Reliance life insurance policies

Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Insurance is a collective bearing of risk. Insurance is a financial device to spread the risks and losses of few people among a large number of people, as people prefer small fixed liability instead of big uncertain and changing liability. Insurance can be defined as a legal contract between two parties whereby one party called insurer undertakes to pay a fixed amount of money on the happening of a particular event, which may be certain or uncertain. The other party called insured pays in exchange a fixed sum known as premium. Insurance is desired to safeguard oneself and ones family against possible losses on account of risks and perils. It provides financial compensation for the losses suffered due to the happening of any unforeseen events. The Business of Insurance is related to the protection of the economic values of the assets. Every human being has the tendency to save to protect him from risks or events of future. Insurance is one form of savings where in people try to assure themselves against risks or uncertainties of future. It is assurance against risks or events or losses. People can save their earnings either in the form gold, fixed assets like property or in banking and insurances. All the savings of people of a country account for gross domestic savings. In India, although savings rate is high but people prefer to invest either in gold or fixed assets so that they can make money out of it. Hence insurance sector is still untapped in India. Insurance is a tool by which fatalities of a small number are compensated out of funds (premium payment) collected from plenteous. Insurance is a safeguard against uncertain events that may occur in the future. It is an arrangement where the losses experienced by a few are extended over several who are exposed to similar risks. It is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premium to provide security for the purpose. Loss is paid out of the premium collected from people and the insurance companies act as trustees to the amount so collected. These companies

Reliance life insurance policies

have proposal forms which are filled to give details of insurance required. Depending upon the answers in the proposal form insurance companies assess the risk and decide on the premium. Insurance companies are risk bearers. They underwrite the risk in return for an insurance premium. the function of insurance is to provide protection, prevent losses, capital formation etc. hence insurance can be defined as a tool in which a sum of money as a premium is paid by the insured in consideration of the insurers bearing the risk of paying a large sum .it may also be defined as a contract wherein one party (insurer) agrees to pay the other party (insured) or his beneficiary, a certain sum upon a given contingency against which insurance is required. Insurance industry commands massive funds through sales of insurance products to large number of clients. Insurers also create liabilities and commit themselves to compensate for losses occurring to the policyholders on future date. It also plays an important role in process of capital formation. From the above discussion we can find out some of the important characteristics of insurance which are as follows: 1. Pooling of losses 2. Payment of fortuitous losses 3. Risk transfer 4. Indemnification

IMPORTANCE:

Insurance constitutes one of the major segments of the financial market. Insurance services play predominant role in the process of financial intermediary. Today insurance industry is one of the most growing sectors in India. There is lot of potential in the Indian Insurance Industry. There are many issues, which require study. The scope of the study of insurance industry of India would be very great as there are ongoing developments in the industry after the opening of the sector. The major issue right now is the hike in FDI

Reliance life insurance policies

(Foreign Direct Investment) limit from 26% to 49% in the insurance sector. Government may in near future allow 49% FDI in Insurance. This would lead to more capital inflow by foreign partners. Another major issue is the effects on LIC after the entry of private players in the market. Though market share of LIC has been affected, it has improved in terms of efficiency. There are number of other hot topics like penetration of Health Insurance, Rural marketing of insurance, new distribution channels, new product ranges, insurance brokers regulation, incentive scheme of development officers of LIC etc. So it offers lot of scope for studying the insurance industry. Right now the insurance industry has great opportunities in a country like India or China which huge population. Also the penetration of insurance in India is very low in both life and non-life segment so there is lot potential to be tapped.

A BASIC DIFFERENCE BETWEEN INSURANCE & ASSURANCE:

Assurance is older in history and it was used to describe all types of insurances. From 1826, the term assurance came to be used only for the risks covered by life insurance and the term insurance was exclusively used to denote the risks covered by marine, fire, etc. The word assurance indicated certainty. In life insurance, there is an assurance from the insurance company to make payment under the policy either on the maturity or at earlier death. On the other hand the word insurance was used to denote indemnity type of insurances where the insurance company was liable to pay only in case of the loss damage the property. The insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insurance. The principle of indemnity applies to insurance contracts (non-life) only. The scope of the word, insurance is wider.

PRINCIPLES OF INSURANCE:

An insurance contract is based on some basic principles of insurance.

Reliance life insurance policies

(1) Principle of Uberrima Fides or Principle of utmost good faith: It means maximum truth. Both the parties should disclose all material information regarding the subject matter of insurance.

(2) Principle of indemnity:

This means that if the insured suffers a loss against which the policy has been made, he shall be fully indemnified only to the extent of loss. In other words, the insured is not entitled to make a profit on his loss.

(3) Principle of subrogation:

This means the insurer has the right to stand in the place of the insured after settlement of claims in so far as the insureds right of recovery from an alternative source is involved. The insurer before the settlement of the claim may exercise the right. In other words, the insurer is entitled to recover from a negligent third party any loss payments made to the insured. The purposes of subrogation are to hold the negligent person responsible for the loss and prevent the insured from collecting twice for the same loss. The concept of Third Party Claims is based on the same principle. (4) Principle of causa proxima:

The cause of loss must be direct and an insured one in order to claim of compensation.

(5) Principle of insurable interest:

The assured must have insurance interest in the life or property insured. Insurable interest is that interest which considerably alters the position of the assured in the event of loss taking place and if the event does not take placed, he remains in the same old position.

