Icici Complete Project Mba 3

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance
CONTENTS PART-I PROJECT Page No Abstract

Chapter I Introduction Objectives Methodology Limitations Chapter II 19 Industry Profile History of Insurance Types of Insurance Insurance sector performance Role of IRDA 2010 -
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Chapter III 31 COMPANY PROFILE OF ICICI PRUDENTIAL LIFE INSURANCE About ICICI PRUDENTIAL Vision Products Recent developments Promotion Brand values
COMPANY PROFILE OF BIRLA SUN LIFE INSURANCE [BSLI] About the History of BSLI Vision Mission Values
COMPANY PROFILE OF HDFC STANDARD LIFE INSURANCE About the HDFC and partnership Mission Values Incorporation of HDFC life insurance Chapter IV 39 THEORETICAL BACKGROUND Unit Linked Insurance Plan [ULIP] ULIP-Key Features Cover plus Market Factoid How to pick the best ULIP fund category Chapter V Data collection Analysis 10140-100 32-
Chapter VI 104 Findings Suggestions Conclusion References
ABSTRACT The insurance industry provides protection against financial losses resulting from a variety of perils. By purchasing insurance policies, individuals and businesses can receive reimbursement for losses due to unforeseen accidents, theft of property, and fire and storm damage; medical expenses; and loss of income due to disability or death. ICICI Prudential Life Insurance Company Limited is a 74:26 joint venture between ICICI Bank and Prudential plc UK. The company brings together the local market expertise and financial strength of ICICI Bank and Prudentials international life insurance experience. The company was granted a Certificate of Registration by the IRDA on November 24,2000 and issued its first policy on December 12,2000 Unit Linked Insurance Plan [ULIP]: A policy which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time. ULIP is life insurance solution that provides the client with the benefits of protection and flexibility in investment. ULIP came into play in the 1960s and became very popular because of the transparency and the flexibility, which it offers to the clients. For the present comparative study I have chosen two private players in life insurance-Birla Sun Life Insurance [BSLI] and HDFC Standard Life Insurance .The comparative study helps the investors to know the qualitative and quantitative features of the different ULIP plans providing by these companies.
Introduction
Objectives Methodology Limitations
INTRODUCTION
INSURANCE "Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event." Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. A loss is paid out of the premiums collected from the insuring public and the Insurance Companies act as trustees to the amount collected. For Example, in a Life Policy, by paying a premium to the Insurer, the family of the insured person receives a fixed compensation on the death of the insured. Similarly, in a car insurance, in the event of the car meeting with an accident, the insured receives the compensation to the extent of damage.
It is a system by which the losses suffered by a few are spread over many, exposed to similar risks.
TYPES OF INSURANCE:
LIFE INSURANCE Life insurance is a critical part of your long term financial planning. Every person with dependents should have life insurance. Life Insurance is particularly important if you are the sole breadwinner for your family. The 5
loss of you and your income could devastate your family. Life insurance will ensure that if anything happens to you, your loved ones will be able to manage financially. Life insurance is all about making sure your family has adequate financial resources to make those plans and dreams come true. It provides financial protection to help your family or business to manage after your death.
SUB TYPES OF LIFE INSURANCE: Whole life policies - Cover the insured for life. The insured does not receive money while he is alive; the nominee receives the sum assured plus bonus upon death of the insured.. Endowment policies - Cover the insured for a specific period. The insured receives money on survival of the term and is not covered thereafter. Money back policies - The nominee receives money immediately on death of the insured. On survival the insured receives money at regular intervals during the term. These policies cost more than endowment with profit policies. Annuities / Children's policies - The nominee receives a guaranteed amount of money at a pre-determined time and not immediately on death of the insured. On survival the insured receives money at the same pre-determined time. These policies are best suited for planning children's future education and marriage costs. Pension schemes - are policies that provide benefits to the insured only upon retirement. If the insured dies during the term of the policy, his nominee would receive the benefits either as a lump sum or as a pension every month. Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies covering all the needs.
INSURANCE GENERAL: Every asset has a value and the business of general insurance is related to the protection of economic value of assets. Assets would have been created through the efforts of owner, which can be in the form of building, vehicles, machinery and other tangible properties. Since tangible property has a physical shape and consistency, it is subject to many risks ranging from fire, allied perils to theft and robbery. Concepts of insurance have been extended beyond the coverage of tangible asset. Now the risk of losses due to sudden changes in currency exchange rates, political disturbance, negligence and liability for the damages can also be covered.
But if a person judiciously invests in insurance for his property prior to any unexpected contingency then he will be suitably compensated for his loss as soon as the extent of damage is ascertained. SUB TYPES OF GENERAL INSURANCE: Property Insurance: The home is most valued possession. The policy is designed to cover the various risks under a single policy. It provides protection for property and interest of the insured and family. Health Insurance: It provides cover, which takes care of medical expenses following hospitalization from sudden illness or accident. Personal Accident Insurance: This insurance policy provides compensation for loss of life or injury (partial or permanent) caused by an accident. This includes reimbursement of cost of treatment and the use of hospital facilities for the treatment. Travel Insurance: The policy covers the insured against various eventualities while traveling abroad. It covers the insured against personal accident, medical expenses and repatriation, loss of checked baggage, passport etc.
Liability Insurance: This policy indemnifies the Directors or Officers or other professionals against loss arising from claims made against them by reason of any wrongful Act in their Official capacity. Motor Insurance: Motor Vehicles Act states that every motor vehicle plying on the road has to be insured, with at least Liability only policy. There are two types of policy one covering the act of liability, while other covers insurers all liability and damage caused to one's vehicles. Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies covering all the needs
OBJECTIVES
TO know what is insurance, how it works and to get practical knowledge of work. To know what is ULIP and how it works. Proper understanding and analysis the ULIP PLANS OF ICICI PRUDENTIAL . To know the qualitative and quantitative benefits of different ULIP plans. To know who are the active competitors to ICICI PRUDENTIAL. To know the ULIP products offered by the competitors. 8
To study how ICICI Prudentials ULIP products different from its competitors ULIP products.
METHODOLOGY OF THE STUDY In order to achieve the objective set out above, the following methodology was adopted and data will be collected from two sources, they arePRIMARY DATA: data which is collected for the first time keeping in view the objective of study is known as primary data. It is collected from the respective Company Guide of ICICI Prudential and visited competitors company and discussed with Advisors of respective companies about the ULIP Plans offering by them.
SECONDARY DATA: data available from certain publications or reports are called secondary data. Such data are already collected by some other agencies in the past for some other purpose but used for the investigation of current problem. The sources of secondary data are magazines, research papers, newspapers, government publication, Internet etc. For the current study it was collected from the respective company brochures and company website.
LIMITATIONS OF THE STUDY
Collecting the information regarding ULIP plans is difficult. The numbers of ULIP Plans providing by all the companies is more, for the current study I have chosen 3 Products of ICICI Prudential and compared within the products and taken 2 more products of ICICI Prudential and compared 2 products with Competitors.
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It is difficult to compare one ULIP plan with another ULIP plan. The given time for doing project is limited. The data collected for the study is inadequate.
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Industry Profile History of Insurance Types of Insurance Insurance sector performance
Role of IRDA
INDUSTRY PROFILE: THE HISTORY OF INSURANCE: As with so many things in so many things in so many facts of our life, insurance too was born out of a primal need and shaped by socio economic realities of the time. The story goes back to around 2100 BC, the time ancient civilization of Babylon and a business practice called Bottomry. For all practical purposes a form of marine insurance, 12
bottomry enabled ship owners to borrow money against their ships to pay for the trip. With piracy rampant of high seas, traders and seafarers were reluctant to sale to other lands for fear of their lives and goods. Bottomry give them some semblance of security. The arrangement was that only if their ship returned did trader have to repay the loan, along with interest, which was pegged at an above market rate for risk covered. So, if their ship failed to make it back, they did not have to repay loan, there by covering some or the loss. 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. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta.
Some of the important milestones in the life insurance business in India are:
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 taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,1956, with a capital contribution of Rs.5crore from the Government of India.
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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.
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 (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 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. GIC incorporated as a company.
INSURANCE SECTOR REFORMS In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra
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committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms In 1994, the committee submitted the report and some of the key recommendations included: i) Structure Government stake in the insurance Companies to be brought down to 50% Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations All the insurance companies should be given greater freedom to operate ii) Competition Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry No Company should deal in both Life and General Insurance through a single entity Foreign companies may be allowed to enter the industry in collaboration with the domestic companies Postal Life Insurance should be allowed to operate in the rural marketOnly one State Level Life Insurance Company should be allowed to operate in each state iii) Regulatory Body The Insurance Act should be changed An Insurance Regulatory body should be set up Controller of Insurance (Currently a part from the Finance Ministry) should be made independent
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iv) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50% GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time) v) Customer Service LIC should pay interest on delays in payments beyond 30 days Insurance companies must be encouraged to set up unit linked pension plans Computerization of operations and updating of technology to be carried out in the insurance industry The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. But at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body.
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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT - 1999. (I.R.D.A)
Mission:
To
protect
the
interests
of
the
policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDAs online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 13 life insurance and 6 general insurance companies have been registered.
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Duties, Powers and functions of Authority:
The powers and functions of the authority include registration of insurers, conditions intermediaries of contract and of agents regulations promoting of and terms and insurance, regulating
professional organizations connected with the insurance, monitoring investment of funds and solvency margin of insurance companies.
The authority is to be advised by a committee to be known as the insurance advisory committee, which shall consists of not more than 25 members including ex-officio members in the insurance sector. The insurance advisory committee is expected to advice the authority on matters relating to making of the regulations
An Indian insurance company has been defined as a company incorporated under the Companies Act - 1956 and the paid capital of General Insurance business will have to be not less than Rs 100/Crores and in case of companies wanting to transact reinsurance business the paid capital will have to not less than Rs 200/- Crores.
It has also been notified that every insurance company will have to appoint an Actuary to be approved by I.R.D.A. The duty of the Actuary is to insure that
The assets are valued in appropriate manner The liabilities are evaluated as required The prescribed margin for maintaining solvency is complied with.
The I.R.D.A also issued regulations with regards to advertisement so as to include almost any public communication for a sale of insurance policy 18
INSURANCE PLAYERS INDIA[MAY,2005]
AND
THEIR
MARKET
SHARE
IN
COMPANY PROFILE OF ICICI PRUDENTIAL LIFE INSURANCE
About ICICI PRUDENTIAL Vision Products Recent developments Promotion Brand values
COMPANY PROFILE OF BIRLA SUN LIFE INSURANCE [BSLI] About the History of BSLI Vision
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Mission Values
COMPANY PROFILE OF HDFC STANDARD LIFE INSURANCE About the HDFC and partnership Mission Values Incorporation of HDFC life insurance
COMPANY PROFILE
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. 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).
ICICI Prudential's equity base stands at Rs. 9.25 billion with ICICI Bank
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and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The total sum assured crossed 30000 crores. The total policies are 1.4 million. The company has a network of about 80,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.
VISION:
To make ICICI Prudential the dominant Life and Pensions player built on trust by world-class people and service. This we hope to achieve by:

Understanding the needs of customers and offering them superior products and service Leveraging technology to service customers quickly, efficiently and conveniently Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders Providing an enabling environment to foster growth and learning for our employees And above all, building transparency in all our dealings. 21
The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundaryless, Ownership and Passion. Each of the values describe what the company stands for, the qualities of our people and the way we work. We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.
PRODUCTS
ICICI Prudentials ultimate promise is financial security. A strong brand certainly boosts sales but without customer friendly innovative products, even the best brand would not last long. ICICI Prudentials product range has been developed on the understanding that different people have their own sets of needs at various stages of their lives. It has thus built a flexible portfolio of products that can be customized to cater to varying needs of people at each life stage, and thus ensure protection in every step of life. The companys philosophy has been to help customers understand their financial needs and work closely with them to customize a product that would meet this need. Insurance Solutions for Individuals
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ICICI Prudential Life Insurance offers a range of innovative, customercentric products that meet the needs of customers at every life stage. Its 20 products can be enhanced with up to 6 riders, to create a customized solution for each policyholder. Savings Solutions

Secure Plus is a transparent and feature-packed savings plan that offers 3 levels of protection. Cash Plus is a transparent, feature-packed savings plan that offers 3 levels of protection as well as liquidity options. Save?n?Protect is a traditional endowment savings plan that offers life protection along with adequate returns. Cash Bak is an anticipated endowment policy ideal for meeting milestone expenses like a child?s marriage, expenses for a child?s higher education or purchase of an asset. LifeTime & LifeTime II offer customers the flexibility and control to customize the policy to meet the changing needs at different life stages. Each offer 4 fund options ? Preserver, Protector, Balancer and Maxi miser. Life Link II is a single premium Market Linked Insurance Plan which combines life insurance cover with the opportunity to stay invested in the stock market.
Premier Life is a limited premium paying plan that offers customers life insurance cover till the age of 75. Invest Shield Life is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest. Invest Shield Cash is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with flexible liquidity options. Invest Shield Gold is a Market Linked plan that provides capital guarantee on the invested premiums and declared bonus interest along with limited premium payment terms.
Protection Solutions
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Lifeguard is a protection plan, which offers life cover at very low cost. It is available in 3 options ? level term assurance, level term assurance with return of premium and single premium. Child Plans Smart Kid education plans provide guaranteed educational benefits to a child along with life insurance cover for the parent who purchases the policy. The policy is designed to provide money at important milestones in the childs life. Smart Kid plans are also available in unit-linked form ? both single premium and regular premium. Retirement Solutions

Forever Life is a retirement product targeted at individuals in their thirties. Secure Plus Pension is a flexible pension plan that allows one to select between 3 levels of cover.
Market-linked retirement products

LifeTime Pension II is a regular premium market-linked pension plan Life Link Pension II is a single premium market-linked pension plan. Invest Shield Pension is a regular premium pension plan with a capital guarantee on the ingestible premium and declared bonuses.
ICICI Prudential also launched ?Salaam Zindagi?, a social sector group insurance policy targeted at the economically underprivileged sections of the society. Group Insurance Solutions ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance benefits to their employees. ICICI Pru Group Gratuity Plan: ICICI Pru?s group gratuity plan helps employers fund their statutory gratuity obligation in a scientific manner.
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The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. ICICI Pru Group Superannuation Plan: ICICI Pru offers a flexible defined contribution superannuation scheme to provide a retirement kitty for each member of the group. Employees have the option of choosing from various annuity options or opting for a partial commutation of the annuity at the time of retirement. ICICI Pru Group Term Plan: ICICI Pru?s flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary. The benefit under the policy is paid to the beneficiary nominated by the member on his/her death. RECENT DEVELOPMENTS In keeping with the belief that a happy customer is the best endorsement .ICICI Prudential has embraced the Six Sigma approach to quality, an exercise that begins and ends with the customer from capturing his voice to measuring and responding to his experiences. This initiative is currently helping the company improve processes, turnaround times and customer satisfaction levels. Another novel introduction is the ICICI Prudential Lifestyle rewards Club, Indias first rewards programme for Life Advisors it allows ICICI Prudential Advisors to redeem points for items ranging from kitchenware to gold, white goods, and even international holidays.
PROMOTION ICICI Prudential is a case study in how advertising and marketing can play a vial role in re shaping an industry. It has demonstrated how an industry where the customer was nothing more than a policy
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number has changed to one where customer preference rules the roost. Brand building in a complex category like life insurance is an uphill and multi faceted task. At the time of launching operations, the communications task was to build credibility, so as to give the customer the confidence that it was a company that could be trusted to invest funds with . the aim was to encourage people to view insurance not as a compulsory tax saving instrument , but as a means to lead a worry-free , secure life and in the process, create the differentiator for brand ICICI Prudential. The brand proposition for all the campaigns was reflected in the line: Suraksha: Zindagi ke har kadam par. The campaign featured a significant competitive advantage, the sound financial backing and credentials of ICICI and Prudential, and showcased products from different segments. The advertising idea was encapsulated in the symbol of protection-the Sindoor. This campaign contributed extensively to raising brand awareness and creating a distinctive identity for the company. At the same time the theme of protection was carried forward with ICICI Prudentials Safe Puja contest where Puja Pandals contested to be the Safest Puja Pandal. This beautifully tied in the concept of protection with the popular local event of Durga Puja. The refreshingly different Retire from work, not life campaign succeeded in bringing retirement planning into the consideration set of a younger target audience, and won a Silver Effie for its efforts. The media campaign was complemented by seminars to spread awareness about the need for retirement planning. Very recently, the company launched a new corporate campaign-an extension of the Sindoor communication which aims at reassuring customers that the company is committed to staying with them through all the ups and downs in life, using marriage and the seven vows or Saat Pheras as a metaphor for commitment. The campaign aims at strengthening the brand by memorably bringing out the commitment for life element continuous efforts to reach out to customers in new and innovative ways, the company recently tied up with the Forbes Six Sigma rated Dabbawalla organisation in Mumbai for a direct marketing exercise. In a unique effort to create awareness about a tax-saving product, the company attached a creative of a bitten apple to Mumbais ubiquitous lunchboxes. It worked wonderfully with Mumbais office-goers and one that translated into substantial business for the company.
BRAND VALUES
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Market research reveals that the values people associate with ICICI Prudential are, indeed, those that the company hopes to project: lifelong protection and value for money. The core value is protecting your loved ones, throughout lifes ups and downs. It is a powerful proposition: one, which ICICI Prudential, is taking into the marketplace. THINGS DIDNT KNOW ABOUT ICICI PRUDENTIAL The logo is the combination of ICICI Banks I-man and Prudentials lady prudence. The I-man signifies the dynamic individual with drive and conviction, while Prudence epitomizes wise conduct. Every three minutes ICICI Prudential protects one more Indian life. ICICI Prudential is the only Indian life insurance company to have an equity base of more than rupees 5bn. ICICI Prudential is the only life insurance company to implement a six sigma quality programme. Of the companys 2000+ employees, less than 5% have prior experience in the life insurance industry. The average age of its employees is 29 years.
COMPANY PROFILE
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BIRLA SUN LIFE INSURANCE

A collaboration of the US$ 6.0 billion Aditya Birla Group and the US$16.7 billion Sun Life Financial of Canada, the group brings together global and Indian expertise to the area of financial services. Vision To be a world class provider of financial security to individuals and corporates and to be amongst the top three private sector life insurance companies in India. Mission To be the first preference of our customers by providing innovative, need based life insurance and retirement solutions to individuals as well as corporates. These solutions will be made available by well-trained professionals through a multi channel distribution network and superior technology. Our endeavour will be to provide constant value addition to customers throughout their relationship with us, within the regulatory framework. We will provide career development opportunities to our employees and the highest possible returns to our shareholders. VALUES Integrity Transparency Customer Focus Excellence Innovation Meritocracy Respect for the Individual
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COMPANY PROFILE HDFC STANDARD LIFE INSURANCE

THE PARTNERSHIP HDFC and Standard Life first came together for a possible joint venture, to enter the Life Insurance market, in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. In October 1995 the companies signed a 3 year joint venture agreement. Around this time Standard Life purchased a 5% stake in HDFC, further strengthening the relationship. The next three years were filled with uncertainty, due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. Despite this both companies remained firmly committed to the venture. In October 1998, the joint venture agreement was renewed and additional resource made available. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. Towards the end of 1999, the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. Therefore, in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team, based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. The Mutual Fund was launched on 20th July 2000.
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INCORPORATION OF HDFC STANDARD LIFE INSURANCE COMPANY LIMITED: The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited. Our ambition from as far back as October 1995, was to be the first private company to re-enter the life insurance market in India. On the 23rd of October 2000, this ambition was realised when HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while Standard Life owns 18.6%. Given Standard Life's existing investment in the HDFC Group, this is the maximum investment allowed under current regulations. HDFC and Standard Life have a long and close relationship built upon shared values and trust. The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance company's in India are measured. MISSION: We aim to be the top new life insurance company in the market. This does not just mean being the largest or the most productive company in the market, rather it is a combination of several things like
Customer service of the highest order Value for money for customers Professionalism in carrying out business Innovative products to cater to different needs of different customers Use of technology to improve service standards Increasing market share
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THEORETICAL BACKGROUND
Unit Linked Insurance Plan [ULIP] ULIP-Key Features Market Factoid How to pick the best ULIP fund category
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UNIT LIKED INSURANCE PLAN (ULIP)

