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No Objection Movement

Facing objections made easy!

Objection Handling Manual


(Compilation of Solution Capsules)

By Product Development Department

With thanks to all the great minds from various departments, who helped us coin the right solutions, for their time, patience and expertise.

Solution Capsules
1. Why should I take a Health Plan? I am not getting any returns there. 2. I trust LIC more than any other company as it has seen 50 years. 3. Market is highly volatile right now! 4. I incurred loss on my previous policy. 5. I do not need Life Insurance.

Objection Index

6. Bank gives Guaranteed returns at 10%. 7. Why should I take a Health Plan, when I can get Health Riders with ULIPs? 8. There is no liquidity in Insurance.

No Objection Movement

9. Bonus Rate is less than LIC, then why should I buy traditional plan from you? 10. What is the surety that your company will exist for next 15-20 years? 11. I am already over insured. 12. Regulators are not effective. Look at SEBI and RBI. 13. I do not have any dependants. 14. I am covered at work.

By Product Development 2010

15. Mutual Fund + Term Plan is better than ULIPs. 16. I have loans on me. I cannot afford to buy insurance. 17. Fixed Deposit is a better option considering current market scenario. 18. 10(10D) may be removed/ altered by Government tomorrow. What if it not there at the time of policy maturity? 19. I have adequate money. 20. Not interested to take this policy now. Will buy later. 21. I dont have money. 22. BALIC is a private company. 23. Why to purchase Immediate Annuity when the rate of return is lower than Fixed Deposits? 24. Fund growth rates are lower than other companies. 25. Guaranteed returns are low in traditional plan. 26. What is the surety that Guaranteed Investment Return (GIR) in Invest Plus will not go below 7%? is

Solution Capsule
A. Health Plans are for protection against eventualities and not for return
Do you ask for return of Doctor's fee after you get well? If your objective is Health Coverage, you should go for a health plan. Financial assistance in respect of health eventualities is better than looking at returns. Your best return is your peace of mind. Health plan is like an invisible shield which lasts in case of medical emergency. You need a plan to cover you against sudden expense on account of medical emergencies. If you insist, I can give you two plans 1) Health 2) Any other investment plan. It will suffice both your needs.

Objection

B. Costs are rising, you need to make provisions today


Health related costs are rising. Doctors/ Hospitalisation/ medication - costs of all are exorbitant. Do you want doctors and hospitals to take away a substantial part of your savings? Health plans have an advantage to protect you against soaring medical costs in future. Benefits are higher than costs in a Health plan. Health expenses are Unknown and Unexpected, don't make them Unaffordable. C. Health Insurance is Wealth Insurance You should take a health plan because you need it and not because your money needed a health plan to grow. Health eventualities in future may drain away all your money even if you get good returns. Health Insurance ensures that your saving/ investment tools continue to give you returns without depleting them. Absence of Health plan can upset your financial planning and regular saving in case of any medical eventuality. Its better to use the returns of your investments/ savings plans constructively rather than paying for medical emergencies. Health insurance is like a vaccine, it is always best to prevent yourself against any eventuality. D. Health Plans are customized to give you more benefits Health Plans reward you for claim free years. Pre-hospitalization and post-hospitalization expenses are also covered. With TPA (Third Party Administrator) you get help to manage your emergency. Offers you Cashless facility. No immediate cash needed. Tax Benefit. E. Health Plans aim at providing maximum protection at lowest costs Have you saved enough to cover your family against any health eventuality? If not, you need a Health plan. If Health Plans are designed to give you returns then they will be expensive (High premium). Pay small, get Big, protect your health, and increase your wealth. F. Health Plans help you to get quality Health service Treatment in best hospitals by the expert doctors. Cost of Quality health service cannot be met just with your earnings/ savings.

1
Why should I take a Health Plan? I am not getting any returns there.

No Objection Movement

By Product Development

March 3, 2009

Solution Capsule
A. Our presence in the industry is more than that of LIC
LIC is there for 50 years because private insurers were not allowed before. Allianz has an astronomically high Assets Under Management spanning more than 70 nations. Bajaj on the other hand is a common household name in India. If vintage is the deciding factor then we have a vintage of more than 110 years. Experience of LIC = 50 years+, experience of Allianz = 110 years+. Do you have a telephone connection where the service provider is more than 50 years old? Do you have a bank account in a private bank which is more than 50 years old? BALIC (like any other private players) enjoys a place of pride in the industry as LIC. It is only a false perception that LIC being old is the only bankable company.

Objection

2
I trust LIC more than any other company as it has seen 50 years.

B. Every one knows Bajaj Allianz as a Brand


Bajaj and Allianz both are highly trustworthy and renowned companies. Our presence is spread PAN India. We cater to wide segment of people. Our number of branches itself proves that we are here to stay and not run away.

C. Bajaj Allianz is regulated by IRDA


IRDA has made it compulsory for all insurers to have a start up capital base of 100 crore. Statutory requirement of the regulator (IRDA) is to maintain a 150% solvency margin for the policyholders good. The regulation ensures an even playing field for us as well as LIC. Why 80C/80D benefits are given on policies of private insurer too, if they were not been under proper regulation of Indian Laws?

D. We provide good customer services


We launched Unit Linked plans way before LIC did. BALIC is unleashing its penchant for customer centric approach and it is evident in the much improved service quality and customer centric products.

No Objection Movement

E. Evolution is the need of the hour


Customer previously had only 1 choice, now they have many. You should have choice in front of you to judge the best from the better. Do you buy lantern instead of Bulb? Options are numerous but choice is yours. The way we have graduated from a black and white TV to a colour TV, we need to look beyond for greener pastures. Even being only few years old in Life Insurance industry, we have rolled out, some of the best investment options in the industry.

F. We are trustworthy By Product Development


Perception is the deciding factor here. Being new in Life Insurance industry makes us all the more responsible and cautious towards our action. You should see the number of customers who have trusted us with their money in our hands. Many of our policyholders are LICs existing policyholders. They have bought plans from us because they have seen value in it. Lakhs of customers in 8+ years bears a testimony that BALIC as a brand commands enormous trust and credibility. Our Assets Under Management are Rs. 23,136 crore as on June 30th 2009. Government does not lose control over the sectors which are privatized. They have their specialized regulatory bodies TRAI for Telecom, RBI for Banks, similarly IRDA for insurance.

August 04, 2009

Solution Capsule
A. Think long term
Markets in the short run are like an election. In the long run, they are a test of weight. You can lose an election due to mood swings but cannot lose a test of weight if you have it. Thinking long-term is the key to manage your investments. In shorter term, you will always see that value fluctuates. Volatility of the market is a matter of concern for people going short-term, while it is an opportunity for people investing long-term. In long-term, all the investment avenues give positive returns be it real estate, gold or insurance. Ups and Downs are a way of market functioning. This is the best time to invest over a long-term. Remember that declines are natural. Time can be a great risk reducer. Think long-term.

