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Capital Unit Gain (ULIP) of Bajaj Allianz

Life Insurance Company Ltd. - Its


marketing and comparison of features
with similar policies of other companies.

Submitted by:-
Smita Samaptika Pattanayak
Roll No.-655
PGDM (INSURANCE)
BIMTECH

Under the supervision of

Project Guide Faculty Guide


Mr. Ravi Narayan Satpathy Prof. K.K.Krishnan
Executive Sales Manager Course Coordinator
BAJAJ ALLIANZ Life Insurance Comp. Ltd PGDM (Insurance)
Bhubaneswar BIMTECH
12th July, 2007

To whomsoever it may concern.

Sub: Training Certificate.

We here by certify that Smita Samaptika Pattanayak, a full time student of Post Graduate
Diploma in Management (Insurance) course, 2006-08, of Birla Institute of Management
Technology (BIMTECH), has worked with us in the capacity of Project Trainee for a
period of two months starting from 1st May 2007.

The title and scope of her project was “Capital Unit Gain (ULIP) of Bajaj Allianz Life
Insurance Co. Ltd. - Its marketing and comparison of features with similar policies
of other companies”. The project was carried out under the guidance of Mr. Ravi
Narayan Satpathy, Executive Sales Manager, Bhubaneswar (Branch-II).

We found her to be a dedicated and diligent performer. We take this opportunity to wish
her every success in her future endeavors.

Sincerely

Tridiv Pattanaik
Senior Area Manager
Bhubaneswar (Branch –II)
ACKNOWLEDGEMENT

I would like to thank Mr. Ravi Narayan Satpathy, Executive Sales Manager, Bajaj
Allianz Life Insurance Company Ltd., Bhubaneswar (Branch-2), who gave me idea and
inspiration to take this task. Under his guidance I was able to smoothly complete my
project.

I express my sincere thanks to all the members of the office who spent their valuable time
for guiding me through the currency of the project. I specially thank to Mr. Tridiv
Pattanaik, Deputy Area Manager (BALIC-BBSR, Branch-2) for his valuable and kind
suggestions to me

I also wish to express my deep gratitude to Prof. K.K. Krishnan, BIRLA INSTITUTE
OF MANAGEMENT TECHNOLOGY, Greater Noida for giving me opportunity and
guidance for working on this topic. The valuable guidance and encouragement was an
important factor for the successful completion of the project.

Also I would like to thank all those who contributed towards the successful completion of
the project.

With regards

Smita Samaptika Pattanayak


Roll No.-655
PGDM (Insurance)
BIMTECH
TABLE OF CONTENTS

S.No. Particulars Page No

1. Executive Summary 1

2. Review of literature 2

3. Research Methodology 4

4. Company Profile 5

5. Marketing and Selling life insurance products 6

5.1 The processes of selling 7

5.2. Unit linked insurance plan (ULIP) 10

5.3. Name and address of the people whom I sold the policies 12

6. Comparisons of features of ULIP (Capital Unit Gain) of Bajaj Allianz


life insurance company with similar products of other companies.

6.1 Feature comparison on the basis of eligibility and benefits 13

6.2Feature comparison on the basis of Investment Funds & Flexibility 19

7. Findings 25

8. Conclusions & Recommendations 26

References 27
CHAPTER-1

EXECUTIVE SUMMARY
The topic of the report is “Capital Unit Gain (ULIP) of Bajaj Allianz Life Insurance
Company Ltd – Its marketing and comparison of its features with that of other
companies”.

For marketing of the product, at first a list of prospects was prepared. Then appointments
were fixed with them through telephonic conversation. Presentations and demonstrations
were done to make them understand the benefits the product was having. Five of the
prospects were convinced and the business was closed.

A product comparison was also done. The product was

Capital unit gain

Capital unit gain is the most selling ULIP of this company.

This product was compared with the similar products provided by its competitors. For
this product brochures of different life insurance companies were referred. Help of the
project guide and employees of other companies were taken for this task. It was found
that this product is much more beneficial than similar products of other companies.

Capital unit gain gives 95% allocation of funds in the share market which none of the
ULIPs of other companies in this industry gives. It guarantees a maturity value of
Rs 9, 20,634.865 at the end of 20th year if someone pays premium of Rs10, 000 for first
three years only. It’s a wonderful policy if one wants to invest for capital appreciation. It
also gives a life cover which is 10times that of the premium paid.
CHAPTER-2

REVIEW OF LITERATURE
For the purpose of completing the project effectively and in the most efficient manner, the
research has undergone through a number of materials and has used the following
literature review.

“Concept of SELLING In Life Insurance” [1]

This article says that life insurance is a simple concept. A person buys a policy that pays
to his/her beneficiary or beneficiaries when he/she dies. Agents can make life insurance a
way of life by knowing the concept. Thousands of agents all across the country are
transforming their agencies by capitalising on a new opportunity - selling the concept of
life insurance.

“Salesmanship in Insurance” [2]

This article examines the different steps in selling. The first step in selling is to identify
prospects. It is followed by approaching the prospect, making presentation and
demonstration, overcoming objections and then closing the business. The sales person
should develop an account maintenance plan to make sure that the customer is not
forgotten or lost.

