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SUBMITTED BY:
VARUN ARORA
CERTIFICATE
To the best of my knowledge, this research work is original and no part of this report
has been submitted by the student earlier to any other institution / university.
I, Varun Arora, hereby declare that the project work entitled “A Comparitive study of
ULIP Plan in respect to IDBI Federal Life Insurance Pvt. Ltd.” submitted towards partial
original work and the dissertation has not formed the basis for award of any degree, associate
Initially, let me thank the Almighty God for guiding me all through theproject work.
Thereafter I would like to thank the management of IDBI Federal Life Insurance Ltd. For
I express my deep and sincere gratitude to Branch ManagerMr. Sanjeev Malik (company
guide) of IDBI Federal Life Insurance Limited for giving me an opportunity to do this
project.
Also I express my Thanks to Ms. Bhavna Malik (Faculty guide for) providing the necessary
assistance for the project under her guidance & direction I was able to give shape to my
training.
PREFACE
Insurance plays a very important role in everyone’s life. Insurance not only provides
protection for an individual and industry through risk coverage but also mobilizes funds for
important tool for economic stability and is a key sector in the economy of any country.
This project gives a background of the sector (taking the case study of IDBI Federal Life
Insurance) and proceeds to highlight the shortcomings of the existing setup and players.Also
in this project report I highlighted they key differences between IDBI Federal and those with
ULIP stands for “Unique Linked Insurance plan” It provides for Life Insurance where the
policy value at any time varies according to the value of the underlying assets at the time .
ULIP came into play in 1960 & is popular in many countries in the world. The reason
attributed to the wide spread popularity is because of Transparency & Flexibility which it
offers.
TABLE OF CONTENTS
Chapter1 Introduction
1.1 What is Insurance?
1.4Structure of ULIP
2 Company Overview
2.3ULIP’s of Competitors
2 Suggestions
Chapter 7 Conclusion
1 Conclusion
Chapter 8 Bibliography
CHAPTER 1
INTRODUCTION
WHAT IS INSURANCE ?
Insurance is a form of risk management primarily used to hedge against the risk of a
contingent loss. Insurance is defined as the equitable Transfer of the risk of a potential loss,
from one entity to another, in exchange for a premium. Insurer in economics is the company
that sells the insurance. Insurance rate is a factor used to determine the amount, called the
Life Insurance Companies, which sells life insurance, annuities & pension Products
Non- life or general Insurance Companies, which sells other types of Insurance
Life Insurance or life assurance is a contract between the policy owner and the insurer, where
the insurer agrees to pay a sum of money upon the occurrence of the policy owner’s death. In
return, the policy owner agrees to pay a stipulated amount called a premium at regular
Intervals.
Death
Accidental death
Life based contracts tend to fall into two major categories:
Protection policies – designed to provide a benefit in the event of specified event, typically a
Investment Policies – where the main objective is to facilitate the growth of capital by regular
or single premiums.
With the largest number of Life Insurance policies in force in the world, Insurance happens to
be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually
and presently is of the order of Rs 1560.41 billion (for the financial year 2006 – 2007).
Together with banking services, it adds about 7% to the country’s Gross Domestic Product
(GDP). The gross premium collection is nearly 2% of GDP and funds available with LIC for
Even so nearly 65% of the Indian population is without Life Insurance cover while health
insurance and non-Life Insurance continues to be below international standards. A large part
of ourpopulation is also subject to weak social security and pension systems with hardly any
provides long term funds for infrastructure development and strengthens the risk taking
ability of individuals. It is estimated that over the next ten years India would require
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the
1928: The Indian Insurance Companies Act enacted to enable the government to collect
1938: Earlier legislation consolidated and amended by the Insurance Act with the objective of
1956: 245 Indian and foreign insurers along with provident societies were taken over by the
central government and nationalized. LIC was formed by an Act of Parliament- LIC Act
1956- with a capital contribution of Rs. 5 crore from the Government of India.
Tax.
Insurance provide for the policyholder’s old age after his earning power diminishes.
