Professional Documents
Culture Documents
PROJECT REPORT
ON
A COMPARATIVE STUDY OF ULIP PLANS OFFERED BY
ICICI PRUDENTIAL AND
COMPANIES
OTHER
LIFE
INSURANCE
Submitted To:
PUNJAB TECHNICAL UNIVERSITY,
JALANDHAR
(Session 2008-10)
UNDER GUIDANCE OF:
SUBMITTED BY;
Dixit Kumar
Roll No. : 80906317020
SVIET
College name
Preface
MBA is a stepping-stone to the Management carrier and to develop good Managers is
necessary that the theoretical must be supplement with exposure to the real
environment.
Theoretical knowledge just provides the base and its not sufficient to produce a good
Manager thats why the practical knowledge is needed.
Therefore the Research Project is an essential requirement for the student of MBA.
This research project not only helps the students to utilize his skills properly and learn
field realities but also provides a chance to the organization to find out talent among
the building Managers in the very beginning.
In accordance with the requirement of MBA course I have done my research project
on the topic COMPARATIVE STUDY OF ICICI PUDENTIAL AND OTHER
LIFE INSURANCE COMPANIES with special reference to ICICI Prudential.
GUIDES CERTIFICATE
(PROJECT GUIDE)
INDEX
I. PREFACE
II. CERTIFICATE
III. EXECUTIVE SUMMARY
IV. LITERATURE REVIEW
Sr.no
Chapter-1
Title
INTRODUCTION
Roles of insurance
Chapter-2
INDUSTY PROFILE
Chapter-3
COMPANY PROFILE
Chapter-4
RESEARCH METHODOLOGY
Chapter-5
COMPARATIVE STUDY
Chapter-6
Chapter-7
LIMITATIONS
(i)
RECOMMENDATIONS
(ii)
CONCLUSION
(iii)
BIBLIOGRAPHY
(iv)
ANNEXURE
Literature Review
5
How a company does announced a name change especially when the old name was
well known? How does the company explain itself to constituents who may have
known the company quite well in an earlier incarnation but may be struggling to
figure out what the new organization stands for? How can the company create a new
image while retaining the strengths of the old one? And what role might corporate
advertising play in all this? Corporate advertising can tell a story about a company as
a whole, large organizations may need to use corporate ads to simplify their image in
the minds of key constituents and to show what unifies the company, despite the
geographical spread and variety of its businesses.
We can very well understand the concept of corporate advertising by taking the
example of ICICI Prudential communication. When Company first began operations,
the task was to present the visiting card of the company to the public at large and
build credibility and stature and to give the consumer the confidence that ''here is a
company that can be trusted to invest funds with.''
This required a corporate campaign - to establish the brand, build awareness and give
the brand a larger-than-life image.
The advertising idea, which was encapsulated in symbols of protection from the initial
print campaign, culminated in the corporate film where sindhoor was used as an
endearing and lasting symbol of protection. Once the corporate image and brand
identity were established, and as the company expanded and its product range grew,
the next phase of communication was to give the
consumer a rational and tangible reason to buy - first of all insurance and secondly
from ICICI Prudential Life. This was tackled through product-specific advertising,
such as for ICICI Pru Smart Kid, retirement solutions or LifeTime.
Key Summery
Boost both employee management relation & employee morale enabling all
EXECUTIVE SUMMARY
Objectives:
Working of the unit linked insurance plans
Swot analysis of the product
Comparative study of the competition
Study tax planning solutions available in the market
Study asset allocation through insurance plans
Market interface
Research Methodology:
Primary data collected by personally visiting these leading insurance players. Eg:
LIC, Max New York Life Insurance, Bajaj Alliance, Birla Sunlife, HDFC Stan life.
Data Collection:
Primary data collected through direct intrection with customer.
Sample size 100 people.
Secondary database from different magazines.
First and foremost, accumulating information from newspapers ,
Journals, Magazines, and company webside.
Secondly, taking a sample size and doing a market survey by filling up
questionnaires from customers to find out what different companies are
offering in the ULIP section and how are they similar/different from ICICI
PRUDENTIAL products. Also keeping a track and taking down the
feedback regarding perception, attitude, taste and preferences of the
customer.
Thirdly, analyzing the data collected. Comparing the ULIP products
offered by other insurance players.
Critical analysis of consumer perception; their choice and preferences.
Eventually, deciding on how to familiarize ULIP products in the market
and what all safeguards need to be taken while approaching the customers.
CHAPTER-1
INTRODUCTION TO INSURANCE
LIFE
INSURANCE
GENERAL
efforts have gone a long way in building up the assets. In that sense, human life is a
unique income generating assets. Unlike the physical assets, which decrease in value
with passage of time, the individual becomes more experienced and more matured as
he advances in age. This raises his earning capacity and the purpose of life insurance
10
is to protect the income in the event of his premature death. The individual himself
also needs financial security for the old age or on his becoming permanently disabled
when his income will stop. Insurance also has an element of savings in certain cases.
