By: NITIN GULATI 06bs2089 ICFAI Business School B-101, Phase VIII, Industrial Area Mohali-160060

A REPORT ON COMPARATIVE ANALYSIS OF PRIVATE LIFE INSURANCE SCHEMES IN INDIA

A report submitted in partial fulfillment of the requirements of MBA Program of ICFAI Business School

SUBMITTED TO: Prof. Harjeet kaur

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SUBMITTED BY: Nitin Gulati

(Project Guide)

06bs2089

ACKNOWLEDGEMENT

I felt my sincere gratitude towards Prof. Bhagat Ram (Dean, IBS Chandigarh) for providing me the opportunity to do my summer internship in KARVY Stock broking Limited. I am very much thankful to Mr. Aman Mehta (Branch Manager, KARVY Stock Broking Limited; Panchkula) for providing the valuable guidance and help during my internship and completion of the project. I would like to thank Prof. Harjeet Kaur (Project Guide; Faculty IBS) for guiding me throughout the Summer Internship Program. Last but not the least I would like to thank all the persons directly or indirectly involved.

(Nitin Gulati)

TABLE OF CONTENTS

Acknowledgements 3 List 6 Abstract 7 1. Introduction 1.1 8 1.2 11 1.3 11 1.4 12 12 Benefits to the of the company study 1.5Limitations Objective About the project About KARVY Stock Broking Limited of Illustrations

1.6Methodology 12 2. Main Text 2.1. About Life Insurance 13 2.2. Life Insurance (History) 13 2.3. Types of life Insurance 14 2.4. Life Insurance Products 17 2.5. Investment Policies 18 2.6. Types of insurance plans 19 3. Life Insurers in Private Sector (Sorted) 22 ICICI Prudential Life Insurance Life Insurance Corporation of India AVIVA Life Insurance HDFC Standard Life Insurance 4. Comparative Analysis (ULIP) Unit Linked Endowment Plans
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23 23 24 25

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Unit Linked Pension Plans Unit Linked Child Plans 5. Analysis 44 6. Conclusions 46 7. Appendices 47 8. References 49

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LIST OF ILLUSTRATIONS TITLE NO. PAGE

a) KARVY Services 8 b) Investor Perception towards insurance schemes (Fig. 2) 45 c) Pie Chart (Fig.3) 45

TABLES a) Comparative analysis of endowment plans (ULIP) 26 b) Comparative analysis of endowment plans Contd. (ULIP) (Table 2) 30 c) Comparative analysis of pension plans (ULIP) 34 (Table 3) (Table 1)

d) Comparative analysis of pension plans Contd. (ULIP) 37 e) Comparative analysis of child plans (ULIP) 40

(Table 4)

(Table 5)

ABSTRACT

The Project Comparative Analysis of Private life Insurance Schemes in India deals with the private companies and comparison of the life insurance products being offered by them. As there are many companies offering life insurance, so its not easy to compare products offered by all the companies. So as to get a proper comparison a few of the companies are taken into consideration. This project deals with information regarding life insurance, types of life insurance (term, universal, whole life, and endowment life insurance), life insurance
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products(Joint life, Survivorship life or second-to-die life Single premium whole life, Modified whole life ,Group life insurance) , investment policies (With-profits policies, pensions, Annuities), types of insurance plans(Unit Linked Insurance Product (ULIP), traditional plans), life insurers in private sectors and how and when the private companies started their life insurance products and their private partners. It contains the comparative analysis of few private life insurance companies offering Unit Link Endowment plans, Pension Plans and child plans. Finally, a sample of 50 people has been taken and survey has been done using questionnaire method. Bar graphs and pie-charts have been made completely based on the survey. Comparison is also based on the basis of returns of the policies

INTRODUCTION
ABOUT KARVY STOCK BROKING LIMITED: The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company Karvy Consultants Limited. It started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985.
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KARVY Stock broking Limited are the first Registrar and Transfer Agents. Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards attaining diverse goals of the customer through varied services. Creating a plethora of opportunities for the customer by opening up investment vistas backed by research-based advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping the customers create waves in his/her portfolio and empowering the investor completely is the ultimate goal. Fig. 1

KARVY has established itself as an electronic custodian registered with National Securities Depository Ltd. (NSDL) and Central Securities Depository Ltd. (CSDL) in 1998. Karvy set standards enabling further comfort to the investor by promoting paperless trading across the country and emerged as the Top 3 Depository Participants in the country in terms of customer serviced.

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KARVY - Indias premier integrated personal financial advisory group with a wide network of 575 offices & 7300 professionals operating from 387 towns/cities and also established presence in UAE & USA. KARVY, ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporates, comprising the who is who of Corporate India.

