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A COMPARITVE STUDY ONTRADITIONAL PRODUCTS AND UNIT

LINKED PRODUCTS

At

Submitted by: ANU YADAV

FOR PARTIAL FULFILLMENT OF MASTERDEGREE OF HUMAN RESOURCE

MANAGEMENT


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Submission yea !""#$%"

PRE&ACE

For a management student theoretia! "no#!edge as #e!! as$ratia! orientation e%$oses onese!& to e%$erienes' onean again (e mastering it is (est $ossi(!e time)

The tit!e o& m* 'o(e)tis +

*A Com'aati+e Study on Taditiona, 'odu)ts -Unit Lin.ed 'odu)ts*

During this $ro,et re$ort I ha-e tried m* (est to gain some-a!ua(!e "no#!edge . e%$eriene . a!so tried to gi-e some-a!ua(!e suggestion to the organi/ation)


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E/ECUTIVE SUMMARY

This is a $ro,et re$ort on the to$i *Com'aati+e Study on Taditiona,Podu)ts and Unit Lin.ed Podu)ts o0 S1I Li0e2*

S0I Li&e insurane om$an* #as esta(!ished in the *ear 1223 #ith aommitment to e%$and and resha$e the !i&e insurane industr* in India) Theom$an* #as amongst the &irst $ri-ate setor insurane om$anies to (egino$erations a&ter reei-ing ontro! &rom IRDA)

The om$an* has #ide range o& $roduts and has dri-en its gro#th aross aross4setion o& $eo$!e and ities) S0I Li&e is a ,oint -enture (et#een State 0an"o& India and Cardi&& SA o& Frane) S0I 0an" has 567 sta"e in the om$an* andCardi&& has 18 7) 0* the time om$an* has rossed the 9 mi!!ion $o!i*mi!estones #ith a $remium inome o& 325: rores and a tota! sum assured o&more than :6222 rores) Toda*' the om$an* has esta(!ished itse!& as the No) 3

$ri-ate !i&e insurer in the ountr* and -oted India;s most trusted $ri-ate !i&einsurane (rand)

Pu'ose:

The $ur$ose o& this re$ort #as to ana!*/e and om$are the Traditiona!and Unit Lin"ed $roduts o& S0I Li&e)


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To "no# the a#areness o& Traditiona! and unit !in"ed $roduts$re-ai!ing in the mar"et)

&i0t3 C3a'teonsists o& Data ana!*sis and Inter$retation re!ated to ustomersur-e*)

Si4t3 C3a'teonsists o& &indings #hih are dra#n on the (asis o& datainter$reted in the $re-ious ha$ter and !imitation o& the stud*) The main &indings#ere+3) Ma%imum o& $eo$!e $re&erred unit !in"ed $!an (eause o& the &o!!o#ing

reason+

Short Term+ It is the (est &eature o& unit4!in"ed $!an' #hih #as not$resent in traditiona! $!an) For e%am$!e+ In the unit !in"ed $!an hereare t#o $roduts !i"e) Unit $!us 4 II)

In the Unit P!us+ There is no maturit* date) An* Time a&ter three

*ear o& ommenement one an ma"e $artia! or om$!ete#ithdra#a!s as no $ena!t*)

Unit P!us II+ Other $a*ing the $remium &or 6 *ears one an#ithdra#a! #ho!e mone* #ith interest a&ter 6 *earns

F!e%i(i!it* >In-estment O$tion?

In the Unit Lin"ed $!ans there are more &!e%i(i!ities)

One an inrease his death (ene&it)

F!e%i(!e Contri(ution+ One an Inrease or derease has annua!ontri(ution) The ma%) Derease in ontri(ution an (e u$ to 127o& the Initia! ontri(ution)

1) LIC and S0I are the t#o most "no#n (rands in the mar"et)9) Through the stud* it #as &ound that the main $ur$ose o& (u*ing insurane

is In-estment)

Se+ent3 C3a'teonsist o& suggestions . Limitations A!! the om$an* shou!d ome out o& a Unit Lin"ed $rodut that shou!d aid

e-er* setion o& the soiet*)

The ad-isors shou!d (e made a#are and eduated so that the* ane%tend their ser-ies not on!* in terms o& o!!etion o& $remium he@ues&rom the $o!i* ho!ders (ut a!so to eduate them a(out the insurane andthe !atest Non Traditiona! $roduts)

The om$an* shou!d target the !o#er segment ustomers a!so


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CONTENTS

C5APTER % 6 Intodu)tion

3)3 Tit!e)) 33)1 Rationa!e o& stud*)33)9 Signi&iane o& the stud*) 33)6 So$e o& the stud*13): Limitation)) 1

C5APTER ! $ Industy 'o0i,e

1)3 Introdution to insurane)) 91)1 Be* Cha!!enges 32

C5APTER 7 $ O8ani9ation 'o0i,e

9)3 0a"ground o& om$an*)) 319)1 Produt)) 3:9)9 Produt om$arison) 35

C5APTER $ Resea)3 Met3odo,o8y

6)3 Tit!e) 16)1 O(,eti-es) 16)9 Researh Design))16)6 Sam$!e Design) 16): Soures o& Data 1

C5APTER ; $ Data Ana,ysis - Inte'etation

:)3 Charts) 92

C5APTER < $ &indin8s

C5APTER = $ Su88estions

APPENDI/


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C3a'te 6 %

INTRODUCTION


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INTRODUCTION

%2% Tit,e

A Com$arati-e stud* on Traditiona! $roduts S Unit Lin"ed Produts o&S0I Li&e

%2! Rationa,e o0 study

To $ut into $ratie the too! and tehni@ue !earned theoretia!!* in the!ass room)

To ha-e $ratia! e%$osure to the &ie!d and &ae the ground rea!it*

To understand the rea! insurane #or!d

%27 Si8ni0i)an)e o0 t3e Study

Fo!!o#ing is the signi&iane &e!t (* the Researher #hi!e doing thisPro,et)

TO T5E RESEARC5ER

It $ro-ided an o$$ortunit* to understand the im$ortane o& -arious &atorsuh as t*$e o& $o!i*' term o& $o!i*' sum assured amount et) &or the sa!eo& !i&e insurane $roduts)

It ga-e a hane to use the one$tua! "no#!edge in atua! en-ironmentin $re$aring the researher to use the "no#!edge in his &uture endea-ors)

It ga-e an insight on the To$i !i"e $o!iies a#areness' $o!iies $re&erene'and t*$e o& in-estment $!an' #hih #ere o& $rime im$ortane &rom the

mar"eting $oint o& -ie#)

It he!$ed in assessing the &ators' #hih in&!uene the (u*ing (eha-ior andde&ining the !a*er itse!&)


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TO T5E COMPANY

The stud* $ro-ided the $resent status o& the om$an* and its $rodutsin the mar"et)

The stud* $ro-ided the (ase &or &urther assessment and om$arati-e

ana!*sis o& om$an*s $rodut against other om$an*s $roduts)

It $ro-ided the in&ormation a(out the #ea"ness and strengths o& theom$an*)

%2 S)o'e o0 t3e study

The stud* #as onduted among the !ients o& S0I Li&e Insurane Co) Ltd)'Udai$ur) The stud* #as onduted &rom 3stMa* to 92thune 1225)

%2; Limitations o0 t3e study

The stud* #as restrited to theoretia! ground on!* so it #asdi&&iu!t to dra# the true inter$retations o& the stud*)

The on!usion arri-ed at are (ased on a -er* !esse%$eriene o& researher in this &ie!d)


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C3a'te 6 !