Objection

3
Market is highly volatile right now!

B. Use volatility to your advantage - Volatility is a blessing in disguise


A declining market is a reason for celebration for an investor and not a concern. A flat market does not give you gains. Ideally it is best to invest when NAVs are low and reap good growth in future years. When your objective is long-term and markets are volatile, rupee cost averaging works better. ULIPs provide you investment strategies which can help you use volatility to your advantage.

C. Invest NOW !
Make the best out of this phase. Invest more so that your money may multiply as the market goes upwards. These are rare times when you get maximum number of units from premium paid. Just like it is better to buy a house now when the prices are low so that you can enjoy the appreciation. By investing now, you can fund for your post-retirement income and the corpus for your child that you always dreamt of. Rather than looking at markets, it is better to look at the company or the plan you are buying. It is this which matters most. Our product portfolio offers you investment opportunities which are not volatile. Make the best out of this opportunity. Buy today and get more units.

No Objection Movement

D. Keep investing and Stay invested


Every time you think of investing, the market will be either too high or at lower levels. This is the trap you always fall into. The best way is to start today and invest regularly. Time tested formula to beat volatility is to invest regularly and stay invested.

By Product Development

E. Evaluate your objective


You buy ULIPs to meet your long-term financial objectives. Short-term view of the market is thus irrelevant. Volatility is not the correct measure for investment decision. You should rather consider your i) Financial objectives ii) Risk taking ability. ULIPs help you in diversifying your portfolio thus reducing your risk. ULIPs give you flexibilities to act according to market situation. ULIPs are less risky than investing in market itself. If you are risk adverse, buy our traditional plan. They give an assured sum at maturity. In bad economic scenarios, your family needs more protection and income security. Ensure both with insurance.

March 17, 2009

Solution Capsule
A. One bad experience should not lead to conclusions for lifetime
Have you stopped investing in Fixed Deposits, even when the interest rates have fallen? Have you stopped buying a vehicle, because your last vehicle depreciated early?

B. Insurance plans are a long-term financial vehicle


A run rate of 2 in 2nd over does not mean that at the end of the match, the team is going to score only 100 runs in 50 over match. Right now your policy may look like a loss to you but since it is a long-term plan, your fund will grow gradually to give you good returns by the time of maturity. An early foreclosure would generally attract penalties. If you sow a plant today, you cant expect fruits from it immediately tomorrow. It takes time for them to grow. Patience pays in investment. Do you expect your child to become a doctor at the age of 6? The final judgment of loss and profits should only be concluded at the time of maturity. Loss is something which is not recoverable. You might have suffered a set back which is temporary in nature. This temporary set back is only on your saving component. Your protection remains intact which is more valuable for you and your family.

Objection

4
I incurred loss on my previous policy.

C. Dont compare Insurance with other investment avenues


There is no substitute of Insurance. It is incorrect to judge profit or loss by comparing insurance with other investment options. Insurance protects you from losses which are irreparable and irreversible in nature such as premature death, disability and disease.

D. What was the investment objective you had in your mind?


Insurance doesnt aim at getting you profits. Were you looking at short-term capital appreciation or long-term asset creation? Judge the plan with respect to the benefits you have like life cover, riders, tax benefits, etc. The objective of insurance is to provide financial support in case of adversities. Insurance gets you peace of mind.

No Objection Movement

E. Take advantage of market volatility with ULIPs


Markets have gone down and bounced back in the past. The fund performance over a period of time generally shows an upward trend despite a number of intermediate dips. ULIP is a perfect financial vehicle to take the advantage of market volatility. Tools like Wheel-Of-Life can help you overcome this volatility in preserving your capital appreciation.

F. ULIPs provide various fund management options By Product Development


We have multiple investment strategies which helps you manage your funds in the changing market dynamics and shift you towards secured investments near your policys maturity. ULIPs have multiple fund options with different asset classes like equity, debt and money market. You can choose a fund on the basis of your risk appetite. Most ULIPs provide Settlement Option that will help you defer your maturity date thereby avoiding exit at unattractive levels of equity market. Switching option can be exercised to minimize your loss. You also get loyalty units with a number of ULIPs that boost FV in future.

March 24, 2009

G. You can go for insurance plans with ASSURED RETURNS


Traditional plans provide you guaranteed/ assured returns. Compounded Reversionary Bonus can enhance your proceeds.

Solution Capsule
A. Why do you feel you dont need Life Insurance ?
Am I sure, that no unfortunate event like death/ disability/ critical illness will ever occur to me? Am I also sure that I will wake up tomorrow morning? Am I sure that my family will have the same kind of lifestyle in my absence? Can we afford to remain irresponsible towards our family? Do you insure your vehicle? Why? Do you value yourself lesser than your vehicle for which you have an insurance policy? Have you ever calculated your Human Life Value? Your cost of Not living. Living without insurance is like Gambling Have you come across any financial expert who has advised NOT TO BUY Life Insurance? No one can say no to Life Insurance. Either you pay for it now, or your family pays for it. Life Insurance is no more a choice it is a need.

Objection

5
I do not need Life Insurance.

B. There is no substitute to Life Insurance


Life Insurance is like a coconut tree useful dead or alive! Life Insurance helps you create an estate by way of forced savings. Life Insurance today has dual advantage Insurance + Investment. Name an instrument available in the market which will give you the assured amount whether you are there or not there? It is a time tested vehicle for wealth creation. Life Insurance policies can be mortgaged and it can help you create Encumbrance free estate. Your portfolio should ideally contain some long-term financial tools. Life Insurance is one such time tested tool. Life Insurance forms the base of your financial portfolio because it is also a Risk Mitigation Tool. Insurance is a tax efficient vehicle. Your premiums give you tax benefits and policy benefits are tax-free.

No Objection Movement

C. Life Insurance is a risk transfer mechanism


Life Insurance and investments are two different things. It is a mistake to judge insurance only from the point of view of investment. Insurance is the only vehicle that takes care of negative sides of life. Life is full of uncertainties. Life Insurance takes care of certain uncertainties. Life Insurance provides variety of risk coverage options like illness, accident and premature death. Absence of Insurance will compel you to spend your lifetime savings in case of contingency. You need to review your liabilities every couple of years and buy insurance accordingly to cover them. People ask What I get in return from Insurance? I say You get peace of mind.

By Product Development

D. Life Insurance ensures economic freedom March 31, 2009


Life Insurance will take care of your family when you are not there and it will take care of you when nobody is there! We will still want our child to go to the same school even if we are not there. Would you like your family to sell your house or gold to meet day-to-day expenses? Insurance helps keeping you and your family free of any liabilities.

Solution Capsule
A. Guarantee comes at a cost
Guarantee caps your return potential. Guarantee affects liquidity of the asset. Guarantee limits you to take benefit from different asset classes. Guarantee gives you satisfaction only at the point of investment. When you get your money back, you may realize that others have gained by investing in products without guarantee. If investment decisions are based on Guarantee only, then everyone would have invested in Fixed Deposits only. When you work hard for money, your money should work harder for you. Why settle for less? No Risk No Gain.

