A PROJECT REPORT ON COMPARATIVE ANALYSIS OF VARIOUS PRODUCTS OFFERED BY ING LIFE INSURANCE

SUBMITTED IN PARTIAL FULLFILMENT FOR THE AWARD OF DEGREE OF MASTERS OF BUSINESS ADMINISTRATION

SubmittedTto:Dr.Pankaj Gupta

Submitted by:Damodar Das MBA Part-II

APEX INSTITUTE OF MANAGEMENT & SCIENCE JAIPUR ( 2012-2013)

ACKNOWLEDGEMENT
Completion of project report is a milestone in the life of every management student. It reflects the success of management education and enhances the self confidence. Definitely, it is the outcome of invaluable aggregate contribution of multiple efforts from all the directions-implicitly or explicitly.

The completion of this project has left me indebted to many people and I have the opportunity to express my deep sense of gratitude to those people without whose help my project report would have been incomplete.

I am sincerely thankful to my college H.O.D. Mrs. Jyotsana Khandelwal for giving me chance to get such an experience and an industrial experience.

I feel personally thankful to my project guide and our MBA coordinator for his guidance during my project.

I would also like to thank Mr. Shatrughan Singh, designated as G.S.M. at ING life insurance, for his help and cooperation throughout my project.

I sincerely acknowledge them for extending their valuable guidance, support for literature, critical reviews of project and the report and above all the moral support they had provided to me with all stages of this project.

Damodar Das

PREFACE
It is well evident that work experience is an indispensable part of every

professional course. In the same manner practical training in any organization is a must for every individual who is undergoing course. Without practical experience one cannot oneself as qualified potential, capable manager. Hence to fulfill requirement, I undertook 20 days Research training in ING LIFE INSURANCE at Jaipur.

I sincerely believe that there is no better place to learn the practical size of management studies than the industry itself.

INDEX

Contents Executive Summary 1.1 Objective of the study

Pg No.

1.2 Research Methodology 1.3 Expected Contribution from the Study 1.4 Limitation of the Research 1.5 Conclusion Introduction 2.1 General introduction about the Industry. 2.2 Background the Study 2.3 Statement of the Problem 2.4 Need and Importance of the Study 2.5 Objectives of the Research Company 3.1 Company Objectives 3.2 Vision and Mission 3.3 Company Hierarchy 3.4 Product Portfolio 3.5 Operational policy of KYC at ING Review of Literature 4.1 Purpose 4.2 Methodology Profile

Research Methodology 5.1 Statement of the problem 5.2 Objective of the study 5.3 Types of Research 5.4 Sampling Techniques 5.5 Sample Size 5.6 Instrumentation Techniques 5.7 Actual collection of Data 5.8 Other Software & Tools used for Data Analysis 5.9 Chapter Scheme

Data

Analysis

and

Interpretation

Comparative Analysis with different insurance products of different companies

Data Analysis and Interpretation Summary of Findings 7.1 Based on Analysis 7.2 SWOT Analysis Suggestions and Recommendations Conclusion Annexure Bibliography

EXECUTIVE SUMMARY:
The project titled "Comparative analysis of various products offered by ING is a study of the project undertaken in the ING Life Insurance Pvt. Ltd. The report covers a detailed study of the ING group, its history, the businesses it has ventured into and its organizational structure. The report also deals with an indepth study of the Insurance industry in India. The industry profile helps to gain an insight into the evolution of the industry and competitive dynamics prevalent in the market. It discusses the significant developments in the industry and analyzes the key trends and issues. The profile provides inputs in strategic business planning of industry professionals. The various sections of industry profile have been discussed below: Industry Snapshot: This section gives a holistic overview of the industry. It starts with defining the market and goes on to give historical and current market size figures. It also clearly illustrates the major segments of the market which would be discussed later on in the detailed report. Industry Analysis: It involves a comprehensive analysis of the industry and its market segments. This section discusses the key developments that have taken place in the industry. It also identifies and analyzes the driving factors and challenges of the industry. A description of the regulatory structure tells us about the major regulatory bodies, laws and government policies. Competitor Assessment: This section compares the major competitors in the industry. The Competitors Ata-Glance is aimed at giving an overview of the competitive landscape in the industry. Investment sector in India has seen a lot of changes in past few years with multinational companies coming into the country, bringing in their professional expertise in managing funds worldwide. In the past few years there has been a paradigm shift going on in the investment industry in India. Now 6

investors have a wide range of Schemes to choose from depending on their individual profiles. This study gives an overview of ING & their products types, benefits, risks, limitations, history, latest trends, global scenarios and various operational and marketing policies relating to the customer which includes-KYC,IRDA norms of KYC, customer identification, KYC policy: important points, policy taken & operations at ING, future plans for KYC and conclusion. Project covers the analysis of various types of products offered in the field of Insurance sector by ING. Through the report it can also be studied how the Customer Identification Process is being performed. The KYC policy includes the following things: 1. KYC Process 2. Guidelines on KYC Norms and Cash Transaction by RBI 3. Guidelines for New Account 4. Procedures for existing customers 5. ING policy on Know your customer The analysis of various products include responses from various clients under different income slabs and comparison on the basis of risk, return and time preference of customers, for these purpose charts and tables has drawn with the data collected through questionnaire.

1.1 OBJECTIVE OF THE STUDY:

The core objectives of this project is to highlight the importance of an investment in financial products1. To provide an insight about the profits of investing in various schemes, 2. To help an investor balance his risk and return by investing in these schemes. 3. To present a comparative analysis of various products available at ING for the purpose of investment and the operational policy of KYC in ING.

1.2 RESEARCH METHODOLOGY:

In this project report two types of data used are as follows: 1. Primary data 2. Secondary data

This study depends on the secondary data collected through the ING and the feedback collected through meeting with clients. Analysis has been done with the help of following: 1. A table has been drawn with relevant statistics. 2. Each table has been analyzed with a bar chart or a pie chart. 3. Finding has been reported at the end of project. 4. Data has been presented in both qualitative as well as quantitative form.

1.3 EXPECTED CONTRIBUTION FROM THE STUDY:

A basic need of planning investments sounds quite simple, but does an investor really plan as how he is going to manage his funds as investments that maximize their value that he holds today. The amount invested by him should first remain safe. Investments is not speculation or gambling rather it is an intelligent move of postponement of present consumption of funds with an objective of having an increased amount in hand available on a future date for consumption.

The core purpose of this project is to assess the various financial products offered by ING its functioning, relative worth of each scheme and the risk & return associated with it.

1.4 LIMITATION OF THE RESEARCH:

The study was restricted to Jaipur city. The sample size is limited to 100. Time is one of the constraints since the time frame of the study lasted for one and a half months.

1.5 CONCLUSION:
The project undertaken in the ING Life Insurance was a good learning experience and it has imparted to researcher a useful insight into the insurance sector. It enhanced his knowledge to a great extent and it really helped researcher in gaining information about the functioning of the various Department of the ING Vesya Life Insurance.

2.1 GENERAL INTRODUCTION ABOUT THE INDUSTRY:

INTRODUCTION The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business

(Nationalization) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the countrys GDP .In spite of all this growth the statistics of the p enetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC .since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.

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HISTORY OF INSURANCE SECTOR:

The business of life insurance in India in its existing form started in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are given in the table 1 Table 1: milestones in the life insurance business in India Year 1912 Milestones in the life insurance business in India The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business 1928 The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses

1938

Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

1956

245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

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Some of the important milestones in the general insurance business in India are given below in Table 1

Year

Milestones in the general insurance business in India

1907

The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business

1957

General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices

1968

The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

1972

The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Insurance Market- Present: [Since 2001] The insurance sector was opened up for private participation four years ago. For years now, the private players are active in the liberalized environment. The insurance market have witnessed dynamic changes which includes presence of a fairly large number of insurers both life and non-life segment. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe.

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There are now 29 insurance companies operating in the Indian market 14 private life insurers, nine private non-life insurers and six public sector companies. With many more joint ventures in the offing, the insurance industry in India today stands at a crossroads as competition intensifies and companies prepare survival strategies in a detariffed scenario. There is pressure from both within the country and outside on the Government to increase the foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV partners to bring in funds for expansion. There are opportunities in the pensions sector where regulations are being framed. Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued the first license for a standalone health company in the country as many more players wait to enter. The health insurance sector has tremendous growth potential, and as it matures and new players enter, product innovation and enhancement will increase. The deepening of the health database over time will also allow players to develop and price products for larger segments of society. State Insurers Continue to Dominate There may be room for many more players in a large underinsured market like India with a population of over one billion. But the reality is that the intense competition in the last five years has made it difficult for new entrants to keep pace with the leaders and thereby failing to make any impact in the market. Also as the private sector controls over 26.18% of the life insurance market and over 26.53% of the non-life market, the public sector companies still call the shots. The countrys largest life insurer, Life Insurance Corporation of India (LIC), had a share of 74.82% in new business premium income in November 2005. Similarly, the four public-sector non-life insurers New India Assurance, National Insurance, Oriental Insurance and United India Insurance had a combined market share of 73.47% as of October 2005. ICICI Prudential Life Insurance Company continues to lead the private sector with a 7.26% market share in terms of fresh premium, whereas ICICI Lombard General Insurance Company is the leader among the private non-life players with a 8.11% market share. ICICI 13

Lombard has focused on growing the market for general insurance products and increasing penetration within existing customers through product innovation and distribution. The industry now deals with customers who know what they want and when, and are more demanding in terms of better service and speedier responses. With the industry all set to move to a detariffed regime by 2007, there has been a considerable improvement in customer service levels, product innovation and newer standards of underwriting. Intense Competition in a de-tariffed environment, competition will manifest itself in prices, products, underwriting criteria, innovative sales methods and

creditworthiness. Insurance companies will vie with each other to capture market share through better pricing and client segmentation. The battle has so far been fought in the big urban cities, but in the next few years, increased competition will drive insurers to rural and semi-urban markets. Global Standards While the world is eyeing India for growth and expansion; Indian companies are becoming increasingly world class. Take the case of LIC, which has set its sight on becoming a major global player following an Rs280crore investment from the Indian government. The company now operates in Mauritius, Fiji, the UK, Sri Lanka, and Nepal and will soon start operations in Saudi Arabia. It also plans to venture into the African and Asia-Pacific regions in 2006. The year 2005 was a testing phase for the general insurance industry with a series of catastrophes hitting the Indian sub-continent. However, with robust reinsurance programmes in place, insurers have successfully managed to tide over the crisis without any adverse impact on their balance sheets.

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Some Areas of Future Growth:

Life Insurance The traditional life insurance business for the LIC has been a little more than a savings policy. Term life (where the insurance company pays a predetermined amount if the policyholder dies within a given time but it pays nothing if the policyholder does not die) has accounted for less than 2% of the insurance premium of the LIC (Mitra and Nayak, 2001). For the new life insurance companies, term life policies would be the main line of business. Health Insurance Health insurance expenditure in India is roughly 6% of GDP, much higher than most other countries with the same level of economic development. Of that, 4.7% is private and the rest is public. What is even more striking is that 4.5% are out of pocket expenditure (Berman, 1996). There has been an almost total failure of the public health care system in India. This creates an opportunity for the new insurance companies. Thus, private insurance companies will be able to sell health insurance to a vast number of families who would like to have health care cover but do not have it. Pension The pension system in India is in its infancy. There are generally three forms of plans: provident funds, gratuities and pension funds. Most of the pension schemes are confined to government employees (and some large companies). The vast majority of workers are in the informal sector. As a result, most workers do not have any retirement benefits to fall back on after retirement. Total assets of all the pension plans in India amount to less than USD 40 billion. Therefore, there is a huge scope for the development of pension funds in India. The finance minister of India has repeatedly asserted that a Latin American style reform of the privatized pension system in India would be welcome (Roy, 1997). 15

Given all the pros and cons, it is not clear whether such a wholesale privatization would really benefit India or not (Sinha, 2000). MARKET SHARE OF INDIAN INSURANCE INDUSTRY The introduction of private players in the industry has added value to the industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has creased from 95% (2002-03) to 81 %( 2004-05).

