A Comparative Study of Investment Plan

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Sector – 8 Rohini, Delhi- 110085 Ph: 011-45044000 www.aparindiacollege.com

A Comparative Study of Investment Plan of ICICI Prudential Life Insurance, Life Insurance with Other

Code No : 01713

Companies

By

Mahi Uddin “Shams”

1

A

project

report for

submitted the

in

partial of

fulfillment of

of

the

requirements

degree

Master

Business

Administration of Sikkim Manipal University, INDIA

Sikkim Manipal University of Health, Medical and Technological Sciences Distance Education Wing Syndicate house, Manipal - 576104 I here by declare that the project entitled

A Comparative Study of Investment Plan of ICICI Prudential Life Insurance, Life Insurance with Other Companies

Submitted in partial fulfillment of the requirements for the degree of Masters of Business Administration to Sikkim Manipal

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University, INDIA, is my original work and not submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes.

Place : Delhi Date :

Mahi Uddin “Shams”
Reg. No : 510738565

The project report of

Mahi Uddin “Shams”

A Comparative Study of Investment Plan of ICICI Prudential Life Insurance, Life Insurance with Other Companies

3

is approved and is acceptable in quality and form.

Internal Examiner This is to certify that the project report entitled

External Examiners

A Comparative Study of Investment Plan of ICICI Prudential Life Insurance, Life Insurance with Other Companies

4

submitted in partial fulfillment of the requirements for the degree of Masters of Business Administration to Sikkim Manipal University of Health ,Medical and Technological Sciences

Mahi Uddin “Shams”
Has worked under my supervision and guidance and that no part of this report has been submitted for the award of any other degree, diploma, fellowship or other similar titles or prizes and that the work has not been published in any journal or magazine.

Reg. Certified

No

:

510738565

(Guide’s name)

Abstract
An operational definition of the insurance is:  The benefit provided by a particular kind of indemnity contract, called an insurance policy;  That is issued by one of several kinds of legal entities (stock insurance company, mutual insurance company, reciprocal, or Lloyd's syndicate, for example), any of which may be called an insurer;

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 The business of insurance is related to the protection of the economic values of assets.  The life insurance business deals with risks relating to life of human beings.

The objective of this project was to compare the investment plan of ICICI Prudential Life Insurance with other competitive companies. While doing the comparison I have studied the investment plans ICICI Prudential Life Insurance and that of the other competitive companies. I have also compared the market status of the company in respect of the other competitive companies. I would like to thank my mentor who provided me the guidance for understanding the investment plans, which will give me lots of experience and help me in future.

Acknowledgement

I hereby express my gratitude to faculties & Apar India Institute

of Management AND TECHNOLOGY for giving me this
opportunity to work on this project and for helping me and providing timely guidance in all matters related to my project.

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I am thankful to Mr. Ram Pujan Sharma (Financial Planning Manager, ICICI Prudential Life Insurance) for providing me with an opportunity to work in this organization. I also thank him for his valuable inputs in my project and for also giving me an insight into the actual working of the company.

I express my indebtedness and gratitude to my company project guide Mr. LALIT TYAGI (Unit Manager, ICICI Prudential life Insurance) for his constant support and encouragement throughout the execution of the project, without him this project would not have been possible.

(MAHI UDDIN “SHAMS”)
Index
S.NO
1. 2. 3. 4. 5. 6.

CONTENTS
Introduction Objectives Of Research Research Methodology Literature Review Industry profile -SWOT analysis of Insurance sector Company profile -Fact Sheet
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PAGE NO.
8 27 27 29 36 42 48 48

7.

-Distribution -Promoters -Management Team -Products Data analysis -On the basis of company share in

49 49 50 56 83 84

market -On the basis of investment plan of 95 8. 9. 10. 11. other companies Conclusion Recommendation Annexure Bibliography 102 103 108 115

Introduction What Is Insurance

The business of insurance is related to the protection of the economic values of the asset. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it. The benefit may be an income or something else. It is a benefit because it meets some of his needs. In case of factory or a cow, the product generated by is sold and income is generated. In case of a motor car, it provides comfort and convenience in transportation. There is no direct income. Every asset is expected to last for a certain period of time during which it will perform. After that, the benefit may not be available. There is a life-time for a machine in a factory or a cow or a motor car. None of them will last for ever. The owner is aware of this and he can so manage his affairs by the end of that period or life-time, a substitute is made

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available. Thus, he makes sure that the value or income is not lost. However, asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it non-functional. In that case, the owner and those deriving benefits there from, would be deprived of the benefit and the planned substitute would not have been ready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of such adverse situations.

What is Life Insurance?

Life insurance ensures that your family will receive financial support in your absence. Put simply, life insurance provides your family with a sum of money should something happen to you. It protects your family from financial crises.

In addition to serving as a protective cover, life insurance acts as a flexible moneysaving scheme, which empowers you to accumulate wealth-to buy a new car, get your children married and even retire comfortably. Life insurance also triples up as an ideal tax-saving scheme.

Brief History Of Insurance

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The business of insurance started with marine business. Traders, who used to gather in the Lloyd’s coffee house in London, agreed to share the losses to occur because of pirates who robbed on the high seas or because of bad weather spoiling the goods or sinking the ship. The first insurance was issued in 1583 in England. In India, insurance began in 1870 with life insurance being transacted by an English company, the European and the Albert. The first Indian insurance company was the Bombay Mutual Assurance Society Ltd, formed in 1870. This was followed by the Oriental Life Assurance Co. in 1874, the Bharat in 1896 and the Empire of India in 1897.

Later, the Hindustan Co operative was formed in Calcutta, the United India in Madras, the Bombay Life in Bombay, the National in Calcutta, the New India in Bombay, the Jupiter in Bombay and the Lakshmi in New Delhi. These were all Indian companies, started as a result of the swadeshi movement in the early 1900’s. By the year 1956, when the life insurance business was nationalised and the Life Insurance Corporation of India (LIC) was formed on 1st September 1956, there were 170 companies and 75 provident fund societies transacting life insurance business in India. After the amendments to the relevant laws in 1999, the L.I.C. did not have the exclusive privilege of doing life insurance business in India. By the 31.3.2002, eleven new insurers had been registered and had begun to transact life insurance business in India.

Purpose And Need Of Insurance
Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc, are perils. If such perils can cause damage to the asset, we say that the asset is exposed to that risk. Perils are the events. Risks are the consequential losses or the damages. The risk to an owner of a building, because of the peril of an

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earthquake, may be a few lakhs or a few crores of rupees, depending on the cost of the building and the contents in it. The risk only means that there is a possibility of loss or damage. The damage may or may not happen. Insurance is done against the contingency that it may happen. There has to be an uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. In the case of an human being, death is certain, but the time of death is uncertain. In the case of a person who is terminally ill, the time of death is not uncertain, though not exactly known. He cannot be insured. Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through the insurance. The peril can sometimes be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. It only compensates the losses – and that too, not fully. Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of non-economic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc.

How Insurance Works

The mechanism of insurance is very simple. People who are exposed to the same risks come together and agreed that, if any one of them suffers a loss, the others will share the loss and make good to that person who lost. All people who send goods by ship are exposed to the same risks which are related to water damage, ship sinking, piracy, etc. Those owing factories are not exposed to these risks, but they are exposed to different 11

type of risks like, fire, hailstorms, earthquakes, lightning, burglary, etc. Like this different type of risks can be identified and separate groups made, including those exposed to such risks. By this method the heavy loss that any one of them may suffer (all of them may not suffer such losses at the same time) is divided into bearable small losses by all. In other words, the risk is spread among the community and the likely big impact on one is reduced to smaller manageable impacts on all. If a jumbo Jet with more than 350 passenger crashes, the loss would run into several crores of rupees. No airline would be able to bear such a loss. It is unlikely that many Jumbo Jets will crash at the same time. If 100 airline companies flying Jumbo Jets, come together into the insurance pool, whenever one of the Jumbo Jets in the pool crashes, the loss to be borne by each airline would come down to a few lakhs of rupees. Thus, insurance is a business of ‘sharing’. There are certain principles, which make it possible for insurance to remain a fair arrangement. The first is that it is difficult for any one individual to bear the consequences of the risks that he is exposed to. It will become bearable when the community shares the burden. The second is that the peril should occur in an accidental manner. Nobody should be in a position to make the risk happen. In other words, none in the group should set fire to his assets and asks others to share the costs of damage. This would be taking the unfair advantage of an arrangement put into place to protect people from the risks they are exposed to. The occurrence has to be random, accidental, and not the deliberate creation of the insured person. The manner in which the loss is to be shared can be determined before-hand. It may be proportional to the risk that each person is exposed to. This would be indicative of the benefit he would receive if the peril befell him. The share could be collected from the members after the loss has occurred or the likely shares may be collected in advance, at the time of admission to the group. Insurance companies collect in advance and create a fund from which the losses are paid.

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The collection to be made from each person in advance is determined on assumptions. While it may not be possible to tell beforehand, which person will suffer, it may be possible to tell, on the basis of past experiences, how many persons, on an average, may suffer losses. The following example explains the above concept of insurance: Example: In a village, there are 400 houses, each valued at Rs.20, 000. Every year, on the average, 4 houses get burnt, resulting into a total loss of Rs.80, 000. If all the 400 owners come together and contribute Rs.200 each, the common fund would be Rs.80000. This is enough to pay Rs.20000 to each of the 4 owners whose hoses got burnt. Thus, the risk of 4 owners is spread over 400 house owners of the village.

The Human Asset
A human being is an income generating asset. One’s manual labour, professional skills and business acumen are the assets. This asset can also be lost through unexpectedly early death or through sickness and disabilities caused by accidents. Accidents may or may not happen. Death will happen, but the timing is uncertain. If it happens around the time of one’s retirement, when it could be expected that the income will normally cease, the person concerned could have made some other arrangements to meet the continuing needs. But if it happens much earlier when the alternate arrangements are not in place, there can be losses to the person and dependents. Insurance is necessary to help those dependent on the income. A person, who may have arrangements for his needs after his retirement, also would need insurance. This is because the arrangements would have been made on the basis of some expectations like, likely to live for another 15 years, or that children will look after him. If any of these expectations do not become true, the original arrangement would become 13

inadequate and there could be difficulties. Living too long can be as much a problem as dying too young. Both are risks, which need to be safeguarding against. Insurance takes care.

The Business Of Insurance
Insurance companies are called insurers. The business of insurance is to:a) bring together persons with common insurance interests (sharing the same risks) b) collect the share or contribution (called premium) from all of them and, c) Pay out compensation (called claims) to those who suffer. The premium is determined on the same lines as indicated in the example above, but with some further refinements.

In India, insurance business is classified primarily as life and non-life or general. Life insurance includes all risks related to the lives of human beings and general insurance covers the rest. General insurance has three classifications viz. , Fire (dealing with all fire related risks), Marine (dealing with all transport related risks and ships) and Miscellaneous (dealing with all others like liability, fidelity, motor, crop, personal accident, etc.). Personal accident and sickness insurance, which are related to human beings, is classified as ‘non-life’ in India, but is classified as ‘life’, in many other countries. What is ‘Non-life’ in India is termed as ‘Property and Casualty’ in some other countries. The insurer is in the position of a trustee as it is managing the common fund, for and on behalf of the community of policyholders. It has to ensure that nobody is allowed to take undue advantage of the arrangement. That means that the management of the insurance business requires care to prevent entry (into the group) of people whose risks are not of the same kind as well as paying claims on losses that are not accidental. The decision to allow entry is the process of underwriting of risk. Underwriting includes assessing the 14

risk, which means, making an evaluation of how much is the exposure to the risk. The premium to be charged depends on this assessment of the risk. Both underwriting and claim settlements have to be done with great care.

Role Of Insurance In Economic Development
As we know for economic development, investments are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of the people, particularly from the middle and the lower income groups. These savings are channeled into investments for economic growth. All good life insurance companies have huge funds, accumulated through the payments of small amounts of premia of individuals. These funds are invested in ways that contribute substantially for the economic development of the countries in which they do business. The private insurers in India are new and had not built up funds in 2002. But now they are also capable to contribute to the country’s economic development.

