SWOT analysis is the analysis of the internal and external factors, which have impact on the survival of any

organization. Now lets make SWOT analysis for reliance Life Insurance Company Limited.

STRENGTHS: 1) Reliance Life Insurance Company Limited is the part of the Reliance Capital. 2) The brand name is enough to sell the products easily. 3) Private placement of Rs. 10,000 crs worth of securities with RBI by the government. Led to an improvement in market securities. 4) Strong liquidity from FII was the major reason for the up move. 5) Range of products 6) Reliance has a long and strong history of solvency, financial stability. WEAKNESSES: 1) Newly established company, so people seems it risky. 2) Lack of staff. 3) Lack of advertisement, so most of the customers are not aware of the Reliance Life Insurance. OPPORTUNITY: 1) There is a vast untapped market in India. The life insurance penetration in India is approximately 2.5%. So it has large potential. 2) Intention of traditional products is to encourage long term, regular and disciplined savings to systematically build up a target fund. 3) The average insurance premium being collected by the company has been growing exponentially year on year.

THREATS: 1) The main threat is from the other players who have grabbed approximately 15% of the market share. 2) As the government has scrapped the rebate on the life insurance premium, the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments.

Unit Linked Insurance Plans.

ULIPs: A comparison
Birla SunLife ICICI(Flexi Save Prudential Plus (Lifetime II) Endowment Plan) ULIP FUND OPTIONS Enhancer fund, Builder fund, Protector fund Maximiser II (Growth), Balancer II (Balanced), Protector II (Income), Preserver Upto 100% in maximiserII; upto 40% in balancerII; nil in Protector II & 50% in Preserver HDFC SBI Life Standard Life (Unit Plus (Unit linked Regular) endowment plan) Growth fund, Balanced fund, Defensive fund, Secure fund, Liquid fund 100% in growth fund; 30-60% in balanced fund; 15-30% in defensive managed fund; nil in secure managed & Equity fund, Bond fund, Growth fund, Balanced fund Max New York Life (Life Maker Endowment Plan) Reliance Life Insurance (Reliance Market Return Plan) Equity fund, Growth fund, Balanced fund, Capital Secure fund

Growth fund, Balanced fund, Conservative fund, Secure fund

ALLOCATION TO EQUITIES

Max. 35% in Enhancer fund; max. 20% in Builder fund; max. 10% in Protector fund

upto 100% in Equity fund; upto 20% in Bond fund; 40-100% in Growth fund; 4060% in Balanced

20-70% in Growth fund; 1040% Balanced fund; 0-15% in Conservative fund; Nil in Secure fund

Upto 100% in Equity fund; upto 40% in Growth fund; upto 20% in Balanced fund; NIL in Capital Secure fund

liquid fund MINIMUM No min. 20,000 PREMIUM (RS) premium. Minimum Sum assured: Rs 200,000 (adults) else Rs 100,000 MIN/MAX AGE 30 days -60 AT ENTRY (YRS) years 0-65 years 10,000

fund 24,000 15,000 10,000

18-65 (subject to plan type) Annual premium x (term/2)-40 times the regular premium amount.

7 years - 65 12 years - 60 years years

30 days - 65 years

HOW IS SUM ASSURED CALCULATED

Face amount Annual plus policy premium x fund (term/2)

5-50 times Min sum the regular assured:100,000 premium amount

Min. sum assured: upto age 12- 5 times annual premium or Rs 500,000, whichever is lower. Above age 12- 5 times annual premium. Max. sum assured: upto age 12 500,000. Above age 12: No limit Yes

RIDERS AVAILABLE

Yes

Yes

Yes

Yes

Yes

INITIAL YEARS' 29.9%-65% in first year. EXPENSES 5%-7.5% in 2nd and 3rd years.

25% in the 1st & 2nd year,3% in the 3rd & 4th year.

5%-30% in initial 2-Years (depends upon the annual premium

10%-25% in 25% in first year the 1st plus, 20% in 2nd year. 3year. 7.5% in 2nd & 3rd year. 3-5% in 4th

10%-20% in the first year. (Depends on the policy tenure)

amount)

and 5th year. 1.5% for 0.90% to 1.25% equity fund. of net assets in 1.35% for the fund growth fund. 1.25% for balanced fund. 1% for bond fund. 2 Equity fund and Growth fund: 1.75%; Balanced fund and Capital Secure fund: 1.50%

FUND 1% MANAGEMENT CHARGES

Maximiser 0.80% II- 1.5%; balancer1.0%; protector II & preserver0.75%

EXPENSES 5 AFTER INITIAL YEARS (%)

Bid-Offer spread 5 of 5% with 1% for rounding of the premium on its allocation to the funds. 50 40

FIXED MONTHLY EXPENSES (RS) *

22. Plus annual charges as applicable. **

60

20

60

PARTIAL 2 free partial Above 1 WITHDRAWALS witdrawals in partial witdrawal ALLOWED a year. will be charged @ Rs 100 CHARGES ON TOP-UPS (%) 2 1

Above 6 partial witdrawals will be charged @ Rs 250 2.5% for initial two years. 1% thereafter.

