CONTENTS

1.1. ACKNOWLEDMENTACKNOWLEDMENT

2.2. EXCUTIVE SUMMARYEXCUTIVE SUMMARY

3.3. PREFACEPREFACE

4.4. INTRODUCTION TO THE TOPICINTRODUCTION TO THE TOPIC

5.5. HISTORY OF INSURANCE IN INDIAHISTORY OF INSURANCE IN INDIA

6.6. LIC LIFE INSURANCE CORPORATION OF INDIALIC LIFE INSURANCE CORPORATION OF INDIA

•• OBJECTIVEOBJECTIVE

•• VISION AND MISSIONVISION AND MISSION

•• WHAT IS PANSION PLANWHAT IS PANSION PLAN

•• TYPE OF PENSION PLANTYPE OF PENSION PLAN

JEEVAN NIDHIJEEVAN NIDHI

JEEVAN AKSHAYJEEVAN AKSHAY

NEW JEEVAN DHARA NEW JEEVAN DHARA

NEW JEEWAN SURAKSHNEW JEEWAN SURAKSH

7.7. ICICI PRODENTIALICICI PRODENTIAL

• COMPANY PROFILE COMPANY PROFILE

•• VISION AND VALUESVISION AND VALUES

•• VARIOUS RETIRMENT SOLUTIONVARIOUS RETIRMENT SOLUTION

8.8. ULIP (UNIT LIKED INSURANCE PLANE)ULIP (UNIT LIKED INSURANCE PLANE)

• WHAT IS ULIPWHAT IS ULIP

•• RETIRMENT PLAN IN ULIPRETIRMENT PLAN IN ULIP

•• WHEN ULIP WORK BESTWHEN ULIP WORK BEST

9.9. RESEARCH SECTIONRESEARCH SECTION

•• RESEARCH PROBLEM RESEARCH PROBLEM

•• RESEARCH METHOLOGYRESEARCH METHOLOGY

•• HYPOTHESISHYPOTHESIS

WHY PENSION PLAN OFFER BESTWHY PENSION PLAN OFFER BEST

RETIREMENT SOLUTIONRETIREMENT SOLUTION

PENSION PLAN IS RISE ON INSURANCEPENSION PLAN IS RISE ON INSURANCE

COMPANY PORTFOLIO COMPANY PORTFOLIO

10. COMPARITIVE ANALYSIS ANDCOMPARITIVE ANALYSIS AND

INTERPRETATIONINTERPRETATION

11.11.FINDINGSFINDINGS

12.12.RECOMMANDATIONRECOMMANDATION

13.13.CONCLUSIONCONCLUSION

14.14.BIBLIOGRAPHYBIBLIOGRAPHY

ACKNOWLEDGEMENTACKNOWLEDGEMENT

ACKNOWLEDGEMENTACKNOWLEDGEMENT

Every time, I have come across an acknowledgement page in report or book.

I used to think that it is merely an obligation on the part of the writer to

thank all those associated with his work. But today I am delighted in writing

my acknowledgement to all those who have helped me in this project a

learning experience. I am sure I could not have been able to do it so well

without their support.

I am highly grateful and express my sincere gratitude to Dr. Ajay Kumar

Garg (Director), Miss Deepali Kapoor (Project Guide), who guided me so

well before the beginning of the project.

Its goes without saying that I really appreciate the commitment of

Teerthankar Mahaveer Institute of Management & Technology, Moradabad

Faculty who has prepared us to do every project successfully. This is

definitely the training we get at T.M.I.M.T. Moradabad that makes a project

a wonderful learning experience and not merely a mandatory assignment. I

am grateful to our Miss. Sonia Gupta (Course Co-Coordinator) Mr. Manoj

Gupta (Internet lab Incharge), Mr. Sanjeev Gupta (Librarian). I am grateful

to Mr. Anand Joshi who had arranged for all of us to go through a complete

project right there in the campus.

Last but not least thanks to the ALMIGHTY GOD because nothing is

possible without his blessing. And I would like to thank my family members

for their continuous, patience, encouragement, support and blessings that

enabled me to make this project a success.

With Regards,

Manish Chauhan,

M.B.A. IIIrd Sem.

Roll No. 0714870041

EXECUTIVE SUMMARYEXECUTIVE SUMMARY

Executive summary

The objective of the project was to study and evaluate present market share

of two leading insurance company LIC and ICICI PRUDENTIAL.

To complete the project the study has been conducted which based on the

secondary data which is collected through the various books, magazine,

journal and websites.

The main purpose of the study to know that how and what manner people

attract towards the company and how they decide which one should be

chosen.

Finding and recommendation made on the basis of survey most depicts on

the point that insurance plan and policies should be more customer centric

,as many customer are not aware about the policies and plan and are not able

to decide which policies or plan is better for them. so that they can give

proper knowledge to the customers. Frequent change of customers should

not be done on the routes.

PREFACEPREFACE

INTRODUCTIONINTRODUCTION

TO THE TOPICTO THE TOPIC

A.A.RESEARCH OBJECTIVERESEARCH OBJECTIVE

B.B.INTRODUCTION TO THEINTRODUCTION TO THE

TOPICTOPIC

RESEARCH OBJECTIVE

1) To establish an interface between the policy/plans makers and policy

takers, that how and in what manners they show there reaction

towards policy and plan.

Through the study we try to study and analysis the different

pension plans of the two company LIC and ICICI PRUDENTIAL .

How people choose the suitable pension plan for them from LIC.

2) We also want to know that how and in what manners the different

pension plan attract different age and salary group.

INTRODUCTION TO THE TOPIC

Introduction seeks to introduce the readers to the backgrounds of the study,

people involved in the research scope of the study. It is a brief rationale as

why we did our study on “Comparative Study On Pension Of Leading

Life Insurance Company ( LIC and ICICI Prudential) .

Background and People Involved

In India LIC and ICICI Prudential are the leading Insurance Company. LIC

is from government sector and whereas ICICI prudential is a joint venture of

ICICI Bank of India and prudential Insurance of U.K.

Mainly pension is provided by the government to its employees. But there is

a large no as people who work with private sector industry, after the

retirement the first thing which worry them is how they survive and how

theirs needs and requirements fulfilled?

Scope as the Study

To know and understand the different pensions plans as policy as two

leading insurance company in insurance sector by study and analysis

that how and in what manner they attract the customers of different

age and salary groups.

INSURANCE IN INDIA

INSURANCE IN INDIA:-

Insurance is a federal subject in India and has a history dating back to 1818.

Life and general insurance in India is still a nascent sector with huge

potential for various global players with the life insurance premiums

accounting to 2.5% of the country's GDP while general insurance premiums

to 0.65% of India's GDP.[1]. The Insurance sector in India has gone through a

number of phases and changes, particularly in the recent years when the

Govt. of India in 1999 opened up the insurance sector by allowing private

companies to solicit insurance and also allowing FDI up to 26%. Ever since,

the Indian insurance sector is considered as a booming market with every

other global insurance company wanting to have a lion's share. Currently,

the largest life insurance company in India is still owned by the government.

History of Insurance in India

Insurance in India has its history dating back till 1818, when Oriental Life

Insurance Company was started by Europeans in Kolkata to cater to the

needs of European community. Pre-independent era in India saw

discrimination among the life of foreigners and Indians with higher

premiums being charged for the latter. It was only in the year 1870, Bombay

Mutual Life Assurance Society, the first Indian insurance company covered

Indian lives at normal rates.

At the dawn of the twentieth century, insurance companies started

mushrooming up. In the year 1912, the Life Insurance Companies Act, and

the Provident Fund Act were passed to regulate the insurance business. The

Life Insurance Companies Act, 1912 made it necessary that the premium

rate tables and periodical valuations of companies should be certified by an

actuary. However, the disparage still existed as discrimination between

Indian and foreign companies. The oldest existing insurance company in

India is National Insurance Company Ltd, which was founded in 1906 and is

doing business even today. The Insurance industry earlier consisted of only

two state insurers: Life Insurers i.e. Life Insurance Corporation of India

(LIC) and General Insurers i.e. General Insurance Corporation of India

(GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked

from parent company and made as independent insurance companies:

Oriental Insurance Company Limited, New India Assurance Company

Limited, National Insurance Company Limited and United India Insurance

Company Limited.

Related Acts:-

The insurance sector went through a full circle of phases from being

unregulated to completely regulated and then currently being partly

deregulated. It is governed by a number of acts, with the first one being the

Insurance Act, 1938.

