COMPARATIVE STUDY OF THE PRODUCTS OF HDFC STANDARD LIFE

INSURANCE COMPANY AND METLIFE INDIA INSURANCE COMPANY

PREFACE

The contours of insurance business have been changing across the globe and

the ripple effects of the same can be observed in the domestic markets as well.

An evolving insurance sector is of vital importance for economic growth. While

encouraging savings habit it also provides a safety net to both enterprises and

individuals. The insurance industry also provides crucial financial intermediation

services, transferring funds from the insured to capital investment, which is

critical for continued economic expansion and growth, simultaneously generating

long-term funds for infrastructure development. In fact investments in

infrastructure are ideal for asset-liability matching for life insurance companies

given their long term liability profile. Development of the insurance sector is

necessary to support the structural changes in the economy. Social security and

pension reforms too benefit from a mature insurance industry. The insurance

sector in India, which was opened-up for private participation in the year 1999

has completed seven years in a liberalized environment. Since opening up of the

insurance sector in 1999, 24 private companies have been granted licenses by

31st March, 2007 to conduct business in life and general insurance. Of the 24, 15

were in the life insurance and nine (including a standalone health insurance

company) in general insurance. During the last seven years capital amounting to

Rs.9625.28 crore was brought in by the private players, of which the contribution

of the foreign partners has been Rs.2174.28 crore. During this period the

average annual growth of first year premium in the life segment worked out to

47.06 per cent and in the non-life segment it was 16.87 per cent. The industry

services the largest number of life insurance policies in the world. Yet Indian

insurance industry has scope to further expansion with a large untapped

potential.

The Authority and the industry have been playing an active role in increasing

consumer awareness. Insurance companies in general and private insurance

companies in particular, are reaching out to untapped semi-urban and rural areas

ii

through advertisement campaigns and by offering products suitable to meet the

specific needs of the people in these segments. The insurers are increasingly

introducing innovative products to meet the specific needs of the prospective

policyholders. products, imaginative marketing, and aggressive distribution

enabled fledgling private insurance companies to sign up Indian customers’

faster belying expectations at the time of opening up of the sector. At the time of

opening up of the sector, life insurance was viewed as a tax saving device. Of

late policyholders’ perspective is slowly changing towards taking insurance cover

irrespective of tax incentives. The insurable populace is looking for products

which suit their specific requirements. As of now a variety of choices are

available in the market meeting the requirements of different cross-sections of

the society and across age groups.With the registration of Bharti Axa Life

Insurance Co. Ltd., the number of companies operating in the life insurance

industry has increased to sixteen. The new entrant commenced underwriting life

premium in August, 2006. By end March 2007, there were sixteen life and

sixteen non-life insurance companies (including the national re-insurer). Apollo

DKV, another standalone health insurance company and Future Generali

Insurance Co. Ltd. and Future Generali Indian Life insurance Co. Ltd. were

granted Certificate of Registration in 2007-08 and are in the process of

commencing operations.

iii

ACKNOWLEDGEMENT

I would like to take an opportunity to thank all the people who helped me in

collecting necessary information and making of the report. I am grateful to all of

them for their time, energy and wisdom.

Getting a project ready requires the work and effort of many people. I would like

all those who have contributed in completing this project. First of all, I would like

to send my sincere thanks to MR. ______________ for his helpful hand in the

completion of my project.

iv

EXECUTIVE SUMMARY

India has made tremendous progress in the field of healthcare over the last few

decades. Several nagging problems have been put to rest and we have

eradicated some of the killer epidemics (Smallpox, for example). Research in the

field of medicine has also been improving, to be in tandem with the

developments taking place elsewhere in the globe. Healthcare delivery to the

common man, however, has remained a highly debated issue; and there are

several millions of people who remain out of access to even the basic amenities

as regards personal care and hygiene. One of the reasons assigned for such an

unfortunate situation is the vast geographical spread of the population that

remains out of reach for regular medical facilities. For an economy that is

growing at a faster rate than most developed nations, there is an urgent need for

overcoming such irritants. Another oft-quoted reason for such a situation is the

poverty that is the bane of several of these masses. The total percentage of the

Indian population that is covered under the umbrella of any form of healthcare

protection is pathetically low. While the intention is not to parade insurance as a

panacea for all the ills of the society, by improving the numbers of health

insurance penetration among a larger section of people who can afford it; we will

be creating a platform for the state to concentrate on the less-privileged sections.

Unfortunately, health insurance as a viable alternative has not been able to make

giant strides of progress, altho ugh it has been growing, of late. A strong factor

for the poor performance of health insurance historically has been the moral

hazard associated with it. Because of the poor awareness levels about insurance

even among the educated elite, exclusive risk coverage schemes have not

gained popularity in the Indian domain. Having paid the premium for a certain

period, the policyholder imagines an inherent right in the enforcement of a claim.

In several instances, he is aided in the process by service providers reportedly;

and the entire episode results in a huge claims ratio for the insurers that puts

them on the back foot. There is need for all the stakeholders to make the insured

v

understand the basic elements of the insurance coverage. Some areas that

insurers on their part may work on are widening the coverage of the policies –

perhaps encouraging preventive care among the insured, for one. It is also

essential that all the stakeholders join shoulders to take the cause further and

ensure that health insurance in India reaches world-class standards.

The health care system in India is characterized by multiple systems of medicine,

mixed ownership patterns and different kinds of delivery structures. Public sector

ownership is divided between central and state governments, municipal and

Panchayat local governments. Public health facilities include teaching hospitals,

secondary level hospitals, first-level referral hospitals (CHCs or rural hospitals),

dispensaries; primary health centres (PHCs), sub-centres, and health posts. Also

included are public facilities for selected occupational groups like organized work

force (ESI), defence, government employees (CGHS), railways, post and

telegraph and mines among others. The private sector (for profit and not for

profit) is the dominant sector with 50 per cent of people seeking indoor care and

around 60 to 70 per cent of those seeking ambulatory care (or outpatient care)

from private health facilities. While India has made significant gains in terms of

health indicators - demographic, infrastructural and epidemiological (See Tables

1 and 2), it continues to grapple with newer challenges. Not only have

communicable diseases persisted over time but some of them like malaria have

also developed insecticide-resistant vectors while others like tuberculosis are

becoming increasingly drug resistant. HIV / AIDS has of late assumed extremely

virulent proportions. The 1990s have also seen an increase in mortality on

account of non-communicable diseases arising as a result of lifestyle changes.

The country is now in the midst of a dual disease burden of communicable and

noncommunicable diseases. This is coupled with spiralling health costs, high

financial burden on the poor and erosion in their incomes. Around 24% of all

people hospitalized in India in a single year fall below the poverty line due to

hospitalization (World Bank, 2007). An analysis of financing of hospitalization

shows that large proportion of people; especially those in the bottom fourincome

quintiles borrow money or sell assets to pay for hospitalization (World Bank,

vi

2007) This situation exists in a scenario where health care is financed through

general tax revenue, community financing, out of pocket payment and social and

private health insurance schemes. India spends about 4.9% of GDP on health

(WHR, 2007). The per capita total expenditure on health in India is US$ 23, of

which the per capita Government expenditure on health is US$ 4. Hence, it is

seen that the total health expenditure is around 5% of GDP, with breakdown of

public expenditure (0.9%); private expenditure (4.0%). The private expenditure

can be further classified as out-of-pocket (OOP) expenditure (3.6%) and

employees/community financing (0.4%). It is thus evident that public health

investment has been comparatively low. In fact as a percentage of GDP it has

declined from 1.3% in 1990 to 0.9% as at present. Furthermore, the central

budgetary allocation for health (as a percentage of the total Central budget) has

been stagnant at 1.3% while in the states it has declined from 7.0% to 5.5%.

