INTRODUCTION

INTRODUCTION TO THE STUDY

Everyone is exposed to various risks. Future is very uncertain, but there is way to
protect ones family and make ones childrens future safe. Life Insurance
companies help us to ensure that our familys future is not just secure but also
prosperous. Life Insurance is particularly

important if you are the sole

breadwinner for your family. The loss of you and your income could devastate
your family. Life insurance will ensure that if anything happens to you, your loved
ones will be able to manage financially. This study titled Unit Linked Insurance
Plan Product of Metlife India Insurance Co. Ltd. enables the Life Insurance
Companies to understand how consumers perception differs from person to
person. How a consumer selects, organizes and interprets the service quality and
the product quality of different Life Insurance Policies, offered by various Life
Insurance Companies.
WHAT IS INSURANCE ?
It is a commonly acknowledged phenomenon that there are countless risks in every
sphere of life for property, there are fire risk; for shipment of goods. There are
perils of sea; for human life there are risk of death or disability; and so on .the
chances of occurrences of the events causing losses are quite uncertain because
these may or may not take place. Therefore, with this view in mind, people facing
common risks come together and make their small contribution to the common

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fund. While it may not be possible to tell in advance, which person will suffer the
losses, it is possible to work out how many persons on an average out of the group,
may suffer losses. When risk occurs, the loss is made good out of the common
fund .in this way each and every one shares the risk .in fact they share the loss by
payment of premium, which is calculated on the likelihood of loss .in olden time,
the contribution make the above-stated notion of Insurance.
DEFINITION OF INSURANCE
Insurance has been defined to be that in, which a sum of money as a premium is
paid by the insured in consideration of the insurers bearings the risk of paying a
large sum upon a given contingency. The insurance thus is a contract whereby:
a. Certain sum, termed as premium, is charged in consideration.
b. Against the said consideration, a large amount is guaranteed to be paid by the
insurer who received the premium.
c. The compensation will be made in certain definite sum, i.e., the loss or the
policy amount which ever may be.
d. The payment is made only upon a contingency more specifically, insurance may
be defined as a contact between two parties, wherein one party (the insurer) agrees
to pay to the other party (the insured) or the beneficiary, a certain sum upon a given
contingency (the risk) against which insurance is required.
TYPES OF INSURANCE
Insurance occupies an important place in the modern world because of the risk,
which can be insured, in number and extent owing to the growing complexity of
present day economic system. The different type of insurance have come about by
practice within insurance companies, and by the influence of legislation controlling
the transacting of insurance business, broadly, insurance may be classified into the
following categories:

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1. Classification from business point of view

a) Life insurance, and
b) General insurance
2. Classification on the basis of nature of insurance
a) Life insurance
b) Fire insurance
c) Marine insurance
d) Social insurance, and
e) Miscellaneous insurance
3. Classification from risk point of view
a) Personal insurance
b) Property insurance
c) Liability insurance
d) Fidelity general insurance
THE IMPORTANCE OF INSURANCE
Insurance benefits society by allowing individuals to share the risks faced by many
people. But it also serves many other important economic and societal functions.
Because insurance is available and affordable, banks can make loans with the
assurance that the loans collateral (property that can be taken as payment if a loan
goes unpaid) is covered against damage. This increased availability of credit helps
people buy homes and cars. Insurance also provides the capital that communities
need to quickly rebuild and recover economically from natural disasters, such as
tornadoes or hurricanes. Insurance itself has become a significant economic force

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in most industrialized countries. Employers buy insurance to cover their employees

against work-related injuries and health problems. Businesses also insure their
property, including technology used in production, against damage and theft.
Because it makes business operations safer, insurance encourages businesses to
make economic transactions, which benefits the economies of countries. In
addition, millions of people work for insurance companies and related businesses.
In 1996 more than 2.4 million people worked in the insurance industry in the
United States and Canada. Insurance as an investment that offers a lot more in
terms of returns, risk cover & as also that tax concessions & added bonuses Not all
effects of insurance are positive ones. The possibility of earning insurance
payments motivates some people to attempt to cause damage or losses. Without the
possibility of collecting insurance benefits, for instance, no one would think of
arson, the willful destruction of property by fire, as a potential source of money.
THE INSURANCE INDUSTRY TODAY
The insurance business has grown dramatically and undergone tremendous
changes. As a result of the deregulation of financial services businesses
including insurance, banking, and securities tradingthe roles, products, and
services of these formerly distinct businesses have become blurred. For instance,
citizens in the U.S. state of California voted in 1988 to allow banks to sell
insurance in that state. In Canada, banks may also soon be allowed to sell
insurance. Advances in communications technology have also allowed traditionally
distinct financial businesses to keep instantaneous track of developments in other
businesses and compete forsome of the same customers. Some insurance
companies now offer deposit accounts and mortgages. In the United States, life
insurance companies now sell more pension plans and other asset management
services than they do conventional life insurance. Developments in computer

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technology that have given insurance providers the ability to quickly access and
process information have allowed them to custom-design policies to fit the needs
of individual customers. But the increasing complexity of policies has also made
some aspects of buying and selling insurance more difficult. In addition,
improvements in geological and meteorological technology have the potential to
change the way property insurers calculate risks of damage. For example, as
scientists improve their abilities to predict severe weather patterns, such as
hurricanes, and geological disturbances, such as earthquakes, insurers may change
how they provide protection against losses from such events.
EVOLUTION OF INSURANCE IN INDIA
The marine insurance is the oldest form of insurance. If we trace Indian history
there are evidence that marine insurance was practiced here about three thousand
years ago. The code of Manu indicates that there was the practice of marine
insurance carried out by the traders in India with those of Srilanka, Egypt and
Greece .it is wonderful to see that Indians had even anticipated the doctrine of
average and contribution. Fright was fixed according to season and was then very
much at the mercy of the wind and other elements. Travelers by sea and land were
very much exposed to the risk of losing their vessels and merchandise because of
piracy on open seas and highway robbery of caravans was very common. The
practice of insurance was very common during the rule of Akbar to Aurangzeb, but
the nature and coverage of the insurance in this period is not well known. It was
the British insurer who introduced general insurance in India in the modern form.
The Britishers opened general insurance in India around the year 1700. The first
company known as the sun insurance office was set up in Calcutta in the year
1710. This was followed by several insurance companies like London assurance
and royal exchange assurance (1720), Phoenix Assurance Company (1782). Etc.

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Life insurance business in the country was nationalized in 1956. More than 100
non-life insurance companies including branches of foreign companies operating
within the country were 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.
with head offices at Calcutta, Bombay, New Delhi and Madras, respectively. Life
insurance in the current form came in India from united kingdom with the
establishment of a British firm, oriental life assurance company in 1818 followed
by Bombay life assurance company in 1823, the madras equitable life insurance
society in 1829 and oriental life assurance company in 1874.prior to 1871, Indian
lives were treated as sub standard and charged an extra premium of 15% to 20%.
Bombay mutual life assurance society, an Indian insurer that came in to existence
in 1871, was the first to cover Indian lives at normal rates. The Indian insurance
company Act 1923 was enacted inter alia, to enable the government to collect
statistical information about life and nonlife insurance business transacted in India
by Indian and foreign insurer, including the provident insurance societies. The first
half of the 20th century marked by two world war, the adverse affects of the World
War I and World War II on the economy of India, and in between them the period
of world wide economic crises triggered by the Great depression. The first half of
the 20th century was also marked by struggles for Indias independence. The
aggregate effect of these events led to a high rate of bankruptcies and liquidation of
life insurance companies in India. This had adversely affected the faith of the
general public in the utility of obtaining life cover.
In this background, the Parliament of India passed the Life Insurance of India Act
on 19th June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, by consolidating the life insurance business of 245 private life

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insurers and other entities offering life insurance services. Since 1972, the
insurance sector has been totally under the control of government of India through
LIC and GIC and its subsidiaries. As a result, revenue of both of them increased in
the last years .the amount of savings pooled by LIC increased from Rs.2704 crores
in 1974 to Rs .57670 in 1994 with an annual growth rate of 16.53%. Similarly
premium underwritten by GIC rose from 280 crores in 193 to 7647 crores in1998
showing an annual growth rate of 25.18%. Despite increase in premium collected
by both LIC and GIC their were inefficiency and red tapeisum creeped in to the
insurance sector. Apart from that a major policy shift by the government of India
during 1990s.the Indian economy opened for foreign competition .In this
background The government of India in 1993 had set-up a high powered
committee by R.N Malhothra , former governor reserve bank of India, to examine
the structure of Indian insurance sector and recommended changes to make it more
efficient and competitive keeping in view structural changes in other part of the
financial system of the country. Insurance sector has been opened up for
competition from Indian private insurance companies with the enactment of
Insurance Regulatory and Development Authority Act, 1999 (IRDA Act). As per
the provisions of IRDA Act, 1999, Insurance Regulatory and Development
Authority (IRDA) was established on 19th April 2000 to protect the interests of
holder of insurance policy and to regulate, promote and ensure orderly growth of
the insurance industry. IRDA Act 1999 paved the way for the entry of private
players into the insurance market, which was hitherto the exclusive privilege of
public sector insurance companies/ corporations.

