A Interim Report 1

8/3/2019 A Interim Report 1

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A REPORT

ON

MARKET RESEARCH TO DETERMINE CONSUMERPERCEPTION AND THEIR BUYING BEHAVIOUR

TOWARDS LIFE INSURANCE WITH AN EMPHASIS ON

HDFC STANDARD LIFE INSURANCE.

BY:-

RAHUL KATYAL

08BS0002504

HDFC STANDARD LIFE INSURANCE

COMPANY


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Introduction:-Life Insurance in India has made its debut well over 100 years ago.In ourcountry,which is one of the most populated in the world,the prominence of insurance is not as

widely understood as it ought to be.What follows is an attempt to acquaint people with some of

the concepts of life insurance with special reference to HDFC Standard Life Insurance company.

Life Insurance is a contract that pledges payment of an amount to the person assured( or his

nominee) on the happening of the event insured against.The contract is valid for payment of the

insured amount during :-

1

The date of maturity

Specified dates at periodic intervals

Unfortunate death,if it occurs earlier.

Among other things,the contract also provides for the payment of premium periodically to the

company by the policyholder.Life Insurance is universally acknowledged to be an

institution,which eliminates risk substituting certainity for uncertainity and comes to the timely

aid of the family in the unfortunate event of death of the breadwinner.By and large Life

Insurance is partial solution to the problems caused by death.Life nsurance is concerned with 2

hazards that stand across the life path of every person:-

a)That of dying prematurely leaving a dependent family

b)That of living till old age without viable means of support.

Any person who has attained majority and is eligible to enter into a valid contract can insure

himself/herself and those in whom he/she has insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's spouse or children.

While underwriting proposals, certain factors such as the policyholders state of health, the

proponent's income and other relevant factors are considered by the Corporation

Advantages of Life Insurance

1)Contract of Insurance:-

A contract of insurance is a contract of utmost good faith technically known as uberrima fides.

The doctrine of disclosing all material facts is embodied in this important principle, which

applies to all forms of insurance.


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At the time of taking a policy, policyholder should ensure that all questions in the proposal form

are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading

to the acceptance of the risk would render the insurance contract null and void.

2)ProtectionSavings through life insurance guarantee full protection against risk of death of the saver. Also,

in case of demise, life insurance assures payment of the entire amount assured (with bonuses

wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is

payable.

3)Aid To Thrift:Life insurance encourages 'thrift'. It allows long-term savings since payments can be made

effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment forinsurance is either monthly, quarterly, half yearly or yearly).

For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method

of paying premium each month by deduction from one's salary.

In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme

is ideal for any institution or establishment subject to specified terms and conditions.

4)Liquidity:In case of insurance, it is easy to acquire loans on the sole security of any policy that has

acquired loan value. Besides, a life insurance policy is also generally accepted as security, even

for a commercial loan.

5)Tax Relief:Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is

available for amounts paid by way of premium for life insurance subject to income tax rates in

force.

Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect

pays a lower premium for insurance than otherwise.

6)Money When You Need It:A policy that has a suitable insurance plan or a combination of different plans can be effectively

used to meet certain monetary needs that may arise from time-to-time.

Children's education, start-in-life or marriage provision or even periodical needs for cash over a

stretch of time can be less stressful with the help of these policies.

Alternatively, policy money can be made available at the time of one's retirement from service

and used for any specific purpose, such as, purchase of a house or for other investments. Also,


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loans are granted to policyholders for house building or for purchase of flats (subject to certain

conditions).

7) Creditors cannot claim the life insurance moneys.They can be protected against

attached by courts.

Life Insurance as a wealth pyramid

Financial independence brings with itself the responsibility of planning for your

future. The best way to start - is to start from the beginning. If life was a pyramid,

we all start at the bottom of it and move upwards, as our needs and responsibilities

rise along with age.

The key to building a sound financial plan is to start with a solid and secure base. Insurance can

help you ensure a sound and secure foundation by protecting your family, protecting your assets,

protecting your health and most importantly - protecting your dreams.