Liberalisation of the insurance sector as well as the increasing demand for health

insurance covers, especially from the middle class, have given a fillip to the

growth of health insurance in the country and today the sector is emerging as

fastest growing segment in the non-life insurance industry. In 2007-08, health

insurance premium stood at more than Rs.3200 crore registering an increase of

35 per cent. Over the last five years the premium has nearly doubled. Despite

vii

this, health insurance penetration in India continues to be low. There are several

other challenges in the health sector—from the perspective of policyholder,

insurers and the Authority.

With a view to promoting health insurance in the country and looking for possible

solutions to bring in as many people as possible into the insurance net, the IRDA

has, over the last few years, gave special thrust to addressing various issues

concerning health insurance. These initiatives not only develop health insurance

in the country but also address the concerns of the policyholders of health

insurance. The grievance redressal system set up by the Authority enables a

detailed analysis of policyholder grievances and health insurance stands out as a

major area of concern from the customer viewpoint. It was in this backdrop that

the IRDA set up The National Health Insurance Working Group towards the end

of 2008. This provided a platform for stakeholders of the health insurance

industry to work together to suggest solutions to various relevant issues. Some of

the Working Group’s recommendations were implemented and some are under

examination.

viii

SCOPE OF THE STUDY

HDFC and MetLife is likely to register unprecedented growth of 200% and attain

a size of Rs. 2000 billion by 2009-10, in which a private sector insurance

business will achieve a growth rate of 140% as a result of aggressive marketing

technique being adopted by them against 35-40% growth rate of state owned

insurance companies.

On account of intense marketing and sales strategies adopted by private

insurance players, the market share of state owned insurance companies HDFC

standard life and others have come down to 70% in last 4-5 years from over

97%. The private insurance players despite the sector is still regulated has been

offering rate of return (RoR) to its policy holders which is estimated at about 35%

as against 20% of domestic insurance companies. Secondly, the state owned

insurance companies such as LIC and GIC have limited number of policies to

offer to their subscribers while in case of private insurance companies, their

policy numbers are many more and the premium amount as well as the maturity

period is much competitive as against those of government insurance

companies. Interestingly private sector insurance players have started exploring

the rural markets in which until recently, the state owned companies had the

monopoly. The Chamber has projected that in rural markets, the share of private

insurance players would increase substantially as these have been able to

generate a faith among their rural consumers

ix

TABLE OF CONTENTS

Page No.

Certificate Issued by the Company

Certificate Issued by the Institute

Preface ii

Acknowledgement iv

Executive Summary v

Scope of the Study ix

1. Introduction 1

2. Profile and Organisation Structure of the Company 28

3. Objective of the Study 40

4. Research Methodology 41

5. Analysis of the Problem under Study 42

6. Interpretation of Result 43

7. Suggestions/Recommendations 50

8. References 52

9. Annexure – Questionnaire 53

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INTRODUCTION

Insurance began as a way of reducing the risk of traders, as early as 5000 BC in

China and 4500 BC in Babylon. Life insurance dates only to ancient Rome;

"burial clubs" covered the cost of members' funeral expenses and helped

survivors monetarily. Modern life insurance started in late 17th century England,

originally as insurance for traders: merchants, ship owners and underwriters met

to discuss deals at Lloyd's Coffee House, predecessor to the famous Lloyd's of

London.

The first insurance company in the United States was formed in Charleston,

South Carolina in 1732, but it provided only fire insurance. The sale of life

insurance in the U.S. began in the late 1760s. The Presbyterian Synods in

Philadelphia and New York created the Corporation for Relief of Poor and

Distressed Widows and Children of Presbyterian Ministers in 1759; Episcopalian

priests organized a similar fund in 1769. Between 1787 and 1837 more than two

dozen life insurance companies were started, but fewer than half a dozen

survived.

Prior to the American Civil War, many insurance companies in the United States

insured the lives of slaves for their owners. In response to bills passed in

California in 2001 and in Illinois in 2003, the companies have been required to

search their records for such policies. New York Life for example reported that

Nautilus sold 485 slaveholder life insurance policies during a two-year period in

the 1840s; they added that their trustees voted to end the sale of such policies 15

years before the Emancipation Proclamation.

Life insurance or life assurance is a contract between the policy owner and the

insurer, where the insurer agrees to pay a sum of money upon the occurrence of

the insured individual's or individuals' death or other event, such as terminal

illness or critical illness. In return, the policy owner agrees to pay a stipulated

amount called a premium at regular intervals or in lump sums. There may be

1

designs in some countries where bills and death expenses plus catering for after

funeral expenses should be included in Policy Premium. In the United States, the

predominant form simply specifies a lump sum to be paid on the insured's

demise.

As with most insurance policies, life insurance is a contract between the insurer

and the policy owner whereby a benefit is paid to the designated beneficiaries if

an insured event occurs which is covered by the policy. To be a life policy the

insured event must be based upon the lives of the people named in the policy.

Insured events that may be covered include:

Serious illness

Life policies are legal contracts and the terms of the contract describe the

limitations of the insured events. Specific exclusions are often written into the

contract to limit the liability of the insurer; for example claims relating to suicide,

fraud, war, riot and civil commotion.

Life-based contracts tend to fall into two major categories:

Protection policies - designed to provide a benefit in the event of specified

event, typically a lump sum payment. A common form of this design is term

insurance.

Investment policies - where the main objective is to facilitate the growth of

capital by regular or single premiums. Common forms (in the US anyway) are

whole life, universal life and variable life policies.

Costs, insurability, and underwriting

The insurer (the life insurance company) calculates the policy prices with intent to

fund claims to be paid and administrative costs, and to make a profit. The cost of

insurance is determined using mortality tables calculated by actuaries. Actuaries

are professionals who employ actuarial science, which is based in mathematics

(primarily probability and statistics). Mortality tables are statistically-based tables

showing expected annual mortality rates. It is possible to derive life expectancy

2

estimates from these mortality assumptions. Such estimates can be important in

taxation regulation.

The three main variables in a mortality table have been age, gender, and use of

tobacco. More recently in the US, preferred class specific tables were introduced.

The mortality tables provide a baseline for the cost of insurance. In practice,

these mortality tables are used in conjunction with the health and family history of

the individual applying for a policy in order to determine premiums and

insurability. Mortality tables currently in use by life insurance companies in the

United States are individually modified by each company using pooled industry

experience studies as a starting point. In the 1980s and 90's the SOA 1975-80

Basic Select & Ultimate tables were the typical reference points, while the 2001

VBT and 2001 CSO tables were published more recently. The newer tables

include separate mortality tables for smokers and non-smokers and the CSO

tables include separate tables for preferred classes.

Recent US select mortality tables predict that roughly 0.35 in 1,000 non-smoking

males aged 25 will die during the first year of coverage after underwriting.

Mortality approximately doubles for every extra ten years of age so that the

mortality rate in the first year for underwritten non-smoking men is about 2.5 in

1,000 people at age 65. Compare this with the US population male mortality

rates of 1.3 per 1,000 at age 25 and 19.3 at age 65 (without regard to health or

smoking status).

The mortality of underwritten persons rises much more quickly than the general

population. At the end of 10 years the mortality of that 25 year-old, non-smoking

male is 0.66/1000/year. Consequently, in a group of one thousand 25 year old

males with a $100,000 policy, all of average health, a life insurance company

would have to collect approximately $50 a year from each of a large group to

cover the relatively few expected claims. (0.35 to 0.66 expected deaths in each

year x $100,000 payout per death = $35 per policy). Administrative and sales

commissions need to be accounted for in order for this to make business sense.

3

A 10 year policy for a 25 year old non-smoking male person with preferred

medical history may get offers as low as $90 per year for a $100,000 policy in the

competitive US life insurance market.

The insurance company receives the premiums from the policy owner and

invests them to create a pool of money from which it can pay claims and finance

the insurance company's operations. Contrary to popular belief, the majority of

the money that insurance companies make comes directly from premiums paid,

as money gained through investment of premiums can never, in even the most

ideal market conditions, vest enough money per year to pay out claims.[citation

needed] Rates charged for life insurance increase with the insurer's age

because, statistically, people are more likely to die as they get older.

