Professional Documents
Culture Documents
ACKNOWLEDGEMENT
INDEX
Serial No.
PARTICULARS
Page No.
CHAPTER
5-10
Executive summary
Introduction
Literature Review
Objectives
Research Methodology
Limitations
CHAPTER
11-52
Industry Introduction
Company Profile
Ulips
Mutual Funds
Ulips vs. Mutual Funds
CHAPTER
53-79
CHAPTER
80-84
Findings
Conclusion
Bibliography
5
CHAPTER
85-87
Appendix
Questionnaire
CHAPTER 1.
EXECUTIVE SUMMARY
A comparative Analysis of ULIP plans of Bajaj Allianz Life Insurance with mutual
funds an analysis to be done be by Harmanjot Kaur student (MBA) of MIMIT, Malout.
Total Investment scenario is changing, in past people were not interested in investment
because there were no good options available for investment. Now there are many
options available for investment like life Insurance, Mutual fund, Equity market, Real
estate, etc.
Today people want more services and more return on their investment. So, most of the
insurance companies are providing more value added services with the basic insurance
operation.
Another option for investment available is Mutual Fund. Mutual Funds are providing
good returns. So while investing people tend more to words mutual fund as they are
providing more returns than Insurance also, with a good investment portfolio. Mutual
fund companies are providing more liquidity.
The project was taken to know about, what are the main aspects in Bajaj Allianz Life
Insurance Company, and its USP (Unique Selling Preposition).Which gives it highest
business and customers. Customers always prefer to invest in a good option and in a
company which is market leader.
After survey and analysis I came to know that most of the people go for ULIP insurance
policies to cover the risk of life, and invest it in a good Portfolio but there is big portion
of customers have taken the policies to save the taxes. And people are aware about the tax
benefits they get for insurance policies. Therefore, while investing in any Investment
option investor checks whether his money is safe or not, Mutual funds provides good
returns but investments are directly exposed to risk. As in ULIP returns are related to
3
stock market but they are having some insurance benefit and IRDA regulates the
investment.
Many people are getting the tax benefits in ULIP. In Mutual Fund they have to invest
their money in tax saving funds to get the tax benefit.
INTRODUCTION
To make comparison of ULIP plans with Mutual funds in Bajaj Allianz Life Insurance
Co. Ltd. and to Create awareness about Unit Linked Insurance Plan (ULIP) Benefits. The
overall goal of this project was to create awareness about investments. The Above
problem arises because every life insurance company has their products having different
positive and negative aspects.
Life Insurance is booming sector in todays economy. So the responsibilities of the
insurance companies have been increased as compare to the past. Because in past people
were taking insurance policies for protection tool only. In present scenario insurance
sector is providing more services with the basic life insurance. Bajaj Allianz Life
Insurance has number of products, which gives the right way to save the money and earn
good profit by invested premium. Today people want more services and more return on
their investment. So this insurance company is providing more value added services
with the basic insurance operation.
By doing this type of study in this Insurance sector and looking at the vast scope and
opportunity to study this booming field of Life Insurance and the growing awareness
among the public regarding insuring their life through Life insurance policies as well as
the growing contribution of Insurance in GDP of country with the number of private
players making entrance in this booming industry of Insurance.
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciations realized are shared by its unit holders in
proportion to the number of units owned by them. Thus a Mutual Fund is the most
suitable investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost.
4
REVIEW OF LITERATURE
Mr.Madhu T, made a study on ULIPs hold edge over mutual funds. The findings shows
that distributors would push unit linked insurance plans (ULIPs) to earn better
commission. ULIPs offer attractive front-end commissions to agents. However,
independent financial advisors believe that though there is a possibility of some
distributors favoring ULIPs in the short term, the new directive would be beneficial for
both the industry and investors in the long run. (Mr.Madhu T, The Economic Times, June
2009).
Mr. Deepak Shenoy ,in his article Comparing ULIP returns to Mutual Funds, he reveals
that, over the last three years, their growth mutual fund has given better returns than the
"MAXIMISER" option of their ULIPs.(Deepak Shenoy, The Indian Investors Blog,
August 2006).
Mr.Murthaza and Sony, in their article An Overview on ULIP, This article is an initiative
from Bajaj Allianz to create better understanding of ULIPs and its benefits so that
investors can avail maximum returns from their investments.
Mr.Bernz Jayma P, made a study on Mutual Fund disadvantages. He suggested that, if
you're new to stock market investing you may have heard that mutual funds would be a
good way for you to get started. That's actually good advice, but mutual funds have their
own pitfalls to watch out for.
OBJECTIVES OF STUDY
To understand the reason for which customers prefer ULIP as one of the best
insurance investment mode rather than Mutual fund.
RESEARCH METHODOLOGY
Primary Data: - Primary data is that type of data which is collected for first time by
the researcher himself. I have collected primary data for my study by using
structured questionnaire that is filled by respondents.
Secondary Data: - Secondary data is already collected by someone for his own
purpose. I have used secondary sources like internet websites, magazines,
newspapers, pamphlets, and brouchers.
o Tables
o Pie-Charts
o Percentage analysis
LIMITATIONS
The middle class people do not know basic concept of ULIP so creating
awareness is a big challenge for me.
CHAPTER 2.
INDIAN INSURANCE INDUSTRY
The history of life insurance in India dates back to 1818 when it was conceived as a
means to provide for English Widows. Interestingly in those days a higher premium was
charged for Indian lives than the non-Indian lives as Indian lives were considered more
risky for coverage. The Bombay Mutual Life Insurance Society started its business in
1870. It was the first company to charge same premium for both Indian and non-Indian
lives. The Oriental Assurance Company was established in 1880. The General insurance
business in India, on the other hand, can trace its roots to the Triton (Tital) Insurance
Company Limited, the first general insurance company established in the year 1850 in
Calcutta by the British. Till the end of nineteenth century insurance business was almost
entirely in the hands of overseas companies. Insurance regulation formally began in India
with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act
of 1912. Several frauds during 20's and 30's sullied insurance business in India. By 1938
there were 176 insurance companies. The first comprehensive legislation was introduced
with the Insurance Act of 1938 that provided strict State Control over insurance business.
