A PROJECT REPORT ON Organization study & study of problem related to Recruitment, Training & Motivation level of Emloyees In the

partial fulfillment of the Master of Business Administration Program 20 0!20

Undertaken at

H !" #tandard $ife %nsurance

&RE!'"E
Man has found out himself man" things to ma#e himself and his near dear ones happ"$ Insuran%e is one su%h in&ention of man$ Insuran%e is man" splendid things$ It is not 'ust the relu%tant entr" and the periodi%al reminders for pa"ing the premium and the last re%eipt of the %laim mone" (hi%h ma" loo# large or a mere pittan%e depending upon (hether the poli%" (as in for%e earning handsome )onus or had )een languishing in a state of suspended animation$ insuran%e is a (onderful (orld of mortalit" rates* utmost good faith* medi%al e+aminations (ith EC, and treadmill e+er%ises* )onuses and no %laim dis%ounts and a host of other s%ien%e and arts (hi%h the insuran%e people learn in order to pro&ide (hat the" %all finan%ial se%urit" and pea%e of mind (hi%h no other in&ention of man %an mat%h$ In this pro'e%t I tr" to sho( the performan%e of the &arious funds of the -./C standard life insuran%e %ompan" limited$ In the first %hapter of this pro'e%t I ha&e fo%us on the introdu%tion* histor"* needs* importan%e of the insuran%e and along (ith this I also fo%us on the insuran%e industr" in the India$ In the se%ond %hapter I ha&e fo%us on the insuran%e pla"ers in India and t"pes of the plans$ In the third %hapter of this pro'e%t I ha&e dis%uss on the &arious resear%h methodologies and o)'e%ti&es of this stud" and the limitation of the stud"$ In the fourth %hapter of the pro'e%t gi&e introdu%tion a)out the -./C standard life insuran%e %ompan" limited and it0s &ision* mission and &alue$ It fo%uses on &arious 12IP plans$ In the fifth %hapter I ha&e fo%used that ho( to design a 1nit lin#ed plan and t"pes of the unit lin#ed plans$ The si+th %hapter is &er" important )e%ause this %hapter is the main part of m" stud" in this %hapter I ha&e sho( the performan%e of the &arious funds of the -./C standard life insuran%e %ompan"$ (hat is the %urrent position of the fund in mar#et and (hat is the %urrent rate of return of the fund all this sho(s )" the &arious %harts and data and the last %hapter is related to the %on%lusion of this pro'e%t$ The follo(ing resear%h (or# ta#es a loo# on su%h persuasion of the insuran%e
2

%ompanies and the (a" the" deal (ith people regarding the support of life in old age! The Pension Plans$

'"()O*$E +EME)T#
I (ould li#e to than# Dr. Dipin Mathur for supporting me during this pro'e%t and pro&iding me an opportunit" to learn outside the %lass room$ It (as a trul" (onderful learning e+perien%e$ I (ould li#e to than# Mr,Ravi (-abya -ead of the department for pro&iding me this opportunit" to (or# on this pro'e%t$ I (ould li#e to than# m" pro'e%t guide Mr$ B$3$ Panda* 4ales .e&elopment Manager -./C 4tandard 2ife Insuran%e* 5 i n i m a " %ommer%ial % o m p l e + u d a i a p o l e * 1 d a i p u r for guiding me through m" summer internship and resear%h pro'e%t$ -is en%ouragement* time and effort are greatl" appre%iated$ I (ish to e+tend m" sin%ere 1 d a i p u r Mr$ Pra&een 'ha for his insight$
I extend my sincere thanks to Director Prof. N.S Rao and I would also like to thank the supporting staff of ADVENT INSTITUTE OF MANAGEMENT STUDIES for their help and co! operation throughout my pro"ect.

gratitude

to

the

)ran%h

manager of -./C 42IC* 5 i n i m a " % o m m e r % i a l % o m p l e + u d a i a p o l e *

I (ould li#e to dedi%ate this pro'e%t to m" parents$ 6ithout their help and %onstant support this pro'e%t (ould not ha&e )een possi)le$ 2astl" I (ould li#e to than# all m" friends for their help in %ompletion this pro'e%t and the respondents (ho offered their opinions and suggestions through the sur&e" that (as %ondu%ted )" me in 1 d a i pur$

T-an.ing /ou
#

0-arti tan.

E"$'R'T%O)

I here)" de%lare that this pro'e%t (or# 7Organization study & study of problem related to Recruitment, Training & Motivation level of Employees has )een %arried out )" me in partial fulfillment of Master of 0usiness administration1M0'2 is an own record carried out %y me under the super&ision of Mr. Dipin Mathur Pro"ect 'ead. I also de%lare that this pro'e%t is originall" prepared )" me and not )een su)mitted to an" 1ni&ersit" for the a(ard of an" degree$

Pla%e8 1daipur .ate8

4ignature
0-arti Tan.

E3E"4T%5E

#4MM'R/

-./C 4tandard 2ife Insuran%e is the oldest life insuran%e %ompan" in the (orld$ It is the largest insurer of 1$3$ and is 29 th largest %ompan" of the (orld$ In India* the %ompan" is

dealing in the mar#eting of life insuran%e produ%ts and unit lin#ed in&estment plans$ The %ompan" fa%es %ompetition from all pri&ate pla"ers in insuran%e industr" )ut its ma'or %ompetitor is ICICI Prudential 2ife Insuran%e Compan" 2imited$ To %ompete (ith its ri&al -./C 42IC ha&e to %ome up (ith produ%ts at %heaper pri%es (ith the same #ind of ser&i%es (hi%h the" are pro&iding to their esteem %ustomers$ The" %an tr" to in%rease their mar#et share )" %oming up (ith the produ%ts (hi%h are of short term period and (ith small premium$ -./C 42IC has no( )eing started to ad&ertise on different media as its %ompetitors do$ But the dra()a%# (hi%h I feel is that the" are fo%using on fe( of their popular produ%ts onl"$ Till date Indian %ustomer has a false per%eption a)out the insuran%e : the" feel that it (ould )enefit them if the" do not li&e through the poli%" term$ /amil" responsi)ilities and high returns are the t(o main reasons for the people to in&est in insuran%e$ Optimum return of ;!20< must )e pro&ided to %onsumers to #eep them interested in pur%hasing insuran%e$ On the (hole -./C 42IC is a good pla%e to (or# at$ E&er" ne( re%ruit is pro&ided (ith e+tensi&e training on unit lin#ed funds and produ%t of -./C 42IC$ 6ith an impro&ement in the sales te%hni=ues used* a fair )it of ad&ertising and modifi%ations to the e+isting produ%t portfolio$ -./C is set to %apture the insuran%e mar#et in India as it has around the glo)e$

Content
'c.no6ledgement eclaration "ertificate &reface E7ecutive summary

"-apter

&age )o,

"H'&TER 8 9:
Introdu%tion of insuran%e Role of insuran%e Classifi%ation of insuran%e -istor" of life insuran%e )usiness Needs of life insuran%e Benefits of life insuran%e Role of life insuran%e 2a( and regulations Insuran%e industr" in India 6hat is human life &alue 6hat is %ontra%t of insuran%e 2 2; 2@ 2 2 > ; ? 9 0

"H'&TER ; 9:
The insuran%e pla"er T"pes of plan
*

29 >

"H'&TER < 9:
Resear%h methodolog" O)'e%ti&es of resear%h .ata %olle%tion Te%hni=ues used in this stud" 4our%es of data O)'e%ti&es of the stud" 2imitation of the stud" >> >A >A >? >? >9 >9

"H'&TER = 9:
OrganiBational profile 6h" -./C standard life 5ision* mission* &alues A0 A@ A?

"H&TER > 9:
Produ%t portfolio Introdu%tion to unit lin#ed produ%t Benefits of unit lin#ed plan .esign of a unit lin#ed plan T"pes of unit lin#ed plan ; ;A ;@ @0 @>

"H'&TER ? 9:
Introdu%tion of fund Performan%e 4tatisti%s Indi&idual pension portfolio 90 9?

"H'&TER @ 9:
Con%lusion Re%ommendation Appendi+
Bi)liograph" +

%)TRO 4"T%O) O! %)#4R')"E

*H'T %# %)#4R')"E Insuran%e is )asi%all" ris# management de&i%e$ The losses to assets resulting from natural %alamities li#e fireC flood* earth=ua#e* a%%ident et%$ are met out of the %ommon pool %ontri)uted )" large num)er of persons (ho are e+posed to similar ris#s$ This %ontri)ution of man" is used to pa" the looses suffered )" unfortunate fe($ -o(e&er the )asi% prin%iple is that loss should o%%ur as a result of natural %alamities or une+pe%ted e&ents* (hi%h are )e"ond the human %ontrol$ 4e%ondl" insured person should not ma#e an" gains out of insuran%e$ It is natural to thin# of insuran%e of ph"si%al assets su%h as motor %ar insuran%e or fire insuran%e )ut often )e forget that %reator all these assets is the human )eing (hose effort ha&e gone along (a" in )uilding up to assets$ In that s%ene human life is a uni=ue in%ome generating assets$ 1nli#e ph"si%al assets* (hi%h de%rease (ith the passage of time* the indi&idual )e%ome more e+perien%ed and mature as he ad&an%es in age$ This raises his earning %apa%it" and the purpose of life insuran%e is to prote%t the in%ome to indi&idual and pro&ide finan%ial se%urit" to his famil"* (hi%h is dependent on his in%ome in the e&ent of his pre!mature death$ The indi&idual also himself also needs finan%ial se%urit" for the old age or on his )e%oming permanentl" disa)led (hen his in%ome (ill stop$ Insuran%e also has an element of sa&ing in %ertain %ases$ Insuran%e is rupees A00 )illion )usiness in India and "et its spread in the %ountr" is relati&el" thin$ Insuran%e as a %on%ept has not )eing a)le to ma#e head(a" in India$ Presentl" 2IC en'o"s a monopol" in 2ife Insuran%e )usiness (hile ,IC en'o"s it in general insuran%e )usiness$ There has )een &er" little option )efore the %ustomer to de%ide the insurer$ A su%%essful passage of the IRA )ill has %lear the (a" of pri&ate se%tor operators in %olla)oration (ith their o&erseas partners$ It is li#el" to )ring in a more professional and fo%used approa%h$ More o&er the foreign pla"ers (ould )ring sophisti%ated a%tuarial te%hni=ues (ith them* (hi%h (ould fa%ilitate the insurer to effe%ti&el" pri%e the produ%t$ It is &er" important that the trained mar#eting professionals (ho are a)le to %ommuni%ate spe%ifi% features of the poli%" should sell the poli%"$ In the ne+t millennium all these a%ti&ities (ould pla" a %ru%ial role in the o&erall de&elopment
,

and maturit" of the insuran%e industr"$

+E)ER'$

E!%)%T%O)9 :
In the (ords of John Magee* 7Insuran%e is a plan )" (hi%h large

num)ers of people asso%iate themsel&es and transfers to the shoulders Of all ris#s that atta%h to indi&idualsD

!4) 'ME)T'$ E!%)%T%O)9 :

In the (ords of . 4 -ansell* 7Insuran%e ma" )e defined as a so%ial de&i%e pro&iding finan%ial %ompensation for the effe%ts s%heme$D of misfortune* the pa"ments )eing made from the a%%umulated %ontri)utions of all parti%ipating in the

"O)TR'"T4'$

E!%)%T%O)9 :

In the (ords of 'usti%e Tindall 7Insuran%e is a %ontra%t in (hi%h a sum of mone" is paid to the assured as %onsideration of insurer0s in%urring the ris# of pa"ing a large sum upon a gi&en %ontingen%"$

"H'R'"TER%#T%"# O! %)#4R')"E
4haring of ris# Co!operati&e de&i%e E&aluation of ris# Pa"ment on happening of spe%ial e&ent
1-

The amount of pa"ment depends on the nature of losses in%urred

Role of %nsurance in Economic evelopment

/or e%onomies de&elopment* in&estment is ne%essar"$ In&estment is made out of sa&ings$ A life insuran%e %ompan" is a ma'or instrument for the mo)iliBation of sa&ings of people* parti%ularl" from the middle and lo(er in%ome groups$ These sa&ings are %hanneled into in&estment for e%onomi% gro(th$

As on > $>$2002*the total in&estment of 2IC e+%eed rs$2A;* 000 %orers* of (hi%h more than rs$ >0* 000 %orers (ere dire%tl" in go&ernment related se%urities* more than rs$ 2000%rores in hosing loan and Rs$A000 %orers in (ater suppl" and se(erage s"stems$

The 2IC is not an e+%eption$ All good life insuran%e %ompanies ha&e huge funds* a%%umulated through the pa"ment of small amount of premium of indi&idual$ These funds are in&ested in (a"s that %ontri)uted su)stantiall" for the e%onomi% de&elopment of the %ountries in (hi%h the" do )usiness$

A life insuran%e %ompan" (ill ha&e large funds$ These amounts are %olle%ted )" (a" of premiums$ E&er" premium represents a ris# that is %o&ered )" that premium$ In effe%t* therefore* these &ast amounts represent pooling of ris#s$ These fund are %olle%ted and held in trust for the )enefit of the poli%"holders$

.ithout insurance trade and commerce will find it difficult to face the impact of ma"or perils like fire earth/uake floods etc.

