A Comparative Analysis of ULIP of Bajaj Allianz Life Insurance Co.

Ltd with Mutual Fund
MINI PROJECT REPORT

Submitted by RAJEEV JOSEPH REG.NO:08BA020 1st Year MBA KARUNYA UNIVERSITY

Under the guidance of Ms. P.M. ANUSHIA
LECTURER

KARUNYA SCHOOL OF MANAGEMENT KARUNYA UNIVERSITY COIMBATORE – 641114 2008-2010

DECLARATION

I, Rajeev Joseph, do hereby declare that this project work entitled “A Comparative Analysis of ULIP of Bajaj Allianz Life Insurance Co. Ltd with Mutual Fund” is an outcome of my study and is submitted in partial fulfillment of the requirement for the award of the degree of Master of Business Administration, Karunya University.

I also declare that this report has not been submitted by me fully or partially for the award of any degree, diploma, title, recognition or any other fellowship of any other university before.

Place: Changanacherry Date: 21-06-2009 RAJEEV JOSEPH

ACKNOWLEDGEMENT

Initially, let me thank the almighty God for guiding me all through the project work. I express my deep and sincere gratitude to Ms. P.M. Anushia, Faculty guide for providing the necessary assistance for the project. I sincerely acknowledge my gratitude to Mr. Justin Paul, Branch Manager of Bajaj Allianz Life Insurance Company Ltd, Changanacherry branch and Mr. Biju Sebastian ,Sales Manager opportunity to do this project. I also owe my sincere thanks to all the staff in Bajaj Allianz Life Insurance Company Ltd, Changanacherry branch, and the faculties of the Department of Business Administration, KARUNYA UNIVERSITY for their valuable guidance and suggestion in the preparation of this report and completing the same successfully. for giving me an

CHAPTER 1

CONTENT Executive Summary Introduction Objectives Limitation

PAGE No: 1 2 3 3 4 11 15 22 41 71 73 74 78

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Indian Insurance Industry Industry Profile Unit Linked Insurance Policy (ULIP) Mutual Fund

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Data Interpretation and Analysis Findings and Suggestion Conclusion and Recommendations Bibliography

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Annexture

Another option for investment available is Mutual Fund. Mutual fund. Customers always prefer to invest in a good option and in a company which is market leader. most of the insurance companies are providing more value – added services with the basic insurance operation. So while investing people tend more to words mutual fund as they are providing more returns than Insurance also. etc. Now there are many options available for investment like life Insurance. Total Investment scenario is changing. while investing in any Investment option investor checks whether his money is safe or not. After survey and analysis I came to know that most of the people go for ULIP insurance policies to cover the risk of life. Therefore. Mutual funds provides good returns but investments are directly exposed to risk. Coimbatore. Real estate. in past people were not interested in investment because there were no good options available for investment. Mutual Funds are providing good returns. student(MBA) of Karunya University. Today people want more services and more return on their investment. And people are aware about the tax benefits they get for insurance policies. Equity market. So. The project was taken to know about. and invest it in a good Portfolio but there is big portion of customers have taken the policies to save the taxes.Which gives it highest business and customers. As in ULIP returns are related to stock market but they are having some insurance benefit and IRDA regulates the investment. what are the main aspects in Bajaj Allianz Life Insurance Company. Mutual fund companies are providing more liquidity. and its USP (Unique Selling Preposition). with a good investment portfolio. .EXECUTIVE SUMMARY “A comparative Analysis of ULIP plans of Bajaj Allianz Life Insurance with mutual funds in Changanacherry Branch” an analysis to be done be by Rajeev Joseph.

The Above problem arises because every life insurance company has their products having different positive and negative aspects. Life Insurance is booming sector in today’s economy. Ltd. INTRODUCTION To make comparison of ULIP plans with Mutual funds in Bajaj Allianz Life Insurance Co.Many people are getting the tax benefits in ULIP. debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in . A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. which gives the right way to save the money and earn good profit by invested premium. By doing this type of study in this Insurance sector and looking at the vast scope and opportunity to study this booming field of Life Insurance and the growing awareness among the public regarding insuring their life through Life insurance policies as well as the growing contribution of Insurance in GDP of country with the number of private players making entrance in this booming industry of Insurance. and to Create awareness about Unit Linked Insurance Plan (ULIP) Benefits. Because in past people were taking insurance policies for protection tool only. The money thus collected is then invested in capital market instruments such as shares. So this insurance company is providing more value – added services with the basic insurance operation. In present scenario insurance sector is providing more services with the basic life insurance. Bajaj Allianz Life Insurance has number of products. Today people want more services and more return on their investment. In Mutual Fund they have to invest their money in tax saving funds to get the tax benefit. So the responsibilities of the insurance companies have been increased as compare to the past. The overall goal of this project was to create awareness about investments.

professionally managed basket of securities at a relatively low cost.proportion to the number of units owned by them. • • • . • To find the significance difference between customers of different income with that of investment mode. Narrow minded thinking of middle class people as investment is not their cup of tea. OBJECTIVES • To understand the reason for which customers prefer ULIP as one of the best insurance investment mode rather than Mutual fund. LIMITATIONS • The middle class people do not know basic concept of ULIP so creating awareness is a big challenge for me. The findings of my research is from a small sample size. As ULIP and Mutual fund both are related to share market. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. • To Compare Investment Options of customers in ULIPs and Mutual Funds. Many customers are thinking that investment in share market is very risky.

The Bombay Mutual Life Insurance Society started its business in 1870. insurance remained an urban phenomenon.• • A general preference to LIC and SBI over private players. INDIAN INSURANCE INDUSTRY The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. on the other hand. The General insurance business in India. Indian companies strengthened their hold on this business but despite the growth that was witnessed. By 1938 there were 176 insurance companies. 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. Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. the first general insurance company established in the year 1850 in Calcutta by the British. This was in conformity with the Government's chosen path of State lead planning and development. can trace its roots to the Triton (Tital) Insurance Company Limited. Several frauds during 20's and 30's sullied insurance business in India. Hesitations on the part of respondents to disclose financial information. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. It was the first company to charge same premium for both Indian and non-Indian lives.The (non-life) insurance . The insurance business grew at a faster pace after independence. The Oriental Assurance Company was established in 1880. 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. The Government of India in 1956.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.business continued to thrive with the private sector till 1972. . 1928 : :The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. nearly 107 insurers were amalgamated and grouped into four companies. National Insurance Company Limited. 1972. and United India Insurance Company Limited. New India Assurance Company. Some of the important milestones in the life insurance business in India are: 1850: Non life insurance debuts with triton insurance company. 1870: :Bombay mutual life assurance society is the first Indian owned life insurer 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. New India Assurance Company Limited. The general insurance industry was nationalized in 1972.The general insurance business was nationalized after the promulgation of General Insurance Business (Nationalizations) Act. The post-nationalization general insurance business was undertaken by the General Insurance Corporation of India (GIC) and its 4 subsidiaries: Oriental Insurance Company Limited. Their operations were restricted to organized trade and industry in large cities. OrientalInsurance Company and United India Insurance Company.National Insurance Company. These were subsidiaries of the General Insurance Company (GIC). With this.

on the other hand. 1972 : The General Insurance Business (Nationalization) Act. viz. the first general insurance company established in the year 1850 in Calcutta by the British. the New India Assurance Company Ltd. 1957 : General Insurance Council.. a wing of the Insurance Association of India. can trace its roots to the Triton Insurance Company Ltd.. 1956. and the United India Insurance Company Ltd. 1968 : The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. the National Insurance Company Ltd. LIC Act.. the first company to transact all classes of general insurance of India. the Oriental Insurance Company Ltd. set up. . with a capital contribution of Rs.1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. frames a code of conduct for ensuring fair conduct and sound business practices. The General insurance business in India. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. GIC incorporated as a company. LIC formed by an Act of Parliament. 1972 nationalized the general insurance business in India with effect from 1st January 1973. 5 Crore from the Government of India. 107 insurers amalgamated and grouped into four companies’ viz.

was formed to evaluate the Indian insurance industry and recommend its future direction. UK . USA Aviva International Holdings Ltd.1993: Malhotra Committee. South Africa Sun Life. Om Kotak Life Insurance Co.. Ltd.ICICI potential and HDFC standard Life insurance are the first private insurers to sell a policy. Ltd. Birla Sun Life Insurance Co. The insurance market have witnessed dynamic changes which includes presence of a fairly large number of insurers both life and non-life segment. ING Vysya Life Insurance Co. Ltd. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. Standard Life Assurance. AVIVA Sahara Life Insurance Co. Reliance Life Insurance Co. For years now. Most of the private insurance companies have formed joint venture partnering well recognized foreign players across the globe.V. Ltd. Ltd. LIFE INSURANCE COMPANIES Sl. Canada American International Assurance Co. Ltd. 2001: Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks allowed to sell insurance plans. Ltd.N. 2000: IRDA starts giving licenses to private insurers:Kotak Life Insurance . Ltd. No. USA BNP Paribas Assurance SA. Tata-AIG Life Insurance Co. Foreign Partners Standard Life Assurance.. the private players are active in the liberalized environment. UK Old Mutual. USA Prudential . Ltd. INSURANCE MARKET –PRESENT The insurance sector was opened up for private participation seven years ago. Allianz Bajaj Life Insurance Co. Metlife India Insurance Co. SBI Life Insurance Co. Netherlands Allianz. Ltd.. 1 2 3 4 5 6 7 8 9 10 11 12 13 Insurer HDFC Standard Life Insurance Co. UK New York Life. Germany Metlife International Holdings Ltd. Ltd. France ING Insurance International B. UK ICICI-Prudential Life Insurance Co.. Malhotra. 1997 : Insurance regulator IRDA set up.headed by former Finance Secretary and RBI Governor R.

