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ACKNOWLEDGEMENT
I would like to convey my thanks to Mr. KESHAV KUMAR GUPTA, Assistant Professor, for his help and guidance in the completion of my project file. I would also like to thank most respectable Mr. A.P SHARMA respectable Director and Principal, without their motivation and guidance, this practical work may not be possible. It is only due to their efforts that the practical work could be completed successfully. This project file is to be submitted as a part of practical examination included in BBA curriculum of GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY.
DECLARATION
I hereby certify that the project report entitled on ANALYSIS OF VARIOUS PRODUCTS /POLICIES OF HDFC Submitted in partial fulfillment of the requirement for the award degree of Bachelor in Business Administration to GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY Delhi is my original work and not submitted or the award of any other degree, diploma, fellowship, or any other similar title or prizes anywhere else.
TABLE OF CONTENTS
S.NO
1. 2. 3. 4. 5.
PARTICULARS
ACKNOWLEDGEMENT CERTIFICATE FROM GUIDE DECLARATION CHAPTER1-INTRODUCTION CHAPTER2- RESEARCH METHODOLOGY
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7-38 37-39
6.
40-49
7. 8.
50-52 53-55
9.
56-58
10.
BIBLIOGRAPHY
59-61
CHAPTER-I INTRODUCTION
S.NO
1.1 1.2 1.3 1.4 1.5
PARTICULARS
Introduction Objectives of study Scope of study Company profile SWOT analysis of HDFC life insurance company
PAGE NO.
7 16 16 17 37
1.1 INTRODUCTION
Life Insurance: Definition
Life Insurance could be defined as a policy that will pay a specified sum to beneficiaries upon the death of the insured. It is an agreement that guarantees the payment of a stated amount of monetary benefits upon the death of the insured. Life Insurance could be said as protection against the death of the insured in the form of payment to a designated beneficiary, typically a family member or business It is basically risk insurance intended as protection against the financial consequences of the death of the insured person which takes the form of payment of a previously agreed lump sum or pension to a beneficiary, if the insured person dies during the term of insurance. In the case of pure life insurance, without any endowment insurance component, no payments are due if the insured person survives the term of insurance. In big terms Life Insurance is a contract agreement between the certificate holder and the insurance company, providing a specified sum to beneficiaries upon the death of the insured. It is a coverage that pays out a set amount of money to specified beneficiaries upon the death of the individual who is insured. It is a policy that will pay a specified sum to beneficiaries upon the death of the insured. There are many types of life insurance, including whole life, term life, universal life, etc. It is an insurance relating to a risk depending on human life. This includes contracts providing payment on the insured person's death, endowments providing payment either on survival to a specified date or on earlier death and annuities which are paid throughout the annuitant's lifetime but cease on death. According to an article on site life-line.org Life insurance is the foundation of a sound financial plan. It provides financial security for your family by protecting your financial resources, such as your present and future income, against the uncertainties of life. More specifically, life insurance provides cash to the family after death. This cash (the death benefit) replaces the income one would have provided and can meet many important financial needs. It can help pay the mortgage, run the household, send kids to college, and ensure that dependents are not burdened with debt. The proceeds from a life insurance policy could mean that the family won't have to sell assets to pay outstanding bills or taxes. And also that there is no federal income tax on life insurance benefits. Most people with dependents need life insurance. While there's no substitute for evaluating specific situation, one rule of thumb is to buy life insurance equivalent to five to ten times ones annual gross income. To determine how much, if any, life insurance one needs, then start by gathering all personal financial information and estimating what the family will need after one is gone, including ongoing expenses (such as day care, tuition, or retirement) and immediate expenses at the time of death (like medical bills, burial costs, and estate taxes). The family also may need funds to help them readjust: perhaps to finance a move, or pay expenses while
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job hunting. Choosing a life insurance product is an important decision, but it can be complicated. As with any major purchase, it is important that one should understand his or her family's needs.
2. Encourages and Forces Thrift: A savings deposit can be easily withdrawn. The payment of life insurance premiums, however, is considered sacrosanct and is viewed with the same seriousness as the payment of interest on a mortgage. Thus, a life insurance policy in effect brings about compulsory savings.
3. Easy Settlement and Protection against Creditors: A life insurance policy is the only financial instrument the proceeds of which can be protected against the claims of a creditor of the assured by effecting a valid assignment of the policy.
4. Administering the Legacy for Beneficiaries: Speculative or unwise expenses quickly cause the proceeds to be squandered. Several policies have foreseen this possibility and provide for payments over a period of years or in a combination of installments and lump sum amounts.
