Financial Planning - IDBI Federal

Summer Training Report
On
Financial Planning Through Insurance
IDBI FEDERAL INSURANCE CO. LTD.
Submitted in the partial fulfillment for the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION(
from MDU, Rohtak
Session : 2015-18
Submitted To: Submitted By:

Controller of Examination Harender
MDU, Rohtak BBA 5th Sem.
Roll No. .................
[Approved by AICTE & Affiliated to M.D.University Rohtak]

Sec. 86-Faridabad near Sai Dham.
DECLARATION
I, Harender is a student of BBA of IMT, Faridabad hereby declare that the Training
Report entitled, “ Financial Planning Through Insurance” is an original work and
the same has not been submitted to any other institute for the award of any other
degree. The suggestions as given by the faculty were duly incorporated
(Harender)
ACKNOWLEDGEMENT
“Expression of feelings by words makes them less significant when it comes to make
statement of gratitude”
I would like to thank, IDBI Federal India at Gurgaon Branch for having given me an
opportunity to undergo project report on the company.
I am also thankful to ……………………….. (Associate Professor) for his cooperation

during this period.
Once again, I would like to thank all the staff members and my friends who during the
course of my report helped me with my learning objectives.
I hope that I have been successful in my endeavour. Discrepancies, mistakes, if any, are
solely mine.
[Harender]
PREFACE
No professional curriculum is considered complete with out work experience.
Every individual who is doing management studies has to go this phase of practical study before
he/she considers himself/herself fully qualified as potential managers.
I got an opportunity to do report with IDBI Federal. I undertake the report to study of Financial
Planning.
People affiliated with management studies have a different view on this aspect and management
that “class studies have nothing to do with practical work”. But during my research I realized that
the project report a crucial part as it prepares a BBA for the impending responsibility that awaits
him/her in future. It integrates the theoretical aspect with the practical life and help in
understanding the business solution in better way.
TABLE OF CONTENTS
o Company Profile
o Review of Literature
o Research Methodology
o Data Analysis & Interpretation
o Findings of the Study
o Conclusions & Suggestions
o Appendix
 Questionnaire
 Bibliography
COMPANY
PROFILE
COMPANY PROFILE
IDBI FEDERAL
IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s premier
development and commercial bank, Federal Bank, one of India’s leading private sector banks and
Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns 48%
equity while Federal Bank and Ageas own 26% equity each. IDBI BANK: IDBI was formed in
1956. They provided funding for major corporate, SEBI, NSE etc. Later on they merged with IDBI
BANK in 1992. This is the only Government owned bank of our country, where the Government of
India holds 61% stake in the company. The bank has zero account balance even for non-corporate
entities. This bank was formed, to support India’s Industrial Financial sector. FEDERAL BANK:
This is also known as “God’s own bank”, as their major operations are in Kerala. This is India’s first
bank to have core banking service. They have a huge NRI base. Nearly 50% revenue of IDBI
FEDERAL is from FEDERAL BANK.
AGEAS: They have expertise in the know-how about Insurance business. They focused only on
LIFE INSURANCE business.
IDBI FORTIS: The merger between the three companies, started off as IDBI FORTIS, in
association with FEDERAL BANK. FORTIS was initially a bank, who later ventured into insurance
and mutual fund business. This had an international presence. Later on, BNP Paribas took over
FORTIS and thus, FORTIS became AGEAS. This gave birth to IDBI FEDERAL LIFE
INSURANCE CO. LTD.
IDBI FEDERAL LIFE INSURANCE CO. LTD.: At IDBI Federal, they endeavour to deliver
products that provide value and convenience to the customer. Through a continuous process of
innovation in product and service delivery they intend to deliver world-class wealth management,
protection and retirement solutions to Indian customers. Having started in 2007-2008, in just five
months of inception they became one of the fastest growing new insurance companies to garner Rs
100 Cr in premiums. They chalked up the highest “first year” sales figures by any Insurance
company. The company offers its services through a vast nationwide network across the branches
of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on
January 31st 2014, the company has issued over 3 lakh policies with over Rs. 15, 230 Cr in Sum
Assured. There are many channels through which they sell. These include Agencies, Alliances,
Bankers, Brokers, and so on.
History
 2006: IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis Insurance International
 NV signed a MoU to start a life insurance company
 2008: IDBI Fortis Life Insurance Co. Ltd., which started its operations in March 2008
 2008: IDBI Fortis opens its second branch in Andhra Pradesh in Vijayawada
 2008: IDBI Fortis Life positive on assured return products
 2008: IDBI Fortis launches the Bondsurance Plan
 2009: IDBI Fortis announces Rs 250cr capital infusion
 2009: Nimbus ropes in IDBI Fortis as title sponsor of India–Sri Lanka series
 2009: 'IDBI Fortis' Boss-Ka-Boss receives PRCI Award
 2009: IDBI Fortis launches Retiresurance Pension Plan
 2009: IDBI Fortis scores with Goalsurance
 2009: IDBI Fortis reaches the banks of Hoogly
 2009: IDBI Fortis launches Incomesurance Immediate Annuity.
 2009: IDBI Fortis Life Insurance uses an interactive application to help users easily calculate their taxes
 2009: IDBI Fortis reaches the City of Eastern Light
 2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009'
 2009: IDBI Fortis Life Insurance introduces financial inclusion plan in rural Orissa
 2009: IDBI Fortis launches Termsurance Protection Plan
 2013: IDBI Fortis redefines endowment & money back with Incomesurance
 2014: IDBI Fortis to open 65 more branches; raise headcount by 1,000
 2016: IDBI Fortis now renamed as IDBI Federal Life Insurance Company
Schemes Offered by IDBI Federal Life Insurance:
1. Childsurance:
IDBI federal’s childsurance is for the parents who are looking to make their child’s future shock-
proof is its powerful insurance benefits. Childsurance allows to you to protect your child plan with
triple insurance benefits so that your wealth-building plan remains unaffected by unforeseen events
and your child future remains secure.
2. Healthsurance:
IDBI federal Healthsurance Hospitalization and surgical plan offers host of features and benefits
that is designed to help the customers to manage extra burden that comes with hospitalization.
3. Lifesurance:
IDBI feral Lifesurance Plan is a saving insurance plan that helps you to safeguard your wealth at
the same time will present better opportunity to earning better return.
4. Bondsurance:
Bondsurance is designed for customer looking for guaranteed returns which will not get affected
by financial market conditions. It offers guaranteed return on investment along with life insurance
