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INTRODUCTION

What is Insurance? Life insurance is a type of insurance where the insured transfers a risk to the insurer. The insured pays a premium and receives a policy in exchange. The risk assumed by the insurer is the risk of death of the insured. There are three parties in a life insurance transaction; the insurer, the insured, and the owner of the policy (policyholder), although the owner and the insured are often the same person. For example, if John Smith buys a policy on his own life, he is both the owner and the insured. But if Mary Smith, his wife, buys a policy on John's life, she is the owner and he is the insured. The owner of the policy is called the grantee (he or she will be the person who will pay for the policy). Another important person involved is the beneficiary. The beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured. The beneficiary is not a party to the policy, but is designated by the owner, who may change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable beneficiary, that beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of cash value. The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Insurance is a social device where uncertain risks of individuals may be combined in a group and thus made more certain small periodic contributions by the individuals provide a found out of which those who suffer losses may be reimbursed. In addition to being a means to protect oneself, the insurance Industry is an efficient conduit for the saving of people to be channeled towards economic growth. In India, the Insurance Industry7 is more than 150 years old. Today, it is monopolized by two PSU's in their respective fields of life and General Insurance. However, with the successful passage IRDA Bill through both houses of parliament in December 1999 the sector has been opened up to private players.

RESEARCH OBJECTIVES
The report gives the brief background of the sector and proceeds to highlight the short comings of the existing setup and players. The benefits of liberalized sector are enumerated. The report also tries to identify the market potential for insurance products and the strategy that can we employed to exploit the same. The stress is also given on knowing the awareness level of general public.

RESEARCH METHODOLOGY
To conduct the market research first of all it is necessary to create a research design. A research design is basically a blue print of how a research design is to be conducted. It may include: 1. Choosing the approach 2. Determining the types of data needed. 3. Locating the source of data. 4. Choosing a method of data.

RESEARCH DESIGN
Basically, there are 3 types of approaches which are used during the research: 1. Exploratory 2. Descriptive 3. Experimental.

During this research the explanatory and descriptive approaches are taken into consideration because of the availability of relevant information to describe the relationships between the marketing problem and available information.

TYPES OF DATA USED

Both primary and secondary data is used in the research.

Data Collection Methods:


To conduct the market research the data is collected by two sources.

SECONDARY DATA

Secondary data is one which already exists and is collected from the published sources. The sources from which secondary data was collected are: I.

INTERNAL SOURCES:
Newspapers and corporate Magazines like Economic Times, Insurance Times, and Insurance Post. Annual reports Company prospectus Company database

II.

EXTERNAL SOURCES:

Internet services

PRIMARY DATA
The primary sources of data refer to the first hand information. Primary data is collected during the survey with the help of Questionnaires.

INTRODUCTION OF THE COMPANY

LIFE INSURANCE CORPORATION OF INDIA (LIC)

HISTORY OF LIC
LIFE INSURANCE BUSINESS
The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. 107 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate office in the year 1956. Since life insurance contracts are long term contracts and during the currency of the policy it requires a variety of services need was felt in the later years to expand the operations and place a branch office at each district headquarter. Reorganization of LIC took place and large numbers of new branch offices were opened. As a result of re-organization servicing functions were transferred to the branches, and branches were made accounting units. It worked wonders with the performance of the corporation. It may be seen that from about 200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with re-organization happening in the early eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies. Today LIC functions with 2048 fully computerized branch offices, 109 divisional offices, 8 zonal offices, 992 satellite offices and the corporate office. LICs Wide Area Network covers 109 divisional offices and connects all the branches through a Metro Area Network. LIC has tied up with some Banks and Service providers to offer on-line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line Kiosks and IVRS, Info Centers have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of providing easy access to its policyholders. LIC has launched its SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the customer. The digitalized records of the satellite offices will facilitate anywhere servicing and many other conveniences in the future. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India ,Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance Corporation (International) E.C. Bahrain. The Corporation has registered a joint venture company in 26th December, 2000 in Katmandu, Nepal by the name of Life Insurance Corporation (Nepal) Limited in collaboration with Vishal Group Limited, a local industrial Group. An off-shore company L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap the African insurance market.

GENERAL INSURANCE
General insurance business in the country was nationalized with effect from 1st January, 1973 by the General Insurance Business (Nationalization) Act, 1972. More than 100 non-life insurance companies including branches of foreign companies operating within viz., the National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd., and The United India Insurance Company Ltd. with head offices at Calcutta, Bombay, New Delhi and Madras, respectively. General Insurance Corporation (GIC) which was the holding company of the four public sector general insurance companies has since been delinked from the later and has been approved as the "Indian Reinsurer" since 3rd November 2000. The share capital of GIC and that of the four companies are held by the Government of India. All the five entities are Government companies registered under the Companies Act, 1956. The general insurance business has grown in spread and volume after nationalization. The four companies have 2699 branch offices, 1360 divisional offices and 92 regional offices spread all over the country. GIC and its subsidiaries have representation either directly through branches or agencies in 16 countries and through associate locally incorporated subsidiary companies in 14 other countries. A wholly- owned subsidiary company of GIC, i.e. Indian International Pvt. Ltd. is operating in Singapore and there is a joint venture company, viz. Ken-India Assurance Ltd. in Kenya. A new wholly owned subsidiary called New India International Ltd., UK has also been registered. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1st January 1973.

OBJECTIVES OF LIC
Spread Life Insurance widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. Maximize mobilization of people's savings by making insurance-linked savings adequately attractive. 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; the funds to be deployed to the best advantage of the investors as well as the community as a whole, keeping in view national priorities and obligations of attractive return Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders. Act as trustees of the insured public in their individual and collective capacities. Meet the various life insurance needs of the community that would arise in the changing social and economic environment. Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. Promote amongst all agents and employees of the Corporation a sense of participation, pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective.

VISION AND MISSION


Mission "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns, and by rendering resources for economic development." Vision "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India."

ACHIEVMENTS AND AWARDS

CNBC Awaaz Consumer awards 2010

Reader Digest Trusted Brand Insurance category 2010

OUTLOOK MONEY -- NDTV PROFIT AWARD 2009 in " BEST LIFE INSURER CATEGORY "

World Brand Congress Award

Golden Peacock Innovative Product / Service ASIA PACIFIC HRM Congress, 2009 Award Award - 2009 for INNOVATIVE HR PRACTICES

Loyalty Award - 2009

NDTV Profit Business Leadership Award 2008

INDY's Silver Award for Best Corporate Film NASCOM IT USER Award 2008

Business Superbrand India 2009

ASIA BRAND CONGRESS BRAND LEADERSHIP AWARD, 2008

PRODUCTS OF LIC
INSURANCE PLANS
As individuals it is inherent to differ. Each individual insurance needs and requirements are different from that of the others. LICs Insurance Plans are policies that talk to you individually and give you the most suitable options that can fit your requirement. CHILDREN PLANS Jeevan Anurag Komal Jeevan Jeevan Chaaya Child Future Plan Child Fortune Plus Child Career Plan Jeevan Fortune Plus PLAN FOR HANDICAPPED DEPENDENTS Jeevan Adhar Jeevan Vishwas ENDOWMENT ASSURANCE PLANS Jeevan Anand Jeevan Amrit The Endowment Assurance Policy The Endowment Assurance Policy-limited payment Jeevan Mitra(double cover endowment plan) Jeevan Mitra(triple cover endowment plan) PLANS FOR HIGH WORTH INDIVIDUALS Jeevan Shree-I Jeevan Pramukh MONEY BACK PLANS The Money Back Policy- 20 years The Money Back Policy- 25 years Jeevan Surabhi-15 years Jeevan Surabhi-20years Jeevan Surabhi-25 years Bima Bachat

WHOLE LIFE PLANS The Whole life policy The Whole life policy-limited payment The Whole life policy-single premium Jeevan Anand TERMS ASSURANCE PLANS Two Year Temporary Assurance Policy The Convertible Term Assurance Policy Anmol Jeevan-I Amulya Jeevan-I

PENSION PLANS
Pension Plans are Individual Plans that gaze into your future and foresee financial stability during your old age. These policies are most suited for senior citizens and those planning a secure future, so that you never give up on the best things in life. PENSION PLANS Market Plus-I Jeevan Nidhi Jeevan Akshay-VI New Jeevan Dhara-I New Jeevan Suraksha-I

UNIT PLANS
Unit plans are investment plans for those who realize the worth of hard-earned money. These plans help you see your savings yield rich benefits and help you save tax even if you don't have consistent income. UNIT PLANS Market Plus-I Profit Plus Money Plus-I Child Fortune Plus Jeevan Saathi Plus

SPECIAL PLANS
LICs Special Plans are not plans but opportunities that knock on your door once in a lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness!

