(18th MAY 2009 TO 26th JUNE 2009)

Project Report
SUBMITTED TO: SUBMITTED BY:

HOD RAVI KUMAR PALIWAL

(DEPARTMENT OF MANAGEMENT STUDY)

1
 CONTENTS

INSURANCE
Introduction
Needs of Insurance
History of Insurance

LIFE INSURANCE
Meaning of Life Insurance
About IRDA
Companies of Life Insurance

SBI LIFE INSURANCE

Background of Company
Vision & Mission
Share of SBI group & BNP PARIBAS
Products

PREFACE
2
There is a vast difference between theory and practice. The practical training
program is designed with the purpose of bridging gap between theory and
practice. As such I am fortunate to have an opportunity to undergo my project
and thus my practical training with SBI Life Insurance Company Limited.

Summer training was an exposure to corporate functional environment. It was

opportunity & great pleasure for me to be in Corporate Environment and having

interaction with concerned people.

This project is based on a brief study of six weeks of training period. Efforts

have been made to present all authentic information as far as possible.

3
 ACKNOWLEDGEMENT

I express my sincere thanks to my project guide, Mr. Hitesh Sharma, Lecturer, Dept. Of Management

Studies, Government Engineering College Jhalawar for guiding me right from the inception till the

successful completion of the project. I sincerely acknowledge him for extending their valuable

guidance, support for literature, critical reviews of project and the report and above all the moral

support he had provided to me with all stages of this project.

(Signature of Student)
Name of student
Ravi kumar paliwal

Table of contents
4
 PAGE
NO.
NUMBER SUBJECT

1 • Introduction

• Introduction to the Industry

• Introduction to the organization

2 • Research Methodology

• Objectives of study
• Questionnaire
• Sample size and method of selecting sample
• Limitation of study

• Analysis of Questionnaire

3 • Observation & Findings

4 • SWOT analysis
5 • Suggestion

6 • Conclusion
7 • Bibliography

8 • Appendix

5
INSURANCE:
Insurance, in law and economics, 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 loss,
from one entity to another, in exchange for a premium, and can be thought of as a guaranteed
small loss to prevent a large, possibly devastating loss. An insurer is a company selling the
insurance; an insured or policyholder is the person or entity buying the insurance. The
insurance rate is a factor used to determine the amount to be charged for a certain amount of

6
 insurance coverage, called the premium. Risk management, the practice of appraising and
controlling risk, has evolved as a discrete field of study and practice.

It is one of those things that one would not like to think and talk about but if you don’t you may
leave your family unprotected. In simple terms life insurance provides money for my family in the
event that I die.

It is a financial resource for my family and loved ones in case of my death. A “Contract” between
me and the insurance company. “Insurance is sharing the risk between company and
individual”

In insurance two type of benefits risk cover and saving. Risks cover Consists of death,
accidental recovery and health.

Insurance

Risk cover Saving

1. Death 2.Accidental recovery 3.Health

When age is increase, risk is also increase, so premium is increase.

Why we need insurance?

Insurance is a basic need of a individual. Like every man eat food forgiving so insurance is
necessary for every human life. If a person not has life insurance and he is died then his families
face many financial troubles. So insurance is necessary need.

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History of Insurance: -
In some sense we can say that insurance appears simultaneously with the appearance of human
society. We know of two types of economies in human societies: money economies (with markets,
money, financial instruments and so on) and non-money or natural economies (without money,
markets, financial instruments and so on). The second type is a more ancient form than the first.
In such an economy and community, we can see insurance in the form of people helping each
other. For example, if a house burns down, the members of the community help build a new one.
Should the same thing happen to one's neighbors, the other neighbors must help. Otherwise,
neighbors will not receive help in the future. This type of insurance has survived to the present day
in some countries where modern money economy with its financial instruments is not widespread
(for example countries in the territory of the former Soviet Union).

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About IRDA

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority (IRDA,
which was constituted by an act of parliament) specify the composition of Authority

The Authority is a ten member team consisting of

(a) a Chairman;
(b) five whole-time members;

(c) four part-time members,

(all appointed by the Government of India)

Duties, Powers and Functions of IRDA

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

1. Subject to the provisions of this Act and any other law for the time being in force, the
Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance
business and re-insurance business
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.2.Without prejudice to the generality of the provisions contained in sub-section (1), the powers
and functions of the Authority shall include, -

i. Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel
such registration:

a. protection of the interests of the policy holders in matters

concerning assigning of policy, nomination by policy holders, insurable interest, settlement of
insurance claim, surrender value of policy and other terms and conditions of contracts of
insurance;

b. specifying requisite qualifications, code of conduct and

practical training for intermediary
or insurance intermediaries and agents;
c. Specifying the code of conduct for surveyors and loss assessors;

d. Promoting efficiency in the conduct of insurance business;

Promoting and regulating professional organizations connected with the insurance and re-
insurance business
e. Levying fees and other charges for carrying out the purposes
of this Act;

f. Calling for information from, undertaking inspection of,

conducting enquiries and investigations including audit of the insurers, intermediaries,
insurance intermediaries and other organizations connected with the insurance business;
g. Control and regulation of the rates, advantages, terms and
conditions that may be offered by insurers in respect of general insurance business
not so controlled and regulated by the Tariff Advisory Committee under section 64U of the
Insurance Act, 1938 (4 of 1938)

h. Specifying the form and manner in which books of account

shall be maintained and statement of accounts shall be rendered by insurers and other
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 insurance intermediaries;

i. Regulating investment of funds by insurance companies;

j. Regulating maintenance of margin of solvency;

k. Adjudication of disputes between insurers and intermediaries

or insurance intermediaries;

l. Supervising the functioning of the Tariff Advisory Committee;

m. Specifying the percentage of premium income of the insurer to

finance schemes for promoting and regulating professional organizations referred to in
clause (f);

n. Specifying the percentage of life insurance business and

general insurance business to be undertaken by the insurer in the rural or social sector; and
o. Exercising such other powers as may be prescribe.

Mechanism of Insurance

 The concept of insurance is that people exposed to the same risk come together and agreed to
share a loss collectively if any of their members suffers it from that risk.

 Insurance companies play the role of implementing this concept-

a) They bring together people exposed to the similar risk

b) They collect members’ contribution in advance in the shape of premiums and create a
fund out of which the losses are paid
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 The life insurance covers contingencies (death, retirement) and provides relief to the family in
the event of death or retirement of the breadwinner.

 Variable needs of life insurance can be

a) Providing financial security to the family

b) Provision for education, marriage, etc of the children

c) Post-retirement income for self and dependents

d) Special needs like Medical expenses

INSURANCE ACT, 1938

The Insurance Act, 1938 aimed ‘to consolidate and amend the law relating to the business of
insurance. It covers both life and non-life insurance business.

It came into effect on 1st. July 1939.

The act was amended in 1950 and again in 1999. Some of the Major changes brought about in
1950 were:

Section 2 (5A)

‘Chief Agent’ means person who, not being a salaried employee of an insurer, in consideration
of commission
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 Performs any administrative and organizing function for the insurer.
 Procures life insurance business for the insurer by employing or causing to be employed,
insurance agents on behalf of the insurer.

Section 2(17)

“Special Agent’ means a person who, not being a salaried employee of an insurer, in
consideration of commission:

 Procures life insurance business for the insurer whether wholly or in part by employing or
causing to be employed insurance agents on behalf of the insurer, but does not include a chief
agent.

He only procures business through agents but does not perform any administrative function like
a chief agent.

Special agents can do only life insurance business and not general insurance business.

Individuals, companies or firms can become chief agents or special agents. Individuals,
Directors or Partners, as the case may be, should be free from disqualifications specified for
agents.

Section 42A,

 The certificate shall remain valid for a period of 12 months but shall be renewable.

 Provisions stipulate the number of insurance agents that a ‘chief agent’ may employ directly or
through ‘special agents’. These provisions also stipulate the minimum business requirements.

13
 For ‘special agents’ also there are similar stipulations of minimum number of agents to be
appointed and the minimum business requirements.

Some important Provisions of the Insurance Act, 1938

1. Registration of Insurance companies.

2. Maintenance and scrutiny of accounts and valuation reports.

3. Investment and utilization of funds.

4. Placing limits on the expenses of insurers.

5. Licensing of agents and their remuneration.

6. Prohibition of rebates.

7. Approval of premium rates and plans.

8. Maintaining solvency levels.

9. Constitution of Insurance Associations, Insurance Councils and Tariff Advisory

Committees.

10. The Act also vests the IRDA with powers to:

• Inspect documents.

• Appoint additional directors.

• Issue directions.

• Takeover the management of the insurer through the appointment of an

Administrator by the Central Government.

