Professional Documents
Culture Documents
Flexibility to switch your fund value at your own discretion 4 times a year Viz
Maximiser, Protector, Balancer, Preserver. Greater transparency- policyholder
knows what is happening to his money and where the company has invested the mone
y. Liquidity option: you can make partial or complete withdrawals anytime afte
r 3 years. Life insurance plans are eligible for deduction under Sec. 80C. T
he proceeds or withdrawals of life insurance policies are exempt under Sec 10(10
D), subject to norms prescribed in that section. Riders are provided to give t
he policyholder the additional protection at marginal cost- Accident and Disabil
ity rider, Critical Illness Rider, Accidental benefit rider. 36
Loan against the policy : After the policy has acquired a surrender value one
can avail loan against the policy. WEAKNESSES • • • • • • • Industry in nascent
stage. Rural areas still not covered. Not very well known among the Indian popul
ation. Lack of credibility in the public because ICICI being a private player. P
remiums are high as compared to its competitors. Very few branches in the countr
y. PRODUCTS: The policy doesn’t have the surrender option before the 3rd year.
Plan do not offer any guarantee or assured return The product profile is no
t very comprehensive. Mortality, management and administrative charges are sky
-scraping as compared to its competitors.
OPPORTUNITIES • • • • • Liberalization of Indian economy. As the industry is gro
wing the whole market is virgin. The whole private sector is open to be tapped e
ven though the competition is fierce from government owned insurance companies.
It’s a volume business that is even if the company has few good corporates the t
urnover ceases to increase by manifold. PRODUCTS: Preserver fund looks good du
e to comfortable liquidity in the economy and there is little chance of any hike
in short-term rates by RBI.
37
Finance minister unveiled a budget-favoring consumer spending, boosting demand
and therefore higher economic growth THREATS • • • • The Govt. players will bec
ome aggressive thus growth is going to be tough. Entry of other new players is n
ot ruled out Apprehension towards ICICI PRUDENTIAL being a private life insuranc
e company. We expect the industry to rationalize in future that is mergers and a
cquisitions will happen which will impact the industry and ICICI PRUDENTIAL fort
unes. • PRODUCTS: Past performance of these plans is not indicative of the fut
ure performance of the plan The sum invested in the funds is subject to market
risks and there can be no assurance that the objective of the plans will be ach
ieved. All benefits payable under the policy are subject to the tax laws and o
ther financial enactment, as they exist from time to time
38
MEANING OF ULIP
A policy, which provides for life insurance where the policy value at any time v
aries according to the value of the underlying assets at the time. ULIP is life
insurance solution that provides for the benefits of protection and flexibility
in investment. The investment is denoted as units and is represented by the valu
e that it has attained called as Net Asset Value (NAV).
Unit linked insurance plans
Units in funds
Underlying investment
Contribution A ULIP structure looks like as follows:
Less charge
Investment represented as units
Life cover
39
FEATURES OF ULIP
ULIP distinguishes itself through the multiple benefits that it provides to the
consumer. The plan is a one-stop solution providing: Life protection Investm
ent and Savings Flexibility - Adjustable Life Cover - Investment Options Tra
nsparency Options to take additional cover against - Death due to accident - D
isability - Critical Illness - Surgeries Liquidity Tax planning The two stro
ng arguments in favour of unit-linked plans are: • • Firstly, the investor knows
exactly what is happening to his money Secondly it allows the investor to choos
e the assets into which he wants his funds invested. An investor in a ULIP knows
how much he is paying towards mortality, management and administration charges.
