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Comparison between traditional plan & ULIPs EXECUTIVE SUMMARY As the people are becoming more and more

and aware of their Life Style and Income level. they need a plan, which has an optimum balance between their Investment and Savings. They require an integrated financial plan for investment. The customer requires those investment options, which provide them with flexibility and Liquidity and tax benefit. Among the various other investment options, Insurance has gained a prominent place .It provides the policyholder with the benefit of Life Protection and at the same time allows him to take the benefit of the fluctuations of the share market. Thus Life Insurance has taken a very vital position as a wholesome investment option. Life Insurance is gaining public awareness and interest very rapidly. It was till now been thought as a way to insure lives, But, recently it is emerging as a prominent Investment avenue. It has come up as a wholesome Investment avenue & provides the benefit of flexibility, Liquidity and Life protection. Along with added benefits like the rider attachments which protect the policyholder from various kinds of diseases and accident etc.

Objectives of the Study: 1. To know aware of investing in ULIPs and Traditional plans 2. To Study and Compare the Traditional Life Insurance Plans and ULIPs with respect to ICICI Prudential life Insurance. 3. To know the factors influence while purchasing life Insurance plans. 4. To know the factors influence while purchasing the particular category of plan 1 BABASAB PATIL

Comparison between traditional plan & ULIPs

Data source:
Primary Data: Personal interactions, Observations Training programs. Through Questionnaire Secondary Data: Study material by IRDA and ICICI Prudential. Related websites, Past records of ICICI Prudential.& Brochures and pamphlets of ICICI Prudential

Sampling:
a) Population b) Size c) Method : People of Hubli city : 100 size : Random sampling

Need for study:


After the crises all over world market condition are critical so I am study because of what is impact on life insurance.

Scope of study:
The scope of study is limited to Hubli city and the sample size is 100

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Findings
Brand Name of the company is the main reason for the advisors to join ICICI Prudential followed by product portfolio and excellent support from the company. Almost all of them are satisfied with the services offered to them. As the endowment products, dont have much liquidity option most people follow the Market linked product. Almost all respondent are investing in unit linked product in ICICI prudential life insurance. Risk cover is the most important factor as per the respondents followed by investment and savings. In ICICI pru life insurance have facing lack of advertisings. Most of the respondents are satisfied from the return, risk cover and tax savings provided by the products to its customers

LIMITATION
Not single work is exception to the limitation every work every work has got

its limitations. It is assumed that the sample selected represents entire population. Another limitation of the project was that the study and the survey were

conducted in Hubli city only.

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Suggestions:
Continuous bombardment of Advertisement by ICICI Prudential as a Life Insurance Company for a common man as well as for well educated and good salaried people. The company has concentrate increases on premium 20000-50000. Look for the way to make customer highly satisfied with respect to returns. Premium and initial charges to be reworked as, the customer is dissatisfied with there.

Conclusion
Every study and project needs to be concluded. Hence, based on the study of ICICI Prudential and its products in brief, and also conducting a survey on the customers and advisors sales function towards the products offered and services provided by ICICI Prudential, I have arrived on a conclusion that ICICI Prudential Lifes market share stood at 11.8%, for 10-month ended January 31, 2009, making it the leading private life insurance player. As on January 31, 2009, the companys assets under management (AUM) stood at Rs 28,515 crore. The company also has one of the largest distribution networks amongst private life insurers in India with over 2,100 branches (including 1,116 small-offices in rural India), an advisor base of over 2,90,000 and 18 banc assurance partners, as on January 31, 2009. Since inception, ICICI Prudential Life has sold over 90 lakh policies.

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INTRODUCTION INSURANCE:
The insurance industry provides protection against financial losses resulting from a variety of perils. By purchasing insurance Policies, individual and businesses can receive Reimbursement for losses due to car accidents, theft of property, and fire and storm damage, medical expenses and loss of income due to disability or death. The insurance industry consists mainly of insurance carriers (or insurers) and insurance agencies and brokerages. In general, insurance carriers are large companies that provide insurance and assume the risks covered by the policy. Insurance agencies and brokerages sell insurance policies for the carriers. While some of these establishments are directly affiliated with a particular insure and sell only that carriers policies, many are independent and are thus free to market the policies of variety of insurance carriers. In addition to supporting these two primary components, the insurance industry includes establishments that provide other insurance-related services, such as claims adjustment or third-party administration of insurance and pension funds. Insurance carriers assume the risk associated with annuities and insurance policies and assign premiums to be paid for the policies. In the policy, the carrier states the length and conditions of the agreement, exactly which losses it will provide compensation for, and how much will be awarded. The premium charged for the policy is based primarily on the amount to be awarded in case of loss, as well as the likelihood that the insurance carrier will actually have to pay. In order to be able to compensate policyholders for their losses, insurance companies invest the money they receive in premiums, building up a portfolio of financial assets and income-producing real estate, which can then be used to pay off any future claims that may be brought. About ICICI Prudential Life Insurance: ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank and Prudential plc. It was one of the first players to commence operations when the insurance industry was opened to the private sector in 2000. For the first quarter ended June 30, 2007, the company garnered Rs. 987 crore of weighted retail + group new business premiums and has underwritten over 5 million policies since 5 BABASAB PATIL 5

Comparison between traditional plan & ULIPs inception. The company has a network of over 680 offices, over 235,000 advisors; as well as 23 bank partners. It is also the only life insurer in India to be assigned AAA (Ind) credit rating from Fitch Ratings. For the past six years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. To know more about the company

LIFE INSURANCE:
Life insurance can be defined as Life Insurance provides a sum of money if the person who is insured dies while the policy is in effect. Life insurance is a product that helps you protect your dependents from financial difficulties in the unfortunate event of your death or disability depriving them of the financial support that they get today. When you buy a life insurance policy, essentially you enter into a contract with an insurance company under which you promise to make periodic payments to it (the premium). The insurance company in return promises to pay to your nominee's sum of money upon your death or upon occurrence of the events specified in the contract. Usually the contract provides for Payment of an amount, on the date of maturity or at specified periodic intervals or at death, if it occurs earlier. Periodical payment of insurance premium by the assured, to the corporation who provides the insurance.

INSURANCE MARKET IN INDIA:


India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance sector in India has come to a position of very high potential and competitiveness in the market. Innovative products and aggressive distribution have become the say of the day. Indians, have always seen life insurance as a tax saving device, are now suddenly turning to the private sector that are providing them new products and variety for their choice. Life insurance industry is waiting for a big growth as many Indian and foreign companies are waiting in the line for the green signal to start their operations. The Indian consumer should be ready now because the market is going to give them an array of products, different in price, 6 BABASAB PATIL 6

Comparison between traditional plan & ULIPs features and benefits. How the customer is going to make his choice will determine the future of the industry. The insurance industry in India can broadly classified in two parts. They are, Life insurance. Non-life (general) insurance.

BRIEF HISTORY OF INSURANCE


The business of insurance started with marine business. The first insurance policy was issued in 1583 in England. Some of the important milestones in the insurance business in India are: 1818: -The British introduce to India, with the establishment of the Oriental Life Insurance Company in Calcutta. 1850: - Non life insurance debuts, with Triton Insurance company. 1870: - Bombay Mutual Life Assurance Society is the first India-owned life insurer. 1907: - Indian Mercantile Insurance is the first Indian non-life insurer. 1912: -The Indian life assurance Companies act enacted to regulate the life insurance business. 1938: - The insurance act, which forms the basis for most current insurance laws, replaces earlier act. 1956: - Life insurance nationalized, government takes over 245 Indian and foreign insurers and provident societies. 1972: - Non Life insurance nationalized, GIC set up. 1993: - Malhotra Committee, headed by former BBI governor R.N. Malhotra, set up to draw up a blue print for insurance sector reforms. 1994: -Malhotra Committee recommends re-entry for private players, autonomy to PSU insurers. 1997:-Insurance regulator IRDA (Insurance Regulatory and Development Authority) set up. 2000:-IRDA starts giving licences to private insurers, ICICI Prudential and HDFC Standard Life first private insurers to sell a policy. 2002:- Banks were allowed to sell insurance plans, as TPAs enter the scene, insurers start settling non-life claims in the cashless mode. 7 BABASAB PATIL 7

Comparison between traditional plan & ULIPs

Need for study:


After the crises all over world market condition are critical so I am study because of what is impact on life insurance.

