COMPARATIVE STUDY OF HDFC SLIC, BAJAJ ALLIANZ, BIRLA SUN LIFE AND LIC

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF M.B.A SUBMITTED BY: ASAF ALI

UNDER SUPERVISION OF: MR. SANCHIT SACHDEVA SALES DEVELOPMENT MANAGER HDFC SLIC

UNDER GUIDANCE OF MRS. VEERA LAKSHMI ASST. PROF MBA DEPT
COER SCHOOL OF MGT

UTTRAKHAND TECHNICAL UNIVERSITY, DEHRADUN SESSION 2007-2009

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TO WHOM IT MAY CONCERN

This is to certify that aforesaid candidate of MASTER OF BUSINESS ADMINISTRATION (MBA) of the COER SCHOOL OF MANAGEMENT (COER-SM), have satisfactorily completed dissertation project on the topic “” as per rules of UTTRAKHAND TECHNICAL UNIVERSITY, DEHRADUN in academic session 2007-2009. His performance was satisfactory during development of the project. Project Guide (Mrs. Veera Lakshmi) COER-SM Dated: ASAF ALI

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CANDIDATE’S DECLARATION
I, Asaf Ali, a bonafide student of MBA at the COER School of Management, Roorkee, hereby declare that I have undergone the Summer Training at HDFC SLIC LTD under the supervision of Mr. Sanchit Sachdeva. I also declare that the present project report is based on the above summer training and is my original work. The content of this project report has not been submitted to any other university or institutes either in part or in full for the award of any degree, diploma or fellowship.

(Signature) Name: Asaf Ali Roll No: 07060500016

Place: Roorkee Date:

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Sanchit Sachdeva. Hridesh Chauhan.ACKNOWLEDGEMENT I would like to take this opportunity to thank all those who have helped me tremendously during the course of the project. I also extend my gratitude to other SDM's and my friends who have helped me directly or indirectly to complete my project. Veera Lakshmi for being my guide throughout the completion of this project. for guiding me throughout my project. My heartiest thanks are due to many persons for assistance in this project to present state. Branch Manager of HDFC Standard Life Insurance Corporation. I would also like to thank Mr.  Mr. I also acknowledge the Knowledge that I have gained during the preparation of this project. The profound gratitude to our teachers especially. ASAF ALI 4 . Roorkee for clarifying the problems which I encountered during the preparation of this project. Sales development Manager.  Mrs.

INTRODUCTION 2. EXECUTIVE SUMMARY 3. SOME TERMS ABOUT ULIP PLANS 8. PRODUCT PROFILE 9. OBJECTIVE OF THE STUDY 4. COMPANY PROFILES 5. DEPARTMENT OVERVIEW 6. BIBILOGRAPHY 6 7 8 9-13 15-17 18-20 21-23 24-44 45-48 48-51 52-54 55 56 5 . INSURANCE FUNCTION 7. COMPARATIVE STUDY OF DIFFERENT FIRMS 11. RESEARCH METHODOLOGY 12.CONTENT 1. TAXATION BENEFIT 10. CONCLUSION & RECOMMENDATION 13.

These class room lectures and role-plays helped me to gain a substantial understanding of the plans. The classroom also involved role plays and games. \ 6 . BAJAJ ALLIANZ & LIC. This in turn helped me to effectively explain these plans to people whom I meet or took appointment to meet. Saving 3. In today’s scenario life insurance solves the three objectives. They explained all the plans available with HDFC SLIC in detail and the pension plan comparison of BIRLA SUN LIFE. Hridesh Chauhan (BM). Life insurance schemes also offer tax benefits. The role plays and games involved students being asked to play the roles of customers or clients and that of a person trying to persuade the customer to go in for a plan with HDFC SLIC. Security 2.INTRODUCTION The project started with class room sessions involving lectures and interactions with the mentors Mr. 1. Tax Benefit. The connect of life insurance has undergone several changes over the years and what has myriad array of attractive options apart from the basic of life cover. Sanchit Sachdeva (SDM) and Mr.

BAJAJ ALLIANZ and LIC is there . In the end I have give all the sources from which I have collected all the information. In the first part of the report there are some plans which are frequently sold by HDFC SLIC in the market. In the last part of the project I have given some of the findings and conclusion about the life insurance market and what is the potential of the market. and then comparative study of pension plan of different firm namely BIRLA SUN LIFE.EXECUTIVE SUMMARY This project is based upon the fact & figure gathered from the websites about the plans of the firm. 7 .

. BIRLA SUN LIFE. 2. To observe working of various departments of the organization. To analyze the pension plan on the basis of features offered. 3. Comparative study of HDFC SLIC. BAJAJ ALLIANZ and LIC.OBJECTIVE OF STUDY 1. 8 .

e) To grow through diversification by leveraging off the existing client base. Business Objectives The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner. 100 million. and to promote home ownership. c) Transform ideas into viable and creative solutions. 9 .COMPANY PROFILE HDFC LIMITED HDFC was incorporated in 1977 with the primary objective of meeting a social need – that of promoting home ownership by providing long-term finance to households for their housing needs. b) Maintain its position as the premier housing finance institution in the country. d) Provide consistently high returns to shareholders. Organizational Goals HDFC’s main goals are to a) Develop close relationships with individual households. HDFC was promoted with an initial share capital of Rs. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets.

