Date post: | 09-Apr-2018 |
Category: |
Documents |
Upload: | ramesh-singh |
View: | 224 times |
Download: | 0 times |
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 1/77
SESSION-2009-2010
PROJECT REPORT
SUBMITTED THE PARTIAL FULFILLMENT OF THE
B.B.A. DEGREE
ON
MICROMARKETING OFINSURANCE
Submitted to: Submitted by:
UNIVERSITY OF RAJASTHAN KRISHAN KUMAR SAINI
JAIPUR (RAJ) B.B.A. Final Year
NATIONAL COLLEGE FOR RESEARCH & TECHNOLOGY, JAIPUR
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 2/77
Summer Internship Project
2009Micromarketing of insurance
Company Guide:
Mr. Naval Kishore Sharma(Assistant Business Development Manager, Jaipur )
Submitted By:
KRISHAN
KUMAR SAINI
(National College For Research
& Technical, Sitapura,
Jaipur)
Faculty Guide:
Mrs.Tina Gupta
(Head of Department)
(National College For Research & Technical, Sitapura, Jaipur)
2
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 3/77
PREFACE
Theories are being developed, designed and stated on the groundwork
of their practical implementation and usage. Work experience seemsto be the most effective and indispensable factor of making an
individual an adept. This is because one can not do without being
exposed to varying circumstances and possible consequences. Training
not only develops individual skills and abilities but also provides
proficiency in work performance.
This report served as a means to share my personal experiences while
working on this project which provided me the platform where I was
face to face with practical aspects of theoretical knowledge gained so
far.
This training project report has been prepared during the summer
training of 45 working days in an organization. It is an integral part of
MBA curriculum. The summer training was challenging, gainful and
interesting and it gave real insight of corporate world.
I sincerely believe that there is no better place to learn the practical
side of management studies than the industry itself.
3
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 4/77
ACKNOWLEDGEMENT
The project report prepared by us though bears our name alone but isactually a collective effort. I am indeed indebted to a lot of people and
their names surely deserve to be mentioned.
I feel immense pleasure in conveying my heartiest thanks and deep
sense of gratitude to Mr. Arvind Rawat Branch Manager TATA AIG
Life Insurance Company Ltd. Jaipur for giving me an opportunity to
work on the project.
I offer my sincere thanks to Mr. Naval Kishore Sharma, Assistant of
Business Development Manager Jaipur- for their regular guidance in
the project and to sharpen my rough edges from time to time.
I would like to particularly mention my deep gratitude to Mrs.Tina
Gupta, Head of Department (Department of management studies) and
Dr. Shiv Prasad (Training and Placement officer) Management
Studies giving their consent and blessings to undertake this training.
(KRISHAN KUMAR SAINI)
4
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 5/77
CONT ENTS
1. Introduction
2. Company Profile
3. Vision and Values of the Company
4. Branch Profile
5. Products of TATA AIG Life Insurance Ltd.
6. SWOT Analysis
7. Findings and Suggestions
8. Questionnaire
9. Conclusion
10. Bibliography
INTRODUCTION
5
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 6/77
Introduction to Insurance
Every asset has a value for its owner and also for those who are
benefited with the existence of that asset. Insurance is concerned with
the protection of economic value of assets.
Every asset has normally an expected lifetime. During this period, it is
expected to perform and provide income/comfort to the owner. The
owner, being aware of this, plans the things in such a way that by the
time the expected lifetime of the asset expires, he is ready with the
funds required for its replacement. In this way, he ensures that the
value or income from the asset is not lost. Well, this appears to be a
fine arrangement provided the asset completes its expected lifetime!
All assets carry the risk of being destroyed or damaged. But all assets
may not necessarily get destroyed or damaged. Only in a few
instances, the probability turns out to be true and the asset gets
actually lost or destroyed by accident or some other unfortunate event
before the completion of its expected lifetime. The owner and those
deriving benefits from the asset will suffer because the arrangement to
make available its substitute is not yet ready.
Insurance is helpful in mitigating such adverse consequences. To sum
up, assets are insured, as they are likely to be lost or made non-
functional through an accidental occurrence.
6
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 7/77
Insurance does not protect the assets. This means that insurance
cannot prevent loss to the assets due to perils. Nor can insurance
avoid the occurrence of the perils. It only compensates, may not be
fully, the economic or financial loss resulting to the asset from such
damage or destruction.
History of Insurance
The beginning of insurance business is traced to the city of London. It
started with the marine business. Marine traders, who used to gather
at Lloyd’s coffee house in London, agreed to share losses to goods
during transportation by ship. Marine related losses included:-
Loss of ship by sinking due to bad weather in high seas.
Goods in transit by ship robbed by sea pirates.
Loss of or damage to the goods in transit by ship due to
bad weather in high seas. The first insurance policy was
issued in England in 1583.
Life Insurance in India
7
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 8/77
In India, insurance started with life Insurance. It was in the early 19 th
Century when the Britishers on their postings in India felt the need of
life insurance cover.
It started with English Companies like... ‘The European and the Albert’.
The First Indian insurance company was the Bombay Mutual Assurance
Society Ltd., formed in 1870.
In the wake of the Swadeshi Movement in India in the early 1900s,
quite a good number of Indian companies were formed in various parts
of the country to transact insurance business. To name a few::
‘Hindustan Co-operative’ and ‘National Insurance’ in Kolkata; ‘United
India’ in Chennai; ‘Bombay Life’, ‘New India’ and ‘Jupiter’ in Mumbai
and ‘Lakshmi Insurance’ in New Delhi.
Nationalisation of Life Insurance in India
In 1956, life insurance business was nationalized and LIC of India came
into being on 1.9.1956. The government took over the business of 245
companies (including 75 provident fund societies) who were
transacting life insurance business at that time. Thereafter, LIC got the
exclusive privilege to transact life insurance business in India
Purpose and Need for Insurance
8
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 9/77
• Assets are likely to be destroyed or made non-functional due to
accidental occurrences called perils. Assets can, therefore, be
insured. A few examples of perils are: fire, floods, breakdowns,
lightning, earthquake etc. Perils are the events. Risks are the
consequential losses or damages.
• Possibility of damage to asset caused by any peril is the risk that
asset is exposed to.
• Risk means uncertainty or unpredictability about future loss or
damage, which may or may not happen. This refers to the losses,
which may happen suddenly and unexpectedly.
• We can say that a human life is also an income-generating asset.
• Human life may be lost due to unexpected early death or
become non-functional following sickness or disabilities cause by
accidents.
• If this happens by the time one is on the verge of retirement
when his income is about to cease, he might have made
alternative arrangements to meet his needs.
9
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 10/77
Company profile
History -
AIG insurance group in America with a history dating back to 180 years as one
of the leading provider of life and pension products to Europe and other parts of
the world. The history of Tata AIG Life Insurance India starts at 1829 during
nationalization when Tata AIG was the largest foreign insurance group in terms
of the compensation paid by the Indian Government. In 1829 AIG was the first
foreign insurance company to start its representative office in India. At present in
AIG Insurance India, the AIG group is a 26% share holder and the TATA
group holds 74% shares in the joint venture.
