A WINTER PROJECT REPORT ON comparative study of kotak life insurance policy with other private life insurance companies

Under the guidance of prof Dr Shyama prasad dutta Submitted to the University of kalyani for the fulfillment of the requirements for the award of the degree of Masters of Business Administration (Session 2010-2012) By KALYAN PATIKAR

CERTIFICATE FROM THE GUIDE

This is to certify that work entitled Project title comparative study in kotak life insurance is a piece of work done by Students name kalyan patikar under my guidance and supervision for the partial fulfillment of degree of MBA, EASTERN INSTITUTE OF MANAGEMENT, KOLKATA .

Signature of the faculty guide Prof. Dr . Shyama Prasad dutta Date:

DECLARATION
I am kalyan patikar , a student of eastern institute of management , hereby declare that the project entitled comparative study in kotak life insurance knowledge. This report is based on my personal opinion hence cannot be referred to legal purpose. the work

done by me and the information provided in the study is survey based to the best of my

Date:

KALYAN PATIKAR

ACKNOWLEDGEMENT
Preservation, inspiration and motivation have always played a key role in the success of any venture. In the present world of competition and success, willingly I prepared this particular Project. First of all I would like to thank the supreme power, the almighty god, who is the one who has always guided me to work on the right path of my life.

I also thanks to my faculty guide for his time-to-time guidance and support . I also thank to,my friends who help me from their valuable time to complete my project.

KALYAN PATIKAR

DATE:

INDEX I. PREFACE II. CERTIFICATE III .LITERATURE REVIEW Introduction - basics of insurance Need of life of insurance Roles of insurance Types of life insurance INDUSTY PROFILE COMPANY PROFILE RESEARCH METHODOLOGY COMPARATIVE STUDY DATA ANALYSIS & INTERPRETATIONS LIMITATIONS RECOMMENDATIONS CONCLUSION BIBLIOGRAPHY

Literature Review
How a company does announced a name change especially when the old name was well known? How does the company explain itself to constituents who may have known the company quite well in an earlier incarnation but may be struggling to figure out what the new organization stands for? How can the company create a new image while retaining the strengths of the old one? And what role might corporate advertising play in all this? Corporate advertising can tell a story about a company as a whole, large organizations may need to use corporate ads to simplify their image in the minds of key constituents and to show what unifies the company, despite the geographical spread and variety of its businesses.

Objectives:
Swot analysis of the product Comparative study of the competition Study tax planning solutions available in the market Study asset allocation through insurance plans Market interface

Comparative analysis done on:

ICICI PRU HDFC Stan Life Birla Sun Life Bajaj Allianz

INTRODUCTION TO INSURANCE

Insurance is a system to alleviate financial losses by transferring risk of loss from one entity to another. Insurance is basically a sharing device. The losses to assets resulting from natural calamities like fire, flood, earthquake, accidents, etc. are met out of the common pool contributed by large number of persons who are exposed to similar risks. This 6

contribution of many is used to pay the losses suffered by unfortunate few. However the basic principle is that loss should occur as a result of natural calamities or unexpected events which are beyond the human control. Secondly insured person should not make any gains out of insurance. It is natural to think of insurance of physical assets such as motor car insurance or fire insurance but often we forget that creator of all these assets is the human being whose

efforts have gone a long way in building up the assets. In that sense, human life is a unique income generating assets. Unlike the physical assets, which decrease in value with passage of time, the individual becomes more experienced and more matured as he advances in age. How insurance works? Suppose there are 1000 persons all aged 35 years and healthy lives. They are insured for one year against the risk of death. Each person is insured for Rs. 50,000. If the past experience indicated that 4 out of 1000 persons, at this age are expected to die during the year, expected amount of death claim to be paid to the family of four persons would come to Rs. 2,00,000. The contribution to be paid by each of the 1000 persons will come to Rs. 200 per year. Thus, all the 1000 persons share loss caused to the 4 unfortunate families. 996 persons who survived till one year have not lost anything as they secured peace of mind and a feeling of security of their family. While insurance cannot prevent accidents or premature death, it can help protect the family of the decreased against the loss of income caused by the death of the main breadwinner.. Classification of Insurance Insurance business can be divided into two broad categories, life and non-life. Life insurance is concerned with making provision for a specific event happing to the individual, Definition of Life Insurance

According to the U.S. Life Office Management Association Inc. (LOMA), life insurance is defined as follows: Life insurance provides a sum of money if the person who is insured dies whilst the policy is in effect.