Given that adverse selection can have a negative impact on the insurer's

financial situation, the insurer investigates each proposed insured individual

unless the policy is below a company-established minimum amount, beginning

with the application process. Group Insurance policies are an exception.

Insurance vs. assurance

Outside the United States, the specific uses of the terms "insurance" and

"assurance" are sometimes confused. In general, in these jurisdictions

"insurance" refers to providing cover for an event that might happen (fire, theft,

flood, etc.), while "assurance" is the provision of cover for an event that is certain

to happen. However, in the United States both forms of coverage are called

"insurance", principally due to many companies offering both types of policy, and

rather than refer to themselves using both insurance and assurance titles, they

instead use just one

Types of life insurance

Life insurance may be divided into two basic classes – temporary and permanent

or following subclasses - term, universal, whole life, variable, variable universal

and endowment life insurance.

Temporary (Term)

4

Term life insurance or 'term assurance' provides for life insurance coverage for a

specified term of years for a specified premium. The policy does not accumulate

cash value. Term is generally considered "pure" insurance, where the premium

buys protection in the event of death and nothing else.

The three key factors to be considered in term insurance are: face amount

(protection or death benefit), premium to be paid (cost to the insured), and length

of coverage (term).

Various (U.S.) insurance companies sell term insurance with many different

combinations of these three parameters. The face amount can remain constant

or decline. The term can be for one or more years. The premium can remain

level or increase. A common type of term is called annual renewable term. It is a

one year policy but the insurance company guarantees it will issue a policy of

equal or lesser amount without regard to the insurability of the insured and with a

premium set for the insured's age at that time. Another common type of term

insurance is mortgage insurance, which is usually a level premium, declining face

value policy. The face amount is intended to equal the amount of the mortgage

on the policy owner’s residence so the mortgage will be paid if the insured dies.

A policy holder insures his life for a specified term. If he dies before that specified

term is up, his estate or named beneficiary(ies) receive(s) a payout. If he does

not die before the term is up, he receives nothing. In the past these policies

would almost always exclude suicide. However, after a number of court

judgments against the industry, payouts do occur on death by suicide

(presumably except for in the unlikely case that it can be shown that the suicide

was just to benefit from the policy). Generally, if an insured person commits

suicide within the first two policy years, the insurer will return the premiums paid.

However, a death benefit will usually be paid if the suicide occurs after the two

year period.

Permanent

Permanent life insurance is life insurance that remains in force (in-line) until the

policy matures (pays out), unless the owner fails to pay the premium when due

5

(the policy expires OR policies lapse). The policy cannot be canceled by the

insurer for any reason except fraud in the application, and that cancellation must

occur within a period of time defined by law (usually two years). Permanent

insurance builds a cash value that reduces the amount at risk to the insurance

company and thus the insurance expense over time. This means that a policy

with a million dollars face value can be relatively expensive to a 70 year old. The

owner can access the money in the cash value by withdrawing money, borrowing

the cash value, or surrendering the policy and receiving the surrender value.

The three basic types of permanent insurance are whole life, universal life,

and endowment.

Whole life coverage

Whole life insurance provides for a level premium, and a cash value table

included in the policy guaranteed by the company. The primary advantages of

whole life are guaranteed death benefits, guaranteed cash values, fixed and

known annual premiums, and mortality and expense charges will not reduce the

cash value shown in the policy. The primary disadvantages of whole life are

premium inflexibility, and the internal rate of return in the policy may not be

competitive with other savings alternatives. Riders are available that can allow

one to increase the death benefit by paying additional premium. The death

benefit can also be increased through the use of policy dividends. Dividends

cannot be guaranteed and may be higher or lower than historical rates over time.

Premiums are much higher than term insurance in the short-term, but cumulative

premiums are roughly equal if policies are kept in force until average life

expectancy.

Cash value can be accessed at any time through policy "loans". Since these

loans decrease the death benefit if not paid back, payback is optional. Cash

values are not paid to the beneficiary upon the death of the insured; the

beneficiary receives the death benefit only. If the dividend option: Paid up

additions is elected, dividend cash values will purchase additional death benefit

which will increase the death benefit of the policy to the named beneficiary.

6

Universal life coverage

Universal life insurance (UL) is a relatively new insurance product intended to

provide permanent insurance coverage with greater flexibility in premium

payment and the potential for a higher internal rate of return. There are several

types of universal life insurance policies which include "interest sensitive" (also

known as "traditional fixed universal life insurance"), variable universal life

insurance, and equity indexed universal life insurance.

A universal life insurance policy includes a cash account. Premiums increase the

cash account. Interest is paid within the policy (credited) on the account at a rate

specified by the company. This rate may have a guaranteed minimum (for fixed

ULs) or no minimum (for variable ULs). Mortality charges and administrative

costs are then charged against (reduce) the cash account. The surrender value

of the policy is the amount remaining in the cash account less applicable

surrender charges, if any.

Equity-Indexed Universal Life Insurance

Equity-Indexed Universal Life Insurance or "EIUL" for short, is a fixed universal

life insurance policy that was created in the mid 1990s to address concerns

about market volatility and provide an alternative to the low interest rates being

offered by interest-sensitive UL policies.

EIULs differ from interest-sensitive UL policies in that they credit interest to the

policy's cash values based on the upward movement of a particular stock market

index - usually the S&P500. The insurance company can then credit the gains in

the stock market according to one of several different crediting methods. The

most popular is the "point-to-point" method. When the policy is issued, the

insurance company "pegs" the stock market's value. At the anniversary of the

policy, the insurance company checks the value of the underlying stock index

and credits the cash value with the difference up to a cap (specified by the

company). For example, if a policy owner purchased an EIUL on January, and

the insurance company used the S&P500 as the underlying index when crediting

7

interest to policy cash values, and the company set a 12 % cap, the process

would work like this:

If the S&P500 was 1,100 in January, the insurance company would record the

value of the index. On the anniversary of the policy (the next January), the

insurance company would record the new value of the S&P500. If the new value

of the index was 1,188, that would represent a gain of 8%. The insurance

company would credit the policy cash values with 8% for that year. If the S&P500

lost value (i.e. the value went from 1,100 to 980), the insurance company would

simply record a "0", and the policy would show a year of no growth. The policy

owner would not; however, lose any money (principal or interest from a previous

year) as a result of a negative return on the S&P500.

Limited-pay

Another type of permanent insurance is Limited-pay life insurance, in which all

the premiums are paid over a specified period after which no additional

premiums are due to keep the policy in force. Common limited pay periods

include 10-year, 20-year, and paid-up at age 65.

Endowments

Endowments are policies in which the cash value built up inside the policy,

equals the death benefit (face amount) at a certain age. The age this

commences is known as the endowment age. Endowments are considerably

more expensive (in terms of annual premiums) than either whole life or universal

life because the premium paying period is shortened and the endowment date is

earlier.

In the United States, the Technical Corrections Act of 1988 tightened the rules on

tax shelters (creating modified endowments). These follow tax rules as annuities

and IRAs do. Endowment Insurance is paid out whether the insured lives or dies,

after a specific period (e.g. 15 years) or a specific age (e.g. 65).

Accidental death

8

Accidental death is a limited life insurance that is designed to cover the insured

when they pass away due to an accident. Accidents include anything from an

injury, but do not typically cover any deaths resulting from health problems or

suicide. Because they only cover accidents, these policies are much less

expensive than other life insurances.

It is also very commonly offered as "accidental death and dismemberment

insurance", also known as an AD&D policy. In an AD&D policy, benefits are

available not only for accidental death, but also for loss of limbs or bodily

functions such as sight and hearing, etc.

Accidental death and AD&D policies very rarely pay a benefit; either the cause of

death is not covered, or the coverage is not maintained after the accident until

death occurs. To be aware of what coverage they have, an insured should

always review their policy for what it covers and what it excludes. Often, it does

not cover an insured who puts themselves at risk in activities such as:

parachuting, flying an airplane, professional sports, or involvement in a war

(military or not). Also, some insurers will exclude death and injury caused by

proximate causes due to (but not limited to) racing on wheels and

mountaineering. Accidental death benefits can also be added to a standard life

insurance policy as a rider. If this rider is purchased, the policy will generally pay

double the face amount if the insured dies due to an accident. This used to be

commonly referred to as a double indemnity coverage. In some cases, some

companies may even offer a triple indemnity cover.