Types Of Insurance
I. Classification on the basis of nature of business

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Life Insurance Life insurance may be defined as a contract in which the insurer, in consideration of a certain premium, either in a lump sum or by other periodical payments, agrees to pay to the assured, or to the person for whose benefit the policy is taken, the assured sum of money / on the happening of a specified event contingent on the human life. A contract of life insurance, as in other forms of insurance, requires that the assured must have at the time of the contract an insurable interest in his half upon which the insurance is effected. In a contract of life insurance, unlike other insurance interest has only to be proved at the date of the contract, and not necessarily present at the time when the policy falls due. A person can assure in his own life and every part of it, and can insure for any sum whatsoever, as he likes. Similarly, a wife has an insurable interest in her husband and vice-versa. However, mere natural love and affection is not sufficient to constitute an insurable interest. It must be shown that the person affecting an assurance on the life of another is so related to that other person as to have a claim for support. For example, a sister has an insurable interest in the life of a brother who supports her. A person not related to the other can have insurable interest on that other person. For example, a creditor has insurable interest in the life of his debtor to the extent of the debt. A creditor can insure the life of his debtor up to the amount of the debt, at the time of issue of the policy. An employee has an insurable interest in the life of the employer arising out of contractual obligation to employ him for a stipulated period at fixed salary. Similarly, from an employer to the employer, who is bound by the contract to serve for a certain period of time. However, mere natural love and affection is not sufficient to constitute an insurable interest. It must be shown that the person affecting an assurance on the life of another is so related to that other person as to have a claim for support. For example, a sister has an

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insurable interest in the life of a brother who supports her. Fire Insurance Fire insurance is a contract to indemnity the insured for distribution of or damage to property caused by fire. The insurer undertakes to pay the amount of the insured's is loss subject to the maximum amount stated in the policy. Fire insurance is essentially a contract of indemnity, not against accident, but against loss caused by accident, ft is becoming very common in fire insurance policies to insert a condition, called the average clause, by which the insured is called upon to bear a portion of the loss himself. The main object of this clause is to check under-insurance and to encourage for full insurance. It impress upon the property-owner for the need of having his property accurately valued before insurance. Regarding insurable interest, the insured must have insurable interest in the subject matter both at the time of affecting the policy and at the time of loss. The risk in fire insurance policy commences from the moment of cover note, or the deposit receipt, or the interim protection is issued, and continues for the term covered by the contract of insurance. It may even date back; if the parties so intend. The rate of premium varies to the degree of hazard or risk involved. Marine insurance A contract of marine insurance is an agreement whereby the insurer undertakes to indemnity the assured in a manner and to the extent thereby agreed, against marine losses, that is, the losses incidental to marine adventure. There is a marine adventure when any insurable property is exposed to marine perils; Marine perils also known as perils of the seas, means the perils consequent on, or incidental to, the navigation of the sea or the perils of the seas, such as fire, war perils, pirates, rovers, thieves; captures. Jettisons, barratry and any other perils which are either of the like kind or may be designed by the policy.

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There are different types of marine policies known by different names according to the manner of their execution or the risk they cover. They are: Voyage policy, time policy, valued policy, unvalued policy, floating policy, wager or honour policy. Social insurance Social insurance has been developed to provide economic security to weaker sections of the society who are unable to pay the premium for adequate insurance Pension plans, disability benefits, unemployment benefits; sickness insurance, etc. are the various forms of social insurance.

Miscellaneous Insurance The process of fast development in the society gave rise to a number of risks or hazards. To provide security against such hazards, many other types of insurance also have been developed. The important among them are: (i) Vehicle insurance on buses, trucks motorcycles, etc., Rs. 12000/- can be insured.) (iii) Burglary insurance - (against theft, decoity etc.) (iv) Legal liability insurance (insurance whereby the assured is liable to pay the damages to property or to compensate the loss of personal injury or death.) (v) Crop insurance (crops are insured against losses due to heavy rain and floods, cyclone, draughts, crop diseases, etc.) (vi) Cattle insurance — (Insurance for indemnity against the loss of cattle’s from various kinds of disease)

(ii) Personal accident insurance (by pacing an annual premium of Rs 12/- Policy worth

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In addition to the above, insurance policies are available against crime, medical insurance, bullock cart insurance, jewelry insurance, cycle rickshaw insurance, radio – T.V. insurance, etc.

II. Classification From Risk Point Of View
From risk point of view, insurance can be classified into four categories: i) ii) iii) iv) Personal insurance Property insurance Liability insurance Fidelity guarantee insurance

A brief description of each is given below: i) Personal insurance

Personal insurance refers the loss to life by accident, or sickness to individual which is covered by the policy. The insurer undertakes to pay the sum insured on the happening of certain event or on maturity of the period of insurance. The insurable sum is determined at the time of effecting the policy and includes life insurance, accident insurance, and sickness insurance. Life insurance contains the element of investment and protection, while the accidental, sickness or health insurance contains the element of indemnity only. ii) Property insurance Contract of property insurance is a contract of indemnity. Proof by the assured of loss is an essential element of property insurance. "The policies of insurance against burglary, home-breaking or theft etc. fall under this category. The assured is required to protect the insured property. After the loss has taken place, the assured usually required to notify the

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police as to losses. iii) Liability insurance Liability insurance is the major field of General insurance whereby the insurer promises to pay the damage of property or to compensate the tosses to a third party. The amount of compensation is paid directly to third party. The fields of liability insurance include workmen compensation insurance/ third party motor insurance, professional indemnity insurance and third party liability insurance etc. In liability insurance, there may be various reasons for the arising of liability; viz., accident of a worker at the workplace, defective goods, explosion in the factory during the process of production, formation of poisonous gas within the factory, due to the uses of chemicals and other such substances in the manufacturing process. iv) Fidelity guarantee insurance In this type of insurance, the insurer undertakes to indemnify the assured (employer) in consideration of certain premium, for losses arising out of fraud, or embezzlement on the part of the employees. This kind of insurance is frequently adopted as a precautionary measure in cases where new and untrained employees are given positions of trust and confidence.

Some Insurance Terms
Premium: The payment made by the insured, as consideration for the grant of the
insurance is known as Premium. The premium may be payable annually or at shorter intervals of time & may be payable throughout the period of the policy or only for a fixed term, depending upon the conditions in the policy.

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Premium Earned & Premium Written: Premium earned is the amount of
premiums earned by the risk covered by an insurer during a period. Premium written is the amount customers are required to pay for policies written during the year. The two differ because of the timing of premium payments. For example if: • • • An insurance policy that runs from the 1st July 2005 to the 30th June 2006. The premium is Rs.10,000. The insurance company has a December year-end.

Then, as the policy runs for six months of this year and six months of next, half the risk is taken in the current year and half next year. Therefore the premium earned is Rs.5,000 for 2005 and Rs.5,000 for 2006. However as the cover is agreed during 2005, the gross premium written is Rs.10,000 for 2005.

Claims: A claim occurs when a policy falls due for payment. In case of life insurance
business, it will arise either on death or on maturity of policy i.e. on the expiry of the specified term of years. In case of general insurance business, a claim arises only when the loss occurs or the liability arises.

Premium Deficiency: Premium deficiency is recognised if the ultimate amount of
expected net claim costs, related expenses and maintenance costs exceeds the sum of related premium carried forward to the subsequent accounting period as the reserve for unexpired risk. Premium deficiency is calculated by line of business. The Company considers maintenance costs as relevant costs incurred for ensuring claim handling operations.

Catastrophe Reserve: This reserve shall be created in accordance with norms if any,
prescribed by authority. Investment of funds out of Catastrophe reserve shall be made in accordance with prescription of the authority. 21

Fair Value Change: Fair Value Change account represents unrealised gains or losses
in respect of investments outstanding at the close of the year. The balance in the account is considered as component of shareholders' funds though not available for distribution as dividend.

Claims incurred: Claims incurred shall comprise claims paid, specific claims
settlement cost wherever applicable & change in the outstanding provision for claims at the year-end.

Diminution in the value of investments: Diminution in the value of investments
is the reduction in value of investments.

Deferred Taxes: The deferred taxes assets and liabilities arise due to timing
differences.

Annuity: A recurring payment, which may be constant or may increase, usually made
until the death of the person receiving the annuity. An annuity can also be paid to 2 people. In this case, the payment ceases on death of second person.

Annuity Certain: Annuity, which makes payments for a specified period of time
regardless of whether the annuitant is alive or dead during that period.

Policyholder’s Surplus: The amount by which an insurance company’s assets
exceed its liabilities, as reported in its annual statement. policyholder’s surplus equals the company’s surplus. For a stock insurer, the policyholder’s surplus is the sum of its capital & surplus; for a mutual insurer, the

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Shareholders’ and Policyholders’ Fund: The Shareholders’ Fund comprises of
Share Capital, General Reserve and Capital Reserve. The Policyholders’ Fund comprises of Technical Reserves and Provision for Outstanding Claims.

Ceded Reinsurance: The amount of insurance transferred from a ceding insurer to a
reinsurer.

Ceding Insurer: An original or primary insurer that purchases reinsurance; in so
doing, the primary insurer cedes part of its business to the reinsurer.

Reinsurance: Risk transferred from one insurer to another; a contract whereby the
assuming insurer (reinsurer) agrees to indemnify the ceding insurer (cedent) for all or part of the claim liabilities under policies issued by the ceding insurer, which pays the reinsurer a premium in return. By ceding some of its business, an insurer may write more business within its reserve or surplus requirements. Assuming insurers may cede risks to other reinsurers, which is called retrocession. The two basic types of reinsurance are facultative, involving the transfer of individual risks, and treaty, involving the transfer of all risks in a class of business. The ceding insurer usually remains liable for policy claims, and the reinsurer must indemnify the cedent. In the less common assumption reinsurance, the reinsurer becomes directly liable for claims settlement.

Retrocession: reinsurance of reinsurance. Example: Company “B” has accepted
reinsurance from Company “A”, and then obtains for itself, on such business assumed, reinsurance from Company “C”. This secondary reinsurance is called a Retrocession. The transaction whereby a reinsurer cedes to another reinsurer all or part of the reinsurance it has previously assumed.

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Advantages of Life Insurance
Life insurance has no competition from any other business. Many people think that life insurance is an investment or a means of saving. This is not a correct view. When a person saves, the amount of funds available at any time is equal to the amount of money set aside in the past, plus interest. This is so in a fixed deposit in the bank, in national savings certificates, in mutual funds and all other savings instruments. If the money is invested in buying shares and stocks, there is the risk of the money being lost in the fluctuations of the stock market. Even if there is no loss, the available money at any time is the amount invested plus appreciation. In life insurance, however, the fund available is not the total of the savings already made (premiums paid), but the amount one wished to have at the end of the savings period (which is the next 20 or 30 years). The final fund is secured from the very beginning. One is paying for it later, out of the savings. One has to pay for it only as long as one lives or for a lesser period if so chosen. There is no other scheme which provides this kind of benefit. Therefore, life insurance has no substitute. Even so, a comparison with other forms of savings will show that life insurance has the following advantages:  In the event of death the settlement is easy. The heirs can collect the money quicker, because of the facility of nomination and assignment. The facility of nomination is now available for some bank accounts.  There is a certain amount of compulsion to go through the plan of savings. In other forms, if one changes the original plan of savings, there is no loss. In insurance, there is a loss.  There are tax benefits, both in income tax and in capital gains.  Marketability and liquidity are better. A life insurance policy is property and can be transferred or mortgaged. Loans can be raised against the policy.  It enhances the existing standards of living.  It helps people live financially solvent lives.

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 Life insurance is a way of life.

Key Benefits of Life Insurance

Life insurance, especially tailored to meet your financial needs

Need for Life Insurance Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets. Let us look at these unique benefits of life insurance in detail. Asset Protection From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation. The core benefit of life insurance is that the financial interests of one’s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder.

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Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.

Goal based savings Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence. Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailormade for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. The table below gives a general guide to the plans that are appropriate for different life stages.

Life Stage

Primary Need

Life Insurance Product

Young & Single Asset creation Wealth creation plans Young & Just Wealth creation and mortgage protection Asset creation & protection married plans Children's education, Asset Education insurance, mortgage protection Married with kids creation and protection & wealth creation plans Middle aged with Planning for retirement & asset Retirement solutions & mortgage

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grown up kids protection Across all life-stages Health plans

protection Health Insurance

Objectives Of Research
The objectives of research are as follows: 

To study the investment plans offered by ICICI. To study the investment plans offered by other competitive companies like HDFC, ING Vyasa, Reliance Life Insurance etc. To carry out comparison of insurance investment plan of ICICI Prudential Life Insurance with other companies. To compare the market share of ICICI with respect to other private players.





Research Methodology
Research comprises defining and redefining problems, formulating hypothesis or suggested solution collecting, organizing and evaluating data, making deductions and reaching conclusion and at last carefully testing the conclusion to determine whether they fit the formulating hypothesis.

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The manipulation of things, concepts, or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of art. The research methodology used in this project is comparative research.

Comparative Research
Comparative research, simply put, is the act of comparing two or more things with a view to discovering something about one or all of the things being compared. This technique often utilizes multiple disciplines in one study. I have used this as this includes the comparison of different plans with respect to investment plan of ICICI Prudential Life Insurance.

