Abstract 2

UNIT LINK INSURANCE PLAN
Unit linked Insurance Plans And Detail analysis of different companies ULIPS Plan.
A Project Report Under the guidance of Prof. PINAL SHAH
Submitted By GAURANG RAVAL
In partial fulfilment of the requirement For the award of the degree Of MBA In Finance
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March 2011 ACKNOWLEDGMENT We are very much Thankful to our Prof. Pinal shah ( Project guide) for giving opportunity and his guidance help us out through preparing this report. He has provided us a valuable suggestions and excellence guidance about this project which proved very helpful to us to utilize Theoretical knowledge in Practical knowledge. At last Iam also thankful to Prof. Poonam Arora who has help me out for implementing the Two test in these project. I am also thankful to my friends, to all known & unknown individuals who has given me their consecutive advice, educative suggestion, encouragement, co-operation & motivation to prepare these report. I am highly obliged to my friends who helped and encouraged me in my study. They have played a vital role in making this Masters degree a very enjoyable experience.
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Last but not the least I would like to thank God- The Almighty for rendering all his blessings on me, which has helped me to achieve success in whatever I have pursued in life and wish to continue doing so in the future. Gaurang Raval:(520927178)
Certified that this project report titled Unit link insurance plan and detail analysis of different companies ULIPS plan is the bonafide work of GAURANG RAVAL project work under my supervision. who carried out the
Signature: Prof. B.N. Mehta

IBMR, AHMEDABAD
Signature: Prof. Pinal shah

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HEAD OF THE DEPARTMENT IBMR Business School Near Asia school Drive-in-road Ahmedabad-380054 FACULTY-IN- CHARGE IBMR Business School Near Asia School Drive-in-road Ahmedbad-380054
Examiners Certificate
Unit linked Insurance Plans And Detail analysis of different companies ULIPS Plan
By
GAURANG RAVAL(520927178)
Is approved and is acceptable in quality and form.

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Internal Examiner
External Examiner
Signature:
Signature:
ABSTRACT The project aims to make a detailed study of Unit Linked Insurance Plans (ULIPSs) in the Indian context, a comparative analysis of ULIPSs of some well known selected companies and in the process identify the strengths and weaknesses of ULIPs. a. ICICI PRUDENTIAL b. BAJAJ ALLIANZ c. BIRLA SUN LIFE INSURANCE CO. LTD
d. LIFE INSURANCE CORPORATION OF INDIA e. HDFC STANDARD LIFE The comparative study is primarily based in terms of the various benefits offered viz. Death Benefits, Health benefits, Maturity Benefits, financial benefits & other benefits. The various parameters taken into consideration were flexibility, transparency, liquidity and the number of funds options available. The project consists of a detailed analysis of the comparison of various ULIPSs of the selected major players in the market. The results of the project have been an outcome of a detailed analysis of collected secondary data and well supported by analysis of primary data collected through a survey in the Ahmadabad city. The project required me to design a questionnaire and conduct a primary survey. The survey was mainly conducted to study the consumer perception, opinion and awareness of various insurance products. The number of respondents targeted was 133.The sample of respondents included was carefully selected targeting respondents from all age groups. Also the preferences of the respondents towards these selected insurance companies have been noted and the reasons analyzed. Finally we interpreted the results of the project by combining both the primary and the secondary data analyses then identified the areas where the company is really strong and the areas where it needs to have a second look. We have also found out the amount to which each of the selected companies was affected due to the market slow down in the last one year.

The Project helped me enhance my knowledge on various technicalities of the Indian insurance industry and gave me a broader prospective of various investment opportunities available in the market.
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Chapter No. 1. Introduction 1.1 Purpose
Topic
Page No. 11-28 15 16 16 17 18 18-22 23-24 25-28
1.2 Scope of the study 1.3 objective of the study 1.4 Introduction of insurance 1.5 Characteristics of insurance 1.6 Present scenario of insurance market 1.7 A brief history of the insurance sector 1.8 life insurance company in India
2.
Introduction of unit link insurance plan 2.1Structure of ULIPSs 2.2 Types of fund under ULIPSs 2.3 Advantages of ULIPSs 2.4 Disadvantages of ULIPSs 2.5 Factor influencing in buying ULIPSs 2.6 Customer satisfaction model for ULIPSs 2.7 How to select the right ULIPS 2.8 ULIPS and mutual fund difference?
29-47 31-32 33-34 35 35 36-37 38-40 41-42 43-46 46 46 47
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2.9 ULIPS v/s regular insurance policy 2.10 ULIPS v/s fixed deposit 2.11ULIPS a better investment option for your money 3. 4. Research Methodology Detail analysis of different companies ULIPS plan 4.1 Introduction of insurance company 4.1.1 Bajaj Allianz life insurance company 4.1.2 Life insurance corporation of India 4.1.3 HDFC standard life insurance company 4.1.4 ICICI prudential life insurance company 4.1.5 Birla sun life insurance co.ltd 4.2 ULIPS plan of different companies 4.2.1 Birla sun life insurance co.ltd 4.2.2 Bajaj Allianz life insurance company 4.2.3 Life insurance corporation of India 4.2.4 HDFC standard life insurance company 4.2.5 ICICI prudential life insurance company 48-51 5253 54-55 56-58 59-60 61-63 64-65 66-69 70-71 72-75 76-84
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5. Primary data analysis and interpretation 5.1Primary data analysis 5.2 SWOT analysis 5.3 positioning 5.4 limitation of study 102-121 103-118 119 120-121 121
6.
Conclusion & Findings 6.1 conclusion 6.2 findings 6.3 Questionnaire for consumer perception in investment in ULIPS
122 124-125 126-127 128-131
7.
Bibliography
132-134
TABLE NO 1 2 3 4 5
TABLE CONTENT Nav analysis of Birla sun life insurance company Nav analysis of Bajaj Allianz life insurance company Nav analysis of Icici prudential life insurance company Nav analysis of HDFC standard life insurance company Nav analysis of life insurance corporation of India
PAGE NO 86 87 88 89 90
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6 7 8 9 10 ULIPS funds of insurance players Aum of insurance company Grievances resolved by insurance companies distribution of offices of insurance companies solvency ratio of insurance companies for 2008-2009 91 93 95 97 99
FIGURE NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
FIGURE CONTENT Insurance penetration in select company of Asia New business premium of life insurance Nav analysis of Birla sun life insurance company Nav analysis of Bajaj Allianz life insurance company Nav analysis of Icici prudential life insurance company Nav analysis of HDFC standard life insurance company Nav analysis of life insurance corporation of India Chart of ULIPS funds of insurance players Chart of insurance company Chart of Grievances resolved by insurance companies Chart of distribution of offices of insurance companies Chart of solvency ratio of insurance companies for 2008 Chart of insurance companies for 2009 Break-up of respondents between different age group
PAGE NO 19 22 86 87 88 89 90 92 94 96 98 100 101 104
Break up of respondents based on their preference for 106

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various saving instruments 16 17 18 19 20 21 22 23 24 Break-up of respondents based on factors influencing their 107 decision Break-up of respondents on preferences for various forms 108 of investment Break-down of respondents based on their frequencies of 109 investment Break-up respond of who have own insurance ULIPSs Break down of respondents who own insurance policies in 114 various life insurance companies Rating scale selected insurance companies about the term welthsurance Average frequency of investment among different age 118 groups 116 110
Break-down of respondents who rated risk involved in 111
Break-down of respondents with different perception 117
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CHAPTER:-1 INTRODUCTION
1 Introduction
Insurance is a Rs 450 billion industry in India. The value of the market is determined by gross premium incomes. With the de-regulation in Indian Insurance industry, the monopoly of public sector companies in life insurance and general insurance has come to an end. This has augmented the innovative practices initiated by the private players. Growth in the interactive technology such as internet has further crea
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ted a wave of excitement in the insurance market. Indian economy and Indian Insurance sector is committed to a double digit growth. The insurance companies in India are constantly revamping their strategies and coming out with innovative options to stay in the competition. There were days when Life Insurance Corporation of India (LIC) was the only insurance company available to people in India and where people synonymised Insurance to LIC. Also since it was a Public Sector Undertaking (PSU) it has a great support from people. But now times have changed a lot of private players have entered into the fray. There have been a lot of Indian companies collaborating with foreign insurance giants like ICICI Prudential, Bajaj Allianz, Birla Sun life etc. who have already made their presence felt in the Indian Insurance industry. Even though LIC is still the market leader with more than over 60% of the market share, the private players are giving it a tough time. Since the last decade the market share of LIC had fallen down by about more than 20%. The new private players have started offering a variety of unlimited schemes right from insurance plans for a 30 day old baby to that of a 70 year old senior citizen. Also the private companies have started creating the importance and need of insurance in todays life. They have started positioning their brands and are marketing their products in such a way the people have started feeling the need of security in their lives. Taking into account the huge population and growing per capita income besides several other driving factors, a huge opportunity is in store for the insurance companies in India. According to the latest research findings, nearly 80% of Indian population are without life insurance covering while health insurance and non-life insurance continues to be below international standards. And this part of the population is also
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subjected to weak social security and pension systems with hardly any old age income security. India is a vast market for life insurance that is directly proportional to the growth in premiums and an increase in life density. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant. It is due to globalization, deregulation and also terrorist attacks; that the insurance industry is undergoing a massive change and the metamorphosis has been noteworthy in the last few decades. The insurance sector in India has completed all the facets of competition from being an open competitive market to being nationalized and then getting back to the form of a liberalized market once again. The history of the insurance sector in India reveals that it has witnessed complete dynamism for the past two centuries approximately. With the establishment of the Oriental Life Insurance Company in Kolkata, the business of Indian life insurance started in the year 1818. The Indian insurance market in spite of having a history covering almost two centuries took a turn after the establishment of the Life insurance corporation in India in 1956. From being an open competitive market to being nationalized and then back to a liberalized market again, the insurance sector has witnessed all aspects of contest. The Indian insurance market conventionally focused around life range of other insurance policies
insurance until recently, a various
covering sectors like medical, automobile, health and other classes falling under

