1.

INTRODUCTION TO LIFE INSURANCE

MEANING
Life Insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event insured against. Usually the insurance 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. Obviously, there is a price to be paid for this benefit. Among other things, the contract also provides for the payment of premiums by the assured. Life Insurance is universally acknowledged as a tool to eliminate risk, substitute certainty for uncertainty and ensure timely aid for the family in the unfortunate event of the death of the breadwinner. In other words, it is the civilized worlds partial solution to the problems caused by death. In a nutshell, life insurance helps in two ways: dealing with premature death, which leaves dependent families to fend for themselves and old age without visible means of support.

NEED FOR LIFE INSURANCE

The need for life insurance comes from the need to safeguard our family. If you care for your familys needs you will definitely consider insurance. Today insurance has become even more important due to the disintegration of the prevalent joint family system, a system in which a number of generations co-existed in harmony, and a system in which a sense of financial security was always there as there were more earning members. Factors such as fewer numbers of earning members, stress, pollution, increased competition, higher ambitions etc are some of the reasons why insurance has gained importance

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and where insurance plays a successful role. Insurance provides a sense of security to the income earner as also to the family. Buying insurance frees the individual from unnecessary financial burden that can otherwise make him spend sleepless nights. The individual has a sense of consolation that he has something to fall back on. Insurance is a must also because of the uncertain future adversities of life. Accidents, illnesses, disability etc are facts of life, which can be extremely devastating. Other than the hospitalization, medication bills these may run up its the aftermath of the incident, the physical well being of the individual that has to be taken into consideration. Will the individual be in a position to earn as before? But what if he is not? Disability can be taken care of by insurance. Your family will not have to go through the grind due to your present inability. Insurance today has opened up new vistas for every section of society. Even for the village farmer insurance holds a lot of potential. Considering how dependent our agricultural system is on the monsoon, the farmer sees a dim future. The uncertainty of the monsoon too can be taken care of by insurance. Looking at the advantages of an insurance policy a number of farmers have gone in for insurance. Insurance has become a necessity today. It provides timely financial as also rewards with bonuses.

LIFE INSURANCE PROVIDES:

The proceeds accruing from Life Insurance policy can be utilized for: Final expenses resulting from death Guaranteed maintenance of lifestyle Replacement of income Mortgage or liquidation payments Costs of education Estate and other taxes

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 Continuity & security of interests

2. LIFE INSURANCE MARKET

PRESENT SCENARIO

The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were underinsured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed.

The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, state owned LIC's new premium business has fallen.

Innovative products, smart marketing and aggressive distribution.That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have 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 growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the T.Y.B COM (BANKING & INSURANCE) 3

private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers.The private insurers also seem to be scoring big in other waysthey are persuading people to take out bigger policies. For instance, the average size of a life insurance policy before privatisation was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh- way bigger than the industry average.

HISTORICAL PERSPECTIVE
The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non-Indian lives as Indian lives were considered more riskier for coverage. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to the Triton (Tital) Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and 30's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon.

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The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State lead planning and development. The insurance business continued to thrive with the private sector till 1972. Their operations were restricted to organized trade and industry in large cities. The general insurance industry was nationalized in 1972.

IMPORTANT MILESTONES IN THE LIFE INSURANCE BUSINESS IN INDIA:

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

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

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

1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.

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3. INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendations included: i) Structure Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate. ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the sector. No Company should deal in both Life and General Insurance through a single entity.

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Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state. iii) Regulatory Body The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance- a part of the Finance Ministry- should be made independent iv) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time) v) Customer Service LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee emphasized that in order to improve the customer services and increase the coverage of insurance policies, industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body- The Insurance Regulatory and Development Authority.

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Reforms Insurance sector

in

the were

initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products.

4. RELIANCE LIFE INSURANCE COMPANY Founder of Reliance Corporation

SH. DHIRUBHAI H AMBANI Few men in history have made as dramatic a contribution to their countrys economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy that is more enduring and timeless As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of Indias capital markets, the champion of shareholder interest. But the role Dhirubhai cherished most was perhaps that of India s greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, India s largest private sector enterprise. When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling enterprise into a Rs 60,000 crore colossusan achievement which earned Reliance a place on T.Y.B COM (BANKING & INSURANCE) 8

the global Fortune 500 list, the first ever Indian private company to do so. Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when Reliance Textile Industries Limited first went public, the Indian stock market was a place patronised by a small club of elite investors which dabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial return on their investments. It was to be the start of one of great stories of mutual respect and reciprocal gain in the Indian markets. Under Dhirubhais extraordinary vision and leadership, Reliance scripted one of the greatest growth stories in corporate history anywhere in the world, and went on to become Indias largest private sector enterprise. Through out this amazing journey, Dhirubhai always kept the interests of the ordinary shareholder uppermost in mind, in the process making millionaires out of many of the initial investors in the Reliance stock, and creating one of the worlds largest shareholder families.

HISTORY OF RELIANCE LIFE INSURANCE COMPANY

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, T.Y.B COM (BANKING & INSURANCE) 9

1934.Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services.Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporate.

