birla sunlife company for anil
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A SUMMER TRAINING REPORT
ON
FINANCIAL CONSULTANT TOWARDS BIRLA SUN LIFE
INSURACE
AT
SUBMITTED BY:
Lokesh Kumar (8552585)
In partial fulfillment of the requirement for the award of degree of
BECHOLAR OF BUSINESS ADMINISTRATION
(2009-2011)
SHRI RAM COLLEGE MUZAFFARNAGAR
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PREFACE
Its a magic mantra for the marketer. It says the customer is best satisfied when it least
expects it. Todays highly competitive marketplace, when mere satisfaction does not
ensure loyalty, decrees this. To take potential defectors by surprise, you have to behind
customer expectation by anticipating its need and then surpassing them with constantly
superior products or service or delighting the customer. Nor must be delight be a one-off
offering, which can be bartered for a lifetime purchase. You must be prepared for a lifetime
purchase. You must be prepared to it again and again, increasing the level of satisfaction at
each encounter with the customer. It was in the late eighties that corporation discovered the
magic mantra: customer loyalty. In the mid nineties the manta is being modified somewhat.
Instead of merely satisfaction, the enlightened companies have now started talking about
customer loyalty. The distinction is important increasingly research data is showing that
even customers who claim to be satisfied tend to desert a company whenever its rival
unleashes a new marketing program. And any marketing exercising that merely aims at
satisfying customers is unlikely to reap any term benefits.
Marketings traditional connection with customer are no longer sufficient I a real time
world focus groups, market research, consumer surveys and other tools for probing the
consumer wants and needs are and always have been limited. Customer surveys must view
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with skepticism. By contrast, continuous connection with customers can provide
information that focus groups and surveys cannot. A customer is rarely interested in the
products per she is only interested in what the product Cando for him. Thats why, any
marketer who can help the customer get the maximum benefits from the products stands to
gain a district competitive edge in the market place.
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ACKNOWLEDGEMENT
I would like to express my sincere gratitude to Mr.Ankur gupta, branch officer of (BIRLA
SUN LIFE INSURANCE COMPANY LTD.), Muzaffarnagar for giving me an opportunity
to undergo this summer training in his esteemed organization.
I also extend my sincere thanks to the employees of BIRLA SUN LIFE INSURANCE CO.
LTD. Muzaffarnagar With out their support and guidance, this project could not be
completed. Though out the project work, they had been a constant source of motivation to
me.
Lastly I would like to thank all the facility members of marketing department of our
institute who guided me to fulfill my project.
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STUDENT DECLERATION
STUDENT DECLARATION
I here by declared that this summer training project entitled A REPORT ON MARKET
POTENTIAL IN LIFE INSURANCE SERVICES in NCR region, (A CASE STUDY OF
BIRILA SUN LIFE INSURANCE COMPANY LTD.) Submitting for partial fulfillment of
the requirement for the degree of M.B.A. from U.P.TECHINICAL UNIVERSITY,
LUCKNOW is of my original work. This report is only for education purpose and not for
any other purpose.
FROM -
LOKESH KUMAR (8552585)
DATE B.B.A (Third year.)
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CONTENTS
PART-1
COMPANY HISTORY
COMPANY PROFILE
PRODUCTS OF BIRLA SUN LIFE COMPANY
PART-II
INTRODUCITON TO THE TOPIC
METHODOLOGY
OBJECTIVES
DATA ANALYSIS & INTERPRETATION
CONCLUSION
LIMITATION
RECOMMENDATION
BIBLIOGRAPHY & REFERANCE
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COMPANY HISTORY
BRIEF HISTORY OF UNIT- LINKED INSURANCE: The unit linked life
insurance policy as it is understood and practiced in the west was introduced in our
country only in 2000 when LIC brought in to the market a policy called BIMA
PLUS. As a data, expect two or three new companies all the companies are selling
the unit linked life insurance policies. The term unit in our country is somehow
identified only with the units sold by UNIT TRUST OF INDIA. This product is
also called EQUITY LINKED POLICY or MARKET LINKED POLICY to
indicate that the returns under these plans are linked to the market returns of the
equities or shares.
The credit of introducing the first unit linked plan goes to UTI when they brought
out the Unit linked life insurance (ULIP) in 1971,In 1989 LIC Mutual Fund
introduced the DhanRaksha Plan identified to the ULIP. The term of the policy in
either 10 or 15 years. With the effect from 1-7-02 the target amount under these two
schemes has been introduced to Rs. 2 lakhs from Rs.75, 000.it works like this: from
the uniform contribution for each year (for example @Rs.20,000 for ten years) a
small portion is used to buy term death cover for Rs.2 lakhs and the balance is
invested in units and at the end of ten years the accumulations made in your account
is given as the maturity benefit along with a 5 or7.5% bonus. There is some
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general public due to legal obstacles and funding problems till 1964. In 1959 the
US supreme court ruled that such insures will be subject to the regulation of
securities and exchange commission (SEC) only in 1964 the SEC permitted
insurance companies to introduce such annuities.
Each groundwork for successfully operating unit-linked life insurance policies was
first made in Holland, Netherlands, Canada and UK.
However, life insurance contracts linking to the performance of units came only in
1976 in USA. The SEC ruled that life insurance contracts with an equity base
would be subject to the securities act of 1933-34 and investment company act 1940.
The agents selling such policies were also to take special licenses.
While it is called Unit- linked life insurance policy inUK it is called Variable
insurance contracts in USA. It is rightly called variable because both the
premiums and the benefits under the policy are variable according to eh choice of
the policyholder. What is paid under the policies is the returns on the performance
of the chosen equities and not a fixed sum as in an ordinary policies. The majority
of them are whole life plans.
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Basically, in USA, it offers the life insurance coverage combined with a tax-
differed investment feature. Your premium payment are spent on three things:
1) The cost of the life insurance;
2) Various insurance company fees-including sales charges which are deducted
from each premium payment and
3) Your tax deferred investment account, whatever amount is left after the first
two goes into the third. And the amount is probably a lot less than you would hope.
There are stringent regulations on selling these policies in other countries.
For example, in USA, since the variable life insurance products switches the
investment risk from the insurance company to the policy owner, these types of
policies are considered both insurance contracts and securities and are regulated by
both the securities &exchange commission and the state insurance commissioner.
An agent authorized to sell variable life insurance must be licensed by the state as
well as by the National Association of Securities Dealers (NASD) to work as a
registered representative.
