INFORMATION ON HDFC BANK

Executive Summary

In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and HDFC Standard Life Insurance Company Ltd has given me the opportunity to work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In Insurance sector, distribution channel includes only agents or agency holders of the company. If companies like RELIANCE LIFE INSURANCE, TATA AIG, etc. have adequate agents in the market they can capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer.

TABLE OF CONTENTS Page no: CHAPTER - 1 : Introduction to Industry 2-6 8-33

CHAPTER 2 : Company Profile 2.1 : Profile of the organization 2.2 : Products of the company 2.3 : SWOT Analysis of the organization CHAPTER 3 CHAPTER 4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 CHAPTER 5 : Conceptual Discussion : Research Methodology : Title Justification : Objective of the Study : Scope of the Study : Significance of the Study : Managerial Usefulness of the Study : Research Design : Limitations of the Study : Data Analysis & Interpretation Annexure

35-37 39-42

44-53

QUESTIONNAIRE Bibliography/ References

CHAPTER-1 INTRODUCTION TO THE INDUSTRY

OVERVIEW OF THE INSURANCE INDUSTRY

The insurance Regulatory and Development bill is now an Act, With this India is now the cynosure of all the global insurance players. Numerous players, both Indian and foreign, have announced their intention to start their insurance shops in India. IRDA, under the chairmanship of Mr. Rangachary, opened the window for applying licenses in India on the 16th of August. Dabur- All state the Prudential ICICI was the first of the block to apply on the very first day. But before any one starts to talk about the insurance sector in India, it is important to know the figures that entice each hand everybody in the sector. FIGURES IN THE SECTOR:

Table No. 1 Source: India Info line. Com and NCAER Life Insurance Statistics Indian population GDP as on 2002 ($bnS) Gross domestic savings as a % of GDP NCAER estimate of insurable population. Estimated market by 2005

1bn 480bn 23% 240mn 650mn

India has an enormous middle class that can afford to buy life, health, and disability and pension plan products. The low level of penetration of life insurance in India compared to other developed nations can be judged by a comparison of per capita life premium.

Table No. 2 Source: Various Newspapers Country Japan Life premium per Capita US $ in 1994 3,817
5

UK USA India

1,280 964 4

Clearly, there is considerable scope to raise per capita life premium if the market is effectively tapped. India has traditionally been a high savings oriented country- often described as being on par with the thrifty Japan. Insurance sector in the US of A is as big in size as the banking industry there. This gives us an ideal of how important the sector is. Insurance sector canalizes the savings of the people to long-term investments. This has made the sector the hottest one in India after IT. With social security and security to the public at large being the agenda for opening the sector, the role of the regulator becomes all the more serious and one that would be carefully watched at every step.

INSURANCE

REGULATORY

DEVELOPMENT

AUTHORITY

(IRDA)
The opening up of the sector has been long standing and with the passing of the Insurance Regulatory and Development Authority IRDA bill a significant step has been taken. IRDA is formed as an authority to protest the interests of holders of insurance policies, to regulate promote, and ensure orderly growth of insurance industry and for matters connected therewith or incidental thereto. With the Insurance Regulatory and Development Act, the focus shifted to the following:

The insurance Regulatory and Development Authority (IRDA) should give priority to health insurance while issuing certificates of registration:

Policyholders funds will be invested in the social sector and infrastructure. The percentage may be specified by the IRDA and such regulations will apply to all insurers in the country.

In case of the insurers fail to meet the social sector obligation a fine of Rs 2.5 million would be imposed the first time. Subsequent failures would result in cancellation of licenses.

PLAYERS WHICH ARE GOVERNED BY IRDA

The table below is the list of the likely players in the Indian insurance sector, Apart from Reliance, who has applied for both Life and Non life insurance license; all have gone in with a foreign partner. The idea is that the foreign partner will bring in expertise of global nature with products that are India specific.

Life insurance Reliance life insurance Kotak Mahindra Max India New York Life Prudential ICICI HDFC Standard Life Aditya Birla Sun Life Insurance C K Birla Zurich Insurance Hindustan Times Commercial Union

Non-life insurance Reliance General Insurance ICICI Lombard Insurance Wadia Commercial Union Cholamandalam Axa M A Chidambaram Matlife Sanmar Group GIO Tata AIG 20th Century Finance Guardian Group Punjab National Bank, Vijaya Bank,

Centurion Bank Canada Life

Allahabad Bank and Bank of India Yasuda Fire and Marine.

Vysya Bank ING

IFFCO Tokyo Fire & Marine

7

Apollo Hospitals Aetna Max India New York Life Bank of Baroda & Punjab National Bank Foreign Partner

Sundaram Finance Royal & Sun Alliance.

