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

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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.

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1.3 Hypothesis 4 .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. 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. To do detailed analysis of the entire range of products/schemes offered by ICICI Prudential life Insurance company Ltd. 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. It will help in making a detailed analysis of the spectrum of Insurance products available in the market across the industry. and to identify the major factor that influence investor for choosing an Insurance plan.

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. A null hypothesis (HO) is a stated assumption that there is no difference in parameters (mean.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. 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.

200 houses. Insurance has a deep-rooted history. 600 AD when they organized guilds called “benevolent societies” which cared for the families and paid funeral expenses of members upon death. It finds mention in the writings of Manu ( Manusmrithi ). if a house is burnt. neighbors will not receive help in the future. “The Fire Office.” to insure brick and frame homes.e. The Babylonians developed a system which was recorded in the famous Code of Hammurabi. For example. Guilds in the middle Ages served a similar purpose. the members of the community help build a new one. In 1680. he established England’s first fire Insurance company. The first Insurance company in the United States underwrote fire Insurance and was formed in Charles Town (modern-day Charleston). 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. South Carolina.1) History of Insurance industry In some sense we can say that Insurance appeared simultaneously with appearance of human society. They invented the concept of the ‘general average’.1. Chinese merchants traveling treacherous river rapids would redistribute their cargo across many vessels to limit the loss due to any single vessel’s capsizing. the other neighbors must come to help? Otherwise. a separation of roles that first proved useful in marine Insurance. If a merchant received a loan to fund his shipment.D devoured 13. Insurance policies not bundled with loans or other kinds of contracts) were invented in Greeks rulers in the 14th century. In earlier economies. The writings talk in terms of pooling of resources that could be re-distributed in times 6 . which in 1666 A. and practiced by early Mediterranean sailing merchants. Insurance in the modern sense. Introduction to Insurance industry in India In India. 1750 BC. Insurance became far more sophisticated in post-Renaissance Europe.. in which people donated amounts of money to a general sum that could be used for emergencies. Nicholas Barbon opened an office to insure buildings. 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. c. Yagnavalkya ( Dharmasastra ) and Kautilya ( Arthasastra ). respectively. Greek monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. These new Insurance contracts allowed Insurance to be separated from investment.1732. Separate Insurance contracts (i. Insurance as we know it today can be traced to the Great Fire of London. he would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen.4. “friendly societies” existed in England. Should the same thing happen to one’s neighbour. In the aftermath of this disaster. Before Insurance was established in the late 17th century. as were Insurance pools backed by pledges of landed estates. we can see Insurance in the form of people helping each other. The Greeks and Romans introduced the origins of health and life Insurance c.

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

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

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

What is Life Insurance? A life Insurance policy is a specialized contract. it recommended that the private sector be permitted to enter the Insurance industry.e. 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on Insurance business to protection of policyholders’ interests. 7. Royal Sundaram Alliance Insurance Co. 9. The key objectives of the IRDA include promotion of competition to enhance customer satisfaction through increased consumer choice and lower premiums. The committee submitted its report in 1994 wherein. Agriculture Insurance Company of India Ltd. The objective was to complement the reforms initiated in the financial sector. ICICI Lombard general Insurance Co. among other things. Bajaj Allianz General Insurance Co. in 1999. They stated that foreign companies are allowed to enter by floating Indian companies. Ltd. Ltd. in terms of the Indian Contact Act. 8. · PRIVATE SECTOR 1. But there was ceiling to the amount of Foreign Direct Investment(FDI ) into the Insurance sector i. 6.- 10 . to propose recommendations for reforms in the Insurance sector. preferably a joint venture with Indian partners. the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the Insurance industry. Export Credit Guarantee Corporation Ltd. Reliance General Insurance Co. 3. 5. 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. Cholamandalam MS General Insurance Co. Ltd. the Government set up a committee under the chairmanship of RN Malhotra.e. The IRDA opened up the market to the private companies in August 2000 with invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. Star Health and Allied Insurance Co. In 1993. The Authority has the power to frame regulations under Section 114(A) of the Insurance Act. United India Insurance Co. Lt 4. FDI of 26% is only allowed . HDFC-Chubb General Insurance Co. former Governor of RBI.It satisfy all the essentials of legal contact i. Ltd. Ltd. while ensuring the financial security of the Insurance market.4. Ltd. 1872. Ltd. Tata AIG General Insurance Co. Ltd. The IRDA was incorporated as a statutory body in April 2000. IFFCO Tokio General Insurance Co. Ltd. a) Birth of Insurance Regulatory and Development Authority (IRDA)Following the recommendations of the Malhotra Committee report. 6. Reforms in the Insurance Sector This millennium has seen Insurance come a full circle in a journey extending to nearly 200 years. 5. 2.