As a security, variable insurance products are regulated by the securities &exchange
commission, which brings out a new set of agent requirements dealing, primarily
with full and fair disclosure laws. For example, any sales presentation or illustration
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must be preceded by or accompanied by a prospectus approved by the SEC. all
materials used in selling and the SEC must also approve promoting these product
prior to use.
In our country, however, only the IRDA regulates this policy and the investment of
the premiums collected under the policies. Also it is enough if the selling agent has
passed the basic IRDA insurance license examination. No special qualifications are
need by the agent and SEBI does not have any control over the designing of or
illustration prepared by the insurance companies in selling such policies.
BRIEF HISTORY OF BIRLA SUN LIFE INSURANCE COMPANY LTD.:
A joint venture between the Aditya Birla Group and Sun life Financial, Birla sun
life insurance forayed into the life insurance and retirement planning business by
pioneering the unique unit-linked solutions in India. In just over 2 years of its
launch, the company has catapulted to second position in new business premium in
the highly competitive private life insurance industry based on its strategy of unit-
linked plans.
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THE ADITYA BIRLA GROUP: Aditya Birla, a name that evokes all that is positive in
business and life. It typifies integrity, quality, performance, innovation, perfection
and above all, character.
In operation for over 50 years now, the Aditya Birla Group is one of Indias largest
business houses. A highly respected and admired group, rooted in performance
ethics based on value creation for its multiple stakeholders. The Aditya Birla
Groups operations span over 40 units across 18 countries, anchored by a 72,000
strong committed workforce, a group turnover exceeding Rs.27, 000 crore, an asset
base which exceeds Rs.20, 000 crore and a market capitalization of over Rs.13, 000
crore spread over 7 lac shareholders. Known for its rack solid fundamentals it
nurtures a culture where success does not come in the way of the need to keep
learning afresh to continue innovating and to carry on experimenting.
Being one of the largest corporate houses in India, and Aditya Birla Group enjoys a
dominant position in all the sectors in which it operates. It is the worlds largest
producer of viscose staple fibre, largest single location aluminum plant and the
largest single location refiner of palm oil. Whats more, it is the second largest
producer of insulators and the fifth largest producer of carbon black in the world.
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In India, the group is the single largest producer of viscose filament yarn,
aluminum, white cement and the third largest in grey cement. Not to mention, the
recognition of being the market leader in the ready to wear branded apparel
segment with brands like Allen solly, Louis Phillip, van heusen and peter England.
The flagship companies of the Aditya Birla Group include some of the largest and
most respected companies in India such as grasim industries limited, Hindalco
industries limited, Indian Aluminum Company limited, Indian Rayan Industries
Limited, Indo Gulf Corporation Limited. The Group has larged power relationship
with large corporations like Hindustan Petroleum, Tata, Powergen Plc and AT&T.
The group fosters a culture that promotes excellence and rewards entrepreneurship.
It endeavors to make the workplace a source of creativity, innovation and self-
fulfillment for its employees. Nurturing a corporate culture imbedded with a high
level of commitment and a sense of shared destiny.
The mission of the Aditya Birla Group is creation of value for its customers,
shareholders, employees and the society at large.
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SUN LIFE FINANCIAL: Sun life financial is a leading international financial services
organization. With a history that dates back to 1871, Sun life financial has evolved from a
single mutual life insurance to one of the most highly rated insurance and wealth
management institution in the world. Sun life financial knows its value lies in more than
assets and history. It also lies in the culture of the integrity and the pursuit of excellence
that have marked all of the organization endeavors. Today the sun life financial group of
comp anise and the partners are represented globally in Canada, the United States, the
Philippines, Japan, Indonesia, India and Bermuda.
In March of 2000, Sun life financial services of Canada, inc, Sun life financiers
parent company, listed its shares on stock markets in Toronto, New York, London,
and Philippines. This new access to shareholders equity provides Sun life financial
with even greater opportunities to grow around the world.
The Sun life financial group of companies around the world, offer innovative and
practical financial solutions to individuals and corporations:
Life, Health and Disability
Pension Funds and Plans
Investment Management
Annuities and Savings
Trust, Brokerage and Banking
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Sun life assurance Company of Canada, sun life financiers primary insurance
business, has excellent ratings with the worlds top ratings agencies. With assets
under management as on September 30, 2000 totaling more than CDN$345 billion,
it ranks amongst the largest international financial services organizations in the
world. Sun life financial enjoys independent rating that place us at the top of the
financial sector in North America.
VISION: To be a world-class of financial security to individuals and corporate and
to be amongst the top three private sector life insurance companies in India.
MISSION: To be the first preference of our customers by providing innovative
need based life insurance and retirement solutions to individual as well as
corporate. Well trained professionals through a multi channel distribution network
and superior technology will make these solutions available.
Our endeavor will be to provide constant value addition to customers throughout
their relationship with us, within the regulatory framework. We will provide career
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options, viz, protector (Representing a low risk portfolio), Builder (Medium risk
portfolio) or Enhancer (High risk portfolio) with guaranteed returns fund, at present
ranging from 3%-6%. The flexibility of changing the investment option initially
availed by them is also available.
1. GUARANTEES PROVIDE SAFETY NET : The policyholders enjoy the upside
returns provided by the portfolios in all the investment options. As on 31st
December 2002, the annualized returns since inception under protector, builder and
enhancer options were 9.75%, 11.12% and 14.74% respectively, which is above the
minimum level guaranteed.
2. CONVENIENCE IN PAYMENT OF PREMIUMS: The customer has the
option of paying any amount of premium, any number of times (within a policy
year) irrespective of the mode. Traditional products available in the market do not
offer such a facility.
3. BUILT-IN GUARD AGAINST UNITENDED LAPSATION: These products
provide continuity of risk coverage for a long time even if the premiums remain
unpaid. The continuity of risk is ensured with the help of monthly recovery of cost
of insurance and automatic premium advance facility. A policy can lapse if and
only if the policy fund pertaining to the individual policy becomes negative.
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4. RISK COVER DOES NOT DECRESE DURING THE TERM OF THE
POLICY: Unlike traditional life insurance policies, where the sum at risk (Sum
assured paid up value) actually goes on decreasing, in our flexi policies, death
benefit is sacrosanct and and remains uniform throughout the tenure of the policy.
In case of death, the face amount as well as the policy fund representing the saving
portion in the premium is payable.
