This report titled Comparison study of unit linked policies and its market research

contains detail study of unit-linked policies and comparison unit linked schemes of
different companies and also their market potential in Bangalore city.
The main object behind taking this project is to find outstanding terms and
conditions of different companies who issue unit linked policies and market potential
for
unit linked policies.
At the same time we are interested to know
1. Whether people are aware about unit linked policies or not?
2. What factor they are consider while purchasing unit linked policy?
3. What is their expectation from unit linked policy?
4. How much they want to invest in Life Insurance?
5. In which type of fund they prefer to invest.?

Based on this an appropriate questionnaire was prepared. Data was collected

through market survey . The data is analyzed using code sheet, percentages,
averages,
sums and weightages

Findings
1. 96% of the people know about life insurance and 18% know about unit linked
policy
2. Responded people ranked LIC as first, ICICI as second and Allianz Bajaj as third
3. Most people want to invest in Life insurance in the range of Rs 300000 to
Rs 500000
4. The Responded people mostly want to invest in balanced fund.
Above study shows that awareness of Allianz Bajaj is very low.
But there is a potential market for unit-linked policies. So ALBJ should come up with
some salient features to tap the market. They should come up with some special
offers
like giving bonus or fixing some minimum guarantee amount.
BABASAB

Objective

1. The present study is carried out to compare the preference of ULIP and Mutual Funds.

2. This study is carried out to know the behavior of investors.

3. To know the important aspects affecting the interest of investors.

Introduction:
ULIPs are a category of goal-based financial solutions that combine the safety of insurance
protection with wealth creation opportunities. In ULIPs, a part of the investment goes
towards providing investors life cover. The residual portion of the ULIP is invested in a fund
which in turn invests in stocks or bonds; the value of investments alters with the performance
of the underlying fund opted by investors. Simply put, ULIPs are structured in such that the
protection element and the savings element are distinguishable, and hence managed
according to individual specific needs. In this way, the ULIP plan offers unprecedented
flexibility and transparency. Since the fund of investor’s choice has an underlying investment
– either in equity or debt or a combination of the two – individual fund value will reflect the
performance of the underlying asset classes. At the time of maturity of the plan, investors are
entitled to receive the fund value as at the time of maturity.

History

The first ULIPwas launched in India in 1971 byUnit Trust of India(UTI).With theGovernment of
Indiaopening up the insurancesector to foreign investors in 2001and the subsequent issue of
majorguidelines for ULIPs by theInsurance Regulatory and DevelopmentAuthority(IRDA) in 2005
several insurance companies forayed intothe ULIPbusiness leading to a plethora of ULIPschemes
beinglaunched to serve the investment needs of those looking to invest inan investment cum
insurance product.

NEED AND IMPORTANCE OF THE STUDY

1. Mutual funds are dynamic financial intuitions which play crucial role in an
economy by mobilizing savings and investing them in the capital market.
2. The activities of mutual funds have both short and long term impact on the savings
in the capital market and the national economy.
3. Mutual funds, trust, assist the process of financial deepening & intermediation.
4. To banking at the same time they also compete with banks and other financial
intuitions.
5. India is one of the few countries to day maintain a study growth rate is domestic
savings.

SCOPE OF THE STUDY:

Subject matter is related to the investor‘s approach towards mutual funds and
Ulips.
A study on comparative analysis of mutual funds in Kotak Mutual Fund
schemes, are effecting on the financial performance of the company.
People of age between 20 to 60 i.e. the range is wide
Area limited to Hyderabad
Demographics include names, age, qualification, occupation, marital status
and annual income.

RESEARCH METHODOLGY
Research always starts with a question or a problem. Its purpose is to question
through the application of the scientific method. It is a systematic and intensive
study directed towards a more complete knowledge of the subject studied.
Marketing research is the function which links the consumer, customer and public to
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the marketer through information- information used to identify and define marketing
opportunities and problems generate, refine, and evaluate marketing actions,
monitor marketing actions, monitor marketing performance and improve
understanding of market as a process.
Research specifies the information required to address these issues, designs, and the
method for collecting information, manage and implemented the data collection
process, analyses the results and communicate the findings and their implication. I
have prepared our project as descriptive type, as the objective of the study demands
the answers of the question related to find the potentiality of Mutual Funds and
Ulips in Hyderabad. How much potential is there in Hyderabad

What is Ulips?
ULIP stands for Unit Linked Insurance Plans. As we know that insurance is for protecting our life from
the any uncertain events like death or accident. The purpose of the normal insurance plan is just
protecting the life but not ensuring any savings for the future. The examples for the pure insurance
plans are term insurance. Many people wanted plan which gives protection also gives the returns for
their investment. So, insurance companies come up with the ULIP plan where the premium amount
is invested in the stock market and returns better income on the maturity period.

