MBA Assignment - Final Project by Mahiuddin Shams

LC Code: 01713
Apar India Institute of Management & Technology

Rohini, Sector - 8, New Delhi - 110085, Tel.: 011 45044000
www.aparindiacollege.com
A Comparatie !tudy of Inestment "lan of ICICI "rudential Life
Insurance and Life Insurance #ith other Companies
By:
Mahiuddin !hams
A project report submitted in partial fulfillment of the requirements for the
degree of Master of Business Administration of Sikkim Manipal University,
NDA
!i$$im Manipal %niersity
of Health, Medical and Technological Sciences
Distance Education Wing, Syndicate house,
Manipal - 576104
P a g e | 1 of 104 MAHIUDDIN SHAMS
MBA Assignment - Final Project
I hereby declare that the project entitled
Submitted in partial fulfillment of the requirements for the degree of Masters of
Business Administration to Sikkim Manipal University, NDA, is my original
work and not submitted for the award of any other degree, diploma, fellowship,
or any other similar title or prizes.

Place: New Delhi Mahiuddin !hams
Date: 02.02.2009 Reg. No: 510738565
The project report of
Mahiuddin !hams
is approved and is acceptable in quality and form.
nternal Examiner External Examiner
This is to certify that the project report entitled
Submitted in partial fulfillment of the requirements for the degree of Masters of
Business Administration to Sikkim Manipal University of Health, Medical and
Technological Sciences
Mahiuddin !hams
Has worked under my supervision and guidance and that no part of this report
has been submitted for the award of any other degree, diploma, fellowship or
other similar titles or prizes and that the work has not been published in any
journal or magazine.
Reg. No: 510738565 Certified
(Guide's name)
A&!T'ACT
An operational definition of the insurance is:
The benefit provided by a particular kind of indemnity contract, called an
insurance policy;
That is issued by one of several kinds of legal entities (stock insurance
company, mutual insurance company, reciprocal, or Lloyd's syndicate,
for example), any of which may be called an insurer;
The business of insurance is related to the protection of the economic
values of assets.
The life insurance business deals with risks relating to life of human
beings.
The objective of this project was to compare the investment plan of ICICI
"rudential Life Insurance with other competitive companies. While doing the
comparison have studied the investment plans ICICI "rudential Life
Insurance and that of the other competitive companies. have also compared
the market status of the company in respect of the other competitive
companies.

would like to thank my mentor who provided me the guidance for
understanding the investment plans, which will give me lots of experience and
help me in future.
AC()*+L,-.,M,)T
hereby express my gratitude to faculties & Apar India Institute of
Management and Technology for giving me this opportunity to work on this
project and for helping me and providing timely guidance in all matters related
to my project.
am thankful to Mr/ 'am "u0an !harma (Financial Planning Manager, ICICI
"rudential Life Insurance) for providing me with an opportunity to work in this
organization. also thank him for his valuable inputs in my project and for also
giving me an insight into the actual working of the company.
express my indebtedness and gratitude to my company project guide Mr/
Lalit Tyagi (Unit Manager, ICICI "rudential Life Insurance) for his constant
support and encouragement throughout the execution of the project, without
him this project would not have been possible.
Mahiuddin !hams
I)-,1
!/)* C*)T,)T! "A., )*/
1 ntroduction 8
2 Objectives Of Research 24
3 Research Methodology 25
4 Literature Review 27
5 ndustry profile 33
- SWOT analysis of nsurance sector 39
6 Company profile 44
- Fact Sheet 44
- Distribution 45
- Promoters 45
- Management Team 46
- Products 52
7 Data analysis 78
- On the basis of company share in market 78
- On the basis of investment plan of other companies 88
8 Conclusion 93
9 Recommendation 94
10 Annexure 98
11 Bibliography 104
I)T'*-%CTI*)
+hat Is Insurance
The business of insurance is related to the protection of the economic values
of the asset. Every asset has a value. The asset would have been created
through the efforts of the owner. The asset is valuable to the owner, because
he expects to get some benefits from it. The benefit may be an income or
something else. t is a benefit because it meets some of his needs. n case of
factory or a cow, the product generated by is sold and income is generated. n
case of a motor car, it provides comfort and convenience in transportation.
There is no direct income.
Every asset is expected to last for a certain period of time during which it will
perform. After that, the benefit may not be available. There is a life-time for a
machine in a factory or a cow or a motor car. None of them will last for ever.
The owner is aware of this and he can so manage his affairs by the end of that
period or life-time, a substitute is made available. Thus, he makes sure that the
value or income is not lost. However, asset may get lost earlier. An accident or
some other unfortunate event may destroy it or make it non-functional. n that
case, the owner and those deriving benefits there from, would be deprived of
the benefit and the planned substitute would not have been ready. There is an
adverse or unpleasant situation. nsurance is a mechanism that helps to
reduce the effect of such adverse situations.
+hat is Life Insurance2
Life insurance ensures that your family will receive financial support in your
absence. Put simply, life insurance provides your family with a sum of money
should something happen to you. t protects your family from financial crises.
n addition to serving as a protective cover, life insurance acts as a flexible
money-saving scheme, which empowers you to accumulate wealth-to buy a
new car, get your children married and even retire comfortably.
Life insurance also triples up as an ideal tax-saving scheme.
Brief History of Insurance
The business of insurance started with marine business. Traders, who used to
gather in the Lloyd's coffee house in London, agreed to share the losses to
occur because of pirates who robbed on the high seas or because of bad
weather spoiling the goods or sinking the ship. The first insurance was issued
in 1583 in England. n ndia, insurance began in 1870 with life insurance being
transacted by an English company, the European and the Albert. The first
ndian insurance company was the Bombay Mutual Assurance Society Ltd,
formed in 1870. This was followed by the Oriental Life Assurance Co. in 1874,
the Bharat in 1896 and the Empire of ndia in 1897.
Later, the Hindustan Co operative was formed in Calcutta, the United ndia in
Madras, the Bombay Life in Bombay, the National in Calcutta, the New ndia in
Bombay, the Jupiter in Bombay and the Lakshmi in New Delhi. These were all
ndian companies, started as a result of the swadeshi movement in the early
1900's. By the year 1956, when the life insurance business was nationalised
and the Life nsurance Corporation of ndia (LC) was formed on 1
st
September
1956, there were 170 companies and 75 provident fund societies transacting
life insurance business in ndia. After the amendments to the relevant laws in
1999, the L..C. did not have the exclusive privilege of doing life insurance
business in ndia. By the 31.3.2002, eleven new insurers had been registered
and had begun to transact life insurance business in ndia.
Purpose and Need of Insurance
Assets are insured, because they are likely to be destroyed, through accidental
occurrences. Such possible occurrences are called perils. Fire, floods,
breakdowns, lightning, earthquakes, etc, are perils. f such perils can cause
damage to the asset, we say that the asset is exposed to that risk. Perils are
the events. Risks are the consequential losses or the damages. The risk to an
owner of a building, because of the peril of an earthquake, may be a few lakhs
or a few crores of rupees, depending on the cost of the building and the
contents in it.
The risk only means that there is a possibility of loss or damage. The damage
may or may not happen. nsurance is done against the contingency that it may
happen. There has to be an uncertainty about the risk. nsurance is relevant
only if there are uncertainties. f there is no uncertainty about the occurrence of
an event, it cannot be insured against. n the case of an human being, death is
certain, but the time of death is uncertain. n the case of a person who is
terminally ill, the time of death is not uncertain, though not exactly known. He
cannot be insured.
nsurance does not protect the asset. t does not prevent its loss due to the
peril. The peril cannot be avoided through the insurance. The peril can
sometimes be avoided, through better safety and damage control
management. nsurance only tries to reduce the impact of the risk on the
owner of the asset and those who depend on that asset. t only compensates
the losses and that too, not fully.
Only economic consequences can be insured. f the loss is not financial,
insurance may not be possible. Examples of non-economic losses are love and
affection of parents, leadership of managers, sentimental attachments to family
heirlooms, innovative and creative abilities, etc.
How Insurance Works
The mechanism of insurance is very simple. People who are exposed to the
same risks come together and agreed that, if any one of them suffers a loss,
the others will share the loss and make good to that person who lost. All people
who send goods by ship are exposed to the same risks which are related to
water damage, ship sinking, piracy, etc. Those owing factories are not exposed
to these risks, but they are exposed to different type of risks like, fire,
hailstorms, earthquakes, lightning, burglary, etc. Like this different type of risks
can be identified and separate groups made, including those exposed to such
risks. By this method the heavy loss that any one of them may suffer (all of
them may not suffer such losses at the same time) is divided into bearable
small losses by all. n other words, the risk is spread among the community
and the likely big impact on one is reduced to smaller manageable impacts on
all.
f a jumbo Jet with more than 350 passenger crashes, the loss would run into
several crores of rupees. No airline would be able to bear such a loss. t is
unlikely that many Jumbo Jets will crash at the same time. f 100 airline
companies flying Jumbo Jets, come together into the insurance pool, whenever
one of the Jumbo Jets in the pool crashes, the loss to be borne by each airline
would come down to a few lakhs of rupees. Thus, insurance is a business of
'sharing'.
There are certain principles, which make it possible for insurance to remain a
fair arrangement. The first is that it is difficult for any one individual to bear the
consequences of the risks that he is exposed to. t will become bearable when
the community shares the burden. The second is that the peril should occur in
an accidental manner. Nobody should be in a position to make the risk happen.
n other words, none in the group should set fire to his assets and asks others
to share the costs of damage. This would be taking the unfair advantage of an
arrangement put into place to protect people from the risks they are exposed
to. The occurrence has to be random, accidental, and not the deliberate
creation of the insured person.
The manner in which the loss is to be shared can be determined before-hand.
t may be proportional to the risk that each person is exposed to. This would be
indicative of the benefit he would receive if the peril befell him. The share could
be collected from the members after the loss has occurred or the likely shares
may be collected in advance, at the time of admission to the group. nsurance
companies collect in advance and create a fund from which the losses are
paid.
The collection to be made from each person in advance is determined on
assumptions. While it may not be possible to tell beforehand, which person will
suffer, it may be possible to tell, on the basis of past experiences, how many
persons, on an average, may suffer losses. The following example explains the
above concept of insurance:
Example:
n a village, there are 400 houses, each valued at Rs.20, 000. Every year, on
the average, 4 houses get burnt, resulting into a total loss of Rs.80, 000. f all
the 400 owners come together and contribute Rs.200 each, the common fund
would be Rs.80000. This is enough to pay Rs.20000 to each of the 4 owners
whose hoses got burnt. Thus, the risk of 4 owners is spread over 400 house
owners of the village.
The Human Asset
A human being is an income generating asset. One's manual labour,
professional skills and business acumen are the assets. This asset can also be
lost through unexpectedly early death or through sickness and disabilities
caused by accidents. Accidents may or may not happen. Death will happen,
but the timing is uncertain. f it happens around the time of one's retirement,
when it could be expected that the income will normally cease, the person
concerned could have made some other arrangements to meet the continuing
needs. But if it happens much earlier when the alternate arrangements are not
in place, there can be losses to the person and dependents. nsurance is
necessary to help those dependent on the income.
A person, who may have arrangements for his needs after his retirement, also
would need insurance. This is because the arrangements would have been
made on the basis of some expectations like, likely to live for another 15 years,
or that children will look after him. f any of these expectations do not become
true, the original arrangement would become inadequate and there could be
difficulties. Living too long can be as much a problem as dying too young. Both
are risks, which need to be safeguarding against. nsurance takes care.
The Business of Insurance
nsurance companies are called insurers. The business of insurance is to:-
a) Bring together persons with common insurance interests (sharing the
same risks)
b) Collect the share or contribution (called premium) from all of them and,
c) Pay out compensation (called claims) to those who suffer.
The premium is determined on the same lines as indicated in the example
above, but with some further refinements.
n ndia, insurance business is classified primarily as life and non-life or
general. Life insurance includes all risks related to the lives of human beings
and general insurance covers the rest. General insurance has three
classifications viz, Fire (dealing with all fire related risks), Marine (dealing with
all transport related risks and ships) and Miscellaneous (dealing with all others
like liability, fidelity, motor, crop, personal accident, etc.). Personal accident and
sickness insurance, which are related to human beings, is classified as 'non-
life' in ndia, but is classified as 'life', in many other countries. What is 'Non-life'
in ndia is termed as 'Property and Casualty' in some other countries.
The insurer is in the position of a trustee as it is managing the common fund,
for and on behalf of the community of policyholders. t has to ensure that
nobody is allowed to take undue advantage of the arrangement. That means
that the management of the insurance business requires care to prevent entry
(into the group) of people whose risks are not of the same kind as well as
paying claims on losses that are not accidental. The decision to allow entry is
the process of underwriting of risk. Underwriting includes assessing the risk,
which means, making an evaluation of how much is the exposure to the risk.
The premium to be charged depends on this assessment of the risk. Both
underwriting and claim settlements have to be done with great care.
ole of Insurance In Economic !e"elopment
As we know for economic development, investments are necessary.
nvestments are made out of savings. A life insurance company is a major
instrument for the mobilization of savings of the people, particularly from the
middle and the lower income groups. These savings are channeled into
investments for economic growth.
All good life insurance companies have huge funds, accumulated through the
payments of small amounts of premia of individuals. These funds are invested
in ways that contribute substantially for the economic development of the
countries in which they do business. The private insurers in ndia are new and
had not built up funds in 2002. But now they are also capable to contribute to
the country's economic development.
Types of Insurance
I/ Classification on the 3asis of nature of 3usiness
i# Life Insurance
Life insurance may be defined as a contract in which the insurer, in
consideration of a certain premium, either in a lump sum or by other periodical
payments, agrees to pay to the assured, or to the person for whose benefit the
policy is taken, the assured sum of money / on the happening of a specified
event contingent on the human life.
A contract of life insurance, as in other forms of insurance, requires that the
assured must have at the time of the contract an insurable interest in his half
upon which the insurance is effected. n a contract of life insurance, unlike
other insurance interest has only to be proved at the date of the contract, and
not necessarily present at the time when the policy falls due.
A person can assure in his own life and every part of it, and can insure for any
sum whatsoever, as he likes. Similarly, a wife has an insurable interest in her
husband and vice-versa. However, mere natural love and affection is not
sufficient to constitute an insurable interest. t must be shown that the person
affecting an assurance on the life of another is so related to that other person
as to have a claim for support. For example, a sister has an insurable interest
in the life of a brother who supports her.
A person not related to the other can have insurable interest on that other
person. For example, a creditor has insurable interest in the life of his debtor to
the extent of the debt. A creditor can insure the life of his debtor up to the
amount of the debt, at the time of issue of the policy.
An employee has an insurable interest in the life of the employer arising out of
contractual obligation to employ him for a stipulated period at fixed salary.
Similarly, from an employer to the employer, who is bound by the contract to
serve for a certain period of time.
However, mere natural love and affection is not sufficient to constitute an
insurable interest. t must be shown that the person affecting an assurance on
the life of another is so related to that other person as to have a claim for
support. For example, a sister has an insurable interest in the life of a brother
who supports her.