The Insurance Act, 1938

The Insurance Act, 1938 was the first legislation governing all forms of

insurance to provide strict state control over insurance business.

Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19

January 1956, that life insurance in India was completely nationalized,

through a Government ordinance; the Life Insurance Corporation Act, 1956

effective from 1.9.1956 was enacted in the same year to, inter-alia, form

LIFE INSURANCE CORPORATION after nationalization of the 245

companies into one entity. There were 245 insurance companies of both

Indian and foreign origin in 1956. Nationalization was accomplished by the

govt. acquisition of the management of the companies. The Life Insurance

Corporation of India was created on 1 September, 1956, as a result and has

grown to be the largest insurance company in India as of 2006.[2]

General Insurance Business (Nationalization) Act, 1972

The General Insurance Business (Nationalization) Act, 1972 was enacted to

nationalize the 100 odd general insurance companies and subsequently

merging them into four companies. All the companies were amalgamated

into National Insurance, New India Assurance, Oriental Insurance, and

United India Insurance which were headquartered in each of the four

metropolitan cities.[3]

Insurance Regulatory and Development Authority (IRDA) Act, 1999

Till 1999, there were not any private insurance companies in Indian

insurance sector. The Govt. of India, then introduced the Insurance

Regulatory and Development Authority Act in 1999, thereby de-regulating

the insurance sector and allowing private companies into the insurance.

Further, foreign investment was also allowed and capped at 26% holding in

the Indian insurance companies. In recent years many private players entered

in the Insurance sector of India. Companies with equal strength competing

in the Indian insurance market. Currently, in India only 2 million people

(0.2 % of total population of 1 billion), are covered under Mediclaim,

whereas in developed nations like USA about 75 % of the total population

are covered under some insurance scheme. With more and more private

players in the sector this scenario may change at a rapid pace.

General Insurance Business (Nationalization) Act, 1972

The General National Insurance, New India Assurance, Oriental

Insurance, United India Insurance which were headquartered in each of

the four metropolitan cities.[3]LIC:- LIFE INSURANCE CORPRATION OF

INDIA )

A.COMPANY PROFILE OFA.COMPANY PROFILE OF

LICLIC

B.OBJECTIVE B.OBJECTIVE

C.VISION AND MISSIONC.VISION AND MISSION

D.WHAT IS PENSION PLAND.WHAT IS PENSION PLAN

BRIEF HISTORY OF LIFE INSURANCE

CORPORATION (LIC)

Bharat Insurance Company (1896) was also one of such companies inspired

by nationalism. The Swadeshi movement of 1905-1907 gave rise to more

insurance companies. The United India in Madras, National Indian and

National Insurance in Calcutta and the Co-operative Assurance at Lahore

were established in 1906. In 1907, Hindustan Co-operative Insurance

Company took its birth in one of the rooms of the Jorasanko, house of the

great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General

Assurance and Swadeshi Life (later Bombay Life) were some of the

companies established during the same period. Prior to 1912 India had no

legislation to regulate insurance business. In the year 1912, the Life

Insurance Companies Act, and the Provident Fund Act were passed. The Life

Insurance Companies Act, 1912 made it necessary that the premium rate

tables and periodical valuations of companies should be certified by an

actuary. But the Act discriminated between foreign and Indian companies on

many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance

business. From 44 companies with total business-in-force as Rs.22.44 crore,

it rose to 176 companies with total business-in-force as Rs.298 crore in

1938. During the mushrooming of insurance companies many financially

unsound concerns were also floated which failed miserably. The Insurance

Act 1938 was the first legislation governing not only life insurance but also

non-life insurance to provide strict state control over insurance business. The

demand for nationalization of life insurance industry was made repeatedly in

the past but it gathered momentum in 1944 when a bill to amend the Life

Insurance Act 1938 was introduced in the Legislative Assembly. However, it

was much later on the 19th of January, 1956, that life insurance in India was

nationalized. About 154 Indian insurance companies, 16 non-Indian

companies and 75 provident were operating in India at the time of

nationalization. Nationalization was accomplished in two stages; initially the

management of the companies was taken over by means of an Ordinance,

and later, the ownership too by means of a comprehensive bill. The

Parliament of India passed the Life Insurance Corporation Act on the 19th of

June 1956, and the Life Insurance Corporation of India was created on 1st

September, 1956, with the objective of spreading life insurance much more

widely and in particular to the rural areas with a view to reach all insurable

persons in the country, providing them adequate financial cover at a

reasonable cost.

LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart

from its corporate office in the year 1956. Since life insurance contracts are

long term contracts and during the currency of the policy it requires a variety

of services need was felt in the later years to expand the operations and place

a branch office at each district headquarter. re-organization of LIC took

place and large numbers of new branch offices were opened. As a result of

re-organization servicing functions were transferred to the branches, and

branches were made accounting units. It worked wonders with the

performance of the corporation. It may be seen that from about 200.00

crores of New Business in 1957 the corporation crossed 1000.00 crores only

in the year 1969-70, and it took another 10 years for LIC to cross 2000.00

crore mark of new business. But with re-organization happening in the early

eighties, by 1985-86 LIC had already crossed 7000.00 crore Sum Assured on

new policies.

Today LIC functions with 2048 fully computerized branch offices, 100

divisional offices, 7 zonal offices and the corporate office. LIC’s Wide Area

Network covers 100 divisional offices and connects all the branches through

a Metro Area Network. LIC has tied up with some Banks and Service

providers to offer on-line premium collection facility in selected cities. LIC’s

ECS and ATM premium payment facility is an addition to customer

convenience. Apart from on-line Kiosks and IVRS, Info Centers have been

commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,

Kolkata, New Delhi, Pune and many other cities. With a vision of providing

easy access to its policyholders, LIC has launched its SATELLITE

SAMPARK offices. The satellite offices are smaller, leaner and closer to the

customer. The digitalized records of the satellite offices will facilitate

anywhere servicing and many other conveniences in the future.

LIC continues to be the dominant life insurer even in the liberalized scenario

of Indian insurance and is moving fast on a new growth trajectory surpassing

its own past records. LIC has issued over one crore policies during the

current year. It has crossed the milestone of issuing 1,01,32,955 new policies

by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the

corresponding period of the previous year.

From then to now, LIC has crossed many milestones and has set

unprecedented performance records in various aspects of life insurance

business. The same motives which inspired our forefathers to bring

insurance into existence in this country inspire us at LIC to take this

message of protection to light the lamps of security in as many homes as

possible and to help the people in providing security to their families.

Life Insurance Corporation of India

Some Areas

The traditional life insurance business for the LIC has been a little

more than a savings policy. Term life (where the insurance company

pays a predetermined amount if the policyholder dies within a given

time but it pays nothing if the policyholder does not die) has

accounted for less than 2% Life Insurance.

Corporation of India

Some Areas of Future Growth

Life Insurance

The traditional life insurance business for the LIC has been a little more than

a savings policy of the insurance premium of the LIC (Mitra and Nayak,

2001). For the new life insurance companies, term life policies would be the

main line of business.

Health Insurance

Health insurance expenditure in India is roughly 6% of GDP, much higher

than most other countries with the same level of economic development. Of

that, 4.7% is private and the rest is public. What is even more striking is that

4.5% are out of pocket expenditure (Berman, 1996). There has been an

almost total failure of the public health care system in India. This creates an

opportunity for the new insurance companies.

Thus, private insurance companies will be able to sell health insurance to a

vast number of families who would like to have health care cover but do not

have it.

Pension

The pension system in India is in its infancy. There are generally three forms

of plans: provident funds, gratuities and pension funds. Most of the pension

schemes are confined to government employees (and some large

companies). The vast majority of workers are in the informal sector. As a

result, most workers do not have any retirement benefits to fall back on after

retirement. Total assets of all the pension plans in India amount to less than

USD 40 billion.

Therefore, there is a huge scope for the development of pension funds in

India. The finance minister of India has repeatedly asserted that a Latin

American style reform of the privatized pension system in India would be

welcome (Roy, 1997). Given all the pros and cons, it is not clear whether

such a wholesale privatization would really benefit India or not (Sinha,

2000).

OBJECTIVES OF LIC

• Spread Life Insurance widely and in particular to the rural areas and to

the socially and economically backward classes with a view to

reaching all insurable persons in the country and providing them

adequate financial cover against death at a reasonable cost.

• Maximize mobilization of people's savings by making insurance-

linked savings adequately attractive.

• Bear in mind, in the investment of funds, the primary obligation to its

policyholders, whose money it holds in trust, without losing sight of

the interest of the community as a whole; the funds to be deployed to

the best advantage of the investors as well as the community as a

whole, keeping in view national priorities and obligations of attractive

return.