11

"lassification of insurance business9

The insuran%e is )roadl" %lassified as8 $2ife insuran%e )usiness 2$ Non!life insuran%e )usinessE,eneral Insuran%e )usiness$

$ife insurance business9

It is the )usiness of effe%ting %ontra%ts of insuran%es upon human life in%luding an" %ontra%t (here)" the pa"ment of mone" is assured on death or on the happening of an" Contingen%" to the dependent on human life and an" %ontra%t (hi%h is su)'e%t to the pa"ment of premiums for a term and shall )e deemed to in%lude8 The granting disa)ilit" and dou)le and triple indemnit" a%%ident )enefits* if so pro&ided in the %ontra%t of insuran%e$ The granting of annuties of human life$ The granting of super!annuation allo(an%e and annuities pa"a)le out of an" fund appli%a)le solel" to the relief and maintenan%e of the person engaged or (ho ha&e )een engaged in an" parti%ular profession* trade or emplo"ment or of the dependents of su%h persons$

)on life business 9

insurance

Con&entional %lassifi%ation of insuran%e )usiness8 $ /ire insuran%e 2$ Marine insuran%e >$ Mis%ellaneous insuran%e Fa%%identG Modern %lassifi%ation of general insuran%e $ Insuran%e of person 2$ Insuran%e of propert" >$ Insuran%e of interest A$ Insuran%e of lia)ilit"

12

History of $ife %nsurance

2ife insuran%e or life assuran%e is a %ontra%t )et(een the poli%" o(ner and the insurer* (here the insurer agrees to pa" a sum of mone" upon the o%%urren%e of the insured indi&idualHs or indi&idualsH death or other e&ent* su%h as terminal illness or %riti%al illness$ In return* the poli%" o(ner For poli%" pa"erG agrees to pa" a stipulated amount %alled a premium at regular inter&als or in lump sums$ There ma" )e designs in some %ountries (here )ills and death e+penses plus %atering for after funeral e+penses should )e in%luded in Poli%" Premium$ In the 1nited 4tates* the predominant form simpl" spe%ifies a lump sum to )e paid on the insuredHs demise$ As (ith most insurance poli%ies* life insuran%e is a %ontra%t )et(een the insurer and the poli%" o(ner Fpoli%"holderG (here)" a )enefit is paid to the designated 0eneficiary For Benefi%iariesG if an insured e&ent o%%urs (hi%h is %o&ered )" the poli%"$ To )e a life poli%" the insured e&ent must )e )ased upon life For li&esG of the people named in the poli%"

NEED OF THE LIFE INSURANCE: The original* )asi% intention of life insuran%e is to pro&ide for one0s famil" and perhaps others in the e&ent of death$ Originall"* poli%es (ere to pro&ide for short periods of time* %o&ering temporar" ris# situations* su%h as sea &o"ages$ As life insuran%e )e%ame more esta)lished$ It (as realiBed (hat a useful tool it (as in a num)er of situations* in%luding8

$ Temporary needsA t-reats9

The original purpose of 2ife Insuran%e remains an important element* namel" pro&iding for repla%ement of in%ome on death et%$

1#

;, Regular #aving9

Pro&iding one0s famil" and oneself* as a medium to long term e+er%ise Fthrough a series of regular pa"ment of premiumsG$ This has )e%ome more rele&ant in re%ent times as people see# finan%ial independen%e from their famil"$

<, %nvestment9
Put simpl"* the )uilding up of sa&ing (hile safeguarding it from ra&ages of inflation$ 1nli#e regular sa&ing produ%ts are traditionall" lump sum in&estments* (here the indi&idual ma#es are one time pa"ment$

=, Retirement9
Pro&ision for one0s on later "ears has )e%ome in%reasingl" ne%essar"* espe%iall" in %hanging %ulture and so%ial en&ironment$ One %an )u" a suita)le insuran%e poli%"* (hi%h (ill pro&ide periodi%al pa"ments in one0s old age$

0E)E!%T#9
8, %t is superior to traditional saving mac-ine As (ell as pro&iding a se%ure &ehi%le to )uild up sa&ing et%$ it pro&ides pie%e of mind to the poli%" holder$ In the e&ent ultimatel" death* of sa" the main earner in the famil"* the poli%" (ill pa" out guaranteed sum assured* (hi%h is li#el" to )e signifi%antl" more then the total premiums paid$ 6ith more traditional sa&ing &ehi%les* su%h as fi+ed deposits* the onl" return (ould )e the amount in&ested plus an" interested a%%rued$

1$

;, %t encourages saving and forces t-rift9 On%e an insuran%e %ontra%t has )een entered into* the insured has an o)ligation to %ontinue pa"ing premiums* until the end of the term of poli%"* other(ise the poli%" (ill lapse$ In other (ords* it )e%omes %ompulsor" for the insure to sa&e regularl" and spend (isel"$ In %ontrast sa&ings held in a deposit a%%ount %an )e a%%essed or stop easil"$ <, %t provides easy settlement and protection against creditors On%e a person appointed for re%ei&ing the )enefits or a transfer of rights is made FassignmentG* a %laim under the life insuran%e %ontra%t %an )e settled easil"$ In addition* %reditors ha&e no right to an" mommies )" the insurer* (here the poli%" is (ritten under trust$ 1nder the married (oman0s a%t the mone" a&aila)le from the poli%" forms a #ind of trust (hi%h %reditors %an not %laim on$

=, %t can be encased and facilities borro6ing9 4um %ontra%ts ma" allo( the poli%" %an )e surrendered for a %ash amount* if poli%" holder is not in a position to pa" the premium$ A loan* against %ertain poli%"* %an )e ta#en for a temporar" period to tide o&er the diffi%ult"$ Presen%e of life insuran%e poli%" fa%ilitates %redit for personal or %ommer%ial loans as it %an )e offered as %ollateral se%urit"$

>, Ta7 relief 9 The poli%" holder o)tains in%ome ta+ re)ates )" pa"ing the insuran%e premium$ The spe%ified form of sa&ing (hi%h en'o"s a ta+ re)ate uEs 99 of the in%ome ta+ a%t$ In%lude 2ife Insuran%e premiums and %ontri)ution to a re%ogniBed P/ et%$

1(

RO$E O! $%!E %)#4R')"E IIIIIIIIIIIIIIIIIIIIIIII

Role 89 $ife %nsurance as investment

Insuran%e is an attra%ti&e option for in&estment$ 6hile most people re%ogniBe the ta+ hedging and ta+ sa&ing potential of life insuran%e* man" are not a(are of its ad&antages as an in&estment option as (ell as$ Insuran%e produ%ts "ield more %ompared to regular in&estment option as this is )esides the added in%enti&es Fread )onusesG offered )" insurers$ Jou %an not %ompare an insuran%e produ%t (ith other in&estment s%hemes for simple reason that it offers finan%ial prote%tion from ris#s* something that is the missing in non! insuran%e produ%ts$ Infe%t* the premium "ou pa" for a in&estment against ris#$ Thus* )efore %omparing (ith other s%heme* "ou must a%%ept that a part of total amount in&ested in life insuran%e goes to(ards pro&iding for the ris# %o&er* (hile the rest is used for sa&ings$ In life insuran%e* unli#e non!produ%ts* "ou get maturit" )enefits on sur&i&al at the end of the term$ In other (ords* if "ou ta#e a life insuran%e poli%" for 20 "ears and sur&i&e the term the amount in&estor as premium in the poli%" (ill %ome )a%# to "ou (ith added returns$ In the unfortunate e&ent of death (ithin the tenure of the poli%"* the famil" of the de%eased (ill re%ei&e the sum assured$ No(* let us %ompare insuran%e as an in&estment options$ If "ou in&est Rs$ 0000E! in PP/* "ear mone" gro(s to Rs$ 0K;0 at K$;< interest o&er a "ear$ But in this %ase* the a%%ess to "our funds (ill )e limited$ One %an (ithdra( ;0< of the initial deposit onl" after four "ears$ The sane amount of Rs$ 0000E! %an gi&e "ou an insuran%e %o&er of up to appro+imatel" Rs$ ; to 2 la%#s$ F.epending upon the plan* age and medi%al %ondition of life insure et%$G And this amount %an )e%ome immediatel" a&aila)le to the nominee of the poli%" holder on death$ Thus insuran%e is a uni=ue in&estment a&enue that deli&ers sound returns in addition to prote%tion$
1)

1*

Role ;9 $ife %nsurance as Ris. "over

/irst and foremost* insuran%e is a)out ris# %o&er and prote%tion : finan%ial prote%tion* to )e more pre%ise!to help out last on%e unpredi%ta)le losses$ .esigned to safe guard against losses suffered on a%%ount of an unforeseen e&ents$ Insuran%e pro&ide "ou (ith that uni=ueness sense of se%urit" that no other form of in&estment pro&ides$ B" )u"ing life insuran%e* "ou )u" pea%e of mind and are prepared to fa%e an" finan%ial demand that (ould hit the famil" in%ase of an untimel" demise$ To pro&ide su%h prote%tion* insuran%e firms %olle%t %ontri)utions for man" people (ho fa%e the same ris#$ A loss %laim is paid out of the total premium %olle%ted )" the insuran%e %ompanies* (ho a%t as trustees to the monies$ Insuran%e also pro&ides a safeguard in the %ase of a%%ident or a drop in in%ome after retirement$ An a%%ident or disa)ilit" %an )e de&astating and an insuran%e poli%" %an lend timel" support to the famil" in su%h time$ It also %omes as a great help (hen "ou retire* in %ase unto(ard in%ident happens during the term in the poli%"$ 6ith the entr" of pri&ate se%tor pla"er in insuran%e* "ou ha&e a (ide range of produ%ts and ser&i%es to %hoose from$ /urther* man" of these %an )e further %ustomiBed to fit indi&idualEgroup spe%ifi% needs %onsidering the amount "ou ha&e to pa" no(C it0s (orth )u"ing some e+tra sleep$

RO$E <9 $ife %nsurance as Ta7 &lanning

Insuran%e ser&es as an e+%ellent ta+ sa&ing me%hanism too$ The ,o&t$ of India has offered ta+ in%enti&es to life insuran%e produ%ts in order to fa%ilitate the flo( of funds into produ%ti&e assets$ 1E4 99 of In%ome Ta+ A%t K@ * an indi&idual is entitled to re)ate 20< on the annual premium pa"a)le on hisEher life and life of hisEher %hildren or adult %hildren$ The re)ate is redu%i)le from ta+ pa"a)le )" a indi&idual or -indu undi&ided famil"$ This re)ate is %an )e a&ailed up to a ma+imum of Rs 2000E! on pa"ment of "earl" premium of Rs @0000E! a "ear* "ou %an )u" an"thing up(ard of Rs 00000E! in sum assured$ This means that "ou get Rs 2000E! ta+ )enefit$ This re)ate is dedu%ti)le
1+

from the ta+ pa"a)le )" an indi&idual or a -indu undi&ided famil"$

$'* ')

RE+4$'T%O)#

%nsurance act 8B<C

The insuran%e a%t amended in K>9* (hi%h %ame into effe%t from
st

Jul"

K>9* and (as

K;0 and later in

KKK* is the prin%iple ena%tment related to the

)usiness of insuran%e in India$ The a%t %ontains pro&isions regarding li%ensing of agents and their remuneration* prohi)ition of re)ates* and prote%tion of poli%"holder0s interest$ It also has pro&ision pla%ing limits on the e+penses of insurer* use of funds and patterns of in&estments* maintaining sol&en%" le&els* and %onstitution of insuran%e asso%iation and insuran%e %oun%il and the tariff ad&isor" %ommittee foe general insuran%e$ 4e%tion 2F;AG defines L%hief agent0 as a person (ho* not )eing a salaried emplo"ee of an insurer* in %onsideration of %ommission FIG perform an" administrati&e and organiBing fun%tion for the insurer and FiiG pro%ures life insuran%e )usiness for the insurer )" emplo"ing or %ausing to )e emplo"ed* insuran%e agents on )ehalf of the insurer$ 4e%tion 2F ?G defines a Lspe%ial agent0 as one (ho pro%ures life insuran%e )usiness* in %onsideration of %ommission* emplo"ing or %ausing to )e emplo"ing insuran%e agents on )ehalf of the insurer$ -e onl" pro%ures )usiness through agents )ut dose not perform administrati&e fun%tions li#e a %hief agents$ 4pe%ial agents %an (or# in the life insuran%e )usiness* not in a general insuran%e )usiness$ Indi&iduals %ompanies or firm %an )e appointed as %hief agents or spe%ial agents$ The indi&iduals* the dire%tor of %ompanies or partners of firms* (anting to )e%ome %hief agents or spe%ial agents must )e free of the dis=ualifi%ation spe%ified in %onne%tion (ith agents$ 4e%tion A2A pro&ides for the registration of %hief agents and spe%ial agents$ Certifi%ates to fun%tions as su%h are to )e insured after registration$ The %ertifi%ates are &alid for 2 month and ma" )e rene(ed$ The pro&ision also stipulated the
1,

num)er of insuran%e agents that %hief agents ma" emplo" dire%tl" or through spe%ial agents and the minimum )usiness the" ha&e to do$ 4imilarl"* there are stipulations a)out the num)er of agents to )e emplo"ed )" a spe%ial agents and the minimum )usiness to )e done$ Rene(al of %ertifi%ate is su)'e%t to %omplian%e (ith these re=uirements$ No %hief agents or spe%ial agents (ere registered till the end of 200 $ The a%t &est the IR.A (ith po(ers to inspe%t do%uments* to appoint add! itional dire%tor* to issue dire%tion* to ta#e o&er the management of an insurer and to appoint administration$ The IR.A has po(ers to ad'udi%ate on disputes )et(een insurer and intermediaries or )et(een intermediaries and to de%ide on disputes relating to settlement of %laim of amount and e+%eed Rs 2000$ not ma" disputes are li#el" to )e referred to the authorit" under this se%tion* as the amount of Rs 2000 is &er" small$

$ife %nsurance "orporation 'ct, 8B>?

This a%t (as the )asis for the esta)lishments of the 2$I$C as a )od" %orporate %onsisting of not more than @ mem)ers appointed )" the %entral go&ernment* one of them )eing the %hairmen$ The %orporation0s dut" (as to %arr" on life insuran%e )usiness to the )est ad&antage of the %ommunit"$ 4e%tion >0$ga&e the 2$I$C e+%lusi&e pri&ilege to transa%t life insuran%e )usiness in India$ This e+%lusi&e pri&ilege %eased as a result of the amendment made in KKK$ These amendments (ere made in pursuan%e of the go&ernment0s poli%" of e%onomi% reforms and insuran%e %ompanies (ere registered and had %ommen%ed life insuran%e )usiness till > $>$2002$

%nsurance Regulatory and

evelopment 'ut-ority 'ct 8BBB

2-

This a%t* passed in .e%em)er KKK* pro&ided for the esta)lishment of the IR.A to prote%t the interest of holders of insuran%e poli%ies* to regulate* promote and ensure orderl" gro(th of insuran%e industr" and for matter %onne%ted there(ith or in%idental there to$ It also sought to amend the insuran%e a%t* K>9 the life insuran%e %orporation a%t K;@ and the general insuran%e )usiness a%t* K?2$

The IR.A is a %orporate )od"$ It is ad&ised )" an insuran%e ad&isor" %ommittee %onsisting of not more than 2; mem)er to represent the interest of %ommer%e* industr"* transport* agri%ulture* %onsumer forums* sur&e"ors* agents* intermediaries* organiBation engaged in safet" and loss pre&ention* resear%h )odies and emplo"ees0 asso%iation in the insuran%e se%tor$ It repla%es the L%ontroller of insuran%e0 to administer the pro&ision of the insuran%e a%t$ That in%ludes registration* li%ensing* and la"ing do(n regulations for the proper %ondu%t of the )usiness and the prote%tion of the interest of poli%"holders$

The regulations framed )" the IR.A* in so far as the" affe%t the (or#ing of the agents* are reprodu%ed in full at the end of this %ourse$

