report punam---the introduction of insurance sector

RAJASTHAN TECHNICAL UNIVERSITY, KOTA

A

PROJECT REPORT

ON

Training Undertaking at

Titled

“COMPARISON BETWEEN FUTURE ANAND PLAN AND LIC’s JEEVAN ANAND PLAN ”

Submitted in partial fulfillment for the Award of degree of Master of Business Administration (2008-2010)

Submitted by:- Submitted to:-Poonam Kumari Manish Kachhawa

M.B.A. (3rd Semester)

G.D. MEMORIAL COLLEGE OF MANAGEMENT & TECHNOLOGY

PREFACE

I am very happy to place this project in the head of my esteemed readers.

Work on the project of analysis of Future Generali Life Insurance, market survey is a very

tough task but through the helping of my colleagues, professors and the other people it’s

become simple.

I would like to introduce myself as one of those aspirants, who are trying to make identity

of their won in the crowd of approaches and opportunity.

The project provides practical environment for us to explore. This report is the outcome of

45 days working with lot of enthusiasm and hardworking.

Through this project, I got good experience and learned a lot about HR and as well as

finance, which shall be of immense help in the future for me. I take this opportunity to

present this report and sincerely hope that it would be of great use to its readers.

POOONAM KUMARI

MBA 3rd semester

ACKNOWLEDGEMENT

Practical experience is an important as academic for around development of

management. It is basically to strengthen the practical concepts as well as theoretical

concept. Though this project, a student gets acquainted with the latest technologies and

recent developments.

Firstly I convey my special thanks to Mr. Ashish Sharma (sales manager) under whom I

did my project. He helped me in my work and provided me the necessary guidance.

I convey to my sincere thanks to all employees of Future Generali India Life Insurance

Company. Their help and co-operation was incompatible throughout the project. They

provide me many details helpful in the preparations of this study report.

I pay my sincere thanks to all the student of my class for their co-operation, support and

good wishes.

POONAM KUMARI

Contents

1. Introduction of Insurance

2. Introduction of Future Generali India Life Insurance Co. Ltd.

3. Objectives of the Research

4. Research Methodology

4.1 Title of the Study

4.2 Duration of the Project

4.3 Objective of Study

4.4 Type of Research

4.5 Sample Size and method of selecting sample

4.6 Scope of Study

4.7 Limitation of Study

5. Facts and Findings

6. Analysis and Interpretation

7. SWOT Analysis

8. Conclusion

9. Recommendation and Suggestions

10. Appendix

11. Bibliography

THE INTRODUCTION OF INSURANCE SECTOR

WHAT IS INSURANCE

The business of insurance is related to the protection of the economic value of assets.

Every asset has a value. The asset is valuable to the owner, because he expects to get

some benefits from it. Every asset is expected to last for a certain period of time during

which it will provide benefits. After that benefit may not be available. Insurance is a

mechanism that helps to reduce the effects of such adverse situations.

The Life Insurance Corporation of India was formed on 1 September 1956; there were

170 Companies and 75 provident fund societies transacting life insurance business in

India, by 31.08.2007, 16 new life insurance businesses in India.

The metropolitan Life Insurance Company is one of the world’s largest New York, based

Life Insurance Companies.

Insurance is defined as the equitable transfer of a loss, from one equity to another, in

exchange for a premium. Insurer is the company that sells insurance. Insurance rate is a

factor for s certain amount of insurance coverage. Risk management, the practice of

appraising and controlling risk, has evolved as a discrete field of study and practice.

PRINCIPLES OF INSURANCE

1. A large number of homogeneous of exposure units

The vast majority of insurance policies are provided for individual member of very

large class.

2. Define Loss: -

The event that gives rise to the loss that is that is subject to insurance should , at

least in principle, take place at a known time , in a known place , and from a known

cause.

3. Accidental Loss: - The event that constitutes the trigger of a claim should be fortuitous, or at least

outside the control of the beneficiary of the insurance. The loss should be ‘Pure’ in

the sense that it results from an event for which there is only the opportunity for

cost.

4. Large loss:

Insurance premium need to cover both the expected cost of losses, plus the cost

of issuing and administering the policy, adjusting losses, and supplying the capital

needed to reasonably assure that the insurer will be able to pay claim.

5. Affordable Premium :

If the likelihood of an insured event is so high, or the cost of the event so large ,

that the resulting premium is large relative to the amount of protection offered, it

is not likely that anyone will buy insurance, even if an offer.

6. Calculable Loss:

There are two elements that must be at least estimable, if not formally calculate:

the probability of loss and the attendant cost.

7. Limited risk of catastrophically large Losses:

Where the loss can be aggregated, or an individual policy could produce

exceptionally large claims, the capital constraint will restrict an insurer’s appetite

for additional policyholders.

NEED AND IMPORTANCE OF INSURANCE

Risk arises because there are need to be fulfilled. The risk attached to early death arises

because of need to maintain the family that is left behind. If there were no needs, there

would be no risk. Insurance is therefore related to the needs of individuals.

Someone could be seriously concerned about the welfare of a movement for trees or for

animals, at some neglect of own personal comforts. It is necessary to be sensitive to the

need.

Broadly, the needs of individuals may be classified as follows:-

Protection of the standard of living of the family which is at risk on early death.

Provide the necessary income to maintain the standard, after providing for

repayment of loans and other debts.

Future expenses on account of children’s education, marriage, start of some

business and so on, which are ambitious areas.

Continuance of business, when financiers for life insurance policies as collateral

security, or partners need to rearrange finances on the death of a partner.

Substitute income when earning capacity ceases due to old age or disabilities.

PURPOSE OF INSURANCE

1. Assets are insured :

Assets are likely to be destroyed or made non functional before the expected life

time, through accidental occurrences. Such possible occurrences are called perils.

Fire, flood, breakdown, lighting, earthquakes etc. are perils.

2. Risk means a possibility of loss or damage:

The damage may or may not happen. Insurance is done against the possibility that

the damage may happen. Insurance is relevant only if there are uncertainties.

3. Insurance does not protect the asset:

It does not prevent its loss due to the peril. The peril cannot be avoided through

insurance. Insurance only tries to reduce the impact of the risk on the owner of the

asset and those who depended on the asset.

4. Only economic consequences can be insured:

If the loss is not financial, insurance may not be possible. Examples of non

economic losses are love and affection of parents, leadership of managers,

innovative and creative abilities etc.

ROLE OF INSURANCE

Role:-1. Life Insurance as “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 option, and this is besides the added incentives (bonuses) offered by insurer.

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

simple reason that it offer financial protection from risk, something that is missing in non-

insurance product.

In fact, the premium one pay for an insurance policy is an investment against risk.

Thus before comparing with other schemes, one must accept that a part of the told

amount invested in life insurance goes towards providing for the risk cover, while the rest

is 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 of 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 decreased will receive the sum assured.

Now let us compare insurance as an investment options. If you invest Rs.

10,000 in PPF, your money grow to 10,950 at 9.5% interest over your but in this case, the

access to your funds will be limited. One can withdraw 50% of the initial deposit only after

4 years.

Role:-2. Life Insurance as “Risk Cover”

First and Foremost, insurance is about the risk cover and financial protection, to be more

precise to help outlast life’s unpredictable losses. Designed to safeguard against losses

suffered on account of any unforeseen event, insurance provides products you with that

unique sense of security that no other form of investment provides.

To provide such protection, insurance firms collect contribution s from many

people who face the same risk. A loss claim is paid out of the total premium collected by

the insurance companies, who act as trustee to the mourners.

Role:-3. Life Insurance as “Tax Saver”

Section 10 (10D) of Income Tax Act, 1961 would apply. Under this, the amount of

maturity value is paid to the policyholder which is totally tax fee. Section 80 c is

applicable. Under this a person can invest maximum of Rs. 1 lac out of his annual income

for which no tax is levied.

LIFE INSURANCE CONTRACTS

A Life Insurance is a contract, within the meaning of the Indian Contract Act 1872. A

contract is an agreement between two or more parties to do or not to do, so as to create a

legally binding relationship. Insurance is a contract between the insurer and the

policyholder. The policyholder can be different from the person whose life is insured, as

will be seen later. Insurance is a specialized type of contract. A simple contract must

have the following essentials:-

1. Offer and Acceptance

2. Consideration

3. Capacity to contract

4. Consensus “ad idem” (genuine meeting of minds)

5. Legality of object or purpose

6. Capability of performance

7. Intention to create legal relationship

Apart from the usual essentials principals of a valid contract, insurance are subject to two

additional principles.

Principle of Utmost Good Faith

Principle of Insurable Interest

These apply to all insurances, both life and non – life.