“Being an insurance agent-the pride and prejudice” [9]

In this article the author says that she is very proud to be an insurance agent. It is one of
the best professions. insurance advisors earn well for themselves and get a lot of
recognition from the insurer that they work for, they are doing good to the customer to
whom they are selling securities for their future and doing good to the insurance
company that they are working for and doing good to their country. So they should feel
proud for the noble job they are doing.

The Economic Times, 16 July 2007,”Capital Unit Gain behind the success of Bajaj
Allianz”

This report says that the difference between this and other ULIPs is that in this policy, he
first year premium is used to allocate capital units and the regular premium payable
thereafter will be used to allocate accumulation units. It also says that while all new
insurers were in red, Bajaj Allianz managed to post Rs.63crore profit last year and Rs.30
crore in first quarter of this financial year(2007-08).
“Unit Linked insurance Products”.

This is a comprehensive note on ULIPs. It has made a very clear cut distinction between
traditional and unit linked plans. Various types of charges collected by different insurers
is explained here. It also made a list of features that investors need to ascertain from the
selected insurers before taking an ULIP
CHAPTER-3

RESEARCH METHODOLOGY
The topic of the report is “Capital Unit Gain (ULIP) of Bajaj Allianz Life Insurance
Comp. Ltd. – Its marketing and Comparison of its features with that of other companies”.

For marketing of Capital Unit Gain policy, first a list of prospects was prepared. Then
appointments with them were fixed through telephonic conversations. Thereafter they
were approached. Demonstrations and presentations were made to make them understand
the benefits the policy was having. Five people were successfully convinced. Business
was closed for them. Three more people are about to complete the proceedings.

For comparison of features of Capital unit gain with similar products of other life
insurance companies, the researcher made a detailed study of these products. The
similarities and dissimilarities among all these products were analysed. Different news
paper articles and different items on internet were gone through to make a thorough
comparison. Detailed discussions were held with the project guide to find a solution to
this task. Different people working in other Life Insurance companies were also contacted
to get help from them.
CHAPTER-4

COMPANY PROFILE
Bajaj Allianz Life Insurance:

This was the number one private sector life insurance company for the
financial year 2005-06. With a pan India presence and over 900 offices, Bajaj Allianz
Life Insurance has already a customer base of close to 3.5 million customers. It has
developed insurance solutions that cater to every segment and age-income profile.
Currently it has a product portfolio of 31 products and more need based products are in
the pipeline.

As per IRDA results for 2006-07, Bajaj Allianz Life Insurance held the first
position in terms of number of policies sold.

Some key features:


1. Bajaj Allianz Life Insurance Company declared Rs.63 cr. profit for financial year
2006-07.
2. It is the first private sector life insurance company with a pan India network and
strong retail focus to declare substantial profits for the financial year.
3. New business premium was Rs. 4270crore (US $ 1.04bn approx). For the first
time a life insurance company has crossed US$1 bn new business in a financial
year.
4. It issued over two million (20, 79,217) policies in this year- highest among all
private players. It is the only life insurance company to cross two million policy
mark in a financial year.
5. It collected more new business premium in this one year alone, than the total of
last 5 year’s new business (Rs. 3281 cr.)
6. It sold more policies in this year than the total of last five years.
7. Largest distribution network to reach the customers across with 2, 13,000 agents,
900 offices in 840 towns, 200 corporate agents and bancassurance partners.
CHAPTER-5

MARKETING AND SELLING


OF
LIFE INSURANCE PRODUCTS
Marketing insurance policies is a tough job. Intangibility is among the main source of
problem followed by the contingent nature of the marketer’s benefit and/or indemnity.
Perception of risk is subjective and depends upon the attitude and the value system of an
individual. Insurance is an outgo without much immediate gain and brings no perceivable
value addition to the insured subject, be it a person, his property, pecuniary interests or
conveyance.

The job of marketing and selling life insurance has always been of a hybrid nature. At
the contact level, a portion of the time spent is to counsel the prospect on the possible
economic risks and consequences in his family or business economics, while another
portion of that in follow-up contacts are devoted to persuading the prospect to do
something about the solutions suggested. Reduced to its simplest terms, the fact-finding
and advice-giving phase at the contact level may be considered as the work of
counselor; the persuading phase as the work of a salesman.

The more carefully the job of counseling is performed, the easier and simpler the job of
persuading becomes. Thus the combination of science and art is salesmanship and
practice of professional service concept. Those who practice salesmanship enjoy the
friendship and confidence of their customers, and do more business year after year. The
membership of the Million Dollar Round Table, an international association of insurance
and financial service professionals, bears testimony to this reality.

A potential buyer primarily expects that the saving should be a painless process and that
the money saved should be absolutely safe. The challenge is to provide not only
convenient payment options, but also mechanisms that could offer some measure of
protection and relief to the customer if he is forced to disrupt the payment arrangement
for unforeseen reasons.
5.1 THE PROCESS OF SELLING

Personal selling is an ancient art, effective sales persons have more than instincts; they
are trained in a method of analysis and customer management. Selling today is a
profession that involves mastering and applying a whole set of principles. There are many
different styles of personal selling, some consistent with the marketing concepts and
some anti-ethical to spirit of marketing concept.

