icici pru[1].bhaushan

7/29/2019 Icici Pru[1].Bhaushan

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A

SUMMER TRANING REPORT

ON

CUSTOMER PREFERENCES

TOWARDS DIFFERENT

PLANS OF ICICIPRUDENTIAL

Submitted in partial fulfillment for the Award of theDegree of Master of Business Administration

Session (2005-07)

Submitted by:

SARITA

Roll No. 32MBA, (Hons)

3rd Sem.

UNIVERSITY SCHOOL OF MANAGEMENT

KURUKSHETRA UNIVERSITY


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KURUKSHETRA

PDM COLLEGE OF ENGINEERINGAffiliated to Maharshi Dayanand University, Rohtak

DECLARATION

I,_____________Roll NO_________________PDM College OF Engineering

here by declare that the Project entitled _________________________ is an

original work and the same has not been submitted to any other institute for the

award of any other degree. The interim report was presented to the Supervisor on

______________________ and the pre-submission presentation was made on

__________________. The feasible suggestions have been duly incorporated in

consultation with the Supervisor.

Countersigned

Signature of the Supervisor

Signature of theCandidate

Forwarded by:


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Director / Principal of the Institute

INDEX

Acknowledgment

Preface

Introduction

o Company Profile

o Product Profile

Concept used in study

Objectives

Research Methodology

o Type of Research & Research Design

o Significance Of Research

o Collection of Data

Data Analysis and Interpretation

Comparisons :--

With --- Traditional plans

-Main market players.Other Investment modules

Findings

Recommendations

Limitations

Conclusion


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Bibliography/References.

Annexure

PREFACE

There is no doubt, that classroom study is quite important for gaining

theoretical knowledge, but practical knowledge is also important for a student who

wants to equip himself with the real life of corporate environment in any field of

studies. It is also true in the management studies. Summer training is conducted as

an integral part of the management course. It provides an opportunity to apply the

theoretical knowledge in practice. Hence, it gives an excellent opportunity to a

student to apply his ability, capability, intellect, knowledge, brief reasoning and

mettle by giving a solution to the assigned problem, which reflects his caliber.

I had the privilege to receive summer training for 60 days in

ICICI PRUDENTIAL.

My attempt would be successful if my present report serves the needs and

requirement of the organization in the future.

I thank every one who has contributed to make this experience complete &

stimulating


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ACKNOWLEDGEMENT

I acknowledge the support and guidance provided by the Faculty of my Dept.

Kurukshetra university Kurukshetra.

I express my sincere gratitude to Mr. Manoj Kumar (Unit Manager of ICICI

PRUDENTIAL) Mr. Manoj Kawatra (Regional Manager of ICICI PRUDENTIAL)

and all the staff Members of ICICI PRUDENTIAL.

My gratitude also extends to the other people of the ICICI PRUDENTIAL.who

gave me their sincere support and guided me to complete the project.

I also express my wholehearted gratitude to my HOD

Mrs. Sheela Bhargava and M/s .Neha Panwar.

SARITA


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INTRODUCTION


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INTRODUCTION

Insurance is a contract whereby, in return for the payment of premium by the

insured, the insurers pay the financial losses suffered by the insured as a result of

the occurrence of events. The term risk is used to describe all the accidental

happenings, which produce a monetary loss.

Insurance is a tool in which a large number of people exposed to a similar risk

make contributions to a common fund out of which the losses suffered by the

unfortunate due

to accidental events, are made good. The sharing of risk among large groups of

people is the basis of insurance. The losses of an individual are distributed over a

group of individuals.

The risk becomes insurable if the following requirements are compiled

with :

The insured must suffer financial loss if the risk operates.

The loss must be measurable in money.

The object of the insurance contract must be legal.

The insured should have sufficient knowledge about the

risk he accepts.

WHAT IS INSURANCE ?


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Insurance is a social security tool to individual

Mankind is exposed to many serious perils such as property losses from fire and

windstorm and personal losses from disability and premature death. Although it is

impossible for an individual to foretell or completely prevent their occurrence but

it is possible to provide against their financial effectthe loss of property and

earnings.

From the point of view of the individual the life Insurance may be defined as a

contract whereby for a Consideration amount called the premium, one party (the

insurer) agrees to pay to the other (the insured) or a beneficiary a particular amount

upon the occurrence of death or any other agreed event.

Insurance is the method of spreading and transfer of risks

Losses of few unfortunate are shared by and spread over to

many exposed to the same risk.

Assets created by the owner in expectation of future needs

have a value.

Losses of assets for any reason deprive the owner of the expected benefits.

It acts as a form of a safeguard against misfortunes.

From the point of view of community life insurance may be defined as a

social device to make accumulations to meet uncertain losses resulting

from premature death or disability.


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PURPOSE AND NEED OF INSURANCE

As said earlier that the making is exposed to many serious perils which risk the

security of their belongings. The risk here means that there is a possibility of

occurrence of loss or damage to the property, it may happen or may not happen.

Insurance is relevant only in the contingency of uncertainty. If there is no

uncertainly about the occurrence of the loss it cant be insured against

Assets are likely to be destroyed or made non-functional due to perils like

firefloods, breakdowns, lightning and earthquake.

Damage to assets caused by any perils is the risk that assets are exposed to.

Risk means possibility of loss or damage, which may or may not happen.

Insurance become relevant only if there is uncertainly of occurrence of

event leading to loss.

No uncertainly No insurance.

We can say that the human life value is an ongoing generating asset, which

can be lost on early death or disability caused by accidents.


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Insurance doesnt protect the assets but only compensates the economic or

financial loss.

Basically insurance covers tangible assets but the concept can be extended

to intangible also.

TWO BASIC PRINCIPLES TO MAKE INSURANCE POPULAR

People are exposed to risk and the consequences of which are difficult to

born by individual.

If some one depends on you financially,you need insurance.

COMPANY PROFILE

STRUCTURE OF THE COMPANY

The ICICI Prudential is a joint venture of ICICI (74%) and

Prudential UK (26%). ICICI Prudential Life Insurance was incorporated on July

20,2000 and was granted a certificate of registration for carrying out life insurance

business, by the IRDA on November 24,2000.

The authorized capital of the company is Rs 2300 million and the paid up

capital is Rs 1500 million. It commenced commercial operation on December 19,

2000 becoming one of the first private sector players to enter the liberalized arena.

During the short period till March 31, 2003 The company has issued 2.45 million

policies translating into a premium Income Rs 59.7 million and the sum assured of


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over Rs 1000 million. The company is now operating in Mumbai, New -Delhi,

Pune, Chennai, Kolkata, Banglore, Ahmedabad, Hyderabad and Lucknow and

other main cities. Established ICICI LTD in 1955, the Government of India and the

Indian Industry, promote Industrial development of India by providing project and

Corporate finance to Indian industry.

Since inception, ICICI has grown from a development bank to a financial

conglomerate and has become one of the largest public financial institutions of

India. ICICI has financed almost all major sector of the economy, covering 6848

companies and 16851projects. In the fiscal year 2002- 2003, ICICI had disbursed a

total of Rs 45673 billion.

Prudential was founded in 1848. Prudential is the largest life insurance

company in the United Kingdom. . Infact Prudentials first overseas operation was

in India, .

Important activities

The important activities of the Insurance companies are: --

Procuring new proposals for grant of life insurance cover.

Scrutiny of proposals and giving decisions for

Accepting/rejecting the proposals of Insurance.

Issuing a policy document.

Keeping track of performance of insurance contract by way of receipt of

premiums.


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Providing assistance in various matters like nominations, assignment,

alteration of terms, change of address and payment of claims.

Other activities like investment of funds, maintenance of accounts,

personnel management, data processing and complying with other legal and

regulatory requirements.

These can be termed as the important activities of the Life Insurance

companies. The insurance companies may concentrate these activities at

ones place if it area of operation is limited or the activities may be

decentralized because of the fact that the area of that company is also

decentralized.


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ICICI PRUDENTIAL LIFE INSURANCE

ICICI and Prudential came together in 1993 to form Prudential ICICI Asset

Management Company, which has today emerged as one of the leading mutual

funds in India. The Two companies bring together two of the strongest financial

service brands in Asia, known for their professionalism, excellent quality of

service and long term commitment to YOU. Riding on the success of this

relationship, the two companies joined hands once more in 2000, to form ICICI

Prudential Life Insurance, with a commitment to provide leading edge life

insurance solutions.