AIG is distinguished for being the first foreign insurance company to set up its
representative office in India, in 2001. AIG Life Insurance Company established the
concept of Bancassurance in India, and has leveraged its global expertise in
Bancassurance successfully here. The company boasts of 483 branches in India,
supporting its vast distribution network. TATA AIG offers various products that are
meant to provide customers flexibility, transparency and value for money. Given here is a
complete list of products & services offered by Tata AIG Life Insurance Company India
Ltd.
10
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 11/77
Types of Insurance
1. Non-Life Insurance 2. Life Insurance
Basically Non-Life Insurance Includes:-
Marine Insurance
Fire Insurance
Miscellaneous Insurance
Vehicles
Furniture
Building
Aircrafts
General
Life Insurance Includes:-
Only Human Life Insurance
Human being’s sickness, illness
Long term concept
11
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 12/77
12
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 13/77
13
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 14/77
14
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 15/77
15
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 16/77
Classification of life insurance plans
Lif e insurance plans can be classified into the following four categories
according to the
Features:Protection Plans
Investment Plans
Pension Plans
Savings Plans
Protection Plans
As the name suggests this category of plans are designed to protect
the income earning capacity of the life assured. The present income of
the life assured therefore forms the basis of the life insurance. A
person with no income therefore cannot be given this plan. The plan is
therefore not offered to students, housewives and minors.
The plans are in the nature of assurances rather than pure insurance.Under the plan the insurance company assures the policyholder that a
lump sum of money would be paid on the happening of the insured
event. Thus even if the life assured does not earn the same level of
income at the time of the happening of the insured event, as at the
time when he took the insurance, the lump sum is still payable.
The premium collected under this category of plans is generally
sufficient to cover the risk insured. There is no return of premium on
the expiry of the cover; however a saving element can be built under
the plans to return the savings amount at maturity. The plans do not
share in the profits of the company and have no bonuses.
16
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 17/77
The risk is common to the poll of policyholders who by purchasing the
plan choose to share the risk with group. The claims are paid from the
contributions made by the policyholders. The premium paid by the
policyholder is sufficient to cover the risk and expenses, hence
generally on the expiry of the cover nothing is payable.
Under the protection plans the risk is covered for a premium, which is
sufficient to pay the claims and the expenses. It is therefore necessary
for the insurance company to ensure that the claims do not exceed the
assumed mortality. To ensure this, the insurance company would
strictly underwrite the protection plans. There is also a stiff competition
under the protection plans as the plans of two companies can be
compared on the basis of the premium charged. Every company tries
to get the share of the market by keeping the premium under this
category lower. The only way for a company to keep the premium low
over a long period is to control the expenses and claims. The service
factor is also important while selling a protection plan. How quickly the
claim would be settled matters. In case a company is charging some
few rupees more but is known for quick settlement of the claim theclient would not mind going with such company. Hence the premium
rate as well as the service should be explained to the client while
selling the protection plans.
The plan should be sold on the basis of the Human Life Value (HLV)
concept. As per the HLV concept every individual has an economic
value, which is equal to the present value of all future earnings of that
individual. Company should sell this plan to clients who have an
income and a financial responsibility. This form of insurance is also
called a “young persons privilege” as it is easy to get this insurance
when you are young and since savings are low when a person is
young he should possess this cover in case of an unforeseen event.
17
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 18/77
Rider Benefits also fall in this category of plans. Under the rider the
insured event is defined and claims are payable only if the insured
event as defined occurs. Rider benefits usually come with a number of
exclusions. One should understand the exclusions and the definitions
of the rider benefit before choosing a rider.
Investment Plan
As the name suggests this category of plans are designed to help the
person reduce some of the risk of investments. All the investment risks
cannot be reduced. What the investment plans try to do is to create a
pool of investors so that they can get the advantage of large funds,
18
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 19/77
diversified investments, professional management and better returns.
Investment plans can be designed to protect the policyholder against
the market fluctuations. However all policyholders cannot be protected
at the same time against market fluctuations. It is common to allow
the protection to a small group of policyholders at any given point of
time. One of the objectives of the investment type of plans is to give a
good return to the policyholder.
When risk covers are integrated with the investment plans the cost of
the risk covers reduce the returns to the policyholders. To avoid the
risk cover costs the plans do not offer huge risk covers. Hence in these
type of plans, premium paid by policyholder is almost equal to the sum
assured.
The premium under the plans mainly consists of investment. It would
not be correct to compare this category of plans on the basis of the
sum assured and the premium paid. In case a higher premium is
collected under the plan, the company would be in a better position to
pay a bigger amount on maturity/death. A better way of comparison
would be to compare what the client pays and what he would get
under the plans. At the time of selling unfortunately you would not be
able to show to the client as to what he would get under his plan.
Illustrations and past bonuses are something you can use to convince
the client. The company background and the philosophy of the
company can also be used to convince the client.
Life insurance investment plans are designed for long-term
investments. It is not cost effective for a life insurance company to
design a short-term investment plan. It is therefore usual for these
types of plans to have a term of 10 years and above. It is important to
make the client understand that he is entering into a long-term
19
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 20/77
investment when he purchases and investment plan form a life
insurance company.
This plan is useful when the client is looking for investment for a long
term financial needs which requires investment of money for a long
term.
The investment plan can be designed as a with-profits contract or a
unit linked contract. In a with profits contract the returns are
smoothened while under the unit linked contract the returns to the
client depend on the movement of the Net Asset Values (Naves) of the
units purchased.
Pension Plans
Pension Plans are designed to provide pension. With the interest rates
fluctuating and the increase in longevity the interest in the pension
products has been growing in the recent past. Life pensions provide an
20
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 21/77
income till death and this is attractive in the above mentioned
scenario.
The Indian society has been moving from the joint family system to the
nuclear family system. There is also no form of social security
schemes, which provide an income in the old age. It is therefore
important that all individuals think about their retirement and save for
an income in the old age. Pension Plans help the client to build the
pension fund, which is earmarked, to provide for the pensions and pay
the pensions on the chosen retirement date.
Pension Plans can be further classified into the following two
categories:
1. Deferred Pension Plans – These plans help the client build the
pension fund during his earning years and convert the fund into
pensions on the chosen retirement date.
2. Immediate Pension Plans – These plans pay a pension
immediately after the lump sum purchase price is paid to the
insurance company.
The deferred pension plan has two parts. In the first part the savings of
the policyholder is accumulated to create a fund for the purchase of a
pension on the chosen date. This accumulation can be offered through
a with-profits fund or through the unit linked mechanism.
21
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 22/77
In the second part the fund is used to purchase an annuity chosen by
the policyholder. There are various immediate annuities, which are
available and the client should choose one, which suits him the best.
The choice of the annuities is therefore given to the client just before
the annuity starts.