Reliance life insurance policies

GOVERNMENT POLICIES REGARDING LIFE INSURANCE Some of the important acts which have been passed in India to regulate insurance industry are mentioned here: a) Insurance Act 1938: It was the first comprehensive piece of insurance legislation in the country governing both life and non life insurance business. It was aimed to prevent the growth of mushrooming companies and to prevent misappropriation of funds and to protect assets. This act had a strict control over the insurance business and was amended from time to time. Till 1945, it was amended 6 times. Under the chairmanship of Shri Kavas Ji Jahangir, a committee was appointed to investigate all the misconduct of insurance business. According to this act, the central government had control over the insurance business through the Controller of Insurance. The insurance companies must follow the rules and regulations else they would be penalized. The act of 1938 applied to all types of insurance business-life, fire, marine etc. It also governed the provident companies, mutual offices and cooperative societies. According to one of the provisions of this act, there is prohibition of transaction of insurance business by certain persons. To prevent the growth of insurers of small financial resources, this act provided for registration of all insurers and a substantial deposit in the RBI. Further under this act, no person shall, after the commencement of this act, begin to carry any class of insurance business in India and no insurer carrying on any class of insurance business in India shall after the expiry of 3 months from the commencement of this act, continue to carry on any such business unless he obtained the certificate of registration for the particular class of insurance business. b) Life Insurance Corporation Act 1956:

Reliance life insurance policies

Life insurance business in India was nationalized with effect from January 19, 1956.on the date, 16 non Indian insurers operating in India and 75 Provident Societies were taken over by Government of India. This act came into effect from July 1 st 1956.Life Insurance Corporation of India commenced its functioning as a corporate body. Under this act, LIC shall be a body having perpetual succession and a common seal with power, subject to the provisions of this act to acquire, hold and dispose of property and may by its name sue and is used. The original capital of the corporation shall be Rs 5 crores provided by the government and the terms and conditions relating to the provisions of capital shall be determined by the central government. It is the general duty of the corporation to carry on life insurance business whether in India or outside, and the corporation shall exercise its powers under this act towards the development of life insurance business to the best of the advantage of the community. C) Insurance Regulatory and Development Authority (IRDA) 1999: Reforms in the insurance sector were initiated with the passage of the IRDA bill in December 1999.it was set up as an independent body and it has been able to frame globally compatible legislations. The IRDA was set up to protect the interests of holders of insurance policies ,to regulate ,promote and insure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. This act extends to whole of India. With the establishment of this act, government amended Insurance act 1938, Life Insurance Act 1956 and General Insurance Act 1972. IRDA was formed on the recommendations of Malhotra Committee. In 1999 government of India has set up Malhotra Committee to examine the structure of insurance industry and recommend changes, under R.N Malhotra former governor of RBI.

Reliance life insurance policies

HISTORY OF INSURANCE

GLOBAL: For now we know the meaning of insurance, different types of insurance. Now let us know the history and reasons for and behind different types of insurance. Insurance has existed for thousands of years. The first ever type of insurance was Property Insurance. It became popular about 3000 BC in China. It all started when Chinese merchants, as well as their investors, wanted to ensure that they would see a profit from their goods that they shipped overseas. In the event that a ship was lost at sea, an insuring partner would reimburse the owners of the ship and goods. To pay for the loss the merchant would be sold into slavery to the insurer until the debt was repaid. This was so because, a merchant could not afford to pay for the lost goods or even to buy a ship unless someone invested. Property insurance was also seen in Babylon as well. In Babylon, merchants and investors entered into a contract, in which the supplier of money for a trade agreed to cancel the loan if the trader was robbed of his goods. The trader who borrowed the money paid an extra amount for this protection in addition to the usual interest. As for the lender, collecting these premiums from many traders made it possible for him to absorb the losses of the few. Later this contract was extended to include provisions for a family's home and even the death of the insured, where life insurance came into existence. Slowly this concept started to spread across other places like Greek, Roman. Since ancient times, communities have pooled some of their resources to help individuals who suffer loss. Like, about 3500 years ago, Moses instructed the nation of Israel to contribute a portion of their produce periodically for "the alien resident and the fatherless boy and the widow."

Reliance life insurance policies

Later the origin of credit insurance, which was included in the Code of Hammurabi, a collection of Babylonian laws said to predate the Law of Moses. Credit insurance means, in ancient times the ship owners obtained loans from investors to finance their trading expeditions. In case, if a ship was lost, the owners were not responsible to pay back the loans to the investors. The risk to the lenders was covered by the interest paid by numerous ship owners, since many ships returned safely. By the middle of the 14th century, marine insurance was one of the most popular types of insurance among nations of Europe. Things changed dramatically in the 17th century in Europe. In 1666, the Great Fire of London bought the need for fire insurance .The Great Fire of London burned for four days and nights. It destroyed 436 acres, 13,200 houses, 89 churches (including Saint Paul's Cathedral), the Custom House, the Royal Exchange and dozens of other public buildings. Only six people were victims in the flames, but hundreds died from shock and exposure. By 1688, Edward Lloyd was running a coffeehouse in London. Where, London merchants and bankers met informally to do business. There financiers who offered insurance contracts to seafarers wrote their names under the specific amount of risk that they would accept in exchange for a certain payment, called premium. These insurers came to be known as underwriters. Finally, in 1769, Lloyd's became a formal group of underwriters that in time grew as an insurance company. The concept of insurance developed at a fast pace with the growth of British commerce in the 17th and 18th century. The first stock companies to engage in insurance were chartered in England in the year 1720. In 1735, the first insurance company in the American colonies was founded at Charleston. Later in the year 1787, fire insurance corporations were formed in New York. Then later in the year 1759, the life insurance corporation was started in Philadelphia, America. The New York fire which occurred in the year 1835 was the main reason to draw attention to create reserves to meet unexpected losses. In the year 1837, Massachusetts was the first state to require companies by law to maintain such reserves. After 1840, life insurance entered a boom period. The Workmen's Compensation Act of 1897 in Britain required employers to insure their employees

Reliance life insurance policies

against industrial accidents. Public liability insurance, fostered by legislation, made its appearance in the 1880s.It attained major importance with the advent of the automobile. Until the 1950s, most insurance companies in the United States were restricted to provide only one type of insurance, but then legislation was passed to permit fire and casualty companies to underwrite several classes of insurance. Many firms have since expanded and also were responsible for many mergers. From this brief accounting of history we can see how insurance came into existence. Fortunately for us we no longer have to sell ourselves into slavery if our car is stolen nor we have to be scared of losses due to absence of reserves. However we can be confident that we will be compensated for our loss. Without people wanting to secure their investments and great tragedies throughout history we may not have insurance as we know it today resulting in peace of mind.

