First of all understand why internship in sales process and what is sales process. Selling 

Is a process involving the interaction between a potential buyer and a person hired by a company to sell its products to potential buyers. Sales is a recognized business profession, and sales professionals range from shoe salesman to investment bankers managing initial public offerings (IPOs) of companies where billions of dollars can be at stake.

Sales Process

Professional selling involves a series of seven distinct steps. 

Prospecting 

Involves finding and qualifying potential customers. Qualifying is the process of determining whether a potential customer has a need or want that the company can fulfill and whether the potential client can afford the product.

1.    Preparation Involves preparing for the initial contact with a potential customer. You will need to collect and study relevant information such as product descriptions, prices, and competitor information. You will also need to develop your initial sales presentation.

2.   Approach is the first face-to-face interaction you will have with the potential customer. In the premium approach, you give your prospect a gift at the beginning of the interaction. It may be a pen, a novelty item or company calendar, for example. Another method is the question approach, in which you ask a question to get the prospect interested. For example, 'would you have a problem making a 15% annual return on an investment?' You may also use the product approach, in which you give the prospect a sample to review. The idea behind all of these approaches is to get the prospect involved in the interaction quickly.

3.   Presentation Involves actively listening to the needs and wants of the potential customer and demonstrating how your product can meet those needs and wants.

4.   Handling objections is an important part of the process. Objections can be useful because they tell the salesperson what to focus upon in addressing a prospect's concerns. Successful salespeople learn how to overcome objections through preparation and having the right information at hand to address them.

5.   Closing Involves being able to identify closing signals from the prospect that indicate it's decision time. There are different approaches to closing. In the alternative choice close, you assume the sale and offer the prospect a choice such as, 'Will this be a cash or credit transaction?' An extra inducement close involves you offering something extra to get the buyer to agree, such as a discount or a free product. A standing room only close involves you informing the prospect that time is of the essence because some impending event, such as a price increase, will change the terms of the offer.

6.   Follow-up Involves you trying to build a long-term relationship with your customer for purposes of repeat sales. For example, you make contact with the customer some time after the sale and make sure the product was received and is in good condition. Again, the idea is not to sell at this stage, but to create a solid relationship for future sales.

  Tomorrow everyone of us going to be sell something. Today’s world is sales man’s world. You have to move to step by step in this process. I need all of you follow above sales step to convert case. I know the process is tough, but I need your daily follow ups in based on these steps. Based on the step follow-ups only your project gets evaluated.

Insurance Industry in India: Indian insurance is a flourishing industry, with several national and international players competing and growing at rapid rates. Thanks to reforms and the easing of policy regulations, the Indian insurance sector been allowed to flourish, and as Indians become more familiar with different insurance products, this growth can only increase, with the period from 2010 - 2015 projected to be the 'Golden Age' for the Indian insurance industry.

The insurance sector in India has become a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.Indian insurance companies offer a comprehensive range of insurance plans, a range that is growing as the economy matures and the wealth of the middle classes increases. The most common types include: term life policies, endowment policies, joint life policies, whole life policies, loan cover term assurance policies, unit-linked insurance plans, group insurance policies, pension plans, and annuities. General insurance plans are also available to cover motor insurance, home insurance, travel insurance and health insurance. Due to the growing demand for insurance, more and more insurance companies are now emerging in the Indian insurance sector. With the opening up of the economy, several international leaders in the insurance sector are trying to venture into the India insurance industry.

A brief history of the Insurance sector

The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912.

The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets.

Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate

the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies taken over by the central

government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.

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

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

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Indian Insurance: Sector Reforms

In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India.The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at "creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms…"In 1994, the committee submitted the report and some of the key recommendations included:

1) Structure Government 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 insurance companies should be given greater freedom to operate.

2) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter

the industry. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to 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 each

state.

3) Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance (Currently a part from the Finance Ministry) should be made

independent.

4) Investments

Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%.

GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time).

5) Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the

insurance industry The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition.

But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in 2000.The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.

