Final Project Report on MARKETING

7/29/2019 Final Project Report on MARKETING

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DECLARATION

I Sarita Nanda , here by declare that this project report entitled

AGENCY INSURANCE SALES AT METLIFE is an

original piece of work & is the result of my work on behalf of

METLIFE INDIA INSURANCE COMPANY LTD.

This project report has not been submitted to any other university

or institute for the award of any degree or diploma.

Sarita nanda

BJB AUTONOMOUS COLLEGE

Bhubaneswar

ACKNOWLEDGMENTAt first I would like to thank the Almighty, for his blessing.


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I wish to express my appreciation and thanks to all those with whom I have

had the opportunity to work and whose thoughts & insights have helped me

in furthering my knowledge and understanding of the subject

Every page of this report reminds me about the moral support and guidance

that was bestowed upon me by my esteemed Guide, professors, friends and

family members throughout the duration of the project.

My sincere gratitude goes to my company Project guide Mr.Raghunandan

Pattanaik, Training Manager METLIFE without whose valued guidance,

encouragement and inspiration the completion of this project would ever have

been possible.I also thank the sales team of METLIFE for their support

during my project.

Last but not least, I would like to express my gratefulness to my faculty

project guide Prof.Prabhat Kumar Choudhury, HOD of IMBA for guiding

me through out the project spending his precious time and sharing his

valuable knowledge.

I am unable to mention many others who have helped me greatly but it gives

immense pleasure to appreciate and thanks all those without whose

encouragement and help this project would never have been completed.


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PREFACE

PREFACE

With largest number of life insurance policies in force in the world, Insurancehappens to be a mega opportunity in India. Its a business growing at the rateof 15-20 per cent annually and presently is of the order of Rs 450 billion.


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Together with banking services, it adds about 7 per cent to the countrysGDP. Gross premium collection is nearly 2 per cent of GDP and fundsavailable with LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance coverwhile health insurance and non-life insurance continues to be belowinternational standards. And this part of the population is also subject to weaksocial security and pension systems with hardly any old age income security.This itself is an indicator that growth potential for the insurance sector isimmense.

A well-developed and evolved insurance sector is needed for economicdevelopment as it provides long term funds for infrastructure developmentand at the same time strengthens the risk taking ability. It is estimated thatover the next ten years India would require investments of the order of onetrillion US dollar. The Insurance sector, to some extent, can enableinvestments in infrastructure development to sustain economic growth of thecountry.

Insurance is a federal subject in India. There are two legislations that governthe sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurancesector in India has come a full circle from being an open competitive marketto nationalisation and back to a liberalised market again. Tracing thedevelopments in the Indian insurance sector reveals the 360 degree turnwitnessed over a period of almost two centuries.


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INTRODUCTION

INTRODUCTION

Risk and uncertainty are incidental to human life and his properties. It causeshuge losses which arise from accidents, destruction of property, fire, floods,earthquakes and many other natural calamities. Similarly modern business


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enterprises are also exposed to various types of risks, uncertainties andunpredictable events which involve the loss of one or other kind. If such losshappens in the business, the business becomes crippling, finding it hard tosurvive, grow and exist in the face of cut throat competition. Thus the

business enterprises need protection against the probable chances of futureloss. the same is in case of farmers .They invest in land ,labor and capital witha hope to produce different crops .But it may so happen that due to somereason or other they are not in a position to grow their products .Consequentupon they go to the extent of committing suicides. In all these circumstanceswe can think of insurance which is simply a mechanism that helps to reducethe affect of such unwanted situation to some extent. Thus insurance doesnteliminate loss arising from uncertain events but protects against risk anduncertainty .One cannot prevent loss arising out of perils. But one can try toreduce its impact by insurance. Insurance components the losses and spreadsthe losses over a large number of people who insure themselves against therisk and there by protect their life and properties.

INDIAN INSURANCE MARKET

Historical Perspective

The history of life insurance in India dates back to 1818 when it wasconceived as a means to provide for English Widows. Interestingly in thosedays a higher premium was charged for Indian lives than the non-Indian livesas Indian lives were considered more riskier for coverage.

The Bombay Mutual Life Insurance Society started its business in 1870. Itwas the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. TheGeneral insurance business in India, on the other hand, can trace its roots tothe Triton (Tital) Insurance Company Limited, the first general insurancecompany established in the year 1850 in Calcutta by the British. Till the end

of nineteenth century insurance business was almost entirely in the hands ofoverseas companies.


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Insurance regulation formally began in India with the passing of the LifeInsurance Companies Act of 1912 and the provident fund Act of 1912.Several frauds during 20's and 30's sullied insurance business in India. By1938 there were 176 insurance companies. The first comprehensive

legislation was introduced with the Insurance Act of 1938 that provided strictState Control over insurance business. The insurance business grew at a faster

pace after independence. Indian companies strengthened their hold on thisbusiness but despite the growth that was witnessed, insurance remained anurban phenomenon.

The Government of India in 1956, brought together over 240 private lifeinsurers and provident societies under one nationalised monopoly corporationand Life Insurance Corporation (LIC) was born. Nationalisation was justifiedon the grounds that it would create much needed funds for rapid

industrialization. This was in conformity with the Government's chosen pathof State lead planning and development.

The (non-life) insurance business continued to thrive with the private sectortill 1972. Their operations were restricted to organized trade and industry inlarge cities. The general insurance industry was nationalized in 1972. Withthis, nearly 107 insurers were amalgamated and grouped into four companies-

National Insurance Company, New India Assurance Company, OrientalInsurance Company and United India Insurance Company. These were

subsidiaries of the General Insurance Company (GIC).

Important milestones in the life insurance business in India:

1912: The Indian Life Assurance Companies Act enacted as the first statute toregulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the governmentto collect statistical information about both life and non-life insurance

businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Actwith the objective of protecting the interests of the insuring public.


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1956: 245 Indian and foreign insurers and provident societies taken over bythe central government and nationalised. LIC formed by an Act ofParliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from theGovernment of India.

Important milestones in the general insurance business in India

are:

1907: The Indian Mercantile Insurance Ltd. set up- the first company totransact all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association ofIndia, frames a code of conduct for ensuring fair conduct and sound business

practices.

1968: The Insurance Act amended to regulate investments and set minimumsolvency margins and the Tariff Advisory Committee set up.

1972: The general insurance business in India nationalised through TheGeneral Insurance Business (Nationalisation) Act, 1972 with effect from 1stJanuary 1973. 107 insurers amalgamated and grouped into four companies-the National Insurance Company Limited, the New India AssuranceCompany Limited, the Oriental Insurance Company Ltd. and the United India

Insurance Company Ltd. GIC incorporated as a company.

INSURANCE SECTORS REFORMS


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In 1993, Malhotra Committee- headed by former Finance Secretary and RBIGovernor R.N. Malhotra- was formed to evaluate the Indian insuranceindustry and recommend its future direction. The Malhotra committee was setup with the objective of complementing the reforms initiated in the financial

sector. The reforms were aimed at creating a more efficient and competitivefinancial system suitable for the requirements of the economy keeping inmind the structural changes currently underway and recognising thatinsurance is an important part of the overall financial system where it wasnecessary to address the need for similar reforms. In 1994, the committeesubmitted the report and some of the key recommendations included:

i) StructureGovernment stake in the insurance Companies to be brought down to 50%.Government should take over the holdings of GIC and its subsidiaries so that

these subsidiaries can act as independent corporations. All the insurancecompanies should be given greater freedom to operate.

ii) CompetitionPrivate Companies with a minimum paid up capital of Rs.1bn should beallowed to enter the sector. No Company should deal in both Life andGeneral Insurance through a single entity. Foreign companies may be allowedto enter the industry in collaboration with the domestic companies.Postal Life Insurance should be allowed to operate in the rural market. Only

one State Level Life Insurance Company should be allowed to operate in eachstate.

iii) Regulatory BodyThe Insurance Act should be changed. An Insurance Regulatory body should

be set up. Controller of Insurance- a part of the Finance Ministry- should bemade independent

iv) InvestmentsMandatory Investments of LIC Life Fund in government securities to bereduced from 75% to 50%. GIC and its subsidiaries are not to hold more than


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5% in any company (there current holdings to be brought down to this levelover a period of time)

v) Customer Service

LIC should pay interest on delays in payments beyond 30 days. Insurancecompanies must be encouraged to set up unit linked pension plans.Computerisation of operations and updating of technology to be carried out inthe insurance industry.

