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Institute for Integrated Learning in Management Graduate School of Management

5th week Report Starting from 11th June 2012

SUBMITTED TO PROF. Feroz Khan

SUBMIT BY Krishnendu Chowdhury (Roll No. FT-FS-11-324) Sec: - D, PGDFS

In the 5th week of my SIP in SPA capital while working on tax return filling & advising clients I also get the opportunity to work on the insurance products.

Learning Insurance is in the lower step of individuals financial planning


Pyramid. Firstly insurance can be made on any living & non-living objects where we have invested our money its the method hedge against future risk. We can make insurance on our Car, Home, Medical, Our life and even on our Pets. U/S 80D & 80DDB a maximum rebate of Rs 25000/- for getting tax benefit. While taking an Life Insurance policy there are different objectives depending on which an insurance policy is selected between Endowment plan & Term plan. When any individual dies there is two type of loose i.e social loss & economic loss. To hedge against this uncertain economic loss every individual should have life insurance If the object is investment while at the same time get insured for life advice our client to choose an endowment plan. In India endowment plan is the most popular insurance plan compare to term plan people consider endowment plan as an investment window for them. There is less selling effort is needed to an endowment plan as client are already interested to invest. Its just up to us to channelise their willingness to choose certain policy of different companys . Though Endowment plan is most popular still its unable to give the clients the return because in most of the cases its unable to beat the inflation rate which is generally 7% to 8%. Also the in endowment plan premium is quite high as compare to term plan. The only disadvantage in term plan is that after the maturity of the policy the insurer dont get any assured amount only if he dies within the time period of the policy his family will get the moey. While suggesting Term plans to the clients following criteria should be considered

Individuals Life
0 yrs

Learning Phase

22-23 yrs N Earning Phase HOME MARRIAGE CHILD Childs Education CAR INVESTMENT & RETIREMENT PLAN BASIC EXPENSES LIFE STYLE PRODUCTS 55-65yrs Retire life Till Death

We suggest clients that if something unfortunate happens to them then to protect their family from uncertainty he should take a term plan. The objective of this policy is purely insurance.. We suggest clients to invest 200multiple of their monthly income they should buy term policy. Like Mr. Sanjib earns Rs30000 pm then he should buy a term plan worth Rs6000000. This it would guarantee a regular flow of Rs30000 to his family & also his family can invest some portion of the amount in some investment products like Mutual funds & FDs

Contd:

There is also insurance for medical purpose i.e. mediclaim policy. For getting benefit from the mediclaim benefit one has to admit in hospital for at least 24 hrs. There may be Caping in different policy i.e. there is a ratio in which various medical expenditure are divided. Admit on Cash & Non-cash basis. Mediclaim policy can starts from 50k to highest 10Lacs. Mediclaim policy can be for individual, family float plan (2Adults+3Children) and policy for senior citizen. In Oriental family mediclaim cover is available for (2A+3C+2 Dependents) Mediclaim policy can be taken from the age 0 to 99yrs. After 45 yrs there is a need for medical check-up and after 60yrs the policy comes under senior citizen policy. But in Star Red Carpet there is a facility to get a policy between the age 60 to 70 yrs without any mediclaim check-up. Premium for amount 1Lac is 5k P.A and for 2 Lac is 10k P.A.H. Following are some basic features of medical insurance: Co-payment No-claim bonus maximum limit up to 50% of the policy value Cumulative bonus i.e. increase in sum assured whose max limit is 50% of the policy value Claim for OPD- Out patient department Pre-hospitalization claim for 30 days Post-hospitalization claim up to 60days Day care for cases like eye operation & dental treatment Domiciliary treatment Daily cash accompany a child from 5k to max 10k Organ donar Ambulance charge max limit rs 2500 Policy for maternity For Normal delivery 10k to 15k For cesearean delivery 15k to 25k E-opinion max 2times in a year Accidental benefit which excludes terrorist attack Claim for Ayurvedic treatment Certain policy for Critical illness

Insurance policy is also mandatory for our cars. Following are some features of car insurance policy:1. IDV- Insured declared value (5% depreciation on premium) 2. OD- On damage discount (0% to 60%) 3. NCB- No claim bonus (0%- 50% which can be carry forward for 60 days) 4. TPA-Third Party