5. Ready Marketability and Suitability for Quick Borrowing: A life insurance policy can, after a certain time period (generally three years), be surrender for a cash value. The policy is also acceptable as a security for a commercial loan, for example, a student loan. It is particularly advisable for housing loans when an acceptable LIC policy may also cause the lending institution to give loan at lower interest rates.
6. Disability Benefits: Death is only the hazard that is insured; many policies also include disability benefits. Typically, these provide for waiver of future premiums and payments of monthly installments spread over certain time period.
7. Accidental Death Benefits: Many policies can also provide for an extra sum to be paid (typically equal to the sum assured) if death occurs as a result of accident.
8. Tax Relief: Under the Indian Income Tax Act, the following tax relief is available: (a) 20% of the premium paid can be deducted from your total income tax liability. (b) 100% of the premium paid is deductible from your total taxable income. When these benefits are factored in, it is found that most policies offer returns that are comparable/or even better than other saving modes such as PPF, NSC etc. Moreover, the cost of insurance is a very negligible.
State insurance departments regulate the type of investments companies are permitted to make; Investment profiles of companies differ depending on what type of insurance they underwrite; Each state enforces laws to protect consumers against unfair discrimination in the provision of insurance;
Consumers who do not qualify for property insurance in the private market may obtain it through insurance industry operated plans;
The insurance industry does not benefit from federal deposit insurance. Insurance companies pay for insolvencies in the industry through a system of state Guaranty Funds.
Insurance helps society by reimbursing people and businesses for covered losses, encouraging accident prevention, investing in capital countrys capital markets and bond markets, enabling people to borrow money and reducing anxiety. The major benefit of insurance is the indemnification of insurers for covered losses. To indemnify is to restore the party that has had a loss to the same financial position as before the loss occurred. Through indemnification, insurance allows individuals, businesses and organizations to maintain their economic position and not suffer
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financial setbacks causing a burden to society or to other individuals. In addition, insurance indemnifies the injured persons. When a familys house is destroyed by fire and the loss is covered by insurance, the family is less likely to be dependent on relatives or public assistance for lodging. Likewise, when a business is covered for a large liability loss that would have otherwise driven the firm into bankruptcy, insurance contributes to society because the firm continues to provide jobs for its workers, products for its customers and business for its suppliers.
obligations under the terms of the policies. As they do for property/casualty companies, state insurance laws establish the types and amounts of permissible investments for life companies. Legally permissible investments include cash, mutual funds, Treasury bills and notes, mortgagebacked securities, corporate stock and other types of equity and debt securities, loans, and real estate. Reflecting the long-term nature of a life insurance policy, life insurance companies generally are permitted longer-term investments than those permitted for property/casualty companies.
A thriving insurance sector is of vital importance to every modern economy. First because it encourages the savings habit, second because it provides a safety net to rural and urban enterprises and productive individuals. And perhaps most importantly it generates long-term investible funds for infrastructure building. The nature of the insurance business is such that the cash inflow of insurance companies is constant while the payout is deferred and contingency related. This characteristic of their business makes insurance companies the biggest investors in long-gestation infrastructure development projects in all developed and aspiring nations. This is the most compelling reason
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why private sector (and foreign) companies which will spread the insurance habit in the societal and consumer interest are urgently required in this vital sector of the economy. With the nation's infrastructure in a state of imminent collapse, India couldn't have afforded to be lumbered with sub-optimally performing monopoly insurance companies and therefore the passage of the Insurance Regulatory & Development Authority Bill on December 2, 1999 heralds an era of cautious optimism where stakes are high for all parties concerned. For the Govt. of India, Foreign Direct Investment (FDI) must pour in as anticipated; for foreign insurers, investments must start yielding returns and for the domestic insurance industry - their market penetration should remain intact. On the fringe, the customer is pondering whether all the hype created on liberalization will actually benefit him. The IRDA Bill provides for the establishment of an authority to protect the interests of the holders of insurance policies, to regulate, promote and insure orderly growth of the insurance industry and amend the Insurance Act, 1938, the Life Insurance Act, 1956 and the General Insurance Business (Nationalization) Act, 1972. The bill allows foreign equity stake in domestic private insurance companies to a maximum of 26 per cent of the total paid-up capital and seeks to provide statutory status to the insurance regulator. Before privatization, insurance business in India was pegged at $ 6.6 Billion whereas industry leaders expected at that time that privatization will increase it to $ 40 Billion within next 3-5 years.