After all, interest rate may fall and invested holdings may lose value of an insurance
With a view to promote saving and increase awareness regarding insurance, the
government has provided certain benefits through the Income Tax Act for
Taxpayers if they choose to opt for life insurance policies prudent manner, you can
Under section 10(10D), any sum received Under a Life insurance policy is exempted from
taxation but it is wise to remember the pensions received from annuity plans are not
Section 80 CCC provides a deduction of up to Rs. 10,000/- to an individual assessee for any
amount paid or deposited to effect or keeping in force any annuity plan for receiving pension
Unit-linked insurance plans, popularly known as Ulips are life insurance policies which offer
a mix of investment and insurance similar to traditional life insurance policies such as
endowment, money-back and whole-life, but with one major difference. Unlike traditional
policies, in Ulips investment risk lies with the insured (i.e., policy holder) and not with the
insurance company. Put another way, in case of adverse market conditions, you can even lose
The returns in a ULIP depend upon the performance of the fund in the capital market. ULIP
respondents have the option of investing across various schemes, i.e. diversified equity funds,
balanced funds, debt funds etc. It is important to remember that in a ULIP, the investment
In a ULIP, respondents have the choice of investing in a lump sum (single premium) or
Respondents also have the flexibility to alter the premium amounts during the policy's tenure.
For example, if an individual has surplus funds, he can enhance the contribution in ULIP.
Conversely an individual faced with a liquidity crunch has the option of paying a lower
amount (the difference being adjusted in the accumulated value of his ULIP). ULIP
respondents can shift their investments across various plans/asset classes (diversified equity
according to the value of the underlying assets at the time. ULIP is life insurance solution that
provides for the benefits of protection and flexibility in investment. The investment is
denoted as units and is represented by the value that it has attained called as Net Asset Value
(NAV).
FEATURES OF ULIP
ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The
· Life protection
· Flexibility
· Transparency
- Disability
- Critical Illness
- Surgeries
· Liquidity
· Tax planning
Secondly it allows the investor to choose the assets into which he wants his funds
invested.
An investor in a ULIP knows how much he is paying towards mortality, management and
administration charges. He also knows where the insurance company has invested his money.
The investor gets exactly the same returns that the fund earns but he also bears the investment
risk. The transparency makes the product more competitive. So if you are willing to bear the
investment risks in order to generate a higher return on your retirement funds ULIPs are for
you. Traditional ‘with profits’ policies to invest in the market andgenerate the same returns
prevailing in the market. But here the insurance company evens out returns to ensure that
policyholders do not hold money in a bad year. In that sense they are safer. ULIPs also offer
flexibility.
For instance a policyholder can ask the insurance company to liquidate units in his account to
meet to mortality charges if he is unable to pay any premium installment. This eats into
savings but ensures that the policy will continue to cover his life.
ULIP came into play in the 1960s and became very popular in Western Europe and Americas.
The reason that is attributed to the wide spread popularity of ULIP is because of the
transparency and the flexibility which it offers. Unit- linked plans are a contemporary
product: transparent and flexible. Individuals have greater control over their investments. The
popularity of ULIPS stems from the fact that they offer customers “integrated financial
solutions with a transparent charge structure”. In today’s times, ULIP provides solutions for
insurance planning, financial needs, financial planning for children’s future and retirement
planning. Unit-linked insurance plans (ULIPs) have become something of a rage with their
'promise' of market-linked returns combined with the dual benefit of insuring your life from
eventualities
STRUCTURE OF ULIPS
ULIPs offered by different insurers have varying charge structures. However the insurers
have the right to revise or cancel the fees and charges over a period of time
Broadly the different types of fees and charges are given below:
charges from the premium received. The balance known as allocation rate constitutes that
part of premium which is utilized to purchase (investment) units for the policy. The
percentage shall be explicitly stated and could vary by the policy year in which the premium
is paid, the premium size, premium payment frequency and the premium type (regular, single
or top-up premium). This is a charge levied at the time of receipt of premium. This charge
may also include an initial management charge, which is levied on the units created from the
Example: If premium = Rs.1000 & Premium Allocation Charge: 10% of the premium; then
the charge is: Rs.100 and Balance amount of premium is Rs.900 and is utilized to purchase
units.
2. Fund Management Charge (FMC): This charge shall represent the expenses other than
those covered by premium allocation charges and the fund management expenses. This is a
percentage of sum assured. This is a charge levied at the beginning of each policy month
from the policy fund by cancelling units for equivalent amount. This charge could be flat
3. Surrender Charge: This is a charge levied on the unit fund at the time of surrender of the
5. Switching Charge: This a charge levied on switching of money from one fund to another
loadings levied either by cancellation of units or by debiting the premium but not both. This
charge may be levied at the beginning of each policy month from the fund. The method of
computation shall be explicitly specified in the policy document. The mortality charge table
7. Rider premium charge: This is the premium exclusive of expense loadings levied
separately to cover the cost of rider cover levied either by cancellation of units or by debiting
the premium but not both. This charge is levied at the beginning of each policy month from
the fund.
