project by mohit

8/7/2019 project by mohit

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Accman Institute of Management

1

UNIT LINKEDINSURANCE PLANS

A PROJECT SUBMITTED IN FULFILLMENT FOR

AWARD OF DEGREE

OF

POST GRADUATE DEPLOMA IN MANAGEMENT

Submitted By

MOHIT KHURANA

PGDM (2009-2011)

ROLL NO-40021

Prof. PREETANJAN KAUR

Project Mentor


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DECLARATION

I hereby declare that the project entitled Unit Linked Insurance Plans(ULIPs) submitted for the Post Graduate Diploma in Management Degree ismy original work and the project has not formed the basis for the award of anydegree, associate ship, fellowship or any other similar titles.

Name of the Student :Signature of the Student:Place:Date:


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TABLE OF CONTENTS

S.No. Particulars Page

No.1 Declaration 2

2 Acknowledgement 3

3 Preface 44 Introduction to Insurance 6-8

5 Life Insurance Companies In India 9

6 Market Share of Insurance Companies 2005-06 2009-10 1011

7 Growth Rate of Insurance Sector In India 128 Objectives of Study 13

9 Research Methodology 14

10 Unit Linked Insurance Plans Introduction Meaning ULIPs Versus Endowment ULIPs & You Expenses in ULIPs How ULIPs Manage Money

Steps for ULIPs Selection

151617-18192021

22-2311 Growth Rate of ULIPs 24

12 Comparative Analysis Of ULIPs 25-28

13 Fund Performance 29

14 Data Analysis & Findings 30

15 Conclusion 31

16 Recommendation 32

17 Limitations 33

18 Bibliography 34


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PREFACE

Project Title : Customer Preference ofULIPs.

Duration : 8 weeks.

Objectives of Project :

This project helps to improve Customers Interest against Unit Linked

Insurance Plans. And how the customers Looking upon the insurance

products.

My Role

y Selling of Insurancey Leaning Customer Behavioury Influence of Customery Interaction with Customer.

Methods of Selling Insurance:-

Direct Method of Sale. Indirect Method of Sale.

Techniques Adopted for Data Collection

Primary method Secondary method


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6

INTRODUCTION TO INSURANCE

Today, only one business, which affects all walks of life, is insurance business.

Thats why insurance industry occupies a very important place among financialservices operative in the world. Owing to growing complexity of life, trade andcommerce, individuals as well as business firms are turning to insurance tomanage various risks. Therefore a proper knowledge of what insurance is andwhat purpose does it serve to individual or an organization is thereforenecessary. The future is never certain.

So its rightly said, AN INSURANCE POLICY IN HAND KEEPS THETENSION AWAY.

Insurance, essentially, is an arrangement where the losses experienced by a feware extended over several who are exposed to similar risks. Insurance is aprotection against financial losses arising on the happening of an unexpectedevent. Insurance companies collect premium to provide security for the purpose.In simple words it is spreading of risks amongst many people.

i) LIFE INSURANCE:It is a fundamental part of a sound financial plan which helps to insure

your loved ones.

Childrens education &marriage Wealth creation

Dying to soon Living death living too long

(Life insurance only instrument that takes care of these three probabilities andtwo priorities.)


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ii) Benefits:1) SAVINGS---For unforeseen circumstances.2) EDUCATION----For childs education and for higher studies.3) RETIREMENT- Facilitates adequate savings for worry free retired life.

iii) Insurance ------------a Flash back:The earliest transaction of insurance as practiced today can be traced back

to the 14th

century AD. The business of insurance started with marine businessby Traders who used to gather in the Lloyds coffee house in London, whereinthey had agreed to insure their ships in transit. The 1st Life Insurance Policywas issued on 18th June, 1583, on the life of William Gibbons for a period of12months. Life Insurance in its current form came in India from the UK, with theestablishment of British firm, Oriental Life insurance Company, in 1818 .The1st Indian insurance company was the Bombay Mutual Assurance Society Ltd ,formed in 1870. By the year 1956, when the life insurance business wasnationalized and the Life .Insurance Corporation Of India ltd (LIC) was formedon 1st September, 1956 and there were 245 companies existing at that time inIndia.

