CONTENT

Chapters I. II. III. IV. V.
Chapter 1

Title
Declaration Certificate Certificate Acknowledgement Preface Introduction 1.1 Introduction of the topic 1.2 Objective of the project 1.3 Hypothesis 1.4 Company profile 1.4.1 History of the insurance industry 1.4.2 ICICI Prudential – a profile About the project work 2.1 Ten reason why people by insurance 2.2 Marketing strategy adopted by players in the market 2.3 Unit Linked Insurance Plan 2.4 Mutual Fund 2.5 Calculation of productivity Methodology 3.1 Meaning of methodology 3.2 Research methodology 3.3 Data collection technique 3.4 Analysis and Interpretation of data Analysis of data Findings and Limitations 5.1 Findings 5.2 Limitations Recommendation Conclusion Bibliography Questionnaire

Page no.

Chapter 2

1-19 3 4 5 6-19 6-12 13-19 20-44 21-22 23-26 27-29 30-40 41-44 45-49 46 47 48 49 50-53 54-56 55 56 57-58 59-60 61-62 63-65

Chapter 3

Chapter 4 Chapter 5

Chapter 6 Chapter 7 Chapter 8 Chapter 9

1

CHAPTER-1

1.1 INTRODUCTION OF THE TOPIC

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The project aims at studying more customer inclination in between mutual funds & unit linked investment plans. The project has a detailed study of various Insurance plans offered by the major players in the Insurance sector. Made a comparative analysis of the of ICICI Prudential life Insurance plans with that of other major players. Carried out an in-depth study of all the major mutual funds available in the market & analyze their performance since their inception. To make a comparison between the performances of mutual funds with that of unit linked investment plans (ULIP).

The report includes case studies in order to illustrate the comparison between different ULIP schemes with Mutual fund schemes. The project aims to help understand the consumer behavior towards various financial services like Insurance and mutual funds. The report enhances the knowledge on how various marketing concepts learned in the classroom are implemented in a real life environment. The project entitled me to recommend Financial Advisor (FA) who will be a channel for bringing business to the ICICI Prudential Life Insurance Company. I was given to choose prospective clients who were inclined for a career in Insurance sector. The prospective candidate after dully scrutinized by, on fulfilling the entire criterion will be made Financial Advisor with ICICI Prudential, priority circle Raipur. This project also involved Brand image survey of ICICI Prudential Life Insurance and come up with few recommendations for improvement. The project required me design a questionnaire & to do a primary survey on investor perception towards ULIP & mutual Funds available in the market. The target respondents of the primary survey were managers, executives and consultant working for life Insurance companies. The data gathered from the primary survey were coded & for analysis and to find various factors that affect an investor decisions while choosing an ULIP or Mutual Fund plan in the market.

3

To do detailed analysis of the entire range of products/schemes offered by ICICI Prudential life Insurance company Ltd. It will help in making a detailed analysis of the spectrum of Insurance products available in the market across the industry. To collect the data through primary survey about the fund performance of ICICI Prudential ULIP plans & compares it with the various funds of major Insurance companies operating in the in the market. To collect data through primary survey. using a comprehensively designed questionnaire and analyzing the same for mapping the brand image of ICICI Prudential Life Insurance company and investor perception about the ULIP and mutual funds available in the market.1.3 Hypothesis 4 . 1. and to identify the major factor that influence investor for choosing an Insurance plan.2 Objectives To map the marketing & distribution strategy of ICICI Prudential Life Insurance Company limited and to compare various strategies used by various players in Life Insurance sector.

The alternate hypothesis (Ha) is a statement that the observed difference or relationship Between two populations is real and not the result of chance or an error in sampling. Ho: u = µ Ho (For longer time horizon ULIP plans are much better than Mutual funds) Ha: u ≠ µ Ho (Mutual fund s are better than ULIP plans) 1.Hypothesis testing refers to the process of using statistical analysis to determine if the observed differences between two or more samples are due to random chance (as stated in the null hypothesis) or to true difference in the sample (as stated in the alternate hypothesis).4COMPANY PROFILE 5 . variance) for two or more populations. A null hypothesis (HO) is a stated assumption that there is no difference in parameters (mean.

the members of the community help build a new one. Insurance as we know it today can be traced to the Great Fire of London. Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). It finds mention in the writings of Manu ( Manusmrithi ). we can see Insurance in the form of people helping each other. Guilds in the middle Ages served a similar purpose. the other neighbors must come to help? Otherwise. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinking of the vessel in the sea. Chinese merchants traveling treacherous river rapids would redistribute their cargo across many vessels to limit the loss due to any single vessel’s capsizing. Before Insurance was established in the late 17th century. Greek monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. and specialized varieties developed. started as a methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC. If a merchant received a loan to fund his shipment. The writings talk in terms of pooling of resources that could be re-distributed in times 6 .. These new Insurance contracts allowed Insurance to be separated from investment. “friendly societies” existed in England. Insurance has a deep-rooted history. Should the same thing happen to one’s neighbour. he established England’s first fire Insurance company. Nicholas Barbon opened an office to insure buildings. in which people donated amounts of money to a general sum that could be used for emergencies. Insurance policies not bundled with loans or other kinds of contracts) were invented in Greeks rulers in the 14th century. neighbors will not receive help in the future. which in 1666 A.200 houses. Insurance became far more sophisticated in post-Renaissance Europe.1732. The Babylonians developed a system which was recorded in the famous Code of Hammurabi.D devoured 13. c.4. The Greeks and Romans introduced the origins of health and life Insurance c. a separation of roles that first proved useful in marine Insurance.e. 1750 BC. Introduction to Insurance industry in India In India. Insurance in the modern sense. respectively. he would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen. and practiced by early Mediterranean sailing merchants. if a house is burnt.1) History of Insurance industry In some sense we can say that Insurance appeared simultaneously with appearance of human society. as were Insurance pools backed by pledges of landed estates. In the aftermath of this disaster. For example.” to insure brick and frame homes. “The Fire Office. They invented the concept of the ‘general average’. In 1680.1. In earlier economies. Separate Insurance contracts (i. The first Insurance company in the United States underwrote fire Insurance and was formed in Charles Town (modern-day Charleston). South Carolina. 600 AD when they organized guilds called “benevolent societies” which cared for the families and paid funeral expenses of members upon death.

1993 The Government set up a committee under the chairmanship of RN Malhotra former Governor of RBI to propose recommendations for reforms in the Insurance sector.. 107 insurers were amalgamated and grouped into four companies namely 1) National Insurance Company Ltd.The New India Assurance Company Ltd. the Indian Mercantile Insurance Ltd was set up 1912 The Indian Life Assurance Companies Act. 1956 Nationalization of Life Insurance Sector and Life Insurance Corporation came into existence in 1956.. Year Event 1818 The advent of life Insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. 1912 was the first statutory measure to regulate life business. 1971 The General Insurance Corporation of India was incorporated as a company 1973 General Insurance business was nationalized with effect from 1st January 1973. England in particular. 16 non-Indian insurers as also 75 provident societies.The United India Insurance Company Ltd. The Oriental Insurance Company Ltd 4). Ancient Indian history has preserved the earliest traces of Insurance in the form of marine trade loans and carriers’ contracts.of calamities such as fire. This was probably a precursor to modern day Insurance. epidemics and famine. 10 in Life and 6 in General Insurance 2001- 7 . 2000 The IRDA was incorporated as a statutory body in April 2000.The LIC absorbed 154 Indian. 1928 The Indian Insurance Companies Act was enacted. Insurance in India has evolved over time heavily drawing from other countries. 3). 1834 Oriental Life Insurance Failure 1850 The advent of General Insurance in India with the establishment of Triton Insurance Company Ltd in Calcutta 1870 The enactment of the British Insurance Act 1907 In 1907. 2). floods. Foreign companies were allowed ownership of up to 26%. 2000Insurance Industry had 16 new entrants.

2006 2006Bharti Axa Life Insurance company commenced its operations the newest player in the Insurance sector.Life Insurance Corporation of India (LIC) B) PRIVATE SECTOR 8 . LIFE INSURERS OPERATING IN INDIA A) PUBLIC SECTOR 1). Sahara India Insurance Company Ltd. In Life Insurance category 2004-2005 Insurance Industry had 1new entrant. 2003Insurance Industry had 1new entrant.Insurance Industry had 5 new entrants. 2 in Life and 3 in General. Shri Ram Insurance company Ltd. In Life Insurance category 2005Bharti Axa Life Insurance company was granted Certification of Registration in July.

Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. Ltd. Met Life India Insurance Co. 9. Sahara India Life Insurance Co. Ltd. Ltd. Max New York Life Insurance Co. Ltd... the New India Assurance Company Ltd. History of general The history of general Insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. 10. was set up. 9 . Nearly107 insurers were amalgamated and grouped into four companies. in the year 1850 in Calcutta by the British. HDFC Standard Life Insurance Co. Tariff Advisory Committee (TAC) lays down tariff rates for some of the general Insurance products. 11. Tata AIG Life Insurance Co. Ltd. National Insurance Co. 13. Bharti AXA Life Insurance Co. Ltd. 5. The New India Assurance Co. India Pvt. 4.. general Insurance business was nationalized with effect from 1st January 1973. ICICI Prudential Life Insurance Co. It came to India as a legacy of British occupation. Reliance Life Insurance Co. namely National Insurance Company Ltd. Birla Sun Life Insurance Co. a) Nationalization of general Insurance In 1972 with the passing of the General Insurance Business (Nationalisation) Act. The oriental Insurance Co. 8. Pvt. 12.The following private players are there 1. Ltd. 6. Bajaj Allianz Life Insurance Co. ING Vysya Life Insurance Co. Shriram Life Insurance Co. Ltd. 3. Ltd. Ltd. 15. the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. the Indian Mercantile Insurance Ltd. 7. Ltd 2. b) GENERAL INSURERS OPERATING IN INDIA · PUBLIC SECTOR 1. 3. Ltd. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd. Ltd. This was the first company to transact all classes of general Insurance business. SBI Life Insurance Co. Ltd. Aviva Life Insurance Co. Ltd. Pvt. 2. In 1907. 14. Ltd.

The Authority has the power to frame regulations under Section 114(A) of the Insurance Act. 3. the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the Insurance industry. Reliance General Insurance Co. Ltd. it recommended that the private sector be permitted to enter the Insurance industry. 9. Reforms in the Insurance Sector This millennium has seen Insurance come a full circle in a journey extending to nearly 200 years. Ltd. Ltd.e. to propose recommendations for reforms in the Insurance sector. in 1999. 2. former Governor of RBI. Tata AIG General Insurance Co. United India Insurance Co. 7. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. Bajaj Allianz General Insurance Co. HDFC-Chubb General Insurance Co. Ltd. 6. Lt 4. Star Health and Allied Insurance Co. 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on Insurance business to protection of policyholders’ interests. Foreign companies were allowed ownership of up to 26%. 1872.4.e. They stated that foreign companies are allowed to enter by floating Indian companies. The IRDA was incorporated as a statutory body in April 2000. IFFCO Tokio General Insurance Co. The key objectives of the IRDA include promotion of competition to enhance customer satisfaction through increased consumer choice and lower premiums. Cholamandalam MS General Insurance Co. a) Birth of Insurance Regulatory and Development Authority (IRDA)Following the recommendations of the Malhotra Committee report. But there was ceiling to the amount of Foreign Direct Investment(FDI ) into the Insurance sector i. What is Life Insurance? A life Insurance policy is a specialized contract. In 1993. the Government set up a committee under the chairmanship of RN Malhotra. The objective was to complement the reforms initiated in the financial sector. FDI of 26% is only allowed .It satisfy all the essentials of legal contact i. Ltd. among other things. The committee submitted its report in 1994 wherein. 5. ICICI Lombard general Insurance Co. while ensuring the financial security of the Insurance market. Ltd. Ltd. 8. Ltd. in terms of the Indian Contact Act. The IRDA opened up the market to the private companies in August 2000 with invitation for application for registrations. · PRIVATE SECTOR 1. 5. 6. Royal Sundaram Alliance Insurance Co.- 10 . Export Credit Guarantee Corporation Ltd. preferably a joint venture with Indian partners. Ltd. Agriculture Insurance Company of India Ltd.

A). The owner can access the money in the cash value by withdrawing money. It provides only indemnification. The three basic types of permanent Insurance are whole life. borrowing the cash value. Term Insurance is Life Insurance for a specified period. universal life. and that cancellation must occur within a period defined by law (usually two years). Proximate cause TYPES OF LIFE Insurance Life Insurance may be divided into two basic types – temporary and permanent which in turn sub classed as . variable universal and endowment life Insurance. · Premium to be paid (cost to the insured). The policy cannot be cancelled by the insurer for any reason except fraud in the application. Term is generally considered “pure” Insurance or pure risk cover. B). The policy does not accumulate cash value. Permanent Insurance builds a cash value that reduces the amount at risk to the Insurance company and thus the Insurance expense over time. The three key factors to be considered in term Insurance are: · Face amount (protection or death benefit). or surrendering the policy and receiving the surrender value. whole life. universal.• Offer & acceptance • Consideration • Capacity to contract • Consensus ‘ad idem” • Legality of object & purpose • Intention to create legal relationship In addition to these the life Insurance contract are governed by common law principles. 11 . unless the owner fails to pay the premium when due (the policy expires).in the event of the death of the insured while the policy is in force.TEMPORARY (TERM) Term life Insurance (term assurance in British English) provides for life Insurance coverage for a specified term of years for a specified premium. 10 or 20 years.only a death benefit. where the premium buys protection in the event of death and nothing else. namely – • Principle of utmost Good faith • Principle of insurable interest . · Length of coverage (term).PERMANENT Permanent life Insurance is life Insurance that remains in force until the policy matures (pays out).term. variable. such as 1. and endowment. 5. This means that a policy with a million rupees face value can be relatively inexpensive. Term Insurance premiums are typically low because both the insurer and the policy owner agree that the death of the insured is unlikely during the term of coverage.

and mortality and expense charges will not reduce the cash value shown in the policy. 65). and corporate and agricultural finance. The primary disadvantages of whole life are premium inflexibility. 3. and the internal rate of return in the policy may not be competitive with other savings alternatives. Profitability in Life Insurance improved when compared to 2004. equals the death benefit (face amount) at a certain age.A PROFILE 1) Industrial Credit & Investment Corporation of India (ICICI)ICICI Bank (NYSE:IBN) is India’s second largest bank with an asset base of Rs. Non-Life business remained profitable despite huge hurricane losses in the United States. Of this. ENDOWMENTS Endowments are policies in which the cash value built up inside the policy. WHOLE LIFE COVERAGE Whole life Insurance provides for a level premium.6 percent.g.1. GLOBAL Insurance SCENARIO In 2006. Endowments are considerably more expensive (in terms of annual premiums) Endowment Insurance is paid out whether the insured lives or dies.89 billion as on March 31. moderate inflation. In real terms. The age this commences is known as the endowment age. 15 years) or a specific age (e. low interest rates and favorable stock markets in Europe. 1. fixed and known annual premiums. non-Life premiums increased by 0.. Premiums are much higher than term Insurance in the short-term. total premium volume grew by 2. Japan and in the emerging markets contributed to growth in the Insurance industry.g. This includes mortgages. 2513. after a specific period (e. and a cash value table included in the policy guaranteed by the company. ICICI Bank provides a broad spectrum of financial services to individuals and companies.9 percent. car and personal loans. ICICI 12 . UNIVERSAL LIFE COVERAGE Universal life Insurance (UL) is a relatively new Insurance product intended to provide permanent Insurance coverage with greater flexibility in premium payment and the potential for a higher internal rate of return.4. guaranteed cash values. While Life premiums increased by 3.2 ICICI PRUDENTIAL. but cumulative premiums are roughly equal if policies are kept in force until average life expectancy. worldwide Insurance premiums amounted to USD 3426 bn. The primary advantages of whole life are guaranteed death benefits. credit and debit cards. 2. USD 1974 bn accounted for Life and USD 1452 bn to non-Life Insurance. 2006.5 percent. High economic growth.

It has made joint venture with Prudential Plc of U. As of December 31. and Asia-provides retail financial services products and services to more than 16 million customers. mutual funds. 2007 the company has over 540 offices across the country and over 2. by The Economic Times . ICICI Prudential has been voted as India’s Most Trusted Private Life Insurer. etc. the sales process or servicing. pensions. Thailand. It began its operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Japan. in all that they do be it product development. and Vietnam. 2. Prudential Plc-through its businesses in Europe. Federal Bank.Z 2) Prudential Plc Prudential Plc established in London in 1848. 2005. South Indian Bank.one of India’s foremost financial services companies and prudential plc.The ICICI Prudential Edge -What makes it No. Total capital infusion stands at 15. with ICICI Bank holding a stake of 74% and Prudential plc holding 26% stake.000 Insurance advisors. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank . its nation-wide team comprises nearly 1.It has also tied up with NGOs Micro Finance Institutions and corporate for the distribution of rural policies. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. Hong Kong. distribution. policy holders and unit holders worldwide. ICICI Prudential Life Insurance Company Pvt Ltd India’s Number One private life insurer. Bank of India. 19 banc assurance partners and 300 corporate agent tie-ups and 4 million polices by March 2007. Prudential has brought to the market an integrated range of financial services products that now includes life assurance. Singapore.000 advisors The company has over 20 banc assurance partners.1. investment management.85 billion. 00.200 ATMs. USA. Prudential is the leading European life Insurance company with a vast network of 23 life and mutual fund operations in twelve countries-China. It has diversified into various sector with joint venture & acquisition to become the one-stop solution for all the financial needs of the people .It has forayed into life & General Insurance business . For three years in a row.K to from ICICI Prudential Life Insurance Company Pvt Ltd .Bank services a growing customer base of more than 17 million customers through a multi-channel access network which includes over 620 branches and extension counters. Today. 3).Similarly it tied up with Lombard to form the ICICI Lombard Pvt Ltd. Malaysia. Lord Krishna Bank.a leading international financial services group headquartered in the United Kingdom. As of January 31. 13 . ICICI Prudential has one of the largest distribution networks amongst private life insurers in India. India. UK. Korea. call centers and Internet banking. banking. and general Insurance. Indonesia. 00.AC Nielsen ORG Marg survey of ‘Most Trusted Brands’. the Philippines.1 Pvt Insurer The ICICI Prudential edge comes from its commitment to be No. Taiwan. having tie-ups with ICICI Bank. In Asia. the company had over US$ 400 billion in funds under management.