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PRODUCTS PROFILE

TERM INSURANCE

Under term insurance plan, sum assured is payable only if death occurs during the

specified pre-determined term. If death does not take place during such term the

amount of premium stands forfeited. Thus it can be seen that the term insurance is

nothing but the cost of pure protection. It is a contract, which provides financial

protection if death should occur within a specified period. No survival benefits are

provided under the contract.

WHOLE LIFE INSURANCE

Whole life insurance provides for the payment of the face value upon the death of

the insured, regardless of when it may occur. This policy furnishes permanent

protection to the insured at he moderate cost. This is highly important for the

average man or woman of moderate salary, who require considerable family

protection and whose limited income does not enable him or her both to pay

premiums and to accumulate a large savings fund. The whole life policy provides

a capital sum of money in the event of death of the assured whenever that may

occur

ENDOWMENT POLICY


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Endowment is a product, which includes Risk cover and saving also. In the

pure endowment policy the sum assured is payable in the event of death or

definitely on maturity. In an endowment sum assured is for sure given to the

policyholder on completion of the term. Endowment plans are very popular in

developing nations since they serve a dual purpose of life cover and savings. Many

a people in our country go for endowment products because of the compulsory

saving aspect. An endowment plan on the other hand is not a cheap plan since the

insurer has a dual liability of providing life cover and on maturity giving the entire

sum assured.

Annuities

Annuities refer to income or other financial provision usually for retirement or old

age. An Annuity may be defined as a periodic repayment made during a fixed

period or for the duration of a designated life or lives. In one sense the life annuity

may be describas the opposite of insurance protection against death in its pure form

a life annuity may be defined as a contract whereby for a premium consideration

one party (the insurer) agrees to pay the other (the annuitant) a stipulated sum (the

annuity) periodically throughout life. The purpose of the annuity is to protect again

a riskthe outliving of ones income.

INDIAN SCENE

Competition in the market always proves favorable to the to the consumer. So it is

in the case of life insurance. After what seems like almost an eon, finally the doers

of the life insurance sector were thrown open to the private sector players last year.

The Finance Act, 2001 has thankfully cleared quite a lot of cobwebs giving a level-

playing field to both the sectors. Private sector players would only be too aware


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that this is the proverbial first step of the thousandmile journey that lies up

ahead. Contending for a piece of market share with a Goliath that LIC is, will not

be an easy task unless Pvt. Sector offer qualitative and innovative products at an

affordable price. That they would be pulling out all the stops to attract customers is

not in doubt. Hence, this is as good a time as any to pay attention and see what is

on display. The strategy too many option simply confuse the users whereas too few

will surely turn them away.

Indias position is far behind the developed countries but reasonably good

compared to the other LDCs with the real growth higher than both groups. Among

the developed countries life insurance penetration is found to be highest In Japan

followed by United States. While, the life insurance density is found to highest in

South Korea and least in US. In the developing countries on the other hand Chile

showed the highest penetration, which was 33.80% while china. Had the lowest,

which was just 0.53%. India was next to Philippines with 2.20% penetration.

Most countries, whether developed or developing and where state and private

insurers operated, featured highly concentrated markets since they serve

consumers interest with minimum risk.

Degree of Concentration in Insurance Market

Indian Insurance market size is presently estimated at US$ 86-95million. By

2007,it is expected to grow five-fold told US$ 480 million. In 2000-01 fiscal year,

total global premiums stood at US$9933 million, which is 0.41 percent of total

global premium of US$ 2443.6 billion. Per capital premium stood at US$ 9.9.

Indian insurance market potential could be gauged by the fact that currently about

40-42 million people have been brought under insurance whereas the potential is


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estimated at 200-250 million. Insurance companies could tap only 5 percents of

Indian middle class segment.

In India, insurance is generally considered as a tax-saving device instead of its

other implied long-term financial benefits, Indian people are prone to investing in

properties and gold followed by bank deposits. They selectively invest in shares

also but the percentage is very small4-5%. Even to this day, Life Insurance

Corporation of India dominates Indian insurance sector.With the entry of private

sector players backed by foreign expertise, Indian insurance market has become

more vibrant. In India, motor vehicle insurance premiums 2.5 percent of the

vehicle cost against international standard of 6 percent Indian federal government

considers insurance as one of major sources of funds for infrastructure

development. The government has identified the following as major thrust areas:

Timely and reliable statistical data and information about polices and market to

instill a degree of credibility; a code of good practices based on international best

practices to raise standard of Indian insurance sector.

Strengthening of supervision and regulation; Market participation in decision

making; high solvency standard and developing alternative channels. Till end of

1999-2000 fiscal year, there were only two state-run insurance

companies(LIC,GIC).

LIFE INSURANCE

ENDOWMENT ANTICIPATE

D

ENDOWMENT

TERM ANNUITY ULIP


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-Save and protect-Secure Plus

-Cash backSmart kid-Cash plus

-Life GuardSingle premium

Return of

premium

W/o return

ofpremium

1 Forever Life2. LIFE TIMEII pension3. Life link

pension

4 Secure pluspension

1. LifeLink

2. LIFETIMEII

3. ULIP

Smartkid

CONCEPT OF INSURANCE

The concept of insurance is that people exposed to the same risk come

together and all shares loss suffered by a few.

The insurance companies play a role of implementing the said concept ---

control in advance the shares in the shape of premiums and create a fund

out of which loss is paid.

In the context of insurance in the event of the death of the bread earner, the

family income stops suddenly.

The family income also stops on the retirement of the bread earner.

Life insurance covers the contingencies and provides relief to the family

members in the event of death or retirement of the bread earner.

Insurance covers the risk of dying to early and living to long.

Life Insurance:--


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Life insurance is a contract where the person requiring and insurance pays a

consideration / premium to maintain a policy and the insurer promises to pay a sum

assured or a guaranteed amount on the happening of an eventuality. If no

eventuality occurs then the insured may be eligible for some bonus also.

Various needs of life insurance can be:

1. Protection of the interest of the family member.

2. Provision for education and marriage of the children

3. Post retirement income for self and dependents

4. Special needs for medical expenses.

5. Provision for health /illness.

6. Provision for housing.

7. Provision for income tax rebate.

BENEFITS OF LIFE INSURANCE

Insurance not only serves the ends of individuals or of special groups of

individuals but also is advantageous to the society as a whole.

Benefits to the individual:

Superior to any other saving plans

Unlike any other saving plan, a life insurance policy affords full

protection against risk of death. In the event of death of a policy holder, the

insurance company makes available the full sum assured to the near and dear of


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policy holder. In comparison, any other saving plan would amount the total saving

accumulated till date. If the death occurs prematurely, such saving can be much

lesser than sum. assured. Evidently, the potential financial loss of the family of the

policy holder is sizable

Encourages and forces thrift

A saving deposit can easily be withdrawn. The payment of

Life insurance premiums, however, is considered sacrosanct and is viewed with

the same seriousness as the payment of interest on a mortgage. Thus, a life

insurance policy in effect bring about compulsory saving.

Easy settlement and protection against creditors

A life insurance policy is the only financial instrument , the

proceeds of which can be protected against the claims of a creditor of the assured

by affecting a valid assignment of the policy.

Administering the legacy for beneficiaries

Speculative or otherwise , expenses can quickly cause the

proceeds to be squandered. Several policies have foreseen this possibility and

provide for payment over a period of years or in a combination of installments and

lump sum amounts.

Ready marketing and suitability for quick borrowing


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A life insurance policy can, after a certain period (generally Three

years ), is surrendered for a cash value. The policy is also acceptable as a security

for commercial loans, for example, a student loan.

Disability benefits

Death is not only hazard that is insured; many policies may include

disability benefits. Typically, these provide for waiver of future premiums and

payment of monthly installment periods.

Accidental death benefits

Many policies can also provide for an extra sum to be paid (typically

equal to the sum assured) if death occurs as a result of accide

Tax benefits

Under the Indian income tax act, the following tax relief is available

1. 100% of the premium paid is deductible from your total taxable income under

section 80C up to one lac.

