Unit Linked Certification May 2006

Agenda

 What is a ULIP?  Asset Classes Debt & Equity  Financial Markets Structure & Investments  Financial Crime  Products Before & After

What is a ULIP

A

Unit Linked Insurance Plan is an effective combination of insurance with the benefits of market linked investments

 The need for such plans have been felt for a

long time

 It was only with the privatization of the sector,

that ULIPs became popular
3

How a unit linked plan works

Premium (Less) Charges

Mortality Charges for SA

Other Charges

Investible Premium (this is unitized)

How a unit linked plan works

Policyholder (Investible Premium)
Profit/Loss from portfolio of investment Invest / pool of money

Pool of Money (Various Unit Linked Funds)

Profit or loss from individual investment Invested in stocks/bond as per the fund objective

Market Fluctuates
5

What is a Unit?

A

unit in simple terms is a component or constituent. It represents a fraction of the total part can also be defined as a precisely specified quantity in terms of which the magnitudes of other quantities of the same kind can be stated
6

 It

UNIT IN UL PRODUCTS

 In

a UL product, unit represents specified share of money / assets

 It is a token of transaction of sale or purchase  Value

of a UL product is calculated on the basis of the units

Unit 1 Unit = Rs 10 ( NAV )

Debt Market

Equity Market

Money Market

Financial Basics
Asset Classes Debt & Equity

Asset Class - Debt

 Debt Concepts  Features of Debt Instruments

10

Debt Concepts

 Inflation  Interest  Time Value of Money

11

What is Inflation?

 Inflation is the increase in prices over time  Correspondingly, it represents the fall in value 
of money over time The purchasing power reduced due to inflation of money gets

12

How is inflation determined?

 Inflation   

would affect different entities to a different extent The effect would depend on the price increase of their commonly used goods Price increase would not be the same for all goods in a class Basket of Goods concept

13

What does inflation do?

The value of Rs. 1,00,000 will become Inflation% No. of yrs. 3 5 6 0 100000 100000 100000 5 85,873 77,378 73,390 10 73,742 59,874 53,862 15 63,325 46,329 39,529 20 54,379 35,849 29,011
14

Inflation Indexes

 List five different good/ commodities used by:

A construction firm A urban household

 Wholesale Price Index  Consumer Price Index

15

Wholesale Price Index (WPI)

 Index of Wholesale Prices  Basket of goods include

Wholesale grains Power Cement Steel, etc.

 Most commonly referred index

16

Consumer Price Index (CPI)

 Index of Retail Prices  Basket of goods include

Grains (retail price) Toothpaste Soap, etc.

 Captures the increase in Cost of Living

17

Cost of Living Increase

1992
1 Kg of Potato 1 Litre of Milk 1 Balcony Ticket 1 Mumbai-Delhi Train Ticket Rs 1.50 Rs 6 Rs 20 Rs350

2003
Rs 8 Rs 16 Rs 80 Rs1750

% Increase

433% 133% 300% 400%

18

Cost of Living Increase 2003

1 Kg of Potato 1 Litre of milk 1 Balcony Ticket 1 Mumbai-Delhi Train Ticket Rs 8. 00 Rs 14 Rs 80 Rs1750 % Increase 433% 133% 300% 400%

2013
43 33 320 8750

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Interest

 Simply put, it is the price of money  It is the compensation for the opportunity cost
of lending the money

20

Rate of Return

A  

rate of return is expected to at least account for inflation Money would grow only if returns are above the inflation Consequently, inflation also has a bearing on the interest rate

21

Impact
35 30 25 20 15 10 5.5 5 0 -5 -10
4.5 7 6 8 6 8 6 6.5 3.5 5 22 Bank Interest Inflation 26 32

Equity Investment -10

22

Rate of Return

 Nominal rate of return is the Absolute Return   

offered (eg. Infrastructure Bonds @ 9.00%) All investment instruments are quoted in terms of nominal rate Real Rate is return which has been adjusted to take inflation into account Real Rate = Nominal rate Inflation

23

Rate of Return

 You  

have made a FD @ 5% for one year. The relevant inflation index is 4.3%. What is the real rate of return? Real = Nominal Inflation Real Return = 5 4.3 = 0.7%