5. ACCELERATED PAYMENT OF PREMIUM POSSIBLE : Depending on ones
financial situation a shorter premium-paying period can be selected, with the
advantage of greater accumulation resulting into higher
death/surrender/withdrawals/ maturity benefits.
6. LIQUIDITY ON TAP : Traditionally, insurance products have been know to be
illiquid. Policy loans are at a cost and surrenders defeat the very purpose of
insurance. In such an environment, the facility of withdrawals without affecting the
risk cover is one of our unique features.
7. NO PENALTY FOR SURRENDER : Unlike in traditional type of life insurance
policies where the policy holders have to suffer a financial loss on surrender of their
policies, our products do not provide any surrender charge after the first four years.
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8. CUSTOMERS CAN SEE THEIR MONEY PERFORM: Our policyholders are
provided with an access code to know the policy values online. Besides, the
investment performance of the various options is published every quarter and the
policyholders receive a yearly statement reflecting the status of the policy fund.
9. OTHER BENEFITS :
a. Lower premium for female customers
b. Age last birthday gives the customers advantage of lower age
c. A policy can be customized to the policyholders requirements. For instance
our Flexi life line with the facility of limited premium payments and
withdrawals thereafter, becomes a veritable pension plan with attendant tax
benefits.
d. Detailed illustration at the point of sale
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ORGANISATION STRUCTURE: two guides Biral sun life insurance business
operations if its core values, namely integrity and transparency. BSLI complies with a
all regulations governing the life insurance business. A high degree of transparency is
followed in al the business practiced and procedures and all employees are governed by
an internal code of conduct.
BSLI abides by the corporate governance framework in accordance with the Kumar
Managalam Birla committee as applicable to the life insurance business, as well as the
provisions of the insurance act, 1938, the companies act, 1956 and the IRDA
regulations.
The various committees overseeing the business are:
BOARD OF DIRECTORS
Mr. Donald Stewart- chairman
Mr. Kumar Mangalam Birla
Mr. Gary M. Come ford
Mr. Douglas C. Hence
Mr. S.K. Mitra
Mr. B.N.Purankmalka
Hish Highless Maharaja G.Singh
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Mr. S.N. Talwar
Mr. G.P. Gupta
AUDIT COMMITEE
Mr. B.N. Puranmalka
Mr. S.K. Mitra
Mr. D.C. Henck
Mr. G.M. Cmerford
INVESTMENT COMMITEE
Mr. S.k. mitra
Mr. B.N. Puranmalka
Mr. P.J. Akers
Mrs.K.Gupta
Mr. A. Fenn
Mr. N.B. Javeri
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Mr. S.Shah
EXECUTIVE COMMITTEE
Mr. G.M. Comeford
Mr. D.C. Heck
Mr. S.K.Mitra
Mr. B.N. Puranmalka
Apart from the above committees overseeing the business operation, the CEO and CGO
certify the audited accounts of the company and company secretary submits a
compliance certificate.
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THE BSLI MANAGEMENT TEAM
Mr. Nani Javeri
(CEO)
Mr. Peter Akers
(CFO and appointed actuary)
Mr. E.N.Goveia Mr.
P.Nandagopal
(Senior vice president direct sales force) (Senior vice president-alternative
Channel and group life)
Anjana Grewal Jaskirat Kaur Snehal Shah
K.S.Gopalkirshnan
(marketing &comm.) (group life &personal) (control & admin.) (actuary)
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Mr. K.H. Venkatachalam (chief manager-human
esource)
Mr. Mayank Braganaza (chief manager- finance and planning)
BRIEF PROFILE OF SEVICES OF ORGANISATION:
Pioneered by Birla sun life insurance, Unit- linked solutions bring together the best
of life insurance and investment, together. A unique combination of security from
life insurance and returns from investment. Introduced in line with the latest global
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trends, the unit- linked plans put you in total control of your money. They are
simple transparent and flexible. Whats more, they offer 3% minimum guaranteed
overall returns on the premium.
Birla sun life insurance provides individual as well as group life insurance solutions
aimed at the corporate sector.
INDIVIDUAL LIFE PLANS: Birla sun life insurance offers number of individual life
plans, which can be given below-
FLEXI SECURELIFE RETIREMENT PLAN: This is a unit-linked retirement plan to
give you efficient returns in the long term so as to build a sufficiently large corpus of
savings on retirement. The planes built in tow phases: the accumulation phases and annuity
phase. During the accumulation phase the plan gives you a choice of three investment
options to invest your money with an option to switch between these funds to match your
risk appetite. Whats more it offers a guaranteed minimum return of 3% on your premium
(deposit) amount net of all charges and deductions in this phase. In the annuity phase the
plan gives 2 options to choose from.
FLEXI LIFE LINE PLAN: This plan offers a life insurance cover till the age of 100 years
thus providing you with a lifetime of security. It is an investment for your future in which
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you accumulate large savings through the benefits of compounding. The plan gives you the
flexibility of making tax-free withdrawals and can be customized as tax efficient pension
during your working years while the plan continues for a lifetime.
FLEXI SAVE PLUS ENDOWMENT P LAN: It is a flexible life insurance plan, which
offers the dual benefit of a life insurance cover as well as large tax-free savings in the long
term. The plan is taken for a specified period and the benefits are payable in the events of
death during the tenure of the plan or at maturity. The unit-linked nature of the plan
coupled with the benefits of compounding can lead to very efficient returns in the long
term.
FLEXI CAH FLOW MONEY BACK PLAN: It is a flexible life insurance plan, which
offers a life insurance cover and gives lump sum payment at periodic intervals. These
periodic payments intervals. These periodic payments help you meet your various financial
obligations at crucial junctures such as education or marriage of your child. The unit-linked
plan also offers you the option of not withdrawing the lump sum amounts and continuing it
in the plan to take advantage of the benefits of compounding.
1.4.1 BIRLA SUN LIFE TERM PLAN: The plan offers large life insurance cover for
very low costs for a specified term. It is a low premium, pure risk coverage plan,
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which takes care of ones financial commitments toward his/her depending should
anything unfortunate happen to line policyholder.
1.4.1 BIRLA SUN LIFE PREMIUM BACK TERM PLAN: The plan offers you a life
insurance cover for a specified term. Unlike other term plans this plan refunds the
entire amount of premium that you pay over a period of time. There are two options
of maturity benefits to choose from and what is m ore it is a low cost life insurance
plan.