INDUSTRY PRO&ILE


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INDUSTRY PRO&ILE

!2% Indian Insuan)e Industy $ Intodu)tion

India is the !argest demora* in the #or!d ha-ing a $o$u!ation more than one(i!!ion) It is :th !argest in the #or!d in terms o& Purhasing Po#er Parit* >PPP?)Indias GDP gro#th rate is o-er 8 $erent $er *ear on a-erage &or the !astdeade and sa-ing rate is around 18 $erent o& GDP)

Through Indias eonomi de-e!o$ment' it (eomes the most !urati-einsurane mar"ets in the #or!d) 0e&ore the *ear 3 there #ere mono$o!* o&state run Li&e Insurane Cor$oration o& Indian >LIC? in !i&e insurane setorand Genera! Insurane Cor$oration o& India >GIC? #ith its &our su(sidiaries ingenera! setor) In the #a"e o& re&orm $roess and $assing InsuraneRegu!ator* De-e!o$ment At >IRMA? through Indian Par!iament in 3'Indian Insurane #as o$ened &or $ri-ate om$anies)

INDUSTRY PRO&ILE O& LI&E INSURANCE

Insurane is an Rs)622 (i!!ion (usiness in India' and together #ith (an"ingser-ies adds a(out 57 to India;s GDP) Gross $remium o!!etion is a(out 17 o&GDP and has (een gro#ing (* 3:4127 $er annum) India a!so has the highestnum(er o& !i&e insurane $o!iies in &ore in the #or!d and tota! in-esti(!e &unds#ith the LIC are a!most J7 o& GDP )Ket more than three4&ourth o& India;sinsura(!e $o$u!ation has no !i&e insurane or $ension o-er) Hea!th insurane o&an* "ind is neg!igi(!e and other &orms o& non !i&e insurane are muh (e!o#internationa! standards)

To ta( the -ast insurane $otentia! and to mo(i!i/e !ong term sa-ings #e needre&orms #hih in!ude re-ita!i/ing and restruturing o& the $u(!i setorom$anies' and o$ening o& the $u(!i setor om$anies' and o$ening u$ thesetor to $ri-ate $!a*ers) A statutor* (od* needs to (e made to regu!ate themar"et and $romote a hea!th* mar"et struture) Insurane Regu!ator*

De-e!o$ment Authorit* >IRA? is one suh (od*' #hih he"s on thesetendenies) IRDA ro!e om$rises o& &o!!o#ing three &untions+

Protetion o& onsumer;s interestTo ensure &inania! soundness and so!-en* o& the insurane industr*and to ensure hea!th* gro#th o& the insurane mar"et)


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>>>2idaindia2)om

?3at is Insuan)e@

Insurane is a ontrat (et#een t#o $arties #here(* one $art* a!!ed insurerunderta"es in e%hange &or a &i%ed sum a!!ed $remiums' to $a* the other$art* on ha$$ening o& a ertain e-ent)

Insurane is a $rotetion against a &inania! !oss arising on the ha$$ening o&an une%$eted e-ent) Insurane Com$anies o!!et $remium to $ro-ide &orthis $rotetion) A !oss is $aid out o& this $remium o!!eted &rom the insuring$u(!i) The insurane om$an* ats as a trustee to the amount o!!etedthrough $remium)

In addition to ser-ing as a $roteti-e o-er' !i&e insurane ats as a &!e%i(!emone*4sa-ing sheme' #hih em$o#ers *ou to aumu!ate #ea!th4to (u* ane# ar' get *our hi!dren married and e-en retire om&orta(!*)

Insurane is genera!!* !assi&ied in three main ategories' >i? Li&e Insurane'>ii? Hea!th Insurane and >iii? Genera! Insurane)

To get insurane an indi-idua! or an organi/ation an a$$roah to aninsurane om$an* diret!*' through Insurane Agent o& the onernedom$an* or through Intermediaries

1ene0its o0 Insuan)e

Insurane is the instrument o& Seurit*' sa-ing and $eae o& mind) It $ro-idesse-era! (ene&its (* $a*ing a sma!! amount o& $remium to an insuraneom$an* as+

Sa&eguards onese!& and ones &ami!* &or &uture re@uirements)

Peae o& mind in ase o& &inania! !oss)

Enourage sa-ing)

Ta% re(ate)

Protetion &rom the !aim made (* reditors)

Seurit* against a $ersona! !oan' housing !oan or other t*$es o& !oan)

Pro-ide a $rotetion o-er to industries' agriu!ture' #omen and hi!d)


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In this eonomi re&orm $roess the Insurane Com$anies #i!! (oost thesoioeonomi de-e!o$ment $roess) The huge amount o& &unds that #i!! (e atthe dis$osa! o& Insurane Com$anies #i!! (e direted as desired a-enues !i"ehousing' sa&e drin"ing #ater' e!etriit*' $rimar* eduation and in&rastruture) The

gro#th o& the de(t mar"et #i!! a!so get a (oost) A(o-e a!! the $o!i*ho!ders #i!!get (etter $riing o& $roduts &rom om$etiti-e insurane om$anies)

Li&e insurane is uni-ersa!!* a"no#!edged to (e an institution' #hihe!iminates ris" and $ro-ides the time!* aid to the &ami!* in the un&ortunate e-ento& death o& the (read#inner)

Li&e Insurane is a ontrat &or $a*ment o& a sum o& mone* to the $ersonassured >or nominee? on the ha$$ening o& the e-ent insured against) Theontrat $ro-ides &or the $a*ment o& $remium $eriodia!!* to the InsuraneCom$an* (* the assured) The ontrat $ro-ides &or the $a*ment o& an amount

on the date o& maturit* or at s$ei&ied dates at $eriodi inter-a!s or at un&ortunatedeath' i& it ours ear!ier)

There are some (ene&its o& !i&e Insurane as+

Pote)tion:Li&e Insurane guarantees &u!! $rotetion against ris" o& death o& theassured) In ase o& death' &u!! sum assured is $a*a(!e)

Lon8 Tem Sa+in8:Li&e insurane enourages !ong term sa-ing) 0* $a*ing asma!! $remium in eas* insta!!ments &or a !ong $eriod a handsome sa-ing an (eahie-ed)

Liuidity:Loan an (e o(tained against a $o!i* assured #hene-er re@uired)

Ta4 1ene0it:Ta% re!ie& in inome ta% and #ea!th ta% an (e a-ai!ed on the$remium $aid &or Li&e Insurane)

0* the *ear 3:8' 3:6 Indian insurane' 38 non4Indian insurane and 5:$ro-ident soieties #ere arr*ing on Li&e insurane (usiness in India) On 3stSe$tem(er 3:8 a!! the Insurane Com$anies #ere nationa!i/ed) On Se$tem(er3:8' Indian Par!iament $assed LIC At and the state run Li&e InsuraneCor$oration o& India >LIC? has he!d the mono$o!* in ountries !i&e insuranesetor)

In the *ear 3' the Insurane Regu!ator* De-e!o$ment At >IRMA? #as$assed in Indian Par!iament) 0* this at a door #as o$en &or $ri-ate om$anies#ith &oreign e@uit* Li&e Insurane) 0* this at an Indian $romoter an in-esteither #ho!!* in' an insurane -enture or team u$ #ith a &oreign insurer' #ith a


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a$ o& 18 $erent o& e@uit* &or a &oreign $artner) No# as $er the !atest Finane0i!! this In-estment o& FDI an go u$ to 6 Perent)

PRIVATE PLAYERSB INITIATIVESList o0 Pi+ate Li0e Insuan)e Com'anies

Insurane Industr* in the *ear 122241223 had 38 ne# entrants' >Foreign$!a*ers entering the Indian Insurane setor #ith their Indian $artners?

