Professional Documents
Culture Documents
DECLERATION
I, here by declare that the major project report, entitled A comparative study on the offering of
insurance projects between icici prudential company lltd. v/s life insurance of india"
is based on my original study and has not been submitted earlier for award of any degree or
diploma to any institute or university.
The work of other author(s), wherever used, has not been acknowledged at appropriate place(s).
Candidate Signature
Date:
Countersigned
Name:
Name:
Supervisor
Director
TABLE OF CONTENTS
1. Introduction
1.1 Introduction..
1.2 Objectives.
1.3 Limitations
2. Research of design
INTRODUCTION
Insurance is an upcoming sector, in India the year 2000 was a landmark year for life
insurance industry, in this year the life insurance industry was liberalized after more than fifty
years.
Insurance sector was once a monopoly, with LIC as the only company, a public sector
enterprise. But nowadays the market opened up and there are many private players competing in
the market. There are fifteen private life insurance companies has entered the industry.
After the entry of these private players, the market share of LIC has been considerably
reduced. In the last five years the private players is able to expand the market (growing at 30%
per annum) and also has improved their market share to 18%.
For the past five years private players have launched many innovations in the industry
in terms of products, market channels and advertisement of products, agent training and
customer services etc.
The various life insurers entered India:1. HDFC Standard Life Insurance Company Ltd.
2. Max New York Life Insurance Co. Ltd.
3. ICICI Prudential Life Insurance Company Ltd.
4. Kotak Mahindra Old Mutual Life Insurance Limited.
5. Birla Sun Life Insurance Company Ltd.
6. Tata AIG Life Insurance Company Ltd.
7. SBI Life Insurance Company Limited.
8. ING Vysya Life Insurance Company Private Limited.
OBJECTIVES
The entry of foreign MNCs and the conductive business environment fostered by the
government, it is no wonder that the re-entry of private insurance has marked a second coming
for the sector. In just five years, the sector has undergone a makeover, offering more choice,
better services, quicker settlement, tighter regulation and greater awareness s the environment
become more and more competitive and services and products become alike, creating a
differentiation is becoming extremely tough.
Thus, this project objectives is as follows
.
To know where Icici prudential insurance Company limited & life insurance Corporation
of India companies stands in the market.
Find out the strength and the weakness of their plans.
And making comparative analysis between the products of Icici prudential insurance
Company limited with Life insurance Corporation of India.
LIMITATIONS
Thought the present study aims to achieve the above mentioned objectives in full earnest
and accuracy, it may be hampered due to certain limitations, some of the limitations of this study
may be summarized as follows,
This study is limited to one private insurance companies only. (Icici prudential insurance
company limited & Life insurance corporation of India)
This study is limited to delhi city only.
And getting accurate responses from the respondents due to their inherent problems.
They may be refusing to co-operate.
Respondents may have to be contacted repeatedly or alternate respondent may have to be
identified.
For want of time is restricted.
INDUSTRY PROFILE
Insurance is a contract between two parties whereby one party called insurer
undertakes in exchange for a fixed amount of money on the happening of a certain event.
Insurance is a protection against financial loss arising on the happening of an unexpected event.
The primary purpose of Life Insurance is the protection of the family. Insurance in it's various
forms protects against such misfortunes by having the losses of the unfortunate few paid by the
contribution of the many who are exposed to the same risk. This is the essence of insurance- the
sharing of losses and substitution of certainty for uncertainty. Insurance companies collect
premiums to provide for this protection. A loss is paid out of the premiums collected from the
insuring public and the insurance companies act as trustees of the amount collected. In is a
system by which the losses suffered by a few are spread over many, exposed to similar risks.
In the western world, life insurance evolved mainly from the maritime industry. Started
by private financiers who used to gamble on the lives of seafarers by offering five times the
money deposited with them in case of certain contingencies?
In its present form, life insurance has its origin in England and made its debut in India in
the year 1818.Initially, Indians were not considered on par with Europeans as far as their
insurability was concerned. There were also many other failures. It was in the early part of the
20th century that some kind of legislation was made to regulate the industry. From then on life
insurance made great strides in the country.
At the time of independence and thereafter, there were more than 200 companies operating in
India and not all of them on sound ethical principles. Many factors combined together to prompt
the then government to nationalize the life insurance industry in 1956 to form the Life Insurance
Corporation of India.
The years from 1956 to 1999 saw the life insurance corporation of India emerge as a
giant financial institution and the lone organization purveying life insurance, if we ignore the
minimal presence of postal life insurance. The institution succeeded in penetrating in many areas
and segments of the population and in garnering public money for public welfare.
It was in the 1990s that the winds of change started sweeping over India and brought in
their wake many changes in the economy. Liberalization ensured competition in many fields and
there was a clamor that the insurance industry too is opened up to Private Indian and foreign
players to provide the customer with a choice.
The Malhotra committee, appointed in 1993 was given the mandate to study the industry
and to suggest the changes that were necessary to make it modern and in tune with peoples
aspirations. The report submitted by the committee was the precursor of the IRDA Bill.
By the passing of the IRDA Bill, the Insurance sector has been opened up for the private
companies to carry on insurance business. Now the life insurance industry in India is rapidly
evolving and growing. It has witnessed a big growth as many Indian and foreign were entered in
to the Indian insurance sector. The life insurance industry in India has become fiercely
competitive with the entry of several new players including major multinational insurers after the
deregulation of the sector. It has opened up a range of untapped opportunities for new entrants
into the industry, as the potential market for buyers is high since the emerging market in India
has a low insurance penetration and high growth rates.
COMPANY PROFILE
Insuranace in India
Life Insurance Corporation of India
Life Insurance Corporation of India
Type
Government-owned corporation
Founded
September 1, 1956
Headquarters
Key people
Industry
Life insurance
Products
Employees
112,184
Parent
NIL
Subsidiaries
Website
http://www.licindia.com
Headquartered in Mumbai, which is considered the financial capital of India, the Life Insurance
Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different
parts of India, at least 2048 branches located in different cities and towns of India along with
satellite Offices attached to about some 50 Branches, and has a network of around one million
and 200 thousand agents for soliciting life insurance business from the public,
History
The Oriental Life Insurance Company, the first corporate entity in India offering life insurance
coverage, was established in Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans
in India were its primary target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native insurance provider. Other
insurance companies established in the pre-independence era included
Indian Mercantile
General Assurance
The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's
First War of Independence, adverse effects of the World War I and World War II on the economy
of India, and in between them the period of world wide economic crises triggered by the Great
depression. The first half of the 20th century also saw a heightened struggle for India's
independence. The aggregate effect of these events led to a high rate of bankruptcies and
liquidation of life insurance companies in India. This had adversely affected the faith of the
general public in the utility of obtaining life cover
The LIFE INSURANCE Act and the Provident Fund Act were passed in 1912, providing the first
regulatory mechanisms in the Life Insurance industry. The Indian Insurance Companies Act of
1928 authorized the government to obtain statistical information from companies operating in
both life and non-life insurance areas. The subsequent Insurance Act of 1938 brought stricter
state control over an industry that had seen several financially unsound ventures fail. A bill was
also introduced in the Legislative Assembly in 1944 to nationalize the insurance industry.
Nationalization
In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owners of private
insurance companies. In the ensuing investigations, one of India's wealthiest businessmen, Ram
Kishan Dalmia, owner of the Times of India newspaper, was sent to prison for two years.
Eventually, the Parliament of India passed the Life Insurance of India Act on 1956-06-19, and
the Life Insurance Corporation of India was created on 1956-09-01, by consolidating the life
insurance business of 245 private life insurers and other entities offering life insurance services.