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HDFC STANDARD LIFE The Partnership: HDFC is an organization that strives for excellence. the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. (IDFC). with the twin objectives of enhancing customer satisfaction and shareholder value” HDFC and Standard Life first came together for a possible joint venture. Towards the end of 1999. further strengthening the relationship. Around this time Standard Life purchased a 5% stake in HDFC. 11 . to enter the Life Insurance market. in January 1995. The next three years were filled with uncertainty. based in Mumbai. the joint venture agreement was renewed and additional resource made available. Despite this both companies remained firmly committed to the venture. In October 1995 the companies signed a 3 year joint venture agreement. At the outset it was clear that both companies shared similar values and beliefs and a strong relationship quickly formed. due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Therefore. In October 1998. Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd.

HDFC are the main shareholders in HDFC Standard Life. HDFC Standard Life Insurance is one of the leading players in the group insurance segment of the life insurance business. pharmaceuticals. BPOs. In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market.6%. HDFC Standard Life Insurance Company has been signed on by Blue Star to provide insurance cover to its 1.Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration. consultancy. FMCG. while Standard Life owns 18.000 lives. across the entire industry spectrum including software. Its group business has grown significantly since inception and now covers over 25.805 employees across India and overseas. banking. and consumer electronics HDFC STANDARD LIFE 12 . The company was incorporated on 14th August 2000 under the name: HDFC Standard Life Insurance Company Limited. HDFC and Standard Life have a long and close relationship built upon shared values and trust. with 81. Their ambition from as far back as October 1995 was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000. The Mutual Fund was launched on 20th July 2000. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance companies in India are measured.4%. retailing.

rather it is a combination of several things like:  Customer service of the highest order  Value for money for customers  Professionalism in carrying out business  Innovative products to cater to different needs of different customers  Use of technology to improve service standard  Increasing market share VALUES:1. 3. INNOVATION: Recognizing the different needs of its customers. it will be offering a range of innovative products to meet these needs. It will do this by offering life insurance and pension products. SECURITY: Providing long term financial security to its policy holders will be the company’s constant endeavor. 2. it will aim to manage their investments very carefully and live up to this trust. This does not just mean being the largest or the most productive company in the market.MISSION:HDFC Standard Life aims to be the top new life insurance company in the market. TRUST: HDFC Standard Life appreciates the trust placed by its policy holders in it. Hence. The company’s mission is to be the best new life insurance company in India and these are the values that will guide it in this 13 .

c) Good financial track record of both parents – HDFC and Standard Life. d) Certified Financial Consultants to advise you.Why HDFC Standard Life? There are many reasons why one may choose HDFC Standard Life Insurance Company Ltd. f) Income Tax benefits for our insurance products. b) Efficient customer service team. as your partner in meeting your insurance needs: a) Innovative products to meet your needs. e) Professional approach in managing your investments. 14 .

commissions to agents. event management companies etc. Actuary Department 3. Underwriting Department The Accounts Department: The Accounts Department functions like any other Accounts department. It is concerned with the disbursement of salaries. 15 . viz. Accounts Department 2. Investment Department 4. reimbursements. incentives. These are: 1. It also handles the payments due to other agencies with which the Company interacts. There are four other departments under the Finance Departments. The work of an Accounts department assumes much importance in an insurance company because it has to be able to pay the claims arising time to time.FINANCE DEPARTMENT AT HDFC STANDARD LIFE The finance department of HDFC Standard Life Insurance is headed by the General Manager (Finance). who reports to the MD and CEO.

The Actuary Department: The Actuary Department is the “Pricing Department” of an insurance company. The IRDA (Insurance Regulation Development Authority) has prescribed the use of the mortality tables used by LIC for all other companies. HDFC Standard Life has till now declared three bonuses to its policyholders The Investment Department: The Investment Department is responsible for the investment of the money of the investors. 95% of the surplus above this has to be distributed to the investors a bonus. It must ensure that the Solvency margin (AssetsLiabilities) must be at least Rs 50 crores. as prescribed by IRDA. The Actuary Department is also responsible for Asset-Liability Management of the insurance company. this department decides the amount of premium to be charged from a client for a particular policy. 16 . This is normally done with the help of Mortality Tables. Based on this principle. It must be understood that the basic premise on which the insurance companies work is “use the corpus of policy holders for disbursement for any claim”. Since the basic reason for the investors investing their money in Life Insurance is security. IRDA has put certain regulations on such companies for investments so that the money of investors is safe. or the company can use the existing tables available for its use. which can either be prepared by the company itself.

not less than 50% of the corpus will be invested in Government Securities (G-Sec) 2. normally. the returns have to be in the range of 6 %-9 %. there are charts available with the people of this department on the basis of which they can come to a viable decision. Remaining 15% can be invested in “unapproved” equities.These guidelines are: 1. 4. The Underwriting Department This department is responsible for taking the decision on whether to insure a person or not. HDFC has not been investing in equities. which invests around 75% of its corpus in equities. the reinsurance opportunities etc. social and rural sectors. Up to15% of the corpus will be invested in infrastructure. 3. Here also the insurance companies are bound by regulations and guidelines. But now it has decided to follow the footsteps of its Joint-Venture partner Standard Life. Underwriting is done on the basis of two grounds: 17 . Not less than 20% can be invested in government and other equities. Till recent time. The Investment Department is also responsible for calculating the returns of the investment to the investors. For this it must take into account the risk premium associated. According to IRDA.