KARVY covers the entire spectrum of financial services such as Stock Broking, Demat Services, Insurance, Wholesale/Retail Debt, Primary Market, Mutual Funds, Fixed Deposits, Loan Products Distribution, Investment Banking, Registrars & Share Transfer Agents, Medical Transcription, BPO, Realties.

It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate as a wealth management and wealth accumulation option. The difference between unpredictability and a safety anchor in the market is provided by in-depth knowledge of market functioning and changing trends, planning with foresight and choosing one’s options with care.
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KARVY delivers advisory services to a cross-section of customers. The service is backed by a team of dedicated and expert professionals with varied experience and background in handling investment portfolios. They are continually engaged in designing the right investment portfolio for each customer according to individual needs and budget considerations with a comprehensive support system that focuses on trading customers' portfolios and providing valuable inputs, monitoring and managing the portfolio through varied technological initiatives.

Thus over the last 20 years Karvy has traveled the success route, towards building a reputation as an integrated financial services provider, offering a wide spectrum of services. And it has made this journey by taking the route of quality service, path breaking innovations in service, versatility in service and finallytotality in service. Its highly qualified manpower, cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for us the position of an emerging financial services giant enjoying the confidence and support of an enviable clientele across diverse fields in the financial world.

ABOUT THE PROJECT

The project Comparative Analysis of Private Life Insurance Schemes in India deals with various Private Life Insurance Companies. The schemes offered by these
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companies are to be compared in this project. This project will serve as an analytical tool in the hands of people so as to invest properly for their future. The insurer (the life insurance company) calculates the policy prices with intent to recover claims to be paid and administrative costs, and to make a profit. The cost of insurance is determined using mortality tables calculated by actuaries This project will come out with particular options for the investor on the basis of survey of various life insurance offering private companies. This project will serve as an analytical tool in the hands of the investor to properly invest so as to get the future benefits.

OBJECTIVE

The project will provide the comparative analysis of all the private Life Insurance Companies offering different Life Insurance Schemes. The project will provide a better investment option to the investor.

BENEFITS TO THE COMPANY

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As Karvy Stock Broking Company is one of the Indias premier integrated financial service enterprise, this project will provide customers with better options in life insurance. With this analytical tool the financial consultant of the company can easily analyze the various schemes of the companies and recommend it to their investors according to their needs and requirement. This will help the company to get a upper hand in the market.

LIMITATIONS OF THE STUDY: Potential customers are having a mindset for schemes offered by Life Insurance Corporation of India .So; the scope is limited for private insurance companies.

METHODOLOGY: The data collected for the project is secondary data completely based on the brouchers of the various schemes issued by the company. Different fact sheets are also taken into consideration and seminars from various life insurance companies consultants are also helping in this respect. Various private companies sites that are offering life insurance are also referred. Views of customers regarding Life Insurance are of great help. Survey has been done by taking a sample of 50 people.

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MAIN TEXT
ABOUT LIFE INSURANCE: Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the insured's death. In return, the policy owner (or policy payer) agrees to pay a stipulated amount called a premium at regular intervals.

Life Insurance (History) Life Insurance in India was nationalized by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC. In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a road map for privatization of the life insurance sector. While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending the Insurance Act of 1938 and legislating the Insurance Regulatory and Development Authority Act of 2000. The acme year that the newly appointed insurance regulator Insurance `Regulatory and Development Authority IRDA -- started issuing licenses to private life insurers.

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Insured events that may be covered include:

death, diagnosis of a terminal illness, diagnosis of a critical illness, disability due to ill health, permanent disability, accidental death requirement for long term care

I. Types of life insurance:

Life insurance may be divided into two basic classes temporary and permanent or following subclasses - term, universal, whole life, and endowment life insurance.

Temporary (Term): Term life insurance (term assurance in British English) provides for life insurance coverage for a specified term of years for a specified premium. The policy
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does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else. Term insurance premiums are typically low because both the insurer and the policy owner agree that the death of the insured is unlikely during the term of coverage.

Term assurance is a straightforward protection business. A policy holder insures his life for a specified term. If he dies before that specified term is up, his estate or named beneficiary(ies) receive(s) a payout.

If he does not die before the term is up, he receives nothing. In the past these policies would almost always exclude suicide. However, after a number of court judgments against the industry, payouts do occur on death by suicide (presumably except for in the unlikely case that it can be shown that the suicide was just to benefit from the policy).

If an insured person commits suicide within the first two policy years, the insurer will return the premiums paid. However, a death benefit will usually be paid if the suicide occurs after the two year period.

Permanent:

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Permanent life insurance is life insurance that remains in force until the policy matures (pays out), unless the owner fails to pay the premium when due (the policy expires). The policy cannot be cancelled by the insurer for any reason except fraud in the application, and that cancellation must occur within a period of time defined by law (usually two years).