NEED FOR LIFE INSURANCE

Life Insurance takes care of those who are financially dependent on you even when you are not around to look after them. Retirement planning requires wise investments during your working life in order to live comfortably during retirement. A good retirement plan takes care of your retirement, as there is no guarantee of a consistent income post retirement. The expenses you may incur in future will keep increasing due to inflation, thus even a fluctuation in your income may lead to a compromised lifestyle, Limited access to information and the time constraints you have may lead to inefficient management of your investments resulting in grim returns. Savings plan enables individuals to secure their financial future by helping you to get attractive returns. Your limited appetite to take risk may hinder you from parking your savings into pure equity options.

ROLE OF LIFE INSURANCE

Life Insurance As An Investment: -

Insurance is an attractive option for investment. While most people recognize the risk hedging and tax saving potential of insurance, many are not aware of its advantages as an investment option as well. Insurance products yield more compared to regular investment options, and this is besides the added incentives offered by insurers.

TYPES OF LIFE INSURANCE PLANS

Life Insurance Plans: Under Life insurance plans, KOTAK offers plans under the following major need categories: Education Insurance Plans Wealth Creation Plans Premium Guarantee plans Protection Plans

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. KOTAK 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 XII, graduation and post-graduation - to fund crucial commitments for the child's future.

WHY PRIVATE INSURANCE?

All the private companies have a lock in period of 3 yrs hence no Minimum net worth of 500 Cr required for acquiring license with a minimum Commitment to increase the paid up capital manifold in next five years. best and the largest in the world general cologne and Swiss reinsurance. Audit of accounts by at least 2 independent approved auditors each year. Products and pricing are cleared by IRDA, which looks into the financial IRDA is now proposing a Pvt. Policy Protection fund. Funds to be invested in only regulated and controlled areas with close to

disinvestments possible. paid up capital of 100 Cr in their insurance venture.

visibility of the product and the financial implication.

80%being pumped into only gilts thereby assuring safety of funds

INDUSTRY PROFILE
In 1912, the Indian life insurance companies Act was passed . This was the first comprehensive legislation in India to regulate the business of insurance. it had been observed that the provisions of Indian Companys Act did not meet the purpose. A further legislation was passed in 1928, But a comprehensive legislation was passed in 1938. The amendments in the act were made in 1956 when insurance was nationalized and LIC and GIC were formed. .

LIFE INSURERS
1. 2. 3. 4. 5. 6. 7. 8. 9. BAJAJ ALLIANZ LIFE INSURANCE CO.LTD. BIRLA SUNLIFE INSURANCE CO. LTD. HDFC STANDARD LIFE INSURANCE CO. LTD. ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. ING VYSYA LIFE INSURANCE CO.PVT.LTD. LIFE INSURANCE CORPORATION OF INDIA. MAX NEWYORK LIFE INSURANCE CO. LTD. METLIFE INDIA INSURANCE CO. PVT.LTD. KOTAK MAHINDRA OLD MUTUAL LIFE INSURANCE CO. LTD.

Life Insurance Companies

ICICI Prudential Life Insurance Company Limited ICICI Prudential Life Insurance Company Limited was incorporated on July 20,2000.The authorized capital of the company is Rs 2300 million and the paid up

10

capital is Rs 1500 million. The Company is joint of ICICI (74%) and Prudential plc UK (26%) The company was granted certificate of registration for carrying out life insurance business, by the insurance regulatory and development Authority on November 24,2000.it commenced commercial operations on December 19, 2000,becoming one of the first few private sector players to enter the liberalized arena. ICICI Prudential collected Rs.1584 corers as their premium during 2004-05 & the market share of ICICI pru. as per their premium is 5.63% as a whole but in the pvt .co .ICICI hold 40% of market share.