Insurance cannot check the happening of the risk. Other Functions The primary functions of insurance include the following: 1) Provide Protection . Primary Functions 2.· Financial Grounds: here the underwriters decide on the worth of the person by taking into account his tax returns of the last three years. Secondary Functions 3. 18 . Functions of Insurance The functions of Insurance can be bifurcated into three parts: 1. but can certainly provide for the losses of risk. accidents and uncertainty. On this basis they are able to assess the premium paying ability of that person and accordingly take a decision. On the basis of this report. · Medical Grounds: each new customer is required to undergo a comprehensive medical test. which determines the person’s general health. the underwriters decide upon the premium to be charged from customer.The primary function of insurance is to provide protection against future risk.

Insurance is a device to share the financial loss of few among many others. which helps to change from uncertainty to certainty. The secondary functions of insurance include the following: 1) Prevention of Losses . All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Insurance is device whereby the uncertain risks may be made more certain.Insurance determines the probable volume of risk by evaluating various factors that give rise to risk.Insurance is a device. installation of automatic sparkler or alarm systems.Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions. by sharing the risk with others. 2) Collective bearing of risk . 19 . Insurance is a mean by which few losses are shared among larger number of people. 3) Assessment of risk . etc.Insurance is actually a protection against economic loss. Risk is the basis for determining the premium rate also 4) Provide Certainty .

The other functions of insurance include the following: 1) Means of savings and investment . people invest in insurance.Prevention of losses causes lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. 3) Contributes towards the development of larger industries . 20 . 2) Small capital to cover larger risks .Insurance provides development opportunity to those larger industries having more risks in their setting up.Insurance serves as savings and investment. insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also. Reduced rate of premiums stimulate for more business and better protection to the insured.Insurance relieves the businessmen from security investments. by paying small amount of premium against larger risks and uncertainty. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

they would usually be having an in-house investment 21 .Insurance promotes exports insurance. which makes the foreign trade risk free with the help of different types of policies under marine insurance cover SOME TERMS ABOUT ULIP PLANS Fund Management The crux of the entire product is the returns that this product can generate and this is dictated by the management of the fund. In India many of the insurance companies. For others.Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways.e. which are apart of the larger financial services groups. The insurance company has two options with regards to the management of the fund i. already have a sister fund Management Company and they could bank on their performance. external and internal. There is no great value in doing well in all other aspects of the product delivery if the fund does not perform well. 3) Risk Free trade . External funds usually have a proven track record that could be used as a significant marketing too.2) Source of earning foreign exchange .

team and this could be extended to management of the funds too. The expenses and hence the cost should be kept in mind as by nature the unit linked insurance product is a very transparent product and hence this would become a significant selling point in the long run. Charges and Expenses There are different charges that can be levied by the insurance companies, some of the more common ones are: 1) Initial charges 2) Annual charges 3) Investment charges 4) Morality charges 5) Surrender charges

Initial charges Initial charges are applied at the time of setting up the policy; this could be in the form of a bind offer spread and also in the form of allocation of units known as the allocation factor. It is also possible to be levying a per member level charge. Annual charges The annual charges can either be fixed or can be linked to the size of the fund. It could also be linked to the number of members in the scheme. This charge is usually taken to cover the maintenance expenses of the insurer. Investment charges
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A fund management charge is levied to take care of the fund management expenses depending upon whether the fund is managed internally or externally. Mortality charges It is possible to have an insurance element built into the super annuation contract and in case of a gratuity there would be an element of insurance the degree and the form could differ from company to company. The insurance premium can be taken as a part of the gratuity contract of it can be administered outside this but packaged to look as if it is a whole some product offering gratuity and insurance to the employees of the organization. Surrender Charges The surrender charges can be used in multiple ways. It could be used as a way of recouping the initial outlay of the insurer in case the company decides to withdraw in the early years of the contract or it could be used as a deterrent for the company to shift the service provider at any point of the contract. Usually the surrender charges/ penalty would decrease over a period of time and would be expressed as a percentage of the fund.

Administration The unit –linked policies are significantly complex to administer and also would need a very highly technically trained customer service department to handle enquiries. Much of the administer the policy, As the allocation of units would be time dependent it is extremely important to have a very robust system that can take care of allocation, de allocation and reallocation of units.
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It is essential to have a system that would be able to talk/ interact with other systems to capture the unit price details, to give outputs to accounting packages, report generators etc.

INDIVIDUAL PRODUCTS: Each of us leads a unique life and so has unique needs. HDFC Standard Life offers a range of products and invites you to choose the one that suits you best. PLAN Savings Plans Endowment Assurance Plan Unit Linked Endowment Plan Children’s Plan Money Back Plan Unit Linked Young Star Plan Investment Plans Single Premium Whole of Life Plan Protection Plans BENEFIT Life Insurance with Savings Life Insurance & Savings with choice of investment funds Financial Security for your child Financial security for your child with choice of investment funds Life Insurance with Savings Investment with Life Insurance
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Term Assurance Plan Life Insurance customized for home loans Loan Cover Term Assurance Plan Life Insurance at an affordable price Retirement Plans Personal pension plan Unit Linked Pension Plan Savings for retirement Retirement Savings with a choice of investment funds 25 .

