SUMMER TRANING REPORT

ON

CUSTOMER PREFERENCES TOWARDS

DIFFERENT PLANS OF ICICI
PRUDENTIAL

Submitted in partial fulfillment for the Award of the

Degree of Master of Business Administration
Session 2005-07

Submitted by:
AMARJEET SINGH
MBA, 3rd Sem.
Roll No. : 102/MBA/05

PDM COLLEGE OF ENGINEERING

Affiliated to Maharshi Dayanand University, Rohtak
 DECLARATION

I,_____________Roll NO_________________PDM College OF Engineering

here by declare that the Project entitled _________________________ is an

original work and the same has not been submitted to any other institute for the

award of any other degree. The interim report was presented to the Supervisor on

______________________ and the pre-submission presentation was made on

__________________. The feasible suggestions have been duly incorporated in

consultation with the Supervisor.

Countersigned

Signature of the Supervisor

Signature of theCandidate

Forwarded by:

Director / Principal of the Institute

 INDEX

 Acknowledgment

 Preface

 Introduction

o Company Profile

o Product Profile

 Concept used in study

 Objectives

 Research Methodology

o Type of Research & Research Design

o Significance Of Research

o Collection of Data

 Data Analysis and Interpretation

 Comparisons :--

With --- Traditional plans

-Main market players.
Other Investment modules

 Findings

 Recommendations

 Limitations

 Conclusion

 Bibliography/References.
  Annexure

PREFACE

There is no doubt, that classroom study is quite important for gaining

theoretical knowledge, but practical knowledge is also important for a student who

wants to equip himself with the real life of corporate environment in any field of

studies. It is also true in the management studies. Summer training is conducted as

an integral part of the management course. It provides an opportunity to apply the

theoretical knowledge in practice. Hence, it gives an excellent opportunity to a

student to apply his ability, capability, intellect, knowledge, brief reasoning and

mettle by giving a solution to the assigned problem, which reflects his caliber.

I had the privilege to receive summer training for 60 days in

ICICI PRUDENTIAL.

My attempt would be successful if my present report serves the needs and

requirement of the organization in the future.

I thank every one who has contributed to make this experience complete &

stimulating
 ACKNOWLEDGEMENT

I acknowledge the support and guidance provided by the Faculty of my institute,

PDM College of Engineering.

I express my sincere gratitude to Mr. Manoj Kumar (Unit Manager of ICICI

PRUDENTIAL) Mr. Manoj Kawatra (Regional Manager of ICICI PRUDENTIAL)

and all the staff Members of ICICI PRUDENTIAL.

My gratitude also extends to the other people of the ICICI PRUDENTIAL.who

gave me their sincere support and guided me to complete the project.

I also express my wholehearted gratitude to my HOD

Mrs. Sheela Bhargava and M/s .Neha Panwar.

AMARJEET SINGH
INTRODUCTION
 INTRODUCTION

Insurance is a contract whereby, in return for the payment of premium by the

insured, the insurers pay the financial losses suffered by the insured as a result of

the occurrence of events. The term “risk” is used to describe all the accidental

happenings, which produce a monetary loss.

Insurance is a tool in which a large number of people exposed to a similar risk

make contributions to a common fund out of which the losses suffered by the

unfortunate due

to accidental events, are made good. The sharing of risk among large groups of

people is the basis of insurance. The losses of an individual are distributed over a

group of individuals.

The risk becomes insurable if the following requirements are compiled

with :

The insured must suffer financial loss if the risk operates.

 The loss must be measurable in money.

 The object of the insurance contract must be legal.

 The insured should have sufficient knowledge about the

risk he accepts.

WHAT IS INSURANCE ?

Insurance is a social security tool to individual

Mankind is exposed to many serious perils such as property losses from fire and

windstorm and personal losses from disability and premature death. Although it is
impossible for an individual to foretell or completely prevent their occurrence but

it is possible to provide against their financial effect—the loss of property and

earnings.

From the point of view of the individual the life Insurance may be defined as a

contract whereby for a Consideration amount called the premium, one party (the

insurer) agrees to pay to the other (the insured) or a beneficiary a particular amount

upon the occurrence of death or any other agreed event.

 Insurance is the method of spreading and transfer of risks

 Losses of few unfortunate are shared by and spread over to

many exposed to the same risk.

 Assets created by the owner in expectation of future needs

have a value.

 Losses of assets for any reason deprive the owner of the expected

benefits.

 It acts as a form of a safeguard against misfortunes.

 From the point of view of community life insurance may be defined

as a social device to make accumulations to meet uncertain losses resulting

from premature death or disability.

PURPOSE AND NEED OF INSURANCE

As said earlier that the making is exposed to many serious perils which risk the

security of their belongings. The risk here means that there is a possibility of

occurrence of loss or damage to the property, it may happen or may not happen.

Insurance is relevant only in the contingency of uncertainty. If there is no

uncertainly about the occurrence of the loss it can’t be insured against

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

firefloods, breakdowns, lightning and earthquake.

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

 Risk means possibility of loss or damage, which may or may not happen.

 Insurance become relevant only if there is uncertainly of occurrence of

event leading to loss.

 No uncertainly No insurance.

 We can say that the human life value is an ongoing generating asset, which

can be lost on early death or disability caused by accidents.

 Insurance doesn’t protect the assets but only compensates the economic or

financial loss.

 Basically insurance covers tangible assets but the concept can be extended

to intangible also.

TWO BASIC PRINCIPLES TO MAKE INSURANCE POPULAR

  People are exposed to risk and the consequences of which are difficult to

born by individual.

 If some one depends on you financially,you need insurance.

COMPANY PROFILE

STRUCTURE OF THE COMPANY

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

Prudential UK (26%). ICICI Prudential Life Insurance was incorporated on July

20,2000 and was granted a certificate of registration for carrying out life insurance

business, by the IRDA on November 24,2000.

The authorized capital of the company is Rs 2300 million and the paid up

capital is Rs 1500 million. It commenced commercial operation on December 19,

2000 becoming one of the first private sector players to enter the liberalized arena.

During the short period till March 31, 2003 The company has issued 2.45 million

policies translating into a premium Income Rs 59.7 million and the sum assured of

over Rs 1000 million. The company is now operating in Mumbai, New -Delhi,

Pune, Chennai, Kolkata, Banglore, Ahmedabad, Hyderabad and Lucknow and

other main cities. Established ICICI LTD in 1955, the Government of India and the

Indian Industry, promote Industrial development of India by providing project and

Corporate finance to Indian industry.

Since inception, ICICI has grown from a development bank to a financial

conglomerate and has become one of the largest public financial institutions of

India. ICICI has financed almost all major sector of the economy, covering 6848
companies and 16851projects. In the fiscal year 2002- 2003, ICICI had disbursed a

total of Rs 45673 billion.

Prudential was founded in 1848. Prudential is the largest life insurance

company in the United Kingdom. . Infact Prudential’s first overseas operation was

in India, .

Important activities

The important activities of the Insurance companies are: --

 Procuring new proposals for

grant of life insurance cover.

 Scrutiny of proposals and

giving decisions for

Accepting/rejecting the proposals of Insurance.

 Issuing a policy document.

 Keeping track of

performance of insurance contract by way of receipt of premiums.

 Providing assistance in

various matters like nominations, assignment, alteration of terms, change of

address and payment of claims.

  Other activities like

investment of funds, maintenance of accounts, personnel management, data

processing and complying with other legal and regulatory requirements.

 These can be termed as the

important activities of the Life Insurance companies. The insurance

companies may concentrate these activities at ones place if it area of

operation is limited or the activities may be decentralized because of the

fact that the area of that company is also decentralized.

ICICI PRUDENTIAL LIFE INSURANCE

ICICI and Prudential came together in 1993 to form Prudential ICICI Asset

Management Company, which has today emerged as one of the leading mutual

funds in India. The Two companies bring together two of the strongest financial

service brands in Asia, known for their professionalism, excellent quality of

service and long term commitment to YOU. Riding on the success of this

relationship, the two companies joined hands once more in 2000, to form ICICI

Prudential Life Insurance, with a commitment to provide leading –edge life

insurance solutions.
 PRODUCTS PROFILE

TERM INSURANCE

Under term insurance plan, sum assured is payable only if death occurs during the

specified pre-determined term. If death does not take place during such term the

amount of premium stands forfeited. Thus it can be seen that the term insurance is

nothing but the cost of pure protection. It is a contract, which provides financial

protection if death should occur within a specified period. No survival benefits are

provided under the contract.