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EVOLUTION OF INSURANCE ORGANIZATION

With a view to serve the society, the insurance organizations have been developed
in different forms with innovation of insurance practice for social welfare and
development; some of these forms are outlined here.
a) Self-insurance
The arrangement in which an individual or concern sets up a private fund to meet
the future risk. If some losses happened in the future the firm meets the loss out of
the fund. While it may be called self insurance it is not a single matter of fact,
insurance at all because there is no hedge, no shifting, or distributing the burden of
risk among larger Persons. It is merely a provision to meeting the unforeseen
event. Here the insured become the insurer for the particular risk. But it can be
effectively worked only when there is wide distribution of risks subjected the same
hazard.
b) Partnership
A partnership firm may also carry on the insurance business for the sake of profit.
Since it is not an entity distinct from the persons comprising it, the personal
liability of partners in respect to the partnership debts is unlimited. In case of huge
loss the partners may have to pay from their own personal funds and it will not be
profitable to them to starts insurance business .in the early period before the advent
of joint stock companies many insurance undertakings were partnership firms or
unincorporated companies.

c) Joint stock companies

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The joint stock companies are those, which are organized by the shareholders who
subscribe the necessary capital to start the business. These are formed for earning
profits for the stockholders who are the real owners of the companies. The
management of a company is entrusted to a board of directors who is elected by the
shareholders from amongst themselves. The company can operate insurance
business and policyholders have nothing to do with the management of the
concern. But in life insurance it is the practice to share certain portion of profit
among the certain policyholders.
d) Mutual fund companies
The mutual fund companies are co- operative association formed for the purpose of
effecting insurance on the property of its members. The policyholders are
themselves the shareholders of the companies each member is insured as well as
insured. They have power to participate in management and in the profit sharing to
the full extent. Whenever the income is more than the expenses and claims, it is
accumulated I the form of saving and is entitled in reducing the rate of premium.
Since the insured are insurers also, they always try to reduce the management
expenses and to keep the business at sound level.
e) Co-operative insurance organizations
Cooperative insurance organizations are those concerns, which are incorporated
and registered under Indian cooperative societies Act. The concerns are also called
co operative insurance societies these societies like mutual fund companies are
non profit organization .the aim is to provide insurance protection to its members at
the lowest reasonable net cost .the Indian insurance Act. 1938, has provided special
provisions for the co-operative insurance societies, but after nationalization the
societies have ceased to exist.
f) Lloyds Association

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Lloyds association is one of the greatest insurance institutions in the world. Taking
its name from the coffee house Lloyd where underwriters assembled to transact
business and pick-up news. The organization traces its origins to the latter part of
the seventeenth century .so it is the oldest insurance organization in existing form
in the world. In 1871,Lloyds Act was passed incorporating the members of the
association into a single corporate body with perpetual succession and a corporate
seal .the powers of Lloyds corporation were extended from the business of marine
insurance to the other insurance and guarantee business. The Lloyds Association
also publishes, Lloyds list and register of shipping for the information of insuring
public and the insurers.
g) State Insurance
The government of a nation, some times, owns the insurance and runs the business
for the benefit of the public. The sate insurance is defined as that insurance which
is under public sector. In Brazil, Japan and Mexico, the insurance are largely
nationalized. Previously, the state undertook only those insurances, which were
regarded as vital for the national interest.
INSURANCE SECTOR REFORMS
Having looked at the insurance sector, the efforts made by the government to make
the industry more dynamic and customer friendly. To begin with, the Malhotra
committee was set up with the objective of suggesting changes that would achieve
the much required dynamism.The Mallhotra Commiittee Report In 1993, Malhotra
Committee, headed by former Finance Secretary and RBI

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Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry

and recommend its future direction. In 1994, the committee submitted the report
and gave the following recommendations:
Structure
Government stake in the insurance Companies to be brought down to 50%
.Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations. All the insurance companies
should be given greater freedom to operate.
Competition
Private Companies with a minimum paid up capital of Rs.1bn should be allowed to
enter the industry. No Company should deal in both Life and General Insurance
through a single entity. Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies. Postal Life Insurance should be
allowed to operate in the rural market. Only one State Level Life Insurance
Company should be allowed to operate in each state.
Regulatory Body
The Insurance Act should be changed. An Insurance Regulatory body should be set
up.Controller of Insurance (Currently a part from the Finance Ministry)
Investments Mandatory Investments of LIC Life Fund in government securities to
be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than
5% in any company (There current holdings to be brought down to this level over a
period of time).

Customer Service

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LIC should pay interest on delays in payments beyond 30 days. Insurance

companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology to be carried out in the
insurance industry. Overall, the committee strongly felt that in order to improve the
customer services and increase the coverage of the insurance industry should be
opened up to competition. But at the same time, the committee felt the need to
exercise caution as any failure on the part of new players could ruin the public
confidence in the industry.

Few Life Insurance policies are:

Whole life policies
Cover the insured for life. The insured does not receive money while he is alive;
the nominee receives the sum assured plus bonus upon death of the insured.
Endowment policies
Cover the insured for a specific period. The insured receives money on survival of
the term and is not covered thereafter.
Money back policies
The nominee receives money immediately on death of the insured. On survival the
insured receives money at regular intervals during the term. These policies cost
more than endowment with profit policies.
Annuities / Children's policies
The nominee receives a guaranteed amount of money at a pre-determined time and
not immediately on death of the insured. On survival the insured receives money at
the same pre-determined time. These policies are best suited for planning children's
future education and marriage costs.
Pension schemes

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That Pension schemes provide benefits to the insured only upon retirement. If the
insured dies during the term of the policy, his nominee would receive the benefits
either as a lump sum or as a pension every month. Since a single policy cannot
meet all the insurance objectives, one should have a portfolio of policies covering
all the needs.
ULIPIt is a life insurance police which provides combination of life insurance protection
and investment. When people how investments in the capital market have grow
over the last few years, they prefer to use their funds in ways that help them to
participate in the boom in the capital market. Insurers have developed plans that
combine the benefits of life insurance as well as giving various options of
participating in the growth of the capital market. Such plans are called Linked Life
insurance plans. They are also called Unit Linked Insurance Plans or ULIPs, in
short. A ULIP is a life insurance policy which provides a combination of life
insurance protection and investments. ULIPs contribute nearly 50%

of the

premium from some insurers and more than 85% of the premium for some others.
BACKGROUND OF THE STUDY
Life Insurance is a contract for payment of a sum of money to the person assured
on the happening of the event insured against. Usually the insurance contract
provides for the payment of an amount on the date of maturity or at specified dates
at periodic intervals or at unfortunate death if it occurs earlier. Obviously, there is a
price to be paid for this benefit. Among other things the contracts also provides for
the payment of premiums, by the assured. Life Insurance is universally
acknowledged as a tool to eliminate risk, substitute certainty for uncertainty and
ensure timely aid for the family in the unfortunate event of the death of the

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breadwinner. In other words, it is the civilized worlds partial solution to the

problems caused by death. Life insurance helps in two ways dealing with
premature death, which leaves dependent families to fend for themselves and old
age without visible means of support. The most common types of life insurance are
whole life insurance and term life insurance. Whole life insurance provides a
lifetime of protection as long as you pay the premiums to keep the policy active.
They also accrue a cash value and thus offer a savings component. Term life
Policies are usually renewable at the end of the term. Few major players are

LIFE INSURANCE CORPORATION OF INDIA

METLIFE INSURANCE COMPANY
BIRLA SUN-LIFE INSURANCE COMPANY
HDFC STANDARD LIFE INSURANCE COMPANY
BIRLA SUN-LIFE INSURANCE COMPANY
ING VYSYA LIFE INSURANCE COMPANY
SBI LIFE INSURANCE
BAJAJ ALLIANZ LIFE INSURANCE COMPANY
ICICI PRUDENTIAL LIFE INSURANCE COMPANY
MAX NEW YORK LIFE INSURANCE COMPANY
OM KOTAK MAHINDRA LIFE INSURANCE COMPANY

CHAPTER - 2
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RESEARCH DESIGN
STATEMENT OF THE PROBLEM
This Study will enable us to understand the consumers perception about life
insurance companies and also will enable the companies to understand, how a
consumer selects, organizes and interprets the Quality of service and product
offered by life insurance companies.
SCOPE OF THE STUDY
This study is limited to the consumers within the limit of Puri. The study will be
able to reveal the preferences, needs, perception of the customers regarding the life
insurance products, It also help the insurance companies to know whether the
existing products are really satisfying the customers needs.
NEED FOR THE STUDY
1) The deeper the understanding of consumers needs and perception, the earlier
the product is introduced ahead of competitors, the expected contribution margin
will be greater .Hence the study is very important.

