2. COMPANY PROFILE 2.1.

History about HDFC HDFC Standard Life is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC), Indias leading housing finance institution, Standard Life policy provider and a leading provider of financial services in the United Kingdom. HDFC Standard Lifes product portfolio comprises solutions, which meet various customer needs such as Protection, Pension, Savings, Investment, and Health. Customers have the added advantage of customizing their Plans, by adding optional benefits called riders, at a nominal price. The company currently has 25 retail and 4 group products in its portfolio, along with five optional rider benefits catering to the savings, investment, protection and retirement needs of customers. HDFC Standard Life continues to have one of the widest reaches among new insurance companies through a network of 595 offices serving over 720 cities and towns across the country. The company has also increased

its depth in existing markets with a strong base of more than 207,000 Financial Consultants. 2.2. HDFC Limited

HDFC Limited has set benchmarks for the Indian housing finance industry. Recognition for the service to the sector has come from several national and international entities including the World Bank that has lauded HDFC as a model housing finance company for the developing countries. HDFC has undertaken a lot of consultancies abroad assisting different countries including Egypt, Maldives, and Bangladesh in the setting up of housing finance companies. Customer Service and satisfaction has been the mainstay of the organization. HDFC Limited has assisted more than 3.3 million families to own a home, since its inception in 1977 across 2400 cities and towns through its network of over 250 offices. It has international offices in Dubai, London and Singapore with service associates in Saudi Arabia, Qatar, Kuwait and Oman to assist NRIs and PIOs to own a home back in India. 2.3. Standard Life Group

The Standard Life group has been looking after the financial needs of customers for over 180 years. It currently has a customer base of around

7 million people who rely on the company for their insurance, pension, investment, Banking and health-care needs. Its investment managers are currently administers 125 billion in assets. It is a leading pensions provider in the UK, and is rated by Standard & Poor as strong with a rating of A+ and as good with a Rating of A1 by Moodys 2.4. Market Share

HDFC Ltd. Holds 72.43% and Standard Life (UK Holding) Ltd. holds 26.00% of equity in the joint venture, while the rest is held by others. 2.5. HDFCs Vision

The most successful and admired life insurance company, which means that it is the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the Industry.
2.6.

HDFCs Values

Values that they observe while working: Integrity Innovation Customer centricity People Care One for all and all for one

 Team work Joy and Simplicity 2.7. Products

HDFC Lifes product portfolio comprises solution, which meet various customer needs such as Protection, Pension, Savings, Investment and Health. 2.8. Competitors

The major competitors are: ICICI Bajaj Alliance 2.9. Departments

A business is normally organized by its function and its aspects are divided into smaller departments in order to operate effectively. They have departments at HDFC Life that specialize and employ people with expertise in their areas. They communicate well with each other and with suppliers and customers, to operate effectively. The departments of company are as follows:

Actuarial , ERP , Business & service Excellence, Agency Channel , Finance & Accounts , Medical, Audit & Risk Management, Group Sales , Operations, Banc assurance & Alliances, HR & Administration , RSBD, Business System & Technology , Investment, Strategy & product, Channel Development, Legal & compliance, Underwriting, Claims, Marketing and Direct Channels.
2.10.

Organization ChartChairperson

C.E.O

M.D.

Agency Head

Operation Head

Underwriter

Agency Team Operation

HR Head

ZM

Senior HR

AVP

AVP

TM

TM

TM

BM

BM

BM

Manager

Agent 2.11. AWARDS WON The recent awards won by the company are: Best companies to work for in India 2010 'Young Star Super' Voted 'Product of the Year 2010' 'The Ingenious 100 2009' Award Diamond EDGE Award 2009.

LITRATURE REVIEW History In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the
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British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Association of India. The General
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Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices. In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the General Insurance Business (Nationalization) Act, general insurance business was

nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973. This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of reopening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector. The objective was to complement the reforms initiated in the
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financial sector. The committee submitted its report in 1994 wherein, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies are allowed to enter by floating Indian companies, preferably a joint venture with Indian partners. Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.
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In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002. Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country. The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the countrys GDP. A welldeveloped and evolved insurance sector is a boon for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country. 4.1.Major players in insurance of India Insurance industry in India comprised mainly of only two state insurers as follows Life Insurers

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Life Insurance Corporation of India (LIC) General Insurers 1. General Insurance Corporation of India (GIC) GIC had four subsidiary companies, are as follows. 1. The Oriental Insurance Company Limited 2. The New India Assurance Company Limited
3.