ii# 4ire Insurance
Fire insurance is a contract to indemnity the insured for distribution of or
damage to property caused by fire. The insurer undertakes to pay the amount
of the insured's is loss subject to the maximum amount stated in the policy. Fire
insurance is essentially a contract of indemnity, not against accident, but
against loss caused by accident, ft is becoming very common in fire insurance
policies to insert a condition, called the average clause, by which the insured is
called upon to bear a portion of the loss himself. The main object of this clause
is to check under-insurance and to encourage for full insurance. t impress
upon the property-owner for the need of having his property accurately valued
before insurance.
Regarding insurable interest, the insured must have insurable interest in the
subject matter both at the time of affecting the policy and at the time of loss.
The risk in fire insurance policy commences from the moment of cover note, or
the deposit receipt, or the interim protection is issued, and continues for the
term covered by the contract of insurance. t may even date back; if the parties
so intend. The rate of premium varies to the degree of hazard or risk involved.
iii# Marine insurance
A contract of marine insurance is an agreement whereby the insurer
undertakes to indemnity the assured in a manner and to the extent thereby
agreed, against marine losses, that is, the losses incidental to marine
adventure. There is a marine adventure when any insurable property is
exposed to marine perils; Marine perils also known as perils of the seas,
means the perils consequent on, or incidental to, the navigation of the sea or
the perils of the seas, such as fire, war perils, pirates, rovers, thieves; captures.
Jettisons, barratry and any other perils which are either of the like kind or may
be designed by the policy.
There are different types of marine policies known by different names
according to the manner of their execution or the risk they cover. They are:
Voyage policy, time policy, valued policy, unvalued policy, floating policy, wager
or honour policy.
i"# !ocial insurance
Social insurance has been developed to provide economic security to weaker
sections of the society who are unable to pay the premium for adequate
insurance Pension plans, disability benefits, unemployment benefits; sickness
insurance, etc. are the various forms of social insurance.
"# Miscellaneous Insurance
The process of fast development in the society gave rise to a number of risks
or hazards. To provide security against such hazards, many other types of
insurance also have been developed. The important among them are:
i) Vehicle insurance on buses, trucks motorcycles, etc.,
ii) Personal accident insurance (by pacing an annual premium of Rs 12/-
Policy worth Rs. 12000/- can be insured.)
iii) Burglary insurance - (against theft, decoity etc.)
iv) Legal liability insurance (insurance whereby the assured is liable to pay
the damages to property or to compensate the loss of personal injury or
death.)
v) Crop insurance (crops are insured against losses due to heavy rain and
floods, cyclone, draughts, crop diseases, etc.)
vi) Cattle insurance - (nsurance for indemnity against the loss of cattle's
from various kinds of disease)
n addition to the above, insurance policies are available against crime,
medical insurance, bullock cart insurance, jewelry insurance, cycle rickshaw
insurance, radio - T.V. insurance, etc.
II/ Classification from 'is$ "oint of 5ie#
From risk point of view, insurance can be classified into four categories:
i) Personal insurance
ii) Property insurance
iii) Liability insurance
iv) Fidelity guarantee insurance
A brief description of each is given below:
i# "ersonal insurance
Personal insurance refers the loss to life by accident, or sickness to individual
which is covered by the policy. The insurer undertakes to pay the sum insured
on the happening of certain event or on maturity of the period of insurance.
The insurable sum is determined at the time of effecting the policy and includes
life insurance, accident insurance, and sickness insurance. Life insurance
contains the element of investment and protection, while the accidental,
sickness or health insurance contains the element of indemnity only.
ii# "roperty insurance
Contract of property insurance is a contract of indemnity. Proof by the assured
of loss is an essential element of property insurance. "The policies of insurance
against burglary, home-breaking or theft etc. fall under this category. The
assured is required to protect the insured property. After the loss has taken
place, the assured usually required to notify the police as to losses.
iii# Lia3ility insurance
Liability insurance is the major field of General insurance whereby the insurer
promises to pay the damage of property or to compensate the tosses to a third
party. The amount of compensation is paid directly to third party. The fields of
liability insurance include workmen compensation insurance/ third party motor
insurance, professional indemnity insurance and third party liability insurance
etc. n liability insurance, there may be various reasons for the arising of
liability; viz., accident of a worker at the workplace, defective goods, explosion
in the factory during the process of production, formation of poisonous gas
within the factory, due to the uses of chemicals and other such substances in
the manufacturing process.
i"# 4idelity guarantee insurance
n this type of insurance, the insurer undertakes to indemnify the assured
(employer) in consideration of certain premium, for losses arising out of fraud,
or embezzlement on the part of the employees. This kind of insurance is
frequently adopted as a precautionary measure in cases where new and
untrained employees are given positions of trust and confidence.
$ome Insurance Terms
"remium: The payment made by the insured, as consideration for the grant of
the insurance is known as Premium. The premium may be payable annually or
at shorter intervals of time & may be payable throughout the period of the
policy or only for a fixed term, depending upon the conditions in the policy.
"remium ,arned & "remium +ritten: Premium earned is the amount of
premiums earned by the risk covered by an insurer during a period.
Premium written is the amount customers are required to pay for policies
written during the year. The two differ because of the timing of premium
payments. For example if:
An insurance policy that runs from the 1st July 2005 to the 30th June
2006.
The premium is Rs.10000.
The insurance company has a December year-end.
Then, as the policy runs for six months of this year and six months of next, half
the risk is taken in the current year and half next year. Therefore the premium
earned is Rs.5,000 for 2005 and Rs.5,000 for 2006. However as the cover is
agreed during 2005, the gross premium written is Rs.10,000 for 2005.
Claims: A claim occurs when a policy falls due for payment. n case of life
insurance business, it will arise either on death or on maturity of policy i.e. on
the expiry of the specified term of years. n case of general insurance
business, a claim arises only when the loss occurs or the liability arises.
"remium -eficiency: Premium deficiency is recognised if the ultimate amount
of expected net claim costs, related expenses and maintenance costs exceeds
the sum of related premium carried forward to the subsequent accounting
period as the reserve for unexpired risk. Premium deficiency is calculated by
line of business. The Company considers maintenance costs as relevant costs
incurred for ensuring claim handling operations.
Catastrophe 'esere: This reserve shall be created in accordance with
norms if any, prescribed by authority. nvestment of funds out of Catastrophe
reserve shall be made in accordance with prescription of the authority.
4air 5alue Change: Fair Value Change account represents unrealised gains
or losses in respect of investments outstanding at the close of the year. The
balance in the account is considered as component of shareholders' funds
though not available for distribution as dividend.
Claims incurred: Claims incurred shall comprise claims paid, specific claims
settlement cost wherever applicable & change in the outstanding provision for
claims at the year-end.
-iminution in the alue of inestments: Diminution in the value of
investments is the reduction in value of investments.
-eferred Ta6es: The deferred taxes assets and liabilities arise due to timing
differences.
Annuity: A recurring payment, which may be constant or may increase, usually
made until the death of the person receiving the annuity. An annuity can also
be paid to 2 people. n this case, the payment ceases on death of second
person.
Annuity Certain: Annuity, which makes payments for a specified period of
time regardless of whether the annuitant is alive or dead during that period.
"olicyholder7s !urplus: The amount by which an insurance company's
assets exceed its liabilities, as reported in its annual statement. For a stock
insurer, the policyholder's surplus is the sum of its capital & surplus; for a
mutual insurer, the policyholder's surplus equals the company's surplus.
!hareholders7 and "olicyholders7 4und: The Shareholders' Fund comprises
of Share Capital, General Reserve and Capital Reserve. The Policyholders'
Fund comprises of Technical Reserves and Provision for Outstanding Claims.
Ceded 'einsurance: The amount of insurance transferred from a ceding
insurer to a reinsurer.
Ceding Insurer: An original or primary insurer that purchases reinsurance; in
so doing, the primary insurer cedes part of its business to the reinsurer.
'einsurance: Risk transferred from one insurer to another; a contract whereby
the assuming insurer (reinsurer) agrees to indemnify the ceding insurer
(cedent) for all or part of the claim liabilities under policies issued by the ceding
insurer, which pays the reinsurer a premium in return. By ceding some of its
business, an insurer may write more business within its reserve or surplus
requirements. Assuming insurers may cede risks to other reinsurers, which is
called retrocession. The two basic types of reinsurance are facultative,
involving the transfer of individual risks, and treaty, involving the transfer of all
risks in a class of business. The ceding insurer usually remains liable for policy
claims, and the reinsurer must indemnify the cedent. n the less common
assumption reinsurance, the reinsurer becomes directly liable for claims
settlement.
'etrocession: Reinsurance of reinsurance. Example: Company "B has
accepted reinsurance from Company "A, and then obtains for itself, on such
business assumed, reinsurance from Company "C. This secondary
reinsurance is called a Retrocession. The transaction whereby a reinsurer
cedes to another reinsurer all or part of the reinsurance it has previously
assumed.
Ad"anta%es of &ife Insurance
Life insurance has no competition from any other business. Many people think
that life insurance is an investment or a means of saving. This is not a correct
view. When a person saves, the amount of funds available at any time is equal
to the amount of money set aside in the past, plus interest. This is so in a fixed
deposit in the bank, in national savings certificates, in mutual funds and all
other savings instruments. f the money is invested in buying shares and
stocks, there is the risk of the money being lost in the fluctuations of the stock
market. Even if there is no loss, the available money at any time is the amount
invested plus appreciation. n life insurance, however, the fund available is not
the total of the savings already made (premiums paid), but the amount one
wished to have at the end of the savings period (which is the next 20 or 30
years). The final fund is secured from the very beginning. One is paying for it
later, out of the savings. One has to pay for it only as long as one lives or for a
lesser period if so chosen. There is no other scheme which provides this kind
of benefit. Therefore, life insurance has no substitute.
Even so, a comparison with other forms of savings will show that life insurance
has the following advantages:
n the event of death the settlement is easy. The heirs can collect the
money quicker, because of the facility of nomination and assignment.
The facility of nomination is now available for some bank accounts.
There is a certain amount of compulsion to go through the plan of
savings. n other forms, if one changes the original plan of savings, there
is no loss. n insurance, there is a loss.
There are tax benefits, both in income tax and in capital gains.
Marketability and liquidity are better. A life insurance policy is property
and can be transferred or mortgaged. Loans can be raised against the
policy.
t enhances the existing standards of living.
t helps people live financially solvent lives.
Life insurance is a way of life.
(ey &enefits of Life Insurance
Life insurance, especially tailored to meet your financial needs
Need for &ife Insurance
Today, there is no shortage of investment options for a person to choose from.
Modern day investments include gold, property, fixed income instruments,
mutual funds and of course, life insurance. Given the plethora of choices, it
becomes imperative to make the right choice when investing your hard-earned
money. Life nsurance is a unique investment that helps you to meet your dual
needs - saving for life's important goals, and protecting your assets.

Let us look at these unique benefits of life insurance in detail.
Asset Protection
From an investor's point of view, an investment can play two roles - asset
appreciation or asset protection. While most financial instruments have the
underlying benefit of asset appreciation, life insurance is unique in that it gives
the customer the reassurance of asset protection, along with a strong element
of asset appreciation.

The core benefit of Life nsurance is that the financial interests of one's family
remain protected from circumstances such as loss of income due to critical
illness or death of the policyholder. Simultaneously, insurance products also
have a strong inbuilt wealth creation proposition. The customer therefore
benefits on two counts and life insurance occupies a unique space in the
landscape of investment options available to a customer.
'oal (ased sa"in%s
Each of us has some goals in life for which we need to save. For a young,
newly married couple, it could be buying a house. Once, they decide to start a
family, the goal changes to planning for the education or marriage of their
children. As one grows older, planning for one's retirement will begin to take
precedence.

Clearly, as your life stage and therefore your financial goals change, the
instrument in which you invest should offer corresponding benefits pertinent to
the new life stage.

Life Insurance is the only investment option that offers specific products
tailormade for different life stages. t thus ensures that the benefits offered to
the customer reflect the needs of the customer at that particular life stage, and
hence ensures that the financial goals of that life stage are met.

The table below gives a general guide to the plans that are appropriate for
different life stages.

Life !tage "rimary )eed Life Insurance "roduct
Young & Single Asset creation Wealth creation plans
Young & Just
married
Asset creation &
protection
Wealth creation and mortgage
protection plans
Married with kids
Children's education,
Asset creation and
protection
Education insurance, mortgage
protection & wealth creation plans
Middle aged with
grown up kids
Planning for
retirement & asset
protection
Retirement solutions & mortgage
protection
Across all life-
stages
Health plans Health nsurance

*&8,CTI5,! *4 ',!,A'C9
The objectives of research are as follows:-
To study the investment plans offered by CC.
To study the investment plans offered by other competitive companies
like HDFC, NG Vyasa and Reliance Life nsurance etc.
To carry out comparison of insurance investment plan of ICICI
"rudential Life Insurance with other companies.
To compare the market share of CC with respect to other private
players.
',!,A'C9 M,T9*-*L*.:
Research comprises defining and redefining problems, formulating hypothesis
or suggested solution collecting, organizing and evaluating data, making
deductions and reaching conclusion and at last carefully testing the conclusion
to determine whether they fit the formulating hypothesis.
The manipulation of things, concepts, or symbols for the purpose of
generalizing to extend, correct or verify knowledge, whether that knowledge
aids in construction of theory or in the practice of art.
The research methodology used in this project is comparative research.
)omparati"e esearch
Comparative research, simply put, is the act of comparing two or more things
with a view to discovering something about one or all of the things being
compared. This technique often utilizes multiple disciplines in one study.
have used this as this includes the comparison of different plans with respect
to investment plan of ICICI "rudential Life Insurance.
-ata source: Data collection is a technique through which data can be
collected within minimum cost and with greater reliability.