New premium collection for the company was Rs 4. Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52% and its market share went up to 6. Netherlands HSBC.680 crore in FY2007-08. UK Religare. an increase of 87% over last year. Ltd. Ltd. France Pantaloon Retail Ltd. the company ranked 6th in 2007-08. has dropped from 74% a year before. Birla Sun Life Insurance Co Ltd market share of the company increased from 1. .11% in 2007-08.88% and it ranks 6 th among the insurance companies and 5th amongst the private players. South Africa AXA Holdings. It experienced growth of 58% in new business premium. Life Insurance Corporation of India Sanlam. Bharti AXA Life Insurance Co.93% in 2007-08 from 6.66 crore in 200708. HDFC Standard Life Insurance Co Ltd with an income of Rs 2. DLF Pramerica Life Insurance Co. registering a year-on-year growth of 64%. Ltd..792.22% to 2. It now ranks 5th in new business premium and 4th in number of new policies sold in 2007-08. mainly owing to entry of private players with innovative products and better sales force.97% in 2006-07.14 15 16 17 18 19 20 21 Shriram Life Insurance Co. with total market share of 7. USA TOP 10 LIFE INSURANCE COMPANIES IN INDIA LIC (Life Insurance Corporation of India) still remains the largest life insurance company accounting for 64% market share.76 crore and its market share went up to 2.23% a year back. however. Its market share is 2. Netherlands Prudential of America. Generali. (SMNPL).98% in 2007-08 form 5. Future Generali India Life Insurance Company Ltd IDBI Fortis Life Insurance Company Ltd. Ltd. SBI Life Insurance Co Ltd in terms of new number of policies sold.792. accounting for increase in market share to 8.66% in 2006-07. Aegon Religare Life Insurance Company Ltd. The company ranked second (after LIC) in number of policies sold in 2007-08. ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance company in India. Italy Fortis.36%.96% from 1. Reliance Life Insurance Co Ltd Total collected was Rs 2. Sain Marketing Network Pvt. Its share. Canara HSBC OBC Life Insurance Company Ltd.

It has presence in more than 3.4% 2.4% 1.4% 3.1% 13. Aviva Life Insurance Company India Ltd ranking dropped to 10th in 2007-08 from 9th last year. moving from the 11th position to 9th. Aviva Life Insurance plans to increase its capital base by Rs 344 crore. Total new business generated was Rs 641. MARKET SHARE OF VARIOUS LIFE INSURANCE COMPANIES IN INDIA Here is the market share of various Life Insurance Companies in India at the end of FY2008. Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08. the company reported growth of 80%. Company Name LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Birla Sunlife Reliance Life Max New York OM Kotak AVIVA Tata AIG MetLife ING Vysya Market Share (in %) 48.9% 1.19% in 2007-08.5% 1. It captured a market share of 1.2% .8% 1.83 crore as against Rs 387.4% 1.1% 3.3% 6.51 crore.2% 4.000 locations across India via 221 branches and close to 40 banc assurance partnerships.Max New York Life Insurance Co Ltd has reported growth of 73% in 2007-08.7% 10.

• Health insurance is poised to become the second largest business for non-life insurers after motor insurance in next three years. Moreover.2% BOOMING INSURANCE MARKET IN INDIA With a huge population base and large untapped market. with new players significantly enhancing product awareness and promoting consumer education and information. • Home insurance segment is set to achieve a 100% growth as financial institutions have made home insurance obligatory for housing loan approvals.000 Crore by 2010-11. Total life insurance premium in India is projected to grow Rs 1. Based on this analysis. • With the entry of several low-cost airlines.Shriram Life Bharti Axa Life 0. The strong growth potential of the country has also made international players to look at the Indian insurance market. the report gives a future forecast of the market that is intended as a rough guide to the direction in which the market is likely to move. the Indian aviation insurance market is all set to boom in a big way in coming years. saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players This research report will help the client to analyze the leading-edge opportunities critical to the success of insurance industry in India. This impressive growth in the market has been driven by liberalization. along with fleet expansion by existing ones and increasing corporate aircraft ownership. .3% 0. • Total non-life insurance premium is expected to increase at a CAGR of 25% for the period spanning from 2008-09 to 2010-11.230. insurance industry is a big opportunity area in India for national as well as foreign investors. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 3234% annually.

managing assets worth over a Trillion(Over INR 55.• A booming life insurance market has propelled the Indian life insurance agents into the ‘top 10 country list’ in terms of membership to the Million Dollar Round Table (MDRT) — an exclusive club for the highest performing life insurance agents. customer focused market leader. 7 cr.86. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world. customer delight is the guiding principle. supported by the best technology.37 1.443 New Business in FY Rs. one of the largest Insurance Company and Bajaj Finserv. . VISION To be the first choice insurer for customers To be the preferred employer for staff in the insurance industry.000 Crores). Rs.965 1. 180 cr.15. 63.Allianz SE has over 115 years of financial experience and is present in over 70 countries around the world. At Bajaj Allianz Life Insurance. of policies sold 21. MISSION As a responsible. Accelerated Growth Fiscal Year 2001-2002(6 mths) 2002-2003 2003-2004 No. Rs. To be the number one insurer for creating shareholder value.00. we will strive to understand the insurance needs of the consumers and translate it into affordable products that deliver value for money.3 cr. Their business philosophy is to ensure excellent insurance and investment solutions by offering customized products. COMPANY PROFILE Bajaj Allianz Life Insurance is a union between Allianz SE.

RESULTS FOR CURRENT FY TILL 31ST DECEMBER 2008 The Gross Written Premiums (GWP) for the nine months ended on 31st Dec 2008.100 crore mark in profit before tax in the last two years. Operating expenses came down to 20% of GWP for the current period of nine months ended on 31st Dec 2008 as compared to 26% for the corresponding period of previous year. The policyholder surplus is Rs 15514 lacs (corresponding period of previous year Rs 18681 . The Company posted a profit of Rs 364 lacs for the period ended 31st Dec 2008 as compared to a profit of Rs 5358 lacs in the corresponding period of the previous year.2004-2005 2. 6. The Company has an authorized and paid up capital of Rs 110 crores. 2005-2006 7. which is also the highest by any private insurer. As on 31st March 2009. The company ranked second (after LIC) in number of policies sold in 2007-08. 2006-2007 20. 857 cr.685 Rs.36%. is Rs 6726 crores as compared to Rs 5219 crores in the corresponding period of the previous year . 2001 to conduct General Insurance business (including Health Insurance business) in India.81.302 cr.674 cr. which was 27% during nine months ended on 31st Dec 2007. 3003 crores as compared to Rs. Commission on new business premium. SE.217 Rs. came down to 20% during the current period.79. with total market share of 7. 2007-2008 37. New Business premium for the nine months ended on 31st Dec 2008 is Rs.189 Rs. Bajaj Allianz General Insurance maintained its premier position in the industry by achieving growth as well as profitability. The company garnered a premium income of Rs. Bajaj Allianz has made a profit before tax of Rs.717 cr. achieving a growth of 11 % over the last year. 149. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration on 2nd May.growth of 29%. 2.88. Bajaj Finserv Limited holds 74% and the remaining 26% is held by Allianz.44. 2866 crore. The profit after tax was Rs. 4.8 crore and has become the only private insurer to cross the Rs. 3780 crores in the corresponding period of previous year.742 Rs.95 crores.

496). The company ranked second (after LIC) in number of policies sold in 2007-08.36%. During the period ended 31st Dec 2008.764 staff at 31st March 2008. the Company employed on roll 22.62.495 (corresponding period of the previous year 23. As on 31st Dec 2008.129 staff as against 20. the company has been able to not only reduce commission but also operating expenses. The share capital (including share premium) is Rs. The solvency margin of the company continues to be very strong. no additional capital has been infused.lacs) and the shareholders’ loss stands at Rs 15150 lacs (corresponding period of previous year: Rs 13323 lacs). Despite challenging environment. The solvency as on 31 st Dec 2008 stands at 261% (required solvency is 150%). with total market share of 7. 1211 crores as on 31st December 2008. Policies in force as on 31 st Dec 2008 is around 70 lacs. Number of policies underwritten during the nine months ended 31st Dec 2008 were 18.138 offices as on 31 Dec 2008.The Company operates out of 1.08. .

PRODUCTS PROFILE Unit Linked Plan • New family gain • New unit gain plus • New unit gain premier Traditional plan • Invest gain • Cash gain • Child gain Retirement Solutions • Swarna visranthi • New unit gain easy pension plus Health Plan • Care first • Health care Term Plan • Risk care • Term care .