expenses for a child’s higher education or 14 .What makes ICICI Prudential the market leaders? 1.000 plus strong staff is given the opportunity to learn and grow. Integrity. The success of the company is founded in its unflinching commitment to 5 core values – 1.Savings & Wealth Creation Solutions · Cash Plus is a transparent. but it’s equally important to ensure that its customers can access them easily and quickly.’ 1 . Retirement solutions that are a hedge against inflation and yet promise a fixed income after you retire. 3. every day in a multitude of ways. feature-packed savings plan that offers 3 levels of protection as well as liquidity options. It is this research that helps it to develop Education plans that offer the ideal way. Passion.000 insurance advisors across the length and breadth of the country. For this. Customer First. Ownership 5. 4. and partners with leading banks. 2. With clear underwriting guidelines in place. 4. customer-centric products that meet the needs of customers at every life stage. Robust risk management and underwriting practices form the core business strategy of ICICI Prudential. Its products can be enhanced with up to 4 riders. or Health insurance that arms the insured with the funds when he might need to recover from a dreaded disease. Last but not least. so that they can deliver on the promise of ICICI Prudential to cover its clients. 00. to create a customized solution for each policyholder. 3. Boundary less. to truly guarantee one’s child education. ICICI Prudential 10. and thereby ensures a smooth and hassle-free claims settlement process. ICICI Prudential has an advisor base of 1. Having the right products is the first step. corporate agents to distribute our products and have a pan India Presence. 4) Products Bouquet of ICICI Prudential—Insurance Solutions for every Individual ICICI Prudential Life Insurance offers a range of innovative. at every step in life. · Save’n’Protect is a traditional endowment savings plan that offers life protection along with adequate returns. 2. ICICI Prudential believes this keeps them engaged and enthusiastic. · CashBak is an anticipated endowment policy ideal for meeting milestone expenses like a child’s marriage. ICICI Prudential products have been developed after a clear and thorough understanding of customers’ needs. it ensures equitable costing of risks.

· HomeAssure is a mortgage reducing term assurance plan designed specifically to help customers cover their home loans in a simple and cost-effective manner. SmartKid plans are also available in unit-linked form . ICICI Prudential Protection Solutions/TERM Plan · LifeGuard is a protection plan. · Invest Shield Life New is a unit linked plan that provides premium guarantee on the invested premiums and ensures that the customer receives only the benefits of fund appreciation without any of the risks of depreciation. The policy is designed to provide money at important milestones in the child’s life. · Premier Life Gold is a limited premium paying plan specially structured for long-term wealth creation. 2. It is available for terms of 15 and 20 years · Lifetime Super & Lifetime Plus are unit-linked plans that offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Child Plans · Education insurance under the SmartKid brand provides guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy.Preserver. Balancer and Maximiser. · Life Link Super is a single premium unit linked insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market. · Invest Shield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options. Retirement Solutions/ Pension Plan · Forever Life is a traditional retirement product that offers guaranteed returns for the first 4 years and then declares bonuses annually. Protector. · Lifetime Super Pension is a regular premium unit linked pension plan that helps one accumulate over the long term and offers an annuity option (guaranteed income for life) at the time of retirement · Life Link Super Pension is a single premium unit linked pension plan. which offers life cover at low cost.both single premium and regular premium 4. 3. It is available in 3 options .purchase of an asset. level term assurance with return of premium & single premium. Each offer 4 fund options .level term assurance. 15 .

· Critical Illness Benefit: protects the insured against financial loss in the event of 9 specified critical illnesses. 5. It is available on SmartKid and Cash Plus. it also provide for the post hospitalization care. the beneficiary receives an additional amount equal to the rider sum assured under the policy. · Accident & disability benefit: If death occurs as the result of an accident during the term of the policy. · Income Benefit: This rider pays the 10% of the sum assured to the nominee every year. · Hospital care-It’s the most innovative product launched by ICICI Prudential and its happens to the one of the kind product in the industry . the beneficiary will be entitled to twice the sum assured as additional benefit. irrespective of the actual medical expenses. Lifetime Super Pension and Cash Plus.The term of the policy is of 20 years and provides a comprehensive health care for the insured. · Waiver of Premium: In case of total and permanent disability due to an accident. It offers the benefit of 5 payout options. This rider is available with Lifetime Super. in the event of the death of the life assured. Benefits are payable to the insured for medical expenses prior to death. If the death occurs while traveling in an authorized mass transport vehicle. and offers a coordinated care approach to managing the condition. Health Solutions · Health Assure and Health Assure Plus: Health Assure is a regular premium plan which provides long term cover against 6 critical illnesses by providing policyholder with financial assistance. depending on the specific needs of the customer. It makes payments on diagnosis on any of 6 diabetes related critical illnesses.Flexible Rider Options ICICI Prudential Life offers flexible riders. 6). Diabetes Care Plus also offers life cover. 5) Various Funds of ICICI Prudential 16 . the future premiums continue to be paid by the company till the time of maturity. It provide cashless hospitalization across 3000 authorized hospitals across India.· Immediate Annuity is a single premium annuity product that guarantees income for life at the time of retirement. till maturity. which can be added to the basic policy at a marginal cost. Health Assure Plus offers the added advantage of an equivalent life insurance cover. · Diabetes Care: Diabetes Care is the first ever critical illness product especially for individuals with Type 2 diabetes.

Flexi Balanced 3. Leveraging technology to service customers quickly. investing in 60 % in large caps. Sponsors 17 . Ø Maximiser in all equity funds. Flexi Growth 2. Protector Ø The Flexi growth is all equity funds.The funds are differentiated depending on the varying percentage of equity exposure. Maximiser 4.The premium collected are allocated to any of the six Funds that are available with ICICI prudential. mid caps and small cap companies.etc Vision “To make the company the dominant Life and Pensions player built on trust by world-class people and service. Ø Flexi balanced is 50 % equity & 50 % debt fund. • Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to the policy holders. Building transparency in all dealings. Preserver 6. investing primarily in top 50 companies in BSE. Ø Preserver & Protector are all debt fund that invest into government securities. The various funds are – 1. depending on the risk appetite of the customer . treasury bill .” This can be achieved by: • • Understanding the needs of the customers and offering them superior products and services. efficiently and conveniently. Balancer 5. It’s the newest fund in the ICICI kitty and it was launched in March 2007. where the 50% equity exposure is divided into large caps. 30% mid caps & 10 % in small cap companies.. • • Providing and enabling environment to foster growth and learning for the employees. Ø Balancer is again 50 % equity & 50 % debt fund.

Shikha Sharma Mr. transaction processing. Lalita D.D). India's first internet bank. Mark Tucker. it became the first Indian company to be listed on the NYSE (symbol: IC and IC.65 billion.851 projects.ICICI Infotech. ICICI had disbursed a total of Rs 319. ICICI has financed all major sectors of the economy. ICICI has now developed a whole range of activities to become a Universal Bank.ICICI Securities. covering 6. Kamath. the Government of India and the Indian Industry.ICICI Bank. Gupte. 2000.ICICI PFS.ICICI Ltd was established in 1955 by the World Bank. On September 22. Smt.ICICI Capital. Managing Director: Smt. leading private sector mutual fund player in India * Venture Capital .848 companies and 16. 1999. 18 . In the fiscal year 2000-2001. * Information Technology . Chairman: .ICICI Venture.V.Shri K. Since inception. leading private equity investor with focus on IT and HealthCare * Retail Services . to promote industrial development of India by providing project and corporate finance to Indian industry. This has been followed by the listing of ICICI Bank on NYSE (symbol: IBN) on March 28. software development * Investment Banking .Prudential ICICI AMC. Some of ICICI's spectrums of activities include: * Commercial Banking . Marketing and Distribution of Retail Asset Products * Distribution . ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. Management Board of Directors The ICICI Prudential Life Insurance Company Limited Board comprises reputed people from the finance industry both from India and abroad. Distribution and Servicing of Retail Liability Products ICICI is listed on the Indian Stock Exchanges and on the New York Stock Exchange (NYSE). one of the key players in the Indian Capital Markets * Mutual Fund .

Kevin Wright. Kalpana Morparia. Madhavi Soman. Modi. Sandeep Batra. V. Derek Stott.Strategic Initiatives:-Ms.Sales & Distribution Mr. Danny Bardin.Subhedar. Shubhro J.Marketing & Service:-Mr. Shri M.Mr. Chief . Mark Tucker). Mrs.P.P. Chief Financial Officer & Company Secretary:-Mr.Human Resources:-Mr. (Alternate Director to Mr. 19 . Rajagopalan. Shri S. (Alternate Director to Mr. Chief . Appointed Actuary:-Mr. Shikha Sharma Executive Vice President: . John Caouette. Saugata Gupta. Mr. Mitra. Chief . Mr. Management Team Managing Director:-Ms. Danny Bardin).