WHOLE LIFE INSURANCE

Whole life insurance provides for the payment of the face value upon the death of

the insured, regardless of when it may occur. This policy furnishes permanent

protection to the insured at he moderate cost. This is highly important for the

average man or woman of moderate salary, who require considerable family

protection and whose limited income does not enable him or her both to pay
premiums and to accumulate a large savings fund. The whole life policy provides

a capital sum of money in the event of death of the assured whenever that may

occur

ENDOWMENT POLICY

Endowment is a product, which includes Risk cover and saving also. In the

pure endowment policy the sum assured is payable in the event of death or

definitely on maturity. In an endowment sum assured is for sure given to the

policyholder on completion of the term. Endowment plans are very popular in

developing nations since they serve a dual purpose of life cover and savings. Many

a people in our country go for endowment products because of the compulsory

saving aspect. An endowment plan on the other hand is not a cheap plan since the

insurer has a dual liability of providing life cover and on maturity giving the entire

sum assured.

Annuities

Annuities refer to income or other financial provision usually for retirement or old

age. An Annuity may be defined as a periodic repayment made during a fixed

period or for the duration of a designated life or lives. In one sense the life annuity

may be describas the opposite of insurance protection against death in its pure

form a life annuity may be defined as a contract whereby for a premium

consideration one party (the insurer) agrees to pay the other (the annuitant) a

stipulated sum (the annuity) periodically throughout life. The purpose of the

annuity is to protect again a risk—the outliving of one’s income.

INDIAN SCENE
Competition in the market always proves favorable to the to the consumer. So it is

in the case of life insurance. After what seems like almost an eon, finally the doers

of the life insurance sector were thrown open to the private sector players last year.

The Finance Act, 2001 has thankfully cleared quite a lot of cobwebs giving a level-

playing field to both the sectors. Private sector players would only be too aware

that this is the proverbial first step of the thousand—mile journey that lies up

ahead. Contending for a piece of market share with a Goliath that LIC is, will not

be an easy task unless Pvt. Sector offer qualitative and innovative products at an

affordable price. That they would be pulling out all the stops to attract customers is

not in doubt. Hence, this is as good a time as any to pay attention and see what is

on display. The strategy too many option simply confuse the users whereas too few

will surely turn them away.

India’s position is far behind the developed countries but reasonably good

compared to the other LDC’s with the real growth higher than both groups. Among

the developed countries life insurance penetration is found to be highest In Japan

followed by United States. While, the life insurance density is found to highest in

South Korea and least in US. In the developing countries on the other hand Chile

showed the highest penetration, which was 33.80% while china. Had the lowest,

which was just 0.53%. India was next to Philippines with 2.20% penetration.

Most countries, whether developed or developing and where state and private

insurers operated, featured highly concentrated markets since they serve

consumer’s interest with minimum risk.

Degree of Concentration in Insurance Market

Indian Insurance market size is presently estimated at US$ 86-95million. By

2007,it is expected to grow five-fold told US$ 480 million. In 2000-01 fiscal year,
total global premiums stood at US$9933 million, which is 0.41 percent of total

global premium of US$ 2443.6 billion. Per capital premium stood at US$ 9.9.

Indian insurance market potential could be gauged by the fact that currently about

40-42 million people have been brought under insurance whereas the potential is

estimated at 200-250 million. Insurance companies could tap only 5 percents of

Indian middle class segment.

In India, insurance is generally considered as a tax-saving device instead of its

other implied long-term financial benefits, Indian people are prone to investing in

properties and gold followed by bank deposits. They selectively invest in shares

also but the percentage is very small—4-5%. Even to this day, Life Insurance

Corporation of India dominates Indian insurance sector.With the entry of private

sector players backed by foreign expertise, Indian insurance market has become

more vibrant. In India, motor vehicle insurance premiums 2.5 percent of the

vehicle cost against international standard of 6 percent Indian federal government

considers insurance as one of major sources of funds for infrastructure

development. The government has identified the following as major thrust areas:

Timely and reliable statistical data and information about polices and market to

instill a degree of credibility; a code of good practices based on international best

practices to raise standard of Indian insurance sector.

Strengthening of supervision and regulation; Market participation in decision

making; high solvency standard and developing alternative channels. Till end of

1999-2000 fiscal year, there were only two state-run insurance

companies(LIC,GIC).

LIFE INSURANCE
ENDOWMENT ANTICIPATE TERM ANNUITY ULIP
D
ENDOWMENT

1. Life
-Save and protect -Cash back -Life Guard 1 Forever Life Link
-Secure Plus –Smart kid Single premium 2. LIFE TIME 2. LIFE
-Cash plus • Return of II pension TIME
premium 3. Life link II
• W/o return pension 3. ULIP
of 4 Secure plus Smart
premium pension kid

CONCEPT OF INSURANCE

 The concept of insurance is that people exposed to the same risk come

together and all shares loss suffered by a few.

 The insurance companies play a role of implementing the said concept ---

control in advance the shares in the shape of premiums and create a fund

out of which loss is paid.

 In the context of insurance in the event of the death of the bread earner, the

family income stops suddenly.

 The family income also stops on the retirement of the bread earner.

 Life insurance covers the contingencies and provides relief to the family

members in the event of death or retirement of the bread earner.

 Insurance covers the risk of dying to early and living to long.

Life Insurance:--

Life insurance is a contract where the person requiring and insurance pays a

consideration / premium to maintain a policy and the insurer promises to pay a sum

assured or a guaranteed amount on the happening of an eventuality. If no

eventuality occurs then the insured may be eligible for some bonus also.

Various needs of life insurance can be:

1. Protection of the interest of the family member.

2. Provision for education and marriage of the children

3. Post retirement income for self and dependents

4. Special needs for medical expenses.

5. Provision for health /illness.

6. Provision for housing.

7. Provision for income tax rebate.

BENEFITS OF LIFE INSURANCE

Insurance not only serves the ends of individuals or of special groups of

individuals but also is advantageous to the society as a whole.

Benefits to the individual:

 Superior to any other saving plans

Unlike any other saving plan, a life insurance policy affords full

protection against risk of death. In the event of death of a policy holder, the
insurance company makes available the full sum assured to the near and dear of

policy holder. In comparison, any other saving plan would amount the total saving

accumulated till date. If the death occurs prematurely, such saving can be much

lesser than sum. assured. Evidently, the potential financial loss of the family of the

policy holder is sizable

 Encourages and forces thrift

A saving deposit can easily be withdrawn. The payment of

Life insurance premiums, however, is considered sacrosanct and is viewed with

the same seriousness as the payment of interest on a mortgage. Thus, a life

insurance policy in effect bring about compulsory saving.

 Easy settlement and protection against creditors

A life insurance policy is the only financial instrument , the

proceeds of which can be protected against the claims of a creditor of the assured

by affecting a valid assignment of the policy.

 Administering the legacy for beneficiaries

Speculative or otherwise , expenses can quickly cause the

proceeds to be squandered. Several policies have foreseen this possibility and

provide for payment over a period of years or in a combination of installments and

lump sum amounts.

 Ready marketing and suitability for quick borrowing

 A life insurance policy can, after a certain period (generally Three

years ), is surrendered for a cash value. The policy is also acceptable as a security

for commercial loans, for example, a student loan.

 Disability benefits

Death is not only hazard that is insured; many policies may include

disability benefits. Typically, these provide for waiver of future premiums and

payment of monthly installment periods.

 Accidental death benefits

Many policies can also provide for an extra sum to be paid (typically

equal to the sum assured) if death occurs as a result of accide

 Tax benefits

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

1. 100% of the premium paid is deductible from your total taxable income under

section 80C up to one lac.

2. The structured benefits paid to the customer will be eligible for tax benefits

under sec. 10(10D).

When these benefits are factored in, it is found that most Policies offer returns that

are comparable /or even better than other saving modes such as PPF, NSC etc.

moreover, the cost of insurance is a very negligible.

 Benefits to business
 Insurance results in business continuation and welfare of

employees. Uncertainty of business losses is reduced by insurance

 Benefits of society

The welfare of the society is protected. Insurance results in

economic growth of the country and reduction in inflation.

The second reason behind buying of life insurance is protection i.e.

they buy life insurance to protect their families in case of any mishappening.

The third reason behind buying of life insurance is the saving i.e they tend to save

money at the same time they want to get protection.

The fourth reason behind of life insurance is investment. This is only for

those persons who have high income and have lots of money with them.

So, from the above graph we found that till now the main reason behind buying of

life insurance is Tax saving. But the views have started changing now. With the

coming of private companies in this sector, people have started changing their

views and have started going toward the protection. And they wanted to protect

their families in case of any mishappening.

FUNDAMENTALS OF INSURANCE: -

The fundamental (principles) of insurance are as follows:

 Insurable Interest

 Proximate cause

 Contribution
  Subrogation

 Utmost good faith

PROXIMATE CAUSE

Generally, the claims are payable under insurance policies if they arise out of

events which are approximately caused by the insured perils. In other words, the

proximate cause of the event has to be perils covered by the policy, so as to

constitute valid claims.