The RBI regulations come in light of the fact the most banks are looking at their NBFC outfits for foraying into insurance sector. For this, the central bank had laid out a set of five parameters that need to be met as of March 31, 2000: Table No. 4 Source: Indianfoline Archives. Figures are rounded off.
Table No 4 Year Criteria Net worth of Minimum Rs. Rs) State Bank of India 5 Figures (bn CAR As % Net profit of Reasonable (in net (bn % of NPAs net crores) Figures Rs.) 1999-00 1998-99 ICICI Ltd. 1999-00 1998-99 1997-98 HDFC Ltd 1999-00 1998-99 1997-98 PNB 1999-00 1998-99 121 104 80 51 47 21 20 18 23 19 11 12 17 12 13 N.A. N.A. N.A. 10 11 20 10 12 10 11 4 3 3 4 4 (calculated as advances) 6 7 8 8 8 N.A. N.A. N.A. 8 9
8

bn CAR of 10% years

Vijaya Bank 1999-00 1998-99 1997-98 Bank of Baroda 1999-00 1998-99 1997-98 Bank of India 1999-00 1998-99 Allahabad Bank 1999-00 1998-99 Vysya Bank 1999-00 1998-99 1997-98

4 7 7 32 29 27 25 24 9 8 6 4 5

11 10 10 12 13 12 10 10 11 10 12 11 N.A.

0.5 0.3 0.2 5 4 5 2 2 0.7 11 0.5 0.3 0.8

7 7 7 7 8 7 9 8 12 12 9 N.A. N.A.

The foreign players are essentially looking to tap their global expertise in the varied markets and use that know- how to work to work in the Indian scenario.

CHAPTER 2 INTRODUCTION TO COMPANY

HDFC STANDARD LIFE INSURANCE HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)

Founded in 1977, HDFC is today the market leader in housing finance in India and has extended financial assistance to more than 15 lakh homes. HDFC has more than 110 offices in India presently. It also has one international office in Dubai and 3 Service Associates in Kuwait, Qatar, and the Sultanate of Oman. HDFCs asset base amounts to
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over Rs 28,000 cores. Its financial strength is reflected in highest safety ratings of FAAA and MAAAA awa4rrded by CRISIL and ICRA two of Indias leading credit rating agencies- respectively, for the last 6 years consequently. It has a depositor base of over 1 lakh customers and a deposit agents force of over 46,000. Of the total deposits, 73% are sourced from individual and trust depositors. This demonstrates the tremendous confidence that retail investors have in the company. Being an institution that is strongly committed to the highest standards of quality and excellence, HDFC has won several accolades in the past few years such as Ramakrishana Bajaj National Quality Award for the year 1999. This award was instituted to award recognition to Indian companies for business excellence and quality achievement. HDFC is the only company so far to receive this award.

STANDARD LIFE ASSURANCE COMPANY

Founded in 1825, Standard life has been at the forefront of the UK insurance industry for 176 years by combining sound financial judgement with integrity and reliability. The largest Mutual life Company in Europe, it has operations in the United Kingdom, Ireland, Spain, Germany, Austria and Canada with representative offices in Hong Kong and China. One of its most recent successes was the launch of Standard Life Bank on 1st January, 1998. The introduction of its innovative mortgage product in January 1999 has an immediate impact on the UK market, accounting for 1% of all new lending within the first operational year. The current loans understanding amount to Rs. 43,000 crore. Standard Life has total assets of Rs. 5, 95,000 crore and new premium income last year of Rs. 30,000 crore. Its UK investment portfolio accounts for approx. 2% of all shares listed in the London Stock Exchange. It is one of the few insurance companies in the world to receive AAA rating from two of the leading international credit rating agencies. Moodys and Standard & Poors. The later described Standard Lifes ability to meet its claims obligations as overwhelming under a variety of economic conditions. Standard life is rated as one of the strongest companies of the world, in financial terms. The companys reputation in the UK market remains unrivalled.
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Besides, being voted company of the Year for overall service, for the third consecutive year, Standard Life was recently voted Company of the Decade by independent brokers. Incorporation of HDFC Standard life Insurance Company Limited The company was incorporated on 14th August 2000 under the name of the HDFC Standard Life Insurance Company Limited. On the 23rd of October 2000, HDFC Standard Life was the only Life Company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Lifes existing investment in the HDFC Group, this is the maximum investment allowed under current regulations

The Retails Sales Hierarchy of HDFC Standard Life Insurance

General Manager Head Retail Sales Regional Branch Manager Business Development Mangers Certified Financial Consultants The project started with class room sessions involving lectures and interactions with the mentors Mr. Dhruv and Mr. Sanjeev Choudhary. They explained all the plans available with HDFCSLIC in detail with examples. The classroom also involved role plays and games. 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 HDFCSLIC. These class room lectures and role-plays helped me to gain a substantial understanding of the plans. This in turn helped me to effectively explain these plans to people whom I met or took appointment to meet. 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. Life insurance
12

schemes also offer tax benefits. In todays scenario life insurance solves the three objectives.
1. 2. 3.

Security Saving Tax Benefit.

Globalization has changed the life insurance scenario drastically. Today we see new player in a field, which was dominated by life insurance Corporation of India (LIC). As discussed earlier the most prominent players right now in the insurance industry are as follows:
1. 2. 3. 4. 5. 6.

HDFC Standard life Insurance Co. ICICI Prudential Life Insurance Co. TATA AIF. Alliance Bajaj Max New York Life Insurance Co. LIC.

HDFC Standard Life Insurance Co.

Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs. 119 crores. The net worth of the corporation as on March 31, 2000 stood at Rs. 2,096 crores. HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai, India. HDFC also has an international office in Dubai, U.A.E., with service associates in Kuwait, Oman and Qatar.

Standard Life

13

Standard Life is Europe's largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 175 years, is a modern company surviving quite a few changes since selling its first policy in 1825. The company expanded in the 19th century from its original Edinburgh premises, opening offices in other towns and acquiring other similar businesses. Standard Life currently has assets exceeding over 70 billion under its management and has the distinction of being accorded "AAA" rating consequently for the past six years by Standard & Poor.

The Joint Venture

HDFC Standard Life Insurance Company Limited was one of the first companies to be granted license by the IRDA to operate in life insurance sector. Each of the JV player is highly rated and been conferred with many awards. HDFC is rated 'AAA' by both CRISIL and ICRA. Similarly, Standard Life is rated 'AAA' both by Moody's and Standard and Poors. These reflect the efficiency with which HDFC and Standard Life manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively.HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000. HDFC is the majority stakeholder in the insurance JV with 81.4 % stake and Standard Life has a stake of 18.6%. Mr. Deepak Satwalekar is the MD and CEO of the venture.

The Partnership
HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship. The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture.

14

In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a handpicked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000.

Incorporation of HDFC Standard Life Insurance Company Limited:

The company was incorporated on 14th August 2000 under the name of HDFC. Our 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, this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations. HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance company's in India are measured.
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Our Mission
We aim to be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market, 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 standards

Our Vision
'The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry'. 'The most obvious choice for all'.

Our Values

SECURITY: Providing long term financial security to our policy holders will be our constant endeavor. We will be do this by offering life insurance and pension products.

TRUST: We appreciate the trust placed by our policy holders in us. Hence, we will aim to manage their investments very carefully and live up to this trust.

INNOVATION: Recognizing the different needs of our customers, we will be offering a range of innovative products to meet these needs.

Our mission is to be the best new life insurance company in India and these are the values that will guide us in this.

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, and to promote home ownership. 16

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.

Organizational Goals
HDFCs main goals are to:a) Develop close relationships with individual households, b) Maintain its position as the premier housing finance institution in the country, c) Transform ideas into viable and creative solutions, d) Provide consistently high returns to shareholders, and e) To grow through diversification by leveraging off the existing client base.

PRODUCT PROFILE

SAVINGS PLANS

Children Plan
Childrens Plan is designed to provide a lump sum to the child to maturity. It also provides financial security to the child in the future, even in case of the insured parents unfortunate death during the policy term. Childrens plan receives simple reversionary bonuses, which are usually added annually. This is a flexible plan with three options for you to choose from depending on your needs Options those are available with this plan. Option On the death of the insured On maturity parent during the policy term Maturity Bene fit Plan Accelerated Bene fit plan Future premium waived and the policy continues till maturity. Sum assured + bonuses paid and On the survival of the insured the policy stops. parent to the maturity date, sum assured + bonuses paid.
17

Double

Benefit Sum plan

assured and

paid, the

future Sum assured + bonuses paid. waived, policy till

premiums continues maturity.

18

Tax Benefits

The premiums you pay will be eligible for tax relief under Section 88 of the Income Tax Act, 1961. The benefits received under the policy are eligible for tax relief under Section 100 (10D) of the income tax act, 1961. Eligibility

The eligibility ages for the life assured under the plan are as follows: Minimum Age At Entry Maximum Age At Entry Maximum Age At Maturity Minimum term: 10 years

18 years 60 years 75 years Maximum term: 25 years

Payment options

You have the choice of paying the premium either in yearly, half-yearly or quarterly modes, depending on your convenience.

Money Back Plan

It is a participating (with profits) insurance plan that offers the following features: Payment of cash lump sums, each of which is a proportion of the basic sum assured, at 5year intervals during the term of the policy. (Please refer to the table given below) On survival up to maturity, 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, the basic sum assured plus any bonus additions is provided. This is over and the earlier payouts.

Schedule of cash lump sum (As a% of basic sum assured)

19

Term policy term 10 15 20 25 30

Number of year from policy date 5 10 15 40% 30% 25% 20% 15% 30% 25% 20% 15% 25% 20% 15%

20

25

20% 15% 15%

Other benefits

You can add the following optional benefits to customize your policy to suit your needs:

Critical illness (CI) Benefits provides an amount, equal to the sum assured chosen under this optional benefit, an diagnosis of any one of the 6 common critical illness. The sum assured is payable if you survive for 30 days after the date of the claim.

One such a claim has been met, no further critical illness benefit payable. your basic policy continues even after we pay a claim on this benefit

However,

Additional Term Benefit (ATB) provides an additional amount, equal to the sum assured chosen under this optional benefit, in case of your unfortunate death.

Accidental Death benefit (ADB) provides an additional amount, equal to the sum assured chose under this optional benefit, in case of your unfortunate death: - Due to an accident, and -Within 90 days of the accident.

Waiver of Premium (WOP) Benefit waives the premium for you in case your become totally disabled. The waiver is applicable during the period of total disability.