UNIT LINKED INSURANCE POLICY (ULIP) UNIT LINKED INSURANCE POLICY (ULIP) A unit linked insurance policy is one in which the customer is provided with a life insurance cover and the premium paid is invested in either debt or equity products or a .

However. the chances of earning a decent return are high.00. However.50. the risk charge (mortality rate) varies with age. The payment period too can be regular or variable. the charges paid in these schemes in terms of the entry load. Every insurance company has four to five ULIPs with varying investment options. In other words. administrative fees. there are some schemes in which the policyholder receives the sum assured plus the value of the investments. Just as in the case of mutual funds. 1.000 and Proceeds from ULIPs are tax-free under section 10(10D) unlike those from a mutual fund which attract short term capital gains tax.As in all insurance policies. in that sense. his nominees would normally receive an amount that is the higher of the sum assured (insurance cover) or the value of the units (investments). Tax benefits The premiums paid for ULIPs are eligible for tax rebates under section 80 which allows a a maximum of Rs.000 premiums paid for taxable income below Rs 8. The risk cover (insurance cover) can be increased or decreased. for an individual the risk . underwriting fees. schemes have been tailored to suit different customer profiles and. buying and selling charges and asset management charges are fairly high and vary from insurer to insurer in the quantum as also in the manner in which they are charged. buyers who are risk averse can buy into debt schemes while those who have an appetite for risk can opt for balanced or equity schemes. regular or variable.combination of the two. Key features Premiums paid can be single. it enables the buyer to secure some protection for his family in the event of his untimely death and at the same time provides him an opportunity to earn a return on his premium paid. In the event of the insured person's untimely death. Moreover. offer a great deal of choice.However. The advantage of ULIP is that since the investments are made for long periods. charges and conditions for withdrawals and surrender.

high premiums attract lower charges and vice versa. a minimum of 15 per cent. The maturity benefit is not typically a fixed amount and the maturity period can be advanced (early withdrawal) or extended. Subsequent charges: Usually lower than first-year charges. the sum at risk (sum assured less the value of investments) reduces and so the risk charges are lower. However. The policyholder can switch between schemes (for instance. The investment risk is transferred to the policyholder. Fund management expenses and the brokerage are built into the daily net asset value. and around 1. The value would be high or low depending on the market conditions during the period of the policy and the performance of the fund manager. part equity). Asset management fees: Fund management charges vary from 0. However. Charges can be as high as 70 per cent if the scheme affords a lot of flexibility. There could be policies that allow the policyholder to remain invested beyond the maturity period in the event of the maturity value not being satisfactory.6 per cent to 0. balanced to debt or gilt to equity). balanced funds (part debt. growth funds (equities) or bonds (corporate bonds). For instance.5 per cent for an equity-oriented scheme. POINTS TO REMEMBER ABOUT ULIP First-year charges: Usually. if there is an increase in the value of units due to market conditions. These charges are normally deducted on a monthly basis from the unit value. Investments can be made in gilt funds (government securities).The maturity benefit is the net asset value of the units.charge is always based on the age of the policyholder in the year of commencement of the policy. some insurers charge higher fees in the initial years and lower them significantly in the subsequent years. . Risk charges: The charges are broadly comparable across insurers.75 per cent for a money market fund. Administration charges: This ranges between Rs 15 per month to Rs 60 per month and is levied by cancellation of units and also depends on the nature of the scheme. money-market funds. Thus there is no capital protection on maturity unless the scheme specially provides for it.

This can only give you some indication about the credibility of the fund manager because past performance is no guarantee to future returns. your pension contribution will get deducted from your taxable income. Some insurers don't charge anything. Surrender value of units: Insurers levy certain charges if the policy is surrendered prematurely. In other words. it is important not to go only by the features or the cost advantages of schemes but by the parentage of the insurer as well. Since insurance is a product. 60 per cent in the second year. the higher the initial years' expenses the longer it takes for the policy to outperform its peers with low initial years' costs and slightly higher subsequent year expenses. But there are certain advantages in joining a pension plan.Switching charges: Some insurers allow four free switches in every year but link it to a minimum amount. Top-ups: Usually attracts 1 per cent of the top-up amount. This levy varies between insurers and could be around 75 per cent in the first year. . Others allow just one free switch in each year and charge Rs 100 for every subsequent switch.000 is eligible for tax deduction under section 80CCC. contribution to pension funds upto Rs 10. Fund performance: You could check out the performance of similar schemes (balanced with balanced. 40 per cent in the third year and nil after the fourth year. Top-up normally goes directly into your investment account (units) unless you specifically ask for an increase in the risk cover. Comparing schemes based on costs is a fairly complex exercise. Look at NAV performance over a period of at least two to three years. Retire unhurt Pension plans are essentially tailored to meet old age financial requirements. First of all. As a rule. which entails a long-term commitment on the part of the insurer. especially in insurance products where the emphasis is on long-term performance (10 years or more). equity with equity) across insurance companies.

Usually. Besides. units equivalent to the charges are deducted from his portfolio. the exact amount of premium being Rs 50.both conventional and unit-linked. .000 and 2 per cent for the remaining Rs 30. In both cases you pay a certain premium amount for a specified length of time. then your tax savings will be that much. For the remaining. in a ULIP you receive the value of the investment in your individual account. For the remaining nine years a 3. the sum assured works out to Rs 532.000 and 3 per cent for the remaining Rs 30. Then. He wants to invest Rs 50.5 per cent (equity) and brokerage are also charged.032. Based on this premium. You can choose to pay the premium for five to 30 years. an administration charge (7 per cent for the first Rs 20. This cost is built into the calculation of net asset value.000. The charges in the first year include a 14 per cent sales charge. While in a conventional scheme. you receive onethird of the value of the accumulated amount as a lump-sum payment. the minimum entry age is 18 years and the maximum age is 60 years. liable to pay to a 30. your money is managed through the insurer's pooled investment account and you are entitled to bonuses every year. you can buy annuities either from the existing insurer or any other insurer. All life insurance companies offer pension products .000) are levied in addition to mortality charges.000 a year for 10 years in an equity-based scheme. Fund management fee of 1.So if you are in the top tax bracket.000) and underwriting charges. he is allotted units in the scheme. Based on the current NAV of the plan that Sara chooses to invest in. When the policy matures. HOW DOES ULIP WORK Sara is a thirty-year old who wants a product that will give him market-linked returns as well as a life cover. In a ULIP you have the flexibility to choose between a conservative scheme or an aggressive scheme with high allocation to equities.6 per cent tax. mortality charges or the charges for the life cover are also deducted. which are deducted monthly.5 per cent sales charge and an administrative charge of 4 per cent (for the first Rs 20. Pension policy imposes huge penalties for early termination.

24.that is. after 10 years .400. the value of units at the end of the ninth year would be Rs 621.200. the value of investment would be Rs 510. assuming the growth rate in the market value of the units to be 10 per cent.On maturity .000 or the market value of the units whichever is higher. Sara would receive Rs 7.Sara would receive the sum assured of Rs 532. RISKS ASSOCIATED WITH ULIPS ULIPS as the name suggests are directly linked with the investments made by the insured. the beneficiaries would get Rs 621.000 or the market value of the units whichever is higher. Assuming a growth rate of 10 per cent per annum. Assuming the growth rate in the market value of the units to be 6 per cent per annum Sara would receive Rs 581.900. In case of Sara's untimely death at the end of the ninth year. No additional tax burden for those investing mainly in debt unlike in MFs. his beneficiaries would receive the sum assured of Rs 532. Though he does not have a direct say in this but he does offer his choice in the form of investment. Assuming the growth rate in the market value of units is 6 per cent per annum. .900. • Best suited for medium risk taking individuals who wish to invest in equity and debt funds (at least 40% or higher exposure to debt).000 as it is the sum assured. ADVANTAGES OF ULIP • Can easily rebalance your risk between equity and debt without any tax implications.500. his family will get Rs 532. However. Hence.

ULIPs were offering a good rate of return. The reality is that most of the ULIPs take more than 5 years to break even. where the fund would be compared with benchmarks. would have to look at quarterly statements. therefore. Policies where the costs are 65 per cent and upwards have not even recovered the principal despite the strongest bull market we have ever witnessed. At present. MUTUAL FUND . but now with a sudden downfall of the stocks. this may not be a true representation of the NAV. for example. ULIPs are bound to become negative investments. However. since there is no benchmark to measure one fund against the other.With stock markets soaring high a few months back. 55 per cent in equity and 45 per cent in debt. a policy-holder cannot understand the growth of his investments vis-à-vis other funds in the market. liquid and equity investments. Usually a policy-holder could ask his investment in a ULIP to be. An investor. as the ULIP could be a mix of debt. These components can be mixed according to his risktaking ability.

By pooling money together in a mutual fund. . But the biggest advantage to mutual funds is diversification. investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (you don't have to figure out which stocks or bonds to buy).INTRODUCTION OF MUTUAL FUNDS: A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities (usually stocks or bonds). When you invest in a mutual fund. you are buying shares (or portions) of the mutual fund and become a shareholder of the fund.