I. GOLDEN JUBLIEE PLAN New Bima Gold II. HEALTH PLAN Health Protection Plus III. SPECIAL PLAN Bima Niresh Jeevan Saral

MARKET PLUS-I
FEATURES
IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER This is a unit linked deferred pension plan. You can take the plan with or without life cover. You can also choose the level of cover within the limits, which will depend on whether the policy is a Single premium or Regular premium contract and on the level of premium you agree to pay. Four types of investment Funds are offered. Premiums paid after allocation charge will purchase units of the Fund type chosen. The Unit Fund is subject to various charges and value of units may increase or decrease, depending on the Net Asset Value (NAV).

1. Payment of Premiums:
You may pay premiums regularly at yearly, half-yearly or quarterly or monthly (through ECS mode only) intervals over the term of the policy. Alternatively, a Single premium can be paid.

2. Eligibility Conditions And Other Restrictions: For Basic Plan without Life Cover
a) Minimum Entry Age b) Maximum Entry Age - 18 years (last birthday) - Regular premium: 75 years (nearest birthday) Single premium: 80 years (nearest birthday)

c) Minimum Vesting Age - 40 years (completed) d) Maximum Vesting Age - 85 years (nearest birthday) e) Minimum Deferment Term - Regular premium: 10 years - Single premium: 5 years f) Sum Assured - NIL g) Minimum Premium - Regular premium (other than monthly (ECS) mode): Rs. [5,000] p.a. for deferment term 20 years and above Rs. [10,000] p.a. for deferment term 15 to 19 years Rs. [15,000] p.a. for deferment term 10 to 14 years Regular premium (for monthly (ECS) mode): Rs. [1,000] p.m. for deferment term 15 years and above Rs. [1,500] p.m. for deferment term 10 to 14 years Single premium: Rs. [30,000] for deferment term 5 years and above Annualized Premiums shall be payable in multiple of Rs. 1,000 for other than ECS monthly. For monthly (ECS), the premium shall in multiples of Rs. 250/-.

For Basic Plan with Life Cover


a) Minimum Age at entry -18 years (last birthday) b) Maximum Age at entry - 65 years (nearer birthday c) Minimum Age at vesting - 40 years (completed) d) Maximum Vesting Age - 75 years (nearest birthday) e) Minimum Deferment Term - Regular premium: 10 years Single premium: 5 years f) Minimum Premium - Regular premium: Rs. [5,000] p.a. for deferment term 20 years and above Rs. [10,000] p.a. for deferment term 15 to 19 years Rs. [15,000] p.a. for deferment term 10 to 14 years Regular premium (for monthly (ECS) mode): Rs. [1,000] p.m. for deferment term 15 years and above Rs. [1,500] p.m. for deferment term 10 to 14 years Single premium: Rs. [30,000] for deferment term 5 years and above g) Minimum Sum Assured h) Maximum Sum Assured Rs. 30,000

Single Premium : Equal to single premium Regular Premium :


If Critical Illness Benefit Rider is opted for: 10 times of the annualized premium if age at entry is upto 40 years. 5 times of the annualized premium if age at entry is 41 years and above. If Critical Illness Benefit Rider is not opted for: 20 times of the annualized premium if age at entry is upto 40 years. 10 times of the annualized premium if age at entry is 41 years and above. Where the minimum Sum Assured is not in the multiples of Rs. 5,000, it will be rounded off to the next multiple of Rs. 5,000. Annualized Premiums shall be payable in multiple of Rs. 1,000 for other than ECS monthly. For monthly (ECS), the premium shall in multiples of Rs. 250/-. 3. Other Features: i) Top-up (Additional Premium) : You can pay additional premium in multiples of Rs.1,000 without any limit at anytime during the term of policy. In case of yearly, half-yearly, quarterly or monthly (ECS) mode of premium payment such Top-up can be paid only if all premiums have been paid under the policy. ii) Switching: You can switch between any fund types during the policy term subject to switching charges, if any. iii) Increase / Decrease of risk covers: No increase of covers will be allowed under the plan. You can, however, decrease any or all of the risk covers within the specified limit once in a year during the Policy term, provided all due premiums under the Policy have been paid. The reduced levels of cover will be available within the limits specified in para 4 above. Further, once reduction in risk cover is allowed, the same cannot be subsequently increased/ restored. iv) Partial Withdrawal: No partial withdrawal of units will be allowed under this plan.

v) Discontinuance of premiums and revival:


If premiums are payable either yearly, half-yearly, quarterly or monthly (through ECS) and the same have not been paid within the days of grace, the Policy will lapse. A lapsed policy can be revived during the period of two years from the due date of first unpaid premium. I. Where atleast 3 years premiums have been paid, the Life cover, Accident Benefit and Critical Illness Benefit riders, if any, shall continue during the revival period.

During this period, the charges for Mortality, Accident Benefit and / or Critical Illness Benefit riders, if any, shall be taken, in addition to other charges, by cancelling an appropriate number of units out of the Policyholders Fund Value every month. This will continue to provide relevant risk covers: 1. for two years from the due date of first unpaid premium, or 2. till the date of vesting, or 3. till such period that the Policyholders Fund Value reduces to one annualized premium, whichever is earlier. The benefits payable under the policy in different contingencies during this period shall be as under: A. In case of Death: Life cover Sum Assured plus the Policyholders Fund Value, if life cover is opted for. If life cover is not opted for, then only the Policyholders Fund Value is payable. B. In case of Death due to accident: Accident Benefit Sum Assured in addition to the amount under A above, if Accident Benefit is opted for. C. In case of Critical Illness claim: Critical Illness Rider Sum Assured, if opted for. D. On vesting: The Policyholders Fund Value. E. In case of Surrender (including Compulsory Surrender): The Policyholders Fund Value. The Surrender value, however, shall be paid only after the completion of 3 policy years. II. Where the policy lapses without payment of at least 3 years premiums, the Life Cover, Accident Benefit and Critical Illness Benefit rider covers, if any, shall cease and no charges for these benefits shall be deducted. However deduction of all the other charges shall continue. The benefits under such a lapsed policy shall be payable as under: A. In case of Death: The Policyholders Fund Value. B. In case of death due to accident: Only, the amount as under F above. C. In case of Critical Illness claim: Nil D. In case of Surrender (including Compulsory Surrender): Policyholders Fund Value / monetary value as the case may be, shall be payable after the completion of

the third policy anniversary. No amount shall be payable within 3 years from the date of commencement of policy.

vi) Revival:
If due premium is not paid within the days of grace, the policy lapses. A lapsed policy can be revived during the period of two years from the due date of first unpaid premium or before vesting, whichever is earlier. The period during which the policy can be revived will be called Period of revival or revival period. If premiums have not been paid for at least 3 years, the policy may be revived within two years from the due date of first unpaid premium. If the life cover is opted for, the revival shall be made on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of all the arrears of premium without interest. If life cover is not opted for, the revival shall be made on the payment of all the arrears of If at least 3 years premiums have been paid and subsequent premiums are not duly paid, the policy may be revived within two years from the due date of first unpaid premium but before the date of vesting, if earlier. No proof of continued insurability is required and all arrears of premium without interest shall be required to be paid, irrespective of whether life cover is opted for or not. The Corporation reserves the right to accept the revival at its own terms or decline the revival of a lapsed policy. The revival of a lapsed policy shall take effect only after the same is approved by the Corporation and is specifically communicated in writing to the Policyholder. Irrespective of what is stated above, if less than 3 years premiums have been paid and the Policyholders Fund Value is not sufficient to recover the charges, the policy shall terminate and thereafter revival will not be entertained. If 3 years or more than 3 years premiums have been paid and the Policyholders Fund Value reduces to one annualized premium, the policy shall terminate and Policyholders Fund Value as on such date shall be refunded to the Life Assured and thereafter revival will not be allowed.

vii) Conversion to annuity at Vesting date:


On surviving to the date of vesting, the Policyholders Fund Value will compulsorily be utilised to provide an annuity based on the then prevailing immediate annuity rates under the relevant annuity option. An option will also be there to commute up to one-third of the Policyholders Fund Value at the time of vesting of the annuity, which shall be paid as a lump sum. In case commutation is opted for, the amount of annuity/pension available will be reduced proportionately. There will also be an option to purchase pension from any other life insurance company registered with IRDA subject to Regulatory provisions. If you opt to purchase pension from any other life insurance Company, you will have to inform it

to the Corporation six months prior to the vesting date. In such case, LIC will transfer the Policyholders Fund Value directly to the chosen Company. Notwithstanding the above mentioned, in case the amount at the vesting date is insufficient to purchase the minimum amount of annuity allowed by LIC, then the balance in the Policyholders Fund Value at the vesting date shall be refunded to the Policyholder. 4. Reinstatement: A policy once surrendered cannot be reinstated.