The aim of a deferred pension plan is to provide a good annuity to the
client. Risk covers are therefore not built in the plan. This is to ensure
that the cost of the risk cover does not reduce the amount available for
pension.
The deferred pension plan works like a savings plans with the
difference that the amount at the end of the contract is paid in the
form of pension. In the event of death before the pension starts the
premium is returned with interest.
HDFC Standard Life launched the following plans in this
category:
1. Personal Pension Plan (with profits)
2. Unit Linked Pension Plan
Savings Plans
The savings plans are designed to help a person save for a long-term
event. Long-term savings have inherent un-certainties. Besides long
22
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 23/77
term savings instrument are not available in the market. The savings
plans aims to provide a solution to the client in this area with the
benefit of life insurance.
It is important to note that the insurance cover offered is on the
savings. While purchasing the plan that the policyholder has a savings
target in mind. The plan aims to protect this target in the event of the
death of the life assured. In the event of the death of the life assured
during the term, in addition to the amount saved the amount, which
could not be saved is also paid to the beneficiary.
The premium paid by the policyholder consists of the savings. The risk
cover cost on the savings forms a very small portion of the premium.
The effectively means that the premium paid by the policyholder would
determine the maturity amount that the policyholder would ultimately
get. Thus comparison on the savings products of two companies, on
the premium and the sum assured is a wrong method of comparison.
Savings plans offer the clients a good vehicle to build savings for a
long-term financial need. The earlier the client starts a savings plan the
lesser he would have to contribute as his savings would grow bigger
due to the effect of compound interest. To sell a savings
plans you need to identify the long term savings needs of
the client and explain to him the benefits of savings through
life insurance.
Savings plans have a risk element, which needs to be
underwritten to ensure that the death claims are controlled.
In case a company is very liberal in granting the covers the
chances are that the policyholders who survive would get a lower
23
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 24/77
maturity benefits. Maturity benefits can be enhanced by a strict control
on the claims and the expenses.
Savings Plans can be offered as a with-profits plan or a unit linked plan.
A with profits fund aims to smoothen the returns to the policyholder
using the bonus mechanism while the returns to the policyholder under
a unit linked plan depends on the movement of the unit prices.
PRODUCTS:
1. Endowment Assurance Plan
Savings for a better tomorrow
Introduction
24
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 25/77
The Endowment Assurance Plan is a with profits savings contract which
aims to give good maturity values to the client by investing the funds
as per the IRDA guidelines and reducing claims and costs. The aim of
the plan is to pay good maturity values so that the savings objectives
of the policyholders are met.
Need for the Plan
The Endowment Assurance Plan is designed to provide a solution to the
long term financial needs. It is often felt that people save only when
their income is more than their expenses. To put it bluntly if a person
can earn more than what he can spend he can save. In reality this is
not the situation as one finds that it is impossible to save with the
current level of expenses. Why does this happen?
Expenses are a function of our needs, which arise due to our wants. We
all know that the wants of a human being are unlimited. Consequently
the needs keep on increasing and often increase at a rate higher than
the rate of growth of income. Income on the other hand is limited andoften grows at a much lower rate than the needs. Consequently it is
difficult to save.
There are various savings options available in the market; however
most of the options are short-term or medium term. Life Insurance
savings plans are a better choice as in addition to providing the vehicle
to save for long term the plans also offer insurance on the savings.
Income does not increase with every requirement for finance.
Children’s education, marriage, housing etc. require lump sum
25
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 26/77
amounts. In case any person has a responsibility to spend on these
kinds of long-term events, he would have a need for the product.
Features of the Endowment Assurance Plan
The following are the features of the plan:
1. Benefits:
a) Death Benefits : In the event of death of the life assured
during the term of the contract, and provided all the
premiums are paid till the time of the death of the life
assured, the sum assured, together with reversionary
bonus and the terminal bonuses (if any) would be paid to
the beneficiary. The policy would terminate on payment of
the death benefit.
b) Maturity Benefits : On survival of the life assured till the
date of maturity, and subject payment of all premiums, the
policyholder would be paid the sum assured, together withthe reversionary bonuses and terminal bonus (if any). The
policy would terminate on payment of the maturity benefit.
c) Paid-up Benefits : In case the policyholder discontinues
payment of premium after the premiums are paid for at
least three years, the policy would be reduced to a paid-up
policy. The reduced paid-up benefits are payable on death
of the life assured during the term, or survival of he life
assured till the date of maturity, whichever is earlier.
26
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 27/77
d) Surrender Benefits: The policyholder can surrender the
policy at any time. In case the policyholder chooses to
surrender the policy before the payment of three years
premium the surrender value would be equal to zero and
nothing would be payable. In case the policyholder chooses
to surrender after three years, he would be entitled for a
surrender value.
2. Frequency of premium payment:
The policyholder can choose yearly, half-yearly or quarterly
mode of payment, as he desire. The frequency of premiumpayment can be altered during the term of the contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
three years. In case premiums are not paid for three years the
policy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
27
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 28/77
5. Minimum premium:
The following are the minimum premium conditions under the
Endowment Assurance Plan.
Annual mode Rs. 1800
Half yearly mode Rs. 1000
Quarterly mode Rs. 550
There is no condition of maximum premium.
6. Other conditions:
Minimum Term 10 years
Maximum Term 30 years
Minimum Age at Entry 12 years
Maximum Age at Entry 60 years
Maximum Maturity Age 75 years
The policyholder has the choice to choose any term between 10
to 30 years, subject to the maximum maturity age. In case the
policy is taken on the life of a minor then the legal guardian of the minor would have to
propose the insurance on behalf of the minor. The policy
would automatically vest in the life assured when he attains the
age of majority.
7. Policy loans:
Policy loans would be available under the plan once the policy
acquires a surrender value. The policy loans would be to the
extent of 90% of the surrender value. The company would quote
the terms and conditions of the policy loans at the time of
granting the loans and the same would vary from time to time.
28
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 29/77
8. Life cover basis:
The endowment assurance plan can be offered on a single life
basis or as joint life first claim basis. When the policy is offered
on a joint life basis the death claim would be paid on the death of
any one of the lives assured and the policy would terminate.
9. Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961. The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
Positioning of the Endowment Assurance Plan
The Endowment Assurance Plan can be positioned as along term
savings vehicle with a cover on the savings. The plan is suited to help
in building a fund for long term financial needs. The guarantees in thenature of sum assured and the bonuses assure the client of a
smoothened long-term return. The philosophy and practices of the
company can help in building the maturity values for the client and
hence positioning the company is also important in the sale of the
Endowment Assurance Plan.
2. Money Back Plan
Plan with periodic survival benefits
Introduction
29
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 30/77
The Money Back Plan is a with profits savings contract which in
addition to the payment of periodic survival benefits aims to give good
maturity values to the client by investing of funds as per the IRDA
guidelines and reducing claims and costs. The aim of the plan is to pay
periodic survival benefits and build good maturity values so that the
short term, medium term and long-term savings objectives of the
policyholders are met.