The money thus collected is then invested in capital market instruments such as shares. Professional managers manage the affairs for a fee. debentures and other securities.ACCORDING TO AMFI (ASSOCIATION OF MUTUAL FUND OF INDIA): A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. Value of the portfolio and investors’ holdings. The funds are invested in a portfolio of marketable Securities. professionally managed basket of securities at a relatively low cost. alters with . The flow chart below describes broadly the working of a mutual fund. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified. CHARACTERISTICS OF A MUTUAL FUND: • • • • • Investors own the mutual fund. reflecting the investment objective. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them.

2. LowCosts: Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage. 3. Diversification: Mutual Funds invest in a number of companies across a broad cross section of industries and sectors. you can get your money back promptly at AssetValue (NAV) related prices from the Mutual Fund itself.• Change in market value of investments. custodial and other fees translate into lower costs for investors. Return Potential: Over a medium to longterm. ADVANTAGES OF MUTUAL FUNDS: The advantages of investing in a Mutual Fund are: 1. Professional Management: You avail of the services of experienced and skilled professionals who are backed by a dedicated investment research team which analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme.With close-ended schemes. Liquidity: In open-ended schemes. 6. 5. Mutual Funds save your time and make investing easy and convenient.You achieve this diversification through a Mutual Fund with far less money than you can do on your own. 4. Convenient Administration: Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. delayed payments and unnecessary follow up with brokers and companies. .

you can sell your units on a stock exchange at the prevailing market price or avail of the facility of repurchase through Mutual Funds at NAV related prices which some close-ended and interval schemes offer you periodically. Transparency: You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme. 9. Flexibility: Through features such as Systematic Investment Plans (SIP). DISADVANTAGES OF MUTUAL FUNDS: · No Guarantees: No investment is risk free.The operations of Mutual Funds are regularly monitored by SEBI. Choice of Schemes: Mutual Funds offer a variety of schemes to suit your varying needs over a lifetime. the proportion invested in each class of assets and the fund manager’s investment strategy and outlook. 10. 7. you can systematically invest or withdraw funds according to your needs and convenience. 8. Investors encounter fewer risks when they invest in mutual funds than when they . no matter how balanced the portfolio. Well Regulated: All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. the value of mutual fund shares will go down as well. If the entire stock market declines in value. Systematic Withdrawal Plans (SWP) and dividend reinvestment plans.

In mutual fund also there is certain amount of risk-return factor associated according to the investment option these are as follows. you will pay taxes on the income you receive. you will pay a sales commission if you buy shares in a Load Fund. you forego management risk. . Even if you don't use a broker or other financial adviser. even if you reinvest the money you made. If the manager does not perform as well as you had hoped. Closed-end or Open-end Open-end Funds: An open-end fund is one that has units available for sale and repurchase at all time. A measurement of an option position or premium in relation to the underlying instrument. · Fees and commissions: All funds charge administrative fees to cover their day-today expenses. · Taxes: During a typical year. An investor can buy or redeem units from the fund itself at a price based on the Net Asset Value (NAV) per unit. or financial planners. However. if you invest in Index Funds. most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. because these funds do not employ managers. RISK Equity Balanced Debt High Medium Low RETURN High Medium Low TYPES OF MUTUAL FUNDS: I. · Management risk: When you invest in a mutual fund. If your fund makes a profit on its sales. Some funds also charge sales commissions or "loads" to compensate brokers. financial consultants. you might not make as much money on your investment as you expected.buy and sell stocks on their own. you depend on the fund's manager to make the right decisions regarding the fund's portfolio. anyone who invests through a mutual fund runs the risk of losing money. Of course.

equity mutual . after the 1999 Union Government Budget. No Load: Marketing of a new mutual fund scheme involves initial expense. 3. Funds that charge front-end. advertising and marketing expenses. Non-Tax exempt Funds: Generally. 2. SEBI has defined a “load” as the one-time fee payable by the investor to allow the fund to meet initial issue expenses including brokers’/agents’/distributors’ commissions. back-end or deferred loads are called load funds. However. In India. A load fund’s declared NAV does not include load charges III.Close-end Funds: A close ended fund makes a one-time sale of a fixed number of unit. In India. II. Load vs. Tax-exempt vs. Funds that make no such charges or loads for sales expenses are called no-load funds. By charging the fund/scheme with a fixed amount each year. by deducting a specific amount from his initial contribution: front-end or entry load. However. during the stated number of years: deferred load. At the time of investor’s entry into the fund/scheme. when a fund invests in tax-exempt securities. Funds do offer “buy-back of funds/units” thus offering another avenue for liquidity to closed-end fund investor. Three usual ways in which a fund’s sales expenses may be recovered from the investors are: 1. In other words. to provide liquidity to investors many closed-end funds get themselves listed on stock exchange. It does not allow investors to buy or redeem units directly from the funds. funds other than Equity Funds have to pay a distribution tax. by deducting a specific amount from the redemption proceeds payable to the investor: back end or exit load These charges made by the fund managers to the investors to cover distribution/sales/marketing expenses are often called “loads”. before distributing income to investors. it is called a tax-exempt fund. At the time of the investor’s exit from the fund/scheme. all of the dividend income received from any of the mutual funds is tax-free in the hands of the investors. These expenses may be recovered from the investors in different ways at different times.

or short-term money market securities. B. Bonds and Money Market Funds.fund schemes are tax-exempt investment avenues. Different types of mutual fund Types of Mutual Fund: Once we have reviewed the fund classes. Funds are generally distinguished from each other by their investment objectives and types of securities they invest in. or Real Estate Funds. we are ready to discuss more specific fund types. A. and less for capital appreciation. So we have Equity. C. Thus. Broad Fund Types by Nature of Investments Mutual funds may invest in equities. we may have Gold or other Precious Metal Funds. But there are funds that invest in physical assets. Funds are therefore often grouped in order of risk. All of them invest in financial assets. Value Funds invest in equities that are considered under-valued today. while other funds are taxable for distributable income. Broad Fund Types by Investment Objective Investors and hence the mutual funds pursue different objectives while investing. Broad Fund Types by Risk Profile The nature of a fund’s portfolio and its investment objective imply different levels of risk undertaken. whose value will be unlocked in the future. Income Funds invest to generate regular income. For example. Equity Funds have a . bonds or other fixed income securities. Growth Funds invest for medium to long term capital appreciation. Thus.

e. banks and financial institutions and other entities such as infrastructure companies/utilities. MIPs. with less diversification in its investment. Money Market Funds: Lowest rung in the order of risk level. Debt Funds (or Income Funds): Next in the order of risk level. specialized and offshore debt funds. issued by entities across all industries and sectors is a properly diversified debt fund. High yield Debt Funds: There are funds which seek to obtain higher interest rates by investing in debt instruments that are considered “below investment grade”. Gilt Funds: Gilts are government securities with medium to long-term maturities. since they invest in short-term fixed income securities. Other examples of focused funds include those that invest only in Corporate Debentures and Bonds or only in Tax Free Infrastructure or Municipal Bonds. Examples include sector. but also by private companies. which generally means securities of less than one-year maturity. For e. Investors have some lock-in period.g. we have the general category Debt Funds. A diversified debt fund is less risky than a narrow-focus fund that invests in debt securities of a particular sector or industry. Focused Debt Funds: Some debt funds have a narrow focus. typically of over one year (under one-year instruments being money market securities).g. Assured Return Funds – an Indian Variant: The SEBI permits only those funds whose sponsors have adequate net-worth to offer assurance of return. .greater risk of capital loss than a Debt Fund that seeks to protect the capital while looking for income. Money Market Funds are exposed to less risk than even the For internal use by Training Department of Prudential ICICI Mutual Fund Bond Funds. Debt funds invest in debt instruments issued not only by governments. Diversifies Debt Funds: A debt fund that invests in all available types of debt securities. Money Market Funds invest in securities of a short-term nature. as compared to longer-term portfolios of Bond Funds. Junk Bond Funds.

These plans do not generally offer guaranteed returns. e. Very volatile & riskier.g. Equity Fund: As investors move from Debt Fund category to Equity Funds. b) Growth Fund • • • • Growth fund invest in companies whose earnings are expected to Rise above average rate. This scheme is for short-term investors who otherwise place money as fixed term bank deposits or inter corporate bonds. i) Sector Funds • • • Technology Fund Pharmaceutical Fund FMCG Fund . • • No guarantee returns High potential for growth of capital Types of Equity Fund a) Aggressive Growth Fund • • • Maximum capital appreciation Invests in less researched or speculative shares. Technology Fund Capital appreciation in 3 – 5 years Less volatile then aggressive growth fund. c) Specialty Fund They invest in companies that meet predefined criteria. they face increased risk level.Fixed Term Plan Series – Another Indian Variant: These are essentially closed-end.

ii) Offshore Funds Invest in equities in one or more foreign countries. e) Equity Index Funds An index fund tracks the performance of a specific stock market index. The objective is to match the performance of the stock market by tracking an index that represents the overall market. d) Diversified Equity Funds A fund that seeks to invest only in equities. except for a very small portion in liquid money market securities. low market to book value ratios and are undervalued by other yardsticks. bur is not focused on any one or few sectors or shares. While exposed to all equity price risks. but usually has a lock-in period before the end of which funds cannot be withdrawn. Fund concentrate on future growth prospect having good potential. diversified equity funds seek to reduce the sector or stock specific risks through diversification. f) Value Funds Value Funds try to seek out fundamentally sound companies whose shares are currently under-prices in the market. iii) Small-Cap equity Funds Invest in shares of companies with relative lower market capital. Value Funds will add only those shares to their portfolios that are selling at low price-earnings ratios. g) Equity Income Funds . may be termed a diversified equity fund. The funds invest in share that constitute the index and in the same proportion on the index. i) Equity Linked Savings Schemes: An Indian Variant Investment in these schemes entitles the investor to claim an income tax rebate.