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

. but cumulative premiums are roughly equal if policies are kept in force until average life expectancy.5 percent. In real terms.6 percent. low interest rates and favorable stock markets in Europe. non-Life premiums increased by 0. The primary advantages of whole life are guaranteed death benefits. moderate inflation. total premium volume grew by 2. fixed and known annual premiums. 2513. equals the death benefit (face amount) at a certain age.g.89 billion as on March 31. High economic growth. WHOLE LIFE COVERAGE Whole life Insurance provides for a level premium. 15 years) or a specific age (e. after a specific period (e. ICICI 12 . worldwide Insurance premiums amounted to USD 3426 bn. The age this commences is known as the endowment age. The primary disadvantages of whole life are premium inflexibility. 3. Non-Life business remained profitable despite huge hurricane losses in the United States. and corporate and agricultural finance. This includes mortgages. and the internal rate of return in the policy may not be competitive with other savings alternatives. 2006.1. 65). GLOBAL Insurance SCENARIO In 2006.2 ICICI PRUDENTIAL. Profitability in Life Insurance improved when compared to 2004. 2.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. credit and debit cards. ENDOWMENTS Endowments are policies in which the cash value built up inside the policy. USD 1974 bn accounted for Life and USD 1452 bn to non-Life Insurance. and mortality and expense charges will not reduce the cash value shown in the policy. car and personal loans. 1.4. Endowments are considerably more expensive (in terms of annual premiums) Endowment Insurance is paid out whether the insured lives or dies. While Life premiums increased by 3. 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.9 percent.g. guaranteed cash values. Premiums are much higher than term Insurance in the short-term. and a cash value table included in the policy guaranteed by the company. Of this. ICICI Bank provides a broad spectrum of financial services to individuals and companies. Japan and in the emerging markets contributed to growth in the Insurance industry.

000 Insurance advisors.The ICICI Prudential Edge -What makes it No. etc. ICICI Prudential Life Insurance Company Pvt Ltd India’s Number One private life insurer. in all that they do be it product development. 13 . Korea. Prudential has brought to the market an integrated range of financial services products that now includes life assurance. mutual funds. It began its operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). Prudential Plc-through its businesses in Europe. Malaysia. Taiwan. India. 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 made joint venture with Prudential Plc of U.It has also tied up with NGOs Micro Finance Institutions and corporate for the distribution of rural policies. the Philippines. ICICI Prudential has one of the largest distribution networks amongst private life insurers in India. Hong Kong. and Vietnam.It has forayed into life & General Insurance business . In Asia. pensions. 2. investment management. USA. with ICICI Bank holding a stake of 74% and Prudential plc holding 26% stake.1. distribution. banking.K to from ICICI Prudential Life Insurance Company Pvt Ltd . Today. having tie-ups with ICICI Bank. and general Insurance. Prudential is the leading European life Insurance company with a vast network of 23 life and mutual fund operations in twelve countries-China. by The Economic Times . As of January 31. policy holders and unit holders worldwide.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. 2005. Lord Krishna Bank. Singapore. the sales process or servicing. Federal Bank. Japan. the company had over US$ 400 billion in funds under management. Bank of India.200 ATMs.AC Nielsen ORG Marg survey of ‘Most Trusted Brands’. 2007 the company has over 540 offices across the country and over 2. Indonesia.85 billion.a leading international financial services group headquartered in the United Kingdom.1 Pvt Insurer The ICICI Prudential edge comes from its commitment to be No. and Asia-provides retail financial services products and services to more than 16 million customers. 00. As of December 31.000 advisors The company has over 20 banc assurance partners. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank . Thailand. ICICI Prudential has been voted as India’s Most Trusted Private Life Insurer. call centers and Internet banking. 19 banc assurance partners and 300 corporate agent tie-ups and 4 million polices by March 2007. For three years in a row. its nation-wide team comprises nearly 1.one of India’s foremost financial services companies and prudential plc. UK. 00. South Indian Bank.Z 2) Prudential Plc Prudential Plc established in London in 1848. ICICI Prudential was the first life insurer in India to receive a National Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. 3). Total capital infusion stands at 15.Similarly it tied up with Lombard to form the ICICI Lombard Pvt Ltd.

