CONTENTS OF THE PROJECT

 Preface

 Certificate from the Organization

 Acknowledgement

 Introduction

 Objectives & methodology

 Industry profile

 Company profile

 Topic taken in the Organization

INCLINATION TOWARDS ULIP
(A Study on security and investment plan)

 Findings

 Recommendations

 Conclusion /summary

 Bibliography

 Annexure

PREFACE

2
 Beginning of the system project is entirely creative. This does not come
all of a sudden, but it comes by result of discussion, consultation and
contemplation. Problem unsolved here can never be satisfactory eliminated
later. It is therefore a slow process.

Moreover practical training is an important part of management

courses. The theoretical studies are not sufficient to get into the corporate
world. Only practical knowledge can help us to understand the complexities of
large scale organizations.

To develop healthy managerial and administration skill in potential

managers, it is necessary that theoretical knowledge must be supplemented
with exposure to the real environment. Actually, it is life for, a management
itself is realized.

In my case I confronted myself to ICICI prudential Life insurance

company Ltd. And the exposure that I could not have gained from the books. I
found it very interesting and challenging. I did my training at JAIPUR branch
office and my topic of project is INCLINATION TOWARDS ULIP with special
reference to ICICI PRUDENTIAL LIFE INSURANCE.

3
Acknowledgement:

A research project is undertaken to study the current marketing scenario of a

particular product at the same time to gain information for future
advancements. However, whenever a research is undertaken by a student, it
requires encouragement and guidance. This much requisite support comes in
the form of individuals, professionals, colleagues and faculty. This
acknowledgement is an effort to recognize these professionals who have
made this research take form.

This project has been made under the through guidance of my faculty guide
Dr. Manju Nair (Principal, IIIM,Jaipur). The additional information has been
collected from various consumers in the city of jaipur.

I am grateful for each and every valuable interaction that helped me to get a
better understanding of the workings forming the crux of my research.

Anuradha Gupta

4
5
 CHAPTER 1

INTRODUCTION

6
 INTRODUCTION

Insurance

Insurance may be described as to protect the economic value of asset. It can

be said to be a system of spreading the losses of an individual over a group of
individuals.
Since it is an intangible product, Insurance Industry is a service
industry. Insurance Industry does not produce any goods but sell the promise.
A promise to take care of the customers or their dependents in case they
suffer a loss due to some peril during the term of policy.

What is insurance:

Mankind is exposed to many serious perils such as property losses from fire
and windstorm and personal losses from disability and premature death.
Although it is impossible for an individual to foretell or completely prevent their
occurrence but it is possible to provide against their financial effect the loss of
property and earnings.

From the point of view of the individual the life Insurance may be defined as a
contract whereby for a Consideration amount called the premium, one party
(the insurer) agrees to pay to the other (the insured) or a beneficiary a
particular amount upon the occurrence of death or any other agreed event.

 Insurance is the method of spreading and transfer of risks

 Losses of few unfortunate are shared by and spread over to many

exposed to the same risk.

 Assets created by the owner in expectation of future needs have a

value.

7
  Losses of assets for any reason deprive the owner of the expected
benefits.

 It acts as a form of a safeguard against misfortunes.

 From the point of view of community life insurance may be defined as a

social device to make accumulations to meet uncertain losses resulting
from premature death or disability.

Purpose and need of insurance :

As said earlier that the making is exposed to many serious perils which risk
the security of their belongings. The risk here means that there is a possibility
of occurrence of loss or damage to the property, it may happen or may not
happen. Insurance is relevant only in the contingency of uncertainty. If there is
no uncertainly about the occurrence of the loss it can’t be insured against:

 Assets are likely to be destroyed or made non-functional due to perils

like firefloods, breakdowns, lightning and earthquake.

 Damage to assets caused by any perils is the risk that assets are
exposed to.

 Insurance become relevant only if there is uncertainly of occurrence of

event leading to loss.

 No uncertainty No insurance.

 We can say that the human life value is an ongoing generating asset,
which can be lost on early death or disability caused by accidents.

 Insurance doesn’t protect the assets but only compensates the

economic or financial loss.

 Basically insurance covers tangible assets but the concept can be

extended to intangible also.

8
 FUNCTIONS OF INSURANCE
The functions of Insurance can be bifurcated into two parts:

1. Primary Functions
2. Secondary Functions
The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide protection

against future risk, accidents and uncertainty. Insurance cannot check the
happening of the risk, but can certainly provide for the losses of risk.
Insurance is actually a protection against economic loss, by sharing the risk
with others.

Collective bearing of risk - Insurance is a device to share the financial loss of

few among many others. Insurance is a mean by which few losses are shared
among larger number of people.

Assessment of risk - Insurance determines the probable volume of risk by

evaluating various factors that give rise to risk. Risk is the basis for
determining the premium rate also.

Provide Certainty - Insurance is a device, which helps to change from

uncertainty to certainty. Insurance is device whereby the uncertain risks may
be made more certain.

The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to

9
adopt suitable device to prevent unfortunate consequences of risk by
observing safety instructions; installation of automatic sparkler or alarm
systems, etc. Prevention of losses causes lesser payment to the assured by
the insurer and this will encourage for more savings by way of premium.
Reduced rate of premiums stimulate for more business and better protection
to the insured.
Small capital to cover larger risks - Insurance relieves the businessmen from
security investments, by paying small amount of premium against larger risks
and uncertainty.

Contributes towards the development of larger industries - Insurance provides

development opportunity to those larger industries having more risks in their
setting up. Even the financial institutions may be prepared to give credit to
sick industrial units which have insured their assets including plant and
machinery.

Life Insurance

Life insurance is a contract where the person requiring and insurance pays a
consideration / premium to maintain a policy and the insurer promises to pay
a sum assured or a guaranteed amount on the happening of an eventuality. If
no eventuality occurs then the insured may be eligible for some bonus also.

Why life insurance :

1. Protection of the interest of the family member.

2. Provision for education and marriage of the children.

3. Post retirement income for self and dependents

4. Special needs for medical expenses.

5. Provision for health /illness.

6. Provision for housing.

10
 7. Provision for income tax rebate.

Benefits of Insurance

Insurance not only serves the ends of individuals or of special groups of

individuals but also is advantageous to the society as a whole.

Benefits To The Individual

 Superior to any other saving plans:

Unlike any other saving plan, a life insurance policy affords full protection
against risk of death. In the event of death of a policy holder, the insurance
company makes available the full sum assured to the near and dear of policy
holder. In comparison, any other saving plan would amount the total saving
accumulated till date. If the death occurs prematurely, such saving can be
much lesser than sum assured. Evidently, the potential financial loss of the
family of the policy holder is sizable.

 Encourages and forces thrift:

A saving deposit can easily be withdrawn. The payment of Life insurance

premiums, however, is considered sacrosanct and is viewed with the same

11
seriousness as the payment of interest on a mortgage. Thus, a life insurance
policy in effect brings about compulsory saving.

 Easy Settlement And Protection Against Creditors:

A life insurance policy is the only financial instrument, the proceeds of which
can be protected against the claims of a creditor of the assured by affecting a
valid assignment of the policy.

