A

REPORT

ON

“Insurance Industry”
AT

SECURE YOUR DREAM TODAY…….

SUBMITTED TO SUBMITTED BY

Prof .Jyotsna Arya Abhishekh Rungta

1
CONTENT

S.NO. TOPICS PAGE NO.

1 Insurance Industry 3

2 Effect of Globalization, privatization & Liberalization 7

3 Current trends & Market Scenario 10

4 Company Analysis 12

5 Background 12

6 Promoters 12

7 Market Scenario 13

8 Range of products 14

9 Policy offered 14

10 Future Plans 24

11 Why Life Insurance 25

12 Product analysis 27

13 SWOT Analysis 29

14 Pricing 30

15 Suggestion 30

16 Recommendations 32

2
 History of Life Insurance in India
Life Insurance in its present form came to India from United Kingdom (UK)
with the establishment of the British firm, ORIENTAL LIFE INSURANCE CO. in
Calcutta in 1818, followed by Bombay Life Insurance Co. in 1823; Madras
Equitable Life Insurance Society in 1829 & Oriental Government Security Life
Insurance Co. in 1874. Prior to 1871, Indian lives were treated substandard
& charged an extra premium of 15 – 20 %. Bombay Mutual Life assurance
Society, an Indian insurer, which came into existence in 1871, was the first
one to cover Indian lives at standard rates.

Later in 1928, the Indian Insurance Companies Act was enacted to enable
the government to collect statistical information about both life & non –life
insurance business transacted in India by the foreign & Indian insurers,
including the provident insurance societies. BY 1956, 154 Indian insurers, 16
non-Indian insurers & 75 provident societies were carrying on life insurance
business in India. was taken over by the Central Government & then
nationalized on 1st September 1956, when the LIFE INSURANCE
CORPORATION came into existence.

Insurance in India can be traced back to the Vedas. For instance,

yogakshema, the name of Life Insurance Corporation of India's corporate
headquarters, is derived from the Rig Veda. The term suggests that a form of
"community insurance" was prevalent around 1000 BC and practiced by the
Aryans. It was during the Swedishi movement in the early 20th century that
insurance witnessed a big boom in India with several more companies being
set up.

As these companies grew, the government began to exercise control on

them. The Insurance Act was passed in 1912, followed by a detailed and

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amended Insurance Act of 1938 that looked into investments, expenditure
and management of these companies' funds.

By the mid-1950s, there were around 170 insurance companies and 80

provident fund societies in the country's life insurance scene. However, in
the absence of regulatory systems, scams and irregularities were almost a
way of life at most of these companies.

As a result, the government decided nationalizes the life assurance business

in India. The Life Insurance Corporation of India was set up in 1956 to take
over around 250 life companies.

When IRDA came into the Existence:-

Life Insurance in India was nationalized by incorporating Life Insurance

Corporation (LIC) in 1956. All private life insurance companies at that time
were taken over by LIC.

In 1993 the Government of Republic of India appointed RN Malhotra

Committee to lay down a road map for privatization of the life insurance
sector.

While the committee submitted its report in 1994, it took another six years
before the enabling legislation was passed in the year 2000, legislation
amending the Insurance Act of 1938 and legislating the Insurance Regulatory
and Development Authority Act of 2000.The same year that the newly
appointed insurance regulator - Insurance Regulatory and Development
Authority IRDA -- started issuing licenses to private life insurers.

The Insurance sector in India has gone through a number of phases and
changes, particularly in the recent years when the Govt. of India in 1999
opened up the insurance sector by allowing private companies to solicit
insurance and also allowing FDI up to 26%.Life and general insurance in India
is still a nascent sector with huge potential for various global players with the
life insurance premiums accounting to 2.5% of the country's GDP while
general insurance premiums to 0.65% of India's GDP

As per the current (Mar 06) FDI norms, foreign participation in an Indian
insurance company is restricted to 26.0% of its equity / ordinary share

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capital. The Union Budget for fiscal 2005 had recommended that the ceiling
on foreign holding be increased to 49.0%.

Registered Life Insurance Companies India

S.N Registrati Date of Name of the Company

o. on Reg.
Number

1 101 23.10.20 HDFC Standard Life Insurance Company

00 Ltd.

2 104 15.11.20 Max New York Life Insurance Co. Ltd.

00

3 105 24.11.20 ICICI Prudential Life Insurance Company

00 Ltd.

4 107 10.01.20 Kotak Mahindra Old Mutual Life Insurance

01 Limited

5 109 31.01.20 Birla Sun Life Insurance Company Ltd.

01

6 110 12.02.20 Tata AIG Life Insurance Company Ltd.

01

7 111 30.03.20 SBI Life Insurance Company Limited .