All optional benefits must be selected at the outset of your plan.

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Tax Benefits

Tax benefits described in Section 88, Section 80D and Section 10 (10D) of the income Tax Act Applicable to premium paid for CI and WOP.

Eligibility

This plan can be taken on a single life basis or a joint life (first claim) basis. The eligibility ages are as follows; Basic policy with optional benefits Basic Policy CI Min. age of entry Max. age of entry Max. age of expiry Min. term: 10 years

ATB 18 60 75

ADB 18 55 65

WOP 18 50 60

12 60 75

18 5 70

Payment options

You have the choice of paying your premium either in yearly, half-yearly or quarterly modes, depending on your convenience.

Endowment Assurance Plan

It is participating (with profits) insurance plan that offers the following features: It 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. It provides a lump-sum payment to the assured life on survival up to maturity. The lump sum mentioned is the basic sum assured plus any bonus.

Other benefits

You can add the following optional benefits to customize your policy to suit your needs:

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Critical illness (CI) Benefit provides an amount, equal to the sum assured chosen under this optional benefit, an diagnosis of any one of the 6 common critical illnesses. The sum assured is payable if you survive for 30 days after the date of the claim. Once such a claim has been met, no further critical illness Benefit is possible. However, your basic policy continues even after we any a claim on this benefit.

Additional Term Benefit (ATB) pr4ovides an additional amount, equal to the sum assured chosen under this optional benefit, in case of your unfortunate death.

Accidental Death Benefit (ADB) provides an additional amount, equal to the sum assured chosen under this optional benefit, in case of your unfortunate death: - Due to an accident, and -Within 90 days of the accident.

Wavier of Premium (WOP) benefit waives the premium for you in case you become totally disabled. The waiver is applicable during the period of total disability All optional benefits must be selected at the outset of your plan

Tax Benefits

Tax benefits described in Section 88, Section 80D and Section 10 (10D) of the income Tax Act are applicable. Applicable to premium paid for CI and WOP.

Eligibility

This plan can be taken a single life basis or a joint life (first claim) basis. The eligibility ages are as follows: Basic policy with optional benefits Basic Policy CI Min. age of entry Max. age of entry 12 60 18 5 ATB 18 60 ADB 18 55 WOP 18 50

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Max. age of expiry Min term: 10 years

75

70

75

65

60

Payment options

You have the choice of paying your premium either in yearly, half-yearly or quarterly modes, depending on your convenience.

PENSION PLAN

The policy is basically a saving contract, which is designed to provide an income for life from retirement, with an option to take the lump sum elsewhere to buy the annuity, provide it is permitted by the prevailing regulations.

Your commitment. 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, after which you will start receiving your pension.

Plan is basically a savings contract, which is designed to provide an income for life from retirement. It does this by accumulating a national lump sum on retirement, comprising of sum assured plus any attaching bonus.

Subject to the prevailing legislation and regulations, part of this can be taken as a lump sum and the rest used to buy an immediate annuity.

Mode of premium

You can pay either a single premium or pay premiums is quarterly half yearly or annual form by cheque, in cash or by bank drafts.

Cost of the plan

The cost of the plan depends on your age, the amount of benefit you have chosen, the premium paying frequency and the term of the policy. To give you an idea, here are the annual premiums in Rupees, payable on a policy with sum assured of Rs. 100,00.

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Term 10 30 35 40 N/a N/a 9,577 15 N/a 6,098 6,117 20 4,309 4,327 4,357

For single premium policies, the premium payable with respect to the basic benefit is equal to the basic sum assured as required by the policyholder.

Eligibility

The age and term limits for looking out a personal pension plan area:
Minimum Term RP 10 SP 5 Maximum Term RP 40 SP 15 Maximum Age RP 18 SP 35 60 50 70 Maximum Age of entry Minimum age of Retirement Maximum age of Retirement

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 (upto Rs. 10,00)

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INVESTMENT PLANS Single Premium Whole of Life insurance plan

Single premium Whole of life insurance plan is well suited to meet your long-term investment needs. This participating (with profits) plans offers you the following benefits: A sound investment: Your money will be invested in our With Profits fund. The fund

aims to provide secure and stable long-term growth, normally; we will declare a compound reversionary bonus for your policy every year and add it to your policy on its anniversary. In addition, on death, surrender or on guaranteed dates. A terminal bonus might be payable. Your pay a single premium and the policy will pay you a lump sum. Flexibility of term: Even after choosing your policy, you can decide on the policy term. For 4 weeks after any one of the 10th, 125th, 20th and subsequent five year anniversaries, you can choose to receive the sum assured plus any attaching bonuses, in full. Once the money has been received, your policy will cease. Surrender value: your can terminate the policy any time, after it has been in force for at least 6 months, and receive a surrender value. In case of unfortunate death: Your nominee gets the sum assured secured by your premium, plus any attaching bonuses. No medical requirements: We do not require you to undergo any medical test for this plan.

Tax benefits

Tax benefits under Section 88 of the income Tax Act are applicable on premiums up to 20% of the sum assured.

Eligibility

The eligibility ages are as follows: Minimum age at entry: 18 years

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Maximum age of entry: 70 years You can buy the product and a single life basis.