• Conduct business with utmost economy and with the full realization

that the moneys belong to the policyholders.

• Act as trustees of the insured public in their individual and collective

capacities.

• Meet the various life insurance needs of the community that would

arise in the changing social and economic environment.

• achievement of Corporate Involve all people working in the

Corporation to the best of their capability in furthering the interests of

the insured public by providing efficient service with courtesy.

• Promote amongst all agents and employees of the Corporation a sense

of participation, pride and job satisfaction through discharge of their

duties with dedication towards the achievement of the goal.

VISION AND MISSION

VisionTo be the best Housing Finance Company in the country.

Mission

Provide secured housing finance at

affordable cost, maximizing shareholders

value with higher customer sensitivity.

Values

Fair and Transparent Business Practices.

Transformation to a Knowledge Organization.

Higher Autonomy in Operations.

Instilling a sense of Ownership amongst Employees.

PENSION: - A BRIEF INTRODUCTION

What Is Pension

The pension system in India is in its infancy. There are generally three forms

of plans: provident funds, gratuities and pension funds. Most of the pension

schemes are confined to government employees (and some large

companies). The vast majority of workers are in the informal sector. As a

result, most workers do not have any retirement benefits to fall back on after

retirement. Total assets of all the pension plans in India amount to less than

USD 40 billion.

Therefore, there is a huge scope for the development of pension funds in

India. The finance minister of India has repeatedly asserted that a Latin

American style reform of the privatized pension system in India would be

welcome (Roy, 1997). Given all the pros and cons, it is not clear whether

such a wholesale privatization would really benefit India or not (Sinha,

2000).

PENSION PLAN OF LIC:-

• JEEVAN NIDHI

• JEEVAN AKSHAY-VI

• JEEVAN DHARA-I

• NEW JEEVAN SURAKSHA-I

Introduction to the Pension Plans of LIC.

Pension plan are Individual Plans that gaze into your future and foresee financial

stability during your old age. These policies are most suited for senior citizens and

those planning a secure future, so that you never give up on the best things in life.

• Jeevan Nidhi

• Jeevan Akshay-VI

• New Jeevan Dhara-I

• New Jeevan Suraksha-I

Jeevan Nidhi

LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On

survival of the policyholder beyond term of the policy the accumulated

amount (i.e. Sum Assured + Guaranteed Additions + Bonuses) is used to

generate a pension (annuity) for the policyholder. The plan also provides a

risk cover during the deferment period. The USP of the plan being the

pension can commence at 40 years. The premiums paid are exempt under

Section 80CCC of Income Tax Act.

Salient Features:

a . Guaranteed Additions: Guaranteed Additions @ Rs.50/- per thousand

Sum assured for each completed year, for the first five years.

b. Participation in profits: The policy shall participate in profits of the

Corporation from the 6th year onwards and shall be entitled to receive

bonuses declared as per the experience of the Corporation.

c. Benefit On Vesting:

1. Option to commute up to 1/3rd of the amount available on vesting,

which shall include the Sum Assured under the Basic Plan together with

accrued Guaranteed Additions, simple Reversionary Bonuses and

Terminal Bonus, if any.

2 . Annuity as per the option selected: Annuity on the balance amount if

commutation is exercised, otherwise annuity on the full amount.

d. Annuity Options:

On vesting, the annuity instalment, mode of annuity payment and type of

annuity which shall be made available to the Life Assured (Annuitant) /

Nominee will depend upon the then prevailing Immediate Annuity plan of

the Life Insurance Corporation of India and its terms and conditions.

Currently the following options are available under LIC’s immediate

annuities:

1. Annuity for life: The annuity is paid to the life assured as long as he/she

is alive.

2. Annuity Guaranteed for certain periods: The annuity is paid to the life

assured for periods of 5 or 10 or 15 or 20 years as chosen by him/her,

whether or not he/she survives that period. After the chosen period, the

annuity is paid to the life assured as long as he/she is alive3. Annuity with

return of purchase price on death: The annuity is paid to the life assured

as long as he/she is alive. On the death of the life assured, the purchase price

of the annuity is paid as death benefit. The purchase price includes the Sum

Assured under the Basic Plan, the accrued Guaranteed Additions and any

accrued bonuses, excluding the commuted value, if any.

4. Increasing annuity: The annuity is paid to the life assured as long as

he/she is alive. The amount of annuity increases every year at a simple rate

of 3% per annum.

5. Joint Life Last Survivor Annuity: The annuity is paid to the life assured

as long as he/she is alive. On death of the life assured, 50% of the annuity is

payable to the nominated spouse as long as the spouse is alive.

6. Death Benefit on death before annuity vests: On the death of the Life

Assured during the deferment period of the policy, i.e. before the annuity

vests, an amount equal to the Sum Assured under the Basic plan along with

the accrued Guaranteed Additions, simple Reversionary Bonuses and

Terminal Bonus, if any, will be paid in a lump sum to the appointed

nominee, provided the policy is in force for full Sum Assured. Nominee will

also have the option to purchase an annuity with this amount.

Jeevan Akshay VI

Introduction:

It is an Immediate Annuity plan, which can be purchased by paying a lump

sum amount. The plan provides for annuity payments of a stated amount

throughout the life time of the annuitant. Various options are available for

the type and mode of payment of annuities.

Options Available:

The following options are available under the plan

Type of Annuity:

• Annuity payable for life at a uniform rate.

• Annuity payable for 5, 10, 15 or 20 years certain and thereafter as

long as the annuitant is alive.

• Annuity for life with return of purchase price on death of the

annuitant.

• Annuity payable for life increasing at a simple rate of 3% p.a.

• Annuity for life with a provision of 50% of the annuity payable to

spouse during his/her lifetime on death of the annuitant.

• Annuity for life with a provision of 100% of the annuity payable to

spouse during his/her lifetime on death of the annuitant.

You may choose any one. Once chosen, the option cannot be altered.

Mode:

• Annuity may be paid either at monthly, quarterly, half yearly or yearly

intervals. You may opt any mode of payment of Annuity.

Salient features:

• Premium is to be paid in a lump sum.

• Minimum purchase price : Rs.50,000/= or such amount which may

secure a minimum annuity as under:

Mode Minimum Annuity

Monthly Rs. 500 per month

Quarterly Rs. 1000 per quarter

Half-yearly Rs. 2000 per half year

Yearly Rs.3000 per year

• No medical examination is required under the plan.

• No maximum limits for purchase price, annuity etc.

• Minimum age at entry 40 years last birthday and Maximum age at

entry 79 years last birthday.

• Age proof necessary.

Annuity Rate:

Amount of annuity payable at yearly intervals which can be purchased for Rs. 1 lakh under different options is as under:

Incentives for high purchase price:

If your purchase price is Rs. 1.50 lakh or more, you will receive higher

amount of annuity due to available incentives.

Cooling-off period

If you are not satisfied with the “Terms and Conditions” of the policy, you

may return the policy to us within 15 days from the date of receipt of the

Policy Bond. On receipt of the policy we shall cancel the same and the

amount of premium deposited by you shall be refunded to you after

deducting the charges for stamp duty.

Age last birthday

Yearly annuity amount under option

( i )( ii ) (15 years

certain)( iii ) ( iv ) ( v ) ( vi )

40 7510 7440 6930 5610 7310 7120

45 7770 7660 6960 5890 7500 7240

50 8140 7950 7000 6280 7760 7420

55 8650 8330 7050 6810 8130 7670

60 9350 8790 7110 7530 8640 8030

65 10410 9330 7180 8590 9400 8570

70 12080 9830 7260 10220 10560 9370

75 14510 10220 7360 12590 12240 10590

Paid-up value:

The policy does not acquire any paid-up value.

Surrender Value :

No surrender value will be available under the policy.

Loan :

No loan will be available under the policy.

Section 41 of Insurance Act 1938 :

• No person shall allow or offer to allow, either directly or indirectly, as

an inducement to any person to take out or renew or continue an

insurance in respect of any kind of risk relating to lives or property in

India, any rebate of the whole or part of the commission payable or

any rebate of the premium shown on the policy, nor shall any person

taking out or renewing or continuing a policy accept any rebate,

except such rebate as may be allowed in accordance with the

published prospectuses or tables of the insurer: provided that

acceptance by an insurance agent of commission in connection with a

policy of life insurance taken out by himself on his own life shall not

be deemed to be acceptance of a rebate of premium within the

meaning of this sub-section if at the time of such acceptance the

insurance agent satisfies the prescribed conditions establishing that he

is a bona fide insurance agent employed by the insurer.

