A SUMMER TRAINING REPORT

ON

“FINANCIAL CONSULTANT TOWARDS BIRLA SUN LIFE

INSURACE”

AT

SUBMITTED BY:

Lokesh Kumar (8552585)

In partial fulfillment of the requirement for the award of degree of

BECHOLAR OF BUSINESS ADMINISTRATION

(2009-2011)

SHRI RAM COLLEGE MUZAFFARNAGAR

1
 PREFACE

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

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

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

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

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

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

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

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

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

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

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

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

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

satisfying customers is unlikely to reap any term benefits.

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

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

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

2
with skepticism. By contrast, continuous connection with customers can provide

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

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

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

gain a district competitive edge in the market place.

3
 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to Mr.Ankur gupta, branch officer of (BIRLA

SUN LIFE INSURANCE COMPANY LTD.), Muzaffarnagar for giving me an opportunity

to undergo this summer training in his esteemed organization.

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

LTD. Muzaffarnagar With out their support and guidance, this project could not be

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

me.

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

institute who guided me to fulfill my project.

4
 STUDENT DECLERATION

STUDENT DECLARATION

I here by declared that this summer training project entitled ‘A REPORT ON MARKET

POTENTIAL IN “LIFE INSURANCE SERVICES” in NCR region, (A CASE STUDY OF

BIRILA SUN LIFE INSURANCE COMPANY LTD.) Submitting for partial fulfillment of

the requirement for the degree of M.B.A. from U.P.TECHINICAL UNIVERSITY,

LUCKNOW is of my original work. This report is only for education purpose and not for

any other purpose.

FROM -

LOKESH KUMAR (8552585)

DATE B.B.A (Third year.)

5
 CONTENTS

PART-1

COMPANY HISTORY

COMPANY PROFILE

PRODUCTS OF BIRLA SUN LIFE COMPANY

PART-II

INTRODUCITON TO THE TOPIC

METHODOLOGY

OBJECTIVES

DATA ANALYSIS & INTERPRETATION

CONCLUSION

LIMITATION

RECOMMENDATION

BIBLIOGRAPHY & REFERANCE

6
7
8
 COMPANY HISTORY

BRIEF HISTORY OF UNIT- LINKED INSURANCE: The “unit linked life

insurance policy” as it is understood and practiced in the west was introduced in our

country only in 2000 when LIC brought in to the market a policy called “BIMA

PLUS”. As a data, expect two or three new companies all the companies are selling

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

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

also called “EQUITY LINKED POLICY” or “MARKET LINKED POLICY” to

indicate that the returns under these plans are linked to the market returns of the

equities or shares.

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

out the Unit linked life insurance (ULIP) in 1971,In 1989 LIC Mutual Fund

introduced the ‘DhanRaksha’ Plan identified to the ULIP. The term of the policy in

either 10 or 15 years. With the effect from 1-7-02 the target amount under these two

schemes has been introduced to Rs. 2 lakhs from Rs.75, 000.it works like this: from

the uniform contribution for each year (for example @Rs.20,000 for ten years) a

small portion is used to buy term death cover for Rs.2 lakhs and the balance is

invested in units and at the end of ten years the accumulations made in your account

is given as the maturity benefit along with a 5 or7.5% bonus. There is some

9
restriction in full death cover in the first two years. After two years the full death

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

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

several beneficial changes. In fact, these plans are considered to be the cheapest

insurance with good returns! As life insurance people are not making these plans,

they are not very popular in large numbers.

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

part of your premium amounts paid over a period of years is invested in equities

and other capital market instruments year after year, the return when it comes will

not be affected very much by inflation as it happens in a maturity value of the

policy in any average life insurance policy for the same period. Of course, the

insulation against inflation is the insulation against inflation is subject to the usual

investment risks and the investments performing reasonably well.

The idea of linking insurance benefits to the performance of units was first tried for

annuities. The annuity benefit was for a fixed number of units, the value of which

depended upon the market value of a portfolio of equity assets. The teachers

insurance and annuity association in USA first introduced this method in 1952 to

pay the annuities in collaboration with the college retirement equity fund. The

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

10
general public due to legal obstacles and funding problems till 1964. In 1959 the

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

securities and exchange commission (SEC) only in 1964 the SEC permitted

insurance companies to introduce such annuities.

Each groundwork for successfully operating unit-linked life insurance policies was

first made in Holland, Netherlands, Canada and UK.

However, life insurance contracts linking to the performance of units came only in

1976 in USA. The SEC ruled that life insurance contracts with an equity base

would be subject to the securities act of 1933-34 and investment company act 1940.

The agents selling such policies were also to take special licenses.

While it is called “Unit- linked life insurance policy” inUK it is called “Variable

insurance contracts” in USA. It is rightly called “variable” because both the

premiums and the benefits under the policy are ‘variable’ according to eh choice of

the policyholder. What is paid under the policies is the returns on the performance

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

of them are whole life plans.

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

differed investment feature. Your premium payment are spent on three things:

1) The cost of the life insurance;

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

from each premium payment and

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

two goes into the third. And the amount is probably a lot less than you would hope.

There are stringent regulations on selling these policies in other countries.

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

investment risk from the insurance company to the policy owner, these types of

policies are considered both insurance contracts and securities and are regulated by

both the securities &exchange commission and the state insurance commissioner.

An agent authorized to sell variable life insurance must be licensed by the state as

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

registered representative.

As a security, variable insurance products are regulated by the securities &exchange

commission, which brings out a new set of agent requirements dealing, primarily

with full and fair disclosure laws. For example, any sales presentation or illustration

12
must be preceded by or accompanied by a prospectus approved by the SEC. all

materials used in selling and the SEC must also approve promoting these product

prior to use.