The committee emphasized that in order to improve the customer servicesand increase the coverage of insurance policies, industry should be opened upto competition. But at the same time, the committee felt the need to exercisecaution as any failure on the part of new players could ruin the publicconfidence in the industry. Hence, it was decided to allow competition in a

limited way by stipulating the minimum capital requirement of Rs.100Crores.

The committee felt the need to provide greater autonomy to insurancecompanies in order to improve their performance and enable them to act asindependent companies with economic motives. For this purpose, it had

proposed setting up an independent regulatory body- The InsuranceRegulatory and Development Authority.

Reforms in the Insurance sector were initiated with the passage of the IRDABill in Parliament in December 1999. The IRDA since its incorporation as astatutory body in April 2000 has fastidiously stuck to its schedule of framingregulations and registering the private sector insurance companies. Since

being set up as an independent statutory body the IRDA has put in aframework of globally compatible regulations. The other decision takensimultaneously to provide the supporting systems to the insurance sector andin particular the life insurance companies was the launch of the IRDA onlineservice for issue and renewal of licenses to agents. The approval ofinstitutions for imparting training to agents has also ensured that the

insurance companies would have a trained workforce of insurance agents inplace to sell their products.

THE ROLE OF INSURANCE REGULATORY AND

DEVELOPMENT AUTHORITY


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Insurance Regulatory and Development Authority (IRDA) was constituted in1999 by an Act of Parliament to protect the interests of the policyholders andto regulate, promote and ensure orderly growth of the insurance industry.IRDA consists of a ten member team that comprises a Chairman, five whole-

time members and four part-time members.

IRDA allows registration of new players in the insurance field. It also has theauthority to renew, modify, withdraw, suspend or cancel such registration.IRDA ensures protection of the interests of the policy holders in mattersconcerning assigning of policy, nomination by policy holders, insurableinterest, settlement of insurance claim, surrender value of policy and otherterms and conditions of contracts of insurance. It specifies requisitequalifications, code of conduct and practical training for intermediary orinsurance intermediaries and agents.

After creation of IRDA, insurance sector has seen tremendous growth. BeforeIRDA came into force there were only players in the insurance field, namely,Life Insurance Corporation of India (LIC) and General Insurance Corporationof India (GIC). Since then 23 new players have entered in the insurancesector.

MISSION OF IRDA

To protect the interests of the policyholders, to regulate, promote andensure orderly growth of the insurance industry and for matters connectedtherewith or incidental thereto.

OBJECTIVES OF IRDA:-

Protection of consumer interest.

To ensure financial soundness of the insurance industry.

To ensure healthy growth of the insurance market.

These objectives must be achieved with minimum government involvementand cost. IRDAs functioning can be financed by levying a small fee on the


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premium income of the insurers thus putting zero cost on the government andgiving itself autonomy.

CURRENT SCENARIO OF INSURANCE INDUSTRY IN

INDIA

The Government of India liberalised the insurance sector in March 2000 withthe passage of the Insurance Regulatory and Development Authority (IRDA)Bill, lifting all entry restrictions for private players and allowing foreign

players to enter the market with some limits on direct foreign ownership.Under the current guidelines, there is a 26 percent equity cap for foreign

partners in an insurance company. There is a proposal to increase this limit to49 percent.

The opening up of the sector is likely to lead to greater spread and deepeningof insurance in India and this may also include restructuring and revitalizingof the public sector companies. In the private sector 12 life insurance and 8general insurance companies have been registered. A host of privateInsurance companies operating in both life and non-life segments have startedselling their insurance policies since 2001.

Non-Life Insurance Market

In December 2000, the GIC subsidiaries were restructured as independentinsurance companies. At the same time, GIC was converted into a national re-insurer. In July 2002, Parliament passed a bill, delinking the four subsidiariesfrom GIC.

Presently there are 12 general insurance companies with 4 public sectorcompanies and 8 private insurers. Although the public sector companies stilldominate the general insurance business, the private players are slowlygaining a foothold. According to estimates, private insurance companies havea 10 percent share of the market, up from 4 percent in 2001. In the first half

of 2002, the private companies booked premiums worth Rs 6.34 billion. Mostof the new entrants reported losses in the first year of their operation in 2001.

With a large capital outlay and long gestation periods, infrastructure projectsare fraught with a multitude of risks throughout the development,construction and operation stages. These include risks associated with projectimplementation, including geological risks, maintenance, commercial and


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political risks. Without covering these risks the financial institutions are notwilling to commit funds to the sector, especially because the financing ofmost private projects is on a limited or non- recourse basis.

Insurance companies not only provide risk cover to infrastructure projects,they also contribute long-term funds. In fact, insurance companies are anideal source of long term debt and equity for infrastructure projects. Withlong term liability, they get a good asset- liability match by investing theirfunds in such projects. IRDA regulations require insurance companies toinvest not less than 15 percent of their funds in infrastructure and socialsectors. International Insurance companies also invest their funds in such

projects.

Insurance costs constitute roughly around 1.2- 2 percent of the total project

costs. Under the existing norms, insurance premium payments are treated aspart of the fixed costs. Consequently they are treated as pass-through costs fortariff calculations.

Premium rates of most general insurance policies come under the purview ofthe government appointed Tariff Advisory Committee. For Projects costingup to Rs 1 Billion, the Tariff Advisory Committee sets the premium rates, forProjects between Rs 1 billion and Rs 15 billion, the rates are set in keepingwith the committee's guidelines; and projects above Rs 15 billion aresubjected to re-insurance pricing. It is the last segment that has a number ofadditional products and competitive pricing.

Insurance, like project finance, is extended by a consortium. Normally oneinsurer takes the lead, shouldering about 40-50 per cent of the risk andreceiving a proportionate percentage of the premium. The other companiesshare the remaining risk and premium. The policies are renewed usually onan annual basis through the invitation of bids.

Of late, with IPP projects fizzling out, the insurance companies are turning

once again to old hands such as NTPC, NHPC and BSES for business.

Re-insurance business


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Insurance companies retain only a part of the risk (less than 10 per cent)assumed by them, which can be safely borne from their own funds. The

balance risk is re-insured with other insurers. In effect, therefore, re-insuranceis insurer's insurance. It forms the backbone of the insurance business. It

helps to provide a better spread of risk in the international market, allowsprimary insurers to accept risks beyond their capacity, settle accumulatedlosses arising from catastrophic events and still maintain their financialstability.

While GIC's subsidiaries look after general insurance, GIC itself has been themajor reinsurer. Currently, all insurance companies have to give 20 per centof their reinsurance business to GIC. The aim is to ensure that GIC's role asthe national reinsurer remains unhindered. However, GIC reinsures theamount further with international companies such as Swissre (Switzerland),

Munichre (Germany), and Royale (UK). Reinsurance premiums have seen anexorbitant increase in recent years, following the rise in threat perceptionsglobally.

Life Insurance Market

The Life Insurance market in India is an underdeveloped market that wasonly tapped by the state owned LIC till the entry of private insurers. The

penetration of life insurance products was 19 percent of the total 400 millionof the insurable population. The state owned LIC sold insurance as a taxinstrument, not as a product giving protection. Most customers were under-insured with no flexibility or transparency in the products. With the entry ofthe private insurers the rules of the game have changed.

The 12 private insurers in the life insurance market have already grabbednearly 9 percent of the market in terms of premium income. The new business

premiums of the 12 private players has tripled to Rs 1000 crore in 2002- 03over last year. Meanwhile, state owned LIC's new premium business hasfallen.

Innovative products, smart marketing and aggressive distribution. That's thetriple whammy combination that has enabled fledgling private insurance


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companies to sign up Indian customers faster than anyone ever expected.Indians, who have always seen life insurance as a tax saving device, are nowsuddenly turning to the private sector and snapping up the new innovative

products on offer.

The growing popularity of the private insurers shows in other ways. They arecoining money in new niches that they have introduced. The state ownedcompanies still dominate segments like endowments and money back

policies. But in the annuity or pension products business, the private insurershave already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percentof the customers.

The private insurers also seem to be scoring big in other ways- they are

persuading people to take out bigger policies. For instance, the average sizeof a life insurance policy before privatisation was around Rs 50,000. That hasrisen to about Rs 80,000. But the private insurers are ahead in this game andthe average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh- way

bigger than the industry average.