He also knows where the insurance company has invested his money. The investor
gets exactly the same returns that the fund earns but he also bears the investme
nt risk. The transparency makes the product more competitive. So if you are will
ing to bear the investment risks in order to generate a higher return on your re
tirement funds ULIPs are for you. Traditional ‘with profits’ policies too invest
in the market and generate the same returns prevailing in the market. But here
the insurance company evens out returns to ensure that policyholders do not hold
money in a bad year. In that sense they are safer. ULIPs also offer flexibility
. For instance a policyholder can ask 40
the insurance company to liquidate units in his account to meet to mortality cha
rges if he is unable to pay any premium installment. This eats into savings but
ensures that the policy will continue to cover his life. ULIP came into play in
the 1960s and became very popular in Western Europe and Americas. The reason tha
t is attributed to the wide spread popularity of ULIP is because of the transpar
ency and the flexibility which it offers. Unit- linked plans are a contemporary
product: transparent and flexible. Individuals have greater control over their i
nvestments. The popularity of ULIPS stems from the fact that they offer customer
s “integrated financial solutions with a transparent charge structure”. In today
’s times, ULIP provides solutions for insurance planning, financial needs, finan
cial planning for children’s future and retirement planning. Unit-linked insuran
ce plans (ULIPs) have become something of a rage with their promise of market-
linked returns combined with the dual benefit of insuring your life from eventua
lities. Why do insurers prefer ULIPs? Insurers love ULIPs for several reasons. M
ost important of all, insurers can sell these policies with lesser capital of th
eir own than what would be required if they sold traditional policies. In tradit
ional ‘with profits’ policies the insurance company bears the investment risk to
the extent of insured amount. In ULIPs the policyholder bears most of the inves
tment risk. Since ULIPs are designed to mobilize savings, they give insurance co
mpanies an opportunity to get a large chunk of asset management business which h
as been traditionally dominated by mutual funds. ULIPs are suitable for individu
als who are already adequately insured and are reasonably
well-informed and savv
y to take active investment decisions by using the switch option that is provi
ded to a ULIP policyholder. Also policyholders with regular endowment plans who
are not satisfied with the 4-6% returns can consider taking a ULIP with a lower
equity component. It is best if insurance-seekers tread the middle path and choo
se balanced plans (with about 50-60% equity component). Ideally they need to avo
id taking the aggressive 100% equity ULIP, which could needlessly expose their a
ssets to market volatility. So if insurancesseekers/investors play their cards r
ight, they can make this marriage work.
41
WORKING OF UNIT LINKED INSURANCE PLANS UNIT LINKED PLANS
SUPER SMART KID
SmartKid offers an exclusive choice of 3 education insurance plans: SmartKid New
Unit-linked Regular Premium, SmartKid New Unit-linked Single Premium and SmartK
id Regular Premium. Take a look at the features and benefits of each plan: 1. Sm
artKid New Unit-linked Regular Premium SmartKid New Unit-linked Regular Premium
is a unit-linked plan, which enables you and your child to accumulate wealth by
virtue of the performance of the underlying market-linked instrument. Take a loo
k at the features of the plan: Premium: The minimum premium to be invested is Rs
. 10,000 per annum. After deducting premium allocation charges from the premium,
the remaining amount will be invested in a fund of your choice. Sum Assured: Th
e minimum Sum Assured that the policyholder can opt for is Term * Annual Premium
/2, subject to a minimum of Rs 1 Lac Policy term: The term of the policy will be
calculated as the difference between your child s current age and the age of yo
ur child when the policy matures. Mortality, Policy Administration charges: Thes
e and other charges will be deducted from the units in the fund. 2. SmartKid New
Unit-linked Single Premium SmartKid New Unit-linked Single Premium works in muc
h the same way as SmartKid New Unit-linked Regular Premium policy mentioned abov
e. The only different feature is the premium amount-you will be required to pay
only a single premium, which starts at as low as Rs. 50,000. Additional Features
and Benefits Common to All 3 Plans
Regular payouts: As your child approaches key educational milestones such as 12t
h standard or graduation exams, he or she will receive regular payouts, guarante
eing he or she continues to study, no matter what the circumstance. Death Benefi
t: Your child will receive the Sum Assured immediately, should something happen
to you. ICICI Prudential will pay the remaining premiums, ensuring your child co
ntinues to receive policy benefits, as always. Income Benefit Rider: You can cho
ose to add the benefits of this rider to your child s education plan. Should you
depart before your son s or daughter s education is 42
complete, you child will receive 10% of Rider Sum Assured, for the balance term
of the policy. Add-on riders: Accidental Death and Disability Rider and Waive
r of Premium Rider ensure your child stays doubly protected, at all times. You
can choose to add these to your child s education policy. Tax benefits: Premiums
you pay for a SmartKid policy are eligible for tax savings [u/s 80(C)]. Maturit
y and death benefits are eligible for tax exemptions [u/s 10(10D)]. 3. SmartKid
Regular Premium Flexible investment option: Choose the amount of premium with wh
ich you wish to safeguard your child s education. Flexible policy tenure: The te
nure of the plan will be calculated as the difference between your child s curre
nt age and his or her age at which the policy matures. Flexible premium options:
The premium will be calculated based on 3 factors: Sum Assured, policy tenure a
nd your age. Guaranteed bonus: A guaranteed bonus of 3.5% per annum is declared
for the first 4 premium paying years plus an annual vested bonus declared in sub
sequent years.
