137705106 hdfc life insurance final project report
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PROJECT REPORT
SUBMITTED THE PARTIAL FULFILLMENT OF THE
M.B.A. DEGREE
ON
SYNERGY OF HIGH NETWORTH INDIVIDUALS
(HNIS) WITH THEIR DISTRIBUTION CHANNEL
SESSION-2009-2011
Submitted to: Submitted by:
RAJASTHAN TECHNICAL UNIVERSITY
KOTA (RAJASTHAN) RAKESH KATARIA
M.J.R. Collage of Engg. & Technology, Jaipur
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PREFACE
Theories are being developed, designed and stated on the groundwork
of their practical implementation and usage. Work experience seems
to be the most effective and indispensable factor of making an
individual an adept. This is because one can not do without being
exposed to varying circumstances and possible consequences. Training
not only develops individual skills and abilities but also provides
proficiency in work performance.
This report served as a means to share my personal experiences while
working on this project which provided me the platform where I was
face to face with practical aspects of theoretical knowledge gained so
far.
This training project report has been prepared during the summer
training of 45 working days in an organization. It is an integral part of
MBA curriculum. The summer training was challenging, gainful and
interesting and it gave real insight of corporate world.
I sincerely believe that there is no better place to learn the practical
side of management studies than the industry itself.
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ACKNOWLEDGEMENT
The project report prepared by us though bears our name alone but is
actually a collective effort. I am indeed indebted to a lot of people and
their names surely deserve to be mentioned.
I feel immense pleasure in conveying my heartiest thanks and deep
sense of gratitude to Mr. Satya Prakash Singh, Channel
Development Manager HDFC Standard Life Insurance Company Ltd.
Jaipur, for giving me an opportunity to work on the project.
I offer my sincere thanks to Mr. Mahendra Kumar Bairwa, Sales
Development Manager HDFCSLIC Ltd. Jaipur-IV, for their regular
guidance in the project and to sharpen my rough edges from time to
time.
I would like to particularly mention my deep gratitude to Prof. Satish
Agarwal, Head of Department (Department of management studies)
and Dr. Shiv Prasad (Training and Placement officer) ManagementStudies giving their consent and blessings to undertake this training.
(RAKESH KATARIA)
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CONTENTS
1. Introduction
2. Company Profile
3. Vision and Values of the Company
4. Branch Profile
5. Products of HDFCSLIC Ltd.
6. SWOT Analysis
7. Findings and Suggestions
8. Questionnaire
9. Conclusion
10. Bibliography
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INTRODUCTION
Introduction to Insurance
Every asset has a value for its owner and also for those who are
benefited with the existence of that asset. Insurance is concerned with
the protection of economic value of assets.
Every asset has normally an expected lifetime. During this period, it is
expected to perform and provide income/comfort to the owner. The
owner, being aware of this, plans the things in such a way that by the
time the expected lifetime of the asset expires, he is ready with the
funds required for its replacement. In this way, he ensures that the
value or income from the asset is not lost. Well, this appears to be a
fine arrangement provided the asset completes its expected lifetime!
All assets carry the risk of being destroyed or damaged. But all assets
may not necessarily get destroyed or damaged. Only in a few
instances, the probability turns out to be true and the asset gets
actually lost or destroyed by accident or some other unfortunate event
before the completion of its expected lifetime. The owner and those
deriving benefits from the asset will suffer because the arrangement to
make available its substitute is not yet ready.
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Insurance is helpful in mitigating such adverse consequences. To sum
up, assets are insured, as they are likely to be lost or made non-
functional through an accidental occurrence.
Insurance does not protect the assets. This means that insurance
cannot prevent loss to the assets due to perils. Nor can insurance
avoid the occurrence of the perils. It only compensates, may not be
fully, the economic or financial loss resulting to the asset from such
damage or destruction.
History of Insurance
The beginning of insurance business is traced to the city of London. It
started with the marine business. Marine traders, who used to gather
at Lloyds coffee house in London, agreed to share losses to goods
during transportation by ship. Marine related losses included:-
Loss of ship by sinking due to bad weather in high seas.
Goods in transit by ship robbed by sea pirates. Loss of or damage to the goods in transit by ship due to
bad weather in high seas. The first insurance policy was
issued in England in 1583.
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Life Insurance in India
In India, insurance started with life Insurance. It was in the early 19 th
Century when the Britishers on their postings in India felt the need of
life insurance cover.
It started with English Companies like... The European and the Albert.
The First Indian insurance company was the Bombay Mutual Assurance
Society Ltd., formed in 1870.
In the wake of the Swadeshi Movement in India in the early 1900s,
quite a good number of Indian companies were formed in various parts
of the country to transact insurance business. To name a few::
Hindustan Co-operative and National Insurance in Kolkata; United
India in Chennai; Bombay Life, New India and Jupiter in Mumbai
and Lakshmi Insurance in New Delhi.
Nationalisation of Life Insurance in India
In 1956, life insurance business was nationalized and LIC of India came
into being on 1.9.1956. The government took over the business of 245
companies (including 75 provident fund societies) who were
transacting life insurance business at that time. Thereafter, LIC got the
exclusive privilege to transact life insurance business in India
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Purpose and Need for Insurance
Assets are likely to be destroyed or made non-functional due to
accidental occurrences called perils. Assets can, therefore, beinsured. A few examples of perils are: fire, floods, breakdowns,
lightning, earthquake etc. Perils are the events. Risks are the
consequential losses or damages.
Possibility of damage to asset caused by any peril is the risk that
asset is exposed to.
Risk means uncertainty or unpredictability about future loss or
damage, which may or may not happen. This refers to the losses,which may happen suddenly and unexpectedly.
We can say that a human life is also an income-generating asset.
Human life may be lost due to unexpected early death or
become non-functional following sickness or disabilities cause by
accidents.
If this happens by the time one is on the verge of retirement
when his income is about to cease, he might have madealternative arrangements to meet his needs.
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Types of Insurance
1. Non-Life Insurance 2. Life Insurance
Basically Non-Life Insurance Includes:-
Marine Insurance
Fire Insurance
Miscellaneous Insurance
Vehicles
Furniture
Building
Aircrafts
General
Life Insurance Includes:-
Only Human Life Insurance
Human beings sickness, illness
Long term concept
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COMPANY PROFILE
The HDFC Group
HDFC was incorporated in 1977 with two primary objectives - to
enhance housing stock in the country through housing finance
systematically and professionally and promote home ownership. Today
they are the largest residential mortgage finance institution in India,
with a net worth of Rs. 2,703 crores as of March 31, 2002 and an asset
base of over Rs. 22,000 crores. HDFC also aim to increase the flow of
resources to the housing sector by integrating the housing finance
sector with the overall domestic financial markets.
HDFC has demonstrated the viability of market oriented housing
finance in a developing country. The World Bank considers us a model
private sector housing finance company in developing countries and a
provider of technical assistance for new and existing institutions, in
India and abroad.