Insurance is a provision against risk and it is a device with which man tries to protect himself from risk in life. The recent development in the financial innovation is Unit Link Insurance Policy (ULIP), which covers the concept of insurance. A Unit Link Insurance Policy (ULIP) is one in which the customer is provided with a life insurance cover and the premium paid is invested in either debt or equity products or a combination of the two. In other words, it enables the buyer to secure some protection for his family in the event of his untimely death and at the same time provides him an opportunity to earn a return on his premium paid. In the event of the insured person's untimely death, his nominees would normally receive an amount that is the higher of the sum assured or the value of the units (investments). To put it simply, ULIP attempts to fulfill investment needs of an investor with protection/insurance needs of an insurance seeker. It saves the investor/insurance-seeker the hassles of managing and tracking a portfolio or products.
Various Schemes However, there are some schemes in which the policyholder receives the sum assured plus the value of the investments. Various schemes have been tailored to suit different customer profiles and, in that sense, offer a great deal of choice. The advantage of ULIP is that since the investments are made for long periods, the chances of earning a decent return are high. Just as in the case of mutual funds, buyers who are risk averse can buy debt schemes while those who have an appetite for risk can opt for balanced or equity schemes.
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ULIP - Key Features 1. Premiums paid can be single, regular or variable. The payment period too can be regular or variable. The risk cover can be increased or decreased. 2. As in all insurance policies, the risk charge (mortality rate) varies with age. 3. The maturity benefit is not typically a fixed amount and the maturity period can be advanced or extended. 4. Investments can be made in gilt funds, balanced funds, money market funds, growth funds or bonds. 5. The policyholder can switch between schemes, for instance, balanced to debt or gilt to equity, etc. 6. The maturity benefit is the net asset value of the units. 7. The costs in ULIP are higher because there is a life insurance component in it as well, in addition to the investment component. 8. Insurance companies have the discretion to decide on their investment portfolios. 9. They are simple, clear, and easy to understand. 10. Being transparent the policyholder gets the entire episode on the performance of his fund. 11. Lead to an efficient utilisation of capital.
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12. ULIP products are exempted from tax and they provide life insurance. 13. Provides capital appreciation. 14. Investor gets an option to choose among debt, balanced and equity funds.
Cover-Plus In a sense, unit-linked plans work like endowment plans-they combine insurance with investment. A part of the premium you pay goes towards buying you insurance cover and what's left of the rest (after deducting a host of charges-from fund management to administration expenses) is invested in equity and debt instruments. The investment component of the premium is converted into units-much like mutual fund units, to be bought and sold at the prevailing Net Asset Value (NAV); your premiums are unitised through the policy tenure, typically 15 or 20 years. Investment gains will accrue from an appreciation in the value of your units, and information on this is put out regularly by insurers. Expenses One area where unit-linked plans come in for widespread criticism relates to the expenses that insurers charge under three broad heads: mortality charges (which goes towards paying for your insurance cover), general expenses (agents' commissions and underwriting costs), and fund management costs. The second head, general expenses, accounts for the biggest component-typically, around 40 per cent (of the premium paid) in the first two years, which goes down sharply in later years. The actual expense structure may vary from one product to another depending on, among other things, the amount invested, the investment tenure and the period beyond which withdraws are permitted. Should Investor Opt for ULIP
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First and foremost, investors need to understand that a ULIP is a bundled product of their investment and their insurance proceeds. So if you have a ULIP invest in equities, you are exposing your life insurance monies as well as your investible surplus to the vagaries of equity market. While it is fine and even sensible to let your investible assets get an equity flavour, the same cannot be said about your life insurance monies, which to a large extent should be scared. A ULIP policyholder has the option to invest in a variety funds, depending on his risk profile. If one does not have appetite to invest in equity, they can choose a debt or balanced fund. However, the structure of a ULIP takes care of quite a bit of the uncertainty in the markets. Insurance companies understand the need to give insurance seekers the flexibility to rethink their investment strategy in view of market histrionics. It is the investors to make the right switch they need to track markets actively and be well informed, which is actually the job of the investment advisor/consultant.
ULIP is suitable for individuals who are already adequately insured and are reasonably well informed and savvy to take active investment decisions by using the 'switch option' that is provided to a ULIP policyholder. Also policyholders with regular endowment plans that are not satisfied with the 4-6 per cent returns can consider taking a ULIP with a lower equity component. Market Factoid 1. The growth options of ULIP have recorded annualised returns of over 20 per cent. 2. Various charges amounting to approximately 25 per cent in the initial years in all the schemes. 3. Most companies normally allow customers to switch, a fixed number of times annually from one fund to other fund. Later, they charge approximately Rs.100 per switch. 4. Private insurance companies 50 per cent sales up because of ULIPs today.
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5. Individuals availing tax exemption under section 88 of Income Tax Act. 6. New Schemes coming into the market, which covers life insurance and accident insurance.
HOW TO PICK THE BEST ULIP FUND CATEGORY ULIP's today offer fund options like equity, debt, balanced, moneymarket, gilt and many more. These funds require an individual to keep his funds locked in for a considerable period of time. It is a known fact that the two main categories of investments - debt and equities vary vastly in their risk and return profile. While debt is less risky and offers low returns, equities are high risk but have the capacity to offer high returns. Time period also is a factor. Equities, say experts, are learnt to prove much more profitable when invested in the long run. It is your risk profile and appetite that will determine which fund would be the best for you. And if you think risk cannot be measured, then you are only partly correct. Risk is a culmination of various factors. The quantum or risk that you can take is linked to your responsibilities. Some of the parameters that you might want to consider in order to assess your risk capacity are whether you are single or you have a dependent wife, whether you have dependent children, whether
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you have dependent parents, how many more working years do you have in you and how long will it be before your retire. So remember that what fund may be good for your neighbor may not necessarily be the best for you. Also remember that allocation would depend on the overall outlook of the economy
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Status Age 25 Single -
Risk profile Can take high risk on
Age 30 Married with no kids Age 33 Married with dependent kids Age 58 Kids are not dependent anymore
Can still take on high risks as you are still young Must balance risks Cannot afford to take risks
Who stands to lose if there is a loss Only you but its okay since you are still young and have a long way to go You and your wife You, your wife and your kids (their education) You and your wife but this time its not okay since you will retire soon and there will be no income flow
Asset allocation 85% equities 5% bonds 10% liquid assets 80% equities 10% debt 10% liquid assets 60% equities 20% debt 20% liquid assets 30% equities 20% debt 50% liquid assets
Insurance companies offer a very good way around this issue. Companies will allow you to shift between funds. So for instance, if you buy a policy with an equity-linked option when you are young and single, few years later you can shift to a balanced fund and then when you think that you have taken enough risks, you can stay put in a debt fund.
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Data collection Analysis
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PRODUCT DETAILS AND COMPARISON

COMPANY: ICICI PRUDENTIAL PRODUCT: INVEST SHIELD CASH Invest shield cash is a unit linked insurance product with capital guaranty. The capital guaranty is on the invested premiums and the declared bonuses during the term of the product. This is an ideal solution for a long term protection and investment requirement. This product provides a cost effective, transparent and value for money with the added advantage of liquidity, financial solution to the customers by investing in various debt instruments and providing the safety of a capital guaranty. How to start Choose a term from 10 to 30years and a minimum premium of: Rs.8, 000 p.a. for annual premium payment Rs.4, 000 for half-yearly premium payment Rs.667 per month for monthly premium payment How does Invest Shield cash work? 1. Invest Shield cash provides an option to select a specific level of Insurance amount (sum assured) as per the needs. 2. Premium paid by policy holder, net of all charges (initial charges, administration charges, mortality charges etc.) is invested in unit funds. 3. The asset allocation under unit fund is 100% in debt. 4. Investment value is equal to no. of units allocated, multiply by net asset value of the fund. 5. The guaranteed value of your unit fund is the value of your invested premium (net of all the charges), along with all the accrued bonus interest, this will remain guaranteed on death or maturity.
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BENEFITS
1. Death Benefit In the unfortunate event of death, his familys financial future is Protected by an amount, which is equal to the sum of Insurance Amount and higher of the value of your unit fund or the guaranteed Value of unit fund. 2. Maturity Benefit At the end of the term, higher the value of your unit fund or the Guaranteed of your unit fund will be paid. 3. Liquidity Benefit Withdraw up to 10% of the value of unit fund every year from the Sixth year onwards. 4. Enhanced savings with additional credits To enhance the savings, additional credits are paid in lump sum on death or maturity. Additional credit increases with the increase in term of the policy. The additional credits structure would be as follows
Year of Additional Credits End of the 5 policy year End of the 10 policy year End of the 15 policy year End of the 20 policy year End of the 25 policy year End of the 30 policy year % of the Initial Annual Premium 10% 15% 20% 25% 30% 35%
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5. Surrender option option to completely withdraw from the policy after paying the 1st year premium. 6. Add on riders: Rider is an additional benefit along with the insurance amount to give the policy holder total protection at a marginal extra premium .The riders available With this plan are : a) Accident and Disability Benefit Rider b)Waiver of Premium Rider c) Critical Illness Rider
Flexibilities
1. Choice to invest any surplus cash If a policy holder has any surplus funds which he want to invest then, Invest Shield Cash gives him an option to invest those surplus funds in existing plan. This facility is called as top-up facility. 2. Flexible Premium The policy holders have the option to increase/decrease his annual premium. 3. Automatic Premium Payment This is a facility provided by this plan where in the insurance cover Under the policy continue even if there is a temporary break in the Payment of premium. 4. The limits or conditions applicable: Minimum age at entry: 0 years Maximum age at entry: 65 years Maximum age at maturity: 75 years Minimum term: 10 years Maximum term: 30 years Minimum sum assured: Rs 1, 00,000 42
5. Premium allocation and other charges: a) Premium allocation: The premium allocation would be based on the annual premium. The yearly allocation schedule would be as follows: % Allocation of Premium Premium in 1st year 2nd year Rupees 8,000-14,999 70% 90% 15,000-24,999 72% 92% 25,000-49.999 75% 92% 50,000+ 77% 92% b) Fixed charges c) Fund related charges d) Mortality charges e) Top-up charges.
3rd year onwards 97% 97% 97% 97%
6.Tax Benefit: The premium paid by policyholder and any amount paid to policyholder under this plan is eligible for tax benefit under Section 80C and Section 10(10D) as per prevailing tax laws.
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PRODUCT: INVEST SHIELD LIFE

Invest shield life is a unit linked insurance product with capital guaranty. The capital guaranty is on the invested premiums and the declared bonuses during the term of the product. This is an ideal solution for a long term protection and investment requirement. This product provides a cost effective, transparent and value for money with the added advantage of liquidity, financial solution to the customers by investing in various debt instruments and providing the safety of a capital guaranty. How to start Choose a term from 10 to 30years and a minimum premium of: Rs.8, 000 p.a. for annual premium payment Rs.4, 000 for half-yearly premium payment Rs.667 per month for monthly premium payment How does Invest Shield life work? 1. Invest Shield life provides an option to select a specific level of Insurance amount (sum assured) as per the needs. 2. Premium paid by policy holder, net of all charges (initial charges, administration charges, mortality charges etc.) is invested in unit funds. 3. The unit fund has the asset allocation of 70%(min) in debt & 30% (max) in equity. 4. Investment value is equal to no. of units allocated, multiply by net asset value of the fund. 5. The guaranteed value of your unit fund is the value of your invested premium (net of all the charges), along with all the accrued bonus interest, this will remain guaranteed on death or maturity.
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BENEFITS
1. Death Benefit In the unfortunate event of death, his familys financial future is Protected by an amount, which is equal to the sum of Insurance Amount and higher of the value of your unit fund or the guaranteed Value of unit fund. 2. Additional protection with Extended Life Cover After the maturity of the policy, the policy holder has to be covered for another 10 years for a 50% of Sum Assured. 3. Maturity Benefit At the end of the term, higher the value of your unit fund or the Guaranteed of your unit fund will be paid. 4. Enhanced savings with additional credits To enhance the savings, additional credits are paid in lump sum on death or maturity. Additional credit increases with the increase in term of the policy. The additional credits structure would be as follows % of the Initial Year of Additional Annual Premium Credits End of the 5 policy year 10% End of the 10 policy year End of the 15 policy year End of the 20 policy year End of the 25 policy year End of the 30 policy year 15% 20% 25% 30% 35%
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5. Loan against policy During the financial requirement, a policyholder can avail of a loan against his Policy without terminating the policy. 6. Surrender option option to completely withdraw from the policy after paying the 1st year premium. 7. Add on riders: Rider is an additional benefit along with the insurance amount to give the policy holder total protection at a marginal extra premium .The riders available With this plan are : a) Accident and Disability Benefit Rider b)Waiver of Premium Rider c) Critical Illness Rider
Flexibilities
1. Choice to invest any surplus cash If a policy holder has any surplus funds which he want to invest then, Invest Shield Cash gives him an option to invest those surplus funds in existing plan. This facility is called as top-up facility. 2. Flexible Premium The policy holders have the option to increase/decrease his annual premium. 3. Automatic Premium Payment
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This is a facility provided by this plan where in the insurance cover Under the policy continue even if there is a temporary break in the Payment of premium.
4. The limits or conditions applicable: Minimum age at entry: 0 years Maximum age at entry: 55 years Maximum age at maturity: 65 years Maximum cover ceasing age:75 years(including Extended Life Cover) Minimum term: 10 years Maximum term: 30 years Minimum sum assured: Rs 1, 00,000 5. Premium allocation and other charges: a) Premium allocation: The premium allocation would be based on the annual premium. The yearly allocation schedule would be as follows: Premium Rupees < 15,000 15,000-24,999 25,000-49.999 50,000+ % Allocation of Premium in 1st year 2nd year 70% 72% 75% 77% 90% 92% 92% 92%
3rd year onwards 97% 97% 97% 97%
b) Fixed charges c) Fund related charges d) Mortality charges e) Top-up charges. 6.Tax Benefit:
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The premium paid by policyholder and any amount paid to policyholder under this plan is eligible for tax benefit under Section 80C and Section 10(10D) as per prevailing tax laws.
PRODUCT: INVEST SHIELD GOLD