Any person making default in complying with the provisions of this section

shall be punishable with fine which may extend to five hundred rupees.

New Jeevan Dhara-I

Product summary:

These are Deferred Annuity plans that allow the policyholder to make

provision for regular income after the selected term.

Premiums:

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

Salary deduction, as opted by you, throughout the term of the policy or till

earlier death. Alternatively, the premium may be paid in one lump sum

(single premium).

Tax Benefits:

Tax relief under Section 80ccc is available on premiums paid under New

Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan

Dhara I (Table No.148) qualify for tax relief under Section 88.

Bonuses:

These are with-profit plans and participate in the profits of the Corporation’s

annuity / pension business. Policies get a share of the profits in the form of

bonuses. Simple Reversionary Bonuses are declared per thousand Sum

Assured annually at the end of each financial year. Once declared, they form

part of the guaranteed benefits of the plan. Final (Additional) Bonuses may

also be payable provided policy has run for a certain minimum period.

New Jeevan Suraksha -I

Product summary:

These are Deferred Annuity plans that allow the policyholder to make

provision for regular income after the selected term.

Premiums:

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

Salary deduction, as opted by you, throughout the term of the policy or till

earlier death. Alternatively, the premium may be paid in one lump sum

(single premium)

Tax Benefits:

Tax relief under Section 80ccc is available on premiums paid under New

Jeevan Suraksha I (Table No.147). The premiums paid under New Jeevan

Dhara I (Table No.148) qualify for tax relief under Section 88.

Bonuses:

These are with-profit plans and participate in the profits of the Corporation’s

annuity / pension business. Policies get a share of the profits in the form of

bonuses. Simple Reversionary Bonuses are declared per thousand Sum

Assured annually at the end of each financial year. Once declared, they form

part of the guaranteed benefits of the plan. Final (Additional) Bonuses may

also be payable provided policy has run for a certain minimum period.

ICICI PRUDENTIAL

• HISTORY OF ICICI PRUDENTIAL

• VISION AND VALUES

• VARIOUS RETIREMENT SOLUTION

HISTORY OF ICICI PRUDENTIAL

ICICI Prudential is a joint venture between ICICI Bank and Prudential

plc engaged in the business of life insurance in India. ICICI

Prudential is the largest private insurance company and second largest

insurance in India after LIC. 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 Life's capital stands at

Rs. 37.72 billion (as on March, 2008) with ICICI Bank and Prudential

plc holding 74% and 26% stake respectively. For the year ended March

31, 2008, the company garnered Retail New Business Weighted premium of

Rs. 6,684 crores, registering a growth of 68% over the last year and

has underwritten nearly 3 million retail policies during the period.

The company has assets held over Rs. 30,000 crore as on April 30,

2008.ICICI Prudential Life is also the only private life insurer in

India to receive a National Insurer Financial Strength rating of AAA

(Ind) from Fitch ratings. The AAA (Ind) rating is the highest rating,

and is a clear assurance of ICICI Prudential's ability to meet its

obligations to customers at the time of maturity or claims.For the

past seven years, ICICI Prudential Life has retained its leadership

position in the life insurance industry with a wide range of flexible

products that meet the needs of the Indian customer at every step in

life.

Vision & Values

To be the dominant Life, Health 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.

The success of the company will be founded in its unflinching commitment

to 5 core values -- Integrity, Customer First, Boundary less, Ownership and

Passion. Each of the values describes 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.

How to plan for retirement?

5 simple steps to arrive at an ideal retirement plan Step 1: Decide how much income you require to live comfortably in your

post-retirement years. Remember to take into account aspects like increased

medical costs, vacations and gifts for family, but reduce costs like children's

education and rent, if you own your home. Use our easy Inflation Index

Calculator to calculate the impact of inflation.

Step 2: Determine how much you need to save regularly, starting today.

Use our Retirement Calculator to determine how large a kitty you will need

and how much you need to save each year.

Step 3: Select the right retirement plan that enables you to meet your post-

retirement requirements. Preferably invest in market-linked plans, which can

provide you with potentially higher returns in the long run. Our Life Stage

Profiler will help you select the plan that meets your criteria

Step 4: Start saving now so you have time on your side and can enjoy the

power of compounding. Use our simple Power of Compounding Calculator.

Step 5: Systematically invest a fixed amount every month for your post-

retirement years.

Why is retirement planning important?

Retire from work. Not from life.

A retirement plan is an assurance that you will continue to earn a satisfying

income and enjoy a comfortable lifestyle, even when you are no longer

working. To understand why an increasing number of individuals have

already started planning for their retirement, and why you should too, read

on.

Independence is the new way of life: An increasing number of young

Indian professionals are moving away from the traditional joint family

structure. Since support no longer comes easily, parents have realized the

need to provide for themselves during their retirement years.

Costs set to soar: Skyrocketing costs throw even a well-salaried person off

balance. With rates rising everyday, you can imagine how high they will be

when you are ready to retire. A retirement plan provides you with a steady

income every month, to arm you in the face of rising costs.

To understand how inflation can impact your monthly expenses, use our

special tool, the Inflation Index calculator.

Non-earning retirement phase is now longer: Only 4% of India working

population- mostly government employees – are covered by pensions. The

remaining 96% comprises self-employed and salaried professionals who do

not have a formal, mandated provision for pensions.

ICICI Prudential offers two key retirement plans, LifeLink Super Pension

and LifeTime Super Pension - flexible income cum insurance plans that

ensure you meet all your retirement requirements. So you can retire

peacefully from work, but not from life.

Retirement Solutions

To cater to the needs of a customer looking for retirement planning, ICICI

Prudential presents a wide array of products. These products have been

designed to take into account the diverse set of needs that characterize

individual customers.

Plan Name

Plan Type

LifeStage Pension PremierLife Pension LifeTime Super Pension LifeLink Super Pension ForeverLife Immediate Annuity

Unit Linked Unit Linked Unit Linked Unit Linked Traditional Traditional

Why Life Stage Pension

Retirement time is the time to live your dream, dream that you have been

putting off as you never had the time for it. But your retirement dream has a

cost attached to it. We call this your retirement number.

To help you achieve your retirement number ICICI Prudential presents to

you, LifeStage Pension.

One of the most distinguishing features of this policy is that it has no

premium allocation charge for regular premiums which means 100% of your

money is invested. What’s more, the policy provides you with a unique

lifecycle-based strategy that continuously re-distributes your money across

various asset classes based on your life stage and risk tolerance, eventually

providing you with a customized retirement solution.

Invest today to attain your retirement number and fulfill your dream

Why Premier Life Pension

You have strived hard to achieve your dreams and have attained the best

comforts life could offer. After having reached this enviable and secure

position, wouldn’t you like to continue living life on your own terms even

after retirement? If you think so, then you need a retirement solution that

not only suits your needs but also lets you retire RICH.

To help you achieve this, ICICI Prudential Life Insurance

presents PremierLife Pension Plan- a limited premium paying, unit-linked

pension policy designed for preferred customers like you.

This unique policy helps you customize your investments by allowing you to

decrease your premium contributions as well as allowing you to boost your

investment kitty by making top-ups at any time. Once you arrive at your

retirement age the accumulated value of your policy provides you with a

regular income (pension) for life

Why LifeTime Super Pension Plan

ICICI Prudential's LifeTime Super Pension policy is especially designed to

help you systematically save towards a joyful and satisfying retirement.

LifeTime Super Pension Plan is a cost-effective pension plan that delivers

great value

in the long run. A regular-premium unit-linked pension policy, LifeTime

Super Pension ensures you earn a fixed income, for your entire life

after retirement. So you can relax and live moments that truly matter.

.

Why LifeLink Super Pension

ICICI Prudential's LifeLink Super Pension Plan has been especially

tailored for individuals who would much rather make a lump-sum

investment than pay premiums at regular intervals for their retirement

planning. A cost-effective single premium unit-linked pension policy,

LifeLink Super Pension Plan provides potentially higher returns that

ensure your golden years are secure and peaceful.

Invest in LifeLink Super Pension Plan today and watch your money

multiply every month, right up to the day you retire. Receive an assured

income from your retirement day, for the rest of your life. Read more about

the features and benefits of this plan.

Why ForeverLife

ICICI Prudential's ForeverLife is a complete insurance cum pension plan

that performs two crucial roles: it acts as a protective cover while you earn

for your retirement, and provides you with regular pensions once you

retire.