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

ICICI Prudential Protection Solutions/TERM Plan · LifeGuard is a protection plan. The policy is designed to provide money at important milestones in the child’s life. · 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. Each offer 4 fund options . level term assurance with return of premium & single premium. Protector.level term assurance. 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. 15 . 2. · Premier Life Gold is a limited premium paying plan specially structured for long-term wealth creation. 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. · 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.both single premium and regular premium 4. · Invest Shield Cashbak is a unit linked plan that provides premium guarantee on the invested premiums along with flexible liquidity options. It is available in 3 options . 3. 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.Preserver. which offers life cover at low cost. · 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.purchase of an asset. Balancer and Maximiser. · 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 .

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

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

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

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

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

I want to provide security for my children for their education This is one of the legitimate reasons for buying Insurance. Investing here gives the option to have immediate annuities or regular pension after the vesting age. In this the equity linked savings scheme (ELSS) mutual funds provide a better option. 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.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.as Insurance premium (with some exceptions) from the assessor’s taxable income subject to limits.03 . If one has to build wealth.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. Reason No. Reason No. he/she will not get the loan. 21 . the risk to be covered is not of the child but of the parents and that to remember in mind.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. Otherwise. Reason No. Generally the Insurance product sold in such situation is Term plan where the policy papers are kept with the bank. In this situation. at least in their initial years.02 . Reason No.07.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. because these riders help to make the policy achieve its objective.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. Insurance is preferred choice in this regard. then it’s the costliest way to do so. However. savings need to be put into an investment with specific time horizon and goal. Reason No. If the sole purpose of buying Insurance is to save on tax. The Survival of the Insurance advisor is the sole driver here and not the need of the buyer. And one should check up with all available riders that can be taken with the child plan. 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. It’s no secret that Insurance advisors.05 . Reason No.06 . So they try creating a need for buying an Insurance policy in potential client.04 .

given the fact that including people who graduate from the college have not much idea about the concept of Insurance. which again does not say much how Insurance works. 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. Reason No. Reason No. Actually. 2. Here again insurance is bought for reasons other than the one it’s meant for. But with his incomplete knowledge it’s not wise to be guided for buying Insurance plan.I want to cover my life risk I have come across very few people giving me this reason for buying a life Insurance policy. It’s always advisable to take an informed decision rather than to wilt under any pressure. Reason No. The advertisements one see in TV/Newspaper.10.My parents told me to buy Insurance This is not surprising. relatives.My friends told me to buy Insurance A young an enthusiastic young person who has some awareness about Insurance gathered from brochure and magazines. this is the right reason for which Insurance is to be bought.will be asked to target their ‘natural market’ meaning their own household members. to sell the minimum number of policies to keep their license alive.09 . etc. the customer has been portrayed as the king and to his delight.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. One should always try consulate certified Insurance advisors before buying any Insurance plan. the products are redesigned and customized suiting his need taking into account his paying capacity and multiple benefits. 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 .08 .

