A

Project Study Report

ON
Training undertaken at
ICICI PRUDENTIAL LIFE INSURANCE COMPANY LTD.
JAIPUR

MARKET SURVEY AND CREATING AWARENESS OF THE

PENSION PLANS OF ICICI PRUDENTIAL LIFE INSURANCE
COMPANY.
Submitted to RTU, Kota in partial fulfillment for
the Award of degree of
MASTER OF BUSINESS ADMINISTRATION

Submitted To:
Aditi kaushik

Submitted by:
Priyanka Sharma
MBA Part-III

Apex Institute of Management & Science, Jaipur

(Approved by AICTE, New Delhi & Affiliated to University
of Rajasthan, Jaipur)

(2012-2013)
PREFACE:
For a management student theoretical knowledge as well as
practical orientation expose oneself to experiences, one can again by
mastering it is best possible time. MBA curriculum has been fine
tuned in such a way that a student not apply the theoretical
knowledge but also gain in a practical sense. Thus objectives can be
attained through application of theory tools concepts and techniques
of Management.
Balanced theoretical and practical knowledge are essential for
every student and MBA curriculum is conceived in such a way so as
to facilitate practical purpose.
To procure this objective the researcher undertook the project
Market Survey and Creating Awareness of the Pension Plans of
ICICI Prudential Life Insurance Company in Jaipur city, Jaipur.
Researcher collected primary data from market survey in Jaipur with
help of Questionnaire. Secondary data were collected from websites
and journal of ICICI Prudential.
Researcher has tired to satisfy the topic of report by help of facts and
finding.

PRIYANKA SHARMA
ACKNOWLEDGEMENT:
It gives the researcher immense pleasure to present the project on
MARKET SURVEY AND CREATING AWARENESS OF THE
PENSION PLANS OF ICICI PRUDENTIAL LIFE INSURANCE
COMPANY. It was a totally different and wonderful experience to
be there in ICICI Prudential Company as a summer trainee. The
researcher expresses his sincere gratitude to Mr. SHIVENDRA
SINGH RATHORE(Area Manager), who as his projects guide has
been so co-operatives and helpful from the training till its end. He
helped him a lot in enhancing his knowledge about the
technicalities of Insurances sector. He is highly thankful to him for
providing him constant support and encouragement throughout the
project. He is also thankful to his team members for giving him the
live experience of market and customers. He is also thankful to all
of the employees of ICICI Prudential Life Insurances for being so
friendly and supportive throughout his training The researcher
would also take the opportunity to thank his faculty guide,
Mrs. Aditi Kaushik for providing her the right direction from time
to time.
Last but not the least he would extend his heartiest gratitude to his
parents whose blessings were helpful for completing this project.

PRIYANKA SHARMA
3

CONTENTS

Page No.

1. INTRODUCTION TO THE INDUSTRY

5-8

2. INTRODUCTION TO THE ORGANIZATION

3. PROJECT PROFILE

10-12

Objective of the study

Scope of the study
Limitations of the study

10
10

Significance of study
Research Methodology

10

10

11

4.

Introduction to psychometric test

INTRODUCTION TO THE STUDY
Requirement for pension plan
ICICI Prudential Retirement Solution
Description about Regular Premium Deferred
Pension Plans
Forever Life Pension Plan
Options with ICICI PRU. Retirement Solution
Comparison of Pension Plan

12
13-28
13
14
21
24
25
28-32

5.

FACTS & FINDINGS

33-46

6.

CONCLUSION

47

7.

RECOMMENDATIONS AND SUGGESTIONS

48

8.

APPENDIX

49-52

9.

BIBLIOGRAPHY

53

1. INTRODUCTION TO THE INDUSTRY:

ICICI Prudential Life Insurance is a joint venture between the industrial
credit and investment corporation of India (ICICI) and Prudential, of U.K. started
off its operation in 1955 with providing Finance for industrial development, and
since then it has been diversified into housing finance, consumer finance and
mutual funds to being a Virtual Universal Bank and its latest venture in Life
Insurance.
ICICI Prudential was amongst the first private sector insurance companies to
begin operations in December 2000 after receiving approval from Insurance
Regulatory Development Authority (IRDA) .The Company issued its first policy on
December 12, 2000. ICICI Prudentials equity base stands at Rs 1335 crore with
ICICI bank and Prudential Plc holding 74% and 26% stake respectively. For the
year ended March 31, 2007, the company garnered Rs 2,412 crore of weighted
new business premiums and wrote 8, 37,963 policies.
ICICI Prudential is the only one life insurer in India to receive a National Insurer
Financial Strengths rating AAA (Ind) from Fitch ratings. The AAA rating is the
highest rating, and is a clear assurance of ICICI Prudentials ability to meet its
obligations to customers at the time of maturity or claims. For the past 5 years
ICICI Pru. Has retained its position at the no. 1 private life insurer in the country
with a wide range of flexible products that meet the needs of the Indian
customers at every step in life.

Market Share of 1st year premium of various life insurers

(May 06):

Figure 1 Market Share of 1st year premium of various life insurers

As above figure depicting that 71% of the 1st year premium paid to LIC & only
29% has been paid to others.

Break up of others:

Figure 2 Break up of others

[Source: Escolife, August 2007]

I. Promoters:
ICICI Bank(NYSE:IBN) is Indias second largest bank & largest private sector
bank with assets of Rs 2823.72 billion as on September 30,2007. ICICI Bank
provides a broad spectrum of financial services to individuals & companies.
This includes mortgages, car & personal loans, credit & debit cards, corporate &
agricultural finance. The bank service are provided through the wide network
which include over 635 branches &

Extension counters, 2325 ATMs, Call

centers & Internet banking.