How insurance works?
Suppose there are 1000 persons all aged 35 years and healthy lives. They are insured
for one year against the risk of death. Each person is insured for Rs. 50,000. If the
past experience indicated that 4 out of 1000 persons, at this age are expected to die
during the year, expected amount of death claim to be paid to the family of four
persons would come to Rs. 2,00,000. The contribution to be paid by each of the 1000
persons will come to Rs. 200 per year. Thus, all the 1000 persons share loss caused to
the 4 unfortunate families. 996 persons who survived till one year have not lost
anything as they secured peace of mind and a feeling of security of their family. While
insurance cannot prevent accidents or premature death, it can help protect the family
of the decreased against the loss of income caused by the death of the main
breadwinner. In return for specified payments, insurance will provide protection
against the incidence of an uncertain event- such as premature death. The business of
insurance company called insurer is to bring together persons who are exposed to
similar risks, collect contribution (premium) from them on some equitable basis and
pay the losses (claims) to the unfortunate few who suffer.
Classification of Insurance
Insurance business can be divided into two broad categories, life and non-life. Life
insurance is concerned with making provision for a specific event happing to the
individual, such as death whereas non life (or general insurance) is more commonly
concerned with the provision for a specific event which affects a property, such as
fire, flood, theft etc. In this course we will only cover life insurance. So, let us now
move on to the definition of life insurance.
According to the U.S. Life Office Management Association Inc. (LOMA), life
insurance is defined as follows: Life insurance provides a sum of money if the person
who is insured dies whilst the policy is in effect.
12
One of your most important responsibilities as a parent is to ensure that your child
gets the best possible education that can be provided.
ICICI Prudential offers a wide portfolio of education insurance plans that are designed
to provide peace of mind to you, as a parent, that your child's education will be
secure. These plans ensure that money is made available at the crucial junctures in a
child's education - Class X, Class XII, graduation and post-graduation - to fund
crucial commitments for the child's future.
Importantly, education insurance plans ensure that in the unfortunate event of the
death of a parent, the child's education continues unhampered.
Under the education insurance plans platform, ICICI Prudential brings the following
products to you. Please click on the product name to know more about the plans.
Plan Name
Plan Type
Unit Linked
Unit Linked
Traditional
ULIPs is the flexibility they give the customer in choosing the premium amount and
also choosing the underlying fund in which this money is to be invested. Wealth
creation plans also offer the customer more liquidity options as compared to
traditional plans. As such, ULIPs are ideal for customers who want the protection of a
life cover to be allied to the returns of market linked instrument giving them an
unmatched combination of benefits.
Under the wealth creation platform, ICICI Prudential brings the following products to
you. Please click on the product name to know more about the plans.
Plan Name
Plan Type
LifeTime Super
LifeLink Super
PremierLife Gold
LifeTime Plus
Unit
Unit
Unit
Unit
Linked
Linked
Linked
Linked
Plan Name
Plan Type
Unit Linked
Unit Linked
15
Protection Plans
The sole objective of these plans, as their name indicates, is to serve the protection
needs of the customer and by doing so, safeguard ones family from the financial
implications of unfortunate circumstances than one cannot foresee.
Under the Protection Plans platform, ICICI Prudential brings to you the following
products:
Plan Name
Plan Type
LifeGuard
Save'n'Protect
CashBak
Home Assure
Traditional
Traditional
Traditional
Traditional
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in
16
April 2000 has fastidiously stuck to its schedule of framing regulations and registering
the private sector insurance companies.
The other decision taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies was the launch of the
IRDAs online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in place to
sell their products, which are expected to be introduced by early next year. Since
being set up as an independent statutory body the IRDA has put in a framework of
globally compatible regulations. In the private sector 12 life insurance and 6 general
insurance companies have been registered.
17
All the private companies have a lock in period of 3 yrs hence no disinvestments
possible.
Minimum net worth of 500 Cr required for acquiring license with a minimum paid
up capital of 100 Cr in their insurance venture.
Re insurance for all its policies worth more than 5 lakhs. Reinsurance partners,
best and the largest in the world general cologne and Swiss reinsurance.
Products and pricing are cleared by IRDA, which looks into the financial visibility
of the product and the financial implication.
18
CHAPTER-2
19
INDUSTRY PROFILE
Background
In 1912, the Indian life insurance companies Act was passed . This was the first
comprehensive legislation in India to regulate the business of insurance. it had been
observed that the provisions of Indian Companys Act did not meet the purpose. A
further legislation was passed in 1928, But a comprehensive legislation was passed in
1938. The amendments in the act were made in 1956 when insurance was nationalized
and LIC and GIC were formed.