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TABLE NO:

NAME

OF

THE LIFE

INSURANCE

COMPANY AND THE SHARE HOLDING PATTEN

Name of the company Allianz Bajaj Life Insurance Co Aviva Life Insurance Birla Sun Life Insurance Co HDFC Standard Life Insurance Co ICICI Prudential Life Insurance Co ING Vysya Life Insurance Co. Life Insurance Corporation of India Nature of Holding Private Private Private Private Private Private Public

Max New York Life Insurance Co. MetLife Insurance Co. Om Kotak Mahindra Life Insurance Reliance insurance SBI Life Insurance Co TATA- AIG Life Insurance Company

Private Private Private Private Private Private

Indian Insurance Market

The Indian insurance market in spite of having a history covering almost two centuries took a turn after the establishment of the Life insurance Corporation in India in 1956. From being an open competitive market to being nationalized and then back to a liberalized market again, the insurance sector has witnessed all aspects of contest. The Indian insurance market conventionally focused around life insurance until recently, a various range of other insurance policies covering sectors like medical, automobile, health and other classes falling under general insurance came up, generally provided by the private companies. The life insurance of India

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added 7% to the GDP of the economy in 2009, an immense growth since 1999, when the gates were opened for the private company in the market.

Policy Change in the Indian Insurance market

The Insurance Regulatory Development Act, 1999 (IRDA Act) allowed the entry of private companies in the insurance sector, which was so far the sole prerogative of the public sector insurance companies. The act was passed to protect the concerns of holders of insurance policy and also to govern and check the growth of the insurance sector. This new act allowed the private insurance companies to function in India under the following circumstances: The company should be established and registered under the 1956 company Act The company should only the serve the purpose of life or general insurance or reinsurance business The minimum paid up equity capital for serving the purpose of reinsurance business has been decreed at Rs 200 crores The minimum paid up equity capital for serving the purpose of reinsurance business has been decreed at Rs 100 crores The average holdings of equity shares by a foreign company or its subsidiaries or nominees should not go above 26% paid up equity capital of the Indian Insurance company.

List of Life Insurance companies in India till 2012:

1. Life Insurance Corporation of India 2. MetLife India Life Insurance 3. ICICI Prudential 4. Bajaj Allianz Life Insurance 5. Max New York Life Insurance 6. Sahara Life Insurance 7. TATA AIG Life Insurance 8. HDFC Standard Life 9. Birla Sunlife 10. SBI Life Insurance Company Limited 18

11. Kotak Life Insurance 12. Aviva Life Insurance 13. Reliance Life Insurance Company Limited Formerly known as AMP Sanmar LIC 14. ING Life Insurance 15. Shriram Life Insurance 16. Bharti AXA Life Insurance Co Ltd 17. Future Generali Life Insurance Co Ltd 18. IDBI Fortis Life Insurance 19. AEGON Religare Life Insurance 1 20. DLF Pramerica Life Insurance 21. Canara HSBC Oriental Bank of Commerce Life Insurance 22. Star Union Dai-ichi Life Insurance Co. Ltd. 23. India First Life Insurance Company 24. Edelweiss Tokio Life Insurance

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2.2 BACKGROUND OF THE STUDY:

Investment Concept of Investment:

Investment is the employment of funds with the aim of generating additional income or growth in value. It involves the commitment of resources which have been saved or put away from current consumption in the hope that some benefit will occur in the future. Investment is putting money into something with the expectation of profit. More specifically, investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, dividends, or appreciation of the value of the instrument capital gains. It is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance no matter for households, firms, or governments. An investment involves the choice by an individual or an organization, such as a pension fund, after some analysis or thought, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency, that has certain level of risk and provides the possibility of generating returns over a period of time. Investment comes with the risk of the loss of the principal sum. The investment that has not been thoroughly analyzed can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner's control. The difference between speculation and investment can be subtle. It depends on the investment owner's mind whether the purpose is for lending the resource to someone else for economic purpose or not. In the case of investment, rather than store the good produced or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits. In terms of financial assets, these are often marketable securities such as a company stock (an equity 20

investment) or bonds (a debt investment). At times, the goal of the investment is to produce future cash flows, while at others it may be for the purpose of gaining access to more assets by establishing control or influence over the operation of a second company (the investee). Business firms or organizations raise funds from investors in the form of equities and debts (collectively known as the capital structure) and further reinvest it into various investment schemes by carefully analyzing the returns in order to meet out their obligations relating to purchase of assets which provides them long term benefits. In finance In finance, investment is the commitment of funds by buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold or collectibles. Valuation is the method for assessing whether a potential investment is worth its price. Returns on investments will follow the risk-return spectrum. Types of financial investments include shares, other equity investment, and bonds (including bonds denominated in foreign currencies). These financial assets are then expected to provide income or positive future cash flows, and may increase or decrease in value yielding the investor capital gains or losses. Investments are often made indirectly through intermediaries, such as banks, mutual funds, pension funds, insurance companies, collective investment schemes, and investment clubs. Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary. Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment. Saving within personal finance refers to money put aside, normally on a regular basis. This distinction is important, as investment risk can cause a capital loss when an investment is sold, unlike saving(s) where the more limited risk is cash devaluing due to inflation. 21

In many instances the terms saving and investment are used interchangeably, which confuses this distinction. For example many deposit accounts are labeled as investment accounts by banks for marketing purposes. Whether an asset is a saving(s) or an investment depends on where the money is invested: if it is cash then it is savings, if its value can fluctuate then it is investment. So people invest in various financial products as well as saving schemes and in insurance sector according to their needs,time horizon, level of risk and the return potential of the particular product.

Concept of Insurance
Insurance is a type of financial arrangement that helps individuals, businesses and other organizations protect themselves against unexpected or unpredictable losses or expenses. Insurance can protect against a variety of losses or damage such as personal injury and property damage. It is related to the protection of economic value of assets. Mechanism of insurance business is based on people with similar risk coming together and sharing the loss. It protects the economic value of an Asset thereby helping the individual to overcome an unexpected loss of income or drain of saving. Function: Insurance companies sell insurance policies that protect people from losses associated with specific unplanned events. If the unplanned events covered by the insurance policy occur, the insurance company will pay the person with the insurance policy a certain amount of money as set out in the rules of the plan. For instance, If one could purchase an insurance policy for damages to his home and the insurance company pay for damages if the home was affected by a fire or other events covered by the plan.

Types: Based on Todays life style the list of types of insurance is increasing day by day. The main types of insurance policies available in the market are: 22

1) Life Insurance: In this policy, the insurance company pays in case of the demise of the policy holder or at the time of the maturity of the policy. Now a day a new policy has been launched by LIC in which you will be covered under the insurance policy even after the maturity of the policy 2) Property Insurance: This insurance helps you to prevent the losses against theft, fire, burglary or any natural calamity like Earthquake, Floods etc. based on the points mentioned in the policy. 3) Health Insurance: Health Insurance consists of a package of various types of insurance related to health. For example Medical Insurance is one the major part of health insurance however in most of the cases, dental issues are not covered in this policy so there is another Dental Insurance policy which covers dental problems and is also a part of health insurance. The subcategory of health insurance also involves the injuries or accident at workplace insurance benefits. 4) Auto Insurance: Any financial loss due to accident of a vehicle is covered under the auto insurance policy. Sometimes the expenses on the medicines for treating injuries and all other medical expenditure are also covered under this policy. 5) Travel Insurance: Loss of personal belongings while traveling, medical coverage, delays in the travel are all part of the travel insurance policy. 6) Insurance at Amusement Points: This is a one of the new kinds of insurance policy (not very popular in India) where in you are insured against the equipments that you are using at the amusement joints. For example: if you are using boats for an independent boat ride , then they will charge you with some extra money for an property loss(say $5) and in case of any property damage you will not be liable to pay any amount required to repair the damaged property. 7) Credit Insurance: This type of insurance pays the loans of the policy holder in case of any accident of the policy holder or job loss or death. Third Party Insurance: This type of insurance covers damages caused by you (first party) to others (third party). For more details visit third party insurance. Apart from these above mentioned insurance policies there are many other types of insurance policies in the market (and the list keeps on increasing) that are 23

more or less related to these policies however providing benefits to the policy holders in a different and unique way. Insurance is basically divided into two categories as:

TYPES OF INSURANCE
(A) Life Insurance Term Life Insurance Permanent Life Insurance (B) General Insurance Fire Insurance Marine Insurance Accident Insurance

(A)Life Insurance Life Insurance is a contract providing for payment of a sum of money to the person assured or, following him to the person entitled to receive the same, on the happening of a certain event. It is a good method to protect your family financially, in case of death, by providing funds for the loss of income. A1. Term Life Insurance: Under a Term Life contract, the insurance company pays a specific lump sum to the designated beneficiary in case of the death of the insured. These policies are usually for 5, 10, 15, 20 or 30 years.

Term life insurance are the most popular in advance countries but were not so popular in India. However, after the entry of the private operators and

aggressive marketing by few players this kind of policies are becoming popular. The premium on such type of policies is comparatively quite low when compared with other types of life insurance policies, mainly due to the fact that these policies do not carry cash value. Plus of Term Life Insurance - The premium payable on these policies is low as they do not carry any cash value. - One can afford for quite high value insurance policies 24

Minus of Term Life Insurance - If one survives the period of the policy, he / she does not get any money at the end of the policy. The premium on such policies keeps on increasing with age mainly because the risk of death of older people is more. Over the page of 60, these policies become difficult to afford. A2. Permanent Life Insurance: In a Permanent Life contract, a portion of the money paid as premiums is invested in a fund that earns interest on a tax-deferred basis. Thus, over a period of time, this policy will accumulate certain "cash value" which you will be able to get back either during the period of the policy or at the end of the policy. Your need for life insurance can change over a lifetime. At any age, you should consider your individual circumstances and the standard of living you wish to maintain for your dependents. In most cases, you need life insurance only if someone depends on you for support. Your life insurance premium is based on the type of insurance you buy, the amount you buy and your chance of death while the policy is in effect. This type of policy not only provides protection for your dependents by paying a death benefit to your designated beneficiary upon your death, but it also allows you to use some part of the money while you are alive or at the end of the policy. Some examples of such policies are: - Whole

Life, Universal Life and Variable-Universal Life.

Endowment Policy: These policies provide for period payment of premiums and a lump sum amount either in the event of death of the insured or on the date of expiry of the policy, whichever occurs earlier.

Money Back Policy: These policies provide for periodic payments of partial survival benefits during the term of the policy itself. A unique feature associated with this type of policies is that in the event of death of the insured during the policy term, the designated 25

beneficiary will get the full sum assured without deducting any of the survival benefit amounts, which have already been paid as money-back components. Moreover, the bonus on such policies is also calculated on the full sum assured.

Annuity/Pension Policy/Funds: This policies / funds require the insured to pay the premium as a single lump sum or through installments paid over a certain number of years. The insured in

return will receive back a specific sum periodically from a specified date onwards (the returns can be monthly, half yearly or annually), either for life or for a fixed number of years. In case of the death of the insured, or after the fixed annuity period expires for annuity payments, the invested annuity fund is refunded, usually with some additional amounts as per the terms of the policy. Annuities / Pension funds are different from all other forms of life insurance as an annuity policy / fund does not provide any life insurance cover but merely offers a guaranteed income either for life or a certain period. Therefore, this type of insurance is taken so as to get income after the retirement.