II. Prudential plc:

Established in London in 1848, Prudentials plc, through its businesses in the UK
and Europe, the US and Asia, provides retail financial services products and
services to more than 16 million customers , policyholders and unit holders
worldwide. As of June 30, 2007, the company over 234 billion in funds under
management. Prudential has brought to market an integrated range of financial
services products that now includes life insurance, pensions, mutual funds,
banking, investment management and general insurance. In Asia, prudential is
the leading European life insurance company with a vast network of 24 life and
mutual fund operations in twelve countries China, Hong Kong, India, Indonesia,
Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and
Vietnam.

2. INTRODUCTION TO THE H.R. OF THE COMPANY

Ms. Shikha Sharma

Mr. N.S. Kannan
Mr. Bhargav Dasgupta
Ms. Anita Pal

Managing Director& C.E.O.

Executive Director
Executive Director
Chief IT, customer care
services, & Operations
Chief Actuary
Chief investment officer
Chief Sales & Distribution

Mr. Azim Mithani

Mr. Puneet Nanda
Mr. Binayak Dutta
Table 1 Executives of the company

I. Distribution of ICICI Prudential in India :

ICICI Pru. Has one of the largest distribution networks amongst pvt. life insurers
in India with a network of over 120,000 advisors & having commenced operations
in 319 cities & towns in India , stretching from Bhuj in the west to Guwahati in the
east & Jammu in the north to Trivendram in the south.
The company has 18 bank assurance partners, having tie- ups with ICICI Bank,
Bank of India, Federal Bank, South India Bank, Lord Krishna Bank, all regional
rural banks, sponsored by Bank of India, as well as some co. operative banks, as
well as over 200 corporate agents and brokers. It has also tied up with NGOs,
MFIs, & corporate for distribution of rural policies

3. PROJECT PROFILE:
I. Objective of the study:
The present study is being undertaken with the following objectives in view.

To find out the market share of ICICI Prudential in pension plan.

To compute the market share of various company that offer pension plan.

II. Scope of study:

The research is pertained to the ICICI PRUDENTIAL it was conducted

during the period 15 June to 30 July. It was conducted with the help of
our training guide in JAIPUR city.

III. Limitations of the study:

The study has been taken in Jaipur and hence the results obtained may
Not be consistent with overall Indian scene.

Intercept interviews have the drawback of being non-probability samples

and the interviews must not require too much time from the interviewer.

IV. SIGNIFICANCE OF THE STUDY:

A. To The Researcher:

This study has provided the researcher a practical insight of various

activities and functions of the company.

Through the study the researcher also developed in depth knowledge of

the industry.

The study enabled the researcher to gain the practical

knowledge of the products of the companies.

10

The study has given a chance to use the conceptual knowledge in actual
environment and prepared the researcher to use the knowledge for her
future endeavors.

The study is also significant to the researcher for practical fulfillment of the
Master of Business Administration Degree.

B. To The Company:

The study will provide the base for further assessment and comparative
analysis of companys products.

The study would help the company to train the financial consultants to
convince the customer.

V. RESEARCH METHDOLOGY :
A. Data Source

: Primary data
.

B. Research Approach

: Survey

C. Research Instrument

: Questionnaire.

D. Sampling Plan

Sample Unit

: Consumers above age 18 years.

Sample Size

: consumers profile 150.

Sampling procedure

: Probability sample.
(Simple Random survey).

E. Contact Method

: personal interview

11

F. Area of Operation

: Jaipur

VI. Introduction to psychometric test:

A. Chi- square Test:
The chi- square test is one of the simplest and most widely used non
parametric
Tests in statistical work. The test was first used by Karl Pearson in the year 1900.
The test describes the magnitude of the discrepancy between theory and
Observation. As a non parametric test, it can be used to determine if categorical
Data shows dependency or the two classifications are independent. It can also
be
Used to make comparisons between theoretical populations and actual data
when
Categories are used. Thus, the chi-square test is applicable in large number of
Problems. The test is, in fact, a technique through the use of which it is possible
for all researchers to
(i) Test the goodness of fit;
(ii) Test the significance of association between two attributes; and
(iii) Test the homogeneity or the significance of population variance.

12

4.Introduction to the study :

I. Requirement for Pension plan :
Life expectancy has rising rapidly and today, we can expect to live much longer
than our earlier generation. For us, this increase will mean a longer retirement
life, stretching into a couple of decades. Therefore, it is more critical than ever to
plan adequately and wisely for those incremental retirement years, keeping in
mind that our expenses will spiral upward, our cost of living will increase, and
inflation will be
Ever present. Therefore, we need a plan that ensures safety, risk cover, income
security.
Life insurance plans aims at covering the risk from an unfortunate event. Pension
plans, on the other hand work on the opposite scenario that if an individual
survives beyond an age (retirement age) he will need to provide for himself.
ICICI Prudential life Insurance presents Retirement Solution that combines the
best of investment and insurance. These solutions are developed to ensure our
peace of mind for the years to come. Solutions that give us the power to maintain
our lifestyle needs, for as long as we live.

A. Power receive with Retirement Solution :

Power to choose the retirement date

Power to increase investment.

Power to choose the protection level.

Power to invest in a plan, based on priorities.

Power to receive pension in five different ways.

13

Power to choose annuity provider.

Power to add on flexible riders at a nominal extra premium.