01

8 114 02.08.20 ING Vysya Life Insurance Company Private

01 Limited

9 116 03.08.20 Bajaj Allianz Life Insurance Company

01 Limited

10 117 06.08.20 Metlife India Insurance Company Pvt. Ltd.

01

11 133 04.09.20 Future Generali India Life Insurance

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 07 Company Limited

List of Life Insurers (as of Sept, 2006)

Apart from Life Insurance Corporation, the public sector life insurer, there are
14 other private sector life insurers, most of them joint ventures between
Indian groups and global insurance giants.

Life Insurer in Public Sector

1. Life Insurance Corporation of India

Life Insurers in Private Sector

1. Bajaj Allianz Life

2. Tata AIG Life
3. ICICI Prudential Life Insurance
4. HDFC Standard Life
5. Birla Sunlife
6. SBI Life Insurance
7. Kotak Mahindra Old Mutual Life Insurance
8. Aviva Life Insurance
9. Reliance Life Insurance Company Limited
10. MetLife India Life Insurance
11. ING Vysya Life Insurance
12. Max Newyork Life Insurance
13. Sahara Life Insurance - Now they are not into business
14. Shriram Life Insurance
15. Bharti AXA Life Insurance Co Ltd

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Effect of Globalization, Liberalization, Privatization
Has globalization helped or hurt the insurance industry?

"Globalization has provided a host of benefits for the life insurance industry,"
says Benanav. "Over the years we’ve seen a dramatic increase in
professionalism throughout the industry as companies apply best practices
developed by innovators in one market to other markets around the world.
This also applies to the regulatory environment as regulators share their
expertise across borders, creating a more uniform regulatory environment
that ultimately benefits both consumers and the industry as a whole. Another
area in which globalization has helped the life insurance industry is by
allowing the freer flow of managerial talent across borders. Companies like
New York Life are moving smart managers from one market to another,
wherever their talents may be needed in the organization. This helps
broaden the horizons not only of each company but also of the entire
industry itself.

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What effect does globalization have on local-national insurers in
emerging markets?

Some people believe it’s positive: "When foreign insurers like New York Life
enter a market that had formerly been closed, they bring with them world-
class product development and marketing standards that significantly raise
the awareness of consumers. This heightened awareness helps educate
consumers to the benefits of life insurance, increasing demand throughout
the market, benefiting foreign and domestic insurers alike.

Effects of Liberalization and Deregulation on Efficiency

This shows the effects of liberalization and deregulation on the efficiency of

life insurers in selected Asian life insurance markets. As used in this study,
liberalization denotes a reduction of barriers to market access, and
deregulation denotes a lessening of national regulation. Indian deregulation
followed liberalization by a discernable period (four years) whereas Philippine
deregulation occurred concurrently with liberalization. In neither instance
could these deregulation efforts be characterized as substantial.
Nonetheless, these two markets can be contrasted with those of Taiwan and
Thailand which undertook virtually no deregulation during the study period.

Liberalization and deregulation of the Indian life insurance markets were

associated with increases and improvements in total efficiency. The evidence
suggests that liberalization and deregulation of the Philippine life insurance
market were effective in accelerating a shift of the production frontier and in
narrowing the gap between the costs of the average firm and those of the
best -practice life insurers. This finding implies that a small group of best-
practice firms was gaining efficiency and that the average firm responded to
a more competitive market by emphasizing cost saving. In addition,
liberalization/deregulation seems to have stimulated scale economies. The
positive consequences of these government changes are associated with a
convergence of Philippine life insurers’ operation toward the long-run optimal
8
scale. The evidence also suggests that liberalization/deregulation generated
impressive productivity growth for Philippine life insurers.
Effect of Privatization
In fact, it's in recognition of the huge potential of the market and the need to
make insurance, particularly life insurance, available on a wider scale, that
the government opened the industry to private players.

Today, the Indian life insurance industry has a dozen private players, each of
which are making strides in raising awareness levels, introducing innovative
products and increasing the penetration of life insurance in the vastly
underinsured country. Each of the private insurers bas introduced revamped
products to meet the needs of their target customers and in line with their
business objectives. Some insurers are pursuing a mission to be a scale
player in the mass market by introducing a wide range of products to meet
the need of each customer. Others have taken a more focused approach,
introducing select products that hold potential and fill market gaps.
Whatever the case may be, each life insurer has approached the
category with a fresh perspective.

So, how successful have these efforts been? The results are noteworthy. The
number of new policies issued has gone from a little less than 1.7 crore in
1999-2000 to over 2.3 crore in the last year. More heartening is that
premiums from new business written by life insurers have nearly
quadrupled, from pre- privatization days of about Rs 4,000 crore in
1999-00 to over Rs 15,000 crore in 2001-02. These numbers clearly
indicate that not only is life insurance growing rapidly, but that the new
customers are insuring themselves for greater amount, possibly closer to
what their actual insurance and protection needs are.