The insurance business grew at a faster pace after independence. Indian companies
strengthened their hold on this business but despite the growth that was witnessed,
insurance remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life insurers and
provident societies under one nationalized monopoly corporation and Life Insurance
Corporation (LIC) was born. Nationalization was justified on the grounds that it would
create much needed funds for rapid industrialization. This was in conformity with the
Government's chosen path of State lead planning and development. The (non-life)
insurance business continued to thrive with the private sector till 1972. Their operations
were restricted to organized trade and industry in large cities. The general insurance
industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and
grouped into four companies- National Insurance Company, New India Assurance
Company, Oriental Insurance Company and United India Insurance Company. These
were subsidiaries of the General Insurance Company (GIC).The general insurance
business was nationalized after the promulgation of General Insurance Business
(Nationalizations) Act, 1972. The post-nationalization general insurance business was
undertaken by the General Insurance Corporation of India (GIC) and its 4 subsidiaries:
Oriental Insurance Company Limited; New India Assurance Company Limited;
National Insurance Company Limited; and United India Insurance Company
Limited.
Some of the important milestones in the life insurance business in India are:
1850:
Non life insurance debuts with triton insurance company.
1870:
Bombay mutual life assurance society is the first Indian owned life insurer
1912:
The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928 :
The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938:
Earlier legislation consolidated and amended to by the Insurance Act with the objective
of protecting the interests of the insuring public.
10
1956:
245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956,
with a capital contribution of Rs. 5 Crore from the Government of India.
Some of the important milestones in the general insurance business in India are:
1907:
The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes
of general insurance of India.
1957:
General Insurance Council, a wing of the Insurance Association of India, frames a code
of conduct for ensuring fair conduct and sound business practices.
1968:
The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.
1972:
The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from 1st January 1973. 107 insurers amalgamated
and grouped into four companies viz. the National Insurance Company Ltd., the New
India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United
India Insurance Company Ltd. GIC incorporated as a company.
1993: Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N.
Malhotra- was formed to evaluate the Indian insurance industry and recommend its future
direction. The Malhotra committee was set up with the objective of complementing the
reforms initiated in the financial sector.
2000: IRDA starts giving licenses to private insurers:Kotak Life Insurance ,ICICI
potential and HDFC standard Life insurance are the first private insurers to sell a policy.
11
2001: Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks allowed
selling insurance plans.
Private:
General Insurance
Public:
National Insurance
New India Assurance
Oriental Insurance
United India Insurance
Private:
12
Re-insurer
13
Company Name
LIC
48.1%
ICICI Prudential
13.7%
Bajaj Allianz
10.3%
SBI Life
6.2%
HDFC Standard
4.1%
Birla Sunlife
3.4%
Reliance Life
3.4%
2.4%
OM Kotak
1.9%
AVIVA
1.8%
Tata AIG
1.5%
MetLife
1.4%
ING Vysya
1.2%
Shriram Life
0.3%
0.2%
14
COMPANY PROFILE
BAJAJ ALLIANZ LIFE INSURANCE
Profile
Bajaj Allianz Life Insurance Co. Ltd. is a joint venture between two leading companiesAllianz AG, one of the worlds largest insurance companies, and Bajaj Auto, one of the
biggest 2 and 3 wheeler manufacturers in the world. Bajaj Allianz Life Insurance is the
fastest growing private life.
Insurance Company in India Currently has over 440,000 satisfied customers. We
have a presence in more than 550 locations with 60,000 Insurance Consultant providing
the finest customer service. One of Indias leading private life insurance companies
Indian Operations:
Growing at a breakneck pace with a strong pan Indian presence Bajaj Allianz has
emerged as a strong player in India. Bajaj Allianz Life Insurance Company Limited is a
joint venture between two leading conglomerates Allianz AG and Bajaj Auto Limited.
Characterized by global presence with a local focus and driven by customer
orientation to establish high earnings potential and financial strength, Bajaj Allianz Life
Insurance Co. Ltd. was incorporated on 12th March 2001. The company received the
Insurance Regulatory and Development Authority (IRDA) certificate of Registrahon (R3)
No 116 on 3rd August 2001 to conduct Life Insurance business in India.
Shared Vision:
15
Bajaj Auto Ltd. the Flagship Company of the Rs. 8000crore Bajaj group is the largest
manufacturer of two-wheelers and three- Wheelers in India and one of the largest in the
world.
A household name in India, Bajaj Auto has a strong brand image & brand loyalty
synonymous with quality & customer focus. With over 1 5.000 employees, the company
is a Rs. 4000 crore-auto giant, is the largest 2/3-wheeler manufacturer in India and the 4th
largest in the world. AAA rated by CRISIL, Bajaj Auto has been in operation for over 55
years. It has joined hands with Allianz to provide the Indian consumers with a distinct
spoon in terms of life insurance products.
As a promoter of Bajaj Allianz Life Insurance Co. Ltd. Bajaj Auto has the following to
offer:
Allianz Group
Allianz Group is one of the worlds leading insurers and financial services providers.
Founded in 1890 in Berlin, Allianz is now present in over 70 countries with almost
174,000 employees. At the top of the international group is the holding company, Allianz
AG, with its head office in Munich.
Allianz Group provides its more than 60 million customers worldwide with a
comprehensive range of services in the areas of:
16
Bajaj Auto:
Bajaj Auto Ltd., the Flagship Company of the Rs. 8000 crore Bajaj group is the largest
manufacturer of two-wheelers and three-wheelers in India and one of the largest in the
world. A household name in India, Bajaj Auto has a strong brand image & brand loyalty
synonymous with quality & customer focus.
A strong Indian brand- Hamara Bajaj:
financial solutions that provide all the security you need for your t4mily and yourself.
Bajaj Allianz brings to you several innovative products, the details of which you can
browse in this section.
Key Achievements:
Races past GWP of over Re. 1 001Cr, with growth of over 357% over
previous years GWP of Rs. 219 Crores
FYP of Rs 860cr a 380% growth over last years FYP of Rs 179 or.
Rocketed to No. 2 position as against No 6 at the end of last financial year
amongst Pvt. Life Insurance cos. with a clear lead of Rs 240 Cr.
Fastest growing insurance company with 380% growth
Market share jumps almost 4 times from 0.95 % to 3.39 % amongst all life
Insurance cos.
Increased its product portfolio from 7 to 19 simple and flexible products
Launched complete suite of employee benefit solutions (Group products
for Corporate)
No.1 Pvt. Life Insurer FY 20006. Leading by RS. 78Cr.
No.1 Pvt. Life Insurer in Retail Business Leading by RS 339 Cr.
Whopping growth of 216% for the FY 2005-06
Have sold over 13,00,000 policies to satiated customers
Is backed by a network of 550 offices spanning the country
Accelerated Growth
Assets under management Rs 3,324 Cr.
Shareholder capital base of Rs 500 Cr.