Major Policy Changes

Insurance sector has been opened up for competition from Indian private insurance companies with the enactment of Insurance Regulatory and Development Authority Act, 1999 (IRDA Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory and Development Authority (IRDA) was established on 19th April 2000 to protect the interests of holder of insurance policy and to regulate, promote and ensure orderly growth of the insurance industry. IRDA Act 1999 paved the way for the entry of private players into the insurance market which was hitherto the exclusive privilege of public sector insurance companies/ corporations. Under the new dispensation Indian insurance companies in private sector were permitted to operate in India with the following conditions:

Company is formed and registered under the Companies Act, 1956; The aggregate holdings of equity shares by a foreign company, either by itself or through

its subsidiary companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance company;

The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business.

The minimum paid up equity capital for life or general insurance business is Rs.100 crores.

The minimum paid up equity capital for carrying on reinsurance business has been prescribed as Rs.200 crores.

The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.

Insurance companies:

IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsurer" for underwriting only reinsurance business.

Protection of the interest of policy holders:

IRDA has the responsibility of protecting the interest of insurance policyholders. Towards achieving this objective, the Authority has taken the following steps:

IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language; claims procedure in both life and non-life; setting up of grievance redressal machinery; speedy settlement of claims; and policyholders' servicing. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim.

The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims.

It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms and conditions under the policy. The advertisements issued by the insurers should not mislead the insuring public.

All insurers are required to set up proper grievance redress machinery in their head office and at their other offices.

The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract.

Consumer Awareness and Investment Behavior to Unit Link Insurance Plan (Survey you need to do)

While Buying ULIP, like a marriage, is a long Term relationship, the absence of comprehensible information about plans you Invest in is akin to marrying a stranger”

The very reason to start my report with above mention quote is to bring out the real meaning to my project title. Unit Link Insurance Plan is a much talked about topic in the current market. So in my project I would like to deal with various aspects of ULIP and what transparency do they hold in the eyes of the potential investor.

 A ULIP is a life insurance policy which provides a combination of risk cover and investment. So my project basically deals to understand   ULIP’S and what potential do they carry in the eyes of investors and what drives an investor towards a particular investment option. (Especially considering ULIP’S).

Further the project aims to make a detailed study of Unit Linked Insurance Plans (ULIPs) in the Indian context through a comparative analysis of ULIPs of some well known selected companies and in the process identify the strengths and weaknesses of IDBI FORTIS. The different selected companies along with whom comparison of IDBI Fortis ULIP Product is made are

1)      ICICI Prudential Life Insurance

2)      Life Insurance Corporation of India

3)      HDFC Standard Life

The comparative study is primarily based in terms of the various benefits offered viz. Death Benefits, Health benefits, Maturity Benefits, financial benefits & other benefits. The various parameters taken into consideration were flexibility, transparency, liquidity and the number of funds options available.

The main aim of research is to find out truth which is hidden and which has not been discovered as yet and so for this purpose a questionnaire is made through which I will try to analyze the below stated Objectives   from a collected responses of about 300 respondents of different age and income groups

Analysis of consumer Investment Behavior To Know what factors drives them towards a particular investment To find out their awareness and knowledge of ULIP plans and how they perceive

the benefits of this plan. To know the reasons for not investing in ULIPS and preferring other mediums for

investments. Brand awareness of IDBI Fortis Life Insurance Company and the ULIP Plan

offered by it and do they perceive ULIP Plans better over the simple life insurance Plan.

Finally after a detailed study we have found out the merits and demerits of the IDBI FORTIS and based on those we have given some recommendations to the company in areas where the company to has to really work on.

The Project helped me enhance my knowledge on various technicalities of the Indian insurance industry and gave me a broader prospective of various investment opportunities available in the market. Marketing concepts learnt in the classroom were implemented in a real life environment.

INTRODUCTION

In the commercial arena, the choice of an effective strategy is perhaps the most important and the toughest decision to take. The decision to select among the grand strategies and deciding upon which strategy will best meet the enterprise’s objectives is rendered complex by multiple considerations. The same is also true with the insurance companies in India who are constantly revamping their strategies and coming out with innovative options to stay in the competition. There were days when Life Insurance Corporation of India (LIC) was the only insurance company available to people in India and where people synonymies Insurance to LIC. Also since it was a Public Sector Undertaking (PSU) it has a great support from people. But now times have changed a lot of private players have entered into the fray.