HDFC is also the largest mobilize of retail deposits in the private sector
outside the banking circle. Their deposits have been awarded the
highest safety credit rating 'FAAA' & MAAA by CRISIL and ICRA
respectively for eight consecutive years.
While being a household name in India and the undisputed market
leader in the fields of housing finance, their social responsibilities have
remained in focus.
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GROUP COMPANIES OF HDFC
HDFC Bank Limited
HDFC Securities Limited
HDFC Asset Management Company Limited
HDFC Realty Ltd.
HDFC Deposits
HDFC Standard Life Insurance
HDFC Chubb
Intelenet
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HDFC Bank Ltd.
The Housing Development Finance Corporation Limited (HDFC) was
amongst the first to receive approval from the Reserve Bank of India
(RBI) to set up a bank in the private sector. The bank was incorporated
in August 1994 in the name of HDFC Bank Limited, with its registered
office in Mumbai. HDFC Bank commenced operations as a Scheduled
Commercial Bank in January 1995.
Awards
Best Listed Bank of India by Business world.
Best Domestic Bank by The Asset Magazines Triple A Country
Award.
Best Local Cash Management Bank2006 in Large and Medium
segmentsAsia money Awards
Best Bank in India in 2006Euro money Awards
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HDFC Asset Management Company Ltd.
HDFC Asset Management Company Ltd. (AMC) was incorporated under
the Companies Act, 1956; on December 10, 1999 and was approved to
act as an Asset Management Company for the HDFC Mutual Fund by
SEBI vide its letter dated June 30, 2000.HDFC Asset Management
Company Ltd. (AMC) is one of the most growing Mutual Fund Company
of India.
Awards
HDFC mutual fund was recently awarded the CNBC Moddys
investor service award for the best performing fund house for the
one year category.
Zurich also received the best performing fund house award for
the three year category.
HDFC Chubb
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Its partnership that leverages the strengths of two financial
powerhousescombining the trust and local experience of HDFC,
Indias premier financial services company, with the 120 years proven
expertise of CHUBB, a global leader in non-life insurance backed by a
network of 134 offices in 31 countries.
Chubb today provides property and casualty insurance through more
than 10,000 employees in 32 countries of North America, South
America and Asia.
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Intelenet
Intelenet is a leading BPO service provider with the focus on providing
solutions to global Organizations seeking to reduce the cost while
consistently maintaining superior level of standards two leading global
investorsHDFC and Barclays--provide the financial banking Intelenet
needs to lead in a global marketplace. Barclays is a venerable financial
services group headquartered in the United Kingdom, ranking amongst
the services group headquartered in the United Kingdom, ranking
among the Top 10 banks in the world based on market capitalization.
Intelenet impacts your business by seeking to reduce costs while
consistently maintaining superior levels of service. Our solutionsextend across all strata of BPO, technology and consulting.
Awards
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Deloitte Technology Fast 50 India 2005 Program
Intelenet Global Services has been ranked first among BPOs
while standing third overall in the Technology, Media and
Telecommunications (TMT) sectors across India.
Deloitte Technology Fast 50 India 2006 Program
Intelenet Global Services has continued its ranking, second time
in a row, as amongst the top 50 fast growing technology companies in
India.
Maharashtra Information Technology Awards
2005
Intelenet Global Services came in a close second in the IT
Enabled Services category at the Maharashtra Information Technology
Awards2005.
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HDFC Deposits
D E P O S I T S
HDFC has instituted well-defined service standards for both depositors
and deposit agents. HDFC has been able to mobilize deposits from over
10 lac depositors. Outstanding deposits grew from Rs. 1,458 crores in
March 1994 to Rs. 8,741 crores in March 2006. Much of this success
can be attributed to its strong brand image, superior services, security
and above all, the significant contribution made by HDFCs deposit
agents. HDFC has over 50,000 deposit agents and distributes all its
retail savings (deposit) products primarily through this channel.
Awards
HDFC has been awarded AAA rating and MAAA rating for its
deposits from both CRISIL and ICRA for the twelfth consecutive
year, representing highest safety as regards timely payment of
principal and interest.
HDFC Realty Ltd.
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Realty Limited
HDFC Realty Ltd. Is a new, organized electronic marketplace for
properties, to provide the entire gamut of real estate services, bringing
together the click world and the bricks world in a revolutionary and
user-friendly way. Making available the best guidance and the most
professional, transparent, efficient service to the real estate customer.
HDFC Securities Ltd.
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S E C U R I T I E S
HDFC Securities Ltd was promoted by the HDFC Bank & HDFC with the
objective of providing the diverse customer base of the HDFC Group
and other investors, a capability to transact in the Stock Exchanges &
other financial market transactions.
HDFC Standard Life Insurance Company Ltd.
HDFC Standard Life Insurance Company Ltd. is one of India's leading
private insurance companies, which offers a range of individual and
group insurance solutions. It is a joint venture between Housing
Development Finance Corporation Limited (HDFC Ltd.), India's leading
housing finance institution and a Group Company of the Standard Life,
UK, and leading providers of financial services in the United Kingdom.
HDFC as on March 31, 2007 holds 81.9 per cent of equity and Standard
Life was holding 18.1 in the joint venture.
Highlights
First life insurance Company in the private sector to get license
from the regulator IRDA.
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First life insurance Company to come out with Term Assurance
Plan.
First private life insurance Company to declare bonuses
consecutively for 6 years from inception.
First life insurance Company to introduce open option to the
pension plan policyholders.
First life insurance Company to introduce Automatic Allocation
Option to all the policyholders under Unit Linked Plans.
Only life insurance Company to give 24 free switching option to
Unit Linked Policyholders.
HDFC is one of the fastest growing Private Life Insurers andtoday have more than 8 lakh policyholders.
HDFC have one of the widest networks with more than 160
branches and servicing over 440 towns.
HDFC Standard Life Insurance Company has one of the highest
brand recalls of around 86%. (Source: AC Neilson ORG MARG,
September 2005). A high brand recall translates to higher
chances of customers buying insurance from them.
Awards
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Over a decade of its operations, HDFC Standard Life
Insurance Company Ltd. has been recognized, rated and
awarded by a number of organizations, which include:
Winner of the Out Look Money Award for two
consecutive years.
Voted as the Most Respected Life Insurance Company
by Business World in 2004.
HDFCs KEY STRENGTHS
Financial Expertise
As a joint venture of leading financial services groups, HDFC Standard
Life has the financial expertise required to manage your long-term
investments safely and efficiently.
Range of Solutions
We have a range of individual and group solutions, which can be easily
customized to specific needs. Our group solutions have been designed
to offer you complete flexibility combined with a low charging
structure.
Track Record so far
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Our cumulative premium income, including the first year premiums
and renewal premiums is Rs. 1532.21 Crores Apr-Mar 2005 - 06.
We have covered over 1.6 million individuals out of which over
5,00,000 lives have been covered through our group business tie-ups.
VISION & VALUES
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Our Vision
The most successful and admired LifeInsurance Company, which means that weare most trusted company, the easiest todeal with, offers the best value for money,and set the standards in the industry. Inshort, The most obvious choice for all.