Life insurance business was nationalized with effect from 19 January 1956
and 256 companies were merged. Insurance Act was further amended in 1999 and
IRDA was formed in view of the circumstances arising out of opening up of insurance
industry in 2000.IRDA authority to protect the interest of the holders of insurance
policies, to regulate , promote and ensure the working of all companies.
As we enter into the new millennium, economies of the world over are getting
redefined and remodeled with the new mindsets, new technologies, new riles and new
directions. Financial sector reforms received top priority ever since the Govt. of India
initiated the process of economic liberalization. These reforms are extending the
horizons of the financial services sector and have been transforming our capital
markets , banking and financial services industries.
In the last four decades , after nationalization of the insurance industry ,
certain socio-economic objectives were achieved through public ownership of the
insurance business. Yet, market oriented dynamism was missing as evidenced by the
lack of
product innovations, high premium rates and limited use of information
technology.
20
The insurance sector reforms have encouraged Blue-Bloods of Indian corporate sector
TATA,ICICI,HDFC,BIRLA,SBI,RELIANCE,KOTAK etc to tie up with worlds
largest insurance majors to capture slice of the countrys potential insurance market.
This has brought abuzz activities in insurance business. New players are wooing the
customer with promises of better services and customized products. The LIC and GIC
are countering the competition on the strength of their track records, distribution
networks and so on.
This new scenario will witness financially sound and experienced players
transforming the industry with best products in service and product development ,
operational efficiency, marketing capability, service plus and tech-savvy orientation.
As a result, the insurance business can become global with e-business applications.
It is awkward business playing value figures on peoples lives. It is almost as
awkward as selling the likelihood of an event people do not want crossing their minds
. in India, it is rather a shrub. For this reason alone life insurance is no ordinary
market. Under the pressure of competitors differentiate their offerings, insurers no
longer sell life insurance as a product that meets a basic need , many of them sell
though the appeal of a wide variety of add on benefits ranging from tax saving to
investment return, sometimes pitying more emphasis on these basic benefits.
This assumes significance because India is witnessing foreign
competition in this sector after a long monopoly period.
There is consensus on success becoming a function of market strategy.
So far the market has been shaped by LIC . it is only recently that private
insurers with 74:26 joint ventures between Indian and foreign companies have
been formed under the watch of IRDA. ICICI prudential, HDFC slandered life
and Max New York Life were first off the block, followed by
Kotak
21
22
LIFE INSURERS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
23
Over the last 150 years, ING Group has grown to become one of the
largest life insurance organizations in the world. Today it touches the lives of over
50 millions people across 65 countries. It offers a range of financial services
including insurance, pensions, banking and asset management. In the year
2000,total assets of the group stood at over INR 28,42000 corers.
24
26
At the industry level, along with the Government and GIC, it has helped established
the National Insurance Academy. It presently transacts individual life insurance
businesses, group insurance businesses, social security schemes and pensions,
grants housing loans through its subsidiary; and markets saving and investment
products through its mutual fund. It payoff about Rs 6000 crore annually to 5.6
million policyholders. Market share of LIC which is 82.3%.By the LIC 1.09 crores
policies has been sold that was in the 2004-05 & the total premium that are
collected by LIC in 2004-05 was Rs.9007 crores.
27
CHAPTER-3
28
COMPANY PROFILE
Indias Number One private life insurer, ICICI Prudential Life Insurance Company is a joint
venture between ICICI Bank-one of Indias foremost financial services companies-and
Prudential plc- a leading international financial services group headquartered in the United
Kingdom. Total capital infusion stands at Rs. 20.60 billion, with ICICI Bank holding a stake
of 74% and Prudential plc holding 26%.
We began our operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of over
580 offices, over 234,000 advisors; and 22 bancassurance partners.
ICICI Prudential was the first life insurer in India to receive a National Insurer Financial
Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has
been voted as Indias Most Trusted Private Life Insurer, by The Economic Times AC
Nielsen ORG Marg survey of Most Trusted Brands. As we grow our distribution, product
range and customer base, we continue to tirelessly uphold our commitment to deliver worldclass financial solutions to customers all over India.
29
The ICICI Prudential edge comes from our commitment to our customers, in all that we do
be it product development, distribution, the sales process or servicing. Heres a peek into what
makes us leaders.
30
1. Our products have been developed after a clear and thorough understanding of customers
needs. It is this research that helps us develop Education plans that offer the ideal way to truly
guarantee your childs education, Retirement solutions that are a hedge against inflation and
yet promise a fixed income after you retire, or Health insurance that arms you with the funds
you might need to recover from a dreaded disease.