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

the premiums collected under the policies. Also it is enough if the selling agent has

passed the basic IRDA insurance license examination. No special qualifications are

need by the agent and SEBI does not have any control over the designing of or

illustration prepared by the insurance companies in selling such policies.

BRIEF HISTORY OF BIRLA SUN LIFE INSURANCE COMPANY LTD.:

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

life insurance forayed into the life insurance and retirement planning business by

pioneering the unique unit-linked solutions in India. In just over 2 years of its

launch, the company has catapulted to second position in new business premium in

the highly competitive private life insurance industry based on its strategy of unit-

linked plans.

13
THE ADITYA BIRLA GROUP: “Aditya Birla”, a name that evokes all that is positive in

business and life. It typifies integrity, quality, performance, innovation, perfection

and above all, character.

In operation for over 50 years now, the Aditya Birla Group is one of India’s largest

business houses. A highly respected and admired group, rooted in performance

ethics based on value creation for its multiple stakeholders. The Aditya Birla

Group’s operations span over 40 units across 18 countries, anchored by a 72,000

strong committed workforce, a group turnover exceeding Rs.27, 000 crore, an asset

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

crore spread over 7 lac shareholders. Known for its rack solid fundamentals it

nurtures a culture where success does not come in the way of the need to keep

learning afresh to continue innovating and to carry on experimenting.

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

dominant position in all the sectors in which it operates. It is the world’s largest

producer of viscose staple fibre, largest single location aluminum plant and the

largest single location refiner of palm oil. What’s more, it is the second largest

producer of insulators and the fifth largest producer of carbon black in the world.

14
In India, the group is the single largest producer of viscose filament yarn,

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

recognition of being the market leader in the ready to wear branded apparel

segment with brands like Allen solly, Louis Phillip, van heusen and peter England.

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

most respected companies in India such as grasim industries limited, Hindalco

industries limited, Indian Aluminum Company limited, Indian Rayan Industries

Limited, Indo Gulf Corporation Limited. The Group has larged power relationship

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

The group fosters a culture that promotes excellence and rewards entrepreneurship.

It endeavors to make the workplace a source of creativity, innovation and self-

fulfillment for its employees. Nurturing a corporate culture imbedded with a high

level of commitment and a sense of shared destiny.

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

shareholders, employees and the society at large.

15
SUN LIFE FINANCIAL: Sun life financial is a leading international financial services

organization. With a history that dates back to 1871, Sun life financial has evolved from a

single mutual life insurance to one of the most highly rated insurance and wealth

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

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

that have marked all of the organization endeavors. Today the sun life financial group of

comp anise and the partners are represented globally in Canada, the United States, the

Philippines, Japan, Indonesia, India and Bermuda.

In March of 2000, Sun life financial services of Canada, inc, Sun life financier’s

parent company, listed its shares on stock markets in Toronto, New York, London,

and Philippines. This new access to shareholders equity provides Sun life financial

with even greater opportunities to grow around the world.

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

practical financial solutions to individuals and corporations:

 Life, Health and Disability

 Pension Funds and Plans

 Investment Management

 Annuities and Savings

 Trust, Brokerage and Banking

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

business, has excellent ratings with the world’s top ratings agencies. With assets

under management as on September 30, 2000 totaling more than CDN$345 billion,

it ranks amongst the largest international financial services organizations in the

world. Sun life financial enjoys independent rating that place us at the top of the

financial sector in North America.

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

to be amongst the top three private sector life insurance companies in India.

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

need based life insurance and retirement solutions to individual as well as

corporate. Well –trained professionals through a multi channel distribution network

and superior technology will make these solutions available.

Our endeavor will be to provide constant value addition to customers throughout

their relationship with us, within the regulatory framework. We will provide career

17
 development opportunities to our employees and the highest possible returns to our

shareholders.

OUR VALUES:

• INTEGRITY

• TRANSPERENCY

• CUSTOMER FOCUS

• EXCELLENCE

• INNOVATION

• MERITOCRACY

• RESPECT FOR THE INDIVIDUAL

OUR FEATURES: Our unit-linked flexi products are based on universal life

platform, catering to the customer’s twin needs of insurance and investment. Our

customers have appreciated these products, which have the beneficial features of

life insurance, mutual funds and banks. Some of these features are described below:

PROSPECTS FOR GROWTH WITH UNDERLYING GURANTEES:

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

18
 options, viz, protector (Representing a low risk portfolio), Builder (Medium risk

portfolio) or Enhancer (High risk portfolio) with guaranteed returns fund, at present

ranging from 3%-6%. The flexibility of changing the investment option initially

availed by them is also available.

1. GUARANTEES PROVIDE SAFETY NET: The policyholders enjoy the upside

returns provided by the portfolios in all the investment options. As on 31st

December 2002, the annualized returns since inception under protector, builder and

enhancer options were 9.75%, 11.12% and 14.74% respectively, which is above the

minimum level guaranteed.

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

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

year) irrespective of the mode. Traditional products available in the market do not

offer such a facility.

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

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

unpaid. The continuity of risk is ensured with the help of monthly recovery of cost

of insurance and automatic premium advance facility. A policy can lapse if and

only if the policy fund pertaining to the individual policy becomes negative.

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4. RISK COVER DOES NOT DECRESE DURING THE TERM OF THE

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

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

benefit is sacrosanct and and remains uniform throughout the tenure of the policy.

In case of death, the face amount as well as the policy fund representing the saving

portion in the premium is payable.

5. ACCELERATED PAYMENT OF PREMIUM POSSIBLE: Depending on one’s

financial situation a shorter premium-paying period can be selected, with the

advantage of greater accumulation resulting into higher

death/surrender/withdrawals/ maturity benefits.