II. ICICI PRUDENTIAL RETIRE MENT SOLUTIONS:

Fig

ICICI PRUDENTIAL
RETIREMENT SOLUTIONS

LIFE TIME
PENSION II

LIFE LINK
PENSION II

SECURE PLUS
PENSION

FOREEVER
LIFE

ure 3 ICICI Prudential's retirement solutions

I

A. Description about Unit Linked Pension plans :

LIFE TIME PENSION II

A Regular premium plan

LIFE LINK PENSION II

A Single premium plan

[a]. Benefits of Unit Linked Pension Plan:

A linked deferred pension plan gives us the freedom to choose the amount of
premium, and invest in market- linked funds, to generate potentially higher
returns. On the retirement date, the accumulation value of the units will be used
to purchase an annuity- to provide you with regular income for life.

14

a. Life Cover Benefit:

a). Life Time Pension

II :

In case of death before retirement, higher of the

Sum assured or the value of units will be the death benefit.

b). Life Link Pension

II :

In case of death before retirement, death benefit

will be the value of the units at the time of death.

b. Power to choose protection level:
a). Life Time Pension
Option 1:
Option 2:

II

: It provides two options of S.A. at inception

Zero S.A. and a pure accumulation product

S.A., which will be equal to the product of annual contribution and

term.
(However no charge in the S.A. will be allowed, once chosen, at the time of
inception of the policy)
b). Life Link Pension

II

: S.A. in this product is zero.

c. Power to choose the retirement date:

We can choose a vesting date once we are 45 years of age. However, we have
the option of postponing this vesting date until the age of 75 years. During this
postponement of the vesting age, we will be allowed to make top-up premium.
The postponement should however be 6 months before the original vesting date.

d. POWER TO INCREASE INVESTMENTS :

Use surplus fund to top-up investment during the deferment period. The
minimum top-up amount is Rs 5000.

15

e. POWER TO INVEST IN A PENSION PLAN, BASED ON

PRIORITIES:
a) Pension Maxi miser (Growth)

: If high growth is on priority, then

this is the plan to enjoy long term capital appreciation from a portfolio that
is invested primarily in equity and equity- related securities.
b) Pension Protector (Income)

: If our priority is steady returns,

then this plan can accumulate a steady income at a low risk across a
medium to long- term period.
c) Pension Balancer(Balanced)
and steady returns

: If we prefer a balance of growth

then this plan would ensure that our portfolio is

invested in equity and equity- linked securities as well as in fixed income

securities.
d) Pension Preserver (Short-term money market plan): The
objective of this plan is to attempt to ensure capital protection by investing
in very low- risk investment like the cash and call money market.
However, the returns generated may also be on the lower side due to the
investment pattern. At inception, investments up to 20% can be allocated
to this fund. Debt instruments (maximum 50%), Money Market, & cash
(minimum 50%).

16

ASSET ALLOCATION
FUND
Pension Maxi miser

ASSET MIX
Equity& Related

POTENTIAL RISK - REWARD

Securities: High

max100%
Debt, Money market& cash:
Pension Balancer

max25%
Debt,

Money

market& Average

cash:min60%
Equity&

Related

Pension protector

Securities:max40%
Debt instrument:max100%

moderate

Pension Preserver

Money market& cash:max25%

Debt instrument:max50%

Low

Money market& cash:50%

Table 2 Allocation of fund

[b] ENTRY CONDITIONS:

a). Life Time Pension II:

Age should be between 18 and 65 years in case of zero death benefit

option.
Else age should be between 18 and 60 years of age.

17

The minimum annual premium is Rs. 10,000; half yearly is Rs. 5000; and
monthly premium is Rs. 834.

Minimum term is 10 years.

b). Life Link Pension II:

Age should be between 18and 72 years of age.

Minimum premium in the plan is Rs. 50,000.

Minimum term is 3years.

[c] EXIT OPTIONS :

a). Life Time Pension II:

This plan will allow surrender after 1 years

premium is paid. These surrender values available as follows;

Before 1 years contribution is paid

After 1 years contribution is paid

Nil
25% of the value of investments

After 2 years contribution is paid

40% of the value of investments

After 3 years contribution is paid

60% of the value of investments

After 4years contribution is paid

100% of the value of investments

Table 3 Surrender values (Life Time Pension II)

b). Life Link Pension II: Surrender of the policy is possible any time after
the payment of the single premium. However, surrender values in the first 3
years will be as per the table below:

18

During the 1st policy year

During the 2

nd t

policy

95% of value of
investments
96% of value of

year
During the 3rd policy year

investments
97% of value of

During the 4th policy year

investments
100% of value of
investments

Table 4 Surrender values (Life Link Pension II)

[d] CHARGES ON POLICY :

a).LIFE TIME PENSION II:
Premium Allocation: The allocation of the contribution will depend on the annual
contribution made. The allocation will be as follows:
Allocation(Rs)
10,000- 49,999
50,000& above

Year 1
78%
83%

Year 2
85%
88%

Year 3-10
99%
99%

Thereafter
100%
100%

Table 5 Allocation of contribution(Life Time Pension II)

b). Life Link Pension II:

Premium Allocation: The Allocation of the contribution would depend on the first
contribution made. The Allocation will be as follows:

19

Allocation(Rs.)
50,000
100,000 499,999
500,000 and above

Year 1
95%
97%
98%

Table 6 Allocation of contribution(Life Link Pension II)

[e]. OTHER CHARGES :

a) Top up charges:

Top up charges will be the 1% of the top- up value.