Objection

6
Bank gives Guaranteed returns at 10%.

B. Banks guarantee returns for a short period of time


Can you fulfill your long-term needs like childs education and pension with Fixed Deposits? Rate of interest of Banks are applicable for short-term financial planning. For long-term financial planning, FD is not a convenient vehicle as at the time of maturity you may not get same rate of interest to re-invest. One need to ear-mark funds for long-term and short-term needs. For long-term needs, the instrument should be less liquid Insurance is the only option.

C. Banks are not substitute of Insurance


Comparing Banks and Insurance is not an apple-to-apple comparison as objectives of both these instruments are different. If your objective is to get protection + returns, then bank may not be able to help you. For this objective, you should go to an Insurance Specialist. How do you take care of a GUARANTEED CERTAINITY DEATH? Insurance will take care of this certainty from very first year. Riders can be attached to Insurance plans to give you additional protection/ health coverage. LIFE has an IF in it. What IF one is not there tomorrow? Who will guarantee the return tomorrow? ULIPS offer additional flexibilities fund switching, partial withdrawals, surrender, top-ups, etc. You need to invest a lump-sum for a Fixed Deposit. Insurance is a vehicle of systematic saving and long-term growth. Its like paying EMIs Easily Manageable Installments.

No Objection Movement
By Product Development

D. Insurance is an efficient Tax-Planning Tool


Insurance gives you tax benefit both at entry and exit. Bank Fixed Deposits will not provide for tax free returns under section 10(10D). In Insurance, as per current laws, your premiums are exempted u/s 80 C and 80 D and maturity/death benefit are exempted u/s 10(10D).

E. Insurance is a Wealth Management Tool


Traditional Insurance plans also provide guarantee in form of Sum Assured/ Guaranteed Additions. Insurance is an easily manageable estate. Insurance taken under Married Womens Property Act can help you create encumbrance free estate i.e. no court can confiscate the proceeds of your insurance plan. Insurance helps you create a forced saving.

April 7, 2009

Solution Capsule
A. Health Plans are for TOTAL peace of mind
Health Plans provide you with cashless facility while Health Riders dont. Health Plans cover the actual expenses incurred, while Riders would give you a specified amount only as claim. Health Plans provides you with a network of hospitals ensuring quality Health Care for you. Health Plans cover you at older ages compared to Health Riders.

Objection

With the soaring medical costs, a Health Rider only will not suffice.

7
Why should I take a Health Plan, when I can get Health Riders with ULIPs?

B. Health Plans offer more flexibilities


In Health Plans, you have the option to buy a better plan at renewals or can exercise option to shift from one insurance company to another. Health Plans allow you to increase/ decrease your Sum Assured, depending on your prevailing needs. They provide you the flexibility of matching increasing cost of medical expenses by way of increasing the Sum Assured. Health Plans rewards you for claim free years. Health Plan offers you to include new family members or exclude family members.

C. Health Riders cannot be a substitute for Health plan


Health Plans are designed to fulfill health coverage need in totality. Health Riders are less expensive as they are aimed at only providing you a limited enhanced coverage. Health Plans cover the cost of medication. Health Plans are capable of covering you in multiple health eventualities. It is always better to have a stand-alone Health Plan in your portfolio. Availability of a Health Rider taken with saving/ investment plan is subject to the condition of your plan being in force. Health Plans when taken for the entire family, gets you a discount on the premium payable.

No Objection Movement

D. Health Plans are for comprehensive Health cover By Product Development


If your objective is comprehensive Health cover, then you should go for a health Plan. Health Plan not only covers you but also can cover your dependents (Family Floater) while Riders cannot be opted for the entire family (floater). Health Plans provides you for: i) Hospitalization cover ii) Pre/ post hospitalization expenses iii) Ambulance expenses iv) Day care procedure

April 14, 2009

Solution Capsule
A. Liquidity of Insurance weakens your protection and economic value
What do you value more - protecting yourself and your family or option of liquidity? Liquidity does not ensure good returns. Insurance provides you targeted amount for specific events in life like marriage, education, retirement, etc. Insurance is aimed to preserve your economic value even in your absence. You are so concerned about liquidity to meet contingencies of your day-to-day life. Think about the money one will require in case of an eventuality in future. Insurance is meant for compensating the financial loss due to death, disease and disability. Do you ask for liquidity while insuring your vehicle?

Objection

8
There is no liquidity in Insurance.

B. Insurance is a long-term investment vehicle


With insurance plan, you get an opportunity to invest in various asset classes and get a life cover too. Insurance helps you in diversification of portfolio. Insurance is a forced saving. Insurance plans are taken to fulfill the desired long-term objectives. If your objective is to save for future, then issue of liquidity should not bother you so early. Does Public Provident Fund/Employee Provident Fund have absolute liquidity? No, because they are for long-term benefits for your retirement. Sow now and reap later is the basis of insurance where growth is gradual but effective.

No Objection Movement

C. Liquidity may result in NO ASSETS


Have you ever met someone who has become rich with all liquid assets in his portfolio? Liquidity is a biggest hindrance in asset creation. Asking for liquidity comes at the cost of your Capital appreciation. If you have cash readily available, you will find several reasons to spend. Excess liquidity makes you extravagant. Be cautious and careful while deciding the proportion of liquid assets. Liquidity will not help you beat inflation. The spirit of insurance is diluted by providing liquidity. Insurance is sharing of risks. If all the people look towards liquidity, there would be no pool left to share risks from. High liquidity gives you low yield and low liquidity provides you high returns. Insurance focuses on creating an asset and not liquidating an asset.

By Product Development

April 28, 2009

D. Some of the Insurance plan also provide scope for liquidity


In ULIPs, you can exercise the option to surrender or partially withdraw your funds to meet immediate requirements. If you need money at specific intervals, you can go for a money-back plan. Your insurance policy can be pledged as collateral for a loan.

Solution Capsule
A. Bonus is a non-guaranteed component of a plan
Are you looking at current Bonus Rates or average Bonus Rate as bonuses declared every year are different? Bonus Rate may fluctuate. Bonus declared 5 years back may not be given today. Higher Bonus Rate may not necessarily mean higher maturity benefit.

B. Simple Reversionary Bonus (SRB) v/s Compounded Reversionary Bonus (CRB)

Objection

9
Bonus Rate is less than LIC, then why should I buy traditional plan from you?

Most of LICs plans give SRB like Jeevan Anand, Jeevan Dhara but all of the BALIC plans give CRB so it will not be an apple to apple comparison. In CRB platform less % of bonus = Higher % of bonus in SRB. BALIC gives CRB. So your money increases exponentially with the passage of time. CRB gives you Bonus on Bonus. Rather than looking at todays benefit, look at long term benefit that a BALIC traditional plan can fetch you with CRB. If unfortunately you have to surrender your plan or use it as collateral, you will find that the surrender value of our plan would be good because of CRB.

C. Objective of the traditional plan


What is it that you want from your plan a) Protection or you want b) Returns? The primary objective of buying a plan is higher coverage. Bonus cannot be the only point of comparison to buy. I would suggest you to look at a) Price of purchasing security b) Flexibility offered c) Scope of coverage. Insurance is meant for more than only returns. If only Bonus Rate is the criteria for selecting Life Insurance plan, you will end up buying a wrong plan.