IV)INSURANCE CLASSIFICATION

o Lifeo Termo Endowmento Unit-linkedo Money-back

V) INSURANCE INDUSTRY POTENTIAL

1. Asia is amongst the worlds largest insurance markets contributing nearly39% of global insurance business.

2. The Life Insurance Industry has grown by 37% p.a. over the last 5 yearsand by about 62% in the first eleven months of 2009 -11.

3. Global Life Insurance Market: $1,521 billion, Global N on-Life InsuranceMarket: $922 billion.

4. India is 23rd in insurance business with 0.41% share.


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5. Out of one billion people in India, only 35 million people are covered byinsurance.

6. Indias life insurance premium as a percentage of GDP is just 1.8%.7. Indian insurance market is set to touch $50 billion by 2010, on theassumption of a 7% growth in GDP


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LIFE INSURANCE COMPANIES IN INDIA

Life Insurance Corporation of IndiaPrivate Players

Tata AIG Life Insurance Company Ltd Kotak Mahindra Old Mutual Life Insurance Ltd Birla Sun Life Insurance ICICI Prudential Life Insurance Aviva Life Insurance Allianz Bajaj Max New York Life Insurance Bharti Axa Life Insurance SBI Life Insurance Reliance Life Insurance ING Vysya Life Insurance Sahara India Life Insurance HDFC Standard Life Insurance Shriram Group


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Market Share of Insurance Companies for 5 years.

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

LIC 87% 78% 75% 72% 62%

Pri ate Player 13% 22% 29% 32% 38%

MARKET SHARE OF INDIAN INSURANCE PLAYERS

M t Share of publi sector and Pri ate sector Insurance Companies for

2005-2006

Market share

87%

%

L C

P

v

e


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MARKET SHARE OF INDIAN INSURANCE PLAYERS

Market Share of public sector and Pri ate sector Insurance Companies for 2009-

20 0

Market share

62%

38%

L C

P v esec


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Growth Rate of Insurance Sector in India

The annual growth rate of 15-20% and the largest number of life insurance

policies in force, the potential of the Indian insurance industry is huge. Total

value of the Indian insurance market is estimated at Rs. 450 billion (US$10

billion). According to government sources, the insurance and banking services

contribution to the country's gross domestic product (GDP) is 7% out of which

the gross premium collection forms a significant part. The funds available with

the state-owned Life Insurance Corporation (LIC) for investments8%ofGDP. .

Till date, only 20% of the total insurable population of India is covered under

various life insurance schemes, the penetration rates of health and other non -life

insurances in India is also well below the international level. These facts

indicate the of immense growth potential of the insurance sector.

Indian insurance sector 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 of140% as a result of aggressive marketing

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

insurance companies.

Shri Bansal said that in insurance sector though the growth in recent years has

been significant, India is far behind the world averages and ranks 78th in terms

of insurance density and 54 th in terms of insurance penetration. The world

averages are US $ 469.6 in terms of insurance density and 8.06% in terms of

insurance penetration. Against this, insurance density was US$ 19.70 and

insurance penetration was 3.17% in India for the year 2003. However, these two

indices have increased following the opening of this sector.

FDI is now permitted in 21 activities through the auto-route. These include FDI

in development of township, housing, built-up infrastructure and construction

development projects, exploration and mining of diamonds and precious stones

and insurance.


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OBJECTIVE OF THE STUDY

A project report on Insurance is carried out on the basis of few objectives. Someof them are:

To understand how the customer looking at ULIPs. To encourage the expansion of capital markets; To accelerate the intermediation competence in the insurance sector,

and to release latest out new schemes and services;

To contribute to all-inclusive sectoral reforms To facilitate and improve the corporate administration and introduce

sound commercial structure

To sustain health modifications and private health insurance. To enable the investors to take a close view of the fund performance

over the years

To motivate the selling of insurance schemes To monitor the insurance schemes transactions


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RESEARCH METHODOLOGY

Research design Descriptive Data sources- Primary data and Secondary data Research approach Face to Face interview, observation, individual depth interview Research instrument questionnaire.