Buoyed by their quicker than expected success, nearly all private insurers arefast- forwarding the second phase of their expansion plans. No doubt theaggressive stance of private insurers is already paying rich dividends. But arejuvenated LIC is also trying to fight back to woo new customers.


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THE INSURANCE SECTOR IN INDIA ACCOUNTS FOR 7%

OF INDIA'S GDP

With largest number of life insurance policies in force in the world, Insurance

happens to be a mega opportunity in India. It's a business growing at the rateof 15-20 per cent annually and presently is of the order of Rs 450 billion.Together with banking services, it adds about 7 per cent to the country's GDP.Gross premium collection is nearly 2 per cent of GDP and funds availablewith LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance coverwhile health insurance and non-life insurance continues to be belowinternational standards. And this part of the population is also subject to weaksocial security and pension systems with hardly any old age income security.This it is an indicator that growth potential for the insurance sector isimmense.

A well-developed and evolved insurance sector is needed for economicdevelopment as it provides long term funds for infrastructure developmentand at the same time strengthens the risk taking ability. It is estimated thatover the next ten years India would require investments of the order of onetrillion US dollar. The Insurance sector, to some extent, can enableinvestments in infrastructure development to sustain economic growth of the

country. Insurance is a federal subject in India. There are two legislations thatgovern the sector- The Insurance Act- 1938 and the IRDA Act- 1999.

In India, insurance is generally considered as a tax-saving device instead ofits other implied long term financial benefits. Indian people are prone toinvesting in properties and gold followed by bank deposits. They selectivelyinvest in shares also but the percentage is very small. Even to this day, LifeInsurance Corporation of India dominates Indian insurance sector. With theentry of private sector players backed by foreign expertise, Indian insurancemarket has become more vibrant.


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LIST OF THE PRIVATE INSURANCE COMPANIES

Name of the company Nature of Holding

Allianz Bajaj Life Insurance Co Private

Aviva Life Insurance Private

Birla Sun Life Insurance Co Private

HDFC Standard Life Insurance Co Private

ICICI Prudential Life Insurance Co Private

ING Vysya Life Insurance Co. Private

Life Insurance Corporation of India Public

Max New York Life Insurance Co. Private

MetLife Insurance Co. Private

Om Kotak Mahindra Life Insurance Private

Reliance insurance Private

SBI Life Insurance Co Private

TATA- AIG Life Insurance Company Private

Besides Life Insurance, all the above mentioned companies provide coveragein Medical Insurance, Automobile Insurance, Accident Insurance, HomeInsurance and many others. In short the future of insurance companies inIndia looks bright.

All of the Above Are The Private Insurance Companies Which Are CurrentlyOperating In India With LIFE INSURANCE CORPORATION OF INDIA(LIC) which is a Public Holding


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NAME OF THE PLAYER MARKET SHARE (%)

Name of the Player Market share (%)

LIFE INSURANCE CORPORATION OF INDIA 82.3

ICICI PRUDENTIAL 5.63

BIRLA SUN LIFE 2.56

BAJAJ ALLIANZ 2.03

SBI LIFE INSURANCE 1.80

HDFC STANDARD 1.36

TATA AIG 1.29

MAX NEW YARK 0.90

AVIVA 0.79

OM KOTAK MAHINDRA 0.51

ING VYSYA 0.37

MET LIFE 0.21

APPLICATION OF INFORMATION TECHNOLOGY IN

INSURANCE SECTOR


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There is a evolutionary change in the technology that has revolutionized theentire insurance sector. Insurance industry is a data-rich industry, and thus,there is a need to use the data for trend analysis and personalization.

With increased competition among insurers, service has become a key issue.Moreover, customers are getting increasingly sophisticated and tech-savvy.People today dont want to accept the current value propositions, they want

personalized interactions and they look for more and more features and addones and better service

The insurance companies today must meet the need of the hour for more andmore personalized approach for handling the customer. Today managing thecustomer intelligently is very critical for the insurer especially in the verycompetitive environment. Companies need to apply different set of rules and

treatment strategies to different customer segments. However, to personalizeinteractions, insurers are required to capture customer information in anintegrated system.

With the explosion of Website and greater access to direct product or policyinformation, there is a need to developing better techniques to give customersa truly personalized experience. Personalization helps organizations to reachtheir customers with more impact and to generate new revenue through crossselling and up selling activities. To ensure that the customers are receiving

personalized information, many organizations are incorporating knowledgedatabase-repositories of content that typically include a search engine and letsthe customers locate the all document and information related to their queriesof request for services. Customers can hereby use the knowledge database tomange their products or the company information and invoices, claimrecords, and histories of the service inquiry. These products also may be ableto learn from the customers previous knowledge database and to use theirinformation when determining the relevance to the customers search request.

THE ROLE OF LIFE INSURANCE IN ONES LIFE

Risks and uncertainties are part of life's great adventure -- accident, illness,theft, natural disaster - they're all built into the working of the Universe,waiting to happen.


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Life insurance is a unique financial product. In some respect, it is anoxymoron in that it deals scientifically and precisely with variables that areemotional and, within the context of our own individual lives, completely

unpredictable.

Perhaps the most important factor about life insurance is simply that it works.Since the 1850s, when the modern life insurance policy was created,insurance companies have consistently kept their contractual promise to

pay. This in turn has made it possible for millions of men and women in thiscountry to keep their promises to their families, building a plan of financialsecurity on the foundation of life insurance protection.

INSURANCE AS AN INVESTMENT

Insurance is an attractive option for investment. While most people recognizethe risk hedging and tax saving potential of insurance, many are not aware ofits advantages as an investment option as well. Insurance products yield morecompared to regular investment options, and this is besides the addedincentives (read bonuses) offered by insurers.

You cannot compare an insurance product with other investment schemes forthe simple reason that it offers financial protection from risks, something that

is missing in non-insurance products.

In fact, the premium you pay for an insurance policy is an investment againstrisk. Thus, before comparing with other schemes, you must accept that a partof the total amount invested in life insurance goes towards providing for therisk cover, while the rest is used for savings.

In life insurance, unlike non-life products, you get maturity benefits onsurvival at the end of the term. In other words, if you take a life insurance

policy for 20 years and survive the term, the amount invested as premium inthe policy will come back to you with added returns. In the unfortunate eventof death within the tenure of the policy, the family of the deceased willreceive the sum assured.


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Now, let us compare insurance as an investment options. If you invest Rs10,000 in PPF, your money grows to Rs 10,950 at 9.5 per cent interest over ayear. But in this case, the access to your funds will be limited. One can

withdraw 50 per cent of the initial deposit only after 4 years.

The same amount of Rs 10,000 can give you an insurance cover of up toapproximately Rs 5-12 lakh (depending upon the plan, age and medicalcondition of the life insured, etc) and this amount can become immediatelyavailable to the nominee of the policyholder on death.

Thus insurance is a unique investment avenue that delivers sound returns inaddition to protection.

INSURANCE AS RISK COVERAGE

First and foremost, insurance is about risk cover and protection - financialprotection, to be more precise - to help outlast life's unpredictable losses.Designed to safeguard against losses suffered on account of any unforeseenevent, insurance provides you with that unique sense of security that no otherform of investment provides. By buying life insurance, you buy peace ofmind and are prepared to face any financial demand that would hit the family

in case of an untimely demise.

To provide such protection, insurance firms collect contributions from manypeople who face the same risk. A loss claim is paid out of the total premiumcollected by the insurance companies, who act as trustees to the monies.

Insurance also provides a safeguard in the case of accidents or a drop inincome after retirement. An accident or disability can be devastating, and aninsurance policy can lend timely support to the family in such times. It alsocomes as a great help when you retire, in case no untoward incident happensduring the term of the policy.


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With the entry of private sector players in insurance, you have a wide rangeof products and services to choose from. Further, many of these can befurther customized to fit individual/group specific needs. Considering theamount you have to pay now, it's worth buying some extra sleep.

INSURANCE AS A TAX PLANNING

Insurance serves as an excellent tax saving mechanism too. The Governmentof India has offered tax incentives to life insurance products in order tofacilitate the flow of funds into productive assets. Under Section 88 ofIncome Tax Act 1961, an individual is entitled to a rebate of 20 per cent onthe annual premium payable on his/her life and life of his/her children oradult children. The rebate is deductible from tax payable by the individual or

a Hindu Undivided Family. This rebate is can be availed upto a maximum ofRs 12,000 on payment of yearly premium of Rs 60,000. By paying Rs 60,000a year, you can buy anything upwards of Rs 10 lakh in sum assured.(depending upon the age of the insured and term of the policy) This meansthat you get a Rs 12,000 tax benefit. The rebate is deductible from the tax

payable by an individual or a Hindu Undivided Family.