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11. Protection of the policy holder’s interest by prohibition of policies from being called into
question after 2 years. [Sec. 45]

12. Provision of nomination. [Sec. 39]

13. Provision for assignment. [Sec. 38]

14. Provision for easy settlement of dispute.

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In India many life insurance companies are working. Some of companies are this -

 SBI LIFE INSURANCE CO.LTD.

 LIC OF INDIA
 HDFC STANDARD LIFE INSURANCE CO.LTD.
 ICICI PRUDENTIAL LIFE INSURANCE CO. LTD
 BAJAJ ALLIANZ LIFE INSURANCE CO. LTD
 SHRI RAM LIFE INSURANCE CO. LTD
 RELIANCE LIFE INSURANCE CO. LTD
 ING-VYASA LIFE INSURANCE CO. LTD
 TATA AIG LIFE INSURANCE CO. LTD
 MAX NEW YORK LIFE INSURANCE CO. LTD
 FUTURE GENERALI LIFE INSURANCE CO. LTD
 BHARTI AXA LIFE INSURANCE CO. LTD
 AVIVA LIFE INSURANCE CO. LTD
 OM KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE CO. LTD
 METAIFE INSURANCE CO. LTD
 SAHARA LIFE INSURANCE CO. LTD
 BIRLA SUN LIFE INSURANCE CO. LTD
 RELIGARE LIFE INSURANCE CO.LTD
 IDBI FORTISE LIFE INSURANCE CO. LTD

And so on.

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 What is Life Insurance and a Life Insurance Company?

Life Insurance is insurance person's peace of mind. Life insurance is a policy that people buy
from a life insurance company, which can be the basis of protection and financial stability after
one's death. Its function is to help beneficiaries financially after the owner of he policy dies.
It can also be a form of savings in the long run if i purchase a plan, which offers the option of
contributing regularly. Additionally, a little known function of life insurance is that it can be tied in
with a person's pension plan. A person can make contributions to a pension that is funded by a life
insurance company.

In addition, you should also make a list of what you feel needs to be protected in your family's way
of life. With a life insurance policy in place, you can:

 Provide security for your family.

 Protect your home mortgage.
 Take care of your estate planning needs.
 Look at other retirement savings/income vehicles.

Introduction of LIC:
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In 1956, Life insurance Company (LIC) of India was started. Up to 2000 LIC’S no competitors
establish in the market and after 2000 its many competitors enter in the market. Its competitors
in the India:-

SBI LIFE INSURANCE CO.LTD.

LIC OF INDIA
HDFC STANDARD LIFE INSURANCE CO.LTD.
ICICI PRUDENTIAL LIFE INSURANCE CO. LTD
BAJAJ ALLIANZ LIFE INSURANCE CO. LTD
SHRI RAM LIFE INSURANCE CO. LTD
RELIANCE LIFE INSURANCE CO. LTD
ING-VYASA LIFE INSURANCE CO. LTD
TATA AIG LIFE INSURANCE CO. LTD
MAX NEW YORK LIFE INSURANCE CO. LTD
FUTURE GENERALI LIFE INSURANCE CO. LTD
BHARTI AXA LIFE INSURANCE CO. LTD
AVIVA LIFE INSURANCE CO. LTD
OM KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE CO. LTD
MET LIFE INSURANCE CO. LTD
SAHARA LIFE INSURANCE CO. LTD
BIRLA SUN LIFE INSURANCE CO. LTD
RELIGARE LIFE INSURANCE CO.LTD
IDBI FORTISE LIFE INSURANCE CO. LTD

And so on. in the market 31 LIC companies is establish.

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19
Background of SBI Life :

SBI Life Insurance Company Limited is a joint venture between the State Bank of India and BNP
Paribas Assurance. SBI Life Insurance is registered with an authorized capital of Rs 2000 crores
and a Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP Paribas
Assurance the remaining 26%.

State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate
Banks, SBI Group has the unrivalled strength of over 14,500 branches across the country,
arguably the largest in the world.

BNP Paribas Assurance is the life and property & casualty insurance unit of BNP Paribas - Euro
Zone’s leading Bank. BNP Paribas, part of the world’s top 6 group of banks by market value and
a European leader in global banking and financial services, is one of the oldest foreign banks
with a presence in India dating back to 1860. BNP Paribas Assurance is the fourth largest life
insurance company in France, and a worldwide leader in Creditor insurance products offering
protection to over 50 million clients. BNP Paribas Assurance operates in 41 countries mainly
through the banc assurance and partnership model.

SBI Life has a unique multi-distribution model encompassing Banc assurance, Agency and
Group Corporate.

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 SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products
along with its numerous banking product packages such as housing loans and personal loans.
SBI’s access to over 100 million accounts across the country provides a vibrant base for
insurance penetration across every region and economic strata in the country ensuring true
financial inclusion.

Agency Channel, comprising of the most productive force of more than 63,000 Insurance
Advisors, offers door to door insurance solutions to customers.

SBI Life Insurance is the 1st private life insurance company in the country, with total premium
income exceeding Rs. 3500 crore in 2008-09, and the first to declare a profit after just 5 years in
operation. SBI Life is a joint venture of SBI, India's largest and most trusted bank for 200 years,
and CARDIF, the insurance arm of BNP Paribas with global expertise.

CARDIF the life insurance unit of BNP Paribas ASSURANCE has operations in 36 countries and
over 35 million personal protection insurance clients worldwide. BNP Paribas ranks among the
world top 15 banks by market capitalization and is one of oldest foreign banks with a presence in
India dating back to 1860.SBI life insurance is one and only institute which has got AAA grade of
CRISIL.

SBI Life’s Mission Statement:-

Mission: "To emerge as the leading company offering a comprehensive range of life insurance
and pension products at competitive prices, ensuring high standards of customer satisfaction
and world class operating efficiency, and become a model life insurance company in India in the
post liberalization period".

Values:

• Trustworthiness
• Ambition
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 • Innovation
• Dynamism
• Excellence

Share of SBI GROUP & BNP PARIBAS:-

SBI Life Insurance Company Limited is a joint venture between the State Bank of India and BNP
Paribas Assurance. SBI Life Insurance is registered with an authorized capital of Rs 2000 crores
and a Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP Paribas
Assurance the remaining 26%.

SBI GROUP + BNP PARIBAS = SBI LIFE INSURANCE CO. LTD.

74 % + 26 % = 100 %

PRODUCT OF SBI LIFE:-

I. Traditional plan:-

A. Term Insurance:

 Shield Plan
 Swadhan Plan

B. Endowment plan:

SUDARSHAN PLAN
22
Money back plan

C. Children plan:

Scholar II plan

D. Pension plan:

Lifelong pension

These all Plans are Traditional Plans.

23
 SHIELD PLAN

Introduction:
Key man is the key member or staff of the organization who is a major contributor to its growth
and the profit and whose absence may affect the continuity of the business.
A Keyman insurance policy is taken to protect the 24organization against the reduction in profit
resulting from the death of the Keyman. As per IRDA circular only Pure Term Assurance
Products may be used as a Keyman Insurance. We offer “SBI Life – Shield” as a Keyman
Insurance Policy.

Product features available of “SBI Life – Shield” used as Keyman:

• Minimum / Maximum Age at Entry : 18 Years to 60 Years

• Term : 5 Years to 25 Years or Retirement age, whichever is earlier

• Choice of Increasing Sum Assured @ 5% p.a. or Level Cover

• No Riders available

• Mode of Payment : Single Premium or Regular Premium (no monthly mode available)

• Sum Assured

Minimum (Per Life Assured):

SBI Life – Shield Plan: Rs. 10, 00,000/- (in multiples of Rs. 10,000)

24
 Maximum Sum Assured (Per Corporate):
The quantum of cover would be based on the following parameters, underwriting
requirements and subject to the maximum Sum Assured permitted in the respective plan
chosen

Maximum Sum Assured should be LOWER of :

1. 5 times the average net profit of the Company for the past 3 years.

2. 3 times the average gross profit of the Company for the past 3 years.

A multiple of the individual remuneration/compensation package that the

Key man receive may also be considered.

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 SUDARSHAN

Introduction:

SBI Life - Sudarshan is an Endowment Policy designed to provide savings and protection to you
and your family. You can save regularly for the future. Thus at the end of the plan, you will
receive a substantial amount of savings along with the accumulated bonuses declared. At the
same time, your family will be protected for death risk for the full Sum Assured.