Li&e Insurane List+

S2N2Re8istation

No2 Date o0 Re82 Name o0 t3e Com'any

3 323 19321222 HDFC Standard Li&e Insurane Com$an* Ltd)

1 326 3:331222 Ma% Ne# Kor" Li&e Insurane Co) Ltd)

9 32: 16331222 ICICI Prudentia! Li&e Insurane Com$an* Ltd)

6 325 32231223 Om Bota" Mahindra Li&e Insurane Co) Ltd)

: 32 93231223 0ir!a Sum Li&e Insurane Com$an* Ltd)

8 332 31211223 Tata Aig Li&e Insurane Com$an* Ltd)

5 333 92291223 S0I Li&e Insurane Com$an* Ltd)

J 336 212J1223 ING *s*a Li&e Insurane Com$an* P-t) Ltd)

338 292J1223 A!!ian/ 0a,a, Li&e Insurane Com$an* Ltd)

32 335 282J1223 Met!i&e Indian Insurane Com$an* P-t) Ltd)

5ISTORY:

Li&e Insurane in its $resent &orm ame to Indian &rom the United Bingdom#ith the esta(!ishment o& a 0ritish &irm Orienta! Li&e Insurane Com$an* in

Ca!utta in 3J3J &o!!o#ed (* 0om(a* Li&e Assurane Com$an* 3J19) The Indian

Li&e Assurane Com$anies At) 331 #as the &irst statutor* measure to regu!ate!i&e Insurane (usiness)

In the 39J' ear!ier !egis!ation #as onso!idated and amended (* theInsurane At) 39J' #ith om$rehensi-e $ro-ision aimed at e%erising e&&eti-e


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ontro! o-er the ati-ities o& insurers o& the insuring $u(!i) The main onern#as to $rotet the interests

The At #as amended in 3:2 resu!ting in &ar4reahing hanges in theinsurane setor) 0* 3:8' 3:6 Indian insurers) 38 &oreign insurers and 5:$ro-ident soieties #ere arr*ing on !i&e insurane (usiness in the ountr*)

In anuar* 3:8' in "ee$ing #ith the then $re-ai!ing $o!itia! andeonomia! $hi!oso$h* o& soia!ism' 16: Indian and &oreign insurane and$ro-ident soieties o$erating in Indian #ere ta"en o-er (* the Centra!Go-ernment (* an At o& Par!iament' the Li&e insurane Cor$oration At 3:8)The LIC' #ith a a$ita! o& Rs) : rores #as set u$ Se$tem(er that *ear)

Pi+ati9ation in %##"s

As $art o& the #ide 4 ranging eonomi re&orms initiated in 33' aommittee headed (* Mr) R) N) Ma!hotra e%amined the struture o& the insuranesetor) The ommittees reommendations to o$en u$ the setor to $ri-ate setor

$artii$ation #ere im$!emented (* the Go-ernment in 1222) The "e* e!ement inthe re&orm $roess #as the $artii$ation o& o-erseas insurane om$anies'through restrited to 18 $erent o& the a$ita!)


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&eature o& this mar"et) Other hanne!s suh as (an"s' dediated distri(utionthrough a!!ianes and e4trade #i!! ta"e time to ma"e a si/a(!e im$at) It is thegenera! $ere$tion that !i&e insurane #i!! ontinue to (e so!d through &ae4to4&aeontrat &or @uite a #hi!e)

Toda* a&ter near!* &i&t* *ears' the insurane setor is a (u*ers mar"et#here there onsumer has the hoie to se!et &rom a -ariet* o& insurane'$roduts and ser-ies' some o& the ear!* mo-ers ado$ted (* $ri-ate insurers an(e disussed here)

Distibution modes:

Most ne# entrants are targeting the Indian midd!e !ass segmentestimated at o-er 1:2 mi!!ion $ersons)

5i83 0o)us on die)t se,,in8:The $re&erred route is the agen* net#or")The agen* hanne! onstitutes 24: $erent o& the mar"et)

A,,ian)es >it3 ban.s:Insurane is using (ranh net#or"s to se!!insurane $roduts) This ena(!es insurers to !e-erage on !o#distri(ution osts (* using e%isting net#or"s) Insurers are a!so targeting(an" em$!o*ee as $er $ros$eti-e ustomers and agents to mar"et$roduts)

Non$ 1an. A,,ian)es:These are tie4u$s #ith non4go-ernmenta!organi/ations >NGOs? main!* to ta$ the rura! mar"et) This #ou!d ena(!einsurers to ensure IRDA Com$!iane #ith res$et do rura! o-erage)

Retai, 0inan)ia, se+i)e Distibutos:This in-o!-es the tie4u$s #ith

N0FCs to at as or$orate agents' and a!so ena(!ed insurers to ross se!!#ith other &inania! ser-ies)

riders?#hih ou!d (e (und!ed ustomi/ed to suit an indi-idua!s need) Insurane isa!so (eing $romoted as a sound !ong4terms in-estment o$tion) In terms o&returns insurane $roduts toda* o&&er a om$etiti-e 54 $erent) 0esides returns#hen rea!!* inreases the a$$ea! o& insurane is the (ene&it o& !i&e $rotetion &rominsurane $rodut a!ong #ith hea!th o-er (ene&its) The ta% (ene&its are a!soattrati-e)

#ho!e !i&e' term et)? #i!! remain $o$u!ar'sa!e o& ne# $roduts suh as sing!e $remium' unit4!in"ed' retirement $rodut'mone* (a" and annuit* are set to rise)


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%: Insues as on Date

Com'any &oei8nS3ae3o,de

Ma(o Lo)a,S3ae3o,de

1usiness o0 ,o)a,S3ae3o,de

0a,a, A!!ian/Li&e

A!!ian/ 0a,a, Auto Auto Manu&ature

AMP Sanmar AMP Sanmar Di-ersi&ied Cong!omerate0ir!a Sun Li&e Sun Li&e o&

Canada0ir!a G!o(a!Finane

Di-ersi&ied Cong!omerateMedia! . Consumer

Da(ur AIA AIA Da(ur ProdutsHDFCStandard Li&e

Standard Li&e HDFC In-estment and Finane

ICICIPrudentia!Li&e

Prudentia! >U)B? ICICI In-estment and Finane

ING *s*aLi&e

ING *s*a 0an" 0an" and other in-estors

Ma% Ne#Kor" Li&e

Ne# Kor" Li&e Ma% India Di-ersi&ied Cong!omerate

Met Li&e India Met Li&e 0an" Pa!!on,i

Grou$

Cong!omerate

OM Bota"Mahindra

O!d Mutua! Bota" Mahindra In-estment and Finane

S0I Li&e Cardi& S0I 0an"TATA AIGLi&e

AIG TATA Di-ersi&ied Cong!omerate


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Pri-ate Com$anies returns are as &o!!o#s o& their (usiness+

II: Last Yea Retuns

Returns (ased on ULIP $!ans >e@uit*?+

Pi+ate Insues Retuns

S0I Li&e Hori/on E@uit* 33:)5

HDFC Li&e Gro#th J1)3

0a,a, A!!ian/ UGP E@uit* P!an 59)3

OM Bota" Aggressi-e 53):

ICICI Pru Li&e Lin" Ma% 8)1

Met Li&e Mu!ti$!ier 85)J

Re!iane Li&e E@uit* 86)6

AIA Sa-e Guard Gro#th 82)2

LIC 0ima P!us 65)8

Ma% Ne# Kor" Li&e Ins) Gro#th 6:)6

0ir!a Sun Li&e Gro#th 91)9


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!2! Key C3a,,en8es 0a)ed by Pi+ate Insues:

The "e* ha!!enges' #hih a!! $ri-ate insurers #i!! &ae in the omingmonths' are in the areas o& $rodut inno-ation' managing in-estment'distri(ution' ustomers ser-ie and e%$ense ontro!) Some o& these are (rie&!*disussed here+

Li&e insurane in India has traditiona!!* (een distri(uted through theagen* hanne!) The !imiting &ator &or $ri-ate insuranes #i!! (e the e%tensi-e

and e%$ensi-e distri(ution struture re@uired &or reahing through the segment)

Distri(ution #i!! (e a "e* determinant suess &or a!! insurane om$anies)The ne# entrants annot e%$et to math the e%tensi-e distri(ution net#or" o&LIC >o& o-er 5 La"h agents?) O& these on!* a sma!! $ro$ortion is meaning&u!!*$roduti-e) Sine there #ere no re@uirements re!ating to training and $assing o&e%amination) 0oth o& #hih are no# re@uired' re@uirement #as in ine%$ensi-eand rather asua!) The LIC did not mind e-en i& a !arge $art o& its agen* &oreremained inati-e and or un$roduti-e) This is not the ase no#)

Agents ha-e to (e trained &or 322 hours and the* ha-e to $ass ane%amination) It is estimated that (* the time an agent is !iensed and (eomes$roduti-e' a(out Rs) 3:222 to Rs) 12222 #ou!d ha-e (een inurred (* theinsurer) 0eause o& this insurers annot a&&ord to ha-e man* non4$roduti-e andthis #i!! strengthen the mar"et)