With evolution, insurance also offers you solutions to accumulate substantial savings and invest

them for your future needs as wells as for your retirement

Need for Life Insurance:-

1)Funding future goals through insurance:-A wide range of vehicles are available tofund future financial goals. These could be low risklow return instruments like bank deposits

and small savings, or higher risk products such as equity, which can offer potentially higher

returns. Insurance scores over other investment vehicles in the following aspects:-


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Certainty

Once a goal has been identified and a value for it has been crystallized, an insurance policy is an

excellent vehicle to fund the goal. This is because one can rest assured that even in the

unfortunate event of death or even critical illness, the sum assured will fund a future goal of the

policyholder.

Tax efficientMaturity benefits of most insurance policies are tax free under Section 10 (10D) and the

premium paid is eligible for deduction under Section 80C of the Income Tax Act, 1961.

Flexibility

Insurance products, especially Unit Linked Plans, provide flexibility in terms of asset allocation

to suit specific risk appetites, policy durations, premium payment terms and fund switching

options.

Wider options

Depending on the time horizon of the goal, the return required and the investors risk appetite, a

broad spectrum of asset allocations between equity and debt is possible in a Unit Linked Plan.

An investor may tailor his policy to suit his requirement.

Liquidity

Most Insurance products offer good liquidity after the lock-in period to take care of any

emergency requirement of funds. But they do have inherent deterrents in the form of charges to

discourage unnecessary encashment.

Earmarking

Very often an insurance policy is taken for a specific goal. This therefore can become a deterrent

against utilizing these funds for any other purpose and also encourages continued contributions.

2) Planning for unforeseen events:-Insurance helps you to provide for contingentliabilities like hospitalization, critical illness, debt redemption etc, in a cost efficient manner.


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Term insuranceTerm insurance is the simplest and cheapest form of life cover, which pays the sum assured on

death. This is useful to simply provide for a familys survival in the unfortunate event of demiseof the bread winner.

This can also be used to cover repayment of any debt of a policy holder by simply assigning the

policy to the creditor. Upon maturity or claim on the policy, the proceeds are paid to the creditor.

Loan Cover policies are a variant where the sum assured keeps reducing in line with the loan

balance.

Health covers

These policies provide cover against major health care expenses like hospitalization, surgery,

critical illness etc. The benefits could be in the form of fixed pay outs on hospitalization or a

lump sum on diagnosis against some specified critical illnesses.

Accident benefit

This is usually an add-on cover over a basic policy and pays an additional sum assured to the

beneficiary in case of death due to accident. Since accidental death is sudden and unforeseen, the

family could be faced with issues like relocation, debt servicing and other requirement for funds.

3) Planning for retirement

Indian life expectancy has improved dramatically over the years due to availability of advancedmedical facilities. However, a longer working life may not really be possible due to occurrences

of life-style induced illness and high burn-out rate. The evolving demographic balance with

plenty of young talent becoming continuously available may also be a deterring factor to a longerworking life unless one is self employed.

Consequently, our retirement life span could well be as long as our active working life span. Thismeans that we have to build a solid corpus during our active life to maintain our life style for the

long post retirement life if we are to enjoy the true meaning of the word retirement. Pension

Plans help us build up our savings during our earning years and provide us a lump sum on

retirement. This lump sum can then provide us a retirement income by investing in an annuity.

4) Provide post retirement income

The worst situation that a retiree can face is to run out of funds late into retirement. Such asituation may force him to seek help from friends / relatives or liquidate his fixed assets which

essentially are a compromise of self respect.


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6

This is where insurance offers the best solution in the form of an annuity. Annuities bought fromthe retirement corpus can either be used to provide regular post retirement income for a fixed

term or also for the entire life.

