A DISSERTATION

COMPARATIVE STUDY OF ICICI PRUDENTIAL AND HDFC IN REFERENCE TO CHILDREN INSURANCE POLICY

 CONTENTS
CHAPTER 1:Introduction of Children Insurance Policy NEED OF STUDY OBJECTIVES OF STUDY RESEARCH METHODOLOGY CHAPTER 2: REVIEW OF LITERATURE CHAPTER 3: COMPANY PROFILE OF ICICI PRUDENTIAL
AND HDFC STANDARD AND ITS SCHEMES COMPARISON OF SCHEMES BASIS OF THESE FEATURES : Min / Max Term child Min / Max Age of Child Min / Max Age of Parent Payment Modes

CHAPTER 4:

ON THE

Life Assured Beneficiary Benefit Structure On Death of parent.

CHAPTER 5: ANALYSIS AND INTERPRETATION CHAPTER 6: CONCLUSION CHAPTER 7: FINDINGS CHAPTER 8: SUGGESTIONS REFERENCE

Introduction
CHILDREN INSURANCE POLICY:
As a loving and caring parent, you have big dreams for your child and you want to make those dreams come true. To bring your dreams to life, you need an investment that is designed to provide adequate money for key educational milestones in your child's life, no matter what happens.

A child plan helps you in two ways:

(a) Saving and accumulating amount over many years so that the amount can be used for childs education or marriage (b) In case of death of insured, there is substantial amount payout which can be used to ensure childs future and it is not affected due to financial constraints.

 While buying a child plan, one needs to take care that the returns are in tandem with the rising costs. Additionally, the risk coverage is comprehensive. In the same regard, most child plans have inbuilt waiver of premium feature which ensures that on death of insured, the plan continues and payout is made as prescribed schedule. For increasing financial security of child, you can go for riders like Accidental death, critical illness etc which can be added with the base plan by paying a bit more premium.

Chapter 2: REVIEW OF LITERATURE

Studies at International Level: 1)Alessandro Cigno , Annalisa Luporin(2000)Transfers To Families With Children As A Principal-Agent Problem: The relationship between government and parents is modelled as a principal-agent problem, with the former in the role of principal and the latter in the role of agents. We make three major points. The first is that, if the well-being of the child depends not only on luck, but also on parental actions that the government cannot readily observe, the latter can influence parental behaviour indirectly, by conditioning transfers on performance. The second point is that, if there are market inputs into the making of a happy or successful child, which the government can observe, but cannot ascribe to any particular parent or child because they are bought anonymously, an income transfer policy can be usefully complemented by an indirect tax policy that systematically distorts prices in favour of these inputs. The third is that, if parents care about their children, insurance and incentive considerations must be tempered by the need to compensate parents who have the misfortune of getting a child with low ability or, more generally, less well equipped to make the most of life. Ways of making these findings operative are discussed in some detail.

2)David I. Levine University of California, Berkeley(2008) Effects of Health Insurance and Selection into Health Insurance: Low income and high medical expenses can also lead to debt, sale of assets, and removal of children from school, especially in poor nations. A short-term health shock can thus contribute to long-term).At the same time, because households often cannot borrow easily, they may instead forego high-value care. When they do access care it will often be of low quality which can lead to poor health outcomes. Theory suggests that health insurance can address some of these problems. By covering the cost of care after a health shock, insurance can help to smooth consumption, reduce asset sales and new debt, increase the quantity and quality of care sought, and can improve health outcomes. 3)Jonathan Gruber(1996): Health Insurance for Poor Women and Children in the U.S To low income women and children, has expanded dramatically over the past decade. This expansion provides a `natural laboratory' for learning about the effect of public health insurance eligibility on insurance coverage, health utilization, and health outcomes. This paper provides an overview of what has been learned about these questions from studying the expansions. Medicaid eligibility rose steeply over the 1984-1992 period, but coverage rose much less sharply, due to limited takeup of benefits. This is partly due to the fact that many eligibles already had private insurance coverage, and evidence suggests that a large share of new enrollees dropped their private coverage to join the program. Nevertheless, utilization of preventive care rose substantially as a result of the expansions, and there were significant improvements in health outcomes, specifically infant and child mortality. While these mortality reductions came at significant cost to the Medicaid program, the cost per life saved was low relative to alternative uses of government funds. These findings highlight both the potential benefits of public insurance policy and the importance of appropriately targeting scarce public health dollars.

