STUDENTS UNDERTAKING

I hereby certify that this is my original work and it has never been submitted elsewhere

Project Guides:
(By Krishan Lata)
Faculty name:
Designation:

ACKNOWLEDGEMENT

I express my deep sense of gratitude to thank HDFC Branch for giving me an opportunity to do my internship
in their esteemed organization. My special appreciation extends to MR. ASHISH PRATAP SISODIA,
SENIOR MANAGER CHANNEL DEVELOPMENT under whom I worked and learned a lot and for
enlightening me with their knowledge and experience to grow with the corporate working.

His guidance at every stage of the Project enabled me to successfully complete this project which otherwise
would not have been possible without their constant encouragement and motivation, without his support it was
not possible for me to complete the report with fullest endeavor.
I would also like to extend my thanks to my College Faculty and to all my friends at for their constant support
and help at all times, without which this project would have remained incomplete.
Finally, I extend my heartfelt thanks to my parents for being a source of constant inspiration and continuous
encouragement.

KRISHAN LATA

TABLE OF CONTENTS
2

Sl.NO.

1.

PARTICULARS

CHAPTER 1

2.

3.

8.

19-27

Company profile

28-30

Research Methodology

31-41

Analysis and interpretation

CHAPTER 6

7.

Objective of study
Scope of study

CHAPTER 5

6.

14-18

CHAPTER 4

5.

Introduction of the topic

CHAPTER 3

4.

6-13

CHAPTER 2

PAGE NO.

42-49

Findings of the study

Limitations of the study
Suggestions and recommendations
Conclusion

BIBLIOGRAPHY

50-51

ANNEXURE

52-58

EXECUTIVE SUMMARY
This internship report consists of the overall experience of online working as a part of HDFC Standard Life
Insurance Co, Ltd. This experience helped me understand the basic functioning of the organization where I
was inducted.
My Internship program - Project Title: RECRUITMENT OF FINANCIAL CONSULTANT
The best learning experience was that I started from the very basics of getting to that position and not from the
position itself. This helped me get useful insight and understanding of online marketing, the benefits to the
members as well as the HDFC.
Training sessions were held to give me insights about How to create markets and write comments on other
members markets and to encourage and appreciate them for their nice efforts and creative markets.
I also learnt how to work online for such a nice which enhanced my knowledge, writing skills and
communication.

CHAPTER - 1
INTRODUCTION
TO
TOPIC

1.1 INTRODUCTION - INSURANCE

The insurance sector was opened up in the year 1999 facilitating the entry of private players into the industry.
With an annual growth rate of 24.31 percent and the largest number of life insurance policies in force, the
potential of the Indian insurance industry is huge. The year 1999 saw a revolution in the Indian insurance sector,
as major structural changes took place with the ending of Government monopoly and the passage of the
Insurance Regulatory and Development Authority (IRDA) Bill, lifting entry restrictions for private players and
allowing foreign players to enter the market with some limits on direct foreign ownership.
According to the CSO, the insurance and banking services contribution to the countrys GDP is 7.1 percent out
of which the gross premium collection forms a significant part. Life insurance penetration in India was less than
1 percent till 1990-91. During the 90s, it was between 1 and 2 percent and from 2001 it was over 2 percent. In
2003-04 it was 2.4 percent.
The increase in importance is due to the active role played by IRDA in licensing private players and taking
positive steps in increasing the insurance awareness among the people. Besides, the insurance companies in
general and private insurance companies in particular, are reaching out to untapped potential in rural areas with
aggressive campaigns.
Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance
companies to sign up Indian customers faster than anyone expected. Life insurance is viewed as a tax saving
device. People are now turning to the private sector for providing them with new products and greater variety
for their choice. The improvement in FDI flows reflected the impact of recent initiatives aimed at creating an
enabling environment for FDI and for encouraging infusion of new technologies and management practices. The
Governments proposal to increase the FDI cap in the insurance sector from the present 26 percent to 49 percent
has raised expectations among the international insurance companies.
Insurance Definitions
Insurance is a contract in which sum of money is paid to the
risk of paying a large sum upon a given contingency.
-- Justice Tindall

assured in consideration of insurers incurring

Insurance is a contract by which one party for a compensation called in the premium assumes particular risks
of the other party and promises to pay to him or his nominee a certain sum of money on a specified
contingency.
-- E.W.Fitterson
Insurance may be described as social device whereby a large group of individuals, through a system of
equitable contribution, may reduce certain measurable risk of economic loss common to all members of the
group.--Encyclopedia Britannica
The above definitions clearly shows that insurance is a cooperative device to spread the loss caused by a
particular risk over a member of persons who are exposed to it and who agree to insure themselves against risk.
Insurance does not eliminate risk but only reduces the financial burden, which may be very heavy.

1.1.1 The Nature Of Insurance

The insurance has the following characteristics which are observed in cases of life, marine, fire and general
insurance.
1) Sharing of risks: Insurance is a cooperative device to share the financial losses which might befall on an
individual or his facility on the occurrence of specified event such as sudden death of the bread winner, marine
perils in marine insurance, fire in the fire insurance and theft insurance etc. in the case of general insurance.
2) It is a cooperative device: A large number of persons agree to share the loss arising due to a particular risk.
Thus, insurance is a cooperative device.
3) Value of risk: The risk is evaluated before insuring to charge the amount of share called premium.
4) Payment made at contingency: The payment is made at a certain contingency insured. The Contingency may
be death, fire, marine perils etc.
5) Amount of payment: The amount of payment depends upon policy insured.

1.1.2 Functions of Insurance

A Primary Functions
1

Insurance provides certainty: Insurance provides certainty of payments at the uncertainty of losses. The
element of uncertainty is reduced by better planning and administration.

Insurance provides protection. The risk will occur or not, when will occur and how much loss will be there.
There are uncertainties of happening of time and amount of losses. The main function of the insurance is to
provide protection against the losses.

Risk sharing: Risk is uncertain and therefore, the loss arising from the risk is also uncertain. All business
concern faces the problem of the risk and if the concern is big enough the handling of risk becomes a
specialized function. Insurance, as a device is the outcome of the existence of various risks in our day to day
life. It spreads the whole losses over a large number of persons who are exposed by a particular risk.