Vision:

To be an insurer of World Standards and the most preferred choice for clientele at the domestic and global level.

Mission:

Mission is to keep the customer satisfaction as focal point of all our operations, adopt the best international practices in underwriting, claims and customer service, be the most innovative in product development, establish presence all over India, ensure sustained value addition to all stake holders and to uphold Corporate Value & Corporate Governance.

Objectives:

Make affordable insurance accessible to all

Keep customer as focal point for all operations

Protect policy holders interests 10

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 Adopt best international practices in claims, underwriting and policy servicing

Be the most innovative in product development

Establish Pan India presence

Value Propositions

Risk Evaluation: Provide expertise in risk evaluation and risk mitigation leading to the most appropriate risk transfer solution.

Post sales services: Differentiate on service parameters by ensuring prompt and correct documentation& fair, transparent, speedy claims settlement.

New products: Introduce innovative products suited to specific market segment.

Training: Extensive training to the employees involved in underwriting and claims to ensure availability of a varied experienced and competent team to cater to the customer needs

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 Technology: Use IT as a means to provide for a far superior customer experience in terms of access, speed and simplicity

Reinsurance backing: Apart from using capacity of the national reinsurer, establish relationships with the best reinsurers across the world.

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5. PRODUCTS OF RELIANCE LIFE INSURANCE

INDIVIDUAL PLANS

A. RELIANCE ENDOWMENT PLAN

It takes a lot for a dream to become a reality and money is surely one of them. Reliance Endowment Plan gives you just the financial independence to realize your dreams in the future. It lets you decide how much you would like to set as your sum assured based on your current financial position and your expected future expenses.

Key Features:

On maturity receive Sum Assured plus bonuses Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Increase your insurance protection by adding Term Cover Choose to pay regular or single premium Choose to add the benefit of two riders - Critical Illness Rider and Accidental Death Benefit & Total and Permanent Disablement Rider Choose to avail of a Policy Loan after three full years of premium payment

How does this Plan work? You pay premium every year for the entire term and get Sum Assured plus accumulated bonuses at maturity. On death, your Beneficiary will get the Sum Assured plus accumulated bonuses. T.Y.B COM (BANKING & INSURANCE) 13

Benefits: Maturity Benefit: On maturity you get Sum Assured plus accumulated bonuses (if any) till that date.

Life Cover Benefit: In the unfortunate event of loss of life, your family will receive the Sum Assured plus accumulated bonuses (if any) till that date.

Rider Benefit: You also have the option to add three additional benefits to customize the Policy as per your needs for the regular premium plan

a) Term Life Insurance Benefit Rider b) Accidental Death Benefit & Total and Permanent Disablement Rider c) Critical Illness Rider Accidental Death Benefit: The Accidental Death Benefit is payable if death occurs directly as a result of an accident and is intimated within 90 days of the occurrence. The Benefit payable is equal to the Rider Sum Assured. The minimum Sum Assured is Rs 25,000 and the maximum under all Policies taken together is Rs 50,00,000.

Term Life Insurance Benefit Rider: Add the advantage of the Term Life Insurance Benefit rider to your basic Policy and increase risk coverage. In the event of unfortunate loss of life the Term Life Insurance Benefit is payable and

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the amount payable is equal to the rider Sum Assured.

There is no Maturity Benefit.

Term Insurance Minimum / Maximum Age at entry Maximum Age at expiry Sum Assured Policy Term

18 / 59 64 yrs (policy anniversary immediately following age) Rs Equal to basic policy sum

1,00,000 assured Equal to basic policy term

Exclusions: The Company will not pay any Accidental Death Claim or Total and Permanent Disablement Claims which results directly or indirectly from any one or more of the following:

An act or attempted act of self-injury, Participation in any criminal or illegal act, Being under the influence of alcohol or drugs except under direction of a registered medical practitioner, Racing or practicing racing of any kind other than on foot, Flying or attempting to fly in, or using or attempting to use, an aerial device of any description, other than as a fare paying passenger on a recognised airline or charter service, Participating in any riot, strike or civil commotion, active military, naval, air force, police or similar service, or War, invasion, act of foreign enemies, hostilities or war like operations (whether war be declared or not), civil war, mutiny, military rising, insurrection, rebellion, military or usurped power or any act of terrorism or violence.

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The tables below show the indicative annual premiums for individual Life Assured across different Sum Assured and ages for a Policy Term of 20, 25 and 30 years.

