“ ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED. TRADITIONAL PLAN VS ULIP.”
A PROJECT REPORTSUBMITTED TO THE
SCHOOL OF MANAGEMENTIN PARTIAL FULFILMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREEOF
MASTER OF BUSINESS ADMINSTRATIONBY
(KAMAL SINGH 3510910313)
UNDER THE GUIDANCE OF(R. ANANTH KUMAR
ASSISTANT PROFESSOR)
SRM SCHOOL OF MANAGEMENTSRM UNIVERSITY
KATTANKULATHUR 603203JULY 2010
BONAFIDE CERTIFICATECertified that this project report titled “Traditional Plan Vs ULIP.” is the bonafide work of Mr/Ms KAMAL SINGH who carried out the research under my supervision. Certified further, that to the best of my knowledge the work reported herein does not from part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.
Signature of the supervisor Signature of the HOD
ACKNOWLEDGEMENT
It was delightful learning experience to be associated with ICICI PRUDENTIAL LIFE INNSURANCE COMPANY LIMITED. The 7 weeks spend at ICICI PRUDENTIAL LIFE INNSURANCE COMPANY LIMITED, Mumbai, taught me many things which will be with me throughout my life.It is the greatest pleasure and pride that I present the report before you. At this moment triumph it would be unfair to neglect all those who help me in the successful completion of this project.First of all I would like to thank the Dean of SRM School of Management Dr Jayshree Suresh(Dean) and my faculty guide Mr. R.Anath kumar (assistant professor) for the help and guidance rendered for the completion of the project.It is beyond words to express our immense gratitude to our project guide Manisha Raja (agency manager) for the guidance and inspiration throughout this work. I am also very much thankful to the employees of operation department for there co-operation .Last but not the least I thank my family members & friends for there encouragement and support.
TABLE OF CONTENTSSl. No Topic Page No.1 Company Profile 12 EXCUTIVE SUMMARY 43 INTRODUCTION TO INSURANCE 84 INTRODUCTION TO ULIP 14
5 Research Methodology 186 PRODUCT POFILE 20
TRADITIONAL VS ULIP 42DATA ANALYSIS & INTERPRATION 44
7 RESULTS AND FINDINGS 648 CONCLUSIONS 669 LIMITATIONS OF THE STUDY 6710 SUGGESTIONS AND RECOMMENDATIONS 6811 BIBLIOGRAPHY 7012 APPENDIX 73
LIST OF TABLE
Sl. No. Table Page No.
1 Table 1 45
2 Table 2 47
3 Table 3 48
4 Table 4 49
5 Table 5 50
6 Table 6 51
7 Table 7 52
8 Table 8 53
9 Table 9 54
10 Table 10 55
11 Table 11 56
12 Table 12 57
13 Table 13 58
LIST OF PIE CHART AND GRAPH
Sl. No Name Page No.
1 Graph 1 45
2 Graph 2 46
3 Graph 3 47
4 Graph 4 48
5 Graph 5 49
6 Graph 6 50
7 Graph 7 51
8 Graph 8 52
9 Graph 9 53
10 Graph 10 54
11 Graph 11 55
12 Graph 12 56
13 Graph 13 57
14 Graph 14 58
ICICI Prudential is a joint venture between ICICI Bank and PRUDENTIAL PLC engaged in the business of life insurance in India. ICICI Prudential is the largest private insurance company and second largest insurance in India after LIC. ICICI Prudential Life Insurance Company is a joint venture between ICICI BANK, a premier financial powerhouse, and PRUDENTIAL PLC, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA).ICICI Prudential Life's capital stands at Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the year ended March 31, 2008, the company garnered Retail New Business Weighted premium of Rs. 6,684 crores, registering a growth of 68% over the last year and has underwritten nearly 3 million retail policies during the period. The company has assets held over Rs. 30,000 crore as on April 30; 2008.ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims. For the past seven years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life.
Since the liberalization of Indian Insurance sector, ICICI Prudential Life Insurance has been one of the earliest private players. Since the time, ICICI Pru Life has been the leader in terms of market share as indicated by the IRDA (Insurance Regulatory and Development Authority, the regulator for Indian Insurance Industry) at its website.
Arguably the most innovative Indian Life insurer in terms of customer services and products, ICICI Prudential has one of the largest distribution and servicing network with over 2,000 proprietary offices & customer touch points across India. The 30,000 employee strong organization has one of the largest agency distributions in the industry.
With a growing product range to match the complex needs of the demanding customers in a growing economy, the organization also has a history of successful.
During 2007-08, the organization's focus on rural business has proved its complex project execution capability and strong partnerships for customer servicing.
In June, 2009 ICICI Prudential Life Insurance has decided to snap its tie up with TTK Healthcare to settle insurance claims of its users.
VISION & VALUESVISIONTo be the dominant Life, Health 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, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth
VALUESEvery member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.
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
Study tax planning solutions available in the market
SWOT analysis of the product
Organization to be studied:
Life insurance corporation
Bajaj Allianz
HDFC Stan Life
ICICI Prudential Life Insurance
Research methodology: Primary data collected by personally visiting these leading
insurance players. Example: LIC, Max New York Life Insurance, HDFC Standard life.
Data Collection:
Primary data collected through Survey
Sample size 50
Secondary data collected through literature study.
OBJECTIVE OF THE STUDY
The project undertaken by me as a part of my MASTER OF BUSINESS ADMINISTRATION
course is an effort made to study the ULIP policies and activities in BAJAJ ALLIANZ with
special emphasis on unit linked products of the company.