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2) Consumer markets and consumer buying behavior can be understood before

sound product and marketing plans are developed.
3) This study will help companies to customize the service and product, according
to the consumers need.
4) This study will also help the companies to understand the experience and
expectations of the existing customers.

OBJECTIVE OF THE STUDY

To ascertain the profile and characteristics of potential buyers.

To have an insight into the attitudes and behaviors of customers.
To find out the differences among perceived service and expected service.
To produce an executive service report to upgrade service characteristics of life
insurance companies.
To access the degree of satisfaction of the consumers with their current brand of
Insurance products.
REVIEW OF LITERATURE:
The literature review section critically examine the recent or historically significant
studies, company data or industry reports that acts as a basis for proposed studies
to begin with the research discussion of the related literature and relevant
secondary data from a comprehensive prospective, moving to more specific
studies, that are associate with research problem. Basically the literature should be
applied to the study, than the researcher proposes. The literature may also explain
the needs for the proposed work to appraise the short comings and informational
gaps in secondary data sources. To carry the research work the researcher has gone

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through a few reports, books, journals and websites. The details regarding Life
Insurance Industry, history, origin and growth of the industry is also taken from
some books, magazines etc. The sources of this information are as follows:
Catalogues and Broachers from various life insurance companies.
Articles from magazines and news paper.
Information from various websites.

RESEARCH DESIGN:
A research design is a basic plan, which guides the researcher in the collection and
analysis of data required for practicing the research. Infect the research design is
the conceptual structure where the research is conducted. It constitutes the Blue
Print for the collection, measurement and analysis of the data. The study is carried
out to understand the Consumer Perception about life insurance companies in Puri
city. For this study the researcher used exploratory research design. This research
covers 50 consumers in Puri city, belonging to various age groups.
SAMPLE DESIGN:
The process of drawing a sample from a large population is called sampling.
Population refers to the total of items about which information is defined. Wellselected samples may reflect fairly and accurately the characteristics of the
population.
Sampling Unit:
The sample unit of this survey was the customers having life insurance policies in
Puri city.
Sample Size:

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The sample size was 50 customers of different life insurance companies, from the
various parts of the Puri city.
SOURCES OF DATA:

After identifying and defining the research problem and determining specific
information required to solve the problem the researcher will look for the type and
sources of data which may yield the desired results, while deciding about the
method of data collection to be used for the study, there are two types of data.
Secondary Data:
Secondary data means data that are already available i.e. they refer to the data
which have been collected and analyzed by someone and can save both money and
time of the researcher. Secondary data may be available in the form of company
records, trade publications, libraries etc. Secondary data sources are as follows:
Company Reports
Daily Newspaper
Standard Textbook
Various Websites
Primary Data:
Primary data are those, which are collected for the first time. Primary data is
collected by framing questionnaires. The questionnaire contained questions, which
are both opened and closed-ended. Open-ended questions are questions requiring
answers in the responders own words. Closed-ended questions are those wherein
the respondent has to merely check the appropriate answer from a list of options
available. Any doubts raised by the respondents were clarified to get the perfect
answers from the distributors. Opened questions yielded more insightful

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information, whereas closed-Ended questions were relatively simple to tabulate

and analyze.
FIELD WORK:
An interview-schedule and well-structured questionnaire is administered to the
target respondents to collect primary data (Copy of questionnaire is attached in the
appendix) Open and close-ended questions are used in the questionnaire. The
orders of the questions are in such a manner that they begin with simple questions
and lead on the questions that needed more involvement from respondents. The
secondary data are collected from periodicals, magazines, journals and Internet.
OPERATIONAL DEFINITIONS OF THE STUDY
Marketing:
Marketing is a social and managerial process by which individuals and group
obtain what they need and want through creating, offering and exchanging
products of value with others.
Marketing Management:
Marketing Management is the process of planning and executing the conception,
pricing, promotion and distribution of individual and organizational goals.
Marketing Research:
Marketing research is the systematic and objective search for, and analysis of
information relevant to the identification and solution of any problems in the field
of marketing.
Consumer Research:
Consumer research is the methodology used to study consumer behaviour.
Consumer Behaviour:

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Consumer behaviour is the study of how individuals make decisions to spend their
available resources [time, money, efforts] on consumption related items.
Market Segmentation:
Market segmentation is the process of dividing a market in the distinct subsets of
consumer with common needs or characteristics and selecting one or more
segments to target with distinct marketing mix.

Positioning:
Positioning is the act of designing the companys offering and image so that they
occupy a meaningful and distinct competitive position in the target consumers
mind.
Perception:
Perception is the process by which an individual selects, organizes, and interprets
information input to create a meaningful picture of the world. For a marketer to
influence a motivated buyer to buy their products rather than competitors they
must be careful to take the perception process into account while designing their
marketing campaigns. Perception therefore influence what product consumer buys.
Attitude:
An attitude is a person enduring favorable or unfavorable evaluation, emotional
feeling, and action tendencies towards some object or idea.
Attributes:
Attributes are the strengths and weaknesses of a brand that create attitudes and are
used by consumers to choose between brands that are relatively similar or
functionally equivalent.

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Values:
A value is a concept of the desirable. An internalized standard of evaluation a
person possession.This standard determines or guide an individual evaluation of
the many objects encountered in everyday life.
Brand:
A brand is a name, term, sign, symbol, or design or a combination of them, used to
identify the goods or services of one seller or group of seller and the differentiate
them from those of competitors.

LIMITATIONS OF THE STUDY

Although the study was carried out with extreme enthusiasm and careful planning
there are several limitations, which handicapped the research viz.
Time Constraints:
The time stipulated for the project to be completed is less and thus there are
chances that some information might have been left out, however due care is taken
to include all the relevant information needed.
Sample size:
Due to time constraints the sample size was relatively small and would definitely
have been more representative if I had collected information from more
respondents.
Accuracy:
It is difficult to know if all the respondents gave accurate information; some
respondents tend to give misleading information.

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CHAPTER-3

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PROFILE OF THE INDUSTRY

INSURANCE AND BUSINESS ENVIRONMENT
Insurance is considered as one of the important segment of the economy for its
growth and development. This industry provides long term funds which are
essential for the growth and development of the nation .so the growth of insurance
industry largely depends up on the environment in which they exists. Here I would
like to mention about Indian business environment and their impact on insurance
sector. There are two type of environment which affect the business one is
environment which is internal to the organization (internal environment) and the
other one which is external to the organization (external environment). Internal
environment

includes

management,

technology,

competitors,

employees,

shareholders, policyholders, marketing intermediary etc. The external environment

of insurance business has been classified in four parts, namely legal, economic,
financial, and commercial. let us discus them in detail by taking one by one.
THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(IRDA)
The Malhotra Committee felt the need to provide greater autonomy to insurance
companies in order to improve their performance and enable them to act as

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independent companies with economic motives. For this purpose, it had proposed
setting up an independent regulatory body- The Insurance Regulatory and
Development Authority. Based on the Malhotra committee report in April 2000
IRDA was incorporated. Since being set up as an independent statutory body the
IRDA has put in a framework of globally compatible regulations. Section 14 of the
IRDA Act 1999, lays the duties, power and functions of the authority .the authority
shall have the duty to regulate, promote and ensure orderly growth of the insurance
business and reinsurance business.
Reforms and Implications
The liberalizations of the Indian insurance sector has been the subject of much
heated debate for some years. The sector is finally set to open up to private
competition. The Insurance Regulatory and Development Authority bill will clear
the way for private entry into insurance, as the government is keen to invite private
sector participation into insurance. To address those concerns, the bill requires
direct insurers to have a minimum paid-up capital of Rs. 1billion, to invest
policyholders funds only in India; and to restrict international companies to a
minority equity holding of 26 percent in any new company. Indian Promoters will
also have to dilute their equity holding to 26 percent over -year period. Over the
past three year, around 30 companies have expressed interest in entering the sector
and many foreign and Indian companies have arranged alliances. Whether the
insurer is old or new, private or public, expanding the market will present

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challenges. A number of foreign Insurance Companies have set up representative

offices in India and have also tied up with various asset management companies.
Some of the Indian companies, which have tied up with International partners, are.