6. LIQUIDITY ON TAP: Traditionally, insurance products have been know to be

illiquid. Policy loans are at a cost and surrenders defeat the very purpose of

insurance. In such an environment, the facility of withdrawals without affecting the

risk cover is one of our unique features.

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

policies where the policy holders have to suffer a financial loss on surrender of their

policies, our products do not provide any surrender charge after the first four years.

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 8. CUSTOMERS CAN SEE THEIR MONEY PERFORM: Our policyholders are

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

investment performance of the various options is published every quarter and the

policyholders receive a yearly statement reflecting the status of the policy fund.

9. OTHER BENEFITS:

a. Lower premium for female customers

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

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

our ‘Flexi life line’ with the facility of limited premium payments and

withdrawals thereafter, becomes a veritable pension plan with attendant tax

benefits.

d. Detailed illustration at the point of sale

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22
ORGANISATION STRUCTURE: two guides Biral sun life insurance business

operations if its core values, namely integrity and transparency. BSLI complies with a

all regulations governing the life insurance business. A high degree of transparency is

followed in al the business practiced and procedures and all employees are governed by

an internal code of conduct.

BSLI abides by the corporate governance framework in accordance with the Kumar

Managalam Birla committee as applicable to the life insurance business, as well as the

provisions of the insurance act, 1938, the companies act, 1956 and the IRDA

regulations.

The various committees overseeing the business are:

BOARD OF DIRECTORS

• Mr. Donald Stewart- chairman

• Mr. Kumar Mangalam Birla

• Mr. Gary M. Come ford

• Mr. Douglas C. Hence

• Mr. S.K. Mitra

• Mr. B.N.Purankmalka

• Hish Highless Maharaja G.Singh

23
• Mr. S.N. Talwar

• Mr. G.P. Gupta

AUDIT COMMITEE

• Mr. B.N. Puranmalka

• Mr. S.K. Mitra

• Mr. D.C. Henck

• Mr. G.M. Cmerford

INVESTMENT COMMITEE

• Mr. S.k. mitra

• Mr. B.N. Puranmalka

• Mr. P.J. Akers

• Mrs.K.Gupta

• Mr. A. Fenn

• Mr. N.B. Javeri

24
• Mr. S.Shah

EXECUTIVE COMMITTEE

• Mr. G.M. Comeford

• Mr. D.C. Heck

• Mr. S.K.Mitra

• Mr. B.N. Puranmalka

Apart from the above committees overseeing the business operation, the CEO and CGO

certify the audited accounts of the company and company secretary submits a

compliance certificate.

25
 THE BSLI MANAGEMENT TEAM

Mr. Nani Javeri

(CEO)

Mr. Peter Akers

(CFO and appointed actuary)

Mr. E.N.Goveia Mr.

P.Nandagopal

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

Channel and group life)

Anjana Grewal Jaskirat Kaur Snehal Shah

K.S.Gopalkirshnan

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

26
 Mr. K.H. Venkatachalam (chief manager-human

resource)

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

BRIEF PROFILE OF SEVICES OF ORGANISATION:

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

of life insurance and investment, together. A unique combination of security from

life insurance and returns from investment. Introduced in line with the latest global

27
 trends, the unit- linked plans put you in total control of your money. They are

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

overall returns on the premium.

Birla sun life insurance provides individual as well as group life insurance solutions

aimed at the corporate sector.

INDIVIDUAL LIFE PLANS: Birla sun life insurance offers number of individual life

plans, which can be given below-

FLEXI SECURELIFE RETIREMENT PLAN: This is a unit-linked retirement plan to

give you efficient returns in the long term so as to build a sufficiently large corpus of

savings on retirement. The planes built in tow phases: the accumulation phases and annuity

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

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

risk appetite. What’s more it offers a guaranteed minimum return of 3% on your premium

(deposit) amount net of all charges and deductions in this phase. In the annuity phase the

plan gives 2 options to choose from.

FLEXI LIFE LINE PLAN: This plan offers a life insurance cover till the age of 100 years

thus providing you with a lifetime of security. It is an investment for your future in which

28
you accumulate large savings through the benefits of compounding. The plan gives you the

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

during your working years while the plan continues for a lifetime.

FLEXI SAVE PLUS ENDOWMENT P LAN: It is a flexible life insurance plan, which

offers the dual benefit of a life insurance cover as well as large tax-free savings in the long

term. The plan is taken for a specified period and the benefits are payable in the events of

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

coupled with the benefits of compounding can lead to very efficient returns in the long

term.

FLEXI CAH FLOW MONEY BACK PLAN: It is a flexible life insurance plan, which

offers a life insurance cover and gives lump sum payment at periodic intervals. These

periodic payments intervals. These periodic payments help you meet your various financial

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

plan also offers you the option of not withdrawing the lump sum amounts and continuing it

in the plan to take advantage of the benefits of compounding.

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

very low costs for a specified term. It is a low premium, pure risk coverage plan,

29
 which takes care of one’s financial commitments toward his/her depending should

anything unfortunate happen to line policyholder.

1.4.1 BIRLA SUN LIFE PREMIUM BACK TERM PLAN: The plan offers you a life

insurance cover for a specified term. Unlike other term plans this plan refunds the

entire amount of premium that you pay over a period of time. There are two options

of maturity benefits to choose from and what is m ore it is a low cost life insurance

plan.

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

which can be, described below-

1.4.2 GROUP GRATUITY SOLUTIONS: It works for your future group gratuity

addresses the need of prudent financial management for a progressive corporate

house. The unique benefit being it provides market-linked returns that present an

opportunity for capital appreciation in the long term. Besides when the fund yields

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

1.4.3 GROUP SUPERANNUATION PLAN: Retire in comfort- Birla sun life insurance

offers group superannuating plan as a retirement solution for employees. The plan

has benefits that empower both the employer and employee. The contribution is

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 invested in unit-linked funds yielding market-linked returns to meet your future

needs efficiently. Additionally original / principal contribution is guaranteed against

market fluctuation.

