SYNOPSIS (Akanksha Jain. 05817003909)

8/8/2019 SYNOPSIS (Akanksha Jain. 05817003909)

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SUMMER TRAINING PROJECT(SYNOPSIS)

FINANCIAL PLANNING FOR BETTERFUTURE

Undertaken at

Kotak Old Mutual Life Insurance Ltd.

Submitted in the partial fulfillment for the award of the degreeof

MASTER OF BUSINESSADMINISTRATION

Under the Supervision

and Guidance ofSubmitted by

Mr. R.K. Sharma(FACULTY GUIDE) Akanksha Jain(05817003909)

INDUSTRIAL GUIDE: MBA 3RD

Mr. Sachin Choudhary

Mr. Gurmeet

SESSION: 2010 - 2011

TECNIA INSTITUTE OF ADVANCED STUDIES(Approved by AICTE, Ministry of HRD, Govt. of India)

Affiliated To Guru Gobind Singh Indraprastha University, Delhi

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INSTITUTIONAL AREA, MADHUBAN CHOWK, ROHINI, DELHI- 110085E-Mail: [email protected], Website:

www.tecniaindia.orgFax No: 27555120, Tel: 27555121-24

INTRODUCTION:The only thing permanent in life is change. Time changes. People change. So does life.Every one expect life to be much better tomorrow than it is today. Tomorrow, every onehope to fulfill all their dreams and aspirations. For this, an effective personal financialplanning is essential for every person. Financial planning includes:-

Investment Planning: To make wealth grow Cash Flow Planning: To provide for assets and meet the periodic cash

requirements Tax Planning: To save on taxes and increase income Insurance Planning: To protect yourself, family and your assets Children's Future Planning: To give children a financially secure future Retirement Planning: Because retirement is a time to relax, not to get worried

Future is uncertain. When one is investing, volatility and inflation are part of the planning. At the child stage and old age stage of life, people need more economicsecurity and safety. For this, they invest money in various forms. Insurance plans is theone among the various form of investment which make future secure and better at the

time of retirement and for childrens education and marriage.

Childrens Future Planning

All parents want to give the best possible upbringing to their children. This includes goodeducation and security, in case of any eventuality. The purpose of Children's FuturePlanning is to create a corpus for foreseeable expenditures such as those on highereducation and wedding, and to provide for an adequate security cover during theirgrowing years. Children's Future Planning acquires added importance because children'seducation and wedding are high priority life goals, which can neither be postponed norcan there be a compromise on the amount.

There are many products which you can use to achieve the above objectives. Forexample, he could suggest a Children's Future Plan offered by any good insurancecompany, to build a corpus for your child's higher education, and provide for a securitycover in the event of the parent's unfortunate demise. Children's plans are also availableunder unit-linked option. Being unit-linked, they offer access to investments in all kindsof asset classes - equity, debt and cash.

Retirement planning

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Retirement is a reality for every working person. Most young people today think ofretirement as a distant reality. However, it is important to plan for post-retirement life ifanyone wish to retain their financial independence and maintain a comfortable standardof living even when there are no longer earning. This is extremely important. RetirementPlanning acquires added importance because of the fact that though longevity has

increased, the number of working years havent. There are two situations where money isneeded at old age.

Living too long

Living Death

Kotak Old Mutual Life Insurance Ltd.

Kotak Mahindra is in business since 1985 as a partnership between Uday Kotak and Mr.Mahindra, and insurance part of their business came into existence in the year 2001.

26% - 74% Joint Venture Between

Kotak Mahindra Life Insurance has Joint venture with Old Mutual plc.

Old Mutual Plc is the 12th largest Insurance Company in the world. It has its base of over4 million life assurance policyholders. It has one of the best Payouts among insurers inthe world. It has one of the best Solvency Ratios among insurers in the world. A FTSE100 financial services group and ranks as a Fortune Global 500 company. The companyis 160 years old and has prominent presence in the United States and the UnitedKingdom.

Vision

Kotak Life Insurance has a deep rooted commitment to improve the quality of life of itscustomers, employees and stakeholders. We aim at improving the long term value in our21 relationship by continuous innovation and improvements. We do this by our three-prong effort which strives to make Kotak Life Insurance a corporate with values.