• Real Estate Funds: Specialized Real Estate Funds would invest in Real Estate directly. • Commodity Funds: While all of the debt/equity/money market funds invest in financial assets. investing mainly in shares of companies with high dividend yields. or buy shares of housing finance companies or may even buy their securities assets. or may fund real estate developers. or lend to them.physical assets. Following are the different products and services Offered by Mutual Fund Companies • • • • • • • • Open ended schemes Close ended schemes Growth/Equity oriented Schemes Income/Debt oriented Schemes Balanced Funds Money market or liquid funds Gilt Funds Index Funds . the mutual fund vehicle is suited for investment in any other.for examples. Such funds are termed “hybrid funds” as they have a dual equity/bond focus. debt and equity) different types of securities in their portfolios. • Hybrid Funds – Quasi Equity/Quasi Debt: Many mutual funds mix these (money market.There are equity funds that can be designed to give the investor a high level of current income along with some steady capital appreciation.

changes every day. sale and repurchase of units happen on a continuous basis. from the fund itself.• • • • • • • Exchange Traded Funds Sectoral Funds Thematic Funds Commodity Funds Real Estate Funds Tax Saving Funds Hybrid Funds There are several ways for investment and disinvestments in mutual funds such as : • • • • • • Systematic Investment Plans (SIPs) Value Averaging Systematic Transfer Plans (STPs) Systematic Withdrawal Plans(SWPs) Automatic Reinvestment Plans. • Close ended fund A closed-end fund offers units for sale only in the NFO. at NAV related prices. . Open ended fund In an open-ended fund. The corpus of open-ended funds. therefore. It is then listed in the market.

of units held with remains constant. where the incomes earned are retained in the investment portfolio and allowed to grow. In this option. • Growth fund Provide capital appreciation over the medium to long-term • Investor who does not require periodic income distribution can choose the option. Usually closed-end funds sell at a discount to NAV. • The investor choosing this option will vary the NAV with the value of the investments portfolio . the no. • • • • Income fund Provide regular and steady income to investor Balanced fund Provide both growth and regular income. of units held by the investor will change with every reinvestment. The corpus of a closed-end fund remains unchanged. Money market fund Provide easy liquidity. regular income and preserve the income Tax saving scheme offer tax rebeats to the under specific provisions of the Indian income tax laws Investment made under some schemes are allowed as deduction U/S 88 of the income tax act . • The return to the investor who chooses a growth option is the rate at which his initial investment has grown over a period for which he has invested in the fund. rather than being distributed to investors. The value of units will be similar to that under the dividend option . • Investors with longer investment horizons and limited requirements for income choose this option. • Automatic Reinvestment Plans Reinvestment of amount of dividend made by fund in the same fund. while the no.Investors wanting to buy or sell the units have to do so in the stock markets.

investor has to impose voluntary self discipline. It gives option to the investor if the current fund performance in not satisfactory. Dividends are paid in the form of warrants or are directly credited to the investor’s bank accounts. . It is Voluntary Accumulation Plan. This plan is suitable for retired person. • Systematic Investment Plans( SIP) – For regular investment SIP is investing a fixed sum periodically in a disciplined manner for long term. In VAP. as an and when dividends are declared. Many SIP gives insurance benefits. It gives benefit of Rupee Cost averaging. In SIP monthly minimum Rs. • Systematic Transfer Plan ( STP) – Transfer on a periodic basis a specified amount from one scheme to another within the same fund family. Investors can invest particular amount one time for fixed time of period. It allows the investor flexibility with respect to the amount and frequency of investment.100 are invested. Interest is calculating compoundly.. Remaining amount will grow continuously.There are four types of plans as follows • Lump sum Investment It is one time investment. • Systematic Withdrawal Plan ( SWP) – For regular income The lump sum amount is invested for one time and then fixed percent amount is withdraw monthly. • Dividend option • • Investors will receive dividends from the mutual fund . because it gives regular income. VAP is modified version of SIP.500 or Rs.

REGULATORS IN INDIA • SEBI . Investors can choose the frequency of dividend distribution that suits their requirements. periodicity of dividends is left to the fund managers. The NAV of this investors holding will vary with changes in the value of portfolio and the impact of the proportion of income earned by the fund to what is actually distributed as dividend.half-yearly and annual. accounts.quarterly. • RBI as supervisor of Money Market Mutual Funds . Recently.monthly. SEBI issues guidelines for all mutual funds operations . the timing of the dividend payout is decided by fund manager. Mutual funds provide the option of receiving dividends at pre-determined frequencies. Hence in the past Money Market Mutual Funds scheme of Mutual funds had to be abide by policies laid down by RBI. bank owned funds to be under supervision of RBI and SEBI. • • Investors choosing this option have a fixed no.investment. of units invested in the fund and earned incomes on this investment. • RBI as supervisor of banks owned mutual funds .wich can vary from daily.RBI has supervisory responsibility over all entities that operate in the money markets. .As banks in India came under the regulatory jurisdiction of RBI.weekly.• • In normal dividend plan . SEBI requires all mutual funds to be registered with them. it has been decided that Money Market Mutual Funds of registered mutual funds will be regulated by SEBI through SEBI (Mutual Fund) Regulations 1996. expenses etc.The capital markets regulators also regulates the mutual funds in India.

This is in stark contrast to conventional insurance plans where the sum assured is the starting point and premiums to be paid are determined thereafter. In ULIPs.e. ULIP investors also have the choice of investing in a lump sum (single premium) or using the conventional route. The minimum investment amounts are laid out by the fund house. Generally speaking. balanced funds and debt funds to name a few. half-yearly.e. i. determining the premium paid is often the starting point for the investment activity. ULIPs can be termed as mutual fund schemes with an insurance component. conversely an individual faced with a liquidity crunch has the option of paying a lower amount (the difference being adjusted in the accumulated value of his ULIP). making premium payments on an annual. However it should not be construed that barring the insurance element there is nothing differentiating mutual funds from ULIPs 1. Mode of investment/ investment amounts Mutual fund investors have the option of either making lump sum investments or investing using the systematic investment plan (SIP) route which entails commitments over longer time horizons. Similarly ULIP investors have the option of investing across various schemes similar to the ones found in the mutual funds domain. diversified equity funds. The freedom to modify . quarterly or monthly basis. ULIP investors also have the flexibility to alter the premium amounts during the policy's tenure. As is the cases with mutual funds. i.COMPARISON OF ULIP VS MUTUAL FUND Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds in terms of their structure and functioning. investors in ULIPs are allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis. For example an individual with access to surplus funds can enhance the contribution thereby ensuring that his surplus funds are gainfully invested.

premium payments at one's onvenience clearly gives ULIP investors an edge over their mutual fund counterparts. 3. Investors get the opportunity to see where their monies are being invested and how they have been managed by studying the portfolio. albeit most fund houses do so on a monthly basis. sales and marketing. expenses charged for various activities like fund management. i. Similarly funds also charge their investors entry and exit loads (in most cases. The only restraint placed is that insurers are required to notify the regulator of all the expenses that will be charged on their ULIP offerings. This explains the complex and at times 'unwieldy' expense structures on ULIP offerings. Entry loads are charged at the timing of making an investment while the exit load is charged at the time of sale. Expenses can have far-reaching consequences on investors since higher expenses translate into lower amounts being invested and a smaller corpus being accumulated. Insurance companies have a free hand in levying expenses on their ULIP products with no upper limits being prescribed by the regulator. For example equity-oriented funds can charge their investors a maximum of 2. the Insurance Regulatory and Development Authority. 2.e. administration among others are subject to pre-determined upper limits as prescribed by the Securities and Exchange Board of India. . Portfolio disclosure Mutual fund houses are required to statutorily declare their portfolios on a quarterly basis.5% per annum on a recurring basis for all their expenses. Expenses In mutual fund investments. either is applicable). any expense above the prescribed limit is borne by the fund house and not the investors.

There is lack of consensus on whether ULIPs are required to disclose their portfolios. Some insurance companies do declare their portfolios on a monthly/quarterly basis. the other believes that there is no legal obligation to do so and that insurers are required to disclose their portfolios only on demand. regular portfolio disclosures on the other hand can enable investors to make timely investment decisions. While one school of thought believes that disclosing portfolios on a quarterly basis is mandatory. he could have to bear an exit load and/or entry load. For example plans that invest their entire corpus in equities (diversified equity funds). On the other hand most insurance companies permit their ULIP inventors to shift investments across various plans/asset classes either at a nominal or no cost (usually. a couple of switches are allowed free of charge every year and a cost has to be borne for additional switches). offerings in both the mutual funds segment and ULIPs segment are largely comparable. Effectively the ULIP investor is given the option to invest across asset classes as per his convenience in a cost-effective manner. If a mutual fund investor in a diversified equity fund wishes to shift his corpus into a debt from the same fund house. During our interactions with leading insurers we came across divergent views on this issue. However the lack of transparency in ULIP investments could be a cause for concern considering that the amount invested in insurance policies is essentially meant to provide for contingencies and for long-term needs like retirement. 4. a 60:40 allotment in equity and debt instruments (balanced funds) and those investing only in debt instruments (debt funds) can be found in both ULIPs and mutual funds. Flexibility in altering the asset allocation As was stated earlier. .