1. Identify prospects

The first step in the selling process is to identify prospects. Although the company may
provide leads, sales representatives need skills in developing their own leads. Leads can
be developed in the following ways:

• Asking current customers for the names of the prospects


• Cultivating other referrals sources, such as customers, friends, non competing
sales representatives, bankers, clubs, associations etc.
• Engaging in speaking and writing activities that will draw attention.
• Examining data sources (newspapers, directories) in search of names.
• Using the telephone and mail to find leads.
• Dropping in unannounced on various offices (cold canvassing).

Sales representative need skills in screening out poor leads. Prospects can be qualified by
examining their financial ability, nature of business, special requirements, location and
likelihood of continuous business. In India, direct selling representatives rely mainly on
extended family kinship pattern and go-between for prospects.

2. Pre Approach

The salesperson needs to learn as much as possible about the prospect (what he needs,
who is involved in the purchase decision). The salesperson should set call objectives,
which might be to qualify the prospect or gather information or make an immediate sale.
Another task is to decide on the best approach, which might be a personal visit, a phone
call, or a letter. The best timing should be thought out because many prospects are busy at
certain times.

Before approaching the customer a salesperson must ensure the following:

* Gathering information about the prospect - customer research


* Categorization of prospects - Prospecting
3. Approach

The salesperson should know how to greet the buyer to get the relationship off to a good
start. This involves the salesperson's appearance, the opening lines and the follow-up
remarks. The salesperson might consider wearing clothes similar to what buyer wear;
show courtesy and attention to the buyer; and avoid distracting mannerisms.

This might be followed by key questions and active listening to understand the buyer and
his or her needs better.

4. Presentation and demonstration

The sales person now tells the product 'story" to the buyer, following the AIDA formula
of gaining attention, holding interest, arousing desire and obtaining action. The sales
person emphasizes throughout the customer benefits, bringing in product features as
evidence of these benefits. A benefit is any advantage, such as lower cost, less work or
more profit for the buyer. A feature is a product characteristic, such as Double Sum
assured benefit, Accidental Death Benefit, Waiver of Premium, Critical Illness. A
common selling mistake is to dwell on product features (a product orientation instead of
customer benefits (a market orientation).

5. Overcoming objections

Customers almost always pose objections during the presentation or when asked for the
order. Their resistance can be psychological or logical. Psychological resistance includes
resistance to interference, preference for established supply sources or brands, apathy,
reluctance to giving up something, unpleasant associations about other person, pre
determined ideas, dislike of making decisions and neurotic attitude towards money.

Logical resistance might consist of objections to the price, delivery schedule or certain
product or company characteristics. To handle these objections, the salesperson maintains
a positive approach, asks the buyer to clarify the objections or turns the objections into a
reason for buying. The salesperson needs training in the broader skills of negotiation of
which handling objections is a part.
6. Steps in eliminating doubts

Closing- Now the salesperson attempts to close the sale. Some salespeople do not get to
this stage or do not do it well. They lack confidence or feel uncomfortable about asking
for the order or do not recognize the right psychological moment to close the sale.

Salespersons need to know how to recognize closing signals from the buyer, including
physical actions, statements or comments and questions. Salespersons can use one of
several closing techniques. They can ask for the order, recapitulate the points of
agreement, offer to help the secretary write up the order, ask whether the buyer wants A
or B or indicate what the buyer will lose if the order is not placed now. The salesperson
might offer the buyer specific inducements to close, such as a special price, an extra
quantity at no charge or a token gift.

7. Follow-up and Maintenance

This last step is necessary if the salesperson wants to ensure customer satisfaction and
repeat business. Immediately after closing the salesperson should complete any necessary
details on delivery time, purchase terms and other matters. The salesperson should
schedule a follow up call when the initial order is received, to make sure there is proper
installation, instruction and servicing. This visit would detect any problems, assure the
buyer of the salespersons interest and reduce any cognitive dissonance that might have
arisen.
The salesperson should develop an account maintenance plan to make sure that the
customer is not forgotten or lost.
5.2 Unit linked insurance plan (ULIP)

Till recently, individuals seeking to provide protection to their family had no other option
except a life insurance term plan. The plan promised a stipulated amount to the family of
policyholder in the event of his death.

However, the insurance sector has evolved over the last few years and a number of
innovative products have hit the market. One product category that is increasingly
catching the fancy of individuals is the Unit linked Insurance Plan (ULIP). These plans, a
combination of insurance and investment, provide the policyholder with life cover and
additionally offer the opportunity to earn a return on the premium paid.

ULIPs give investors the best of both worlds -- risk cover and high returns. These
combine life cover with the potential for a bigger nest egg. ULIPs are insurance policies
in which the investment element, expenses and benefits are to the account of the policy
holder. The unit linked product in the long run is a very effective and efficient product on
offer for the customers, both in terms of return and cost. The basic investments are
identifiable. The assets of the fund can be equity share, fixed income securities, money
market instrument, property and derivative instruments.

ULIPs are riding high these days on their equity investments, increasingly making their
presence felt as savings and investment tools, a trend that is getting reflected in terms of
both performance and average ticket size.

Unit-linked products, the domain of which is seen to be expanding steadily, will continue
to attract sections of the investing populace, insurance companies feel, while referring to
figures that are evident in the latest performance charts.