Nationalization of the life insurance business in India was a result of the Industrial Policy
Resolution of 1956, which had created a policy framework for extending state control over at
least seventeen sectors of the economy, including the life insurance. The company began
operations with 5 zonal offices, 33 divisional offices and 212 branch offices.
Current status
Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a
monopoly of soliciting and selling life insurance in India, created huge surpluses, and
contributed around 7 % of India's GDP in 2006.
The Corporation, which started its business with around 300 offices, 5.6 million policies and a
corpus of INR 459 million (US$ 10 million), has grown to 25000 servicing around 180 million
policies and a corpus of over INR 3.4 trillion (US$ 80000 million).
The organization now comprises 2048 branches, 100 divisional offices and 8 zonal offices, and
employs over 10,02,149 agents.The corporate Office of LIC is in Mumbai. It also operates in 12
other countries, primarily to cater to the needs of Non Resident Indians.
With the change in the India's economic philosophy from the early 1990s, and the subsequent
relaxation of state control over several sectors of the economy, the monopolistic position of the
Life Insurance Corporation of India was diluted, and it has had to compete with a number of
other corporate entities, Indian as well as transnational Life Insurance brands. However, it still
manages to be the largest player in the Indian market, with the lion's share of 55%.
The recent Economic Times Brand Equity Survey rated LIC as the No. 1 Service Brand of the
Country.
In the financial year 2006-07 Life Insurance Corporation of India's number of policy holders are
said to have crossed a whopping 200 million (fourth in terms of population of the countries of
the world)
Subsidiaries
LIC owns the following subsidiaries:
LIC Nepal: A joint venture company formed in 2001 with the Vishal Group of Industries,
Nepal.
LIC Lanka: A joint venture company formed in 2003 with the Bartleet Group of
Companies, Sri Lanka.
LIC Housing Finance: Incorporated in 19 June 1989, its main objective is to provide
long term finance forconstruction or purchase of houses or apartments. It has a Dubai
office.
o
Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the
country and providing them adequate financial cover against death at a reasonable cost.
Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as a
whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.
Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
Act as trustees of the insured public in their individual and collective capacities.
Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.
Involve all people working in the Corporation to the best of their capability in furthering
the interests of the insured public by providing efficient service with courtesy.
Promote amongst all agents and employees of the Corporation a sense of participation,
pride and job satisfaction through discharge of their duties with dedication towards
achievement of Corporate Objective.
ICICI Prudential
Type
Industry
Headquarters
Mumbai
Key people
Products
Website
Iciciprulife.com
ICICI Prudential
ICICI Prudential is a joint venture between ICICI Bank and Prudential plc engaged in the
business of life insurance in India. ICICI Prudential is the largest private insurance company and
second largest insurance in India after LIC. ICICI Prudential Life Insurance Company is a joint
venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading
international financial services group headquartered in the United Kingdom. ICICI Prudential
was amongst the first private sector insurance companies to begin operations in December 2000
after receiving approval from Insurance Regulatory Development Authority (IRDA).ICICI
Prudential Life's capital stands at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. For the year ended March 31, 2008, the
company garnered Retail New Business Weighted premium of Rs. 6,684 crores, registering a
growth of 68% over the last year and has underwritten nearly 3 million retail policies during the
period. The company has assets held over Rs. 30,000 crore as on April 30, 2008.ICICI Prudential
Life is also the only private life insurer in India to receive a National Insurer Financial Strength
rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear
assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity
or claims.For the past seven years, ICICI Prudential Life has retained its leadership position in
the life insurance industry with a wide range of flexible products that meet the needs of the
Indian customer at every step in life.
Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance has been one
of the earliest private players. Since the time, ICICI Pru Life has been the leader in terms of
market share as indicated by the IRDA (Insurance Regulatory and Development Authority, the
regulator for Indian Insurance Industry) at its website.
Arguably the most innovative Indian Life insurer in terms of customer services and products,
ICICI Prudential has one of the largest distribution and servicing network with over 2,000
proprietary offices & customer touch points across India. The 30,000 employee strong
organization has one of the largest agency distribution in the industry.
With a growing product range to match the complex needs of the demanding customers in a
growing economy, the organization also has a history of successful.
During 2007-08, the organization's focus on rural business has proved its complex project
execution capability and strong partnerships for customer servicing.
In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK Healthcare
to settle insurance claims of its users
COMPANY PRODUCT
Product Details of Life insurance corporation of India
Products:Children's Policy
Komal Jeevan - Plan No. 159
Children Deferred - Plan no.41
Jeevan Kishore - Plan no.102
Jeevan Chhaya - Plan no.103
Marriage Endowment/Educational Annuity - Plan No. 90
Jeevan Anurag - Plan no.168
Endowment Policy
Endowment with Profits - Plan no.14
Limited Payment Endowment with Profits - Plan no.48
Jeevan Mitra - Plan no.88
New JanaRaksha Policy - Plan no.91
Jeevan Anand Plan no. 149
Jeevan Mitra Triple Cover - Plan no.133
Group Insurance Policy
Janashree Bima Yojana
Group Insurance Scheme in lieu of EDLI
Group (Term) Insurance Scheme
Group Savings Linked Insurance Scheme
Group Mortgage Redemption Assurance Scheme
Shiksha Sahayog Yojana
Joint Life Policy
Jeevan Saathi - Plan no.89
PRODUCTS AT GLANCE
1.Child policies
2.Endowment policies
5.Pension plans
CHILD PLANS
Under this childrens plan, the payment of premium ceases on policy anniversary immediately
after the child attains 18 years of age.
The plan, besides offering risk cover, also offers payment of Sum Assured in instalments at age
18, 20, 22, 24 and Guaranteed and Loyalty additions, if any, at 26 years of age.
In most cases, the father would be the proposer under the plan. But, if the mother of the child has
income of her own i.e. female category I and II she can also propose under the plan. If both
parents are not alive, then legal guardian can propose under the plan. Risk under this plan will
commence either after 2 years from the date commencement of the policy or from the policy
anniversary immediately following the completion of 7 years of age, whichever is later.
The close relations such as grandparents, elder brothers or sisters, uncles both from paternal or
maternal side can gift 'single premium policy' for love and affection under this plan. In such
cases also, the policies will be proposed by father, mother or legal guardian.
The Sum Assured under this plan will be paid in instalments at periodic intervals provided the
policy is in force for full sum assured as under:
20 percent of the Sum Assured on the policy anniversary immediately after the Life Assured
attains the age of 18 years.
20 percent of the Sum Assured on the policy anniversary immediately after the Life Assured
attains the age of 20 years.
30 percent of the Sum Assured on the policy anniversary immediately after the Life Assured
attains the age of 22 years.
30 percent of the Sum Assured on the policy anniversary immediately after the Life Assured
attains the age of 24 years.
Guaranteed Additions:
Rs.75 per thousand Sum Assured per annum at the end of each policy year will be added to the
policy by way of guaranteed additions provided the policy is in full force,
The Guaranteed Additions will be payable
(i) on death or
(ii) on maturity i.e. on policy anniversary immediately after the Life Assured attains the age of
26 years, provided the risk has commenced under the policy.
Loyalty Addition:
Loyalty Additions will also be payable on maturity or on death after the commencement of the
risk under the policy based on the rates declared from time to time, depending on the experience
of the Corporation.