OM04 #M')
In e+er%ise of the po(ers %onferred )" su)!se%tion F G of se%tion A of the

insuran%e a%t* the %entral go&ernment has framed rules #no(n as Redressal of pu)li% grie&an%es rules* KK9 (here)" Om)udsmen are appointed$ The go&erning )od" of the insuran%e %oun%il appoints om)udsmen$ Their fun%tion is to resol&e %omplaints in respe%t of disputes )et(een poli%"holders and %omplaints in respe%t of disputes )et(een poli%"holders and insurers in %ost effe%ti&e* effi%ient and impartial manner$ The %omplaints to the Om)udsman ma" relate to FaG partial or total repudiation of %laims F)G an" dispute regarding premium paid or pa"a)le in terms of the poli%" F%G an" disputes on the legal %onstru%tion of the poli%" relating to %laims FdG dela" in
21

settlement of %laims FeG non! issue of an" insuran%e do%ument to %ustomers after re%eipt of premium$ The Om)udsman shall a%t as %ounsel and mediator in matter (ithin its terms of referen%e$ It is not a 'udi%ial authorit"$ It has no right to summon (itnesses$ It has to ma#e its de%ision on the )asis of do%ument su)mitted to it$ The %omplaints and the insurer are allo(ed to ma#e personal su)mission$ But la("ers are not permitted to argue the %ase$ Complaints to the Om)udsman lie onl" (hen the insurer had re'e%ted the %omplaint or no repl" (as re%ei&ed (ithin one month of the %omplaint or the repl" (as not satisfa%tor"$ A %omplaint %an )e made (ithin one "ear after the insurer had re'e%ted the representation$ The su)'e%t matter should not )e alread" )efore an" %ourt or %onsumers0 forum or ar)itration$ The Om)udsman is e+pe%ted to ma#e a re%ommendation (ith in one month from the date of re%eipt of %omplaint$ If the %omplaint a%%epts this re%ommendation* the insurer had to %ompl" (ithin ; da"s and inform the Om)udsman a%%ordingl"$ If the %omplaints dose not a%%ept the Om)udsman0s re%ommendation* the Om)udsman shall pass an a(ard an in (riting* starting the amount a(arded (hi%h shall not )e in e+%ess of (hat is ne%essar" to %o&er the loss suffered )" the %omplaint as a dire%t %onse=uen%e of the insured peril or for an amount not e+%eeding Rs20* 00*000* (hi%he&er is lo(er$ The a(ard has to )e passed (ithin > month$ the %omplaint has to intimate his a%%eptan%e of the a(ard (ithin one month )" a letter of a%%eptan%e to the insurer and the insurer has to %ompl" (ithin ; da"s and inform the Om)udsman$ If the %omplaint dose nit intimate a%%eptan%e* the a(ard %annot )e implemented$

+O5T, RO$E9
,o&t$ #een to redu%e the dependen%" on the state &ia pri&ate pension pro&isions$ The" ha&e a %hoi%e )et(een using %ompulsion and in%enti&es$ Most of the go&t$ %hooses the later method$ Ta+ relief is guaranteed in the pension plants and is e+tremel" generous* refle%ting the &alue that the go&t$ and the so%iet" and large pla%e
22

on the pro&ision of retirement )enefits$ Ta+ treatments of the )enefit &ar" )" %ountr" and )" )enefits$ In India* the pro%eeds of gratuit" and pro&ident fund are ta+ free in the hand of the mem)ers$ In 13* a %ertain amount of the pro%eeds %an )e ta#en as ta+ lump sum and reminder as ta+a)le in%ome$ Benefits due on (ithdra(al from s%hemes are generall" ta+ed unless the" are transferred to another s%heme or appro&ed pension plan$

2#

Insurance industry in india 0rief History

The insuran%e se%tor in India dates )a%# to Compan"* passed in for ,eneral Insuran%e* in 9 9* (hen Oriental 2ife Insuran%e 92> and Tritons Insuran%e Compan" li#e Bom)a" life Assuran%e Compan"* in

9;0 (ere in%orporated$ Insuran%e ACT (as

K29 )ut it (as su)se=uentl" re&ie(ed and %omprehensi&e legislation (as

ena%ted in K>9$ The nationaliBation of life insuran%e )usiness too# pla%e in K;@ (hen 2A; Indian and /oreign insuran%e so%ieties (ere first merged and then nationaliBed$ It pa&ed the (a" to(ards the esta)lishment of life insuran%e Corporation F2ICG and sin%e then it has en'o"ed a monopol" o&er the life insuran%e )usiness in India$ ,eneral Insuran%e )usiness$ 4u)se=uentl" in K?>* non!life insuran%e )usiness (as nationaliBed and K?2 (as promulgated$ the ,eneral Insuran%e Business FNationaliBationG ACT*

The ,eneral Insuran%e Corporation F,ICG in its present form (as in%orporated in K?2 and maintains a &er" strong hold o&er the non!life insuran%e )usiness in India$ .ue to %on%erns of relati&el" lo( spread of insuran%e in the %ountr"$ The effi%ient and =ualit" fun%tioning of the Pu)li% 4e%tor Insuran%e Companies$ The untapped potential for mo)iliBing long!term %ontra%tual sa&ings funds for infrastru%ture$ The FCongressG go&ernment set up Insuran%e set u an Insuran%e Reforms %ommittee in April KK>$ The %ommittee su)mitted its report in Januar" KKA* re%ommended a phased program of li)eraliBation* and %alled for pri&ate se%tor entr" and restru%turing of the 2IC and ,IC$

E5'$4'T%O) O! %)#4R')"E %) 4#TR/ %) %) %'9

2ife Insuran%e in its modern form is a (estern %on%ept$ The Indian insuran%e industr" is as old as it is in other part of the (orld$ Although life insuran%e )usiness has )een ta#ing shape for the last >00 "ears* it %ame to India (ith the arri&al of Europeans$ /irst 2ife Insuran%e Compan" (as esta)lished in
2$

9 9 as Oriental

Insuran%e Compan"* mainl" to pro&ide for (ido(s of Europeans$ The %ompanies that follo( mainl" %atered to Europeans and %harged e+tra premium on Indian 2i&es$ The first insuran%e %ompan" insuring Indian 2i&es at standard rates (as 0OM0'/ M4T4'$ $%!E %)#4R')"E "OM&')/ (hi%h (as formed in the "ear (hen 9?0$ This (as also

st Insuran%e a%t (as passed )" the British Parliament$ The "ears

su)se=uent to the 4(adeshi mo&ement sa( the emergen%e of se&eral insuran%e %ompanies$ At the end of the "ear K;; there (ere 2A; insuran%e %ompanies$ All the insuran%e %ompanies (ere nationaliBed in K;@ and )rought under one um)rella! 2I/E IN41RANCE CORPORATION O/ IN.IA F2ICG (hi%h en'o"ed a monopol" of the 2ife Insuran%e )usiness until near the end of 2000$ B" ena%ting the IR.A a%t pri&ate Insuran%e %ompanies$ KKK* the ,o&t of India effe%ti&el" ended 2IC0s monopol" and opened the doors for

%ndian #cenario9
1nfortunatel" the %on%ept of insuran%e is not popular in our %ountr" $As per the latest estimates* the total premium in%ome generated )" life and general insuran%e in India is estimated at around a meager $K;< of ,.P$ -o(e&er IndiaHs share of (orld insuran%e mar#et has sho(n an in%rease of 200@ IndiaHs mar#et share in the life insuran%e )usiness sho(ed a real gro(th of < there)" out performing the glo)al a&erage of ?$?< Non!life )usiness gre( )" >$ < against glo)al a&erage of 0$20<$ In India insuran%e spending per %apita (as among the lo(est in the (orld at M?$@ %ompared to M? in the pre&ious "ear$ Amongst the emerging e%onomies* India is one of the least insured %ountries )ut the potential for further gro(th is phenomenal* as a signifi%ant portion of its population is in ser&i%es and the life e+pe%tan%" has also in%reased o&er the "ears$ 0< from 0$> < in 200A!200; to 0$>A< in 200;!

%nsurance #ector
The pra%ti%e of insuran%e in the (orld is =uite old infe%t$ -o( e&er* life insuran%e
2(

)usiness* as it is #no(n toda"* is a mu%h later de&elopment$ It e&ol&ed from the great transformation in life* (hi%h )egan (ith the de%line of the agrarian so%iet" in the (estern %ountries in the Kth %entur"$ IndustrialiBation (ith its %ities* fa%tories* %ash e%onom" and an ur)an Lsa&ing0 %lass set the stage for life insuran%e as a large : s%ale national institution$ It %an trul" )e that life insuran%e is a produ%t of modern industr"$ ,ro(th of life insuran%e Compan" in an" %ountr" (ill illustrate introdu%ed modern life insuran%e )usiness didn0t ma#e mu%h head(a"$ The )usiness started ta#ing its deeper roots onl" (hen in the late K th %entur" LIndia0 insuran%e %ompanies appeared on the s%enes and started a%%epting LIndia0 lies freel" on the same terms as European li&es in India$ The gro(th of India life insuran%e )usiness %ontinued to remain restri%ted till the 4(edish mo&ement gathered momentum$ The )usiness passed through the period of ups and do(ns (ith the politi%al and e%onomi% situation in the %ountr"$

)eed for 'ssociation

6ith the rise in the num)er of Indian life insuran%e %ompanies o%%asioned )" the gro(th in the national spirit as a result of the independent mo&ement a need (as felt )" the %ompanies for an organiBation to assist them in sol&ing the pro)lems fa%ed )" them$ 6ith a &ie( to meeting this need and also to pro&iding a representati&e )od" for e+pression of a %ommon &ie(point of Indian insuran%e )efore the go&ernment regarding insuran%e legislation and Indian life Assuran%e offi%es asso%iation (as esta)lished in K29$ The asso%iation pla"ed %ompanies0 forum for e+pression of representati&e &ie(s on insuran%e and ta+ation legislation and imparting insuran%e edu%ation$

)ationalization
E&en during da"s of the freedom struggle there (as o%%asional demand

for nationaliBation of life insuran%e industr"$ The demand naturall" gathers mare momentum after independen%e$ Mismanagement had lead to li=uidation of as man" as
2)

2; life insuran%e %ompanies in the de%ade after independen%e$ Another 2; insuran%e %ompanies had during the same period so frittered a(a" their resour%es that their )usiness had to )e transferred to other %ompanies$ All these %ost finan%ial losses and %onse=uent suffering to se&eral poli%"holders (ho had entrusted their hard earned sa&ing to the %are of the %ompan" management$ This misuse of po(er* position and pri&ilege )" these %ompanies in the pri&ate se%tor (as one of the most %ompelling reasons that influen%ed the de%ision of the go&ernment of India to nationaliBe the life insuran%e industr" in K;@$ The life insuran%e industr" in India had to )e geared up for raising resour%es for e+e%ution national programs$ One of the o)'e%ti&es of the national plans (as to )uild a pa" (elfare state$ It (as therefore* essential that )enefits of life insuran%e (ere made a&aila)le to e&er" famil" in the %ountr" and that the )usiness should )e %ondu%ted (ith utmost e%onom" )" the management a%ting in a spirit of trusteeship to ena)le ma+imiBation of the people0s sa&ing that %ould )e anal"Bed through the life insuran%e into the de&elopment programs$

ObDectives of nationalization9
The de%ision of the ,o&ernment of India to nationaliBe life insuran%e industr" (as implemented )" the passage of the life insuran%e Corporation A%t* Parliament$ The the a%t (ere8 4pread of message of life insuran%e as far and (ide as possi)le rea%hing out )e"ond the more ad&an%ed ur)an areas (ell into hitherto negle%ted areas$ Effe%ti&e mo)iliBation of the people0s sa&ings$ Complete se%urit" to poli%"holders$ Prompt and effi%ient ser&i%es to the poli%"holders$ Condu%ting of the )usiness (ith the utmost e%onom" and (ith the full
2*

K;@* )"

o)'e%ti&es

of

nationaliBation

of

life

insuran%e

industr" that

emerged out of the dis%ussion and spee%hes in the parliament in the time passage of

realiBation that the mone"$ Belonged to the poli%"holders$ In&estment of funds in su%h a (a" as to se%ure ma+imum "ield %onsistent (ith safet" of %apital$ E%onomi% premium rates$ .e&elopment of a d"nami% and &igorous organiBation under a management %ondu%ted in sprit of Trusteeship$ /ormulation of s%heme of insuran%e to suit different se%tion of the %ommunit"$

2+

Ho6 big is t-e insurance mar.etE

Insuran%e is a Rs$A00 )illion )usiness in India* and together (ith )an#ing ser&i%es adds a)out ?< to IndiaHs ,ap$ ,ross premium %olle%tion is a)out 2< of ,ap and has )een gro(ing )" ;!20< per annum$ India also has the highest num)er of life insuran%e poli%ies in for%e in the (orld* and total in&esti)le funds (ith the 2IC are almost 9< of ,.P$ Jet more than three!fourths of IndiaHs insura)le population has no life insuran%e or pension %o&er$ -ealth insuran%e of an" #ind is negligi)le and other forms of non!life insuran%e are mu%h )elo( international standards,

*-at 1H$52E

is

Human

$ife

5alue

-uman life &alue is8! N N CapitaliBed &alue of the net earnings Present &alue of the total in%ome lost to the famil" in the e&ent death$

These points (ill )e more %leared (ith this e+ample8! N N N N N N 4uppose an indi&idual earns Rs$ 0000Emonth$ The personal e+pense is Rs$2000Emonth Therefore the in%ome pro&ided to his famil" is Rs$ 9000Emonth$ The annual in%ome pro&ided to his famil" (or#s out to Rs$ K@000 No( if he (ere not to earn it for them * the famil" (ould ha&e to Rs$ @00000 in a )an# so that the" get Rs$ K@000 "earl" at @< interest$FK@000O 00E@G Therefore the -25 of the person is Rs$ @00000$

Ps$ Note that (e ha&e not ta#en into a%%ount the future in%ome gro(th of the person$ -en%e this is not the e+a%t human life &alue )ut onl" a representation to gi&e the %ustomer a fair idea of ho( it (or#s$
2,

*-at is a contract of insuranceE

A %ontra%t of insuran%e is a %ontra%t of utmost good faith* te%hni%all" #no(n as u)errima fides$ The do%trine of dis%losing all material fa%ts is em)odied in this important prin%ipal that applies to all forms of insuran%e$ The purpose* (ho is one of the parties to the %ontra%t* is presumed to ha&e means of #no(ledge that are not a%%essi)le to the %orporation (ho is the other part" to the %ontra%t$ Therefore* the purpose is )ound to tell the insurer e&er"thing affe%ting the 'udgment of the insurer$ In all the %ontra%ts of insuran%e the proposes is )ound to ma#e full dis%losure of all material fa%ts and not merel"* those (hi%h he thin#s material Misrepresentation non!dis%losure or fraud in an" do%ument leading to the a%%eptan%e of the ris# automati%all" dis%harges the %orporation from all lia)ilit" under the %ontra%t$ Although 4e%tion A; of the Insuran%e A%t* K>9 pro&ides that no poli%" %an )e %alled in =uestion after a period of t(o "ears from the date of its issue on the ground that an" statement in proposal or a related do%ument (as false or ina%%urate Fma#ing the poli%" indisputa)leG* This pro&ision is not appli%a)le if the %orporation %an pro&e that misrepresentation or non! dis%losure (as on a material fa%t and (as fraudulentl" made and that the poli%"holder #ne( at the time that statement he made (as false$ It is* therefore* in the interest of the (ould )e poli%"holder to dis%lose all the material fa%ts to the %orporation to a&oid an" %ompli%ation (hen the %laim arises$ It is e=uall" o)ligator" on an agent to see that the assured doesnHt o)tain the %ontra%t )" means of untrue representation or %on%ealment in an" respe%t$ It is the dut" that the agent o(es )oth to his %lient and to the %orporation$

#-

T-e %nsurance &layersF

: -./C 4tandard 2ife Insuran%e Compan" 2imited : Birla 4un 2ife Insuran%e Compan" 2imited : TATA AI, 2ife Insuran%e Compan" 2imited : Ma+ Ne( Jor# 2ife Insuran%e Compan" 2imited : 3ota# Mahindra Old Mutual 2ife Insuran%e 2imited : 4BI : Cardiff 2ife Insuran%e Compan" 2imited : IN, 5"s"a 2ife Insuran%e Compan" 2imited : Ba'a' AllianB 2ife Insuran%e Compan" 2imited : ICICI Prudential 2ife Insuran%e Compan" 2imited : Met2ife 2ife Insuran%e Compan" 2imited : A&i&a 2ife Insuran%e Compan" 2imited : Relian%e 2ife Insuran%e Compan" 2imited : 4ahara India 2ife Insuran%e 2imited P 4hriram 2ife Insuran%e Compan" 2imited