ULIPs - those focusing on equities - have on the whole managed to perform well during
recent times, relative to the broad market, which has delivered decent returns in the past
few years, the frequent ups and downs in indices notwithstanding, they point out.

ULIPs, which are contemporary products across the world, are fast gaining in popularity
in India. Some of the factors contributing to their success are the simplicity, transparency
and flexibility of these plans.
These policies are adaptable to the changing needs of the customers over their lifetime.
They also give the choice to the customers to select an investment fund based on their
risk profile and offer all the benefits of a traditional life insurance plan.

The response to these plans is so encouraging that more and more players launching their
versions. Today, ULIP accounts for the bulk of the first year premium income that most
insurers earn going as high as 95 per cent for Birla Sun Life and ICICI Prudential.
According to data released by IRDA for April- December 2006, ULIP constituted almost
50% of the total portfolio in terms of premium income-a rise of 5%over the previous
corresponding period. Premium earned from ULIP increased as much as 127% in the
same period. Even in LIC during the previous fiscal, ULIPs contributed 72% of
individual business portfolio, compared to just 50% during 2005-06.

Share of traditional products in private insurers’ total portfolio has declined from 21%
during April-December 205 to 13% in April-December 2006.in case of LIC in declined
from 68% to 61% during the same period.

ULIPS CAGR Returns as on December 2006


1 year 2 year
HDFC Standard Life-growth 43.8 47.4
TATA AIG life-equity 39.3 42.2
Bajaj Allianz-equity plus 39.1 41.8
Bajaj Allianz-equity gain 38.4 41.1
Kotak aggress growth 47.2 40.6
ICICI Prudential Maximiser(growth)2 37.5 37.6
Aviva life-growth(old) 32.4 36.7
ICICI Prudential Maximiser(growth) 36.3 36.5
Reliance life return-equity 36.6 34.8
(Source: Asia Insurance Post, February 2007)
5.3 Name and address of the people whom I sold the policies.

1. Soumya Kanta Rath


Jagatsinghpur, Cuttack, Orissa

2. Stuti Pattanaik
Rajendra Nagar, Cuttack Orissa

3. Kishore Kumar Sahu


VSS Nagar, Bhubaneswar Orissa

4. Shyama Charan Pattanaik


Rengali Dam site, Anugul, Orissa

5. Ajit Kumar Sahoo


Keonjhar, Orissa
CHAPTER-6

COMPARISON OF FEATURES OF ULIP


(CAPITAL UNIT GAIN) OF BAJAJ ALLIANZ
LIFE INSURANCE COMPANY WITH SIMILAR
PRODUCTS OF OTHER COMPANIES.
6.1 Feature Comparison of Unit Linked Plans: Eligibility & Benefits

Features/Comp Bajaj Allianz ICICI Prudential Birla Sun Life


anies
Plan Name Capital Unit Gain Life Time Super New Classic Life
Premier
Min/Max Age 0 (risk commences at age 0 / 65 30 days to 30 yrs for
at entry 7)- 60 whole life plan, 40for
30 yrs term, 50 for 20
yrs term and so on.
Max Age at 70 75 Max maturity age 70
maturity years.
Min/max Term 10/Max till age 70 10 / Max life cover till 75 70 years.
Min Max 10,000/No limit 18,000/No Limit Min Annual premium
Premium of Rs.25000
Premium Type Regular Regular Limited (up to 5 yrs)
or Regular premium
Min/Max Sum Min S.A. =Higher of Min S.A. = Min S.A. 2 lacs.
Assured 5*Annualised Premium 0.5*term*Annualised Max S.A. No limit
& 0.5*term*Annualised Premium
Premium;
Max S.A. = y*annual
premium; where y is:
0-30: 125; 31-35: 90; 36-
40: 60;
41-45: 40; 46-55: 20; 56-
60: 15;

Death Benefit SA less withdrawals or SA net of permissible Before age 5 only FV


FV whichever is higher. withdrawals or FV Between age 5 & 60 –
Before age 7 it is the FV. whichever is higher. Before higher of FV or SA
DB to be set off by age 7 it is the FV. less withdrawals in last
partial withdrawals made 2 yrs prior to date of
2 yrs prior to death death. After age 60 –
before age 60 and by all higher of FV or SA
partial withdrawals made less all withdrawals
after age 58. made after age 58.

Maturity Fund Value, settlement Fund Value, settlement Fund Value


Benefit option option

Full Surrender After 3 years 100% FV. After 3 yrs. Charges after 3 Charges applicable in
Before 3 yrs 100% & 4, yrs are at 2% & 1% the first 6 years.
surrender penalty. respectively. No charges
from yr 5 onwards.
Feature Comparison of Unit Linked Plans: Eligibility & Benefits

Features/Companies Bajaj Allianz Tata AIG HDFC Standard


Plan Name Capital Unit Gain Invest Assure II Endowment Plus
Min/Max Age at 0 (risk commences at 30 days to 45/55/60 18-65, 55 with riders
entry age 7)- 60 yrs (depending on
term)
Max Age at maturity 70 75 75 without riders, 65
otherwise
Min/max Term 10/Max till age 70 15,20,30 10-30
Min Max Premium 10,000/No limit Rs 10,000
Premium Type Regular Regular Regular; Over the term of
the plan