Values
IntegrityInnovation
Customer Centric
People CareTeam Work
Joy & Simplicity
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BRANCH PROFILE OF HDFCSLIC, TONK ROAD
HDFC Standard Life Insurance Companys branch at Tonk Road, Jaipur
was started in October 2006. It was started with the aim to provide
best of Insurance services with the core values of Integrity and
Customer Centric Behavior.
HDFCSLIC Ltd. Tonk Road, Jaipur has excelled in all its services. It
offers almost all products of the Company. Some of them are saving
plans, pension plans, various investment plans etc.
It has a well-planned organization structure. This branch is integrated
by 4 branches, Jaipur-III, Jaipur-IV, Jaipur-V and Jaipur-IX. All the
branches headed by Territory Manager Mr. Sumeet Chugh and
Branch Managers Mr. Siddarth Singh (Jaipur-III), Mr. Rajesh Gupta
(Jaipur-IV), Mr.Utkarsh Upadyaya (Jaipur-V), Mr. Chardra Shekhar
Paliwal (Jaipur-IX), and other staff members working in various
departments and dealing in each of the products.
Under each Branch Manager there are around 8-12 Sales Development
Managers (SDM), who takes the responsibility of promoting and selling
of HDFCSLICs products.
Classification of life insurance plans
Lifeinsurance plans can be classified into the following four categories
according to the
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Features:
Protection Plans
Investment Plans
Pension Plans
Savings Plans
Protection Plans
As the name suggests this category of plans are designed to protect
the income earning capacity of the life assured. The present income of
the life assured therefore forms the basis of the life insurance. A
person with no income therefore cannot be given this plan. The plan is
therefore not offered to students, housewives and minors.
The plans are in the nature of assurances rather than pure insurance.
Under the plan the insurance company assures the policyholder that a
lump sum of money would be paid on the happening of the insured
event. Thus even if the life assured does not earn the same level ofincome at the time of the happening of the insured event, as at the
time when he took the insurance, the lump sum is still payable.
The premium collected under this category of plans is generally
sufficient to cover the risk insured. There is no return of premium on
the expiry of the cover; however a saving element can be built under
the plans toreturn the savings amount at maturity. The plans do not
share in the profits of the company and have no bonuses.
The risk is common to the poll of policyholders who by purchasing the
plan choose to share the risk with group. The claims are paid from the
contributions made by the policyholders. The premium paid by the
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policyholder is sufficient to cover the risk and expenses, hence
generally on the expiry of the cover nothing is payable.
Under the protection plans the risk is covered for a premium, which issufficient to pay the claims and the expenses. It is therefore necessary
for the insurance company to ensure that the claims do not exceed the
assumed mortality. To ensure this, the insurance company would
strictly underwrite the protection plans. There is also a stiff competition
under the protection plans as the plans of two companies can be
compared on the basis of the premium charged. Every company tries
to get the share of the market by keeping the premium under this
category lower. The only way for a company to keep the premium low
over a long period is to control the expenses and claims. The service
factor is also important while selling a protection plan. How quickly the
claim would be settled matters. In case a company is charging some
few rupees more but is known for quick settlement of the claim the
client would not mind going with such company. Hence the premium
rate as well as the service should be explained to the client while
selling the protection plans.
The plan should be sold on the basis of the Human Life Value (HLV)
concept. As per the HLV concept every individual has an economic
value, which is equal to the present value of all future earnings of that
individual. Company should sell this plan to clients who have an
income and a financial responsibility. This form of insurance is also
called a young persons privilege as it is easy to get this insurancewhen you are young and since savings are low when a person is
young he should possess this cover in case of an unforeseen event.
Rider Benefits also fall in this category of plans. Under the rider the
insured event is defined and claims are payable only if the insured
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event as defined occurs. Rider benefits usually come with a number of
exclusions. One should understand the exclusions and the definitions
of the rider benefit before choosing a rider.
HDFC Standard Life Company has two products in this
category and they are:
1. Term Assurance Plan
2. Loan Cover Term Assurance Plan
Investment Plan
As the name suggests this category of plans are designed to help the
person reduce some of the risk of investments. All the investment risks
cannot be reduced. What the investment plans try to do is to create a
pool of investors so that they can get the advantage of large funds,
diversified investments, professional management and better returns.
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Investment plans can be designed to protect the policyholder against
the market fluctuations. However all policyholders cannot be protected
at the same time against market fluctuations. It is common to allow
the protection to a small group of policyholders at any given point oftime. One of the objectives of the investment type of plans is to give a
good return to the policyholder.
When risk covers are integrated with the investment plans the cost of
the risk covers reduce the returns to the policyholders. To avoid the
risk cover costs the plans do not offer huge risk covers. Hence in these
type of plans, premium paid by policyholder is almost equal to the sum
assured.
The premium under the plans mainly consists of investment. It would
not be correct to compare this category of plans on the basis of the
sum assured and the premium paid. In case a higher premium is
collected under the plan, the company would be in a better position to
pay a bigger amount on maturity/death. A better way of comparison
would be to compare what the client pays and what he would get
under the plans. At the time of selling unfortunately you would not be
able to show to the client as to what he would get under his plan.
Illustrations and past bonuses are something you can use to convince
the client. The company background and the philosophy of the
company can also be used to convince the client.
Life insurance investment plans are designed for long-term
investments. It is not cost effective for a life insurance company to
design a short-term investment plan. It is therefore usual for these
types of plans to have a term of 10 years and above. It is important to
make the client understand that he is entering into a long-term
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investment when he purchases and investment plan form a life
insurance company.
This plan is useful when the client is looking for investment for a long
term financial needs which requires investment of money for a longterm.
The investment plan can be designed as a with-profits contract or a
unit linked contract. In a with profits contract the returns are
smoothened while under the unit linked contract the returns to the
client depend on the movement of the Net Asset Values (NAVs) of the
units purchased.
Pension PlansPension Plans are designed to provide pension. With the interest rates
fluctuating and the increase in longevity the interest in the pension
products has been growing in the recent past. Life pensions provide an
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income till death and this is attractive in the above mentioned
scenario.
The Indian society has been moving from the joint family system to the
nuclear family system. There is also no form of social security
schemes, which provide an income in the old age. It is therefore
important that all individuals think about their retirement and save for
an income in the old age. Pension Plans help the client to build the
pension fund, which is earmarked, to provide for the pensions and pay
the pensions on the chosen retirement date.
Pension Plans can be further classified into the following twocategories:
1. Deferred Pension Plans These plans help the client build the
pension fund during his earning years and convert the fund into
pensions on the chosen retirement date.
2. Immediate Pension Plans These plans pay a pension
immediately after the lump sum purchase price is paid to the
insurance company.
The deferred pension plan has two parts. In the first part the savings of
the policyholder is accumulated to create a fund for the purchase of a
pension on the chosen date. This accumulation can be offered through
a with-profits fund or through the unit linked mechanism.
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In the second part the fund is used to purchase an annuity chosen by
the policyholder. There are various immediate annuities, which are
available and the client should choose one, which suits him the best.