CONTRIBUTION

An insured may have several insurances on the same subject matter. If he recovers

his loss under all these insurances, he will obviously make a profit out of loss. This

will be an infringement of the principle of indemnity. Common law has, therefore,

evolved the doctrine of contribution whereby the insured is prevented from

recovering more than his loss, despite his loss, despite his having several insurance

on subject—matter.

SUBROGATION

The principles of indemnity seek to prevent the insured from making profit out of

loss. However, it may so happen that the insured may recover his loss under his

policy and he may also have rights against third parties. If after the insurance

claims is settled, the insured is allowed to ensure his rights against third parties and

to retain whatever damages he receives from them he will certainly make a profit

and the principles of indemnity. Will be infringed. Common law has therefore,

evolved the Doctrine of subrogation as corollary to the principles of indemnity.

Subrogation may be defined as the transfer of right and remedies of the insured to

the insurers who have indemnified the insured in respect of the loss.

UTMOST GOOD FAITH

Insurance requires the insured to voluntarily disclose, accurately and fully, all facts

material to the risk being proposed, whether requested or not. The insurer needs to

be aware of all the details of the health, family, history, habits and other facts about

the proposer.

INSURABLE INTEREST

Insurable interest exist if the policy owner or the nominee is likely to benefit

financially if the insured continues to live and is likely to suffer from an economic

loss, if the insurer dies. A person may take a life insurance policy on his life to

provide financial security to his family. .

OBJECTIVES OF RESEARCH STUDY

Rohtak being a big part of the financial network in India consists of

a large number of financial Institutions. The primary purpose of the project was to

study the insurance industry scenario. We further aimed at studying and comparing

the lifelong plans offered by different insurance companies.

MAIN OBJECTIVES

• To get an insight into the entire array of the insurance market.

• To conduct a comparative study to review the product features of the other

market players.

• To make a strategy towards creating customers for the products.

 Research Methodology

With an ever increasing complexity of market and business activities the

collection and analysis of data of service sector has become much more

complex. It involves a study of buying behavior, increase in sale of

LIFETIMEII, brand preference, sales promotion and products sold by

competitors both in public as well as private sector.

TYPES OF RESEARCH

The basic types of research are as follows:

1. Descriptive vs. Analytical: Descriptive research includes survey and fact

finding equines of different kinds. The major purpose of descriptive

 research is description of the state of affairs, as it exists at present. In

social science and affairs as it exists at present. In social and business

research studies. The main characteristic of the method is that the research

has no control over the variable: he can only report what has happened or

what is happening. Most exposit factor research projects are used for

descriptive studies in which the researcher seeks to measure such items.

2. Applied vs. Fundamental: “Applied research aims at finding a solution

for an immediate problem facing a society of an industrial/business

organization, whereas fundamental research is mainly concerned with

generalization and with the formulation of a theory.”

3. Conceptual vs. Empirical: Conceptual research is that related to some

thinkers to develop new concepts or to reinterpret existing ones. One the

other hand, empirical research relies on experiences or observation alone,

often without due regards for system and theory.

4. Some other Types of Research: Such research follows case study

methods or in-depth approaches to reach the basic causal relations. Such

studies usually go deep into the cause of things or events that interest us,

using very small samples and very deep probing data gathering devices.

The research may be exploratory or it may be formalized. Exploratory

research is the development of hypothesis rather than their testing,

whereas formalized research studies and those with substantial structure

and with specific hypothesis to be tested.

Research Design
A research design is the arrangement of condition for collection and analysis of

data in a manner that aims to combine relevance to the research purpose with

economy in procedure.

Research design is divided into the following parts:

1. the sampling design- methods of selecting items to be observed

2. the observational design – relates to the condition under which the

observations are to be made

3. Statistical design – it is concerned with the observation and analysis

of the data.

4. The operational design – the techniques by which the procedures like

sampling observational designs etc. can be carried out.

SIGNIFICANCE OF RESEARCH

“All progress is born of inquiry. Doubt is often better than over confidence

for it leads to inquiry, and inquiry leads to invention.” Increased scientific and

inductive thinking and it promotes the development of logical habits of thinking

and organization.

Research has its special significance in solving various operational and

planning problems of business and industry. Research, along with motivational

research, are business decisions, Market research is the investigation of the

structure and development of the market for the purpose of formulating efficient

policies for purchasing, production and sales.

 COLLECTION OF DATA

Data can be colleted in two ways primary and secondary

Primary Data

The data collected and gathered from these sources is assembled specifically for

the research project at hand. The data collected is a fresh and for the first time and

thus happened to be original in character. It is used for satisfying various

marketing research objective

(a) Personal interview: This method involved asking questions generally

in a face to face contact to potential customers (data for them was

collected initially) It was in the form of direct personal investigation .In

this case the interviewer collected the information personally from the
 sources concerned .The interviewee was allowed to ask questions from

the interviewer regarding his doubts Interviews were formal or informal

depending upon their nature and the person being interviewed

.Following points were kept under consideration:

• Planning the interview

• Preparation of questions before hand

• Not to make interview hasty

• Focusing on substance

• Accuracy of subject

(b) Questionnaire- A questionnaire consists of a number of questions

printed or typed .In a definite order on a form or set of forms. The

questionnaire was mailed to potential customers . They were to answer

the questions on their own.

Main aspects of Questionnaire:

(1) Structured questionnaire

(2) Clear and smooth moving sequence of questions

(3) Simple and easy wordings

(4) Relevant questions

All the personal details were kept confidential.

Secondary Data

The data for these sources is that which have been previously collected for

some project other than at hand. The data colleted is historical in nature .It is
 the data which you don’t have collected yourself but is already available. Some

of these sources are:

(a) Advisors manual

(b) Product module

(c) Insta Quote

(d) State Records

(e) Internal Reports

(f) Financial reports

(g) Published industry data.

Sampling Unit: The elementary units or the groups cluster of such units may form

the basis of sampling process in this case each potential customer is our sampling

unit.

Sample size : My objectives was to study the concept of life insurance plans and

to have an idea about acceptance of life insurance plans. The sample size of the

study was 100.

Technique of sampling: Convenience sampling was the technique adopted for

sampling and the size varied from area to area.

Analysis of information: The information was analyzed with the help of pie

charts and graphs to reach at conclusions. For that editing, tabulation and

interpretation of data was done.

Editing: It involves a careful scrutiny of the completed questionnaires and or

schedules. It is the process of examining the collected raw data to detect errors and

omissions and to correct these when possible.

Tabulation: It involves arranging the data in concise and logical order. It involves

summarizing raw data and displaying the same in compact form.

Interpretation: It involves drawing the ultimate interferences and reaching to the

conclusions.

DATA ANALYSIS
Do you know what is insurance?

Respondents 100
Yes 95
No 5
What factors you consider most important ?
Safety 9
Liquidity 3
Profit/growth 60
Tax benefits 20
Regular returns 8
What is your investing pattern ?

Fixed amount each month 50

Whenever i have a surplus amount 30
Fixed amount each year 20
Have you heard of the icici prudential life insurance ?

Yes 70
No 30
What do you think of insurance as an investment tool ?

Very necessary 6
Device for securing the future 78
Gives less returns 12
Kind of forced savings 4
What should be the period of liquidy ?

10 years 2
5 years 8
3 years 20
less than 3 years 70
Are other family member insured ?

Yes 35
No 65
Would you like to take any insurance schemes in future

Yes 80
No 20
 COMPARISON BETWEEN TRADITIONAL
INSURANCE PLAN AND ICICI PRUDENTIAL LIFE
TIME II.
1.No flexibility to adjust your
protection level with your
changing life styles.
2. Control over the investment is
restricted and returns are not in
your hands.
3.No flexibility to change your
protection and investment levels.
4. Value of your investment
depends upon bonus declared
by the company.
5.You can’t change your life
cover over the period of your
life style.
6.Premium payment term is
limited, so you stop paying the
premium after a period.
1.Total flexibility and control on your policy choose
level of protection as per your life style
2.Total control over your
investment with the choice of
investments
.
3.Flexibility to change your
protection and investment levels.
4.You can create own value and in long run this turns
out to be cost effective.
5.You can change your life cover
at different life stages.
6.Avail of the premium holiday
feature to stop paying the
premium and your policy still
continues.