This is the type of investment where the characteristics of insurance and mutual fund are combined.
Some part of the money invested goes into the insurance cover and the remaining goes into an asset
class. ULIP is life insurance solution that provides for the benefits of protection and flexibility in
investment.

We further can say it is a type of insurance vehicle in which the policyholder purchases units at their
net asset values and also makes contributions toward another investment vehicle. Unit linked
insurance plans allow for the coverage of an insurance policy, and provide the option to invest in any
number of qualified investments, such as stock, bonds or mutual funds.

TYPES OF ULIPS
One of the big advantages that a ULIP offers is that whatever be your specific Financial
objective, chances are that there is a ULIP which is just right for you. The figure below gives
a general guide to the different goals that people have at various Age-groups and thus,
various life-stages. Depending on your specific life-stage and the corresponding goal, there
is a ULIP which can help you plan for it.

Type I and Type II Ulips

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There are 2 types of ULIP plans. Type 1 is a ULIP where Sum Assured or Fund Value
whichever is higher is paid. In case of Type 2 of a ULIP, both Sum Assured and Fund Value
are paid. However, to derive the full benefit of such plans, an investor needs to compare
important points like structure, costs and benefits. Below is a brief comparison for the same.

A Comparison of Term Plan + ELSS and ULIP Type 2 will give the best:

ULIP Type 2 ELSS + Term

Good for More than 10 Years Less than 10 year investments

Investments

On Maturity Fund Value Fund Value will be paid by ELSS

and No Survival Benefit on Term
On Death Fund Value + Death Fund Value and Term
Benefit will be paid Life Sum assured will be
paid

Long Term Costs Good for long term investing as Mutual Funds charge close to
there are high upfront charges. In 2.25%of Annual Fund
the Long term total charges are Management charge till you
lower than Mutual remain invested.
Funds

Switching Costs During a Mostly ULIPs have 3 Switches are charged at 3-

long tenure of investment, Switches Free 4%.
switching funds is very
important.

Switching Tax Costs No Tax Implication Profits on switching are

charged at 10%
Discipline Compulsion of Investment every No Compulsion. Planning
year. Helps you plan you to be implemented by
child‘s future or retirement. you.
Tax All profits are tax free Tax payable on short term
Gains.

Working of Ulips
When you decide the amount of premium to be paid and the amount of life cover you want from the
ULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known as the
Premium Allocation charge, and varies from product to product. The rest of the premium is invested
in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges
are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the
ULIP fund management charges are adjusted from NAV on a daily basis. Since the fund of your
choice has an underlying investment – either in equity or debt or a combination of the two – your

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fund value will reflect the performance of the underlying asset classes. At the time of maturity of
your plan, you are entitled to receive the fund value as at the time of maturity. The pie-chart below
illustrates the split of your ULIP premium.

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Sampling:
a)place : Kolkata
b) Size: 100 size
c) Method: Random sampling
MEASURING TOOLS:

SPSS Software used for measuring the response is in terms of percentage method using
graphical charts like Bar graphs & Pie charts.

2. Occupation

Frequency Percent Valid Cumulativ

Percent e Percent
Validgovernment 9 9.0 9.0 9.0
employee
private 36 36.0 36.0 45.0
employee
student 1 1.0 1.0 46.0

business 29 29.0 29.0 75.0

man
Others 25 25.0 25.0 100.0

Total 100 100.0 100.0

6
 occupation
40

30

20
Frequency

10

0
goverement employee student others
private employee bussiness man

occupation

Interpretation:
According survey i came know that at 9% are government,36% are private people, 1%
Are student, 29% are businessman, 25% are other.

3. Why did you go for ICICI prudential life insurance?

Frequency Percen Valid Cumulati

t Percen ve
t Percent
Validbrand name 39 39.0 39.0 39.0

product 18 18.0 18.0 57.0

profile
advisors 36 36.0 36.0 93.0
connivance
ability
advertisement 7 7.0 7.0 100.0

7
 Total 100 100.0 100.0

why did you go for icici pru life insurance

50

40

30

20
Frequency

10

0
brand name advisors convinacy a
product profile advertsement

why did you go for icici pru life insurance

Interpretation:
From above table clear that brand name 39%, product profile 18%, advisors convince
ability 36%, advertisement 7% .