Key Features:

• It offers you the option of tailoring your policy according to your requirement and needs, by
opting for various extra covers (Riders) that are offered.
• This is a unique product that offers you an innovative cover (plan B) which helps you to protect
your savings against ’the financial consequences of inflation’ with constant premium for the
entire duration of the plan.
• It gives you protection against unfortunate terminal or dreaded illness. It is an insurance plan
which could also act as a hedging instrument.
• With this plan you can plan your children’s future education, marriage expenses or even your
own retirement - in a most flexible manner.

Product type:
It is a traditional endowment plan i.e. saving - cum protection product.

26
 How does it work?

SBI Life - Sudarshan has two basic plans.

• Fixed Sum Assured Plan: Allows you to build a regular saving plan that gives you a secure
amount at the end of a fixed period plus a bonus. In the unfortunate event of death before
maturity, the nominee would stand to receive the Sum assured and the bonus accrued till that
date.

• Increasing Sum Assured Plan - the COLA Option: The Cost Of Living Adjustment (COLA)
option is so called because it serves as an automatic hedge against inflation. It allows you to
increase the Sum Assured automatically by paying an additional premium compared to the
Fixed Sum Assured Plan. Moreover, the life cover also automatically increases during the period
as added protection to the family.

Benefits

• Maturity Benefit: Depending upon the plan option chosen:

 Fixed Sum Assured (Plan A) Basic Sum Assured along with Vested Bonus* is
payable
 Increasing Sum Assured (Plan B) Increased Sum Assured @ 5% p.a. along with
Vested Bonus* is payable

Death Benefit:
In the unfortunate event of death of the Life Assured, depending upon the plan option chosen:

 Fixed Sum Assured (Plan A) The Sum Assured along with Vested
Bonus * is payable to your nominee.

27
  Increasing Sum Assured (Plan B) Increased Sum Assured @ 5%
p.a along with Vested Bonus* is payable to your nominee.

• Other Benefits:
If the extra cover (riders) have been opted for, the following additional benefits are payable:

 Term Assurance Cover benefit

The Term Assurance cover is payable in addition to normal death benefit.

 Accidental Death and Accidental Total Permanent Disability Cover Benefit:

In case death due to an accident: The rider Sum Assured is payable in addition to normal Life
cover.

In case of Total Permanent Disability due to an accident:

Two benefits are payable:

• Critical Illness cover:

On diagnosis of any of the 6 critical illnesses and you survive for more than 30 days; the Critical
Illness Cover Sum Assured is paid in a lump sum. No more claims will be admitted under this
cover.

SBI Life - Sudarshan policy remains in force for all the other benefits

• Tax Benefits SBI Life :

Sudarshan enjoys Tax benefit u/s 80 C and 10 (10 D) of IT Act* Premiums paid for Critical
Illness Benefit qualify for tax exemption under Sec 80D*

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What is the policy term?

Minimum Maximum Years

Years
Regular Mode 8 years 30 years
Single Premium Mode 5 years 30 years

Who can buy this product?

Minimum Maximum Years

Years
Regular Mode 12 years 62 years
Single Premium Mode 12 years 65 years

What is the minimum & maximum sum assured?

Minimum Maximum
Rs.25,000 Rs.1 Crore

Riders available

• SBI Life - Critical Illness Rider

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• SBI Life - Term Assurance Rider
• SBI Life - Accidental Death & Total Permanent Disability Rider

MONEY BACK PLAN

Introduction:

As an individual your life is fueled by dreams. You experience different special moments in life
like wedding, birth of a child, child’s education or purchasing a new home. You have to be
financially prepared for these special moments. What you need is easy liquidity at regular
intervals with life insurance protection to take care of these special moments.

Key Features:

The plan has a number of moneyback options specially suited to your needs. The cover is
available at competitive premium rates. It has guaranteed cash inflows which can meet your
various financial obligations. In addition to normal death cover, the plan also provides you 4
additional covers. Product type: It is a Traditional Saving Plan with added advantage of life
cover and guaranteed cash inflow at regular intervals.

How does it work?

SBI Life Money Back is a saving plan with added advantage of life cover and cash inflow at
regular intervals. This plan is designed for individuals who want to plan for various financial
obligations at specified times in life.

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 Term of the Plan Guaranteed Survival Benefit Cumulative Guaranteed
payable Survival Benefit

10 Years The last 3 years on the term 110% of Basic Sum Assured

15 Years After every 3 years on the term 115% of Basic Sum Assured

20 Years After every 4 years on the term 120% of Basic Sum Assured

25 Years After every 5 years on the term 125% of Basic Sum Assured

Benefits

• Death Benefit:

In the unfortunate event of death during the term of the plan, the nominee will receive Sum
Assured + Vested Bonuses, (accrued till the date of death),No deductions are made from the
claim amount for the Survival Benefits already paid.

Exclusions applicable to the Basic Cover:

Suicide within the first year

• Other Optional Benefits:

SBI Life - Term Assurance Rider:

The benefit under the Term Assurance Rider is payable in addition to death benefit.
31
  SBI Life - Accidental Death and Accidental Total Permanent Disability Rider

In case of death due to an accident, the nominee gets the additional rider Sum Assured. If the
policyholder is involved in an accident, resulting in total permanent disability, he/she will get Sum
Assured under this rider in 10 equal annual installments; He/she will exit from all the rider
covers thereafter, but continue to be covered for basic cover on receipt of further premium
due, if any.

 SBI Life - Premium Waiver Benefit Rider:

Under this rider the policy holder need not pay future premiums for the base product, if he/she
suffers from total and permanent disability due to an accident after the rider is opted for.

SBI Life - Critical Illness Rider:

On diagnosis of any of the 6 critical illnesses (depending on the C.I. cover you have opted for)
and you survive for more than 30 days from diagnosis; the Critical Illness Cover Amount is
paid in a lumpsum. No more claims will be admitted under this cover. The Basic policy remains
in force for all the other benefits.

• Tax Benefit:

SBI Life Money Back Plan enjoys Tax benefit u/s 80 C and 10 (10 D) of IT Act*.
Premiums paid for Critical Illness Benefit qualify for tax exemption under Sec 80D*.

What is the policy term?

Minimum Years Maximum Years

10 years 25 years

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Who can buy this product?

Eligibility Criteria Term

Option 1: Option 2: Option 3: Option 4:

Term 10 Years Term 15 Years Term 20 Years Term 25 Years

Minimum age at entry 15 15 15 15

Maximum age at entry 60 55 50 45

What is the min. & max. sum assured?

Minimum Maximum
Rs. 50,000 (and multiples of33Rs. 10,000 Rs.5 Crore.
thereafter)
 Riders Available

• SBI Life - Term Assurance Rider

• SBI Life - Accidental Death & TPD Rider
• SBI Life - Critical Illness Rider
• SBI Life - Premium Waiver Benefit Rider

II. Unit Link Plan:

• Unit Plus-II

• Smart Ulip

• Horizon II

34
• Unit Plus Children Plan

• Horizon II Pension

• Unit Plus II Pension

35
 UNIT PLUS II PLAN
IN THIS POLICY, THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORN BY THE POLICYHOLDER

INTRODUCTION:

It may be difficult to understand all your needs but as your preferred life insurance company, SBI
Life definitely understands all your financial & insurance needs. SBIBI Life - Unit Plus II Plans
are an attempt to meet all your financial & insurance needs through a single non participating
product. You can use it the way you like. What’s more you get market linked returns which in the
long term has always proved to give better returns than traditional savings products.

Key Features:

Unmatched Flexibility to match your changing requirement.

 Choice of 5 investment funds: you can change the allocation percentage when you want,
4 switches free per annum.
Choice of term : Limited term or whole life.
Attractive riders available.

Product type:

This is a non-participating individual unit linked product.

36
 How does it work?

SBI Life - Unit Plus II Plans: II plans depending on your premium mode.

 Single Premium Mode : SBI Life - Unit Plus II Single UIN No: 111L029V01)
 Regular Premium Mode : SBI Life - Unit Plus II Regular UIN No:
111L028V01)

Decide Your Investment Amount :

Frequency Minimum Premium Maximum Premium

Single Rs. 40, 000 No Limit
Regular Rs. 24, 000 p.a. No Limit

Choose Your Life Cover:

It depends upon the total amount you have decided to invest.

Single
Minimum Sum Assured Maximum Sum Assured
Premium
Term 5 to 9 125 % of single premium
625 % of single premium amount
years amount
Term 10 years 110 % of single premium
625 % of single premium amount
and above amount
Regular
Minimum Sum Assured Maximum Sum Assured
Premium
Regular 5 times annual premium
Depends on the age*
Premium amount
5 times annual premium No Limit
Whole Life
amount (Subject to underwriting)

37
Age Band Maximum Sum Assured Multiplicator Factor
0 to 40 50 Times Of Annualized Premium
41 to 50 40 Times Of Annualized Premium
51 to 60 25 Times Of Annualized Premium
61 to 65 20 Times Of Annualised Premium

38
 Benefits :

• Maturity Benefit:

At maturity, the Fund Value as on that date is paid in full.