The main objectives of this study are:
1. Working of Unit linked Insurance Plans
2. Study tax planning solutions available in the market
3. SWOT analysis of the product sold
4. To get an exposure in the real working environment in the insurance and corporate
sector.
5. To have a better understanding of the investment options available.
6. Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.
SCOPE OF THE STUDY
1 The main scope is to aware the investors about the various Bajaj Allianz ULIPs and help
them to select the best plan as per their requirement
2 To study the consumer need according his portfolio and to analyze the need of ULIPs
consumer.
3 To find out the best selling insurance products of this company.
4 To find out which product (if any) is not getting good response from clients and why?
5 To find out the risks in investing a unit link insurance plan.
INSURANCE
Meaning of Insurance: -
Insurance in which the risk insured against is the death of a particular person, the insured,
upon whose death while the policy is in force, the insurance company agrees to pay a stated
sum or income to the beneficiary.
Insurance on human lives including endowment benefits, additional benefits in event of death
or dismemberment by accident or accidental means, additional benefits for disability, and
annuities.
Why Life Insurance?
Buying Insurance cannot be compared with any other form of investment. Insurance gives one
a life long benefit and the returns will definitely come but only when one needs it the most i.e.
at the right time.
Insurance is not about how much more it can offer you when the stock market is at its peak. It
may not be an attractive investment option. But weigh the pros and cons and consider how
much more it offers at a small price.
Most important of all it provides you with that unique sense of security that no other form of
investment provides. It gives you a sense of financial support especially during that time of
crisis irrespective of the fluctuations in the stock market. Insurance provides for career goals
right from childhood years.
If the earning member of the family is no more children’s educational needs will not suffer. In
fact his higher education too will be provided for. One need not spend sleepless nights thinking
about how to save for his child's marriage. Life Insurance will take care of that typical once-in-
a-life-time spending on marriages.
An accident or a disability may be devastating but an insurance policy can be of utmost
support for the family during such times too. Besides it provides for additional benefits such as
bonuses. One need not worry about your retirement years. The rising prices, taxes, and your
lifestyle will be taken care of easily. And you can relax and spend your old age in comfort and
peace.
People invest in life insurance owing to a few key reasons, mainly
Insurance creates financial provisions for the deceased's dependants.
Insurance provides for the policyholder's old age after his earning power diminishes.
After all, interest rates may fall and invested holdings may lose value and stop gaining
dividends, but the value of an insurance policy once set, never reduces.
Insurance also provide a legally authorized way to reduce the incidence of Income Tax.
Insurance as an Investment
Agreed, insurance may not be the best place to invest your hard-earned money. But there are
sufficient reasons for one to believe that it can be a highly lucrative avenue to facilitate
savings. People often talk about yield on investment and tend to compare their values with
those available on various insurance schemes. This is particularly typical within the Indian sub-
continent where one conveniently forgets the element of risk covered by life insurance.
It is extremely unfair to compare the performance of insurance against other investments
without considering the core features of insurance. The very essence of insurance is to protect
your family from the uncertainty of your life. Hence it proves very logical to evaluate the costs
involved towards this feature.
One must accept that out of the total amount paid by one for his life insurance, a certain
amount is used for providing the risk cover and only the balance can be utilized as savings. In
other words, the total premium one pays minus the amount evaluated, as the cost of insurance
must be considered as the amount invested to get the maturity amount.
What does life insurance have to offer?
Life insurance is many different things to many different people. For some, it is a premium to
be paid on time. For others it offers liquidity since cash can be borrowed when needed. For the
investment-minded, it denotes a constantly growing capital account and numerous other
benefits.
Life insurance is nothing but the creation of capital funds on an installment basis. Only here,
the results are guaranteed. Life insurance is basically a property that is bought under a
contract, accompanied by contractual guarantees that ensure large sums of money at the
death of the insured.
The contractual guarantee is the promise to pay, backed by one of the oldest and most stably
regulated financial industry operating in the Indian sub-continent today.
Insurance Buys Time and Money: People like to refer to life insurance as time insurance, the
reason being that life insurance proceeds are paid to the insured's beneficiaries in case of
death. The money proffered by life insurance helps buy time to adjust to the change of
circumstances. Insurance provides large amounts of cash that will keep the lifestyle for the
survivors the way it was before the insured's death.
Insurance Offers Peace of Mind: For the person who buys an insurance policy, it offers
absolute and complete peace of mind. He or she knows that the decision made by him will
provide sound benefits in the future, whether or not the individual may live to see it. The life
insurance policy will subsequently prove this in the future if and when funds are needed. This
is the guarantee of the insurance contract.
Multiple Applications: The future is uncertain for each and every one. No one knows how
long he or she will live. The investment benefit is paid to the insured's beneficiaries after his
death or it can be used during the life as well. Life insurance policy owners can turn to the cash
value of the policy in case of a financial emergency when all avenues are either blocked or
denied. They know that they can avail of loans based on their insurance policies.
Insurance policy owners can use the cash value of their policies to meet their long-term
financial needs as well. They may have purposefully invested in insurance to use the cash in
the policy for their children's future marriage expenses or higher education fees.
Enduring Elasticity: Since life insurance is flexible enough to serve several needs, the
insured can keep several long-term goals in mind once he or she invests in the insurance plan.
The cash value of the policy can be allocated towards augmenting the monthly income during
the retirement years. Leisure years should be turned into pleasure years. Permanent life
insurance is designed on the concepts of long-term flexibility.