general insurance came up, generally provided by the private companies. The life insurance of India added 4.1% to the GDP of the economy in 2009, an immense growth since 1999, when the gates were opened for the private company in the market. The total number of life insurers registered with the Insurance Regulatory Development Authority (IRDA) has gone up to 23, with registration of the India First Life Insurance Company Limited, a joint venture life insurance company promoted by Bank of Baroda and Andhra Bank, India and Legal & General Middle East Limited, UK. . The Life Insurance Corporation (LIC) posted a 50 per cent growth in new premium collection in the first nine months of the 2010 fiscal, increasing its market share to 65 per cent from 56 per cent a year ago. LICs new premium collection touched US$ 9.58 billion in the April-December 2009 period while the combined business of the 22 private insurers grew to US$ 5.07 billion from the previous year, as per data collated by the Insurance Regulatory and Development Authority (IRDA). Overall the industry grew at 29 per cent in the April-December period of the fiscal year 2009. In the present scenario the most sought after insurance plans are the Unit Linked insurance Plans (ULIPSs). Unit Linked Insurance Products popularly known as ULIPSs are the most selling product in the Insurance market. Almost half of the Indian public invests in to ULIPSs. They sell like hot cakes in the Indian markets with their promise of giving market linked returns combined with the benefits of insuring your life in case of any unforeseen events. ULIPS stands for Unit Linked Insurance Policy. A ULIPS is a life Insurance policy which provides a mixture of risk

cover and investment. (ULIPSs) as an investment avenue are closest to mutual funds in terms of their structure and functioning. It has kind of revolutionized Indian insurance industry. A decade back almost all insurance plans sold in India was Endowment Plan; however, after private players entered into the industry and stock market boomed, ULIPSs displaced Endowment from its top position. Now over 60% of new plans sold in the country are ULIPSs. When we talk of Insurance as an investment option, ULIPSs have an important role as many of the investor nowadays goes for this as a profitable avenue. Investors can select a ULIPS with an equity-debt combination that is in line with their risk profile. A risk-taking investor would typically select one with a high equity component, while a risk-averse investor would opt for a debt-heavy one. Simply put, ULIPSs are structured in such a way that the protection element and the savings element are distinguishable, and hence managed according to your specific needs.
1.1 Purpose
The project is being done as a part of grand project of IBMR business school in Ahmadabad. The completion of the project is a partial fulfilment requirement for being awarded the Masters in Business Administration (MBA) degree from the university.
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UNIT LINK INSURANCE PLAN 1.2 SCOPE OF THE STUDY

This study aims to make a comparative study of the Unit Linked Insurance Plans (ULIPSs) of Selected Company with that of some major selected players in the Indian insurance market and study the consumer perception towards various insurance products. The comparative analysis is based on the empirical data collected from the Ahmadabad city. The study also aims to discuss in detail the various positioning strategies adopted by selected companies in general.
1.3 OBJECTIVES OF THE PROJECT

1. 2. 3.
Working of ULIPs To find how ULIPs plans differs from the other financial products. Whether the long term investment of the investor are beneficial through ULIPs plan. To compare the different companies ULIPs plans with each other. Find strength and weakness of ULIPs plan.
4. 5.
6. Study of the consumer perception towards various insurance products.
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1.4 INSURANCE
Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks which can be insured against include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. INSURANCE is a Co-operative device, which spreads, the loss caused by a particular risk to some person, over a number of person who are exposed to same or similar risk & who agree to 'insure' against that risk.
General Definition:In the words of D S Hansell, Insurance may be defined as a social device providing financial compensation for the effects of misfortune, the paying being made from the accumulated contributions of all participating in the scheme.
Contractual Definition:In the words of justice Tindall insurance is a contract in which a sum of money is paid to the assured as con sideration of insure incurring the risk of paying a large sum upon a given contingency.
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1.5 Characteristic of Insurance

1. Cooperative device. 2. Evaluation of risk. 3. Payment on happening of special event. 4. Sharing of risk. 5. The amount of payment depends on the nature of losses incurred.
1.6 Present scenario:

The insurance sector was opened up for private participation a decade back. For years now, the private players are active in the liberalized environment. The insurance market has witnessed dynamic changes, which include presence of a fairly large number of insurers both life, and non-life segment. Most of the private insurance companies have formed joint venture partnering wellrecognized foreign players across the globe.
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(Source: Annual report IRDA)
The insurance players are trying to balance the diverse objectives of providing enough incentives upfront to draw full time agents and at the same time ensuring that the commissions are spread over at increased rates to ensure persistency of service. With a huge population base and large untapped market, insurance industry is a big opportunity area in India for national as well as foreign investors. India is

the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new players significantly enhancing product awareness and promoting consumer education and information. The strong growth potential of the country has also made international players to look at the Indian insurance market. Moreover, saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players, according to "Booming Insurance Market in India (2008-2011).
Total life insurance premium in India is projected to grow Rs 1,230,000 crore by 2010-11. Total non-life insurance premium is expected to increase at a CAGR of 25% for the period spanning from 2008-09 to 2010-11.
With the entry of several low-cost airlines, along with fleet expansion by existing ones and increasing corporate aircraft ownership, the Indian aviation insurance market is all set to boom in a big way in coming years. Home insurance segment is set to achieve a 100% growth as financial institutions have made home insurance obligatory for housing loan approvals.
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Health insurance is poised to become the second largest business for nonlife insurers after motor insurance in next three years.
A booming life insurance market has propelled the Indian life insurance agents into the top 10 country list in terms of membership to the Million Dollar Round Table (MDRT) an exclusive club for the highest performing life insurance agents. (Source: http://www.marketsmonitor.com/Report/IM588_related.htm).
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(Source: Annual report IRDA).
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1.7 A brief history of the Insurance Sector

The business of life insurance in India in its existing from started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
Some of the important milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and nonlife insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 Crores from the Government of India. The General Insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company

established in the year 1850 in Calcutta by the British.
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Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies' viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
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LIFE INSURANCE COMPANY IN INDIA.

It 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-OPER TION in this sense story of insurance is probably as old as the story of mankind. All life insurance companies in India have to comply with the strict regulations laid out by Insurance Regulatory and Development Authority of India (IRDA). Therefore there is no risk in going in for private insurance players. In terms of being rated for financial strength like international players, only ICICI Prudential is rated by Fitch India at National Insurer Financial Strength Rating of AAA (Ind) with stable outlook indicating the highest claims paying ability rating
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. Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest player in the market. Among the private sector players, ICICI Prudential Life Insurance (JV between ICICI Bank and Prudential PLC)is the largest followed by Bajaj Allianz Life Insurance Company Limited (JV between Bajaj Group and Allianz). The private companies are coming out with better products which are more beneficial to the customer. Among such products are the ULIPSs or the Unit Linked Insurance Plans which offer both life cover as well as scope for savings or investment options as the customer desires. Further, these types of plans are subject to a minimum lock-in period of three years to prevent misuse of the significant tax benefits offered to such plans under the Income Tax Act. Unlike the mutual fund product that has a very simple cost structure, ULIPSs carry a greater number of costs (administration and mortality), in addition to the others. So comparing ULIPSs with mutual funds is erroneous. (Source: http://www.scribd.com/doc/136703/IndianInsurance-Changing-Trends-and-a Fresh- Perspective) Right now there are a total twenty two life insurance companies operating in India, of which one (Life Insurance Corporation) is a Public Sector Undertaking and the remaining twenty are all private sector enterprises. (Source: www.irdaindia.org)
List of life insurance companies in India

1. AEGON RELIGARE

2. AVIVA 3. BAJAJ ALLIAZ 4. BHARATHI AXA 5. BIRLA SUN LIFE 6. FUTURE GENERALI 7. HDFC STANDARD LIFE 8. HSBC 9. ICICI PRUDENTIAL 10. IDBI FORTIS 11. ING VYSYA 12. KOTAK LIFE INSURANCE 13. LIC 14. MAX NEWYORK LIFE 15. MET LIFE 16. RELIANCE LIFE 17. SAHARA INDIA 18. SBI LIFE 19. SHRIRAM LIFE 20. TATA AIG LIFE 21. DLF PRAMERICA 22. CANARA HSBC OBC Table 2: The list of life insurance companies in India
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CHAPTER:-2 UNIT LINK INSURANCE PLAN
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2 UNIT LINKED INSURANCE PLANS

Unit linked insurance plan (ULIPS) 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). ULIPSs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPSs, a part of the investment goes towards providing a life cover. The residual portion of the ULIPS is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by the customer. Simply put, ULIPSs are structured in such that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIPS plan offers unprecedented flexibility and transparency. ULIPSs 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 ULIPS 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 todays times ULIPS provides solution for all the needs of a client like insurance planning, financial needs, financial planning for childrens future and retirement planning.
2.1 Structure of ULIPSs

ULIPSs offered by different insurers have varying charge structures. Broadly the different types of fees and charges are given below. However the insurers

have the right to revise or cancel the fees and charges over a period of time. 1) Premium Allocation Charge The cost structure of ULIPSs is such that it starts working to your benefit only after 5-8 years of investing. A part of your premium payment goes into Premium Allocation Charge, which is calculated as a percentage of the premium. This percentage is generally higher in the first few years-the main reason: it takes years to break even on investments. It could be as high as 40% of each year's premium. 2) Policy Administration Charge A monthly fixed amount that usually rises every year with inflation or as a percentage of Sum assured. These are the fees for the administration of the plan and levied by the cancellation of the units. This could be flat throughout the policy term or vary at a pre-determined rate. 3) Mortality/ Rider charge ULIPSs also have Mortality/Rider charge which depends on age, gender and the level of risk cover in a particular year. If you don't avail risk cover, mortality charges can be zero. The mortality charge per Rs 1,000 of the sum assured varies from 1.3 for a 30-year-old to 6.4 for a fifty-year-old. 4) Fund Management Charge These are levied for the management of fund(s) and are deducted before arriving at the Net Asset Value (NAV). 5) Surrender charges A surrender charge may be deducted for premature partial or full encashment of units whenever applicable, as mentioned in the policy conditions.
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Premium
6) Fund Switching charges Generally a limited number of fund switches may be allowed each year without any charge, with subsequent switches, subject to a charge. But now a days many insurers offer fund switching free of cost. 7) Service tax deduction Before allotment of the units the applicable service tax is deducted from the risk portion of the premium.
2.2 TYPES OF FUNDS UNDER ULIPSs