The a!ternati-e hanne!s suh as (an"s and other institutions are s!o#!*emerging) It is to ho$e that a -ariet* o& hanne!s #i!! emerge in due ourse asresu!t o& !i(era!i/ation o& this setor)

Intemediaies and die)t ma.etin8

Though the agen* hanne! #i!! de&inite!* remain as the dominantdistri(ution hanne!' a!ternati-e hanne!s !i"e or$orate agenies' (ro"ers and0ane assurane #i!! $!a* a meaning&u! ro!e in distri(ution) Pri-ate insurers area!so engaging in diret mar"eting to high net #orth indi-idua!s through hanne!s!i"e #or" site mar"eting a re!ati-e!* ine%$ensi-e and eas* !aunh $otentia!distri(ution harmed


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Ne# entrants #i!! onstant!* e%$!ore a-enues to inrease the num(er o&distri(ution hanne!s through a -ariet* o& distri(ution $atterns' gi-en the ustomer$ro&i!e)

Rua, and So)ia, Insuan)e

As $er the IRDA regu!ations a!! insurers ha-e an o(!igation to &u!&i!! in therura! and soia! setors) This o(!igation is e%$ressed as a $erentage o& tota!$o!i* sa!es in the rura! setor and num(er o& !i-es insured in the soia!!* #ea"ersetions o& soiet* to the tota!)

The rura! o(!igations are to se!! s$ei&i $erentages o& $o!iies to the rura!

setor : $erent in &irst *ear' 5): $erent in seond *ear and u$ to 3: $erent in&i&th *ear) In the soia! setor' insurers are re@uired to insure a s$ei&i o& !i-es:222 in &irst *ear' 5:22 in seond and u$ to 12222 !i-es in &i&th *ear and (e*ond)

In these areas' !oa! $artnershi$s esta(!ished (* $ri-ate $!a*ers matter) Some o&them ha-e ro$ed in the -i!!age or $anha*at heads to om$!* #ith the rura!o(!igations) Some $ri-ate insurers ha-e tied u$ #ith non4go-ernmentorgani/ation >NGOs? to satis&* the soia! o(!igation)

It is e%$eted that these rigorous re@uirements #i!! he!$ inreaseinsurane $enetration and $ro-ided the muh4need insurane $rotetion to thesegments that onstitute a !arge $erentage o& the $o$u!ation) In short' it ise%$eted that insurane #i!! gradua!!* ease to (e more ur(an $henomenon)

Custome se+i)e

In this om$etiti-e senario' a "e* di&&erene in gaining a #inning edge isthe ustomer ser-ie $ro-ided (* the insurers' (e it' in terms o& @ua!it* o& ad-iegi-en (* the distri(ution hanne!s >ad-isors' (an"s? or $o!i* $roessing tosett!ement o& !aims)

For the &irst time in &our deades the ustomer is rea!!* the &ous andom$anies are -*ing #ith one another to $er&orm to -er* trans$arent and tight(enhmar"s o& ser-ie)

It is signi&iant that the IRDA has (rought out regu!ations that $resri(eser-ie standards and $arameters) These $o!i*ho!ders $rotetion regu!ationsare om$rehensi-e the* ensure trans$aren* and aura*= &i% res$onsi(i!it* oninsurane om$anies &or se-era! areas in-o!-ing ustomer ser-ie et) This $ieeo& !egis!ation is seen as a !andmar" in India)


20/66

Ro,e o0 Te)3no,o8y

In the $resent om$etiti-e en-ironment tehno!og* #i!! $!a* a de&inite ro!ein ahie-ing a om$etiti-e edge) Tehno!og* #i!! $!a* an inreasing ro!e in aidingDesign and administering o& insurane $roduts as #e!! as in (ui!ding and

maintaining !ong term ustomer re!ationshi$s)

&utue o''otunities

O$ening u$ o& the $ension setor+ Considera(!e disussions ha-e ta"en$!ae on this su(,et' on!* 33 $erent o& the #or"ing $o$u!ation is $roteted (*some &orm o& retirement (ene&its) It is !earnt that a detai!ed $ro$osa! is (e&ore theGo-ernment to o$en u$ the $ension setor) Pro-iding o-erage through anationa! $ension sheme is ha!!enging (ut it is neessar*' $artiu!ar!* &or thenon4sa!aried or se!& em$!o*ed #or"&ore and those engaged in agriu!ture) The

!i&e insurane industr* has ome a!i-e) A#areness has inreased and it is (einge%$eted that the mar"et #i!! gro# &ast) In &i-e *ears one #i!! (e !oo"ing at anannua! $remium inome o& Rs) 322'222 Crores in the !i&e insurane setor) Li&einsurane #i!!' at !ong !ast attain its right&u! $!ae in the eonom*)


21/66

C3a'te 6 7

ORANIATION PRO&ILE


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23/66

PARTNERS

S0I Li&e Insurane Co Ltd) Is a ,oint -enture (et#een State 0an" o& Indiaand Cardi&& o& Frane) The t#o om$anies (ring together t#o o& the Strongest&inania! ser-ie (rands in the ountr*' "no#n &or their $ro&essiona!ism' e%e!!ent

@ua!it* o& ser-ie and !ong term ommitment to *ou) Riding on the suess o& thisre!ationshi$' the t#o om$anies ,oined hands in 1223' to &orm S0I Li&e InsuraneCom$an* Ltd)' #ith a ommitment to $ro-ide !eading edge !i&e insuraneso!utions)

S0I 0an" has 567 sta"e in the om$an*' and Cardi&& $ie has 187)#iththe Authori/ed a$ita! o& Rs) :22 r)


24/66

T5E COMPANY

S0I Li&e Insurane is a ,oint -enture (et#een the State 0an" o& India andCardi&& SA o& Frane) S0I Li&e Insurane is registered #ith and authori/ed a$ita!o& RS) :22 rore and a $aid u$ a$ita! o& Rs) 9:2 rore) S0I o#ns 567 o& the

tota! a$ita! and Cardi&& the remaining 187S1I Li0e Insuan)eFs mission is to eme8e as a ,eadin8 )om'any

o00ein8 a )om'e3ensi+e an8e o0 Li0e Insuan)e and Pension 'odu)ts at)om'etiti+e 'i)esG ensuin8 3i83 standads o0 )ustome se+i)e and >o,d),ass o'eatin8 e00i)ien)y2The om$an* $!ans to ma"e the insurane (u*ing$roess @ui"' sim$!e and (ased on #e!! 4 in&ormed ,udgment) In 1226' S0I Li&eInsurane (eame the &irst om$an* amongst $ri-ate insurane $!a*ers to o-er92 !a"h !i-es)

DISTRI1UTION

S0I Li&e has one o& the !argest distri(ution net#or"s amongst $ri-ate !i&einsurers in India' ha-ing ommened o$erations in 8 ities and to#ns in India)

Some o0 t3e Ma(o Cities ae:Ahmeda(ad' 0ang!ore' Chandigarh'Chennai' Coim(atore' Gurgaon' H*dera(ad' Indore' ai$ur' Bohi' Bo!"ata'Lu"no#' Ludhiana' Madurai' Mang!ore' Meerut' Mum(ai' Nag$ur' Nasi"' Noida'Ne#De!hi' Pune and adodara)

The om$an* has the !argest num(er o& (an assurane tie4u$s' ha-ingagreements #ith S0I 0an"' South Indian 0an"' 0an" o& India' 0an"' and Pun,a(. Maharashtra Co4o$erati-e 0an"' as #e!! as some or$orate agents) It has a!sotied u$ #ith organi/ations !i"e Dhan &or distri(ution o& Sa!aam indagi' a $o!i*&or the soia!!* and eonomia!!* under$ri-i!eged setion o& soiet*)