Financial Security: The insurance policy offers contractual guarantees to people looking for
peace of mind when they buy life insurance. Life insurance offers complete financial security.
The purchase of life insurance demonstrates concern for a family's future financial well being.
Regard for Family: The purchase of life insurance clearly displays care and concern for the
people the policy owner loves.
Insurance is Safer: No financial institution can do what life insurance does. No industry can
back its products with reserves and surplus as sound as those of the insurance industry.
The proof of strength and safety that insurance companies have ensured even under the most
adverse of conditions is a matter of pride for the entire insurance industry. For generation after
generation, life insurance has been acclaimed as the very benchmark of security against which
the other industries are measured.
INTRODUCTION OF UNIT LINKED INSURANCE PLAN
The introduction of unit-linked insurance plans (ULIPs) has been, possibly, the single-largest
innovation in the field of life insurance in the past several decades.
MEANING
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).
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.
As times progressed the plans were also successfully mapped along with life insurance need
to retirement planning. In today’s times, ULIP provides solutions for insurance planning,
financial needs, financial planning for children’s future and retirement planning.
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
Liquidity
Tax planning
Options to take additional cover against death due to accident
Critical Illness
Surgeries
Options to take additional cover against:
1. Death due to accident
2. Disability
3. Critical Illness
F u n d o f U L I P
Equity based funds
Money Market based funds
Debt Funds
Balanced Funds
Special Funds
UNIT-LINKED LIFE INSURANCE PRODUCTS
Unit-linked life insurance products are those where the benefits are expressed in terms of number
of units and unit price. They can be viewed as a combination of insurance and mutual funds. The
number of units, which the customer would get, would depend on the unit price when he pays his
premium. The daily unit price is based on the market value of the underlying assets (equities,
bonds, government securities etc.) and computed from the net asset value
MERITS1) Flexibility to choose your own level of protection (the sum assured)
2) Option to choose from a wide variety of investment fund to invest in (from high risk to low
risk fund depending on your risk profile). The investment part of Traditional Insurance is control
by insurer
DEMERITS
The premium is not guaranteed. In Malaysia, the annual premium we pay for
investment-linked insurance is call 'annual targeted premium'. For example, if you pay
an annual premium Ringgit Malaysia 1,800 over the last few years, it does not mean
you are paying the same amount from next year onwards.
b) The insurance charges is not guaranteed, for example, insurance charges for death
benefit, total & permanent disability benefit, etc. The insurance company has the right to
increase the insurance charges.
RESEARCH METHODOLOGY
As the title of the project suggests the project is about the study of unit linked insurance plan in
current market scenario so my objective in the market interface is to find the awareness about
the Bajaj Allianz’s products in the current market.
MARKET RESEARCH DESIGN
Research Type: Descriptive research
Sources of data: Primary Data
Research method: Survey Method
Research instrument: Questionnaire
Sample size: 50.
SOURCES OF DATA
PRIMARY SOURCES
Data collected from the primary sources are personally interviewed.
Study Conducted.
SAMPLING PROCEDURE
The process employed for the sample was Random sampling. Random sampling is the
sampling in which every unit in the population has an equal opportunity of being selected in the
sample. The method is more representative of the population as there are no personal biases.
METHODOLOGY
The survey is conducted among 50 respondents. The methodology is quite simple. The
primary data collected through survey. The people are personally interviewed. Then their
responses are analyzed and interpreted and the final report is prepared.
Simple statistical tools have been used to in the study to analyze and interpret the data
collected from the field. The study has used percentile method and the results are presented in
the form of the Pie charts and Bar diagrams.
Insurance PlansICICI Prudential has a wide array of insurance plans that have been designed with the philosophy that different individuals are bound to have differing insurance needs. The ideal insurance plan is one that addresses the exact insurance needs of the individual that will depend on the age and life stage of the individual apart from a host of other factors.
Life Insurance Plans:
Under Life insurance plans, ICICI Prudential offers plans under the following major need categories:
Education Insurance Plans Wealth Creation Plans Protection Plans
Pension & Retirement Solutions:
The primary objective of a pension plan is to help you provide for your financial needs in your post retirement years. You will find a Pension Planning Calculator on the site, meant to make your pension plan review as simple as possible. The calculator is the first step in your Pension Plan scheme, there are othe steps towards getting the Indian pension policy you need. Click here to know more about our pension plan solutions.
ICICI Pru LifeTime Pension Maxima ICICI Pru LifeStage Pension Advantage ICICI Pru Elite Pension II ICICI Pru Assure Pension ICICI Pru ForeverLife ICICI Pru Immediate Annuity
Health Product Suite:
Under Health Product Suite, ICICI Prudential offers plans under the following major need categories: Hospitalisation Plans
MediAssure Hospital Care II
Critical Illnessl Pans
Crisis Cover
Education Insurance PlansOne 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.