 Ready marketing and suitability for quick borrowing :

A life insurance policy can, after a certain period (generally Three years), is
surrendered for a cash value. The policy is also acceptable as a security for
commercial loans, for example, a student loan.

 Disability benefits :

Death is not only hazard that is insured; many policies may include disability
benefits. Typically, these provide for waiver of future premiums and payment
of monthly installment periods.

 Accidental death benefits :

Many policies can also provide for an extra sum to be paid (typically equal to
the sum assured) if death occurs as a result of accident.

 Tax relief :

Under the Indian income tax act, the following tax relief is available

1. 20% of premium can be deducted from total income tax liability.

2. 100% of the premium paid is deductible from your total taxable

income.

12
When these benefits are factored in, it is found that most Policies offer returns
that are comparable /or even better than other saving modes such as PPF,
NSC etc. moreover, the cost of insurance is a very negligible.

 Benefits to business :

Insurance results in business continuation and welfare of employees.

Uncertainty of business losses is reduced by insurance.

 Benefits of society :

The welfare of the society is protected. Insurance results in economic growth

of the country and reduction in inflation.

ICICI BANK

The World Bank established ICICI LTD in 1955, the Government of

India and the Indian Industry, promote Industrial development of India by
providing project and corporate finance to Indian industry.

ICICI has grown from a development bank to a financial conglomerate

and has become one of the largest public financial institutions of India. ICICI
has financed almost all major sector of the economy, covering 6848
companies and 16851projects. In the fiscal year 2002- 2003, ICICI had
disbursed a total of Rs 45673 billion. Assets worth.1676.59 billion as on 31 st of
march 2005 and customer 6 million and 5 million policyholder account. Multi
channel network, 573 branches and 2000+ATMs

13
 PRUDENTIAL

Prudential was founded in 1848. Prudential is the largest life insurance

company in the United Kingdom. Provides retail financial services products
and services to more than 20 million customers, policyholder and unit holders
and manages over £300 billion of funds worldwide (as of 31 December 2006).
In Asia, Prudential is the leading European life insurance company with life
operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia,
the Philippines, Singapore, Taiwan, Thailand and Vietnam. Prudential is the
second largest retail fund manager for Asian sourced assets ex-Japan as at
June 2006. Its fund management business has expanded into a total of ten
markets.

ICICI + PRUDENTIAL (JOINT VENTURE)

A Joint venture ICICI and Prudential of UK

ICICI Prudential started its operation in December 2000

The key objective of ICICI prudential is to provide the Indian citizen to suit a
variety of needs.

Prudential “genesis”

Founded in 1848-U.K.
Fourth largest insurance company in the world as per fortune 500 in terms of
revenues
Leading life insurance Company in United Kingdom.
Over US$ 270 BILLION (Rs.12, 69,000 crores) under a management.
AAA rating from standard & poor’s (the highest rating)
Over 75 years of experience with operation in 11 countries.

14
 CHAPTER 2
RESEARCH METHODOLOGY

15
 RESEARCH METHODOLOGY

 Objective of study

 Type of research

 Source of data

 Sampling unit

 Sample size

 Type of sampling

 Method of data collection

 Instrument used for data collection

 Limitation

16
 RESEARCH METHODOLOGY

Research Methodology deals with, the procedure adopted to carry out the
study.
According to green and Tull: “A research design is the specification of
methods and procedures acquiring the information needed It is the overall
operational pattern or framework of the project that stipulates which
information is to be collected from which sources by what procedures’’.

OBJECTIVE OF STUDY

The purpose of research is to discover answer to questions through the

application of scientific procedures. The main aim of research is to find out
truth which is hidden and which has not been discovered as yet. We may
think of research objectives as falling into a number of following broad
grouping:
 To check the awareness level of people about insurance.
 To know the reasons for increasing trend of unit linked insurance
plan.
 To know how ULIP are differ from Traditional plans means how they
give better returns than traditional plan.
 Comparison of ULIP with other investment instrument available in
the market.

TYPE OF RESEARCH

Research refers to the search for knowledge. It can be defined as

scientific and systematic search for pertinent information on a specific topic. It
is careful investigation or enquiry especially through search for new facts of
any branch of knowledge. Research plays an important role in the project

17
work. The result of the project is completely based upon the research of the
facts and figures collected through the different ways of research. That is why
it is also called a movement from known to unknown.
Exploratory or Formulative research: Exploratory research is conducted to
clarify the ambiguous problems.

Descriptive research: To portray the characteristics of an individual, group,

situation.

Diagnostic research: To determine the frequency of occurrence of an event.

SOURCE OF DATA

In the data collection method, we have collected both

primary and secondary data to meet our objective.
Primary data:
The primary data was collected by a survey based on the questionnaire.
It was formulated on the basis of information gathered by me with the help of
Mr. Kapil Chawla who provide useful guidelines and objective of our study.

Secondary data:
The secondary data was collected from books and internet.

Research Approach:
The required information in the form of data is collected through survey
method, with the help of personal interview through questionnaire method.

Sampling plan:
There is a stage where the planning is done about the sample units,
sample size, sampling procedures, etc.

Sampling units:
This means, which is to be surveyed. So as mention earlier that the
sample units is potential peoples..

18
Sample size:
The sample size means how many peoples should be surveyed. So
that total sample size is 100, which cover from different area of Gurgaon.

Sampling Procedures:
I choose convenient and judgmental sampling for my research.

Data collection method :

Personal interview method is used for collection of primary data in the
form of questionnaire from respondents.

Research Instruments:
Once the source of data collection is decided then comes the
instrument for data collection or the research instrument. In this survey
method a questionnaire was framed. This is Philip by the potential people
though personal interview

LIMITATION

How so ever impeccable a thing may see to be there always dwell some
possibilities of failure and incompleteness. The result of this work also subject
to some of limitations.
Which are as follows:
 The main limitation of the study is the availability of time. As the
sufficient time was not available for collection of information.
 Some respondents were not interested in giving answer and
they appeared to be busy.
 Lack of experience.

19
 CHAPTER 3

INDUSTRY PROFILE

20
 INSURANCE INDUSTRY PROFILE

Life Insurance :

As is evident from its very name, it deals with insurance of human life. “Life
insurance corporation of India”- a public sector undertaking has the monopoly
in this sector since its nationalization.

In our wordily life, whenever there is uncertainty, there is an involvement of

risk. The instinct for security against such risk is one of the basic motivating
forces determining human attitudes. As a squeal to this quest for Security, the
concept of insurance must have been born. The urge to provide insurance or
protection against the loss of life & property must have prompted people to
make some sort of sacrifice willingly in order to achieve security through
“COLLECTIVE CO-OPERATION”, in this sense; story of insurance is probably
as old as THE story of mankind.

INSURANCE INDUSTRY IN INDIA

India is marching ahead to more prosperous future. The economy

is on a high growth path, domestic savings are growing, exports have risen
and inflation has stabilized. Infrastructure sector, which even today is woefully
inadequate to meet the expected increased industrial activities, has been
accorded top priority by the government. All this should reflect in a growth rate
of 7 to 8% for the next 3-4 years. With this scenario of high economic growth
further reforms in the financial sector are in the Common Minimum Program of
the Government.