2. The structured benefits paid to the customer will be eligible for tax benefits

under sec. 10(10D).

When these benefits are factored in, it is found that most Policies offer returns that

are comparable /or even better than other saving modes such as PPF, NSC etc.

moreover, the cost of insurance is a very negligible.

Benefits to business


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Insurance results in business continuation and welfare of

employees. Uncertainty of business losses is reduced by insurance

Benefits of society

The welfare of the society is protected. Insurance results in

economic growth of the country and reduction in inflation.

The second reason behind buying of life insurance is protection i.e.

they buy life insurance to protect their families in case of any mishappening.

The third reason behind buying of life insurance is the saving i.e they tend to save

money at the same time they want to get protection.

The fourth reason behind of life insurance is investment. This is only for

those persons who have high income and have lots of money with them.

So, from the above graph we found that till now the main reason behind buying of

life insurance is Tax saving. But the views have started changing now. With the

coming of private companies in this sector, people have started changing their

views and have started going toward the protection. And they wanted to protect

their families in case of any mishappening.

FUNDAMENTALS OF INSURANCE: -

The fundamental (principles) of insurance are as follows:

Insurable Interest

Proximate cause

Contribution


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Subrogation

Utmost good faith

PROXIMATE CAUSE

Generally, the claims are payable under insurance policies if they arise out of

events which are approximately caused by the insured perils. In other words, the

proximate cause of the event has to be perils covered by the policy, so as to

constitute valid claims.

CONTRIBUTION

An insured may have several insurances on the same subject matter. If he recovers

his loss under all these insurances, he will obviously make a profit out of loss. This

will be an infringement of the principle of indemnity. Common law has, therefore,

evolved the doctrine of contribution whereby the insured is prevented from

recovering more than his loss, despite his loss, despite his having several insurance

on subjectmatter.

SUBROGATION

The principles of indemnity seek to prevent the insured from making profit out of

loss. However, it may so happen that the insured may recover his loss under his

policy and he may also have rights against third parties. If after the insurance

claims is settled, the insured is allowed to ensure his rights against third parties and

to retain whatever damages he receives from them he will certainly make a profit


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and the principles of indemnity. Will be infringed. Common law has therefore,

evolved the Doctrine of subrogation as corollary to the principles of indemnity.

Subrogation may be defined as the transfer of right and remedies of the insured to

the insurers who have indemnified the insured in respect of the loss.

UTMOST GOOD FAITH

Insurance requires the insured to voluntarily disclose, accurately and fully, all facts

material to the risk being proposed, whether requested or not. The insurer needs to

be aware of all the details of the health, family, history, habits and other facts about

the proposer.

INSURABLE INTEREST

Insurable interest exist if the policy owner or the nominee is likely to benefit

financially if the insured continues to live and is likely to suffer from an economic

loss, if the insurer dies. A person may take a life insurance policy on his life to

provide financial security to his family. .

OBJECTIVES OF RESEARCH STUDY

Rohtak being a big part of the financial network in India consists of

a large number of financial Institutions. The primary purpose of the project was to

study the insurance industry scenario. We further aimed at studying and comparing

the lifelong plans offered by different insurance companies.

MAIN OBJECTIVES

To get an insight into the entire array of the insurance market.

To conduct a comparative study to review the product features of the other

market players.


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To make a strategy towards creating customers for the products.

Research Methodology

With an ever increasing complexity of market and business activities the

collection and analysis of data of service sector has become much more

complex. It involves a study of buying behavior, increase in sale of

LIFETIMEII, brand preference, sales promotion and products sold by

competitors both in public as well as private sector.

TYPES OF RESEARCH

The basic types of research are as follows:


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1. Descriptive vs. Analytical: Descriptive research includes survey and fact

finding equines of different kinds. The major purpose of descriptive

research is description of the state of affairs, as it exists at present. In

social science and affairs as it exists at present. In social and business

research studies. The main characteristic of the method is that the research

has no control over the variable: he can only report what has happened or

what is happening. Most exposit factor research projects are used for

descriptive studies in which the researcher seeks to measure such items.

2. Applied vs. Fundamental: Applied research aims at finding a solution

for an immediate problem facing a society of an industrial/business

organization, whereas fundamental research is mainly concerned with

generalization and with the formulation of a theory.

3. Conceptual vs. Empirical: Conceptual research is that related to some

thinkers to develop new concepts or to reinterpret existing ones. One the

other hand, empirical research relies on experiences or observation alone,

often without due regards for system and theory.

4. Some other Types of Research: Such research follows case study

methods or in-depth approaches to reach the basic causal relations. Such

studies usually go deep into the cause of things or events that interest us,

using very small samples and very deep probing data gathering devices.

The research may be exploratory or it may be formalized. Exploratory

research is the development of hypothesis rather than their testing,

whereas formalized research studies and those with substantial structure

and with specific hypothesis to be tested.

Research Design


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A research design is the arrangement of condition for collection and analysis of

data in a manner that aims to combine relevance to the research purpose with

economy in procedure.

Research design is divided into the following parts:

1. the sampling design- methods of selecting items to be observed

2. the observational design relates to the condition under which the

observations are to be made

3. Statistical design it is concerned with the observation and analysis

of the data.

4. The operational design the techniques by which the procedures like

sampling observational designs etc. can be carried out.

SIGNIFICANCE OF RESEARCH

All progress is born of inquiry. Doubt is often better than over confidence

for it leads to inquiry, and inquiry leads to invention. Increased scientific and

inductive thinking and it promotes the development of logical habits of thinking

and organization.

Research has its special significance in solving various operational and

planning problems of business and industry. Research, along with motivational

research, are business decisions, Market research is the investigation of the

structure and development of the market for the purpose of formulating efficient

policies for purchasing, production and sales.


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COLLECTION OF DATA

Data can be colleted in two ways primary and secondary

Primary Data

The data collected and gathered from these sources is assembled specifically for

the research project at hand. The data collected is a fresh and for the first time and

thus happened to be original in character. It is used for satisfying various

marketing research objective

(a) Personal interview:This method involved asking questions generally

in a face to face contact to potential customers (data for them was

collected initially) It was in the form of direct personal investigation .In


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this case the interviewer collected the information personally from the

sources concerned .The interviewee was allowed to ask questions from

the interviewer regarding his doubts Interviews were formal or informal

depending upon their nature and the person being interviewed

.Following points were kept under consideration:

Planning the interview

Preparation of questions before hand

Not to make interview hasty

Focusing on substance

Accuracy of subject

(b) Questionnaire- A questionnaire consists of a number of questions

printed or typed .In a definite order on a form or set of forms. The

questionnaire was mailed to potential customers . They were to answer

the questions on their own.

Main aspects of Questionnaire:

(1) Structured questionnaire

(2) Clear and smooth moving sequence of questions

(3) Simple and easy wordings

(4) Relevant questions

All the personal details were kept confidential.

Secondary Data

The data for these sources is that which have been previously collected for

some project other than at hand. The data colleted is historical in nature .It is


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the data which you dont have collected yourself but is already available. Some

of these sources are:

(a) Advisors manual

(b) Product module

(c) Insta Quote

(d) State Records

(e) Internal Reports

(f) Financial reports

(g) Published industry data.

Sampling Unit: The elementary units or the groups cluster of such units may form

the basis of sampling process in this case each potential customer is our sampling

unit.

Sample size : My objectives was to study the concept of life insurance plans and

to have an idea about acceptance of life insurance plans. The sample size of the

study was 100.

Technique of sampling: Convenience sampling was the technique adopted for

sampling and the size varied from area to area.

Analysis of information: The information was analyzed with the help of pie

charts and graphs to reach at conclusions. For that editing, tabulation and

interpretation of data was done.


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Editing: It involves a careful scrutiny of the completed questionnaires and or

schedules. It is the process of examining the collected raw data to detect errors and

omissions and to correct these when possible.

Tabulation: It involves arranging the data in concise and logical order. It involves

summarizing raw data and displaying the same in compact form.

Interpretation: It involves drawing the ultimate interferences and reaching to the

conclusions.

DATA ANALYSIS


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Do you know what is insurance?

Respondents 100

Yes 95

No 5


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What factors you consider most important ?

Safety 9

Liquidity 3

Profit/growth 60

Tax benefits 20

Regular returns 8


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What is your investing pattern ?