24

Time Value of Money

 Inflation robs away purchasing power  @5% inflation, Rs. 105 next year is worth Rs.
100 today  Hence, the timing of income/ payment streams assumes importance  Present Value (PV) = Future Cash Flow/ Appropriate Discount (It tells us the worth of FCF today)

25

Features of Debt Instruments

 Nature  Principal or Par Value  Maturity  Coupon  Yield (Yield to Maturity)  Price
26

Nature

 A debt instrument is in the nature of a loan  The debenture/ bond that you buy is the loan 
you have given Remember, Debt = Loan Investor

Issuer/ Borrower

27

Par Value & Maturity

 Par Value

 Face Value of the Bond  Interest is paid on the Par Value  Date on which the Principal is redeemed  Term to Maturity is the number of years before
the bond expires
28

 Maturity

Coupon

 Is   

the term used to denote the interest on the loan declared at the time of issue Coupon Rate determines the amount of regular payments/ interest that the investor will receive Zero Coupon Bond (ZCB) pays no periodic interest (does not carry a coupon). Typically issued at a discount and redeemed at face value.
29

Yield to Maturity (YTM)

 YTM   

is the that an investor will receive till maturity, if all coupon payments were reinvested Varies inversely with price YTM = Risk Free Rate + Risk Premium YTM is also affected by Demand & Supply

30

Price

 Price

of any financial instrument is the present value of the future or expected cash flows of a Bond & YTM are inversely related

 Price

31

Equity Concepts

 Nature  Principal or Par Value  Maturity  Dividend  Price  P/E Ratio

32

Nature

 An Equity instrument is in the nature of  

ownership The equity share you buy is the proportion of ownership you bought Remember, Equity = Own

33

What is a Share?

 A share represents the smallest fraction of   

ownership it is a High Risk Instrument Each such form of ownership is given a share certificate A share certificate enables them to be easily bought & sold Only a Long Term holding allows you to reduce the risk on a Diversified Portfolio
34

Par Value & Maturity

 Par Value is the Face Value of the share  There is no maturity date of an equity share  Your investment can be redeemed only by
selling the shares

35

Dividend

 A share gives returns to its owner through 2

methods:

 Dividend is that portion of the profits which

is distributed to owners  It is normally declared on Face Value per share

 Dividends  Capital Appreciation

36

What is a Stock Exchange?

 The

institution where the buying/ selling of stocks/shares takes place is the stock exchange stock exchanges in India are BSE/ NSE/ CSE

 Popular

37

What is Share Price Index?

A  

share price index is that ONE number which represents the market as a whole at any point of time It comprises a fixed number of shares weighted according to a certain logic (usually, trading volumes) The BSE comprises of 30 shares and the NSE of 50
38

What is P/E Ratio?

 P/E Ratio or Price Earning Ratio is the ratio

between the Market Price and the Earning Per Share (EPS) of a company

 If the P/E Ratio of the company is less than

that of the index, it means that the market expects the future earning potential of that share to be superior than the market
39

MUTUAL FUND

MUTUAL FUND

40

Money Market Concepts

 Money Market  Money Market Instruments Low Risk ,

Low Return

41

Money Market

 Money Market is the market for short term   

requirement and deployment of funds The instruments have a maturity period of less than 1 year Highly liquid and tradable instruments Some common instruments are Commercial Paper, T Bills, Certificate of Deposit

42

Money Market Instruments

Commercial Paper
 Issued by corporate entities to fund working capital

requirements  In the form of Promissory Note transferable by endorsement and delivery

 Issued for a period of 90 days to 1 year Short Term  Two Key Regulations: Rating by a Credit Rating Agency (viz. CRISIL) Funds raised by CP is not treated as fresh borrowing

by the corporate

43

Money Market Instruments

Certificate of Deposit
 Issued by Banks and FIs  Maturity ranging from 30 days to 3 yrs  Credit Rating not compulsory  Market is most active for 1 yr bracket  Why is market active? No reserve requirements for banks No TDS Tradability

44

Money Market Instruments

 Treasury Bills (T Bills)

 Issued by RBI on behalf of GOI  Maturity 14 days, 91 days, 182 days and

364 days
 Short term borrowing instrument of the GOI  Sold by way of RBI auction on weekly/

fortnightly basis

45

Money Market Instruments

Repo
 A Repo is a repurchase agreement
 A procedure for

borrowing money by selling securities to a counterparty and agreeing to buy them back later at a slightly higher price

 The interest rate paid is called the Repo Rate

46

Money Market Instruments

 Reverse Repo
 In essence, refers to a repurchase agreement
 From

the customer's perspective, the customer provides a collateralized loan to the seller.