cover.
5. Wealthsurance:
Wealthsurance plan enables the policyholder to save and build wealth to meet their financial
goals. Wealthsurance plan comes up with a wide range of 13 investment option and 7 insurance
benefits with low charge structure and unmatched flexibility.
6. Homesurance:
Homesurance protection plan provides full insurance cover for properties under construction,
thus ensuring that beneficiary gets the full sanctioned amount in case of an unfortunate event. It also
has an innovative fixed cover for those who would prepay their loans early.
7. Incomesurance:
Knowing customer helped us to combine the Endowment & Money Back plans into a single
plan. It linked the returns to the G-sec rates, transparently declared by the government. Also, the
Guaranteed Annual Payout and other benefits upon death are tax- free under Sec 10(10D).
8. Termsurance:
Teramsurance protection plan of IDBI federal offers unique increasing cover option that can
automatically increase the cover every year without increasing the premium.
REVIEW
OF
LITERATURE
REVIEW OF LITERATURE
The rapid growth of capital markets in India has opened up new investment avenues for investors.
Keeping this in mind the Financial Institutions provide number of services to its customer with a wide
spectrum of investment opportunities. In order to retain their customers they provide them with special
services besides traditional services.
The invention of new technology and services by financial institutions has given the consumers a wide
range of investment avenues to invest in. One of the special services brought out by them is
“FINANCIAL PLANNING SERVICES” which aims at identifying a person’s financial goals,
evaluating existing resource and designing the financial strategies that help the person to achieve those
goals and enables him to earn maximum returns at minimum level of risk.
The stock markets have become attractive investment options for the common man. But the need is to be
able to effectively and efficiently manage investments in order to keep maximum returns with minimum
risk.
Financial Planning helps you to give direction and meaning to your client’s financial decisions. It allows
him to understand how each financial decision affects other areas of finance. For example, buying a
particular investment product may help your client to pay of his mortgage faster or may delay his
retirement significantly. By viewing each financial decision as a part of a whole, you may help your
client consider the long term and the short term effects on his life goals. You will help them feel more
secure and more adaptable to life changes, once they can measure that they are moving closer to the
realization of their goals.
In near future a proper financial planning is required to invest money in all type of financial product
because there is good potential in market to invest.
The main objective of this project on FINANCIAL PLANNING is to review the real meaning of
Financial Planning, its objectives, role, framework, responsibilities of Financial planner and the study of
various other issues related to Investment planning, Tax planning, Asset allocation and Retirement
planning.
I am inclined to this topic, as it has given me actual knowledge of this service along with its working
and how the financial planner plans and manages the portfolio. Moreover, it has guided me to
understand this so called complex world of investment and financial planning and also increase my
knowledge to such extent. I hope it will prove beneficial to me in developing my further career.
This project was undertaken to know what exactly is the Financial Planning, How it is carried
out ,Who carries it out, Why it is carried out, When it is carried out ,and the most important What is the
benefit of carrying it out. Below my question were answered.
Basically Financial Planning is the process of meeting life goals through the proper management of your
finances. There is a need for financial planning because the financial situation in the country has
changed in the last few years, this has changed in such a manner that it will be difficult for one to
maintain a decent standard of living with the current means this requires financial planning and in
addition there are also several individual specific factor that has to be fulfilled. Financial planning
provides direction and meaning to one’s financial decisions. The process involves gathering relevant
financial information, setting life goals, examining customer current financial status and then coming up
with a plan for customer on how he can meet with his goals.
The process that is followed by the IDBI Federal is the planner first discuss the general
recommendations with the client informally, this allows the clients to indicate their preferences and
opinions on the options that have been designed. Once the planner and the client agree on the
recommendations, a concise written proposal is prepared along these lines:
An overview of the clients short and long term goals.
The client’s current financial strengths and weaknesses and implications of financial plan.
The client’s financial objectives anchored to current resources.

A detailed summation of all recommendations.
The financial plan for mutually selected recommendations.
A comprehensive economic overview of the client’s financial plan, supported by financial
statements.
A step-by-step implementation and monitoring plan.
Definition:-
Financial Planning is the process of identifying a person’s financial goals, evaluating existing
resources and designing the financial strategies that help the person to achieve those goals.
Process of Financial Planning:-

Financial planning is a highly personalized service. It is not a product. It is a cyclical service that
constantly repeats as client needs change over time. Preparation and implementation of the financial
plan is a long-term relationship and not a one-off exercise.
For the success of the financial planning exercise, it is essential that the prospective client should have
complete confidence in the financial planner’s capabilities. Confidence is built when the planner can
demonstrate adequate knowledge, technical depth and complete dependability. Also remember that
financial planning is a two-way interaction between the client and the planner. It is not and should not be
treated as a one-way prescription which is to be given by the planner to the client. Both the planner and
the client have certain responsibilities to make the exercise a success.
The Planning Process:-
The preparation of the financial plan is a multi-dimensional process. It requires the planner to collect as
much information as possible about the current resources, assets and liabilities of the client. The planner
needs to analyze the collected information from a number of different aspects to develop an optimal
financial plan. To prepare and implement a comprehensive and effective financial plan, the Financial
Planning Standards Board recommends the following 6-step process:-
Let us look at the above steps in more detail.