8. Partial withdrawal charge: This is a charge levied on the unit fund at the time of part
9.Miscellaneous charge: This is a charge levied for any alterations within the contract, such
as, increase in sum assured, premium redirection, change in policy term etc. The charge is
expressed as a flat amount levied by cancellation of units. This charge is levied only at the
time of alteration.
Example: Rs.100/- for any alteration such as increase in sum assured, change in premium
mode etc
WHY DO INSURERS PREFER ULIPS?
Insurers love ULIPs for several reasons. Most important of all, insurers can sell these policies
with lesser capital of their own than what would be required if they sold traditional policies.
In traditional ‘with profits’ policies the insurance company bears the investment risk to the
extent of insured amount. In ULIPs the policyholder bears most of the investment risk. Since
ULIPs are designed to mobilize savings, they give insurance companies an opportunity to get
a large chunk of asset management business which has been traditionally dominated by
mutual funds. ULIPs are suitable for individuals who are already adequately insured and are
reasonably well-informed and savvy to take active investment decisions by using the `switch
option' that is provided to a ULIP policyholder. Also policyholders with regular endowment
plans who are not satisfied with the 4-6% returns can consider taking a ULIP with a lower
equity component. It is best if insurance-seekers tread the middle path and choose balanced
plans.They need to avoid taking the aggressive 100% equity ULIP, which could needlessly
9 Greater transparency Here we know were over money Not known where money is to
is invested. be invested.
customer.
ULIPs serve the purpose of providing life insurance combined with savings at market-linked
returns. To that extent, ULIPS can be termed as a two-in-one plan in terms of giving an
ULIPS offer a lot more variety than traditional life insurance plans. So thereare multiple
options at the individual’s disposal. ULIPS generally come inthree broad variants.
Aggressive ULIPS
Balanced ULIPS
Conservative ULIPS
Although this is how the ULIP option are designed, the exact debt/equity allocations may vary
across insurance companies. Individuals can opt for a variant based on their risk profile.
Flexibility
The flexibility with which individuals can switch between the ULIP variants to capitalize on
investment opportunities across the equity and debt markets iswhat distinguishes it from
other instruments. Some insurance companies allow a certain number of ‘free’ switches.
Switching also helps individuals on another front. They can shift from an Aggressive
Rupee cost-averaging is another important benefit associated with ULIPS. With an SIP,
individuals invest their monies regularly over time intervals of a month/quarter and don’t have
There is nil or negligible cost involved. Besides, there is no tax involved. And most of all, it
is hassle free.
A combination of protection and tax advantage, unit – linked policies dominate a huge
chunk of the portfolio of the private insurers. The annual premium contributes over
There is a lot of flexibility in these plans with falling interest rates. So an investor can
adjust his risk profile according to his choice. The risk element is transferred to the
investor and the insurance company enjoys the capital and solvency.
The client is aware of the “no guarantee” so he plans his investment judiciously.
It’s a tax- free, unlike a mutual fund or any other investment, where the gains are
taxed
The client also has an option of restructuring his investment pattern which is a value
Contrary to the traditional policies, the unit linked policies are more transparency
POINTS TO REMEMBER ABOUT ULIP
First-year charges
Usually, a minimum of 15 per cent. However, high premiums attract lower charges and vice
versa. Charges can be as high as 70 per cent if the scheme affords a lot of flexibility.
Subsequent charges: Usually lower than first-year charges. However, some insurers charge
higher fees in the initial years and lower them significantly in the subsequent years.
Administration charges
This ranges between Rs 15 per month to Rs 60 per month and is levied by cancellation of
Risk charges
Fund management charges vary from 0.6 per cent to 0.75 per cent for a money market fund,
and around 1.5 per cent for an equity-oriented scheme. Fund management expenses and the
Some insurers allow four free switches in every year but link it to a minimum amount. Others
allow just one free switch in each year and charge Rs 100 for every subsequent switch. Some
Top-ups
Usually attracts 1 per cent of the top-up amount. Top-up normally goes directly into your
investment account (units) unless you specifically ask for an increase in the risk cover.
Insurers levy certain charges if the policy is surrendered prematurely. This levy varies
between insurers and could be around 75 per cent in the first year, 60 per cent in the second
year, and 40 per cent in the third year and nil after the fourth year.