#1

THE !O$$O*%)+ "OM&')%E# H'# THE RE#T O! THE M'R(ET #H'RE O! THE %)#4R')"E %) 4#TR/,

)'ME O! THE &$'/ER 1G2 2IC ICICI PR1.ENTIA2 BIR2A 41N 2I/E BAJA A22IANQ 4BI 2I/E -./C 4TAN.AR. TATA AI, MAR NE6 JOR3 A5I5A OM 3OTA3 MA-IN.RA IN, 5JA4A AMP 4ANMAR MET2I/E

M'R(ET #H'RE 92$> ;$@> 2$;@ 2$0> $90 $>@ $2K 0$K0 0$?K 0$; 0$>? 0$2@ 0$2

#2

#-ares of t-e insurance industry K0

90 2IC ICICI PR1.ENTIA2 BIR2A 41N 2I/E @0 BAJA A22IANQ 4BI 2I/E -./C 4TAN.AR. TATA AI, A0 MAR NE6 JOR3 A5I5A OM 3OTA3 MA-IN.RA IN, 5JA4A 20 AMP 4ANMAR MET2I/E 0

?0

;0

>0

##

Types of &lanF,,

"onventional 4$%&

"onventional9:

Con&entional plans are those plans in (hi%h returns are #no(n and are fi+ed$ E+ample8 ! "-ildrenHs &lan$ In this plan the %ustomer has #no(s ho( mu%h return he (ill get after maturit" or an" miss happening o%%urs$ -ere ris# is lo( and returns are also lo(* )e%ause it is not dependent on the mar#et ris# and is a rigid poli%"$ It is seen that people also in&est less in su%h t"pe of poli%ies as returns are less and there is a %ompulsion atta%hed is of %ompulsor" premium su)mission till the poli%" matures$ Illustration8 ! Premium for 0 "rs is 20000 20000S20000S20000S20000S20000S20000S20000S20000S20000S20000I 2l#s Return des%ri)ed (as 2$; times 4o the %ustomer (ill get appro+ ; la#hs after dedu%ting all %harges$ Insuran%e is al(a"s of the parent and )enefi%iar" is the %hild$ There are 2 t"pes of loss that o%%urs on an" t"pe of miss happening i$e$ emotional loss and monetar" loss %ompan" %an0t full fill emotional loss )ut %an help in monetar" loss )" gi&ing the 2l#s Rs$ At the miss happening and (ill gi&e the rest premium )" its o(n and (ill gi&e the )onus at maturit" again to the %hild$

4$%&

12IP stands for 4)%T $%)( %)#4R')"E &$'), As it is said higher ris# higher
#$

return

#(

RESEARCH METHODOLOGY

MEANING OF RESEARCH METHODOLOGY

7A Researc- is a %areful in&estigation or in=uir"* espe%iall" through sear%h for ne( fa%ts in an" )ran%h of #no(ledge$ It is a s"stemiBed effort to gain more #no(ledge$D

Researc- met-odology is a (a" to s"stemati%all" sol&e the resear%h pro)lem$ It ma" )e understood as a s%ien%e of stud"ing ho( resear%h is done s%ientifi%all"$ 6e stud" the &arious steps that are generall" adopted )" a resear%her in stud"ing his resear%h pro)lem along (ith the logi% )ehind them$ It is ne%essar" for the resear%her to #no( not onl" the resear%h methods or te%hni=ues )ut also the methodolog"$ Resear%her al(a"s needs to understand the assumptions underline &arious te%hni=ue and the" need to #no( the %riteria )" (hi%h the" %an de%ide that %ertain te%hni=ue and pro%edures (ill )e appli%a)le to %ertain pro)lems and other (ill not$

Researc- is an organiBed en=uir" designed and %arried out to pro&ide information for sol&ing a pro)lem$ Resear%h methodolog" is a (a" to s"stemati%all" sol&e the resear%h pro)lem$ It ma" )e understood as a s%ien%e of stud"ing ho( resear%h is done s%ientifi%all"$

#)

O0IE"T%5E# O! RE#E'R"H

$ Resear%h e+tends #no(ledge of human )eings* so%ial life and en&ironment$ 4%ientists and resear%hers sear%h ans(ers for &arious t"pes of =uestions8 (hat* (here* (hen* ho( and (h"$

2$ Resear%h unra&els the m"steries of nature* )rings to light hidden information that might ne&er )e dis%o&ered full" during the ordinar" %ourse of life$

>$ Resear%h &erifies and tests e+isting fa%ts and theor" and these help impro&ing our #no(ledge and a)ilit" to handle situation and e&ents$

A$ Resear%h aims to anal"Be inter!relationships )et(een &aria)les and to deri&e %ausal e+planations and thus ena)les us to ha&e a )etter understanding of the (orld in (hi%h (e li&e$

;$ Resear%h also aims at de&eloping ne( tools* %on%epts and theories for a )etter stud" of un#no(n phenomena$

'T' "O$$E"T%O)

The tas# of data %olle%tion )egins after a resear%h pro)lem has )een defined$ 6hile de%iding a)out the method of data %olle%tion to )e used for the stud"* the resear%her should #eep in mind t(o t"pes of data &iB *primar" and se%ondar"$

#*

&rimary data ma" )e des%ri)ed as those data that ha&e )een o)ser&ed and re%orded )" the resear%hers for the first time to their #no(ledge$ Primar" data %an )e %lassified into t(o t"pes8 .ata %lassified )" their nature$ .ata %lassified a%%ording to fun%tion$

Primar"

data

%an

)e

%olle%ted

through

se&eral

methods$

4ome

of

the

important ones are8 $ O)ser&ation method 2$ Inter&ie( method >$ Tuestionnaires A$ 4%hedules ;$ Other methods

#econdary data are statisti%s not gathered for the immediate stud" at hand )ut for some other purposes$ 4e%ondar" data %an )e %lassified into t(o t"pes8 %nternal data (hi%h in%lude sales anal"sis$ In&estor annual report$ Earlier resear%h done in the %ompan"$

#+

E7ternal data (hi%h in%lude En%"%lopedias$ Te+t )oo#s$ MagaBines$ Pu)lished resear%h$

Ot-er #ource of data %olle%tion Inde+$ Internet sear%h engines$

#,

TE"H)%J4E# 4#E

%) TH%# #T4 /

1 2 3 4

Consultation and personal o)ser&ation$ Colle%tion %lassifi%ation* %ompilation* ta)ulation anal"sis and figure rele&ant to fund performan%e of the %ompan"$ Anal"sis of funds of the &arious plans of the -./C standard life insuran%e %ompan"$ Ta#ing the help of the &arious )roa%hers$

#O4R"E# O!

'T'

The anal"sis (as )ased on follo(ing do%ument and related Information$

1 2 3 4 5 6

The annual finan%ial statements of the %on%ern i$e$ )alan%e sheet* profit U loss a%%ount* annual report$ The %ompan" pu)li%ation in%ludes )oo#lets* templates* Broa%hers et%$ 4e%ondar" data from &arious mutual funds$ ,etting the &arious do%uments on (e)sites* )oo#s* ne(spapers et%$ 5arious do%uments relating to the performan%e of the fund$ .ata pu)lished )" the CRICI2 FCredit Rating %ompan"G$

$-

O0IE"T%5E# O! THE #T4 /

$ To stud" the performan%e of the fund of the -./C standard life insuran%e %ompan" in &arious 12IP plans$
2$

To stud" the in&estment stru%ture of -./C standard life insuran%e %ompan" in 12IP plans$

>$ To stud" the return on the &arious funds of -./C standard life insuran%e %ompan" limited under the &arious plans$ A$ To #no( the a(areness of the %ustomer a)out &arious plans and their funds of -./C 42I %ompan"$

$%M%T'T%O) O! TH%# #T4 /

$ There is general pau%it" of ade=uate data)ase$ 2$ The stud" is totall" )ased on se%ondar" data )e%ause the primar" data relating to this topi% is &er" diffi%ult to get from the general pu)li%$ >$ The se%ondar" data are not suffi%ient for this stud"$

$1

OR,ANIQATIONA2 PRO/I2E

HO4#%)+ E5E$O&ME)T !%)')"E "OR&OR'T%O)9 -./C (as started )" -asmu#h Bhai Pare#h in K?? (ith the formation of Malhotra Committee$ -./C (as in%orporated (ith the primar" o)'e%ti&e of meeting a so%ial need that of promoting home o(nership )" pro&iding long!term finan%e to households for their housing needs$ -./C (as promoted (ith an initial share %apital of Rs$ 0 %rores$ -./C has sin%e emerged as the largest residential mortgage finan%e institution in the %ountr"$ The %orporation has had a series of share issues raising its %apital to Rs$ %rores$ The net (orth of the %orporation as on Mar%h > * 2000 stood at Rs$ 2*0K@ %rores$ -./C operates through ?; lo%ations throughout the %ountr" (ith its Corporate -ead=uarters in Mum)ai* India$ -./C also has an international offi%e in .u)ai* 1$A$E$* (ith ser&i%e asso%iates in 3u(ait* Oman and Tatar$ -./C0s main goals are to9 aG .e&elop %lose relationships (ith indi&idual households$ )G Maintain its position as the premier housing finan%e institution in the %ountr"$ %G Transform ideas into &ia)le and %reati&e solutions$ dG Pro&ide %onsistentl" high returns to shareholders$ eG To gro( through di&ersifi%ation )" le&eraging off the e+isting %lient )ase$ K

$2

%)TRO 4"T%O) /ounded in K??* -./C is toda" the mar#et leader in housing finan%e in India and has e+tended finan%ial assistan%e to more than ; la%#s homes$ -./C has more than 0 offi%es in India presentl"$ It has also one international offi%e in .u)ai and > more ser&i%es asso%iate in 3u(ait* Tatar and sultanate of OMAN$ -./C0s assets )ase amount to o&er ;*000 %rore$ Its finan%ial strength is refle%ted in highest safet" rating of L/AAA0 and LMAAA0 a(arded )" CRI4I2 and ICRA : t(o of India0s leading %redit rating agen%" respe%ti&el"* for the last @ "ear %onse%uti&el"$ It has a depositor )ase of o&er la%#s %ustomer and a deposit agents for%e of o&er A@*000 of the total deposit* and trust depositors* (hi%h demonstrates the ?>< are sour%ed from indi&idual

tremendous %onfiden%e that retail in&estors ha&e in the %ompan"$ -./C! promoted %ompanies ha&e emerged to meet the in&estors and %ustomers needs$ -./C )an# for %ommer%ial )an#ing* -./C Mutual /und for mutual fund produ%ts* to )e follo(ed &er" shortl" )" -./C 4tandard 2ife Insuran%e Compan" for the life insuran%e and pension produ%ts$ Being an institution that is strongl" %ommitted to the highest standards of =ualit" and e+%ellen%e* -./C has (on se&eral a%%olades in the past fe( "ears$ One su%h a(ard is the 7 Rama#rishnan Ba'a' National Tualit" A(ard 7 for the "ear KKK$ this a(ard (as instituted to a(ard re%ognition to Indian %ompanies for )usiness e+%ellen%e and =ualit" a%hie&ement$ -./C is the onl" %ompan" so far to re%ei&e this a(ard in the ser&i%e %ategor"$ -./C 4tandard 2ife Insuran%e Compan" 2td$ is one of India0s leading pri&ate life insuran%e %ompanies* (hi%h offers a range of indi&idual and group insuran%e solutions$ It is a 'oint &enture )et(een -ousing .e&elopment /inan%e Corporation 2imited F-./C 2td$G* India0s leading housing finan%e institution and one of the su)sidiaries of 4tandard 2ife pl%* leading pro&iders of finan%ial ser&i%es in the 1nited 3ingdom$ Both the promoters are (ell #no(n for their ethi%al dealings and finan%ial strength and are thus %ommitted to )eing a long!term pla"er in the life insuran%e industr" : all!important fa%tors to %onsider (hen %hoosing "our insurer$
$#

#T') 'R

$%!E9

The 4tandard 2ife Assuran%e Compan" FV4tandard 2ifeVG (as esta)lished in 92; and the first 4tandard 2ife Assuran%e Compan" A%t (as passed )" Parliament in 9>2$ 4tandard 2ife (as rein%orporated as a mutual assuran%e %ompan" in K2;$ 4tandard 2ife is EuropeHs largest mutual life assuran%e %ompan"$ 4tandard 2ife* (hi%h has )een in the life insuran%e )usiness for the past e+panded in the 92 "ears* is a modern %ompan" sur&i&ing =uite a fe( %hanges sin%e selling its first poli%" in 92;$ The %ompan" Kth %entur" from its original Edin)urgh premises* opening offi%es in other to(ns and a%=uiring other similar )usinesses$ 4tandard 2ife %urrentl" has assets e+%eeding o&er W?0 )illion under its management and has the distin%tion of )eing a%%orded VAAAV rating %onse=uentl" for the past si+ "ears )" 4tandard U Poor$ 0an.ing, Healt-care & %nvestments : The group set up 4tandard 2ife Ban#* its 13 mortgage and retail sa&ings )an#ing su)sidiar"* in KK9 and 4tandard 2ife In&estments* (hi%h had pre&iousl" )een the in! house in&estment management unit of the group0s life assuran%e and pensions )usiness* (as separated into a distin%t legal entit" in the same "ear* (ith the aim of esta)lishing it as an independent in&estment management )usiness pro&iding ser&i%es to )oth the group and third part" retail and institutional %lients$ The group a%=uired Prime -ealth 2imited Fsu)se=uentl" renamed 4tandard 2ife -ealth%areG in the 1nited 3ingdom in 2000$ 4tandard 2ife -ealth%are e+panded in Mar%h 200@ (ith the a%=uisition of the PMI )usiness of /irst Assist$ 4tandard 2ife Asia 2imitedEJoint &entures ! The group0s -ong 3ong su)sidiar"* 4tandard 2ife Asia 2imited F742 AsiaDG* (as in%orporated in KKK as a 'oint &enture and )e%ame a (holl"!o(ned su)sidiar" of 4tandard 2ife in 2002$ The group0s operations in -ong 3ong (ere esta)lished to gi&e the group a presen%e in the /ar East from (hi%h it %ould e+pand into China$ The group0s 'oint &entures in India (ith -ousing .e&elopment /inan%e Corporation 2imited F7-./CDG (ere in%orporated in 2000 Fin relation to the life assuran%e and pensions 'oint &entureG and
$$