Tax benefits ULIP investments qualify for deductions under Section 80C of the Income Tax Act. Similarly. only investments in tax-saving funds (also referred to as equity-linked savings schemes) are eligible for Section 80C benefits. balanced funds). 5. . This holds good.This can prove to be very useful for investors. it is vital for investors to be aware of the nuances in both offerings and make informed decisions. debt-oriented funds attract a long-term capital gains tax @ 10%. the gains are tax free. irrespective of the nature of the plan chosen by the investor. he can book profits by simply transferring the requisite amount to a debt-oriented plan. On the other hand in the mutual funds domain. Despite the seemingly similar structures evidently both mutual funds and ULIPs have their unique set of advantages to offer. Maturity proceeds from ULIPs are tax free. As always. for example in a bull market when the ULIP investor's equity component has appreciated. conversely investments sold within a 12-month period attract short-term capital gains tax @ 10%. if the investments are held for a period over 12 months. while a shortterm capital gain is taxed at the investor's marginal tax rate. In case of equity-oriented funds (for example diversified equity funds.

. However. August 2006). The Economic Times.Madhu T. their growth mutual fund has given better returns than the "MAXIMISER" option of their ULIPs.REVIEW OF LITERATURE Mr.(Deepak Shenoy.Madhu T. the new directive would be beneficial for both the industry and investors in the long run.Deepak Shenoy . independent financial advisors believe that though there is a possibility of some distributors favoring ULIPs in the short term. ULIPs offer attractive frontend commissions to agents. over the last three years. he reveals that. Mr.in his article ‘Comparing ULIP returns to Mutual Funds’.The findings shows that distributors would push unit linked insurance plans (ULIPs) to earn better commission.June2009). made a study on ‘ULIPs hold edge over mutual funds’. The Indian Investor’s Blog.(Mr.

Bernz Jayma P.Murthaza and Sony.’If you're new to stock market investing you may have heard that mutual funds would be a good way for you to get started. made a study on ‘Mutual Fund disadvantages’. This article is an initiative from Bajaj Allianz to create better understanding of ULIPs and its benefits so that investors can avail maximum returns from their investments. That's actually good advice. He suggested that .Mr. in their article ‘An Overview on ULIP’. but mutual funds have their own pitfalls to watch out for.’ DATA INTERPRETATION AND ANALYSIS . Mr.

0 26.0 100.0 .0 Percent 74.0 Valid Percent 74.0 26.0 100.0 100.(A) Gender: Gender Cumulative Frequency Valid Male Female Total 37 13 50 Percent 74.

74% of the respondents are male policy holders and the rest 26% are female policy holders.INTERPRETATION : The above graph shows that .0 100. (B) Marital Status: Marital Cumulative Frequency Valid Married Unmarried Total 33 17 50 Percent 66.0 34.0 34.0 100.0 Percent 66.0 Valid Percent 66. out of 50 customers.0 .0 100.

0 28.0 Percent 12. 66% of the policy holders are unmarried and the rest 34% of the policy holders are married.0 22.0 34.0 96.0 Valid Percent 12.0 4.0 74.0 28. (C) Age: Age Cumulative Frequency Valid 20-30 30-40 40-50 50-60 60-70 Total 6 14 17 11 2 50 Percent 12.0 4.0 22.0 34.0 100.INTERPRETATION : From a sample of 50 customers.0 100.0 100.0 .0 40.

0 28. (D) Occupation: Occupation Cumulative Frequency Valid Government Private service Business NRIs Others Total 18 14 11 3 4 50 Percent 36.34%.0 6.0 .0 Valid Percent 36.0 Percent 36.0 28. 22% were in the age group of 50-60 yrs and 4% were in the age group of 60-70 yrs.0 100.INTERPRETATION : The graph shows that majority of the sample respondents were in the age group of 40-50 yrs ie.0 6. 12% were in the age group of 20-30 yrs & 28% of them were 30-40 yrs.0 8.0 92.0 22.0 86.0 64.0 8.0 100.0 100.0 22.

0 12.0 4.INTERPRETATION : The graph shows that majority of the policy holders are working in the Government sector i.0 12.0 4.0 96. 28% of them are engaged in Private service.0 46.0 Percent 38.0 100.0 100.e.0 Valid Percent 38.0 46.0 . (E) Annual Income: Annual income Cumulative Frequency Valid Below 2 lakhs 2-4 lakhs 4-6 lakhs 6-8 lakhs Total 19 23 6 2 50 Percent 38. 22% of them are business field. 6% of them are NRIs and 8% of them are engaged other works.0 100.0 84.36% .

0 14.0 54.0 94. Sources that helps you in making investment decision.0 Percent 10.0 4. Cumulative Frequency Valid Financial journal Television Brokers/Agent Friends Consultants Total 5 2 27 13 3 50 Percent 10.0 Valid Percent 10.0 6. 1. 3 of the policy holders get a salary below 2 lakhs and 4% of them above 6-8 lakhs. 12% of the policy holders get a salary of 4-6 lakhs.0 100.0 68.0 54.0 4.0 6.0 100.0 .0 26.0 26. 38% of the policy holders get a salary of below 2 lakhs. Sources that helps you in making the investment decisions.INTERPRETATION : The graph shows that 46% of the policy holders get a salary of 2-4 lakhs.0 100.

0 8.0 100. and 4% selects television as the source.0 8. 54% of the customers are strongly agree that the agents or brokers helps them to make investment decision.0 28.0 92.INTERPRETATION : From the sample of 50 customers. 2.0 6.0 .0 64.0 28.0 54.0 Percent 4. 26% of the customers point out their friends take part in the investment decision.0 54. Factors that influence your investment decisions in a particular company. Cumulative Frequency Valid Attractive schemes Tax benefits High reputation Rate of return Variety of products 2 27 3 14 4 Percent 4. And 10% customers reveal that the financial journals helps them. Remaining 6% is from consultants.0 Valid Percent 4. Factors that influence your investment decision in a particular company.0 6.0 58.

0 13 1 6 28 2 Percent 26.0 100.0 Valid Percent 26.0 4.0 56.0 100.0 2.0 96. and remaining 4% pointing out the attractive schemes. You generally like to invest money.0 40.0 Percent 26. You generally like to invest money in. Cumulative Frequency Valid Insurance Stock market Mutual fund Bank deposit Both insurance and mutual fund Total 50 100.0 .0 12.Total 50 100.0 100.0 2.0 56. variety of products from the company attracts 8% customers.0 28.0 12.0 INTERPRETATION : 54% customers agree that the tax benefit is influence them to buy policy .0 4.28% looks the rate of return what they will earn. and high reputation of the company attracts 6% of the customers. 3.

0 8.0 . 56% of the customers invest money in bank deposit.0 8.0 100.0 6. According to you who among the following life insurance companies is best. then 4% in both insurance and mutual fund. Cumulative Frequency Valid Bajaj Allianz HDFC Standard life Tata AIG Aviva Life SBI Life Total 27 5 4 3 11 50 Percent 54. According to you who among the following life insurance company is best.12% in mutual fund.INTERPRETATION : From a sample of 50 customers. 4.0 6.and remaining 2% in stock market.0 Valid Percent 54. 26% in insurance sector.0 22.0 64.0 10.0 100.0 72.0 22.0 Percent 54.0 78.0 100.0 10.

8% for Tata AIG and remaining 6% stands for Aviva life insurance company. Cumulative Frequency Valid Excellent Good Fair Poor Total 2 37 9 2 50 Percent 4. 5.0 100.0 74.0 100.0 Percent 4.0 78.0 18.INTERPRETATION : From a sample of 50 customers.0 18.0 100.0 96.0 4.54% customers select Bajaj Allianz is the best insurance company. How would you rate our products. and 22% customers choose SBI Life.10% select HDFC.0 Valid Percent 4. How would you rate our products.0 4.0 74.0 .

Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 2 33 8 5 2 50 Percent 4.0 86.74% customers thinks that the products offered by Bajaj Allianz Life insurance co. I would like to invest money in ULIP. is good.0 100.0 100.0 96.0 16.0 16.0 70. 6.0 10. and remaining 4% not satisfied with our products.4% thinks its excellent.0 10.0 .0 Valid Percent 4.0 4. I would like to invest money in ULIP.INTERPRETATION : From a sample of 50 customers.0 4.0 66.0 Percent 4.0 100.0 66.18% of them select Bajaj Allianz products are fair.

0 .0 Percent 28.0 92.0 4. 4% of them strongly supporting that fact. Reason for choosing ULIPs because of insurance coverage. and 16% has no opinion about it.INTERPRETATION : From a sample of 50 customers. And 4% strongly disagreed.0 64. 7. Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Total 14 32 2 2 50 Percent 28.0 64.0 4. Reason for choosing ULIPs because of insurance coverage. 66% agree.0 100.0 100.0 100. remaining 10% also disagree with investment in ULIP.0 4.0 4.0 Valid Percent 28.0 96.

