A

PROJECT REPORT
ON
“INCLINATION TOWARDS ULIP”
(A STUDY ON SECURITY AND
INVESTMENT PLAN)
Submitted To
Maharishi Dayanand University, Rohtak
In partial fulfillment of the requirement for the degree of
MASTER OF BUSINESS ADMINISTRATION (MBA)
(Session 2006-2008)

Internal guide Submitted By

Mrs. Shiwani Gupta SANDEEP ARORA
MBA Dep’t. MBA IIIrd sem
DAVIM, Faridabad Roll No.

DAV INSTITUTE of MANAGEMENT

FARIDABAD

Approved by AICTE and Affiliated to

MAHARISHI DAYANAND UNIVERSITY,
ROHTAK

1
 CONTENTS OF THE PROJECT

PAGE NO.

 Preface

 Certificate from the Organization

 Acknowledgement

 Declaration

 Introduction

 Objectives & methodology

 Industry profile

 Company profile

 Topic taken in the Organization

INCLINATION TOWARDS ULIP

( A Study on security and investment plan)

2
 Findings

 Recommendation

 Conclusion /summary

 Bibliography

 Annexure

3
 PREFACE

Beginning of the system project is entirely creative. This does not come all of a
sudden, but it comes by result of discussion, consultation and contemplation. Problem
unsolved here can never be satisfactory eliminated later. It is therefore a slow process.

Moreover practical training is an important part of management courses. The

theoretical studies are not sufficient to get into the corporate world. Only practical
knowledge can help us to understand the complexities of large scale organizations.

To develop healthy managerial and administration skill in potential managers, it

is necessary that theoretical knowledge must be supplemented with exposure to the
real environment. Actually, it is life for, a management itself is realized.

In my case I confronted myself to ICICI prudential Life insurance company

Ltd. And the exposure that I could not have gained from the books. I found it very
interesting and challenging. I did my training at GURGAON branch office and my
topic of project is INCLINATION TOWARDS ULIP security and Investment
solution with special reference to ICICI PRUDENTIAL LIFE INSURANCE.

4
 ACKNOWLEDGEMENT

Heartfelt thanks to the following people….

A Few typewritten words of thanks can-not really express the sincerity of my

gratitude. But I am still trying to put into words my gratefulness towards all who have
helped & encouraged me in carrying out this project.

I would like to thank Dr. N. K. Sharma (Director,DAVIM) to give me

guidelines and my worthy thanks to my teacher Mr. Himanshu Singh(faculty
member) for their valuable contribution during the academic session and guidance in
preparation of this project report.

This report conveys my heartiest thanks to Mr. KAPIL CHAWLA, Agency

Manager of“ICICI PRUDENTIALS LIFE INSURANCE CO. LTD.” for giving me
this project & helping me in completion of this project. No praise is ample for the
never tiring efforts of my colleagues whose constant support feedback, guidance &
practical suggestions helped me in completing this Project successfully.

5
 DECLARATION

I hereby declare that the project “ INCLINATION TOWARDS ULIP (A Study on

security and investment plan)” for ICICI PRUDENTIAL LIFE INSURANCE is original
and bonafied work done by me.

The project is being submitted in partial fulfillment requirements for the award degree
of Master of Business Administration, Maharishi Dayanand University, Rohtak.

The contents of this project are based on the field work and analysis done by me
during my tenure at ICICI Prudential, Gurgaon.

GAURAV AHUJA

6
 CHAPTER 1
INTRODUCTION

7
 INTRODUCTION

Insurance

Insurance may be described as to protect the economic value of asset. It can be said to
be a system of spreading the losses of an individual over a group of individuals.
Since it is an intangible product, Insurance Industry is a service industry.
Insurance Industry do not produce any goods but sell the promise. A promise to take
care of the customers or their dependents in case they suffer a loss due to some peril
during the term of policy.

What is insurance:

Mankind is exposed to many serious perils such as property losses from fire and
windstorm and personal losses from disability and premature death. Although it is
impossible for an individual to foretell or completely prevent their occurrence but it is
possible to provide against their financial effect the loss of property and earnings.

From the point of view of the individual the life Insurance may be defined as a
contract whereby for a Consideration amount called the premium, one party (the
insurer) agrees to pay to the other (the insured) or a beneficiary a particular amount
upon the occurrence of death or any other agreed event.

 Insurance is the method of spreading and transfer of risks

 Losses of few unfortunate are shared by and spread over to many exposed to
the same risk.

 Assets created by the owner in expectation of future needs have a value.

 Losses of assets for any reason deprive the owner of the expected benefits.

8
  It acts as a form of a safeguard against misfortunes.

 From the point of view of community life insurance may be defined as a social
device to make accumulations to meet uncertain losses resulting from
premature death or disability.

Purpose and need of insurance :

As said earlier that the making is exposed to many serious perils which risk the
security of their belongings. The risk here means that there is a possibility of
occurrence of loss or damage to the property, it may happen or may not happen.
Insurance is relevant only in the contingency of uncertainty. If there is no uncertainly
about the occurrence of the loss it can’t be insured against:

 Assets are likely to be destroyed or made non-functional due to perils like

firefloods, breakdowns, lightning and earthquake.

 Damage to assets caused by any perils is the risk that assets are exposed to.

 Insurance become relevant only if there is uncertainly of occurrence of event

leading to loss.

 No uncertainty No insurance.

 We can say that the human life value is an ongoing generating asset, which
can be lost on early death or disability caused by accidents.

 Insurance doesn’t protect the assets but only compensates the economic or
financial loss.

 Basically insurance covers tangible assets but the concept can be extended to
intangible also.

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 FUNCTIONS OF INSURANCE
The functions of Insurance can be bifurcated into two parts:

1. Primary Functions
2. Secondary Functions
The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide protection

against future risk, accidents and uncertainty. Insurance cannot check the happening
of the risk, but can certainly provide for the losses of risk. Insurance is actually a
protection against economic loss, by sharing the risk with others.

Collective bearing of risk - Insurance is a device to share the financial loss of few
among many others. Insurance is a mean by which few losses are shared among larger
number of people.
Assessment of risk - Insurance determines the probable volume of risk by evaluating
various factors that give rise to risk. Risk is the basis for determining the premium
rate also
Provide Certainty - Insurance is a device, which helps to change from uncertainty to
certainty. Insurance is device whereby the uncertain risks may be made more certain.

The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt

suitable device to prevent unfortunate consequences of risk by observing safety
instructions; installation of automatic sparkler or alarm systems, etc. Prevention of
losses causes lesser payment to the assured by the insurer and this will encourage for
more savings by way of premium. Reduced rate of premiums stimulate for more
business and better protection to the insured.

10
Small capital to cover larger risks - Insurance relieves the businessmen from security
investments, by paying small amount of premium against larger risks and uncertainty.

Contributes towards the development of larger industries - Insurance provides

development opportunity to those larger industries having more risks in their setting
up. Even the financial institutions may be prepared to give credit to sick industrial
units which have insured their assets including plant and machinery.

Life Insurance

Life insurance is a contract where the person requiring and insurance pays a
consideration / premium to maintain a policy and the insurer promises to pay a sum
assured or a guaranteed amount on the happening of an eventuality. If no eventuality
occurs then the insured may be eligible for some bonus also.

Why life insurance :

1. Protection of the interest of the family member.

2. Provision for education and marriage of the children.

3. Post retirement income for self and dependents

4. Special needs for medical expenses.

5. Provision for health /illness.

6. Provision for housing.

7. Provision for income tax rebate.

11
 Benefits of Insurance

Insurance not only serves the ends of individuals or of special groups of individuals
but also is advantageous to the society as a whole.

Benefits To The Individual

 Superior to any other saving plans:

Unlike any other saving plan, a life insurance policy affords full protection against
risk of death. In the event of death of a policy holder, the insurance company makes
available the full sum assured to the near and dear of policy holder. In comparison,
any other saving plan would amount the total saving accumulated till date. If the death
occurs prematurely, such saving can be much lesser than sum assured. Evidently, the
potential financial loss of the family of the policy holder is sizable.

 Encourages and forces thrift:

A saving deposit can easily be withdrawn. The payment of Life insurance premiums,
however, is considered sacrosanct and is viewed with the same seriousness as the
payment of interest on a mortgage. Thus, a life insurance policy in effect brings about
compulsory saving.

 Easy Settlement And Protection Against Creditors:

12
A life insurance policy is the only financial instrument , the proceeds of which can be
protected against the claims of a creditor of the assured by affecting a valid
assignment of the policy.