 Even though LIC is still the market leader with more than over 60% of the market share, the private players are giving it a tough time. Since the last decade the market share of LIC had fallen down by about more than 20%. The new private players have started offering a variety of unlimited schemes right from insurance plans for a 30 day old baby to that of a 70 year old senior citizen. Also the private companies have started creating the importance and need of insurance in today’s life. They have started positioning their brands and are marketing their products in such a way the people have started feeling the need of security in their lives.

Taking into account the huge population and growing per capita income besides several other driving factors, a huge opportunity is in store for the insurance companies in India. According to the latest research findings, nearly 80% of Indian population is without life insurance covering while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subjected to weak social security and pension systems with hardly any old age income security. As per our findings, insurance in India is primarily used as a means to improve personal finances and for income tax planning; Indians have a tendency to invest in properties and gold followed by bank deposits. They selectively invest in shares also but the percentage is very small (4-5%). This in itself is an indicator that growth potential for the insurance sector is immense. It's a business growing at the rate of 15-20% per annum

India is a vast market for life insurance that is directly proportional to the growth in premiums and an increase in life density. With the entry of private sector players backed by foreign expertise, Indian insurance market has become more vibrant.

A ULIP is a life insurance policy which provides a combination of risk cover and investment. ULIPs have gained high acceptance due to attractive features they offer like flexibility, transparency, liquidity and a vast variety of fund option. During 2009-10, out of over Rs 1 lakh crores of total fresh insurance premiums, almost 80% to 85% had been generated from ULIP sales by the 23 life insurers Unit linked plans are suitable for all customer profiles; however as a general belief the risk adverse investors tend to choose traditional plans and an informed customer prefers a ULIP. ULIPs offer the kind of flexibility that no insurance product can.

ULIPs essentially combine the benefits of an insurance policy and a market-linked investment. Investors can select a ULIP with an equity-debt combination that is in line with their risk profile.  A risk-taking investor would typically select one with a high equity component, while a risk-averse investor would opt for a debt-heavy one. Simply put, ULIPs are structured in such a way that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency risk-taking investor would typically select one with a high equity component, while a risk-averse investor would opt for a debt-heavy one. Simply put, ULIPs are structured in such a way that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency.

So the project basically deals to understand the present market potential of ULIPs and how consumers consider ULIP as an investment option for their savings and also to make a comparative analysis of ULIP products of some Cream Insurance companies with the product offered by IDBI Fortis Company

 PURPOSEThe project is being done as a part of summer internship program of IBS Mumbai. The completion of the project is a partial fulfillment requirement for being awarded the Masters in Business Administration (MBA) degree from the university.

The main purpose to which the project aims is understand what  ULIP’S are and what potential do they carry in the eyes of investors and how much are investors  aware of ULIP’S in real sense and what drives an investor towards a particular investment option. Further the project also aims to analyze various competitive ulip products and make a comparison along with IDBI Fortis Wealthsurance Plan and to design a new ULIP product for IDBI Fortis Life Insurance Company.

SCOPE OF THE STUDYThe scope of the study aims to carry out both primary and secondary research.

Through primary research consumers investment pattern based on various parameters like income, age, occupation is done and there awareness and preferences about ULIP as an insurance product is to be considered.

Through Secondary research is comparative study of the Unit Linked Insurance Plans (ULIPs) of IDBI FORTIS Life Insurance Company with that of some major selected players in the Indian insurance market through a detailed analysis of their product brochures and various other details is done.

OBJECTIVES OF THE PROJECT

Analysis of consumer Investment Behavior To Know what factors drives them towards a particular investment To find out their awareness and knowledge of ULIP plans and how they perceive

the benefits of this plan. To know the reasons for not investing in ULIPS and preferring other mediums

for investments. To compare the Unit Linked Insurance Plans (ULIPs) of IDBI FORTIS with that

of some other selected companies. To identify the strengths and weaknesses of IDBI FORTIS and suggest areas

where it could focus more and improve upon. Brand awareness of IDBI Fortis Life Insurance Company and the ULIP Plan

offered by it.

 LIMITATIONS OF THE STUDY The project study is completely based on the survey conducted from respondents. 

For the study to be useful it is necessary that the respondents should give true response. At times the respondents may not give proper response. They may withhold certain data or may provide fake responses in respect of investment, income, etc which could make the survey response a bit lost.