Increase Customer Value:Kotak Life Insurance has gone to the heart of its customer's requirements and developedproducts which are unique and serve the customer needs perfectly. We built a relationshipof mutual trust and benefit to serve the Indian customer. At Kotak Life Insurance thecustomeralways comes first.

Cohesive Work Environment: -

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We form long-term partnership with our employees by offering them an invigoratingwork experience. We not only demand loyalty, sincerity and values but also give it backin equal measures. Kotak Life Insurance will like to offer its employees space to grow,innovate and build a long-term career.

MissionAt Kotak Life Insurance, we aim to help customers take important financial decisions atevery stage in life by offering them a wide range of innovative life insurance products, tomake them financially independent.

Kotak Retirement Plan

Kotak Long Life Wealth PlusKotak Second Innings PlanKotak Capital Multiplier PlanKotak Long Life Secure PlusKotak Guaranteed Pension Builder

Kotak Retirement Income Plan

Kotak Child Plan

Kotak Headstart Child PlansKotak Child Advantage Plan

Problem Statement:-The research problem which lies here is To manage the future uncertainty andexpectancy of people through effective financial planning with the help of insuranceplans at the time of retirement and for childrens future.

Objective:- To understand the concept of financial planning and analyze the financial plans

made by a customer of insurance company for their better future.

To analyze the match between life insurance policy given by Kotak Life insuranceand financial planning of their customers.

To determine the various factors which effect the financial planning of aninsurance customer for their retirement and childrens education.

To study the method for calculating the right amount of investment in insuranceby a person for future.

Scope:-Functional Area: FinanceTime of Study:point of time (45 days)Geographical Area Of Study:Northern, western and central Delhi.

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REVIEW OF WORK ALREADY DONE/REVIEW OF LITERATUREWith the help of various books, journals and internet, the review of concepts and theoriesand review of previous research finding is taken place.

Some previous research on marketing strategies is also studied.Some book are also reviewed of Insurance and Risk Managment to clear concepts andtheories.Financial planning is essential for better future but in India, there are very less peoplewho do the proper financial planning to make their future better and secure. The onlymain purpose of investment here is tax saving. The insurance companies try to come outwith new and innovative products which make life secure and better. Now-a-days, thereare various child plans and retirement plans available in the market.Way to plan:Don't buy insurance just because your neighbour bought it. Buy insurance because youneed it.

Understand your financial goals. Once you know what your aim is, you will be in a betterposition to choose the type of insurance you need - protection, savings, investment orretirement.Different insurance policies have different covers. Make sure your financial advisorpresents you with a list of recommendations, including the types of policies and benefits.Read them thoroughly to be aware of what your policy covers.The amount of insurance coverage you need depends on factors such as the number ofdependants, debts or mortgages, lifestyle and investment needs. Insurance cover shouldbe to such an extent that in case of one's demise, his / her dependents are able to maintainthe same lifestyle as they used to have before the unfortunate event occurred.

With insurance, we transfer the risk to another party. That party bears the risk that youare protecting yourself against. This risk may be death, disability, sickness or an accident.However, the party assuming the risk does not accept the risk without compensation. As aresult, premiums are charged. The party assuming the risk receives premiums from alarge group and is able to provide coverage to the whole group because the odds are thatnot everyone in the group will suffer the particular risk.

Insurance is important to any personal finance decision. Many events can wipe out assetswhich have been accumulated over a lifetime. Medical expenses, automobile accidents,natural disasters and legal liability suits are instances that can require a significantamount of resources. Individuals typically do not want to accept the risk that these events

may not occur nor are they willing to self-insure against these risks. Therefore, we seekinsurance and insurers are willing to provide coverage.

With a large population and the untapped market area of this population insurancehappens to be a very big opportunity in India. Today it stands as a business growing atthe rate of 15-20% annually. Together with banking services, it adds about 7 percent tothe countrys GDP. In spite of all this growth statistics of the penetration of the insurancein the country is very poor. Nearly 80% of Indian populations are without life insurance

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cover and the health insurance. This is an indicator that growth potential for the insurancesector is immense in India.

