comparative study-of-ulip-plans-offered-by-icici-prudential-and-other-life-insurance-companies

A

PROJECT REPORT

ON

“A COMPARATIVE STUDY OF ULIP PLANS OFFERED BY ICICI PRUDENTIAL AND OTHER LIFE INSURANCE COMPANIES”

Submitted To:

PUNJAB TECHNICAL UNIVERSITY,JALANDHAR

FOR THE PARTIAL FULFILLMENT OF THE AWARD OF DEGREE OF MASTER OF BUSINESS ADMINISTRATION

(Session 2008-10)

UNDER GUIDANCE OF : SUBMITTED BY; Mrs. Sukhmeet kaur Dixit Kumar Roll No. : 80906317020

SVIET Contact no. - 09017076571

SWAMI VIVEKNAND INSTITUTE OF ENGINEERING AND TECHNOLOGY

PUNJAB TECHNICAL UNIVERSITY,JALANDHAR

www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.

Preface

MBA is a stepping-stone to the Management carrier and to develop good Managers is

necessary that the theoretical must be supplement with exposure to the real

environment.

Theoretical knowledge just provides the base and it’s not sufficient to produce a good

Manager that’s why the practical knowledge is needed.

Therefore the Research Project is an essential requirement for the student of MBA.

This research project not only helps the students to utilize his skills properly and learn

field realities but also provides a chance to the organization to find out talent among

the building Managers in the very beginning.

In accordance with the requirement of MBA course I have done my research project

on the topic “COMPARATIVE STUDY OF ULIP PLANS OFFERED BY ICICI

PUDENTIAL AND OTHER LIFE INSURANCE COMPANIES” with special

reference to ICICI Prudential.

www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/

2

http://www.troubleshoot4free.com/fyp/

http://www.final-yearprojects.co.cc/




Certificate by the Faculty Guide

GUIDE’S CERTIFICATE

This is to certify that Mr. /Ms. __________________bearing the Reg.

No. ____________ currently undergoing IVth Semester MBA in Swami

Vivekanand Institute of Engineering and Technology affiliated to Punjab

Technical University, Jalandhar he carried out a project on “A

COMPARATIVE STUDY OF ULIP PLANS OFFERED BY ICICI PRUDENTIAL

AND OTHER LIFE INSURANCE COMPANIES” under my guidance and

supervision and the work done by her is original and outcome of her

sincere efforts.

Mrs. Sukhmeet Kaur

Date: ----------

(PROJECT GUIDE)


3






INDEX

I. PREFACE

II. CERTIFICATE

III. EXECUTIVE SUMMARY

IV. LITERATURE REVIEW

Sr.no Title

Chapter-1 INTRODUCTION

Introduction - basics of insurance

Need of life of insurance

Roles of insurance

Types of life insurance

Chapter-2 INDUSTY PROFILE

Chapter-3 COMPANY PROFILE

Chapter-4 RESEARCH METHODOLOGY

Chapter-5 COMPARATIVE STUDY

Chapter-6 DATA ANALYSIS & INTERPRETATIONS

Chapter-7 LIMITATIONS

(i) RECOMMENDATIONS

(ii) CONCLUSION

(iii) BIBLIOGRAPHY

(iv) ANNEXURE


4







5






Literature Review

How a company does announced a name change especially when the old name was well known? How does the company explain itself to constituents who may have known the company quite well in an earlier incarnation but may be struggling to figure out what the new organization stands for? How can the company create a new image while retaining the strengths of the old one? And what role might corporate advertising play in all this? Corporate advertising can tell a story about a company as a whole, large organizations may need to use corporate ads to simplify their image in the minds of key constituents and to show what unifies the company, despite the geographical spread and variety of its businesses.

We can very well understand the concept of corporate advertising by taking the example of ICICI Prudential communication. When Company first began operations, the task was to present the visiting card of the company to the public at large and build credibility and stature and to give the consumer the confidence that ''here is a company that can be trusted to invest funds with.''This required a corporate campaign - to establish the brand, build awareness and give the brand a larger-than-life image.

The advertising idea, which was encapsulated in symbols of protection from the initial print campaign, culminated in the corporate film where sindhoor was used as an endearing and lasting symbol of protection. Once the corporate image and brand identity were established, and as the company expanded and its product range grew, the next phase of communication was to give theconsumer a rational and tangible reason to buy - first of all insurance and secondly from ICICI Prudential Life. This was tackled through product-specific advertising, such as for ICICI Pru Smart Kid, retirement solutions or LifeTime.

Key Summery

Create a good citizen image through consistent & dedicated effort.

Convey the organizations commitment to the concerned publics as well as to the masses & eliminate prejudices, if any held by opinion leaders in particular & by the public in general.


6






Boost both employee management relation & employee morale enabling all

Members of the internal public to discover a new vitality.

EXECUTIVE SUMMARY

Title of the project:

Study ULIP in current market scenario/ Study customer response towards ULIP

Objectives:

Working of the unit linked insurance plans

Swot analysis of the product

Comparative study of the competition

Study tax planning solutions available in the market

Study asset allocation through insurance plans

Market interface

Comparative analysis done on:

Life insurance corporation

HDFC Stan Life

Birla Sun Life

Bajaj Allianz

Research Methodology:


7





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.Primary data collected by personally visiting these leading insurance players. Eg:

LIC, Max New York Life Insurance, Bajaj Alliance, Birla Sunlife, HDFC Stan life.

Data Collection:

Primary data collected through direct intrection with customer.

Sample size 100 people.

Secondary database from different magazines.

First and foremost, accumulating information from newspapers ,

Journals, Magazines, and company webside.

Secondly, taking a sample size and doing a market survey by filling up

questionnaires from customers to find out what different companies are

offering in the ULIP section and how are they similar/different from ICICI

PRUDENTIAL products. Also keeping a track and taking down the

feedback regarding perception, attitude, taste and preferences of the

customer.

Thirdly, analyzing the data collected. Comparing the ULIP products

offered by other insurance players.

Critical analysis of consumer perception; their choice and preferences.

Eventually, deciding on how to familiarize ULIP products in the market

and what all safeguards need to be taken while approaching the customers.


8






CHAPTER-1


9






INTRODUCTION TO INSURANCE

LIFE INSURANCE GENERAL

Insurance is a system to alleviate financial losses by transferring risk of loss from

one entity to another.

‘Insurance’ is basically a sharing device. The losses to assets resulting from natural

calamities like fire, flood, earthquake, accidents, etc. are met out of the common pool

contributed by large number of persons who are exposed to similar risks. This

contribution of many is used to pay the losses suffered by unfortunate few. However

the basic principle is that loss should occur as a result of natural calamities or

unexpected events which are beyond the human control. Secondly insured person

should not make any gains out of insurance.

It is natural to think of insurance of physical assets such as motor car insurance or fire

insurance but often we forget that creator of all these assets is the human being whose

efforts have gone a long way in building up the assets. In that sense, human life is a

unique income generating assets. Unlike the physical assets, which decrease in value

with passage of time, the individual becomes more experienced and more matured as


10





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.he advances in age. This raises his earning capacity and the purpose of life insurance

is to protect the income in the event of his premature death. The individual himself

also needs financial security for the old age or on his becoming permanently disabled

when his income will stop. Insurance also has an element of savings in certain cases.

How insurance works?

Suppose there are 1000 persons all aged 35 years and healthy lives. They are insured

for one year against the risk of death. Each person is insured for Rs. 50,000. If the

past experience indicated that 4 out of 1000 persons, at this age are expected to die

during the year, expected amount of death claim to be paid to the family of four

persons would come to Rs. 2,00,000. The contribution to be paid by each of the 1000

persons will come to Rs. 200 per year. Thus, all the 1000 persons share loss caused to

the 4 unfortunate families. 996 persons who survived till one year have not lost

anything as they secured peace of mind and a feeling of security of their family.

While insurance cannot prevent accidents or premature death, it can help protect the

family of the decreased against the loss of income caused by the death of the main

breadwinner. In return for specified payments, insurance will provide protection

against the incidence of an uncertain event- such as premature death. The business of

insurance company called insurer is to bring together persons who are exposed to

similar risks, collect contribution (premium) from them on some equitable basis and

pay the losses (claims) to the unfortunate few who suffer.

Classification of Insurance

Insurance business can be divided into two broad categories, life and non-life. Life

insurance is concerned with making provision for a specific event happing to the

individual, such as death whereas non life (or general insurance) is more commonly

concerned with the provision for a specific event which affects a property, such as

fire, flood, theft etc. In this course we will only cover life insurance. So, let us now

move on to the definition of life insurance.


