CHAPTER-1

INTRODUCTION

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 OVERVIEW OF INDUSTRY AS A WHOLE

The insurance sector has a long history in India. It began in the early years of the 19 th
century. The 1st legal enactment was made in 1870. The 1st Indian Insurance Act was
passed in 1938 and amended in 1950, when it was nationalized. However, the sector was
once again thrown open to the private sector on December 2007, followed by the
establishment of the Insurance Regulatory and Development Authority (IRDA) in April
2008.
Though the Insurance Sector is now open for private players as a consequence of the
new liberalization policies of the Government, the existing government owned Insurance
companies will, nevertheless, continue to be in the government sector. These existing
companies will, however, have to strive for better realization of their corporate
objectives and goals to meet the demands and expectations of the public.
Quality of service and product that an industry offers must move forward with progress
in the state of the economy. As the quantum and quality of service change over time, the
levels at which customers continue to remain satisfied with the services provided, also
keep on increasing. Ultimately, the success of any industry depends upon its positioning
in the state of economy and on meeting the expectations of the service users.
(ref.bibliography)
With competition, the performance level of individual companies is expected to
increase. Segmentation is taking place within the economy with a need for socially
responsive service sector.
Globalization is the new economic reality, which is here to stay, heralding a new era of
insurance in India. With the opening of the insurance industry, India stands to gain with
the following major advantages:
• Globalization will provide improved opportunities to the customer for better
products, with more reasonable and affordable pricing.
• The customer will get faster servicing.
• It will enhance the savings rate.
• Long-term funds for infrastructure development will be available to the Country.

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• It will secure for India larger inflows of foreign capital needed to sustain our GDP
growth.
INSURANCE- WHAT IS IT?

Man has always been in search of security and protection from the beginning of
civilization. This urge led him to the concept of insurance. The basis of insurance was
the sharing of the losses of a few amongst many. Insurance provides financial stability
and strength to the individuals and organization by the distribution of loss of a few
among many by many by building up over a period of time.

The legal definition of insurance is that, “it is a contract between the insurer and
insured whereby, in consideration of payment of premium by the insured the
insurer agrees to make good any financial loss the insured may suffer due to
consideration of an insurance peril.”

Insurance means Spreading of Losses or Sharing of Risks. Life is full of risks. For
property, there are fire risks; for shipment of goods, there are perils of sea; for human
life there are risks of death or disability; so on and so forth. The risks are uncertain-may
or may not occur. People facing common risks come together and give their small
contribution to the common fund. While it may not be possible to tell before, which
persons will suffer, but it is possible to tell how many persons on an average out of the
group will suffer loss. If any case risk occurs, loss is made good out of common fund. In
this way, all shares common risk. Insurance, thus broadly can be understood as the
process of spreading of losses of an individual, over the group of individuals or the
process of sharing of risk by those who face common risk. People who suffer loss get
relief because their loss is made good out of common fund. People who do not suffer
loss get relief because they are free of any worry of loss. Following 2 e.g. explain the
above concept of insurance.

Insurance as a social security tool

Any progressive state is expected to take care of the well being of its people. The
economic needs of the people will include food, Clothing, housing, education, medical
care and security in the event of unemployment. Sickness etc. this has been recognized
by the united Nation Declaration of Human Rights and Article 41 of the Indian
constitution. Within the financial resources, The government have extended the concept
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of social security specially to the weaker sections through the mechanism of group
insurance.
Of late the governments all over the world have realized that the resources are quite
limited to meet all the needs of the people as a described above. In this context, the
importance of commercial insurance, particularly its group insurance variant, as a social
security tool is being recognized. Without life insurance, economic condition life
insurance in this sense serves a social purpose.

INSURANCE OPPORTUNITIES IN INDIA

• Not even 25% of the insurable population has been extended the insurance
cover. Market penetration is quite low and hence the potential to exploit is very
high.
Insurance premium per capita is very low ($4).
• Lack of a comprehensive social security system/state benefit and welfare means
that demand for pension products should be high.
• There is a huge middle class section of approximately 300 million.
• Existing insurance companies score very low on the customer service front
THE INSURANCE REFORMS ROUTE
So, its clear that the insurance was in private hands before 1971 and was nationalized in
1972 with all private companies merged into General Insurance Corporation of India as
the parent company with 4 subsidiaries as National Insurance Company Ltd. with Head
Office at Calcutta, New India Assurance Company Ltd. with Head Office at Bombay,
Oriental Insurance Company Ltd. with Head Office at New Delhi and United India
Insurance Company Ltd. with Head Office at Madras.
In 1993 the need for Private Insurance Companies and Multinational Companies was
felt and beginning of liberalization process started.
April 1993 R N Malhotra Committee an Insurance Sector
reforms & deregulation set up.
January ‘94 Malhotra Committee submits report to Finance
Ministry.
January ‘96 An interim INSURANCE REGULATORY
AUTHORITY set up thru a resolution.

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 September ’96 INSURANCE REGULATORY AUTHORITY Bill
drafted.
December ’96 The INSURANCE REGULATORY AUTHORITY
Bill introduced in the Parliament and referred to a
standing committee.
August ’97 The INSURANCE REGULATORY AUTHORITY
Bill is withdrawn following opposition to foreign
participation in the domestic insurance sector.
November ‘97 Union government gives greater autonomy to LIC,
GIC and its 4 subsidiaries.
June ‘98 Union Budget announces opening up of the insurance
sector.
January ‘99 Notification of IRA is statutory authority and
amendments LIC & GIC Acts.
March ‘99 INSURANCE REGULATORY AUTHORITY sets
the procedure for filing applications.
April–July ‘99 3 months open window for receipt of application.
December ‘99 In principal approvals to be granted.
2000 Private Insurance products hit the market.

After a long wait, however, there was light at the end of the tunnel when the Union
Cabinet first gave its nod for 26% direct foreign equity in any insurance JV, and later
allowed foreign institutional investors (FIIs) to hold 14% stake in such ventures
effectively pushing up the foreign equity proportion to 40%.
THE ROADMAP TO PRIVATIZATION

• Insurance Regulatory Authority Bill was placed before Parliament. New act to
grant statutory powers to Insurance Regulatory Authority to issue guidelines and
regulate industry.
• GIC and LIC Acts were amended. Such an amendment was crucial as the Acts
disallows any other entity to issue policies.
• Guidelines for new private insurance companies were announced by Insurance
Regulatory Authority, which would include capital requirement, solvency margins
etc.

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 • Legislation was framed to permit institution of brokers to operate in the country.

What is life insurance?

Life insurance is an agreement or a contract between you (the insured) and an

insurer. Under the terms of a life insurance contract, the insurer promises to pay a
certain sum to someone (a beneficiary) when you die, in exchange for your premium
payments.
Why would you need life insurance?
The most common reason for buying a life insurance is to replace the income lost
when one dies.
For e.g., say that you work, and that your income is used to support yourself and
your family. When you die, and your paychecks stop, the life insurance proceeds
can be used to continue to support the family members you've left behind.
Another common use of life insurance proceeds is to pay off any debts you leave
behind. For e.g., mortgages, car loans, medical bills, and credit card debts are often
left unpaid when someone dies. These obligations must be paid from the assets left
behind. This can deplete the resources that your family needs. Life insurance can be
used to pay off these debts, leaving your other assets intact for your family to use.
Life insurance provides liquidity to your estate. When you die, you may leave some
liquid assets (such as cash, CDs, and savings bonds), and some illiquid assets (such
as real estate, an automobile, and stocks). Your liquid assets may not be enough to
pay all the debts that you leave behind, plus all the expenses that arise because of
your death (such as funeral expenses and estate taxes). Your illiquid assets may
have to be sold in order to meet these obligations when they come due. This may
cause a financial loss if the assets must be sold cheaply in order to get the money on
time. Life insurance can avert this situation, because the proceeds are available
almost immediately upon your death.
Finally, life insurance can be an investment vehicle. Some types of life insurance
policies may actually make money for you, as well as provide the benefits described
above. This can help you with long-term financial goals.
LIFE INSURANCE NEEDS AT VARIOUS LIFE STAGES

6
Your need for life insurance changes, as your life moves ahead. When you're young,
you typically have no need for life insurance, but this changes as you take on more
responsibility, and as your family grows. Then, as your responsibilities once again
begin to diminish, your need for life insurance drops off. Let's look at how your life
insurance needs change throughout your lifetime.
School days
Childhood is typically a time of no worries, no cares, and no responsibilities. A
child depends on others to take care of them, not the other way around. Although it
would be tragic, a child's death would likely have little financial impact on the
child's family. Thus, there is generally no need for life insurance at this point in an
individual's life.
A child's death does create one short-term financial problem: funeral expenses. But
buying a life insurance policy just for that purpose doesn't really make sense.
Alternatively, a burial policy provides enough money for funeral expenses, at a
much lower cost than a typical life insurance policy.
Your growing family
When you have young children, your life insurance needs reach a climax. In most
any situation, life insurance for both parents is appropriate.
Single-income families are completely dependent on the income of the breadwinner.
If he or she dies without life insurance, the consequences could be disastrous. The
death of the stay-at-home spouse would necessitate costly daycare expenses. If one
spouse dies, it is unlikely that the surviving spouse will be able to keep up with the
household expenses and pay for childcare with the remaining income.
Single again
Unfortunately, divorce has become a fact of life in our society. You'll have to make
many financial decisions during this stressful time, including the decision of what to
do about your life insurance. Divorce raises both beneficiary issues and coverage
issues. And if you have children, these issues become even more complex.
If you and your spouse have no children, it may be as simple as changing the
beneficiary on your policy and adjusting your coverage to reflect your newly single
status. The custodial and no custodial parent will need to work out the details of this

7
complicated situation. If you can't come to terms, the court may make the decisions
for you.
The golden years
Once your children are grown, your life insurance needs decrease. You'll live off
your retirement savings, and hopefully you have accumulated assets that can be
passed on to your heirs when you die. Not only is life insurance expensive at this
point, but also it's probably unnecessary.
One exception: if you will be leaving a large estate when you die, your heirs may be
stuck paying a hefty estate tax bill. Consider obtaining cash value life insurance
policy, because you don't actually know when you're going to die. Your heirs can
then use the death benefit to pay the IRS. If the policy is held by a trust, the
proceeds won't be included in your estate

INDIAN INSURANCE INDUSTRY: A PERSPECTIVE

A. Life Insurance
Life insurance in its existing form came in India from United Kingdom (UK) with the
establishment of a British firm, Oriental Life Insurance Company in 1818 followed by
Bombay Life Assurance Company in 1823, the Madras Equitable Life Insurance Society
in 1829 and Oriental Life Assurance Company in 1874. Prior to 1871, Indian lives were
treated as sub-standard and charged an extra premium of 15% to 20%. Bombay Mutual
Life Assurance Society, an Indian insurer that came into existence in 1871, was the first
to cover Indian lives at normal rates. The Indian Life Assurance Companies Act, 1912
was the first statutory measure to regulate life insurance business. Later, in 1928 the
Indian Insurance Companies Act was enacted, inter alia, to enable the government to
collect statistical information about life and non-life insurance business transacted in
India by Indian and foreign insurers, including the provident insurance societies.
In 1938, with a view to protecting the interest of insuring public, earlier legislation was
consolidated and amended by Insurance Act, 1938 with comprehensive provisions for
detailed and effective control over the activities of insurers. The actuarial and
operational matters relating to the insurance industry were looked after by an attached
office in Shimla, headed first by Actuary to the Government of India, then by
Superintendent of Insurance and finally by the Controller of Insurance. The act was