Data Collection:

Primary Data:1) Use of a Questionnaire for carrying out a survey2) Presentation given by the Company Executive Meeting.3) Data explaining the working of the ULIPs.

Secondary Data:1) Books

2) Newspapers

3) Magazines

4) Newsletter

5) Internet

6) Television7) Booklet

8) Policy Brochures

This project is about studying the insurance industry which is on the boom.

The introductory part contains the meaning of insurance, its evolution, some,

Statistics of Indian insurance Industry.

The project deals the comprehensive analysis of the ULIP schemes, what isULIP all about, its NAV performance, the Growth, performance of the policies

since their inception, its working, its popularity and a market survey.

The project contains various graphs, tables and questionnaire to further.

Elaborate on the explanations.


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UNIT LINKED INSURANCE PLANS

ULIPS also known as UNBUNBLED, VARIABLE INSURANCE PLANS has possibly been the single largest innovation in the field of life insurance in the

past several decades. It wasnt too long back, when the good old endowmentplan was the preferred way to insure oneself against an eventuality and to setaside some savings to meet ones financial objectives. Then insurance wasthrown open to the private sector. The result was the launch of a wide variety ofinsurance plans, including the ULIPs. Two factors were responsible for theadvent of ULIPs on the domestic insurance horizon.First was the arrival of private insurance companies o n the domestic scene.ULIPs were one of the most significant innovations introduced by privateinsurers.The other factor that saw investors take to ULIPs was the decline of assured

return endowment plans. These were the two factors most instrumental inmarking the arrival of ULIPs, but another factor that has helped their cause is abooming stock market. While this now appears as one of the primary reasonsfor their popularity, it is believed that ULIPs have some fundamental positiveslike enhanced flexibility and merging of investment and insurance in a singleentity that have really endeared them to individuals. ULIPs came to play in the1960s and became very popular in Western Europe and Americas.

Unit-linked insurance was introduced in the 1950s in the U.K. not by the lifeinsurance industry but by unit trusts. Life insurance companies entered the field

only in the 1980s. Between 1990 and 1999, new premium income under lifeinsurance (both linked and non-linked) grew at an average rate of 17 per cent,an impressive performance in a country with a high level of insurancepenetration

A ULIP is a market-linked insurance plan. The difference between a ULIP and

other insurance plans is the way in which the premium money is invested.

Premium from, say, an endowment plan, is invested primarily in risk-free

instruments like government securities and AAA rated corporate paper, while

ULIP premiums can be invested in stock markets in addition to corporate bondsand government securities. So what else apart from this reason makes ULIPs so

attractive to the individual? Here, we have explored some reasons, which have

made ULIPs so irresistible.


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MEANING OF ULIPS

A policy, which provides for life insurance where the policy value at any timevaries according to the value of the underlying assets at the time. ULIP is lifeinsurance solution that provides for the benefits of protection and flexibility ininvestment. The investment is denoted as units and is represented by the valuethat it has attained called as Net Asset Value (NAV). In order to offset theerosion of money, ULIPS are introduced. The Sum assured is expressed in unitswhose price is linked to an inflation related index.

In todays times, ULIP provides solutions for insurance planning, financialneeds, financial planning for childrens future and retirement planning. Featuresof ULIPs distinguish itself through the multiple benefits that it provides to thecustomer which are as follows,

Life protection Investment and Savings Flexibility Adjustable Life Cover Investment Options Transparency Options to take additional cover against- Death due to accident-

Disability- Critical

Illness- Surgeries

Liquidity Tax benefits.

.

Key features of ULIPs: Combination of investment + insurance. Long-term, systematic and goal-based investment. Automatic asset allocation/Diversification in several asset classes. Flexibility and transparency. Switching funds at no extra cost.Tax benefits under Section 80c of the Income Tax Act.


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ULIPS VERSUS ENDOWMENT

The following points help us to get a better idea how ULIPs differ fromTraditional (Endowment Plans)

1)SUM ASSURED:This is the most fundamental difference between ULIPs and the traditional plans. In case of endowment the agent will ask you HOW MUCHINSURANCE COVER DO YOU NEED? & the premium is calculated as perthe estimated sum assured. In case of ULIPs you are asked HOW MUCHPREMIUM CAN YOU PAY? & accordingly the Sum Assured is estimated.