Scope of study:
The scope of study is limited to Hubli city and the sample size is 100

Objectives of the Study: To know aware of investing in ULIPs and Traditional plans To Study and Compare the Traditional Life Insurance Plans and ULIPs with respect to ICICI Prudential life Insurance. To know the factors influence while purchasing life Insurance plans. To know the factors influence while purchasing the particular category of plan

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THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY:


Reforms in the Insurance sector were initiated with the passage of the IRDA bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDAs online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 14 life insurance and 9 general insurance companies have been registered

Objective of IRDA:
The main objectives of IRDA are: To take care of the policy holders interest To open up the insurance sector for private sector To ensure continued financial soundness and solvency To regulate insurance and reinsurance companies To eliminate dishonesty and unhealthy competition To supervise the activities of the intermediaries To amend the insurance act ,lic act and the general business nationalization act.

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Duties and Power of IRDA:


To regulate ,promote and ensure orderly growth of the insurance business To exercise all the powers and functions of the controller of insurance To protect the interest of the policy holders in settlement of claims and terms and conditions of policies To promote and regulate professional organizations connected with insurance business. To regulate ,promote and ensure orderly growth of the insurance business To exercise all the powers and functions of the controller of insurance To protect the interest of the policy holders in settlement of claims and terms and conditions of policies To promote and regulate professional organizations connected with insurance business. To regulate investment of funds To regulate margin of solvency To adjudicate disputes between insurers and intermediaries

FUNCTIONS OF IRDA:
Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; 10 Specifying the code of conduct for surveyors and loss assessors; BABASAB PATIL 10

Comparison between traditional plan & ULIPs Promoting efficiency in the conduct of insurance business; Promoting and regulating professional organizations connected with the insurance and re-insurance business; Levying fees and other charges for carrying out the purposes of this Act; Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries. Regulating investment of funds by insurance companies; Regulating maintenance of margin of solvency; Adjudication of disputes between insurers and intermediaries or insurance intermediaries. Supervising the functioning of the Tariff Advisory Committee; Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause. Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector

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Comparison between traditional plan & ULIPs

INTRODUCTION TO ULIP:
The concept of ULIP came in to existence in 1960s to provide an optimum balance between protection and investment. ULIP distinguishes itself through the multiple benefits it provides to the policyholders. These plans are designed with a view to help the customers to utilize the market opportunities by investing in the share market, capital market and at the same time have the facility of Death Benefit and Maturity Benefit. Unit-linked life insurance products are those where the benefits are expressed in terms of number of units and unit price. They can be viewed as a combination of insurance and mutual funds. The number of units that a customer would get would depend on the unit price when he pays his premium. The daily unit price is based on the market value of the underlying assets (equities, bonds, government securities, et cetera) and computed from the net asset value. The advantage of unit-linked plans is that they are simple, clear, and easy to understand. Being transparent the policyholder gets the entire upside on the performance of his fund. Besides all the advantages they offer to the customers, unit-linked plans also lead to an efficient utilization of capital. Unit-linked products are exempted from tax and they provide life insurance. Investors welcome these products as they provide capital appreciation even as the yields on government securities have fallen below 6 per cent, which has made the insurers slash payouts. According to the IRDA, a company offering unit-linked plans must give the investor an option to choose among debt, balanced and equity funds. If you choose a debt plan, the majority of your premiums will get invested in debt securities like gilts and bonds. If you choose equity, then a major portion of your premiums will be invested in the equity market. The plan you choose would depend on your risk profile and your investment need. The ideal time to buy a unit-linked plan is when one can expect long-term growth ahead. This is especially so if one also believes that current market values (stock valuations) are relatively low. 12 BABASAB PATIL 12

Comparison between traditional plan & ULIPs So if you are opting for a plan that invests primarily in equity, the buzzing market could lead to windfall returns. If one invests in a unit-linked pension plan early on, say when one is 25, one can afford to take the risk associated with equities, at least in the plan's initial stages. However, as one approaches retirement the quantum of returns should be subordinated to capital preservation. At this stage, investing in a plan that has an equity tilt may not be a good idea. Considering that unit-linked plans are relatively new launches, their short history does not permit an assessment of how they will perform in different phases of the stock market. Even if one views insurance as a long-term commitment, investments based on performance over such a short time span may not be appropriate. Simply put, ULIPs work very similar to a mutual fund with a life cover thrown in. They have a mandate to invest the premiums in varying proportions in gsecs (government securities), bonds, the money markets (call money) and equities. The primary difference between conventional savings-based insurance plans like endowment and ULIPs is the investment mandate- while ULIPs can invest upto 100% of the premium in equities, the percentage is much lower (usually not more than 15%) in case of conventional insurance plans. ULIPs are also available in multiple options like `aggressive' ULIPs (which can invest upto 100% in equities), `balanced' ULIPs (which invest 40-60% in equities) and `debt' ULIPs (which invest only in debt and money market instruments). The exact expense structure/ break-up for ULIPs is as transparent as one would have liked. Broadly speaking, ULIP expenses are classified into three major categories: 1) Mortality Charges: Mortality expenses are charged by life insurance companies for providing a life cover to the individual. The expenses vary with the age, sum assured and sum-at-risk for the individual. There is a direct relation between the mortality expenses and the above mentioned factors. In a ULIP, the sum-at-risk is an important reference point for the insurance company. Put simply, the sum-at-risk is the difference between the sum assured and the investment value the individual's corpus as on a specified date. 13 BABASAB PATIL 13

Comparison between traditional plan & ULIPs 2. Sales and administration expenses: Insurance companies incur these expenses for operational purposes on a regular basis. The expenses are recovered from the premiums that individuals pay towards their insurance policies. Agent commissions, sales and marketing expenses and the overhead costs incurred to run the insurance business on a day-to-day basis are examples of such expenses. 3. Fund management charges (FMC): These charges are levied by the insurance company to meet the expenses incurred on managing the ULIP investments. A portion of ULIP premiums are invested in equities, bonds, gases and money market instruments. Managing these investments incurs a fund management charge, similar to what mutual funds incur on their investments. FMCs differ across investment options like aggressive, balanced and debt ULIPs; usually a higher equity option translates into higher FMC. Apart from the three expense categories mentioned above, individuals may also have to incur certain expenses, which are primarily `optional' in nature- the expenses will be incurred if certain choices that are made available to individuals are exercised. a) Switching charges: Individuals are allowed to switch their ULIP options. For example, an individual can switch his fund money from 100% equities to a balanced portfolio, which has say, 60% equities and 40% debt. However, the company may charge him a fee for `switching'. While most life insurance companies allow a certain number of free switches annually, a switch made over and above this number is charged. b) Top-up charges: ULIPs allow individuals to invest a top-up amount. Top-up amount is paid in addition to the premium amount for a particular year. Insurance companies deduct a certain percentage from the top-up amount as charges. These charges are usually lower than the regular charges that are deducted from the annual premium. c) Cancellation charges: Life insurance companies levy cancellation charges if individuals decide to surrender their policies (usually) before three years. These charges are levied as a percentage of the fund value on a particular date. 14 BABASAB PATIL 14

Comparison between traditional plan & ULIPs Having defined ULIP expenses, an illustration will help in understanding how they pan out as well as their impact on returns over a period of time.

NAV concept:
It exhibits the value (or the price) that one has for his investment or one will have to pay for his investment. As, the investment made by different people are different, the value (or the price) is the expressed in per unit terms. It helps in knowing the value of Insurance at any point of time. Technical Calculation of NAV: UNIT Value = (Total market Value of all assets invested less expenses related to Investment management / Total no.of outstanding units) Factors affecting NAV: Marketing Value of investment portfolio, Number of Units, Expenses and Investment Income. Ex: If 2,00,000 /- has been accumulated in the equity fund and the no. of units issued is 10,000 /- then the NAV of the equity fund is: 2,00,000 / 10,000 = Rs 20 / As the equity market develop the fund grows from 2,00,000 / - to 220,000/Now the NAV = 2,20,000 / 10,000 = Rs 22 / If among these 10,000 units the policyholder has 5000 units ten the value of investment as of now is Rs 1,10,000. Thus a unit linked plan actually tells, what is the value of the fund.