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 amended in 1950, making far-reaching changes such as requirement of equity capital for
companies, carrying on life insurance business, ceilings on shareholdings I such
companies, stricter control on investment of life insurance companies, submission of
periodical returns relating to investments and such other information to the Controller as
he may call for, appointments of administrators for mismanaged companies, ceilings on
expenses of management and agency commission, incorporation of the Insurance
Association of India and formation of councils and committees thereof.
On 19th January 1956 the management of life insurance business of 245 Indian and
foreign insurers and provident societies, then operating in India, was taken over by the
Central Government and then nationalized on 1st September 1956. An Act of Parliament,
viz. LIC Act, formed LIC in September 1956, with capital contribution of Rs. 5 crore
from the Government of India.
The then Finance Minister, Shri S.D.Deshmukh, while piloting the bill for
nationalization, outlined the objectives of LIC thus: to conduct the business with utmost
economy, in a spirit of trusteeship; to charge premium no higher than warranted by strict
actuarial considerations; to invest the funds for obtaining maximum yield for the policy
holders consistent with safety of the capital; to render prompt and efficient service to
policy-holders, thereby making insurance of recommendations of the Administrative
Reforms Commission as under:
a. To spread life insurance much more widely and in particular to the rural areas and to the
socially and economically backward classes
b. To making mobilization of people’s savings by making insurance linked savings
adequately attractive.
c. To bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust without losing sight of the interest of the community as a
whole
d. To conduct business with utmost economy and with the full realization that money
belongs to the policy- holders.
e. To act as trustees of the insured public in their individual and collective capacities.
B. General Insurance
General Insurance developed in India with industrial revolution in the West and
consequent growth of seafaring trade and commerce in the 17th century. It came to India

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from UK. The 1st general insurance company, Triton Insurance Company Ltd. was
established in Calcutta in 1850 whose shares were mainly headed by British. The 1st
general insurance company established by an Indian was Indian Mercantile Insurance
Company Ltd. in Bombay in 1907.
In 1957,the General Insurance Council, a wing of the Insurance Association of India
framed a code of conduct for ensuring fair conduct and sound business practices in the
general insurance industry. An administrative set-up headed by the Controller of
Insurance was set up at Delhi in 1957 with a branch office at Bombay, Calcutta, and
Madras for administrating code of conduct. Further in order to retain the business of
general insurance in India, the insurers started a reinsurance company, viz. India
Reinsurance Corporation Ltd. In 1956 to which they voluntarily ceded 10% of their
gross direct business. In 1961, by arrangement to Insurance Act, this voluntary
arrangement was formalized by notifying the Indian Guaranty and General Insurance
Company Ltd., a government company, along with the Indian Reinsurance Corporation
as ‘Indian Reinsures’. In 1968, the Insurance Act was amended to provide for extension
of social control over insurers transacting general insurance. The amendments provided,
inter alia for regulation of assets, setting up of the Tariff Advisory Committee (TAC)
under the chairmanship of Controller of Insurance. Before the amendments of the act
could be implemented, management of non-life insurers was taken over by the Central
Government in 1971 as a prelude to nationalization. The General Insurance Business
Act, 1972, nationalized general insurance business with effect from 1.1.73.
The purpose of establishment of GIC as a holding company of the four operating
companies as stated in General Insurance Business Act is superintending, controlling,
and carrying on the business of general insurance. (ref.bibliography)

LIFE INSURANCE INDUSTRY

Legislative issues
Based on developments over the last couple of years, it would be fair to say that the
long-term outlook for the policy regime for insurance appears positive. In many ways
the IRDA has exhibited transparency and protectiveness in attending to critical issues
this has not only provided a degree of comfort to existing and prospective insurers, but
has also laid the foundation for the orderly development of the insurance market in

10
India. The most obvious comparison one could make is with the banking sector
liberalization that took place a few years ago. Unlike the RBI, the IRDA has been
transparent, efficient and adequately cautions in its process of granting licenses. The
hectic lobbying and 'loophole exploitation' that firms indulged in have been thankfully
absent in the insurance business, thus far.
At a broader level, the government maintains its bullish outlook for insurance reforms,
reflected by its willingness to ensure a level playing field for private insurer vis-à-vis
LIC (e.g. similar tax treatment to all life insurers, similar paid up capital requirement
etc) and to minimize its intervention in operational and commercial issues. Private
players in other recently liberalized sectors (especially telecom and banking where
industry regulator and industry government disputes have severely constrained
development) could scarcely consider themselves as lucky.
Perhaps the only major issue is the cap on foreign investment, which the government is
not keen on increasing in the near future. For the longer term, it may reconsider its
stand, depending among other things, on the Indian partner's ability to continue
contributing financially and technically to the joint venture. (ref.bibliography)
Taxation policy for life insurance firms
After prolonged debate, the Finance Ministry had expressed its desire to accord similar
tax treatment to LIC and private insurers.
Co-operative Banks excluded from Insurance
Based on the strict requirements set out by the RBI for banks entry into insurance,
cooperative banks would be unable to apply for direct insurance at this stage. However,
the norms for participating in non-equity insurance activities (such as marketing and
distribution) are slightly easier and may allow some cooperative banks to enter.
The RBI requires banks to possess a net worth of Rs. 500 crores, a capital adequacy
ratio of 10, a ‘reasonable’ level of non-performing assets (NPAs), continuos net profit
for the last 3 years, and a 'satisfactory' track of subsidiaries. While capital adequacy
norms do not apply to cooperative banks, they are likely to fail on the grounds of net
worth and NPAs.
The Kerala State Cooperative Banks (KSCB) and the Maharashtra State Cooperative
Bank (MSCB) had earlier declared their interest in entering the insurance sector. Based

11
on RBI guidelines, however, they may have to limit their exposure to marketing and
distribution only.
Competitive developments existing insurers
Expectedly, private companies that have commenced operations have done so with a
'soft launch'. This is presumably in realization of the fact that long term resources are
better spent in consistent and well targeted promotional efforts rather than in 'big-bang'
exercise - especially for non - impulse purchase, long term financial products such as
life insurance. Treading new round carefully by patiently establishing one's credibility
and competence appears to be the preferred strategy over one that involves a head on
battle with LIC.
The other important observation based on industry developments, pertains to the role of
banks. With most banks resigning themselves to the fact that obtaining a license to sell
insurance will be difficult to come by (due to strict RBI norms), they have chosen to
participate in the industry through the banc assurance, route instead. In the Indian
context, this is significant. In the interiors of the country, public sector banks have built
up excellent penetration and enjoy the public's confidence-2 important prerequisites for
selling insurance. On the other hand, in the bigger cities, private banks, which are
constantly looking for ways to enhance customer value and profitability (e.g. through
cross selling), are likely to incorporate insurance in their portfolio of offerings.
(ref.bibliography)

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 2 Chapter
Profile and Organisation Structure

PROFILE OF THE ORGANISATION

A Brief History of Max New York Life

Overview
Max New York Life Insurance
Company Ltd. is a joint venture
between New York Life; a Fortune 100 company and Max India Limited; one of India's
leading multi-business corporations. The company has positioned itself on the quality
platform. In line with its vision to be the Most Admired Life Insurance Company in
India, it has developed a strong corporate governance model based on the core values of

13
excellence, honesty, knowledge, caring, integrity and teamwork. The strategy is to
establish itself as a Trusted Life Insurance Specialist through a quality approach to
business.
Incorporated in 2000, Max New York Life started commercial operation in 2001. In line
with its values of financial responsibility, Max New York Life has adopted prudent
financial practices to ensure safety of policyholder's funds. The Company's paid up is
Rs. 1,432 crore.
Having set a Best in Class Agency Distribution Model in place, the company is
spearheading a major thrust into additional distribution channels to further grow its
business. The company has multi-channel distribution that includes the agency
distribution, partnership distribution, bancassurance, distribution focused on emerging
markets and alliance marketing through employed sales force. The company currently
has 33 bancassurance relationships, 14 corporate agency tie-ups and direct sales force at
14 locations. Max New York Life has put in place a unique hub and spoke model of
distribution to deepen rural penetration. The company has 39 (9 hub office 30 spoke
offices) offices dedicated to emerging markets in Punjab and Haryana. Max New York
Life offers a suite of flexible products. It now has 35 products covering both life and
health insurance and 8 riders that can be customized to over 800 combinations enabling
customers to choose the policy that best fits their need. Besides this, the company offers
6 products and 4 riders in group insurance business.
Achievements and Awards Some of the Industry FirstsFirst company to provide
Freelook period of 15 days to the customer. This was later made mandatory by the
regulator First company to start toll free line for agent services First and the only life
insurance company in India to implement Lean methodology of service excellence in
service industry First life insurance company in India to provide various services to the
agents and customers over phone First Indian life insurance company to start service
center at the regional level First life insurance company in India to be awarded ISO
9001:2000 certification
Awards
Among the top 25 companies to work for in India, according to Businessworld 2003
‘Great Workplaces of India’

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Among the top five most respected insurance companies in India as per Businessworld
2004 & 2006 survey Won Indo-American Corporate Excellence Award for Best Indo-
US company in Financial Services Category in 2006
Received ‘Best Six Sigma Project’ award at Sakal Six Sigma Excellence Awards – 2006
Among top 3 in Asia Life Insurance Company of the Year Award 2007 instituted by
Asia Insurance Review Received the Amity Corporate Excellence Award – 2007
Received the ‘Outlook Money Award’ for being “among the best new insurers in the
country”.
Max India Ltd.