ADVANTAGES OF LIFE INSURANCE

Life insurance is the best possible way for family protection.

Life insurance is a only way to safeguard against the unpredictable risks of the

future.

Life insurance is essential for the conservation of many businesses.

Life insurance enhances the existing standards of living.

Life insurance helps people live financially solvent lives.

Life insurance is a way of life.

TYPES OF INSURANCE

Insurance is of two types :

1. General Insurance : - Covers yours house, car, travel, mortgage

payments, private medical treatment etc. It is a short term policy that pays out

when things go wrong.

2. Life Insurance : - It is the most popular savings and investment vehicles

in India. An insurance policy offers much more than just tax planning and

investment returns. It offers to plan for unseen events that could affect your

family’s financial profiles adversely.

Life insurance policies can further be divided into various categories:

Term Insurance Policy

Whole Life Policy

Endowment Policy

Money Back Policy

Annuities And Pension

Term Insurance policy

A term insurance policy is a pure risk cover for a specified period of time. What

this means is that the sum assured is payable only if the policyholder dies within the

policy term. For, instance, if a person buys Rs. 2 lac policy for 15- years, his family is

entitled to the money if he dies within that 15 – years period.

What if he survives the 15 – year’s period? Well, then he is not entitled to

any payment; the insurance company keeps the entire premium paid

during the 15- years period.

So, there is no element of savings or investment in such a policy. It is a

100% risk cover. It simply means that a person pays certain premium to

protect his family against his sudden death. His explains why the term

insurance policy comes at the lowest cost.

Whole Life Policy

As the name suggest, a Whole life policy is an insurance cover against death,

irrespective of when it happens.

Under, this plan the policyholder pays regular premiums until his death, which the

money is handed over to his family.

This policy, however fails to address the additional needs of the insured during his

post-retirement years. It doesn’t take into account a person’s increasing needs

either. While the insured buys the policy at a young age, his requirements increase

over time. As a result of these drawbacks, insurance firms now offer either a

modified whole life policy or combine in with another type of policy.

Endowment Policy

In an endowment policy, the sum assured is payable even if the insured

survives the policy term.

If the insured dies during the tenure of the policy, the insurance firm has to

pay the sum assured just as any other pure risk cover.

A pure endowment policy is also a form of financial savings, whereby if the

policy, he gets back the sum assured with some other investment benefits.

In addition to the basic policy, insurers offer various benefits such as double

endowment and marriage/education endowment plans. The cost of such a

policy is slightly higher but worth its value.

Money back policy

These policies are structured to provide sums required as anticipated

expenses over a stipulated period of time. With inflation becoming a big

issue, companies have realized that sometimes the money value of the

policy is eroded.

A portion of the sum assured is payable at regular intervals. On survival the

remainder of the sum assured is payable.

In case of death, the full sum assured is payable to the insured.

The premium is payable for a particular period of time.

Annuities and Pension

In an annuity, the insurer agrees to pay the insured a stipulated sum of money

periodically. The purpose of an annuity is to protect against risk as well as provide money

in the form of pension at regular intervals.

Over the years, insurers have added various features to basic insurance policies in order

to address specific needs of a cross section of people.

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 decisions taken simultaneously to provide

the supporting systems to the insurance sector and in particular the life insurance

companies were 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.

Duties, Power and Functions of IRDA :

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.

1. Subject to the provisions of this Act and any other law for the time being in force, the

Authority shall have the duty to regulate, promote and ensure orderly growth of the

insurance business and re-insurance business.

2. without prejudice to the generality of the provisions contained in sub section.

The powers and functions of the Authority shall include.

a. Issue to the applicant a certificate of registration, renew, modify, withdraw,

suspend or cancel such registration.

b. Protection of the interests of the policy holders in matters concerning assigning of

policy, nomination by policy holders, insurable interest, settlement of insurance

claim, surrender value of policy and other terms and conditions of contracts of

insurance.

c. Specifying requisite qualifications, code of conduct and practical training for

intermediary or insurance intermediaries and agents.

d. Specifying the code of conduct for surveyors and loss assessors.

e. Promoting efficiency in the conduct of insurance business.

f. Promoting and regulating professional organizations connected with the insurance

and re-insurance business.

g. Levying fees and other charges for carrying out the purposes of this Act.

h. Calling for information from, undertaking inspection of, conducting enquiries and

investigations including audit of the insurers, intermediaries, insurance

intermediaries and other organizations connected with the insurance business;

i. Control and regulation of the rates, advantages, terms and conditions that may be

offered by insurers in respect of general insurance business not so controlled and

regulated by the Tariff Advisory Committee under section 64U of the Insurance

Act, 1938 (4 of 1938);

j. Specifying the form and manner in which books of account shall be maintained

and statement of accounts shall be rendered by insurers and other insurance

intermediaries;

k. Regulating investment of funds by insurance companies;

l. Adjudication of disputes between insurers and intermediaries or insurance

intermediaries;

m. Supervising the functioning of the Tariff Advisory Committee;

n. Specifying the percentage of premium income of the insurer to finance schemes for

promoting and regulating professional organizations.

o. Specifying the percentage of life insurance business and general insurance business

to be undertaken by the insurer in the rural or social sector;

p. Exercising such other powers as may be prescribed.

Insurance Regulatory and Development Authority (IRDA) Act:

The Insurance Regulatory and Development Authority Act was introduced to end the

monopoly of State-owned companies and to invest in the Insurance Regulatory Authority

power to control the insurance sector.

These powers inter aria are:

• Imposition of prudential norms such as solvency margins, capital adequacy;

• Requirements and investment guidelines for insurance companies;

• Grant of licenses to new companies, and cancellation, suspension and Withdrawal

of licenses given to insurance companies;

• Regulation of fund investment by insurance companies;

• Maintenance of solvency margins;

• Adjudication of disputes between insurers and intermediaries;

• Tariff fixing.

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority

(IRDA, which was constituted by an act of parliament) specify the composition of Authority

the Authority is a ten member team consisting of

a. A Chairman;

b. Five whole-time members;

c. Four part-time members,

Regulatory Issues:

The IRDA Bill lies down that the Indian promoter must dilute the stake in the private

insurance firms from 74 per cent to 26 per cent in ten years. The bill stipulates tough

solvency margins -- Rs 500 million for life insurance firms, Rs 500 million or a sum

equivalent to 20 per cent of net premium income for general insurance and Rs 1 billion for

reinsurance business.

The insurer has to maintain separate accounts relating to fund of shareholders and

policyholders. The funds of policyholders should be retained within the country but does

not cover repatriation of profits and dividends. Insurance companies under the new

regime will have to have exposure to rural and social sectors. Foreign investment in

insurance, the bill states, is crucial to financing infrastructure and better insurance cover.

The key to success in opening up the insurance sector in India is regulation. An example

of how poor regulation can destroy a market is the mutual fund industry. A combination of

improper marketing practice has resulted in a loss of investor faith in that industry.

Incidentally, the insurance industry in India itself has gone through the same phase.

One of the reasons for nationalization of the insurance industry (LIC in 1956 and GIC in

1973) was the mismanagement and malpractice of erstwhile private players. But if the

statements of IRDA officials are anything to go by, the new regulations are expected to be

on the right track. N. I. Rangachary, chairman, IRDA, has already provided the timetable

for the changes once the Bill is passed. The IRDA has already indicated that it will have

tough norms for new participants. This is the most compelling reason why private sector

(and foreign) companies, which will spread the insurance habit in the societal and

consumer interest, are urgently required in this vital sector of the economy. With the

nation's infrastructure in a state of imminent collapse, India couldn't have afforded to be

lumbered with sub-optimally performing monopoly insurance companies and therefore the

passage of the Insurance Regulatory & Development Authority Bill on December 2, 1999

heralds an era of cautious optimism where stakes are high for all parties concerned. For

the Govt. of India, Foreign Direct Investment (FDI) must pour in as anticipated; for foreign

insurers, investments must start yielding returns and for the domestic insurance industry -

their market penetration should remain intact. On the fringe, the customer is pondering

whether all the hype created on liberalization will actually benefit him.

Insurance Sector Reforms in India:

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.

N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its

future direction. The Malhotra committee was set up with the objective of complementing

the reforms initiated in the financial sector. The reforms were aimed at “creating a more

efficient and competitive financial system suitable for the requirements of the economy

keeping in mind the structural changes currently underway and recognizing that

insurance is an important part of the overall financial system where it was necessary to

address the need for similar reforms”

In 1994, the committee submitted the report and some of the key recommendations

included:

Structure:

• Government stake in the insurance Companies to be brought down to 50%.