The net returns to the policyholders at the time of maturity would
depend on the investment and cost experience during the term of the
contract.
Need for the Plan
The Money Back Plan is designed to provide a solution for the short-
term, medium term and long term financial needs. It is therefore
important to understand the financial needs before suggesting the plan
as a solution.
Since people have some short term and medium term and mediumterm financial goals like providing for a vacation, purchasing of a
luxury item or house renovations etc, they require money periodically
in short intervals to meet these goals.
The Money Back Plan is designed to provide money periodically so that
the same can be used for such requirements. The added advantage of
the Money Back Plan is that the risk cover keeps on adjusting during
the term of the contract and the policyholder is assured payment of
the full sum assured together with the bonuses irrespective of the
survival benefits paid on death of the life assured during the term.
Features of the Money Back Plan
30
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 31/77
The following are the features of the plan:
1. Benefits:
a. Death Benefits : In the event of death of the life assured
during the term of the contract, and provided all the
premiums are paid till the time of the death of the life
assured, the sum assured, together with reversionary
bonus and the terminal bonuses (if any) would be paid to
the beneficiary.
b. Survival Benefits: Survival benefits are paid at the end
of every fifth year on survival of the life assured. The rates
of survival benefits are given below. The policy would
continue after payment of the survival benefit.
Number of years from the policy
commencement date
Policy
Term 5 10 15 20 25
10 40%
15 30% 30%
20 25% 25% 25%
25 20% 20% 20% 20%
30 15% 15% 15% 15% 15%31
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 32/77
c. Surv
c. Maturity Benefits : On survival of the life assured till the
date of maturity, and subject payment of all premiums, the
policyholder would be paid the sum assured, together with
the reversionary bonuses and terminal bonus (if any) less
all survival benefits paid during the term of the
contract. The policy would terminate on payment of the
maturity benefit.
d. Paid-up Benefits: In case the policyholder discontinues
payment of premium after the premiums are paid for at
least three years, the policy would be reduced to a paid-up
policy. The reduced paid-up benefits are payable on death
of the life assured during the term.
e. Surrender Benefits : The policyholder can surrender the
policy at any time. In case the policyholder chooses to
surrender the policy before the payment of three years
premium the surrender value would be equal to zero and
nothing would be payable.
2. Frequency of premium payment:
The policyholder can choose yearly, half-yearly or quarterly
mode of payment, as he desire. The frequency of premium
payment can be altered during the term of the contract.
32
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 33/77
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
three years. In case premiums are not paid for three years the
policy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
33
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 34/77
5. Minimum premium:
The following are the minimum premium conditions under the
Money Back Plan.
Annual mode Rs. 1800
Half yearly mode Rs. 1000
Quarterly mode Rs. 550
There is no condition of maximum premium.
6. Other conditions:
Minimum Term 10 years
Maximum Term 30 years
Minimum Age at Entry 12 years
Maximum Age at Entry 60 years
Maximum Maturity Age 75 years
The policyholder has the choice to choose any term between 10
to 30 years, subject to the maximum maturity age. In case thepolicy is taken on the life of a minor then the legal guardian of
the minor would have to propose the insurance on behalf of the
minor. The policy would automatically vest in the life assured
when he attains the age of majority.
7. Policy loans:
Policy loans would be available under the plan once the policy
acquires a surrender value. The policy loans would be to the
extent of 90% of the surrender value. The company would quote
the terms and conditions of the policy loans at the time of
granting the loans and the same would vary from time to time.
34
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 35/77
8. Life cover basis:
The Money Back Plan can be offered on a single life basis or as
joint life first claim basis. When the policy is offered on a joint life
basis the death claim would be paid on the death of any one of
the lives assured and the policy would terminate.
9. Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
3. Children’s Plan
Plan designed for the benefit of children
Introduction
35
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 36/77
The Children’s Plan is a with-profits savings contract designed for the
benefit of the child. The plan therefore has a provision for a
beneficiary, which can be the child, and all benefits under the plan
would be paid to the child. The funds generated under the plan are
invested as per the IRDA guidelines.
The net returns would depend on our investment and cost experience
during the term of the contract
Need for the Plan
Most parents feel that it is their responsibility to provide the best for
their children. In addition to the physical and emotional wants children
also need to be provided for financially. There are two types of
financial needs of the child:
I. Short term financial needs for food, clothing shelter and
education. This need is mostly met from the income of the
parent
II. Long term financial need for higher education, marriage
and start in life. The alternatives for this are either to save
or raise loans.
In the event of an early death of the parent the child become
dependent of one of the close relative. To ensure that the child would
be taken care even after such an eventuality the parent can look atproviding an income as well as lump sum amounts for the benefit of
the child. The Children’s Plan is designed to help the parent in planning
for the above financial needs of the child.
36
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 37/77
All the arguments on the need to save and savings being a better
option than raising a loan are applicable while selling the Children’s
Plan.
Features of the Children’s Plan
The following are the features of the plan:
1. Benefits:
a) Death Benefit: Under this option on death of the life
assured during the term of the policy, provided the
premium is paid till the date of death; no amount would be
immediately payable. The future premiums would be
waived and at maturity date of the policy the full sum
assured with the reversionary bonuses and terminal bonus
(if any) would be payable to the beneficiary. The policy
would participate in the bonuses till the date of maturity.
The policy would terminate on the payment to beneficiary.
b) Accelerated Benefit : Under this option on death of the
life assured during the tem of the policy, provided the
premium is paid till the date of death, the sum assured
with the reversionary bonus and terminal bonus (if any)
would be payable immediately to the beneficiary and the
policy would terminate.
c) Double Benefits : Under this option on death of the life
assured during the term of the policy, provided the
premium is paid till the date of death; one sum assured
37
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 38/77
would be paid to the beneficiary immediately. The future
premiums would be waived and at maturity date of the
policy the full sum assured with the reversionary bonus
and terminal bonus (if any) would be payable to the
beneficiary. The policy would terminate on payment of the
benefit on the date of maturity
d) Maturity Benefits: In the event of survival of the life
assured during the term of the contract, and provided all
the premiums are paid, the sum assured, together with the
reversionary bonuses and the terminal bonuses (if any)
would be paid to the beneficiary. The policy would
terminate on payment of the maturity benefit.
e) Paid-up Benefits: In case the policyholder discontinues
payment of premium after the premiums are paid for at
least three years, the policy would be reduced to a paid-up
policy. If the Children’s Plan is made paid up, a table of
adjustment factors will be used to adjust the policy’s basic
sum assured to a paid up value. The adjustment factors
will vary by the policyholder’s age, the policy’s original
term, policy duration, and frequency.
f) Surrender Benefits : The policyholder can surrender the
policy at any time. In case the policyholder chooses to
surrender the policy before the payment of three years
premium the surrender value would be equal to zero and
nothing would be payable. In case the entitled for a
surrender value.