5. Risks borne by the Policyholder: 1. LICs Market Plus I is a Unit Linked Life Insurance product which is different from the traditional insurance products and is subject to the risk factors. 2. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. 3. Life Insurance Corporation of India is only the name of the Insurance Company and LICs Market Plus - I is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. 4. Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document of the insurer. 5. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. 6. All benefits under the policy are also subject to the Tax Laws and other financial enactments as they exist from time to time. 6. Cooling off period: If you are not satisfied with the Terms and Conditions of the policy, you may return the policy to us within 15 days. The amount to be refunded in case the policy is returned within the cooling-off period shall be determined as under: Value of units in the Policyholders Fund Plus unallocated premium. Plus Policy Administration charge deducted less charges @ Rs.0.20per thousand Life Cover Sum Assured if life cover is opted for or @ Rs. 0.20per thousand of Total Premiums payable during entire term of policy, if life cover is not opted for. Less Actual cost of medical examination and special reports, if any. 7. Loan: No loan will be available under this plan.

8. Assignment: Assignment is allowed under this plan during the deferment period. 9. Exclusions: In case the Life Assured commits suicide at any time within one year, the Corporation will not entertain any claim by virtue of the policy except to the extent of the Fund Value of the units held in the Policyholders Unit Account on death.

BENEFITS A) Death Benefits


If the Life cover is opted for, the Sum Assured under the Basic Plan together with the Policyholders Fund Value shall be payable either in a lump sum or as pension. In case the policy is taken without life cover, then the Policyholders Fund Value shall be payable either in a lump sum or as pension. The amount of pension will depend on the payable lump sum and the then prevailing immediate annuity rates under the annuity option chosen.

B) Benefit on Vesting:
On your surviving to the date of vesting, the Policyholders Fund Value will compulsorily be utilised to provide a pension based on the then prevailing immediate annuity rates under the relevant annuity option. However, you may opt to commute up to one-third of the Benefit to be paid as a lump sum. Further, you may choose to purchase pension from LIC or other life insurance company. 1. Options :

A) Life Cover Option:


This plan may be opted for with or without life insurance cover. If life insurance cover is opted for, he/ she can choose the level of cover within the limits. This benefit will be available only till the policy anniversary on which the age nearer birthday of the Life Assured is 75 years.

B) Accident Benefit Option:


If you have opted for life cover, you may opt for Accident Benefit equal to life cover subject to minimum Rs. 25,000 and maximum Rs. 50 lakh (taken all policies with LIC of India and other insurers). This benefit will be available only till the policy anniversary on which the

age nearer birthday of the Life Assured is 70 years. In case of death by Accident, an additional sum equal to Accident benefit will be payable.

C) Critical Illness Benefit Rider:


If you have opted for life cover, you may opt for Critical Illness Benefit equal to the life cover subject to a minimum of Rs. 50,000 and maximum of Rs. 10 lakh (including other policies with LIC of India) provided the policy term is 10 years and above. This benefit will be available only till the policy anniversary on which the age nearer birthday of the Life Assured is 60 years or for a maximum policy term of 35 years whichever is earlier. In case of diagnosis of defined categories of Critical Illness subject to certain terms and conditions, a sum equal to the Critical.

2. Investment of Funds: The plan offers following four funds detailed below:
Fund Type Investment in Government / Government Guaranteed Securities / Corporate Debt Bond Fund Not less than 60% Secured Fund Not less than 45% Short-term Investment in investments Listed Equity such as money Shares market instruments Details and objective of the fund for risk /return

Not more than 40% Not more than 40%

Nil Not less than 15% & Not more than 55% Not less than 30% & Not more than 70% Not less than 40% & Not more than 80%

Low risk Steady Income Lower to Medium risk

Balanced Fund

Not less than 30%

Not more than 40%

Balanced Income and growth Medium risk

Growth Fund

Not less than 20%

Not more than 40%

Long term Capital growth High risk

The Policyholder has the option to choose any ONE out of the above 4 funds.

3. Method of Calculation of Unit price: Units will be allotted based on the Net

Asset Value (NAV) of the respective fund as on the date of allotment. There is no Bid-Offer spread (the Bid price and Offer price of units will both be equal to the NAV). The NAV will

be computed on daily basis and will be based on investment performance, Fund Management Charge and whether fund is expanding or contracting under each fund type and shall be calculated as under:

Appropriation price is applied (when fund is expanding):


Market value of investments held by the fund plus the expenses incurred in the purchase of the assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any divided by the number of units existing at the valuation date (before any new units are allocated).

Expropriation price is applied (when fund is contracting):


Market value of investments held by the fund less the expenses incurred in the sale of assets plus the value of any current assets plus any accrued income net of fund management charges less the value of any current liabilities less provisions, if any divided by the number of units existing at the valuation date (before any units redeemed).

Applicability of Net Asset Value (NAV):


The premiums received up to a particular time (presently 3 p.m.) by the servicing branch of the corporation through ECS or by way of a local cheque or a demand draft payable at par at the place where the premium is received, the closing NAV of the day on which premium is received shall be applicable. The premiums received after such time by the servicing branch of the corporation through ECS or by way of a local cheque or a demand draft payable at par at the place where the premium is received, the closing NAV of the next business day shall be applicable. Similarly, in respect of the valid applications received for surrender, death claim, switches etc up to such time by the servicing branch of the Corporation closing NAV of that day shall be applicable. For the valid applications received in respect of surrender, death claim, switches etc after such time by the servicing branch of the Corporation the closing NAV of the next business day shall be applicable In respect of the policies vesting, NAV of the date of vesting shall be applicable. The timing given is as per the existing guidelines and changes in this regard shall be as per the instruction from IRDA.

4. Charges under the Plan:


A. Premium Allocation Charge: This is the percentage of the premium deducted towards charges from the premium received. The balance constitutes that part of the premium which is utilized to purchase (Investment) units for the policy. The allocation charges are as below: For Single premium policies: 3.3% For Regular premium policies:

Premium Band (per annum) 5,000 to 75,000 75,001 to 1,50,000 1,50,001 to 3,00,000 3,00,001 to 5,00,000 5,00,001 and above Allocation charge for Top-up: 1.25%

Allocation charge First Year 16.50% 15.75% 15.00% 14.25% 13.50% Thereafter 2.50% 2.50% 2.50% 2.50% 2.50%

B) Charges for Risk Covers: i) Mortality Charge This is the cost of life insurance cover which is age specific and will be taken every month. The charges per Rs. 1000/- life insurance cover for some of the ages in respect of a healthy life are as under: Age Rs. 25 1.42 35 1.73 45 3.89 55 10.76

ii Critical illness Benefit rider charge This is the cost of Critical Illness Benefit rider (if opted for). These are age specific and will be taken every month. The charges per Rs. 1000/- Critical Illness Rider Sum Assured per annum for some of the ages in respect of a healthy life are as under: Age Rs. 25 0.91 35 1.80 45 5.31 55 14.44

iii Accident Benefit charge - This is the cost of Accident Benefit rider (if opted for) and
will be levied every month at the rate of Rs. 0.50 per thousand Accident Benefit Sum Assured per policy year.