8.28% of them strongly support it.0 100.0 96.4% customers didn’t say anything.0 60.0 Valid Percent 6. I would like to invest money in Mutual Funds. 64% of the customers agree.0 28. Cumulative Frequency Valid Strongly agree Agree Neutral Dsagree Strongly disagree Total 3 13 14 18 2 50 Percent 6.0 36.0 28.INTERPRETATION : From a sample of 50 customers.0 .0 32.0 100.0 4.0 36. I would like to invest money in mutual funds. .0 26.0 4.0 Percent 6. So we can see that most of the Customers choose ULIP because of insurance coverage.0 100.0 26. and remaining 4% disagree with that fact.

0 4. Mutual funds are more risky than ULIP products.0 88.0 . 9. Mutual funds are more risky than ULIP products.26% of the customers agree with that fact.And remaining 10% disagreed.0 54.0 54.out of this 10%.INTERPRETATION : From a sample of 50 customers.0 Valid Percent 34. 4% strongly disagreed with it.0 96.0 100.6% of the customers strongly support it.0 Percent 34.0 4. Cumulative Frequency Valid Strongly agree Agree Neutral disagree Total 17 27 4 2 50 Percent 34.and 28% customers have no idea about it.0 100.0 100.0 8.0 8.

INTERPRETATION : From a sample of 50 customers.54% of the customers thinks that mutual funds are more risky than ULIP products. Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Total 12 31 5 2 50 Percent 24.0 100.8% customers have no opinion about it.0 96.and remaining 4% disagree with it.0 10.0 86.0 .0 100. ulip has advantage over mutual funds.0 62.0 Valid Percent 24. ULIPs have advantage over Mutual funds.0 4.34% strongly agree with this statement.0 4. 10.0 Percent 24.0 10.0 62.0 100.

Do you think the safety factor is important in your investment in ULIP.INTERPRETATION : 62% of the customers agree with ULIP have advantage over mutual fund statement.0 6. And 4% of customers not supporting the statement.0 .0 Valid Percent 8.0 6.0 100.0 100.24% customers strongly agree with this fact.0 4. Safety Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 4 26 2 15 3 50 Percent 8.0 100.0 4.0 30.0 52.0 Percent 8.0 64. And remaining 10% have no opinion about it.0 60.0 52. 11.0 30.0 94.

0 100.6% strongly disagree.INTERPRETATION : From a sample of 50 customers. and remaining 4% have no opinion about safety factor is important in the investment of ULIP.0 10.0 Valid Percent 6.0 10.0 26.0 60.0 10.52% customers agree.30% customers were disagree with that fact. 12.0 14. Liquidity Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 3 5 5 30 7 50 Percent 6.0 Percent 6.0 100.0 10.0 16. Do you think the Liquidity factor is important in your investment in ULIP.0 86.0 60.0 .8% strongly agree.0 14.0 100.

Rate of return Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 6 21 3 12 8 50 Percent 12.and remaining 10% neither agree nor disagree with that statement. majority of the customers disagree i. 13.0 24.0 6.0 Percent 12.e.INTERPRETATION : From a sample of 50 customers.10% agree. 60%.0 24.0 100.0 . And 6% strongly agree.0 42.0 100.0 16.0 16. Do you think the Rate of return factor is important in your investment in ULIP. 14% strongly disagree with that fact.0 84.0 42.0 100.0 54.0 Valid Percent 12.0 60.0 6.

0 4. and remaining 6% neither agree nor disagree with that statement 14.0 42.0 . 42%. majority of the customers agree i.0 100.0 42.0 10.0 4. 12% strongly agree with that fact.0 96.0 10.0 100. And 24% disagree.e.0 54.0 64. Tax savings Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 6 21 5 16 2 50 Percent 12.0 100.0 Percent 12.0 32.16% strongly disagree. Do you think the Tax savings is influence your investment decision in ULIP.INTERPRETATION : From a sample of 50 customers.0 Valid Percent 12.0 32.

0 46. And 32% disagree.0 100.0 8.0 32. Past scheme’s performance influence your investment decision in ULIP.INTERPRETATION : From a sample of 50 customers. and remaining 10% neither agree nor disagree with that statement 15.0 14.e.0 16.0 16.0 92. 42%.0 Valid Percent 16.0 .0 14. majority of the customers agree i.0 100. past scheme's performance Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 8 8 7 23 4 50 Percent 16.0 46.0 8.4% strongly disagree.0 46.0 100.0 Percent 16. 12% strongly agree with that fact.

8% strongly disagree with that fact.0 100.0 10.0 .0 12. Advertisement influence the investment decision in ULIP.0 78.0 10.0 22.0 Valid Percent 18. Advertisement Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 9 11 19 5 6 50 Percent 18.0 40.0 100.0 100.0 Percent 18.0 88.0 38.e. And 16% strongly agree. 46%. and remaining 14% neither agree nor disagree with that statement 16.0 12.0 22.0 38. majority of the customers disagree i.INTERPRETATION : From a sample of 50 customers.16% agree.

0 28. 18% strongly agree with that fact. and remaining 38% neither agree nor disagree with that statement.0 12. Safety Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 2 4 8 30 6 50 Percent 4. Do you think the safety factor is important in your investment in mutual fund.0 16. 17.0 100.0 16.0 8.0 .0 Valid Percent 4.0 12.12% strongly disagree. And 10% disagree.0 12.0 Percent 4.0 60.0 8. 22%agree.0 88.0 60.0 100.INTERPRETATION : From a sample of 50 customers.0 100.

0 12.0 30.0 6.8% customers agree.0 100.0 100.0 Percent 14.0 .0 12.0 30.INTERPRETATION : From a sample of 50 customers.0 38. 18.4% strongly agree.0 Valid Percent 14.0 52.0 94. and remaining 16% have no opinion about safety factor is important in the investment of mutual fund.60% customers were disagree with that fact 12% strongly disagree.0 100.0 6. Liquidity Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 7 19 15 6 3 50 Percent 14. Do you think the Liquidity factor is important in your investment in mutual fund.0 38.0 82.

e.0 90. And 12% disagree.0 Valid Percent 4. Do you think the Rate of return factor is important in your investment in mutual fund. and remaining 30% neither agree nor disagree with that statement.0 Percent 4. majority of the customers agree i. 14% strongly agree with that fact.0 100.6% strongly disagree. Rate of return Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 2 7 21 15 5 50 Percent 4. 19.0 60.0 100.0 30.0 14.0 10.0 10.0 42. 38%.0 42.0 18.0 100.0 .INTERPRETATION : From a sample of 50 customers.0 14.0 30.

And 14% agree.0 46.0 64.0 100.4% strongly agree.0 46.0 Valid Percent 6. Do you think the Tax savings is influence your investment decision in mutual fund.0 24.0 .0 12.0 12. 30% disagree.0 24.INTERPRETATION : From a sample of 50 customers.0 12. 10% strongly disagree with that fact.0 100.0 100.0 18.0 12.0 88. Tax savings Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 3 6 23 12 6 50 Percent 6. and remaining 42% neither agree nor disagree with that statement.0 Percent 6. 20.

INTERPRETATION : From a sample of 50 customers.0 44.0 86.0 56.0 100.0 100. 12% strongly disagree with that fact.0 30.0 100. Past scheme’s performance influence your investment decision in mutual fund. past scheme's performance Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Total 6 22 15 7 50 Percent 12.0 44. and remaining 46% neither agree nor disagree with that statement.0 Percent 12. 24% disagree.0 14. 21.6% strongly agree.0 14.0 30.0 Valid Percent 12. And 12% agree.0 .

0 88.0 4.0 40.0 4.0 Valid Percent 8.0 Percent 8.0 32.0 100.0 .0 8. 44% agree.INTERPRETATION : From a sample of 50 customers.0 100. 22. 12% strongly agree with that fact. Advertisement influence the investment decision in mutual fund. Advertisement Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 4 16 24 4 2 50 Percent 8.0 48.0 96.0 100.0 32.0 8. and remaining 30% neither agree nor disagree with that statement. And 14% disagree.0 48.

and remaining 24% neither agree nor disagree with that statement.0 12.0 30.32% agree with that fact.0 Percent 46.0 100.0 12.0 .INTERPRETATION : From a sample of 50 customers.0 76.0 100.0 8. I would like to reinvest my funds in the same company again. Reinvestment in the same company again Cumulative Frequency Valid Strongly agree Agree Neutral Disagree Strongly disagree Total 23 15 6 4 2 50 Percent 46.0 8.0 96. 23.0 4.4% disagree. 8% strongly agree.0 4.0 Valid Percent 46. And 8% strongly disagree.0 30.0 88.0 100.

Reason for choosing ULIPs because of . And remaining 12% not satisfied with Bajaj Allianz. H1: There is relationship between investment of ULIP and insurance coverage. HYPOTHESIS-1 H0: There is no relationship between investment of ULIP and Insurance coverage. 30% customers also agree with it.INTERPRETATION : 46% of the customers express their satisfaction level with Bajaj Allianz service. They Strongly agree with the statement. CORRELATIONS Correlations I would like to invest money in ULIP. And 12% have neutral situation.