Data can be collected from two sources:
i) Primary data
ii) Secondary data
The data collected for my project is only from secondary data from the Unit
Manager and the websites of corresponding companies.
$amplin% Plan
!ampling techni;ue: simple random sampling
n statistics, a simple random sample is a group of subjects (a sample) chosen
from a larger group (a population). Each subject from the population is chosen
randomly and entirely by chance, such that each subject has the same
probability of being chosen at any stage during the sampling process. This
process and technique is known as Simple Random Sampling.
n this project we have taken the population size of 12 companies.
The sample size selected is 6.
LIT,'AT%', ',5I,+
With over a billion people, ndia is fast becoming a global economic power.
With a relatively youthful population, ndia will become an attractive insurance
market over the next decades. This review examines the ndian insurance
industry. t starts by examining the details of the regulatory regime that existed
before independence. This is important because the culmination of the
nsurance Act of 1938 became the backbone of the current legislation in place.
t highlights the importance of the rural sector where the majority of the
ndians still live. t shows how the recent privatization is playing out in the
market. Based on recent economic estimates, the review provides projections
of segments of the market for 2025.
An Analysis of the E"olution of Insurance in India
ndia had the nineteenth largest insurance market in the world in 2003. Strong
economic growth in the last decade combined with a population of over a
billion makes it one of the potentially largest markets in the future. nsurance in
ndia has gone through two radical transformations. Before 1956, insurance
was private with minimal government intervention. n 1956, life insurance was
nationalized and a monopoly was created. n 1972, general insurance was
nationalized as well (endnote 1). But, unlike life insurance, a different structure
was created for the industry. One holding company was formed with four
subsidiaries. As a part of the general opening up of the economy after 1992, a
Government appointed committee recommended that private companies
should be allowed to operate. t took six years to implement the
recommendation. Private sector was allowed into insurance business in 2000.
However, foreign ownership was restricted. No more than 26% of any company
can be foreign-owned.
n what follows, we examine the insurance industry in ndia through different
regulatory regimes. A totally regulation free regime ended in 1912 with the
introduction of regulation of life insurance. A comprehensive regulatory scheme
came into place in 1938. This was disabled through nationalization. But, the
nsurance Act of 1938 became relevant again in 2000 with deregulation. With a
strong hint of sustained growth of the economy in the recent past, the ndian
market is likely to grow substantially over the next few decades.
nsurance business was conducted in ndia without any specific regulation for
the insurance business. They were subject to ndian Companies Act (1866).
After the start of the "Be ndian Buy ndian Movement (called Swadeshi
Movement) in 1905, indigenous enterprises sprang up in many industries. Not
surprisingly, the Movement also touched the insurance industry leading to the
formation of dozens of life insurance companies along with provident fund
companies (provident fund companies are pension funds). n 1912, two sets of
legislation were passed: the ndian Life Assurance Companies Act and the
Provident nsurance Societies Act. There are several striking features of these
legislations. First, they were the first legislations in ndia that particularly
targeted the insurance sector. Second, they left general insurance business out
of it. The government did not feel the necessity to regulate general insurance.
Third, they restricted activities of the ndian insurers but not the foreign insurers
even though the model used was the British Act of 1909.
One holding company was formed with four subsidiaries. As a part of the
general opening up of the economy after 1992, a Government appointed
committee recommended that private companies should be allowed to operate.
t took six years to implement the recommendation. Private sector was allowed
into insurance business in 2000. However, foreign ownership was restricted.
No more than 26% of any company can be foreign-owned.
Comprehensive insurance legislation covering both life and non-life business
did not materialize for the next twenty-six years. During the first phase of these
years, Great Britain entered World War . This event disrupted all legislative
initiatives. Later, ndians demanded freedom from the British. As a concession,
ndia was granted "home rule through the Government of ndia Act of 1935. t
provided for Legislative Assemblies for provincial governments as well as for
the central government. But supreme authority of promulgated laws still stayed
with the British Crown.
The only significant legislative change before the nsurance Act of 1938 was
Act XX of 1928. t enabled the Government of ndia to collect information of
1) ndian insurance companies operating in ndia
2) Foreign insurance companies operating in ndia
3) ndian insurance companies operating in foreign countries
The last two elements were missing from the 1912 nsurance Act. nformation
thus collected allows us to compare the average size face value of ndian
insurance companies against their foreign counterparts. n 1928, the average
policy value of an ndian company was 619 US dollars against 1,150 US
dollars for foreign companies (Source: ndian nsurance Commissioner's
Report, 1929, p. 23).

Foreign insurance companies were doing well during that period. n 1938, the
average size of the policy sold by ndian companies has fallen to 532 US
dollars (in comparison with 619 US dollars in 1928) and that of foreign
companies had risen somewhat to 1, 188 US dollars (in 1928, the average size
was 1,150 US dollars).
The Birth of the Insurance Act* +,-.
n 1937, the Government of ndia set up a consultative committee. Mr. Sushil
C. Sen, a well known solicitor of Calcutta, was appointed the chair of the
committee. He consulted a wide range of interested parties including the
industry. t was debated in the Legislative Assembly. Finally, in 1938, the
nsurance Act was passed. This piece of legislation was the first
comprehensive one in ndia. t covered both life and general insurance
companies. t clearly defined what would come under the life insurance
business, the fire insurance business and so on (see Appendix 1). t covered
deposits, supervision of insurance companies, investments, commissions of
agents, directors appointed by the policyholders among others. This piece of
legislation lost significance after nationalization. Life insurance was
nationalized in 1956 and general insurance in 1972 respectively. With the
privatization in the late Twentieth Century, it has returned as the backbone of
the current legislation of insurance companies. All legislative changes are
enumerated in Table.
When the market was opened again to private participation in 1999, the earlier
nsurance Act of 1938 was reinstated as the backbone of the current legislation
of insurance companies, as the nsurance Regulatory and Development
Authority Act of 1999 was superimposed on the 1938 nsurance Act. This
revival of the Act has created a messy problem. The nsurance Act of 1938
explicitly forbade financial services from the activities permitted by insurance
companies.
By 1956, there were 154 ndian life insurance companies. There were 16 non-
ndian insurance companies and 75 provident societies were issuing life
insurance policies. Most of these policies were centered in the cities (especially
around big cities like Bombay, Calcutta, Delhi and Madras).
Milestones of Insurance 'egulations in the <0th Century
:ear !ignificant 'egulatory ,ent
1912 The ndian Life nsurance Company Act
1928 ndian nsurance Companies Act
1938
The nsurance Act: Comprehensive Act to regulate insurance business in
ndia
1956
Nationalization of life insurance business in ndia with a monopoly
awarded to the Life nsurance Corporation of ndia
1972
Nationalization of general insurance business in ndia with the formation
of a holding company General nsurance Corporation
1993 Setting up of Malhotra Committee
1994 Recommendations of Malhotra Committee published
1995 Setting up of Mukherjee Committee
1996
Setting up of (interim) nsurance Regulatory Authority (RA)
Recommendations of the RA
1997 Mukherjee Committee Report submitted but not made public
1997
The Government gives greater autonomy to Life nsurance Corporation,
General nsurance Corporation and its subsidiaries with regard to the
restructuring of boards and flexibility in investment norms aimed at
channeling funds to the infrastructure sector
1998
The cabinet decides to allow 40% foreign equity in private insurance
companies-26% to foreign companies and 14% to Non-resident ndians
and Foreign nstitutional nvestors
1999
The Standing Committee headed by Murali Deora decides that foreign
equity in private insurance should be limited to 26%. The RA bill is
renamed the nsurance Regulatory and Development Authority Bill
1999 Cabinet clears nsurance Regulatory and Development Authority Bill
2000
President gives Assent to the nsurance Regulatory and Development
Authority Bill
In"estment e%imes
nvestment regimes in insurance in ndia have always had quantitative
restrictions. Current legal requirements are explained in Table 2 for life
business. At least half of the investment has to be either directly in government
securities (bonds) or for infrastructure investments (which also take the form of
government bonds). These investment options are "safe as they are fully
backed by the government. Of course, it also means they earn the lowest rate
of return in the ndian market. The government (both at the federal and state
levels) has used insurance business as a way of raising capital. Unfortunately,
much of it has been spent on consumption expenditure leading to substantial
increase in government debt.
Inestment 'egulation of Life &usiness
Type of Inestment "ercentage
Government Securities 25%
Government Securities or other approved securities

(including () above)
Not less than
50%
Approved nvestments as specified in Schedule
nfrastructure and Social Sector:
Explanation: For the purpose of this requirement,
nfrastructure and Social Sector shall have the meaning as
given in regulation 2(h) of nsurance Regulatory and
Development Authority (Registration of ndian nsurance
Companies) Regulations, 2000 and as defined in the
nsurance Regulatory and Development Authority (Obligations
of nsurers to Rural and Social Sector) Regulations, 2000
respectively
Not less than
15%
Others to be governed by Exposure/ Prudential Norms
specified in Regulation 5
Not exceeding
20%
V
Other than in Approved nvestments to be governed by
Exposure/ Prudential Norms specified in Regulation 5
Not exceeding
15%
Source: Gazette of ndia Extraordinary Part Section 4. nsurance Regulatory
and Development Authority (nvestment) Regulations, 2000
I)-%!T': "'*4IL,
With an annual growth rate of 15-20% and the largest number of life insurance
policies in force, the potential of the ndian insurance industry is huge. Total
value of the ndian insurance market (2004-05) is estimated at Rs. 450 billion
(US$10 billion). According to government sources, the insurance and banking
services' contribution to the country's gross domestic product (GDP) is 7% out
of which the gross premium collection forms a significant part. The funds
available with the state-owned Life nsurance Corporation (LC) for investments
are 8% of GDP.
Till date, only 20% of the total insurable population of ndia is covered under
various life insurance schemes, the penetration rates of health and other non-
life insurances in ndia is also well below the international level. These facts
indicate the of immense growth potential of the insurance sector.
The year 1999 saw a revolution in the ndian insurance sector, as major
structural changes took place with the ending of government monopoly and the
passage of the nsurance Regulatory and Development Authority (RDA) Bill,
lifting all entry restrictions for private players and allowing foreign players to
enter the market with some limits on direct foreign ownership.

Though, the existing rule says that a foreign partner can hold 26% equity in an
insurance company, a proposal to increase this limit to 49% is pending with the
government. Since opening up of the insurance sector in 1999, foreign
investments of Rs. 8.7 billion have poured into the ndian market and 21
private companies have been granted licenses.
nnovative products, smart marketing, and aggressive distribution have
enabled fledgling private insurance companies to sign up ndian customers
faster than anyone expected. ndians, who had always seen life insurance as a
tax saving device, are now suddenly turning to the private sector and snapping
up the new innovative products on offer.
The life insurance industry in ndia grew by an impressive 36%, with premium
income from new business at Rs. 253.43 billion during the fiscal year 2004-
2005, braving stiff competition from private insurers. This report, "ndian
nsurance ndustry: New Avenues for Growth 2012, finds that the market
share of the state behemoth, LC, has clocked 21.87% growth in business at
Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still
not enough to arrest the fall in its market share, as private players grew by
129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04.
Though the total volume of LC's business increased in the last fiscal year
(2004-2005) compared to the previous one, its market share came down from
87.04 to 78.07%. The 14 private insurers increased their market share from
about 13% to about 22% in a year's time. The figures for the first two months of
the fiscal year 2005-06 also speak of the growing share of the private insurers.
The share of LC for this period has further come down to 75 percent, while the
private players have grabbed over 24 percent.
There are presently 12 general insurance companies with four public sector
companies and eight private insurers. According to estimates, private
insurance companies collectively have a 10% share of the non-life insurance
market.