Payment options

A single premium can be paid by cash, cheque or demand draft. Indicative premium Minimum sum assured: Maximum sum assured: Rs. 25,000 Rs. 50,00,000

Premium: Rs. 950 per thousand of sum assured.

Unit Linked Pension Plan

The unit linked pension plan is basically an insurance contract, which is designed to provide income for life. Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On vesting, the value of your units will be used to buy your retirement benefits. On earlier death, the beneficiary receives the value of your units plus a cash lump sum of Rs. 1,000. The minimum premium amount for regular premium mode is Rs. 10,000 each year and for single premium it is Rs. 25,000. To facilitate increased investment, we allow additional single premium top ups at any time. The minimum single premium top up is Rs. 5,000. Premiums can be paid by cash, cheque or demand draft

Various investment Funds

The policy is fully unitized with a range of funds to match your needs and approach to risk.
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Each investment fund is composed of units. All the units in a fund are identical. You can choose from the following funds.
1.

Liquid fund

The liquid fund invests 100% in bank deposits and high quality short-term money market instruments. The fund is designed to be cash secure and has a very low level of risk. However, unit prices may occasionally go down due to the use of short-term money market instruments.
2.

Secure managed

The secure managed fund invests 100% in government securities and bonds issued by companies or other bodies with a high credit standing. However, a small amount of working capital may be invested in cash to facilitate the day to day running of the fund. This fund has a low level of risk but unit prices may still go up or down.
3.

Defensive managed

15 to 30% of the defensive managed fund will be invested in high quality Indian equities. The remainder will be invested in government securities and bonds issued by companies or other bodies with high cash credit standing. In addition, a small amount of working capital may be invested in cash to facilitate the day to day running of the fund. The fund has a moderate level or risk with the opportunity to earn higher returns in the long term from some equity investment. Unit prices may go u or down.
4.

Balanced managed

30 to 60% of the defensive managed fund will be invested in high quality Indian equities. The remainder will be invested in government securities and bonds issued by companies or other bodies with high cash credit standing. In addition, a small amount of working capital may be invested in cash to facilitate the day to day running of the fund. The fund has a moderate level or risk with the opportunity to earn higher returns in the long term from the higher proportion it invests in equities. Unit prices may go up or down. The past performance of any of the funds is not necessarily an indication of future performance. There are no investment guarantees on the return of the unit linked funds. None of the funds participate in the profits of HDFC standard life insurance company limited or any of its policyholder funds.
27

You can switch your existing investments from any pension unit linked fund to another pension unit linked fund. You can also give us a premium redirection instruction to redirect future premiums to different pension unit linked funds.

Benefits

At the chosen vesting date, the unitized fund value will be available to secure pension benefits. Subject to the prevailing regulations, part of this value can be taken in the form of cash lump sum and the rest converted to an annuity at the rate then offered by HDFC standard life. Alternatively, if it is permitted by the prevailing regulations, 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 current maximum limit for any cash lump sum is one third of the unitized fund value on vesting. On death, the unitized fund value will be paid along with a cash lump sum of Rs. 1,000. The beneficiary may use the proceeds to purchase pension benefits for the surviving spouse. Your basic benefits will be paid by cheque. Eligibility Minimum term Regular premium version Single premium version 10 5 Maximum term 40 40 Maximum Maximum age at entry age at entry 18 18 60 65 Minimum at vesting 50 50 Maximum age at vesting 70 70

The age and term limits for taking out a unit linked pension plan are:

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Alterations in the level of premiums

Regular premiums can be increased at any time. If needed, the policyholder can reduce the regular premium levels (even to zero, the policy is converted to paid up status) provided. 3 year of regular premiums have been paid. The monetary value of the unit holding across all funds is at least Rs. 15,000. In addition, you can pay single premium top ups at any point of time. Surrendering the policy

The policyholder can surrender the policy at any point of time during the contract term for regular premium paying policies. For single premium contracts, the contract needs to remain in force for a minimum period of six months before you can surrender. The amount payable will be the unitized fund value after applying additional surrender charges mentioned below. Stopping Payment of Regular Premium

This product has a grace period of 15 days for the payment of each premium after the initial premium. If you stop paying premiums, before you have paid 3 years of annual premiums, we will cancel your policy and return to you the value of your unitized fund, less cancellation charges. If after three years you are unable to pay the premiums, you have the option to make the policy paid up, provided the policy has accumulated sufficient policy value. Currently this amount will be Rs. 15,000. If you make your policy paid up you will continue to be protected according to the benefits you selected. To provide this cover, we will continue to collect our usual charges on each monthly charge date. It is important to note that if no further premiums are paid, this may reduce the value of your fund over time, or even exhaust it completely. A paid up policy can be reinstated to premium paying status at any point of time in the future. Tax Benefits
29

Premiums paid under this plan are eligible for tax benefits under section 80 CCC of the income tax act, 1961.