Permanent insurance builds a cash value that reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million dollars face value can be relatively inexpensive to a 70 year old because the actual amount of insurance purchased is much less than one million dollars. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value.

The three basic types of permanent insurance are whole life, universal life, and endowment. Whole life coverage Whole life insurance provides for a level premium, and a cash value table included in the policy guaranteed by the company. The primary advantages of whole life are guaranteed death benefits; guaranteed cash values, fixed and known annual premiums, and mortality and expense charges will not reduce the cash value shown in the policy.
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The primary disadvantages of whole life are premium inflexibility, and the internal rate of return in the policy may not be competitive with other savings alternatives. Riders are available that can allow one to increase the death benefit by paying additional premium.

Universal life coverage Universal life insurance (UL) is a relatively new insurance product intended to provide permanent insurance coverage with greater flexibility in premium payment and the potential for a higher internal rate of return. A universal life policy includes a cash account. Premiums increase the cash account. Interest is paid within the policy (credited) on the account at a rate specified by the company. This rate has a guaranteed minimum but usually is higher than that minimum. Mortality charges and administrative costs are charged against (reduce) the cash account.

Endowments Endowments are policies in which the cash value built up inside the policy,

equals the death benefit (face amount) at a certain age. The age this commences is known as the endowment age. Endowments are considerably more expensive (in terms of annual premiums) than either whole life or universal life because the premium paying period is shortened and the endowment date is earlier. Endowment
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Insurance is paid out whether the insured lives or dies, after a specific period (e.g. 15 years) or a specific age (e.g. 65).

II. Life Insurance products: Riders are modifications to the insurance policy added at the same time the policy is issued. A common rider is accidental death, which used to be commonly referred to as "double indemnity", which pays twice the amount of the policy face value if death results from accidental causes, as if both a full coverage policy and an accidental death policy were in effect on the insured. Another common rider is premium waiver, which waives future premiums if the insured becomes disabled.

Joint life insurance is either a term or permanent policy insuring two or more lives with the proceeds payable on the first death. Survivorship life or second-to-die life is a whole life policy insuring two lives with the proceeds payable on the second (later) death. Single premium whole life is a policy with only one premium which is payable at the time the policy is issued. Modified whole life is a whole life policy that charges smaller premiums for a specified period of time after which the premiums increase for the remainder of the policy.

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 Group life insurance is term insurance covering a group of people, usually employees of a company or members of a union or association. Individual proof of insurability is not normally a consideration in the underwriting.

III. Investment policies:

With-profits policies Policies which allow the policyholder to participate in the profits of the

insurance company are with-profits policies. With-profits policies are used as a form of collective investment to achieve capital growth. Other policies offer a guaranteed return not dependent on the companies underlying investment performance; these are often referred to as without-profit policies which may be construed as a misnomer.

Pensions Pensions are a form of life assurance. A pension fund will be built up

throughout a person's working life. When the person retires, the pension will become in payment, and at some stage the pensioner will buy an annuity contract, which will guarantee a certain pay-out each month until death.

Annuities

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An annuity is a contract with an insurance company whereby the purchaser pays an initial premium or premiums into a tax-deferred account, which pays out a sum at pre-determined intervals. There are two periods: The accumulation (when payments are paid into the account) The annuitization (when the insurance company pays out)

IV. Types of Insurance Plans: Insurance plans can be distinctly divided into ULIPs and traditional plans.

Unit Linked Insurance Product (ULIP) ULIPs have gained high acceptance due to attractive features they offer. These include:

Flexibility 1. Flexibility to choose Sum Assured. 2. Flexibility to choose premium amount. 3. Option to change level of Premium /Sum Assured even after the plan has started. 4. Flexibility to change asset allocation by switching between funds.

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 Transparency 1. Charges in the plan & net amount invested are known to the customer 2. Convenience of tracking ones investment performance on a daily basis.

Liquidity 1. Option to withdraw money after few years (comfort required in case of exigency) 2. Low minimum tenure. 3. Partial / Systematic withdrawal allowed

Fund Options 1. A choice of funds (ranging from equity, debt, cash or a combination) 2. Option to choose your fund mix based on desired asset allocation

Traditional Plans

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These are the oldest types of plans available. These plans cater to customers with a low risk appetite. Some of the common features of traditional plans are:

Steady Investment 1. Major chunk of investible funds are in debt instruments 2. Steady and almost assured returns over the long term

Features 1. Death benefit is Sum Assured + guaranteed & vested bonus 2. Helps in asset creation as they are for a long tenure 3. Premium to Sum Assured ratios are fixed for each plan and age.

V.

