SUMMER TRAINING PROJECT(SYNOPSIS)

FINANCIAL PLANNING FOR BETTER

FUTURE
Undertaken at

“ Kotak Old Mutual Life Insurance Ltd.”

Submitted in the partial fulfillment for the award of the degree

of
MASTER OF BUSINESS
ADMINISTRATION

Under the Supervision

and Guidance of
Submitted by
Mr. R.K. Sharma(FACULTY GUIDE) Akanksha Jain(05817003909)
INDUSTRIAL GUIDE: MBA 3RD

Mr. Sachin Choudhary

Mr. Gurmeet

SESSION: 2010 - 2011

TECNIA INSTITUTE OF ADVANCED STUDIES

(Approved by AICTE, Ministry of HRD, Govt. of India)
Affiliated To Guru Gobind Singh Indraprastha University, Delhi

1
 INSTITUTIONAL AREA, MADHUBAN CHOWK, ROHINI, DELHI- 110085
E-Mail: director.tecniaindia@gmail.com, Website:
www.tecniaindia.org
Fax No: 27555120, Tel: 27555121-24

INTRODUCTION:
The only thing permanent in life is change. Time changes. People change. So does life.
Every one expect life to be much better tomorrow than it is today. Tomorrow, every one
hope to fulfill all their dreams and aspirations. For this, an effective personal financial
planning is essential for every person. Financial planning includes:-

• Investment Planning: To make wealth grow

• Cash Flow Planning: To provide for assets and meet the periodic cash
requirements
• Tax Planning: To save on taxes and increase income
• Insurance Planning: To protect yourself, family and your assets
• Children's Future Planning: To give children a financially secure future
• Retirement Planning: Because retirement is a time to relax, not to get worried

Future is uncertain. When one is investing, volatility and inflation are part of the
planning. At the child stage and old age stage of life, people need more economic
security and safety. For this, they invest money in various forms. Insurance plans is the
one among the various form of investment which make future secure and better at the
time of retirement and for children’s education and marriage.

Children’s Future Planning

All parents want to give the best possible upbringing to their children. This includes good
education and security, in case of any eventuality. The purpose of Children's Future
Planning is to create a corpus for foreseeable expenditures such as those on higher
education and wedding, and to provide for an adequate security cover during their
growing years. Children's Future Planning acquires added importance because children's
education and wedding are high priority life goals, which can neither be postponed nor
can there be a compromise on the amount.

There are many products which you can use to achieve the above objectives. For
example, he could suggest a Children's Future Plan offered by any good insurance
company, to build a corpus for your child's higher education, and provide for a security
cover in the event of the parent's unfortunate demise. Children's plans are also available
under unit-linked option. Being unit-linked, they offer access to investments in all kinds
of asset classes - equity, debt and cash.

Retirement planning

2
Retirement is a reality for every working person. Most young people today think of
retirement as a distant reality. However, it is important to plan for post-retirement life if
anyone wish to retain their financial independence and maintain a comfortable standard
of living even when there are no longer earning. This is extremely important. Retirement
Planning acquires added importance because of the fact that though longevity has
increased, the number of working years haven’t. There are two situations where money is
needed at old age.
 Living too long
 Living Death

Kotak Old Mutual Life Insurance Ltd.

Kotak Mahindra is in business since 1985 as a partnership between Uday Kotak and Mr.
Mahindra, and insurance part of their business came into existence in the year 2001.

26% - 74% Joint Venture Between

Kotak Mahindra Life Insurance has Joint venture with Old Mutual plc.

Old Mutual Plc is the 12th largest Insurance Company in the world. It has its base of over
4 million life assurance policyholders. It has one of the best “Payouts” among insurers in
the world. It has one of the best “Solvency Ratios” among insurers in the world. A FTSE
100 financial services group and ranks as a Fortune Global 500 company. The company
is 160 years old and has prominent presence in the United States and the United
Kingdom.

Vision

Kotak Life Insurance has a deep rooted commitment to improve the quality of life of its
customers, employees and stakeholders. We aim at improving the long term value in our
21 relationship by continuous innovation and improvements. We do this by our three-
prong effort which strives to make Kotak Life Insurance a corporate with values.