Studies at National Level: 1)ABHINAV GUPTA(2007Children's Health Insurance Patterns):This literature review is the first task in an eight month research contract awarded by the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (ASPE), to Mathematic Policy Research, Inc. (MPR). The overall study objective is to improve understanding of the issues involved in analysis of children's health insurance patterns. This literature review was designed to identify key analytic questions that are not fully answered from current research. Subsequent tasks will include the design and implementation of further analyses of uninsured children using the Survey of Income and Program Participation (SIPP) and possibly other data as well. These analyses will benefit from the literature review, particularly with regard to the identification of methodological issues in measuring children's health insurance patterns. This review also provides a basis of comparison for key estimates produced in the additional tasks of this effort. 2)AHMED KHAN(2007)Parental Health Insurance Coverage as Child Health Policy: One of the policy questions expected to receive considerable attention during the State Childrens Health Insurance Program (SCHIP) reauthorization process is whether -- and if so, under what circumstances to permit states to use SCHIP funds to cover parents. This analysis examines research published since 2000 that explores the relationship between public health insurance coverage of parents and the rate and effectiveness of coverage among children, as measured by insurance levels, coverage continuity, and appropriate use of pediatric health care. The analysis begins with a brief overview of current Medicaid and SCHIP coverage options for parents and children. It then summarizes key findings from the literature related to the impact of covering parents on childrens insurance enrollment. The analysis concludes with a discussion of the implications of existing studies for the question of whether to expand state flexibility to use federal SCHIP allotments to cover parents

NEED OF THE STUDY

These are the most leading banks and their schemes are much better as compare to other banks. This study is helpful and beneficial for the customers and investors like customer protection, protection against Accident and disability, development allowance, facility of provide free money for educational purpose who invest their money in this Insurance Company

OBJECTIVE OF THE STUDY

To study Children insurance policy schemes of selected companies. To make a comparative analysis of Children insurance policy schemes of selected companies. To study investors perception towards of selected banks about Children insurance policy schemes.

RESEARCH MEHODOLOGY :
Research Design The research design for this study will be Descriptive as well as Analytical because it will be carried out with specific objectives and utilizes the large number of data of the Private Sector . Sample Size For attaining the different objectives, the following Banks will be taken for the study purposes 30 investors: (25 HDFC and 25 ICICI PRUDENTIAL) Duration of the Study For the purpose of analysis of data, a period of starts from 2009-2012 will be taken into consideration.

Sample Data The relevant Data will be collected from primary sources like Questionnaire and Interview. Secondary sources: Magazines, Web sites, Periodicals, Newspapers and respective banks. Statistical Tools For the data analysis various statistical tools like Comparative Analysis Percentage Method.

CHAPTER -2
PROFILE OF ICICI PRUDENTIAL
ICICI Prudential Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).

ICICI Prudential Child Plan Review SmartKid or Smart Ad:

Good education for ones child is something that will always be a cherished dream for every parent. And good education means good colleges, which means need for funding. The education costs are going up tremendously every year, hence it is necessary to save and invest regularly to build up a decent amount by the time the child is ready to go to college.

CHILDREN INSURANCE POLICY SCHEMES:

ICICI Pru Smart Kid Premium Plan: ICICI Pru Smart Kid Regular Premium. ICICI Pru Smart Kid Premier. ICICI Pru Guaranteed Savings Insurance Plan

ICICI Prudential offers 2 child insurance plans to help you protect your childs future
ICICI Pru Smart Kid Regular Premium: It is a traditional plan where funds are provided for the needs of the child in the future. regular premium life insurance plan, with two options to receive guaranteed educational benefits, no matter what the uncertainties in your life. ICICI Pru SmartKid Premier: A regular premium unit linked plan which ensures your childs education continues even if you are not around. This plan helps you invest choose between Fixed Portfolio Strategy and Life Cycle based Portfolio Strategy. ICICI Pru Guaranteed Savings Insurance Plan: is a non-participating limited premium endowment life insurance plan that allows you to enjoy the benefits of a long term savings plan ensuring that you and your family are free of any financial worries.