on diagnosis of any one of the 6 common critical illnesses(1). However. in case of your unfortunate death.Endowment Assurance Plan Endowment assurance plan is a participating (with profits) insurance plan that offers the following features: Provides financial support to the family by way of a lump sum payment in case of the unfortunate death of the life assured within the term of the policy. Once such a claim has been met. provides a lump sum payment to the life assured on survival up to maturity This plan is with profits saving plan and is well suited for saving money for your long term financial goals. no further Critical Illness Benefit is payable. This plan also helps provide for the needs of your family in your absence by paying out a lump sum in the event of your unfortunate death during the term of the policy. • Additional Term Benefit (ATB) provides an additional amount equal to the sum assured chosen under this optional benefit. The sum assured is payable if you survive for 30 days after the date of the claim. 26 . Optional benefits You can add the following optional benefits to customise your policy to suit your needs: • Critical Illness (CI) Benefit provides an amount. equal to the sum assured chosen under this optional benefit. your basic policy continues even after we pay a claim On this benefit.

in case of your unfortunate death: -due to an accident and within 60 days of an accident.• Accidental Death Benefit (ADB) provides an additional amount. This plan can be taken on a single life basis or a joint life (first claim) basis. age of entry Max. The eligibility ages are as follows: Basic Min. • Waiver Of Premium (WOP) Benefit waives the premium for you in case you become totally disabled. equal to the sum assured chosen under this optional benefit. age of expiry Policy 12 60 75 Basic policy with optional benefits CI ATB ADB WOP 18 5 70 18 60 75 18 55 65 18 50 60 Minimum term: 10 years Maximum term: 30 years Tax Benefits 27 . Eligibility This plan can be taken as a single life basis or a joint life (first claim) basis. The waiver is applicable during the period of total disability. age of entry Max.

half-yearly or quarterly modes.Tax benefits described in Section 88. Applicable to premium paid for CI and WOP Payment options you have the choice of paying your premium either in yearly. Section 80D and Section 10 (10D) of the income Tax Act are applicable. depending on your convenience 28 .

On maturity you receive the value of your units. The Unit Linked Endowment Plan also gives the option of additional protection against the six common critical illnesses.Unit Linked Endowment Plan: The unit linked endowment plan is an insurance policy that is designed to pay a lump sum on maturity or on earlier death. throughout the term of the policy. 29 . 10. the greater of the Sum Assured and the value of the unit-linked fund will be paid to your nominee. as well as additional protection if death is as the result of an accident. Your premiums are invested in units of the investment fund of your choice. On death (or critical illness. half-yearly or annually. based on the prevailing unit price.000 each year. cheque or demand draft. Benefits There are 4 different options available to choose from: 1. Premiums can be paid by cash. Life Option On death within the policy term. if chosen) you receive the greater of the value of your units and your selected basic sum assured. Premiums Premiums can be paid either quarterly. On survival to the end of the policy term the value of the unit linked fund will be paid to you. The minimum premium amount is Rs.

an extra benefit equal to the Sum Assured will be paid. 30 . On survival to the end of the policy term the value of the unit-linked fund will be paid to you. should death occur within the policy term as the result of an accident. Extra Life Option This option pays the same benefits as the Life Option but. heart attack. 4. Life and Health Option On death or earlier diagnosis of any one of six common critical illnesses within the policy term. the greater of the Sum Assured and the value of the unit-linked fund will be paid to your nominee. should death occur within the policy term as the result of an accident. an extra benefit equal to the Sum Assured will be paid. coronary artery by pass graft surgery. Extra Life and Health Option This option pays the same benefits as the Life and Health Option but. major organ transplant (as recipient) and stroke”. Medium or High. 3. you may choose between 3 levels of cover – Low.2. The Sum Assured can not be changed during the term of the contract. “The illnesses covered under this option are cancer. kidney failure. For each level the Sum Assured is based on the amount of premium you pay each year. Levels of protection Depending on your age at entry.

Age at entry 18 to 40 41 to 50 Over 51 Low 5XPremium 5XPremium 5XPremium Levels of cover Medium 10XPremium 10XPremium High 20XPremium Eligibility The age and term limits for taking out a Unit Linked Endowment Plan are: (years) Minimum Maximum term Life 10 Life and health Extra life Extra life and health 10 30 18 55 65 10 30 18 5 65 10 term 30 Minimum age at entry 18 Maximu m age at entry 60 Maximum age at expiry 75 10 30 18 55 70 The alteration of premium. Tax Benefits 31 . surrendering of the policy. conditions on stopping of payment of premiums and charges are the same as that of the unit linked pensions plan.

Accessing money? You can make lump sum withdrawals from you funds provided the fund balance after withdrawal and charges does not fall below the Sum Assured.000. The minimum withdrawal amount is Rs. Surrendering the policy The policyholder can surrender the policy at any point of time during the contract term. 10. 32 .Tax benefits under section 88 and section 10 (10D) of the income tax act are applicable. The amount payable will be the unitised fund value after applying additional surrender charges mentioned below.

The details of these options are explained in the next section. This is a flexible plan with three options for you to choose from. Children’s Plan receives simple reversionary bonuses.Children's Plan Children’s Plan is designed to provide a lump sum to the child at maturity. even in case of the insured parent’s unfortunate death during the policy term. It also provides financial security to the child in the future. 33 . which are usually added annually. depending on your requirements. Options You will have the choice of 3 options at the start of the policy.

Sum assured + bonuses paid and the policy stops. On the survival of the insured parent to the maturity date.Option On the death of the insured On maturity parent during the policy term Future premium waived and the policy continues till maturity. Maturity Benefit Plan Accelerated Benefit plan 34 . sum assured + bonuses paid.