(B) General Insurance:

General Insurance includes those insurance policies which are not covered under life insurance. General insurance provides protection against risk of loss to assets like home, motor vehicle, etc. Common general insurance plans include motor insurance, fire insurance, personal accident insurance, health insurance, marine insurance etc. The most popular general insurance plans are mentioned hereunder: B1. Fire Insurance: Fire insurance provides protection against damage to property caused by accidents due to fire, lightening or explosion, whereby the explosion is caused by boilers not being used for industrial purposes. Fire insurance also includes 26

damage caused due to other perils like strom tempest or flood; burst pipes; earthquake; aircraft; riot, civil commotion; malicious damage; explosion; impact. B2.Marine Insurance: Marine insurance basically covers three risk areas, namely, hull, cargo and freight. The risks which these areas are exposed to are collectively known as "Perils of the Sea". These perils include theft, fire, collision etc. Marine insurance further includes: Marine Cargo Marine cargo policy provides protection to the goods loaded on a ship against all perils between the departure and arrival warehouse. Therefore, marine cargo covers carriage of goods by sea as well as transportation of goods by land. Marine Hull Marine hull policy provides protection against damage to ship caused due to the perils of the sea. Marine hull policy covers three-fourth of the liability of the hull owner (ship-owner) against loss due to collisions at sea. The remaining 1/4th of the liability is looked after by associations formed by ship-owners for the purpose (P and I clubs). B3.Miscellenous: As per the Insurance Act, all types of general insurance other than fire and marine insurance are covered under miscellaneous insurance. Some of the examples of general insurance are motor insurance, theft insurance, health insurance, personal accident insurance, money insurance, engineering insurance etc.

2.3 STATEMENT OF THE PROBLEM: Investment sector in India has seen a lot of changes in past few years with multinational companies coming into the country, bringing in their professional expertise in managing funds worldwide. In the past few years there has been a paradigm shift going on in the investment industry in India. Now investors have a wide range of Schemes to choose from depending on their individual profiles. Since Investment alternatives are many in number it is very difficult for the investors to choose the right type of investment. It is also difficult for them to 27

choose the investment which gives more returns with low risk. Investment alternatives are negotiable financial securities & non-negotiable financial investments and insurance products. The market plans offers high returns with high risk whereas guaranteed return plans or traditional plans offers the fixed return with assurance. 2.4 NEED & IMPORTANCE OF THE STUDY: The basic need for the study is to understand the basic concepts of insurance sector and the perception and investment pattern of respondents. Their perception towards ING in Jaipur and its performance in the market. This is done to know consumers preference and needs and try to bring about the product which may give satisfaction to the consumers. It is done to know the overall merit and demerit of the product to give suggestions to improve the product. This study gives an overview of ING & there products types, benefits, risks, history, latest trends, global scenarios and various operational policies relating to the customer which includes-Products of ING,KYC,IRDA norms of KYC, customer

identification, KYC policy: important points, policy taken & operations at ING, future plans for KYC and customers perception about the various plans available in the market.

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2.5 OBJECTIVE OF THE RESEARCH: i. ii. iii. iv. To identify various investment alternatives in insurance sector. To compare the strength & weakness of different investment opportunity To understand investors Preference in investment alternatives. What characteristics of the investment product had influenced investors to make the investment in particular investment v. To assess the various products of ING.

29

COMPANY PROFILE:
ING- Company Profile:
ING was founded in 1991 by a merger between Nationale-Nederlanden and NMB Postbank Group. During the past years ING has become a multinational with diverse international activities.

The roots of ING can be traced to the insurers De Nationale Levensverzekering Bank and De Nederlanden van 1845 and to the public bank services such as De Rijkspostspaarbank and De Postcheque- and Girodienst, as well as to the Nederlandsche Middenstands Bank. These are the legal predecessors of the founding fathers of ING: Nationale-Nederlanden and NMB Post bank Group. The founding of ING as one company was started in 1990 when the legal restrictions on mergers between insurers and banks were lifted in the Netherlands. This prompted insurance company Nationale-Nederlanden and banking company NMB Post bank Group to enter into negotiations. The merger into Internationale Nederlanden Group took place in 1991. The market soon abbreviated the name to I-N-G. The company followed suit by changing the statutory name to ING Groep N.V. Since 1991, ING has developed from a Dutch company with some international business to a multinational with Dutch roots. This was achieved through a mixture of organic growth, such as the creation of ING Direct from scratch, as well as various large acquisitions.

The first large acquisition took place in 1995, when ING took over Barings Bank. This acquisition increased the brand recognition of ING around the world and strengthened its wholesale banking presence in the emerging markets. And then there was Life of Georgia. This insurance company was acquired by NationaleNederlanden in 1979, resulting in a significant increase in activities in the US. Via Life of Georgia, the activities in Asia expanded considerably. However in 2004, ING as a group had become well-established in both regions and Life of Geogeria was sold. Other acquisitions, such as the Belgian Bank Brussels Lambert, strengthened the Groups presence in the Benelux. In addition, the activities in de United States were doubled as a result of organic growth and the acquisition of Equitable of Iowa, 30 ReliaStar, Aetna

financial

services

and

merchant

bank

furman

Selz.

Profile: ING has gained recognition for its integrated approach of banking, insurance and asset management. Furthermore, the company differentiates itself from other financial service providers by successfully establishing life insurance companies in countries with emerging economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another specialization is ING Direct, an Internet and direct marketing concept with which ING is rapidly winning retail market share in mature markets. Finally, ING distinguishes itself internationally as a provider of employee benefits, i.e. arrangements of nonwage benefits, such as pe nsion plans for companies and their employees. About ING Group: ING is a global financial institution of Dutch origin offering banking, insurance and asset management to over 85 million private, corporate and institutional clients in over 40 countries. With a diverse workforce of approximately 130,000 people, ING is dedicated to setting the standard in helping their clients manage their financial future. About ING in India: ING operates through three businesses in India, ING Vysya Life Insurance, ING Vysya Bank and ING Investment Management. ING Vysya Bank is a premier private sector bank with over 76-year heritage and 1.5 million satisfied customers. ING Investment Management believes in providing investors with the knowledge & opportunity to manage their future easily. ING Life India, in its 10th year of operations, is a part of the ING Group. ING Life entered the private life insurance industry in India in September 2001. The company has issued over 1 million policies and is staffed by over 6500 employees. Headquartered in Bangalore, ING Life India is currently present in 229 cities across 251 branch offices. In addition, the company distributes its products in several parts of the country through its partner's presence. 31

ING Life India distributes its products through two channels, the Tied Agency Force and the Alternate Channel. The Tied Agency force comprises over 50,000 ING Life Advisors, spread across the country. The Alternate Channels business within ING Life India is a fast growing distribution channel, and includes the Banc assurance partner (ING Vysya Bank), Referral Partners, Corporate Agents and Brokers. ING was established as a Naamloze Vennootschap (public limited liability company) on March 4, 1991, through the merger of Nationale-Nederlanden, which was the largest insurer in the Netherlands, and NMB Postbank Group, which was one of the largest banks in the Netherlands. ING Group N.V. is incorporated under the laws of the Netherlands. History of the ING Lion: INGs orange lion goes way back to INGs Dutch roots. Orange is the national color of the Netherlands, and the lion the countrys national symbol. Several founding ING companies, banks and insurers, had or still have the lion in their logos. Logos from our insurance history The original insurance companies, De Nederlanden van 1845 and the Nationale Levensverzekering-Bank, both had lions in their logos. For a long time De Nederlanden van 1845 used the Dutch coat of arms. The Nationale had a logo depicting a virgin with a lion at her feet, symbolizing the companys courage in looking after its customers savings deposits. The two companies merged and became Nationale-Nederlanden

32

The logo was very much a negotiating issue when NMB and Postbank merged, and later on when NMB Postbank Group and Nationale-Nederlanden joined forces but the lion has survived all mergers.

ING current logo The orange lion adorns their global ING logo.

Business Divisions:

ING is serving its services in three fields of areas which are as follows:

ING BUSINESS DIVISIONS

BANKING

INSURANCE

ASSET MANAGEMENT

3.1 COMPANY OBJECTIVE: ING aims to deliver financial products and services in the way that their customers want them delivered: with exemplary service and maximum convenience at competitive prices.

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3.2 ING MISSION

Mission statement: To set the standard in helping their customers manage their financial future. ING- Tag Line:

Shaping our future

ING LIFE INDIA-CURRENT SHAREHOLDING:

26%

11.53% ING PARTENERS IN INDIA: 34

12.47%

1. Exide Industries Limited-is the market leader in both automotive and industrial segments. EXIDE and SF (Standard Furukawa), the flagship brands of the Company, which are the leading battery brands in the country. 2. Rajan Raheja the promoter of the group is ranked 30th by Forbes among Indians by New worth... His Net worth stands at: $2.15 billion. 3. Gujarat Abuja Cements Ltd.-the third largest cement company in India. 4. Enam Group-Enam Group is one of Indias leading financial service providers reputed for its ability to perceive the true potential of businesses and enhance their value. The culture at Enam Group is deeply rooted in ethics, innovation and financial sobriety.

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3.3 COMPANY HIERARCHY: ING -ORGANIZATION STRUCTURE IN INDIA

Kshitij Jain MD & CEO

Rahul Agarwal Chief Distribution Officer

B.Ashwin Chief Operating Officer

John Boers Chief Financial Officer

Uco Vegter Chief Marketing & Strategy Officer

Priya G Director Human Resource

Parag Mathur Legal Counsel, Company Secretary

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Organization Structure-Regional Level:

Regional Vice President

Area Training Manager

Area Managers

Branch Manager Customer Service Manager Training Manager BDE CSE SM GSM Advisors Advisor Advisors s FC s ASM Advisors Advisors

Agency Manager Branch Coordinator

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3.4 PRODUCT PORTFOLIO:

Insurance Products of ING: ING Life Insurance aims to make customers look at life insurance afresh, not just as a tax saving device but as a means to live life to the fullest. It believes in enhancing the very quality of life, in addition to safeguarding an individual's security. The Company follows a customer centric approach while designing its life insurance products. The ING Life product portfolio offers products that cater to every financial requirement, at all life stages. The various insurance plans of ING are as follows: i. a. b. c. ii. a. b. iii. a. Children Plans ING Aashirvad Creating Life Child Protection Plan Creating Life Money Back Plan Protection Plans ING Term Life ING Term Life Plus Savings Plans ING ING Secured Secured Income Income Insurance Insurance Plans Plus

- ING Secured Income Insurance RP b. c. d. Reassuring Life Endowment Plan (Reversionary Bonus) Safal Jeevan Endowment Plan ING Creating Star Guaranteed Future

iv.

Retirement Plans a. ING Immediate Annuity

v.

Investment Plans a. ING Star Life 38

b. ING Prospering Life SP c. ING Market Shield

d. ING Prospering Life e. ING Uttam Jeevan - Regular Premium f. ING Uttam Jeevan - Single Premium g. Powering Life h. New Fulfilling Life vi. Riders a. Accidental Death Rider b. Accidental Death, Disability and Dismemberment Rider c. ING Term Life Rider d. ING Critical Illness Rider e. ING Critical Illness Limited Pay Rider

i.