Life Insurers in Private Sector (Sorted):

ICICI Prudential Life Insurance Bajaj Allianz Life HDFC Standard Life
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 SBI Life Insurance Life Insurance Corporation Of India Aviva Life Insurance

Reliance Life Insurance Company Limited - Formarly known as AMP Sanmar LIC

ICICI Prudential Life Insurance ICICI Prudential Life Insurance is a joint venture between the ICICI Group and Prudential plc, of the UK. ICICI started off its operations in 1955 with providing
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finance for industrial development, and since then it has diversified into housing finance, consumer finance, mutual funds to being a Virtual Universal Bank and its latest venture Life Insurance. Foreign Partner: Established in 1848, Prudential plc. of U.K. has grown to be the largest life insurance and mutual fund company in U.K. Prudential plc. has had its presence in Asia for the past 75 years catering to over 1 million customers across 11 Asian countries.

Life Insurance Corporation of India (LIC) The Life Insurance Corporation (LIC) was established about 44 years ago with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and became synonymous with life insurance.

Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and over six lakh agency force.

LIC has hundred divisional offices and has established extensive training facilities at all levels. At the apex, is the Management Development Institute, seven Zonal Training Centres and 35 Sales Training Centres.

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At the industry level, along with the Government and the GIC, it has helped establish the National Insurance Academy. It presently transacts individual life insurance businesses, group insurance businesses, social security schemes and pensions, grants housing loans through its subsidiary; and markets savings and investment products through its mutual fund. It pays off about Rs 6,000 crore annually to 5.6 million policyholders.

AVIVA LIFE INSURANCE: Aviva is UKs largest and the worlds fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 35 million-customer base worldwide. It has more than 364 billion of assets under management. For three consecutive years in 2003 2004 and 2005, Aviva has had relatively high scores on the parameters of Credibility, Respect, Fairness, Pride and Camaraderie in the survey administered by Grow Talent Company Ltd. along with Great Places to Work Institute, Inc. and Business World magazine.

HDFC Standard Life Insurance

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HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC Ltd., Indias largest housing finance institution and Standard Life Assurance Company, Europes largest mutual life company. Incorporated on 14th August 2000, it was the first life company to be granted a certificate of registration by the IRDA on the 23rd of October 2000.

Foreign Partner: Standard Life, UK

Standard Life, UK, founded in 1825, has been at the forefront of the UK insurance industry for 180 years by combining sound financial judgement with integrity and reliability. The company is rated as very strong by Standard & Poors (AA) and Excellent by Moodys (Aa2). HDFC Standard Life Insurance is one of the leading private life insurance companies. The company generated premium from new business of Rs. 486 Cr in 2004-05, registering a year-on-year growth of over 132%. The total premium income (including renewal premium) grew by 130% to touch a figure of Rs. 687 Crores. The company also achieved a major milestone during the financial year by crossing a Sum Assured figure of Rs. 30,000 Cr. The company also declared its fifth bonus for participating policyholders.

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Comparative Analysis of Unit Linked Endowment Plans Table 1 S.NO FEATURES AVIVA LIFE INSURANCE CO. LTD 1 Name of the Product Save Guard HDFC STD. LIFE INSURANCE CO Unit Linked Endowment Plan Unit Linked Plan with the plan benefits option like:-Life Option- Death benefit, Extra Life Option Death Benefit+ ADB,Life & Health Option -Death benefit +C.I Benefits, Extra Life & Health Option DB+CIB+ADB RELIANCE LIFE INSURANCE CO LTD Reliance Market Return Plan

2 Special Feature

Investment Opportunity and Life risk cover without Medical Examination

Unit linked plan with Max Maturity age at 80 yrs.

3 Minimum & Maximum Age at entry

18 yrs & 50 Yrs ( Age last birthday)

18 yrs - Max age at entry - 65 Yrs for Life Option. 30 days to 65 yrs 55 Yrs for other three options namely Extra Life Option,Life
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& Health Option and Extra Life & Health Option

4 Minimum & Maximum Term 5 Maximum Age at maturity

10, 15, 20, 25 or 30 yrs 70 yrs

10 Yrs & 30 Yrs 75 Yrs for Life Option. 70 Yrs for Extra Life Option. 65 Yrs for the other two options.

5 yrs - 40 yrs 80 yrs

6 Minimum & Maximum Premium

Minimum AP is Rs.12000/Maximum Rs.10000/-. PA Rs.3,60,000/( Annual Premium is multiple of Rs.6000/-) Allowed. Mimimum Top Up Amount is Rs. 3000/-

Min AP Rs.10000, Hly -Rs 5000, Qly -Rs 2500, Mly- Rs 1000, S.P -Rs. 25000.