India is regarded as under- insured country with insurance penetration at a

very low level of 0.6% of GDP. Insurance, as a rule, has always been given

21
very low priority by corporate India. It is always taken with reluctance, usually
only when it is compulsory, and then only by big industrial houses. Without
exception it is always inadequate to meet the needs of the corporate sector.

In addition to the tradition exposure of fire, floods, workers compensation and

the interruption, Corporate India also has to address unpredictable changes in
areas such as environment; security; occupational health and safety; public
liabilities; Directors and Officers Liability and product liability
It therefore becomes quite obvious that purchase of insurance, in itself, will
not substitute for a soundly based and property implemented Risk
Management
Program as insurance can only offer some financial relief by replacing the
plants; it cannot replace the loss in development of a business or
development of the market.

The likely private players:

A number of foreign insurance companies have set up representative office in

India and have also tied up with various asset management companies. They
have either signed Memorandum of Understanding with Indian companies or
are trying to do the same. A few of them have been around for the last four to
five years. Some have carried out extensive research on the Indian insurance
sector. Others have set up liaison offices. All of them are waiting with bated
breathe for the opening up of the sector and taking a bite of the great Indian
Insurance pie.

22
 Various Players Presents In The Market

1. Bajaj Allianz Life Insurance Company Limited.

2. Birla Sun Life Insurance Co. Ltd.
3. HDFC Standard Life Insurance Co. Ltd.
4. ICICI Prudential Life Insurance Co. Ltd.
5. ING Vysya Life Insurance Company pvt.Ltd.
6. Life Insurance Corporation of India.
7. Max New York Life Insurance Co. Ltd.
8. Kotak Mahindra Old Mutual Life Insurance Limited.
9. SBI Life Insurance Co. Ltd.
10. Tata AIG Life Insurance Company Limited.
11. Reliance Life Insurance Company Limited.
12. Aviva Life Insurance Co. India Pvt.Ltd.
13. Sahara India Life Insurance Co.Ltd.
14. Shriram Life Insurance Co.Ltd.
15. Bharti AXA Life insurance Company Ltd.
16. Met Life India Insurance Company Pvt. Ltd.

23
MOST RELIABLE PVT. LIFE INSURANCE COMPANY

MOST RELIABLE PVT.LIFE

INSURANCE CO.

ICICI

BIRLA SUN LIFE

9%
12%
39%
HDFC STANDARD
15% LIFE
25% MAX NEWYORK
LIFE
TATA AIG

INTRODUCTION TO IRDA

24
Insurance regulatory authority, 1996 (IRA):

• The IRA was set up in January 1996

• The IRA bill has first to be passed by parliament to make the
IRA a statutory body.
• Second, the powers of the erstwhile controller of insurance
have to be conferred on the IRA.
• Third, comprehensive legislation aimed at reviewing the
insurance act of 1938 and repealing the LIFE INSURANCE
CORPORATION ACT of 1956 and the general insurance
(Nationalization) act of 1972 have to be passed.

Government’s pronouncements:

• Post statutory status, IRA to be centre piece for future insurance

sector reforms
• IRA will be sole authority, which will be responsible for awarding of
licensing i.e. little or no government or political interference in
licensing in process.
• No restriction on the no. of licenses.
• No composite licenses for life and non life business.

IRDA was set up to protect the interests of the policyholders, to regulate,

promote and ensure orderly growth of the insurance industry. After this the
private players started entering the market.

25
 CHAPTER 4
COMPANY PROFILE

Organizational set up

26
  The organizational set up of a company plays an important role in the
overall efficient working of the various departments leading to an
improved overall performance. The arrangement has to be made in
such a way that activities are carried out in each department in the
smooth way.

 The department has to be made on the basis of various activities of the

company.

 Activities generating revenue should be given more importance than

non-revenue activities.

 Thus various offices, departments and sections must be created after

looking the important activities of the Insurance Company.

Important activities:

The important activities of the Insurance companies are:--

 Procuring new proposals for grant of life insurance cover.

 Scrutiny of proposals and giving decisions for

 Accepting/rejecting the proposals of Insurance.

 Issuing a policy document.

 Keeping track of performance of insurance contract by way of receipt of

premiums.

 Providing assistance in various matters like nominations, assignment,

alteration of terms, change of address and payment of claims.

 Other activities like investment of funds, maintenance of accounts,

personnel management, data processing and complying with other
legal and regulatory requirements.

27
Structure Of The Company:

The ICICI Prudential is a joint venture of ICICI (74%) and Prudential

UK (26%). ICICI Prudential Life Insurance was incorporated on July 20, 2000
and was granted a certificate of registration for carrying out life insurance
business, by the IRDA on November 24, 2000.

ICICI Prudential's capital base stands at Rs. 18.15 billion with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. For the 9 months
ended December 31, 2006, the company garnered Rs.27.22 billion of
weighted retail and group new business premium and wrote over 1.1 million
policies. Assets held stand at over Rs.1000 billion.

It commenced commercial operation on December 19, 2000 becoming

one of the first private sector players to enter the liberalized arena. During the
short period till March 31, 2003 The company has issued 2.45 policies
translating into a premium Income Rs 59.7 million and the sum assured of
over Rs 1000 million. The company is now operating in Mumbai. New-Delhi,
Pune, Chennai, Kolkata, Bangalore, Ahmedabad, Hyderabad and Lucknow.

ICICI PRUDENTIAL LIFE INSURANCE

ICICI Prudential Life Insurance Company is a joint venture between

ICICI Bank - one of India's foremost financial services companies and
Prudential plc - a leading international financial services group headquartered
in the United Kingdom. Total capital infusion stands at Rs. 20.60 billion, with
ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

We began our operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA). Today, our nation-wide
team comprises of over 580 offices, over 230,000 advisors; and 23
bancassurance partners.

28
ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings. As we grow our
distribution, product range and customer base, we continue to tirelessly
uphold our commitment to deliver world-class financial solutions to customers
all over India.

Promoters Of Icici Prudential

ICICI Bank :

ICICI Bank is India’s second-largest bank with total assets of about

Rs.1892.18 billion and a network of about 590 branches and offices and about
2030 ATMs. It offers a wide range of banking products and financial services
to corporate and retail customers through a variety of delivery channels and
through its specialized subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital, asset management and
information technology.

ICICI Bank posted a net profit ofRs.1, 637 crore for the year ended
September 30, 2005. ICICI Bank’s equity shares are listed in India on stock
exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock Exchanges,
Mumbai and the National stock exchange Of India limited and its American
Depositary Receipts (ADRS) are listed other New York Stock Exchange
(NYSE).

PRUDENTIAL PLC :

29
 Established in London 1848, Prudential plc is a leading international
financial services company In the UK, with around US$300 billion funds under
management, and more than 20 Million customers worldwide (as of 31
December). Prudential has brought to market an integrated range of Financial
services products that now includes life assurance, pensions, mutual funds,
banking investment management and general insurance. In Asia, Prudential is
UK’s largest life insurance company with a vast network of 24 life and mutual
fund operations in twelve countries—China, Honk Kong, India, Indonesia,
Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and
Vietnam.