Moreover the topic for my survey needs awareness regarding ULIPS which some times serves as a limitation while conducting survey as people who aren’t aware are not willing  to fill the questionnaire

The study is confined only to a small segment of the entire population due to monetary and time constraints

It is not always possible to evaluate companies under similar parameters since many companies deal with various businesses thus clubbing all the companies on the same parameters is not always possible

 RESEARCH METHODOLOGYThe techniques used for data collection are:

A. Internet surveys and

B. Questionnaire method

 

The following methodology has been followed to achieve the objectives of the project.

 Figure 1 Research Methodology 

SOURCES OF DATA

In the data collection method, we have collected both primary and secondary data to meet our objectives

Primary Data: The primary data was collected by a survey based on the questionnaire. It was formulated on the basis of information carefully gathered by me about the various mindsets of the people. This questionnaire was mainly formulated to target the common man to see his perception and awareness of various investment options available. The number of respondents targeted was around 300 and the survey was conducted through live questionnaire filling and internet responses by sending the questionnaire link to the respondents.

 Secondary Data: The secondary data was collected directly from the companies and their websites and internet surveys. Also a lot of similar research studies and journals have been referred to.

RESEARCH ANALYSIS TOOLSFor the analysis of responses collected from respondents Ms Excel is used the various tools used in Excel are:

Pivot Tables ( For Cross Tabulation) Preparing Simple Tables And Charts for Comparison

What are Pivot Tables

In data processing, a pivot table is a data summarization tool found in data visualization programs such as spreadsheets (for example, in Microsoft Excel Among other functions, pivot-table tools can automatically sort, count, and total the data stored in one table or spreadsheet and create a second table (called a "pivot table") displaying the summarized data. Pivot tables are also useful for quickly creating cross tabs. The user sets up and changes the summary's structure by dragging and dropping fields graphically.

What is Cross Tabulation?

Cross tabulation is the process of creating a contingency table from the multivariate frequency distribution of statistical variables. Heavily used in survey research, cross tabulations (or crosstabs for short) can be produced by a range of statistical packages, including some that are specialized for the task. Survey weights often need to be incorporated. Unweighted tables can be easily produced by some spreadsheets and other business intelligence tools, where they are commonly known as pivot tables.

LITERATURE STUDY

INSURANCE

Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks which can be insured against include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance.

CHARACTERISTICS OF INSURANCE1)      Sharing of risks

2)      Cooperative device

3)      Evaluation of risk

4)      Payment on happening of a special event

5)      The amount of payment depends on the nature of losses incurred.

HISTORY OF INDIAN INSURANCEInsurance has a long history in India. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras:

a.      Pre Nationalization

b.      Nationalization and

c.       Post Nationalization

Life Insurance was the first to be nationalized in 1956. Consolidating the operations of various insurance companies formed Life Insurance Corporation of India. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the background of Economic Reform process, which commenced from 1991. For this purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001. (Source: www.irdaindia.org)

CAPITAL REQUIREMENTS AND FOREIGN PARTICIPATIONMinimum capital requirement for direct life and Non-life Insurance company is INR1000 million and that for reinsurance company is INR2000 million. A maximum 26% foreign equity stake is allowed in direct insurance and reinsurance companies. In the 2004-05 budget, the Government proposed for increasing the foreign equity stake to 49%.

LIFE INSURANCEAs is evident from its very name, it deals with insurance of human life. “Life insurance corporation of India”- a public sector undertaking has the monopoly in this sector since its nationalization. In our wordily life, whenever there is uncertainty, there is an involvement of risk. The instinct for security against such risk is one of the basic motivating forces determining human attitudes. As a squeal to this quest for Security, the concept of insurance must have been born. The urge to provide insurance or protection against the loss of life & property must have prompted people to make some sort of sacrifice willingly in order to achieve security through “COLLECTIVE CO-OPERATION”, in this sense; story of insurance is probably as old as the story of mankind. All life insurance companies in India have to comply with the strict regulations laid out by Insurance Regulatory and Development Authority of India (IRDA). Therefore there is no risk in going in for private insurance players. In terms of being rated for financial strength like international players, only ICICI Prudential is rated by Fitch India at National Insurer Financial Strength Rating of AAA (Ind) with stable outlook indicating the highest claims paying ability rating.