HDFC Standard Life: HDFC Standard Life Insurance company is a joint venture between Indias largest housing finance provider, HDFC and Europes largest mutual life assurance company The Standard Life Assurance Company (UK). HDFC Standard Life Insurance Company Limited is the first private sector life insurance company to be granted a license. Standard Life, UK, found in 1825. The UK insurance industry for 175 years by combining sound financial judgment with integrity and reliability. It is the largest mutual life company in Europe and has total assets of Rs.5,50,000 crore sit is one of the very few insurance companies in the world to have AAA rating from two of the leading international credit rating agencies, Moody and Standard and Poors. Standard Life was recently voted company of the decade in UK by the independent Brokers called IFAs. LIFE INSURANCE CORPORATION OF INDIA (LIC) 11

The Life Insurance Corporation (LIC) was established about 49 (in1956) years ago with a view to provide an insurance cover against various risks in life .A monolith then, the corporation, enjoyed a monopoly status and become synonymous with life insurance.Its main asset is its staff strength of 1.24 lakhs employees and 2048 branches and over six-lakh agency force. LIC has hundred divisional offices and has established extensive training facilities at all levels .At the apex, is the Management Development Institute, Seven Zonal Training centers and 35 Sales Training Centers. At the industry level, along with the Government and GIC, it has helped established the National Insurance Academy. It presently transacts individual life insurance businesses, group insurance businesses, social security schemes and pensions, grants housing loans through its subsidiary; and markets saving and investment products through its mutual fund. It payoff about Rs 6000 crore annually to 5.6 million policyholders. Market share of LIC which is 82.3%.By the LIC 1.09 crores policies has been sold that was in the 2004-05 & the total premium that are collected by LIC in 2004-05 was Rs.9007 crores.

ALLIANZ BAZAZ LIFE INSURANCE COMPANY Allianz AG with over 110 years of experience in over 70 countries and Bajaj Auto, trusted for over 55 years in the Indian market ,together are committed to offering financial solutions. Characterized by global presence with a local focus and driven by customer orientation to establish high earnings potential and financial strength, Allianz Bajaj Life Insurance Co Ltd was incorporated on 12th March 2001.The company received the insurance regulatory and development Authority (IRDA) 12

Certificate of Registration on 3rd August 2001 to conduct Life Insurance business in India. The Market share of Bajaj Allianz in 2003-04 was .95% which has been increases in 2004-05 and it is know 2.03% which depicts the financial position of the co.

COMPANY PROFILE
THE KOTAK MAHINDRA GROUP

Kotak Mahindra is one of India's leading financial institutions, offering complete financial solutions that encompass every sphere of life. From commercial banking, to stock broking, to mutual funds, to life insurance, to investment banking, the group caters to the financial needs of individuals and corporate. The group has a net worth of over Rs. 2,500 crore, employs around 6,700 people in its various businesses and has a distribution network 13

of branches, franchisees, representative offices and satellite offices across 250 cities and towns in India and offices in New York, London, Dubai and Mauritius. The Group services over 1.6 million customer accounts The Kotak Mahindra Group was born in 1985 as Kotak Capital Management Finance Limited. Uday Kotak, Sidney A. A. Pinto and Kotak & Company promoted this company. Industrialists Harish Mahindra and Anand Mahindra took a stake in 1986, and that's when the company changed its name to Kotak Mahindra Finance Limited. It is the Indias first NBFC to convert into a bank and is also AAA rated by credit agencies. . 1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting 1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market 1990 The Auto Finance division is started 1991 The Investment Banking Division is started. Takes over FICOM, one of Indias largest financial retail marketing networks 1992 Enters the Funds Syndication sector 1995 Brokerage and Distribution businesses incorporated into a separate company Kotak Securities. Investment Banking division incorporated into a separate company - Kotak Mahindra Capital Company 1996 The Auto Finance Business is hived off into a separate company - Kotak Mahindra Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of Matrix Information Services Limited marks the Groups entry into information distribution. 1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset 14

Management Company. 2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business. Kotak Securities launches its on-line broking site (now www.kotaksecurities.com). Commencement of private equity activity through setting up of Kotak Mahindra Venture Capital Fund. 2001 Matrix sold to Friday Corporation Launches Insurance Services 2003 Kotak Mahindra Finance Ltd. converts to a commercial bank the first Indian company to do so. 2004 Launches India Growth Fund, a private equity fund. 2005 Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime (formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Kotak Mahindra. Launches a real estate fund

Vision and Approach

Aspiration: To be among the top few private players with substantial market presence.

To be achieved through - Well-trained and quality advisor. - Consultative selling process - Complete Product range - High technology support 15

SYNERGIES OF THE PATRNERSHIP

- Investment acumen. Keen understanding of the needs and psyche of Indian investors. Leading financial service brand.

- Rich experience in insurance & PPS products. - Product innovation.