30
 Management hierarchy

MD & C.E.O (Ms. SHIKHA SHARMA)

EXECUTIVE DIRECTOR (Mr. BHARGAV DAS GUPTA)

HEAD OF SALES, HIMALAYAN (Mr. AMIT PALTA)

VICE PRESIDENT (Mr. SANTOSH CHACKO)

ASSOCIATE REGIONAL MANAGER (Mr. HEMANT SIKKA)

AREA MANAGER (Mr. AJAY NEB)

SALES MANAGER (Mr. SUNIL BHATIA)

AGENCY MANAGER (Mr. KAPIL CHAWLA)

UNIT MANAGER

31
 VISION

To make ICICI Prudential the dominant life, health and Pensions

player built on trust by world –class people and service.
This we hope to achieve by:

• Understanding the needs of customers and offering them superior

products and service
• Leveraging technology to service customers quickly, efficiently and
conveniently.
• Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policyholders.
• Providing an enabling environment to foster growth and learning for our
employees.
And above all, building transparency in all our dealings.

The success of the company will be founded in its unflinching commitment to

5 core values- integrity, customer first, Boundary less, Ownership and
passion. Each of the values describes what the company stands for the
qualities of our people and the way we work.

We do believe that we are on the threshold of an exciting new opportunity,

where we can play a significant role in redefining and reshaping the sector.
Given the quality of our parentage and the commitment of our team, there are
no limits to our growth.

32
 SWOT ANALYSIS OF ICICI PRUDENTIAL

Strengths:

• ICICI Prudential is the largest private player in the insurance industry in

INDIA , with a market share of around 32% amongst the private
players.
• It received best products innovation award from Asian banker in 2001.
• Vast untapped market. In a country of 1 billion people there is huge
potential market for life insurance products.
• There is a huge pool of skilled professionals to carry out the successful
ventures.
• ICICI Prudential is one of India’s leading financial institutions.
• Offering a complete financial solution that encompasses every sphere
of life.
• From commercial banking
To stock broking
To mutual funds
To life insurance
To investment banking,
The group caters to the financial needs of individuals and
Corporate.
• ICICI prudential is the first company, which got license of insurance
trading from I.R.D.A. (Insurance Regulatory & Development Authority)
• ICICI Prudential is leading in securities.
• The company has a network in 74 cities in India and offices in New-
York, London and Dubai.
• The group services a customer base of over 2.7 million.

33
Weaknesses:

• Though there is a huge market for insurance polices, the middle class
who constitutes bulk of this market is burdened with inflationary
pressure and therefore is not able to save for future.
• Less popularity of ICICI Prudential in villagers.
• Most of the people have faith on LIC as it is a Govt. Organization.

Opportunities:

• Out of 320 million insurable market only 20% of population is insured.

• The ICICI Prudential group is going to open 100 branches of ICICI
Prudential in coming 4-5 years.
• The insurance sector is growing so there is opportunity for business
growth.
• Unemployment is today a big problem in our country; therefore people
who have the potential should be encouraged to enter in to this sector.

Threats :

• Competition is growing as new entrants are coming in insurance sector

.
• Main threat is “COMPETITORS”.

34
 CHAPTER 5

TOPIC TAKEN IN
ORGANIZATION

35
 Classification of Life Insurance Products

We can classify insurance plan in two categories.

 Traditional
 ULIP
Traditional

Term Insurance :

Under term insurance plan, sum assured is payable only if death occurs
during the specified pre-determined term. If death does not take place during
such term the amount of premium stands forfeited. Thus it can be seen that
the term insurance is nothing but the cost of pure protection. It is a contract,
which provides financial protection if death should occur within a specified
period. No survival benefits are provided under the contract.

Whole life insurance:

Whole life insurance provides for the payment of the face value upon the
death of the insured, regardless of when it may occur. This policy furnishes
permanent protection to the insured at he moderate cost. This is highly
important for the average man or woman of moderate salary, who require
considerable family protection and whose limited income does not enable him
or her both to pay premiums and to accumulate a large savings fund. The
whole life policy provides a capital sum of money in the event of death of the
assured whenever that may occur.

Endowment Policy:

36
Endowment is a product, which includes Risk cover and saving also. In the
pure endowment policy the sum assured is payable in the event of death or
definitely on maturity. In an endowment sum assured is for sure given to the
policyholder on completion of the term. Endowment plans are very popular in
developing nations since they serve a dual purpose of life cover and savings.
Many a people in our country go for endowment products because of the
compulsory saving aspect. An endowment plan on the other hand is not a
cheap plan since the insurer has a dual liability of providing life cover and on
maturity giving the entire sum assured.

Annuities:

Annuities refer to income or other financial provision usually for retirement or

old age. An Annuity may be defined as a periodic repayment made during a
fixed period or for the duration of a designated life or lives. In one sense the
life annuity may be described as the opposite of insurance protection against
death in its pure form a life annuity may be defined as a contract whereby for
a premium consideration one party (the insurer) agrees to pay the other (the
annuitant) a stipulated sum (the annuity) periodically throughout life. The
purpose of the annuity is to protect again a risk—the outliving of one’s
income.

UNIT LINKED INSURANCE PLAN (ULIP)

Unit linked insurance plan (ULIP) is a life insurance solution that provides the
client with the benefits of protection and flexibility in investment. It is a solution
which provides for life insurance where the policy value at any time varies
according to the value of the underlying assets at the time .

The investment is denoted as unit and is represented by the value that it has
attained called as Net Asset Value (NAV).

37
 UNITS
UNIT
UNDERLYING
LINKED
IN
INSURANCE
INVESTMENT
POLICIES
FUNDS

U
LIP came into play in 1960s and became very popular in Western Europe and
America. The reason that is attributed to the wide spread popularity of ULIP is
because of the transparency and the flexibility which it offers to the clients.

As time progressed the plans were also successfully mapped along with life
insurance needs to retirement planning.In today’s times ULIP provides
solution for all the needs of a client like insurance planning, financial needs,
financial planning for children’s future and retirement planning.

Structure Of Ulip

38
 PREMIUM

LESS CHARGE

INVESTMENT LIFE
REPRESENTED AS COVER
UNITS

Benefits of unit linked plan :

ULIP distinguishes itself through the multiple benefits that it provides to the
consumer. The plan is a one stop solution providing

1. Life protection
2. Investment and Savings

a. Market linked fund based on risk profile

b. Switch option
c. Premium redirection
d. Automatic transfer plan(ATP)

3. Flexibility of cover continuance

4. Transparency
5. Extra protection with riders

a. Death due to accident

b. Disability
c. Critical illness

39
6. Liquidity

a. During the term partial withdrawals

b. At Maturity

7. Tax planning

Charges Under Ulip

Contribution related charges:

These are the charges that are represented as a percentage of the regular or
single contribution paid. In case of a regular contribution plan, it is usually high
in the first year to pay for the distribution cost. This charges pays for the
issuance and for distribution commissions. This charges are running for the
policy.