D. Look at the wider picture


Buy a plan which is a perfect mix of protection and saving instead of just buying a plan which has declared a certain rate of bonus in past. You dont go to a restaurant just because prices are less there. Ambience, service, cleanliness, food all contributes to your decision. Same way all the attributes put together make BALIC the best company to buy traditional plan from. Look at the comprehensive cover and not stand-alone benefits.

No Objection Movement

E. Better Features
We have a more innovative and comprehensive product basket. Our product portfolio caters to all your requirements. FIB is a unique rider that we provide you with, which no one else provides. Limited premium payment option. Our High Sum Assured Rebate is one of the best in the industry. Expertise of Allianz is 120 years old in industry. Being highly transparent, we have our Benefit Illustration on website, LIC doesnt have. We also have our product brochures available on website but LICs are not available on their website. We charge reasonably and give adequately.

By Product Development

May 5, 2009

F. Customer orientation
For a good investment product experience, you should buy BALICs product. Our customer service is one of the best in the industry.

Solution Capsule
A. Stringent regulations to protect interest of policyholders
Regulatory framework ensures that players in the market remain healthy. IRDA keeps an eye on operations of insurance companies and guide, counsel and direct them. Regulations are formulated in such a manner that insurance companies stay afloat under any circumstances. Insurers are required to have a start-up capital of Rs. 100 crores. Insurers are required to maintain 150% of solvency margin which is monitored by IRDA. IRDA periodically verifies valuation records of all the insurance companies. Investments of policyholders money by an insurer are also guided by IRDA. An Appointed Actuary ensures that the companys actions fulfill the requirements as approved by IRDA. The regulatory framework is evolving and every step taken ensures sustainence of existing players. If you look at present financial scenario, government across the world have intervened to keep insurance and banking companies healthy and sound, it is because they are the backbone of the economy.

Objection

10
What is the surety that your company will exist for next 15 - 20 years?

B. Role of Ombudsman
Ombudsman act as protection for the policyholders. Ombudsman ensures that policy level grievances are well attended.

C. Bajaj Allianz - Brand value


Only companies with proven financial track record come into insurance industry. Bajaj and Allianz, both have track record of long-term market presence in any venture. Allianz is one of the world's largest asset managers, with third-party assets of 703 billion euros under management at year end 2008. Bajajs business philosophy is to ensure excellent insurance and investment solutions by offering customised products, supported by the best technology. Bajaj is very sensitive to Corporate Social Responsibility activities. No company will be socially-oriented, if they are not meant for short-term. BALIC has a large number of branches. We are one of the trustworthy brands in the industry. We are based on trust of lakhs of customers.

No Objection Movement
By Product Development

D. Insurance is a growing industry


Insurance is a sunrise industry. Private Insurance industry in India has tested positive for Growth steroid. The same can be reinforced from the fact that there are 21 private life insurers in the market where there were only 11 in the year 2001-02.

E. Insurance is a long-term business


Insurance is a long-term business. Shareholders put in their money not for short-term business. While modeling for future years, insurance company takes into consideration the remote of the remotest possible eventuality that might take place. Insurance companies are difficult to make and yet more difficult to sink as they put a lot of assets to cover the liability they underwrite. Insurance companies have a long developmental phase and a result; they are bound to stay for long.

May 12, 2009

Solution Capsule
A. Are you really over insured?
Have you calculated your Human Life Value? Your very idea of being over insured may be misleading. Human Life Value shows immediate financial needs of dependents in case of untimely death of a person. Your life cover should be equal to your Human Life Value. Is your present life insurance policy enough to take care of your present liabilities? If no, then you are not over insured. Keep re-evaluating your life insurance need to make up the mismatch between the present earnings and future liabilities. While deciding on your level of insurance make sure you are provisioning for 1) Standard of Living 2) Inflation 3) Income. Have you made enough provision so that your family continues to maintain the same lifestyle even if you are not there? The only thing constant in this world is change. With changing life pattern, your insurance needs will also change. Most of the insurance plans that people buy, generally mature at 50/60 years of age. However, insurance coverage is required even at advanced ages. The problem is that today you think you have enough provision and tomorrow you repent, that you should have done more.

Objection

11
I am already over insured.

B. Life Insurance provides you host of other benefits


Life Insurance is a tax saving tool. The maturity is also tax free. Life Insurance helps you save to fulfill the future financial goals. Life Insurance can be used as a vehicle for post retirement planning. Life Insurance policies can be mortgaged to secure loans. Life Insurance help you mitigate the risk of surviving too long. It helps you in taking care of your post-retirement years. Annuity plans provide you regular income as long as you survive. Life Insurance is an effective mechanism to match your future cost of living without sacrificing your present life style. Life Insurance products like ULIPs provide scope for additional investments without increasing the life cover. It is also a very good instrument for passing inheritance. Life Insurance policies help you create Encumbrance Free Estate i.e. it cannot be claimed by any creditor or under any legal suit. Apart from Insurance, our plans also offer excellent scope for financial management and wealth creation. Some of our ULIPs are designed in such a way that only in initial years you have to pay the cost of insurance because in later years, they operate with your fund value only.

No Objection Movement

By Product Development

C. Life Insurance provides you host of additional coverages May 19, 2009
Reinforce your health coverage through health plans. Critical Illness rider provides extra coverage against specific critical diseases. Fortify your coverage with additional accidental protection.

Solution Capsule
A. Role of IRDA
Functions to protect the interest of policyholders. Monitoring insurer and doing audit is one of the primary functions of IRDA, so that customers interest is met and IRDA guidelines are adhered to. Regulator is autonomous. It exercises control over insurance companies at every level - Operation - Formation - Valuation - Reporting. IRDA controls not only the Insurer but also its distributors (agents, training and licensing are regulated).

Objection

B. Actions taken by IRDA


Just as when a teacher scolds you, it doesnt mean he is angry at you. It means he aims to improve you. IRDA does just that. IRDA recently made it mandatory to circulate the Ombudsman address to be given along with the policy document. IRDA discontinued products of many insurance companies ensuring customer centricity. Less transparent products have undergone modifications. (IRDA has made insurance companies amend launched products for transparency.) Regulator has modified solvency reports frequency from yearly to quarterly. This ensures a close monitoring of the insurers performance. IRDA has been successful in sensitizing and educating insurer and public at large on correct selling and buying of insurance products. IRDA ensures that we maintain a solvency margin which is one of the most stringent regulations to ensure financial health of the policyholder. Advertisements and literature (any promotional material) is scrutinized by IRDA. IRDA acts as a grievance redressal system. Any closure of insurance companies is viewed seriously. IRDA always intervene in such cases just like SEBI has done for Satyam, RBI has done for Global Trust Bank.