1.4.2 GROUP PLANS: Birla sun life insurance Company offers number of group plans,
which can be, described below-
1.4.2 GROUP GRATUITY SOLUTIONS : It works for your future group gratuity
addresses the need of prudent financial management for a progressive corporate
house. The unique benefit being it provides market-linked returns that present an
opportunity for capital appreciation in the long term. Besides when the fund yields
better returns, it decreases the contribution to the fund in the years.
1.4.3 GROUP SUPERANNUATION PLAN: Retire in comfort- Birla sun life insurance
offers group superannuating plan as a retirement solution for employees. The plan
has benefits that empower both the employer and employee. The contribution is
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invested in unit-linked funds yielding market-linked returns to meet your future
needs efficiently. Additionally original / principal contribution is guaranteed against
market fluctuation.
1.4.4 GROUP PROTECTION PLAN: Birla sun life insurance provides group
protection plan for a homogenous group. Under this plan, life insurance cover is
provided at an affordable cost. Renewed every year, it helps fulfill the insurance
needs of employees as well as provide financial security to their families. In the
event of death of the member, the beneficiary (family) of the member gets the
benefit. The plan has 6 additional riders and two options.
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PLANS AT A GLANCE
FLEXI SAVE PLUS
ENDOWMENT PLAN
FLEXI CASH FLOW
MONEY BACK PLAN
FLEXI LIFE LINE
PLAN
ELIGIBILITY 30days 65 years 30days 65 years 30days 65 years
MINIUM FACE
AMOUNT
Rs.50, 000 for minors
and Rs75, 000 for adults
Rs.50, 000 for minors and
Rs75, 000 for adults
Rs.50, 000 for
minors and Rs75,
000 for adults
DURATION OF THE
PLAN
As per policy term-5,
10,15,20,25,or 30 years
or as per maturity age-15,
20,25,30,35 years for
minors and 60,65,70,80
years for adults
As per policy term-5,
10,15,20,25,or 30 years or
as per maturity age-15,
20,25,30,35 years for
minors and 60,65,70,80
years for adults
As per policy term-
5, 10,15,20,25,or
30 years or as per
maturity age-15,
20,25,30,35 years
for minors and
60,65,70,80 years
for adults
PREMIUM PAYING
PERIOD
Single pay 5,10,15,20
years or over the duration
of the plan
Single pay 5,10,15,20
years or over the duration
of the plan
Single pay
5,10,15,20 years or
over the duration of
the plan
MATURITY BENEFITS Policy fund Policy fund Policy fund
AMOUNT DUE TO Face amount+policy fund Face amount+policy fund Face
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premium
Rider
UNIQUE FEATURES Minimum guaranteed returns of 3% p.a. on your premium net of all
policy fees of all policy fees and charges. The entire upside in the
performance of the fund is passed on to you.
Three investment fund options: protector, builder and enhancer with
option to switch between funds any time after the first policy year.
Options to make tax-free withdrawals you have additional savings.
Vary the face amount of policy depending on your changing needs for
life insurance during your lifetime.
Surrender your policy without penalty anytime after 4 policy years.
1.5 AREAS OF EXCELLENCE: Drawing from the strength of the joint venture
partners. The aditya Birla group and sun life financial inc. the team of Birla sun life
insurance has crossed several milestones of excellence.
Leadership in unit-linked plans- 95% of sales come through unit-linked plans.
The company is one of the largest sellers of unit-linked plans in one of the
fastest growing life insurance markets in the world.
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The company is a p pioneer in introducing unique product features like a free
look period and best sales practices such as the use of sales illustrations. The
regulator has now introduced the free look period as an industry norm. The
mandatory use of a sales illustration within BSLI set up a standard of
transparency in the industry.
A high persistency ratio of 95.46% by premium.
BSLI has consistently recorded the highest average sum assured of Rs.3, 26,000
and average premium of Rs.19,500 per policy in the industry with a unit-linked
product range.
A very efficient utilization of capital.
Low claims ratio of 0.06% of total policies.
The first advisor to qualify to the top of the table (TOT) amongst all private
life insurance companies.
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1.6 GROWTH OF BIRALA SUN LIFE IN UNIT-LINKED LIFE INSURANCE:
Another successful financial year came to an end. The company reported an
annualized new business income of Rs.478 crore during the year 2003-04 an increase
of 222% over the premium income lat year. The company of the year-end had an
agency force of around 10,250 agents, and 89 ban assurance & corporate partners.
All three sales channels came out with flying colors. During the year 2003-04 the
company has launched two new groups and one individual fund.
During the year 2003-04, the BSE sensex has gone up by 81% but the first quarter of
year 2004 was not very exciting for the market except for a huge supply of PSU
IPOs. In March 2004, the markets have been choppy and combined with the
upcoming elections. This has caused some amount of investor uncertainty. After a
continuous rise between may 2003 and January 2004, the quarter saw a correction in
the market. The BSE sensex went up to an all time high in January 2004 and the
quarter closed at 5590.60 down almost 4% from December 2003 level. There was a
large supply of IPOs by PSUs, which met with a good response. The fundamentals
remained good and foreign institutional investors (FIIS) continued buying even
though the markets declined. The GDP growth numbers has also been encouraging at
10.4% in October December 2003 quarter.
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Returns on unit linked pension funds:
PARTICULARS RETURN ON INVESTMENT
(SINCE INCEPTION)%
ANNUALISED RETURN
(SINCE INCEPTION)%
LAST I YEAR
(%)
NOURISH 13.94 13.21 13.30
GROWTH 15.54 14.97 14.90
ENCRICH 18.78 17.80 18.10
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1.7 PROBLEMS IN ORGANISATION:
Problems in the organization, which are assigned by officer, are not so big problem.
It is clear that BIRLA SUN LIFE INSURANCE COMPANY is a unit- linked
insurance, which are basically involved in the life insurance solutions. There are
number of problem which are as follows-
1) The main problem of the organization is that the it is not government
organization like a life insurance solutions.
2) The second main problem is that lack of believes on the organization by the
people.
3) The third problem assigned by the organization that there are the few
branches of the BRILA SUN LIFE INSURANCE SOLUTION.
4) Another problem is that the lack of good quality, good skill insurance
advisors.
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1.0 DISTRIBUTION NETWORK
BIRLA SUN LIFE INSURANCE COMPANY LTD, distribution strategy is aimed at
creating a national presence through a scaleable model, which would achieve
convenience, accessibility and quality service for the customers.