Min/Max Sum Min S.A. =Higher of S.A. is a multiple of Min Term term*0.5*AP
Assured 5*Annualised A.P. Multiple Max up to 40* AP
Premium & depends on entry
0.5*term*Annualised age and term of the
Premium; policy and policy
Max S.A. = y*annual holder gets a choice
premium; where y is:
0-30: 125; 31-35: 90;
36-40: 60;
41-45: 40; 46-55: 20;
56-60: 15;

Death Benefit SA less withdrawals SA less permissible SA –withdrawals in last 2


or FV whichever is withdrawals or FV years plus FV whichever
higher. Before age 7 whichever is higher. is higher.
it is the FV. DB to be
set off by partial
withdrawals made 2
yrs prior to death
before age 60 and by
all partial
withdrawals made
after age 58.
Maturity Benefit Fund Value, Fund Value Fund value
settlement option

Full Surrender After 3 years 100% Anytime after 3 yrs. After 3 years 100% FV.
FV. Before 3 yrs Charges 100% first Before 3 yrs nothing is
100% surrender 3 yr reducing payable.
penalty. thereafter. No
charges after 6 yrs
(20, 30) & 5 yrs
(15).
Feature Comparison of Unit Linked Plans: Eligibility & Benefits

Features/ Bajaj Allianz Aviva SBI Life


Companies

Plan Name Capital Unit Gain Easy Life Plus Horizon ii


Min/Max Age 0 (risk commences at age 18-50 0-60
at entry 7)- 60
Max Age at 70 60 70
maturity
Min/max Max life cover till age 70 10, 15, 20, 25 10/40 (for minor lives
Term min term is 10 or 18-
entry age)
Min/ Max 10,000/No limit 6000/50000 12,000/100,000
Premium
Premium Regular Regular Regular; Over the
Type term of the plan

Min/Max Min SA =Higher of 10* AP for 10, 15 & 20 1.2 lakh/10 lakh
Sum Assured 5*Annualised Premium & yr terms. 12.5* AP for
0.5*term*Annualised 25 yr term
Premium;
Max SA = y*annual
premium; where y is:
0-30: 125; 31-35: 90; 36-
40: 60;
41-45: 40; 46-55: 20; 56-
60: 15;

Death Benefit SA less withdrawals or FV In yr 1, 110% of AP or FV+SA, for age


whichever is higher. Before FV whichever is below 7, FV only
age 7 it is the FV. DB to be higher; From yr 2
set off by partial onwards, higher of
withdrawals made 2 yrs Fund Value & SA. In
prior to death before age 60 case of accidental
and by all partial death, higher of SA &
withdrawals made after age FV + additional SA
58.

Maturity Fund Value; settlement Fund Value; settlement FV


Benefit option option

Full Surrender After 3 years 100% FV. 1-(1/1.05^N)] * value After 3 yrs, provided
Before 3 yrs 100% of initial units, at the at least 1 premium
surrender penalty. unit price on the date of has been paid.
maturity.

Feature Comparison of Unit Linked Plans: Eligibility & Benefits


Features/Com Bajaj Allianz Kotak Tata AIG
panies
Plan Name Capital Unit Gain Safe Investment Plan II Invest Assure Plus
Min/Max Age 0 (risk commences at 0-65 30 days to
at entry age 7)- 60 45/50/55/60 yrs
(depending on
term)
Max Age at 70 75 75
maturity
Min/max Term Max life cover till 10-30 15,20,25,30
age 70
Min Max 10,000/No limit 10,000/No Limit For Rs 50,000/ no
Premium regular premium, 50,000 limit
for limited pay
Premium Type Regular Regular & Limited SP
Payment;
3,5,6,7,10,15 & over term

Min/Max Sum Min SA =Higher of Greater of 1.25-25


Assured 5*Annualised 5*AP or 0.5* Term*AP
Premium &
0.5*term*Annualised
Premium;
Max SA = y*annual
premium;

Death Benefit S.A. less withdrawals SA less withdrawals made SA less


or F.V. whichever is in last 2 years prior to permissible
higher. Before age 7 death, or FV which ever is withdrawals or
it is the F.V. DB to be higher + funds in Supp FV whichever is
set off by partial A/c(top-up account) higher.
withdrawals made 2 DB to be set off by partial
yrs prior to death withdrawals made 2 yrs
before age 60 and by prior to death before age 60
all partial and by all partial
withdrawals made withdrawals made after age
after age 58. 58
Maturity Fund Value; with Guaranteed Maturity Value Fund Value; with
Benefit settlement option settlement option
Full Surrender After 3 years 100% Allowed only from top-up Anytime after 3
FV. Before 3 yrs account, Anytime after 3rd yrs.
100% surrender yr. Thereafter charges are
penalty. 3% in yr 4, 2% in yr 5, 1%
in yr 6 and 0% in yr 7
onwards.