LifeLink Super
Well-deserved financial incentives, rewarding business profits and even ancestra
l money are precious amounts that you should invest immediately so they earn you
potentially higher returns in the long run. Invest in ICICI Prudential s LifeLi
nk Super policy-a single-premium unit-linked policy
that works best for investors who have in mind long-term financial goals, such a
s the education of a child or the purchase of a larger home. Apart from the pote
ntially higher returns that you can earn, LifeLink Super insures your family aga
inst misfortunes with its protective insurance cover. Read more about the featur
es and benefits of this plan, right away.
43
LifeLink Super at a glance
Minimum/Maximum Entry Age Minimum Policy Term Minimum Single Premium Minimum Sum
Assured Tax Benefit 0 years to 65 years 5 years Up to age 44: Rs. 25,000, age 4
5 and above: Rs. 50,000 Annual Premium x Term/2. Subject to a minimum of Rs. 1,0
0,000 Premium payment up to 20% of the Sum Assured is eligible for benefit under
Sec. 80C. Any amount paid to you will be eligible for tax benefits under Sec. 1
0 (10D) exemption, if premium paid in any year does not exceed 20% of the Sum As
sured.
Maximum Age at Policy Maturity 70 years
Features and benefits of LifeLink Super
2 options of Sum Assured: Choose to receive either 125% or 500% of the single pr
emium amount. Flexible policy term: Decide how long you wish to invest in this p
olicy. You can invest for a minimum of 5 years and keep your investment growing
for as long as you wish after that. Partial withdrawal of money: Withdraw funds
in installments from the 4th year onwards.
Attractive premium allocation rates: Enjoy 100% allocation for premium amounts e
qual to or greater than Rs. 5 lacs. 6 investment funds: Select among Flexi-Growt
h, Maximiser, Flexi-Balanced, Balancer, Protector, and Preserver, based on your
financial goals and risk profile. Switch benefit: Switch between funds anytime t
o maximize on market movements. 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. 4
4
Maturity benefit: Receive the Fund Value when your policy matures. Choose to tak
e this value as a single lump-sum amount or in monthly, bi-annual or annual inst
allments spread over 1 to 5 years. Death benefit: Your family receives the highe
r of Fund Value or Sum Assured should something happen to you.
Why LifeTime Super
As an individual who desires a lot from life-a car, a beautiful home and of cour
se, the comfort and contentment of your family-you would undoubtedly want to pla
n 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, w
hich offers potentially higher returns that systematically enable you to meet yo
ur long-term financial objectives. In addition, LifeTime Super also provides the
protective benefit of an insurance cover, which keeps your family secure, alway
s. Read more about the features and benefits of this plan.
LifeTime Super at a glance
45
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 R
s. 18,000 per annum Annual Premium x Term/2. Subject to a minimum of Rs. 1,00,00
0 Premium paid for the policy and critical illness benefit rider will be eligibl
e for tax benefit under Sec. 80C and 80D respectively. Any amount paid to you wi
ll 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 f
or 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 investmen
t funds: Select among Flexi-Growth, Maximiser, Flexi-Balanced, Balancer, Protect
or, and Preserver, based on your financial goals and risk profile. Systematic wi
thdrawal of money: Withdraw money in installments from the 4th year onwards. Mat
urity benefit: Receive the Fund Value when your policy matures. Choose to take t
his value as a single lump-sum amount or in monthly, bi-annual or annual install
ments. Death benefit: Your family receives the higher of Fund Value or Sum Assur
ed 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.