 Administering the legacy for beneficiaries :

Speculative or otherwise, expenses can quickly cause the proceeds to be squandered.

Several policies have foreseen this possibility and provide for payment over a period
of years or in a combination of installments and lump sum amounts.

 Ready marketing and suitability for quick borrowing :

A life insurance policy can, after a certain period (generally Three years ), is
surrendered for a cash value. The policy is also acceptable as a security for
commercial loans, for example, a student loan.

 Disability benefits :

Death is not only hazard that is insured; many policies may include disability benefits.
Typically, these provide for waiver of future premiums and payment of monthly
installment periods.

 Accidental death benefits :

Many policies can also provide for an extra sum to be paid (typically equal to the sum
assured) if death occurs as a result of accident.

 Tax relief :

Under the Indian income tax act, the following tax relief is available

13
 1. 20% of premium can be deducted from total income tax
liability.

2. 100% of the premium paid is deductible from your total

taxable income.

When these benefits are factored in, it is found that most Policies offer returns that are
comparable /or even better than other saving modes such as PPF, NSC etc. moreover,
the cost of insurance is a very negligible.

 Benefits to business :

Insurance results in business continuation and welfare of employees. Uncertainty of

business losses is reduced by insurance.

 Benefits of society :

The welfare of the society is protected. Insurance results in economic growth of the
country and reduction in inflation.

ICICI

The World Bank established ICICI LTD in 1955, the Government of India and
the Indian Industry, promote Industrial development of India by providing project and
corporate finance to Indian industry.

ICICI has grown from a development bank to a financial conglomerate and

has become one of the largest public financial institutions of India. ICICI has financed
almost all major sector of the economy, covering 6848 companies and 16851projects.
In the fiscal year 2002- 2003, ICICI had disbursed a total of Rs 45673 billion. Assets

14
worth.1676.59 billion as on 31st of march 2005 and customer 6 million and 5 million
policyholder account. Multi channel network, 573 branches and 2000+ATMs

PRUDENTIAL

Prudential was founded in 1848. Prudential is the largest life insurance company in
the United Kingdom. Provides retail financial services products and services to more
than 20 million customers, policyholder and unit holders and manages over £300
billion of funds worldwide (as of 31 December 2006). In Asia, Prudential is the
leading European life insurance company with life operations in China, Hong Kong,
India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan,
Thailand, Vietnam. Prudential is the second largest retail fund manager for Asian
sourced assets ex-Japan as at June 2006. Its fund management business has expanded
into a total of ten markets .

ICICI + PRUDENTIAL (JOINT VENTURE)

A Joint venture ICICI and Prudential of UK

ICICI Prudential started its operation in December 2000

The key objective of ICICI prudential is to provide the Indian citizen to suit a variety
of needs.

Prudential “genesis”

Founded in 1848-U.K.
Fourth largest insurance company in the world as per fortune 500 in terms of revenues

15
Leading life insurance Company in United Kingdom.
Over US$ 270 BILLION (Rs.12, 69,000 crores) under a management.
AAA rating from standard & poor’s (the highest rating)
Over 75 years of experience with operation in 11 countries.

CHAPTER 2
RESEARCH METHODOLOGY

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 RESEARCH METHODOLOGY

 Objective of study

 Type of research

 Research design

 Source of data

 Sampling unit

 Sample size

 Type of sampling

 Method of data collection

 Instrument used for data collection

 Limitation

17
 RESEARCH METHODOLOGY

Research Methodology deals with, the procedure adopted to carry out the study.
According to green and Tull:
“A research design is the specification of methods and procedures acquiring the
information needed It is the overall operational pattern or framework of the project
that stipulates which information is to be collected from which sources by what
procedures’’. For conducting the study, the researcher has adopted both primary as
secondary method of data collection.

OBJECTIVE OF STUDY

The purpose of research is to discover answer to questions through the application

of scientific procedures. The main aim of research is to find out truth which is hidden
and which has not been discovered as yet. Though each research study has its own
specific purpose, we may think of research objectives as falling into a number of
following broad grouping:
 To check the awareness level of people about insurance.
 To know the reasons for increasing trend of unit linked insurance plan.
 To know how ULIP are differ from Traditional plans means how they give
better returns than traditional plan.
 Comparison of investment plan with other tax saving instruments.

18
  Comparison of ULIP with other investment instrument available in
the market.

TYPE OF RESEARCH

Research refers to the search for knowledge. It can be defined as scientific

and systematic search for pertinent information on a specific topic. It is careful
investigation or enquiry especially through search for new facts of any branch of
knowledge.

Research plays an important role in the project work. The result of

the project is completely based upon the research of the facts and figures collected
through the different ways of research. That is why it is also called a movement from
known to unknown. Research is the original contribution to the existing stock of
knowledge.

Exploratory or Formulative research: Exploratory research is conducted to clarify the

ambiguous problems.

Descriptive research: To portray the characteristics of an individual, group, situation,

etc.
Diagnostic research: To determine the frequency of occurrence of an event.

Research Design

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 In the data collection method, we have collected both primary and
secondary data to meet our objective.
Primary data:
The primary data was collected by a survey based on the questionnaire. It was
formulated on the basis of information gathered by me with the help of Mr. Kapil
Chawla who provide useful guidelines and objective of our study.

Secondary data:
The secondary data was collected from books and internet.

Data Source:
The data that is collected from different sources, as the first hand information
that is called primary data. The source of primary data in my research is questionnaire
and observation method. The secondary data were also used in my report preparation.
This is collected from company record and from internet.

Research Approach:
The required information in the form of data is collected through survey
method, with the help of personal interview through questionnaire method.

Sampling plan:
There is a stage where the planning is done about the sample units, sample size,
sampling procedures, etc.

Sample units:
This means, which is to be surveyed. So as mention earlier that the sample units
is potential peoples..

Sample size:

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 The sample size means how many peoples should be surveyed. So that total
sample size is 150, which cover from different area of gurgaon.

Sampling Procedures:
I choose convenient and judgmental sampling for my research.

Data collection method :

Personal interview method is used for collection of primary data in the form of
questionnaire from respondents.

Research Instruments:
Once the source of data collection is decided then comes the instrument for
data collection or the research instrument. In this survey method a questionnaire was
framed. This is Philip by the potential people though personal interview

LIMITATION

How so ever impeccable a thing may see to be there always dwell some possibilities
of failure and incompleteness. The result of this work also subject to some of
limitations.
Which are as follows:
 The main limitation of the study is the availability of time. As the sufficient
time was not available for collection of information.
 Some respondents were not interested in giving answer and
they appeared to be busy.
 Lack of experience.

21
 CHAPTER 3
INDUSTRY PROFILE

22
 INSURANCE INDUSTRY PROFILE

Life Insurance :

As is evident from its very name, it deals with insurance of human life. “Life
insurance corporation of India”- a public sector undertaking has the monopoly in this
sector since its nationalization.

In our wordily life, whenever there is uncertainty, there is an involvement of risk. The
instinct for security against such risk is one of the basic motivating forces determining
human attitudes. As a squeal to this quest for Security, the concept of insurance must
have been born. The urge to provide insurance or protection against the loss of life &
property must have prompted people to make some sort of sacrifice willingly in order
to achieve security through “COLLECTIVE CO-OPERATION”, in this sense; story
of insurance is probably as old as THE story of mankind.

INSURANCE INDUSTRY IN INDIA

India is marching ahead to more prosperous future. The economy is on a

high growth path, domestic savings are growing, exports have risen and inflation has

23
stabilized. Infrastructure sector, which even today is woefully inadequate to meet the
expected increased industrial activities, has been accorded top priority by the
government. All this should reflect in a growth rate of 7 to 8% for the next 3-4 years.
With this scenario of high economic growth further reforms in the financial sector are
in the Common Minimum Program of the Government.

India is regarded as under- insured country with insurance penetration at a very low
level of 0.6% of GDP. Insurance, as a rule, has always been given very low priority
by corporate India. It is always taken with reluctance, usually only when it is
compulsory, and then only by big industrial houses. Without exception it is always
inadequate to meet the needs of the corporate sector.

In addition to the tradition exposure of fire, floods, workers compensation and the
interruption, Corporate India also has to address unpredictable changes in areas such
as environment; security; occupational health and safety; public liabilities; Directors
and Officers Liability and product liability
It therefore becomes quite obvious that purchase of insurance, in itself, will not
substitute for a soundly based and property implemented Risk Management
Program as insurance can only offer some financial relief by replacing the plants; it
cannot replace the loss in development of a business or development of the market.