- Understanding of international financial markets. Together, we bring - Wide range of Innovative products. - Prudent money management. - Well trained advisors to deliver solutions for You

MANAGEMENT
Mr. Gaurang Shah (Managing Director)
Mr. G Murlidhar (Chief Financial Officer) Mr. Nandip Vaidya (Vice President - Sales)

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Mr. Arun Patil Development)

(Vice President - Sales & Management

COMPANY PRODUCTS Kotak Life Insurance has 20 products till date. Basically these products are divided into three main categories i.e. Group, Individual and rural. In Individual there is 13 products, in Group there is 6 products and in rural there is one plan. The plans are as follows.

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INDIVIDUAL

GROUP

18

Kotak Term Plan Kotak Preferred Term Plan Kotak Money Back Plan Kotak Child Advantage Plan Kotak Endowment Plan Kotak Capital Multiplier Plan Kotak Retirement Income Plan Kotak Retirement Income Plan (Unit Linked) Kotak Safe Investment Plan II Kotak Flexi Plan Kotak Easy Growth Plan Kotak Premium Return Plan Riders RURAL: Kotak Gramin Bima Yojana

Employee Benefits Kotak Term Grouplan Kotak Credit-Term Grouplan Kotak Complete Cover Grouplan Kotak Gratuity Grouplan Kotak Superannuation Grouplan

Key Features
In the build-up phase there is an additional life cover of 10% of the basic sum assured and the Critical Illness benefit, if opted for.

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 This is a participating plan and entitled to the higher of the basic sum assured or the Accumulation Account on maturity along with the balance in the Supplementary Accumulation Account.

During the build-up phase in the event of unfortunate death, the beneficiary would get the higher of the basic sum assured (less premium due but not paid) or Accumulation Account. In addition, 10% of the basic sum assured and the balance in the Supplementary Accumulation Account will also be paid. During the withdrawal phase in the event of unfortunate death, the beneficiary would get 10% of the basic sum assured and the balance in the Accumulation Account (into which the Supplementary Accumulation Account is added).

In case any premium payment is missed, Automatic Cover Maintenance facility will ensure that insurance cover is in force. This facility is available after 3 completed policy years.

A customer can avail a loan facility from Kotak Life Insurance against the policy.

Kotak Flexi Plan

Your Finances. The way you need it. Kotak Flexi Plan is a unit linked plan. Its objective is to provide the benefits of
separation of insurance cover and investments and the flexibility to increase 20

or decrease either one of them. The unit linked plans comes with the option of investing in six professionally managed funds allowing to allocate investment in a combination of one or more funds and switch between them as many times as wished.

As a person goes through his life his needs vary and so does the need to stay insured. A new dream for instance, a new house brings along with the burden of a home loan, making it important to increase the insurance cover to protect the loved ones. Similarly, on occasions of dream fulfillment he may wish to decrease the risk cover.

Through the unique concept of unbundling, Kotak Flexi Plan separates the money into investment and insurance accounts and allows selecting different sum assured for the sum. The sum assured linked to insurance account is the investment sum assured or SA1 and the premium is known as P1 and the premium that goes the insurance accounts to keep life cover is insurance premium and is known as P2. The sum assured linked to insurance account is the insurance sum assured or SA2.

Key Features

Being a non-participating plan on maturity the insured will get SA1 (less adjustment for withdrawals) or market value of units in Main Account, whichever is higher. Plus if a lump sum is invested the insured will get the market value of units in Supplementary Account.

21

 In the event of unfortunate death the beneficiary would receive the SA2 plus market value of units in Main Account and Supplementary Account.

Guaranteed SA1 or market value of units in Main Account, whichever is higher after maturity.

In case any premium payment is missed, Automatic Cover Maintenance facility will ensure that insurance cover is in force. This facility is available after 3 completed policy years.

Facility to switch between funds which is tax-free.

Prohibition of Rebates Section 41 of the

Insurance Act, 1938 states that: No person shall allow or offer to allow, either directly or indirectly as an inducement to any person to take out or renew or continue as in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer.

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 Any person making default in complying with the provision of this section shall be punishable with fine, which may extend to Rs. 500.