Death Benefits:
In the event of unfortunate death during the term, after the commencement of risk but before
policy matures, the Sum Assured together with Guaranteed Additions is payable without any
deduction or adjustment for the amount that may have been paid earlier by way of instalment
benefits.
Entry Age
Sum Assured
Term
Mode of Payment
Single, Yrly, Half-yly, Qtly,
Salary Savings Scheme.
Min
0
100000
Not Applicable
Max
10
25,00,000
50
Age
Yearly
at
Sum Assured Premium
entry
Payable
12th Year
Amount
payable on
Survival
Guaranteed
Addition
payable on
maturity
Rs.20,000/- on
attainment of
age 18 yrs.
Rs.1,00,000/- Rs.7281/-
Sum Assured
of
Rs.1,00,000/Plus
Guaranteed
Addition of
Rs.52,500/plus Loyalty
Addition* if
any
Sum Assured
of
Rs.1,00,000/Plus
Guaranteed
Addition of
Rs.82,500/plus Loyalty
Addition* if
any
Rs.20,000/- on
attainment of
Sum of
age 20 yrs.
Rs.1,95,000/plus Loyalty
Rs.30,000/- on
addition* if
attainment of
any
age 22 yrs.
Rs.30,000/- on
attainment of
age 24 yrs.
Rs.1,00,000/on attainment
of age 18 yrs.
Sum Assured
of
Rs.5,00,000/Plus
Guaranteed
Rs.5,00,000/- Rs.50,632/Addition of
Rs.2,62,500/plus Loyalty
Addition* if
any
Sum Assured
of
Rs.5,00,000/Plus
Guaranteed
Addition of
Rs.4,12,500/plus Loyalty
Addition* if
any
Rs.1,00,000/on attainment
Sum of
of age 20 yrs.
Rs.7,87,500/plus Loyalty
Rs.1,50,000/addition* if
on attainment
any
of age 22 yrs.
Rs.1,50,000/on attainment
of age 24 yrs
15 years
17 years
Secondary
completed
Higher
secondary
completed
Payout
Needs met
20% of SA*
25% of SA*
20 years
Graduation
completed
25% of SA*
22 years
Post-
30%
policy (Term)
graduation of SA*+Guaranteed
completed Additions+Bonuses
Sum Assured of the plan is paid immediately - assists the family in meeting the
unforeseen expenses incurred because of the unfortunate loss.
Waiver of Premium - no future premia are payable, thereby ensuring that your family is
not burdened financially.
Educational benefits, guaranteed - which means that the future of the child remains
secure.
Thus, there will be no financial obstacle in realizing the dream which the parent or child had.
What are add-on options that you will have with ICICI Pru SmartKid?
With ICICI Pru SmartKid , have the option of taking two add-ons
period, you wish to return your policy after reviewing the terms and conditions, you may do the
same, by returning the original policy certificate, the policy document and a letter stating the
reasons for the return.Please note that these must reach our Customer Service Desk within
15 days after receipt of policy by insured.
ENDOWMENT PLANS
ENDOWMENT POLICIES
What Is Endowment Policy?
Endowment policies cover the risk for a specified period at the end of which the sum assured is
paid back to the policyholder along with all the bonus accumulated during the term of the policy.
It is this feature - the payment of the endowment to the policyholder upon the completion of the
policys term - which rightly accounts for the popularity of endowment policies.
Typically, ones responsibility for the financial protection of the family reduces significantly
once the children are grown up and independently settled. The focus then shifts to managing a
smaller family - perhaps only oneself and ones spouse - after retirement. This is where the
endowment - the original sum assured and the accumulated bonus - received back comes handy.
You can either use the endowment amount for buying an annuity policy to generate a monthly
pension for the whole life, or put it in any other suitable investment of your choice. This is the
major benefit of an endowment policy over a whole life one.
Who Should buy this Plan?
Overall, endowment policies are the most suitable of all insurance plans for covering the risks to
a family breadwinners life. Not only do these policies provide financial risk cover for the
family, were the policy holder to die prematurely but the insurance amount is also repaid once
this risk is over. The endowment amount can then be used for meeting major expenditures such
as childrens education and marriage, etc.
Alternately, the endowment sum is available for a suitable investment geared to providing an
income for the remainder of ones own life. These type of plans are particularly suitable to those
who other than having a risk cover are also interested in a savings component simultaneously.
PLANS BY LIC
1.JEEVAN ANAND
Jeevan Anand is a With Profit Assurance Plan. It is a combination of the Whole Life Plan and the
most popular Endowment Assurance Plan. The plan provides the pre-decided Sum Assured and
Bonuses at the end of the stipulated premium paying term, but the risk cover on the life
continues till death.
Moderate Premiums
High bonus
High liquidity
Savings oriented.
Premiums are usually payable for the selected term of years or until death if it occurs during the
term period.
This policy not only makes provisions for the family of the Life Assured in event of his early
death but also assures a lump sum at a desired age. The lump sum can be reinvested to provide
an annuity during the remainder of his life or in any other way considered suitable at that time.
Accident Benefit
The double Accident Benefit is available during the premium paying term and thereafter up to
age 70. The premium for this has been built into the tabular premium rates. Maximum Accident
Cover available under this plan will be Rs 5 lakh (this limit excludes accident benefit taken
under other plans).
Premium Stoppage
If payment of premiums ceases after at least THREE years' premiums have been paid, a free
paid-up policy for a reduced sum assured will be automatically secured provided the reduced
sum assured, exclusive of any attached bonus, is not less than Rs. 250/-. The reduced sum
assured will become payable on the event as stipulated in the policy.
Bonus
Is there anything extra payable besides the sum assured at the time of claim settlement? Yes, but
only if it is a with profits policy. Every year the Life Insurance Corporation distributes its
surplus among policyholder to with profits polices in the form of bonuses. Substantial bonuses
have been declared in the past after each valuation of policy liabilities.
Rebates for High Sum Assured
Rebates in Tabular Premium per thousand Sum
Assured
Less than Rs. 3,00,000
NIL
Rs.3,00,000 and above but less than Rs. 5,00,000 Re. 1.00
Rs.5,00,000 and above but less than Rs.
Rs. 1.50
10,00,000
Rs. 10,00,000 and above
Rs. 1.75
Sum Assured
In addition to the above, a rebate as per details given below will be available on Sum Assured in
excess of Rs. 5 lac reduced by the Accident Benefit availed under this plan earlier.
(e.g.) If Rs. 2 lac Sum Assured has been taken in Jeevan Anand earlier and Rs.5 lac is currently
being proposed, then the Total Sum Proposed (including previous policy) under Jeevan Anand
would be Rs. 7 lac. However, as the Maximum Accident Benefit available under this plan is Rs.
5 lac, this rebate will applicable on the excess of the Total Sum Proposed (Rs. 7 lac) over Rs. 5
lac i.e. Rs. 2 lac.
(e.g) If Rs. 7 lac Sum Assured has been taken earlier and Rs. 7 lac is being proposed now, the
Rebate will apply on the full Rs. 7 lac.
Survival Benefits
Sum assured along with all vested bonuses payable at the end of the premium paying term
( Endowment term).
Death Benefits
Sum Assured along with vested bonuses are payable on death during the premium paying term
and policy ceases. An amount equal to the Sum Assured is payable if death occurs after the
premium paying term.
Simple Reversionary Bonus accrues during the premium paying term and is payable at the end of
the premium paying term or on earlier death along with Final Additional Bonus, if any. No
Bonus is paid on death after the premium paying term.