HISTORY OF INSURANCE INDUSTRY IN INDIA: The insurance industry in India over the past century has gone through big changes. In India this industry reveals the 360 degree turn. 360 degree turn means that it started in India from being an open competitive market to nationalization and back to a liberalized market again. Insurance industry in India started as a fully private system with no restriction on foreign participation in the Nineteenth Century. Before independence, a few British insurance companies dominated the Market. Life insurance was first set up in India through a British company called the Oriental Life Insurance Company in 1818, followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829.All of these companies operated in India but did not insure the lives of Indians. They were there insuring the lives of Europeans living in India. Some of the companies that started later did provide insurance for Indians. But, they were treated as "substandard" and therefore had to pay an extra premium of 20% or more. The first

Reliance life insurance policies

company that had policies that could be bought by Indians with "fair value" was the Bombay Mutual Life Assurance Society starting in 1871. The first general insurance company, Triton Insurance Company Ltd., was established in 1850. It was owned and operated by the British. The first general insurance company was the Indian Mercantile Insurance Company Limited set up in Bombay in 1907.By 1938; the insurance market in India had nearly 176 companies (both life and non-life). After the independence, the industry went to the other extreme. It became a stateowned monopoly. The industry started to witness a problem like fraud. Hence many regulations were put in place to reduce and control the problems in the industry. After which Insurance was nationalized. In 1956, the then finance minister S. D. Deshmukh announced nationalization of the life insurance business and then the general insurance business was nationalized in 1972. Only in 1999 private insurance companies have been allowed back into the business of insurance with a maximum of 26% of foreign holding.

CONTRIBUTION OF THE INSURANCE SECTOR TO INDIAN ECONOMY: Some surveys have predicted that India and China will play a very vital role in the years to come. Indian economy can be termed as an emerging economy as it is doubling its GDP in 3 to 5 years and moreover it is not dependent on any particular sector for its GDP. If we look at the GDP of the Indian economy very closely over the years, we can easily come to know the changing structure of the economy. We can also come to know the changing contribution of the various sectors like agriculture, manufacturing and the service sector. In the financial year 1993-94, agricultural sector contributed to 31%, manufacturing accounted to 26.3% and the service sector contributed to 42.7% of the total GDP of the country. Thus over the years as India became an emerging economy in

10

Reliance life insurance policies

2003-04 manufacturing sector contributed for 21.7 %, manufacturing contributed for 26.8 whereas service sector contributed for 51.4% of the total GDP. There has been 7.5% growth in the total GDP of the country and is estimated to grow at 7.5% in 2005-06. The Indian economy has shown signs of strong performance despite a rise in oil prices, high inflation rate and abnormal rains in many parts of the country. The overall growth of the Indian economy has been equally supported by all the three sectors of the economy, i.e. the agriculture, manufacturing and the service sector. Insurance, together with the banking sector, contributes to about 7.1 % of the total GDP of India, and the gross premium collected contributes to about 2% of the total GDP of the country The insurance sector in India has completed a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost 200 years.

11

Reliance life insurance policies

RELIANCE LIFE INSURANCE:

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services. Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services. Reliance Life Insurance is another steps forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporate.

ABOUT RELIANCE LIFE INSURANCE Reliance Life Insurance offers you products that fulfill your savings and protection needs. Our aim is to emerge as a transnational Life Insurer of global scale and standard. Reliance Life Insurance is an associate company of Reliance Capital Ltd., a part of Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services.

12

Reliance life insurance policies

Reliance Life Insurance Company Ltd. is one of the major market players in insurance sector. It is an associate company of Reliance Capital Ltd., a part of Reliance Anil Dhirubhai Ambani Group. Being one of the top 3 private sector financial services companies in India, Reliance Insurance aims at "empowering everyone live their dreams". Reliance Life Insurance or RLIC has insured more than 1.7 Million people in 2 years of operation. Not only this, it is certified ISO 9001:2000 for all the processes. To add another feather to its hat, Reliance Life Insurance was awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007Certificate of Merit.

Vision & Mission; Vision: Empowering everyone to live their dreams Mission;

13

Reliance life insurance policies

Create unmatched value for everyone through dependable, effective, transparent and profitable life insurance and pension plans. Our Goal; Reliance Life Insurance would strive hard to achieve the 3 goals mentioned below:

Emerge as transnational Life Insurer of global scale and standard Create best value for Customers, Shareholders and all Stake holders Achieve impeccable reputation and credentials through best business practices

CORE VALUES: Reliance Life Insurance Company Limited has some core values which are listed as follows: 1) Result Oriented 2) Performance Driven 3) Customer Focused 4) Learning and Development Oriented 5) Employee Centric 6) Informal and Fun

Achievements:

RLIC closed the last financial year with a New Business Premium of Rs. 3513 Crores.

For 3 successive years, since inception, the Company has been amongst the fastest growing Companies in the Life Insurance Industry achieving a growth rate of 28% in the last financial year against a market growth of -6%. In the

14

Reliance life insurance policies

Individual Business segment, the company achieved a growth rate of 59% in terms of WRP against the private industry growth of 1%.

Reliance Life has been one of the fastest gainers in market share growing from 1.9% amongst private players in Mar'06 to 10.3% as of Mar'09. This has resulted in the Company growing to becoming the 4th largest private player in just two years starting at position of 11.