2. Frequency of premium payment:
38
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 39/77
The policyholder can choose yearly, half-yearly or quarterly
mode of payment, as he desire. The frequency of premium
payment can be altered during the term of the contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
three years. In case premiums are not paid for three years the
policy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
39
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 40/77
5. Minimum premium:
The following are the minimum premium conditions
under the Children’s Plan.
Annual mode Rs. 1800
Half yearly mode Rs. 1000
Quarterly mode Rs. 550
There is no condition of maximum premium.
6. Other conditions:
Minimum Term 10 years
Maximum Term 25 years
Minimum Age at Entry 18 years
Maximum Age at Entry 60 years
Maximum Maturity Age 75 years
The policyholder has the choice to choose any term between 10
to 25 years, subject to the maximum maturity age. In case the
policy is taken on the life of a minor then the legal guardian of the minor would have to propose the insurance on behalf of the
minor.
7. Policy loans:
Policy loans would not be available under the plan.
8. Life cover basis:
The Children’s Plan is to be sold on the life of the parent with the
child as the beneficiary. The plan is not offered on a joint life
basis.
40
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 41/77
9. Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
Positioning of the Children’s Plan
The Children’s Plan can be positioned as a long term savings vehicle
specially designed to meet the financial requirements of the child. The
plan provides for both the immediate financial needs and the long term
financial needs. In case the client is not worried about the immediate
financial needs of the child on his death then the maturity benefit
option would be suitable to him. The sum assured payable on the
death in a double benefit option would help in providing for the
immediate financial needs of the child. The Accelerated benefit works
exactly like and endowment assurance plan. The guardian of the child
would have an option of either to spend the money for the immediate
benefit of the child or to save the claim amount for a future benefit.
41
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 42/77
4. Term Assurance Plan
Protection of Income
Introduction
The Term Assurance Plan is a without profits protection contract
designed to protect the income earning capacity of the life assured.
The present earning capacity of the client therefore forms the basis of
the insurance.
Need for the Plan
Uncertainty is a part of life. In the event of death of the breadwinner
the dependents are put to a lot of financial difficulty as they lose the
source of income. The problem is compounded in case the family does
not have savings to rely on. In case a person has dependents and also
does not have savings on which the family can rely on in the event of
his death, he needs to protect his income for the benefit of the family.
Term Assurance Plan is designed to offer the protection of the income
at the least possible cost.
Term Assurance Plan can also be used to cover liabilities so that in the
event of death the family receives a lump sum amount so that
liabilities are paid off. Term Assurance is an insurance of income and
hence the existence of liabilities is not the basis of granting the
insurance.
42
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 43/77
Features of the Term Assurance Plan
The following are the features of the plan:
1.Benefits:
a) Death Benefits : Provided the policy is in force in the
event of death of the life assured during the term of the
contract the sum assured is paid.
b) Benefits on expiry of the cover: On expiry of the cover
nothing is payable as Term Assurance is designed for
protection only.
c) Paid up Benefits: There are no paid up benefits under
this plan.
d) Surrender Benefits: There are no surrender benefits
under this plan.
43
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 44/77
2. Frequency of premium payment: The policyholder can choose to pay by a single premium or
yearly, half-yearly or quarterly mode of payment. The frequency
of premium payment can be altered during the term of the
contract. Please note that a regular premium policy cannot be
changed to a single premium mode during the term of the
contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. A lapsed policy can be reinstated within one year
from the date of lapse only.
5.Minimum premium:
The following are the minimum premium conditions
under the Term Assurance Plan.
Single Premium Rs. 2000
Annual mode Rs. 1500
Half yearly mode Rs. 800
Quarterly mode Rs. 450
There is no condition of maximum premium.
6.Other conditions:
Regular Premium Single Premium
44
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 45/77
Minimum Term 5 years 2 years
Maximum Term 30 years 15 years
Minimum Age at Entry 18 years 18 years
Maximum Age at Entry 60 years 60 years
Maximum Maturity Age 65 years 65 years
7.Policy loans:
Policy loans would not be available under the plan.
8.Life cover basis:
The Term Assurance Plan can be sold on a single life or joint life
first death basis.
9. Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
10. Special Rates for Women:Since women have a lesser mortality rate than men for the same
age, the premium rate charged fro women would be the rate
applicable to men three years younger.
45
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 46/77
5. Loan Cover Term Assurance Plan
Protection of Loans
Introduction
The Loan Cover Term Assurance Plan is a without profits decreasing
cover protection contract designed to protect the outstanding loans of
the life assured. The plan is designed to cover loans however the plan
will be granted only in case the client has sufficient income to back the
insurance.
Need for the Plan
Uncertainty is a part of life. In the event of death of the breadwinner
the dependents are put to a lot of financial difficulty as they lose the
source of income. The problem is compounded in case there are
outstanding loans. The Loan Cover Term Assurance Plan is designed to
cover outstanding loans at the least possible cost.
Features of the Loan Cover Term Assurance
Plan
The following are the features of the plan:
46
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 47/77
1.Benefits:
a) Death Benefits: Provided the policy is in force in the
event of death of the life assured during the term of thecontract the sum assured is paid.
b) Benefits on expiry of the cover: On expiry of the cover
nothing is payable as the Loan Cover Term Assurance is
designed for protection only.
c) Paid up Benefits : There are no paid up benefits under
this plan.
d) Surrender Benefits: There are no surrender benefitsunder this plan.
2. Frequency of premium payment:
The policyholder can choose to pay by a single premium or
yearly, half-yearly or quarterly mode of payment. The frequency
of premium payment can be altered during the term of the
contract.
3. Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4. Lapsation:
In the event the premium is not paid within the days of grace the
policy lapses. A lapsed policy can be reinstated within one year
from the date of lapse only.
47
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 48/77
5.Minimum premium:
The following are the minimum premium conditions
under the Loan Cover Term Assurance Plan.
Single Premium Rs. 2000
Annual mode Rs. 1500
Half yearly mode Rs. 800
Quarterly mode Rs. 450
There is no condition of maximum premium.
48
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 49/77
6.Other conditions:
Regular Premium Single
Premium
Minimum Term 5 years 2 years
Maximum Term 30 years 15 years
Minimum Age at Entry 18 years 18 years
Maximum Age at Entry 60 years 60 years
Maximum Maturity Age 65 years 65 years
7.Policy loans:
Policy loans would not be available under the plan.
8.Life cover basis:
The Term Assurance Plan can be sold on a single life or joint life
first death basis.
9. Tax benefits:
The premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961. The claim benefits would
also not be taxable as per section 1010 D of the Income Tax Act
1961.
49
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 50/77
10. Special Rates for Women:
Since women have a lesser mortality rate than men for the same
age, the premium rate charged fro women would be the rate
applicable to men three years younger.
Important
Although the plan is named as Loan Cover Term Assurance Plan the
plan is basically a decreasing cover term assurance. The plan is not
linked to a loan and the client can choose to purchase this plan even in
case he does not have a loan. The sum assured would decrease at a
predetermined rate and is not linked to the decrease in the loan
amount. Care has been taken to ensure that the sum assured would be
sufficient to pay most of the loans. The plan does not guarantee
payment of the outstanding loan.