1. Establish the Client-Planner Relationship
Before approaching a client, it is important for the financial planner to clearly understand his
own role. The role of the financial planner is not to suggest get-rich-quick schemes. Rather, it is
to evaluate and study the clients' needs, gather and analyze data and prepare a financial plan
for now and for the future. Preparation and implementation of the financial plan is a long-term
relationship and not a one-off exercise.
A financial planner has to prepare a plan that helps his clients:-

 Organize their finances
 Improve their cash flows
 Lower their personal income taxes
 Plan for their retirement
 Improve their investment performance
 Lower their investment risk
 Insure themselves appropriately and reduce insurance costs
 Minimize their estate settlement costs
To achieve this, the planner needs to answer the following questions:

 What is the most immediate concern of the client?
 What is the client’s current financial situation?
 What are the client’s immediate and long-term needs?
 What is the gap between the client’s needs and the current financial situation?
 What services can you apply to the client’s needs?
 How would the client benefit from your service portfolio?
 What is the estimated time frame to complete the plan and accomplish goals?
 Is your role likely to be of an adviser, motivator, teacher, or director?

Client agreements and confidentiality clauses
When a client utilizes the services of a financial planner, he/she shares financial and other personal
information with the planner that is normally not shared with anyone else. The client-planner relationship
presupposes a very high level of trust between the two parties. Consequently, the planner is under obligation
to maintain utmost confidentiality of this information. To prevent unnecessary litigation and disputes in the
future, it is recommended that the financial planner should enter into a client agreement which formalizes
the relationship with the client and establishes the basis on which the service would be provided. Such an
agreement is also referred to as the 'Letter of Engagement.'
2. Gather client’s data and determine goals and expectations

The next step involves researching and collecting information that will help the financial planner
design and implement a successful financial plan. There are two aspects to this exercise:-
(a) Understanding the client's current financial position.
(b) Getting to know the client's financial goals, objectives and requirements.
The first helps the financial planner understand where the client is at the moment and the second
helps, the financial planner understands where the client wishes to go.
Formulation of Goals
Financial goals are the milestones that the client hopes to reach with the help of his financial
resources.
These milestones could be concerning different aspects of life like:-
Saving for marriage / childbirth
Buying a new car / house / electronic equipment
Creating a corpus for retirement
Creating a corpus for children's education
Adequately insuring self and family
Creating cash reserves for emergency usage etc.
The financial planner should ensure that the goals are:
 Specific;
 Realistic;
Measurable / Quantifiable in money terms; and
To be achieved within a specific time period

Once the client has stated clear, quantifiable goals for financial planning, the next step is to rank those goals
in order of importance. This is necessary because most clients do not have the resources to fulfil all their
goals. The financial planner must make it clear to the client that less important goals must be sacrificed or
postponed to achieve the more important ones. This done, the financial planner needs to work out the
amount of money available for achieving these goals. To achieve most financial goals, the client would need
to start saving and investing appropriately. Therefore it is important for the financial planner to know where
the money to invest will be coming from.
3. Analyze client’s objectives, needs and current financial situation Preparation of the Client's Personal
Financial Statements Preparation of the Cash flow Statement and the Budget Prioritizing Goals The next
step is to prioritize the financial goals of the client and work out the amounts that are required to be invested
towards achieving these goals.
Evaluate Qualitative Factors

Qualitative factors have a significant bearing on the financial plan for a client. The client's
tolerance towards risk, investment preferences, current health status etc. need to be kept in mind while
evaluating alternative Strategies.
4. Develop appropriate strategies and present the financial plan

A financial planner needs to develop appropriate strategies for the client in the following areas:
 Cash flow management
 Insurance planning
 Investment planning
 Retirement planning
 Income tax planning
 Estate planning
Cash Flow Management
Cash flow management is the means for funding client’s goals in other planning areas, therefore;
generally it is the starting point of the planning process. Once the cash flow management plan is in place,
the inflows have to be channelled in one of the three areas - expenses, reserves for emergencies and capital
accumulation.
Once your clients have planned to maximize income and minimize spending, they need the planner's help to
plan for their insurance, investment, education, income tax, retirement, and their estate.
The Benefits of Financial Planning

Financial Planning helps you give direction and meaning to your client’s financial decisions. It allows him to
understand how each financial decision affects other areas of finance. For example, buying a particular
investment product may help your client to pay off his mortgage faster or may delay his retirement
significantly. By viewing each financial decision as a part of a whole, you may help your client consider the
long term and the short term effects on his life goals. You will help them feel more secure.
Assessing your current wealth
Net worth: - Your assets are the things that you own. You probably own assets that have many
different forms, including cash, investments, personal property, real estate etc.
Definition:-
Your net worth is the difference between the totals of your assets and liabilities. In other words, if you
sold all your assets for the values stated and paid off all your debts, the amount left over would be
your net worth. The net worth of a person is a measure of a person’s financial position as of the date
of the personal balance sheet.
This relationship is shown below:

Items of Value - Amounts Owed = Net Worth
RESEARCH
METHODOLOGY
DEFINITION:
Research refers to „a search for knowledge‟. It can be defined as a scientific and systematic search
for pertinent information on a specific topic.
Research comprises defining and redefining problems, formulating hypothesis or suggested solutions;
collecting, organizing and evaluating data; making deduction and reaching conclusions; and at last
carefully testing the conclusions to determine whether they fit the formulating hypothesis – Clifford
Wood.
RESEARCH METHODOLOGY
It is a way to systematically solve the research problem. It may be understood as science of studying
how research is done scientifically. In it we study the various steps that are generally adopted by the
researcher in studying his research problem along with the logic behind them. In general methodology is
an optional framework within which the facts are placed so that the meaning may be seen more clearly.
The sources of data shown that designing of a research plan calls for decision on the data sources are
research approaches (primary and secondary data) research instruments (observation survey experiment)
sampling plan and contact methods (personal interviews).
RESEARCH DESIGN
A research design is the determination and statement of the general research approach or strategy
adopted for the particular project. It is the heart of the planning. If the design adheres to the research
objectives, it will ensure that the client need will be served.
Research design is a plan structured and strategies of investigation. It is the arrangement of condition
and analysis of data in a manner to combine relevance to the research purpose with economy in
procedure.
 In order to achieve the objective it was necessary to talk to the customers and public to draws the
conclusions regarding the objective.
 For visiting the customers and publics to collect the relevant information; a questionnaire has to be
designed. The questionnaire was designed in such a manner to achieve the objective of the research.
 The sample size taken is 50 customers and publics.

TYPE OF RESEARCH
In this project Descriptive Research has been used.
Descriptive Research:
This is kind of research structure which is concerned with describing the characteristics of the problem.
In this way the main purpose of such a research design is to present a descriptive picture about the
marketing problem on the basis of actual facts. For this it is important to obtain the complete and actual
information about the subjects.
Research Objective:
The Financial Planning is vast in nature. It is intended to provide a bird’s-eye view of the client’s assets.
The Financial planner has to have bottomless knowledge of markets, funds etc.
Considering this fact, the scope of the study is defined to satisfy following objectives:
Understand the necessity of financial planning,
Study and apply the financial planning process,
Identify various investment alternatives that can fit in client’s profile, and
Provide the client in an appropriate asset allocation mix based on certain factors like time horizon,
risk tolerance etc.
This project consist of Quantitative as well as Qualitative data as data collect for preparing plan is both
the types
Gathering Data
There are two types of data to gather from the client
- Quantitative
- Qualitative.
Quantitative Data
Quantitative data provides specific information concerning a client along with numerical details
Concerning his/her financial status. It also provides the basis for the many financial analyses that the
financial Planner needs to perform.
Examples of quantitative data include the following:
 General family profile
 Names, addresses, and phone numbers of family members
 Assets and liabilities
 Cash inflows and outflows
 Insurance policy information
 Employee benefit and pension plan information
 Tax returns for the last three years
 Details on current investments
 Retirement benefits available
 Client-owned business information
Qualitative Data
Qualitative information provides general information concerning a client's goals, lifestyle, health status,
risk tolerance level, employment status, hobbies, attitudes, and fears. Knowing a client's specific goals,
such as planning to move when retiring at age fifty-five, funding a child's college education and
expenses, starting an expensive hobby just before retirement, or travelling extensively during retirement,
is important to the success of any financial plan.
Examples of qualitative data include the following:

 Goals and objectives
 Health status of client and family members
 Interests and hobbies
 Expectations about employment
 Risk tolerance level
 Anticipated changes in current/future lifestyle.
 Other planning assumptions.

Data Sources:
SECONDARY DATA:
The secondary data includes information obtained from various sources which includes, Books,
Business Newspapers, Websites, etc
LIMITATIONS OF THE STUDY
1. The project work is mainly based on the above mentioned sources of information.
2. Limitation of client in investing in particular kind of asset based on his age.
3. Time limitation
OBJECTIVE OF THE STUDY
To take an overview of the client’s in short and long term goals.
To have the client’s current financial strengths and weaknesses and implications of financial plan.
To study the client’s financial objectives anchored to current resources.
To give a detailed summation of all recommendations.
To suggest appropriate financial plan for mutually selected recommendations.
To also give comprehensive economic overview of the client’s financial plan, supported by financial
statements.
To follow step-by-step implementation and monitoring plan.
SCOPE OF THE STUDY
Personal Financial Planners are not just for wealthy people. Every individual can benefit from objective
help to create, grow, accumulate and utilize wealth to fulfil one’s personal goals, family goals and other
lifestyle objectives systematically without any anxiety. Financial planners can guide individuals to
achieve their ultimate aim of spending retired life peacefully without compromising living standards. A
Qualified financial planner will provide advice on.
Systematic Savings
Cash Flow Management
Debt Management
Assets Allocation for Investment
Managing Risk through Insurance Planning
Tax Strategies to increase investible surplus
Distribute residual wealth through estate planning
Financial Planning is a profession for people with good communication skills combined with knowledge
of how financial service industry works. As a Financial Planner one could work for a bank, insurance
company, a brokerage house or have own practice. Most important is to understand that the suitability of
products you are guiding people to purchase is based on their Risk Appetite, Age and Time Frame of
Goals and Objectives. Financial Planners need to update themselves constantly on new products,
services and tax laws that might be good for their clients. This is a field that requires a life time of
continuing education. A Trusted Financial Planner can play an important role in people’s lives helping
them to achieve dreams such as owning a home, seeing their children’s education and enjoy an active
retirement.
DATA ANLAYSIS
&
INTERPRETATION
Practical Representation
Financial Planning:-
Financial planning for Individual:-
A personal financial assessment is designed to help you evaluate your current financial position and your ability to
achieve your objectives for the future.
Your ability to maintain your lifestyle objectives for the future is determined by your investment capital and
ongoing income. In analyzing your situation we need to consider what is achievable given your current position,
and how we can take best advantage of the assets you have accumulated.
This report has been prepared to assist in the analysis of your current financial position and to help you identify
steps that you can take to achieve your personal financial goals and objectives. Although great care has been taken
to ensure the accuracy of this report, it should be kept in mind that projections, by their very nature, are based on a
variety of assumptions and as such it is likely that the actual results achieved will be somewhat different than
illustrated. For this reason it is very important that you review your strategy on a regular basis to ensure its
relevance to your changing financial position.
Financial Goals
The following table lists your individual goals in today's value, when you expect to meet them
and the expected rate of inflation.
Create and maintain an adequate emergency fund
You must ensure that you are adequately prepared for unexpected events in the short-term by
creating an emergency fund equal to three to six months of living expenses. This will enable you
to pay for costs that are not covered by insurance, as well as any kind of urgent expenses.
You have Rs. 1.21 lakhs in your savings account. You are advised to maintain Rs. 50,000
(approximately one month of your expenses) as an emergency fund. Though one must keep at
least 3-6 months of living and committed expenses in emergency fund. However, you have an
immediate goal of house purchase in the year 2016.
You are advised to build and maintain an emergency fund gradually (after you have acquired the
immediate goal – home purchase) to an equivalent amount of Rs. 1.50 Lakhs over time.
Your Emergency Fund
Category Amount in
Total 1,21,00
Amount transferred from savings account to 71,00
investment
Savings account amount allocated to 50,00
emergency fund
Investment Planning
Current Asset Allocation
Asset allocation is the cornerstone of good investing. Each investment included in your portfolio
must be of an overall asset allocation strategy and this plan must be genetic (one-size-fits-all), but
rather must tailored to your specific needs. Based on the information that have provided, the
current asset allocation if your portfolio is:
Proposed Asset Allocation