The likely private players:

A number of foreign insurance companies have set up representative office in India

and have also tied up with various asset management companies. They have either
signed Memorandum of Understanding with Indian companies or are trying to do the
same. A few of them have been around for the last four to five years. Some have
carried out extensive research on the Indian insurance sector. Others have set up
liaison offices. All of them are waiting with bated breathe for the opening up of the
sector and taking a bite of the great Indian Insurance pie.

24
 Various Players Presents In The Market

1. Bajaj Allianz Life Insurance Company Limited.

2. Birla Sun Life Insurance Co. Ltd.
3. HDFC Standard Life Insurance Co. Ltd.
4. ICICI Prudential Life Insurance Co. Ltd.
5. ING Vysya Life Insurance Company pvt.Ltd.
6. Life Insurance Corporation of India.
7. Max New York Life Insurance Co. Ltd.
8. Kotak Mahindra Old Mutual Life Insurance Limited.
9. SBI Life Insurance Co. Ltd.
10. Tata AIG Life Insurance Company Limited.
11. Reliance Life Insurance Company Limited.
12. Aviva Life Insurance Co. India Pvt.Ltd.
13. Sahara India Life Insurance Co.Ltd.
14. Shriram Life Insurance Co.Ltd.
15. Bharti AXA Life insurance Company Ltd.
16. Met Life India Insurance Company Pvt. Ltd.

25
MOST RELIABLE PVT. LIFE INSURANCE COMPANY

19% ICICI
32%
BIRLASUNLIFE
7%
HDFC STANDARD
MAX NEWYORK LIFE
9% TATA AIG
11% 22% OTHERS

26
 INTRODUCTION TO IRDA

Insurance regulatory authority, 1996 (IRA):

• The IRA was set up in January 1996

• The IRA bill has first to be passed by parliament to make the IRA a
statutory body.
• Second, the powers of the erstwhile controller of insurance have to
be conferred on the IRA.
• Third, comprehensive legislation aimed at reviewing the insurance
act of 1938 and repealing the LIFE INSURANCE CORPORATION
ACT of 1956 and the general insurance (Nationalization) act of 1972
have to be passed.

Government’s pronouncements:

• Post statutory status, IRA to be centre piece for future insurance sector
reforms

27
 • IRA will be sole authority, which will be responsible for awarding of
licensing i.e. little or no government or political interference in licensing in
process.
• No restriction on the no. of licenses.
• No composite licenses for life and non life business.

IRDA was set up to protect the interests of the policyholders, to regulate, promote and
ensure orderly growth of the insurance industry. After this the private players started
entering the market.

CHAPTER 4
COMPANY PROFILE

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 Organizational set up

 The organizational set up of a company plays an important role in the overall

efficient working of the various departments leading to an improved overall
performance. The arrangement has to be made in such a way that activities are
carried out in each department in the smooth way.

 The department has to be made on the basis of various activities of the

company.

 Activities generating revenue are given more importance than non-revenue

activities.

 Thus various offices, departments and sections are created looking to the
important activities of the Insurance Company.

Important activities:

The important activities of the Insurance companies are:--

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  Procuring new proposals for grant of life insurance cover.

 Scrutiny of proposals and giving decisions for

 Accepting/rejecting the proposals of Insurance.

 Issuing a policy document.

 Keeping track of performance of insurance contract by way of receipt of

premiums.

 Providing assistance in various matters like nominations, assignment,

alteration of terms, change of address and payment of claims.

 Other activities like investment of funds, maintenance of accounts, personnel

management, data processing and complying with other legal and regulatory
requirements

 These can be termed as the important activities of the Life Insurance

companies. The insurance companies may concentrate these activities at ones
place if it area of operation is limited or the activities may be decentralized
because of the fact that the area of that company is also decentralized.

Structure Of The Company :

The ICICI Prudential is a joint venture of ICICI (74%) and Prudential UK

(26%). ICICI Prudential Life Insurance was incorporated on July 20,2000 and was
granted a certificate of registration for carrying out life insurance business, by the
IRDA on November 24,2000.

ICICI Prudential's capital base stands at Rs. 18.15 billion with ICICI Bank and
Prudential plc holding 74% and 26% stake respectively. For the 9 months ended
December 31, 2006, the company garnered Rs.27.22 billion of weighted retail and

30
group new business premium and wrote over 1.1 million policies. Assets held stand at
over Rs.1000 billion.

It commenced commercial operation on December 19,2000 becoming one of

the first private sector players to enter the liberalized arena. During the short period
till March 31,2003 The company has issued 2.45 policies translating into a premium
Income Rs 59.7 million and the sum assured of over Rs 1000 million. The company is
now operating in Mumbai.New -Delhi, Pune, Chennai, Kolkata, Banglore,
Ahmedabad, Hyderabad and Lucknow.

ICICI PRUDENTIAL LIFE INSURANCE

ICICI Prudential Life Insurance Company is a joint venture between

ICICI Bank-
one of India's foremost financial services companies-and Prudential plc- a leading
international financial services group headquartered in the United Kingdom. Total
capital infusion stands at Rs. 20.60 billion, with ICICI Bank holding a stake of 74%
and Prudential plc holding 26%.

We began our operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA). Today, our nation-wide team comprises
of over 580 offices, over 230,000 advisors; and 23 bancassurance partners.

ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings.As we grow our
distribution, product range and customer base, we continue to tirelessly uphold our
commitment to deliver world-class financial solutions to customers all over India.

31
 Promoters Of Icici Prudential

ICICI Bank :

ICICI Bank is India’s second-largest bank with total assets of about Rs.1892.18
billion and a network of about 590 branches and offices and about 2030 ATMs. It
offers a wide range of banking products and financial services to corporate and retail
customers through a variety of delivery channels and through its specialized
subsidiaries and affiliates in the areas of investment banking, life and non-life
insurance, venture capital, asset management and information technology.

ICICI Bank posted a net profit ofRs.1, 637 crore for the year ended September
30,2005. ICICI Bank’s equity shares are listed in India on stock
exchanges at Chennai, Delhi, Kolkata and Vadodara, the Stock Exchanges, Mumbai
and the National stock exchange Of India limited and its American Depositary
Receipts (ADRS) are listed other New York Stock Exchange (NYSE).

PRUDENTIAL PLC :

Established in Londan 1848, Prudential plc is a leading international financial

services company In the UK, with around US$300 billion funds under management,
and more than 20 Million customers worldwide (as of 31 December). Prudential has
brought to market an integrated range of Financial services products that now includes
life assurance, pensions, mutual funds, banking investment management and general
insurance. In Asia, Prudential is UK’s largest life insurance company with a vast
network of 24 life and mutual fund operations in twelve countries—China, Honk

32
Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan,
Thailand and Vietnam.

PRODUCT PROFILE

33
 PRODUCT PROFILE

Insurance Solutions for Individuals :

ICICI Prudential Life Insurance offers a range of innovative, customer-centric

products that meet the needs of customers at every life stage. Its products can be
enhanced with up to 4 riders, to create a customized solution for each policyholder.

Savings & Wealth Creation Solutions:

Save'n'Protect is a traditional endowment savings plan that offers life protection

along with return.

CashBak is an anticipated endowment policy ideal for meeting milestone expenses

like a child's marriage, expenses for a child's higher education or purchase of an asset.
It is available for terms of 15 and 20 years.

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LifeTime Super & LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at different
life stages. Each offer 6 fund options - Preserver, Protector, Balancer, Maximiser,
Flexi Growth and Flexi balanced.

LifeLink Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market.

Premier Life Gold is a limited premium paying plan specially structured for long
term wealth creation.

InvestShield Life New is a unit linked plan that provides premium guarantee on the
invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation.

InvestShield Cashbak is a unit linked plan that provides premium guarantee on the
invested premiums along with flexible liquidity options.

Protection Solutions :

LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3
options - level term assurance, level term assurance with return of premium and single
premium.
HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost effective manner.

Child Plans:

Education insurance under the SmartKid brand provides guaranteed educational

benefits to a child along withlife insurance cover for the parent who purchases the

35
policy. The policy is designed to provide money at important milestones in the child's
life. SmartKid plans are also available in unit-linked form - both single premium and
regular premium.

Retirement Solutions:

ForeverLife is a traditional retirement product that offers guaranteed

returns for the first 4 years and then declares bonuses annually
.
LifeTime Super Pension is a regular premium unit linked pension plan that helps one
accumulate over the long term and offers 5 annuity options (life annuity, life annuity
with return of purchase price, joint life last survivor annuity with return of purchase
price, life annuity guaranteed for 5,10 and 15 years & for life thereafter, joint life, last
survivor annuity without return of purchase price) at the time of retirement.