A retirement plan may be broadly divided into two phases, namely accumulation (pre-retirement)

and distribution or consumption (post-retirement). In the above graph*, we assume a 30-year old

who plans to retire at the age of 60 and expects to live till age 80. His accumulation phase is

between age 30 and 60 when he builds his retirement corpus and distribution phase is between

age 60 and 80 when he draws down this corpus for his living. Retirement Plans ensure that the

distribution phase of your life is as comfortable as your earning years.

* This is only to explain the point and the figures are not based on any calculation.

5) Insurance as an inflation shield

Inflation lowers the purchasing power of money and makes a dramatic cumulative impact over

the long term. It reduces your real income year after year as your cost of living keeps increasing.

So, it must be taken into account while framing financial goals.

The following illustration depicts the impact of inflation on income and prices.


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Insurance products such as Unit Linked Plans help us combat the impact of inflation on our

financial goals by providing the option to invest in equity, which is known to deliver one of the

best returns from all asset classes, over the long term. Ignoring inflation would result in oursavings falling short of the estimated value of future goals, especially over the long term.

Conventional Plans:-

1)Pension plans:- Retirement is a natural progression and only if you are financially secure

during these years can you hope to live a comfortable retired life. Pension plans are designed toaccumulate your savings during your earning years and thereafter provide you with a regular

income after retirement so that you dont have to depend on your children or society.

Further, the premium payment in the case of pension plans can be made as recurring payments

for a fixed period of time (regular premium) or once as a lump sum (single premium). Either

way, the amount and returns thereon are cumulated and paid out to the policy holder at the

retirement date as a lump sum. Part of this lump sum is then used to purchase an annuity which

provides post retirement income

Benefits:

These plans are flexible as they allow you to choose your investment period, the premiumamount and the premium frequency.


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Reversionary bonuses are usually declared by the insurance company annually and oncedeclared are guaranteed.

There are tax benefits under various sections of the Income Tax Act, 1961. A deductionis available from the total income up to Rs 1 lakh under section 80 CCC and 80 C.

2) Money back plans

When you plan for your future, ideally you should set out with specific goals and these should

have costs and deadlines attached to them. Once this is done, money back plans provide an

excellent vehicle to take you to the fulfillment of these goals.

Money-back plans are insurance products which pay out pre-defined benefits at periodic times

during the entire term of the policy. For instance, in a money-back plan with a 20 year term, 25

per cent of the sum assured could be paid out after every five years (i.e., at the end of the 5th,

10th and 15th year) and the remaining 25 per cent of the sum assured along with the bonus, if

any, would be paid out at the end of the 20th year. However, in the case of the unfortunate death

of the insured person, the total sum assured (100%) and bonuses will be paid.

Benefits:

Since a part of the sum assured is received periodically, this plan combines short termfinancial goals with long term savings and insurance.

Tax benefits under Section 80C are applicable on the premium paid. The periodic lump sums as well as maturity amount is tax free.

3) Childrens plans

Your children are your pride and joy and you would like them to have the best that money can

buy. And with a sound financial plan, you can make sure that the materializing of their dreams is

not hindered for want of funds. Childrens insurance policies and products are designed with this

specific aim in mind.

These plans set out to secure you financially against the back drop of constraints such as inflation

and the rising cost of education. They help you to fund various aspirations like an overseas

education, extra curricular activities, sports training, supplementary vocational education,marriage celebrations, etc. by providing a lump sum amount at a specified future date.

An additional feature offered by childrens plans is that they continue to offer financial

protection even in the event of the loss of the premium paying parent. This ensures that the

amount envisaged is actually delivered even in the event of unforeseen eventualities.


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Benefits:

Childrens insurance plans enable the parents to save money for childs future withoutany disturbance to the family budget. This is because the premiums can be chosen to suit

the parents convenience.

There are a number of options and customized products to choose from for the childsfuture.


Tax benefits under Section 80C are applicable on the premium paid. Certain plan options also allow the plan to continue after demise of insured parent and the

insurance company continues paying the premium.