"riate "layer of Life Insurance
1. CC Prudential Life nsurance
2. HDFC Standard Life
3. SB Life nsurance
4. Birla Sunlife
5. Bajaj Allianz Life
6. Aviva Life nsurance
7. Kotak Mahindra Life nsurance
8. Tata AG Life
9. Reliance Life nsurance Company Limited
10. NG Vyasya Life nsurance
11. Metlife ndia Life nsurance
12. Max New York Life nsurance
13. Shriram Life nsurance
14. Bharti AXA Life nsurance Company Limited

Types of Insurance on The Basis of Business Point of /iew
i) Life nsurance
ii) General nsurance
i# Life Insurance:
Life nsurance is universally acknowledged to be an institution which eliminates
'risk' and provides the timely aid to the family in the unfortunate event of death
of the breadwinner.
Life nsurance is a contract for payment of a sum of money to the person
assured (or nominee) on the happening of the event insured against. The
contract provides for the payment of premium periodically to the nsurance
Company by the assured.
The contract provides for the payment of an amount on the date of maturity or
at specified dates at periodic intervals or at unfortunate death, if it occurs
earlier.
ii# .eneral Insurance:
General insurance business refers to fire, marine, and miscellaneous
insurance business whether carried on singly or in combination with one or
more of them, but does not include capital redemption business and annuity
certain business. [According to Sec. 3(g) of the General nsurance business
(Nationalization) Act, 1972].
Features of ndian General nsurance Market:
1. Low market penetration.
2. Ever-growing middle class component in population.
3. Growth of consumer movement with an increasing demand for better
insurance products.
4. nadequate application of information technology for business.
5. Adequate fillip from the Government in the form of tax incentives to the
insured, etc.
6. ndia is one of the least insured countries but the potential for further
growth is phenomenal.
7. Rates of claim settlement were earlier in ndia the highest in the world,
70 per cent in general insurance, compared to around 40 per cent
internationally.
8. Non-life premium has a 0.71 per cent share of GDP.
9. General nsurers (Private Companies) have earned around Rs.1000-cr
income.
10. Half of the current demand for comes from the corporate segment.
Benefits of 'eneral Insurance:
1. nsurance is the instrument of Security, saving and peace of mind. t
provides several benefits by paying a small amount of premium to an
insurance company.
2. Safeguards one's assets.
3. Peace of mind-in case of financial loss.
4. Encourage saving.
5. Tax rebate.
6. Protection from the claim made by creditors.
7. Security against a personal loan, housing loan or other types of loan.
Products of 'eneral Insurance
The Assurance Company Ltd. and the United ndia nsurance Company. The
Government of ndia subscribed to the capital of GC. GC, in turn, subscribed
to the capital of the four companies. All the four companies are government
companies registered under the Companies Act. GC is into the reinsurance
business whereas its subsidiaries are into the insurance of Non Life products.
"roduct 'ange
i# Motor Insurance:
Motor insurance is mandatory for all vehicles in ndia. There are two types of
motor insurance
Third Party- only insures the party (parties) other than the owner in an
incident.
Comprehensive- that insures the owner as well as the third party
involved. The premium for motor Vehicles is decided on the value of the
vehicle and location where it is to be registered. The premium for heavy
commercial vehicle is decided on the value of the vehicle and gross
laden weight.
ii# Property Insurance:
Property insurance covers land, building and the contents of the building.
iii# Bur%lary:
Burglary insurance covers all losses arisen out of burglary committed in one's
premises.
i"# 0ire Insurance:
Fire nsurance is a Comprehensive policy. This policy besides covering loss on
account of fire also covers loss on account of the following Earthquake, Riots,
Strikes, Malicious intent, Floods.
"# Health Insurance:
Health insurance polices ensure guarding ones health against any calamities
that may cause long term harm to his/her life and can hamper ones earning
available for ability for a lifetime. These health policies are individuals and
groups.
"i# &ia(ility Insurance:
This policy indemnifies the Directors or Officers or other professionals against
loss arising from claims made against them by reason of any wrongful Act in
their Official capacity.
"ii# 1arine Insurance
Cargo in transit
Cargo declaration Policy
Marine Hull nsurance: nland vessels ocean going vessels, fishing &
sailing vessels, freight at risk, construction of ships, voyage insurance of
various vessels, ship breaking, insurance Awaiting break up, nsurance
Oil & Energy in respect of onshore & offshore risks including construction
risk.
"iii# Tra"el Policy:
Any tourist may die or loss their baggage's, passport etc. while traveling. Travel
policies are designed to care of all the problems that generally occur while
traveling.
ix# Business policy:
A Business policy covers the risks of loss of business goods, plant and
machinery etc.
x# 2ther 'eneral Policy:
Apart from other main general nsurance there are several others
General polices and more are going to introduce, such as:
Bhagyashree Child Welfare Policy-covers girl child in the age group of 0
to 18 years.
Raj Rajeshwari Mahila Kalyan Vojans.
Crop nsurance Scheme.
Jald Rahat Yojana.
!+*T A)AL:!I! *4 I)!%'A)C, !,CT*'
$tren%ths:
i# Consumer .rieance 'edressal
The nsurers have to face the redressal of the consumers, grievances for
deficiency in products and services. The nsurance Regulatory Development
Authority (RDA), the regulatory body has already appointed Ombudsman for
looking into the grievances of the policyholders. His judgment will be binding
on the insurers. Further under Consumer Protection Act, 1986, the consumer
courts are operating at the district, state and national levels. This is a major
strength from the consumer point of view as they could easily fight for their
rights.
ii# 'ural customers are a must
As per the regulator RDA, all the companies incorporated should at least do
5% of its business in the rural parts of the country. f not, the regulator would
not allow the company to function anywhere within the country. So this is a
great advantage for not only the rural population but also the newly formed
companies since most of the revenue could be earned from the rural ndia.
iii# Channels
nsurance companies are getting savvy. Enhanced marketing thus is crucial.
Already, many companies have full operation capabilities over a 12-hour
period. Facilities such as customer service center are already into 24-hour
mode. These will provide services such as motor vehicle recovery. Technology
also plays an important role in the market.
Weakness:
i# )e# insurers
The new insurers will have to invest a minimum capital of Rs. 100 crores. The
normal gestation period is of 5 years. The generation of profit normally starts in
the sixth year. Hence the new insurers have to lock up their capital for at least
5 years.
ii# *utdated products
Today, LC has more than 60 products and GC has more than 180 products to
offer in the market. But most of them are outdated, as they are not suitable to
the needs of the consumers. Hence old as well as new insurers have to offer
innovative products to the consumers and bringing more products would
require good amount of capital investment.
2pportunities:
i# 5ast country
ndia is a vast country with more than 5, 76,000 villages having a population of
at least 500-600 per village. The companies could recognize the fact that if it
takes the whole zilla as one, it would consist a population more than 5000-
10000. One zilla could give them a good amount of business. The company
could have this opportunity and tap it and reap revenues.
ii# 8o3 opportunities
Since the sector has opened up, many new companies have already started its
operation and few are just about to begin, Major areas of employment in this
sector are the agents. A company can appoint any number of agents anywhere
within the country on commission basis. Moreover, the professional staff and
the peons and clerks' appointment also increase. Thus this sector has
tremendous scope on employment.
Threats:
i# Lac$ of a#areness
Very soon the market will be flooded by a large number of products by a fairly
large number of insurers operating in the ndian market. Even with limited
range of products offered by LC and GC, there is chaos as far as the
consumers are concerned. Their confusion will further increase in the face of a
large number of products in the market. The existing level of awareness of the
consumers for insurance products is very low. This is because only 62% of the
population of ndia is literate and only 10% are well educated. Even the
educated consumers are ignorant about the various products of insurance.
With new companies coming in the market, the products would be
comparatively more, which would again create confusion in the minds of the
customers so as to which policy best suits the needs.
Insurance 'egulatory and -eelopment Authority Act= 1>>> ?I'-A@
ndian parliament passed RDA in the year 1999. t is headed by the chairmen.
t was setup on interim RDA for monitoring &controlling of the insurance
business. RDA was sole authority responsible for awarding of licenses. There
is no restriction for new licenses & no composite licenses for life & non life
business. RDA has some restriction for new licenses such like new player
should commence its business within 15-18 month. Shares are not allowed to
transfer without approval.
This Act was passed by Parliament in December 1999 and it received
presidential assent in January 2000. This Act provides for the establishment of
the Authority to protect the interest of holders of insurance policies, to regulate,
promote and ensure orderly growth of insurance industry and for matters
connected therewith or incidental thereto. t amended the nsurance Act, 1938,
which has been noted above. t also amended the Life nsurance Corporation
Act, 1956 and the General nsurance Business (Nationalization) Act, 1972,
thus opening up the insurance sector to private participation.
Under this Act, an authority called RDA has been established. This is a
corporate body established for the purpose and objects as set out in the
explanation to the title. The "Authority" replaces "Controller" under nsurance
Act 1938. The first schedule amends nsurance Act 1938. t states that if
"Authority" is superseded by the Central Government, the "Controller of
nsurance" may be appointed till such time as "Authority" is reconstituted.
n line with the economic reforms that were ushered in ndia in early nineties,
the Government set up a Committee on Reforms (popularly called the Malhotra
Committee) in April 1993 to suggest reforms in the insurance sector. The
Committee recommended throwing open the sector to private players to usher
in competition and bring more choice to the consumer. The objective was to
improve the penetration of insurance as a percentage of GDP, which remains
low in ndia even compared to some developing countries in Asia. Reforms
were initiated with the passage of nsurance Regulatory and Development
Authority (RDA) Bill in 1999. RDA was set up as an independent regulatory
authority, which has put in place regulations in line with global norms. So far in
the private sector, 12 life insurance companies and 9 general insurance
companies have been registered.
&ottlenec$s .oernment 'egulations
The RDA bill proposes tough solvency margins for private
insurance firms, a 26% cap on foreign equity and a minimum capital
of Rs 100crores for life and general insurance and Rs 200crores for
reinsurance firms section 27A of insurance Act stipulates that LC is
required to invest 75% of its accretions through a controlled fund in
mandated government securities LC may invest the remaining 25% in
private corporate sector, construction and acquisition of immovable
assets besides sanctioning of loans to policy holder.
These stipulations imposed on the insurance companies had resulted in
lack of flexibility in the optimization of risk and profit portfolio. f this
inflexibility continues the insurance companies will have very little
leverage to earn more on their investments and they might not be able
to offer as flexible products as offered abroad.
The government might provide more autonomy to ;insurance
companies by allowing them to invest 50% of their funds as per
their own discretions.
Recently RB has issued stiff guidelines which had death a severe blow
to the plans of banks and financial institutions to enter the insurance
sector. t says that non performing assets ( NPA) levels of the
prospective l players will have to be 1% point lower than the industry
average (presently 7.5%).
RB has also stipulated that all prospective entrants need to have a net
worth of Rs 500crores. These guidelines have made it virtually
impossible for many banks to get into the insurance business. Also
banks and F who are planning to enter the business cannot float
subsidiaries for insurance.
RB has taken too much caution to make sure that the news sector
does not experience the kind of ups and downs that the non bank
financial sector has experienced in the recent past. They had to
rethink about these guidelines if ndia strong banks and financial
institutions have to enter the new business. The insurance employees
union is offering stiff resistance to any private entry.
ICICI "rudential Life Insurance
C*M"A): "'*4IL,
"'*4IL, *4 ICICI "rudential Life Insurance Company

0act sheet
The Company
ICICI "rudential Life Insurance Company is a joint venture between CC
Bank, a premier financial powerhouse, and prudential plc, a leading
international financial services group headquartered in the United Kingdom.
CC Prudential was amongst the first private sector insurance companies to
begin operations in December 2000 after receiving approval from nsurance
Regulatory Development Authority (RDA).

CC Prudential Life's capital stands at Rs. 42.72 billion (as of June 30, 2008)
with CC Bank and Prudential plc holding 74% and 26% stake respectively.
For the quarter ended June 30, 2008, the company garnered Retail Weighted
New Business Premium of Rs. 1,174 crores as against Rs 810 crores for the
quarter ended June 30, 2007, thereby posting a growth of 45% and has
underwritten over 6 lakh policies over this period. The company has assets
held over Rs. 30,600 crore as on August 31, 2008.

CC Prudential Life is also the only private life insurer in ndia to receive a
National nsurer Financial Strength rating of AAA (nd) from Fitch ratings. The
AAA (nd) rating is the highest rating, and is a clear assurance of CC
Prudential's ability to meet its obligations to customers at the time of maturity
or claims.

For the past seven years, CC Prudential Life has retained its leadership
position in the life insurance industry with a wide range of flexible products that
meet the needs of the ndian customer at every step in life.
!istri(ution
CC Prudential Life has one of the largest distribution networks amongst
private life insurers in ndia. t has a strong presence across ndia with over
2000 branches (includung 1,095 micro-offices) and an advisor base of over
261,000 (as on August 31, 2008).

The company has 24 bancassurance partners having tie-ups with CC Bank,
Bank of ndia, South ndian Bank, Shamrao Vitthal Co-Op Bank, Jalgaon
Peoples Co-op Bank, Ernakulam District Co-op Bank, dukki District Co-op
Bank, Ratnagiri Sindhudurg Gramin Bank, Solapur Gramin Bank, Wainganga
Kshetriya Gramin Bank, Aryawart Gramin Bank, Jharkhand Gramin Bank,
Narmada Malwa Gramin Bank, Baitarani Gramya Bank, Ratnagiri District
Central Co-op Bank, Seva Vikas Co-op Bank, Sangli Urban Co-Operative
Bank, Baramati Co-operative Bank, Ballia Kshetriya Co-Operative Bank, The
Haryana State Co-Operative Bank, Renuka Nagrik Sahakari Bank, Amanath
Co-Operative Bank, Arvind Sahakari Bank, Bhandara Urban Co Operative
Bank
Promoters
ICICI &an$
CC Bank Limited (NYSE:BN) is ndia's largest private sector bank and the
second largest bank in the country, with consolidated total assets of $121
billion as of September 30 , 2008. CC Bank's subsidiaries include ndia's
leading private sector insurance companies and among its largest securities
brokerage firms, mutual funds and private equity firms. CC Bank's presence
currently spans 19 countries, including ndia.
"rudential "lc
Established in London in 1848, Prudential plc, through its businesses in the
UK, Europe, US, Asia and the Middle East, provides retail financial services
products and services to more than 21 million customers, policyholder and unit
holders and manages over 256 billion of funds worldwide (as of June 30,
2008). n Asia, Prudential is the leading Europe-based life insurer with life
operations in China, Hong Kong, ndia, ndonesia, Japan, Korea, Malaysia, the
Philippines, Singapore, Taiwan, Thailand, and Vietnam. Prudential is one of the
largest asset management companies in terms of overall assets sourced in
Asia ex-japan, with 34.3 billion funds under management (as of June 30,
2008) and operations in ten markets including China, Hong Kong, ndia, Japan,
Korea, Malaysia, Singapore, Taiwan, Vietnam and United Arab Emirates
1ana%ement Team
The ICICI "rudential Life Insurance Company Limited Management team
comprises reputed people from the finance industry both from ndia and
abroad.
Ms. Shikha Sharma, Managing Director & CEO
Mr. N. S. Kannan, Executive Director
Mr. Bhargav Dasgupta, Executive Director
Ms. Anita Pai, Executive Vice President Customer Service & Technology
Dr. Avijit Chatterjee, Appointed Actuary
Mr. Puneet Nanda, Executive Vice President & Chief nvestment Officer
Board of !irector
The ICICI "rudential Life Insurance Company Limited Board comprises
reputed people from the finance industry both from ndia and abroad.