C) Other Charges:
1) Policy Administration charge: Rs. 60/- per month during the first policy year and Rs. 20/- per month thereafter, throughout the term of the policy. 2) Fund Management Charge It is a charge levied as a percentage of the value of units at following rates: 0.50% p.a. of Unit Fund for Bond Fund 0.60% p.a. of Unit Fund for Secured Fund 0.70% p.a. of Unit Fund for Balanced Fund 0.80% p.a. of Unit Fund for Growth Fund Fund Management Charge shall be appropriated while computing NAV. 3) Switching Charge This is the charge levied on switching of monies from one fund to another. Within a given policy year 4 switches will be allowed free of charge. Subsequent switches in that year shall be subject to a switching charge of Rs. 100 per switch. 4) Bid/Offer Spread Nil. 5) Surrender Charge Nil 6) Service Tax Charge A service tax charge, if any, shall be levied on the following charges a)Policy Administration, Mortality, Accident Benefit and Critical Illness Benefit rider, if any by canceling appropriate number of units out of the Policyholders Fund Value on a monthly basis as and when the corresponding Policy Administration, Mortality, Accident Benefit and Critical Illness Benefit rider charges are deducted. b) Premium allocation - at the time of allocation. c) Fund Management at the time of deduction of Fund Management Charge. d) Switching - at the time of effecting switch and e) Alteration ( as provided under Miscellaneous charge) - on the date of alteration in the policy. The level of this charge will be as per the rate of service tax as applicable from time to time. Presently, the rate of Service Tax is 12% with an educational cess at the rate of 3% thereon and hence effective rate is 12.36%.

7) Miscellaneous Charge This is a charge levied for an alteration within the contract, such as reduction in policy term, change in premium mode, etc. An alteration may be allowed subject to a charge of Rs. 50/-.

D) Right to revise charges:


The Corporation reserves the right to revise all or any of the above charges except the premium allocation charge and Mortality charge, with the prior approval of IRDA . Although the charges are reviewable, they will be subject to the following maximum limit: - Policy Administration Charge: Rs. 150/- per month during the first policy year and Rs. 50/- per month thereafter, throughout the term of the policy. - Fund Management Charge: The Maximum for each Fund will be as follows: 1. 2. 3. 4. Bond Fund: Secured Fund: Balanced Fund: Growth Fund: 1.00% p.a. of Unit Fund 1.10% p.a. of Unit Fund 1.20% p.a. of Unit Fund 1.30% p.a. of Unit Fund

- Critical Illness Benefit charges shall not exceed by more than 200% of the current rate. - Switching Charge shall not exceed Rs. 200/- per switch. - Miscellaneous Charge shall not exceed Rs. 100/- each time when an alteration is requested. In case the policyholder does not agree with the revision of charges the policyholder shall have the option to withdraw the Policyholders Fund Value. 5. Surrender: The Surrender value, if any, is payable only after completion of the third policy anniversary both under Single and Regular premium contract. The surrender value will be the Policyholders Fund Value at the date of surrender. There will be no Surrender charge. If you apply for surrender of the policy within 3 years from the date of commencement of policy, then the Policyholders Fund Value shall be converted into monetary terms. No charges shall be deducted thereafter and this monetary value shall be paid on completion of 3 years from the date of commencement of policy. In case of death of life assured after the date of surrender but before the completion of 3 years from the date of commencement of policy the monetary value payable on the completion of 3 years shall be payable to the nominee/ legal heir immediately on death.

Compulsory Surrender:
The policy shall be surrendered compulsorily in following cases: i) where the policy is not revived during the period of revival, the policy shall be terminated after completion of 3 years from the date of commencement of the policy or on expiry of revival period, whichever is later. However, if the date of vesting falls before the expiry of revival period, then the policy shall be terminated on the date of vesting. ii) where premiums have been paid for less than 3 years or under single premium policies, if the balance in policyholders fund value is not sufficient to recover the relevant charges; iii) where premiums have been paid for at least 3 years and the balance in policyholders fund value falls below a minimum balance of one annualized premium.

Policyholders Fund Value shall be converted into monetary value as under:


The NAV on the date of application for surrender or on the date when revival period is over (in case of compulsory surrender), as the case may be, multiplied by the number of units in the Policyholders Fund as on that date will be the monetary amount.

NEW BIMA GOLD


FEATURES
It is a plan where premiums paid over the term of plan are paid back during the policy term in instalments and life insurance cover is available not only during the term but also during the extended term of the plan. PAYMENT OF PREMIUM Premiums can be paid regularly at yearly, half-yearly, quarterly or monthly intervals or through salary deductions over the policy term. Age 15 20 25 30 Annual Premium per 1000 SA 12 63.30 64.25 65.20 66.90 16 55.20 56.00 57.00 58.80 20 40.40 41.20 42.30 44.20

35 40 45 50 55

71.05 78.10 88.45 103.30 121.80

62.40 68.10 76.45 88.10 -

47.55 52.75 60.15 -

BENEFITS Survival Benefit:


Payable in case of life assured surviving to the end of the specified durations provided the policy is in full force as given below: For policy term 12 years: 15% of the Sum Assured under Basic Plan at the end of each 4th & 8th policy year For policy term 16 years: 15% of the Sum Assured under Basic Plan at the end of each 4th, 8th &12th policy year For policy term 20 years: 10% of the Sum Assured under Basic Plan at the end of each 4th, 8th, 12th & 16th policy year. On expiry of policy term: Total amount of premiums (excluding extra/optional rider premiums, if any) paid plus Loyalty Additions, if any, less the amount of survival benefits paid earlier.

DEATH BENEFIT:
During the policy term: Payment of an amount equal to Sum Assured under the Basic Plan on death of the Life Assured during the policy term provided the life cover is in force. During the extended term: Payment of an amount equal to 50% of Sum Assured under the Basic Plan on death of the Life Assured during the extended term provided all the premiums under the policy have been paid. Extended Term: The extended term shall be half of the policy term after the expiry of the policy term.

OPTIONAL RIDER BENEFIT:


Accident Benefit rider shall be available as an optional benefit for a premium at the rate of Re.1 per thousand Accident Benefit Rider Sum Assured. Accident Benefit Rider shall be available for an amount not exceeding the Sum Assured under the basic plan subject to overall limit of Rs.50 lakh taking all existing policies of the Life Assured under individual as well as group schemes taken with Life Insurance Corporation of India and other insurance companies and the Accident Benefit Rider Sum Assured under the new proposal into consideration. This rider benefit is available only during the policy term but not during extended term. This rider shall be available for the Life Assured engaged in police duty either in any military, naval or police organisation by payment of an additional premium at the rate of Rs.0.50 per thousand Accident Benefit Rider Sum Assured.

ACCIDENTAL DEATH AND DISABILITY BENEFIT:


On death arising as a result of accident an additional amount equal to the Accident Benefit Rider Sum Assured is payable. On total and permanent disability arising due to accident (within 180 days from the date of accident) an amount equal to the Accident Benefit Rider Sum Assured will be paid over a period of 10 years in monthly instalments. The disability due to accident should be total and such that the Life Assured is unable to carry out any work to earn the living. Following disabilities due to accident are covered: a) irrevocable loss of the entire sight of both eyes, or b) amputation of both hands at or above the wrists, or c) amputation of both feet at or above ankles, or d) amputation of one hand at or above the wrist and one foot at or above the ankle No benefit will be paid if accidental death or disability arises due to accident in case of : a) intentional self-injury, attempted suicide insanity or immorality or the Life Assured is under the influence of intoxicating liquor, drug or narcotic b) engagement in aviation or aeronautics other than that of a passenger in any air craft c) injuries resulting from riots, civil commotion, rebellion, war, invasion, hunting, mountaineering, steeple chasing or racing of any kind d) accident resulting from committing any breach of law e) accident arising from employment in armed forces or military services or police organisation.

AUTO-COVER FACILITY:
If at least two full years premiums have been paid in respect of this policy, any subsequent premium be not duly paid, full death cover shall continue for a period of two years from the date of First Unpaid Premium(FUP) or till the end of policy term, whichever is earlier.

PAID UP VALUE:
If after at least three full years premiums have been paid in respect of this policy, any subsequent premium be not duly paid, this policy shall not be wholly void after the expiry of two years Auto Cover Period from the due date of First Unpaid Premium, but shall subsist as a paid up policy for an amount equal to the total premiums paid (excluding any extra/optional premium) less the survival benefits paid earlier, if any. This amount shall be called as Paid Up Value. This paid up value shall be payable on the date of expiry of policy term or at Life Assureds prior death. No survival benefit shall be payable under paid up policies. The policy, thereafter, shall be free from all liabilities for payment of the within mentioned premiums. The Accident Benefit Rider will cease to apply if the policy is in lapsed condition. During the Auto Cover Period also, the Accident Benefit Rider shall not be available. The extended term cover shall not be available in case of paid-up policies.