The choice of the annuities is therefore given to the client just before
the annuity starts.
The aim of a deferred pension plan is to provide a good annuity to the
client. Risk covers are therefore not built in the plan. This is to ensure
that the cost of the risk cover does not reduce the amount available for
pension.
The deferred pension plan works like a savings plans with the
difference that the amount at the end of the contract is paid in the
form of pension. In the event of death before the pension starts the
premium is returned with interest.
HDFC Standard Life launched the following plans in this
category:
1. Personal Pension Plan (with profits)
2. Unit Linked Pension Plan
Savings Plans
The savings plans are designed to help a person save for a long-term
event. Long-term savings have inherent un-certainties. Besides long
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term savings instrument are not available in the market. The savings
plans aims to provide a solution to the client in this area with the
benefit of life insurance.
It is important to note that the insurance cover offered is on the
savings. While purchasing the plan that the policyholder has a savings
target in mind. The plan aims to protect this target in the event of the
death of the life assured. In the event of the death of the life assured
during the term, in addition to the amount saved the amount, which
could not be saved is also paid to the beneficiary.
The premium paid by the policyholder consists of the savings. The riskcover cost on the savings forms a very small portion of the premium.
The effectively means that the premium paid by the policyholder would
determine the maturity amount that the policyholder would ultimately
get. Thus comparison on the savings products of two companies, on
the premium and the sum assured is a wrong method of comparison.
Savings plans offer the clients a good vehicle to build savings for a
long-term financial need. The earlier the client starts a savings plan the
lesser he would have to contribute as his savings would grow bigger
due to the effect of compound interest. To sell a savings
plans you need to identify the long term savings needs of
the client and explain to him the benefits of savings through
life insurance.
Savings plans have a risk element, which needs to be
underwritten to ensure that the death claims are controlled.
In case a company is very liberal in granting the covers the
chances are that the policyholders who survive would get a lower
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maturity benefits. Maturity benefits can be enhanced by a strict control
on the claims and the expenses.
Savings Plans can be offered as a with-profits plan or a unit linked plan.
A with profits fund aims to smoothen the returns to the policyholder
using the bonus mechanism while the returns to the policyholder under
a unit linked plan depends on the movement of the unit prices.
HDFC Standard Life offers the following savings plans:
1. Endowment Assurance Plan (with
profits)
2. Money Back Plans (with profits)
3. Childrens Plan (with profits)
4. Unit Linked Endowment Plan
PRODUCTS: AT A GLANCE
1. Endowment Assurance Plan
Savings for a better tomorrow
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Introduction
The Endowment Assurance Plan is a with profits savings contract whichaims to give good maturity values to the client by investing the funds
as per the IRDA guidelines and reducing claims and costs. The aim of
the plan is to pay good maturity values so that the savings objectives
of the policyholders are met.
Need for the Plan
The Endowment Assurance Plan is designed to provide a solution to thelong term financial needs. It is often felt that people save only when
their income is more than their expenses. To put it bluntly if a person
can earn more than what he can spend he can save. In reality this is
not the situation as one finds that it is impossible to save with the
current level of expenses. Why does this happen?
Expenses are a function of our needs, which arise due to our wants. We
all know that the wants of a human being are unlimited. Consequently
the needs keep on increasing and often increase at a rate higher than
the rate of growth of income. Income on the other hand is limited and
often grows at a much lower rate than the needs. Consequently it is
difficult to save.
There are various savings options available in the market; however
most of the options are short-term or medium term. Life Insurance
savings plans are a better choice as in addition to providing the vehicle
to save for long term the plans also offer insurance on the savings.
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Income does not increase with every requirement for finance.
Childrens education, marriage, housing etc. require lump sum
amounts. In case any person has a responsibility to spend on these
kinds of long-term events, he would have a need for the product.
Features of the Endowment Assurance Plan
The following are the features of the plan:
1. Benefits:
a) Death Benefits: In the event of death of the life assured
during the term of the contract, and provided all the
premiums are paid till the time of the death of the life
assured, the sum assured, together with reversionary
bonus and the terminal bonuses (if any) would be paid to
the beneficiary. The policy would terminate on payment of
the death benefit.
b) Maturity Benefits: On survival of the life assured till the
date of maturity, and subject payment of all premiums, the
policyholder would be paid the sum assured, together with
the reversionary bonuses and terminal bonus (if any). The
policy would terminate on payment of the maturity benefit.
c) Paid-up Benefits: In case the policyholder discontinuespayment of premium after the premiums are paid for at
least three years, the policy would be reduced to a paid-up
policy. The reduced paid-up benefits are payable on death
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of the life assured during the term, or survival of he life
assured till the date of maturity, whichever is earlier.
d) Surrender Benefits: The policyholder can surrender thepolicy at any time. In case the policyholder chooses to
surrender the policy before the payment of three years
premium the surrender value would be equal to zero and
nothing would be payable. In case the policyholder chooses
to surrender after three years, he would be entitled for a
surrender value.
2. Frequency of premium payment:
The policyholder can choose yearly, half-yearly or quarterly
mode of payment, as he desire. The frequency of premium
payment can be altered during the term of the contract.
3. Days of grace:
The premium is payable in advance and should be paid withinthe days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
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three years. In case premiums are not paid for three years the
policy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
5. Minimum premium:
The following are the minimum premium conditions under the
Endowment Assurance Plan.
Annual mode Rs. 1800
Half yearly mode Rs. 1000
Quarterly mode Rs. 550There is no condition of maximum premium.
6. Other conditions:
Minimum Term 10 years
Maximum Term 30 years
Minimum Age at Entry 12 years
Maximum Age at Entry 60 years
Maximum Maturity Age 75 years
The policyholder has the choice to choose any term between 10
to 30 years, subject to the maximum maturity age. In case the
policy is taken on the life of a minor then the legal guardian of
the minor would have to propose the insurance on behalf of the
minor. The policy would automatically vest in the life assured
when he attains the age of majority.
7. Policy loans:
Policy loans would be available under the plan once the policy
acquires a surrender value. The policy loans would be to the
extent of 90% of the surrender value. The company would quote
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the terms and conditions of the policy loans at the time of
granting the loans and the same would vary from time to time.
8. Life cover basis:
The endowment assurance plan can be offered on a single life
basis or as joint life first claim basis. When the policy is offered
on a joint life basis the death claim would be paid on the death of
any one of the lives assured and the policy would terminate.
9.Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
Positioning of the Endowment Assurance Plan
The Endowment Assurance Plan can be positioned as along term
savings vehicle with a cover on the savings. The plan is suited to help
in building a fund for long term financial needs. The guarantees in the
nature of sum assured and the bonuses assure the client of a
smoothened long-term return. The philosophy and practices of the
company can help in building the maturity values for the client and
hence positioning the company is also important in the sale of the
Endowment Assurance Plan.