18
PRODUCT PROFILE
Unit Linked Plan
Traditional plan
Invest gain
Cash gain
Child gain
Retirement Solutions
Swarna visranthi
Health Plan
Care first
19
Health care
Term Plan
Risk care
Term care
20
The advantage of ULIP is that since the investments are made for long periods, the
chances of earning a decent return are high.
Just as in the case of mutual funds, buyers who are risk averse can buy into debt schemes
while those who have an appetite for risk can opt for balanced or equity schemes.
However, the charges paid in these schemes in terms of the entry load, administrative
fees, underwriting fees, buying and selling charges and asset management charges are
fairly high and vary from insurer to insurer in the quantum as also in the manner in which
they are charged.
Tax benefits
The premiums paid for ULIPs are eligible for tax rebates under section 80 which allows a
a maximum of Rs. 1,00,000 premiums paid for taxable income below Rs 8,50,000 and
Proceeds from ULIPs are tax-free under section 10(10D) unlike those from a mutual fund
which attract short term capital gains tax.
Key features
Premiums paid can be single, regular or variable. The payment period too can be regular
or variable. The risk cover (insurance cover) can be increased or decreased.As in all
insurance policies, the risk charge (mortality rate) varies with age. However, for an
individual the risk charge is always based on the age of the policyholder in the year of
commencement of the policy. These charges are normally deducted on a monthly basis
from the unit value. For instance, if there is an increase in the value of units due to
market conditions, the sum at risk (sum assured less the value of investments) reduces
and so the risk charges are lower. The maturity benefit is not typically a fixed amount and
the maturity period can be advanced (early withdrawal) or extended.
Investments can be made in gilt funds (government securities), balanced funds (part debt,
part equity), money-market funds; growth funds (equities) or bonds (corporate bonds).
The policyholder can switch between schemes (for instance, balanced to debt or gilt to
equity). The investment risk is transferred to the policyholder. The maturity benefit is the
net asset value of the units. The value would be high or low depending on the market
conditions during the period of the policy and the performance of the fund manager.
21
Thus there is no capital protection on maturity unless the scheme specially provides for it.
There could be policies that allow the policyholder to remain invested beyond the
maturity period in the event of the maturity value not being satisfactory.
22
Look at NAV performance over a period of at least two to three years. This can only give
you some indication about the credibility of the fund manager because past performance
is no guarantee to future returns, especially in insurance products where the emphasis is
on long-term performance (10 years or more).
Since insurance is a product, which entails a long-term commitment on the part of the
insurer, it is important not to go only by the features or the cost advantages of schemes
but by the parentage of the insurer as well.
Comparing schemes based on costs is a fairly complex exercise. As a rule, the higher the
initial years' expenses the longer it takes for the policy to outperform its peers with low
initial years' costs and slightly higher subsequent year expenses.
Retire unhurt
Pension plans are essentially tailored to meet old age financial requirements. But there
are certain advantages in joining a pension plan.
First of all, contribution to pension funds upto Rs 10,000 is eligible for tax deduction
under section 80CCC. In other words, your pension contribution will get deducted from
your taxable income.
So if you are in the top tax bracket, liable to pay to a 30.6 per cent tax, then your tax
savings will be that much.
All life insurance companies offer pension products - both conventional and unit-linked.
In both cases you pay a certain premium amount for a specified length of time.
Usually, the minimum entry age is 18 years and the maximum age is 60 years. You can
choose to pay the premium for five to 30 years. When the policy matures, you receive
one-third of the value of the accumulated amount as a lump-sum payment.
For the remaining, you can buy annuities either from the existing insurer or any other
insurer.
23
While in a conventional scheme, your money is managed through the insurer's pooled
investment account and you are entitled to bonuses every year, in a ULIP you receive the
value of the investment in your individual account.
In a ULIP you have the flexibility to choose between a conservative scheme or an
aggressive scheme with high allocation to equities. Pension policy imposes huge
penalties for early termination.
24
Assuming a growth rate of 10 per cent per annum, the value of units at the end of the
ninth year would be Rs 621,900. Hence, the beneficiaries would get Rs 621,900.
OBJECTIVES OF ULIPS
1.
2.
3.
4.
5.
6.
7.
8.
Sum Assured
Premium
payment term
Increase sum assured
Add riders and,
Customize the policy according to needs.
ADVANTAGES OF ULIP
Can easily rebalance your risk between equity and debt without any tax
implications.
Best suited for medium risk taking individuals who wish to invest in equity and
debt funds (at least 40% or higher exposure to debt). No additional tax burden for
those investing mainly in debt unlike in MFs.
25
DISADVANTAGES OF ULIPS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
ULIPS as the name suggests are directly linked with the investments made by the
insured. Though he does not have a direct say in this but he does offer his choice in the
form of investment.
With stock markets soaring high a few months back, ULIPs were offering a good rate of
return, but now with a sudden downfall of the stocks, ULIPs are bound to become
negative investments.
At present, a policy-holder cannot understand the growth of his investments vis--vis
other funds in the market, since there is no benchmark to measure one fund against the
other. Usually a policy-holder could ask his investment in a ULIP to be, for example, 55
per cent in equity and 45 per cent in debt. These components can be mixed according to
26
his risk-taking ability. An investor, therefore, would have to look at quarterly statements,
where the fund would be compared with benchmarks. However, this may not be a true
representation of the NAV, as the ULIP could be a mix of debt, liquid and equity
investments.
The reality is that most of the ULIPs take more than 5 years to break even. Policies where
the costs are 65 per cent and upwards have not even recovered the principal despite the
strongest bull market we have ever witnessed.
Allianz Bajaj Life Insurance Company has launched Unit Gain, the companys
first unit linked policy. Unit Gain allows customers to combine the benefits of life
insurance with higher investment returns from equity and debt markets.
Unit Gain was launched with a choice of four funds to the customer- equity,
debt, balanced and cash funds. The cash funds come with the guarantee that the value of
units in the fund will not go down.
Unit Gain is one of the most flexible unit linked plans in the market, and allows the
customer to change the sum assured during the term of the policy to match their changing
life insurance requirements. Also the plan offers a premium holiday feature, where the
policy is kept in-force even when premiums are not paid as long as there are enough units
to cover charges.
27
28
The premiums paid are invested in fund/funds of your choice (depending on the
allocation rate) & unit is allocated depending on the price of units for the fund/funds.
The value of your policy is the value of units that you hold in the fund/funds. The
insurance cover charges are deducted through monthly cancellation of units . The funds
administration charge and fund management charge are priced in the unit value.
Minimum sum assured= 5 times the annual premium.
Maximum sum assured =y times the annual premium where y will be as per the
following table.