• Death Benefit: In the unfortunate event of the death.

 Before or the age 7 years: Fund Value is payable to the nominee.

 After attaining age 7 and before 65th birthday, the beneficiary will receive higher of Fund Value
or Sum Assured less Partial Withdrawals within the last 12 calendar months.
 If death occurs after age 65, the beneficiary will receive the higher of the Fund Value or Sum
Assured less all the Partial Withdrawals made in the last 12 calendar months before attaining
the age of 65+ all withdrawals made after attaining the age of 65 will be set off against the Sum
Assured excluding partial withdrawals from Top Up Amount.

Tax Benefits :

Tax benefit as per section 80C and 10(10D) of Income Tax Act.

What is the policy term?

Limited Whole Life Term

Term
Minimum 5 years Life cover will be available till you attain 99
Years years of age.
Maximum 40 years
Years

39

Equity Optimizer Fund:

 If you are in good health and in the age group of 0 to 65 you can opt for this plan.

Riders Available:

SBI Life – Accidental Death and Total Permanent Disability Rider

SBI Life – Critical Illness Rider

Five Funds for investments :

Equity Fund:

Assets Min Max Risk

Equity & Equity related instruments 80% 100%
High
Money market instruments Nil 20%

Bond Fund:
Assets Min Max Risk
Debt instruments 60% 100%
Low to medium
Debt and Money market instruments Nil 40%

Growth Fund:
Assets Min Max Risk
Equity & Equity related instruments 40% 100%
Medium to High
Debt and Money Market instruments Nil 60%

Balanced Fund:
Assets Min Max Risk
Equity & Equity related instruments 40% 60%
Medium
Debt and Money market instruments 40% 60%

Equity Optimizer Fund:

Assets Min Max Risk

Equity & Equity related instruments 60% 100% High

40
 Debt and Money market instruments Nil 40%

Guaranteed Additions(Only for SBI Life - Unit Plus II Regular):

Year Percentage Of Average Annualised Regular Premium

8th 15 % ( Of Annualized Average Premium for the first 8 Policy years )
15th 25% ( Of Annualized Average Premium for the first 15 Policy years )
20th 60 % ( Of Annualized Average Premium for the first 20 Policy years )
Total 100%

SMART ULIP PLAN

IN THIS POLICY, THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORN BY THE POLICYHOLDER

Features of SMART ULIP:-

• NAV guarantee

• Growth potential

• Assured safety

• Choice of 3 or 5 yrs premium paying term

• Investment cum insurance plan giving market related returns

• Innovative structured investment funds ‘flexi protect fund

• Attractive tax benefits under section 80(C)& 10(10D)

41
•

How does SMART ULIP work?

This product is split into four phases ‘subscription’ phase will be first 12 month period from the launch
date of this series of the products during which new policies will be issued. Depending upon your
ppt, ‘premium payment’ phase will be either 3yrs or 5yrs from launch date. ‘NAV build up’ phase will
last for 7 yrs from the date of launch. The last 3yrs of plan term will be called as ‘Accumulation’
phase.

This is a limited premium payment plan, where you choose to pay premium either for 3yrs or 5yrs
.you can opt for this plan during the subscription period. The maturity date shall be at the end of 10
yrs from the start of subscription period.

Premium paid by you, deduction of premium allocation charges is automatically invested into the
money market fund. On specific reset dates on 8 th & 23rd of each calendar month, your investments
will automatically be moved to the flexi protect fund. The objective of this fund is to optimize your
returns, while providing significant capital protection by adopting dynamic assets allocation strategy.

Maturity benefit:

On completion of policy term, fund value will be paid to you.

Fund value will be calculate based on NAV which is higher of :

 NAV as on date of maturity

 The guaranteed maturity NAV

42
 Death benefit:

In case of the unfortunate event of the death of the life insured during the policy term, we will pay to
the nominee, the higher of fund value or sum assured.

Surrender:

Policy will acquire a surrender value after payment of at least one full year’s premium in case of 5
year PPT and 6 month premium in case of 3 year PPT,and will be payable after the completion of
third policy year. The surrender value will be 100% of fund value less surrender charges applicable if
any.

Surrender charges:

The surrender charges will be recovered from the surrender amount.surrender charges are
expressed as a percentage of the fund value and will be based on the policy year in which
surrender request has been received or based on policy year of the first unpaid premium, as the
case may be:

Y1 20%

Y2 12%

Y3 9%

Y4 2%

Y5 onwards nil

Partial withdrawal:

We give you flexibility to withdraw your money after completion of 5 policy years 20% of fund
value to meet any sudden or unforeseen expenses. you can make one partial withdrawal per
43
 policy year.

Fund option:

The two investment fund currently offered are flexi protect fund and money market fund. Premiums
received net of allocation charges are invested into money market fund and balance in money
market fund is automatically switched to flexi protect fund on each reset date using the prevailing
at the end of that day.

 Flexi Protect Fund:

The objective of this fund is to provide capital production and optimum returns based on
systematic asset allocation model.

Assets Minimum Maximum Risk profile

Equity and equity Nil 100% Low
related instruments
Debt and money Nil 100% Medium
market instruments

Flexi Protect Fund Management Charges:- 1.50 % p.a.

 Money Market Fund:

Assets Minimum Maximum Risk profile

Debt instruments Nil 20% Low
Money market 80% 100%
instruments

Money market Fund Management charges: 0.25% p.a.

44
 Tax benefit*:

 u/s 80 (c) of the income tax act 1961 on your premiums.

 u/s 10(10D) Of The IT act 1961 on your maturity processed/the

death benefit under the policy.

Free Look Period:

The policy holder has a period of 15 days from the date of the receipt of the policy document to
review the term and conditions of the policy and where the insured disagrees to any of those terms
or conditions, he has the option to return the policy stating the reason for his obligation when he
shall be entitled to a refund of the amount as follows:

Fund value (units repurchased based on the price of the units on the date of cancellation) +
(premium allocation charges + mortality charges, if applicable + policy administration charges)
already deducted MINUS (stamp duty + medical expenses, if any).

Grace Period :

15 days for monthly mode and 30 days for other modes.

• Revival period:

We offer you a revival period of 2 years. Revival is subject to underwriting acceptance under the
applicable terms and conditions.

Charges for the Plan

 Premium allocation charges:

Policy year Premium payment term

3 years 5 years
Year 1 15% 15%
Year 2 5% 5%
Year 3 - 5%
45
 • Policy administration charges:
 The Policy Administration Charges will be recovered by canceling unit on a monthly
basis proportionately from each investment fund.

 A flat charges of Rest 60 per month will apply throughout the term of the
Policy.

 For the last three policy year, additional annual policy administration
Charges @ of Rs. 5 per thousand of the sum assured will be charges.

Mortality charges:

These charges are deducted on the 1st business day of each policy month from fund value by way of
cancellation of units. Mortality charges will be based on your age of sum at risk.

HORIZON II

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

Introduction:

46
 SBI Life – Horizon II is a unique, non participating Unit Linked Insurance Plan in Indian Insurance
Industry, where you need not to be a financial market expert. This plan offers the flexibility of Unit
Linked Plan along with Automatic Asset Allocation which provides relatively higher returns on your
money where as increasing death benefits provides higher security to your family.

Key Feature:
• Twin benefit of insurance cover and market linked returns
• Hassle-free investment management of funds from inception to maturity
• Automatic Asset Allocation of funds
• Automatic rebalancing of funds at yearly intervals, free of cost
• Higher protection, to meet your family financial needs.
• Automatic cover continuance.
• Liquidity option after 3 years
• Facility to top up your investment kitty.
• Tax benefit as per section 80C and 10(10D) of income tax act.
• 15 days free look period from the date on which you receive the policy.
document.

Product type:
It is a unit, non participating unit linked plan.

How does it work?

As per the Plan and Term chosen by you , SBI Life will invest the net
premium amount into each of the funds mentioned. The number of Units of
each fund will be allocated is calculated as:
Net Investment in Fund(x)
No. of Units Fund(x) =
NAV of Fund(x)

A unit of each Fund has its own price called the Net asset Value (NAV).
47
The NAV of each Fund is calculated on a daily basis with the following
formula:
{Market Value of Investment + Current Assets - Current Liabilities & Provisions}
NAV =
No of Units outstanding

Benefits:
• Hassle Free Investment Management: You simply invest we will manage it for you.
• Maturity Benefits: At the end of the term you will get the fund value.
• Increasing Death Benefit: For all enforced policies , In case of death after completion of
age 7 your nominee will receive Fund Value + Sum Assured otherwise fund value is
payable.