6. Single Premium Whole of Life Insurance
Plan
Plan designed to give long-term real growth
Introduction
50
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 51/77
The Single Premium Whole of Life Insurance Plan is a with profits
investment contract which aims to give long tem real growth to the
client by investing the funds as per the IRDA guidelines and reducing
claims and costs. The aim of the plan is to generate long term real
growth, providing guarantees at specific times during the term of the
contract.
Need for the Plan
The Single Premium Whole of Life Insurance Plan is designed to help
the client in long-term investment. It is therefore important to
understand the problems associated with investments to sell the planbetter.
However all investment is associated with risk. The higher the risk one
takes, the better the chances of getting a better return. Investment is
all about taking risks.
Various investment instruments are available in the market and the
client has to choose from the investment option available. This
investment instruments are designed to meet short-term, medium-
term and long-term objectives. If an instrument is designed for a short
term the same is not suitable for achieving a long term
objectives. This is because the instrument would terminate in the short
term and the client would be exposed to reinvestment risks. Long-term
investments designed to provide real growth is a solution to the long-
term needs.
The client can choose to invest directly where the risks are high and
the potential of a higher return also exists. However he would have the
disadvantage of being a small investor, who does not have the
expertise in the market, does not have large funds and is not able to
51
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 52/77
diversify. The mutual funds help the client in this area and pool the
investment of a group of small investors providing them with expertise
in investment, diversification and better returns.
However investment in mutual fund requires a strategy and the returns
depend on the time of entry and exit from the fund. Two investors may
make different kinds of return due to the different strategies they
follow. The Single Premium Whole of Life Insurance Plan is designed to
remove this problem of the investors by giving insurance in the form of
guarantees on death and at specific time intervals so that the returns
at these guaranteed periods do not depend on the market conditions.
These guarantees in long-term investment are very valuable and sincethe product is a whole of life one, the client can continue with the
investment till death.
52
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 53/77
Features of the Single Premium Whole of Life
Insurance Plan
The following are the features of the plan:
1. Benefits:
a) Death Benefits: In the event of death of the life assured
during the term of the contract, and provided all the
premiums are paid till the time of the death of the life
assured, the sum assured, together with the (compound)
reversionary bonus and the terminal bonuses (if any) would
be paid to the beneficiary. The policy would terminate on
payment of the death benefit.
b) Maturity Benefits: The Single Premium Whole of Life
Insurance Plan is a whole life plan and therefore does not
have a maturity date.
c) Paid up Benefits: This is not applicable to the Single
Premium Whole of Life Insurance Plan since the plan is a
single premium plan.
d) Minimum Guaranteed Surrender Benefits: On
surrender of the policy after a period of three years from
the date of commencement, there is and guarantee thatthe minimum surrender value would be equal to 50% of
the premium paid, except in the four weeks immediately
following the completion of the 10th minimum guaranteed
surrender value would be equal to the sum assured.
53
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 54/77
2.Frequency of premium payment:
The policyholder has to pay the premium by way of a single
premium only. The single premium payable is equal to 95% of
the sum assured chosen.
3.Premium:
The following are the premium conditions under the
Single Premium Whole of Life Insurance Plan:
Minimum Premium Rs. 23,750
Maximum Premium Rs. 47, 50,000
4.Other conditions:
Minimum Sum Assured Rs. 25,000
Maximum Sum AssuredRs. 50,00,000
Minimum Age at Entry 18 years
Maximum Age at Entry 70 years
5.Policy loans:
Policy loans would be available under the plan once the policy
acquires a surrender value. The policy loans would be to the
extent of 90% of the surrender value. The company would quote
the terms and conditions of the policy loans at the time of
granting the loans and the same would vary from time to time.
6.Life cover basis:
The Single Premium Whole of Life Insurance Plan can be offered
on a single life basis only.
7. Tax Benefits:
54
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 55/77
The Premium paid under the plan qualifies for tax rebate under
section 88 of the Income Tax Act 1961.
The plan is also approved under the provisions of section 80 DD
of the Income Tax Act 1961.
Positioning of the Single Premium Whole of Life Insurance Plan
The Single Premium Whole of Life Insurance Plan can be positioned as
along term investment vehicle with guarantees at specific dates. The
Plan is suited to help in providing a fund for long term financial needs.
The philosophy and practices of the company can help in building the
policy values for the client and hence positioning the company is also
important in the sale of the Single Premium Whole of Life Insurance
Plan.
7. Personal Pension Plan
Savings for a better retirement
Introduction
The Personal Pension Plan is a with profits deferred pension contract
which aims to give good pension benefits to the client by helping the
client build a retirement fund. The aim of the plan is to build good fund
values so that the client can enjoy a better pension on retirement.
Need for the Plan
55
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 56/77
Income in retirement is becoming more and more important. With the
breakup of the joint family system and the increase in longevity, it is
becoming more and more important to provide for retirement. The fall
in the interest rates and the uncertainty prevailing in the market make
pensions more attractive. Pension can provide a guaranteed income till
death and hence there is a renewed interest in pension schemes in the
recent years.
It is important that the person plans for his retirement. The planning
should start early so that the person contributes lesser amounts and
there is time for the fund to grow. For retirement there is only one
option for the person and that is to save. One cannot raise a loan for
retirement.
56
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 57/77
There are various instruments of savings and investment,
which the client can use to provide for his retirement. A
deferred pension plan has the following advantages:
I. The deferred pension plan can be issued for long terms so that
the single instrument covers the retirement need of the client.
II. The deferred pension plan automatically vests in the life assured
on the date of vesting. This is an advantage as the likelihood that
the fund would be used for some other purposes is minimized
and fund would be used only for retirement.
III. Special tax benefits are available for investment in deferred
pension plans.
Features of the Personal Pension Plan
The following are the features of the plan:
1. Benefits:a) Death Benefits : In the event of death of the life assured
during the term of the contract the following amount would
be payable:
i. In the event of the death of the life assured in the
first year then 90% of the premium paid would be
payable in case of single premium policies and 80%of the premium paid would be payable in case of
regular premium policies.
ii. In the event of the life assured after the first year
57
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 58/77
Sum assured plus reversionary bonus
attached would be payable under single
premium policies.
Lower of the sum assured plus reversionary
bonus and return of premium paid with
interest of 8% is payable, under regular
premium policies.
b) Benefits at Vesting: On the vesting date, provided the
policy is in full force the Notional Cash Value (NCV) would
be used to pay the following:
i. Cash lump sum to the extent permitted by the
regulations at the time of vesting. The policyholder
may choose either to take the cash lump sum or use
the full NCV to purchase an annuity.
ii. Purchase of an immediate annuity as per the choice
of the policyholder. In case the policyholder has
opted for the cash lump sum the balance NCV would
be used to purchase the annuity. In case the
policyholder has not opted for the cash lump sum
then the full NCV would be used to purchase the
annuity.
c) Paid up Benefits: In case the policyholder discontinues
payment of premium after the premiums are paid for at
58
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 59/77
least three years, the policy would be reduced to a paid-up
policy. The reduced paid up benefits would form the
Notional Cash Value on the date of vesting of the policy.