2)INVESTMENTS:Endowment plans invest in Government Securities Corporate bonds Money market instruments

(No investment in the stock market)ULIPs invest in Equities Bonds G-secs

Money market.

3)FLEXIBILITY:In case of ULIPs the investor can choose the fund in which he wants toallocate his portfolio. He can go for pure Equity, or a combination of debtequity, depending on his requirements.The investor also has the option of switching from one fund to another.Usually Free switches are given during the year. This option is not available incase of Endowment.

4)TOP UP FACILITY:A top up is a onetime additional investment in the ULIP over and above theannual premium. This feature works well when you have a surplus that you arelooking to invest in a market linked avenue, rather than keeping in an FD orSavings account. This feature is not for Endowment.


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5)TRANSPARENCY:ULIPs are more transparent than Endowment Plans as their NAV is declaredeveryday . As a result you can know how your ULIP has performed.

In case of Endowment, the insurance company sends you an annual statement of bonus declared during the YEAR. , which gives us an idea how our plan is

performing.

6)LIQUIDITY:Since ULIPs investments are NAV based it is possible to withdraw a portion ofyour investments before maturity (after 3yrs lock in period is over).Thewithdrawal is possible provided the minimum fund value is maintained.In case of Endowment, you can only surrender your policy, but you wont get

everything that you have earned on your policy in terms of premium and bonus.The Surrender Value is much less than the Sum Assured and the Bonus is alsonot paid. THUS investing in ULIPs or in ENDOWMENT depends on thepersons RISK taking ability. A Risk Averse person may go for an Endowment,whereas a person who wants his corpus to appreciate and is ready to take riskscan go for ULIPs. Therefore we can say that investing in ULIPs is the best in agrowing Economy as compared to the TRADITIONAL PLANS.


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ULIPS AND YOU

IRDA has played a part in making ULIPs more investor friendly. Today moreindividuals are opting for ULIPs to create wealth over a long term. Over here Ihave outlined how ULIPs can help you to fulfil that responsibility.

1) If you are between 25 35 years of age

ULIPs help you to save for your childs education, marriage, planning for yourretirement and providing for your family in case of your absence.ULIPs Child plan ------------- --------for your childs education, marriage.ULIPs Endowment plan------------- for helping you to meet investmentobjectives like buying a house or setting up a business.ULIPs Pension plan-------------------for your retirement. A long term retirementplanning could be done with an Equity push, as it is necessary to build up a

strong corpus to face your rigorous retirement.

2)If you are between 35 45 years of ageIf you havent invested in ULIPs, it is not too late even now.You can opt for some ULIPs as mentioned earlier. Remember ,unlikeEndowment ,which gets really expensive at an advanced age, ULIPs because ofthe way they are , do not turn out to be expensive.

3)If you are above 45 years of ageIn this age bracket, you have to review your insurance cover, taking intoconsideration the changes of your life st yle, income needs, etc. By this timeyour ULIP pension plan must have matured, so now you can opt for an Annuity(immediate or deferred) depending on your need.


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EXPENSES IN ULIPs

Following expenses have to be incurred for ULIPs:a) Mortality charges: charged by the company to cover the risk of an eventuality

to an individual.

b) Administration Charges: charged by the company to cover the dailyexpenses, overhead costs, agents commission etc.

c) Fund Management charges: are levied by Insurance companies to cover theexpenses incurred by them in managing ULIP monies. Charges are high formanaging monies in an Equity Fund.

d) ULIP Fund switch charges: Such are borne by the individuals when theydecide to switch their money from one type of find to another.

e) Top up Charges: A certain % is deducted from the Top up amount to recoverthe expenses incurred on managing the same.

f) Cancellation/ Surrender charges: It is charged when an individual wishes tosurrender his ULIP policy.


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HOW ULIPS MANAGE MONEY

ULIPs are different from traditional plans. They invest their monies in Shares,bonds, G-secs, money market instruments in varied proportions.

Insurance companies usually maintain 4 types of funds.