47

Financial Basics
Financial Markets Structure & Instruments

Asset Types

Physical
 Gold to hedge against

Financial
 Equities  Bonds/ Debentures  Money Market

inflation  Real Estate high capital requirement. Low liquidity

Instruments  Fixed Deposits  Govt. Savings Instruments (PPF/NSC)  Mutual Funds

49

Physical Assets

 Gold:
 Our National Obsession!!  Considered to be a hedge against inflation  Gold Bonds: Securitization of Gold

 Real Estate
 Not for the small investor  Liquidity is an issue

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Financial Assets
Issuer Banks Corporate Type of Product Fixed Deposit Shares Bonds, Debentures Fixed Deposit Govt. Securities Government Who can Invest All Investors All Investors All Investors All Investors Companies, MF's

PPF Individual Investors Other Personal Investments Individual Investors Bonds All Investors Individuals Only
51

FI's

Insurance Co. Insurance Plans

Financial Market
Financial Markets
Money Market Debt Market G - Secs
Central Govt. State Govt.

Forex Market Bonds

FI Bonds

Capital Market

PSU Bonds

Corporate Securities

Call Money

T. Bills

Commercial Paper

Repo
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UNIT LINK LIFE INSURANCE PLAN

53

What are fund options?

 Funds are usually classified according to their

investment objectives:

 Protection of Income  Capital Growth  Balance between Protection of Income & Capital
Growth
54

What are AVIVAs fund options?

 Investment objectives of AVIVAs Unit Linked

Funds:

 Protection of Income Secure  Capital Growth Growth  Balance between Protection of Income & Capital
Growth Balanced

55

How are the funds constructed?

Equity

Secured 0% - 20%

Balanced 0% - 45%

Growth 30% - 85%

Debt 60% - 100% 50% - 90% 0% - 50% Securities Cash and 0% - 20% 0% - 10% 0% - 20% Money Market

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Understanding Fund Returns

A person invests Rs. 10,000 into the Balanced Fund on 01.04.2006. Assuming, that the investment in Equity is 30%, in Debt 60% and in Money Market 10%, let us do a returns calculation. NAV on 01.04.2006 Returns on market Rs. 26.50 Debt : 8% Equity : 60% Money : 4%

Calculate NAV & Annual Return % on 01.04.2007 Answer: Rs. 32. 648 Annual Return % : 23.20%
57

CASE STUDIES

If Mr.Shahrukh Khan invests in growth fund let us assume that the distribution is like 85% in Equity,10% in Debt and 5% in Cash If the invested amount is Rs.10,000/Rs.8500 will be invested in Equity unit price Rs 28.58 Rs.1000 will be invested in Debt unit price Rs 14.45 Rs.500 will be invested in Cash unit price Rs 10.78 Shahrukh gains 297.41 debt,46.38 in cash units in equity,69.20 in

58

After one year if the unit price goes up to Rs.30 in equity, Rs.15.30 in debt and Rs.11 in cash He gets 297.41x30=Rs 8922.30 in equity 69.20x15.30=Rs.1058.76 in debt 46.38x11=Rs.510.18 in Cash Total he gets Rs. 10,491.24. Profit(%) = 4.9124
59

Lets Calculate 1
Distribution : 85% Equity,15% Debt Taking the above distribution Let us assume Mr.X invests Rs.50000/- with unit price Rs.25.68(E) Rs.13.79(D) Rs.11.21(C) After 2 years the prices are Rs.35(E) Rs.16.45(D) Rs.12.50(C) Calculate the Growth?(Percentage) Ans:33.74%
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Lets Calculate 2
Distribution : 65% Equity,15% Debt ,20% Cash Taking the above distribution, let us assume Mr.Amir Khan invests Rs.1,50,000/- with unit price Rs 28.68(E) Rs.12.79(D) Rs.10.21(C) After 3 years the prices are Rs.33.48(E) Rs.15.45(D) Rs.11.20(C) Calculate the Growth?(Percentage) Ans:15.94%
61