S0I Li&e has reruited and trained o-er 98':22 insurane agents tointer&ae #ith and ad-ise ustomers' and has the highest num(er amongst$ri-ate !i&e insurers on the reno#ned Mi!!ion Do!!ar Round Ta(!e >MDRT? >::2 inthe *ear 12264122:?) Further' it !e-erages its state4o&4the4art IT in&rastruture to$ro-ide su$erior @ua!it* o& ser-ie to ustomers)


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72! PRODUCTS

Insurance Solutions for individuals

S0I Li&e Insurane o&&ers a range o& inno-ati-e' ustomer4entri $roduts thatmeet the needs o& ustomers at e-er* !i&e stage) Its 18 $roduts an (eenhaned #ith u$ to 6 riders' to reate a ustomi/ed so!ution &or eah$o!i*ho!der)

Sa+in8s So,utions

S1I Li0e Sudas3anis a traditiona! endo#ment sa-ings $!an that o&&ers!i&e $rotetion a!ong #ith ade@uate returns)

S1I Li0e S)3o,a II is an antii$ated endo#ment $o!i* idea! &or meeting

mi!estone e%$enses !i"e a hi!ds marriage' e%$enses &or a hi!ds highereduation or $urhase o& an asset)

S1I Li0e Money 1a).is a!so a traditiona! $!an that o&&ers !i&e o-er #ithash in&!o# at regu!ar inter-a!s) It is a $artii$ating $!an in order to meet*our &inania! o(!igations at ruia! ,untures)

Pote)tion So,utions

S1I Li0e S3ie,dis a $rotetion $!an' #hih o&&ers !i&e o-er at -er* to#ost) It is a-ai!a(!e in 9 O$tions 4 !e-e! term assurane' !e-e! term assurane #ith

return o& $remium and sing!e $remium)

C3i,d So,utions

S1I Li0e S)3o,a II$ro-ides guaranteed eduationa! (ene&its to a hi!da!ong #ith &i&e insurane o-er &or the $arent #ho $urhases the $o!i*) The$o!i* is designed to $ro-ide mone* at im$ortant mi!estones in the hi!ds !i&e)

Unit$,in.ed So,utions

S1I Li0e Unit P,us IIis a Sing!e . Regu!ar $remium Unit Lin"ed Insurane

P!an' #hih om(ines !i&e insurane o-er #ith the o$$ortunit* to sta*' in-estedin the sto" mar"et)

S1I Li0e 5oi9on IIo&&ers ustomers the &!e%i(i!it* and ontro! toustomi/e the $o!i* to meet the hanging needs at di&&erent !i&e stages) It is sa&eand hass!e &ree #a* to get high returns and #ith a uni@ue &eature o& Automati

Asset A!!oation)


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727 Podu)t Com'aison

I2 TYPES O& ORDINARY LI&E INSURANCE TRADITIONAL PRODUCTSJ

Pemanent Ty'e o0 Conta)ts

T*$ia! $ermanent t*$e $o!iies are


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Tem Insuan)e

Term Insurane is tem$orar* ontrats' #hih $ro-ide (asi death ris"o-er) This is the hea$est &orm o& !i&e insuranes' sine as the desri$tionsuggests' it is on!* &or a ertain $eriod o& time and the $o!i* mone* is $a*a(!e on

death during the term o& the $o!i*) On e%$ir*' the $o!i* has no -a!ue) Norma!!*'the $o!i*ho!der does not reei-e an* (ene&it on sur-i-a! to the end o& thesti$u!ated term (ut he #i!! ha-e en,o*ed the $rotetion &or death ourring duringthe $o!i* $eriod) The #ho!e !i&e $o!i* in e&&et is a term insurane $o!i* #ithoutthe !imitation o& a $eriod) In India' return o& $remiums is a!!o#ed in the e-ent o&sur-i-a! o& the $o!i*ho!der to the end o& the term) No dou(t' a higher $remium#ou!d (e $a*a(!e to o-er the additiona! sur-i-a! (ene&it)

Li0e Annuity


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II2 NON TRADITIONAL PRODUCTS UNIT LINKED PRODUCTSJ S1ILi0e

Unit P,us II

II Podu)t 1ene0its and 0eatues:%2 Intodu)tion:

S0I Li&e Unit $!us II is an addition to the insurane $roduts o&&ered (* S0ILi&e insurane Com$an* Ltd) This $rodut ho#e-er' (eing an insurane $rodutgi-es the ustomer a tot o& &!e%i(i!it* on the Li&e o-er and a!so gi-es theustomer a !ot o-er the -a!ue o& in-estment that an (e generated (* the $rodut)

Thus' this $rodut #or"s as a !ong4term mar"et4!in"ed tota! $rotetion o&!i&e' hea!th and #ea!th)

The design o& the $rodut is suh that it #or"s as a one sto$ #ho!esome

&inania! so!ution &or the ustomers &or their !i&etime' a $rodut that gi-es theustomer the ontro! and &!e%i(i!it* to use it aording to di&&ering needs at theirdi&&erent !i&e stages #ith di&&erent human !i&e -a!ues)

Li0e time is:

A regu!ar $remium $rodut that has the o$tion o& the *ear!*' Ha!&4Kear!*and Month!* modes o& $remium)

An insurane $rodut that #or"s in the &orm o& units' #hih are issued tothe $o!i*ho!der de$ending u$on the Unit -a!ue and the in-estment donein the &orm o& $remium)

An insurane $rodut #here a!! the three riders are attahed name!*'AD0R and CI0R)

An insurane $rodut #here the Death (ene&it is a mu!ti$!e o& the Annua!

Premium $aid) An insurane $rodut #ith no maturit* -a!ue' at an* time the -a!ue o& units

is #hat is the -a!ue o& the $rodut)


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The &eatures and (ene&its o& the $rodut that #ou!d (e he!$&u! in understandingthe $ositioning strateg* o& the $rodut)

%2 1ene0its:

Deat3 bene0it:

Death 0ene&it #ou!d (e a mu!ti$!e o& the *ear!* $remium) The $o!i*ho!derhas the &!e%i(i!it* to hoose the death (ene&it) The ma%imum !imits o& death(ene&it an (e &ound out Mom a ta(!e that gi-es the mu!ti$!es &or di&&erentom(ination o& age and !i&e o-erriders o$ted (* the $o!i*ho!der) In ase o&death o& the $o!i*ho!der gets higher o& death 0ene&it and the -a!ue the units)

?it3da>a,:

The #ithdra#a! o& the units #ou!d (e at the unit -a!ue on the $riing date

&o!!o#ing the reei$t o& the #ithdra#a! re@uest) The -a!ue o& #ithdra#a! reduesthe Death 0ene&it (* the same amount)


31/66

C3oi)e o0 0und

There are &our &und o$tions a-ai!a(!e to the $o!i* ho!ders) The$o!i*ho!der has the &!e%i(i!it* o& in-esting in a!! the three &unds in the $ro$ortion

he #ishes' in one sing!e $o!i*) Fo!!o#ing are the three &und o$tions)

PLAN PLAN O1ECTIVE RISK INVESTMENTPATTERN

Gro#th Stead* returns o-er a !ong term)

Moderate

De(t instruments + Ma%3227Mone* Mar"et andash + Ma% 827

0a!aned 0a!ane o& a$ita!a$$reiation and stead*

returns o-er a !ong term)

A-erage De(t' Mone* mar"et andash + Ma% 827

E@uit* and e@uit* re!atedseurit* + Ma% 827

E@uit* High gro#th and a$ita!a$$reiation o-er a !ong term)

High E@uit* and e@uit* re!atedseurit* + Ma% 322 7De(t' Mone* Mar"et andash + Ni!