A large part of the success of the new entrants ran be attributed to the
government appointed Insurance Regulatory and Development Agency
(IRDA), which developed the regulatory framework. The regulations
governing the life and non-life insurers are pragmatic and forward -looking,
ensuring the customer is protected and creating an environment for thriving
private sector participation and a level playing field.

Undoubtedly, the largest beneficiaries of privatization have been the

customers, who now have an array of policies to choose from, a number of
channels to approach insurers through, levels of customer service so far
unseen in this industry, and more information about their investments than
ever before. Encouraging as these trends may seem, they are just the tip of
the iceberg. Consumer awareness, though increasing, is still low and the
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different types of policies available and the specific benefits of each often
confuse them. And it's the job of insurance companies to educate them
about these.

But heightened awareness and consumer education goes far beyond positive
results. With them comes a willingness to view life insurance as an integral
part of the financial portfolio, marking a significant change from the earlier
attitude, where insurance was purchased as a tax saving tool. The benefits of
the increased awareness are evident - penetration of the life insurance is
begirning to cut across socio-economic classes and attract people who have
never purchased insurance before.

Traditionally, tied agents were the single channel through which insurance
policies were sold. Insurance agents would sell policies to their family,
friends, and would then direct their efforts towards people outside this
circle. Today tied agents still contribute the maximum business, but the
manner in which they approach customers has changed significantly. They
are more professional and are able to guide customers much better about
the product that would best meet their needs. While this addresses the issue
of trust, there is still a need for a broad based approach.

There's also been a huge improvement in service attitude and delivery.

Technology has come to our aid, giving us a platform, the reach and the
ability to service each customer seamlessly. Multiple touch points have
emerged -- contact centers, email, facsimile, websites - which enable the
customer to get in touch with insurance companies quickly, easily and
directly.

As with privatization in any industry, the benefits aren't restricted to the

customer alone, but extend to society at large, by generating employment
opportunities for thousands. Over the past 2 years, insurance companies -
both life and non-life - are estimated to have collectively hired at least 6,000
employees to staff their operations across the country. Another 90,000-odd
have been appointed as life insurance advisors who counsel and recommend
products to insurance buyers. And because of the specialized nature of
several functions in the insurance industry, we see completely new skill
sets being created; skill sets that are lasting, unique and raise the bar within
the industry.

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With the transformation in the industry comes a huge opportunity to tap
largely ignored segments. One of the most promising areas for life insurers is
retirement solutions. Consider this: Only 89% of the working population in
our country has a form of social security for old age. People in the
unorganized sector, self employed persons and those engaged in agriculture,
have no form of guaranteed post-retirement income. Add to this the fact that
life expectancy is expected to rise from 77 years to 85 years in the next
decade. And those persons aged 60 and above are expected to form 8.6%
of the total population by the year 2016. It becomes obvious that the task
of retirement planning and pensions is immense and require a
comprehensive, long ranging regulations.

Current Trend & Market Scenario

In a tough battle to expand market shares the private sector life insurance
industry consisting 14 life insurance companies at 26% have lost 3% of
market share to the state owned Life Insurance

Corporation (LIC) in the domestic life insurance industry in 2006-07.

According to the figures released by Insurance Regulatory & Development

Authority the total premium these 14 companies have shot up by 90% to Rs
19,471.83 crore in 2006-07 from Rs 10, 252 crore.

LIC with a total premium mobilization of Rs 55,934 crore has been able retain
a market share of 74.26 % during the reporting period. In total the life
insurance industry in first year premium has grown by 110% to Rs 75, 406
crore during 2006-07. The 2006-07 performance has thrown a few surprises
in the ranking among the private sector life insurance companies. New
entrants like Reliance Life and SBI Life had shown a huge growth of over
381% and 210% respectively during the year. Reliance Life which has
become one of the top five companies ended the year with a premium of Rs
930 crore during the year.

Though ICICI Prudential Life Insurance remained as the No 1 private sector

life insurance Company during the year Bajaj Allianz overtook ICICI Prudential
in terms of monthly market share in March, for the first time ever. Bajaj’s
market share among private players in non-single premium for March stood
at 29.1% vs. ICICI Prudential’s 23.8%. Bajaj gained 4.6 percentage point
market share among private sector players for FY07.

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Among other private players, SBI Life and Reliance Life continued to do well,
each gaining 4% market share in FY07. SBI Life’s growth was driven by
increasing contribution from ULIP premiums. Another notable development of
the 2006-07 performance has been the expansion of retail markets by the
life insurance companies. Bajaj Alliannz Life insurance has added 20 lakh
policies while ICICI Prudential has expanded over 19 lakh policies during the
year.