1.4.4 GROUP PROTECTION PLAN: Birla sun life insurance provides group

protection plan for a homogenous group. Under this plan, life insurance cover is

provided at an affordable cost. Renewed every year, it helps fulfill the insurance

needs of employees as well as provide financial security to their families. In the

event of death of the member, the beneficiary (family) of the member gets the

benefit. The plan has 6 additional riders and two options.

31
 PLANS AT A GLANCE

FLEXI SAVE PLUS FLEXI CASH FLOW FLEXI LIFE LINE

ENDOWMENT PLAN MONEY BACK PLAN PLAN

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

MINIUM FACE Rs.50, 000 for minors Rs.50, 000 for minors and Rs.50, 000 for

AMOUNT and Rs75, 000 for adults Rs75, 000 for adults minors and Rs75,

000 for adults

DURATION OF THE As per policy term-5, As per policy term-5, As per policy term-

PLAN 10,15,20,25,or 30 years 10,15,20,25,or 30 years or 5, 10,15,20,25,or

or as per maturity age-15, as per maturity age-15, 30 years or as per

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

minors and 60,65,70,80 minors and 60,65,70,80 20,25,30,35 years

years for adults years for adults for minors and

60,65,70,80 years

for adults
PREMIUM PAYING Single pay 5,10,15,20 Single pay 5,10,15,20 Single pay

PERIOD years or over the duration years or over the duration 5,10,15,20 years or

of the plan of the plan over the duration of

the plan
MATURITY BENEFITS Policy fund Policy fund Policy fund
AMOUNT DUE TO Face amount+policy fund Face amount+policy fund Face

32
NOMINEE IN EVENT amount+policy

OF DEATH OF THE fund

LIFE INSURED
FREELOOK PERIOD 15 days from the date on 15 days from the date on 15 days from the

which you receive the which you receive the date on which you

policy document policy document receive the policy

document
TAX BENEFITS** Under sec 88 and sec Under sec 88 and sec Under sec 88 and

10(10D) of the income 10(10D) of the income tax sec 10(10D) of the

tax act 1961 act 1961 income tax act

1961
RIDERS • Accidental death and • Accidental death and • Accidental death

dismemberment dismemberment benefit and

benefit rider Rider dismemberment

• Term rider • Term rider benefit rider

• Critical illness rider • Critical illness rider • Term rider

• Critical illness plus • Critical illness plus • Critical illness

rider Rider rider

• Waiver of premium • Waiver of premium • Critical illness

rider rider plus

Rider

• Waiver of

33
 premium

Rider

UNIQUE FEATURES • Minimum guaranteed returns of 3% p.a. on your premium net of all

policy fees of all policy fees and charges. The entire upside in the

performance of the fund is passed on to you.

• Three investment fund options: protector, builder and enhancer with

option to switch between funds any time after the first policy year.

• Options to make tax-free withdrawals you have additional savings.

• Vary the face amount of policy depending on your changing needs for

life insurance during your lifetime.

• Surrender your policy without penalty anytime after 4 policy years.

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

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

insurance has crossed several milestones of excellence.

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

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

fastest growing life insurance markets in the world.

34
 The company is a p pioneer in introducing unique product features like a ‘free

look period’ and best sales practices such as the use of “sales illustrations”. The

regulator has now introduced the ‘free look period’ as an industry norm. The

mandatory use of a sales illustration within BSLI set up a standard of

transparency in the industry.

 A high persistency ratio of 95.46% by premium.

 BSLI has consistently recorded the highest average sum assured of Rs.3, 26,000

and average premium of Rs.19,500 per policy in the industry with a unit-linked

product range.

 A very efficient utilization of capital.

 Low claims ratio of 0.06% of total policies.

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

life insurance companies.

35
1.6 GROWTH OF BIRALA SUN LIFE IN UNIT-LINKED LIFE INSURANCE:

Another successful financial year came to an end. The company reported an

annualized new business income of Rs.478 crore during the year 2003-04 an increase

of 222% over the premium income lat year. The company of the year-end had an

agency force of around 10,250 agents, and 89 ban assurance & corporate partners.

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

company has launched two new groups and one individual fund.

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

year 2004 was not very exciting for the market except for a huge supply of PSU

IPOs. In March 2004, the markets have been choppy and combined with the

upcoming elections. This has caused some amount of investor uncertainty. After a

continuous rise between may 2003 and January 2004, the quarter saw a correction in

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

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

large supply of IPOs by PSUs, which met with a good response. The fundamentals

remained good and foreign institutional investors (FIIS) continued buying even

though the markets declined. The GDP growth numbers has also been encouraging at

10.4% in October – December 2003 quarter.

36
 The interest rates remained range bound in the quarter with some amount of

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

The rupee strengthened further to close the quarter at 43.60/ US $ against Rs.45.61 at

the end of December quarter and Rs.47.50 a year ago. Forex reserves have crossed $

110 bn in March 2004 on the back of strong growth in FDI and FII inflows.

We will continue to invest in diversified and quality portfolio with a long-term view.

Returns on unit-linked individual life funds.

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

PARTICULARS RETURN ON ANNUALISED LAST I YEAR

INVESTMENT RETURN (%)

(SINCE INCEPTION) % (SINCE INCEPTION)%

PROCTER 39.20 12.95 20.62
BUILDER 51.11 16.88 28.33
ENHANCER 70.98 23.45 38.56

37
 Returns on unit –linked pension funds:

PARTICULARS RETURN ON INVESTMENT ANNUALISED RETURN LAST I YEAR

(SINCE INCEPTION)% (SINCE INCEPTION)% (%)

NOURISH 13.94 13.21 13.30
GROWTH 15.54 14.97 14.90
ENCRICH 18.78 17.80 18.10

38
1.7 PROBLEMS IN ORGANISATION:

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

It is clear that BIRLA SUN LIFE INSURANCE COMPANY is a unit- linked

insurance, which are basically involved in the life insurance solutions. There are

number of problem which are as follows-

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

organization like a life insurance solutions.