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IRDA As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) specify the composition of Authority. The Authority is a ten-member team consisting of (a) (b) (c) a Chairman; five whole-time members; four part-time members,
(all appointed by the Government of India) Duties, Powers And Functions Of IRDA Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA. (1) Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. (2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, (a) Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; (b) Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; (c) Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d) Specifying the code of conduct for surveyors and loss assessors; (e) Promoting efficiency in the conduct of insurance business; (f) Promoting and regulating professional organizations connected with the insurance and re-insurance business; (g) Levying fees and other charges for carrying out the purposes of this Act;
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(h) Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business; (i) Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); (j) Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; (k) Regulating investment of funds by insurance companies; (l) Regulating maintenance of margin of solvency; (m) Adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) Supervising the functioning of the Tariff Advisory Committee; (o) Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f);
(p)
Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector;
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HDFC has a wide network of 326 offices (which includes 80 offices of HDFC's wholly owned distribution company HDFC Sales Private Limited) catering to over 2,400 towns & cities spread across the country. It also has offices in Dubai, London and Singapore and service associates in the Middle East region, to provide
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housing loans and property advisory services to Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs).
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HDFC Mission To reach out an influence our target customer so as to provide them. World class Competitive insurance solution .HDFCSLIC focuses long term strategy". To be the top life insurance company in the market.This not only means being the largest or the most productive company in the market, but a combination of several things likeo Customer service of the highest order o Value for money for customers o Professionalism in carrying out business o Innovative products to cater to different needs of different customers o Use of technology to improve service stan
HDFC Values Values that we observe while we work: Integrity Innovation Customer centric People Care "One for all and all for one" Team work
Joy and Simplicity
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Chairman
Board Of Directors
Mr. K. M. Mistry Ms. Renu S. Karnad Mr. A. M. Crombie Ms. Marcia D. Campbell Mr. Norman Keith Skeoch Mr. G. R. Divan Mr. G. N. Bajpai Mr. Ranjan Pant Mr. Ravi Narain
Mr. D. M. Satwalekar
Audit Committee
Haribhakti & Company Chartered Accountants B.K. Khare & Co. Chartered Accountants
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PROTECTION PLANS
CHILDREN'S PLANS
RETIREMENT PLANS
HEALTH PLANS
PROTECTION PLAN
Protection Plans help you shield your family from uncertainties in life due to financial losses in terms of loss of income that may dawn upon them incase of your untimely demise or critical illness. Securing the future of one's family is one of the most important goals of life. Protection Plans go a long way in ensuring your family's financial independence in the event of your unfortunate demise or critical illness. They are all the more important if you are the chief wage earner in your family. No matter how much you have saved or invested over the years, sudden eventualities, such as death or critical illness, always tend to affect your family financially apart from the huge emotional loss. For instance, consider the example of Amit who is a healthy 25 year old guy with a income of Rs. 1,00,000/- per annum. Let's assume his income increases at a rate of 10% per annum, while the inflation rate is around 4%; this is how his income chart will look like, until he retires at the age of 60 years. At 50 years of age, Amit's real income would have been around Rs. 10,00,000/- per annum. However, in case of Amit's unfortunate demise at an early age of 42 years, the loss of income to his family would be nearly Rs. 5,00,000/- per annum.
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Fig. 1
However, with a Protection Plan, a mere sum of Rs. 2,280/- annually (exclusive of service tax & educational cess) can help Amit provide a financial cushion of up to Rs. 10,00,000/- for his family over a period of 25 years.
HDFC Term Assurance Plan HDFC Term Assurance Plan is a term plan that safeguards your familys financial protection in the event of your unfortunate demise and in addition to this it also provides you the option of selecting some add-on benefits like Critical illness, Accidental and Accelerated Sum Assured benefits.