Growth Fund: 100% equity

Balanced Fund: 60% equity, 40% debt.

Debt Fund: 100% debt.

Money Market Funds 100% MM 100% MM instruments for a period of oneYear

Risk

Returns

In case of equity, the risk and return is the highest, and vice verse for Moneymarket instruments. It is a principle of financial management, the higher therisks you take, the higher the return you get.

Money Mkt

Debt

Balance

Equity


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STEPS FORULIP SELECTION

The wide range of ULIPs available in the market might make it difficult fora consumer to choose the correct ULIP. However if you were to follow afew simple steps choosing the right ULIP can be a smooth process.

Understand the concept ofULIPs thoroughly:

Do your homework well and read as much as you can about ULIPs as youcan before investing. Read the literature available on ULIPs on the websites and brochures circulated by insurance companies. This will help youknow the benefits and structure of the ULIP.

Focus on your requirements and risk profile

Identify a plan that is best suited for you keeping in mind your riskappetite. In case you have a high -risk appetite, opt for a more aggressive

fund option (an option that invests higher percentage in equities) and viceversa.

Understand the peculiarities of the planUnderstand all the charges levied on the product over its tenure, not just theinitial charges. A complete charge structure would include the initialcharges, the fixed administrative charges, fund management charges andmortality charges.

Examine the performance of the planCompare the performance of the plan with benchmark indices like BSESensex or Nifty in the past two or three years to get a better idea about theperformance. Ensure that you can easily get information about your NAVwhen you need it. Thoroughly understand the flexibility and redemptionconditions of an ULIP.

Understand the charges levied on the product

Understand all the charges levied on the product over its tenure, not just theinitial charges. A complete charge structure would include the initialcharges, the fixed administrative charges, the fund management chargesand mortality charges. You not only need to understand the charges in the

first year but also through the term of the policy.

Compare ULIP products of different insurance companies

Compare products of different insurance companies in terms of premiumpayments, cost structure, performance of the scheme (equity as well as debt


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schemes), additional facilities such as top-up premium and free switch between different fund options, flexibility in terms of increasing ordecreasing protection, reporting structure and flexibility in redemption.

Know about the Company

Last but not least, insure with a brand you can trust to honor it commitmentand service in accordance to your requirements

Below is the table specifying the status, risk profile, people involved in view of

risk and loss and asset allocation in investing at equity fund like the U

I fund:

Status Risk profile Who stands to lose if

there is a loss

Asset

allocation

25yrs old -Single

They usually cantake on high risk

Only the personhimself

85%equities5%bonds10% liquidassets

30 years old Marriedwithout kids

They can still takeon high risks sincethey are still young

The person and hispartner

80% equities10% debt10% liquidassets

33years old Married andwith kids

Balance of taking inrisks is a must

The person with hispartner and children

60% equities20% debt20% liquid

assets

58years old they have kids

who are notdependent

People who cannottake risks

The person and hispartner, yet this is not

okay already becauseyou are retiring soon

30% equities20% debt

50% liquidassets


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GROWTH RATE OF ULIPS

THE NAVs taken over here only belong to The Equity Fund of the Policies.

(No other fund taken into consideration)

Growth rate of ULIPs (Equity Fund) of the 4 Insurance companies

Date of

InceptionNAV as on

inceptionRs

NAV as on

July,102010 Rs

Increase Growth %

LIC MARKET PLUS (181) 05.07.2006 10 14.20 4.20 42%

RelianceAIPMoneyMarket Fund

28-5-2007 10 12.66 2.66 26.6%

ICICI-balanced fund1-12-200

610 22.

612.

6126

%

TATA IAE Eq.fund 1-5-2006 10 17.4 7.4 17.4%

From the tabular compilation, it can be observed that the Equity Fund of thepolicies hasPerformed very well over the years.In case of Tata AIG--------the Equity Fund has grown up to 17.4% in 4 yearsfrom the date of inception.In case of ICICI--------the Equity Fund has grown up to 126% in 4 years from

the date of inception.Also Reliance Equity Fund has increased to 26.6% in 3 years.LIC has also done a good job with a growth up to 42% in 4 year.