ABSTRACT OF PREVIOUS RESEARCH

TOPIC: Financial Planners and Investment Advisors

About 35,000 US companies with combined annual revenue of about $200 billionprovide financial planning and investment advice to individuals and businesses. Largecompanies include Ameriprise Financial, Charles Schwab, and units of diversifiedfinancial services companies such as Morgan Stanley. The industry is concentrated: the50 largest companies account for about half of revenue.Demand is driven by consumer income and wealth and demographics. The profitabilityof individual firms depends largely on effective marketing. Large companies have someadvantages in providing expertise in a wider range of investment options, and they may

be able to charge lower fees. Small companies can compete successfully by providingbetter service and advice.Financial planners help customers put together a plan to manage their financial resources;investment advisors suggest specific investments. About 70 percent of industry revenuecomes from providing services to individuals. Financial planners help individuals form aplan that may include debt, asset, college, retirement, estate and tax planning, and mayperiodically check with the client to see how well the plan is being followed. Much of theplanning revolves around an income and spending budget, with advice about the types offinancial investments suitable for the client. For wealthy individuals, and fororganizations such as trusts, estates, and charitable foundations, financial planners offermore comprehensive and detailed planning, often of a tax-sensitive nature, and frequentlyrecommend specific investments.

NOTE-WORTHY CONTRIBUTIONS IN THE FIELDFor effective financial planning, Bajaj Capital give the concept of 360 degree financialplanning which includes all type of planning related to money to make present and futurebetter and it also provides various tools and experts to find right amount of investment atevery stages of life and also helps in choosing the right form of investment .

360 Financial Planning is a unique software-based simulation that takes a holistic viewof your life-long financial needs and charts a personalised investment strategy to help youmeet them. Broadly, it involves:

Identifying your current financial status Listing and prioritising your goalsCreating a sound investment plan to achieve them

Monitoring the plan to facilitate swift corrective action, if needed

360 Financial Planning is based on the premise that every individual has certain basicfinancial needs that are expressed at various stages of life (getting married, buying assets

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like homes, vehicles, or providing for your children's education and wedding). With thehelp of 360Financial Planning, you can prepare yourself well in time for all these goals.

Some other financial institutions and insurance companies also provide tools likemathematical calculator and help of financial advisors to make financial planning of acustomer

RESEARCH METHODOLOGY

Research Design: It is the framework for conducting the research projectExploratory Research- It is a type of research where the main objective is to developinsights into problem and find the area where problem lies.Research is initiated by examining the secondary data to gain insight into the problem.The primary data is evaluated on the basis of the analysis of the secondary data.The data for this research project is collected through self administration. Due to timelimitation and other constraints direct personal interview method is used. A structuredquestionnaire is framed as it is less time consuming, generates specific and to the pointinformation, easier to tabulate and interpret. Moreover respondents prefer to give direct

answers. In questionnaires open ended and closed ended, both the types of questions isused.

Target Population:Policyholder of Kotak Old Mutual Life Insurance Ltd who live in northern, western andcentral part of Delhi.

Sampling Design:Non probability sampling design

Sampling Type:Convenience Sampling is used because there is some constraint like-

Resource constraintTime constraintCost constraint

Sample Size:50 policyholder

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Data Type:Primary Data- It is collected through the method of survey in which the researcher andrespondents come in personal contact.Secondary data-It is collected from the various books, journals and from the internet.

Instrument:Questionnaire

Analytical Tool:Tabulation of the responses from questionnaire, represent in the form of graphs and pie-charts and analyze it with the help of mean, median, and mode.

EXPECTED OUTCOMEIn todays changing world it is necessary for all people to secure their future. Theexpected outcome of the project:

This project will help in understanding the concept of financial planning done bya customer of insurance company for their better future and the factors that effecttheir financial planning.

This project will help in knowing the various tools to save the future of people byretirement planning and childrens education planning.

With the help of primary data, it will be found that whether people in India makeproper financial planning or not and whether this planning help in make theirfuture secure or not.

It will give knowledge about various tools to calculate the right amount ofinvestment by the use of mathematical calculator.

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