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Features Customize your plan by adding any of these optional benefits o Critical Illness Benefit Under this option an amount equal to sum assured is paid on diagnosis of 6 pre-specified critical illnesses o Accidental Death Benefit Under this option an additional amount equal to the sum assured is paid in case of death by accident o Accelerated Sum Assured Benefit Under this option an amount equal to sum assured is paid on diagnosis of 6 pre-specified critical illnesses and policy terminates
Flexibility to opt for single life or joint life basis (first claim) The flexibility to choose the premium payment frequency i.e. quarterly/half-yearly/annual
HDFC Premium Guarantee Plan, a term plan that offers the twin advantages of protection and return of premiums on maturity. Your family receives a lump sum in case of an eventuality to you during the policy tenure or you get your premiums back at the end of the policy term. Advantages
Avail of high insurance cover at affordable premiums Flexibility to choose sum assured Flexibility to choose from policy terms of 10 to 30 year Tax benefits under sections 80C and 10(10D) of the Income Tax Act 1961 as per prevailing tax laws
HDFC Home Loan Protection Plan provides a lump sum at an unfortunate death, which can be used to repay the home loan. It ensures that your familys financial position is always secure and they do not lose their dream house. Features
Option to pay single premium or bundle it with your existing home loan EMI On death of the life insured, the nominee will receive sum assured as per the policy schedule, which can be used to pay off the home loan
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Sum assured decreases in line with declining outstanding loan liability, which means you dont overpay premiums
CHILDRENS PLAN
Children's Plans helps you save so that you can fulfill your child's dreams and aspirations. These plans go a long way in securing your child's future by financing the key milestones in their lives even if you are no longer around to oversee them. As a parent, you wish to provide your child with the very best that life offers, the best possible education, marriage and life style. Most of these goals have a price tag attached and unless you plan your finances carefully, you may not be able to provide the required economic support to your child when you need it the most. For example, with the high and rising costs of education, if you are not financially prepared, your child may miss an opportunity of a lifetime.Today, a 2-year MBA course at a premiere management institute would cost you nearly Rs. 3,00,000/At a assumed 6% rate of inflation per annum, 20 years later, you would need almost Rs. 9,07,680/- to finance your child's MBA degree. An illustration of how education expenses could rise with passing time due to inflation
Fig.2
Source: HDFC Standard Life Survey 2008. Inflation assumed as 6% p.a. So, how can you cope with these costs? Children's Plans help you save steadily over the long term so that you can secure your child's future needs, be it higher education, marriage or anything else. A small sum invested by
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you regularly can help you build a decent corpus over a period of time and go a long way in providing your child a secured financial future along with.
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.
Features
; Advantages
In case of your unfortunate demise or critical illness, we will pay the greater of Sum Assured (less partial withdrawals) or Fund Value to your child (Beneficiary). The policy will terminate. We will pay 100% of all the future regular premiums to the Beneficiary as and when due, on an annual basis. Please refer to the sales brochure for details.
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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. Tax benefits are offered under section 80C and 10(10D) of the Income Tax Act, 1961.
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
Advantages The Triple Insurance Benefit helps you secure your child's immediate and future needs. In case of your unfortunate demise or critical illness, we will pay the Sum Assured to your child (Beneficiary). Your family need not pay any further premiums. With Save -n- Gain benefit ,we will pay 50% of all the original regular premiums towards your policy and 50% of the premiums will be paid to the Beneficiary as and when due, on an annual basis. Any Death Benefit or Critical Illness cover terminates immediately. 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 and Benefit payment preference.
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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
Conventional Plans HDFC SL New Money Back Plan HDFC Savings Assurance Plan HDFC Endowment Assurance Plan HDFC Life Sampoorn Samridhi Insurance Plan
HDFC Single Premium Whole of Life Insurance Plan HDFC SL Classic Assure Insurance Plan
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Being self reliant is a nice feeling. Its comforting to be assured that you have necessary funds to live a fulfilling life. With HDFC SL New Money Back Plan, you will get regular cash back at periodic intervals, so that you can fulfill your dreams & aspirations. This plan also offers the financial protection to your loved ones when they need it the most, enabling you to live life with peace of mind.
Features
Advantages
Money Back on completion of every 4 years, you would get a percentage of your sum assured as cash payout. The payout will be as defined below.
Survival Benefit as a % of Sum Assured (Money Back Payout) 12th yr 16th yr 20th yr 24th yr
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25%
25%
25%
20
20%
20%
20%
20%
24
15%
15%
15%
15%
15%
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Provides valuable protection to your family by way of lump sum payment i.e. Sum Assured plus attaching bonsues, in case of unfortunate demise within policy term, over and above any earlier payouts. You can choose to pay your premium as either Annually, Half-Yearly, Monthly or Quarterly depending on your convenience. You also have a range of convenient auto premium payment options Tax benefits under sections 80C and 10(10D) of Income Tax Act, 1961
To fulfill your dreams for your family and yourself, you need to start saving today. And you not only need to save enough but also need the assurance that your family's future is secure. Get the convenience of HDFC Assurance Plan. HDFC Assurance Plan helps you conveniently build your long-term savings while keeping your family's future protected. This 'With Profits' savings plan helps you build your long-term savings while securing your family's future. Features