Related life insurance products

Riders are modifications to the insurance policy added at the same time the

policy is issued. These riders change the basic policy to provide some feature

desired by the policy owner. A common rider is accidental death, which used to

be commonly referred to as "double indemnity", which pays twice the amount of

the policy face value if death results from accidental causes, as if both a full

coverage policy and an accidental death policy were in effect on the insured.

9

Another common rider is premium waiver, which waives future premiums if the

insured becomes disabled.

Joint life insurance is either a term or permanent policy insuring two or more

lives with the proceeds payable on the first death.

Survivorship life or second-to-die life is a whole life policy insuring two lives with

the proceeds payable on the second (later) death.

Single premium whole life is a policy with only one premium which is payable at

the time the policy is issued.

Modified whole life is a whole life policy that charges smaller premiums for a

specified period of time after which the premiums increase for the remainder of

the policy.

Group life insurance is term insurance covering a group of people, usually

employees of a company or members of a union or association. Individual proof

of insurability is not normally a consideration in the underwriting. Rather, the

underwriter considers the size and turnover of the group, and the financial

strength of the group. Contract provisions will attempt to exclude the possibility of

adverse selection. Group life insurance often has a provision that a member

exiting the group has the right to buy individual insurance coverage.

Senior and preneed products

Insurance companies have in recent years developed products to offer to niche

markets, most notably targeting the senior market to address needs of an aging

population. Many companies offer policies tailored to the needs of senior

applicants. These are often low to moderate face value whole life insurance

policies, to allow a senior citizen purchasing insurance at an older issue age an

opportunity to buy affordable insurance. This may also be marketed as final

expense insurance, and an agent or company may suggest (but not require) that

the policy proceeds could be used for end-of-life expenses.

Preneed (or prepaid) insurance policies are whole life policies that, although

available at any age, are usually offered to older applicants as well. This type of

10

insurance is designed specifically to cover funeral expenses when the insured

person dies. In many cases, the applicant signs a prefunded funeral arrangement

with a funeral home at the time the policy is applied for. The death proceeds are

then guaranteed to be directed first to the funeral services provider for payment

of services rendered. Most contracts dictate that any excess proceeds will go

either to the insured's estate or a designated beneficiary.

These products are sometimes assigned into a trust at the time of issue, or

shortly after issue. The policies are irrevocably assigned to the trust, and the trust

becomes the owner. Since a whole life policy has a cash value component, and a

loan provision, it may be considered an asset; assigning the policy to a trust

means that it can no longer be considered an asset for that individual. This can

impact an individual's ability to qualify for Medicare or Medicaid.

Investment policies

With-profits policies

Some policies allow the policyholder to participate in the profits of the insurance

company these are with-profits policies. Other policies have no rights to

participate in the profits of the company, these are non-profit policies.

With-profits policies are used as a form of collective investment to achieve capital

growth. Other policies offer a guaranteed return not dependent on the company's

underlying investment performance; these are often referred to as without-profit

policies which may be construed as a misnomer.

Pensions

Pensions are a form of life assurance. However, whilst basic life assurance,

permanent health insurance and non-pensions annuity business includes an

amount of mortality or morbidity risk for the insurer, for pensions there is a

longevity risk.

A pension fund will be built up throughout a person's working life. When the

person retires, the pension will become in payment, and at some stage the

11

pensioner will buy an annuity contract, which will guarantee a certain pay-out

each month until death.

Annuities

An annuity is a contract with an insurance company whereby the purchaser pays

an initial premium or premiums into a tax-deferred account, which pays out a

sum at pre-determined intervals. There are two periods: the accumulation (when

payments are paid into the account) and the annuitization (when the insurance

company pays out). For example, a policy holder may pay £10,000, and in return

receive £150 each month until he dies; or £1,000 for each of 14 years or death

benefits if he dies before the full term of the annuity has elapsed. Tax penalties

and insurance company surrender charges may apply to premature withdrawals

(if indeed these are allowed; in most markets outside the U.S. the policy owner

has no right to end the contract prematurely).

Tax and life insurance

Taxation of life insurance in the India

Premiums paid by the policy owner are normally not deductible for federal and

state income tax purposes.

Proceeds paid by the insurer upon death of the insured are not included in gross

income for federal and state income tax purposes; however, if the proceeds are

included in the "estate" of the deceased, it is likely they will be subject to federal

and state estate and inheritance tax.

Cash value increases within the policy are not subject to income taxes unless

certain events occur. For this reason, insurance policies can be a legal and

legitimate tax shelter wherein savings can increase without taxation until the

owner withdraws the money from the policy. On flexible-premium policies, large

deposits of premium could cause the contract to be considered a "Modified

Endowment Contract" by the Internal Revenue Service (IRS), which negates

many of the tax advantages associated with life insurance. The insurance

12

company, in most cases, will inform the policy owner of this danger before

applying their premium.

Tax deferred benefit from a life insurance policy may be offset by its low return or

high cost in some cases. This depends upon the insuring company, type of policy

and other variables (mortality, market return, etc.). Also, other income tax saving

vehicles (i.e. Individual Retirement Account (IRA), 401K or Roth IRA) appear to

be better alternatives for value accumulation, at least for more sophisticated

investors who can keep track of multiple financial vehicles. The combination of

low-cost term life insurance and higher return tax-efficient retirement accounts

can achieve better performance, assuming that the insurance itself is only

needed for a limited amount of time.

The tax ramifications of life insurance are complex. The policy owner would be

well advised to carefully consider them. As always, the United States Congress

or the state legislatures can change the tax laws at any time.

Market trends

Life insurance premiums written in 2005According to a study by Swiss Re, the

EU was the largest market for life insurance premiums written in 2005 followed

by the USA and Japan.

Although some aspects of the application process (such as underwriting and

insurable interest provisions) make it difficult, life insurance policies have been

used in cases of exploitation and fraud. In the case of life insurance, there is a

motivation to purchase a life insurance policy, particularly if the face value is

substantial, and then kill the insured.

The television series Forensic Files has included episodes that feature this

scenario. There was also a documented case in 2006, where two elderly women

are accused of taking in homeless men and assisting them. As part of their

assistance, they took out life insurance on the men. After the contestability period

ended on the policies (most life contracts have a standard contestability period of

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two years), the women are alleged to have had the men killed via hit-and-run car

crashes.

Recently, viatical settlements have thrown the life insurance industry into turmoil.

A viatical settlement involves the purchase of a life insurance policy from an

elderly or terminally ill policy holder. The policy holder sells the policy (including

the right to name the beneficiary) to a purchaser for a price discounted from the

policy value. The seller has cash in hand, and the purchaser will realize a profit

when the seller dies and the proceeds are delivered to the purchaser. In the

meantime, the purchaser continues to pay the premiums. Although both parties

have reached an agreeable settlement, insurers are troubled by this trend.

Insurers calculate their rates with the assumption that a certain portion of policy

holders will seek to redeem the cash value of their insurance policies before

death. They also expect that a certain portion will stop paying premiums and

forfeit their policies. However, viatical settlements ensure that such policies will

with absolute certainty be paid out. Some purchasers, in order to take advantage

of the potentially large profits, have even actively sought to collude with

uninsured elderly and terminally ill patients, and created policies that would have

not otherwise been purchased. Likewise, these policies are guaranteed losses

from the insurers' perspective.

Life Insurance Corporation of India

Life Insurance Corporation (LIC) came into existence on 1st September 1956

through the amalgamation of 154 Indian insurance companies, 16 non-Indian

companies and 75 provident. The amalgamation was achieved with the help of

Life Insurance Act passed by the Parliament in the same year. The LIC was

created with the goal of reaching all the insurable people in the country and

providing them financial coverage at a reasonable price. In the year 1956, LIC

had 5 zonal offices, 33 divisional offices and 212 branch offices. With time there

was a need for a branch office at every district headquarter and many branches

were opened, which raised the pace of the organization.