Mr. K.V. Kamath, Chairman
Ms. Chanda Kochhar, Director
Mr. Barry Stowe, Director
Mr. Adrian O'Connor, Director
Prof. Marti G. Subrahmanyam, Director
Mr. Mahesh Prasad Modi, Director
Ms. Rama Bijapurkar, Director
Mr. Keki Dadiseth, Director
Ms. Shikha Sharma, Managing Director
Mr. N.S. Kannan, Executive Director
Mr. Bhargav Dasgupta, Executive Director
I)I)I Prudential 1arket $hare ises To 3-4
New Delhi, January 17: : ICICI "rudential Life Insurance hiked its market
share to 42.72 per cent in the October-November period last year, up from
37.92 per cent in first quarter and 38.85 per cent in the second quarter of the
current fiscal.
ts total share of the Rs 439.2-crore premium collected by private players
during the April-November period stood at 39.66 per cent. ts aggregate
estimated premium income amounted to Rs 174.2 crore as at the end of
November. According to CC officials, while the premium mop-up by private
companies in April-June 2002 was about Rs 117 crore, the corresponding
figures for the July-September and October-November periods were Rs 201.3
crore and Rs 120.8 crore. Out of this, CC's premium income stood at Rs 44.4
crore, Rs 78.2 crore and Rs 51.6 crore, respectively.
They cited rda statistics saying the total premium income of the life sector was
Rs 1,191 crore in April-June, 2002, and Rs 3,512.8 crore uptil September.
Performance $ummary
"erformance !ummary as on *cto3er 31= <00A

!cheme
Annualised
'eturns ?3
years@
Annualised
'eturns
?!ince
Inception@
Inception
-ate
Preserver * 8.22% 7.19% 17 May 04
Protector @ 5.72% 7.60% 16 Nov 01
Balancer # 8.20% 13.40% 16 Nov 01
Maximiser $ 9.86% 21.27% 16 Nov 01
Pension Preserver * 8.20% 7.08% 17 May 04
Pension Protector @ 6.01% 6.58% 31 May 02
Pension Balancer # 8.41% 13.48% 31 May 02
Pension Maximiser $ 9.84% 22.97% 31 May 02
nvestShield Cash @ 6.70% 6.26% 03 Jan 05
nvestShield Life ^ 8.70% 8.53% 03 Jan 05
nvestShield Pension ^ 8.50% 8.59% 03 Jan 05
New nvest Shield # NA 4.91% 21 Aug 06
Flexi Growth ** NA -11.40% 20 Mar 07
Pension Flexi Growth ** NA -13.68% 20 Mar 07
Flexi Balance ^^ NA -5.27% 20 Mar 07
Pension Flexi Balance ^^ NA -2.24% 20 Mar 07
Performance "5s Benchmark

1arket 2"er"iew
(ey Mar$et Leels ?as on *cto3er 31= <00A@
(ey 'ates Current
*ne Buarter
Ago
*ne year
Ago
WP nflation 10.68% 11.98% 3.07%
Ten Year Government Security 7.50% 9.32% 7.84%
(semi annual)
5 year AAA rated Corporate Bond
(annualised)
11.60% 10.90% 9.20%
$-Re exchange rate 49.46 42.57 39.32
BSE 100 4953.98 7488.48 10391.19
Awards 6 eco%nitions
CC Prudential Life won the UK Trade & nvestment ndia Business Awards
2008 in the Business Partnership Award-Large Company category
ndia's Most Customer Responsive nsurance Company Avaya Global Connect
- Economic Times. Customer Responsiveness Awards, 2007
Best Life nsurer 2003. Outlook Money Awards 2003 & 2004
/ision 6 /alues
*ur ision:
To be the dominant Life, Health and Pensions player built on trust by world-
class people and service. This we hope to achieve by:
Understanding the needs of customers and offering them superior
products and service
Leveraging technology to service customers quickly, efficiently and
conveniently
Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policyholders
Providing an enabling environment to foster growth and learning for our
employees
And above all, building transparency in all our dealings

The success of the company will be founded in its unflinching commitment to 5
core values -- ntegrity, Customer First, Boundaryless, Ownership and Passion.
Each of the values describe what the company stands for, the qualities of our
people and the way we work.

We do believe that we are on the threshold of an exciting new opportunity,
where we can play a significant role in redefining and reshaping the sector.
Given the quality of our parentage and the commitment of our team, there are
no limits to our growth.
*ur alues:
Every member of the CC Prudential team is committed to 5 core values:
ntegrity, Customer First, Boundaryless, Ownership, and Passion. These
values shine forth in all we do, and have become the keystones of our
success.
Products
CC Prudential has a wide array of insurance plans that have been designed
with the philosophy that different individuals are bound to have differing
insurance needs.
The ideal insurance plan is one that addresses the exact insurance needs of
the individual that will depend on the age and life stage of the individual apart
from a host of other factors.
Life Insurance India= 9ealth Insurance= 'etirement !olutions
Brochures
1 Cancer Care
2 Cancer Care Plus
3 CashBak
4 Crisis Cover
5 Diabetes Care
6 Diabetes Assure
7 DiabetesCare Active
8 ForeverLife
9 HealthAssure Plus
10 Hospital Care
11 mmediate Annuity
12 nvestShield CashBak
13 nvestShield Life New
14 LifeGuard
15 LifeLink Super Pension
16 LifeLink Super
17 LifeStage RP
18 LifeStage Assure
19 LifeTime Gold
20 LifeTime Plus
21 LifeStage Pension
22 LifeTime Super Pension
23 MediAssure
24 PremierLife Gold
25 PremierLife Pension
26 Pure Protect
27 SmartKid New ULRP
28 SmartKid New ULSP
29 SmartKid RP
30 Save'N'Protect
Life Insurance "lans
Life insurance products assure your family will receive financial support, even
in your absence. Put simply, when you buy insurance you provide your family
with a sum of money, should something happen to you. t thus permanently
protects your family from financial crises.

n addition to serving as a protective cover, when you buy insurance you create
a flexible money-saving scheme, which empowers you to accumulate wealth to
buy a new car, get your children educational solutions, and even retire
comfortably.

Today, there is no shortage of investment options for a person to choose from.
Given the plethora of choices, it becomes imperative to make the right choice
when investing your hard-earned money, and online insurance is an ideal
choice in today's technology driven world. Buying Life insurance online is a
way to make a unique investment that helps you to meet your dual needs -
saving for life's important goals, and protecting your assets.

From an investor's point of view, an investment can play two roles - asset
appreciation or asset protection. While most financial instruments have the
underlying benefit of asset appreciation, buying life insurance online gets you
the unique reassurance of asset protection, along with a strong element of
asset appreciation.

When you buy life insurance online the core benefit is that the financial
interests of one's family remain protected from circumstances such as loss of
income due to critical illness or death of the policyholder. Simultaneously,
buying life insurance online gives a strong inbuilt wealth creation proposition.
The customer therefore benefits on two counts and online insurance products
occupy a unique space in the landscape of investment options available to a
customer.

As your life stage and therefore your financial goals change, the instrument in
which you invest should offer corresponding benefits pertinent to the new life
stage. Online insurance products are the only investment option that offer
specific products tailor-made for different life stages. You are thus ensured that
the benefits offered to the customer reflect the needs of the customer at that
particular life stage, and hence ensures that the financial goals of that life stage
are met.

On the basis of which life stage you are in and the corresponding insurance
needs, CC Prudential plans can be categorized into the following four types:
Education nsurance Plans
Wealth Creation Plans
Premium Guarantee plans
Protection Plans
9ealth Insurance
Health insurance policies insure you against several illnesses and guarantee
you stay financially secure should you ever require treatment. They safeguard
your peace of mind, eliminate all worries about treatment expenses, and allow
you to focus your energy on more important things, like getting better. Let's
learn more about the various types of health insurance available, and what the
best policy for you might be. Health nsurance policies in ndia - An Overview
There is several health insurance or medical insurance plans in ndia. These
can be divided into the following categories based on the coverage offered:

9ospitaliCation "lans: These health insurance plans cover your expenses in
case you need to be hospitalized. Within this category, products may have
different payout structures and limits for various heads of expenditure. The
hospitalisation coverage may be reimbursement based plans or fixed benefit
plans. These plans aim to cover the more frequent medical expenses. Click to
know about our hospitalisation insurance plan (Hospital Care)

Critical Illness "lans: These health insurance plans provide you coverage
against critical illnesses such as heart attack, organ transplants, stroke, and
kidney failure among others. These plans aim to cover infrequent and higher
ticket size medical expenses. Click to know about our critical illness plans
(Crisis Cover, Health Assure Plus)

!pecific Conditions Coerage : These plans are designed specifically to offer
health insurance against certain complications due to diabetes or cancer. They
may also include features such as disease management programs which are
specific to the condition covered. Click to know more about our diabetes
(Diabetes Care, Diabetes Care Plus, Diabetes Assure) and cancer (Cancer
Care, Cancer Care Plus) suite of products.
Health Solutions
9ealth Assure "lus: Health Assure is a regular premium plan which
provides long term cover against 6 critical illnesses by providing
policyholder with financial assistance, irrespective of the actual medical
expenses. Health Assure Plus offers the added advantage of an
equivalent life insurance cover.
Cancer Care: is a regular premium plan that pays cash benefit on the
diagnosis as well as at different stages in the treatment of various cancer
conditions.
Cancer Care "lus: is a wellness plan that includes all the benefits of
Cancer Care and also provides an additional benefit of free periodical
cancer screenings.
-ia3etes Care: Diabetes Care is a unique critical illness product
specially developed for individuals with Type 2 diabetes and pre-
diabetes. t makes payments on diagnosis on any of 6 diabetes related
critical illnesses, and also offers a coordinated care approach to
managing the condition. Diabetes Care Plus also offers life cover.
-ia3etes Care "lus: is a unique insurance policy that provides an
additional benefit of life cover for Type 2 diabetics and pre-diabetics
9ospital Care: is a fixed benefit plan covering various stages of
treatment - hospitalisation, CU, procedures & recuperating allowance. t
covers a range of medical conditions (900 surgeries) and has a long term
guaranteed coverage upto 20 years.
Crisis Coer: is a 360-degree product that will provide long-term
coverage against 35 critical illnesses, total and permanent disability, and
death.
MediAssure: is a health insurance policy that provides assured
insurability till age 75 years, assured coverage for accepted pre-existing
illnesses after 2 years and an assured price for 3 years.
Education Insurance Plans
One of your most important responsibilities as a parent is to ensure that your
child gets the best possible education that can be provided.
CC Prudential offers a wide portfolio of education insurance plans that are
designed to provide peace of mind to you, as a parent, that your child's
education will be secure. These plans ensure that money is made available at
the crucial junctures in a child's education - Class X, Class X, graduation and
post-graduation - to fund crucial commitments for the child's future.
mportantly, education insurance plans ensure that in the unfortunate event of
the death of a parent, the child's education continues unhampered.
Under the education insurance plans platform, CC Prudential brings the
following products to you. Please click on the product name to know more
about the plans.
"lan )ame "lan Type
SmartKid New Unit-linked Unit Linked
Regular Premium Unit Linked
SmartKid New Unit Linked
Single Premium Unit Linked
SmartKid Regular Premium Traditional
$a"in%s 6 Wealth )reation $olutions
Save'n'Protect is a traditional endowment savings plan that offers life
protection along with adequate returns.
CashBak is an anticipated endowment policy ideal for meeting milestone
expenses like a child's marriage, expenses for a child's higher education
or purchase of an asset. t is available for terms of 15 and 20 years.
LifeTime Gold is a unit-linked plan that offers customers the flexibility and
control to customize the policy to meet the changing needs at different
life stages. t offers 7 fund options - Preserver, Protector, Balancer, Flexi
Balanced Multiplier, R..C.H and Flexi Growth.
LifeStage RP is unit linked plan that provides you with an option of
lifecycle-based portfolio strategy that continuously re-distributes your
money across various asset classes based on your life stage. This will
help you achieve the right Asset Allocation to meet your desired financial
goals.
LifeLink Super is a single premium unit linked insurance plan which
combines life insurance cover with the opportunity to stay invested in the
stock market.
Premier Life Gold is a limited premium paying plan specially structured
for long-term wealth creation.
nvestShield 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.
nvestShield Cashbak is a unit linked plan that provides premium
guarantee on the invested premiums along with flexible liquidity options.
LifeStage Assure a unit linked insurance plan that provide upto 450 % of
first year premium guarantee on maturity, with the additional advantage
of a lifecycle based portfolio strategy that allocates the investor's money
across various asset classes based on his life stage and risk appetite.
etirement $olutions
ForeverLife is a traditional retirement product that offers guaranteed returns for
the first 4 years and then declares bonuses annually.
LifeTime Super Pension is a regular premium unit linked pension plan
that helps one accumulate over the long term and offers 5 annuity
options (life annuity, life annuity with return of purchase price, joint life
last survivor annuity with return of purchase price, life annuity guaranteed
for 5, 10 and 15 years & for life thereafter, joint life, last survivor annuity
without return of purchase price) at the time of retirement.
LifeStage Pension is a regular premium unit linked pension plan that
provides you with a unique lifecycle-based strategy that continuously re-
distributes your money across various asset classes based on your life
stage, eventually providing you with a customized retirement solution.
LifeLink Super Pension is a single premium unit linked pension plan.
mmediate Annuity is a single premium annuity product that guarantees
income for life at the time of retirement. t offers the benefit of 5 payout
options.
PremierLife Pension is a unique and convenient retirement solution with
a limited premium paying term of three or five years, to suit professionals
and businessmen, especially those who require more flexibility and
customization while planning their finances.
Premium 'uarantee Plans
The latest addition to the life insurance product portfolio of CC Prudential is
the Premium Guarantee plan - nvestShield Life New. Premium Guarantee
plans are the ideal insurance-cum-investment option for customers who want
to enjoy the potentially higher returns of a market linked instrument, but without
taking any market risk.
Under the Premium Guarantee Plans platform, CC Prudential brings to you
the following products:
"lan )ame "lan Type
nvestShield Life New Unit Linked
nvestShield CashBak Unit Linked
Protection Solutions
LifeGuard is a protection plan, which offers life cover at low cost. t is
available in 3 options - level term assurance, level term assurance with
return of premium & single premium.
HomeAssure is a mortgage reducing term assurance plan designed
specifically to help customers cover their home loans in a simple and
cost-effective manner.
'roup Insurance Plans
One Sure Shot Way For An Employer To Retain His Team. Employees these
days are constantly on the prowl for "better opportunities". How then do you
get them to focus on your job and stay committed for long tenures?
Human Resource experts agree that employees work with utmost dedication
when they believe their organization truly cares about their wellbeing.
One way of showing your concern for your employees is to shoulder the two
responsibilities they worry about most: Security of and Savings for their
families.
Group nsurance Plans from CC Prudential enable you to effortlessly provide
your employees with both, savings and security, so they can pass on the
benefits to their loved ones.
Your kind gesture to safeguard their family's future will undoubtedly serve as
great encouragement for your employees, and they will gladly offer you their
whole-hearted commitment. Top 3 Reasons Why You Should nvest n CC
Prudential's Group nsurance Plans With CC Prudential's Group nsurance
Plans your employees get:
ncomparable financial benefits that guarantee their safety and financial
stability.
Sound financial planning that empowers them to meet their changing
financial objectives.
Quality service initiatives and transparency across all operations.
'roup Insurance $olutions

CC Prudential Life also offers Group nsurance Solutions for companies
seeking to enhance benefits to their employees.
Group Gratuity Plan: CC Prudential Life's group gratuity plan helps
employers fund their statutory gratuity obligation in a scientific manner
and also avail of tax benefits as applicable to approved gratuity funds.
Group Superannuation Plan: CC Prudential Life offers a flexible market
linked scheme that provides substantial benefits to both employers and
employees. Both defined contribution (DC) and defined benefit (DB)
schemes are offered to optimise returns for members of the trust and
rationalise cost. Members have the option of choosing from various
annuity options or opting for a partial commutation of the annuity at the
time of retirement.
Group mmediate Annuities: CC Prudential Life realises the importance
of prudent retirement planning. With this in mind, we have developed a
suite of annuity products that not only give you an income for life but also
provide you options to match your needs. n addition to the annuities
offered to existing superannuation customers, we offer immediate
annuities to superannuation funds not managed by us.
Group Term Plan: CC Prudential Life's flexible group term solution
helps provide an affordable cover to members of a group. The cover
could be uniform or based on designation/rank or a multiple of salary.
The benefit under the policy is paid to the beneficiary nominated by the
member on his/her death.
0lexi(le ider 2ptions

CC Prudential Life offers flexible riders, which can be added to the basic
policy at a marginal cost, depending on the specific needs of the customer.