ROLE OF AN ADVISOR IN UNIT LINKED INVESTMENT PLANS
46
It is important for us to know that what is the role that an advisor will play.
At ICICI Prudential, you are an advisor is to 1. Provide ongoing financial advic
e for his/her clients: You are an advisor and just like a lawyer or a doctor you
advice the client about insurance and finance. 2. Identify future clients: Life
insurance is a business of contacts an the advisor constantly need to know peop
le so that his business expands. 3. Constantly make appointments: Just making co
ntacts will not be enough to develop a good life insurance business. 4. Advisor
needs to meet these contacts and thus should make appointments on constantly. 5.
Conduct financial review meetings with prospects/ clients: As an advisor it is
necessary to meet with client not only for the purpose of selling but also to re
view the need of the client and prospects. Many people would not be in for life
insurance today but as time moves they can be requiring one. Similarly an existi
ng client may also be in need of more insurance as responsibilities and liabilit
ies increase. Close sale: Ultimately success is defined as sales. The advisor sh
ould lead each appointment towards a sale and close it effectively where in the
client is happy on purchasing the insurance solution and feels satisfied with it
.
CHAPTER-4
47
RESEARCH METHODOLOGY
Research Methodology has many dimensions, it include not only research methods b
ut also considers the logic behind the methods used in the context of the study
and explains why only a particular method of technique had been used so that res
earch lend themselves to p[roper evaluations. Thus in a way it is a written game
plan for concluding research therefore in order to solve research problem it is
necessary to design a research methodology for the problem as the same may diff
er from problem to problem. Research design is the conceptual structure within w
hich the research is conducted. Its functions are to provide for the collection
of relevant evidence with minimum expenditure of effort, time and money. But, ho
w this can be achieved depends on the research purpose. In my study the research
purpose is
48
exploratory study i.e. to gain familiarity with phenomena or to achieve new insi
ghts in it. MARKET RESEARCH DESIGN : Descriptive type DATA SOURCES RESEARCH APPR
OACH RESEARCH INSTRUMENT TYPE OF QUESTIONS SAMPLE SIZE : Primary source : Survey
method : Questionnaire : Close-ended : 100 samples
MODE OF COLLECTING DATA: Respondents to be chosen randomly. SAMPLE DESIGN: Socia
l phenomenon being very vast, it becomes impossible to contact each and every in
dividual of population due to limitation of essential resources like time and mo
ney. Therefore, the study is preferably narrowed down to a representative sample
to make the study more manageable. Quota sampling is adopted in the exploratory
study. It is a non-probability study in which various insurance players are tak
en. SAMPLING UNIT: The data can be collected from primary sources. The basic pre
mises of my study are primary data but at the same time it is supplemented with
the secondary data. Sampling unit is a unit which would be considered for the pu
rpose of study to conduct the comparative study of the ICICI Prudential and othe
r insurance companies with special reference to Unit Link Plans. SAMPLING SIZE:
It refers to the number of items to be selected from the universal, to constitut
e a sample. To commence the study various insurance players are taken. HOW DID I
GO ABOUT THE PROJECT:SAMPLE SIZE A sample size of 100 customers was selected to
do this project, which was random sampling keeping in mind the basic criteria.
49
FIELD WORK The research was done for a period of 2 months in (students, governme
nt employee & other) ambala. I started with MY MARKET 100 and thereafter I used
to give cold calls from the company’s database and if seemed interested I take a
long with me the representatives of the company for further information gatherin
g. 1) Study of Secondary Data: The quickest and the most economical way for rese
archers to find possible hypothesis is to take the advantage of the work done ea
rlier and thus utilize their efforts. 2) In-depth Interviews: I used in-depth in
terviews because it attempts to influence respondents to talk freely about their
subject of interest .A formal questionnaire was made and according to which the
questions were asked to the respondents. Basic methods of collecting Primary Da
ta: 1) Questionnaire Method: The questionnaire used by me for the purpose of dat
a collection were of structured type (Non-disguised). 2) Contact Method: In orde
r to derive information from the intended organization, it was elementary for me
to search for a link which could enable me to conduct a research in that organi
zation.