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LIC now has 2048 fully computerized branch offices, 100 divisional offices, 7

zonal offices and the corporate office. At present, online premium collection

facility is being offered in selected cities as LIC has tied up with some banks and

service providers. For providing customer satisfaction the organization has

introduced various schemes such as ECS, ATM premium payment facility, IVRS,

Info centers which are set up in various cities including Mumbai, Bangalore,

Chennai, Kolkata, New Delhi, Pune and many more. It has also come up with

SATELLITE SAMPARK offices providing easy access to policyholders. LIC has

crossed many milestones and set standards for itself fostering unmatched

performance.

Initiative

Holding the money with obligation and using it in the best possible manner

in the interests of the policyholder and the community.

Bringing attractive savings plans and making them easily accessible to the

policyholders.

Giving attractive returns to the people and keeping in mind national

priorities.

Being trustworthy to the customers and develop the spirit of corporate

social responsibility.

Spreading insurance in both rural and urban areas and covering all the

insurable persons at a reasonable cost.

Bringing in plans and policies favorable to the changing environment.

Providing efficient service and involving people in the organization for their

satisfaction.

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Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between

Bajaj Auto Limited and Allianz AG of Germany.

Bajaj Allianz General Insurance came into existence on 2nd May 2001, when it

got certification of Registration from the Insurance and Regulatory Development

Authority. Bajaj Auto has a share of 74%, whereas Allianz has the remaining

26%. In the very first year, the company made a strong position for itself in the

industry and was reckoned amongst the top private insurers. The premium

income of the company as on 31st March 2006 was Rs. 1285 crores, whereas

the profit after tax made was Rs. 52 crores. Bajaj Allianz has a Pan India network

covering over 100 towns from Jammu to Thiruvananthapuram and aims to

spread its operations in many other cities.

The vision of the organization is to be the first choice for customers, and provide

job satisfaction to the employees and create shareholder value. The organization

strives to excel in its products and services, providing total customer satisfaction.

Bajaj Allianz serves customers in all areas of General and Health Insurance as

well as Risk Management. It has in-depth knowledge of the local market and

extensive distribution network with expertise, stability and experience. It has a

capital base of Rs. 147 crores, and is allowed to serve both the General and

Health insurance.

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It has achieved iAAA rating, by ICRA Limited and has the highest claims- paying

ability and a stable position in the market. In a 2006 survey, Business World has

rated it among the Most Respected Companies, putting it at No.2 position in

Insurance sector.

The Company provides the following products under general insurance:

Travel Insurance

Asset Insurance

Health Insurance

Corporate Insurance

ICICI Prudential Life Insurance Company

ICICI Prudential is a joint venture between ICICI bank and Prudential plc, both

having strong operations in their respective countries. ICICI bank is one of the

leading banks in India providing quality financial services and Prudential is an

international financial service provider headquartered at United Kingdom. ICICI

and Prudential have respective shares of 74% and 26%. The Company started

operating in December 2000. Currently, total capital with the company is Rs.

18.15 billion.

ICICI Prudential was the first insurance company in India to receive a National

Insurer Financial Strength rating of AAA (Ind.) from Fitch ratings. It has been

given the honour of being among the Most Trusted Brands in the industry by

Economic Times for 3 consecutive years. It has a network of 450 branches, over

1,50,000 insurance advisors and 18 bancassurance partners.

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As the organization grows and develops, it keeps introducing new range of

products and services and enhancing the quality of plans and solutions given to

the customers. The distribution network is one of the best, and is spreading

across the length and breadth of the country. As on December 31, 2006, it had

made imprints in over 360 cities and towns in India. It has over 1,75,000 advisors

across the country, serving clients with full commitment. It has tied up with ICICI

Bank, Bank of India, Federal Bank, Lord Krishna Bank, some co-operative banks,

NGOs, MFIs and corporates for making inroads into the rural areas.

Products

Insurance Solutions for Individuals: ICICI Prudential Life Insurance offers several

novel, customer-centric products for customers at every stage of life. The

products and services offered by the organization are in various fields, such as:

Savings & Wealth Creation Solutions

Premier Life Gold

LifeLink Super

Invest Shield Life New

Cash Plus

Cash Bak

Life Time Super & Life Time Plus

Save 'n' Protect.

Retirement Solutions

Life Link Super Pension

Forever Life

Immediate Annuity

Life Time Super

Child Plans

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Education insurance - Smart Kid

Protection Solutions

Life Guard

Home Assure

Group Insurance Solutions

ICICI Prudential also offers Group Insurance Solutions for companies

seeking to enhance benefits to their employees.

Group Immediate Annuities

Group Term Plan

Group Superannuation Plan

Group Gratuity Plan

ICICI Lombard General Insurance

ICICI Lombard General Insurance Company Limited is a joint venture between

ICICI Bank Limited and Fairfax Financial Holdings Limited. ICICI bank is India's

second largest bank; Fairfax is Canada-based, engaged in general insurance,

reinsurance, insurance claims management and investment management. ICICI

Lombard General Insurance Company commenced its operations in general

insurance business in August 2001.

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ICICI Lombard is India's number one private insurance company; it is also the

first general insurance company to be given certification of ISO 9001:2000. The

company provides simple and fast documentation, fast claims settlement, online

policy issuance, and comprehensive product line.

It has also been given iAAA rating by ICRA for having highest claims paying

ability. In the very first year of operations, it was able to reach financial

breakeven and achieve underwriting breakeven in the second year. Security is

provided through encryption and it is the first company to provide digitally signed

documents. It has been honored as the most Customer Responsive Company by

the Economic Times. Times of India has designated it as the Best Housing

Insurance in the Smart Living Awards by 360 degrees. It has also been awarded

Gold Shield for "Excellence in Financial Reporting". It is among the top three

companies to be awarded the "General Insurance Company of the Year" at the

10th Asia Insurance Industry Awards.

Products

Business Solutions

Industrial All Risk

Fire and Special Perils

Electronic Equipment Insurance

Fidelity Insurance

Consequential Loss (Fire) Insurance

Tea Corp Insurance

Burglary Insurance

Machinery

Personal Solutions

Group Personal Accidents

Health

Health Insurance

Project Solutions

Contractors' All Risk

Contractors' Plant & Machinery

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Erection All Risk

Performance Guarantee

Liability Solutions

Director's & Officers Liability

Product Liability

Workmen's Compensation

Event Insurance

Product Liability

Travel Insurance

Senior Citizen Overseas Travel

Individual Overseas Travel

Corporate Overseas Travel

Domestic Travel

Birla Sun Life Insurance Company Limited

Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between

Aditya Birla Group and Sun Life Financial Inc. BSLI started functioning in March

2001 after getting the certificate of registration from IRDA.

Birla Sun Life Insurance Company Limited introduced unit Linked Life Insurance

Solutions in India. Within a short span of time it was able to establish itself as a

leading player in the Private Life Insurance Industry. It has been innovative and

come up with customer-centric products to provide safety and services. The

company has web-enabled IT systems for better customer services and a strong

distribution channel which is easily approachable. The company shows corporate

governance and a high degree of transparency in all business practices. It has

professional knowledge and global expertise of Aditya Birla Group.

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Birla Sunlife Insurance has been providing first class financial solutions to its

customers and has been amongst the top three private sector life insurance

companies.

Its mission is to be amongst the top players in the eyes of customers and the first

choice of insurance and retirement solutions to individuals and groups. These

innovative solutions are linked with global and technical expertise and are

deployed by a multi channel distribution network and enhanced technology.

The company aims at keeping all people associated with it - customers, clients,

stakeholders and employees- happy and fully satisfied. It wants to provide value

added products and services to the customers, job satisfaction to employees and

highest returns to the shareholders.