Age\T erm 30 35 40 45

Sum Assured: 1 Lakh 20 25 4814 4897 5039 5273 3733 3842 4022 4318

30 3052 3192 3421 3799

Sum Assured: 3 Lakh 20 25 14142 14391 14817 15519 1089 9 11226 11766 1265 4

30 8856 9276 9963 11097

S 2

2 2

What is the Policy Term? Minimum Policy Term: Maximum Policy Term: Premium Who can buy this product? Minimum age at entry: Maximum age at entry: Minimum age at maturity: Maximum maturity: age at 5 years 65 years 18 years 75 years 5 years Regular Premium - 35 years (Single) 15 years

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What is the Sum Assured? Minimum Assured: Premium determined Maximum it Sum is Sum Regular Premium - Rs 25,000 For Single by the minimum premium Entry age below 18 years - Rs 5,00,000 No Limit

Assured: Entry age 18 years and

Tax Benefits: Premiums paid are eligible for tax deduction under Section 80C & 80D of the Income Tax Act, 1961. Maturity & Death Benefit is tax free under Section 10(10 D) of the Income Tax Act, 1961. Under Section 80C, premiums upto Rs 100,000 are allowed as deduction from your taxable income. Under Section 80 D premium upto Rs 10,000 (Rs 15,000 for senior citizens) are allowed as deduction from your taxable income. (80 D - Applicable to Critical Conditions Premium)

Can I take a loan against my Policy? The Policy loan can be up to a maximum of 90% of the Surrender Value of the Policy at the time of taking the loan based on the terms and conditions at that time.

Revival: A lapsed Policy can be reinstated for full benefits anytime before the date of maturity at terms and conditions required by the Company.

Flexible Premium Payment Modes:

a) Yearly with minimum premium payment of Rs. 2,000 b) Half-yearly with minimum premium payment of Rs. 1,500 c) Quarterly with minimum premium payment of Rs. 750 T.Y.B COM (BANKING & INSURANCE) 17

d) Monthly (only with salary deduction schemes) with minimum premium payment of Rs. 250 e) Single Premium with minimum premium payment of Rs. 25,000

Grace period: Regular Premium- one month or 30 days from the due date for payment of premiums Monthly Premium - 15 days.

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B. RELIANCE CASH FLOW PLAN

While most insurance plans block your money for a certain period of time, Reliance Cash Flow Plan gives you the double benefit of life insurance along with easy liquidity through lump sum cash. It provides money periodically when you need it. It lets you live life to the fullest today and at the same time, helps you stay protected for tomorrow by giving you the flexibility of receiving a specified percentage of the Sum Assured at specified intervals.

Key Features:

Easy Liquidity - Get periodic cash flows at the end of the fourth year and thereafter at the end of every three years Wealth creation through bonus additions On maturity receive accumulated bonuses along with final lump sum payout More value for your money by way of High Sum Assured Rebate Full Sum Assured plus bonuses in case of your unfortunate death. This is over and above the Survival Benefits already paid Option to add two riders Critical Illness Rider and Accidental Death Benefit & Total and Permanent Disablement Rider

How does this Plan work? You pay premium every year for the entire term and get Survival Benefits at periodical intervals as mentioned below. On death, your Beneficiary will get the full Sum Assured, plus accumulated bonuses, over and above the Survival Benefits already paid to you.

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Benefits:

Survival Benefit: Get a percentage of the Sum Assured on the fourth anniversary and on every third Policy Anniversary till maturity.

Maturity Benefit: On maturity you get the remaining percentage of the Sum Assured plus accumulated bonuses.

Life Cover Benefit: In the unfortunate event of loss of life, your Beneficiary will receive the full Sum Assured plus accumulated bonuses till that date.

Rider Benefit: You also have the option to add two additional benefits to customize the Policy as per your needs:

Accidental Death Benefit & Total and Permanent Disablement Rider Critical Illness Ride Racing or practicing racing of any kind other than on foot, flying or attempting to fly in, or using or attempting to use, an aerial device of any description, other than as a fare paying passenger on a recognised airline or charter service, Participating in any riot, strike or civil commotion, active military, naval, air force, police or similar service, or War, invasion, act of foreign enemies, hostilities or war like operations (whether war be declared or not), civil war, mutiny, military rising, insurrection, rebellion, military or usurped power or any act of terrorism or violence.

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Exclusions: The Company will not pay any Accidental Death Claim or Total and Permanent Disablement Claims which results directly or indirectly from any one or more of the following: An act or attempted act of self-injury, Participation in any criminal or illegal act,

When & how much of Fixed Benefits paid? Ter m 7 10 13 16 19 22 25 28 31 34 Money Back survival 13 benefits 16 paid 19 22 per

on survival to the end of year 4 7 10 500 500 333 333 333 250 250 250 200 200 200 167 167 167 143 143 143 125 125 125 111 111 111 100 100 100 90. 90.9 90.9 9

250 200 167 143 125 111 100 90.9

200 167 143 125 111 100 90.9

167 143 125 111 100 90.9

143 125 111 100 90.9

SampleIllustration: The tables show the indicative premiums for an individual Life Assured across different Sum Assured for a Policy Term of 16, 25 and 31 years Age\Ter m Sum Assured: 1 Lakh 16 25 31 Sum Assured: 3 Lakh 16 25 31

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25440 30 35 40 45 8580 8700 8905 9320 595 0 614 0 644 5 701 0 What is the Policy Term? Minimum Policy Term: Maximum Policy Term: 7 years 34 years 5045 5295 NA NA 25800 26415 27660

1755 0

14835

1812 0 1903 5 2073 0

15585 NA NA

Who can buy this product? Minimum age at entry: Maximum age at entry: Minimum age at maturity: Maximum maturity: What is the Sum Assured? Minimum Assured: Maximum Assured: Sum Sum Rs 25,000 No Limit age at 15 years 63 years 22 years 70 years

No loan is available under this Policy

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Can I revive a Policy which is lapsed? A lapsed Policy can be reinstated for full benefits anytime before the date of maturity at terms and conditions required by the Company.