7 Top up Premium

Allowed Minimum Top up premium is Rs 2500. Top up premiums paid over & above 25% of RP will lead to increase in SA to the extent of 125% of excess top up premium

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8 Minimum & Maximum S.A

0.5 x Policy Term x Annual Premium. Max S.A is 18 lacs

Minimum SA= Term of Policy / 2 x A.P. Max SA = 40 x A.P

5* A.P for term of 5 yrs or Term/2 *A.P whichever is higher. For SP -125% of SP. Maximum -No Limit (Rs 5 lacs for age upto 12 yrs) Yly Hly Qly or mly or SP

Premium 9 Payment options

Yly, Hly , Qly or Mly ( For Mly only Direct Debit or ECS only) In case of Death the S.A minus partial withdrawals made within last 2yrs prior to death. If death occurs after 60 yrs the S.A will be reduced with all the partial withdrawals made after age 58 till death.Incase of death during the 1st yr.Higher of 110% of A.P. or Fund Value. From 2nd onwards, Higher of SA or fund value will be paid. The value of top premiums if

Yly, Hly, Qly or Mly ( Mly allowed by Standing Instructions or by ECS only)

Death Benefit

In case of Death during the Policy Term, Greater of the S.A ( Minus any withdrawals made during the 2 yrs preceeding the intimation of death) and the Total Fund Value to the beneficiary. The Benefits under ADB if due will also be paid if the same was opted for by the LA

In case unfortunate loss of life , the beneficiary will receive SA or unit A/c value whichever is higher

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any, will also be allowed

Maturity Benefit

Fund Value of Regular Premium & Top up Premiums. The Customer can also opt to receive part of Maturity value or Whole of Maturity Value in Instalments

Fund Value of the Unit Balance will be paid. The customer can also opt to receive the maturity value as per the settlement options over a period of 5yrs

Fund value of unit A/c will be paid settlemtnt options available to take maturity value in instalments

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Comparative Analysis of Unit Linked Endowment Plans (Contd.)

Table 2 S.NO FEATURES SBI LIFE INSURANCE CO 1 Name of the Product Unit Plus II Regular A Regular Investment Unit Linked Product with Life Cover. Guaranteed addition of Free Allocation of BAJAJ LIFE INSURANCE CO New Unit Gain Plus ICICI PRUDENTIAL LIFE INSURANCE CO LTD Life Time Super

2 Special Feature

A regular Investment33

An Investment plan for long term. Additional allocation of units at

Units as a % of FYr Annual Premium allowed. Can be taken as Whole Life Policy also ie - till one reaches 99 Yrs

Unit Linked Product; with Life cover option

regular intervals (every 4th yr) is a special feature

3 Minimum & Maximum Age at entry

0 yr to 65 yrs

0 yr to 60 yrs. ( Risk commences at Age 7 ) Minimum age at 0 yrs - 65 yrs entry for Additional Benefits is 18 yrs. Max Age at entry for additional

benefits -50yrs 4 Minimum & Maximum Term 5yrs- 40 yrs. Min Term for Minor life is 18 minus age at entry or 5yrs

10yrs Max 70 yrs 70 yrs. All Additional Benefits available up to 65 Yrs.

10 yrs - 75 yrs

5 Maximum Age at maturity

80 yrs

75 yrs

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6 Minimum & Maximum Premium

Minimum AP is Rs. 24000 and further multiples of Rs. 100/-

Min Rs 15000/A.P, Rs 7500 for Hly, Rs 3750 for Qly & Rs.1500 for Mly.(For Mly, SDS or ECS only allowed )

Minimum Premium is Rs 18000

7 Top up Premium

Allowed sub to minimum Rs 10000 For term 5 to 10 yrs 5 * A.P. For term II yrs & above Term/2*AP. Max SA is AP multiplied by a factor depending upon the age at entry .For age 0 to 4 yrs -50 times of A.P; 41 to 50 yrs40 times A.p, 51 to 60 yrs 25 times A.P and 61 to 65 yrs 20 times A.P. Yly Hly Qly or Mly

Allowed. Not available Under this Minimum Policy Topup premium Rs 5000. Minimum SA is Term / 2 * A.P sub to 5 times A.P or Minimum of Rs 100000 Term/2 * A.P which ever is higher. Max SA is 'Y' times the AP where Y is a

8 Minimum & Maximum S.A

factor as per the table which varies form 15 to 125.

Premium 9 Payment options

Yly Hly Qly or Mly

Yly, Hly, Mly

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Death Benefit

Higher of Fund alue or S.A, less withdrawals made during last 12 calender months. If death takes place before 7yrs, the Fund Value will be paid.

On death before age 7, the NAV of units inL.A's A/c will be paid. If death takes place after 7yrs before 60 Yrs, Higher of SA or NAV of units will be paid sub to deduction of partial withdrawals made in the last 24 months. If death takes place after 60 Yrs, Higher of SA or NAV of units less all withdrawals made within 2yrs before 60 and all withdrawals made subsequent to 60 Yrs will be paid.