Plan Name
Plan Type
ICICI Pru SmartKid Assure ICICI Pru SmartKid Maxima
ICICI Pru SmartKid Regular Premium
Unit Linked Unit Linked Traditional
Wealth Creation PlansWealth 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
Plan Type
ICICI Pru Pinnacle ICICI Pru LifeStage Wealth ICICI Pru ACE ICICI Pru Premier Wealth ICICI Pru Assure Wealth ICICI Pru LifeTime Maxima
Unit Linked Unit Linked Unit Linked Unit Linked Unit Linked Unit Linked
Protection PlansThe 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:
Plan Name
Plan Type
Pure Protect LifeGuard Save'n'Protect CashBak Home Assure
Traditional Traditional Traditional Traditional Traditional
ICICI Pru LifeTime Pension MaximaIn the prime of your life and at the peak of your career, you enjoy all the comforts of life. A happy family, your own home and car, frequent dining out, holidays in India and abroad... these are pleasures you are used to today. Wouldn't you wish to continue enjoying them even after you stop working? You can, if you plan for it now. All you need is a good retirement plan. At ICICI Prudential Life Insurance, we understand your needs and help you plan for a better future. We bring to you ICICI Pru LifeTime Pension Maxima, a regular premium, unit-linked pension product. This product offers you the flexibility to invest in unit-linked funds that generate potentially higher returns over the long term. This product also offers you a unique strategy that allows you to protect gains made through your funds invested in the equity markets from any future equity market volatility. So, start investing today to realize your retirement dreams.
ICICI Pru LifeStage Pension AdvantageThe word retirement brings to mind beautiful images of a comfortable and relaxed life. A life spent in the company of your loved ones and free of the worries and tensions of work. To ensure that this dream is realized, you need to build an adequate retirement corpus, which will allow you to be free from any financial worries. To help you achieve this goal, ICICI Prudential presents ICICI Pru LifeStage Pension Advantage. The distinguishing feature of this policy is that it has no premium allocation charge for any regular premiums, which means 100% of your money is invested at premium payment. This policy also provides you with a unique lifecycle-based investment strategy that continuously re-distributes your money across various asset classes based on your life stage and risk tolerance, eventually providing you with a customized retirement solution. So, start investing today to realize your retirement dreams.
ICICI Pru Elite Pension IIFor an exclusive customer like you, who likes to be in complete control, we present ICICI Pru Elite Pension II.
It is a regular premium paying, unit-linked pension product that offers potentially higher returns over the long term. This product comes with the unique Trigger Portfolio Strategy which automatically protects your gains made in equity markets from any future market volatility. And once you arrive at your retirement age, you are assured of regular income (pension) for life.
ICICI Pru Elite Pension IIFor an exclusive customer like you, who likes to be in complete control, we present ICICI Pru Elite Pension II.
It is a regular premium paying, unit-linked pension product that offers potentially higher returns over the long term. This product comes with the unique Trigger Portfolio Strategy which automatically protects your gains made in equity markets from any future market volatility. And once you arrive at your retirement age, you are assured of regular income (pension) for life So that… you call the shots all your life.
ICICI Pru Assure PensionA retirement plan provides you an income to enjoy a comfortable lifestyle even after you stop working. Presenting ICICI Pru Assure Pension, an innovative pension product especially designed to help you systematically save towards a joyful and carefree retirement. Moreover, this product provides you with a unique LifeCycle based Portfolio Strategy that regularly re-distributes your money across various asset classes based on your life stage, eventually providing you with a customized retirement solution.
ForeverLifeICICI Prudential's ForeverLife is a complete insurance cum pension plan that performs two crucial roles: it acts as a protective cover while you earn for your retirement, and provides you with regular pensions once you retire.
Health Assure PlusIllnesses have a way of sneaking up on us, weakening our financial stability and stealing our family's peace of mind. It is best to keep oneself insured at all times against the most critical illnesses that are also the most common: Cancer, Coronary Artery Bypass Graft or Surgery, Heart Attack, Kidney Failure, Major Organ Transplant, and Stroke. ICICI Prudential's HealthAssure Plus financially insures you against these six critical illnesses. Should you ever be diagnosed with one or more of these, HealthAssure Plus provides you with a fixed sum, irrespective of your actual medical expenses. The health plan thus shoulders the heavy costs of your treatment and ensures you stay financially stable, come what may. This financial guarantee during illness is not all that HealthAssure Plus delivers. HealthAssure Plus comes with an added benefit: it insures your life, as well. So should an unexpected accident or disability claim your life, your family will receive the entire Sum Assured-an amount large enough to ensure they live securely, even in your absence.
ICICI Pru MediAssure?Health problems, in most cases, strike us unexpectedly, resulting in a sudden financial burden. Despite this, only around one in every fifty Indians, is covered through some form of individual medical insurance. Further, it has been observed that 2 out of every 5 individuals hospitalised in India end up either borrowing money or selling assets to cover healthcare costs. This situation is set to escalate further as private health care spends in India are estimated to increase by 2 to 3 times over the next 12 years. Hence you need a solution that gives you peace of mind by providing financial cover to both you and your family against unforeseen hospitalisation events. So what should you look for when buying a medical/hospitalisation cover:
Does the plan guarantee you insurability at renewal irrespective of your health status? Does the plan ensure that no new exclusions are added or no increase in premiums occurs just
because a claim is made? Does the plan clearly state exclusions at the time of taking the policy and also offer you cover
against pre-existing conditions?
ICICI Prudential Life Insurance presents MediAssure, a health insurance plan with a AAA guarantee for the family
Assured cover till age 75 years Assured coverage for accepted pre-existing illnesses after 2 years Assured price for 3 years
Moreover, this policy covers all your hospitalisation needs with the flexibility to choose your location and quality of treatment.