Why Immediate Annuity

Security and comfort during retirement is a top priority for everyone. It

forms the central aspect of a dream that everyone hopes to achieve and

realize at some point or the other during his or her life as a senior citizen.

If you fear that you've missed the bus as far as retirement planning is

concerned, there is no reason to despair. With ICICI Prudential's Single

Premium Product, you can start earning an annuity income immediately

after paying the premium. What's more, the annuity income is guaranteed for

life which means that the insurance company pays you and your spouse (as

the case maybe) a guaranteed pension till you live.

Tax Benefits on Insurance and Pension

Life insurance and retirement plans are effective ways to save taxes when

doing your year end tax planning.

To assist you in tax planning, the tax breaks that are available under our

various insurance and pension policies are described below:

Our life insurance plans are eligible for tax deduction under Sec. 80C.

1. Our Pension plans are eligible for a tax deduction under Sec. 80CCC.

2. Our health insurance plans/riders are eligible for tax deduction under

Sec. 80D.

3. The proceeds or withdrawals of our life insurance policies are exempt

under Sec 10(10D), subject to norms prescribed in that section.

Invest in ICICI Prudential Life insurance and retirement plans and avail of

these tax planning services to save tax at your year end tax planning!

ULIPs : An Introduction

Most importantly, what are ULIPs? Here, you will find all the information

you need to set your mind at ease about how to invest in ULIPs, and which

ULIP is right for you.

ULIPs are a category of goal-based financial solutions that combine the

safety of insurance protection with wealth creation opportunities. In ULIPs,

a part of the investment goes towards providing you life cover. The residual

portion of the ULIP is invested in a fund which in turn invests in stocks or

bonds; the value of investments alters with the performance of the

underlying fund opted by you.

Simply put, ULIPs are structured in such that the protection element and the

savings element are distinguishable, and hence managed according to your

specific needs. In this way, the ULIP plan offers unprecedented flexibility

and transparency.

Working of ULIPs

It is critical that you understand how your money gets invested once you

purchase a ULIP:

When you decide the amount of premium to be paid and the amount of life

cover you want from the ULIP, the insurer deducts some portion of the

ULIP premium upfront. This portion is known as the Premium Allocation

charge, and varies from product to product. The rest of the premium is

invested in the fund or mixture of funds chosen by you. Mortality charges

and ULIP administration charges are thereafter deducted on a periodic

(mostly monthly) basis by cancellation of units, whereas the ULIP fund

management charges are adjusted from NAV on a daily basis.

Since the fund of your choice has an underlying investment – either in

equity or debt or a combination of the two – your fund value will reflect the

performance of the underlying asset classes. At the time of maturity of your

plan, you are entitled to receive the fund value as at the time of maturity. The

pie-chart below illustrates the split of your ULIP premium:

TYPES OF ULIP

• ULIP FOR RETIREMENT PLANNING

Types of ULIPs

One of the big advantages that a ULIP offers is that whatever be your

specific financial objective, chances are that there is a ULIP which is just

right for you. The figure below gives a general guide to the different goals

that people have at various age-groups and thus, various life-stages.

Depending on your specific life-stage and the corresponding goal, there is a

ULIP which can help you plan for it.

PLANNING ULIPS FOR RETIREMENT

Retirement is the end of active employment and brings with it the cessation

of regular income. Today an increasing number of people have stated

planning for their retirement for below mentioned reasons

• Almost 96% of the working population has no formal provisions for

retirement

• With the growing nuclearisation of family structure, traditional

support system of the younger earning members – is no longer

available

• Developments in the healthcare space has lead to an increase in life

expectancy

• Cost of living is increasing at an alarming rate

Pension plans from insurance companies ensure that regular, disciplined

savings in such plans can accumulate over a period of time to provide a

steady income post-retirement. Usually all retirement plans have two

distinctive phases

• The accumulation phase when you are saving and investing during

your learning years to build up a retirement corpus and

• The withdrawal phase when you actually reap the benefits of your

investment as your annuity payouts begin

In a typical pension plan you have the flexibility to make a lump sum

payment or a regular contribution every year during your earning years. Your

money is then invested in funds of your choice. You can opt to receive the

annuity at any time after vesting age (age at which you become eligible for

pension chosen by you at the inception of the plan).

Most of the Unit linked pension plans also come with a wide range of

annuity options which gives you choice in structuring the post-retirement

benefit pay-outs. Also at the time of vesting you can make a lump sum tax-

exempted withdrawal of up to 33 per cent of the accumulated corpus.

In a retirement plan the earlier you begin the greater you gain post

retirement due to the power of compounding.

Let us take an example of Gaurav & Hari. Both of them want to retire at the

age of 60. Gaurav starts investing Rs. 10,000 every year from the age of 25

till the time that he retires. In all, he would have invested Rs. 350,000. If his

investments were to earn 7% return every year, at the time of his retirement,

Gaurav will have a retirement corpus of Rs. 13, 82,368.

Now, Hari starts investing 10 years later (i.e. at the age of 35) and in order to

make up for the lost time, invests Rs.15,000 every year (which is 50% more

than Gaurav’s annual investment). So, by the time of his retirement, he

would have invested Rs. 3,75,000. And assuming the same annual return of

7%, he will end up with a retirement corpus of Rs 9, 48,735.

So, you see how despite setting aside more than 50% of Gaurav’s annual

contribution, Hari ends up with a retirement corpus which is almost a third

lesser than Gaurav’s. That is the power of compounding.

Which is why, it is never too early to invest in a ULIP for retirement

planning

Tax Benefits of ulip

ULIPs are an efficient tax saving instrument too .The tax benefits that you

can avail in case you invest in ULIPs are described below:

• Life insurance plans are eligible for deduction under Sec. 80C

• Pension plans are eligible for a deduction under Sec. 80CCC

• Health insurance plans and critical illness riders are eligible for

deduction under Sec. 80D

The maturity proceeds or withdrawals of life insurance policies are exempt

under Sec 10(10D), subject to norms prescribed in that section.

ULIP s FAQ (FREQUENTLY ASKED QUESTION )

Q1. What is a Unit Linked Fund?

Unit Linked Fund is a pool of the premiums paid by the policyholders which

is invested in a portfolio of assets to achieve the fund(s) objective. The price

of each unit in a fund depends on how the investments in the fund would

perform. The fund is managed by the insurance companies.

Q2. What is a Fund Value and how is it calculated?

Fund Value is the product of the total number of units under the policy and

the NAV. The fund value for the purpose of claims, surrenders or any other

clause stated shall be calculated on the basis of NAV.

Q3. What do I get at the end of my policy term?

The benefit received at the end of policy term is termed as maturity benefit.

The policyholder is entitled to receive fund value as maturity benefit.

Q4. What will my family receive if something happens to me?

In the unfortunate event of death during the term of the policy, the person

appointed as nominee shall receive the higher of sum assured or the fund

value. There are also certain ULIPs in market which give sum of Fund value

& sum assured as death benefit.

Q5. Is investment return guaranteed in ULIPs?

Investment returns from ULIP may not be guaranteed.” In unit linked

products/policies, the investment risk in investment portfolio is borne by

the policy holder”. Depending upon the performance of the unit linked

fund(s) chosen; the policy holder may achieve gains or losses on his/her

investments. It should also be noted that the past returns of a fund are not

necessarily indicative of the future performance of the fund.

Q6. Can I change / switch my asset allocation?

Yes, you can change the investment pattern by moving from one fund to

other fund (s) amongst the funds offered under a particular product. Such a

change between funds is termed as a Switch. There will be a flat charge

levied for any switch over and above the free switches.

Q7. Can I partially withdraw from my policy?

Yes, you can encash / withdraw a part of the fund anytime after completion

of three years, subject to surrender charges as applicable to each individual

plan.

Q8. Can I foreclose my policy? Are there any charges applicable?

Yes, you can foreclose your policy by surrendering the policy. Surrender

means terminating the contract once and for all. On surrender, the surrender

value is payable to you which is Fund Value less the surrender charge.

Surrender Charge means a charge levied on the fund value at the time of

surrender of the policy.

RESEARCH SECTIONRESEARCH SECTION

A. RESEARCH OBJECTIVEA. RESEARCH OBJECTIVE

B. HYPOTHESISB. HYPOTHESIS

C. RESEARCH METHODOLOGYC. RESEARCH METHODOLOGY

RESEARCH PROBLEM

1) To establish an interface between the policy/plans makers and policy

takers, that how and in what manners they show there reaction

towards policy and plan.