The paid up policy will not participate in future bonuses.
d) Surrender Benefits : The policyholder can surrender the
policy at any time. In case the policyholder chooses to
surrender the policy before the payment of three years
premium the surrender value would be equal to zero and
nothing would be payable. In case the policyholder chooses
to surrender after three years, he would be entitled for a
surrender value.
2.Frequency of premium payment:
The policyholder can choose to pay single premium or regular
premium by yearly, half-yearly or quarterly mode. The frequency
of premium payment can be altered during the term of the
contract.
3.Days of grace:
The premium is payable in advance and should be paid within
the days of grace. The days of grace allowed under the plan are
15 days from the due date of premium. In case the days of grace
end on a holiday then the premium has to be paid on the next
working day.
4.Lapsation:
59
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 60/77
In the event the premium is not paid within the days of grace the
policy lapses. The policy would be automatically reduced to a
paid up policy in case premiums have been paid for at least
three years. In case premiums are not paid for three years the
policy would lapse without value.
A lapsed policy can be reinstated within one year from the date
of lapse only.
5.Minimum premium:
The following are the minimum premium conditions under the
Personal Pension Plan.
Single Premium Rs. 25000
Annual mode Rs. 2400
Half yearly mode Rs. 1300
Quarterly mode Rs. 700
6.Maximum premium:
The following are the maximum premium conditions under the
Personal Pension Plan.
Single Premium Rs. 50, 00,000
Annual mode Rs. 50, 00,000
Half yearly mode Rs. 25, 00,000
Quarterly mode Rs. 12, 50,000
7. Other conditions:
Minimum Term 10 years
Maximum Term 40 years
Minimum Age at Entry 18 years
60
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 61/77
Maximum Age at Entry 60 years
Minimum Vesting Age 50 years
Maximum Vesting Age 70 years
The policyholder has the choice to choose any term between 10
to 40 years, subject to the minimum and maximum vesting age.
8.Policy loans:
Policy loans would not be available under the plan.
9.Life cover basis:
The Personal Pension Plan can be offered on a single life basis
only.
10. Tax benefits:
The premium paid under the plan qualifies for tax deductions
under section 80CCC of the Income Tax Act 1961.
The cash lump sum received at the date of vesting is tax free
under section 1010a (iii) of the Income Tax Act 1961.
Surrender value during the deferment period would be taxable as
per section 80CCC of the Income Tax Act. Similarly pensions
received after vesting would be taxable in the hands of the life
assured.
61
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 62/77
SWOT ANALYSIS
Strengths:
Weakness:
Frequent Job Rotation
Less number of advertisements
Hidden Charges
Opportunities:
Threats:
Country Wide Recognition
Need Base Analysis Same Standard Services in all
Branches
Fair Deal in all Transactions
Customers Centric Approach
Infrastructure
Scope in Jaipur as it is in the developing phase
Only 25% of insurable people have anyinsurance
Higher possibility of growth in Indian shareMarket
LIC’s Brand Name
People of Jaipur prefer short-term investment ratherthan in insurance
Upcoming private insurance companies.
62
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 63/77
Strategy
Tata AIG purpose is to bring prosperity and peace of mind to our customers. We will do
this by realising our vision: One Tata AIG, twice the value. By working together across
our businesses, we will optimise our performance in the global marketplace and
maximise the value we can generate for all our stakeholders.
Business strategy by Tata AIG life insurance
Key performance indicators
The Companies Act requires that a fair review of the business contains financial and,
where applicable, non-financial key performance indicators (KPIs). We consider that our
financial KPIs are those that communicate to the members the financial performance and
strength of the group as a whole. These KPIs comprise:
• Earnings per share
• Proposed ordinary dividend per share and dividend cover*
• Group operating profit before tax**
• Long-term savings new business sales
• Return equity shareholders' capital
Management also use a variety of Other Performance Indicators (OPIs) in both running
and assessing the performance of individual business segments and units, rather than the
group as a whole. OPIs include measures such as present value of new business
premiums, new business margins, combined operating ratio and underwriting profit.
63
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 64/77
Financial analysis
2008
£m
2007 ˜
£m
Worldwide long-term savings new
business sales* ^
40,278 39,705
Worldwide general insurance and health
business net written premiums**
11,137 11,137
Total sales 51,415 50,274
Consolidated profit and loss account
Operating profit £m £m
Life Market Consistent Embedded Value
(MCEV) operating earnings ^
2,801 2,544
Fund management - MCEV basis ̂ 42 90
General insurance and health 1,198 1,021
Other
Other operations and regional costs (163) (70)
Corporate centre (141) (157)
Group debt costs and other interest 379 363
MCEV Operating profit before tax
attributable to shareholders' profits^
3,358 3,065
Adjustment to report the profits of our
long-term insurance, fund management
and other operations on an IFRS basis
1,061 849
IFRS Operating profit before tax
attributable to shareholders' profits
2,297 2,216
Adjusted for the following:
Investment return variances and
economic assumption changes on long-
term business
1,631 15
Short-term fluctuation in return on
investments backing general insurance
and health business
819 184
Economic assumption changes on 94 2
64
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 65/77
general insurance and health business
Impairment of goodwill 66 10
Amortisation and impairment of
intangibles
117 103
Integration and restructuring costs 326 153)
Exceptional items (551) -Loss) / Profit before tax attributable
to shareholders'
1,300 1,832
Tax 415 334
(Loss) / Profit for the year 885 1,498
Minority interests 30 178
Preference dividends 17) 17)
Coupon payment on Direct Capital
Instrument, net of tax
40 37
Profit after minority interests,
preference dividends and DCI
972 1,266
Consolidated shareholders' funds 14,446 15,931
Capital and reserves – IFRS basis 11,252 13,146
Equity attributable to shareholders of
TATA AIG plc – IFRS basis
11,252 13,146
Direct capital instrument 990 990
Minority interests 2,204 1,795
Shareholders' funds – IFRS basis 14,446 15,931
Capital and reserves – MCEV basis 12,481 12,656
Additional retained profit on an MCEV
basis
431 7,342
Equity attributable to shareholders of
TATA AIG plc – MCEV basis
12,912 19,998
Direct capital instrument and preference
dividends
1,190 1,190
Minority interests 3,013 2,501
Shareholders' funds – MCEV basis 17,115 23,689
Other financial information
Ordinary dividends declared and charged
in the year
902 801
Total dividend per share 33.00p 33.00p
Net asset value per ordinary share –
MCEV basis
486p 763
Return on equity shareholders' funds ̂ 11.0% 10.4%
65
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 66/77
Earnings per share
Basic – MCEV operating profit after tax
basis ^
83.4p 70.4p
Basic – IFRS operating profit after tax
basis (a)
62.9p 52.8p
Basic – total IFRS return (a) (36.8)p 48.9p
On an MCEV basis for 2008 and 2007. Prior years presented on an EEV basis.