4)Endowment plans

Life is full of risksboth financial and non financial. While it is difficult to eliminate the non-

financial risks, insurance helps you to minimize the financial ones. Endowment plans are one

such product. They ensure that you receive an assured amount at the end of the policy term plus

bonuses, if any. If, due to unfortunate circumstances, the insured person expires during the term

of the policy, the sum assured and bonuses go to the nominee. Endowment plans can be taken in

the name of minors too.

Benefits:

This plan helps one plan for the future of their loved ones and rest assured that financeswill not be an obstacle, even in case of the insured persons demise.


Tax benefits under Section 80C are applicable on the premium paid.5) Term plans

As the breadwinner of the family, even the best financial plan that you create can go out of gear

if you are not around to meet the financial commitments it entails. With term plans, you can be

sure that in the event of your unfortunate demise your family will be compensated for the

financial loss to the extent that you see fit.


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Term Assurance Plans are those plans where the sum assured is paid out only if the insured

person dies. There is no maturity benefit under these plans. Due to this feature, the premium

amount is relatively low.

The premium can be paid regularly or even in a lump sum, according to the design of the plan.

Such policies can be taken either on a single basis or on joint basis.

Benefits:

These plans are ideal for individuals who have dependents to be taken care of. In theunfortunate event of the insured persons death, the dependents are left financially secure.

The premium for such plans is very low, especially if the insured in young. The plan can be topped up with add additional features (known as riders), such as

accidentdeath cover or critical illness cover.

There are tax benefits for the insured person6) Whole life plans.

Insurance has become a necessity, particularly in India where most families are dependent on a

single earning individual. Further, since there is no social security available in India, the

financial interests of the family have to be protected through other sources. Whole life insurance

policies are designed to provide lump sum payments to a family in the event of the death of the

insured person.

Unlike term insurance, a whole life insurance policy covers you for your entire life and not justfor a specific period of time.

Benefits:

The policy stays in force as long as the insured individual continues to live and benefitsremain constant during the entire coverage period of the policy.

There is no need to undergo future medical examination once the policy is in force. There is also an element of tax-saving in these policies.


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Unit linked insurance plans

Introduction:-In Unit Linked Plans, the investments made are subject to risks associated with

the capital markets. This investment risk in investment portfolio is borne by the policy holder.

Thus, you should make your investment choice after considering your risk appetite and needs.

Another factor that you need to consider is your future need for funds. HDFC Standard Life

offers you a variety of unit-linked insurance products to suit your goals be it for your

retirement planning, for your health, for your childs education and marriage or for investment

purposes.

Which investor class are they most suited for ?

Those who wish to closely track their investments: Unit linked plans allow policytakers to closely monitor their portfolios. They also offer the flexibility to switch your

capital between funds with varying risk-return profiles.

Individuals with a medium to long term investment horizon: Unit linked plans areideal for individuals who are ready to stay invested for relatively long periods of time.

Those with varying risk profiles: Across the seven funds offered, the equity componentvaries from zero to a maximum of 100 per cent. Thus there is a choice of funds available

to all types of investors - from risk-averse investor to those investors who have strong

risk appetite.

Investors across all life stages: This plan category offers a variety of plans which can beopted for depending upon the life stage you are in and your needs and financial liabilities

at that point in time.

How is it structured ?

In a Unit Linked Plan, the premiums you pay are invested in the funds chosen by you after

deducting allocation charges and charges including those for managing funds, policy

administration and for providing insurance cover are deducted from the funds by cancelling

certain units. The value of each unit of a fund is determined by dividing the total value of thefunds investments by the total number of units.

Advantages of a unit linked plan :-

Market linked returns: Unit linked plans give you an opportunity to earn market-linkedreturns as part of the premiums are invested in market linked funds which invest in


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different market instruments including debt instruments and equity in varying

proportions.

Life protection, Investment and Savings: Unit linked plans offer the twin benefits of lifeinsurance and savings at market-linked returns. Thus, you have the opportunity to invest

your money to earn higher returns, while taking care of your protection needs. Investingin unit linked plans helps to inculcate a regular habit of saving and investing, which is

important for building wealth over the long term.