7.Can’t increase your
Contribution, if you have extra
Money.
8.All traditional plans have the
Surrender value and after three
Years the minimum guaranteed
Surrender value is 35% of the
Premium paid excluding the first
Year premium and supplementary
Premium paid. Thus if in a
Circumstance the policyholder
Has to surrender it will have
a huge loss.
9.All traditional plans have high
first year charges. These are
usually in the tune of 60% or
70% and in some cases even
higher. Thus it takes longer for
the money to grow in a
traditional plan.
7.Flexibility to increase your
savings anytime with help of top-ups.
8.LIFETIMEII has no surrender value and after 3 years
if the policyholder wants to exit from the plan-the exit
can happen at
market price which is complete
and time value of the units.
9.LIFETIMEII has a lower cost of
investment. The 20% first year
charges is the lowest asset
acquisition cost amongst all
insurance plans. This makes
LIFETIMEII a value for money plan
as more money goes towards
investment from the beginning.

10.Traditional insurance plans 10.LIFETIMEII gives control to the

do not provide control on
investment. Money is invested as
per rules and laws laid down.
The investment is not transparent
And the policyholder has no
options to monitor the investments.
policyholder over the
investments. The policyholder
decides where, when and how is
your money be invested. There
are three funds that enable the
policyholder to invest as per the
return desired and can build a
personal risk-return profile.

LIFE TIME II Birla Sun life Classic life

Features LIFETIMEII Birla Sun life Classic Life

Age 0-60 years 1-65years
Term Choice resets with the consumer with a Choice rests with the customer
minimum premium payment term of 3 with a minimum premium payment
years term of 3 years.
Sum Assured Two levels: Level 1- A multiple of the Depends on the contribution
annual contribution chosen by the
policyholder. A minimum multiple of 7
or a maximum multiple of 150,
depending on the age. Level 2.- Sum
Assured can be increased with an
increase in responsibility and need for
 insurance .this increase will be 15% of
the initial Sum Assured every year from
the 3rd policy anniversary till the 9th
policy anniversary. However each
increase cannot be more than Rs 300000.
The maximum age for entry into this
option is 35 years.
Survival Benefit Value of units (3rd year onward Value of units
Death benefit Higher of Sum Assured or value of units. Higher of Sum Assured or value of
However, the value of units will be units. However, the value of units
treated as death benefit if the Life will be treated as death benefit if
Assured is less than 7 years of age or the life assured is less than
more than 70 years of age. 70Years. Of age.
Withdrawal Partial or complete withdrawals are Partial or complete withdrawals are
benefit available from the 3rd year onwards available from 3rd years. Onwards.
In a year 2 withdrawals are free of
charge for every additional charge
of Rs. 100 will be levied
Contribution Minimum: Rs: 18,000 p.a Minimum premium of Rs.
25,000. p.a.
Flexibility to The maximum decrease in the premiums Not available
increase /or can be unto 20% of the initial premium
Decrease Your chosen by the policyholder at the time of
Contribution inception of the policy, However, in no
circumstances can be premium be
reduced to below Rs.18,000 or 80% of
the initial chosen premium, whichever is
higher. However, there is no cap
increasing the premium. The premiums
can be increased with or without the
increase in Sum Assured
Investment Maxi miser, Balancer, Protector β Protector, Builder
options Preserver Enhancer, creator
Increase/ Available. Any increase in Sum assured, Available
decrease of Death is subject to underwriting.
benefit
Bonus units Declared as a % of unit value. Paid at the Loyalty additions in the form of
end of 4th, 8th,and 12tth policy year. The additional units will be credited to
allocation of the units would only be policy fund at the end of the 10th
made if the annual contribution till that policy year. And at the and of
date were made in total. every 5th year thereafter
<=75,000: 0.15%
75,001—5,00,000: 0.20%
5,00,001- 10,00,00: 0.25%
10,00,01-50,00,00: 0.30%
50,00,01,and above: 0.35%
Top-up Available. Minimum top-up of Rs, 5000. Available (Charged: 1.5% of the
Charges- 1%of top up top-up
Switch 4 free switch a year, with minimum In a year two switches are free.
switch amount being Rs. 10,000 Every additional switch will be
 charged at .25% of the funds
transferred.

Features LIFETIMEII Birla Sun life Classic Life

Surrender Value The policy will acquire a surrender value The Surrender charges levied will
from the 1st year onwards. The differ from year- year-1 –75%:
surrender value available to the Year 2- 60%: Year 3- 40%: year 4-
policyholder is as follow: After 1 year’s 20%, from year 5 onwards there
premiums is paid:25% of the unit value. will not be any Surrender charges
After 2 years premiums are paid: 40% of
the unit value. After 3 years premium
are paid: 60% of the unit value and after
4 years premiums are paid: 100% of
units value.
Automatic cover Available after the first 3 years Available
Continuance premiums have been paid. Can be
availed upto a maximum of 2 years at a
time in the first 10 years of the policy,
the consumer can avail of the automatic
cover continuance without any time
limitations.
Initial Charge % Allocation of the premium Charges
18000-35999:1st year-81%;2nd-5th year- Rs. 25,000 to Rs. 49,999; 1st year:
96%;6th-10th year-98%;11th year 15%; subsequent years; 4%
onwards-99%
36000-99999:1st year-83%;2nd-5th year- Rs year; 14%; subsequent years;
96%;6th-10th year-98%;11th year 4%
onwards-99%
1,00,000-4,99,999:1st year-85%;2nd-5th Rs. 1,00,000 and above: 1st years;
year-96%;6th-10th year-98%;11th year 13%; subsequent years; 4%
onwards-99%
5,00,000++ : 1st year-88%;2nd-5th year-
96%;6th-10th year-98%;11th year
onwards-99%
Admin Charge Admin Charge of Rs. 60/ month. Policy admin fees of Rs. 60 per
month.
Other charge Not applicable A charges of Rs. 2 per thousand of
the face amount will be deducted in
the first policy year.
Bid-offer spread Not applicable Not applicable

Fund management The annual investment charge is 1.50% Investment mgmt fee of 1 per cent
charge for maxi miser, 1.00% for balancer, per annum for protector, Builder
0.75% for protector and preserver. and Enhancer funds and 1.25 per
cent for the Creator fund.
Riders ADBR, WOPR, CIBR β MSAR Term/ ADBR/ CIBR

LIFE TIME II# Birla Sunlife — Flexi Save Plus

Features LIFETIMEII Birla Sun life Flexi Save Plus
Age 0-60 years 30 days –65years

Term Choice resets with the consumer with a As per policy term-5, 10,15,20,25,
minimum premium payment term of 3 or 30 years or as per maturity age
years —15,20,25,30,35 years for minors
and 60,65,70,80, years for adults
Sum Assured Two levels: Level 1- A multiple of the Minimum: Rs. 50,000 for minors
annual contribution chosen by the and Rs. 75,000 for adults
policyholder. A minimum multiple of 7 or
a maximum multiple of 150, depending
on the age. Level 2.- Sum Assured can be
increased with an increase in
responsibility and need for insurance .this
increase will be 15% of the initial Sum
Assured every year from the 3rd policy
anniversary till the 9th policy
anniversary. However each increase
cannot be more than Rs 300000. The
maximum age for entry into this option is
35 years.
Survival Benefit Value of units (3rd year onward Value of units (3rd year onward).
Death benefit Higher of Sum Assured or value of units. Face amount + Policy Fund
However, the value of units will be treated (Where the policy is bought on or
as death benefit if the Life Assured is less prior to the 1st birthday of the life
than 7 years of age or more than 70 years insured, only Policy fund is
of age. payable to the policy owner in the
event of death of the life insured
within the first policy year).
Withdrawal Partial or complete withdrawals are Partial or complete withdrawals
benefit available from the 3rd year onwards are available from 3rd years.
Onwards. In a year 2 withdrawals
are free of charge for every
additional charge of Rs. 100 will
be levied
Contribution Minimum: Rs: 18,000 p.a Subject to a minimum face amount
of Rs. 50,000 for minors andRs75,
000 for adults
Flexibility to The maximum decrease in the premiums Not available
increase /or can be unto 20% of the initial premium
Decrease Your chosen by the policyholder at the time of
Contribution inception of the policy, However, in no
circumstances can be premium be reduced
to below Rs.18,000 or 80% of the initial
chosen premium, whichever is higher.
However, there is no cap increasing the
premium. The premiums can be increased
with or without the increase in Sum
Assured
Investment Maxi miser, Balancer, Protector β Protector, Builder
options Preserver
Increase/ Available. Any increase in Sum assured, Can be done once in every 5 years.
decrease of Death is subject to underwriting. The minimum amount of change
benefit will be Rs.50,000 This change will
result in a change in a change in
the premiums to be paid and will
be subject to the permissible limits
of minimum face amount
Bonus units Declared as a % of unit value. Paid at the Minimum Guarantee of 3% P.a.
end of 4th, 8th,and 12th policy year. The On the premium net of all charges
allocation of the units would only be and deductions.
made if the annual contribution till that
date were made in total.