12
Regulators are not effective. Look at SEBI and RBI.

No Objection Movement

C. IRDA is trustworthy
IRDA suggests of Trust, Transparency and Technology. IRDA is formed by an act of Parliament. Till now no scam has taken place in the insurance industry. Globally, the regulators follow the highest standard of procedural, ethical and transparent methodology and openness. I agree that when seen from consumers side the biggest issue is one of regulatory arbitrage. Let me assure you that IRDA is very strict. IRDA is staffed by people who are technically qualified and have quite a rich experience in the industry. You cannot afford to distrust the regulator. Do you accept a Rs. 10 note not signed by RBI Governor?

By Product Development

May 26, 2009

D. How will insurance industry be without a regulator?


Any control is better than no control. A system without regulator is Risky. Without a regulator any system is headless. Customer centricity will go out of the door.

Solution Capsule
A. Financial Security for Self
It is a myth that insurance is taken only for dependants. Insurance plan is an asset for you. You not having any dependents make it even more crucial for you to ensure your financial independence at the earliest. Insurance makes you self-sufficient. You will not have to depend on anybody and you will be living your life with self respect.

Objection

Insurance provides you growth, safety of funds, liquidity and above all protects you from unforeseen eventualities which can harm you financially. Insurance is a forced saving for you. Average life span has increased. Outliving your saving is a big risk. You need good financial planning to cover yourself against this risk. Planning today will help you pursue your dreams tomorrow. Financial security gives you peace of mind. You can even pledge your insurance policy as collateral for loan. Insurance, being a tax-efficient tool, will help you in tax planning.

13
I do not have any dependants.

B. Health Insurance is crucial


Insurance takes care of 1) Diseases 2) Disabilities apart from death. How will you protect yourself from the financial losses arising from any disease and disability? Health maintenance is a major expense today and it will become expensive as one grows old. Make a provision today to have a healthy tomorrow. With rising health care expenses, the need for making provisions is higher.

No Objection Movement

C. Plan your retirement through Insurance


Becoming financially independent is important but sustaining financial independence is all the more important.

By Product Development

Insurance liberates you from financial constraints where you are free to choose the quality of your life. A regular income post retirement is a must. It is better to make provisions now. Financial independence will be of utmost concern post retirement. You can choose a pension plan depending upon your requirements. We have pension plans with and without life cover. Pension will help you lead your retired life with dignity. A regular pension means No tension.

June 2, 2009

Solution Capsule
A. Coverage by employer should not be your primary cover
What if you are in the transition phase of shifting to another employer? You are not covered in the interim period. What if your employer decides to call-off the facility tomorrow? Usually coverage at workplace is only certain times of your basic salary. You may be underinsured at workplace. Evaluate your needs and insure yourself accordingly. You should look for comprehensive protection for yourself. Coverage should be adequate to support your family financially. Your Human Life Value should be the basis of your coverage.

Objection

14
I am covered at work.

B. Your coverage should fulfill your future objectives


You cannot fulfill your long-term goals like childrens education and asset creation with your life cover at work. Can you make provisions for your retirement with your workplace insurance? Have you taken care of your estate that you will leave behind for your dependants? Unit linked plan boost your investment while traditional plan offer you to secure long-term savings.

C. Different objectives need different plan

No Objection Movement

Have you come across anyone who is only dependent on the cover provided by the employer? Individual plan - You are the owner. Will you not buy a car/bike of your own even if your employer offers you pick and drop facility? You need to review your life cover and continuously enhance the same. Workplace cover does not provide you that. Your individual plan can cover you for Critical Illness and provide lump-sum benefit which your workplace cover cannot provide. Having a health plan of your own gives you cover in situation of service gaps.

By Product Development

Individual Insurance plan will ensure the attainment of your goals whether you are there or not there.

D. Your own insurance means additional security


During times of recession, no job means no security. Individual plan offers auto-cover/ cover continuation feature, which means you get uninterrupted coverage. Enjoy opportunities of investing in different asset classes with your individual insurance plan. It is important to ensure that all your family members are adequately covered. Employer coverage is a perk. You need to plan for financial security. Additional riders can ensure better coverage.

June 9, 2009

Solution Capsule
A. ULIPs are more convenient
Why do you want to go for 2 different plans when you can get advantages of life cover and investment in the same plan under ULIP? In a pure term plan, you do not get back anything at maturity. Failure to make timely payment of premium in term plan shall lead to ceasing of benefits and shall attract interest on revival. ULIPs ensure continued cover even if you fail to pay your premium. Mutual Fund + Term Plan do not offer flexibility of adjusting life cover so you pay more cost of insurance even if your life cover need has reduced. Re-instatement of ULIPs is hassle-free. The charge calculation in mutual fund is not as transparent as in ULIPs. Sum total of features and benefits offered by ULIPs is much more than mutual fund + term plan combination. It is better to buy a home theatre rather than buying speaker, DVD, TV individually. One can easily reach an insurance company like BALIC because of our wider reach and number of offices compared to a fund house.

Objection

15
Mutual Funds + Term Plan is better than ULIPs.

B. ULIPs are more popular


Penetration of ULIPs is much more than mutual fund. The FMC of ULIPs is lower when compared to mutual funds. Switching from one fund to another usually attracts entry load in mutual funds. ULIPs offer you a number of free switches. ULIPs can be assigned. Some of our ULIPs offer you guaranteed addition of units which in turn accelerates your fund growth. In ULIPs, you can get a projection of your maturity value (@ 10% and 6%) which is totally absent in mutual fund. If you are not satisfied with our ULIPs, you can opt for free look cancellation. Claim settlement procedures in ULIPs are easy and hassle free compared to term plan + mutual fund. Most of the BALICs equity funds catering to large-cap, mid-cap and index, managed a lesser fall against the market last year (2008-2009).

No Objection Movement

C. ULIPs are more flexible


ULIPs provide you with additional riders to boost your protection. ULIPs offer you option to choose and adjust life cover depending on your needs. With a ULIP, you can make additional investment through top-ups along with additional Sum Assured. ULIPs offer you option to increase/ decrease your regular premiums to suit your financial objectives.

By Product Development

D. ULIPs help in creation of wealth


Surrender charges during the early years in ULIP encourages you not to liquidate your investment. ULIPs inculcate the habit of forced savings. All mutual funds are not tax-savings tools but all ULIPs are. ULIPs offered by BALIC provides the choice of selecting Investor selectable portfolio strategy and Wheel-of-Life portfolio strategy. ULIPs are best suited for childrens education because they continue to infuse outstanding premium to the fund in case of the unfortunate death/ disease/ disability of the parent.

June 16, 2009

Solution Capsule
A. Insurance helps you in present and future
Loans help you to enjoy the lifestyle you want. But insurance help you to sustain that lifestyle. The cost of living tends to increase with each passing year. Loans can be the solution to your immediate need. But insurance is designed for needs in future. You dont want to leave your family with all the liability. Insurance ensures that the loan does not become a burden to the borrowers family.

Objection

Insurance is a risk mitigator. With insurance, you can Jiyo befikar.

16
I have loans on me. I cannot afford to buy insurance.

B. Loans create financial insecurity


Having insurance becomes all the more important when you have any loan against you. Insurance acts as a surety to pay your loans in your absence. Buy the insurance plan to cover your outstanding loan. Term plans are cost-effective where you get higher cover at lower prices. Insurance is an all-in-one tool, protecting in form of life cover, accidental cover and savings too. The thought of caring for the family is foremost in the minds of each breadwinner and an insurance policy with its life coverage takes care of financial commitments in an effective way.