Most insurers offer a wide range of funds to suit ones investment objectives risk profile and time horizons. Different funds have different risk profiles. The potential for returns also varies from fund to fund. The following are some of the common types of funds available along with an indication of their risk characteristics. (Source: www.irdaindia.org) General description Equity Funds Nature of investments Primarily company High stocks with the general aim of Capital appreciation. Income, Fixed Interest Invested and Bond Funds bonds, in corporate Medium government invested Medium to Risk category in Medium to High
securities and other Fixed instruments Cash Funds Sometimes known as Low Money Market Funds invested in cash, bank deposits and
income

money market instruments Balanced
Long term wealth creation Insurance + Investment + Investment Allow Top ups
Riders
Advantages of ULIPs
Flexibility
Transparency
Tax Benefits
Premium holiday
Guaranteed capital Returns
Invest as per your Risk appetite
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2.3Advantages
1. The accretion to the fund invested can be checked on daily basis unlike the traditional policies. 2. There is lot more flexibility like partial withdrawal, switching, redirection, early withdrawal, Sum Assured reduction, top up contribution, etc. 3. Charges are transparent in nature, with the latest AML guidelines insisting on common nomenclature of charges for all insurance companies. 4. The customer can time the market by exercising switch options and make the most when markets are zooming or choose to be conservative when markets are falling. its thus win-win situation 5. He gets a life cover at a nominal cost unlike mutual funds, 6. Almost all companies provide riders like accidental death and disability/dismemberment riders, critical illness rider, hospital cash benefit rider, income loss rider, etc 7. Stages in one life like education of children, marriage, and retirement needs can be soundly planned by the help of ULIPSs. 8. Tax advantages are also offered by the ULIPSs.
2.4 Disadvantages

1. Investors find it difficult to understand the nuances of capital market and therefore go by the herd mentality. i.e., they invest because their friends and family is investing without understanding how ULIPSS are designed. 2. ULIPSS are attractive for risk taking people and less attractive for risk averse people. 3. Some consider taking term insurance and a mutual fund as a combination to beat the ULIPS. 4. Some consider charges levied exorbitant and not commensurate to the returns offered 5. The complicated design of the polices make them less aware of the product features and chances of misselling by agents are very high.
2.5 Factors Influencing in buying of ULIPSs

Age and experience of policyholder. Occupation. Income. Perception about insurance.
Promotion of ULIPSs by the Insurance companies.
Education. Market condition.
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A good ULIPS has following features:
A ULIPS customer is by nature risk averse. Therefore unlike other fund managers the fund manager of ULIPS has a more strict approach to fund management.
A good fund manager should have the following attributes: He must strike a good balance between risk and return. Minimise risk while assuring reasonable returns. To exploit the tax provision to the best capability.
Have a long term approach to investment

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2.6 Customer satisfaction model for ULIPS

It is very important for anyone to measure what they are offering in terms of product or the service. Until unless they measure there is no room for the improvement. Now the question arises how to measure? Well the answer to that can be many depending upon the person to persons perception. In my point of view, the answer to this question can be given by the KANO MODEL OF CUSTOMER SATISFACTION, which classifies the product attributes based on how they are perceived by customers and their effect on the customer satisfaction. These classifications are the indications of when good is good enough, and when more is better. In case of measuring the customer satisfaction for a ULIPS product, KANO MODEL can be handy. Kano Model of Customer satisfaction divides the product attributes in three categories: threshold, performance and excitement. A competitive product meets basic attributes, maximises performances attributes, and includes as many excitement attributes as possible at a cost the market can bear. THRESHOLD / MUST-HAVES ATTRIBUTE: Threshold (or basic) attributes are the expected attributes or musts of a product, and do not provide an opportunity for product differentiation. Increasing the performance of these attributes provides diminishing returns in terms of customer satisfaction; however the absence or poor performance of these attributes results in extreme customer dissatisfaction.
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For the ULIPSs Threshold attributes can be: Tax benefits. Insurance + Investment.
PERFORMANCE / LINEAR SATISFIER ATTRIBUTES: Performance attributes are those for which more is generally better, and will improve customer satisfaction. Conversely, an absent or weak performance attribute reduces customer satisfaction. Performance attributes for the ULIPSs can be: Capital returns Long term wealth creation. Riders. Investment as per risk appetite of investor.
EXCITEMENT / DELIGHTER ATTRIBUTES: Excitement attributes are unspoken and unexpected by customers but can result in high levels of customer satisfaction, however their absence does not lead to dissatisfaction. Excitement attributes often satisfy latent needs real needs of which customers are currently unaware.

Excitement attributes for the ULIPSs: 1. Premium holiday. 2. Top-ups. 3. Partial withdrawals. 4. Transparency.
(Source: MarketingTool_Kano_Generic.pdf)
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2.7 How To Select The Right ULIPS

For a product capable of adding significant value to investors' portfolios, ULIPSs have far too many critics. We at Person if have interacted with a number of investors who were very disillusioned with their ULIPSs investments; often the disappointment stemmed from poor and inappropriate selection. We present a 5-step investment strategy that will guide investors in the selection process and enable them to choose the right ULIPS. 1. Understand the Concept of ULIPSs Do as much homework as possible before investing in an ULIPS. This way you will be fully aware of what you are getting into and make an informed decision. More importantly, it will ensure that you are not faced with any unpleasant surprises at a later stage. Our experience suggests that investors on most occasions fail to realise what they are getting into and unscrupulous agents should get a lot of 'credit' for the same.

Gather information on ULIPSs, the various options available and understand their working. Read ULIPS-related information available on financial Web sites, newspapers and sales literature circulated by insurance companies. 2. Focus On Your Need And Risk Profile Identify a plan that is best suited for you (in terms of allocation of money between equity and debt instruments). Your risk appetite should be the deciding criterion in choosing the plan. As a result if you have a high risk appetite, then an aggressive investment option with a higher equity component is likely to be more suited. Similarly your existing investment portfolio and the equity-debt allocation therein also need to be given due importance before selecting a plan. Opting for a plan that is lop-sided in favor of equities, only with the objective of clocking attractive returns can and does spell disaster in most cases. 3. Compare ULIPS Products from Various Insurance Companies Compare products offered by various insurance companies on parameters like expenses, premium payments and performance among others. For example, information on premium payments will help you get a better picture of the minimum outlay since ULIPSs work on premium payments as opposed to sum assured in the case of conventional insurance products. Compare the ULIPSs' performance i.e. find out how the debt, equity and balanced schemes are performing; also study the portfolios of various plans. Expenses are a significant factor in ULIPSs; hence an assessment on this parameter is warranted as well.
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Enquire about the top-up facility offered by ULIPSs i.e. additional lump sum investments which can be made to enhance the policy's savings portion. This option enables policyholders to increase the premium amounts, thereby providing presenting an opportunity to gainfully invest any surplus funds available. Find out about the number of times you can make free switches (i.e. change the asset allocation of your ULIPS account) from one investment plan to another. Some insurance companies offer multiple free switches every year while others do so only after the completion of a stipulated period. 4. Go For An Experienced Insurance Advisor Select an advisor who is not only conversant with the functioning of debt and equity markets, but also independent and unbiased. Ask for references of clients he has serviced earlier and cross-check his service standards. When your agent recommends a ULIPS from a given company, put forth some product-related questions to test him and also ask him why the products from other insurers should not be considered. Insurance advice at all times must be unbiased and independent; also your agent must be willing to inform you about the pros and cons of buying a particular plan. His job should not be restricted to doing paper work like filling forms and delivering receipts; instead he should keep track of your plan and offer you advice on a regular basis. 5. Does Your ULIPS Offer A Minimum Guarantee?
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In a market-linked product, protecting the investment's downside can be a huge advantage. Find out if the ULIPS you are considering offers a minimum guarantee and what costs have to be borne for the same.
2.8 ULIPS and Mutual Funds difference?

In structure both ULIPS and Mutual Funds looks similar. But, in objective they are different. Because of the high first-year charges, mutual funds are a better option if you have a five-year horizon. But if you have a horizon of 10 years or more, then ULIPSs have an edge. To explain this further a ULIPS has high first-year charges towards acquisition (including agents commissions). As a result, they find it difficult to outperform mutual funds in the first five years. But in the long-term, ULIPS managers have several advantages over mutual fund managers. Since policyholder premiums come at regular intervals, investments can be planned out more evenly. Mutual fund managers cannot take a similar long-term view because they have bulk investors who can move money in and out of schemes at short notice. Unit Linked Insurance Plan, popularly called ULIPS, it is to be borne in mind that ULIPSs being a market linked instrument will fetch good returns on a long term basis. The basic advantage of a ULIPS over other investment instruments is that it offers the twin benefits of life insurance as well as an investment. Apart from that, there are a number of ways in which ULIPSs can prove to be advantageous over Mutual Funds, Regular Insurance Policies and Fixed Deposits. TYPE ULIPS MUTUAL FUND
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Description Unit Linked Plans refer Plans offered by insurance companies. These plans allow their premiums into different types of funds (equity, debt, money market, hybrid etc.) Objective Unit Linked Plans are long term plans offering you a dual benefit of insurance and investment. Tax Benefit: All Unit Linked Plans offer tax benefits under section 80C. Switching options: Unit Linked Plans allow you to switch your investment between the funds linked to the plan. This enables you to change the riskreturn. Only investments in tax saving funds are eligible for section 80C benefits. No switching option is available. If you are not satisfied with the performance of the fund you can exit completely from the same by paying exit charges, if applicable.
A mutual fund pools the and uses it to invest in various securities according to a preobjective.
to Unit Linked Insurance money from investors
investors to direct part of specified investment
Mutual funds are ideal investment tool for the short to medium term.