Company Analysis
(Reliance life Insurance)

Background
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Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of
the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s
leading private sector financial services companies, and ranks among the top
3 private sector financial services and banking companies, in terms of net
worth. Reliance Capital has interests in asset management and mutual
funds, stock broking, life and general insurance, proprietary investments,
private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC)

registered with the Reserve Bank of India under section 45-IA of the Reserve
Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial

services sector in India and aims to become a dominant player in this
industry and offer fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limited
to offer need based Life Insurance solutions to individuals and Corporate.

Promoters & Management

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of

the Reliance - Anil Dhirubhai Ambani Group. The company acquired 100 per
cent shareholding in AMP Sanmar Life Insurance Company in August 2005.
Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade
infrastructure and a portfolio.

AMP Sanmar Life Insurance was a joint

venture between AMP, Australia and the
Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices
across the country, 9,000 agents, and more than 900 employees.

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Range of Products

Reliance Secure Child Reliance Group Term

Plan Assurance Policy
Reliance Automatic Reliance EDLI Scheme
Investment Plan Reliance Group Gratuity
Reliance Money Policy
Guarantee Plan Reliance Group
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 Reliance Endowment Superannuation Policy
Plan
Reliance Special
Endowment Plan
Reliance Cash Flow
Plan
Reliance Child Plan
Reliance Whole Life
Plan
Reliance Golden Years
Plan
Reliance Golden Years
Plan Value
Reliance Golden Years
Plan Plus
Reliance Market
Return Plan
Reliance Term Plan
Reliance Simple Term
Plan
Reliance Special Term
Plan
Reliance Credit
Guardian Plan
Reliance Special
Credit Guardian Plan
Reliance Connect 2
Life Plan

Different policy which is offered by the organization

A well-qualified insurance policy would work with a person to prepare his

plan. A policy is finance savvy and combines the objectivity and trust,
developed through years of experience and expertise in planning one’s
personal finance. The kinds of services which offer by company can vary
widely. Some policy assess every aspect of one’s financial life, including
saving, investments, insurance, taxes, retirement, and estate planning and
help one develop a detailed strategy or plan for meeting all financial goals.
The major policy in the market by the company is as follows

1) Reliance Whole Life Plan

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You’ve always loved your family. As a loving person you want to be rest
assured that they will be happy, even if something were to happen to you.
With Reliance Whole Life Plan you can be sure that your family will receive
that timely financial Support they need. Go ahead, live your today to the
fullest, without a worry about tomorrow.

Key Features

• Insurance protection till age 85

• Choice of extending your insurance coverage till age 99

• Convenient Premium Payment Term

• Wealth creation through bonus additions

• More value for your money by way of High Sum Assured Rebate

• Get Sum Assured plus Bonuses in case of your unfortunate death

• Option to add two Riders – Critical Illness and Accidental Death

• Benefit and Total and Permanent Disablement Rider

• Policy Loan available after three full years premium payment

How does this Plan work?

You pay premium every year for the desired Premium Paying Term. You get
Sum Assured plus bonuses on reaching age 85. You choose to continue with
the insurance cover till the age of 99 and the Policy will continue to
participate in profits till then. On death, your Beneficiary will get the Sum
Assured plus accumulated bonuses.

Sample Premiums

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The tables below illustrate the indicative premiums for an individual Life
Assured across different Sum Assured for a Premium Paying Term of 20, 30
and 40 years.

2) Reliance Special Endowment Plan

Reliance Special Endowment Plan is the key to all your financial needs. You
get a desired lump sum after a specified period. However, your life insurance
protection continues for an extended period. If anything were to happen to
you, your Beneficiary will get another Sum Assured along with the bonuses.
The Policy comes with an added feature of a limited Premium Term, which is
always five years less than the Policy Term.

Key Features

• Twin Benefit of protection and savings

• Sum Assured is paid on survival, at the end of the Premium
Paying Term

• Life Cover for full Sum Assured continues beyond Premium

Paying Term

• Extended Life Cover for five years after Premium Paying Term
• Wealth creation through bonus additions
• More value for your money by way of High Sum Assured Rebate
• Choose to add the Benefit of two Riders – Critical Illness
And Accidental Death Benefit and Total and Permanent Disablement
Rider

• Choose to avail of a Policy Loan available after three full years of

Premium payment

• Policy participates in profits even after Premium Paying Term

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How does this Plan work?

You pay premium every year. The Premium Paying Term is always five
years less than the Policy Term. On survival to the end of the premium
paying term you get the Sum Assured. On survival to maturity (i.e. at the
end of the Policy Term) accumulated compounded bonuses are paid.