Right now there are a total twenty three life insurance companies operating in India, of which one (Life Insurance Corporation) is a Public Sector Undertaking and the remaining twenty are all private sector enterprises. (Source: www.irdaindia.org)

Life Insurers

Sr. No. Insurers Foreign Partners

Regn. No.

Date of Registration &Year of Operation

1 HDFC Standard Life Standard Life 101 23.10.200 2000

Insurance Co. Ltd. Assurance, UK 0 -01

2Max New York Life Insurance Co. Ltd. New York Life, USA 104

15.11.2000

2000-01

3ICICI-Prudential Life Insurance Co. Ltd. Prudential , UK 105

24.11.2000

2000-01

4Om Kotak Life Insurance Co. Ltd.

Old Mutual, South Africa 107

10.01.2001

2001-02

5Birla Sun Life Insurance Co. Ltd. Sun Life, Canada 109

31.01.2001

2000-01

6Tata-AIG Life Insurance Co. Ltd.

American International Assurance Co., USA 110

12.02.2001

2000-01

7SBI Life Insurance Co. Ltd.

BNP Paribas Assurance SA, France 111

29.03.2001

2001-02

8ING Vysya Life Insurance Co. Ltd.

ING Insurance International B.V., Netherlands 114

02.08.2001

2001-02

9Allianz Bajaj Life Insurance Co. Ltd. Allianz, Germany 116

03.08.2001

2001-02

10Metlife India Insurance Co. Ltd.

Metlife International Holdings Ltd., USA 117

06.08.2001

2001-02

11Reliance Life Insurance Co. Ltd. (Earlier AMP Sanmar Life Insurance Co. from 3.1.2002 to 29.9.2005)

121 03.01.2002 2001-02

12 AVIVAAviva International Holdings Ltd., UK 122

14.05.2002

2002-03

13Sahara Life Insurance Co. Ltd. --- 127

06.02.2004

2004-05

14Shriram Life Insurance Co. Ltd. Sanlam, South Africa 128

17.11.2005

2005-06

15Bharti AXA Life Insurance Co. Ltd. AXA Holdings, France 130

14.07.2006

2006-07

16Future Generali India Life Insurance Company Ltd. Generali, Italy 133

04.09.2007

2007-08

17IDBI Fortis Life Insurance Company Ltd. Fortis, Netherlands 135

19.12.2007

2007-08

18Canara HSBC OBC Life Insurance Company Ltd. HSBC, UK 136

08.05.2008

2008-09

19Aegon Religare Life Insurance Company Ltd. Religare, Netherlands 138

27.06.2008

2008-09

20DLF Pramerica Life Insurance Co. Ltd.

Prudential of America, USA 140

27.06.2008

2008-09

21 Star Union Dai-ichiDai-ichi Mutual Life Insurance, Japan 142

26.12.2008

2008-09

22 IndiaFirst life insurance company

Legal & General Middle East Limited,

143 05.11.2009

2009-10

UK

23Life Insurance Corporation of India --- 512

01.09.1956

1956-57

Figure 2 Life Insurance Company

 

COMPANY PROFILE Figure 3  IDBI Fortis Stake Breakup

 About IDBI Fortis Life Insurance

IDBI Fortis Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector banks and Fortis Insurance International, a multinational insurance giant based out of Europe.

 In this venture, IDBI owns 48% equity while Federal Bank and Fortis own 26% equity each. At IDBI Fortis, they endeavor to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery they intend to deliver world-class wealth management, protection and retirement solutions to Indian customers.

Started in March 2008 In just five months of inception became one of the fastest growing new insurance

companies to garner Rs 100 Cr in premiums. The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners.

In only its first year of operations, as on March 31st 2009, the company collected more than 328 Cr in premiums – highest first year collection in the history of Indian life insurance industry, through over 87000 policies and over Rs 2825Cr in Sum Assured.