1. Accident & disability benefit: f death occurs as the result of an accident
during the term of the policy, the beneficiary receives an additional
amount equal to the rider sum assured under the policy. f an accident
results in total and permanent disability, 10% of rider sum assured will be
paid each year, from the end of the 1st year after the disability date for
the remainder of the base policy term or 10 years, whichever is lesser. f
the death occurs while travelling in an authorized mass transport vehicle,
the beneficiary will be entitled to twice the sum assured as additional
benefit.
2. Critical llness 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.
3. Waiver of Premium: n case of total and permanent disability due to an
accident, the future premiums continue to be paid by the company till the
time of maturity. This rider is available with SmartKid, LifeTime Plus,
LifeTime Super and LifeTime Super Pension.
4. ncome benefit rider: n case of death of the life assured during the term
of the policy, 10% of the sum assured is paid annually to the nominee on
each policy anniversary till the maturity of the rider.
Types of Insurance "lans D Traditional or %nit Lin$ed ?%LI": %nit Lin$ed
Insurance "lan@
Insurance Plans 7 At a %lance
Broadly, insurance plans can be distinctly divided into ULP (Unit Linked
nsurance Plans) and traditional plans. A brief detail of both segments:
%LI"s ?%nit Lin$ed Insurance "lans@
ULPs, or Unit Linked nsurance Plans, have gained high acceptance due to
the attractive features they offer. Benefits include flexibility, Transparency,
Liquidity, and Fund Options.

4le6i3ility

A ULP offers the customer an acute degree of flexibility: the flexibility to
choose the Sum Assured, and to choose the desired premium amount. ULPs
give the customer the option of changing the level of Premium/Sum Assured
even after the plan has started, and the flexibility to change asset allocation by
switching between funds with ease.

Transparency

ULPS offer a high degree of transparency, where all charges in the plan as
well as the entire net amount invested is made known to the customer. ULPs
also offer the convenience of tracking your investment performance on a day to
day basis, so you can decide instantly where you want your assets allocated.

Li;uidity

A ULP offers you the option of withdrawing money a few years into the plan,
allowing for the exigencies of life. Alternatively, a ULP will also allow for
partial/systematic withdrawal should the need arise.
4und *ptions

A ULP will offer you a wide choice of funds, ranging through equity, debt, cash,
or a combination of the three. The customer is also afforded the option of
choosing your fund mix based on your desired asset allocation.
Traditional "lans
These are the oldest types of insurance plans available. These plans cater to
customers with a low risk appetite. Some of the common features of traditional
plans are:
1. Steady nvestment
Major chunk of investible funds are in debt instruments.
Steady and almost assured returns over the long term.
2. Features
Death benefit is Sum Assured + guaranteed & vested bonus.
Helps in asset creation as they are for a long tenure.
Premium to Sum Assured ratios are fixed for each plan and age.
Generally withdrawals are not allowed before maturity.
!ection A0CCC
-,-%CTI*) I) ',!",CT *4 C*)T'I&%TI*) T* C,'TAI) ",)!I*)
4%)-!
(1) Where an assesses being an individual has in the previous year paid or
deposited any amount out of his income chargeable to tax to effect or
keep in force a contract for any annuity plan of Life nsurance
Corporation of ndia for receiving pension from the fund referred to in
clause (23AAB) of section 10, he shall, in accordance with, and subject
to, the provisions of this section, be allowed a deduction in the
computation of his total income, of the whole of the amount paid or
deposited (excluding interest or bonus accrued or credited to the
assessee's account, if any) as does not exceed the amount of ten
thousand rupees in the previous year.
(2) Where any amount standing to the credit of the assessee in a fund,
referred to in sub-section (1) in respect of which a deduction has been
allowed under sub-section (1), together with the interest or bonus
accrued or credited to the assessee's account, if any, is received by the
assessee or his nominee-
a. On account of the surrender of the annuity plan whether in
whole or in part, in any previous year, or
b. As pension received from the annuity plan, an amount equal to
the whole of the amount referred to in clause
(a) or clause
(b) shall be deemed to be the income of the assessee or his
nominee, as the case may be, in that previous year in which
such withdrawal is made or, as the case may be, pension is
received, and shall accordingly be chargeable to tax as income
of that previous year.
(3) Where any amount paid or deposited by the assessee has been taken
into account for the purposes of this section, a rebate with reference to
such amount shall not be allowed under section 88.
!ection A0-
A0-/ -eduction in respect of medical insurance premia
(1) n computing the total income of an assessee, there shall be deducted at
the following rates, such sum as is specified in sub-section (2) and paid
by him by cheque in the previous year out of his income chargeable to
tax, namely:-
. in a case where such sum does not exceed in the aggregate ten
thousand rupees, the whole of such sum; and
. in any other case, ten thousand rupees.
Provided that where the sum specified in sub-section (2) is paid to effect or to
keep in force an insurance on the health of the assesses, or his wife or her
husband or dependent parents or any member of the family in case the
assessee is a Hindu undivided family, and who is a senior citizen, the
provisions of this section shall have effect as it for the words "ten thousand
rupees", the words "fifteen thousand rupees" had been substituted;
(2) The sum referred to in sub-section (1) shall be the following, namely:
. where the assesses is an individual, any sum paid to effect or to
keep in force an insurance on the health of the assessee or on the
health of the wife or husband, dependent parents or dependent
children of the assesses;
. where the assesses is a Hindu undivided family, any sum paid to
effect or to keep in force an insurance on the health of any member
of the family:
(3) Provided that such insurance shall be in accordance with a scheme
framed in this behalf by-
. the General nsurance Corporation of ndia formed under section 9
of the General nsurance Business (Nationalisation) Act, 1972 (57
of 1972) and approved by the Central Government in this behalf; or
. any other insurer and approved by the nsurance Regulatory and
Development Authority established under sub-section (1) of section
3 of the nsurance Regulatory and Development Authority Act, 1999
(41 of 1999).
Explanation.-For the purpose of this section, "senior citizen" shall have the
meaning assigned to it in the Explanation to section 80DDB.
!ection A0C
Up to a limit of Rs 1 lakh, the money that you invest in these products is
deductible which means that you don't have to pay income tax on it. Thus if
you are in the 30 per cent tax bracket and you invest the maximum allowed
you save Rs 30,000 in taxes.
There are a wide range of investments you can make to claim the Section 80C
benefit. To keep things simple we will focus on two categories: Small savings
schemes and ELSS (equity linked savings schemes). Other 80C products
include your provident fund, the repayment of principal on your home loan and
your life insurance premium.
$mall sa"in%s schemes
These include the public provident fund (PPF) and National Savings Certificate
(NSC). They offer a return of around 8 to 8.5 per cent which is quite low
compared to typical returns in equity products. Furthermore, there is a
relatively long lock-in period, 15 years for the PPF and 6 years for the NSC.
Their main advantage is that they offer a guaranteed return unlike equity-based
products.
E8uity linked sa"in%s schemes
These are basically mutual funds which are specially created to provide tax
benefits. As with regular mutual funds there is no guaranteed return and you
can lose money in a period of falling stock prices as has happened in the first
half of 2008. However, ELSS usually provides a higher return than small
savings schemes and also a lower lock-in period of three years.
Examples of ELSS include Franklin ndia Taxshield and HDFC Taxsaver. As
with regular mutual funds, these schemes pursue a range of investment
strategies: For instance, some may focus on large cap stocks while others may
focus on small and mid cap stocks. t makes sense to invest in more than one
scheme to diversify some of your risk.
1akin% a choice
How do you decide to allocate your Rs 1 lakh 80C limit? This will depend on
your other financial decisions; for example whether you have taken a home
loan or purchased life insurance. As to the decision between small savings
schemes and ELSS two of the most important factors are your attitude to risk
and inflation.
As recent months have shown so clearly, stock markets are a lot riskier than
small savings schemes. However, the flip side is that riskier investments like
stocks offer a higher rate of return particularly over the long run. From the
perspective of a young investor who may not need most of her/his investment
money till retirement it probably makes sense to tilt towards riskier assets.
The other important consideration when evaluating returns is to adjust for
inflation.
n other words, if your investment generates a return of 8 per cent and inflation
is 7 per cent, then your inflation-adjusted return is only one per cent. When
inflation moves into double digits you are actually making a negative inflation-
adjusted return, as is happening currently. This is a fundamental problem with
any investment product that offers a fixed return at a time of high and rising
inflation.
By contrast stocks are a better hedge against inflation especially in the long
run. Though inflation increases the costs of firms it also allows them to charge
a higher price to their customers thereby protecting profits to some extent. This
in turn means that stock prices and equity-based products can offer better
protection from inflation over a number of years though not necessarily in the
short run.
What about the element of timing when it comes to equity schemes? For
instance, stocks have clearly taken a pounding in the last six months. However
this doesn't necessarily mean it's a bad time to invest in stocks; valuations in
some companies look quite attractive now and over a three-year horizon you
could see decent returns.
From the point of view of the average investor it's probably best to take timing
out of the picture by following a systematic investment plan which means you
invest a fixed amount every month.
Small savings schemes and ELSS each have their advantages and
disadvantages. Based on your investment strategy and particularly your
attitude towards risk you have to choose how much to invest in them as part of
your Section 80C investments.
,6planation of Ta6 &enefits
Premiums paid for Life insurance - Deduction under Section 80C
1) Category of assesses allowed deduction: ndividual assessee and Hindu
Undivided Family assesses.
2) Eligible Savings: Premiums paid or deposited by assessee to effect or to
keep in force insurance on the life of following persons:
n case of individual assessee Himself/Herself, spouse, children
of such individual
n case of HUF assessee any member
3) 20% limit: f the amount of premium paid in a financial year for a policy is
in excess of 20% of the actual capital sum assured, then deduction will
be allowed only for premiums upto 20% of the sum assured.
4) Limit on amount of deduction: Deduction will be restricted to investments
upto Rs 100,000 in savings specified under Section 80C (including life
insurance premiums). f any investments have been made under Section
80CCC and 80CCD, then the qualifying amount under Section 80C will
stand reduced to that extent.
"remiums paid for "ension plans D !ection A0CCC
1) Permitted Deduction: Section 80CCC allows for deduction of premiums
paid under a pension plan. As per this Section, premiums paid upto Rs
10,000 (till FY 2005-06) & Rs. 1 Lakh (from FY 2006-07) by an individual
is allowed as deduction from his total income.
2) Disallowance: This benefit will be reversed if the policy lapses / is
cancelled.
3) Limit: t may be noted that from FY2005-06, the limit of deduction under
Section 80CCC will be part of the overall limit prescribed under Section
80CCE.
4) Receipt under Policy: Amounts received on surrender (whole/part) of
annuity plan, amounts received as Pension is taxed as income.
"remiums paid for medical insurance D !ection A0-
1) Category of assesses allowed deduction: ndividual assessee and Hindu
Undivided Family assesses.
2) Eligible premiums: Premiums paid by assessee by any mode other than
cash out of his taxable income to effect or to keep in force an insurance
on the health of following persons:
n case of individual assessee Himself/Herself, spouse,
dependant children and parents. The condition of dependency of
parent has been removed from FY 2008-09. n other words, even if
the parent is independent, the individual can pay the premia and
claim the deduction.
n case of HUF assessee any member of HUF
3) Deduction and upper limit: The qualifying amounts under Section 80D for
self, spouse and dependent children is upto Rs. 15,000/- and additional
deduction upto Rs. 15,000/- for the parents (from FY 2008-09 onwards).
However, a higher amount of upto Rs 20,000/- is permitted if the person,
for whose health insurance the premium was paid, was aged 65 years or
more at any time during the financial year in which the premium was
paid. Such amounts of premium paid would be allowed as deduction from
the total income of the assessee.

