Summer Training Project Report

(Completed In Tata AIG Bareilly)

Topic : Comparison Between ULIPs And Traditional Plans

Submitted To: Mr. PAVAN RATHI

Submitted By:MOHD. ZUBAIR M.B.A. 3rd sem. Roll No.:-820860072 G.J.E.S. Bareilly.

Preface
This Project Report is done to study Comparative analysis of ULIPs V/s Traditional plans This Project Report is done by collecting the data from some magazine, Tata AIG life website, text book of life insurance. Money simplified (text book). Neev: product book. All the data has been gathered and then properly analyzed. The findings have been presented in a lucid manner.

ACKNOWLEDGEMENT
Generally it is said that there is always a theory works behind practical but I personally observed and reached to the conclusion that there is a practical behind every theory.To fulfill the requirement of our academic curriculum and to attain practical knowledge the present project work has been conducted under the mutual guidance of our academic lecture and corporate professionals. I would like to thanks Mr. Sailesh verma (Branch Manager of Tata AIG life Bareilly) and DR. Mohd Asive Khan (convenor of Business Administration) who helped me throughout the project. Last but not the least I would like to give a word of appreciation to those who have provided their full support for the successful completion of this project.

INTRODUCTION Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during: 1- The date of maturity, or 2- Specified dates at periodic intervals, or 3-Unfortunate death, if it occurs earlier. IN other words its a written contract or certificate of insurance that provides protection against future loss. A promise of reimbursement in the case of loss; paid (sum assured) to people or companies (insured) so concerned about hazards that they have made prepayments (premiums) to an insurance company (insurer). Insurance is a contractual arrangement that provides for compensation by an insurer to an insured party if or when a specified set of circumstances occurs. Such circumstances may include death or personal injury, accident, unemployment or old age, loss of or damage to property, or any one of a number of instances that can be compensated for financially. The insurer conducts its operations by amassing relatively small contributions from many people who are exposed to the risk of occurrence of an unforeseen event in order to create a fund that is used to reimburse those insured who actually suffer from such an occurrence. The contributions of the policyholders are called premiums. A contract of insurance is embodied in a policy that specifies the terms under which the insurer agrees to indemnify the policyholder for loss in consideration of the payment of a stated premium or premiums.

Brief History of Insurance Sector

The roots of insurance might be traced to Babylonia, where traders were encouraged to assume the risks of the caravan trade through loans that were repaid (with interest) only after the goods had arrived safelya practice resembling bottomry and given legal force in the Code of Hammurabi (c.2100 BC). The Phoenicians and the Greeks applied a similar system to their seaborne commerce. The Romans used burial clubs as a form of life insurance, providing funeral expenses for members and later payments to the survivors. With the growth of towns and trade in Europe, the medieval guilds undertook to protect their members from loss by fire and shipwreck, to ransom them from captivity by pirates, and to provide decent burial and support in sickness and poverty. By the middle of the 14th cent., as evidenced by the earliest known insurance contract (Genoa, 1347), marine insurance was practically universal among the maritime nations of Europe. In London, Lloyd's Coffee House (1688) was a place where merchants, ship owners, and underwriters met to transact business. By the end of the 18th cent. Lloyd's had progressed into one of the first modern insurance companies. In 1693 the astronomer Edmond Halley constructed the first mortality table, based on the statistical laws of mortality and compound interest. The table, corrected (1756) by Joseph Dodson, made it possible to scale the premium rate to age; previously the rate had been the same for all ages. Insurance developed rapidly with the growth of British commerce in the 17th and 18th cent. Prior to the formation of corporations devoted solely to the business of writing insurance, policies were signed by a number of individuals, each of whom wrote his name and the amount of risk he was assuming underneath the insurance proposal, hence the term underwriter.

The first stock companies to engage in insurance were chartered in England in 1720, and in 1735, the first insurance company in the American colonies was founded at Charleston, S.C. Fire insurance corporations were formed in New York City (1787) and in Philadelphia (1794). The Presbyterian Synod of Philadelphia sponsored (1759) the first life insurance corporation in America, for the benefit of Presbyterian ministers and their dependents. After 1840, with the decline of religious prejudice against the practice, life insurance entered a boom period. In the 1830s the practice of classifying risks was begun. The New York fire of 1835 called attention to the need for adequate reserves to meet unexpectedly large losses; Massachusetts was the first state to require companies by law (1837) to maintain such reserves. The great Chicago fire (1871) emphasized the costly nature of fires in structurally dense modern cities. Reinsurance, whereby losses are distributed among many companies, was devised to meet such situations and is now common in other lines of insurance. The Workmen's Compensation Act of 1897 in Britain required employers to insure their employees against industrial accidents. Public liability insurance, fostered by legislation, made its appearance in the 1880s; it attained major importance with the advent of the automobile. In the 19th cent. Many friendly or benefit societies were founded to insure the life and health of their members, and many fraternal orders were created to provide low-cost, members-only insurance. Fraternal orders continue to provide insurance coverage, as do most labor organizations. Many employers sponsor group insurance policies for their employees; such policies generally include not only life insurance, but sickness and accident benefits and old-age pensions, and the employees usually contribute a certain percentage of the premium.

Since the late 19th cent. there has been a growing tendency for the state to enter the field of insurance, especially with respect to safeguarding workers against sickness and disability, either temporary or permanent, destitute old age, and unemployment . The U.S. government has also experimented with various types of crop insurance, a landmark in this field being the Federal Crop Insurance Act of 1938. In World War II the government provided life insurance for members of the armed forces; since then it has provided other forms of insurance such as pensions for veterans and for government employees. After 1944 the supervision and regulation of insurance companies, previously an exclusive responsibility of the states, became subject to regulation by Congress under the interstate commerce clause of the U.S. Constitution. Until the 1950s, most insurance companies in the United States were restricted to providing only one type of insurance, but then legislation was passed to permit fire and casualty companies to underwrite several classes of insurance. Many firms have since expanded, many mergers have occurred, and multipleline companies now dominate the field. In 1999, Congress repealed banking laws that had prohibited commercial banks from being in the insurance business; this measure was expected to result in expansion by major banks into the insurance arena. In recent years insurance premiums (particularly for liability policies) have increased rapidly, leaving unprecedented numbers of Americans uninsured. Many blame the insurance conglomerates, contending that U.S. citizens are paying for bad risks made by the companies. Insurance companies place the burden of guilt on law firms and their clients, who they say have brought unreasonably large civil suits to court, a trend that has become so common in the United States that legislation has been proposed to limit lawsuit awards. Catastrophic earthquakes, hurricanes, and wildfires in late 1980s and the 90s have also strained many insurance company's reserves.

History Of Insurance Sector In India

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd was set up. This was the first company to transact all classes of general insurance business. In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the General Insurance Business (Nationalization) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973. This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector.
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The objective was to complement the reforms initiated in the financial sector. The committee submitted its report in 1994 wherein, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies are allowed to enter by floating Indian companies, preferably a joint venture with Indian partners. Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests. In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002. The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the countrys GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country.

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The insurance sector in India has Came in a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360degree turn witnessed over a period of almost 190 years. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.

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Some of the important milestones in the life insurance business in India are: 1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938 - Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956 - 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

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INDIAN INSURANCE COMPANY S.No. Registration Date of Reg. Number 1 2 3 4 5 6 7 8 9 10 11 101 104 105 107 109 110 111 114 116 117 133 23.10.2000 15.11.2000 24.11.2000 10.01.2001 31.01.2001 12.02.2001 30.03.2001 02.08.2001 03.08.2001 06.08.2001 04.09.2007 Name of the Company HDFC Standard Life Insurance Company Ltd. Max New York Life Insurance Co. Ltd. ICICI Prudential Life Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Limited Birla Sun Life Insurance Company Ltd. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited . ING Vysya Life Insurance Company Private Limited Bajaj Allianz Life Insurance Company Limited Metlife India Insurance Company Ltd. Future General India Life Insurance Company Limited

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135

19.12.200 7

IDBI Fortis Life Insurance Company Ltd.

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Yr: 2001-2002: (From 1st Jan 2001 to Dec. 2002) Insurance Industry in this year, so far has 5new entrants; namely Life Insurers: S.No. 1 Registration Number 121 Date of Reg. 03.01.2002 Name of the Company AMP Sanmar Life Insurance Company Limited. Aviva Life Insurance Co. India Pvt. Ltd.

122

14.05.2002

Yr: 2003-2004 : ( From 1st Jan 2003 till Date) Insurance Industry in this year, so far has 1new entrants; namely Life Insurers: S.No. 1 Registration Number 127 Date of Reg. 06.02.2004 Name of the Company Sahara India Insurance Company Ltd.

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Yr: 2004-2005 : Insurance Industry in this year, so far has 1new entrants; namely Life Insurers: S.No. 1 Registration Number 128 Date of Reg. 17.11.2005 Name of the Company Shriram Life Insurance Company Ltd.

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There are 18 private Co. which are working in life insurance sector:1-Bajaj Allianz 2-ICICI Prudential 3- HDFC Standard 4-SBI Life 5-Birla Sun life 6-Tata AIG life 7-Max New York Life 8-Aviva Life 9-Kotak Mahindra 10-ING Vysya 11-Reliance Life 12-Met Life 13-Sahra Life 14-Shriram Life 15-Bharti Axa Life 16- Life insurance corporation 17- Future General India Life Insurance 18- IDBI Fortis Life Insurance Company Ltd.