200> Fin relation to the in&estment management 'oint &entureG$ The group0s 'oint &enture in China (ith Tian'in E%onomi% .e&elopment Area ,eneral Compan" F7TE.ADG )e%ame operational in 200>$ 4tandard 2ife international 2imited ! The group also in%orporated 4tandard 2ife International 2imited F742I2DG in 200; for the purposes of pro&iding the group (ith an offshore &ehi%le* )ased in Ireland* through (hi%h it %ould sell ta+!effi%ient in&estment produ%ts into the 1nited 3ingdom$ 4ales of these produ%ts %ommen%ed in 200@$ #ervice company /ollo(ing the group0s strategi% re&ie( in 200A* the group esta)lished a ser&i%e %ompan" stru%ture for the pro&ision of %entral %orporate ser&i%es to the group0s )usiness units$ 4tandard 2ife Emplo"ee 4er&i%es 2imited F742E42DG supplies a (ide range of %entral ser&i%es to the rest of the group* in%luding IT* fa%ilities* legal and human resour%es ser&i%es* and emplo"s staff (or#ing in the group0s 13 and Irish operations Fother than 42I* 42B and 42-*(hi%h emplo" their staff dire%tl"G$ This ser&i%e %ompan" stru%ture (as %reated to ena)le 4tandard 2ife to %ompl" (ith regulator" restri%tions on the pro&ision of non!insuran%e ser&i%es and to e+ploit group!(ide s"nergies$ #T') 'R $%!E '#%' $%M%TE AIO%)T 5E)T4RE#9

The group0s -ong 3ong su)sidiar"* 4tandard 2ife Asia 2imited F742 AsiaDG* (as in%orporated in KKK as a 'oint &enture and )e%ame a (holl"!o(ned su)sidiar" of 4tandard 2ife in 2002$ The group0s operations in -ong 3ong (ere esta)lished to gi&e the group a presen%e in the /ar East from (hi%h it %ould e+pand into China$ The group0s 'oint &entures in India (ith -ousing .e&elopment /inan%e Corporation 2imited F7-./CDG (ere in%orporated in 2000 Fin relation to the life assuran%e and pension0s 'oint &entureG and 200> Fin relation to the in&estment management 'oint &entureG$ The group0s 'oint &enture in China (ith Tian'in E%onomi% .e&elopment Area ,eneral Compan" F7TE.ADG )e%ame operational in 200>$

emutualization of #tandard $ife

$(

On > Ma" 200@* 4tandard 2ifeHs &oting mem)ers &oted in fa&or of the 4pe%ial Resolution for the demutualiBation of The 4tandard 2ife Assuran%e Compan" and the flotation of 4tandard 2ife pl% on the 2ondon 4to%# E+%hange$ #T') 'R $%!E +RO4&9

The 4tandard 2ife group has )een loo#ing after the finan%ial needs of %ustomers for o&er 92 "ears It %urrentl" has a %ustomer )ase of around ? million people (ho rel" on the %ompan" for their insuran%e* pension* in&estment* )an#ing and health!%are needs

Its in&estment manager %urrentl" administers W 2; )illion in assets It is a leading pensions pro&ider in the 13* and is rated )" 4tandard U PoorHs as HstrongH (ith a rating of AS and as HgoodH (ith a rating of A )" Mood"Hs

4tandard 2ife (as a(arded the HBest Pension Pro&iderH in 200A* 200; and 200@ at the Mone" Mar#eting A(ards* and

It (as &oted a ; star life and pension0s pro&ider at A(ards for the last 0 "ears running$

the /inan%ial Ad&iser 4er&i%e

The H; 4tarH a%%olade has also )een a(arded to 4tandard 2ife In&estments for the last 0 "ears* and to 4tandard 2ife Ban# sin%e its in%eption in KK9$

4tandard 2ife Ban# (as a(arded the HBest /le+i)le Mortgage 2enderH at the Mortgage MagaBine A(ards in 200@$

%)"OR&OR'T%O) O! H !" #T') 'R

$%!E %)#4R')"E "O, $T ,9

The %ompan" (as in%orporated on Ath August 2000 under the name of -./C 4tandard 2ife Insuran%e Compan" 2imited$

$)

Their am)ition from the )eginning (as to )e the first pri&ate %ompan" to re!enter the life insuran%e mar#et in India$ On the 2>rd of O%to)er 2000* this am)ition (as realiBed (hen -./C 4tandard 2ife (as the first life %ompan" to )e granted a %ertifi%ate of registration$ -./C are the main shareholders in -./C 4tandard 2ife* (ith 9 $A<* (hile 4tandard 2ife o(ns 9$@<$ ,i&en 4tandard 2ifeHs e+isting in&estment in the -./C ,roup* this is the ma+imum in&estment allo(ed under %urrent regulations$

-./C and 4tandard 2ife ha&e a long and %lose relationship )uilt upon shared &alues and trust$ The am)ition of -./C 4tandard 2ife is to mirror the su%%ess of the parent %ompanies and )e the "ardsti%# )" (hi%h all other insuran%e %ompanies in India are measured$ -./C 4tandard 2ife Insuran%e Compan" 2td$ is one of India0s leading pri&ate life insuran%e %ompanies* (hi%h offers a range of indi&idual and group insuran%e solutions$ It is a 'oint &enture )et(een -ousing .e&elopment /inan%e Corporation 2imited F-./C 2td$G* India0s leading housing finan%e institution and one of the su)sidiaries of 4tandard 2ife pl%* leading pro&iders of finan%ial ser&i%es in the 1nited 3ingdom$ Both the promoters are (ell #no(n for their ethi%al dealings and finan%ial strength and are thus %ommitted to )eing a long!term pla"er in the life insuran%e industr"$ -./C 4tandard 2ife Insuran%e Co$ 2td (as in%orporated on Ath august 2000$ It is a 'oint &enture )et(een -ousing .e&elopment /inan%e Corporation 2imited F-./C 2td$G India and 13 )ased 4tandard 2ife Compan"$ Both the 'oint &enture partners )eing one of the leaders in their respe%ti&e areas %ame together in this 9 $A8 9$@ 'oint &enture to form -./C 4tandard 2ife Insuran%e Compan" 2imited$

$*

The M. and CEO of -./C 4tandard 2ife Mr$ .eepa# 4at(ale#ar* has gi&en the %ompan" ne( dire%tions and has helped the %ompan" a%hie&e the status it %urrentl" en'o"s$ -./C 4tandard 2ife )rings to "ou a (hole range of insuran%e solutions )e it group or indi&idual or NA5 ser&i%es for %orporations* the" %an )e easil" %ustomiBed as per spe%ifi% needs$

The Ban% assuran%e partners of -./C 4tandard 2ife Insuran%e Co 2td are -./C* -./C Ban# India 2imited* 1nion Ban# of India* Indian Ban#* Ban# of Baroda* 4aras(at Ban# and Ba'a' Capital$

$+

*-y H !" standard life

There are man" reasons (h" people should %hoose -./C 4tandard 2ife Insuran%e Compan" 2td$ as their partner in meeting their insuran%e need8 aG Inno&ati&e produ%ts to meet %ustomer0s needs$ )G Effi%ient %ustomer ser&i%e team$ %G ,ood finan%ial tra%# re%ord of )oth parents : -./C U 4tandard 2ife$ dG Certified /inan%ial Consultants to ad&i%e prospe%ti&e %ustomers$ eG Professional approa%h in managing %ustomer0s in&estments$ fG In%ome Ta+ )enefits for their insuran%e produ%ts$ gG Inno&ati&e produ%ts to meet %ustomer0s needs$ hG Effi%ient %ustomer ser&i%e team$ iG ,ood finan%ial tra%# re%ord of )oth parents : -./C U 4tandard 2ife$ 'G Certified /inan%ial Consultants to ad&i%e prospe%ti&e %ustomers$ #G Professional approa%h in managing %ustomer0s in&estments$

$,

VISION
7The most successful and admired life insurance company, which means that we are the most trusted company, the easiest to deal with, offer the best value for money, and set the standards in the industry. In short, The most obvious choice for all.

MISSION
6e aim to )e the top ne( life insuran%e %ompan" in the mar#et$ This doe0s not 'ust mean )eing the largest or the most produ%ti&e %ompan" in the mar#etC rather it is a %om)ination of se&eral things li#e! Customer ser&i%e of the highest order 5alue for mone" or %ustomers Professionalism in %arr"ing out )usiness Inno&ati&e produ%ts to %ater to different needs of different %ustomers 1se of te%hnolog" to impro&e ser&i%e standards In%reasing mar#et share

VALUE
%)T%+R%T/ 6hat is itX 6h"X Integrit" is the )edro%# on (hi%h the %ompan" and the e+pe%tations of the %ustomers and emplo"ees are )uilt$ Integrit" esta)lishes the %redi)ilit" of the person* defines the %hara%ter
(-

-onest and Truthful in e&er" a%tion$ Transpare n%" 4ti%# to prin%iples irrespe%ti&e of out%ome$ Be 'ust and fair to e&er"one$

and empo(ers one to do 'usti%e to the 'o)$

(1

Ena)les )uilding %onfiden%e and trust* a%hie&ing transparen%" and la"ing a strong foundation for a )inding relationship$ ,uiding prin%iple for all (al#s of life$

%))O5'T%O)
6hat is itX 6h"X To e+%eed %ustomer e+pe%tation and ma+imise %ustomer retention$ To a%hie&e %ompetiti&e ad&antage$ To promote gro(th and upgrade standards in the industr"$ To foster %reati&it" amongst emplo"ees and partners To open a (orld of ne( possi)ilities$ Building a store house of treasures through e+perien%es$ 2oo#ing at e&er" produ%t and pro%ess through fresh e"es e&er"da"$

"4#TOMER "E)TR%" 6hat is itX 6h"X Reinfor%e )rand lo"alt" )" %omplete transparen%"$ Customer is the sour%e of re&enue for the %ompan"$
(2

1nderstand his e+pe%tations )" #eeping him as the %entre ! point 2isten a%ti&el" 1nderstand %ustomer needs and deli&er solutions$ Customer interest al(a"s supreme$

Customer is the reason for our e+isten%e$ Ensure that %ustomer %hooses our %ompan" to do )usiness (ith$ Customers0 %ustomers$ 6ill %ontri)ute to %ustomer retention$ good(ill alone %an )ring more )usiness and more

&EO&$E "'RE 6hat is itX 6h"X People are the most &alua)le assets of the %ompan"$ Moti&ate indi&idual to gi&e his E her )est$ Esta)lish a &alua)le relationship (ith them to %reate a 'o"ful (or#ing en&ironment $ Jo) satisfa%tio n TE'M *OR( One for all and all for one 6hat is itX 6hole team ta#es the o(nership of the deli&era)les Consult all in&ol&ed * understand and arri&e at a %ommon o)'e%ti&e Co!operate and support a%ross departmental )oundaries Identif" strengths and (ea#nesses a%%ordingl" allo%ate responsi)ilit" to
(#

,enuinel" understanding the people (e (or# (ith$ ,uiding their de&elopment through training and support -elping them de&elop re=uisite s#ills to rea%h their true potential$ 3no( them on a personal front$ Create an en&ironment of trust and openness$ Respe%t for the time of others$

a%hie&e %ommon o)'e%ti&es$ 6h"X IO/ ') Together E&er"one A%hie&es More 8! TEAM It adds 'o" at (or# pla%e Team (or# generates s"nerg" and pro&ides a fo%ussed approa%h$ An idea or a%ti&it" performed in a group has greater a%%epta)ilit" 7One for all and all for oneD #%M&$%"%T/

($

&RO 4"T &ORT!O$%O

-./C offers produ%ts as per the life stages of the %ustomers and their respe%ti&e needs .

Jour insuran%e need (ill %hange as "our life does* from starting to (or# to en'o"ing "our golden "ears and all the stages in )et(een$ Ea%h one of these stages ma" pose a different insuran%e needE%o&er for "ou$ In this se%tion* (e ha&e dra(n up the )asi% life stages and help "ou anal"Be &arious insuran%e needs a%%ordingl"$

((

$%!E #T'+E# & )EE # %) H'T #T'+E# #T'+E 89 /O4)+ & #%)+$E

An important stage (here one la"s do(n the foundation of a su%%essful life ahead$ Ta#e ad&antage of the time and po(er of %ompounding to ensure that "ou )uild up "our dreams$ 4tart sa&ing earl"$ NEE.49 4a&e for -ome U 6edding Ta+ Planning 4a&e for ,olden Jears

#T'+E ;9 I4#T M'RR%E

Marriage )rings a)out a signifi%ant %hange$ Ne( dreams and ne( opportunities also )ring in additional responsi)ilities$ 6hile )oth of "ou loo# for(ard to a happ" and se%ure life* it is e=uall" important to ensure that e&entualities don0t %ome in the (a" of shaping "our dreams$ NEE.49 Planning for home E se%uring "our home loan lia)ilit"$ 4a&e for &a%ation$
()

 4a&e for "our first %hild$

#T'+E <9 &RO4

&'RE)T#

On%e "ou ha&e %hildren* "our need for life insuran%e is e&en more$ Jou need to prote%t "our famil" from an unto(ard in%ident$ Ensure "our prote%tion um)rella ta#es into a%%ount the future %ost of se%uring "our %hild0s dream$ Jou (ill (ant life to go on for "our lo&ed ones* and ha&ing enough life insuran%e is a (a" to help ensure that$

NEE.48 Pro&ide for %hildrenHs edu%ation 4afeguarding famil" against loan lia)ilities 4a&ings for post!retirement

#T'+E =9 &$'))%)+ !OR RET%REME)T

6hile "ou are )us" %lim)ing the ladder of su%%ess toda"* it is important for "ou to ta#e time and plan for "our life after retirement$ -a&ing an earl" start for retirement planning %an ma#e a signifi%ant differen%e to "our sa&ings$ Thin# a)out "our golden "ears e&en )efore "ou ha&e rea%hed them$ The #e" is to thin# ahead and plan (ell using "our time and mone"$ NEE.4 :
(*

 Pro&ide for regular in%ome post retirement Immediate Ta+ )enefits 2ead a se%ure* independent and %omforta)le life st"le in "our retirement "ears$

%)TRO 4"T%O) *-at is 4nit $in.ingE 4)%T:$%)(E

TO 4)%T $%)(E

&RO 4"T#

&O$%"%E# 'RE 4)04) $E

1n)undling means the separate identifi%ation of the %onstituent parts of the insuran%e poli%"$ That is the in&estment element* e+pense and administration %harges* and )enefit %harges Fe$g$ mortalit" %hargeG* as (ell as the )enefits themsel&es* are %learl" identified to the %lient$ 1ntil the K@0s * most life insuran%e poli%ies (as %on&entional poli%ies* (here)" the %lient (as not a(are of (hat portion of the premium %o&ered e+penses of )enefits* nor indeed* of no( in&estment returns (ere allo%ated to the poli%"$ The first step to un)undling (as to identit" the in&estment element separatel" from the other elements of the produ%t$ Be%ause this (as e+plained to the %lient and formed a legal part of the poli%"* it (as the real start of un)undling$ 4ome more "ears passed )efore the le&el of un)undling that -./C 4tandard 2ife see toda" (as a%hie&ed$

As time (ent on in the K@0s and K?0s* the other ma'or parts of life insuran%e poli%ies Fmortalit" and e+pensesG also )e%ame un)undled$ Produ%t designers did this )" setting out the (a" that e+pense and mortalit" %osts (ould affe%t the poli%"$ 1n)undled produ%ts are also said to )e transparent )e%ause the %lient %an see the progress of the poli%"$ This is aided )" an annual report on the status and performan%e of the poli%"* in%luding e+pli%it reporting of %harges ta#en from* and in&estment returns allo%ated to* the poli%"$ In pra%ti%e* ho(e&er* the details of un)undled poli%ies are =uite %ompli%ated and (hether transparen%" is a%hie&ed from the %lient0s point of &ie( depends primaril" on the %larit" of the %ommuni%ation from the insurer and the e+tent to (hi%h the %lient is
(+

interested in su%h detail$

(,

4)%T $%)( &O$%"/ M'(E 4#E O! 4)%T $%)( !4) #

In the 13* un)undled poli%ies are generall" referred to as )eing unit!lin#ed )e%ause the in&estment element of the poli%" is housed in funds that are di&ided into units of e=ual &alue$ A unit!lin#ed poli%" is one (hose underl"ing in&estments are identifia)le and determine its %ash &alues$ It is important to re%ogniBe that the assets of the funds ma" not )e shares :the" ma" )e fi+ed!interest se%urities* mone" mar#et instruments* propert"* deri&ati&e instruments* as (ell as shares$ Indeed* the assets of a parti%ular fund ma" %onsist of a mi+ture of these asset t"pes$ The %lient normall" has a %hoi%e of funds ha&ing different %hara%teristi%s to (hi%h premiums %an )e allo%ated$ Capital )" redu%ing ne(!)usiness strain$

THE 4) ER$/%)+ !4) # THE 4)%T#

At -./C 4tandard 2ife* the %lient has a %hoi%e of funds in (hi%h to in&est$ Our unit lin#ed funds ha&e different in&estment o)'e%ti&es and gi&e the %ustomer the opportunit" to )e e+posed to different t"pes of assets$ As a result* the %ustomer %an %hoose his fund a%%ording to his o(n attitude to ris# and desire of in&estment return$

4)%T:$%)(E

&O$%"%E# 'RE $%)(E

2in#ing implies mat%hing$ The &alue of the poli%" is lin#ed to the &alue of the net assets Fassets less lia)ilitiesG of the fund$ The in&estment ris# and re(ard are therefore transferred from the insurer to the %lient$ This is the real distinguishing feature of unit lin#ing$ Of %ourse* the poli%" might offer some in&estment guarantees )ut in man"
)-

%ountries this is no( the e+%eption rather than the rule$

)1

Our unit lin#ed funds ha&e different in&estment o)'e%ti&es and gi&e the %ustomer the opportunit" to )e e+posed to different t"pes of assets$As a result , the customer can choose his fund according to his own attitdew to risk and desire of investment return.