CHILDREN PLANS: ING Life launches its new design amongst child plans that will help revolutionize their customers approach towards planning for their child's future. The various children plans of ING are as follows: a. ING Aashirvad: ING Aashirvad is a guaranteed child life insurance plan that pays out monies and helps an investor to plan for the career and marriage of their children. In this plan the parent and child are the life insured/s during the policy term and once their child's future is adequately secured through the education and marriage payouts, the benefit of long term insurance protection shifts to the child during the extended policy term. b. Creating Life Child Protection Plan: Creating Life Child Protection Plan ensures future of an investors child in case of their untimely death. It also creates a financial asset for their child. It provides the sum assured to their child immediately after their untimely death. On maturity, an additional sum assured is paid with an accumulated compounded revisionary bonus and a final additional bonus. 39

c. Creating Life Money Back Plan: The creating life child protection money back plan is a unique plan that fulfills investors need for protection, saving, retirement and investment. It gives a double benefit of a life cover along with periodic cash returns during the term of the policy. ii. PROTECTION PLAN: Protection Plans ensures that investors family continues to enjoy a comfortable lifestyle even in their absence. It makes available a variety of plans to provide them with the flexibility of choosing one that fits their needs the best. It recognizes protection as the basic insurance need and has therefore kept its products comprehensive and economical. The various protection plans of ING are as follows:

a. ING Term Life Simplest and most economical form of term life insurance.Large sum assured at highly affordable premium rates. b. ING Term Life Plus Term insurance product with return of premium.Large sum assured at affordable premium rates.

iii.

SAVINGS PLAN: Saving Plans helps investors to achieve their life goals making cherished moments for them and their family. They provide them with the flexibility to save for their future requirements while continues improvement in their current lifestyle.

a. ING Secured Income Insurance Plans ING Life Insurance brings to you a new class of endowment plans under the bouquet ING Secured Income Insurance Plans. These plans are designed to offer security to you and your family in the form of long term benefits, while assuring your family a regular income if anything unfortunate were to happen. 40

Under this bouquet, you can choose from two plans: ING Secured Income Insurance Plus : A limited pay plan that offers life cover not only in lump sum but also as income for family for 60 months. On maturity you get sum assured with 10% guaranteed addition along with accrued bonuses, if any. ING Secured Income Insurance RP : A regular pay plan that offers life cover in lump sum and as income for family for 60 months. It is available in two variants base and economy.

b. Reassuring Life Endowment Plan (Reversionary Bonus): Savings plan with a highly reliable safety net for investors family in case something happens to them. c. Safal Jeevan Endowment Plan: Comprehensive protection and savings plan with an in-built accident cover. Option to choose from a pre-packaged range of fixed terms and premiums. d. ING Creating Star Guaranteed Future: ING Assured Returns are possible from this plan. - The Guaranteed Interest Rate declared for the 2nd Policy year is 9%, - The rate for a Delayed Payment Interest rate is 5.5%*. * (including Account Administration Fees of 1.25%)

iv.

RETIREMENT PLANS: Retirement Plans ensure that investors lead their life after retirement on their own terms; doing things that they have always dreamt of. Company also believes that it is important to be in control of retirement planning. Companys innovative features help them to choose their retirement age and also control the way their investments are managed keeping in mind their retirement needs.

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a. ING Immediate Annuity : A plan that gives investors guaranteed income throughout their retired life.

v.

INVESTMENT PLANS: Investment Plans are created keeping investors need in mind. ING appreciates the flexibility required to suit risk appetite and the commitments the investor may want to make. INGs global expertise in managing wealth for individuals at all stages in their life ensure that the company has products to suit customers objective of investment.

a. ING Star Life ING STAR Life, a unique life insurance plan that helps you enjoy assured tax free returns on your hard earned savings. All you have to do is pay premium for 3 years and enjoy benefits in a 12 year period. ING STAR Life has unique advantages:

Get 9-10% Guaranteed Addition rate for 12 years. Pay for just 3 years Life Cover (5 or 10 times the annual premium) Assured tax free returns

b. ING Prospering Life SP ING Prospering Life SP is a Single Premium Unit Linked Insurance Plan which maximizes returns over the long term (10-years) by providing choice of 6 investment funds with just a single contribution. c. ING Market Shield ING Market Shield not only provides life cover but also balances risk and reward in a transparent manner and provides investors an opportunity to enjoy growth

42

while retaining protection. It is a Unit linked life insurance plan that ensures them an opportunity to maximize gains and at the same time limits losses. d. ING Prospering Life An excellent Unit Linked Life Insurance plan for wealth creation while enjoying control over assets at all times. e. ING Uttam Jeevan - Regular Premium A long term investment tool with market linked returns and increasing Life Cover to secure financial protection for the customer's family at every stage of life.

f. ING Uttam Jeevan - Single Premium ING Uttam Jeevan SP is a simple, easy to understand plan which fulfills customers needs of investment and protection. It is a unique Single Premium unit linked plan which can help them to strike their future worries in one shot.

g. Powering Life Investment plan with high reversionary bonus. Premium payments for a short period of time, life cover for a longer period and high maturity benefits . h. New fulfilling Life Plan Investment plan with double benefit of periodic cash returns during policy term and maturity or death benefit.

vi.

RIDERS: a. Accidental Death Rider

In case of death of the life assured, due to accident during the term of the policy, the Sum Assured under this Rider is paid along with the Sum Assured under the basic policy. Definition of Accident: An event or series of events of violent, external and visible nature causing bodily injury is defined as accident.

43

Accidental Death : Death, which results from bodily injury, occurs within 180 days from the date of injury resulting from an accident.

b. Accidental Death, Disability and Dismemberment Rider Death Benefit: In case of death due to accident, the Sum Assured under this Rider is payable along with the Sum Assured of the basic policy. Definition of Accident: An event or series of events of violent, external and visible nature causing bodily injury is defined as accident.

Total Permanent Disability: Resulting from an accident and occurring within 180 days of the date of accident and lasting for at least 180 consecutive days. Completely and continuously preventing the Life Assured from engaging in any occupation to earn any wages.

Definition of Loss: Physical severance or total irrevocable loss of use which results from accident and occurs within 180 days from the date of the accident. Dismemberment of limbs occurring within 180 days of accident:

Physical severance of arm at or above wrist Physical severance of leg at or above ankle Physical severance of a thumb, an index finger, and at or above metacarpophenageal joint

c. ING term Life Rider ING Term Life Rider is an option to increase your life protection at a nominal cost. In case of death of the life assured during the term of the policy, the Sum Assured under this Rider is paid along with the Sum Assured under the basic policy. It ensures that your family enjoys enhanced security and a comfortable lifestyle at a fraction of a cost. d. ING Critical Illness Rider

44

ING Critical illness Rider is an add-on protection benefit that policy holders can add to their new or existing traditional ING Life Insurance policies. It pays a lump sum benefit in case the life assured is diagnosed with major illness like Heart Attack, Cancer, Paralysis, Kidney failure, Coma etc. This benefit payout ensures that family is not burdened with high medical expenses, thereby allowing them to maintain their standard of living e. ING Critical Illness Limited Pay Order ING Critical illness Limited Pay Rider is an add-on protection benefit that policy holders can add to their new or existing traditional ING Life Insurance policies. It pays a lump sum benefit in case the life assured is diagnosed with major illness like Heart Attack, Cancer, Paralysis, Kidney failure, Coma etc. This benefit payout ensures that family is not burdened with high medical expenses, thereby allowing them to maintain their standard of living. In this, premium is to be paid for 5 years, while protection is ensured for 10 years.

Operational policy of KYC at ING: Know Your Customer (KYC) KYC is an acronym for Know your Customer, a term commonly used for Customer Identification Process. The Prevention of Money Laundering Act, 2002 (PMLA) forms the core of the legal framework put in place by the Indian Regulators to combat money Laundering to be followed by banking companies, 45

financial institutions and intermediaries by administering KYC process and other reporting requirements such as suspicious transactions reporting, etc. SEBI has prescribed certain requirements relating to KYC norms for Financial Institutions and Financial Intermediaries (such as Mutual Funds) to know their customers. This would be in the form of verification of identity and address, providing information of financial status, occupation and such other demographic information. Applicant must be KYC compliant while investing with any SEBI registered Mutual Fund. Thus, with effect from February 01, 2008, all investors (Individuals or Non Individuals) who wish to make an investment of Rs. 50,000 or above in a mutual fund scheme will be required to complete the KYC process. This would also apply to new Systematic Investment Plan (SIP) registrations on or after 01 February 2008, if each SIP installment is of value greater than or equal to Rs. 50,000. This one-time verification is valid for transactions across all mutual funds. The process for KYC is as follows: 1. A completed KYC application form along with the documents/information as mentioned in point (3) below should be submitted to any point of service (POS). 2. A KYC application form is available at the investor service centers of the Fund and CAMS or any designated Points of Service (POS) of CSDL Ventures Ltd. 3. The documents required to be submitted along with the KYC application form are: a) Recent Passport size photograph, b) PAN card copy, c) Address proof and d) Detail of occupation and income. (The detailed list of documents/information required and instructions to fill the form can be found in the KYC application form). 4. After verification of the KYC application form and accompanying documents, investors will receive a letter certifying their KYC compliance. There is no charge for this verification. 5. When investing with the Fund, a copy of this letter should be attached to the schemes application form to avoid rejection. 46

6. If you already have a Mutual Fund Identification Number (MIN) (not valid anymore) and you have not provided PAN at the time of obtaining MIN, you are requested to complete the PAN formalities mentioned above to be KYC compliant. Guidelines on Know Your Customer norms and Cash transactions by RBI: As part of Know Your Customer (KYC) principle, RBI has issued several guidelines relating to identification of depositors and advised the banks and companies to put in place systems and procedures to help control financial frauds, identify money laundering and suspicious activities, and for

scrutiny/monitoring of large value cash transactions. Instructions have also been issued by the RBI from time to time advising banks to be vigilant while opening accounts for new customers it prevent misuse of the banking system for perpetration of frauds. Taking into account recent developments, both domestic and international, it has been decided to reiterate and consolidate the extent instruction on KYC norms and cash transactions. The following guidelines reinforce our earlier instructions on the subject with a view a to safeguarding banks from being unwittingly used for the transfer or deposit of funds derived from criminal activity (both in respect of deposit and borrower account) , or for financing of terrorism. The guidelines are also applicable to foreign currency accounts/transactions. Know Your Customer (KYC) guidelines for New accounts: The following KYC guidelines will be applicable to all new accounts with immediate effect.

1. KYC Policy: i. Know Your Customer (KYC) procedure should be the key principle for identification of an individual/corporate opening an account. The customer identification should entail verification through an introductory reference from an

47

existing account holder/a person knows to the bank or on the basis of documents provided by the customer. ii. The Board of Directors of the banks should have in place adequate policies that establish procedures to verify the bona fide identification of individual/corporate opening an account. The Board should also have in place policies that establish processes and procedures to monitor transactions of suspicious nature in accounts and have systems of conducting due diligence and reporting of such transactions. 2. Customer Identification: The objectives of the KYC framework should be two fold, a. To ensure appropriate customer identification and b. To monitor transactions of a suspicious nature. Banks should obtain all information necessary to establish the identity/legal existence of each new customer, based preferably on disclosures by customers themselves. Typically easy means of establishing identity would be documents such as passport, driving license etc. However where such documents are not available verification by existing account holders or introduction by a person known to the bank may suffice. It should be ensured that the procedure adopted does not lad to denial of access to the general public for banking services. In this connection, company also invite a reference to Report on Anti Money Laundering Guidelines for Banks in India prepared by a Working Group has made several recommendations for strengthening KYC norms with anti money laundering focus and has also suggested formats for customer profile, account opening procedures, establishing relationship with specific categories of customers, as well as an illustrative list of suspicious activities. Know Your Customer procedures for existing customers: Banks and Companies are expected to have adopted due diligence and appropriate KYC norms at the time of opening of accounts in respect of existing customers in terms of our extant Instructions referred to in the Annexure.

48

However, in case of any omission, the requisite KYC procedures for customer identification should be got completed at the earliest.