Top-up Available. Minimum top-up of Rs,5000. Not available

Charges- 1%of top up.
Switch 4 free switch a year, with minimum 1 free switch per year. For every
switch amount being Rs. 10,000. additional switch, a charge of Rs.
1000 will be levied

Surrender Value The policy will acquire a surrender value The surrender charges will be
from the 1st year onwards. The surrender 100% of the annualized premium
value available to the policyholder is as for the first 24 months of the
follow: After 1 year’s premiums is paid: policy. It will be 24% in month
25% of the unit value. After 2 years 25 and will reduce by 1% every
premiums are paid: 40% of the unit month thereafter and will be zero
value. After 3 years premium are paid: from the 49th month onwards
60% of the unit value and after 4 years
premiums are paid: 100% of units value.
Automatic cover Available after the first 3 years premiums Not available
Continuance have been paid. Can be availed upto a
maximum of 2 years at a time in the first
10 years of the policy, the consumer can
avail of the automatic cover continuance
without any time limitations.
Initial Charge % Allocation of the premium Charges

18000-35999:1st year-81%;2nd-5th year- 5 or greater term: 1st year –

96%;6th-10th year-98%;11th year 29.9%; 2nd year onwards: 5%
onwards-99%
36000-99999:1st year-83%;2nd-5th year- 10 or greater term: 1st year -
96%;6th-10th year-98%;11th year onwards- -54.6%; 2nd and 3rd year:
99% 7.5%; 4th year onwards;5%
1,00,000-4,99,999:1st year-85%;2nd-5th 15 or greater term: 1st year-
th th
year-96%;6 -10 year-98%;11th year 65%; 2nd and 3rd year: 7.5%;
onwards-99% 4th year onwards: 5%
 5,00,000++ : 1st year-88%;2nd-5th year-
96%;6th-10th year-98%;11th year onwards-
99%

Admin Charge Admin Charge of Rs. 60/ month. Policy admin fees= Rs .22 per
month
Other charge Not applicable An annual charge of Rs. 2.88 per
thousand-face amount will be
deducted in the first 10 years of
the policy except in the second
year where it will be Rs. 15.24
per thousand-face amount. From
the 11th years onwards this
annual charge will increase
subject to a maximum of 3.75%
per years
Bid-offer spread Not applicable

LIFETIMEII # LIC Bima Plus

Features LIFETIMEII LIC Bima Plus

Age 0-60 years 12-55 years
Term Choice resets with the consumer with a 10 years
minimum premium payment term of 3
years
Sum Assured Two levels: Level 1- A multiple of the Maxi miser limit unto Rs. 2lakhs
annual contribution chosen by the
policyholder. A minimum multiple of 7 or
a maximum multiple of 150, depending on
the age. Level 2.- Sum Assured can be
increased with an increase in responsibility
and need for insurance .this increase will be
15% of the initial Sum Assured every year
from the 3rd policy anniversary till the 9th
policy anniversary. However each increase
cannot be more than Rs 300000. The
maximum age for entry into this option is
35 years.
Survival Benefit Value of units (3rd year onward Bid Value of the fund units along
with maturity bonus at 5% of the
Sum Assured
Death benefit Higher of Sum Assured or value of units. Death during the first 6 months-
However, the value of units will be treated 30% of SA + value of units., next
as death benefit if the Life Assured is less 6 month- 60% of SA + value of
than 7 years of age or more than 70 years units. Death after 1st years- SA +
of age. value of units. Death during the
10th year-105%of SA + value of
 units.
Withdrawal Partial or complete withdrawals are Premature withdrawals allowed
benefit available from the 3rd year onwards after one year (after applying bid-
offer spread.
Contribution Minimum: Rs: 18,000 p.a Not specified
Flexibility to The maximum decrease in the premiums Not available
increase /or can be unto 20% of the initial premium
Decrease Your chosen by the policyholder at the time of
Contribution inception of the policy, However, in no
circumstances can be premium be reduced
to below Rs.18,000 or 80% of the initial
chosen premium, whichever is higher.
However, there is no cap increasing the
premium. The premiums can be increased
with or without the increase in Sum
Assured
Investment Maxi miser, Balancer, Protector β Preserver Balanced, secured β Risk.
options
Increase/ decrease Available. Any increase in Sum assured, is Not available
of Death benefit subject to underwriting.
Bonus units Declared as a % of unit value. Paid at the Not available
end of 4th, 8th,and 12th policy year. The
allocation of the units would only be made
if the annual contribution till that date were
made in total.
<=75,000: 0.15%
75,001—5,00,000: 0.20%
5,00,001- 10,00,00: 0.25%
10,00,01-50,00,00: 0.30%
50,00,01,and above: 0.35%
Top-up Available. Minimum top-up of Rs. 5000. Available (Charges: 1.5% of the
Charges 1% of top-up Top-up

LIFETIMEII # HDFC LINKED

Features LIFETIMEII HDFC Linked

Age 0-60 years 18-65years
Term Choice resets with the consumer with a 10-30 years
minimum premium payment term of 3
years
Sum Assured Two levels: Level 1- A multiple of the Only 5, 10, 20 (age- based)
annual contribution chosen by the multiples are allowed as Sum
policyholder. A minimum multiple of 7 Assured.
or a maximum multiple of 150,
depending on the age. Level 2.- Sum
Assured can be increased with an
increase in responsibility and need for
 insurance .this increase will be 15% of
the initial Sum Assured every year
from the 3rd policy anniversary till the
9th policy anniversary. However each
increase cannot be more than Rs
300000. The maximum age for entry
into this option is 35 years.
Survival benefit Value of units (3rd year onward Value of units
Death benefit Higher of Sum Assured or value of Higher of Sum Assured or value of
units. However, the value of units will units. However, the value of units
be treated as death benefit if the Life will be treated as death benefit if the
Assured is less than 7 years of age or life assured is more than 70Years.
more than 70 years of age. Of age.
Withdrawals Partial or complete withdrawals are Partial withdrawals available from
Benefit available from the 3rd year onwards the 3rd year onwards. Provided that
the value of Units does not go below
the Sum Assured
Contribution Minimum: Rs: 18,000 p.a Minimum: Rs. 10,000p.a
Flexibility to The maximum decrease in the Available
increase or decrease premiums can be unto 20% of the initial
your contribution premium chosen by the policyholder at
the time of inception of the policy,
However, in no circumstances can be
premium be reduced to below Rs.18,
000 or 80% of the initial chosen
premium, whichever is higher.
However, there is no cap increasing the
premium. The premiums can be
increased with or without the increase in
Sum Assured
Investment option Maxi miser, Balancer, Protector β 5 Fund Options- Defensive
Preserver. Managed, Safe Managed,
Liquid β Growth
Increase /decrease Available. Any increase in Sum assured, Not available
of death benefit is subject to underwriting.
Bonus units Declared as a % of unit value. Paid at Not available
the end of 4th, 8th,and 12tth policy year.
The allocation of the units would only
be made if the annual contribution till
that date were made in total.
<=75,000: 0.15%
75,001—5,00,000: 0.20%
5,00,001- 10,00,00: 0.25%

Features LIFETIMEII HDFC Linked

10,00,01,-50,00,00: 0.30%
 50,00,01 and above: 0.35%

Top-up Available. Minimum top-up of Rs,5000. Available

Charges- 1%of top up.
Switch 4 free switch a year, with minimum Switches are free as of now. But
switch amount being Rs. 10,000. the company reserves the right to
put a charge on the switches.
Surrender Value The policy will acquire a surrender value The surrender charge is 25% of 3
from the 1st year onwards. The surrender years outstanding regular
value available to the policyholder is as premium. No charges after 3 years
follow: After 1 year’s premiums is paid: premiums grow.
25% of the unit value. After 2 years
premiums are paid: 40% of the unit value.
After 3 years premium are paid: 60% of
the unit value and after 4 years premiums
are paid: 100% of units value.
Automatic cover Available after the first 3 years premiums Charges
Continuance have been paid. Can be availed upto a
maximum of 2 years at a time in the first
10 years of the policy, the consumer can
avail of the automatic cover continuance
without any time limitations.
Initial Charge % Allocation of the premium 1st yr-27% 2nd yr-27%, 3rd yr
onwards- 1%
st nd th
18000-35999:1 year-81%;2 -5 year-
96%;6th-10th year-98%;11th year onwards-
99%

36000-99999:1st year-83%;2nd-5th year-

96%;6th-10th year-98%;11th year onwards-
99%

1,00,000-4,99,999:1st year-85%;2nd-5th
th th
year-96%;6 -10 year-98%;11th year
onwards-99%
5,00,000++ : 1st year-88%;2nd-5th year-
96%;6th-10th year-98%;11th year onwards-
99%
Admin Charge Admin Charge of Rs. 60/ month. Admin charges of Rs. 180 fixed
charge per annum,
Other charge Not applicable Not applicable.
Bid-offer spread Not applicable Not applicable.