0E)E!%T# O! 4)%T $%)(E

To t-e client
! ! ! !

&$')#

/le+i)ilit" of premium* sum assured and )enefit Transparen%" Control o&er in&estment strateg" Control o&er the degree of in&estment ris#

To t-e insurer
! ! Produ%t demanded )" the mar#et Retention of e+isting %lient and attra%ting ne( %lient

4nit:$in.ed &olicies Have E7plicit "-arges9

6ith all insuran%e produ%ts (e allo( for the e+penses* the %ost of )enefits in%urred and a profit margin to the %ompan"$ In -./C standard life0s unit!lin#ed poli%ies the %ustomer sees the %harges )eing dedu%ted e+pli%itl" from their poli%" in respe%t to these e+penses$ 4ome of these %harges are %harges dedu%ted from the premium and some are dedu%ted from the fund$

)2

T-e c-arges on a unit lin.ed plan of H !" #tandard $ife9

The %harges under this poli%" are dedu%ted to pro&ide for the )enefits and the administration pro&ided )" -./C standard life %harges (hen ta#en together* are among the lo(est in the industr" and are stru%tured to the gi&e the )etter returns o&er the long term$ %nvestment "ontent "-arge9 This is a premium )ased %harge$ After dedu%ting this %harge from the premiums* the remainder is in&ested to )u" units$ The follo(ing ta)le sho(s ho( mu%h is used to )u" units$ This per%entage is %alled the in&estment %ontent Rate$

st

IN5E4TMENT CONTENT RATE FICRG U 2nd "ears >rd "ear

?>$00< 90$00< 9;$00< K0$00< K?$;0< KK$00< KK$00< KK$00< KK$00< KK$00<

1p to 200000 /rom 200000 to Regular Premiums ;00000 /rom ;00000 to

000000 A)o&e 000000 Additional single premiums

Other Charges
Redu%ed ICR added to the fund$

E+planation
A redu%ed per%entage of the poli%" holder0s premium is

These %harges are intended to %o&er distri)ution Fin%luding %ommissionG and administrati&e %osts relating to the poli%"$

the mar#eting some other

)#

/und Management Charge F/MCG

.edu%ted as a per%entage of the %ustomer0s fund on a dail" )asis$ These are intended to %o&er the ongoing %osts of managing the in&estments of the poli%"$ The dail" unit pri%e alread" in%ludes a lo( fund management %harge of $2; < per annum of the fund0s &alue$ reat maturit" &alues In the long term* the #e" to )uilding is lo( /MC$

Administration Charges

A %harge of Rs$ @ 0 per month is %harges to %o&er regular administration %osts$ -./C 42 ma#e the %harge )" %an%eling units in ea%h of the funds %ustomer ha&e %hosen* in the proportion %ustomer ha&e %hosen$

Poli%" /ee

A fi+ed monetar" dedu%tion done from the %ustomer0s fund on a monthl" )asis$ This %harge is ta#en to %o&er the ongoing %osts of administration of the poli%" and for an" rene(al %ommissions$

Ris# Charges

.edu%ted from the %ustomer0s fund on a monthl" )asis$to %o&er the %ost of lie %o&er %riti%al illness and a%%idental death depending on the option the %ustomer has %hosen$ E&er" month -./C 42 %ustomers ma#e a %harge or pro&iding %ustomer (ith the death or f %riti%al illness %ustomer (ith the death or %riti%al illness %o&er the" ha&e sele%ted$ The amount of %harges ta#en ea%h month depend on %ustomer age$

)$

Miscellaneous
-o(e&er "ou ma" %ome a%ross other %harges* (hi%h are used )" other %ompanies else (here in the mar#et$ -ere are fe( e+amples8

#urrender "-arges
Are applied (hen a poli%" is surrendered$ The" are used to re%o&er %osts and lost profits$ On %an%ellation or surrender of the poli%" )efore > "ears of regular premiums ha&e )een paid$ The %ompan" (ill ma#e a %harge of 2;< of the outstanding premiums due for the remainder of this > "ear period$

#6itc- or Redirection "-arges

These %o&er the additional administration %osts asso%iated (ith s(it%hing in&estments )et(een funds and redire%ting premiums$ Companies also sometimes use them to dis%ourage e+%essi&el" fre=uent s(it%hes are premium redire%tions$ Premium alterations in%lude stopping and restarting the regular premium after > "ears$ The Co$ -./C 42 does not %harge for an" of these options %urrentl"$ The -./C 42 reser&es the right to introdu%e su%h %harges after appro&al from the IR.A

*H/ 04/ ' 4)%T $%)(E

o Premium pa"ing g o 6ithdra(als o Prote%ti&e elements$
)(

&$')

A unit : lin#ed plan offers the )enefits of mar#et : lin#ed returns$ It gi&e fle+i)ilit" in

))

E#%+) O! ') 4)%T $%)(E

&$')

The produ%t spe%ifi%ation (ould in%lude F(here rele&antG8

"$'## O! &RO 4"T

The te%hni%al %lass of produ%t : e$g$ (hole* endo(ment* pension$ 5ersions a&aila)le : single life* 'oint life Ffirst death* last sur&i&orG* and )usiness$ Premium options : single* regular* fle+i)le$ Allo(a)le insuran%e )enefit add!ons$

%)5E#TME)T#
/und lin#s a&aila)le and in&estment o)'e%ti&es of ea%h fund$ In&estment guarantees For la%# of in&estment guaranteesG Methods and fre=uen%" of unit pri%ing$ The in&estment a%%ounting and management s"stem to )e used$

M'R(ET%)+ ')

%#TR%04T%O)

The distri)ution %hannels through (hi%h the produ%t is a&aila)le$ 5ariations of produ%t design )" distri)ution %hannels* if an"$ The initial and rene(al %ommission pa"a)le rules Capa)ilities of illustration s"stem to )e used$ Mar#eting material to )e a&aila)le* Training and =ualifi%ation standards of anti lin#ed insuran%e intermediaries$

' M%)%#TR'T%O)
Business pro%essing rules : ne( and ongoing )usiness$ Poli%" and endorsement (ordings$Cash pro%essing rules : allo%ation of %ast to poli%ies* late pro%essing rules$Permitted poli%" %hanges F)" the insurer and )" the %lientG A&aila)ilit" of loans and E or partial (ithdra(als and the rules for administering them Non! forfeiture pro&isions$

)*

&R%"%)+
This means the le&el and t"pe of %harges that the insurer %an ta#e under the poli%"$ The t"pes of %harge* (hi%h %an )e le&ied* are initial %harges* surrender %harges* rene(al %harges* fund management %harges* and s(it%h or redire%tion %harges$ In addition* %harges are ta#en for add!on )enefits if the premium for su%h )enefits is not in%luded in the total premium pa"a)le$

%)%T%'$ "H'R+E#
Initial %harges are intended to %o&er the mar#eting* distri)ution and other ne( )usiness %osts relating to the poli%"$ There are man" different &ariations of initial %harges* )ut essentiall"* (hate&er method is usedC the effe%t is that less mone" is a%tuall" allo%ated to the poli%" than is re%ei&ed from the %lient for a period of time$ 4ome possi)le (a" of doing this are8 Allo%ate no mone" to the poli%" for a period of months$ Allo%ate onl" a proportion of ea%h premium to the poli%" for a period of months$ Allo%ate mone" re%ei&ed in the earl" months of a poli%" to units that ha&e a higher fund management %harge than these pur%hases )" later premiums$ In the e&ent of the poli%" )eing surrendered* the future e+%ess fund management %harges* in e+%ess of the regular %harges that (ould ha&e )een le&ied on these units* are le&ied at the point of surrender$ As su%h* the e+%ess fund management %harges (ill )e re%ei&ed regardless of (hether the poli%" runs its full term or not* and onl" the amount of mone" re=uired to pur%hase the units net of the e+%ess fund management %harges needs to )e allo%ated to the poli%"$

'

:O) 0E)E!%T# "H'R+E#

These are usuall" %al%ulated using a %urrent %ost method Funless the premium for add! on )enefits is in%luded in the total premiumG$ This means that ris# premium rate are applied ea%h month the sum at ris# under ea%h )enefit$ An" %harge o&er and a)o&e
)+

the pure ris# premium %harge (ill help offset e+penses$

"HOO#%)+ ' "H'R+%)+ #TR4"T4RE

The pattern of e+penses in%urred for a life insuran%e poli%" (ill al(a"s )e high a%=uisition %osts follo(ed )" mu%h lo(er )ut steadil" in%reasing rene(al %osts$ There (ill also usuall" )e a high initial %ommission follo(ed )" a mu%h lo(er rene(al %ommission$ Ideall"* therefore* the %harging stru%ture should mat%h this in%iden%e of e+penses (ith a high initial %harge follo(ed )" a mu%h lo(er le&el of rene(al %harges$ /or mar#eting reasons* this ma" )e una%%epta)le and the insurer ma" ha&e to either re%oup initial e+penses o&er a period of time )" ta#ing %harges that F4ignifi%antl"G e+%eed there rene(al e+penses or disguise the high initial %harges$ It (as this latter approa%h that ga&e rise to the %on%ept of initial units Funits that ha&e a high fund management %harge$

The alternati&e approa%h of ta#ing higher rene(al %harges ma#es the insurer &ulnera)le to earl" lapses* parti%ularl" if no surrender penalt" is applied$ Ta#ing %harges more e&enl" %an )e a%%omplished in a &ariet" of (a"s* )ut the main ones are8

A high )idEoffer spread$

An allo%ation rate of Fsignifi%antl"G less than 00<$ This ma" )e in%reased after a period of "ears to 00< or more and %an )e mar#eted as a lo"alt" )onus$ An in&estment fee Foften e+pressed as a per%entage of the premiumG

This is effe%ti&el" an additional )idEoffer spread$

A high fund management fee on all units$ This %ould )e redu%ed after a period of "ears Ffor e+ample )" allo%ating )onus unitsG to )ring the fund management %harge into line (ith the mar#et more$ These %an )e used either in isolation or in %om)ination$
),

Types of 4nit lin.ed plan

There are man" unit lin#ed plan of -./C standard life insuran%e %ompan"$

$ 1nit 2in#ed Joung 4tar Plus II 2$ 1nit 2in#ed Pension II >$ 1nit 2in#ed Endo(ment II A$ 1nit lin#ed enhan%ed life prote%tion ;$ %hildren plan @$ Mone" )a%# plan ?$ 4ingle premium (hole of life plan 9$ 4a&ing assuran%e plan But in this pro'e%t I ha&e dis%uss onl" three plans )e%ause these three plans ha&e the ma+imum share in the total )usiness of the -./C 4tandard life insuran%e %ompan" limited$ These plans are as follo(s8 $ 1nit 2in#ed Joung 4tar Plus II 2$ 1nit 2in#ed Pension II >$ 1nit 2in#ed Endo(ment II

*-

8, 4nit lin.ed /oung #tar &lus %%

As a parent* "our priorit" is "our %hildren0s future and )eing a)le to meet their dreams and aspiration$ Toda"* (e need more mone" for pro&iding a good edu%ation* esta)lishing a professional %areer or e&en a modest (edding )e%ause these are e+pensi&e$ Costs are in%reasing fast$ Just imagine ho( mu%h (e need (hen our %hildren ta#e these important steps in life (hen institute li#e IIM is in%reasing their fees for edu%ation )" leaps and )ound$ This plan ensures us a )right future for "our %hildren$ It ma#es "our %hild a)le to lead a life of respe%t and dignit" (ith a se%ured finan%ial future$

0enefits of t-is plan The -./C unit lin#ed Joung star Plus II gi&es us8 5alua)le prote%tion to "our %hild in %ase "ou are not around$ An outstanding in&estment opportunit" )" pro&iding a %hoi%e of thoroughl" resear%hed and sele%ted in&estments$ Regular lo"alt" units to )oost "our fund &alue e&er" "ear$ /le+i)le )enefit %om)inations and premium pa"ment options$ /le+i)le additional )enefit options su%h as %riti%al illness %o&er$ /le+i)le )enefit pa"ment preferen%es! .ou)le and Triple Benefit$

T-ree steps to o6n your plan #tep89 "HOO#E /O4R RE+4$'R &REM%4M IN this poli%" "ou (ill %ontinue to pa" ea%h "ear of the poli%"$ Jou %an pa" monthl"* half! "earl" or annuall"$ The minimum regular premium is Rs$ 2*000 per "ear for annual and
*1

half "earl" poli%ies$ /or monthl" mode* the minimum regular premium is Rs month$

;00 per

#tep;9 "HOO#E /O4R $E5E$ O! &ROTE"T%O) (e %an %hoose an" amount of sum Assured (ith* a minimum of ; times "our %hosen annul regular premium and a ma+imum of A0 times "our %hosen annul regular premium$

#tep<9 "HOO#E ' %T%O)'$ &$') 0E)E!%T It offers a range of &alua)le prote%tion options to se%ure the future for (hole famil"$

0enefit Types

0enefit payment &reference

#ummary of t-e benefits $It (ill pa" the sum assured to the )enefi%iar"$ 2$ Our famil" need not pa" an" further premiums$ it (ill

.ou)le Benefit

pa"