Age
0-30
31-35
36-40
41-45
46-55
56-60
Group
Y
125
105
75
55
30
20
29
Choice of 6 investment funds with flexible investment management you can with
between funds at any time.
Provision for full/partial withdrawal any time after the single premium is paid.
Maximum sum assures =y times the single premium where y will be as per the
following table.
Age
0-30
31-35
36-40
41-45
46-60
61-67
Group
Y
45
40
25
15
1.01
30
Minimum age at entry :0(risk commences at age 7, and ceases after age 70)
31
Age
0-30
31-35
36-40
41-45
46-55
56-60
Group
Y
125
90
60
40
20
15
32
Maximum sum assured = y times the single premium where y will be as the
following table.
Age
0-30
31-35
36-40
41-45
46-60
61-69
Group
Y
45
35
20
10
1.5
Minimum age at entry :0(Risk commence at age 7,and ceases after age 70)
Maximum age at entry :69
Minimum single premium: Rs. 25000.
Minimum top-up: Rs .5000.
With Bajaj Allianz, you can take control of your future and ensure a retirement you
can look forward to. This plan has been be signed to take of your retirement and
insurance needs, there by providing you with a comprehensive solution for life time.
There are two packages choose from:
1. Unit gain life pension regular premium.
2.
Defending on the amount of premium you want to pay, you choose sum assure as per the
condition given below:
1. Minimum sum assured =5 times annual/1.01 times single premium.
2. maximum sum assured =y times the annual/single premium where y will be as per
the following table:
34
Age group
Y for
18-30
125
31-35
90
36-40
60
41-45
40
46-55
20
55-60
15
61-65
10
45
35
20
10
1.5
regular
premium
Y for
regular
premium
How does the Bajaj Allianz Unit Gain Life Pension Plan Work?
The premium paid is invested in funds of your choice (depending on the
allocation rate) and unit is allocated depending on the price of unit for the fund or funds.
The value of your policy is the total value of units that hold in the fund or funds. The
insurance cover and administration charges are deducted through cancellation of units.
The fund management charge is priced in the unit value.
Important details of the Bajaj Allianz Unit Gain Life Pension Plan:
Age of entry
Deferment period
Age at vesting
Minimum
18
5
45
Maximum
65
40
70
35
How does the Bajaj Allianz Unit Gain Easy Pension Plan works?
The premium paid is invested in a fund/funds of your choice (depending on the
allocation rate) and units are allocated depending on the price of units for fund/funds. The
value of your policy is the total value of units that you hold in the fund/funds. The
administration is deducted through cancellation of units. The fund management is priced
in the units value.
Important details of Bajaj Allianz Unit Gain Life Pension Plan:
Age of entry
Deferment period
Age at vesting
Minimum
18
5
45
36
Maximum
65
40
70
MUTUAL FUNDS
INTRODUCTION
A mutual fund is simply a financial intermediary that allows a group of investors to pool
their money together with a predetermined investment objective. The mutual fund will
have a fund manager who is responsible for investing the pooled money into specific
securities (usually stocks or bonds). When you invest in a mutual fund, you are buying
shares (or portions) of the mutual fund and become a shareholder of the fund.
Mutual funds are one of the best investments ever created because they are very cost
efficient and very easy to invest in (you don't have to figure out which stocks or bonds to
buy).
By pooling money together in a mutual fund, investors can purchase stocks or bonds with
much lower trading costs than if they tried to do it on their own. But the biggest
advantage to mutual funds is diversification.
ACCORDING TO AMFI (ASSOCIATION OF MUTUAL FUND OF INDIA):
A Mutual Fund is a trust that pools the savings of a number of investors who share a
common financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income earned through
these investments and the capital appreciation realized is shared by its unit holders in
proportion to the number of units owned by them.
Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The flow chart below describes broadly the working of a mutual fund.
37
38
all stocks decline at the same time and in the same proportion. You achieve this
diversification through a Mutual Fund with far less money than you can do on your own.
3. Convenient Administration: Investing in a Mutual Fund reduces paperwork and helps
you avoid many problems such as bad deliveries, delayed payments and unnecessary
follow up with brokers and companies. Mutual Funds save your time and make investing
easy and convenient.
4. Return Potential: Over a medium to long-term, Mutual Funds have the potential to
provide a higher return as they invest in a diversified basket of selected securities.
5. Low Costs: Mutual Funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in brokerage,
custodial and other fees translate into lower costs for investors.
6. Liquidity: In open-ended schemes, you can get your money back promptly at Asset
Value (NAV) related prices from the Mutual Fund itself. With close-ended schemes, you
can sell your units on a stock exchange at the prevailing market price or avail of the
facility of repurchase through Mutual Funds at NAV related prices which some closeended and interval schemes offer you periodically.
7. Transparency: You get regular information on the value of your investment in
addition to disclosure on the specific investments made by your scheme, the proportion
invested in each class of assets and the fund managers investment strategy and outlook.
8. Flexibility: Through features such as Systematic Investment Plans (SIP), Systematic
Withdrawal Plans (SWP) and dividend reinvestment plans, you can systematically invest
or withdraw funds according to your needs and convenience.
9. Choice of Schemes: Mutual Funds offer a variety of schemes to suit your varying
needs over a lifetime.
39
11. Well Regulated: All Mutual Funds are registered with SEBI and they function
within the provisions of strict regulations designed to protect the interests of
investors. The operations of Mutual Funds are regularly monitored by SEBI.
Fees and commissions: All funds charge administrative fees to cover their
day-to-day expenses. Some funds also charge sales commissions or "loads" to
compensate brokers, financial consultants, or financial planners. Even if you don't
use a broker or other financial adviser, you will pay a sales commission if you buy
shares in a Load Fund.
Taxes: During a typical year, most actively managed mutual funds sell anywhere
from 20 to 70 percent of the securities in their portfolios. If your fund makes a
profit on its sales, you will pay taxes on the income you receive, even if you
reinvest the money you made.
Management risk: When you invest in a mutual fund, you depend on the fund's
manager to make the right decisions regarding the fund's portfolio. If the manager
does not perform as well as you had hoped, you might not make as much money on
your investment as you expected. Of course, if you invest in Index Funds, you
forego management risk, because these funds do not employ managers.
40
RETURN
Equity
High
High
Balanced
Medium
Medium
Debt
Low
Low
II. Load vs. No Load: Marketing of a new mutual fund scheme involves initial
expense. These expenses may be recovered from the investors in different ways at
different times. Three usual ways in which a funds sales expenses may be recovered
from the investors are:
1. At the time of investors entry into the fund/scheme, by deducting a specific amount
from his initial contribution: front-end or entry load.