The beneficiary would receive Higher of S.A ( Net ofpermissible withdrawals) or the Fund Value.Incase L.A is below 7yrs of Age; incase of death only the Fund Value would be payable. Upto Age 60yrs, SA payable on death is reduced to the extent of partial withdrawals made within the proceding 2 yrs. After 60 yrs SA is reduced by all partial withdrawals made from 58 yrs.

Maturity Benefit

Fund value as on date is paid in full

Fund value as on the date of Maturity. Settlement

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On Maturity the Fund Value of the units at the time of maturity is payable. The customer can also opt to receive the Maturity value in

options Instalments as per available to take settlement options. Maturity Value in instalments

Comparative Analysis of Unit Linked Pension Plans

Table 3 S.NO FEATURES ICICI PRUDENTIAL LIFE INSURANCE CO AVIVA LIFE INSURANCE CO LTD HDFC LIFE INSURANCE CO LTD

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1 Name of the Product

Life Time Super Pension Good Investment Opportunity and to provide Post Retirement Income with Life Insurance Cover Option. There are 2 phases. Accumulation Phase & Annuity Phase

Pension Plus Investment opportunity and to provide for pension as Retirement Income. No Life Cover

Unit Linked Pension Investment Opportunity and to provide for Retirement Income. No Life Cover

2 Special Feature

3 Minimum & Maximum Age at entry

18 yrs- 65 yrs

18 yrs- 65 yrs

18 yrs. Max 65 yrs for Regular Premium. 70 Yrs for S.P

4 Minimum & Maximum Term 5 Maximum Cover ceasing Age

10 Yrs- 57 Yrs

Minimum 5 yrs Max upto vesting Age 70 Not Applicable since there is no life cover.

10 Yrs for Regular Premium. 5 yrs for S.P. Max term 40 Yrs

75 yrs

Not Applicable since there is no life cover.

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6 Min & Max Vesting Age

Min & Max Vesting Age

40Yrs- 70 Yrs

50 Yrs- 75 Yrs

Yly, Hly, Mly 7 Premium Payment Frequency

Yly, /Hly, Qly, Mly, ( For Mly only Direct Debit or ECS only). S.P. is also allowed

Yly, /Hly, Qly, Mly, ( For Mly only Direct Debit or ECS only). S.P. is also allowed

Minimum 8 Premium

Rs.10000 Yly, Rs. Rs 6000 Yly. 5000Hly, Rs 834 For SP it is Rs Mly One Lac Not Available in this plan Top up Premium Allowed sub to Minimum Rs 10000/-

Rs 10000 P.A for Regular Premium. Rs 25000 for S.P Allowed. Minimum Top up is Rs 5000

Top Up 9 Premiums

Minimum Rs 1 Not Available. lac. Max= AP * No Life Cover Term of Policy. The customer can Min & Max opt for Zero S.A Sum Assured and make it a Pure Investment Plan

Not Available. No Life Cover

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Maturity Benefit ( Benefit on Vesting )

The Annitant has the option to take 1/3rd of the corpus fund tax-free in lumpsum. The balance will be utilised for purchase of Annuituy. The Annuity can be paid Mly, Qly, Hly, or Yly asper choice of Annuitant. The spouse has the option to receive higher of SA or Fund Value in Lumpsum or opt for Annuity from the Co..However if the Spouse is not the Nominee, the benefits will be paid in lumpsum to the Nominee

The Annitant has the option to take 1/3rd of the corpus fund tax-free in lumpsum. The balance will be utilised for purchase of Annuituy. The Annuity can be paid Mly, Qly, Hly, or Yly asper choice of Annuitant. If death occurs during the 1st Pol Yr 90% of Fund Value is paid . If death occurs after 1st Yr 100 % of Fund Value & Final Addl. Bonus if any is also is paid.

The Annitant has the option to take 1/3rd of the corpus fund taxfree in lumpsum. The balance will be utilised for purchase of Annuituy. The Annuity can be paid Mly, Qly, Hly, or Yly asper choice of Annuitant.

Death Benefit #

Fund Value of Units will be paid to the Beneficiary.

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Comparative Analysis of Unit Linked Pension Plans (Contd.)

Table 4 S.NO FEATURES LIFE INSURANCE CORPORATION OF INDIA 1 Name of the Product Market Plus BAJAJ ALLIANZ LIFE INSURANCE CO LTD New UnitGain Easy Pension Plus Regular Premium Investment Plan. Provides pension on retirement. No Life Cover RELIANCE LIFE INSURANCE CO

Reliance Golden Years Plan Regular Premium Investment Plan. Provides Pension on retirement. Option to add Term Life Insurance

2 Special Feature

Unit Linked Pension Plan. With & Without Life Cover available. Provides Pension on Retirement

3 Minimum & Maximum Age at entry

18 Yrs completed & Max 70 yrs Age Nearer Birthday. For Life Cover 18 yrs- 65 yrs option. Max Age at entry-65 yrs Minimum Term 5 yrs. Max upto vesting age 75 Yrs.