00< of all the future regular premiums at the

original le&el to(ards the )enefi%iar" poli%" as and (hen due* on an annual )asis$ >$ An" Criti%al illness %o&er terminates immediatel"$

.eath Benefit Triple

$ It (ill pa" the 4um Assured to the )enefi%iar"$ 2$ Our famil" need not pa" an" further premiums$ it (ill pa" ;0< of all the future premiums at the original le&el to(ards our poli%" and ;0< of the premiums (ill )e paid
*2

Benefit

to the )enefi%iar" as and (hen due* on an annual )asis$ >$ An" %riti%al illness %o&er terminates immediatel"$ $ 6e (ill pa" the sum Assured to the )enefi%iar"$ 2$ our famil" need not pa" an" further premiums$ It (ill

.ou)le Benefit

pa"

00< of all the future regular premiums at the

original le&el to(ards "our poli%" as and (hen due* on an annual )asis$ >$ The death )enefit %o&er terminates immediatel"$

Criti%al Illness Benefit Triple Benefit

$ it (ill pa" the sum assured to the )enefi%iar"$ 2$ our famil" need not pa" an" further premiums it (ill pa" ;0< of all the future premiums at the original le&el to(ards "our poli%" as and (hen due* on an annual )asis$ >$ The death )enefit %o&er terminates immediatel"$

#tep=9 "HOO#E /O4R %)5E#TME)T !4) # The most signifi%ant part of the 1nit 2in#ed Plan is that in&estor %an %hoose the mode of in&estment$ In this plan the in&estment ris# in "our %hosen in&estment portfolio is )orne )" the in&estor$ This means that the premiums "ou pa" in this plan are su)'e%t to in&estment ris#s asso%iated (ith the %apital mar#ets$ The unit pri%es of the funds ma" go up or do(n* refle%ting %hanges in the %apital mar#ets$ 4o to )alan%e in&estors le&el of ris# and return* ma#ing the right in&estment %hoi%e is &er" important and "ou are responsi)le for the %hoi%es "ou ma#e$ It has ? funds that gi&e in&estor8! aG The potential for higher )ut more &aria)le returns o&er the term of "our poli%"C or
*#

)G The more sta)le returns (ith lo(er long!term potential$ Jour in&estment (ill )u" units in an" of the follo(ing ? funds designed to meet "our ris# appetite$ Ta)le of funds are gi&en )elo(8! 'sset "lass Money mar.etKK !und $iLuid !und #table Managed !und #ecure Managed !und efensive Managed !und 0alanced Managed !und ELuity Managed !und +ro6t- !und 0!;< 0!;< 0! 0< ! 0!A0< ! @0<! 00< K;<! 00< 5er" high 5er" high 0!;< 0! ;< 20!?0< >0<!@0< -igh 0!;< 0! ;< ;0!9;< ;<!>0< 0!;< 0!20< ?;! 00< ! 2o(! Moderate Moderate 0!>0< 0an. epositKK +ovt, securities ! ! ELuity Ris. & Return Rating

K "omposition &bonds !und 00< ?0! 00<

2o( 2o(

S note on the funds sho(s (ill manage the in&estment in ea%h fund so that the proportion of ea%h Asset %lass is al(a"s (ith the ranges$ S S sho(s Mone" mar#et instruments$ It in%lude li=uid Mutual /unds* %ommer%ial papers* %ommer%ial )ills* treasur" )ills* go&ernment se%urities ha&ing an une+pired maturit" up to one "ear$ Ban# deposits means deposits issued )" an" primar" dealer or non Ban#ing and )an#ing finan%ial %ompan" appro&ed )" the reser&e )" the reser&e )an# of India or an" other pu)li% /inan%ial
*$

institutions or )" -ousing /inan%e Companies appro&ed )" the National -ousing Ban#$ The past performan%e of an" of the funds

is not ne%essaril" an indi%ation of future performan%e$ 1nit pri%es %an go up and do(n$ No fund offers an assured return$ The names of the fund it offer under this plan do not* in an" (a"* indi%ate the =ualit" of the plan* its future prospe%ts or returns$

E$%+$0%$T/ The age and term limit for ta#ing out a -./C unit lin#ed "oung star plus II are as sho( )elo(8

TERM &ER%O 1/rs,2 0E)E!%T O&T%O) $ife option $ife and -ealt- option Minimum 0 0 Ma+imum 2; 2;

'+E 'T E)TR/ 1/rs,2 M'3%M4M '+E Minimum 9 9 Ma+imum @; ;; 'T M'T4R%T/ 1/rs,2 ?; @;

#ingle &remium top up 'llocation9 The allo%ation rate for single premium top up are gi&en )elo(8

&R%M%4M &'%

4R%)+ /E'R 1Rs,2 A /E'R$/ K?$;0<

*(

'$$O"'T%O) R'TE H'$! /E'R$/ K?$;0< MO)TH$/ K?$;0<

&R%M%4M !REJ4E)"/ #ingle premium top up 1s2 :/ear 8

#ingle premium top up 1s2 :/ear ;K

K9$00<

K9$00<

K9$00<

;, 4nit $in.ed &ension %%

The masses of 1nit lin#ed Pension is li&e a life of dignit" and self respe%t$ Toda" (e are )us" %lim)ing the ladder of su%%ess and realiBing "our dreams$ Toda"* time is (ith "ou$ Just ta#e a moment and thin#$ It (ill ma#e "ou a)le to %ontinue at the same pa%e$ The -./C 1nit 2in#ed Pension is an insuran%e poli%" that is designed to pro&ide a retirement in%ome for life (ith the freedom to ma+imiBe "our in&estment returns$ 4tride into "our golden "ears of retirement (ith dignit" and pride$

0enefits of t-is plan The -./C unit lin#ed pension gi&es "ou An outstanding in&estment opportunit" )" pro&iding a %hoi%e of thoroughl" resear%hed and sele%ted in&estments$ It gi&es a post retirement in%ome for life /le+i)ilit" to plan "our retirement date and /reedom to in&est premiums as per "our preferen%e

#teps regarding t-is &lan #tep89 "HOO#E /O4R RET%REME)T '+E Jou %an sele%t an" age "ou (ish to retire at &esting age* )et(een ;0 "ears and ?; "ears$ #tep;9 "HOO#E /O4R &REM%4M /O4 *%#H TO %)5E#T, 0'#E RET%REME)T )EE
*)

O) /O4R

Jou %an %hoose either a single premium poli%" or a regular premium poli%"

/or a regular premium poli%"* "ou %ontinue to pa" "our %hosen premium ea%h "ear of the poli%"$ The minimum regular premium is Rs$ 0*000 per "ear$ Jou %an pa" monthl" Fusing standing instru%tions or e%s MandateG* =uarterl"* half "earl" or annuall"$ The minimum premium for a single premium poli%" is Rs$2;*000$ "ou ma" %hoose to pa" a ho% single premium top!up or additional regular premiums depending on the poli%" t"pe "ou ha&e %hosen and "our %on&enien%e$

#tep<9 "HOO#E /O4RT %)5E#TME)T #TR'TE+/

The most signifi%ant part of the 1nit 2in#ed Plan is that in&estor %an %hoose the mode of in&estment$ In this plan the in&estment ris# in "our %hosen in&estment portfolio is )orne )" the in&estor$ This means that the premiums "ou pa" in this plan are su)'e%t to in&estment ris#s asso%iated (ith the %apital mar#ets$ The unit pri%es of the funds ma" go up or do(n* refle%ting %hanges in the %apital mar#ets$ 4o to )alan%e in&estor0s le&el of ris# and return* ma#ing the right in&estment %hoi%e is &er" important and "ou are responsi)le for the %hoi%es "ou ma#e$ It has ? funds that gi&e in&estor8! aG The potential for higher )ut more &aria)le returns o&er the term of "our poli%"C or )G The more sta)le returns (ith lo(er long!term potential$ Jour in&estment (ill )u" units in an" of the follo(ing ? funds designed to meet "our ris# appetite$
**

Ta)le of funds are gi&en )elo(8!

*+

'sset "lass Money mar.etKK !und $iLuid !und #table Managed !und #ecure Managed !und efensive Managed !und 0alanced Managed !und ELuity Managed !und +ro6t- !und $ E$%+%0%$%T/ 0!;< 0!;< 0! 0< ! 0!A0< ! @0<! 00< K;<! 00< 0!;< 0! ;< 20!?0< >0<!@0< 0!;< 0! ;< ;0!9;< ;<!>0< 0!;< 0!20< ?;! 00< ! 0!>0< 0an. epositKK +ovt, securities ! ! ELuity

Ris. & Return Rating

K "omposition &bonds !und 00< ?0! 00<

2o( 2o(

2o(! Moderate Moderate

-igh

5er" high 5er" high

The age and term limit for ta#ing out the -./C unit lin#ed pension II are as )elo(8

TERM &ER%O Minimum 0

1/rs,2 Ma+imum A0

'+E 'T E)TR/ 1/rs,2 Minimum 9 Ma+imum @;

'+E 'T 5E#T%)+ 1/rs,2 Minimum ;0 Ma+imum ?;

&remium allocation c-arges

*,

This is the premium )ased %harge$ After dedu%ting this %harge from "our premium* the remainder is in&ested to )u" unit$ The allo%ations are guaranteed for the entire duration of the poli%" term$

&R%M%4M &'%

4R%)+ /E'R 1Rs,2 A

&REM%4M '$$O"'T%O) R'TE /E'R$/ H'$! /E'R$/ MO)TH$/

&R%M%4M !REJ4E)"/ 'nnualized regular premium :/ear 8 2*000 to A*KK*KKK ;*00*000 to 0*00*000 'nnualized regular premium :/ear ; 'nnualized regular premium :/ear <K

@0< 90< 9;< K9<

@0< 90< 90< K9<

@0< 90< 90< K9<

#ingle &remium top up 'llocation9 The allo%ation rate for single premium top up are gi&en )elo(8

#%)+$E &REM%O4M TO&:4& 1s2 Paid during !Jear Paid during !Jear 2S

'$$O"'T%O) R'TE K?$;0< K9$00<

<, 4nit $in.ed Endo6ment %%

It0s massage is to in&est in finan%ial se%urit" and self respe%t for "our and "our famil" in this poli%"* the in&estment ris# in in&estment portfolio is )orne )" the poli%" holder$
+-

0enefits of t-is product

The -./C unit lin#ed endo(ment plus II gi&es A &alua)le prote%tion to "our famil" in %ase "ou are not around$ An outstanding in&estment opportunit" )" pro&iding a %hoi%e of the thoroughl" Resear%hed and sele%ted in&estment$ /le+i)le additional )enefit options su%h as %riti%al illness %o&er$ /le+i)ilit" )enefits %om)ination and premium pa"ment option$

#imple steps for t-is product

#tep89 "HOO#E /O4R RE+4$'R &REM%4M This is the premium "ou (ill %ontinue to pa" ea%h "ear of the poli%"$ Jou %an pa" monthl"* half!"earl" or annuall"$ The minimum regular premium is Rs 2*000 per "ear for annual and half "earl" poli%ies$ /or monthl" mode* the minimum regular premium is Rs$ *;00 per month$ Jou ma" also %hoose to pa" although single premium or additional regular premiums depending on "our %on&enien%e$

#tep;9 "HOO#E /O4R $E5E$ O! &ROTE"T%O) Jou %an %hoose an" amount of sum Assured (ith8
+1

A minimum of ; times "our %hosen annual regular premium$ A ma+imum of A0 times "our %hosen annual regular premium$

#tep<9 "HOO#E ' %T%O) &$') 0E)E!%T It offer a range of &alua)le prote%tion options to se%ure the future for "our famil"

2ife option E+tra 2ife option 2ife and health option

! ! !

.eath Benefit death )enefit S a%%idental .eath )enefit .eath )enefit S %riti%al illness )enefit .eath )enefit S %riti%al illness )enefit S A%%idental .eath )enefit$

E+tra life and health option !

0enefit types

#ummary 6e (ill pa" the greater of "our sum assured Fless an"

.eath Benefit

(ithdra(als "ou ha&e made in the t(o "ear )efore "our %laimG and "our total fund &alue to "our famil"$ The poli%" (ill terminate$ 6e (ill pa" the greater of "our sum assured Fless an" (ithdra(als "ou ha&e made in the t(o "ear )efore "our %laimG and "our total fund &alue to "our famil"$

Criti%al illness )enefit

The poli%" (ill terminate$ In addition to the death )enefit* (e (ill pa" a further

A%%idental .eath Benefit$

sum assured to "our famil"$ The poli%" (ill terminate$

+2

#tep=9 "HOO#E /O4R %)5E#TME)T !4) #

The most signifi%ant part of the 1nit 2in#ed Plan is that in&estor %an %hoose the mode of in&estment$ In this plan the in&estment ris# in "our %hosen in&estment portfolio is )orne )" the in&estor$ This means that the premiums "ou pa" in this plan are su)'e%t to in&estment ris#s asso%iated (ith the %apital mar#ets$ The unit pri%es of the funds ma" go up or do(n* refle%ting %hanges in the %apital mar#ets$ 4o to )alan%e in&estors le&el of ris# and return* ma#ing the right in&estment %hoi%e is &er" important and "ou are responsi)le for the %hoi%es "ou ma#e$ It has ? funds that gi&e in&estor8! aG The potential for higher )ut more &aria)le returns o&er the term of "our poli%"C or )G The more sta)le returns (ith lo(er long!term potential$ Jour in&estment (ill )u" units in an" of the follo(ing ? funds designed to meet "our ris# appetite$ Ta)le of funds are gi&en )elo(8!