Data source: Data collection is a technique through which data can be collected
within minimum cost and with greater reliability. Data can be collected from two sources: 1) Primary data 2) Secondary data The data collected for my project is only from secondary data from the Unit Manager and the websites of corresponding companies.

Sampling plan Sampling technique: simple random sampling

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In statistics, a simple random sample is a group of subjects (a sample) chosen from a larger group (a population). Each subject from the population is chosen randomly and entirely by chance, such that each subject has the same probability of being chosen at any stage during the sampling process. This process and technique is known as Simple Random Sampling. In this project we have taken the population size of 12 companies. The sample size selected is 6.

Literature Review

With over a billion people, India is fast becoming a global economic power. With a relatively youthful population, India will become an attractive insurance market over the next decades. This review examines the Indian insurance industry. It starts by examining the details of the regulatory regime that existed before independence. This is important because the culmination of the Insurance Act of 1938 became the backbone of the current legislation in place. It highlights the importance of the rural sector – where the majority of the Indians still live. It shows how the recent privatization is playing out in the market. Based on recent economic estimates, the review provides projections of segments of the market for 2025.

An Analysis of the Evolution of Insurance in India

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India had the nineteenth largest insurance market in the world in 2003. Strong economic growth in the last decade combined with a population of over a billion makes it one of the potentially largest markets in the future. Insurance in India has gone through two radical transformations. Before 1956, insurance was private with minimal government intervention. In 1956, life insurance was nationalized and a monopoly was created. In 1972, general insurance was nationalized as well (endnote 1). But, unlike life insurance, a different structure was created for the industry. One holding company was formed with four subsidiaries. As a part of the general opening up of the economy after 1992, a Government appointed committee recommended that private companies should be allowed to operate. It took six years to implement the recommendation. Private sector was allowed into insurance business in 2000. However, foreign ownership was restricted. No more than 26% of any company can be foreign-owned. In what follows, we examine the insurance industry in India through different regulatory regimes. A totally regulation free regime ended in 1912 with the introduction of regulation of life insurance. A comprehensive regulatory scheme came into place in 1938. This was disabled through nationalization. But, the Insurance Act of 1938 became relevant again in 2000 with deregulation. With a strong hint of sustained growth of the economy in the recent past, the Indian market is likely to grow substantially over the next few decades. Insurance business was conducted in India without any specific regulation for the insurance business. They were subject to Indian Companies Act (1866). After the start of the “Be Indian Buy Indian Movement” (called Swadeshi Movement) in 1905, indigenous enterprises sprang up in many industries. Not surprisingly, the Movement also touched the insurance industry leading to the formation of dozens of life insurance companies along with provident fund companies (provident fund companies are pension funds). In 1912, two sets of legislation were passed: the Indian Life Assurance Companies Act and the Provident Insurance Societies Act. There are several striking features of these legislations. First, they were the first legislations in India that particularly targeted the insurance sector. Second, they left general insurance business out of it. The government

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did not feel the necessity to regulate general insurance. Third, they restricted activities of the Indian insurers but not the foreign insurers even though the model used was the British Act of 1909. One holding company was formed with four subsidiaries. As a part of the general opening up of the economy after 1992, a Government appointed committee recommended that private companies should be allowed to operate. It took six years to implement the recommendation. Private sector was allowed into insurance business in 2000. However, foreign ownership was restricted. No more than 26% of any company can be foreign-owned.

Comprehensive insurance legislation covering both life and non-life business did not materialize for the next twenty-six years. During the first phase of these years, Great Britain entered World War I. This event disrupted all legislative initiatives. Later, Indians demanded freedom from the British. As a concession, India was granted “home rule” through the Government of India Act of 1935. It provided for Legislative Assemblies for provincial governments as well as for the central government. But supreme authority of promulgated laws still stayed with the British Crown. The only significant legislative change before the Insurance Act of 1938, was Act XX of 1928. It enabled the Government of India to collect information of (1) Indian insurance companies operating in India, (2) Foreign insurance companies operating in India and (3) Indian insurance companies operating in foreign countries. The last two elements were missing from the 1912 Insurance Act. Information thus collected allows us to compare the average size face value of Indian insurance companies against their foreign counterparts. In 1928, the average policy value of an Indian

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company was 619 US dollars against 1,150 US dollars for foreign companies (Source: Indian Insurance Commissioner’s Report, 1929, p. 23). Foreign insurance companies were doing well during that period. In 1938, the average size of the policy sold by Indian companies has fallen to 532 US dollars (in Comparison with 619 US dollars in 1928) and that of foreign companies had risen somewhat to 1, 188 US dollars (in 1928, the average size was 1,150 US dollars).

The Birth of the Insurance Act, 1938

In 1937, the Government of India set up a consultative committee. Mr. Sushil C. Sen, a well known solicitor of Calcutta, was appointed the chair of the committee. He consulted a wide range of interested parties including the industry. It was debated in the Legislative Assembly. Finally, in 1938, the Insurance Act was passed. This piece of legislation was the first comprehensive one in India. It covered both life and general insurance companies. It clearly defined what would come under the life insurance business, the fire insurance business and so on (see Appendix 1). It covered deposits, supervision of insurance companies, investments, commissions of agents, directors appointed by the policyholders among others. This piece of legislation lost significance after nationalization. Life insurance was nationalized in 1956 and general insurance in 1972 respectively. With the privatization in the late Twentieth Century, it has returned as the backbone of the current legislation of insurance companies. All legislative changes are enumerated in Table.

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When the market was opened again to private participation in 1999, the earlier Insurance Act of 1938 was reinstated as the backbone of the current legislation of insurance companies, as the Insurance Regulatory and Development Authority Act of 1999 was superimposed on the 1938 Insurance Act. This revival of the Act has created a messy problem. The Insurance Act of 1938 explicitly forbade financial services from the activities permitted by insurance companies. By 1956, there were 154 Indian life insurance companies. There were 16 nonIndian insurance companies and 75 provident societies were issuing life insurance policies. Most of these policies were centered in the cities (especially around big cities like Bombay, Calcutta, Delhi and Madras).

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Milestones of Insurance Regulations in the 20th Century

Year Significant Regulatory Event 191 The Indian Life Insurance Company Act 2 192 8 193 8 195 6 197 2 199 3 199 4 199 5 199 6 199 7 199 7 Indian Insurance Companies Act The Insurance Act: Comprehensive Act to regulate insurance business in India Nationalization of life insurance business in India with a monopoly awarded to the Life Insurance Corporation of India Nationalization of general insurance business in India with the formation of a holding company General Insurance Corporation Setting up of Malhotra Committee Recommendations of Malhotra Committee published Setting up of Mukherjee Committee Setting up of (interim) Insurance Regulatory Authority (IRA) Recommendations of the IRA Mukherjee Committee Report submitted but not made public The Government gives greater autonomy to Life Insurance Corporation, General Insurance Corporation and its subsidiaries with regard to the restructuring of boards and flexibility in investment norms aimed at channeling funds to the 199 8 199 9 199 9 infrastructure sector The cabinet decides to allow 40% foreign equity in private insurance companies26% to foreign companies and 14% to Non-resident Indians and Foreign Institutional Investors The Standing Committee headed by Murali Deora decides that foreign equity in private insurance should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and Development Authority Bill Cabinet clears Insurance Regulatory and Development Authority Bill

200 0

President gives Assent to the Insurance Regulatory and Development Authority Bill

Investment Regimes

Investment regimes in insurance in India have always had quantitative restrictions. Current legal requirements are explained in Table 2 for life business. At least half of the investment has to be either directly in government securities (bonds) or for infrastructure investments (which also take the form of government bonds). These investment options are “safe” as they are fully backed by the government. Of course, it also means they earn the lowest rate of return in the Indian market. The government (both at the federal and state levels) has used insurance business as a way of raising capital. Unfortunately, much of it has been spent on consumption expenditure leading to substantial increase in governmentdebt.

Investment Regulation of Life Business Type of Investment I II Government Securities Government Securities or other approved Percentage 25%, securities Not less than 50%,

(including (I) above) III Approved Investments as specified in Schedule I Infrastructure and Social Sector Explanation: For the purpose of this requirement, Infrastructure and Social Sector shall have the meaning as given in regulation 2(h) of Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000 and as defined in the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural and Social Sector) Regulations, 2000 respectively Others to be governed by Exposure/ Prudential Norms specified in Not exceeding 20% Not less than 15%

Regulation 5 IV Other than in Approved Investments to be governed by Not exceeding 15% Exposure/ Prudential Norms specified in Regulation 5

Source: Gazette of India Extraordinary Part III Section 4. Insurance Regulatory and Development Authority (Investment) Regulations, 2000

Industry Profile
With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and banking services’ contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer.

The life insurance industry in India grew by an impressive 36%, with premium income from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private insurers. This report, “Indian Insurance Industry: New Avenues for Growth 2012”, finds that the market share of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared to the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased their market share from about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. There are presently 12 general insurance companies with four public sector companies and eight private insurers. According to estimates, private insurance companies collectively have a 10% share of the non-life insurance market.

Private Player of Life Insurance

1. 2. 3. 4.

ICICI Prudential Life Insurance HDFC Standard Life SBI Life Insurance Birla Sunlife

5. 6. 7. 8. 9.

Bajaj Allianz Life Aviva Life Insurance Kotak Mahindra Life Insurance Tata AIG Life Reliance Life Insurance Company Limited (formerly known as AMP Sanmar LIC) ING Vyasya Life Insurance Metlife India Life Insurance Max New York Life Insurance Shriram Life Insurance Bharti AXA Life Insurance Company Limited

10. 11. 12. 13. 14.

Types of Insurance on The Basis of Business Point of View:
i) Life Insurance ii) General Insurance i) Life Insurance:

Life Insurance is universally acknowledged to be an institution which eliminates 'risk' and provides the timely aid to the family in the unfortunate event of death of the breadwinner.

Life Insurance is a contract for payment of a sum of money to the person assured (or nominee) on the happening of the event insured against. The contract provides for the payment of premium periodically to the Insurance Company by the assured. The contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death, if it occurs earlier.

ii) General Insurance: General insurance business refers to fire, marine, and miscellaneous insurance business whether carried on singly or in combination with one or more of them, but does not include capital redemption business and annuity certain business. [According to Sec. 3(g) of the General Insurance business (Nationalization) Act, 1972]. Features of Indian General Insurance Market: 1) Low market penetration. 2) Ever-growing middle class component in population. 3) Growth of consumer movement with an increasing demand for better insurance products. 4) Inadequate application of information technology for business. 5) Adequate fillip from the Government in the form of tax incentives to the insured, etc. 6) India is one of the least insured countries but the potential for further growth is phenomenal. 7) Rates of claim settlement were earlier in India the highest in the world, 70 per cent in general insurance, compared to around 40 per cent internationally. 8) Non-life premium has a 0.71 per cent share of GDP. 9) General Insurers (Private Companies) have earned around Rs.1000-cr income. 10) Half of the current demand for comes from the corporate segment.

Benefits of General Insurance: 1) Insurance is the instrument of Security, saving and peace of mind. It provides several benefits by paying a small amount of premium to an insurance company. 2) Safeguards one’s assets. 3) Peace of mind-in case of financial loss. 4) Encourage saving. 5) Tax rebate. 6) Protection from the claim made by creditors. 7) Security against a personal loan, housing loan or other types of loan.

Products of General Insurance
The Assurance Company Ltd. and the United India Insurance Company. The Government of India subscribed to the capital of GIC. GIC, in turn, subscribed to the capital of the four companies. All the four companies are government companies registered under the Companies Act. GIC is into the reinsurance business whereas its subsidiaries are into the insurance of Non Life products.