• Government should take over the holdings of GIC and its subsidiaries so that these

subsidiaries can act as independent corporations.

• All the insurance companies should be given greater freedom to operate.

Competition:

• Private Companies with a minimum paid up capital of Rs.1bn should be allowed to

enter the industry

• No Company should deal in both Life and General Insurance through a single entity

• Foreign companies may be allowed to enter the industry in collaboration with the

domestic companies

• Postal Life Insurance should be allowed to operate in the rural market

• Only one State Level Life Insurance Company should be allowed to operate in each

state

Regulatory Body:

• The Insurance Act should be changed

• An Insurance Regulatory body should be set up

• Controller of Insurance (Currently a part from the Finance Ministry) should be made

independent.

Investments:

• Mandatory Investments of LIC Life Fund in government securities to be reduced from

75% to 50%

• GIC and its subsidiaries are not to hold more than 5% in any company (There current

holdings to be brought down to this level over a period of time)

Customer Service:

• LIC should pay interest on delays in payments beyond 30 days

• Insurance companies must be encouraged to set up unit linked pension plans

• Computerization of operations and updating of technology to be carried out in the

insurance industry.

The committee emphasized that in order to improve the customer services and increase

the coverage of the insurance industry should be opened up to competition. But at the

same time, the committee felt the need to exercise caution as any failure on the part of

new players could run the public confidence in the industry.

Hence, it was decided to allow competition in a limited way by stipulating the minimum

capital requirement of Rs.100 crores. The committee felt the need to provide greater

autonomy to insurance companies in order to improve their performance and enable them

to act as independent companies with economic motives. For this purpose, it had

proposed setting up an independent regulatory body.

Introduction of Future Generali India Life and Non Life

Insurance Company Limited

Company Profile

Future Generali is a joint venture between the India-based Future Group and the Italy-

based Generali Group.

Future Generali is present in India in both the Life and Non-Life businesses as Future

Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.

Future Group

Future Group, led by Mr. Kishore Biyani, is positioned to cater to the entire Indian

consumption space. The Future Group operates through six verticals:

1. Future Retail (encompassing all lines of retail business)

2. Future Capital (financial products and services)

3. Future Brands (all brands owned or managed by group companies)

4. Future Space (management of retail real estate)

5. Future Logistics (management of supply chain and distribution)

6. Future Media (development and management of retail media spaces)

The group’s flagship enterprise, Pantaloon Retail, is India’s leading retail company with

presence in food, fashion and footwear, home solutions and consumer electronics, books

and music, health, wellness and beauty, general merchandise, communication products,

E-tailing and leisure and entertainment. The company owns and manages multiple retail

formats catering to a wide cross-section of the Indian society and its width and depth of

merchandise helps it capture almost the entire consumption basket of the Indian

consumer. Headquartered in Mumbai (Bombay), the company operates through 4 million

square feet of retail space, has over 150 stores across 35 cities in India and employs over

15,000 people. The company’s revenues for FY 05-06 were Rs. 2017 crore.

Founded in 1987, as a garment manufacturing company, Pantaloon Retail forayed into

modern retail in 1997 with the opening up of a chain of department stores, Pantaloons. In

2001, it launched Big Bazaar, a hypermarket chain, followed by Food Bazaar, a

supermarket chain and went on to launch Central, a first of its kind, seamless mall located

in the heart of major Indian cities. Some of its other formats include, Collection I (home

improvement products), E-Zone (consumer electronics), Depot (books, music, gifts and

stationeries), all (fashion apparel for plus-size individuals), Shoe Factory (footwear) and

Blue Sky (fashion accessories). It has recently launched its retailing venture,

futurebazaar.com.

Some of the group’s subsidiaries include Home Solutions Retail India Ltd, Future Bazaar

India Ltd and Converge Retail India Ltd, which leads the group’s foray into home

improvement, retailing and communication products, respectively. Other group

companies include, Pantaloon Industries Ltd, Galaxy Entertainment and Indus League

Clothing. It has also entered joint venture agreements with a number of companies

including ETAM group, Gini & Jony, Liberty Shoes, Staples and Planet Sports, a company

that owns the franchisee of international brands like Marks & Spencer, Debenhams,

Guess and The Body Shop in India.

Future Capital Holdings, the group’s financial arm, focuses on asset management

through real estate investment funds (Horizon and Kshitij) and consumer-related private

equity fund, in division. It also plans to get into insurance, consumer credit and offer other

financial products and services.

Future Group’s vision is to, "deliver Everything, Everywhere, Every time to Every Indian

Consumer in the most profitable manner." One of the core values at Future Group is,

‘Indian’ and its corporate credo is – Rewrite rules, Retain values.

Generali Group

Established in Trieste on December 26, 1831, Generali is an international group present

in more than 40 countries and 5th largest company in the world with insurance companies

and companies mostly operating in the financial and real estate sectors. Its ranked is 47 th

in Global fortune list of 500’s (2009). Over the years, the Generali Group has

reconstructed a significant presence in Central Eastern Europe and has started to

develop business in the principal markets of the Far East, including China and India.

Generali Group is a key player in Continental Europe, with a significant presence

in all the principal countries.

Generali is the third largest European insurance group by premium written and the

47th largest company by revenues in the "Fortune Global 500" 2009 worldwide

ranking.

Characterised since 1831 by a strong international drive.

Implementing a decentralised multi-brand and multi-local approach.

Focused on the retail market.

Using a multi-channel distribution strategy.

Vision and values of Generali Group

Group`s Vision

We are committed to being a leading international team that produces consistent,

excellent results for our stakeholders in the short and long term.

We believe in the value of our people and we build our competitive advantage

through the commitment of every individual. We will therefore seek to produce and

to leverage constantly a pioneering spirit, innovation and excellence.

We are committed to becoming the most attractive employer for the best

performing people.

We will work constantly to enhance our group identity, proud of our history and of

the richness of our diversities.

Pioneering spirit

Inclination towards innovation and continuous search for new and better solutions, being

open to changes and being ambitious to continuously improve and innovate.

Passion for clients

Emphasis on clients and their needs, searching for the optimal solution to satisfy them

both by supplying high quality products and services as well as by providing them with

transparent and thorough information.

Responsibility

Ethical choice of accepting the consequences of one’s own actions and of being loyal to

the organization, taking the initiative and making decisions within one’s own competence

and responsibility.

Respect

Strong belief that “doing business” implies respecting the rules; rules linked to our duties

towards shareholders as well as rules affecting the relationship with all our stakeholders,

especially our employees and the community where we operate.

Flexibility

Ability to be open and to encourage others to stay open to change, to maintain and

improve work effectiveness in new situations, to adapt one’s attitude and behavior to work

effectively with different people, to readily adapt to changing priorities, new procedures

and methods, better ideas and strategies.

Integration

Ability to grow and work together by listening to each other and openly and constructively

comparing different ideas, which is fundamental to improve both oneself and business

results.

Professionalism

Continuous commitment of the individual and of the organization to develop knowledge

and to increase the value of experience, in order to achieve a specific and distinctive

know-how.

Transparency

A “must” in the exchange of opinions and information, based on clear purposes and on

behavioral coherence in order to create and strengthen confidence amongst people and

integrity in business performance.

Business activity and Mission of Generali Group

The Group`s Activity

The Generali Group is one of the most significant participants in the global insurance and

financial products market. The Group is leader in Italy and Assicurazioni

Generali, founded in 1831 in Trieste, is the Group's Parent and principal operating

Company.

Characterised from the outset by a strong international outlook and now present in 64

Countries, Assicurazioni Generali has consolidated its position among the world's leading

insurance operators. It has in fact a strong position in western Europe, its main area of

activity, with significant market shares in Germany, France, Austria, Spain, Switzerland as

well as Israel.

In recent years, the Group has made a significant return to central-eastern European

markets and has set up offices in the principal markets of the Far East, among which

China and India.

In the last decade, the Group has widened its product offerings from only insurance to

include the entire range of financial and real estate services and asset management.

The Group's Mission

The Mission of the Generali Group is to:

Become the leading insurance group in terms of profitability in the major European

countries in which the Group operates and play an important role in high-potential

markets.

Grow in the retail and SME (Small & Medium-sized Enterprises) sectors by

implementing a distribution strategy based primarily on agents networks and

focused on a multi-brand approach.

SYNERGY OF BOTH GROUPS

FUTURE GROUP

Deep Understanding of Markets & Segments

Established Brands

Sales & Distribution

Culture

Investments &

Infrastructure

GENERALI GROUP

Product Innovation Capabilities

Multifaceted distribution strategy

Processes, systems & Technology

Financial Strength

Future Generali Vision

To be the preferred Total Insurance Solutions & Services Provider enabling our

customers to fulfil their lifetime dreams and aspirations.