National Insurance Company Limited

4. United India Insurance Company Limited In addition to above the following companies have been entered into Insurance business. Life Insurers Public sector Life Insurance Corporation Of India Private sector 1. Bajaj Allianz Life Insurance Company Limited 2. Birla Sun Life Insurance Co. Ltd 3. HDFC Standard Life Insurance Co. Limited

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4. ICICI Prudential Life Insurance Co. Limited 5. ING Vysya Life Insurance Company Limited 6. Max New York Life Insurance Co. Limited 7. MetLife Insurance Company Limited 8. Om Kotak Mahindra Life Insurance Co. Ltd. 9. SBI Life Insurance Company Limited 10.TATA AIG Life Insurance Company Limited 11.AMP Sanmar Assurance Company Limited 12.Dabur CGU Life Insurance Co. Pvt. Limited 13.Reliance Life Insurance Co. Ltd. 14.Aviva Life Insurance Co. 15.Sahara India Life Insurance Co, Ltd. 16.Shriram Life Insurance Co, Ltd. 17.Bharti AXA Life Insurance Company Ltd. 18.Future Generali Life Insurance Company Ltd. 19.IDBI Fortis Life Insurance Company Ltd. 20.Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd 21.AEGON Religare Life Insurance Company Limited. 22.DLF Pramerica Life Insurance Co. Ltd. 23.Star Union Dai-ichi Life Insurance Comp. Ltd.

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General Insurers Public Sector 1. National Insurance Company Limited 2. New India Assurance Company Limited 3. Oriental Insurance Company Limited 4. United India Insurance Company Limited Private Sector 1. Bajaj Allianz General Insurance Co. Limited 2. ICICI Lombard General Insurance Co. Ltd. 3. IFFCO-Tokio General Insurance Co. Ltd. 4. Reliance General Insurance Co. Limited 5. Royal Sundaram Alliance Insurance Co. Ltd. 6. TATA AIG General Insurance Co. Limited 7. Cholamandalam General Insurance Co. Ltd 8. Export Credit Guarantee Corporation 9. HDFC Chubb General Insurance Co. Ltd. Reinsurer General Insurance Corporation of India

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Fundamental Concept

16

What is insurance? Insurance is a contract whereby, in returns 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 unforeseen events. The term risk is used describe all the accidental happenings, which produce a monetary loss. Insurance is the method in which large number of people exposed to a similar risk makes contribution to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basic of insurance. The losses of an individual are distributed over a group of individuals. The risk becomes insurable if the following requirements are complied with: The insured must suffer financial loss if the risk operates. The loss must be measurable in money. The objective of the insurance contract must be legal. The insurer should have sufficient knowledge about the risk he accepts.

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Types of insurance

Life insurance: it covers individual only, to be more precise their death only.

Non

life

insurance

(general

insurance):

it

covers

individuals as well as non-living things. Except death it indemnifies a person for any damages to his health or to the property belonging to him. Benefits of life insurance Replacement of income: life insurance products can provide support to the family and take care of the familys financial requirements. It provides a lump sum or periodic payments to help replace the income stream, in case of an unfortunate event or an untimely death of the bread earner.

Coasts of education: to support your child with a sound educational background, and to help him/ her to achieve his/her dreams, Life insurance products provide you with a solution, whether you are there or not.

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Retirement expenses: retirement is an age when an individual has fulfilled almost all his responsibilities and looks forward to relaxing. Life insurance products can help you lead a secure and tension free retired life by assuring that you get guaranteed pension.

Mortgage and Debt protection: with increasing consuming and ever rising demands, loans and debts are now part of life. Life insurance products help you ensure that your family is not duly burdened with their repayments, in case of an unfortunate events or an untimely demise of the breadwinner.