The benefits received under the policy are eligible for tax relief under Section 100 (10D) of the income tax act. 1961. 1961. Sum assured + bonuses paid. Eligibility The eligibility ages for the life assured under the plan are as follows: Minimum Age of Entry 18 years Maximum Age of Entry 60 years Maximum Age of Maturity 75 years Term of policy 35 .Double Benefit plan Sum assured paid. and the policy continues till maturity. future premiums waived. Tax Benefits The premiums you pay will be eligible for tax relief under Section 88 of the Income Tax Act.

Term: 10 years Max. depending on your convenience 36 .Min. half-yearly or quarterly modes. Term: 25 years Payment options You have the choice of paying the premium either in yearly.

Life Option This option consists of a Maturity Benefit and a Death Benefit. half-yearly or annually. Your premiums are invested in units of the investment funds of your choice. Premiums can be paid by cash. Following a valid death or critical illness claim. 37 . Premiums You agree to pay a level premium regularly. as and when they would have fallen due. based on the prevailing unit prices. 10. if chosen) the selected basic sum assured is paid. either quarterly.Unit Linked Young Star Plan HDFC Unit Linked Young Star Plan is designed to provide a lump sum to the child at maturity. On maturity the value of the units will be paid. we will pay the future premiums (at the level originally chosen at inception) into your policy. On death (or critical illness. The Unit Linked Young Star Plan also gives the option of additional protection against the six common critical illnesses. even in case of the insured parent's unfortunate death during the policy term. cheque or demand draft. throughout the term of the policy. The Maturity Benefit will pay the value of the unit-linked fund at the end of the policy term.000 each year. The minimum premium amount is Rs. Benefits There are 2 different options available: 1. It also provides financial security to the child in the future. and the policy continues until maturity.

major organ transplant (as recipient) and stroke. The level of premium will be that chosen by you at inception of the policy. no further premiums are due from the policyholder and the Death Benefit will lapse without value. The level of premium will be that chosen by you at inception of the policy. The Death Benefit will pay the basic Sum Assured on death of the life assured during the policy term. kidney failure. Following payment of this benefit. The Maturity Benefit will pay the value of the unit-linked fund at the end of the policy term. no further premiums are due from the policyholder and the Extra Health Benefit will lapse without value. heart attack. as and when they become due. Following a valid death claim. Following payment of this benefit. we will pay future premiums on your behalf. 2. as and when they become due. a Death Benefit and an Extra Health Benefit. no further premiums are due from the policyholder.The Death Benefit will pay the basic Sum Assured on death of the life assured during the policy term. Life and Health Option This option consists of a Maturity Benefit. Following a valid death or critical illness claim. The illnesses covered under this benefit are cancer. Following payment of this benefit. The Extra Health Benefit will pay the basic sum assured on diagnosis of any one of six critical illnesses during the policy term. we will pay future premiums on your behalf. coronary artery by pass graft surgery. 38 .

000. 15. Accessing money You can make lump sum withdrawals from you funds provided the fund balance after withdrawal and charges does not fall below Rs. The minimum withdrawal amount is Rs.Eligibility The age and term limits for taking out a Unit Linked Young Star Plan are: (Years) Minimum Term Life Option Life and Health Option 10 10 Maximum Term 25 Minimum Age at Entry 18 Maximum Age at Entry 60 Maximum Age at Expiry 75 25 18 55 65 Surrendering the policy The policyholder can surrender the policy at any point of time during the contract term.000. The amount payable will be the unitised fund value after applying additional surrender charges mentioned below. 39 . 10.

the basic sum assured plus any bonus additions is provided. This plan also helps provide for the needs of your family in your absence by paying them the basic sum assured plus any bonus additions in the event of your unfortunate death during the term of the policy.Money Back Plan It is a participating (with profits) insurance plan that offers the following features: Payment of cash lump sum. This is over and above the earlier payouts. This plan helps you plan for future anticipated expenses by paying periodic cash lump sum to you at regular intervals. each of which is a proportion of the basic sum assured. (Please refer to the table given below.) on survival up to maturity. at 5-year intervals during the term of the policy. Benefits You can add the following optional benefits to customise your policy to suit your needs: 40 . a payment equal to the basic sum assured plus any bonus additions less the cash lump sums paid earlier is provided. In case of the unfortunate death of the life assured within the term of the policy.

• Additional Term Benefit (ATB) provides an additional amount. The eligibility ages are as follows: Basic Policy Basic policy with optional benefits CI ATB ADB WOP 41 . All optional benefits must be selected at the outset of your plan. The waiver is applicable during the period of total disability. no further Critical Illness Benefit is payable.• Critical Illness (CI) Benefit provides an amount. your basic policy continues even after we pay a claim on this benefit. equal to the sum assured chosen under this optional benefit. \ • Accidental Death Benefit (ADB) provides an additional amount equal to the basic sum assured in case you die: . • Waiver Of Premium (WOP) Benefit waives the premium for you in case you become totally disabled. in case of your unfortunate death. The sum assured is payable if you survive for 30 days after the date of the claim. Eligibility This plan can be taken on a single life basis or a joint life (first claim) basis. However. equal to the sum assured chosen under this optional benefit. Once such a claim has been met. and .within 90 days of the accident. on diagnosis of any one of the 6 common critical illnesses.due to an accident.

age of expiry 12 60 75 18 5 70 18 60 75 18 55 65 18 50 60 PAYMENT OPTIONS You have the choice of paying your premium either in yearly. age of entry Max. age of entry Max. depending on your convenience 42 .Min. half-yearly or quarterly modes.