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Indian Insurance Industry Forecast (2008-2009) Life insurance market in India will likely reach around Rs 1683 Billion by the year 2009. Changing consumer behavior, GDP growth rate, changing socio economic demography, and natural calamities occurring from time to time will remain the key contributors in this growth. The market is expected to grow at a CAGR of more than 200% YOY from the year 2006. Outstanding performance of SBI Life, ICICI Prudential, and LIC helped the Indian life insurance industry in mopping up almost Rs 2,892 crore. On the other hand, Reliance Life, ING Vysya, and Bajaj Allianz were amongst those insurers that came across a decline in their premium collection over the review period, as per the data compiled by Insurance Regulatory & Development Authority. Key Issues:There are some issues and facts that are critical to business success: - What are the marketing strategies of the players in the insurance industry? - How is the growth in Health and Group insurance are driving the Insurance sector in India? - What are the opportunities for the players in this industry and what are the challenges to sustain the Insurance market in India? - What will be the prospective areas of investments in the insurance industry in the near future? - Which factors will lead to the growth of Life and Non-life insurance in India?

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Key Players This section provides an overview of some of the key players in this industry like 1- Bajaj Allianz, 2- ING Vysya, 3- SBI Life, 4-Tata AIG Life, 5- HDFC Standard, 6- ICICI Prudential Life Insurance, 7- Birla Sun life, 8-Aviva Life Insurance, 9- Kotak Mahindra Old Mutual, 10- Max New York Life, 11- Met Life, 12- Sahara Life, 13-LIC, 14- Royal Sundaram, 15- Tata-AIG General, 16-Reliance General, 17- IFFCO-Tokio, 18-ICICI-Lombard, 19- HDFC Chubb, 20- New India Assurance Company Limited, 21- National Insurance Company Limited, 22-United India Insurance Company Limited 23- Oriental Insurance Limited.

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The industry is under immense pressure to cut its costs. Regulation by organizations such as the Financial Services Authority (FSA) and the EU is increasing, and this is undoubtedly adding to the industry's cost base. At the same time, premium rates have been softening as insurers have undercut each other's prices in order to win business. How long this situation will continue is debatable, given that many in the industry believe that premium rates need to rise in order to make up for growth in the cost of claims. There is inevitably some concern about profitability in the industry. Particular attention is being paid to long-term insurance, since this sector accounts for the majority of sales. Changes in the rules governing the sale of insurance (as laid down by the FSA) have opened up new channels of distribution, with the result that insurance companies have increased their number of outlets. However, the big problem for the industry is that people are not saving enough. In October 2005, the Pensions Commission will deliver its recommendations on how to address the so-called pensions gap, i.e. the difference between the amount consumers need to save for their retirement and the amount they are actually saving. The Commission may recommend some element of compulsion in personal pensions. The insurance market will grow by between 3.3% and 3.7% each year between 2005 and 2009. Unless consumer behaviour changes dramatically or the Government makes personal pensions compulsory, sales of general insurance are likely to continue to grow faster than sales of long-term insurance.

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Tata AIG

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Groups pre-eminent leadership position in India and AIGs global presence as the worlds leading international insurance and financial services organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 percent. Tata AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001. Tata AIG General Insurance Company, which started its operation in India on Jan 22, 2001, offers the complete range of insurance for automobile, home personal, accident, travel, energy, marine, property and casualty, as well as several specialized financial lines.

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Tata AIG Life Insurance Company Ltd. and Tata AIG General Insurance Company Ltd. (collectively "Tata AIG") are joint venture companies, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength.

TATA AIG VISION To be the fastest growing Life Insurance Company in India, measured by annualized premium growth, procuring persistent business, delivering first class customer service, adding shareholder value in the coming year.

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HISTORY OF TATA GROUP The TATA group is India's best-known industrial group in the private sector with a turnover of around US $ 10.4 billion (equivalent to 2.4% of India's GDP). It is India's most respected private business group. With 219000 employees across 94 major companies, it is also India's largest employer in the private sector. Founded by Jamsetji Tata in the 1860s, the Tata group's early years were inspired by the spirit of nationalism. The Tata group pioneered several firsts in Indian industry: India's first private sector steel mill, first private sector power utility, first luxury hotel chain and first international airline, amongst others. In more recent times, the Tata group's pioneering spirit continues to be showcased by companies like Tata Consultancy Services (TCS), today Asia's largest software and services company, and Tata Engineering, the first car maker in a developing country to design and produce a car from the ground up. The Tata group has always sought to be a value-driven organization. These values continue to direct the group's growth and businesses. The five core TATA values underpinning the way we do business are:Integrity: We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny. UnderstandingWe must be caring, show respect, compassion and humanity for our colleagues and customers around the world and always work for the benefit of India.

Excellence: We must constantly strive to achieve the highest possible standards in our day to day work and in the quality of the goods and services we provide.
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Unity: We must work cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Responsibility: We must continue to be responsible, sensitive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over. Business Sectors:The TATA Group operates business in seven key industry sectors. The chart below illustrates how, in percentage terms, TATA companies in each of these sectors contribute to the overall makeup of the group. The table follows the group's sector wise financial performance. The Tata brand is recognized as the largest homegrown brand in India and the most respected brand across consumer segments. The Tata Group's stable of brands also include many national and some internationally renowned product and service brands, including Tata Indica, Tata Indigo, Tata Safari, Taj(Hotels, Resorts & Palaces), Voltas, Tata Tea, Tata Sault, Titen, Tanishq, Westside and the largest addition, Tata Indicom. The Tata Group has always believed in returning wealth to the society it serves. Thus, nearly two-third of the equity of Tata sons, the Tata Group's promoter company, is held by philanthropic trusts which have created a host of national institutes in community development, education and research centers, hospitals and scientific and cultural establishments. The trusts also give substantial annual grants and endowments to deserving individuals and institution in the areas of education, healthcare and social upliftment.

By combining ethical values with business acumen, globalization with national interests and core business with emerging ones, the Tata Group aims to be the largest and most respected global brand from India whilst fulfilling its longstanding commitment to improving the quality of life of its stakeholders.

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FAMILY TREE

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Jamsetji Tata Founder of India's largest and internationally best known group of companies, Began with a textile mill in central India in the 1870s

Sir Dorabji Tata Sir Dorabji Tata Trust (1932)

Sir Ratan Tata

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Jehangir Ratanji Dadabhoy Tata (1904 - 1993)

Ratan N. Tata Group Chairman

1868: Jamsetji Nusserwanji Tata starts a private trading firm, laying the foundation of the Tata Group. 1974-The Central India Spinning, Weaving and Manufacturing Company is set up, marking the Group's entry into textiles.
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1902-The Indian Hotels Company is incorporated to set up the Taj Mahal Palace and Tower, India's first luxury hotel, which opened in 1903. 1907 The Tata Iron and Steel Company (now Tata Steel) is established to set up India's first iron and steel plant in Jamshedpur. The plant started production in 1912. 1910-The first of the three Tata Electric Companies, the Tata Hydro-Electric Power Supply Company, (now Tata Power) is set up. 1911-The Indian Institute of Science is established in Bangalore to serve as a centre for advanced learning. 1912:-Tata Steel introduces eight-hour working days, well before such a system was implemented by law in much of the West. 1917:-The Tata enter the consumer goods industry, with the Tata Oil Mills Company being established to make soaps, detergents and cooking oils. 1932:Tata Airlines, a division of Tata Sons, is established, opening up the aviation sector in India. 1939:-Tata Chemicals, now the largest producer of soda ash in the country, is established 1945:-Tata Engineering and Locomotive Company (renamed Tata Motors in 2003) is established to manufacture locomotive and engineering products. Tata Industries is created for the promotion and development of hi-tech industries

1954:-Jawaharlal Nehru, India's first Prime Minister, requests the Group to manufacture cosmetics in India, leading to the setting up of Lakme 1954:-India's major marketing, engineering and manufacturing organisation, Voltas, is established.
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1962:-Tata Finlay (now Tata Tea), one of the largest tea producers, is established. Tata Exports is established. Today the company, renamed Tata International, is one of the leading export houses in India 1968:-Tata Consultancy Services (TCS), India's first software services company, is established as a division of Tata Sons. 1970:-Tata McGraw-Hill Publishing Company is created to publish educational and technical books. Tata Economic Consultancy Services is set up to provide services in the field of industrial, marketing, statistical and techno-economic research and consultancy. 1984:-Titan Industries a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO) is set up to manufacture watches. 1991:-Tata Motors rolls out its millionth vehicle. (The two-million mark was reached in 1998 and the third million in 2003.) 1999:-The new Tata Group corporate mark and logo are launched. 2000:-Tata Tea acquires the Tetley Group, UK. This is the first major acquisition of an international brand by an Indian business group. 2001:-Tata AIG a joint venture between the Tata Group and American International Group Inc (AIG) marks the Tata re-entry into insurance. (The Group's insurance company, New India Assurance, was nationalised in 1956)

The Tata Group Executive Office (GEO) is set up to design and implement change in the Tata Group and to provide long-term direction