The Company has been the fastest company to reach the 3 million policy mark and was the 3rd largest private insurer in terms of Policy count in 2008-09

Reliance Life has accomplished a large distribution ramp-up in the Industry in a short span of time by opening 1145 branches in just over 2 year.

RLIC continues to be amongst the foremost Life Insurance companies in India to be certified ISO 9001:2000 for all the processes.

Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007- Certificate of Merit in the Financial Services category by Council for Fair Business Practices (CFBP).

The Company has also won the DL Shah Quality Council of India Commendation Award in the services category in Feb. 2008 for its work on promoting 'self help channels for service'

ROLE OF IT AT RELIANCE LIFE INSURANCE

1) World Class Data Centre: They plan to establish a Primary Data Centre at Navi Mumbai (Dhirubhai Ambani Knowledge City) which will cater to their company needs across India, with fail-over capability to their Chennai Data Centre within the same business day in occurance if an incident or Disaster happens.

15

Reliance life insurance policies

2) Inter Office Connectivity: All their Branch / Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to Core Applications like Lotus Mail, Life-Asia and Internet Applications. This will enable their associates to work faster and better with high-speed Internet connectivity and also ensure faster Turn around Time for their customers.

3) Customer Care Centre: They will host a centralized Customer Care Centre at Dhirubhai Ambani Knowledge City at Navi Mumbai, which cater services to internal and external queries and complications. A customer Relationship Management Tool (CRM) and Lead Management System (LMS) are in progress.

4) Web Portal: This portal will be an interface between both internal employees and their external users. Some of the functions included in their portal are Policy Tracking Systems, Corporate News, Quality Checking System, Under Writing Medical System, and Agent Management System etc.

5) R World: Reliance Mobile R-World will provide online information about their Company, Products, and Policy Services to their existing customers, Agents/Advisors and Lead Generators.

6) SMS Alerts: SMS Alerts will be provided to their Sales Managers about the latest happenings like Contests and Campaigns, Employee Alerts will include Company News and Welcome/Birthday/Anniversary message etc. Customer Alerts will include

Welcome/Birthday/Anniversary message, Policy Dispatch Details, Policy Servicing SMS like Premium Receipt and Renewal Premium reminders etc.

7) Life and Group Asia: -

16

Reliance life insurance policies

Single Life and Group Life details will be captured and managed by Life and Group Asia. A common middleware between these applications will enable Group Life Customers to view their individual Single Life Insurance Plan details taken with Reliance Life Insurance and vice versa.

8) Advisor Lounge: It is a dedicated area for Reliance Life Insurance Agents/Advisors in all the branches across India. This Lounge will be equipped with desktops and printers with Internet connectivity, where their Advisors can bring in the prospects and can have discussions across the table and they can create and print quotes. The Agents/Advisors can use this area to service their existing customers.

9) Document Management System: DMS will enable both policy issuance and contract servicing through an automated workflow, which yields a faster Turn around Time to both internal and external users. This application will enable them to have a paperless office and thus mitigate the risk of losing vital records/papers.

10) Wireless Data Access: This will enable identified Top Sales Managers and Top Advisors to access real time data for both LMS and CRM on the fly through Handheld PDA device. 11) SAP ERP Modules: SAP (Finance and HR Modules), will automate the Expense, Travel and Leave Management Systems.

17

Reliance life insurance policies

PLANS

Protection Plans :

Protect your family even when youre not around by investing in Reliance Protection Plans. Choose a limited period plan or a lifetime protection plan depending on your needs In todays uncertain world, there could be calamity at every step of the life. It is up to you to ensure that your family stays protected always. Reliance Protection Plans helps you do exactly the same. You have a wide range of options to choose a plan from. Right from limited period plans to lifetime protection plans, you can opt for the one that suits your lifestyle. While we understand that nothing can compensate for the loss of a life, we intend to provide you the peace of mind. Investing in Reliance Protection Plans would mean your familys future is in safe hands.

Protection Plans: Reliance Term Plan :

18

Reliance life insurance policies

Invest in the Reliance Term Plan, a pure life insurance plan that offers you comprehensive and affordable coverage for a limited period of time to suit your needs.

Key Features: Get higher insurance protection at economical rates Optional Accidental and Disablement Rider to enhance protection Economical way to protect your family against financial liabilities like loss of income and outstanding loans etc. Discount on premium rates for women Suitable for business owners who want to cover the life of their key employees.

RELIANCE SIMPLE TERM PLAN :

Make a smart investment move by investing in the cost-effective Reliance Simple Term Plan, which offers you comprehensive coverage for a specified period of time to suit your needs. RELIANCE SPECIAL TERM PLAN :

Imagine a life insurance policy, which on maturity returns to you all the premiums you had paid for your basic policy. The Reliance Special Term Plan offers that and much more... Key Features:

19

Reliance life insurance policies

Get higher insurance protection at economical rates Basic premiums paid will be refunded at maturity Choose to pay Regular or Single Premium Discount on premium rates for women Choose to add the Benefits of two riders to your Policy-Critical Illness and accidental Death Benefit and Total and Permanent Disablement Rider RELIANCE CREDIT GUARDIAN PLAN :

The Reliance Credit Guardian Plan secures your family from any loan liabilities you have incurred in case of your untimely demise. On survival at maturity, you will be returned all the premiums paid for the basic policy. Key Features: Different types of loans are covered under this Policy - Housing Loans, Personal Loan, outstanding on credit cards etc. Limited premium paying term Single & Regular Premium payment option Discount on premium rates for women Decreasing term insurance

RELIANCE SPECIAL CREDIT GUARDIAN PLAN :