 About the sponsors of IDBI Fortis Life Insurance Co Ltd

 IDBI BANK

Key MilestonesTransformation from DFI to Universal Bank

1964 – Set up as subsidiary of RBI under Act of Parliament 1976 – Ownership transferred to Central Government 1982 – Exim Bank spun off

1990 – SIDBI spun off 1993 – Set up IDBI Capital 1994 – Set up IDBI Bank 1995 – IPO to bring Govt stake to 72% 

2000 – Capital restructuring reduces Govt stake to 58% 2003 – Tata Home Finance acquired 2004 – Act repealed and granted banking licence 2005 – IDBI and IDBI Bank merge. Govt stake at 53%

Banking                                           World Class Banking in India

 

IDBI Bank – one of the youngest and fastest growing new generation banks in India Net Profit as on 31st March 2007 Rs. 630 an increase of 12.3 % to previous year Total Business Rs. 105825 crores an increase of 34.4 % to previous year Depositor base Rs. 43354 crores an  increase of 66.7 % to previous year Advances Rs. 62471 crores an increase of 18.4 % to previous year Customized products and multi-channel access Wide suite of retail and corporate asset and liability products Branch Banking, ATM Banking, Phone Banking, Internet Banking, Mobile Banking Technology Leader in banking industry Over 5 million retail customers

                     1m banking customers, 4m bond investor

FORTIS

About Fortis

Fortis is an international provider of banking and insurance services to personal, business and institutional customers.

The company delivers a total package of financial products and services through its own high-performance channels and via intermediaries and other partners.

Fortis ranks among Europe’s top 20 financial institutions, with a market capitalization of EUR 43 billion. With excellent solvency, a presence in over 50 countries and a dedicated, professional workforce of 60,000, the company combines global strength with local flexibility.

 Fortis ranks among the top 15 financial institutions in Europe

Market Position

Retail Banking

Market leadership in Benelux – one of Europe’s wealthiest regions No. 2 in retail financial services and No. 1 credit card issuer 4 million credit card holders in Benelux and Turkey Strong footprint in Europe: 1,600 branches, 44 credit shops in Germany and Poland Post office network in Belgium and Ireland  

  Merchant & Private Banking

Strong leadership position in Benelux Leading worldwide position in specialized sectors (top 10 in renewable energy and in

offshore oil and gas services) Worldwide leader in trust and corporate services Top 20 worldwide in assets under management from high net worth individuals Leading service provider in funds administration (worldwide) and in derivatives clearing

(Europe) Top European player in cross-border leasing and factoring

 FEDERALBANK

A dominant regional player with national presence

 Key Milestones:

1931 – Incorporated as Travancore Federal Bank Limited 1945 – Reorganized Bank starts functioning from Always 1947 – Name changed to “The Federal Bank Limited” 1959 – Licensed under Banking Companies Act , 1949 1964 – 68 :  Took over 5 local banks 1970 – Became a scheduled commercial bank 1972 – Became authorized dealer in foreign exchange 1993 – Private placement of equity with ICICI group 1994 – Public issue. Oversubscribed by 60x 1996 – Rights issue. Overwhelming response 2000 – Anywhere & Internet Banking. Depository Services 2002 – All branches fully computerized 2003 – Mobile alerts. International Visa card 2004 – 100% networking of branches 2006 – GDR issue of Rs. 350 crores (2 crore shares)

 STRENGTHS:

One of the leading private sector bank in India History of 60 years of confidence and trust 50 Lakhs loyal customers 4 Lakhs Non Resident Indian customers A pan Indian presence with 458 branches in 23 states

Balance sheet size of Rs. 18766 crores Total Business over Rs. 26962 crores

 PRODUCT RANGE OF IDBI FORTISIDBI Fortis offers a variety of products targeting every customer right from a 3 month child to a 70 year senior citizen. All the products have been classified majorly under four plans namely

Wealthsurance Homesurance Bondsurance Retiresurance Incomesurance

 

INCOMESURANCE

Incomesurance is loaded with lots of benefits which ensure that you get Guaranteed Annual Payout along with insurance protection which will help you to reach you goals with full confidence. Incomesurance™ Plan is very flexible and allows you to customize your Plan as per your individual and family’s future requirements. Moreover it also allows you to choose Premium Payment Period, Payout Period, Payout Options and more.

WEALTHSURANCE

The Wealthsurance Foundation Plan enables the customer to save and build wealth to meet your financial goals. However, unlike other investment alternatives, it also enables him to achieve his wealth goals even in the event of unexpected death, accidents, disablement or serious illness. The Wealthsurance Foundation Plan can ensure that his plans for wealth creation are achieved by protecting that plan with insurance benefits.