I have compiled below some ten reasons (in the order of their popularity) why they did so. I used to quiz them the reasons why people in general bought a life Insurance policy for themselves.CHAPTER-2 2. Reason No. Below I have illustrated the top 10 reasons. on the investor wealth. This is based on random sampling survey and gives an indication where people go wrong when they buy their life Insurance cover.01 .1 Ten Reasons Why People Buy Life Insurance? During my interaction with managers. executives & consultants of various life Insurance companies during my primary survey. with their implication.I want to save tax It’s true that Section 80 of Income Tax Act provides deduction of the amount paid 20 .

Reason No. at least in their initial years. Reason No. Reason No.06 . Reason No. Reason No. Generally the Insurance product sold in such situation is Term plan where the policy papers are kept with the bank.05 . In this the equity linked savings scheme (ELSS) mutual funds provide a better option.My agent asked (forced) me to buy this policy This is one of the commonest reasons I got when asked why he/she bought Insurance policy. Reason No.07. Otherwise. the risk to be covered is not of the child but of the parents and that to remember in mind. Investing here gives the option to have immediate annuities or regular pension after the vesting age. The Survival of the Insurance advisor is the sole driver here and not the need of the buyer. 21 . And one should check up with all available riders that can be taken with the child plan.as Insurance premium (with some exceptions) from the assessor’s taxable income subject to limits. Insurance advisors are drilled to think that “Insurance is always sold and never bought” and this results in an advisor selling Insurance with all wrong reasons. In this situation.My Bank asked to purchase Insurance policy This means it’s only due to the pressure exerted by bank (to safeguard its loan) that one will buy Insurance.I want to plan for my retirement Insurance companies have devised these products keeping in view the tax exemption available under the Income Tax Act.04 .I want to save/invest Savings is generally understood as the amount remaining with a person after he/she meets all his/her expenses and other cash needs. because these riders help to make the policy achieve its objective.02 .03 . If one has to build wealth. So they try creating a need for buying an Insurance policy in potential client. then it’s the costliest way to do so. savings need to be put into an investment with specific time horizon and goal. Insurance is preferred choice in this regard. the purpose is ok but it’ will be much better if the policies are brought with knowing the feature & the charges that are in built with the product. It’s no secret that Insurance advisors. However. If the sole purpose of buying Insurance is to save on tax. he/she will not get the loan.I want to provide security for my children for their education This is one of the legitimate reasons for buying Insurance.My Uncle/Aunt recommended to buy Insurance If somebody’s uncle/aunt is retired and/or has taken up selling Insurance as a post retirement job.

But with his incomplete knowledge it’s not wise to be guided for buying Insurance plan.My friends told me to buy Insurance A young an enthusiastic young person who has some awareness about Insurance gathered from brochure and magazines.10. etc. 2. Reason No. given the fact that including people who graduate from the college have not much idea about the concept of Insurance. One should always try consulate certified Insurance advisors before buying any Insurance plan. Reason No. which again does not say much how Insurance works.My parents told me to buy Insurance This is not surprising. The advertisements one see in TV/Newspaper. the customer has been portrayed as the king and to his delight.08 . The various strategies the companies should follow to increase their market share areI) Shift in the product portfolio Earlier the entire industry was revolving around traditional 22 . Here again insurance is bought for reasons other than the one it’s meant for. Actually. the products are redesigned and customized suiting his need taking into account his paying capacity and multiple benefits.2 MARKETING STRATEGIES ADOPTED BY PLAYERS IN THE MARKET Gone were the days when the customers were forced to take up the kind of products whatever coming from LIC's and ICICI Prudential stables? But now. this is the right reason for which Insurance is to be bought. It’s always advisable to take an informed decision rather than to wilt under any pressure.will be asked to target their ‘natural market’ meaning their own household members. The very purpose for which Insurance product came into existence was to provide economic security to the dependents of the breadwinner in his/her absence.09 . Reason No.I want to cover my life risk I have come across very few people giving me this reason for buying a life Insurance policy. to sell the minimum number of policies to keep their license alive. relatives.

As the awareness level about these unique products is much lower. as they are profitable for the companies. which caters to the high net worth (HNI) clients. income levels. ICICI Prudential – Hospital Care plan that allow cashless hospitalization.Priority circle is a one stop solution for all the investment needs of a client. studying life expectancy and health statistics across age groups. which have added value to the risk cover at minimal cost.g. Riders are nothing but add-ons coming along with the base policies for a slightly additional premium. Private Insurance companies have launched unit-linked schemes focusing on equity. 23 . Priority circle provides total wealth management solution & portfolio management services for the clients . This is possible through the introduction of riders. often tailor made in order to provide a bundle of benefits to the customers. queries regarding ULIP schemes at specified number and the query will answered instantly II) Value for Money (VFM) The sea change since the sector opened up has been on the way the basic products have been packaged innovatively. Bajaj Allianz super agent scheme where the customer can just sent message through mobile phone any. Now the companies are coming out with Health products.investment and savings oriented plans. The companies are coming out with many more health products to cater to various emerging categories of health Insurance. Riders have become the major instruments for the organizations to lure the customers away from the competitors. These schemes are expected to yield better returns when compared to normal Insurance schemes. the sales strategy companies resort is to educate the customers about the salient features of the products. III) Tapping the Niche Markets Private insurers are concentrating much on designing attractive products by investing heavily on research. post-hospitalization benefit and critical illness cover. E. -.g.g. Unit linked products are also gaining momentum in this country. E. surgical benefit. debt and gilt edged stocks. professionals and regions on their own. The innovations for the niche markets are abounded and to name a few— E.ICICI Prudential initiative to come up with the priority circle division. The products are designed with a technical team of actuaries and a product development team working closely together to target the niche market.

· E.Kotak Life Insurance is looking at roping in co-operative banks. -. VI). · E.25000 whichever is lesser for undertaking developmental work in the villages. the insurers are attempting to change the negative attitude of the people towards Insurance products.g. --Towards serving the society in a better way. VII). all the players have turned their eyes towards the rural market.000 crore as fresh capital to ramp up there Insurance business. E. V).LIC has made a total investment of FRS 90. -.000 crore. Infusion of Capital Players in the Insurance sector are very confident that their pace of growth will accelerate tremendously and the infusion of capital will enable them to continue with their expansion plans and achieve sustained growth. -. Last year. This venture has been a great success in bringing business and developing a wide distribution network. LIC has adopted a novel way through its Bima Grams policy. By creating goodwill about the organizations. 24 . Accordingly.g. -.g. IRDA stipulates the rural obligations to be met by the players over the years. Cause related Marketing (CRM) Cause related Marketing has become the order of the day in Insurance industry. primary agricultural co-operative societies (PACS).Similarly ICICI on last week made huge capital infusion of Rs 100 million to expand their Insurance business. E. NGOs and self-help groups to sell its products in the rural areas.ICICI Prudential has dedicated team of professions for the rural marketing it’s called rural marketing & business partner model. Tapping unconventional distribution channels Nevertheless all the players depend heavily on their agents force to reach out they are trying out other distribution channels also like banks and corporate agencies in addition to the channels mentioned above. E. For instance.g. the LIC had invested Rs 80. LIC pays 25% of the premium collected from the villagers or Rs.g. Towards ensuring equitable distribution of Insurance policies in every nook and corner of the country.IV) Thrust to the rural markets Thanks to the norms stipulated by the regulator IRDA.

taking the total to 191 in the country. E. branding.VIII) Expanding the Distribution Network ICICI Prudential Life has announced its expansion plans on February 2006.g. -. Market development. direct and alliance marketing and corporate Communications. Marketing at ICICI Prudential: Marketing at ICICI Prudential covers an array of activities – advertising. which include the opening of more than 100 full service branches across the country by August 2006. channel support. Marketing Structure at ICICI Prudential 25 .Network expansion and entry into the pension segment are some of the strategies chalked out by private insurer Aviva Life Insurance. It plans to add 79 branches in 2007. The strengthening of its distribution network will enable the company to cater to a wider group of customers and provide them with efficient customer service and enhanced support.

The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it 26 . 1) History of Unit Linked Insurance Plans (ULIP) ULIP came into play in the 1960s and became very popular in Western Europe and America.3 Unit Linked Insurance Plans (ULIP) ULIP is a life insurance solution that provides for protection & flexibility in an investment. The investment is denoted as units & is represented by the value that it has attained & called as the Net Asset Value (NAV).Tied Agency Bancassurance and Alliances Corporate Agents and Direct Marketing Channels Sales Manager Sales Manager Area Sales Manager Agency Manager Team Leader Financial Service Consultant Customer Service Representatives Trainees Unit Managers (UM) Agents / Advisors 2.