Additional Benefits Some of the Unit Linked Plans give you an additional benefit or loyalty benefit by issuing extra fund units. Liquidity Unit Linked Plans have limited liquidity. One a minimum period of time as specified in the policy before redeeming the units. Charges structure Charges in a unit linked plan include mortality charges for the life insurance provided. In addition, premium allocation charge, fund management charge and administration charges are applicable. Benefit Snapshot:
There are no additional benefits issued by mutual funds
You can easily sell mutual fund units funds that have a minimum lock-in period)
needs to stay invested for (except for ELSS and
Mutual fund charges include an entry load, the annual fund management charge and an exit load, if applicable.
Dual
benefit
of and the
Investment
tool
investment insurance Suitable for long term

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suitable for short to medium term. Easy exit possible. Tax benefit
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Option to switch between the funds is permitted. Offers tax benefits available only on tax saving funds
2.9ULIPS v/s REGULAR INSURANCE POLICY

ULIPSs and Traditional policies both work alike. A part of the premium is set aside for life cover and the rest is invested in a fund after deducting charges. The main advantage of a ULIPS is that the investor knows exactly about the break-up of his premium into life cover, the fees being paid and the amount being invested in a fund. The performance of the funds can also be tracked as the returns are linked to the market performance. On the other hand, in traditional policies, no information about the break-up of charges is shared with the investor. He also does not know whether the bonuses paid to him every year are all that his fund has made or whether the company is giving him only a share of the profits. Policies encourage savings whereas ULIPSs take the investment path and hence have higher growth options.
2.10 ULIPS v/s FIXED DEPOSIT

There is always a degree of risk, however small, involved in a ULIPS. Traditionally, investors preferred investing in safer instruments like Fixed Deposits, despite the lower returns. But Fixed Deposits are able to only beat the inflation. On the other hand a ULIPS is a market-linked plan with an equity exposure. A plan with an equity exposure for a long term usually consistently

gives better returns than any other asset like Fixed Deposit or Bonds.
2.11 ULIPs a Better Investment Option for Your Money

Maxi miser: 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
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CHAPTER: - 3 RESEARCH METHODOLOGY
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Research Methodology Types of research

This research will be Descriptive research.
Source of data.
In the data collection method, we have collected both primary and secondary data to meet our objectives
Primary Data
The primary data was collected by a survey based on the questionnaire. It was formulated on the basis of information carefully gathered by me about the various mindsets of the people. This questionnaire was mainly formulated to target the common man to see his perception and awareness of various investment options available. The number of respondents targeted was around 150 and the survey was confined to Ahmadabad city.
Secondary Data
It refers to the information gathered from sources already existing, for example, company records, media website, internet etc. The purpose of secondary data collection and analysis is called desk research.
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This project is based on secondary data sources like company websites, internet blogs, journals, articles and reports.
Sampling.
The techniques used for data collection are: A. Internet surveys and B. Questionnaire method The following methodology has been followed to achieve the objectives of the project. Step: 1 Developing a right research design and timeline for the project. Step: 2 Collecting Secondary data of the insurance Industry Step: 3 Designing of the Questionnaire Step: 4 Analysis of secondary data Step: 5

Pilot Study Step: 6 Collection of primary data-Questionnaires and internet surveys Step: 7 Analysis of primary data Step: 8 Study of positioning strategies of selected company Step: 9 Interpretation of the results Step: 10 Preparation of the final report
Literature review
There are many scholars who already have put their efforts and thoughts before this study, to give detail information about the Indian Insurance industry. The materials for this study were collected from various internet sites, journals, and books by various authors. Mr. Sathak Mohanty, researcher whose efforts and work on the Risk profile of the ULIPSs and insurance as an investment option cannot be ignored to get insight about the ULIPSs. As he says that Life Insurance Corporation of India (LIC) is still undisputed leader in the Insurance Industry in Indian context. It is quite true but the private players are really
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coming with great products to offer customers and to strengthen their position in the market. While this study was done, various studies on the products of TATA-AIG and HDFC standard life have also been referred. Many articles from the experts of Insurance industry and the SEBI and the regulatory body of Insurance IRDA were referred to get the knowledge about recent developments and changes in the ULIPSs. Similarly, several e-newsletters were also subscribed to get the detail idea about the insurance industry. As for the positioning strategies are concerned books on Marketing management by Philip Kotler and Marketing research by Naresh Malhotra were referred to gain a deeper insight. A lot of efforts were put to study the various products offered by the insurance players.
CHAPTER:-4
DETAIL ANALYSIS OF DIFFERENT COMPANIES ULIPS PLAN.
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4.1
INTRODUCTION
OF
BAJAJ
ALLIANZ
LIFE
INSURANCE COMPANY
BAJAJ Allianz Life Insurance Company is a joint venture between two leading conglomerates, Bajaj Auto Limited, one of largest manufactures of motorcycles and scooters in the world, and Allianz AG of Germany one of the largest insurance companies. Bajaj Allianz Life Insurance Co. Ltd. was incorporated on 12th March 2001. The company received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) No 116 on 3rd August 2001 to conduct Life Insurance business in India. Bajaj Allianz Shareholder Capital Base stands at Rs. 500 crore with Bajaj Auto Limited and Allianz AG of Germany holding 74% and 26% stake respectively. It is the largest private player in the Insurance Industry in India with a market share of around 34% amongst the private companies and second to LIC. The total market share of Bajaj Allianz as of 31st March 2006 is at 12%.
During the financial year 2005-2006, Bajaj Allianz has sold over 13 lakh policies and collected about Rs. 4433 crore as premium income. Whopping growth of 216% for the FY 2005-06, Assets under management of Rs. 3324 Crore. It has paid up Rs 925 crores with IRDA as a caution deposit. Bajaj Allianz has insured lives for sum assure of over Rs 8500 crore.
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4.2 INTRODUCTION OF LIFE INSURANCE CORPORATION (LIC) OF INDIA
Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great

poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crores, it rose to 176 companies with total business-in-force as Rs.298 crores in 1938. LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Re-organization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crores mark of new business. But with re-organization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crores Sum Assured on new policies.
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4.3 INTRODUCTION OF HDFC STANDARD LIFE INSURANCE COMPANY.

HDFC and standard life insurance first came together for a possible joint venture, to enter life insurance market, in January 1995. It was clear from the outset both companies shared values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3-year joint venture agreement. Around this time standard life purchased a 5% stake in HDF, further strengthening the relationship. The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development Authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture. In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time standard life purchased 2%of Infrastructure Development Finance Company Ltd. (IDFC) standard Life also started to use the services of the HDFC Treasury department to advise them upon their investment in India. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to moves the operation to the next level. Therefore in January 2000 an export team from the UK joined pocked team from HDFC from the core project team, based in Mumbai. Around this time standard life purchased a further 5% stake in HDFC and 5% stake in HDFC Bank. In a further development standard

life agreed to participates in the Asset Management Company promoted by HDFC to enter the mutual fund market. The mutual fund was launched on 20th July 2000. The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited. Companys ambition from as far back as October 1995, was to be first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realized when HDFC Standard Life Insurance was the only life company to be granted a certificate of registration. HDFC are the main shareholders HDFC Standard Life, with 81.4%while standard Life owns 18.6% Given Standard Lifes existing investment in the HDFC Group, this is the maximum investment under current regulations. HDFC and standard life have a long and relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured.
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4.4
INTRODUCTION
OF
ICICI
PRUDENTIAL
LIFE
INSURANCE COMPANY
ICICI Prudential Life Insurance Company is a joint between ICICI Bank, one of the foremost financial services companies of India and Prudential plc, one of the leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector life insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital stands at Rs. 4,780 crores (as of September 30, 2010) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 1, 2010 to September 30, 2010, the company garnered Rs 7,267 crores of total premiums and has underwritten over 10 million policies since inception. The company has a network of over 1,500 offices and over 1, 60,000 advisors, as on September 30, 2010. The company has assets held over Rs. 65,000 crores as on September 30, 2010. For the past nine years, ICICI Prudential Life has maintained a wide range of Life Insurance products that meet the needs of the Indian customer at every step in life. ICICI Prudential Life recently completed 10 years on the Indian Insurance scope on 12th December 2010. Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance has been one of the earliest private players. Since the time, ICICI Pru Life has been the leader in terms of market share as indicated by the IRDA

(Insurance Regulatory and Development Authority, the regulator for Indian Insurance Industry) at its website. During 2007-08, the organization's focus on rural business has proved its complex project execution capability and strong partnerships for customer servicing. In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK Healthcare to settle insurance claims of its users. ICICI Prudential's life insurance products may be loosely categorized under three forms- Health Insurance, Life and Retirement. Under the Health Insurance category it offers products like ICICI Pru Health Saver & ICICI Pru MediAssure. Under the Retirement Insurance category it offers products like ICICI Pru Forever Life & ICICI Pru LifeLink Pension. Under the Life Insurance Category it offers plans like i-Protect term plan, PureProtect and Life Guard.
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4.5 INTRODUCTION OF BIRLA SUN LIFE INSURANCE CO. LTD.

Established in 2000, Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla Group, a well known and trusted name globally amongst Indian conglomerates and Sun Life Financial Inc, leading international financial services organization from Canada. The local knowledge of the Aditya Birla Group combined with the domain expertise of Sun Life Financial Inc., offers a formidable protection for its customers future. Birla Sun Life Insurance Company (BSLI) is an industry leader and ranks among the top five private players with a market share of 8.4 per cent in terms of new business premium for FY 2009-10. Since its inception, it has been credited for innovation in products and services. The company offers a spectrum of products to meet the growing needs of individuals and group customers through a multichannel distribution network. In recent times, the company has quadrupled the distribution network to 600 branches and more than 170,000 advisors. With a rapidly growing national footprint, the company is now positioned to capture an increased market share in the fast growing life insurance market.