What is the policy term?

Who can buy this? Product?

If you are in good health and in the age group of 0 to 60 years you are
Welcome to join our wagon.
Maximum age at Maturity is 70 years.

What is the sum assured?

Decide the amount you can put aside to be invested in SBI Life - Horizon II every year. Your
Minimum Life Cover Sum Assured can be 5 x AP Maximum can be (T/2) x AP Where, T = Term
of Policy, AP = Annualized Premium.

Riders Available:
No Riders are available.

Three Funds for investments

Equity Fund: For Long Term Capital Appreciation.

Assets
Min
Equity & Equity related instruments

48
 Debt & money market instruments

Bond Fund: For Generating good returns by taking calculated risks.

Assets Min Max Risk

Debt instruments 80% 100%
Low to medium
Money market instruments Nil 20%

Money Market Fund: For cutting the risk while reaching maturity.
Assets Min Max Risk
Debt instruments Nil 20%
Low
Money market instruments 80% 100

WHAT ARE THE CHARGES TO MY POLICY?

• Premium Allocation Charges:

Policy Year Entry Charges as a percentage of the Premium

/Rs.Amount*
Year 1 15% with a ceiling of Rs.60,000/- per year
10% with a ceiling of Rs.40,000/- per year
Year 4th onwards 5% with a ceiling of Rs. 20,000/-per year
Top Up 1% with a ceiling of Rs.50,000/- per year

• Policy Administration Charge (by way of cancellation of units):

Monthly administrative charges are equal to Rs.70/- for Financial Year 2006-07 and will be
increased by 2% p.a.on the first Policy Month following 1 st of April each, subject to a ceiling of
Rs.300/- per Policy Month.
Fund Management Charge:
The Annual Fund Management Charge for each fund are as follows:
Equity Fund : 1.5 %
Bond Fund : 1.00%
Money Market Fund : 0.25%
Fund Management Charges are calculated and recovered from value of the funds on a daily

49
 basis. Maximum fund management charges applicable 2.0% subject to prior IRDA approval.

Partial Withdrawal Charge:

First two withdrawals in a Policy Year will be free of charge. A fee of 1% will be deducted
from the third and subsequent withdrawal amount.
Surrender Charges: 1% of the Fund Value.

Mortality Charges:
Mortality Charges are recovered on a Policy Month basis by way of cancellation of units. Rates
are renewed on yearly basis.

UNIT PLUS CHILD PLAN I

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

Introduction:

50
• Life begins afresh when you become a parent and when the child takes that first step
towards you, the moment is filled with cheer, enthusiasm never felt before. This moment
marks a new beginning in the child’s life and there’s no looking back after that. The child
keeps growing and so are his dreams, aspirations which always aim to reach horizon and
you want your child achieve his/her dreams. But at the same time as a proud parent you
also want to secure their future against rising cost of education and other necessities.

• We at SBI LIFE understand you better and hence have developed SBI Life - Unit Plus
Child Plan to suit you and your needs best. This Plan is meant for parents in the age group
of 18-57 having a child between the age group of 0-15 years.

Key Feature :

• Market related returns to match increase coast of education

• Peace of mind giving you triple benefits
• Loyalty units to celebrate your child reaching 18 years.
• New Investment Fund (Equity Optimizer Fund)in addition to existing funds
• Pay Premium for a limited period of and reap benefits over a long time.
• Flexible plan which adapts to your changing needs as and when you want.

Why Should I take Unit Plus Child Plan?

• To secure your child’s future by gaining more from financial markets along with.
• Triple Benefits for your family, in case you are not around.
• Loyalty Units by way of free allocation of units.
• Flexible option to meet your changing requirement.

What is Unit Plus Child Plan?

It is a Unit Linked Insurance available for parents who have a child between age 0-15
years. You pay premium for a limited period and your benefits continue till your child
becomes an adult. After deducted of charges, your money can be invested in five funds
as per your choice and risk appetite. At the end of the term your accumulated Fund

51
 Value can be used for your child’s Higher Education, Marriage, Financial Security or
anything else while withdrawals facility helps you to meet unplanned expenses.

Benefits of Unit Plus Child Plan:

Triple Benefits for your child’s future in your absence:

In case of your unfortunate demise

Benefit1: We pay the Sum Assured lump sum.

Benefit2: We continue to pay your regular premium on your behalf

Premium Payer Waiver Benefit)

Benefit3: Fund Values is payable at maturity.

Loyalty Units by way of free allocation of Units :

To celebrate the 18th year of your child, we offer Loyalty Units by Way of free allocation of Unit
based on the average of last 24 months Fund Value in the 24 month preceding the 18th
birthday.

Maturity Benefit :

On completion of the Policy Term , Fund Value will be paid to you.

Settlement Options:

Within a period of 2 month before the Maturity Date, you can opt for a settlement option and
choose to take the Fund Value in the form of periodical annual * payments maximum up to 5
years. At any point of time, you can ask for full payment of balance Fund Value.

Fund Option:

Currently there are 5 investment fund option which are available to you viz.

Equity Optimizer Fund:

52
Asset Minimum Maximum Risk Profile
,
Equity & Equity Related Instruments 60 % 100%
Debt & Money Market Instruments NIL 40%
High

Equity Fund:

Asset Minimum Maximum Risk Profile

,
Equity & Equity Related Instruments 80 % 100%
Debt & Money Market Instruments NIL 20%
High

Bond Fund:

Asset Minimum Maximum Risk Profile

Debt Instruments 60 % 100% Low to
Money Market Instruments NIL 40%
Medium

Growth Fund:

Asset Minimum Maximum Risk Profile

Equity & Equity Related Instruments 40 % 100% Medium to
Debt & Money Market Instruments NIL 60%
High

Balanced Fund:

Asset Minimum Maximum Risk Profile

Equity & Equity Related Instruments 40% 60% Medium
Debt & Money Market Instruments 40% 40%

Eligibility Criteria:

Entry Age
Parent Min: 18 years Max: 57 years
Child Min: 0 years Max: 15 years
Age at Maturity
Parent Max: 65 years
Min: 18 years Max:25 years
Premium Payment Term
PPT 3yrs/5yrs/7yrs/Till the child attains 18 years
Min Premium (x100)

53
 Min Yearly Premium PPT of 3 yrs:84,000 PPT of 5 yrs:60,000
PPT of 7 yrs:48,000 PPT till child attains 18 yrs : Rs
12,000
There is no limit for the maximum premium for any Premium Payment Term
Premium Mode yearly, half-yearly ,quarterly or monthly
Policy Term
Min. Term 8 yrs or (18-chil’s age at entry)whichever is higher
Max. Term 25 yrs
Sum Assure
Min Sum Assured For Policy Term 8-10 : 5 * AP(Annualized Prim)

For Policy Term 11-25yrs : Term/2 * AP

Max Sum Assured For Age 18-40yrs:25*AP

For Age 41-50yrs:20*AP

For Age 51-57yrs:15*AP

Additional Features of the Plan:

Tax Benefit*:

U/s 80C of the Income Tax Act 1961 on your premium.

U/s 10(10D) of the Income Tax Act 1961 on your maturity proceeds of the policy.

Free Look Period:

You can review the term and conditions of the policy, 15 days from the date of the receipt of the
policy document and where you disagree to any of those terms and conditions, you have the option
to return the policy stating the reason for your objection.

The amount refunded to you would be:

Fund Value + (Premium Allocation Charges + Mortality Charge + Rider Charge, if any + Policy
Administration Charge) Already deducted – (Stamp duty + Medical Expenses if any and payment
54
Instrument Collection Charges).

Grace Period:

30 days for Yearly, Half Yearly and Quarterly Premium Payment Mode; 15 days if the Premium
Payment Mode is Monthly.

UNIT PLUS II PENSION

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

• CLASSIFICATION:

Individual/unit linked pension product/ with or without life cover.

• Nature of the product:

55
 This product is a pension unit linked product wherein the policy holder chooses an investment
period from 5 to 52 years. You can to choose pay either single premium or pay regular premium
for the entire policy term.

The unit plus II pension plan offer 2 options –

Option 1- pure pension plan

Option 2-pension cum life cover

No switch option is allowed.

Introduction:

We at SBI Life understand the basic needs for pension plan and give you financial strength to
maintain your life style even after the retirement. SBI Life - Unit Plus II Pension plan makes sure
that you have regular income after you retire and also helps you to maintain your standard of
living.