ULIP as product combines the features of both the products (investment & insurance) into a single product. In today’s times. coupon bearing funds & stocks.offers. ULIP provides solutions for insurance planning. The premium collected is invested in market linked instrument like stocks. corporate bonds & government securities. ULIP attempt to fulfill investment needs of an investor while giving him protection in form an insurance cover. financial needs. ULIP work in a premise that there is a class of investor who regularly invest their savings in products like fixed deposit. debt funds. 2) Features of ULIP ULIP is a contractual saving cum insurance plan that offers the following featuresØ High returns Ø Life insurance cover Ø Tax rebate Ø Flexibility Ø Transparency Illustrated features in Unit Linked Insurance Plan (ULIP) product n Flexibility in investment funds n Flexibility in premium payment term n Flexibility in top-ups n Flexibility in partial withdrawals n Flexibility in total surrender without penalty 27 . As times progressed the plans were also successfully mapped along with life insurance need to retirement planning. financial planning for children’s future and retirement planning. There is another class of investor who take insurance plan to provide pure cover . The ULIP are like mutual fund with a life cover thrown in.Typically for both these categories of investor who are looking to have a portfolio of investment as well as life insurance cover ULIP is the ideal product .

A traditional ‘with profits. the insurer calculates how much has to be paid to settle death and maturity claims. Every year. administration charges and fund management charges. are distinct from the more familiar ‘with profits’ policies sold for decades by the Life Insurance Corporation. The rest of the premium is used to invest in a fund that invests money in stocks or bonds. the insured can direct the company to invest in the fund of his choice. but they are structured differently In a ULIP too.’ on the other hand. balanced fund and a fund which invests in bonds. The value of the unit is determined by the total value of all the investments made by the fund divided by the number of units. it allows the investor to choose the assets into which he wants his funds invested. An investor in a ULIP knows how much he is 28 . the insurance company credits the premium to a common pool called the ‘life fund. Which is better. In ‘with profits’ policies. the insurer deducts charges towards life insurance (mortality charges). The policyholder’s share in the fund is represented by the number of units. unit-linked or ‘with profits’? 1. Insurers usually offer three choices — an equity (growth) fund. is a black box and a policyholder has little knowledge of what is happening. The surplus in the life fund left after meeting these liabilities is credited Unit Linked Insurance Plan (ULIP).n Flexibility in Sum Assured n Transparency in charges n Switching and Fund Allocation Facility 3) How ULIP if different from with traditional ‘with profits’ insurance polices What is ‘with profit’ insurance polices? ‘With profits’ policies are called so because investment gains (profits) are distributed to policyholders in the form of a bonus announced every year. Transparency The are two strong arguments in favour of unit-linked plans are that — the investor knows exactly what is happening to his money and two. If the insurance company offers a range of funds. Unit-linked insurance plans Unit Linked Insurance Plan (ULIP) also serve the same function of providing insurance protection against death and provision of long-term savings.’ after setting aside funds for the risk premium on life insurance and management expenses.

2. and/or other securities. realizing capital gains or loss. but he also bears the investment risk. So if you are willing to bear the investment risks in order to generate a higher return on your retirement funds. 29 .4 Mutual funds 1) What are Mutual funds? A mutual fund is a form of collective investment that pools money from many investors and invests the money in stocks. In traditional ‘with profits’ policies.paying towards mortality. known as the net asset value (NAV). Liquidity Insurers love Unit Linked Insurance Plan (ULIP) for several Most important of all. The investment proceeds are then passed along to the individual investors. But here the insurance company evens out returns to ensure that policyholders do not lose money in a bad year. Unit Linked Insurance Plan (ULIP) are for you. insurers can sell these policies with less capital of their own than what would be required if they sold traditional policies. a policyholder can ask the insurance company to liquidate units in his account to meet the mortality charges if he is unable to pay any premium installment. the insurance company bears the investment risk to the extent of the assured amount. management and administration charges. Moreover the policy holder can surrender his policy any time after 3 year mandatory lock in period and get the entire fund value minuses surrender charges. The investor gets exactly the same returns that the fund earns. The value of a share of the mutual fund. This eats into his savings. He also knows where the insurance company has invested the money. short-term money market instruments. 3. In a mutual fund. the fund manager trades the fund’s underlying securities. He can surrender his policy any time after 3 year mandatory lock in period and get the entire fund value minuses surrender charges. In that sense they are safer. is calculated daily based on the total value of the fund divided by the number of shares purchased by investors. Traditional ‘with profits’ policies too invest in the market and generate the same returns prevailing in the market. but ensures that the policy will continue to cover his life. In Unit Linked Insurance Plan (ULIP). 2. the policyholder bears most of the investment risk. and collects the dividend or interest income. bonds. The transparency makes the ULIP product more competitive. Flexibility Unit Linked Insurance Plan (ULIP) offer flexibility:For instance.

The private sector players were allowed to set up mutual funds in 1993. The biggest advantage of mutual funds is diversification. No tailor made portfolio 2. Unlike most other types of business entities. such as technology or utilities. Portfolio diversification 2. The SBI mutual fund was the1st bank sponsored mutual fund to be set up. No control over cost 4) History of mutual fund in India Unit trust of India (UTI) was the first company to launch Mutual fund in India. Taxable distributions can either be ordinary income or capital gains. 1963. and tax rules. Convenience & flexibility 3) Disadvantage of mutual funds 1. Stock funds. Liquidity 6.The UTI was governed by the act called UTI act. financial institution & insurance companies in the public sector were permitted to set up mutual funds. and bonds. Reduction in risk 4. for instance. When one investment is down another might be up. 30 . stock. Bond funds can vary according to risk (high yield or junk bonds.Mutual funds are subject to a special set of regulatory. Professional management 3. they are not taxed on their income as long as they distribute substantially all of it to their shareholders. Diversification of investment holdings reduces the risk tremendously 2) Advantages of mutual fund 1. 5) Where does mutual fund invest? Mutual funds can invest in many different kinds of securities. accounting.In 1987 banks. Diversification means spreading out money across many different types of investments.UTI had the Monopoly & dominance during the period 1963-1988. investment-grade corporate bonds). Also. The most common are cash. These are known as sector funds. Reduction in transaction cost 5. Mutual fund distributions of tax-free municipal bond income are also tax-free to the shareholder. can invest primarily in the shares of a particular industry. depending on how the fund earned it. Problem of managing a large portfolio of funds 3. but there are hundreds of sub-categories. the type of income they earn is often unchanged as it passes through to the shareholders. The 1st mutual fund product was UTI Master Share in 1986.

At least 2/3 of the trustee should be independent and at least ½ of the board members needs to independent.e. who is the guardian of the funds and assets of the investors. is a fund’s value of its holdings. or NAV. Sponsor creates the AMC and the trustee company & appoints the boards both these companies with SEBI approval. Both stock and bond funds can invest in primarily US securities (domestic funds). 31 . But AMFI is not yet registered with SEBI. 7) Structure of mutual funds Mutual funds in India have 3. 8) Legal & regulatory framework Mutual funds are regulated by SEBI (mutual funds) regulations-.tier structure of sponsor –trustee-Asset management Company . there are other expenses like Legal Fees. i. both US and foreign securities (global funds). The sponsor contributes the AMC capital. The NAV is determined daily. and other fees that must be borne by the fund.type of issuers (government agencies.Sponsor is the promoter of the fund. the fund counts one security sold and another one bought as one “turnover”. Turnover Turnover is a measure of the fund’s securities transactions. The Management Expense Ratios (MERs) . Custodian Fees. corporations. 6) Term related to mutual fund The net asset value. Though usually the major expense is the Management Fee paid to the fund manager. The AMC cannot engage in any other activity other than portfolio advisory & management. usually in a year. The investor funds & investment are held by custodian. Management Expenses Ratio’s (MER’s) Mutual funds the charges are generally standardized across industry. or municipalities). after the close of trading on some specified financial exchange. The custodian & the sponsor can be the same entity. or maturity of the bonds (short or long term). This value is usually calculated as the value of all transactions (buying. usually expressed as a per-share amount. or primarily foreign securities (international funds)..this essentially is a calculation of all the expenses of a fund divided by the average NAV for the year. and usually expressed as a percentage of net asset value. MERs should be calculated based on expenses normalized for 365 days period. in which mutual invest .SEBI is the Regulator of all funds. except off shore funds. Audit Fees. RBI regulates money & government securities market.AMFI is an industry association of mutual funds. selling) divided by 2 divided by the fund’s total holdings.

All males and females with earned income (Category I) and females with unearned income and paying tax (Category II) are eligible for this plan.9) Rights & obligation for investors Non resident Indian (NRI) and overseas corporate bodies (OCB’s) are eligible to invest in mutual funds . Short term capital gain (12 months lock in) are taxable . 11) Pricing of mutual funds Buy price of mutual funds is calculated from given NAV & Load % The amount of entry load =NAV *(entry load/100) Buy price =NAV + load Sale price of mutual fund is calculated from NAV & load %. Term plan Anmol Jeevan ICICI Prudential Life Guard Suitability This is a pure risk policy suitable for people who wish to provide huge sums for their family at an economical premium. The amount of exit load =NAV * (exit load/100) Sale price =NAV – load *entry & exit load cannot be higher than 7% as SEBI regulations.Foreign citizen and person of Indian origin (PIO) cannot invest in mutual funds of India. Suitability · Maximum thrust is on family protection. Investor has the right to sue the AMC.If the investor holding period is more than 12 months the gains or losses are called long term capital gains. 10) Tax aspects Mutual funds pay no taxes on there incomes they earn. They are fully exempted from tax. charges & commission on mutual funds are decided by the Asset Management Company and are not subject to any regulation. The investor bears the risk of the performance of the market. trustee or sponsor. Long term capital gains are indexed for inflation (indexing refer to updating the purchase price. based on the cost of inflation index). Salient Features 32 . This policy is suitable for people who wish to provide large sums for the benefit of their family at an economical cost. Fees. Foreign Institutional Investor (FII) can invest in mutual funds trough the non –resident rupee account.