Entry Age
Sum Assured
Term
Mode of Payment
Yly, Hlf Yly, Qtly, Mnthly, SSS
Min
18
1,00,000
5
Max Maturity Age
75
Max
65
No limit
57
Policy loan available
Yes
Being an endowment assurance + whole life policy, this plan is apt for people of of all ages and
social groups who wish to protect their families from a financial setback that may occur owing to
their demise.
The amount assured if not paid by reason of his death earlier will payable at the end of the
endowment term where it can be invested in an annuity provision for the rest of the
policyholder's life or in any other way he may think most suitable at that time.
Extended Life
Plan Details:
Under this plan an individual can accumulate funds for future requirements on a regular basis
such as children's higher education, daughter's wedding etc. and simultaneously have an
insurance cover. This is a fixed term policy.
Eligibility:
Minimum
Maximum
Age
0 years
60 Years
Cover-ceasing age
70 Years
Sum Assured
Rs. 50,000
Term
10 Years
Premium
Rs.4,800 p.a.
Under this plan, on the death of the life assured, the beneficiary will get the sum assured,
the guaranteed additions and the vested bonuses.
Once the policy matures, i.e. at the end of the term, you can get the full sum assured and
guaranteed additions as well as the vested bonuses.
In addition, you will get an extended term insurance cover for five years after the
maturity date of the policy for 50% of the sum assured. You will not have to pay any
premia for the same.
Add-ons Or Riders:
Under such a plan you may opt for add-ons or additional benefits as per your requirements.
However, it may be noted that during the tenure of extended life cover, no rider benefits will be
available
Accident Disability Benefit
This benefit is payable in case of disability that occurs as a result of an accident.
Benefits available?
If the life assured is totally and permanently disabled as a result of an accident the following
additional benefits paid :
10% of the sum assured every year for 10 years commencing from the first anniversary
of the Disability Date
The premiums falling due on or after the disability date shall be waived.
If there are any other benefits payable under the Plan then all such benefits shall cease to be
available on and after the Disability Date.
Exclusions:
If death/disability occurs due to the following no benefit will be available
By attempted suicide or self inflicted injuries while sane or insane, or whilst the Life
Assured is under the influence of any narcotic substance or drug or intoxicating liquor; or
By engaging in aerial flights ( including parachuting and skydiving) other than as a fare
paying passenger on a licensed passenger-carrying commercial aircraft operating (being a
multi engined aircraft) on a regular scheduled route; or
By engaging in hazardous sports / pastimes, i.e. taking part in (or practising for) boxing,
caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing,
pot holing, power boat racing, underwater diving, yacht racing or any race, trial or timed
motor sport.
Maximum Cover/Limit:
The maximum cover under accident or disability benefit is Rs. 10,00,000 inclusive of all policies
taken from ICICI Pru life.
Major surgical assistance This rider provides the option to increase your risk cover. The cover
may be increased for an additional amount up to a maximum of the existing basic sum assured
on your policy.
This rider offers death benefit only and can be availed of in three different ways.
Options
One have 3 different options to increase your cover under this rider:
Take the entire amount equal to the Sum Assured under the policy Or
Initially increase the cover for an amount for 50% of the Sum Assured, with an option to
secure a further cover for 50% of the Sum Assured on the event of your marriage. Or
You can opt for an additional amount of 50% of the Sum Assured on your getting
married, with an option to secure further amount of 25% of the Sum Assured on the birth
of the first and the remaining 25% Sum Assured on the birth of the second child
respectively.
Conditions applicable:
You have to be less than 45 years of age when you opt for this rider.
The concerned event under (2) & (3) above should be intimated to the Company not later
than 90 days from the occurrence of the event.
Maximum Limit:
The maximum sum assured under all term insurance policies(including level term rider) with the
company is Rs.10,00,000.
Exclusions:
If the Life assured commits suicide whether sane or insane, within one year from the date of
commencement of this policy, the cover shall be void and the premiums paid hereunder will be
refunded after deducting the expenses incurred by the Company for the issue of the cover.
Critical illness Benefit
In case of a critical illness benefit a rider added to a life insurance policy will cover the following
nine medical conditions. This ensures living benefits payable to the insured for medical expenses
prior to death.
Critical illness covered?
Benefit:
If the Life Assured is diagnosed to be suffering from a specified Critical Illness after six months
from the Date of Policy , the Sum Assured under this Policy shall be paid together with
guaranteed additions and vested bonus.
Conditions applicable:
For the above benefits the critical illness must be diagnosed when
Maximum Limit:
The maximum aggregate of Critical Illness Benefit granted by the Company under all the
policies of the Life Assured shall not exceed Rs 10,00,000.
Exclusions:
Presence of any Human Immuno-deficiency Virus Infection in the person of the Life
Assured
Pregnancy
Breach of law
Aviation other than as a fare paying passenger in a commercial licensed aircraft ( being a
multi-engined aircraft)
The benefit shall not be payable in respect of any illness other than those defined as Critical
Illness, nor shall it apply or be payable in respect of any of those said illnesses the symptoms of
which have occurred or which has been diagnosed or for which the insured person received
treatment, during the first 6 months from the date of policy.
Major Surgical Assistance Benefits
Under such a rider or Add-on the following 43 surgical procedures and emergencies are covered
Benefits:
This benefit is payable on more than one occasion when the life assured undergoes
surgery. However the total benefit payable in case of all the procedures is restricted to a
maximum of 50% of the sum assured.
Eligibility:
The benefit would be available only for medically necessary surgical procedures performed at a
hospital as in-patient
Exclusions:
Pre existing injuries or illnesses, treatment which is not taken from recognised hospitals or
doctors.
HIV/AIDS
Attempted suicide,
Criminal acts,
By engaging in hazardous sports / pastimes, i.e. taking part in (or practising for) boxing,
caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing,
pot holing, power boat racing, underwater diving, yacht racing or any race, trial or timed
motor sport.
No benefit will be payable in respect of a claim which, in the opinion of the companys Chief
Medical officer, results directly or indirectly from a condition for which the insured person has
previously received treatment, or which had previously been diagnosed, or which he was aware
of, at the commencement of the policy or within the first 6 months from the date of policy.
POLICY BY LIC
1.MONEY BACK WITH PROFIT
Unlike ordinary endowment insurance plans where the survival benefits are payable only at the
end of the endowment period, this scheme provides for periodic payments of partial survival
benefits as follows during the term of the policy, of course so long as the policy holder is alive.
In the case of a 12-year policy (Table 73), 20% of the sum assured becomes payable each
at the 4th and 8th years, and the balance 60% plus the accumulated bonus at the end of
the 12-year term.
Similarly, for a policy of 15 years (Table 74), 25% of the sum assured is payable each
after 5 and 10 years, and the balance 50% of the sum assured together with the
accumulated bonus at the end of the 15th year.
In the case of a 20-year Money-Back Policy (Table 75), 20% of the sum assured becomes
payable each after 5, 10, 15 years, and the balance of 40% plus the accrued bonus
become payable at the 25th year.
For a Money-Back Policy of 25 years (Table 93), 15% of the sum assured becomes
payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus
become payable at the 25th year.
An important feature of this type of policies is that in the event of death at any time within the
policy term, the death claim comprises full sum assured without deducting any of the survival
benefit amounts, which may have already been paid as money-back components. Similarly, the
bonus is also calculated on the full sum assured.
The extra premium for this benefit is very reasonable and well worth it, unlike in the case of the
whole life anticipated policy.