ICICI Pru Hospital Care IIPresenting ICICI Pru Hospital Care II – a family floater plan covering your spouse and children. ICICI Pru Hospital Care II - this fixed benefit hospitalisation and surgical plan complements your existing coverage by offering payouts over and above any health plan you have, thus availing best possible medical treatment, without having to bother about the cost of the treatment or quality of care.Give your family the protection they deserve - take home ICICI Pru Hospital Care II, today. Why should you buy Hospital Care II? Hospital Care II offers the following key benefits:
Fixed benefits to cover hospitalisation, ICU admission, surgical procedure and also recuperating benefit
Benefit amount in addition to other medical insurance plans, irrespective of actual billing Additional benefits for prolonged stay & non surgical hospitalisation Guaranteed insurability at renewal for whole life Tax benefits under section 80D Cashless claim settlement A family floater option
Health check-up
Health Assure PlusIllnesses have a way of sneaking up on us, weakening our financial stability and stealing our family's peace of mind. It is best to keep oneself insured at all times against the most critical illnesses that are also the most common: Cancer, Coronary Artery Bypass Graft or Surgery, Heart Attack, Kidney Failure, Major Organ Transplant, and Stroke. ICICI Prudential's HealthAssure Plus financially insures you against these six critical illnesses. Should you ever be diagnosed with one or more of these, HealthAssure Plus provides you with a fixed sum, irrespective of your actual medical expenses. The health plan thus shoulders the heavy costs of your treatment and ensures you stay financially stable, come what may. This financial guarantee during illness is not all that HealthAssure Plus delivers. HealthAssure Plus comes with an added benefit: it insures your life, as well. So should an unexpected accident or disability claim your life, your family will receive the entire Sum Assured-an amount large enough to ensure they live securely, even in your absence.
Crisis CoverLife is hectic in today's fast paced world. Along with the rapid pace and progress comes the bane of modern life such as increased stress, poor diet and lack of exercise. The alarming aspect is that, owing to these factors, more and more Indians are becoming vulnerable to critical illnesses every year. These illnesses, coupled with increasing costs of treatment, have made recovery a long and expensive process. It goes without saying that securing your family's financial future is a part of prudent financial planning. However, no less important is your health and well-being, for which you need a comprehensive health coverage. And, given our lifestyles, it should ideally be a plan that provides complete protection against Disease, Disability and Death.
Keeping this need in mind, ICICI Prudential Life Insurance presents Crisis Cover. This all-inclusive long term insurance policy provides coverage against 35 critical illnesses, total and permanent disability, and also death. So, get the right protection tailored to suit your lifestyle, with this plan which is• Comprehensive• Affordable• Long Term
TAX PLANNING SOLUTIONS
TAXATION
TAX BENEFITS ON INSURANCE AND PENSION.
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:
1. Life insurance plans are eligible for deduction under Sec. 80C.
2. Pension plans are eligible for a deduction under Sec. 80CCC.
3. Health riders are eligible for deduction under Sec. 80D.
4. The proceeds or withdrawals of life insurance policies are exempt under Sec
10(10D), subject to norms prescribed in that section.
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).
TAX SAVING INVESTMENT AVENUES:
National Saving Certificate (N.S.C): Invest in National Savings Certificates on which an
individual can earn 8 per cent.
Along with it, Section 80L allowed deduction of interest earned on, say, a National Savings
Certificate or a bank deposit up to a limit of Rs 12,000.
Public Provident Fund (PPF): For all individuals working people, contribution to provident
fund (12 per cent of your basic salary) is mandatory and that's a good thing because your
employer makes an equal contribution and you earn 9.5 per cent on the total.
For the totally risk averse, there's the good old Public Provident Fund (it has a lock-in period of
15 years but you can borrow against your deposits after seven years) which earns you 8 per
cent.
This is a great scheme to give one’s kids a head start in life, so keep putting away small
amounts for them. Till the government decides to tax the interest on PPF
Will PPF be taxed on maturity?
Under the new Budget, you will be taxed when you withdraw your PPF on maturity. PPF will be
taxed under the Exempt-Exempt-Tax Rule. EET is nothing but a name for the tax system,
where investment in certain savings plans is deductible from income.
Now, one will get the deduction from his income, thus lowering the tax liability. The interest
amount is also exempt under Section 10. But when the amount matures or is withdrawn, it will
be taxable in that year of maturity/withdrawal. It will be taxed even if one goes in for a
premature withdrawal.
Accordingly, the principal amount at the time of maturity will be taxable as per your slab rate.
Let's say you invest Rs 10,000 every year in PPF. After 15 years, you receive a lumpsum of
approximately Rs 215,000. Every year, you are eligible for a deduction of Rs 10,000 from your
income and thus save tax on it.
Now, it has been proposed that whatever amount you receive on maturity, your deposits of Rs
150,000 (Rs 10,000 x 15 years), will be taxable out of the total amount. This can be termed as
Deferment of Tax and not saving of tax. In other words, you will defer (postpone) the payment
of tax, depending on the lock-in period of your tax saving investment. Some time or the other,
though, the investment will mature. And tax will be levied then.
Housing loan principal repayment: Under Section 88, one gets a rebate on the principal of a
home loan only up to Rs 20,000. Under 80C, one can use up the entire Rs 100,000 to repay
your home loan principal
For those who have no money to save but have a home loan, use the tax break for a higher
principal amount. Typically, the equated monthly installment would have a higher share of
interest in the initial stages and a higher principal component towards the latter half of the loan
tenure. The trick, therefore, would be to claim the tax break on as high a principal amount as
possible.
Equity Linked Savings schemes: For punters, things couldn't get better. You can put Rs
100,000 in an equity linked savings scheme and end up getting a 30 per cent return upfront (in
the form of a tax break in the highest slab).