Future Generali Mission

To consistently ensure value creation for all our stakeholders, be it:

Customers

Business Partners

Employees

Shareholders

Community

Positioning

• Knowledge Organization with Leadership Approach

• One Stop Total Insurance Solutions & Services Provider

• Customer Centric Model embracing Passion, Convenience and Service Excellence

Objective

• To provide superior customer service through our knowledge-based business partners

and employees supported by innovative products and services

Products of Future Generali

1. Insta life

2. Future care

3. Future Assure

4. Future Sanjeevani

5. Future Pension Plan

6. Future Pension Advantage Plan

7. Future Freedom

8. Future Guarantee

9. Future Child 23

10. Future Child 21

11. Future Anand

INTRODUCTION OF LIC COMPANY

Profile of LIC

The Life Insurance Corporation of India popularly known as “LIC of India” was

incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign

companies. It was established 52 years ago with a view to provide an insurance cover

against various risks in life. The luminaries who spearheaded this move at that time

visualized an entity that will provide life insurance to Indians, especially the vast rural

masses, at an economical cost and channel the savings for the betterment of the nation.

It is the largest life insurance company in India and also the country’s largest investor. It is

fully owned by the Government of India and headquartered in Mumbai.

LIC Housing Finance

Incorporated on June 19, 1989; its main objective is to provide long term finance for

construction or purchase of houses or apartments. The company provides long terms

finance to individuals for purchase, construction, repair and renovation of new \ existing

flats\houses. It also provides finance on existing property for business, personal needs

and gives loans to professionals for purchase or construction of clinics\ nursing homes\

diagnostic centers\office space and also for purchase of equipments. It has set up

representative office in Dubai and Kuwait to cater to the non- resident Indians in countries

covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. It has client group of over 9,

40, 000prudent house owners who enjoy the company’s financial assistance.

LIC Housing Finance Limited Care Homes

It is a Wholly-owned subsidiary of LIC Housing Finance. It builds and operates “Assisted

Community Living Center” for senior citizens. It operates a network of approximately 6

regional offices, 13 back offices, and 127marketing offices.

Vision

“To emerge as a transnational competitive financial conglomerate of significance to

societies and be the pride of India”.

Mission

Explore and enhance the quality of life of people through financial security by providing

products and services of aspired attributes with competitive returns and by rendering

resources for economic development.

Objective of LIC

Spread life insurance widely in particular to the rural areas and socially and

economically backward classes. This is done with a view to reach all the insurable

persons in the country and provide them adequate financial cover against death at

a reasonable cost.

To maximize mobilization of people’s savings by making insurance linked savings

adequately attractive.

Bearing in mind, the primary obligation to its policyholders, whose money it holds

in trust, the investible funds to be deployed to the best advantage of the investors

as well as the national priorities and the obligations of attractive returns.

To conduct business with utmost economy and keeping in mind that the money

belongs to the policyholders.

It acts as a trustee of the insured public in its individual and collective capacities.

To meet the various life insurance need of the community that would arise in the

changing social and economic environment.

It ensures that all people working in the corporation are involved to the best of their

capability in furthering the interests of the insured public by providing efficient

service with courtesy.

Promote amongst all agents and employees of the corporation a sense of

participation, pride and job satisfaction through discharge of their duties with

dedication towards achievement of corporate objective.

Board of Directors

Products and Services

LIC has eight zonal offices and 105 divisional offices located in different parts of India. It

compromises of 2,048 branches and employs over 10, 02, 149 agents for soliciting life

insurance business from public. LIC has extended its activities in 12 countries from

outside India, primarily to cater to the insurance needs of non-resident Indians. LIC aims

at strengthening it relationship with its vast customer base by providing value-added

service such as credit cards and offering premium payment facility to the policyholders. It

is the largest insurance player in India and its objective is to channelize its funds for the

benefit of the community at large. It enjoys a near monopoly power in the solicitation and

sale of life insurance policies in India. The corporation has major business houses as

clients, under the group business of India. It has more than 1, 18,000 corporate clients

covering more than 3, 15, 00,000 members. Apart from the corporate group insurance

business the pension& group schemes is responsible for ‘Aam Aadmi Bima Yojna’,a

social security schemes for the rural landless households under the aegis of the

Government of India.LIC has been investing a major portion of its funds in socially-

oriented sectors with a view to reach every insurable person in the country and provide

adequate financial cover against death at a reasonable cost. Another goal is to mobilize

people’s savings adequately attractive.LIC has recently tied up with Policybazaar.com an

insurance portal that enables the consumers to get detailed information on the policy. It is

Chairman TS Vijayan

Managing Director D.K. Mehrotra, Thomas Mathew

Finance Secretary and SecretaryDepartment of Financial Services,Ministry of finance, Govt. of India

Arun Ramanathan

Addl. Secretary, Dept. of Economic

Affairs, Ministry of Finance

Sindhushree Khullar

one of the leading online non-life and life insurance aggregator to sell its policy Jeevan

Aastha on the internet.

Products

Children Plans

Jeeevan Anurag

CDA Endowment Vesting at 21

CDA Endowment Vesting at 18

Jeevan Kishore

Child Career Plan

Child Fortune Plus

Marriage Endowment or Educational

Annuity Plan

Jeevan Chhaya Child future Plan

Plans for Handicapped Dependents

Jeevan Aadhar

Jeevan Vishwas

Endowment Assurance Plans

The Endowment Assurance Policy

The Endowment Assurance Policy-Limited Payment

Jeevan Mitra (Double Cover Endowment Plan)

Jeevan Mitra (Triple Cover Endowment Plan)

Jeevan Anand

New Janraksha Plan

Jeevan Amrit

Money Back Plans

Jeevan Varsha

The Money Back Policy-20 years

The Money Back Policy-25 years

Jeevan Surabhi-15 Years



Bima Bachat

Special Money Back Plan for women

Jeevan Bharti-1

Whole Life Plans

The Whole Life Policy

The Whole Life Policy –Limited Payment

The Whole Life Policy – Single Premium

Jeevan Anand

Jeevan Tarang

Term Assurance Plans

Two year Temporary Assurance Plan

The Convertible Term Assurance Policy

Anmol Jeevan- 1

Amulya Jeevan -1

Joint Life Plan

Jeevan Sathi

Decreasing Term Assurance To Cover Home Loan Payment

Mortgage Redemption

Pension Plans

Jeevan Nidhi

Jeevan Akshay-VI

New Jeevan Dhara-I

New Jeevan Suraksha-I

Group Scheme

Group Term Insurance Schemes

Group Term Insurance Scheme in Lieu of EDLI

Group Leave Encashment Scheme

Group Mortgage Redemption Assurance Scheme

Gratuity Plus

Group critical Illness Rider

Plans for High Worth Individuals

Jeevan Shree-1

Jeevan Pramukh

Unit Linked Plans

Market Plus –I

Profit Plus

Fortune Plus

Money Plus-I

Child Fortune Plus

Special Plans

Golden Jubilee Plan

New Bima Gold Special Plan

Bima Nivesh 2005

Jeevan Saral

Jeevan Madhur

Social Security Scheme

Janashree Bima Yojna (JBY)

Siksha Sahayog Yojana

Aam Admi Bima Yojana

Unit linked insurance plans (ULIPs)

ULIPS are insurance plans that combine the benefit of investment with insurance. They

give the investor an option to put a part of their premium in various investment portfolios

and derive the benefits depending upon the performance of the funds chosen by them.

ULIPs were launched at an opportune time when stock markets had just taken off. Being

market- linked, they were major beneficiaries of the secular rise in stock markets. ULIPs

have gained high acceptance due to the attractive features they offer.

These include:

1. Flexibility

Flexibility to choose Sum Assured.

Flexibility to choose premium amount.

Option to change level of Premium even after the plan has started.

Flexibility to change asset allocation by switching between funds.

2. Transparency

Changes in the plan & net amount invested are known to the customer.

Convenience of tracking one’s investment performance on a daily basis.

3. Liquidity

Option to withdraw money after few years

Low minimum tenure.

Partial / Systematic withdrawal allowed

4. Fund Options

A choice of funds (ranging from equity, debt, cash or a combination).

Option to choose fund mix based on desired asset allocation.

Traditionally, endowment plans have invested in government securities, corporate bonds

and the money market. ULIPs however, have a broader choice. They invest across the

board in stocks, government securities, corporate bonds and money market instruments.