Lets Calculate 3
Distribution : 20% Equity,60% Debt ,20% Cash Taking the above distribution, let us assume Bipasha invests Rs.45000/- with unit price Rs 22.68(E) Rs.16.79(D) Rs.10.12(C) After 2 years the prices are Rs.29.88(E) Rs.16.45(D) Rs.10.88(C) Calculate the Growth?(Percentage) Ans:6.63%
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Lets Calculate 4
Distribution : 85% Equity,15% Debt, 20%Cash Taking the above distribution Let us assume Mr.Akshay invests Rs.6000/- with unit price Rs 25.68(E) Rs.13.79(D) Rs.11.21(C) After 1 year the prices are Rs.24(E) Rs.12.45(D) Rs.12.50(C) Calculate the Growth?(Percentage) Ans:15.2%
63

Lets Calculate 5
Distribution : 20% Equity,65% Debt 15% Cash Taking the above distribution Let us assume Kareena invests Rs.25000/- with unit price Rs. 25.68(E) Rs.13.79(D) Rs.11.21(C) After 4 years the prices are Rs.33.33(E) Rs.16.45(D) Rs.12(C) Calculate the Growth?(Percentage) Ans:19.548%
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TEST ON UNIT LINK CERTIFICATION

65

Products Before & After

Ulip guidelines : Summary


Announced by IRDA on December 21, 2005; classified into 6 sections

Product design Market conduct Disclosure norms Advertisements Furnishing of information Rating of unit linked funds

67

Summary & Impact: Ulip guidelines

68

Ulip guidelines : Summary & Impact

Product features
Feature Guideline 1 Min SA for Single Premium plans = 1.25 times SP 1a Implication SA for SP plans not linked with policy term; SP plan with SA < 1.25 times SP to be changed 2a SA for RP plans linked with policy term 2 Sum Assured 3 SA cannot decrease (except to the extent of PW in last 2 years before death or post age 60) Min SA for RP plans = Higher of 0.5*PT*AP or 5*AP (for whole life PT = 70 - age at entry) 2b Different min SA for different ages / policy term 2c Min SA a multiple of AP at inception 3a With every PW, the sum at risk will keep increasing Only maturity proceeds payable after maturity; no extended life cover Implications on plans where policy fund or x% of premium is 5a paid on death for initial few years (DGH products impacted) 4a

4 No cover to be extended after policy term 5 Guaranteed SA payable on Death

Impact on Aviva products

5 times SA in LB Plus  Whole Life: Min SA different for each age (e.g. Min SA = 20 AP for age 30); major impact on LL, SG  Endowment: Min SA for different PT (e.g. Min SA = 10 AP for PT 20 years); impact 69 on LS, LB5, FLP, YA with PT > 10 years)

 Single Premium: Increase SA to 1.25 times SP in LB; Opt for SA in the range of 1.25

Ulip guidelines : Summary & Impact

Product features
Feature Guideline 1 Surrender value payable only after 3 policy anniversary 2 Surrender & Partial withdrawals 3 PW allowed only after 3 policy years (for RP as well as SP) PW from top-ups also after 3 years (except when made in the last 3 policy years)
rd

Implication Mandatory lock-in of 3 years for full surrender, even to avail the SV accrued in the first 2 years

1a

2a Minimum lock-in period of 3 years for partial withdrawal for all products and also for top-ups 3a

No impact on SA except when PW made during last 2 Reduced impact of PW on SA, sum at risk increases with every 4a years before death or after age 60 PW

Impact on Aviva products

 Full surrender: All products to be modified to allow full surrender after 3 years  Partial withdrawal wrt RP / SP: FLP, LB5, LB, LB Plus impacted  Partial withdrawal wrt ASP: All products (except TP, ELP where ASP not allowed) to
be modified

 Impact

on SA by PW: All products (except TP, PP where PW not allowed) to be 70 modified; SA not to decrease due to PW