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

people.

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

branches of the BRILA SUN LIFE INSURANCE SOLUTION.

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

advisors.

39
1.0 DISTRIBUTION NETWORK

BIRLA SUN LIFE INSURANCE COMPANY LTD, distribution strategy is aimed at

creating a national presence through a scaleable model, which would achieve

convenience, accessibility and quality service for the customers.

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

mortar branches on a standardizes template, across the country selling life insurance

though trained career agents called ‘insurance advisor’. The team of agency managers

and advisors are geared for productivity enhancement national presence in

44branches and 9development centers.

2.2 LTERNATE CHANNELS: The experience in various countries for selling life

insurance through banks, corporate agents, brokers, call center, Internet and these

distribution alternatives will be pursed by the organization from the inception stage.

While in India there was no precedent for selling life insurance though these alternate

modes, a philosophy of piloting and stabilizing the model was adopted.

The successful business models for banassurance, corporate agency, brokerage,

affinity group and direct marketing are being consolidated. use of the call center and

40
 the internet will continue to be part of the direct marketing initiatives .with a winning

multi-channel distribution system in place ,BSLI alternate channels are frontrunners

in bancassurance business, in partnership with Citibank ,Deutsche bank,Bankof

Rajasthan,BankMuscat,Catholic Syrian Bank, Development credit bank and IDBI

Bank.

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

developed though dedicated relationship managers. The business focus is on the

Aditya birla group companies and the top corporate in India.

Through this channel, the company has established relationships with more than 100

blue chips corporate across the country by providing group protection and group

retirement solution. The company has achieved leadership position in-group business

in private life insurance position in providing fund management services for the

group retirement plans.

2.4 DISTRIBUTION IN TUNE WITH TECHNOLOGY: Technology plays the crucial

role, when distribution spans across more than 50 locations .the IT strategy revolves

around selecting and implementing critical business applications to support

contemporary products like universal life and aligning process to provide world-class

customer services. The systems are web enabled and equipped to provide consistent

41
 information across all touch points (branches, callcenters website etc.). A high quality

wide area network (WAN) was set up to interconnect all branches and the

headquarters at mumbai.

2.5 TRANNING TO SUPPORT DISTRIBUTION: In keeping with support throughout

the country. Birla sun life insurance’s mission of providing life insurance solutions

though “well trained” professionals, our tanning team has geared up to meet the

challenge. We have a team of qualified professionals to provide the crucial support

throughout the country.

42
6.0 PRICING POLICY OF THE COMPANY:

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

an annual policy statement on every policy anniversary to keep you completely

informed on the performance of our various funds based on the unit price will be

available on our website.

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

free method of paying premiums through an electronic debit to your bank account.

INVESTMENT FUND PORTFOLIO:

UPPER LIMIT OF PROTECTOR BUILDER ENHANCER

%ASSETS IN:
Government and 85% 70% 55%

government approved

securities
Rated corporate bonds (AA 30% 30% 30%

and above)
Money market and other 20% 20% 20%

liquid assets
Infrastructure sectors as 25% 25% 25%

defined by the IRDA

Listed equities 10% 20% 35%

43
44
6.3 FEES AND CHARGES: The policy loading fee* is an up-front charge and varies as

per the premium payment mode and the policy year as given under:

PAY PERIOD
POLICY SINGLE 5-PAY 10-PAY 15-PAY OR

YEAR GREATER
1 3% 29.9% 54.6% 65%
2 N/A 5.0% 7.5% 7.5%
3 N/A 5.0% 7.5% 7.5%
4+ N/A 5.0% 5.0% 5.0%

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

6.5

45
CHARGES:

6.5.1. Charges towards the cost of insurance will be deducted by

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

insurance charges per thousand-face amount for sample ages for healthy lives are as

follows:

Sex/age (yrs) 20 30 40 50 60

Female 0.90 1.16 1.66 4.03 10.66

Male 1.02 1.17 2.15 5.53 13.73

6.5.2. An investment management free not exceeding 1.5% p.a. of

the fund will be charged by adjustment of daily unit prices. Currently this fee is 1%

p.a.

6.5.3 The following administration fees will be deducted by canceling units on a

monthly basis.

(a) Rs. 22 per month

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

first 10 years of the policy expect in the second year where it will be Rs. 15.24 per

46
 thousand face amount. From the 11th year onwards this annual charge will

increase subject to a maximum of 3.75%per year.

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

based on the equivalent monthly rider premium payable over the entire coverage

benefit period. If rider deductions are not guaranteed, then the minimum policy

values of your policy might be affected due to any change in the rates of the rider

coverage.

6.6 FUND SWITICHING CHARGES:

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

free.

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

levied.

6.7 SURRENDER CHARGES: The surrender charges is levied in the first four

years and varies based on the year in which the policy is surrender. During the

first 24 months of the policy, the charge will be an amount equal to the annulled

premium payable for this policy .for the purpose of surrender charge only,

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

paying period is equal to the coverage benefit period. In the 25th month, the

47
 surrender charge is 24 percent of the annualized premium. The surrender charge

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

any time after the 49th month, the surrender charge is zero.

6.8 WITHDRAWAL CHARGES:

• In a year tow withdrawals are free of charge

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

AN ILLUSTRATION, WHICH IS SHOWING THE PRICING POLICY OF THE

COMPANY:

THIS PRESENTATION IS PREPARED FOR: Mrs.Nisha Singh

Name of life insured: Mrs.Nisha Singh

Date of birth 01/07/1964/ female

Coverage type Face amount coverage annual

(Rs.) benefit coverage

period premium

(Years) (Rs.)