18 yrs- 65 yrs

4 Minimum & Maximum Term

5yrs- 40 yrs

5 Yrs- 52 yrs

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75 yrs 5 Maximum Cover ceasing Age Not Applicable since there is no life cover. 70 yrs

6 Min & Max Vesting Age

40 Yrs- 75 Yrs

45 Yrs- 70 Yrs

45 yrs - 70 yrs

7 Premium Payment Frequency

Yly, /Hly, Qly, Mly, or S.P.

Yly, /Hly, Qly, Mly, ( For Mly only Direct Debit or ECS only) Rs 10000 for Yly, Rs 5000 for Hly, Rs 2500 for Qly, Rs 1000 for Mly

Yly, Hly, Qly or Mly or SP ( Lumpsum Premium) Yly, Rs 10000, Hly Rs 5000, Qly Rs.2500, Mly Rs 1000 /-( for Sal deduction scheme) Rs. 2500 for ( standing instructions / Cr card.) for SP (lumpsum) Min Rs.10000/Allowed. Min Top up amount is Rs 2500/-

Minimum 8 Premium

Rs 5000 P.A for Regular Premium.. For S.P. it is Rs 10000

Top Up 9 Premiums

Allowed. Minimum Top up is Rs 1000

Allowed. Minimum Top up is Rs 5000

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Minimum SA for Not Available. Regular Premium No Life Cover Rs 50000. For S.P it is Rs 25000. Min & Max Max 20 *AP for Sum Assured Regular Prem. For SP, it is equal to S.P. The Annitant has the option to take 1/3rd of the corpus fund tax-free in lumpsum. The balance will be utilised for purchase of Annuituy. The Annuity can be paid Mly, Qly, Hly, or Yly asper choice of Annuitant. If Life cover is opted for SA + Fund Value of Units payable either in lumpsum or as pension. If Life Cover is not opted for, then the Fund Value of Units either in lumpsum or as pension is payable The Annitant has the option to take 1/3rd of the corpus fund tax-free in lumpsum. The balance will be utilised for purchase of Annuituy. The Annuity can be paid Mly, Qly, Hly, or Yly asper choice of Annuitant. Incase of Unfortunate of death, the Fund Value of Units will be paid to the Beneficiary. The Beneficiary (spouse) will have option to purchase Annuity.

Min Rs 1. lac. .Max No limit

Maturity Benefit ( Benefit on Vesting )

The Annuitant has the option to take 1/3rd of the Corpus Fund (Full Account Value) as commuted value. The balance would be utilised for purchase of Annuity. The annuity can be paid as per the option of the Annuitant.

Death Benefit #

In case of unfortunate death during the accumulation period, the Beneficiary can choose to take value of Unit A/c in lumpsum or purchase an Annuity for entire lumpsum or for a portion thereof.

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Comparative Analysis of Unit Linked Child Plans

Table 5 S.NO FEATURES ICICI PRU LIFE AVIVA LIFE INS. Co INS Co. 1 Name of the Product Smart Kid NEW Unit Linked Regular Premium Unit Linked Child Plan with Life Cover on the Parent Parent is the Life Assured. Child is the Beneficiary YOUNG ACHIEVER HDFC STD LIFE INS. CO UNIT LINKED YOUNG STAR

2 Special Feature

Unit Linked Plan with Life Cover on the Parent. Policy cover is taken on the Life of any one of the Parents. Child is the Beneficiary

Unit Linked Plan. Life Assured is the Parent. Child is the Beneficiary. Available in 2 Packages as (i) Life Option Death Benefit and (ii)Life and Health Option - Death Benefit + Critical Illness Benefit.

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3 Minimum & Maximum Age at entry

For Child Between 0-15 yrs. For Parent 20 yrs to 60 yrs

For Child 0 Yrs to 17 yrs. For Parent 21 yrs to 55 yrs

18 yrs -max 65 yrs for Life option. 18 - 55 yrs for Life & Health Option

10 yrs--25 yrs 4 Minimum & Maximum Term

8yrs to 21 yrs. If 10 yrs -- 25 yrs the child's age is 0 - 13 Yrs, then the term is 21 minus Age. If the child's age is 14 - 17 Yrs then the term is 25 minus Age. 65 yrs 75 Yrs for Life Option. 65 Yrs for Life & Health Option. Minimum Rs. 10000/-

Max Age at 5 Maturity

75 ys for Parent Min-18yrs and Max 25 yrs for child Minimum Rs. 10000/-

Minimum Rs 6000

6 Annual Premium

Minimum 7 and Max Sum Assured

Term/2 x A.P. Min Rs.1 lac

Min Rs 36000. Max One Crore. For each policy term there is Low and High SA to choose ranging from 6 to 21 times of A.P.
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Min 5 x A.P. Max 40 x A.P.