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2002:-The Tata Group acquires a controlling stake in VSNL*, India's leading international telecommunications service provider Tata Consultancy Services (TCS) becomes the first Indian software company to cross one billion dollars in revenuesTitan launches Edge, the slimmest watch in the world Idea Cellular, the cellular service born of a tie-up involving the Tata Group, the Birla Group and AT&T, is launched. Tata Indicom, the umbrella brand for telecom services from the Tata Teleservices stable, starts operations 2003:-Tata Motors launches CityRover Indicas fashioned for the European market. The first batch of CityRovers rolled out from the Tata Motors stable in Pune on September 16, 2003. 2004:-Tata Motors acquires the heavy vehicles unit of Daewoo Motors, South Korea TCS goes public in July 2004 in the largest private sector initial public offering (IPO) in the Indian market, raising nearly $1.2 billion. 2005:-Tata Steel acquires Singapore-based steel company NatSteel by subscribing to 100 per cent equity of its subsidiary, NatSteel Asia VSNL* acquired Tyco Global Network, making it one of the world's largest providers of submarine cable bandwidth Tata Sons completes 60 years of Tata operations in the US The Taj takes over management of The Pierre, NY Taco acquires Wundsch Weidinger, Germany Trent acquires majority stake in India's largest, privately owned books and music retailer, Landmark Tata Steel acquires stake in Carborough Down Coal Project, Queensland, and Australia VSNL* acquires Teleglobe International Holdings, Bermuda TCS acquires Sydney-based Financial Network Services (FNS)

Tata Motors passenger vehicle sales cross one-million mark TCS acquires leading BPO firm Comicrom in Chile The Indian Hotels Company acquires hotel run by Starwood, Sydney Tata Steel acquires Millennium Steel, Thailand
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Tata Chemicals acquires controlling stake in Brunner Mond Group, UK. 2006:-Tata Credit Card launched Foundation stone for the Tata Medical Centre unveiled in Kolkata TCS launches Indias largest e-governance initiative, MCA-21 Tata Steel ranked worlds best steel maker for the third time by World Steel Dynamics Tata Coffee acquires US-based Eight Oclock Coffee Tatas join hands with Indigene Pharmaceuticals to build a global biopharmaceutical company Tata Sky satellite television service launched across the country Tata Steel begins construction of R670 million Ferrochrome plant in South Africa Tata Group acquires 30-per cent stake in Glacau VSNL* rebrands SNO as Neotel in South Africa 2007:-Tata Refractories sets up Greenfield plant in China Tata Research Design and Development Centre celebrates silver jubilee Tata Steel acquires Corus TCS inaugurates TCS China a joint venture with Chinese government and other partners Tata Steel acquires Rawmet Industries in Orissa Tata Steel, through its subsidiary NatSteel Asia, acquires controlling equity stake in two rolling mills located in Vietnam Tata Motors rolls out its 100,000th Ace within 20 months of the vehicle's initial launch Indian Hotels acquires Campton Place Hotel in San Francisco Tata Tea subsidiary, the Tetley group, signs an agreement to acquire the Vitax and Flosana trademarks in Poland, from Premium Foods. VSNL*, through Neotel, acquires Transtel Telecoms, South Africa TCS sets up its first global delivery centre at Guadalajara in Mexico VSNL* rolls out wi-max services in India

Tata Tea takes the No 1 position in terms of volume share in India in the packet tea segment Tata Motors is listed on the world's largest bourse, the New York Stock Exchange, the second Group Company to do so after VSNL
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Tata Steel celebrates its centenary on August 26, 2007 Tata Teleservices crosses the 1-million subscriber mark in Kolkata Tata Teleservices unveils the country's first full-fledged web-browser for mobile phones Tata Teleservices' subscriber base crosses the 20-million mark www.autojunction.in introduces auto e-retailing for the first time in India Tata Motors rolls out the one-millionth passenger car off the Indica platform Computational Research Laboratories, a division of Tata Sons, develops Eka, the fourth fastest supercomputer in the world and the fastest supercomputer in Asia VSNL* is renamed as Tata Communications 2008:-Tata Motors unveils Tata Nano, the Peoples Car, at the 9th Auto Expo in Delhi on January 10, 2008 Tata Projects acquires a majority stake of 75 per cent in Artson Engineering Tata Steel performs the groundbreaking ceremony for expanding its Jamshedpur capacity to 10 million tonne annually Indian Hotels' Taj Leisure Hotels launches Taj Tashi at Thimphu, Bhutan Tata Tea forays into the out-of-home beverage segment by unveiling its first outlet, Chai Unchai, at Bangalore Tata Sons unveils the Tata logo at the Nanjing Tata Auto Comp Systems plant in China Tata Sons announces the launch of Tata International Social Entrepreneurship Scheme for an international student internship programme with the Groups community initiatives in India Indian Hotels Company invests 36 to 37 per cent in a newly floated company, BJETS, in partnership with Singapore-based Briley Group Tata Advanced Systems signs an MoU with Sikorsky Aircraft to manufacture S-92 helicopter cabins in India Tata Advanced Systems signs an MoU with Israel Aerospace Industries to establish a joint venture company in India to manufacture and support a wide range of defence and aerospace products

Tata Securities, the wholly owned subsidiary of Tata Capital, announces its entry into the retail and institutional broking segment
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Tata Communications, integrating the former VSNL and Teleglobe brands, is launched worldwide TRF launches Indias first mobile stone crusher and screening plant Telco Construction Equipment Company acquires a 79-per cent controlling stake in Spain-based Serviplem SA E2E SerWiz Solutions is renamed as Tata Business Support Services Limited TCS announces the opening of its North America delivery centre called TCS Seven Hills Park Tata Motors enters into a definitive agreement with the Ford Motor Company for the purchase of Jaguar Land Rover INCAT enters into a joint venture with Hindustan Aeronautics Limited (HAL) to create INCAT-HAL Aerostructures Tata Teleservices (Maharashtra) crosses the 5-million subscribers mark during the month of March Tata Chemicals successfully completes the acquisition of General Chemical Industrial Products Inc in the USA Tata Coffee launches its first retail standalone outlet, Mr Bean Coffee Junction, in the country Tata Central Archives inaugurates its new website

HISTORY OF AIG American International Group, Inc. (AIG) (NYSE: AIG) is a major American insurance corporation based in Wall Street in New York City. The UK
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headquarters are located on Fenchurch Street in London, England. UK, European operations are based in La Defense, Paris and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG is the 18th-largest company in the world. It became a component of the Dow Jones Industrial Average on April 8, 2004. As of March 16, 2007, AIG Investments, a division of AIG, completed the purchase of 100% of the stock of P&O Ports North America from Dubai-based DP World. AIG is the world's leading international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In the United States, AIG companies are the largest underwriters of commercial and industrial insurance and AIG American General is a top-ranked life insurer. AIG's global businesses also include financial services, retirement services and asset management. AIG's financial service businesses include aircraft leasing, financial products, trading, market making and financial advice. AIG's growing global consumer finance business is led in the United States by American General Finance. AIG also owns several of the largest U.S. retirement services businesses through AIG Retirement and AIG Sun America, and the largest network of independent broker-dealers through AIG Advisor Group; through these subsidiaries AIG runs asset management for the individual and institutional markets, with specialized investment management capabilities in equities, fixed income, alternative investments and real estate

AIG's common stock is listed on the New York Stock Exchange (NYSE: AIG, as well as stock exchanges in Japan and Ireland (TYO: 8685; ISEQ: AIN). [4] AIG is also the principal sponsor of English football team Manchester United and the Japan Open Tennis Championships
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The worlds leading international insurance and financial services organization Operations in more than 130 countries and jurisdictions AIG member companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer AIGs successful and growing global businesses also include financial services, retirement services and asset management. 1-Property 2-Casualty 3-Marine 4-Life 5-Financial Services 6-Asset Management

AIG IN INDIA

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AIG India, the Indian arm of AIG, established its presence in India in 1994. AIG entered India in 1945, prior to nationalization of the insurance sector, and had offices n several Indian cities. On opening up of the insurance sector to private insurance company's in2000, AIG and the Tata Group formed a Joint venture, Tata AIG. AIG and its affiliate funds have invested approximately $450 m in private equity in India. These direct investments have been made in telecommunication. And toll roads & bridges in the e infrastructure sector. Besides, investments have also been made in the manufacturing, technology, pharmaceuticals and retailing sector. AIG continues to look with interest for made direct investment opportunities in these sectors and in new emerging sectors like biotechnology, IT-enabled services etc Since 2001, AIG has built a strong insurance organization in the country, with 1,135 employees and over 36,000 agents (January31, 2006).Apart from insurance, AIG Companies also manage investment funds that have invested some $425m in Indian companies .AIG recently established a software company in India - AIG Systems Solutions (AIGSS