 HOMESURANCE

The Homesurance Protection Plan is a reducing term plan, which provides insurance cover equal to the outstanding balance of your home loan. In the unfortunate event of death of the home loan borrower, the insurance cover enables repayment of the home loan liability.

BONDSURANCE

Bondsurance is a single premium plan which allows you to make a one-time investment and get a guaranteed amount on maturity. You can choose a maturity period of 5 or 10 years for your investment. At the end of the chosen period, you will receive a guaranteed maturity amount. Besides the guaranteed maturity amount, Bondsurance also provides a life insurance cover. In

 

case of death before the maturity date, a Death Benefit which is also guaranteed will be paid. Thus you can get life insurance cover, while earning an assured return on your investment. 

RETIRESURANCE

Retiresurance is a pension plan without life cover that allows a longer policy term so that the customer’s investments can get the benefit of compounding. The customer has to choose any vesting age between 40-75 yrs. The vesting age chosen can also be postponed or preponed within the above range by informing the company 30 days in advance. It is especially for people who wish to lead a happy and prosperous life even after their retirement.

UNIT LINKED INSURANCE PLANSUnit linked insurance plan (ULIP) is a life insurance solution that provides the client with the benefits of protection and flexibility in investment. It is a solution which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. The investment is denoted as unit and is represented by the value that it has attained called as Net Asset Value (NAV).

ULIPs are a category of goal-based financial solutions that combine the safety of insurance protection with wealth creation opportunities. In ULIPs, a part of the investment goes towards providing a life cover. The residual portion of the ULIP is invested in a fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by the customer.

Simply put, ULIPs are structured in such that the protection element and the savings element are distinguishable, and hence managed according to your specific needs. In this way, the ULIP plan offers unprecedented flexibility and transparency.

ULIPs came into play in 1960s and became very popular in Western Europe and America. The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it offers to the clients. 

As time progressed the plans were also successfully mapped along with life insurance needs to retirement planning .In today’s times ULIP provides solution for all the needs of a client like insurance planning, financial needs, financial planning for children’s future and retirement

 

 Premium options under ULIP’S:

 In single premium ULIP, you need to pay a single payment and you will enjoy the benefits throughout the policy term. In case of regular premium, you need to pay premium on regular basis, it can be paid by annual, half annual, quarterly and monthly mode. In terms of investment, both products offer similar options like equity, debt and liquid. In the initial years of ULIP, single premium product offer better returns than regular premium product. But, its balance power shifts down latter. But this is not in effect; the product is sold very aggressively due to IRDA norms. Regular premium ULIP products are also good in various factors such as affordability, tax benefit and large return.

 

WORKING OF ULIPSIt is critical that you understand how your money gets invested once you purchase a ULIP.

When you decide the amount of premium to be paid and the amount of life cover you want from the ULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known as the Premium Allocation charge, and varies from product to product. The rest of the premium is invested in the fund or mixture of funds chosen by you. Mortality charges and ULIP administration charges are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the ULIP fund management charges are adjusted from NAV on a daily basis.

Since the fund of your choice has an underlying investment – either in equity or debt or a combination of the two – your fund value will reflect the performance of the underlying asset classes. At the time of maturity of your plan, you are entitled to receive the fund value as at the time of maturity.

The pie-chart below illustrates the split of your ULIP premium:

 Figure 4 Split of ULIP Premium

 

CHARGES UNDER ULIPAllocation  Charges

These are the charges that are represented as a percentage of the regular or single contribution

paid. In case of a regular contribution plan, it is usually high in the first year to pay for the distribution cost. This charge pays for the issuance and for distribution commissions. These charges are running for the policy.

Administrative Charges

These are charges that are levied for the administration of the policy and the related cost of administration of the insurance company, itself. They are more related to the cost like IT, operational, etc cost of continuing the policy.

Fund Management Charges

These are the charges for buying and selling debt and equity. These are the charges are adjusted in NAV itself.

Mortality Charges

This covers the cost of providing life protection for the insured and may be paid once at the start of the policy for a recurrent manner for example this charges levied to provide the insurance cover under the plan. Normally these charges are one year charges as per the age of the holder.