OBJECTIVE OF THE STUDY The project undertaken by me as a part of my Summar Train
ing of M.B.A.course is an effort made to study the ULIP policies and activities
in ICICI PRUDENTIAL with special emphasis on unit linked products of the company
. In this era of cut throat competition, any organization needs to select and re
tain the best talent. People selected should have positive attitude, ability to
inspire others and must be dynamic.
50
The main objectives of this study are: • • • • • • Working of Unit linked Insura
nce Plans SWOT analysis of the product sold Comparative study with the competito
r. Study tax planning solutions available in the market. Study asset allocation
through insurance plans. Market interphase.
CHAPTER-5
51
COMPARATIVE STUDY WITH THE COMPETITORS
LIST:
• LifeTime Super Vs LIC BimaPlus 52
• • •
LifeTime Super Vs Birla SunLife Classic Life LifeTime Super Vs HDFC Linked Premi
erLife Vs Bajaj Allianz Unitgain Plus
LIFETIME SUPER VS LIC BIMAPLUS
Features Age Term Sum Assured
LifeTime Super LIC BimaPlus 0 – 60 years 12 - 55 years Minimum premium payment t
erm of 3years 10 years Choose your sum assured, subject to Maximum limit upto Rs
. 2 lakhs a minimum sum assured of Rs. 1 lakh Value of units (3rd year onwards)
Survival benefit
Bid Value of the fund units 53
along with maturity bonus at 5% Death benefit of the Sum Assured Higher of Sum A
ssured or value of Death during the first 6 months units. 30% of SA + value of u
nits, next 6 months - 60% of SA + value of units. Death after 1st year SA + valu
e of units. Death during the 10th year - 105% of SA + value of units. Withdrawal
benefit Partial or complete withdrawals are Premature withdrawal allowed availa
ble from the 3rd year onwards Contribution Flexible contribution Investment opti
ons Minimum: Rs. 18,000 p.a. Flexibility to increase or decrease in after one ye
ar (after applying bid-offer spread. Not specified
contribution Not available Maximiser, Balancer, Protector & Balanced, Secured &
Risk Not available
Preserver. Increase / Decrease Available. of death benefit Bonus units Top-up
Available Not Available. Available. Minimum top-up of Rs. Available (Charges: 1.
5% of the 5000. Charges - 1% of top-up. top-up) 4 free switches a year, with the
No free switches. Cost of
minimum switch amount being Rs. switching is 2% of the fund Switch Surrender val
ue 2000. value. The policy will acquire a surrender Partial surrender up to 50%
of value after 3 complete premium- bid value of units allowed after 3 paying yea
rs. The surrender value is years Initial Charge from date of 100% of the value o
f investments. commencement % Allocation of the premium Not Disclosed 18000- 49,
999: 1st year - 80%; 2nd year - 92.5% ; 3rd year onwards 96%. 50000 and above: 1
st year - 82%; 2nd year - 92.5%; 3rd year onwards Admin Charge 96%. None Not app
licable 54
Other Charges
Not applicable Not applicable The annual administrative and fund management char
ge is 2.25% for Maximiser, 2.25% for Balancer,
Fund Management 1.50% for Protector & 0.75% for Charges Preserver. 1% of the fun
d per annum
IFETIME SUPER VS HDFC LINKED Features Age Term Sum Assured LifeTime Super HDFC L
inked 0 - 60 years 18 - 60 years Minimum premium payment term of 10 - 30 years 3
years Choose your sum assured, subject to Only 5,10, 20 (age-based)
a minimum sum assured of Rs. 1 multiples are allowed as Sum Survival benefit Dea
th benefit lakh Assured. Value of units (3rd year onwards) Value of units Higher
of Sum Assured or value of Higher of Sum Assured or value available
units. of units. Withdrawal benefit Partial or complete withdrawals are Partial
withdrawal available from the 3rd year onwards