Invest shield gold is a limited premium paying unit linked insurance product with capital guaranty. The capital guaranty is on the invested premiums and the declared bonuses during the term of the product. This is an ideal solution for a long-term protection and investment requirement period. This product provides a cost effective, transparent and value for money with the added advantage of liquidity, financial solution to the customers by investing in various debt instruments and providing the safety of a capital guaranty. How to start Start with a minimum premium of. Rs.25, 000 for annual premium payment Rs.12, 500 for half-yearly premium payment Rs.2, 084 per month for monthly premium payment How does Invest Shield Gold work? 1. Invest Shield Gold provides you an option to select a specific level of Insurance amount (sum assured) as per you needs. 2. Premium paid by policyholder, net of all charges (initial charges, administration Charges, mortality charges etc.) is invested in unit funds. 3. The unit fund has the asset allocation of 70%(min) in debt & 30% (max) in equity. 4. Investment value is equal to no. of units allocated, multiply by net asset value of the fund.
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5. The guaranteed value of your unit fund is the value of your invested premium (net of all the charges), along with all the accrued bonus interest, this will remain guaranteed on death or maturity.
BENEFITS
1. Death Benefit In the unfortunate event of death, his familys financial future is Protected by an amount, which is equal to the sum of Insurance Amount and higher of the value of your unit fund or the guaranteed Value of unit fund. 2.Maturity Benefit At the end of the term, higher the value of your unit fund or the Guaranteed of your unit fund will be paid. 3.Liquidity Benefit Withdraw up to 10% of the value of unit fund every year from the Sixth year onwards. 4. Enhanced savings with additional credits To enhance your savings, additional credits are paid in lump sum on Death or maturity. Additional credit increases with the increase in term Of the policy. 5.Limited premium paying terms In order to avoid long term financial commitments, your have a choice To pay the premium within 5,7 & 10 years depending upon the term You chose. 6. Loan against policy During financial requirement, policy holder can avail of against his Policy without terminating policy. a loan
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7. Surrender option option to completely withdraw from the policy after paying the 1st year premium.
8. Add on riders Rider is an additional benefit along with the insurance amount to Give the total protection at marginal extra premium .The riders available With this plan are : a) Accident and Disability Benefit Rider b) Critical Illness Rider
Flexibilities
1. Choice to invest any surplus cash If a policy holder has any surplus funds which he want to invest then, Invest Shield Cash gives him an option to invest those surplus funds in existing plan. This facility is called as top-up facility. 2. Flexible Premium A policy holder has option to increase/decrease his annual premium. 3. Automatic Premium Payment This is a facility provided by this plan where in the insurance cover Under the policy continue even if there is a temporary break in the Payment of premium. 4. The limits or conditions applicable: Minimum age at entry: 0 years Maximum age at entry: 65 years Maximum age at maturity: 75 years
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Minimum sum assured: Rs 1, 00,0005. Premium allocation and other charges:
Charges
a) Premium allocation: The premium allocation would be based on the annual premium. The yearly allocation schedule would be as follo
Premium Rupees 25,000-49,999 50,000-4,99,999 5,00,000+
% Allocation of Premium in 1st year 2nd -3rd year 81% 85% 88% 90.5% 95% 95%
4th-5th year 97% 97% 97%
b) Fixed charges c) Fund related charges d) Mortality charges e) Top-up charges. 5.Tax Benefit: The premium paid by policyholder and any amount paid to policyholder under this plan is eligible for tax benefit under Section 80C and Section 10(10D) as per prevailing tax laws
PRODUCT: INVEST SHIELD PENSION

Invest shield pension is a unit linked insurance product with capital guaranty; especially for the purpose of accumulation for retirement savings. . The capital guaranty is on the invested premiums and the declared bonuses during the term of the product. This is an ideal solution for a long term protection and investment requirement.
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This product provides a cost effective, transparent and value for money with the added advantage of tax benefits under section 80 CCC (1), financial solution to the customers by investing in various debt instruments and providing the safety of a capital guaranty. How to start Choose a term from 10 to 30years and a minimum premium of: Rs.10, 000 p.a. for annual premium payment Rs.5, 000 for half-yearly premium payment Rs.834 per month for monthly premium payment How does Invest Shield pension work? 1. Invest Shield pension provides an option to select a specific level of Insurance amount (sum assured)or Zero insurance amount as per your need. 2. Premium paid by policy holder, net of all charges (initial charges, administration charges, mortality charges etc.) is invested in unit funds. 3. The unit fund has the asset allocation of 70%(min) in debt & 30% (max) in equity 4. Investment value is equal to no. of units allocated, multiply by net asset value of the fund. 5. The guaranteed value of your unit fund is the value of your invested premium (net of all the charges), along with all the accrued bonus interest, this will remain guaranteed on death or maturity.
BENEFITS
1.Benefits on Retirement At the end of the term of saving (at the retirement age), higher the value of Unit Fund or the Guaranteed Value of Unit Fund will be used to buy an pension as per choice. 2. Death Benefit In the unfortunate event of death, his familys financial future is Protected by an amount, which is equal to the sum of Insurance Amount and higher of the value of your unit fund or the guaranteed Value of unit fund. 52
3. Enhanced savings with additional credits To enhance the savings, additional credits are paid in lump sum on death or maturity. Additional credit increases with the increase in term of the policy. The additional credits structure would be as follows Year of Additional Credits End of the 5 policy year End of the 10 policy year End of the 15 policy year End of the 20 policy year End of the 25 policy year End of the 30 policy year % of the Initial Annual Premium 10% 15% 20% 25% 30% 35%
4. Surrender option option to completely withdraw from the policy after paying the 1st year premium. 5. Add on riders Rider is an additional benefit along with the insurance amount to give the policy holder total protection at a marginal extra premium .The riders available With this plan are : a)Accident and Disability Benefit Rider b)Waiver of Premium Rider
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Flexibilities
1. Choice to invest any surplus cash If a policy holder has any surplus funds which he want to invest then, Invest Shield pension gives him an option to invest those surplus funds in existing plan. This facility is called as top-up facility. 2. Flexible Premium The policy holders have the option to increase/decrease his annual premium. 3. Automatic Premium Payment This is a facility provided by this plan where in the insurance cover Under the policy continue even if there is a temporary break in the Payment of premium. 4. Annuity options at the time of retirement (vesting date ) the policy holder can choose to receive his pension in five different ways, sassed on his postretirement needs. 5. The limits or conditions applicable Minimum age at entry: 18years Maximum age at entry: 60 years (with sum assure plans),65 years (zero sum assured plans). Minimum age at vesting: 45 years Maximum age at vesting: 75 years Minimum term: 10 years Maximum term: 30 years
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6. Premium allocation and other charges a) Premium allocation: The premium allocation would be based on the annual premium. The yearly allocation schedule would be as follows:
Premium Rupees <50,000 73% > = 50,000- 77% 24,999 b) Fixed charges
% Allocation of Premium in 1st year 2nd year 90% 92%
3rd to 10th year 98% 98%
c) Fund related charges d) Mortality charges e) Top-up charges.
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7.Tax Benefit: The premium paid by policyholder and any amount paid to policyholder under this plan is eligible for tax benefit under Section 80C and Section 10(10D) as per prevailing tax laws.
COMPARISON OF INVEST SHIELD PRODUCTS 0F ICICI PRUDENTIAL
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Features Min age at entry Max age at entry Max age at maturity Min term Max term Min premium Min sum assured
Invest Shield Life 0 55 65 10
Invest Shield Cash 0 60 75 10
Invest Shield Gold 0 60 75
30 8000pa Higher of premium *5 or 1 lac Fund Debt min 70% Equity max 30% Riders ADBR,WOPR,CIBR Premium allocation 1 year <15000 70% 15000-24999 72% 25000-49999 50000+ 77% < 90% 15000+ 92% Rs 50 pm 1.25 pa 1% NA 75%
2 year
15000
3 year onwards Fixed charges Fund charges Top up charges Withdrawal option Death benefit
97%
SA+higher of value of unit fund or the guaranteed value of unit fund
Payment term: 05 07 10 30 Maturity term : 10 15 20 8000pa 25000pa Higher of premium 1 lac *5 or 1 lac Debt 100% Debt min 70% Equity max 30% ADBR,WOPR,CIBR ADBR, CIBR Year 1 2-3 4-5 6-10 <15000 <50K 81% 92.5% 97% 70% 9% 15000-24999 72% <500k 85% 95% 97% 99% 25000-49999 75% 500k+ 88% 95% 97% 99% 50000+ 77% < 15000 90% 15000+ 92% 97% Rs 50 pm Rs 50 pm 1.25 pa 1.25 pa 1% 1% Once in a year from Once in a year from 6th year 6th year onwards- onwards-10% value of the 10% value of the unit fund unit fund SA+higher of value SA+higher of value of unit of unit fund or the fund or the guaranteed value guaranteed value of of unit fund unit fund
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Maturity benefit
Higher of value of unit fund or the guaranteed value of unit fund Additional credit 10% of initial (%of initial premium at the end premium) of 5th policy year and thereafter every 5th year increment of 5% Extended life Post maturity 50% of cover SA for next 10 years. Surrender values Possible after 1 year Loan Available(on surrender value) Flexible contribution Max decrease can be 20% of initial premium at no point of time premium can be reduced to below min premium or 80% of initial premium whichever is higher. Only after 3 policy years term<15 once,>15 twice
Higher of value of unit fund or the guaranteed value of unit fund 10% of initial premium at the end of 5th policy year and thereafter every 5th year increment of 5% NA Possible after 1 year NA Max decrease can be 20% of initial premium at no point of time premium can be reduced to below min premium or 80% of initial premium whichever is higher. Only after 3 policy years term<15 once,>15 twice
Higher of value of unit fund or the guaranteed value of unit fund PPT5 2%(5) 2.5%(7) 3%(10) NA Possible after 1 year Available(on surrender value) Max decrease can be 20% of initial premium at no point of time premium can be reduced to below min premium or 80% of initial premium whichever is higher. NA PPT7 PPT10 2.5%(7) 3%(10) 3%(12) 3.5%(15) 3.5%(15) 4%(20)
Automatic premium payment
ANALYSIS
The min age of entry in all the above plans is Zero. The max age of entry in Invest Shield life is 55 and in case of Invest Shield Cash & Gold is 60 years. The max age at maturity in invest shield life is 65 yrs and 75 yrs in invest shield cash and gold.
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The min and max term in invest shield life and cash is 10 and 30 yrs respectively, where as in invest shield gold the choice of a premium payment term is 5, 7 and 10 years with a corresponding coverage term of 10, 15 and 20 years. Min contribution in invest shield life and cash is Rs.8000pa where as Rs.25000pa in invest shield gold, which covers extra life. The asset allocation of unit fund is min 70% in Debt and max 30% in equity, in invest shield cash 100% asset invest in Debt.
ADBR,WOPR & CIBR are providing in invest shield life and cash but in case of invest shield gold WOPR is not possible.
In case of invest shield cash and gold from the sixth year onwards, till the end of the term the policyholder has the option to withdraw 10% of the value of the units form his unit fund, but this withdrawal facility is not available in invest shield life plan.
In case of death of the policyholder, sum assure + higher of value of unit fund or the guaranteed value of unit fund will be given in all the above three plans.
In maturity benefit, higher of value of unit fund or the guaranteed value of unit fund will be given.
Additional credit facilities are available in all the above three plans. In case of invest shield, after the maturity of the plan the policyholder can receive an insurance cover for additional 10 years @50% of sum assured ,but this facility is not available in invest shield cash and gold.
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Surrender of policy is possible in all the three plans after the completion of first year.
A policy holder can avail a loan benefit after the policy has acquired a surrender value in invest shield life and gold but this benefit is not available in case of invest shield cash.
A policy holder can increase or decrease his annual premium in all the plans.
In case of invest shield life and cash automatic premium payment is possible when policyholder is disable to pay premiums due to a temporary financial constraint. But this facility is available in invest shield gold.
Rebate and tax benefits available u/s 88 and sec.10(10) in all the above three plans
Calculation of Risk, Return and Stability