Flexible Premium Payment Modes: a. Yearly b. Half-Yearly c. Quarterly d. Monthly (with salary deduction schemes only)

Grace period There is a grace period of 30 days for payment of premium.

Tax Benefit: Premiums paid are eligible for tax deduction under Section 80C & 80D of the Income Tax Act, 1961. Maturity & Death Benefit are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section 80C, premiums upto Rs 100,000 are allowed as deduction from your taxable income. Under Section 80 D premium upto Rs 10,000 (Rs 15,000 for senior citizens) are allowed as deduction.

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C. RELIANCE CHILD PLAN

As a parent, it is only natural to dream of a smooth and blissful life for the child. Which is exactly why one need to secure his/her childs tomorrow, today. Reliance Child Plan helps to save systematically so that one can give child the much-needed financial security in the future. Simply put, Reliance Child Plan gives the freedom to enjoy every moment with child today, without worrying about his/her tomorrow.

Key Features:

Risk protection during the term of the Policy Accumulated bonus at the end of the Policy Term 25% of Sum Assured payable every year as lump sum benefit during the last four Policy anniversaries All future premiums are waived in the event of unfortunate loss of life Guaranteed Fixed Benefits continue even after loss of life of the Policyholder More value for your money by way of High Sum Assured Rebate Choose to add the benefit of two riders Critical Illness Rider and Accidental Death Benefit & Accidental Death Benefit & Total and Permanent Disablement Rider Policy participates in profit even after the loss of life of the Life Assured

How does this Plan work? Pay premium every year for the entire term and get guaranteed fixed benefits every year during the last four years of the Policy Term. On death, Beneficiary will get the Sum Assured, guaranteed fixed benefits on specified dates and all future premiums will be waived.

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All attached bonuses are payable at the end of the Policy Term and will remain attached to the Policy even after payment of Life Cover Benefit.

Benefits:

Life Cover Benefit: In the unfortunate event of loss of life, Beneficiary will receive the Sum Assured immediately and all future premiums will be waived.

Guaranteed Fixed Benefit: Get 25% of Sum Assured every year on the last four Policy Anniversaries irrespective of the survival of the Life Assured. For example if you have taken a Policy for Rs 1 lakh for 20 years, then fixed benefits payable will be Rs 25,000 each at the end of 17th, 18th, 19th and 20th year. Maturity Benefit: On maturity you get accumulated bonuses irrespective of the survival of the Life Assured.

Rider Benefit: People also have the option to add two additional benefits to customize the policy as per needs. a. Accidental Death Benefit & Total and Permanent Disablement Rider b. Critical Illness Rider

Exclusions: The Company will not pay any Accidental Death Claim or Total and Permanent Disablement Claims, which results directly or indirectly from any one or more of the following:

An act or attempted act of self-injury, Participation in any criminal or illegal act,

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 Being under the influence of alcohol or drugs except under direction of a registered medical practitioner, Racing or practicing racing of any kind other than on foot, Flying or attempting to fly in, or using or attempting to use, an aerial device of any description, other than as a fare paying passenger on a recognised airline or charter service, Participating in any riot, strike or civil commotion, active military, naval, air force, police or similar service, or

Sample Illustration: The tables below show the indicative premiums for an individual Life Assured across different Sum Assured for a Policy Term of 15, 18 and 20 years. Age\Ter m 30 35 40 45 Sum Assured: 1 Lakh 15 18 7665 7830 8115 8655 623 0 641 5 672 0 729 0 What is the Policy Term? Minimum Policy term: Maximum Policy term: Who can buy this product? Minimum age at entry: Maximum age at entry: 20 years 60 years 5 years 20 years 20 5520 5720 6045 6630 Sum Assured: 3 Lakh 15 18 22695 23190 24045 25665 1839 0 1894 5 1986 0 2157 0 20 16260 16860 17835 19590

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Minimum maturity: Maximum maturity:

age age

at at

25 years 70 years

What is the Sum Assured? Minimum Assured: Maximum Assured: Sum Sum Rs 25,000 No Limit

Can I take a loan against my Policy? Yes, you can take loan against your Policy. The Policy loan can be up to a maximum of 90% of the Surrender Value of the Policy at the time of taking the loan based on the terms and conditions at that time. . Flexible Premium Payment Modes: a. Yearly b. Half-yearly c. Quarterly d. Monthly (with salary deduction schemes only)

Grace Period: One month or 30 days from the due date for the payment of premiums.