2. Money Back Plan
Plan with periodic survivalbenefits
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Introduction
The Money Back Plan is a with profits savings contract which in
addition to the payment of periodic survival benefits aims to give good
maturity values to the client by investing of funds as per the IRDA
guidelines and reducing claims and costs. The aim of the plan is to pay
periodic survival benefits and build good maturity values so that the
short term, medium term and long-term savings objectives of the
policyholders are met.
The net returns to the policyholders at the time of maturity woulddepend on the investment and cost experience during the term of the
contract.
Need for the Plan
The Money Back Plan is designed to provide a solution for the short-
term, medium term and long term financial needs. It is therefore
important to understand the financial needs before suggesting the planas a solution.
Since people have some short term and medium term and medium
term financial goals like providing for a vacation, purchasing of a
luxury item or house renovations etc, they require money periodically
in short intervals to meet these goals.
The Money Back Plan is designed to provide money periodically so that
the same can be used for such requirements. The added advantage of
the Money Back Plan is that the risk cover keeps on adjusting during
the term of the contract and the policyholder is assured payment of
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the full sum assured together with the bonuses irrespective of the
survival benefits paid on death of the life assured during the term.
Features of the Money Back Plan
The following are the features of the plan:
1. Benefits:
a. Death Benefits: In the event of death of the life assured
during the term of the contract, and provided all the
premiums are paid till the time of the death of the lifeassured, the sum assured, together with reversionary
bonus and the terminal bonuses (if any) would be paid to
the beneficiary.
b. Survival Benefits: Survival benefits are paid at the end
of every fifth year on survival of the life assured. The rates
of survival benefits are given below. The policy wouldcontinue after payment of the survival benefit.
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c. Surv
c. Maturity Benefits: On survival of the life assured till the
date of maturity, and subject payment of all premiums, the
policyholder would be paid the sum assured, together withthe reversionary bonuses and terminal bonus (if any) less
all survival benefits paid during the term of the
contract. The policy would terminate on payment of the
maturity benefit.
d. Paid-up Benefits: In case the policyholder discontinues
payment of premium after the premiums are paid for at
least three years, the policy would be reduced to a paid-up
policy. The reduced paid-up benefits are payable on death
of the life assured during the term.
Number of years from the policy
commencement date
PolicyTerm 5 10 15 20 25
10 40%
15 30% 30%
20 25% 25% 25%
25 20% 20% 20% 20%
30 15% 15% 15% 15% 15%
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e. Surrender Benefits: The policyholder can surrender the
policy at any time. In case the policyholder chooses to
surrender the policy before the payment of three years
premium the surrender value would be equal to zero and
nothing would be payable.
2. Frequency of premium payment:
The policyholder can choose yearly, half-yearly or quarterly
mode of payment, as he desire. The frequency of premium
payment can be altered during the term of the contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
three years. In case premiums are not paid for three years the
policy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
5. Minimum premium:
The following are the minimum premium conditions under the
Money Back Plan.
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Annual mode Rs. 1800
Half yearly mode Rs. 1000
Quarterly mode Rs. 550
There is no condition of maximum premium.
6. Other conditions:
Minimum Term 10 years
Maximum Term 30 years
Minimum Age at Entry 12 years
Maximum Age at Entry 60 yearsMaximum Maturity Age 75 years
The policyholder has the choice to choose any term between 10
to 30 years, subject to the maximum maturity age. In case the
policy is taken on the life of a minor then the legal guardian of
the minor would have to propose the insurance on behalf of the
minor. The policy would automatically vest in the life assured
when he attains the age of majority.
7. Policy loans:
Policy loans would be available under the plan once the policy
acquires a surrender value. The policy loans would be to the
extent of 90% of the surrender value. The company would quote
the terms and conditions of the policy loans at the time of
granting the loans and the same would vary from time to time.
8. Life cover basis:
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The Money Back Plan can be offered on a single life basis or as
joint life first claim basis. When the policy is offered on a joint life
basis the death claim would be paid on the death of any one of
the lives assured and the policy would terminate.
9. Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
3. Childrens Plan
Plan designed for the benefit of children
Introduction
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The Childrens Plan is a with-profits savings contract designed for the
benefit of the child. The plan therefore has a provision for a
beneficiary, which can be the child, and all benefits under the plan
would be paid to the child. The funds generated under the plan areinvested as per the IRDA guidelines.
The net returns would depend on our investment and cost experience
during the term of the contract
Need for the Plan
Most parents feel that it is their responsibility to provide the best for
their children. In addition to the physical and emotional wants children
also need to be provided for financially. There are two types of
financial needs of the child:
I. Short term financial needs for food, clothing shelter and
education. This need is mostly met from the income of the
parent
II. Long term financial need for higher education, marriage
and start in life. The alternatives for this are either to save
or raise loans.
In the event of an early death of the parent the child become
dependent of one of the close relative. To ensure that the child would
be taken care even after such an eventuality the parent can look at
providing an income as well as lump sum amounts for the benefit of
the child. The Childrens Plan is designed to help the parent in planning
for the above financial needs of the child.
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All the arguments on the need to save and savings being a better
option than raising a loan are applicable while selling the Childrens
Plan.
Features of the Childrens Plan
The following are the features of the plan:
1. Benefits:
a) Death Benefit: Under this option on death of the life
assured during the term of the policy, provided the
premium is paid till the date of death; no amount would be
immediately payable. The future premiums would be
waived and at maturity date of the policy the full sum
assured with the reversionary bonuses and terminal bonus
(if any) would be payable to the beneficiary. The policy
would participate in the bonuses till the date of maturity.
The policy would terminate on the payment to beneficiary.
b) Accelerated Benefit: Under this option on death of the
life assured during the tem of the policy, provided the
premium is paid till the date of death, the sum assured
with the reversionary bonus and terminal bonus (if any)
would be payable immediately to the beneficiary and the
policy would terminate.
c) Double Benefits: Under this option on death of the life
assured during the term of the policy, provided the
premium is paid till the date of death; one sum assured
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would be paid to the beneficiary immediately. The future
premiums would be waived and at maturity date of the
policy the full sum assured with the reversionary bonus
and terminal bonus (if any) would be payable to thebeneficiary. The policy would terminate on payment of the
benefit on the date of maturity
d) Maturity Benefits: In the event of survival of the life
assured during the term of the contract, and provided all
the premiums are paid, the sum assured, together with the
reversionary bonuses and the terminal bonuses (if any)
would be paid to the beneficiary. The policy would
terminate on payment of the maturity benefit.
e) Paid-up Benefits: In case the policyholder discontinues
payment of premium after the premiums are paid for at
least three years, the policy would be reduced to a paid-up
policy. If the Childrens Plan is made paid up, a table of
adjustment factors will be used to adjust the policys basicsum assured to a paid up value. The adjustment factors
will vary by the policyholders age, the policys original
term, policy duration, and frequency.
f) Surrender Benefits: The policyholder can surrender the
policy at any time. In case the policyholder chooses to
surrender the policy before the payment of three yearspremium the surrender value would be equal to zero and
nothing would be payable. In case the entitled for a
surrender value.