2. Having the right products is the first step, but its equally important to ensure that our
customers can access them easily and quickly. To this end, ICICI Prudential has an advisor
base across the length and breadth of the country, and also partners with leading banks,
corporate agents and brokers to distribute our products
3. Robust risk management and underwriting practices form the core of our business. With
clear guidelines in place, we ensure equitable costing of risks, and thereby ensure a smooth
and hassle-free claims process.
4. Entrusted with helping our customers meet their long-term goals, we adopt an investment
philosophy that aims to achieve risk adjusted returns over the long-term.
5. Last but definitely not the least, our 16,000 plus strong team is given the opportunity to
learn and grow, every day in a multitude of ways. We believe this keeps them engaged and
enthusiastic, so that they can deliver on our promise to cover you, at every step in life.
Promoters
ICICI Bank
ICICI Bank (NYSE:IBN) is Indias second largest bank and largest private sector bank with
over 50 years presence in financial services and with assets of over Rs 3446.58 bn (USD 79
billion) as on March 31, 2007. The Bank offers a wide range of banking products and
financial services to corporate and retail customers through a variety of delivery channels and
through its 31pecialized subsidiaries in the areas of investment banking, life and non-life
insurance, private equity and asset management. ICICI Bank is a leading player in the retail
banking market and services its large customer base through a network of over 950 branches
and extension counters, 3300 ATMs, call centers and internet banking (www.icicibank.com) to
31
Fact Sheet
THE Company
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's capital stands at Rs. 20.60 billion with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. As of March 31, 2007, the
company garnered Rs. 4,843 crore of weighted retail + group new business
premiums and wrote over 1.96 million retail policies. The company has assets held
to the tune of over Rs. 15,000 crore.
ICICI Prudential is also the only private life insurer in India to receive a National
32
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 six years, ICICI Prudential has retained its position as the No. 1
private life insurer in the country, with a wide range of flexible products that meet
the needs of the Indian customer at every step in life. To know more about the
company, please visit
Distribution
ICICI Prudential has one of the largest distribution networks amongst private life
insurers in India. As of March 31, 2007 the company has over 580 offices across
the country and over 234,000 advisors.
The company has over 22 bancassurnace partners, having tie-ups with ICICI Bank,
Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank, Idukki
District Co-operative Bank, Jalgaon Peoples Co-operative Bank, Shamrao Vithal
Co-op Bank, Ernakulam Bank, 9 Bank of India sponsored Regional Rural Banks
(RRBs), Sangli Urban Co-operative Bank, Baramati Co-operative Bank, Ballia
Kshetriya Gramin Bank, The Haryana State Co-operative Bank.
Flexible Rider Options
ICICI Pru Life offers flexible riders, which can be added to the basic policy at a
marginal cost, depending on the specific needs of the customer.
European life insurance company with life operations in China, Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand,
Vietnam. Prudential is the second largest retail fund manager for Asian sourced
assets ex-Japan as at June 2006. Its fund management business has expanded into a
total of ten markets : China, Hong Kong, India, Japan, Korea, Malaysia,
Singapore, Taiwan, Vietnam and United Arab Emirates.
The ICICI Prudential Life Insurance Company Limited Management team comprises
reputed people from the finance industry both from India and abroad.
34
Mr. N. S. Kannan
Executive Director
ICICI Prudential
Life Insurance Company Limited
N. S. Kannan joined ICICI Prudential Life Insurance Company Ltd as Executive Director
in August 2005, where he has overall responsibility for sales, marketing, investments,
group business and business intelligence. Prior to joining ICICI Prudential, Kannan was
the Chief Financial Officer and Treasurer of ICICI Bank Limited where he was
responsible for investor relations and for the finance, performance management, accounts,
taxation, risk management, secretarial and credit middle office functions. The treasury
operations of ICICI Bank include Balance Sheet Management and Asset and Liability
Management. ICICI Bank is the second largest bank in India with an asset base of about
US$ 55 billion. The bank is listed on Indian national stock exchanges and the New York
stock exchange. Kannan joined ICICI group in 1991 as a project officer. During his
tenure at ICICI group, he has handled project finance operations, infrastructure financing,
structured finance and treasury operations. Prior to his current assignment, he has headed
the Telecom & Transportation group and Structured Finance group of the bank.Kannan is
a postgraduate in management from the Indian Institute of Management, Bangalore with a
gold medal for best all-round performance. He is also a Chartered Financial Analyst from
the Institute of Chartered Financial Analysts of India and an Honours graduate in
Mechanical Engineering. His work experience includes 3 years of industrial experience
with a large engineering group in India.
35
ICICI PRUDENTIAL has deposited a paid up capital of Rs. 925 crores with
IRDA as a caution deposit, the highest amongst all the life insurance
companies in India whereas LIC has deposited only 60 crores so far.