Premium Payment 8 Frequency

Yly, Hly, Qly, or Mly. For Mly only Direct Debit or ECS allowed. 1BR, ADBR & WOPR sub to charges

Yly, Hly, Qly or Yly, Hly, Qly, or Mly Mly. For Mly, only Direct Debit or ECS allowed. No Rider Benefit available under the scheme As per the benecit type chosen

Riders 9

Top Up Premiums

Not available

Top ups allowed. Minimum Rs 1500/- The Total Top up premium should not exceed 25 % of the total Regular Allowed. Minimum Top Premium paid up is Rs.5000/till date. Units purchased from Top up Premium would also be allocated to the respective funds selected for regular premium.

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Death Benefit

In the event of unfortunate Death of Parent, during the term of Policy. (a) SA is paid immediately (b) Future payment of premiums waived till the maturity of policy (c) The Policy Benefits continue for the child as planned

In the event of death during the term, the SA plus fund value of Regular Premiums payable. The value of Top up premiums if any would also be paid

SA is paid to the Beneficiary child. Policy will continue and the Co will, pay future premiums, until the chosen period. Any C.I cover, terminates immediately. Child is the Beneficiary. If the child is minor, the amount will be paid to the appointee

Maturity Benefit

Fund value ( Regular The Fund Value of Premiums ) in units on the date of Lumpsum will maturity. be paid and Alternatively terminate the settlement options policy or opt for to receive the receiving the amount in value in full or instalments part of the same available. in instalments as per settlement options.

Fund value ( Regular Premiums ) in Lumpsum will be paid and terminate the policy or opt for receiving the value in full or part of the same in instalments as per settlement options.

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ANALYSIS

The analysis of private life insurance schemes has been done on the basis of a survey done over 50 persons. Their responses serve as a base for the analysis. Following are the results of the survey: POLICIES No. of persons

ICICI Prudential Life Insurance Bajaj Allianz Life HDFC Standard Life SBI Life Insurance
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-------------

5 2 4 4

 Life Insurance Corporation Of India Aviva Life Insurance

-------

25 3 7

Reliance Life Insurance Company Limited ----

INVESTOR PERCEPTION TOWARDS INSURANCE SCHEMES

30
PERCENTAGE

25 20 15 10 5 0
ICICI Prudential Life Insurance Bajaj Allianz HDFC Life Standard Life SBI Life Insurance Life Insurance Corporation Of India Aviva Life Insurance Reliance Life Insurance Company Limited

SCHEMES

Figure 2

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ICICI Prudential Life Insurance Bajaj Allianz Life HDFC Standard Life SBI Life Insurance Life Insurance Corporation Of India Aviva Life Insurance Reliance Life Insurance Company Limited

Figure 3

CONCLUSIONS

From all the analysis done, the result comes out to be in favor of Life Insurance Corporation of India. People are having a mindset for L.I.C. Before 2000 LIC was only the single player in the market. As people are still having a mind set for LIC, This fact has been proved from the survey done. The returns that come from the life insurance schemes are much better than that from private life insurance schemes. The rebate in each of the private life insurance schemes is also much more as compared to it.
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APPENDICES QUESTIONNAIRE
1.
Do you have any insurance policy? Yes No

2.

Who is your insurer or who would you like to be your insurer? LIC Private insurance co. Both None

If private co. (please specify):______________________________

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3.

Who is your agent/advisor if insured? Professional Friend/Relative Others

4.

Are you satisfied with the services of your insurance co. (if insured)?

Satisfied

Neutral

Dissatisfied

5.

Are you in favor of privatization of insurance companies in India? Yes No

6.

How would you rate private insurance companies in comparison to LIC?

Excellent

Good

Fair

Poor insurance policy?

7.

What was or will be the purpose of you behind taking an Economic security Investment Pension benefits Tax saving

8.

Please tick the policies to which you are familiar?

Term assurance plans

Money back policies ULIP

Endowment policies Pension schemes Children policies

9.

How much of your income would you like to invest in insurance annually?

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Rs. 1000-5000 Rs. 1100-20000

Rs.6000-10000 Rs. 20000 & above

10.Are you aware with IRDA & its role in insurance sector?
Yes No

11. Are you aware of new health insurance policies?

Yes No

12. Given a choice you would prefer to invest in: (only tick your first preference) Bank (fixed deposits) Post office NSC Stock Mutual funds Insurance

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REFERENCES

www.tata-aig.com www.hdfcinsurance.com www.karvy.com www.sbilife.co.in www.iciciprulife.com www.licindia.com www.avivaindia.com www.bimaonline.com

KARVY Finapolis Magazine

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