Advantages This plan is a 'With Profits' savings plan, which offers the following features o The plan receives simple Reversionary Bonuses, which are usually added annually o At maturity, the plan pays out the basic Sum Assured plus Reversionary Bonuses declared during the policy term. Interim or Terminal Bonus may also be payable, if declared The plan can be surrendered for cash value before maturity Provides financial support to your family by way of a lump sum payment in case of your unfortunate death within the policy term. The lump sum is the basic Sum Assured plus any bonus additions
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Tax benefit under Section 80C and 10(10D) of Income Tax Act 1961, subject to provisions contained therein
As a responsible family man, you have always chosen the security and well-being of your family over everything else. This calls for considerable planning of finances in your working years so your family is financially secure in your absence. This includes investing your money in a well-managed savings plan early on, so that you dont come up short while providing for your familys finances. Presenting the HDFC Endowment Assurance Plan, a with profits plan that generates savings to make your family financially independent even when you are not around. Features The savings plan offers flexibility to choose from 3 additional optional benefits: o Critical Illness Benefit - Under this option an amount equal to Sum Assured is paid on diagnosis of 6 pre-specified critical illnesses o Accidental Death Benefit - Under this option an additional amount equal to the Sum Assured is paid in case of death by accident o Waiver of Premium Benefit - Under this option all premiums are waived off in case of total disability This plan receives a Simple Reversionary Bonus, which is usually added annually. At the end of the term, an additional Terminal Bonus may be added depending on the performance of the underlying investments This plan gives you the flexibility to structure an ideal plan for your family by letting you choose the amount of targeted savings and the policy term Flexibility to pay premiums annually/half-yearly/quarterly depending on your convenience
HEALTH PLANS
Health plans give you the financial security to meet health related contingencies. Due to changing lifestyles, health issues have acquired completely new dimension overtime, becoming more complex in nature. It becomes imperative then to have a health plan in place, which will ensure that no matter how critical your illness is, it does not impact your financial independence. In the race to excel in our professional lives and provide the best for our loved ones, we sometimes neglect the most important asset that we have - our health. With increasing
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levels of stress, negligible physical activity and a deteriorating environment due to rapid urbanization, our vulnerability to diseases has increased at an alarming rate.
Fig.3
As can be seen in the above chart, lifestyle diseases are set to spread at disturbing rates. The result - increased expenditure. In many cases, people need to borrow money or sell assets to cover their medical expenses. All it takes is a suitable plan to help you overcome the financial woes related to your health by paying marginal amounts as premiums. For example, if you are 30 years old, then a mere sum of approximately Rs 3500* annually can provide you a health insurance plan of Rs 5 lakh over a period of 20 years, and a worry-free future for you and your family.
HDFC Critical Care Plan TYPES OF HEALTH PLANS HDFC Life Health Assure Plan
HDFC Life Health Assure Plan, a comprehensive, pure protection health insurance plan that reimburses medical expenses incurred in a hospital. It provides individual as well as family floater option.
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Advantages Premium guarantee for 3 years - premium remains same even if you make a claim Multiplier Benefit - Your cover doubles after 2 claim free years at no extra premium Guaranteed Lifetime Renewability- If you pay premiums in time and the policy continues without any break in cover, then the plan offers guaranteed renewability for life time. Please see the product brochure for details Following benefits are included depending on the gold/silver plan option selected: o Inpatient Hospitalisation Benefit o Day Care Benefit o Pre and Post Hospitalisation Benefit o Emergency Ambulance Benefit o Donor Expense Benefit o Maternity Benefit o Hospital Cash Benefit Cashless Claim Service at more than 4,500 network hospitals across India Wellness Benefit for Gold Plan option - get health check-up vouchers in 2ndpolicy year of every 3 year term Tax benefits subject to provisions contained under section 80D of the Income Tax Act 1961
Features Flexibility to choose from 2 plan types: o Individual o Family floater for your spouse, children, both parents and parents-in-laws Flexibility to choose from 2 plan options with varying sum assured limits and benefits: o Gold plan o Silver plan Premium Guarantee for 3 years even if you make a claim Automatically doubles your cover after 2 claim free years Guaranteed Lifetime Renewability Choice of Individual Cover and Family Floater Covers Cashless Claim Service at specified Network Hospitals across India Hassle free Claim Reimbursement Process Choice of paying Single Premium or Annual Premium
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RETIREMENT PLANS
Retirement Plans provide you with financial security so that when your professional income starts to ebb, you can still live with pride without compromising on your living standards. By providing you a tool to accumulate and invest your savings, these plans give you a lump sum on retirement, which is then used to get regular income through an annuity plan. Given the high cost of living and rising inflation, employer pensions alone are not sufficient. Pension planning has therefore become critical today. India's average life expectancy is slated to increase to over 75 years by 2050 from the present level of close to 65 years. Life spans have been increasing due to better health and sanitation conditions in the country. However, the average number of years of employment has not been rising commensurately. The result is an increase in the number of post-retirement years. Accordingly, it has become necessary to ensure regular income for life after retirement, so that you can live with pride and enjoy your twilight years. Priorities at different stages of life:-
Fig.4
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Conventional Plans HDFC Personal Pension Plan HDFC Life Single Premium Pension Super Plan
Single Investment
Premium/
You are thinking about retirement as a time when you would start relaxing, travelling, pursuing your interests full time. You want to enjoy your retirement on your own terms. All of these are possible only if you have assurance of income after retirement. Investing in a pension plan is a way to financially secure your life - after retirement. HDFC Life Pension Super Plus is a unit linked pension plan designed to build a corpus during the policy term so that you can enjoy post retirement income for life.