Qualities like integrity, commitment, passion, and speed are the core values of

the company. The products offered by the company are:

Individual Life

Protection

Premium Back Term Plan

Birla Sun Life Term Plan

Saving

Simply Life

Flexi Save Plus

Supreme Life

Life Companion

Flexi Cash Flow

Prime Life

Flexi Save Plus

Children

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TATA AIG General Insurance

Tata AIG General Insurance Company Ltd. is a joint venture between Tata Sons

and American International Group, Inc. (AIG). The Tata Group is holding 74 per

cent stake and the rest 26 percent is held by AIG. The company has got the

expertise, knowledge and strength of both the organizations.

Tata AIG General Insurance Company was founded on January 22, 2001. It

offers general insurance in various categories, such as automobile, home,

personal accident, travel, energy, marine, property and casualty and specialized

financial solutions.

Jamsetji Tata founded Tata Group in 1860s. It has an estimated turnover of

around US $ 14.25 billion. It has spread its operations in various fields such as

steel, power, hotels, airlines, software services, communications, etc. Some of its

major projects have been Tata Tea, Tata Steel, Tata Chemicals, Titan, Tanishq,

Voltas, Westside and Tata Motors. Its imprints are made on the

telecommunication and technology sector. Regarding telecommunications, it is

the largest international long distance service provider. Approximately two- third

of the equity of Tata Sons is held by a host of national institutions in science and

technology, medical services and performing arts. By combining the ethical

values with business acumen and fulfilling its commitment to the nation, it has

become one of the largest groups in India.

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American International Group, Inc. (AIG) is the leading international player in

insurance and financial services. Its network spreads across 130 nations. AIG

member companies serve all types of customers, be it commercial or individual.

AIG is among the leading insurers and the largest underwriter of insurance.

Aircraft leasing, financial products and trading are some of the services offered

by AIG. AIG has a global expertise of fulfilling the customer-centric needs. It has

specialized investment management capabilities in equities, fixed income,

alternative investments and real estate. AIG's stock has been listed in the New

York Stock Exchange as well as stock exchanges in London, Paris, Switzerland

and Tokyo.

The organization caters to individuals, small businesses and corporates.

Individual plans include motor, home, accident & health and travel insurance,

whereas corporate plans include accident & health, travel, energy, property,

marine and liability plans.

New India Assurance Company

Sir Dorab Tata founded New India Assurance Company on 23rd July 1919. It has

1068 offices comprising of 26 regional offices, 393 divisional offices and 648

branches with more than 21,000 employees.It is one of the largest Non- Life

insurers in Afro- Asia and the first one to cross Rs. 5,000 crores of Gross

Premium. It has a global network expanding in countries like Japan, U.K., Middle

East, Fiji and Australia. Its international operations started in 1920 and have

spread across 24 countries having a network of 19 branches, 12 agencies, 2

associate companies and 2 subsidiary companies. The company contributes

80% of total overseas premium in India.The company has a highly qualified staff,

which excel in both expertise and knowledge and are trained to provide

satisfaction to the customers. It is the only company able to establish strong

relationships overseas and has a record of successful trading outside India. The

performance has been outstanding and the company has been able to maintain a

strong position in the market.

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It has been the pioneer in various fields such as:

Setting up an Aviation Insurance Department in 1946.

Handling the complete insurance requirements of the Indian Shipping

Fleet.

Introduced its own Training School.

Pioneering the concept of 'Model Office Training'.

Creating department in Engineering insurance.

Satellite insurance.

The company wants to develop itself as the best general insurance company in

the industry. It is concerned about the society and community, and provides

financial security at reasonable prices. The company gives utmost importance to

customer needs and there is transparency in its operations. Some of the policies

and schemes introduced by the company are:

Public Liability Policy

Jewellers Block Policy

Pravasi Bharatiya Bima Yojana Policy

Universal Health Insurance Scheme

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Fire Policy

IFFCO Tokio General Insurance

IFFCO Tokio General Insurance is a customer-centric company aiming to be

easily accessible and approachable to all sections of society. It offers products

and services that provide quality at reasonable cost. The organization has the

deep knowledge of IFFCO and thus developed a business plan that has both

stability and integrity.

It has set global standards for itself and is the only private general insurance

company in India to make 5 consecutive years of experience. ITGI has been one

of the few companies to show underwriting profits within four years of operations.

The company focuses on delivering creative solutions to its customers. IFFCO

Tokio General Insurance has 273 employees present in 68 cities, dedicated to

give full satisfaction to the customers. It is the first company to underwrite mega

policies for a fertilizer and automobile client.

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The Oriental Insurance Company Ltd.

The Oriental Insurance Company Ltd. (OICL) is one of the general insurance

companies under the support of the General Insurance Corporation (GIC) of

India. It came into existence in the year 1947 and is one of the oldest

organizations in India. It caters to all sections and sectors ranging from MNCs to

rural sector. The headquarters of the company are situated at Delhi and it has 21

Regional Offices, 311 Divisional Offices and 635 Branch offices.

It has a team of hard working employees, having the talent to take the company

to new heights. Also the company shows concern for both the employees and

customers. It provides special covers for large projects like power plants, steel

plants and chemical plants.

It believes in actively participating in economic growth by being a dynamic

organization catering to the society with full commitment and efficiency. The main

objectives of the company are to serve the insurance needs of the entire

community, provide services at reasonable cost, make optimum utilization of the

funds, maintaining global standards, minimization of losses and retention of

business.

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PROFILE AND ORGANIZATION STRUCTURE OF THE

COMPANY

HDFC STANDARD LIFE

Profiles

HDFC Standard Life Insurance Company Limited is one of the first companies to

be licensed by IRDA to operate in the Insurance sector. The company came into

existence on 14th August 2000. Both Crisil and ICRA have honored it with AAA

Ratings. Similarly Moody's and Standard and Poors have also honoured it AAA

ratings. HDFC holds 81.4% share in HDFC and the remaining 18.6% stake is

with Standard Life. It integrates the strong expertise and stability of Standard Life

and HDFC. It is one of the most trusted companies; it is easily accessible and

approachable, offering value services to its customers.

The company aims to provide:

Innovative products to cater to different needs of different customers

Customer service of the highest order

Use of technology to improve service standards

Value for money for customers

Increasing market share

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Professionalism in carrying out business

The values ingrained in the company are to provide financial security to

policyholders, maintain trust and keep innovating to establish it as a unique

player.

HDFC Standard Life Insurance, a joint venture between HDFC and Standard Life

Assurance Company, Europe’s largest mutual life company, has identified the

rural market as an important thrust area for its future growth.

The company, ranked number 4 among the private players in the insurance

sector thus far in terms of number of policies sold, presently has 100 rural

consultants already in four rural belts namely Amravati in Maharashtra,

Nelikuppam in Tamil Nadu, Panipat in Haryana and areas near Pune and

Nagpur.

Organisation Structure

HDFC is a professionally managed organisation with a board of directors

consisting of eminent persons who represent various fields including finance,

taxation, construction and urban policy & development. The board primarily

focuses on strategy formulation, policy and control, designed to deliver

increasing value to shareholders.

HDFC has a staff strength of 1029, which includes professionals from the fields

of finance, law, accountancy, engineering and marketing.

BOARD OF DIRECTORS

Mr. Jagdish Capoor Mr. Aditya Puri Mr. Keki M. Mistry Mr. Vineet Jain Mrs. Renu

Karnad Mr. Arvind Pande Mr. Ashim Samanta Mr. C M Vasudev Mr. Gautam

Divan Dr. Pandit Palande Mr. Paresh Sukthankar

Reaching Out

HDFC has 130 offices spread all over the country. This extensive network helps

HDFC in providing quality service to its large and extensive client base. In 1996,

29

HDFC established an office in Dubai. HDFC has further enhanced its presence in

the Middle East with Service Associates in Bahrain, Kuwait, Oman, Qatar and

Saudi Arabia. HDFC has also evolved the concept of an "Outreach" programme.