BASIC FEATURES OF ULIP 1. Life protection 2. Investment and savings 3. Flexibility 4. Transparency 15 BABASAB PATIL 15

Comparison between traditional plan & ULIPs 5. Added Benefits a) Death due to accident b) Any kind of disability c) Critical illness d) Surgeries 6. Liquidity 7. Tax Planning 1) LIFE PROTECTION

Start a Family

Children Establishi ng Career Retiremen t Time

Start Working

The graph shows the various needs of the customer at different point of time, individuals needs differ and his need for life protection fluctuates. ULIP satisfies the varying needs of the customer providing him with more and more protection as and when he requires, by allowing the policyholder to increase or decrease the death benefit. It is usually multiple of the contribution being paid which ensure that the contribution is adequate enough to provide life protection. And is also able to maintain a same balance between protection and savings. 2) INVESTMENTS AND SAVINGS

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Equity funds Balance d funds Short term debt funds Debt funds

Risk ULIP provides the client with option of investing as per his risk appetite and gets returns accordingly. These various options available for an indivual to make investment in comparatively high risks instruments and get high returns. Below shown is a graph illustrating the various investment options for a client. Example 1: Here are four types of funds in which a client can invest. In each case the risk goes on increasing with the type of fund. The client has an option to shift as the risk and return orientation changes (Switch). 3. FLEXIBILITY: The client has an option to choose the amount of sum assured and the premium amount he is capable of paying. In case of certain plans of ULIP the client is allowed to choose the premium. Exp: Lifetime and Lifetime I The client has a flexibility to decide the life cover according to his financial needs, independent of premium selected. Following points enumerate the flexibility feature of ULIP a) Increase in death benefit. As life cycle changes of a client he passes through various risks and responsibilities. He can increase or decrease the death benefit accordingly. b) Decrease in death benefit. If the client is unable to pay the same amount of premium he can decrease the death benefit with certain conditions applying according to the particular plans. c) Premium holiday After paying the premium regularly for 3 years from the starting date of the policy. The client can take a premium holiday if he is unable to pay a particular premium due. On returning from the premium holiday the client can pay the previous premiums if he desires or continue from that date. 17 BABASAB PATIL 17

Comparison between traditional plan & ULIPs d) Choice of fund. Plan Maximiser (Growth) Plan objective High growth and capital appreciation over a long terms Balancer (balanced) Balance of capital appreciation and study returns over a long terms Preserver Equal balance of capital appreciation and study Protector (Income) returns over a long term Study returns over a long term. Moderate Low Average Risk High Investment pattern Equity and equity related securities: Max 90%, Debt, money market and cash : Min 10% Equity and equity related securities: Max 40%, Debt, money market and cash : Min 60% Debt instrument: Max 50% Money market and cash Min 50% Debt instrument: Max 100% Money market and cash Max 25% There are four kinds of funds available for a client of ULIP. He has a option to switch between these four funds. He can either choose only one or invest in all four depending on his risk tolerance. Switch between the funds The policyholder has a choice two reallocate the premium paid by him on every premium policy anniversary. He can switch between the above four funds to avail the advantages of market fluctuations. Table: Kinds of funds available for a client of ULIP e) Top ups: Some times the client may have surplus amount after his expenses. ULIP allows him to save that amount the investing in the insurance he can avail the benefit of top up by paying extra premium, which will be invested in the share market by the insurer company. The client gets expert fund management. The policyholder is allowed to do as many top ups in the tenure of plan. f) Premium redirection 18 The policyholder is allowed to reallocate the premium paid each time to 18 BABASAB PATIL

Comparison between traditional plan & ULIPs different fund structure. Thus whenever the premium is due (As per the premium payment mode), he can redirect the current premium into different asset allocations than the previous time. This helps the policyholder to optimize the funds in accordance to market with out using the switch option.

g) Assignment option: The policyholder can assign the policy to any of the nominee or any bank in case he has taken a loan on the title of the policy. Unfortunately if something happens to the policyholder then the insurer will repay the loan taken by the client to the extent of premium paid. 4. Transparency: ULIP products are transparent in terms of, the policyholder is aware of where his contribution is being allocated. The policyholder is aware of the various charges charged to him. The Various charges of the ULIP are: a) Contribution related Charges- Running expenses of the policy b) Administrative Charges- Issuance cost, distribution costs etc c) Fund Management Fee- cost of being and selling the various financial instruments for various funds. d) Mortality Charges: cost of providing life protection e) Rider charges: cost of other protection charges. f) Surrender charges: cost to cover initial expenses g) Bid offer charges: difference between the offer price of units and the selling price i.e. bid price of units. It covers the cost of selling the policy. h) Transaction specific charges: cost of changing funds, toping up the investment component or withdrawals Daily NAV: A feature that lets you know on a daily bases, how the money in insurance plan is growing. 5. ADDED BENEFITS: To get extra protection from the 3D effect ULIP provides the policyholder the 19 BABASAB PATIL 19

Comparison between traditional plan & ULIPs advantage of rider attachments. a. Death due to accident (ADBR) b. Disability (ABR) c. Critical Illness (CIBR) d. Surgeries (MSAR) (Now discontinued) 6. LIQUIDITY: The feature makes ULIP a marketable plan. The policyholder has an option of withdrawals in case if need arises. ULIP provides easy access to the money as and when the policyholder may requires. There are two types of withdrawal options. a) Partial b) complete The value of withdrawal reduces the death benefit by same amount. This facility can be avail only after three full premium payment years are completed. The minimum worth of this units and a maximum where in at least Rs. 10000/- worth units remain in all the funds put together. 7. TAX PLANNING This is another feature of ULIP. This is one of the motives of the policy holder to invest in the insurance plans. They usually invest to avail the tax benefit. Regulation in India allows tax benefits in the contribution paid under section 88, contribution paid for health riders critical illness and major surgical is allowed tax benefits under section 80D, as per the prevailing tax laws. Maturity benefits are tax free under section 10(10)D, provided life come is at least 5 times of the annual contribution paid. Death benefit is tax free under section 10(10)d. Whit so many tax benefits available in one instrument ULIP tends to be an intelligent taxplanning tool.

Modes of Premium Payment: Premiums are payable through any of the following modes: 20 BABASAB PATIL 20

Comparison between traditional plan & ULIPs Cash* Cheques Demand Drafts Pay Orders Bankers Cheque Internet facility as approved by the Company from time to time. Electronic Clearing System Credit Cards (Only standing instruction) *Amount and Modalities will be subject to company Rules and relevant

legislation/regulations Premium Payment frequency: Your Premium will fall due in every policy year based on the periodicity of payment of premiums, i.e.

Yearly, Half-Yearly or Monthly How much does the coverage cost? The most comprehensive coverage is also affordable. Below are the annual premium rates for a Sum Assured of Rs. 500,000 for various policy terms and entry ages for Males.

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Comparison between traditional plan & ULIPs

Age(Years) 25 30 35 40 45 Premium in Rupees

Policy Term 15 years Rs. 2435 Rs. 2896 Rs. 4106 Rs. 6282 Rs. 9804

20 years Rs. 2474 Rs. 3204 Rs. 4724 Rs. 7281 Rs. 11,182

25 years Rs. 2734 Rs. 3738 Rs. 5576 Rs. 8442 Rs. 12,554

The premiums are guaranteed for first five years from the date of commencement of the policy. Thereafter, the premiums are annually reviewable. Any change in premium will only be effected with approval from IRDA.

Above premiums are inclusive of modal rebate and Large SA discount & exclusive of any service tax and education cess. Waiting Period: No benefit in respect of Critical Illness Benefit (CIB) or Total & Permanent Disability Benefit (TPDB) will be payable if it has occurred due to sickness within the first 6 months of the policy or first 3 months of the policy reinstatement date where the policy lapsed formore than 3months. has

What is your Human Life Value? Beyond all doubt, your life is invaluable. Yet, there is a certain worth that can be attributed to the financial support you offer your parents, spouse or children. This worth is referred to as Human Life Value (HLV). In the future, if your family does not have the protective blanket of 22 BABASAB PATIL 22

Comparison between traditional plan & ULIPs your presence, they will no longer be able to enjoy the benefits of the income you earned. Put simply, Human Life Value is the present value of your future earnings. Why should you calculate your Human Life Value? You should calculate your Human Life Value so you can accordingly invest in insurance plans that provide your family with adequate finances and hence security even in your absence. How do you determine your Human Life Value? Your 1. 2. 3. Current Current Human Life Value and and is Your future future determined by 3 factors: age expenses income

As a thumb rule, if you are 30 years of age, you should insure yourself for an amount approximately 8 times your annual income. At 35, your investment should be close to 6 times your income. Of course, the exact amount of your investment should be determined by the number of people who depend on you, your existing investments and your life stage. For example, if you are 30 years of age and have two children and parents to provide for, the amount you invest should be reflective of your requirements. Calculate your Human Life Value NOW Use our quick and easy Human Life Value Calculator to determine your Human Life Value and the corresponding amount you should invest. Start right away!