Product Range
i) Motor Insurance: Motor insurance is mandatory for all vehicles in India. There are two types of motor insurance • Third Party- only insures the party (parties) other than the owner in an incident. • Comprehensive- that insures the owner as well as the third party involved. The premium for motor Vehicles is decided on the value of the vehicle and location where it is to be registered. The premium for heavy commercial vehicle is decided on the value of the vehicle and gross laden weight.

ii) Property Insurance: Property insurance covers land, building and the contents of the building. iii) Burglary: Burglary insurance covers all losses arisen out of burglary committed in one’s premises. iv) Fire Insurance: Fire Insurance is a Comprehensive policy. This policy besides covering loss on account of fire also covers loss on account of the following Earthquake, Riots, Strikes, Malicious intent, Floods. v) Health Insurance: Health insurance polices ensure guarding ones health against any calamities that may cause long term harm to his/her life and can hamper ones earning available for ability for a lifetime. These health policies are individuals and groups. vi) Liability Insurance: This policy indemnifies the Directors or Officers or other professionals against loss arising from claims made against them by reason of any wrongful Act in their Official capacity. vii) Marine Insurance • Cargo in transit • Cargo declaration Policy • Marine Hull Insurance: Inland vessels ocean going vessels, fishing & sailing vessels, freight at risk, construction of ships, voyage insurance of various vessels, ship breaking, insurance Awaiting break up, Insurance Oil & Energy in respect of onshore & offshore risks including construction risk. viii) Travel Policy: Any tourist may die or loss their baggage’s, passport etc. while traveling. Travel policies are designed to care of all the problems that generally occur while traveling.

ix) Business policy: A Business policy covers the risks of loss of business goods, plant and machinery etc. x) Other General Policy: Apart from other main general Insurance there are several others General polices and more are going to introduce, such as: • Bhagyashree Child Welfare Policy-covers girl child in the age group of 0 to 18 years. • Raj Rajeshwari Mahila Kalyan Vojans. • Crop Insurance Scheme. • Jald Rahat Yojana.

SWOT Analysis of Insurance Sector
Strengths:
 Consumer Grievance Redressal The Insurers have to face the redressal of the consumers, grievances for deficiency in products and services. The Insurance Regulatory Development Authority (IRDA), the regulatory body has already appointed Ombudsman for looking into the grievances of the policyholders. His judgment will be binding on the insurers. Further under Consumer Protection Act, 1986, the consumer courts are operating at the district, state and national levels. This is a major strength from the consumer point of view as they could easily fight for their rights.  Rural customers are a must As per the regulator IRDA, all the companies incorporated should at least do 5% of its business in the rural parts of the country. If not, the regulator would not allow the

company to function anywhere within the country. So this is a great advantage for not only the rural population but also the newly formed companies since most of the revenue could be earned from the rural India.  Channels Insurance companies are getting savvy. Enhanced marketing thus is crucial. Already, many companies have full operation capabilities over a 12-hour period. Facilities such as customer service center are already into 24-hour mode. These will provide services such as motor vehicle recovery. Technology also plays an important role in the market.

Weakness:
 New insurers The new insurers will have to invest a minimum capital of Rs. 100 crores. The normal gestation period is of 5 years. The generation of profit normally starts in the sixth year. Hence the new insurers have to lock up their capital for at least 5 years.  Outdated products Today, LIC has more than 60 products and GIC has more than 180 products to offer in the market. But most of them are outdated, as they are not suitable to the needs of the consumers. Hence old as well as new insurers have to offer innovative products to the consumers and bringing more products would require good amount of capital investment.

Opportunities:
 Vast country

India is a vast country with more than 5, 76,000 villages having a population of at least 500-600 per village. The companies could recognize the fact that if it takes the whole zilla as one, it would consist a population more than 5000-10000. One zilla could give them a good amount of business. The company could have this opportunity and tap it and reap revenues.  Job opportunities Since the sector has opened up, many new companies have already started its operation and few are just about to begin, Major areas of employment in this sector are the agents. A company can appoint any number of agents anywhere within the country on commission basis. Moreover, the professional staff and the peons and clerks’ appointment also increase. Thus this sector has tremendous scope on employment.

Threats:
 Lack of awareness Very soon the market will be flooded by a large number of products by a fairly large number of insurers operating in the Indian market. Even with limited range of products offered by LIC and GIC, there is chaos as far as the consumers are concerned. Their confusion will further increase in the face of a large number of products in the market. The existing level of awareness of the consumers for insurance products is very low. This is because only 62% of the population of India is literate and only 10% are well educated. Even the educated consumers are ignorant about the various products of insurance. With new companies coming in the market, the products would be comparatively more, which would again create confusion in the minds of the customers so as to which policy best suits the needs.

Insurance Regulatory And Development Authority Act, 1999 (IRDA)
Indian parliament passed IRDA in the year 1999. It is headed by the chairmen. It was setup on interim IRDA for monitoring &controlling of the insurance business. IRDA was sole authority responsible for awarding of licenses. There is no restriction for new licenses & no composite licenses for life & non life business. IRDA has some restriction for new licenses such like new player should commence its business within 15-18 month. Shares are not allowed to transfer without approval. This Act was passed by Parliament in December 1999 and it received presidential assent in January 2000. This Act provides for the establishment of the Authority to protect the interest of holders of insurance policies, to regulate, promote and ensure orderly growth of insurance industry and for matters connected therewith or incidental thereto. It amended the Insurance Act, 1938, which has been noted above. It also amended the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalization) Act, 1972, thus opening up the insurance sector to private participation. Under this Act, an authority called IRDA has been established. This is a corporate body established for the purpose and objects as set out in the explanation to the title. The “Authority" replaces "Controller" under Insurance Act 1938. The first schedule amends Insurance Act 1938. It states that if "Authority" is superseded by the Central Government, the "Controller of Insurance" may be appointed till such time as “Authority" is reconstituted. In line with the economic reforms that were ushered in India in early nineties, the Government set up a Committee on Reforms (popularly called the Malhotra Committee) in April 1993 to suggest reforms in the insurance sector. The Committee recommended throwing open the sector to private players to usher in competition and bring more choice

to the consumer. The objective was to improve the penetration of insurance as a percentage of GDP, which remains low in India even compared to some developing countries in Asia. Reforms were initiated with the passage of Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority, which has put in place regulations in line with global norms. So far in the private sector, 12 life insurance companies and 9 general insurance companies have been registered.

Bottlenecks Government Regulations
• The IRDA bill proposes tough solvency margins for private insurance firms, a 26% cap on foreign equity and a minimum capital of Rs 100crores for life and general insurance and Rs 200crores for reinsurance firms section 27A of insurance Act stipulates that LIC is required to invest 75% of its accretions through a controlled fund in mandated government securities LIC may invest the remaining 25% in private corporate sector, construction and acquisition of immovable assets besides sanctioning of loans to policy holder. • These stipulations imposed on the insurance companies had resulted in lack of

flexibility in the optimization of risk and profit portfolio. If this inflexibility continues the insurance companies will have very little leverage to earn more on their investments and they might not be able to offer as flexible products as offered abroad. • The government might provide more autonomy to ;insurance companies by allowing them to invest 50% of their funds as per their own discretions. • Recently RBI has issued stiff guidelines which had death a severe blow to the

plans of banks and financial institutions to enter the insurance sector. It says that

non performing assets ( NPA) levels of the prospective l players will have to be 1% point lower than the industry average (presently 7.5%). • RBI has also stipulated that all prospective entrants need to have a net worth of Rs 500crores. These guidelines have made it virtually impossible for many banks to get into the insurance business. Also banks and FI who are planning to enter the business cannot float subsidiaries for insurance. • RBI has taken too much caution to make sure that the news sector does not experience the kind of ups and downs that the non bank financial sector has experienced in the recent past. They had to rethink about India strong banks and these guidelines if business. financial institutions have to enter the new

The insurance employees union is offering stiff resistance to any private entry.

Company Profile
PROFILE OF ICICI Prudential Life Insurance Company

Fact sheet

The Company ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse, and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential Life's capital stands at Rs. 42.72 billion (as of June 30, 2008) with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. For the quarter ended June 30, 2008, the company garnered Retail Weighted New Business Premium of Rs. 1,174 crores as against Rs 810 crores for the quarter ended June 30, 2007, thereby posting a growth of 45% and has underwritten over 6 lakh policies over this period. The company has assets held over Rs. 30,600 crore as on August 31, 2008. ICICI Prudential Life is also the only private life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating, and is a clear assurance of ICICI Prudential's ability to meet its obligations to customers at the time of maturity or claims.

For the past seven years, ICICI Prudential Life has retained its leadership position in the life insurance industry with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

Distribution
ICICI Prudential Life has one of the largest distribution networks amongst private life insurers in India. It has a strong presence across India with over 2000 branches (includung 1,095 micro-offices) and an advisor base of over 261,000 (as on August 31, 2008). The company has 24 bancassurance partners having tie-ups with ICICI Bank, Bank of India, South Indian Bank, Shamrao Vitthal Co-Op Bank, Jalgaon Peoples Co-op Bank, Ernakulam District Co-op Bank, Idukki District Co-op Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur Gramin Bank, Wainganga Kshetriya Gramin Bank, Aryawart Gramin Bank, Jharkhand Gramin Bank, Narmada Malwa Gramin Bank, Baitarani Gramya Bank, Ratnagiri District Central Co-op Bank, Seva Vikas Co-op Bank, Sangli Urban Co-Operative Bank, Baramati Co-operative Bank, Ballia Kshetriya Co-Operative Bank, The Haryana State Co-Operative Bank, Renuka Nagrik Sahakari Bank, Amanath Co-Operative Bank, Arvind Sahakari Bank, Bhandara Urban Co Operative Bank

Promoters
ICICI Bank ICICI Bank Limited (NYSE:IBN) is India's largest private sector bank and the second largest bank in the country, with consolidated total assets of $121 billion as of September 30 , 2008. ICICI Bank’s subsidiaries include India’s leading private sector insurance

companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Bank’s presence currently spans 19 countries, including India. Prudential Plc Established in London in 1848, Prudential plc, through its businesses in the UK, Europe, US, Asia and the Middle East, provides retail financial services products and services to more than 21 million customers, policyholder and unit holders and manages over £256 billion of funds worldwide (as of June 30, 2008). In Asia, Prudential is the leading Europe-based life insurer with life operations in China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the largest asset management companies in terms of overall assets sourced in Asia ex-japan, with £34.3 billion funds under management (as of June 30, 2008) and operations in ten markets including China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates

Management Team

The ICICI Prudential Life Insurance Company Limited Management team comprises reputed people from the finance industry both from India and abroad. Ms. Shikha Sharma , Managing Director & CEO Mr. N. S. Kannan , Executive Director Mr. Bhargav Dasgupta , Executive Director Ms. Anita Pai , Executive Vice President – Customer Service & Technology Dr. Avijit Chatterjee , Appointed Actuary Mr. Puneet Nanda , Executive Vice President & Chief Investment Officer

Board of Director

The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Mr. K.V. Kamath, Chairman Ms. Chanda Kochhar, Director Mr. Barry Stowe, Director Mr. Adrian O’Connor, Director Prof. Marti G. Subrahmanyam, Director Mr. Mahesh Prasad Modi, Director Ms. Rama Bijapurkar, Director Mr. Keki Dadiseth, Director Ms. Shikha Sharma, Managing Director Mr. N.S. Kannan, Executive Director Mr. Bhargav Dasgupta, Executive Director

ICICI Prudential Market Share Rises To 43% New Delhi, January 17: : ICICI Prudential Life Insurance hiked its market share to 42.72 per cent in the October-November period last year, up from 37.92 per cent in first quarter and 38.85 per cent in the second quarter of the current fiscal. Its total share of the Rs 439.2-crore premium collected by private players during the April-November period stood at 39.66 per cent. Its aggregate estimated premium income amounted to Rs 174.2 crore as at the end of November. According to ICICI officials, while the premium mop-up by private companies in April-June 2002 was about Rs 117 crore, the corresponding figures for the July-September and October-November periods were Rs 201.3 crore and Rs 120.8 crore. Out of this, ICICI’s premium income stood at Rs 44.4 crore, Rs 78.2 crore and Rs 51.6 crore, respectively. They cited Irda statistics saying the total premium income of the life sector was Rs 1,191 crore in April-June, 2002, and Rs 3,512.8 crore uptil September.

Performance Summary

Performance Summary as on October 31, 2008

Scheme Preserver * Protector @ Balancer # Maximiser $ Pension Preserver * Pension Protector @ Pension Balancer # Pension Maximiser $ InvestShield Cash @ InvestShield Life ^ InvestShield Pension ^ New Invest Shield # Flexi Growth ** Pension Flexi Growth ** Flexi Balance ^^ Pension Flexi Balance ^^

Annualised Returns (3 years) 8.22% 5.72% 8.20% 9.86% 8.20% 6.01% 8.41% 9.84% 6.70% 8.70% 8.50% NA NA NA NA NA

Annualised Returns (Since Inception) 7.19% 7.60% 13.40% 21.27% 7.08% 6.58% 13.48% 22.97% 6.26% 8.53% 8.59% 4.91% -11.40% -13.68% -5.27% -2.24%

Inception Date 17May04 16-Nov01 16-Nov01 16-Nov01 17May04 31May02 31May02 31May02 03-Jan-05 03-Jan-05 03-Jan-05 21-Aug06 20-Mar07 20-Mar07 20-Mar07 20-Mar07

Performance v/s Benchmark

Market Overview

Key Market Levels (as on October 31, 2008)
Key Rates Current One Quarter Ago One year Ago

WPI Inflation Ten Year Government Security (semi annual) 5 year AAA rated Corporate Bond (annualised) $-Re exchange rate

10.68% 7.50% 11.60% 49.46

11.98% 9.32% 10.90% 42.57

3.07% 7.84% 9.20% 39.32

BSE 100

4953.9 8

7488.48

10391.19

Awards & Recognitions

ICICI Prudential Life won the UK Trade & Investment India Business Awards 2008 in the Business Partnership Award-Large Company category

India's Most Customer Responsive Insurance Company . Avaya Global Connect Economic Times. Customer Responsiveness Awards, 2007

Best Life Insurer 2003. Outlook Money Awards 2003 & 2004

Vision & Values
Our vision: To be the dominant Life, Health and Pensions player built on trust by world-class people and service. This we hope to achieve by:
• • • • •

Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work.