Next, you must insure yourself to some extent -- so buy a pure term policy. The trick here is
not to opt for a unit-linked insurance plan but to pick up the cheapest term policy in the market
and top it up with an ELSS.
A combination of a pure term policy and an ELSS is a sure-fire winner for two reasons.
First, the upfront charges for ULIPs are prohibitive -- between 20 and 40 per cent, depending
on the nature of the schemes - -and sometimes this offset the tax benefit that you get.
The second is the 30 per cent upfront gain (tax break).
Therefore, assuming that the fund managers of both schemes are equally competent (and
there is no reason to assume differently), the returns on an ELSS are likely to be far better --
they have returned around 40 per cent in the last few years. What's more, the dividends from
ELSS, if any, would be tax-free too. But remember that there's a three-year lock-in period for
ELSS and ULIP plans.
Life insurance: If one is keen to save for the future, another option is the annuity plan, which
you can pick up from any life insurer.
Earlier, one could only invest Rs 10,000 every year, but now there's no cap. A ULIP annuity
scheme could give you an upside in the form of higher investment returns from either debt or
equity. If one is below 40 you could perhaps plump for an equity scheme, but if one is older,
debt schemes are a better bet.
Pension: If one can live with some risk buy into a pension fund set up by a mutual fund. These
funds invest in both debt and equity schemes though there's not too much of a choice right
now with only Templeton and UTI offering these products.
Benefits under Section 80CCC for contributions made to pension plans remain unchanged. It
is expected to be amended and brought in line with the Rs 100,000 limit as offered by Section
80C. Till date, pension investments were mostly driven by Section
80CCC benefits. After this budget, we should see retirement planning take a front seat, as
pension will play a more important role in your insurance portfolio.
Section 10(10D) has not been tampered with. The benefits under this section are still available
so individuals need not worry about death or maturity benefits while buying life insurance.
Mediclaim.
Donations.
Infrastructure bonds
Repayment of loan for higher education.
ULIPS (UNIT LINKED INSURANCE PLANS)
ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the attractive features they offer. Benefits include flexibility, Transparency, Liquidity, and Fund Options. Flexibility A ULIP offers the customer an acute degree of flexibility: the flexibility to choose the Sum Assured, and to choose the desired premium amount. ULIPs give the customer the option of changing the level of Premium/Sum Assured even after the plan has started, and the flexibility to change asset allocation by switching between funds with ease. Transparency ULIPS offer a high degree of transparency, where all charges in the plan as well as the entire net amount invested is made known to the customer. ULIPs also offer the convenience of tracking your investment performance on a day to day basis, so you can decide instantly where you want your assets allocated. Liquidity A ULIP offers you the option of withdrawing money a few years into the plan, allowing for the exigencies of life. Alternatively, a ULIP will also allow for partial/systematic withdrawal should the need arise. Fund Options A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a combination of the three. The customer is also afforded the option of choosing your fund mix based on your desired asset allocation.
TRADITIONAL PLANS
These are the oldest types of insurance plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are:
1. Steady Investment 1. Major chunk of investible funds are in debt instruments.2. Steady and almost assured returns over the long term.
2. Features 1. Death benefit is Sum Assured + guaranteed & vested bonus.2. Helps in asset creation as they are for a long tenure.3. Premium to Sum Assured ratios are fixed for each plan and age.
Generally withdrawals are not allowed before maturity.
Data Analysis and Interpretation
What is your annual income?
Income Level No. Of Respondents Percent
LESS THAN 150000 2 4%
150001 – 300000 10 20%
300001 – 1000000 30 60%
ABOVE 1000000 8 16%
Total 50 100%
Table No. 1 Respondent Income Group
LESS THAN 150000
150001 – 300000
300001 – 1000000
ABOVE 1000000
0%
10%
20%
30%
40%
50%
60%
70%
Percent
Percent
Graph No 1
Percent
LESS THAN 150000150001 – 300000300001 – 1000000ABOVE 1000000
Graph no 1
Interpretations
Do you make investments?
Investment No. Of Respondents Percent
Yes 40 80%
No 10 20%
Table No. 2 Investment
Percent
YesNo
Graph 2
If yes, where do you make investment?
Investment No. Of Respondents Percent
Bank Deposits 30
Mutual Fund 30
Shares 10
Life Insurance 20
Postal Deposit Schemes 5
Real estate 2
Table No. 3
Bank D
eposit
s
Mutual Fu
ndSh
ares
Life I
nsuran
ce
Postal D
eposit
Schem
es
Real e
state
05
101520253035
No. Of Respondents
No. Of Respondents
Graph 2
What are the reasons to make investments?
Investment No. Of Respondents
Tax Saving 30
Return 5
Capital Appreciation
Secure investment 2
Life cover 15
Other
Table No. 4
Tax S
aving
Return
Capita
l Apprec
iation
Secu
re inve
stmen
t
Life c
over
Other05
101520253035
No. Of Respondents
No. Of Respondents
Graph 3
Are you satisfied with your Investment?
Investment No. Of Respondents
Yes 28
No 12
Table No. 5
No. Of Respondents
YesNo
Graph 3
Have you heard about private insurance company ICICI prudential life?
Investment No. Of Respondents Percent
Yes 45 90
No 5 10
Table No. 6
Yes
No. Of RespondentsPercent
Graph 4
From where did you come to know about ICICI prudential life insurance?