from the 3rd year onwards, provided that the Value of Units does not go below th
e Sum
Contribution Flexible contribution Investment options
Assured. Minimum: Rs. 18,000 p.a. Minimum: Rs. 10,000 p.a. Flexibility to increa
se or decrease in Available contribution. Maximiser, Balancer, Protector & 5 Pre
server. Fund OptionsBalancer, Safe
Defensive
Managed, 55
Increase / Decrease Available. of death benefit Bonus units Top-up Switch
Managed, Liquid & Growth Not available
Available Not available Available. Minimum top-up of Rs. Available 5000. Charges
- 1% of top-up. 4 free switches a year, with the Switches are free as of now. B
ut minimum switch amount being Rs. the company reserves the right 2000. to put a
charge on the switches. The policy will acquire a surrender The surrender charg
e is 25% of value after 3 complete premium- 3 paying years. years outstanding re
gular premium. No charges after 3
Surrender value
Initial Charge
years % Allocation of the premium Charges 18000- 49,999: 1st year - 80%; 2nd 1st
yr-27%, 2nd yr- 27%, 3rd yr year - 92.5%; 3rd year onwards - onwards- 1% 96%. 5
0000 and above: 1st year - 82%; 2nd year - 92.5%; 3rd year onwards 96%. None
Admin Charge
Admin charges of Rs.180 fixed
charge per annum. Other Charges Not applicable Not applicable Fund Management Th
e annual administrative and fund Investment charge of 0.80% of Charges managemen
t charge is 2.25% for the Fund Value across all the Maximiser, 2.25% for Balance
r, funds. 1.50% for Protector & 0.75% for Rider Preserver. ADBR, CIBR & MSAR ABR
& CIBR
56
SUPER PREMIER LIFE VS BAJAJ ALLIANZ UNITGAIN PLUS Features Age Term Sum Assured
Survival benefit Death benefit Super Premier Life Bajaj Allianz Unitgain Plus 18
- 60 years 0 - 60 years Premium paying term of 3 years, 5 Minimum premium payme
nt years, 7 years or 10 years. term of 3 years Sum Assured multiple is 1 - 25 ti
mes Minimum Sum Assured is 5 the annual premium Value of units Higher of Sum Ass
ured decreased by the amount of withdrawals made or Higher of Sum Assured or val
ue of units. value of units Withdrawal benefit Partial withdrawals are available
after Partial or of 3 years premiums. complete times the premium paid. Anytime
after payment of 3 full year s premiums.
the 3rd policy year and after payment withdrawals are available after Complete t
he 3rd years contribution withdrawals are available after the 1st year premium.
Contribution Flexible contribution Investment options However surrender Minimum:
Rs. 10,000 p.a. Available & Equity Index Fund, Equity Plus Fund, Debt Fund, Bal
anced Fund, Cash Fund Available penalties will apply. Minimum: Rs. 60,000 p.a. A
vailable Maximiser, Preserver. Decrease in death Available. benefit Bonus units
Top-up Switch Surrender value Balancer, Protector
Available. Not available Available. Minimum top-up of Rs. Available. Charge are
2% of 5000. Charges - 1% of top-up. the top-up amount 4 free switches a year. Th
ree free switches every year. The policy will acquire a surrender Withdrawals ar
e only allowed value from the 1st year onwards. after payment of 3 full year s 5
7
Initial Charges
% Allocation of the premium 3 year premium paying term Rs. 60.000 - Rs. 4,99,999
: 1st year: 87%; 2nd and 3rd year: 96% Rs. 5,00,000 and above: 1st year: 89%; 2n
d and 3rd year: 96% 5, 7 and 10 year premium paying term Rs. 60.000 - Rs. 4,99,9
99: 1st year: 88%; 2nd and 3rd year: 97%; 4th and 5th year: 98%;6th year onwards
: 100% Rs. 5,00,000 and above: 1st year: 90%; 2nd and 3rd year: 97%; 4th and 5th
year: 98%; 6th year onwards: 100% Admin charge of Rs. 60 / month
premiums % Allocation of the premium 1st year - 76%; 97% from year 2 onwards
Admin Charge
Annual admin charges of Rs.