An "Outreach" programme is a one or two-day visit, made by HDFC to reach

customers in locations where HDFC does not have an office. Currently, HDFC

has over 90 outreach locations.

Product Portfolio

At HDFC Standard Life, offer a bouquet of insurance solutions to meet every

need. it cater to both, individuals as well as to companies looking to provide

benefits to their employees. This section gives you details of all products. HDFC

have incorporated various downloadable forms and product details so that

customer can make an informed choice about buying a policy.

Individual Product

Group Product

Rural Product

Social Product

Tex Benefits

Individual Product

Protection range includes

Term Assurance Plan

Loan Cover Term Assurance Plan

Home Loan Protection Plan

Investment Plans

HDFC Investment products are well suited to meet your long-term needs.

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Investment range includes

Single Premium Whole Of Life plan

Unit Linked Wealth Maximiser Plus

Pension Plans

Pension Plans help you secure your financial independence even after

retirement.

Pension range includes

Personal Pension Plan

Unit Linked Pension

Unit Linked Pension Plus

Unit Linked Pension II

Unit Linked Pension Maximiser II

Savings Plans

Savings Plans offer you flexible options to build savings for your future needs

such as buying a dream home or fulfilling focus children’s immediate and future

needs.

Savings range includes

Endowment Assurance Plan

Assurance Plan

Savings Assurance Plan

Children’s Plan

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Money Back

Unit Linked Endowment

Unit Linked Endowment Plus

Unit Linked Endowment Suvidha

Unit Linked Endowment Suvidha Plus

Unit Linked Endowment II

Unit Linked Endowment Plus II

Unit Linked Young Star

Unit Linked Young Star Plus

Unit Linked Young Star Suvidha

Unit Linked Young Star Suvidha Plus

Unit Linked Young Star II

Unit Linked Young Star Plus II

Unit Linked Enhanced Life Protection II

SimpliLife

Health Plans

Health plans provides with timely support in case of any health related

emergencies and helps and customer family to remain financially independent in

difficult times.

Our Health range include

Critical Care Plan

Group Products

One-stop shop for employee-benefit solutions

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HDFC Standard Life has the most comprehensive list of products for progressive

employers who wish to provide the best and most innovative employee benefit

solutions to their employees. We offer different products for different needs of

employers ranging from term insurance plans for pure protection to voluntary

plans such as superannuation and leave encashment.

We now offer the following group products to our esteemed corporate clients:

Group Term Insurance

Group Variable Term Insurance

Group Unit-Linked Plan

METLIFE INSURANCE

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc.

and was incorporated as a joint venture between MetLife International Holdings,

Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and

other private investors. MetLife is one of the fastest growing life insurance

companies in the country. It serves its customers by offering a range of

innovative products to individuals and group customers at more than 600

locations through its bank partners and company-owned offices. MetLife has

more than 32,000 Financial Advisors, who help customers achieve peace of mind

across the length and breadth of the country. For more information about

MetLife, please visit the company’s website at www.metlife.co.in.

MetLife, Inc., through its affiliates, reaches more than 70 million customers in the

Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include

the number one life insurer in the United States (based on life insurance in force),

with over 140 years of experience and relationships with more than 90 of the top

one hundred FORTUNE 500® companies. The MetLife companies offer life

insurance, annuities, automobile and home insurance, retail banking and other

financial services to individuals, as well as group insurance, reinsurance and

33

retirement and savings products and services to corporations and other

institutions.

Organizational Structure

Rajesh Relan -Managing Director

Phanesh M S V S Appointed Actuary

Girish Malhotra Director - Agency

Nick Taket -Chief Financial Officer

Sameer Bansal Director - BA & BP

K R Anil Kumar Director - Financial Planning & Controller

Sankaran P S Director - Business Support

K S Raghavan Chief Administrative Officer

Gaurav Sharma Director - Customer Service & Operations

Amita Maheshwari Director - Human Resources

Preetinder Chadha Deputy Director - Corporate Sales & Sales Training

Vijay Raghavan Director - Marketing & Strategy

Product Portfolio

Individual Product

Group Product

Rural Product

No one can give you all the answers when it comes to dealing with life's ups

and downs. But we can certainly equip you to deal with life better. Please find

below the various products offered by MetLife to suit your specific need:

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Accumulation

Whole Life Policy

Met 100- Limited Pay Whole life Non - Participating

Met 100- Limited Pay Whole life Participating

Endowment Policy

MET Suvidha

Money Back Policy

Met Sukh Money Back Non Participating

Met Bhavishya

Multi Purpose

Met Smart Gold

Met Easy

Met Smart Plus

Met Smart Premier

Met Smart Plus - Single Pay

Met Smart Premier - Single Pay

Protection

Met Suraksha - TROP

Met Suraksha - TA

Met-Mortgage Protector SP/Limited pay(MRTA)

Retirement

MET Pension - Participating Deferred Annuity

MET Advantage Plus

Add Ons

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Accidental Death Benefit (ADB)

Term Rider

Waiver Of Premium

Critical Illness

MetLife offers a range of employee/member benefit solutions:

Protection Products

Met Loan Assure

Met Group Life

Met Group Life in lieu of EDLI

Met Group Riders

Fund Products

Met Gratuity

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COMPARISON BETWEEN HDFC STANDARD LIFE AND METLIFE

INSURANCE

Group Insurance

One-stop shop for employee-benefit solutions

HDFC Standard Life and Met life both has the most comprehensive list of

products for progressive employers who wish to provide the best and most

innovative employee benefit solutions to their employees. We offer different

products for different needs of employers ranging from term insurance plans for

pure protection to voluntary plans such as superannuation and leave

encashment.

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It offer the following group products to our esteemed corporate clients:

• Group Term Insurance

• Group Variable Term Insurance

• Group Unit-Linked Plan

An investment solution that provides funding vehicle to manage corpuses with

Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave

Encashment schemes of your company. Also suitable for other employee benefit

schemes such as salary saving schemes and wealth management schemes.

Social Insurance

Development Insurance Plan

Development Insurance plan is an insurance plan which provides life cover to

members of a Development Agency for a term of one year. On the death of any

member of the group insured during the year of cover, a lump sum is paid to that

member’s beneficiaries to help meet some of the immediate financial needs

following their loss.

Eligibility

Members of the development agency and their spouses with:

• Minimum age at the start of the policy 18 years last birthday

• Maximum age at the start of policy 50 years last birthday

Employees of the Development Agency are not eligible to join the group. The

group to be covered is only eligible if it contains more than 500 members.

Premium Payments

The premium to be paid will be quoted per member in the group and will be the

same for all members of the group.The premium can only be paid by the

Development Agency as a single lump sum that includes all premiums for the

group to be covered. Cover will not start until the premium and all the member

information in our specified format has been received.

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The premium rate is Rs. 25 per Rs. 10,000 of lump sum, per member.

Benefits

On the death of each member covered by the policy during the year of cover a

lump sum equal to the sum assured will be paid to their beneficiaries or legal

heirs. Where the death is as a result of an accident, an additional lump sum will

be paid equal to half the sum assured. There are no benefits paid at the end of

the year of cover and there is no surrender value available at any time.

MetLife India has launched Met Ultimate, a life insurance policy, which assures

minimum returns (net rate of 3.5 per cent per annum) and an additional bonus

interest based on investment performance. The policy covers up to age 100 and

offers the facility to withdraw cash from the accumulation account after the first

two years. Met Ultimate offers three death benefit options to choose from. It also

comes with the flexibility of increasing or decreasing the face amount. The

premiums will be based on age, sex and smoker/non-smoker classification

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OBJECTIVE OF THE STUDY

(a) To study the Insurance and Growth in public and private insurance

companies in India.

(b). To Assessment the opportunity and Risks involve in insurance sector.

(c) To study the Regulatory Framework for insurance sector.

(d) Comparison between HDFC and Met life Insurance according to their product

portfolio.

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RESEARCH METHODOLOGY

The various tools likely to be used to research are internet search, newspaper

and general guidance from the external guide.