Increase Customer Value:

Kotak Life Insurance has gone to the heart of its customer's requirements and developed
products which are unique and serve the customer needs perfectly. We built a relationship
of mutual trust and benefit to serve the Indian customer. At Kotak Life Insurance the
customeralways comes first.

Cohesive Work Environment: -

3
We form long-term partnership with our employees by offering them an invigorating
work experience. We not only demand loyalty, sincerity and values but also give it back
in equal measures. Kotak Life Insurance will like to offer its employees space to grow,
innovate and build a long-term career.

Mission
“At Kotak Life Insurance, we aim to help customers take important financial decisions at
every stage in life by offering them a wide range of innovative life insurance products, to
make them financially independent.”

Kotak Retirement Plan

Kotak Long Life Wealth Plus
Kotak Second Innings Plan
Kotak Capital Multiplier Plan
Kotak Long Life Secure Plus
Kotak Guaranteed Pension Builder
Kotak Retirement Income Plan

Kotak Child Plan

Kotak Headstart Child Plans
Kotak Child Advantage Plan

Problem Statement:-
The research problem which lies here is “To manage the future uncertainty and
expectancy of people through effective financial planning with the help of insurance
plans at the time of retirement and for children’s future.”

Objective:-
 To understand the concept of financial planning and analyze the financial plans
made by a customer of insurance company for their better future.

 To analyze the match between life insurance policy given by Kotak Life insurance
and financial planning of their customers.

 To determine the various factors which effect the financial planning of an

insurance customer for their retirement and children’s education.

 To study the method for calculating the right amount of investment in insurance
by a person for future.

Scope:-
Functional Area: Finance
Time of Study: point of time (45 days)
Geographical Area Of Study: Northern, western and central Delhi.

4
REVIEW OF WORK ALREADY DONE/REVIEW OF LITERATURE
With the help of various books, journals and internet, the review of concepts and theories
and review of previous research finding is taken place.
Some previous research on marketing strategies is also studied.
Some book are also reviewed of “Insurance and Risk Managment” to clear concepts and
theories.
Financial planning is essential for better future but in India, there are very less people
who do the proper financial planning to make their future better and secure. The only
main purpose of investment here is tax saving. The insurance companies try to come out
with new and innovative products which make life secure and better. Now-a-days, there
are various child plans and retirement plans available in the market.
Way to plan:
Don't buy insurance just because your neighbour bought it. Buy insurance because you
need it.
Understand your financial goals. Once you know what your aim is, you will be in a better
position to choose the type of insurance you need - protection, savings, investment or
retirement.
Different insurance policies have different covers. Make sure your financial advisor
presents you with a list of recommendations, including the types of policies and benefits.
Read them thoroughly to be aware of what your policy covers.
The amount of insurance coverage you need depends on factors such as the number of
dependants, debts or mortgages, lifestyle and investment needs. Insurance cover should
be to such an extent that in case of one's demise, his / her dependents are able to maintain
the same lifestyle as they used to have before the unfortunate event occurred.

With insurance, we transfer the risk to another party. That party bears the risk that you
are protecting yourself against. This risk may be death, disability, sickness or an accident.
However, the party assuming the risk does not accept the risk without compensation. As a
result, premiums are charged. The party assuming the risk receives premiums from a
large group and is able to provide coverage to the whole group because the odds are that
not everyone in the group will suffer the particular risk.

Insurance is important to any personal finance decision. Many events can wipe out assets
which have been accumulated over a lifetime. Medical expenses, automobile accidents,
natural disasters and legal liability suits are instances that can require a significant
amount of resources. Individuals typically do not want to accept the risk that these events
may not occur nor are they willing to self-insure against these risks. Therefore, we seek
insurance and insurers are willing to provide coverage.

With a large population and the untapped market area of this population insurance
happens to be a very big opportunity in India. Today it stands as a business growing at
the rate of 15-20% annually. Together with banking services, it adds about 7 percent to
the country’s GDP. In spite of all this growth statistics of the penetration of the insurance
in the country is very poor. Nearly 80% of Indian populations are without life insurance

5
cover and the health insurance. This is an indicator that growth potential for the insurance
sector is immense in India.