B. Secondary Functions
1) Prevention of loss: Prevention is always better than cure. Prevention is by far the best solution to the problem
of risk. It is more effective and cheapest method to avoid the unfortunate consequence. But sometimes
prevention is not always possible and Effective.
2) It provides capital: It provides the capital to the society. For plan development of country there is a great need
for huge amount of capital. Now days, the insurance companies are rendering positive help in the development
of trade, commerce and industry of the country.
3) It improves efficiency: Achievement of goals, it improves not only his efficiency of the masses is also
advanced. The insurance eliminates worries and miseries of losses as death and destruction of property care free
person can devote his energies for better.
4) It ensures the welfare of society: Insurance is a saga of service and security to thee society. Security of the
life and property given by insurance bring peace of mind to the insured. The investment in LIC in welfare
schemes like electricity, housing, water supply, agro industry estates are able to solve many problems in India.

5)

It

helps

in

economic
progress:
Insurance
provides

an

initiative

to

work hard for

the betterment
of the masses. Life insurance involves the element of saving investment through small savings.

1.2 LIFE INSURANCE

Definition
The life insurance contract embodies an agreement in which broadly stated, the insurer undertakes to pay a
stipulated sum upon the death of the insurer to a designated beneficiary.
-- J.H.MAGEE

Life insurance contract may be defined whereby the insurer, in consideration of premium paid either in
lumpsum installments, undertakes to pay an annuity on the death of the insured of a certain number of years.
-- R.S.SHARMA
9

A contract of life assurance is that in which one party agrees to pay a given sum on the happening of a particular
event contingent upon the duration of human life in consideration of immediate payment of a smaller sum by
another.
1.2.1 Some Advantages of Life Insurance
1.) It is superior to an ordinary saving plan: this is so because unlike other saving plans, it offers full protection
against risk of death.
2.) Insurance encourages and enforces thrift : many people may not have the will power to continue a long term
saving plan which they may formulate regular payments in face of money other uses to which their limited
income could be put.
3.) Easy installments and protections against creditors: the proceeds of a life insurance policy can be protected
against the claims of the creditors of life assured by affection a valid assignment of the policies.
4.) Tax relief: the income tax act exempts from tax that part of an individuals income which is devoted to
payment of life insurance premium.
5.) Estate duty: life insurance is the most practicable way to ensure definite payment on ones death without
having resort to conversion of realizable asset at a loss.

1.2.2 Why Life Insurance

10

6) ?
Life Insurance has come a long way from the earlier days when it was originally conceived as a risk covering
medium for short periods of time, covering temporary risk situations, such as sea voyages. As life insurance
became more established, it was realized what a useful tool it was for a number of situations, including a) Temporary needs / threats: The original purpose of life insurance remains an important element, namely
providing income on death etc.
b) Regular Savings: Providing for one's family and oneself, as a medium to long term exercise (through a
series of regular payment of premiums). This has become more relevant in recent times as people seek financial
independence for their family.
c) Investment: Put simply, the building up of savings while safeguarding it from the ravages of inflation.
Unlike regular saving products, investment products are traditionally lump sum investments, where the
individual makes a one off payment.
d) Retirement: Provision for later years becomes increasingly necessary, especially in a changing cultural and
social environment. One can buy a suitable insurance policy, which will provide periodical payments in one's
old age.

1.3 LIFE INSURANCE IN INDIA

With such a large population and the untapped market area of this population Insurance happens to be a
very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent
annually. Together with banking services, it adds about 7 percent to the countrys GDP .In spite of all
11

this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of
Indian populations are without Life insurance cover and the Health insurance.
This is an indicator that growth potential for the insurance sector is immense in India. It was due to this
immense growth that the regulations were introduced in the insurance sector and in continuation
Malhotra Committee was constituted by the government in 1993 to examine the various aspects of
the industry. The key element of the reform process was Participation of overseas insurance companies
with 26% capital. Creating a more efficient and competitive financial system suitable for the
requirements of the economy was the main idea behind this reform.
Since then the insurance industry has gone through many sea changes .The

competition LIC

started facing from these companies were threatening to the existence of LIC. Since the liberalization
of the industry the insurance industry has never looked back and today stand as the one of the most
competitive and exploring industry in India. The entry of the private players and the increased use of
the new distribution are in the limelight today. The use of new distribution techniques and the IT tools
has increased the scope of the industry in the longer run.
1.3.1 A Brief History
The origin of insurance is very old .The time when we were not even born; man has sought some sort
of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself
against any form of risk and uncertainty led to the origin of insurance. The insurance came to India
from UK; with the establishment of the Oriental Life insurance Corporation in 1818.
The Indian life insurance company act 1912 was the first statutory body that started to regulate the life
insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been
established in India. Then the central government took over these companies and as a result the LIC
was formed. Since then LIC has worked towards spreading life insurance and building a wide network
across the length and the breath of the country. After the liberalization the entrance of foreign players
has added to the competition in the market.
The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance
Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the
British. In 1957 General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices. In 1972 The General Insurance

12

Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect
from 1st January 1973.
It was after this that 107 insurers amalgamated and grouped into four companies viz. the National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company
Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
1.3.2 Present Scenario
The government of India liberalized the insurance sector in march 2000 with the passage of the
Insurance Regulatory and Development Authority (IRDA) bill. Lifting all entry restrictions for private
players to enter the market with some limits on direct foreign ownership. Premium rate of most general
insurance. Policies come under the purview of the government appointed Tariff Agency Committee.
The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and
this may also restructuring and revitalizing of the public sector companies. A host of private insurance
companies operating in both life and non life segments have started selling their insurance policies
since 2001.
Non life insurance market, In December 2000, the GIC subsidiaries were restructured as independent
insurance companies. At the same time, GIC was converted into national re-insurer. In July2002,
Parliament passed a bill, delinking the four subsidiaries from GIC.
Presently there are 12 general insurance companies with 4 public sector companies and 8 private
insurers. Although the public sector companies still dominate the general insurance business, the
private insurance companies have a 10 percent share of the market, up from 4 percent in 2001. In the
first half of 2002, the private companies booked premium worth 6.34 billion. Most of the new entrants
reported losses in first yr of their operation in 2001.
Insurance costs constitute roughly around 1.2 2 % of the total project costs. Under the existing norms,
insurance premium payments are treated as part of the fixed costs. Consequently they are treated as
pass through costs for tariff calculations.
For projects costing up to Rs.1 billion, the tariff Agent committee sets the premium rates, for projects
between 1 billion and 15 billion, the rates are set in keeping with committees guidelines; and projects
above 15 billion are subjected to reinsurance pricing. It is the last segment that has a number of
additional products and competitive pricing. Insurance, like project finance, is extended by a
13

consortium. Normally one insurer takes the lead, shouldering about 40-50% of the risk and receiving
proportionate percentage of the premium.