Rider charges

Rider charges are similar in nature to the mortality charges as they are levied to pay for the other protection benefits that the policy holder has chosen for- like the critical illness benefit or the accident benefit, etc.

Surrender Charges

When the policy holder decides to surrender the policy or partially withdraw some of the units for cash, a surrender charge may be apply. Surrender charges are used to cover initial expenses that have been incurred by the company but not yet recovered from the policyholder yet.

FEATURES OF A UNIT LINKED PLAN ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan is a one stop solution providing:

1)      Life Protection

Can any one of us deny that we do not need life protection? Honestly none can especially when we see the fatal events that occur so frequently around us. However the need may vary and ULIP provides the benefit of adjusting according to the varying need of the client.

 

This when mapped to life insurance needs gives us a graph:

 Therefore as our responsibilities grow the need for life protection grows and when these responsibilities are successfully executed the need

reduces.

 2)      Investment and Savings

Undoubtedly all of us look for saving the money that we have and to ensure that the investment that we make should create value for us and more the better.

Many life insurance plans present in the market do not provide justice to this important need of the client. ULIP on the other hand has all the composition of satisfying investment and savings needs of the clients. ULIP provides the client with the option of investing as per personal risk profile and get returns accordingly. There are options of funds where in the client can put money in various categories:

 

 

 Equity Funds Primarily invested in company

stocks with the general aim of capital appreciation.

Medium to High

 

Income, Fixed Interest and Bond Funds                    

Invested in corporate        bonds, government securities and other fixed income instruments.

Medium

Cash Funds Sometimes known as Money Market Funds — invested in cash, bank deposits and money market instruments

 Low

Balanced Funds Combining equity investment with fixed interest instruments

Medium

 3)      Flexibility 

a.      Adjustable life cover

b.      Investment option

 4)      Options to take additional cover against (various Riders)

 a.      Death due to accident

b.      Disability

c.       Critical Illness

d.      Surgeries

5)      Liquidity

This facility makes the ULIP a very practical insurance in current times. Most life insurance plans do not provide the policyholder the facility of withdrawing money in case the need arises. Unit Linked Plans provide you easy access to your money as and when you may require. One can redeem the units after a particular period of time as defined by the plan, as per the need. ULIP allows Partial withdrawal and withdrawal at maturity

6)       Tax planning

ULIP’s qualify for tax benefits under Section 80C of the Income Tax Act. This holds good for any kind of plan chosen by the investor. In Mutual Funds, only investments in tax-saving funds (also referred to as equity-linked savings schemes) are eligible for Section 80C benefits.

7)      Variable investment options:

Facility to switch Investment from one option to another.

8)      Allow Top-ups:

Additional benefits to pay more money and increase sum insured.

 FACTORS INFLUENCING THE BUYING OF UNIT LINKEDINSURANCE PLAN (ULIPs)The degree of buying of ULIPs insurance varies from person to person. It depends upon many factors. The factors can be classified into personal, social, economic, psychological and company related variables. Age and experience of policyholder are personal factors, while the co- education is a social factor. Economic factors include occupation, income and wealth, and the psychological factors consist of perception, satisfaction about the services rendered by insurance

companies, the impact of advertisement and personal selling made by insurance companies on policyholders. The company related variables are the promotional efforts to sell the policies to prospective buyers. These include advertisement and personal selling too.

REFERENCESwww.idbifortis.com

www.irda.com

www.livemint.com

www.economictimes.com

www.freeonlinesurvey.com

www.business-standard.com/india/news/ulips-to-get.../387319/

www.dnaindia .com

www.bemadeals.com

www.apnainsurance.com

www.myinsurance.com

www.google.com

www.rediff.com

www.merinews.com/article/ulips-a-good...in.../15801007.shtml

www.idbifortis.com

www.hdfcstandardlife.com

www.licindia.com

www.bajajallianz.com

www.iciciprulife.com

http://www.financialexpress.com/search/news/ulips+flexible+to+the+core/

http://www.marketsmonitor.com/Report/IM588_related.htm

 

Magazines Referred:

Money Outlook Business India

 

Books:

Investing Basics Business Research Methods ( By  Zikmund)