Feature Comparison of Unit Linked Plans: Eligibility & Benefit

Features/ Bajaj Allianz Max New York life


Companies
Plan Name Capital Unit Gain Life Invest
Min/Max Age 0 (risk commences at age 7)- 60 91 days-70 yrs
at entry
Max Age at 70 75
maturity
Min/max Term Max life cover till age 70 Min 5/max 75; min term for RP is 10
Min Max 10,000/No limit Rs 50,000/ no limit
Premium
Premium Type Regular Regular; Limited, Single

Min/Max Sum Min SA =Higher of Min: 62500 for SP; 250000 for other
Assured 5*Annualised Premium & modes
0.5*term*Annualised Premium;
Max SA = y*annual premium;
where y is:
0-30: 125; 31-35: 90; 36-40: 60;
41-45: 40; 46-55: 20; 56-60: 15;

Death Benefit SA less withdrawals or FV Level Cover: SA –withdrawals or FV


whichever is higher. Before age 7 whichever is higher; For Increasing
it is the FV. DB to be set off by Cover: SA + FV
partial withdrawals made 2 yrs
prior to death before age 60 and
by all partial withdrawals made
after age 58.
Maturity Fund Value; with settlement Fund Value
Benefit option
6.2. Feature Comparison of Unit Linked Plans: Investment Funds & Flexibility

Features/ Bajaj Allianz ICICI Birla Sun Life


Companies Prudential
Plan Name Capital Unit Gain Life Time Super New Classic Life Premier
Investment 6 Funds 4 Funds: 6 Funds
Funds 1) Nifty Index Fund 1) Maximiser 1)Assure
2) Balancer Fund 2) Balancer 2)Protector
3) Income Fund 3) Protector 3)Builder
4) Liquid Fund 4) Preserver 4)Enhancer
5) Equity Growth 5)Creator
6) Accelerator MidCap 6)Magnifier
Fund

Equity Min Limit: 85% for Min Limit: 75% Max Limit: 90% for
Nifty Index & 80% for Maximiser; Magnifier; 50% for
Equity Growth and Max 40% for Creator; 35% for Enhancer;
Accelerator MidCap Balancer; 20% for Builder; 10% for
Protector;
Debt Min Limit: 80% for Max Limit: 25% Max Limit: 25% for
Income fund for Maximiser; Magnifier; 30% for
Min 60% for Creator; 30% for Enhancer;
Balancer; 100% 30% for Builder; 30% for
for Protector; Protector; 50% for Assure
Max 50% for
Preserver;
Money market Max Limit: 20% for Max Limit: 25% Max Limit: 20% for all;
Income Fund, Equity for Maximiser;
Growth Fund, Min 60% for
Accelerator MidCap Balancer; 100%
Fund; 15% for Nifty for Protector; Min
Index Fund, 50% for
100% for Liquid Fund Preserver;
Top-Ups Min Rs 5000; Max none Min Rs 10,000. Max No
cumulative top-up to be limit with additional SA
within 25% of max
cumulative RP
Switch 3 free switches 4 free switch, min 2 free switches
switch amt 2000
Increase or Not allowed. Not Allowed Not Allowed
decrease in
regular
premium
Premium Available. Available Available
Holiday
Guarantee None Bonus Units Loyalty additions as given
component above.
Feature Comparison of Unit Linked Plans: Investment Funds & Flexibility

Features/ Bajaj Allianz Tata AIG SBI Life


Companies
Plan Name Capital Unit Gain Invest Assure II Horizon II
Investment 6 Funds 5 Funds 2 Funds (composite)
Funds 1) Nifty Index Fund 1. Equity 1.Dynamic
2) Balancer Fund 2. Income 2. Growth
3) Income Fund 3. Liquid (Automatic Asset
4) Liquid Fund 4. Aggressive Growth Allocation)
5) Equity Growth Fund 5. Stable Growth
6) Accelerator MidCap

Equity Min Limit: 85% for Nifty 0-100% for Equity; 50- Max Limit: 100%
Index & 80% Equity 80% for Aggressive
Growth and Accelerator Growth; 30-50% for
MidCap Stable Growth
Debt Min Limit: 80% for 0-100% for Income; 20- Max Limit: 100%
Income fund 50% for Aggressive
Growth; 50-70% for
Stable Growth; 0-20%
for liquid
Money market Max Limit: 20% for 0-20% for Short Term Max Limit: 100%
Income Fund, Equity Fixed Income
Growth Fund,
Accelerator MidCap
Fund; 15% for Nifty
Index Fund,
100% for Liquid Fund
Top-Ups Min Rs 5000; Max Up to 2 times a yr. Min Rs 1,000
cumulative top-up to be 10000, max no limit.
within 25% of max Cumulative top-up
cumulative RP amount exceeding 25%
of cumulative RP amt to
increase SA by 1.25% or
5%
Switch 3 free switches 4 free switches p.a. Automatic Asset
Allocation
Increase or Not allowed. Not allowed. Not Allowed
decrease in
regular
premium
Premium Available. Available. Available
Holiday
Guarantee None None None
component
Feature Comparison of Unit Linked Plans: Investment Funds & Flexibility

Features/ Bajaj Allianz Aviva HDFC Standard


Companies
Plan Name Capital Unit Gain EasyLife Plus Endowment Plus
Investment 6 Funds 2 Funds: 6 Funds:
Funds 1) Nifty Index Fund 1) With Profit Funds; 1. Liquid Fund;
2) Balancer Fund 2) Unit Linked Fund 2. Secure Managed Fund;
3) Income Fund a) Protector Fund; 3. Defensive Managed Fund;
4) Liquid Fund b) Growth fund; 4. Balanced Managed Fund;
5) Equity Growth c) Balanced Fund; 5.Equity Managed Fund
Fund Option to put 100% 6.Growth Fund;
6) Acclerator in either fund.
MidCap Fund