CHAPTER 2
OBJECTIVES

14

LIFE
INSURANCE
FINANCIAL
CONSULTAN
T
15

1.4 LIFE INSURANCE FINANCIAL CONSULTANT

1.4.1 Eligibility for an Insurance Agent
Every person who has cleared higher secondary examination can become an Agent other than a minor
or the person who is convicted in any court for crime or any legal proceedings. Men and women both
can work as an Agent. A single person can be associated with other life insurance companies.
A training program is there to train a person who wants to become an Agent. There is 100 Hrs. training
program which can be done either with the physical appearance in the class room or the interest basis.
In the classroom training the trainee has to be physically present in the training session. There are
difference sessions of training program. A trainee can attend any session according to his comfort. The
training period is of 25 days approx. If the trainee does not have enough time to devote in the
classroom training, then there is another option left that is training on Internet.
On the basis of Internet the trainee has provided a login number along with the password through
which he operated his login and completed his training hrs. as convenient. Each and every hour pass on
the net under his login head will be count on his account. The test for the training program is also on
line. This is only procedure to be an Insurance Agent.
1.4.2 Scope of Insurance Agent
In the present scenario the living standard is becoming higher and higher every day. Every person who
has a family to survive wants to provide his family each and every possible comfortable thing. He
wants his children to be a well dressed, to be higher qualified in a well recognized school, colleges,
institutes and wants his children to go abroad for higher education. He wants to live a luxury life full of
pleasure.
To fulfill all of his needs he has to earn more and more. Any person can be on a job at a time or can be
on a business cant fulfill his pleasure requirement. There is a source through which he can make
money in a legal way that is insurance sector.
Becoming an insurance Agent provides him the legal source by which he can earn money with his
current status. It is the business in which you deal with you personal contacts and can gain extra
income. This business needs low investment an not of much effort. Its all depend on your social

16

contacts and your skills to convince people by helping them to suggest the product which suited them
the most.
As due to critical diseases, growing percentage of accident and fear of financial crisis everyone wants
to secure his or her future. Insurance sector plays a vital role in assuring people about their future. As
the scope of insurance enhancing, the need of an insurance Agent who can guide the potential
customers is growing.
Being an Insurance Agent of HDFC-STANDARD LIFE INSURANCE provides a legal mean to earn
money which protects a person from earning through a illegal source which is harmful for society as
well as himself. For the youngsters it provides great platform to prove them. On the basis of their
performance they can be recruited as unit manager.
Its recruitment procedure is very easy. A person with high educating and well experience can be
recruited after a personal interview and group discussion. After the training program is completed the
Insurance Agent has to appear for the pre-examination conducted by IRDA. As he clear the exam he
provides a license, which is the proof of a legalized insurance Agent, which permits him to deal in his
insurance business.
1.4.3 RECRUITMENT PROCESS:
Steps in recruitment of Insurance Agents

Approach to the likely person

Appointment as per condition

Discuss the topic

Give the documents which includes:

Prospectus of the company

Brochure

Companys plan

Questionnaire
17

Collect the document after its completion

Forward it to project manager

Feed it in the computer as the database

Follow up as per conditions

Modes of Contact

Personal Contacts

References

Phone Calls

Guidance as per Unit Manager

18

CHAPTER 3
COMPANY PROFILE

19

3.1 HDFC STANDARD LIFE INSURANCE

3.1.1 The Introduction
Standard Life Insurance Company Ltd. is one of India's leading private insurance companies, which offers a
range of individual and group insurance solutions. It is a joint venture between Housing Development Finance
Corporation Limited (HDFC Ltd.), India's leading housing finance institution and a Group Company of the
Standard Life, UK. HDFC as on March 31, 2007 holds 81.9 per cent of equity in the joint venture.
3.1.2 Our key strengths
Financial Expertise: As a joint venture of leading financial services groups, HDFC Standard Life has the
financial expertise required to manage your long-term investments safely and efficiently.
Range of Solutions: We have a range of individual and group solutions, which can be easily customized to
specific needs. Our group solutions have been designed to offer you complete flexibility combined with a low
charging structure.

3.1.3 Promoters of HDFC Standard Life Insurance:

1. HDFC Limited
HDFC is Indias leading housing finance institution and has helped build more than 23,00,000 houses since
its incorporation in 1977. In Financial Year 2003-04 its assets under management crossed Rs. 36,000 Cr. As
at March 31, 2004, outstanding deposits stood at Rs. 7,840 crores. The depositor base now stands at around
1 million depositors.

Rated AAA by CRISIL and ICRA for the 10th consecutive year

Stable and experienced management

High service standards

Awarded The Economic Times Corporate Citizen of the year Award for its long-standing
commitment to community development.
20

Presented the Dream Home award for the best housing finance provider in 2004 at

the third

Annual Outlook Money Awards.

3.1.4 Standard Life Group (Standard Life plc and its subsidiaries)
The Standard Life group has been looking after the financial needs of customers for over 180 years. It
currently has a customer base of around 7 million people who rely on the company for their insurance,
pension, investment, banking and health-care needs.
Its investment manager currently administers 125 billion in assets. It is a leading pensions provider in
the UK, and is rated by Standard & Poor's as 'strong' with a rating of A+ and as 'good' with a rating of
A1 by Moody's Standard Life was awarded the 'Best Pension Provider' in 2004, 2005 and 2006 at the
Money Marketing Awards, and it was voted a 5 star life and pensions provider at the Financial Adviser
Service Awards for the last 10 years running.
The '5 Star' accolade has also been awarded to Standard Life Investments for the last 10 years, and to
Standard Life Bank since its inception in 1998. Standard Life Bank was awarded the 'Best Flexible
Mortgage Lender' at the Mortgage Magazine Awards in

2006.

