INSURANCE AND BANKING

INTRODUCTION OF BANK
In the modern age, banks are the important part of man's economic life. As we know that Finance is the life blood of the organization, banks help in providing funds to the economy. Finance is the lifeblood and controlling nerve centre of business and banks arrange right amount of finance at right time. Banks are essential for the fast Economic Development of the nation. Bank is a financial institution which deals with other people's money. Banks provide number of services to its customers as well as to economic activities. It also helps in strengthening the

commercial activities as well as domestic processes. Bank is one of the most important aids to trade. Banks accept deposits, grant loans, make payment of bills, rent, etc on behalf of its customers.

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INTRODUCTION OF INSAURANCE
In today's world we hardly come across anyone who is not familiar with the term insurance. Our life is uncertain, we do not have any idea what will happen in our future. But insurance has become one of the great ways to secure our future. Getting the right introduction to insurance is important so as to get more familiar with the term. Well, you get started the right way here.

Insurance is a risk management technique primarily used

to hedge against the risk of a contingent, uncertain loss that may be suffered by those individuals or entities who have an insurable interest in scarce resources, by transferring the possibility of this loss from one interested person, persons, or entity to another. All policies of insurance in India are regulated by IRDA The idea of insurance is very simple. It can simply be defined as an instrument used for managing the possible risks of

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the future. Throughout our life we may face many kinds of risks such as failing health, financial losses, accidents and even fatalities. Insurance addresses all these uncertainties on financial terms. So one should understand the importance of insurance in their life. With us, you will get to know all the types of insurance plus the benefits. In the last few decades we have seen numerous changes in the insurance industry since the need for insurance is more evident now than earlier. People's spending patterns are changing and more & more resources are needed for immediate consumption.

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DEFINITION OF INSURANCE

Insurance is a financial arrangement that re-distributes the cost of unexpected losses.

Insurance is a device to protect against risk on a provision against inevitable (unavoidable) contingencies or a cooperation device of spreading risk

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DEFINITION OF BANKING 1. According to Dr.H.L.Hart.

"A banker is one who, in the ordinary course of his business, honours cheques drawn upon him by persons from and for whom he receives money on current account."

2. According to SAYERS.

"Banks are institutions whose debts usually referred to as "bank deposits"-are commonly

accepted in final settlement of other people's debt."

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Types of Life Insurance Policies

Endowment Policy: This policy is for fixed period. Payment of premium is done for a fixed period. Compensation amount is paid on the maturity of period or on the death of the insured. Whole Life Policy: This policy is a life insurance policy that remains in force for the insureds whole life and requires (in most cases) premiums to be paid every year into the policy.

With Or Without Profit Policy: In case of with profit policy the premium is increased and the person insured will be entitled in the share of the profit of company
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and will be given to insured along with the amount of policy insured. In case of without profit policy the premium is normal and the person insured will be entitled only to the amount of policy and no such bonuses or profit. Joint Life Policy: Joint life policy is a life insurance policy for 2 persons in this 2 persons are

insured together and the amount of policy is paid to other person on the death of each of the persons insured.

Annuity Policy: An annuity is a contract between you and an insurance company. In return for your payment, the insurance company agrees to provide either a regular stream of income or a lump sum pay-out at some future time
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Janta Policy: This policy is made for the welfare of the people. This policy is given o the people up to the age of 45 years. There is door to door collection in janta policy. Convertible Whole Life Policy: This is a whole life policy which can be converted to endowment policy in case if person insured is not able to pay the premium of the policy. Money Back Policy: In this policy the compensation amount is not paid at once to the insured it is paid in installments to the insured Jeevan Sathi Policy: This policy is same as insurance taken for two where people insurance joint is

where

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compensation amount is paid at the death of one person and then the policy continues and again the amount is paid at the maturity of the policy

NEEDS AND IMPORTANCE OF INSURANCE

Risk sharing: Insurance companies help in the risk sharing of

insured person for the particular period of time or till death.