Hardships protection: life insurance provides a sense of security to the income earner and to his/her family. Buying life insurance frees the individual from various unnecessary financial burdens that can otherwise make one spend sleepless nights.

ULIP ULIP is a market-linked life insurance plan, which invests the premium money in various proportions in the equity and debt markets. In effect, this ensures that the returns on such plans are linked to the performance of the markets while also
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offering the individual an insurance cover at the same time. This also provides a handy instrument to the investor to save money as and when he wants. ULIP came into play in the 1960s and became very popular in Western Europe and Americas. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers. As time progressed the plans were also successfully mapped along with life insurance planning, financial needs, financial planning for childrens future and retirement planning. Features of ULIP ULIP is different from other insurance and investment plans as it offers the following distinguishing features: Investment and savings Flexibility Investment options Transparency Option to take additional cover against Death due to accident
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 Surgeries Liquidity Tax Planning How Unit- Linked Insurance Plans do against? Unit-linked insurance plans, ULIPs, are distinct from the more families with profits policies sold for decades by the Life Insurance Corporation. With profits policies are called so because investment gains are distributed to policyholders in the form of a bonus announced every year. ULIPs also serve the same function of providing insurance protection against death and provision of long-term savings, but they are structured differently. In with profits policies, the insurance company credits the premium to a common pool called the life fund after setting aside funds for the risk premium on life insurance and management expenses. Every year, the insurer calculates how much has to be paid to settle death and maturity claims. The surplus in the life fund left after meeting these liabilities is credited to policyholder accounts in the form of a bonus. In a ULIP too, in a fund that invests money in stocks or bonds. The value of the unit is determined by the total value of all the
21

investments made by the fund divided by the number of units. If the insurance company offers a range of funds, the insured can direct the company to invest in the fund of his choice. Insurance usually offer three choices- an equity fund, balanced fund and a fund which invests in bonds. In both with profits policies as well as unit- linked policies, a large part of the first year premium goes towards paying the agents commissions. How ULIP is different from term insurance? A term plan is a pure risk cover plan without any maturity benefits. This is because there is no savings element in the premium being charged to the individual; hence maturity benefits do not accrue. The insured gets the benefits only in case of death before maturity of policy. Also a term insurance plan does not give any option to the person insured for saving and earn returns as he pays the premium only sufficient for his life cover, and he does not get any returns on it. A term insurance plan also requires the premium to be paid for a particular term, which is to be fixed at the time of taking policy.

22

The investor keeps getting returns on compound basis according to the market movement along with an insurance cover. ULIP also provides flexibility of choosing the term of payment of premium and varying as per the requirement of the investor. Working of a Unit Linked insurance plan As an ULIP earns returns for investor on the money he has paid as premium and also provides life coverage; the premium paid is treated in the following ways;

Mortality charges: the insurance company to cover the risk of an eventuality to the individual incurs mortality charges. The mortality expenses differ depending on the age of the individual and the sum assured they are higher for a higher age and sum assured.

Sale and administration expenses: these expenses are incurred by the insurance company for operational purposes and recovered from the premium that the individual pays towards costs incurred to run the insurance business on a daily basis are example of such expenses.

23

Savings or investment component: this portion of the premium is invested by the life insurance company in various investment avenues like government securities, bonds, money market instrument and equities in varying proportions. The savings component is what helps generates the returns which insurance companies pay to the policy holder by way of bonuses and the maturity amount. Tem plans are pure risk cover plans. The premium charged by term plans cover only the mortality charges, sales and administration expenses. This is no saving element in the premium; hence no maturity amount accrues. It is also due to this reason that term plans are the cheapest form of life cover available.

Products of HDFC Standard Life HDFC SL Crest Any uncertainty should not affect your plans. Be it of life, or of markets. You want to secure happiness for yourself and your loved ones. We present HDFC SL Crest - Insurance cum investment plan that provides valuable financial protection to
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your family when needed the most along with an investment option for certainty of highest NAV along with a guarantee on returns. So that when you reap the returns of life, they are on crests not on lows. In this plan you can choose to invest in either of two investments options- highest NAV guarantee fund or free asset allocation option.