Of course, within a ULIP there are options wherein equity investments are capped. The

common types of funds available in ULIPs are Bond Fund, Protector Fund, Secure Fund,

Balanced Fund, Growth Fund, Index Fund, and Enhancer Fund. Depending on one’s risk

appetite one can choose the fund. However the investment risk is borne by the investor.

The common type of charges, fees and deductions in ULIPs are Premium allocation

charges, Mortality charges, Fund management charges, Policy/administration charges,

Surrender charges, Fund switching charges and Service tax.

Insurance companies are required to declare the NAV of various ULIPs on a daily basis.

The movement of NAV enables the policy holder to assess the performance of his

investment and accordingly make intervention in the form of switches, withdrawal and

top-ups. After opening up of the insurance sector, Unit-linked insurance policies (ULIPs)

have become increasingly popular.

Achievements of LIC :

Golden Peacock Innovative Product / Service Award – 2009

Loyalty Award 2009

Readers Digest Trusted Brand Award 2008 in the Platinum category

CNBC Awaaz Consumer Awards 2008

Departmental details

The organization having such a huge size has to have a well defined hierarchical

structure and LIC is not an exception to this fact. A well defined proper organization

structure with officials with exact knowledge of their duties is a must for an organization to

prosper. LIC has a vast network of offices across the length and breadth of our country

and abroad so it has defined and maintained its organizational structure in the following

way. LIC has its main central head office at ‘Yogaakshema’ Jeevan bima marg at

Mumbai. Then it is followed by eight zonal offices namely central zone, eastern zone,

east central zone, northern zone, north central zone, southern zone, south central zone,

western zone respectively. After these eight zonal offices there are several divisional

offices under each zonal office and these divisional offices are mostly in each big city. At

last comes the branch office and there are several branch offices under each divisional

office. At all the branch offices there is a branch manager and several departments and

the major function of these branch offices is sales and servicing of the policies. In a

branch office the top most is a branch manager and under his control are seven different

departments with each of these departments functioning independently to each other.

These seven departments are as follows:

1. Sales Department – This department is mainly concerned with the sale of new

policies and is headed by Assistant Branch Manager Sales (ABMS). The internal

agent of LIC is the Development Officer who has the job of communicating and

training the Free Lancing agents. It is the development officer who continuously

encourages the agents to get new business and the income, performance and

commission through policy selling comes under the jurisdiction of this department.

2. New Business Department – This department performance the very important

function of underwriting new policies which are sent to it for authentication. It checks

that all the information provided by the customer is true and the proposal form and all

other details and proofs are legal. After scrutinizing the new policy it issues the first

premium receipts (FPR) and then issues the policy bond. If anything is found

insufficient the proposal form is sent back to the sales department to correct the

mistake and again submit it.

3. Policy Service Department – After the policy bond is issued, the case is passed

on to this department to take care of after sales service of the policy. It takes care of

the premium dates and if the policy is lapsed then its revival is done by this

department. Also if any loan is required by the customer against his/her policy then its

approval has to be given from the policy service department only.

4. Accounts Department – It is responsible for processing of all the cheques and

loans which come to it. The details regarding financial aspects are covered under this

department.

5. Claims Department – All types of claims i.e. survival benefit claim, maturity claim

and death claim are settled by this department. In case of death claim if death occurs

after three years then no investigation is involved in the settlement process and if it

occurs before three years then proper investigation is done and the claim is

considered to be an early claim case.

6. Micro Department – This department has the all important function of co-

coordinating with each department. Each day’s business is collected and its four

copies are made and one copy is sent to the divisional office, second is submitted to

the branch manager, and third remains with the in charge of micro department and

fourth in the branch office.

7. Office Service Department – This department takes care of all miscellaneous

tasks of office and dispatch of cheques, loans etc come under the responsibility of this

department.

RESEARCH METHODOLOGY

A Research Design is the framework or plan for a study which is used as a guide in

collecting and analyzing the data collected. It is the blue print that is followed in

completing the study. The basic objective of research cannot be attained without a proper

research design. It specifies the methods and procedures for acquiring the information

needed to conduct the research effectively. It is the overall operational pattern of the

project that stipulates what information needs to be collected, from which sources and by

what methods.

Title of the study

The title of this study is to carry on brief study on “Comparison between Future Anand

Plan and LIC Jeevan Anand plan”

About Future Anand Plan

Future Anand Plan = Endowment + whole life cover + premium holiday + guaranteed

additions + compounded bonuses & more.

Future Anand is a unique combination of whole life & endowment assurance , the all time

favorite of true Indian conservative and savings savvy customer , an economical way of

taking two covers in a single policy and still paying much less than two policies.

Future Anand is a traditional wealth creation plan for future financial security. The

customer can choose a short premium payment term & get back the sum assured along

with guaranteed additions and bonuses as maturity benefit and also stay insured till 99

yrs for 125% of life cover after premium paying term. Minimum premium paying term is 8

years & maximum is 20 years. Rs. One lac is the minimum sum assured (insurance

cover) which can be taken under this plan. It is available for persons between ages of 12

– 62 years.

Future Anand comes with guaranteed additions of 3.5% per annum for first 5 years which

are compounding year after year & from 6 th year onwards policy earns compounded

reversionary bonuses. On death during the premium paying term, sum assured along with

guaranteed additions & vested bonuses (if any) plus terminal bonus is payable. On death

of life assured after premium paying term, 125% of sum assured along with terminal

bonuses is payable to the nominee. The plan comes with 5 optional riders to take

additional cover against accidental death , accidental total permanent disability , waiver

of premium on disability , critical illness rider and term assurance rider . The policy can

be surrendered or loan can be availed up to 90% of surrender value. There are large sum

assured discounts on premium and the premium payment modes can be annual,

semiannual, quarterly or monthly ECS depending on the choice of the customer. Special

feature of this plan is the Premium Holiday “Auto cover” wherein one can choose not to

pay premium for up to 2 years while the life cover continues.

In an era where customers lost confidence on markets and are looking for conservative

guaranteed returns, Future Anand would be the right preferred life insurance plan by both

urban and rural customers.

Sales & Marketing / Positioning:

The plan is basically a double benefit endowment / savings plan mainly targeted at

customers in the age group of 25-50. This can also be pitched as

1. A savings plan for couples having children who would require cash flows at the

end of a certain period ( say a person has a child of three yrs and plans an

expensive education after say 15 yrs then the premium paying term can be

suitably taken so that the maturity benefits can be used for the event planned)

2. Position as a family plan for a holiday after say 10 year / 20years / Silver or golden

jubilee wedding Anniversary celebrations etc.

3. Plan retirement with the maturity proceeds ( buy annuity with the maturity

proceeds)

4. Plan first home say at age 30 / second home at age 45 etc. The maturity proceeds/

loan on the policy can be used for seed money for the housing loan etc.

5. Maturity Proceeds can be planned to meet the expenses of daughter’s marriage /

son’s higher education etc.

6. The following are the additional features of the Future Anand product and has a

clear edge over LIC’s Jeevan Anand.

Key Features

Financial security with lifetime coverage.

You can select your premium payment mode, sum assured and premium payment

term as per your age and choice.

Guaranteed additions @ 3.5% of sum assured per annum compounding at the end

of each of the first five policy years

Compounded reversionary bonuses thereafter

Endowment benefit of 100% of sum assured plus guaranteed additions plus vested

bonus (if any) on survival at the end of premium paying term.

125% of the sum assured and terminal bonus (if any) as a lump sum on your

demise after the premium paying term.

Sum assured with accrued guaranteed additions plus vested bonus (if any) plus

terminal bonus (if any) on your demise payable during the premium paying term.

Discount on large sum assured.

Choice of five riders to top-up your basic plan.

Auto cover available after the policy is in-force for three years.

Tax benefits on premiums paid and benefits received.

Benefits

1. Endowment benefit

We will pay 100% of sum assured along with guaranteed additions and vested bonus (if

any) at the end of the premium paying term.

2. Death benefits during the premium paying term

In case of your demise, we will pay an amount equal to the sum assured along with

guaranteed additions and vested bonus (if any) and terminal bonus (if any).

3. Death benefits after the premium paying term

In case of your demise, we will pay an amount equal to 125% of the sum assured and

terminal bonus (if any) to the nominee.

In case of death of a minor life assured (age below 18 years as on last birthday), the

death benefit becomes payable to the policyholder (proposer).

4. Guaranteed additions

The compounding annual guaranteed additions under the policy are 3.5% per annum of

the sum assured for the first five years of an in-force policy. This amount will become

payable only at end of the premium paying term.