ICICI PRUDENTIAL is the first life insurance company to offer ECS debit
facility.
Its Venture funds management co. Ltd is Indias largest venture capital
company.
PRODUCTS:
36
PRODUCTS:
The policy doesnt have the surrender option before the 3rd year.
Plan do not offer any guarantee or assured return
The product profile is not very comprehensive.
Mortality, management and administrative charges are sky-scraping as
compared to its competitors.
OPPORTUNITIES
The whole private sector is open to be tapped even though the competition is
fierce from government owned insurance companies.
Its a volume business that is even if the company has few good corporates
the turnover ceases to increase by manifold.
PRODUCTS:
37
The Govt. players will become aggressive thus growth is going to be tough.
PRODUCTS:
Past performance of these plans is not indicative of the future performance
of the plan
The sum invested in the funds is subject to market risks and there can be
no assurance that the objective of the plans will be achieved.
All benefits payable under the policy are subject to the tax laws and other
financial enactment, as they exist from time to time
38
MEANING OF ULIP
A policy, which provides for life insurance where the policy value at any time varies
according to the value of the underlying assets at the time. ULIP is life insurance
solution that provides for the benefits of protection and flexibility in investment. The
investment is denoted as units and is represented by the value that it has attained
called as Net Asset Value (NAV).
Unit linked
insurance
plans
Underlying
investment
Units in
funds
Contribution
Less charge
Investment represented as
units
Life cover
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FEATURES OF ULIP
ULIP distinguishes itself through the multiple benefits that it provides to the
consumer. The plan is a one-stop solution providing:
Life protection
Investment and Savings
Flexibility
- Adjustable Life Cover
- Investment Options
Transparency
Options to take additional cover against
- Death due to accident
- Disability
- Critical Illness
- Surgeries
Liquidity
Tax planning
The two strong arguments in favour of unit-linked plans are:
Secondly it allows the investor to choose the assets into which he wants his
funds invested.
sense they are safer. ULIPs also offer flexibility. For instance a policyholder can ask
the insurance company to liquidate units in his account to meet to mortality charges if
he is unable to pay any premium installment. This eats into savings but ensures that
the policy will continue to cover his life.
ULIP came into play in the 1960s and became very popular in Western Europe and
Americas. The reason that is attributed to the wide spread popularity of ULIP is
because of the transparency and the flexibility which it offers. Unit- linked plans are a
contemporary product: transparent and flexible. Individuals have greater control over
their investments. The popularity of ULIPS stems from the fact that they offer
customers integrated financial solutions with a transparent charge structure. In
todays times, ULIP provides solutions for insurance planning, financial needs,
financial planning for childrens future and retirement planning. Unit-linked insurance
plans (ULIPs) have become something of a rage with their 'promise' of market-linked
returns combined with the dual benefit of insuring your life from eventualities.
Why do insurers prefer ULIPs?
Insurers love ULIPs for several reasons. Most important of all, insurers can sell these
policies with lesser capital of their own than what would be required if they sold
traditional policies. In traditional with profits policies the insurance company bears
the investment risk to the extent of insured amount. In ULIPs the policyholder bears
most of the investment risk. Since ULIPs are designed to mobilize savings, they give
insurance companies an opportunity to get a large chunk of asset management
business which has been traditionally dominated by mutual funds. ULIPs are suitable
for individuals who are already adequately insured and are reasonably well-informed
and savvy to take active investment decisions by using the `switch option' that is
provided to a ULIP policyholder. Also policyholders with regular endowment plans
who are not satisfied with the 4-6% returns can consider taking a ULIP with a lower
equity component. It is best if insurance-seekers tread the middle path and choose
balanced plans (with about 50-60% equity
component). Ideally they need to avoid taking the aggressive 100% equity ULIP,
which could needlessly expose their assets to market volatility. So if insurancesseekers/investors play their cards right, they can make this marriage work.
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Regular payouts: As your child approaches key educational milestones such as 12th
standard or graduation exams, he or she will receive regular payouts, guaranteeing he
or she continues to study, no matter what the circumstance.
Death Benefit: Your child will receive the Sum Assured immediately, should
something happen to you. ICICI Prudential will pay the remaining premiums,
ensuring your child continues to receive policy benefits, as always.
Income Benefit Rider: You can choose to add the benefits of this rider to your child's
education plan. Should you depart before your son's or daughter's education is
42
complete, you child will receive 10% of Rider Sum Assured, for the balance term of
the policy.
Add-on riders: 'Accidental Death and Disability Rider' and 'Waiver of Premium
Rider' ensure your child stays doubly protected, at all times. You can choose to add
these to your child's education policy.