Ulip guidelines : Summary & Impact

Product features
Feature Guideline Implication

1 Top-ups can be paid only if all due RP have been paid Top-up premiums 2 No impact on SA till total top-ups < 25% total RP, any excess amount increases SA 1.25 times the amount

1a No top-ups allowed for paid up policies 2a ASP will attract risk charges as SA increases

Impact on Aviva products

 All products (except ELP, TP, PP): For policies with annual premium < Rs
40,000; Min ASP of Rs 10,000 in the first year will increase SA

 Can

restrict ASP in the initial years; with passing years as total RP

71

increases, top-up amounts can also be increased without impacting SA

Ulip guidelines : Summary & Impact

Product features
Feature Premium discontinuance before 3 years Premium discontinuance after 3 years Guideline 1 Revival period (not defined in the guideline) to be given; No cover level during the revival period 1a Implication If case of non revival, it can be terminated without making any payment or SV if any is paid

Revival period (not defined in the guideline) to be given; SA 2 continued for revival period, charges deducted from FV

In case of non revival, policy terminates after paying SV 2a or continued till FV = 1 yr premium & paid (min SV payable is one full years premium)

Impact on Aviva products

 All

products: In case policy is paid-up, one cannot reduce SA to Zero (at present

policyholders enjoy this option)

 All

products: Min balance in the fund in case of paid up after 3 years > 1 year

premium as min SV = 1 year premium

72

Ulip guidelines : Summary & Impact

Charges
Feature Guideline 1 Uniform definition of charges for all UL products 2 Premium allocation charge, including initial management charge 1a 2a 3a 4a 5a Implication Definition of the charges have to be the same, across all products Levied at the time of premium receipt; on units created from 1st years' premium for a specified period levied as a % of value of assets at the time of computation of NAV, appropriated by adjusting NAV expressed as a fixed amount or a % of premium or % of SA (not as a % of NAV) levied on the unit fund at the time of surrender, expressed as a % of fund or as a % of AP

3 Fund management charge 4 Policy administration charge (can be flat or vary at a pre-determined rate, max 5%)

5 Surrender charge Charges 6 Switching charge 7 Mortality charge

6a levied at the time of switching, usually a flat amount 7a guaranteed during the contract period All riders to be filed separately; rider premium to be exclusive of expense loading Appropriating rider cost by cancellation of units allowed if such 8b cost < actual rider premium filed with IRDA 8a 9a levied on the unit fund at the time of partial withdrawal 10a levied for any alterations like increase in SA, premium redirection, change in policy term etc

8 Rider premium charge

9 Partial withdrawal charge 10 Miscellaneous charge

Impact on Aviva products: Significant impact

   

We now guarantee Mortality charges for policy term No bid / offer spread can be charged Fund Management Charge cannot be through cancellation of units but through adjustment in NAV 73 Initial management charge to be on first years premium only

Ulip guidelines : Summary & Impact

Charges
Fund Management Charge (FMC)  Currently, we levy same FMC for all funds for a particular product  In LL, FMC is same for secure, Balanced, Growth funds (1%) while the same Funds have FMC 1.25% in LB 5  This is possible by charging FMC through unit cancellation without affecting the NAV of the funds.  Post guidelines, FMC will be charged through adjustment in the NAVs of the Funds and not through units cancellation  Thus, we will have same FMC for a particular Fund across products  LL will have FMC of 1% for Protector Fund, 1.25% for Balanced fund and 1.5% for Growth Fund, Secure Fund (New 1.5%) And these FMCs would be same for all products  This has necessitated to have another fund called Protector wherein any Maturity Guarantee is offered (e.g. Save Guard, Treasure Plus, Life Bond Plus)
74

Product Changes

75

Easy Life Plus

Before After
SA = 10 times AP for PT 10, 15, 20 years, 12.5 times AP for PT 25 years Full surrender option available after 3 years
(SV will accrue after 2 years but cannot be exercised until after 3 years)

  

SA =10 times annual premium (AP) for  Policy Term (PT) 10, 15, 20, 25 years Full surrender option available after 2  years Paid up option available after 2 years  SA reduced to zero or maintained at same level till FV supports the charges 