0ond Seuring mone* (* a-oidingris")

Norma! Go-t) Seurit* QDe(enture 3227Cash Q Ca!! Mar"et 127

S>it)3 bet>een t3e &unds

The Po!i*ho!der #ou!d ha-e the ontro! to diret his in-estmentsde$ending u$on the mar"et onditions (* s#ithing the mone* (et#een the&unds) Four &rees #ith is a!!o#ed eah $o!i* *ear) A s#ithing harge o& 37 o&the -a!ue o& the units s#ithed #ou!d (e !e-ied a&ter the $o!i*ho!der hase%erised the &ree s#ith)

To'$U's

I& the Regu!ar Premiums are $aid u$ to date Sing!e Premium To$4U$s an(e made) To$4U$s gi-e the &!e%i(i!it* to the $o!i*ho!der o& inreasing the -a!ue o&his in-estments o-er a !ong term) To$4u$s an (e done at a ost o& 37 o& the to$4u$ $remium)

There #ou!d (e no inrease in the Death 0ene&it #ith the To$4U$' (ut the!i&e o-er a!u!ations #ou!d ta"e into aount the inrease in the -a!ue o& theUnit Fund (eause o& the Sing!e Premium To$4U$)


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72 C3a8esInitia! administrati-e harges

3stKear 1:7 o& the Premium

1ndKear 5):7 o& the Premium

9rdKear :7 o& the Premium

Insuan)e )3a8es

This harge is (asia!!* to#ards the morta!it* and the riders) These arededuted (* the ane!!ation o& units on a month!* (asis) The morta!it* hargesare harged on the Li&e Co-er' Kear!*?' Rs) 31222 >Ha!&4 Kear!*? andRs)1222 >Month!*?


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Com'aison 1et>een Taditiona, - Unit Lin. P,ans

Taditiona, P,an Unit Lin. ModenJ P,an

3) Endo#ment P!an 3) Endo#ment P!an1) Antii$ated Endo#ment 1) Antii$ated Endo#ment9) Term P!an 9) Term P!an

Taditiona, Unit Lin.

3)Customer deide Term

1) Customer Deide Sum assured

9) As $er Customers age and term andS)A) $remium #i!! (e a!u!ated

6) 0oundation+ Premium to (e $aidsame throughout the *ear >Cantderease or Inrease?

:) No Trans$aren* o& Term)

8) Returns are going do#n da* (* da*)

5) No Freedom &or In-estment rma!!oation)

3) Customer is Free &or Term >No0oundation to deide term?

1) Customer is &ree &or se!et sumassured

9) Customer is &ree to se!et $remium>doesnt (ounded #ith S)A) or term?

6) No 0oundation &or $remium$a*ment term)

:) Fu!!* Trans$arent >Charges maturit*?

8) Returns are (ased on sto" Mar"etas #e!! de(enture &or Go-t) seurities)

5) Customer is Free to S#ith hismone* &rom Sto" mar"et to de(entureon Go-t) Seurit*)


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S1I Li0e Unit P,us II

Com'etiti+e Positionin8

Li0e time as )om'aed to a >3o,e ,i0e ',an

A $ersons $rotetion needs &o!!o#s a *!e de$ending on the !i&e stage) It

inreases o-er time and then dereases) Li0etime o00es t3e 0,e4ibi,ity toin)eases t3e 'ote)tion as and >3en euied2


35/66

Shou!d *our needs hange' *ou an inrease or derease *our death(ene&its)

Li"e the Uni-ersa! Li&e $o!i* Li&etime o&&ers $remium #ai-er (ene&it) So it&or some reason the $o!i*ho!der is una(!e to $a* the $remium the amount

#i!! (e reo-ered &rom the -a!ue o& units and the $o!i* #i!! ontinue toremain in &ore)

There are no surrender $ena!ties) An*time a&ter 9 *ears *ou an ma"e$artia! or om$!ete #ithdra#a!s &rom *our units) This hoie an (ee%$ressed aording to the needs)

Mutua, &unds ae not )om'aab,e 'odu)ts:

Li&e time is $ositioned as a!ong term #ho!esome &inania! $rodut thatta"es are o& the in-estment needs= insurane needs and $ro-ides

$rotetion against the hea!th ha/ards) As om$ared to this the mutua!&unds are norma!!* used as short4term instruments #here the in-estmentsturn around time is !imited to ma%imum o& 149 *ears)

Li&e time $ro-ides death (ene&it as a mu!ti$!e o& the Annua! $remium) NoMutua! &unds $ro-ide !i&e insurane) Not on!* this !i&e time' a!so $ro-idesthe &!e%i(i!it* to ontro! the insurane and sa-ings aording to the needso& the indi-idua! at di&&erent !i&e stages)

Li&e stages are a!so attahed #ith riders that o-er the indi-idua! againstthe hea!th ha/ards) This &ai!it* is not $ro-ided (* the mutua! &unds)

The $roeeds &rom Li&e time is tota!!* e%em$t &rom ta%es #here as the$roeeds &rom a mutua! &und attrat a$ita! Gains Ta%' i& an*)

In ase o& the death o& the $o!i*ho!der' greater o& -a!ue o& units or theDeath 0ene&it is $aid to the nominee) In ase the mar"ets are do#n' the&ami!* o& the $o!i*ho!der is seured' as the* #ou!d get the Death 0ene&it'as the -a!ue o& units ma* (e !ess than the death (ene&it) In ase o& amutua! &und' the &ami!* on!* gets the -a!ue as $er the NA) So e-en in ashorter term' Li&etime sores o-er the Mutua! &unds' i& the $o!i*ho!derdies and the mar"ets are do#n)


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S1I Li0e 5oi9on II

Name o0 Podu)t S1I Li0e 5oi9on II

Initia! re@uirements Pro$osa! Form ACR

Age $roo&

De$osit reei$t

Pro$oser and Li&e assured Po!i* must (e $ro$osed on o#n !i&eIssue ru!es

Min age at entr*Ma% age at entr*

Min $o!i* term

Ma% $o!i* term

Min -esting ageMa% -esting age

Min $remium amount

Min Death (ene&it

Death (ene&it

36 Kears82 Kears

32 Kears

62 Kears

6: Kears5: Kears

Rs) 312224

ero

Annua! Premium Term

Premium $a*ment modes A!!Premium $a*ments hanne!s A!!Premium $a*ments $eriods U$ to origina! -esting dateRating &ator inrease indeath o-er #ith under#riting

3)2

Rating &ator &or inrease o&death o-er #ith outunder#riting >AutomatiInrease?

NIL

Riders a!!o#ed On!*


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Non Media! Sheme


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S1I Li0e Unit P,us II

Name o0 Podu)t S1I Li0e UNIT PLUS II

Initia! Re@uirements Pro$osa! &orm

ACR

Age $roo& De$osit reei$t

Pro$oser and !i&e assured Po!i* must (e $ro$osed on o#n !i&eIssue ru!es

Min age at entr*Ma% age at entr*

Min $o!i* termMa% $o!i* term

Min -esting ageMa% -esting age

Min $remium amount

Min Death (ene&it

Ma% Death (ene&it

3J Kears82 Kears

: Kears8: Kears

6: Kears5: Kears

Rs) 16' 2224

T#o o$tions a-ai!a(!e to the Li&e Assured3) Ni! Death 0ene&it >Can (e e@ua! 2?1) Death 0ene&it e@ua! to 32:7 o& thePremium

32:7 o& the PremiumPremium $a*ment modes Sing!e . Regu!ar Premium $a*ment hanne!s ALLRating &ator &or death 0ene&it NILRiders a!!o#ed NoneSurrender -a!ue On!* &u!! #ithdra#a! is a!!o#ed

For &irst $o!i* *ear no #ithdra#a! is a!!o#ed)On #ithdra#a! an*time a&ter the om$!etion o&&irst *ear' the -a!ue o& units is $a*a(!e)

E%tension on -esting date>Origina! or $ost$oned?

Post$onement o& origina! -esting date a!!o#edon more than one oasion su(,et to ma%age o& 52 *ears at $ost$oned >ne#? -estingdate)

0ene&its on -esting date >Origina!or $ost$oned?