3.1.5 Incorporation: Hdfc Standard Life Insurance Company Limited

The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance
Company Limited.Our ambition from as far back as October 1995, was to be the first private company
to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized
when HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC
are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%.
Given Standard Life's existing investment in the HDFC Group, this is the maximum investment
allowed under current regulations. HDFC and Standard Life have a long and close relationship built
upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the
parent companies and be the yardstick by which all other insurance company's in India are measured.

21

3.2 Our Mission

We aim to be the top new life insurance company in the market. This does not just mean being the
largest or the most productive company in the market, rather it is a combination of several things like

Customer service of the highest order

Value for money for customers

Professionalism in carrying out business

Innovative products to cater to different needs of different customers

Use of technology to improve service standards

Increasing market share

3.3 Our Values

SECURITY: Providing long term financial security to our policy holders will be our constant
endeavor. We will be do this by offering life insurance and pension products.

TRUST: We appreciate the trust placed by our policy holders in us. Hence, we will aim to manage
their investments very carefully and live up to this trust.

INNOVATION: Recognizing the different needs of our customers, we will be offering a range of
innovative products to meet these needs. Our mission is to be the best new life insurance company
in India and these are the values that will guide us in this.

3.4 Board of Directors: Mr. Deepak S Parekh is the Chairman of the Company. He is also the Executive
Chairman of Housing Development Finance Corporation Limited (HDFC Limited).

22

 Mr. Keki M Mistry is currently the Managing Director of HDFC Limited. Mr.
Alexander M Crombie is the Group Chief Executive of the Standard Life Group in
March 2004.
Ms. Renu S. Karnad is the Executive director of HDFC Limited.
3.5 PRODUCTS:
At HDFC Standard Life, we offer a bouquet of insurance solutions to meet every need. We cater to both,
individuals as well as to companies looking to provide benefits to their employees. This section gives you
details of all our products. We have incorporated various downloadable forms and product details so that
you can make an informed choice about buying a policy.
For individuals, we have a range of protection, investment, pension and savings plans that assist and nurture
dreams apart from providing protection. You can choose from a range of products to suit your life-stage and
needs.
For organizations we have a host of customized solutions that range from
Group Term Insurance, Gratuity, Leave Encashment and Superannuation
Products. These affordable plans apart from providing long term value to the
employees help in enhancing goodwill of the company.
Individual Products
We at HDFC Standard Life realize that not everyone has the same kind of
needs. Keeping this in mind, we have a varied range of Products that you
can choose from to suit all your needs. These will help secure your future as
well as the future of your family.
Protection Plans
You can protect your family against the loss of your income or the burden
of a loan in the event of your unfortunate demise, disability or sickness. These plans offer valuable peace of
mind at a small price. Our Protection range includes our Term Assurance Plan & Loan Cover Term
Assurance Plan.
23

Investment Plans
Our Single Premium Whole Of Life plan is well suited to meet your long term investment needs. We
provide you with attractive long term returns through regular bonuses.
Pension Plans
Our Pension Plans help you secure your financial independence even after retirement. Our Pension range
includes our Personal Pension Plan, Unit Linked Pension, Unit Linked Pension Plus
Savings Plans
Our Savings Plans offer you flexible options to build savings for your future needs such as buying a dream
home or fulfilling your childrens immediate and future needs. Our Savings range includes Endowment
Assurance Plan, Unit Linked Endowment, Unit Linked Endowment Plus, Money Back Plan, Childrens
Plan, Unit Linked Youngstar, Unit Linked YoungstarPlus .
Group Products
One-stop shop for employee-benefit solutions
HDFC Standard Life has the most comprehensive list of products for progressive employers who wish to
provide the best and most innovative employee benefit solutions to their employees.
We offer different products for different needs of employers ranging from term insurance plans for pure
protection to voluntary plans such as superannuation and leave encashment. We now offer the following
group products to our esteemed corporate clients:
Group Term Insurance
Group Variable Term Insurance
Group Unit-Linked Plan
An investment solution that provides funding vehicle to manage corpuses with Gratuity, Defined
Benefit or Defined Contribution Superannuation or Leave Encashment schemes of your company
Also suitable for other employee benefit schemes such as salary saving schemes and wealth
management schemes
24

Social Products
Development Insurance Plan
Development Insurance plan is an insurance plan which provides life cover to members of a
Development Agency for a term of one year. On the death of any member of the group insured during
the year of cover, a lump sum is paid to that members beneficiaries to help meet some of the
immediate financial needs following their loss.
Eligibility
Members of the development agency and their spouses with:
Minimum age at the start of the policy 18 years last birthday
Maximum age at the start of policy 50 years last birthday
Employees of the Development Agency are not eligible to join the group. The group to be covered is
only eligible if it contains more than 500 members.
Premium Payments
The premium to be paid will be quoted per member in the group and will be the same for all members
of the group. The premium can only be paid by the Development Agency as a single lump sum that
includes all premiums for the group to be covered. Cover will not start until the premium and all the
member information in our specified format has been received. The premium rate is Rs. 25 per Rs.
10,000 of lump sum, per member.
Benefits
On the death of each member covered by the policy during the year of cover a lump sum equal to the
sum assured will be paid to their beneficiaries or legal heirs. Where the death is as a result of an
accident, an additional lump sum will be paid equal to half the sum assured. There are no benefits paid
at the end of the year of cover and there is no surrender value available at any time.
3.5.1 The role of the Development Agency

25

Due to the nature of the groups covered, HDFC Standard Life will be passing certain administrative
tasks onto the Development Agency. By passing on these tasks the premium charged can be lower.
These tasks would include:

Submission of member data in a specified computer format

Collection of premiums from group members

Recording changes in the details of group members

Disbursement of claim payments and the mortality rebate (if any) to group members

These tasks would be in addition to the usual duties of a policyholder such as:

Payment of premiums

Reporting of claims

Keeping policy holder information up to date

Training and support will be available to give guidance on how to complete the tasks appropriately.
Since these additional tasks will impose a burden on the Development Agency, the Development
Agency may charge a Rs. 10 administration fee to their members.