We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth. Our values : Every member of the ICICI Prudential team is committed to 5 core values: Integrity, Customer First, Boundaryless, Ownership, and Passion. These values shine forth in all we do, and have become the keystones of our success.

Products
ICICI Prudential has a wide array of insurance plans that have been designed with the philosophy that different individuals are bound to have differing insurance needs. The ideal insurance plan is one that addresses the exact insurance needs of the individual that will depend on the age and life stage of the individual apart from a host of other factors.

Life Insurance India, Health Insurance, Retirement Solutions
Brochures

Cancer Care Cancer Care Plus CashBak Crisis Cover Diabetes Care Diabetes Assure DiabetesCare Active ForeverLife HealthAssure Plus Hospital Care

Immediate Annuity InvestShield CashBak InvestShield Life New LifeGuard LifeLink Super Pension LifeLink Super LifeStage RP LifeStage Assure LifeTime Gold LifeTime Plus LifeStage Pension LifeTime Super Pension MediAssure PremierLife Gold PremierLife Pension Pure Protect SmartKid New ULRP SmartKid New ULSP SmartKid RP Save'N'Protect

Life Insurance Plans Life insurance products assure your family will receive financial support, even in your absence. Put simply, when you buy insurance you provide your family with a sum of money, should something happen to you. It thus permanently protects your family from financial crises. In addition to serving as a protective cover, when you buy insurance you create a flexible money-saving scheme, which empowers you to accumulate wealth to buy a new car, get your children educational solutions, and even retire comfortably. Today, there is no shortage of investment options for a person to choose from. Given the plethora of choices, it becomes imperative to make the right choice when investing your

hard-earned money, and online insurance is an ideal choice in today’s technology driven world. Buying Life insurance online is a way to make a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets. From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, buying life insurance online gets you the unique reassurance of asset protection, along with a strong element of asset appreciation. When you buy life insurance online the core benefit is that the financial interests of one’s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, buying life insurance online gives a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and online insurance products occupy a unique space in the landscape of investment options available to a customer. As your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage. Online insurance products are the only investment option that offer specific products tailor-made for different life stages. You are thus ensured that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met. On the basis of which life stage you are in and the corresponding insurance needs, ICICI Prudential plans can be categorized into the following four types:
• • • •

Education Insurance Plans Wealth Creation Plans Premium Guarantee plans Protection Plans

HEALTH INSURANCE

Health insurance policies insure you against several illnesses and guarantee you stay financially secure should you ever require treatment. They safeguard your peace of mind, eliminate all worries about treatment expenses, and allow you to focus your energy on more important things, like getting better. Let's learn more about the various types of health insurance available, and what the best policy for you might be. Health Insurance policies in India - An Overview There are several health insurance or medical insurance plans in India. These can be divided into the following categories based on the coverage offered: Hospitalization Plans: These health insurance plans cover your expenses in case you need to be hospitalized. Within this category, products may have different payout structures and limits for various heads of expenditure. The hospitalisation coverage may be reimbursement based plans or fixed benefit plans. These plans aim to cover the more frequent medical expenses. Click to know about our hospitalisation insurance plan (Hospital Care) Critical Illness Plans: These health insurance plans provide you coverage against critical illnesses such as heart attack, organ transplants, stroke, and kidney failure among others. These plans aim to cover infrequent and higher ticket size medical expenses. Click to know about our critical illness plans (Crisis Cover, Health Assure Plus)

Specific Conditions Coverage: These plans are designed specifically to offer health insurance against certain complications due to diabetes or cancer. They may also include features such as disease management programs which are specific to the condition covered. Click to know more about our diabetes (Diabetes Care, Diabetes Care Plus, Diabetes Assure) and cancer (Cancer Care, Cancer Care Plus) suite of products. Health Solutions


Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance, irrespective of the actual medical expenses. Health Assure Plus offers the added advantage of an equivalent life insurance cover.



Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as well as at different stages in the treatment of various cancer conditions. Cancer Care Plus: is a wellness plan that includes all the benefits of Cancer Care and also provides an additional benefit of free periodical cancer screenings. Diabetes Care: Diabetes Care is a unique critical illness product specially developed for individuals with Type 2 diabetes and pre-diabetes. It makes payments on diagnosis on any of 6 diabetes related critical illnesses, and also offers a coordinated care approach to managing the condition. Diabetes Care Plus also offers life cover.







Diabetes Care Plus: is a unique insurance policy that provides an additional benefit of life cover for Type 2 diabetics and pre-diabetics Hospital Care: is a fixed benefit plan covering various stages of treatment hospitalisation, ICU, procedures & recuperating allowance. It covers a range of medical conditions (900 surgeries) and has a long term guaranteed coverage upto 20 years.





Crisis Cover : is a 360-degree product that will provide long-term coverage against 35 critical illnesses, total and permanent disability, and death. MediAssure is a health insurance policy that provides assured insurability till age 75 years, assured coverage for accepted pre-existing illnesses after 2 years and an assured price for 3 years.



Education Insurance Plans
One of your most important responsibilities as a parent is to ensure that your child gets the best possible education that can be provided. ICICI Prudential offers a wide portfolio of education insurance plans that are designed to provide peace of mind to you, as a parent, that your child's education will be secure. These plans ensure that money is made available at the crucial junctures in a child's education - Class X, Class XII, graduation and post-graduation - to fund crucial commitments for the child's future. Importantly, education insurance plans ensure that in the unfortunate event of the death of a parent, the child's education continues unhampered. Under the education insurance plans platform, ICICI Prudential brings the following products to you. Please click on the product name to know more about the plans.

Plan Name SmartKid New Unit-linked Regular Premium SmartKid Single Premium SmartKid Regular Premium

Plan Type Unit Linked Unit Linked NewUnit-linked Unit Linked Traditional

Savings & Wealth Creation Solutions


Save'n'Protect is a traditional endowment savings plan that offers life protection along with adequate returns. CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child's marriage, expenses for a child's higher education or purchase of an asset. It is available for terms of 15 and 20 years.





LifeTime Gold is a unit-linked plan that offers customers the flexibility and control to customize the policy to meet the changing needs at different life stages. It offers 7 fund options - Preserver, Protector, Balancer, Flexi Balanced Multiplier, R.I.C.H and Flexi Growth.



LifeStage RP is unit linked plan that provides you with an option of lifecyclebased portfolio strategy that continuously re-distributes your money across various asset classes based on your life stage. This will help you achieve the right Asset Allocation to meet your desired financial goals.



LifeLink Super is a single premium unit linked insurance plan which combines life insurance cover with the opportunity to stay invested in the stock market. Premier Life Gold is a limited premium paying plan specially structured for long-term wealth creation. InvestShield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation.







InvestShield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options. LifeStage Assure a unit linked insurance plan that provide upto 450 % of first year premium guarantee on maturity, with the additional advantage of a lifecycle based portfolio strategy that allocates the investor’s money across various asset classes based on his life stage and risk appetite.



Retirement Solutions



ForeverLife is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually. LifeTime Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers 5 annuity options (life annuity, life annuity with return of purchase price, joint life last survivor annuity with return of purchase price, life annuity guaranteed for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity without return of purchase price) at the time of retirement.





LifeStage Pension is a regular premium unit linked pension plan that provides you with a unique lifecycle-based strategy that continuously re-distributes your money across various asset classes based on your life stage, eventually providing you with a customized retirement solution.

• •

LifeLink Super Pension is a single premium unit linked pension plan. Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. It offers the benefit of 5 payout options. PremierLife Pension is a unique and convenient retirement solution with a limited premium paying term of three or five years, to suit professionals and businessmen, especially those who require more flexibility and customization while planning their finances.



Premium Guarantee Plans
The latest addition to the life insurance product portfolio of ICICI Prudential is the Premium Guarantee plan - InvestShield Life New. Premium Guarantee plans are the ideal insurance-cum-investment option for customers who want to enjoy the potentially higher returns of a market linked instrument, but without taking any market risk.

Under the Premium Guarantee Plans platform, ICICI Prudential brings to you the following products: Plan Name InvestShield Life New InvestShield CashBak Protection Solutions


Plan Type Unit Linked Unit Linked

LifeGuard is a protection plan, which offers life cover at low cost. It is available in 3 options - level term assurance, level term assurance with return of premium & single premium.



HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner.

Group Insurance Plans
One Sure Shot Way For An Employer To Retain His Team. Employees these days are constantly on the prowl for "better opportunities". How then do you get them to focus on your job and stay committed for long tenures? Human Resource experts agree that employees work with utmost dedication when they believe their organization truly cares about their wellbeing. One way of showing your concern for your employees is to shoulder the two responsibilities they worry about most: Security of and Savings for their families. Group Insurance Plans from ICICI Prudential enable you to effortlessly provide your employees with both, savings and security, so they can pass on the benefits to their loved ones.

Your kind gesture to safeguard their family's future will undoubtedly serve as great encouragement for your employees, and they will gladly offer you their whole-hearted commitment. Top 3 Reasons Why You Should Invest In ICICI Prudential's Group Insurance Plans With ICICI Prudential's Group Insurance Plans your employees get: Incomparable financial benefits that guarantee their safety and financial stability. Sound financial planning that empowers them to meet their changing financial objectives. Quality service initiatives and transparency across all operations. Group Insurance Solutions ICICI Prudential Life also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. • Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner and also avail of tax benefits as applicable to approved gratuity funds. • Group Superannuation Plan: ICICI Prudential Life offers a flexible market linked scheme that provides substantial benefits to both employers and employees. Both defined contribution (DC) and defined benefit (DB) schemes are offered to optimise returns for members of the trust and rationalise cost. Members have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. • Group Immediate Annuities: ICICI Prudential Life realises the importance of prudent retirement planning. With this in mind, we have developed a suite of annuity products that not only give you an income for life but also provide you options to match your needs. In addition to the annuities offered to existing superannuation customers, we offer immediate annuities to superannuation funds not managed by us.

• Group Term Plan: ICICI Prudential Life's flexible group term solution helps provide an affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death. Flexible Rider Options ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a marginal cost, depending on the specific needs of the customer.

1. Accident & disability benefit: If death occurs as the result of an accident during the term of the policy, the beneficiary receives an additional amount equal to the rider sum assured under the policy. If an accident results in total and permanent disability, 10% of rider sum assured will be paid each year, from the end of the 1st year after the disability date for the remainder of the base policy term or 10 years, whichever is lesser. If the death occurs while travelling in an authorized mass transport vehicle, the beneficiary will be entitled to twice the sum assured as additional benefit. 2. Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. Benefits are payable to the insured for medical expenses prior to death. 3. Waiver of Premium: In case of total and permanent disability due to an accident, the future premiums continue to be paid by the company till the time of maturity. This rider is available with SmartKid, LifeTime Plus, LifeTime Super and LifeTime Super Pension. 4. Income benefit rider: In case of death of the life assured during the term of the policy, 10% of the sum assured is paid annually to the nominee on each policy anniversary till the maturity of the rider.

Types of Insurance Plans - Traditional or Unit Linked (ULIP: Unit Linked Insurance Plan)

Insurance Plans - At a glance Broadly, insurance plans can be distinctly divided into ULIP (Unit Linked Insurance Plans) and traditional plans. A brief detail of both segments: ULIPs (Unit Linked Insurance Plans) ULIPs, or Unit Linked Insurance Plans, have gained high acceptance due to the attractive features they offer. Benefits include flexibility, Transparency, Liquidity, and Fund Options. Flexibility A ULIP offers the customer an acute degree of flexibility: the flexibility to choose the Sum Assured, and to choose the desired premium amount. ULIPs give the customer the option of changing the level of Premium/Sum Assured even after the plan has started, and the flexibility to change asset allocation by switching between funds with ease. Transparency ULIPS offer a high degree of transparency, where all charges in the plan as well as the entire net amount invested is made known to the customer. ULIPs also offer the convenience of tracking your investment performance on a day to day basis, so you can decide instantly where you want your assets allocated. Liquidity

A ULIP offers you the option of withdrawing money a few years into the plan, allowing for the exigencies of life. Alternatively, a ULIP will also allow for partial/systematic withdrawal should the need arise. Fund Options A ULIP will offer you a wide choice of funds, ranging through equity, debt, cash, or a combination of the three. The customer is also afforded the option of choosing your fund mix based on your desired asset allocation. Traditional Plans These are the oldest types of insurance plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are:

1. Steady Investment 1. Major chunk of investible funds are in debt instruments. 2. Steady and almost assured returns over the long term. 2. Features 1. Death benefit is Sum Assured + guaranteed & vested bonus. 2. Helps in asset creation as they are for a long tenure. 3. Premium to Sum Assured ratios are fixed for each plan and age. 4. Generally withdrawals are not allowed before maturity.