BSLI enjoys the support of over 675 corporate agents that include Citibank NA, Deutsche Bank, Catholic Syrian Bank, Karur Vysya Bank, Development Credit Bank, Bajaj Capital, BSDL Insurance Advisory Services, Karvy Insurance, Anand Rathi and Angel Broking. With an experience of over 9 years, BSLI has contributed significantly to the growth and development of the life insurance industry in India and currently ranks amongst the top 5 private life insurance companies in the country. Known for its innovation and creating industry benchmarks, BSLI has several firsts to its credit. It was the first Indian Insurance Company to introduce Free Look Period and the same was made mandatory by IRDA for all other life insurance companies. Additionally, BSLI pioneered the launch of Unit Linked Life Insurance plans amongst the private players in India. To establish credibility and further transparency, BSLI also enjoys the prestige to be the originator of practice to disclose portfolio on monthly basis. These category development initiatives have helped BSLI be closer to its policy holders expectations, which gets further accentuated by the complete bouquet of insurance products (viz. pure term plan, life stage products, health plan and retirement plan) that the company offers. Add to this, the extensive reach through its network of 600 branches and 1,75,000 empanelled advisors. This impressive combination of domain expertise, product range, reach and ears on ground, helped BSLI cover more than 2 million lives since it commenced operations and establish a customer base spread across more than 1500 towns and cities in India. To ensure that our customers have an impeccable experience, BSLI has ensured that it has lowest outstanding claims ratio of 0.00% for FY 2008-09. Additionally, BSLI has the

best Turnaround Time according to LOMA on all claims Parameters. Such services are well supported by sound financials that the Company has. The AUM of BSLI stood at Rs. 8165 crs as on February 28, 2009, while as on March 31, 2009, the company has a robust capital base of Rs. 2000 crs. Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of December 31, 2008, the Sun Life Financial group of companies had total assets under management of CDN$381 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE), and Philippine (PSE) stock exchanges under ticker symbol SLF.
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4.6 UNIT LINKED INSURANCE PLANS (ULIPSs) OF DIFFERENT COMPANIES 4.6.1 BIRLA SUN LIFE INSURANCE CO. LTD.
BIRLA SUN LIFE has different variety of schemes and a good range of ULIPSs under the flagship banner Wealth with protection. There are lot of other ULIPSs under Protection solution, Childrens Future solutions, Retirement solutions, Health & wellness solutions but as our study is only confined to study and comparative analysis of ULIPSs under wealth with protection we would just be discussing about various plans under Wealth with protection. As discussed earlier Wealth with protection plan enables investors not only to save but also to build wealth for their future financial goals. However, unlike other investment alternatives, it also enables him to achieve his financial goals even in the event of unexpected death, accidents, disablements or serious illness.

Wealth with Protection plan can ensure that his plans for wealth creation are achieved by protecting that plan with insurance benefits. Wealth with Protection is one of its kind in India. The company offer 10 investment options and 5 protection benefits under the plan apart from tax benefits.Under Wealth with Protection there are a lot of different funds available which are explained below:
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WEALTH WITH PROTECTION MIN ENTRY AGE 30 DAYS MAX ENTRY AGE 65 YEARS MIN PREMIUM 10000 MAX MATURITY AGE 30 YEARS MIN PREMIUM PAYMENT TERM 5 YEARS TYPES OF FUNDS Income Advantage,Assure, Maximiser, Multiplier, Enhancer, Protector, Builder, Creator, Magnifier, Super20.
4.6.2 BAJAJ ALLIANZ LIFE INSURANCE COMPANY
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BAJAJ ALLAINZ OFFERS FIVE TYES OF ULIPSs

a. UNIT GAIN PLUS GOLD b. UNIT GAIN PREMIER c. CENTURY PLUS d. NEW UNIT GAIN PLUS e. PENSION GUARANTEE
UNITGAIN PL US MIN entry age Max entry age 60 years Max maturity age 70 years Min premium No. of funds Riders 6 (AFTER 18) Min premiumpayment term
12000 6 3
U ITG INP E IE N A RM R MINentrya e g Ma entrya e x g Ma m tu a e x a rity g Minprem ium No. of fund s R iders Minprem p y en term ium a m t
0 6 0 7 0 500 00 3 NM 3Y AR E S
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CE UR PL NT Y US MIN entry age Max entry age Max maturity age Min premium No. of funds Riders ADBR 8 60 70 25000 7
Min premiumpayment term 3YEARS
NE UNITGAIN PL W US MIN entry age Max entry age Max maturity age Min premium No. of funds Riders ADBR,WOP,
0 60 70 10000 7
CIBR,FIB,HCB,PDB Min premiumpayment term 3YEARS
PE ION GUAR E NS ANT E MIN entry age 45 Max entry age 80 Max maturity age NA Min premium 25000-PURCHASE PRICE No. of funds NM Riders NM Min premiumpayment term NM
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ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider, NM-Not Mentioned, WOP-Waiver of Premium, FIB-Family Income Benefit, HCB-Hospital Cash Benefit, PDB-Permanent Disability Benefit (Source: www.bajajallianz.com)
Comparative Analysis
UNIT GAIN PLUS GOLD 1)Max entry age in Wealth with protection is 65 years as compared to 60 . 2)Min premium amount in Wealth with Protection is Rs.10000 While in Unit gain plus it is Rs12000. CENTURY PLUS 1)Min entry age in Wealth with Protection is 30 days where as In Century Plus it is 8 years. 2)Min premium in Wealth with Protection is 10000, while in Century plus it is 25000. NEW UNIT GAIN PLUS Max entry age in this is 60 years where as in Wealth 1) with Protection is 65 years. 2) Number funds in Wealth with protection is 10 where as in
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Unit Gain Plus is only 7. 3) Allocation charge in Wealth with Protection is upto 15%, while in New Unit Gain Plus it is 55%. UNIT GAIN PREMIER 1)Min premium is 50000 in Unit Gain Premier, but in Wealth with Protection it is only 10000. 2) Max entry age is 60 years, where as in Wealth with Protection this age is 65 years. PENSION GUARANTEE 1) 1) Wealth with Protection can be customised for 2) Retirement Planning.
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4.6.3 LIFE INSURANCE CORPORATION (LIC) OF INDIA
LIC OFFERS THREE DIFFERENT TYPES OF ULIPS

a. MARKET PLUS b. PROFIT PLUS (RP & SP) c. FORTUNE PLUS
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MARKET PLUS
Min Entry age Max Entry age Max Maturity Min premium No. of funds Riders Min premiumpayment term 18years 70years 75years 5000RP 10000SP 4 ADBR 3
PROFIT PLUS(RP&SP)
Min Entry age Max Entry Age Max maturity Min Premium 0years 60years 70,75years 1500RP 40000SP No. of funds 4 Riders ADBR,CIBR Min payment term 3
Fortune Plus
Min Entry age Max Entry age Max Maturity Min premium 12years 60years 65years 20000
No. of funds 4 Riders ADBR Min premiumpayment term 5years
ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider (Source: www.licindia.com)
MARKET PLUS 1) Premium allocation charge in this product is 16.4%
whereas in Wealth with Protection is 15%. 2) There is no Riders in both the plans. 3) After 3 premium payment terms partial withdrawal is
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allowed in Wealth with Protection, not with Market Plus. PROFIT PLUS(RP&SP) 1) Max premium charge in this product is 24% while, in Wealth With protection it is only 15%. 2) Under Wealth with Protection no charge is levied for Withdrawal, switching and premium re-direction. FORTUNE PLUS 1) Minimum entry age in this plan is 12 years while in Wealth With protection is 30 days. 2) Max entry age is 60 years whereas in Wealth with
protection is 65 years. 3) Min premium to be paid in this plan is 20000 where as in Wealth with Protection is only 10000.
4.6.4 HDFC STANDARD LIFE INSURANCE COMPANY HDFC STANDARD LIFE OFEERS FOUR DIFFERENT TYPES OF ULIPSs
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a. ENDOWMENT PLUS II b. ENHANCED LIFE PROTECTION II c. UNIT LINKED PENSION RP d. UNIT LINKED PENSION SP
ENDOWMENT PLUS
Min entry age Max entry age Max maturity age Min premium NO. of funds Riders Min premiumpayment term 18years 65years 75 12000 7 ADBR,CIBR TERM
ENHANCED LIFE PROTECTION

Min entry age 18 Max entry age 45 Max maturity age 75 Min premium 12000 NO. of funds 7 Riders NO Min premiumpayment term TERM
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UNIT LINKED PENSION RP
Min entry age 18 Max entry age 65 Max maturity age 75 Min premium 12000 NO. of funds 7 Riders NO Min premiumpayment term TERM
UNIT LINKED PENSION SP

Min entry age 18 Max entry age 70 Max maturity age 75 Min premium NM NO. of funds 7 Riders NO Min premiumpayment term TERM
ADBR-Accidental Death Benefit Rider, CIBR-Critical Illness Benefit Rider (www.hdfcstandardlife.com)
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ENDOWMENT PLUS II 1) Min entry age in Wealth with Protection is 30 days while is Endowment plus it is 18 years. 2) Premium allocation charge in this is 40% but in Wealth with protection is only 15%. 3) Min premium in Wealth with Protection is 10000 While in this it is 12000. ENHANCED LIFE PROTECTION II 1) Min entry age is 18years in this product while in Wealth with protection it is 30 days. 2) Min premium in Wealth with Protection is 10000 While in this it is 12000. 3) Premium allocation charge in this is 40% but
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in Wealth with protection is only 15%. 4) In Wealth with protection after 3 years unlimited partial withdrawals are allowed where as in this product the customer needs to wait till the 5th year. UNIT LINKED PENSION RP 1) Annuity is taxable whereas all the funds in Wealth with protection is tax exempted. 2) Min premium in Wealth with protection is 10000 As against 12000 in this product. 3) Both have no riders. UNIT LINKED PENSION SP 1) Min premium is 10000 in Wealth with Protection While in this 12000. 2) Both the product has no riders.
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4.6.5 ICICI PRUDENTIAL LIFE INSURANCE COMPANY
ICICI PRUDENTIAL OFFERS ELEVEN DIFFERENT TYPES OF ULIPSs
a. LIFE TIME GOLD b. LIFE LINK SUPER c. PREMIER LIFE GOLD d. LIFE TIME PLUS e. LIFE STAGE
f. SMART KID CHILD PLAN g. LIFE TIME SUPER PENSION h. LIFE STAGE RP PRNSION i. LIFE STAGE RP j. LIFE STAGE ASSURE k. INVEST SHEILD LIFE NEW
LIFE TIME GOLD
Min entry age 0 Max entry age 65 Max maturity age 75 Min premium 20000 No. of funds 7 Riders ADBR,CIBR,WOP Min premiumpayment term 3YEARS
LIFE LINK SUPER