+#

'sset "lass Money mar.etKK !und $iLuid !und #table Managed !und #ecure Managed !und efensive Managed !und 0alanced Managed !und ELuity Managed !und +ro6t- !und 0!;< 0!;< 0! 0< ! 0!A0< ! @0<! 00< K;<! 00< 0!;< 0! ;< 20!?0< >0<!@0< 0!;< 0! ;< ;0!9;< ;<!>0< 0!;< 0!20< ?;! 00< ! 0!>0< 0an. epositKK +ovt, securities ! ! ELuity

Ris. & Return Rating

K "omposition &bonds !und 00< ?0! 00<

2o( 2o(

2o(! Moderate Moderate

-igh

5er" high 5er" high

S note on the funds sho(s (ill manage the in&estment in ea%h fund so that the proportion of ea%h Asset %lass is al(a"s (ith the ranges$ S S sho(s Mone" mar#et instruments$ It in%lude li=uid Mutual /unds* %ommer%ial papers* %ommer%ial )ills* treasur" )ills* go&ernment se%urities ha&ing an une+pired maturit" up to one "ear$ Ban# deposits means deposits issued )" an" primar" dealer or non Ban#ing and )an#ing finan%ial %ompan" appro&ed )" the reser&e )" the reser&e )an# of India or an" other pu)li% /inan%ial institutions or )" -ousing /inan%e Companies appro&ed )" the National -ousing Ban#$ The past performan%e of an" of the funds is not ne%essaril" an indi%ation of future performan%e$ 1nit pri%es %an go up and do(n$ No fund offers an assured return$ The

+$

names of the fund it offer under this plan do not* in an" (a"* indi%ate the =ualit" of the plan* its future prospe%ts or returns$

E$%+$0%$T/ The age and term limit for ta#ing out a -./C unit lin#ed Endo(ment II are as sho( )elo(8

TERM &ER%O 1/rs,2 0E)E!%T O&T%O) $ife option E7tra life option $ife and -ealt- option E7tra life and -ealtoption Minimum 0 0 0 0 Ma+imum >0 >0 >0 >0

'+E 'T E)TR/ 1/rs,2 M'3%M4M '+E Minimum 9 9 9 9 Ma+imum @; ;; ;; ;; 'T M'T4R%T/ 1/rs,2 ?; ?0 @; @;

#ingle &remium top up 'llocation9 The allo%ation rate for single premium top up are gi&en )elo(8

#%)+$E &REM%O4M TO&:4& 1s2 Paid during !Jear Paid during !Jear 2 Paid during !Jear >S

'$$O"'T%O) R'TE K?$;0< K?$;0< K9$00<

+(

Ta7 benefit 10ased on current ta7 la62 /ou (ill )e eligi)le for ta+ )enefit under se%tion 90C and se%tion 0F 0.G of the in%ome ta+* K@ * su)'e%t to the pro&ision %ontain therein$ 1nder se%tion 90C* "ou %an sa&e up to Rs$ >>*KK0 from "our ta+ ea%h "ear F%al%ulate on the higher ta+ )ra%#etG as premium up to Rs$ *00*000 are allo(ed at a dedu%tion from "our ta+a)le in%ome$ 1nder se%tion 0F 0.G* the )enefit "ou re%ei&e from this poli%" are e+empt from ta+$

The a)o&e mentioned ta+ )enefits are su)'e%ted to the %hange in the ta+ la($

+)

%)TRO 4"T%O) O! !4) #

All the unit lin#ed plans of -./C standard life insuran%e %ompan" ha&e the ? t"pes of fund$ The" are as follo(s8!

8, $iLuid fund ;, #table managed fund <, #ecure managed fund =, efensive managed fund >, 0alanced managed fund ?, ELuity managed fund @, +ro6t- fund

The -./C standard life insuran%e pro&ide these ? funds to their in&estor$ These fund are different from ea%h other a%%ording to their in&estment paturn$ This fund is useful and fruitful for all t"pe of in&estors$ These funds are different from ea%h other some fund pro&ide higher return to their in&estor (ith a high ris#* some fund pro&ide less return (ith &er" less ris#* and some funds pro&ide moderate return (ith a moderate rate of ris#$ 4o the in&estors ha&e &arious t"pes of options to in&est their fund$ If the in&estor (ant less return )ut se%urit" of in&estment then there is li=uid fund for them* if the in&estor (ants high return and a%%ept the high ris# fa%tor then there is gro(th fund is a&aila)le$ /or the moderate return there are )alan%ed managed fund* e=uit" managed fund* defensi&e managed fund are a&aila)le$ Thus the in&estors ha&e &arious option for in&estment their mone"$
+*

!4) # ')

%)5E#TME)T#

The fund %hoi%es a&aila)le on our unit lin#ed "oung 4tar plan are the same as the funds under the e+isting unit lin#ed endo(ment plan$ Jou (ould alread" )e familiar (ith these funds8

a2 $iLuid !und
The 2i=uid fund in&ests 00< in )an# deposits and high =ualit" short!term mone"

mar#et instruments$ The fund is designed to )e %ash se%ure and has a &er" lo( le&el of ris#C ho(e&er unit pri%es ma" o%%asionall" go do(n due to the use of short!term mone" mar#et instruments$ At in%eption* in&estments up to 20< %an )e allo%ated to this fund$ Indi&idual life

++

b2

#ecure Managed !und

The 4e%ure Managed fund in&ests 00< in ,o&ernment 4e%urities and Bonds issued )" %ompanies or other )odies (ith a high %redit standing* ho(e&er a small amount of (or#ing %apital ma" )e in&ested in %ash to fa%ilitate the da"! to!da" running of the fund$ This fund has a lo( le&el of ris# )ut unit pri%es ma" still go up or do(n$

individual pension

+,

"2

efensive Managed !und

;< to >0< of the .efensi&e Managed fund (ill )e in&ested in high =ualit" Indian e=uities$ The remainder (ill )e in&ested in ,o&ernment 4e%urities and Bonds issued )" %ompanies or other )odies (ith a high %redit standing$ In addition* a small amount of (or#ing %apital ma" )e in&ested in %ash to fa%ilitate the da"!to!da" running of the fund$ The fund has a moderate le&el of ris# (ith the opportunit" to earn higher returns in the long term from some e=uit" in&estment$ 1nit pri%es ma" go up or do(n$

,-

d2 0alanced Managed !und

>0< to @0< of the Balan%ed Managed fund (ill )e in&ested in high =ualit" Indian e=uities$ The remainder (ill )e in&ested in ,o&ernment 4e%urities and Bonds issued )" %ompanies or there )odies (ith a high %redit standing$ In addition a small amount of (or#ing %apital ma" )e in&ested in %ash to fa%ilitate the da"!to!da" running of the fund$ The fund has a higher le&el of ris# (ith the opportunit" to earn higher returns in the long term from the higher proportion it in&ests in e=uities 1nit pri%es ma" go up or do(n$

,1

E2 +ro6t- !und
The ,ro(th fund in&ests 00< in high =ualit" Indian e=uities$ In addition a small amount of (or#ing %apital ma" )e in&ested in %ash to fa%ilitate the da"!to!da" running of the fund$ The fund has a higher le&el of ris# (ith the opportunit" to earn higher returns in the long term$

,2

!2 #table Manage fund

00< fund of sta)le manage fund are in&ested in ,o&ernment se%urities U )onds issues )" %ompanies and other )odies (ith a high %redit standing$ This fund ha&e a lo( le&el of ris# due to e+posure onl" to short term )ond Fma+imum 2 "earsG$ This fund gi&es the higher potential return than li=uid fund o&er a long period of time$ this fund ha&e no in&est in short term mone" mar#et instruments$

+2 ELuity managed fund

@0 to 00< of e=uit" managed fund (ill )e in&ested in high =ualit" Indian e=uit" and remaining of fund is in&ested in go&ernment se%urities and )onds issues )" %ompanies and other )odies (ith a high %redit standing$ In addition a small amount of (or#ing %apital ma" )e in&ested in %ash to fa%ilitate to da"!to!da" running of the funds$ The fund has the high le&el of ris# (ith a greater long term return$ The small )ond holding (ill add di&ersifi%ation and pro&ide a little sta)ilit"$

,#

&erformance #tatistics
The long!term (orth of an" 1nit 2in#ed poli%" %omes from Y The in&estment return it gi&es o&er time Y The effe%t of the %harges o&er the lifetime of the poli%" The illustration pro&ide at the point of sale %ompl" (ith IR.A guidelines and sho( the effe%t of %harges$ This in&estment return data sho( that ho(* in general the &arious funds are performing$ This illustrated sho(s ho( our unit!lin#ed funds a&aila)le to our Retail Pension )usiness ha&e performed so far$ 6e are illustrating our performan%e from M8:Ian:M> F !"ear after laun%h8 02!Jan!0AG to Iuly, ;MMB$using %harts$ These %harts are sho(ing that a%tual "ear!on!"ear performan%e of our fund against the "ear!on! "ear performan%e of a %ompara)le mar#et inde+ Z F4our%e8 AM/IG$the" are not sho(ing the unit pri%es Fnormall" %alled NA5sG The" are the superior (a" of understanding performan%e )e%ause8 Y Allo( us to %ompare different funds (ith different starting NA5s Y Allo( us to %ompare A%tual performan%e Y Pro&ide us (ith a more %omprehensi&e summar" than traditional %harts$ /or a da" (here the green %olumn is higher than the red line* -./C 42 has pro&ided a )etter return than the inde+ o&er the pre%eding "ear$ /or a da" (here the green %olumn is lo(er than the red line* -./C 42 has pro&ided a lo(er return than the inde+ o&er the pre%eding "ear$ To let "ou see )oth (hen -./C 42 has ma#e under or o&er performed the Inde+ (e ha&e sho(n the inde+ returns as a line not a series of %olumns$ CRI4I2 [ Indi%es are the sole propert" of CRI4I2 2imited FCRI4I2G$ CRI4I2 Indi%es shall not )e %opied* retransmitted or redistri)uted in an" manner for an" %ommer%ial use$ CRI4I2 has ta#en due %are and %aution in %omputation of the Indi%es* )ased on the data o)tained from sour%es* (hi%h it %onsiders relia)le$ ,$

INDIVIDUAL-PENSION
A look at changes in unit prices over a various period of time

. Li!"id #"nd
2i=uid fund 2$00< 0$00< 9$00< @$00< A$00< 2$00< 0$00< 200A!0; 200;!0@ 200@!0? 200?!09 2009!0K CRI4I2 li=uid fund

$. Se%"re &ana'ed #"nd

4e%ured manage fund ;$00< 0$00< ;$00< 0$00< !;$00< I!se% %omposit inde+

200A!0; 200;!0@ 200@!0? 200?!09 2009!0K

,(

(. )a*an%ed &ana'ed #"nd

Balan%ed managed fund ;0$00< A0$00< >0$00< 20$00< 0$00< 0$00< ! 0$00< !20$00<

CRI4I2 )alan%ed fund

200A!0; 200;!0@ 200@!0? 200?!09 2009!0K

+. Gr,-t. #"nd

,ro(th fund 00$00< 90$00< @0$00< A0$00< 20$00< 0$00< !20$00< !A0$00<

B4E 00

200A!0; 200;!0@ 200@!0? 200?!09 2009!0K

,)

/. E!"it0 &ana'ed #"nd

E=uit" managed fund ?;< B4E 00 S 2;< I!se% %omposit inde+ A0$00< >0$00< 20$00< 0$00< 0$00< 200A!0; 200;!0@ 200@!0? 200?!09 2009!0K

1. De#en2i3e &ana'ed #"nd

.efensi&e managed fund 20$00< ;$00< 0$00< ;$00< 0$00< !;$00<

CRI4I2 mip )lended

200A!0; 200;!0@ 200@!0? 200?!09 2009!0K

,*

"O)"$4#%O)
The main o)'e%ti&e of all the in&estor is to earn the higher return on their in&estment so the" al(a"s tr" to in&est in those se%urities and fund (hi%h gi&e them higher return (ith a less ris#$ In this pro'e%t i tried to fo%us on the performan%e of &arious funds of the -./C 42I$ /rom the &arious data a&aila)le for helping in the pro'e%t %ompilation I (e said that the performan%e of the &arious funds of the -./C 4tandard life insuran%e is )etter than (hat is pres%ri)ed )" CRI4I2 In this pro'e%t I %on%lude that the return on the &arious funds of the -./C standard life insuran%e is high than the CRI4I2 inde+ed$ The return of the gro(th fund of -./C 42I is greater than the B4E 00$ The return on the )alan%ed managed fund is also greater than the CRI4I2 )alan%ed fund$ The return of this fund (as e=ual for some time to the CRI4I2 )alan%ed fund$ The performan%e of the defensi&e managed fund of the -./C standard life insuran%e is al(a"s )etter than the CRI4I2 mip )lended inde+$ This fund al(a"s gi&es the high return to their %ustomer$ The performan%e of the se%ure managed fund of -./C standard life insuran%e is mostl" e=ual to the performan%e of the I!se% %omposite inde+$ Both the fund gi&e the good return to their %ustomer$ The li=uid fund of the -./C standard life insuran%e is &er" high than the CRI4I2 li=uid fund$ The performan%e of this fund is al(a"s )etter than the other fund$ The e=uit" fund of -./C standard life insuran%e not gi&es the good return to their in&estor )ut it is fair and suffi%ient$ Thus after see all the a&aila)le data (e %an said that the all the funds of the -./C standard life insuran%e gi&e the higher return to their %ustomer than the other fund$ The performan%e of the entire fund in the mar#et is good and the in&estor li#e to in&est in these

,+

funds$ On the a)o&e dis%ussion (e %an said that the performan%e of those funds ma" )e good in future )ut is totall" depends upon the mar#et %ondition and flu%tuation$

,,

RE"MO) 'T%O)

The performan%e of fund is good$ The" gi&e higher return to their in&estor )ut all the in&estor (ants higher and higher return )e%ause it0s human nature$ 4o -./C 42I should tr" to in%rease their return of &arious funds$ Compan" %an in%rease their return through sele%tion of )etter se%urities* shares* )onds* go&ernment se%urities et%$ Compan" should ta#e the effe%ti&e portfolio in&estment de%ision$ No dou)t %ompan" pro&ides good return to their in&estor )ut if the %ompan" sele%ts effe%ti&e and fruitful portfolio in&estment plan than %ompan" in%rease their return$ If the %ompan" pro&ides )etter return to their in&estor than it in%reases the good(ill and mar#et share of the %ompan" and it )e%ome a top insuran%e %ompan"$

1--

'&&E) %3

FThis Information is for our internal use onl"* (ill not to )e dis%losed to an" other organiBation E departmentG "onsumer 0e-avior to6ards %nsurance

Name Telephone O%%upation Marital 4tatus 4ingle \ Married \

Address Age Annual In%ome FAge of Children if appli%a)leG

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! T$ An" There Insuran%e Companies* (hi%h "ou are a(are of X

T$ 2 6hat do "ou thin# Insuran%e Is X A2$ Ne%essit" for Prote%tion and se%urit" \ Imposition as an E+tra Burden on e+penditure \ A %ompulsor" Tool for Ta+ 4a&ing \ T$> 6hat are the main %onsiderations that a %ustomer loo#s at (hile pur%hasing an insuran%e poli%"$
1-1

A>$ T$A

Ta+ \

4a&ing \

Prote%tion \

Pension \

In&estment \

6hat (ould "ou see (hile pur%hasing an Insuran%e Poli%" from a Compan" X

AA$

4tanding and ,ood(ill of the Compan" \ Produ%t range of the Compan" \ Ad&ertisement )eing gi&en )" the %ompan" \ 4er&i%es )eings gi&en )" the Compan" \ Communi%ations and 3no(ledge of the representati&e \ Returns and Bonus de%lared )" the Compan" \ Other \ Please spe%if" PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP

T$; A$; T$@ A$@

6h" "ou (ant to )u" another Insuran%e X Ta+ Benefits \ 4a&ings \ Other \ If sa&ing* 6hat are "our finan%ial needs in ne+t 0!20 "ears$ Child Edu%ation \ Marriage -ouse Constru%tion Retirement Needs \

T$ ? Are "ou a(are a)out the 1nit 2in# Plans )eings laun%hed )" &arious Insuran%e Companies$ A$?$ Jes \ No \ FIf "es* name the Co$ and produ%tsG

An" other %omments 8 PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP

1-2

FThan# JouG

0%0$%O+R'&H/
*E0#%TE#
((($hdf%insuran%e$%om ((($e%onomi%times$%om ((($irdaindia$%om ((($iiifindia$%om ((($google$%om and other sear%h engines

0RO4"HER#
-./C 4tandard 2ife Insuran%e

0OO(#
2ife Insuran%e of RNI4 Collage of Insuran%e Mishra* M$N$C Insuran%e Prin%ipal and Pra%ti%e

References

We sites
1-#

http8EE((($hdf%standardlifeinsuran%e$%om http8EE((($i%i%iprulife$%omEinde+$'sp

1-$