LifeLink Super Pension is a single premium unit linked pension plan.

Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement. It offers the benefit of 5 payout option.

Health Solutions:

Health Assure and Health Assure Plus: Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder
with financial assistance, irrespective of the actual medical expenses. Health Assure
Plus offers the added advantage of an equivalent life insurance cover.

Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as
well as at different stages in the treatment of various cancer conditions.

36
Diabetes Care: Diabetes Care is a unique critical illness product specially developed
for individuals with Type 2 diabetes and pre-diabetes. It makes payments on diagnosis
on any of 6 diabetes related critical illnesses, and also offers a coordinated care
approach to managing the condition. Diabetes Care Plus also offers life cover.

Hospital Care: is a fixed benefit plan covering various stages of treatment –

hospitalisation, ICU, procedures & recuperating allowance. It covers a range of
medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20
years.

Group Insurance Solutions:

ICICI Prudential also offers Group Insurance Solutions for companies seeking to
enhance benefits to their employees.
Group Gratuity Plan: ICICI Pru's group gratuity plan helps employers fund their
statutory gratuity obligation in a scientific manner. The plan can also be customized to
structure schemes that can provide benefits beyond the statutory obligations.

Group Superannuation Plan: ICICI Pru offers both defined contribution (DC) and
defined benefit (DB) superannuation schemes to optimise returns for the members of
the trust and rationalise the cost. Members have the option of choosing from various
annuity options or opting for a partial commutation of the annuity at the time of
retirement.

Group Immediate Annuities: In addition to the annuities offered to existing

superannuation customers, we offer immediate annuities to superannuation funds not
managed by us.

Group Term Plan: ICICI Pru's flexible group term solution helps provide affordable
cover to members of a group. The cover could be uniform or based on
designation/rank or a multiple of salary. The benefit under the policy is paid to the
beneficiary nominated by the member on his/her death.

37
Flexible Rider Options:

ICICI Pru Life offers flexible riders, which can be added to the basic policy
at a marginal cost, depending on the specific needs of the customer.
Accident & disability benefit: If death occurs as the result of an accident during the
term of the policy, the beneficiary receives an additional amount equal to the rider
sum assured under the policy. If an accident results in total and permanent disability,
10% of rider sum assured will be paid each year, from the end of the 1st year after the
disability date for the remainder of the base policy term or 10 years, whichever is
lesser. If the death occurs while traveling in an authorized mass transport vehicle, the
beneficiary will be entitled to twice the sum assured as additional benefit.

Critical Illness Benefit: protects the insured against financial loss in the event of 9
specified critical illnesses. Benefits are payable to the insured for medical expenses
prior to death.

Waiver of Premium: In case of total and permanent disability due to an accident, the
future premiums continue to be paid by the company till the time of maturity. This
rider is available with LifeTime Super LifeTime Super Pension and CashPlus.

Management hierarchy

MD & C.E.O (Ms. SHIKHA SHARMA)

EXECUTIVE DIRECTOR (Mr. BHARGAV DAS GUPTA)

HEAD OF SALES, HIMALAYAN (Mr. AMIT PALTA)

VICE PRESIDENT (Mr. SANTOSH CHACKO)

38
 ASSOCIATE REGIONAL MANAGER (Mr. HEMANT SIKKA)

AREA MANAGER (Mr. AJAY NEB)

SALES MANAGER (Mr. SUNIL BHATIA)

AGENCY MANAGER (Mr. KAPIL CHAWLA)

UNIT MANAGER

VISION

To make ICICI Prudential 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, Boundary less, Ownership and passion. Each of the
values describes what the company stands for the qualities of our people and the way
we work.

39
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.

SWOT ANALYSIS OF ICICI PRUDENTIAL

Strengths:

• ICICI Prudential is the largest private player in the insurance industry in

INDIA , with a market share of around 32% amongst the private players.
• It received best products innovation award from Asian banker in 2001.
• Vast untapped market. In a country of 1 billion people there is huge potential
market for life insurance products.
• There is a huge pool of skilled professionals to carry out the successful
ventures.
• ICICI Prudential is one of India’s leading financial institutions.
• Offering a complete financial solution that encompasses every sphere of life.
• From commercial banking
To stock broking
To mutual funds
To life insurance
To investment banking,
The group caters to the financial needs of individuals and
Corporate.

40
• ICICI prudential is the first company, which got license of insurance trading
from I.R.D.A. (Insurance Regulatory & Development Authority)
• ICICI Prudential is leading in securities.
• The company has a network in 74 cities in India and offices in New-York,
London and Dubai.
• The group services a customer base of over 2.7 million.

Weaknesses:

• Though there is a huge market for insurance polices, the middle class who
constitutes bulk of this market is burdened with inflationary pressure and
therefore is not able to save for future.
• Less popularity of ICICI Prudential in villagers.
• Most of the people have faith on LIC as it is a Govt. Organization.

Opportunities:

• Out of 320 million insurable market only 20% of population is insured.

• The ICICI Prudential group is going to open 100 branches of ICICI Prudential
in coming 4-5 years.
• The insurance sector is growing so there is opportunity for business growth.
• Unemployment is today a big problem in our country; therefore people who
have the potential should be encouraged to enter in to this sector.

Threats :

41
 • Competition is growing as new entrants are coming in insurance sector .
• Main threat is “COMPETITORS”.

LEGISLATIVE AND REGULATORY MATTERS

Insurance sector reforms :

Having looked at the insurance sector, let us look la the affects made by the govt.to
make the industry more dynamic and customer friendly. To being with, the Malhotra
committee was set up with the objective of suggesting changes that would achieve the
much required dynamism.
Structure :
• Government stake in the insurance Companies to be brought down to50%
• 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.
• 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 single
entity.
• Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies.

42
 • 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.

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 periodoftime).

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 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.

Business Requirements For An Insurance Company:

An Indian company will not be issued a license under the act, unless the IRDA is
satisfied with the sound financial condition and the general character of management,
the volume of business, the capital structure, earning prospects of the insurers and that
the interests of the general public will be served if the certificate of registration is

43
granted to the insurer. Foreign insurance companies have been allowed to enter this
industry, but they can do so only with an Indian partner subject to a maximum of 26%
share holding.
No life insurance company after the Act can be registered unless they have a paid-up
capital of rupees 100 crores. Every insurer shall in respect of the life insurance
business carried on by him in India, deposited with the Reserve Bank Of India(“RBI”)
a sum equivalent to one percent of the total gross premium written in India in any
financial year, not exceeding rupees ten crows. This amount would not be susceptible
to any assignment or charge nor would it be available for the discharge of any
liabilities of the insurer other than liabilities arising out of policies of insurance issued
by the insurer, so long as any such liabilities remain discharged.

Investment Of Assets :

Every insurer is required to invest, and at all times keep invested, assets equivalent to
not less than the net liabilities as follows:
• 25% in government securities.
• A further sum equal to not less than 25% of the said sum in government
securities or other approved securities &
• The balance in any of the approved investment rated as “Very Strong”
or more by reputed independent rating agencies, which include:
1. Secured Loans
2. Deposits
3. Debentures
4. Commercial Papers
5. Bonds, Debt Instruments, Shares & Preference Shares.

Further :

44
Every insurer is required to maintain, at all times an excess of the value of his assets
over the amount of his liabilities of not less than
• 50 crores of rupees in case of an insurer carrying of Life Insurance
Business.
• 50 crores of rupees, a sum equivalent to 25% of net premium income
or a sum equivalent to 30% of net incurred claims in the case of
insurers carrying on general insurance.

Tax Aspect:

Section 88(c ) this section of the income tax act provides rebate on the total tax
liability of the individuals. According to this section, investments in PPF, PF,
NSC, post office, saving mutual funds premium paid for the life insurance
products, UTI-ULIP provides an individual tax rebate.

Investment can be made in any one of the instruments of a mix of the instruments
subject maximum limit of Rs.100000

Section 80 D allows contribution up to rs 10000 by way of premium for insurance

on the health of the individual, his spouse of any other member . Deduction is
allowed up to rs.15000 if the insured is a senior citizen. Premium has to be paid by
cheque.

Section 10( 10 d) of the income tax act, 1961 deals with income not to be included
to total income with respect to the taxability of such receipts from life insurance

45
policies. Section 10 (10 d) provides any sum received under a life insurance policy
including the sum allocated by way of bonus on such a policy other than:
a) any sum received under a keyman insurance policy: or
b) any sum received under an insurance policy issued on or after
the 1st day of April,2003 in respect of which the premium payable for any of the
year during the term of the policy exceeds 20% of the actual capital sum assured.