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Tax Benefit: Premiums paid are eligible for tax deduction under Section 80C & 80D of the Income Tax Act, 1961. Maturity & Death Benefit are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section 80C, premiums upto Rs 100,000 are allowed as deduction from your taxable income. Under Section 80 D premium upto Rs 10,000 (Rs 15,000 for senior citizens) are allowed as deduction from your taxable income. (80 D - Applicable to Critical Conditions Premium)

D.RELIANCE TERM PLANS

Life, as we know, is full of uncertainties. And to keep ahead of them, we need to plan ahead. Reliance Term Plan is a pure life insurance plan that offers comprehensive and affordable coverage for a limited period of time to suit needs of people.

Key Features:

Get higher insurance protection at economical rates.

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 Optional protection.

accidental

&

disability rider to enhance Economical way to protect your family against financial liabilities like loss of income and outstanding loans etc. Discount on premium rates for women. Suitable for business owners who want to cover the life of their key employees.

How does this Plan work? You pay premium every year for the entire policy term. On death your Beneficiary will get the Sum Assured. There is no Maturity Benefit under this plan.

Benefits:

Life Cover Benefit: In the unfortunate event of loss of life, your beneficiary will receive the Sum Assured. Maturity Benefit: There is no Maturity Benefit payable under this Policy.

Rider Benefit: You also have the option to add Accidental Death Benefit and Total and Permanent Disablement Rider.

Exclusions:

Exclusion with Accidental Death & Total and Permanent Disablement Benefit Rider: The Company will not pay any accidental death claim or total and permanent disablement claims which results directly or indirectly from any one or more of the following:

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 An act or attempted act of self-injury, Participation in any criminal or illegal act, Being under the influence of alcohol or drugs except under direction of a registered medical practitioner, Racing or practicing racing of any kind other than on foot, Flying or attempting to fly in, or using or attempting to use, an aerial device of any description, other than as a fare paying passenger on a recognised airline or charter service, Participating in any riot, strike or civil commotion, active military, naval, air force, police or similar service, or

Sample Illustration: The tables below show the indicative premiums for a male Life Assured across different Sum Assured and ages for policy term of 20, 25 and 30 years. Age\Ter m 30 35 40 45 Sum Assured: 10 Lakh 20 25 2600 3630 5400 8220 307 0 438 0 654 0 NA 30 3640 5260 NA NA Sum Assured: 15 Lakh 20 25 3650 5195 7850 12080 4355 6320 9560 NA 30 521 0 764 0 NA NA

S 2

What is the Policy Term? Minimum Policy Term: Maximum Policy Term: 5 years 30 years

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Who can buy this product? Minimum age at entry: Maximum age at entry: Maximum age at maturity: What is the Sum Assured? Minimum Assured: Maximum Sum Sum Rs 2,50,000 No Limit Rs 2,000 per installment 21 years 60 years 65 years

Assured: Minimum Premium:

Flexible Premium Payment Modes: a. Yearly b. Half-yearly c. Quarterly. The Company will charge a Policy Fee, depending on the Premium Payment Mode selected by you.

Advantage Women: Women Policyholders have an advantage as they receive discount on premium paid. For the basic Policy, basic premium payable will be equivalent to the premium for a three-year younger male Policyholder.

Tax Benefit: Premiums paid are eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Death Benefit is tax free under Section 10 (10 D) of the Income Tax Act, 1961. Under Section 80C, premiums paid up to Rs 1,00,000 are allowed as deduction from your taxable income.

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E. RELIANCE WHOLE LIFE PLAN

You always loved your family. As a loving person you also wanted to be rest assured in the knowledge that they will be happy, even if something were to happen to you. With Reliance Whole Life Plan you can be sure that your family will receive that timely financial support they need. Go ahead, live your today to the fullest without a worry about tomorrow.

Key Features:

Insurance protection till age 85 Choose to extend your insurance coverage till age 99 Convenient Premium Payment Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Get Sum Assured plus bonuses in case of your unfortunate death Option to add two riders Critical Illness and Accidental Death Benefit & Total & Permanent Disablement Rider Policy Loan available after three full years premium payment

How does this Plan work? You pay premium every year for the desired Premium Paying Term. You get Sum Assured plus bonuses on reaching age 85. You choose to continue with the insurance cover uptil the age of 99 and the Policy will continue to participate in profits till then. On death, your Beneficiary will get the Sum Assured plus accumulated bonuses.

Benefits:

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Maturity attaining age 85 you get Sum Assured plus accumulated bonuses

Benefit:

On

Life Cover Benefit: In the unfortunate event of loss of life, your beneficiary will receive the Sum Assured plus accumulated bonuses till that date.

Rider Benefit: You also have the option to add 2 additional benefits to customize the Policy as per your needs. a. Accidental Death Benefit & Total & Permanent Disablement Rider b. Critical Illness Rider

Inbuilt Waiver of Premium: If the Life Assured becomes totally and permanently disabled, then Reliance Life Insurance will waive all future premiums under the basic policy and riders up to a limit of Rs 40,000 p. a.