ABSTRACT OF PREVIOUS RESEARCH

TOPIC: Financial Planners and Investment Advisors
About 35,000 US companies with combined annual revenue of about $200 billion
provide financial planning and investment advice to individuals and businesses. Large
companies include Ameriprise Financial, Charles Schwab, and units of diversified
financial services companies such as Morgan Stanley. The industry is concentrated: the
50 largest companies account for about half of revenue.
Demand is driven by consumer income and wealth and demographics. The profitability
of individual firms depends largely on effective marketing. Large companies have some
advantages in providing expertise in a wider range of investment options, and they may
be able to charge lower fees. Small companies can compete successfully by providing
better service and advice.
Financial planners help customers put together a plan to manage their financial resources;
investment advisors suggest specific investments. About 70 percent of industry revenue
comes from providing services to individuals. Financial planners help individuals form a
plan that may include debt, asset, college, retirement, estate and tax planning, and may
periodically check with the client to see how well the plan is being followed. Much of the
planning revolves around an income and spending budget, with advice about the types of
financial investments suitable for the client. For wealthy individuals, and for
organizations such as trusts, estates, and charitable foundations, financial planners offer
more comprehensive and detailed planning, often of a tax-sensitive nature, and frequently
recommend specific investments.

NOTE-WORTHY CONTRIBUTIONS IN THE FIELD

For effective financial planning, Bajaj Capital give the concept of 360 degree financial
planning which includes all type of planning related to money to make present and future
better and it also provides various tools and experts to find right amount of investment at
every stages of life and also helps in choosing the right form of investment .

360° Financial Planning is a unique software-based simulation that takes a holistic view
of your life-long financial needs and charts a personalised investment strategy to help you
meet them. Broadly, it involves:

• Identifying your current financial status Listing and prioritising your goals
Creating a sound investment plan to achieve them
• Monitoring the plan to facilitate swift corrective action, if needed

360° Financial Planning is based on the premise that every individual has certain basic
financial needs that are expressed at various stages of life (getting married, buying assets

6
like homes, vehicles, or providing for your children's education and wedding). With the
help of 360°Financial Planning, you can prepare yourself well in time for all these goals.

Some other financial institutions and insurance companies also provide tools like
mathematical calculator and help of financial advisors to make financial planning of a
customer

RESEARCH METHODOLOGY
Research Design: It is the framework for conducting the research project
Exploratory Research- It is a type of research where the main objective is to develop
insights into problem and find the area where problem lies.
Research is initiated by examining the secondary data to gain insight into the problem.
The primary data is evaluated on the basis of the analysis of the secondary data.
The data for this research project is collected through self administration. Due to time
limitation and other constraints direct personal interview method is used. A structured
questionnaire is framed as it is less time consuming, generates specific and to the point
information, easier to tabulate and interpret. Moreover respondents prefer to give direct
answers. In questionnaires open ended and closed ended, both the types of questions is
used.

Target Population:
Policyholder of Kotak Old Mutual Life Insurance Ltd who live in northern, western and
central part of Delhi.

Sampling Design:
Non probability sampling design

Sampling Type:
Convenience Sampling is used because there is some constraint like-
Resource constraint
Time constraint
Cost constraint

Sample Size:
50 policyholder

7
Data Type:
Primary Data- It is collected through the method of survey in which the researcher and
respondents come in personal contact.
Secondary data-It is collected from the various books, journals and from the internet.

Instrument:
Questionnaire

Analytical Tool:
Tabulation of the responses from questionnaire, represent in the form of graphs and pie-
charts and analyze it with the help of mean, median, and mode.

EXPECTED OUTCOME
In today’s changing world it is necessary for all people to secure their future. The
expected outcome of the project:
 This project will help in understanding the concept of financial planning done by
a customer of insurance company for their better future and the factors that effect
their financial planning.

 This project will help in knowing the various tools to save the future of people by
retirement planning and children’s education planning.

 With the help of primary data, it will be found that whether people in India make
proper financial planning or not and whether this planning help in make their
future secure or not.

 It will give knowledge about various tools to calculate the right amount of
investment by the use of mathematical calculator.