Survival Benefits:
Period
5 Years
10 Years
15 Years
20 Years
25 Years
Death Benefits:
Min
Entry Age
Sum Assured
Term
Mode of Payment
Yly, Hlf-Yly, Qtly, Mnthly,
SSS
Max
13
50
50,000
No limit
Fixed at 20 for plan 75 and 25 for plan 93
This plan holds special interest to people who besides wishing to provide for their old age and
family feel the need for lump sum benefits at periodical intervals.
This plan meets with periodical needs although loans are not granted under this policy. A
terminal bonus is granted though.
The basic bonus under this plan is slightly lower than the rate applicable to endowment
assurances. During 1998-99, LIC issued 40.23 lakh policies under this scheme.
POLICIES BY ICICI
Survival Benefits:
On the death of the life assured, the beneficiary will get the full sum assured, the guaranteed
additions and the vested bonuses.
Policy Term
At end of year
3
6
9
12
15(Maturity)
15 years
Survival Payment as a % of basic sum assured
10%
15%
20%
25%
50% plus guaranteed additions plus vested bonuses
Policy Term
At end of year
4
8
12
16
20(Maturity)
20 years
Survival Payment as a % of basic sum assured
10%
15%
20%
25%
50% plus guaranteed additions plus vested bonuses
Benefits available? If the life assured is totally and permanently disabled as a result of an
accident the following additional benefits paid :
10% of the sum assured every year for 10 years commencing from the first anniversary
of the Disability Date
The premiums falling due on or after the disability date shall be waived.
If there are any other benefits payable under the Plan then all such benefits shall cease to be
available on and after the Disability Date.
Exclusions:
If death/disability occurs due to the following no benefit will be available
By attempted suicide or self inflicted injuries while sane or insane, or whilst the Life
Assured is under the influence of any narcotic substance or drug or intoxicating liquor; or
By engaging in aerial flights ( including parachuting and skydiving) other than as a fare
paying passenger on a licensed passenger-carrying commercial aircraft operating (being a
multi engined aircraft) on a regular scheduled route; or
By engaging in hazardous sports / pastimes, i.e. taking part in (or practising for) boxing,
caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing,
pot holing, power boat racing, underwater diving, yacht racing or any race, trial or timed
motor sport.
Maximum Cover/Limit:
The maximum cover under accident or disability benefit is Rs. 10,00,000 inclusive of all policies
taken from ICICI Pru life.
Major surgical assistance This rider provides the option to increase your risk cover. The cover
may be increased for an additional amount up to a maximum of the existing basic sum assured
on your policy.
This rider offers death benefit only and can be availed of in three different ways.
Options:
You have 3 different options to increase your cover under this rider:
Take the entire amount equal to the Sum Assured under the policy Or
Initially increase the cover for an amount for 50% of the Sum Assured, with an option to
secure a further cover for 50% of the Sum Assured on the event of your marriage. Or
You can opt for an additional amount of 50% of the Sum Assured on your getting
married, with an option to secure further amount of 25% of the Sum Assured on the birth
of the first and the remaining 25% Sum Assured on the birth of the second child
respectively.
Conditions applicable:
You have to be less than 45 years of age when you opt for this rider.
The concerned event under (2) & (3) above should be intimated to the Company not later
than 90 days from the occurrence of the event.
Maximum Limit:
The maximum sum assured under all term insurance policies(including level term rider) with the
company is Rs.10,00,000.
Exclusions:
If the Life assured commits suicide whether sane or insane, within one year from the date of
commencement of this policy, the cover shall be void and the premiums paid hereunder will be
refunded after deducting the expenses incurred by the Company for the issue of the cover.
Critical illness Benefit
In case of a critical illness benefit a rider added to a life insurance policy will cover the following
nine medical conditions. This ensures living benefits payable to the insured for medical expenses
prior to death.
Critical illness covered?
Benefit:
If the Life Assured is diagnosed to be suffering from a specified Critical Illness after six months
from the Date of Policy , the Sum Assured under this Policy shall be paid together with
guaranteed additions and vested bonus.
Conditions applicable:
For the above benefits the critical illness must be diagnosed when
Maximum Limit:
The maximum aggregate of Critical Illness Benefit granted by the Company under all the
policies of the Life Assured shall not exceed Rs 10,00,000.
Exclusions:
Presence of any Human Immuno-deficiency Virus Infection in the person of the Life
Assured
Pregnancy
Breach of law
Aviation other than as a fare paying passenger in a commercial licensed aircraft ( being a
multi-engined aircraft)
The benefit shall not be payable in respect of any illness other than those defined as Critical
Illness, nor shall it apply or be payable in respect of any of those said illnesses the symptoms of
which have occurred or which has been diagnosed or for which the insured person received
treatment, during the first 6 months from the date of policy.
Major Surgical Assistance Benefits
Under such a rider or Add-on the following 43 surgical procedures and emergencies are covered
Benefits:
This benefit is payable on more than one occasion when the life assured undergoes
surgery. However the total benefit payable in case of all the procedures is restricted to a
maximum of 50% of the sum assured.
Eligibility:
The benefit would be available only for medically necessary surgical procedures performed at a
hospital as in-patient
Exclusions:
Pre existing injuries or illnesses, treatment which is not taken from recognised hospitals or
doctors.
HIV/AIDS
Attempted suicide,
Criminal acts,
By engaging in hazardous sports / pastimes, i.e. taking part in (or practising for) boxing,
caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off piste skiing,
pot holing, power boat racing, underwater diving, yacht racing or any race, trial or timed
motor sport.
No benefit will be payable in respect of a claim which, in the opinion of the companys Chief
Medical officer, results directly or indirectly from a condition for which the insured person has
previously received treatment, or which had previously been diagnosed, or which he was aware
of, at the commencement of the policy or within the first 6 months from the date of policy.
Options:
You have 3 different options to increase your cover under this rider:
Take the entire amount equal to the Sum Assured under the policy Or
Initially increase the cover for an amount for 50% of the Sum Assured, with an option to
secure a further cover for 50% of the Sum Assured on the event of your marriage Or
You can opt for an additional amount of 50% of the Sum Assured on your getting
married, with an option to secure further amount of 25% of the Sum Assured on the birth
of the first and the remaining 25% Sum Assured on the birth of the second child
respectively.
Conditions applicable:
You have to be less than 45 years of age when you opt for this rider.
The concerned event under (2) & (3) above should be intimated to the Company not later
than 90 days from the occurrence of the event.
Maximum Limit:
The maximum sum assured under all term insurance policies(including level term rider) with the
company is Rs.10,00,000.
Exclusions:
If the Life assured commits suicide whether sane or insane, within one year from the date of
commencement of this policy, the cover shall be void and the premiums paid hereunder will be
refunded after deducting the expenses incurred by the Company for the issue of the cover.
Eligibility:
Minimum sum assured: Rs.75,000.
Discontinuation of Policy:
Policy can be discontinued after premiums are paid for three years and a guaranteed surrender
value will be payable to the insured. However, it may be noted that the insurance protection
provided under this policy will also cease.
Exclusions:
In case the Life assured commits suicide whether sane or insane, within one year from the date
of commencement of the policy, the policy shall be void and the premiums paid will be refunded
by the company after deducting the expenses incurred by the Company for the issue of the
policy.
PENSION PLAN
There are several options that are used when the proceeds of an annuity are distributed.
Life annuity
The first is a life annuity, which guarantees you a specified amount of income for your life. On
death, the annuity payments cease but your investment is refunded to your estate.