Accidental Death & Disability Benefit Age at entry 18 yrs Age at expiry 25 yrs Sum Assured Rs 25,000

59 yrs 64 yrs Rs 50,00,000 (subject to a maximum of basic policy sum assured)

Exclusions: The Company will not pay any Accidental Death Claim or Total and Permanent Disablement Claims which results directly or indirectly from any one or more of the following:

An act or attempted act of self-injury,

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 Participation

in

any

criminal or illegal act, Being under the influence of alcohol or drugs except under direction of a registered medical practitioner, Racing or practicing racing of any kind other than on foot, Flying or attempting to fly in, or using or attempting to use, an aerial device of any description, other than as a fare paying passenger on a recognised airline or charter service,

Participating in any riot, strike or civil commotion, active military, naval, air force, police or similar service, or War, invasion, act of foreign enemies, hostilities or war like operations (whether war be declared or not), civil war, mutiny, military rising, insurrection, rebellion, military or usurped power or any act of terrorism or violence.

Waiting and Survival Period: The Company will not pay the Critical Illness Benefit if: The critical illness begins prior to or within six months of the commencement date or date of reinstatement of the Benefit - Waiting Period Death from critical illness takes place within 30 days of the onset of the same Survival Period.

Sample Illustrations The tables below show the indicative premiums for an individual life assured across different sum assured for a premium paying term of 20, 30 and 40 years Age\Ter m 30 35 Sum Assured: 1 Lakh 20 30 3300 3735 272 0 310 5 T.Y.B COM (BANKING & INSURANCE) 34 40 2490 NA Sum Assured: 3 Lakh 20 30 9600 10905 7860 9015 40 717 0 NA

12450 40 45 4250 4920 358 0 NA NA NA 14460

10440

NA

NA

NA

What is the Policy Term? Minimum Premium 5 years 40 years

Paying Term: Maximum Premium Paying Term:

Who can buy this product? Minimum age at entry: Maximum age at entry: Minimum age at maturity: Maximum maturity: What is the Sum Assured? Minimum Assured: Maximum Assured: Sum Sum Rs 25,000 No Limit age at 20 years 60 years 85 years 99 years

Grace Period: One month or 30 days from the due date for the payment of premium.

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Can I revive a Policy which is lapsed? A lapsed Policy can be revived/reinstated for full benefits anytime before the date of maturity at terms and conditions required by the Company.

Flexible Premium Payment Modes: a. Yearly b. Half-yearly c. Quarterly d. Monthly (with salary deduction schemes only) For Regular Premium Mode the grace period is 30 days

Tax Benefit: Premiums paid are eligible for tax deduction under Section 80C & 80D of the Income Tax Act, 1961. Maturity & Death benefit are tax free under Section 10(10 D) of the Income Tax Act, 1961. Under Section 80C premiums upto Rs 1,00,000 are allowed as deduction from your taxable income. Under Section 80D premium upto Rs 10,000 (Rs 15,000 for senior citizens) are allowed as deduction from your taxable income. (80 D - Applicable to Critical Conditions Premium)

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F. PLAN

RELIANCE

MARKET RETURN

You have always aspired for the best in life. And Reliance help you achieve just that. With Reliance Market Return plan we can have the twin advantage of insurance protection as well as reaping the benefits of investment growth. It is a flexible plan which works all through your life and meets the changing requirements like additional protection, liquidity through cash, option to invest in different asset class, steady golden years and many more.

Key Features Reliance Market Return Plan: Twin benefit of market linked return and insurance protection A Unit Linked Plan, different form traditional Life Insurance products, with maximum maturity age of 80 years Option to create your own portfolio depending on your risk appetite Choose from 4 different investment funds Flexibility to switch between funds Option to pay regular as well as single premium & Top-ups Option to package with Accidental riders Flexibility to increase the Sum Assured Liquidity through partial withdrawals

How does this Plan work? The premium made net of Premium Allocation Charges by you is invested in fund/funds of your choice and units are allocated depending on the price of units for the fund/funds. The value of your Unit Account is the total value of units that you hold in the fund/funds. The Mortality Charges and Policy Administration Charges are deducted through cancellation of units whereas the Fund Management Charge is priced in the unit value.

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. Benefits: Life Cover Benefit: You can choose the basic Sum Assured within the minimum and maximum levels mentioned below Minimum Sum Assured: Regular Premium: Annualized Premium for 5 years or for half the Policy term Single Premium: 125% of the single premium Maximum Sum Assured: No Limit (Rs 500,000 for age up to 12 years) In case of unfortunate loss of life, your Beneficiary will get sum Assured or Unit Account Value whichever is higher.

Maturity Benefit: On survival, at maturity the value of your Unit Account will be paid out.

Rider Benefit: You can add the Accidental Death & Accidental Total and Permanent Disablement Benefit Rider (available only with regular premium option).