Asset allocation is the cornerstone of good investing. Each investment included in your portfolio
must be part of an overall asset allocation strategy and this plan must be genetic (one-size-fits-
all),but rather must tailored to your specific needs. Based on the information that have provided,
the current asset allocation if your portfolio is:
Protection Planning
The purpose of the protection planning section is to examine existing insurance coverage and
make recommendations. The goal is to determine whether there is adequate coverage and/or if
any additional coverage that may be needed.
Life Insurance
Observation
Currently you are covered by different life insurance policies worth sum assured of Rs. 8 laky by
LIC, Max Life and ING Vyasa. You pay an annual premium of Rs. 26,647 per annum. (See life
insurance details, Annexure 1).
Life insurance need analysis requires that we look at what would happen in the event of your
death. This analysis is done using information you provided to us about your income,
expenditure, assets and insurance coverage.
We have computed the insurance coverage requirement for you based on a scenario that all
household expenses that will need to be incurred by your family and all other financial goals and
liabilities are fully met in the event of your death.
As per our analysis you are under-insured by Rs. 1 crore. (See life insurance need analysis,
Annexure 2)
Recommendation
You are advised to buy an additional term life policy worth Rs. 1 crore. The annual estimated
premium is expected to be Rs.26, 192 for a term of 20 years. (Source: HDFC Term Life Insurance
Policy).
Health Insurance
Observation
Currently, you are not covered for health by any private health plan.
You must have adequate health insurance coverage especially because of rapidly rising health
care costs. In addition to the employer provided plan, it is strongly advisable to keep a private
health plan. This is especially useful if you change jobs. Also, health insurers do not accept pre-
existing diseases.
Recommendation
You must consider buying a family floater scheme worth sum assured Rs. 3 Lakh. This will cover
you, your spouse and your child. The estimated annual premium is Rs. 3,575. (Source: Reliance
Health Silver Plan)
Planning for Goal
Observation
You are planning to buy a new house of approximately Rs. 30 Lakh in the year 2014.
Analysis
Based on your current situation, you can meet the above mentioned goal to the extent as
mentioned below:
Amount in Rs. (in today's value)
Recommendation:
Funding available towards your home purchase goal
1. Down payment of 15% of the value of home through the Investment Portfolio
2. Bank loan for funding the balance of Rs. 25.50 Lakh.
1. Down payment of Rs. 4.50 Lakh through the Investment Portfolio as follows:
Savings account – Rs. 71,000 must be utilized

Mutual funds – Rs. 2.07 Lakh
Surplus of year 2008 – Rs. 1.71 Lakh
2. Bank loan for funding the balance Rs. 25.50 Lakh.

Description Year Annual Estimated EMI in Rs.
Annual Income 2009-2023 3.04 Lakh
Note: Please note that our analysis shows that in the year 2009, the annual income surplus is not
expected to support the EMI in the year 2009 by Rs. 96,000. However, as you will get tax
benefits under section 24(b) for the interest portion paid towards home loan, you will be able to
meet the EMI expense by the Money saved on taxes.
Goal: Khushi’s Education

Observation
You need to plan for the following education expenses of Khushi's in today's value.
1. School education of Rs. 30,000 per annum starting in the year 2009 till the year 2021. This is
expected to grow at 10% per annum.
2. College education expenses of Rs. 40,000 per annum (in today's value) between 2022 and
2025.
3. Professional education expense of Rs. 10 Lakh in today's value in the year 2026.
Analysis
mentioned below:
Amount in Rs. (in future value)
Recommendation
You should consider utilizing the following sources of cash to help you fund your goal as per our
analysis.
1. Regular annual income surplus to fund the school education – We have treated the school and
college expense as a regular expense and deducted this from your cash flow every year. Your
annual income surplus during the years 2009-2025 is expected to support the education expenses
as mentioned above.
2. Investment from the Annual surplus in the recommended portfolio to fund college and
professional education expenses
Description Year Amount to be invested (Rs.)