Guaranteed Period annuity (Certain and Life)
A guaranteed minimum annuity, on the other hand, not only provides you with a specified
income for your lifetime but, in addition guarantees that your estate will receive payments for a
certain minimum number of years, say ten years, even if you should die earlier. On the other
hand, should you live longer than ten years, you are entitled to receive annuity payments for you
lifetime.
Obviously, any annuity that firmly guarantees benefits to you or your estate can be purchased by
paying higher annuity premiums.
Annuity 'Certain'
Under Annuity 'Certain", the stipulated annuity is paid for a fixed number of years. The annuity
payments come to an end at the end of that period, irrespective of how much longer you may
live.
However, the selected period remaining annuity installments are paid to the nominees.
Deferred annuities
The premiums paid into such annuities may be deducted from ones taxable income at the time
of payment. In addition, the interest earned on the annuities is not taxed immediately. This can be
quite advantageous, especially to tax payers in higher tax brackets.
Nonetheless, the proceeds of the annuity (which will include accumulated interest) will be
taxable when they are paid to you or to your estate as annuity payments.
Deferred annuities eventually result in present tax savings.
When do one receive annuity payments?
Broadly, there are two types of annuities vis-a-vis when you receive annuity payments: an
immediate annuity, and the deferred annuity.
In the first case you start receiving annuity payments as soon as one pay the premium, which is
usually in a lump sum.
In the case of a deferred annuity, the payments to the annuitant start after a certain deferment
period. Typically, the annuitant pays annuity premiums in instalments during the deferment
period.
Generally, one will pay less premium for an annuity that provides future payments because the
deferment period allows the insurance company to invest your premiums at a profit, thereby
reducing the cost of the annuity to one.
This pension plan is a vehicle for planning a life long pension and is also tax deferred. Not only
can you plan a pension for life with the help of these annuities but these schemes also help you
reduce your tax liability.
>=1,00,000 <
2,00,000
>=2,00,000 <
5,00,000
>= 5,00,000
Rebates Available
for Single Premium
3%
4%
5%
Rebates Available
for Annual
Premium
6%
7%
8%
Both rebates will be applied separately on the Tabular Premium and not after the other has been
applied.
Paid up, Guaranteed and Special Surrender Value.
For Annual Premium Plans: The Guaranteed Surrender Value will be equal to 90% of all
premiums paid excluding the first year premium, all Term Assurance premium and extra
premium (if any). This will be allowed after at least two full years premiums have been paid and
will be available after two full years have been completed from the date of commencement.
However, the policy cannot be surrendered after the annuity vests.
For Single Premium Plan: The Guaranteed Surrender Value will be 90% of the single premium
paid. Surrender will be allowed 2 years after the commencement of the policy.
Special Surrender Value: For Annual premium policy this will be available at least two years
after date of commencement and during deferment period if at least two full years premium
have been paid.
Note: For Single premium policies, this will be available one year after the date of
commencement and during the deferment period. The special surrender value will be quoted
separately. Surrender value will not be available for the Term Rider Benefit.
Days of Grace: The days of grace will be one calendar month but not less than 30 days under
the yearly, half-yearly and quarterly modes of payment of premium. For monthly mode, the days
of grace will be 15 days.
Non-forfeiture regulations:
Paid up benefits:If, after at least two full years premiums are paid in respect of this policy, any
subsequent premium be not duly paid, the policy shall not be wholly void, but the amount of
Notional Cash Option shall be reduced to such a sum as shall bear same ratio to the original, as
the number of premiums actually paid shall bear to the total number of premiums originally
stipulated for in the policy.
The policy so reduced will thereafter be free from all liabilities for payment of the within
mentioned premiums but shall not be entitled to participate in future profits. The existing vested
Bonus additions will attach to the reduced paid up policy and this will determine the reduced
annuity payable on vesting. The option of commutation of 25% pension will also be available on
the vesting age. If however the annuity payable is less than the minimum of Rs. 250/-, the
Corporation will have the right to change the mode of payment of annuity to yearly, half-yearly
or quarterly or to pay a lump sum subject to deduction of tax if any, at source as per the
prevailing taxation rules. In the event of non-payment of the premiums within the days of grace
the life cover will cease.
Note: Paid up benefits are not available for the Term Rider Option.
Loans/Assignment:
There is no provision for loans or assignments under this plan.
Revival:
Policies with Term Assurance Rider:
Rules relating to the revival of the Term Assurance Rider will apply.
Policy without the Term Assurance Rider:
Policies can be revived at any time on payment of all arrears of premiums with interest @ 10.5%
p.a. compounding half yearly. This rate of interest is likely to change from time to time.
On vesting:
The Notional Cash Option together with Reversionary Bonuses and Final additional Bonuses ( if
any ) with or without 25% commutation will be compulsorily converted into annuity having
following options.
Annuity for life:
Annuity for life with guaranteed period of 5, 10, 15, 20 years.
Joint life and last survivor annuity to the annuitant and his/her spouse under which annuity
payable to the spouse on death of the purchaser will be 50% of that payable to the annuitant.
Life annuity with return of purchase price.
Life annuity with annuities increasing at a simple rate of 3% per annum.
The annuity rates will be that available under the version of the New Jeevan Akshaya Plan
current at the date of vesting. A rebate of 3% will be available on the purchase price of the New
Jeevan Akshaya Policy. Option for the annuity type is to be exercised at least 6 months before
the date of vesting.
During Deferment:
A term rider option will be available. On the death of the policyholder who has opted for the
term Assurance rider (provided the policy is in-force), the Term Assurance Sum Assured along
with all premiums (excluding term Assurance premium and extra premium if any) paid up to the
date of death accumulated at the rate of 5% p.a. compounding or at such rates as decided by the
Corporation from time to time will be paid to the nominee. When the policy is not in-force, only
return of premiums with interest as stated above will be available.
For those not opting for the Term Assurance Rider, in respect of policies which are in-force or in
a paid up condition, all premium accumulated at 5% p.a. compounding or at such rates as
decided by the Corporation from time to time, will be paid to the nominee. Term Rider Option
will be available only on the Annual Premium Plan.
Rebates:
Premium will be payable yearly, half-yearly, quarterly or monthly (including SSS) or by single
premium. Mode rebates @ 2.6%, 1.3% and 0.5% of the tabular annual premium will be available
for yearly, half- yearly and quarterly premiums.
Entry Age
Vesting Age
Deferment Period
Minimum
Min
18
50
2 years
Notional cash
option
Rs. 50,000 for
regular premium
policies
Max
65
79
35 years.
Single premium
Annual premium
Rs. 10,000/-
Rs. 2500
Plan Details:
LifeLink pension provides regular income for life from a date that can be chosen by the
policyholder. The amount received will depend upon the premiums paid, the market value of the
investment and the option of the annuity chosen.
During the deferment period, a part of the premium will be used to pay for the initial charges and
the rest will be invested in the plan chosen by the policyholder. Entry into the plan will be based
on the unit value applicable on the date of issuance.
Minimum premium:
The minimum premium payable is Rs.40, 000.
Eligibility:
Minimum age: 18 years
Maximum age: 62 years.
The insured has the flexibility of choosing the vesting age between 50 and 70 years of age.
Minimum product term: 3 years.
Survival Benefit:
Annuity Benefit:
On the date of vesting (retirement), the policyholder will begin receiving a regular income for
life. This amount would depend upon the annuity option chosen by him and the value of units as
on the vesting date. The annuity would also depend upon the annuity rates offered by the
company as on that date and are not guaranteed.
On vesting, the policyholder will have the option of taking upto 25% of the value of units as
lumpsum. The remaining will be used to provide with a regular stream of income for life.