Features

; Advantages
Choice

of two investment options - highest NAV guarantee fund or

free asset allocation option.

25

Benefit On

of minimum guaranteed NAV of Rs. 15 at maturity.

maturity you will receive the fund value as per the investment

option selected.
This

plan provides valuable protection to your family in case you are

not around. In case of your unfortunate demise during the policy term, we will pay the amount higher of your sum assured (less partial withdrawals) or your total fund value to your family. Please refer to product brochure for details.
This

plan can be taken by filling short medical questionnaire, which

may not require you to go for medicals. Kindly refer to the product brochure for details.
Tax

benefits are offered under section 80c and 10(10d) of the income

tax act, 1961

1.

HDFC Life Sampoorn Samridhi Insurance Plan

Sukh aur Samridhi. Joy, happiness and prosperity are your ultimate desire, not only for yourself but also for your loved ones. Life insurance plans not only let you secure financial future of your loved ones, they also assist you in attaining prosperity. With HDFC Life Sampoorn Samridhi Insurance Plan, you can be financially prepared for the future and can fulfill your
26

dreams & aspirations. This plan offers financial protection to your loved ones when they need it the most, enabling you and your family live life with peace of mind and sar utha ke! Features

Advantages

27

Financial

protection to your loved ones by way of a lump sum

payment in case of your unfortunate demise during the policy term. Sum assured plus attached bonuses will be paid to the nominee. In case of death due to accident, an additional Sum Assured will be paid. The policy will terminate and no further benefits will be payable.
Choice

of Maturity Benefit Option- on survival till maturity , you

can choose maturity benefit option

Enhanced

Cash Option Sum Assured + Reversionary Bonus +any

interim bonus + any terminal bonus + Enhanced Terminal Bonus. Policy terminates and no further benefits are payable.
Enhanced

Cover Option - Sum Assured + Reversionary Bonus + any

Interim bonus + any Terminal Bonus payable on maturity + Additional Sum Assured on unfortunate death of life assured upto age of 99 years.
Tax

benefits under sections 80C and 10(10D) of the Income Tax 1961 subject to the provision contained therein

Act,

For more details on risk factors, terms and conditions, please read the Product Brochure carefully and/or consult Financial Consultant before taking a decision.

2.

HDFC SL ProGrowth Flexi

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Nothing should hold you back in life. Uncertainties of life can throw best laid plans and aspiration off gear. Its prudent to be prepared and life insurance solutions enable you to build your savings and enjoy life cover. With HDFC SL ProGrowth Flexi, you have a smart savingscum-insurance plan that will enable you to simply provide the finest for your loved ones. In this plan you also enjoy life insurance coverage so that your loved ones financial future is secured even in your absence

Advantages

This plan provides valuable protection to your family in case you are not around. In case of your unfortunate demise during the
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policy term, we will pay the greater of the Sum Assured or your total fund value to your nominee.

You can choose any of the following 2 plan options as per your requirement.
o

Life Option = Death Benefit Extra Life Option = Death Benefit + Accidental Death

Benefit

On maturity, you can take the Fund Value at the prevailing unit prices as lump sum or you can opt for settlement option.

You have flexibility of

o

Switching: You can move your accumulated funds

from one fund to another anytime

o

Premium Redirection: You can pay your future

premiums into a different selection of funds, as per your need

Tax benefits are offered under section 80C and 10(10D) of the Income Tax Act, 1961

Introduction30

We understand that creating and effectively managing our wealth is just part of the equation. It's also important to preserve it. Through the use of insurance strategies, it can help us to preserve our wealth during our lifetime, and protect the value of our estate for our family and other beneficiaries. Insurance strategies help us to maximize the wealth.