The Li&e Assured sha!! ha-e the o$tionTo reei-e u$ to 997 o& the -a!ue o& units in!um$ sum and (a!ane amount in the &orm o&


39/66

annuit*)

0ene&it Co-erage Period For t*$e o& annuit* mentioned a(o-e3) Li&e time o& Annuitant1) Li&e time o& Annuitant9) oint Li&e Last Sur-i-or o& Annuitant

and s$ouse6) Li&e time or Guaranteed Period

#hihe-er isMore)

Death 0ene&itsDeath (e&ore the origina!esting date

I& s$ouse has not attained age :2 !ast(irthda* on death o& Li&e assured thes$ouse sha!! reei-e higher o& Death(ene&it or -a!ue o& units as a !um$ sum$a*ment)

I& s$ouse has attained age :2 Last(irthda* on death assured Higher o&

death (ene&it or -a!ue o&Units is $a*a(!e)The s$ouse sha!! ha-e the o$tion To

reei-e entire amount as !um$ sum$a*ment

Or

To reei-e u$ to 997 o& this amount as a !um$sum $a*ment and (a!ane amount in the &ormo& annuit*)

Or

To Uti!i/e entire amount in the &orm o& annuit*)

The s$ouse an se!et an* one o& the&o!!o#ing t*$es o& annuit*

Li&e annuit*

Li&e Annuit* #ith return o& $urhasePrie

Li&e Annuit* #ith Guaranteed $eriod o&:323: *ears)


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Death a&ter origina! -esting date(ut (e&ore the $ost$oned -estingdate >during the de&erment a&terthe origina! -esting date?

I& s$ouse has not attained age o& Last(irth on death o& !i&e assured Thes$ouse sha!! reei-e higher o& Death0ene&it or -a!ue o& units as a !um$ sum$a*ment)

I& s$ouse has attained age o& !ast(irthda* on death o& !i&e assured Thes$ouse sha!! ha-e the o$tion

To reei-e -a!ue o& units as a !um$ sum$a*ment

Or

To reei-e u$ to 997 o& -a!ue o& units as a

!um$ sum $a*ment and (a!ane amounto& in the &orm o& annuit*

Or

To uti!i/e entire -a!ue o& units in the &ormo& annuit* The s$ouse an se!et an* one o&the &o!!o#ing t*$es o& annuit*

3) Li&e Annuit*1) Li&e annuit* #ith return o& Purhase Prie

9) Li&e Annuit* #ith Guaranteed $eriod o&: 32 3: Kears)

In+estin8 in a Unit Lin.ed Pension P,an >ou,d be bette t3an Ma.et$ ,in.ed in+estment 'odu)t

Unit P,us II 5oi9on II Ma.et$,in.ed instument

During de&erment a ta%ad-antage underSetion J2 CCC >3? #ou!d

(e $ro-ided)

No4Ta% (rea"s #ou!d (e $ro-idedduring the in-estment $hase)

Under the $ension $rodutsthe returnsthat the om$an* earns arenot ta%ed' somore an (e $assed to theustomer)

In a mutua! &und the returns are ta%a(!e in thehands o& the in-estor as di-idends)


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C3a'te 6

RESEARC5MET5ODOLOY


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RESEARC5 MET5ODOLOY

A s*stemati a$$roah is essentia! in an* $ro,et #or") An inorret ste$'in-o!-es !oss o& time and energ*) The inreasing!* om$!e% nature o& (usinessand go-ernment has &oused attention on the use o& researh in so!-ingo$erationa! $ro(!ems)

The $ro,et has (een di-ided into a num(er o& $roedura! ste$s (oth the num(ero& ste$s and the names are ar(itrar*' ho#e-er the reognition o& the se@uene isessentia!) P!anning and organi/ing are $art o& this s*stemati a$$roah #ith a !oto& em$hasis gi-en to the interde$endene o& -arious ste$s)

2% TITLEA Com$arati-e stud* on Traditiona! and Unit Lin"ed Produts

2! O1ECTIVES O& STUDY

To "no# the &ators in&!uening the ustomer deisions #hi!e $urhasing

insurane $o!iies) To (road!* stud* the insurane mar"et)

To "no# the a#areness o& traditiona! $roduts and unit4!in"ed $roduts)Pre-ai!ing in the mar"et)

27 RESEARC5 DESIN3) T*$e o& researh 4 The t*$e o& researh #as Desri$ti-e and E%$!orator*1) Po$u!ation 4 O& stud* #as the e%isting ustomers o& S0I Li&e InsuraneCom$an*9) Data Co!!eted 4 Primar* data and Seondar* data6) Data o!!etion tehni@ues 4

Primar* Data 4 The data #as o!!eted through @uestionnaire and $ersona!inter-ie#

Seondar* Data 4 0rohures and om$an* ad-isor "it:) Data o!!etion site 4 The data o!!etion site #as Udai$ur it*

2 SAMPLE DESINSam$!ing $roedure 4 Sam$!ing $roedure used in the $ro,et is S*stematiSam$!ing)Sam$!e si/e 4 922 ustomers

2; SOURCES O& DATAPimay Data

The (u!" o& the $rimar* data #as o!!eted &rom e%isting ustomers o& S0ILi&e) Through @uestionnaire and $ersona! inter-ie#' shedu!e in Udai$ur it*) Theinter-ie# shedu!e #as reated #ith the intention o& om$aring the traditiona! -sunit !in"ed $roduts) The shedu!ed used &or the $ur$ose is gi-en in theanne%ure)Se)onday DataThe seondar* data (egan #ith the $roess o& o!!eting genera! in&ormation&rom S0I Li&e through (rohures and !iterature o& the om$an*)


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C3a'te 6 ;

DATA ANALYSIS-

INTERPRETATION


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C5ART 6 %

2% Do you 3a+e any Insuan)e 'o,i)y@

2

:2

322

3:2

122

1:2

922

Kes No

Series3

INTERPRETATION +

The @uestion #as as"ed to 922 $ersons and among them 185 re$!ied $ositi-e!*

YES !


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C5ART $ !

2! In you o'inion >3y Li0e Insuan)e is euied@

Sa+in8s 7#

In+estment %73i,e sa+in8 TA/@

Mutua, &unds =

Li0e Insuan)e %"=

Post O00i)e


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C5ART 6

2 I0 you >ant to ta.e an insuan)e )o+e >3i)3 )om'any >ou,d you'e0e @

S1I Li0e Insuan)e =

1a(a( A,,ian9 !

ICICI Pudentia,

LIC %"!

Re,ian)e Li0e 7#

J5

16

6J

321

9

2

12

62

82

J2

322

312

S0ILi&e

Insu

ran

e

0a,a,

A!!ia

n/

ICI

CIPrude

ntia!

LIC

Re!ia

neLi&e

Series3

INTERPRETATION +

The Gra$h sho#s that LIC and S0I Li&e Insurane are the om$an* in #hihustomers $re&er to in-est rather than an* o& the other om$anies)


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C5ART 6 ;

2; Do you .no> insuan)e 'odu)ts o00e in+estment a,so unde ULIP'o,i)ies@

YES %#In-estment O$tion?)

In the Unit Lin"ed $!an there are more &!e%i(i!ities !i"e)>i? One an inrease his death (ene&it)>ii?

F!e%i(!e Contri(ution+ One an Inrease or derease his annua!ontri(ution) The ma%) Derease in ontri(ution an (e u$ to 127 o& theInitia! ontri(ution)

Tans'aen)y:One an a!#a*s get to "no# the Charges' #hih are deduted&rom the Premium)

5i83 Retun

Moe &eatues:

>a? Loan+ One an o(tain !oan against $o!i*)>(? Surrender -a!ues+ The unit !in"ed $!an a!!o#ed surrender a&ter 3 *earsontri(ution is $aid)>? Choie o& to$ u$+ One an to$ u$ his in-estment an* time #hen he hassur$!us &unds)>d? e? S#ithes+ i& at a !ater stage the &inania! $riorities hange' one an s#ith(et#een the -arious in-estment o$tions at an* time) There is a $ro-ision o& 6 &rees#ithes e-er* $o!i* *ear)

LIC and S0I are the t#o most "no#n (rands in the mar"et

Through the stud* it #as &ound that the main $ur$ose o& (u*ing insuraneis in-estment)


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C3a'te 6 =SUESTIONS

RECOMMENDATIONS SUESTION


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In order to sur-i-e in this era o& ut throat om$etition' it is -er* im$ortant&or an organi/ation to gi-e the (est to its ustomers and the most reasona(!e$rie)