20

Reliance life insurance policies

Invest in the Reliance Special Credit Guardian Plan and protect your family from any loan liabilities you have incurred. On survival at maturity, all premiums paid for the basic policy will be returned to you. Key Features: Different types of loans are covered under this plan - Housing Loan, Personal Loan, outstanding on credit cards etc. Limited premium paying term Single & Regular Premium payment option Discount on premium rates for women Decreasing term insurance Option to add two Riders Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider. RELIANCE ENDOWMENT PLAN :

The Reliance Endowment Plan gives you financial independence by allowing you to decide the amount of Sum Assured based on your current financial position and expected future expenses Dream! Key Features: On maturity receive Sum Assured plus bonuses Wealth creation through bonus additions More Value for your money by way of High Sum Assured Rebate Choose to add the Benefit of three Riders-Reliance Term Life Insurance Benefit Rider, Reliance Critical Conditions Rider and Reliance Accidental Death and Total and Permanent Disablement Rider Choose to avail of Policy Loan after three years

RELIANCE SUPER FIVE PLUS :

21

Reliance life insurance policies

Imagine an endowment plan that protects you for a certain period even after you have received your lump sumthat is exactly what the Reliance Super Five Plus offers you with other added benefits. Key Features: Twin Benefit of protection and savings Sum Assured is paid on survival, at the end of the Premium Paying Term Life Cover for full Sum Assured continues beyond Premium Paying Term Extended Life Cover for five years after Premium Paying Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Choose to add the Benefit of two Riders - Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider RELIANCE CONNECTS 2 LIFE : The Reliance Connect 2 Life Plan gives you the option to upgrade your life cover to keep pace with your changing lifestyle. As your income grows, your family will have sufficient cover. Key Features: Basic Benefits: Each Reliance Connect 2 Life Plan you purchase pays out the following benefits: Maturity Benefits: On survival of the life assured until maturity, the Plan pays the sum assured plus simple vested bonuses to the policyholder. Death Benefit:

22

Reliance life insurance policies

In case of unfortunate death of the life assured before the maturity date, the Plan pays the sum assured plus simple vested bonuses to the nominee.

Choice of two plans: At the time of initial purchase of Reliance Connect 2 Life Policy, you have two kinds of plans to choose from namely, Gold Plan and Silver Plan. The Reliance Connect 2 Life Gold Plan offers a life cover of Rs. 2, 00,000 initially. You may enhance your life cover to a maximum of Rs. 10, 00,000 in two stages by exercising your option... The Reliance Connect 2 Life Silver Plan offers a relatively lower life cover Rs.1, 00,000 initially. You may enhance your life cover to a maximum of Rs. 5, 00,000 in two stages by exercising your option

Options to enhance life cover:

Under each of the above two plans, you have an option to enhance your life cover amount. At the end of one year from the date of initial purchase of Reliance Connect 2 Life Gold / Silver Plan, you are entitled to enhance your life cover by exercising your option to purchase an additional Reliance Connect 2 Life Policy. Provided you have exercised your option to enhance life cover at the end of the first year, you are entitled to enhance your life cover again at the end of the second year by purchasing an additional Reliance Connect 2 Life Policy. RELIANCE WHOLE LIFE PLAN :

23

Reliance life insurance policies

Give your family a lifetime of timely financial support by investing in the Reliance Whole Life Plan. This will help you enjoy your life to the fullest. Key Features: Insurance protection till age 85 Choice of extending your insurance coverage till age 99 Convenient Premium Payment Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Get Sum Assured plus Bonuses in case of your unfortunate death Option to add two Riders Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider Policy Loan available after three full years premium payment

SAVINGS & INVESTMENT PLANS: In life, you have always given your family whatever they have wanted. Yet, there are some promises you have to fulfill, such as taking your family for a vacation, or buying that dream house. Set aside some money to achieve these specific goals with the help of Reliance Savings & Investment Plans. The plan allows you to experience the joys of life and provide for your familys needs. Enjoy life without worrying about the promises you have madewe are here to fulfill them.

24

Reliance life insurance policies

SAVINGS & INVESTMENT PLANS: Reliance Premier Life : Reliance Premier Life prepares you for the surprises of life as well as provides you guaranteed security. Key Features: Choice of eight different funds to choose from, including a Pure Equity Fund & Sectoral Funds Liquidity through partial withdrawals Unmatched flexibility through switching, top-up's & premium redirection Benefits: Death - Sum Assured plus Fund Value as on date of intimation of death. Maturity - Fund Value as on date of maturity RELIANCE SUPER INVEST ASSURE PLAN :

Reliance Super Invest Assure is a complete plan which addresses your vital needs like Flexibility, Security, Investment Return and Financial Planning. With all its key benefits, it is here to ensure that there will always be more than you can ask for! Key features Reliance Super Invest Assure Plan: Twin benefit of market linked return and insurance protection. Guaranteed additions at the rate of 50% of your first years basic premium at interval of every 5 years from 10th year till policy is in force. Investment opportunity with flexibility -Choose from 8 pure investment fund options.

25

Reliance life insurance policies

Option to pay Top-up premium(s). Liquidity in the form of partial withdrawals. A host of optional rider benefits to enhance protection cover.