Estate Creation and PreservationAn individual can offset costs that are incurred at death and preserve his/her estate by having insurance proceeds pay them for him. Taxes, liabilities, estate-related and other future costs can all be offset by his permanent insurance coverage. By taking advantage of the preferred status of Tax-Exempt Life Insurance, he can maximize the value of his assets and maximize the value being transferred to the next generation. Living Benefits insurance is also vital to estate preservation, by ensuring funds are available which require them at a time of illness. Tax MinimizationTax-exempt insurance can eliminate the annual taxes, which are payable on investment growth, as well as those payable after death. Individuals
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tired of being punished for strong earnings may appreciate this TaxProtector opportunity. The long-term value of these products is that their earnings can often greatly eclipse what would otherwise be earned through regular investing. Estate Maximization and ProtectionIf part of an individual portfolio is held in GICs, Canada Savings Bonds or a bank account, he has probably never given a second thought to market fluctuations. Sticking to a conservative investment strategy can lead to peace of mind in the short term, but it may put him at risk in the long run. Essentially, he will risk outliving his retirement savings. Generally speaking, one way to ensure that he has enough money to meet his retirement needs is to diversify his portfolio. He can get the security of a GIC and the performance potential of the stock market without needlessly risking his hard-earned savings with Segregated Funds. Income EnhancementCertain solutions using insurance products can provide a supplemental stream of cash, thereby Enhancing Retirement Income. The net income derived from this strategy may be significantly higher than what is achievable with traditional fixed income vehicles, especially during times of low interest rates.

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WEALTH CREATION IN CORPORATEEvery day, an individual make crucial business decisions affecting the financial health of his business organization. And every one knows how important it is to have the best possible services and products to help effectively to manage finances. Making the right financial decisions is a big responsibility. Some of the best opportunities for small corporations, including holding companies, come from using tax-exempt life insurance. It is a taxefficient means of transferring wealth out of a corporation into the hands of the next generation after the death of policy holder. An important part of preparing our business for continued success is to prepare it for the unexpected. And so for these purpose many business protection strategies can be used: Funding Buyout AgreementsIn the case of partnerships, the death or disability of one partner can have a devastating effect on the survival of a business. Insurance can provide an excellent method of funding buyout agreements so that the remaining partner takes full control of the business and the surviving family is properly compensated.

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Shared OwnershipFor companies who wish to retain top employees, the shared ownership of a permanent insurance policy can be an attractive opportunity. It protects the company against the death of the employee, and motivates that person to remain with the firm through the enticement of an attractive, low-cost retirement asset. This arrangement can create a winwin situation for everyone.

Minimizing Corporate TaxesIf corporate assets are invested in fixed income, then an insurance strategy can not only reduce its taxable income but it will lower the value of the business by the amount of the investment, thereby reducing the inevitable capital gains tax liability. Maximizing Corporate AssetsBy taking advantage of tax-deferred growth inside a Universal Life or Whole Life policy, corporate assets can avoid accrual taxation and grow to a much greater value than if they were invested in a regular account. Not only that, but upon death, most, if not all, of the proceeds can be paid out of the corporation tax-free. Ordinarily they would be paid out as
34

taxable dividends, requiring approximately one third of the value to be paid in taxes. Executive Life Insurance PlanningExecutive life insurance enables you to provide managers and executives with a supplementary benefit package. In this instance, both you and your executive purchase a tax-exempt life insurance policy with your executive named as the insured. Both of you will share the benefits. This form of insurance provides protection for an executive's family, while you benefit from an investment offering tax-deferred growth. Business Succession PlanningA business succession plan can help protect your business when an owner-shareholder retires or passes away. Elements of a successful business succession plan include buy-sell agreements, a Will and powers of attorney. A buy-sell provision is a shareholder agreement that allows for the orderly transfer of shares in the event of disability, death or retirement of a shareholder. Upon the death of a shareholder, the buy-sell agreement generally instructs the corporation to purchase the shares of the deceased. Insurance is a cost-effective way of providing the necessary funds to carry out those instructions.

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Key Person InsuranceMany companies, public or private, large or small, often rely on the skills and contributions of a single person. Proficient with all levels of the firm's operations, respected by staff and trusted by clients, such key individuals play a crucial role in the company's success. The sudden departure of a key person can create a void, difficult, if not near impossible and costly, to fill. Taking out life insurance on the key person, or people, in your organization can help mitigate these costs.