A&ter going through the stud* on m* $ro,et' I #ou!d !i"e to ome u$ #ith&o!!o#ing reommendations+

A!! the om$an* shou!d ome out o& a Unit Lin"ed $rodut that shou!d aide-er* setion o& the soiet*)

The ad-isors shou!d (e made a#are and eduated so that the* an

e%tend their ser-ies not on!* in terms o& o!!etion o& $remium he@ues&rom the $o!i* ho!ders (ut a!so to eduate them a(out the insurane andthe !atest Non Traditiona! $roduts)

The om$an* shou!d target the !o#er segment ustomers a!so

?3i)3 is 1etteG Unit$,in.ed o Taditiona,@

The t#o strong arguments in &a-our o& unit4!in"ed $!ans are' &irst!*' the in-estor


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"no#s e%at!* #hat is ha$$ening to his mone* and seond!*' it a!!o#s thein-estor to hoose the assets into #hih he #ants his &unds in-ested) A traditiona!#ith $ro&its'; on the other hand' is a (!a" (o% and a $o!i*ho!der has !itt!e"no#!edge o& #hat is ha$$ening) An in-estor in a ULIP "no#s ho# muh he is$a*ing to#ards morta!it*' management and administration harges) He a!so

"no#s #here the insurane om$an* has in-ested the mone*) The in-estor getse%at!* the same returns that the &und earns' (ut he a!so (ears the in-estmentris")

The trans$aren* ma"es the $rodut more om$etiti-e) So i& *ou are #i!!ing to(ear the in-estment ris"s in order to generate a higher return on *our retirement&unds' ULIPs are &or *ou)

Traditiona! #ith $ro&its; $o!iies too in-est in the mar"et and generate the samereturns $re-ai!ing in the mar"et) 0ut here the insurane om$an* e-ens outreturns to ensure that $o!i*ho!ders do not !ose mone* in a (ad *ear) In that

sense the* are sa&er)

ULIPs a!so o&&er &!e%i(i!it*) For instane' a $o!i*ho!der an as" the insuraneom$an* to !i@uidate units in his aount to meet the morta!it* harges i& he isuna(!e to $a* an* $remium insta!!ment) This eats into his sa-ings' (ut ensuresthat the $o!i* #i!! ontinue to o-er his !i&e)

Com'aison bet>een Retun on ULIPs and Taditiona, Po,i)ies

The return on the ULIPs ti!! date has (een on an a-erage 33)6:7 and that on theon-entiona! $o!iies is 87 >(oth a!u!ated on IRR (asis?) Thus' the return onthe ULIPs out$er&orms the returns on the on-entiona! $o!iies) Ho#e-er' thereturns on the Posta! Li&e Insurane omes !ose to the returns on ULIPs i)e))5:7

Dan8es 0a)ed by taditiona, 'o,i)ies +

The soure o& high returns &or om$anies that dea!t #ith traditiona! insurane$roduts in the &orm o& assured returns has drained out) It #i!! thus (e' -er*di&&iu!t &or these om$anies to meet their ontratua! o(!igations)

E)g) A $erson #ho in-ests Rs) 62224 $)a) as $remium in ee-an Sura"sha' a$ension $!an o& LIC' at the age o& 1: is $romised an assured $ension o& ::224$)m) at the age o& ::) The $osition !oo"s as &o!!o#s+The ash out&!o# &or the om$an* is 39'12'2224 and the insurane om$an*gets on!* 3'12'2224 >the readers shou!d note that these are in $aid ti!! the !ast*ear and not at the initia! stage?) For this the om$an* #i!! ha-e to earn a return 3J7 $)a) >om$ounded @uarter!*? #hih in toda*;s mar"et situation is -er*di&&iu!t)


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The s*stem is o$a@ue)

The insurer is not a#are a(out #here the amount is in-ested)

The returns are !esser in !onger term as om$ared to ULIP)

ULIP a!!o#s &!e%i(i!it* to inrease returns at higher ris" or moderate returns

at !o# ris" de$ending on the ris" a$$etite o& the !ient) ULIP is an e%e!!ent mi% o& Insurane . In-estments)

The !ong term return >5 *rs . a(o-e? on an* E@uit* Mar"et in the #or!d is dou(!edigit $ositi-e' e%e$t during the times o& Great De$ression)

Pe)ei+ed Dan8es and Points to be .e't in Mind ?3i,e In+estin8in ULIP

In-estment and returns de$end on the $er&ormane o& the Mar"ets #hihan get -o!ati!e' and there&ore' ris"*)

The initia! ost o& ULIP is high' thus ma"ing Mutua! Funds a (etter

in-estment o$$ortunit* than an* insurane $rodut) Con-erting the ULIPs to a Mutua! Fund $o!i* and mar"eting on theseterms (* some Pri-ate Setor Com$anies)

The "no#!edge o& the agent o& ULIPs is sometimes !imited and he is thus'is not in a $osition to e%$!ain to the !ient the ris"s and dangers assoiated#ith ULIPs)

Large $ositions (* the !ients to Ris"* Fund)

)

CONCLUSION


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Insurane is sti!! a se!!ing $rodut in ountr* !i"e India) It is the om$an* #ho hasto &ind the mar"et and go to the $ros$et rather then the !ient diret!*a$$roahing to the om$an*) The o$ening u$ o& the setor has a!so resu!ted in

sti&& om$etition as man* $ri-ate om$anies are entering in) So' it (eomes -er*im$ortant to (e the (est out o& the rest in the mar"et) This om$an* an ahie-e(* o&&ering -a!ue added ser-ies to the ustomers (* gi-ing them ma%imum(ene&its)

Com$an* is tr*ing to gi-en more assured returns to the in-estors) Most!*$roduts are (ased on the NA or the* are unit Lin"ed) So a#areness'"no#!edge and (rand image o& the $rodut #i!! (e the &irst $riorit* &or theom$an*)

ULIPs are indeed a (oon to the in-estors) Ho#e-er' the in-estors must "ee$ the

&o!!o#ing $oints in mind #hi!e in-esting in ULIPs+

isit a $ro&essiona! Finania! P!anner to ta"e a #e!!4in&ormed deision)

0e #e!! read and #e!! in&ormed)

Don;t ta"e an* insurane $o!i* #ithout riders)

The (onus o& managing *our in-estment !ies on the !ient' do not e%$etthe om$an* to ta"e $rudent deisions on *our (eha!&)

The ris" ta"en must (e in-erse!* $ro$ortiona! to *our age)

A-oid herd menta!it* #hi!e ta"ing deisions)

In-esting in ULIPs is not in-esting in Sto" Mar"et so don;t get $ertur(ed

#ith short4term -o!ati!it*) A!#a*s remain in-ested &or a !ong term that is t*$ia!!* a time hori/on o& 5

*ears and a(o-e) Insurane is a matter o& Prudent In-estment' so e%erise it

LIMITATIONS O& T5E STUDY


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E-er* researh has its o#n !imitations . the $resent researh #or" is noe%e$tion to this genera! ru!e) The inherent !imitations o& the stud* are as under)

3) Due to shortage o& time . resoures sam$!e o& #ho!e Udai$urregion ou!d not (e ta"en)

1) The on!usion arri-ed at are (ased on a -er* !ess e%$eriene o&researher in this &ie!d)


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APPENDI/


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1I1LIORAP5Y

Sou)es:

3) 0rohures o& om$an* $roduts1) Ad-isors "it9) Pro$osa! &orms

?ebsite:###2s(i!i&e2om###2on!ines(i2om

)

uestionnaie


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S1I Li0e Insuan)e CO2 LTDG3st &!oor' Madha- Cham(ers' O$$) Post O&&ie' Cheta" Cir!e'Udai$ur4 939223Te!+ 216 :32995 :3299J

Pesona, Po0i,eName:Addess:Se4:A8e:Te,e'3one No2: Mobi,e No2:

V)3 Do *ou ha-e an* Insurane $o!i*W A) Kes 0) No

V)1 In *our o$inion #h* Li&e Insurane is re@uiredW

A) Sa-ings 0) In-estmentC) Ris" Co-ering Protetion D Future P!anning

V)9

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