Fund performance
You could check out the performance of similar schemes (balanced with balanced; equity
with equity) across insurance companies Look at NAV performance over a period of at least
two to three years. This can only give you some indication about the credibility of the fund
Since insurance is a product, which entails a long-term commitment on the part of the insurer,
it is important not to go only by the features or the cost advantages of schemes but by the
initial years' expenses the longer it takes for the policy to outperform its peers with low initial
Retire unhurt
Pension plans are essentially tailored to meet old age financial requirements. But there are
First of all, contribution to pension funds uptoRs 10,000 is eligible for tax deduction under
section 80CCC. In other words, your pension contribution will get deducted from your
taxable income.
So if you are in the top tax bracket, liable to pay to a 30.6 per cent tax, then your tax savings
All life insurance companies offer pension products - both conventional and unit-linked. In
both cases you pay a certain premium amount for a specified length of time.
Usually, the minimum entry age is 18 years and the maximum age is 60 years. You can
choose to pay the premium for five to 30 years. When the policy matures, you receive one-
For the remaining, you can buy annuities either from the existing insurer or any other insurer.
While in a conventional scheme, your money is managed through the insurer's pooled
investment account and you are entitled to bonuses every year, in a ULIP you receive the
scheme with high allocation to equities. Pension policy imposes huge penalties for early
termination.
ULIPs work on the lines of mutual funds. The premium paid by the client (less any charge) is
used to buy units in various funds (aggressive, balanced orconservative) floated by the
insurance companies. Units are bought accordingto the plan chosen by the policyholder. On
every additional premium, moreunits are allotted to his fund. The policyholder can also switch
among thefunds as and when he desires. While some companies allow any number offree
switches to the policyholder, some restrict the number to just three or four. If the number is
Individuals can also make additional investments (besides premium) fromtime to time to
increase the savings component in their plan. This facility istermed "top-up". The money
parked in a ULIP plan is returned either on theinsured's death or in the event of maturity of the
policy. In case of the insuredperson's untimely death, the amount that the beneficiary is paid is
the higher of the sum assured (insurance cover) or the value of the units
(investments)However, some schemes pay the sum assured plus the prevailing value of the
investment
EXAMPLE
Sara is a thirty-year old who wants a product that will give him market-linked returns as well
as a life cover. He wants to invest Rs 50,000 a year for 10 years in an equity-based scheme.
Based on this premium, the sum assured works out to Rs 532,000, the exact amount of
Based on the current NAV of the plan that Sara chooses to invest in, he is allotted units in the
scheme. Then, units equivalent to the charges are deducted from his portfolio.
The charges in the first year include a 14 per cent sales charge, an administration charge (7
per cent for the first Rs 20,000 and 3 per cent for the remaining Rs 30,000) and underwriting
Besides, mortality charges or the charges for the life cover are also deducted. For the
remaining nine years a 3.5 per cent sales charge and an administrative charge charge of 4 per
cent (for the first Rs 20,000 and 2 per cent for the remaining Rs 30,000) are levied in addition
to mortality charges fund management fee of 1.5 per cent (equity) and brokerage are also
charged. This cost is built into the calculation of net asset value.
On maturity - that is, after 10 years - Sara would receive the sum assured of Rs 532,000 or
Assuming the growth rate in the market value of the units to be 6 per cent per annum Sara
would receive Rs 581,500; assuming the growth rate in the market value of the units to be 10
the sum assured of Rs 532,000 or the market value of the units whichever is higher.
Assuming the growth rate in the market value of units is 6 per cent per annum, the value of
However, his family will get Rs 532,000 as it is the sum assuming. Assuming a growth rate
of 10 per cent per annum, the value of units at the end of the ninth year would be Rs 621,900.
IDBI Federal Life Insurance Co. Ltd.,(formerly IDBI Fortis Life Insurance) is a joint
venture between three financial companies – development and commercial bank, IDBI Bank,
India’s private sector bank, Federal Bank and European insurer Ageas (formerly Fortis),
which was formed on March 2008.[3] In this venture, IDBI Bank owns 48% equity while
IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s premier
development and commercial bank, Federal Bank, one of India’s leading private sector banks
and Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank
owns 48% equity while Federal Bank and Ageas own 26% equity each. . Having started in
March 2008, in just five months of inception, IDBI Federal became one of the fastest
process of innovation in product and service delivery IDBI Federal aims to deliver world-
class wealth management, protection and retirement solutions that provide value and
convenience to the Indian customer. The company offers its services through a vast
nationwide network of 2,186 partner bank branches of IDBI Bank and Federal Bank in
addition to a sizeable network of advisors and partners. As on 31st March 2013, the company
has issued over 4.99 lakh policies with a sum assured of over Rs. 28,580 Cr.