After 10 years, the top- up allocation is 100%(For life time pension

b) Switching charges:

only)

Except for the 4 free switches allowed every policy

year, all other switches will be charged at Rs. 100 per switch.
c) Administration charges: A fixed charge of Rs. 20 per month will be levied
by cancellation of units.
d) Fund related charge:

The annual fund related charges for the various

funds will be as follows:

Fund Type
Maxi miser
Balancer
Protector
Preserver

Investment Charge
1.50%
1.00%
0.75%
0.75%

Table 7 Fund charges

(These charges will be adjusted from the Net Asset Values)

e). Mortality charges: Mortality charges will be deducted on monthly basis on
the calculation value of life cover. Life cover is the difference between the
S.A. at that time and the value of investments. These are renewable charges
depending upon the age of the policyholder, at the time of deduction of
mortality charges. Age- wise mortality rates are available in the mortality
Table.
Age At Entry

Mortality Charges( Per Rs 1000 sum at

30

risk)
1.44

20

40
50

2.39
5.59

Table 8 Mortality charges

III. Description about Regular premium deferred pension

plans :
A. SECURE PLUS PENSION: A flexible long term pension plan
(Regular Premium deferred pension plan)
[a] Benefits of plans:

a) Power to choose protection levels :

Secure plus pension provides us with three levels of S.A., for the same amount
of total annual contribution. We have the option of choosing between basic,
standard and Enhanced levels of cover.
How to calculate cover as per the term we have chosen
(Term-5)

* Premium

= Basic cover

(Term)
(Term + 5)

* Premium
* Premium

= Standard cover
= Enhanced cover

b) The Zero Death Benefit Option :

21

Secure plus Pension gives the opportunity to shift from one level of cover to
another as per the changing requirement. Once the person has decided to avail
of the Zero Death Benefit Option, the person does not get the option to alter their
cover again. In the unfortunate event of the death, their spouse is protected by a
lump sum amount, which is the sum assured plus the value accumulated in the
policy. Additionally, the spouse can exercise the option to draw a pension from
the accumulated amount.

c) Benefit at the end of the premium payment term :

The total accumulated value of the policy, including the declared bonuses, would
be used as a purchase price to give you a pension of your choice. You have the
option of taking up to 33.33% of the accumulated as a lump sum and begin a
pension from the rest of the amount.

d) Accumulation of funds in policy :

The invested premium and the declared bonus interest would be payable on
death (in case where death benefit option is chosen) or would be used as a
purchase price at the time of vesting. However, at the time of payment due to
death or at the time of vesting,
If the value of the individuals investment account is more than the invested
premium (along with the declared bonus interest) then the additional amount
would also be payable on death or would be used as a purchase price at the time
of vesting.

e) Power to choose the retirement date :

22

We can choose the vesting age between 50 and 75 years. We have the option to
postpone the vesting date from the originally chosen vesting date up to a
maximum of 75 years of age. This option can be exercised only once, 6 months
prior to vesting.

[b]. ENTRY CONDITIONS :

A. With life cover: Any person between 18 and 60 years of age can apply.
B. Without life cover (zero death benefit): Any person between 18 and 65
years of age can apply.
C. Min. term is 10 years.
D. Min. annual premium is Rs. 10,000; half yearly premium is Rs. 5,000;
and monthly premium is Rs 834.

[c]. EXIT OPTION :

Secure plus pension acquires a surrender value after premium for three policy
years are fully paid. The surrender values can be classified under two
categories:
(a) guaranteed, (b) Non- guaranteed

Guaranteed surrender value will be 35% of all premiums paid

excluding the first year premium and all extra premium and
premium for rider benefits

On request, the company may provide non guaranteed surrender

values as specified from time to time.

The insurance protection ceases on surrender of the policy.

IV. FOREVER LIFE PENSION PLAN :

(Regular premium deferred pension plan)
23

[I] Benefits of plans :

a) Life covers benefits :
Forever life pension plan provides life cover during the deferment phase. In the
unfortunate event of ones death, the spouse has the option to receive the S.A.
with guaranteed additions and vested bonuses (if any) as a lump sum or get an
annuity that would provide a regular income for life.

b) Power to choose retirement date :

we can choose the vesting age between 50 to 70 years. You have the flexibility to
postpone the vesting from the originally chosen vesting date up to a maximum of
70 years of age.

[II]. ENTRY CONDITIONS :

Age should be between 20 and 60 years.

Min. S.A. is Rs 50,000.

Min. term is 5 years and the maximum is 30 years.

Min. premium is Rs 6,000.

[III]. EXIT OPTION :

Forever life pension plan acquires a surrender value after premiums for 3
policy years are fully paid. A surrender value is payable if one wish to
withdraw after 3 years.

V.

OPTIONS

WITH

ICICI

SOLUTION :

24

PRU.

RETIREMENT

[A]. how does the annuity work? :

The accumulated value would start paying regular income in the form
of an annuity, at a frequency chosen by client. This income can be
received monthly, quarterly, half yearly or annually.

On vesting, we have the option to take up to one third of the units as a

lump sum and the balance in the form of an annuity.

There is a option of selecting a guaranteed annuity rate period of either

5 or 7years.

The amount of annuity is fixed for a guaranteed annuity rate period(5

or 7 years) and will be re-calculated at intervals of every guaranteed
period , based on the then prevailing annuity rates.

On commencement, and the end of every guaranteed period

the

amount of annuity payable for the next guaranteed period of years and
the residual purchase price, on survival, will be guaranteed

Once the policy holder is 75 years of age, the annuity will be fixed for
life and not reviewed thereafter.