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2. Frequency of premium payment:
The policyholder can choose yearly, half-yearly or quarterlymode of payment, as he desire. The frequency of premium
payment can be altered during the term of the contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
three years. In case premiums are not paid for three years thepolicy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
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5. Minimum premium:
The following are the minimum premium conditions
under the Childrens Plan.Annual mode Rs. 1800
Half yearly mode Rs. 1000
Quarterly mode Rs. 550
There is no condition of maximum premium.
6. Other conditions:
Minimum Term 10 yearsMaximum Term 25 years
Minimum Age at Entry 18 years
Maximum Age at Entry 60 years
Maximum Maturity Age 75 years
The policyholder has the choice to choose any term between 10
to 25 years, subject to the maximum maturity age. In case the
policy is taken on the life of a minor then the legal guardian of
the minor would have to propose the insurance on behalf of the
minor.
7. Policy loans:
Policy loans would not be available under the plan.
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8. Life cover basis:
The Childrens Plan is to be sold on the life of the parent with the
child as the beneficiary. The plan is not offered on a joint lifebasis.
9. Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
Positioning of the Childrens Plan
The Childrens Plan can be positioned as a long term savings vehicle
specially designed to meet the financial requirements of the child. The
plan provides for both the immediate financial needs and the long term
financial needs. In case the client is not worried about the immediate
financial needs of the child on his death then the maturity benefit
option would be suitable to him. The sum assured payable on the
death in a double benefit option would help in providing for the
immediate financial needs of the child. The Accelerated benefit works
exactly like and endowment assurance plan. The guardian of the child
would have an option of either to spend the money for the immediate
benefit of the child or to save the claim amount for a future benefit.
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4. Term Assurance Plan
Protection of Income
Introduction
The Term Assurance Plan is a without profits protection contract
designed to protect the income earning capacity of the life assured.
The present earning capacity of the client therefore forms the basis of
the insurance.
Need for the Plan
Uncertainty is a part of life. In the event of death of the breadwinner
the dependents are put to a lot of financial difficulty as they lose the
source of income. The problem is compounded in case the family does
not have savings to rely on. In case a person has dependents and also
does not have savings on which the family can rely on in the event of
his death, he needs to protect his income for the benefit of the family.Term Assurance Plan is designed to offer the protection of the income
at the least possible cost.
Term Assurance Plan can also be used to cover liabilities so that in the
event of death the family receives a lump sum amount so that
liabilities are paid off. Term Assurance is an insurance of income and
hence the existence of liabilities is not the basis of granting the
insurance.
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Features of the Term Assurance Plan
The following are the features of the plan:
1.Benefits:
a) Death Benefits: Provided the policy is in force in the
event of death of the life assured during the term of the
contract the sum assured is paid.
b) Benefits on expiry of the cover: On expiry of the cover
nothing is payable as Term Assurance is designed for
protection only.
c) Paid up Benefits: There are no paid up benefits under
this plan.
d) Surrender Benefits: There are no surrender benefits
under this plan.
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2. Frequency of premium payment:The policyholder can choose to pay by a single premium or
yearly, half-yearly or quarterly mode of payment. The frequency
of premium payment can be altered during the term of thecontract. Please note that a regular premium policy cannot be
changed to a single premium mode during the term of the
contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are15 days from the due date of premium.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. A lapsed policy can be reinstated within one year
from the date of lapse only.
5.Minimum premium:
The following are the minimum premium conditions
under theTerm Assurance Plan.
Single Premium Rs. 2000
Annual mode Rs. 1500
Half yearly mode Rs. 800
Quarterly mode Rs. 450There is no condition of maximum premium.
6.Other conditions:
Regular Premium Single Premium
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Minimum Term 5 years 2 years
Maximum Term 30 years 15 years
Minimum Age at Entry 18 years 18 years
Maximum Age at Entry 60 years 60 yearsMaximum Maturity Age 65 years 65 years
7.Policy loans:
Policy loans would not be available under the plan.
8.Life cover basis:
TheTerm Assurance Plan can be sold on a single life or joint life
first death basis.
9.Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
10. Special Rates for Women:
Since women have a lesser mortality rate than men for the same
age, the premium rate charged fro women would be the rate
applicable to men three years younger.
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5. Loan Cover Term Assurance Plan
Protection of Loans
Introduction
The Loan Cover Term Assurance Plan is a without profits decreasing
cover protection contract designed to protect the outstanding loans of
the life assured. The plan is designed to cover loans however the plan
will be granted only in case the client has sufficient income toback the
insurance.
Need for the Plan
Uncertainty is a part of life. In the event of death of the breadwinner
the dependents are put to a lot of financial difficulty as they lose the
source of income. The problem is compounded in case there are
outstanding loans. The Loan Cover Term Assurance Plan is designed to
cover outstanding loans at the least possible cost.
Features of the Loan Cover Term Assurance
Plan
The following are the features of the plan:
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1.Benefits:
a) Death Benefits: Provided the policy is in force in the
event of death of the life assured during the term of the
contract the sum assured is paid.
b) Benefits on expiry of the cover: On expiry of the cover
nothing is payable as the Loan Cover Term Assurance is
designed for protection only.
c) Paid up Benefits: There are no paid up benefits under
this plan.
d) Surrender Benefits: There are no surrender benefits
under this plan.
2. Frequency of premium payment:
The policyholder can choose to pay by a single premium or
yearly, half-yearly or quarterly mode of payment. The frequency
of premium payment can be altered during the term of the
contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
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In the event the premium is not paid within the days of grace the
policy lapses. A lapsed policy can be reinstated within one year
from the date of lapse only.
5.Minimum premium:
The following are the minimum premium conditions
under the Loan CoverTerm Assurance Plan.
Single Premium Rs. 2000
Annual mode Rs. 1500
Half yearly mode Rs. 800
Quarterly mode Rs. 450
There is no condition of maximum premium.
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6.Other conditions:
Regular Premium Single
Premium
Minimum Term 5 years 2 years
Maximum Term 30 years 15 years
Minimum Age at Entry 18 years 18 years
Maximum Age at Entry 60 years 60 years
Maximum Maturity Age 65 years 65 years
7.Policy loans:Policy loans would not be available under the plan.
8.Life cover basis:
The Term Assurance Plan can be sold on a single life or joint life
first death basis.
9.Tax benefits:The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
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10. Special Rates for Women:
Since women have a lesser mortality rate than men for the same
age, the premium rate charged fro women would be the rate
applicable to men three years younger.
Important
Although the plan is named as Loan Cover Term Assurance Plan the
plan is basically a decreasing cover term assurance. The plan is not
linked to a loan and the client can choose to purchase this plan even in
case he does not have a loan. The sum assured would decrease at a
predetermined rate and is not linked to the decrease in the loan
amount. Care has been taken to ensure that the sum assured would be
sufficient to pay most of the loans. The plan does not guarantee
payment of the outstanding loan.