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

48
Accidental Death &

Dismemberment rider 90,000 25 151.20

Policy premium 4,714.80

Due and payable Quarterly

The premium and associated benefits are described in the product brochures

and the following illustration. The details provided in the following

illustration would enable you to see how your p premium is being used. If

you need help to interpret please contact your insurance advisor or call Birla

sun life insurance Company’s toll free number, which is 1600227000.

Some benefits are guaranteed and some benefits are variable with returns

based on the future performance of your insure carrying on life insurance

business. If your policy offers variable returns then the policy fund values

table will show two different rates of assumed future investment returns.

These rates return are not guaranteed and they are not upper or lower limits

of what you might get back, as the value of your policy is dependent on a

number of factors including future investment performance. The guaranteed

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

mentioned later are fulfilled.

49
This illustration ignores the impact of the provisions of the income tax act,

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

rebate for premiums paid towards an insurance policy. The tax exemption

for the benefits paid under a life insurance policy is governed be section

10(10D) of the I income tax act, 1961. Both these sections may be applicable

to this policy .you may consult a qualified tax advisor for specific tax advice

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

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

will withhold taxes from the benefits payable under this policy. We also

reserve the right to recover from you levies such as service tax levied by the

authorities on insurance transactions.

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

The premium and all values shown are for the life insurance coverage and do

not include riders. The rider benefit amount will be payable, wherever

applicable in case of happening of the events as mentioned in the rider

brochure in consideration of the payment of additional premium/charges.

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

50
(1) Premiums are paid in full when due,

(2) No withdrawals are made,

(3) No outstanding policy loans exit,

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

the policy,

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

premiums or charges are not recovered from the policy fund,

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

and

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

“policy fees and charges”. The premium mentioned in this illustration

does not include top-up premium or any underwriting extras.

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

owner is the sum of:

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

(2) Non-guaranteed policy fund

Less any amounts owed to the company.

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

51
With drawls can be made from the holding account, which comprised the

non-guaranteed policy fund.

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

(1) Life insurance coverage face amount, and

(2) Policy fund

Less any amounts owed to the company

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

commencement of the policy anniversary, on or immediately following the

age when the life insured reaches one year, only the policy fund shall be

payable.

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

performance of the investment fund supporting the policy .an investment by

you in any of the investment funds I s subject to market and other risks, the

value of the investment fund can go up or down depending on the factors and

forces affecting financial markets. Other than explicit guarantees provided

by the company, there can be no assurance that the objectives of any

investment fund will be achieved.

52
 FEES AND CHARGES: The policy loading fee* is an up-front charge and

varies as per the premium payment mode and the policy year as given under:

PAY PERIOD
POLICY SINGLE 5- 10- 15-PAY OR

YEAR PAY PAY GREATER

1 3% 29.9 54.6 65%

% %
2 N/A 5.0% 7.5% 7.5%
3 N/A 5.0% 7.5% 7.5%
4+ N/A 5.0% 5.0% 5.0%

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

charges will be recovered from the policy fund.

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

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

annual insurance charges per thousand of the life insurance coverage face

amount for sample ages for healthy lives are as follows:

Sex/age 20 30 40 50 60

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

53
2) An investment management fee not exceeding 1.5 percent per annum of the

investment fund will be charged by adjustment of the daily unit prices.

Currently this fee is 1 percent per annum.

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

by canceling units on a monthly basis, as follows:

a) Rs. 22 per month; and

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

amount will be deducted in the first 10 years of the policy expect in the

second policy year when it will be Rs. 15.24 per thousand of the life insurance

coverage face amount. From the 11th year onwards this annual charge (Rs.

2.88 per thousand of the life insurance coverage face amount) increases at an

annualized rate of a maximum of 3.75%, every year.

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

During the first 24 months of the policy, the charges will be an amount equal

to the annaslised premium payable for this p policy. For the purpose of

surrender charges only, annualized premium is defined, as the amount that is

payable if the coverage playing period is equal to the coverage benefit period.

In the 25th month, the surrender charge is 24 percent of the annuallised

54
 premium. The surrender charge percent reduces by one for every month

thereafter. If the policy is surrendered at any time after the 49th, the

surrender charge is zero

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

net return of 3 percent per annum, which constitutes the guaranteed fund.

Any returns earned by the policy fund in excess of the guarantied fund

constitute non-guaranteed fund.

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

product broacher.

Acronyms used:

TPD- Total And Permanent Disability,

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

Death/TPD –Death or And Permanent Disability,

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

55
56
57
 INTRODUCTION TO THE TOPIC

This project has been a great learning experience for me; at the same time it gave me

enough scope to implement my analytical ability. This project as a whole can be divided

into two parts:

The first part gives an insight about the mutual funds and its various aspects. It is purely

based on whatever I learned at Birla Sun Life Mutual Fund. One can have a brief

knowledge about mutual funds and all its basics through the project. Other than that the

real servings come when one moves ahead. Some of the most interesting questions

regarding mutual funds have been covered. Some of them are: why has it become one of

the largest financial intermediaries? How investors do chose between funds? Most popular

stocks among fund managers, most lucrative sectors for fund managers, a special report on

Systematic Investment Plan, does fund performance persists and the topping of all the

servings in the form of portfolio analysis tool and its application.

All the topics have been covered in a very systematic way. The language has been kept

simple so that even a layman could understand. All the data have been well analyzed with

the help of charts and graphs.