Tax benefits: Premiums you pay for a SmartKid policy are eligible for tax savings
[u/s 80(C)]. Maturity and death benefits are eligible for tax exemptions [u/s 10(10D)].
3. SmartKid Regular Premium
Flexible investment option: Choose the amount of premium with which you wish to
safeguard your child's education.
Flexible policy tenure: The tenure of the plan will be calculated as the difference
between your child's current age and his or her age at which the policy matures.
Flexible premium options: The premium will be calculated based on 3 factors: Sum
Assured, policy tenure and your age.
Guaranteed bonus: A guaranteed bonus of 3.5% per annum is declared for the first 4
premium paying years plus an annual vested bonus declared in subsequent years.
LifeLink Super
that works best for investors who have in mind long-term financial goals, such as the
education of a child or the purchase of a larger home.
Apart from the potentially higher returns that you can earn, LifeLink Super insures
your family against misfortunes with its protective insurance cover.
Read more about the features and benefits of this plan, right away.
43
0 years to 65 years
70 years
5 years
Up to age 44: Rs. 25,000, age 45 and above: Rs.
50,000
Annual Premium x Term/2. Subject to a
minimum of Rs. 1,00,000
Attractive premium allocation rates: Enjoy 100% allocation for premium amounts
equal to or greater than Rs. 5 lacs.
6 investment funds: Select among Flexi-Growth, Maximiser, Flexi-Balanced,
Balancer,
Protector, and Preserver, based on your financial goals and risk profile.
Switch benefit: Switch between funds anytime to maximize on market movements.
You can switch funds 4 times a year, at no cost. For subsequent switches, you will be
required to pay a switch fee of Rs. 100.
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Maturity benefit: Receive the Fund Value when your policy matures. Choose to take
this value as a single lump-sum amount or in monthly, bi-annual or annual
installments spread over 1 to 5 years.
Death benefit: Your family receives the higher of Fund Value or Sum Assured should
something happen to you.
45
0 years to 65 years
75 years
10 years to 75 years
Monthly, half-yearly, yearly
Rs. 18,000 per annum
Annual Premium x Term/2. Subject to a
minimum of Rs. 1,00,000
Premium paid for the policy and critical illness
benefit rider will be eligible for tax benefit
under Sec. 80C and 80D respectively. Any
amount paid to you will be eligible for tax
benefits under Sec. 10 (10D) as per prevailing
Income Tax laws.
goals and risk profiles. You can switch funds 4 times a year, at no cost. For subsequent
switches, you will be required to pay a switch fee of Rs. 100.
47
CHAPTER-4
RESEARCH METHODOLOGY
Research Methodology has many dimensions, it include not only research
methods but also considers the logic behind the methods used in the context of the
study and explains why only a particular method of technique had been used so that
research lend themselves to p[roper evaluations. Thus in a way it is a written game
plan for concluding research therefore in order to solve research problem it is
necessary to design a research methodology for the problem as the same may differ
from problem to problem. Research design is the conceptual structure within which
48
the research is conducted. Its functions are to provide for the collection of relevant
evidence with minimum expenditure of effort, time and money. But, how this can be
achieved depends on the research purpose. In my study the research purpose is
exploratory study i.e. to gain familiarity with phenomena or to achieve new insights in
it.
MARKET RESEARCH DESIGN : Descriptive type
DATA SOURCES
: Primary source
RESEARCH APPROACH
: Survey method
RESEARCH INSTRUMENT
: Questionnaire
TYPE OF QUESTIONS
: Close-ended
SAMPLE SIZE
: 100 samples
49
SAMPLE SIZE
A sample size of 100 customers was selected to do this project, which was random
sampling keeping in mind the basic criteria.
FIELD WORK
The research was done for a period of 2 months in (students, government employee &
other) ambala. I started with MY MARKET 100 and thereafter I used to give cold
calls from the companys database and if seemed interested I take along with me the
representatives of the company for further information gathering.
1) Study of Secondary Data: The quickest and the most economical way for
researchers to find possible hypothesis is to take the advantage of the work done
earlier and thus utilize their efforts.
2) In-depth Interviews: I used in-depth interviews because it attempts to influence
respondents to talk freely about their subject of interest .A formal questionnaire
was made and according to which the questions were asked to the respondents.
Basic methods of collecting Primary Data:
1) Questionnaire Method: The questionnaire used by me for the purpose of data
collection were of structured type (Non-disguised).
2) Contact Method: In order to derive information from the intended organization,
it was elementary for me to search for a link which could enable me to conduct a
research in that organization.
50
In this era of cut throat competition, any organization needs to select and retain the
best talent. People selected should have positive attitude, ability to inspire others and
must be dynamic.
Market interphase.