KOTAK Safe Investment Plan II

Stock market gains with your investment protected

Kotak Safe Investment Plan II is a unit linked plan that combines the benefits of insurance and capital markets returns into one. This plan shows the true reflection of the companys essence: innovation that will benefit investor.This plan offers the option of investing in six professionally managed funds. What makes in investing in Kotak Safe Investment Plan II truly unique is that the investor enjoys a sum assured guarantee, even on the Growth Fund. So if the market value of the units is higher, the investor can enjoy that; while in a bear market the investment is protected and still have the sum assured guarantee. Key Features The capital markets offer a spectrum of investment option like Gilt Fund and for aggressive investors there is a Growth Fund. Besides regular premiums, whenever the investor have excess money, he can invest it by way of lump sum injections, without any commitment to bring them in the coming year. This plan also allows for early exit options through partial withdrawal of funds or complete surrender of policy. For the people who wish to pay off all premiums over a short period of time, instead of full term, it has the Limited Payment Premium option.

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In case any premium payment is missed, Automatic Cover Maintenance facility will ensure that insurance cover is in force. This facility is available after 3 completed policy years. A customer can avail a loan facility from Kotak Life Insurance against the policy. Facility to switch between funds which is tax-free. The customers can also avail the following riders. Term/Preferred Term Benefit.

SWOT ANALYSIS STRENGTHS Personal consulting for customized policy. Perceived financial strength of the company. Persuasiveness of customer service representative to address the problems. Effective customer loyalty programmes. Customized policies that cover the specific terminal disease. Cost effective organization.

WEAKNESSES Fewer suggestions in terms of precautionary measures for avoiding perils. No great measures for the awareness of the customers as compared to other companies. Are pulled by the engine of powerful brands like TATA AIG and Bajaj Allianz.

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OPPORTUNITIES Relative market potential in not only the rural markets but also the semi-urban markets. Better customer services like utmost promptness in issuance of the policy, giving cheque pick up facilities and not making customers not waiting for months. Making more loyal customers and attracting other customers with better service. THREATS Sometimes more focus on innovative products may affect the main fruitful products. Stiff competitions due to new companies are entering day by day.

MEANING OF ULIP

A policy, which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV).

Unit linked insurance plans

Units in funds

Underlying investment

A ULIP structure looks like as follows:

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Contribution

Less charge

Investment represented as units

Life cover

FEATURES OF ULIP
ULIP distinguishes itself through the multiple benefits that it provides to the consumer. The plan is a one-stop solution providing: Life protection Investment and Savings Flexibility - Adjustable Life Cover - Investment Options Transparency Options to take additional cover against - Death due to accident - Disability life from eventualities.

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Why do insurers prefer ULIPs? Insurers love ULIPs for several reasons. Most important of all, insurers can sell these policies with lesser capital of their own than what would be required if they sold traditional policies. In traditional with profits policies the insurance company bears the investment risk to the extent of insured amount. In ULIPs the policyholder bears most of the investment risk. Since ULIPs are designed to mobilize savings, they give insurance companies an opportunity to get a large chunk of asset management business which has been traditionally dominated by mutual funds. ULIPs are suitable for individuals who are already adequately insured and are reasonably well-informed and savvy to take active investment decisions by using the `switch option' that is provided to a ULIP policyholder. Also policyholders with regular endowment plans who are not satisfied with the 4-6% returns can consider taking a ULIP with a lower equity component. It is best if insurance-seekers tread the middle path and choose balanced plans (with about 50-60% equity component). Ideally they need to avoid taking the aggressive 100% equity ULIP, which could needlessly expose their assets to market volatility. So if insurancesseekers/investors play their cards right, they can make this marriage work.

RESEARCH METHODOLOGY
Research design provides a systematic method of defining the problem and the research objectives, developing the research plan, implanting the research plan and presenting the findings. Thus marketing research process can be classified into five stages. 1. DEFINING THE PROBLEM/ THE RESEARCH OBJECTIVE 2 DEVELOPING THE RESEARCH PLAN 3 IMPLIMENTING THE RESEARCH PLAN 4 COLLECTING AND ANALYSING OF DATA 5. INTERPRETING AND REPORTING RESULT

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Research is a scientific and systematic search for pertinent information on a specific topic. Research may be defined as a document prose work. Unless it is understood in its right spirit, Research methodology includes the overall research design. Research design includes the decision regarding method of data collection and the whole sampling plan. MARKET RESEARCH DESIGN : Descriptive type DATA SOURCES RESEARCH APPROACH RESEARCH INSTRUMENT TYPE OF QUESTIONS SAMPLE SIZE : Primary source : Survey method : Questionnaire : Close-ended : 50 samples

MODE OF COLLECTING DATA: Respondents to be chosen randomly.