2. By charging the fund/scheme with a fixed amount each year, during the stated number
of years: deferred load.
41
3. At the time of the investors exit from the fund/scheme, by deducting a specific amount
from the redemption proceeds payable to the investor: back end or exit load These
charges made by the fund managers to the investors to cover distribution/sales/marketing
expenses are often called loads. Funds that charge front-end, back-end or deferred
loads are called load funds. Funds that make no such charges or loads for sales expenses
are called no-load funds.
In India, SEBI has defined a load as the one-time fee payable by the investor to allow
the fund to meet initial issue expenses including brokers/agents/distributors
commissions, advertising and marketing expenses.
III. Tax-exempt vs. Non-Tax exempt Funds: Generally, when a fund invests in
tax-exempt securities, it is called a tax-exempt fund. In India, after the 1999 Union
Government Budget, all of the dividend income received from any of the mutual funds is
tax-free in the hands of the investors. However, funds other than Equity Funds have to
pay a distribution tax, before distributing income to investors. In other words, equity
mutual fund schemes are tax-exempt investment avenues, while other funds are taxable
for distributable income.
42
Investors and hence the mutual funds pursue different objectives while investing. Thus,
Income Funds invest to generate regular income, and less for capital appreciation.
Value Funds invest in equities that are considered under-valued today, whose
Money Market Funds: Lowest rung in the order of risk level, Money Market
Funds invest in securities of a short-term nature, which generally means securities
of less than one-year maturity.
Gilt Funds: Gilts are government securities with medium to long-term maturities,
typically of over one year (under one-year instruments being money market
securities).
Debt Funds (or Income Funds): Next in the order of risk level, we have the
general category Debt Funds. Debt funds invest in debt instruments issued not
only by governments, but also by private companies, banks and financial
institutions and other entities such as infrastructure companies/utilities.
43
Diversifies Debt Funds: A debt fund that invests in all available types of debt
securities, issued by entities across all industries and sectors is a properly
diversified debt fund. A diversified debt fund is less risky than a narrow-focus
fund that invests in debt securities of a particular sector or industry.
Focused Debt Funds: Some debt funds have a narrow focus, with less
diversification in its investment. Examples include sector, specialized and
offshore debt funds. Other examples of focused funds include those that invest
only in Corporate Debentures and Bonds or only in Tax Free Infrastructure or
Municipal Bonds.
High yield Debt Funds: There are funds which seek to obtain higher interest
rates by investing in debt instruments that are considered below investment
grade. e.g. Junk Bond Funds.
Assured Return Funds an Indian Variant: The SEBI permits only those funds
whose sponsors have adequate net-worth to offer assurance of return. For e.g.
MIPs Investors have some lock-in period.
Fixed Term Plan Series Another Indian Variant: These are essentially
closed-end. These plans do not generally offer guaranteed returns. This scheme is
for short-term investors who otherwise place money as fixed term bank deposits
or inter corporate bonds.
Equity Fund: As investors move from Debt Fund category to Equity Funds,
They face increased risk level.
No guarantee returns
44
b) Growth Fund
c) Specialty Fund
They invest in companies that meet predefined criteria.
i) Sector Funds
Technology Fund
Pharmaceutical Fund
FMCG Fund
Hybrid Funds Quasi Equity/Quasi Debt: Many mutual funds mix these
(money market, debt and equity) different types of securities in their portfolios.
Such funds are termed hybrid funds as they have a dual equity/bond focus.
Real Estate Funds: Specialized Real Estate Funds would invest in Real Estate
directly, or may fund real estate developers, or lend to them, or buy shares of
housing finance companies or may even buy their securities assets.
46
REGULATORIES OF MF IN INDIA
SEBI - The capital markets regulators also regulates the mutual funds in India.
SEBI requires all mutual funds to be registered with them. SEBI issues guidelines
for all mutual funds operations - investment, accounts, expenses etc.
Recently, it has been decided that Money Market Mutual Funds of registered mutual
funds will be regulated by SEBI through SEBI (Mutual Fund) Regulations 1996.
47
48
over longer time horizons. The minimum investment amounts are laid out by the fund
house.
ULIP investors also have the choice of investing in a lump sum (single premium) or using
the
Conventional route, i.e. making premium payments on an annual, half-yearly, quarterly or
monthly basis. In ULIPs, determining the premium paid is often the starting point for the
investment activity.
This is in stark contrast to conventional insurance plans where the sum assured is the
starting point and premiums to be paid are determined thereafter.
ULIP investors also have the flexibility to alter the premium amounts during the policy's
tenure. For example an individual with access to surplus funds can enhance the
contribution thereby ensuring that his surplus funds are gainfully invested; conversely an
individual faced with a liquidity crunch has the option of paying a lower amount (the
difference being adjusted in the accumulated value of his ULIP). The freedom to modify
premium payments at one's convenience clearly gives ULIP investors an edge over their
mutual fund counterparts.
2. Expenses
In mutual fund investments, expenses charged for various activities like fund
management, sales and marketing, administration among others are subject to predetermined upper limits as prescribed by the Securities and Exchange Board of India.
For example equity-oriented funds can charge their investors a maximum of 2.5% per
annum on a recurring basis for all their expenses; any expense above the prescribed limit
is borne by the fund house and not the investors.
Similarly funds also charge their investors entry and exit loads (in most cases, either is
applicable). Entry loads are charged at the timing of making an investment while the exit
load is charged at the time of sale.
Insurance companies have a free hand in levying expenses on their ULIP products with
no upper limits being prescribed by the regulator, i.e. the Insurance Regulatory and
49
Development Authority. This explains the complex and at times 'unwieldy' expense
structures on ULIP offerings. The only restraint placed is that insurers are required to
notify the regulator of all the expenses that will be charged on their ULIP offerings.
Expenses can have far-reaching consequences on investors since higher expenses
translate into lower amounts being invested and a smaller corpus being accumulated.
3. Portfolio disclosure
Mutual fund houses are required to statutorily declare their portfolios on a quarterly basis,
albeit most fund houses do so on a monthly basis. Investors get the opportunity to see
where their monies are being invested and how they have been managed by studying the
portfolio.
There is lack of consensus on whether ULIPs are required to disclose their portfolios.
During our interactions with leading insurers we came across divergent views on this
issue. While one school of thought believes that disclosing portfolios on a quarterly basis
is mandatory, the other believes that there is no legal obligation to do so and that insurers
are required to disclose their portfolios only on demand.
Some insurance companies do declare their portfolios on a monthly/quarterly basis.