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COMPARATIVE ANALYSIS OF ULIPS

It covers the comparison of ULIPs of 4 Insurance companies, how much growththe fund has showed since its Inception, returns for a period of one monthcompared with the market and tracking of the NAVs for a period of one month.

Initially ULIPs were started by a few private players way back in 2001 -02.But now almost every Insurance company has got ULIPS suiting the variedrequirements of the customers. If one has to choose among the ULIP schemesprovided by the insurance, it is necessary t o do a thorough comparison tochoose the right one for you.

ULIPs of 4 top performing insurance are taken for comparison.

1) TATA-AIG--------------------- Invest Assure II2) ICICI PRUDENTIAL--------- Life Time Super

3) RELIANCE LIFE ------------- Automatic Investment Plan4) LIC-------------------------------- Market Plus

Tata AIG Life

InsuranceCompany(Invest Assure II)

ICICI Prudential(Life Time Super)

Reliance Life

(AutomaticInvestment Plan)

Life Insurance

Corporation(Market Plus)

1) Policy objective :-

It is a unique, flexibleinsuranceplan which combinessecurity oflife with the opportunity toexploitthe upside of the marketreturns byinvesting in different kindsof

securities through multiplefundoptions.

A regular unit linked insurancepolicy that offers flexibleinvestment options along withthe benefit of life insurancecover, and an opportunity toearn potentially higher returnson your investment withoutsacrificingThe protection of your family.

The plan promisesenhanced lifecover withcomplete flexibilitytogain control overyourinvestments in tunewith yourfinancial needs and

your riskappetite.

The unique planpromises a safeand a tension freelife alongwith a goodamount of wealthcreation.

2) Eligilibility CriteriaMin age= 30 daysMax age= 45,55,65 years

Min age= 0Max.age=65 years

Min age= 0Max age= 65 years

Min age= 18 yearscomplete Maxage= 70 years (age


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nearer birthday)

3) Policy term :-

15, 20, 30 years 10- 75 years 40- 75 years 5-30 years

4)Premium

(Minimum):-

Rs 12000 pa Rs 18,000 pa Rs. 10000 pa Rs 5000 pa

5) Mode of Premium

Payment:-

Annually, half yearly,quarterly,Monthly.

Annually, half yearly, quarterly,Monthly.

Annually, halfyearly, quarterly,Monthly.

Annually, halfyearly, quarterly,Monthly.

6) Sum Assured

(Minimum,Maximum):-

It is the multiple of annualregular premium payable.

Min: Annual Premium* Term/2,Subject to a min of Rs.100, 000.

Min: Annualizedpremium for 5yrs or annualizedfor half of thepolicy term,whichever is theHighest. Max: nolimit

Min: Rs 50000 forregularpremiumMax: 20 times ofthe annualizedPremium.

7) Benefits :-

Maturity: Total Fund Value+ Top up if any. Death:Fund Value or Sum assuredwhichever is higherSum Assured is a multipleof regular premiumpayable.

Maturity: Total Fund Value +Top up if any.Death: Fund Value or Sumassured whichever is higher

Maturity: TotalFund Value +Top up if any.Death: Fund Valueor Sumassured whicheveris higher

Maturity: TotalFund Value +Top up if any.Death: Fund Valueor Sumassured whicheveris higher

8)Riders :-

Accidental Death Benefit

Accidental Death &Dismemberment Waiver ofpremium Pay or BenefitCritical Illness

Accident & Disability Benefit

Critical IllnessWaiver of premium

Accident Death &

Accidental Total &PermanentDisablementbenefit. Term lifeinsurance benefit

Accident Benefit

9)Fund options :-


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Option of choosing from 5funds or a combination ofthem.Equity fund: Equityshares. (100%)Income fund: Government

Bonds& Fixed IncomeInstruments. (100%)Aggressive growth fund:Equity (50-80%),Government Bonds (20-50%).Stable Growth Fund:GovernmentBonds (50-70%), Equity(30-50%)Short Term Fixed IncomeFund:Government securities &FixedIncome Instruments(100%),Money Market Instruments(20%).