TOTAL INVESTMENT PLAN I - INSURANCE :

Reliance TIPS -Series I- Insurance is a Unit Linked Investment + Insurance Plan that helps you meet all your financial needs, without the complexity of managing multiple products. Key Features: This is a Single Premium unit linked savings life insurance plan with options to purchase the same plan with reduced allocation charges in subsequent policy years. Since more Premium is allocated towards investment due to lower allocation charges on subsequent purchases, greater would be the returns. Purchasing the same plan in the subsequent years is an option. 1st purchase would be called as Classic 2nd purchase would be called as Silver 3rd purchase would be called as Gold 4th purchase would be called as Diamond 5th purchase would be called as Platinum

26

Reliance life insurance policies

Once you purchase the first policy there will full flexibility, as to when second and subsequent purchase can be made and how much Premium should be paid for each purchase subject to the following: 1. The minimum Premium on each purchase should be at least Rs. 25000 for life assured aged up to 40 and Rs. 50000 for life assured aged 41 to 64. 2. The maturity date on each purchase cannot exceed 70 years. 3. All the polices should mature on maturity date of the first purchase. 4. The term of the polices purchased during second, third, fourth and fifth policy years will be 9, 8, 7 and 6 respectively. 5. New policy can be purchased only if all the previous polices are in force on the date of purchase of new policy. Plan Objective: The pace setter plan with protection to life which gives Tax benefit under Sec. 80C and Sec. 10(10D)* of Income Tax Act 1961 Investment opportunity with flexibility Life protection Control over your investments RELIANCE SUPER AUTOMATIC INVESTMENT PLAN :

The Reliance Super Automatic Investment Plan is an enhanced unit linked plan that allows you to choose the right investment mix to reap maximum benefits. It also provides you with enhanced Life Cover. Key Features Reliance Super Automatic Invest Plan Two plan options to choose from Ready-made & Tailor-made.

27

Reliance life insurance policies

Life Stage asset allocation to ensure automatic change in investment patterns under Ready-made Plan option. Freedom to decide your own fund mix based on your risk profile under Tailormade Plan Allows Systematic transfer plan to average out the cost of unit purchases in equity. Regular, limited, single premium paying options Unmatched flexibility through our Exchange Option to move between Reliance suite of unit linked products RELIANCE MONEY GUARANTEE PLAN :

To reap the benefits of a rising market and to protect yourself from any market decline, invest in the unit linked Reliance Money Guarantee plan that gives you the perfect balance between Protection and Savings. Key Features: Capital Guarantee: The sum of all premiums paid is guaranteed on maturity or on death before the maturity. Capital Guarantee is available on both the basic premiums as well as on top-up premiums Unique Return Shield feature to protect your returns Choice to invest from 3 pre-packaged investment fund options Unmatched flexibility through our Exchange Option to move between the Reliance Life Insurance Unit Linked products offered, as you grow up the ladder Liquidity in the form of partial withdrawals from top-up fund

28

Reliance life insurance policies

Option to package with Accidental Death & Disability and Term Insurance riders RELIANCE CASH FLOW PLAN : Invest in the Reliance Cash Flow Plan and reap the dual benefits of a life insurance plan and easy liquidity through lump sum cash, which means you can get a percentage of the Sum Assured at periodic intervals. Key Features: Easy Liquidity - Get periodic cash flows at the end of the fourth year and thereafter at the end of every three years Wealth creation through bonus additions On maturity, receive accumulated bonuses along with final lump sum payout More value for your money by way of High Sum Assured Rebate Full Sum Assured plus bonuses in case of your unfortunate death. This is over and above the Survival Benefits already paid Option to add two Riders - Critical Illness Rider & Accidental Death Benefit and Total and Permanent Disablement Rider RELIANCE SUPER MARKET RETURN PLAN :

The Reliance Super Market Return Plan gives you insurance protection and allows you to benefit from investment growth. It works through your life and meets the changing requirements you may have from time to time. Key Features Reliance Super Market Return Plan:

Twin benefit of market linked return and insurance protection

29

Reliance life insurance policies

A Unit Linked Plan, different form traditional Life Insurance products, with maximum maturity age of 80 years Option to create your own portfolio depending on your risk appetite Choose form eight different investment funds Flexibility to switch between funds Option to pay regular as well as single premium & Top-ups Option to package policy with Reliance Major Surgical Benefit Rider, Reliance Critical Conditions (25) Rider, Reliance Term Life Insurance Benefit Rider, Reliance Accidental Death and Total and Permanent Disablement Rider Liquidity through partial withdrawals RELIANCE SUPER FIVE PLUS :

Imagine an endowment plan that protects you for a certain period even after you have received your lump sumthat is exactly what the Reliance Super Five Plus offers you with other added benefits. Key Features: Twin Benefit of protection and savings Sum Assured is paid on survival, at the end of the Premium Paying Term Life Cover for full Sum Assured continues beyond Premium Paying Term Extended Life Cover for five years after Premium Paying Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate

30

Reliance life insurance policies

Choose to add the Benefit of two Riders - Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider Choose to avail of a Policy Loan available after three full years of premium payment RELIANCE SUPER GOLDEN YEARS PLAN - VALUE :

Realise all your dreams of playing golf, or going for a world tour after retirement by investing in the Reliance Super Golden Years Plan Value, which helps you generate the amount you will need for the future. Key Features: Invest systematically and secure your golden years It is a flexible unit-linked pension product different from traditional products with vesting age between 45 & 64 years Eight different investment funds to choose from Flexibility to advance your vesting age Flexibility to switch between funds Tax free commutation of up to one third of fund value at vesting age Life cover and optional Reliance Term Life Insurance Benefit Rider, Reliance Accidental Death and Total and Permanent Disablement Rider, Reliance Major Surgical Benefit Rider, Reliance Critical Conditions (25) Rider.

RELIANCE SUPER GOLDEN YEARS PLAN - PLUS :

Invest in the special Reliance Super Golden Years Plan Plus that not only helps you build the corpus you need after, but also collects a basic minimum amount in case something were to happen before you realise your dreams.

31

Reliance life insurance policies

Key Features Reliance Super Golden Years Plan Plus:

It is a flexible unit-linked pension product different from traditional products with vesting age between 45 & 64 years Invest systematically and secure your golden years Eight different investment funds to choose from Flexibility to advance your Vesting Age RELIANCE IMAAN INVESTMENT PLAN :

For the select few like you, Reliance Imaan Investment Plan is an enhanced Unit Linked plan addressing comprehensive needs to strike that perfect balance of Protection and Savings. Key Features Reliance Imaan Investment Plan: Regular and limited premium paying options Unmatched flexibility through our Exchange Option to move between Reliance suite of unit linked products Liquidity in the form of partial withdrawal.