Charges

HDFC deducts charges from the policy to cover our costs. A percentage of each premium is invested to buy units. This percentage is called the INVESTMENT CONTENT RATE. The rates are as follows:

Premium paid (Rs.) Single Premium Initial payment Single premium top ups Regular premiums Year 1 Year 2 Year 3+ Regular premium increases Single premium top ups

Investment Content Rate (ICR)

94% 99%

78% 78% 99% 99% 99%

The unit price each day will include a fund management charge. This charge is 8% of the fund value per annual taken on a daily basis.

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A flat fee of Rs. 15 per month will be deducted by cancellation of units on each monthly charge date. This will be proportioned across funds according to the fund holdings at the time of cancellation of units. We do not charge for the flat death cover of Rs. 1,000, but we may do so in the future. On cancellation or surrender of the policy before 3 years of regular premiums have been paid, we will charge 20% of the outstanding regular premiums due during this 3- year period.

United 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. The unit linked endowment plan also gives the option of additional protection against the six common critical illnesses, as well as additional protection if death is as the result of an accident. Your premium is invested in units of the in units of the investment fund of your choice, based on the prevailing unit price. On maturity you receive the value of your units. On death, or critical illness if chosen, you receive the greater of the value of your units and your selected basic sum assured. The premiums and various investment funds are the same as in unit linked pension plan. Benefits

There are four different options to choose from: 1. Life option On death within the policy term, the greater of the sum assured and the value of the unit linked fund will be paid to your nominee. On survival to the end of the policy term, the value of the unit linked fund will be paid to you. 2. 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.

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On survival to the end of the policy term, the value of the unit-linked fund will be paid to you. The illnesses covered under this option are cancer, coronary artery bypass graft surgery, heart attack, kidney failure, major organ transplant (as recipient) and stroke. 3. Extra life option This option pays the same benefits as the life option but, should death occur within the policy term as the result of an accident, an extra benefit equal to the sum assured will be paid. 4. Extra life and health option This option pays the same benefit as the life and health option but, should death occur within the policy term as the result of an accident, an extra benefit equal to the sum assured will be paid. Levels of protection

Depending on your age at entry you may choose 3 levels of cover-low, medium or high. For each level, the sum assured is based on the amount of premium you pay each year. Levels of cover Age at entry Low 18 to 40 41 to 50 Over 51 5XPremium 5XPremium 5XPremium Medium 10XPremium 10XPremium High 20XPremium

The sum assured cannot be changed during the term of the contract. The benefits are paid by cheque.

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Eligibility

The age and the term limits for taking out a unit linked endowment plan are:
Minimum term Life 10 Life and health Extra life Extra life and health 10 10 10 10 Maximum term 30 30 30 30 Minimum age at entry 18 18 18 18 Maximum age at entry 60 5 55 55 Maximum age at expiry 75 65 70 65

The alteration of premium, surrendering of the policy, conditions on stopping of payment of premiums and charges are the same as that of the unit linked pensions plan.

Tax Benefits

Tax benefits under section 88 and section 10 (10D) of the income tax act are applicable.

PROTECTION PLAN Term Assurance Plan

Under this plan, a sum assured is payable in case of death of the life assured during the term of the contract. One can choose the lump sum that would replace the income lost to ones family in the unfortunate event of ones death. Since this non-participating (without profits) plan is a pure risk cover plan, no benefits are payable on survival to the end of the term of the policy. Optional benefits are available with this plan. You can add the following optional benefits to customize your policy to suit your needs.

Critical illness (CI) Benefit provides an amount, equal to the sum assured chosen under this optional benefit, on diagnosis of any of the 6 common critical illness. The sum assured is payable if you survive for 30 days after the date of the claim.

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Once such a claim has been met, no further Critical illness benefit is payable. However, your basic policy continues even after we pay a claim on this benefit.

Accidental Death Benefit (ADB) provides an additional amount, equal to sum assured chosen under this optional benefit, in case of your unfortunate death: - Due to an accident, and - Within 90 days of the accident

As soon as we accept your claim - We pay out the sum assured. - Your basic policy immediately Tax benefits

Tax benefits described in section 88, section 80D and Section 10 (10D) of the income tax Act are applicable. Eligibility

This play can be taken a single life basis or a joint life (first claim) basis. The eligibility ages are as follows: Basic policy Minimum age at entry Maximum age at entry Maximum Payment options 18 60 65 Policy with any optional benefit 18 55 65

You have the choice of paying your premium either in yearly, half-yearly or quarterly models, or of paying a single one time premium, depending on your convenience. Indicative premium

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Age of life assured

Premium (Rs.) Half-yearly Yearly 1566 1662 1782 1956 268

Single premium (Rs.)

20 yrs 25 yrs 30 yrs 35 yrs 40 yrs

862 914 979 1074 1473

11,970 13,110 15,726 18,216 26,400

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Strengths

Weaknesses

Strong tie up

Low customer awareness. Very Less promotion

With HDFC as biggest housing finance company in INDIA and STANDARD LIFE as one of the biggest player in insurance sector in EUROPE.

Brand Equity

HDFC is one of the strongest BRAND NAME in INDIA and STAN.LIFE is major life insurance company in EUROPE.

Strong Network

HDFCs Strong presence and huge asset base.

Very big Customer Database. Threats

Opportunities

32 crore uninsured population Slowly Indian people are becoming aware about importance of insurance.