Sample Premium

The tables below illustrate the indicative premiums for a Life Assured
across different Sum Assured and ages for a Policy Term of 20, 25 and 30
years.

3) RELIANCE MONEY GURANTEE PLAN

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS

BORNE BY THE POLICYHOLDER.

Yes, it's a trio the pace setter plan, which promises Life Protection, an
opportunity to gain control over your investments along with protection of
downside risk!

For the select few like you, the Reliance Money Guarantee Plan is a Unit
Linked product addressing comprehensive need to strike that perfect
balance of Protection and Savings that you deserve as you grow successfully.
The Reliance Money Guarantee Plan is a Regular Premium Unit Linked Policy
which guarantees the entire premium (including premiums for top- ups) paid
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by you. This is a plan which helps you reap all the benefits of a rising market
simultaneously protecting you from the downside risk of the market.

Key Features

• Capital Guarantee The sum of all premiums paid is guaranteed on

maturity or on death before the maturity.
• Capital Guarantee is available on both the basic premiums as well as
on top-up premiums
• Unique Return Shield feature to protect your returns
• Choice to invest from 3 pre-packaged investment fund options
• Unmatched flexibility through our ‘Exchange Option’ to move between
the Reliance Money Guarantee suite of products offered, as you grow
up the ladder
• Liquidity in the form of partial withdrawals from top-up fund
• Option to package with Accidental Death & Disability and Term
Insurance riders

How does this plan works?

The premium contributed by you net of Premium Allocation Charges and

Miscellaneous Charge is invested in fund option of your choice for a specified
period of time as selected by you and units are allocated depending on the
price of units for the fund/funds. The Fund Value is the total value of units
that you hold in the fund. The Policy has a minimum Guaranteed Fund Value
which is equal to total of all premiums paid (excluding any additional and
extra premiums if any), to be payable on survival to maturity or earlier
death. The amount of top-up premiums paid is also guaranteed on death
provided there is no partial withdrawal. The amount of top-ups premium is
guaranteed on maturity provided the top-ups premium was paid at least 10
years before the date of maturity and there is no partial withdrawal. The Sum
Assured under the Policy is fixed on the basis of the selected annual
premium and Policy Term.

The Mortality Charges and Policy Administration Charges are deducted

through cancellation of units whereas the Fund Management Charge is
priced in the Unit Value. The premiums for riders, if selected, are payable
over and above the premium for the basic Policy.

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4) RELIANCE MARKET RETURNS PLAN

You have always aspired for the best in life. And we help you achieve just
that. With Reliance Market Return Plan you can have the twin advantage of
insurance protection as well as reaping benefits of investment growth. It is a
flexible plan, which works all through your life and meets changing
requirements like additional protection, liquidity through cash, option to
invest in different asset class, steady golden years and many more.

Key Features

• Twin benefit of market linked return and insurance protection

• A Unit Linked Plan, different from traditional Life Insurance
Products with maximum maturity age of 80 years

• Option to create your own portfolio depending on your

Risk appetite

• Choose from four different investment funds

• Flexibility to switch between funds
• Option to pay regular as well as single premium & top-ups
• Option to package your Policy with Accidental rider
• Flexibility to increase the Sum Assured
• Liquidity through partial withdrawals

How does this Plan work?

The premium paid by you, net of Premium Allocation Charges is invested in

fund/funds of your choice and units are allocated depending on the price of
units for the fund/funds. The Fund Value is the total value of units that you
hold in the fund/funds. The Mortality Charges and Policy Administration
Charges are deducted through cancellation of units whereas the Fund
Management Charge is priced in the Unit Value.

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21
5) Reliance Cash Flow Plan
While most insurance plans block your money for a certain period of time,
Reliance Cash Flow Plan gives you the double Benefit of life insurance along
with easy liquidity through lump sum cash. It provides money periodically
when you need it. It lets you live life to the fullest today and at the same
time, helps you stay protected for tomorrow by giving you the flexibility of
receiving a specified percentage of the Sum Assured at specified intervals.

Key Features

• Easy Liquidity - Get periodic cash flows at the end of the fourth year

• and thereafter at the end of every three years

• Wealth creation through bonus additions

• On maturity, receive accumulated bonuses along with final lump

• sum payout

• More value for your money by way of High Sum Assured Rebate

• Full Sum Assured plus bonuses in case of your unfortunate death.

• This is over and above the Survival Benefits already paid

• Option to add two Riders – Critical Illness Rider & Accidental Death

• Benefit and Total and Permanent Disablement Rider

How does this Plan work?

You pay premium every year for the entire term and get Survival Benefits at
periodical intervals as mentioned below. On death, your Beneficiary will get
the full Sum Assured, plus accumulated bonuses, over and above the
Survival Benefits already paid to you.