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1. Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc, are perils. If such perils cab
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case damage it the asset, we say that the asset is exposed to that risk. Perils are the events. Risks are the consequential losses or damages. The risk to an owner of a building, because of the peril of an earthquake, may be a few lakhs or a few crores of rupees, depending on the cost of the building and the contents in it. 2. The risk only means that there is a possibility of loss or damage. The damage may or may not happen. Insurance is done against the contingence that it may happen. There has to be an uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. In the case of a human being, death is certain, but the time of death is uncertain. In the case of a person who is terminally ill, the time of earth is not uncertain, though not exactly known. He cannot be insured. 3. Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The peril can sometimes be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. It only compensates the losses- and that too, not fully. 4. Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of non-economic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc5. The mechanism of insurance is very simple. People who are exposed to the same risks come together and agree that, if any one of them suffers a loss, the others will share the loss and make good to the person who lost. All people who send goods by ship are exposed to these risks, which are related to water damage, ship sinking, piracy, etc. Those owning factors are not exposed to these risks, but they are exposed to different kinds of risks like, fire, hailstorms, earthquakes,

lightning, burglary, etc. Like this, different kinds of risks can be identified and separate groups made, including those exposed to such risks. By this method, the heavy loss that any one of them may suffer (all of them may such losses
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at the same time) is divided into bearable small losses by all. In other words, the risk is spread among the community and the likely big impact on one is reduced to smaller manageable impacts on all. 6. If a Jumbo Jet with more than 350 passenger's crashes, the loss would run into crores of rupees. No airline would be able to bear such a loss. It is unlikely that many Jumbo Jets will crash at the same time. If 100 airline companies flying Jumbo Jets, come together into an insurance pool, whenever one of the Jumbo Jets in the pool crashes, the loss to be borne by each airline would come down to a few lakhs of rupees. Thus, insurance is a business of "haring". 7. There are certain principles, which make it possible for insurance to remain a fair arrangement. The first is that it is difficult for any one individual to bear the consequences of the risks that he is exposed to. It will become bearable when the community shares the burden. The second is that the peril should occur in an accidental manner. Nobody should be in a position to make the risk happen. In other words, none in the group should set fire to his assets and ask others to share the costs of damage. This would be taking unfair advantage of an arrangement put into place to protect people from the risks they are exposed to. The occurrence has to be random, accidental, and not the deliberate creation of the insured person.

Insurance as a security Tools

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The United Nations Declaration of human Rights 1948 provides that "Everyone has a right to a standard of living adequate for the health and wellbeing of himself and his family, including food, clothing, housing and medical care and necessary social services and the right to security the event of unemployment, sickness, disability, widowhood or other lack of livelihood in circumstances beyond the control." When the bread winner dies, to that extent, the family's income dies. The economic condition of the family is affected, unless other arrangements come into being to restore the situation. Life insurance provides if this did not happen, another family would be pushed into the lower strata creates a cost on society. The lower strata create a cost on society. Poor people cost the nation by way of subsidies and doles and so on. Poor people also cost by way of larger growth in population, poor education and vagaries in behavior of children. Life insurance tends to reduce such costs. In this sense life insurance business is complementary to the state's efforts in social management. Under a socialistic system the responsibility of full security would be placed upon the state to find resources for providing social security. In the capitalistic society, provisions of security are largely left to the individuals. The society provides instruments, which can be used in security this aim. Insurance is one of them. In a capitalistic society too, there is a tendency to provide some social security by the state under some schemes, where members are required to contribute e.g. Social Security Schemes in U.K. In India, social security finds a place in our constitution. Article 41 requires state, within the limits of its economic capacity and development, to make effective provisions for security right to work, to education and to provide public assistance incase of unemployment, old age, sickness, and disablement and in other cases of undeserved want. Part of the state's obligations to the poorer sections is met through the mechanism of life insurance

Life Insurance V/s Other Savings

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Contract of Insurance: A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance. At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, nondisclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void. Protection: Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable Aid to Thrift: Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy installment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly). For example: The Salary Saving Scheme popularly known as SSS provides a convenient method of paying premium each month by deduction from one's salary. In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.

Liquidity: In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.
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Tax Relief: Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force. Assesses can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise. Money When You Need It: A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time. Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies. Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are granted to policyholders for house building or for purchase of flats (subject to certain conditions).

About traditional plans Traditional life insurance plans are usually referred to as plans of insurance. These plans have two basic elements. One is the death cover providing for the benefit being paid on the death of the insured person within a specified
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period. The other survival benefit providing for the benefit paid on survival of specified period. All traditional plans are combination of these two basic plan.
1- TERM ASSURANCE PLAN:-

Plans of insurance that provides only death cover are called TREM ASSURANCE PLAN. If the insured does not die with in the specified period, no payment is made under a term assurance plan, but if the insured die with in the specified period company will pay death claim.
2- PURE ENDOWMENT PLAN:-

Those are provides only survival benefit are called PURE ENDOWMENT PLAN. If the insured does not die within the specified period, then company will pay sum assured+bonus, but if the insured die with in the specified period company will pay death claim.

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Some Traditional Plans Or Term Plans Of Tata AIG

RAKSHA
(Pure Protection Plan)
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Target audience:Aged between 18 and 50 year Wanting to there loved ones from the financial consequence of an unfortunate event Wanting to option of a flexible and convertible plan, should they want to include a savings element in it? Product features:

Raksha is a Tata AIG lifes cast effective plan. It helps provides financial protection to the family. In case of death of insured, the sum assured is paid to the nominees. 1- Four term to choose from: Raksha is available in 4 terms- 10, 15, 20, and 25 2- Convertibility: This plan has an option to include a saving element into it. I can be converted into any of Tata AIG lifes select endowment plan. Product snapshot: Term Entry age Raksha-10 18-50 Raksha-15 18-45 Rs. 500,000 Rs.2,000 Raksha-20 18-40 Rs. 500,000 Rs.2,000 Raksha-25 18-35 Rs. 500,000 Rs.2,000

Minimum Rs. 500,000 Sum assured Minimum Rs.2,000 annual premium

Payment mode: MONTHLY, QUATERLY, SEMI ANNUAL, ANNUAL Guaranteed benefit: sum assured payable on death

RIDERS
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 RIDERS are very cost effective method to enhance the cover of a basic policy. A riders is normally operational for the of the basic policy or lesser but never more then the basic policy term When the basic policy is cancelled, the riders are also cancelled. Rider do not pay maturity benefits The riders amount is called the Riders sum assured. Rider premiums are charged separately (not through cancellation of units). Premium payment method will be as per the basic policy. Riders continue while the policy is on PH. Rider premiums must be paid to keep the riders in force during PH. Existing policyholders can attach riders on policy anniversary. Riders provide 5 additional benefits to the policy holder:

Accidental Death Benefit(ADB) Accidental & Death & Dismemberment (ADD)(Long Scale) Critical Illness (lumpsum benefit) Waiver of Premium Payor Benefit Term rider

Accidental Death Benefit (ADB) (Increase your risk protection at a very minimal cost) In case of accidental death, the benefits payable are: Basic SA (less cumulative partial withdrawals) or Fund Value, whichever is higher PLUS the ADB Sum Assured
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Accidental Death & Dismemberment (ADDL) In case of death resulting from an accident the benefits payable are: Basic SA (less cumulative partial withdrawals) or Fund Value, whichever is higher PLUS ADDL Sum Assured In case of disability the ADDL SA will depend on the degree of loss suffered. Note- ADB and ADDL cannot be added together Double Indemnity In case of death occurs due to accident while traveling as a fare paying passenger: Double the Rider Sum Assured Critical Illness (CI) Rider SA payable under 6 critical Illnesses/Surgeries covered:1) 2) 3) 4) 5) 6) Cancer Stroke Heart Attack Coronary Bypass Graft Surgery Kidney Failure Major Organ Transplant

Waiver of Premium Helps cover disability of the insured

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 If the insured is totally and permanently disabled, it is likely that he will not be able to pay future premiums and policy may laps. The waiver of premiums (WOP) rider waivers of all the future unpaid premiums if the insured is totally and permanently disabled. Term rider Providing additional death benefit ( pays lumpsum amount on death) Policy term 5,10,15,20,25or until age 60 year The term rider can be lesser than or equal to the length of term of the basic policy, but can never more than it. The term rider sum assured can be lesser than or equal to the SA of the basic policy, but can never more than the SA of the basic policy. The minimum sum assured for a term rider is Rs 1 lakh.

NIRVANA PLUS
(Retirement Policy)
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Target audience: Aged between 18 year and 45 year Wanting a lump sum and regular pension after retirement. Product feature: Nirvana plus is Tata AIG lifes retirement plan. It helps you in ensuring a comfortable; hassle free life and independent retire life. 1- Choose your retirement age: The plan lets you choose from amongst three retirement ages 55,58and 60 year. You pay a premium during your working life, with a premium payment term of 15 year. 2- Guaranteed Additional: Guaranteed Addition of 2%* of the Sum assured in the First year and Guaranteed Addition of 10%* of SA every 5 years through out the premium paying term. This helps your maturity value to grow. 3- Bonuses: Non- guaranteed reversionary bonuses are added from the 6th policy anniversary onwards. A terminal bonus is added once the policy has been inforce for 10 year these bonuses helps money in compounding faster. 4-Additional benefit: The plan has a critical illness rider inbuilt for first 3 year. If you get diagnosed with a covered critical illness and survive for a period of 30 days post diagnosis, an amount of Rs.100, 000 will be paid for treatment. The plan also has an accidental death benefit inbuilt. In case of accidental death, the nominee gets double sum assured the rider sum assured and basic sum assured PUSS the accrued bonuses 5- Annuity PLUS lumpsum at maturity: On maturity the sum assured + Bonuses+guranteed additional help gives a large lumpsum .33% of this amount can be commuted tax free for meeting urgent expenses. The balance amount can be used to purchase an annuity of your choice for giving you life long pension payment.