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Indian Partners

International Partners

Bombay Dyeing

General Accident, UK

Tata

American Int. Group, US

Dabur Group

Liberty Mutual Fund, US

ICICI

Prudential, UK

Sundaram Finance

Winterthur Insurance, Switzerland

Hindustan Times

Commercial Union, UK

Ranbaxy
HDFC

Cigna, US
Standard Life, UK

CK Birla Group

Zurich Insurance, Switzerland

DCM Shriram

Royal Sun Alliance, UK

Godrej

J Rothschild , UK

M A Chidambaram

Met Life

Cholamandalam

Guardian Royal Exchange, UK

SK Modi Group

Legal and General, Australia

20th Century Finance

Canada Life

PROFILE OF THE ORGANISATIONS:

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MET LIFE INSURANCE COMPANY

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife,
Inc. and was incorporated as a joint venture between MetLife International
Holdings Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited
and other private investors. MetLife is one of the fastest growing life insurance
companies in the country. It serves its customers by offering a range of innovative
products to individuals and group customers at more than 700 locations through its
bank partners and company-owned offices. MetLife has more than 55,000
Financial Advisors, who help customers achieve peace of mind across the length
and breadth of the country. MetLife Inc., through its affiliates, reaches more than
70 million customers in the. Americas, Asia Pacific and Europe. Affiliated
companies, outside of India, include the number one life insurer in the United
States (based on life insurance inforce), with over 140 years of experience and
relationships with more than 90 of the top one hundred FORTUNE 5001
companies. The MetLife companies offer life insurance, annuities, automobile and
home insurance, retail banking and other financial services to individuals, as well
as group insurance, reinsurance and retirement and savings products and services
to corporations and other institutions.
For almost 137 years, Metropolitan Life Insurance Company has been
insuring the lives of the people who depend on them. Their success is based on
their long history of social responsibility, strong leadership, sound investments, and
innovative products and services. MetLife Begins The origins of Metropolitan Life
Insurance Company (MetLife) go back to 1863, when a group of New York City
businessmen raised $100,000 to found the National Union Life and Helping and
Healing People In 1909, MetLife Vice President Haley Fiske announced that
"insurance, not merely as a business proposition, but as a social program" would be

68

the future policy of the company Supporting Country and Community Over the
years, MetLife has made a difference by supporting urban renewal projects and
community financing. The company's social commitment and its commitment to
the security of its policyholders have proven to be good business. MetLife Today
In 2010 MetLife is the first insurance company to establish a financial holding
company with a nationally chartered bank. Products Offered by the company are
1) Whole Life
Met 100 Non par
Met 100 Gold par
Met 100 Platinum par
2) Endowment

Met Gold par

Met Platinum par
Met Junior par
Met junior Non par
3) Money Back

Met Sukh
Met Junior MB

4) Term
Met Mortagage Protector
Met Riders
Accidental death
5) ULIP
Met smart platinum
Met smart one
ABOUT ULIP

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When people how investments in the capital market have grow over the last few
years, they prefer to use their funds in ways that help them to participate in the
boom in the capital market. Insurers have developed plans that combine the
benefits of life insurance as well as giving various options of participating in the
growth of the capital market. Such plans are called Linked Life insurance plans.
They are also called Unit Linked Insurance Plans or ULIPs, in short. A ULIP is a
life insurance policy which provides a combination of life insurance protection and
investments. ULIPs contribute nearly 50% of the premium from some insurers and
more than 85% of the premium for some others.
In linked policies, the SA may be expressed as an integrated benefit, which means
that on the happening of the event, the SA or the value of units in the fund,
whichever is higher, is payable. In this case, the life cover will reduce as the value
of the units increases. As the risk cover decreases, the premium adjusted towards
the cover will decrease and the amount allocated to investments will increase.
The alternative to the integrated benefit, is to pay a fixed SA as an additional
benefit on death, in addition to the value of the units in the fund. In this case, the
charge for the risk cover will increase and the allocation to the fund will decrease
every year. This is sometimes called the Double Death Benefit Insurers offer
policy holders a choice of funds in which their moneys may be invested like:Equity Funds: in this type of fund, some times also called Growth Funds, there
would be more investments in equities which are shares / sticks traded in the stock
market.

68

Debt Funds: in this type of fund, also called Bond Funds, the investments are
primarily in government and government guaranteed securities and such safe debt
and other high investment grade cooperate bonds.
Money Market Funds: in this type of fund, sometimes also called Liquid funds,
the investment may be more in short- term money market instruments such as
treasury bills, commercial papers, etc.
Balanced Funds: in this type of funds, the investments are in both equity as well
as debt.
The two types of ULIP product of Metlife India Insurance Co. Ltd. Are as
follows:
A.MET SMART PLATINUM :You have always wanted the best for yourself in life. Not surprisingly, your wealth
creation & protection needs, which keep changing with your life stage, also
deserve the best. Met Smart Platinum, a Unit Linked Plan gives you the platinum
edge by providing you with a complete control over your investments.
TRANSPARENCY

There are no hidden charges attached to your investment.

WEALTH CREATION

Competitive charges along with an option to pay-up premiums allows you to

generate wealth for your financial goals

Eligibility Criteria

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Minimum Age at Entry (LBD#)

7years

Maximum Age at Entry (LBD)

70 years

Premium Payment Term (Years)

5 pay/ 10 pay / entire term of the policy

Minimum Annualized Premium in Rupees

30,000 for annual mode 60,000 for other

modes

Premium Payment Modes

Annual, Semi-annual, Monthly, Quarterly

Flexibility
This feature of increase or decrease in Sum Assured allows you to customize this
plan as per your changing life-stage needs and lets you be in control.
Innovative Auto Rebalancing
Capitalize on opportunities arising out of market movements, while staying
protected from the market downside.
Death Benefit*
In case of unfortunate demise of the insured, the benefit payable will be higher of
the Sum Assured (reduced by applicable partial withdrawals) or Fund Value or
105% of the total premiums paid under the policy.
Maturity Benefit*
The policy matures at the Insured attaining 99 years of age and the benefit
payable is the total Fund Value under the policy.

B.Met Smart One

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Unit Linked life Insurance Plan (Non-Par) You work hard to fulfill your family
dreams and wish everything that is best for them, whether it is your childrens
education or your childs marriage or buying your childs marriage or buying your
dream house. We at MetLife understand that your hard earned money should work
equally harder for you. Hence we bring to you Met Smart One, Which is
investment cum protection single premium plan which along with its various
investment management options facilitates accelerated wealth creation with
Loyalty Additions.

Key Benefits of Met Smart One

Single pay investment cum protection plan
Choice of 7 Funds including NAV Guarantee Fund
2 Investment Strategies Auto Rebalancing option and Self Managed option
Unique stop Loss Option to protect you from market downswings
Accelerated wealth creation with Loyalty Additions.
Liquidity with partial Withdrawals
Death Benefit: In case of any unfortunate demise of the insured, Death
Benefit will be paid as defined in Death Benefit section
Maturity Benefit: At the time of maturity, you will receive the Total fund
Value
Enhanced protection with Accidental Death Benefit Rider
Tax Benefit as per Income Tax Act 1961 ( Please refer to Tax Benefit
Section for details.

68

Your Benefits in Detail

Choice of 2 Investment Strategies
Met Smart One offers you 2 investment strategies to manage your investments
1. Self Managed Option
2. Auto Rebalancing Option

1. Self Managed Option

In case you feel that you can actively manage your portfolio, then this option is
best suited for you. Under this investment strategy, you may manage your
investments by choosing among the 7 Unit-Linked Fund options available under
this plan. You have an option of switching among various Funds depending on
your changing risk appetite and market condition.