Risk, Return and Stability helps the investors to know which product is giving what return and how much risk is involved and what is the stability of that product . For the calculation of Risk, Return and Stability, taken monthly average Nat Asset Value of respective product. ICICI PRUDENTIAL _ _ _ ISL ISG ISC u=x-x v=y-y w=z-z (X) (Y) (Z) u2 v2 10.05 9.99 9.99 -0.09 0.0081 -0.16 0.0256 -0.16 10.14 10.07 10.07 0 0 -0.08 0.0064 -0.08
Months April May
w2 0.0256 0.0064
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June July Total
10.18 10.19 10.19 0.04 10.21 10.35 10.35 0.07 40.58 40.6 40.6 0.02 ISC: Invest Shield Cash ISL: Invest Shield Life ISG: Invest Shield Gold
0.0016 0.04 0.0049 0.02 0.0146 0
0.0016 0.04 0.04 0.2 0.0736 0
0.0016 0.04 0.0736
CALCULATION OF RETURNS: _ X = X/n = 40.58/4 = 10.14 _ Y =Y/n = 40.60/4 = 10.15 _ Z = Z/n = 40.60/4 = 10.15 CALCULATION OF RISK S.D.(STANDARD DEVIATION) S.D.x = = _______________ u2/n-(u/n)2 ________________ 0.0146/4-(0.02/4) 2
= 0.06 _______________ = v2/n-(v/n)2 ______________ = 0.0736/4-(0/4) 2 = 0.135 _______________
S.D.(STANDARD DEVIATION) S.Dy
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S.D.(STANDARD DEVIATION) S.D.z
= w2/n-(w/n)2 ________________ = 0.0736/4-(0/4)2 = 0.135
CALCULATION OF STABILITY: C.V.(Coefficient of Variation) C.V.x C.V.y C.V.z = = =` = =` = = S.D./ Mean* 100
0.06/10.14*100 0.59% 0.135/10.15*100 1.33% 0.135/10.15*100 1.33%
Interpretation: The returns of all the 3 plans are more are less same i.e. 10.14, 10.15& 10.15 respectively. When we compare risks, in ISC it is less, because in this plan they are investing wholly in Debt instruments. Where as in ISL & ISG risk is more because, in these 2 plans they are investing 70% in Debt and 30% in equity market. The stability is good in ISC when compare to ISL & ISG.
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COMPARISON OF ICICI PRODUCTS WITH COMPETITORS PRODUCTS

COMPANY: BIRLA SUN LIFE INSURANCE PRODUCT: FLEXI SECURE LIFE RETIREMENT PLAN: The Birla Sun Life Flexi Secure Life Retirement Plan brings two options The Single Premium Plan and The Regular Premium Plan, which offers benefits to meet specific retirement planning needs. About.the.Plan The Birla Sun Life Flexi Secure Life Retirement Plan is a Unit Linked plan. The plan is designed in two phases; the build up or the Accumulation phase and the Annuity or the payout phase. In the Accumulation phase the policyholder make regular contributions to build an egg nest on retirement. He can utilize this amount to buy an Annuity which can take care of the needs post retirement. Deposit In the accumulation phase, the minimum amounts can deposit are Rs. 20,000 under the Single Premium Plan and Rs. 5,000 under the Regular Premium Plan. Investment.options the policyholder can choose from three Investment options depending on risk appetite during the accumulation phase of plan.
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The three investment options are: Nourish Growth Enrich
Entry.age The minimum age at entry should be 18 years and the maximum age for entry is 65 years for both Single Premium Plan and the Regular Premium Plan. Vesting-age Vesting age is the age at which the policy benefits will be available for purchase of an annuity. The policy holder can choose from any of the vesting ages between 50 years and 70 years subject to the minimum tenure of the plan as under: 5 years for Single Premium Plan; and 10 years for Regular Premium Plan
Partial Surrenders The plan gives you the option to make partial surrenders from the Policy Fund once every year after the age of 55 years These can be made after the completion of three Policy Years
Upper limit of Investment Fund Option percentage of assets in: Nourish Growth Government and 100% 100% government approved securities
Enrich 100%
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Rated corporate bonds Money market and other liquid assets Infrastructure sector as defined by the IRDA Listed equities
30% 20% 25% 10%
30% 20% 25% 20%
30% 20% 25% 35%
PLAN BENEFITS: On the date of vesting, the policy holder can either: Utilize the entire Policy Fund to purchase any annuity provided by us then and at the then prevailing rates or buy an annuity from any other company in the market. Withdraw one third of the policy fund as a lump sum and utilise the remaining portion of the fund to purchase any annuity provided by us then and at the then prevailing rates or buy an annuity from any other company in the market; or The following annuity options are currently offered by the Company: Life Annuity guaranteed for 20 years and payable thereafter for life. Life Annuity with return of purchase price less the payouts made till the death of the Annuitant.
Life-Insurance-Cover The policy holder can opt for a life insurance cover in his Retirement Plan till the vesting age. The minimum face amount for the life insurance cover will be Rs. 22,000 under the Single Premium Plan and Rs. 50,000 under the Regular Premium Plan. 65
Death-Benefit 1) Upon the death of the Life Insured under a Single Premium Policy which provides a Life Insurance Coverage, will be paid to the Claimant the higher of: . The Policy Fund; or . The Life Insurance Coverage Face Amount 2) Upon the death of the Life Insured under a Regular Premium Policy which provides a Life Insurance Coverage, we will pay to the Claimant the higher of: .The Policy Fund; or . The Life Insurance Coverage Face Amount less any partial surrenders made. following options to utilize the death benefit: . Receive the entire amount as a lump sum . Receive one third of the benefit as a lump sum and utilize the rest to purchase an Annuity* . Utilize the entire amount to purchase an Annuity.
Optional Riders Critical Illness / Critical Illness Plus / Critical Illness Woman Level Term Assurance Accidental Death & Dismemberment Tax Benefits Premiums paid under this plan (currently up to Rs. 10,000) will be eligible for tax benefits as per Section 80 CCC(1) of the Income Tax Act, 1961. Surrender-Benefits surrender of policy is possible in the plan. Policy-Fees-and-Charges The policy loading fee is an up-front charge and varies as per the premium payment mode and the policy year:
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Charges:
Charges towards cost of the insurance will be deducted by cancellation of units at the prevailing unit price on a monthly basis.
Fund-switching-charges In a year two switches between Investment Fund options are free. For every additional switch, a charge not exceeding 1 percent (currently 0.5 percent) of the amount transferred will be levied.
COMPANY: HDFC STANDARD LIFE INSURANCE CO. LTD. PRODUCT: UNIT LINKED PENSION PLAN Unit linked pension policy can greatly help you to meet the financial needs after retirement. The unit linked pension plan is basically an insurance contract, which is designed to provide a retirement income for life. The premiums are invested in units of the investment fund of choice, based on the prevailing unit price. On vesting the value of units will be used to buy your retirement benefits. On earlier death, the beneficiary receives the value of your units plus a cash lump sum of Rs. 1,000.
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Premiums The policyholder can pay the premiums either, regularly, quarterly, halfyearly or annually, and it can be paid by cash, cheque or demand draft. Investment funds The policy is fully unitised with a range of funds to match the needs and approach to risk. The policyholder can choose from the following funds: Liquid fund Secure Managed Defensive Managed Balanced Managed Growth Fund
Switching The policyholder can switch his existing investments from any pension unit linked fund to another pension unit linked fund.
BENEFITS At the chosen vesting date, the unitised fund value will be available to secure pension benefits. Subject to the prevailing regulations, part of this value can be taken in the form of a cash lump sum and the rest converted to an annuity at the rate then offered the company On death, the unitised fund value will be paid along with a cash lump sum of Rs. 1,000. The beneficiary may use the proceeds to purchase pension benefits for the surviving spouse.
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Eligibility The age and term limits for taking out a Unit Linked Pension Plan are: (years) Alteration of the level of premiums Minimum Maximu Term m Term Minimum Maximu Minimum Maximum Age at m Age at Age at Age at Entry Entry Vesting Vesting
Regular Premiu 10 40 18 60 50 70 m Version Single Premiu 5 40 18 65 50 70 m Version Regular premiums can be increased at any time. If needed, the policyholder can reduce the regular premium levels (even to zero ie the policy is converted to paid up status) provided:

3 years of regular premiums have been paid The monetary value of the unit holding across all funds is at least Rs 15,000.
Surrender of policy The policyholder can surrender the policy at any point of time during the contract term for regular premium paying.
Tax Benefits Premiums paid under this plan are eligible for tax benefits under Section 80CCC of the Income Tax Act, 1961.
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Charges Investment Content Rate Fund management charge. Alteration to Charges THE CHART SHOWING COMPARISON OF ICICI PRODUCTS WITH COMPETITORS PRODUCTS COMPANYS ICICI PRUDENTIAL Features Age Term Sum assured BIRLA SUN LIFE INSURANCE INVEST SHIELD FLEXI SECURE LIFE PENSION RETIREMENT 18-60 years(65 years RP:18-60 years for a zero death SP:18-60 years benefit option) 10-30years Minimum term of 10 years Option of a zero sum Minimum sum assured assured. The is Rs 50000. zero death policyholder can also benefit is also opt for a sum assured, available. which should be a flat amount calculated as annual contribution term, with the minimum sum assured being Rs 1 lakh. However, no change in the sum assured will be allowed once chosen at the time of inception of the policy. Higher of the value of Unit value is used to the unit fund or the purchase an annuity guaranteed value of the unit fund will be used to purchase an annuity. 70 HDFC STANDERD LIFE INSURANCE UNIT LIKED PENSION PLAN RP:18-60 years SP:18-65 years RP:10-40 years SP:05-40 years The unitized fund value will be available to secure pension benefit. part of this value can be taken in the form of a cash lump sum and the rest converted to an annuity at the rate then offered.
Survival benefit
Unit value is used to purchase an annuity.
Commutation 33.33% of the unit value can be commuted and the rest can be used to purchase an annuity. Death benefit Higher of the value of the unit fund or the guaranteed value of the unit fund in case the sum assured is zero. In case a sum assured is chosen, it will be sum assured + higher of the value of the unit fund or the guaranteed value of the unit fund. Contribution Minimum Rs.10000pa
33.33% of the unit value can be commuted and the rest can be used to purchase and annuity. Value of units 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 units.
33.33% or 1/3%of the unit value can be commuted and the rest can be used to purchase and annuity. Unitized value will be paid along with a cash lump sum of Rs.1000
RP: Minimum RP: Minimum Rs.5000pa Rs.5000pa SP: Minimum Rs. 20000 SP: Minimum Rs.25000 RPs can be increased at any time. If needed, the policyholder can reduce the RP level even to zero i.e. the policy is converted to paid up status provided: 1) 3 years of RP have been paid. 2) the monetary value of the unit holding across all funds is at least Rs 15000. and Liquid Fund, Secure Managed, Defensive Managed, Balanced Managed & Growth Fund.
Flexible Increase or decrease Not available contribution in contributions are permitted. Maximum decrease can be upto 20% of the initial contribution but not below Rs.10000 or 80% of the initial chosen premium, whichever is higher. No cap on increasing the contribution. Investment A single unit fund with Nourish, options an asset allocation of Enrich. minimum 70% in debt and a maximum 30% in equity. Growth
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Surrender The surrender value value of the policy is available after the 1st year and would differ from year to year. The surrender value is paid out as a % of the value of the unit fund. More than 1 year:10%;after 2 years-20%; after 3 years30%------------------after 9 years-90%; after 10years and more: 95%. Automatic If the term of the premium policy is less than 15 payment years, then this facility can be availed once and twice if the term is greater than or equal to 15 years. Increase/Decr Not available ease of death benefit
Surrender is available from the 1st year itself. In the 1st year surrender charges are 75%, in the 2nd year the charges are 50%, in the 3rd year the charges are 25%. There are no charges from the 4th year onwards.
RP: the policy holder can surrender the policy at any point of time during the contract term & For SP contracts, the contract needs to remain in-force for a min. period of 6 months before you surrender. The amount payable will be the unitized fund value after applying additional surrender charges. Not available
Not available
Available. Minimum sum assured change is Rs.50000. The sum assured cannot be decreased below Rs 50000. Additional Additional credits will Not available Not available credits be payable at various point of time during the term. They would be payable as a percentage of the initial premium and are added to the value of the unit fund on death or maturity. End of the 5th policy year: 10% of the initial annual premium End of the 10th policy
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year-15% of the initial annual premium End of the 15th policy year-20% of the initial annual premium End of the 20th policy year-25% of the initial annual premium End of the 25th policy year-30% of the initial annual premium End of the 30th policy year-35% of the initial annual premium Choice of 5 annuity options 2 annuity options annuity Top-up Available, with a Available, with a minimum top-up of minimum top-up of Rs.5000 Rs.10000 Vesting age Minimum vesting age Choose from any of the is 45 years. Vesting vesting ages of age can be postponed 50,55,58,60,65and 70 to 75 years. subject to a minimum term of 5 years. Switch Not applicable. 2 free switches every year. Every additional switch will be charged at 0.5% of the switch amount.
2 annuity options Available, with a minimum top-up of Rs.5000(SP) RP & SP: 50-70 years
Initial charge Allocation of premium <50000:1st year-73%, 2nd year-90%, 3rd -10th year-98%, 11th year onwards-100%.
charges 20% of the initial st premium in the 1 year and 2% of the premium from the 2nd year onwards.
Possible, from any pension unit linked fund to another pension unit linked fund. It is also possible to give a premium redirection instruction to redirect future premiums to different pension unit linked funds. Investment Content Rate Premium paid ICR i) Single Premium initial payment 94% single pre.top-up 99%
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ii) Regular Premium year 1 78% year 2 78% year 3+ 99% regular premiums 99% increases >=50000: 1st year77%, 2nd year-90%, 3rd-10th year-98%, 11th year onwards-100%. Admin charge of Rs.40 pm Regular management charge of 1.25% pa on the fund value ADBR & WOP Available
Admin. Charge Fund management charges Rider Tax Benefit
Policy admin fee of Rs.20pm A fund based fee of 2.25%pa of the policy fund. ADBR, level term & CI Available
Flat fee of Rs.15pm A regular management charges of 0.80% pa on the fund value. ADBR & CI Available
ANALYSIS
The minimum age of entry in all the above three plans is 18 years respectively. The maximum age of entry is 60 years in RP of all the plans and 65 years in case of FSLR and ULPP. Minimum term is 10 years in all the tree plans and maximum term is 30 years in ISP, in FSLR it 30 years and in case of ULPP it is 40 year. The Sum Assured is Rs.1Lakh in case of ISP where as Rs.50000 in FSLR and unitized fund value will be available to secure the pension benefit in case of ULPP. For the Survival Benefit higher of the value of unit fund or the guaranteed value of the unit fund will be used to purchase the 74
annuity in ISP, but in case of FSLR and ULPP only unit value is used to purchase the annuity. 1/3 of the unit value can be commuted and the rest can be used to purchase the annuity in all the three plans. The minimum contribution is Rs.10000 in ISP where as in FSLR Rs.5000 for RP & Rs.20000 for SP and in case of ULPP for RP it is Rs.5000 & Rs.25000 for SP.in case of ULPP. Flexible contribution be available only in case of ISP and ULPP. Investment options are more in case of FSLR and ULPP. Automatic premium payment facility is available only in Isp. The facility of additional credit is available only in ISP. ISP is providing more annuity options compare to other competitors plan. Top up facility is available in all the three plans. Riders are providing by all the companies.
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ICICI PRU ISP Months (X) April May June July Total 9.99 10.08 10.23 10.41 40.71
BSLI HDFC _ FSLR ULPP u = x - x (Y) (Z) u2 0.036 11 19.8 -0.19 1 11.07 20.1 -0.1 0.01 0.002 11.27 20.22 0.05 5 . 0.052 11.32 20.32 23 9 44.6 0.101 6 80.44 0 5
_ v = y y v2 -0.16 -0.09 0.11 0.16 0
_ w = z z w2 0.0961 0.0001 0.0121 0.0441 0.152 4
0.0256 -0.31 0.0081 0.01 0.0121 0.11 0.0225 0.21 0.068 3 0
ISP =Invest shield Pension FSLR =Flexi secure Life Retirement ULPP =Unit Linked Pension Plan CALCULATION OF RETURNS: _ X = X/n _ Y =Y/n _ Z = Z/n = 40.71/4 = 10.18 = 44.66/4 = 11.16 = 80.44/4 = 20.11
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CALCULATION OF RISK S.D.(STANDARD DEVIATION) S.D.x _______________ = u2/n-(u/n)2 ________________ = 0.1015/4-(0/4) 2 = 0.159 _______________ = v2/n-(v/n)2 ______________ = 0.0683/4-(0/4) 2 = 0.130 _______________ = w2/n-(w/n)2 ________________ = 0.1524/4-(0/4)2 = 0.195
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COMPANY: ICICI PRUDENTIAL PRODUCT: LIFE TIME-II Life time-II as a product works as a one stop wholesome financial solution for the customers for their life time, a product that gives the customer the control and flexibility to use it according to differing needs at their different life stages with different human life values. LIFE TIME-II is : A Regular Premium product that has the option of the yearly, half-yearly and monthly modes of premium. An insurance product that works in the form of units, which are issued to the policyholder depending upon the Unit Values and the investment done in the form of premium. An insurance product where the 4 riders are attached namely ADBR, MSAR, CIBR and WOPR. An insurance product with no maturity or maturity values , at any time the value of units is what is the value of the product.
BENEFITS
Death benefit: In case of unfortunate death of the life assured the DeathBenefit Will be higher of the sum assured or the value of the units at the time of death, less any withdrawals made before death. However, in case the life assured is less than 7 years, or more than 70 yers of age at the time of death, the value of units will be paid. Liquidity option There is no maturity date of this policy. Any time after the policyholder have paid the contribution for 3 full years, he can make partial withdrawals at no penalty to meet his immediate requirements. Choice of investment plan:
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The are 4 fund option are available to the policy holder. They areMaxi miser Balancer Protector Preserver Switch between funds The policy holder would have the control to direct his invests depending upon the market conditions by switching the money between the funds. Top ups The policy holder can topup his investment any time as and when he has the surplus fund.
FLEXIBILITY
Flexible sum assured Life time-II offers flexibility to increase or decrease death benefit any time during the term, depending upon changing protection requirement. However, any such increase would be subject to underwriting at the time of such increase or decrease. Flexible contribution The policyholder has the option to increase or decrease his annual premium. Automatic cover continuance This is a facility provided by this plan where in the insurance cover under the policy continues even if there is a temporary break in the payment of premium. However , this facility can be availed subject to two conditions: a) the break in contribution can only be availed, in case contributions till that date are paid off. b) until 10 years premiums have been paid, this facility can be availed for a maximum of 2 years at a time.
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OTHER BENEFITS Bonus units allocation to policyholders The policyholder would be provided with additional allocation of units at the end of the 4th ,8th and 12th policy years. Surrender values The policy holder can surrender the policy after paying 1st years contribution. Loan against the policy During the financial requirements the policyholder can avail of a loan against his policy without terminating the plicy. Charges Premium allocations Administrative and fund management charges Mortality charges Top-up charges Switch charges Limits or conditions applicable Min. age at entry zero years Max. age at entry 60 years. Tax benefits The premiums paid by the policy holder are eligible for tax benefit under section 80C. any amount paid to policyholder in form of withdrawals or other benefits will be eligible for tax benefits under section 10(10D)
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COMPANY: BIRLA SUN LIFE INSURANCE [BSLI] PRODUCT: FLEXI SAVE PLUS ENDOWMENT PLAN Flexi Save Plus Endowment Plan not only offers the advantages of a Unit-Linked plan but also provides the opportunity to make large tax-free savings over a long period. Unique Features Unit- Linked plan to give the efficient earnings in the long term. Three Investment Fund Options: Protector, Builder and Enhancer, with the freedom to switch between funds any time after the first policy year. Flexibility to make additional lump sum investments (top ups) to increase the savings portion of your policy Minimum guaranteed returns of 3% p. a. on premium net of all policy fees and charges. Options to make tax free withdrawals from fund, any time after two years. Loan against policy or surrender of the policy without penalty after 4 policy years. Vary the Face Amount during the Premium Paying Period depending on requirements. Convenient premium payment options: Single Pay, Short Pay or Regular Pay Top Ups Policy holder can top up his Policy Fund with additional amounts whenever he has extra savings. CHARGES Initial charges Administration charges Fund management charges
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COMPANY: BIRLA SUN LIFE INSURANCE [BSLI] PRODUCT: UNIT LINKED ENDOWMENT PLAN
Unit Linked Endowment Plan The unit linked endowment plan is an insurance policy that is designed to pay a lump sum on maturity or on earlier death. The Unit Linked Endowment Plan also gives the option of additional protection against the six common critical illnesses, as well as additional protection if death is as the result of an accident. The premiums are invested in units of the investment fund of policyholders choice, based on the prevailing unit price. On maturity he receives the value of units. On death (or critical illness, if chosen) he receive the greater of the value of units and selected basic sum assured. Premiums A policy holder can pay the premium regularly, quarterly, half-yearly or annually, throughout the term of the policy. The minimum premium amount is Rs. 10,000 each year. Premiums can be paid by cash, cheque or demand draft. Investment funds The policy is fully unitised with a range of funds to match the needs and approach to risk. (By risk mean the likely volatility in the value of units in the fund.) Each investment fund is composed of units. All the units in a fund are identical. The policyholder can choose from the following funds: Liquid fund Secure Managed 82
Defensive Managed Balanced Managed Growth fund
Switching A policyholder can switch his existing investments from any endowment unit linked fund to another endowment unit linked fund. Benefits There are 4 different options available to choose from: 1. Life Option 2. Life and Health Option 3. Extra Life Option 4. Extra Life and Health Option Levels of protection available Depending on the age of entry, a policyholder may choose between 3 levels of cover Low, Medium or High. For each level the Sum Assured is based on the amount of premium he pay each year. Age at Entry 18 to 40 41 to 50 Over 51 Levels of Cover Low 5 x Premium 5 x Premium 5 x Premium Medium 10 x Premium 10 x Premium High 20 x Premium
The Sum Assured cannot be changed during the term of the contract.
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Eligibility
The age and term limits for taking out a Unit Linked Endowment Plan are: (years)
Minimum Term Life Life and Health Extra Life Extra Life and Health 10 10 10 10 Minimum Maximum Age at Term Entry 30 18 30 30 30 18 18 18 Maximum Age at Entry 60 55 55 55 Maximum Age at Expiry 75 65 70 65
Alteration of the level of premiums:
Regular premiums can be increased at any time. If needed, the policyholder can reduce the regular premium levels (even to zero ie the policy is converted to paid up status) provided:

3 years of regular premiums have been paid The monetary value of the unit holding across all funds is at least Rs 15,000.
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Surrender of policy The policyholder can surrender the policy at any point of time during the contract term. The amount payable will be the unitised fund value after applying additional surrender charges mentioned below. Tax Benefits Premiums paid under this plan are eligible for tax benefits under Section 88 of the Income Tax Act, 1961. CHARGES: Investment Content Rate. Fund management charge. Alteration to Charges.
THE CHART SHOWING COMPARISON OF ICICI PRODUCTS WITH COMPETITORS PRODUCTS
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FEATURES Age Term
LIFETIME 0 - 60 years Choice rests with the consumer with a minimum premium payment term of 3 years
BIRLA SUNLIFE FLEXI SAVE PLUS 30 days - 65 years As per policy term - 5, 10, 15, 20, 25, or 30 years or as per maturity age 15,20,25,30, 35 years for minors and 60, 65, 70, 80, years for adults Minimum: Rs.50,000 for minors and Rs.75,000 for adults
FLEXI ENDOWMENT PLAN 18 - 60 years 10 - 30 years
Sum assured
Two levels : Level 1 - A multiple of the annual contribution chosen by the policyholder. A minimum multiple of 7 or a maximum multiple of 150, depending on the age. Level 2 - Sum Assured can be increased with an increase in responsibility and need for insurance. This increase will be 15% of the initial Sum Assured every year from the 3rd policy anniversary till the 9th policy anniversary. However each increase cannot be more than Rs. 300000. The maximum age for entry into this option is 35 years. Value of units (3rd year onwards)
Only 5,10 ,20 (agebased) multiples are allowed as Sum Assured.
Survival benefit
Value of units (3rd year onwards)
Value of units
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Death benefit Sum Assured, Assured or value se or Higher of Sum is subject to of units. However, the value of decrease underwriting. units will be treated as death death benefit if the Life Assured is less benefit than 7 years of age or more than 70 years of age.
Increa Available. Any increase in
Can be done once in Face 5 years. Policy every amount + The Fund (Where the policy minimum amount of is bought on or prior to the change will be the life Rs. 1st birthday of 50,000. This change insured, only Policy Fund willpayable in a change is result to the policy in the premiums to be owner in the event of death of will be subject paid and the life insured within the first policy year) to the permissible limits of minimum Face Amount.
Partial or complete withdrawals are available Minimum guarantee of 3% from the 3rd year p.a. on the In a year 2 onwards. premium net of all charges and free of withdrawals are deductions. every charge. For additional withdrawal a charge of Rs. 100 will be levied. Not available Subject to a minimum face amount of Rs.50,000 for minors and Rs.75,000 for 1adults free switch per year. For every additional switch, a charge of Rs.100 will be levied. The surrender charges will be 100% of the annualised premium for the first 24 months of the policy. It will be 24% in month 25 and will reduce by 1% every month thereafter and will be zero from the 49th month onwards.
Not available
Higher of Sum Assured or value of units. However, the value of units will be treated as death benefit if the Life Assured is more than 70 years of age.
Withdral benefit Bonus units
Partial or complete withdrawals are available from the 3rd year Declared as a % of unit value. onwards Paid at the end of 4th, 8th and 12th policy year. The allocation of the units would only be made if the annual contribution till that date were made in total.
Partial withdrawal available from the 3rd Not available provided year onwards, that the Value of Units does not go below the Sum Assured.
Top-ups Available. Minimum top-up of Contribution Rs. 5000. Charges - 1% of topMinimum: Rs. 18,000 p.a. up. Switch 4 free switches a year, with the minimum switch amount being Rs. 10,000. The policy will acquire a surrender value from the 1st year onwards. The surrender values available to the policyholders is as follows: After 1 year's premium is paid: 25% of the unit value. After 2 years premiums are paid: 40% of the unit value. After 3 years premiums are paid: 60% of the unit value and after 4 years premiums are paid: 100% of units value.
Available Minimum: Rs. 10,000 p.a. Switches are free as of now. But the company reserves the right to put a charge on the switches. The surrender charge is 25% of 3 years outstanding regular premium. No charges after 3 years premiums have been paid.
Surrender value
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Automatic cover continuance
Flexibility
The maximum decrease in the premiums can be upto 20% of the initial premium chosen by the policyholder at the time of inception of the policy. However, in no circumstances can the premium be reduced to below Rs. 18, 000 or 80% of the initial chosen premium, whichever is higher. However, there is no cap on increasing the premium. The premiums can be increased with or without the increase in Sum Assured. Maximiser, Balancer, Protector & Preserver.
Not available
Avai
Initial charges
Investment option
Protector, Builder & Enhancer
5 Fu Bala Mana Liqui
18000- 35,999 : 1st year - 81% ; 2nd - 5th year - 96% ; 6th - 10th year - 98%; 11th year onwards 99%. 36000- 99,999 : 1st year - 83% ; 2nd - 5th year - 96% ; 6th - 10th year - 98%; 11th year onwards 99%. 1,00,000-4,99,999: 1st year 85% ; 2nd - 5th year - 96% ; 6th - 10th year - 98%; 11th year onwards - 99%. Admi. Charges Admin charge of Rs. 60 / month.
5 or greater term:1st year - 29.9%; 2nd year onwards: 5% 10 or greater term:1st year - 54.6%; 2nd and 3rd year: 7.5%; 4th year onwards: 5% 15 or greater term:1st year - 65%; 2nd and 3rd year: 7.5%; 4th year onwards: 5% Policy admin fees = Rs. 22 per month
1st yr-27%, 2nd yr27%, 3rd yr onwards1%
Admin charges of Rs.180 fixed charge per annum.
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Othe charges
An annual charge of Rs. 2.88 per thousand face amount will be deducted in the first 10 years of the policy except in the second year where it will be Rs. 15.24 per thousand face amount. From the 11th year onwards this annual charge will increase subject to a maximum of 3.75% per year.
Fund mngt charges
The annual investment charge is 1.50% for Maximiser, 1.00% for Balancer, 0.75% for Protector & Preserver.
Investment Mgmt fee = 1% p.a.
Investment charge of 0.80% of the Fund Value across all the funds.
Riders
ADBR, WOPR, CIBR & MSAR
ADBR, CIBR, Term
ABR & CIBR
Tax benefits
Available
Available
Available
ANALYSIS: The min age of entry in Life Time-II is zero i.e. even a plan taken for child and continue throughout his life, where as in Birla Flexi Save Plus and HDFC Endowment plan the min age of entry is 30 days and 18 years respectively.
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The max. age of entry in Life Time-II and HDFC is 60 years where as in BSLI it is 65 years. The min. term of policy is 3 years and there is no restriction on max. term of the policy in Life Time-II where as in BSLI as per policy term i.e.5,10,15.30 years and in HDFC the min term is 10 years and max. is 30 years. Life Time-II is giving the option to choose Sum Assured (SA) and opt for an automatic increase in cover to take care of increasing responsibilities each year, where as in BSLI the min SA is Rs 50,000 for minors and Rs 75,000 for adult and in case of HDFC age based multiples are allowed as Higher of SA or value of units will be paid in case of death of the policyholder subject to age specified in the plans. Life Time-II gives the complete liquidity to withdraw funds form account after 3 years, without any charges. Where as in BSLI 2 withdrawals are free of charge, for every additional withdrawals a charge of Rs.100 will be levied. And in case of HDFC no doubt after 3 years withdraws is available but the value units does not go below the SA. The min. contribution in Life Time-II is more compared to HDFC and in BSLI it is based on age wise. Flexibility to increase or decrease the contribution is available in Life Time-II & HDFC Endowment plan, where as in BSLI it is not available. Different investment options are available in all the above plans. three
Increase or decrease of death benefit is available in Life Time-II and Flexi Save Plans where in HDFC endowment plan it is not available. To reward the customers for the persistency in premium payment, Life Time-II and Flexi save plus offers bonus units at regular intervals based on the premium amount paid , but HDFC endowment plan not giving any bonus units.
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Life Time-II and HDFC Endowment plans are giving the option to invest any windfall gain in the same fund at a very nominal charge. This prevents the policyholder from investing in a new policy and paying the high administrative charges again, but this facility is not available in BSLI plan. To suit the ever changing requirements, switching facility is available in all the above three plans. Surrender of policy is possible in all the three plans. In case of any emergencies, if the policy holder is unable to pay his premium, Life Time-II and HDFC plans allow the policyholder to skip paying premiums while maintaining his life cover and fund growth. The charges in case of BSLI increase with increasing term, this will be discouraging the customer who has a long-term savings outlook, life time on the other hand has differential charges only on the basis of contribution levels, where as in case of HDFC the charges over a 10 year horizon are higher when compare to life time.
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Months April May June July Total
ICICI PRU Life Time-II Maximiser X 12.84 12.89 13.52 14.34 53.59
HDFC FEP Growth Y 48.98 49.7 51.26 53.14 203.08
U -0.55 -0.5 0.13 0.95 0.03
u2 0.3025 0.25 0.0169 0.9025 1.4719
v -1.79 -1.07 0.49 2.37 0
v2 3.2041 1.1449 0.2401 5.6169 10.206
FEP: Flexi Endowment Plan CALCULATION OF RETURNS _ X = X/n _ Y =Y/n = 53.59/4 = 13.39 = 203.08/4 = 50.77 _______________ = u2/n-(u/n)2 ________________ = 1.4719/4-(.03/4) 2 = .6065 S.D.(STANDARD DEVIATION) S.Dy _______________ = v2/n-(v/n)2 ______________ = 10.206/4-(0/4) 2 = 1.5973
CALCULATION OF RISK S.D.(STANDARD DEVIATION) S.D.x
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CALCULATION OF STABILITY C.V.(Coefficient of Variation) C.V.x C.V.y = S.D./Mean * 100 = = =` = .6065/13.39*100 4.52% 1.5973/50.77*100 3.14%
Interpretation: Life Time-II is giving less return (13.39) compare to FEP(50.77).the ICICI PRU BSLI Life Time-II FSP X Y Months April May June July Protector 10.04 10.11 10.17 10.2 Protector 13.54 13.62 13.86 13.93 HDFC FEP Z u=x-x Secure 20.27 22.01 23.29 23.51 u2 0.0081 0.0004 0.0016 0.0049 v = y -y w= z - z
v2 w2 -0.09 -0.19 0.0361 -2 4 -0.02 -0.11 0.0121 -0.26 0.0676 0.04 0.13 0.0169 1.02 1.0404 0.07 0.2 0.04 1.24 1.5376 0.105 6.645 Total 40.52 54.95 89.08 0 0.015 0.03 1 0 6 Life Time-II is giving less return because it was started in the year 2004 where as FEP was started in the year 2001. The Risk is less in Life Time-II,where as risk is more in FEP. Stability is poor in Life Time-II where as stability is good in FEP.
FSP: Flexi Save Plus FEP: Flexi Endowment Plan
CALCULATION OF RETURNS:
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_ X = X/n _ Y =Y/n _ Z = Z/n
= 40.52/4 = 10.13 = 54.95/4 = 13.73 = 89.08/4 = 22.27
CALCULATION OF RISK S.D.(STANDARD DEVIATION) S.D.x _______________ = u2/n-(u/n)2 ________________ = .015/4-(0/4) 2 = 0.0608 S.D.(STANDARD DEVIATION) S.Dy _______________ = v2/n-(v/n)2 ______________ = .1051/4-(0.03/4) 2 = 0.1618 _______________ = w2/n-(w/n)2 ________________ = 6.6456/4-(0/4) 2 = 1.2889
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CALCULATION OF STABILITY C.V.(Coefficient of Variation) C.V.x C.V.y C.V.z = = =` = =` = = S.D./ Mean* 100
.6065/13.39*100 4.52% 1.5973/50.77*100 3.14% 1.5973/50.77*100 5.78%
Interpretation: Returns giving by Life Time-II and FSP is less i.e. (10.13)&(13.73) than HDFC i.e.(22.27). the Returns in Life Time-II is less because of late entry in the market(2004). Risk is more in FEP and Stability is also not good in FEP.
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BSLI
HDFC
ICICI PRU _ _ FEP Llife time-II FSP u = x v = y _ Month (X) (Y) (Z) x y w=z-z s Preserver Enhancer Balancer u2 v2 w2 0.003 0.168 7.452 April 10.45 17.52 30.12 -0.06 6 -0.41 1 -2.73 9 0.000 0.072 0.000 May 10.5 17.66 32.86 -0.01 1 -0.27 9 -0.01 1 0.000 0.022 0.184 June 10.54 18.08 33.28 0.03 9 0.15 5 0.43 9 0.004 0.291 5.336 July 10.58 18.47 35.16 0.07 9 0.54 6 2.31 1 0.009 0.555 12.97 Total 42.07 71.73 131.4 0.03 5 0.01 1 0 4 FSP: Flexi Save Plus FEP: Flexi Endowment Plan
CALCULATION OF RETURNS: _ X = X/n = 42.07/4 = 10.51 _ w=z-z _ Y =Y/n = 71.73/4 = 17.93 _ Z = Z/n = 131.40/4 = 32.85
96
CALCULATION OF RISK S.D.(STANDARD DEVIATION) S.D.x _______________ = u2/n-(u/n)2 ________________ = 0.0095/4(0.03/4) 2 = 0.0479 _______________ = v2/n-(v/n)2 ______________ = 0.5551/4-(0.01/4) 2 = 0.3724 _______________ = w2/n-(w/n)2 ________________ = 12.9740/4-(0/4)2 = 1.8009 CALCULATION OF STABILITY C.V.(Coefficient of Variation) C.V.x C.V.y C.V.z = S.D./ Mean* 100 = = =` = =` = 97 .0.0479/10.51*100 0.45% 0.3724/17.93*100 2.07% 1.8009/32.85*100 5.48%
Interpretation: Returns are less in Life Time-II (10.51) compare to FSP and FEP(17.93)&(32.85)respectively. Risk is less in Life Time-II and risk is moderate in FSP, where as, risk is very high in FEP. Life Time-II has greater consistency, FSP has moderate consistency but consistency is not their in FEP.
ICICI PRU X LifeTimeI I Balancer APRIL MAY JUNE JULY TOTAL 11.02 11.09 11.34 11.64 45.06
BSLI Y FSP Builde r 15.07 15.15 15.44 15.64 61.3
HDFC Z FEP Defensiv e 26.05 27.7 28.16 28.97 110.88
u2
v2
w2
-0.24 -0.17 0.08 0.35 0.02
0.057 6 0.028 9 0.006 4 0.122 5 0.215 4
-0.25 -0.17 0.12 0.32 0.02
0.062 5 0.028 9 0.014 4 0.102 4 0.208 2
-1.67 -0.02 0.44 1.25 0
2.788 0.000 4 0.193 6 1.562 5 4.545 4
FSPFlexi Save Plus FEP- Flexi Endowment Plan CALCULATION OF RETURNS __
98
X = x/n __ X = 45.06/4 = 11.26
__ Y = = = _ Z =
y/n 61.3/4 15.32
z/n
= 110.88/4 = 27.72
CALCULATION OF RISK _____________ Standard Deviation (S.D.) = u2/n-(u/n)2 ___________ S.D.x = .2154/4-(.02/4) 2 _______________ S.D.y = .2082/4(.02/4) 2 ______________ S.D.z = 4.5454/4(.0/4) 2
0.2319 0.2280
1.0659
99
CALCULATION OF STABILITY C.V.(Coefficient of Variation) = S.D./ Mean* 100
CVx = .2319/11.26*100 =2.05% CVy = .2280/15.32*100 =1.48% CVz = 1.0659/27.72*100 =3.84% Interpretation: Return in life time-II is less(11.26) compare to flexi save plus(15.32) and flexi endowment plan(27.72), this is because the life time-II is started in the year 2004 where as the other two plans started in the year 2001. Risk is less in life time-II and flexi save plus, where as risk is more in flexi endowment plan. The stability is good in flexi save plus but in case of life time-II and flexi endowment plan is poor.
100
Findings Suggestions Conclusion
101
FINDINGS
It was found that Invest Shield Life gives the customer the value of the policy at the end of the term. During the study it was found that Invest Shield Cash gives customers liquidity benefits during the policy term and the policy value at the end. It was found that Invest Shield Gold is a policy for those wants a limited premium paying term but is seeking the protection and savings benefits over the longer tenure. It was found that Invest Shield Cash, Life, Gold and Pension are having the feature of Capital Guarantee. It was found that the loan facility is not available in Invest Shield Cash. Automatic premium payment facility is not available in Invest Shield Gold. There are no much changes in the plans, but there is very variation in the premium payables comparatively with other companies.
102
It was found that, in Invest Shield Pension they have only one option of regular premium payment, but competitors have two options of premium payment-Regular and Single. It was found that the liquidity benefit providing by Life Time-II is more compare to other competitors. It was found that ICICI Prudential is giving more Rider facilities over its competitors. It was found that all plans are providing Tax Benefits.
SUGGESTIONS
Try to reduce the annual premium, which helps the investors for easy payment and attracts others to invest in the plans.
Try to reduce the minimum Lock-in period of Invest Shield Cash, Life and Gold, which gives more liquidity facility to the investors. If it is possible try to give more options for investment in capital guarantee products. If possible reduce the fixed charges, administration charges and others charges, which helps to invest more fund in the security market and earn good returns. Try to give the loan facility in Invest Shield Cash. Make aggressive advertisements Guarantee products. of ULIP plans and Capital
Try to invest more in Govt. securities and Banks, which change the perception of the people and they may invest more in companys plans which helps to increase the growth rate. Try to give more option for premium, single premium. paying the premiums like regular
103
CONCLUSION
ULIP policies are actually being publicized more and more as the traditional endowment policies are becoming unattractive because of the lower interest rate. It is good for people who were investing in ULIP policies of insurance companies as their investments as it may earn them a better return than the other policies. In insurance a policyholder have the choice to the max.amount you can choose and which will cover both your life as well high returns ULIP gives multiple benefits such as covering the life / disability / critical illness etc. Finally in todays times ULIP provides solutions for all the needs of a client like insurance planning, financial needs, financial planning for childrens future and retirement planning. At the last it is concluded that by analyzing this comparative study a investor can clearly come to know about the different qualitative and quantitative benefits of ICICI Prudential, Birla Sun Life Insurance and HDFC Standard Life Insurance Companies.
104
Reference: WEBSITES www.iciciprulife.com www.birlasunlife.com www.hdfcinsurance.com www.bimaonline.com www.google.com www.irdaindia.org www.licindia.com