INGS Policy on Know Your Customer: INTRODUCTION: Know your Customer (KYC) is a set of guidelines aimed at preventing banks from being used intentionally or unintentionally by criminal elements for committing financial frauds, transferring or deposits of funds derived from criminal activity or for financing terrorism. This policy document is a consolidation of various guidelines issued by Reserve Bank as also our Bank for proper identification of an account holder/customer and for scrutiny/ monitoring of large value cash transaction or transaction of a suspicious nature. This KYC policy is applied to the whole group of ING (with minor required changes) which includes its three business divisions of Banking, Insurance and Asset management. OBJECTIVES OF KYC POLICY 1. To lay down explicit criteria for acceptance of customers. 2. To establish procedures to verify the bona-fide identification of individuals/non individuals for opening of account. 3. To establish processes and procedures to monitor high value transactions and / or transactions of suspicious nature in accounts. 4. To develop measures for conducting due diligence in respect of customers and reporting of such transactions. DEFINITION OF CUSTOMER For the purpose of KYC policy, a customer will be defined as: A person or entity or entity that maintains an account and/ or has a business relationship with the Bank, One on whose behalf the account is maintained (i.e. the beneficial owner), 49

 Beneficiaries of transactions conducted by professional intermediaries such as Stock as Brokers, Chartered Accountants, Solicitors etc. as permitted under the law, and Any person or entity connected with a financial transaction which can pose significant reputation or other risks to the Bank, say a wire transfer or issue of a high value demand drafts as a single transaction. CUSTOMER ACCEPTANCE a. The bank will have an elaborate standard for i. Obtaining comprehensive information regarding new customers at the initial stage and that of existing customers over a predetermined period, thereby establishing the bona fides of customers opening accounts with the Bank. ii. For identifying high value transactions and transactions of a suspicious nature and keeping a watch on such transactions as well as for reporting them to law enforcing Regulatory authorities. b. The Bank will lay down/ spell clearly the document requirements and other information to be collected in respect of different categories of customers depending on perceived risk and keeping in mind the guidelines issued by Reserve Bank of India from time to time; c. The Bank will ensure that a new account is not opened or an existing one is not closed where the Bank is unable to apply due diligence measures i.e. unable to verily the identity and/or obtain documents required as per the risk categorization due to non cooperation of the customer or non-reliability of the data/information furnished to the Bank. It will, however, have suitable built-in safeguards to avoid harassment of the customer. For example, decision to close an account will be taken at the level of controlling office after giving due notice to the customer explaining the reasons for such a decision; The Bank will ensure that circumstance in which a customer is permitted to act or behalf of another person/ entity will be clearly spelt out in conformity with established law and practice of banking as there could be occasions when an account is operated by a mandate holder or where an account is opened by an intermediary in the fiduciary capacity; 50

d. The bank will ensure that before opening an account there are adequate checks to ensure that the identity of the customer does not match with any person with known criminal back ground or with banned entities like individual terrorist or terrorist organizations. 1. CUSTOMER IDENTIFICATION Identification is an act of establishing who a person is in the context of KYC it means establishing who a person purports to be and will involve identifying the customer and verifying his/ her identities by using reliable and independent source documents, data or information. For this purpose the Bank will obtain sufficient information necessary to establish to is satisfaction the identity of each new customer, whether regular or occasional and the purpose of the intended nature of banking relationship. Accounts of Individuals In case of customers that are natural person the Bank will obtain sufficient identification data to verify a. The identity of customer b. His/her address/location and(c) his/her recent photograph. The true identity and bona fides of the existing customers and new potential customers opening accounts with the Bank and obtaining basic background information would be paramount importance.

51

Other than individual accounts For customers that are legal person or entities the Bank will. a. Verify the legal status of the legal person/ entity through proper and relevant documents, b. Verify that any person purporting to act on behalf of the legal person/ entity is so authorized and identify and verify the identity of that person.

2. VERIFICATION OF GENUINENESS OF ADDRESS: In all instances of opening of new accounts a letter of thanks will be sent by the Bank by registered post at the recorded addresses to all customers and introducers with dual purpose, thanking them for opening the account with the Bank and for verification of genuineness of address furnished by the account holder. Undelivered envelopes in this regard will be followed up closely at the branch level. The Branch may also contact the customer at the telephone number provided in the account opening form or other documents to verify the address and other details. 3. CUSTOMER PROFILE: For the purpose of exercising due diligence on individual transactions in accounts, a Customer Profile of individual account holders will be included in the account opening forms. The customer profile will contain information relating to the customers identity, social / financial status, nature of the business activity, information about the customers clients business and their location etc. While preparing the customer profile the Bank will take care to seek only such information from the customer which is relevant for the purpose of risk categorization and is not intrusive. The customer profile will be a confidential document and the details contained therein will not be divulged for cross selling or any other purpose. The information will be of two types namely mandatory and optional as stated below: A. Mandatory Information:

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Occupation, Source of funds, Monthly Income, Annual turnover, Date of Birth Any relative settled abroad, Dealings with other banks, Existing credit facilities , Assets (Approximate value)., Expected turnover. B. Optional Information: Marital Status; Education Qualification; Educational Qualification of spouse; Details regarding children; Information like- Owns a car/two wheeler, have credit card etc.

4. OBTAINING INTRODUCTION: The Bank generally insists on introduction by a known person. Introduction is a process of ascertaining the identity of a person and is acceptability for establishing business relationship and verifying the true identity of the intending customer before opening an account. When the Bank opens an account in the name of a customer, it has to render a number of services, including collection of cheques, in the ordinary course of business. It is, therefore, essential that the Bank is aware of the credentials of the prospective customer such as his profession, business address etc. through proper introduction and verification of antecedents of the account holder in each and every account. 5. IDENTIFICATION OF HIGH VALUE/SUSPICIOUS

TRANSACTIONS/TERRORISM FINANCE Ongoing monitoring is an essential element of effective KYC procedure. Bank can effectively control and reduce its risk only if it has an understanding of the normal and reasonable activity of the customer so that it has the means of identifying transactions that fall outside the regular Pattern of activity. 6. MONITORING OF CASH TRANSACTION: The cash transactions will be monitored in the following manner: a. The issuance of travelers cheques, demand drafts, mail transfers, and telegraphic transfer for Rs.50000/- and above will be permitted only by debit to customers accounts or against cheques and not against cash. Further, the applicants (whether customers or not) for the above transactions for amount exceeding Rs.

53

50000/-will be required to mention permanent (income tax) account number on applications. b. The transactions involving cash withdrawals and/ or cash deposits for Rs.10 laces and above in deposit, cash credit or overdraft accounts will be monitored closely by the braches and record of details of such transactions will be kept in Separate register.

Customer Identification Procedure

Features to be verified and documents that may be obtained from customers Features Documents I. Accounts of individuals-Legal name and any other name used -Correct permanent address i. Passport ii. PAN/GIR number or Form 60 or 61(wherever applicable) iii. Voters Identity Card iv. Driving License v. Identity card (subject to the banks satisfaction) vi. Letter from recognized public authority or public servant verifying. The identity and residence of the customer to the satisfaction of bank A. Telephone bill B. Bank account statement C. Letter from any recognized public authority D. Electricity bill E. Ration card F. Letter of employer (subject to satisfaction of the bank any one document which provides customer information to the satisfaction of the bank will suffice) II. Accounts of Partnership Firms Legal name, Address, Name of all partners and their addresses, Telephone numbers of the firm and partners, Registration certificate, if required, Certificate copy of Partnership Deed or Partnership Letter (Ca-1(iii)).

54

CONCLUSION: Know Your Customer (KYC) is a set of guidelines aimed at preventing banks and other service companies from being used intentionally or unintentionally by criminal elements for committing financial frauds, transferring or deposits of funds derived from criminal activity or for financing terrorism.KYC norms are a very important part for any banking companies, financial institutions and

intermediaries. ING VYASYA GROUP strictly follows the KYC guidelines for account opening, or any kind of investment to prevent frauds and cheating by their customers.ING use best of their efforts for the present money laundering.

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REVIEW OF LITERATURE:
Review of literature means the researcher presenting the view of all the previous studies, articles published, book published, etc. The researcher would classify this section into purpose, methodology and conclusion. 4.1 PURPOSE: The core purpose for the study is to understand the basic concepts of insurance sector and the perception and investment pattern of respondents. Their perception towards ING and its performance in the market. This project is done to know consumers preference and needs and try to bring about the product which may give satisfaction to the consumers. It is done to know the overall merit and demerit of the product and to give suggestions to improve the product. Following are the purpose to do a project in insurance sector: To identify various investment alternatives in insurance sector. To compare the strength & weakness of different investment opportunity To understand investors Preference in investment alternatives. What characteristics of the investment product had influenced investors to make the investment in particular investment? 4.2 METHODOLOGY: Methodology includes the various methods of data collection and interpretation which are as follows: Data Sources In this research the researcher have two kinds of data sources given below: 1) Primary Data: Questionnaire and Interview 2) Secondary Data: Web pages, Company Journals & Brochure Data Collection Instruments: The instruments used for data collection is a Questionnaire which is been filled by me through communication and interactive session with the customers during my project period. Each questionnaire represents essence information about a 56

customer. So, a combination of Interview and Questionnaire as a data collection is employed. Non Probability Sampling: Non Probability sampling is that sampling procedure which does not afford any basis for estimating the probability that each item in the population has of being included in the sample. It is also known as deliberate sampling, purposive sampling and judgment sampling.

57

RESEARCH METHODOLOGY: 5.1 STATEMENT OF THE PROBLEM: This survey is conducted because company wants to analyze the data obtained through personal meetings and questionnaire for the benefit of customers. This project is done to know consumers preference & needs and try to bring about the product which may give satisfaction to the consumers. It is done to know the overall merit and demerit of the product and to give suggestions to improve the product.

5.2 OBJECTIVE OF THE STUDY: The objective of the study is to identify various investment alternatives in insurance sector and compare the strength & weakness of different investment opportunity. To understand investors Preference in investment alternatives as what characteristics of the investment product had influenced investors to make the investment in particular investment and at last to present a comparative analysis of various products available at ING for the purpose of investment.

5.3 TYPES OF RESEARCH:

Primary Research Data: Primary data may be described as those data that have been observed and recorded by the researcher for the first time for their knowledge.

Secondary Research Data: Secondary data are statistics not gathered for immediate study at hand what for some other purposes.

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5.4 SAMPLING TECHNIQUE: Non Probability sampling is that sampling procedure which does not afford any basis for estimating the probability that each item in the population has of being included in the sample. For this study convenience sampling method was adopted.

5.5 SAMPLE SIZE: The sample size of the respondent consists of people with every field and in different age group with different level of income and education background. Sample Size: 100

5.6 INSTRUMENTATION TECHNIQUES: The instrument used for data collection is an interview schedule which was filled by the researcher through communication and interactive session with the customers during the project period. Each questionnaire solicits information about a customer.

5.7 ACTUAL COLLECTION OF DATA: 1) Primary Data: Questionnaire and Interview 2) Secondary Data: Web pages, Company Journals & Brochures

5.8 OTHER SOFTWARE & TOOLS USED FOR DATA ANALYSIS: Tools used for analysis are as follows: Tables Charts Bar diagrams

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5.9 CHAPTER SCHEME: 1.1 Executive Summary: It explains the various aspects related to the project report. It summarizes the industry snapshot, industry analysis competitors assessment, and objectives of the study, research methodology, and expected contribution from the study, limitation, and conclusion.

1.2 Introduction: This section deals with the various aspects related to the industry and Background the Study, statement of the Problem, need and Importance of the Study and objectives of the Research.

1.3 Company Profile: This section explains the various aspects related to the company and its objectives, vision and mission, company hierarchy and product portfolio of company.