6. Single Premium Whole of Life Insurance
Plan
Plan designed to give long-term real growth
Introduction
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The Single Premium Whole of Life Insurance Plan is a with profits
investment contract which aims to give long tem real growth to the
client by investing the funds as per the IRDA guidelines and reducing
claims and costs. The aim of the plan is to generate long term realgrowth, providing guarantees at specific times during the term of the
contract.
Need for the Plan
The Single Premium Whole of Life Insurance Plan is designed to help
the client in long-term investment. It is therefore important to
understand the problems associated with investments to sell the plan
better.
However all investment is associated with risk. The higher the risk one
takes, the better the chances of getting a better return. Investment is
all about taking risks.
Various investment instruments are available in the market and the
client has to choose from the investment option available. This
investment instruments are designed to meet short-term, medium-
term and long-term objectives. If an instrument is designed for a short
term the same is not suitable for achieving a long term
objectives. This is because the instrument would terminate in the short
term and the client would be exposed to reinvestment risks. Long-term
investments designed to provide real growth is a solution to the long-
term needs.
The client can choose to invest directly where the risks are high and
the potential of a higher return also exists. However he would have the
disadvantage of being a small investor, who does not have the
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expertise in the market, does not have large funds and is not able to
diversify. The mutual funds help the client in this area and pool the
investment of a group of small investors providing them with expertise
in investment, diversification and better returns.
However investment in mutual fund requires a strategy and the returns
depend on the time of entry and exit from the fund. Two investors may
make different kinds of return due to the different strategies they
follow. The Single Premium Whole of Life Insurance Plan is designed to
remove this problem of the investors by giving insurance in the form of
guarantees on death and at specific time intervals so that the returns
at these guaranteed periods do not depend on the market conditions.
These guarantees in long-term investment are very valuable and since
the product is a whole of life one, the client can continue with the
investment till death.
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Features of the Single Premium Whole of Life
Insurance Plan
The following are the features of the plan:
1. Benefits:
a) Death Benefits: In the event of death of the life assured
during the term of the contract, and provided all the
premiums are paid till the time of the death of the life
assured, the sum assured, together with the (compound)
reversionary bonus and the terminal bonuses (if any) would
be paid to the beneficiary. The policy would terminate on
payment of the death benefit.
b) Maturity Benefits: The Single Premium Whole of Life
Insurance Plan is a whole life plan and therefore does not
have a maturity date.
c) Paid up Benefits: This is not applicable to the Single
Premium Whole of Life Insurance Plan since the plan is a
single premium plan.
d) Minimum Guaranteed Surrender Benefits: On
surrender of the policy after a period of three years from
the date of commencement, there is and guarantee that
the minimum surrender value would be equal to 50% of
the premium paid, except in the four weeks immediately
following the completion of the 10 th minimum guaranteed
surrender value would be equal to the sum assured.
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2.Frequency of premium payment:
The policyholder has to pay the premium by way of a single
premium only. The single premium payable is equal to 95% of
the sum assured chosen.
3.Premium:
The following are the premium conditions under the
Single Premium Whole of Life Insurance Plan:
Minimum Premium Rs. 23,750
Maximum Premium Rs. 47, 50,000
4.Other conditions:
Minimum Sum Assured Rs. 25,000
Maximum Sum Assured Rs. 50,00,000
Minimum Age at Entry 18 years
Maximum Age at Entry 70 years
5.Policy loans:
Policy loans would be available under the plan once the policy
acquires a surrender value. The policy loans would be to the
extent of 90% of the surrender value. The company would quote
the terms and conditions of the policy loans at the time of
granting the loans and the same would vary from time to time.
6.Life cover basis:
The Single Premium Whole of Life Insurance Plan can be offered
on a single life basis only.
7.Tax Benefits:
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The Premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961.
The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
Positioning of the Single Premium Whole ofLife Insurance Plan
The Single Premium Whole of Life Insurance Plan can be positioned as
along term investment vehicle with guarantees at specific dates. The
Plan is suited to help in providing a fund for long term financial needs.The philosophy and practices of the company can help in building the
policy values for the client and hence positioning the company is also
important in the sale of the Single Premium Whole of Life Insurance
Plan.
7. Personal Pension Plan
Savings for a better retirement
Introduction
The Personal Pension Plan is a with profits deferred pension contract
which aims to give good pension benefits to the client by helping the
client build a retirement fund. The aim of the plan is to build good fund
values so that the client can enjoy a better pension on retirement.
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Need for the Plan
Income in retirement is becoming more and more important. With the
breakup of the joint family system and the increase in longevity, it isbecoming more and more important to provide for retirement. The fall
in the interest rates and the uncertainty prevailing in the market make
pensions more attractive. Pension can provide a guaranteed income till
death and hence there is a renewed interest in pension schemes in the
recent years.
It is important that the person plans for his retirement. The planning
should start early so that the person contributes lesser amounts and
there is time for the fund to grow. For retirement there is only one
option for the person and that is to save. One cannot raise a loan for
retirement.
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There are various instruments of savings and investment,
which the client can use to provide for his retirement. Adeferred pension plan has the following advantages:
I. The deferred pension plan can be issued for long terms so that
the single instrument covers the retirement need of the client.
II. The deferred pension plan automatically vests in the life assured
on the date of vesting. This is an advantage as the likelihood that
the fund would be used for some other purposes is minimized
and fund would be used only for retirement.
III. Special tax benefits are available for investment in deferred
pension plans.
Features of the Personal Pension Plan
The following are the features of the plan:
1. Benefits:
a) Death Benefits: In the event of death of the life assured
during the term of the contract the following amount would
be payable:
i. In the event of the death of the life assured in the
first year then 90% of the premium paid would be
payable in case of single premium policies and 80%
of the premium paid would be payable in case of
regular premium policies.
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ii. In the event of the life assured after the first year
Sum assured plus reversionary bonus
attached would be payable under singlepremium policies.
Lower of the sum assured plus reversionary
bonus and return of premium paid with
interest of 8% is payable, under regular
premium policies.
b) Benefits at Vesting: On the vesting date, provided thepolicy is in full force the Notional Cash Value (NCV) would
be used to pay the following:
i. Cash lump sum to the extent permitted by the
regulations at the time of vesting. The policyholder
may choose either to take the cash lump sum or use
the full NCV to purchase an annuity.
ii. Purchase of an immediate annuity as per the choice
of the policyholder. In case the policyholder has
opted for the cash lump sum the balance NCV would
be used to purchase the annuity. In case the
policyholder has not opted for the cash lump sum
then the full NCV would be used to purchase the
annuity.
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c) Paid up Benefits: In case the policyholder discontinues
payment of premium after the premiums are paid for at
least three years, the policy would be reduced to a paid-up
policy. The reduced paid up benefits would form the
Notional Cash Value on the date of vesting of the policy.
The paid up policy will not participate in future bonuses.
d) Surrender Benefits: The policyholder can surrender the
policy at any time. In case the policyholder chooses to
surrender the policy before the payment of three years
premium the surrender value would be equal to zero and
nothing would be payable. In case the policyholder chooses
to surrender after three years, he would be entitled for a
surrender value.