C. Loans are always a liability


Loans are the other name for liabilities. Living this moment is a misnomer. Housing finance institutions prefer insurance policies on the life of a borrower. Multimillionaire Warren buffet has discouraged the principle of buy now and save later. Loans raised by you leave you with a hypothecated property. Insurance policies leave you with an assured property. You can repay the loan you have taken. Does your dependant in your absence can still repay the loan that you have taken?

No Objection Movement

D. Insurance is a forced saving


Insurance will ensure that your savings are intact for your retirement. No amount of loans can actually provide a solution for your post retirement requirements.

By Product Development

With insurance, you can plan a targeted amount in future and the question of loan will not arise. Even by contributing as low as Rs. 30 per day, you can plan your future. Dont we save that little extra to buy a car? Then why dont we go that extra mile for insuring our lives.

June 23, 2009

It is wise to increase an appreciating asset - Insurance. Your loan raising ability reduces with age. In future, you have to be more dependant on the pool of fund that you have created. Two things can kill you worry and hurry. Insurance can save you from worry.

Solution Capsule
A. Fixed deposit is not alternative to insurance
Comparing Fixed deposit and Insurance is not an apple-to apple comparison as objectives of both these instruments are different. If your objective is to get protection + returns, then Fixed deposit may not be able to help you. For investment + protection, you should go to an Insurance Specialist and Bajaj Allianz is the one. How do you take care of a Guaranteed Uncertainty - DEATH? Insurance will take care of this uncertainty from very first year.

Objection

B. Evaluate your objectives


You buy insurance plan to meet your long-term financial objectives. Short term view of the market is thus irrelevant. Volatility is not the correct measure for investment decision. You should rather consider your i) Financial objectives ii) Risk taking ability. Insurance help you in diversifying your portfolio thus reducing your risk. In bad economic scenarios, your family needs more protection and income security. Ensure security with insurance.

17
Fixed Deposit is a better option considering current market scenario.

C. Fixed Deposit is a short term investment tool.


Can you fulfill your long-term needs like childs education and pension with Fixed Deposits? Rate of interest of Banks are applicable for short-term financial planning. One need to ear-mark funds for long-term and short-term needs. For long-term needs, the instrument should be less liquid - Insurance is the only option. With locking your money in Fixed Deposits, you will lose out on an effective asset allocation.

D. Think long-term

No Objection Movement

Thinking long-term is the key to manage your investments. In shorter term, you will always see that value fluctuates. In long-term, all the investment avenues give positive returns be it real estate, gold or insurance. Ups and Downs are a way of market functioning. Time tested formula to beat volatility is to invest regularly and stay invested.

E. Insurance is a Wealth Management Tool


Depending on your financial objective/time horizon Insurance offers you a wide range of plans to choose from. Insurance is an Easily Manageable Estate. Insurance taken under Married Womens Property Act can help you create encumbrance free estate i.e. no court can confiscate the proceeds of your insurance plan. Insurance not only helps in forced saving but also offers scope of benefiting from different asset classes.

By Product Development

F. Insurance is an efficient Tax-Planning Tool June 30, 2009


Insurance policies are tax-efficient. If your objective is tax-planning, Bank Fixed Deposits will not do justice. Insurance gives you tax benefit both at entry and exit. While Fixed Deposits may gives tax benefit only at entry. Bank Fixed Deposits will not give you tax free maturity. In Insurance, as per current laws, your premiums are exempted u/s 80 C and 80 D and maturity/ death benefit are exempted u/s 10(10D).

Solution Capsule
A. 10(10D) cannot be the sole motive of taking a life insurance policy
Tax free maturity under 10(10D) is only one aspect of life insurance. Insurance is a risk mitigation tool. Can you afford to remain uncovered or stop planning about your childs education just by wondering about the fate of 10(10D)? Tax planning cannot surpass your personal financial plan for which, life insurance is a vital tool.

Objection

Interest on fixed deposits attracts TDS. Have you stopped investing in fixed deposits?

B. 10(10D) is extended to promote life insurance

18
10(10D) may be removed/ altered by Government tomorrow. What if it is not there at the time of policy maturity?

Since Life Insurance is the most efficient tool for mobilization of money and helps the economy in Capital formation. Since India is yet to have a proper social security net, life insurance industry shall be continued to be patronized by the Government. Since, indirectly Government gets revenue from life insurance like service tax, stamp duty, corporate tax, etc. Thus removal/ alteration of 10(10D) will impact Government too.

C. 10(10D) has far reaching consequences


In case Government intends to bring maturity benefit of life insurance under tax, it will also not leave benefits under other instruments like Public Provident Fund and Gratuity from being taxed. Insurance contracts are long-term saving and protection vehicle. It is not purely an investment tool. Thus possibility of imposition of tax on maturity is remote. Insurance companies invest a substantial portion in stock market and GOI Bonds. Any alteration in 10(10D) shall have a negative impact on the same.

No Objection Movement

Removal/ alteration of 10(10D) will be a contradiction to the legal provisions of Married Womens Property Act.

D. Removal/ alteration of 10(10D) is not a viable option


As from socio-economic consideration, life insurance will be the last in the list of direct taxation. In a country like India, as Government intends to increase penetration of life insurance, the idea of removal of 10(10D) does not hold good. After Provident Fund, life insurance industry has the largest number of retail investors. Thus, removal of 10(10D) is the last option that the Government will consider.

By Product Development

Till now, no tax laws have come into force in a retrospective manner. Thus, we may assume that the life insurance policies issued today will not be impacted. Even if 10(10D) is removed, entire maturity proceeds cannot be taxed, since it consists of premium paid by the Policyholder/ life assured also.

July 07, 2009

As Insurance industry has greatly helped in the development of capital markets (debt and equity markets), removal/ alteration of 10(10D) will negatively impact the same.

Solution Capsule
A. Insurance is for uncertainity
Insurance is a means to mitigate risk. How about reviewing your insurance needs? It is important to have adequate protection along with adequate money so that you and your loved ones do not suffer heavy financial loss. You are saving/ investing today for your future, but what if the future does not turn out to be as planned?

Objection

It is important to calculate the cost of NOT LIVING. Insurance is about covering this cost.. You may have covered yourself of the existing liabilities but what about future commitments or ''out living your saving'' ? The family needs a steady flow of income in case of unfortunate demise of a earning member . Insurance is not about adequacy of money. It is about provisioning for uncertainties.

19
I have adequate money.

B. Insurance maintains your adequacy


More money calls for more insurance. Despite having adequate money, dont you insure your car? Then why not your own life, which is priceless. Adequacy is a relative term. Whatever is adequate today may not be adequate tomorrow. If you have adequate money, have you stopped investing? How do you define Adequate? Is it as per your todays need or future needs? What about your childs future? Have you planned for the same?