Flexibility options:
Annuity Options:
Life Annuity with Return of Purchase Price: Life Annuity for the annuitant with the
return of the purchase price to the beneficiary.
Life Annuity Guaranteed for 5, 10, 15 years: Guaranteed Annuity is paid for the
chosen term (5/10/15) and after that the annuity continues if at that time annuitant is
alive.
Joint Life, Last Survivor with Return of Purchase Price: in this case the annuity is
first paid to the annuitant, after the death of the annuitant the spouse starts getting a
pension which is equal in amount of the annuity paid to the annuitant. After the death of
the last survivor the purchase price is returned back to the beneficiary.
Choice of Retirement Date: Flexibility to postpone the vesting age upto a maximum of
70 years of age.
Other Charges:
Annual administrative charges of 1.00% p.a. of net assets for protector (Income) and 1.25% p.a.
for Maximiser (Growth) and Balancer (Balanced) options. Annual investment charge of 0.5%
p.a. of the net assets for Protector and 1% p.a. of the net assets for Maximiser and Balanced.
Tax benefits
Tax benefit u/s 80CCC(1):
upto Rs.10,000 deducted from the taxable income.
SWOT ANALYSIS
Strengths:
a. Dedicated Employees.
b. Well Efficient Management.
c. Technology.
d. Diversification of funds.
e. Strong and popular brand name.
f. Adaptability to changes.
Weakness:
a. Lack of good services.
b. Lack of awareness about insurance among people.
Opportunities:
a. Fast growing economy.
b. Increasing per capita income in India.
c. Saving behavior.
Threats:
a. Arrival of new entrants in the insurance industry.
b. Cut throat competition within the industry
REVIEW OF LITERATURE
MEANING OF LIFE INSURANCE
The head of the family generally supports the family for their basic needs, such as,
food, clothing & shelter by bringing income at a regular interval. So long as he or she lives & the
income is received steady, the family is secure; but untimely death or disability of the person
puts the family in a very difficult situation, and sometimes in stark poverty. Uncertainty of death
is inherent in human life.
It is the uncertainty that is risk, which gives rise to the necessity for some form of
protection against the financial loss arising from death. Insurance substitutes this uncertainty by
certainty.
The primary purpose of life insurance is the protection of the family. Insurance in its
various forms protects against such misfortunes by having the losses of the unfortunate few paid
by the contribution of the many that are exposed to the same risk. This is the essence of
insurance the sharing of losses and substitution of certainty for uncertainty.
RESEARCH METHODOLOGY
TYPE OF RESEARCH
The research includes different options. They are:
Exploratory research:
It is usually a small-scale study undertaken to define the exact nature of a problem and to
gain a better understanding of the environment within which the problem has occurred. It is the
initial research, before more conclusive research is under taken.
Descriptive research:
It is to provide an accurate picture of some aspects of market environment. Descriptive
research is used when the objective is to provide a systematic description that is as factual and
accurate as possible. It provides the number of time something occurs, or frequency, lends itself
to satisfied calculations such as determining average number of occurrences.
Casual research:
If the objective is too determined which variable might be causing a certain behavior that
is whether there is a cause and effect relationship between variable, casual research must be
undertaken. In order to determine causality, it is important to hold the variable that is assumed to
cause the change in the other variable constant and than measure the changes in the variable.
This type of research is very complex and the researcher can never be completely certain that
there are no other factors influencing the casual relationship, especially when dealing with
peoples attitudes and motivation.
This research is about understanding the market stand and also find the strength &
weakness of the products of three insurance companies by making comparing analysis of the
products of the companies, mainly descriptive research methodology are adopted. Descriptive
research was adopted since it provides accurate picture about some aspect of market environment
such as which brand is performing well and what the company can do to improve its market
share.
SAMPLING PROCEDURE
How should the respondents be chosen? To obtain a representative sample and non-probability
sample can be drawn, they are
Judgment sample:
The researcher selects population numbers who are good prospects for accurate
information.
For collection of research data judgment-sampling technique is used where all of them
are employees of the three insurance companies as they are good prospect for accurate
information.
ACTUAL COLLECTION OF DATA
Data sources:
The sources of data include either secondary data or primary data and even some times the
combination of both. The present study is more concentration on both primary and secondary
data.
Primary data:
Primary data is collected through face-to face interaction with employees of the insurance
companies, by meeting them in personal.
Secondary data:
The secondary data used for their study are inclusive of the data collected from
the internet, catalogues and brochures and magazines.
METHODOLOGY
The study will conduct on the bases of survey through questionnaires given to
respondents.
Sampling Design
Population: delhi
Sample Size: Population of 100
Sample Technique: Convenience Sampling
The life insured can name the person or persons to whom the policy money would be payable in
the event of his death .the proceeds of a life insurance policy can be protected against the claims
of the creditors of the life insured by effecting a valid assignment of the policy. The beneficiaries
are fully protected from creditors expect to the extent of any interest in the policy retained by the
insured.
Marketability and suitability for borrowing
After 3 years, if the policyholder finds that he is unable to continue payment of
premiums he can surrender a policy for a cash sum. A life insurance policy is accepted as a
security for a commercial loan.
Loans from the insurance company
A policy holder can take a loan from his insurance company against the
Security of his life insurance policy provided the terms of the terms of his policy allow such a
loan. This loan can be taken usually after a period of 3 years from commencement of the policy
and is a percentage of its surrender value.
Investment options
The unit link products gives comprehensive insurance solutions that cater to an
individuals dual need of earning potentially high returns as well as stay for life. Thus there is an
option to invest money in the products that combine the best of insurance and investment. In a
volatile market conditions it is possible to secure both as one can hedge the investment with
saver investment vehicles that provide a diversified portfolio.
Tax benefits
The Indian income tax act provides tax concessions to the policyholder both on
payment of premium and on the maturity amount. Under sec 88 the tax benefits on premium paid
by an individual for life insurance policies on his own life\on the life of spouse \children minor
or major, including married daughters.
Protection to wife and children
Under sec 6 of the married womens property act if a married man takes a policy of life
insurance on his own life and expenses on the face of it to be for the benefit of his wife or of his
wife and children or any of them, then it shall be deemed to be a trust for the benefit of his wife
and children or any of them,
According to the interest so expressed and shall not so long as any object of trust remains be
subject to the control of the husband or to his creditors or form part of his estate. An insurance
policy taken by a married man in the above manner is ideal way to protect the interest of his wife
and children, even after his untimely death.
The insurance industry and rent seeking
Certain insurance products and practices have been described as rent seeking by critics.] That is,
some insurance products or practices are useful primarily because of legal benefits, such as
reducing taxes, as opposed to providing protection against risks of adverse events. Under United
States tax law, for example, most owners of variable annuities and variable life insurance can
invest their premium payments in the stock market and defer or eliminate paying any taxes on
their investments until withdrawals are made. Sometimes this tax deferral is the only reason
people use these products. Another example is the legal infrastructure which allows life
insurance to be held in an irrevocable trust which is used to pay an estate tax while the proceeds
themselves are immune from the estate tax.
identify needs, evaluate options, purchase sufficient insurance protection, and minimize the risk
of heavy financial loss for themselves and their family.
Controversies
Insurance insulates too much
By creating a "security blanket" for its insureds, an insurance company may inadvertently find
that its insureds may not be as risk-averse as they might otherwise be (since, by definition, the
insured has transferred the risk to the insurer,) a concept known as moral hazard. To reduce their
own financial exposure, insurance companies have contractual clauses that mitigate their
obligation to provide coverage if the insured engages in behavior that grossly magnifies their risk
of loss or liability.