CONTRIBUTION IN INDIAN ECONOMYInsurance is of Rs. 400 billion businesses in India, and together with banking services adds about 7% to Indias GDP. Gross premium collection is about 2% of GDP and has been growing by 15-20% per annum. India also has the highest number of Life insurance policies in force in the world, and total investible funds with LIC are almost 8% of GDP.

36

Research Methodology Objective: 1) 2) To study how does insurance helps in wealth creation. To understand insurance as a saving and wealth creating

instrument 3) 4) To examine the financial ethics of Insurance sector To verify awareness of people about Insurance policy

Hypothesis: 1) 2) Life Insurance is one of the Taxes saving device in India. Life Insurance is an Investment option in India.

37

Scope of the Project: The project is related Insurance, Wherein investors can invest their money to get the good returns. An investment has to be planned according to their risk bearing capacity and as well as other factors like investment objectives, returns expected, taxation, age factor, etc. Project consists of case studies in the form of individual profile. Wherein the various aspects of the individuals current status are taken into consideration and an effort is done to provide him with the best investment solution for his current state of finances. Limitations: 1) 2) Limited time Lack of accurate data

Sources of dataSample size Sampling type Method used 50 Exploratory Questionnaire

38

Primary sourceDirect personal interview and with the help of questionnaire framed with considering objectives. Secondary sourceData is taken from some published articles, papers, books and organization website.

DATA ANALYSIS Deduction and Exemption

Income Tax Section Gross Annual Salary How Much Tax can You Save? HDFC Standard Life Plans

39

Sec. 80c

Across all income slabs Across all income slabs

Up to Rs. 30,900/- saved on investment of Rs. 1,00,000/Up to Rs. 30,900/- saved on investment of Rs. 1,00,000/-

All our Life insurance Plans

Sec. 80CCC

All our Life insurance Plans

Sec. 80D

Across all income slabs

Up to Rs. 9,270/- saved on investment of Rs. 30,000/(inclusive of Rs. 15,000/- towards health insurance of parents)

All our Health insurance Plans

Upto Rs. 10,815/- saved on investment of Rs. 35,000/(inclusive of Rs. 20,000/- towards health insurance of parents who senior citizens)

All the Health insurance riders available with our Conventional Plans

Rs. 41,715/Total Savings Possible Rs.30,900/- under Sec. 80C and Sec.80CCC Rs.9,270/- or Rs.10,815/- under Sec.80D

Above figures calculated for a male with gross annual income exceeding Rs. 5,00,000/Sec.10 Under Sec.10(10D), the benefits received by you are completely tax-free

Applicable to premium paid for all Health insurance Plans, Critical illness Benefit, accelerated sum Assured and waiver of premium Benefit. ** These calculations are illustrative and based on our understanding of current tax legislations.

Source: http://www.hdfclife.com/KnowledgeCentre/TaxCenter.aspx

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Bibliography Books:

C.R. Kothari Research Methodology & Techniques Insurance Principles and Practice

Websites: Hdfclife.com irda.

Annexure SURVEY QUESTIONNAIRE INSURANCE AWARENESS Name of person: Age: Address: Status: Married/Unmarried:
41

Sex: Male /Female

Education: Occupation: 1) What is your average monthly income? Less than 5000 30000 50000 5000-15000 50000 & above. 15000 30000

2) Do you save regularly? Yes No

3) If Yes, which of the following pattern of savings do you use? Recurring Deposit Postal Savings Fixed Deposit Insurance PPF

4) Do you have any Insurance on your life? Yes No

5) What are viewpoints on life insurance? Protection Tool Saving Option Tax Savings Instrument Others (please specify)

6) What plan you have taken & reasons of buying them?

42

7) Do you know that life insurance can protect your family against the burden of repayment of any outstanding loans? Yes No

8) Do you know that life insurance can help you to create wealth for yourself & your Family? Yes No

9) Do you know that the investment insurance can contribute in countrys economic development, which will indirectly help in your economic development? Yes No

10) If you dont have any policy would you like to invest in insurance? Yes No

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44