No Objection Movement

C. Insurance is not only for you


It is also for your family and your loved ones. Have you assessed whether the insurance cover that you have taken is adequate as compared to your earnings and changes in lifestyle? Insurance can help us achieve long term goals whether we are there or not. Our life is closely linked to the life of our loved ones. If we do not value our own life, we are putting the lives of our loved ones at stake. Do you want it?

D. Insurance is a double edged sword By Product Development


More than just a risk cover, it is a measure to make your money grow. Tax benefits under insurance plan are the additional benefits apart from investment. The primary objective is to plan for your future and sustaining your lifestyle. Insurance helps you in maintenance of your lifestyle in future.

July 14, 2009

Insurance helps you in mitigating the increasing cost of living. It will help you against rising medical costs. You have to put a very little part of your money in buying a plan. The benefits it will deliver are manifold. It is the best way to pass inheritance.

Solution Capsule
A. Most people feel like this
Once we discuss your financial need, I will surely be able to offer you something better. If we can talk for another 5 minutes, I can help you in taking a logical decision to buy now or later. Time is an important factor in insurance because your Human Life Value and future cost of living change with every passing year. Thus it is wise to keep on reviewing.

Objection

I promise I will not insist on you buying insurance. I also promise you that giving me a few minutes to talk will not be a waste of your time. Have you taken a plan that takes care of both your cost of not living and also risk of out living your savings?

20
Not interested to take this policy now. Will buy later.

B. Buying later may lead to missed opportunity


A missed opportunity never comes back. You may regret not buying now. We always defer the decision to buy insurance as we do not realize the urgency of living without cover. With rising costs it is better to plan for your future expenses from today itself. Would you like to defer planning for your childs education? Remember LIFE has an IF in it. Wealth is created by investing regularly for long-term. Thus more you defer, the less you create. Insurance is all about taking care of uncertainties of life. Uncertainty can strike anytime.

No Objection Movement

Postponement might result in loss. As you defer, the Cost of Insurance increases. Failing to PLAN is planning to FAIL.

C. BALIC plans help you maintain your lifestyle


You may decide to buy later or not to buy at all - I can show you how other people have benefitted from our plans. We have different plans to suit your varied requirements, be it retirement, health, education etc.

By Product Development

I agree that most people are reluctant to buy insurance but it should be an important part of your investment portfolio. What you can do with Rs. 10,000 today, you will need Rs. 20,000 tomorrow to do the same thing. Have you planned for this?

D. We help you in asset allocation


BALIC has a range of products that help you in asset allocation.

July 21, 2009

Decision making becomes easy when you have number of choices. Even if you buy later, you have a host of options with BALIC. You can have plans ranging from pure protection to pure investment. BALIC plans help you manage your money better.

Solution Capsule
A. What is Savings?
We follow income minus expenses equal to savings. However, we should follow income minus savings equal to expenses. If money is scarce today, so it will become more scarce tomorrow. Have you experienced a situation where you did not have any money at all? Think what will happen when our earning capacity gets reduced due to retirement or old age. The day to start investment in lump-sum will never come.

Objection

We all know that drops of water make an ocean but we fail to follow the same. If you seriously think about your present and future commitments, I am sure you will like to manage money better. Would you like to live a life where you are in a situation of constantly worrying about money? If you think that you dont have money - then it is the right time to change the situation to say I have money.

21
I dont have money.

B. Insurance is a piggy bank


Small contribution to insurance can build up protection and wealth for you. You are willing to take a loan today, but if you would have saved, you could have used your own money. You will surely want to give best education to your child, buy a house or travel to a nice place. Insurance makes it possible for you, to have money tomorrow by imposing the habit of forced savings.

No Objection Movement

Imagine the feeling of comfort and confidence when you actually know that you have money to fulfill dreams of your loved ones.

C. Money will not grow till you make a wise decision


Insurance has dual benefits 1) Compulsory savings and growth of money 2) Financial cushion to the family upon the unfortunate demise of the earning member. Money is not only about how well you earn, it is also about how well you save. Managing money and saving for future is not a matter of To do. It is Must do. Your priorities for your near and dear ones demand organizing your expenses and investing money accordingly in insurance.

By Product Development

You need to prioritize now on how you want to use your money. Your todays decision bears tomorrows results.

D. Insurance is investment for your future


You do not need money to buy insurance. You need conviction towards the responsibility you have towards yourself and your loved ones.

July 28, 2009

Lost opportunities are never re-gained. Thus it is better to start now. Lack of financial planning can upset your lifestyle because of increase in cost of living and health care. Not having money calls for more insurance so that I do not suffer in case of health or accidental contingencies and my family is also financially secured.

Solution Capsule
A. IRDA regulated insurance company Government has control over sectors which are privatized. They have
specialized regulatory bodies like RBI for Banks, TRAI for Telecom and IRDA for insurance.

Solvency Margin needs to be maintained by all the Insurance Companies in India


whether in Private or Public sector.

We are solvent - solidly solvent, thanks to conservative investment and strict


IRDA regulations.

Objection

Regulation provides a level playing field for all insurance companies. So decision
based on how safe a company is not relevant.

22
BALIC is a private company.

B. Bajaj Allianz alias S.A.F.E


Stability is what we have proved as Allianz have a vintage of 115 years in insurance industry providing financial service. Accountability is what we hold for our customer segments by providing need based products. Financial Security is what we guarantee you by giving you an access to affordable and reliable insurance. It will cover the care you need, when you need it the most, at a price you can afford. Efficiency is what is reflecting from our much improved service quality and customer centric product.

C. You can rely on us


Bajaj and Allianz both have a track record of long-term market presence in any venture.

No Objection Movement

We understand your insurance needs and provide you a plan that meets your needs. Perception is the deciding factor here. Being a private company makes us all the more responsible and watchful towards policyholders interest. Private insurance industry in India has tested positive for Growth steroid. Why 80C/ 80D/ 10 (10D) benefits are given on policies of a private player like us, if we were not under proper regulation of Indian laws? A research shows that 62% of our policyholders are our Brand Fan.

D. Look at the bright side of facts By Product Development


Our business philosophy is to ensure excellent insurance and investment solutions by offering customized products, supported by the advanced technology. You should look at the large number of customers who have trusted us with their money.

August 04, 2009

Our number of branches itself proves that we are here to stay and not run away. Being highly transparent, we have our product brochures and benefit illustration on website. Lacs of customers in 8+ years bears a testimony that BALIC as a brand commands enormous trust and credibility. Our Asset Under Management is Rs. 23,136 crore as on June 30th 2009.

Solution Capsule
A. Pension is a regular income post retirement Unlike Fixed Deposits, your Pension is a regular income. Immediate Annuity
plan guarantees regular income (Pension) for life. The average lifespan is increasing; therefore there is greater need for regular income. One can have it through Immediate Annuity plans only. Immediate Annuity plan offer the convenience of invest and forget.

Objection

What is it that you value in old age - safety, security or growth? Immediate annuity is the best tool to ensure safety and security. Stability of income is important in old age. When you are assured of a regular income, it is always easy to plan your day-today expenses.