5. Bonuses accrued

From the sixth year onwards, the policy shall participate in the profits arising out of the

company’s ‘with profits’ life insurance business. It gets a share of the profits emerging

from this business in the form of bonuses. Compounded reversionary bonuses would be

declared as a percentage rate, which apply to the sum assured and guaranteed additions

in respect of the basic policy benefit and all attached bonuses. Compound reversionary

bonus will be declared based on our long term view of investment returns, expenses,

mortality and other experiences. Once declared, the reversionary bonuses form part of

the guaranteed benefits to the plan. Future bonuses are, however, not guaranteed and

will depend on future profits of the company. The company may also declare a terminal

bonus, depending on experience, that will be paid along with death benefit.

Tax benefits

Tax benefits are available u/s 80C and 10(10D) of the Income Tax Act. For further details

consult your tax advisor. Tax benefits are subject to change from time to time. Future

Group’s and Generali Group’s liability is restricted to the extent of their shareholding in

Future Generali India Life Insurance Company Limited.

Disclaimer:

For detailed information on this product including risk factors, terms and conditions etc.,

please refer to the product brochure, consult your advisor or visit our website before

concluding a sale. Tax benefits are subject to change. Insurance is the subject matter of

solicitation.

Rider Options Benefits:

Term assurance rider Additional amount, equal to the sum assured selected under this

benefit is paid, in case of death due to any cause. Accident death rider Additional amount,

equal to the sum assured selected under this benefit is paid, in case of death due to an

accident. Accidental total and In case of the life assured becoming totally and permanent

disability permanently disabled due to an accident, the rider sum assured is paid in 10

equal annual installments. In case of the death of the life assured, surrender or maturity

of the Policy occurring before the payment of all installments, the balance of the

installments is payable in lump-sum. Wavier of premium on All future premiums (including

rider premiums) disability rider will be waived on accidental total and permanent disability

Critical illness (core) Amount equal to the sum assured selected under this rider benefit is

paid on diagnosis of any one of the six critical illnesses (cancer, stroke, kidney failure,

CABG, heart attack and major organ transplant). The sum assured is payable on survival

for 28 days from the onset of any of these critical illness / conditions.

Rider Benefits

Eligibility Criteria

The plan is available for individuals who are under the age bracket of 12 to 62 years (as

on last birthday) you may choose a sum assured as low as Rs. 1, 00,000. The maximum

will depend upon the underwriting guidelines of the company Premium paying mode:

Regular premium mode only. You may pay yearly, half-yearly or quarterly premiums. In

case of monthly mode, premiums can be paid under the ECS method only. In case of

quarterly mode where installment premium is less than Rs. 2,500/-, premiums can be

paid under ECS method only.

Premium paying term: Min - 8 years, Max - 20 years

Maximum maturity age to receive survival benefits: 70 years

Policy term: 99 years - current age of customer

For policyholders buying large sum assured levels, a large size discount / rebate is

available as given below:

Sum assured (Rs.) of Future Anand (in Rs. Per 1000 sum assured)

>= 2 lakh; < 3 lakh 4.50

>= 3 lakh; < 4 lakh 5.00

>= 4 lakh 5.50

Large Sum Assured Discount

About LIC Jeevan Anand Plan

Jeevan Anand = Endowment Assurance + Whole Life plan

Jeevan Anand is the combination of Endowment Assurance and Whole Life plan.

The risk cover will continue even after the maturity that means “Zindagi Ke Saath Bhi

Zindagi Ke Bad Bhi…” Jeevan Anand plan no. 149 provides financial protection against

death throughout the lifetime of the life assured with the provision of payment of a lump

sum at the end of the selected term in case of his survival.

For Example: Mr. Pankaj, age 25 years, takes Jeevan Anand policy for 25 years for Sum

Assured Rs. 1 lakh. Now on Maturity Pankaj will receive Rs. 2, 12,500/- (Rs. 1 lakh sum

assured Plus Rs.1, 12,500/- is the estimated bonus at Rs.45/- per thousand per year.)

In case, Mr. Pankaj, dies (After premium paying term is over) at the age of 60 years, his

nominee will get additional Rs. 1 lakh equal to sum assured amount. Since Mr. Pankaj

has already received the bonus, LIC will not pay second time bonus.

In case, Mr. Pankaj dies during the Premium Paying Term, his nominee will get Rs.1 Lakh

(sum Assured) + Accrued bonus till Mr. Pankaj’s death.

Key Features:

1. Jeevan Anand is the combination of Whole Life and Endowment Assurance

plan.

2. Even after the Premium Paying Term (PPT) is over, risk cover continues till the

death of the policy holder.

3. Accident Benefit is available during the Premium paying term adn thereafter

upto age 70.

4. Limited premium payments.

5. Double accidental cover upto age 70.

6. Tax Saving

Special Features

1. Moderate Premiums

2. High bonus

3. High liquidity

4. Savings oriented.

Premiums are usually payable for the selected term of years or until death if it occurs

during the term period. This policy not only makes provisions for the family of the life

assured in the event of his early death but also assures a lump sum at a desired age. The

lump sum can be reinvested to provide an annuity during the remainder of his life or in

any other way considered suitable at that time.

Benefits

Survival Benefits:

Sum Assured along with all vested bonuses payable at the end of the premium paying

term (Endowment term).

Accident Benefit :

The Double Accident benefit is available during the premium paying term and thereafter

up to age 70. The premium for this has been built into the tabular premium rates.

Maximum accident cover available under this plan will be Rs. 5 lakh ( this limit excludes

accident benefit taken under other plans).

Premium Stoppage:

If payment of premiums ceases after at least three years' premiums have been paid , a

free paid-up policy for a reduced Sum Assured will be automatically secured provided the

reduced sum assured, exclusive of any attached bonus, is not less than Rs. 250/-. The

reduced sum assured will become payable on the event as stipulated in the policy.

Bonus:

If it is a 'with profits' policy note that every year the LIC distributes its surplus among

Policyholder to 'with profits' polices in the form of bonuses. Substantial bonuses have

been declared in the past after each valuation of policy liabilities.

Comparative Study of Future Anand Plan vs LIC Jeevan Anand Plan

On the basis of features

Key features of Future Anand

Financial security with the coverage for life time.

You can select your premium payment mode, sum assured and premium payment

term as per your age and choice.

Guaranteed Additions @3.5% of Sum Assured per annum compounding at the end

of each of the first 5 policy years.

Compounded Reversionary bonuses thereafter.

Endowment Benefit of 100% of Sum assured plus guaranteed additions plus

vested bonus (if any) on survival at the end of premium paying term.

125% of the Sum Assured and terminal bonus (if any) as a lump sum on your

unfortunate death after premium paying term.

Sum Assured with accrued guaranteed additions plus vested bonus (if any) plus

terminal bonus (if any) on your unfortunate demise payable during the premium

paying term.

Discount on large Sum Assured.

Choice of five riders to top up your basic plan.

Auto Cover available after the Policy is in-force for 3 years.

Tax benefits on premiums paid and benefits received.

Key features of Jeevan Anand

Jeevan Anand is the combination of Whole Life and Endowment Assurance plan.

Even after the Premium Paying Term (PPT) is over, risk cover continues till the

death of the policy holder.

Accident Benefit is available during the Premium paying term and thereafter up to

age 70.

Limited premium payments.

http://www.mylicindia.com/

Double accidental cover up to age 70.

Tax Savings

On the basis of features

Future Anand LIC’s Jeevan Anand

Guaranteed addition of 3.5% of SA

per annum compound for the first 5

years

Simple reversionary bonus from 1st

year

Compound reversionary bonus

from 6th year

Same as above

Death benefit after premium paying

term is 125 % of SA

Death benefit after premium paying

term is 100 % of SA

Premium holiday of two years

anytime after three years premium

has been paid

No premium holiday

Accidental Death Benefit upto Rs. ADB in built , but maximum is 5 Lac

Future Anand Plan vs LIC Jeevan Anand Plan

On the basis of age

Future Anand

Minimum Entry age- 12 years

Maximum Entry Age- 62 years

Max. PPT Mat. Age- 70 years

Jeevan Anand

Minimum Entry Age- 18 Years completed

Maximum Entry Age - 65 Years

Max. PPT Mat. Age- 75 years

Future Anand Plan vs LIC Jeevan Anand

On the basis of Premium Paying Term

Future Anand LIC Jeevan Anand

Minimum 8 5

Maximum 20 57


(On the basis of sum assured)

Future Anand

Minimum Sum Assured: Rs. 1, 00,000/-

Maximum Sum Assured: depend upon the underwriting guidelines of the company.

Large Sum Assured Discount: For policyholders buying large sum assured levels, a large

size discount / rebate is available.