For example, life insurance companies may require higher premiums or deny coverage altogether
to people who work in hazardous occupations or engage in dangerous sports. Liability insurance
providers do not provide coverage for liability arising from intentional torts committed by the
insured. Even if a provider were so irrational as to want to provide such coverage, it is against
the public policy of most countries to allow such insurance to exist, and thus it is usually illegal.
CONCLUSION
The financial markets have continued to witness unprecedented liberalization, growth and
reforms over the last decade prompted by regulatory compulsions and a rapid integration
between domestic and global markets. And as a result, one has seen substantial growth in the
number of financial firms (insurance companies, mutual funds, brokerages, banks etc.) and in the
number and variety of financial products and services offered by them. As the need of the people
is changing so is changing the investment habits of the people and this has brought in a spate of
new products and schemes where people can invest. The concept of insurance as an investment
option has arrived where people first identify the varying needs of money then converts the
needs into specific amount of money and time required to achieve the objective of investments
plans. The objective of insurance as an investment is to ensure that investments are driven by pre
determined and well thought out investment plan and that the investments are suitable and
adequate to meet these plans. But for this the planner must understand the universe of
investments options. He/she must be well informed on the risk and return attributes of these
options.
In addition to the above, companies should also innovate to come up with better products that
would suit the Indian population and should also try to market and sell their products through
new channels of distribution that can be effective in selling their products to the masses. People
should identify their needs and then decide on the type of policy they want to invest in. insurance
is a good investment option for those people who do not know where to invest and who do not
want to the risk of capital erosion. But, people who are financially savvy can opt for term
insurance and invest the rest in other options that may give them higher returns.
Life Insurance Corporation of India is one of the worlds largest Financial Institution with assets
of over 5 lakh crores .It ensures smiles to over a 100 crore people in India and continous to do so
by insuring there lives.
LIC is an organization which every Indian is proud to be associated, be it working for or utilising
its vast network of computerised services.
LIC plays a major role in the Nations Development , as there is no single project done by the
center without the involvement of LIC. LIC underwrites the shares of almost all public issues.
When the stock markets plunged it just took no time for LIC to bring back the cheers and smiles
on to the faces of the investors,as it is a major player on the Indian stock markets.
LIC is not a top organization for these reasons alone but take a note that every single paisa is
accounted for in LIC, as not even a single rupee goes missing from the records.lic perform the
main duty of an Insurer ie they pay MATURITY AND DEATH CLAIMS ON TIME.lic
understand the value of Money.
The VARIETY OF PLANS offered by LIC is another beauty of LIC, which not many people are
aware of.It is the Nations Pride and i am proud to be a part of it. The private insurers boast of the
state of art offices with all the gadgets, but there is total work satisfaction only with the
employees of LIC. None of the monies belong to LIC it is the money of the policyholders and is
utilized by the government only for the welfare of the policyholders.
By welfare of the policyholders i mean investing not for PROFITS but for building
infrastructure, bridges, dams for providing water and electricity to one and all..It is only involved
in Public Welfare for the last 50 years and continues to do so.
LIC has thus starved for only National Development and not Personal Growth.So i am proud of
my association with this world class Organization.
Private players in the life insurance business are growing at a scorching pace. Within three years
of their inception, they have seized about 14 per cent of the market.
Compare this to new generation private-sector banks, which took nine years for 20 per cent share
in the Indian banking industry. And after seven years in the industry, in 2000, private mutual
funds accounted for just 9 per cent of a market that had been dominated by the Unit Trust of
India.
There's another dimension to the insurance numbers game. While the private insurance
companies have attained 13 to 14 per cent share of the overall insurance market, their share in
the key metros (Mumbai and Delhi) is as high as 30 to 40 per cent.
Private insurance companies are essentially joint ventures with global insurance companies
holding a maximum of 26 per cent stake. The foreign partners are investing heavily in the Indian
market and, thereby, driving sales, because they see India emerging as one of the biggest markets
in the Asian region.
"India will become the biggest market for us in the next three to four years," predicts Dan
Bardin, Prudential Corporation Asia managing director south Asia and greater China.
Private players have certainly done their bit to increase the penetration levels of insurance,
mainly by creating alternative distribution channels--such as associations with banks, brokers
and corporate agents.
In sharp contrast, most of the LIC's policies continue to be sold through its tied-agency network.
The state life corporation acknowledges that it is unable to maintain its lead in some metros:
penetration by the private-sector insurers has come of age and they are giving the LIC a run for
its money.
The multi-channel approach adopted by private insurance companies has proved to be a boon in
terms of costing and their ability to capture business. Earlier, most private insurance companies
focused their energies on the top 20 cities. Today they are moving to smaller cities.
"The potential in smaller cities is increasing and companies are moving to smaller cities and
towns because these are increasingly becoming more prosperous with a rise in agricultural
income. With the increase in buying power, this has fuelled growth opportunities forprivate
players.
another private player, has tied up with various chit funds and transport finance companies in the
country, where it is selling life policies on the back of fixed deposits and bonds. A senior
company official cites the example of Vijaywada where a significant portion of the income is
derived from farming activities.
"The rural populace is managing their money well and no longer keeping it under their beds.
They have mobile phones and have opened bank accounts. They are not very different from their
urban counterparts when it comes to purchasing life insurance covers," he points out.
And that's making the private sector optimistic about its future in the Indian insurance market. "
[private insurers] are becoming an alternative to LIC. If a customer has already bought an LIC
plan, his second policy is likely to be bought by the private insurance sector on account of
various reasons--more specifically flexibility and transparency,"
Perhaps this partly explains why the LIC has increased its advertising spend multifold since the
insurance sector was privatised. Its ad spend more than doubled to Rs 81 crore (Rs 810 million)
in fiscal 2003, against Rs 37 crore (Rs 370 million) in 1999-2000, prior to the industry being
privatised.
Of course, the private insurance sector has also been steadily increasing its ad spend, from Rs 29
crore (Rs 290 million) in fiscal 2001 when the industry opened up, to Rs 92 crore (Rs 920
million) the following year. In fiscal 2003, private insurers spent Rs 143 crore (Rs 1.43 billion)
on advertising.
But it's not the increased spend on advertising alone that has helped private players in grabbing
market share. One of the key differential factors responsible for their growing market is the
150,000-odd life insurance advisors of the private insurance companies. "The private insurance
agents sell better than their counterparts at the LIC. Life insurance advisors of private sector
insurance companies adopt the need-based selling approach, unlike the LIC's agency force that
pushes the number of policies,"
REFERENSES
BOOKS:
Life and Health Insurance Kenneth Black and Harold D.
Fundamental of Risk and Insurance- Emmet J Vaughan and John Willy
WEBSITES
www.licindia.com
www.irdaindia.org
www.iciciprudential.com
www.wikipedia.com
NEWSPAPERS
TIMES OF INDIA
APPENDICES
QUESTIONNAIRE
1. Occupation
a) Businessman [ ]
c) Students
[ ]
b) Professional
d) House wife
[ ]
[ ]
[ ]
[ ]
Agents
13. How long have you been investing in the above LICs Policy?
Less than 1 year 1 year-2 years
2 year-3years
3 years and more
14. How do you rate the quality of service provided by LIC?
Good Very good
Average
Bad cant say
15. Did you try out any other Companys policy?
Yes
No
If any other please specify.
16. How do you rate LIC by our other company insurance Policy?
Good
Very good
Average
Bad
cant say
Thank you
Date:
Signature