11





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.Definition of Life Insurance

According to the U.S. Life Office Management Association Inc. (LOMA), life

insurance is defined as follows: ‘Life insurance provides a sum of money if the person

who is insured dies whilst the policy is in effect”.

NEED FOR LIFE INSURANCE

Risks and uncertainties are part of life's great adventure -- accident, illness, theft,

natural disaster - they're all built into the workings of the Universe, waiting to happen.

Insurance then is man's answer to the vagaries of life. If you cannot beat man-made

and natural calamities, well, at least be prepared for them and their aftermath.

Insurance is a contract between two parties - the insurer (the insurance company) and

the insured (the person or entity seeking the cover) - wherein the insurer agrees to pay

the insured for financial losses arising out of any unforeseen events in return for a

regular payment of "premium".

These unforeseen events are defined as "risk" and that is why insurance is called a

risk cover. Hence, insurance is essentially the means to financially compensate for

losses that life throws at people - corporate and otherwise.

The principle of insurance works on the concept of a large number of people exposed

to a similar risk making a contribution to a common fund. Those who suffer losses

due to the occurrence of these events are compensated for them from this fund.


12






ROLE OF LIFE INSURANCE

Life Insurance As An Investment: -

Insurance is an attractive option for investment. While most people recognize the risk

hedging and tax saving potential of insurance, many are not aware of its advantages as

an investment option as well. Insurance products yield more compared to regular

investment options, and this is besides the added incentives offered by insurers.

You cannot compare an insurance product with other investment schemes for the

simple reason that it offers financial protection from risks, something that is missing

in non-insurance products. In fact, the premium you pay for an insurance policy is an

investment against risk. Thus, before comparing with other schemes, you must accept

that a part of the total amount invested in life insurance goes towards providing for

the risk cover, while the rest is used for savings.

In life insurance, unlike non-life products, you get maturity benefits on survival at the

end of the term. In other words, if you take a life insurance policy for 20 years and

survive the term, the amount invested as premium in the policy will come back to you

with added returns. In the unfortunate event of death within the tenure of the policy,

the family of the deceased will receive the sum assured.

Now, let us compare insurance as an investment options. If you invest Rs 10,000 in

PPF, your money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this

case, the access to your funds will be limited. One can withdraw 50 per cent of the

initial deposit only after 4 years.

The same amount of Rs 10,000 can give you an insurance cover of up to

approximately Rs 5-12 lakh (depending upon the plan, age and medical condition of

the life insured, etc) and this amount can become immediately available to the

nominee of the policyholder on death. Thus insurance is a unique investment avenue

that delivers sound returns in addition to protection.


13






TYPES OF LIFE INSURANCE PLANS

Life Insurance Plans:

Under Life insurance plans, ICICI Prudential offers plans under the following major need categories:

Education Insurance Plans Wealth Creation Plans Premium Guarantee plans Protection Plans

Education Insurance Plans

One of your most important responsibilities as a parent is to ensure that your child gets the best possible education that can be provided.

ICICI Prudential offers a wide portfolio of education insurance plans that are designed to provide peace of mind to you, as a parent, that your child's education will be secure. These plans ensure that money is made available at the crucial junctures in a child's education - Class X, Class XII, graduation and post-graduation - to fund crucial commitments for the child's future.

Importantly, education insurance plans ensure that in the unfortunate event of the death of a parent, the child's education continues unhampered.

Under the education insurance plans platform, ICICI Prudential brings the following products to you. Please click on the product name to know more about the plans.


14

Plan Name

SmartKid New Unit-linked Regular Premium

SmartKid New Unit-linked Single Premium

SmartKid Regular Premium

Plan Type

Unit Linked

Unit Linked

Traditional





http://www.iciciprulife.com/public/Life-plans/SmartKid.htm





http://www.iciciprulife.com/public/Life-plans/Protection-Plans.htm

http://www.iciciprulife.com/public/Life-plans/Premium-Guarantee-Plans.htm

http://www.iciciprulife.com/public/Life-plans/Wealth-Creation-Plans.htm

http://www.iciciprulife.com/public/Life-plans/Education-Insurance-Plans.htm


Wealth Creation Plans

Wealth Creation Plans give the customer the dual benefit of protection along with the potentially higher returns of market-linked instruments. The most important benefit of ULIPs is the flexibility they give the customer in choosing the premium amount and also choosing the underlying fund in which this money is to be invested. Wealth creation plans also offer the customer more liquidity options as compared to traditional plans. As such, ULIPs are ideal for customers who want the protection of a life cover to be allied to the returns of market linked instrument – giving them an unmatched combination of benefits.

Under the wealth creation platform, ICICI Prudential brings the following products to you. Please click on the product name to know more about the plans.

Plan Name

LifeTime SuperLifeLink Super PremierLife GoldLifeTime Plus

Plan Type

Unit Linked Unit Linked Unit Linked Unit Linked

Premium Guarantee Plans

The latest addition to the life insurance product portfolio of ICICI Prudential is the Premium Guarantee plan - InvestShield Life New. Premium Guarantee plans are the ideal insurance-cum-investment option for customers who want to enjoy the potentially higher returns of a market linked instrument, but without taking any market risk.

Under the Premium Guarantee Plans platform, ICICI Prudential brings to you the following products:


15





http://www.iciciprulife.com/public/Life-plans/Life-Time-Plus.htm

http://www.iciciprulife.com/public/Life-plans/Premier-Life-Gold%20.htm

http://www.iciciprulife.com/public/Life-plans/Life-Link-Super.htm

http://www.iciciprulife.com/public/Life-plans/Life-Time-Super.htm


Protection Plans

The sole objective of these plans, as their name indicates, is to serve the protection needs of the customer and by doing so, safeguard one’s family from the financial implications of unfortunate circumstances than one cannot foresee.

Under the Protection Plans platform, ICICI Prudential brings to you the following products:


16

Plan Name

InvestShield Life New InvestShield CashBak

Plan Type

Unit Linked Unit Linked

Plan Name

LifeGuard Save'n'ProtectCashBakHome Assure

Plan Type

Traditional TraditionalTraditionalTraditional





http://www.iciciprulife.com/public/Life-plans/Home-Assure.htm

http://www.iciciprulife.com/public/Life-plans/Cash-Bak.htm

http://www.iciciprulife.com/public/Life-plans/Save_n_Protect.htm

http://www.iciciprulife.com/public/Life-plans/Life-Guard.htm

http://www.iciciprulife.com/public/Life-plans/InvestShield-Cash.htm

http://www.iciciprulife.com/public/Life-plans/InvestShield-Life.htm


THE INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY (IRDA)

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body

in April 2000 has fastidiously stuck to its schedule of framing regulations and

registering the private sector insurance companies.

The other decision taken simultaneously to provide the supporting systems to the

insurance sector and in particular the life insurance companies was the launch of the

IRDA’s online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the

insurance companies would have a trained workforce of insurance agents in place to

sell their products, which are expected to be introduced by early next year. Since

being set up as an independent statutory body the IRDA has put in a framework of

globally compatible regulations. In the private sector 12 life insurance and 6 general

insurance companies have been registered.


17






WHY PRIVATE INSURANCE?

All the private companies have a lock in period of 3 yrs hence no disinvestments

possible.

Minimum net worth of 500 Cr required for acquiring license with a minimum paid

up capital of 100 Cr in their insurance venture.

Commitment to increase the paid up capital manifold in next five years.

Re insurance for all its policies worth more than 5 lakhs. Reinsurance partners,

best and the largest in the world – general cologne and Swiss reinsurance.

Audit of accounts by at least 2 independent approved auditors each year.

Products and pricing are cleared by IRDA, which looks into the financial visibility

of the product and the financial implication.

IRDA is now proposing a Pvt. Policy Protection fund.

Funds to be invested in only regulated and controlled areas with close to

80%being pumped into only gilts thereby assuring safety of funds.


18






CHAPTER-2


19






INDUSTRY PROFILE

Background In 1912, the Indian life insurance companies Act was passed . This was the first

comprehensive legislation in India to regulate the business of insurance. it had been

observed that the provisions of Indian Company’s Act did not meet the purpose. A

further legislation was passed in 1928, But a comprehensive legislation was passed in

1938. The amendments in the act were made in 1956 when insurance was nationalized

and LIC and GIC were formed.

Life insurance business was nationalized with effect from 19 January 1956

and 256 companies were merged. Insurance Act was further amended in 1999 and

IRDA was formed in view of the circumstances arising out of opening up of insurance

industry in 2000.IRDA authority to protect the interest of the holders of insurance

policies, to regulate , promote and ensure the working of all companies.

As we enter into the new millennium, economies of the world over are getting

redefined and remodeled with the new mindsets, new technologies, new riles and new

directions. Financial sector reforms received top priority ever since the Govt. of India

initiated the process of economic liberalization. These reforms are extending the

horizons of the financial services sector and have been transforming our capital

markets , banking and financial services industries.