Key Things to know

Key Aspect Things That You Should Know

Is this plan a ULIP

No, ICICI Pru Guaranteed Savings Insurance Plan is not a ULIP. In this plan you get a Guaranteed Maturity Benefit which is not linked to equity market movements
No, ICICI Pru Guaranteed Savings Insurance Plan is Regular Premium plan in which you need to invest premiums regularly over a period of time. You have a choice of paying premiums regularly for 7 or 10 years

Is this a one-time payment plan

How many years do I need to pay premiums

What is the kind of returns I can expect

On maturity, you will get the sum of all premiums paid along with regular additions which will be declared at the beginning of every policy year. To check regular additions declared in the past

 Smart Kid Regular Premium: Plan is a participating endowment regular premium, traditional plan with two options to receive guaranteed educational benefits, no matter what the uncertainties in your life. You will always do everything you can, to make sure your child gets whatever he needs to develop his potential and be successful. You have big dreams for your child and you want to make those dreams come true. To bring your dreams to life, you need an investment that is designed to provide adequate money for key educational milestones in your childs life, no matter what happens. Key Benefits of Smart Kid Regular Premium: Lump sum payment of Sum Assured plus company contributes future premiums in the unfortunate event of death of Parent (life assured). Development Allowance: Under this benefit, a specified amount is paid to the child every year, in the unfortunate event of death of the parent. Facility to provide money for key educational expense of the child. Protection against Accident and Disability: Additional protection against accident and disability is provided with the help.

Basic features of Smart Kid Regular Premium:

Minimum/Maximum entry age (Parent) Minimum/Maximum entry age (Child) Premium paying frequency Minimum Premium 20-60 yrs 0-12 yrs Monthly, Half-yearly and Yearly Monthly, Half-yearly and Yearly

Minimum/Maximum sum assured

Minimum/Maximum Vesting Age

100000 3000000
50- 70 yrs

Benefits:
Coverage options: Ensure a comprehensive safety net for your child by choosing between:
Single life Insurance coverage for yourself, and Joint life Insurance coverage for both you and your spouse in the same policy

Complete protection: Company will pay Lump sum payment of Sum Assured PLUS waiver of all future premiums payable under the policy by the Company in the unfortunate event of death of the Parent Multiple portfolio strategy: Choose a personalized portfolio strategy from: Fixed Portfolio Strategy: Option to allocate your savings in the funds of your choice LifeCycle based Portfolio Strategy: A personalized portfolio strategy to create an ideal balance between equity and debt, based on your age Trigger Portfolio Strategy: A unique portfolio strategy to protect gains made in equity markets from any future equity market volatility while maintaining a predefined asset allocation. Flexible premium payment options: You can either pay premium throughout the policy term or for a limited period Loyalty additions: Paid at the end of every fifth policy year, starting from the end of the 10 policy year subject to payment of all due premiums Partial withdrawals: Facility to provide money at key educational milestones of your child Tax Benefits: On premiums paid and benefits received, as per prevailing tax laws

HDFC Children insurance policy:

Incorporated in Aug, 2000 HDFC Standard life is one of the leading private life insurance companies in India. HDFC Standard Life is a joint venture between HDFC- Indias housing finance company and Standard plc United Kingdoms savings and investment Company. HDFC Ltd. holds 72.43% and Standard Life (Mauritius Holding) Ltd. holds 26% of equity in the joint venture while the rest is owned by others. Parenthood brings responsibilities and no one is better judge of that than you. Child Plan is a plan specifically designed to take care of financial needs of your child. Child plan provides with necessary funds that will take care of childs education, marriage etc. By investing small portion of your savings you secure the financial end of your child. Child plan of HDFC Life:

HDFC Childrens Plan HDFC SL Youngster Super II HDFC SL Youngster Super Premium

Features of HDFC STANDARD:

HDFC SL YoungStar Super II There is no bigger joy than being able to fulfill your child's dream on your own. With HDFC SL YoungStar Super II you can fulfill your child's immediate and future needs. So tomorrow when your child needs your support you don't have to depend on anyone else.This is a ULIP which aims to help you achieve long term savings.