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Sample Premiums

The tables below illustrate the indicative premiums for an individual Life
Assured across different Sum Assured for a Policy Term of 16, 25 and 31
years.

6) Reliance Child Plan

As a parent, it is only natural to dream of a smooth and blissful life for your
child. This is exactly why you need to secure your child’s tomorrow, today.
Reliance Child Plan helps you save systematically so that you can give your
child the much-needed financial security in the future. Simply put, Reliance
Child Plan gives you the freedom to enjoy every moment with your child
today, without worrying about his/her tomorrow.

Key Features

• Risk protection for you during the term of the Policy

• Accumulated bonus at the end of the Policy Term
• 25% of Sum Assured payable every year as lump sum Benefit
during the last four Policy Anniversaries

• All future premiums are waived in the event of unfortunate loss of life
• Guaranteed Fixed Benefits continue even after loss of life of the
Policyholder
23
 • More value for your money by way of High Sum Assured Rebate

• Choose to add the Benefit of two Riders – Critical Illness and

Accidental Death Benefit and Total and Permanent Disablement Rider

• Policy participates in profit even after the loss of life of the Life Assured

How does this Plan work?

• You pay premium every year for the entire term and get guaranteed
Fixed Benefits every year during the last four years of the Policy Term.
On death, your Beneficiary will get the Sum Assured, guaranteed Fixed
Benefits on specified dates and all future premiums will be waived. All
attached bonuses are payable at the end of the Policy Term and will
remain attached to your Policy even after payment of Life Cover
Benefit.

Sample Premiums

The tables below illustrate the indicative premiums for an individual Life
Assured across different Sum Assured for a Policy Term of 15, 18 and 20
years.

7) Reliance Special Credit Guardian Plan

In today’s world of easily available loans, we often tend to neglect the
implications of non-payment in case of our untimely demise. Reliance Special
Credit Guardian Plan helps you and your family avoids such situations by
securing your housing loans, personal loans and even credit card payments.
What makes the Plan special is the fact that on survival at maturity, all
premiums paid for your basic Policy will be returned to you.

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Key Features

• Different types of loans are covered under this plan - Housing

Loan, Personal Loan, outstanding on credit cards etc.

• Limited premium paying term

• Single and Regular Premium payment options
• Discount on premium rates for women
• Decreasing Term Insurance
• Option to add two Riders – Critical Illness and Accidental Death
Benefit and Total and Permanent Disablement Rider

How does this Plan work?

You pay premium every year for the entire term. The Sum Assured decreases
as per the Policy Schedule in line with the outstanding Loan Schedule. On
death, your Nominee will get the Sum Assured. On survival on maturity, you
will receive all basic premiums paid.

Sample Premiums

The tables below illustrate the indicative premiums for a male Life Assured
across different Sum Assured and ages for a Policy Term of 10, 20 and 30
years.

25
Future plans and Projects

 Less than 25% of total population covered under life

insurance.
 Life insurance premium as part of GDP accounts for
2.5% as compared to 12.5% in USA.(India-27th in
world).

 Fifth biggest country in terms of GDP in PPP terms.

 Insurance market growth of 47.3% for the year

2005-06 and 34.7% for the year 2004-05.
Saturating American and European market pushing
global companies to markets like India and China in
Search of new markets.

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Why Life Insurance:

1 What do you think of Life Insurance primarily?

Considering the Indian general mass about what they think about insurance
policy, majority of the people bought insurance as a security against death
which depicts people have ensured that their dependents don’t suffer incase
of any uncertainty as life insurance indemnifies the nominees in case of an
eventuality to the insured. By having insurance policy, the financial future of
the nominees is secured in the absence of the person insured. It means they
use life insurance to cover the risk of there life.
Over 8% of the people purchase insurance as a word-of-mouth due to high
demand of the product and as a tax saving and many other reason. It was
also observed that around 28% of the people bought insurance as a mixture
of both risk cover & and as an investment product. The analysis of
respondents is shown below in figure.
2 What are the important features of an insurance
investment for you?
Investing is a conscious decision to set money aside for a long enough
periods in an avenue that suits your risk profile. The objective behind
investments, majority of the respondents disclosed growth of capital as their
prime objective while safety of capital stands secondary. This reflects the
investor willingness to take calculated risks for growth of their capital.

It highlights that growth of capital is the most important factor which they
consider wile investing. However, it can also be seen that of the investors
prefer safety of their capital as their secondary objective which depicts that
investors give greater emphasis to the returns and willing to adjust with
safety of capital. Liquidity is the least important factor as less no. of the
respondents voted for it which signifies that the financial planner should
designed the portfolio giving more importance to growth and safety of
capital as per individual financial goals while liquidity should have the

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minimum focus. The important features as per the respondent are growth,
safety, security& risk covers are important.