INSURANCE DISTRIBUTION CHANNELS

At present the distribution channels that are being utilized are:


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Direct selling Corporate agents i.e. pushing the insurance product through the

directors or partners of a company Group selling

Worksite marketing Brokers and cooperative societies

To this list can be added the number of alternate delivery channel

The Insurance industry in India has been progressing at a rapid pace sinceopening up of the industry in 2000. As per Assocham, Indias premier apexchamber of industries, the countrys domestic insurance market would toucharound US$ 60.5 Billion by the year 2010 from existing size of about US$10.2 Billion. According to the Insurance Regulatory and DevelopmentAuthority (IRDA), new business premium income from April 2006 toFebruary 2007 amounted to INR579.38 billion (US$13.18 billion), registeringan impressive 120% growth over the same period last year.

The Insurance industry graph is definitely ascending. Distribution accountsfor the largest element in insurer are cost and affect profitability. The size ofthe country combined with problems of connectivity in the rural areas, makes

insurance selling in India a difficult proposition. The distribution capabilitiesstrongly influence product design in insurance. The distribution channelshave a direct impact on the insurers market image.

Emergence of alternative channels such as Bancassurance and Internet isreshaping the insurance industry. India with a population of more than a

billion people offers unlimited growth potential especially in the rural areas.

THE EMERGENCE OF NEW DISTRIBUTION CHANNELS

There was a time when captive agents wrote the bulk of an insurancecompanys business. But increasingly people are buying insurance productsfrom independent producers and institutional channels such as banks, broker-


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dealers, IFAs and wire houses. In a way, this is good news for insurancecompanies.Managing a captive agency force is an expensive business. Studies estimatethat insurance companies invest anywhere between $65,000 and $200,000 in

training each agent. This investment often does not deliver the desired returnbecause there is a great deal of attrition among agents. Besides training, thereare huge operational overheads attached to maintaining a captive force.Independent producers and institutional channels are likely to bring newefficiencies into the distribution framework and corner a larger percentage ofthe policies written.

For instance, banks and large broker-dealers already have huge networks inplace, existing relationships with customers and brand equity. If insurancecompanies are able to position themselves as preferred partners with thesechannels, they could quickly increase their market share and at the same time

bring down their cost per business acquisition

THE CONSUMER IS EVOLVING AND SO ARE HIS NEEDS:

The way consumers look at insurance products today is completely differentfrom how they looked at them a few years ago. Insurance products are nolonger about just covering risks and lives. Since the 1980s insurance in manymarkets has increasingly become a wealth-management product. Consumers

are seeking variety and customizability in their investment portfolios.The demographics are also in favor of insurance companies. The averagelifespan is increasing and so are standards of living. This is creating demandfor products that not only offer protection but also double up as investments.Insurance companies have an opportunity to bring innovation into their

product mix.

They can gain a competitive advantage by quickly launching innovativeproducts that are aligned with evolving consumer needs. To do this, insurancecompanies must be able to understand consumer needs better and have agilesystems that let them launch products quickly.To capitalize on these opportunities, however, insurance companies must getcloser to the customer by expanding their distribution network. They have to


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incorporate new and alternative channels, arm the sales forces with effectivesales tools and position themselves as preferred partners with their channels.

In most markets, except Asia, insurance carriers generate more than 80% of

their business through alternative distribution channels such asbancassurance, broker-dealers, wire houses and IFAs. The key challenge forinsurers is to attract and retain these distribution channels by:

Making it easy for channels to do business with them Providing good and quick underwriting support Delivering differentiated service to top performers

Providing proactive service Launching incentive plans and contests Managing commissions in a more efficient manner

In a marketplace where products are increasingly becoming commoditized,the big differentiator that insurers can offer their channels is ease of doing

business. Insurance companies can position themselves as preferredproviders by delivering on key areas such as: New business and underwriting support Marketing and sales support Underwriting speed

Client services Commission rate

In this white paper, we will look at how insurance companies can streamlinetheir distribution networks, address the business and technological challengesand capitalize on the opportunities.

To sum up, it is apparent that multiple distribution channels will help an

insurance company to offer a range of contact points to the customer, thereby

increasing the chances of success. However, along with these distribution

channels comes the challenge of 'relationship management'. Since most of the


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new channels involve collaboration with various entities whose demands and

powers of negotiation are varied, it requires delicate skills on the part of the

insurance company to manage these relationships. Effective management of

channel conflict, and curtailing the costs of distribution will be of utmost

importance.

INSURANCE SECTOR POISED FOR 200% GROWTH TO

TOUCH RS. 2000 BLN BY 2010:

Indian insurance sector is likely to register unprecedented growth of 200%and attain a size of Rs. 2000 billion by 2009-10, in which a private sectorinsurance business will achieve a growth rate of 140% as a result of

Insurance

Company

InsuranceCompany

Insurance

Company

Agent

Bank

Agent

Agent

Broker

Agent

C

U

S

T

OM

E

R

S


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aggressive marketing technique being adopted by them against 35-40%growth rate of state owned insurance companies.

The aforesaid findings are made by The Associated Chambers of Commerce

and Industry of India (ASSOCHAM) on `Insurance in Next 2 Years,saying that in the last couple of years, the insurance sector has grown byCAGR of around 175% and the trend will emerge still better because of

potential factor. Currently, the insurance sector size is estimated at Rs.500billion.

Releasing the ASSOCHAM findings, its President, Mr. Venugopal N. Dhootsaid that on account of intense marketing strategies adopted by privateinsurance players, the market share of state owned insurance companies likeGIC, LIC and others have come down to 70% in last 4-5 years from over

97%.

The private insurance players despite the sector is still regulated has beenoffering rate of return (RoR) to its policy holders which is estimated at about35% as against 20% of domestic insurance companies. This factor is mainlyresponsible for hike in private insurance market share which will grow furtherwhich is why the ASSOCHAM estimates that its growth rate could evenexceed 140%.

Secondly, the state owned insurance companies such as LIC and GIC havelimited number of policies to offer to their subscribers while in case of privateinsurance companies, their policy numbers are many more and the premiumamount as well as the maturity period is much competitive as against those ofgovernment insurance companies. Interestingly, said Mr. Dhoot that the

private sector insurance players have started exploring the rural markets inwhich until recently, the state owned companies had the monopoly.

The Chamber has projected that in rural markets, the share of privateinsurance players would increase substantially as these have been able togenerate a faith among their rural consumers.

Estimating the potential of the Indian insurance market from the perspectiveof macro-economic variables such as the ratio of premium to GDP,


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ASSOCHAM reveals that Indias life insurance premium, as a percentage ofGDP is 1.8% against 5.2% in the US, 6.5% in the UK or 8% in South Korea.

ASSOCHAM findings further reveal that in the coming years, the corporate

segment, as a whole will not be a big growth area for insurance companies.This is because penetration is already good and companies receive goodservices. In both volumes and profitability therefore, the scope for expansionis modest. The Chamber has suggested that insurers strategy should be tostimulate demand in areas that are currently not served at all. Insurancecompanies mostly focus on manufacturing sector, however, the servicessector is taking a large and growing share of Indias GDP. This offersimmense opportunities for expansion opportunities.

To understand the prospects for insurance companies in rural India, it is very

important to understand the requirements of India's villagers, their daily lives,their peculiar needs and their occupational structures. There are farmers,craftsmen, milkmen, weavers, casual labourers, construction workers andshopkeepers and so on. More often than not, they are into more than one

profession.

The rural market offers tremendous growth opportunities for insurancecompanies and insurers should develop viable and cost-effective distributionchannels; build consumer awareness and confidence. The ASSOCHAMfound that there are a total 124 million rural households. Nearly 20% of allfarmers in rural India own a Kissan Credit cards. The 25 million credit cardsused till date offer a huge data base and opportunity for insurance companies.An extensive rural agent network for sale of insurance products could beestablished. The agent can play a major role in creating awareness,motivating purchase and rendering insurance services.

There should be nothing to stop insurance companies from trying to pursuetheir own unique policies and target whatever needs that they want to targetin rural India. ASSOCHAM suggests that insurance needs to be packaged in

such a form that it appears as an acceptable investment to the rural people.