Founded in 1985, Max India Limited is a Public Limited company listed on the NSE and
BSE of India with over 26,000 shareholders. Today, Max India Limited is a multi-
business corporate, driven by the spirit of Enterprise, focused on Knowledge, People and
Service oriented businesses of:
Healthcare (Max Healthcare)
Life Insurance (Max New York Life Insurance)
Clinical Research (Neeman Medical International)
Max also Maintains Interests in:
Specialty Plastic Products for the packaging industry (Max Speciality Products)
Healthcare Staffing (Max Health Staff)

15
Prominent shareholders are Mr Analjit Singh and a leading private equity firm, Warburg
Pincus which accounts for 28.7% of the total shareholding. The balance shareholding is
held by the public and Institutional Investors.
Till 1999, The Company’s Main Interests and Partnerships were the following:
Business
Bulk Active Pharmaceuticals
Electronic Component Distribution
Mobile Telephony
V-SAT Communications
Plating Chemicals
Information Technology
Partners
DSM Gist Brocades
Motorola, USA
Avnet Inc., USA
Hutchison Telecom Ltd. Hong Kong
Comsat Investment Inc., USA & Lockheed Martin, USA
Atotech, Germany
Mind Crossing, USA
In 2000, the Company reinvented and restructured itself to focus on the businesses of
‘Life’ under the them, Life…Our Focus.
Max New York Life Insurance, founded as a Joint Venture between Max India Limited
and New York Life, a Fortune 100 company, is one of the leading private life insurers in
India.
Max Healthcare, a subsidiary of Max India Limited is India’s first provider of
comprehensive, standardized, seamless, and integrated world-class healthcare services.
Neeman Medical International (NMI) is an International Clinical Research provider
operating across three locations spanning North America, Asia and Latin America. Each
location is backed by comprehensive infrastructure and highly skilled and experienced
personnel.
New York Life

16
New York Life Insurance Company,(www.newyorklife.com) a Fortune 100 company
founded in 1845, is the largest mutual life insurance company in the United States and
one of the largest life insurers in the world. Headquartered in New York City, New York
Life’s family of companies offer life insurance, annuities and long-term care insurance.
New York Life Investment Management LLC provides institutional asset management
and retirement plan services. Other New York Life affiliates provide an array of
securities products and services, as well as institutional and retail mutual funds.
The mission of New York Life is to maintain its superior 'financial strength', adhere to
the highest standards of 'integrity' and demonstrate 'humanity' by treating its customers,
agents and employees with compassion, consideration and respect.
New York Life is one of the largest and strongest life insurance companies in the world
with more than USD$215 billion assets under management and has received among the
highest ratings for financial strength from the life insurance industry's principal rating
agencies: A.M. Best (AA+), Standard & Poor's (AA+), Moody's (Aa1), Fitch (AAA).
According to Moody's, "New York Life's rating reflects the company's good quality
investment portfolio, ample liquidity, and sound capitalization, as well as the good
growth potential of its international business.”
As a leader in the insurance industry, New York Life continues to bring to its operations
new management concepts, advanced technologies, new distribution and training
systems and innovative insurance products.
MAX INDIA LIMITED
Max New York Life Insurance Company is a partnership between Max India Limited,
and New York Life, a fortune 100 company. MNYL is a 74:26 partnership between Max
India and New York Life Insurance Co.

17
New York Life 26% MAX India 74%

Max India Limited is a multi-business corporate, driven by the spirit of Enterprise

focused on Knowledge, People and Service oriented businesses of Healthcare and Life
Insurance. Max also maintains interests in Clinical Research, Specialty Plastic Products
businesses and Telecom services.
Founded in 1985, Max India Limited is a Public Limited company listed on the NSE and
BSE of India with over 26,000 shareholders. Today, Max India Limited is a multi-
business corporate, driven by the spirit of Enterprise, focused on Knowledge, People and
Service oriented businesses of:
• Healthcare (Max Healthcare)
• Life Insurance (Max New York Life Insurance)
• Clinical Research (Neeman Medical International)
Max also maintains interests in:
• Specialty Plastic Products for the packaging industry (Max Specialty Products)
• Healthcare Staffing (Max Health Staff)
• Prominent shareholders are Mr. Analjit Singh and a leading private equity firm,
Warburg Pincus which accounts for 28.7% of the total shareholding. The balance
shareholding is held by the public and Institutional Investors.
Till 1999, the company’s main interests and partnerships were the following:
Business

18
 • Bulk Active Pharmaceuticals
• Electronic Component Distribution
• Mobile Telephony
• V-SAT Communications
• Plating Chemicals
• Information Technology
Partners
• DSM Gist Brocades
• Motorola, USA
• Avnet Inc., USA
• Hutchison Telecom Ltd. Hong Kong
• Comsat Investment Inc., USA & Lockheed Martin, USA
• Atotech, Germany
• Mind Crossing, USA
In 2000, the Company reinvented and restructured itself to focus on the businesses of
‘Life’ under the them, Life…Our Focus.
New York Life
New York Life Insurance Company a Fortune 100 company founded in 1845 is the
largest mutual life insurance company in the United States and one of the largest life
insurers in the world. Headquartered in New York City, New York Life’s family of
companies offer life insurance, annuities and long-term care insurance. New York Life
Investment Management LLC provides institutional asset management and retirement
plan services. Other New York Life affiliates provide an array of securities products and
services, as well as institutional and retail mutual funds. .
New York Life is one of the largest and strongest life insurance companies in the world
with more than USD$215 billion assets under management and has received among the
highest ratings for financial strength from the life insurance industry's principal rating
agencies: A.M. Best (AA+), Standard & Poor's (AA+), Moody's (Aa1), Fitch (AAA).
According to Moody's, "New York Life's rating reflects the company's good quality
investment portfolio, ample liquidity, and sound capitalization, as well as the good
growth potential of its international business.”

19
As a leader in the insurance industry, New York Life continues to bring to its operations
new management concepts, advanced technologies, new distribution and training
systems and innovative insurance products.

MAX NEW YOR LIFE INSURANCE

Max New York Life Insurance Company Ltd. is a joint venture between New York Life,
a Fortune 100 company and Max India Limited, one of India's leading multi-business
corporations. The company has positioned itself on the quality platform. In line with its
vision to be the most admired life insurance company in India, it has developed a strong
corporate governance model based on the core values of excellence, honesty,
knowledge, caring, integrity and teamwork. The strategy is to establish itself as a trusted
life insurance specialist through a quality approach to business.
Incorporated in 2000, Max New York Life started commercial operation in 2001. In line
with its values of financial responsibility, Max New York Life has adopted prudent
financial practices to ensure safety of policyholder's funds. The Company's paid up is
Rs. 1032 crore.
Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further grow its
business. The company currently has 33 banc assurance relationships, 14 corporate
agency tie-ups and direct sales force at 14 locations. Max New York Life has put in
place a unique hub and spoke model of distribution to deepen rural penetration. The
company has 39 (9 hub office 30 spoke offices) offices dedicated to emerging markets
in Punjab and Haryana. Max New York Life offers a suite of flexible products. It now
has 38 products covering both life and health insurance and 8 riders that can be
20
customized to over 800 combinations enabling customers to choose the policy that best
fits their need. Besides this, the company offers 6 products and 4 riders in group
insurance business.
The company currently has more than 7500 employees.
Graphical re-presentation of sales preformance for last 5 years

Vision
To become the most admired life Insurance Company in India.
Mission
To become one of the top quartile life Insurance companies in India.
Be a national player.
Be the brand of the first Choice.
Be the Employer of the Choice.
Become principal of choice for agents.
Values
This vision to become India's most admired life insurance company will be
realized through our unique set of values, which are as follows:
1. Knowledge

21
 Knowledge leads to expertise; and our expertise is in helping people protect
themselves. Perfectly combining global expertise with local knowledge, we are
India’s Life Insurance specialist. Max New York Life believes that for
knowledge to be of significance it must be focused, up to date and shared.

2. Honesty
Honesty is the core of all life insurance business. Transparency, integrity and
dependability form the cornerstones of Max New York Life experience. The
company ensures that everyone who represents the brand carries a promise: we
care — in word as well as in actions.
3. Excellence
Excellence at Max New York Life implies the ability to perform consistently at
the highest level. Focused on the value of continuous improvement in people,
processes and the organization, the company strives for maximum standards of
quality in every aspect of its business.

Specialist in the business since 1845. Over US $225 billion assets under Management
and over US $12 billion in surplus and reserves (2006). Ranks#2 on Fortunes Global
List of “Most admired Life Insurance Companies” (2006). Has never failed to deliver to
its policyholders in spite of world wars, famine, drought and 9/11.
• India and China are among New York Life top two priority International
markets.
• It has 25% market share of NRI life insurance market in the US.
• The company has been ranked 78th in Fortune 500 list beating big names like
Mc Donald’s , Coco Cola, Xerox and Cisco System.
In line with its values of financial responsibility, Max New York Life has adopted
prudent financial practices to ensure safety of policyholder’s funds. The company’s
paid up capital is Rs.657 crore, which is more than the norm laid down by IRDA.
Max New York Life invests significantly in its training programme and each agent is
trained for 152 hours as opposed to its mandatory 100hours stipulated by the IRDA
before beginning to sell in the marketplace. Training is a continuous process for
agents at Max New York Life and ensures development of skills and knowledge
22
 through a structured programme spread over 500 hours in two years .This focus on
continuous quality training has resulted in the company having amongst the highest
agent pass rate in IRDA examination and the agents have the highest productivity
among private life insurers..
201 agent advisors have qualified for the Million Dollar Round Table (MDRT)
membership in 2005. MDRT is an exclusive congregation of the worlds top selling
insurance agents and is internationally recognized as the standard of excellence in the
life insurance business. Having set a best in class agency distribution channels to further
grow its business. The company is using a five-pronged strategy to pursue alternative
channels of distribution. These include the franchisee model, rural business direct sales
force involving group insurance and telemarketing opportunistic, bank assurance and
corporate alliances.
Max New York Life offers a suite of flexible products. It now has 26 life insurance
products and 8 riders that can be customized to over 400 combinations enabling
customers to choose the policy that best their need.
Max New York Life- Growing Presence
Number of cities – 180
Number of offices – 200+
Number of Agents – 25,000+
Number of Policies – 15, 00,000+

MAJOR MILESTONES ACHIEVED BY MAX NEWYORK LIFE INSURANCE

• First life insurance Company in India to have IS0 9001:2000 certifications.
• Top five most respected private life insurance in India according to Business
World survey.
• Continuous presence in Top 50 MDRT global list.
• First company to provide free look period of 15 days to the customer. This was
later made mandatory by the regulator
• First company to start toll free line for agent services
• First life insurance company in India to provide various services to the agents
and customers over phone

23
 • First Indian life insurance company to start service center at the regional level

Some of the industry firsts

• First company to provide free look period of 15 days to the customer. This was
later made mandatory by the regulator
• First company to start toll free line for agent services
• First and the only life insurance company in India to implement Lean
methodology of service excellence in service industry
• First life insurance company in India to be awarded ISO 9001:2000 certification

Awards
• Among the top 25 companies to work for in India, according to Business world
2003 ‘Great Workplaces of India’
• Among the top five most respected insurance companies in India as per Business
world 2004 & 2006 survey
• Won Indo-American Corporate Excellence Award for Best Indo-US company in
Financial Services Category in 2006
• Received ‘Best Six Sigma Project’ award at Sakal Six Sigma Excellence Awards
– 2006
• Among top 3 in Asia Life Insurance Company of the Year Award 2007 instituted
by Asia Insurance Review
• Received the Amity Corporate Excellence Award – 2007
• Received the ‘Outlook Money Award’ for being “among the best new insurers in
the country”.
CSR
Max New York Life has been instrumental in changing the paradigm of life insurance in
India. It is the first life insurance company in India to introduce cause related marketing.
Children are at the very heart of Max New York Life's strategy. SOS Children's Villages
of India is internationally recognized for its work in giving underprivileged children a
wholesome life. The mission of SOS is "to help orphaned and abandoned children, by
providing them with a family, a permanent home, education and strong foundation for

24
an independent life." It's mission ties in with Max New York Life's philosophy of
helping people secure the future of their near and dear ones.
The company donates a part of the total money collected on all policies sold, to SOS
Children's Villages of India at the end of the year.