Above 4 Yes. partial witdrawals will be charged @ Rs 100 1

Rs 100 for every withdrawal.

Nil. But value is 2 subject to the bid-offer spread.

SWITCH CHARGES

2 free 4 free 24 free 4 free 2 free switches switches in a switches in switches in a switches in per year. year. Rs 100 a year. Rs year. Rs 100 a year. Rs Company may

1 free switch every year. 1% of the amount

for additional 100 for switches additional thereafter. switches thereafter.

for additional 100 per switches switch thereafter. thereafter.

charge upto Rs 500 per switch thereafter

switched thereafter (subject to min. Rs 100 and max. Rs 1,000).

Group-Term Life Insurance

From 11th year onwards this charge will increase at the rate of 3% p.a. This charge will not exceed Rs.100 per month at inception and the maximum rate of inflation is 5% p.a

GROUP TERM LIFE INSURANCE Total Amount of Coverage IRC section 79 provides an exclusion for the first $50,000 of group-term life insurance coverage provided under a policy carried directly or indirectly by an employer. There are no tax consequences if the total amount of such policies does not exceed $50,000. The imputed cost of coverage in excess of $50,000 must be included in income, using the IRS Premium Table, and are subject to social security and Medicare taxes. Carried Directly or Indirectly by the Employer A taxable fringe benefit arises if coverage exceeds $50,000 and the policy is considered carried directly or indirectly by the employer. A policy is considered carried directly or indirectly by the employer if: 1. The employer pays any cost of the life insurance, or 2. The employer arranges for the premium payments and the premiums paid by at least one employee subsidize those paid by at least one other employee (the straddle rule). The determination of whether the premium charges straddle the costs is based on the IRS Premium Table rates, not the actual cost. You can view the Premium Table in the group-term life insurance discussion in Publication 15-B. Because the employer is affecting the premium cost through its subsidizing and/or redistributing role, there is a benefit to employees. This benefit is taxable even if the employees are paying the full cost they are charged. You must calculate the taxable portion of the premiums for coverage that exceeds $50,000. Not Carried Directly or Indirectly by the Employer A policy that is not considered carried directly or indirectly by the employer has no tax consequences to the employee. Because the employees are paying the cost and the employer is not redistributing the cost of the premiums through an insurance system, the employer has no reporting requirements. Example 1 - All employees for Employer X are in the 40 to 44 year age group. According to the IRS Premium Table, the cost per thousand is .10. The employer pays the full cost of the insurance. If at least one employee is charged more than .10 per thousand of coverage, and at least one is charged less than .10, the coverage is considered carried by the employer. Therefore, each employee is subject to social security and Medicare tax on the cost of coverage over $50,000. Example 2 - The facts are the same as Example 1, except all employees are

charged the same rate, which is set by the third-party insurer. The employer pays nothing toward the cost. Therefore there is no taxable income to the employees. It does not matter what the rate is, as the employer does not subsidize the cost or redistribute it between employees. Coverage Provided by More Than One Insurer Generally, if there is more than one policy from the same insurer providing coverage to employees, a combined test is used to determine whether it is carried directly or indirectly by the employer. However, the Regulations provide exceptions that allow the policies to be tested separately if the costs and coverage can be clearly allocated between the two policies. See Regulation 1.79 for more information. If coverage is provided by more than one insurer, each policy must be tested separately to determine whether it is carried directly or indirectly by the employer. Coverage for Spouse and Dependents The cost of employer-provided group-term life insurance on the life of an employees spouse or dependent, paid by the employer, is not taxable to the employee if the face amount of the coverage does not exceed $2,000. This coverage is excluded as a de minimis fringe benefit. Whether a benefit provided is considered de minimis depends on all the facts and circumstances. In some cases, an amount greater than $2,000 of coverage could be considered a de minimis benefit. See Notice 89-110 for more information. If part of the coverage for a spouse or dependents is taxable, the same Premium Table is used as for the employee. The entire amount is taxable, not just the amount that exceeds $2,000. Example 3 - A 47-year old employee receives $40,000 of coverage per year under a policy carried directly or indirectly by her employer. She is also entitled to $100,000 of optional insurance at her own expense. This amount is also considered carried by the employer. The cost of $10,000 of this amount is excludable; the cost of the remaining $90,000 is included in income. If the optional policy were not considered carried by the employer, none of the $100,000 coverage would be included in income.

PRODUCTS OF RELIANCE LIFE INSURACNE

Individual Plans

Reliance Endowment Plan Reliance Special Endowment Plan Reliance Cash Flow Plan Reliance Child Plan Reliance Term Plan Reliance Whole Life Plan Reliance Market Return Plan Reliance Golden Years Plan

Employee Benefit Plans

Reliance Group Term Assurance Policy Reliance EDLI Scheme Reliance Group Gratuity Policy Reliance Group Superannuation Policy