68

68

NAV Guarantee Fund (NGF)

The NAV Guarantee Fund (NGF) is a Unit-Linked Fund option that provides you
minimum guaranteed Net Asset Value at the end of 5 year period (called as lock-in
period) from the period of subscription. The guarantee is applicable on the Units
remaining in the Unit Account attached to this Fund at the end of lock-in period.
No Guarantee is applicable if the amount is withdrawn (i.e. surrender or benefit
payout) out of this Fund before expiry of the five year period. However, if death or
maturity coincides with the last day of the lock-in period, the guaranteed NAV
will be applied to arrive at the death and maturity benefit. The NGF would be a
limited period offer and would be available in tranches. At the launch of each
tranche, the Net Asset Value of the Fund would be Rs. 10. Subscription to a tranche
of the NAV Guarantee Fund (NGF) would terminate on a specified date. Each
tranche would terminate at the end of 5 years from the date of close of
subscription. The minimum guarantee applicable for the NAV Guarantee Fund will
be specified at the beginning of the subscription period.
How does NGF work ?
If you opt for the NGF at any time, provided the Fund is open for
subscription the entire single premium, net of allocation charges is invested
in the NGF
During the subscription period, daily NAV of this Fund would be declared
The fund will be invested in money market instruments for the period of
subscription
Subscription into this fund will be allowed only if the minimum remaining
term of the Policy is at least 5 years plus the subscription period

68

 At the end of the 5 years from the subscription period, the Fund would
reallocate the monies into the other Funds as per the choice of the customer
or if no choice is made by the maturity date, then the allocation will be made
in the fund proportion then existing
If the Policy is surrendered before the end of the term of the NGF, the NGF
Units are encashed at the NAV as on that date. The guarantee will cease to
apply on surrender
Kindly visit our website or contact our call center or visit our nearest branch
regarding the NGF availability and the applicable guaranteed NAV
(2) Auto Rebalancing Option
This option is suitable for you if you do not want to manage your investment
portfolio directly on a regular basis. Under this option, your Funds are allocated
in the Flexi Cap Fund and the Protector II Fund in the proportions as per your
choice which you can exercise at the time of opting for the Auto Rebalancing
Option. In case of any market movement, to a trigger level as specified by you,
the mix of Flexi Cap Fund & Protector II Fund is automatically rebalanced to the
ratio chosen by you at inception. This ensures that your investment portfolio
stays exactly the way you wanted it to without you having to keep an eye on
it on a regular basis by capping off gains of one fund into the other or taking
larger exposure into one fund on market dips.Under this investment strategy, you
may choose your premium allocation only between 2 Unit-Linked Fund options as
given below.

1) Flexi Cap Fund

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2) Protector II Fund
The minimum allocation should be 20% in either of the Funds and total of both
the Funds should always be 100%. As this strategy works on the trigger levels,
you are required to choose between 4 rebalancing options available, which will
be the trigger levels for rebalancing and they are as follows:
1) 10% of Total Fund Value
2) 15% of Total Fund Value
3) 20% of Total Fund Value
4) 25% of Total Fund Value
This option works as follows:
You choose the allocation between Flexi Cap and Protector II Fund
depending on your risk appetite. For e.g. in case your risk appetite is lower
you may choose a ratio of 70%:30% between Protector II Fund & Flexi Cap
Fund respectively or in case of higher risk appetite you may choose a ratio
of 80%:20% between Flexi Cap Fund and Protector II Fund respectively.
You are also required to choose the trigger level as mentioned above
In case the chosen allocation between Flexi Cap and Protector II Fund is
80%:20% respectively and the chosen trigger level is 10%, then for any 10%
increase or decrease in Total Fund Value, a rebalancing between Flexi Cap
and Protector II Fund will be initiated to the extent of restoring the ratio
between Flexi Cap Fund and Protector II Fund as chosen by you at inception
(i.e. 80% in Flexi Cap Fund and 20% in Protector II Fund)
You can choose to opt in or out of this strategy once in a Policy Year free of
charge. Any subsequent change of the strategy in a given Policy Year will be
charged Rs. 250 per strategy switch

68

 In case of any new transaction such as Payment of Top-up Premiums your

premiums will be allocated in the same proportions as prevailing at that time
In case of Partial Withdrawals, the Fund withdrawals will happen in the
same proportions prevailing at that time
No switching is allowed while Auto Rebalancing option is active, however
in case you opt out of the strategy, you may opt for Fund Switching
You can choose to stop this option anytime and can reallocate the remaining
Units in any fashion amongst the other Fund available under the Self
Managed Option. However, if you have chosen to discontinue this option,
you can restart it only once in a Policy Year free of cost. In case of any
subsequent opt-in into this strategy a fee of Rs. 250 will be charged
This option will not be available as long as any proportion of the
Policyholder monies are invested in NGF
Stop Loss Option
To cap off downside risk, you may opt for a Stop Loss Option on the Flexi Cap
Fund. This facility is available on both Single Premium and Top-up Premium
amounts invested in Flexi Cap Fund. To avail this option, you will be required to
choose a Stop Loss level of 10%, 15%, 20%, 25% or 30% of Net Asset Value of
Flexi Cap Fund (NAV). If the NAV of the Flexi Cap Fund falls to the Stop Loss
level, the Funds would be automatically switched to Protector II. This switch will
not be counted amongst the free switches available under the plan. You will be
allowed to change the Stop Loss percentage, change the base NAV for tracking the
Stop Loss and opt in for the Stop Loss Option once free every Policy Year
post which charges as defined under Miscellaneous Charges would be applicable.
However these charges will not be applicable if applied through the internet.

68

The minimum Fund allocation in Flexi Cap Fund to avail this option has to be
50%. Example: If the NAV at the time of entry is Rs. 10 and the Stop Loss level
chosen is 10%, then on the NAV breaching Rs. 9, the Units in the Flexi Cap Fund
would be switched to the Protector II Fund. However, if the NAV continues to rise
to Rs. 12, the strategy by itself will not do anything. You can however switch back
to Flexi Cap Fund. You can also change the base for the purpose of the Stop Loss
tracking from Rs. 10 to Rs. 12. When such an activity is initiated, 10% downside
would need to be tracked from Rs. 12 NAV. Both the above transactions will
continue to be free of cost if done online.
Death Benefit
In the unfortunate event of your demise, while the Policy is in force & before the
maturity date, your nominee will get the following Death Benefit.
i) If the death of the Person Insured occurs before the attainment of age 60
The Death Benefit payable will be higher of :
The Single Premium Fund Value (the value of Units pertaining to Base
Premium Account), or
The Base Sum Assured less all Partial Withdrawals (excluding any
withdrawals made from Top-up Premium Account), made in accordance
with the Partial Withdrawal provisions in the last 24 months preceding the
date of death of the Person Insured or 105% of the total Single Premium
paid

ii) If the death of the Person Insured occurs on or after the attainment of age
60

68

 The Death Benefit payable will be higher of:

The Single Premium Fund Value (the value of Units pertaining to Base
Premium Account) or
Base Sum Assured less all Partial Withdrawals (excluding any withdrawals
made from Top-up Premium Account) made in accordance with the Partial
Withdrawal provisions, during the last 24 months immediately preceding the
date of death or all Partial Withdrawals made in accordance with the Partial
Withdrawal provisions post attainment of age 60, whichever is higher or
105% of the Single Premium paid In addition to any of i) or ii) above, and
provided Top-up Premiums are paid the higher of:
The Top-up Fund Value (the value of Units pertaining to Top-up Premiums)
or
Top-up Sum Assured (less any Partial Withdrawals from Top-up Fund Value,
as per Partial Withdrawal provisions before and after age 60, as stated
above)
105% of the total Top-up Premiums paid shall also be payable.
Maturity Benefit & Settlement Option
On maturity of the Policy, you will receive the Total Fund Value as on the maturity
date. If you wish to defer your maturity proceeds, you may choose to do so with
the Settlement Option.
1. Under this option, you may choose to take your Total Fund Value in installments
within 5 years from the date of maturity or choose a combination of part lump sum
and part installment
2. At anytime during the settlement period you can take the outstanding Fund
Value by terminating the Policy
3. If you choose the settlement option, you will have to bear the risks involved

68

in the Unit-Linked Funds. The number of withdrawals in any calendar year

would be limited to 12. The minimum withdrawal during the Settlement
Option should be 5% of the Fund Value
4. The life insurance cover during this period would not be applicable, and in
case of death of the Policyholder during this period, the Fund Value as on
that date shall be paid, and the Policy will be terminated
5. If you wish to opt for the Settlement Option, you need to inform the
Company at least 90 days prior to the date of maturity
6. The Fund in Settlement Option will be subject to Policy Administration and
Fund Management Charges as defined under Your charges section. No
other charges will be deducted during the settlement period
Liquidity with Partial Withdrawals
You have the option to withdraw monies from your Policy to meet your liquidity
needs in case of any emergency after 5th Policy Anniversary. The minimum
amount of Partial Withdrawal should be Rs. 5,000 and the maximum amount of
Partial Withdrawal should not exceed 5% of the Total Fund Value. The Total Fund
Value after any withdrawal should be at least equal to 30% of the Single Premium.
You may make one Partial Withdrawal in a Policy Year (either from Single
Premium or Top-up Premium Account) free of charge. Partial Withdrawals are
allowed first from the Topup Premium Account and then from the Single Premium
Account. No Partial Withdrawals are allowed from the NAV Guarantee Fund.In
addition to the life cover, you may choose to enhance protection by opting for the
Accident Death Benefit Rider (117A011V01).The Premiums towards this rider will
be recovered by deducting Units from the Fund You will be eligible for Loyalty
Additions under the Policy subject to your Policy being in force. Loyalty Additions
(expressed as a % of the Average Single Premium Fund Value)