What are the different fund options? Reliance Life Insurance understands the value of your hard earned money and in our endeavour to help you grow your wealth, we offer you 4 different tailor-made investment funds. You have the option to allocate your premium in these funds as you wish. The four different funds offered are:

1. Capital Secure Fund: The investment objective of this fund is to maintain the value of all contributions (net of charges) and all interest additions. This Fund offers steady return for very T.Y.B COM (BANKING & INSURANCE) 38

little risk. The risk profile of this fund is low. Your funds are invested 100% in Bank Deposits, Government Bonds and debt instruments that offer financial inception. security. Further, investments in Capital Secure Fund are subject to a maximum limit of 20% at

2. Balanced Fund: The investment objective of this Fund is to provide you with investment returns which exceed the rate of inflation in the long term while maintaining a low probability of negative investment returns. In this fund, a major portion of your funds are invested in fixed securities while a small percentage is invested in the equity market, which is exposed to market movements. The risk profile of this fund is low to medium. Investment would be at least 80% in fixed interest securities and maximum 20% in equities.

3. Growth Fund: The investment objective of this Fund is to provide you with investment returns which exceed the rate of inflation in the long term while maintaining a moderate probability of negative investment returns. This fund offers a greater portion of your funds are invested in fixed securities while a small percentage is invested in the equity market, which is exposed to market movements. The risk profile of this fund is medium to high. Investment would be at least 60% in fixed interest securities and maximum 40% in equities.

4. Equity Fund: The investment objective of this fund is to provide Policyholders with high exposure to equities and the possibility of investment returns which generate a high real rate of return in the long term while recognizing that there is a significant probability of negative investment returns in the short term. This fund offers a totally equity based investment option. Your returns depend entirely upon the performance of the equity market. The risk profile of this fund is high. The higher risk of this portfolio means that expected returns would also be higher. Investments would not exceed 30% in Bank Deposits and may be 100% in equities.

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Value of Units: The unit price of each Fund will be the unit value calculated on a daily basis. Total Market Value of assets plus/less expenses incurred in the Uni t Pric e= purchase/sale of assets plus Current Assets plus any accrued income net of fund management charges less Current Liabilities less Provision Total Number of units on issue (before any new units are allocated/redeemed)

Make partial withdrawals: After three years, If your Unit Account Value is less than the Sum Assured, then the maximum partial withdrawal can be Rs 5,000 per partial withdrawal. If your Unit Account Value is more than the Sum Assured, then the maximum partial withdrawal is the difference between the Unit Account Value and the Sum Assured plus Rs 5000. Higher amounts of partial withdrawals are allowed subject to underwriting. Two partial withdrawals are allowed every year. Minimum Fund Value after each partial withdrawal should be Rs 10,000. For the purpose of partial withdrawals, top-ups would have a lock-in of three years from the date the top-ups are made until then no partial withdrawals are allowed. This condition is not applicable if the top-ups premiums are paid during the last three years of the Policy term. Where the Life Assured is minor, - partial withdrawals are allowed on or after attainment of age 18 years or after 3 years if later.

Who can buy this product?

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Minimum entry Maximum entry Maximum maturity

Age Age Age

at at at

30 days 65 years 80 years

Flexible Premium Payment Modes? You have a choice of five premium payment modes Annual Half-yearly Quarterly Monthly Single premium Rs. 10,000 Rs. 5,000 Rs. 2,500 Rs. 1,000 Minimum Premium is Rs. 25,000

Charges Under the plan:

1. Premium Allocation Charge For regular premium policies: Term of the Policy Year 5-9 First 10% Year Thereaft er The Premium Allocation Charge for single premium & top-ups is 2%. 5% 10-14 15% 5% 15+ 20% 5%

2. Policy Administration Charge: Rs 40 will be deducted from your Unit Account each month.

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3.

Fund

Management

Charge: Unit Linked Funds Capital Secure Balanced Growth Equity Annual Rate* 1.50% 1.50% 1.75% 1.75%

*The Fund Management Charges will be deducted on a daily basis. Revision of Charges: The Fund Management Charges are subject to revision at any time, but they will not exceed 2% p.a. for the Capital Secure Fund and 2.5% p.a. for the other funds.

4. Partial Withdrawal Charges: Rs 100 per withdrawal will be deducted from your Unit Account.

5. Switching Charge: 1% of the amount switched, with a maximum of Rs.1,000/.

6. Mortality Charge: The Mortality Charges, based on your attained age, are determined using 1/12th of the charges mentioned in Appendix 1 and are deducted from the Unit Account monthly.

7. Surrender charge: This charge is levied on the Unit Fund at the time of surrender of the Policy.

Tax Benefit:

Premiums paid are eligible for tax deduction under Section 80C of the Income Tax Act, 1961.

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Provided the premium in any years during the term of the Policy does not exceed 20% of the Sum Assured, maturity and withdrawals are eligible for tax benefit under Section 10(10D). Death benefit are tax free under Section 10(10) D of the Income Tax Act, 1961. Under Section 80C premiums up to Rs 100,000 are allowed as deduction from your taxable income.

General Exclusion:

If the Life Assured, whether sane or insane, commits suicide within 12 months from the date of issue of this Policy or the date of any revival of a Policy, the Company will limit the death benefit to the value of the Unit Account and will not pay any insured benefit.