IDBI Federal today is recognized as a customer-centric brand, with an array of awards to
their credit. They have been awarded the PMAA Awards (2009) for best Dealer/Sales force
Activity, EFFIE Award (2011) for effective advertising, and conferred with the status of
‘Master Brand 2012-13’ by the CMO Council USA and CMO Asia.
IDBI Bank Ltd. continues to be, since its inception, India’s premier industrial development
bank. It came into being as on July 01, 1964 (under the Companies Act, 1956) to support
India’s industrial backbone. Today, it is amongst India’s foremost commercial banks, with a
wide range of innovative products and services, serving retail and corporate customers in all
corners of the country from 1082 branches and 1715 ATMs. The Bank offers its customers an
extensive range of diversified services including project financing, term lending, working
capital facilities, lease finance, venture capital, loan syndication, corporate advisory services
and legal and technical advisory services to its corporate clients as well as mortgages and
personal loans to its retail clients. As part of its development activities, IDBI Bank has been
sector –National Stock Exchange of India Limited (NSE) and National Securities Depository
Ltd, SHCIL (Stock Holding Corporation of India Ltd), CARE (Credit Analysis and Research
Ltd).
Federal Bank is one of India’s leading private sector banks, with a dominant presence in the
state of Kerala. It has a strong network of over 1104 branches and 1195 ATMs spread across
India. The bank provides over four million retail customers with a wide variety of financial
products. Federal Bank is one of the first large Indian banks to have an entirely automated
and interconnected branch network. In addition to interconnected branches and ATMs, the
Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, Any
Where Banking, debit cards, online bill payment and call centre facilities to offer round the
clock banking convenience to its customers. The Bank has been a pioneer in providing
innovative technological solutions to its customers and the Bank has won several awards and
recommendations.
Ageas is an international insurance group with a heritage spanning more than 180 years.
Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate
its business activities in Europe and Asia, which together make up the largest share of the
global insurance market. These are grouped around four segments: Belgium, United
Kingdom, Continental Europe and Asia and served through a combination of wholly owned
subsidiaries and partnerships with strong financial institutions and key distributors around the
world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal,
Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Hong Kong and
UK. Ageas is the market leader in Belgium for individual life and employee benefits, as well
as a leading non-life player through AG Insurance. In the UK, Ageas has a strong presence as
the fourth largest player in private car insurance and the over 50’s market. Ageas employs
more than 13,000 people and has annual inflows of more than EUR 21 billion.
COMPANY VISION
To be the leading provider of wealth management, protection and retirement solutions that
meets the needs of our customers and adds value to their lives.
COMPANY MISSION
dedicated relationship management and superior service delivery while striving to interact
with our customers in the most convenient and cost effective manner.
To be transparent in the way we deal with our customers and to act with integrity.
To invest in and build quality human capital in order to achieve our mission.
VALUES
Value to Customers: A product and service offering in which customers perceive value
Rock Solid and Delivery on Promise: This translates into being financially strong,
IDBI Federal launched its first set of products across India in March 2008, after receiving the
requisite approvals from the Insurance Regulatory and Development Authority (IRDA). IDBI
Federal offers services through a nationwide network across the branches of IDBI Bank and
Federal Bank in addition to a network of advisors and partners. IDBI Federal has 60 branches
IDBI Federal Wealthsurance Suvidha Growth Insurance Plan is a simple unit linked plan
that helps you take your first step towards wealth creation and that too, with ease. What’s
more, the life cover with this plan provides financial protection to your loved ones.
Maximum • 75 years
You have two options of managing funds in Wealthsurance Suvidha. You can either manage
the funds yourself or opt for Systematic Allocator. If you opt for Systematic Allocator, you
will enjoy a balance between growth and safety. In the early policy years, your investment will
have a higher exposure to equity. This will help your investments have the potential to earn
you higher returns. As the policy approaches maturity, your investment will be automatically
rebalanced to reduce the exposure to equity. This ensures that your investment is protected
With Wealthsurance Suvidha, you can choose the policy term (PT) which is the duration for
which you want to stay invested. In addition, you can also choose how long you want to pay
your premiums by choosing the premium payment term (PPT) most suited to your needs.
Please refer to the product brochure for combinations of PT and PPT available.
At the end of the 10th policy year and every 5 years thereafter, you get guaranteed loyalty
In case of an unfortunate event of you not being around, all future premiums of the policy will
be waived off.
In case of an unfortunate death during the policy term, your nominee gets the death benefit
which is the sum assured or the fund value at that time, whichever is higher. At any time
during the policy term, the death benefit will be more than 105% of all premiums paid.