1.4 Review of Literature: The literature consists of the concepts and terms used as a background for the purpose of preparing the project report i.e. concepts of investment, concepts of insurance, Types of insurance

1.5 Research Methodology: This chapter explains the various tools & techniques used by the researcher which are as follows: Type of research, sampling techniques,sample size, instrumentation techniques, actual collection of data, other software used for data Analysis.

1.6 Data analysis and interpretation: Data analysis and interpretation has been done with the help of various tables 60

with relevant statistics and questions were analyzed with the help of bar graphs and pie charts.

1.7Summary of findings: This chapter is an abstract of the findings based on the analysis of the data & feedback collected from the respondents during the project period. It also consists of the SWOT analysis of the concerned firm.

1.8 Suggestions and Recommendations: This chapter deals with the suggestions and recommendations proposed by the researcher to improve the products and enhance the level of customer satisfaction.

1.9 Conclusion: The chapter conclusion deals with the basic knowledge which the researcher has gained about the ING Vysya group, their marketing strategies and their expertise in the insurance sector

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DATA ANALYSIS & INTERPRETATION: The analysis of INGs products consists of two types which are as follows: 1. Comparative analysis of various products of ING with products of different private insurance companies. 2. Responses through questionnaire filled during the time of project in ING. Comparative analysis of various products of ING with other Companies: ING has various insurance investment plans in their portfolio but for the purpose of analysis researcher has selected only three plans of ING which consists of Whole life plan, Pension plan and Unit Link Insurance Plan. The comparison is based on the basis of benefits and risk associated with the particular product of different insurance companies. The comparative analysis of product is as follows: Comparative Analysis of various products of ING:
A) ING New Fulfilling Life: The New Fulfilling Life of ING Vysya Life Insurance plan

is a double benefit plan. It provides periodic cash return during the policy and maturity or death benefit after the policy. It assures full security of the family of the insured person even after the death of the insured. It gives the family regular cash returns during the life time The features of New Fulfilling Life of ING Vysya Life Insurance plan are: The minimum entry age for this policy is 14 years. The maximum entry age for this policy is 54 years. The maximum maturity age for this policy is fixed at 85 years. The premium payment terms can be chosen from 16, 20 and 24 years. The premium payment options are annual, half yearly, quarterly or monthly. The minimum premium payment amount for annual option is Rs 8,000. The minimum premium payment amount for half yearly option is Rs 4,000. The minimum premium payment amount for quarterly option is Rs 2,000. The minimum premium payment amount for monthly option is Rs 750.

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The special feature of this plan is that it gives 100% of the sum assured as money back over the payment term. The key benefits of New Fulfilling Life of ING Vysya Life Insurance plan are: This policy has regular cash back benefit, it also gives flexible premium payment benefit, and it also has guaranteed maturity benefit. Other benefits: Survival benefits: A certain percent of money is paid back on survival every quarter of the premium paying term. The money can be reinvested elsewhere or used to meet large expenses during ones life time. Maturity benefit: On survival to maturity i.e. after attaining 85 year of age investor will receive100% of the sum assured plus bonus. Death benefits: Investor pay premium for a limited period of their choice while they get risk coverage up to the age of 85 years. In the event of unfortunate death their family would receive 100% of the sum assured over and above the survival benefits they would have receive till then plus bonus. Risk a. The benefits under this plan will not be payable if death of life assured occurs due to suicide within one year from the date of commencement of risk own within one year from the date of reinstatement of a lapsed polices. b. If investor is unable to pay their premium for some reason, then after 30 days of due date the policy will lapse. B) ING Market Shield: ING Market Shield not only provides life cover but also balances risk and reward in a transparent manner and provides investors an opportunity to enjoy growth while retaining protection. It is a Unit linked life insurance plan which ensures that investors never miss an opportunity to maximize their gains and at the same time limits their losses. Eligibility Criteria Age at Entry Min 8 years - Max 55 years Age at Maturity Min 23 years - Max 70 years Policy Term 15 to 20 years 63

Premium Paying Term Limited Pay (5, 10 years) or Regular Pay (equal to Policy Term) Premium Payment Modes Annual Minimum Premium for Limited Pay (5 years) the minimum yearly premium is` 48,000 For Limited Pay (10 years) or Regular Pay: ` 36,000 Maximum Premium No Limit Top-up Premium Minimum of ` 5,000, Maximum of ` 800,000 Basic Sum assured 10 to 20 times the Annual Premium Additional Sum Assured Fixed at 1.25 times of the Top-up premium paid (if any Benefits: 1. Optimizing upside potential due to Equity Participation This plan provides investors with the growth potential that comes from investing in shares that comprise Nifty 50 (NSE CNX S&P Nifty Index). ING Life on every day basis will monitor the equity market development and increase allocation to the equity market (up to a maximum of 60%) when times are good and will reduce (up to 0%) allocation to equities when markets are volatile. This active daily asset allocation ensures that investors gains are maximized and at the same time protecting such gains from eroding. 2. Anytime guarantee - Protection that is available to investors at all times and not just at maturity Not only will this plan invest in equity and bring them gains from the markets, it will also ensure that gains that are made are locked in with a minimum 80% assurance. Every time the NAV of the Guaranteed NAV Fund hits a new high, 80% of that NAV per unit is guaranteed (referred as Guaranteed NAV or G-NAV). From there on, irrespective of the volatility in the market they are assured of the G-NAV per unit at all times and not just at maturity. ING will reset this G-NAV on a daily basis and once the G-NAV is set it can go up and never go down. The below graph explains that in a rising market when the Daily NAV is higher the customer gets the maturity benefits at the Daily NAV. For example, if the Daily NAV on maturity is at 38 and the G-NAV is 30.4, investors are still assured of receiving the maturity benefits at the Daily NAV of 64

38. ING manages the Guaranteed NAV fund through a dynamic asset allocation process which ensures that guarantee is available to them at all times and all benefits paid to them are at higher of the prevailing NAV (referred to as Daily NAV) or the last Guaranteed NAV.

Comparative analysis of Reliances products: a. Reliance Market Return Plan: Investors always aspire for the best in life. And company helps them to achieve just that. With Reliance Market Return plan they can have the twin advantage of insurance protection as well as reaping the benefits of investment growth. It is a flexible plan which works all through their life and meets the changing requirements like additional protection, liquidity through cash, option to invest in different asset class, steady golden years and many more. Key Features Reliance Market Return Plan: Twin benefit of market linked return and insurance protection A Unit Linked Plan, different form traditional Life Insurance products, with maximum maturity age of 80 years Option to create customers own portfolio depending on their risk appetite Choose from 4 different investment funds Flexibility to switch between funds Option to pay regular as well as single premium & Top-ups Option to package with Accidental riders Flexibility to increase the Sum Assured Liquidity through partial withdrawals Benefits: Life Cover Benefit: Customer can choose the basic Sum Assured within the minimum and maximum levels mentioned below Minimum Sum Assured: 65

 Regular Premium: Annualized Premium for 5 years or for half the Policy term Single Premium: 125% of the single premium Maximum Sum Assured: No Limit (Rs 500,000 for age up to 12 years) In case of unfortunate loss of life, the beneficiary will get sum Assured or Unit Account Value whichever is higher. Maturity Benefit: On survival, at maturity the value of investors Unit Accoun t will be paid out.

Risk: Reliance Life Insurance will not be liable to pay any Accidental Death Benefit Claim or Total and Permanent Disablement Claim which results directly or indirectly from certain events. Comparative analysis of HDFCs products: a. HDFC- Unit Linked Wealth Maximiser: Unit linked Wealth Maximiser is a single premium unit linked plan. The plan offers an investment and protection benefit. This plan helps investors to meet their family needs in the future. It also offers Loyalty Units which increases their fund value yearly. Eligibility Age at Entry: Minimum 18 years Maximum 65 years Minimum 18 years Maximum 55 years Minimum Premium Payment: Rs1, 00,000/Term Limit: Is calculated 99 years less the entry age. Benefits 1. It invests in market funds and which provides a long term growth and is a flexible to suit their needs. 2. Loyalty Units- An investor gets additional units every policy year end by 0.10% as long as the policy is still active.

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3. There are choices of 5 unit linked funds. Managers Fund, Mid-Cap Fund, Large-Cap Fund, Bond Opportunities Fund and Money Plus Fund. 4. This plan has a cover till the age of 99 years. 5. There is a onetime premium payment when investors start the policy. b. HDFC Unit Linked Pension Maximizer II: During the post retirement days investors can earn a lot. It should be in the mind of every working individual that spending is something that takes place throughout ones life but earning is only when one has the age and strength to do so. Hence while earning and spending one should also know to save for the future after retirement when earning stops and spending continues. The best investment that one could ever think of is the unit linked pension maximiser II plan. This plan offers the investors a chance to maximize their investment returns and gives an addition of 10% of the initial premium at the time of death or vesting. The regular features of this plan include: A. A minimum term value of 10 years and a maximum of 40 years are allowed to the policy holder. One can choose ones own retirement date with this plan. There is a wide range of choice of funds approximately seven choices to choose from. B. The premium investment in a single payment initially is fifty thousand or more. Eligibility age is 18 years for this plan and the maturity age is 65. On retirement the minimum age is 50 and maximum 75 years. Benefits: a. The benefits of the pension maximiser plan are unique b. It is the best plan to choose to have a peaceful post retirement income even after retirement. c. At the end of the policy one can receive not only the value of the matured funds but also bumper additions that can be used as pension income as long as investors live. d. Bumper additions for policies whose term are equal or greater than 15 years will be paid on vesting or at the time of death. according to the government regulations 67 These additions will be given

e. One can avail 1/3 of the total benefit at vesting as a tax free lump sum and get the rest converted to annuity either with HDFC or any insurance company of ones choice. f. One can change the choice of investment funds by switching and moving the accumulated funds from one plan to the other anytime. g. One should be wise in making plans for the future. There should be no delay in selecting the perfect golden years of retirement now while the going is good. Earn and save today and enjoy tomorrow.

Comparative analysis of LICs products: A. Market Plus 1: is a unit linked pension scheme (ULIP). Policy holder can choose the plan with or without risk cover. This investment plan is divided in four types of investment Funds namely Bond, Secured, Balanced and Growth Fund. Market plus 1 is primarily a Pension policy and the plan has many attractive features and options that make it an ideal Retirement solution for investors future. Eligibility Conditions and Restrictions: For Basic Plan without Life Cover (Investment plan) a) Minimum Sum Assured: Nil b) Maximum Sum Assured: Nil c) Minimum Premium: Rs.5, 000 p.a. for Regular premium, thereafter in multiples of Rs. 1,000 Rs. 1,000 p.m. for monthly (ECS), increasing thereafter in multiples of Rs. 250. d) Maximum Premium: No Limit. e) Minimum Entry Age: 18 years last birthday. f) Maximum Entry Age: 74 years nearest birthday. g) Minimum Deferment Team: 5 years. Features: 1. Option to pay one time premium 68

2. Critical illness benefit minimum Rs 50,000 and the maximum Rs 10 lakh 3. Accident benefits from Rs 25,000 up to a maximum of Rs 50 lakh. 4. Switch from one type of fund to another up to four times a year. 5. Premium top up. 6. Policy can be taken with or without risk cover. 7. Net Asset Value (NAV) declared on a daily basis. Benefits: A) - On Vesting: On vesting of the policy, the Fund Value will be utilized to provide a pension based on the then prevailing Annuity rates. An option to commute up to one third of the payable benefit in a lump sum is available. B) On Death: In event of the unfortunate death of the policy holder the Fund Value along with the Riders, if any, will be payable in a lump sum or as a pension. B. LICs Pension Plus: is a unit linked deferred pension plan, which provides investors a minimum guarantee on the gross premiums paid. The plan is without any life cover. They have a choice of investing their premiums in one of the two types of investment funds available. Premiums paid after deduction of allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV). 1. Payment of Premiums: Investors may pay premiums regularly at yearly, halfyearly or quarterly or monthly (through ECS mode only) intervals over the term

of the policy. Alternatively, a Single premium can be paid. A grace period of 30 days will be allowed for payment of yearly or half-yearly or quarterly premiums and 15 days for monthly (through ECS) premiums. 2. Eligibility Conditions and Other Restrictions: a) Minimum Entry Age - 18 years (last birthday) b) Maximum Entry Age - 75 years (nearest birthday) c) Minimum Vesting Age - 40 years (completed) d) Maximum Vesting Age - 85 years (nearest birthday) 69

e) Minimum Deferment Term - 10 years f) Sum Assured - NIL g) Minimum Premium Regular premium (other than monthly (ECS) mode): Rs. [15,000] p.a. Regular premium (for monthly (ECS) mode): Rs. [1,500] p.m. Single premium: Rs. [30,000] h) Maximum Premium Regular premium: Rs. [1, 00,000] p.a. Single premium: No Limit Annualized Premiums shall be payable in multiple of Rs. 1,000 for other than ECS monthly. For monthly (ECS), the premium shall be in multiples of Rs. 250/-.