Co-operative device: Insurance Company pays the compensation

to the insured from the collective premiums of all the persons insured with the company this function is known is co-operative device.

Savings: It is a mode of saving the money for future as insured

gets compensation on maturity, maturity is savings done by him through the years by way of paying regular premiums.

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Capital formation:

Insurance assuages the businessmen from

security investments. This is done by paying small amount of premium against larger risks and dubiety.

Economic development: Insurance provides an opportunity to

develop to those larger industries which have more risks in their setting up.

Providing protection: The elementary purpose of insurance is to

allow security against future risk, accidents and uncertainty.

Insurance is in reality a protective cover against economic loss, by apportioning the risk with others.

Prevention of loss: Insurance warns individuals and businessmen

to embrace appropriate device to prevent unfortunate aftermaths of risk by observing safety instructions; installation of automatic

sparkler or alarm systems, etc.

Certainty: Insurance is a device, which assists in changing

uncertainty to certainty.

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PRINCIPLES:1. The Principle of Utmost Good Faith is a very basic and first primary principle of insurance. According to this principle, the insurance contract must be signed by both parties (i.e. insurer and insured) in an absolute good faith or belief or trust. 2. The principle of insurable interest states that the person getting insured must have insurable interest in the object of insurance. A person has an insurable interest when the physical existence of the insured object gives him some gain but its non-existence will give him a loss. In simple words, the insured person must suffer some financial loss by the damage of the insured object. 3. Indemnity means security, protection and compensation given against damage, loss or injury. According to the principle of indemnity, an insurance contract is signed only for getting protection against unpredicted financial losses arising due to future uncertainties. Insurance contract is not made

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for making profit else its sole purpose is to give compensation in case of any damage or loss. In an insurance contract, the amount of compensations paid is in proportion to the incurred losses. The amount of compensations is limited to the amount assured or the actual losses, whichever is less. The compensation must not be less or more than the actual damage. Compensation is not paid if the specified loss does not happen due to a particular reason during a specific time period. Thus, insurance is only for giving protection against losses and not for making profit. However, in case of life insurance, the principle of indemnity does not apply because the value of human life cannot be measured in terms of money. 4. Subrogation means substituting one creditor for another. According to the principle of subrogation, when the insured is compensated for the losses due to damage to his insured property, then the ownership right of such property shifts to the insurer.
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This principle is applicable only when the damaged property has any value after the event causing the damage. The insurer can benefit out of subrogation rights only to the extent of the amount he has paid to the insured as compensation.

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ECONOMIC GROWTH OF INSURANCE

The period immediately after nationalization affected the business because of lack of experienced and trained staff. In the year 1957, the situation was difficult as the common man was

affected because of the rise in the cost of living index.

Agriculture was also affected by the famine condition. In these circumstances, LICs performance during that period was reasonably good. After this period LIC over the years made commendable progress from a new business of Rs 3.2808 billion. The sum assured are done 0.932 million policies procured in India. During the period of 16 months between 1st September 1956 to 31st December 1957.

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LIC had made tremendous progress particularly after 1974-75 the premium income for the first year of policy increased from rs.85.67 crores in 1974-75 to Rs 4071.73 crores in 1998-99 and an annual growth rate of 32 %. The renewal premium has also increased from Rs 411.71 crores in 74-75 to Rs 1771.22 crores in 98-99 with the growth rate of 31%, this indicated that LIC had done a good job LIC progressed to a business of Rs 1927.8 billions the sum assured in 2001-2002. The one year premium received during 2001-2002 reached Rs 99.6 billion from Rs130.6 millions in a 16 month period ending 31th December 1957

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INTRODUCTION OF MAX NEWYORK

Max New York Life Insurance Company Ltd. is a joint venture
between Max India Limited, one of India's leading multi-business corporations and New York Life International, the international arm of New York Life. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance

company in India, it has developed a strong corporate governance

model based on the values of excellence, honesty, knowledge, caring, integrity and teamwork. Incorporated in 2000, Max New York Life started commercial operation in April 2001. In line with its values of financial

responsibility, Max New York Life has adopted sensible financial practices to ensure safety of policyholder's funds. The Company's paid up capital as on 31st August, 2010 is Rs 1,973crore.