In case of a financial emergency, you can make partial withdrawals from your funds any time
after the 5th policy year. For more information on partial withdrawals, please refer to the
product brochure.
The premiums you pay under Wealthsurance Suvidha are eligible for tax benefit under Sec
80C of the Income Tax Act, 1961. The maturity benefit and death benefit are also tax free
You can switch your investment option between Systematic Allocator and managing your
funds by yourself. Also, if you are managing your funds yourself, you can also switch from
one fund to the other.
OPTION TO SURRENDER
Wealthsurance Suvidha also provides the feature of surrendering the policy free of charge after
the 5th policy year. A surrender amount equal to the fund value as on date will be paid out.
Discontinuance charge will be applicable for policies surrendered within the first 5 years of the
term.
By endorsing your Wealthsurance Suvidha policy under the Married Women’s Property Act,
1874, you can create an exclusive fund for your loved ones which is legally protected from
Choose your premium amount: You can select any amount, from as low as Rs.15,000
Choose how you would like to manage your investments:You can benefit by opting
for the Systematic Allocator or you can choose to manage your investments by
yourself. Please refer to the graph below for working of Systematic Allocator
Choose your policy term (PT): Choose the duration for which you would like to stay
Choose your premium payment term (PPT): Choose the duration for which you
would like to pay premiums. There are 6 combinations of PPT and PT available in this
plan as below.
PT PPT PT PPT
15 10 10 10
20 10 15 15
20 15 20 20
Systematic Allocator helps you achieve a balance between growth and safety on your
At the commencement of your policy, a significant portion of your funds is invested in the
Equity Growth Fund (high risk fund) in order to increase the probability of higher returns.
When your policy approaches maturity, Systematic Allocator gradually reduces the exposure
to Equity Growth Fund and shifts funds to Income Fund (low risk fund). This helps reduce
your investment risk related to equities. The graph below represents the change in proportion
of investment in Equity Growth Fund and Income Fund with respect to the residual time to
maturity. Please refer product brochure for complete details regarding Systematic Allocator.
Fig 1
FUNDS AVILABLE FOR WEALTHSURANCE PLAN
The investment objective of this fund is to invest in listed stocks and aim to generate high
returns by picking stocks that have growth prospects. It aims to diversify risk by investing in
The objective of this fund is to replicate the returns generated by the Nifty Index. The
composition of the portfolio of securities invested in this scheme will be nearly similar to the
The objective of this fund is to invest in mid cap stocks with attractive growth
prospects. It aims to diversify risk by investing in large cap as well as fixed income
“Pure Fund”
The objective of this fund is to to invest in listed stocks and aims to generate high
returns with medium to long term perspective by picking stocks that do not belong to
certain sectors engaged in activities which are considered harmful for society at large.
Examples of these activities include gambling, speculative investments, tobacco and alcohol.
SBI Life - Smart Wealth Assure is a Unit Linked non-participating Life Insurance
Plan. It is a single premium plan, wherein you have to pay premiums once and you
The plan helps you to enjoy market related returns along with insurance cover, with
Key Features:
• Market Linked Returns provided through 2 funds – Bond Fund & Equity Fund
• Pay only once and get the benefits throughout the Policy Term
• Liquidity through Partial Withdrawal(s)
Product Snapshot
Max:
FEATURES:
HDFC Life Invest Wise Plan, a single premium unit-linked plan that is tailor-made to
build a corpus for your financial goals.
ELIGIBILITY:
BENEFITS:
On unfortunate death of the life assured, greater of the Fund value or Sum Assured
(less withdrawals as applicable) or minimum death benefit (at least 105% of premiums
Tax benefits under sections 80C and 10(10D) of the Income Tax Act 1961
Paying premiums is convenient with access to multiple modes – credit card, internet
FEATURES:
Option to select policy term of 10/15 or 20 years and premium paying term of 5 years
to policy term.
Automatic annual increase in sum assured from 6th policy anniversary to suit your
needs.
Two investment portfolio strategies to manage your investments better; including the
Wheel of Life portfolio strategy, which will help you to balance and safeguard your
investment.