LIC with its huge asset based and network. Other players who are very aggressive in their marketing.

Huge rural population still to be tapped.

Government regulation.

SWOT ANALYSIS of HDFC SLIC

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CHAPTER-3 CONCEPTUAL DISCUSSION

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Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured, or policyholder, is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be compensated.

Types of Insurance
Vehicle insurance Auto insurance protects the policyholder against financial loss in the event of an incident involving a vehicle they own, such as in a traffic collision. Coverage typically includes: 1. Property coverage, for damage to or theft of the car; 2. Liability coverage, for the legal responsibility to others for bodily injury or property damage; 3. Medical coverage, for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses. Most countries, such as the United Kingdom, require drivers to buy some, but not all, of these coverage. When a car is used as collateral for a loan the lender usually requires specific coverage.
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Home Insurance Home insurance provides coverage for damage or destruction of the policyholder's home. In some geographical areas, the policy may exclude certain types of risks, such as flood or earthquake that require additional coverage. Maintenance-related issues are typically the homeowner's responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets.

Health Insurance Health insurance policies issued by publicly-funded health programs, such as the UK's National Health Service will cover the cost of medical treatments. Dental insurance, like medical insurance, is protects policyholders for dental costs. In the U.S. and Canada, dental insurance is often part of an employer's benefits package, along with health insurance.

Life Insurance Life insurance provides a monetary benefit to a descendant's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies,
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such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. In the U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles

Property Insurance Property insurance provides protection against risks to property, such as fire, theft or weather damage. This may include specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance. The term property insurance may, like casualty insurance, be used as a broad category of various subtypes of insurance

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CHAPTER-4 RESEARCH METHODOLOGY

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The methodology section is the blue print for researcher activity and specifies how the investigator intents to study the people or describe social settings. In other words the methodology section make explicit the study desire and constitutes the how to do it phase. The project study has been conducted by collecting primary data only using structured questionnaire. No secondary data is used. I have put my best possible effort to do this research and collect the necessary information to learn about this topic thoroughly.

Title
COMPARATIVE ANALYSIS OF INVESTMENT PATTERNS OF HDFC LIFE INSURANCE

Title Justification
Investment refers to acquisition of some assets. It also means the conversion of money into claims on money and use of funds for productive and income earning assets. In essence, it means the use of funds for productive purposes, for securing some objectives like income, appreciation of capital or capital gains, or for further production of goods and services with the objective of securing profits. Investment activity involves the use of funds or savings for further creation of assets or acquisition of existing assets. Investment is the sacrifice of certain present value for the uncertain future reward. It entails arriving at numerous decisions such as type, mix, amount, grade etc. of investment and disinvestment. Further, such decision-making has not only to be continuous but rational. Broadly speaking, an investment decision is a tradeoff between risk and return. All investment choices are made at points of time in accordance with the personal investment ends and in contemplation of an uncertain future. Investing has been an activity confined to the fact that availability of investible funds is a pre- requisite to deployment of funds. But, today, we find that investment has become a household word and is very popular with people from all walks of life.

Objectives of the Study

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Objective 1.To study investors behavior towards different attributes such as risk, return liquidity etc. of investment in Equities. Objective 2.To study the issues and challenges that investors face while making investment in share market .

Scope of the Study

The data collected was a primary in nature no secondary data was used. Primary data was collected using structured questionnaire. The questionnaire has been designed for the target group to get the best amount of data possible keeping in view the importance and authenticity of the information and convenience of the respondent. The selection of investor was predetermined in nature Personal contacts were established to conduct a face-to-face interview. Interview was conducted under strict supervision to maintain the standards of the data collected.

Significance of the Study

1.

Research forms the fundamental base on which the economics and legislative policies can be built. Research helps to establish social relationships and solves social problems Research is used in all fields for applied economics, applied finance and applied mathematics etc. Research assists in PHD thesis of students.

2. 3.

4.

Managerial Usefulness of the Study

To study the preferences and perceptions of investors regarding various financial products from the stable of HDFCSLIC. So that the firm can benefit from the findings of the report in launching any new investment product in future.

Research facilitates scientific and methodological and logical thinking of all. Assists philosophers and thinkers to establish their view points.
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Research assists in solving various operational and planning problems of business and industries. Assists analysts and intellectuals to develop new theories and ideas.

Sample and Sample size

Sampling Unit In project I choose a finite population i.e. I chose a fixed number of elements (persons) so that it is possible to enumerate it in its totality. Sampling Technique Convenient Sampling. Sampling Area Various locations of Delhi Sampling Size The size of sample was around 100.

Research Design/Non Probability

Research design is a specification of methods and procedures for acquiring the information we need to solve the problems. Research design was adopted for the purpose of collection and analysis of data in a manner aimed at getting relevant information. It was conceptual structure, within which research was conducted,

Limitations of the Study

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To study share market is a very vast topic and the search is just limited to a small portion.

Due to the reluctant nature of the respondents it was not an easy task to collect relevant information from them.

Sometime it was difficult to make the respondents understand the purpose of the survey.