CHAPTER 5

46
 TOPIC TAKEN IN
ORGANIZATION

Classification Of Life Insurance Products

We can classify insurance plan in two category.

 Traditional
 ULIP
Traditional

Term Insurance :

Under term insurance plan, sum assured is payable only if death occurs during the
specified pre-determined term. If death does not take place during such term the
amount of premium stands forfeited. Thus it can be seen that the term insurance is
nothing but the cost of pure protection. It is a contract, which provides financial
protection if death should occur within a specified period. No survival benefits are
provided under the contract.

47
Whole life insurance:

Whole life insurance provides for the payment of the face value upon the death of the
insured, regardless of when it may occur. This policy furnishes permanent protection
to the insured at he moderate cost. This is highly important for the average man or
woman of moderate salary, who require considerable family protection and whose
limited income does not enable him or her both to pay premiums and to accumulate a
large savings fund. The whole life policy provides a capital sum of money in the
event of death of the assured whenever that may occur.

Endowment Policy:

Endowment is a product, which includes Risk cover and saving also. In the pure
endowment policy the sum assured is payable in the event of death or definitely on
maturity. In an endowment sum assured is for sure given to the policyholder on
completion of the term. Endowment plans are very popular in developing nations
since they serve a dual purpose of life cover and savings. Many a people in our
country go for endowment products because of the compulsory saving aspect. An
endowment plan on the other hand is not a cheap plan since the insurer has a dual
liability of providing life cover and on maturity giving the entire sum assured.

Annuities :

Annuities refer to income or other financial provision usually for retirement or old
age. An Annuity may be defined as a periodic repayment made during a fixed period
or for the duration of a designated life or lives. In one sense the life annuity may be
described as the opposite of insurance protection against death in its pure form a life
annuity may be defined as a contract whereby for a premium consideration one party
(the insurer) agrees to pay the other (the annuitant) a stipulated sum (the annuity)

48
periodically throughout life. The purpose of the annuity is to protect again a risk—the
outliving of one’s income.

UNIT LINKED INSURANCE PLAN (ULIP)

Unit linked insurance plan (ULIP) is a life insurance solution that provides the client
with the benefits of protection and flexibility in investment. It is a solution which
provides for life insurance where the policy value at any time varies according to the
value of the underlying assets at the time .

The investment is denoted as unit and is represented by the value that it has attained
called as Net Asset Value (NAV).

49
 UNITS
UNIT
UNDERLYING
LINKED
IN
INSURANCE
INVESTMENT
POLICIES
FUNDS

ULIP came into play in 1960s and became very popular in Western Europe and
America. The reason that is attributed to the wide spread popularity of ULIP is
because of the transparency and the flexibility which it offers to the clients .

As time progressed the plans were also successfully mapped along with life insurance
needs to retirement planning.

In today’s times ULIP provides solution for all the needs of a client like insurance
planning,financial needs,financial planning for children’s future and retirement
planning.

Structure Of Ulip

50
 PREMIUM

LESS CHARGE

INVESTMENT LIFE
REPRESENTED AS COVER
UNITS

Benefits of unit linked plan :

ULIP distinguishes itself through the multiple benefits that it provides to the
consumer. The plan is a one stop solution providing

1. Life protection
2. Investment and Savings

a. Market linked fund based on risk profile

b. Switch option
c. Premium redirection
d. Automatic transfer plan(ATP)

3. Flexibility of cover continuance

4. Transparency
5. Extra protection with riders

a. Death due to accident

51
 b. Disability
c. Critical illness

6. Liquidity

a. During the term partial withdrawals

b. At Maturity

7. Tax planning

Charges Under Ulip

Contribution related charges:

These are the charges that are represented as a percentage of the regular or single
contribution paid. In case of a regular contribution plan, it is usually high in the first
year to pay for the distribution cost. This charges pays for the issuance and for
distribution commissions. This charges are running for the policy.

Administrative charges:

These are charges that are levied for the administration of the policy and the related
cost of administration of the insurance company,itself. They are more related to the
cost like IT , operational, etc cost of continuing the policy.

Fund management charges:

These are the charges for buying and selling debt and equity. These are the charges
are adjusted in NAV it self.

52
Mortality charges:

This covers the cost of providing life protection for the insured and may be paid once
at the start of the policy for a recurrent manner for example this charges levied to
provide the insurance cover under the plan . normally these charges are one year
charges as per the age of the holder.

Rider charges:

Rider charges are similar in nature to the mortality charges as they are levied to pay
for the other protection benefits that the policy holder has choosen for- like the critical
illness benefit or the accident benefit,etc.

Surrender charges:

When the policy holder decides to surrender the policy or partially withdraw some of
the units for cash , a surrender charge may be apply.
Surrender charges are used to cover initial expenses that have been incurred by the
company but not yet recovered from the policyholder yet.
Bid offer charges:

In ULIP specifically certain insurers might create a difference in the price at which
they sell the unit and the price at which they buy the units. Investor’s contribution are
used to buy units in the investment fund at the offer price and are sold when benefits
are required at the bid price. The difference between the offer and bid prices Is known
as the “bid-offer spread", this is used to cover expenses when setting up the policy.

Transactional specific charges:

53
These charges are levied when the client does some specific transaction like changing
funds, topping up the investment component or withdrawals .

Investment Option For Your Money

Maximiser: If high growth is your priority, this is the plan for you. You can enjoy
long-term capital appreciation from a portfolio that is invested primarily in equity and
equity-related securities

Protector: - If on the other hand, your priority is steady returns, you can opt for the
protector Plan. Plan, you can accumulate a steady income at a low risk across a
medium to long-term period from a portfolio, which is primarily invested in fixed
income securities.

Balancer:-If you prefer a balance of growth and steady returns, choose our balancer
plan. This would ensure that your portfolio is invested in equity-linked securities, as
well as in fixed income securities.

Preserver: The objective of this plan is not ensuring capital protection by investing in
very low risk investments like the cash and call money markets. However, the returns
generated may also be on the lower side due to the investment pattern. At inception,
investments up to 20% can be allocated to this fund.

54
MAXI BALAN PROTE PRESE
MISER CER CTOR RVER

POTENTIAL
FUND TYPE ASSET MIX
RISK /REWARD
Equity& Related securities:
Max 100%
Maxi miser High
Debt, Money market & Cash:
Max 25%
Debt. Money market & Cash:
Min 60% Moderate
Balancer
Equity & Related securities:
Max: 40%
Debt Instruments,
Protector Money market & Cash: Max Low
100%:
Debt Instruments: Max 50%
Capital
Preserver Money market & Cash: Min
preservation
50%

Automatic Transfer Plan

55
 100% 0% 91.66% 8.33%
PROTEC MAXIMIS PROTEC MAXIMIS
TOR ER TOR ER

8.33%

 Funds would get transferred automatically a fixed date every month (1st or
15th ) from protector to maximiser.
 You can either choose a fixed amount or a fixed percentage.
 Minimum ATP is Rs.2000
 ATP will cease if the funds in the protector are insufficient.
 Effectively this works like 12 free switches of fixed installments over and
above the 4 free switches.

COMPARISION OF ULIP WITH TRADITIONAL PLAN

56
Unit Linked Insurance Product :

ULIPs have gained high acceptance due to attractive features they offer. These
include:

 Flexibility
o Flexibility to choose Sum Assured.
o Flexibility to choose premium amount.
o Option to change level of Premium /Sum Assured even after the plan
has started.
o Flexibility to change asset allocation by switching between funds
 Transparency
o Charges in the plan & net amount invested are known to the customer
o Convenience of tracking one’s investment performance on a daily
basis.
 Liquidity
o Option to withdraw money after few years (comfort required in case of
exigency)
o Low minimum tenure.
o Partial / Systematic withdrawal allowed
 Fund Options
o A choice of funds (ranging from equity, debt, cash or a combination)
o Option to choose your fund mix based on desired asset allocation

Traditional Plans :

These are the oldest types of plans available. These plans cater to customers
with a low risk appetite. Some of the common features of traditional plans are:

57
  Steady Investment
o Major chunk of investible funds are in debt instruments
o Steady and almost assured returns over the long term
 Features
o Death benefit is Sum Assured + guaranteed & vested bonus
o Helps in asset creation as they are for a long tenure
o Premium to Sum Assured ratios are fixed for each plan and age.
o Generally withdrawals are not allowed before maturity.