Features
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Advantages
Benefit of Assured Maturity (Vesting) Value - At the end of the policy term, you will receive higher of the following o Fund Value or o Assured benefit of 101% of all premiums including top-up premiums paid till date Your maturity (vesting) benefit will be used to provide you with guaranteed regular income i.e. an annuity, which you have to purchase from us. Opportunity to build corpus for post retirement income - Your premium will be invested in exclusive fund which will allocate assets dynamically between equities and fixed income assets. Benefits on maturity (vesting) - At vesting, you have to purchase an annuity from us. You can choose from a range of annuity options. You will get guaranteed income for life for yourself and your spouse. You also have the option to commute up to 1/3rd of the benefit at vesting tax free. Benefit on death - In the event of demise during the policy term, your nominee will receive the death benefit which will provide the much needed financial assistance. Additional allocation of premium from 11th year onwards - Get benefit from staying invested for longer term with Premium Allocation Rate of 102.5% from 11th year onwards
HDFC Life Single Premium Pension Super is a unit linked pension plan which will create corpus during the policy term so that you can enjoy post retirement income for life. This plan will safeguard your investments and assists you to live retirement days simply your way.
Features
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Advantages
Assured Benefit: At the end of the policy term, you will receive higher of the following o Fund Value or o Assured benefit of 101% of single premium and top-up premiums paid till date Your maturity (vesting) benefit will be used to provide you with guaranteed regular income i.e. an annuity, which you have to purchase from us. Opportunity to build corpus for post retirement income : Your premium will be invested in exclusive fund which will allocate assets dynamically between equities and fixed income assets. Benefits on vesting : At maturity (vesting), you have to purchase an annuity from us. You can choose from range of annuity options. You will get guaranteed income for life for yourself and your spouse. You also have option to commute up to 1/3rd of the benefit at vesting tax free. Benefit on death : In the event of demise during the policy term, your nominee will receive the death benefit, which will provide the much needed financial assistance.
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company.
2.
Strong and well spread network of qualified intermediaries and sales person.
3.
4.
5.
Huge Basket of product range which are suitable to all age and income groups.
6.
Large pool of technically skilled manpower with in depth Knowledge and understanding of the
market.
7.
The company also provides innovative products toe cater to different needs of different
customers.
2.
3.
Vertical hierarchical reporting structure with many designations and cadres leading to power
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4.
OPPORTUNITIES: 1. Insurable population According to ING only 10% of the population is insured, which
represents around 30% of the insurable population. There will be inflow of managerial and financial expertise from the worlds leading insurance
2.
markets. Further the burden of educating consumers will also be shared among many players.
3.
International companies will help in building world class expertise in local market by
4.
3. Increasing expenses and lower profit margins will hit hard on the smaller agencies and insurance companies.
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S.NO
2.1
PARTICULARS
Research Methodology
PAGE NO.
37
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2.1 INTRODUCTION
Research Design
A Research Design is the framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the blue print that is followed in completing the study. The basic objective of research cannot be attained without a proper research design. It specifies the methods and procedures for acquiring the information needed to conduct the research effectively. It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods.
Research Methodology
Research refers to search for knowledge. In other words research is defined as a careful investigation or inquiry especially through for new facts in any branch of knowledge. Research Methodology is one of the important aspects of any project. This gives us clear-cut view of method so used while gathering the information so needed for the completion of the report.
Data Collection
These include books, the internet, company brochures, product brochures, the company website, competitors websites etc, newspaper articles etc.
Data type
Secondary Data: Secondary data is one which has already been collected by someone else and which has already
been passed through statistical processing. Under this project secondary data is been collected from journals, magazines, & web sites.
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S.NO
3.1
PARTICULARS
Data Analysis & Interpretation
PAGE NO.
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LIFE INSURER HDFC STANDARD LIFE ICICI PRUDENTIAL AVIVA LIFE INSURANCE BAJAJ ALLIANZ LIC TATA AIG ICICI PRUDENTIAL BIRLA SUN LIFE ING VYSYA BHARTI AXA OTHERS
NUMBER OF POLICIES 14 5 8 9 64 8 4 7 3 2
6%
2% 2% 4%
11% 7%
6%
LIC TATA AIG HDFC STANDARD LIFE ING VYSYA BHARTI AXA OTHERS
53%
Interpretation
In India, the largest life insurance company is Life Insurance Corporation of India. It has been in existence in India since 1956 and is completely owned by the Government of India. Today the organization has grown to 2048 offices serving 18 crore policies and has a corpus of over 340000 crore INR. The second largest private life insurance company is HDFC. It has a wide network of 326 offices (which includes 80 offices of HDFC's wholly owned distribution company HDFC Sales Private Limited) catering to over 2,400 towns & cities spread across the country.