Administrative charges:

These are charges that are levied for the administration of the policy and the
related cost of administration of the insurance company,itself. They are more
related to the cost like IT , operational, etc cost of continuing the policy.

Fund management charges:

40
These are the charges for buying and selling debt and equity. These are the
charges are adjusted in NAV it self.

Mortality charges:

This covers the cost of providing life protection for the insured and may be
paid once at the start of the policy for a recurrent manner for example this
charges levied to provide the insurance cover under the plan . normally these
charges are one year charges as per the age of the holder.

Rider charges:

Rider charges are similar in nature to the mortality charges as they are levied
to pay for the other protection benefits that the policy holder has choosen for-
like the critical illness benefit or the accident benefit,etc.

Surrender charges:

When the policy holder decides to surrender the policy or partially withdraw
some of the units for cash , a surrender charge may be apply.
Surrender charges are used to cover initial expenses that have been incurred
by the company but not yet recovered from the policyholder yet.

Bid offer charges:

In ULIP specifically certain insurers might create a difference in the price at

which they sell the unit and the price at which they buy the units. Investor’s
contribution are used to buy units in the investment fund at the offer price and

41
are sold when benefits are required at the bid price. The difference between
the offer and bid prices Is known as the “bid-offer spread", this is used to
cover expenses when setting up the policy.

Transactional specific charges:

These charges are levied when the client does some specific transaction like
changing funds, topping up the investment component or withdrawals .

Investment Option For Your Money

Maximiser: If high growth is your priority, this is the plan for you. You can
enjoy long-term capital appreciation from a portfolio that is invested primarily
in equity and equity-related securities

Protector: - If on the other hand, your priority is steady returns, you can opt
for the protector Plan. Plan, you can accumulate a steady income at a low risk
across a medium to long-term period from a portfolio, which is primarily
invested in fixed income securities.

Balancer:-If you prefer a balance of growth and steady returns, choose our
balancer plan. This would ensure that your portfolio is invested in equity-
linked securities, as well as in fixed income securities.

Preserver: The objective of this plan is not ensuring capital protection by

investing in very low risk investments like the cash and call money markets.
However, the returns generated may also be on the lower side due to the
investment pattern. At inception, investments up to 20% can be allocated to
this fund.

POTENTIAL
FUND TYPE ASSET MIX
RISK /REWARD
Maxi miser Equity& Related securities: High
Max 100%

42
 Debt, Money market &
Cash: Max 25%
Debt. Money market &
Cash:
Moderate
Balancer Min 60%
Equity & Related securities:
Max: 40%
Debt Instruments,
Protector Money market & Cash: Max Low
100%:
Debt Instruments: Max 50%
Capital
Preserver Money market & Cash: Min
preservation
50%

COMPARISION OF ULIP WITH TRADITIONAL PLAN

Unit Linked Insurance Product:

ULIPs have gained high acceptance due to attractive features they offer.
These include:

 Flexibility
o Flexibility to choose Sum Assured.
o Flexibility to choose premium amount.
o Option to change level of Premium /Sum Assured even after the
plan has started.
o Flexibility to change asset allocation by switching between funds
 Transparency
o Charges in the plan & net amount invested are known to the
customer
o Convenience of tracking one’s investment performance on a
daily basis.

43
  Liquidity
o Option to withdraw money after few years (comfort required in
case of exigency)
o Low minimum tenure.
o Partial / Systematic withdrawal allowed
 Fund Options
o A choice of funds (ranging from equity, debt, cash or a
combination)
o Option to choose your fund mix based on desired asset
allocation

Traditional Plans :

These are the oldest types of plans available. These plans cater to
customers with a low risk appetite. Some of the common features of
traditional plans are:

 Steady Investment
o Major chunk of investible funds are in debt instruments
o Steady and almost assured returns over the long term
 Features
o Death benefit is Sum Assured + guaranteed & vested bonus
o Helps in asset creation as they are for a long tenure
o Premium to Sum Assured ratios are fixed for each plan and age.
o Generally withdrawals are not allowed before maturity.

Point of difference ULIP Traditional Policy

Market related (May be
IRDA? Determined
Investment stock market or debt
investments
market)
Transparency in costs Yes No
Flexibility in payment Yes No
Assured Bonus No Yes
Assured Sum on survival No Yes

44
Option to increase
Yes No
investment/premium

ULIPs better traditional policies

Until a couple of years ago, when ULIPs were a rare commodity, nobody
knew how life insurance companies charged policyholders for expenses. And
nobody seemed to want to know either. Then came the ULIPs with good
intentions to make policyholders aware of how much they would pay as
expenses. But that move backfired. Policyholders were taken aback by the
high amount of fees that ULIPs charged.

While the charge structure on ULIPs is something that is open to debate, the
issue is that ULIPs alone cannot be isolated. Traditional policies too charge
high administrative and management expenses. In ULIPs, the first year
charges range from 20-70%, one does not know how much traditional policies
charge.

This can have a bearing on returns as well. A ULIP may charge you upfront
but thereafter, all the returns on the fund are yours while a traditional policy
may charge less but share a smaller portion of returns with you.

So if you were substituting a traditional endowment with a ULIP, you would be

better off with the latter since you would know your charges and your returns.

We recommend traditional policies:

Where the objective is only Risk cover and not savings and cost has to be
minimum.

We recommend Unit Linked products where: .

• The intention is to provide security for a goal.

• The purpose is to make the savings grow at a better rate seeking the
best solution.

45
 • It is a market linked investment where the premia paid is invested in
funds
• Different options are available, like 100% Equity, Balanced, Debt,
Liquid etc and according to the fund selected, the risks and returns
vary.
• The costs are upfront and are transparent, the investment made is
known to the investor (As he is the one who decides where his money
should be invested).
• There is a greater flexibility in terms of premium payments ie. A
premium holiday is possible.
• You can also invest surplus money by way of top ups which will
increase your investment in the fund and thereby provide a push to
returns as well.
• There is no assured Sum on survival, the higher of the Sum Assured or
Fund Value is paid at the maturity or incase of death.

Financial planning and tax planning

All of us want to save for a rainy day. We want our money or investment to:

(i) Give the best possible return and

(ii) Be available to us when we require it.

Financial planning makes this possible. Financial planning is an attempt to

maximize returns keeping in mind the liquidity and security of our investment.
The three basic principles (guiding factors) of financial planning are:

• Setting realistic financial goals

• Starting investments early
• Thinking long term while allowing for short-term needs that may arise.

One can invest money only when one possesses it, which is possible by
saving systematically. Selecting a good saving scheme can do this.

46
Feature of a Good Saving Plan:

(a) Safety
(b) Flexibility
(c) Should have incentive to save continuously without default.
(d) Tax saving
(e) Should fulfill financial objective even in case of death.

Features of an ideal Investment Scheme:

(a) Safety
(b) Liquidity
(c) Higher Yield
(d) Capital growth
(e) Tax saving

Safety: refers to financial soundness of investment.

Liquidity: means quickness with which an assets can be converted into cash
whenever required.