Jeevan Anand

Minimum Sum Assured: Rs. 1, 00,000/-

Maximum Sum Assured: No Limit


On the basis of survival benefit

Future Anand

The maturity value is equal to sum assured along with the vested bonuses and

guaranteed additions after completion of premium paying term.

Jeevan Anand

Benefits in case of survival to the end of selected term - the sum assured along with

the vested bonuses is payable on death in a lump sum on survival to the end of the term.

An additional Sum Assured is payable on death thereafter.


On the basis of death benefit

Future anand

Death Benefits during Premium Paying Term –

In case of your unfortunate demise, we will pay an amount equal to Sum

Assured along with Guaranteed Additions and Vested Bonus (if any) and

Terminal Bonus (if any).

Death Benefits after Premium Paying Term _

We will pay an amount equal to 125% of the Sum Assured and Terminal Bonus

(if any) to the nominee).

Jeevan anand

Sum Assured along with vested bonuses are payable on death during the premium

paying term. An amount equal to the Sum Assured is payable if death occurs after the

premium paying term. Simple Reversionary Bonus accrues during the premium paying

term and is payable at the end of the premium paying term or on earlier death along with

final additional bonus, if any. No Bonus is paid on death after the premium paying term.

Future Anand Plan vs. LIC Jeevan Anand

On the basis of Surrender Value

Future Anand

Guaranteed Surrender Value:

As defined in Sec 113 of the Insurance Act 1938, the guaranteed surrender value will be

set equal to 30% of premiums paid under the base policy (excluding any extra premium

for occupation, non-standard age proof and non-standard lives) excluding the premium in

the first policy year under regular premium policies less any amount paid to the

policyholder. The guaranteed surrender value will become payable after three years of

annual premiums have been paid and is available during the policy term.

A discounted value of the guaranteed additions and bonuses allocated to the policy will

also bead. The current rate of discount will be 9% per annum. This rate is subject to

change from time to time.

Jeevan anand

Guaranteed Surrender Value:

The policy may be surrendered after it has been in force for 3 years or more. The

guaranteed surrender value is 30% of the basic premium paid excluding the first year’s

premium. Any extra premium paid and premium towards accident benefit are also

exclude.


On the basis of accident benefit

Future Anand

Accidental Death Benefit upto Rs. 30 lac is available as a rider.

Jeevan Anand

Accident Benefit an additional sum assured (subject to a limit of Rs.5lac) is payable in a

lump sum on death due to accident up to age 70 of life assured.


On the basis of premium paying mode

Future anand

Premium paying mode:

Regular premium mode only. You may pay yearly, Half-yearly or quarterly premiums. In

case of monthly mode, premiums can Be paid under the ECS method only. In case of

quarterly mode where Installment premium is less than Rs. 2,500/-, premiums can be

paid under ECS method only.

Jeevan anand

Premium paying mode:

Premium can pay yearly, half-yearly, quarterly, monthly or through salary deductions as

opted by you throughout the selected term of the policy or till earlier death.


(On the basis of withdrawal)

Future anand

Complete or partial withdrawals are available after 8 years (if the policy term is 99).

Jeevan anand

Partial / Systematic withdrawal allowed. Option to withdraw money after few years

(comfort required in case of exigency.

Duration of the project

Research duration of the study- 45 days

Objective of my research

Comparison between Future Anand & LIC Jeevan Anand.

To analysis the details of Future Anand and LIC Jeevan Anand.

To know which product given the best facilities to customer.

To find out factors that influence customers to purchase insurance policies and

give suggestions for further improvement.

Type of research

Framing of questionnaire keeping objectives in mind (considering the objectives)

Feedback from the employees

Analysis of feedback

Conclusion, findings and suggestions.

Being a comparative study of two products the researcher selected Future Anand plan of

Future Generali India Insurance Company and LIC Anand plan of LIC of India insurance

company. The study is mainly based on primary data collected from field source.

The primary data is collected through a comprehensive interviews, schedules and

discussions with the customers and employees of Future Generali Company.

Secondary data is collected from various bibliographical sources such as journals,

novels, magazines, publications and various websites including the official website of

IRDA, LIC and various other company websites. The published research reports and

market studies also helped the researcher to guage into the problem.

Sources of Data Collection:

Research will be based on two sources:

PRIMARY SOURCES

These include the survey or questionnaire method, telephonic interview as well as the

personal interview methods of data collection.

SECONDARY SOURCES

These include books, the internet, company brochures, product brochures, the company

website, competitor’s websites etc, newspaper articles etc

Sample size

For the survey, a sample size of 50 has been taken into consideration.

Statistical Tools Used

The main statistical tools used for the collection and analyses of data in this project are:

Questionnaire

Pie Charts

Scope of study

The scope of the study lies in finding out the perception of customers in Jodhpur City.

Through responses taken by 100 customers during a period of 45 days and highlighting

the key areas which require some concern on part of FGI of India and improving upon

which the product is demanded. The present study, analysis, findings and suggestions

proposed by the present researcher will be of immense use for future researcher with

similar studies in insurance market.

Limitation of study

Due to the following unavoidable and uncontrollable factors the factors, the result might

not be accurate. Some of the problems faced while conducting the survey are as follows:-

Time and cost constraints were also there.

Chances of some biasness could not be eliminated.

A Samples size of fifty has been use due to time limitations.

A majority of respondents show lack of cooperation and are biased towards their

own opinions. Some of the persons were not so responsive.

Possibility of error in data collection because many of investors may have not

given the actual answers of my questionnaire.

No. of Respondents

62%

38%

Yes

No

Some respondents were reluctant to divulge personal information which can hinder

the validity of all responses.

The research study was confined to Jodhpur city only.

Analysis and Interpretation

Q1. Are you currently insured?

Particulars No. of Respondents Percentage

Yes 31 62

No 19 38

Total 50 100

ANALYSIS:

From the survey it was found that amongst 50 respondents.

a) 62% of the respondents are already insured.b) 38% of the respondents are not insured.

Q2. Are you satisfied with your current insurance product?


Yes 41 82

No 9 18

Total 50 100

No. of Respondents

41

9

Yes

No

From the survey it was found that amongst 50 respondents

a) 82% of the respondents are satisfied.b) 18% of the respondents are not satisfied.

No. of Respondents

3012

8

No

Yes Can't Say

Q3. Are you interested in the product Future Anand offered by FGI ?


No 30 60%

Yes 12 24%

Can’t Say 8 16%

Total 50 100%

ANALYSIS:

From the survey it was found that amongst 50 respondend

a) 60% of the respondents are not attracted towards Future Anand

b) 24% of the respondents are attracted towards Future Anand.

c) 16% of the respondents Can’t Say about it.

Q4.Are you interested in the productJeevan Anand offered by LIC?


Yes 35 70%

No 13 26%

Can’t Say 2 4%

Total 50 100%

70

26

4

No. of Respondents

YesNoCant Say

ANALYSIS:

From the survey it was found that amongst 50 respondend

a) 70% of the respondents are attracted towards Jeevan Anand

b) 26% of the respondents are attracted towards Jeevan Anand.

d) 4% of the respondents Can’t Say about it.

Q5. Which one is your favored insurance company?


LIC Jeevan Anand 35 70%

Future Anand 15 30%

Total 50 100%

70

30

LIC Jeevan anandFuture anand

Q6. What motivates you to purchase insurance/investment plans?


a) 70% of the respondents are in favour of Jeevan Anandb) 30% of the respondents are in favour of Future Anand

10

1221

7

No. of Respondents

Advertisements

Friends and Relatives

Direct Selling Agents

Others

ANALYSIS:


a) 20% of the respondents know about it from Advertisements.

b) 24% of the respondents know about it from Friends and Relatives.

c) 42% of the respondents know about it from Direct Selling Agents.


Advertisements 10 20%

Friends and Relatives 12 24%

Direct Selling Agents 21 42%

Others 7 14%

Total 50 100%

Q7. Please express your opinion for the premiums paid for the

above policies?


Very High 14 28%

High 11 22%

Moderate 13 23%

Low 8 16%

Very Low 4 8%

Total 50 100%

ANALYSIS:


a) 28% of the respondents think that Premium is Very High.

b) 22% of the respondents think that Premium is High.

c) 23% of the respondents think that Premium is Moderate.

d) 15% of the respondents think that Premium is Low.

e) 12% of the respondents think that Premium is Very Low.

14

1113

8

4

No. of Respondents

Very HighHighModerateLowVery Low

Q8. Are you satisfied with the incentives (tax benefits or

Bonuses) associated with your policy?