Equity Min Limit: 85% for Max Limit: 20% for Max Limit:: 30% for
Nifty Index & 80% with profit funds & Defensive; 60% for
Equity Growth and Protector; 45% for Balanced; 100% for Growth
Accelerator MidCap Balanced; and Equity Managed
30-85% for Growth;
Debt Min Limit: 80% for 70-100% for With 85% for Defensive; 70% for
Income fund Profit & 60-100% Balanced; 40% for Equity
for Protector; 50-90%
for Balanced; 0-50%
for Growth;
Money market Max Limit: 20% for 0-10% for With Profit 100% for Liquid Funds
Income Fund, & Balanced; 0-20%
Equity Growth for Protector &
Fund, Accelerator Growth;
MidCap Fund; 15%
for Nifty Index
Fund,
100% for Liquid
Fund
Top-Ups Min Rs 5000; Max none Rs 5,000 max within 25% of
cumulative top-up to total RP paid till date of
be within 25% of payment of top-up.
max cumulative RP
Switch 3 free switches 2 free switch Allowed
Increase or Not allowed. Not allowed Increase/decrease is allowed.
decrease in Decrease is allowed after
regular premium 3yrs of premium payment
and FV at least Rs 15,000.
Premium Available. Available Available
Holiday
Guarantee None none None
component

Feature Comparison of Unit Linked Plans: Investment Funds & Flexibility

Features\ Companies Bajaj Allianz Kotak


Plan Name Capital Unit Gain Safe Investment Plan II
Investment Funds 6 Funds 6 Funds
1) Nifty Index Fund 1. Money Market
2) Balancer Fund 2. Gilt
3) Income Fund 3. Bond
4) Liquid Fund 4. Balanced
5) Equity Growth Fund 5. Growth
6) Acclerator MidCap Fund 6. Floating Rate Fund

Equity Min Limit: 85% for Nifty Max Limit::60% for


Index & 80% Equity Balanced & 80% for
Growth and Accelerator Growth;
MidCap
Debt Min Limit: 80% for Income 100% for Gilt; Bond;
fund Floating Rate, 70% in
Balanced; 60% for Growth
Money market Max Limit: 20% for Income 100% for Money Market;
Fund, Equity Growth Fund, 20% for Gilt, Bond,
Accelerator MidCap Fund; Floating Rate; Balanced &
15% for Nifty Index Fund, Growth.
100% for Liquid Fund
Top-Ups Min Rs 5000; Max Min Rs 10,000.
cumulative top-up to be
within 25% of max
cumulative RP
Switch 3 free switches Allowed. No charges.
(bid/offer spread)
Increase or decrease in Not allowed. Increase/decrease not
regular premium allowed
Premium Holiday Available. Available
Guarantee component None SA guaranteed at maturity
Feature Comparison of Unit Linked Plans: Investment Funds & Flexibility

Features/ Bajaj Allianz Max New York Tata AIG


Companies
Plan Name Capital Unit Gain Life Invest Invest Assure Plus
Investment 6 Funds 4 Funds: 5 Funds
Funds 1) Nifty Index Fund 1. Secure Fund 1. Equity
2) Balancer Fund 2. Conservative Fund 2. Income
3) Income Fund 3. Balanced Fund; 3. Short Term Fixed
4) Liquid Fund 4. Growth Fund; Income
5) Equity Growth Fund 4. Aggressive Growth
6) Accelerator MidCap 5. Stable Growth
Fund

Equity Min Limit: 85% for Nifty 20-70% for Growth; 10-40% 0-100% for Equity; 50-
Index & 80% Equity for Balanced; 0-15% for 80% for Aggressive
Growth and Accelerator Conservative; Growth; 30-50% for Stable
MidCap Growth;
Debt Min Limit: 80% for 0-60% for Growth; 20-90% 0-100% for Income; 20-
Income fund for Balanced; 50-100% for 50% for Aggressive
Conservative; 50-100% for Growth; 50-70% for Stable
Secure; Growth; 0-20% for liquid

Money Max Limit: 20% for 0-20% in each fund 0-20% for Short Term
market Income Fund, Equity Fixed Income
Growth Fund, Accelerator
MidCap Fund; 15% for
Nifty Index Fund,
100% for Liquid Fund
Top-Ups Min Rs 5000; Max Min Rs 10000; Max Up to 4 times a yr. Min
cumulative top-up to be cumulative top-up to be 5000,max no limit.
within 25% of max within 25% of max Cumulative top-up amount
cumulative RP cumulative RP exceeding 25% of
cumulative RP amt to
increase SA by 1.25% or
5%
Switch 3 free switches 6 free switches 4 free switches p.a.
Increase or Not allowed Not allowed Not allowed
decrease in
regular
premium
Premium Available Available if opted Not applicable
Holiday

Capital Unit Gain guarantees a maturity value of Rs 9, 20,634.865 at the end of 20th
year if someone pays premium of Rs10, 000 for first 3 years only. Even if a person
discontinues paying premium after first 3 annual payments, the fund value continues to
grow at a rate of 20% per annum.