68

will be credited to your Policy at the end of every Policy Year from year 6 to year
10 (i.e. for five years). The percentage of Loyalty Addition varies in accordance
with the size of the Single Premium, as shown in the table below: Fund Value
Less than 50,000 0.0%
50,000 to 99,999 0.4%
1,00,000 to 1,99,999 0.6%
2,00,000 to 3,99,999 0.8%
4,00,000 to 5,00,000 1.0%
The Average Single Premium Fund Value taken for Loyalty Additions is the
average of Fund Values over last 36 months from the date of calculation.
Top-up Premiums will not be eligible for Loyalty Additions. NAV Guarantee will
not be available on the Units allocated through Loyalty Additions. manage my
Flexibility to add Top-up Premiums
You have the flexibility to make additional investments (over and above the Single
Premium) with the help of Top-up Premiums, anytime during the coverage term.
The minimum amount of a single Top-up Premium is Rs. 5,000. There is no
maximum limit on Top-up Premiums. With every Top-up Premium, there will be
an increase in Sum Assured, which will be to the extent of 125% of the Top-up
Premiums made. There are no maximum Limits on the Top-up Premiums.
Any Top-up Premiums paid would not be eligible for Partial Withdrawals for five
years from the date of such payment. Top-up Premiums are not allowed during last
5 years of the Policy Term. Top-up Premiums will not be allowed to be invested in
any series of tranches of NAV Guarantee Fund. However, if the entire Single
Premium is invested in NAV Guarantee Fund, Top-up Premiums will be allowed to
be invested in other Funds.
Maturity Benefit & Settlement Option

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On maturity of the Policy, you will receive the Total Fund Value as on the maturity
date. If you wish to defer your maturity proceeds, you may choose to do so with
the Settlement Option.
1. Under this option, you may choose to take your Total Fund Value in
installments within 5 years from the date of maturity or choose a combination
of part lump sum and part installment
2. At anytime during the settlement period you can take the outstanding Fund
Value by terminating the Policy
3. If you choose the settlement option, you will have to bear the risks involved
in the Unit-Linked Funds. The number of withdrawals in any calendar year
would be limited to 12. The minimum withdrawal during the Settlement
Option should be 5% of the Fund Value
4. The life insurance cover during this period would not be applicable, and in
case of death of the Policyholder during this period, the Fund Value as on
that date shall be paid, and the Policy will be terminated
5. If you wish to opt for the Settlement Option, you need to inform the
Company at least 90 days prior to the date of maturity
6. The Fund in Settlement Option will be subject to Policy Administration and
Fund Management Charges as defined under Your charges section. No
other charges will be deducted during the settlement period

Liquidity with Partial Withdrawals

You have the option to withdraw monies from your Policy to meet your liquidity

68

needs in case of any emergency after 5th Policy Anniversary. The minimum
amount of Partial Withdrawal should be Rs. 5,000 and the maximum amount of
Partial Withdrawal should not exceed 5% of the Total Fund Value. The Total Fund
Value after any withdrawal should be at least equal to 30% of the Single Premium.
You may make one Partial Withdrawal in a Policy Year (either from Single
Premium or Top-up Premium Account) free of charge. Partial Withdrawals are
allowed first from the Topup Premium Account and then from the Single Premium
Account. No Partial Withdrawals are allowed from the NAV Guarantee
Fund.Enhanced protection with Accident Death Benefit Rider
Enhanced protection with Accident Death Benefit Rider
In addition to the life cover, you may choose to enhance protection by opting for
the Accident Death Benefit Rider (117A011V01).The Premiums towards this rider
will be recovered by deducting Units from the Fund.oyalty Additions
Loyalty Additions
You will be eligible for Loyalty Additions under the Policy subject to your Policy
being in force. Loyalty Additions (expressed as a % of the Average Single
Premium Fund Value) will be credited to your Policy at the end of every Policy
Year from year 6 to year 10 (i.e. for five years). The percentage of Loyalty
Addition varies in accordance with the size of the Single Premium, as shown in the
table below:

Single Premium Band (in Rs)

Loyalty Additions as a % of Average

Single
Premium Fund Value

68

Less than 50,000

0.0%

50,000 to 99,999

0.4%

1,00,000 to 1,99,999

0.6%

2,00,000 to 3,99,999

0.8%

4,00,000 to 5,00,000

1.0%

The Average Single Premium Fund Value taken for Loyalty Additions is the
average of Fund Values over last 36 months from the date of calculation. Top-up
Premiums will not be eligible for Loyalty Additions. NAV Guarantee will not be
available on the Units allocated through Loyalty Additions.
How can I manage my Investments ?
Flexibility to add Top-up Premiums
You have the flexibility to make additional investments (over and above the Single
Premium) with the help of Top-up Premiums, anytime during the coverage term.
The minimum amount of a single Top-up Premium is Rs. 5,000. There is no
maximum limit on Top-up Premiums. With every Top-up Premium, there will be
an increase in Sum Assured, which will be to the extent of 125% of the Top-up
Premiums made. There are no maximum Limits on the Top-up Premiums. Any
Top-up Premiums paid would not be eligible for Partial Withdrawals for five
years from the date of such payment. Top-up Premiums are not allowed during last
5 years of the Policy Term.
Top-up Premiums will not be allowed to be invested in any series of tranches of
NAV Guarantee Fund. However, if the entire Single Premium is invested in NAV
Guarantee Fund, Top-up Premiums will be allowed to be invested in other Funds.
Flexibility of switching between Unit-Linked Funds
You may wish to use this benefit to lock growth in your investments. You have the

68

benefit to switch partially or fully between the available Unit-Linked Fund options,
at any point of time during the coverage term. You will have the benefit of 4 (four)
free switches in every Policy Year, post which every switch in a Policy Year would
be levied a charge of Rs. 250. The minimum value of every switch should be Rs.
5,000. This facility is not allowed in case Auto Rebalancing option is chosen. No
switches are allowed from the NAV Guarantee Fund.
Surrender Benefit
The Policyholder may opt to surrender the Policy at any time after the first 5 years
of the Policy Term. Upon surrender of a Policy, the Total Fund Value will be
payable upon processing the surrender request. No surrender is allowed during the
first 5 years of the Policy Term (lock-in period). No Surrender Charges are
applicable under the Policy. In exceptional circumstances, the Company may defer
the surrender of the Policy for a period not exceeding 30 days from the date of
application with prior approval from IRDA. Examples of such circumstances are:
1. When one or more stock exchanges which provide a basis for valuation for a
substantial portion of the assets of the Fund are closed other than for ordinary
holidays.
2. When, as a result of political, economic, monetary or any circumstances that are
out of the control of the Company, the disposal of the assets of the Unit-Linked
Fund(s) are not reasonable or would not reasonably be practicable without being
detrimental to the interests of the remaining Policyholders invested in the UnitLinked Fund(s)
3. During periods of extreme volatility of markets resulting into non-valuation
of Funds, during which surrenders would, in our opinion, be detrimental
to the interests of the existing Policyholders invested in the Unit-Linked
Fund(s)

68

4. In case of natural calamities, strikes, war, civil unrest, riots and bandhs
5. In event of any force majeure or disaster that affects our normal functioningther
Free Look Period
You have a period of 15 days from the date of receipt of the Policy Document
to review the terms and conditions of this Policy. If you have any objections to
any of the terms and conditions, you have the option to return the Policy stating
the reasons for the objections and you will be refunded an amount equal to
nonallocated premiums plus charges levied through cancellation of Units plus Fund
Value at the date of cancellation subject to deduction of expenses towards medical
examination, stamp duty and proportionate risk premium for the period of cover.
Met Smart One at a Glance
Boundary Conditions

Eligibility Criteria

Minimum Age at Entry (lbd)

Maximum Age at Entry (lbd)
Minimum / Maximum Age at Maturity
Policy Term
Minimum Premium
Maximum Premium
Sum Assured Multiple

0 Years (3 months)
65
18 / 75 Years
10-20 Years
18,000
500,000
5 times of SP in the First Policy Year & 1.25
times of
SP for the remaining term of the Policy
Single

Premium Payment Modes

Your Policy Charges

(A) Premium Allocation Charges
This is a Premium-based charge. After deducting this charge from your Single
Premium, the remaining Premium is invested to buy Units. Premium Allocation
Charge will be deducted from the Single Premium received as shown below
Premium Band

Premium Allocation Charge

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Less than 50,000

More than or equal to 50,000

3%
2%

The Premium Allocation Charge for Top-up Premium is 2.0%

(B) Policy Administration Charges
The following Policy Administration Charge would be deducted by cancellation
of Units on a monthly basis .
Policy Year

Policy Administration
Charge as a % of
Single Premium

Year 1 to 5

0.10% per month

Year 6 and above

NA

The Policy Administration Charge would be deducted from the Unit-Linked Funds
by cancellation of appropriate number of Units from the Fund Value. If you have
chosen Settlement Option, you will be charged a Policy Administration Charge of
Rs. 40 per month during the Settlement Period.