Busy schedule of the respondents was also a major hindrance to establish a contact with them.

It may be possible the information provided by them is not true

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CHAPTER-5 DATA ANALYSIS AND INTERPRETATION

1)

WHICH INSURER DO YOU PREFER: NATIONALIZED OR PRIVATE

COMPANY? Private Company Nationalized Company 30% 70%

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Data Interpretation According to the survey it shows that 70% of the people prefer nationalized company and 30% of the people prefer private company.

2)

You have your insurance from which company? 44% 28% 15% 9% 4%

Kotak Mahindra HDFC Standard Life Insurance ICICI Prudential Max New York Birla Sunlife

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Data Interpretation According to the survey it shows that 44% of the people prefer Kotak Mahindra and HDFC comes at number second with 28%.
3)

What influences you to choose an insurance company? 42% 20% 12% 10% 10% 6%

Premium Facility Provided by the Company Life Risk Brand Image Location of the Company Advertisement

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Data interpretation According to the survey it shows that 42% of the people are influenced by the premium provided by the bank.

4) How do you rate your company? Good Fair Poor 68% 24% 8%

Data Interpretation According to the survey 68% of the people rate their company as good whereas only 8% of them think it is unsatisfactory.

5) Rate your company on following attributes.

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Services with your policy Companies staff Sales staff Awareness about products

58% 18% 14% 10%

Data Interpretation According to the survey 58% of the majorities rate their company with the services of their policy.

6) How long have you been operating with that company? Less than 2 years 2 to 3 years 3 to 5 years More than 5 years 16% 30% 41% 13%

Data Interpretation According to the survey it shows that 41% of the people have stayed with their company for 3-5 years and only 13% of people are with their company for more than 5 years. 7) Are you aware of the new unit linked insurance plans in the market?

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Yes No

57% 43%

Data Interpretation According to the survey we find that 57% of the respondents are aware of unit linked life insurance plans and 43% are not aware of such plans.

8) How much would you be willing to spend per annum if you were to go for an investment/insurance plan?

Rs.10,000- Rs.25,000 Rs.25,000-Rs.50,000 Rs.50,000-Rs.1,00,000 More than Rs.1,00,000

59% 29% 10% 2%

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Data Interpretation ACCORDING TO THE SURVEY, WE CAN CLEARLY SEE THAT 59% OF THE RESPONDENTS WOULD BE WILLING TO SPEND BETWEEN RS.10,000 RS.25000 FOR LIFE INSURANCE. ONLY 2% WOULD BE WILLING TO SPEND MORE THAN RS.1,00,000 PER ANNUM AS LIFE INSURANCE PREMIUM.

9)DO YOU HAVE A LIFE INSURANCE POLICY/INVESTMENT PLAN IN YOUR NAME? YES 33% NO 67%

DATA INTERPRETATION ACCORDING TO THE SURVEY IT SHOWS THAT 38% RESPONDENTS HAVE LIFE INSURANCE POLICY IN THEIR NAME & REST ALL DONT HAVE A SINGLE POLICY IN THEIR NAME.

10) What additional features do you expect from the company?

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More Outlets Service Improvement Less Charges

23% 28% 49%

DATA INTERPRETATION ACCORDING TO THE SURVEY IT SHOWS THAT 49% OF THE PEOPLE EXPECT LESS CHARGE FROM THEIR COMPANY AND 28% OF THEM THINK SERVICE SHOULD ALSO IMPROVE.

ANNEXURE A. Questionnaire
Name Age ______________________________ ______________________________

Occupation ______________________________

Q1. Which insurance company do you prefer? a) Nationalized Company b) Private Company

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Q2. You have your insurance from which company? a) HDFC Standard Life b) ICICI Prudential c) Kotak Mahindra d) Birla Sunlife e) Max New York

Q3. What influences you to take an insurance policy? a) Advertisement b) Facility provided by the company c) Brand image d) Life risk e) Premium f) Location of the company

Q4. How do you rate your company? a) Good b) Fair c) Poor

Q5. Rate your company on following attributes. a) Awareness about products b) Services with your policy c) Sales staff d) Companies staff

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Q6. How long have you been operating with your company? a) Less than 2 years b) 2-3 years c) 3-5 years d) More than 5 years

Q7. Are you aware of the new unit linked insurance plans in the market? a) Yes b) No

Q8. How much would you be willing to spend per annum if you were to go for an investment/insurance plan? a) Rs.10,000- Rs.25,000 b) Rs.25,000-Rs.50,000 c) Rs.50,000-Rs.1,00,000 d) More than Rs.1,00,000 Q9. Do you have a life insurance policy/investment plan in your name? a) Yes b) No

Q10. What additional features do you expect from the company? a) More Outlets b) Service Improvement c) Less Charges

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BIBILIOGRAPHY

Marketing of Banking Services Business Research Methodology Marketing Management Principal of Insurance

: : : :

Rajeev K. Seth C.R.Kothari Philip Kotler R.I.Mehr

NEWSPAPER AND INTERNET

Times of India The economic times

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Goole.com Answers.com Hdfcslic.com Icicipru.com Kotakmahindra.com Maxneyyork.com Birlasunlife.com

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