2.1 DIRECT SALES FORCE: Through this channel, the company sets up brick and
mortar branches on a standardizes template, across the country selling life insurance
though trained career agents called insurance advisor. The team of agency managers
and advisors are geared for productivity enhancement national presence in
44branches and 9development centers.
2.2 LTERNATE CHANNELS: The experience in various countries for selling life
insurance through banks, corporate agents, brokers, call center, Internet and these
distribution alternatives will be pursed by the organization from the inception stage.
While in India there was no precedent for selling life insurance though these alternate
modes, a philosophy of piloting and stabilizing the model was adopted.
The successful business models for banassurance, corporate agency, brokerage,
affinity group and direct marketing are being consolidated. use of the call center and
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the internet will continue to be part of the direct marketing initiatives .with a winning
multi-channel distribution system in place ,BSLI alternate channels are frontrunners
in bancassurance business, in partnership with Citibank ,Deutsche bank,Bankof
Rajasthan,BankMuscat,Catholic Syrian Bank, Development credit bank and IDBI
Bank.
2.3 OUP INSURANCE: The selling of insurance to corporate and affinity groups is
developed though dedicated relationship managers. The business focus is on the
Aditya birla group companies and the top corporate in India.
Through this channel, the company has established relationships with more than 100
blue chips corporate across the country by providing group protection and group
retirement solution. The company has achieved leadership position in-group business
in private life insurance position in providing fund management services for the
group retirement plans.
2.4 DISTRIBUTION IN TUNE WITH TECHNOLOGY: Technology plays the crucial
role, when distribution spans across more than 50 locations .the IT strategy revolves
around selecting and implementing critical business applications to support
contemporary products like universal life and aligning process to provide world-class
customer services. The systems are web enabled and equipped to provide consistent
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information across all touch points (branches, callcenters website etc.). A high quality
wide area network (WAN) was set up to interconnect all branches and the
headquarters at mumbai.
2.5 TRANNING TO SUPPORT DISTRIBUTION: In keeping with support throughout
the country. Birla sun life insurances mission of providing life insurance solutions
though well trained professionals, our tanning team has geared up to meet the
challenge. We have a team of qualified professionals to provide the crucial support
throughout the country.
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6.0 PRICING POLICY OF THE COMPANY:
6.1 KEEP TRACK OF YOUR POLICY FUND: Birla sun life insurance sends you
an annual policy statement on every policy anniversary to keep you completely
informed on the performance of our various funds based on the unit price will be
available on our website.
6.2 ELECTRONIC CLEARING SERVICE (ECS): The ECS is a convenient and hassle-
free method of paying premiums through an electronic debit to your bank account.
INVESTMENT FUND PORTFOLIO:
UPPER LIMIT OF
%ASSETS IN:
PROTECTOR BUILDER ENHANCER
Government and
government approved
securities
85% 70% 55%
Rated corporate bonds (AA
and above)
30% 30% 30%
Money market and other
liquid assets
20% 20% 20%
Infrastructure sectors as
defined by the IRDA
25% 25% 25%
Listed equities 10% 20% 35%
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6.3 FEES AND CHARGES: The policy loading fee* is an up-front charge and varies as
per the premium payment mode and the policy year as given under:
PAY PERIOD
POLICY
YEAR
SINGLE 5-PAY 10-PAY 15-PAY OR
GREATER
1 3% 29.9% 54.6% 65%
2 N/A 5.0% 7.5% 7.5%
3 N/A 5.0% 7.5% 7.5%4+ N/A 5.0% 5.0% 5.0%
As a percentage of premium. The policy-loading fee for top up wills 2.0 percent.
6.5
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CHARGES:
6.5.1. Charges towards the cost of insurance will be deducted by
cancellation of units at the prevailing unit price on a monthly basis. The annual
insurance charges per thousand-face amount for sample ages for healthy lives are as
follows:
Sex/age (yrs) 20 30 40 50 60
Female 0.90 1.16 1.66 4.03 10.66
Male 1.02 1.17 2.15 5.53 13.73
6.5.2. An investment management free not exceeding 1.5% p.a. of
the fund will be charged by adjustment of daily unit prices. Currently this fee is 1%
p.a.
6.5.3 The following administration fees will be deducted by canceling units on a
monthly basis.
(a) Rs. 22 per month
(b) An annual charge of Rs. 2.88 per thousand face amount will be deducted in the
first 10 years of the policy expect in the second year where it will be Rs. 15.24 per
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surrender charge is 24 percent of the annualized premium. The surrender charge
percent reduces by one for e very month thereafter. If the policy is surrendered at
any time after the 49th month, the surrender charge is zero.
6.8 WITHDRAWAL CHARGES:
In a year tow withdrawals are free of charge
For every additional withdrawal, a charge of Rs.100 will be levied.
AN ILLUSTRATION, WHICH IS SHOWING THE PRICING POLICY OF THE
COMPANY:
THIS PRESENTATION IS PREPARED FOR: Mrs.Nisha Singh
Name of life insured: Mrs.Nisha Singh
Date of birth 01/07/1964/ female
Coverage type Face amount coverage annual
(Rs.) benefit coverage
period premium
(Years) (Rs.)
Flexi save plus (age) 90,000 30 4,563.60
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Accidental Death &
Dismemberment rider 90,000 25 151.20
Policy premium 4,714.80
Due and payable Quarterly
The premium and associated benefits are described in the product brochures
and the following illustration. The details provided in the following
illustration would enable you to see how your p premium is being used. If
you need help to interpret please contact your insurance advisor or call Birla
sun life insurance Companys toll free number, which is 1600227000.
Some benefits are guaranteed and some benefits are variable with returns
based on the future performance of your insure carrying on life insurance
business. If your policy offers variable returns then the policy fund values
table will show two different rates of assumed future investment returns.
These rates return are not guaranteed and they are not upper or lower limits
of what you might get back, as the value of your policy is dependent on a
number of factors including future investment performance. The guaranteed
amounts are the minimum amount that you can expect if all the conditions
mentioned later are fulfilled.