Through the study we try to study and analysis the different

pension plans of the different company. How people choose the

suitable pension plan for them from LIC.

2) We also want to know that how and in what manners the different

pension plan attract different age and salary group.

HYPOTHESISHYPOTHESIS

Hypothesis is couched in terms of the particular independent and dependent

variables that are going to be used in study. Research hypothesis are specific

testable prediction made about the independent and dependent variables in

the study.

As data is not originally collected for use in the research project under

consideration, but rather for use some other project, by some other person in

terms of secondary data.

Usually the literature review has given background material that

justifies the particular hypothesis that is to be tested.

There exists two type of hypothesis that is to be :

Null hypothesis

Alternate hypothesis

• In null hypothesis we assume that LIC pension plan work over the

other private insurance plan like ICICI prudential.

• Alternate hypothesis if our assumption that the LIC pension plan work

over the other private company pension plan go wrong, alternate

hypothesis exists. It proves that ICICI prudential plan has greater

share.

RESEARCH METHODOLOGY

RESEARCH:-

“Research is an organized and systematic way of finding answers

to question”.

“Research is an enquiry or examination to discover new

information or relationship and to extent and to verify existing knowledge”.

Redman & Mory define research as a “systematized effort to

gain new knowledge.”

Methodology is define as

1. “The analysis of the principle of methods, rules, and postulates

employed by a discipline” or

2. “The development of methods, to be applied within a discipline”

3. “A particular procedure or set of procedure.”

Research design

The framework of conducting research is known as research design.

“Research design is the plan, structure, and strategy of investigation

conceived so as to obtain answers to research question and to control

variance.”

Types of research Design:-

There are three types of Research Design:-

1. Exploratory Research Design: - The major emphasis in exploratory

Research Design is on discovery of ideas and insights.

2. Descriptive Research Design: - The descriptive Research Design

study is typically concerned with determining the frequency with

which something occurs or the relationship between two variables.

3. Causal Research Design: - A Causal Research Design is concerned

with determining cause and effect relationship.

4. For the study, Descriptive Research Design was undertaken as it

draws the opinion of employees/workers on specific aspect

Why pension plans offer the best retirement solutions

Mohan Shahs father Prakash retired last year from Central Bank of India.

During his 29 years of service, he failed to opt for any pension scheme. And

being the sole earning member, Prakash retired with little savings. The little

that was there in his bank account was used up last December to pay for his

second daughter’s wedding.

Today, he and his wife live with Mohan and are forced to rely on their

children for financial support. But for how long? Having turned 60 last

month, and looking at the mortality tables, Mohan’s father has probably

another 15 to 20 years left. Added to daily expenses, in January this year,

Mohan’s mother was diagnosed with diabetes and has to take insulin

regularly.

This means medical expenses for Mohan. Health and medical costs have

increased manifold and will quadruple over the next 10 years. This is an

additional expense for Mohan, as doctor’s visits become a regular feature as

one ages. It’s not just medical costs alone. Even daily expenses like food,

petrol and transportation end up costing more. A kilo of potatoes used to cost

just Rs 1.50 some time back. Today, a kilo costs Rs 8, and if inflation rises at

the annual rate of five to six per cent, 10 years from now potatoes could cost

Rs 43 a kilo! Petrol prices have equally shot up from Rs 17 a litre 10 years

back to Rs 34-35 plus today, and could well rise to Rs 60 a litre 10 years

from now. Enter pension, to reduce tension. Pension is all about insuring

oneself financially against the risk of living too long. It is about fund

management, long-term savings, protection and annuity income. Moreover,

investment in pension plans offers taxpayers a direct tax deduction of Rs

10,000 from one’s taxable income under Section 80 CCC (1) of the Income

Tax Act. Unlike Section 88, the tax benefits under this section are available

to persons in all income brackets. Even for those eligible to save tax under

Section 88, the saving on an investment of Rs 10,000 is higher in the case of

pension plans. The tax saved is Rs 3,150, whereas under Section 88 a Rs

10,000 investment yields a maximum tax rebate of Rs 2,000. However, one

doesn’t invest in pension schemes only for tax savings. Considering the high

cost of living and falling interest rates, people ought to be saving far more

than Rs 10,000 a year if they wish to retain their present lifestyles. Take the

Life Insurance Corporation’s (LIC) Jeevan Suraksha pension plan. A 30-

year-old paying Rs 10,238 every year for a term of 20 years will be entitled

to a pension of just Rs 14,200 per month on retiring at the age of 50. LIC

assumes an annual bonus rate of Rs 65 per Rs 1,000. This is purely an

illustration, which could vary depending on interest rates and investment

strategies. A pension plan also allows a policyholder to withdraw a certain

percentage of the accumulated funds on retirement to take care of some large

expenses. Most of the private players - ICICI Prudential, HDFC Standard

Life, Tata AIG and Aviva Life - have followed in the LIC’s footsteps and

offer a maximum withdrawal of 25 per cent of the accumulated corpus at the

time of retirement. OM Kotak Mahindra Life is the only one to offer a

maximum withdrawal of 33 per cent of the accumulated amount.

After withdrawal, policyholders have to buy an annuity plan from the

balance amount that will provide them with a monthly pension till they bid a

final goodbye. By taking an open market option, customers can, on maturity,

buy an annuity product from any life insurance company. Should a

policyholder die within the accumulating period, most life insurers return

premium with interest, subject to a maximum of sum assured, plus

accumulated bonuses to date, say officials with HDFC Standard Life.

It is not easy to decide today how much annuity one should take 20 years

later. That’s a decision best left to be made at the time of retirement.

Customers can choose from various annuity options available, including

options like annuity for husband and wife, annuity with annual increment,

annuity with return of purchase price and more. During the accumulation

phase, a customer can only decide how much he/she can contribute and

afford to put aside for post-retirement needs, says Tata AIG Life Insurance

Company managing director Ian Watts. Looking at the inflation rate and

increasing post-retirement costs in terms of healthcare needs, this means one

should ideally save longer and more if one wishes to preserve one’s existing

lifestyle. A few ballpark numbers will help you figure out how much you

should save in your circumstances. If you save Rs 10,000 every year for a

period of 30 years under LIC’s Jeevan Suraksha, you can expect a pension of

Rs 9,290 per month on retirement after withdrawing Rs 3.93 lakh on

retirement.

Should you not opt to withdraw a part of the accumulated corpus, you can

expect a monthly pension of Rs 12,388 based on LIC’s current indicative

calculations. A lot, however, depends on interest rates at the point of

retirement. A warning is in order, though: The incentive to save more than

Rs 10,000 is low because the balance has to come from post-tax income.

On the other hand, if you do save more and entitle yourself to higher

pension, that pension income will be taxed again as normal income. So, it’s a

double whammy — double taxation of pension savings and pension income.

Yet, Mohan, learning from his father’s failure to save for post-retirement

life, signed his first pay cheque away towards the purchase of an ICICI

Prudential pension plan. He plans to religiously put aside Rs 20,000 every

year to get himself a worthwhile pension and in the hope that the

government will increase the tax deduction in the years to come. Meanwhile,

his life gets covered during the savings/ accumulation period. ICICI

Prudential also offers a health cover and guarantees capital protection during

the accumulation phase. To be sure, pension plans are not the only available

instruments in the market today for long-term savings. During the

accumulation phase, one could opt for mutual funds, the government’s tax-

free bonds, the public provident fund, or government securities. But there is

no tax exemption or inherent life cover in mutual funds; in the case of PPF,

you get section 88 benefits for incomes up to Rs 5 lakh, but not above. The

interest is, however, tax-free. Some infrastructure bonds also offer Section

88 benefits.

HOW MUCH PENSION?

In retirement planning, one needs to calculate backward to figure out how

much one should invest - with or without tax breaks. First, ask yourself

when you wish to retire. Then, what kind of income do you need to maintain

your present standard of living. If you think you need Rs 10,000 a month

(pre-tax) if you were to retire today, assuming a six per cent inflation rate,

you would need Rs 17,908 after 10 years, Rs 23,965 after 15, and Rs 32,071

after 20 years. If you assume a more benign inflation rate of, say, four per

cent, the required amounts would be Rs 14,802, Rs 18,009 and Rs 21,911

after 10, 15 and 20 years of saving. You will then need to talk to your

pension plan advisor and figure out what you need to put away every year to

achieve your targeted pension income. We have to, of course, assume that

taxation will be indexed to inflation - in which case your post-tax income 20

years from now will be similar in real terms to what it is today for a pension

income of Rs 10,000 per month.