Investment No. Of Respondents
Electronic Media 30
Print Media 30
Seminar 2
Workshops 5
Advisor 18
Table No. 7
No. Of Respondents
Electronic MediaPrint MediaSeminarWorkshopsAdvisor
Graph 5
Do u have Insurance policy?
Investment No. Of Respondents Percent
Yes 45 90
No 5 10
Table No. 8
Percent
YesNo
Graph 6
Which Plan is it
Investment No. Of Respondents
ULIP 18
Traditional Plan 2
Table No. 9
No. Of Respondents
ULIPTraditional Plan
Graph 7
what are the reasons for investment in ULIP
Reasons for ULIP No. Of Respondents
Life Protection 15
Investment and Savings 18
Flexibility 18
Transparency 18
Liquidity 18
Tax Planning 18
Table No. 10
No. Of Respondents
Life ProtectionInvestment and SavingsFlexibilityTransparencyLiquidityTax Planning
Graph 8
Do you think ULIP is a risky investment?
Investment No. Of Respondents
Very Risky 12
Less risky 3
Safe 3
Very Safe 0
Table No. 11
Very Risky Less risky Safe Very Safe0
2
4
6
8
10
12
14
No. Of Respondents
No. Of Respondents
Graph No. 9
Do you have any plan to buy ULIP plans in near future?
Buy ULIP No. Of Respondents Percent
Yes 40 80
No 10 20
Table No. 12
Percent
YesNo
Graph 9
What steps do you suggested to the companies to make their ULIP plans more popular?
Suggestion No. Of Respondents Percent
More Advertisements 10 20
Arrange more workshops 10 20
Arrange more seminars 15 30
Reduce charges 40 80
Create awareness through advisors 30 60
Table No. 13
Percent
More AdvertisementsArrange more workshopsArrange more seminarsReduce chargesCreate awareness through advisors
Graph 11
SWOT ANALYSIS OF ULIP
STRENGTHS
1. Liquidity Benefit: There is no maturity date. Anytime after 3 premium-paying years you can
make partial or complete withdrawals at no charges.
2. Choosing investment portfolio
Maximiser.
Protector
Balancer
Preserver
3. Switching: Choice to switch between the various investment plan options, absolutely free, 4
times every year.
4. Top – Up: Invest surplus amounts. Top-ups will not have effect on the sum assured.
5. Increase/Decrease sum assured.
6. Premium holiday: If premiums have been paid for at least 3 years and because of some
reason, premium cannot be paid, then the policy does not lapse; the coverage will be
continued via adjusting the unit fund for the mortality premiums.
7. Flexible contribution: Contribution can be increased without any limits.
8. Additional allocation of units: As a policyholder one is provided with additional allocation
of units on periodic basis. These will depend upon the total value of units of the policy
9. Loan against the policy: After the policy has acquired a surrender value one can avail loan
against the policy.
10. Rides: Choice of riders along with death benefits to give total protection – all at a marginal
cost
Accident and Disability rider
Critical Illness Rider
Major Surgical Assistance Benefit Rider
WEAKNESSES
1. Policy does not acquire a surrender option before the end of third year of policy.
2. It has evolved a solution for policyholders, as most ULIP investors are not really financially
savvy.
3. High premium allocation charges: The premium allocation will be based on the contribution
limits. The yearly allocation would be as follows.
Contribution Range 1st year 2nd year 3rd year onwards
18,000 – 49,999 80% 92.5% 96%50,000 and above 82% 92.5% 96%
4. Mortality charges are deducted based on um assured and age of life assured.
5. Plan do not offer any guarantee or assured return.
6. In case of partial withdrawals, one needs to maintain a minimum balance of Rs. 10000
across all funds. In case the unit value is 9inadequate to cover charges, the policy will
terminate.
OPPORTUNITIES
1. Life insurance plans are eligible for tax deduction under Sec. 80C.
2. The proceeds or withdrawals of life insurance policies are exempted under Sec 10(10D),
subject to norms prescribed in that section.
3. Large majority of Indian population still are not insured.
4. Equity markets have shown a good performance due to the strong inflow from FII and
domestic funds through IPO’S in first quarter of year.
5. Finance minister unveiled a budget-favoring consumer spending, boosting demand and
therefore higher economic growth.
6. 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.
THREATS
1. The Unit value of the Units of this plan can go up or down depending on the factors and
forces affecting the financial and debt markets from time to time and may also be affected by
changes in the general level of interest rates.
2. The investments in the Units are subject to market and other risks and there can be no
assurance that the objectives of the plan will be achieved.
3. Past performance of this plan is not indicative of the future performance of the plan.
4. All benefits payable under the policy are subject to the tax laws and other financial
enactment, as they exist from time to time.
FINDINGS
1. Customers prefer public sector insurance company that is Life Insurance Cooperation
as compared to the private insurance companies.
2. Nearly 68% of the people have opted for one policy or other and about 80% of them
have opted for LIC.
3. Lifetime is the most popular product among the people who are aware about ICICI PUR
products.
4. People invest in insurance mainly because of Tax rebate concern.
5. Among the companies offering Insurance in India LIC is most popular, ICICI PUR
comes at second place.
6. Most of the people are unaware about the working of Unit Linked Insurance Plans.
7. Only 10% of the people feel that investing in ULIP is not risky.
8. People are now showing more interest in ULIP as compared to some of the traditional
plans.
9. Nearly about 50% of the people feel that Insurance companies should be more
transparent.