RETIREMENT PLANS: You are a young and earning individual. The income you earn allows you to enjoy life, your only worry being whether you will be able to continue the same lifestyle after retirement. A Reliance Retirement Plan will help you save money for your retirement. It ensures that you continue to get some income after retirement thereby ensuring that you do not have to depend on any other person or make any compromises to maintain the same lifestyle.

32

Reliance life insurance policies

Invest in a Reliance Retirement Plan today and enjoy life after retirement on your own terms.

Retirement Plans: Total Investment Plan II - Pension :

When you invest in the Reliance Total Investment Plan, you give yourself the assurance that you will make each one of your dreams come true! Key Features This is a Single premium unit linked pension plan with options to purchase the same plan with reduced allocation charges in subsequent policy years. Since more premium is allocated towards investment due to lower allocation charges on subsequent purchases greater would be the returns. Purchasing the same plan in the subsequent years is an option. 1st purchase would be called as Classic 2nd purchase would be called as Silver 3rd purchase would be called as Gold 4th purchase would be called as Diamond 5th purchase would be called as Platinum

33

Reliance life insurance policies

Once the client purchases the first policy there will full flexibility for the client as to when second and subsequent purchase can be made and how much premium should be paid for each purchase subject to the following The minimum premium on each purchase should be at least Rs. 25,000. The maturity date on each purchase cannot exceed 70 years. All the polices should mature on maturity date of the first purchase. The term of the polices purchased during second, third, fourth and fifth policy years will be 9, 8, 7 and 6 respectively. New policy can be purchased only if all the previous polices are in force on the date of purchase of new policy. Plan Objective: The pace setter plan with unmatched flexibility which gives Tax benefit under Sec. 80CCC of Income Tax Act 1961 Investment opportunity with flexibility Control over your investments

RELIANCE WEALTH + HEALTH PLAN :

Invest in the Reliance Wealth Health Plan and balance your health needs and wealth needs, without compromising on either health or wealth. Key Feature: A Unit Linked plan with Unique Savings Component Twin benefit of market linked return and health protection Choose from two different plan options Flexibility to take care of your familys health Flexibility to switch between funds / plan options Option to pay Top-ups

34

Reliance life insurance policies

Option to package with multiple riders Liquidity through partial withdrawals RELIANCE SUPER AUTOMATIC INVESTMENT PLAN :

The Reliance Super Automatic Investment Plan is an enhanced unit linked plan that allows you to choose the right investment mix to reap maximum benefits. It also provides you with enhanced Life Cover. Key Features Reliance Super Automatic Invest Plan: Two plan options to choose from Ready-made & Tailor-made. Life Stage asset allocation to ensure automatic change in investment patterns under Ready-made Plan option. Freedom to decide your own fund mix based on your risk profile under Tailormade Plan Allows Systematic transfer plan to average out the cost of unit purchases in equity. Regular, limited, single premium paying options Unmatched flexibility through our Exchange Option to move between Reliance suite of unit linked products RELIANCE MONEY GUARANTEE PLAN :

To reap the benefits of a rising market and to protect yourself from any market decline, invest in the unit linked Reliance Money Guarantee plan that gives you the perfect balance between Protection and Savings. Key Features:

Capital Guarantee: The sum of all premiums paid is guaranteed on maturity or on death before the maturity.

35

Reliance life insurance policies

Capital Guarantee is available on both the basic premiums as well as on top-up premiums Choice to invest from 3 pre-packaged investment fund options Unique Return Shield feature to protect your returns CHILD PLANS: Being a parent is one of the joys of life. Your child looks up to you and depends on you for love, protection and support. You want to provide your child with the best in life. The Reliance Child Plan helps you save systematically so that you can secure your childs future needs. Be it higher education, his or her first home or any other requirement, you will always be there for your child when he or she needs you. So, invest in a Reliance Child Plan right awayit is the best gift you could ever give your child.

Child Plans: Reliance Child Plan : Save systematically and secure the financial future of your child by investing in the Reliance Child Plan and let your child enjoy today without worrying about tomorrow. Risk protection for you during the term of the Policy Key Features: Accumulated bonus at the end of the Policy Term 25% of Sum Assured payable every year as lump sum Benefit during the last four Policy Anniversaries

36

Reliance life insurance policies

All future premiums are waived in the event of unfortunate loss of life Guaranteed Fixed Benefits continue even after loss of life of the Policy holder More value for your money by way of High Sum Assured Rebate Choose to add the Benefit of two Riders - Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider Policy participates in profit even after the loss of life of the life Assured RELIANCE SECURE CHILD PLAN : Reliance Life Insurance presents a unit linked insurance plan that secures your childs financial future, leaving you free from worry. Key Features Reliance Secure Child Plan: Insurance cover on the life of child Money at critical milestones in your child's career path - college education, higher education, marriage Your child is completely protected - we will continue to pay the premiums even if you are not alive Life time income to child in the event of disability Return Shield option to protect your investment returns Liquidity in the form of partial withdrawals

37

Reliance life insurance policies

PAYMENT OPTIONS Now pay your premiums without any hassles! You have as many as nine convenient modes of payment to choose from. Take a look at the benefits of each and select a mode that suits you best.

Online Pay online via credit card or net banking. Just log into your Lifeline account

SMS Pay your premiums on the go, in 3 easy steps! Temporarily this payment service is unavailable till further notice by RBI.

ECS Instruct your favorite bank to pay your premiums directly from your account!

Credit Card Never miss a payment! Have your premium debited from your credit card on the due date.

Easy Bill Outlets

38

Reliance life insurance policies

You have the option of paying your Renewal Premium by cheque at any of the Easy Bill Outlet located in your city.