Paid up option available after 3 years  SA maintained at same level till FV falls below one years premium

  

One switch per year free of charge No settlement option Charges

 Premium allocation: 99% - 101%  Admin charge: Rs 41 per month  IMC: 5% p.a. of initial units  FMC: 1% p.a. of fund value  Bid / Offer: 5% p.a. of annual premium  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units

  

Two switches per year free of charge

subsequent by cancellation of units)

(0.5%

Settlement option upto 5 years after maturity (No Cover) Charges

 Premium allocation: 93% - 95%  Admin charge: Rs 41 per month  IMC: 5% p.a. of initial units  FMC: 1%, 1.25%, 1.5% p.a. for Protector, Balanced, Growth Funds respectively  Mortality charges (guaranteed over PT) 76  Surrender charge on Initial & Accumulation Units

Freedom Life Plan

Before
After
     Min SA =0.5*PT*AP Max SA = 1.25*PT*AP Top-up premium: Min Rs 6,250; max 25% of total RP paid till date Full surrender option available after 3 years (SV acquires after 2 years) Paid up option available after 3 years  SA maintained at same level till FV < 1 AP    Partial withdrawal (PW) allowed after 3 years,

       

Min SA =5 times annual premium (AP) Max SA = AP*PPT*CL (CL : 1 to 3) Top-up premium: Min Rs 10,000; no max limit Full surrender option available after 2 years Paid up option available after 2 years
 SA maintained at same level till FV < Rs 10,000

Partial withdrawal (PW) allowed after 2 years, SA reduced by PW No settlement option Charges
 Premium allocation: 100.5% - 103%  Admin charge: Rs 60 per month  IMC: 5% p.a. of initial units up to 20 years  FMC: 1% p.a. of fund value  Bid / Offer: 2% p.a. of annual premium  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units

no impact on SA
Settlement option upto 5 years Charges  Premium allocation: 98.5% - 101%  Admin charge: Rs 60 per month  IMC: 5% p.a. of initial units up to 20 years  FMC: 1.5%, 1.25%, 1.5% p.a. for Secure, Balanced, Growth Funds  Mortality charges (guaranteed over PT)  Surrender charge on Initial77 & Accumulation Units

Life Bond
Before After       allocation: 97% SA =1.25 times single premium (SP) Max age at entry : 65 years Full surrender / Partial Withdrawal available after year 3 Top-up premium: Min Rs 6,250; max 25% of SP (throughout term) Two switches per year free of charge Charges  Premium 104.5% allocation: 97% -

     

SA =1.1 times single premium (SP) Max age at entry : 75 years Full surrender / Partial Withdrawal available from year 1 Top-up premium: Min Rs 10,000; no max limit One switch per year free of charge Charges  Premium 104.5%

 Admin charge: 1.5% pa. For first 5 years, 0.5% p.a. thereafter  FMC: 1% p.a. of fund value  Mortality charges (not guaranteed over PT)  Partial Withdrawal charges

 Admin charge: 1.5% pa. For first 5 years, 1% p.a. thereafter  FMC: 1%, 1.25%, 1.5% p.a. for Protector, Balanced, Growth Funds  Mortality over PT) charges (guaranteed

 Partial Withdrawal charges

78

Life Bond Plus

Before After     Full surrender / Partial Withdrawal available after year 3 Top-up premium: Min Rs 10,000; max 25% of SP Settlement option upto 5 years Charges  Premium 104% allocation: 100% -

 


Full surrender / Partial Withdrawal available from year 1 Top-up premium: Min Rs 10,000; no max limit No settlement option Charges  Premium allocation: 100% 104%  Admin charge: Rs 25 per month  IMC: 1.75% p.a. for first 3 years  FMC: 1.25% p.a. of fund value  Mortality charges guaranteed over PT) (not

 Admin charge: Rs 25 per month  IMC: 1.75% p.a. for first 3 years  FMC: 1.5%, 1.25%, 1.5% p.a. for Secure, Balanced, Growth Funds  Mortality over PT) charges (guaranteed