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Product snapshot: Entry age Sum assured Minimum premium 18 year-40 year Rs.100,000 18 year-43 year Rs.200,000 Rs.2000 18 year-45 year Rs.400,000 Rs.2000

annual Rs.2000

Payment mode- YLY, HLY, QLY, MLY Tax benefit u/s-80CCC & section 10(10D

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MAHALIFE GOLD
(Whole Life Plan)
Target audience: 1- Aged between 30 days and 60 years next birthday 2- Required money at regular interval. 3- Wanting to create a legacy for future generation. 4- Cover for life, but want to pay premium for a limited term. Product feature & Benefits Mahalife gold is Tata AIG lifes premium whole life plan. It provides coverage till age 100 and gives regular income for life. The coverage is available for a premium payment term of 15 year only. The plan only also allows the insured to take advantage of higher market interest rates through cash dividend. Mahalife Gold ensures that you are secured with regular income available for you through out your life. This can be used for taking care of your house hold expenses / Loans / Retirement OR you can treat this as regular funds available to you for a Systematic Investment which will give you further appreciation. You would have heard of Life Insurance Policies that give you cover till you retire and you got to pay for it till you retire. What if I give you a plan that covers you for your life time & you have to pay for only 15 years? This is a very unique Plan in which 3 generations of your family can benefit. When you take Mahalife Gold for your son, you get the benefit of Tax deductions while your son enjoys guaranteed returns (survival benefit) through out his life. On his death, the death cover will be passed on to your Grandchildren

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1-Whole life cover: The plan provides coverage till age 100. In case of death at any time, the full sum assured will be paid to the nominees. 2-Limited premium payment term: The insured has to pay premiums only for 15 year 3-Yearly coupon payment:
a- From the 6th policy anniversary onwards, the insured start

getting non-guaranteed cash dividend, which depend on the performance of the company.
b- From the 10th policy anniversary onwards, the insured gets

guaranteed annual coupon payment of 5% of the face value 4- Tax benefit u/s-80C and the payouts are tax free u/s 10(10D)

Product snapshot:

Entry age 60 year Minimum sum assured Maximum sum assured Payment mode

0(30 days) to

Rs.50, 0000 No limit YLY, HLY, QLY, MLY

Tax benefit u/s-80C and the payouts are tax free u/s 10(10D)

Unit Linked Insurance Plan

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(ULIPs)
(Protection + Wealth Creation under a Single Plan 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. In another word we can say that a ULIP is a life insurance policy which provides a combination of life insurance protection and investment. LIP 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). 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. As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. In todays times, ULIP provides solutions for insurance planning, financial needs, financial planning for childrens future and retirement planning

ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan is a one-stop solution providing:
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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

Some of the other features offered by insurer along with ULIPs are the following.
The policyholder can pay additional premium for investment at any time Partial or total withdrawal is allowed. Sometimes there are conditions

attached. some de insurer, not all ,charge a redemption fee in such cases Theses policies will not be entitled to any bonus
There is no annual bonus ,but there may be a loyalty bonus paid at the

end

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HOW ULIPS MANAGES MONEY Unit linked insurance plan have become much sought after by individuals who want to buy life insurance. ULIPs are different from traditional plan in the sense that they invest the premiums money in the market linked instrument primarily in stock, bonds, government securities. ULIPs OPTION:Broadly speaking, most life insurance companies offer individuals 4 potion to choose from.. 1-Aggressive / Growth fund 2-Balanced fund 3-Capital guaranteed fund 4- Debt fund 1-Aggressive / Growth fund:Such fund investment in major portion of the premium in the equity market. The Investment mandate, through largely the same, may differ slightly across various life insurance companies. Some company invests 100% in equity market, some company 80% in equity market. 2- Balanced fund:A balanced fund invests the premium money in a portfolio, which consists of both equity as well as debt instrument in varying portfolios. Balanced fund are ideal for individual who are apprehensive of taking 3-Capital guaranteed fund:A few insurance company also offer ULIPs with a capital guarantee the return atleast the premium that have been paid over the policy is tenure should the fund value fall lower than the premium paid capital guarantee.

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The safety of the capital guarantee stems from the fact that 70% of the premium more money is invested in relatively safe debt instrument when moderate the risk of investing in stocks but might lower potential returns. 4- Debt fund:These types of fund invest in debt instrument like government bond and AAArated securities. Such fund are low risk in nature when company to their equity / balanced counterparts. The return through tend to be lower and steadier than the equity balanced fund.

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Comparison Of Unit Link Insurance Plan And Whole Life Insurance Talk to any insurance advisor and you are bound to be bombarded by hordes of different kinds of insurance policies. Is it any surprise that a normal person gets confused when choosing a right insurance policy for his needs? Advisors take advantage of this buyer's ignorance and promote those policies that fetch them the highest returns. Two such widely promoted types of insurance policies are unit link insurance plan and whole life insurance plan. However there are quite a few differences between these policies. We take a look at how both these policies differ Unit link insurance plan: Unit link insurance plan or ULIP is the most widely promoted type of insurance plan. When you pay a premium, you are given an insurance cover and part of premium is invested in the fund of your choice. In the initial years, a major part of the premium goes towards buying an insurance cover and remaining portion is invested. Most unit link plans offer choice of 3 funds: pure equity, balanced which contains a mixture of debt and equity in varied proportion and pure debt. Depending on your risk appetite as well as market scenario, you can choose appropriate fund(s). You can also switch between funds if the market condition or your personal circumstance changes. However the drawback of unit link insurance plan is the high charges. Also many advisors mis-sold these plans by telling that there is no need to keep on paying the premium for the duration of the plan, just three years would suffice. Though conceptually this is correct, fund will keep on debiting its charges from the amount invested. So if there is no sufficient amount in your account to pay these charges, your life cover will cease and you'll have to buy a new policy

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Whole life insurance: A whole life insurance policy is an insurance policy that provides you with insurance cover for as long as you live or 100 years, whichever is earlier. This means when buying a whole life insurance you have to keep on paying premiums till the end. Due to this drawback, this plan lost out to ULIP. To combat this Tata AIG has introduced its Mahalife Gold where you need to pay premiums just for 12 years while the life cover continues till your death. In addition, you start getting 5% of sum assured from sixth year onwards along with bonuses accrued. Once 12 years are over, you can use this money as pension for old age. However unlike ULIP, a whole life insurance plan does not give you flexibility of investing as per your risk profile. Also their charges are not transparent.

How it works Assume a person needs 25 Lakhs for a comfortable retired life (after inflation). How much will he need to save?

Investment Amount Rs.11,000 Rs.19,000 Rs.33,000 Rs.60,000 Rs.1,25,000

Years 30 25 20 15 10

Expected Return -10% 10% 10% 10% 10% 10%

Corpus- 10% Returns Rs.25,072,57 Rs.25,419,91 Rs.25,267,99 Rs.25,075,45 Rs.25,819,00

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Investment Amount Rs.25,000 Rs.37,000 Rs.54,000 Rs.87,000 Rs.1,57,000

Years 30 25 20 15 10

Expected Return -6% 6% 6% 6% 6% 6%

Corpus- 10% Returns Rs.25,238,44 Rs.25,768,98 Rs.25,074,95 Rs.25,427,73 Rs.25,427,73

ADVANTAGE OF ULIPs
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1-ULIPS provide for flexibility. 2- In ULIPS the insurance cover must be a minimum multiple of the premium 3-ULIPS can not issued as participating policies 4-Loan are not given under ULIPS 5- ULIPs the premium is invested in a fund decided by the insurer. 6-The NET ASSETS VALUE (NAV) of all the funds of all the insurers will vary. 7-In ULIPs, the premium will be invested as pre the offer price. 8-In ULIPs, the offer bid spread is the difference between the two prices. 9-In ULIPs, the offer bid spread, will in some cases be zero. 10-In ULIPs, a policy holder can switch between funds at any time. 11-In ULIPs, the premium to be invested in the fund can be increase in any year. 12-In ULIPs, the NAV of a fund can be less than purchase price. 13-In ULIPs, the SA must not be less than 1.25 times the single premium. 14-In ULIPs the SA must not be less than 5 times the annualized premium. 15- In ULIPs the policy holder is responsible for the benefit under the policy. 16- In ULIPs, the NAV are published regularly. 17- In ULIPs one can be pay additional premium in any year for investment. 18- In ULIPs, the lock in period will apply, if the additional premium is paid any year 19- In ULIPs, riders can be availed of 20- In ULIPs the rider will be based on the basic SA and not NAVs 21-In ULIPs, the death benefit will be the basic SA only 22- In ULIPs, the death benefit may be integrated 23-In ULIPs, partial withdrawal are permitted periodically. 24-ULIPs harness the Power of Compounding to grow the value of the investment. 25-Compounding is Interest earned on Interest 26-Interest that is earned by the initial capital also earns interest and hence multiplying the rate at which money grow.