This is a unit linked pension plan wherein the policyholder chooses an investment period from 5
to 52 years for a vesting age between 50 to 70 years. You can choose to pay either single
premium or pay regular premium for the entire policy term. Your contributions are invested into 5
fund options as per your choice.

Key Features:

Choice to invest & control four different funds as per your risk appetite.

56
 Flexibility to choose between two options

• Pure Pension

• Pension cum Life Cover

No medical required for Pure Pension, automatic acceptance facility.

Flexibility to increase regular contribution.
Top up payments: any amount, anytime.
Customize your plan by adding riders.
15 days free look period.

Product type:
This is a non participating Unit Linked Pension product.

How does it work?

Choose your vesting age: Any age between 50 years - 70 years.
Choose premium frequency and premium amount.

Premium Minimum frequency Maximum Frequency

Frequency
Single 25,000(in multiples of 1000) No Limit
Yearly 24,000(in multiples of 100) No Limit
Half Yearly 12,000(in multiples of 100) No Limit
Quarterly 6,000(in multiples of 100) No Limit
Monthly 2,000(in multiples of 100) No Limit

Choose plan option:

Option I Pure Pension Plan (For age group 18-65)

Option II Pension Plan with life cover (For age group 18-60)

57
 In case you have opted for option II, your sum assured will be as mentioned below.

For single premium mode:

Age at entry Sum Assured

18-35 125 % of single premium subject to maximum SA of Rs. 10
lacks
36-45 125 % of single premium subject to maximum SA of Rs. 5
lacks
46-60 125 % of single premium subject to maximum SA of Rs. 1.2
lacks

For regular premium mode

Age at Sum Assured

entry
18-35 5 or 10 times first annualized premium subject to maximum
SA of Rs. 10 Lacks
36-45 5 or 10 times first annualized premium subject to maximum
SA of Rs. 5 Lacks
46-60 1.2 lacks

Choose your investment funds:

You can invest in 5 investment funds viz. Equity Pension Fund, Bond Pension Fund, Growth
Pension Fund, Balanced Pension Fund and Equity Optimizer Fund.

58
 Benefits:

Death Benefit:
During accumulation phase
 If you opt for option I : Pure Pension Plan
Fund value will be paid in lump sum to nominee.

 If you opt for option I : Pure Pension Plan with life cover
The higher of fund value or sum assured will be paid in lump sum to nominee.

Guaranteed additions by way of free allocation of units to increase your retirement kitty.

On Vesting:

It’s your income; you decide how it works for you. You have choice and flexibility. You can take
up to one third of the fund value in lump sum. Tax-free as per current tax law.

The tax free limit applicable for the commutated value may change as per change in Income Tax
rules

During Annuity Phase:

Balance amount has to be used to purchase annuity. The rate at which the amount at vesting
date will be converted to an annuity is not guaranteed and will be based on the prevailing
immediate annuity rates under the relevant annuity option at the vesting date. Currently SBI
Life Insurance offers the following annuity options.

 Life annuity at constant rate.

 Annuity payable at constant rate throughout the life of Annuitant with facility of receiving on
death of Annuitant refund of purchase price less the sum total of annuity already paid till date of
death.

59
 Annuity payable at constant rate throughout the life of Annuitant with facility of receiving on
death of Annuitant 100% refund of purchase price.

 Annuity increasing at the simple rate of 1%, 2% or 3% per annum as the case may be and
payable during the life of the Annuitant.

 Annuity certain for 5/10/15 years as the case may be and for life thereafter.

 Last survivor annuity, whereby upon the death of Annuitant his / her spouse will receive a life
annuity, which will be either 50% or 100% of the last annuity amount paid to the Annuitant, as
selected. This annuity option will not be available if the difference in the age of annuitant and
spouse is more than 10 years.

What is the policy term?

Term = Vesting Age - Age at Entry

Minimum Years Maximum Years
5 Years 52 Years

Who can buy this product?

If you are in the age group of 18 to 65 you can opt for SBI Life - Unit plus II pension plan without
life cover. For Unit plus II pension plan with life cover it should be between 18-60 years.

Riders available:

• SBI Life - Accidental Death and Total Permanent Disability Rider

60
 • SBI Life - Critical Illness Rider

You can invest in the following investment funds viz. Equity Pension Fund, Bond Pension Fund,
Growth Pension Fund, Balanced Pension Fund and Equity Optimizer Fund.

Equity Pension Fund:

Assets Min Max Risk

Equity & Equity related instruments 80% 100%
High
Debt & Money market instruments Nil 20%

Bond Pension Fund:

Assets Min Max Risk

Debt instruments 60% 100%
Low to medium
Money market instruments Nil 40%

Growth Pension Fund:

Assets Min Max Risk

Equity and Equity related instruments 40% 100%
Medium to High
Debt & Money Market instruments Nil 60%

Balanced Pension Fund:

Assets Min Max Risk

Equity and Equity related instruments 40% 60%
Medium
Debt & Money Market instruments 40% 60%

Equity Optimizer Fund:

Assets Min Max Risk

Equity and Equity related instruments 60% 100%
High
Debt & Money Market instruments Nil 40%

61
 Guaranteed additions by way of free allocation of units: The bonus units are rewarded for
the policy term of 20 years and above, when no premiums are due and the policy is in full force.

For Regular Premium Mode

End of Policy Year Free allocation of unit as a % of annualized average Regular Premium
10 10 % of annualized average Regular Premium for the first 10 policy years
15 20 % of annualized average Regular Premium for the first 15 policy years
20 30 % of annualized average Regular Premium for the first 20 policy years

For Single Premium Mode

End of Policy Year Free allocation of unit as a % of Single Premium

10
1 % of single premium

15
2 % of single premium

20
3 % of single premium

TAX BENEFIT:

Contribution paid in unit plus 2nd pension product are eligible to tax deduction u/s it act 80CCC
(1) up to Rs 1 lake within the overall ceiling of section 80(c) of the it act.

PERSONS COVERED:

Individuals, residents and non residents Indians.

62
 Two type of premium mode is available:

1. Single Premium Mode

2. Regular Premium Mode

HORIZON II PENSION

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

NATURE OF THE PLAN:

• Horizon 2ndpension plan is a non participating unit linked pension plan with a unique
feature of automatic assets allocations by means of which you truly, don’t need to be an
expert to grow your money.

63
 • Horizon 2nd pension plan is the most simple unit linked pension plan, all you need to do
is:

 Choose your retirement date, the plan option and the regular premium amount.
 Based on the plan option and the term opted, SBI life invest your money in three
different funds viz., equity pension fund, bond pension fund, and money market
pension fund.
 The funds are invested keeping in mind the term opted for and your money is
invested in safer funds as your policy approaches maturity.

ABOVE FEATURES IN BRIEF:

• Available in two options:

option 1: pure pension and option 2 : pension cum life cover.

• Age at entry: 18- 60 years.

• Vesting age: 50- 70 years.
• Term: min. 10 and maximum 52 years.
• Premium: minimum 12,000 p.a. (6000 for h.y./3000 for quarterly/ rs. 1000 for monthly mode.),
maximum no limit.

INVESTMENT PLAN AVAILABLE:

• PLAN A-DYNAMIC PLAN:

Here, a higher proportion of your money is invested in the equity. It is ideal for longer period of
term.

• PLAN B-GROWTH PLAN:

64
 Here, the Investment in equity automatically Decrease more rapidly as the funds are put into less
risky options. This leads to a more balanced approach, hence lower volatility coupled with good
returns in the long run.

OPTIONS AVAILABLE:

• Option 1: pure pension-automatic acceptance (no life cover)

• Option 2: pension cum life cover:

Sum assured available:

 Age group 18-35 Year: 5 times the first annualized premium subject to max. SA of
Rs 10 LAKHS.
 Age group of 36-45 years: 5 times the first annualized premium subject to max. SA
of Rs 5 LAKH.
 Age group 46-60 years: fixed Rs 1.2 LAKH.

Get started…………..

All you need to do is decide on the premium you want to contribute , choose the frequency mode
(yearly/half yearly/quarterly/monthly), select an investment plan (A-dynamic / B-growth) and an
option (1/2) ,decide upon the vesting age (age from when you want to receive your pension) and
just relax!

Your regular premiums net of entry charges are invested into the three funds: equity pension Fund,
bond pension fund and money market pension fund as per the allocation grid of the plan opted for.

EQUITY PENSION FUND: for long term capital appreciation.

Assets Minimum Maximum Risk profile

65
 Equity and equity 80% 100% High
related instruments

Debt and money Nil 20% High

market instruments

BOND PENSION FUND:

For generating good returns by taking calculated risk.