Chapter 3
PROBLEMS AND COMPETATION OF
THE ORGANISATION

25
 PROBLEMS OF THE ORGANISATION

The problem is to find The Need of Insurance for the Corporate and the Merchant Sector
All organizations face changes in their environment with resultant changes in their
markets and in this ability to satisfy their markets. Each organization is faced with new
marketing problems and opportunities in their existing and potential market.

26
 COMPETITION INFORMATION

Life Insurance
 HDFC Standard Life Insurance Company Ltd.
 Max New York Life Insurance Co. Ltd.
 ICICI Prudential Life Insurance Co. Ltd.
 Om Kotak Mahindra Life Insurance Co. Ltd.
 Birla Sun Life Insurance Co. Ltd.
 Tata Aig Life Insurance Co. Ltd.
 SBI Life Insurance Co. Ltd.
 ING Vysya Life Insurance Co. Pvt. Ltd.
 Allianz Bajaj Life Insurance Co. Ltd.
 Metlife India Insurance Co. Pvt. Ltd.
 Aviva Life Insurance Company Ltd.

27
 Chapter 4

S.W.O.T ANALYSIS

28
 S.W.O.T ANALYSIS OF THE ORGANISATION

Business firms undertake SWOT analysis to understand the external and internal
environment. SWOT, which is the acronym for Strength, Weakness, Opportunities and
Threats, is also known as S.W.O.T Analysis. Through such an analysis strength and
weakness existing within an organization can be matched with the opportunities and
threats operating the environment so that an effective strategy can be formulated. An
effective organization strategy, therefore, is one that is capitalized on the opportunities
and through the use of strengths and neutralizes the threats maximizing the impact of
weakness.

STRENGTH:
⇒ Brand power.
⇒ Strong assets and infrastructure.
⇒ Market share of 22.5%.

WEAKNESS:
⇒ Industry in nascent stage.
⇒ Awareness about private life insurance companies is very less.
⇒ Still not very popular in rural market.
⇒ Very few branches in the country.
⇒ Lack of operational activities.

OPPORTUNITY:
⇒ Liberalization of Indian economy.
⇒ Life Insurance sector opening up.
⇒ Global market opportunity.

THREAT:
⇒ Lack of proper technical knowledge among the mass.
⇒ Apprehension towards HDFC Prudential being a private life insurance
company.

29
⇒ RLI very big player.

Chapter 5
OBJECTIVES OF STUDY

30
 OBJECTIVES

• To provide the company with information of customer's Insurance policy if they

have any and reasons for opting for that particular policies.
• To know the most preferred policy.
• To determine customers perception towards private insurance companies and
their expectation form private insurance companies.
• To determine the feedback on services provided by any other insurance agent.
• To know the impact of privatization of insurance sector on public.
• To understand the customers buying behavior of insurance products with a focus
on market segmentation.

SCOPE OF STUDY

The initial step was to understand the process of how to go about the project itself. The
aim was to understand better vision, mission objectives & culture of the organization. So
as to ensure that the work done is in the consonance with the main goal of the company.
In this regard various magazines, journals and newspapers were gone through. Various
Internet sites were also looked upon which provide me with valuable input into the
Insurance Sector.

31
 Chapter 6
METHODOLOGY ADOPTED

32
 METHODOLOGY

The research is both explanatory as well as descriptive in nature. The source of

information is both primary and secondary. A well-structured questionnaire was
prepared and personal interviews were conducted to collect the customer’s perception
and buying behavior, through this questionnaire.

SAMPLING
• Sampling method followed was judgmental sampling. The customer was selected on
a random basis from different parts of Delhi.
• The population comprised of mainly people from different parts of Delhi.
• Data collection method-survey method was employed.
• Data collection instruments- structured questionnaire was prepared.

RESEARCH BRIEF
The first stage involved initial discussion between the various team members and the
company in order to identify the research objectives (Rationale of the research), which is
the most difficult step in the research process.

RESEARCH DESIGN:
The research is primarily both exploratory as well as descriptive in nature. The sources
of information are both primary & secondary.
A well-structured questionnaire was prepared and personal interviews were conducted to
collect the customer’s perception and buying behavior, thru this questionnaire.

DATA COLLECTION METHOD:

a. Preparation of Questionnaire:

33
Initially, a rough draft was prepared keeping in mind the objective of the research. A
pilot study was done in order to know the accuracy of the Questionnaire. The final
Questionnaire was arrived only after certain important changes were done.

b. Sampling Method:
Sampling method followed was judgmental sampling. The customer was selected on a
random basis from different parts of Delhi.
c. Sample size: -
The sample size was restricted to only 100, which comprised of mainly peoples from
different regions of Delhi due to time constraints.

34
 Chapter 7
INTERPRETATION OF RESULT

35
 INTERPRETATION OF RESULT

PRODUCT OF MAX NEW YORK LIFE INSURANCE

Products & Services

Protection Plans
Life is full of surprises. Unexpected events that strike without warning can disrupt the
smooth rhythm of life. You must be prepared at all times. As the primary earning
member, you need to make sure that your family is never lacking in anything even if
you are taken away from them forever. Do your best today to ensure that your family
can always enjoy a comfortable lifestyle. In double income families, both spouses
should get adequate life covers especially if there are dependent children involved.
We have plans that guarantee maximum protection at a low cost.

Children Plans
Your parenting is perfect but is your planning adequate? Are you thinking beyond the
immediate to the future, about higher education and professional courses, in India and
36
abroad? Many children are keen to pursue unconventional careers. Are you in tune
with their aspirations and passions? As parents you would never let money come in
the way of your children and the fulfillment of their true potential. Our plans will help
build the corpus that allows your children to dream big and soar high.
Children's Endowment to 18 (Par) Children's Endowment to 24 (Par)
SMART Steps™ SMART Steps™ Plus
SMART Steps™ Single Premium
Investment Plans
Building a nest egg is about aggregating surplus amounts regularly to allow them to
grow into a sizeable sum. Investments should be aligned to specific, long-term goals.
Luxury car, foreign holiday or dream house, create your own wish list and make it
come true. Your dreams are in your hands. Every move that you make today will
bring you a step closer to your goals. Our Investment Plans offer the dual benefit of
protection and market-linked returns with the flexibility to choose the premium and
determine the market exposure.
Life Maker™ Premium Life Maker™ Gold
Life Maker™ Platinum Life Invest™
SMART Assure
Retirement Plans
Let your golden years be the most precious of your life, full of freedom and choice. A
time to pursue your hobbies, travel and enjoy the good life. You will never miss your
salary cheque or be constrained by rising inflation. Even as you work hard to make a
better today, it is up to you to create a superior tomorrow. If you want to sustain your
current lifestyle even after you stop working, make that money work for you. Our
Retirement Plans will keep you comfortable and content, and let you live the life you
deserve.
Easy Life™ Retirement (Par) SMART Invest™ Pension
Health Plans
Do you know the cost of healthcare has climbed faster than inflation? Medical costs
can be a big drain on finances. A medical crisis can strike anyone, anytime and may
even force an individual to dip into savings to meet these sudden and steep costs.
Such an eventuality could delay or destroy a cherished financial goal. No wonder,

37
health is wealth. The health of every member of the family is precious and you need
to safeguard it as a priority. Use our Health Plans to make sure your family stays fit
and fine.
LifeLine MediCash™ LifeLine Wellness™ Plus
LifeLine MediCash™ Plus LifeLine Safety Net™
LifeLine Wellness™
Savings Plans
Is your money working for you? Clearly not, if it is lying idle in multiple bank
accounts. We will instill the discipline of investment through force of habit as you
park your money for protection and growth to meet your needs over your lifetime.
Choose a plan that matches your needs and budget. Our dual benefit saving plans
recognize your need for all round financial protection, and include a life cover that
will protect you till the last day.
Whole Life Participating Life Gain™ Plus 25 (Par)
20 year Endowment (Par) Life Pay™ Money Back
Endowment to Age 60 (Par) Life Gain™ Endowment
Life Gain™ Plus 20 (Par) Life Partner™
Rural Plans
We are conscious of our social responsibility to serve the financially vulnerable
sections of society. We have created specialized Rural Plans to meet the particular
needs of customers in rural areas. The ticket size has been kept low, the premiums are
affordable and the procedures are simple. Customers in rural areas can now find a
plan to meet their unique requirements.
Easy Term Policy
Strategic Products Plans
Most people desire a carefree life. They want to be happy and comfortable at all
times. But needs keep evolving and you must always be one step ahead. Our Strategic
Products Plans will meet your special needs and are available through additional
distribution channels. You can choose a plan to meet the planned events and
unforeseen incidents in your life.
Bancassurance Additional Distribution
Capital Builder Max Mangal™

38
Capital Builder
Max Vriksha™
Max Amsure
Future Builder Business Builder
Bonus Builder Secure Returns Builder
At Max New York Life Insurance, life insurance plans are created keeping in mind
the changing needs of you and your family. Our life insurance plans are designed to
provide you with flexible options that meet both protection and savings needs.
We offer our customers a full range of transparent, flexible and value for money
products that include whole life (LifeLong), endowment (LifeSaver, EasyLife Plus),
child policy (Young Achiever) single premium (LifeBond, LifeBond Plus), Pension
(PensionPlus), Term (LifeShield), fixed term protection plan (Freedom LifePlan) and
a 5 year recurring premium investment cum protection plan (LifeBond5). Max New
York Life Insurance products are modern and contemporary unitised products that
offer unique customer benefits like flexibility to choose cover levels, indexation and
partial withdrawals.
Secure Fund: The investment objective of this fund is to provide progressive return on
your investment with a minimum guarantee on maturity. The fund comprises of debt
securities in the range of 50-100%, equities in the range of 0-20% and money market
and cash in the range of 0-20%. Initially the equity exposure will be 10 %.
Growth Fund: The investment objective of this fund is to provide high capital growth
by investing higher element of assets in the equity market. The fund will comprise of
debt securities in the range of 0-50%, equities in the range of 0-85% and money
market and cash in the range of 0-20%. Initially the equity exposure will be 75%.
Balanced Fund: The investment objective of this fund is to provide capital growth by
availing opportunities in debt and equity markets and providing a good balance
between risk and return. The fund comprises of debt securities in the range of 50-
90%, equities in the range of 0-45% and money market and cash in the range of 0-
10%.