3 Whom do you rely on before buying an insurance policy?

An individual’s decision has a vital role to play in achieving investment
objectives and thereby making investments in a systematic manner.
Decisions can make or break investment avenues as wrong decisions would
merely lead to wrong investments result. There are majority of people who
feel that they can handle their portfolio on their own and hence make their
own decisions regarding investments. But in questionnaire the respondents
are asked to rank the person whom they rely before buying an insurance
policy. Which show that self (through comparison of various companies)
holds 40% and other get low than that in which others & company
advertisement not gets a single percentage?

4 What are the important attributes you look for in

him/ her in an insurance agent if u relies on him?
The average score of importance derived by taking an average of the scores
given by the respondents on the respective parameter. These averages were
then converted to percentage form and then subsequently ranks were
allotted. The first rank signified most important parameter or factor which
the investor consider that she / he rely on insurance agent, while in
subsequent ranks the level of importance reduce accordingly.
Transparency holds the highest rank in the responses which primarily
highlights absolute importance for unbiased and impartial services in the
minds of the investors. Secondly, Investors while deciding, look into the
banquet of services being offered by the advisors in relation.

5 Do you think you will like to buy an insurance

policy scrutinizing features online?
The knowledge about insurance policy, majority of the people answer that
they don’t know more about policy they just believe & get advice from a
financial advisor. There are a number of financial advisors offering a diverse
portfolio of services to suit different financial requirements of the individuals.
In order to accomplish the task, these companies provide the assistance of
professional financial advisors. The advisors educate individuals on the
merits of a long-term approach and regular investing and help to rebalance
their portfolio. This type of response is avail from the investor as they are
busy in there work more.

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6 How do you think you will like to pay premiums?
These averages were then converted to percentage form and then
subsequently ranks were allotted. The first rank signified most important
parameter or factor which the investor consider while deciding to make
payment, while in subsequent ranks the level of importance reduce
accordingly. Transparency holds the highest rank in the responses
which primarily highlights absolute importance for unbiased and impartial
services in the minds of the investors. Secondly, Investors while deciding,
look into the banquet of services being offered by the advisors in relation.
Investors are not much bothered to go in office & make payment of policy.

7 What is your preferred premium payment

frequency?
Investing is a conscious decision to set money aside for a long enough
periods in an avenue that suits your risk profile. The people who have there
own business they mainly believe in making payment in yearly or a half
yearly mode. As per there view they need cash frequently in there business
so they withdraw cash on certain point for there investment.

8 What is your preferred time period of insurance?

On enquiring from the respondent about there preferred time period for a
insurance policy, 40% of the respondents feel that investing in insurance is
the safest form of investment so they want to invest for a long time of 10 to
15 year The least time which is liked by the respondent is the time period of
1year not a single respondent choose the time period for a year.
It can be seen from the response that people are more willing to put their
money for a long period then a short period. About 30% of the respondents
feel that insurance for more than 15 year is also the safe form of
investments as it gives assured returns on the sum invested.
Some of the respondent are also short term investor in the insurance as they
invest to get a return in a short time they generally invest in the ulip, cash
flow plan so they get there return in a short period of time.

Product Analysis
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Reliance Whole Life Plan
You’ve always loved your family. As a loving person you want to be rest assured
that they will be happy, even if something were to happen to you. With Reliance
Whole Life Plan you can be sure that your family will receive that timely financial
Support they need. Go ahead, live your today to the fullest, without a worry about
tomorrow.

USP of Product
• Insurance protection till age 85
• Choice of extending your insurance coverage till age 99
• Convenient Premium Payment Term
• Wealth creation through bonus additions
• More value for your money by way of High Sum Assured Rebate
• Get Sum Assured plus Bonuses in case of your unfortunate death
• Option to add two Riders – Critical Illness and Accidental Death
• Benefit and Total and Permanent Disablement Rider
• Policy Loan available after three full years premium payment

Competition
• ICICI prudential life time super
• HDFC Single premium Whole of Life Insurance
• Bajaj Allianz Life Time Care
• Birla Sun Life Term Plan
• SBI Life Insurance Sukhjeevan (Single Premium Product)

Marketing & Strategies

Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further
grow its business. The company is using a five-pronged strategy to pursue
alternative channels of distribution. These include the franchisee model, rural
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business, direct sales force involving group insurance and telemarketing
opportunities, banc assurance and corporate alliances.

1) Building a Franchisee model

2) Rural business

3) Direct sales force involving group insurance.

4) Bank assurance

5) Corporate alliances

6) Advertising

7) Sales promotion

8) Cross selling

SWOT Analysis

Strength Weakness

Brand name Promotional displays not provided to

the customer.
Minimum allocation Charges
Lack of trust on private ltd. Company
Self fund house
Limited products compared to LIC
Wide distribution network

Nationwide presence

Highest sum assured

Opportunity Threat

Competitor also innovating same

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Untapped market. type of product.