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This illustration ignores the impact of the provisions of the income tax act,
1961. The provisions of section 88 of the income tax act, 1961 govern a tax
rebate for premiums paid towards an insurance policy. The tax exemption
for the benefits paid under a life insurance policy is governed be section
10(10D) of the I income tax act, 1961. Both these sections may be applicable
to this policy .you may consult a qualified tax advisor for specific tax advice
related to you. If required by the act, we will withhold taxes from the benefits
payable under this policy. We also reserve to you. If required by the act, we
will withhold taxes from the benefits payable under this policy. We also
reserve the right to recover from you levies such as service tax levied by the
authorities on insurance transactions.
Please note that in the following pages that illustrate the policy fund values:
The premium and all values shown are for the life insurance coverage and do
not include riders. The rider benefit amount will be payable, wherever
applicable in case of happening of the events as mentioned in the rider
brochure in consideration of the payment of additional premium/charges.
Policy fund values shown as at the end of the year and assume:
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(1) Premiums are paid in full when due,
(2) No withdrawals are made,
(3) No outstanding policy loans exit,
(4) The investment fund options is not changed throughout the lifetime of
the policy,
(5) Increase in premiums or charges for riders having non-guaranteed
premiums or charges are not recovered from the policy fund,
(6) No change is made in the face amount of the life insurance coverage
and
(7) Policy fees and charges are at current levels as explained in the section
policy fees and charges. The premium mentioned in this illustration
does not include top-up premium or any underwriting extras.
Upon surrender or maturity of the policy, the amount payable to the policy
owner is the sum of:
(1) Guaranteed policy fund surrender /maturity value, and
(2) Non-guaranteed policy fund
Less any amounts owed to the company.
The sum of 1 and 2 above constitutes the policy fund.
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FEES AND CHARGES: The policy loading fee* is an up-front charge and
varies as per the premium payment mode and the policy year as given under:
PAY PERIOD
POLICY
YEAR
SINGLE 5-
PAY
10-
PAY
15-PAY OR
GREATER
1 3% 29.9
%
54.6
%
65%
2 N/A 5.0% 7.5% 7.5%
3 N/A 5.0% 7.5% 7.5%
4+ N/A 5.0% 5.0% 5.0%
In addition to the above policy-loading fee, the following policy fees and
charges will be recovered from the policy fund.
1) The cost of insurance of the life insurance coverage will be deducted by
cancellation of units at the prevailing unit price on a monthly basis. The
annual insurance charges per thousand of the life insurance coverage face
amount for sample ages for healthy lives are as follows:
Sex/age
(yrs)
20 30 40 50 60
Female 0.90 1.16 1.66 4.03 10.66
Male 1.02 1.17 2.15 5.53 13.73
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2) An investment management fee not exceeding 1.5 percent per annum of the
investment fund will be charged by adjustment of the daily unit prices.
Currently this fee is 1 percent per annum.
3) Policy administration fees for the life insurance coverage will be reeducated
by canceling units on a monthly basis, as follows:
a) Rs. 22 per month; and
b) Annual charge of Rs. 2.88 per thousand of the life insurance coverage face
amount will be deducted in the first 10 years of the policy expect in the
second policy year when it will be Rs. 15.24 per thousand of the life insurance
coverage face amount. From the 11th year onwards this annual charge (Rs.
2.88 per thousand of the life insurance coverage face amount) increases at an
annualized rate of a maximum of 3.75%, every year.
4) The surrender charges to be levied vary based on the duration of the policy.
During the first 24 months of the policy, the charges will be an amount equal
to the annaslised premium payable for this p policy. For the purpose of
surrender charges only, annualized premium is defined, as the amount that is
payable if the coverage playing period is equal to the coverage benefit period.
In the 25th month, the surrender charge is 24 percent of the annuallised
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premium. The surrender charge percent reduces by one for every month
thereafter. If the policy is surrendered at any time after the 49th, the
surrender charge is zero
.
The premium net of all charges and fees will earn a minimum life insurance
net return of 3 percent per annum, which constitutes the guaranteed fund.
Any returns earned by the policy fund in excess of the guarantied fund
constitute non-guaranteed fund.
For a detailed description of the features of the product, please refer to the
product broacher.
Acronyms used:
TPD- Total And Permanent Disability,
TPD/CI- Total And permanent Disability or Critical illness,
Death/TPD Death or And Permanent Disability,
Death/TPD/CI- Death or Total Permanent Disability or Critical illness.
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INTRODUCTION TO THE TOPIC
This project has been a great learning experience for me; at the same time it gave me
enough scope to implement my analytical ability. This project as a whole can be divided
into two parts:
The first part gives an insight about the mutual funds and its various aspects. It is purely
based on whatever I learned at Birla Sun Life Mutual Fund. One can have a brief
knowledge about mutual funds and all its basics through the project. Other than that the
real servings come when one moves ahead. Some of the most interesting questions
regarding mutual funds have been covered. Some of them are: why has it become one of
the largest financial intermediaries? How investors do chose between funds? Most popular
stocks among fund managers, most lucrative sectors for fund managers, a special report on
Systematic Investment Plan, does fund performance persists and the topping of all the
servings in the form of portfolio analysis tool and its application.
All the topics have been covered in a very systematic way. The language has been kept
simple so that even a layman could understand. All the data have been well analyzed with
the help of charts and graphs.
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The second part consists of data and their analysis, collected through a survey done on 200
people. It covers the topic need of financial advisors for mutual fund investors. The data
collected has been well organized and presented. Hope the research findings and
conclusions will be of use. It has also covered why people dont want to go for financial
advisors? The advisors can take further steps to approach more and more people and
indulge them for taking their advices.
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RESEARCH METHODOLOGY
For defining research methodology there are three basic types of methods for
marketing research. They are as follows:
a) The observation method.
b) The experimental method.
c) The survey method inclusive of panel method.
In observation method data are collected on the direct observation. No talks place
by observing the person the analysis makes the inventory as to product used by him
at his hoe or kept as retailers stocks.
In experimental method it is based on the concept that small-scale experiment is
useful to indicate the expectation of large-scale experiment.
The survey method information is gathered directly from individuals in three ways;
1) Telephone
2) Mail
3) Personal interview
This survey method is also suffered to as the questionnaire technique. There is also
organized by-
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1) In factual survey
2) Interpretative survey
3) Opinion survey
In my project point of view I have taken mainly the method of personal interview
by questionnaire technique in the personal interview by questionnaire.
Technique I usually gathered information by face to face interviewing.
In this survey method I saw that the respondent was shown the exhibit and
advertisement to give his personal opinion and attitude.
In this method the direct interaction on occurred with the retailers and I could
collect the reliable information from them.