Nearest Branch Visit your nearest Reliance Life Insurance branch and pay over the counter!

Bill Desk Pay Online, Log into your Billdesk account and authorize your payments.

Bill Junction Pay Online, Log into your Bill Junction account and authorize your payments.

Electronic Bill Payment Process Log into your Net Banking account and pay your Renewal Premium Online!

IVR Call 30338181 or 1800 3000 8181 (toll free) for paying your premium through your credit card. Please keep your Policy No. & Date of Birth handy.

39

Reliance life insurance policies COMPARATIVE STUDY

Market Share

SR.NO 1

INSURER LIC

MARKET SHARE (%) 50

ICICI PRUDENTIAL

10

HDFC

RELIANCE

SBI LIFE

BAJAJ

BIRLA

MAX

TATA

10

KOTAK

11

MET LIFE

12

OTHERS

40

Reliance life insurance policies

Here we can see from the diagram that LIC is the market leader and it commands the major part of the total life insurance market. Its market share was approximately 98% before 2000 but after the entry of private players it has significantly decreased... Among private players ICICI PRUDENTIAL stood first. It has the market share of approximately 10% in the total market and it constitutes 40% of the market share among private players. HDFC Standard comes third. Reliance Life insurance Company Limited &SBI come fourth and fifth.

ANALYSIS OF QUESTIONNAIRE:

Here questionnaire has been formed to study why people go for life insurance. What is peoples major motive behind investing in life insurance? Do they decide upon their own or they take guidance of an agent? What is their perception about Reliance Life Insurance Company Limited? Questions:There are 5 questions in the questionnaire. Target Population:The target group was a mix of people from the society. The questions are asked Doctors, Professionals, Professors, Advocates, Engineers, and general public.

Q.1 what is your main motive behind investing in life insurance? (a) Tax Benefit (b) Savings (c) Risk Cover (d) Return/Yield

41

Reliance life insurance policies

TAX (20)

RISK COVERAGE (23)

RETURNS (2)

SAVINGS (5)

TOTAL: 50
Q.2 Rank the above motives according to your preference.

MOTIVE

OF

INVESTMENT TAX BENEFIT SAVINGS RISK COVERAGE PREFERANCE 1 2 3 4 21 19 8 2 3 11 25 11 24 16 7 3 1 4 10 35 RETURNS

42

Reliance life insurance policies

Q.3 how do you decide about investing in life insurance?

(a) On my own (b) Family decision (c) Employer decides (d) As per the guidance of agent

ON MY OWN 29 FAMILY DECISIONS 7 EMPLOYER DECIDES 0 AGENT GUIDENCE 14

TOTAL: 50

Q.4 which life insurance policy would you prefers to buy? (a) Term Assurance (b) Whole Life (c) Endowment

43

Reliance life insurance policies

(d) Combination of Whole Life and Endowment (e) Unit Linked

ULIPS 12%

TERM ASSURANCE 18% WHOLE LIFE 18%

COMBINED 38% ENDOWMENT 14%

Q.5 would you prefer Reliance Life Insurance or LIC for buying the life insurance policy? (a) Reliance Life Insurance (b) LIC

44

Reliance life insurance policies

RELIANCE LIFE INSURANCE 30%

LIC 70%

45

Reliance life insurance policies SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors, which have impact on the survival of any organization. Now lets make SWOT analysis for reliance Life Insurance Company Limited.

STRENGHTS

WEAKNESSES

THREATS

OPPERTUNITIES

STRENGTHS: 1) Reliance Life Insurance Company Limited is the part of the Reliance Capital. 2) The brand name is enough to sell the products easily. 3) Private placement of Rs. 10,000 crs worth of securities with RBI by the government, led to an improvement in market securities. 4) Strong liquidity from FII was the major reason for the up move. 5) Range of products 6) Reliance has a long and strong history of solvency, financial stability. WEAKNESSES: 1) Newly established company, so people seems it risky. 2) Lack of staff. 3) Lack of advertisement, so most of the customers are not aware of the Reliance Life Insurance. OPPORTUNITY:

46

Reliance life insurance policies

1) There is a vast untapped market in India. The life insurance penetration in India is approximately 2.5%. So it has large potential. 2) Intention of traditional products is to encourage long term, regular and disciplined savings to systematically build up a target fund. 3) The average insurance premium being collected by the company has been growing exponentially year on year. THREATS: 1) The main threat is from the other players who have grabbed approximately 15% of the market share. 2) As the government has scrapped the rebate on the life insurance premium, the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments.

47

Reliance life insurance policies

CASE STYUDY: RELIANCE LIFE PROCCESSES AGILITY

One of the top private sector insurance companies in India, Reliance Life Insurance is a unit of the Anil Dhirubhai Ambani group. The Rs 4,536 crore insurance company with a recent addition of 1,250 branches is fast expanding. While this was good news, the company lacked a formal system for managing the steps involved in underwriting: receiving submissions, analyzing data, and providing approvals. "The system required insurance policy underwriters and application process agents to manually assemble all the information they needed from large paper files, analyze the data, and determine whether the customer should be offered coverage at all. This manual system took two weeks and was prone to errors," says R. Chandrasekaran Mohan, CTO OF RLIC. On top of that, opening so many new branches wasn't helping his cause. Mohan realized that he needed to reduce average underwriting turnaround time (TAT) from two weeks to a few hours. "We needed something that would have the scalability to meet future needs and the agility to react to changing market conditions, "he says. Delay in revenue generation and reduced productivity motivated Mohan to go for a BPM solution to automate the process. Now, an agent arrives at the branch and scans the application form and uploads them to the server. After the agent validates the information and enters required inputs, the data is updated on the document management system. "This data is then used to send as an underwriting and policy issuance request to process the response, which then automatically sends an e-mail notification based on business rules," explains Mohan.

48