Salient Features · It’s a pure risk or term insurance plan. ICICI Prudential Lifeguard Level Term Assurance with Return of Premium 3. On Survival · Nothing is payable Benefit illustration for a person aged 30 years. Half-yearly. · The policy will not acquire any paid-up value. If the premium is not paid before the expiry of the days of grace. · No loan will be granted under this plan. the Policy lapses. Sum Assured (in Rs) Term (in years) Yearly Premium Payable (Rs) Single Premium (Rs) 33 . the policy will still be valid and the Sum Assured paid after deduction of the said premium as unpaid premiums falling due before the next policy anniversary of the Policy. where in premiums paid are returned without any interest. ICICI Prudential Lifeguard Single Premium · Under each of the above variants. · On survival to maturity nothing is payable except under ICICI Prudential Lifeguard Level Term Assurance with Return of Premium. Quarterly or Single Premium · If death occurs within the grace period and before the payment of the premium then due. · No Surrender Value will be available under this plan. · One can avail Accident and Disability rider under all the above variants except ICICI Prudential Lifeguard Single Premium Benefits On Death · Full sum assured + loyalty additions. the sum assured is payable on the death of the policyholder during the term of the policy. · Policyholder has an option to pay premium Yearly. ICICI Prudential Lifeguard Level Term Assurance 2. · On survival to maturity nothing is payable.· The policy being a pure term plan. full sum assured is payable on death. · The policy is offered in three variants: 1.

000 10 1.00.000 20 2.00.000 5.813 32.00.00. Parents or legal guardians can propose the policy for children between ages 1 and 12 years.00.000 15 1.528 17.Amount payable on death during Term of the Policy (in Rs) 5.000 10.00.285 12.000 Child plan Jeevan Kishore ICICI Prudential Smart Kid Suitability · This is an improved version of the New Children’s Deferred Assurance plan.200 5.328 22.000 10 2.00.000 15 2.140 8.550 10.550 10.000 20 1.000 5.400 5.00. Salient Features · Children between ages 1 and 12 years are eligible. 34 .00.000 10.00. with risk commencing at an early age.100 10.037 14.00. Suitability · It is a plan that provides guaranteed educational benefits to the child along with life insurance cover and hence is suitable for parents (between 20-60 years) with children in the age group of 0-12 years.425 5.000 10.00.

Accident Disability benefit rider by paying additional premium Benefits On death · On death of child during waiting period all premiums are refunded · In case. irrespective of death of the life assured.e.e.e. Death benefits are in additions to the benefits that child is likely to get in the normal course of the policy i.Age of the child on the date of proposal.· Parents can propose the child’s life · The Plan is basically endowment type.e. Death benefits are in additions to the benefits that child is likely to get in the normal course of the policy i. the child Benefits On Death during the term · Full sum assured is paid and future premiums are waived. Riders · Income Benefit Rider Income Benefit Rider pays 10% of sum assured annually to the child on each 35 . higher secondary. by payment of an additional premium. the policy has to be continued by regular payment of premiums. the proposer i. irrespective of death of the life assured. the parent happens to die during the deferment period.Sum assured is payable either on survival to the term or on death happening within the term Salient Features · It is a money back plan where in sum assured is paid at regular intervals.e.. premium need not be paid on proposer’s death till date of vesting) · Once the risk is commenced. child will be eligible for amounts at important milestones of education.i. · On death of the life assured with in the term. The policy can be so designed that it provides money at important milestones of the child’s education like secondary education.e. and graduation and post graduation. Sum assured is payable on survival to term or on earlier death of life assured i. · The term of the policy is determined by Age of the child on maturity .. · Policyholder has the option to avail additional benefits such as Income benefit rider. full sum assured is paid immediately and all future premiums are waived. the proposer can secure a waiver of premiums i. (However. child will be eligible for amounts at important milestones of education.

8.5.1. till maturity of the Rider.000. it will also provide a regular income for the next 10 years or till maturity of the policy.30. · Accident and Disability Benefit Rider This provides cover against an unfortunate death due to an accident. For child aged below 10 years: Rs.policy anniversary following an unfortunate demise. Maximum Sum assured Rs. 00. 00. Maximum limit under Accident and Disability Benefit Rider: Rs. 36 . Pension plan New Jeevan Dhara-1 ICICI Prudential Forever Life (Deferred Pension) Suitability · Professionals who do not have any pension scheme can provide a pension for themselves for post retirement expenses.000.000 2.800p. If the individual gets permanently disabled due to an accident.e.. Suitability · The plan is suitable for people who are not in any pension schemes and wish to provide regular income for life after a stipulated date. 00.000 · Min premium must be Rs.10. For child aged 11 years: Rs.000. 00. 000 · Maximum Sum Assured: 1. Maximum age of the Parent: 60 years.10. It also offers life cover during the deferment (i.30. Minimum Sum Assured: Rs. Minimum premium: Rs. premium paying) phase. Other Conditions · Minimum Term: 15 years · Maximum Term: 35 years · Minimum Sum Assured: Rs. All future premiums will be waived.000 per year.a Other Conditions Minimum age of the Parent: 20 years. The amount you receive depends on the premium you pay till the stipulated date and the option you choose. 00.

· Premium paying period is between 2 and 35 years. at the time of taking the basic policy. at a marginally incremental cost: 1.Salient Features · It is a pure pension plan wherein one pays single premium or regular premium over the deferment period to secure a pension starting at a future date. quarter or monthly (including SSS). · Policy holder has the option to pay a single premium or spread the premium payment over the deferment period. On survival 37 . By the virtue of this rider. One or more of the following riders can be opted along with the policy. · Policyholder can add a term assurance rider by paying additional premium. which can be exercised at any time within 6 months of the vesting date. half yearly. Critical Illness Benefit 3. sum assured selected under term assurance rider would be paid. in the event of death of the policyholder during the deferment period. a guaranteed surrender value is payable and the insurance protection provided under this policy will also cease.a. Salient Features · The plan provides for 4 annuity options. Level Term (Double Life) Insurance Benefit Benefits On death In the unfortunate case of death then premiums(excluding extra premium if any) paid up to the date of death accumulated at the rate of 5% p. Accident and Disability Benefit 2. · If the policy holder decides to terminate his policy. after 3 years premiums are paid. · Policyholder has the option to pay a single premium or pay regular premium annually. · Bonus is payable under the policy. · Annuity rates on the vesting date will be equal to that available under the New Jeevan Akshaya plan on the date of vesting. Major Surgical Assistance Benefit 4. compounded or at such rate decided by the LIC from time to time will be paid to the nominee.

On survival · On vesting date insured has the option of taking 25% of the aggregate of the sum assured. · Maximum age at entry: 65 years. · Maximum vesting age: 79 years. The amount of annuity payable is determined on the basis of the sum assured plus guaranteed additions plus vested bonuses (if any) as on the date of death. · Pension guaranteed fixed term and for life thereafter. If the spouse is not alive a lump sum amount is paid to the nominees.Six months before the date of vesting. detailed below: · Pension for life. guaranteed additions and vested bonuses as an immediate lump sum. Other Conditions For the basic plan: · Minimum age at entry: 18 years. the life assured can select one of the pension options. And utilize the remaining 75% to provide an annuity.a for regular premium policies and Rs.10000 for single premium policies Other Conditions Regular Premium Single Premium Policy Minimum age to apply 18 32 38 . · Minimum vesting age: 50 years. · Minimum Premium: Rs. · Pension for life with return of purchase price on death Benefits On Death · On death during the deferment phase. commencing on death of life assured. Annuity payment depends on the type of option chosen.2500 p. · Pension guaranteed for life to the life assured and 50% of pension is paid to the spouse for life. a regular income stream is automatically provided to the insured’s spouse.

5% 15 1% 3% 39 . in 15 years Charges form an integral part of any ULIP plans. 90% 5% 5% 5% 5% 20% Reliance Life Market Return Plan 73% 66% 140% 77. insurance cover & tax benefit to the investor. Charges comparison Basic Premium charge of some of the cos.000/Minimum term is 5 Years 3 years to max 15 years Vesting age 45 to 65 years 45 to 65 years ANALYSIS We can see from the above table mutual fund have outperformed virtually all ULIP plans . The table below gives an illustrative example of the total charges that are charged in an insurance plan over a 15 year horizon. and they company or product specific. So mutual fund is pure investment option whereas ULIP provide a good amount of capital appreciation.000/Rs. 50.Maximum age to apply 60 62 Minimum sum assured Rs.and have given a much better return But the ULIP schemes provide an insurance cover which take care of future contingences which not there in mutual fund. 50.