I would like to invest money in ULIP.005.729 ** 1 . Pearson Correlation Sig. T-Test Group Statistics Annuaincome N Mean Std.000 which shows that there is a relationship between investment of ULIP and insurance coverage. Deviation Std. INTERPRETATION: The above table shows that the reason for choosing ULIPs because of insurance coverage is 0. So we can conclude that most of the customers prefer ULIP products than Mutual funds because of insurance coverage. (2-tailed) N 50 . Pearson Correlation Sig.insurance coverage.729** .000 50 1 .We can choose alternate hypothesis because the significant value is less than 0.Hence it is very clear that most of the customers choosing ULIP product because which provide insurance coverage over their investment.01 level (2-tailed). (2-tailed) N Reason for choosing ULIPs because of insurance coverage. Error Mean . Correlation is significant at the 0.000 50 50 **. HYPOTHESIS-2 H0: There is no relationship between the investment pattern and annual income of the customers. H1: There is a relationship between the investment pattern and annual income of the customers.

632 .372 .172 . Equal variances not assumed I would like to invest money in mutual funds.263 .000 .37 4.000 19 Equal variances assumed 19 Sig. I would like to invest money in mutual funds. Below 2 lakhs 6-8 lakhs Below 2 lakhs 6-8 lakhs 19 2 19 2 2.263 -.806 .000 Equal variances assumed 18.657 .428 Sig. (2-tailed) .451 1.000 Independent Samples Test Levene's Test for Equality of Variances t-test for Equality of Means F I would like to invest money in ULIP.247 t .00 . Equal variances not assumed 18.00 3.956 Equal variances assumed 1.955 .632 -.010 Mean Difference .914 -2.I would like to invest money in ULIP.424 .26 2.061 -.000 .185 .219 .000 . Equal variances not assumed Equal variances assumed 3. Equal variances not assumed I would like to invest money in mutual funds. .882 Independent Samples Test t-test for Equality of Means df I would like to invest money in ULIP.

Which shows that there is no relationship between the investment pattern and annual income level of the customers. • As insurance sector is growing rapidly so most of the life insurance players are selling ULIP plans. • While investing any insurance company customer prefers for good branded company Bajaj is India’s one of the most famous and richest family. Since last 4-5 years the returns provided by ULIP were very good so people tend more towords ULIP • Middle class people who are interested in investment but they are not aware of such options so more awareness should be there. FINDINGS AND SUGGESTIONS After survey there are some findings and suggestions as follows.but not the decision.005.061 for Mutual Funds. .247 for ULIP and 0.INTERPRETATION: The above table shows the significance value of the relationship between investment pattern and annual income is 0. owned company so people want security for their investment. And the awareness about ULIP is growing most of the people knows the ULIP of life insurance. as main target customer are the middle class peoples.It may be change the premium of the policy. And second preference is given to SBI life as many people perceive that SBI Life is a govt.We can choose Null hypothesis because the significant value is greater than 0.Hence it is very clear that the income level does not take part in the investment decision.

. so from this we can analyze that Bajaj Allianz Life Insurance is doing good but it is having good potential in Market. • 54% of people given Best rating to the Bajaj Allianz Life Insurance ULIP. First reason or preference that why an investor is interested in ULIP is Investment Purpose. • • While investing in mutual fund 44% of the customers looks their return. 6% customers are attracted due to the high reputation of the company. and second is to its returns and after that they investing because they are getting the tax benefit. 12% of people had invested in Mutual Fund and 26% people had invested in ULIP and 4% people had invested in both the options. So awareness about MF is not very good and it can be improved. To improve its market share they should improve the awareness level of the common people. So if BALIC wants to penetrate its market share they should improve the marketing strategy. • While survey I found that many all customers had already invested in ULIP and Mutual Fund some people had invested in both options. improving the distribution channel etc. The second choice of the investors is return of their money.42% customers observe the scheme’s performance in past years. • Innovative Products and good brand name are the main success factor for Bajaj Allianz Life Insurance.• As now till date people in India don’t wanted to invest in share market because then were thinking that it is a bad thing but as the awareness about Mutual fund is increasing as more and more private players are entering in the market. Then again there are some people who are investing for pension planning and security. • In future people will be more preferring to the security of their money means they want a secured option which should provide good returns. As ULIP are the option in which you can have the security also and good returns.

CONCLUSION AND/OR RECOMMENDATIONS From above analysis and survey we can conclude as follows • Awareness of ULIP is increasing as more number of private players are entering in life insurance industry. Investors in Bajaj Allianz Life ULIP will be getting the advantage of life insurance cover. . • • ULIP differentiate from Mutual fund in respect of Insurance cover. • Mutual Fund is also getting more and more famous in Indian market as many private companies innovating new funds as the investors demand.

• Bajaj Allianz should go for innovating more and more products and improving the distribution channels as per the area of sales. There is a need for insurers to undertake a demand audit in order to understand what the policyholder wants and needs. • Deriving the right feedback from customers and bringing out innovative products which cater to customer demands will go a long way in tapping the market potential of the insurance and Mutual fund sector. • Mutual fund is having good growth but many customers from rural areas don’t have any knowledge about Mutual fund. • For Bajaj Allianz Life Insurance They should go for creating more awareness about its ULIP as now also people are just investing because Bajaj is India’s most Known and Favorite brand in past. BIBLIOGRAPHY REFERENCE: .They think it is very risky. People in Changanacherry are investing in only good branded companies as they don’t believe on other financial companies for taking ULIP. • • • Even investors from cities like Changanacherry don’t have that much of Knowledge about fund selection they all are depend on Brokers.• People are turning towords the ULIP as a good investment option but as ULIP is in its starting phase so customers are preferring only big brands.

1)

Research Methodology, C.R Kothari, 2nd edition

2) Outlook Money, 15 May 2005, “ULIP Mania”. 3) The Business Line, 10 June 2007, “Know all About ULIPS”.

WEBSITE

www.irdaindia.gov www.bajajallianzlife.co.in www.quickmba.com www.amfindia.com www.mba.com www.articlebase.com

QUESTIONNAIRE
I am RAJEEV JOSEPH student of Karunya School of Management, Coimbatore doing a project on “A COMPARATIVE STUDY OF ULIP PLANS OF BAJAJ ALLIANZ LIFE INSURANCE WITH MUTUAL FUNDS” and this questionnaire is a part of the

project and the information collected through this questionnaire would be used only for academic purposes and strictly confidential

PERSONNAL INFORMATION

1. Name:
2. Gender: (a) Male 3. Marital status: (a) Married 4. Age: (a) 20-30 (c) 40-50 (e) 60-70 5. Occupation: (a) Government Service (c) Business (e) Others 6. Annual Income: (a) Below 2 lakhs lakhs (c) 4- 6 lakhs (e) Above 8 lakhs (b) 2-4 (d) 6-8 lakhs (b) Private (d) NRIs (b) 30-40 (d) 50-60 (b) Unmarried (a) Female

1. Sources that helps you in making the investment decisions. (a) Financial journal Television (c) Brokers or agents Friends (e) Consultants 2. Factors that influence your investment decisions in a particular company. (a) Attractive schemes benefits (c) High reputation of return (e) Variety of products 3. You generally like to invest money. (a) Insurance Market (c) Mutual Fund deposits (e) Both insurance and mutual fund 4. According to you who among the following Life Insurance companies is best. (a) BAJAJ ALLIANZ STANDARDLIFE (c) TATA AIG INSURANCE (b) HDFC (d) AVIVA LIFE (b) Stock (d) Bank (b) Tax (d) Rate (b) (d)

(e) SBI LIFE 5. How would you rate our products. (a) Excellent Good (c) Fair (d) Poor (e) Very poor (b)

6. I Would like to invest money in ULIP. (a) Strongly agree Agree (c) Neutral Disagree (e) Strongly disagree 7. Reason for choosing ULIPs because of insurance coverage. (a) Strongly agree Agree (c) Neutral Disagree (e) Strongly disagree 8. I would like to invest money in Mutual Funds. (a) Strongly agree Agree (c) Neutral Disagree (b) (d) (b) (d) (b) (d)

ULIPs have advantage over Mutual funds.(e) Strongly disagree 9. Mutual funds are more risky than ULIP products. (a) Strongly agree Agree (c) Neutral Disagree (e) Strongly disagree 10. Strongly agree (11) Safety (12) Liquidity (13) Rate of Return (14) Tax savings (15) past scheme’s Performance (16) Rating of ULIP by Agencies (17)Advertisem ents Agree Neutral Disagree Strongly disagree (b) (d) (b) (d) . (a) Strongly agree Agree (c) Neutral Disagree (e) Strongly disagree Do you view following factors/sources of information important while investing in ULIP.

I would like to reinvest my funds in the same company again. Strongly agree (11) Safety (12) Liquidity (13) Rate of Return (14) Tax savings (15) past scheme’s Performance (16) Rating of ULIP by Agencies (17)Advertisem ents Agree Neutral Disagree Strongly disagree 18.Do you view following factors/sources of information important while investing in Mutual Funds. (a) Strongly Agree Agree (c) Neutral Disagree (e) Strongly disagree (b) (d) .

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