Min entry age 0 Max entry age 65 Max maturity age 70 Min premium 50000 No. of funds 7 Riders NO Min premiumpayment term SP
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PREMIER LIFE GOLD
Min entry age 0 Max entry age 65,69 Max maturity age 75 Min premium 10000 No. of funds 7 Riders ADBR,CIBR,WORP Min premiumpayment term 3,5YEARS
LIFE TIME PLUS

Min entry age 0 Max entry age 65 Max maturity age 75 Min premium 20000 No. of funds 7 Riders ADBR,CIBR Min premiumpayment term 3YEARS
LIFE STAGE
Min entry age 0 Max entry age 65 Max maturity age 75 Min premium 15000 No. of funds 7 Riders ADBR,CIBR Min premiumpayment term LIFE BASED
SMART KID CHILD PLAN

Min entry age 0 Max entry age 15 Max maturity age 25 Min premium 12000 No. of funds 7 Riders ADBR,CIBR,WOP Min premiumpayment term 3 YEARS
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LIFE TIME SUPER PENSION
Min entry age 18 Max entry age 65 Max maturity age 45YRS VESTINGAGE Min premium 15000 No. of funds 7 Riders ADBR,CIBR Min premiumpayment term 3YEARS
LIFE STAGE RP PENSION

Min entry age 18 Max entry age 70 Max maturity age 50-80YRS VESTINGAGE Min premium 15000 No. of funds 6 Riders NO Min premiumpayment term 3YEARS
LIFE STAGE RP
Min entry age 0 Max entry age 75 Max maturity age 75 Min premium 15000 No. of funds 6 Riders ADBR,CIBR Min premiumpayment term 3
LIFE STAGE ASSURE

Min entry age 0 Max entry age 65 Max maturity age 75 Min premium 10000 No. of funds 7 Riders ADBR,CIBR Min premiumpayment term 3YEARS
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INVEST SHIELD LIFE NEW
Min entry age 0 Max entry age 65 Max maturity age 75 Min premium 12000 No. of funds 6 Riders NM Min premiumpayment term 3
LIFE TIME GOLD 1) Premium allocation charges is premium based in this Product, whereas in Wealth with Protection it decreases With higher premium. 2) Min premium is 20000 whereas in Wealth with Protection it is only 10000. 3) In Wealth with Protection unlimited switching redirection and partial withdrawal allowed absolutely free of charge. LIFE LINK SUPER 1) Min premium is 20000 whereas in Wealth with Protection

it is only 10000. 2) In Wealth with Protection unlimited switching redirection and partial withdrawal allowed absolutely free of charge. PREMIER LIFE GOLD 1) In Wealth with Protection unlimited switching redirection and partial withdrawal allowed absolutely free of charge. 2) Number of funds in Wealth with protection is 11 whereas in this product it is only 7. LIFE TIME PLUS 1) Premium allocation is 25% in this while in Wealth with protection is upto 15%. 2) Min premium is 20000 whereas in Wealth with Protection it is only 10000. 3) In Wealth with Protection unlimited switching redirection
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and partial withdrawal allowed absolutely free of charge. LIFE STAGE RP 1) Premium allocation is 25% in this while in Wealth with protection is upto 15%. 2) Min premium is 20000 whereas in Wealth with Protection it is only 10000. 3) In Wealth with Protection unlimited switching redirection and partial withdrawal allowed absolutely free of charge. LIFE STAGE 1) Premium allocation is 25% in this while in Wealth with protection is upto 15%. 2) Min premium is 20000 whereas in Wealth with Protection it is only 10000. 3) In Wealth with Protection unlimited switching SMART KID CHILD PLAN redirection and partial withdrawal allowed absolutely free of
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charge. 1) Premium allocation is 20% in this while in Wealth with protection is upto 15%. 2) Min premium is12000 whereas in Wealth with Protection it is only 10000.
LIFE TIME SUPER PENSION
1) Premium payable in this is 75000 while in Wealth with protection is 10000.
2) Allocation charge is 20% while in Wealth with Protection it is 15%. 3) Annuity is taxable whereas in Wealth with protection all returns from the funds are tax exempted.
LIFE STAGE RP PENSION Min premium payable is 15000 while in Wealth 1) with Protection it is 10000. 2) Annuity is taxable while all the returns from funds in

Wealth with Protection are tax exempted. 3) Post 3 years of premium payment term partial withdrawal is allowed. LIFE STAGE ASSURE 1) First year premium is utilized towards Guaranteed as a guarantee. 2) If you surrender the policy the GA component is not given to the customer and only the FV which gets accumulated from 2nd premium is returned surrender charges, whereas in Wealth with protection there will not be any other charges apart from surrender charge that too if applicable. after deducting additions and returned on maturity
INVEST SHIELD NEW LIFE
1) Allocation charge is 20% while in Wealth with Protection it is 15%. 2) Min premium payable is 15000 while in Wealth with Protection it is 10000.
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3) In Wealth with Protection unlimited switching redirection and partial withdrawal allowed absolutely free of charge.
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4.7 PERFORMANCE OF ULIPSs OF THE SELECTED COMPANIES

Compare the performances of the ULIPSs of the selected five companies we have selected a particular type of fund called equity growth funds. The reason for selecting equity growth fund is that we would be very clearly able to understand the effect of market slowdown on these companies. Here we have considered the Net asset Values (NAV) of the equity growth funds from 1/10/ 2010 to 28/2/ 2011.We have then compared the maximum and minimum NAVs during the period and found out the percentage change for the NAVs observed for the equity funds of the respective selected companies.
PERCENTAGE CHANGE IN NET ASSETS VALUE

Company name Birla sun life Bajaj Allianz HDFC LIC ICICI % change from oct to nov -0.60 0.61 2.86 -2.26 -3.48 % change nov to dec 0.85 0.38 -1.45 17.76 3.0 % change dec to jan -2.66 0.023 -10.57 -25.02 -10.25 %change jan to feb -0.81 0.68 -7.70 -3.1 -3.07
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4.7.1 BIRLA SUN LIFE INSURANCE CO. LTD

INSURENCE PLAN: BIRLA SUN LIFE CLASSICLIFE PREMIER FUND OPTION:BSL CLASSICLIFE PREMIER-ENHANCER TABLE :1 NAV OF BIRLA SUN LIFE INSURANCE CO. LTD NAV MONTH-YEAR FEB-2011 JAN-2011 DEC-2010 NOV-2010 OCT-2010 NAV RS. 33.13 33.40 34.29 34.00 34.22
Figure:3 NAV OF BIRLA SUN LIFE INSURANCE CO. LTD
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UNIT LINK INSURANCE PLAN 4.7.2 BAJAJ ALLIANZ LIFE INSURANCE COMPANY.
INSURENCE PLAN: BAJAJ ALLIANZ LIFE LONG GAIN FUND OPTION: BAJAJ ALLIANZ LIFE LONG GAIN-FUND TABLE:2 NAV OF BAJAJ ALLIANZ LIFE INSURANCE COMPANY NAV MONTH-YEAR FEB-2011 JAN-2011 DEC-2010 NOV-2010 OCT-2010 NAV RS. 13.13 13.04 13.07 13.02 12.94
FIGURE:4 NAV OF BAJAJ ALLIANZ LIFE INSURANCE COMPANY
4.7.3 ICICI PRUDENTIAL LIFE INSURANCE COMPANY.

INSURANCE PLAN:ICICI PRU LIFETIME PREMIER FUND OPTION: OPPORTUNITES FUND TABLE:3 NAV OF ICICI PRUDENTAL LIFE INSURANCE COMPANY NAV MONTH-YEAR
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NAV RS.
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FEB-2011 JAN-2011 DEC-2010 NOV-2010 OCT-2010
10.41 10.73 11.83 11.47 11.87
FIGURE:5 NAV OF ICICI PRUDENTAL LIFE INSURANCE COMPANY
4.7.4 HDFC STANDARD LIFE INSURANCE COMPANY.