Max

New

York

Life

has

multi-channel

distribution a lot of

spread emphasis

across the country.

The Company places

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on four and

its

selection -

process screening, The control model

for

agent

advisors, test, are

which career trained

comprises seminar in-house is the

stages final

psychometric agent advisors

interview.

to ensure optimal first time such a

on quality of has of been put

training. in

This for

place

Rural

marketing

insurance.

Max New York Life offers a suite of flexible products. It now has 21 products covering both life and health insurance and 8 riders that can be to customized choose the to over 800 combinations fits their 7

enabling need.

customers this,

policy offers

that 6

best

Besides

the

company

products

and

riders in group insurance business

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Founder Mr. Analjit Singh

Mr. Analjit Singh is the Founder & Chairman of Max India Limited, Chairman of Max New York Life Insurance Company Limited; Max Healthcare Institute Limited and Max Bupa Health Insurance

Company Limited. He has been the driving force behind the Max India Groups sustained growth and success since the mid 80s. A self made entrepreneur, Mr. Analjit Singh has been leading the charge of reinventing and restructuring the Max India Group with a vision to be amongst Indias most admired companies for Service Excellence.

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Max India Ltd:

Max India Limited is a multi-business corporate, driven by the spirit of enterprise people and service oriented and focused on businesses. The

Companys vision is to be one of Indias most admired corporate for Service Excellence. Besides max newyork india ltd. Deals in the businesses like: Max

New York Life, Max Healthcare, Max Bupa Health Insurance Limited, Products Max Neeman Medical International, Max Speciality

New York Life LLC:

New York Life Insurance Company is a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States and one of the largest life insurers in the world. The mission of New York Life is to maintain its superior 'financial strength', hold on to the highest standards of 'integrity' and display 'humanity' by treating its customers, agents and employees with kindness, consideration and respect.

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New York Life is one of the largest and strongest life insurance companies in the world .As a leader in the insurance industry, New York Life continues to bring to its operations new management concepts, advanced technologies, new distribution and training

systems and innovative insurance products. MAX NEWYORK LIFE INSAURANCE: Incorporated in 2000, Max New York Life started commercial ltd.(domestic operation in April company) and 2001. max India life

newyork

(international company) started a new business (max newyork life insurance) in collaboration

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PROMOTERS Max New York Life Insurance Company Ltd. is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business corporations. Since its inception in 2000, the organization has progressed and positioned

itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core values of

excellence, honesty, knowledge, caring, integrity and teamwork. The strategy is to establish itself as a trusted life insurance service provider through a quality approach to business.
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FEATURES

First company to provide free look period of 15 days to the customer. This was later made mandatory by the regulator

First company to start toll free line for agent services First and the only life insurance company in India to implement Lean methodology of service excellence in service industry

First

life

insurance

company

in

India

to

provide

various

services to the agents and customers over phone

First Indian life insurance company to start service center at the regional level

First life insurance company in India to receive ISO 9001:2000 certification

First life insurance Company to be awarded CII-EXIM Bank commendation certificate for Strong Commitment to Excel.

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PLANS AND POLICIES

Retirement Plans
Let your golden years be the most precious of your life, full of freedom and choice. A time to pursue your hobbies, travel and enjoy the good life. You will never miss your salary cheque or be constrained by rising inflation. Even as you work hard to make a better today, it is up to you to create a superior tomorrow. If you want to sustain your current lifestyle even after you stop working, make that money work for you. Our Retirement Plans will keep you comfortable and content, and let you live the life you deserve.