In the last four decades , after nationalization of the insurance industry ,

certain socio-economic objectives were achieved through public ownership of the

insurance business. Yet, market oriented dynamism was missing as evidenced by the

lack of

product innovations, high premium rates and limited use of information

technology.


20





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.The insurance sector reforms have encouraged Blue-Bloods of Indian corporate sector

TATA,ICICI,HDFC,BIRLA,SBI,RELIANCE,KOTAK etc to tie up with world’s

largest insurance majors to capture slice of the country’s potential insurance market.

This has brought abuzz activities in insurance business. New players are wooing the

customer with promises of better services and customized products. The LIC and GIC

are countering the competition on the strength of their track records, distribution

networks and so on.

This new scenario will witness financially sound and experienced players

transforming the industry with best products in service and product development ,

operational efficiency, marketing capability, service plus and tech-savvy orientation.

As a result, the insurance business can become global with e-business applications.

It is awkward business playing value figures on people’s lives. It is almost as

awkward as selling the likelihood of an event people do not want crossing their minds

. in India, it is rather a shrub. For this reason alone life insurance is no ordinary

market. Under the pressure of competitors differentiate their offerings, insurers no

longer sell life insurance as a product that meets a basic need , many of them sell

though the appeal of a wide variety of add on benefits ranging from tax saving to

investment return, sometimes pitying more emphasis on these basic benefits.

This assumes significance because India is witnessing foreign

competition in this sector after a long monopoly period.

There is consensus on success becoming a function of market strategy.

So far the market has been shaped by LIC . it is only recently that private

insurers with 74:26 joint ventures between Indian and foreign companies have

been formed under the watch of IRDA. ICICI prudential, HDFC slandered life

and Max New York Life were first off the block, followed by Kotak


21






Mahindra, Royal Sundram,TATA Aig,Birla Sunlife,SBI Life and ING Vyasa

which were started later.

Sudden burst of competition itself is a unique occurrence. The Indian

market distinguishes itself in other ways too, most notably in the areas of

consumer perception and investment option. So it is worth which will the

market move and what could be the winning strategies. Basic premise is clear

that “life insurance is a specialized business”.


22






LIFE INSURERS

1. BAJAJ ALLIANZ LIFE INSURANCE CO.LTD.

2. BIRLA SUNLIFE INSURANCE CO. LTD.

3. HDFC STANDARD LIFE INSURANCE CO. LTD.

4. ICICI PRUDENTIAL LIFE INSURANCE CO. LTD.

5. ING VYSYA LIFE INSURANCE CO.PVT.LTD.

6. LIFE INSURANCE CORPORATION OF INDIA.

7. MAX NEWYORK LIFE INSURANCE CO. LTD.

8. METLIFE INDIA INSURANCE CO. PVT.LTD.

9. KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE CO.

LTD.

10. SBI LIFE INSURANCE CO.LTD.

11. TATA AIG LIFE INSURANCE CO.LTD.

12. AVIVA LIFE INSURANCE CO. LTD.

13. SAHARA LIFE INSURANCE CO. LTD.


23






Life Insurance Companies

ICICI Prudential Life Insurance Company Limited

ICICI Prudential Life Insurance Company Limited was incorporated on July

20,2000.The authorized capital of the company is Rs 2300 million and the paid up

capital is Rs 1500 million. The Company is joint of ICICI (74%) and Prudential

plc UK (26%)

The company was granted certificate of registration for carrying out life insurance

business, by the insurance regulatory and development Authority on November

24,2000.it commenced commercial operations on December 19, 2000,becoming

one of the first few private sector players to enter the liberalized arena. ICICI

Prudential collected Rs.1584 corers as their premium during 2004-05 & the

market share of ICICI pru. as per their premium is 5.63% as a whole but in the pvt

.co .ICICI hold 40% of market share.

ING VYSYA LIFE INSURANCE COMPANY PVT. LTD.

ING Vysya Life Insurance is a joint venture between three

pioneers, ING Insurance Vysya Bank.

ING Group: Over the last 150 years, ING Group has grown to become one of the

largest life insurance organizations in the world. Today it touches the lives of over

50 millions people across 65 countries. It offers a range of financial services

including insurance, pensions, banking and asset management. In the year

2000,total assets of the group stood at over INR 28,42000 corers.


24






KOTAK MAHINDRA LIFE INSURANCE COMPANY LTD.

Kotak Mahindra life Insurance Company Limited is a joint

venture between Kotak Mahindra Finance Ltd and Old Mutual.

Kotak Mahindra Finance Ltd.

Kotak Mahindra is one of the India’s leading financial

institutions, offering complete financial solution that encompasses every sphere of

life. From Banking, to stock Broking, to Mutual Funds, to Life Insurance, to

Investment Banking, the company caters to the financial needs of individuals and

corporates.

Old Mutual

Old Mutual, a company with over 157 years of experience in life

insurance business, has the largest financial services business in South Africa,

through its life assurance, asset management, banking and general insurance

operations. Being listed in London Stock Exchange and included in FTSE 100 list

of companies, old Mutual’s assets under management are worth $208 billion.

Tata AIG Life Insurance Company:

Tata AIG General Insurance Company Ltd and Tata AIG Life Insurance Company

Ltd (collectively “Tata AIG”) are joint venture companies between the Tata group

India’s most trusted industrial house and American International grouping (AIG), the

leading U.S based international insurance and financial services organization.

Both promoters have a deep and abiding interest in India’s Insurance sector. Prior to

nationalization, the Tanta’s pioneered private insurance in India when Sir Dorab Tata

set

up new India assurance in 1919.By 1973,when General Insurance was nationalized

the Tata company had a global presence with 56 overseas offices. Aig too has always


25





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.considered the Indian insurance sector to be of significance. The AIG companies

entered India in 1954 and had offices in several Indian cities prior to nationalization.

HDFC –Standard Life:

HDFC Standard Life Insurance company is a joint venture between India’s

largest housing finance provider, HDFC and Europe’s largest mutual life assurance

company The Standard Life Assurance Company (UK). HDFC Standard Life

Insurance Company Limited is the first private sector life insurance company to be

granted a license.

Standard Life, UK, found in 1825. The UK insurance industry for 175 years

by combining sound financial judgment with integrity and reliability. It is the largest

mutual life company in Europe and has total assets of Rs.5,50,000 crore sit is one of

the very few insurance companies in the world to have ‘AAA’ rating from two of the

leading international credit rating agencies, Moody and Standard and Poor’s. Standard

Life was recently voted ‘company of the decade’ in UK by the independent Brokers

called IFAs.

LIFE INSURANCE CORPORATION OF INDIA (LIC)

The Life Insurance Corporation (LIC) was established about 49 (in1956)

years ago with a view to provide an insurance cover against various risks in life .A

monolith then, the corporation, enjoyed a monopoly status and become

synonymous with life insurance.Its main asset is its staff strength of 1.24 lakhs

employees and 2048 branches and over six-lakh agency force. LIC has hundred

divisional offices and has established extensive training facilities at all levels .At

the apex, is the Management Development Institute, Seven Zonal Training centers

and 35 Sales Training Centers.


26






At the industry level, along with the Government and GIC, it has helped established

the National Insurance Academy. It presently transacts individual life insurance

businesses, group insurance businesses, social security schemes and pensions,

grants housing loans through its subsidiary; and markets saving and investment

products through its mutual fund. It payoff about Rs 6000 crore annually to 5.6

million policyholders. Market share of LIC which is 82.3%.By the LIC 1.09 crores

policies has been sold that was in the 2004-05 & the total premium that are

collected by LIC in 2004-05 was Rs.9007 crores.

ALLIANZ BAZAZ LIFE INSURANCE COMPANY

Allianz AG with over 110 years of experience in over 70 countries and Bajaj

Auto, trusted for over 55 years in the Indian market ,together are committed to

offering financial solutions.

Characterized by global presence with a local focus and driven by

customer orientation to establish high earnings potential and financial strength,

Allianz Bajaj Life Insurance Co Ltd was incorporated on 12 th March 2001.The

company received the insurance regulatory and development Authority (IRDA)

Certificate of Registration on 3rd August 2001 to conduct Life Insurance business in

India. The Market share of Bajaj Allianz in 2003-04 was .95% which has been

increases in 2004-05 and it is know 2.03% which depicts the financial position of

the co.


27






CHAPTER-3


28






COMPANY PROFILE

Overview

India’s Number One private life insurer, ICICI Prudential Life Insurance Company is a

joint venture between ICICI Bank-one of India’s foremost financial services

companies-and Prudential plc- a leading international financial services group

headquartered in the United Kingdom. Total capital infusion stands at Rs. 20.60 billion,

with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.