Flexibility: Unit Linked Plans offer you a wide range of flexible options such aso The option to switch between investment funds to match your changing needs.o The facility to partially withdraw from your fund, subject to charges and

conditions.

o Single premium additions to enable the policy holder to invest additional sums ofmoney (over and above the regular premium) as and when desired, subject to

conditions.

Servicing a Unit linked plan:-

Single Premium: The policy holder is required to pay the entire premium amount as alump sum at the beginning of the policy term.

Regular Premium Payment (annually, semi-annually or monthly): The policy holder hasto pay the pre-determined premium amount periodically i.e. annually, semi annually or

monthly, depending upon the premium payment term opted for.

Number of Premium Paying Years: This depends on the term of the policy that you havechosen. In most cases, the policy term and the number of premium paying years (in case

of regular premiums) are the same. However, some policies give the insured the option of

choosing the number of premium paying years.

Charges:-

The following charges are deducted from your policy towards the cost of benefits and

administration services provided by HDFC Standard Life Insurance

Administration charges: A fee is charged for administration of your policy everymonth. Administration charges are deducted by cancelling units proportionately from

each of the funds you have chosen.


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Fund management charges: These charges are towards meeting expenses related tomanaging the fund. This is charged as a percentage of the funds value and is deducted

before arriving at the net asset value of the fund.

Switch charges: You can switch between the funds available to suit your changing needsand goals. In a policy year, a fixed number of such switches are available free of cost.Subsequent to this, each switch would attract a certain charge. These charges are

deducted by cancelling units proportionately from each of the funds you have chosen.

Surrender charges: These charges are levied for premature encashment of units. Theyare charged as a percentage of the fund value and depend on the policy year in which the

policy has been surrendered.

Mortality Charges: Depending upon the age, and the amount of cover, these charges arelevied towards providing a death cover to the insured.

Premium Allocation Charge: This charge is deducted as a fixed percentage of thepremium received, and is usually charged at a higher rate in the initial years of a policy.

This charge varies depending upon whether the policy is a single premium or regular

premium policy, the size of the premium, premium frequency and payment mode.

Partial Withdrawal Charges: Lump sum withdrawals are allowed from the fund afterthe lapse of three years of the policy term and subject to pre-specified conditions.

However, such withdrawals attract charges, as mentioned in the respective policy

brochures.

Switching between funds

Life Insurance companies offers the flexibility to switch between funds available under a unit

linked plan. You may wish to switch between equity and debt funds, in times when there is

market volatility or interest rate fluctuations. At times, changes in your financial standing,

liabilities or risk profile may also require that you change your investments accordingly.

Making withdrawals

You may also make partial withdrawals from your funds after a certain specified period, subject

to a partial withdrawal charge. The withdrawal amount should be at least the minimum

prescribed withdrawal amount and the fund must not fall below the minimum fund value after

the withdrawal.

You can make a full withdrawal of your policy before its maturity date. However, surrender

charges will be applicable in this case.


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Planning for insurance:-

Stages Involved While Purchasing Different Policies:

1) Pension plans

Choose your retirement age

You can choose the age when you wish to retire * (or vesting age), upon completion of which

your accumulated amount will be used to purchase an annuity to provide you with a steady post

retirement income.

Estimate the post retirement income you need

Decide on the post retirement income and benefits that you would require in order to maintain

the same lifestyle as you have enjoyed in your earning years. You need to also account for

inflation and a declining rate of interest while calculating your post retirement income.

Work out the premium payable

Based on your requirement of post retirement income and the years you have to retire, work out

the premium you need to invest. You can either contact an HDFC Standard Life representative or

use our online calculator to calculate the amount of premium you need to pay.

2) Other conventional plans

Estimate you monetary requirements and therefore your sum assured

Decide on the corpus needed to fulfill your future financial needs. The expected corpus should be

discounted by factors like inflation. This corpus can be used by you to fix the sum assured that

you will need in the future.