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

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

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

1) History of Unit Linked Insurance Plans (ULIP) ULIP came into play in the 1960s and became very popular in Western Europe and America.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. The investment is denoted as units & is represented by the value that it has attained & called as the Net Asset Value (NAV). The reason that is attributed to the wide spread popularity of ULIP is because of the transparency and the flexibility which it 26 .3 Unit Linked Insurance Plans (ULIP) ULIP is a life insurance solution that provides for protection & flexibility in an investment.

In today’s times. ULIP work in a premise that there is a class of investor who regularly invest their savings in products like fixed deposit. ULIP attempt to fulfill investment needs of an investor while giving him protection in form an insurance cover.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 .ULIP as product combines the features of both the products (investment & insurance) into a single product. 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. coupon bearing funds & stocks. ULIP provides solutions for insurance planning. corporate bonds & government securities. debt funds. There is another class of investor who take insurance plan to provide pure cover . financial needs. The premium collected is invested in market linked instrument like stocks.offers. financial planning for children’s future and retirement planning. The ULIP are like mutual fund with a life cover thrown in.

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. In ‘with profits’ policies. unit-linked or ‘with profits’? 1. is a black box and a policyholder has little knowledge of what is happening. The rest of the premium is used to invest in a fund that invests money in stocks or bonds. but they are structured differently In a ULIP too. the insured can direct the company to invest in the fund of his choice. 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. the insurer calculates how much has to be paid to settle death and maturity claims. Every year. 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. The surplus in the life fund left after meeting these liabilities is credited Unit Linked Insurance Plan (ULIP). The policyholder’s share in the fund is represented by the number of units. balanced fund and a fund which invests in bonds.’ after setting aside funds for the risk premium on life insurance and management expenses. administration charges and fund management charges.’ on the other hand. A traditional ‘with profits. If the insurance company offers a range of funds. Insurers usually offer three choices — an equity (growth) fund. 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. it allows the investor to choose the assets into which he wants his funds invested. the insurer deducts charges towards life insurance (mortality charges). Which is better. the insurance company credits the premium to a common pool called the ‘life fund. are distinct from the more familiar ‘with profits’ policies sold for decades by the Life Insurance Corporation. An investor in a ULIP knows how much he is 28 .

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

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

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

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

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

00. with risk commencing at an early age.00.000 10 2.140 8.425 5. 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.550 10.528 17.000 5.813 32.000 10.000 15 2.00.037 14.000 10 1.00.550 10.100 10.Amount payable on death during Term of the Policy (in Rs) 5.328 22.00.00.000 15 1.000 20 2.00.400 5.00.000 10.00. Parents or legal guardians can propose the policy for children between ages 1 and 12 years.00.000 Child plan Jeevan Kishore ICICI Prudential Smart Kid Suitability · This is an improved version of the New Children’s Deferred Assurance plan.00.00.000 5.000 20 1. Salient Features · Children between ages 1 and 12 years are eligible. 34 .000 10.285 12.200 5.

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

policy anniversary following an unfortunate demise. premium paying) phase. Maximum age of the Parent: 60 years.000. All future premiums will be waived.800p. It also offers life cover during the deferment (i. 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. 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. till maturity of the Rider. · Accident and Disability Benefit Rider This provides cover against an unfortunate death due to an accident.30.. 00.000.000 per year. Minimum Sum Assured: Rs. If the individual gets permanently disabled due to an accident. For child aged 11 years: Rs.a Other Conditions Minimum age of the Parent: 20 years. 000 · Maximum Sum Assured: 1.10.000 2.000 · Min premium must be Rs. For child aged below 10 years: Rs. 36 . 00. 8. 00.1. 00.e.10.30. Minimum premium: Rs. Maximum Sum assured Rs. Other Conditions · Minimum Term: 15 years · Maximum Term: 35 years · Minimum Sum Assured: Rs.5.000. 00. The amount you receive depends on the premium you pay till the stipulated date and the option you choose. it will also provide a regular income for the next 10 years or till maturity of the policy. Maximum limit under Accident and Disability Benefit Rider: Rs.