We began our operations in December 2000 after receiving approval from Insurance

Regulatory Development Authority (IRDA). Today, our nation-wide team comprises of

over 580 offices, over 234,000 advisors; and 22 bancassurance partners.

ICICI Prudential was the first life insurer in India to receive a National Insurer

Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row,

ICICI Prudential has been voted as India’s Most Trusted Private Life Insurer, by The

Economic Times – AC Nielsen ORG Marg survey of ‘Most Trusted Brands’. As we

grow our distribution, product range and customer base, we continue to tirelessly

uphold our commitment to deliver world-class financial solutions to customers all over

India.


29






The ICICI Prudential edge comes from our commitment to our customers, in all that we


Vision & Values

Our vision:

To make ICICI Prudential the dominant Life and Pensions player built on trust by

world-class people and service.

This we hope to achieve by:

Understanding the needs of customers and offering them superior products

and service

Leveraging technology to service customers quickly, efficiently and

conveniently

Developing and implementing superior risk management and investment

strategies to offer sustainable and stable returns to our policyholders

Providing an enabling environment to foster growth and learning for our

employees

And above all, building transparency in all our dealings.

The success of the company will be founded in its unflinching commitment to 5 core

values – Integrity, Customer First, Boundary less, Ownership and Passion. Each of the

values describe what the company stands for, the qualities of our people and the way

we work.

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

can play a significant role in redefining and reshaping the sector. Given the quality of

our parentage and the commitment of our team, there are no limits to our growth.

Our values :

Every member of the ICICI Prudential team is committed to 5 core values: Integrity,

Customer First, Boundary less, Ownership, and Passion. These values shine forth in

all we do, and have become the keystones of our success.

30






do – be it product development, distribution, the sales process or servicing. Here’s a

peek into what makes us leaders.

1. Our products have been developed after a clear and thorough understanding of

customers’ needs. It is this research that helps us develop Education plans that offer the

ideal way to truly guarantee your child’s education, Retirement solutions that are a

hedge against inflation and yet promise a fixed income after you retire, or Health

insurance that arms you with the funds you might need to recover from a dreaded

disease.

2. Having the right products is the first step, but it’s equally important to ensure that our

customers can access them easily and quickly. To this end, ICICI Prudential has an

advisor base across the length and breadth of the country, and also partners with leading

banks, corporate agents and brokers to distribute our products

3. Robust risk management and underwriting practices form the core of our business.

With clear guidelines in place, we ensure equitable costing of risks, and thereby ensure

a smooth and hassle-free claims process.

4. Entrusted with helping our customers meet their long-term goals, we adopt an

investment philosophy that aims to achieve risk adjusted returns over the long-term.

5. Last but definitely not the least, our 16,000 plus strong team is given the opportunity

to learn and grow, every day in a multitude of ways. We believe this keeps them

engaged and enthusiastic, so that they can deliver on our promise to cover you, at every

step in life.

Promoters

ICICI Bank

ICICI Bank (NYSE:IBN) is India’s second largest bank and largest private sector

bank with

over 50 years presence in financial services and with assets of over Rs 3446.58 bn


31






(USD 79 billion) as on March 31, 2007. The Bank offers a wide range of banking

products and financial services to corporate and retail customers through a variety of

delivery channels and through its 32pecialized subsidiaries in the areas of investment

banking, life and non-life insurance, private equity and asset management. ICICI Bank

is a leading player in the retail banking market and services its large customer base

through a network of over 950 branches and extension counters, 3300 ATMs, call

centers and internet banking (www.icicibank.com) to ensure that customers have access

to its services at all times.

Prudential Plc

Established in London in 1848, Prudential plc, through its businesses in the UK and

Europe, the US and Asia, provides retail financial services products and services to

more than 20 million customers, policyholder and unit holders and manages over £251

billion of funds worldwide (as of 31 December 2006). In Asia, Prudential is the leading

European life insurance company with life operations in China, Hong Kong, India,

Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand,

Vietnam. Prudential is the second largest retail fund manager for Asian sourced assets

ex-Japan as at June 2006. Its fund management business has expanded into a total of ten

markets : China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan,

Vietnam and United Arab Emirates.

Fact Sheet

THE Company

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank,

a premier financial powerhouse, and Prudential plc, a leading international

financial services group headquartered in the United Kingdom. ICICI Prudential

was amongst the

first private sector insurance companies to begin operations in December 2000


32





http://www.icicibank.com/


after receiving approval from Insurance Regulatory Development Authority

(IRDA).

ICICI Prudential's capital stands at Rs. 20.60 billion with ICICI Bank and

Prudential plc holding 74% and 26% stake respectively. As of March 31, 2007, the

company garnered Rs. 4,843 crore of weighted retail + group new business

premiums and wrote over 1.96 million retail policies. The company has assets held

to the tune of over Rs. 15,000 crore.

ICICI Prudential is also the only private life insurer in India to receive a National

Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind)

rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to

meet its obligations to customers at the time of maturity or claims.

For the past six years, ICICI Prudential has retained its position as the No. 1

private life insurer in the country, with a wide range of flexible products that meet

the needs of the Indian customer at every step in life. To know more about the

company, please visit

Distribution

ICICI Prudential has one of the largest distribution networks amongst private life

insurers in India. As of March 31, 2007 the company has over 580 offices across

the country and over 234,000 advisors.

The company has over 22 bancassurnace partners, having tie-ups with ICICI

Bank, Federal Bank, South Indian Bank, Bank of India, Lord Krishna Bank,

Idukki District Co-operative Bank, Jalgaon Peoples Co-operative Bank, Shamrao

Vithal Co-op Bank, Ernakulam Bank, 9 Bank of India sponsored Regional Rural

Banks (RRBs), Sangli Urban Co-operative Bank, Baramati Co-operative Bank,

Ballia Kshetriya Gramin Bank, The Haryana State Co-operative Bank.

Flexible Rider Options

ICICI Pru Life offers flexible riders, which can be added to the basic policy at a

marginal cost, depending on the specific needs of the customer.

1. Accident & disability benefit: If death occurs as the result of

an accident during the term of the policy, the beneficiary

receives an additional amount equal to the rider sum assured

under the policy. If an accident results in total and permanent


33






disability, 10% of rider sum assured will be paid each year,

from the end of the 1st year after the disability date for the

remainder of the base policy term or 10 years, whichever is

lesser. If the death occurs while traveling in an authorized

mass transport vehicle, the beneficiary will be entitled to twice

the sum assured as additional benefit.

2. Critical Illness Benefit: protects the insured against financial

loss in the event of 9 specified critical illnesses. Benefits are

payable to the insured for medical expenses prior to death.

3. Waiver of Premium: In case of total and permanent disability

due to an accident, the future premiums continue to be paid by

the company till the time of maturity. This rider is available

with LifeTime Super, LifeTime Super Pension and CashPlus.

About the Promoters

ICICI Bank (NYSE:IBN) is India's second largest bank and largest private sector

bank with over 50 years presence in financial services and with assets of over Rs

3446.58 bn (USD 79 billion) as on March 31, 2007. The Bank offers a wide range

of banking products and financial services to corporate and retail customers

through a variety of delivery channels and through its specialised subsidiaries in

the areas of investment banking, life and non-life insurance, private equity and

asset management. ICICI Bank is a leading player in the retail banking market and

services its large customer base through a network of over 950 branches and

extension counters, 3300 ATMs, call centers and internet banking

www.iciciprulife.com to ensure that customers have access to its services at all

times.

Established in London in 1848, Prudential plc, through its businesses in the UK

and Europe, the US and Asia, provides retail financial services products and

services to more than 20 million customers, policyholder and unit holders and

manages over £251 billion of funds worldwide (as of 31 December 2006). In Asia,

Prudential is the leading


34





http://www.iciciprulife.com/


European life insurance company with life operations in China, Hong Kong, India,

Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand,

Vietnam. Prudential is the second largest retail fund manager for Asian sourced

assets ex-Japan as at June 2006. Its fund management business has expanded into

a total of ten markets : China, Hong Kong, India, Japan, Korea, Malaysia,

Singapore, Taiwan, Vietnam and United Arab Emirates.

The ICICI Prudential Life Insurance Company Limited Management team comprises reputed people from the finance industry both from India and abroad.