INSURANCE PLAN:HDFC SL PROGROWTH MAXIMISER FUND OPTION: OPPORTUNITES FUND TABLE:4 NAV OF HDFC STANDARD LIFE INSURANCE COMPANY NAV MONTH-YEAR FEB-2011 JAN-2011 DEC-2010 NOV-2010 OCT-2010
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NAV RS. 10.52 11.26 12.41 12.59 12.23

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FIGURE:6 NAV OF HDFC STANDARD LIFE INSURANCE COMPANY
4.7.5 LIFE INSURANCE CORPORATION (LIC) OF INDIA

INSURANCE PLAN:LIC WEALTH PLUS FUND OPTION: WEALTH FUND TABLE:5 NAV OF LIFE INSURANCE CORPORATION OF INDIA NAV MONTH-YEAR FEB-2011 JAN-2011 DEC-2010 NOV-2010 OCT-2010 NAV RS. 10.00 10.31 12.89 10.60 10.84
FIGURE:7 NAV OF LIFE INSURANCE CORPORATION OF INDIA
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Table 6: Total ULIPS funds of Insurance players
T O T A L U L IP FU N D S (In cro re s ) B ajaj A llianz B irla sun life H D F C std . IC IC I P ru LIC TA TA A IG S B I life
2008 10266.59 6201.08 6217.28 22912.71 67673.64 1891 5065.04 2009ULIP FundGrow th % 14065.31 37% 7841.14 26% 7184.14 16% 28613.94 25% 85971.69 27% 2419.69 28% 6444.03 27%
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FIGURE:8 Chart of ULIPS funds of Insurance players
Inference: The above table and chart shows the ULIPS fund growth of some of the major Life-insurer in the market in the last year i.e,. 2009. It shows that Birla sun life needs to concentrate in gaining new business more as they are in the bottom 3 rd in this chart. By doing this they will be able to gain market share and to increase that from current 8%.
Table : 7 Table of AUM of Insurance companies
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A S S E T S U N D E R M A N A G E M E N T (In c ro r L i f e I n s u r e 2r0s 0 8 2 0 A 9U M G r o w t h % 0 B a j a j A llia 2 5 4 2 . 5 3 2 9 4 5 . 6 91 6 % nz B ir la s u n lif 5 9 8 . 7 5 e 8 6 8 . 6 14 5 % H D F C s t d 2. 2 2 0 . 1 6 2 5 3 6 . 61 4 % I C I C I P r u 2 7 3 5 . 4 9 3 1 0 9 . 7 31 4 % L IC 5 2 2 9 8 4 .7 6 6 0 6 4 8 7 .0 1 % 16 T A T A A I G3 3 7 4 . 2 5 3 6 4 4 . 4 38 % S B I lif e 1 6 2 7 . 8 4 2 1 2 3 . 9 43 0 %
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FIGURE:9 Chart of insurance companies
Inference: Assets Under Management is the market value of assets that an investment company manages on behalf of investors. Asset under management (AUM) are looked at as a measure of success against the competition and consists of growth/decline due to both capital appreciation/losses and new money inflow/outflow. In this regard Birla Sun life is very good and the growth percentage is better than the public company i.e. LIC. Other private players are nowhere near to the Birla sun life.
Table :8 Table of Grievances resolved by Insurance companies
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G R IE V A N C E S L i f e I nR se up ro e rGrt es r die v a n c Pe se nR d e ins og lv e d % B a j a j A llia 2n 8z 9 8 6 .8 5 3 8 B ir la s u n lif1e 2 2 9 2 .6 2 9 H D F C s t d 1. 5 1 6 2 .9 1 5 6 IC IC I P ru 216 9 3 .5 2 1 4 L IC 1166 8 4 .0 51 8 6 T A T A A I G8 9 8 2 .0 2 1 6 S B I lif e 78 7 5 .6 4 1 9
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FIGURE:10 Chart of Grievances resolved by Insurance companies
Inference: As the grievance settlement ratio is concerned, Birla Sun Life is the best of all and this has been the one of their strength which is helping them to retain customers and also to attract new customers. This service of the Birla Sun Life making them different and better than others.
Table: 9 Table of Distribution of offices of Insurance companies
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D is t r ib u t io n o f o f f ic e s L i f e I n sMu er et r ro s U r b a n S e m i O r tbh ae Tr so t a l u n B a j a j A llia n z 6 6 164 455 479 1164 B ir la s u n life 7 3 100 396 91 660 H D F C s td . 84 114 326 85 609 IC IC I P ru 142 200 569 11912102 L IC 338 529 910 12533030 T A T A A IG 80 143 184 47 454 S B I lif e 48 116 251 74 489
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FIGURE:11 Chart of distribution of offices of Insurance companies
Inference: Distribution of offices shows the penetration and the reachability of the insurers and in that terms Birla Sun Lifes reachability is better than TATA AIG , SBI life and HDFC. But its far less than the other major players like LIC, ICICI and Bajaj Allianz. Clearly the stronger player in this term is LIC and the ICICI Prudential whose are the leaders in the reachability to the customers.
Table :10 Table of solvency ratio of insurance companies
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S O L V E N C Y R A T IO S L i f e I 2 0s 0u 8r eS ro sl v e 2n0c0y9 r S o ilov e n c y R a t i o n at B a j a j A llia n z 2 . 3 4 2 .6 2 B ir la s u n life 2 . 3 7 2 .4 4 H D F C s td . 2 .3 8 2 .5 8 IC IC I P ru 1 .7 4 2 .3 1 L IC 1 .5 1 1 .5 4 T A T A A IG 2 .5 2 .5 1 S B I life 3 .3 2 .9 2
FIGURE:12 Chart of solvency ratio of Insurance companies for 2008
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FIGURE 13: Chart of Insurance companies for 2009
Inference: From the solvency ratio it can be said that the, Birla Sun Life is good when compared to some of the other players like TATA AIG, SBI life, HDFC standard life and Bajaj Allianz in terms of solvency ratio which indicates that Birla Sun Life is doing good when it comes of absorbing the claims. But on the other hand, its solvency ratio is higher than the ICICI and LIC. So as a whole Birla sun life is financially sound than the other bigger players and it still needs to concentrate more on collecting more of premiums which will help them to lower the ratio.
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CHAPTER:-5 PRIMARY DATA ANALYSIS & INTERPRETATION
PRIMARY DATA ANALYSIS
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We have done a detailed survey in Ahmadabad city to understand and study the consumers responses. The primary data was collected through questionnaires. This questionnaire was mainly formulated to target the common man to see his perception and awareness of various investment options available. The sample size of the survey was 133.Out of these 89 was male and 45 were female. The sample of respondents was carefully selected covering people in all age groups and with different backgrounds and occupations. The analysis of these questionnaires gives us an insight about the mindset of people regarding various investments. .Customer preferences as to where they would like to invest have been studied. Also we come to know about the preferences given by customers towards various top life insurance companies and their reasons for it. Here we see that most of the customers invest regularly from quite some time but since the last few months their investments have come down due to recession and market slowdown. Following is the analysis of the primary data collected through questionnaires.
The sample included respondents from all the age groups out of which people in the age group 18-40 constituted around 70%.
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FIGURE:14 Break-up of respondents between different age group The sample of respondents was heterogeneous with people of various occupations right from government service to ones who were self employed. Out of these people who were working in private companies constituted round 65%.
Break-up of respondents by their occupation
Also the customers preferences for different forms of savings have been c are fully studied The main savings instruments generally preferred by customers are bank deposits, fixed deposits, investments and post office schemes. Out of these Investments has been preferred by around 43% respondents and fixed deposits by around 27%.
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FIGURE:15 Break-up of respondents based on their preferences for various savings instruments
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When we talk about making investment decisions around 45% respondents considered their own decision and another 40% respondents considered their familys opinion before making any important investment decision
FIGURE:16 Break-up of respondents based on factors influencing their Decision
The various forms of investments generally preferred by customers have been identified as mutual funds, stocks and shares, insurance products and government bonds. Out of these around 35% preferred stocks and shares and around 20% preferred insurance products.
FIGURE: 17 Break-up of respondents based on preferences for various forms of investment

The main reason for people to invest in the insurance products was that they had the advantage of both life cover and tax benefits apart from other normal benefits. Talking about the frequency of investment around 45 respondents preferred investing once a year and another 25% preferred investing 2-3 times a year. It was also noticed that greater majority of respondents owned an insurance policy. Only 11% of the respondents did not own an insurance policy.
FIGURE:18 Break-down of respondents based on their frequencies of investment
FIGURE:19 BREAK UP RESPOND OF WHO HAVE OWN INSURANCE
FIGURE:20 Break-down of respondents who rated risk involved in ULIPSs

5.1 TESTING THE ABOVE DATA USING THE CHI-SQUARE TEST

Step 1 - Stating the hypothesis; Ho: there is insignificant relation between risk and investment in ULIPs Ha: there is significant relation between risk and investment in ULIPs Step 2 Setting the rejection criteria; The level of significance = = 5% The degree of freedom = DOF = 5-1 = 4 From the chi-squares table at = 5% and DOF = 4 the critical value of the chisquare distribution is 9.5

Therefore
2 ta b
= 9.5
Step 3 Computing
2 cal
Observed Value 50 34 15 9 42 Now applying the formula
Expected Value (Avg.) 30 30 30 30 30 =

2 cal
( O E)
E
Preferences HIGH RISK MODERATE RISK LOW RISK THEY ARE

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Observed Value 50 34 15 9
Expected Value 30 30 30 30
O-E 20 4 -15 -21
( O E)
400 16 225 441
( O E)
E
13.3333 0.5333 7.5 14.7

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SAFE NO IDEA 42 30 12 144 Total 4.8 40.87
Interpretation
Now according to the rule of chi-squares test calculated value of CHI,
2 cal
>
, tabulated value of CHI, therefore Ho (null hypothesis) is rejected and

2 ta b
hence Ha is accepted. Therefore the conclusion is. There is no significant relation between risk and investment in ULIPs.
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FIGURE:21 Break-down of respondents who own insurance policies in various life insurance companies
Around 63% respondents felt that there was an amount of moderate to high risk involved with ULIPSs. Around 63% of the respondents owned an insurance policy in LIC which clearly shows that LIC still continues to be the market leader in as it has been since the last 50 years or so in spite of the presence various powerful private players which are still finding hard to capture a major market share. Around 13%b respondents chose ICICI Prudential. Following is the rating (from 1-5, 1-bad, 5-best) given by respondents to the five selected life insurance companies .Here we can clearly see that LIC has the best rating. The reasons given by the respondents were that LIC was a public sector company which is well established and has got loads of experience.
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FIGURE:22 Rating scale selected insurance companies
FIGURE:23 Break-down of respondents with different perceptions about the term WELTHSURNCE
We also have found out the age played an important role in deciding the investing patterns of the respondents .It was found out that people who were generally in between 18-30 had a higher tendency to invest quite frequently in a year. The following table and the figure below show us the results.
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FIGURE:24 Average frequency of investments among different age groups
5.2 SWOT ANALYSIS:

Strength: Multi channel distribution and one of the largest distribution networks in India. Superior risk management and investment framework.
Customer centric products and services.
Company has good numbers of HNI advisors.
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Weaknesses: No penetration in the rural market. There is no plan for the low income group people. Fees for the advisors are higher than the others. Opportunity: In spite of the market leadership of LIC, there is still a major portion where it can focus. To associate with more HNIs. Rural market is still left untouched.
Threats: It is still difficult task to win the confidence of the public towards private companies. The company is facing major threat from LIC which is an only government company. Plans for all income groups are not there which can create adverse effect later on the market share of the company.
5.3 POSITIONING
A product or organization has many associations which combine to form a total impression. The positioning decision often means selecting those associations which are to be built upon and emphasized and those associations which are to be removed or de-emphasized.
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The positioning decision is often the crucial strategic decision for a company or brand because the position can be central to customers perception and choices, decisions. Positioning is the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. A product's position is the way the product is defined by consumers on important attributes - the place the product occupies in consumers' minds relative to competing products. Positioning is the difference the company creates for its products relative to the products of the other companies. The positioning of a product/service can be done by
1.
Positioning by Attribute: Probably the most frequently used positioning strategy is associating a product with an attribute, a product feature, or customer benefit. E.g. Volkswagen has used a value for the money association. Volvo has stressed durability, showing commercials of crash tests and citing statistics on the long average life of their cars.
2.
Positioning by Price/Quality: The price/quality dimension is so useful and pervasive that it is appropriate to consider it separately. In many product categories, some brands offer more in terms of service, features, or performance and a higher price serves to signal this higher quality to the customer.
3.
Positioning with Respect to use or Application: Another positioning strategy is associating the product with use or application. The telephone company more recently has associated long distance calling with communicating with loved ones in their reach out and touch someone campaign. Often positioning-by-use strategy represents a second or third position designed to expand the market.
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4.
Positioning by the Product User: Another positioning approach is associating a product with a user or a class of users. Thus, many cosmetic companies have used a model or personality to position their product.
5.
Positioning with Respect to a Product Class: Some critical positioning decisions involve product-class associations. For example, Maxim freeze-dried coffee needed to position itself with respect to regular and instant coffee.
6.
Positioning with Respect to a competitor: In most positioning strategies, an explicit or implicit frame of reference is the competition. There are two reasons for making the reference competitor(s) the dominant aspect of the positioning strategy. First, a well established competitors image can be exploited to help communicate another image referenced to it. Second, sometimes its not important how good customers think you are: it is just important that they believe you are better a given competitor.
5.4 LIMITATIONS OF THE STUDY

a. The study is confined only to a small segment of the entire population due to monetary and time constraints and hence the results are applicable only to the city of Ahmadabad. b. The scope of the project is limited to conceptual and marketing aspects of Life Insurance Companies and doesnt include Claim Settlement and the underwriting part of the operations which are equally important aspect of learning.
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c. It is not always possible to evaluate companies under similar parameters since many companies deal with various businesses thus clubbing all the companies on the same parameters is not always possible.
CHAPTER:-6 CONCLUSION AND FINDINGS
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6.1 CONCLUSION The Company should constantly come out with innovative products as the competition is very tough with around 22 companies fighting hard for the market share. Some new innovative ideas have been suggested below: An insurance plan for the unborn babies. The premium payment term could be for 6 months and it could start once the foetus is 3 months old inside the mothers womb. There could be various benefits under this plan for the customers like in case of a premature or a complicated birth the company would bear the expenses till the baby is healthy again through the insurance policy. Also there could be death benefits in case of the death of the baby inside the womb or at the time of delivery. This plan could really be successful as in India there are lot of premature child deaths and if the company comes out with a plan like this very tactfully with some implied conditions it would be the first Indian company to offer insurance to unborn babies.
An insurance plan for mentally retarded and physically handicapped people. This might be hard to digest but if at all plans like these are
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possible and really come out then a good amount of Indian population would really be interested.
The company could also come out with a plan for both the husband and
wife where automatically the wife gets insured along with her husband when her husband purchases the policy. This could also be the other way round. This could be called the combo family plan. In simple words it means buy one policy and get another free. No other company has done something like this till now.
The company should come out with some really outstanding and out of the world advertisements like the ones Vodafone has released recently which people find it hard to forget soon.
The Company should start promoting by emphasizing on its recent achievement of 100% claim settlement. This will surely help them to attract new customers and improve their market position.
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6.2 FINDINGS
There is a great future of the life insurance sector in India as 80% of the Indian population is still without life cover and people are just now coming in response to the awareness campaigns being carried out by almost all the insurance companies. We have found out that age plays a major role in deciding the investment patterns of people as generally the younger class of people tend to take more risk and invest in various instruments more frequently in a year( 2.10 times a year) when compared with the older class of people(1.46 times a year). Life insurance Corporation (LIC) of India is the company to be least affected during this market slowdown as NAV of its equity growth funds came down just by 23% during this major recession.
Life Insurance Corporation (LIC) of India is still the undisputed market leader as 63% of the respondents surveyed owned a policy in it and it has also got a tremendous rating of 4.2 out of 5 in the survey conducted.
From the comparison of ULIPs plan and other financial product I came to know what are the basic difference and their working.
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So following are the nine extracted prominent factors that influence the consumer while making an investment decision: 1. Rate of return 2 .Death benefits and lock in period 3. Present market scenario and tax benefits 4. Past performance of the company 5. Flexible investment options and the risk involved 6. Amount payable and the after investment service 7. Opinion of media, friends and acquaintances 8. Level of knowledge about investment 9. Commercials associated with investments
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6.3 Questionnaire for Consumer Perception in Investment in ULIPS

NameAgeMarital StatusNo of Dependents-
1. Do you save money?
Yes
No
2. What do you do with your savings?
............................................................................................................................ .............
3. Current Value of your investment?
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............................................................................................................................ ..............
4. Current investment portfolio? (rank 1-5)
MF
Equity Trading Fixed Deposit, Post Office Savings
Insurance (ULIPS)
Bank savings
5. Objective of your investment? ........................................................................................................................ ...................
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6. Time Horizon in which you have to achieve your financial goal? how long do you plan to invest your money?
a. b. c. d. e.
Under 2 yrs 2-5 yrs 6-10 yrs 11-15 yrs Over 15 yrs
7. What factors would you consider most important before choosing an investment?
a. b. c. d.
How quickly i will be able to increase my wealth. The opportunity for steady growth. The amount of monthly income the investment will generate. The safety of my investment principal.
8. Most preferred form of investment?
ULIPS
MF
Equity Trading
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F.D, P.O Bank Savings
9. And Why? ............................................................................................................................ ..............
............................................................................................................................ ..............
Investment Profile in ULIPSs
1.
How long do you plan to stay invested in ULIPS? 3-5 yrs 5-7 yrs Why have you invested in ULIPS? 7-10 yrs 10-20 yrs
2.
Insurance
Investment
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3.
What financial goals do you plan to achieve through the money you will get from ULIPs? Marriage Child education Retirement
Any other..........................
tax Savings
4. Do you view following factor/sources of information important while investing in ULIPS?
Extremely Important a) Safety b) Liquidity
Important
Neutral
Unimport- Highly -nt important
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c) Return earned d) Tax savings e) Performance of past schemes Rating of ULIPS by Agencies g) Advertisements
f)
h) Recommendatio ns of friends and relatives.
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CHAPTER:-7 BIBILOGRAPHY
Bibliography:
www.hdfcstandardlife.com wwwlicindia.com
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www.birlasunlife.com www.bajajallianz.com www.iciciprulife.com www.tata-aig-life.com www.irdaindia.org http://www.scribd.com/doc/11005006/Insurance-IndustryGrowth-Chart-Under-Drive-of-Demand-and-ValueRecommended20090121 http://www.scribd.com/doc/4996143/OVERVIEW-OFINSURANCE-SECTOR-INDIA http://www.scribd.com/doc/7044410/ULIPSs http://www.indiaprwire.com/pdf/pressrelease/200805079347.p df http://www.scribd.com/doc/136703/Indian-Insurance-ChangingTrends-and-a-Fresh-Perspective http://www.scribd.com/doc/7216240/Understand-ULIPSInsurance http://www.financialexpress.com/search/news/ULIPss+flexible+ to+the+core/ http://unpan1.un.org/intradoc/groups/public/documents/apcity/ unpan002873.pdf http://wealth.moneycontrol.com/yourstartupkit/ULIPs/whyinvest-in-ULIPss-/9051/0
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http://economictimes.indiatimes.com/PersonalFinance/Insurance/Life-insurance-industry-targeting-20-pcgrowth-in-FY-09/rssarticleshow/4095144.cms http://www.marketsmonitor.com/Report/IM588_related.htm
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UNIT LINK INSURANCE PLAN

A Project Report Under the guidance of Prof. PINAL SHAH

Submitted By GAURANG RAVAL

UNIT LINK INSURANCE PLAN

UNIT LINK INSURANCE PLAN

Signature: Prof. B.N. Mehta

Signature: Prof. Pinal shah

UNIT LINK INSURANCE PLAN

Is approved and is acceptable in quality and form.

UNIT LINK INSURANCE PLAN

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Chapter No. 1. Introduction 1.1 Purpose

Page No. 11-28 15 16 16 17 18 18-22 23-24 25-28

29-47 31-32 33-34 35 35 36-37 38-40 41-42 43-46 46 46 47

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Break up of respondents based on their preference for 106

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Break-down of respondents who rated risk involved in 111

Break-down of respondents with different perception 117

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insurance until recently, a various

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UNIT LINK INSURANCE PLAN 1.2 SCOPE OF THE STUDY

1.3 OBJECTIVES OF THE PROJECT

6. Study of the consumer perception towards various insurance products.

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1.5 Characteristic of Insurance

1.6 Present scenario:

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(Source: Annual report IRDA)

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(Source: Annual report IRDA).

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1.7 A brief history of the Insurance Sector

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LIFE INSURANCE COMPANY IN INDIA.

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List of life insurance companies in India

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2 UNIT LINKED INSURANCE PLANS

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2.1 Structure of ULIPSs

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2.2 TYPES OF FUNDS UNDER ULIPSs

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