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SOME UNIT LINKED INSURANCE PLANS OF TATA AIG 1) Invest Assure II

Target audience: 1- aged between 0(30days) and 60 years 2- Wanting to create wealth for a future event Product feature: Invest assure II is a unit linked endowment plan from Tata AIG life. This is a plan that lets you harness the market to create wealth over a long term.
1- Policy term: this plan lets you select from three policy term according to

the investment horizon 1-15 year 2-20 year 3-30 year 2-Five funds: This plan offers 5 different types of funds, which cater to the risk averse as well as those willing to take risks for a chance of greater returns 1- Equity fund 2- Aggressive growth fund 3- Stable growth fund 4- Income fund 5- Short term fixed income fund 3-Fund switching: This plan lets you switch from one fund to another. Switching fund means moving money from one fund to another fund. There are 4 free fund switching allowed in a policy year

4-Partial withdrawal: This policy allow to partial withdrawal a part of your fund value to meet urgent expenses. This is allowed only at least 3 annual
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premiums have been paid. The minimum amount of patria withdrawal is Rs 10,000. 5- Premiums holidays: in case you find that you are unable to pay premiums, you can put the policy on premiums holidays after paying at least 3 annual premiums. The policy does not lapse and continued to grow to market conditions. You can resume paying the premiums at the later date. Premiums holidays can continue for a maximum of 5 years at a stretch. 6-Top-up: You can invest additional amount of money via top-up. This help the fund value go faster. You can increase insurance coverage via top-up. If the top-up exceed 25% of the total premiums paid, it is mandatory to take a top-up from the amount that exceeds 25%. The premiums top-up is Rs 25,000. Top-up can be made up to 4 times a year. The minimum sum assured multiple for top-up is 1.25 and the maximum is 5. 7- Death benefit: In case of death of insured the death benefit payable is as follows: a- Higher of the sum assured less deductible partial withdrawal or regular premium fund value. b- In additional to this higher of top-up sum assured less deductible partial withdrawal or top-up fund value, if any will also be paid c- Deductible partial withdrawal are higher of I- Partial withdrawal made 24 month preceding death and II- All partial withdrawal made after attaining age 60.

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Product snapshot: Term Entry age 15 year term 0(30days)-60 20 year term 0(30days)-55 75 Rs.12,000 30 year term 0(30days)-45 75 Rs.12,000

Maximum 75 maturity age Minimum annual Rs.12,000 premium

Payment modeYLY, HLY, QLY, MLY Tax benefit u/s-80C and the payouts are tax free u/s 10(10D)

2) Invest Assure Gold

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(Whole Life Unit Linked Plan)

Target audience: Aged between 0(30 days) and 70 year Wanting to create wealth for future generation. Product feature: Invest assure gold is a unit linked whole of life plan from Tata AIG life. This is a plan that lets you harness the market to create wealth over a long term. 1-premium payment term: A. 5 year premiums payment term B. Whole of life premiums payment term 2- 5 funds: This plan offers 5 different types of funds, which cater to the risk averse as well as those willing to take risks for a chance of greater returns 1- Mid cap Equity fund 2- Aggressive growth fund 3- Stable growth fund 4- Income fund 5- Short term fixed income fund 3-Fund Switching: This plan lets you switch from another. Switching fund means moving money from one fund to another fund. There are 4 free fund switching allowed in a policy year 4- Partial withdrawal: This policy allow to partial withdrawal a part of your fund value to meet urgent expenses. This is allowed only at least 3 annual premiums have been paid. The minimum amount of patria withdrawal is Rs 10,000.

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5- Premiums holidays: In case you find that you are unable to pay premiums, you can put the policy on premiums holidays after paying atleast 3 annual premiums. The policy does not lapse and continued to grow to market conditions. You can resume paying the premiums within 2 years. The charge for premium holiday would be 4% of regular premiums and this charge will continue for Premium payment term or the 5th policy anniversary only. 6- Top-up: Top-up: You can invest additional amount of money via top-up. This help the fund value go faster. You can increase insurance coverage via top-up. If the top-up exceed 25% of the total premiums paid, it is mandatory to take a top-up from the amount that exceeds 25%. The premiums top-up is Rs 25,000. Top-up can be made up to 4 times a year. The minimum sum assured multiple for top-up is 1.25 and the maximum is 5. 7-Death benefit: In case of death of insured the death benefit payable is as follows: a- Higher of the sum assured less deductible partial withdrawal or regular premium fund value. b- In additional to this higher of top-up sum assured less deductible partial withdrawal or top-up fund value, if any will also be paid c- Deductible partial withdrawal are higher of I- Partial withdrawal made 24 month preceding death and II- All partial withdrawal made after attaining age 60. 8-Guaranteed additional: After every 5 policy year, additional units know as loyalty additional will be allocated to the policyholder, provides the policy is inforce at the time. Units would be equivalent to 0.25% of units under the regular premiums account. 9- Settlement option: On maturity, the maturity can be taken in period of time. I. This period over which the settlement is selected is called the SETTEMENT PERIOD. II. The settlement period should not be exceed 5year from the maturity date. III- The value of these payments will depend on the performance of the chosen fund.

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Product snapshot: Entry age 70 year Minimum sum Assured 0(30 days) 1-5*Annual premium, 2-(70 age at entry)*(0.5)* Annual premiums Rs. 50,000 YLY, HLY, QLY, MLY

Minimum premium Payment mode

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INVEST ASSURE PLUS

(Unit linked insurance plan)
Target audience: Aged between 0(30days) and 70 year. Wanting tax benefit and a life cover Wanting to create wealth for future generation Product feature: Invest assure plus is Tata AIG lifes single premium unit linked insurance plan. It helps you harness the power of the market with the convenience of one single premiums payment. 1- Single premium: This policy require you to pay premium only and you get coverage for the entire chosen policy term 2- 4 policy term: This plan lets you choose from the amongst 4 term-15, 20, 25.30, depending on your investment horizon. 3-Partial withdrawal: This policy allow to partial withdrawal a part of your fund value to meet urgent expenses. This is allowed only at least 3 annual premiums have been paid. The minimum amount of patria withdrawal is Rs 10,000 and the fund value after such withdrawal should be atleast Rs.10, 000. 4-Top-up: You can invest additional amount of money via top-up. You can invest windfall gains to help your fund has not had a chance to grow when an unfortunate event happens. 5-Sum assured: This plan gives you a life insurance cover for the chosen term. This acts as a guarantee in case of death, if your fund has not had a chance to grow when an unfortunate event happens. 6-Top-up sum assured: you can use top-up to increase your level of coverage. You can take a top up sum assured for the top up made. The sum assured is mandatory if the cumulative top up premium exceeds 25% of the single premium, for the amount that exceeds 25%.

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7- Death benefits: The death benefit payable will be the initial sum assured (ISA) less cumulative Net partial withdrawal or the single premium account value (AV), whichever is higher When partial withdrawals have been made the sum assured will be reduced by HIGHER of: a- Partial withdrawal made 2 years preceding date of death of insured or b- Partial withdrawal made after attainment age 60 of the policyholder 8-5 fund: This plan offers 5 different types of funds, which cater to the risk averse as well as those willing to take risks for a chance of greater returns 1- Equity fund 2- Aggressive growth fund 3- Stable growth fund 4- Income fund 5- Short term fixed income fund 9-Fund Switching: This plan lets you switch from one fund to another. Switching fund means moving money from one fund to another fund. There are 4 free fund switching allowed in a policy year

Product snapshot: Term 15 year 20 year 0- 55 year 25 year 0- 50 year 30 year 0- 45year

Entry age - 0- 60 year

Sum assured -1.25 times the premium 25 times the premium Minimum - Rs. 25,000 Premium Single premium

Payment made

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Invest Assure Flexi

(Unit linked insurance plan)
Target audience: Aged between 0(30days) and 70 year. Wanting tax benefit and a life cover Wanting to create wealth for future generation Product feature: Invest assure gold is a unit linked whole of life plan from Tata AIG life. This is a plan that lets you harness the market to create wealth over a long term. Policy Term: Choose any term between 5 & 40 1-Payment Term: Choose 3 years, multiples of 5 years or the policy term 2-Investment Funds: Choose from 7 different funds 1- Equity fund 2- Aggressive growth fund 3- Stable growth fund 4- Income fund 5- Short term fixed income fund 3-Top-ups: You can invest additional amount of money via top-up. You can invest windfall gains to help your fund has not had a chance to grow when an unfortunate event happens. Min single top up premium is Rs 5000/- and will be allowed a four times a year. 4-Top-up sum assured: you can use top-up to increase your level of coverage. You can take a top up sum assured for the top up made. The sum assured is mandatory if the cumulative top up premium exceeds 25% of the single premium, for the amount that exceeds 25%. 5-Switching: This plan lets you switch from one fund to another. Switching fund means moving money from one fund to another fund. Choose to switch your funds at any time. 12 times a year with no charge.

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6-Settlement option: On maturity, the maturity can be taken in period of time. I. This period over which the settlement is selected is called the SETTEMENT PERIOD. II. The settlement period should not be exceed 5year from the maturity date. III- The value of these payments will depend on the performance of the chosen fund. IV- During the period, the death benefit will be the FUND VALUE. 7-Premium Redirection: Choose to redirect your future premiums to any other funds in any proportion!