Ms. Shikha Sharma, Managing Director & CEO Mr. N. S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director Ms. Anita Pai, EVP – Customer Service & TechnologyMr. Azim Mithani, Chief Actuary Mr. Puneet Nanda, Chief Investments Officer Mr. Binayak Dutta, Chief – Sales and distribution

Mr. N. S. Kannan Executive DirectorICICI PrudentialLife Insurance Company Limited

N. S. Kannan joined ICICI Prudential Life Insurance Company Ltd as Executive Director

in August 2005, where he has overall responsibility for sales, marketing, investments,

group business and business intelligence. Prior to joining ICICI Prudential, Kannan was

the Chief Financial Officer and Treasurer of ICICI Bank Limited where he was

responsible for investor relations and for the finance, performance management, accounts,

taxation, risk management, secretarial and credit middle office functions. The treasury

operations of ICICI Bank include Balance Sheet Management and Asset and Liability

Management. ICICI Bank is the second largest bank in India with an asset base of about


35





http://www.iciciprulife.com/public/About-us/ProfileTeam-BinayakDutta.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-PuneetNanda.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-AzimMithani.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-AnitaPai.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-BhargavDasgupta.htm

http://www.iciciprulife.com/public/About-us/ProfileTeam-ShikhaSharma.htm


US$ 55 billion. The bank is listed on Indian national stock exchanges and the New York

stock exchange. Kannan joined ICICI group in 1991 as a project officer. During his

tenure at ICICI group, he has handled project finance operations, infrastructure financing,

structured finance and treasury operations. Prior to his current assignment, he has headed

the Telecom & Transportation group and Structured Finance group of the bank.Kannan is

a postgraduate in management from the Indian Institute of Management, Bangalore with a

gold medal for best all-round performance. He is also a Chartered Financial Analyst from

the Institute of Chartered Financial Analysts of India and an Honours graduate in

Mechanical Engineering. His work experience includes 3 years of industrial experience

with a large engineering group in India.

SWOT ANALYSIS OF ICICI PRUDENTIAL

STRENGTHS

ICICI PRUDENTIAL is the largest private player in the insurance industry in

India, with a market share of around 36% amongst the private players.

ICICI PRUDENTIAL has deposited a paid up capital of Rs. 925 crores with

IRDA as a caution deposit, the highest amongst all the life insurance

companies in India whereas LIC has deposited only 60 crores so far.

ICICI PRUDENTIAL is the first life insurance company to offer ECS debit

facility.

ICICI PRUDENTIAL is the first company to introduce unit linked life

insurance and pension products. Presently the maximum numbers of ranges

are under ULIP like life insurance, investment as well as pension plans.

Its Venture funds management co. Ltd is India’s largest venture capital

company.

PRODUCTS:

Flexibility to switch your fund value at your own discretion 4 times a

year

Viz Maximiser, Protector, Balancer, Preserver.


36






Greater transparency- policyholder knows what is happening to his

money and where the company has invested the money.

Liquidity option: you can make partial or complete withdrawals

anytime after 3 years.

Life insurance plans are eligible for deduction under Sec. 80C.

The proceeds or withdrawals of life insurance policies are exempt

under Sec 10(10D), subject to norms prescribed in that section.

Riders are provided to give the policyholder the additional protection

at marginal cost- Accident and Disability rider, Critical Illness Rider,

Accidental benefit rider.

Loan against the policy: After the policy has acquired a surrender

value one can avail loan against the policy.

WEAKNESSESIndustry in nascent stage.

Rural areas still not covered.

Not very well known among the Indian population.

Lack of credibility in the public because ICICI being a private player.

Premiums are high as compared to its competitors.

Very few branches in the country.

PRODUCTS:

The policy doesn’t have the surrender option before the 3rd year.

Plan do not offer any guarantee or assured return

The product profile is not very comprehensive.

Mortality, management and administrative charges are sky-scraping as

compared to its competitors.

OPPORTUNITIES

Liberalization of Indian economy.

As the industry is growing the whole market is virgin.

The whole private sector is open to be tapped even though the competition is

fierce from government owned insurance companies.


37






It’s a volume business that is even if the company has few good corporates

the turnover ceases to increase by manifold.

PRODUCTS:

Preserver fund looks good due to comfortable liquidity in the economy

and there is little chance of any hike in short-term rates by RBI.

Finance minister unveiled a budget-favoring consumer spending,

boosting demand and therefore higher economic growth

THREATS

The Govt. players will become aggressive thus growth is going to be tough.

Entry of other new players is not ruled out

Apprehension towards ICICI PRUDENTIAL being a private life insurance

company.

We expect the industry to rationalize in future that is mergers and acquisitions

will happen which will impact the industry and ICICI PRUDENTIAL

fortunes.

PRODUCTS:

Past performance of these plans is not indicative of the future performance

of the plan

The sum invested in the funds is subject to market risks and there can be

no assurance that the objective of the plans will be achieved.

All benefits payable under the policy are subject to the tax laws and other

financial enactment, as they exist from time to time


38






MEANING OF ULIP

A policy, which provides for life insurance where the policy value at any time varies

according to the value of the underlying assets at the time. ULIP is life insurance

solution that provides for the benefits of protection and flexibility in investment. The

investment is denoted as units and is represented by the value that it has attained

called as Net Asset Value (NAV).

A ULIP structure looks like as follows:


Unit linked insurance plans

Units in funds

Underlying investment

39

Contribution






FEATURES OF ULIP

ULIP distinguishes itself through the multiple benefits that it provides to the

consumer. The plan is a one-stop solution providing:

· Life protection

· Investment and Savings

· Flexibility

- Adjustable Life Cover

- Investment Options

· Transparency

· Options to take additional cover against

- Death due to accident

- Disability

- Critical Illness

- Surgeries


Less charge

Investment represented as units

Life cover

40





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.· Liquidity

· Tax planning

The two strong arguments in favour of unit-linked plans are:

Firstly, the investor knows exactly what is happening to his money

Secondly it allows the investor to choose the assets into which he wants his

funds invested.

An investor in a ULIP knows how much he is paying towards mortality, management

and administration charges. He also knows where the insurance company has invested

his money.

The investor gets exactly the same returns that the fund earns but he also bears the

investment risk. The transparency makes the product more competitive. So if you are

willing to bear the investment risks in order to generate a higher return on your

retirement funds ULIPs are for you. Traditional ‘with profits’ policies too invest in

the market and

generate the same returns prevailing in the market. But here the insurance company

evens out returns to ensure that policyholders do not hold money in a bad year. In that

sense they are safer. ULIPs also offer flexibility. For instance a policyholder can ask

the insurance company to liquidate units in his account to meet to mortality charges if

he is unable to pay any premium installment. This eats into savings but ensures that

the policy will continue to cover his life.

ULIP came into play in the 1960s and became very popular in Western Europe and

Americas. The reason that is attributed to the wide spread popularity of ULIP is

because of the transparency and the flexibility which it offers. Unit- linked plans are a

contemporary product: transparent and flexible. Individuals have greater control over

their investments. The popularity of ULIPS stems from the fact that they offer

customers “integrated financial solutions with a transparent charge structure”. In

today’s times, ULIP provides solutions for insurance planning, financial needs,

financial planning for children’s future and retirement planning. Unit-linked insurance

plans (ULIPs) have become something of a rage with their 'promise' of market-linked

returns combined with the dual benefit of insuring your life from eventualities.

Why do insurers prefer ULIPs?


41





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.Insurers love ULIPs for several reasons. Most important of all, insurers can sell these

policies with lesser capital of their own than what would be required if they sold

traditional policies. In traditional ‘with profits’ policies the insurance company bears

the investment risk to the extent of insured amount. In ULIPs the policyholder bears

most of the investment risk. Since ULIPs are designed to mobilize savings, they give

insurance companies an opportunity to get a large chunk of asset management

business which has been traditionally dominated by mutual funds. ULIPs are suitable

for individuals who are already adequately insured and are reasonably well-informed

and savvy to take active investment decisions by using the `switch option' that is

provided to a ULIP policyholder. Also policyholders with regular endowment plans

who are not satisfied with the 4-6% returns can consider taking a ULIP with a lower

equity component. It is best if insurance-seekers tread the middle path and choose

balanced plans (with about 50-60% equity

component). Ideally they need to avoid taking the aggressive 100% equity ULIP,

which could needlessly expose their assets to market volatility. So if insurances-

seekers/investors play their cards right, they can make this marriage work.

WORKING OF UNIT LINKED INSURANCE PLANS

UNIT LINKED PLANS

SUPER SMART KID

SmartKid offers an exclusive choice of 3 education insurance plans: SmartKid New Unit-linked Regular Premium, SmartKid New Unit-linked Single Premium and SmartKid Regular Premium. Take a look at the features and benefits of each plan:

1. SmartKid New Unit-linked Regular Premium

SmartKid New Unit-linked Regular Premium is a unit-linked plan, which enables you and your child to accumulate wealth by virtue of the performance of the underlying market-linked instrument. Take a look at the features of the plan:

Premium: The minimum premium to be invested is Rs. 10,000 per annum. After deducting premium allocation charges from the premium, the remaining amount will be invested in a fund of your choice.