Fixed amount each month 50Whenever i have a surplus amount 30

Fixed amount each year 20


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Have you heard of the icici prudential life insurance ?

Yes 70

No 30


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What do you think of insurance as an investment tool ?

Very necessary 6

Device for securing the future 78

Gives less returns 12

Kind of forced savings 4


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What should be the period of liquidy ?

10 years 2

5 years 8

3 years 20

less than 3 years 70


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Are other family member insured ?

Yes 35

No 65


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Would you like to take any insurance schemes in future

Yes 80

No 20


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COMPARISON BETWEEN TRADITIONALINSURANCE PLAN AND ICICI PRUDENTIAL LIFE

TIME II.

1.No flexibility to adjust yourprotection level with yourchanging life styles.

2. Control over the investment isrestricted and returns are not inyour hands.

3.No flexibility to change your

protection and investment levels.

4. Value of your investmentdepends upon bonus declared

by the company.

5.You cant change your lifecover over the period of yourlife style.

6.Premium payment term is

1.Total flexibility and control on your policy chooselevel of protection as per your life style

2.Total control over yourinvestment with the choice ofinvestments.3.Flexibility to change your

protection and investment levels.

4.You can create own value and in long run this turnsout to be cost effective.

5.You can change your life coverat different life stages.

6.Avail of the premium holidayfeature to stop paying the


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limited, so you stop paying thepremium after a period.

7.Cant increase yourContribution, if you have extraMoney.

8.All traditional plans have theSurrender value and after three

Years the minimum guaranteedSurrender value is 35% of the

Premium paid excluding the firstYear premium and supplementaryPremium paid. Thus if in aCircumstance the policyholderHas to surrender it will havea huge loss.

9.All traditional plans have highfirst year charges. These areusually in the tune of 60% or70% and in some cases evenhigher. Thus it takes longer forthe money to grow in atraditional plan.

10.Traditional insurance plansdo not provide control oninvestment. Money is invested as

per rules and laws laid down.The investment is not transparentAnd the policyholder has nooptions to monitor the investments.

premium and your policy stillcontinues.

7.Flexibility to increase yoursavings anytime with help of top-ups.

8.LIFETIMEII has no surrender value and after 3 yearsif the policyholder wants to exit from the plan-the exitcan happen atmarket price which is completeand time value of the units.

9.LIFETIMEII has a lower cost ofinvestment. The 20% first yearcharges is the lowest assetacquisition cost amongst allinsurance plans. This makesLIFETIMEII a value for money planas more money goes towardsinvestment from the beginning.

10.LIFETIMEII gives control to thepolicyholder over theinvestments. The policyholderdecides where, when and how isyour money be invested. Thereare three funds that enable the

policyholder to invest as per thereturn desired and can build a

personal risk-return profile.

LIFE TIME II Birla Sun life Classic life

Features LIFETIMEII Birla Sun life Classic Life

Age 0-60 years 1-65years

Term Choice resets with the consumer with aminimum premium payment term of 3years

Choice rests with the customerwith a minimum premium paymentterm of 3 years.

Sum Assured Two levels: Level 1- A multiple of theannual contribution chosen by the

policyholder. A minimum multiple of 7

or a maximum multiple of 150,

Depends on the contribution


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depending on the age. Level 2.- SumAssured can be increased with anincrease in responsibility and need forinsurance .this increase will be 15% ofthe initial Sum Assured every year fromthe 3rd policy anniversary till the 9th

policy anniversary. However each

increase cannot be more than Rs 300000.The maximum age for entry into thisoption is 35 years.

Survival Benefit Value of units (3rd year onward Value of units

Death benefit Higher of Sum Assured or value of units.However, the value of units will betreated as death benefit if the LifeAssured is less than 7 years of age ormore than 70 years of age.

Higher of Sum Assured or value ofunits. However, the value of unitswill be treated as death benefit ifthe life assured is less than70Years. Of age.

Withdrawalbenefit

Partial or complete withdrawals areavailable from the 3rd year onwards

Partial or complete withdrawals areavailable from 3rd years. Onwards.In a year 2 withdrawals are free ofcharge for every additional chargeof Rs. 100 will be levied

Contribution Minimum: Rs: 18,000 p.a Minimum premium of Rs.25,000. p.a.

Flexibility toincrease /or Decrease YourContribution

The maximum decrease in the premiumscan be unto 20% of the initial premiumchosen by the policyholder at the time ofinception of the policy, However, in nocircumstances can be premium be

reduced to below Rs.18,000 or 80% ofthe initial chosen premium, whichever ishigher. However, there is no capincreasing the premium. The premiumscan be increased with or without theincrease in Sum Assured

Not available

Investmentoptions

Maxi miser, Balancer, Protector Preserver

Protector, Builder Enhancer, creator

Increase/decrease of Death

benefit

Available. Any increase in Sum assured,is subject to underwriting.

Available

Bonus units Declared as a % of unit value. Paid at theend of 4th, 8th,and 12tth policy year. Theallocation of the units would only bemade if the annual contribution till thatdate were made in total.

Loyalty additions in the form ofadditional units will be credited to

policy fund at the end of the 10thpolicy year. And at the and ofevery 5th year thereafter


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Charges- 1%of top up top-up

Switch 4 free switch a year, with minimumswitch amount being Rs. 10,000

In a year two switches are free.Every additional switch will becharged at .25% of the fundstransferred.

Features LIFETIMEII Birla Sun life Classic Life

Surrender Value The policy will acquire a surrender valuefrom the 1st year onwards. Thesurrender value available to the

policyholder is as follow: After 1 yearspremiums is paid:25% of the unit value.After 2 years premiums are paid: 40% ofthe unit value. After 3 years premiumare paid: 60% of the unit value and after4 years premiums are paid: 100% ofunits value.

The Surrender charges levied willdiffer from year- year-1 75%:Year 2- 60%: Year 3- 40%: year 4-20%, from year 5 onwards therewill not be any Surrender charges

Automatic coverContinuance Available after the first 3 yearspremiums have been paid. Can beavailed upto a maximum of 2 years at atime in the first 10 years of the policy,the consumer can avail of the automaticcover continuance without any timelimitations.

Available

Initial Charge % Allocation of the premium Charges

18000-35999:1st year-81%;2nd-5th year-96%;6th-10th year-98%;11th yearonwards-99%

Rs. 25,000 to Rs. 49,999; 1st year:15%; subsequent years; 4%


Rs year; 14%; subsequent years;4%

1,00,000-4,99,999:1st year-85%;2nd-5th

year-96%;6th-10th year-98%;11th yearonwards-99%

Rs. 1,00,000 and above: 1st years;13%; subsequent years; 4%

5,00,000++ : 1st year-88%;2nd-5th year-96%;6th-10th year-98%;11th yearonwards-99%

Admin Charge Admin Charge of Rs. 60/ month. Policy admin fees of Rs. 60 per month.

Other charge Not applicable A charges of Rs. 2 per thousand ofthe face amount will be deducted inthe first policy year.

Bid-offer spread Not applicable Not applicable

Fund managementcharge

The annual investment charge is 1.50%for maxi miser, 1.00% for balancer,0.75% for protector and preserver.

Investment mgmt fee of 1 per centper annum for protector, Builderand Enhancer funds and 1.25 percent for the Creator fund.

Riders ADBR, WOPR, CIBR MSAR Term/ ADBR/ CIBR


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LIFE TIME II# Birla Sunlife Flexi Save Plus

Features LIFETIMEII Birla Sun life Flexi Save Plus

Age 0-60 years 30 days 65years


As per policy term-5, 10,15,20,25,or 30 years or as per maturity age

15,20,25,30,35 years for minorsand 60,65,70,80, years for adults


policyholder. A minimum multiple of 7 ora maximum multiple of 150, dependingon the age. Level 2.- Sum Assured can beincreased with an increase inresponsibility and need for insurance .this

increase will be 15% of the initial SumAssured every year from the 3rd policyanniversary till the 9th policyanniversary. However each increasecannot be more than Rs 300000. Themaximum age for entry into this option is35 years.

Minimum: Rs. 50,000 for minorsand Rs. 75,000 for adults

Survival Benefit Value of units (3rd year onward Value of units (3rd year onward).