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RESEARCH PROCESS
FEED BACK
SAMPLING PLAN: Sampling plan of this project report basically related to the
number of points which are given below-
The universe studied prospectors in the areas of N.C.R. mainly Delhi,
Ghaziabad, Noida & Gurgoan.
The sampling unit is a single prospector outlet, which may be any types.
Elements: potential prospector.
The geographical limit is the area of N.C.R.
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DEFINING RESEARCH
INTENSIVE LITREATURE
COLLECTION OF DATA
ANALYSIS OF DATA
RECOMMENDATION AND
REPORT WRITING
RESEARCH DESIGN
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Keeply the number of prospector in mind the sample size arrived at was
200.
The sampling method followed was judgmental sampling.
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6.1 TIME SCHEDULE:
TOTAL DURATION 17 JULY TO 20 AUGUST
PREPATION FOR DATA COLLECTION 17 JULY TO 12 AUGUSTDATA COLLECTION 21 JULY TO 15 AUGUSTDATA CALIFFICATION AND PREPARATION
OF REPORT
16 JULY TO 21 AUGUST
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DATA COLLECTION METHOD
In my project report, which has entitled a research repot on market potential in life
insurance solution in NCR region, has been collected data from the two method-
(A) PRIMARY SOURCE
(B) SECONDARY SOURCE
Under the primary source data collected by me through the observation, survey and
personal interview.
QUESTIONNAIRE METHOD: Through the questionnaire method number of
question asked by the different people from the different region mainly DELHI,
GHAZIABAD, NOIDA, GURGON by me. My questionnaire method is a open
ended method in which questions asked by me has a limited number. The main
purpose of this questionnaire is find out the view of the people that they take
insurance advisors advice or not. In which they like to investment their savings.
The format of questionnaire of this company is given next page-
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Survey method: This project report is also suffered by the survey method for
collecting the relevant information, so that marketing executive will be success for
making marketing strategy according to that survey.
The main purpose of this survey which help the insurance advisors to identify the
type of market in which insurance advisors may be prospecting and selling should
he enter the life insurance business.
It will also aid management in estimating their sales potential and in determining
the type of training that would be most beneficial to him.
The names you enter represent people you know today. Should you enter the
business of selling life insurance, you will learn proven ways to meet new people
and expand these markets.
While many of those you list are presently prospect for life insurance and others are
not, do not make the need for life insurance a requirement for adding their names.
Do not list names by any predetermined selection rating. Simply list the first 100
names of those who come to your mind most readily.
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(Sampling page)
Sources Of Names
A. School / college friends
B. Family friends
Source Letter
Persistency source
C. Neighbours
D. Through Spouse
E. Through children
F. Through Hobbies / Spot
G. Previous employment
YEARLY INCOME
(In Rupees)
> 1 Lakh
> 1 Lakh but < 2.5 Lakhs
> 2.5 Lakhs but < 5 Lakhs
> 5 Lakhs
AGE
18 25 YEARS
26 35 YEARS
35 44 YEARS
OVER 45 YEARS
OCCUPATION Professional / proprietor
Manager / Executive
MARITAL STATUS Single
Married
ABILLITY TO
PROVIDE REFERALS
Good
Fair
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NAMESSUB
MI T
TED
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INTERVIEW: This project report is also affected by the interview method. The data is
also collected through the interview. Under this method we go through the
Telephone interview
Mail interview
Personal interview
Under the telephone interview is used when the information to be collected limited. This
method is suitable for inquiry about information just released or telecast by radio or
television.
Under the mail interview data is collected when the data is more important. Because there
is no interviewer in mail surveys to ask questions and record answers. It cannot be used to
conduct an unstructured study.
Under the personal interview data is collected through the door to door. This method is
very relevant and it is also very difficult task to collect the information. And takes much
time.
OBSERVATION METHOD: This project report is also suffered by the observation
method. Because some time it is also happened when the number of people was not ready
to give the relevant information used this techniques to collect the information.
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This observation is used when the research problem has been formulated precisely
and the researcher is told to observe the area of sturdy. The researchers are asked to
record their observations.
(B) SECONDARY DATA: under this project report data is also collected through the
secondary data. Under this source data is collected through the magazine, through the web
site, through the newspaper, through the other insurance organization.
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OBJECTIVES
5.0 OBJECTIVE OF THE STUDY:
The main objective of this study is found out the view of different people
about the unit-linked life insurance. And find out what they take insurance
advisors advise for their investment or not. If not indicate the people for their life
insurance and tells them why life insurance is necessary for every persons. There
are some reason which indicates why life insurance is necessary for every person
given below-
5.1 MARKETING OBJECTIVE:
The main marketing objective of this project report for the company is find out
marketing position of the life insurance and makes the present and future market
strategy of the company.
5.2 RESEARCH OBJECTIVE:
1. Identifying the sources of money or funds a p person has and what happens to
that money (where is goes) than
2. Determining the person short and long term priorities
3. Analyzing this information or ones can advice changes to the person financial
habits or enable him to achieve his goals.
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DATA ANALYSIS & INTERPRETATION
From the above questionnaire, we found number of findings and according to them
we can do analysis that which type of strategy should be adopted for improving the
earnings of the company given below-
QUESTION NO 1- How many people plan for their savings and investment?
YES NO
PEOPLE (IN %) 64% 36%
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0%
10%
20%
30%
40%
50%
60%
70%
YES NO
PEOPLE (IN %)
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QUESTION NO.2- How many people take help of professional advisor for their
investment?
0%
10%
20%
30%
40%
50%
60%
70%
YES NO
YES
NO
YES NO
PEOPLE (IN %) 35% 65%
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QUESTION NO. 3- Number of people save regularly for-
SAVING ALTERNATIVS PEOPLE IN %
RETIREMENT 15%
CHILDRENS EDUCATION 25%
CHILDRENS MARRIGE 40%
TAXATION 15%
OTHERS 5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
PEOPLE IN %
RETIREMENT
CHILDRENS
EDUCATION
CHILDRENS
MARRIGE
TAXATION
OTHERS
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QUESTION NO. 4 How many people save through insurance?
YES NO
PEOPLE (IN %) 35% 65%
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0%
20%
40%
60%
80%
100%
YES NO
PEOPLE (IN %
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QUESTION 5.Which feature of the mutual funds allure you most?