Insurance Sector In India Poised For Tremendous ExpansionInsurance Sector in India is poised for tremendous expansion said Shri PawanKumar Bansal, the Minister of State for Finance while addressing a meetingof Insurance Australia Group on 21st September 2007 in Sydney. Shri Bansalsaid the banks also have entered the insurance sector in the form of corporate


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agencies or under referral arrangements to utilize the extensive and broadreach for marketing of insurance products.

IRDA has also notified Micro Insurance regulations facilitating insurers to tap

the potential of rural markets. As per these regulations like Non-GovernmentOrganizations (NGO), Micro Finance Institutions (MFI) and Self HelpGroups (SHG) have been recognized as micro insurance agents. It isenvisaged that micro insurance would facilitate penetration of insurance torural and remote areas. He said that Micro Insurance being an integral part ofoverall insurance system, attempts to offer the target specific insurance

products at a relatively lower cost, for a lower coverage of amount.

Foreign equity upto 26% is allowed in the insurance sector. The entry offoreign partners has resulted in the sector attracting FDI of US 543 million ason 31 st March, 2007. The private companies have created a niche forthemselves. They have been able to increase their share in the insurancemarket in competition with their counterparts in the public sector. As a part ofthe reform process, premium rates for non-life insurance products have beende-tariffed from 1.1.2007.

Shri Bansal said that in insurance sector though the growth in recent years hasbeen significant, India is far behind the world averages and ranks 78th interms of insurance density and 54 th in terms of insurance penetration. The

world averages are US $ 469.6 in terms of insurance density and 8.06% interms of insurance penetration. Against this, insurance density was US$ 19.70and insurance penetration was 3.17% in India for the year 2003. However,these two indices have increased following the opening of this sector.

Insurance Regulatory and Development Authority has granted registration to37 insurance companies, which include 17 life insurance (including on PSU),19 non-life insurance (including four PSU, one AICL & one ECGC)companies and one re-insurance company. At present seventeen insurancecompanies are operating in the general insurance side and seventeenInsurance companies on the life side


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According to Shri Bansal, India offers a stable investment climate as well as ahuge market with a growing middle class. Investor confidence in India is atan all time high today. A.T. Kearney in 'The FDI Confidence Index 2005' has

ranked India as the 2nd most attractive investment destination just behindChina whereas 'World Investment Report, 2005' ranked India as the 2nd mostattractive investment destination among Transnational corporations, headded

FDI is now permitted in 21 activities through the auto-route. These includeFDI in development of township, housing, built-up infrastructure andconstruction development projects, exploration and mining of diamonds and

precious stones and insurance.

SWOT ANALYSIS OF INSURANCE INDUSTRY

Strengths:

Premium rates are increasing and so are commissions.

The variety of products is increasing.

Prospects expect more services from their brokers.

Weaknesses

Insurance companies are often slow to respond to changing needs.

There is an increasing trend of financial weakness among the

companies.

There are more competitors for agencies to compete with banks and

Internet players.

Opportunities

The ability to cross sell financial services is barely being tapped.

Technology is improving to the point that paperless transactions are

available.

The client's increasing need for an "insurance consultant" can open new

ways to service the client .

Threats


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The increasing cost and need for insurance might hit a point where a

backlash will occur.

Government regulations on issues like health care, mold and terrorism can

quickly change the direction of the insurance

Increasing expenses and lower profit margins will hit hard on the smaller

agencies and insurance companies.

PORTERS FIVE FORCETHREAT OF ENTRANTS

1. Economies of scale:Economies of scale dont work here. As result of that there is no companywhich can dominate the other very much. So there is always a veryheavy threat of new entrants in insurance industry.

2. Working Capital Requirement

This is sector which has a very high competition and hence there is need ofhuge working capital to enter into this market. Also the company needs alot of money for its day to day expenses. Hence in terms of working capitalthe threat of new entrants is very low. That is why we can see thatgenerally big companies are coming into this industry.

3. Proprietary Product DifferenceThere doesnt seem to be too difference between the product differences

between the companies. Normally the companies are coming out with thesimilar kind of product. There is near universalisation of the products. Sothere is a high threat of new entrants.

4. Absolute Cost AdvantageIn terms of absolute cost advantage if we asses we can see that there isntmuch cost advantage for any player in the market. LIC although has some

product which cost lower and hence the company is getting a base in thelower segment but that doesnt seem such significant .So the threat of newentrant is very high.


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5. Brand Identity

There is a place of brand reputation in this industry. LIC has over the yearsestablished a brand name for itself and the people especially n the rural area

believes in the brand name. Through years of strong marketing andpromotion the company has been able to establish a brand name forthemselves. So in this area the threat of brand name is very low.

SUPPLIER POWER

This is a finance sector where there is no role of supplier and hence thecompany doesnt face any problem from supplier side

BUYERS POWER

1. Buyers Concentration

In this industry buyers are the most important force and the managershave to constantly reach out to the customer and hence a complete

customization of the product is going on. So the companies have to lookat their potential market and hence they have to go for a completesegmentation of the market and target different market. On the basis ofthe segmentation made the company has to place the product in thoseareas.

2. Buyers Switching CostThis a field where a customer buys an product he has to stay associatedwith company for a long period of time and pay the premium to thecompany in certain interval. Hence big amount of money is associatedwith buying of any product. So the buyer switching cost is very high.

3. Buyer InformationThe buyers possess very strong information about the insurance products.The agents are the main source of information provider of the products tothe customer. Through internet, newspapers also the information aboutinsurance is available. So the customers are not ignorant about the


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industry anymore. So the buyers again prove to be very strong in thisfield.

4. Brand Identity of Buyers

The customers have different perception about different companies in themarket. LIC is normally associated safe, secured and highly reliablecompany. The private players are normally preferred as they give higherreturns, so it is mostly preferred for investment. LIC is preferred by thelower earning people and also the government employees have high faithon it. Whereas mostly the rich people especially the business class peopleand the corporate sector people prefer the private companies.

5. Price SensitivityPrice is something which is very important factor in the case of Indiancustomers. People generally believe that LIC is the company which givesa reliable service at low price. But in the higher segment the people dontlook for money rather they look for faster growth and started to believe inthe private companies. Here again the customer has vital role to play.

SUBSTITUE PRODUCT

Substitute products are those which fulfill the similar needs as any otherproduct. Here there is lot of substitute product for the product in insurancecompanies. But there are also substitute for the product of the insuranceindustry. Those are the mutual fund, direct investment I equity market, the

banks and also the bank assurance. Although some industry cannot fulfillthe need of security of life but as many people are now looking forinvestment these industries become a good substitute.

RELATIVE PRICE/PERFORMANCE RELATIONSHIP OFSUBSTITUTES

Although the insurance is very god option at the same price one can affordto invest in the mutual fund or bank assurance and can get the similarreturns. So the threat becomes very high to the insurance industry.

RIVALRY


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The industry is very much dominated by the LIC. But in the last 10 yearsscenario has changed a lot and the private players have ate up quarter ofthe pie. The rivalry in the rural is not very high but in the urban marketcompetition has really intensified. So the market share is getting

distributed among the companies

COMPANY PROFILE


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ABOUT THE LIFE INSURANCE COMPANY METLIFE

MetLife Insurance Company is ranked 37 on the Fortune 500.The MetLifecompanies are one of the world's largest, strongest and most respectedfinancial organizations.

MetLife India Insurance Company Limited (MetLife) is an affiliate ofMetLife, Inc. and was incorporated as a joint venture between MetLife

International Holdings, Inc., The Jammu and Kashmir Bank,Punjab NationalBank and other private investors. MetLife is one of the fastest growing lifeinsurance companies in the country. It serves its customers by offering arange of innovative products to individuals and group customers at more than850 locations through its bank partners and company-owned offices. MetLifehas more than 1,32,000 Financial Advisors, who help customers meet theirfinancial and protection goals across the length and breadth of the country.For more information about MetLife, please visit the companys website atwww.metlife.co.in.

MetLife, Inc., through its affiliates, serves approximately 80 millioncustomers in the Americas, Asia Pacific and Europe. Affiliated companies,outside of India, include the number one life insurer in the United States, withover 143 years of experience and relationships with over 90 of the top onehundred FORTUNE 5001 companies. The MetLife companies offer lifeinsurance, annuities, automobile and home insurance, retail banking and otherfinancial services to individuals, as well as group insurance, reinsurance andretirement and savings products and services to corporations and otherinstitutions.