WORKING OF A ULIP PLAN

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For Example A client put in regular contribution of Rs. 20,000 /-. From this amount a % is deducted as contribution. Therefore if the contribution related expense is 20% - Rs.4000/- will be deducted as contribution charges. The amount that is now available is Rs.20000-4000=16000/24 BABASAB PATIL 24

Comparison between traditional plan & ULIPs Now, if the client who is available is aged 30 years were to take a life cover of 500,000/- then mortality (1.50/- per thousand at the age of 30) charge of 750 /- will be deducted. This amount will provide life cover to the policy. The remaining amount of 15,250/- will be invested in any one of them or all of them. The Investment is shown in terms of units. Thus if client invests in debt fund and the NAV of the debt fund is Rs. 16/-(market price) then the no. of units that the client will get is 15,250/16=953.125. For this investment-fund management fee will be charged and the charges for maintaining the policy an administrative charge are levied. He same example would look as follows in a chart.

FLOW CHART OF A UNIU LINKED PLAN

Less 20% 20,000-4000=16000


Contribution Contribution related charges deducted Mortality & Rider Charges deucted

25

25

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Comparison between traditional plan & ULIPs

16,000-750=15,250 for the age 30- mortality at 1.50 per thousand


The client invests resultant in funds as chosen

Life Protection 500,000

Investment in Funds Debt / Equity or balanced

15,250/- invested in debt fund at a NAV of 16/Units Allocated

953.1250units allocated
Represented as NAV

NAV of debt fund 16/- per unit

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Comparison between traditional plan & ULIPs

TRADITIONAL PLANS:
These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: 1. Steady Investment 1. 2. 2. 1. 2. 3. Major chunk of investible funds are in debt instruments Steady and almost assured returns over the long term Death benefit is Sum Assured + guaranteed & vested bonus Helps in asset creation as they are for a long tenure Premium to Sum Assured ratios are fixed for each plan and age.

Features

Traditional plans have existed since the inception of Insurance. These plans have been providing the policyholders, advantages of savings and protection. But they lack, transparency, flexibility and liquidity etc that are available in either Investment avenues. Ever since the Insurance sector was opened up, private players have been trying to entice the customer with new and innovative policies. Unlike traditional Insurance products, customers find unit linked plans more transparent, flexible and easy to understand. The key to good financial goals, risks appreciated and portfolio mix. The next step would be allocate asset across different categories and systematically adhere to an investment pattern, so that they work in tandem to meet ones requirements over the next month, year or decade. Because of their flexibility to adjust to different life stage needs ULIPs have an upper hand over the traditional plans. Buying an ULIP is quite different from buying a traditional Life Insurance product. The policyholder is totally aware of the various charges being charged to him and also about was his contribution is being invested. Ex: If 2,00,000 /- has been accumulated in the equity fund and the no. of units issued is 10,000 /- then the NAV of the equity fund is: 2,00,000 / 10,000 = Rs 20 / As the equity market develop the fund grows from 2,00,000 / - to 220,000/27 BABASAB PATIL 27

Comparison between traditional plan & ULIPs Now the NAV = 2,20,000 / 10,000 = Rs 22 / If among these 10,000 units the policyholder has 5000 units ten the value of investment as of now is Rs 1,10,000. Thus a unit linked plan actually tells, what is the value of the fund.

COMPARISON BETWEEN TRADITIONAL AND ULIP


Broadly, insurance plans can be distinctly divided into ULIPs and traditional plans. A brief detail of both segments: Unit Linked Insurance Product: ULIPs have gained high acceptance due to attractive features they offer. These include: 1. Flexibility 1. Flexibility to choose Sum Assured. 2. Flexibility to choose premium amount. 3. Option to change level of Premium /Sum Assured even after the plan has started. 4. Flexibility to change asset allocation by switching between funds 2. Transparency: 1. Charges in the plan & net amount invested are known to the customer. 2. Convenience of tracking ones investment performance on a daily basis. 3. Liquidity: 1. Option to withdraw money after few years (comfort required in case of exigency). 2. Low minimum tenure. 3. Partial / Systematic withdrawal allowed. 4. Fund Options. 5. A choice of funds (ranging from equity, debt, cash or a combination). 6. Option to choose your fund mix based on desired asset allocation. 28 BABASAB PATIL 28

Comparison between traditional plan & ULIPs

COMPANY PROFILE
Evolution of ICICI Prudential Life Insurance: ICICI Prudential Life Insurance today announced that Emgee Muthoot, the Insurance division of the Muthoot group, one of Kerala's largest banking and financial services groups, has crossed the Rs 10 crore premium mark in a span of less than three years. Emgee Muthoot, which began distributing ICICI Prudential's life insurance products under the corporate agency relationship, has also emerged as ICICI Pru's largest non-bank partnership in the state. ICICI Prudential Life Insurance pioneered the multi-channel distribution strategy in the country, and Kerala has emerged as one of its most successful examples of this model. The company has tied up with leading banks in the state, like Federal Bank and The South Indian Bank, as well as some other strong retail financial services distributors such as Emgee Muthoot. Each of these are key partners in ICICI Prudential's alternate distribution strategy and contribute greatly to the company's business as well as awareness levels and customer experience. Speaking at the event, Ms Shikha Sharma, CEO & MD, ICICI Prudential Life Insurance said, ''It's been wonderful to see the evolution of Emgee Muthoot into a diversified financial services company. Ever since they decided to become corporate agents and distribute our life insurance products in February 2002, they have made huge strides in training and developing their workforce to sell a complex product like life insurance, and deliver value to their customers. I believe that it is thanks to these efforts that they are today not only our leading corporate agent in Kerala, but the second largest in the country''. Mr. George Alexander Muthoot, Managing Director, the Muthoot group, said ''A few years ago, we took a strategic decision to leverage our extensive branch network and thereby expand the scope of the services we offer our customers. Our partnership with ICICI Prudential has been fantastic, and today life insurance has become a core business for us. I believe that the success of this relationship has been founded on our shared values and mission to deliver a superior experience to our customers''. Emgee Muthoot is one of the most successful corporate agents for ICICI Prudential, and has been one of the frontrunners in the company's Partner Program, an initiative to strengthen relationships with key partners. The group's strategic move towards a branch model of 29 29 BABASAB PATIL

Comparison between traditional plan & ULIPs distribution in mid-2003 served as a catalyst for the group's life insurance foray, and the company has earned over Rs 5 crore in premium income since the beginning of this financial year alone. ICICI Prudential's early start and continued focus on alternate channels, which include bank tie-ups, corporate agents and brokers, has resulted in these channels contributing nearly 30% of ICICI Prudential's new business. Currently, ICICI Prudential has 7 bank relationships and over 150 corporate agency and broker tie-ups.