Fund Management The Annual investment Charge is 1.50% Investment charge of 0.80% of the
Charge. for Maxi miser, 1.00% for Balancer Fund Value across all the funds.
0.75% for Protector β Preserver.
Riders ADBR, WOPR, CIBR β MSAR
LIFE TIME II # Allianz Bajaj Unit gain
Features LIFETIMEII
Age 0-60 years
Term Choice resets with the consumer with a
minimum premium payment term of 3
years
Sum Assured Two level: Level 1- A multiple of the
annual contribution chosen by the
policyholder. A minimum multiple of 7 or a
maximum multiple of 150, depending on
the age. Level 2.- Sum Assured can be
increased with an increase in responsibility
and need for insurance .this increase will be
15% of the initial Sum Assured every year
from the 3rd policy anniversary till the 9th
policy anniversary. However each increase
cannot be more than Rs 300000. The
maximum age for entry into this option is
35 years.
Survival benefit Value of units (3rd year onward
Death benefit Higher of Sum Assured or value of units.
However, the value of units will be treated
as death benefit if the Life Assured is less
than 7 years of age or more than 70 years of
age.
ABR β CISR
Allianz Bajaj Unit gain
0-60 years
Choice resets with the consumer
with a minimum premium
payment term of 3 years
Minimum Sum Assured is 5 times
the premium paid. Maximum Sum
Assured is as per the limits set per
age bands.
Value of Fund at Bid price.
Higher of Sum Assured or value of
units. However, the value of units
will be treated as death benefit if
the Life Assured is less than 7
years of age or more than 70 years
of age.
Withdrawals Partial or complete withdrawals are Partial or complete withdrawals at
Benefit available from the 3rd year onwards bid price after 3rd year.
Contribution Minimum: Rs: 18,000 p.a Minimum: Rs. 10,000p.a.

Flexibility to The maximum decrease in the premiums Only an increase in contribution is

increase or can be unto 20% of the initial premium allowed.
decrease your chosen by the policyholder at the time of
contribution inception of the policy, However, in no
circumstances can be premium be reduced
to below Rs.18,000 or 80% of the initial
chosen premium, whichever is higher.
However, there is no cap increasing the
premium. The premiums can be increased
with or without the increase in Sum
Assured
Investment option Maxi miser, Balancer, Protector β Equity Fund, Debt Fund, Balanced
Preserver. Fund, Cash Fund
Increase /decrease Available. Any increase in Sum assured, is Available
of death benefit subject to underwriting.

Features LIFETIMEII Allianz Bajaj Unit gain

Bonus units Declared as a % of unit value. Paid at the end Not available
of 4th, 8th,and 12th policy year. The allocation of
the units would only be made if the annual
contribution till that date were made in total.
<=75,000: 0.15%
75,001—5,00,000: 0.20%
5,00,001- 10,00,00: 0.25%
10,00,01-50,00,00: 0.30%
50,00,01,and above: 0.35%
Top-up Available. Minimum top-up of Rs. 5000. Available
Charges 1% of top-up
Switch The policy will acquire a surrender value Three free switches every
from the 1st year onwards. The surrender policy year, Subsequent
value available to the policyholder is as switches would be charged@
follow: After 1 year’s premiums is paid:25% 1% of Switch amount or Rs.
of the unit value. After 2 years premiums are 100, whichever is higher.
paid: 40% of the unit value. After 3 years
premium are paid: 60% of the unit value and
after 4 years premiums are paid: 100% of
units value.
Surrender Value Available after the first 3 years premiums A selling / purchase price
have been paid. Can be availed up to a spread of 5% will be applicable
maximum of 2 years at a time in the first 10 from the 3rd years onwards
years of the policy, the consumer can avail of
 the automatic cover continuance without any
time limitations.
Automatic cover % Allocation of the premium Available after the 3rd policy
Continuance year
st nd th
Initial Charge 18000-35999:1 year-81%;2 -5 year- Charges
th th
96%;6 -10th year-98%;11 year onwards-
99%
36000-99999:1st year-83%;2nd-5th year- 1st year-70%; 2nd year –2%;
96%;6 -10 year-98%;11th year onwards- 3rd year- 1%; No charge from
th th

99% the 4th year onwards

1,00,000-4,99,999:1styear-85%;2nd-5th year-
96%;6th-10thyear-98%.

Features LIFETIMEII Allianz Bajaj Unit gain

1,00,000-4,99,999:1st year-85%;2nd-5th
year-96%;6th-10th year-98%;11th year
onwards-99%.
Admin Charge Admin charge of Rs. 60/ month. Annual admin charge of 1.25% p.a of
net assets
Other charge Not applicable Transaction charge of 0.5% of the
equity investment and 0.1% of the
debt investments.
Bid-offer spread Not applicable The bid-offer spread is 5% of the offer
price.
Fund The annual investment charge is 1.50% Annual investment charge of 1% p.a.
Management for maxi miser, 1.00% for balancer , of net assets.
Charge. 0.75% for protector and preserver.
Riders ADBR, WOPR, CIBR β MSAR ABR/ADBR/CI/Hospital Cash Benefit

FINANCIAL PLANNING:

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

(i) Give the best possible return and

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

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

maximize returns keeping in mind the liquidity and security of our investment.

The three basic principles (guiding factors) of financial planning are:

• Setting realistic financial goals

• Starting investments early

• Thinking long term while allowing for short-term needs that may arise.

One plus lump sum of money to

(a) Produce income.

(b) Increase the capital

One can invest money only when one possesses it, which is possible by saving

systematically. Selecting a good saving scheme can do this.

Feature of a Good Saving Plan

(a) Safety

(b) Flexibility

(c) Should have incentive to save continuously without default.

(d) Tax saving

(e) Should fulfill financial objective even in case of death.

Features of an ideal Investment Scheme

(a) Safety

(b) Liquidity

(c) Higher Yield

(d) Capital growth

Safety: refers to financial soundness of investment.

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

whenever required.

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

Similarly an increase / decrease in the tax rate also affects our return on

investments. Any return, which is not taxable, will be preferred to those on which

taxes have to be paid.

A good investment is that which earns decent returns after providing for taxes and

inflation.

However, there is no single wonder investment, which can have all the above

features. One can’t have windfall gains of stock market with the safety of

Government securities or the life cover and tax concessions of life insurance, all in

one.

A prudent person should look for those investments, which offer the ideal solution

to his personal needs under his own set of circumstances.

High Returns and Best Returns

(i) These are not necessarily the same.

(ii) High returns may be offset by risk to capital.

(iii) Best returns should be determined by the advantage an investment offers.

The Investor’s Approach

Investor’s approach can be conservative (safety is of utmost importance),

enterprising (willing to take some risks) or speculative (willing to take high risk in

order to gain high returns). The investor’s approach is related to a host of personal

factors such as:

a) Age and family

b) Future responsibilities

Comparison of LIFE TIME II with other Investment Modules

1. PPF/EPF
a)Security- it provides a large amount of security because there is fixed high

returns which is promised at the time of creation of this fund.& the money is

invested in govt. securities.

b)Rate of return- It has moderate returns i.e 8% p.a which is comparatively

higher than other investment modules overt able in the market FDS etc.

c)Liquidity- It is not good term of liquidity as an investor can withdraw his

investment offer 6 years that too 50% of what he had invested in first 3 years.eg-a

person deposits Rs. 50,000 per year. The lock in period is 15 years & total amt. is

Rs. 7,50,000.

Case 1- if he wishes to withdraw money for some unknown liability then he can

withdraw only 50% of his investment of first 3 years that too after 6 year.

Amt deposited in 6 years= 50,000x6=Rs. 3,00,000

(amt deposited in first 3 years)= 150,000

50% of deposit after 3 years = 150,000x 50/100

Amt annually withdrawn = Rs. 750000.

Hence, this module has moderate liquidity.

d) Flexibility- As the lock in period is 15 years one has to incur heaving losses in

case the fund is surrendered before 15 years. Hence this is least flexible.

e)Tax Benefit – PPF provides tax free returns and the contributions made are also

eligible for income tax relief under section 88 within the prescribed limit

2) NSC’S:

It stands for National Saving Certificates .It is the scheme started by

government of India for encouraging saving habits of general public.

a) Security -It has a high rate of security as it promises to double your money

in eight years and seven months.

 b) Rate of return – It having moderate returns i.e. 8% compared to shares

and debentures.

c) Liquidity –It has moderate liquidity because it has a lock in period i.e. of 6

years very conservative mode of investment.

d) Flexibility – No flexibility as there is any provision to withdraw before

maturity i.e. after 6 years.

e) Tax benefits – It qualifies for tax rebate under sec88.