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needs and aspirations of every Indian. And update their products with featuresthat form the cornerstones of financial freedom.These are the list of corporate partners who have tied up their functionalitywith Met life India insurance.

The Jammu and Kashmir BankAxis BankDhanalakshmi BankKarnataka BankKarvy Consultants LimitedGeojit SecuritiesWay2wealth ConsultancyMini Muthoottu Bank


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PRODUCT DETAILS

No one can give you all the answers when it comes to dealing with life's upsand downs. But we can certainly equip you to deal with life better. Please find

below the various products offered by MetLife to suit your specific need:

Accumulation Whole Life Policy

Met 100- Limited Pay Whole life Non - Participating Met 100- Limited Pay Whole life Participating

Endowment Policy MET Suvidha MET saral

Money Back Policy Met Sukh Met Bhavishya

Multi Purpose Met Platinum

Protection Met Suraksha - TROP Met Suraksha - TA Met-Mortgage Protector SP/Limited pay(MRTA)

Retirement

MET Pension - Participating Deferred Annuity Add Ons

Accidental Death Benefit (ADB) Term Rider Waiver Of Premium Critical Illness

The various products offered by MetLife are:-

Accumulation

Worldwide, accumulation products help our customers invest wisely andenjoy benefits during those important phases of life be it their childrenseducation, marriage or buying a house. In addition to providing risk coverage.MetLife's accumulation products are ideal for those who like to avail of lifecover as well as investment benefits.

The following policies are available under the accumulation plans:


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Whole Life Policy-

As the most basic forms of Insurance, Whole Life Policy gives you cover ofprotection as long as you live. As the inevitable happens, your near and dear

ones get to enjoy the sum assured. In a Whole Life Policy, you pay the sameamount in premiums throughout the term of the contract. Some Whole LifePolicies let you pay premiums for a shorter period such as 15, 20 or 25 years,

but give your protection cover for longer than this period. However, withthese policies, you might have to pay a higher premium since the paymentsare made during a shorter period.

MET 100 (Non Participating Limited Pay Whole Life)

Suitability

The plan is suitable for those who

Want life time protection Want to pay affordable premium Want access to the cash value of the policy Want tax advantages

Salient Features

MET 100 is a Whole Life plan. Duration of the plan is for entire life or till 100 years of age. Premiums cease at death or on expiry of the premium paying term

whichever is earlier.

This plan can be availed for terms 15, 20 or 25 years. The plan is a Non Participating one and hence all Premium rates, Sum

Assured, Surrender Values and Paid up Values are guaranteed upfront. If premiums have been paid for at least 3 years then the Policy acquires

a Guaranteed Surrender Value, which can be surrendered for cash forits full Guaranteed Surrender Value.

Loan can be availed under the policy provided the policy is kept inforce for 3 years (90% of the guaranteed surrender value can be takenas loan on approval).


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The policyholder has the option of converting the policy into a paid-uppolicy whereby the policy can be kept in force by reducing the faceamount in accordance with the premiums paid.

The Premium modes available are: Annual, Semi-Annual, Quarterly,

Monthly and Payroll Savings Program (PSP).

Benefits

On Survival

Guaranteed Sum Assured at age 100.

On Death

During the Term of the plan, Nominee / Beneficiary shall receive theGuaranteed Sum Assured on death.

Additional Riders

On Payment of additional premiums any one or more of the following

riders can be added to this Policy.

Accidental Death Benefit Rider Term Rider

Waiver of Premium Rider Critical Illness Rider

Other Conditions

Minimum Entry age: Age 0 last birthday. Maximum Entry age: Age 70 last birthday for PPT of 15 years.

Age 65 last birthday for PPT of 20 years.Age 60 last birthday for PPT of 25 years.

Minimum Face Amount: Rs. 50,000. Maximum Face Amount: No Limit Minimum premium Amount:

Annualized premium of Rs. 2,500 (not inclusive of the Rider Premium)


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for issue ages 15 and above.Annualized premium of Rs. 1,000 (not inclusive of the Rider Premium)for issue ages under 15.

Exclusions

In the event the Insured commits suicide, whether sane or insane at thattime, within one year from the effective date of insurance cover or thedate of the Policy or the date of the last reinstatement whichever islater, the benefit is restricted to the extent of refunding the premium(s)received without interest, if any, less any expenses incurred by us.

Indicative Rates (These are just indicative, please refer to our Premiumcalculator or contact our FA to get the exact rates.)

Face Amount: Rs 5,00,000

MET 100

Age/PPT 15 20 25

25 7,670 6,500 5,900

35 9,655 8,205 7,475

45 13,860 11,880 10,915

Illustration

To get you a better picture of the Met 100, one should go through thisexample.

Ajay is 27 years and works for a software company in Bangalore. He wasrecently married to Sangeeta. Ajay gets the Met 100 Limited pay version

paying a premium of Rs.6765 for 20 years. The sum assured to Ajay wouldbe Rs.5,00,000. In addition to this, Ajays policy has a critical illness rider


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added on for 2,00,000 that protects him against 10 critical illnesses. For thishe would be paying a premium of a mere additional Rs. 744 a year.

Annual Premiums paid by Ajay Rs 6,765

Critical illness rider Rs 744

Total Yearly premium paid by Ajay Rs 7,509

What this means is for a mere Rs.7509 per year, Ajay has a Life Assured sumof Rs.5 lakhs. In case of the sudden unfortunate demise of Ajay, his familywill receive a sum assured of Rs. 5,00,000. In case Ajay develops one ofthose 10 critical illnesses within 60 years of age, Rs. 2,00,000 will be paid to

the family for hospital and other expenses. And the policy will still be inforce even post the pay out of Rs 2,00,000.

MET 100 Gold (Participating Limited Pay Whole Life)

Suitability


Want to share the future prosperity of the company by getting

reversionary and terminal bonuses Want life time protection Want to pay affordable premium Want access to the cash value of the policy Want tax advantages

Salient Features

MET 100 Gold (Par WL) is a Whole Life plan. Duration of the plan is for entire life or till 100 years of age. Premiums cease on death or on expiry of the premium paying term

whichever is earlier. This plan can be availed for terms 15, 20, 25 years or Life (Age 85

minus Age at entry). The plan is a Participating one


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No Bonus is payable for first two policy years. Thereafter abonus as declared by the company will be credited asreversionary bonus on the policy anniversary. Company mayalso declare terminal bonus.

Reversionary Bonus: The bonus would be a % of basic faceamount plus accrued reversionary bonus, if any.

Terminal Bonus: if any, would be a % of accrued reversionarybonus, which becomes payable on maturity or on death if itoccurs after 10th policy anniversary.

The participation in profit under this policy continues even afterpremium paying term, provided premiums have been paid forfull term.

Both Reversionary and Terminal Bonus are not guaranteed. If premiums have been paid for at least 3 years then the Policy acquires

a Cash Surrender Value, which shall be determined by the companyfrom time to time. This cash surrender value will not be below theGuaranteed Cash Surrender value which is calculated as 30% of thetotal premiums paid up to the date of surrender excluding the first year

premium and any extra premium. Loan can be availed under the policy provided the policy is kept in

force for 3 years (90% of the cash surrender value can be taken as loanon approval).

The policyholder has the option of converting the policy into a Non

Participating paid-up policy whereby the policy can be kept in force byreducing the face amount in accordance with the premiums paid.

The Premium modes available are: Annual, Semi-Annual, Quarterly,Monthly and Payroll Savings Program (PSP).

Benefits

On Survival

The Face Amount plus accrued Reversionary bonus plus Terminalbonus, if any, is payable upon survival to Age 100.

On Death


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the breadwinner) till the time the children grow up and are settled. By thattime you could plan your policy to mature and can enjoy the accumulated

benefits in your own lifetime.

MET Suvidha (Participating Endowment Assurance)

Suitability


Want the saving and security in one policy. Want to share the future prosperity of the company by getting

reversionary and terminal bonuses. Want protection.

Irregular or shorter income earning spans. Want tax advantages.

Salient Features

Choose any term between 15 - 30 year i.e for terms 15, 16, 17, 1830years.

Choose from various premium paying term namely single, limited (5year and 10 years) and regular pay.

Avail Tax Benefits under Income tax act 1961. The plan is a Participating one.

No Bonus is payable for first two policy years. Thereafter abonus as declared by the company will be credited asreversionary bonus on the policy anniversary. Company mayalso declare terminal bonus.