Prohibition of rebates
Section 41 of the Insurance Act, 1938 states
No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to
take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in
India, any rebate of the whole or part of the commission payable or any rebate of the premium shown
on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate,
except such rebate as may be allowed in accordance with the published prospectus or tables of the
insurer If any person fails to comply with sub regulation (previous point) above, he shall be liable to
payment of a fine which may extend to rupees five hundred

26

Tax Benefits
INCOME TAX SECTION GROSS ANNUAL SALARY HOW MUCH TAX CAN YOU SAVE?
HDFC STANDARD LIFE PLANS
Sec. 80C Across All income Slabs. Up to Rs. 33,990 saved on investment of Rs. 1, 00,000. All the life
insurance plans.
Sec. 80 CCC Across all income slabs. Up to Rs. 33,990 saved on Investment of Rs.1, 00,000. All the
pension plans.
Sec. 80 D* across all income slabs. Up to Rs. 3,399 saved on Investment of Rs. 10,000. All the health
insurance riders available with the conventional plans.
TOTAL SAVINGS POSSIBLE ** Rs. 37,389
Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male
with gross annual income exceeding Rs. 10,00,000.
Sec. 10 (10)D Under Sec. 10(10D), the benefits you receive are completely tax-free, subject to the
conditions laid down therein.
* Applicable to premiums paid for Critical Illness Benefit, Accelerated Sum Assured and Waiver of
Premium Benefit.
** These calculations are illustrative and based on our understanding of current tax legislations, which
are subject to change.
Please contact your tax consultant for exact calculation of your tax liabilities.

27

CHAPTER - 6
RESEARCH
METHODOLOGY

28

6.1 RESEARCH METHODOLOGY

Research: - It is a process of collecting, analyzing, interpreting and summarizing in a significant
manner for the purpose of framing out necessary conclusion. To carry research necessary telephonic
calls has been done, suitable appointments has been fixed.
Objective of training: - To understand life insurance and recruitment of capable life insurance
advisors for growth prospects.
Process: Methodology or process involving in the Research followed during the course of summer
training is as follows:

Collection of data: - This is an important aspect in formulating the objective of research process
where the data is collected via two process: - i) Primary Sources and ii) Secondary sources

Primary sources: The data is collected primarily by interviewing and questionnaire.

Secondary sources: The data is obtained from newspaper, magazines , books and websites

Analyzing of collected data: - The data collected through market survey and published sources are
then processed to obtained necessary inferences and findings for the purpose of achieving the
objective as well as to derive necessary conclusion.

Interpreting of data: - It is the significant step where the data collected and analyzed is interpreted
in the forms of graphs and figures is depicted in the report.

Summarizing of data: - Thereby necessary summary is prepared which is essential in the project
report of the summer training being done under an organization.

6.2 Helpful Arms of Research Methodology: 6.2.1 Questionnaire: - Questionnaire is a set or group of questions being framed for the purpose of
obtaining market perspective about a particular aspect or topic.
There is two types questionnaire

Open ended Questionnaire: - where the respondents are required freedom to present their views
and suggestions for the benefits and success of the organization.
29

Close ended questionnaire: - where the respondents is limited to the choice of answer being
delivered by the interviewer itself so that quick and fast means of responses be derived out without
wasting much time.
Here close ended questionnaire being followed by me during the course of the summer training
market survey.
6.2.2 Sampling: - Sampling is a process of obtaining a number of individuals taken a base for the

entire population.

Random sampling: - Random sampling is a process of selecting the sample size randomly and
no choice or preference to be made about the selection of respondents for the market survey and
questionnaire to be put forth against him. Here, Random sampling being adopted by me.

Sample Size: - 105 respondents.

30

CHAPTER-7
A N A LYS I S
AND
I N T E R P R E TATI O N

31

7 . 1 A N A LYS I S A N D I N T E R P R E TATI O N

Fig. 1.1
From the survey it was drawn that life insurance is more a protection of human asset value against
uncertainty (conferred by 51 respondents) where it is a tax saving option (being accepted by 38
respondents). Life insurance is a service involving both these prerequisites as depicted by remaining 16
respondents. The following depicted this:
Table 1.1
Protection of human asset value against uncertainty

51

Tax benefit device

38

Both

16

32

Fig 1.2
It has been observed and applied as a Life insurance is an essential service and should be applicable to
everyone, as favored by considerable 78 respondents where it is not essential to an extent by 27
respondents from the summer training project survey by putting forth the set questionnaire.

33

Fig 1.3
When further enquired about the qualification of respondents, it was found that 57% of the respondents
were graduates, 33% were post graduates and remaining 10% were of higher secondary out of total 105
respondents. Further depicted in the following tabular representation: Table 1.2
Post graduate

35

Graduate

59

Senior secondary

11

34

Fig 1.4
Further, the age qualification for agency recruitment, it was found that 39% respondents were
belonging to 18 25 age group, 35% were belonging to 25 35 age group where as 20% to 35 -45 age
group and remaining 6% to above 45 age group. Also depicted in the following tale mentioned below: Table 1.3
18-25 age group

41

25 35 age group

37

35 45 age group

21

Above 45 age group

35

Fig 1.5
Respondents had different views about the dissatisfaction from the present status of working or
occupation. Dissatisfaction has been depicted in a table below and graphically above:
Table 1.4

Low Employment

23

Low Earning

34

Low status

17

Huge capital Investment

16

36

Fig 1.6
When asked about whether they would like to know about a glorified career in life insurance agency
where they can fulfill any and every desire of their life, 59 respondents agreed while 46 respondents
said No and will see later sometime in future. It has been depicted that life insurance sector should be
promoted at the wide extent as it contribute to the economy as a useful source beneficial for both nation
as well as is citizens.

37

Fig 1.7
Indeed Life insurance is a noble business as it provides a needful financial support in the situation of
fatal calamity where the family is deprived by the fact to live in future and sustains their living. When
surveyed about life insurance as a noble service. 89 respondents agreed and believe that insurance is a
bettering service to human life and society as a whole where as 19 respondents show disagreement.

38

Fig 1.8
From the 59 respondents who agreed to know about the life insurance as a career, 18 of them agreed to
join HDFC Standard life insurance for agency and come to the company for more information whereas
41 still took time to think and postponed to some future date. People are highly dissatisfied from the
earning, status and living standard they are sustaining at present and would definitely like to make
some additional source of earning and for this agency for life insurance would prove a boon.

39

Fig 1.9
From all 105 respondents, 92 agreed that life insurance sector is a growing concern and will grow at a
rapid pace in future where as 13 took as a mere stagnant industry. Financial services are growing at a
tremendous pace as people are urging to make their investment in lucrative opportunities and therefore
life insurance sector is playing a vital role in educating the people to make their investment which
could secure their future, needs and living despite some fatal calamity that might or might not occur.