At the time of reset of the annuity, we have an option , which would

enable us to get our annuity from any other annuity provider. However,
there will be a charge of 1% of the residual purchase price.

[B]. POWER TO RECEIVE PENSION IN FIVE DIFFERENT WAYS :

25

a). Life annuity: annuity for life

b). Life annuity with return of purchase price: Life annuity for the annuitant with
the return of the purchase price to the beneficiary.
c). Life annuity guaranteed for 5, 10, and 15 years: Guaranteed annuity is paid
for the chosen term (5, 10, 15 years) and after that, the annuity continues as long
as the annuitant is alive.
d). Joint life, last survivor with return of purchase price: In this case, the annuity
is first paid to the annuitant. After the death of the annuitant, the spouse starts
getting a pension, which is an amount that is equal to the annuity paid to the
annuitant. After the death of the last survivor, the purchase price is returned to
the beneficiary.
e). Joint life, last survivor without return of purchase price: In this case, the
annuity is first paid to the annuitant. After the death of the annuitant, the spouse
starts getting a pension, which is an amount that is equal to the annuity paid to
the annuitant.

[C]. POWER TO CHOOSE ANNUITY PROVIDER :

This option offers the flexibility to buy a pension from any other insurer of the
choice, at the time of vesting. Thus, the person has the freedom to take the best
offer available in the market.

[D]. POWER TO ADD-ON FLEXIBILITY RIDERS AT A NOMINAL

EXTRA PREMIUM :
a). Critical Illness Rider (Available with forever life) :
In the event of the life assured contracting a critical illness, an additional payment
equivalent to the life assured under the rider would be made. The cover would be
available up to a maximum of 65 years of age .

b). Critical Illness Rider (Available with Secure plus pension) :

26

In the event of the life assured contracting critical illness, the S.A. under the rider
will be payable and the life cover will come to an end. However, the accumulation
policy value continues and will be paid on maturity or death, whichever is earlier.

c). Major Surgical Rider (Available with forever life and Secure plus
pension) :
It offers cover against major surgical procedures. Depending on the surgery,
50%, 30% or 20% of the S.A. under the rider will be paid.
d). Accidents and Disability Rider (Available with forever life, Secure

plus pension & Life time pension) :

It offers cover against Accident and Disability. In the event of death due to an
accident, the nominee gets an additional S.A. under the rider.
(i) In case of accidental death while traveling by mass transport,
The nominee will get twice the S.A. under this rider.
(ii)In the event of total and permanent disability due to an accident, which impairs
ones capacity to earn, 10% of S.A. is paid every for 10 years.

e). Accident Benefit Rider (Available with life Time pension & Secure
plus pension) :
On death of the life assured due to an accident, the nominee gets an additional
S.A. under the rider.
f). Waiver of premium rider (Available with Secure plus pension and

Life Time Pension) :

In case of total and permanent disability due to accident, the rider would waive
future Premium until maturity.

VI. Comparison of pension plan :

27

[I]. LIFE TIME PENSION II VS LIC FUTURE PLUS :

Features
Age
Term
S.A.

Survival benefit
Commutation

Death Benefit

Contribution
Flexible Contribution

Increase/ Decrease of
death benefit

Life Time Pension

18-60 years(65 yrs for a
zero benefit option)
10-30 years
Default sum assured is
zero. However, the
policyholder can also opt
for a S.A.,which would be
a flat amount calculated
as- annual contribution
term, with the minimum
S. A. being Rs.
1Lakh.However, no
change in the S. A. will
be allowed once chosen
at the time of inception
of the policy.
Unit value is used to
purchase an annuity
33.33 % of the unit value
can be commuted and
the rest can be used to
purchase an annuity
Value of units in case the
S.A. is zero. In case a
S.A. is chosen ,it will be
higher of the S.A. or
value of units
Minimum Rs.10,000p.a.
Increase or decrease in
contribution is permitted.
Maximum decrease can
be up to 20% of the initial
contribution but not below
Rs.10, 000 or 80% of the
initial chosen premium,
whichever is higher.
Not available

28

LIC Future plus

18-65 yrs
Minimum 5 years
Minimum S. A. of Rs.
25,000 under single
premium plans and
Rs.50, 000 under regular
premium plans .In case
of single premium plans,
it is up to and equal to
the single premium, it is
5-20 times of the
annualized premium.

Unit value is used to

purchase an annuity
33.33% of the unit value
can be commuted and
the rest can be used to
purchase an annuity.
Value of units in case the
S.A. is zero. In case a
S.A. assured is chosen, it
will be higher of the S.A.
or value of units.
Minimum Rs.5,000p.a.
Not available

Decrease in death benefit

is available.

Surrender value

Surrender is available
from the 1st year
onwards. The surrender
value is as after the 1st
year premium: 25% of
the unit value. After the
3rd year premium: 60% of
the unit value. after the
4th year premium is paid:
100%

Surrender is available
from the 1st year itself.
Before 1st years premium
is paid: 40% of the fund
value; before 2nd years
premium is paid: 60% of
the fund value; post the
2nd years premium has
been paid: 100%of the
unit value.