CONCLUSION
1. LIC enjoys credibility over other private players in the industry
2. People look for tax rebate over security in market linked plans
3. Lifetime is the most popular product among the people who are aware about ICICI PRU
products.
4. People are now showing more interest in ULIP as compared to some of the traditional
plans.
5. ICICI PRU has to counter the distribution network of LIC
6. The product profile of ICICI PRU is not very comprehensive
LIMITATIONS
The results are not comprehensive and representative of entire Indian population because of: -
1. The geographical area was very much limited to residential area & so the results are not
particularly reflection of the current behavior.
2. Biases and non-cooperation of the respondents.
3. Due to limited time period and constrained working hours for most of the respondents,
the answers at times were vague enough to be ignored.
4. Most of the people in India take their policies in the period preceding 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
deduce any relevant outcomes.
5. Most of the results that are spelt out have been of qualitative aspects.
RECOMMENDATIONS
1. The company should spend more on the promotional activities like advertisement in
television, newspapers etc. to create more awareness of the products as they have
more recall value.
2. Company needs greater awareness of its product among target audiences.
3. More business opportunity seminars should be conducted to make people aware of the
offer.
4. Company should regularly send its advisors to customers so that they should be aware
of latest offer.
5. Total financial awareness and advice should be given to every customer.
6. Company should open more of its branches so as to promote its product and increase
its agency force.
7. Some guarantee should be given on its most popular product LifeTime.
8. Short-term capital guaranteed products should be introduced.
9. More emphasis should be given on Smart Kid, PremierLife and Capital guaranteed
products by the advisors.
BIBLIOGRAPHY1) Kothari C.R (1998), Research Methodology, Method and Technique, Wishwa
Parkashan New Delhi.
2) Gupta M.P, Khanna R.B (2004), Quantitative Technique for Decision Making, Prentice
Hall of India Pvt. Ltd. New Delhi.
3) Kotler Philip (2000), Marketing Management, Prentice Hall of India Pvt. Ltd. New Delhi.
4) ‘Marketing and Sales Management’ Business Management Club (2003),
http://www.bestbusinessinfo.com
5) Still, Cundiff, Govoni, Sales Management, Prentice Hall of India Pvt. Ltd. New Delhi.
6) Business Associates Manual
7) World Wide Web Sites:- www.ICICIPRULIFE.COMM
APPENDIXQUESTIONNAIRE
NAME____________________________ AGE_____
QUALIFICATION____________________ OCCUPATION________________
Q 1. What is your annual income?a. Less than 150000 [ ]b. 150001 – 300000 [ ]c. 300001 – 1000000 [ ]d. Above 1000001 [ ]
Q 2. Do you make investments?a. Yes [ ]b. No [ ]
Q 3. If yes, where do you make investment?a. Bank deposits [ ]b. Mutual Funds [ ]c. Shares [ ]d. Life insurance [ ]e. Postal deposit schemes [ ]f. Real estate [ ]g. Precious metal [ ]
Q 4. What are the reasons to make investments?a. Tax Saving [ ]b. Return [ ]c. Capital Appreciation [ ]d. Secure investment [ ]e. Life cover [ ]f. Other [ ]
Q 5. Are you satisfied with your Investment?a. Yes [ ]b. No [ ]
Q 6. Have you heard about private insurance company ICICI prudential life?a. Yes [ ]b. No [ ]
Q 7. From where did you come to know about ICICI prudential life insurance?a. Electronic media [ ]b. print media [ ]c. Seminar [ ]d. Workshops [ ]e. Advisor [ ]f. Others [ ]
Q 8. Do u have Insurance policy?
a. Yes [ ]b. No [ ]
Q 9. If yes, which company policy do you have?a. ICICI Prudential [ ]b. HDFC Standard [ ]c. Bajaj Allianz [ ]d. Birla Sun Life [ ]e. LIC [ ]f. Other ………………………………...
Q 10. If Yes, please specify: -PLAN NAME: _______________________
a. Saving plan [ ]b. Protection plan [ ]c. Pension plan [ ]d. Children’ s plan [ ]
Q 11. Which Plan is ita. ULIP [ ]b. Traditional Plan [ ]
Q 12. What are the reason for investment in ULIPa. Life protection [ ]b. Investment and Savings [ ]c. Flexibility [ ]d. Transparency [ ]e. Liquidity [ ]f. Tax planning [ ]
Q 13. How much return you are expecting from your ULIP?a. 15-25% [ ]b. 25-35% [ ]c. 35-45% [ ]d. ABOVE THAN [ ]
Q 14. Do you think ULIP is a risky investment?a. Very risky [ ]b. Less risky [ ]c. Safe [ ]d. Very safe [ ]
Q 15. Do you have any plan to buy ULIP plans in near future?a. Yes [ ]b. No [ ]
Q 16. If you are not taking any ULIP plans, please tell us the reasons why?a. We couldn’t afford [ ]b. We don’t see any benefit with the system. [ ]c. We don’t want insurance. [ ]d. We don’t understand how ULIP works. [ ]e. We are not too much aware of ULIP plans. [ ]
Q 17. What do u think Which Plan Gives u Max Benefits?
a. Traditional Plan [ ]b. ULIP [ ]
Q 18. What steps do you suggested to the companies to make their ULIP plans more popular?a. Give more advertisements. [ ]b. Arrange more workshops. [ ]c. Arrange more seminars [ ]d. Reduce charges [ ]e. Create awareness through advisors [ ]f. Others_______________________.