Death benefit Higher of Sum Assured or value of units.However, the value of units will be treatedas death benefit if the Life Assured is less

than 7 years of age or more than 70 yearsof age.

Face amount + Policy Fund(Where the policy is bought on or

prior to the 1st birthday of the life

insured, only Policy fund ispayable to the policy owner in theevent of death of the life insuredwithin the first policy year).

Withdrawalbenefit


Partial or complete withdrawalsare available from 3rd years.Onwards. In a year 2 withdrawalsare free of charge for everyadditional charge of Rs. 100 will

be levied

Contribution Minimum: Rs: 18,000 p.a Subject to a minimum face amount

of Rs. 50,000 for minors andRs75,000 for adults


The maximum decrease in the premiumscan be unto 20% of the initial premiumchosen by the policyholder at the time ofinception of the policy, However, in nocircumstances can be premium be reducedto below Rs.18,000 or 80% of the initialchosen premium, whichever is higher.However, there is no cap increasing the

premium. The premiums can be increased

Not available


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with or without the increase in SumAssured

Investmentoptions

Maxi miser, Balancer, Protector Preserver

Protector, Builder

Increase/decrease of Death

benefit

Available. Any increase in Sum assured,is subject to underwriting.

Can be done once in every 5 years.The minimum amount of changewill be Rs.50,000 This change will

result in a change in a change inthe premiums to be paid and will

be subject to the permissible limitsof minimum face amount

Bonus units Declared as a % of unit value. Paid at theend of 4th, 8th,and 12th policy year. Theallocation of the units would only bemade if the annual contribution till thatdate were made in total.

Minimum Guarantee of 3% P.a.On the premium net of all chargesand deductions.

Top-up Available. Minimum top-up of Rs,5000.Charges- 1%of top up. Not available

Switch 4 free switch a year, with minimumswitch amount being Rs. 10,000.

1 free switch per year. For everyadditional switch, a charge of Rs.1000 will be levied

Surrender Value The policy will acquire a surrender valuefrom the 1st year onwards. The surrendervalue available to the policyholder is asfollow: After 1 years premiums is paid:25% of the unit value. After 2 years

premiums are paid: 40% of the unitvalue. After 3 years premium are paid:60% of the unit value and after 4 years

premiums are paid: 100% of units value.

The surrender charges will be100% of the annualized premiumfor the first 24 months of the

policy. It will be 24% in month25 and will reduce by 1% every

month thereafter and will be zerofrom the 49th month onwards

Automatic coverContinuance

Available after the first 3 years premiumshave been paid. Can be availed upto amaximum of 2 years at a time in the first10 years of the policy, the consumer canavail of the automatic cover continuancewithout any time limitations.

Not available

Initial Charge % Allocation of the premium Charges


5 or greater term: 1st year 29.9%; 2nd year onwards: 5%

36000-99999:1st year-83%;2nd-5th year-96%;6th-10th year-98%;11th year onwards-99%

10 or greater term: 1st year --54.6%; 2nd and 3rd year:7.5%; 4th year onwards;5%


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1,00,000-4,99,999:1st year-85%;2nd-5th


15 or greater term: 1st year-65%; 2nd and 3rd year: 7.5%;4th year onwards: 5%

5,00,000++ : 1st year-88%;2nd-5th year-96%;6th-10th year-98%;11th year onwards-

99%

Admin Charge Admin Charge of Rs. 60/ month. Policy admin fees= Rs .22 per month

Other charge Not applicable An annual charge of Rs. 2.88 per thousand-face amount will bededucted in the first 10 years ofthe policy except in the secondyear where it will be Rs. 15.24

per thousand-face amount. From

the 11th years onwards thisannual charge will increasesubject to a maximum of 3.75%

per years

Bid-offer spread Not applicable

LIFETIMEII # LIC Bima Plus

Features LIFETIMEII LIC Bima Plus

Age 0-60 years 12-55 yearsTerm Choice resets with the consumer with a

minimum premium payment term of 3years

10 years


policyholder. A minimum multiple of 7 ora maximum multiple of 150, depending onthe age. Level 2.- Sum Assured can beincreased with an increase in responsibility

and need for insurance .this increase will be15% of the initial Sum Assured every yearfrom the 3rd policy anniversary till the 9th

policy anniversary. However each increasecannot be more than Rs 300000. Themaximum age for entry into this option is35 years.

Maxi miser limit unto Rs. 2lakhs

Survival Benefit Value of units (3rd year onward Bid Value of the fund units alongwith maturity bonus at 5% of theSum Assured

Death benefit Higher of Sum Assured or value of units. Death during the first 6 months-


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However, the value of units will be treatedas death benefit if the Life Assured is lessthan 7 years of age or more than 70 yearsof age.

30% of SA + value of units., next6 month- 60% of SA + value ofunits. Death after 1st years- SA +value of units. Death during the10th year-105%of SA + value ofunits.

Withdrawal

benefit

Partial or complete withdrawals are

available from the 3rd year onwards

Premature withdrawals allowed

after one year (after applying bid-offer spread.

Contribution Minimum: Rs: 18,000 p.a Not specified



premium. The premiums can be increasedwith or without the increase in SumAssured

Not available

Investmentoptions

Maxi miser, Balancer, Protector Preserver Balanced, secured Risk.

Increase/ decreaseof Death benefit

Available. Any increase in Sum assured, issubject to underwriting.

Not available

Bonus units Declared as a % of unit value. Paid at theend of 4th, 8th,and 12th policy year. Theallocation of the units would only be made

if the annual contribution till that date weremade in total.

Not available


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policyholder. A minimum multiple of 7or a maximum multiple of 150,depending on the age. Level 2.- SumAssured can be increased with anincrease in responsibility and need forinsurance .this increase will be 15% ofthe initial Sum Assured every year

from the 3rd policy anniversary till the9th policy anniversary. However eachincrease cannot be more than Rs300000. The maximum age for entryinto this option is 35 years.

Assured.

Survival benefit Value of units (3rd year onward Value of units

Death benefit Higher of Sum Assured or value of units. However, the value of units will

be treated as death benefit if the LifeAssured is less than 7 years of age ormore than 70 years of age.

Higher of Sum Assured or value ofunits. However, the value of unitswill be treated as death benefit if thelife assured is more than 70Years.Of age.

WithdrawalsBenefit


Partial withdrawals available fromthe 3rd year onwards. Provided thatthe value of Units does not go belowthe Sum Assured

Contribution Minimum: Rs: 18,000 p.a Minimum: Rs. 10,000p.a

Flexibility toincrease or decreaseyour contribution

The maximum decrease in thepremiums can be unto 20% of the initialpremium chosen by the policyholder atthe time of inception of the policy,However, in no circumstances can be

premium be reduced to below Rs.18,000 or 80% of the initial chosenpremium, whichever is higher.However, there is no cap increasing the

premium. The premiums can beincreased with or without the increase inSum Assured

Available

Investment option Maxi miser, Balancer, Protector Preserver.

5 Fund Options- DefensiveManaged, Safe Managed,Liquid Growth

Increase /decrease

of death benefit

Available. Any increase in Sum assured,

is subject to underwriting.

Not available

Bonus units Declared as a % of unit value. Paid atthe end of 4th, 8th,and 12tthpolicy year.The allocation of the units would only

be made if the annual contribution tillthat date were made in total.

Not available


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Features LIFETIMEII HDFC Linked

10,00,01,-50,00,00: 0.30%

50,00,01 and above: 0.35%

Top-up Available. Minimum top-up of Rs,5000.Charges- 1%of top up.

Available

Switch 4 free switch a year, with minimumswitch amount being Rs. 10,000.

Switches are free as of now. Butthe company reserves the right to

put a charge on the switches.

Surrender Value The policy will acquire a surrender valuefrom the 1st year onwards. The surrendervalue available to the policyholder is asfollow: After 1 years premiums is paid:25% of the unit value. After 2 years

premiums are paid: 40% of the unit value.After 3 years premium are paid: 60% ofthe unit value and after 4 years premiumsare paid: 100% of units value.

The surrender charge is 25% of 3years outstanding regular

premium. No charges after 3 yearspremiums grow.