However the lack of transparency in ULIP investments could be a cause for concern
considering that the amount invested in insurance policies is essentially meant to provide
for contingencies and for long-term needs like retirement; regular portfolio disclosures on
the other hand can enable investors to make timely investment decisions.
4. Flexibility in altering the asset allocation
As was stated earlier, offerings in both the mutual funds segment and ULIPs segment are
largely comparable. For example plans that invest their entire corpus in equities
(diversified equity funds), a 60:40 allotment in equity and debt instruments (balanced
funds) and those investing only in debt instruments (debt funds) can be found in both
ULIPs and mutual funds.
If a mutual fund investor in a diversified equity fund wishes to shift his corpus into a debt
from the same fund house, he could have to bear an exit load and/or entry load.
50
On the other hand most insurance companies permit their ULIP inventors to shift
investments across various plans/asset classes either at a nominal or no cost (usually, a
couple of switches are allowed free of charge every year and a cost has to be borne for
additional switches).
Effectively the ULIP investor is given the option to invest across asset classes as per
his convenience in a cost-effective manner.
This can prove to be very useful for investors, for example in a bull market when the
ULIP investor's equity component has appreciated, he can book profits by simply
transferring the requisite amount to a debt-oriented plan.
5. Tax benefits
ULIP investments qualify for deductions under Section 80C of the Income Tax Act. This
holds good, irrespective of the nature of the plan chosen by the investor. On the other
hand in the mutual funds domain, only investments in tax-saving funds (also referred to
as equity-linked savings schemes) are eligible for Section 80C benefits.
Maturity proceeds from ULIPs are tax free. In case of equity-oriented funds (for example
diversified equity funds, balanced funds), if the investments are held for a period over 12
months, the gains are tax free; conversely investments sold within a 12-month period
attract short-term capital gains tax @ 10%.
Similarly, debt-oriented funds attract a long-term capital gains tax @ 10%, while a shortterm capital gain is taxed at the investor's marginal tax rate.
Despite the seemingly similar structures evidently both mutual funds and ULIPs have
their unique set of advantages to offer. As always, it is vital for investors to be aware of
the nuances in both offerings and make informed decisions.
51
CHAPTER 3.
DATA ANALYSIS AND INTERPRETATIONS
(A) Gender:
Gender
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Male
37
74.0
74.0
74.0
Female
13
26.0
26.0
100.0
Total
50
100.0
100.0
52
INTERPRETATION:
The above graph shows that, out of 50 customers, 74% of the respondents are male policy
holders and the rest 26% are female policy holders.
Marital
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Married
33
66.0
66.0
66.0
Unmarried
17
34.0
34.0
100.0
Total
50
100.0
100.0
53
INTERPRETATION:
From a sample of 50 customers, 66% of the policy holders are unmarried and the rest
34% of the policy holders are married.
(C) Age:
Age
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
20-30
12.0
12.0
12.0
30-40
14
28.0
28.0
40.0
40-50
17
34.0
34.0
74.0
50-60
11
22.0
22.0
96.0
60-70
4.0
4.0
100.0
Total
50
100.0
100.0
54
INTERPRETATION:
The graph shows that majority of the sample respondents were in the age group of 40-50
yrs ie,34%, 12% were in the age group of 20-30 yrs & 28% of them were 30-40 yrs, 22%
were in the age group of 50-60 yrs and 4% were in the age group of 60-70 yrs.
(D) Occupation:
Occupation
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Government
18
36.0
36.0
36.0
Private service
14
28.0
28.0
64.0
Business
11
22.0
22.0
86.0
Others
14.0
14.0
100.0
50
100.0
100.0
Total
55
INTERPRETATION:
The graph shows that majority of the policy holders are working in the Government
sector i.e.36% , 28% of them are engaged in Private service, 22% of them are business
field, 6% of them are NRIs and 8% of them are engaged other works.
Percent
Valid Percent
Percent
Below 2 lakhs
19
38.0
38.0
38.0
2-4 lakhs
23
46.0
46.0
84.0
4-6 lakhs
12.0
12.0
96.0
56
6-8 lakhs
Total
4.0
4.0
50
100.0
100.0
100.0
INTERPRETATION:
The graph shows that 46% of the policy holders get a salary of 2-4 lakhs, 38% of the
policy holders get a salary of below 2 lakhs, 12% of the policy holders get a salary of 4-6
lakhs, 3 of the policy holders get a salary below 2 lakhs and 4% of them above 6-8 lakhs.
Percent
Valid Percent
Percent
Financial journal
10.0
10.0
10.0
Television
4.0
4.0
14.0
57
Brokers/Agent
27
54.0
54.0
68.0
Friends
13
26.0
26.0
94.0
6.0
6.0
100.0
50
100.0
100.0
Consultants
Total
INTERPRETATION:
From the sample of 50 customers, 54% of the customers are strongly agree that the agents
or brokers helps them to make investment decision, 26% of the customers point out their
friends take part in the investment decision. And 10% customers reveal that the financial
journals help them, Remaining 6% is from consultants, and 4% selects television as the
source.
Attractive schemes
Percent
2
58
4.0
Valid Percent
4.0
Percent
4.0
Tax benefits
High reputation
Rate of return
Variety of products
Total
27
54.0
54.0
58.0
6.0
6.0
64.0
14
28.0
28.0
92.0
8.0
8.0
100.0
50
100.0
100.0
INTERPRETATION:
54% customers agree that the tax benefit is influence them to buy policy ,28%
looks the rate of return what they will earn, variety of products from the company attracts
8% customers, and high reputation of the company attracts 6% of the customers, and
remaining 4% pointing out the attractive schemes.
Insurance
Stock market
Percent
Valid Percent
Percent
13
26.0
26.0
26.0
2.0
2.0
28.0
59
Mutual fund
12.0
12.0
40.0
Bank deposit
28
56.0
56.0
96.0
4.0
4.0
100.0
50
100.0
100.0
INTERPRETATION:
From a sample of 50 customers, 56% of the customers invest money in bank deposit,
26% in insurance sector, 12% in mutual fund, then 4% in both insurance and mutual
fund, and remaining 2% in stock market.
Bajaj Allianz
Percent
Valid Percent
Percent
27
54.0
54.0
54.0
10.0
10.0
64.0
Tata AIG
8.0
8.0
72.0
60
Aviva Life
6.0
6.0
78.0
SBI Life
11
22.0
22.0
100.0
Total
50
100.0
100.0
INTERPRETATION:
From a sample of 50 customers, 54% customers select Bajaj Allianz is the best insurance
company, and 22% customers choose SBI Life, 10% select HDFC, 8% for Tata AIG and
remaining 6% stands for Aviva Life Insurance Company.