GUARANTEED SURRENDER VALUE:


The Guaranteed Surrender Value shall be available after completion of at least three policy years and at least three full years premiums have been paid. The Guaranteed Surrender Value is equal to 30 per cent of the total amount of premiums paid excluding the premiums for the first policy year, all extra premiums paid, the premiums paid for Accident Benefit Rider and the amount of survival benefits paid earlier.

OTHER BENEFITS: The plan offers other benefits as follows: Loan :


Loan facility is available under this plan after the policy acquires paid up value. The rate of interest to be charged for loan amount would be determined from time to time by the Corporation. Presently the rate of interest is 9% p.a. payable half-yearly.

Grace Period :
A grace period of one month but not less than 30 days will be allowed for payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums.

Revival :
Subject to production of satisfactory evidence of continued insurability, a lapsed policy can

be revived by paying arrears of premium together with interest within a period of five years from the due date of first unpaid premium. The rate of interest applicable will be as decided by the Corporation from time to time.

Cooling-off period:
If you are not satisfied with the Terms and Conditions of the policy you may return the policy to us within 15 days.

Eligibility Conditions and Other Restrictions:


FOR BASIC PLAN: Minimum age at entry Maximum age at entry :14 years (completed) :57 years (nearest birthday) for Term 12 years :51 years (nearest birthday) for Term 16 years 45 years (nearest birthday) for Term 20 years Age at expiry of extended term :Maximum 75 years (nearest birthday) Term :12, 16 and 20 years. Minimum Sum Assured :Rs. 50,000 /Maximum Sum assured :No limit Sum Assured will be in multiples of Rs.5,000 /- only. FOR THE ACCIDENT BENEFIT RIDER OPTION : Minimum age at entry :18 years (completed) Maximum age at entry :57 years (nearest birthday) for Term 12 years :51 years (nearest birthday) for Term 16 years 45 years (nearest birthday) for Term 20 years Minimum Sum Assured :Rs. 50,000 /Sum Assured will be in multiples of Rs.5,000 /- only. REBATES / EXTRA FOR MODE OF PREMIUM PAYMENT AND HIGH SUM ASSURED: Mode Rebate / Extra Rebates are available at the following rates: Yearly mode Half-yearly mode Quarterly and SSS modes Monthly mode High Sum Assured Rebates: Less than Rs. 1 Lakh Rs. 1 Lakh and Less than Rs.2 Lakh :2% of tabular premium :1% of tabular premium :NIL 5% extra on tabular premium :NIL :Rs.5 per thousand Sum Assured

Rs. 2 Lakh and above

:Rs.7.5 per thousand Sum Assured

EXCLUSIONS: This policy will be void if the Life Assured commits suicide at anytime on or after the date on which the risk on the policy has commenced but before the expiry of one year from the date of commencement of risk under the policy. In case of death due to suicide during this period, the Corporation will not entertain any claim by virtue of this policy except to the extent of a third party's bonafide beneficial interest acquired in the policy for valuable consideration of which notice has been given in writing to the office to which premiums under this policy were paid, at least one calendar month prior to death.

THE MONEY BACK POLICY (with profit)


FEATURES
Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, this scheme provides for periodic payments of partial survival benefits as follows during the term of the policy, of course so long as the policy holder is alive. In the case of a 20-year Money-Back Policy (Table 75), 20% of the sum assured becomes payable each after 5, 10, 15 years, and the balance of 40% plus the accrued bonus become payable at the 20th year. For a Money-Back Policy of 25 years (Table 93), 15% of the sum assured becomes payable each after 5, 10, 15 and 20 years, and the balance 40% plus the accrued bonus become payable at the 25th year. An important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which have already been paid. Similarly, the bonus is also calculated on the full sum assured.

BENEFITS Introduction
Insurance Regulatory & Development Authority (IRDA) requires all life insurance companies operating in India to provide official illustrations to their customers. The illustrations are based on the investment rates of return set by the Life Insurance Council (constituted under Section 64C(a) of the Insurance Act 1938) and is not intended to reflect the actual investment returns achieved or may be achieved in future by Life Insurance Corporation of India (LICI). For the year 2004-05 the two rates of investment return declared by the Life Insurance

Council are 6% and 10% per annum.

Product summary:
These are Money Back type Assurance plans that provides financial protection against death throughout the term of plan along with the periodic payments on survival at specified durations during the term.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through salary deductions as opted by you throughout the term of the policy, or till the earlier death.

Bonuses:
This is a with-profit plan and participate in the profits of the Corporations life insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. Final (Additional) Bonus may also be payable provided policy has run for certain minimum period.

Death Benefit:
The Sum Assured plus all bonuses to date is payable in a lump sum upon the death of the life assured during the policy term irrespective of the Survival benefit /benefits paid earlier.

Survival Benefits:
The percentage of Sum Assured as mentioned below will be paid on survival to the end of specified durations : % of Sum Assured paid at the end of specified duration Duration 5 10 15 20 25 Plan 75 20% 20% 20% 40% 93 15% 15% 15% 15% 40%

All bonuses declared upto the maturity date will also be paid alongwith the final survival benefit.

Supplementary/Extra Benefits :
These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender values are available under the plan on earlier termination of the contract.

Guaranteed Surrender Value:


The policy may be surrendered after it has been in force for 3 years or more. The guaranteed surrender value is 30% of the basic premiums paid excluding the first years premium and all survival benefits paid earlier.

Corporations policy on surrenders:


In practice, the Corporation will pay a Special Surrender Value which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender is the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premiums paid. The Corporation reviews the surrender value payable under its plans from time to time depending on the economic environment, experience and other factors. Note: The above is the product summary giving the key features of the plan. This is for illustrative purpose only. This does not represent a contract and for details please refer to your policy document. Plan/ Term At the end of 5 years At the end of 10 years At the end of 15 years At the end of 20 years At the end of 25 years 75/ 20 Years 20% 20% 20% balance 40% + bonus NIL 93/ 25 Years 15% 15% 15% 15% balance 40% + bonus

Plan Parameters:
Minimum Entry age Sum assured (Rs.) Term (years) 13 (lbd) 50,000 Fixed at 20 for plan 75 and 25 for plan 93 Maximum 50 NO LIMIT -

Mode of Payment Yearly, Half-yearly, Quarterly, Monthly, Salary Saving Scheme

Maximum Maturity Age 70 years

Policy loan available No

JEEVAN MITRA (DOUBLE COVER ENDOWMENT PLAN)


FEATURES
This is an Endowment Assurance plan that provides greater financial protection against death throughout the term of plan. It pays the maturity amount on survival to the end of the policy term.

Premiums: Premiums are payable yearly, half-yearly, quarterly, monthly or through


Salary deductions, as opted by you, throughout the term of the policy or earlier death.

Bonuses: This is a with-profit plan and participates in the profits of the Corporations life
insurance business. It gets a share of the profits in the form of bonuses. Simple Reversionary Bonuses are declared per thousand Sum Assured annually at the end of each financial year. Once declared, they form part of the guaranteed benefits of the plan. A Final (Additional) Bonus may also be payable provided a policy has run for certain minimum period.

BENEFITS Death Benefit:


Table No 88: Twice the Sum Assured plus all bonuses on the basic sum assured to date is payable in a lump sum upon the death of the life assured.

Table No 133: Thrice the Sum Assured plus all bonuses on the basic sum assured to date is payable in a lump sum upon the death of the life assured.

Maturity Benefit:
The Sum Assured plus all bonuses declared up to maturity date is payable in a lump sum on survival to the end of the policy term.

Supplementary/Extra Benefits:
These are the optional benefits that can be added to your basic plan for extra protection/option. An additional premium is required to be paid for these benefits.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender value will be available under the plan on earlier termination of the contract.

Guaranteed Surrender Value:


The policy may be surrendered after it has been in force for 3 years or more. The guaranteed surrender value is 30% of the basic premiums paid excluding the first years premium.

Corporations Policy On Surrenders:


In practice, the company will pay a Special Surrender Value which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted value of the reduced claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid and the policy duration at the date of surrender. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premiums paid. The Corporation reviews the surrender value payable under its plans from time to time depending on the economic environment, experience and other factors.