ANALYSIS:


a) 24% of the respondents are satisfied.b) 20% of the respondents are Moderate.c) 18% of the respondents are Highly Satisfied.d) 22% of the respondents are Unsatisfied.e) 16% of the respondents are Highly Unsatisfied.

9

12

10

11

8

No. of Respondents

Highly Satisfied

Satisfied

Moderate

Unsatisfied

Highly Unsatisfied

Rating No. of Respondents PercentageHighly satisfied 9 18%

Satisfied 12 24%

Moderate 10 20%

Unsatisfied 11 22%

Highly Unsatisfied 8 16%

Total 50 100%

Findings

According to my survey the noteworthy points are:

Most of the people buy life insurance as just a tax benefit tool or as a life cover

while only a few of the respondent take it as a saving option. The reason for this is

lack of knowledge of insurance benefits among the people.

A Majority of the respondent buy insurance products because of the need reason

while rest of the respondents buy for the brand purpose.

A Majority of the people come to know about the policies from the Direct Selling

Agents.

A Majority of the people are satisfied by the riders associated with their policies

offered in Future Anand

Most of the respondents are satisfied by the services offered by there insurance

company while some says that they are not satisfied by the services.

Most of the respondents want more Transparency from the side of the company

regarding both the products.

SWOT ANALYSIS of FGI

STRENGTHS:

Future Generali India Insurance Company is the largest private player in

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

Future Generali India Insurance Company has deposited a paid up capital

of Rs 925 crore with IRDA caution deposit, the highest among all the life

insurance company in India where as LIC has deposited Rs 60 crore so far.

Future Generali India Insurance Company is the first life insurance company

to offer ECS debit facility and riders benefits.

Future Generali India Insurance Company is the first company to introduce

unit link life insurance and pension products. Presently the maximum

numbers of ranges are under ULIP life insurance, investment as well as

pension plan

Products:

Flexibility to switch your fund value at your own discretion four

times a year viz. maximizer, protector, balancer, preserver.

Greater transparency-policy holder knows what is happening to

his money and where the company has invested his money.

Liquidity options-you can make complete or partial withdrawals

any time after 3 years.

Life insurance plans are eligible for deduction under sec 80.

WEAKNESSES:

i. Industry in nascent stage.

ii. Rural areas still not covered.

iii. Not very known among Indian population.

iv. Lack of credibility among the people because Future Generali

India Insurance Company being a private player.

v. Premiums are high as compared to its competitors.

vi. Very few branches in the country.

vii. Products:

The policy doesn’t have the surrender option before third

year.

Plan does not offer any guarantee or assured return.

Product profile is not very comprehensive.

Mortality, management and administrative charges are

sky scrapping as compared to its competitors.

OPPORTUNITIES

i. Liberalization of Indian economy.

ii. As the industry is growing the whole market is virgin.

iii. The whole private sector is opened to be trapped even though

the competition is fierce from government owned insurance

companies.

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

corporate the turnover cease to increase by manifold.

v. Products:

Preserver funds look good due to comfortable liquidity in the

economy and there is little chance hike in short-term rate by

RBI.

Finance minister unveiled a budget favoring consumer

spending, boosting demand and therefore higher economic

growth.

THREATS

i. The government players will become aggressive thus growth is

going to be tough.

ii. Entry of other players is not ruled out.

iii. Apprehension towards FGI being a private life insurance

company.

iv. We expect the industry to rationalize in future that is mergers

and acquisitions will happen, which will impact the industry and

FGI fortunes.

v. 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 plan

will be achieved.

All benefits payable under the policy are subject to tax

laws and other financial enactment, as they exist from

time to time.

CONCLUSIONCONCLUSION

After overhauling the all situation that boosted a number of products associated with

multinational in the Insurance Sector to give befitting competition to the established

behemoth FGI in private sector, we come at the conclusion that:

There is very tough competition among the private insurance companies on the

level of new trend of advertising to lull a major part of Customers.

FGI is not left behind in the present race of advertisement.

The entry of more Pvt. Players in the Insurance Sector has expanded the product

segment to meet the different level of the requirement of the customers. It has

brought about greater choice to the customers.

FGI has vast market and very firm grip on its traditional customers and monopoly

of life insurance products.

So according to the data available form the survey one can conclude that even though

the LIC Jeevan Anand Plans are very much popular in Metro and semi cities, the product

awareness of Future Anand is very low among the people. The company faces a large

amount of competition. To sustain itself it must promote its products through advertising

and improve its selling techniques. Consumers must be aware of the new plans available

at Future Generali Indian Insurance Company. The medium of advertising used could be

television since most of its competitors use this tool to promote their products. The

company must be promoted as an India company since consumers seem to have more

trust in investing in Indian firms. The unit linked concept must be specifically promoted.

The general perception of life insurance has to change in India before progress is made

in this field. People should not be afraid to invest money in insurance and must use it as

an effective tool for tax planning and long term savings. Future Generali India Insurance

Company could tap the rural markets with cheaper products and smaller policy terms.

There are individuals who are willing to pay small amounts as premium but the plans do

not accept premiums below a certain amount. It was usually found that a large number of

males were insured compared to females. Individuals below the age of 30 were interested

in investment plans. This was a general conclusion drawn during prospecting clients.

People of city and at the same time there is a need to create the different image of the

company among the people by any means like advertisement, seminars or meetings.

Suggestions

The study has provided with the useful data from the respondents. There has a lot to be

recommended. Following are the recommendations:

There is a need for better promotion for the investment products & services. The

FGI should advertise its products through television because it will reach to the

masses.

More returns should be provided on Insurance plans.

As the bank provides the Insurance facility to its customers. It should provide this

facility by tie up with the other Insurance organizations as well. The main reason

is that, the entire customers do not want Insurance of only one company. They

should have choice while selecting a suitable Insurance plans.

Advertise about the company and its products it motivate individuals to purchase

insurance

Create a positive perception about insurance

Speak about the good features a plan offers like high returns, life cover, tax

benefits, indexation, accident cover while prospecting customers

Try to sell the product/plan which the consumer requires and not the plan where

the advisors benefit is higher

Improve the efficiency in operations

Bring out policies with small premiums payable for short periods of time – Rs.

5000 – Rs. 10000 per annum for 10 years

Attract the youth of India with higher returns on investment as returns are the

motivating factor which influence purchase of insurance

Promote insurance in colleges and corporate houses

Promote Future Generali India Insurance as an Indian Company to build trust

FGI could have a brand ambassador or a mascot to promote its services.

Should have partial withdrawals from the first year onwards

Tap the rural market where there is large potential

Diversify product portfolio

Make products more straight forward – reduce complex The future topics for research in

the organization could be setting up of an appropriate ad campaign. It is very vital to the

companies’ success that the people of India know about FGI its products and their special

features and how insurance in general can help them in their future. The advertisements

have to be emotionally appealing. They might also include a celebrity. The brand name of

Future could be used to give a push to FGI and its products. The general perception of

insurance as “inauspicious” should be done away with and individuals and corporations

accept insurance on power with other investment opportunities.

The other area of research could be in the management of funds FGI possesses and how

it can maximize returns for its investors. A research project could be undertaken on how

to ensure that the money gets invested in the right companies and earns a medium – high

return on investment. Another area of research could be an analysis of the sales and

marketing techniques used by FGI. A large number of changes could be introduced and

this would help in saving operating costs and improving the efficiency of the firm.

APPENDIX

Q1. Are you currently insured?

a. Yes

b. No

Q2. Are you satisfied with your current insurance product?

a. Yes

b. No

Q3. Are you interested in the product Future Anand offered by FGI?

a. No

b. Yes

c. Can’t Say

Q4. Are you interested in the product Jeevan Anand offered by LIC?

a. Yes

b. No

c. Can’t Say

Q5. Which one is your favored insurance company?

a. LIC Jeevan Anand

b. Future Anand

Q6. What motivates you to purchase insurance/investment plans?

a. Advertisements

b. Friends and Relatives

c. Direct Selling Agents

d. Others

Q7. Please express your opinion for the premiums paid for the

above policies?

a. Very High

b. High

c. Moderate

d. Low

e. Very Low

Q8. Are you satisfied with the incentives (tax benefits or

Bonuses) associated with your policy?

a. Highly satisfied

b. Satisfied

c. Moderate

d. Unsatisfied

e. Highly Unsatisfied

Bibliography

www.lic.com

www.futuregenerali.com

www.wikipedia.org

Brochures provided by the FGI

Brochures provided by the LIC of India

Matters given by FGI

Magazine

Insurance World

The Outlook Money

Secrets of Successful Insurance Sales by Mr. Jack Kinder

report punam---the introduction of insurance sector

Documents