on death. your policy will cease. a terminal bonus might be payable. 43 .SINGLE PREMIUM WHOLE LIFE INSURANCE Single Premium Whole of Life Insurance Plan is well suited to meet your long term investment needs. You pay a single premium and the policy will pay you a lump sum. The fund aims to provide secure and stable long term growth. 15th. In addition. Flexibility of term: Even after choosing your policy. you can choose to receive the sum assured plus any attaching bonuses. 20th and subsequent five-year anniversaries. This participating (with profits) plan offers you the following Benefits: A sound investment: Your money will be invested in our With Profits fund. For 4 weeks after any one of the 10th. you can decide on the policy term. Once the money has been received. in full. we will declare a compound reversionary bonus for your policy every year and add it to your policy on its anniversary. Normally. surrender or on the guaranteed dates.

In case of unfortunate death: Your nominee gets the sum assured secured by your premium. No medical requirements: We do not require you to undergo any medical test for this plan.Surrender value: You can terminate the policy any time. Eligibility Minimum age at entry : 18 years Maximum age at entry : 70 years You can buy the product on a single life basis. Tax benefits Tax benefits under Section 88 of the income Tax Act are applicable on premiums up to 20% of the sum assured. after it has been in force for at least 6 months. Payment options A single premium can be paid by cash. cheque or demand draft. and receive a surrender value. plus any attaching bonuses. 44 .

after which you will start receiving your pension. which is designed to provide an income for life from retirement. It does this by accumulating a national lump sum on retirement. Can I take the national lump sum as cash on retirement? Subject to the prevailing legislation and regulations. with an option to take the lump sum elsewhere to buy the annuity. which is designed to provide an income for life from retirement. provide it is permitted by the prevailing regulations. • Your commitment. Mode of premium You can pay either a single premium or pay premiums is quarterly half yearly or annual form by cheque. 45 . • Plan is basically a savings contract. in cash or by bank drafts.PENSION PLAN • The policy is basically a saving contract. comprising of sum assured plus any attaching bonus. You agree to pay a single premium or level premiums with installments due every quarter half-year or year throughout the deferment period of the policy. part of this can be taken as a lump sum and the rest used to buy an immediate annuity.

Eligibility The age and term limits for looking out a personal pension plan area: Minimum Term Maximum Term Maximu m Age Maximu entry Minimum Retirement Maximum of Retiremen t m Age of age of age RP 10 SP 5 RP 40 SP 15 RP 18 SP 35 60 50 70 What if I need money? Loans There is no facility for loans against this contract. Tax benefits Tax benefits described in Section 80 CC of the income tax act are applicable (up to Rs.000) 46 . 10.

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Subject to the prevailing regulations. 5. To facilitate increased investment. throughout the term of the policy or a single premium at the start of the policy. the proceeds net of any cash lump sum can be used to buy an annuity with any other insurance company who will accept such business. the unitised fund value will be available to secure pension benefits. either quarterly. 25. Alternatively. Benefits At the chosen vesting date. part of this value can be taken in the form of a cash lump sum and the rest converted to an annuity at the rate then offered by HDFC Standard Life. On vesting the value of your units will be used to buy your retirement benefits.000. which is designed to provide a retirement income for life. Your premiums are invested in units of the investment fund of your choice. On earlier death.000 each year and for single premium. The current maximum limit for any cash lump sum is one-third of the unitised fund value on vesting. we allow additional single premium top-ups at any time. if it is permitted by the prevailing regulations. based on the prevailing unit price.Unit Linked Pension Plan The unit linked pension plan is basically an insurance contract. 48 . The minimum premium amount for regular premium mode is Rs.000. The minimum single premium top-up is Rs. it is Rs. Premiums can be paid by cash. the beneficiary receives the value of your units plus a cash lump sum of Rs 1000. half-yearly or annually. 10. cheque or demand draft. Premiums You agree to pay level premiums regularly.

000. 1. Your basic benefits will be paid by cheque. The beneficiary may use the proceeds to purchase pension benefits for the surviving spouse.On death the unitised fund value will be paid along with a cash lump sum of Rs. Eligibility The age and term limits for taking out a Unit Linked Pension Plan are: (Years) Minimu m Term Maximu m Term Minimu Entry Regular Premiu m Version Single Premiu m Version 5 40 18 65 50 70 10 40 18 60 50 70 Maximu Entry Minimu Vesting Maximu Vesting m Age of m Age of m Age of m Age of TAXATION 49 .

00. 50 .000/Above Rs 250. Pension plans are eligible for a deduction under Sec.000/. 80D. there would be a surcharge @ 10%.to 125. Life insurance plans are eligible for deduction under Sec. 80C.000/Above Rs 150. subject to norms prescribed in that section. 4. Life insurance and retirement plans are effective ways of saving taxes.to 250. 2.000/.000. The proceeds or withdrawals of life insurance policies are exempt under Sec 10(10D).000/Above Rs 125. Health riders are eligible for deduction under Sec.000/.000/Senior citizen Nil Nil Nil 20% 30% Rate of tax Women below 65 years Nil Nil 10% 20% 30% Others Nil 10% 10% 20% 30% Surcharge on Income Tax: In case where the Total Income exceeds Rs 10. 3.) Up to Rs 1. Education Cess on Income Tax: Education Cess @2% will be payable on the amount of income tax (including surcharge). 10. Tax Rates for Individuals The rates of income tax for FY 2005-06 are as follows: Total Income (Rs.to 150. 80CCC. The tax breaks that are available under various insurance and pension policies are described below: 1.TAX BENEFITS OF INSURANCE AND PENSION PLAN.000/Above Rs 110.