Pension plans rise in insurance co portfolios

Can I lead a comfortable life after my retirement

? That's a question an increasing number of people are

asking themselves.

And that's the reason why pension plans today contribute about 30% of the

insurance industry's total business . The industry is seeing a 20%-25 %

annual growth in pension policies and a 50% growth in premium. "The

average premium for pension plans is higher ," says Amit Gupta, director for

marketing in ING Vysya Life Insurance. At ING Life, pension plans used to

contribute 4%-5 % of business in 2006. But in 2008, that's grown to about

10%. For Bharti AXA Life, the retirement product , which was launched in

January 2008, contributed 20% of the total premium in the year.

Most private companies do not offer pensions, and employees are typically

dependent only on their provident fund for retirement financing, which in

most cases is insufficient to maintain current living standards. That's the gap

pension plans are seeking to fill. "Pension plans are mainly targeted towards

couples in the age group of 35 and 45 years. Couples at this age would have

completed saving for their protection needs, would have children who are

slightly older and would be now interested in planning for retirement ," says

Gupta. Young couples are also beginning to plan for retirement, but this is

still a relatively small proportion and is largely seen in metros.

Financial planners say it is best to start investing in a pension plan early in

life, like 25-35 years, in order to get a meaningful deferred annuity

. As the gap reduces between the contribution period and the vesting period

the pension amount becomes smaller.

A global survey on retirement trends conducted by AXA in 2008 revealed

that the working population in India expects to have a better quality of life or

at least maintain the current life standards postretirement.

"The survey covered 26 countries and Indians were the most optimistic. The

optimism is not supported with financial planning, as 56% of the population

hadn't started preparing for retirement," says the survey. Insurance

companies say major concerns among people in pension planning relates to

deciding the right time to inves t and choosing a plan that provides payout

beyond a certain age.

Companies are coming with products to cater to different needs. "We have a

product that allows people to increase contribution to the retirement kitty,"

says Shyamal Saxena, chief marketing officer of Bharti AXA.

Did you say retirement is all about surviving on a meager pension?

Banish the thought. With the market flush with different types of schemes,

you need not walk into the twilight zone with empty pockets. In fact,

retirement solutions are suddenly in demand with people becoming more

aware of the need to save for the sunset years. Particularly in a country like

India where, according to a survey by the Invest India Economic

Foundation, less than a sixth of those about to retire in the next 10 years are

covered by some form of pension, and only 2% of those not working in

government (where pensions are generous) being able to fund their retired

lives even if they cut expenses by half, the need for retirement plans is

inevitable.

Surprisingly, in sharp contrast to times when only traditional pension plans

were available in the market, the entry of private insurance players has

changed the scenario, as also the profile of the products. Pension plans today

are more oriented towards the model of ULIPs (unit-linked insurance

products) because of their ability to provide better returns on the back of

robust stock market performances, as is the norm abroad.

Says Bert Paterson, managing director, Aviva India: “In the last 20-25 years,

traditional products have taken a back seat in the developed markets. Now

more than 80%-90% of people invest in unit-linked products for both

pensions and life insurance.”

This, however, is not the case with India. Here, the majority of people still

rely on the traditional pension schemes such as PF and post office plans. But

taking a cue from the developed world, new age insurance companies have

introduced a whole range of unit-linked pension plans in the Indian market

too, with their number growing by the day.

Aviva India’s PensionPlus, ICICI Prudential’s LifeLink Super Pension and

LifeTime Super Pension, TaTa AIG’s InvestAssure Gold, SBI Life’s Horizon

II Pension and Reliance Golden Years Plan are some of them. Furthermore,

as the insurance companies providing these plans have increased manifold,

there are more product choices before investors than ever before.

“Even within the ULIPs, investors have choices in terms of varying their

exposure to the equity markets by choosing an aggressive or dominant

pension fund,” says Ashish Kapur, CEO, Invest Shoppe India Ltd, adding

that for instance, an aggressive pension scheme would invest up to 60% in

equity and the rest in debt-oriented avenues, while the conservative plan

would have a nominal exposure of 10-15% to equity.

Conventional pension plans, on the other hand, invest a major portion of the

premium amount in bonds and government securities (G-Secs). That is why

the returns are on the lower side there, say investment experts. And if one

were to factor into the equation an annual inflation figure of approximately

5%-6% per annum, then the real return figures look even more

unimpressive. As against this, unit-linked pension plans are said to be giving

returns of 25-40% in some cases.

Better returns, however, are not the only reason for the growing popularity

of ULIP products. “The reasons for the increasing popularity of ULIPs are

that they are flexible, transparent and provide value for money. What’s

more, they can be suited to the needs of all types of customers, from the risk

averse to customers who seek higher returns with some downside

risk,”informs Paterson.

ICICI Prudential’s Life Time Pension Plan, for instance, allows one to

choose from three options – Income, Balanced and Growth. While the

Income fund is 100% invested in debt instruments, the Balanced and Growth

options provide flexibility to allocate up to 40% and 90%. Likewise, Aviva’s

PensionPlus comes with three fund options – Balanced, Growth and Secure.

And the same is the case with most other plans. Thus, depending upon their

risk appetite, the customers can choose which fund option to go for.

“For a risk-averse customer, a Secure Fund or the Protector Fund is

advisable as most of the money is invested in government bonds. For

someone wanting returns and willing to take risks, a Growth fund is the best

where most of the money is invested in equities,” says Paterson.

Thus, as against the conventional belief that ULIPs being market-linked

products are risky, it is possible to build in an element of guaranteed return

within the unit-link framework too. “The key point is that customers can

tailor their investment strategy to suit their risk profile. Besides, the

investment strategy is flexible and can be changed as the customer’s needs

and circumstances change,” he adds.

Besides, according to experts, unit-linked products have distinct advantages

over traditional ones. Firstly, they are transparent. A customer can track the

value of his investments on a daily basis as the NAV is published in leading

dailies and on the websites of the companies. Further, all charges on the

policy are shown to the customer.

Secondly, they are flexible. “Every insurance company has four to five

ULIPs with varying investment options, charges and conditions for

withdrawals and surrender. Moreover, schemes have been tailored to suit

different customer profiles and, in that sense, offer a great deal of choice,”

says Kapur.

Thirdly, ULIPs offer liquidity to the individual as he can withdraw money

anytime he wishes to after the initial lock-in period without a surrender

charge. This is unlike conventional endowment plans where individuals tend

to lose out on surrender charges on surrendering their policies.

Other advantage are that since the investments are made for long periods, the

chances of earning a decent return are high. Also, the premiums paid for

ULIPs are eligible for tax rebates under Section 80C which allows a tax

deduction of premiums paid within the overall ceiling of Rs 1 lakh. Further,

proceeds from ULIPs are tax-free under section 10(10D), unlike those from

a mutual fund which attract capital gains tax.

This, however, doesn’t mean that one should opt for unit-linked products

without taking any precaution.

First, one should look at the various charges being levied by the insure

before choosing a pension plan. One should also look at the fund

performance and avoid reacting impulsively. “Usually investors react

impulsively to the volatile movements of the market and switch in between

the schemes. Since ULIPs are designed for long-term investment, one should

watch the performance over a period of time,” advises an SBI Life Insurance

spokesperson.

It also makes eminent sense to avoid putting all your eggs in one basket.

“More so, since none of the private insurers has a performance track record

available for evaluation. Although LIC has been around for decades, it has

opted out of assuring returns as it did in the past. So spread your investment

over plans of more than one company, but not at the cost of your investment

objective and risk profile,” advises Kapur.

Also, a prudent factor while choosing a pension plan is that it should

preferably be a pure pension plan. Frills like life insurance cover and

accident or critical illness riders should preferably be avoided.

COMPRATIVE ANALYSIS OF LIC

AND ICICI PRUDENTIAL WITH

OTHER INSURANCE COMPANY

There are a total of 13 life insurance companies operating in India, of which

one is a Public Sector Undertaking and the balance 12 are Private Sector

Enterprises.