BENEFITS
Death benefit
Maturity benefit
Surrender benefit
KOTAK PLATINUM
FEATURES:
Minimum charges
maximum earnings
BENEFITS:
Benefits earned under this plan are in accordance with the Income Tax Act, 1961. You can
SWOT ANALYSIS
SWOT Analysis is a strategic planning tool used to evaluate the strengths, weaknesses,
opportunities, and threats for a business entity. It involves specifying the objective of the
business venture or project and identifying the internal and external factors that are favorable
and unfavorable to achieving that objective. The technique is credited to Albert Humphrey,
who led a research project at Stanford University in the 1960s and 1970s using data from
fortune 500companies
Strengths
Weaknesses
Opportunities
Threats
Strengths
resources are unique and this is reflected in every move they do for the sake of
individual customer. This is the greatest value it provide online trading products
Expertise: IIL brings within the customers reach their institutional expertise and the
One-stop-shop for all the investment needs: IIL gives all the types of services and
products an individual investor can dream and think off. All the financial products
Extensive reach: IIL make sure that they are always accessible to customers
through a host of mediums. A customer can contact them either through website or
through their branches and channel partners of more than 300 offices across India.
Weaknesses
Tedious procedures: Tedious procedures and delays in processing the data and
documents of new customers.
Fundtransfer: It has tie-ups with only 5 banks for online fund transfer, where as
Opportunities
Indian economy seems to be out of recession. This is the right time for inventers to re-
enter the market. The company should adopt some strategies to increase the business
The increasing number of management graduates helps to get sales force at trainee
levels at less salaries or commission basis. It reduces the salaries and commissions
expenses of the company. The company can tie up with reputed B Schools for trainees.
Huge untapped market in rural areas, Tier2 and Tier 3 cities and towns of India can be
Many a banks are offering fund transfer services. The company can increase the tie-ups
Threats
Stiff competition from existing players in the market and there is also a threat of new
entrants. It has lead to cut throat competition in terms of brokerage charges and
exposure.
Changing economic scenario in India and changes in government policies will have
Many a investors burnt their figures during the bearish market conditions. It has turned
CHAPTER-2
OBJECTIVES
The following study was done to find the perception of people regarding the insurance
industry and their awareness regarding the same.
The study helps us to know the state of mind of people regarding the investment ULIP in
Insurance Industry.
RESEARCH OBJECTIVE
To study the different marketing strategies opt by IDBI Federal Life Insurance for the
products.
CHAPTER-3
LITERATURE REVIEW
LITERATURE REVIEW
While earlier studies on life insurance sector mainly focused upon LIC, it was only
after reforms in this sector that certain studies covering private players have taken
place. Among early studies
Sloan A., Conover J. (1998) examined the functional status of Insurance Companies
from 1995 to 1997 in Japan. The result showed that functional status of insurer does
not affect the profitability but public coverage has significant impact on profitability
of insurance companies.
Arora (2002) highlighted that LIC was likely to face tough competition from private
insurers having large established network and their trained intermediaries throughout
India.
Verma (2003) analyzed the various type of products offered by public sector giant and
the new global players in the private sector.
Kumar and Taneja (2004) highlighted the opportunities and challenges before the
insurance industry in India due to liberalization, globalization and privatization.
Kumar (2005) highlighted that private insurance players introduced a wider range of
insurance products and set up brand promotion as part of their new strategy. These
new covers had flexibility and added benefits to suit the needs of customers who were
unsatisfied with the traditional and rigid plans.
Kulshrestha and Kulshrestha (2006) highlighted that demand for life insurance in
rural India was expanding at the annual rate of 18 per cent as compared to 3.9 per cent
in urban areas which provided good opportunity for life insurers to perform
The KPMG report, titled insurance: IRDA chairman N Ranngachari released trends and
issues, in New Delhi on 9 Nov. Mr. Ranngachari said the government planned to bring out
separate pieces of legislation to regulate insurance surveyors and actuaries, after the passages
of IRDA bill.
According to ORG –MARG LIC retained top insurance player but it has lost its share to
private sector players compared to previous round of the study. LIC witnessed a drop of 12%
to finish at 15%. While ICICI Prudential, HDFC Std life and Kotak Life Insurance managed
an increase in share by 8% 3% and 2% respectively. HDFC fought back to regain its position
among top five, lost earlier to OM Kotak Mahindra.
The KPMG report makes the following observation with regards to insurance sector in India:
The threat of new players taking over the market has been overplayed.
Nationalized players will continue to hold strong market share position, but there will
be enough business for new entrants to be profitable.
Opening up the sector will certainly mean new product, better packaging and
improved customer’s services.
A middle market approach tapping segments and niches that are currently
underserved will prove profitable for new entrants.
New companies often overestimate the need for insurance expertise, assuming that a
joint venture is most appropriate type of alliance, when in fact many forms are
possible.