79

Save Guard
Before After
   Endowment, max maturity age 70 PPT (= PT): 10, 15, 20, 25, 30 years SA = 0.5*PT*AP; max Rs 15,00,000 (DGH) Top-up premium: Min Rs 3,000; max 25% of total RP paid till date Full surrender option available after 3 years (SV acquires after 2 years) Paid up option available after 3 years SA maintained at same level till FV < 1 AP Partial withdrawal (PW) allowed after 10 years, no impact on SA Settlement option upto 5 years Charges  Premium allocation: 95% - 96%  Admin charge: Rs 43 per month  IMC: 7% p.a. of initial units up to 20 years  FMC: 1.5%, 1.25%, 1.5% p.a. for Secure, Balanced, Growth Funds  Mortality charges (guaranteed over PT)  Surrender charge on Initial80 & Accumulation Units ERC = 1- 1/(1.07)^n

      


Whole Life, no max maturity age PPT: 10, 15, 20, 25, 30 years SA = 10 times (AP), max Rs 12,00,000 Full surrender option available after 2 years Paid up option available after 2 years

Top-up premium: Min Rs 10,000; no max limit 



 SA reduced to zero or maintained at same  level till FV supports the charges

Partial withdrawal (PW) allowed after 10  years, SA reduced by PW No settlement option Charges
 Premium allocation: 100% - 101%  Admin charge: Rs 43 per month  IMC: 5% p.a. of initial units up to 20 years  FMC: 1.5% p.a. of fund value  Bid / Offer: 5% p.a. of annual premium  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units  

Life Bond 5
Before
After        Entry age: 18-50 years, max maturity age 60 years Policy term: 10, 15, 20 years SA = 0.5*PT*AP Top-up premium: Min Rs 6,250; max 25% of total RP paid till date Full surrender available after 3 years Partial withdrawal available after 3 years, no impact on SA Paid up option available after 3 years  SA maintained at same level till FV < 1 AP   Settlement option upto 5 years Charges  Premium allocation: 98% - 102%  Admin charge: Rs 55 per month  IMC: 5% p.a. for first 5 years  FMC: 1.5%, 1.25%, 1.5% p.a. for Secure, Balanced, Growth Funds  Mortality charges (guaranteed over PT) 81  Surrender charge ONLY on Initial Units ERC = 1- 1/(1.05)^n

      


Entry age: 18-65 years, max maturity age 80 years Policy term: 10 50 years SA = 5 times AP Top-up premium: Min Rs 10,000; no max limit Full surrender available after 1 year Partial Withdrawal available from 2 years, SA reduced by PW Paid up option available after 1 year
 SA reduced to zero or maintained at same level till FV supports the charges

No settlement option Charges

 Premium allocation: 98% - 102%  Admin charge: Rs 55 per month  IMC: 5% p.a. for first 5 years  FMC: 1.25% p.a. of fund value  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units

Life Long
Before
After   Min Annual Premium = Rs 6,000 Min SA = Max {0.5*(70-entry age), 5}*AP Top-up premium: Min Rs 1,500; max 25% of total RP paid till date Full surrender available after 3 policy years Partial withdrawal available after 3 years, no impact on SA Paid up option available after 3 years  SA maintained at same level till FV < One year Premium  Charges  Premium allocation: 93% - 99%  Admin charge: Rs 64 per month  IMC: 10% p.a. on initial units (1 yr premium) for 30 years  FMC: 1%, 1.25%, 1.5% p.a. for Protector, Balanced, Growth Funds  Mortality charges (guaranteed over PT)  Surrender charge on Initial & Accumulation Units 82

     

Min Annual Premium = Rs 3,500 Min SA = 10 times annual premium

Top-up premium: Min Rs 10,000; no max  limit Full surrender available after 2 policy years Partial Withdrawal available after 3 policy years, SA reduced by PW Paid up option available after 2 policy years
 SA reduced to zero or maintained at same level till FV supports the charges   

Charges
 Premium allocation: 99% - 105%  Admin charge: Rs 64 per month  IMC: 5% p.a. on initial units (2 yr AP) for 30 years  FMC: 1% p.a. of fund value  Bid / Offer : 5% p.a. of annual premium  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units