Automatic coverContinuance

Available after the first 3 years premiumshave been paid. Can be availed upto amaximum of 2 years at a time in the first10 years of the policy, the consumer canavail of the automatic cover continuancewithout any time limitations.

Charges

Initial Charge % Allocation of the premium 1st yr-27% 2nd yr-27%, 3rd yr onwards- 1%


36000-99999:1st year-83%;2nd-5th year-96%;6th-10th year-98%;11th year onwards-

99%

1,00,000-4,99,999:1st year-85%;2nd-5th


5,00,000++ : 1st year-88%;2nd-5th year-96%;6th-10th year-98%;11th year onwards-99%

Admin Charge Admin Charge of Rs. 60/ month. Admin charges of Rs. 180 fixedcharge per annum,

Other charge Not applicable Not applicable.


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Bid-offer spread Not applicable Not applicable.

Fund ManagementCharge.

The Annual investment Charge is 1.50%for Maxi miser, 1.00% for Balancer0.75% for Protector Preserver.

Investment charge of 0.80% of theFund Value across all the funds.

Riders ADBR, WOPR, CIBR MSAR ABR CISR

LIFE TIME II # Allianz Bajaj Unit gain

Features LIFETIMEII Allianz Bajaj Unit gain

Age 0-60 years 0-60 years


Choice resets with the consumerwith a minimum premium

payment term of 3 years

Sum Assured Two level: Level 1- A multiple of theannual contribution chosen by the

policyholder. A minimum multiple of 7 or amaximum multiple of 150, depending onthe age. Level 2.- Sum Assured can beincreased with an increase in responsibility

and need for insurance .this increase will be15% of the initial Sum Assured every yearfrom the 3rd policy anniversary till the 9th

policy anniversary. However each increasecannot be more than Rs 300000. Themaximum age for entry into this option is35 years.

Minimum Sum Assured is 5 timesthe premium paid. Maximum SumAssured is as per the limits set perage bands.

Survival benefit Value of units (3rd year onward Value of Fund at Bid price.

Death benefit Higher of Sum Assured or value of units.However, the value of units will be treated

Higher of Sum Assured or value ofunits. However, the value of units


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as death benefit if the Life Assured is lessthan 7 years of age or more than 70 years ofage.

will be treated as death benefit ifthe Life Assured is less than 7years of age or more than 70 yearsof age.

WithdrawalsBenefit


Partial or complete withdrawals atbid price after 3rd year.

Contribution Minimum: Rs: 18,000 p.a Minimum: Rs. 10,000p.a.

Flexibility toincrease or decrease yourcontribution


premium. The premiums can be increased

with or without the increase in SumAssured

Only an increase in contribution isallowed.

Investment option Maxi miser, Balancer, Protector Preserver.

Equity Fund, Debt Fund, BalancedFund, Cash Fund

Increase /decreaseof death benefit

Available. Any increase in Sum assured, issubject to underwriting.

Available


Bonus units Declared as a % of unit value. Paid at the endof 4th, 8th,and 12th policy year. The allocation ofthe units would only be made if the annualcontribution till that date were made in total.

Not available


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Surrender Value Available after the first 3 years premiumshave been paid. Can be availed up to amaximum of 2 years at a time in the first 10years of the policy, the consumer can avail ofthe automatic cover continuance without anytime limitations.

A selling / purchase pricespread of 5% will be applicablefrom the 3rd years onwards

Automatic cover

Continuance

% Allocation of the premium Available after the 3rd policy

yearInitial Charge 18000-35999:1st year-81%;2nd-5th year-

96%;6th-10th year-98%;11th year onwards-99%

Charges


1st year-70%; 2nd year 2%;3rd year- 1%; No charge fromthe 4th year onwards

1,00,000-4,99,999:1styear-85%;2nd-5th year-96%;6th-10thyear-98%.


1,00,000-4,99,999:1st year-85%;2nd-5th

year-96%;6th-10th year-98%;11th yearonwards-99%.

Admin Charge Admin charge of Rs. 60/ month. Annual admin charge of 1.25% p.a of net assets

Other charge Not applicable Transaction charge of 0.5% of theequity investment and 0.1% of the

debt investments.Bid-offer spread Not applicable The bid-offer spread is 5% of the offer price.

FundManagementCharge.

The annual investment charge is 1.50%for maxi miser, 1.00% for balancer ,0.75% for protector and preserver.

Annual investment charge of 1% p.a.of net assets.

Riders ADBR, WOPR, CIBR MSAR ABR/ADBR/CI/Hospital Cash Benefit

FINANCIAL PLANNING:

All of us want to save for a rainy day. We want our money or investment to:

(i) Give the best possible return and

(ii) Be available to us when we require it.

Financial planning makes this possible. Financial planning is an attempt to

maximize returns keeping in mind the liquidity and security of our investment.


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The three basic principles (guiding factors) of financial planning are:

Setting realistic financial goals

Starting investments early

Thinking long term while allowing for short-term needs that may arise.

One plus lump sum of money to

(a) Produce income.

(b) Increase the capital

One can invest money only when one possesses it, which is possible by saving

systematically. Selecting a good saving scheme can do this.

Feature of a Good Saving Plan

(a) Safety

(b) Flexibility

(c) Should have incentive to save continuously without default.

(d) Tax saving

(e) Should fulfill financial objective even in case of death.

Features of an ideal Investment Scheme

(a) Safety

(b) Liquidity

(c) Higher Yield

(d) Capital growth

Safety: refers to financial soundness of investment.

Liquidity: means quickness with which an assets can be converted into cash

whenever required.

Yield: is the amount of money that an investment is expected to earn.


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Similarly an increase / decrease in the tax rate also affects our return on

investments. Any return, which is not taxable, will be preferred to those on which

taxes have to be paid.

A good investment is that which earns decent returns after providing for taxes and

inflation.

However, there is no single wonder investment, which can have all the above

features. One cant have windfall gains of stock market with the safety of

Government securities or the life cover and tax concessions of life insurance, all in

one.

A prudent person should look for those investments, which offer the ideal solution

to his personal needs under his own set of circumstances.

High Returns and Best Returns

(i) These are not necessarily the same.

(ii) High returns may be offset by risk to capital.

(iii) Best returns should be determined by the advantage an investment offers.

The Investors Approach

Investors approach can be conservative (safety is of utmost importance),

enterprising (willing to take some risks) or speculative (willing to take high risk in

order to gain high returns). The investors approach is related to a host of personal

factors such as:

a) Age and family

b) Future responsibilities

Comparison of LIFE TIME II with other Investment Modules

1. PPF/EPF


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a)Security- it provides a large amount of security because there is fixed high

returns which is promised at the time of creation of this fund.& the money is

invested in govt. securities.

b)Rate of return- It has moderate returns i.e 8% p.a which is comparatively

higher than other investment modules overt able in the market FDS etc.

c)Liquidity- It is not good term of liquidity as an investor can withdraw his

investment offer 6 years that too 50% of what he had invested in first 3 years.eg-a

person deposits Rs. 50,000 per year. The lock in period is 15 years & total amt. is

Rs. 7,50,000.

Case 1- if he wishes to withdraw money for some unknown liability then he can

withdraw only 50% of his investment of first 3 years that too after 6 year.

Amt deposited in 6 years= 50,000x6=Rs. 3,00,000

(amt deposited in first 3 years)= 150,000

50% of deposit after 3 years = 150,000x 50/100

Amt annually withdrawn = Rs. 750000.

Hence, this module has moderate liquidity.

d) Flexibility- As the lock in period is 15 years one has to incur heaving losses in

case the fund is surrendered before 15 years. Hence this is least flexible.

e)Tax Benefit PPF provides tax free returns and the contributions made are also

eligible for income tax relief under section 88 within the prescribed limit

2) NSCS:

It stands for National Saving Certificates .It is the scheme started by

government of India for encouraging saving habits of general public.

a) Security -It has a high rate of security as it promises to double your money

in eight years and seven months.


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b) Rate of return It having moderate returns i.e. 8% compared to shares

and debentures.

c) LiquidityIt has moderate liquidity because it has a lock in period i.e. of 6

years very conservative mode of investment.

d) Flexibility No flexibility as there is any provision to withdraw before

maturity i.e. after 6 years.

e) Tax benefits It qualifies for tax rebate under sec88.