40

Fig 1.10
Among 74 respondents from 105 respondents favored the privatization of the life insurance and
perceive that the people of India will know be more aware and knowledgeable with respect to life
insurance than that in the past 50 years with the working of LIC.
The myth of LIC since it is a Government concern is still continue to prevail even though people have
become more advanced and they can invest their hard earned money after undertaking their pros and
cons and company position in the market.

41

CHAPTER - 8
FINDINGS
AND
INFERENCES

42

8.1 FINDINGS AND INFERENCES

It has been found that life insurance is an essential service and should be applicable to everyone, as favored by
majority of respondents.
Majority of respondents agreed and believed that insurance is a bettering service to human life and society as a
whole.
When asked about whether they would like to know about the glorified career in life insurance agency, majority
of respondents agreed.
Majority of respondents agreed to opt the life insurance as a career, some of them agreed to join HDFC
STANDARD LIFE INSURACE FOR AGENCY.
From all respondents, majority of respondents agreed that life insurance sector is a growing concern and will
grow at a rapid pace in future.

43

CHAPTER 9
LIMITATIONS

44

LIMITATIONS
1. The study is limited to HDFC Standard life insurance..

2. Study is limited to selected group from the main stream of the organization.

3. Sample size is limited to 105 respondents, Problems with confidential information.

4. The responses would have also been affected by the amount of work and working conditions.

5. Study includes both collections of data from primary as well as secondary sources.

6. There is a high chance of sampling error.

45

CHAPTER 10
RECOMMENDATIONS

46

10.1 RECOMMENDATIONS
Following are suggestions made for the benefits and augmentation of
the sound working of the company HDFC Standard life insurance:
1. Need to train and develop life insurance agents with more comprehensive knowledge and skills
to counter every queries of the customer.
2. It is suggested that company should not left any stone unturned towards sound advertisement
and promotional measures on every section whether it is printed, media or or air via radio.
3. It is also suggested that skilled management graduates need to be places on sales and marketing
of financial servies who can render their best ideas for the accomplishment of the company goals
and objectives to the best extent.
4. Also, care need to be taken that every customers grievance should be met with delight whether
before purchase or after sales.
5. There should be an expansion measure for more offices and
6. Location of more centers for offices of the company be established sop that company may grow
its network.
7. there should more advanced measures are required to develop to capture the needs of customer
so that they can be inspire and motivated to invest in the life insurance products being provided
by the HDFC Standard life insurance.
8. Life insurance Products should be made flexible so as to suit every section of society.

47

CHAPTER 11
CONCLUSION

48

11.1 CONCLUSION
Summer training is a best example for a trainee to learn about the company working, corporate culture
under which is operating the functions. HDFC standard life insurance is a life insurance company under
which I gained a significant knowledge with respect to life insurance, its importance and applicability as
well as undertook the task to recruit capable life insurance advisors which is conducive for the company to
grow with more prosperity. What I taught in the management institute utilized them fruitfully leading to the
best advantage to the company and to the best experience for mine.
At far I can conclude that life insurance is a noble service which is very important for every citizen to learn
and realize its importance because this is the only source which can remain the status where one is with the
family bread earner and ever when he is not.
With the growing financial sector I would like to opt this industry for my future career advancement and as
an opportunity to service this industry.

49

50

BIBLIOGRAPHY
Following are sources which helped me during my summer training:
1) BOOKS:
KOTHARI C.R.: Research Methodology Management, 3rd Edition
KOTLER PHILIP: Marketing Management 11th Revised edition, 2002
GUPTA S.P.: Statistical Methods Thirteen revised edition, 2001
2) MAGAZINES:
India Today
Business World
3) WEBSITES:
www.hdfcinsurance.com
www.irdaindia.org
www.liccouncil.org
www.businessconnect.com

51

ANNEXURE

QUESTIONNAIRE
52

Name: -
Age:-
Location: -
Occupation: -

Q.1. What do you mean by life insurance?

a) Protection of human asset value against uncertainty

b) A sum received after death

c) Both

Q.2. Do you think life insurance is essential for every one?

a) Yes

b) No

53

Q.3. What is your qualification?

a) Post graduate

b) Graduate

c) Senior secondary

Q.4. Do you come under:

a) 18-25 age group

b) 25 35 age group

c) 35 45 age group

d) Above 45 age group

Q.5. What dissatisfied you most in your occupation

a) Low employment

b) Low earning / income

c) Low status

d) Huge capital investment

e) All of the above

54

Q.6. Would you like to know about a career in life insurance advisor ship where you can fulfill
every desire of your life?
a) Yes

b) No

Q.7 Do you perceive that life insurance business is a noble service oriented business?
a) Yes

b) No

Q.8. Would you like to become or opt for life insurance advisor under esteemed and prospering
organization HDFC Standard Life insurance?
a) Yes

b) No

55

Q.9. Do you agree that the life insurance business is a growing industry and will grow and rapid
pace in future?
a) Yes

b) No

Q.10. Do you favor the privatization of life insurance by the Government where a significant
number of companies now in the market for life insurance to the customers with the alliance of
multinationals?
a) Yes

b) No

Suggestions: 1.
2.
3.
4.
5.
HDFC STANDARD LIFE INSURANCE

56

57

GLOSSARY
Application for insurance: This is the form on where you state information and answer questions from
the insurance company about yourself and your history. This application along with information from a
medical examination, if taken, from your physicians, any hospitals you may have visited and
investigation are what's used by the insurance company to decide whether or not to offer you life
insurance and at what rate.
Accident Benefit: A rider or an add-on with a life policy. It compensates a policyholder in the event of
death or injury by accident
Annuity: An investment option that makes a series of regular payments to an individual in exchange for
a premium or a series of premium.
Appreciate: To grow in value
Asset: Everything owned or due to a person
Asset allocation: How your investments are spread across various asset classes
Beneficiary: The person(s) named in the policy to receive the life insurance proceeds upon the death of
the insured.
Bond: It is like an IOU. By buying a bond you loan money to a company, a municipality, state or the
Central Government
Bonus: The amount paid as return in a with-profit policy. The bonus, expressed as a percentage of the
sum assured, is generally declared every year. The amount is linked to the profits earned by the insurer.
Depending on the time of withdrawal, there are two kinds of bonuses reversionary and cash. A