HOW DID I GO ABOUT THE PROJECT:SAMPLE SIZE A sample size of 50 respondent was selected to do this project, which was random sampling keeping in mind the basic criteria. . 1) Study of Secondary Data: The quickest and the most economical way for researchers to find possible hypothesis is to take the advantage of the work done earlier and thus utilize their efforts. 2) In-depth Interviews: I used in-depth interviews because it attempts to influence respondents to talk freely about their subject of interest .A formal questionnaire was made and according to which the questions were asked to the respondents. Basic methods of collecting Primary Data: 1) Questionnaire Method: The questionnaire used by me for the purpose of data collection were of structured type (Non-disguised). 28

2) Contact Method: In order to derive information from the intended organization, it was elementary for me to search for a link which could enable me to conduct a research in that organization. The main objectives of this study are: Working of Unit linked Insurance Plans SWOT analysis of the product sold Comparative study with the competitor. Study tax planning solutions available in the market

COMPARATIVE STUDY WITH THE COMPETITORS Term Assurance Plan Vs HDFC Linked Kotak Flexi Plan Vs Bajaj Allianz Unitgain Plus

Term Assurance Plan VS HDFC LINKED

Features Age Term Sum Assured

Term Assurance Plan

HDFC Linked 0 - 60 years 18 - 60 years Minimum premium payment term of 10 - 30 years 3years Choose your sum assured, subject to a Only minimum sum assured of Rs. 1 lakh 5,10, 20 (age-based)

multiples are allowed as Sum 29

Survival benefit Death benefit Withdrawal benefit

Assured. Value of units (3rd year onwards) Value of units Higher of Sum Assured or value of Higher of Sum Assured or value units. of units. Partial or complete withdrawals are Partial withdrawal available from available from the 3rd year onwards the 3rd year onwards, provided that the Value of Units does not

Contribution Flexible contribution Investment options

go below the Sum Assured. Minimum: Rs. 16,000 p.a. Minimum: Rs. 10,000 p.a. Flexibility to increase or decrease in Available contribution. Maximiser, Balancer, Protector & 5 Preserver. Fund OptionsBalancer, Safe

Defensive

Managed,

Increase / Decrease Available. of death benefit Bonus units Top-up Switch

Managed, Liquid & Growth Not available

Available Not available Available. Minimum top-up of Rs. Available 5000. Charges - 1% of top-up. 4 free switches a year, with the Switches are free as of now. But minimum switch amount being Rs. the company reserves the right to 2000. put a charge on the switches. The policy will acquire a surrender The surrender charge is 25% of 3 value after 3 complete premium- years paying years. outstanding regular premium. No charges after 3

Surrender value

Initial Charge

years % Allocation of the premium Charges 18000- 49,999: 1st year - 80%; 2nd 1st yr-27%, 2nd yr- 27%, 3rd yr year - 92.5%; 3rd year onwards - onwards- 1% 96%. 50000 and above: 1st year - 82%; 2nd year - 92.5%; 3rd year onwards 96%. None

Admin Charge

Admin charges of Rs.180 fixed

charge per annum. Other Charges Not applicable Not applicable Fund Management The annual administrative and fund Investment charge of 0.80% of Charges management charge is 2.25% for the Fund Value across all the Maximiser, 2.25% for Balancer, funds. 30

1.50% for Protector & 0.75% for Rider Preserver. ADBR, CIBR & MSAR ABR & CIBR

Kotak Flexi Plan

Features Age Term Sum Assured Survival benefit Death benefit

VS BAJAJ ALLIANZ UNITGAIN PLUS

Kotak Flexi Plan

Bajaj Allianz Unitgain Plus 18 - 60 years 0 - 60 years Premium paying term of 3 years, 5 Minimum premium payment years, 7 years or 10 years. term of 3 years Sum Assured multiple is 1 - 25 times Minimum Sum Assured is 5 the annual premium Value of units Higher of Sum Assured decreased by the amount of withdrawals made or Higher of Sum Assured or value value of units. of units Partial withdrawals are available after Partial or complete withdrawals the 3rd policy year and after payment of are available after the 3rd years 3 year years' premiums. However Complete contribution surrender Minimum: Rs. 10,000 p.a. 31 withdrawals are available after the 1st premium. penalties will apply. Minimum: Rs. 60,000 p.a. times the premium paid. Anytime after payment of 3 full year's premiums.