Sum Assured: The minimum Sum Assured that the policyholder can opt for is Term * Annual Premium/2, subject to a minimum of Rs 1 Lac


42






Policy term: The term of the policy will be calculated as the difference between your child's current age and the age of your child when the policy matures.

Mortality, Policy Administration charges: These and other charges will be deducted from the units in the fund.

2. SmartKid New Unit-linked Single Premium

SmartKid New Unit-linked Single Premium works in much the same way as SmartKid New Unit-linked Regular Premium policy mentioned above. The only different feature is the premium amount-you will be required to pay only a single premium, which starts at as low as Rs. 50,000.

Additional Features and Benefits Common to All 3 Plans

Regular payouts: As your child approaches key educational milestones such as 12th

standard or graduation exams, he or she will receive regular payouts, guaranteeing he or she continues to study, no matter what the circumstance.

Death Benefit: Your child will receive the Sum Assured immediately, should something happen to you. ICICI Prudential will pay the remaining premiums, ensuring your child continues to receive policy benefits, as always.

Income Benefit Rider: You can choose to add the benefits of this rider to your child's education plan. Should you depart before your son's or daughter's education is complete, you child will receive 10% of Rider Sum Assured, for the balance term of the policy.

Add-on riders: 'Accidental Death and Disability Rider' and 'Waiver of Premium Rider' ensure your child stays doubly protected, at all times. You can choose to add these to your child's education policy.

Tax benefits: Premiums you pay for a SmartKid policy are eligible for tax savings [u/s 80(C)]. Maturity and death benefits are eligible for tax exemptions [u/s 10(10D)].

3. SmartKid Regular Premium

Flexible investment option: Choose the amount of premium with which you wish to safeguard your child's education.

Flexible policy tenure: The tenure of the plan will be calculated as the difference between your child's current age and his or her age at which the policy matures.

Flexible premium options: The premium will be calculated based on 3 factors: Sum Assured, policy tenure and your age. Guaranteed bonus: A guaranteed bonus of 3.5% per annum is declared for the first 4 premium paying years plus an annual vested bonus declared in subsequent years.


43






LifeLink Super

Well-deserved financial incentives, rewarding business profits and even ancestral money are precious amounts that you should invest immediately so they earn you potentially higher returns in the long run.

Invest in ICICI Prudential's LifeLink Super policy-a single-premium unit-linked policy

that works best for investors who have in mind long-term financial goals, such as the education of a child or the purchase of a larger home.

Apart from the potentially higher returns that you can earn, LifeLink Super insures your family against misfortunes with its protective insurance cover.

Read more about the features and benefits of this plan, right away.

LifeLink Super at a glance

Features and benefits of LifeLink Super

2 options of Sum Assured: Choose to receive either 125% or 500% of the single


44

Minimum/Maximum Entry Age

Maximum Age at Policy Maturity

Minimum Policy Term

Minimum Single Premium

Minimum Sum Assured

Tax Benefit

0 years to 65 years

70 years

5 years

Up to age 44: Rs. 25,000, age 45 and above: Rs. 50,000Annual Premium x Term/2. Subject to a minimum of Rs. 1,00,000

Premium payment up to 20% of the Sum Assured is eligible for benefit under Sec. 80C. Any amount paid to you will be eligible for tax benefits under Sec. 10 (10D) exemption, if premium paid in any year does not exceed 20% of the Sum Assured.






premium amount.

Flexible policy term: Decide how long you wish to invest in this policy. You can invest for a minimum of 5 years and keep your investment growing for as long as you wish after that.

Partial withdrawal of money: Withdraw funds in installments from the 4th year onwards.

Attractive premium allocation rates: Enjoy 100% allocation for premium amounts equal to or greater than Rs. 5 lacs.

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

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

Switch benefit: Switch between funds anytime to maximize on market movements. You can switch funds 4 times a year, at no cost. For subsequent switches, you will be required to pay a switch fee of Rs. 100.

Maturity benefit: Receive the Fund Value when your policy matures. Choose to take this value as a single lump-sum amount or in monthly, bi-annual or annual installments spread over 1 to 5 years.

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

Why LifeTime Super

As an individual who desires a lot from life-a car, a beautiful home and of course, the comfort and contentment of your family-you would undoubtedly want to plan your finances such that you can take care of all your requirements.

Invest in ICICI Prudential's LifeTime Super policy-a regular-premium unit-linked policy, which offers potentially higher returns that systematically enable you to meet your long-term financial objectives. In addition, LifeTime Super also provides the protective benefit of an insurance cover, which keeps your family secure, always.

Read more about the features and benefits of this plan.


45






LifeTime Super at a glance

Features and benefits of LifeTime Super

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

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

6 investment funds: Select among Flexi-Growth, Maximiser, Flexi-Balanced, Balancer, Protector, and Preserver, based on your financial goals and risk profile. Systematic withdrawal of money: Withdraw money in installments from the 4th year onwards.

Maturity benefit: Receive the Fund Value when your policy matures. Choose to take


46

Minimum/Maximum Entry AgeMaximum Age at Policy Maturity

Minimum/Maximum Policy TermPremium Payment FrequencyMinimum Premium

Minimum Sum Assured

Tax Benefit (8)

0 years to 65 years75 years10 years to 75 yearsMonthly, half-yearly, yearlyRs. 18,000 per annumAnnual Premium x Term/2. Subject to a minimum of Rs. 1,00,000

Premium paid for the policy and critical illness benefit rider will be eligible for tax benefit under Sec. 80C and 80D respectively. Any amount paid to you will be eligible for tax benefits under Sec. 10 (10D) as per prevailing Income Tax laws.






this value as a single lump-sum amount or in monthly, bi-annual or annual installments.

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

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

ROLE OF AN ADVISOR IN UNIT LINKED INVESTMENT

PLANS

It is important for us to know that what is the role that an advisor will play. At ICICI

Prudential, you are an advisor is to

1. Provide ongoing financial advice for his/her clients: You are an advisor and just

like a lawyer or a doctor you advice the client about insurance and finance.

2. Identify future clients: Life insurance is a business of contacts an the advisor

constantly need to know people so that his business expands.

3. Constantly make appointments: Just making contacts will not be enough to

develop a good life insurance business.

4. Advisor needs to meet these contacts and thus should make appointments on

constantly.

5. Conduct financial review meetings with prospects/ clients: As an advisor it is

necessary to meet with client not only for the purpose of selling but also to

review the need of the client and prospects. Many people would not be in for life

insurance today but as time moves they can be requiring one. Similarly an

existing client may also be in need of more insurance as responsibilities and

liabilities increase.

Close sale:

Ultimately success is defined as sales. The advisor should lead each

appointment towards a sale and close it effectively where in the client is happy

on purchasing the insurance solution and feels satisfied with it.


47






CHAPTER-4

RESEARCH METHODOLOGY


48






Research Methodology has many dimensions, it include not only research

methods but also considers the logic behind the methods used in the context of the

study and explains why only a particular method of technique had been used so that

research lend themselves to p[roper evaluations. Thus in a way it is a written game

plan for concluding research therefore in order to solve research problem it is

necessary to design a research methodology for the problem as the same may differ

from problem to problem. Research design is the conceptual structure within which

the research is conducted. Its functions are to provide for the collection of relevant

evidence with minimum expenditure of effort, time and money. But, how this can be

achieved depends on the research purpose. In my study the research purpose is

exploratory study i.e. to gain familiarity with phenomena or to achieve new insights in

it.

MARKET RESEARCH DESIGN : Descriptive type

DATA SOURCES : Primary source

RESEARCH APPROACH : Survey method

RESEARCH INSTRUMENT : Questionnaire

TYPE OF QUESTIONS : Close-ended

SAMPLE SIZE : 100 samples

MODE OF COLLECTING DATA: Respondents to be chosen randomly.

SAMPLE DESIGN:

Social phenomenon being very vast, it becomes impossible to contact each and every

individual of population due to limitation of essential resources like time and money.

Therefore, the study is preferably narrowed down to a representative sample to make

the study more manageable. Quota sampling is adopted in the exploratory study. It is

a non-probability study in which various insurance players are taken.

SAMPLING UNIT:

The data can be collected from primary sources. The basic premises of my study are

primary data but at the same time it is supplemented with the secondary data.

Sampling unit is a unit which would be considered for the purpose of study to conduct

the comparative study of the ICICI Prudential and other insurance companies with

special reference to Unit Link Plans.