2 Eligible Savings: Premiums paid or deposited by assessee to effect or to keep in force insurance on the life of following persons: In case of individual assessee – Himself/herself.Deduction under Section 80C 1 Category of assesses allowed deduction: Individual assessee and Hindu Undivided Family assessee. 51 . As per this Section.000 in savings specified under Section 80C (including life insurance premiums). 4 Limit on amount of deduction: Deduction will be restricted to investments of up to Rs 100. spouse.000. If any investments have been made under Section 80CCC and 80CCD.Section 80CCC 1 Permitted Deduction: Section 80CCC allows for deduction of premiums paid under a pension plan. then deduction will be allowed only for premiums up to 20% of the sum assured. 2 Disallowance: This benefit will be reversed if the policy lapses / is cancelled. Premiums paid for Pension plans . 20% limit: If the amount of premium paid in a financial year for a policy is in excess of 20% of the actual capital sum assured. 5.000 by an individual is allowed as deduction from his total income. then the qualifying amount under Section 80C will stand reduced to that extent. Deduction limit: The amount of deduction will be equal to the amount by which the income tax payable on such total income is in excess of the amount by which the total income exceeds 100. children of such individual In case of HUF assessee – any member 3. a premium paid up to Rs 10.Premiums paid for Life insurance .

was aged 65 years or more at any time during the financial year in which the premium was paid.000/-. or 52 . this rule does not apply to following amounts: Sum received under Section 80DD (3). for whose health insurance the premium was paid. the limit of deduction under Section 80CCC will be part of the overall limit prescribed under Section 80CCE.Section 80D I) Category of assessee allowed deduction: Individual assessee and Hindu Undivided Family assessee.000.000/. In case of HUF assessee – any member of HUF III) Deduction and upper limit: The qualifying amounts under Section 80D is up to Rs 10. including the sum allocated by way of bonus on such policy is exempt from tax. 80CCC and 80CCD will be limited to Rs 100.Section 10(10D) As per Section 10(10D) of Income tax Act. However.3 Limit: It may be noted that from FY2005-06. However. II) Eligible premiums: Premiums paid by assessee by cheque out of his taxable income to effect or to keep in force an insurance on the health of following persons: In case of individual assessee – Himself/herself. the maximum amount of deduction that an assessee can claim under Sections 80C. dependant children and dependant parents.Section 80CCE A new Section 80CCE is proposed to be inserted from FY2005-06. Such amounts of premium paid would be allowed as deduction from the total income of the assessee. As per this section. Benefits under insurance policy . spouse. Premiums paid for medical insurance . 1961. a higher amount of up to Rs 15.is permitted if the person. any sum received under a life insurance policy. Overall deduction limit .

he shall be entitled to a deduction from the income tax on such income. Rebate in respect of Securities Transaction Tax (STT) paid 1 Section 88E has been introduced by Finance Act (No 2) of 2004.Any sum received under a Key man Insurance Policy. where total income of an assessee includes any income under the head ‘Profits and Gains from Business or Profession’ arising from taxable securities transactions. 3 Amount of deduction: Amount of STT paid in respect of taxable securities transactions entered into in the course of business during that previous year 4 The deduction will be allowed if proof of payment of STT is furnished along with the return. The proof has to be furnished as per the format prescribed by Income Tax. or Any sum received other than as death benefit under an insurance policy which has been issued on or after April 1 2003 and if the premium paid in any of the years during the term of the policy is more than 20% of the sum assured. 2 As per the provisions. COMPARITIVE ANALYSIS CONTENTS 53 . 5 Maximum deductions shall be equal to the amount of income tax on above income.

2 lakhs Bid Value of the fund units . 20 (age-based) multiples are allowed as Survival benefit Sum Assured. 10.000. HDFC PENSION –II VS LIC BIMAPLUS HDFC PENSION-II VS BIRLA FLEXI SECURE LIFE RETIREMENT VS BAJAJ ALLIANZ UNIT GAIN VS LIC BIMAPLUS HDFC Features Age Term PENSION 18 .60 years 10 .30 years BIRLA Flexi Secure Life Retirement 18 .55 years Minimum Sum Assured is Rs. Value of Fund at Bid price 10 years Maximum limit up to Rs. Zero Death Benefit is also available. HDFC PENSION-II VS BIRLA FLEXI SECURELIFE RETIREMENT 2. 50.1. Value of units partly in cash partly converted to 54 LIC Bima Plus 12 .60 years Minimum Term of 10 years Allianz Bajaj Unit gain 0 – 60 years Choice rests with the consumer with a minimum premium payment term of 3 years Sum Assured Only 5. Unit Value is used to purchase an annuity Minimum Sum Assured is 5 times the premium paid. HDFC PENSION-II VS BAJAJ ALLIANZ UNIT GAIN 3.

Value of units in this no sum assured is given. Minimum Rs. Available p.000 p. Partial or Withdrawal benefit No Partial withdrawals are available. case the Sum Assured is zero. Death during the 10th year .a. 5.a Not available 5 Fund allowed Nourish.000 10.000 p.30% of SA + value of units.a. Growth and Equity Fund. Higher of Sum Assured or value of units. 10. 55 Balanced. . 10. Only an increase in contribution is Minimum Rs. No Partial withdrawals are available complete withdrawal at bid price after 3rd year Contribution/ premium Flexible contribution Investment Minimum: Rs. Not available Minimum: Rs. Premature withdrawal allowed after one year (after applying bidoffer spread.60% of SA + value of units.105% of SA + value of units.000 p. Value of units.Death benefit annuity.a. next 6 months . Death after 1st year SA + value of units. Death during the first 6 months .