KOMAL JEEVAN

FEATURES Product summary:


This is a Children's Money Back Plan that provides financial protection against death during the term of plan with periodic payments on survival at specified durations. This plan can be purchased by any of the parent or grand parent for a child aged 0 to 10 years.

Commencement of risk cover:


The risk commences either after 2 years from the date of commencement of policy or from the policy anniversary immediately following the completion of 7 years of age of child, whichever is later.

Premiums:
Premiums are payable yearly, half-yearly, quarterly, monthly or through Salary deductions, as opted by you, up to the policy anniversary immediately after the life assured (child) attains 18 years of age or till the earlier death of the life assured. Alternatively, the premium may be paid in one lump sum (Single premium).

Guaranteed Additions:
The policy provides for the Guaranteed Additions at the rate of Rs.75 per thousand Sum Assured for each completed year. The Guaranteed Additions are payable at the end of the term of the policy or earlier death of the Life Assured.

Loyalty Additions:
This is a with-profit plan and participates in the profits of the Corporations life insurance business. It gets a share of the profits in the form of loyalty additions which are terminal bonuses payable along with death or maturity benefit. Loyalty addition may be payable depending on the experience of the Corporation.

BENEFITS Survival Benefit:


The percentage of sum assured as mentioned below will be paid on survival to the end of specified durations:

On the policy anniversary immediately following the Life assured attains the age of 18 years 20 years 22 years 24 years

% of Sum Assured 20% 20% 30% 30%

Death Benefit:
In case of death of the life assured before the commencement of risk, the policy shall stand cancelled and premiums paid (excluding the Premium for Premium waiver Benefit ) under the policy will be refunded. However, if death occurs after the commencement of risk but before the policy matures, the full Sum Assured plus Guaranteed Additions together with Loyalty Additions, if any, is payable.

Maturity Benefit:
The Guaranteed Additions together with Loyalty Additions, if any, is payable in a lump sum on survival to the end of the policy term.

Premium Waiver Benefit:


This is an optional benefit that can be added to your basic plan. An additional premium is required to be paid for this benefit. By payment of this additional premium, the proposer can secure the benefit of cessation of premiums from his/her death to the end of the deferment period. The deferment period for this purpose is to be taken as 18 minus age at entry of child.

Surrender Value:
Buying a life insurance contract is a long-term commitment. However, surrender value is available on the plan on earlier termination of the contract.

Guaranteed Surrender Value:


The policy may be surrendered after it has been in force for 3 years or more. The Guaranteed Surrender Value before the date of commencement of risk is 90% of the premiums paid excluding the premiums paid during the first year and any extra premium paid. After the date of commencement of risk, the Guaranteed Surrender Value is 90% of the premiums paid before the date of commencement of risk excluding the premiums paid during the first year and any extra premium paid plus 30% of the premiums paid after the date of commencement of risk.

Corporations policy on surrenders:


In practice, the company will pay a Special Surrender Value which is either equal to or more than the Guaranteed Surrender Value. The benefit payable on surrender reflects the discounted value of the claim amount that would be payable on death or at maturity. This value will depend on the duration for which premiums have been paid and the policy at the date of surrender. In some circumstances, in case of early termination of the policy, the surrender value payable may be less than the total premium paid. The Corporation reviews the surrender value payable under its plans from time to time depending on the economic environment, experience and other factors. Note: The above is the product summary giving the key features of the plan. This is for illustrative purpose only. This does not represent a contract and for details please refer to your policy document.

GROWTH OF PRIVATE LIFE INSURANCE COMPANIES IN THE LAST 5 YEARS


The insurance industry recorded a booming growth of 35% in premium income during 2004-05 with the 13 private sector players walking away with. An impressive 129% while the Life Insurance Corporation of India recorded a 21% growth. Thus the market share of state behemoths dropped to 78% in 2004 05 from 87% a year ago. According to ASSOCHAM Eco Pulse (AEP) Study, the industry premium increased to Rs253.42bn in 2004-05 from Rs187.1bn in 2003-04. The LIC total premium for the year 2004-05 amounted to Rs197.85bn as against the Rs162.84bn during previous year. During April-June 2005, the largest private company ICICI Prudential has increased its share from 6.25% in 2004-05 to 7.68% in current fiscal. The opening up of the sector has given some of the most innovative products like the customized insurance policies and now the unit linked policies that have gained much of customer attention. The sector has huge potential and certain other new and innovative areas can also be looked into for enhancing market share and premium income, said Sanghi. HDFC is next in the row with 2.91% market share which has increased from 1.92% last fiscal followed by TATA AIG which now shares 2% of the market from 1.18% last fiscal. Birla Sun life's share has dropped from 2.45% during FY'05 to 1.76% in first two months of FY'06. SBI life comes next with 1. 72% share and has infact dropped a few percent points from last year. Max New York life and Aviva Life Insurance have captured more than 1% share each from less than 1% share during FY'05. Others like ING, AMP Sanmar, Met Life and Sahara India have less than 1 % share. The detail of the market share of life insurance companies is attached. The market share of the private players has doubled every year from 5.6% in 2002-03 to, 12% in 2003-04 and close to 22% in 2004-05. The state run insurance company has the biggest advantage of its huge network which the company can use to penetrate into rural market that is still lying untapped. Another option with the life insurance companies to capture more and more market share could be product innovation and constantly developing an insurance product in order to meet the ever-changing requirements of the customer. Quality customer service and education can be another area where a company can differentiate itself from other companies.

IT TO BOOST LIFE MARKET GROWTH


THE LIFE Insurance Corporation of India (LIC) has turned to information technology in a bid to shed its image as a dinosaur among more nimble private sector companies. LIC, India's dominant life insurer, is encouraging policyholders to use its web site to pay premiums and make claims. Last- month, it announced new mobile phone SMS (testing) services to alert policyholders of news about their plans. These moves, unmatched by most of LIC's smaller private sector rivals, are part of an effort to open new channels to increase the speed and quality of customer service -long seen as LIC's weakness after decades as India's monopoly life insurer. LIC's performance in the year to March 2004 suggests that these efforts are working. It sold 27 million new policies generating Rs85.7 billion (US$1.9 billion) in premium income - an annual growth of about 11 percent. LIC's deployment of information technology may have helped it maintain its 88 percent market share of premium sales. Yet few believe that technology alone will drive the company's - and in effect, the Indian life industry's expansion. "Ultimately the growth of life insurance depends on growth of the economy," said TK. Banerjee, a board member of the Insurance Regulatory Development Authority. India's economic growth rate in March 2004 hit double-digit figures to become Asia's fastest-growing economy. Most economists forecast growth to stabilize at around 7 percent to 2005. Banerjee said that this climate of rising economic prosperity is Encouraging consumers to think more about insurance. Nonetheless, most life companies believe consumers still need Sanmar: "People still don't think that insurance is important. Most sales happen after personal interaction." AMP Sanmar, a two-year old joint venture between south.-Indian based conglomerate Sanmar and Australia's AMP, has employed some 3,000 sales agents who are targeting small and medium-sized towns that have low penetration rates of life insurance. India's life insurance penetration is less than three percent. "We're focused on places where there is no other company - not even LIC," Subramaniam said,-remarking that unlike LIC, AMP Sanmar regards the internet and mobile phones as channels for promotion, not sales. He said that the internet is not widespread as a channel to sell consumer products in India, but Subramaniam has not ruled out deploying such technology in the future. Whatever the merits of new distribution channels, the industry fears a decline in sales following new taxes levied on single premium products. Single premium life insurance has been popular in India mainly because guaranteed returns were tax-free. This encouraged policyholders to pay large premiums with minimal risk cover, for payments at maturity that often exceeded the returns of more sophisticated financial

products such as mutual funds. But last October, the government decided to tax premiums that paid above 20 percent of the sum assured. The decision has reduced sales of single premium products, which is likely to restrain the overall growth of India's life industry. The industry regulator has forecast growth of life premiums to be around 20 percent to March -2004, about the same level as 1999, down from a burst of sales in 2002 of 43.5 percent. India's life insurers have rallied to persuade the government to rescind the ruling later this year ,but any decision must wait for the end of parliamentary elections currently underway.