Withdrawal benefit

Contribution

Flexible contribution Investment options

Available Maximiser, Preserver. Balancer, Protector Available & Equity Index Fund, Equity Plus Fund, Debt Fund, Balanced Fund, Cash Fund Available

Decrease in death Available. benefit Bonus units Top-up Switch Surrender value

Available. Not available Available. Minimum top-up of Rs. Available. Charge are 2% of the 5000. Charges - 1% of top-up. top-up amount 4 free switches a year. Three free switches every year. The policy will acquire a surrender Withdrawals are only allowed value from the 1st year onwards. after payment of 3 full year's premiums % Allocation of the premium 1st year - 76%; 97% from year 2 onwards Rs. 60.000 - Rs. 4,99,999: 1st year: 87%; 2nd and 3rd year: 96% Rs. 5,00,000 and above: 1st year: 89%; 2nd and 3rd year: 96% 5, 7 and 10 year premium paying term Rs. 60.000 - Rs. 4,99,999: 1st year: 88%; 2nd and 3rd year: 97%; 4th and 5th year: 98%;6th year onwards: 100% Rs. 5,00,000 and above: 1st year: 90%; 2nd and 3rd year: 97%; 4th and 5th

Initial Charges

% Allocation of the premium 3 year premium paying term

year: 98%; 6th year onwards: 100% Admin Charge Admin charge of Rs. 60 / month Annual admin charges of Rs. 20 Fund Management The annual investment charge is 1.50% 1.5% p.a. for a Equity Plus Charges for Maximiser, 1.00% for Balancer, Fund, 1% p.a. for Equity Index 0.75% for Protector & Preserver. Fund, No specific charges in case of Balanced Fund, 0.7% p.a. for Debt Plus Fund and Rider ADBR & CIBR 0.7% in case of Cash Plus Fund. ABR, ADBR, CI & Hospital Cash Benefit

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STUDY TAX PLANNING SOLUTIONS AVAILABLE IN THE MARKET

TAX BENEFITS ON INSURANCE
Tax benefits The Tax exemption available under our insurance and pension policies are described below: Under Sec.80C of the Income Tax Act Premiums paid upto maximum of Rs.1,00,000/- subject to maximum of 20% of Sum Assured under Endowment based plans & Unit linked Plans. Under Sec.80CCC of the Income Tax Act Premiums paid upto maximum of Rs. 1,00,000/under pension plans. However, u/s.80 CCE, the aggregate amount of deduction under section 80C, section 80CCC, and section 80CCD shall not, in any case exceed Rs. 1 lakh. Under Sec.80 D of the Income Tax Act Premiums paid towards Critical Illness Rider, subject to a maximum of Rs.10,000/- (an additional Rs 5,000 for senior citizens) Maturity Benefits are exempted Under Sec.10(10D) of the Income Tax Act. Maturity benefits are tax free. However in cases where premium exceeds 20% of Sum assured within a year, benefits paid in excess of premiums paid will be taxable.

DATA ANALYSIS & FINDINGS

1). Are you interested in products offered by the KOTAK LIFE? Yes No Will think 61% 22% 17%

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17%

Yes No
22% 61%

Will think

INTERPRETATION The good thing is that atleast the corporates were quite eager to find out what KOTAK has to offer whereas the major 39 % of the corporates were not even interested in the products as they are quite satisfied by the LIC and they are not in breaking their long relationship with them. The private players will have to play a long battle in order to ensure that they are serious player in the market. Basically corporates think that its too early to invest in private companies as they have just entered the scene and they are unsure of the security they will have about their investment. 2). Are you satisfied with your present insurer?

YES

65%

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No

35%

35%

Yes No
65%

INTERPRETATION

Here is where the challenge is. Inevitably most of the players are very satisfied with their present insurer which makes it more tough for the private players to attract the corporates. The remaining 35 % are also not very dissatisfied by the services but they are just open to new avenues and are looking forward that private companies come with good offers so that they may shift to them. 3). Where would you like to insure if given chance? ICICI BAJAJ ALLIANZ TATA AIG 16 9 10

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KOTAK MAHINDRA 16 14 NO OF PEOPLE 12 10 8 6 4 2 0

15
16 15

10

TATA AIG

ICICI

BAJAJ

KOTAK MAHINDRA

COMPANIESS INTERPRETATION

ICICI as the name ICICI GROUP is associated with it which commands huge premium in the market . Whereas in the case of KOTAK the figures represent mediocre performance after compelling and coxing the corporates and creating a strong impression whether they feel interested in doing business with the company.