(C) Mortality Charges

Mortality Charge will be deducted at the beginning of each month by cancellation
of an appropriate number of Units at the relevant Net Asset Value. Mortality
Charge will be based on the Age of the Person Insured, Cost of Insurance (CoI) and
the applicable Sum Assured.
For Single Premium
The calculation method will be as follows:

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Mortality Charge = (Sum at Risk / 1000) * Cost of Insurance (CoI)

The Sum at Risk is defined as the Death Benefit (as defined in the Benefits section)
Minus the Fund Value (relating to Single Premium Account).
For Top-up Premium
Mortality Charge = (Sum at risk / 1000)*Cost of Insurance (CoI)
The Sum at Risk is defined as the Death Benefit (as defined in the Benefits section
for Top-up Premium Account) minus the Fund Value (relating to Top-up Premium
Account) in the Unit Account.
The sample monthly Cost of Insurance per 1000 Sum at Risk is as below:
Age/Gender
Male
Female

20 Years
0.110067
0.097067

30 Years
0.126804
0.125938

40 Years
0.215000
0.165700

These charges would be deducted at the beginning of each month by cancellation

of an appropriate number of Units at the relevant Net Asset Value.
(D) Fund Management Charges
These charges are adjusted while calculating the Net Asset Value of the UnitLinked Funds each day. Following are the applicable charges for different Funds.

Fund Option
Preserver II
Protector II
Balancer II
Virtue II
Multiplier II
Flexi Cap
NAV Guarantee Fund**

Charges
1.00% p.a.
1.00% p.a.
1.15% p.a.
1.25% p.a
1.25% p.a.
1.25% p.a
1.25% p.a

** The Fund Management Charges are 1.05% p.a. plus Cost of Guarantee of
0.20% p.a.

68

(E) Rider Premium Charge for Accidental Death Benefit Rider (ADB)
The Rider Premium Charges are deducted from Fund Value by adjusting number
of Units in the Unit Account. Service Tax and Education Cess on Rider Premium
will also be applicable at the rates then applicable.
(F) Switching Charge
The first four (4) switches between Funds in a Policy Year will be free of any
charge Thereafter a charge of Rs. 250 per switch will be levied. The switching
charges will be deducted by cancellation of Units of appropriate value from the
Fund Value.
(G) Partial Withdrawal Charge
One Partial Withdrawal in a Policy Year either from Top-up Fund or Single
Premium Fund will be free of any charge. For each subsequent Partial
Withdrawal in a Policy Year, a charge of Rs. 250 would be levied. The Partial
Withdrawal Charge will be deducted by cancellation of Units of appropriate
value from the Fund Value.
(H) Miscellaneous Charge
The Company has the option to charge Rs. 250 for any alterations requests
including but not limited to following list of alterations.
The Miscellaneous Charge will be deducted by cancellation of appropriate
number of Units using the relevant Net Asset value of these Units.
1. Change in Name or Date of Birth or Address or Contact Details of Person
Insured / Policyholder
2. Issue of Duplicate Policy Document on request from the client
3. Change / updation of name or other particulars of Nominee / Appointee /
Assignee
4. Cheque bounce / cancellation of cheque / cancellation or fresh request for

68

ECS
5. Re-dispatch of Policy Document or other particulars due to incorrect or
outdated address details provided by client
6. Request for adhoc or additional Unit statement by client
7. Change in Bank details / Fund transfer requests for settlement of claims
8. Change in amount or frequency or option during settlement period
9. Switch in and out of Auto Rebalancing Strategy, change in trigger levels and
premium allocation proportion
10. Switch in and out of Stop Loss Option
(I) Service Tax Charge
This charge as notified by the Government from time to time will be made by
cancellation of appropriate number of Units at the relevant Net Asset Value.
Service Tax would be applied only on Mortality Charges and Fund Management
Charges currently. Service Tax on Fund Management Charge is applied at the
time of declaration of daily NAV on an FMC of 1.35%p.a., as specified by the
Government currently or the actual FMC if it is higher than 1.35% p.a.
In the event that in any given year, the number of Units in the Unit Account is
insufficient to enable the Company to recover the tax amount, the Company
reserves its right to recover such outstanding tax amount from the Unit Account
in the following years. MetLife reserves the right to recover any taxes imposed
by any governmental authorities from the Policyholders Fund Value.
Note: The Company reserves the right to increase / decrease any of the above
Miscellaneous
Charges subject to an upper limit of Rs.2,000 with prior approval from the IRDA.
Tax Benefits
Tax benefits under this plan are available as per the provisions and conditions of
the Income Tax Act, 1961 and are subject to any changes made in the tax laws in

68

future. Please consult your tax advisor for advice on the availability of tax benefits
for the premiums paid and proceeds received under the Policy for more details.
Suicide Clause
In the event the Person Insured commits suicide, whether sane or insane at that
time, within one year from the date of commencement or date of policy issue or the
date of the last reinstatement whichever is later, we shall not be liable to pay the
Sum Assured, except refund of the Fund Value.
Policy Loan
We may, at our discretion, offer Policy loan facility under this Policy as per the
interest rates and conditions laid out by us from time to time. This facility will be
available only after completion of 2 Policy Years and subject to the following
limits:
Minimum limit: Rs. 5,000
Maximum limit:
i) 40% of the Surrender Value (i.e. Total Fund Value), if equity proportion is
more than 60% of the Total Fund Value at Policy level
ii) 50% of the Surrender Value (i.e. Total Fund Value), if proportion of debt
instruments is more than 60% of the Total Fund Value at Policy level
No Loan will be provided if monies are invested in NAV Guarantee Fund.
For more details on Policy Loan, please contact our representative or nearest
MetLife branch.
Auto Foreclosure
In the event, the Total Fund Value reaches 20% of the Single Premium after
completion of 5 Policy Years, the Policy will terminate and the total Fund Value
will be paid to you.
Risks Inherent in the Unit-Linked Funds

68

Due to the nature of the Unit-Linked Funds, the Company does not guarantee the
price of the Units of any of the Unit-Linked Funds offered by it. Unit-Linked Life
Insurance products are different from the traditional insurance products and are
subject to the risk factors.
The Insured (and the Policyholder, if different) is aware that the investment in
Units is subject, interalia (amongst others), to the following risks:
The investments in the Units are subject to market and other risks and there
can be no guarantee that the objectives of any of the Unit-Linked Funds will
be achieved. The Unit-Linked Funds do not offer a guaranteed or assured
return.
The premium paid in Unit-Linked Life Insurance Policies are subject to
investment risks associated with capital markets. The Fund Value of each of
the Unit-Linked Fund can go up or down depending on the factors & forces
affecting the financial markets from time to time including changes in the
general level of interest rates and the insured is responsible for his / her
Decisions
The past performance of the Unit-Linked Fund(s) of the Company is not
necessarily indicative of the future performance of any of these Unit-Linked
Funds
The name of the Product does not in any way indicate the quality of the
product, its future prospects or returns
The names of the Unit-Linked Funds and their objectives do not in any
manner indicate the quality of the fund, their future prospects or returns
benefits payable under the Policy are subject to the tax laws and other
legislations / regulations as they exist from time to time
The following Policy Administration Charge would be deducted by cancellation
The ULIP product of MetLife and its comparison with two companies are as
follows:

68

68

68

CHAPTER -4

ANALYSIS AND INTERPRETATION

INTRODUCTION TO ANALYSIS:

68

In order to extract meaningful information from the data them. The analysis can be
conducted by using simple statistical tools like percentages, averages and measures
of dispersion. Alternatively the collected data may be analyzed, the data analysis is
carried out. The data are first edited, coded and tabulated for analyzing by using
diagrams, graphs, charts, pictures etc. Data analysis is the process of planning the
data in an ordered form, combining them with the existing information and
extracting from them. Interpretation is the process of drawing conclusions from the
gathered data in the study. In this research the researcher has analyzed the data
using percentages and graphs.
DATA ANALYSIS TOOLS USED:
In this research the data analysis tools used are percentages and graphs. The
various attributes were analyzed separately and the importance to each was
calculated on the basis of the percentage. The rank having the maximum
percentage was taken to be preferred importance to the particular attribute. After
looking at each attribute separately, all the attributes were considered together to
develop a map on the most preferred rank for all the attributes.

TABLE 1
AGE OF RESPONDENTS

68

SL.NO

AGE IN YEARS

NUMBER OF
RESPONDENTS

PERCENTAGE OF
RESPONDENTS

1.
2.
3.
4.
5.
6.