Excellent
Percent
Valid Percent
Percent
4.0
4.0
4.0
37
74.0
74.0
78.0
Fair
18.0
18.0
96.0
Poor
4.0
4.0
100.0
Total
50
100.0
100.0
Good
61
INTERPRETATION:
From a sample of 50 customers,74% customers thinks that the products offered by Bajaj
Allianz Life insurance co. is good,4% thinks its excellent,18% of them select Bajaj
Allianz products are fair, and remaining 4% not satisfied with our products.
Strongly agree
Percent
Valid Percent
Percent
4.0
4.0
4.0
Agree
33
66.0
66.0
70.0
Neutral
16.0
16.0
86.0
Disagree
10.0
10.0
96.0
Strongly disagree
4.0
4.0
100.0
62
Total
50
100.0
100.0
INTERPRETATION:
From a sample of 50 customers, 66% agree, 4% of them strongly supporting that fact, and
16% has no opinion about it. And 4% strongly disagreed; remaining 10% also disagree
with investment in ULIP.
Percent
Valid Percent
Percent
Strongly agree
14
28.0
28.0
28.0
Agree
32
64.0
64.0
92.0
Neutral
4.0
4.0
96.0
63
Disagree
Total
4.0
4.0
50
100.0
100.0
100.0
INTERPRETATION:
From a sample of 50 customers, 64% of the customers agree, 28% of them strongly
support it,4% customers didnt say anything, and remaining 4% disagree with that fact.
So we can see that most of the Customers choose ULIP because of insurance coverage.
Strongly agree
Percent
Valid Percent
Percent
6.0
6.0
6.0
Agree
13
26.0
26.0
32.0
Neutral
14
28.0
28.0
60.0
Disagree
18
36.0
36.0
96.0
64
Strongly disagree
Total
4.0
4.0
50
100.0
100.0
100.0
INTERPRETATION:
From a sample of 50 customers, 26% of the customers agree with that fact,6% of the
customers strongly support it, and 28% customers have no idea about it. And remaining
10% disagreed, out of this 10%, 4% strongly disagreed with it.
Percent
Valid Percent
Percent
Strongly agree
17
34.0
34.0
34.0
Agree
27
54.0
54.0
88.0
Neutral
8.0
8.0
96.0
disagree
4.0
4.0
100.0
65
Total
50
100.0
100.0
INTERPRETATION:
From a sample of 50 customers, 54% of the customers think that mutual funds are more
risky than ULIP products, 34% strongly agree with this statement.8% customers have no
opinion about it, and remaining 4% disagree with it.
Percent
Valid Percent
Percent
Strongly agree
12
24.0
24.0
24.0
Agree
31
62.0
62.0
86.0
Neutral
10.0
10.0
96.0
Disagree
4.0
4.0
100.0
66
Total
50
100.0
100.0
INTERPRETATION:
62% of the customers agree with ULIP have advantage over mutual fund statement.24%
customers strongly agree with this fact. And 4% of customers not supporting the
statement. And remaining 10% have no opinion about it.
Strongly agree
Percent
Valid Percent
Percent
8.0
8.0
8.0
Agree
26
52.0
52.0
60.0
Neutral
4.0
4.0
64.0
15
30.0
30.0
94.0
Disagree
67
Strongly disagree
Total
6.0
6.0
50
100.0
100.0
100.0
INTERPRETATION:
From a sample of 50 customers,52% customers agree,8% strongly agree,30% customers
were disagree with that fact,6% strongly disagree, and remaining 4% have no opinion
about safety factor is important in the investment of ULIP.
Percent
Valid Percent
Percent
Strongly agree
6.0
6.0
6.0
Agree
10.0
10.0
16.0
Neutral
10.0
10.0
26.0
30
60.0
60.0
86.0
14.0
14.0
100.0
50
100.0
100.0
Disagree
Strongly disagree
Total
68
INTERPRETATION:
From a sample of 50 customers, majority of the customers disagree i.e. 60%, 14%
strongly disagree with that fact. And 6% strongly agree, 10% agree, and remaining 10%
neither agree nor disagree with that statement.
Strongly agree
Percent
Valid Percent
Percent
12.0
12.0
12.0
Agree
21
42.0
42.0
54.0
Neutral
6.0
6.0
60.0
12
24.0
24.0
84.0
16.0
16.0
100.0
50
100.0
100.0
Disagree
Strongly disagree
Total
69
INTERPRETATION:
From a sample of 50 customers, majority of the customers agree i.e. 42%, 12% strongly
agree with that fact. And 24% disagree, 16% strongly disagree, and remaining 6% neither
agree nor disagree with that statement
Strongly agree
Percent
Valid Percent
Percent
12.0
12.0
12.0
Agree
21
42.0
42.0
54.0
Neutral
10.0
10.0
64.0
16
32.0
32.0
96.0
4.0
4.0
100.0
50
100.0
100.0
Disagree
Strongly disagree
Total
70
INTERPRETATION:
From a sample of 50 customers, majority of the customers agree i.e. 42%, 12% strongly
agree with that fact. And 32% disagree, 4% strongly disagree, and remaining 10% neither
agree nor disagree with that statement.
Percent
Valid Percent
Percent
Strongly agree
16.0
16.0
16.0
Agree
16.0
16.0
32.0
Neutral
14.0
14.0
46.0
23
46.0
46.0
92.0
8.0
8.0
100.0
50
100.0
100.0
Disagree
Strongly disagree
Total
71
INTERPRETATION:
From a sample of 50 customers, majority of the customers disagree i.e. 46%, 8% strongly
disagree with that fact. And 16% strongly agree, 16% agree, and remaining 14% neither
agree nor disagree with that statement.
Strongly agree
Percent
Valid Percent
Percent
18.0
18.0
18.0
Agree
11
22.0
22.0
40.0
Neutral
19
38.0
38.0
78.0
Disagree
10.0
10.0
88.0
Strongly disagree
12.0
12.0
100.0
50
100.0
100.0
Total
72
INTERPRETATION:
From a sample of 50 customers, 22%agree, 18% strongly agree with that fact. And 10%
disagree, 12% strongly disagree, and remaining 38% neither agree nor disagree with that
statement.
Percent
Valid Percent
Percent
Strongly agree
4.0
4.0
4.0
Agree
8.0
8.0
12.0
Neutral
16.0
16.0
28.0
30
60.0
60.0
88.0
12.0
12.0
100.0
50
100.0
100.0
Disagree
Strongly disagree
Total
73
INTERPRETATION:
From a sample of 50 customers,8% customers agree,4% strongly agree,60% customers
were disagree with that fact 12% strongly disagree, and remaining 16% have no opinion
about safety factor is important in the investment of mutual fund.