3. Mutual funds – principle involved

a) Large number of individuals pools their money in a single fund.

b) The funds are invested through the expertise of professional managers in

shares and securities.

c) The investments made are divided into segments called units.

d) One can buy or sell any number of units on current day price.

e) Undisclosed investments and profits.

Salient features

a) Security – it has moderate security because it is sensitive to fluctuations in

stock exchange.

b) Rate of return – it has moderate return i.e. 8%

c) Liquidity – it has high liquidity as it can be sold in stock exchange whenever

there is a need of cash.

Flexibility – as it has moderate flexibility because we can just get promised,

return even if the company is earning more

.Tax benefits –
 a) It does not have a front-end relief under section 88. it enjoys rear-end

relief under section 80L that means deduction up to a maximum limit

of Rs. 15000 out of which Rs. 3000 is dedicated to income from units

of mutual funds.

b) Under section 10(33) of income tax act, income distributed in new

plans of unit trust is completely tax-free.

c) For equity linked saving scheme issued by UTI of India mutual fund

subscription up to Rs. 10000 is allowed under section88 of income tax

act, 1961.

4. Bank deposit scheme –

a) Security – it has high security as bank is paying regular interest on your

savings and it is not subject to much change in interest rate.

b) Rate of return –

a) Current a/c - no interest

b) Saving a/c

1) Nationalized bank pay up to 3.5%

2) Cooperative banks pay half to 1% more

c) Term deposit a/c rates vary as per the period of investment but

roughly it is 8% for 3 years.

c) Liquidity – the liquidity is very high as whenever you can take your

money back but that again is not free from a considerable loss.

d) flexibility – There is no flexibility as compared to mutual funds and

insurance.

5. STOCKS:-
 Joint Stocks Company raises financial researches by issue of

shares. The amt. of capital to be raised is limited into units of equal value called

share. Those who subscribe to the capital are called shareholders.

Types of Shares:-

i) Equity shares-

ii) Preference shares.

The company pays divisional to the shareholder as per the profit earned by the

Company. It is not obligatory to pay divisional even if the Co. makes profit.

a) Security- Stocks have a minimum security because they are subject to

change with stock exchange Risk factor is nigh because the investment is

just in one company.

b) Returns- As it directly related to a performance of the Co. in share market

It can fetch very good returns best it can lead to no returns with the loss of

Principal amt at the other end.

(c )Liquidity: - They are highly liquid a that means it can be readily converted into

cash at any point of time.

(d) Flexibility: - It is very flexible in nature company as of investment. You can

change the amt. Of investment in them any time, as compared to PPF and NSC.

e)Tax Relief:- Front end relief -Nil

Rear end relief – Divisional amt is tax free within certain limits.

(6) Real Estate:-

(a) Security-- High security.

Since the value of land and building rarely depreciates rather it appreciates. As In

contract to shares, which are hardly, served.

(b) Returns: - It has moderate return because it has a very high Initial investment

comparative. To returns that are expected after a long time.

(c) Liquidity – It has a low liquidity. Because it is not always possible to find

appropriate market at a given time.

(d) Flexibility – There is as such no flexibility.

(e) Tax Benefits:- There is no relief under Taxation, Norms the Investments & the

returns there after attract nigh taxes to be paid.page.

7) Life –Time:

It is an investment cum Insurance module provided by PPCI. It

occupies major Portion of companies profit. It is a market diverse insurance

plan.

Security- It provides very high security that is the life of a person is hundred for a

substantial amount.

Returns:-It provides very high returns that are expected to be with in 12-15%

keeping in mind the growth of the Company IPRU. More over as it is market

linked plan its returns are subject to the rise in share market & now well the fund is

managed by the co. you are investing in.

Liquidity:- It is highly liquid (it can be convertible in to cash)Almost the full amt

of the policy value can be after lock in period of just 3 years.

Flexibility: - It is very. Flexible. As the amt of investment can be raised any time

in the form of Top up by just paying a nominal charge for it or you can also

surrender the policy after 3yrs of premium. & Get the full policy value .You may

never pay the premium after 3 yrs. & your life cover will continue. Till we age of
 70 years & your fund will keep on growing as per the performance of the

Company:

Tax Benefits:- It enjoys Tax Benefits under & 68(10(10(D), 80ccc .

Special Point:- It Provides Life cover along with all other benefits mentioned

above.

FINDINGS

1. I found that ICICI is not as accessible – as is required in the semiurben and

rural areas.

2. LIFE TIME II is having higher premium.

3. LIFE TIME II is having higher administration charges as compared with

other investment modules.

4. Lack of knowledge about customer requirements.

5. It is difficult for working class to spare time for training so these sessions

should be adjusted on weekends and holidays.

Swot analysis:

Strengths:

1. Liquidity: By definition the term liquidity means availability of funds as

and when required .now, this is a very important feature when it comes to

investment .LIFETIMEII as an investment module offers complete

 liquidity after a very short lock in period of 3-4 years .The proponent if

requires funds, he may withdraw any amount from the policy value as on

that date along with that he also has an option to continue the policy with

all the benefits intact.

2. TAX ADVANTAGE: One of the basic aims behind saving and investment

is tax benefits. LIFETIMEII as an insurance product offers benefits under

section 80C of income tax act. To add to that all the withdrawals, complete

as well as partials, attract no tax deductions that is the withdrawals are

totally tax free.

3. PREMIUM HOLIDAY: By premium we mean the amount that a person

pays in installments annually, half yearly etc. against a life insurance policy

. In the present scenario the uncertainties in life are variable and imminent.

Under a particular case the proponent might just not be able to pay his

annual premium. LIFETIMEII offers an option in such a case the proponent

may not pay the premium also. The policy cover continues even if the

premium is not paid.

4. FLEXIBLE SUM ASSURED: Our needs , securities as well as

insecurities vary with time and so should our life insurance and the cover

against risk that we take. LIFETIMEII again offers a brilliant solution by

giving an option to increase or decrease the sum assured or the risk covered

as required under specified conditions.

5. INVESTMENT SWITICHING OPTION: Returns against our

investment is one of the chief parameter. Fluctuations share markets and

lower interest rates in govt. securities don’t allow us to have consistent

higher returns on our investment .Thus we require an option to reap the

 benefits of favourable conditions. LIFETIMEII enables the proponent to

switch the funds in equity as well as as govt. securities .The name of the

funds being MAXIMISER (equity), PROTECTOR (govt.securities) ,

BALANCER (combination of govt.securities) .

6. WHOLE LIFE: LIFE TIME II offers life insurance cover to a person

right from the time he / she is born till the time he survives .Whereas in

other insurance products there is a specified entry age and also an age when

the policy ceases.

7. TRANSPARENCY OF INVESTMENT: Investment in private

companies attracts a bio question of faulty fund management. Here in

LIFETIMEII the various charges i.e. administration charges, Fund

management charges , mortality charges are disclosed right before the

premiums are collected.

8. FLEXIBILITY: Needs being a function of circumstances the person might

need some monetary help at any point of time.LIFETIMEII offers

flexibility to withdraw any amount out of the invested funds .After a

specified lock in period as much as 100% of policy value at that point of

time.

WEAKNESS:

1. Withdrawals reduce your death benefit by the same amount: This can

be explained with the help of an example i.e. If a person has deposited

Rs.18000 p.a and the lifecover is Rs.200000 for the first 3 yrs .Then in 4 th

year he has withdrawn Rs.10000 which will reduce the sum assured by

10000 i.e. Rs. 190000.

 2. No fixed return : As this is an market linked insurance plan, It does not

promises any fixed return as in case with NSC , PPF etc.

3. Initial premium is on the higher side: The premium to be paid initially is

rs.18000, which is slightly higher side than the other market players. The

premium amount cannot be less than 18000 in this product.

4. Initial fund management and administration charges are high: The

fund management and administration charges are different from option to

option. For Maxi miser it is 1.25%, for Balancer it is 1.00%, for Preserver

and protector it is 0.80%. Whereas other market players are charging

around 1.00% on average. They have the same Charges for every

investment option.

5. Sensitive to stock exchange: The unit values are subject to the ups and

down in stock market. Therefore if the share market is on hike then the unit

value is very high whereas in case of depression in share market the unit

value can go down.

Opportunities:

1. To create awareness among masses: This means that as most of the

population in India belongs to villages and the literacy % is very small in

villages. Therefore the company has the opportunity to create the awareness

about the importance of insurance among masses.

2. It can be used as an investment tool: This product is more of an

investment tool then as just a insurance policy. As when we invest in any

other investment modules our amount of investment increases. Here not

 only the investment provides higher returns, but it can be used as a short

term as well as long-term investment option.

3. It can be used as an asset-building tool: Here it means that this type of

investment provides security as that of\an asset. As assets are created to

provide security in case of any mishappening i.e. they can be sold and there

value is expected to appreciate in near future.