19 28
29 38
39 48
49 58
59 68
69 78
TOTAL

24
13
6
6
0
1
50

48 %
26 %
12 %
12 %
0%
2%
100 %

SOURCE :- SURVEY DATA

INFERENCE: The above table classified the respondents according to their age
group. The majority of the respondents belong to the age group 19 to 28 years with
48% and the second age group is 29 to 38 years with 26%, followed by 39 to 48
years and 49 to 58 years with 12% each.

GRAPH 1
AGE OF RESPONDENTS

68

TABLE 2
DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE

TYPES OF
RESPONDENTS

NUMBER OF
RESPONDENTS

PERCENTAGE OF
RESPONDENTS

MALE RESPONDENTS

34

68%

FEMALE
RESPONDENTS

16

32%

TOTAL

50

100 %

SOURCE: - SURVEY DATA

INFERENCE: This table helps us to understand that there are more number of male

consumers with 68% market share than the female consumers with 32% Market
share.

GRAPH 2
DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE

68

TABLE 3
DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION
SL.NO

OCCUPATION

NUMBER OF

PERCENTAGE

68

1.
2.
3.
4.
5.

RESPONDENTS

OF
RESPONDENTS

2
20
24
2
2
50

4%
40 %
48 %
4%
4%
100 %

STUDENTS
GOVERNMENT EMPLOYEES
PRIVATE EMPLOYEES
HOUSE WIVES
RETIRED PERSONS
TOTAL

SOURCE :- SURVEY DATA

INFERENCE: It could be inferred that majority of consumers of life insurance
policies are private employees with 48% and Government employees with 40%,
followed by students, house wives and retired persons with 4 % each.
GRAPH 3

TABLE 4
TABLE SHOWING ATTRIBUTES FROM RESPONDENTS

68

SL.NO
1.

ATTRIBUTE
RETURN ON

RESPONDENTS
17

RANK
1

2.

INVESTMENT
COMPANY

13

3.

REPUTATION
PREMIUM

10

4.

OUTFLOW
SERVICE

5.

QUALITY
PRODUCT

QUALITY

SOURCE :- SURVEY DATA

INFERENCE: This table shows the strengths and weaknesses of the company,
and what are the important criteria or attributes on which decision making is done.
From this table we can infer that consumers give more importance for Return on
investment, secondly they prefer company reputation, and then premium outflow
followed by service quality and product quality.

GRAPH -4

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AMOUNT

1.
2.
3.
4.
5.

< 10000
10000 25000
25000 50000
50000-100000
> 100000

NUMBER OF
RESPONDENTS

PERCENTAGE OF
RESPONDENTS

0
5
8
15
22

0%
10 %
16 %
30 %
44 %

TABLE 5
VALUE OF RESPONDENTS LIFE INSURANCE POLICY

68

SOURCE :- SURVEY DATA

INFERENCE: It can be inferred that majority of consumers buy the life insurance
policy which costs more than Rs. 1,00,000 followed by Rs. 50,000 to Rs.1,00,000,
followed by Rs. 25,000 to Rs. 50,000.
GRAPH-5

TABLE 6
RESPONDENTS PREFERENCE TO INVEST THEIR MONEY

INSURANCE
COMPANY
BANK
TOTAL

NUMBER OF
RESPONDENTS
24

PERCENTAGE OF
RESPONDENTS
48 %

26

52 %

50

100 %

68

SOURCE :- SURVEY DATA

INFERENCE: From the table it is clear that majority of people (52%) prefer to
invest in Bank and others (48%) prefer to invest in Insurance companies.
GRAPH-6

TABLE 7
SATISFACTION OF RESPONDENTS WITH CURRENT LIFE INSURANCE
RESPONSE

COMPANY
NUMBER OF
RESPONDENTS

PERCENTAGE OF
RESPONDENTS

YES
NO
TOTAL

47
3
50

94 %
6%
100 %

SOURCE :- SURVEY DATA

68

INFERENCE: From this table it could be inferred that 94% of the consumers are
satisfied with the service and quality of products of their life insurance companies.
Only 6% of consumers are not satisfied.
GRAPH 7

TABLE 8
MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES
COMPANIES
LIC
TATA AIG
HDFC
ICICI
MAX NEWYORK

NUMBER OF
RESPONDENTS

PERCENTAGE OF
RESPONDENTS

39
1
3
4
1

78 %
2%
6%
8%
2%

68

KOTAK MAHINDRA
METLIFE

1
1

2%
2%

SOURCE: - SURVEY DATA

INFERENCE: This table helps us to understand the market share of different life
insurance companies. LIC has a major share of 78 %, followed by ICICI Prudential
with 8% market share, followed by HDFC Standard Life with 6% market share
followed by met life with 2% market share.
GRAPH 8

TABLE 9
RATINGS OF THE SERVICES OFFERED BY THE RESPONDENTS LIFE
INSURANCE COMPANY
RATINGS
NUMBER OF
PERCENTAGE OF
RESPONDENTS
RESPONDENTS
EXCELLENT
VERY GOOD
GOOD
AVERAGE
POOR
TOTAL

7
12
20
11
0
50

14 %
24 %
40 %
22 %
0%
100 %

SOURCE: - SURVEY DATA

68

INFERENCE: From this table it could be inferred that 40% of the consumers have rated service
offered as good, 24% of them have rated them as very good, 22% of them have rated as average
and 14% of them have rated as excellent.
GRAPH 9

68

CHAPTER -5

FINDINGS, CONCLUSION AND SUGGESTIONS

FINDINGS
The majority of respondents belonged to the age group of 19 to 28 years
which formed 48% followed by age group of 29 to 38 years which formed
26%.
The male consumers capture the Market share with 68%, followed by the
female consumers with 32%.
The majority of the consumers of life insurance companies are private
employees with 48% and Government employees with 40%

68

 The dominant income group having life insurance group belong to the group
of 10001 to 15,000 followed by 5,001 to 10,000.
LIC has a major market share of 78%.
The factors which influenced to select a life insurance company is the
personal factor, followed by family, friends, agents and advertisements.
The value of respondents life insurance policy costs more than 1, 00,000
followed by 50,000 to 1,00,000.
Majority of the people (52%) prefer to invest in bank others (48%) prefer to
invest in insurance company.
Majority of consumers are satisfied with the service and quality of products
of their life insurance companies.
Majority of consumers (78%) would like to communicate the service offered
by life insurance companies.
Majority of consumers (58%) are aware about 5 to 7 life insurance
companies.
LIC stands first followed by ICICI prudential, followed by HDFC Standard
Life.

CONCLUSION
An Insurance policy is an investment oriented plan. As compared to other
investment plans, the investment portfolio of the Insurance Policy functions like a
mutual fund and other investment. It is invested in a portfolio of debt and equity
instruments, in conformity with the announced investment policy. Hence it grows
or erodes in line with the performance of that portfolio.

68

From this study it reveals that the consumers attitude towards Insurance
Policy and Insurance Company changed a lot. A 5 years before the consumers and
the general public were not interested to take an Insurance Policy but now days
there are many options and choices in front of the customers. They are interested to
take high return policies in order to secure their lives. People are aware of all the
benefits and returns of insurance policies.
As a result of this new international and domestic companies are coming to
the Indian Market. Since there are many players in the Indian Insurance Market the
competition level is very high. So the companies are introducing new schemes.
From this it is found that The LIC is the major market share holder in the insurance
field. Even if there are many players in this field still it is an untapped market.
Only a few portion of Indian population is insured.

RECOMMENDATIONS AND SUGGESTIONS

With regard to insurance companies, consumers respond at different rates,
depending on the consumers characteristics. Hence Insurance companies
should try to bring their new product to the attention of potential early
adopters.

68

 Due to the intense competition in the life insurance market, the life
insurance companies have to adopt better strategies to attract more
customers.
Keeping the cost, quality and return on investment in tact is necessary in
order to tackle the competition.
Life insurance products are taken mainly by middle and higher income
group. Hence they should be regarded as maim targeted income groups. Life
insurance products which are suitable for lower income group should also
be released so that the market share increases.
Return on investment, company reputation and premium outflow are most
preferred attributes that are expected by the respondents. Hence greater
focus should be given to these attributes.
Private life insurance companies should adopt effective promotional
strategies to increase the awareness level among the consumers.
Life insurance companies should ask for their consumer feedback to know
whether the consumers are really satisfied or dissatisfied with the service
and product of the companies. If they are dissatisfied, then the reasons for
dissatisfaction should be found out and should be corrected in future.

The LIC brand name has earned a lot of goodwill and enjoys a high brand
equity. As there is intense competition in life insurance market, LIC should
work hard to maintain its top position and offer better service and product.
The Company should give more Advisement about the product.

68

 The Company should Target to the person whose Income Less than
Rs20000.
The Company should give more awareness in rural areas through different
ways.
The women awareness programme is necessary.

68