Section 80CCC
DEDUCTION IN RESPECT OF CONTRIBUTION TO CERTAIN PENSION FUNDS.

(1) any

Where an assessee being an individual has in the previous year paid or deposited amount out of his income chargeable to tax to effect or keep in force a contract for

any annuity plan of Life Insurance Corporation of India for receiving pension from the fund referred to in clause (23AAB) of section 10, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessee's account, if any) as does not exceed the amount of ten thousand rupees in the previous year.

(2)

Where any amount standing to the credit of the assessee in a fund, referred to in

sub-section (1) in respect of which a deduction has been allowed under sub-section (1), together with the interest or bonus accrued or credited to the assessee's account, if any, is received by the assessee or his nominee(a) On account of the surrender of the annuity plan whether in whole or in part, in any previous year, or (b) As pension received from the annuity plan, an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received, and shall accordingly be chargeable to tax as income of that previous year.

(3)

Where any amount paid or deposited by the assessee has been taken into

account for the purposes of this section, a rebate with reference to such amount shall not be allowed under section 88.

Section 80D

80D. Deduction in respect of medical insurance premia. (1) In computing the total income of an assessee, there shall be deducted at the following

rates, such sum as is specified in sub-section (2) and paid by him by cheque in the previous year out of his income chargeable to tax, namely:(i) in a case where such sum does not exceed in the aggregate ten thousand rupees, the whole of such sum; and (ii) in any other case, ten thousand rupees. Provided that where the sum specified in sub-section (2) is paid to effect or to keep in force an insurance on the health of the assesses, or his wife or her husband or dependent parents or any member of the family in case the assessee is a Hindu undivided family, and who is a senior citizen, the provisions of this section shall have effect as it for the words "ten thousand rupees", the words "fifteen thousand rupees" had been substituted; (2) The sum referred to in sub-section (1) shall be the following, namely:(a) where the assessee is an individual, any sum paid to effect or to keep in force an insurance on the health of the assessee or on the health of the wife or husband, dependent parents or dependent children of the assessee; (b) where the assessee is a Hindu undivided family, any sum paid to effect or to keep in force an insurance on the health of any member of the family: (3) by(a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or Provided that such insurance shall be in accordance with a scheme framed in this behalf

(b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999). Explanation.-For the purpose of this section, "senior citizen" shall have the meaning assigned to it in the Explanation to section 80DDB.

Section 80C

Up to a limit of Rs 1 lakh, the money that you invest in these products is deductible which means that you don't have to pay income tax on it. Thus if you are in the 30 per cent tax bracket and you invest the maximum allowed you save Rs 30,000 in taxes. There are a wide range of investments you can make to claim the Section 80C benefit. To keep things simple we will focus on two categories: Small savings schemes and ELSS (equity linked savings schemes). Other 80C products include your provident fund, the repayment of principal on your home loan and your life insurance premium. Small savings schemes These include the public provident fund (PPF) and National Savings Certificate (NSC). They offer a return of around 8 to 8.5 per cent which is quite low compared to typical returns in equity products. Furthermore, there is a relatively long lock-in period, 15 years for the PPF and 6 years for the NSC. Their main advantage is that they offer a guaranteed return unlike equitybased products. Equity linked savings schemes These are basically mutual funds which are specially created to provide tax benefits. As with regular mutual funds there is no guaranteed return and you can lose money in a period of falling

stock prices as has happened in the first half of 2008. However, ELSS usually provides a higher return than small savings schemes and also a lower lock-in period of three years. Examples of ELSS include Franklin India Taxshield and HDFC Taxsaver. As with regular mutual funds, these schemes pursue a range of investment strategies: For instance, some may focus on large cap stocks while others may focus on small and mid cap stocks. It makes sense to invest in more than one scheme to diversify some of your risk.

Making a choice How do you decide to allocate your Rs 1 lakh 80C limit? This will depend on your other financial decisions; for example whether you have taken a home loan or purchased life insurance. As to the decision between small savings schemes and ELSS two of the most important factors are your attitude to risk and inflation. As recent months have shown so clearly, stock markets are a lot riskier than small savings schemes. However, the flip side is that riskier investments like stocks offer a higher rate of return particularly over the long run. From the perspective of a young investor who may not need most of her/his investment money till retirement it probably makes sense to tilt towards riskier assets. The other important consideration when evaluating returns is to adjust for inflation. In other words, if your investment generates a return of 8 per cent and inflation is 7 per cent, then your inflation-adjusted return is only one per cent. When inflation moves into double digits you are actually making a negative inflation-adjusted return, as is happening currently. This is a fundamental problem with any investment product that offers a fixed return at a time of high and rising inflation. By contrast stocks are a better hedge against inflation especially in the long run. Though inflation increases the costs of firms it also allows them to charge a higher price to their customers thereby protecting profits to some extent. This in turn means that stock prices and equity-based products

can offer better protection from inflation over a number of years though not necessarily in the short run. What about the element of timing when it comes to equity schemes? For instance, stocks have clearly taken a pounding in the last six months. However this doesn't necessarily mean it's a bad time to invest in stocks; valuations in some companies look quite attractive now and over a threeyear horizon you could see decent returns. From the point of view of the average investor it's probably best to take timing out of the picture by following a systematic investment plan which means you invest a fixed amount every month. Small savings schemes and ELSS each have their advantages and disadvantages. Based on your investment strategy and particularly your attitude towards risk you have to choose how much to invest in them as part of your Section 80C investments.

Explanation of Tax Benefits
Premiums paid for Life insurance - Deduction under Section 80C 1. Category of assesses allowed deduction: Individual assessee and Hindu Undivided Family assessee. 2. Eligible Savings: Premiums paid or deposited by assessee to effect or to keep in force insurance on the life of following persons:
o

In case of individual assessee – Himself/Herself, spouse, children of such individual In case of HUF assessee – any member

o

3. 20% limit: If the amount of premium paid in a financial year for a policy is in excess of 20% of the actual capital sum assured, then deduction will be allowed only for premiums upto 20% of the sum assured. 4. Limit on amount of deduction: Deduction will be restricted to investments upto Rs 100,000 in savings specified under Section 80C (including life insurance

premiums). If any investments have been made under Section 80CCC and 80CCD, then the qualifying amount under Section 80C will stand reduced to that extent. Premiums paid for Pension plans - Section 80CCC 1. Permitted Deduction: Section 80CCC allows for deduction of premiums paid under a pension plan. As per this Section, premiums paid upto Rs 10,000 (till FY 2005-06) & Rs. 1 Lakh (from FY 2006-07) by an individual is allowed as deduction from his total income. 2. Disallowance: This benefit will be reversed if the policy lapses / is cancelled. 3. Limit: It may be noted that from FY2005-06, the limit of deduction under Section 80CCC will be part of the overall limit prescribed under Section 80CCE. 4. Receipt under Policy: Amounts received on surrender (whole/part) of annuity plan, amounts received as Pension is taxed as income. Premiums paid for medical insurance - Section 80D 1. Category of assesses allowed deduction: Individual assessee and Hindu Undivided Family assessee. 2. Eligible premiums: Premiums paid by assessee by any mode other than cash out of his taxable income to effect or to keep in force an insurance on the health of following persons:
o

In case of individual assessee – Himself/Herself, spouse, dependant children and parents. The condition of dependency of parent has been removed from FY 2008-09. In other words, even if the parent is independent, the individual can pay the premia and claim the deduction. In case of HUF assessee – any member of HUF

o

3. Deduction and upper limit: The qualifying amounts under Section 80D for self, spouse and dependent children is upto Rs. 15,000/- and additional deduction upto Rs. 15,000/- for the parents (from FY 2008-09 onwards). However, a higher amount of upto Rs 20,000/- is permitted if the person, for whose health insurance

the premium was paid, was aged 65 years or more at any time during the financial year in which the premium was paid. Such amounts of premium paid would be allowed as deduction from the total income of the assessee. Overall deduction limit - Section 80CCE A new Section 80CCE has been inserted from FY2005-06. As per this section, the maximum amount of deduction that an assessee can claim under Sections 80C, 80CCC and 80CCD will be limited to Rs 100,000. Benefits under insurance policy - Section 10(10D) As per Section 10(10D) of Income tax Act, 1961, any sum received under a life insurance policy, including the sum allocated by way of bonus on such policy is exempt from tax. However, this rule does not apply to following amounts:
• • •

sum received under Section 80DD(3), or any sum received under a Keyman Insurance Policy, or any sum received other than as death benefit under an insurance policy which has been issued on or after April 1 2003 and if the premium paid in any of the years during the term of the policy is more than 20% of the sum assured.

Tax Rates for Individuals The rates of income-tax for FY 2008-09

Total Income (Rs.) Upto Rs 150,000/Above Rs 150,000/- to 180,000/Above Rs 180,000/- to 225,000/-

Senior Citizen Nil Nil Nil

Rate of Tax Women below 65 years Nil Nil 10%

Others Nil 10% 10%

Above Rs 225,000 to Rs 300,000 Above Rs 300,000 to Rs 500,000 Above Rs 500,000/-

10% 20% 30%

10% 20% 30%

10% 20% 30%

Surcharge on Income Tax: In case where the Total Income exceeds Rs 10,00,000, there would be a surcharge @ 10%.Marginal relief is available to assessee whose income just exceeds Rs. 10,00,000. Education Cess on Income Tax Edcuation Cess @2% will be payable on the amount of income tax (including surcharge). Secondary & Higher Education Cess on Income Tax Additional Education Cess @1% will be payable on the amount of Income tax (Including surcharge).

Waiver of Premium Rider (WOP)
On total and permanent disability due to an accident, all future premiums for both the base policy and rider(s) will be waived till the end of the term of the rider or death of the life assured, if earlier. Waiver of Premium rider is available with LifeTime Super,LifeTime Plus,LifeTime Super Pension, Smart Kid New ULRP, Life Guard ROP, Life Guard WROP. Premiums paid under this rider are eligible for tax benefits under Section 80C.

Tools Overview
Asset Allocator
Are you an aggressive investor who wants to ride the equity markets? Or are you more conservative, comfortable investing in assured return products? Go through our Risk Analyzer to find out what your asset allocation should be, keeping in mind your risk capacity and your risk behavior.

Inflation Erosion index
Inflation can easily erode the corpus that we set aside for our post-retirement needs. This erosion happens due to the fact that our corpus might not earn an interest that keeps pace with rising costs. To find out how inflation will impact your expenses in the future, use our inflation index calculator to find out how your current expenses will grow in the future. You need to enter your current expense figures in the Inflation Index Calculator, your expected rate of inflation, and the no. of years in the future you will incur the expense.

Power of Compounding
The most powerful boost your money can get is time. Invested properly over a long period of time, money can grow to many times its original amount - the longer the tenure of investment, the greater will be the corpus amount.

The name of the game is to invest early and to invest regularly. To further gain an understanding of this concept, try doing your own experiments with our Simple Compounding Calculator.

Human Life Value Calculator
Investment in insurance is an essential requirement for one's financial planning to be complete. However, the quantum of insurance that one needs is a function of one's income, assets, liabilities and future goals. Use the Life Value Calculator to find out how much insurance cover is needed by you.

Life Stage Profiler
The 'Wheel of Fortune' is an interactive game developed by ICICI Prudential to help you chose the ideal insurance solution. Based on your responses to certain key questions, we will recommend a suite of products that will address your financial and insurance needs.