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

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

in 15 years Charges form an integral part of any ULIP plans.5% 15 1% 3% 39 . 50.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. The table below gives an illustrative example of the total charges that are charged in an insurance plan over a 15 year horizon. Charges comparison Basic Premium charge of some of the cos.000/Rs. insurance cover & tax benefit to the investor. 50.000/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 . and they company or product specific.Maximum age to apply 60 62 Minimum sum assured Rs. So mutual fund is pure investment option whereas ULIP provide a good amount of capital appreciation. 90% 5% 5% 5% 5% 20% Reliance Life Market Return Plan 73% 66% 140% 77.

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. It’s always advisable to go through the detailed charge structure of all the plans available across industry before buying any insurance plan 2.5% 4% 5 1% 3% 5% 4% 4 1% 3% 7.5% 4% 3 20% 3% 7.5% 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 Calculation of productivity Employee Strength: 40 .5% 7.Basic Premium charge of some of the cos. 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.

followed by SBI Life with 30 employees.HDFC Standard No. Bajaj Allianz 3. Birla Sun Life 7.SBI Life 11.Name of Insurance Company 1. 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. ICICI Prudential 2. ICICI Prudential 41 Business generated through banc assurance and alliance in last financial year 22. ICICI Prudential comes a close third with 28 employees. ING Vysya 9. Aviva 4. Kotak Mahindra 10. Business in the last financial year: Name of Insurance Company 1.Tata AIG 5. Max New York 6. Met Life 8.53 .

Aviva 4. Tata AIG 5.5 0.5 0.8.5 2.5 8.53 Source: respective companies ICICI Prudential generated highest business with Rs. Bajaj Allianz 3. Kotak Mahindra 9.5 8.53 Crores in the financial year. Productivity: Productivity = output / input = Business earned in the year 2007-2008 No.Of employees (on rolls) Company ICICI Prudential Output/ Input 22.22.5 0.06 0.8 Crores. Max New York 6.HDFC Standard Source: respective companies 8 5 3 1 2.80 . ING Vysya 8.06 8 Bajaj Allianz Aviva Tata AIG 5 Max New York Birla Sun Life 3 1 2. it was followed by SBI Life with Rs. Birla Sun Life 7.2. SBI Life 10.5 2. 2007-2008.5 Crores and Bajaj Allianz closely Behind with Rs.53/28 42 Productivity 0.5 ICICI Prudential ING Vysya Kotak Mhindra SBI Life HDFC Standard 22.

4 0.5/7 0.28 0.35 Productivity of Life Insurance Companies 0.5/5 8.5/30 2.15 0.11 0.2 0.9 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 2.5/6 0.6 0.5 0.2 0.2 0.41 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 .015 0.3 0.1 0.7 0.8 0.06/4 0.

1 MEANING OF METHODOLOGY 44 .CHAPTER-3 3.

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

It is necessary for the researcher to know not only the research methods / techniques but also the methodology . but they also need to know which of these methods or techniques . Thus .3 DATA COLLECTION TECHNIQUE 46 . It may be understood as a science of studying his / her research problem along with the logic behind them . the mode . how to calculate the mean . how to apply particular research techniques .3. we can say that the Research methodology has many dimensions and research research mathods do constitute a part of research methodology . Researcher not only need to know how to develop certain indices or tests . the median or the standard deviation or chi – square .2 RESEARCH METHODOLGY Research methodology is a way to systematically solve the research problem . 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 . 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 . The scope of research methodology is wider than that of research methods . From what has been stated above . 3.