Overview:
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and Prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. We began our operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of 2099 branches (inclusive of 1,116 micro-offices), over 276,000 advisors; and 18 bancassurance partners. ICICI Prudential is the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'. As we grow our distribution, product range and customer base, we continue to tirelessly uphold our commitment to deliver world-class financial solutions to customers all over India. Mumbai, September 3, 2007: ICICI Prudential Life Insurance, India's leading private life insurance company, has simultaneously crossed 2 significant milestones, further strengthening its position as a market leader. It has become the first private life insurer to cross the 5 million policies mark, a milestone that has pushed the company's assets held past the 20,000 crore milestone. Each of these achievements reflect the trust retail investors have reposed in the company as well as the immense reach that the company has been able to build over the past few years, particularly the last 18 months

30 BABASAB PATIL

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Comparison between traditional plan & ULIPs The ICICI Prudential Edge: The ICICI Prudential edge comes from our commitment to our customers, in all that we do - be it product development, distribution, the sales process or servicing. Here's a peek into what makes us leaders. 1. Our products have been developed after a clear and thorough understanding of customers' needs. It is this research that helps us develop Education plans that offer the ideal way to truly guarantee your child's education, Retirement solutions that are a hedge against inflation and yet promise a fixed income after you retire, or Health insurance that arms you with the funds you might need to recover from a dreaded disease. 2. Having the right products is the first step, but it's equally important to ensure that our customers can access them easily and quickly. To this end, ICICI Prudential has an advisor base across the length and breadth of the country, and also partners with leading banks, corporate agents and brokers to distribute our products . 3. Robust risk management and underwriting practices form the core of our business. With clear guidelines in place, we ensure equitable costing of risks, and thereby ensure a smooth and hassle-free claims process. 4. Entrusted with helping our customers meet their long-term goals, we adopt an investment philosophy that aims to achieve risk adjusted returns over the long-term. 5. Last but definitely not the least, our team is given the opportunity to learn and grow, every day in a multitude of ways. We believe this keeps them engaged and enthusiastic, so that they can deliver on our promise to cover you, at every step in life.

OUR VISION, MISSION QUALITY POLICY


To be the dominant Life, Health and Pensions player built on trust by world-class people and service This we hope to achieve by: 31 BABASAB PATIL Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to 31

Comparison between traditional plan & ULIPs offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.

Our values:
Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.

Promoters:
ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country with consolidated total assets of about US$ 95 billion as of March 31, 2009. ICICI Banks subsidiaries include Indias leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Banks presence currently spans 19 countries, including India. Prudential: Established in London in 1848, Prudential plc is a leading internal retail financial services group with significant operations in Asia, the US and the UK. Prudential has been writing protection and savings insurance for over 160 years, and today has more than 21 million customers worldwide and over 249 billion in assets under management (as of December 31, 2008). In Asia, Prudential is the leading Europe-based life insurer with operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the largest asset management companies in terms of overall assets sourced in Asia ex-japan, with ?36.8 billion funds under management (as of December 31, 2008) and operations in ten markets including China, Hong 32 BABASAB PATIL 32

Comparison between traditional plan & ULIPs Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates. The Company ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector 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 March, 2009) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the period April 1, 2008 to March 31, 2009, the company has posted a growth of 13%, garnering total received premium (new business + renewal) of Rs 15,356 crores as against Rs 13,563 crores in FY2008 and has underwritten over 9 million policies since inception. The company has assets held over Rs. 32,000 crores as on March, 2009. ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past eight years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

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Comparison between traditional plan & ULIPs

STAGES IN POLICY ISSUANCE:


Proposal

A Proposal Stage is the First stage before the policy is issued at COPS. At this stage, the application form is received by COPS, but it is pending for issuance due to further clarifications required from the customer. Login

A proposal, which is complete i.e., duly filled with all necessary documents attached to it & accepted by the Branch ops, is called a Login Reject An Application gets rejected at the Branch Ops level due to necessary details not filled in the form or necessary documents not submitted are a Reject. It is then sent back to the Advisor for completion. Issuance Issuance means a policy that is issued to the Customer by Central Ops. Decline Status Cancellation

When a customer refuses to take a policy post login but before Issuance is called a Decline When the cheque given by the customer bounces, it amounts to cancellation of the policy. Lapse Free look

A policy for which the Customer fails to pay subsequent premiums is a Lapsed Policy. Post issuance of the policy, the policyholder has the option to turn down the policy within 15 days from the date of issuance. This period of 15 days is called Free look Period. Surrender Surrender. When a customer wants to discontinue with the policy it is called

Distribution Channels:
34 BABASAB PATIL 34

Comparison between traditional plan & ULIPs Tied Agency Channel The Tied Agency Channel, as the name suggests, is driven by agents (advisors) of the company. For insurance distribution, this is the most popular channel. This channel sourced 73% of ICICI Prudentials business in FY 2004. Bank assurance: Bank assurance is a setup whereby a tie up is made with a Bank. This distribution model works on referral basis. The customer base of the bank that is made available to it benefits the Insurance Company. The bank, in return earns referral commission for every policy issued to the bank customer. In this arrangement, typically an employee of the ICICI Prudential is stationed at the bank branch and he sources the business through walk-ins that happen at the bank. His domain of prospective customers is a banks customer. Such agents put up at banks are called as Financial Service Consultant (FSC). Banc assurance, as an arrangement for distribution, has been proved successful because of the extended reach that the insurance company gets through the bank branch network. Corporate Agents: Corporate Agents (CAs) are corporate entities that source policies for the Insurance Company with whom they have a tie-up. They are authorized to source policies for one insurance company only. The difference between CA & Banc assurance arrangement is that the former trains its own employees to sell the policies while in case of Banc assurance arrangement, the employees of the insurance company (FSCs) source the business. Brokers: A variant of CAs, Brokers are not tied to a particular company and are allowed to source business for more than one insurance company. Direct Marketing: Direct marketing, as a channel of distribution, is relatively a new one. It basically encompasses all unconventional channels of distribution. Inter alia, it includes call center, Internet and other mass media channels. All leads that come through this channel are then attended and closed by our branches. Advisor: An Advisor is the agent of the Company who sources or sells the policy for the company. They are called as FOS - Feet on Street.

INSURANCE PRODUCT AND SERVICE:


ICICI Prudentials ultimate promise is financial security. A strong brand certainly boosts 35 BABASAB PATIL 35

Comparison between traditional plan & ULIPs sale, but without customer-friendly, innovative products, even the best brand would not last long. ICICI Prudentials product range has been developed on the understanding that different people have their own sets of needs at various stages of their lives. It has thus built a flexible portfolio of products that can be customized to cater to varying needs of people at each stage, and thus ensure protection in every step of life. The companys philosophy has been to help customers understand their financial needs and work closely with them to customize a product that would meet. Advisors can offer a complete range of products Savings plans, Child plans, Market-linked plans, Protection plans, and Retirement plans and tailor a flexible solution to meet customers changing needs at every stage of life. In fact, ICICI Prudential was the first to un-bundle product benefits, pioneering the concept of riders and soon after introduce comprehensive market-linked and retirement plans. ICICI Prudential has launched a handful of products that are analyzed below: ICICI Prudential's life insurance products may be loosely categorized under three forms: pure life insurance products without an investment angle to them; a product that is a mix of a cumulative investment scheme and an insurance product; and, finally, standard products such as money-back and endowment policies.

PRODUCTS:
Insurance Solutions for Individuals ICICI Prudential Life Insurance offers a range of innovative, customer-centric products that meet the needs of customers at every life stage. Its products can be enhanced with up to 4 riders, to create a customized solution for each policyholder. Life Time Gold is a unit-linked plan which offers potentially higher returns over the long term with flexible investment options to help you achieve your goals. It offers 8 fund options - Preserver, Protector, Return Guarantee Fund, Balancer, Flexi Balanced Multiplier, R.I.C.H and Flexi Growth. Life Stage RP is unit linked plan that provides you with an option of lifecycle-based portfolio strategy that continuously re-distributes your money across various asset classes based on the customers profile, helping him achieve his desired financial goals. LifeLink Super is a single premium unit linked insurance which offers attractive premium allocation along with the opportunity to enjoy potentially high returns over the long term, 36 BABASAB PATIL 36

Comparison between traditional plan & ULIPs without compromising on the protection of your family. InvestShield Life New is a unit linked plan that provides premium guarantee and allows the customer to enjoy the benfits of potentially higher returns while guaranteeing him that he will get back atleast all the premiums paid by him, while providing protection to your family with a life insurance cover. InvestShield Life New is a unit linked plan that provides premium guarantee and allows the customer to enjoy the benfits of potentially higher returns while guaranteeing him that he will get back atleast all the premiums paid by him, while providing protection to your family with a life insurance cover. InvestShield Cashbak is a unit linked plan that provides premium guarantee while maintaing a balance between return, safety & liquidity. Wealth Advantage s a unique whole life single premium unit linked plan that provides long term coverage upto the age of 70 years and provides you the option to systematically withdraw your money. Life Stage Assure a unit linked insurance plan that provides Guaranteed Maturity Addition of 100%- 450% of first year premium based on the term and number of premiums paid, with the additional advantage of a lifecycle based portfolio strategy that allocates the investors money across various asset classes based on his age and risk appetite Protection Solutions Pure Protect is a flexible and affordable term product, with which you can ensure your life and provide total security for your family in case of an unfortunate event. Life Guard is a protection plan, which offers life cover at low cost. It is available in 2 options level term assurance with return of premium & single premium. Home Assure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective mannerChild Plans: Smart Kid New ULRP: The policy is designed to provide money at key educational milestones in the child's life. SmartKid plans are also Retirement Solutions: 37 Forever Life is a traditional retirement product that offers guaranteed returns for 37 BABASAB PATIL