20 Fund Management The annual investment charge is 1.50% 1.5% p.a. for a Equity
Plus Charges for Maximiser, 1.00% for Balancer, Fund, 1% p.a. for Equity Index 0
.75% for Protector & Preserver. Fund, No specific charges in case of Balanced Fu
nd, 0.7% p.a. for Debt Plus Fund and 0.7% in case of Cash Plus Rider ADBR & CIBR
Fund. ABR, ADBR, CI & Hospital Cash Benefit
STUDY TAX PLANNING SOLUTIONS AVAILABLE IN THE MARKET
TAX BENEFITS ON INSURANCE AND PENSION 58
Life insurance and retirement plans are effective ways of saving taxes. The tax
breaks that are available under various insurance and pension policies are descr
ibed below: • • • • Life insurance plans are eligible for deduction under Sec. 8
0C Pension plans are eligible for a deduction under Sec. 80CCC Health riders are
eligible for deduction under Sec. 80D The proceeds or withdrawals of life insur
ance policies are exempt under Sec 10(10D), subject to norms prescribed in that
section. Tax Rates for Individuals The rates of income tax for FY 2007-08 are as
follows:
Total Income (Rs.)
Rate of tax Senior citizen Women below 65 Nil Nil Nil Nil 20% 30% years Nil Nil
10% 20% 20% 30%
Others Nil 10% 10% 20% 20% 30%
Upto Rs 1,00,000/Above Rs 100,000/- to 145,000/Above Rs 145,000/- to 150,000/Abo
ve Rs 150,000/- to 195,000/Above Rs 195,000/- to 250,000/Above Rs 250,000/-
Surcharge on Income Tax: In case where the Total Income exceeds Rs 10,00,000, th
ere would be a surcharge @ 10%. Education Cess on Income Tax: Education Cess @2%
will be payable on the amount of income tax (including surcharge). Benefits und
er 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 allocate
d 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 59
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 Ap
ril 1 2003 and if the premium paid in any of the years during the term of the po
licy is more than 20% of the sum assured.
60
CHAPTER-6
61
DATA ANALYSIS & FINDINGS
1). Are you interested in products offered by the ICICI PRUDENTIAL? Yes No Will
think 61% 22% 17%
17%
Yes No
22% 61%
Will think
INTERPRETATION The good thing is that atleast the corporates were quite eager to
find out what ICICI PRUDENTIAL has to offer whereas the major 39 % of the corpo
rates were not even interested in the products as they are quite satisfied by th
e LIC and they are not in breaking their long relationship with them. The privat
e players will have to play a long battle in order to ensure that they are serio
us player in the market. Basically corporates think that its too early to invest
in private companies as they have just entered the scene and they are unsure of
the security they will have about their investment.
62
2). Are you satisfied with your present insurer?
YES No
65% 35%
35%
Yes No
65%
INTERPRETATION
Here is where the challenge is. Inevitably most of the players are very satisfie
d with their present insurer which makes it more tough for the private players t
o attract the corporates. The remaining 35 % are also not very dissatisfied by t
he services but they are just open to new avenues and are looking forward that p
rivate companies come with good offers so that they may shift to them. Thus priv
ate players will have to be very proactive and in this regard since LIC is the l
eader and ICICI PRUDENTIAL is lagging behind its competitors in terms of competi
tion.
3). Where would you like to insure if given chance? 63
LIC ICICI BAJAJ ALLIANZ TATA AIG SBI KOTAK MAHINDRA
60 50
60
-
60 10 5 15 8 2
NO OF PEOPLE
40 30 20 10 0
LIC SBI TATA AIG ICICI
15 8 10 5 2
BAJAJ
KOTAK MAHINDRA
COMPANIES INTERPRETATION
Thus we see that the companies are comfortable in having business with govt. own
ed companies as they feel its safe & secure to have business with them which is
followed by SBI as it is the biggest bank and then followed by TATA AIG as the n
ame TATA is associated with it which commands huge premium in the market . Where
as in the case of ICICI PRUDENTIAL the figures represent mediocre performance af
ter compelling and coxing the corporates and creating a strong impression whethe
r they feel interested in doing business with the company.