Reversionary Bonus: It is an insurance amount in addition to theface amount. If declared and vested, the reversionary bonus is

payable, together with the face amount, on death of the insuredperson or maturity of the policy. The bonus will be credited atrates as declared by the company, on the policy anniversary.


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Terminal Bonus: if any, would be a % of accrued reversionarybonus, which becomes payable on maturity or on death, if itoccurs after the 10th policy anniversary.

Both Reversionary and Terminal Bonus are not guaranteed as

they are based on the company's actual investment returns,mortality, persistency and expense experience.

GSV for Regular Pay and Limited Pay: Guaranteed cash surrendervalue calculated as 30% of the total premiums paid until the date ofsurrender, excluding the first year premium and any extra premium, ifall premiums have been paid for at least 3 full years and/or the policyhad been in force for 3 full years

GSV for Single Pay: The guaranteed surrender value would bepayable from end of 2nd year onwards and would be equal to 90% ofthe premium paid, excluding any extra premium.

Loan can be availed under the policy provided the policy is kept inforce for 3 years (90% of cash Surrender Value at the end of therelevant policy year less any unpaid premiums for that year and loaninterest accrued to the end of that year can be taken as loan onapproval).



The following are the brands available for Met Suvidha Par:

Band Minimum Amount Maximum Amount

Silver Rs 75,000 Rs 224,999

Gold Rs 225,000 Rs 349,999

Platinum Rs 250,000 No Limit

Sameer is 30 years old and works as an Area Sales Manger in a FMCGcompany. He buys a 20 year term Met Suvidha par endowment assurance

plan from MetLife India Insurance for a sum assured of Rs 5,00,000. He paysan annual premium of Rs 21,685/-. The beneficiary of the policy is his wifeMeera.


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Total Yearly premium Rs 21,685

Amount available upon maturity Rs 5,00,000

In case of the unfortunate demise of Vijay during the term of the policy,Meera (beneficiary) will receive the sum assured of Rs 5,00,000. At the endof the term of the policy term Vijay will receive Rs 5,00,000 .

Benefits

On Maturity

The Face Amount plus accrued Reversionary bonus at rates as declaredby the company plus Terminal bonus, if any, is payable upon survival

to maturity age.

On Death

The Face Amount plus accrued Reversionary bonus at rates as declaredby the company plus Terminal bonus, if any, is payable upon deathduring the policy term.

Other Conditions

Minimum Entry age: Age 15 years last birthday Maximum Entry age: Age 60 years last birthday Maximum Maturity Age: Age 75 years last birthday Minimum Face amount: Rs. 75,000 Maximum Face amount: No Limit Minimum premium Amount: Annualized premium of Rs. 2,500 (not

inclusive of the Rider Premium)

Exclusions

In the event of the Insured committing suicide, whether sane or insaneat that time, within one year from the effective date of insurance coveror the date of the Policy or the date of the last reinstatement whicheveris later, the benefit is restricted to the extent of refunding the


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premium(s) received without interest, if any, less any expensesincurred by us.

MET Suvidha (Non Participating Endowment Assurance)

Suitability


Want the saving and security in one policy. Want protection. Irregular or shorter income earning spans. Want tax advantages.

Salient Features

Choose any term between 5 - 30 year i.e for terms 5, 6, 7, 830 years.

Choose from various premium paying term namely single, limited (5year and 10 years) and regular pay.

Avail Tax Benefits under Income tax act 1961. GSV for Regular Pay and Limited Pay: Guaranteed cash surrender

value calculated as 30% of the total premiums paid until the date ofsurrender, excluding the first year premium and any extra premium, if

all premiums have been paid for at least 3 full years and/or the policyhad been in force for 3 full yearsGSV for Single Pay: The guaranteed surrender value would be

payable from end of 2nd year onwards and would be equal to 90% ofthe premium paid, excluding any extra premium.

Loan can be availed under the policy provided the policy is kept inforce for 3 years (90% of cash Surrender Value at the end of therelevant policy year less any unpaid premiums for that year and loaninterest accrued to the end of that year can be taken as loan on

approval).

The Premium modes available are: Annual, Semi-Annual, Quarterly,Monthly and Payroll Savings Program (PSP).

The following are the brands available for Met Suvidha Non-Par:


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Minimum Face amount: Rs. 75,000 Maximum Face amount: No Limit Minimum premium Amount: Annualized premium of Rs. 2,500

Exclusions

In the event of the Insured committing suicide, whether sane or insaneat that time, within one year from the effective date of insurance coveror the date of the Policy or the date of the last reinstatement whicheveris later, the benefit is restricted to the extent of refunding the

premium(s) received without interest, if any, less any expensesincurred by us.

Met Saral

Introduction

The easiest way to ensure that you become a Lakhpati! The process has beenmade so simple No medical check and sign a simplified application form andinsurance cum investment plan is yours.

Just need to write us a cheque and fill the application so we can begin yourinsurance policy . The term offers you quick return options - 5 year term and10 year term plan, at the end of which you receive the sum assured as a lump

sum of a lakh.

A timely and useful protection cum investment option that you will be happyyou made. So get in touch with you nearest MetLife Insurance desk and enjoythe rewards of an endowment plan that MetLife India Insurance bringsespecially for you - Met Saral

What is Met Saral

Non Par Endowment with term of 5 and 10 year Simplified application form

Guaranteed issue No Medical Test Tax Benefits under Sec 80 C and 10( 10 D) of Income tax act 1961

What is Met Saral


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This policy is available for following ages and terms:

Minimum Entry Age: Age 15 years last birthday Maximum Entry Age: Age 50 years last birthday

Maximum Maturity Age: Age 60 years last birthday Face amount: Rs. 1,00,000 (fixed) Tax Benefits under Sec 80 C and 10( 10 D) of Income tax act 1961

Premium Paying Modes

The product is available in the Semi Annual & Annual mode only

Riders

There are no riders attached to the base policy

Other Provisions

Exclusion on Base policy: In the event the Insured commits suicide, whethersane or insane at that time, within one year from the effective date ofinsurance cover or the date of the policy or the date of the last reinstatementwhichever is later, the benefit is restricted to the extent of refunding the

premium(s) received without interest, if any, less any expenses incurred byus.

Money Back Policy

As the most popular accumulation policy across consumers in different stagesof their life, Money back pays you back lump sums throughout the term ofthe policy, at regular intervals. These periodic lump sums are usually a


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percentage of the sum assured and the insurance continues through the termof the policy.

MET SUKH (Non Participating Money Back Plan)

Suitability


Want money back at regular intervals Want to grow savings Want the protection of insurance Want tax advantages

Salient Features

A money back policy where lump sum amounts are paid to the lifeassured at periodic intervals on survival

Premiums cease on death or on expiry of term whichever is earlier. This plan can be availed for terms 20 years. The plan is a Non Participating one and hence all Premium rates, Sum

Assured, Surrender Values and Paid up Values are guaranteed upfront. Provided the policy is in full force, a guaranteed addition of Rs.100.00

per Rs.1, 000 of Face Amount will be added to the Face Amount at the

end of each policy anniversary and will be payable either on the date ofmaturity or on earlier death of the Life Insured

If premiums have been paid for at least 3 years then the Policy acquiresa Guaranteed Surrender Value, which can be surrendered for cash forits full Guaranteed Surrender Value.

The policyholder has the option of converting the policy into a paid-uppolicy whereby the policy can be kept in force by reducing the faceamount in accordance with the premiums paid.



Benefits

On Survival

TermAt the

end ofAmount of money back

For Example, on a Rs.

1,00,000 policy


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Age 44 60000

Age 49 720000*

* includes the Guaranteed additions of Rs 100 per Rs 1000 of sum assured

Apart from the periodical money-back returns, his wife will receive a sumassured of Rs.3,00,000 and accrued guranteed additions, should theunfortunate happen during policy tem. And during the term of the policy, ifMr.Vijay contacts any of the insured critical illnesses, he would be paidRs.2,00,000 to fund his medical and hospitalization expenses.

Met Bhavishya (Money Back Policy)

This is a non par money back policy that provides guaranteed returns thatspecially designed to meet childrens educational expenses at different lifestages. There are two options to choose from and fixed term benefits, periodicadditions & terminal additions are payable based on the option that youselect. The policy is suitable for parents having children between the age 0-12children and parents in the age group 20-50 years old.