Features

Features
Premium
Minimum- Rs. 15000Maximum- No Limit

Sum Assured

Minimum- 10 X Annual Premium

Grace Period

30 Days

Plan option

You can opt for one of the following two plans Life option- Death Benefits Life and Health option Death Benefits + Critical Illness Benefits You can change your investment fund choices in 2 ways Switching Premium Redirection

Changing Fund

ADVANTAGES: You can customize the ideal plan for your child by choosing the premium you wish to invest along with the Sum Assured, depending on the level of protection required. This plan can be taken by filling Short Medical Questionnaire, which may not require you to go for medicals. Kindly refer to the product brochure for details. You can change your investment fund choices in two ways: Switching: You can move your accumulated funds from one fund to another anytime Premium Redirection: You can pay your future premiums into a different selection of funds, as per your need Tax benefits are offered under section 80C and 10(10D) of the Income Tax Act, 1961

HDFC SL YoungStar Super Premium With HDFC SL YoungStar Super Premium you can fulfill your child's immediate and future needs- all on your own. Start saving now with this unit linked insurance plan and be assured that savings for your child will continue, even in your absence. This ULIP plan offers you choice of cover options and benefit payment preferences- all designed to suit your needs.

Features

Choice of Plan Options

Option Death Benefit (on death of insured parent during policy term)
Sum Assured payable immediately on death + Bonuses Policy terminates immediately No Need to pay future premiums. The policy will continue Sum Assured will be paid on death No need to pay future premiums. The policy will continue.

Maturity Benefit

Accelerated Benefit Plan

Sum Assured + Bonuses OR

Maturity Benefit Plan

Sum Assured + Bonuses

AND

Double Benefit Plan

AND

Sum Assured + Bonuses

Bonuses: Revisionary bonus is usually declared as a percentage of basic sum assured of policy. The bonus is guaranteed to be payable either on death or on maturity as per the plan choice. The terminal bonus is sometimes added to a policy on maturity Premium: The plan allows you to pay premium on quarterly, half yearly or annually depending on your convenience. A grace period of 15 days is given for the payment of premium. Tax Benefits: Tax benefits could be availed under section 80C and 10 (10D)

CHAPTER- 4 COMPARISON OF SCHEMES OF HDFC STANDARD AND ICICI PRUDENTIAL

Features Stone ICICI Pru Smart Kid HDFC Children's Plan

Min / Max Term child

Matures between 22-25 10-25 year years of the childs age. Term is 10-25 years
N.A.

Min / Max Age 0-12 years of Child Min / Max Age 20-60 years of Parent

18-60 years

Payment Modes Regular

Regular

Life Assured Beneficiary

Child

Parents

Child

Child / Family

Benefit Structure

Two Structures 1. When the child reaches his critical milestones (Xth, XII th, Graduation, Post Grad); % of S A is paid
2. Last 4 years before maturity; % of SA is paid over consecutive yrs

Sum Assured +bonuses paid on maturity in lump sum

On Death of parent

Child gets the guaranteed payments as chosen earlier

1) Maturity Benefit Plan: future premiums are waived; maturity benefits are paid like normal on maturity 2)Accelerated Benefit Plan: Sum assured + bonuses paid to beneficiary on death & contract terminates 3)Double Benefit Plan: Sum assured paid immediately on death; future premiums are waived; maturity benefits are paid like normal on maturity

On Death of child

Policy continues as it is. It can be nominated to another child in that case also.

Policy continues.