Comparison between traditional plan & ULIPs the first 4 years. Life Time Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5,10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement. Life Stage Pension is a regular premium unit linked pension plan that provides you with a unique lifecycle-based strategy that continuously re-distributes your money across various asset classes based on your age and risk profile. Life Link Super Pension is a single premium unit linked pension plan. Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options. Health Solutions: Hospital Care is a fixed benefit plan covering various stages of treatment hospitalization, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20 years. Crisis Cover is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death. Diabetes Care Active is a long term insurance policy created for individuals with Type II diabetes and pre-diabetes. It offers long term (upto 20 years) control over diabetes through a specially designed Wellness Programme including regular health checkups and a Diabetes Coach to facilitate diabetes management. It also provides you coverage against seven major critical illnesses. Cancer Care is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Medical Assure is a health insurance policy that provides assured insurability till age 75 years, assured coverage for accepted pre-existing illnesses after 2 years and 38 BABASAB PATIL 38

Comparison between traditional plan & ULIPs an assured price for 3 years. Health Saver provides comprehensive hospitalization cover and reimburses all other medical expenses by building a health fund. available in traditional form Flexible Rider Options: ICICI Prudential Life offers flexible riders, which can be added to the Basic policy at a marginal cost, depending on the specific needs of The customer. Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser. If the death occurs while travelling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. Critical illness benefit: Critical Illness Benefit Rider provides protection against 9 critical illnesses to the policyholder when attached to the basic plan. Waiver of premium: On total and permanent disablement due to accident all future premiums under the base plan will be waived till the end of the term of the rider or death of assured life, if earlier.

Income benefit rider: In case of death of the Life Assured during the term of the policy, 10% of the Sum Assured is paid annually to the nominee on each policy anniversary till the maturity of the rider. Table Ownership Pattern
Nature of relationship Holding Company Name of the related party ICICI Bank Limited

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Comparison between traditional plan & ULIPs


Substantial Interest Fellow Subsidiaries Prudential Corporation Holdings Limited ICICI Brokerage Services Limited ICICI Venture Funds Management Company Limited ICICI Home Finance Company Limited ICICI Lombard General Insurance Company Limited ICICI Trusteeship Services Limited ICICI Securities Limited ICICI Securities Inc. ICICI Securities Holding Inc. ICICI Investment Management Company Limited ICICI International Limited ICICI Bank UK Limited ICICI Bank Canada ICICI Bank Eurasia L.L.C. (formerly Investment Credit Bank Limited Liability Company) Prudential ICICI Asset Management Company Limited Prudential ICICI Trust Limited ICICI Property Trust Shikha Sharma, Managing Director N. S. Kannan, Executive Director (appointed on August 1, 2005) ICICI Prudential Life Insurance Company ICICI Prudential Life Insurance Company Limited Limited

Key management personnel

Employees Group Gratuity Cum Life Insurance Scheme Significant influence Employees Provident Fund ICICI Prudential Life Insurance Company Limited Superannuation Scheme

Competitors:
LIFE INSURERS Websites Public Sector Life Insurance Corporation of India www.licindia.com Private Sector Allianz Bajaj Life Insurance Companywww.allianzbajaj.co.in Limited Birla Sun-Life Insurance Company Limited www.birlasunlife.com HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com ING Vysya Life Insurance Company Limited www.ingvysayalife.com Max New York Life Insurance Co. Limited www.maxnewyorklife.com MetLife Insurance Company Limited www.metlife.com Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com SBI Life Insurance Company Limited www.sbilife.co.in TATA AIG Life Insurance Company Limitedwww.tata-aig.com Dabur CGU Life Insurance Co. Pvt. Limited www.avivaindia.com 40 BABASAB PATIL 40

Comparison between traditional plan & ULIPs GENERAL INSURERS Public Sector National Insurance Company Limited www.nationalinsuranceindia.com New India Assurance Company Limited www.niacl.com Oriental Insurance Company Limited www.orientalinsurance.nic.in United India Insurance Company Limited www.uiic.co.in Private Sector Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.in ICICI Lombard General Insurance Co. Ltd. www.icicilombard.com Reliance General Insurance Co. Limited www.ril.com Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com TATA AIG General Insurance Co. Limited www.tata-aig.com Cholamandalam General Insurance Co. Ltd. www.cholainsurance.com Export Credit Guarantee Corporation www.ecgcindia.com HDFC Chubb General Insurance Co. Ltd. REINSURER General Insurance Corporation of India www.gicindia.com

Market share:
ICICI Prudential Life Insurance hiked its market share to 42.72 per cent in the OctoberNovember period last year, up from 37.92 per cent in first quarter and 38.85 per cent in the second quarter of the current fiscal. Its total share of the Rs 439.2-crore premium collected by private players during the AprilNovember period stood at 39.66 per cent. Its aggregate estimated premium income amounted to Rs 174.2 crore as at the end of November. According to ICICI officials, while the premium mop-up by private companies in April-June 2002 was about Rs 117 crore, the corresponding figures for the July-September and October-November periods were Rs 201.3 crore and Rs 120.8 crore. Out of this, ICICIs premium income stood at Rs 44.4 crore, Rs 78.2 crore and Rs 51.6 crore, respectively. They cited Irda statistics saying the total premium income of the life sector was Rs 1,191 crore in April-June, 2002, and Rs 3,512.8 crore uptil September.

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Comparison between traditional plan & ULIPs

ORGANIZATION STRUCTURE

BRANCH OFFICE

SALES

OPERATION

SALES MGR

SALES MGR

SALES MGR

REGIONAL HEAD OPERATOR

ASM

ASM

ASM
ZONAL MGR

AGENCYMGR AGENCYMGR AGENCYMGR

STATE MGR
UNIT MGR UNIT MGR UNIT MGR

BRANCH MGR
FINANCIAL ADVISORS FINANCIAL ADVISORS FINANCIAL ADVISORS TEAM LEADER

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EXECUTIVE 42

Comparison between traditional plan & ULIPs

BOARD OF DIRECTORS Ms. Chanda .D. Kochhar Mr. N. S. Kannan Mr. K. Ramkumar Mr. Barry Stowe Mr. Adrian OConnor Mr. Keki Dadiseth Prof. Marti G. Subrahmanyam Ms. Rama Bijapurkar Mr. Vinod Kumar Dhall Mr. V. Vaidyanathan : Chairperson : Director : Director : Director : Director : Director : Director : Director : Director : Managing Director & CEO

Management team
Mr.V.Vaidyanathan, Ms. Anita Pai, Dr. Avijit Chatterjee, Mr. Puneet Nanda, : Managing Director & CEO : Executive Vice Presiden Customer Service, Technology & Marketing : Appointed Actuary : Executive Vice President

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Comparison between traditional plan & ULIPs

Awards and Achievements


Innovation Award for launching Diabetes Care Prudence Award 2006 People Award for excellence in training and people development Prudence Award 2006

India's

Most

Customer

Responsive Insurance Company - Economic Times Customer Responsiveness Awards

Most Trusted Private Life Insurer: The Economic Times - A C Nielsen Survey of Most Trusted Brands 2004

Prudence Customer Centricity Award 2004 & 2005: Prudential Corporation Asia

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Comparison between traditional plan & ULIPs

Best Life Insurer 2003: Money 2003-04 Outlook Awards

IMM Award for Excellence: Institute of Marketing & Management Organization with Innovative HR Practices: Indira Group of Institutes

Superbrand 2003-04

Organization with Innovative HR Practices: Asia-Pacific H R Congress Awards for HR Excellence Silver Effie for Effectiveness Work not of life the Retire from advertising campaign: Effies 2003 Most Trusted Private Life Insurer: The Economic Times - A C Nielsen Survey of Most Trusted Brands 2003 Best New Insurer: Outlook Money Awards 2003

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Comparison between traditional plan & ULIPs

Data source:
Primary Data: Secondary Data: Personal interactions, Observations Training programs. Through Questionnaire Study material by IRDA and ICICI Prudential. Related websites, Past records of ICICI Prudential.& Brochures and pamphlets of ICICI Prudential

Sampling:
a) Population b) Size c) Method : People Hubli city : 100 size : Random sampling

MEASURING TOOLS: SPSS Software used for measuring the response is in terms of percentage method using graphical charts like Bar graphs & Pie charts.