Yield: is the amount of money that an investment is expected to earn.

Capital growth: Any return, which is not taxable, will be preferred to those on
which taxes have to be paid. A good investment is that which earns decent
returns after providing for taxes and inflation.
However, there is no single wonder investment, which can have all the
above features. A prudent person should look for those investments, which
offer the ideal solution to his personal needs under his own set of
circumstances.

High Returns and Best Returns;

(i) These are not necessarily the same.

47
(ii) High returns may be offset by risk to capital.
(iii) Best returns should be determined by the advantage an investment offers.

The Investor’s Approach:

Investor’s approach can be conservative (safety is of utmost importance),
enterprising (willing to take some risks) or speculative (willing to take high risk
in order to gain high returns). The investor’s approach is related to a host of
personal factors such as:
a) Age and family
b) Future responsibilities

Tax Benefits Under Life Insurance Policies

Qualifying premium amount: -

a) Premiums paid to effect or keep in force an insurance policy on the life
of
• The assessee; or
• The spouse of the assessee; or
• Any child (minor or major) of the assessee.

b) Premiums paid to effect or keep in force a contract for a deferred

annuity on the life of
• The assessee; or
• The spouse of the assessee; or
• Any child (minor or major) of the assessee provided that such contract,
does not contain a provision for exercise by the assured of an option to
receive a cash payment in lieu of the annuity.

Tax relief for savings through life insurance

48
• An aggregate amount of savings including those paid towards life
insurance premium up to Rs. 1 lakh not to be included in the income
liable for tax.
• Premiums paid under an approved pension plan up to Rs. 10,000/- per
year of various insurance companies are deductible from the total
income up to a maximum Rs. 10,000/- under section 80 CCC.
• The amounts received as claims – whether on maturity or death –
including the bonus, if any, are not taxable, being capital receipt under
section 10(D)

What makes ULIP a total financial planning package?

• Potential for Superior returns by switching between Equity & Debt.

• Liquidity and Flexible Insurance Cover.
• No Long Term Commitments.
• 100% Tax Free Returns on Withdrawals & Maturity.

49
 Comparison of ULIP with other Investment Modules

OTHER RATE OF TIME RISK MIN. MAX TAX TAX

INSTRUMENT RETURN PERIOD INVEST INVEST FREE BENE
MENT MENT RETU FIT
RN
NSC 8% 6years No 100 No limit No Yes
PPF 8% 15years No 500 70000 Yes Yes
ELSS Market 3years Risky 500 No limit Yes Yes
Return
ULIP Market 5years Risky 500 No limit Yes Yes
Return Modu
le
FD 9.5% 5years No 10000 No limit No Yes
Market Open High 500 No limit Capital Only
MUTUAL Return Ended gain in
FUND @10% ELSS
for Funds
time
less
than
1year
STOCK Variable No time Very Variable No limit Capital No
frame high gain
@10%
for
time
less
than 1
year

50
 Life Time Super

It is necessary that we understand a few terms before look in to the various

financial planning ways.

Save: this is an activity that helps in the “asset allocation”. It has both a short
term & long term perspective.

Invest: this is an activity that focuses “asset creation”. It involves making

money from money.

Spend: this is the activity of using the money for our expenses.

51
 ASSET
SAVE ACCUMUL
ATION

ASSET
INVEST CREATIO
N

ASSET
SPEND PROTECTI
ON

How Life Time Super Provides Asset Pprotection, Asset

Creation, Asset Accumulation

Flexible policy term: Decide for how long you want your policy. You can
invest for a minimum of 10 years and a maximum of 75 years.

52
3 choices of premium payment: Opt to pay the premium on a monthly, bi-
annual or an annual basis.

6 investment funds: Select among Flexi-Growth, Maximiser, Flexi-Balanced,

Balancer, Protector, and Preserver, based on your financial goals and risk
profile.

Systematic withdrawal of money: Withdraw money in installments from the

4th year onwards.

Maturity benefit: Receive the Fund Value when your policy matures. Choose
to take this value as a single lump-sum amount or in monthly, bi-annual or
annual installments.

Death benefit: Your family receives the higher of Fund Value or Sum
Assured should something happen to you.

Switch benefit: Switch between funds anytime to adjust your portfolio, based
on your goals and risk profiles. You can switch funds 4 times a year, at no
cost. For subsequent switches, you will be required to pay a switch fee of Rs.
100

LIFE TIME SUPER at a glance

Minimum/Maximum Entry Age 0 years to 65 years

Maximum Age at Policy 75 years

53
Maturity

Minimum/Maximum Policy
10 years to 75 years
Term

Premium Payment Frequency Monthly, half-yearly, yearly

Minimum Premium Rs. 24,000 per annum

Annual Premium x Term/2. Subject to a

Minimum Sum Assured
minimum of Rs. 1,00,000

Premium paid for the policy and critical illness benefit

Tax Benefit (8) rider will be eligible for tax benefit under Sec. 80C
and 80D respectively. Any amount paid to you will be
eligible for tax benefits under Sec. 10 (10D) as per I
Tax laws.

Why life time super:

As an individual who desires a lot from life-a car, a beautiful home and of
course, the comfort and contentment of your family-you would undoubtedly
want to plan your finances such that you can take care of all your
requirements.
Invest in ICICI Prudential's LifeTime Super policy-a regular-premium unit-
linked policy, which offers potentially higher returns that systematically enable
you to meet your long-term financial objectives. In addition, LifeTime Super
also provides the protective benefit of an insurance cover, which keeps your
family secure, always.

Comparision of lifetime super of icici pru with other

companies.

54
 Life Maker- Level
Features Life Time Super Insurance Cover

Premium Pay Frequency Regular Premium Regular Premium

Higher of the Fund Value or Sum
Assured, reduced by the Higher of Sum Assured or
Death Benefit applicable partial withdrawals Fund Value

Maturity Benefit Fund Value Fund Value

Minimum Annual Premium Rs 24,000 pa Rs. 15,000 /-
Min Term 10 years 10
Max Term 75 years 58
6 Funds – Flexi Growth , Flexi 4 Funds : Secure Plan,
Balanced , Maxi miser, Balancer , Balanced Plan, Growth
Choice of Funds Protector, Preserver Plan, Conservative Fund
Top-ups Not Allowed currently Allowed
4 switches free in a policy year. 2 switches free in a policy
Switches Min amt. Rs.2000 year
Allowed after completion of 3
policy years. Min Amount is Allowed after completion
Partial Withdrawals Rs.2000 of 3 policy years.
Special Conditions (if any) None Redirection of Premium
Surrender Values
(At end of year 1) Nil Nil
(At end of year 2) Nil Nil
(At end of year 3) 98% Nil
(At end of year 4) 99% Nil
(At end of year 5) 100% Nil
Personal Accident Benefit
Rider, Dread Disease
Riders ADBR,CIBR,WOPR Rider
Available. Upto a period of 5
Settlement Period Options years Not Available
Automatic Transfer Plan Available Not Available
Boundary Conditions
Min Age at Entry 0 12
Max Age at Entry 65 60
Max Age at maturity 75 70 years
Term/2*AP , subject to a min of
Min/Max Sum Assured Rs.1,00,000 Min Rs. 100,000
Increase/Decrease in
Annual Premium Not Allowed Increase allowed
Increase/Decrease in Term Not Allowed Not Allowed
Increase/Decrease in Sum Increase allowed
Assured Decrease not allowed Not Allowed