Strongly agree
Percent
Valid Percent
Percent
14.0
14.0
14.0
Agree
19
38.0
38.0
52.0
Neutral
15
30.0
30.0
82.0
Disagree
12.0
12.0
94.0
Strongly disagree
6.0
6.0
100.0
50
100.0
100.0
Total
74
INTERPRETATION:
From a sample of 50 customers, majority of the customers agree i.e. 38%, 14% strongly
agree with that fact. And 12% disagree,6% strongly disagree, and remaining 30% neither
agree nor disagree with that statement.
Percent
Valid Percent
Percent
Strongly agree
4.0
4.0
4.0
Agree
14.0
14.0
18.0
Neutral
21
42.0
42.0
60.0
Disagree
15
30.0
30.0
90.0
10.0
10.0
100.0
50
100.0
100.0
Strongly disagree
Total
75
INTERPRETATION:
From a sample of 50 customers, 30% disagree, 10% strongly disagree with that fact. And
14% agree, 4% strongly agree, and remaining 42% neither agree nor disagree with that
statement.
Tax savings
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
Strongly agree
6.0
6.0
6.0
Agree
12.0
12.0
18.0
Neutral
23
46.0
46.0
64.0
Disagree
12
24.0
24.0
88.0
12.0
12.0
100.0
50
100.0
100.0
Strongly disagree
Total
76
INTERPRETATION:
From a sample of 50 customers, 24% disagree, 12% strongly disagree with that fact. And
12% agree, 6% strongly agree, and remaining 46% neither agree nor disagree with that
statement.
Strongly agree
Percent
Valid Percent
Percent
12.0
12.0
12.0
Agree
22
44.0
44.0
56.0
Neutral
15
30.0
30.0
86.0
14.0
14.0
100.0
50
100.0
100.0
Disagree
Total
77
INTERPRETATION:
From a sample of 50 customers, 44% agree, 12% strongly agree with that fact. And 14%
disagree, and remaining 30% neither agree nor disagree with that statement.
Advertisement
Cumulative
Frequency
Valid
Strongly agree
Percent
Valid Percent
Percent
8.0
8.0
8.0
Agree
16
32.0
32.0
40.0
Neutral
24
48.0
48.0
88.0
Disagree
8.0
8.0
96.0
Strongly disagree
4.0
4.0
100.0
50
100.0
100.0
Total
78
INTERPRETATION:
From a sample of 50 customers, 8% strongly agree,32% agree with that fact. And 8%
strongly disagree, 4% disagree, and remaining 24% neither agree nor disagree with that
statement.
Percent
Valid Percent
Percent
Strongly agree
23
46.0
46.0
46.0
Agree
15
30.0
30.0
76.0
Neutral
12.0
12.0
88.0
Disagree
8.0
8.0
96.0
Strongly disagree
4.0
4.0
100.0
50
100.0
100.0
Total
79
INTERPRETATION:
46% of the customers express their satisfaction level with Bajaj Allianz service. They
strongly agree with the statement, 30% customers also agree with it. And 12% have
neutral situation. And remaining 12% not satisfied with Bajaj Allianz.
CHAPTER4.
FINDINGS AND SUGGESTIONS
While survey I found that many of customers had already invested in ULIP and
Mutual Fund, some people had invested in both options. 12% of people had
invested in Mutual Fund and 26% people had invested in ULIP and 4% people
had invested in both the options.
80
Most of the customers prefer Ulip than mutual fund because of insurance
coverage.
While investing in mutual fund 44% of the customers looks their return, 42%
customers observe the schemes performance in past years.
54% of people given Best rating to the Bajaj Allianz Life Insurance ULIP, so from
this we can analyze that Bajaj Allianz Life Insurance is doing good but it is
having good potential in Market. To improve its market share they should
improve the awareness level of the common people.
Innovative Products and good brand name are the main success factor for Bajaj
Allianz Life Insurance. 6% customers are attracted due to the high reputation of
the company. So if BAJAJ wants to penetrate its market share they should
improve the marketing strategy, improving the distribution channel etc
Investors in Bajaj Allianz Life ULIP will be getting the advantage of life
insurance cover.
81
People are turning towards the ULIP as a good investment option but as ULIP is
in its starting phase so customers prefer only big brands.
Mutual fund is having good growth but many customers from rural areas dont
have any knowledge about Mutual fund. They think it is very risky.
Even investors from cities like Malout dont have that much of Knowledge about
fund selection they all are depend on Brokers.
For Bajaj Allianz Life Insurance They should go for creating more awareness
about its ULIP as now also people are just investing because Bajaj is Indias most
Known and Favorite brand in past.
Bajaj Allianz should go for innovating more and more products and improving the
distribution channels as per the area of sale.
BIBLIOGRAPHY
1)
2)
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ULIPs hold edge over mutual funds Mr. Madhu T, The Economic
Times, June 2009
WEBSITES:
www.bajajallianz.com
www.studymode.com
www.quickmba.com
www.articlebase.com
CHAPTER 5.
Appendix
QUESTIONNAIRE
PERSONAL INFORMATION
Name:
83
Gender:
(a) Male
(b) Female
Marital status:
(a) Married
(b) Unmarried
Age:
(a) 20-30
(b) 30-40
(c) 40-50
(d) 50-60
(e) 60-70
Occupation:
(a) Government Service
(c) Business
(d) Others
Annual Income:
(a) Below 2 lakhs
(c) 4- 6 lakhs
(b) Television
(d) Friends
(e) Consultants
2. Factors that influence your investment decisions in a particular company.
(a) Attractive schemes
84
(b) Good
(c) Fair
(d) Poor
(b) Agree
(c) Neutral
(d) Disagree
(b) Agree
(c) Neutral
(d) Disagree
(b) Agree
(c) Neutral
(d) Disagree
85
(b) Agree
(c) Neutral
(d) Disagree
(b) Agree
(c) Neutral
(d) Disagree
Agree
Neutral
Disagree
Strongly
disagree
(a)Safety
(b)Liquidity
(c) Rate of Return
(d)Tax savings
(e)past schemes
Performance
(f)Advertisements
Agree
Neutral
(a) Safety
(b)Liquidity
(c) Rate of Return
(d)Tax savings
(e)past schemes
Performance
(f)Advertisements
13. I would like to reinvest my funds in the same company again.
86
Disagree
Strongly
disagree
(b) Agree
(c) Neutral
(d) Disagree
87