Procedure to obtain life insurance
 Filling up the proposal form The first step in the process is to fill up the proposal form where in various kinds of details the proposer furnishes. The form can be obtained from the LIC office or will be available with insurance agent. The following details are furnished in the proposal form: 1) Name, address, nationality, occupation, nature of duties, name; and address of the present employer, length of service, name and address of previous employer, if any,

length of previous service, etc. 2) Place of birth, date of birth, district, state, proof of age, etc. 3) Sum insured, period of premium payable (monthly, quarterly, half-yearly or yearly), amount of first premium payable. 4) Objectives of insuring. 5) Name, age, and relationship of nominee, full address, height and weight. 6) Family history of parents, sisters and brothers. 7) Hereditary disease like diabetes, insanity, epilepsy, gout, asthma, tuberculosis, cancer, leprosy, etc. 8) Any other disease, accident, operation, etc. 9) In the case of female adult proposer—further information regarding pregnancy, maternity and disturbances indicative of trouble with the female generative organs. The female proposer have to furnish further information relating to educational qualification, average monthly income, source of income, marital status, husband's name, his income, occupation, and his insurance policy, etc. Declaration by the proponent At the end, the proponent has to make a declaration that the statements given in the proposal are correct to the best of his knowledge and no information is concealed. The proposal is the basis of insurance contract when it is presented to the LIC. Attachment of proof of age Age proof is identified from the secondary school leaving certificate. Attested copy of this certificate is attached with the proposal form for this purpose. Age proof is also required to ascertain whether the proposer is a major or a minor. Moreover, age proof is also needed for determining the premium rate. Presentation of proposal to the agent The agent, on receipt of the proposal check it thoroughly whether any important

information is left out without furnishing-. If anything is left out. he will get the same furnished by the proposer. In practice, it is noticed that the agent carries the proposal form and approaches the prospective proposer and get the same furnished with his help.

Medical examination The insurance agent arranges for the medical examination of the proposer. Medical examination is conducted by the authorized medical practioner appointed by the LIC. The doctor records his remarks in the proposal form at the place provided for this purpose. In the following cases/ medical examination is not needed: 1) Where the age of the male proposer is below 30 years, educated and remained in employment for at least one year. Its sum assured is below Rs 40/000/-. 2) Where the proposer is a commissioned officer in Army service and below 45 years of age. His health is in 'A' category and sum assured is below Rs. 50.000/-. 3) Where the proposer is a woman leading a first life category and passed high school or equivalent, age is below 30 years and employed at least a period of one year. The a sum assured is below Rs 40/000/4) An adult member below the age of 40 years and the sum assured is below Rs. 15/000. 5) In the case of re-insurance of a person who has already insured. 6) Report by the Agent After the medical report, the agent gives his confidential report with regard to proposer's health condition, habits, family history source of income, etc. He gives his report after verifying information furnished by the proposer. The agent also will state his

opinion regarding acceptance or rejection of the proposal.

 Scrutiny of proposal by the branch office On completion of all the above stated process, the proposal together with the medical report and agent confidential report, etc. is submitted to the concerned branch office. The branch office then arrange for verification in respect of: 1) Name and address of the proposer 2) Date of birth 3) Occupation 4) Insured sum 5) Nominee 6) Signature of the proposes 7) Family history 8) Medical report and agent's report After the verification, if any short comings are noticed, the proposer is asked to complete the same. If the proposal is found in order, the branch office takes the further steps in the matter.  Depositing of premium The branch office issues first premium notice to the proposer. On depositing the premium money, the branch takes further steps in the matter.

Registration of proposal On depositing the premium, the proposal is registered with the LIC, in the register maintained for this purpose by recording important information about the policy; such as the name of insured, sum insured, duration of the policy, risk, etc. At the time of registration, a registration number is allotted incorporating the code number of the branch where the proposal is registered. For example, if the registration No. 345678, 678 will be the code number of the branch and 345 shall be the proposal number of that branch.  Sending the proposal to appropriate department After the registration of the proposal, it is sent to the appropriate department. In case the final authority is in the branch office, the proposal shall be sent to that officer in the branch office. Otherwise, it is sent to the divisional office. Taking final decision on the proposal On completion of all these steps, the final decision taken by the authority in the divisional office, on “Proposal Review Slip”, in view of acceptance of the propose premium paid. Issue of acceptance or request letter If the proposal is accepted, the intimation regarding acceptance of the proposal is sent to the proposer. Otherwise, a letter of regret is sent. Acceptance of the proposal is an evidence of conclusion of insurance contract. From this date the risk commences. Issue of insurance policy Having completed all the required formalities/ the corporation prepares the insurance policy and sends it to the insured. The overleaf of the policy contains all terms and conditions of the policy along with the insured's name, address, sum assured, mode

of payment of premium, etc. The policy bear the sea' of the LIC and the signature of the competent authority.

Data Analysis

Comparison of All The Life Insurance Companies on The Basis Of:

• Market Share • Premium Collected


No. Of Policies sold.

On The Basis of Market Share:
Following given is the percent share of market of various insurance companies:

Percent share of market NAME OF THE PLAYER LIC ICICI PRUDENTIAL BIRLA SUNLIFE BAJAJ ALLIANZ SBI LIFE HDFC STANDARDLIFE TATA AIG MAX NEW YORK AVIVA OM KOTAK MAHINDRA ING VYASA AMP SANMAR MARKET SHARE (%) 82.3 5.63 2.56 2.03 1.80 1.36 1.29 0.90 0.79 0.51 0.37 0.26

METLIFE

0.21

Graph Showing Percent of Market Share

90 80 70 60 50 40 30 20 10 0

LIC

ICICI PRUDENTIAL BIRLA SUNLIFE BAJAJ ALLIANZ SBI LIFE

HDFC STANDARDLIF E TATA AIG

MARKET SHARE(%)

MAX NEW YORK AVIVA

On the Basis of Premium Collected:
The life Insurance industry underwrote a premium of Rs.8,13,014.01 lakh during the month of March 2005, taking the cumulative premium underwritten during the

current year 2004-05 to Rs.25,34,287.67 lakh. The #1 private Life Insurance Company i.e. ICICI PRUDENTIAL LIFE INSURANCE contributed Rs.1, 58,408 (6.25 %) followed by Bajaj Allianz which contributed Rs.86, 001.80 lakh(3.39%).

Amount of premium collected by diff. companies
Name of the company Bajaj Allianz ING Vysya AMP Sanmar SBI Life Tata AIG HDFC Standard Life ICICI Prudential Birla Sun life AVIVA Kotak Mahindra Max New York Met Life Sahara Life Premium collected (2004-05) 86001.80 28162.46 9118.44 48293.56 30022.07 48615.08 158408.46 62128.31 19229.27 37475.21 22469.01 5603.71 167.09

Graph Showing Percent of Premium Collected

Bajaj Allianz 160000 140000 120000 100000 80000 60000 40000 20000 0 HDFC Standard Life ICICI Prudential Birla Sun life AVIVA Kotak Mahindra Max New York Premium collected (200405) Met Life Sahara Life ING Vysya AMP Sanmar SBI Life Tata AIG

On The Basis of No. of Policies Sold:

ICICI Prudential firmly holds the number one position by selling 614673 policies in the year 2004-05 followed by Tata AIG (228894 policies).

No of policies sold by diff. companies Name of the company
Bajaj Allianz ING Vysya AMP Sanmar SBI Life Tata AIG HDFC Standard Life ICICI Prudential Birla SunLife AVIVA Kotak Mahindra Max New York Met Life Sahara Life

Policies Sold in 2004-05
28819 111141 35268 129974 228894 206320 614673 198370 83209 63468 216671 46682 10214

Graph Showing No. of Polices Sold By Diff. Companies

700000

Bajaj Allianz ING Vysya

600000

AMP Sanmar SBI Life

500000 Tata AIG 400000 HDFC Standard Life ICICI Prudential Birla SunLife AVIVA Kotak Mahindra Max New York Met Life 0 Policies Sold in 2004-05 Sahara Life

300000

200000

100000

What Is Investment Plan?
Broadly, insurance plans can be distinctly divided into ULIPs (investment plan) and traditional plans. A brief detail of both segments:

Unit Linked Insurance Product
Unit linked insurance products are also called investment plans. A common objection to life insurance is that the returns are not good. Although life insurance is not an investment and the criterion of return or yield is inappropriate, the concern is real, particularly in the context of inflation. The sum assured, considered adequate today, may have a much lower value on maturity, after say 20 or 25 years. This applies to all types of savings and not only to life insurance. In the case of stocks, the return or appreciation is looked upon as compensation for such losses. The Unit Trust of India has Unit Linked Insurance Plan (1971). This plan is designed for any resident of India between the ages of 12 and 55 planning to save between Rs. 6000 and Rs. 75000, to be contributed in half-yearly or annul installments over a period of 10 or 15 years. Persons over 55 years can go in for a 10 year plan. No medical examination is necessary. A small part of the contribution is utilized for providing life cover and the balance is invested in units. In case the person dies before the end of the plan period, the legal heirs will be entitled to the units to his credit and the amount of the insurance cover. Unit-Linked policies offered by L.I.C., under the brand name Bima Plus, is a plan of this nature. It offered a choice of three funds (Secured, Balanced and Risk) with different risk profiles, depending on the different patterns of investment in equities, debts and liquid assets. The policyholder was allocated units, which were valued every week. ULIPs have gained high acceptance due to attractive features they offer. These include. 1. Flexibility 1. Flexibility to choose Sum Assured. 2. Flexibility to choose premium amount.

3. Option to change level of Premium /Sum Assured even after the plan has started. 4. Flexibility to change asset allocation by switching between funds

2. Transparency 1. Charges in the plan & net amount invested are known to the customer 2. Convenience of tracking one’s investment performance on a daily basis.

3. Liquidity 1. Option to withdraw money after few years (comfort required in case of exigency) 2. Low minimum tenure. 3. Partial / Systematic withdrawal allowed

4. Fund Options 1. A choice of funds (ranging from equity, debt, cash or a combination) 2. Option to choose your fund mix based on desired asset allocation

ULIP Mania

These plans are also called “unbundled” were very popular the years when stock market was booming. However when the reverse trend happened, the effects of loss of capital could not be avoided. The security offered by the traditional insurance plans seemed more attractive. Some plans offered a minimum guarantee (of return). But at the time of falling interest rates, the floor (guaranteed) levels could not be sustained and the insurers were compelled to replace existing plans with new ones that guarantee at lower levels. This had happened in 2002 with some of the L.I.C.’s plan. Some of them that guaranteed returns were withdrawn. According to insurance advisors and investment experts, a casual approach towards ULIPs could prove risky. “It’s an insurance product that provides a host of investment options. Most financial experts have issues with its lack of transparency, and with the huge deductions from the premium in the initial years. If you still want to go ahead, do so —but go in with your eyes wide open,” says an investment expert.

Traditional Plans
These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are: 1. Steady Investment 1. Major chunk of investible funds are in debt instruments 2. Steady and almost assured returns over the long term 2. Features 1. Death benefit is Sum Assured + guaranteed & vested bonus 2. Helps in asset creation as they are for a long tenure 3. Premium to Sum Assured ratios are fixed for each plan and age. 4. Generally withdrawals are not allowed before maturity.

About life time super

Why LifeTime Super
As an individual who desires a lot from life-a car, a beautiful home and of course, the comfort and contentment of your family-you would undoubtedly want to plan your finances such that you can take care of all your requirements. Invest in ICICI Prudential's LifeTime Super policy-a regular-premium unit-linked policy, which offers potentially higher returns that systematically enable you to meet your long-term financial objectives. In addition, LifeTime Super also provides the protective benefit of an insurance cover, which keeps your family secure, always.

Lifetime Super At A Glance

Minimum/Maximum Entry Age Maximum Age at Policy Maturity Minimum/Maximum Policy Term Premium Payment Frequency Minimum Premium Minimum Sum Assured Tax Benefit (8)

0 years to 65 years 75 years 10 years to 75 years Monthly, half-yearly, yearly Rs. 18,000 per annum Annual Premium x Term/2. Subject to a minimum of Rs. 1,00,000 Premium paid for the policy and critical illness benefit rider will be eligible for tax benefit under Sec. 80C and 80D respectively. Any amount paid to you will be eligible for tax benefits under Sec. 10 (10D) as per prevailing Income Tax laws.

Features And Benefits Of Lifetime Super
Flexible policy term: Decide for how long you want your policy. You can invest for a minimum of 10 years and a maximum of 75 years. 3 choices of premium payment: Opt to pay the premium on a monthly, bi-annual or an annual basis. 6 investment funds: Select among Flexi-Growth, Maximiser, Flexi-Balanced, Balancer, Protector, and Preserver, based on your financial goals and risk profile.

Systematic withdrawal of money: Withdraw money in installments from the 4th year onwards. Maturity benefit: Receive the Fund Value when your policy matures. Choose to take this value as a single lump-sum amount or in monthly, bi-annual or annual installments. Death benefit: Your family receives the higher of Fund Value or Sum Assured should something happen to you. Switch benefit: Switch between funds anytime to adjust your portfolio, based on your goals and risk profiles. You can switch funds 4 times a year, at no cost. For subsequent switches, you will be required to pay a switch fee of Rs. 100.