49





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.SAMPLING SIZE:

It refers to the number of items to be selected from the universal, to constitute a

sample. To commence the study various insurance players are taken.

HOW DID I GO ABOUT THE PROJECT:-

SAMPLE SIZE

A sample size of 100 customers was selected to do this project, which was random

sampling keeping in mind the basic criteria.

FIELD WORK

The research was done for a period of 2 months in (students, government employee &

other) ambala. I started with MY MARKET 100 and thereafter I used to give cold

calls from the company’s database and if seemed interested I take along with me the

representatives of the company for further information gathering.

1) Study of Secondary Data: The quickest and the most economical way for

researchers to find possible hypothesis is to take the advantage of the work done

earlier and thus utilize their efforts.

2) In-depth Interviews: I used in-depth interviews because it attempts to influence

respondents to talk freely about their subject of interest .A formal questionnaire

was made and according to which the questions were asked to the respondents.

Basic methods of collecting Primary Data:

1) Questionnaire Method: The questionnaire used by me for the purpose of data

collection were of structured type (Non-disguised).

2) Contact Method: In order to derive information from the intended organization,

it was elementary for me to search for a link which could enable me to conduct a

research in that organization.

OBJECTIVE OF THE STUDY


50





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.The project undertaken by me as a part of my Summar Training of M.B.A.course is an

effort made to study the ULIP policies and activities in ICICI PRUDENTIAL with

special emphasis on unit linked products of the company.

In this era of cut throat competition, any organization needs to select and retain the

best talent. People selected should have positive attitude, ability to inspire others and

must be dynamic.

The main objectives of this study are:

Working of Unit linked Insurance Plans

SWOT analysis of the product sold

Comparative study with the competitor.

Study tax planning solutions available in the market.

Study asset allocation through insurance plans.

Market interphase.


51






CHAPTER-5

COMPARATIVE STUDY WITH THE


52






COMPETITORS

LIST:

LifeTime Super Vs LIC BimaPlus

LifeTime Super Vs Birla SunLife Classic Life

LifeTime Super Vs HDFC Linked

PremierLife Vs Bajaj Allianz Unitgain Plus


53






LIFETIME SUPER VS LIC BIMAPLUS

Features LifeTime Super LIC BimaPlus

Age 0 – 60 years 12 - 55 years

Term Minimum premium payment term of

3years 10 years

Sum Assured Choose your sum assured, subject to

a minimum sum assured of Rs. 1

lakh

Maximum limit upto Rs. 2 lakhs

Survival benefit Value of units (3rd year onwards) Bid Value of the fund units

along with maturity bonus at 5%

of the Sum Assured

Death benefit Higher of Sum Assured or value of

units.

Death during the first 6 months -

30% of SA + value of units, next

6 months - 60% of SA + value

of units. Death after 1st year -

SA + value of units. Death

during the 10th year - 105% of

SA + value of units.

Withdrawal benefit Partial or complete withdrawals are

available from the 3rd year onwards

Premature withdrawal allowed

after one year (after applying

bid-offer spread.

Contribution Minimum: Rs. 18,000 p.a. Not specified

Flexible

contribution

Flexibility to increase or decrease in

contribution Not available

Investment options Maximiser, Balancer, Protector &

Preserver. Balanced, Secured & Risk

Increase / Decrease

of death benefit

Available. Not available

Bonus units Available Not Available.

Top-up Available. Minimum top-up of Rs.

5000. Charges - 1% of top-up.

Available (Charges: 1.5% of the

top-up)


54






Switch

4 free switches a year, with the

minimum switch amount being Rs.

2000.

No free switches. Cost of

switching is 2% of the fund

value.

Surrender value The policy will acquire a surrender

value after 3 complete premium-

paying years. The surrender value is

100% of the value of investments.

Partial surrender up to 50% of

bid value of units allowed after

3 years from date of

commencement

Initial Charge % Allocation of the premium Not Disclosed

18000- 49,999: 1st year - 80%; 2nd

year - 92.5% ; 3rd year onwards -

96%.

50000 and above: 1st year - 82%;

2nd year - 92.5%; 3rd year onwards -

96%.

Admin Charge None Not applicable

Other Charges Not applicable Not applicable

Fund Management

Charges

The annual administrative and fund

management charge is 2.25% for

Maximiser, 2.25% for Balancer,

1.50% for Protector & 0.75% for

Preserver. 1% of the fund per annum

IFETIME SUPER VS HDFC LINKED

Features LifeTime Super HDFC Linked


55






Age 0 - 60 years 18 - 60 years

Term Minimum premium payment term of

3years

10 - 30 years

Sum Assured Choose your sum assured, subject to

a minimum sum assured of Rs. 1

lakh

Only 5,10, 20 (age-based)

multiples are allowed as Sum

Assured.

Survival benefit Value of units (3rd year onwards) Value of units

Death benefit Higher of Sum Assured or value of

units.

Higher of Sum Assured or value

of units.

Withdrawal benefit Partial or complete withdrawals are

available from the 3rd year onwards

Partial withdrawal available

from the 3rd year onwards,

provided that the Value of Units

does not go below the Sum

Assured.

Contribution Minimum: Rs. 18,000 p.a. Minimum: Rs. 10,000 p.a.

Flexible

contribution

Flexibility to increase or decrease in

contribution.

Available


Preserver.

5 Fund Options- Balancer,

Defensive Managed, Safe

Managed, Liquid & Growth

Increase / Decrease

of death benefit

Available. Not available

Bonus units Available Not available



Available

Switch 4 free switches a year, with the

minimum switch amount being Rs.

2000.

Switches are free as of now. But

the company reserves the right

to put a charge on the switches.


value after 3 complete premium-

paying years.

The surrender charge is 25% of

3 years outstanding regular

premium. No charges after 3

years

Initial Charge % Allocation of the premium Charges


56






18000- 49,999: 1st year - 80%; 2nd

year - 92.5%; 3rd year onwards -

96%.

1st yr-27%, 2nd yr- 27%, 3rd yr

onwards- 1%

50000 and above: 1st year - 82%;

2nd year - 92.5%; 3rd year onwards -

96%.

Admin Charge None Admin charges of Rs.180 fixed

charge per annum.

Other Charges Not applicable Not applicable

Fund Management

Charges

The annual administrative and fund

management charge is 2.25% for

Maximiser, 2.25% for Balancer,

1.50% for Protector & 0.75% for

Preserver.

Investment charge of 0.80% of

the Fund Value across all the

funds.

Rider ADBR, CIBR & MSAR ABR & CIBR

SUPER PREMIER LIFE VS BAJAJ ALLIANZ UNITGAIN PLUS

Features Super Premier Life Bajaj Allianz Unitgain Plus

Age 18 - 60 years 0 - 60 years

Term Premium paying term of 3 years, 5 Minimum premium payment


57






years, 7 years or 10 years. term of 3 years

Sum Assured Sum Assured multiple is 1 - 25 times

the annual premium

Minimum Sum Assured is 5

times the premium paid.

Survival benefit Value of units Anytime after payment of 3

full year's premiums.

Death benefit Higher of Sum Assured decreased by

the amount of withdrawals made or

value of units.

Higher of Sum Assured or

value of units

Withdrawal benefit Partial withdrawals are available after

the 3rd policy year and after payment

of 3 years' premiums. Complete

withdrawals are available after the 1st

year premium. However surrender

penalties will apply.

Partial or complete

withdrawals are available after

the 3rd years contribution

Contribution Minimum: Rs. 60,000 p.a. Minimum: Rs. 10,000 p.a.

Flexible

contribution

Available

Available


Preserver.

Equity Index Fund, Equity Plus

Fund, Debt Fund, Balanced

Fund, Cash Fund

Decrease in death

benefit

Available. Available

Bonus units Available. Not available



Available. Charge are 2% of

the top-up amount

Switch 4 free switches a year. Three free switches every year.


value from the 1st year onwards.

Withdrawals are only allowed

after payment of 3 full year's

premiums

Initial Charges % Allocation of the premium % Allocation of the premium

3 year premium paying term 1st year - 76%; 97% from year

2 onwards

Rs. 60.000 - Rs. 4,99,999: 1st year:


58






87%; 2nd and 3rd year: 96%

Rs. 5,00,000 and above: 1st year: 89%;

2nd and 3rd year: 96%

5, 7 and 10 year premium paying term

Rs. 60.000 - Rs. 4,99,999: 1st year:

88%; 2nd and 3rd year: 97%; 4th and

5th year: 98%;6th year onwards: 100%

Rs. 5,00,000 and above: 1st year: 90%;

2nd and 3rd year: 97%; 4th and 5th

year: 98%; 6th year onwards: 100%

Admin Charge Admin charge of Rs. 60 / month Annual admin charges of Rs.