Analysis through QUESTIONNAIRE

Options Question: DO YOU POSSESS CHILDREN INSURANCE POLICY? YES NO No. of CUSTOMER

60% 40%

60% 50% 40% Series1 30% 20% 10% 0% YES NO

INTERPRTATION: 60% says YES and 40% says NO this shows many people buying Children Insurance Policy. and showing interest towards it.

Question :WHICH COMPANY YOU ASSOCIATE WITH?

No. of customers

Options

No. of customers
70%

ICICI PRUDENTIAL

66%

60% 50% 40% No. of customers

HDFC STANDARD

34%

30% 20% 10% 0% ICICI PRUDENTIAL HDFC STANDARD

WHY DO YOU BUY CHIDREN INSURANCE POLICY

SAFETY FOR LIFE 30%

MARRIAGE PURPOSE

20%
SAFETY FOR LIFE MARRIAGE PURPOSE 4 EDUCATIONAL PURPOSE TAX SAVING

EDUCATIONAL 45% PURPOSE TAX SAVING 5%

INTERPRETATION: This shows Children Insurance Policy mostly buying for educational purpose than marriage purpose, safety for life and at last and least for tax saving purpose.

WHAT FACTORS OF COMPANY INFLUENCE YOU TO BUYING CHIDREN INSURANCE POLICY?

INNOVIATIVE PRODUCTS BETTER SERVICES 25%
REASONABLE PREMIUM

40%
HIGH RISK COVERAGE

HIGH RISK COVERAGE

REASONABLE PREMIUM

30%
BETTER SERVICES

Series1

5%
INNOVIATIVE PRODUCTS 0% 10% 20% 30% 40% 50%

WHICH FEATURES OF COMPANY ATTRACT YOU MOST FOR BUYING CHIDREN INSURANCE POLICY?
GOOD RETURN 35%
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
RN IS ME NT VI CE S RE TU OT HE RS

ADVERTISMENT

26%

Series1

SERVICES

45%

OTHERS

2%

GO OD

AD V

ER T

SE R

ARE YOUR COMPANY PROTECT YOU FROM THE RISK COVERAGE?

Options No. of custo mers 57%
43%
AR D ND

No. of customers

ICICI PRUDENTIAL

No. of customers

HDFC STANDARD

HD

43%

FC

ST A

57%
DE IC IC I PR U NT IA L

FROM WHICH FACILITY OF COMPANY YOU SATISFY MOST?

TERM DURATION OF POLICY TERM DURATION OF POLICY ANNUAL PREMIUM 55%

15%

ANNUAL PREMIUM

30%

30%

TERM DURATION OF POLICY

15%

Series1

TERM DURATION OF POLICY

55%

Which company provide better service?

ICICI PRUDENTIAL HDFC STANDARD

62% 38%
70% 60% 50% 40% 30% 20% 10% 0% HDFC STANDARD ICICI PRUDENTIAL Series1

Are you satisfied with the provided facilities?

Satisfied with facilities No. of CUSTOMERS
No. of CUSTOMERS

YES

75%

NO

25%

NO

No. of CUSTOMERS

YES

0%

50%

100%

CONCLUSION:
ICICI PRUDENTIAL focus on innovative products and better services than HDFC standard which attract customers most and focus on the need of customers or annual premium and bonuses. Advertisement should be create awareness and interest among customers. Providing policy for security purpose and for educational purpose and protect from risk and any mishappenning .

FINDING
People think insurance as a protection tool. People purchase insurance policy mostly for protection purpose and some of people for educational purpose, and saving and investment purpose. The goodwill, services, good return of the company also attracts customers toward a insurance company. People also take insurance policy as a security for their children and protection from risk coverage. ICICI focus on annual premium and term duration of policy than HDFC STANDARD. ICICI PRUDENTIAL satisfy most than HDFC STANDARD and provide better services to the customers.

SUGGESTIONS
Advertisement should be done on television and especially Posters and Banners. This will greatly help in raising awareness level. Insurance Companies focus more facilities and services of the customers.. The private company should create good relations and communication with the customers by maintaining their trust. Private companies should spread awareness regarding the benefits of Children Insurance Plans e.g Risk coverage, educational benefits etc.

Thank you