List of Companies are indicated below:-

NAME OF THE LIFE INSURANCE COMPANY AND THE SHARE HOLDING PATTEN

Name of the company Nature of Holding

Allianz Bajaj Life Insurance Co Private

Aviva Life Insurance Private

Birla Sun Life Insurance Co Private

HDFC Standard Life Insurance Co Private

ICICI Prudential Life Insurance Co Private

ING Vysya Life Insurance Co. Private

Life Insurance Corporation of India Public

Max New York Life Insurance Co. Private

MetLife Insurance Co. Private

Om Kotak Mahindra Life Insurance Private

Reliance insurance Private

SBI Life Insurance Co Private

TATA- AIG Life Insurance Company Private

MARKET SHARE OF INSURANCE COMPANY (%)

Name of the Player Market share (%)

LIFE INSURANCE CORPORATION OF INDIA 82.3

ICICI PRUDENTIAL 5.63

BIRLA SUN LIFE 2.56

BAJAJ ALLIANZ 2.03

SBI LIFE INSURANCE 1.80

HDFC STANDARD 1.36

TATA AIG 1.29

MAX NEW YARK 0.90

AVIVA 0.79

OM KOTAK MAHINDRA 0.51

ING VYSYA 0.37

MET LIFE 0.21

PRESENT SCENARIO OF INSURANCE INDUSTRY

India with about 200 million middle class household shows a huge untapped

potential for players in the insurance industry. Saturation of markets in many

developed economies has made the Indian market even more attractive for

global insurance majors. The insurance sector in India has come to a position

of very high potential and competitiveness in the market. Indians, have

always

seen life insurance as a tax saving device, are now suddenly turning to the

private sector that are providing them new products and variety for their

choice.

Consumers remain the most important centre of the insurance sector. After

the entry of the foreign players the industry is seeing a lot of competition

and thus improvement of the customer service in the industry.

Computerization of operations and updating of technology has become

imperative in the current scenario. Foreign players are bringing in

international best practices in service through use of latest technologies

The insurance agents still remain the main source through which insurance

products are sold. The concept is very well established in the country like

India but still the increasing use of other sources is imperative. At present

the distribution channels that are available in the market are listed below.

• Direct selling

• Corporate agents

• Group selling

• Brokers and cooperative societies

• Bank assurance

Customers have tremendous choice from a large variety of products from

pure term (risk) insurance to unit-linked investment products. Customers are

offered unbundled products with a variety of benefits as riders from which

they can choose. More customers are buying products and services based on

their true needs and not just traditional money back policies, which is not

considered very appropriate for long-term protection and savings. There is

lots of saving and investment plans in the market. However, there are still

some key new products yet to be introduced - e.g. health products.

The rural consumer is now exhibiting an increasing propensity for insurance

products. A research conducted exhibited that the rural consumers are

willing to dole out anything between Rs 3,500 and Rs 2,900 as premium

each year. In the insurance the awareness level for life insurance is the

highest in rural India, but the consumers are also aware about motor,

accidents and cattle insurance. In a study conducted by MART the results

showed that nearly one third said that

They had purchased some kind of insurance with the maximum

Penetration skewed in favor of life insurance. The study also pointed ou

The private companies have huge task to play in creating awareness and

Credibility among the rural populace. The perceived benefits of buying a

Life policy range from security of income bulk return in future, daughter's

Marriage, children's education and good return on savings, in that order,

The study adds.

COMPRATIVE ANALYSIS AND

INTERPRETATION

COMPRATIVE ANALYSIS OF ULIP PENSION

PLAN OF LIC AND ICICI PRUDENTIL

Profit Plus(LIC)

Premier Life Gold(ICICI)

PPT Single,3,4,5 year

3 or 5 year

Minimum premium 20,000 for single mode

10,000 for others

1,00,000 for 3 year

60,000 for 5 year

Min. Entry age 0 years 0 year

Max. Entry Age 65 years. 69 year for term 3 year

65 year for term 5 year

Minimum Policy Term

5 years 6 year for PPT 3 year

10 year for PPT 5 year

Maximum Policy Term

20 years 30 years

Partial withdrawal

Allowed after 3 years

Allowed after 3 years

On death Higher of Sum Assured or the Policyholder’s

Fund Value

Sum Assured or fund value

whichever is higher

Allocation Charge:

Profit plus

Under single premium mode it is only from 4.5 to5 %.

For PPT of 3 to 4 year in the first year it is between 9 to 10.5 % and 2.5% in the subsequent years.

For PPT of 5 year it is quite high. It charges between 22.5 to 24 % in the first and 4% in the subsequent years.

The allocation charge depends on amount invested, higher for less investment amount.

Premier Life Gold (ICICI)

For 3 years PPT it charges 12 % in the first year and 4% in the subsequent years

For 5 years PPT it charges 12% in first year,4% in 2nd and 3rd year and 2% for remaining years.

Mortality charges:

Profit plus

For 25 year healthy male it comes to 1.42 Rs. Per 1000 S.A

Which comes to Rs. 142 per 1 Lac?

Premier Life Gold (ICICI)

Here they charge separately for male and female

For 20 years male it is Rs. 1.33 per 1000 Rs. S.A

For 20 years female it is Rs. 1.26 per 1000 Rs. S.A

Fund management charge

Both charges same fund management charges

It is in the range of 0.75 % to 1.50 % Per annum and calculated on daily basis.

Policy administration charge:

LIC charge Rs. 60 per month in the first year and Rs. 20 for the subsequent years.

ICICI charge Rs 60 per month.

Switching charges:

Both charges in the same way,

4 switches are free. Rs.100 for additional

Switches.

COMPRASION OF ICICI PRU’S FOREVER LIFE,LIC’S JEEVAN SURAKSHA AND HDFC’S STAINDARD LIFE.

Particulars ICICI Pru Life LIC HDFC Standard Life

Type Forever Life Jeevan Suraksha-1

Personal Pension Plan

Sum Assured/Notional Cash Value

Min. Rs. 50,000 Rs 50000 Rs.25,000

Max. No Limit No Limit No Limit

Riders

Accident & Disability

Benefit, Critical

Illness Benefit, Major

Surgical Assistance,

Level Term Cover

Term Assurance

Option only No Rider available

Maturity Option to take 25%

of corpus in

lumpsum & balance

75% as an annuity/

Annuity on full

Option to take 25%

of corpus in

lumpsum & balance

75% as an

annuity/Annuity on

Option to take 25%

of corpus in

lumpsum & balance

75% as an annuity.

Annuity on full

corpus. full corpus.

corpus/Annuity on

full corpus.

Death (During

deferment)

Regular Income

stream to spouse if

the spouse is not

alive a lumpsum

amount is paid to the

Nominees./Spouse

has option to take

100% of Sum

assured+bonuses+

+guaranteed

additions (if death

after 7 years of the

policy)

All premiums

(excluding term

assurance premium

and extra premium if

any) paid up to the

date of death

accumulated at the

rate of 5% p.a.

compounded or at

such rate decided by

the LIC from time to

time will be paid to

the nominee

All Premiums paid

up to the date of

death accumulated

at the rate of 8% p.a.

compounded will be

paid to the nominee

or (Notional Cash

Option+Bonus +

terminal bonus),

whichever is lower

Death (After

deferment)

Spouse/beneficiaries

benefits Depends

upon Annuity option

chosen

Spouse/beneficiaries

benefits Depends

upon Annuity option

chosen

Spouse/beneficiaries

benefits Depends

upon Annuity option

chosen

Surrender guaranteed

surrender value is

payable after 3

years premiums are

paid

guaranteed

surrender value is

payable after 2

years premiums are

paid

guaranteed

surrender value is

payable after 3 years

premiums are paid.

Open Market

Option Available Not Available Available

Life Cover Available Not Available Not Available Postponement of

vesting age Available Not Available Not Available

Spouse Pension

after policy

holder

100 % 50 % 50 %

FINDINGSFINDINGS

FINDINGS

• People are not aware about the pension plan so insurance agent should

make aware about the pension plan and its benefits.

• Pension plan are so minimum in numbers so people not find pension

plan according to their earning and requirements.

• Pension is provided only to government employees and big company

employees so pension plan in insurance company has bright future.

RECOMMENDATIONSRECOMMENDATIONS

RECOMMENDATION

• We need to make people aware about the pension plan in rural and

semi urban area about the pension plan and its benefits.

• Insurance agent and advisors need to give only those plan which are

fulfilling the requirement and needs in a best way.

• Both LIC and ICICI PRUDENTIAL should make some pension plan

for those who are nit economically sound, so they can also secure

their future.

• Insurance company should have some more plan in Pension category

as they have in other category like Health and General insurance.

• Pension plan should be more convenient; with the pension plan health

plan should be provided because in the old age expenses on health

related is increased.

CONCLUSIONCONCLUSION

BIBLOGRAPHYBIBLOGRAPHY

BIBLIOGRAPHY

Websites:-

ICICI Prulife.com

ICICI prudential life insurance

wikipedia.com.

India housing.com.

LIC india.com

Book Referred

Research Methodology - C.R. Kothari