*erall deduction limit D !ection A0CC,

A new Section 80CCE has been inserted from FY2005-06. As per this section,
the maximum amount of deduction that an assessee can claim under Sections
80C, 80CCC and 80CCD will be limited to Rs 100,000.
&enefits under insurance policy D !ection 10?10-@
As per Section 10(10D) of ncome tax Act, 1961, any sum received under a life
insurance policy, including the sum allocated by way of bonus on such policy is
exempt from tax.
However, this rule does not apply to following amounts:
sum received under Section 80DD(3), or
any sum received under a Keyman nsurance Policy, or
any sum received other than as death benefit under an insurance policy
which has been issued on or after April 1 2003 and if the premium paid in
any of the years during the term of the policy is more than 20% of the
sum assured.
Ta6 'ates for Indiiduals
The rates of incomeDta6 for 4: <00AD0>

Total Income ?'s/@
'ate of Ta6
!enior CitiCen
+omen 3elo#
EF years
*thers
Upto Rs 150,000/- Nil Nil Nil
Above Rs 150,000/- to
180,000/-
Nil Nil 10%
Above Rs 180,000/- to
225,000/-
Nil 10% 10%
Above Rs 225,000 to Rs
300,000
10% 10% 10%
Above Rs 300,000 to Rs
500,000
20% 20% 20%
Above Rs 500,000/- 30% 30% 30%

!urcharge on Income Ta6:

n case where the Total ncome exceeds Rs 10,00,000, there would be a
surcharge @ 10%.Marginal relief is available to assessee whose income just
exceeds Rs. 10,00,000.

,ducation Cess on Income Ta6

Edcuation Cess @2% will be payable on the amount of income tax (including
surcharge).

!econdary & 9igher ,ducation Cess on Income Ta6

Additional Education Cess @1% will be payable on the amount of ncome tax
(ncluding surcharge).
Wai"er of Premium ider 9W2P#
On total and permanent disability due to an accident, all future premiums for
both the base policy and rider(s) will be waived till the end of the term of the
rider or death of the life assured, if earlier.
Waiver of Premium rider is available with LifeTime Super,LifeTime
Plus,LifeTime Super Pension, Smart Kid New ULRP, Life Guard ROP, Life
Guard WROP.
Premiums paid under this rider are eligible for tax benefits under Section 80C.
Tools 2"er"iew
Asset Allocator
Are you an aggressive investor who wants to ride the equity markets? Or are
you more conservative, comfortable investing in assured return products? Go
through our Risk Analyzer to find out what your asset allocation should be,
keeping in mind your risk capacity and your risk behavior.
Inflation ,rosion inde6
nflation can easily erode the corpus that we set aside for our post-retirement
needs. This erosion happens due to the fact that our corpus might not earn an
interest that keeps pace with rising costs.
To find out how inflation will impact your expenses in the future, use our
inflation index calculator to find out how your current expenses will grow in the
future. You need to enter your current expense figures in the nflation ndex
Calculator, your expected rate of inflation, and the no. of years in the future you
will incur the expense.
"o#er of Compounding
The most powerful boost your money can get is time. nvested properly over a
long period of time, money can grow to many times its original amount - the
longer the tenure of investment, the greater will be the corpus amount.
The name of the game is to invest early and to invest regularly. To further gain
an understanding of this concept, try doing your own experiments with our
!imple Compounding Calculator/
9uman Life 5alue Calculator
nvestment in insurance is an essential requirement for one's financial planning
to be complete. However, the quantum of insurance that one needs is a
function of one's income, assets, liabilities and future goals.
Use the Life Value Calculator to find out how much insurance cover is needed
by you.
Life !tage "rofiler
The 'Wheel of Fortune' is an interactive game developed by CC Prudential to
help you chose the ideal insurance solution. Based on your responses to
certain key questions, we will recommend a suite of products that will address
your financial and insurance needs.
Procedure to o(tain life insurance
Filling up the proposal form
The first step in the process is to fill up the proposal form where in various
kinds of details the proposer furnishes. The form can be obtained from the LC
office or will be available with insurance agent. The following details are
furnished in the proposal form:
1) Name, address, nationality, occupation, nature of duties, name; and address
of the present employer, length of service, name and address of previous
employer, if any, length of previous service, etc.
2) Place of birth, date of birth, district, state, proof of age, etc.
3) Sum insured, period of premium payable (monthly, quarterly, half-yearly or
yearly), and amount of first premium payable.
4) Objectives of insuring.
5) Name, age, and relationship of nominee, full address, height and weight.
6) Family history of parents, sisters and brothers.
7) Hereditary disease like diabetes, insanity, epilepsy, gout, asthma,
tuberculosis, cancer, leprosy, etc.
8) Any other disease, accident, operation, etc.
9) n the case of female adult proposerfurther information regarding
pregnancy, maternity and disturbances indicative of trouble with the female
generative organs. The female proposer have to furnish further information
relating to educational qualification, average monthly income, source of
income, marital status, husband's name, his income, occupation, and his
insurance policy, etc.
Declaration by the proponent
At the end, the proponent has to make a declaration that the statements given
in the proposal are correct to the best of his knowledge and no information is
concealed. The proposal is the basis of insurance contract when it is presented
to the LC.
Attachment of proof of age
Age proof is identified from the secondary school leaving certificate. Attested
copy of this certificate is attached with the proposal form for this purpose. Age
proof is also required to ascertain whether the proposer is a major or a minor.
Moreover, age proof is also needed for determining the premium rate.
Presentation of proposal to the agent
The agent, on receipt of the proposal check it thoroughly whether any
important information is left out without furnishing-. f anything is left out. he will
get the same furnished by the proposer.
n practice, it is noticed that the agent carries the proposal form and
approaches the prospective proposer and get the same furnished with his help.
Medical examination
The insurance agent arranges for the medical examination of the proposer.
Medical examination is conducted by the authorized medical practioner
appointed by the LC. The doctor records his remarks in the proposal form at
the place provided for this purpose.
n the following cases/ medical examination is not needed:
1) Where the age of the male proposer is below 30 years, educated and
remained in employment for at least one year. ts sum assured is below
Rs 40/000/-.
2) Where the proposer is a commissioned officer in Army service and below
45 years of age. His health is in 'A' category and sum assured is below
Rs. 50.000/-.
3) Where the proposer is a woman leading a first life category and passed
high school or equivalent, age is below 30 years and employed at least a
period of one year. The a sum assured is below Rs 40/000/-
4) An adult member below the age of 40 years and the sum assured is
below Rs. 15/000.
5) n the case of re-insurance of a person who has already insured.
Report by the Agent
After the medical report, the agent gives his confidential report with regard to
proposer's health condition, habits, family history source of income, etc. He
gives his report after verifying information furnished by the proposer. The agent
also will state his opinion regarding acceptance or rejection of the proposal.
Scrutiny of proposal by the branch office
On completion of all the above stated process, the proposal together with the
medical report and agent confidential report, etc. is submitted to the concerned
branch office. The branch office then arrange for verification in respect of:
1) Name and address of the proposer
2) Date of birth
3) Occupation
4) nsured sum
5) Nominee
6) Signature of the proposes
7) Family history
8) Medical report and agent's report
After the verification, if any short comings are noticed, the proposer is asked to
complete the same. f the proposal is found in order, the branch office takes the
further steps in the matter.
Depositing of premium
The branch office issues first premium notice to the proposer. On depositing
the premium money, the branch takes further steps in the matter.
Registration of proposal
On depositing the premium, the proposal is registered with the LC, in the
register maintained for this purpose by recording important information about
the policy; such as the name of insured, sum insured, duration of the policy,
risk, etc. At the time of registration, a registration number is allotted
incorporating the code number of the branch where the proposal is registered.
For example, if the registration No. 345678, 678 will be the code number of the
branch and 345 shall be the proposal number of that branch.
Sending the proposal to appropriate department
After the registration of the proposal, it is sent to the appropriate department. n
case the final authority is in the branch office, the proposal shall be sent to that
officer in the branch office. Otherwise, it is sent to the divisional office.
Taking final decision on the proposal
On completion of all these steps, the final decision taken by the authority in the
divisional office, on "Proposal Review Slip, in view of acceptance of the
propose premium paid.
ssue of acceptance or request letter
f the proposal is accepted, the intimation regarding acceptance of the
proposal is sent to the proposer. Otherwise, a letter of regret is sent.
Acceptance of the proposal is an evidence of conclusion of insurance contract.
From this date the risk commences.
ssue of insurance policy
Having completed all the required formalities/ the corporation prepares the
insurance policy and sends it to the insured. The overleaf of the policy contains
all terms and conditions of the policy along with the insured's name, address,
sum assured, mode of payment of premium, etc. The policy bear the sea' of
the LC and the signature of the competent authority.
-ATA A)AL:!I!
Comparison of All The Life Insurance Companies on The &asis *f:

Market Share
Premium Collected
No. Of Policies sold
*) T9, &A!I! *4 MA'(,T !9A',:
Following given is the percent share of market of various insurance companies:
"ercent share of mar$et
)AM, *4 T9, "LA:,' MA'(,T !9A', ?G@
LC 82.3
CC PRUDENTAL 5.63
BRLA SUNLFE 2.56
BAJAJ ALLANZ 2.03
SB LFE 1.80
HDFC STANDARDLFE 1.36
TATA AG 1.29
MAX NEW YORK 0.90
AVVA 0.79
OM KOTAK MAHNDRA 0.51
NG VYASA 0.37
AMP SANMAR 0.26
METLFE 0.21
Graph Showing Percent of Market Share

2n the Basis of Premium )ollected:
The life nsurance industry underwrote a premium of Rs.8,13,014.01 lakh
during the month of March 2005, taking the cumulative premium underwritten
during the current year 2004-05 to Rs.25,34,287.67 lakh. The #1 private Life
nsurance Company i.e. ICICI "rudential Life Insurance contributed Rs.1,
58,408 (6.25 %) followed by Bajaj Allianz which contributed Rs.86, 001.80
Lakh (3.39%).
Amount of premium collected 3y diff/ companies
)ame of the company "remium collected ?<00HD0F@
Bajaj Allianz 86001.80
NG Vysya 28162.46
AMP Sanmar 9118.44
SB Life 48293.56
Tata AG 30022.07
HDFC Standard Life 48615.08
CC Prudential 158408.46
Birla Sun life 62128.31
AVVA 19229.27
Kotak Mahindra 37475.21
Max New York 22469.01
Met Life 5603.71
Sahara Life 167.09
Graph Showing Percent of Premium Collected
2n The Basis of No: of Policies $old:
CC Prudential firmly holds the number one position by selling 614673
policies in the year 2004-05 followed by Tata AG (228894 policies).
)o of policies sold 3y diff/ companies
)ame of the company "olicies !old in <00HD0F
Bajaj Allianz 28819
NG Vysya 111141
AMP Sanmar 35268
SB Life 129974
Tata AG 228894
HDFC Standard Life 206320
CC Prudential 614673
Birla SunLife 198370
AVVA 83209
Kotak Mahindra 63468
Max New York 216671
Met Life 46682
Sahara Life 10214
Graph Showing No. of Polices Sold By Diff. Companies
+hat Is Inestment "lan2
Broadly, insurance plans can be distinctly divided into ULPs (investment plan)
and traditional plans. A brief detail of both segments:
%nit Lin$ed Insurance "roduct
Unit linked insurance products are also called investment plans.
A common objection to life insurance is that the returns are not good. Although
life insurance is not an investment and the criterion of return or yield is
inappropriate, the concern is real, particularly in the context of inflation. The
sum assured, considered adequate today, may have a much lower value on
maturity, after say 20 or 25 years. This applies to all types of savings and not
only to life insurance. n the case of stocks, the return or appreciation is looked
upon as compensation for such losses.
The Unit Trust of ndia has Unit Linked nsurance Plan (1971). This plan is
designed for any resident of ndia between the ages of 12 and 55 planning to
save between Rs. 6000 and Rs. 75000, to be contributed in half-yearly or
annul installments over a period of 10 or 15 years. Persons over 55 years can
go in for a 10 year plan. No medical examination is necessary. A small part of
the contribution is utilized for providing life cover and the balance is invested in
units. n case the person dies before the end of the plan period, the legal heirs
will be entitled to the units to his credit and the amount of the insurance cover.
Unit-Linked policies offered by L..C., under the brand name Bima Plus, is a
plan of this nature. t offered a choice of three funds (Secured, Balanced and
Risk) with different risk profiles, depending on the different patterns of
investment in equities, debts and liquid assets. The policyholder was allocated
units, which were valued every week.
ULPs have gained high acceptance due to attractive features they offer. These
include.
1. 4le6i3ility
Flexibility to choose Sum Assured
Flexibility to choose premium amount
Option to change level of Premium /Sum Assured even after the
plan has started.
Flexibility to change asset allocation by switching between funds
2. Transparency
Charges in the plan & net amount invested are known to the
customer
Convenience of tracking one's investment performance on a daily
basis.
3. Li;uidity
Option to withdraw money after few years (comfort required in case
of exigency)
Low minimum tenure
Partial / Systematic withdrawal allowed

4. 4und *ptions
A choice of funds (ranging from equity, debt, cash or a combination)
Option to choose your fund mix based on desired asset allocation
%LI" Mania
These plans are also called "unbundled were very popular the years when
stock market was booming. However when the reverse trend happened, the
effects of loss of capital could not be avoided. The security offered by the
traditional insurance plans seemed more attractive. Some plans offered a
minimum guarantee (of return). But at the time of falling interest rates, the floor
(guaranteed) levels could not be sustained and the insurers were compelled to
replace existing plans with new ones that guarantee at lower levels. This had
happened in 2002 with some of the L..C.'s plan. Some of them that
guaranteed returns were withdrawn.
According to insurance advisors and investment experts, a casual approach
towards ULPs could prove risky. "t's an insurance product that provides a host
of investment options. Most financial experts have issues with its lack of
transparency, and with the huge deductions from the premium in the initial
years. f you still want to go ahead, do sobut go in with your eyes wide
open, says an investment expert.
Traditional "lans
These are the oldest types of plans available. These plans cater to customers
with a low risk appetite. Some of the common features of traditional plans are:
1. Steady nvestment
Major chunk of investible funds are in debt instruments
Steady and almost assured returns over the long term
2. Features
Death benefit is Sum Assured + guaranteed & vested bonus
Helps in asset creation as they are for a long tenure
Premium to Sum Assured ratios are fixed for each plan and age.
Generally withdrawals are not allowed before maturity.