Both new entrants and exiting players must explore new distribution and marketing
channels.
CHAPTER-4
R E S E A R C H ME T HOD OL O GY
RESEARCH METHODOLOGY
SECONDARY DATA:-
When an investigator uses the data that has been already collected by others it is known as
Secondary data. The secondary data could be collected from Newspaper, Journals, Internet,
Reports and various publications. The advantages of secondary data can be in terms of money
and time spent.
CHAPTER-5
DATA INTERPRETATION
AND
ANALYSIS
Table shows different features of these four insurance co.
Entry Age
PREMIUM
SUM ASSURED
Interpretation: In the above table its shows that SBI provide much lesser age
than the other insurance co. and idbi federal is the second insurance co. who
provide minimum age of 3 months in ULIP Plan.
TABLE 2:-
b) Table showing Maximum policy term.
Interpretation: In the above figure we see that maximum policy term is given
by the Bajaj Allianz and then after IDBI federal, SBI Life, then HDFC Life.
TABLE 3:-
c) Table showing Minimum and Maximum Premium.
Interpretation: above figure shows that the return for the year 2011 of IDBI
Federal life insurance co. is 5.43% in debt and 6.56% in equity.
TABLE 6:-
f) Table showing Return for the Year 2012
Interpretation: The highest return of IDBI Federal of the year 2012 is got in equity by
15.35% in compare to its debts.
TABLE 7:-
g) Table showing Return for the Year 2013
Interpretation: The highest return of IDBI Federal of the year 2013 is got in equity by
6.01% in compare to its debts.
TABLE 8 :-
h) Table showing Return for the Year 2014
Interpretation: The highest return of IDBI Federal of the year 2014 is got in equity by
18.61% in compare to its debts.
TABLE 9:-
i) Table showing Return for the Year 2015
Interpretation: The highest return of IDBI Federal of the year 2015 is got in equity by
43.25% in compare to its debts.
CHAPTER-6
FINDINGS AND SUGGESTION
FINDINGS AND SUGGESTIONS
As insurance sector is growing rapidly so most of the life insurance players are selling
ULIP plans. And the awareness about ULIP is growing most of the people knows the
ULIP of life insurance. Since last 4-5 years the returns provided by ULIP were very
good so people tend more towards ULIP
While investing any insurance company customer prefers for good branded company.
IDBI Federal is India’s one of the most famous in insurance industry as it has
achieved it’s Breakeven in 5 years. And second preference is given to SBI life
Insurance.
As now till date people in India don’t wanted to invest in share market because they
were thinking that it is a bad thing but as the awareness about ULIP is increasing as
more and more private players are entering in the market. So awareness about ULIP
has led to huge competition.
First reason or preference that why an investor is interested in ULIP is Investment
Purpose, and second is to its returns and after that they investing because they are
getting the tax benefit. Then again there are some people who are investing for
pension planning and security.
In future people will be more preferring to the security of their money means they
want a secured option which should provide good returns. As ULIP are the option in
which you can have the security also and good returns. The second choice of the
investors is return of their money.
From this we can analyze that IDBI Federal Life Insurance is doing good but it is
having good potential in Market. To improve its market share they should improve the
awareness level of the common people.
Innovative Products and good brand name are the main success factor for IDBI
Federal Life Insurance. 6% customers are attracted due to the high reputation of the
company. So if IDBI wants to penetrate its market share they should improve the
marketing strategy, improving the distribution channel etc.
CHAPTER-7
CONCLUSION
CONCLUSION
ULIP is having good growth but many customers from rural areas don’t have any
Knowledge about ULIP.Theythink it is very risky.
Even investors from cities like Delhi don’t have that much of Knowledge about fund
selection they all are depend on Brokers.
People in Delhi are investing in only good branded companies as they don’t believe
on other financial companies for taking ULIP.
There is a need for insurers to undertake a demand audit in order to understand what
thepolicyholder wants and needs.
Deriving the right feedback from customers and bringing out innovative products
whichcater to customer demands will go a long way in tapping the market potential of
the insurance and sector.
For IDBI Federal Life Insurance they should go for creating more awareness about its
ULIP as now also people are just investing because IDBI is India’s most Known Bank
of India.
IDBI Federal should go for innovating more and more products and improving the
distribution channels as per the area of sales.
CHAPTER-8
BIBLIOGRAPHY
BIBLIOGRAPHY
www.idbifederal.com
www.bajajallianz.com
www.hdfclife.com
www.sbilife.com
www.wikipedia.com
Wealth trends