Individual

39
At Max New York Life Insurance we are dedicated to helping you make the most out
of your life, and that includes all your savings and protection requirements. We're
here when you need to make informed financial decisions - for you, and for your
loved ones.
We offer products under the following three categories for individuals-
Unit value (Rs/unit) as on 1/8/2008

Product Name Product Type Bid Offer

Unit Linked 31.4 33.053
Life Saver
Unitised with profit 12.697 13.365
Unit Linked 31.4 31.4
LifeBond
Unitised with profit 12.697 12.697
Unit Linked 31.4 33.053
EasyLifePlus
Unitised with profit 12.697 13.365
Unit Linked 31.4 33.053
Young Achiever
Unitised with profit 12.697 13.365
Unit Linked 13.27 13.968
Treasure Plus
Unitised with profit
Unit Linked 13.27 13.27
Life Bond 5 Secure
Unitised with profit
Life Bond 5 Unit Linked 28.374 28.374
Growth Unitised with profit
Unit Linked 13.27 13.968
SaveGuard Secure
Unitised with profit
SaveGuard Unit Linked 31.4 33.053
Balanced Unitised with profit
Pension Plus - Unit Linked 16.089 16.936
Growth Unitised with profit
Pension Plus - Unit Linked 12.105 12.742
Secure Unitised with profit
Freedom LifePlan - Unit Linked 31.4 32.041

40
Balance Unitised with profit
Freedom LifePlan - Unit Linked 13.27 13.541
Secure Unitised with profit
Unit Linked 31.4 33.053
LifeLong
Unitised with profit 12.697 13.365
Unit Linked 23.555 24.795
Pension Plus
Unitised with profit 12.355 13.005
Life Bond 5 Unit Linked 31.4 31.4
Balanced Unitised with profit
SaveGuard Unit Linked 28.374 29.867
Growth Unitised with profit
Freedom LifePlan - Unit Linked 28.374 28.953
Growth Unitised with profit

Unit value (Rs/unit) as on 1/8/2008

NAVs
Product Name
Balance Growth Secure Protector UWP
LifeLong 30.976 27.849 N/A 10.777 12.559
LifeSaver 30.976 27.849 N/A 10.777 12.559
LifeBond 30.976 27.849 N/A 10.777 12.559
EasyLife Plus 30.976 27.849 N/A 10.777 12.559
Pension Plus 23.252 15.823 11.910 N/A 12.222
Young Achiever 30.976 27.849 N/A 10.777 12.559
Treasure Plus 30.976 27.849 13.058 10.777 12.559
LifeBond 5 30.976 27.849 13.058 10.777 12.559
Save Guard 30.976 27.849 13.058 10.777 12.559
Freedom Life Plan 30.976 27.849 13.058 10.777 12.559

16 Dec 2003

41
'Unit-linked Plans are the Future'
Stuart Purdy, Managing Director, Max New York Life Insurance India
Narayan Krishnamurthy and Udayan Ray
Ever since the insurance sector was opened up, private players have been trying to
entice the Indian customer with new and innovative policies. But is the customer
ready for innovations--such as unit-linked plans? These plans are popular in
developed and other developing markets, but India has so far had only one such
product from LIC.Stuart Purdy, managing director, Max New York Life Insurance
India, told Narayan Krishnamurthy and Udayan Ray that most of Max New York Life
Insurance’s offerings here are unit-linked and he is betting on these products being
successful.
You have been operating here for a year now and your company’s portfolio is tilted
towards unit-linked products. How successful have these products been?
Are Indian consumers educated enough to understand the nuances of such a product?.
What do unit-linked products actually offer in terms of value-addition?
When you are looking at a long-term plan, there are always factors that will change
from time to time to meet any challenges.
While all these options do come with caps to follow the regulatory framework, they
definitely offer value-addition to the customer. And, with the NAV (net asset value)
of the fund calculated at the end of the day, the customer knows the value of his
funds. I must add that that in case of death, the beneficiary gets the sum assured or the
NAV of the fund, whichever is higher. So, there is no reduction in protection in these
plans.
Although insurance is specific to the individual, most companies offer uniform
In order to cater to customers with very low risk appetite we also offer a Unitised,
with-profit plan across our products, where the bonus rate is declared in advance for
the year. This is a conservative approach, but it has its takers. With this option, at the
end of the policy the policyholder gets a share of the bonus that the company earns. In
this case, there is an assured return that is benchmarked to the current bond rates (5
per cent last year).
What has been the performance of unit-linked plans in other emerging markets?

42
In a country like Poland, where the markets were opened a little over a decade ago,
we are today the largest private insurance company. The demand for our unit-linked
products is high. Worldwide, the growth of these products is high when compared to
traditional products, an indication of where the market is headed.
With investment options regulated, one has to be prudent with the money that is
contributed for the product and has to add value for the business to be successful. I
feel that both developed and developing markets understand the great value
proposition that unit-linked insurance plans offer. Another factor that tilts the balance
in favour of such products is the tax treatment that the accumulated account attracts.
It’s tax-free, unlike a mutual fund or any other investment, where the gains are taxed.
Max New York Life Insurance achieves one lakh policy figure
Our Banking Bureau
17 June 2004
Mumbai: Max New York Life Insurance today achieved the landmark figure of
selling one-lakh policies within the first two years of operation. The total number of
lives covered, including all group policies is over 188,000.
Speaking on the occasion, Stuart Purdy, managing director, Max New York Life
Insurance said, "The figures are an endorsement of our key initiatives that have been
taken by us in the last two years. It is a result of the tremendous effort that has been
put by every member of the Max New York Life Insurance team. The one lakh figure
has given us impetus to further build on our commitment to deliver world class
products and service to the customer."
Max New York Life Insurance has been able to rapidly establish its presence in the
Indian market by adopting a unique approach in terms of sales, distribution,
marketing and product strategy. Some of the key initiatives include pioneering
Bancassurance in the Indian market, which has contributed towards 70 per cent of the
Max New York Life Insurance business.
With an additional infusion of Rs 88 crore in January 2004, Max New York Life
Insurance now has a total capital infusion of Rs 242.8 crore. In a survey administered
last year by Grow Talent Company Ltd. along with Great Places to Work® Institute,
Inc. and Business World magazine, Max New York Life Insurance was ranked

43
eleventh of the best places to work in India. The survey was conducted amongst more
than 120 companies in India.
In a short span of time Max New York Life Insurance has been able to extend its
presence to 25 branches and over 100 locations including Banc assurance
sites, covering the full geographical spread of the country. Max New York Life
Insurance has also opened four rural branches in Faridkot, Udaipur, Nasik and
Nagpur. These branches will cater specifically to the rural populace of the districts
around these locations. Max New York Life Insurance has a strong sales force of over
2000 financial planning advisers.
Max New York Life Insurance offers one of the most flexible products that are
available in the market today. Products offered by Max New York Life Insurance are
LifeLong (whole life), PensionPlus (regular savings personal pension plan), LifeBond
(single premium savings plan), EasyLifePlus (simple endowment savings plan),
LifeSaver (flexible endowment savings plan), YoungAchiever (child policy),
LifeShield (pure term insurance), LifeBond5 (5 year recurring premium investment
plan) and rural products like Amar Suraksha, Anmol Suraksha and Jana Suraksha.
http://www.domain-b.com/finance/insurance/Max New York Life
Insurance_life_insurance/20040617_achieves.html
http://203.200.89.96/scripts/IIH021C1.asp?
sectionid=11&categoryid=121&articleid=4663&NoCache=3%2F27%2F2007+2%3A
10%3A25+AM
What does your ULIP portfolio reveal?
June 24, 2006 15:16 IST
The popularity of unit linked insurance plans (ULIPs) has increased considerably over
the past few years. Not surprisingly, this has coincided with the attractive returns
posted by the stock markets over this period.
ULIPs, being market-linked, mirror to a large extent, the gains/losses of the stock
markets. That is why it's important for investors to evaluate a ULIP portfolio
objectively before considering investing in it.
Nevertheless, in our view, such a study will help individuals select ULIPs that suit
their profile and needs better.

44
For our evaluation, we have considered the Aggressive ULIP plans from four life
insurance companies whose portfolios were available to us (as on March 31, 2006).
We would have liked to include more insurers, but lack of data and inconsistency in
presentation of data forced our hand on that front.
ULIP snapshot
HDFC ICICI Pru Kotak Max New York Life
Growth Maximiser Guaranteed Insurance Growth
(Unit Linked (Regular) Growth (Safe (LifeSaver)
endowment Invest.
& Child Plan/ Flexi
plan) Plan)
Upper limit for equity 100 100 80 85
investments (%)
Percentage of assets in 100.26 94.76 62.22 80.81
equity
(most aggressive
option)** (%)
Benchmark BSE 100 BSE 100 S&P CNX NA*
Nifty
Performance of 66.62 66.62 64.56 -
Benchmark (%)**
1-year NAV 86.72 68.15 49.20 61.07
Appreciation (%)**
Fund Management 0.80 1.50 1.50 1.00
Charges-FMC (%)
Administration charges Rs 180 pa Rs 720 pa 2%-7% of Rs 779 pa
premium***
Minimum Premium 10,000 18,000 10,000 3,500
(Rs)
Minimum Additional 5,000 5,000 10,000 10,000
Premium (Rs)
Buy-Sell Spread (%) - - 0.58 5.00

45
* Not Available; ** As on March 31, 2006; *** Please refer to the article for
further details. For the purpose of our study, we have considered the most
aggressive plans with the regular premium option from the said insurers. In
case of HDFC, the most aggressive ULIP 'Growth' option is compulsorily
invested in 100% equities. For other Aggressive ULIPs, the investment mandate
is flexible.
For the purpose of our study, we have considered the most aggressive plans with the
regular premium option from the said insurers. In case of HDFC, the most aggressive
ULIP 'Growth' option is compulsorily invested in 100% equities. For other
Aggressive ULIPs, the investment mandate is flexible. 1. Allocation to Equities The
allocation to equities differs across the four companies under study. True to its
investment mandate, HDFC Standard Life (HDFCSL) had invested 100.0% of its
corpus in equities. Kotak Life Insurance (KLI) had invested 62.2% of its corpus in
equities against a mandate to invest upto 80.0% of its assets in equities.
The other two companies, ICICI PruLife and Max New York Life Insurance, have
adhered to the limits set out for them with 94.8% (mandated to invest upto100% in
equities) and 80.8% (mandated to invest up to 85%), respectively.
In terms of market capitalisations, we have observed that the ULIPs under review
invest predominantly in large cap companies. However, Max New York Life
Insurance is an exception; it invests liberally in mid caps. This can be gauged from
the fact that close to half of its equity portfolio (i.e. approximately 42%) is invested in
midcap companies.
Opt for a plan that suits your risk profile and expectation of return over the life of the
policy.
Top 10 Stocks
At Personalfn, we have always maintained that a diversified stock portfolio should
hold no more than 40.0% of its assets in the top ten stocks. This helps the portfolio
counter turbulence in stock markets more effectively. Concentrated stock portfolios
can be sitting ducks during stock market volatility and their wayward performance
can be very upsetting for investors.