4. Your savings consist of

Frequency Percent Valid Percent Cumulative
Percent
Valid post office 17 17.0 17.0 17.0

bank f,d 10 10.0 10.0 27.0

Shares 6 6.0 6.0 33.0

land/ building 6 6.0 6.0 39.0

Life 55 55.0 55.0 94.0

insurance

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 Gold 3 3.0 3.0 97.0

not respond 3 3.0 3.0 100.0

Total 100 100.0 100.0

your savings consist of

not respond

gold
post office

bank f,d

shares

life insurance
land/ building

Interpretation:
According to survey we have come to know that 17% of responds are saving
There income in post office, 10% responds are saving in bank f.d, 6% responds are
Saving there income in shares, 6% responds are saving there income in land/building, out of 100
responds are 55% peoples are saving there income in life insurance because to protect there life
in future.3% people are save there income in gold and 3% are not responds there income
5. The following insurance plan you have
Frequency Percent Valid Cumulative
Percent Percent
Valid smart kid 16 16.0 16.0 16.0

life time 16 16.0 16.0 32.0

gold
cash back 9 9.0 9.0 41.0

retirement 10 10.0 10.0 51.0

9
 solution
if other 31 31.0 31.0 82.0
specify
not respond 18 18.0 18.0 100.0

Total 100 100.0 100.0

the following insurance plan you have

40

30

20
Frequency

10

0
smart kid cash back if other specify
life time gold retirement solution not respond

the following insurance plan you have

Interpretation:
According to survey we have come to know out of 100 responds they have choice
insurance plan in ICICI prudential 16% of people in smart kid, 16% of responds life time gold,
cash back is only 9%, 10% responds retirement solution31% and 18% are others and not
responds.

6. How much of premium amount o policy you have

Frequency Percent Valid Cumulative
Percent Percent
Valid 5000-10000 63 63.0 63.0 63.0

10
 10000- 13 13.0 13.0 76.0
20000
20000- 2 2.0 2.0 78.0
50000
50000&abo 1 1.0 1.0 79.0
ve
not respond 21 21.0 21.0 100.0

Total 100 100.0 100.0

Interpretation:
According to survey we have come to know that 63% of responds
There premium amount 5000-10000, and 13% responds are prefer to10000-20000
Only 2% responds are premium 20000-50000, 1% and 21% 50000 above and not responds

7. Did you know about the life insurance?

Frequency Percent Valid Cumulative

11
 Percent Percent
Valid magazines/n 1 1.0 1.0 1.0
ews papers
television 5 5.0 5.0 6.0

advisors 55 55.0 55.0 61.0

Friends 20 20.0 20.0 81.0

relatives 6 6.0 6.0 87.0

not respond 13 13.0 13.0 100.0

Total 100 100.0 100.0

did you know about the life insurance?

magaznes/new s papers
television
not respond

relatives

friends

advisors

Interpretation:
According to survey we have come to know out of 100 responds are know about
the life insurance from different sources 1% responds magazines/news papers 5% respondent
are 5% respondent are television more of respondent are come to know from advisors,20%
respondent are friends,6% are relatives and 13%are not respond.

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 8. Are aware of ulip and traditional plan?

Frequency Percent Valid Cumulative

Percent Percent
Valid Yes 61 61.0 61.0 61.0

No 32 32.0 32.0 93.0

not respond 7 7.0 7.0 100.0

Total 100 100.0 100.0

are aware of ulip and traditional plan?

70

60

50

40

30

20
Frequency

10

0
yes no not respond

are aware of ulip and traditional plan?

Interpretation:
According to survey we have come to know that most of people are ulip
Which is 61%and 32% are traditional plan and reaming are not respondent.

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 9. In which companies have you invested

Frequency Percent Valid Cumulative

Percent Percent
Valid LIC 19 19.0 19.0 19.0

ICICI pru life 44 44.0 44.0 63.0

insurance
Bajaj Allianz 14 14.0 14.0 77.0

not respond 23 23.0 23.0 100.0

Total 100 100.0 100.0

in which company have you invested

50

40

30

20
Frequency

10

0
lic icici pru life insur bajaj allianz not respond

in which company have you invested

Interpretation:

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 According to survey we have come to know that 19% respondent are invested in LIC life
insurance 44% are peoples are ICICI prudential insurance,14% are Invested are in Bajaj Allianz
life insurance and remaining 23% are not respondent.

10. For what purpose you invested in that company?

Frequency Percent Valid Cumulative

Percent Percent
Valid tax saving 14 14.0 14.0 14.0

risk cover 42 42.0 42.0 56.0

Returns 21 21.0 21.0 77.0

Safety 6 6.0 6.0 83.0

Others 1 1.0 1.0 84.0

not respond 16 16.0 16.0 100.0

Total 100 100.0 100.0

for what purpose you invested in that company?

50

40

30

20
Frequency

10

0
tax saving risk cover returns safty others not respond

for what purpose you invested in that company?

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 Interpretation:
According to survey we have come to know out of 100 respondent 14%
Are they have invested in life insurance tax saving,42% are to risk saving purpose
21% respondent for purpose of risk cover, and 6% are safety purpose,1% And 16%
Are others and not respondent.