58
The second part consists of data and their analysis, collected through a survey done on 200

people. It covers the topic” need of financial advisors for mutual fund investors”. The data

collected has been well organized and presented. Hope the research findings and

conclusions will be of use. It has also covered why people don’t want to go for financial

advisors? The advisors can take further steps to approach more and more people and

indulge them for taking their advices.

59
60
 RESEARCH METHODOLOGY

For defining research methodology there are three basic types of methods for

marketing research. They are as follows:

a) The observation method.

b) The experimental method.

c) The survey method inclusive of panel method.

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

by observing the person the analysis makes the inventory as to product used by him

at his hoe or kept as retailers stocks.

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

useful to indicate the expectation of large-scale experiment.

The survey method information is gathered directly from individuals in three ways;

1) Telephone

2) Mail

3) Personal interview

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

organized by-

61
1) In factual survey

2) Interpretative survey

3) Opinion survey

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

by questionnaire technique in the personal interview by questionnaire.

Technique I usually gathered information by face to face interviewing.

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

advertisement to give his personal opinion and attitude.

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

collect the reliable information from them.

62
 RESEARCH PROCESS

DEFINING RESEARCH
PROBLEM

INTENSIVE LITREATURE
SURVEY
FEED BACK

RESEARCH DESIGN

COLLECTION OF DATA

SAMPLING PLAN: Sampling plan of this project report basically related to the

number of points which

ANALYSIS OF are given below-
DATA

The universe studied prospectors in the areas of N.C.R. mainly Delhi,

Ghaziabad, Noida & Gurgoan.

The sampling unit is a single prospector outlet, which may be any types.
RECOMMENDATION AND
REPORT WRITING
Elements: potential prospector.

The geographical limit is the area of N.C.R.

63
Keeply the number of prospector in mind the sample size arrived at was

200.

The sampling method followed was judgmental sampling.

64
6.1 TIME SCHEDULE:

TOTAL DURATION 17 JULY TO 20 AUGUST

PREPATION FOR DATA COLLECTION 17 JULY TO 12 AUGUST
DATA COLLECTION 21 JULY TO 15 AUGUST
DATA CALIFFICATION AND PREPARATION 16 JULY TO 21 AUGUST

OF REPORT

65
DATA COLLECTION METHOD

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

insurance solution in NCR region”, has been collected data from the two method-

(A) PRIMARY SOURCE

(B) SECONDARY SOURCE

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

personal interview.

QUESTIONNAIRE METHOD: Through the questionnaire method number of

question asked by the different people from the different region mainly DELHI,

GHAZIABAD, NOIDA, GURGON by me. My questionnaire method is a open

ended method in which questions asked by me has a limited number. The main

purpose of this questionnaire is find out the view of the people that they take

insurance advisor’s advice or not. In which they like to investment their savings.

The format of questionnaire of this company is given next page-

66
Survey method: This project report is also suffered by the survey method for

collecting the relevant information, so that marketing executive will be success for

making marketing strategy according to that survey.

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

type of market in which insurance advisors may be prospecting and selling should

he enter the life insurance business.

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

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

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

business of selling life insurance, you will learn proven ways to meet new people

and expand these markets.

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

not, do not make the need for life insurance a requirement for adding their names.

Do not list names by any predetermined selection rating. Simply list the first 100

names of those who come to your mind most readily.

67
 (Sampling page)

Sources Of Names Source Letter

A. School / college friends Persistency source

B. Family friends
C. Neighbours

NAMES SUBMITTED
D. Through Spouse

E. Through children

F. Through Hobbies / Spot

G. Previous employment
> 1 Lakh
> 1 Lakh but < 2.5 Lakhs
> 2.5 Lakhs but < 5 Lakhs
YEARLY INCOME > 5 Lakhs

(In Rupees)
18 – 25 YEARS
26 – 35 YEARS

35 – 44 YEARS
AGE
OVER 45 YEARS
OCCUPATION Professional / proprietor
Manager / Executive
MARITAL STATUS Single
Married
ABILLITY TO Good

PROVIDE REFERALS Fair

68
 INTERVIEW: This project report is also affected by the interview method. The data is

also collected through the interview. Under this method we go through the –

 Telephone interview

 Mail interview

 Personal interview

Under the telephone interview is used when the information to be collected limited. This

method is suitable for inquiry about information just released or telecast by radio or

television.

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

is no interviewer in mail surveys to ask questions and record answers. It cannot be used to

conduct an unstructured study.

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

very relevant and it is also very difficult task to collect the information. And takes much

time.

OBSERVATION METHOD: This project report is also suffered by the observation

method. Because some time it is also happened when the number of people was not ready

to give the relevant information used this techniques to collect the information.

69
 This observation is used when the research problem has been formulated precisely

and the researcher is told to observe the area of sturdy. The researchers are asked to

record their observations.

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

secondary data. Under this source data is collected through the magazine, through the web

site, through the newspaper, through the other insurance organization.

70
71
 OBJECTIVES

5.0 OBJECTIVE OF THE STUDY:

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

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

advisors advise for their investment or not. If not indicate the people for their life

insurance and tells them why life insurance is necessary for every persons. There

are some reason which indicates why life insurance is necessary for every person

given below-

5.1 MARKETING OBJECTIVE:

The main marketing objective of this project report for the company is find out

marketing position of the life insurance and makes the present and future market

strategy of the company.

5.2 RESEARCH OBJECTIVE:

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

that money (where is goes) than

2. Determining the person short and long term priorities

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

habits or enable him to achieve his goals.

72
73
 DATA ANALYSIS & INTERPRETATION

From the above questionnaire, we found number of findings and according to them

we can do analysis that which type of strategy should be adopted for improving the

earnings of the company given below-

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

YES NO
PEOPLE (IN %) 64% 36%

74
70%
60%
50% PEOPLE (IN % )

40%
30%
20%
10%
0%
YES NO

75
QUESTION NO.2- How many people take help of professional advisor for their

investment?