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Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

CONTENTS PART-I PROJECT Page No Abstract

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Chapter VI 104 Findings Suggestions Conclusion References

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Objectives Methodology Limitations

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

LIMITATIONS OF THE STUDY

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Industry Profile History of Insurance Types of Insurance Insurance sector performance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT - 1999. (I.R.D.A)

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Duties, Powers and functions of Authority:

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

INSURANCE PLAYERS INDIA[MAY,2005]

COMPANY PROFILE OF ICICI PRUDENTIAL LIFE INSURANCE

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Market-linked retirement products

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

BIRLA SUN LIFE INSURANCE

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

COMPANY PROFILE HDFC STANDARD LIFE INSURANCE

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

UNIT LIKED INSURANCE PLAN (ULIP)

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Status Age 25 Single -

Risk profile Can take high risk on

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Data collection Analysis

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

PRODUCT DETAILS AND COMPARISON

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

3rd year onwards 97% 97% 97% 97%

Comparative Analysis of Different Unit Linked Insurance Plans in Life Insurance

PRODUCT: INVEST SHIELD LIFE

= 0.06 _ = v2/n-(v/n)2 = 0.0736/4-(0/4) 2 = 0.135 ___

0.06/10.14100 0.59% 0.135/10.15100 1.33% 0.135/10.15*100 1.33%