Point of difference ULIP Traditional Policy

Market related (May be
IRDA ? Determined
Investment stock market or debt
investments
market)
Transparency in costs Yes No
Flexibility in payment Yes No
Assured Bonus No Yes
Assured Sum on survival No Yes
Option to increase
Yes No
investment/premium

ULIPs better traditional policies

Until a couple of years ago, when ULIPs were a rare commodity, nobody knew how
life insurance companies charged policyholders for expenses. And nobody seemed to
want to know either. Then came the ULIPs with good intentions to make
policyholders aware of how much they would pay as expenses. But that move
backfired. Policyholders were taken aback by the high amount of fees that ULIPs
charged.

While the charge structure on ULIPs is something that is open to debate, the issue is
that ULIPs alone cannot be isolated. Traditional policies too charge high

58
administrative and management expenses. In ULIPs, the first year charges range from
20-70%, one does not know how much traditional policies charge.

This can have a bearing on returns as well. A ULIP may charge you upfront but
thereafter, all the returns on the fund are yours while a traditional policy may charge
less but share a smaller portion of returns with you.

So if you were substituting a traditional endowment with a ULIP, you would be better
off with the latter since you would know your charges and your returns.

We recommend traditional policies:

...Where the objective is only Risk cover and not savings and cost has to be minimum.

We recommend Unit Linked products where: .

• The intention is to provide security for a goal.

• The purpose is to make the savings grow at a better rate seeking the best
solution.

• It is a market linked investment where the premia paid is invested in funds

• Different options are available, like 100% Equity, Balanced, Debt, Liquid etc
and according to the fund selected, the risks and returns vary.
• The costs are upfront and are transparent, the investment made is known to the
investor (As he is the one who decides where his money should be invested).
• There is a greater flexibility in terms of premium payments ie. A premium
holiday is possible.
• You can also invest surplus money by way of top ups which will increase your
investment in the fund and thereby provide a push to returns as well.
• There is no assured Sum on survival, the higher of the Sum Assured or Fund
Value is paid at the maturity or incase of death.

59
 Financial planning and tax planning

All of us want to save for a rainy day. We want our money or investment to:

(i) Give the best possible return and

(ii) Be available to us when we require it.

Financial planning makes this possible. Financial planning is an attempt to maximize

returns keeping in mind the liquidity and security of our investment.
The three basic principles (guiding factors) of financial planning are:

• Setting realistic financial goals

• Starting investments early

• Thinking long term while allowing for short-term needs that may arise.
One plus lump sum of money to
(a) Produce income.
(b) Increase the capital

One can invest money only when one possesses it, which is possible by saving
systematically. Selecting a good saving scheme can do this.

60
Feature of a Good Saving Plan:

(a) Safety
(b) Flexibility
(c) Should have incentive to save continuously without default.
(d) Tax saving
(e) Should fulfill financial objective even in case of death.

Features of an ideal Investment Scheme:

(a) Safety
(b) Liquidity
(c) Higher Yield
(d) Capital growth
(e) Tax saving
Safety: refers to financial soundness of investment.

Liquidity: means quickness with which an assets can be converted into cash
whenever required.

Yield: is the amount of money that an investment is expected to earn.

Similarly an increase / decrease in the tax rate also affects our return on investments.
Any return, which is not taxable, will be preferred to those on which taxes have to be
paid.
A good investment is that which earns decent returns after providing for taxes and
inflation.
However, there is no single wonder investment, which can have all the above features.
One can’t have windfall gains of stock market with the safety of Government
securities or the life cover and tax concessions of life insurance, all in one.
A prudent person should look for those investments, which offer the ideal solution to
his personal needs under his own set of circumstances.

61
High Returns and Best Returns;
(i) These are not necessarily the same.
(ii) High returns may be offset by risk to capital.
(iii) Best returns should be determined by the advantage an investment offers.

The Investor’s Approach:

Investor’s approach can be conservative (safety is of utmost importance), enterprising
(willing to take some risks) or speculative (willing to take high risk in order to gain
high returns). The investor’s approach is related to a host of personal factors such as:
a) Age and family
b) Future responsibilities
Tax Benefits Under Life Insurance Policies
Qualifying premium amount: -
a) Premiums paid to effect or keep in force an insurance policy on the life of
• The assessee; or
• The spouse of the assessee; or
• Any child( minor or major) of the assesseeirrespective of the status of the
child.

b)Premiums paid to effect or keep in force a contract for a deferred annuity on the
life of
• The assessee; or
• The spouseof the assessee; or
• Any child(minor or major) of the assessee provided that such contract ,
doesnot contain a provision for exercise by the assured of an option to receive
a cash payment in lieu of the annuity.

62
Tax reief for savings through life insurance
• An aggregate amount of savings including those paid towards life insurance
premium up to Rs. 1 lakh not to be included in the income liable for tax.
• Premiums paid under an approved pension plan upto Rs. 10,000/- per year of
various insurance companies are deductible from the total income upto a
maximum Rs. 10,000/- under section 80 CCC.
• The amounts received as claims – whether on maturity or death – including
the amount of the bonus, if any, are not taxable, being capital recipt under
section 10(D)

What makes ULIPs a total financial planning package?

• Potential for Superior returns by switching between Equity & Debt

• Anytime Liquidity
• No Long Term Commitments
• Flexible Insurance Cover
• 100% Tax Free Returns on Withdrawals & Maturity

63
 Comparison of ULIP with other Investment Modules

OTHER RATE OF TIME RISK MIN. MAX TAX TAX

INSTRUMENT RETURN PERIOD INVEST INVEST FREE BENE
MENT MENT RETU FIT
RN
NSC 8% 6years No 100 No limit No Yes
PPF 8% 15years No 500 70000 Yes Yes
ELSS Market 3years Risky 500 No limit Yes Yes
return
ULIP Market 5years Risky 500 No limit Yes Yes
return Modu
le
FD 9.5% 5years No 10000 No limit No Yes
Market Open High 500 No limit Capital Only
MUTUAL Return Ended gain in
FUND @10% ELSS
for time Funds
less
than
1year
STOCK Variable No time Very Variable No limit Capital No
frame high gain
@10%
for time
less
than 1
year

Life Time Super

64
It is necessary that we understand a few terms before look in to the various financial
planning ways.

Save: this is an activity that helps in the “asset allocation”. It has both a short term &
long term perspective.

Invest: this is an activity that focuses “asset creation”. It involves making money
from money.

Spend: this is the activity of using the money for our expenses.

65
 ASSET
SAVE ACCUMUL
ATION

ASSET
INVEST CREATIO
N

ASSET
SPEND PROTECTI
ON

How Life Time Super Provides Asset Pprotection, Asset Creation,

Asset Accumulation

66
Flexible policy term: Decide for how long you want your policy. You can invest for
a minimum of 10 years and a maximum of 75 years.

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

an annual basis.

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

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

Systematic withdrawal of money: Withdraw money in installments from the 4th

year onwards.

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

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

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

Life time super at glance

67
Minimum/Maximum Entry Age 0 years to 65 years

Maximum Age at Policy Maturity 75 years

Minimum/Maximum Policy Term 10 years to 75 years

Premium Payment Frequency Monthly, half-yearly, yearly

Minimum Premium Rs. 18,000 per annum

Annual Premium x Term/2. Subject

Minimum Sum Assured
to a minimum of Rs. 1,00,000

Premium paid for the policy and

critical illness benefit rider will be
Tax Benefit (8) eligible for tax benefit under Sec.
80C and 80D respectively. Any
amount paid to you will be eligible
for tax benefits under Sec. 10 (10D)
as per prevailing Income Tax laws.

Why life time super:

As an individual who desires a lot from life-a car, a beautiful home and of course, the
comfort and contentment of your family-you would undoubtedly want to plan your
finances such that you can take care of all your requirements.
Invest in ICICI Prudential's LifeTime Super policy-a regular-premium unit-linked
policy, which offers potentially higher returns that systematically enable you to meet

68
your long-term financial objectives. In addition, LifeTime Super also provides the
protective benefit of an insurance cover, which keeps your family secure, always.

Comparision of lifetime super of icici pru with other companies.