ANALYSIS:
1. Gendor: 46 BABASAB PATIL 46

Comparison between traditional plan & ULIPs

Frequency Percent Valid Male Female Total 73 27 100

Valid

Cumulative

Percent Percent 73.0 73.0 73.0 27.0 27.0 100.0 100.0 100.0

gendor
80

60

40

Frequency

20

0 male female

gendor

Interpretation: According to survey we have come to now the out of 100 responds in that 73% are male and 27% female. Therefore male are more than female in Hubli city.

2. Occupation Frequency Percent Valid Cumulativ Percent e Percent

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Comparison between traditional plan & ULIPs


Validgovernment employee private employee student business man Others Total 9 36 1 29 25 100 9.0 36.0 1.0 29.0 25.0 100.0 9.0 36.0 1.0 29.0 25.0 100.0 9.0 45.0 46.0 75.0 100.0

occupation
40

30

20

Frequency

10

0 goverement employee private employee student bussiness man others

occupation

Interpretation: According survey i came know that at 9% are government,36% are private people, 1% Are student, 29% are businessman, 25% are other.

3. Why did you go for ICICI prudential life insurance? Frequency Percen Valid Cumulativ t Percen e Percent t

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Comparison between traditional plan & ULIPs


Validbrand name product profile advisors connivance ability advertisement Total 39 18 36 7 39.0 18.0 36.0 7.0 39.0 18.0 36.0 7.0 100.0 39.0 57.0 93.0 100.0

100 100.0

why did you go for icici pru life insurance


50

40

30

20

Frequency

10

0 brand name advisors convinacy a product profile advertsement

why did you go for icici pru life insurance

Interpretation:
From above table clear that brand name 39%, product profile 18%, advisors convince ability 36%, advertisement 7% .

4. Your savings consist of


Frequency Valid post office bank f,d Shares land/ building Percent 17 10 6 6 17.0 10.0 6.0 6.0 Valid Percent Cumulative Percent 17.0 10.0 6.0 6.0 17.0 27.0 33.0 39.0

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Comparison between traditional plan & ULIPs


Life insurance Gold not respond Total 55 3 3 100 55.0 3.0 3.0 100.0 55.0 3.0 3.0 100.0 94.0 97.0 100.0

your savings consist of


not respond gold post office

bank f,d

shares life insurance land/ building

Interpretation: According to survey we have come to know that 17% of responds are saving There income in post office, 10% responds are saving in bank f.d, 6% responds are Saving there income in shares, 6% responds are saving there income in land/building, out of 100 responds are 55% peoples are saving there income in life insurance because to protect there life in future.3% people are save there income in gold and 3% are not responds there income 5. The following insurance plan you have
Frequency Percent Valid smart kid life time gold cash back retirement solution if other specify 16 16 9 10 31 16.0 16.0 9.0 10.0 31.0 Valid Percent 16.0 16.0 9.0 10.0 31.0 Cumulative Percent 16.0 32.0 41.0 51.0 82.0

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Comparison between traditional plan & ULIPs


not respond Total 18 100 18.0 100.0 18.0 100.0 100.0

the following insurance plan you have


40

30

20

Frequency

10

0 smart kid life time gold cash back if other specify not respond retirement solution

the following insurance plan you have

Interpretation: According to survey we have come to know out of 100 responds they have choice insurance plan in ICICI prudential 16% of people in smart kid, 16% of responds life time gold, cash back is only 9%, 10% responds retirement solution31% and 18% are others and not responds.

6. How much of premium amount o policy you have


Frequency Percent Valid 5000-10000 1000020000 2000050000 50000&abo ve not respond Total 63 13 2 1 21 100 63.0 13.0 2.0 1.0 21.0 100.0 Valid Percent 63.0 13.0 2.0 1.0 21.0 100.0 Cumulative Percent 63.0 76.0 78.0 79.0 100.0

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Interpretation: According to survey we have come to know that 63% of responds There premium amount 5000-10000, and 13% responds are prefer to10000-20000 Only 2% responds are premium 20000-50000, 1% and 21% 50000 above and not responds 7. Did you know about the life insurance?
Frequency Percent Valid magazines/n ews papers television advisors Friends relatives not respond Total 1 5 55 20 6 13 100 1.0 5.0 55.0 20.0 6.0 13.0 100.0 Valid Percent 1.0 5.0 55.0 20.0 6.0 13.0 100.0 Cumulative Percent 1.0 6.0 61.0 81.0 87.0 100.0

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did you know about the life insurance?


magaznes/new s papers not respond television

relatives

friends advisors

Interpretation: According to survey we have come to know out of 100 responds are know about the life insurance from different sources 1% responds magazines/news papers 5% respondent are 5% respondent are television more of respondent are come to know from advisors,20% respondent are friends,6% are relatives and 13%are not respond.

8. Are aware of ulip and traditional plan?


Frequency Valid Yes No not respond Total 61 32 7 100 Percent Valid Percent 61.0 32.0 7.0 100.0 61.0 32.0 7.0 100.0 Cumulative Percent 61.0 93.0 100.0

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are aware of ulip and traditional plan?


70 60 50 40 30 20

Frequency

10 0 yes no not respond

are aware of ulip and traditional plan?

Interpretation: According to survey we have come to know that most of people are ulip Which is 61%and 32% are traditional plan and reaming are not respondent.

9. In which companies have you invested


Frequency Percent Valid LIC ICICI pru life insurance Bajaj Allianz not respond 19 44 14 23 19.0 44.0 14.0 23.0 Valid Percent 19.0 44.0 14.0 23.0 Cumulative Percent 19.0 63.0 77.0 100.0

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Total 100 100.0 100.0

in which company have you invested


50

40

30

20

Frequency

10

0 lic icici pru life insur bajaj allianz not respond

in which company have you invested

Interpretation: According to survey we have come to know that 19% respondent are invested in LIC life insurance 44% are peoples are ICICI prudential insurance,14% are Invested are in Bajaj Allianz life insurance and remaining 23% are not respondent. 10. For what purpose you invested in that company?
Frequency Percent Valid tax saving risk cover Returns Safety Others not respond Total 14 42 21 6 1 16 100 14.0 42.0 21.0 6.0 1.0 16.0 100.0 Valid Percent 14.0 42.0 21.0 6.0 1.0 16.0 100.0 Cumulative Percent 14.0 56.0 77.0 83.0 84.0 100.0

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for what purpose you invested in that company?


50

40

30

20

Frequency

10

0 tax saving risk cover returns safty others not respond

for what purpose you invested in that company?

Interpretation:
According to survey we have come to know out of 100 respondent 14% Are they have invested in life insurance tax saving,42% are to risk saving purpose 21% respondent for purpose of risk cover, and 6% are safety purpose,1% And 16% Are others and not respondent.

11. Which of the following invested plan would you prefer?


Frequency Percent Valid traditional plan Unit linked insurance not respond Total 20 61 19 100 20.0 61.0 19.0 100.0 Valid Percent 20.0 61.0 19.0 100.0 Cumulative Percent 20.0 81.0 100.0

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Comparison between traditional plan & ULIPs

which of the following invested plan would you prefer


70 60 50 40 30 20

Frequency

10 0 traditional plan unit linked insuranc not respond

which of the following invested plan would you prefer

Interpretation:
According to survey we have know that in icici prudential life insurance comparing between ulip and traditional plan. Out of 100 respondents 20 % traditional plan invested, and 61% are invested in ulip and 19% are not respondent.

12. Have you invested in this plan?


Frequency Percent Valid Yes No not respond Total 65 23 12 100 65.0 23.0 12.0 100.0 Valid Percent 65.0 23.0 12.0 100.0 Cumulative Percent 65.0 88.0 100.0

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have you invested in this plan


70 60 50 40 30 20

Frequency

10 0 yes no not respond

have you invested in this plan

Interpretation:
According to survey 65% respondent are invested in ulip And 23% are not invested. 12% are respondent not respondent.