55
 Charges
Premium Allocation
Charges Life Time Super Life Maker Plan
18000-49999 : 20%,
Year 1 50000 & above : 18% 0.75%

Year 2 7.5% 0.80%

Yr 3 onwards
Fund Management Charges
Flexi Growth / Maximiser - 2.25%,
Policy Administration
Charge
Switching Charge
Partial Withdrawal Charge
Miscellaneous Charge
4%
Flexi Balanced / Balancer -
2.25%, Protector- 1.5% &
Preserver - 0.75%
No Charge
Rs. 100 for subsequent switch
over 4 switches in a policy year
No charge
None
1%
Varies from 0.90 % to
1.25 %
Rs 50 per month
Rs. 100 for
subsequent switch
over 2 switches in a
policy year
0.25 % of the amount
A one-time charge
payable at the
inception of the policy
of Rs. 700

Reliance Market
Features Life Time Super Return Plan
Premium Pay Regular and Single
Frequency Regular Premium Premium
Higher of the Fund Value or Sum Higher of the Fund Value
Death Benefit Assured, reduced by the applicable or Sum Assured,\ which
partial withdrawals ever is the higher
Maturity Benefit Fund Value Fund Value
Rs 10,000 for Regular &
Minimum Annual Rs. 25,000 for Single
Premium Rs 24,000 pa Prem.
Min term 10 5
Max Term 75 40
Investment

56
Related:
4 Funds : Capital
6 Funds - Flexi Growth, Flexi Secure, Balanced Fund,
Balanced, Maxi miser, Balancer, Growth Fund, Equity
Choice of Funds Protector, Preserver Fund
4 switches free in a policy year. Min 1 switch free in a policy
Switches Switch Amt :RS 2000 year
2 Partial wdrwl Allowed
after completion of 3
Allowed after completion fo 3 policy policy years. Min Amt is
Partial Withdrawals years. Min Amount is Rs.2000 Rs.10000
Special
Conditions
(If Any) None Redirection of Premium
Surrender Values
(At end of year 3) 98% 100%
(At end of year 4) 99% 100%
(At end of year 5) 100% 100%
Accidental Death &
Accidental Total and
Permanent Disablement
Riders ADBR,CIBR,WOPR Benefit
Settlement Period Available Up to a period
Options Available Up to a period of 5 years of 5 years
Automatic
Transfer Plan Available Not Available
Boundary
condition
Min Age at Entry 0 0
Max Age at Entry 65 65
Max Age at maturity 75 80
Min : For Single Premium
-125% of SP, For Regular :
Term/2*AP , subject to a min of Rs.1,00,000 Annualized Premium for 5
years or for half the Policy
Min Sum Assured term
Increase/Decrease
in Annual Premium Not Allowed Not Allowed
Increase/Decrease
in Term Not Allowed Not Allowed
Increase/Decrease Increase allowed Increase allowed
in Sum Assured Decrease not allowed Decrease not allowed

Charges

57
 Life Time Super Reliance Market Return Plan
Premium Allocation
Charges
18000-49999 : 20%, For 5-9 term yr - 10%, 10-14
Year 1 50000 & above : 18% term yr- 15%, 15+ yrs - 20%
Year 2 7.5% 5% thereafter
For Single Premium its 2%
Yr 3 onwards 4% throughout
Flexi Growth / Maximiser - Capital Secure - 1.50 % ,
2.25%, Flexi Balanced / Balancer Balanced Fund- 1.50%,
Fund Management - 2.25%, Protector- 1.5% & Growth Fund - 1.75% , Equity
Charges Preserver - 0.75% Fund- 1.75 %
Policy
Administration
Charge No Charge Rs 40 per month
Rs. 100 for subsequent switch
Rs. 100 for subsequent switch over 4 switches in a policy
Switching Charge over 4 switches in a policy year year
Partial Withdrawal
Charge No charge Rs 100 per withdrawl
Miscellaneous
Charge None None

58
 CHAPTER 6

FINDING AND DATA ANALYSIS

Finding and data analysis

SAMPLE SIZE

RESPONDENT CATOGERY NO. OF PEPOLE

Service Man 28
Business Man 33
Shopkeeper 17
Housewife 8
Other 14

59
TOTAL 100

Q1. Do you have any insurance policy?

OPENION NO OF
PEOPLE
YES 87
NO 13

NO OF PEOPLE

13%

YES
NO

87%

Q2. Which company’s policy you are having?

COMPANIES PEOPLE
LIC 61

60
ICICI 8
HDFC 7
OTHER 11
NON POLICY HOLDER 13

PEOPLE

13%
LIC
11%
ICICI
HDFC
7% OTHER
61%
8% NON POLICY HOLDER

61
Q3.Why did you purchase insurance plan?

CATEGORIES NO. OF PEPOLE

FOR PROTECTION 15
FOR SAVING 21
FOR INVESTMENT 35
FOR TAX SAVING 29

NO. OF PEPOLE

15%
29%
FOR PROTECTION
FOR SAVING
21% FOR INVESTMENT
FOR TAX SAVING
35%

Q4. Are you satisfied with your Investment?

CATEGORIES NO. OF PEOPLE

SATISFIED 56
UNSATISFIED 31 62
NO POLICY 13
HOLDER
 NO. OF PEOPLE

13%

SATISFIED
UNSATISFIED
31% 56% NO POLICY HOLDER

63
Q5. Have you ever invested in ULIP?

CATEGORIES NO. OF PEPOLE

YES 56
NO 31
NO POLICY HOLDER 13

NO, OF PEOPLE

13%

YES
NO
NO POLICY HOLDER
31% 56%

Q6. If yes, then in which plan?

64
CATEGORIES NO. OF PEPOLE
SAVING PLAN 40
PROTECTION PLAN 23
PENSION PLAN 7
CHILD’S PLAN 17
NO POLICY HOLDER 13

NO. OF PEOPLE

13%

40% SAVING PLAN

17%
PROTECTION PLAN
PENSION PLAN
CHILD'S PLAN

7% NO POLICY HOLDER

23%

Q7. How much return you are expecting from your ULIP?

CATEGORIOES NO OF PEPOLE

65
15-25% 20
25-35% 21
35-45% 19
MORE THAN 45% 27
NON POLICY HOLDER 13

NO OF PEPOLE

13% 20%
15-25%
25-35%
35-45%
27% MORE THAN 45%
21%
NON POLICY HOLDER
19%

66
Q8. Do you think ULIP is a risky investment?

CATEGORIES NO.OF PEPOLE

VERY RISKY 13
MODERATE 18
SAFE 36
VERY SAFE 20
NON POLICY HOLDER 13

NO. OF PEOPLE

13% 13%
VERY RISKY
20% 18% MODERATE
SAFE
VERY SAFE
NO POLICY HOLDER
36%

Q9. Do you know about the life time super investment plan of
ULIP?