A(out life time super
+hy LifeTime !uper
As an individual who desires a lot from life-a car, a beautiful home and of
course, the comfort and contentment of your family-you would undoubtedly
want to plan your finances such that you can take care of all your
requirements.
nvest in CC Prudential's LifeTime Super policy-a regular-premium unit-
linked policy, which offers potentially higher returns that systematically enable
you to meet your long-term financial objectives. n addition, LifeTime Super
also provides the protective benefit of an insurance cover, which keeps your
family secure, always.
Lifetime Super At A Glance
Minimum/Maximum Entry Age 0 years to 65 years
Maximum Age at Policy Maturity 75 years
Minimum/Maximum Policy Term 10 years to 75 years
Premium Payment Frequency Monthly, half-yearly, yearly
Minimum Premium Rs. 18,000 per annum
Minimum Sum Assured Annual Premium x Term/2. Subject to a
minimum of Rs. 1,00,000
Tax Benefit (8)
Premium paid for the policy and critical
illness benefit rider will be eligible for tax
benefit under Sec. 80C and 80D
respectively. Any amount paid to you will be
eligible for tax benefits under Sec. 10 (10D)
as per prevailing ncome Tax laws.
0eatures And Benefits 2f &ifetime $uper
4le6i3le policy term:
Decide for how long you want your policy. You can invest for a minimum of 10
years and a maximum of 75 years.
3 choices of premium payment:
Opt to pay the premium on a monthly, bi-annual or an annual basis.
E inestment funds:
Select among Flexi-Growth, Maximiser, Flexi-Balanced, Balancer, Protector,
and Preserver, based on your financial goals and risk profile.
!ystematic #ithdra#al of money:
Withdraw money in installments from the 4th year onwards.
Maturity 3enefit:
Receive the Fund Value when your policy matures. Choose to take this value
as a single lump-sum amount or in monthly, bi-annual or annual installments.
-eath 3enefit:
Your family receives the higher of Fund Value or Sum Assured should
something happen to you.
!#itch 3enefit:
Switch between funds anytime to adjust your portfolio, based on your goals
and risk profiles. You can switch funds 4 times a year, at no cost. For
subsequent switches, you will be required to pay a switch fee of Rs. 100.
I)5,!TM,)T "LA)! *4 *T9,' C*M"A)I,! +IT9 +9IC9
C*M"A'I!*) I! -*),
Bajaj Allianz New Unit Gain Plus
Bajaj Allianz New Unit Gain Super
Reliance Market Return Plan
NG High Value Plan
HDFC Unit Linked Endowment Plus
Met Smart Plus
LT! &&a0a0 AllianC )e# %nit .ain "lus
4eatures LT! )e# %nit .ain "lus
Minimum annual
premium
Rs. 18000 pa Rs. 15000 pa
switches
4 switches free in a year &
Rs 100 is charged over 4
switches
Rs. 100 is charged over 3
switches
Policy administration
charges
No charge Rs. 240 pa
Surrender value
At the end of year 3:- 98%
At the end of year3:100%
Additional allocation of
units
Every 4th year starting at
the end of 4th year @4%of
annual premium
Not applicable
Cover continuance
option
Applicable Not applicable
n the above comparison we have seen that life time super have advantage
that it have administration charges less, additional allocation of units, and
cover continuance. And the disadvantage of higher minimum premium and
surrender value is less in first three years.
LT! & &a0a0 AllianC )e# %nit .ain !uper
4eatures LT! )e# %nit .ain !uper
Minimum annual
premium
Rs. 18000 pa Rs. 25000 pa
Can choose different
options:
Silver 25000<=AP<50000
gold 50000<=AP<100000
diamond
100000<=AP<500000
platinum
AP>=500000&above
switches
switches
switches
Policy admin charges No charge Rs. 50 pm
Cover continuance
option
Surrender value
At the end of yr 3:-98%
units
the end of 4th year @4%of
annual premium
Not applicable
Riders ADBR, CBR, WOPR
UL Accidental Death
benefit, UL accidental
permanent Total/Partial
disability, UL critical illness,
UL hospital cash benefit
cover continuance option, higher surrender value. And the disadvantage of
fewer riders option and have six fund investment options.
LT! & 'eliance Mar$et 'eturn "lan
4eatures LT!
'eliance mar$et return
plan
Minimum annual
premium
Rs. 18000 pa
Rs. 10000 for regular
premium and Rs. 25000
for single premium
switches
switches
1 switch free in a year &
switches
Policy admin charges No charge 2%
Surrender value
At the end of year 3:98%
At the end of yr5:100%
At the end of year 3:-
100%
units
Every 4th year starting at the
end of 4th year @4%of
Not applicable
annual premium
Choice of funds 6 fund option available 4 fund options
Cover continuance
option
cover continuance option, choice of fund options are more. And the
disadvantage of higher minimum premium and less surrender value.
LT! & I). 9igh 5alue "lan
4eatures LT! I). 9igh 5alue "lan
Minimum annual premiumRs. 18000 pa Rs. 50000 pa
switches
switches
switches
Policy administration
charges
No charge
At inception: Rs.1000
fixed charges &
Rs.2/Rs.1000SA +Rs. 50
pm
Riders ADBR,CBR,WOPR ADBR
Surrender value
At the end of yr 5:100%
At the end of yr 3:97.5%
At the end of yr 4: 99%
At the end of yr 5: 100%
units
the end of 4th year
@4%of annual premium
Not applicable
Choice of funds 6 fund options 4 fund options
that it have less minimum premium, more switching options, administration
charges less, additional allocation of units, choice of fund options are more and
riders options are more.
LT! & 9-4C %nit Lin$ed ,ndo#ment "lus
4eatures LT!
9-4C %nit Lin$ed
,ndo#ment "lus
Minimum annual
premium
Rs. 18000 pa Rs. 10000 pa
switches
4 switches free in a policy year
& Rs 100 is charged over 4
switches
24 switches free in a policy
year & Rs. 100 is charged
over 24 switches
Policy admin
charges
No charge Rs. 20 pm
Surrender value
At the end of yr 5:100%
Miscellaneous
charges
None
6 free policy services after
that Rs. 250 is charged.
Additional
allocation of units
Every 4th year starting at the
end of 4th year @4%of annual
premium
At the end of every year units
will be increased by 0.1%
Fund
management
charges
Flexigrowth/maximiser:2.25%
Balancer/flexi balancer:2.25%
Protector:1.5%preserver:0.75%
0.80%
that it have less administration charges, miscellaneous charges are not in life
time super. The disadvantage is the minimum premium paid is more, switching
option are less, low surrender value in first three years and fund management
charges are also high.
LT! & Met !mart "lus
4eatures LT! Met !mart "lus
Minimum annual premiumRs. 18000 pa Rs. 12000 pa
Cover continuance option Applicable Not applicable
Policy admin charges No charge Rs. 200 pa
Miscellaneous charge None
Rs. 250 for any alteration
in the contract
Settlement period option
Available upto a period of
5 years
Not applicable
units
Every 4
th
year starting at
the end of 4
th
year @4%of
annual premium
Not applicable
Riders ADBR, CBR, WOPR ADBR and Critical llness
that it have less administration charges, additional allocation of units, no
miscellaneous charges, cover continuance option and riders options are more.
C*)CL%!I*)
From the comparison done of LFE TME SUPER with other investment policy
of other companies we have seen that despite being the most selling
investment plan of ICICI "rudential Life Insurance it is facing the acute
competition form competitors. The main competition to this plan is given by
HDFC Unit Linked Endowment Plus of HDFC and NG High Value Plan of NG
Vysya.
LFE TME SUPER have advantage of less minimum premium, less
administration charges, no miscellaneous charges, switching option are more
and cover continuance option is applicable (which is the important point in
gaining the advantage over other plans).
',C*MM,)-ATI*)!
According to the comparison done we have seen that for gaining advantage
over other plans LFE TME SUPER should have
Less annual premium
Riders option should be more
t should have TOP-UP options as other companies are offering it
Surrender value should be more in initial years also
4uture "ossi3ilities
Job opportunities are likely to increase manifold. The number of people
working in the insurance sector in ndia is roughly the same as in the UK
with a population that is 1/7 ndia's; the US with a population 1/4 the size
of ndia has nearly 4 times the number. n the emerging markets, the
picture is no less encouraging. n S Korea, the no. of full time employees
has more than doubled over a ten year period. Thailand added 50 %
more jobs in four years.
The liberalization of the insurance sector promises several new jobs
opportunities for those employed in the finance sector who are equipped
with degrees in finance. Finance professionals who had witnessed a
slump in the job market would be a much-relieved lot to hear about the
privatization of the insurance sector.
Let us look into the type of jobs that will be created once the private
players come on the scene. Certainly, it won't be far different from the
traditional streams in any other industry. There will be demand for
marketing specialists, finance experts, human resource professionals,
engineers from diverse streams like the petrochemical and power
sectors, systems professionals, statisticians and even medical
professionals. Apart from this, there will be high demand for professionals
in the streams like Underwriting and claims management and actuarial
sciences.
There could be a huge inflow of funds into the country. Given the
industry's huge requirement of start-up capital, the initial years after
opening up are bound to see a strong inflow of foreign capital. Moreover,
given that the break-even, typically, comes much later than in the case of
other sectors, odds are those first remittances of dividend will not happen
before a good 10-15 years.
n the areas of reinsurance, huge capacity is likely to be created with
players like Swiss Re and Munich Re keenly observing the unfolding
saga of liberalization of insurance industry in ndia. Not only the outward
reinsurance will reduce, it is bound to attract inward reinsurance from the
neighboring countries and regions. f the regulator is forward looking and
legislature is supportive, this trend may well lead to the creation of a
Lloyds like market for the direct as well as reinsurance businesses.
However, increased competition is very likely to result in rate reductions
in certain classes of business, but in those areas that have so far been
cross subsidized; an increase in rates may be possible. Overall, the rate
reductions may outweigh the increases, thus bringing down the re-
insurance premium volume available.
Apart from pure re-insurance activities, which is providing insurance
protection, a revolution will come in service related fields like training,
seminars, workshops, know-how transfer regarding risk assessment and
rating, risk inspections, risk management and devising new policy covers,
etc. Also, with more players in the market, there will be significant
increase in advertising, brand building, and keen pricing not ridiculous
pricing and this will benefit whole lot of ancillary industries.
Another effect of de-regulation will be that, projects, especially mega-
projects where one needs the capacities of the international re-insurance
market, will get exposed to international trends to an even greater extent
than is the case today. This will affect rates too. Areas like the personal
lines segment, where we also expect to see substantial growth as also
new types of covers, would usually not be affected by international trends
in the same way as, there is much less need for global re-insurance
support.
Substantial shift in the distribution of insurance in ndia is likely to take
place. Many of these changes will echo international trends. Worldwide,
insurance products move along a continuum from pure service products
to pure commodity products. nitially, insurance is seen as a complex
product with a high advice and service component. Buyers prefer a face-
to-face interaction and place a high premium on brand names and
reliability.
As products become simpler and awareness increases, they become off-
the-shelf, commodity products. Sellers move to remote channels such as
the telephone or direct mail. Various intermediaries, not necessarily
insurance companies, sell insurance. n the UK for example, retailer
Marks & Spencer now sells insurance products. n some countries like
Netherlands and Japan, insurance is marketed using post office's
distribution channels. At this point, buyers look for low price. Brand
loyalty could shift from the insurer to the seller.
n other markets, notably Europe, this has resulted in banc assurance:
banks entering the insurance business. The Netherlands led with
financial services firms providing an entire range of products including
bank accounts, motor, home and life insurance, and pensions. Other
European markets have followed suit. n France over half of all life
insurance sales are made through banks. n the UK, almost 95% of
banks and building societies are distributing insurance products today.
n ndia too, banks hope to maximize expensive existing networks by
selling a range of products. Various seminars and conferences on banc
assurance are taking place and many bankers have clearly shown their
inclination to enter insurance market by leveraging their strengths in the
areas of brand image, distribution network, and face to face contact with
the clients and telemarketing coupled with advanced information
technology systems. The mergers of Citibank with Travelers in USA and
of Winterthur, the largest Swiss Co. with Credit Suisse are recent
examples of the phenomenon likely to sweep ndia too.
nsurers in ndia should also explore distribution through non-financial
organizations. For example, insurance for consumer items such as
refrigerators can be offered at the point of sale. This piggybacks on an
existing distribution channel and increases the likelihood of insurance
sales. Alliances with manufacturers or retailers of consumer goods will be
possible. With increasing competition, they are wooing customers with
various incentives, of which insurance can be one.
Another potential channel that reduces the need for an owned distribution
network is worksite marketing. nsurers will be able to market pensions,
health insurance and even other general covers through employers to
their employees. These products may be purchased by the employer or
simply marketed at the workplace with the employer's co-operation.
Worldwide interest in E-commerce and ndia's predominant position in
information technology and software development is also likely to be a
major factor in the marketing of insurance products in the immediate
future. The internet account is increasing in arithmetic progression and
the trend has already been set by some of the leading insurers and
insurance brokers worldwide.
Finally, some potential ndian entrants into insurance hope to ride their
existing distribution networks and customer bases. For example, financial
organizations like CC, HDFC or Kotak Mahindra intend to tap the
thousands of customers who already buy their deposits, consumer loans
or housing finance. Other hopeful entrants anticipate specific alliances
such as with hospitals to provide health cover.
The huge life fund can be utilized for financing the infrastructure industry as
well as provide support to other industries in the country. Hence, the insurance
industry is likely to play a key role in changing the economic landscape of the
country. However, the success of the insurance industry will primarily depend
upon meeting the rising expectations of the consumer who will be the real king
in the liberalized insurance market in future.
A)),1%',
&rochure of Life Time !uper
&I&LI*.'A"9:
&oo$s:
1. Khan M.Y.; Financial Services
2. Mishra M.N; nsurance Principal & Practice
3. L.M. Bhole; Financial Markets and nstitutions
+e3sites:
1. www.iciciprulife.com
2. www.financialexpress.com
3. www.insuranceguide.com
4. www.irdaindia.com
5. www.insuremagic.com
6. www.indiacore.com
7. www.researchandmarkets.com
8. www.ingvysyalife.com
9. www.hdfcinsurance.com
10. www.reliancelife.co.in
11. www.metlife.com
12. www.allianzbajaj.co.in
By:
Mahiuddin !hams
E-Mail: Mahi.UShams@yahoo.com
Twitter: MahiUShams

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