4). What is peoples main concern while taking a insurance policy ? A) Security B) Returns C) Tax rebate 40% 28% 32%

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50% 40% 30% 20% 10% 0% SECURITY RETURNS FACTOR TAX REBATE

%AGE

Series1

INTERPRETATION People invest in insurance mainly because of security concern. 5). Are you aware of Kotak introduced By kotak ?

Flexi Plan

Yes No

58% 42%

%AGE OF PEOPLE

80% 60% 40% 20% 0% YES RESPONSE NO Series1

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INTERPRETATION

The awareness level among the corporate about kotak life offering services is very low and the company needs to work on it. Today is the world of marketing thus it is recommended that company should become more media friendly by advertising more through television channels, radio, newspapers, magazines, journals &editorials.

LIMITATIONS
The geographical area was very much limited to residential area & so the results are not particularly reflection of the current behavior. Biases and non-cooperation of the respondents. Due to limited time period and constrained working hours for most of the respondents, the answers at times were vague enough to be ignored. Most of the results that are spelt out have been of qualitative aspects. People are not interested in giving personal opinion

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RECOMMENDATIONS
More emphasis should be on promotional activities. Plenty of advertisement should be done through T.V, Newspaper and Radio as these medias are having maximum recall value. Total financial planning and advice should be given to every customer. More business opportunity seminars should be conducted to make people aware of the offer given. The company should quite frequently send their agent to the customer so that they should be aware of the latest offer. The company should attempt to open more and more of its branches in the country so as to promote their product publicity

CONCLUSION After working on this project I got a clear picture of the life insurance industry. Apart from this as I got to know about KOTAK MAHINDRA OLD MUTUAL LIFE Insurance Ltd.. The market share is around 1.1% and they have a target of 4% in the coming year. With the fact that the Indian economy zooming ahead at a breath-taking GDP growth rate of 8%, and expected to assume the primary dominance in the global economy along with China by 2025, according to a Goldman Sachs forecast. Considering this tremendous potential stuffed in the Indian economy, and coupled with the fact that just 20% of the total Indian population is insured, which basically amounts to just about

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220 million Indians (assuming the Indian population is 1.1 billion at present).
From my entire findings I found out that people are not completely aware about Kotak Life Insurance. As it is primarily a new company so people dont have much faith in this company. The company should try to reach the untapped rural market and semi-urban for higher growth.

BIBLIOGRAPHY
BOOKS
Research Methodology, C.R Kothar Marketing Management Kotler Philip ( o

MAGAZINES & JOUNALS

www.kotak.com www.kotaklifeinsurance.com

ANNEXURE

Do you have any life insurance policies? Yes No

If Yes: Name of the Company ________________ Name of the plan _________________ 40 Annual Amount of premium _________________

Term of plan

_________________

1. Are you satisfied with present insurer? A) YES 2. A) Security B) Returns C) Tax saving D) Others please specify_________ 3. Are you aware of Unit Linked Insurance Plans offered by various companies in India? A) ICICI C) TATA AIG E) LIC G) MAX NEW YORK B) OM KOTAK MAHINDRA D) BAJAJ ALLIANZ F) SBI H) BIRLA SUNLIFE B) NO Which are the main issues that you take into consideration while purchasing any life insurance policy?

4. Do you know how a Unit Linked Insurance Plan works? A) YES B) NO

5. Can you please highlight risk attached with them? A) HIGH B) MODERATE C) LOW 6. What is your perception about the Unit link insurance plans, are they give you a sense of security? 41

A) YES B) NO 7. Are you aware of Lifetime pension plan introduced by kotak ? A) YES B) NO 8. If you are given a choice, which one you take: A) ICICI C) TATA AIG E) LIC A) Fewer premiums B) More returns C) Complementary gifts 10. Are you interested in buying products of kotak life? A) YES B) NO B) OM KOTAK MAHINDRA D) BAJAJ ALLIANZ F) SBI

9. What other plans or flexibility you expect from Insurance companies?

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