~ 2007 comparatives have been restated for change in approach to reserving for latent
claims.
* Present value of new business premiums plus investment sales.
**From continuing operations.
a. Basic earning per ordinary share are shown. No figures have been provided for diluted
earnings per share.
6. Fianancial marketFianancial market can be defined as tailoring products and programs or services to theneeds and wants of individuals and groups, including local marketing and individual
marketing. The term local marketing refers to tailoring brands and promotions to the
needs and want of local groups, such as cities and neighborhoods. Individual marketing is
tailoring the product or service to one individual, also known as "one-to-one marketing".
6.1 Fianancial market in today’s marketFianancial market”, takes into cognizance the growing, observable fact that today s
customers distinguish themselves as having unique desires and interests and they demand
that businesses understand and meet those personal needs. To satisfy these customers,major marketers must swing from casting a wide marketing net over a vast crowd to
selling to millions of individual customers. This shift from mass to micro marketing
presents both opportunities and challenges to market researchers. In their efforts tomarket on a one-to-one basis, market-driven companies must quickly make the move
from creative, right-brain strategies to analytical, left-brain strategies. One such right
brain strategy is product placement. Thanks to a growing use of personal video recorders
and larger placement deals, marketers move from traditional advertising to alternativemedia. Due to TV reality shows etc, the explosion of reality TV programs has played a
big role in product placement growth in TV, according to PQ Media. The success of such
shows as Survivor and The Apprentice proves the value of product placement as anadditional component to the declining popularity of the 30-second spot, the report states.
If done correctly, product placement gets consumers thinking about trying new products.
66
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 67/77
Like the product placement strategy for making consumers sit up and notice your
product, this book on Micro marketing – Concepts and Cases, attempts to explore other
right brain strategies as well. The key to effective advertising and promotions is aseamless communication/message. There should not be a discordant note anywhere. This
is difficult to achieve and is a challenge to Organizations worldwide. It is about
synchronizing the business context, the customer context, the internal context, and theexternal context pertinent to a particular Company/Organization.
67
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 68/77
Generation of insurance
There are 3 ways how TATA AIG get insurance
TATA AIG
Bank tie up DSF(Agent) Direct (Call
center)
1. Bank tie up – TATA AIG life insurance is having a tie up with some of the banks
which help them to get insurance. TATA AIG life insurance provides them
insurance.eg. Punjab and sindh bank.
2. DSF(Agent) - agents are the people who work for the company and bring
insurance for the company. Major part of insurance is generated by these people
only. India largest insurance company LIC is pioneer of this model they are the
people who are running this model successfully and they are market leader in
insurance.
3. Direct (call center) – This new marketing phenomena applied by most of the
insurance company in these days. Insurance companybring the list of bsnl
telephone number and they randomly call people and try to convince people to
purchase insurance. Some of people get ready to purchase insurance and this waycompany sell their insurance
9 Why insurance is required
Two type of losses are there for the family when they loss a family member
1 Emotional loss to the family
68
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 69/77
2Financial loss
Emotional loss
This loss is due to the death of family member or because of absence of that
person. Kind this kind of loss cannot be covered by any insurance company.
Financial loss
The person who has been passed in some accident or disease might have some earning
and he or she was going to earn till his or her survival so this thing cause financial loss to
the family to cover these kind of loss insurance companies are there. for covering this
financial loss insurance companies are helping the family.
69
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 70/77
Targeting- we have to target a group of people who are having a good disposable
income means we have to target officers. in layman’s term we have to target the
people who are having a salary of more than 20000.
Approach- during our training we have been taught that how we have to
approach people. First of all we have to go to any government office and have to tell
them that we are management students and doing our project on insurance sectore and
we are comparing the insurance policies of government employees and private
sectore employees. in this way we have to find out who is the people willing to buy
any insurance and how much they are ready to invest and have to submit this to
company. On the basis of this company finalize the leads and TATA AIG’s
relationship officer contacts them. This Is the way we was approaching the people.
This was our questionnaire on which basis we have to generate the leads. It was
possible for me to reach 200 people in the span of 45 days.
Name
Address
Married yes no Child Age
Phone no
Q1 Do you think life insurance is important?
Yes No
Q2 how much insurance do you have?
Yes No
Q3 if you are married have you planned for your child’s education /marriage?
Yes No
Q4 Have you done your retirement plan?
Yes NoQ5 If we will suggest you a good plan for your child/retirement/short term investment
will you be interested?
Q6 if yes, how much you will you be comfortably save for your child/retirement/short
term investment Per year?
70
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 71/77
10. Analysis of questionnaire
Q1 Do you think life insurance is important?
Yes no
Ans
Q2 which companies insurance do you have?
This pie chart is based on market data of insurance in the year 2007-08. Thepie chart
given below is on the basis of our survey.
71
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 72/77
Q3 if you are married have you planned for your child’s education /marriage?
Q4 Have you done your retirement plan?
Ans. Out of 200 people only 10 people was having a retirement plan and all the people
was having the same reason for not having retirement plan was that they was government
72
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 73/77
employees ,after their retirement they will be getting pension. They believe that their
future is secure this was the reason why they people was not having retirement plans.
Q5 If we will suggest you a good plan for your child/retirement/short term investment
will you be interested?
Q6 if yes, how much you will you be comfortably save for your child/retirement/short
term investment Per year?
Ans. Not specified by people, they were saying this thing is dependent on the plan.
73
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 74/77
12. Findings
Insurance sectored is highly competitive sectored with more than 15 players and
LIC is leading the market with 64% and the reason is that they is having a huge
network of agents.
TATA AIG is having almost a 2% insurance market in Jaipur to improve their
market they need to increase the number of agents.
Government employees are not interested in retirement plans because they are.
Security in the foam of pensions.
80% of Government employees are having some or another kind of policy.
13. Learning’s
1. Insurance is very competitive market- insurance sector is one the most
competitive sector in this day due to the presence of more than fifteen players
in the market.LIC is undoubtedly market leader with the market share of more
than 60%.
2. Dealing with people- The most important thing which I have learn with
TATA AIG is that how to deal with people because my work was like that I
have to contact government employees and find the opportunity that they are
going to buy any policy or not.
3. Behavior in government offices- In government offices approaching the
people is very difficult. Some of the times people are really very busy so
sometimes they are not having the time to listen you.
74
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 75/77
4. Insurance is a unknown psychological fear- When you dealing with people
and telling them that you are from insurance sector people get afraid they
want to save them self from you.
14. Limitations
I. Company was having interest in getting leads.
II. Covering all the government offices was very difficult because before entering in
some of the office you have to take permission from higher authority.
75
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 76/77
14. Bibliography
www.tata-aig.comwww.google.com
www.yahoo.com
76
8/7/2019 krishan, akhtar, janardan,ravindra ,raviprakash, yogendra
http://slidepdf.com/reader/full/krishan-akhtar-janardanravindra-raviprakash-yogendra 77/77