4. It can be used as an key man insurance policy: Key man insurance refers

to the insurance of the key person in a company .As this type of insurance

provides high tax saving benefits. Private companies generally prefer it.

Threats:

1. Competition from public sector: As the only and biggest competitor is

L.I.C, which has a wide range of products can further stress on, their

marketing activities and can attract a major market share.

2. Competition from private players: Now in this age of cutthroat

competition every big company is coming into insurance sector in

collaboration with foreign companies thereby making the relevance of the

concept of survival of the fittest. To capture more and more market share is

the sole aim of every upcoming or existing company. At this point of time

there are as many as 13 companies operating in the city (chandigarh) , and

still there is hope of few more to come at the end of the year.

3. Sensitive to taxation norms: In India most of the people take insurance

not for their security needs but they take it as an tax saving device
 .Therefore there is a high effect of taxation norms on insurance sector .e.g

if the slab of income free from tax moves upto Rs.150000 then the people

who were initially covered under tax are free from tax .So no tax saving no

insurance.

RECOMMENDATIONS

1. Making ICICI more accessible: Here I mean that as 80% of the

population of India is rural therefore ICICI must have there branches in

important towns such as AmbalaCantt, Jagadhari, not only this will

increase the awareness among people more over it will help the company to

acquire local market and cater to their needs effectively.

2. There should be a product with similar features and low initial

premium: A product like LIFE TIME II in suitable for all but the initial

premium, which cannot be less than 18000 rs. is on the higher side ,

therefore the company should derive a product with similar features but

with low initial premium so that it is affordable to normal service class.

3. Administration charges should be low as in comparison with mutual

funds, national saving certificate (N.S.C),etc.: The company should

lessen down the administration charges so that this product can have an

edge over other investment modules like N.S.C, P.P.F etc.

4. Market surveys should be conducted regularly so that to know about

customer demands and changing needs: The company should know

 about the customers changing needs and demands by conducting market

surveys which are helpful in innovating a product which suits the

customers requirements.

Limitations of study:

• Due to lack of time and other resources it was not possible to conduct

survey at a very large scale.

• Examining a small part of population i.e 100 individuals collected relevant

information.

• It was not possible to collect information regarding the recruitment of an

agent from other companies except ICICI as they kept it confidential

hence no comparisons regarding that could be made.

• No fixed return as this is an market linked insurance plan, It does not

promises any fixed return as in case with NSC , PPF etc.

 CONCLUSION

In India, insurance is generally considered as a tax-saving device

instead of its other implied long-term financial benefits. Indian people are prone to

investing in properties and gold followed by banks deposits. They selectively

invest in shares also but the percentage is very small—4.5%. Even to this day, Life

insurance market has become more vibrant . Smashing all doubts over the decision

to liberalize the industry, the overwhelming first year performance of the Indian

insurance sector is test case of a massive success story of private players entering

into the erstwhile state monopoly.

The top three insurance companies-ICICI Prudential Life Insurance Company,

HDFC Standard Life and Bajaj Allianz- combined managed to sell over two lakh

policies in a single year. ICICI Prudential, touted as the number one private life

insurer, scored on all three fronts-with the maximum number of policies sold (2.2

million policies), highest amount of premium collected (Rs. 11,608 crore).

Max New York Life scored second place with Rs. 43 crore Premium income

received on 64,000 whole-life policies sold. It has built business to the tune of
Rs.2,100 crore in its first year of operations. HDFC Standard Life, even as it

belongs to the December 2001 vintage when it and ICICI Prudential were the first

to commence operations, is placed at number three positions. HDFC Standard Life

has sold 32,000.policies against 44,311 lives. On a business portfolio of Rs.1,266

crore, it has received a premium income of Rs. 36, crore.

Of course, the numbers come no where closed to the state Incumbent-the Life

Insurance Corporation of India (LIC) –which sold 2.32 Crore policies in the fiscal

2002.The fiscal was marked by phenomenal growth rates for (LIC) as the number

of policies sold short up by over16 percent. the state player mopped up first

premium income from new policies sold to the extranet of R.S. 40,844.05 crore,

growth of 137 percent over its performance last fiscal. This is over an about the

regular yearly premium of R.s. 35,000 crore. At the same time, LIC has managed

to grow its books by underwriting an additional R.S. 1,92,575.36 crore of fresh

business. Tata AIG Life and non-life

combined has sold over five lakh policies in the first year. Birla Sunlife Insurance

has return a business size of R.S. 1,6,00 crore. Om Kotak Mahindra Life Insurance

received 13,000 .The contribution of the international partners has been in the

areas Of product development, laying down processor, training people. The broad

strategies as to what distribution change that one should look at,product Manu,

sport in the cop rate governance. There is a continuous streams of people coming

in from Africa to help us in putting the system in place, IT process, ways of doing

business in superior manner than what is being done today.

Insurance product has undergone a big change from the

days when LIC, s tied agency force a loan hawked products. In the days to come,

newentrants will implement multi channel strategies, the most significant being
banc assurance, cop rate agency for selling of insurance product in financial

conglomerates.

The portfolio game has shifted and the average size of policies bought has

increased. The reason behind buying a risk cover has shifted .People are not

buying cover for the sake of tax break. They looking at safe guarding themselves

from the risk of dying to soon or living too long .Whole life and term insurance

policies are increasingly becoming more popular. Pre-liberalization, and

endowment and money back covers used to account for 82 to 85 percent of

policies sold by LIC.While things are going gung-ho for the industry as a hole,

there Are quite a few challenges a head before new players can hope to complete

With the state incumbent.

The first task is the new player build up reach the expend their geographical

spread. Only smalls portion of the country has been taped so far. Building the

agency force still a channel in terms of finding right people, training them to meet

the high industry standard today companies run on premium income ,which is the

cash flow. As a result more policies mean more course as cover need to be

serviced. The univalve per policies is a key element and gets reflected in the coast

ratio. On the other hand, if risk are too concentrated are need to guard against the

same, as it will mean writing many more policies to match the high claim should

one occur in the case of a high some assured policy.

The awareness level of Insurance has also brought about a certain amount of

selling and Marketing discipline. This is reflected in the fact that selling of life

cover is not skewed to March pressure, where earlier LIC used to repot 40 percent

of total Year’s figure in the month alone. Now selling spread across a wider Period

of time.
 Questionnaire

Name

Add

Age:

 20-30  40-50
 30-40  above 50

Sex:
 Male  Female

Occupation: -_____________________

Telephone No: -___________________

Mobile No.: -_____________________

Education: -
 Undergraduate  PG
 Graduate

Marital Status
 Single
 Married  No. Of child/children

Income group
 Up to 75,000 p.a.  1,50,000-2,50,000 p.a.
 75,000-1,50,000 p.a.  2,50,000 p.a.

1. What are the various avenues you invest in?

 Savings account
 National saving
certificate (NSC)  Fixed deposits (FD)
 Insurance plans  Provident funds (PF)
 Bonds  Shares
  Mutual funds

2. What factors you consider most important ?

 Safety Liquidity
 Profit/growth Tax Benefits
 Regular returns

3. What is your investing pattern?

 I invest a fixed amount each  I invest whenever I have a
month surplus amount
 I invest a fixed amount each year

4. Have you heard of ICICI prudential life insurance company?

 Yes  No

5 What do you think of insurance as an investment tool?

 It is very necessary  As a device for securing the
future
 It gives less returns  It is a kind of forced saving

6 What other areas do you think insurance can help you?

 Savings  Wealth creation
 Secure your future  Secure the future of your
 Investing surplus family
 Provides tax benefits  As a source of regular
income
7 What is the period of liquidity to invest in?

 10 years  Three year

 5 years  Less than three years

8 Are other your family members insured?

 Yes o No

9 Would you like to any insurance schemes in future

 Yes  No
 BIBLIOGRAPHY

Printed Sources:

 ICICI Prudential Life Insurance Company “Career

Launch Program” manual.

 . ICICI Prudential Life Insurance Company Unit

Linked Product Guide.

 .Life Insurance Agents Pre- Licensing Course By RNIS

College of insurance.

Articles:

JAIN, ARUN KUMAR, “ LIC Loses grip over cities, thrives in villages’’ ,JUNE,2004.

Brochures:

 ICICI Prudential Life Insurance Company Ltd., May 2005.

 Life Insurance Company Ltd.

 Birla Sunlife Life insurance Company

 Hdfc Standard Life Insurance Company

 Kotak Mahindra Life Insurance Company

 Bajaj allianz Life Insurance Company

WEB LINKS

www.google.com

www.licindia.com

www.iciciprulife.com

www.birlasunlife.com

www. KotakMahindra.com

www.knowlegedigest.com