CURRENT STANDING OF PRIVATE LIFE INSURANCE COMPANIES IN URBAN SECTOR Life insurance is possibly the most- retail of all financial services, and is required by people of all segments and in all locations. At a broad level, ICICI Prudential aims to secure the families of the middle and upper class working people in urban India. To this end, they have pursued a pan-India distribution strategy and backed it up with a range of products that meets the needs of a wide range of people, be they from rural or urban areas. Today, they have branches in 74 locations and rural presence in more than 15 states. Certainly, the majority of the business still comes from urban areas such as metros and mini-metros. However, they have seen rural business grow significantly and expect it to continue making greater contribution in the years to come.

ROLE OF FOREIGN COMPANIES IN INDIA


Government has allowed 26% foreign equity participation in the insurance sector. This has its limitations. While most foreign insurers planning to start their services in India were not pleased by this condition, they reluctantly agreed that this was expected in an opening economy and this will not change their outlook for India. After all no insurance company can afford to ignore a market of 1bn people. But the fact remains that they: Can not appoint majority directors on the company board; Can not have say in the day to day workings of the company; Can Affect Only Special Resolutions. This cap, however, will have a great impact on the Indian counter part to raise 74% of the funds in their joint venture. To add to this if Indian partners like State bank of India, with over 9000 branches nationwide, will demand premium for their existing distribution network, we will see the foreign insurance companies demand hefty premiums for bringing in their global expertise and brand. Mr. Vaidya, Chairman of SBI, has recently stated that all it is looking for is a good and reliable partner and the question of a hefty premium to be charged to its foreign partner is not significant. The monolith has finally come to business senses foreign companies are unhappy even about laws pertaining to repatriation of funds. The Stipulated investment criteria is also something that all players in the sector, be it Indian or foreign, are closing watching. The foreign players are essentially looking to tap their" global expertise in the variety markets and use that know-how to work in the Indian scenario. Designing of products,information systems, technical expertise, manpower planning etc is what one expects the foreign players to have a say in. Any venture of the joint kinds needs to be between equals. If this is not there then there is every chance that a partner in the venture will feel increasingly uncomfortable and would be looking to call the joint venture off.

FINDINGS
QUESTIONNAIRE ANALYSIS
Respondents = 80 Respondents Responded = 60 Response Rate = 75% Respondents are taken from private, government and business sectors.

1. According to you, which have played a major role in the field of life insurance companies?
private employees LIC HDFC ICICI 10 5 3 govt. employees businessman 13 3 3 1 10 5 4 1

OTHERS 2

14 12 10 8 6 4 2 0

private employees govt. employees businessman

I DF C IC IC O TH H

LI C

After analyzing this data it is found that from the given three respective level of Pvt. Govt. and Business 10 out of 20 (30%), 13 out of 20 (39%) and 10 out of 20 (30%) are in favour of LIC, while 5 out of 20 (15%), 3 out of 20 (9%) and 5 out of 20 (6%), 1 out of 20 (30%) and 1 out of 20 (30%) are in favour of other Pvt. Companies.

ER

2. Which insurance companies have been successful to make strong public base by advertisement?

Private employees LIC HDFC ICICI OTHERS 12 3 4 1

Govt employees 14 2 3 1

Business man 12 4 3 1

16 14 12 10 8 6 4 2 0
IC IC I LI C FC O TH ER HD S

Private employees Govt employees Business man

From the above table, it is found that from the given three sector Private, Govt. and Business 12 out of 20 (36%), 14 out of 20 (42%), 12 out of 20 (36%), are in the favour of LIC. 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in favour of HDFC, whereas only 1 out of 20 (3%), 1 out of 20 (3%) 1 and out of 20 (3%) favour others company.

3. Which insurance company has gained massive public support in the current fiscal year?
Private employees LIC HDFC ICICI 12 3 3 govt. employees 14 2 2 2

businessman 10 5 4 1

OTHERS 2

14 12 10 8 6 4 2 0 LIC HDFC ICICI others Private employees govt. employees businessman

From the above table, it is found that from the given three sector Private, Govt. and Business 12 out of 20 (36%), 14 out of 20 (42%), 10 out of 20 (30%), are in the favour of LIC 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in favour of ICICI, whereas only 2 out of 20 (6%), 2 out of 20 (6%) 1 and out of 20 (3%) favour others company.

4. Do you think insurance policy is in the direction of public welfare?

Private employees YES NO 13 7

Govt. employees 16 4

Businessman 12 8

20 15 10 5 0 Private employees Govt. employees Businessman

YES NO

The above table shows that from private sector 13 out of 20 (30%) agree and 7 out of 20 (21%) disagree, from govt. sector 16 out of 20 (48%) think it right but 4 out of 20 (12%) dont thick it so and from business man 12 out of 20 (36%) are in favour of the above statement but 8 out of 20 (24%) dont favour it.

5. Is retirement bond or pension policy launched by the number of private player as well as public sector Company in the direction of secured old age?
Private employees YES NO 15 5 Govt. employees 18 2

Businessman 13 7

20 15 10 5 0 Private employees Govt. Businessman employees YES NO

It is obvious from the above table that 15 out of 20 (45%), 18 out of 20 (54%) and 13 out of 20 (39%) from the given three think retirement bend or pension policy a legitimate step in the direction of secure old age but 5 out 20 (15%), 2 out of 20 (6%) and 7 out 20 (21%) dont agree with the opinion of the majority class.

6. Do you think that risk coverage factor included in Insurance policy attracts general public towards the policy?

Private employees YES NO 12 8

Govt. employees Businessman 16 4 11 9

25 20 15 10 5 0
Businessman Private employees Govt. employees

NO YES

From the above table it is found that 12 out of 20 (36%) from Private sector 16 out of 20 (48%). From Govt. sector and 11 out of 20 (33%) thinks risk coverage factor attractive but rest 8 out of 20 (24%), 4 out of 20 (12%) and 9 out 20 (27%) from the above them sector dont think it so encouraging towards saving trend whereas 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.

7. What according to you, the term plan that only covers risk and doesnt cover maturity benefit on survival at the end of the term provides security cover over policy holders or a smart way of accumulative money from policy holders?

Private employees security cover accumulative money 12 8

Govt. employees 16 4

Businessman 11 9

20 15 Security Cover 10 5 0 Private Govt Business employees employees man Accumulative Money

It is obvious from the above data that 11 out of 20 (33%), from the Pvt. Sector, 15 out of 20 (45%) from Govt. sector and 12 out of 20 (36%) think term plan as a security cover but 9 out of 20 (27%), 5 out of 20 (15%) and 8 out of 20 (24%) from the three respective group think it as a way of accumulating money insurance company.

8. Do you think that the arrival of so many private companies in this insurance sector envisage a lot of choice to policy holder?
Private employees YES NO 16 4 Govt. employees 18 2

Businessman 16 4

20 15 10 5 0 YES NO Private employees Govt. employees Businessman

From analyzing the above data it is found that 16 out of 20 (48%) from Pvt. Sector, 18 out of 20 (54%) from Govt. sector and 16 out of 20 (48%) think that the arrival of private players envisage a lot of choice to policy holder. But 4 out of 20 (12%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.

9. Do you agree that customer-centricity and transparency are the buzzwords for success in this evolving industry?
Private employees YES NO 18 2 Govt. employees 20 0

Businessman 19 1

20 15 10 5 0 YES NO Private employees Govt. employees Businessman

From this above data, it is found the 18 out of 20 (54%) from Pvt. Sector and 20 out of 20 (60%) from Govt. Sector 19 out of 20 (57%) from Business men agree with this statement whereas only 2 out of 20 (6%) from Pvt. Sector and 1 out of 20 (3%) from Business men do not agree with this statement.

IMPORTANCE OF JOINT VENTURES


HDFC STANDARD LIFE INSURANCE COMPANY LIMITED HDFC
HDFC Incorporated in 1977 with a share capital of Rs. 10 crores, HDFC has since emerged as the largest residential mortgage finance institution in the country. The corporation has had a series of share issues raising its capital to Rs. 119 crores. The net worth of the corporation as on March 31, 2000 stood at Rs. 2,096 crores. HDFC operates through 75 locations throughout the country with its Corporate Headquarters in Mumbai, India. HDFC also has an international office in Dubai, V.A.E., with service associates in Kuwait, Oman and Qatar.