Primary Source: Through Questionnaire, collecting data from the

insurance company to know about the sales of insurance

Secondary source: Various insurance journal and government Journal

like IRDA also through various insurance related website

Sample Size- Met Life & HDFC standard life

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ANALYSIS OF THE PROBLEM UNDER STUDY

Insurance is estimated to be Rs.400billion business in India and the gross

premium collection is about 2% of GDP growing between 15% and 20% per

annum. India also has the highest number of insurance policies in force in the

world and the total investible funds with LIC alone are almost 8% of GDP. Yet,

more than three-fourth of India's insurable population has no life insurance cover.

Considering that only about 65million out of 250 million people are covered by life

insurance, the potential is quite evident.

I tried and analyze the benefit that getting to the final customer covering under

the Insurance and because various types of policies and instruments are coming

up in the market to attract more customers. Most of the population of India is not

insured, hence there is a lot of scope in this sector and a number of companies

are planning to enter the sector. Every futuristic individual would want himself to

get insured

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INTERPRETATION OF RESULT

1. Please mention the name of the insurance company through which maximum through

you like to cover your life

Category No of Respondent

HDFC Standard life 8

BIRLAS 1

LIC 10

TPA 8

Others 6

Met life 6

ICICI Prudential 11

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From here with this question we are trying to analyze that business opportunity of

both the company i.e. HDFC standard life and Met life in current scenario or

market and what percentage of market they are covering right now.

From our survey it is clearly mentioned that market leader insurance company is

ICICI Prudential whereas 11 people out of 50 respondent having insurance from

ICICI also LIC would be come in second place where as 10 respondent are taken

insurance from the company of LIC.

Now for the third and fourth slot the big fight is between Met Life where this

company takes a share of 6 people out of 50 and the HDFC standard life which is

renowned brand due to its market has 8 people in favor of out of 50.

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2. Please mention the type of insurance policy you are covered under

Individual 30

Corporate 20

Here are one more clue that will reach HDFC & Met life plan to launch insurance

HDFC & Met life services in India 60% people responded that they have

individual insurance policy while 20% people still with corporate side.

Recommendation for HDFC & Met life that that 60% people want more and more

service from the insurance company and in coming days people want hazel free

life if somebody tell him pay for that they are ready to pay reasonable amount for

the better and effective service. With the same product portfolio will increase the

penetration of the insurance company.

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3. Please mention the type of insurance you are covered under

Category No of Respondent

Accidental 11

Health 14

Life 23

Any other 2

Here from our survey we got to know that more respondent are taken multiple or

Life insurance for taking them insured 23 people out 50 are insured by the life

insurance.

While 14 people are taken health insurance, and 11 are taken accidental

insurance.

For recommendation of HDFC & Met life they tap life insurance company easily

because the life insured people take any policy for lifelong so the HDFC & Met

life involved at least more than 20 yrs, in fact health service is more complicated

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one so HDFC & Met life help client to better customer service rather than its

competitor if they will take service of HDFC & Met life

4. Is HDFC Insurance more affordable than the other Insurance available on your nearest

telecom shops?

Strongly Agree 76

Agree 97

Disagree 38

Strongly Disagree 46

Neutral 43

This question gives us insight of the affordability of the Insurance or service.

With low disposable incomes, Insurances need to be affordable to the Delhi

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consumer, most of who are on daily wages. Now we check what Delhi customer

want from the company in terms of their Insurance prices.

Out of 300 sample size we consider to choose first strongly agree respondent

who believes that HDFC Insurance is affordable for him/her 25% respondent out

of 300 says HDFC Insurance is affordable in comparative of other competitor.

While 33% are only agree with this statement that HDFC has much affordable

price of their respective Insurance. Now moving ahead 28% respondent are still

not agree or strongly disagree with this question they thought Met life Insurances

are much costlier than the other mobile service provider companies Insurance.

14% respondent said they have mixed view about the affordability these people

are those who are richer in Delhi region.

Recommendation for Met life would be target 28% people also to provide much

more scheme and plan so they comes under the pie of affordable range.

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5. The various ranks given by the customers about their perception about

different players in the market:

Attributes Brands ICICI HDFC Met

life

Others

Cheap 6 6 5 9

Easy Availability 10 10 7 6

Quality 9 7 8 6

Total 25 24 20 21

In the above table it is quite clear that ICICI is given the highest points in the

product satisfaction and reliability on the parameters given above. Where as

HDFC has a 24 score out of 30 for there product portfolio It is evident that Met

life has to improve lot on there product portfolio so that met life Insurance is

having rises its lower number one due to its two main attributes it is not easy

availability and cheap price.

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SUGGESTIONS/RECOMMENDATION

HDFC Standard Life has the most comprehensive list of products for progressive

employers who wish to provide the best and most innovative employee benefit

solutions to their employees. We offer different products for different needs of

employers ranging from term insurance plans for pure protection to voluntary

plans such as superannuation and leave encashment.

We now offer the following group products to our esteemed corporate clients:

• Group Term Insurance

• Group Variable Term Insurance

• Group Unit-Linked Plan

An investment solution that provides funding vehicle to manage corpuses with

Gratuity, Defined Benefit or Defined Contribution Superannuation or Leave

Encashment schemes of your company. Also suitable for other employee benefit

schemes such as salary saving schemes and wealth management schemes.

Across the world, corporations striving to be more productive, look to meeting the

key needs of their employees through exceptional employee benefit programmes

that can help them attract and retain the best people.

Where as Met life vision is to help employers and emploees select the right mix

of life insurance and service features to fit their given situation, making group life

a cornerstone to building financial freedom

Products

MetLife offers a range of employee/member benefit solutions:

1. Protection Products

• Met Loan Assure

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• Met Group Life

• Met Group Life in lieu of EDLI

• Met Group Riders

2. Fund Products

• Met Gratuity

Services

MetLife offers the following services

• Defined Service Parameters

• Easy Policy administration

• Strong & reliable operations and underwriting team

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REFERENCES

Berman, Peter. "Rethinking Health Care Systems: Private Health Care Provision

in India." Harvard School of Public Health Working Paper, November 1996.

Business Today. "The Monitory Group Study on Insurance I and II." March 22

and April 7, 2000.

Kumari, Vaswati, "India Insurers Seek Perfect Partners." National Underwriters,

March 5, 2001, 38-39.

Roy, Abhijit. "Pension fund business in India." The Hindu, July 16, 1997, p. 25.

Roy, Samit. "Insurance Sector: India." Industry Sector Analysis, National Trade

and Development Board, US Department of State, Washington, DC, December

1999.

Sigma. "World Insurance in 1999." No. 9/2000. Published by SwissRe. Available

at www.swissre.com.

Sinha, Tapen. Pension Reform in Latin America and Its Implications for

International Policymakers. Boston, USA, Huebner Series Volume No. 23,

Kluwer Academic Publishers, 2000.

U.S. Department of State FY 2001 Country Commercial Guide: India.

Commercial Guide for India was prepared by U.S. Embassy New Delhi and

released by the Bureau of Economic and Business in July 2000 for Fiscal Year

2001.

www.hdfcstandardlife.com

www.metlifeindia.com

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ANNEXURE

QUESTIONNAIRE

1. Please mention the name of the insurance company through which

maximum through you like to cover your life

a) LIC b) HDFC c)BIRLAs

d) Met life e) ICICI PRUDENTIAL f)OTHERS(specify)

2. Please mention the type of insurance policy you are covered under

a) INDIVIDUAL b)CORPORATE

3. Please mention the type of insurance you are covered under

a)ACCIDENTAL b)HEALTH

c)LIFE d) ANY OTHER(Specify)

4. Is HDFC Insurance more affordable than the other Insurance available on

your nearest telecom shops?

(1) Strongly Agree (2) Agree (3) Disagree

(4) Strongly Disagree (5) Neutral

5. The various ranks given by the customers about their perception about

different players in the market:

Attributes Brands ICICI HDFC Met

life

Others

Cheap

Easy Availability

Quality

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