YES NO
PEOPLE (IN %) 35% 65%

70%
60%
50%
40% YES
30% NO

20%
10%
0%
YES NO

76
QUESTION NO. 3- Number of people save regularly for-

SAVING ALTERNATIVS PEOPLE IN %

RETIREMENT 15%
CHILDREN’S EDUCATION 25%
CHILDREN’S MARRIGE 40%
TAXATION 15%
OTHERS 5%

40%
35% RETIREMENT
30%
CHILDREN’S
25%
EDUCATION
20% CHILDREN’S
MARRIGE
15%
TAXATION
10%
5% OTHERS

0%
PEOPLE IN %

77
QUESTION NO. 4 – How many people save through insurance?

YES NO
PEOPLE (IN %) 35% 65%

78
100%

80%

60%
PEOPLE (IN %)
40%

20%

0%
YES NO

79
QUESTION 5.Which feature of the mutual funds allure you most?

Diversification 42
Professional management 29
Reduction in risk and transaction cost 34
Helps in achieving long term goal 30

80
6. According to you which is the most suitable stage to invest in mutual

funds?

Young unmarried stage 55

Young Married with children stage 32
Married with older children stage 21

Pre retirement stage 27

7. Are you availing the services of personal financial advisors?

81
 Yes 87
No 48

8. Which expertise of the personal financial advisor is

demanded most?

82
Portfolio review & investment 43

recommendation
Planning to achieve specific financial 35

goals
Managing assets in retirement 30
Access to specialists in areas such as tax 27

planning

9.

What is the major reason for using financial advisors?

Want help with asset allocation 42

Don’t have enough time to make 23

own decision

83
To explain various investment 37

options
Want to have surety about financial 33

goals

10. What is the major reason for not using financial advisor?

Have access to all resources needed 18

Believe advisors are too expensive 53
Unsure how to find a trustworthy 21

advisor
Want to be in control of own 43

84
investments

SWOT ANALYSIS:

SWOT analysis of this company is given below-

7.1 STRENGTHS: Strength of this company is given below-

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

on daily or bi-weekly basis through the daily- declared NAV/ Unit prices and also

through the website of the company. At any given time you will k now the

accumulations under your policy due to the investment accruals.

85
7.1.2 Normally any time after one to three years time depending upon the scheme, you

can chose to withdraw your money by partial or complete surrender of units. The

death benefit will be proportionately reduced.

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

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

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

small fee according to your changing needs.

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

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

7.1.8 In fact some companies allow you to have the contract as long as you want without

a fixed term, even up to death.

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

companies give a guaranteed bonus as a percentage of the sum assured as bonus

7.1.10 The normal riders such as accident benefit, disability benefit critical illness or major

surgical assistance covers are also available.

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

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

benefit specifically covering some gynecological illnesses.

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

usual yearly, half-yearly or quarterly mode.

86
7.1.14 Some companies offer even “premium holiday option”. If after paying premiums

for three years you are not able to pay the premium, the policy will be continued

adjusting the overdue premiums from your unit fund.

7.2 WEAKNESS: Weakness of this company is given below-

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

considerably shrink the amount that goes towards your investment corpus.

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

withdrawals.

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

and he has to be ever vigilant.

87
 7.3 OPPORTUNITIES: Opportunities of this company is given below-

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

investment in an ordinary mutual fund should also be given the same benefit, as

they are basically same except for the addition of insurance element in the unit-

linked policy.

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

as per the current tax laws.

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

stocks are taxed as capital gains with the indexation benefit, according to the

current tax laws. Only the dividends are tax-free.

7.4 THREATS: Threats of this company is given below-

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

of competitors of this company.

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

environment means change in government, change in government policy, change

is competitor’s policy.

88
89
 CONCLUSION

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

producers. But, when sold to a wrong prospect or brought a wrong agent it will

become useless. IRDA and the companies should take care that well- trained and

professional agents market these product.

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

their risk appetite should select a known, well- informed agent who is reliable.

Agents who are already dealing with investment or saving instrument or mutual

funds, if they sell life insurance also would be a good choice. In case they hence

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

corporate agent with a background in financial instruments or still better, to a good

broker who are likely to be better equipped than an ordinary agent. Continued

advice and guidance will be available with the corporate agent and the broker as

they are corporate entities.

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 LIMITATION

 Time limitation.

 Research has been done only at Rajkot.

 Some of the persons were not so responsive.

 Possibility of error in data collection.

Possibility of error in analysis of data due to small sample size.

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 RECOMMENDATION

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

company are given below-

9.1 Company should recruit well-informed, well-qualified, well-financial knowledge. So

that he will success to satisfy the potential customer for their investment or savings.

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

governed by the principle of unerimma fides but one of caveat emptor. Under the

principle of utmost good faith, the company expects the proposes to give all the

material facts so that it can charge the “correct premium” based on the factors of

risk presented.

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

policyholder. They should educate the agent.

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

factors that determine how good their returns will be and the risks involved and

then figure out if they have the risk appetite, whether they can get better returns on

their investment elsewhere and whether their investment horizon matches the long

lock-ins over which these plans offer the best rewards.

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

performance of the fund but the past performance of the fund is never an indicator

of how the fund might perform in the future.

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

time. This can be useful if you want to plan your investment based on your life

needs.

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 BIBLIOGRAPHY

B00KS- C.R.KOTHARI, PHILIP KOTLER.

MAGAZINE- INSURANCE WATCH, INDIA TODAY, BUSINESS

TODAY, BUSINESS WORLD.

NEWS PAPER- THE TIMES OF NEW INDIA, HINDUSTAN

TIMES, ECONOMICS TIMES, BUSINESS --

STANDARD.

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

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