Life Maker- Level

Features LifeTime Super Insurance Cover

Premium Pay Frequency Regular Premium Regular Premium

Higher of the Fund Value or Sum
Assured, reduced by the applicable Higher of Sum Assured or
Death Benefit partial withdrawals Fund Value

Maturity Benefit Fund Value Fund Value

Minimum Annual
Premium Rs 18000 pa Rs. 15,000 /-
Min Term 10 years 10
Max Term 75 years 58
Investment Related
6 Funds - Flexi Growth , Flexi 4 Funds : Secure Plan,
Balanced , Maximiser , Balancer , Balanced Plan, Growth
Choice of Funds Protector Preserver Plan, Conservative Fund
Top-ups Not Allowed currently Allowed
4 switches free in a policy year. Min 2 switches free in a policy
Switches amt. Rs.2000 year

Allowed after completion fo 3 policy Allowed after completion fo

Partial Withdrawals years. Min Amount is Rs.2000 3 policy years.
In the last policy year ,
loyalty units will be added
equal to 2.5% of annual
target premium multiplied
by the policy term, but not
Additional Allocation of Every 4 th year, starting at the end of exceeding one annual target
Units(Bonus units) 4th year@ 4% of Annual Premium premium.
Special Conditions
(If Any) None Redirection of Premium
Surrender Values

69
(At end of year 1)
(At end of year 2) 98%
(At end of year 3) 99%
(At end of year 4) 100%
(At end of year 5)
Personal Accident Benefit
Riders ADBR,CIBR,WOPR Rider, Dread Disease Rider
Settlement Period Options Available. Upto a period of 5 years Not Available
Automatic Transfer Plan Available Not Available
Boundary Conditions
Min Age at Entry 0 12
Max Age at Entry 65 60
Max Age at maturity 75 70 years
Term/2*AP , subject to a min of
Min/Max Sum Assured Rs.1,00,000 Min Rs. 100,000
Increase/Decrease in Annual
Premium Not Allowed Increase allowed
Increase/Decrease in Term Not Allowed Not Allowed
Increase/Decrease in Sum
Assured Increase allowed Not Allowed
Decrease Not Allowed

Charges

Premium Allocation Charges LifeTime Super LifeMaker Plan

18000-49999 : 20%,
Year 1 50000 & above : 18% 0.75%

Year 2 7.5% 0.80%

Yr 3 onwards 4% 1%
Fund Management Charges
Flexi Growth / Maximiser - 2.25%,
Flexi Balanced / Balancer - 2.25%, Varies from 0.90 %
Protector- 1.5% & Preserver - 0.75% to 1.25 %
Policy Administration Charge No Charge Rs 50 per month

Top-up Charge N.A

Switching Charge Rs. 100 for subsequent switch over 4 Rs. 100 for
switches in a policy year subsequent switch
over 2 switches in a

70
 policy year
0.25 % of the
Partial Withdrawal Charge No charge withdraw amt
A one-time charge
payable at the
inception of the
Miscellaneous Charge None policy of Rs. 700

Relaince Market
Features LifeTime Super Return Plan
Premium Pay Regular and Single
Frequency Regular Premium Premium
Higher of the Fund Value or
Higher of the Fund Value or Sum Assured, Sum Assured,\ which ever is
Death Benefit reduced by the applicable partial withdrawals the higher
Maturity Benefit Fund Value Fund Value
Rs 10,000 for Regular
Minimum Annual Premium and Rs. 25,000 for
Premium Rs 18000 pa Single Premium

Min Term 10 5
Max Term 75 40
Investment Related
4 Funds : Capital Secure,
6 Funds - Flexi Growth, Flexi Balanced, Balanced Fubd, Growth
Choice of Funds Maximiser, Balancer, Protector, Preserver Fund, Equity Fund
Allowed. Min Top up amt
Top-ups Not Allowed currently Rs. 2500
Switches 4 switches free in a policy year. Min Switch 1 switch free in a policy

71
 Amt :RS 2000 year
2 Partial wdrwl Allowed
after completion fo 3 policy
Allowed after completion fo 3 policy years. years. Min Amount is
Partial Withdrawals Min Amount is Rs.2000 Rs.10000
Additional
Allocation of Every 4 th year, starting at the end of 4th
Units(Bonus units) year@ 4% of Annual Premium Not Applicable
Cover Continuance
Options Applicable Applicable
Special Conditions
(If Any) None Redirection of Premium
Surrender Values
(At end of year 3) 98% 100%
(At end of year 4) 99% 100%
(At end of year 5) 100% 100%
(At end of year 6) 100%
(At end of year 7)
Accidental Death and
Accidental Total and
Permanent Disablement
Riders ADBR,CIBR,WOPR Benefit

Settlement Period Available. Upto a period of

Options Available. Upto a period of 5 years 5 years

Automatic
Transfer Plan Available Not Available

Boundary
Conditions

Min Age at Entry 0 0

Max Age at Entry 65 65

Min Age at maturity

Max Age at maturity 75 80

Min : For Single Premium

-125% of SP, For Regular :
Term/2*AP , subject to a min of Rs.1,00,000
Annualized Premium for 5
Min Sum Assured years or for half the Policy term

Increase/Decrease in Not Allowed Not Allowed

72
 Annual Premium

Increase/Decrease in
Term Not Allowed Not Allowed

Increase/Decrease in
Sum Assured Increase allowed Increase allowed
Decrease Not Allowed Decrease Not Allowed

Charges
LifeTime Super Relaince Market Return Plan
Premium Allocation
Charges
18000-49999 : 20%, For 5-9 term yr - 10%, 10-14
Year 1 50000 & above : 18% term yr- 15%, 15+ yrs - 20%
Year 2 7.5% 5% thereafter
Yr 3 onwards 4%
For Single Premium its 2%
throughout

Flexi Growth / Maximiser - 2.25%, Capital Secure - 1.50 % ,

Flexi Balanced / Balancer - 2.25%, Balanced Fund- 1.50%, Growth
Fund Management Protector- 1.5% & Preserver - Fund - 1.75% , Equity Fund- 1.75
Charges 0.75% %

Policy Administration
Charge No Charge Rs 40 per month

Top-up Charge NA 2%

Rs. 100 for subsequent switch over Rs. 100 for subsequent switch
Switching Charge 4 switches in a policy year over 4 switches in a policy year

Partial Withdrawal
Charge No charge Rs 100 per withdrawl

Miscellaneous Charge None None

73
 CHAPTER 6

FINDING AND DATA ANALYSIS

Finding and data analysis

74
 SAMPLE SIZE

RESPONDENT CATOGERY NO. OF PEPOLE

Service Man 28
Business Man 33
Shopkeeper 17
Housewife 8
Other 14
TOTAL 100

Q 1. Do you pay income tax?

CATEGORY NO. OF PEPOLE

YES 73
NO 27

Q2. Do you have any insurance policy?

OPENION NO OF PEOPLE TOTAL %

YES 130 87

75
NO 20 13

NO OF PEOPLE

13%

YES
NO

87%

76
Q3. Which company’s policy you are having?

COMPANIES PEOPLE %
LIC 92 61
ICICI 12 8
HDFC 10 7
OTHER 16 11
NON POLICY 20 13
HOLDER

77
 PEOPLE

13%
LIC
11%
ICICI
HDFC
7% OTHER
61%
8% NON POLICY HOLDER

Q.4 Do you know about the ICICIPRU?

CATEGORIES NO. OF PEPOLE %

YES 87 58
NO 63 42

78
 NO. OF PEPOLE

42%

YES
NO

58%

Q5. How did you come to know about the company.

CATEGORIES NO. OF PEPOLE %

ADVERTISEMENT 59 40

79
WORD OF MOUTH 44 29
YOUR BANK 11 7
INSURANCE AGENT 36 24

NO. OF PEPOLE

24%
40%
ADVERTISEMENT
WORD OF MOUTH
YOUR BANK
7% INSURANCE AGENT

29%

Q6 what kind of plan do you have?

CATEGORIES NO.OF PEPOLE TOTAL%

ENDOWNMENT 29 19
TERM 16 11
ULIP 85 57
NO POLICY HOLDER 20 13

80
 NO.OF PEPOLE

13% 19%
ENDOWNMENT
11% TERM
ULIP
NO POLICY HOLDER
57%

Q7 Are you satisfied with your Investment?

CATEGORIES NO. OF PEOPLE %

SATISFIED 83 56
UNSATISFIED 47 31
NO POLICY 20 13
HOLDER

81
 NO. OF PEOPLE

13%

SATISFIED
UNSATISFIED
31% 56% NO POLICY HOLDER

Q8 Are you aware about the benefit and the condition about your plan?

CATEGORIES NO. OF PEPOLE %

COMPLETE AWARE 34 23
ADEQUATE AWARE 25 17
CONFUSE 20 13

82
LESS KNOWLEDGE 28 19
COMPLETE 23 15
UNAWARE
NO POLICY HOLDER 20 13

NO. OF PEPOLE

13% 23% COMPLETE AWARE

ADEQUATE AWARE
15%
CONFUSE
LESS KNOWLEDGE
17% COMPLETE UNAWARE
19% 13% NO POLICY HOLDER

Q9 How much return you are expecting from your ULIP?