4). What is people’s main concern while taking a insurance policy (ULIP)? 64
A) Security B) Returns C) Tax rebate
40% 28% 32%
50% 40% 30% 20% 10% 0% SECURITY RETURNS FACTOR TAX REBATE
%AGE
Series1
INTERPRETATION People invest in insurance mainly because of security concern.
5). Are you aware of LifetimeSuper introduced by ICICI Prudential limited?
65
Yes No
58% 42%
%AGE OF PEOPLE
80% 60% 40% 20% 0% YES RESPONSE NO Series1
INTERPRETATION
The awareness level among the corporate about ICICI PRUDENTIAL offering services
is very low and the company needs to work on it. Today is the world of marketin
g thus it is recommended that company should become more media friendly by adver
tising more through television channels, radio, newspapers, magazines, journals
&editorials.
66
CHAPTER-7
67
LIMITATIONS
• The geographical area was very much limited to residential area & so the resul
ts are not particularly reflection of the current behavior. • • Biases and non-c
ooperation of the respondents. Due to limited time period and constrained workin
g hours for most of the respondents, the answers at times were vague enough to b
e ignored. • Most of the people in India take their policies in the period prece
eding March(for tax saving purposes) & so the response to initial contacts were
not all encouraging and that has been the primary reason in the inability to qua
ntify the results large enough so as to reduce any relevant outcomes. • • Most o
f the results that are spelt out have been of qualitative aspects. People are no
t interested in giving personal opinion.
68
69
RECOMMENDATIONS
• • More emphasis should be on promotional activities. Plenty of advertisement s
hould be done through T.V, Newspaper and Radio as these media’s are having maxim
um recall value. • • Total financial planning and advice should be given to ever
y customer. More business opportunity seminars should be conducted to make peopl
e aware of the offer given. • The company should quite frequently send their age
nt to the customer so that they should be aware of the latest offer. • The compa
ny should attempt to open more and more of its branches in the country so as to
promote their product publicity.
70
71
CONCLUSION
LIC enjoys credibility over other private players in the industry People look fo
r security over returns in market linked plans .Lifetime is the most popular pro
duct among the people who are aware about ICICI Prudential’s products. People ar
e now showing more interest in ULIP as compared to some of the traditional plans
. ICICI PRUDENTIAL has to counter the distribution network of LIC .The product p
rofile of ICICI PRUDENTIAL is not very comprehensive
72
73
BIBLOGRAPHY
• • • •
www.iciciresearchcenter.org www.tata-aig.com www.iciciprulife.com www.personalfn
.com
74
75
ANNEXURE
Do you have any life insurance policies? Yes No
If Yes: Name of the Company Name of the plan Term of plan ________________ _____
____________ _________________
Annual Amount of premium _________________
1. Are you satisfied with present insurer? A) YES 2. A) Security B) Returns C) T
ax saving D) Others please specify_________ 3. Are you aware of Unit Linked Insu
rance Plans offered by various companies in India? A) ICICI C) TATA AIG E) LIC G
) MAX NEW YORK B) OM KOTAK MAHINDRA D) BAJAJ ALLIANZ F) SBI H) BIRLA SUNLIFE B)
NO Which are the main issues that you take into consideration while purchasing a
ny life insurance policy?
76
4. Do you know how a Unit Linked Insurance Plan works? A) YES B) NO
5. Can you please highlight risk attached with them? A) HIGH B) MODERATE C) LOW
6. What is your perception about the Unit link insurance plans, are they give yo
u a sense of security? A) YES B) NO 7. Are you aware of Lifetime pension plan in
troduced by ICICI Prudential limited? A) YES B) NO 8. If you are given a choice,
which one you take: A) ICICI C) TATA AIG E) LIC A) Fewer premiums B) More retur
ns C) Complementary gifts 10. Are you interested in buying products of ICICI Pru
dential? A) YES B) NO B) OM KOTAK MAHINDRA D) BAJAJ ALLIANZ F) SBI
9. What other plans or flexibility you expect from Insurance companies?
77