13. If, yes why did you give Importance in this plan?
Frequency Percent Valid Returns withdrawals Charges premium Others not respond Total 32 18 15 10 2 23 100 32.0 18.0 15.0 10.0 2.0 23.0 100.0 Valid Percent 32.0 18.0 15.0 10.0 2.0 23.0 100.0 Cumulative Percent 32.0 50.0 65.0 75.0 77.0 100.0

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if,yes why did you give imporance in this plan


40

30

20

Frequency

10

0 returns w ithdraw als charges premium others not respond

if,yes why did you give imporance in this plan

Interpretation: According to survey we come to know that 32% Invested for the return, 18% invested for purpose withdrawals, 15%Charges facility, 10% respondent premium, 2% and 23% others and Not respondent.

14. Rank the unit linked insurance plan?


Frequency Percent Valid excellent Very good Average Bad not respond Total 24 37 18 4 17 100 24.0 37.0 18.0 4.0 17.0 100.0 Valid Percent 24.0 37.0 18.0 4.0 17.0 100.0 Cumulative Percent 24.0 61.0 79.0 83.0 100.0

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rank the unit linked insurance plan


40

30

20

Frequency

10

0 excellent very good average bad not respond

rank the unit linked insurance plan

Interpretation: From above table rank the unit linked plan 24% excellent, 37% very Good , 18% respondent average, 4% ,17% are bad and not respondent.

15. How much invested in unit linked plan?


Frequency Valid 1000050000 50000-1lack 5lack above not respond Total 64 11 1 24 100 Percent 64.0 11.0 1.0 24.0 100.0 Valid Percent 64.0 11.0 1.0 24.0 100.0 Cumulative Percent 64.0 75.0 76.0 100.0

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how much invested in unit linked plan


70 60 50 40 30 20

Frequency

10 0 10000-50000 50000-1lack 5lack above not respond

how much invested in unit linked plan

Interpretation:
From above table we have know that 64%invested in unit linked plan 11% 50000-1lack, 24% are not respondent.

16. You invested in life insurance because of. Frequency Percent Valid Cumulative Valid Life security for our self For protect for your family members For retirement befit For children benefit For investment only Not respond Total 61 BABASAB PATIL 3 11 42 18 8 3 15 100 3.0 11.0 42.0 Percent 3.0 11.0 42.0 Percent 3.0 14.0 56.0 74.0 82.0 85.0 100.0

18.0 18.0 8.0 8.0 3.0 3.0 15.0 15.0 100.0 100.0

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you invested in life inurance because of

not respond

life security for ou

for investement only for children benfit

for retirement befit

for protect for your

Interpretation: From above table we have know that respondent are investing in life insurance 11% life security, 42% for protect family members, 18% retirement benefit 8% for childrens,3% investment,15% not respondent.
17. Tick the factors

of prime importance to you while purchasing life insurance


FrequencyPercent ValidBrand name product portfolio personal advisor needs advisor connivance ability service aspects Total 25 23 23 16 25.0 23.0 23.0 16.0 Valid Cumulative Percent Percent 25.0 23.0 23.0 16.0 25.0 48.0 71.0 87.0

13

13.0

13.0 100.0

100.0

100 100.0

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tick the factors of prime imporance to you while purchaging life insuran

service aspects brand name

advisor convinace ab

product portfolio personal advisor nee

Interpretation: From above table is show that respondent the factor influence while purchasing life insurance out 100 respondents 25% brand name, 23% product portfolio and personal advisor needs, 16% advisor convince ability, 13% service aspects.

Findings
Brand Name of the company is the main reason for the advisors to join ICICI Prudential followed by product portfolio and excellent support from the company. Almost all of them are satisfied with the services offered to them. As the endowment products, dont have much liquidity option most people follow the Market linked product. Almost all respondent are investing in unit linked product in ICICI prudential life insurance. 63 BABASAB PATIL 63

Comparison between traditional plan & ULIPs Risk cover is the most important factor as per the respondents followed by investment and savings. In ICICI pru life insurance have facing lack of advertisings. Most of the respondents are satisfied from the return, risk cover and tax savings provided by the products to its customers

LIMITATION
Not single work is exception to the limitation every work every work has got

its limitations. It is assumed that the sample selected represents entire population. Another limitation of the project was that the study and the survey were

conducted in Hubli city only.

Suggestions
Continuous bombardment of Advertisement by ICICI Prudential as a Life Insurance Company for a common man as well as for well educated and good salaried people. The company has concentrate increases on premium 20000-50000. Look for the way to make customer highly satisfied with respect to returns. Premium and initial charges to be reworked as, the customer is dissatisfied with there.

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Conclusion
Every study and project needs to be concluded. Hence, based on the study of ICICI Prudential and its products in brief, and also conducting a survey on the customers and advisors sales function towards the products offered and services provided by ICICI Prudential, I have arrived on a conclusion that ICICI Prudential Lifes market share stood at 11.8%, for 10-month ended January 31, 2009, making it the leading private life insurance player. As on January 31, 2009, the companys assets under management (AUM) stood at Rs 28,515 crore. The company also has one of the largest distribution networks amongst private life insurers in India with over 2,100 branches (including 1,116 small-offices in rural India), an advisor base of over 2,90,000 and 18 bancassurance partners, as on January 31, 2009. Since inception, ICICI Prudential Life has sold over 90 lakh policies.

BIBLIOGRAPHY

IRDA Notes ICICI Prudential training notes 65 BABASAB PATIL 65

Comparison between traditional plan & ULIPs WWW.iciciprulife.com

WWW.licindia.com WWW.google.com Business magazines (business times) News papers (Economic times, Times of India).

QUESATIONNAIRE Dear Sir/Madam

Personal information
1) Name 2) Age 3) Gender 4) Contact no 5) Occupation : __________________________________________ : 15-20 , : Male 20- 25 25-30 Female 30-40

:____________________________ : Government employee Student Private employee Businessman 66 BABASAB PATIL

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Others 6) Annual income: Less than 100,000 3,00,000-4,00,000 1,00,000-2,00,000 4,00,000 & above

7) Address:_______________________________________________

______________________________________________________

8) Why did you go with ICICI Prudential? a) Brand Name c) Advisors Convincing ability e) Friends/ Relatives 9) Your saving consist of. a) Post office c) Shares e) Life insurance b) Bank F. D d) Land / Building f) Gold b) Product Portfolio d) Advertisements f) Others-------------------------

10) Which of the following insurance plan you have? a. Smart kid b. Cash Back c. Life Time gold d. Retirement Solution

If others specify ______________________________ 11) How much of premium amount of policy you have? a. 5000-10,000 67 BABASAB PATIL c. 10,000-20,000 67

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b. 20,000-50,000

d. 50,000& above

12) How did you know about the life insurance life ? a. Magazines/news papers b. Television c. Advisors d. Friends e. Relatives

13) Are you aware of ULIP s and Traditional plan at ICICI prudential life insurance Company ? Yes 14) In which company have you invested? a. LIC b. ICICI prudential life insurance c. Bajaj Allianz d. Reliance life insurance e. Others 15) For what purpose you invested in that company? a. Tax saving b. Risk cover c. Returns d. Safety e Others 16) Which of the following Invested plan would you prefer? 68 BABASAB PATIL No

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a. Traditiononal plan b. Unit linked Insurance 17) Have you invested in this plan? Yes No

18) If yes, why did you give importance in this plan? a. Returns c Charges e Other b. Withdrawals d. Premium

19) Rank the Unit linked insurance plan? Excellent very good Average Bad Wast

20) How much invested in unit linked plan ? 1) 10000 -50000 2) 1 lack -5 lack 2) 50000- 1 lack 3) 5 lack above

21) You have invested in life insurance because of 1) Life security for our self 2) For protect for your family members 3) For retirement benefit 4) For children benefit 5) For investment only 22) Tick the factor/s of prime importance to you while purchasing a life Insurance Plan. 69 BABASAB PATIL 69

Comparison between traditional plan & ULIPs a) Brand Name c) Personal financial needs e) Service Aspects b) Product Portfolio d) Advisors Convincing ability f) Others________________ Thank you sir

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