58

reversionary bonus can be encashed only on maturity of the policy; a cash bonus can be withdrawn
when declared
Budget: It is a tool used to monitor and control expenditures and purchases.
Cash (Surrender) Value: The amount that is available in cash for loans and that may be available for
withdrawals in a whole life insurance, universal life insurance or survivorship life insurance policy.
Accessing Cash Surrender Value may reduce the death benefit and may increase the risk of lapse.
Contestability, Contestable Clause: In insurance there is a clause, which explains the conditions under
which the insurer may contest or void the life insurance policy. This contestability is for a limited
period of time, which in most states is two years. After that period of time the insurance company
cannot contest the policy.
Convertible Term Insurance: Term insurance which can be exchanged (converted), at the option of the
policy owner and without evidence of insurability, for a whole life insurance policy or universal life
insurance policy.
Capital gains: Profit earned from the sale of stocks, mutual fund units and real estate. Long-term capital
gains arise from assets owned for more than a year while short-term capital gains are made from assets
owned for less than a year.
Compound Interest: Interest computed on principal plus interest accrued during the previous periods of
the investment
Critical illness rider: A rider that provides a policyholder financial protection in the event of a critical
illness
Death benefit: The amount payable to the nominee on death of the policyholder. The amount paid is the
sum assured plus benefits applicable (if any) less outstanding loans.
59

Declining term cover: A type of pure life protection insurance policy where the premium remain the
same while the life coverage keeps declining.
Disability / dismemberment benefit rider: A rider that provides for additional cover in the event of
disability, or dismemberment, of the policy holder due to an accident
Dividends: Payments made by companies and mutual funds to shareholders and unit-holders,
respectively, from the income generated by it.
Dividend yield: The percentage of dividend paid on a share to the value of the share.
Emergency fund: The money, in the form of liquid investments in bank savings accounts, 2-in-1
accounts and liquid funds to take care of emergencies like a job loss not covered by insurance policies.

Endowment plans: An insurance plan that provides a policyholder risk cover and some return on
investment.
Effective rate of interest: The true rate as against the nominal rate, which may be incorrect.
Equity: The actual ownership interest in a specific asset or group of assets
Financial planning: It covers the essential elements of a persons financial affairs and is aimed at
achieving a persons financial goals.
Fixed deposit: Funds placed on deposit in a bank, company or post office at a fixed rate of interest.
Face Amount: The amount stated on the face of the policy that will be paid in case of death. It does not
include additional amounts payable under accidental death or other special provisions, or acquired
through the application of policy dividends.

60

Fixed-income investment: Any investment that provides a stated percentage of value, say 6 per cent, on
the invested amount.
Group Insurance: An insurance policy taken out by employers to provide life cover to their employees.
Cheapest form of insurance
Guaranteed additions: The amount paid as returns in assured-return insurance plans. Guaranteed
additions are expressed as a percentage of the sum assured, with the amount payable being stated by
the insurer at the outset.
Grace Period: Life insurance premiums are due on a certain date, if you are late in paying, policies
allow a period of time where you can still pay your premium and not lose your policy. This is the grace
period. Most policies allow a grace period of 30 days from the due date. After the grace period, if the
premium is not paid, the policy can lapse i.e. be terminated by the insurance company.
Insurability: Acceptability to the company of an applicant for insurance. Where Insured or Insured
Life: The person on whose life the policy is issued.
Immediate annuity: An annuity that starts payments immediately after, or soon after, the first premium
is paid
Index fund: A scheme whose portfolio mirrors the progress of a particular index, both in terms of
composition and individual stock weight ages. Its a passive investment option, as a funds performance
will mimic the index concerned, barring a minor tracking error.
Insured: The policyholder
Insurer: The insurance company
Investments: Assets like fixed deposits, post office savings, bonds and stocks that are acquired for the
purpose of earning a return
61

Investment risks: The risks that your investments face. These include the risk of interest rate
fluctuations impacting your debt investments or the prices of equities going down.
Key person life insurance: When one has a key person in a business without whom the business would
suffer financially, key person life insurance is often purchased which helps to reimburse the company
for the business loss incurred by the death of this person.
Level Premium (Life Insurance):Life insurance for which the premium remains the same from year to
year. The premium is normally more than the actual cost of protection during the earlier years of the
policy and less than the actual cost in the later years. The building of a reserve is a natural result of
level premiums. The payments in the early years, together with the interest that is to be earned, serves
to balance out the underpayment of the later years.
Level term cover rider: A rider that increases the life cover in non-term plans, up to a maximum of the
sum assured on the base policy. The rider offers death benefit along, and serves the need for extra
protection for a specified time period.
Life annuity: An annuity that makes regular income payments till the policyholder is alive. On the
policyholders death, all income payments cease and there are no beneficiary benefits.
Liquidity: The quality of assets that can be easily and quickly converted into cash without any, or
significant, loss in value.
Loyalty additions: Additional benefits (other than guaranteed additions/bonus) paid to policyholders on
maturity of certain investment-based insurance plans for staying on through its term.
Lock-in period: The period of time for which investments made in an investment option cannot be
withdrawn.

62

Life Expectancy: The average number of years remaining for an individual to live shown at each age
based on long term studies by insurance companies. These statistics as shown on charts called
mortality tables..
Life Insurance: A contract between an owner (often the insured person) and a life insurance company
that guarantees the payment of a stated amount of money on the death of the insured.
Loan (Policy Loan): A loan made by a life insurance company from its general funds to a policy owner
on the security of the cash value of a policy.
Market value: The monetary value an asset will fetch if sold in the market today.
Maturity date: The date on which a policy term or fixed-income investment like fixed deposit or bond
comes to an end.
Money-back plans: A variant of endowment plans where survival benefits are disbursed through the
policy term, than paid lump sum.
Net asset value (NAV): A schemes NAV is its net assets (the market value of the financial securities it
owns minus whatever it owes) divided by the number of units it has issued.
Nominee: The person(s) nominated by the policyholder to receive the policy benefits in the event of his
death.
Participative plans: with-profit policy
Pension Plan: Investment products offered by insurance companies and mutual funds that required the
investor to make defined contributions over regular periods, mostly every year. The contributions are
invested according to a pre-decided investment plan. At retirement, the accumulation is paid out
through regular pay-out options.