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

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

But the main is to provide for retirement 40% responded have the above view. TYPE OF MUTUAL FUND YOU WILL LIKE TO INVEST IN 51 .3. 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. 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. 4. 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.

8.20% 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. then any other. and Income scheme respectively 7. And every factor has its own effect but not more than consultant 52 . Index scheme. 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. 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.

CHAPTER-5 53 .

• • ICICI Prudential is easily reachable as it has many branches in the region.Findings • In terms of distribution.1.41. it being 0.80. Limitations 54 . Kotak Mahindra has the minimum productivity. ICICI Prudential has the highest number of Bancassurance. • Productivity of ICICI Prudential is the maximum being 0. the second in order is almost half in productivity. • ULIP plans are much better than Mutual funds because of the front load charges structure. & have large Distribution channel. ICICI Prudential Equity Fund can any give returns comparable with any best performing mutual funds. it being 0. Birla Sun Life Insurance.

Priority Circle branch. Raipur. · Project is limited to ICICI Prudential Life Insurance Co. · The major limitation was in terms of collecting the right information from the various Insurance players. Ltd. etc.. as the Insurance players resist in revealing their marketing strategies.It excludes the analysis of low premium paying segment of the people. which are equally important aspect of learning. which is branch dedicated to High Net-worth Individual . 55 .· 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.

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

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. 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. ICICI prudential should employee collection agents for collecting premiums and other documents from customers.The documentation required with the application form should be reduced. 57 . 4. Introduction of online sales strategy by designing an interacting Internet portal to buy online insurance policies. The ICICI Prudential’s priority circle initiative should be carried forward with more and more priority circle branches coming up across India. 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 basic application form of ICICI prudential can be simplified by deleting few redundant questions . 7. 5. 3. The training program for financial advisors should be more comprehensive and rigorous one. 6.player in the Life Insurance sector.

With huge capital infusion and rapid expansion ICICI Prudential is striving to become the No .1 Life Insurance Company by 2012.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 . 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 %. ICICI prudential has shown a growth rate of 200% in 2006 -2007. in terms of number polices sold.

given the cost structures and rate of return over the last couple of years. Investors are looking at feature like capital appreciation. However for short term investor. which will work out as a cheaper option. Investors look for transparent cost structure and the portfolio of investment in which their money in being invested to be disclosed. Equity Linked Saving Schemes [ELSS] emerges as the better option if investor is looking for purely for tax saving through investment .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. 59 .One can always go for pure life insurance i. flexibility and diversification as feature to include in an ULIP plan.e. 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. Term Plan along with an Equity Linked Saving Schemes [ELSS] Plan. Factors like brand image of the company and the performance of other funds are the deciding factors for choosing a particular plan.

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

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

5 TO 3.” This is a part of my curriculum. No Ο 62 .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 . I need your support for conducting this study kindly provides me your valuable opinion to fill up this questionnaire. Do you have any other investment/insurance policy? Yes Ο 2.MARTIAL STATUS Ο FEMALE Ο 6. Your opinion will be kept confidential and used exclusively for academic purpose..NAME…………………………………………………………………………. I am Rinku Sahu pursuing BBA degree from Pt. 2.5 TO 5 LAKHS Ο Ο 2.5 LAKHS 3. AGE IN YEARS BELOW 30 41 TO50 MARRIED 5 . 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). Harishankar Shukla College. 1. SEX MALE 3. TO WHICH OF THE FOLLOWING GROUPS YOU BELONG TO? BELOW 2.QUESTIONNAIRE Respected sir /madam.5 LAKHS 5 LAKHS & ABOVE Ο Ο O 7.

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. From which company? ICICI Prudential Bajaj Allianz Ο Ο O HDFC Standard Other Ο Ο O 9. NAME THE SCHEMES/PLANS YOU LIKE TO INVEST ULIP NOT SURE Ο Ο MUTUAL FUNDS SOME OTHER Ο Ο 11. 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. 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. 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 .8. 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.