Pension Plus
Before After     Full surrender option available after 3 years (SV acquires after 2 years) Paid up option available after 3 years Two switches per year free of charge Charges  Premium allocation: 98% - 102% (RP); 98-99% (SP)  Admin charge: Rs 47 per month  IMC: 7% p.a. of initial units  FMC: 1.5%, 1.25%, 1.5% p.a. for Secure, Balanced, Growth Funds respectively  Surrender charge on Initial Units

   

Full surrender option available after 2 years Paid up option available after 2 years One switch per year free of charge Charges  Premium allocation: 103% - 107% (RP); 103-104% (SP)  Admin charge: Rs 47 per month  IMC: 5% p.a. of initial units  FMC: 1% p.a. of fund value  Bid / Offer: 5% p.a. of annual premium  Surrender charge on Initial Units

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Treasure Plus
Before
After    Min AP for 10 yr PT Rs 24,000 (Min SA Rs 2,40,000); for other PTs, as before Full surrender option available after 3 years (SV acquires after 2 years) Paid up option available after 3 years  SA maintained at same level till FV falls below one years premium    Partial Withdrawal in the last 5 years, no impact on SA Settlement option upto 5 years Charges  Premium allocation: 96% - 97%  Admin charge: Rs 38 per month  IMC: 7% p.a. of initial units  FMC: 1.5% p.a. respectively  Surrender charge Accumulation Units for Secure Fund

  

Min AP Rs 12,000 (Min SA Rs 1,20,000) for all PT Full surrender option available after 2 years Paid up option available after 2 years  SA reduced to zero or maintained at same level till FV supports the charges




Partial Withdrawal in the last 5 years, SA reduced by PW No settlement option Charges  Premium allocation: 101% - 102%  Admin charge: Rs 38 per month  IMC: 5% p.a. of initial units  FMC: 1.5% p.a. of fund value  Bid / Offer: 5% p.a. of annual premium  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units

 Mortality charges (guaranteed over PT) on Initial &

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Life Saver
Before
After  Min Annual Premium = Rs 6,000 Top-up premium: Min Rs 1,500; max 25% of total RP paid till date Full surrender available after 3 policy years Partial withdrawal available after 3 years, no impact on SA Paid up option available after 3 years  SA maintained at same level till FV < One year Premium   Settlement option upto 5 years Charges  Premium allocation: 93% - 99%  Admin charge: Rs 64 per month  IMC: 10% p.a. on initial units (1 yr premium)  FMC: 1%, 1.25%, 1.5% p.a. for Protector, Balanced, Growth Funds  Mortality charges (guaranteed over PT)  Surrender charge on Initial & Accumulation Units 85

    

Min Annual Premium = Rs 3,500

Top-up premium: Min Rs 10,000; no max  limit Full surrender available after 2 policy years Partial Withdrawal available after 3 policy years, SA reduced by PW Paid up option available after 2 policy years
 SA reduced to zero or maintained at same level till FV supports the charges   

No settlement option Charges

 Premium allocation: 99% - 105%  Admin charge: Rs 64 per month  IMC: 5% p.a. on initial units (2 yr AP)  FMC: 1% p.a. of fund value  Bid / Offer : 5% p.a. of annual premium  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units

Young Achiever
Before After Top-up premium: Min Rs 1,500; max 25% of total RP paid till date Full surrender available after 3 policy years Paid up option available after 3 years  SA maintained at same level till FV < One year Premium Settlement option upto 5 years (Better version) Charges  Premium allocation: 94% - 96%  Admin charge: Rs 55 per month  IMC: 10% p.a. on initial units (1 yr premium)  FMC: 1%, 1.25%, 1.5% p.a. for Protector, Balanced, Growth Funds  Mortality charges (guaranteed over PT)  Surrender charge Accumulation Units on Initial
86

  

Top-up premium: Min Rs 10,000; no  max limit Full surrender available after 2 policy  years  Paid up option available after 2 policy years  SA reduced to zero or maintained at  same level till FV supports

 

Settlement option upto 5 years Charges  Premium allocation: 99% - 101%  Admin charge: Rs 55 per month  IMC: 5% p.a. on initial units  FMC: 1% p.a. of fund value  Bid / Offer : 5% p.a. of annual premium  Mortality charges (not guaranteed over PT)  Surrender charge on Initial Units

&

Recap

TEST

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Thank You
.