3. Mutual funds principle involved

a) Large number of individuals pools their money in a single fund.

b) The funds are invested through the expertise of professional managers in

shares and securities.

c) The investments made are divided into segments called units.

d) One can buy or sell any number of units on current day price.

e) Undisclosed investments and profits.

Salient features

a) Security it has moderate security because it is sensitive to fluctuations in

stock exchange.

b) Rate of return it has moderate return i.e. 8%

c) Liquidity it has high liquidity as it can be sold in stock exchange whenever

there is a need of cash.

Flexibility as it has moderate flexibility because we can just get promised,

return even if the company is earning more

.Tax benefits


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a) It does not have a front-end relief under section 88. it enjoys rear-end

relief under section 80L that means deduction up to a maximum limit

of Rs. 15000 out of which Rs. 3000 is dedicated to income from units

of mutual funds.

b) Under section 10(33) of income tax act, income distributed in new

plans of unit trust is completely tax-free.

c) For equity linked saving scheme issued by UTI of India mutual fund

subscription up to Rs. 10000 is allowed under section88 of income tax

act, 1961.

4. Bank deposit scheme

a) Security it has high security as bank is paying regular interest on your

savings and it is not subject to much change in interest rate.

b) Rate of return

a) Current a/c - no interest

b) Saving a/c

1) Nationalized bank pay up to 3.5%

2) Cooperative banks pay half to 1% more

c) Term deposit a/c rates vary as per the period of investment but

roughly it is 8% for 3 years.

c) Liquidity the liquidity is very high as whenever you can take your

money back but that again is not free from a considerable loss.

d) flexibility There is no flexibility as compared to mutual funds and

insurance.

5. STOCKS :-


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Joint Stocks Company raises financial researches by issue of

shares. The amt. of capital to be raised is limited into units of equal value called

share. Those who subscribe to the capital are called shareholders.

Types of Shares:-

i) Equity shares-

ii) Preference shares.

The company pays divisional to the shareholder as per the profit earned by the

Company. It is not obligatory to pay divisional even if the Co. makes profit.

a) Security- Stocks have a minimum security because they are subject to

change with stock exchange Risk factor is nigh because the investment is

just in one company.

b) Returns- As it directly related to a performance of the Co. in share market

It can fetch very good returns best it can lead to no returns with the loss of

Principal amt at the other end.

(c )Liquidity: - They are highly liquid a that means it can be readily converted into

cash at any point of time.

(d) Flexibility: - It is very flexible in nature company as of investment. You can

change the amt. Of investment in them any time, as compared to PPF and NSC.

e)Tax Relief:- Front end relief -Nil

Rear end relief Divisional amt is tax free within certain limits.

(6) Real Estate:-

(a)Security-- High security.

Since the value of land and building rarely depreciates rather it appreciates. As In

contract to shares, which are hardly, served.


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(b) Returns: - It has moderate return because it has a very high Initial investment

comparative. To returns that are expected after a long time.

(c) Liquidity It has a low liquidity. Because it is not always possible to find

appropriate market at a given time.

(d) Flexibility There is as such no flexibility.

(e)Tax Benefits:- There is no relief under Taxation, Norms the Investments & the

returns there after attract nigh taxes to be paid.page.

7) Life Time:

It is an investment cum Insurance module provided by PPCI. It

occupies major Portion of companies profit. It is a market diverse insurance

plan.

Security- It provides very high security that is the life of a person is hundred for a

substantial amount.

Returns:-It provides very high returns that are expected to be with in 12-15%

keeping in mind the growth of the Company IPRU. More over as it is market

linked plan its returns are subject to the rise in share market & now well the fund is

managed by the co. you are investing in.

Liquidity:- It is highly liquid (it can be convertible in to cash)Almost the full amt

of the policy value can be after lock in period of just 3 years.

Flexibility: - It is very. Flexible. As the amt of investment can be raised any time

in the form of Top up by just paying a nominal charge for it or you can also

surrender the policy after 3yrs of premium. & Get the full policy value .You may

never pay the premium after 3 yrs. & your life cover will continue. Till we age of


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70 years & your fund will keep on growing as per the performance of the

Company:

Tax Benefits:- It enjoys Tax Benefits under & 68(10(10(D), 80ccc .

Special Point:- It Provides Life cover along with all other benefits mentioned

above.

FINDINGS

1. I found that ICICI is not as accessible as is required in the semiurben and

rural areas.

2. LIFE TIME II is having higher premium.

3. LIFE TIME II is having higher administration charges as compared with

other investment modules.

4. Lack of knowledge about customer requirements.

5. It is difficult for working class to spare time for training so these sessions

should be adjusted on weekends and holidays.

Swot analysis:

Strengths:

1. Liquidity: By definition the term liquidity means availability of funds as

and when required .now, this is a very important feature when it comes to

investment .LIFETIMEII as an investment module offers complete


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liquidity after a very short lock in period of 3-4 years .The proponent if

requires funds, he may withdraw any amount from the policy value as on

that date along with that he also has an option to continue the policy with

all the benefits intact.

2. TAX ADVANTAGE: One of the basic aims behind saving and investment

is tax benefits. LIFETIMEII as an insurance product offers benefits under

section 80C of income tax act. To add to that all the withdrawals, complete

as well as partials, attract no tax deductions that is the withdrawals are

totally tax free.

3. PREMIUM HOLIDAY: By premium we mean the amount that a person

pays in installments annually, half yearly etc. against a life insurance policy

. In the present scenario the uncertainties in life are variable and imminent.

Under a particular case the proponent might just not be able to pay his

annual premium. LIFETIMEII offers an option in such a case the proponent

may not pay the premium also. The policy cover continues even if the

premium is not paid.

4. FLEXIBLE SUM ASSURED: Our needs , securities as well as

insecurities vary with time and so should our life insurance and the cover

against risk that we take. LIFETIMEII again offers a brilliant solution by

giving an option to increase or decrease the sum assured or the risk covered

as required under specified conditions.

5. INVESTMENT SWITICHING OPTION: Returns against our

investment is one of the chief parameter. Fluctuations share markets and

lower interest rates in govt. securities dont allow us to have consistent

higher returns on our investment .Thus we require an option to reap the


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benefits of favourable conditions. LIFETIMEII enables the proponent to

switch the funds in equity as well as as govt. securities .The name of the

funds being MAXIMISER (equity), PROTECTOR (govt.securities) ,

BALANCER (combination of govt.securities) .

6. WHOLE LIFE: LIFE TIME II offers life insurance cover to a person

right from the time he / she is born till the time he survives .Whereas in

other insurance products there is a specified entry age and also an age when

the policy ceases.

7. TRANSPARENCY OF INVESTMENT: Investment in private

companies attracts a bio question of faulty fund management. Here in

LIFETIMEII the various charges i.e. administration charges, Fund

management charges , mortality charges are disclosed right before the

premiums are collected.

8. FLEXIBILITY: Needs being a function of circumstances the person might

need some monetary help at any point of time.LIFETIMEII offers

flexibility to withdraw any amount out of the invested funds .After a

specified lock in period as much as 100% of policy value at that point of

time.

WEAKNESS:

1. Withdrawals reduce your death benefit by the same amount: This can

be explained with the help of an example i.e. If a person has deposited

Rs.18000 p.a and the lifecover is Rs.200000 for the first 3 yrs .Then in 4 th

year he has withdrawn Rs.10000 which will reduce the sum assured by

10000 i.e. Rs. 190000.


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2. No fixed return : As this is an market linked insurance plan, It does not

promises any fixed return as in case with NSC , PPF etc.

3. Initial premium is on the higher side: The premium to be paid initially is

rs.18000, which is slightly higher side than the other market players. The

premium amount cannot be less than 18000 in this product.

4. Initial fund management and administration charges are high: The

fund management and administration charges are different from option to

option. For Maxi miser it is 1.25%, for Balancer it is 1.00%, for Preserver

and protector it is 0.80%. Whereas other market players are charging

around 1.00% on average. They have the same Charges for every

investment option.

5. Sensitive to stock exchange: The unit values are subject to the ups and

down in stock market. Therefore if the share market is on hike then the unit

value is very high whereas in case of depression in share market the unit

value can go down.