23
Why to purchase Immediate Annuity when the rate of return is lower than Fixed Deposits?

B. Fixed Deposits are for meeting short-term goals


Fixed Deposit is a tool to park your money for short/ medium term investment. Therefore planning your future on the basis of Fixed Deposit is not as worthwhile. The Fixed Deposit proceeds may end up satisfying our temporary needs, but they cannot compensate for life long stable income. Immediate Annuity plans are meant to provide financial protection to you and your dependants. Fixed Deposit only serves the purpose of instant availability of fund in case of an emergency.

C. Fixed Deposits cannot substitute Immediate Annuity plans


Immediate Annuity plans are built for regular income. Fixed Deposits remains a choice which one is tempted to postpone. Immediate Annuity plan help you mitigate the risk of living too long. Fixed Deposit does not ensure fixed returns for life time. Immediate Annuity does. Interest rate of Fixed Deposit fluctuates while Installment of annuity is a contractual obligation for the insurance company. Immediate Annuity is a provision for future income. Once sufficient provisions are made, Fixed Deposit can be a secondary choice for meeting sudden contingencies.

No Objection Movement

By Product Development

D. Importance of a risk-free earning after retirement


Immediate annuity is the only tool which is not affected by change in interest rate. What will happen if 15 years down the line, Fixed Deposit rates fall steeply?

August 18, 2009

Fixed Deposit is for specific time frame and the proceeds needs to be re-invested with the risk of having low interest rate on re-investment. Fixed Deposits have credit risk.

Solution Capsule
A. Comparing right Fund and the right time frame
Compare return of the Funds which has similar asset profile and objective. One should look at long-term for performance rather than short-term. One should not compare return across different time frames. 1 month return of a fund against 3 months return of another fund is not an apple to apple comparison. Before comparing two different Funds, we should make sure that they have the same underlying assets and risk profile.

Objection

Comparing Funds is not as easy as it may appear to be. One has to make sure that the right funds are compared.

24
Fund growth rates are lower than other companies.

B. Wide choice of Funds


Do other companies offer you wide variety of funds as we do? We offer the customer to choose a Fund according to his risk taking appetite. We have various funds for various time horizons. We are one of those few companies who offer you Index Fund. We offer a wide choice of Funds and depending on the performance of different asset classes, you can switch amongst these funds to maximize growth.

C. Choose a Fund according to risk vs return


It is fundamental to any investment that higher the risk, the higher are the return. Returns have to be compared with risk profile of the fund.

Consistent returns are the key to build corpus over a time horizon.

No Objection Movement

It is important to focus on Risk adjusted returns. A large-cap fund may show good performance for a short while by adding high-beta stock to its portfolio but during bad times, the returns may go away. While deciding on a fund, it is important to see how well the fund is managed in terms of preserving value in bad market condition. Comparing funds in both rising and falling market is more relevant. Protecting value is equally important as earning returns.

D. Fund Performace is only one aspect of your plan By Product Development


Let us not forget that we are investing in an insurance plan, the objective of having an insurance policy is the broader picture rather than judging fund performance. What does matter is how well the plan suits you? Fund growth rates are not the only criteria to buy insurance. The product features also play a considerable role in your financial scheme.

August 25, 2009

It is of no/ little use if funds of a 20-year policy perform remarkably well in the first 2 years and bad during last 5 years. Long-term performance is the true value added to the customer. We target objectives of life like retirement, childs education. We need to see long-term and thus short-term volatility is irrelevant.

Solution Capsule
A. Guarantee comes at a cost
You should realize that in a guaranteed plan, your exposure is kept low to avoid losing money. Risk and return go hand in hand. Higher the risk, higher the return. The premium of traditional products is invested carefully to match the guarantee and therefore gives less return. The kind of plan that you opt for depends upon your risk appetite. Guarantees are more attractive for risk adverse people who want to secure a minimum guaranteed return. Returns of a guaranteed plan are less if plan is opted at a higher age.

Objection

25
Guaranteed returns are low in traditional plan.

B. Traditional plans form the backbone of your financial investment


What is the guarantee that my high risk investment will deliver the promise? So it is always wise to have an underlying secured investment. Does your savings bank account give you very high rate of interest? No because the purpose is to provide safe custody and liquidity of money. When you spread your investment over long-term, it is always important to have a safe investment tool that gives you stable returns. Traditional plans can be said as target funds. You know what you will get. Definite future expenses like childs education/ marriage can be best managed with traditional plans as you can have no room for uncertainty.

C. Traditional products work well when market is volatile

No Objection Movement

Though guarantee comes at a cost, they are more beneficial in volatile environment. It is a myth that only a plan with high guaranteed component helps you get a good maturity value. One should calculate Internal rate of return i.e. IRR. Maximum benefits are shared with you in traditional plans. The investment mandate of traditional plan is regulated. Just the way saving is as important as earning, preservation of value is as important as earning high returns. Traditional plan offers you the vehicle of asset preservation.

D. Traditional plan act as a de-risking tool By Product Development


A plan which offers less guarantee makes up for return with higher reversionary bonuses. An old wisdom says Do not put all your eggs in the same basket. In todays financial world, you need to diversify your risk. Traditional plan gives you the comfort of surety, though they give you reasonable return. Traditional plan offer absolute safety as the company is under the contractual obligation, so the risk is transferred to the insurer. Under unit-linked plan, investment risk is borne by policyholder while in traditional plan, it is borne by the company. You do not run the risk on re-investment as it happens with other guaranteed investments like fixed deposits.

September 01, 2009

Solution Capsule
A. Invest Plus has proved to be a unique product Invest Plus gives you the twin advantage of investment and life cover with
GUARANTEE.

Along with guarantee, Invest Plus offers a host of very attractive features and
benefits.

Objection

Invest Plus will always remain competitive with prevailing comparable


investment choices because the company has the option to revise GIR every financial year. Invest Plus is a long-term product from the companys perspective. Thus, the GIR has to remain competitive. Loyalty Addition provided in Invest Plus in subsequent years will compliment the GIR. Additional credit for additional premium provides upfront enhancement to your investment.

26
What is the surety that Guaranteed Investment Return (GIR) in Invest Plus will not go below 7%?

B. Advantage of GIR being declared every year


What would you prefer? Any plan that gives you a fixed guaranteed rate throughout the term or a plan that offers you optimal return year on year. Any plan which guarantees certain percentage of return throughout the policy term has the cost of guarantee built-in. In Invest Plus, since GIR is declared for every year, so no such cost of guarantee is associated. Without causing any risk to your investment, Invest Plus allows you to benefit from the performance of the underlying assets. In an increasing interest rate scenario, GIR is expected to grow. It is always advantageous to have Invest Plus in your portfolio because when asset classes like equities are volatile, Invest Plus will still offer you guarantee. Premiums of Invest Plus are invested in high grade fixed interest securities which will ensure minimizing year to year fluctuations in GIR.

No Objection Movement
By Product Development

September 15, 2009

Since GIR declared for a financial year is fixed, thus you can time your additional premiums to take advantage of the same.

Strictly for internal training purpose. Insurance is the subject matter of the solicitation.