Assets Minimum Maximum Risk profile

Debt Instruments 60% 100% Low to medium
Money Market Nil 40% Low to medium
instruments

MONEY MARET PENSION FUND:

For cutting the risk while reaching the maturity.

Assets Minimum Maximum Risk profile

Debt instruments Nil 20% Low
Money market 80% 100% Low
instruments

BENEFITS:

• PREMIUMS paid on horizon 2nd pension product are eligible for tax deduction u/s 80
CCC (1) up to Rs. 1 LAKH within the overall ceiling of section 80 C of the IT Act.

*
The tax benefits are subject to change in Tax laws.

66
• RETIREMENT BENEFIT:

At vesting age you get a choice to withdraw up to one third of the fund value in the LUMPSUM–
tax free as per the current tax law. The remaining has to be used to buy annuity from either SBI
life or from any other annuity provider.

• DEATH BENEFIT:

 Death during the term of the policy:

Option 1: pure pension-fund value is payable to the nominee.
Option 2: Pension with life cover- fund value + SA after deducting any

Mortality charges due but not paid during the policy year in which death occurs,
provided the policy is in full force.

 Death after vesting age: death benefits depend upon the annuity option chosen.

 ANNUITY OPTIONS CURRENTLY AVAILABLE AT VESTING AGE:

 Option 1: life annuity at a constant rate. No death benefit.
 Option 2: annuity payable at constant rate throughout the life of the annuitant a refund of
purchase price less the sum total of annuity already paid till date of death.
 Option 3: annuity payable at constant rate throughout the life of the annuitant with the facility of
receiving on death of the annuitant 100% refund of purchase price.
 Option 4: annuity increase at a simple rate of 1% or 2% or 3% per premium as the case may be
and payable during the life of the annuitant. No death benefits is payable.

67
 Option 5: annuity certain for 5/10/15 years as the case may be and for the life thereafter. Death
benefit payable- if death occurs during

 The annuity certain period, the nominee will receive the annuity amount on the original
dates scheduled for the unexpired portion of the annuity certain period and thereafter contract
ceases. If death occurs after the annuity certain period, no benefit would be payable.

 Option 6: Last survivor annuity, whereby upon the death of the annuitant his/her spouse, will
receive a life annuity, which will be either 50%/ 100% of the last annuity amount paid to the
annuitant, as the case may be. This annuity option is not available if the difference in age of the
annuitant and the spouse is more than10years.

SURRENDER FACILITY:

You have the option to surrender policy from the 4th policy year onwards. Surrender value will
acquire after payment of at least one year full premium, and will be payable after completion of
three policy years.

Policy year Surrender value as % of fund value

During the first three policy year Nil
From the 4th policy year onwards 100% of fund value less surrender
Charges

• COMPUTATION OF NAV:

A unit of each fund has its own price called the net asset value (NAV). The NAV of each fund is
calculated on daily basis with the following formula:
68
(Market value of investment + C.A.- C.L. & provisions)

Number of units outstanding

Where-

1. C.A. = Current Assets 2. C.L.= Current Liabilities

CHARGES:

• PREMIUM ALLOCATION CHARGES:

Policy year Entry charges as % of the annualized premium/Rs.

Amount
Year 1 15% Rs 60,000*
Year 2 & 3 7.5% Rs 40,000*
Year 4 to year 10 1.5% Rs 10,000*
Year 11 onwards Nil
Top up (year 1-10) 1.5% Rs 10,000*
Top up (year 11 onwards) Nil

Whichever is lower.

• POLICY ADMINISTRATION CHARGES:

Monthly administrative charges are fixed to Rs. 70/- for the financial year 2006-07. These
charges are increased@ 2% p.a. subject to a ceiling of Rs. 300 per month and this increase will
be effective from 1st of April, each financial year.

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 • PARTIAL WITHDRAWAL:

In pension plans no partial withdrawal is allowed during the policy term.

• GRACE PERIOD:

30 days for yearly, half yearly, quarterly mode. 15 days for monthly mode.

• UNPAID PREMIUM:

UNPAID WITHIN FIRST THREE POLICY YEARS-

 Life cover lapses

 A revival period of 5 years from the date of first unpaid premium is given.
 If policy is not revived within the revival period then surrender value is paid.
 Policy ends thereafter.

UNPAID PREMIUM AFTER 3 POLICY YEARS-

• Automatic life covers maintenance till end of revival period.

• If fund value reaches to an amount to equivalent to full one year premium then policy
lapses.
• If the policy has not been revived before the end of the revival period you have the option
of:

 Continuing the policy by asking for continuance of the policy, the policy will
continue till the fund value reaches a minimum of one full year’s premium or
 Ending the policy by taking home the surrender value.

REVIVAL PERIOD:
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The policy holder may revive the lapsed policy by making a written application within a period of
5 years from the due date of the first unpaid premium.

FREE LOOK PERIOD:

The policy holder has a period of 15 days from the date of the receipt of the policy document to
review the term and conditions of the policy and where the insured disagrees to any of those
terms or conditions, he has the option to return the policy stating the reason for his obligation
when he shall be entitled to a refund of the amount as follows:

Fund value (units repurchased based on the price of the units on the date of cancellation) +
(premium allocation charges + mortality charges, if applicable + policy administration charges)
already deducted MINUS (stamp duty + medical expenses, if any).

RESEARCH METHODOLOGY

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1. OBJECTIVES OF STUDY

1. To get some good market exposure by dealing with the prospects face to face.

2. To improve our ability to sell a financial product like life insurance.

3. To know the perception of the consumer about life insurance.

4. To get a deep knowledge of the financial product like insurance.

5. To get some information about the market share of SBI Life Insurance as compared
to the giants like LIC and to know the standing of the company in the market.

QUESTIONNAIRE

72
 It is most common instrument whether administered in person by phone or online
questionnaires are very flexible. The form of each question is also important. Closed end question
include all the possible answers and subjects matters choices among them.

I have used open-end questions so that customers can write answer in their own
words.

I have also used closed-end questions, which provide answers that are easier to
interpret and tabulate. I have taken care in the wording and ordering of questions. I have used
simple, direct, unbiased wording questions, which are arranged in a logical order. I have asked
personal questions at last so that respondent does not become defensive.

 Questionnaire of the customer

I have made questionnaire consisting seventeen questions to get customer’s view about life
insurance. I have asked personal questions at last so that they do not become defensive. I have
tried to know their performance i.e. whether they want to invest, where thy want to invest, up to what
amount and since when.

1. SAMPLING METHOD AND SAMPLE SIZE

• Introduction:-

Any organization whether big or small, private or public need different types of information are to know
its popularity. I have gathered secondary data and primary data and collected information from the
combination of these two data.

• Secondary data: -

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Secondary data consist of information that already exists somewhere, having been collected for
another purpose. I have gathered secondary data from website of different operators, different
magazines, newspapers and libraries.

• Primary data: -

I have taken great care while collecting primary data to answer that it is relevant, accurate, current and
unbiased. I have taken a sample of 50 people. I have visited them personally to get data.

• Sample size: -
I have taken sample size of 50 respondents. Because the population is too large so it is difficult
to survey.

2. LIMITATIONS

I am a human hang, so there is some limitation of the human hangs which is reflected in this
research. The following are the limitation of this research study.

1. The sample size of 50 might not represent the perception of whole population, as the sample
size is too small for total population of Jhalawar city.

2. The opinion expressed by the respondents may be biased.

3. The attitude of the research might be biased.

4. One of the most influencing and most critical limitations is that I am not trained for the research
study and this is my first study. I tried hard to come at conclusion, but there is lack of expertise.

5. Another limitation is that there is lack of time. If I give more time then studies will be more
effective.

There are some limitations of this study. But in spite of their limitation I worked with the enthusiasm.
And I tried to give the best results to the research of this report.

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ANALYSIS OF QUESTIONNAIRE

Here I have formed a questionnaire to study why people go for life insurance. What is people’s major
motive behind investing in life insurance? Do they decide upon their own or they take guidance of an
agent? What is their perception about SBI Life Insurance Company Limited?

 Questions:-

There are 7 questions in the questionnaire. Out of these 7 questions, 6 questions are close ended and
one question is an open ended one.

 Target Population:-

I had conducted this survey among 50 people, and the target group was a mix of people from the
society. I asked the questions to Doctors, Professionals, Professors, Advocates, Engineers, and
general public.

 Analysis:-

I have used pie charts, and some other statistical measures to analyze the questions.

Q.1 what is the main motive of persons behind investing in life insurance?

(a) Tax Benefit

(b) Savings

(c) Risk Cover

(d) Return/Yield

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 MOTIVE NO.