Diversification 42
Professional management 29
Reduction in risk and transaction cost 34
Helps in achieving long term goal 30
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6. According to you which is the most suitable stage to invest in mutual
funds?
Young unmarried stage 55
Young Married with children stage 32
Married with older children stage 21
Pre retirement stage 27
7. Are you availing the services of personal financial advisors?
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Portfolio review & investment
recommendation
43
Planning to achieve specific financial
goals
35
Managing assets in retirement 30
Access to specialists in areas such as tax
planning
27
9.
What is the major reason for using financial advisors?
Want help with asset allocation 42
Dont have enough time to make
own decision
23
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To explain various investment
options
37
Want to have surety about financial
goals
33
10.What is the major reason for not using financial advisor?
Have access to all resources needed 18
Believe advisors are too expensive 53
Unsure how to find a trustworthy
advisor
21
Want to be in control of own 43
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investments
SWOT ANALYSIS:
SWOT analysis of this company is given below-
7.1 STRENGTHS: Strength of this company is given below-
7.1.1 There is transparency in the scheme. The performance of the fund can be monitored
on daily or bi-weekly basis through the daily- declared NAV/ Unit prices and also
through the website of the company. At any given time you will k now the
accumulations under your policy due to the investment accruals.
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7.1.2 Normally any time after one to three years time depending upon the scheme, you
can chose to withdraw your money by partial or complete surrender of units. The
death benefit will be proportionately reduced.
7.1.3 You can surrender the policy and get a guaranteed surrender value.
7.1.4 You can also take a loan on a policy after three years duration.
7.1.5 You can switch from one stream of investment to the other every year by paying a
small fee according to your changing needs.
7.1.6 You can top up your premium anytime during the term to increase your benefits.
7.1.7 The plans are available as endowment whole life money back or as pension plans.
7.1.8 In fact some companies allow you to have the contract as long as you want without
a fixed term, even up to death.
7.1.9 The option of with or without profits is also available in some plans. Actually some
companies give a guaranteed bonus as a percentage of the sum assured as bonus
7.1.10 The normal riders such as accident benefit, disability benefit critical illness or major
surgical assistance covers are also available.
7.1.11 The policies are issued with the usual free-look provision.
7.1.12 One company has floated a unit-linked policy for women with a critical rider
benefit specifically covering some gynecological illnesses.
7.1.13 You can buy the policy with a single premium like a bond or pay premium by the
usual yearly, half-yearly or quarterly mode.
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7.1.14 Some companies offer even premium holiday option. If after paying premiums
for three years you are not able to pay the premium, the policy will be continued
adjusting the overdue premiums from your unit fund.
7.2WEAKNESS: Weakness of this company is given below-
7.2.1 The expenses deducted from the premiums especially in the first two years
considerably shrink the amount that goes towards your investment corpus.
7.2.2 The heavy frontloading of the effectively acts as a disincentive for early
withdrawals.
7.2.3 The unit-linked plans completely pass on the investment risk to the policyholder
and he has to be ever vigilant.
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7.3OPPORTUNITIES: Opportunities of this company is given below-
7.3.1 If unit-linked policies can be given section 88 benefits there is a valid reason that
investment in an ordinary mutual fund should also be given the same benefit, as
they are basically same except for the addition of insurance element in the unit-
linked policy.
7.3.2 The rear end tax-free benefit is a very attractive tax break for the unit-linked policy
as per the current tax laws.
7.3.3 The return by way of capital appreciation in mutual fund as well as from the sale of
stocks are taxed as capital gains with the indexation benefit, according to the
current tax laws. Only the dividends are tax-free.
7.4THREATS: Threats of this company is given below-
7.4.1 This is company is also suffered by the great market competition. There are number
of competitors of this company.
7.4.2 Another threat of this company is that the changing environment. Changing
environment means change in government, change in government policy, change
is competitors policy.
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CONCLUSION
Unit linked policies are a very valuable addition to the existing array of insurance
producers. But, when sold to a wrong prospect or brought a wrong agent it will
become useless. IRDA and the companies should take care that well- trained and
professional agents market these product.
In view of what was discussed above, the buyer if they need such plans according to
their risk appetite should select a known, well- informed agent who is reliable.
Agents who are already dealing with investment or saving instrument or mutual
funds, if they sell life insurance also would be a good choice. In case they hence
doubts about the availability of such agents, it would be more advisable to go to
corporate agent with a background in financial instruments or still better, to a good
broker who are likely to be better equipped than an ordinary agent. Continued
advice and guidance will be available with the corporate agent and the broker as
they are corporate entities.
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LIMITATION
Time limitation.
Research has been done only at Rajkot.
Some of the persons were not so responsive.
Possibility of error in data collection.
Possibility of error in analysis of data due to small sample size.
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RECOMMENDATION
By this project report there are the number of suggestion which can be given to the
company are given below-
9.1 Company should recruit well-informed, well-qualified, well-financial knowledge. So
that he will success to satisfy the potential customer for their investment or savings.
9.2 In fact, the contract to buy the product in my opinion is not the usual insurance contract
governed by the principle of unerimma fides but one of caveat emptor. Under the
principle of utmost good faith, the company expects the proposes to give all the
material facts so that it can charge the correct premium based on the factors of
risk presented.
9.3 How to deal with the situation? The companies or IDRA cannot educate the
policyholder. They should educate the agent.
9.4 Prospective unit-linked policy buyers should understand the structure of the plans , the
factors that determine how good their returns will be and the risks involved and
then figure out if they have the risk appetite, whether they can get better returns on
their investment elsewhere and whether their investment horizon matches the long
lock-ins over which these plans offer the best rewards.
9.5 Insurance companies will generally give you a picture on the basis of the past
performance of the fund but the past performance of the fund is never an indicator
of how the fund might perform in the future.
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9.6 Insurance companies allow you to shift from one fund to the other at any point of
time. This can be useful if you want to plan your investment based on your life
needs.
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BIBLIOGRAPHY
B00KS- C.R.KOTHARI, PHILIP KOTLER.
MAGAZINE- INSURANCE WATCH, INDIA TODAY, BUSINESS
TODAY, BUSINESS WORLD.
NEWS PAPER- THE TIMES OF NEW INDIA, HINDUSTAN
TIMES, ECONOMICS TIMES, BUSINESS --
STANDARD.
WEB-SITE- www.birlasunlife.com , www.google.com
http://www.birlasunlife.com/http://www.google.com/http://www.birlasunlife.com/http://www.google.com/