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G. GOLDEN PLAN

RELIANCE YEARS

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. Retirement means different things to different people, while some want to relax and take a take a trip around the world, some want to start up a venture of their own, and pursue a dream youve harnessed for years. The power to make your autumn years special lies only with you. The Reliance Golden Year Plan gives the power and the right kind of solution - A retirement plan that allows to save systematically and generate the much needed corpus to make olden years look golden.

Key Features:

Invest systematically and secure your golden years A flexible unit-linked pension product that is different from traditional life insurance products with Vesting Age between 45 & 70 years Choose form two different Investment Funds to choose from Choose to switch between funds Option to pay Regular, Single as well as Top-up Premiums

How does Reliance Golden Years Plan work? The plan works in two parts: 1. Accumulation period (i.e. the Policy Term): Funds are built up by the plan during this period. This period ends at the Vesting Date. 2. Annuity Period: After the Vesting Date, the Annuity payments begin.

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Vesting Date: You are free to choose your age of retirement (Vesting Date) between 45 and 70 years.

Benefits: At Vesting: 1. On vesting, you can purchase an Annuity Plan for the full Fund Value 2. You may commute up to one third of the Fund Value as tax free lump sum and the balance can be used for the purchase of Annuity 3. Open Market Option: you can purchase an Annuity either from Reliance Life Insurance Company Limited or from any other registered Life Insurance Company.

At Death: In the unfortunate event of your death during the Policy Term, the beneficiary will get the Fund Value. This amount can be taken as a lump sum or an Annuity can be purchased for the entire lump sum or portion of it. The Beneficiary will have the option to purchase an Annuity either from Reliance Life Insurance Company Limited or from any other registered Life Insurance Company.

Annuity Options (currently available with Reliance Life Insurance Company Ltd): 1. Life Annuity 2. Life Annuity with return of purchase price on death 3. Life Annuity guaranteed for 5, 10 or 15 years and payable for life thereafter

What are the different fund options? Reliance Life Insurance Company Limited understands the value of your hard earned money and

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to help you make your wealth grow we offer two different tailor-made Investment Funds. You also have the option to allocate your premium in different funds in the manner you wish. The two different funds offered are:

1. Capital Secure Fund: Investment Objective: To maintain the value of all contributions (net of charges) and all interest additions. Returns: Steady return for very little risk. Risk Profile: Low Investments: Your funds are invested 100% in Bank Deposits, Government Bonds and Debt Instruments Fund. of less than 180 days duration. You may invest a maximum of 20% of the Total Premiums at inception in the Capital Secure

2. Balanced Fund: Investment Objective: To provide you with investment returns which exceed the rate of inflation in the long term while maintaining a low probability of negative investment returns. Investments: In this fund, a major portion of your funds are invested in Government Securities and Corporate Bonds while a small percentage is invested in the Equity Market, which is exposed to market movements. Investment would be at least 80% in Fixed Interest Securities and maximum 20% in Equities. Risk Profile: Low to medium.

Value of Units: The Unit Price of each fund will be the Unit Value calculated on a daily basis.

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Total Market Value of assets plus/less expenses incurred in Unit Value = the purchase/sale of assets plus Current Assets plus any accrued income net of Fund Management Charges less Current Liabilities less Provision --------------------------------------------------------------------------------------------Total Number of units on issue (before any new units are

allocated/redeemed) Who can buy this product? Minimum age at entry Maximum age at entry Minimum age at vesting Maximum vesting What is the Policy Term? Minimum Policy Term 5 years age at 18 years 65 years 45 years 70 years

Revival You may revive a Policy by recommencing the payment of premiums at any time within a period of three years from the due date of first unpaid premium but before the maturity date of the Policy.

Are there any flexible Premium Payment Modes? a) Single Premium with minimum premium of Rs 10,000 b) Yearly with minimum premium of Rs 10,000 c) Half-yearly with minimum premium of Rs 5,000 d) Quarterly with minimum premium of Rs 2,500

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e) Minimum

top-up

premiums is Rs. 2,500

Grace Period: Premiums due, have to be paid within the grace period of 30 days. 15 days for monthly mode

Charges Under the plan: 1. Premium Allocation Charge: Year 1 Subsequent years Single premium Top-Up premiums 10% 5% 5% 5%

2. Fund Management Charges: Funds Capital Secure Balanced Annual Rate* 1.50% 1.50%

3. Switching Charge: One free switch is allowed in each Policy Year. Subsequent switches will attract charge of 1% of the amount switched subject to a maximum of Rs 1000 per switch.

4. Surrender Charges: The Surrender Charges as percentage of Fund Value are given below: Year of Policy surrender 4 5 6 or more Surrender Charges as percentage of Fund Value 10% 5% Nil

Revision of Charges:

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The Fund Management Charges are subject to revision at any time but they will not exceed 2% p.a. for the Capital Secure Fund and 2.5% p.a. for the Balanced Fund

Tax Benefit:

Premiums paid are eligible for tax deduction under the Income Tax Act, 1961 and subsequent amendments.

6. OVERVIEW OF SURVEY
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