5 Calculation of productivity Employee Strength: 40 .5% 2 40% 24% 65% 18% 1 TATA AIG Invest Assure II Allianz Bajaj Unit Gain Plus Birla Sun Flexi plan ICICI Lifetime Super(maxi miser) Year Exhibit 9.5% 7. It was found that bajaj allianz unit gain plans have the lowest charge structure and the birla sun life flexi plan have very high charges of nearly 140 % on the premium paid.5% 4% 3 20% 3% 7. in 15 year If we look at the comparative chart of the charges the investor has pay over a period of 15 years when buying an insurance plan charges varies greatly from companies to companies.Basic Premium charge of some of the cos.5% 4% 5 1% 3% 5% 4% 4 1% 3% 7. It’s always advisable to go through the detailed charge structure of all the plans available across industry before buying any insurance plan 2.

HDFC Standard No.53 . followed by SBI Life with 30 employees. ING Vysya 9.Name of Insurance Company 1. Kotak Mahindra 10. ICICI Prudential 41 Business generated through banc assurance and alliance in last financial year 22. Met Life 8. Max New York 6.SBI Life 11.Tata AIG 5. Birla Sun Life 7. of Employees (on rolls) 28 70 25 20 5 6 8 4 5 30 7 Bajaj Allianz Aviva Tata AIG Max New York Birla Sun Life 28 7 70 30 Met Life ING Vysya 5 Kotak Mhindra 4 8 6 5 25 20 SBI Life HDFC Standard ICICI Prudential Source: respective companies Bajaj Allianz has the highest number of employees (on rolls) engaged in bancassurance And alliance with 70 employees. Aviva 4. ICICI Prudential 2. Business in the last financial year: Name of Insurance Company 1. Bajaj Allianz 3. ICICI Prudential comes a close third with 28 employees.

22. Productivity: Productivity = output / input = Business earned in the year 2007-2008 No. Bajaj Allianz 3.06 8 Bajaj Allianz Aviva Tata AIG 5 Max New York Birla Sun Life 3 1 2.2.5 2. Max New York 6.5 2.06 0. Tata AIG 5.8 Crores. Birla Sun Life 7.80 .5 ICICI Prudential ING Vysya Kotak Mhindra SBI Life HDFC Standard 22. SBI Life 10.53 Crores in the financial year.HDFC Standard Source: respective companies 8 5 3 1 2.5 8. it was followed by SBI Life with Rs.Of employees (on rolls) Company ICICI Prudential Output/ Input 22.5 0. ING Vysya 8. Aviva 4.53 Source: respective companies ICICI Prudential generated highest business with Rs.8. Kotak Mahindra 9.53/28 42 Productivity 0.5 0.5 8.5 0. 2007-2008.5 Crores and Bajaj Allianz closely Behind with Rs.

35 Productivity of Life Insurance Companies 0.15 0.1 0 ru de Ba nt i ja j A al llia nz Av i Ta va M ax ta A I N ew G Bi rla Yor Su k n Li IN fe G Ko ta Vys k M ya ah in dr SB a I HD Life FC Li fe Business Earned Series1 IC IC IP Company 43 .8 0.2 0.3 0.4 0.5/30 2.5/6 0.2 0.Bajaj Allianz Aviva Tata AIG Max New York Birla Sun Life ING Vysya Kotak Mahindra SBI Life HDFC Life 8/70 5/25 3/20 1/5 2.11 0.5/7 0.1 0.5 0.9 0.2 0.28 0.5/5 8.6 0.41 0.7 0.015 0.06/4 0.

1 MEANING OF METHODOLOGY 44 .CHAPTER-3 3.

The second group which are used for and the unknowns. making decisions and reaching conclusions and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis . In the first group we include those methods which are concerned with the collection of data . The third group consists of those methods which to evaluate the accuracy of the results obtained. organizing . RESEARCH METHODS Research methods refers to the methods the researchers use in performing research operations . formulating hypothesis or suggested solutions . consists of those statistical techniques establishing relationships between the data ii.” research as a “ Systematized effort to Research is an academic activity used in a technical sense . Infact research is an art of Scientific investigation . Redman and Mory define gain new knowledge . It can also be defined as a Scientific and Systematic search for pertinent information on a specific topic . iii. and evaluating data . Research methods can be put into the following three groups : i. are used 45 . and as such the term should be According to Clifford Woody “ Research comprises defining and redefining problems . These methods can be used where the data already available are not sufficient to arrive at the required solution. collecting .Before knowing the meaning of Methodology we must know the meaning of research methods RESEARCH Research in common parlance refers to search for knowledge .

3 DATA COLLECTION TECHNIQUE 46 . It is necessary for the researcher to know not only the research methods / techniques but also the methodology . From what has been stated above . The scope of research methodology is wider than that of research methods .3.2 RESEARCH METHODOLGY Research methodology is a way to systematically solve the research problem . Researcher not only need to know how to develop certain indices or tests . the median or the standard deviation or chi – square . we can say that the Research methodology has many dimensions and research research mathods do constitute a part of research methodology . Thus . how to calculate the mean . 3. It may be understood as a science of studying his / her research problem along with the logic behind them . are relevant and which are not . when we talk of research methodology we not only talk of the research methods but also consider the logic behind the methods we use in the context of our research study and explain why we are not using others so that research results are capable of being evaluated either by the researcher himself or by others . but they also need to know which of these methods or techniques . All these means that it is necessary for the researcher to design his methodology for his problem as the same may differ from problem to problem . how to apply particular research techniques . the mode .

Secondary Data : Secondary data are those which have already been collected and analyzed by someone else . trade associations . universities . There are several methods of collecting primary data . through questionnaires . questionnaire .The task of data collection begins after a research problem has been defined and research design / plan chalked out . they may be found in diaries . Secondary data may be either published or unpublished. historical documents .etc. . At last we conclude that what method we adopted for collection of primary and secondary data .4 ANALYSIS AND INTERPRETATION OF DATA 47 . public records and statistics . labour bureaus and other public / private individuals and organizations . and internet 3. Primary Data : Primary data are those which are collected for the first time and are thus original in character . primary and secondary . Primary Data : From Questionnaire Secondary Data : From books. reports prepared by research scholars . or international bodies . letters .various publications of foreign govt. newspaper. etc . Usually published data are available in various publications of the central . These can be written in following lines . through personal interview . . Collection of primary data . Primary data can be collected either through experiment or through survey . data can be collected by observation . economists . the researcher should keep in mind two types of data viz. Important ones are : interview method .While deciding about the method of data collection to be used for the study . through schedules . schedules . and other sources of published information . The sources of unpublished data are many . unpublished biographies and autobiographies and also may be available with scholars and research workers . particularly in surveys and descriptive researches . Primary data are in the shape of raw materials to which statistical methods are applied for the purpose of analysis and interpretation . In the case of a survey . telephone interview . state and local govt. journals.

The data , after collection , has to be processed and analysed in accordance with the outline laid down for the purpose at the time of developing the research plan . This is essential for a scientific study and for ensuring that we have all relevant data for making contemplated comparisons and analysis . The term analysis refers to the computation of certain measures along with searching for patterns of relationship that exist among data – groups .

DATA ANALYSIS After the data has been collected , the researcher turns to the task of analyzing them . The analysis of data requires a number of closely related operations such as establishment of categories . The application of these categories to raw data through coding , tabulation and then drawing statistical inferences . Thus researcher should classify the raw data into some purposeful and useable categories . Coding operation is usually done at this stage through which the categories of data are transformed into symbols that may be tabulated and counted . Editing is the procedure that improves the quality of the data for coding . Tabulation is a part of technical procedure where in the classified data are put in the form of tables . Analysis were after tabulation is generally based on the computation of various percentages , coefficients etc. by applying various statistical formula .

DATA INTERPRETATION After analysis of data the researcher is in a position to test the hypothesis , if he had formulated earlier . Various test such as chi – square test , t – test , F – test etc. have been developed by statistician for the purpose . The hypothesis may be tested through the use of one or more of such test , depending upon the nature and the object of research . If a hypothesis is tested , it may be possible for the researcher to arrive at generalization i.e. to build up a theory . If the researcher had no hypothesis to start with he might seek to explain his findings on the basis of some theory . It is known as interpretation .

48

CHAPTER-4

Analysis of data

49

S.NO . 1. 2. 3. 4. 5. 6. 7. 8.

Question Option Option Option Option Option Option No. 1 2 3 4 5 6 7 48 2 8 20 10 3 17 9 10 10 20 10 10 25 10 5 10 11 17 10 13 10 12 7 10 8 5 10 10 13 20 11 12 7 14 18 6 8 5 10 3

Total 50 50 50 50 50 50 50 50

1. Do you have any other investment/insurance policy?
4%

Yes No

96%

Here 96% respondent’s responded that they have insurance policy 2. From which company?