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Premium paid (p.a.) Rs. 5000 - Rs. 10000 Rs. 10001 - Rs. 15000 Rs. 15001 - Rs. 24900 Rs. 25000 - Rs. 50000 Rs. 50001 - Rs. 60000 Rs.60001 - Rs. 80000 Rs. 80001 - Rs. 100000
No. of respondents 45 29 19 12 5 2 3
Rs. 10001 - Rs. 15000 Rs. 15001 - Rs. 24900 Rs. 25000 - Rs. 50000
17%
Interpretation
From the chart above we find that, 39% of the respondents pay an annual premium less than Rs. 10001 towards life insurance. 25% of the respondents pay an annual premium less than Rs. 15001 and 17% pay an annual premium less than Rs. 25000. Only 19% of the respondents pay more than Rs. 25000 as premium They should introduce more products like This would definitely increase their market share as more individuals would be able to afford the policies/plans offered.
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Willingness premium
to
spend
on No. respondents 20 35 54 20 2
Less than Rs. 6000 Rs. 6001 - Rs. 10000 Rs. 10001 - Rs. 25000 Rs. 25001 - Rs. 50000 Rs. 50001 - Rs. 100000
60 50 40 30 20 10 0 Less than Rs. 6000 Rs. 6001 - Rs. 10000 Rs. 10001 - Rs. 25000 Rs. 25001 - Rs. 50000 Rs. 50001 - Rs. 100000
Interpretation
From the graph above, we can clearly see that 41% of the respondents would be willing to spend between Rs. 10001 Rs. 25000 for life insurance. 27 % would be willing to spend between Rs. 6001 Rs. 10000 per annum. Only 15% would be willing to spend more than Rs. 25000 per annum as life insurance premium. We could say that the maximum premium payable by most consumers is less than Rs. 25000 p.a..
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Ideal policy term 3 - 5 years 6 - 9 years 10 - 15 years 16 - 20 years 21 - 25 years 26 - 30 years More than 30 years Whole life Policy
No. of respondents 25 20 46 18 12 2 1 6
1% 2% 9%
5% 19%
3 - 5 years 6 - 9 years 14% 15% 10 - 15 years 16 - 20 years 21 - 25 years 26 - 30 years More than 30 years Whole life Policy
35%
Interpretation
From the chart given above it can be seen that 35% of the respondents prefer a policy term of 10 15 years, 19% prefer a term of 3 5 years and 15% prefer a term of 6 9 years. This means that Aviva could introduce more plans wherein the premium paying term is less than 15 years.
The outlook of insurance as a product should be changed from something which you pay for your whole life (whole life policy) and do not receive any benefit (the nominee only receives the benefit in case of your death) to an extremely useful investment opportunity with the prospects of good returns on savings, tax saving opportunities as well as providing for every milestone in your life like marriage, education, children and retirement.
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Expected Returns Less than 5% 5% - 10% 11% - 15% 16% - 20% 21% - 25% 26% - 30% 31% - 40% 41% - 50% More than 50%
No. of respondents 3 20 22 23 22 13 11 7 10
8% 5%
8%
10%
17%
17% 18%
Interpretation
From the chart above it can clearly been seen that 18% of the respondents would like 16 20% returns, 17% would like returns between 21 25% and 17% would like returns of 11 15% on their investments. Therefore the average return on investment should be at least 16 20 %.
Most consumers are willing to adapt to some amount of risk but still want some guaranteed returns. Therefore the bulk of investment should be made in the balanced fund with 50% debt and 50% equity. The returns on the Secure Fund are guaranteed as these involve investment is government securities and the debt market. But the returns on these instruments are low (8 10%). If the company invests in shares, returns are higher (39%) but correspondingly risk borne by the policy holder is also higher. Therefore a good combination of the two instruments is often a wise choice.
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Type of Plan Term Insurance Plans Endowment Plans Pension Plans Child Plans Tax Saving Plans
Interpretation From the chart given above we can clearly see that 45% of the respondents hold endowment plans and 39% of the respondents hold term insurance plans. Endowment plans are very popular and serve two purposes life cover and savings. If the policy holder dies during the policy term the nominee gets the death benefit that is, sum assured and accumulated bonus. On survival the policy holder receives the survival benefit with a bonus.