2.Frequency of premium payment:
The policyholder can choose to pay single premium or regular
premium by yearly, half-yearly or quarterly mode. The frequencyof premium payment can be altered during the term of the
contract.
3.Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of graceend on a holiday then the premium has to be paid on the next
working day.
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4.Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
three years. In case premiums are not paid for three years the
policy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
5.Minimum premium:
The following are the minimum premium conditions
under the Personal Pension Plan.
Single Premium Rs. 25000
Annual mode Rs. 2400
Half yearly mode Rs. 1300
Quarterly mode Rs. 700
6.Maximum premium:
The following are the maximum premium conditions
under the Personal Pension Plan.
Single Premium Rs. 50, 00,000
Annual mode Rs. 50, 00,000
Half yearly mode Rs. 25, 00,000
Quarterly mode Rs. 12, 50,000
7. Other conditions:
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Minimum Term 10 years
Maximum Term 40 years
Minimum Age at Entry 18 years
Maximum Age at Entry 60 yearsMinimum Vesting Age 50 years
Maximum Vesting Age 70 years
The policyholder has the choice to choose any term between 10
to 40 years, subject to the minimum and maximum vesting age.
8.Policy loans:
Policy loans would not be available under the plan.
9.Life cover basis:
The Personal Pension Plan can be offered on a single life basis
only.
10.Tax benefits:
The premium paid under the plan qualifies for tax deductionsunder section 80CCC of the Income Tax Act 1961.
The cash lump sum received at the date of vesting is tax free
under section 1010a (iii) of the Income Tax Act 1961.
Surrender value during the deferment period would be taxable as
per section 80CCC of the Income Tax Act. Similarly pensions
received after vesting would be taxable in the hands of the life
assured.
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SWOT ANALYSISStrengths:
Weakness:
Frequent Job Rotation
Less number of advertisements
Hidden Charges
Opportunities:
Threats:
Country Wide Recognition Need Base Analysis Same Standard Services in all
Branches Fair Deal in all Transactions Customers Centric Approach
Infrastructure
Scope in Jaipur as it is in the developing phase
Only 25% of insurable people have anyinsurance Higher possibility of growth in Indian share
Market
LICs Brand Name People of Jaipur prefer short-term investment rather than
in insurance
Upcoming private insurance companies.
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FINDINGS & SUGESSTIONS
FINDINGS:
1. In HDFC SL I feel that Insurance sector is one of the most growing
sectors among all sectors in India.
2. I also find that HDFC Standard Lifes Traditional Plans are veryuseful for a normal person.
3. Jaipur is one of the most growing city and there is lot of scope of
insurance.
4. Most of the people are aware of traditional plans.
5. Electronic media has proved to be very beneficial for people tounderstand about the insurance.
6. There is lot of opportunities for young and energetic people in HDFCSL to build there sound career.
7. HDFC Standard Lifes traditional plans like children plan, one of themost popular products of the company.
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STRENGTH
Country Wide
Recognition
Need Base
Analysis
Same Standard
Services in allBranches
Fair Deal in allTransactions
Customers
CentricApproach
STRENGTH
Country Wide
Recognition
Need Base
Analysis
Same Standard
Services in allBranches
Fair Deal in allTransactions
Customers
CentricApproach
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SUGESSTIONS:
1) Use of creative advertisements to attract more and more target
customers and to create awareness among them.
2) HDFC SL should chalk out some programs to create general
awareness regarding its presence and various services of the
company.
3) Today is the era of competition. In order to increase the company
network (In terms of clients and business volumes) an aggressive
approach is required.
4) HDFC SL should try to make its promotional activities moreeffectively.
5) HDFC Standard Life Company should regularly conduct marketresearch and surveys for knowing customers better and for
facing threat from competitors.
QUESTIONNAIRE
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To get a better insight about the advisor'ssatisfaction level the various improvements tobe done in the HDFC Standard Life Insuranceproduct.
Name: Qualification:
Age: Profession:
Tel no:
Ql. For how long are you working with HDFC Standard LifeInsurance?
o Less than 1 yr.
o l-2yr.
o 2-3 yr.
o More than 3 yrs.
Q2. How many products have you sold as anadvisor?
o Less than 10.
o 10-20
o 20-30
o More than 30
Q3. What is the purpose of buying an insurance productby Customers?
o Tax benefit
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o Investment
o Security
o Any other
Q4. Products which are sold most?
o Unit Jink plan
o Smart kit plan
o Annuity plan
Q5. Products which are sold least?
o Term plan
o Endowments plan
o Group insurance
Q6. Rate the products of HDFC Standard Life Insurancein comparison to its
Competitors?
(Best = 4 pts Good = 3 pts Average = 2 pts Poor = 1pt)
o Best
o Good
o Average
o Poor
Q7. Which company do you think the best productsavailable?
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Q8. What motivates you to stay in this business?
o Money
o Recognition
o Motivation by the co./UM
o Any other
Q9. Are you satisfied with the commission providedby the co.?
o Yes
o No
If no, then why_______
Q10. Are you satisfied with the facilities provided bythe co. to it's a Advisors in comparison to other players?
o Yes
o No
If no, then why_^_ __
Q. l1. HDFC Standard Life Insurance how to betterother Companies?
o Commission
o Recognition
o Better Products
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CONCLUSION
HDFC is the leading insurance service providers to public
and private sector. HDFC Standard Life is the first private
insurance company which got license in 2000 from IRDA.
Life Insurance in India has a huge potential for growth.
Statistics reveal that only 25% of the insurable population
in India is insured. And those insured are in need of still
higher insurance cover. The cover 100% growth displayed
by private life insurers indicates this huge untapped
potential.
Traditional plans like children plan gives invaluable
support to your child, Term Assurance Plan gives help
secure your family financial needs, Money Back Plan gives
a wide range of terms and cash benefit schedules to
choose from, Personal Pension Plan is designed to provide
a post retirement income for life with the freedom to
choose the retirement date, Single Premium Whole of Life
Insurance Plan is a tailor-made plan well suited to meet
your long-term investment needs, Endowment Assurance
Plan is designed to provide a solution to the long term
financial needs, Loan Cover Term Assurance Plan is
designed to cover outstanding loans at the least possiblecost.
At last we can conclude that HDFC SL provides best
solutions to its customers by giving them best value of
their money.
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STRENGTH
Country Wide
Recognition
Need Base
Analysis
Same Standard
Services in allBranches
Fair Deal in allTransactions
Customers
CentricApproach
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BIBLIOGRAPHY
C. R. Kothari: Research Methodology
Philip Kotler: Marketing Management
Fact sheets of:
HDFC Standard Life Company
Websites
www.google.com (search engine)
www.yahoo.com (search engine)
www.wikipedia.com
www.hdfcinsurance.com
www.hdfc.com
Newspapers
Economics Times
Times of India
Magazines
STRENGTH
http://www.google.com/http://www.yahoo.com/http://www.hdfcinsurance.com/http://www.hdfc.com/http://www.google.com/http://www.yahoo.com/http://www.hdfcinsurance.com/http://www.hdfc.com/