Met Bhavishya could be the ideal plan if:

This is a money back policy where lump sum amounts are paid to thelife assured to fund the educational needs of the child

There are two options A and B depending on the funding requirementto choose from depending on the requirement of the fund

Guaranteed additions of Rs 50 / Rs 1000 of sum assured, and terminaladditions of 20% of the guaranteed additions payable for every year

premium paid provided the policy is in force

In built Waiver of premium in case death of the life assured and thefixed term benefits will continue post the death of the life assured tothe beneficiary

The beneficiary in Met Bhavishya policy is the child The policy can be customised through 4 riders - Accidental Death

Benefit, Critical Illness (10 illness), Waiver of Premium (AccidentalDisability) and Term Rider


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Illustration

Mr Ajay is aged 26 year years old and works for a software company inBangalore. He was recently married to Sangeeta and has a 6 month year old

baby. Mr Ajay buys Met Bhavishya option B. He pays a premium of Rs51,030 per year. He has a sum assured of Rs 10,00,000.


Childs

agePayout

For Example for a

policy of Rs

10,00,000

17 20% of FA Rs.2,00,000

21 30% of FA Rs.3,00,000

23 50% of FA Rs.5,00,000

25

Rs 50 per Rs 1000 of Sum assured( Guaranteed additions ) and 20% ofGuaranteed additions For 25 years of

premium paying

Rs.15,00,000

In case of the unfortunate death of Mr Ajay

Sum assured of Rs 10,00,000 Waiver of all future premiums Fixed term benefits will continue as per the policy schedule

Other Conditions

Option A Option BMinimum age of child 0 0

Maximum age of child 8 12

Minimum entry age of parent 20 20

Maximum entry age of parent 50 50


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Minimum Face amount Rs 1,00,000Maximum Face amount : No LimitMinimum Annualised Premium Amount Rs 6000

Premium paying options

You have the choice of paying your premium either in yearly, half-yearly orquarterly modes, depending on your convenience

Tax Benefits

The Premium paid under this plan will qualify for deduction under Sec 80 Cof the income tax act 1961 and the returns are fully exempt under Sec 10 (10D)

General exclusion

In case the life insured commits suicide within 1 (one) year of thecommencement of the policy, no benefits outlined in the plan would be

payable.

Exclusions for Accidental Death Benefit, Term Rider and Waiver ofPremium

The Accidental Death Benefit, Term Rider & Waiver of Premium would notbe paid out in the following circumstances:

Self-inflicted injuries, suicide, insanity, immorality of the proposer, orhis committing any breach of law or being under the influence ofdrugs, liquor etc.

When the life insured is engaged in aviation or aeronautics other thanas a passenger on a licensed commercial aircraft operating on ascheduled route.

Due to injuries from war (whether war is declared or not), invasion,

hunting, other dangerous hobbies or activities, or having been on dutyin military, para-military, security or police organization.

Prohibition of rebates

Section 41 of the Insurance Act, 1938 states:

No person shall allow or offer to allow, either directly or indirectly, asan inducement to any person to take out or renew or continue an


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insurance in respect of any kind of risk relating to lives or property inIndia, any rebate of the whole or part of the commission payable or anyrebate of the premium shown on the policy, nor shall any person takingout or renewing or continuing a policy accept any rebate, except such

rebate as may be allowed in accordance with the publishedprospectuses or tables of the insurer.

Any person making default in complying with the provision of thissection shall be punishable with fine, which may extend to fivehundred rupees.

MetLife has a comprehensive plan that allows you to provide that all-important shelter for your family against lifes uncertainties.

MET Suraksha - TROP

Suitability

The plan is suitable for those who want

Low cost protection for a specified period Tax benefit throughout the premium paying term Return of premium with guaranteed additions at the end of the

premium paying term Multiple premium paying option Customisation with 2 riders - Accidental Death Benefit and Critical

Illness

Salient Features

Met Suraksha ( TROP ) has policy term of 15 & 20 year Met Suraksha has three premium paying options namely single, limited

(3 year limited pay) and regular pay for all policy terms The Premium modes available are: Annual, Semi-Annual, Quarterly,

Monthly and Payroll Savings Program (PSP) Guaranteed additions are at 10% of premiums (inclusive of policy fee)

paid (excluding extra premiums) paid on the maturity of the policy

Benefits

Death Benefit


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o The Death benefit for Met Suraksha - Term Assurance withreturn of premium is the sum assured

Maturity Benefit

o The Maturity Benefit for Met Suraksha TROP is the return ofpremium and 10% guaranteed additions

The premium paying option:-

The following option are available for Met Suraksha TROP:

o Single Pay.o 3 year limited Pay.

o Regular Pay.

Other Conditions

Minimum issue age Age 18 year last birthday

Maximum issue ageAge 50 years last birthdayMet Suraksha Level Term to 60

Maximum expiry age Age 65 years last birthday

Terms 15/20 years

Minimum sum

assuredRs.2,00,000

Maximum sum

assured

The maximum face amount will bedetermined on a case by case basis based onmedical and financial underwriting.

Minimum annual

premium

Rs2,500 p.a

Illustration

Mr Sameer is a 30 year old man working in an IT company inBangalore . He buys a Met Suraksha TROP policy with a sum assuredof Rs 20, 00,000 for a 20 year term . The total premiums paid would beRs 9620/- per annum. His wife Sunita is a beneficiaryIn case of the unfortunate death of Mr Sameer his wife Sunita will


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receive Rs 20,00,000 . At maturity Mr Sameer would receive Rs211640/ ( Premiums paid +Guaranteed additions )

Exclusions

In the event the Insured committing suicide, whether sane or insane atthat time, within one year from the effective date of insurance cover orthe date of the Policy or the date of the last reinstatement whichever islater, the benefit is restricted to the extent of refunding the premium(s)received without interest, if any, less any expenses incurred by us.

MET Suraksha

Suitability

The plan is suitable for those who want

Low cost protection for a specified period Tax benefit throughout the premium paying term Multiple premium paying option

Salient Features

Met Suraksha ( TA) has policy term of 5/10/15/20 /25 years and level

term to age 60 years. Met Suraksha has three premium paying options namely single, limited

(3 year limited pay) and regular pay for all policy terms The Premium modes available are: Annual, Semi-Annual, Quarterly,


Benefits

Death Benefit

o The Death benefit for Met Suraksha - Term Assurance is the sum

Maturity Benefit

o There is no Maturity Benefit of Met Suraksha

Premium paying option

The following option are available for MET Pension:


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o Single Pay.o 3 year limited Pay.o Regular Pay.

Other Conditions

Minimum issue age 18 Years Age Last Birthday

Maximum issue age

Met Suraksha - TA: Age 60 years lastbirthdayMet Suraksha Level Term to 60

Maximum expiry age

Met Suraksha - TA: Age 65 years lastbirthday

Met Suraksha Level Term to 60: Age 60years last birthday

Minimum sum

assuredFor Met Suraksha - TA: Rs.50,000

Maximum sum

assured

For Met Suraksha - TA: The maximum faceamount will be determined on a case by case

basis based on medical and financialunderwriting.

Minimum annualpremium

For Met Suraksha - TA: Rs.1,000 p.a.

Illustration

Mr Sameer is a 30 year old man working in an IT company inHyderabad . He buys a Met Suraksha policy with a sum assured of Rs20, 00,000 for a 10 year term . The total premiums paid would be Rs4500/- His wife Sunita is a beneficiary

In case of the unfortunate death of Mr Sameer his wife Sunita willreceive Rs 20,00,000 .

Exclusions

o In the event the Insured committing suicide, whether sane orinsane at that time, within one year from the effective date ofinsurance cover or the date of the Policy or the date of the last


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Age/Term 5 10 15

25 4609 6906 8704

35 5113 8278 11183

45 7916 14272 20733


Loan Interest: 11%

MET Mortgage Protector(LP)

Age/Term 10 15 20

25 1700 1675 1683

35 1948 2001 2093

45 3119 3430 3740

Other Conditions

To insure your family under Met Mortgage SP, you need to fulfill thefollowing conditions:

Minimum age of Entry 18, last birthday Maximum age of Entry 60, last birthday Maximum Maturity Age 65, last birthday The minimum face amount is Rs.50,000/- There is no limit on the maximum face amount Minimum Premium Amount As applicable to the minimum face

amount

General Exclusion

In case the life insured commits suicide within 1 (one) year of thecommencement of the policy, no benefits outlined in the plan would be

payable.

Prohibition of rebates


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Section 41 of the Insura

Final Project Report on MARKETING

Documents

Transcript of Final Project Report on MARKETING