63

Periodic payment investments: Investment options that have payouts in fixed intervals. For example,
money-back life insurance policies.
Permanent partial disability: Permanent loss of any body part, one eye, one limb or one finger or a toe,
or injuries that render the insured in capable of earning an income from the date of the accident
onwards from any work, occupation or profession.
Permanent total disability: Permanent loss of use of any two limbs, or permanent and complete loss of
sight in both eyes or any other injury that renders the insured incapable of earning an income.
Policy: The legal document issued by an insurance company to a policyholder that states the terms and
conditions of an insurance contract.
Policyholder: The person who buys an insurance policy as insured.
Policy term: period for which an insurance policy provides cover
Post office schemes: Also known as Small Savings schemes, they are offered at post offices and carry
the highest returns among fixed income instruments. Government backing makes these instruments like
Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP) and Post
Office Monthly Income Scheme (POMIS) risk-free
Premium: The amount paid by the insured to the insurer to buy cover
Recurring deposit: This is offered both in post office and banks where you are required to contribute a
fixed amount ever month. It is a great tool for making small and regular savings.
Revolving credit: A pre-established credit line, typically in a credit card, against which a person may
borrow to make purchases.
Riders: Additional covers that can be added to a life policy, for a cost
64

Sum assured: The amount of cover taken under a life insurance policy, it is the minimum amount that
will be paid on death of the policyholder during the policy term.
Surrender value: The amount payable by the insurer to the owner of an investment-based plan in case
he opts to terminate the policy after three years (the mandatory lock-in period) but before its maturity
date.
Survival benefits: The amount payable to a policyholder under an investment-based plan if he survives
the policy term.
Temporary total disability: An injury that results from an accident and renders a person immobile or
affects his earning capacity temporarily.
Term plans: A plan that provides life cover for a specified period of time, but no return on the premium
paid
Terminal bonus: one-time bonus paid on maturity via with-profit plan
Vesting date: It is a date signifying a milestone in a policy. In pension plans, it is the date from which
the policyholder starts receiving pension. In childrens plans, it is the date from which a child becomes
the owner of a policy taken out in his name (generally, around his 18th birthday).
Waiver of premium rider: A rider that waives the premium payable on the base policy and other riders
in certain circumstances mostly related to death, disability or injury. An important feature especially for
investment products such as childrens policies.
Wealth: The difference between the values of what you own (assets) and what you owe (liabilities).
With-profit policy: An insurance plan in which the policyholder gets a share of the insurers profits (in
the form of guaranteed additions / bonus). Along with the sum assured.
65

Without-profit policy: An insurance plan in which the policyholder does not get any share of the
insurers profits
Whole-life plans: Class of life insurance policies that provide cover through your lifetime.
Mutual life insurance Company: A life insurance company owned by the policyholders. Policyholders
of a mutual life insurance company may participate in the "divisible surplus of the life insurance
company as owners. They can receive dividends, most commonly on whole life policies, which can
enhance the cash value, increase the insurance amount or lower premiums.
Owner of a life insurance policy: A life insurance policy can be owned by the insured person or an
individual, a company or a trust with an insurable interest in the insured person. Insurable interest
means there would be a financial loss by the owner in the event of the death of the insured person.
Paid-up Insurance: Insurance that will remain in force with no need to pay additional premiums.
Participating Policy: A life insurance policy that is eligible for the payment of dividends by the insurer
(see also Dividend.)
Permanent Life Insurance: Any form of life insurance except term; generally insurance that builds up a
cash value, such as whole life. Universal life and whole life are types of permanent life insurance.
Policy Owner: The person who owns a life insurance policy. This is usually the insured person, but it
may also be a relative of the insured, a partnership or a corporation.
Premiums: Payments to the insurance company to buy a policy and to keep it in force.
Renewable Term Insurance: Term insurance which can be renewed at the end of the term, at the option
of the policy owner and without evidence of insurability, for a limited number of successive terms. The
rates generally increase at each renewal as the age of the insured increases.
Return of premium life insurance: Also known as return of premium term life insurance, this is term
life insurance for a period of time where one receives a guaranteed return of premiums paid if you keep
66

the policy for the term period. For example, 20 year return of premium term would guarantee a return
of premium paid after you paid 20 years of premium. Most of these policies also give a partial return
of premium if you keep the policy for a great part of the years.
Second to die life insurance: Life insurance that pays the benefit after two people die. See survivorship
life insurance in this glossary.
Stock life insurance company: A stock life insurance company is owned by stockholders. Contrast this
with mutual life insurance company.
Survivorship life insurance: Life insurance purchased on two individuals, usually man and wife, where
the life insurance benefit is paid after both individuals have died. This type of life insurance became
popular as a solution to paying estate taxes. The estate tax law allowed a couple to delay paying estate
taxes until both had died.
Thus, survivorship life insurance became popular as a less expensive way for heirs to pay estate taxes.
The premiums are less than buying life insurance on one life. By paying premiums now the theory is
that one can "pre-pay" the estate taxes because of the lump sum that comes in after the second death. .
Term life Insurance: Term insurance is life insurance coverage for a specified period of time. This can
be at a guaranteed rate or in some cases a guaranteed rate for a period of time and then a projected rate.
Term periods can be for 1 year, 5 years, 10 years, 15, 20 and even 30 years. For example: 30 year level
term would guarantee a level premium for 30 years based on a specified death benefit. Term life
insurance is usually the least expensive form of life coverage, at least initially. After the initial term
period of years, 5,10,15, 20, 30 etc. the policy could terminate or it can renew at a higher premium.
If you are allowed to renew it at a higher premium (based on your then attained age), it is called
renewable term life insurance.

67

Universal life insurance: Universal life insurance is permanent life insurance with premiums that are
not guaranteed. To a certain degree one can "design" a premium on this type of policy. Universal life
insurance often can be set up with a lower premium initially than whole life insurance.
Premiums and values are based on projections of assumed interest rates, the cost of insurance (also
known as mortality cost) and the insurance company's expenses. The actual premium paid may
increase because interest rates may go lower or the projected cost of insurance may increase.
Waiver of premium: This is an extra or add-in (called a rider in insurance lingo) that can be added to
most individual life insurance policies which waives (allows you to stop paying) the payment after the
insured person has been disabled (as described and defined in the insurance policy) for a specified
period of time, usually six months. At that time, the six months premium paid along with future
premium payments are waived.

68