Cash Fund Secured & Risk Surrender Value Surrender is available from the 1st year itself.. Defensive Managed. Liquid & Growth The surrender charge is 25% of 3 years of regular premium. minimum top-up of Rs.000 Available Available (Charges: 1. No years Enrich Debt Fund. with a a minimum top-up of Rs 5.options OptionsBalanced. Available with Available. in the 3rd year the A selling / purchase price be applicable from the 3rd year onwards Partial surrender up to 50% of units allowed after 3 years from date of commencement spread of 5% will bid value of charges after 3 the 2nd year the Top-up charges are 25%. Balanced Fund.5% of the top-up) 2 free switches every Three free year. Safe Managed. Cost of switching is 2% of the fund switches every policy year. 24 Switches are free. 10. Every additional switch will be charged at 56 Switch No free switches. in charges are 50%. Subsequent . In the 1st year surrender charges are 75%.000 and maximum of 20% of sum assured.

Not Available of the fund per policy fund.8% annum Available Fund Management Charges Bonus units A fund based fee of 2.25% p. 2nd year . 3rd yr onwards.a.2%. BIRLA SUN LIFE. LIC.a.a. 20 per month Admin Charge Admin charges of Rs. 100.0. 2nd yr. Charges 1st year . Not Available Available RESEARCH METHODOLOGY STUDY The present investigation is a descriptive type of study undertaken to estimate the comparative study pension plan of HDFC SLIC. BAJAJ ALLIANZ.1%.25 % p. of net assets Not applicable 1% of the fund per annum Not Disclosed value.27%. 3rd year . Least in the industry 0. whichever is higher.70%. of fund. SAMPLE SIZE 57 .5% of the switch amount. Initial Charge Charges 1st yr-27%. No charges from the 4th year onwards Annual admin charges of 1. Policy admin fee of Rs.180 fixed charge Per annum. of the Annual investment charge of 1% p. switches would be charged @1% of switch amount or Rs.1% Charges 20% of the initial premium in the 1st year and 2% of the premium from the 2nd year onwards.

1.For the purpose of analysis a sample size of different companies were selected. 58 . and the final data was analyzed systematically to achieve the desired result. This procedure gives each item an equal probability of being selected. The sample size taken was 4. Interpretation has been done on the basis of the features mentioned in the table. And HDFC is offering investment for maximum 30 years which is rated as second best in this feature. DATA COLLECTION SECONDARY DATA The secondary data was collected by referring through web sites. DATA ANALYSIS AND INTERPRETATION After analyzing the data above in the table we came to the following interpretation. This type of sampling is also known as probability sampling where each and every item in the population has an equal chance of inclusion in the sample and each one of the possible samples. AGE AND TERM OF POLICY: Since the minimum age is minimum in BAJAJ ALLIANZ and the term depends on the customer. The customer has probability of getting the maximum returns (all other things being equal). SAMPLING METHOD The sampling method used for the project was “Random Sampling”.

7. Safe Managed fund. FLEXIBLE CONTRIBUTION: This feature is available in HDFC SLIC where a customer can increase or decrease its premium. but initial charge is second lowest which is also not bad in terms of investment. 59 . INVESTMENT OPTIONS: HDFC SLIC provides you the maximum funds for investment (Balanced fund. SWITHCHES: After analyzing the feature the conclusion drawn is that HDFC is offering the most switches in the year. CHARGES: The charges levied on the policy of the insurer is lowest in HDFC SLIC like FMC. 3. So HDFC SLIC provides you better portfolio to diversify your funds which reduces the risk and maximizes the return.2. Liquid fund & Growth fund). Defensive Managed fund. 6. but only Bajaj Allianz is offering an increase option only. Here we could see that people with low income can increase the premium with small amount. 4. 5. BONUS UNIT: Only two firms are offering bonus unit to the customer and they are HDFC SLIC and LIC. WITHDRAWALS: Withdrawals not allowed in HDFC SLIC & BIRLA SUN LIFE because if withdrawals are there plan would not yield good return. PAC. TOP UP: In HDFC SLIC the minimum top up is of RS 5000 with no charges levied but in others it is Rs 10000. 8.

60 . Premium allocation charge (initial charge) should be reduced to provide customer with better return. 2. CONCLUSION Based on comparative study HDFC SLIC is on the upper side in the private life insurance companies in comparison to Birla sun life.RECOMMENDATIONS 1. Bajaj Allianz. 3. Policy administration charge should be reduced to gain more advantage in the market. Surrender charges should be reduced.

birlasunlife. Defensive Managed fund..HDFCINSURANCE. BIBLOGRAPHY  WWW.com  www. Birla sun life.com  WWW.com  www.e.GOOGLE. 5 namely Balanced fund.COM 61 . switches facility and maximum number of investment funds in offering (i.COM  www. Bajaj Allianz are also not far behind HDFC SLIC. Safe Managed fund.irda. Liquid fund & Growth fund ) but the rest of the insurance player that is LIC.LICindia.HDFC SLIC based on the comparative study has many advantage in this segment of product like fund management charge.

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