CATEGORIOES NO OF PEPOLE %
15-25% 30 20
25-35% 32 21
35-45% 28 19

83
MORE THAN 45% 40 27
NON POLICY HOLDER 20 13

NO OF PEPOLE

13% 20%
15-25%
25-35%
35-45%
27% MORE THAN 45%
21%
NON POLICY HOLDER
19%

84
Q10 Do you know about the life time super investment plan of
ULIP?

CATEGORIES NO.OF PEPOLE %

YES 88 59
NO 62 41

NO.OF PEPOLE

41%
YES
NO
59%

85
Q11. Do you think life time super investment plan of ICICIPRU is better other plans?

CATEGORIES NO.OF PEPOLE %

YES 49 33
NO 39 26
DON’T KNOW 62 41

NO.OF PEPOLE

33%
41%
YES
NO
DON’T KNOW

26%

86
Q12. why did you purchase insurance plan?

CATEGORIES NO. OF PEPOLE %

FOR PROTECTION 22 15
FOR SAVING 31 21
FOR INVESTMENT 54 35
FOR TAX SAVING 43 29

NO. OF PEPOLE

15%
29%
FOR PROTECTION
FOR SAVING

21% FOR INVESTMENT

FOR TAX SAVING
35%

87
Q13. Do you think ULIP is a risky investment?

CATEGORIES NO.OF PEPOLE %

VERY RISKY 17 13
MODERATE 23 18
SAFE 44 34
VERY SAFE 26 20
NON POLICY HOLDER 20 15

NO.OF PEPOLE

15% 13%
VERY RISKY
18% MODERATE
SAFE
20%
VERY SAFE
NON POLICY HOLDER
34%

FINDINGS

88
• Now people mainly prefer ULIP for saving, then bank
then Post-Office and after that prefer P.P.F. and other. The main
reason behind the insurance plan or ULIP preference is
switching facility or option to choose fund.
• Mainly people prefer low growth safe return as compare
to high growth some risky return.
• People mainly purchase life insurance policy for
investment and then for tax-saving they give 2nd preference to
protection.
• Approximately 20% people do not know what is
insurance.
• I also find that people mainly prefer L.I.C. as compare
to private insurance company.
• In my survey, I also find that only 56% people are
satisfied with current policy.
• In also find that only 58% people know about the ICICI
Prudential Life Insurance.

89
 CHAPTER 7

RECOMMANDATIONS

RECOMMENDATIONS

90
1. Emphasis on advertisement;Company should emphasis on insurance plan
advertisement, because at present company main focus on conventional
product advertisement.
2. Increase in commission:Company should also change the commission
structure of F.C., because in initial year commission is very high as compare
to remaining year. So F.C. does not focus on remaining year and many
policies lapsed.
3. Making ICICI more accessible: Here I mean that as 80% of the population
of India is rural therefore ICICI must have there branches in important towns
so it not only this will increase the awareness among people more over it will
help the company to acquire local market and cater to their needs effectively.
4. There should be a product with similar features and low initial premium:
A product like Life Time super is suitable for all but the initial premium which
cannot be less than 20000 rs. is on the higher side , therefore the company
should derive a product with similar features but with low initial premium so
that it is affordable to normal service class.
5. Administration charges should be low as in comparison with mutual
funds, national saving certificate (N.S.C),etc.: The company should lessen
down the administration charges so that this product can have an edge over
other investment modules like N.S.C, P.P.F etc.
6. Market surveys should be conducted regularly so that to know about
customer demands and changing needs: The company should know about
the customers changing needs and demands by conducting market surveys
which are helpful in innovating a product which suits the customers
requirements.
7. There should be Training batches on weekends : It is advised that the
company should have training batches for the already serving class on
weekends , so that the willing candidates can opt it as a part time business
opportunity.

91
 CHAPTER 8

SUMMARY/CONCLUSION

CONCLUSION

92
In India, insurance is generally considered as a tax-saving device instead of its other
implied long-term financial benefits. Indian people are prone to investing in properties
and gold followed by banks deposits. They selectively invest in shares also but the
percentage is very small—4.5%. Even to this day, Life insurance market has become
more vibrant . Smashing all doubts over the decision to liberalize the industry, the
overwhelming first year performance of the Indian insurance sector is test case of a
massive success story of private players entering into the erstwhile state monopoly.

The top three insurance companies-ICICI Prudential Life Insurance Company, HDFC
Standard Life and Max New York Life- combined managed to sell over two lakh
policies in a single year. ICICI Prudential, touted as the number one private life
insurer, scored on all three fronts-with the maximum number of policies sold
(1,00,000 policies), highest amount of premium collected (Rs. 2,700 crore).

93
 CHAPTER 9
BIBLIOGRAPHY

BIBLIOGRAPHY

94
Printed Sources:
1. ICICI Prudential Life Insurance Company Unit
Linked Product Guide.

Brochures:

ICICI Prudential Life Insurance Company Ltd., May 2004

Life Insurance Company Ltd.

Birla Sunlife Life insurance Company

Hdfc Standard Life Insurance Company

Om kotak Life Insurance Company

Bajaj allianz Life Insurance Compan

Publications:

www.bimaonline.com

www.google.com

www.licindia.com

www.iciciprulife.com

www.birlasunlife.com

95
CHAPTER 10

ANNEXURE

QUESTIONAIRE

96
Q 1. a) Do you make investments?
Yes ( ) No ( )

b) If Yes, where do you make investment?

Bank deposits ( ) Mutual Funds( )
Shares( ) life insurance ( )
Postal deposit schemes ( ) Real estate ( )
Precious metal ( )
Company debentures and deposits ( )
Q 2. What are the reasons to make investments?
Tax Saving ( ) Return ( )
Capital Appreciation ( )
secure investment ( )
Life cover ( )
Other ( )

Q3. Are you satisfied with your Investment?

YES ( ) NO ( )

Q 4. In which sector do you prefer to invest your money?

Private Sector ( )
Government Sector ( )
Q 5. Do you think services provided by private sector will be better than public sector
companies?
Yes ( ) No ( )
Q 6. Is private life insurance companies reliable for Investment?

Yes ( ) No ( )
Q 7. Have you heard about private insurance company icici prudential life?

97
 Yes ( ) No ( )

Q 8. From where did you come to know about icici prudential life insurance?

Electronic media ( ) print media ( )

Seminar ( ) Work shops ( )
Advisor ( ) others ( )

Q 9. a) Are you aware of unit linked insurance Plans (ulip)?

Yes ( ) No ( )

b) If Yes, Do you know, FULLY AWARE LITTLE AWARE

UNAWARE

The working of ULIP ( ) ( ) ( )

Criteria for returns ( ) ( ) ( )
Different Plans ( ) ( ) ( )
Where your fund invested by insurer ( ) ( ) ( )
Switching Option ( ) ( ) ( )

Q 10. a) Have you ever invested in ULIP plans?

Yes ( ) No ( )

b) If Yes, please specify: -

PLAN NAME :

saving plan ( ) protection plan ( )

Pension plan( ) children’ s plan ( )

98
Q 11. What are the reason for investment in ulip
Life protection ( )
Investment and Savings ( )
Flexibility ( ) Transparency ( )
Liquidity ( ) Tax planning ( )

Q 12. which company policy do you have?

ICICI Prudential ( )
HDFC Standard ( )
Bajaj Allianz ( )
Birla Sun Life ( )
Lic ( ) Other ………………………………...

Q13. How much return you are expecting from your ULIP?

15-25%
25-35%
35-45%
ABOVE THAN

Q14. Do you think ULIP is a risky investment?

VERY RISKY
LESS RISKY
SAFE
VERY SAFE

Q 15. Do you have any plan to buy ulip plans in near future?

Yes ( ) No ( )

99
Q 16. If you are not taking any ulip plans, please tell us the reasons why?

We couldn’t afford ( )
We don’t see any benefit with the system. ( )
We don’t want insurance. ( )
We don’t understand how ulip works. ( )
We are not too much aware of ulip plans. ( )

Q 17. What steps do you suggested to the companies to make their ULIP
plans more popular?
Give more advertisements. ( )
Arrange more work shops. ( )
Arrange more seminars ( )
Reduce charges ( )
Create awareness through advisors ( )
Others ………………………………………..
18. Personal Details

NAME-------------------------AGE------------------------------------
QUALIFICATION----------------------------------------------------
OCCUPATION---------------------------------------------------------
ADDRESS---------------------------------------------------------------
----------------------------------------------------------------------------

100
101