If a person continues to pay premium for the whole period then the fund value at the end
of 20th year comes out to be approximately Rs 22, 00,000 calculated at a rate of 20%
growth per year. The actual fund value at the end of 20th year may be even higher than
this if the stock market keeps on growing at the current rate.

For the first 3 years, 95% of the premium is allocated to purchase units of mutual funds.
There after 100% of premium is allocated. This is the only unit linked insurance policy in
the market that has 95% premium allocation. That is why its returns are the highest.
CHAPTER-7

FINDINGS
The following products were compared among themselves.

1. Bajaj Allianz (Capital Unit Gain)


2. ICICI Prudential (Life time-II)
3. SBI Life (Horizon-II)
4. HDFC Standard(Endowment plus)
5. max new life(Life Invest)
6. TATA AIG(Invest Assure-II)
7. AVIVA(Easy Life Plus)
8. Kotak(Safe Investment Plan II)
9. Birla Sun Life(New Classic Life Premier)

It was found that CUG of Bajaj Allianz has a mileage over similar products of other
companies in many aspects. The most important feature is the fund allocation.95% of
premium paid during the first three years is allocated to get funds and 100% is allocated
afterwards. No other policy in the insurance market is available with such a high degree
of allocation.

The findings are given below:

1. Maximum age at maturity is as follows:


For ICICI Prudential, ATA AIG, Kotak, Max New York-75
For Bajaj Allianz, Birla sun life, SBILife-70
For AVIVA-65
2. Minimum premium is charged by AVIVA (Rs. 6000 per annum)
3. Minimum top-up premium is provided by SBI Life (Rs 1000 per annum)
4. Maximum number of free switches is offered by Max New York (6 in number per
annum)
5 Number of investment funds are as follows:
SBI-2
Aviva-3
Max-4
TATA AIG-5
Bajaj Allianz, Birla sun life, SBI Life-6
6. Premium allocated to purchase units in stock market is as follows.
Bajaj Allianz--------95%
Max New York-----88%
SBI Life--------------80%
ICICI prudential----76%
LIC ------------------73%
HDFC Standard-----74%
Kotak ----------------73%
TATA AIG----------50%

CHAPTER-8

CONCLUSION
Marketing and sells:

Seventy-eight million households in rural India and 31 million in urban India are aware
of life insurance but did not possess any policy. They need to understand the importance
of taking a policy on their lives or their family members’ lives.

Product comparison:

From the above tables showing comparable features of products of Bajaj Allianz with that
of other companies, it is very clear that the policy capital unit gain is the best ULIP for
investment purposes. It has got the maximum premium allocation so it gives the
maximum maturity value. It is simply incomparable. That is why this particular product
has got tremendous appreciation among the customers. This is evident from the amount
of business it gives to the total premium earned by this company.
REFERENCE
1. Shri Sekhar Chandra Sahoo, “Concept of Selling In Life Insurance”, The Journal
of Insurance Institute of India, July –December 2004.

2. “Salesmanship In Insurance” by Prof. Sanjiv Marwah, Apeejay Business School,


Dwarka, New Delhi.

3. Ritu Nanda, “Being an insurance agent-the pride and prejudice”, IRDA Journal
January 2007.

4. The Economic Times, 16 July 2007, “Capital Unit Gain behind the success of
Bajaj Allianz”.

5. S.S.Shrinivas and V. Anand, “Unit Linked insurance Products”, Insurance


Chronicle, December 2005.

6. Simon Drimer, “Towards widening the existing customer base”, page no.125,
Insurance Industry-Contemporary Issues, ICFAI University Press.

7. A.N.Poddar, “Marketing strategies for insurance products in the emerging


scenario”, page no.106, Indian insurance industry-transition and prospects, New
Century Publication.

8. K.Nitya Kalyani, “A wholesome profession-The agent’s work could use some


sprucing up”, IRDA journal January 2005.

9. “Marketing insurance. How to become a super successful insurance salesman” by


G.N.Bajpai.

10. Ravi Shankar, “Marketing of insurance services” chapter-19, page no.275,


published in Services Marketing-the Indian perspective, Excel Books.

11. Ms. Suranjita Lahiri, “Brand Identity- Its Influence In Customer Decision
Making”, The Journal of Insurance Institute of India, July –December 2004.

12. V.J.Varghese, “My Story”, Insurance Watch, April 2004.

13. Outlook Money, 14 Apr 2007, “The Terror Agent”.

14. The Business Line, 02 March 2006, “Selling life”.


15. Outlook Money, 15 May 2005, “ULIP Mania”.

16. The Economic Times, 1 July, 2006, “ULIP plans to flood market”.

17. Moneycontrol.com, 2006-12-11, “Bajaj Allianz Life launches Capital Unit Gain”.

18. The Economic Times, 16 July 2007, “Capital Unit Gain behind the success of
Bajaj Allianz”.

19. The Economic Times, 30 January 2005, “Look before ULIP with insurance
investment vehicles”.

20. Outlook Money, 2 January 2006 “Cover All Bases”.

21. The Business Line, 10 June 2007, “Know all About ULIPS”.

22. Product brochures of different life insurance companies.

23. Web site of all Life Insurance companies operating in India.

24. “Certified Insurance Consultant Program” of Bajaj Allianz Life Insurance Co.

25. www.irdaindia.gov

26. www.lifeinsurancecouncil.com