We offer you 6 investmentfunds.Flexi Growth: Equity &RelatedSecurities Debt, Money Market& Cash (80-100%).

Maximiser: Equity & EquityRelated Securities Debt, MoneyMarket & Cash (25%-100%)Flexi Balanced: Equity &Related Securities Debt, MoneyMarket & Cash (60-100%)Balancer: Equity & EquityRelated Securities Debt, MoneyMarket & Cash (40-100%)Protector: Debt, Money MarketCash(100%)Preserver: Debt,Money Market& Cash (50-100%)

Tailor made andReadymadefunds.Tailor Made:Money Market(100%)

Gilt (100%)Corporate (100%)Equity (100%)Readymade:Fund AFund BFund C

Growth Fund:Debt (0-40%)Equity (60-80%)Balanced Fund:Debt (0-70%)Equity (30-50%)

Secured Fund:Debt (0-85%)Equity (15-35)Bond Fund: Debt(100%)Equity (0%)

10) Surrender option/

partial withdrawal

option :-Allowed only after 3 yearsfrom the date of issuance ofthe policy. Surrendercharges are a percentage ofregular premiumsFundvalue. Charge Applicablefor 6 yrs---20 or 30 yrpolicy Charge Applicablefor 5 yrs----15 yr policySurrender & partialwithdrawal availableMin of up to 4 partialwithdrawals available.

Allowed only after 3 years fromthe date of issuance of thepolicy and on payment of full 3yrs premium Partial withdrawalcan be doneUp to min of Rs 2000.Surrender & partial withdrawalavailable

Allowed only after3 years from thedate of issuance ofthe policy and onpayment of full 3yrs premium Thesurrender value orthe partialwithdrawal value isequal to the Fundvalue. Surrender &partial withdrawalavailable

Allowed only after3 years formthe date ofissuance of thepolicy and onpayment of full 3yrs premium.Partial withdrawalfacility is notavailable.

11) Free look Period :-

The policy can be cancelledwithina free look period of15days form

the date of receipt of thepolicy.The market value of theinvested

The policy can be cancelledwithin a free look period of15days from the date of receipt

of

the policy

The policy can becancelled within afree look period of15days from the dateof receipt of thepolicy. The marketvalue ofthe

The policy can becancelledwithin a free lookperiod of15days from thedate of receipt

of the policy


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premiums along with thechargespaid will be refunded aftermakingsome nominal deductions

invested premiumsalong withthe charges paidwill be refundedafter making somenominal

deductions

12) Grace Period: -

Here the grace periodprovided is for 31 days.

Nothing is mentioned about thegrace period in the policybrochure.

For regularpremiums the graceperiod is for 30days, For monthlypremiums graceperiod is for15days

Nothing ismentioned aboutthegrace period in thepolicybrochure.

13)Top Up premium:-

Minimum top up amount isRs10,000

Amt not mentioned Minimum top upamount is Rs2500

Minimum top upamount is Rs.1000

14)Tax Benefits:-

Premiums paid under thepolicy areeligible for tax benefit u/s80C of the Income TaxAct, 1961.Life insurance proceeds aretax freeU/s 10(10D).

Premiums paid under the policyare eligible for tax benefit u/s80C of the Income Tax Act,1961. Life insurance proceedsare taxfree u/s 10(10D)

Premiums paidunder the policyare eligible for taxbenefit u/s80C of the IncomeTax Act,1961.Life insuranceproceeds are taxfree u/s 10(10D).

Premiums paidunder the policyare eligible for taxbenefit u/s80C of the IncomeTax Act.Life insuranceproceeds are taxfree u/s 10(10D).


