprulife.com www.birlasunlife.com

78

CHAPTER 10 ANNEXURE

QUESTIONNAIRE
Q1. Do you have any life insurance policy? Yes ( ) No ( ) 79

Q2. Which companys policy you are having? LIC NO POLICY ( ) ( ) ICICI PRUDENTIAL OTHER ( ) ( )

HDFC STANDARD ( )

Q3. What is the reason for purchasing life insurance policy? Protection Life cover ( ) ( ) Saving ( )

Tax saving ( )

Q4. Are you satisfied with your policy? Yes ( ) No ( )

Q5. Have you ever invested in ULIP? Yes ( ) No ( )

Q6. If yes, then in which plan? Saving plan ( ) Protection plan Childs plan ( ) ( )

Pension plan ( )

Q7. How much return do you expect from ULIP? 15 25 % 25 35 % 35 45 % More than 45% ( ) ( ) ( ) ( )

Q8.Do you think ULIP is a risky investment? 80

Very risky ( ) Moderate Safe ( ) ( )

Very safe ( )

Q9. Do you know about Life time Super plan of ICICI prudential? Yes ( ) No ( )

Q10. Do you think Life time super plan of ICICI pru is better than other plans? Yes ( ) No ( )

Q11. What are the reasons for investment in ulip? Life protection ( ) Investment and Savings ( Flexibility ( ) ) Tax planning ( )

Q12. What steps do you suggested to the companies to make their ULIP plans more popular? Give more advertisements. Arrange more work shops. Arrange more seminars Reduce charges Create awareness through advisors Others Q13. Personal Details NAME ------------------------81 ( ) ( ) ( ) ( ) ( )

..

AGE -----------------------------------QUALIFICATION OCCUPATION ADDRESS ------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------

82