Top- up

Available with a min. topup of Rs 5000

Min. Vesting age is 45
yrs.vesting age can be
postponed to 75 yrs
4 free switches every
year with the min. switch
being Rs 10,000. All extra
switches will be charged
at actual costs.
Annual investment
charges of 1.5% on maxi
miser, 1% on balancer,
and 0.75% on protector
and preserver.
Not available

Available, with a min. topup of Rs 1000

Min. Vesting age is 40
yrs.Vesting age can be
postponed to 75 yrs
4 free switches every
year.
All extra switches will be
charged at Rs 100 per
switch
Annual investment
charge of 1% on bond &
income fund, 1.25% on
balancer,&1.50% & on
growth
Charges and deduction,
will have a guarantee
min. growth rate of 3%
p.a. compound in yearly,
provided the min. policy
term is 10 yrs and the
policy is held till the
vesting date without
switching to any other
fund in between and all
premiums under the
policy are duly paid in
time. The guarantee will
not apply to top-up.
Payment of premium for
3 yrs, the customer has
the option to discontinue
the premiums without any
effect on the sum

Vesting age
Switch

Fund management
charges

Guarantee

Automatic cover
continuance

Not available

29

Choice of annuity
Admin charge

5 annuity options
Admin charge of Rs 20
per month

Investment option

Pension
Protector(income)
Pension
Balancer(Balanced)
Pension Maxi miser
(growth)
And pension preserver.
ADBR & WOP

Rider

assured.
Not Specified
S.A. under the basics
plan, if any, subject to a
max. Rs 1000 in each of
the first 2 yrs.
Income fund, balanced
fund, growth fund.

Not available

Table 9 Life Time Pension VS LlC Future Plus

[II]. LIFE TIME PENSION II VS HDFC UNIT LINKED :

Features
Age
Term
S.A.

Survival benefit
Commutation

LIFE TIME PENSION II

18-60 years(65 yrs for
zero death benefit option)
10- 30 yrs
Default S.A. is zero.
However, the policyholder
can also opt for a S.A.,
which would be a flat
amount calculated as
annual contribution term
with the min. As being Rs
1 lakh.however, no
change in the sum
assured will be allowed
once chosen at the time of
inception of the policy.
Unit value is used to
purchase an annuity

HDFC UNIT LINKED

18-65 years

33% of the value can be

commuted and the rest
can be used to purchase
an annuity

Not specified

30

10-40 yrs
Zero life cover. No sum
assured. A cash benefit of
Rs1000 is available on
death.

Unit value is used to

purchase an annuity

Death benefit

Value of unit in case the

sum assured is zero. in
case a sum assured is
chosen, it will be higher of
the sum assured or value
of unit

Value of unit cash lump

sum of Rs1000

Contribution
Flexible Contribution

Minimum Rs10,000p.a.
Increase or decrease in
contribution is permitted.
Max. Decrease can be up
to 20% of the initial
contribution but below
Rs10000 or 80% of the
initial chosen premium,
whichever is higher. No
cap on increasing the
contribution

Min. Rs. 10,000 p.a.

Available.Reguler
premium can be
decreased any time.
These premium can be
decreased any time too,
provided 3years regular
premium have been paid
and the monetary value of
all unit is at least Rs15000

Investment options

Pension
protector(income),pension
balance(balanced),pension
maxi miser(growth )and
pension preserver

Liquid, defensive
managed, secure
managed, balance
managed.

Surrender value

Surrender is available from

the 1ST year onward. The
surrender value is as: After
the 1ST year premium: 25%
of the unit value. After the
2nd year premium: 40% of
the unit value. After the 3rd
year premium: 60% of the
unit value. After the 4th
year premium is
paid:100%

No surrender charges
after 3 policy year. On
cancellation or surrender
of the policy before 3year
premium have been paid;
there will be a charge of
20% on the outstanding
regular premium.

Increase/Decease of
death benefit

Not available

Not available

31

Choice of annuity

5 annuity option

No defined annuity
structure available

Top-up

Available with a minimum

top-up of Rs5000

Available with a minimum

top-up of Rs5000

Vesting age

Minimum vesting age is

45YR vesting age can be
postponed to 75 yrs.

Not specified

Switch

4 free switching every yr.

With the minimum switch
being Rs10000.all extra
switch will be charged at
actual costs.

Available, No charges

Admin charge

Admin charge of Rs20per

month

A flat fee of Rs15per

month will be deducted

Fund management
charge

Annual investment
charges of 1.5% on
maximiser,1% on balance,
and 0.75% on protector
and preserver.
Allocation of premium

Fund management
charge of 0.8% of the
fund value pa.

Initial charge

charges

Rs 10000-Rs49999:1st yr
22% of the initial premium
-78% 2nd yr-85%,3rd -10th yr for the first 2yr and 1%
-99% 11th yr onward-100%. from the 3rd yr onward.

Rider

ADBR & WOP

Table 10 Life Time Pension II VS HDFC Unit linked

32

Not available

5. Figures & findings:

I. Psychometric test :

COMPANY
ICICI PRU
HDFC
LIC
SBI
OTHERS
TOTAL

PVT.
8
1
4
5
6
24

OCCUPATION
GOVT.
3
0
0
0
0
3

BUSINESS
5
0
1
1
1
8

TOTAL
16
1
5
6
7
35

Table 11 Chi Square

NULL HYPOTHESIS:
Occupation does not play an important role in making decision to purchase a
particular companys pension plan