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FUND PERFORMANCE

(Only of Equity Fund)Period: 1month

From 01th June, 2010--------01th July, 2010

NAVs of the Equity Fund (Rs)

Reliance -GYP ICICI-Maxi.fund TATA-GPPEquity Fund

LIC-FPG fund

1-june-2010 13.13 62.05 31.08 21.92

2 13.03 62.67 31.35 22.01

3 13.21 63.74 31.09 22.33

4 13.27 62.84 32.02 22.38

7 13.06 62.49 31.46 22.12

8 13 63.04 31.28 22

9 13.08 63.97 31.46 22.08

10 13.26 64.39 32.07 22.3111 13.33 65.11 32.49 22.53

14 13.47 65.19 32.58 22.5

15 13.05 65.27 32.66 22.55

16 13.52 65.49 32.88 22.63

17 13.6 65.26 32.78 22.06

18 13.56 66.26 32.28 22.71

21 13.75 65.92 33.07 22.71

22 13.67 66.09 33.14 22.78

23 13.69 66.19 32.93 23.01

25 13.6 65.73 33.03 22.8428 13.71 66.35 32.17 22.8729 13.61 65.69 33.21 22.89

30 13.46 66.32 32.91 22.911-jully-2010 13.68 66.64 33.86 23.60

From the above Table, it can be seen that the NAV of Reliance AutomaticInvestment plan is fluctuating less as compared to the others.NAV of ICICI Life Time Super has fluctuated more as compared to the others.Tata AIG has moderate NAV Fluctuations

Thus as far as NAV consistency is concerned, investing in Reliance EquityFund can be a prudent decision.It is expected that the NAVs will rise in the future, promising good returns forthe Investors.


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DATA ANALYSIS & FINDINGS

This analysis is done by giving ranks to all the policies taking into considerationthe following criteria(1= excellent, 2=good, 3=fair, 4=average)

In the end, whichever fund has the least score will be the best buy

CRITERIA RELIANCE ICICI LIC TATA AIG

Amount of Premium 2 4 1 3

Mode of premium payment 1 2 2 1

Revival of the Policy 2 3 3 1

Amount of Top up premium 2 - 3 1

Oldest policy 4 1 3 2

Policies issued 3 2 1 4

Premiums collected 3 2 1 4

Mortality charges 3 2 - 1

FMC 1 3 1 2

Policy Administration charges 3- 1 2

Switch over charges 1 3 1 2

Fund performance 3 1 4 2

Returns 2 1 4 3

Market share 3 2 1 4

TOTAL SCORES 34 26 26 32

From the above analysis it can be said that, ICICI and LIC have scored the least.Therefore a person can either buy a ULIP form ICICI or from LIC.


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CONCLUSION

From the above project, I would point out that the insurance industry is growingat a very fast pace .The Insurance needs of the people are increasing.ICICI Prudential is a key player in the private sector and LIC is a leader in the

public sector with the largest market share.The returns provided by ICICI are the highest as compared to other companiesand is superior to others in all respects. Therefore a person can rightly ch oose tobuy insurance from well known public sector companies.Thus ULIPs are simple combination of Term assurance and investment.Synergy, flexibility, durable tax advantages, flexibi lity in debtequity ratio, topup facility, transparency, subjected to market conditions, capital appreciationmakes ULIPs structurally more effective for achieving long term financialgoals. There is no other investment avenue which provides double the amountinvested, in case of death due to accident or on death.

Therefore insurance has and should be a part of every persons portfolio whichsatisfies twin objectives of protection against risks & to increase your wealth.Putting your money in the ULIP equity fund will give you a good return andcapital appreciation.

So relax and enjoy your life as ULIPs is there behind you.


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LIMITATIONS OF THE STUDY

Unit Linked Insurance Plans giving more benefit & flexibility,

Tax saving, etc. Even if it has some Limitations also they are,

Fund allocation Charges are very high. that means if a client buy a policyfirst time the charges very high only some portion will go to fund.

In the ULIPs Risk is also higher means the fund value will be change timeto time.

Full responsibility & right vested in hand of policyholder. Fund value calculated on the basis of NAV.


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BIBLIOGRAPHY

A.BOOKS1. Insurance Principles & Practices

(M.N.Misra S Chand Publications.)2. Insurance

(M.J.Mathew RBSA Publications.)3. Insurance Fundamentals, Environment & Procedures

(B.S.Bodla, M.C. Garg, K.P. Singh Deep &Deep Publications of 2003)

4. Insurance Institute of India IC 33(S.Balachandran)

5. Research Methodology(C R Kothari)

B.NEWSPAPERS1. Economic Times2. Times of India3. Malayala Manorama.

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