3. Other Features: i) Guaranteed Maturity Proceeds: If all due premiums are paid till maturity, a guaranteed interest shall accrue on the gross premium, including Top-up premiums if any, at the end of each financial year. The guaranteed interest rate shall be 50 basis points above the average of the reverse repo rate prevailing as on the last working day of June, September, December and March of the preceding year. However, the guaranteed interest rate shall be subject to a maximum of 6% and a minimum of 3%. This guaranteed interest rate is not applicable to a discontinued policy. The minimum guaranteed rate of 4.5% p.a. is applicable to all premiums received up to 31st March, 2011, including any Top-up premiums paid. ii) Guarantee of interest rate on Discontinued Policy Fund: A guaranteed minimum interest rate of 3.5% p.a. shall be credited to the Discontinued Policy Fund constituted by the fund value of all discontinued policies. iii) Top-up (Additional Premium): Investors can pay additional premium in multiples of Rs.1, 000 without any limit at anytime during the term of policy. Topup shall not be allowed during the last 5 years of the contract. In case of yearly,

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half-yearly, quarterly or monthly (ECS) mode of premium payment such Top-up can be paid only if all premiums have been paid under the policy. iv)Switching: Investor can switch between the two fund types during the policy term subject to switching charges, if any. v) Partial Withdrawal: No partial withdrawal of units will be allowed under this plan. vi) Revival: If due premium is not paid within the days of grace, a notice shall be sent to them within a period of fifteen days from the date of expiry of grace period to exercise the option for revival within a period of thirty days of receipt of such notice. If they exercise the option to revive the policy, then the arrears of premium without interest shall be required to be paid. 4. Risk: Risks borne by the Policyholder: LICs Pension Plus is a Unit Linked Life Insurance product which is different from the traditional insurance products and is subject to the risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Comparative analysis of ICICIs products: a. ICICI Pru Lifetime Pension Maxima is a regular premium, unit-linked pension plan which offers investors the flexibility to invest in unit-linked funds that generate potentially better returns over long term. This pension planning product also offers investors a unique strategy that allows them to protect gains made through their funds invested in the equity markets from any future equity market volatility.

Features: Min Premium Rs.10, 000 p.a. for yearly mode Rs.15, 000 p.a. for half yearly & monthly mode 71

Min / Max Age at Entry 18 / 70 years Min / Max Policy Term 10 / 60 years, allowed only in multiple of 5 years Min / Max Sum Assured 0 / As per the Sustainability Matrix Max Cover Ceasing Age 80 years Modes of Premium Payment Yearly / half yearly / Monthly Benefits: Trigger Portfolio Strategy: A unique portfolio strategy to protect gains made in equity markets from any future equity market volatility while maintaining a predefined asset allocation Additional allocation of units: More than 100% allocation to funds on premium payment from the sixth policy year onwards of this unit-linked pension plan. Five pension planning options: Flexibility to choose a pension plan as per investors needs Tax benefits: Avail tax benefits on premiums paid and receive tax free commutation up to one-third of the accumulated value on vesting (retirement) date, as per the prevailing Income Tax laws Comparative analysis of Bajaj Allianzs products: a. Wealth Insurance Plan: Bajaj Allianz Wealth Insurance Plan is a hassle-free way of investing their money and at the same time taking care of their insurance needs. The plan gives them the benefits of paying a single premium, so they don't have to worry about due dates, repetitive paperwork and renewals or constantly make phone calls to financial advisor. Apart from this, the high allocation offered by the plan allows them to meet their financial goals. Key Highlights Wealth Insurance Plan offers the following key benefits:Loyalty addition up to 7% of single premium at the end of the fifth year. 72

Option to receive the maturity benefits as settlement option. Maximum flexibility to pay unlimited top-up premium and make partial withdrawals. Option to decrease the sum assured. Systematic switching option to manage investments better. Optional additional rider benefits to enhance protection. The allocation rate is 98% for Single premium and Top up Premium. If policy has not been terminated at the end of the 5th policy year the company will allocate loyalty addition at the then prevailing unit price of an amount equivalent to 3.00% for Single Premium of Rs. 50000 to 99999, 5.00% for single premium of Rs. 100,000 to 249,999 and 7.00% for single premium of Rs. 250,000 and above. No loyalty addition is payable on any top-up premium paid. b. Pension Guarantee Plan: Pension Guarantee Plan ensures regular Income after Retirement. for life. With Bajaj Allianz Pension Guarantee Plan, investor can ensure a regular income after retirement. The plan offers them a range of immediate annuities to choose from. All they have to do is pay a lump sum amount to Bajaj Allianz Life Insurance Company, and the annuity payments will start after expiry of monthly/quarterly/half-yearly/yearly interval corresponding to the payment mode selected by them. Under all options, annuity is payable for life, so you don't have to worry about your income stopping at any age. Features: Minimum Age at Entry 40 Maximum Age at Entry 80 Minimum Purchase Price Rs.25, 000

Minimum Annuity Installment Rs.1, 000 The Pension Guarantee plan offers a 15 day free look period and tax benefits under section 80C. Comparative analysis of MAX New York Life Insurances products:

1. Fortune Builder 73

Max New York Life Fortune Builder is a unit linked endowment plan that provides a unique combination of protection with potentially higher returns to fulfill goals. Features: Guaranteed Loyalty Bonus which can be as high as 290% of ATP Comprehensive protection through high sum assured multiples and inbuilt Family Income Benefits: Increasing premium option to counter inflation along with increasing sum assured benefit Choice of Seven funds for investors of different risk profiles Life Stage based Asset Allocation Dynamic Fund Allocation Flexibility to make partial withdrawals to meet unplanned expenses Flexibility to opt for Personal Accidental Benefit and Dread Disease riders

2. Unit Builder Plus Max New York Life Unit Builder Plus, is a limited pay ULIP, which is designed to not only give investors guaranteed returns but, also has an annual income plan for that little extra income to enjoy life to the fullest. Features Guaranteed Loyalty Additions which injects 100% of Annual Target Premium to the Fund Value on the 10th Policy Anniversary, and Annual Income through which 25% of the Annual Target Premium returned back to them from 11th Policy Anniversary till the Maturity Date in form of addition to the fund value. Added Protection and inflation cover with increasing Sum Assured @ 5% with Increasing Premium Payment Option and in case of Level Premium Payment Option with Progressive Auto Cover Enhancement (PACE) Limited premium payment option for only 10 years to get covered for 20 years Life Stage based Asset Allocation Dynamic Fund Allocation.

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Analysis and Interpretation

Table 1: Showing Age Group among respondents:

AGE RANGE

NO. RESPONDENTS

OF

< 25 25 30 31 40 >50

24 22 38 16

Graph 1: Showing Age Group among respondents:

NO. OF RESPONDENTS

16 24 <25 25-30 31-40 >50 38 22

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INFERENCE: The graph shows the different age distribution of respondents. In this graph the majority of the investors belonged to the group 31to 40 years. This group is most likely to think of investment, especially from a perspective of savings for the future, including education of children, self sustenance after retirement etc.

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Table 2: Showing income level distribution of respondents:

INCOME RANGE

NO. RESPONDENTS

OF

OF

RESPONDENTS 8% 12% 40% 40%

< 1 LAKH 1 LAKH-2.5 LAKH 2.5 LAKH-5 LAKH >5 LAKHS

8 12 40 40

Graph 2: Showing income level of distribution of respondents:

60 40 50

40 40 30

20 12 10 8

0 <1 LAKH 1-2.5 LAKH 2.5-5 LAKH >5 LAKHS

INFERENCE: The graph shows the various income levels of respondents. In this graph the majority of the respondents were in income bracket of Rs.2 lakh-2.5 lakh per annum. 77

Table 3: Showing marital status of respondents:

MARITAL STATUS NO.OF RESPONDENTS

MARRIED 58

SINGLE 42

Graph 3: Showing marital status of respondents:

MARITAL STATUS OF INVESTOR

42

58

MARRIED SINGLE

INFERENCE: As according to the graph the number of married persons is more than single this group is most likely to think of investment especially from a perspective of saving and retirement plans.

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Table 4: Showing educational background of respondents:

EDUCATION

NO. RESPONDENTS

OF

HIGH SECONDARY [10+2] GRADUATE POST GRADUATE

69 25

Graph 4: Showing educational background of respondents:

Educational Background of respondents

6 25

HIGH SECONDRY[10+2] GRADUATE POST GRADUATE 69

INFERENCE: As according to the graph the number of graduates are more amongst all respondents.

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Table 5: Showing employment status of the respondents:

OCCUPTION

NO.OF RESPONDENTS

SELF EMPLOYED PROFESSIONAL SALARIED

29 25 46

Graph 5: Showing employment status of the respondents:

50 45 40 35 30 25 20 15 10 5 0 SELF EMPLOYED PROFESSIONAL 29 25

46

SALARIED

INFERENCE: As shown in the table there is more salaried persons than self employed and professional.

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Table 6: Showing no. of respondents having life insurance policy: HAVING A LIFE POLICY 57 NOT HAVING 43

Graph 6: Showing percentage of respondents having a life insurance policy:

60 57

50 43 40

30

20

10

0 HAVING A LIFE POLICY NOT HAVING

INFERENCE: As according to the graph there are 57% people having life insurance policy of different companies and 43% are not having.

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Table 7:

Showing percentage of respondents currently having life plans of different insurance companies:

INSURANCE COMPANIES LIC ING life Max New York life Others

OF

PREFERENCE

OF

INVESTORS 61% 21% 8% 10%

Graph 7: Showing percentage of respondents currently having life plans of different insurance companies:

PERCENTAGE OF INVESTOR PREFERANCE FOR DIFFERENT CO. LIFE PLAN

8% 10% LIC ING life 21% 61% Max New York Life insurance Others

INFERENCE: As according to the graph most of the investors prefer LIC life plans followed by other companies so LIC is still the leader in Indian insurance sector and amongst the private companies ING is one of the leading company with 21% of respondents having its life plan. 82

Table 8: Showing percentage of preference of respondents having different kinds of life plan. LIFE PLANS INVESTORS PREFERENCE TERM PLAN ENDOWMENT PLAN UNIT PLAN RETIREMENT PLAN CHILDREN PLAN 14% 26% LINK INSURACE 10% 21% 29%

Graph 8: Showing percentage of preference of respondents having different kinds of life plan:
35% 30% 25% 21% 20% 15% 10% 10% 5% 0% TERM PLAN ENDOWMENT PLAN ULIP RETIREMENT PLAN CHILDREN PLAN 14% 29% 26%

INFERENCE: As according to the responses most investors preferred ULIP for investment purpose because of high return and less premium paying term instead of that most investor preferred plan which gave them guaranteed return with safety. 83

Table 9: Showing percentage of investors preference for children plan for investment: CUSTOMER CHILDREN PLAN 41% PREFERRED CUSTOMER WHO DONT

PREFERRED CHILDREN PLAN 59%

Graph 9: Showing percentage of investors preference for children plan for investment:
59% 60% 50% 41% 40% 30% 20% 10% 0% CUSTOMERS PREFERRED CHILDREN PLAN CUSTOMERS WHO DON'T PREFERRED CHILDREN PLAN

INFERENCE: As according to the responses, customers mostly dont prefer the children plans because they are already having it or they are in different age group.