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LIFE PARTNER PLUS PLAN

In your journey through life, you will need to take care of changing needs like asset creation, investing for retirement, childrens

education and marriage and so on. At Max New York Life, we understand your desire to take care of these needs and your financial planning and investment. That is why we have introduced Max New York Lifes Life Partner Plus Plan (Limited Pay

Endowment to Age 75), a life insurance plan that offers you protection for life, cash bonuses, and multiple options to utilize these cash bonuses to meet all your individual requirements.

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CHILD PLANS Max New York Life's College Plan,

College education is the most critical juncture of your childs life; its the first time that your child moves out from the sheltered school life into the real world. It is most important that this college education experience is the very best for your child as it will be the defining phase that will shape their future. Therefore it is essential that you start planning for your childs professional education at the earliest, The best time to start planning is during the age group of 0-8 years as it gives you the maximum time period to be able to build a sizeable quantity till your child reaches

college-going age i.e. 18 years.

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Max New York Life's Shiksha Plus II,

We understand this desire that every parent has for their child. Therefore, our child plan is designed specifically to ensure that your child not only gets the best of education but also can explore and develop his/her hidden talent.

Max New York Life Shiksha Plus II is a 360 degree child plan that provides for over all development of your child in all the

circumstances.

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Max New York Life Line Healthy Family Plus Why Healthy Family
The core of any happy family is a healthy family. However, demanding lifestyles, high stress levels and weakening

environmental conditions are increasing the probability of diseases and as a consequence, treatment for the same. The need of the hour is for a plan that not only takes care of your health, but also takes care of your family. Taking care of this need Max New York Life presents Life Line Healthy Family- the Most comprehensive Health Insurance Plan.

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TAX BENEFIT
The average life span of an individual has increased in India due to better health conditions, awareness about ones well being and improved Medical facilities. At the same time, the medical costs of treatment and surgery have increased a lot. It is a well-known fact that one can save tax up to Rs. 1 lakh of the Income Tax Act, 1961 As per section 80D of the Act, a deduction can be claimed by an individual in respect of the medical insurance premium paid up to Rs. 15,000 for himself and his spouse and dependent children. Consider the following example: If any persons salary is 5 lac than if he is taking the policy of 1 lac from insurance company.than that person will get the tax bebefit from the government. I.e SALARY-TAXABLE INCOME-PREMIUM OF INSURANCE POLICY RS 500000-RS100000-135000= RS335000/-

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Now after calculations that person has to pay the tax on is rs 33500.and the rest of amount will be exempted.

Future Plans

The global life insurance major is bullish in favour of India over China in its international business plans. The companys vision is to become Indias most admired life insurance company.

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Taking advantage of the freedom given to expand, MNYL now proposes to push its business to second-rung towns. MNYL is also planning bancassurance tie-ups for expanding its network. MNYL has projected a capital requirement of over US$ 22 million every year for the next three to four years. The cumulative investment required to grow the business till FY 200708 is to the tune of US$ 133144 million. Of this, the joint venture partners would invest US$ 76.6 million. MNYL plans to raise its stake in MNYL after Budget 2004 announced allowing a hike in foreign partners holdings from 26 per cent to 49 per cent.

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WHY ANYONE GO FOR MAX NEW YORK LIFE

Max New York life is the only company in India which is the collaboration of max India ltd and New York LLC. This is the first company to receive ISO certification. The strategy of this company is to be the most admirable life insurance company in India. The functioning of this company is better than the other companys .this Company works according to divisional structure. This company is divided into three departments which ensure smooth functioning and better quality services provided to the customers. This company provides the service as per the needs and

requirements of the customer. The charges are very nominal and provide high quality services.