46
With respect to holdings in the top 10 stocks, HDFCSL is well diversified. It holds
42.7% of its assets in its top 10 stocks. However, in terms of number of stocks held, it
remains the most concentrated with a total of 34 stocks in its portfolio.
ICICI PruLife had the most concentrated portfolio with 50.4% in its top 10 stocks.
The total number of stocks it held (51 stocks) was the highest in its peer group.
KLI comes across as the most diversified ULIP portfolio with only 25.7% of its total
holdings in the top 10 stocks. Likewise, Max New York Life Insurance with an
allocation of 28.0% is well diversified. Given that KLI and Max New York Life
Insurance have an equity cap in the 80%-85% range, their top 10 stock holdings are
very well diversified.
Sectoral Allocation
In terms of sectoral allocation, ICICI PruLife emerges as the most concentrated one
with 65.0% of its assets in the top 5 sectors. So too is the case with HDFCSL which
holds 64.2% of its assets in 5 sectors.
Both Max New York Life Insurance and KLI fare better as compared to HDFCSL and
ICICI PruLife with 41.6% and 30.6% of assets in the top 5 sectors respectively.
Again, this comparison has to be seen in light of the lower equity allocation for both
these insurers.
Like with stock allocations, we believe that sectoral concentration can expose a
portfolio to above-average volatility. While such a strategy can help the ULIP clock
attractive returns during a market rally, it is likely to expose investors to higher
volatility when the markets witness a downturn.
With respect to the concentration in the portfolios, insurance seekers need to
appreciate that insurance companies invest monies from a very long-term perspective.

Fund Management Charges (FMC)

Charges play an important role while calculating the returns on a portfolio - higher the
charges, lower is the value of the investments. Over the long term (over 15 years),
charges have the potential to significantly impact the returns generated by the ULIP
portfolio.
HDFCSL with an FMC of 0.80% surfaces as the most cost effective ULIP. ICICI
PruLife (FMC 1.50%) fails to redeem itself on this front. KLI (FMC 1.50%) and Max

47
New York Life Insurance (FMC 1.00%) with additional expenses in the form of a
buy-sell spread fare poorly compared to the others alongside it. Simply put, the buy-
sell spread is the difference between the buying price and the selling price at which
the life insurance company buys and sells its units.
For KLI, the administration charges are levied as a percentage of the annual premium-
for the first year, the charges are 7% for premium upto Rs 20,000 pa and 3% for that
portion of premium exceeding Rs 20,000 pa. Second year onwards, these charges
drop to 4% (for premium upto Rs 20,000 pa) and 2% (for premium exceeding Rs
20,000 pa). KLI too fails to impress on this parameter.
Policy Returns
HDFCSL with a return of 86.7% for FY06 (financial year ending March 2006),
towers head and shoulders over the competition. It has also managed to outperform its
benchmark, the BSE 100 (up 66.2%), by a wide margin. Such a performance is not
surprising given that the policy invests its entire corpus in equities vis-à-vis peers.
ICICI PruLife too fared well on this front with 68.2% returns over FY06, although it
just about managed to outperform its benchmark, (BSE 100).
Kotak with 49.2% returns over the said period fared poorly as compared to its peers
as well as its benchmark, the S&P CNX Nifty (up 64.6%). One reason for the under-
performance could be the 'controlled' equity exposure (62.2% as on March 31, 2006)
as compared to its mandate (up to 80%).
Max New York Life Insurance (61.1%) managed to post reasonable returns vis-à-vis
peers. Despite our best efforts, we failed to solicit information about the policy's
benchmark from the insurance company.
Our evaluation of ULIP portfolios throws up some interesting learnings:
1. The quality of data and its presentation need to improve significantly, if
investors, both existing and potential, are to be able to study portfolios and make
intelligent decisions.
2. ULIP portfolios need to be disclosed regularly. The reason you are seeing only
four ULIP portfolios is because others either don't disclose it or disclose it only
'selectively'.
Mainly for Protection
Mainly for Savings

48
 • Max New York Life Insurance – Life Saver
• Endorsement request form
• Reinstatement request forms
• Life Long, Life Saver or Young Achiever
• Pension Plus, EasyLife Plus, Treasure Plus, SaveGuard or Life Bond5
Mainly for Protection
We offer the following policies to take care of your protection needs-
Max New York Life Insurance – Life Saver
Policy details:
This plan is a unitized fixed term, protection cum savings plan designed to meet long-
term savings needs such as education and wedding costs, of the insured’s family in
case of his unfortunate death before the policy matures.
Eligibility:
Minimum age: 18
Maximum age: 65 years not exceeding 70 years of age at maturity.
The maximum entry age with rider cover is 55 years.
Policy Charges:
All policy charges are in the form of unit deductions and does not involve any
payment other than the stipulated premium.
The allocation rate is the proportion of the premiums used to purchase units. An
allocation rate of 100 percent means the entire premium is used to purchase units.
Less than 100 percent means that there has been a charge and above 100 percent
means that there has been an additional benefit given to you.
The allocation rate will be 99 percent for an annual premium of less than Rs 7500,
100 percent for an annual premium of Rs 7500 to Rs 9999 and 101 percent for an
annual premium of Rs 10,000 and above.
Any additional single premiums will have an allocation rate of 101 percent.
There will be a selling/purchase price spread of 5 percent
There will be an initial management charge of 5 percent per annum on the initial units
(units purchased with the first two years’ regular premium or two years’ incremental
regular premium) of the policy.

49
An administration charge of Rs 55 per month will be applied which shall be adjusted
annually for inflation.
There will be a regular management charge of 1 percent per annum on both initial and
accumulation units.
Risk charges will vary by age, sex level of life cover and the riders opted.
Charges are subject to review at the discretion of the company.
Survival benefits:
The sum insured can be increased at policy anniversary subject to the evidence of
good health and approval of the underwriters.
Offers protection through the optional addition of one or both of the two riders -
Accidental Death and Dismemberment (protection from the risk of death or
dismemberment due to an accident).
Offers two investment fund options - a With Profits fund and a unit Linked Fund.
In case of joint life, policy terminates after making benefit payments on first death or
first contraction of CI and PTD on any life.
In case of partial dismemberment (if you have chosen the Ad and D rider), 50 percent
of the sum insured is paid and the policy continues for the balance sum insured.
A final bonus if any, may also be payable on death or surrender in case of a With
Profits policy.
Death benefits:
In case of accidental death or complete dismemberment (if the AD rider is chosen) an
additional sum insured is paid.
If the insured dies, or contract a critical illness or become permanently disabled (if the
Critical Illness and PTD rider is chosen) a lump sum equivalent to the higher of the
policy value in respect of regular premium or sum insured is paid.
Bonus:
Two types of Bonuses will be offered:
Regular
A regular bonus rate will be declared annually for that year in the form of increases in
the unit price.

50
The unit price will be increased daily in line with the latest declared regular bonus
rate, equivalent to bonus rate for the year. Once added, regular bonuses cannot be
removed.
Final bonus:
A final bonus may be added when benefits are taken on maturity, death or unit
cancellation to ensure full smoothing over the period of the policy.
The rate payable will depend on when the units were bought and are applied to the
value of the cashed units.

Investment Fund Options:

Units:
Premiums paid to purchase units, are used to pay for policy benefits (such as death
cover) and also to invest in units. The value of the investment at anytime is the
number of units in the unit account multiplied by the unit price.
With Profits fund
This is a modern unitized With Profits Fund designed to provide capital growth.
The money is invested in a range of assets, with a government securities bias, to
provide solid returns without exposing with-profits investors to undue risk. The aim
of the With Profits fund is to provide good returns by participating in the profits of the
fund.
LifeLong.
LifeShield
LifeLong.
LifeLong is designed to suit your individual requirements, no matter which life stage
you are at, and changes as your needs change during your entire life. For the same
premium, you can opt for a higher life cover (protection) and lower savings or lower
life cover and higher savings. The choice of protection-savings mix is yours, and the
decision can be based on your priorities and age. You can also cover your spouse
under the same policy without any additional expense through a joint life policy (first
death basis).

51
LifeLong offers a With Profits or 3 Unit Linked investment fund options, which give
you the flexibility of choosing how your money should be invested in terms of the
risk and the security of the return on the investment. You can invest 100% of your
premiums either in With Profits Fund or in any of the Unit Linked Funds. The
minimum allocation in each selected unit linked fund must be 10%.
Life Shield
Pure Term Insurance
LifeShield is a low cost life insurance plan which guarantees to pay a lump sum
amount in case of your death during the term of the policy.
LifeShield can be purchased for any life between 18 to 55 years of age. However, the
maximum age of the life insured at expiry of the policy is 65 years.
The minimum and maximum policy terms are 5 years and 40 years, respectively. The
minimum annual premium is Rs.2,000 and the minimum sum insured is Rs.500,000.
The sum insured of the policy can be increased (only upto 40 years of age) once by
50% (subject to maximum increase of Rs.1,000,000) during the term of the policy,
without submitting any evidence of good health, if:
- You decide to increase the sum insured within three months of your marriage.
- You decide to increase the sum insured within three months of the birth of your
child.
This option to increase the sum insured is available if the policy has been accepted on
standard rates. It can be exercised only when outstanding term of the policy is at least
5 years and the policy is inforce for full sum insured.

Mainly for Savings

We offer the following savings policies-
• Easy Life Plus
Easy Life Plus is a simple, unit-linked endowment plan with the benefit of life
protection. By choosing an appropriate premium level and term, you can match the
maturity date of the plan to a specific savings need such as your child’s education,
wedding or any other financial need.
EasyLife Plus offers a With Profits or 3 Unit Linked investment fund options, which
give you the flexibility of choosing how your money should be invested in terms of

52
the risk and the security of the return on the investment. You can invest 100% of your
premiums either in With Profits Fund or in any of the Unit Linked Funds. The
minimum allocation in each selected unit linked fund must be 10%.
•Young Achiever
Child Policy
Young Achiever is a regular premium life insurance product designed to meet the
financial needs of your children- be it higher education, marriage, establishing
themselves while starting a career or a business, or any other need. Through this
policy, you save regularly to meet your children's needs, and at the same time their
financial needs are taken care of should something unfortunate happen to you. Young
Achiever can be purchased on the life of any one of the parents with the child as the
nominee.
Young Achiever offers a With Profits or 3 Unit Linked investment fund options,
which give you the flexibility of choosing how your money should be invested in
terms of the risk and the security of the return on the investment. You can invest
100% of your premiums either in With Profits Fund or in any of the Unit Linked
Funds. The minimum allocation in each selected unit linked fund must be 10%.
•Life Bond 5
LifeBond 5 is an investment plan where you pay premiums only for 5 years and get
investment returns with maximum tax benefits. This unit-linked plan gives you the
flexibility that you, as a smart investor, seek both at the time of investment and at
maturity.
LifeBond 5 offers 3 Unit Linked investment fund options, which give you the
flexibility of choosing how your money should be invested in terms of the risk and
the security of the return on the investment. You can invest your premiums in any one
fund or in a combination of funds. The minimum allocation in each selected fund
must be 10%.
•Life Bond
LifeBond is a unit linked, Single Premium Whole Life plan, designed to provide you
the maximum benefit of investment returns and tax benefits. You can gift LifeBond to
your newborn and provide financial security when he/ she needs it. Also, you can