Product snapshot: Policy term Minimum issue age Maximum issue age Maximum age of maturity Minimum premium Sum assured Premium mode Premium Payment Period Benefit Period 5-40 year 0(30 days) 70 year 80 year 15,ooo 5 x Annual Premium or Term/2 x Annual Premium whichever is higher Annual/Semi-annual/Quarterly/Monthly 3 Years/ Multiples of 5 Years/ Equal to policy term For the entire term of policy.

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SURVEY
As a part of our project, in order to know the perceptions of the investors about the investment schemes basically ULIP and TRADITIONAL PLAN, a survey was being conducted by us in Bareilly region.

OBJECTIVE OF THE SURVEY:

To know the existing investment pattern among different age groups and different occupations. To know the popularity and acceptability of the two products i.e. ULIP and TRADITIONAL PLAN among the above mentioned categories. To know the potential customers for the investment schemes: ULIP and Traditional plan. To analyze which set of customers should invest in ULIP and Traditional plan as per their needs identified.

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DATA COLLECTION METHOD

The basic objective of the project was to compare investment behavior especially in ULIP and Traditional plan. Both primary and secondary data has been used in order to analyze these products. The primary data was obtained through observation, direct communication with the people and filling up of questionnaires. The secondary data was collected through the Internet Journals and newspapers

DATA COLLECTION INSTRUMENT

A semi structured kind of questionnaire was designed which contained both open- ended and multiple choice questions. The questionnaire designed was to provide dual information sharing type, it is seriously undertaken that anyone who is undergoing the process, should find his interest or else he might show disinterest towards the programmed. The questionnaire was equally important both to the customers as well as to the company to draw out its prospects. The questionnaire was designed to meet all the objectives of the survey fully and helped us in knowing the needs of the customers and the market value and image of the company .Moreover, it helped us to give suggestions to the company so as to cater customers needs in a much better way and hence broaden its customer base.

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RESEARCH METHODOLOGY
The survey process involved two phases: First phase included identification and selection of the target audience to be studied and to determine the parameters on which respondents will justify their preferences. The audience were targeted and analyzed basically on the basis of two important parameters: Age and Occupations. Demographical information was also taken in order to know the investment patterns according to the location, age, gender etc. A questionnaire was designed to collect the needed information from the respondents. In the second phase data was collected through questionnaire from more than 100 respondents within Bareilly region. Results were viewed cautiously as sample was from a specific population. The responses that were generated during this exercise were converted in the form of percentages to have a comparative outlook, as the numbers itself cannot explain the true picture. These percentages were then represented through the simple tools like bar graphs, pie charts.

FINDINGS:74

OCCUPATION
To begin with the nature of occupation was divided broadly into 2 categories: Business Services The study shows: Almost 80% of people were into service and 20% were into business, either proprietorship or partnership.

Interpretation:
Analysis are done on the basis of AGE

AGE
The analysis was also done on the basis of age which was being broadly classified into 4 categories: 18-25 years 25-35 years 35-45 years 45 and above

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GRAPHICAL REPRESENTATION:
Question1:- In which income group mostly people fall?
Income (Lac) Above 5 b/w 2-5 below 2 As a % of total 25 58 17

INCOME

17%

25%

above5 B/w 2-5 Below 2

58%

Most of the people fall in the income group between 2 to 5 lakh, the group which we address mostly as middle class population of India.

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Question2:-How much people are life insured?

Life Insurance Cover Yes No As a % of total 42 58

LIFE INSURANCE COVER

42% 58%

Yes No

In India most of the people are not aware about the insurance, as well as there benefits and security of life. And we can say in India there are a big segment to target the people.

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Question3:-How many people are willing to invest?

I Yes No As a % of total 54 46

I VS O N T N ET R O

4% 6 5% 4

Ys e N o

Now a days, most of the people are come under for paying Tax so for taking reveal from the Tax so most of the people are doing investment.

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Question4:- What would be the reason for investment? Reasons for Investment Asset Purchase Building Cash Reserves Retirement Others As a % of total 47.0588235 23.5294118 17.6470588 11.7647059

REAS ONSFOR INVES TMENTS Asset Purchase 12% 18% 24% 46% Building Cash Reserves Retirem ent Others

In India people are of different culture and as well as different nature so reason of investment may also be different.

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Question5:-For the investment which plan would be more preferable?

PORTFOLIO Traditional Plan Fixed Deposits ULIP Share markets Others

As a % of total 34.4827586 17.2413793 13.7931034 24.137931 10.3448276

PORTFOLIO 10% 24% 14% 17% Traditional plan Fixed Deposits ULIP Share markets Others

35%

In this, question it basically depend on the mentality of people are different , because there is a statement are true that is HIGHER RISK WITH HIGHER RETURN

Question6:-If you want to invest in ULIP Plan in which company you would be preferred?
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ULIP Scheme ICICI LIC TATA AIG LIFE

As a % of total 25 25 50

ULIP SCHEME

ICICI 25% Tata AIG 50%

Tata AIG LIFE LIC ICICI

LIC 25%

In this statement, for the ULIP scheme most the people give same preference to both the sector it may be govt. as well as private sector because the money of ULIP plan will be invested in market.

Queation7:-If you want to invest in Traditional Plan to whom you give the preference?
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Traditional plan co. Franklin ICICI TATA AIG LIFE Reliance Others

As a % of total 25 12.5 12.5 25 25

Traditional plan Others 25% Reliance 25% Franklin 24% ICICI 13% Franklin ICICI
TATA AIG LIFE

TATA AIG LIFE

Reliance Others

13%

In this statement, for choosing the traditional plan both the sector are eligible. Because both the sector would be give same returns.

Question8:- In which fund you want to invest? Type of Fund As a % of Total

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Equity Bonds Debenture

61.9047619 14.2857143 23.8095238

Tp oF n ye f ud

2% 4

E uy qi t Bl ne a cd a Cs a h

1% 4

6% 2

In this statement, ULIP Plan is invested in market so people have the choice it may be invested in: Equity fund Debenture Bond In these fund as per the choice of people it may select the unto there choice.

ANNEXURES

Name: ______________ Contact No. ___________ Age: ______

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1. Occupation: a. Government b.Salaried c.Business d.others

2. What is Your Familys Annual Income (Rs.Lakhs): a. Below 2 b. above2 c. 5 Below

3. How many dependents you have? a. None b. 1 c.2 d. More than 2

4. Do you have a Life Insurance Cover? a. Yes b. No

5. Do you invest? a. Yes b. No

if yes, what is your investment concerns? Income replacement at death/disability Retirement Asset Purchase Building Cash reserves funding for children

Others_____________________
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(If No - proceed to Q.13)

6.Rate one of the following investment factors of your importance. a. High Return d.Flexibility b.Safety Liquidity c.Tax Free Proceeds

7. With which company do you have the ULIP scheme? a. LIC b.TATA AIG LIFE e. others c. ICICI PRUDENTIAL

d.BAJAJ ALLIANZ

8. Which type of fund you invest in? a. Equity b.Debt c.bonds d.Cash

9. How much returns are you getting on your ULIP investments annually (approximately)? a. Below 10% b.10% - 20 % c. 20%-30% d. above 30%
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10. Which Traditional plan _______________________.

are

you

investing

in

presently?

11. How much returns are you getting on your investments annually (approximately)? a. Below 10% b.10% - 20 % c. 20%-30% d.above 30%

12. Bharti AXA Group is offering an opportunity to participate in investment schemes generating high returns, would you like to avail it? a. Yes b. No

FINDINGS
When we talk about insurance sector there are lots of finding which are as follows:

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 In India there is a big segment to target the customer because most of the people not assured. And also there is unawareness about the security of life or they are not will to take insurance. It may be the reason Backwardness Un-education Culture difference Lack of guidance Lack of concern to future

The people are broad minded they cant see future calamities it may be happen. There are huge amount of investor but they cant have any proper guidance to utilize their money in proper way.

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ULIPs Vs Traditional Insurance Plans

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Not too long back, the good old endowment plan was the preferred way to meeting the dual objective of insuring oneself against an eventuality and setting aside savings to meet ones financial objectives. Then the insurance sector was thrown open to the private sector. The result was the launch of a wide variety of insurance plans; including ULIPs (unit-linked insurance plans). Two factors were responsible for the advent of ULIPs on the domestic insurance horizon. First was the arrival of private insurance companies. ULIPs were one of the most significant innovations introduced by private insurers. The other factor that saw investors take to ULIPs was the decline of assured returns in endowment plans. While these were the two factors most instrumental in marking the arrival of ULIPs, another factor that has helped their cause is the impressive economic performance over the past few years that has translated into equally impressive returns on the stock markets. While this now appears as one of the primary reasons for their popularity, we believe ULIPs have some fundamental positives like enhanced flexibility and merging of investment and insurance in a single entity that have really endeared them to individuals. Given that ULIPs are relatively new and remain an enigma for a large section of insurance-seekers, in this note we compare them to the traditional endowment plans to give you a perspective.