67
CATEGORIES NO.OF PEPOLE
YES 59
NO 41

NO.OF PEPOLE

41%
YES
NO
59%

Q10. Do you think life time super investment plan of ICICIPRU is better other
plans?

68
 CATEGORIES NO.OF PEPOLE
YES 33
NO 26
DON’T KNOW 41

NO.OF PEPOLE

33%
41%
YES
NO
DON’T KNOW

26%

Q11. What are the reasons for investment in ULIP?

69
CATEGORIES NO.OF PEPOLE
LIFE PROTECTION 31
INVESTMENT & SAVING 29
FLEXIBILITY 11
TAX PLANNING 16
NO POLICY HOLDER 13

NO. OF PEOPLE

13%
31% LIFE PROTECTION
16% INVESTMENT & SAVING
FLEXIBILITY
TAX PLANNING
11% NO POLICY HOLDER
29%

Q12. What steps do you suggested to the companies to make their ULIP
plans more popular?

CATEGORIES NO. OF

70
 PEPOLE
GIVE MORE ADVERTISEMENTS 36
ARRANGE MORE WORKSHOPS 13
ARRANGE MORE SEMINARS 14
REDUCE CHARGES 21
CREATE AWARENESS 16
THROUGH ADVISORS

NO. OF PEOPLE

GIVE MORE
ADVERTISEMENTS
16% ARRANGE MORE
36% WORKSHOPS
ARRANGE MORE
SEMINARS
21%
REDUCE CHARGES
14% 13%
CREATE AWARENESS
THROUGH ADVISORS

FINDINGS

71
• Now people mainly prefer ULIP for saving, then
bank and then Post-Office and after that prefer P.P.F. and
other. The main reason behind the insurance plan or ULIP
preference is switching facility or option to choose fund.
• Mainly people prefer low growth safe return as
compare to high growth some risky return.
• People mainly purchase life insurance policy for
investment and then for tax-saving they give 2nd preference
to protection.
• I also find that people mainly prefer L.I.C. as
compare to private insurance company.
• In my survey, I also find that only 56% people are
satisfied with current policy.
• It was also find out that only 59% people know
about life time super plan of ICICI Prudential.
• About 56% people finds ULIP is a safe mode of
investments.

72
 CHAPTER 7

RECOMMENDATIONS

RECOMMENDATIONS

73
1. Emphasis on advertisement: Company should emphasis on
insurance plan advertisement, because at present company main focus
on conventional product advertisement.
2. Increase in commission: Company should also change the
commission structure of F.C., because in initial year commission is
very high as compare to remaining year. So F.C. does not focus on
remaining year and many policies lapsed.
3. Making ICICI more accessible: Here I mean that as 80% of the
population of India is rural therefore ICICI must have there branches in
important towns so it not only this will increase the awareness among
people more over it will help the company to acquire local market and
cater to their needs effectively.
4. There should be a product with similar features and low initial
premium: A product like Life Time super is suitable for all but the initial
premium which cannot be less than 20000 Rs. is on the higher side,
therefore the company should derive a product with similar features but
with low initial premium so that it is affordable to normal service class.
5. Administration charges should be low as in comparison with
mutual funds, national saving certificate (N.S.C) etc.: The
Company should lessen down the administration charges so that this
product can have an edge over other investment modules like N.S.C,
P.P.F etc.
6. Market surveys should be conducted regularly so that to know
about customer demands and changing needs: The Company
should know about the customers changing needs and demands by
conducting market surveys which are helpful in innovating a product
which suits the customer’s requirements.
7. There should be Training batches on weekends: It is advised that
the company should have training batches for the already serving class
on weekends, so that the willing candidates can opt it as a part time
business opportunity.

74
 CHAPTER 8

SUMMARY/CONCLUSION

75
 CONCLUSION

In India, insurance is generally considered as a tax-saving device instead of

its other implied long-term financial benefits. Indian people are prone to
investing in properties and gold followed by banks deposits. They selectively
invest in shares also but the percentage is very small—4.5%. Even to this
day, Life insurance market has become more vibrant. Smashing all doubts
over the decision to liberalize the industry, the overwhelming first year
performance of the Indian insurance sector is test case of a massive success
story of private players entering into the erstwhile state monopoly.

The top three insurance companies-ICICI Prudential Life Insurance Company,

HDFC Standard Life and Max New York Life- combined managed to sell over
two lakh policies in a single year. ICICI Prudential, touted as the number one
private life insurer, scored on all three fronts-with the maximum number of
policies sold (1,00,000 policies), highest amount of premium collected (Rs.
2,700 crore).

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 CHAPTER 9

BIBLIOGRAPHY

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 BIBLIOGRAPHY

Printed Sources:
1. ICICI Prudential Life Insurance Company
Unit Linked Product Guide.

Brochures:

ICICI Prudential Life Insurance Company.

Life Insurance Corporation Ltd.

Birla Sunlife Life insurance Company

HDFC Standard Life Insurance Company

Om kotak Life Insurance Company

Bajaj Allianz Life Insurance Company

WEBSITES:

www.bimaonline.com

www.google.com

www.licindia.com

www.iciciprulife.com

www.birlasunlife.com

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CHAPTER 10

ANNEXURE

79
 QUESTIONNAIRE

Q1. Do you have any life insurance policy?

Yes ( ) No ( )

Q2. Which company’s policy you are having?

LIC ( ) ICICI PRUDENTIAL ( )

HDFC STANDARD ( ) OTHER ( )
NO POLICY ( )

Q3. What is the reason for purchasing life insurance policy?

Protection ( ) Saving ( )
Life cover ( ) Tax saving ( )

Q4. Are you satisfied with your policy?

Yes ( ) No ( )

Q5. Have you ever invested in ULIP?

Yes ( ) No ( )

Q6. If yes, then in which plan?

Saving plan ( ) Protection plan ( )

Pension plan ( ) Child’s plan ( )

Q7. How much return do you expect from ULIP?

15 – 25 % ( )

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 25 – 35 % ( )
35 – 45 % ( )
More than 45% ( )

Q8.Do you think ULIP is a risky investment?

Very risky ( )
Moderate ( )
Safe ( )
Very safe ( )

Q9. Do you know about Life time Super plan of ICICI prudential?

Yes ( ) No ( )

Q10. Do you think Life time super plan of ICICI pru is better than other plans?

Yes ( ) No ( )

Q11. What are the reasons for investment in ulip?

Life protection ( )
Investment and Savings ( )
Flexibility ( )
Tax planning ( )

Q12. What steps do you suggested to the companies to make their ULIP
plans more popular?
Give more advertisements. ( )
Arrange more work shops. ( )
Arrange more seminars ( )
Reduce charges ( )

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 Create awareness through advisors ( )
Others ………………………………………..

Q13. Personal Details

NAME -------------------------
AGE ------------------------------------
QUALIFICATION ----------------------------------------------------
OCCUPATION ---------------------------------------------------------
ADDRESS ----------------------------------------------------------------------

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