Liberalization coming in insurance More number of competitors coming

sector in market which will hamper
profitability by providing more
People going for brand product.
services.
Literacy rate increasing.
Increased awareness of other
investment tools

Pricing Strategies

Penetration pricing
As Reliance life insurance is new to the market they are trying to
penetrate and survive by keeping low prices and lucrative offers.
For this they are focusing mainly on the maximum market share
and maximizing the reach to the people, keeping the cost lowest
and the services the best

Suggestions & Conclusion

Selling of Financial Products is a never ending project, as it is about
establishing a company in the market. The whole project gave a good
learning about the Insurance Industry (includes every insurance company)
and about Reliance life insurance. This year Life Insurance Industry has
grown by 62%, which means people starts adopting insurance with different
perspective, which is a green signal for any insurance company. This year
ULIP (unit linked insured plan) have done a good business, means people
have seen insurance as an investment option.

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Seeing the latest trend of the market, it is obvious that insurance industry
will grow at large and in future there will not be any house which doesn’t
have any insurance policy.

1 Low Saving Potential

The advisor should promote regular savings among the investors so as to open
various investment channels for them to fetch good returns.

2 Growth of Capital is the Major Objective behind Investments

It was observed that do investments for achieving growth of capital i.e. revenue
maximization. Safety of capital was considered secondary objective behind
investments assured returns which reflect that investors are more concerned for
growth rather than safety irrespective of their financial goals in life. A advisor can
take care of all the financial goals in keeping thee goals in mind, he can recommend
certain investment options ranging from mutual funds, insurance, IPO, post office
schemes, secondary markets, etc.

3 High Awareness of Financial Advisors in the Indian Market

Majority of the investors are aware about the concept of financial advisors but
among them, very few investors have actually gone for availing these services
which shows lack of trust and confidence in the services provided by the financial
advisors in the eyes of general public. The financial advisors should find out the
deficiencies and flaws in the current services being provided to the investors and
attempt at Suggesting ways and means to remedy the same.

4 Investors taking Financial Decisions Independently

Investors are taking their financial decisions independently without doing any
financial planning. This reflects the need for proper advisors who will take note of

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and record all the financial goals and will simultaneously work out the money value
for each of the goals.

Recommendations
On studying the peculiarities of the wealth management industry and
analyzing the responses of the investors on their perception and expectation
from a financial advisor, the following points are recommended which a
general financial advisor should consider while approaching the people.

India is seeing a maturing financial environment. Interest rates have fallen

and unlike in the past, options to attract savings exist through a spate of
financial products and services that have differing risk/growth and asset
accretion propositions. It is becoming increasingly obvious to people that
their money, in real terms, would fall in value if they were to keep their
money in the bank. And hence the keenness to find out the right avenue that
would help grows their savings or assets.

1 Awareness of the Benefits of Planning Early for Retirement

Anyone who will retire needs to plan for it. There is more than one reason to
save for retirement. The all-important reason is the rising cost of living. It’s
called inflation. If you start planning for retirement early on, you can bridge
the gap between what you have in your hand today and what you would like

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to have when you retire. If you begin saving for retirement early on in your
life, you can set aside smaller amounts.

2 Financial Planning Should Be Encouraged

‘Financial planning’ is the process of charting out the money course of your
life. It’s like having a financial roadmap that guides your every step till you
pass on the baton to the next generation. In other words, it is a process in
which an individual sets long-term financial goals through investments, tax
planning, asset allocation, risk management, retirement planning and estate
planning.

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3 Certified Financial Planners

Financial planning is a new animal in the Indian market, but this beast
is already attracting a lot of attention. The big thing to happen is the coming
to India of the Certified Financial Planner (CFP) mark, owned by the Board of
Standards in the US and licensed out to non-profit associations in 18
countries, including the US, Canada, Australia and the UK. Leading financial
players–asset management companies, banks, mutual funds and insurance
companies, forms these associations.

4 Unbiased Advisory

Investment Advisory Services are in this business of managing the assets of

individuals and corporations. However, the distinct model of services should
enables the advisors to offer unbiased advise on the entire spectrum of
personal finance, keeping the clients interest foremost while doing so. The
investment strategies developed across perpetuity should outline a detailed
financial plan with frequent reviews of investment decisions made to ensure
that portfolios are in line with what was planned. I’d like to add here that the
financial advisory should not only be unbiased with respect to an asset class
but it should also be independent of biases across manufacturers within an
asset class.

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Bibliography

• IRDA Website

• Reliance Insurance Website

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