11. Which of the following invested plan would you prefer?

Frequency Percent Valid Cumulative

Percent Percent
Valid traditional 20 20.0 20.0 20.0
plan
Unit linked 61 61.0 61.0 81.0
insurance
not respond 19 19.0 19.0 100.0

Total 100 100.0 100.0

which of the following invested plan would you prefer

70

60

50

40

30

20
Frequency

10

0
traditional plan unit linked insuranc not respond

which of the following invested plan would you prefer

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Interpretation:
According to survey we have know that in icici prudential life insurance
comparing between ulip and traditional plan. Out of 100 respondents
20 % traditional plan invested, and 61% are invested in ulip and 19% are not respondent.

12. Have you invested in this plan?

Frequency Percent Valid Cumulative

Percent Percent
Valid Yes 65 65.0 65.0 65.0

No 23 23.0 23.0 88.0

not respond 12 12.0 12.0 100.0

Total 100 100.0 100.0

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 have you invested in this plan
70

60

50

40

30

20
Frequency

10

0
yes no not respond

have you invested in this plan

Interpretation:

According to survey 65% respondent are invested in ulip And 23% are not
invested. 12% are respondent not respondent.

13. If, yes why did you give Importance in this plan?

Frequency Percent Valid Cumulative

Percent Percent
Valid Returns 32 32.0 32.0 32.0

withdrawals 18 18.0 18.0 50.0

Charges 15 15.0 15.0 65.0

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 premium 10 10.0 10.0 75.0

Others 2 2.0 2.0 77.0

not respond 23 23.0 23.0 100.0

Total 100 100.0 100.0

if,yes why did you give imporance in this plan

40

30

20

10
Frequency

0
returns w ithdraw als charges premium others not respond

if,yes why did you give imporance in this plan

Interpretation:
According to survey we come to know that 32% Invested for the return, 18% invested for
purpose withdrawals, 15%Charges facility, 10% respondent premium, 2% and 23% others and
Not respondent.

14. Rank the unit linked insurance plan?

Frequency Percent Valid Cumulative

Percent Percent

19
 Valid excellent 24 24.0 24.0 24.0

Very good 37 37.0 37.0 61.0

Average 18 18.0 18.0 79.0

Bad 4 4.0 4.0 83.0

not respond 17 17.0 17.0 100.0

Total 100 100.0 100.0

rank the unit linked insurance plan

40

30

20

10
Frequency

0
excellent very good average bad not respond

rank the unit linked insurance plan

Interpretation:
From above table rank the unit linked plan 24% excellent, 37% very
Good , 18% respondent average, 4% ,17% are bad and not respondent.

15. How much invested in unit linked plan?

20
 Frequency Percent Valid Cumulative
Percent Percent
Valid 10000- 64 64.0 64.0 64.0
50000
50000- 11 11.0 11.0 75.0
1lack
5lack above 1 1.0 1.0 76.0

not respond 24 24.0 24.0 100.0

Total 100 100.0 100.0

how much invested in unit linked plan

70

60

50

40

30

20
Frequency

10

0
10000-50000 50000-1lack 5lack above not respond

how much invested in unit linked plan

Interpretation:
From above table we have know that 64%invested in unit linked plan
11% 50000-1lack, 24% are not respondent.

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16. You invested in life insurance because of….

Frequency Percent Valid Cumulative

Percent Percent
Valid 3 3.0 3.0 3.0
Life security for our self 11 11.0 11.0 14.0
For protect for your family 42 42.0 42.0 56.0
members
For retirement befit 18 18.0 18.0 74.0
For children benefit 8 8.0 8.0 82.0
For investment only 3 3.0 3.0 85.0
Not respond 15 15.0 15.0 100.0

Total 100 100.0 100.0

you invested in life inurance because of

not respond life security for ou

for investement only

for children benfit

for retirement befit for protect for your

Interpretation:

22
 From above table we have know that respondent are investing in life insurance 11% life security,
42% for protect family members, 18% retirement benefit 8% for children’s,3% investment,15%
not respondent.

17. Tick the factors of prime importance to you while purchasing life insurance

Frequency Percen Valid Cumulative

t Percent Percent
Valid Brand name 25 25.0 25.0 25.0

product 23 23.0 23.0 48.0

portfolio
personal 23 23.0 23.0 71.0
advisor needs
advisor 16 16.0 16.0 87.0
connivance
ability
service 13 13.0 13.0 100.0
aspects
Total 100 100.0 100.0

tick the factors of prime imporance to you while purchaging life insuran

service aspects

brand name

advisor convinace ab

product portfolio
personal advisor nee

Interpretation:
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 From above table is show that respondent the factor influence while purchasing life
insurance out 100 respondents’ 25% brand name, 23% product portfolio and personal advisor
needs, 16% advisor convince ability, 13% service aspects.

24