53
cover your spouse under the same policy without any additional expense through a
joint life policy (second death basis).
•Life Saver
Life Saver is a unit linked endowment plan designed to meet your specific long-term
savings needs such as education and wedding costs for your children, with the added
reassurance of a life cover to meet those costs in the unfortunate event of your death
before the policy matures. You can take LifeSaver on single life or jointly with your
spouse (first death basis).
Life Saver can be purchased on any life between 18 to 65 years. However, for any
rider cover the maximum entry age is 55 years.
You can invest 100% of your premiums either in With Profits Fund or in any of the
Unit Linked Funds. The minimum allocation in each selected unit linked fund must be
10%.
•Pension Plus
PensionPlus is a tax efficient, personal pension plan that is designed to help you earn
a regular income, even after you stop working. Through this plan, you build a fund
till you retire which provides you financial security after retirement.
PensionPlus can be purchased for any life between 18 to 65 years of age. The
minimum age at maturity is 40 years and the maximum age at maturity is 70 years.
You have the option of either paying regular premiums or paying a single premium.
The minimum annual premium is Rs. 6,000 for regular premium and Rs 1,00,000 for
a single premium option. The minimum policy term is 5 years.
A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds.
•Save Guard
PensionPlus is a tax efficient, personal pension plan that is designed to help you earn
a regular income, even after you stop working. Through this plan, you build a fund
till you retire which provides you financial security after retirement.
PensionPlus can be purchased for any life between 18 to 65 years of age. The
minimum age at maturity is 40 years and the maximum age at maturity is 70 years.
You have the option of either paying regular premiums or paying a single premium.
The minimum annual premium is Rs. 6,000 for regular premium and Rs 1,00,000 for
a single premium option. The minimum policy term is 5 years.

54
A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds.

•Life Bond Plus

LifeBond Plus is a unit linked, Single Premium Endowment plan, designed to provide
you the maximum benefit of investment returns and tax benefits.
The entry age is 18 to 65 years (last birthday) and in case rider is opted, the maximum
entry age is 55 years. The policy terms is 5 to 25 years (maximum age at maturity 70
years).
A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds.
•Save Guard Junior
Save Guard Junior is a simplified, unit-linked endowment plan, which covers your
child’s life. It is specially designed to help you save for important milestones in your
child’s life like education, setting up a business or marriage. SaveGuard Junior offers
an investment opportunity as well as life insurance without requiring you to undergo
any medical examinations.
Save Guard Junior offers entry ages from 0 to 17 years, a choice of policy terms, from
10 to 30 years as well as an option of investing in any or a combination of 3 unit-
linked funds. Save Guard Junior also offers a guarantee that the units invested in the
Secure Fund will not be less than the price they were bought at plus 3% interest
compounded annually.
•Life Saver Plus
Life Bond Plus is a unit linked, Single Premium Endowment plan, designed to
provide you the maximum benefit of investment returns and tax benefits.
The entry age is 18 to 65 years (last birthday) and in case rider is opted, the maximum
entry age is 55 years. The policy terms is 5 to 25 years (maximum age at maturity 70
years).
A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds.
•Max New York Life Insurance DhanVriddhi
An insurance plan that guarantees the money you planned for.
•Max New York Life Insurance Little Master
Today your child wants to be a chef. Yesterday, he dreamt of becoming a cricketer.
Tomorrow he might want to be a pilot. You never know where your child's dreams

55
will take him. Max New York Life Insurance Little Master helps you go that extra
mile to ensure that your child realizes his dreams, whatever they may be.
Max New York Life Insurance Little Master is a comprehensive, unit-linked
endowment plan which covers the life of the parent as well as the child. It has several
firsts which make it an extremely competitive product; a waiver of premium in the
event of the parent's death, a comprehensive health benefit (CHB) rider which covers
18 critical illnesses, up to 4 partial withdrawals per year in the last 5 years of the
policy and guaranteed additions of up to 7% of the units at maturity.
•Freedom Life Plan
Freedom LifePlan is a unit-linked limited premium paying endowment plan with
guaranteed loyalty additions. This unit linked plan gives you the flexibility to
customise the plan to suit your individual needs and alter it subsequently with your
changing needs. You can take Freedom LifePlan on single life or jointly with your
spouse (first death basis).
Freedom Life Plan offers 3 Unit Linked investment fund options, which give you the
flexibility of choosing how your money should be invested in terms of the risk and
the security of the return on the investment. You can invest your premiums in any one
fund or in a combination of funds. The minimum allocation in each selected fund
must be 10%.
• Group
Our Group products are designed keeping in mind the special requirements of
organizations and large groups
• Corporate Life
CorporateLife is a product designed primarily for organisations to provide life cover
to their employees. This is a group term insurance product which provides cover
against risk of death. Additional covers against accidental death and permanent
disability are also available, if opted for by you.
• Credit Net
Credit Net is a product specially designed by us for banks, finance companies and
financial institutions like you, which offer credit cards, auto loans, consumer durable
loans and/or personal loans to their customers (members).
• Group Gratuity
56
 Group Gratuity product, a unit-linked product designed primarily for the corporate
sector to help employers plan and create a fund to fulfil their future obligations in a
systematic manner. This product aims to provide a well-planned fund giving tax
benefits to the employer and above all financial security to employees at retirement or
at the time of leaving the employment.
• Credit Plus
Loan Suraksha
Credit Plus is a product specially designed by us for Micro Finance Institutions like
you who provide loans to individuals in the rural and social sectors and who would
also like to provide some financial security to the families of these individuals
(members).
This is a yearly renewable group term insurance scheme which provides death cover
on group basis.
• GroupShield
LoanSuraksha is a single premium product designed primarily for the Banks and
other Financial Institutions to provide life cover to their housing loan and car loan
customers. This is a group term insurance product, which provides cover against risk
of death. The Bank/Financial Institution is the master policyholder.
• GroupShield
GroupShield is a product specially designed by us for institutions, co-operatives and
NGOs like you, who are operating in the rural and social sectors and who would like
to provide some financial security to your members’ families.

Rural
At Max New York Life Insurance we have specially designed products for the rural
sector
Amar Suraksha
Term Insurance with Premium Back
Amar Suraksha is a life insurance plan which guarantees to pay a lump sum amount in
the unfortunate event of your death during the term of the policy. On survival through
the duration of the policy, you are returned the entire premium amount without
interest.
57
Amar Suraksha can be purchased for any life between 18 to 45 years. The maximum
age at maturity of the policy should be 50 years.
Amar Suraksha can be purchased for any amount ranging from a minimum sum
insured of Rs. 20,000 to a maximum sum insured of Rs. 100,000.
The policy can be bought for a term of 5,10,15 or 20 years.
The minimum annual premium is Rs. 500. The maximum premium would depend
upon the level of sum insured chosen.
Jana Suraksha can be purchased for any life between 18 to 45 years of age. This
policy can be bought for a term of either 5 years or 10 years and the maximum age of
the life insured at expiry of the policy is 50 years or 55 years, respectively.
Jana Suraksha can be purchased for any amount ranging from a minimum sum
insured of Rs. 20,000 to a maximum sum insured of Rs.50,000.

• Anmol Suraksha
Simple Savings cum Protection Plan
Anmol Suraksha is a fixed term, protection cum savings plan. It is a simple product
which can be purchased just by giving a declaration of good health.
Anmol Suraksha can be purchased for any life between 18 to 45 years of age.
However, the maximum age of the life insured at expiry of the policy is 60 years.
Anmol Suraksha can be purchased for any amount ranging from a minimum sum
insured of Rs. 10,000 (subject to a minimum premium of Rs. 1,000 for yearly
frequency of payment and Rs. 500 for half-yearly frequency of payment) to a
maximum sum insured of Rs. 500,000. The policy can be bought for a fixed term of
either 5, 10, 15 or 20 years.
Life Long - Max New York Life Insurance Life
Suitability
• Life Long is a flexible whole life plan suitable for all stages of life.
Salient Features
• Life Long is a whole life unitised protection cum savings plan.
• Policy can be purchased on a single life or joint life (spouse only) on
first death basis.

58
• Policyholder has the option to either choose the sum assured or
premium he wishes to pay. Further he has to choose the level of cover -
Minimum, Standard, Maximum
• Premiums are payable till the age of 85 years or till death which ever is
earlier. However risk cover expires at age 70 years. One can pay the premiums
in yearly, half-yearly, quarterly or at monthly (direct debit only) intervals.
• Benefits under the policy can be enhanced by opting for rider. Riders
available under the policy are:
1. Accidental Death & Dismemberment (AD&D)
2. Critical Illness & Permanent Total Disability (CI&PTD
3. Hospital Cash Benefit (HCB)

• Charges applicable under the policy are made by the way of

deductions. Charges applicable are:
1. Initial management charge of 5% per annum on the initial units
(units purchased with the first two years' regular premium or two years'
incremental regular premium) of the policy
2. An administration charge of Rs.55 per month( this shall be
adjusted annually for inflation).
3. A regular management charge of 1% per annum on both initial
and accumulation units.
4. Risk charges based on age, sex, level of life cover and the
rider(s) opted.

Benefits
• There is no maturity for the policy. Full withdrawal of the policy is
permitted after two policy years and partial withdrawal is permitted after three
policy years. Policyholder will get back the number of units surrendered
multiplied by their selling price, less early redemption charges, if any.
• The minimum amount one can withdraw at any one time in case of
partial cash-in of units is Rs. 5000/-, increasing from time to time (as

59
 stipulated by the Company). The minimum balance (value of units) in the
account at any time should not be less than Rs. 10,000.
On Death:
• Lump sum equivalent to the higher of the value of units in respect of
regular premiums or the sum insured is paid. This apart, the value of units in
respect of lump sum investments through additional single premiums will be
paid.
• A final bonus, if any, may also be payable in case of a With Profits
policy.
• In the case of joint life insurance, death benefit is paid on the first
death only and thereafter the policy will terminate.
• If AD&D has been selected and death occurs from an accident, an
additional sum equal to the sum insured is paid.
• If death occurs after 70 years of age, only the policy value is paid.

Riders
Riders can be attached to the base coverage at inception only and rider cover expires
at 60 years of age.
Accidental Death & Dismemberment (AD&D)
• This rider pays an additional 100% sum assured or 50% sum assured in
case policyholder or his/her spouse (if insured jointly) meets with a an
accident leading to complete dismemberment or partial dismemberment
respectively. Maximum amount payable is limited to Rs.50 lacs(subject to
indexation increases).
• The benefit under this rider is paid if death or dismemberment happens
within 90 days of the date of accident.
• If the total benefit payment since inception has not reached 100% of
the sum insured, the rider coverage will remain in force for the balance
amount. The risk cover under the base policy will remain unaffected.