STANDARD LIFE
Standard Life is Europe's largest mutual life assurance company. Standard Life, which has been in the life insurance business for the past 175 years, is a modern company surviving quite a few changes since selling its first policy in 1825. The company expanded in the 19th century from its original Edinburgh premises. Standard Life currently has assets exceeding over 70 billion under its management and has the distinction of being accorded"AAA" rating consequently for the past six years by Standard & Poor.

THE JOINT VENTURE


HDFC Standard Life Insurance Company Limited was one of the first companies to be granted license by the IRDA to operate in life insurance sector. Each of the JV player is highly rated and been conferred with many awards. HDFC is rated 'AAA' by both CRISIL and ICRA. Similarly, Standard Life is rated 'AAA' both by Moody's and Standard and Poors. These reflect the efficiency with which DFC and Standard Life manage their asset base of Rs. 15,000 Cr and Rs. 600,000 Cr respectively. HDFC Standard Life Insurance Company Ltd was incorporated on 14th August 2000. HDFC is the majority stakeholder in the insurance JV with 81.4 % stake and Standard Life has a stake of 18.6%. Mr. Deepak Satwalekar is the MD and CEO of the venture. HDFC Standard Life Insurance Products Money Back Endowment Term Assurance Plan Flexible Bond Development Insurance Plan

ICICI PRUDENTIAL LIFE INSURANCE COMPANY ICICI


ICICI Ltd. was established in 1955 by the World Bank, the Government of India and the Indian Industry, to promote industrial development of India by providing project and corporate finance to Indian industry. Since inception, ICICI has grown from a development bank to a financial conglomerate and has become one of the largest public financial institutions in India. ICICI has thus far financed all the major sectors of the economy, covering 6,848 companies and 16,851 projects. As of March 31, 2000, ICICI had disbursed a total of Rs. 1,13,070 crores, since inception.

PRUDENTIAL POLICY
Prudential policy was founded in 1848. Since then it has grown to become one of the largest providers of a wide range of savings products for the individual including life insurance, pensions, annuities, unit trusts and personal banking. It has a presence in over 15 countries, and caters to the financial needs of over 10 million customers. It manages assets of over US$ 259 billion (Rupees 11, 39,600 crores approx.) as of December 31, 1999. Prudential is the largest life insurance company in the United Kingdom (Source: S&P's UK Life Financial Digest, 1998). Asia has always been an important region for Prudential and it has had a presence in Asia for over 75 years. In fact Credentials first overseas operation was in India, way back in 1923 to establish Life and General Branch agencies.

THE JOINT VENTURE


ICICI Prudential Life Insurance Company Limited was incorporated on July 20, 2000. The authorized capital of the company is Rs.2300 Million and the paid up capital is Rs. 1500 Million. The Company is a joint venture of ICICI (74%) and Prudential plc UK (26%). The Company was granted Certificate of Registration for carrying out Life Insurance business, by the Insurance Regulatory and Development Authority on November 24, 2000. It commenced commercial operations on December 19, 2000, becoming one of the first few private sector players to enter the liberalized. ICICI Prudential Life Insurance Products ICICI Prudential Forever Life ICICI Prudential Single Premium Bond

ICICI Save 'n' Protect ICICI Prudential Cash Back ICICI Prudential Life Guard ICICI Pru Assure Investment ICICI Pru Life Link

BIRLA SUN LIFE INSURANCE COMPANY LIMITED THE ADITYA BIRLA GROUP
Aditya Birla Group is India's second largest, business house, with a turnover of over $4.75bn and an asset base of$3.8 bn. The Group is a well diversified conglomerate with 72,000 strong workforce spanning 40 Companies spread across 17 countries. The flagship companies of the Group - Grasim, Hindalco, Indian Rayon and Indo Gulf - hold leadership positions in their respective areas of business.

SUN LIFE ASSURANCE


Sun Life Assurance Co. of Canada, established in 1871, is licensed in Canada, the U.S., the Philippines, Hong Kong, and the U.K. Its major lines of business are life insurance, annuities and mutual funds and investment services. Sun Life's rating reflects extremely strong diversification of revenues and profitability, outstanding capitalization, good fundamental earnings, and high-quality investments. In Canada, the company is especially strong. in the corporate life and health insurance and savings markets. In the U.S., the company is a top 20 player in the variable annuity market and a significant force in the upscale individual insurance market. In the U.K., Sun Life is among top 20 life and health insurers.

THE JOINT VENTURE


Birla Sun Life Insurance Company, the 74: 26 joint ventures between Aditya Birla Group and Sun Life financial Services --of Canada, has an equity capital of Rs. 150 crore. Birla Sun Life has Mr. Nalli B Javeri as its CEO. A six member Board, with equal representation from each of the JV Companies has been constituted to run the Company. Mr. Donald A. Stewart, Chairman and CEO, Sun Life Financial Services will head the Board. Mr. Kumar Mangalam Birla will be a director on the board. Other directors include Mr. Douglas Henck, Executive Vice President of Sun Life's Asian operations, Mr. Vijay Singh, Vice President India, Sun Life Financial Services, Mr. B. N. Puranmalka, Group Vice-Chairman, and Mr. S. K. Mitra, Group Director, Financial Services of the Aditya Birla Group.

The area of focus will be the rural segment as the company plans to leverage the network of the Aditya Birla Centre for Community Initiative and Rural Development in rural areas. Its multi-channel distribution set up comprises insurance advisors for life and an expert marketing team for group products. Birla Sun Life Insurance Products: Money Back Endowment Whole Life Birla Sun Life Term Plant

CONCLUSION
After overhauling the all situation that boosted a number of Pvt. Companies associated with multinational in the Insurance Sector to give befitting competition to the established behemoth LIC in public sector.

we come at the conclusion that :


1) There is very tough competition among the private insurance companies on the level of new trend of advertising to lull a major part of Customers. 2) LIC is not left behind in the present race of advertisement. 3) The entry of the Pvt. Players in the Insurance Sector has expanded the product segment to meet the different level of the requirement of the customers. It has brought about greater choice to the customers. 4) Private insurers have restricted reach to the customers. 5) LIC has vast market and very firm grip on its traditional customers and monopoly of life insurance products. 6) Bank assurance - that allows life insurers to leverage on the risk product through bank network, was adopted by private players. But LIC was also not left behind as picking up majority stake in the corporation Bank and large equity stake in the Oriental Bank of Commerce. IRDA is also playing very comprehensive role by regulating norms mandating to private players in this sector, that increases the confidence level of the customers to the private players.

CONCLUSIONS GOT BY THE CONSUMER SURVEY ANALYSIS


1) Now days also Insurance is most popular as more plain protection against death and people are unaware about the other aspects of insurance. 2) According to current scenario life and mater Insurance are the mast popular ones followed by fire Insurance. 3) Majority of people consider the Insurance premium paid by them as reasonable. 4) Only few counted people are unaware about the entry of private players into the insurance industry and a very high majority of people support their entry. 5) By the entry of private players. Consumers are expecting the premium to down which would be the biggest blessing.

RECOMMENDATIONS
In the modernized well advanced hi-tech approach to the customer every possible facilities and effort to build up the confidence of the rising policy holders towards. Insurance companies, to complete one another nothing is left to recommend. But some recommendations that are intensely felt and highly required for insures to sustain in the market.

These are as follows:


a) More and more transparency should be ascertained between insurers and policy holders. b) Particularly, in the emerging boom in the insurance company, every insurance company should be customer centered, and well versed in the handling of problem and grievances of the policy holders. c) Each and Every product launched by the Insurance company should be in favour of increasing need of policy holders. IRDA should be more and more responsible to the insurance sector by determiningsome standard. It should be mandatory to every insurers to make more and more responsible and responsive to the policy holders so that comprehensive understanding may be developed among policy holders. It may be beneficial on both sides.

BIBLIOGRAPHY
BROCHURE AND INFORMATION BOOKLET
Product List L.I.C. L.I.C. Annual Report, 2006 ICICI Annual Report, 2006 HDFC Annual Report, 2006 Malhotra Committee Report on Reforms in the Insurance Sector, 1993. The Insurance Regulatory and Development Authority Bill, 1999.

NEWSPAPERS / MAGAZINES
The Economic Times The Insurance Times Insurance Post

WEBSITES
www.licindia.com www.indiainfoline.com www.iciciprulife.com www.hdfc.com