Investment from 2011-2025 1.48 Lakh annual surplus
Note: The Investment is expected to be made in the recommended asset allocation which is
expected to generate 10.80% per annum
Observation
You need to plan for the following education expenses of Khushi's in today's value.
1. School education of Rs. 30,000 per annum starting in the year 2013 till the year 2025. This is
expected to grow at 10% per annum.
2. College education expenses of Rs. 40,000 per annum (in today's value) between 2026 and
2029.
3. Professional education expense of Rs. 10 lakh in today's value in the year 2030.
Analysis
mentioned below:
Year Goal Amount Goal Amount

(Desired) (Achievable)
Recommendation
analysis.
1. Regular annual income surplus to fund the school education – We have treated the school and
college expense as a regular expense and deducted this from your cash flow every year. Your
annual income surplus during the years 2013-2025 is expected to support the education expenses
as mentioned above.
2. Investment from the Annual surplus in the recommended portfolio to fund college and
professional education expenses
Description Year Amount to be invested (Rs.)

Investment from 2010 88,782 annual surplus 2011 43,939
2012 1.24 lakh
2013 1.06 lakh
2014-2027 1.58 lakh
Observation
Khushi's is expected to get married in 2028. You need to plan for the following expenses in
today's value.
1. Marriage expenses of Rs. 4 lakh (today's value) in the year 2028.
Analysis
mentioned below:
Recommendation
analysis.
1. Regular annual surplus
Observation
You need to plan for following expenses in today's value:
1. Domestic - You wish to spend Rs. 20,000 on vacation every 2 year.
Analysis
Recommendation
In our analysis, we have taken the above expense as an annual regular expense and your cash
flow is supporting this expense from your annual income surpluses from 2009-2047.
Observation
The probable year for your expected 2nd child to get married is 2032. You need to plan for the
following expenses in today's value.
1. Marriage expenses of Rs. 4 Lakh (today's value) in the year 2032.
Analysis
mentioned below:
analysis.
1 Regular annual surplus
Observation
You intend to retire at age 50. After retirement you need to plan for the following expenses in
today's value.
1. Annual household expenses of Rs. 3.60 Lakh in today's value between 2027(your
retirement year) and 2056 (life expectancy).
Analysis
Based on your current and projected financial situation you cannot meet the above mentioned
goals due to retirement at age 50.
Note: You are contributing every month Rs. 3,500 towards to Provident Fund and Rs. 1,400 per
month towards Gratuity. In our analysis, expected growth rate of PF and Gratuity is 8% per
annum. Also there is a contribution from your employer of Rs. 3,500 per month towards your
Provident Fund account.
Recommendation
You should consider utilizing the following sources of cash to fund your retirement goal as per
our analysis:
1. Retiral assets
2. Insurance maturity proceeds
3. Annual income surplus to be invested in recommended asset allocation
1. Retiral assets
2.Insurance maturity proceeds
3. Annual income surplus to be invested in recommended asset allocation to fund the balance of
retirement goal:
Note: All the above surpluses have been allocated towards your retirement goal, this is done after
funding the other goals such as Khushi's marriage, education, etc.
Financial Glossary:
Net Worth: Assets less Liabilities.
Cash Flow: Income less Expenses.

Monthly Budget: A way of tracking your monthly income and expenses.
Contingency Reserve Fund: Fund to meet any unforeseen immediate Emergency/contingency
need.
Large Cap Stocks: These are investments in the common stocks of well- recognized, large
companies that are expected to produce relatively
Secure and stable earnings.
Mid Cap Stocks: These are investments in stocks of mid-sized companies that are expected to
provide a blend of growth and earnings.
Small Cap Stocks: These are investments in common stock of relatively small, low
capitalization companies whose earnings are expected to grow at an above-average rate.
B) Analysis of the Data Collected: Questionnaire

1. Which of the following best describes your occupation?
Graph 1: Occupation of sample
Interpretation: The occupational level of the sample studied majorly varied from private sector to
public sector. There were also respondents who are businessmens, housewife and remaining 20%
belongs to other categories.
2. What best describes your annual income?
Graph 3: Income of the sample
Interpretation: The income composition of study was predominantly of income bracket 1 – 5 lakhs,
closely followed by 5 – 10 lakhs.
3. What is your age?

Graph 3: Age of the sample
Interpretation: The age group of study was predominantly of age bracket 18 years to 25 years, closely
followed by 26-35 years.
4) How much percentage of your income goes in investment?
Graph 4: Percentage of your income goes in investment .
Interpretation: 44% of the respondents invest less than 10% of their income in investments.
Please mark the following. - 5) Awareness about investment .
Graph 5: Awareness about investment ..
Interpretation: 52% of the respondents said that they possess good knowledge about the awareness of
investment , while 24%said they possess very good and excellent knowledge about the same.
Please mark the following. - 6) Awareness about the different modes of investment available.
Graph 6: Awareness about the different modes of investment available.