51
CHAPTER-5
LIST:
Features
Age
Term
LifeTime Super
LIC BimaPlus
0 60 years
12 - 55 years
Minimum premium payment term of
Sum Assured
3years
10 years
Choose your sum assured, subject to Maximum limit upto Rs. 2 lakhs
a minimum sum assured of Rs. 1
Survival benefit
lakh
Value of units (3rd year onwards)
Death benefit
Withdrawal benefit
of units.
Partial or complete withdrawals are Premature withdrawal allowed
available from the 3rd year onwards
Contribution
Flexible
contribution
Investment options
contribution
Not available
Maximiser, Balancer, Protector &
Preserver.
Increase / Decrease Available.
of death benefit
Bonus units
Top-up
Available
Not Available.
Available. Minimum top-up of Rs. Available (Charges: 1.5% of the
5000. Charges - 1% of top-up.
top-up)
4 free switches a year, with the No free
switches.
Cost
of
2000.
value.
The policy will acquire a surrender Partial surrender up to 50% of
value after 3 complete premium- bid value of units allowed after 3
paying years. The surrender value is years
from
date
54
of
Initial Charge
Admin Charge
Other Charges
96%.
None
Not applicable
Not applicable
Not applicable
The annual administrative and fund
management charge is 2.25% for
Maximiser, 2.25% for Balancer,
Preserver.
LifeTime Super
HDFC Linked
0 - 60 years
18 - 60 years
Minimum premium payment term of 10 - 30 years
Sum Assured
3years
Choose your sum assured, subject to Only
5,10,
20
(age-based)
lakh
Assured.
Value of units (3rd year onwards)
Value of units
Higher of Sum Assured or value of Higher of Sum Assured or value
Withdrawal benefit
units.
of units.
Partial or complete withdrawals are Partial withdrawal
available
55
Contribution
Flexible
Assured.
Minimum: Rs. 18,000 p.a.
Minimum: Rs. 10,000 p.a.
Flexibility to increase or decrease in Available
contribution
Investment options
contribution.
Maximiser, Balancer, Protector & 5
Preserver.
Fund
Options-
Defensive
Balancer,
Managed,
Safe
of death benefit
Bonus units
Top-up
Available
Not available
Available. Minimum top-up of Rs. Available
Switch
Surrender value
2000.
to put a charge on the switches.
The policy will acquire a surrender The surrender charge is 25% of
value after 3 complete premium- 3
paying years.
Initial Charge
years
outstanding
regular
years
% Allocation of the premium
Charges
18000- 49,999: 1st year - 80%; 2nd 1st yr-27%, 2nd yr- 27%, 3rd yr
year - 92.5%; 3rd year onwards - onwards- 1%
96%.
50000 and above: 1st year - 82%;
2nd year - 92.5%; 3rd year onwards -
Admin Charge
96%.
None
management charge is 2.25% for the Fund Value across all the
Maximiser, 2.25% for Balancer, funds.
1.50% for Protector & 0.75% for
Rider
Preserver.
ADBR, CIBR & MSAR
Sum Assured
Survival benefit
Death benefit
value of units.
value of units
Partial withdrawals are available after Partial
or
complete
the 3rd policy year and after payment withdrawals are available after
of
years'
premiums.
premium.
However surrender
Contribution
Flexible
contribution
Investment options
Maximiser,
Balancer,
Protector
Preserver.
Decrease in death Available.
benefit
Bonus units
Top-up
Available.
Not available
Available. Minimum top-up of Rs. Available. Charge are 2% of
Switch
Surrender value
Initial Charges
premiums
% Allocation of the premium
1st year - 76%; 97% from year
2 onwards
20
Fund Management The annual investment charge is 1.50% 1.5% p.a. for a Equity Plus
Charges
for Maximiser, 1.00% for Balancer, Fund, 1% p.a. for Equity Index
0.75% for Protector & Preserver.
Rider
Fund.
ABR, ADBR, CI & Hospital
Cash Benefit
58
Life insurance plans are eligible for deduction under Sec. 80C
Upto Rs 1,00,000/Above Rs 100,000/- to 145,000/Above Rs 145,000/- to 150,000/Above Rs 150,000/- to 195,000/Above Rs 195,000/- to 250,000/Above Rs 250,000/-
Rate of tax
Senior citizen Women below 65
Nil
Nil
Nil
Nil
20%
30%
years
Nil
Nil
10%
20%
20%
30%
Others
Nil
10%
10%
20%
20%
30%
59
Surcharge on Income Tax: In case where the Total Income exceeds Rs 10,00,000,
there would be a surcharge @ 10%.
Education Cess on Income Tax: Education Cess @2% will be payable on the
amount of income tax (including surcharge).