TAX 20
SAVING 5
RISK COVERAGE 23
RETURN/YIELD 2
TOTAL 50
There could be any motive of people behind investing in a life insurance policy. The main purpose of
life insurance is the Risk cover of one’s life. But some people consider different advantages of a life
insurance policy. Some people consider Tax benefit as the main advantage of life insurance. Some
believe that life insurance is an investment so they tend to invest in life insurance. While some people
believe that it is a compulsory saving. Now let’s see what all people say

TAX

SAVING

RISK
COVERAGE
RETURN/YIELD

Here we can see that majority of the people tend to invest in life insurance for the risk coverage. The
next preferred option is Tax Saving. We founded from the discussion with public and some experts that
those people with a low income tend to invest in life insurance to gain tax benefit.

Saving motive constitutes very small part of the total sample. Return comes last.

But this is the general conclusion of 50 people. If we take a larger sample, we can get a different result.

76
As the private players have launched ULIPs, more and more people are turning towards these products
so the Investment motive has been gaining command. Also the number of those people who wish to
invest for return is also increasing.

According to a life insurance expert (Vinod Thakkar ), life insurance is for protection first then for
Savings and Tax benefits all those things.

Q.2 Rank the above motives according to people preference.

MOTIVE OF
INVESTMENT
TAX BENEFIT SAVINGS RISK COVER RETURN/YIELD
Preference
1 21 3 24 1
2 19 11 16 4
3 8 25 7 10
4 2 11 3 35

40
35
30
25
20 TAX BENEFIT
15
10 SAVINGS
5 RISK COVER
0
RETURN/YIELD
ce

4
en
er
ef
Pr

We can see from the table and the graph that the number one motive of people about investing in life
insurance is risk coverage, which is the main theme of life insurance followed by Tax benefit. The third
position is of saving and fourth is Return. This shows that still people consider other financial tools
more viable for return and life insurance is for Tax benefit and risk cover.

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Q.3 How do people decide about investing in life insurance?

(a) On their own

(b) family decision

(c) Employer decides

(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance
plans offered by different life insurance companies so people take help of the life insurance agent and
as he guides understanding the needs of the individual, people would invest.

Here one hazardous factor is the moral hazard. People tend to invest in life insurance plans to maintain
relations though they are not in need of life insurance.

Also sometimes it depends upon the convincing power of the agent.

SOURCE NO.

ON THEIR OWN 29
FAMILY DECISION 7
EMPLOYER DECIDES 0
AGENT GUIDANCE 14
TOTAL 50

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 ON
THEIR OWN

FAMILY
DECISION
EMPLOYER
DECIDES
AGENT
GUIDANCE

Here we can see that majority people (58%) decides on their about investing in life insurance. 28%
persons decides as per the guidance of the agent. There is no contribution of employers in the decision
of one’s investment in life insurance. 14% people invest in life insurance as per the family decision.

Q.4. Which life insurance policy would people prefer to buy?

(a) Term Assurance

(b) Whole Life

(c) Endowment

(d) Combination of Whole Life and Endowment

(e) Unit Linked

This is another crucial question as there are number of products offered by life insurance companies.
The products range from pure Term Assurance Plans to Unit Linked Insurance Plans, which are
relatively new entrant in the market.

We have already explained all these policies ahead.

Now let’s find out what people have to say:

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 Type of policy N0.

Term Assurance 9
Whole Life 9
Endowment 7
Combined 19
ULIPs 6
TOTAL 50

Term
Assurance
Whole Life

Endowment

Combined

ULIPs

As it is evident from the chart and the table 38% people prefer combination of Whole Life and
Endowment product. It gives people double advantage. The person would get some amount at the end
of the stipulated period; for instance 20 years, and after that period the risk cover continues and the
rest of the amount would be paid when the person dies.

Q.5 Would People prefer SBI Life Insurance or LIC for buying the life insurance policy?

(a) SBI Life Insurance

(b) LIC

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This is the most important question as it reflects the scope of the study. It is the main theme of this
questionnaire.

Prior to 2000 LIC was the only player in the life insurance market and it had the total market. So people
had to go to LIC for buying life insurance policy. But after the entry of private players in 2000, some
people have also turned to private life insurers.

SBI Life Insurance Company Limited is newly launched company as compared to LIC. So it has fewer
customers as compared to LIC. But the ULIP plans are sold more of SBI as compared to LIC in today’s
environment.

Now let’s see what people say:

Particulars No.

SBI Life Insurance 15

LIC 35
TOTAL 50

SBI Life
Insurance
LIC

As evident from the chart that 30% of people would prefer SBI Life Insurance while 70% would prefer LIC.
81
  Personal Details: -

1) Age
(a) 18 to 30
(b) 31 to 50
) 51 to 65

Age No.

18 to 30 5
31 to 50 30
51 to 65 15
TOTAL 50

18 to 30
31 to 50
51 to 65

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 As evident from the chart that I have taken a sample of 50. Out of which 10% people are aged
between 18 to 30, 60% people are aged between 31 to 50, and remaining 30% people are aged between 51 to
65.

2) Occupation
(a) Service
(b) Business
(c) Profession
(d) Housewife
(e) Retired

Occupation No.

Service 5
Business 15
Profession 10
Housewife 5
Retired 15
TOTAL 50

Service
Business
Profession
Housewife
Retired

As the evident from the chart that out of 50 respondents 10% are of service men, 30% are of business
men, 20% are of professions, 10% are of housewives and remaining 30% are of retired.

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 3) Income

(a) 50,000 to 1,00,000

(b) 1,00,000 to 5,00,000
(c) More than 5,00,000

Income (Per Annum) No.

50,000 to 1,00,000 10
1,00,000 to 5,00,000 25
More than 5,00,000 15
TOTAL 50

50,000 to
1,00,000

1,00,000 to
5,00,000

More than
5,00,000

As the evident from the chart out of 50 respondents 20% are earning annually between 50,000 to
1,00,000, 50% are earning between 1,00,000 to 5,00,000 and 30% are earning more than 5,00,000.

4) Family members

(a) 2
(b) 3
(c) 4
(d) More than 4

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 Family Members No.

2 5
3 15
4 20
More than 4 10
TOTAL 50

2
3
4
More than 4

As the evident from the chart out of 50 respondents 10% have 2 family members, 30% have 3 family
members, 40% have 4 family members and remaining 20% have more than 4 family members.

(here is swot analysis for sbi life insurance)

OBSERVATIONS & FINDINGS

• This sales promotion process was very much satisfying for me not only practically and
academically but it also helped me in developing my communication skill and enriched my knowledge
also.

• I have come to know about the importance of marketing especially with regard to Sales promotion
on the most renowned organization like SBI Life. Especially because of emergence of many

85
competitor with excellence in services & competitive product. The base of this chapter conclusion is on
the data analysis or what we say findings.

• I have finding from the insurance care consultants of the SBI Life Insurance and their
insurance policies on my topic.

• When the insurance care consultant is asked why they are dealing in this particular insurance
policies (product) they mostly stressed on company’s image. They also said that all income and age
group of customers are attracted towards their product but buyers are mainly from higher and middle-
income group.

• Insurance care consultants said that their sale is very much increased in the last years because of
an excellent performance of the product. Insurance care consultants said that the customer are very
much satisfied after getting insurance policies because of its features related with risks of life and also
because of quality of service provide by their company is very good.

SUGGESTION

1. The agent must have to update knowledge about their products and services day to day.
2. The agent should have the knowledge about the competitor’s products also.
3. SBI should focus forwards more number of females to take policies to their children.
4. The company should more focus on the rural market by personal selling and
advertisement.
5. The agent must have healthy relationship with the customer after the policy policy
logined.
6. The SBI should concentrate the age group of 18-30, who are considered as a prospect to
take insurance policies.
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• SBI Life has established itself as a distinctive life insurance brand with an innovative, attractive
and customer-friendly portfolio ranging from protection, savings, retirement and investment
plans; which it sells through a unique tool-The Life Maker.

• Agent must have full knowledge of the products of company and good Public Relation &
communication skills.

• Agent must be engrossed with marketing & selling techniques and must have friendly approach
towards his customers and must keep the insurer’s records for long- term usage.

• Customer shall be satisfied with the services of an Agent & Agents efforts should be distinguish
appreciated by the company.

• Agent shall work in the direction of providing its customer maximum comfort & best of services.

• SBI Life is rich in services & produces a wide range of products for various needs. Further it
requires making more efforts to advertise its products through Agents & other Media.

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 BIBLIOGRAPHY AND REFERENCES

• www.SBI life insurance.com

• www.google.com
• Life Time Magazine of SBI life insurance
• Net Bios Computer Academy’s Life Insurance Book
• Broachers of SBI life insurance

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 THANK
YOU

89