Critical Illness & Permanent Total Disability (CI&PTD)

60
• In the event of policyholder or his/his spouse(if insured jointly),
contract any of the covered critical illnesses or become permanently and
totally disabled, a lump sum equivalent to the higher of the value of units in
respect of regular premium or the sum insured (subject to a maximum of Rs.
20 lacs), is paid and policy comes to an end.
• The value of units in respect of additional single premium will be paid
in addition to the above benefit without any deductions
• Maximum benefit under this rider is subject to Rs. 20 lacs(subject to
indexation increases).

Hospital Cash Benefit (HCB)

• Fixed amount of cash is paid for each day of hospitalisation in case

policyholder or his/his spouse(if insured jointly) is hospitalised for more than
48 hours.
• This benefit will be restricted to a maximum 30 days over a policy year
and 180 days over the whole term of the risk cover.
• This benefit will be available under those policies only where regular
annual premium is at least Rs. 10,000.

Other Conditions

• Minimum entry Age: 18 years

• Maximum entry Age: 60 years
• Maximum entry age for rider cover: 55 years.

Secure life - Max New York Life Insurance Life

61
Suitability

• Secure Life is an ideal life insurance plan suitable for people who want
to have insurance protection at low cost at the same time expect some return from
the policy.
Salient Features

• Secure Life is a low cost term insurance plan with the benefit of return
of premium on survival to maturity.
• Premium can be paid at yearly, half-yearly, quarterly or at monthly
(direct debit only) intervals.
• Full sum assured is paid on death with in the term.
• On survival to maturity entire premiums paid, excluding rider premium
and extra premiums, if any, is paid.
• Policy holder has the option to increased the sum assured by 50%
(subject to maximum increase of Rs. 1,000,000) during the term of the policy,
without submitting any evidence of good health, if:
1. He/she decides to increase the sum insured within three months
of his/her marriage.
2. He/she decides to increase the sum insured within three months
of the birth of his/her child.
3. The premium for the increased sum insured will be calculated
on the basis of the age at the time of exercising this option.
4. This option to increase the sum insured is available to standard
lives only and can be exercised when the outstanding term of the policy is at
least 5 years.
• The premiums paid are eligible for a tax rebate on premium paid as per
Section 88 of the Income Tax Act and the tax proceeds are tax free under Section
10(10D) of the Income Tax Act.

Benefits
On Death

62
 • Full sum assured is paid on death within the term.
On survival
• On survival to maturity entire premiums paid, excluding rider premium
and extra premiums, if any, is paid.
Riders
Accidental Death and Dismemberment (AD&D) rider
• In case of accidental death or complete dismemberment an additional
amount equal to the basic sum insured is paid.
• In case of partial dismemberment due to an accident 50% of sum
insured is paid and the rider continues to be in force for the balance of the sum
insured.
• The rider cover expires on life assured attaining 60 years of age.

Other Conditions
• Minimum Entry Age: 18 years
• Maximum Entry Age 55 years.
• Maximum maturity age : 65 years.
• Minimum policy term :5 years
• Maximum policy term: 25 years
• Minimum sum insured: Rs. 300,000/- (subject to a minimum premium
of Rs. 2,000/- per annum)
• Maximum sum insured: of Rs. 5,000,000/-.

Amar Suraksha - Max New York Life Insurance Life

Suitability
• Policy is suitable for people who wish to provide financial security for
the family at low cost and at the same time expect some return on the
investment.
Salient Features
• Amar Suraksha is a term insurance plan with certain benefits of a
savings plan.

63
• Policy guarantees to pay a lump sum amount on death during the term
of the policy and on survival to the term of the policy, the entire premium
amount is returned.
• During the first three policy years, no surrender value on the policy is
payable.
• In case of death in a paid-up policy, only guaranteed surrender value
would be payable.
• The sum insured cannot be changed during the term of the policy.
• Policy offers a free look period of 15 days wherein policyholder can
cancel the policy and the premium paid will be refunded after adjusting for
stamp duty.

Benefits
On death
• Sum assured is payable
On Survival
• The entire premiums paid are returned.
Other Conditions
• Minimum Age at entry : 18 years
• Maximum Age at entry : 45 years
• Maximum Age at maturity : 50 years
• Policy terms : 5,10,15 or 20 years.
• Minimum Sum assured : Rs. 20,000
• Maximum sum insured : Rs. 100,000
• Minimum annual premium: Rs.500

Exclusions
• No benefit will be payable if the death of the life insured is caused
directly or indirectly by suicide within one year of the date of commencement
of the policy.

64
Easy life plus - Max New York Life Insurance Life
Suitability
• Easy Life Plus is a simple endowment savings plan along with the
benefit of life protection. It is suitable for people who wish to save for a
specific need such as your children's education, wedding, etc

Salient Features
• Easy Life Plus is a unitized, fixed term, protection cum savings plan.
• The policy provides cover against death as well as accidental death/
permanent total disability due to an accident.
• The sum insured is calculated by multiplying the chosen annual
premium with the cover level. The cover level is 10 times the annual premium
for all ages. For example, if the annual premium is Rs. 10,000, then the sum
insured will be Rs. 100,000.
• Policyholder has the option of cashing-in the policy or making it paid-
up after two policy years if at least two years premium has
• The premiums paid are eligible for a tax rebate on the premium paid
been paid.
• as per Section 88 of the Income Tax Act and the tax proceeds are tax
free as per the provisions of Section 10 (10D) of the Income Tax Act 1961.
• Various charges applicable under the policy are made by the way of
unit deductions. Some of the charges applicable under the policy are:
a. An initial management charge of 5% per annum on the initial
units (units purchased with the first year's premium) of the policy.
b. A regular management charge of 1% per annum on both initial
and accumulation units.
c. An administration charge of Rs.35 per month will be applied,
which shall be adjusted annually for inflation.
d. Risk charges will vary by age and sex.
• In case of surrender, different levels of early redemption charges will
be deducted, depending upon the duration of the policy.

65
Benefits
Survival
• On survival to maturity the policy value is paid.

Time frame Untoward incidents What you get

Year One Non-Accidental death 110% of premium paid
Year One Accidental death Sum insured x 2
Permanent disability due
Year One Sum insured x 2
to an accident
Sum insured or accu-mulated
Year two onwards Non-Accidental death
policy value,whichever is higher
Year two onwards Accidental death At least twice the sum insured
Permanent disability due
Year two onwards At least twice the sum insured
to an accident
Other Conditions
• Minimum Age at entry : 18 years
• Maximum Age at entry : 50 years
• Maximum Age at maturity : 60 years
• Terms available:-10, 15, 20 or 25 years.
• Minimum annual premiums: Rs.6,000
• Maximum annual premiums: Rs. 50,000.

66
 Chapter 8
RECOMMENDATIONS

67
 RECOMMENDATIONS

The report "Market Survey for understanding customer buying of insurance

products” has been mainly conceived with a view to have a insight of insurance sector
& to provide the company with essential factors which are looked upon by the
customers as well as buying behavior of the insurance policy.

It has been observed that people perception regarding insurance is that it is a tool to
protect their family, a tax saving device etc. People are focused towards the benefits of
the insurance & a strong need in felt for having the insurance. People are in the process
of buying policies one after the other and they do not feel the need of age specification
for purchasing insurance.

As the private insurance companies are emerging, people are having preoccupied
thinking that they will provide better products & services.

• As the people think that insurance is a tool to protect their family & a tax
saving device. They are aware of the fact & realizing its, importance. The
company should try to expand & build up its infrastructure because there is
a large potential for insurance in India.

• As seen from the survey that at present 70% of the customer are having
insurance policy out of which 87.5% of the customer are planning for new
investments. So it can be a good potential for the company and they should
make an attempt to trap these customers.

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 • 43% of the customers are even ready to go for insurance if a service
provider away from their home is providing it. But intend they should
provide good products and services. The company should try to convince
these customers and get them in its favor.

• To fix an appointment especially with the corporate people was very tough and
many a time negative response was received.

• Some of the customers due to time constraints and availability of documents with
them filled up the data sheet in a hurry, which meant that the provided data might
not be 100% true.

• The numbers of respondents were limited to 400 because of time constraints &
assignments.

• The project (report) so made is a compilation based on the data collected by

various team members during project period.

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 Chapter 9
BIBLIOGRAPHY

70
 BIBLIOGRAPHY

1. BOOKS

• Saunders, M., et al (2003) 3rd edn. Research Methods for Business Students.
Prentice Hall
• Easterby- Smith, M., Thorpe, R. and Lowe, A. (2002) Management Research: An
introduction 2nd edition, London, Sage., as cited by Saunders, M., Lewis, P &
Thornhill, A. (2003) Research methods for Business Students, 3rd edition,
Financial Times Prentice Hall
• Gill, J. & Johnson, P. (1997) Research Methods for Managers. London: Paul
Chapman
• Newsom, D., et al (2000) 7th edition, This is PR: The Realities of Public Relation,
Singapore, Thomas Asia Pte Ltd, pg162

2. INTERNET

• INTERNET
• http://www.maxnewyorklife.com/about_us/about_us.aspx
• http://www.maxnewyorklife.com/about_us/achievements_awards.aspx
• http://www.maxnewyorklife.com/about_us/max_india.aspx
• http://www.maxnewyorklife.com/about_us/newyrklife_LLC.aspx
• http://www.maxnewyorklife.com/individual/protection.aspx

3. MAGAZINES & NEWSPAPERS

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• Business today

• Network magazine

• India today

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Chapter 10
ANNEXURES

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 ANNEXURE

QUESTIONNAIRE

1. ARE YOU EMPLOYED?

YES NO
If YES, only then proceed

2. DO YOU HAVE ANY INSURANCE POLICY?

YES NO

3. WHICH INSURANCE POLICY DO YOU HAVE?

LIFE NON-LIFE`` BOTH

4. WHICH CO’S INSURANCE POLICY YOU PREFER THE MOST?

(RANK THEM)

a) LIC

b) ICICIPRUDENTIAL

c) SBI LIFE INSURANCE

d) ING VYSYA LIFE

e) OM KOTAK MAHINDRA

f) TATA AIG LIFE

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 g) ANY OTHER ________( Specify)

5. FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY?

(Please Tick)

a) <5Yrs b) 5-10 Yrs c) 10-15 Yrs d) Any Other______

(Specify)

6. WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE

COVER?
(RANK THEM)

a) COVER FUTURE UNCERTAINITY

b) TAX DEDUCTIONS

c) FUTURE INVESTMENT

d) ANY OTHER _________ (Specify)

7.YOUR MONTHLY INCOME?

a)<4k b)4k-8k c)8k-12k d)12k-16k e)Other_____(Specify)

8.DO YOU REALLY THINK INSURANCE POLICY COVER IN TODAY’S

SCENARIO IS NOT ESSENTIAL?
______________________________________________________

9. WHAT’S YOUR PERCEPTION ABOUT INSURANCE?

(RANK THEM)

a) A SAVING TOOL

b) A TAX SAVING DEVICE

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 c) A TOOL TO PROTECT FUTURE

11. ARE YOU SATISFIED WITH THE POLICY?

a) SATISFIED SAVING TOOL

b) NOT SATISFIE
c) NOT RESPONDING

12. DO YOU PAY TAXES?

YES NO

THANK YOU

76