Opportunities:

1. To create awareness among masses: This means that as most of the

population in India belongs to villages and the literacy % is very small in

villages. Therefore the company has the opportunity to create the awareness

about the importance of insurance among masses.

2. It can be used as an investment tool: This product is more of an

investment tool then as just a insurance policy. As when we invest in any

other investment modules our amount of investment increases. Here not


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only the investment provides higher returns, but it can be used as a short

term as well as long-term investment option.

3. It can be used as an asset-building tool: Here it means that this type of

investment provides security as that of\an asset. As assets are created to

provide security in case of any mishappening i.e. they can be sold and there

value is expected to appreciate in near future.

4. It can be used as an key man insurance policy: Key man insurance refers

to the insurance of the key person in a company .As this type of insurance

provides high tax saving benefits. Private companies generally prefer it.

Threats:

1. Competition from public sector: As the only and biggest competitor is

L.I.C, which has a wide range of products can further stress on, their

marketing activities and can attract a major market share.

2. Competition from private players: Now in this age of cutthroat

competition every big company is coming into insurance sector in

collaboration with foreign companies thereby making the relevance of the

concept of survival of the fittest. To capture more and more market share is

the sole aim of every upcoming or existing company. At this point of time

there are as many as 13 companies operating in the city (chandigarh) , and

still there is hope of few more to come at the end of the year.

3. Sensitive to taxation norms: In India most of the people take insurance

not for their security needs but they take it as an tax saving device


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.Therefore there is a high effect of taxation norms on insurance sector .e.g

if the slab of income free from tax moves upto Rs.150000 then the people

who were initially covered under tax are free from tax .So no tax saving no

insurance.

RECOMMENDATIONS

1. Making ICICI more accessible: Here I mean that as 80% of the

population of India is rural therefore ICICI must have there branches in

important towns such as AmbalaCantt, Jagadhari, not only this will

increase the awareness among people more over it will help the company to

acquire local market and cater to their needs effectively.

2. There should be a product with similar features and low initial

premium: A product like LIFE TIME II in suitable for all but the initial

premium, which cannot be less than 18000 rs. is on the higher side ,

therefore the company should derive a product with similar features but

with low initial premium so that it is affordable to normal service class.

3. Administration charges should be low as in comparison with mutual

funds, national saving certificate (N.S.C),etc.: The company should

lessen down the administration charges so that this product can have an

edge over other investment modules like N.S.C, P.P.F etc.

4. Market surveys should be conducted regularly so that to know about

customer demands and changing needs: The company should know


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about the customers changing needs and demands by conducting market

surveys which are helpful in innovating a product which suits the

customers requirements.

Limitations of study:

Due to lack of time and other resources it was not possible to conduct

survey at a very large scale.

Examining a small part of population i.e 100 individuals collected relevant

information.

It was not possible to collect information regarding the recruitment of an

agent from other companies except ICICI as they kept it confidential

hence no comparisons regarding that could be made.

No fixed return as this is an market linked insurance plan, It does not

promises any fixed return as in case with NSC , PPF etc.


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CONCLUSION

In India, insurance is generally considered as a tax-saving device

instead of its other implied long-term financial benefits. Indian people are prone to

investing in properties and gold followed by banks deposits. They selectively

invest in shares also but the percentage is very small4.5%. Even to this day, Life

insurance market has become more vibrant . Smashing all doubts over the decision

to liberalize the industry, the overwhelming first year performance of the Indian

insurance sector is test case of a massive success story of private players entering

into the erstwhile state monopoly.

The top three insurance companies-ICICI Prudential Life Insurance Company,

HDFC Standard Life and Bajaj Allianz- combined managed to sell over two lakh

policies in a single year. ICICI Prudential, touted as the number one private life

insurer, scored on all three fronts-with the maximum number of policies sold (2.2

million policies), highest amount of premium collected (Rs. 11,608 crore).

Max New York Life scored second place with Rs. 43 crore Premium income

received on 64,000 whole-life policies sold. It has built business to the tune of


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Rs.2,100 crore in its first year of operations. HDFC Standard Life, even as it

belongs to the December 2001 vintage when it and ICICI Prudential were the first

to commence operations, is placed at number three positions. HDFC Standard Life

has sold 32,000.policies against 44,311 lives. On a business portfolio of Rs.1,266

crore, it has received a premium income of Rs. 36, crore.

Of course, the numbers come no where closed to the state Incumbent-the Life

Insurance Corporation of India (LIC) which sold 2.32 Crore policies in the fiscal

2002.The fiscal was marked by phenomenal growth rates for (LIC) as the number

of policies sold short up by over16 percent. the state player mopped up first

premium income from new policies sold to the extranet of R.S. 40,844.05 crore,

growth of 137 percent over its performance last fiscal. This is over an about the

regular yearly premium of R.s. 35,000 crore. At the same time, LIC has managed

to grow its books by underwriting an additional R.S. 1,92,575.36 crore of fresh

business. Tata AIG Life and non-life

combined has sold over five lakh policies in the first year. Birla Sunlife Insurance

has return a business size of R.S. 1,6,00 crore. Om Kotak Mahindra Life Insurance

received 13,000 .The contribution of the international partners has been in the

areas Of product development, laying down processor, training people. The broad

strategies as to what distribution change that one should look at,product Manu,

sport in the cop rate governance. There is a continuous streams of people coming

in from Africa to help us in putting the system in place, IT process, ways of doing

business in superior manner than what is being done today.

Insurance product has undergone a big change from the

days when LIC, s tied agency force a loan hawked products. In the days to come,

newentrants will implement multi channel strategies, the most significant being


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banc assurance, cop rate agency for selling of insurance product in financial

conglomerates.

The portfolio game has shifted and the average size of policies bought has

increased. The reason behind buying a risk cover has shifted .People are not

buying cover for the sake of tax break. They looking at safe guarding themselves

from the risk of dying to soon or living too long .Whole life and term insurance

policies are increasingly becoming more popular. Pre-liberalization, and

endowment and money back covers used to account for 82 to 85 percent of

policies sold by LIC.While things are going gung-ho for the industry as a hole,

there Are quite a few challenges a head before new players can hope to complete

With the state incumbent.

The first task is the new player build up reach the expend their geographical

spread. Only smalls portion of the country has been taped so far. Building the

agency force still a channel in terms of finding right people, training them to meet

the high industry standard today companies run on premium income ,which is the

cash flow. As a result more policies mean more course as cover need to be

serviced. The univalve per policies is a key element and gets reflected in the coast

ratio. On the other hand, if risk are too concentrated are need to guard against the

same, as it will mean writing many more policies to match the high claim should

one occur in the case of a high some assured policy.

The awareness level of Insurance has also brought about a certain amount of

selling and Marketing discipline. This is reflected in the fact that selling of life

cover is not skewed to March pressure, where earlier LIC used to repot 40 percent

of total Years figure in the month alone. Now selling spread across a wider Period

of time.


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Questionnaire

Name

Add

Age:

20-30 30-40

40-50 above 50

Sex: Male Female

Occupation: -_____________________

Telephone No: -___________________

Mobile No.: -_____________________

Education: - Undergraduate Graduate

PG

Marital Status Single

Married No. Of child/children

Income group Up to 75,000 p.a. 75,000-1,50,000 p.a.

1,50,000-2,50,000 p.a. 2,50,000 p.a.

1. What are the various avenues you invest in?

Savings account National saving

certificate (NSC) Insurance plans Bonds

Fixed deposits (FD)

Provident funds (PF) Shares Mutual funds


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2. What factors you consider most important ?

Safety Profit/growth Regular returns

Liquidity Tax Benefits

3. What is your investing pattern? I invest a fixed amount each

month I invest whenever I have a

surplus amount I invest a fixed amount each year

4. Have you heard of ICICI prudential life insurance company? Yes No

5 What do you think of insurance as an investment tool? It is very necessary

It gives less returns

As a device for securing the

future It is a kind of forced saving

6 What other areas do you think insurance can help you? Savings

Secure your future Investing surplus Provides tax benefits

Wealth creation

Secure the future of yourfamily

As a source of regular income

7 What is the period of liquidity to invest in?

10 years 5 years

Three year Less than three years

8 Are other your family members insured?

Yes o No

9 Would you like to any insurance schemes in f

icici pru[1].bhaushan

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