O
8
1
4
5
6
3
0
0
0
0
5
0
1
1
1
Total

E
10.97
00.68
03.43
04.11
04.80
01.37
00.086
00.43
00.51
00.60
03.66
00.23
01.14
01.37
01.60

(O-E)2
8.8209
0.1024
0.3249
0.7921
1.4400
2.6600
0.0074
0.1849
0.2601
0.3600
1.7956
0.0529
0.0196
0.1369
0.3600

Table 12 Expected & Observed Frequencies

33

(O-E)2/ E
0.80
0.15
0.095
0.193
0.3
1.94
0.086
0.43
0.51
0.60
0.50
0.23
0.017
0.099
0.225
6.175

[O= Observed frequencies, E= Expected Frequencies]

Chi Square= (O-E) 2/E
= 6.175
= (r-1) (c-1)
= (5-1) (4-1)
= (4*3)
= 12
[ = degree of freedom, r = no. of rows, c= no. of columns]

The table value of chi-square for 12 degree of freedom at 5% level of significance

is 21.026 the table value is greater than the chi square thus the hypothesis is
rejected i.e.
Occupation plays an important role in making decision to purchase a particular
companys pension plan.

34

II. Finding the questions :

A. Occupation:

Occupation
Private
Government
Business

No. of
respondents
24
3
8

% of
respondents
68%
9%
23%

Table13 Occupation of respondents

Figure 4 Occupation of respondents

Most of the respondents were working with private companies (68%), 23% of the
respondents were running their own business, rest of the respondents were govt.
employees.

35

B. ANNUAL INCOME :

Annual income

o-60,000
60,000-1,50,000
1,50,000-2,50,000
2,50,000-5,00,000
Above 5,00,000

4(11%)
12(34%)
8(23%)
9(26%)
2(6%)

Table14 Annual Income of respondents

Figure 5 Annual Income of respondents

Most of the respondents were from the income group of 60,000-1, 50,000.

36

C. Responses about Pension Plan :

No. of sampling
No. of persons having
pension plan
No. of persons without
having pension plan

150
35

(23%)

115

(77%)

Table 15 pension plan holders (out of respondents)

Figure 6 Market Shares of pension plan(according to the respondents)

Out of 150 respondents, only 23% of respondents who were insured with pension
plans i.e. still there is good market remaining for pension plan.

37

D.

Why Respondents Prefer Pension Plan? :

Tax benefit
Life saving
Social wealth

19
11
5

55%
31%
14%

Table 16 reasons for preferring pension plan

Figure 7 reasons for preferring pension plan

55% of the respondents opting for pension plan to take advantage of tax saving.

38

E. Amount of yearly premium :

0-10,000
10,000-25,000
25,000-40,000
Above 40,000

28
2
0
14

80%
6%
0
14%

Table17 Amount of yearly premium of respondents

Figure 8 Annual Premium

Most of the respondents are paying premium up to 10,000. Only 14%

respondents are paying more than 40,000.

39

F. No of Respondents of various companies pension plan :

COMPANY
No. of
persons
No. of
persons in
%

ICICI PRU
16

HDFC
1

LIC
5

SBI
6

OTHERS
7

46

14

17

20

Table 18 No. of respondents of various companies

Figure 9 No. of respondents of various companies

Market share of ICICI Prudentials pension plan is higher than other companies
although LIC is the major competitor of ICICI Pru.(this study may not be
acceptable for other parts of the country except Jaipur. )

40

G. First Preference of respondents :

Benefits
Flexibility
Less premium
Tax benefit
Returns
Saving

No. of respondents
4
2
2
5
3

Table 19 first preference of respondents

Figure 10 Preference of respondents

Most of the respondents first preference were high other thing which they prefer
is flexibility.

41

H. Reason for opting ICICI Prudentials Pension Plan :

Reasons
Easy Approach
Riders Availability
Companys Image

No. of
respondents
5
7
4

% of respondents
31%
44%
25%

Table 20 reasons for opting ICICI prus plan

8
7
6
5
4
3
2
1
0
Easy Approach

Riders Availability Companys Image

Figure 11 Reasons for opting ICICI Prus pension plan

Riders availability attracts customers towards ICICI Prus pension plan as

above table & figure is illustrating.

42

I. No. of Respondents having other Insurance plans of ICICI

Prudential :

No. of
respondents

%of
respondents

Yes

37

25%

No

113

75

Response

Table 21 No. of respondents having other plans of ICICI pru

Figure 12 No. of respondents having other plans of ICICI pru

Out of 150 only 37 respondents were insured by ICICI Prudential.

43

J. Responses towards channels which give information about

Insurance plans :

Mediums

No. of
respondents

% of respondents

Advisor
Tele caller
Newspaper
Advertisements
Others

25
45
30
18
32

17%
30%
20%
12%
21%

Table 22 channels

Figure 13 channels

According to the most of the respondents telecaller were the medium

through which they came to know about the insurance plans.

44

K. GENDER GROUP :

Gender
Male
Female

No. of pension plan

holder
31(89%)
4(11%)

Table 23 Gender group of respondents

Figure 14 Gender group of respondents

Percentage of male pension plan holder is greater than female pension plan
holder.

45

L . AGE GROUP :
Age group
18-25
25-40
40-50
Above 50

No. of respondents

% of respondents

9
18
5
3

26%
51%
14%
9%

Table 24 Age group of respondents

Figure 15 Age group of respondents

Most of the respondents were from the age group 25-40.