20

Fund Management

Charges

The annual investment charge is 1.50%

for Maximiser, 1.00% for Balancer,

0.75% for Protector & Preserver.

1.5% p.a. for a Equity Plus

Fund, 1% p.a. for Equity Index

Fund, No specific charges in

case of Balanced Fund, 0.7%

p.a. for Debt Plus Fund and

0.7% in case of Cash Plus

Fund.

Rider ADBR & CIBR ABR, ADBR, CI & Hospital

Cash Benefit

STUDY TAX PLANNING SOLUTIONS AVAILABLE IN THE MARKET

TAX BENEFITS ON INSURANCE AND PENSION


59





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.Life insurance and retirement plans are effective ways of saving taxes. The tax breaks

that are available under various insurance and pension policies are described below:

Life insurance plans are eligible for deduction under Sec. 80C

Pension plans are eligible for a deduction under Sec. 80CCC

Health riders are eligible for deduction under Sec. 80D

The proceeds or withdrawals of life insurance policies are exempt

under Sec 10(10D), subject to norms prescribed in that section.

Tax Rates for Individuals

The rates of income tax for FY 2007-08 are as follows:

Total Income (Rs.) Rate of tax

Senior citizen Women below 65

years

Others

Upto Rs 1,00,000/- Nil Nil Nil

Above Rs 100,000/- to 145,000/- Nil Nil 10%

Above Rs 145,000/- to 150,000/- Nil 10% 10%

Above Rs 150,000/- to 195,000/- Nil 20% 20%

Above Rs 195,000/- to 250,000/- 20% 20% 20%

Above Rs 250,000/- 30% 30% 30%

Surcharge on Income Tax: In case where the Total Income exceeds Rs 10,00,000,

there would be a surcharge @ 10%.

Education Cess on Income Tax: Education Cess @2% will be payable on the

amount of income tax (including surcharge).

Benefits under insurance policy - Section 10(10D)

As per Section 10(10D) of Income tax Act, 1961, any sum received under a life

insurance policy, including the sum allocated by way of bonus on such policy is

exempt from tax. However, this rule does not apply to following amounts:


60





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.Sum received under Section 80DD (3), or

Any sum received under a Keyman Insurance Policy, or

Any sum received other than as death benefit under an insurance policy which has

been issued on or after April 1 2003 and if the premium paid in any of the years

during the term of the policy is more than 20% of the sum assured.


61






CHAPTER-6


62






DATA ANALYSIS & FINDINGS

1). Are you interested in products offered by the ICICI PRUDENTIAL?

Yes 61%

No 22%

Will think 17%

INTERPRETATION

The good thing is that atleast the corporates were quite eager to find out what ICICI

PRUDENTIAL has to offer whereas the major 39 % of the corporates were not even

interested in the products as they are quite satisfied by the LIC and they are not in

breaking their long relationship with them. The private players will have to play a

long battle in order to ensure that they are serious player in the market. Basically

corporates think that its too early to invest in private companies as they have just

entered the scene and they are unsure of the security they will have about their

investment.


63





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.2). Are you satisfied with your present insurer?

YES 65%

No 35%

INTERPRETATION

Here is where the challenge is. Inevitably most of the players are very satisfied with

their present insurer which makes it more tough for the private players to attract the

corporates. The remaining 35 % are also not very dissatisfied by the services but they

are just open to new avenues and are looking forward that private companies come

with good offers so that they may shift to them. Thus private players will have to be

very proactive and in this regard since LIC is the leader and ICICI PRUDENTIAL is

lagging behind its competitors in terms of competition.

3). Where would you like to insure if given chance?


64





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.LIC - 60

ICICI - 10

BAJAJ ALLIANZ - 5

TATA AIG - 15

SBI - 8

KOTAK MAHINDRA - 2

INTERPRETATION

Thus we see that the companies are comfortable in having business with govt. owned

companies as they feel its safe & secure to have business with them which is followed

by SBI as it is the biggest bank and then followed by TATA AIG as the name TATA

is associated with it which commands huge premium in the market . Whereas in the

case of ICICI PRUDENTIAL the figures represent mediocre performance after

compelling and coxing the corporates and creating a strong impression whether they

feel interested in doing business with the company.

4). What is people’s main concern while taking a insurance policy (ULIP)?


65

COMPANIES

NO OF PEOPLE






A) Security 40%B) Returns 28%C) Tax rebate 32%

0%10%20%30%40%50%

SECURITY RETURNS TAXREBATE

FACTOR

%A

GE

Series1

INTERPRETATION

People invest in insurance mainly because of security concern.

5). Are you aware of LifetimeSuper introduced by ICICI Prudential limited?


66





www.final-yearprojects.co.cc | www.troubleshoot4free.com/fyp/ Final Year Project's is One place for all Engineering Projects, Presentation, seminar, summer training report and lot more.NOTE:-This work is copyright to its Authors. This is only for Educational Purpose.Yes 58%

No 42%

0%

20%

40%

60%

80%

YES NO

RESPONSE

%A

GE

OF

PE

OP

LE

Series1

INTERPRETATION

The awareness level among the corporate about ICICI PRUDENTIAL offering

services is very low and the company needs to work on it. Today is the world of

marketing thus it is recommended that company should become more media friendly

by advertising more through television channels, radio, newspapers, magazines,

journals &editorials.


67






CHAPTER-7


68






LIMITATIONS

The geographical area was very much limited to residential area & so the

results are not particularly reflection of the current behavior.

Biases and non-cooperation of the respondents.

Due to limited time period and constrained working hours for most of the

respondents, the answers at times were vague enough to be ignored.

Most of the people in India take their policies in the period preceeding

March(for tax saving purposes) & so the response to initial contacts were not

all encouraging and that has been the primary reason in the inability to

quantify the results large enough so as to reduce any relevant outcomes.

Most of the results that are spelt out have been of qualitative aspects.

People are not interested in giving personal opinion.


69







70






RECOMMENDATIONS

More emphasis should be on promotional activities.

Plenty of advertisement should be done through T.V, Newspaper and Radio as

these media’s are having maximum recall value.

Total financial planning and advice should be given to every customer.

More business opportunity seminars should be conducted to make people

aware of the offer given.

The company should quite frequently send their agent to the customer so that

they should be aware of the latest offer.

The company should attempt to open more and more of its branches in the

country so as to promote their product publicity.


71







72






CONCLUSION

LIC enjoys credibility over other private players in the industry People look

for security over returns in market linked plans .Lifetime is the most popular

product among the people who are aware about ICICI Prudential’s products.

People are now showing more interest in ULIP as compared to some of the

traditional plans.

ICICI PRUDENTIAL has to counter the distribution network of LIC .The

product profile of ICICI PRUDENTIAL is not very comprehensive


73







74






BIBLOGRAPHY

www.iciciresearchcenter.org

www.tata-aig.com

www.iciciprulife.com

www.personalfn.com


75





http://www.personalfn.com/

http://www.iciciprulife.com/

http://www.tata-aig.com/

http://www.iciciresearchcenter.org/



76






ANNEXURE

1. Do you have any life insurance policies?

Yes No

If Yes: -

Name of the Company ________________

Name of the plan _________________

Annual Amount of premium _________________

Term of plan _________________

1. Are you satisfied with present insurer?

A) YES B) NO

2. Which are the main issues that you take into consideration while purchasing

any life insurance policy?

A) Security

B) Returns

C) Tax saving

D) Others please specify_________

3. Are you aware of Unit Linked Insurance Plans offered by various companies in

India?

A) ICICI B) OM KOTAK MAHINDRA

C) TATA AIG D) BAJAJ ALLIANZ

E) LIC F) SBI

G) MAX NEW YORK H) BIRLA SUNLIFE


77






4. Do you know how a Unit Linked Insurance Plan works?

A) YES B) NO

5. Can you please highlight risk attached with them?

A) HIGH

B) MODERATE

C) LOW

6. What is your perception about the Unit link insurance plans, are they give you

a sense of security?

A) YES

B) NO

7. Are you aware of Lifetime pension plan introduced by ICICI Prudential

limited?

A) YES

B) NO

8. If you are given a choice, which one you take:

A) ICICI B) OM KOTAK MAHINDRA

C) TATA AIG D) BAJAJ ALLIANZ

E) LIC F) SBI

9. What other plans or flexibility you expect from Insurance companies?

A) Fewer premiums

B) More returns

C) Complementary gifts

10. Are you interested in buying products of ICICI Prudential?

A) YES

B) NO


78





comparative study-of-ulip-plans-offered-by-icici-prudential-and-other-life-insurance-companies

Education

engineering projects

year projects

company profilechapter

summer training report

company asa

educational purpose

life insurance companies

insurance need of life