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FUNCTIONING OF MAX NEW YORK LIFE In every branch of mnyl there are normally 3 departments Operational departments Sales department Training department

1. Operational department: Operational department of MNYL plays a very important role. In this department, the day to day operation of MNYL is carried on. The working of this department is to login the applied form, checking the required documents, delivering it to the main branch.

2. Sales department: As the name suggest this department is related with the selling process. There are various heads working in these

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departments. In the first level there is a branch manager who manages the overall working of Branch.

Second level consists of assistant branch manager who assist the branch manager in managing the functions of the branch.

Third level consists of agency development manager. These adms works for the development of the agents. ADMs helps in solving the problems of agents and guide them for the proper functioning of the firm.

Forth level consists of agent advisers these are the people who directly approach the customers and advice them in

taking the proper polices once the person applies for the policy the insurance agent helps them in submitting documents. the required

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3. Training department: In training department there are various trainers giving training to untrained staff which in future act agents and advisor. In every branch there are 2 trainers.

DEPARTMENTS

OPERATION DEPARTMENT

SALES DEPARTMENT

TRAINING DEPARTMENT

COMPUTER OPERATORS

BRANCH MANAGER

TRAINERS

ASSISTANT BRANCH MANAGER

AGENT DEVELOPEMENT MANAGER

AGENT ADVISORS

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PROCEDURE FOR TAKING LIFE INSAURANCE

Choice

Proposal Form

Proof Of Age

Medical Examination

Verification Of Proposal Form

Acceptance Of Proposal

Issue Of Policy

Payment Of Premium

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PROCEDURE FOR SETTLEMENT OF CLAIM

PROOF OF DEATH
The proof of death has to be presented to LIC it the policy has become due, because to the death of insured. A certificate given by the doctor who has given treatment to the insured before his death or the certificate issued by the municipality cans satisfactory proof of death. Death certificate is out of question in the case of survival of policy holder.

PROOF OF LEGAL TITLE

The person who is claiming the amount of policy has to give the proof of his title. If the nominee is mentioned in the policy, he can claim the amount easily. If such information is not given in the policy, the person has to prove his legal title and has to submit succession certificate to the LIC.

PROOF OF AGE

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Proof of age is necessary if the age of the assured was not admitted earlier i.e., at the time of taking out policy. Such certification can be obtained from the municipal authorities easily.

MAKING PAYMENT
If the insurance company is satisfied with all the documentary proofs. The amount of claim will be paid. It is always paid by a crossed cheque. If the policy holder is alive, the claim is settled quickly as limited formalities are required to be completed.

AWARDS

Outlook Money survey ranked MNYL No.1 in Slow, Medium and Quick fund categories

Awarded the Gallup Great Work Place Award 2009 CII Exim Bank Commendation Certificate for Business

Excellence 2008 & 2009

Recognized as a Super brand, 2009 - 2010. Golden Peacock Award for Innovation 2008
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Among the top 25 companies to work for in India, according to Business world 2003 Great Workplaces of India

Among the top five most respected insurance companies in India as per Business world 2004 & 2006 survey

Among top 3 in Asia Life Insurance Company of the Year Award 2007 instituted by Asia Insurance Review

Received the Amity Corporate Excellence Award 2007 Max New York Life bags the Asia Insurance Industry

Innovation of the Year Award 2009.

Conclusion
Insurance, today, have become integral part of our society as well as of our nation. Insurance play a vital role in stabilizing the economic activities of the country.

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Thus, from above statements we all can conclude that Insurance are very important part our lives as well as for the fast economic growth of every country.

Insurance are in existence since 18th century. We can say that Insurance are as old as our civilization. Insurance today perform various and innumerable functions which has benefited human life. Thus, Insurance are useful in mans economics as well as personal life.

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BIBLIOGRAPHY

NEWS PAPERS

1. ECONOMIC TIMES 2. HINDUSTAN TIMES 3. MUMBAI MIRROR

WEB SITES WWW.WIKIPEDIA.COM WWW.MAXNEWYORKLIFE.COM

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