Interpretation: Half of the respondents said that they possess good knowledge about the awareness of
the different modes of investment available , while 32%said they possess very good knowledge about
the same.
Please mark the following. - 7) Awareness about the functioning of mutual funds.
Graph 7: Awareness about the functioning of mutual funds.
Interpretation: 56% of the respondents said that they possess good knowledge about the functioning of
mutual funds .
8) Have you ever invested your money in mutual funds before?
Graph 8: Investment in mutual funds before.
Interpretation: 76% of the respondents said that they have not invested their money in mutual funds
before.
9) To whom you would consults with before or at the time of investment?
Graph 9: Gathering of Information.
Interpretation: People who have bought investment products said that they first look for advice from
their families about the investment products before purchasing it. Other than that, it is Investment
advisor that become their first option on deciding to buy a product. It is evident that word of mouth
plays a very crucial role in purchase decision.
10) My investments are taken care by?
Graph 10: Investments are taken care by .

Interpretation: 54% of respondents said that their investments are taken care by their family members,
24% said that their spouse and 22% said that they themselves look after their investments .
Please mark the following. - 11) I think investing in stock market or equity funds is very risky .
Graph 11: Investing in stock market or equity funds is very risky.
Interpretation: Half of respondents agreed when asked whether investing in stock market or equity
funds is very risky , while 24% remains neutral and 22% strongly agreed on the same.
Please mark the following. - 12) I think investing in mutual funds is more profitable than bank FDs.
Graph 12: Investing in mutual funds is more profitable than bank FDs.
Interpretation: 48% of respondents disagreed when asked whether investing in mutual funds is more
profitable than bank FDs , while 34% agreed on the same.
Please mark the following. - 13) I have complete knowledge of the benefits of investing in mutual
funds.
Graph 13: Knowledge of the benefits of investing in mutual funds.
Interpretation: 46% of respondents remain neutral when asked whether they have complete
knowledge of the benefits of investing in mutual funds , while 34% agreed on the same.
Please mark the following. - 14) Do you want to invest in mutual funds in future?
Graph 14: Want to invest in mutual funds in future.
Interpretation: 46% of respondents remain neutral when asked whether they want to invest their
money in mutual funds in near future , while 42% agreed on the same.
15) Please rank the following," In which sector you would like to invest " - 1 Rank
Graph 15: Most important Investment Avenue.
Interpretation: 48% of respondents said that to them the most important investment avenue is the
“Bank savings and deposits” while Real Estate are also of great importance.

Interpretation: Out of the total respondents, one third said that to them the most important investment
avenue is the “Insurance” while Real Estate , Mutual funds and Bank Savings and Deposits constitute
22%, 26% and 20% of the total sample.
Interpretation: 30% of the respondents said that to them the most important investment avenue is the
“Insurance” while Real Estate, Mutual funds and Bank Savings and Deposits are also of great
importance.

Interpretation: More than one third of the respondents said that to them the most important investment
avenue is the “Mutual funds” while Insurance are also of great importance.
Interpretation: Majority of the respondents gave 5th rank to “Others”.
20) What are your expectations from investment product? - 1 Rank
Graph 20: Expectations from investment product.
Interpretation: Two third of the respondents said that they expects good returns from their investment
products.
Interpretation: Little more than one third of the respondents mark low risk as their expectation from
their investment products, followed by tax benefit 28% and good returns 26%.
22) What are your expectations from investment product? – 3 Rank

Interpretation: Little more than one third of the respondents mark liquidity as their expectation from
their investment products, followed by tax benefit 26% and low risk 24%.
Interpretation: Little less than half of the respondents mark stability as their expectation from their
investment products.

Interpretation: Little more than one third of the respondents mark liquidity as their expectation from
their investment products, followed by tax stability 32% and tax benefit 22% .
25) Choose in order of your preference for investing?
Interpretation: To get more information regarding their preference of investing in private players or
public players, 52% of the respondents prefer private players for investing their money.
CONCLUSION
CONCLUSION
The overall study about each and every aspect of this topic shows that Financial Planning is a
dynamic and flexible concept which involves regular and systematic analysis, proper management,
judgment, and actions.
It can also be concluded that client or Investors should start planning soon, set measurable goals,
Look at the bigger picture and should not expect unrealistic returns on the investments and value
of the plan lies in its implementation and it accurately reflects what you are personally trying to
accomplish.
It can also be concluded that with the combination of different stocks we can reduce the risk and
increase the returns of a portfolio. . By constructing portfolio we can only minimize the un-
systematic risk we cannot reduce systematic risk.
A proper Fundamental & Technical Analysis should be done before selecting any particular stock
for the portfolio. It minimizes the risk involved .
Financial Planning Service which was not so popular earlier as other services has gained lot of
importance and popularity & will gain more importance in future as people are now
understanding the importance of it.
Financial planning service is very important and effective investment tool for meeting your life
goals through the proper management of your finances.
SUGGESTIONS
To the Client:
The most vital problem spotted is of ignorance. Investors should be made aware of the benefits.
Investors should be made to realize that ignorance is no longer a bliss and what they are losing by
delay in planning.
Set measurable goals:

Set measurable goals that you want to achieve with a specific time. For example
What should be your lifestyle after retirement, or that to send children to good Schools
Start planning soon:

Delay in financial planning affects the whole big picture that he has in mind for himself and his
family. Developing good habits like saving, budgeting, investing and regularly reviewing
finances early in life, makes one better prepared to meet changes and handle emergencies.
Be realistic in terms of expectations:

Financial planning is a commonsensical approach to managing finances to reach life goals. It is a
lifelong process. There are certain extraneous factors like inflation, changes in macroeconomic
policies or interest rates that may affect financial results.
Understand the effect of each financial decision:

To realize that each financial decision that is taken affect several areas of his life.
To The Planner:
The planner should target for more and more young investors. Young investors as well as
persons at the height of their career would like to go for advisors due to lack of expertise and
time.
The planner should try to highlight some of the value added benefits, such as tax benefits,
systematic transfer plan, etc. Investors could also try to increase the spectrum of services
Offered.
The most important reason for not availing the serves of planner was spotted to be expensive.
The planner should try to charge a nominal fee at the beginning. But if no then they could go
for offering more services and benefits at the existing rate.
ANNEXURE
QUESTIONNAIRE
1.Name: ----------------------
2. Which of the following best describes your occupation?
a) Private sector service
b)Public sector service
c)Business
d)Professionals
e)Housewife
f)Others
3 . Which of the following best describes your annual income.
a)Below 1 lakh
b)1-5lakhs
c)5-10lakhs
d)10-25lakhs
e)Above 25lakhs
4.What is your age?
a)18-25
b)26-35
c)36-50
d)51-60
e)Above 60
5 . How much percentage of your income goes in investment?
a)Less than 10%
b)10%-20%
c)20%-30%
d)More than 30%
. Please mark the following.
Excellent Very good Good Poor Very poor

6) Awareness
about investment.
7) Awareness
about the different
modes of
investment
available.
8) Awareness
about the
functioning of
mutual funds.
9. Have you ever invested in mutual funds before?.
a)Yes
b)No
10. To whom you would consults with before or at the time of investment?
a)Broker
b)Family
c)Friends
d)Investment advisor
e)None
f)Others, please specify
11. My investments are taken care by?
a)Self
b) Family members
c)Friends
d)Business partner
e)Spouse
f)None
e)Other, please specify
Please mark the following.
Strongly agree Agree Neutral Disagree Strongly

disagree
12) I think
investing in stock
market or equity
funds is very risky
.
13) I think
investing in
mutual funds is
more profitable
than bank FDs.
14) I have
complete
knowledge of the
benefits of
investing in
mutual funds.
15) Do I want to
invest in mutual
funds in future.
16) Please rank the following," In which sector you would like to invest "
Rank1 Rank2 Rank3 Rank4 Rank5

Real estate
Mutual funds
Insurance
Bank
savings/deposits
Others
17) What are your expectations from investment product?
Rank1 Rank2 Rank3 Rank4 Rank5

Good returns
Tax benefits
Low risk
Liquidity
Stability
18) Choose in order of your preference for investing?
a)Private players
b)Public players
Thank you for your Valuable time !!!

BIBLIOGRAPHY
BOOKS, NEWSPAPERS and WEBSITES: -
I. BOOKS REFERED:
BOOK NAME AUTHOR NAME

1. Security Analysis & Bodie, Kane & Marcus
Portfolio Management
2. Financial Management I.M Pandey
3. Financial Planning Handbook IMS Preschool.
II. NEWSPAPER REFERED:

1. Economic Times and
2. Financial Express.
III. WEBSITES USED:

1. www.equitymaster.com
2. www.cmlinks.com
3. www.nse.com
4. www.nymex.com
5. www.netashare.com
6. www.idbifederal.com
7. www.investopedia.com
8. www.esnips.com

Financial Planning - IDBI Federal

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Summer Training Report

Financial Planning Through Insurance

IDBI FEDERAL INSURANCE CO. LTD.

Submitted in the partial fulfillment for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION(

from MDU, Rohtak

Submitted To: Submitted By:

[Approved by AICTE & Affiliated to M.D.University Rohtak]

I am also thankful to ……………………….. (Associate Professor) for his cooperation

No professional curriculum is considered complete with out work experience.

o Data Analysis & Interpretation

o Findings of the Study

o Conclusions & Suggestions

 2008: IDBI Fortis Life positive on assured return products

 2008: IDBI Fortis launches the Bondsurance Plan

 2009: IDBI Fortis announces Rs 250cr capital infusion

 2009: 'IDBI Fortis' Boss-Ka-Boss receives PRCI Award

 2009: IDBI Fortis launches Retiresurance Pension Plan

 2009: IDBI Fortis scores with Goalsurance

 2009: IDBI Fortis reaches the banks of Hoogly

 2009: IDBI Fortis launches Incomesurance Immediate Annuity.

 2009: IDBI Fortis reaches the City of Eastern Light

 2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009'

 2009: IDBI Fortis launches Termsurance Protection Plan

 2014: IDBI Fortis to open 65 more branches; raise headcount by 1,000

An overview of the clients short and long term goals.

The client’s financial objectives anchored to current resources.

The financial plan for mutually selected recommendations.

A step-by-step implementation and monitoring plan.

Process of Financial Planning:-

The Planning Process:-

Let us look at the above steps in more detail.

A financial planner has to prepare a plan that helps his clients:-

 Improve their cash flows

 Lower their personal income taxes

 Plan for their retirement

 Improve their investment performance

 Lower their investment risk

 Insure themselves appropriately and reduce insurance costs

 Minimize their estate settlement costs

To achieve this, the planner needs to answer the following questions:

 What is the client’s current financial situation?

 What are the client’s immediate and long-term needs?

 What services can you apply to the client’s needs?

 How would the client benefit from your service portfolio?

 Is your role likely to be of an adviser, motivator, teacher, or director?

2. Gather client’s data and determine goals and expectations

Buying a new car / house / electronic equipment

Creating a corpus for retirement

Creating a corpus for children's education

Adequately insuring self and family

Creating cash reserves for emergency usage etc.

The financial planner should ensure that the goals are:

To be achieved within a specific time period

Evaluate Qualitative Factors

4. Develop appropriate strategies and present the financial plan

 Income tax planning

The Benefits of Financial Planning

This relationship is shown below:

 The sample size taken is 50 customers and publics.

Study and apply the financial planning process,

 Names, addresses, and phone numbers of family members