34%

40%

ICICI Prudential HDFC Standard Bajaj Allianz Others

6%

20%

Answer of the question given differs from respondent to respondent, but most of them have insurance policy of ICICI Prudential i.e.40%

50

3. WHAT KIND OF ULIP PLAN WOULD YOU INVEST IN? 20% 34% All equity Grow th 26% 20% Balanced All debt Here 34% respondent responded that they would like to invest in Growth ALL EQUITY 6. NAME THE SCHEMES/PLANS YOU LIKE TO INVEST 20% ULIP 10% 50% Mutual Fund Not sure Some others 20% The answer of above question 50% respondent they would like to invest in mutual fund. 5. WHAT IS YOUR PRIMARY OBJECTIVE IN MAKING INVESTMENT IN Mutual fund / ULIP 20% 20% To provide for retirem ent tax saving 20% 40% To m eet contingencies Child education Here ever respondent have different objective of making investments. TYPE OF MUTUAL FUND YOU WILL LIKE TO INVEST IN 51 . 4. But the main is to provide for retirement 40% responded have the above view.

WHAT EXACTLY INFLUENCES YOUR DECISION IN INVESTING IN MUTUAL FUNDS? 8% 17% 30% Consultant Friends & Relatives Agents Fam ily m em bers 10% 10% 25% Advertisem ent New s paper Respondents says that Advertisement influences the most in making investments decision.20% 0% 14% Grow th schem e Incom e schem e Balance schem e 20% Money Market schem e Slice 5 Tax saving schem e 20% 10% 16% Index scheme Here respondent has given 20%view that they would like to invest in Tax saving scheme. TYPES OF MUTUAL FUNDS YOU PREFER 14% 40% 24% Open ended Closed ended Interval schem e Not sure 22% On the type of Mutual fund they would like to prefer majority of respondent says Open ended. and Income scheme respectively 7. 8. then any other. And every factor has its own effect but not more than consultant 52 . Index scheme.

CHAPTER-5 53 .

Findings • In terms of distribution. Kotak Mahindra has the minimum productivity. • • ICICI Prudential is easily reachable as it has many branches in the region. the second in order is almost half in productivity. it being 0. Birla Sun Life Insurance.1. • Productivity of ICICI Prudential is the maximum being 0. ICICI Prudential Equity Fund can any give returns comparable with any best performing mutual funds.80. Limitations 54 . & have large Distribution channel. it being 0.41. ICICI Prudential has the highest number of Bancassurance. • ULIP plans are much better than Mutual funds because of the front load charges structure.

55 . Ltd. · The major limitation was in terms of collecting the right information from the various Insurance players. Priority Circle branch. which are equally important aspect of learning. Raipur. as the Insurance players resist in revealing their marketing strategies. etc. · Project is limited to ICICI Prudential Life Insurance Co..It excludes the analysis of low premium paying segment of the people. which is branch dedicated to High Net-worth Individual .· The scope of the project is limited to conceptual and marketing aspects of Life Insurance Companies and doesn’t include Claim Settlement and the underwriting part of the operations.

CHAPTER-6 Recommendations 1. ICICI Prudential Life Insurance should employee aggressive and innovative marketing strategy to increase the market share and become the No 1 insurance 56 .

5. 4. 6. 57 . The post sales customer’s service should be given priority and every care should be taken to address all queries and grievances of customer efficiently.The documentation required with the application form should be reduced. The training program for financial advisors should be more comprehensive and rigorous one. 7. The basic application form of ICICI prudential can be simplified by deleting few redundant questions . 3. During the training program the Advisor should not only be give product knowledge but also the comparative product knowledge across industry This will help the advisors to pitch the insurance product better and high lightened the unique sell point (USP) of the policy to customers. Introduction of online sales strategy by designing an interacting Internet portal to buy online insurance policies.ups · Infusion of Capital to increase its market share · Expanding the Distribution Network following the hub and spoke model of marketing 2. The strategies ICICI Prudential needs to adopt are· Tapping the Niche Markets · Thrust to the rural markets · Tapping more unconventional distribution channels like bank insurance and corporate tie. ICICI prudential should employee collection agents for collecting premiums and other documents from customers. The ICICI Prudential’s priority circle initiative should be carried forward with more and more priority circle branches coming up across India.player in the Life Insurance sector.

ICICI prudential has shown a growth rate of 200% in 2006 -2007. in terms of number polices sold.CHAPTER-7 CONCLUSION LIC remains the dominant player in the life insurance industry in India because of people’s perception that it is always safe to invest with a government organization. 58 . With huge capital infusion and rapid expansion ICICI Prudential is striving to become the No . Among the private player only ICICI Prudential have the presences across 177 cities in India. LIC with its pan India presence and extended distribution channels scores over the rest of the players by having a huge market share of more 71 %.1 Life Insurance Company by 2012.

As per the survey conducted by me it was found that investors are looking at insurance as an investment option rather than pure risk cover. Investors are looking at feature like capital appreciation. given the cost structures and rate of return over the last couple of years.While comparing with Unit linked insurance plans with Mutual funds it was found that for longer time horizon ULIP plans are much better than Mutual funds because of the front load charges structure.One can always go for pure life insurance i. Equity Linked Saving Schemes [ELSS] emerges as the better option if investor is looking for purely for tax saving through investment . 59 . flexibility and diversification as feature to include in an ULIP plan. which will work out as a cheaper option. Factors like brand image of the company and the performance of other funds are the deciding factors for choosing a particular plan.e. Investors look for transparent cost structure and the portfolio of investment in which their money in being invested to be disclosed. Term Plan along with an Equity Linked Saving Schemes [ELSS] Plan. However for short term investor.

irdaindia.insuranceinstituteofindia. www. www.bimaonline.com 7.ficci. www.com 2.tac. www.com 4.isixsigma.com 3. www. www.org 6.com 60 .org 5.iciciprulife.CHAPTER-8 References The initial list of the books and websites that have been used are as follows: Websites 1. www.

KOTHARI CHAPTER-9 61 .com Books 1. www.8.researchandmarkets.wekipedia. RESEARCH METHDOLGY -Second Edition. C. www.com 9.R.

5 LAKHS 3. Do you have any other investment/insurance policy? Yes Ο 2. I need your support for conducting this study kindly provides me your valuable opinion to fill up this questionnaire.QUESTIONNAIRE Respected sir /madam. 2. Your opinion will be kept confidential and used exclusively for academic purpose.MARTIAL STATUS Ο FEMALE Ο 6.” This is a part of my curriculum.NAME…………………………………………………………………………. SEX MALE 3. Raipur is going to conduct a survey entitled “Investor’s perception towards Mutual Fund and Unit Linked Insurance Plan(ULIP) with (special reference to ICICI prudential). AGE IN YEARS BELOW 30 41 TO50 MARRIED 5 .. 1. No Ο 62 .5 LAKHS 5 LAKHS & ABOVE Ο Ο O 7. TO WHICH OF THE FOLLOWING GROUPS YOU BELONG TO? BELOW 2. Harishankar Shukla College.5 TO 3.5 TO 5 LAKHS Ο Ο 2. I am Rinku Sahu pursuing BBA degree from Pt.QUALIFICATION GRADUATE PROFESSIONAL DEGREE Ο O Ο O POST GRADUATE OTHER DEPLOMA Ο Ο Ο Ο o F 31 TO 40 ABOVE 50 UNMARRIED Ο Ο Ο 4 .

WHAT KIND OF ULIP PLAN WOULD YOU INVEST IN? ALL EQUITY BALANCED (50 % EQUITY & 50 DEBTS) Ο Ο GROWTH (80% EQUITY & 20 % DEBT) ALL DEBT Ο Ο 12. WHAT EXACTLY INFLUENCES YOUR DECISION IN INVESTING IN MUTUAL FUNDS? MF CONSULTANTS BROKER/AGENTS ADVERTISEMENTS Ο Ο Ο FRIENDS & RELATIVES FAMILY MEMBERS APPEARING IN NEWS PAPERS Ο Ο Ο 63 . From which company? ICICI Prudential Bajaj Allianz Ο Ο O HDFC Standard Other Ο Ο O 9. TYPE OF MUTUAL FUNDS YOU PREFER OPEN ENDED INTERVAL SCHEMES Ο Ο CLOSE ENDED Not sure Ο Ο Ο Ο Ο INCOME SCHEMES (DEBT MRKT) MONEY MARKET SCHEMES INDEX SCHEMES (S&P CNX NIFY) Ο Ο Ο 14. WHAT TYPE OF MUTUAL FUND YOU WILL LIKE TO INVEST IN GROWTH SCHEMES (ALL EQUITY FUND) BALANCED SCHEMES (50% EQITY & 50 % DEBT) TAX SAVING SCHEMES (ELSS) 13.8. WHAT IS YOUR PRIMARY OBJECTIVE IN MAKING INVESTMENT IN Mutual Fund / ULIP? TO PROVIDE FOR RETIREMENT TO MEET CONTINGENCIES Ο Ο TAX SAVING CHILD’S EDUCATION Ο Ο 10. NAME THE SCHEMES/PLANS YOU LIKE TO INVEST ULIP NOT SURE Ο Ο MUTUAL FUNDS SOME OTHER Ο Ο 11.

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