46

6. Conclusion :
The project was of great experience. It gave the opportunity to come out of the
books and face the challenge of the. It was really a great experience to carry out
a survey, which gave the opportunity to meet people.
The survey revealed that pension plans do not have awareness among the
people and people do not see the pension plans as an investment. Those people
who were told the advantage of pension plans have started showing great
interest. Most people were influenced most by the idea of social security and tax
saving benefit.
IT is also noticed that brand image has a very big impact on the customers mind.
The foreign companies have not been able to make a considerable mark and
gain the confidence of people. People have more confidence in similar products
from SBI and LIC but the situation is charging slowly and people are considering
pension plans from companies like ICICI and HDFC.
In a survey conducted randomly over 150 people, it is observed that only 24%
people have a pension plan and people working in private companies are
showing great interest in ICICI Prudential pension plans.
It can be concluded that a lot has to be done in building a brand image and
create awareness among the people about the pension plans. There is a
potential market for pension plans and private companies can do a lot but the
competition is also growing simultaneous.

47

7. Recommendations and SUGGESTIONS :

ICICI Prudential is one of the most trusted name in pension plans. The working
culture and environment is world class but the organization still needs some
improvement as I observed few shortcomings in some areas. The followings are
the suggestions from my side to reduce the shortcomings and to improve in
certain areas.
1. Around (20%) market is captured which is very low for a product like
pension plans.
2. People are not aware about the pension plans.
3. Lack of advertisement. Company focuses more on life insurance products
and pension plans are not advertised separately or with the same interest
which could be the possible reason for lack of awareness among masses.
4. Earlier people were opting for pension plans for possibly two strong
reasons namely social security and tax benefits. Now the govt. of India
revised the rules for tax saving options available with pension plans.
People are finding options available with insurance products better.
5. Pension plans are needed to be revised according to the requirements of
the people & schemes should be attractive and should offer benefits
comparable with other products.
6. Considering the benefits of the pension plans, the govt. of India should
take appropriate steps to encourage people to opt for pension plans.

48

8. APPENDIX :
QUESTIONNAIRE:
Please tick mark () in the square where necessary.
Name

Age

Address

Gender

Male

Female

(1) Occupation:
Private:
Government:
Business;
(2) Annual Income:
0-60,000
60,000-1,50,000
1,50,000-2,50,000
2,50,000-5,00,000
Above 5,00,000
(3) Do you have any pension plan?
Yes
No
(4) Why do you prefer pension plan?
Tax benefit
Life saving
Social
wealth

49

(5) Amount of your yearly premium:

0-10,000
10,000-25,000
25,000-40,000
Above 40,000

(6) Which of the following companys pension plan do you have?

ICICI PRUDENTIAL
HDFC
LIC
SBI
OTHERS
(7) Please give your preferences for purchasing ICICI Prudentials pension plan
Flexibility
Less Premium
Tax benefit
Returns
Savings
(8) Why do you prefer ICICI Prudentials pension plan?
Easy approach
Riders availability
Companys image

9) Do you have any other plan of the company (ICICI Prudential)?

Yes

No

(10) Which of the following medium gives you the information about ICICI Prus
Insurance plans?
Advisor
Tele caller
News paper
Advertisements
Others

50

Glossary :

Annuity
Age limits
Cancellation
Claim
Deferred Retirement
Disability
Fixed Annuity
Insured
Insurer

Liability
Paid up policy
Policy
Policy Term
Policy holder
Premium
Surrender value

A contract that provides an income for a specific

period of time such as a no. of years or for life.
Stipulated minimum & maximum ages below & above
which the company will not accept proposals or may
not renew policies.
This discontinuance of an insurance policy before its
normal expiration date, either by the insured or the
insurance company.
A request for payment of a loss which may not come
under the terms of an insurance contract.
When the employee works past normal retirement
age.
A condition that curtails to some degree a persons
ability to carry on his normal pursuits. A disability may
be partial or total, & temporary or permanent.
An annuity contract in which the insurance company
makes fixed (or guaranteed) payment to the annuitant.
A person or organization covered by an insurance
policy, & any other parties for whom protection is
provided under the policy terms.
The party to the insurance contract who provides to
pay losses or benefits. Also, any corporation engaged
primarily in the business of furnishing insurance to the
policy.
Any legally enforceable obligation.
Once the premium on a life insurance policy for a
specified period is paid in full, the policy may not lapse
even if no subsequent premiums are paid.
The legal document issued by the company to the
policy holder, which outlines the conditions & terms of
the insurance.
That period for which an insurance policy provides
coverage.
The person who pays a premium to an insurance
company in exchange for the insurance protection
provided by a policy of insurance
The sum paid by a policy holder to keep an insurance
policy in force. It is the amount paid to secure an
insurance policy.
The cash value payable by the insurer on termination

51

Termination of policy
Warranties

of the policy contract at the desire of the policy holder

before the expiry of policy term.
It is caused by the policy holders failure to pay the
premium within the stipulated period.
Warranties are expressly stated in the policy to ensure
that the insured shall not do a particular thing. They
protect insurers against any increase in the risk after
the issue of the policy. Whether or not breach of
warranty is material to the loss, the insurers have a
right to repudiate the loss.

52

9. Bibliography :

Kotler,Philip, Marketing Management, New Delhi, Prentice Hall

of India, 2000
Kotler,Philip, principles of Marketing, New Delhi, New Delhi,
Prentice Hall of India, 2000
Kothari, C.R. Research Methodology, New Delhi, New Age
International(P) Limited, Publishers, 2005
Kothari, C.R., Quantitative Techniques, New Delhi, Vikas
Publishing House Pvt. Ltd.,1978
Gupta, S.P., Statistics, New Delhi, Sultan Chand & Sons, 2002
ICICI Direct.com
ICICIPrulife.com
Escolife, Volume: 1, Issue: X, August 2007, p.16.

53