Benefits under insurance policy - Section 10(10D)
As per Section 10(10D) of Income tax Act, 1961, any sum received under a life
insurance policy, including the sum allocated by way of bonus on such policy is
exempt from tax. However, this rule does not apply to following amounts:
Sum received under Section 80DD (3), or
Any sum received under a Keyman Insurance Policy, or
Any sum received other than as death benefit under an insurance policy which has
been issued on or after April 1 2003 and if the premium paid in any of the years
during the term of the policy is more than 20% of the sum assured.
60
CHAPTER-6
61
61%
No
22%
Will think
17%
17%
Yes
No
Will think
22%
61%
INTERPRETATION
The good thing is that atleast the corporates were quite eager to find out what ICICI
PRUDENTIAL has to offer whereas the major 39 % of the corporates were not even
interested in the products as they are quite satisfied by the LIC and they are not in
breaking their long relationship with them. The private players will have to play a
long battle in order to ensure that they are serious player in the market. Basically
corporates think that its too early to invest in private companies as they have just
entered the scene and they are unsure of the security they will have about their
investment.
62
YES
65%
No
35%
35%
Yes
No
65%
INTERPRETATION
Here is where the challenge is. Inevitably most of the players are very satisfied with
their present insurer which makes it more tough for the private players to attract the
corporates. The remaining 35 % are also not very dissatisfied by the services but they
are just open to new avenues and are looking forward that private companies come
with good offers so that they may shift to them. Thus private players will have to be
very proactive and in this regard since LIC is the leader and ICICI PRUDENTIAL is
lagging behind its competitors in terms of competition.
LIC
60
ICICI
10
BAJAJ ALLIANZ
TATA AIG
15
SBI
KOTAK MAHINDRA
60
60
50
NO
OF
PEOPLE
40
30
15
20
10
10
0
LIC
SBI
TATA AIG
ICICI
BAJAJ
KOTAK
MAHINDRA
COMPANIESS
INTERPRETATION
Thus we see that the companies are comfortable in having business with govt. owned
companies as they feel its safe & secure to have business with them which is followed
by SBI as it is the biggest bank and then followed by TATA AIG as the name TATA is
associated with it which commands huge premium in the market . Whereas in the case
of ICICI PRUDENTIAL the figures represent mediocre performance after compelling
and coxing the corporates and creating a strong impression whether they feel
interested in doing business with the company.
4). What is peoples main concern while taking a insurance policy (ULIP)?
64
A) Security
B) Returns
C) Tax rebate
40%
28%
32%
INTERPRETATION
People invest in insurance mainly because of security concern.
65
Yes
58%
No
42%
INTERPRETATION
The awareness level among the corporate about ICICI PRUDENTIAL offering
services is very low and the company needs to work on it. Today is the world of
marketing thus it is recommended that company should become more media friendly
by advertising more through television channels, radio, newspapers, magazines,
journals &editorials.
66
CHAPTER-7
67
LIMITATIONS
The geographical area was very much limited to residential area & so the
results are not particularly reflection of the current behavior.
Due to limited time period and constrained working hours for most of the
respondents, the answers at times were vague enough to be ignored.
Most of the people in India take their policies in the period preceeding
March(for tax saving purposes) & so the response to initial contacts were not
all encouraging and that has been the primary reason in the inability to
quantify the results large enough so as to reduce any relevant outcomes.
Most of the results that are spelt out have been of qualitative aspects.
68
69
RECOMMENDATIONS
The company should quite frequently send their agent to the customer so that
they should be aware of the latest offer.
The company should attempt to open more and more of its branches in the
country so as to promote their product publicity.
70
71
CONCLUSION
LIC enjoys credibility over other private players in the industry People look
for security over returns in market linked plans .Lifetime is the most popular
product among the people who are aware about ICICI Prudentials products.
People are now showing more interest in ULIP as compared to some of the
traditional plans.
ICICI PRUDENTIAL has to counter the distribution network of LIC .The
product profile of ICICI PRUDENTIAL is not very comprehensive
72
73
BIBLOGRAPHY
www.iciciresearchcenter.org
www.tata-aig.com
www.iciciprulife.com
www.personalfn.com
74
75
ANNEXURE
1.
No
________________
_________________
_________________
B) NO
Which are the main issues that you take into consideration while purchasing
any life insurance policy?
A) Security
B) Returns
C) Tax saving
D) Others please specify_________
3. Are you aware of Unit Linked Insurance Plans offered by various companies in
India?
A) ICICI
B) OM KOTAK MAHINDRA
C) TATA AIG
D) BAJAJ ALLIANZ
E) LIC
F) SBI
H) BIRLA SUNLIFE
76
B) NO
B) OM KOTAK MAHINDRA
C) TATA AIG
D) BAJAJ ALLIANZ
E) LIC
F) SBI
77