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Table 10: Showing percentage of time preference of respondents while selecting an investment: TIME SCALE INVESTORS PREFERENCE SHORT TERM Graph 10: Showing MEDIUM TERM LONG TERM 15% 41% 44%

percentage of time preference of respondents while selecting an investment:

TIME PREFERENCE OF INVESTOR FOR INVESTMENT

15% 44% SHORT TERM MEDIUM TERM 41% LONG TERM

INFERENCE: As according to the feedback of respondents it is clear that most people are interested in short term and medium term plans with good returns while those who want secured returns can wait for long period of time.

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Table 11: Showing factors preferred first by respondents while selecting an investment plan: FACTORS RESPONDENTS PREFERENCE RETURN RISK Graph Showing TIME PERIOD 49% 37% 14% 11: factors

preferred first by respondents while selecting an investment plan:

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% RETURN RISK TIME PERIOD 14% FACTORS PREFERRED WHILE SELECTING AN INVESTMENT PLAN 37% 49%

INFERENCE: As from the feedback, it is clear that most people prefer return while going for an investment followed by risk and time preference.

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Table 12: Showing the percentage of respondents aware about the available insurance products in the market: PERCENTAGE OF PERCENTAGE RESPONDENTS NOT OF AWARE

RESPONDENTS AWARE ABOUT THE OTHER PRODUCT 38%

ABOUT THE PRODUCT 62%

Graph 12: Showing the percentage of respondents aware about the available insurance products in the market:

PERCENTAGE OF RESPONDENTS AWARE ABOUT VARIOUS INSURANCE PRODUCT AVILALABLE IN THE MARKET

38% RESPONDENTS AWARE ABOUT THE PRODUCT RESPONDENTS NOT AWARE ABOUT THE PRODUCT

62%

INFERENCE: The table of response shows that most people are not aware about the plans currently available in the market (this section consists of the various people of young age and self employed people).

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Table 13: Showing Percentage of respondents rating their current insurance plan on the basis of risk, return and time duration:

LEVEL OF RISK LOW MODERATE HIGH

LEVEL OF RETURN LOW MODERATE HIGH

T 41% 15% 44% 14% 32% 54%

Graph 13: Percentage of respondents rating their current insurance plan on the basis of risk, return and time duration:
70% 60% 50% 41% 40% 30% 20% 10% 0% LOW MODRATE HIGH SHORT TERM LONG TERM 14% 15% 32% 59% 54% 44% 41% RISK RETURN TIME DURATION

INFERENCE:As the total number of respondents having a life policy is 57 so out of that the different ratings given by them are shown above which shows that on the basis of risk most people think that their current plan is more risky as they have invested in ULIP and other market related plans. On the basis of return most respondents feels that their product is of high return opportunity and at last on the basis of time duration most respondents are having short term high risk and high return based insurance plan.

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Table 14: Percentage of respondents visited to the company to know about the performance of their products: FREQUENCY OF VISIT RESPONDENTS RESPONSE ONCE IN A YEAR ONCE IN A QUARTER NEVER Graph 14: Percentage of respondents visited to the company to know about the performance of their products: 29% 24% 47%

FREQUENCY OF CUSTOMER'S VISIT TO COMPANY TO KNOW THE PERFORMANCE

47% 29% ONCE IN A YEAR ONCE IN A QUARTER 24% NEVER

INFERENCE: As the feedback received from respondents, it can be said that most of them never visit to know the performance of their product because in ULIP products they can get information through websites and internet and other customers visit to the branches on a periodical basis.

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Table 15: Showing the level of satisfaction of current customers of ING as ranking given by them: LEVEL SATISFACTION EXCELLENT GOOD AVERAGE POOR OF RANKING CUSTOMERS 35 40 20 5 GIVEN BY

Graph 15: Showing the level of satisfaction of current customers of ING as ranking given by them:

Level of satisfaction amongst the customers of ING

5 20 35 Excellent Good Average 40 Poor

INFERENCE: As according to the graph it is clear that most of the customers of ING are satisfied with the services provided by the company both in Insurance as well as banking sector.

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FINDINGS:
7.1 BASED ON ANALYSIS: The summary of survey conducted in ING Life insurance, can be listed down in conjunction with the data analysis presented. The functioning and responses from the respondents were authentic leading to a better view of the market scenario. The findings are listed below: o The contribution of insurance industry to the GDP of nation is 4.7% o ING is the worlds largest financial services company. o Ranked 17th in Fortune Global 500. o With 150+ years of financial expertise and 8.5 crore customers in 40+ countries. o Core services: banking, investments, life insurance & retirement services. o Revenue amount to 226,577.00 Million USD. o In India, ING has a experience of over 11 years. o The company is targeting on emerging financial market in India with great potential. o 46% of the respondents are from salaried class. o Literacy level of the respondents is high, 69% of them are educated. o o 58% respondents are married. o 57% respondents are having a life insurance. Average annual income of respondents is between 2.5-5 laces as 50% are under this category. o 44% of respondents prefer short term and 41% prefers medium term time scale for investment. o 54%s of the respondents prefer short term high return Unit link insurance plan for investment. o ING three products: ING Market Shield, ING Ace Pension Plan and ING Fulfilling Life are the top 3 rated products in the first quarter of the current financial year and ranked A+ by various business magazines. o 87% of the customer is highly satisfied with the services provided by ING. o 62% of the respondents are not aware about the available insurance products in the market. 91

7.2 SWOT ANALYSIS:

STRENGTH: 1) A strong brand name with a high degree of financial support which is the back bone of the company. 2) Brand leaders in bringing latest financial services for the common man. 3) An innovator, pre problem seeker and risk taking capabilities. 4) Systematic, planned and quick actions taken up lead to quick reactions by the company ultimately providing a competitive edge to ING. 5) ING is the worlds largest financial services company. 6) Ranked 17th in Fortune Global 500. 7) With 150+ years of financial expertise and 8.5 crore customers in 40+ countries.

WEAKNESS: 1) The plans of company are beneficial but the premium rates are very high.

OPPORTUNITIES: 1) A huge untapped market. 2) Emerging middle class, a good potential market. 3) Increasing employment rate and income. 4) Increasing financial investments in market.

THREATS: 1) Neck to Neck competition with ICICI and HDFC with respect to services and policies. 2) Threats from growing competitors like Bajaj Allianz and Aviva in Insurance sector. 3) New entrants in the market, Sahara India Life, Om Kotak Mahindra etc. are an area of concern.

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SUGGESTIONS & RECOMMENDATIONS:

Most of the investors are return oriented with a minimum level of risk. Risk is fundamental to the process of investment. Every investor should understand the various pitfalls of investment and while going for an investment in insurance sector they should assess each and every aspect of the plan they are going to purchase. For the convenience of investor analyst measure risk and make plan according to the need of the investor which can combine the risk of loss. The various schemes of insurance discussed earlier are mainly meant to help people at all level of income with different motive of investment and tax benefit for those who are on high tax bracket. The investment in traditional guaranteed return plan are the safest mode of investment while those who wants high return can go for ULIPs and other available products of different companies. Life Insurance is one of the best ways of investment as it fulfills the needs of both return and safety to the customers and ensures security for the future. In present scenario where market is highly sensitive everyone should have insurance plans to secure their future. There are various plans available in the market people can choose plans which best suits their requirements. The researchers opinion is that people with an age of 25 -30 should have a term plan which guarantees benefits on unfortunate events. Newly married couple should have saving plan and children plans for their secured future. The people with an age of more than 40 can invest in retirement plans and ULIP can be affordable by those who can take risk in short term and have a permanent source of income. Company should focus on short term guaranteed benefits plans as a number of people are interested in short term payment and high return products with comparatively moderate premium rates.

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CONCLUSION:
ING is an expert in financial sector having a 150+ years of experience in insurance sector worldwide. In India, currently present in 229 cities across 265 branch offices withover 366 sales teams. ING Life Insurance is a well known brand in India (Bangalore). The company has a keen interest in the development and enhancement of its products in India. The company focuses in providing quality products to all the areas of our country. Company does not prefer marketing strategies and advertisement expenditure at core, it invest the advertisement funds for the benefits of the customer and provides them the highest return possible. Currently INGs three products providing maximum guaranteed bonus rate of 7.5% and are the top rankers among all insurance products available in the market. Company is facing stiff competition in the market with other private companies. In India, It has been completed its 11 successful years of operation which shows its reliability. ING product quality is good but the premium rates they are taking are bit high because they are in establishing phase in India so they are charging more money as their establishment expenses but now ING has completed its 10 years in India and is a well known brand so its future is quite promising. Company is launching new products with very high benefits to the customers. The growing demand in the market for ING Life Insurance products indicates the prospect of new customers for the company. Finally it is concluded that ING Life Insurance has built up a brand name,which needs to be sustained through continuous feedback, improvement and proactive actions. The company has already sensed the market potential and now it should focus on introducing new schemes and product plans to offer the market what they want from ING Life Insurance.

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ANNEXURE
QUESTIONNAIRE Comparative analysis of various products offered by ING life General Information:Name: 1. Age: <25 31-40 25-30 >41

2. Annual Income/Salary: Less than 1 lakhs Between2.5 5 lakhs Between 1 2.5 lakhs More than 5 lakhs

3. Marital Status: Single

Married

4. Educational Background: Graduate

High School

Graduate

Post

5. Employment Category: Self Employed/Professional Salaried

Business

Questions:6. Do you have a Life Insurance? Yes No

7. From which company you have taken a Life Insurance? LIC Max New York Life ING Vysya Others

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8. Which type of Life Insurance you are having? Endowment Plan Child plan ULIP Plan Term Plan Retirement Plan

9. Are you interested in Children Plans for Protection & Saving for your child? Yes No

10. What is your time preference while selecting an investment plan? Short Term Medium Term Long Term

11. Which factors do you prefer most while selecting an Investment Plan? Return Risk Time Period

12. Are you aware about the available Life Insurance Products in the market? Yes No

13. Please rate your current insurance plan on the basis of risk, return and time duration. (Please tick one from each factor) LEVEL OF RISK LEVEL OF RETURN TIME DURATION L O W MOD ERAT E H I G H L O W MOD ERAT E H I G H S H O R T TE R M L O N G T E R M

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14. How often you visit to the company to know about your product & other information? o Once in a year o Once in a quarter o Never

15. Rank the services of ING Vysya Life Insurance? Excellent Average Good Poor

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BIBLIOGRAPHY
BOOKS: Prasanna Chandra, Investment Analysis and Portfolio Management ,TMH-2/e 2005 Dr.H.Sadhak, Life Insurance in India-opportunities, challenges and strategic perspective , Response books publications, New Delhi April 2009 Life Insurance guide for agents, Life Insurance IC 33, Published by-Govt. of India Ben.G.Baldwin, New Life Insurance Investment Advisor, McGraw Hill CompaniesSecond revised edition, July 2001

WEBSITES:
www.inglife.com www.reliancelife.co.in www.hdfcinsurance.com www.iciciprulife.com

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