Sum assured Perhaps the most fundamental difference between ULIPs and traditional endowment plans is in the concept of premium and sum assured. When you want to take a traditional endowment plan, the question your agent will ask you are - how much insurance cover do you need? Or in other words, what is
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the sum assured you are looking for? The premium is calculated based on the number you give your agent. Investments Traditionally, endowment plans have invested in government securities, corporate bonds and money market instruments. They generally shirked from investing in the stock markets, although there was a provision for the same. However, for some time now, endowment plans have discarded their traditional outlook on investing and allocate about 10%-15% of monies to stocks. This percentage varies across life insurance companies. ULIPs have no such constraints on investments. They invest across the board in stocks, government securities, corporate bonds and money market instruments. Of course, within a ULIP there are options wherein there are caps on each investment avenue (stocks, bonds). Expenses ULIPs are considered to be expensive when compared to traditional endowment plans. This notion is rooted more in perception than reality. Let us take agent commissions to understand this better. Sale of a traditional endowment plan could fetch a commission as high as 30% (of premium) in the first year and 60% (of premium) over the first five years. Then there is ongoing commission in the region of 5%. Sale of a ULIP fetches a relatively lower commission ranging from as low as 5% to 30% of premium (depending on the insurance company) over 1-3 years. After the initial years, it stabilizes at 1%-3% (again depending on the insurer). Unlike endowment plans, there are no IRDA regulations on ULIP commissions.

Mortality expenses for ULIPs and traditional endowment plans remain the same. There is also little difference in the administration charges. One area where ULIPs prove to be more expensive than traditional endowment is in fund management. Since ULIPs have an equity component
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that needs to be managed actively, they incur fund management charges. These charges fluctuate in the 0.80%-1.50% (of premium) range. We could not get a fix on the fund management charges of traditional endowment plans despite having spoken to several insurance companies. Flexibility As we mentioned at the very beginning of this article, one aspect that gives ULIPs an edge over traditional endowment is flexibility. ULIPs offer a host of options to the individual based on his risk profile. There are insurance companies that offer as many as six options within a ULIP with the equity component varying from zero to a maximum of 100% (of corpus). You can select an option that best fits your objectives and risk-taking capacity. Having selected an option, you still have the flexibility to switch to another option. Most insurance companies allow a number of free switches in a year. Another innovative feature with ULIPs is the top-up facility. A top-up is a onetime additional investment in the ULIP over and above the annual premium. This feature works well when you have a surplus that you are looking to invest in a market-linked avenue, rather than keep in a savings account or a fixed deposit. With traditional endowment, there are no investment options. You select the only option you have and must remain with it till maturity. There is also no concept of a top-up facility. Your premium amount cannot be enhanced on a one-time basis and skipped premiums will result in your policy lapsing. Transparency ULIPs are also more transparent than traditional endowment plans. Since they are market-linked, there is a price per unit. This is the net asset value (NAV) that is declared on a daily basis. A simple calculation can tell you the value of your ULIP investments. Over time you know exactly how your ULIP has performed.

Most ULIPs also disclose their portfolios regularly. This gives you an idea of how your money is being managed. It also tells you whether or not your
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mutual fund and/or stock investments coincide with your ULIP investments. If they are, then you have the opportunity to do a rethink on your investment strategy across the board so as to ensure you are well-diversified across investment avenues at all times.With traditional endowment, there is no concept of a NAV. However, insurers do send you an annual statement of bonus declared during the year, which gives you an idea of how your insurance plan is performing. Traditional endowment also does not have the practice of disclosing portfolios. But given that there are provisions that ensure a large chunk of the endowment portfolio is in high quality (AAA/sovereign rating) debt paper, disclosure of portfolios is likely to evoke little investor interest. Liquidity Another flexibility that ULIPs offer the individual is liquidity. Since ULIP investments are NAV-based it is possible to withdraw a portion of your investments before maturity. Of course, there is an initial lock-in period (3 years) after which the withdrawal is possible provided the minimum fund value is to be maintained. Traditional endowment has no provision for pre-mature withdrawal. You can surrender your policy, but you wont get everything you have earned on your policy in terms of premiums paid and bonuses earned. If you are clear that you will need money at regular intervals then it is recommended that you opt for money-back endowment. Tax benefits Taxation is one area where there is common ground between ULIPs and traditional endowment. Premiums in ULIPs as well as traditional endowment plans are eligible for tax benefits under Section 80C subject to a maximum limit of Rs 100,000. On the same lines, monies received on maturity on ULIPs and traditional endowments are tax-free under Section 10.

Difference between Traditional Vs ULIPs Plans

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TRADIONAL PLANS

ULIPs

1-All the premiums go into a 1-The premiums in excess of risk common fund and are invested at cover, is invested as desired by the the insurers discretion. policyholder. 2-There are two categories of benefit guaranteed and nongouranted. For guaranteed benefit, the insurer bears the investment risk. However, non guaranteed benefits, such as bonuses, depend on the performance of the insurer. 3-Surrender are allowed but at a loss. Loans may be provided. 4-For participant policies, bonuses are payable. 5-The premium amount used for insurance coverage, other charges and investment are bundled up and not know. 6-Benefit are pre-determined 7- Loss is unlikely. 2-The investment return may vary depending on the market movement and the investment risk is borne entirely by the policyholder.

3-Withdrawals are allowed. Loss, if any, depend on NAV loans are not allowed. 4-There are no bonuses, except loyalty bonus in some cases. 5-The amount of the premium used for insurance coverage, other charges and the purchase of units are unbundled and transparent. 6-Benefits are variable. 7-Loss is likely

8-Gains

unlikely

except

through 8-Gains likely depending on market

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bonuses .

movement.

9- In traditional plan, there is no any 9- This plan lets you switch from one kind of fund switching facility. fund to another. Switching fund means moving money from one fund to another fund. There are 4 free fund switching allowed in a policy year. 10- In traditional plan, there is no 10- This plan allow to partial any kind of partial withdrawal withdrawal a part of your fund value facility, to meet urgent expenses. This is allowed only at least 3 annual premiums have been paid. The minimum amount of patria withdrawal is Rs 10,000. 11- In traditional plan, there is only one like Government security, Government Bonds no any other kind of fund available for investment. 11- This plan offers 5 different types of funds, which cater to the risk averse as well as those willing to take risks for a chance of greater returns. 1- Equity fund 2- Aggressive growth fund 3- Stable growth fund 4- Income fund 5-Short term fixed income fund

12-In traditional plan there is no premium holiday, if once your policy lapse the policy will not grow to market condition.

12-In ULIPs you can put the policy on premiums holidays after paying at least 3 annual premiums. The policy does not lapse and continued to grow
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to market conditions. 13-In traditional plan there is no topup facility. Once your premium amount decided your cannot pay more apart from. 14-In traditional plan this facility not available. 13-In ULIPs you can invest additional amount of money via top-up. You can increase insurance coverage via topup. 14- ULIPs harness the Power of Compounding to grow the value of the investment. 15-Traditional plan provides only 15-A unit linked insurance plan gives protection of an insurance cover not you the best of both worlds;-Power of power of the equity market. the Equity Market and Protection of an Insurance cover.

RECOMMENDATIONS:
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OCCUPATION The business segment can be targeted for ULIP (as an investment product) and Mutual funds as these products are offering high returns and safety which is the major concern of this segment. The need is to promote ULIP as a better product than the F.Ds and traditional plan can be promoted in lieu of the share markets. The service class can be a potential customer both for the ULIP and Traditional plan. ULIP needs to be promoted as an insurance product and can be sold emphasizing the importance and need of insurance. This segment is already investing into Traditional plan, thus the bank needs to promote its Traditional plan by promising the customers higher returns and safety than the others. AGE The segment (18-25) can be a potential customer segment as most of the people are falling in the income group of Rs. 2-5 lakhs. The company can target this segment by offering its ULIP product both as an insurance and investment product, which can provide high returns as the investments and provide the insurance cover too, as a large segment doesnt have an insurance cover. The return on investments (ULIP and Traditional plan) is mostly between the 10% -20% brackets so products offering returns higher than this band can be offered to this category as 24% of people under this category are looking for building cash reserves and earning higher returns. The need is to make this segment aware of the products like ULIP (which is promising return of 20-25% p.a.) and tap as many customers as possible.

In order to tap the 25-35 years segment ULIP can be promoted as an investment option rather than an insurance product. Traditional plan need to
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be promoted as only a small segment is investing in Traditional plan. Traditional plan and ULIP both can be the best investment option for this segment as the basic reason for investment as can be seen from above is building Cash reserves and funding for children and both these products are offering high returns. As the segment 35-45 years is an investing and risk taking segment, Traditional plan promising higher returns can be promoted in this segment. The product ULIP is also highly acceptable by this segment, so both of these products can be promoted as a best investment options promising high returns and low risks. Thus this segment can mainly be targeted for the Traditional plan as can be seen that very few people are investing traditional plan. this is because this segment consists of risk averters as this segment prefers Fixed Deposits and government securities than any other investment product as safety is the most important factor which is being considered while investing by this segment, thus product like ULIP and Traditional plan need to be promoted as safe investments and better than F.Ds only then this segment can be tapped.

BIBLIOGRAPHY
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1- Management compass (magazine)

2- www.tata-aig-life.com.

3- www.moneycontrol.com
4- Text book of life insurance. 5- Business today magazine. 6- Money simplified ( text book) 7- Product workbook.(Neev)

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