A term plan is a pure risk cover plan wherein the insured pays a lower premium for a higher sum assured. Term insurance is the cheapest form of insurance and helps the policy holder insure himself for a relatively low premium. For the returns sensitive investor term plans do not find favor as they do not offer a return in case the individual does not die during the policy term.
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Parameter Advertisements High returns Advice from friends Family responsibilities Others
No. of Respondents 35 84 46 89 16
Interpretation
From the chart above it can be seen that 33% of the respondents purchase life insurance to secure their families, 33% take life insurance to get high returns, 17% purchase insurance on the advice of their friends and 13% purchase insurance because of the influence of advertisements.
The main purpose of insurance is to cover the financial or economic loss that occurs to the family in case of the uncertain death of the policy holder. But now a day this trend is changing. Along with protection (life cover), a savings element is being added to insurance.
With the introduction of the new unit linked plans in the market, policy holders get the option to choose where their money will be invested. They can invest their money in the equity market, debt market, money market or a combination of these. The debt and money markets usually have low risk attached whereas the equity market is a high risk investment optio 48
Willingness to spend on premium Less than Rs. 6,000 Rs. 6,001 - Rs. 10,000 Rs. 10,001 - Rs. 25,000 Rs. 25,001 - Rs. 50,000 Rs. 50,001 - Rs. 1,00,000
Analysis:
From the graph above, we can clearly see that 41% of the respondents would be willing to spend between Rs. 10001 Rs. 25000 for life insurance. 27 % would be willing to spend between Rs. 6001 Rs. 10000 per annum. Only 15% would be willing to spend more than Rs. 25000 per annum as life insurance premium.
We could say that the maximum premium payable by most consumers is less than Rs. 25000 p.a. This is further reduced as most customers have already invested with LIC, ICICI Prudential, Birla Sun Life, Bajaj Allianz etc.
HDFC SLIC is faced with a large amount of competition. There are 18 insurance companies in India inclusive of LIC. Hence to capture a larger part of the market the company could introduce more reasonable plans with lesser premium payable per annum.
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CHAPTER 4 - FINDINGS
S.NO
4.1
PARTICULARS
Findings
PAGE NO.
52
50
4.1 FINDINGS
HDFC has higher premium rate HDFC has more costumers because of its brand name. HDFC provide wide range of products. HDFC has branches all over India People are viewing insurance as a tax saving and investment instrument as much as a protective one. 88.55% are aware of Life Insurance.
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S.NO
5.1
5.2
PARTICULARS
Recommendations Suggestions
PAGE NO.
55 55
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5.1 RECOMMENDATION
As the people think that saving and investment is a tool to protect their family & a tax saving device. They are aware of the fact & realizing its, importance. The company should try to expand & build up its infrastructure because there is a large potential for more investment opportunities in India.
5.2 SUGGESTIONS
Advertisement should be done on television and especially Posters and Banners. This will greatly help in raising awareness level. Private companies give better services to the customers as compared to public companies. The private company should create good relations and communication. Private companies should collaborate to spread awareness regarding the benefits of insurance plans provided by the Private Companies. Agents have got maximum influence on customers. They are the one who introduces the prospect to different policies. So agents should be given full-fledged training and the training should be strict. Tap the rural market where there is large potential. Diversify product portfolio . Make products more straight forward reduce complexities. Promote insurance in colleges and corporate houses. Promote HDFC SLIC as an Indian Company to build trust.
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S.NO
6.1 6.2 6.3
PARTICULARS
Result of the study Limitations Conclusion
PAGE NO.
58 58 58
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6.2 Limitations
Time for the completion of the project was too short to do an in-depth study. Study is based only on secondary data.
6.3 Conclusion
On the basis of my study, I conclude that, HDFC standard life insurance is first life insurance Company in India. It has businesses spread out across the globe. It was registered on 23rdDecember, 2000. It currently ranks number 4 amongst the insurers in India (Source: annual premium provided by the company) The company faces a large amount of competition. To sustain itself it must promote its products through advertising and improve its selling techniques. Consumers must be aware of the new plans available at HDFC SLIC. The medium of advertising used could be television since most of its competitors use this tool to promote their products. The company must be promoted as an Indian company since consumers seem to have more trust in investing in Indian firms. The unit linked concept must be specifically promoted. The general perception of life insurance has to change in India before progress is made in this field. People should not be afraid to invest money in insurance and must use it as an effective tool for tax planning and long term savings. HDFC SLIC could tap the rural markets with cheaper products and smaller policy terms. There are individuals who are willing to pay small amounts as premium but the plans do not accept premiums below a certain amount.
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BIBLIOGRAPHY
S.NO
1
PARTICULARS
Biblography
PAGE NO.
61
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BIBLIOGRAPHY
WEBSITES
BROUCHERS
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