Investment plans of other companies with which comparison is done
 Bajaj Allianz New Unit Gain Plus  Bajaj Allianz New Unit Gain Super  Reliance Market Return Plan  ING High Value Plan  HDFC Unit Linked Endowment Plus


Met Smart Plus

LTS &Bajaj Allianz New Unit Gain Plus
Features Minimum premium switches LTS annualRs. 18000 pa New Unit Gain Plus Rs. 15000 pa

4 switches free in a year &3 switches free in a year & Rs 100 is charged over 4Rs. 100 is charged over 3 switches switches

Policy administrationNo charge charges Surrender value

Rs. 240 pa

At the end of year 3:- 98% At the end of year3:100% At the end of year 4:- 99%

Additional of units Cover option

At the end of year 5:- 100% allocationEvery 4th year starting atNot applicable the end of 4th year @4%of annual premium continuanceApplicable Not applicable

In the above comparison we have seen that life time super have advantage that it have administration charges less, additional allocation of units, and cover continuance. And the disadvantage of higher minimum premium and surrender value is less in first three years.

LTS &Bajaj Allianz New Unit Gain Super
Features Minimum premium LTS annualRs. 18000 pa New Unit Gain Super Rs. 25000 pa Can options: Silver 25000<=AP<50000 gold 50000<=AP<100000 diamond– 100000<=AP<500000 platinum switches – AP>=500000&above 4 switches free in a year &3 switches free in a year & Rs 100 is charged over 4Rs. 100 is charged over 3 – – choose different

switches Policy admin charges No charge Cover continuanceApplicable option Surrender value At the end of yr 3:-98% At the end of yr 4:-99% Additional of units Riders

switches Rs. 50 pm Not applicable At the end of yr 3:-90% At the end of yr 4:-95%

At the end of yr 5:-100% At the end of yr 5:-100% allocationEvery 4th year starting atNot applicable the end of 4th year @4%of annual premium ADBR, CIBR, WOPR UL Accidental UL UL Death

benefit, permanent disability, benefit

accidental Total/Partial critical

illness, UL hospital cash

In the above comparison we have seen that life time super have advantage that it have administration charges less, additional allocation of units, and cover continuance option, higher surrender value. And the disadvantage of fewer riders option and have six fund investment options.

LTS &Reliance Market Return Plan
Features Minimum premium LTS annualRs. 18000 pa Reliance market return plan Rs. 10000 for regular premium and Rs. 25000 for single premium

switches

4 switches free in a year1 switch free in a year & & Rs 100 is charged overRs. 100 is charged over 3 4 switches No charge switches 2%

Policy admin charges Surrender value

At the end of year 3:98% At the end of year 3:At the end of year 4:99% 100%

At the end of yr5:100% Additional allocation ofEvery 4th year starting atNot applicable units Choice of funds the end of 4th year @4%of annual premium 6 fund option available 4 fund options

Cover option

continuanceApplicable

Not applicable

In the above comparison we have seen that life time super have advantage that it have administration charges less, additional allocation of units, and cover continuance option, choice of fund options are more. And the disadvantage of higher minimum premium and less surrender value.

LTS & ING High Value Plan
Features Minimum premium switches LTS annualRs. 18000 pa ING High Value Plan Rs. 50000 pa

4 switches free in a year2 switches free in a year & Rs 100 is charged over& Rs. 100 is charged over 4 switches administrationNo charge 2 switches At inception: fixed

Policy charges

Rs.1000 &

charges

Rs.2/Rs.1000SA +Rs. 50 Riders Surrender value pm ADBR,CIBR,WOPR ADBR At the end of year 3:98% At the end of yr 3:97.5% At the end of year 4:99% At the end of yr 4: 99% At the end of yr 5:100% At the end of yr 5: 100% Additional allocation ofEvery 4th year starting atNot applicable units Choice of funds the end of 4th year @4%of annual premium 6 fund options 4 fund options

In the above comparison we have seen that life time super have advantage that it have less minimum premium, more switching options, administration charges less, additional allocation of units, choice of fund options are more and riders options are more.

LTS & HDFC Unit Linked Endowment Plus
Features Minimum premium switches 4 switches free in a policy year24 switches free in a & Rs 100 is charged over 4policy year & Rs. 100 switches Policy admin charges No charge Surrender value At the end of year 3:98% At the end of year 4:99% Miscellaneous charges At the end of yr 5:100% None is charged over 24 switches Rs. 20 pm At the end of year 3:100% 6 free policy services after that Rs. 250 is LTS annualRs. 18000 pa HDFC Unit Linked Endowment Plus Rs. 10000 pa

charged. Additional allocationEvery 4th year starting at theAt the end of every of units Fund charges end of 4th year @4%of annualyear units will be premium increased by 0.1% managementFlexigrowth/maximiser:2.25% 0.80% Balancer/flexi balancer:2.25% Protector:1.5%preserver:0.75% In the above comparison we have seen that life time super have advantage that it have less administration charges, miscellaneous charges are not in life time super. The disadvantage is the minimum premium paid is more, switching option are less, low surrender value in first three years and fund management charges are also high.

LTS & Met Smart Plus

Features Minimum premium Cover

LTS annualRs. 18000 pa continuanceApplicable No charge None

Met Smart Plus Rs. 12000 pa Not applicable Rs. 200 pa Rs. 250 for any alteration

option Policy admin charges Miscellaneous charge Settlement

in the contract periodAvailable upto a periodNot applicable

option of 5 years Additional allocation ofEvery 4th year starting atNot applicable units Riders the end of 4th year ADBR Illness and Critical @4%of annual premium ADBR, CIBR, WOPR

In the above comparison we have seen that life time super have advantage that it have less administration charges, additional allocation of units, no miscellaneous charges, cover continuance option and riders options are more.

Conclusion

From the comparison done of LIFE TIME SUPER with other investment policy of other companies we have seen that despite being the most selling investment plan of ICICI Prudential Life Insurance it is facing the acute competition form competitors. The main competition to this plan is given by HDFC Unit Linked Endowment Plus of HDFC and ING High Value Plan of ING Vysya. LIFE TIME SUPER have advantage of less minimum premium, less administration charges, no miscellaneous charges, switching option are more and cover continuance option is applicable (which is the important point in gaining the advantage over other plans).

Recommendations
According to the comparison done we have seen that for gaining advantage over other plans LIFE TIME SUPER should have

 Less annual premium,  Riders option should be more,  It should have TOP-UP options as other companies are offering it and  Surrender value should be more in initial years also.

Future Possibilities
• Job opportunities are likely to increase manifold. The number of people working in the insurance sector in India is roughly the same as in the UK with a population that is 1/7 India's; the US with a population 1/4 the size of India has nearly 4 times the number. In the emerging markets, the picture is no less encouraging. In S Korea, the no. of full time employees has more than doubled over a ten year period. Thailand added 50 % more jobs in four years. • The liberalization of the insurance sector promises several new jobs opportunities for those employed in the finance sector who are equipped with degrees in finance. Finance professionals who had witnessed a slump in the job market would be a much-relieved lot to hear about the privatization of the insurance sector. • Let us look into the type of jobs that will be created once the private players come on the scene. Certainly, it won't be far different from the traditional streams in any other industry. There will be demand for marketing specialists, finance experts, human resource professionals, engineers from diverse streams like the petrochemical and power sectors, systems professionals, statisticians and even medical professionals. Apart from this, there will be high demand for

professionals in the streams like Underwriting and claims management and actuarial sciences. • There could be a huge inflow of funds into the country. Given the industry's huge requirement of start-up capital, the initial years after opening up are bound to see a strong inflow of foreign capital. Moreover, given that the break-even, typically, comes much later than in the case of other sectors, odds are those first remittances of dividend will not happen before a good 10-15 years. • In the areas of reinsurance, huge capacity is likely to be created with players like Swiss Re and Munich Re keenly observing the unfolding saga of liberalization of insurance industry in India. Not only the outward reinsurance will reduce, it is bound to attract inward reinsurance from the neighboring countries and regions. If the regulator is forward looking and legislature is supportive, this trend may well lead to the creation of a Lloyds like market for the direct as well as reinsurance businesses. • However, increased competition is very likely to result in rate reductions in certain classes of business, but in those areas that have so far been cross subsidized; an increase in rates may be possible. Overall, the rate reductions may outweigh the increases, thus bringing down the re-insurance premium volume available. • Apart from pure re-insurance activities, which is providing insurance protection, a revolution will come in service related fields like training, seminars, workshops, know-how transfer regarding risk assessment and rating, risk inspections, risk management and devising new policy covers, etc. Also, with more players in the market, there will be significant increase in advertising, brand building, and keen pricing not ridiculous pricing and this will benefit whole lot of ancillary industries.

• Another effect of de-regulation will be that, projects, especially mega-projects where one needs the capacities of the international re-insurance market, will get exposed to international trends to an even greater extent than is the case today. This will affect rates too. Areas like the personal lines segment, where we also expect to see substantial growth as also new types of covers, would usually not be affected by international trends in the same way as, there is much less need for global re-insurance support. • Substantial shift in the distribution of insurance in India is likely to take place. Many of these changes will echo international trends. Worldwide, insurance products move along a continuum from pure service products to pure commodity products. Initially, insurance is seen as a complex product with a high advice and service component. Buyers prefer a face-to-face interaction and place a high premium on brand names and reliability. • As products become simpler and awareness increases, they become off-the-shelf, commodity products. Sellers move to remote channels such as the telephone or direct mail. Various intermediaries, not necessarily insurance companies, sell insurance. In the UK for example, retailer Marks & Spencer now sells insurance products. In some countries like Netherlands and Japan, insurance is marketed using post office's distribution channels. At this point, buyers look for low price. Brand loyalty could shift from the insurer to the seller. • In other markets, notably Europe, this has resulted in banc assurance: banks entering the insurance business. The Netherlands led with financial services firms providing an entire range of products including bank accounts, motor, home and life insurance, and pensions. Other European markets have followed suit. In France over half of all life insurance sales are made through banks. In the UK, almost 95% of banks and building societies are distributing insurance products today.

• In India too, banks hope to maximize expensive existing networks by selling a range of products. Various seminars and conferences on banc assurance are taking place and many bankers have clearly shown their inclination to enter insurance market by leveraging their strengths in the areas of brand image, distribution network, and face to face contact with the clients and telemarketing coupled with advanced information technology systems. The mergers of Citibank with Travelers in USA and of Winterthur, the largest Swiss Co. with Credit Suisse are recent examples of the phenomenon likely to sweep India too. • Insurers in India should also explore distribution through non-financial organizations. For example, insurance for consumer items such as refrigerators can be offered at the point of sale. This piggybacks on an existing distribution channel and increases the likelihood of insurance sales. Alliances with manufacturers or retailers of consumer goods will be possible. With increasing competition, they are wooing customers with various incentives, of which insurance can be one. • Another potential channel that reduces the need for an owned distribution network is worksite marketing. Insurers will be able to market pensions, health insurance and even other general covers through employers to their employees. These products may be purchased by the employer or simply marketed at the workplace with the employer’s co-operation. • Worldwide interest in E-commerce and India's predominant position in information technology and software development is also likely to be a major factor in the marketing of insurance products in the immediate future. The internet account is increasing in arithmetic progression and the trend has already been set by some of the leading insurers and insurance brokers worldwide. • Finally, some potential Indian entrants into insurance hope to ride their existing distribution networks and customer bases. For example, financial organizations

like ICICI, HDFC or Kotak Mahindra intend to tap the thousands of customers who already buy their deposits, consumer loans or housing finance. Other hopeful entrants anticipate specific alliances such as with hospitals to provide health cover. The huge life fund can be utilized for financing the infrastructure industry as well as provide support to other industries in the country. Hence, the insurance industry is likely to play a key role in changing the economic landscape of the country. However, the success of the insurance industry will primarily depend upon meeting the rising expectations of the consumer who will be the real king in the liberalized insurance market in future.

Annexure
Brochure of Life Time Super

Bibliography
Books:
1. Khan M.Y.; Financial Services. 2. Mishra M.N; Insurance Principal & Practice. 3. L.M. Bhole; Financial Markets and Institutions.

Websites:
1. www.iciciprulife.com 2. www.financialexpress.com 3. www.insuranceguide.com 4. www.irdaindia.com 5. www. insuremagic.com 6. www.indiacore.com 8. www.researchandmarkets.com 9. www.ingvysyalife.com 10. www.hdfcinsurance.com 11. www.reliancelife.co.in 12. www.metlife.com 13. www.allianzbajaj.co.in

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