Choose the policy term

Estimate the time you have to achieve your future financial goals. This will help you fix the

policy term for which you need to pay premiums.

Choose the additional optional benefits(riders)

Some polices offer you additional benefits. You can customize your policy by choosing any of

the options available as riders.

Work out the premium payable


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Based on the sum assured , the policy term and the additional optional benefits, you will be able

to calculate the premiums you need to pay. You can either contact an HDFC Standard Life

representative or use our online calculator to calculate the amount of premium you need to pay.

3)Unit linked plans:-

Estimate the maturity benefit (corpus) you desire

Based on you future financial needs, estimate the amount you wish to receive in future from your

insurance policy. You can also use our online calculator to calculate your future financial needs.

Choose your policy term

This will depend on the years you have to save for your future financial needs.

Choose the premium you wish to invest

Choose the premium you wish to pay during the premium paying term. Also decide on the

frequency of payment - single or regular (monthly, quarterly half yearly or annually), depending

upon what the policy offers.

Choose your level of protection

Choose your level of protection by deciding on the sum assured. Usually the sum assured can be

fixed as a multiple of the annual premium you wish to pay and there are minimum and maximum

limits prescribed as per the policy type.

Choose the plan options available.

Some polices offer you options which provide additional insurance benefits. You can customize

your policy by choosing any of the options available.

Choose your investment fund.

Choose the investment fund from the range of funds that we offer, based on your risk profile.

You can also choose to invest in multiple funds in the proportion you desire.

4) Protection Plans

Calculate your Human Life Value (HLV)

Calculate your HLV. This will help you understand today's value of your future earnings. It will

calculate the corpus needed to secure your familys financial future in your absence.


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Decide your life coverage

Estimate your life cover considering your HLV, loan liabilities and family expenses.

Choose the additional optional benefit

Some polices offer you additional benefits. You can customize your policy by choosing any of

the options available as riders.

Work out the premium payable.

Based on your life coverage and additional benefits opted for (if any), get an indication of the

corresponding premium you need to pay. You can either contact an HDFC Standard Life

representative or use our online calculator to calculate the amount of premium you need to pay .

Life stage planner:-The life of a person is divided into different stages.The insuranceneeds of a person at different stages of life are different.Based on the stage the person is and the

insurance needs at that stage he can choose the right plan for himself.The various stages in the

life of an individual and the insurance needs at that particular stage are discussed below:-

1)Young And Single

You are a single energetic twenty-something and have just kick-started your career. With the

newly acquired financial independence, most of you feel more inclined to shop, travel and enjoylife. However, it is important to note that this is also the best time to take higher risks as there are

least financial responsibilities.

Your Insurance Needs

Saving for future expensesWhether for your home down payment or for yourmarriage, you need a savings plan to build a corpus for your future needs.

Tax PlanningNow that you are earning, you wouldnt want your hard earned money tojust flow out of your hands. Tax planning is an important aspect of financial planning and

you should draw the maximum tax benefits that investment products offer.

Securing your parents healthGiven their age, your parents would be vulnerable to illhealth and therefore you need to plan for their medical needs as well.


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2)Just MarriedNewly married, you are looking forward to building a whole new world with your life partner.

Marriage brings additional responsibilities and thus additional expenses, which may burn a hole

in your pocket unless you plan your finances wisely.

Your Needs

Saving for future needsThis is the stage in life where you need to set aside a regularsavings for your familys future needs. This may be for immediate needs such as car or

vacation or for buying your dream house.

Life CoverWith marriage comes the responsibility of securing your partners life. Agood life insurance plan can ensure that your partner is financially secure, no matter

what.

Secure your healthWith time and age on your side, it would be ideal to provide acushion for any health contingencies

3)Married With Children

As you step into parenthood, your dreams increase manifoldits not just about you anymore,

but about your little ones too. Take that extra step to ensure that no matter what the

circumstances maybe, you dont have to compromise on your dreams for your bundles of joy.

Your Needs

Childs education & future expenses Saving for your childs education assumesutmost importance, at this stage. In the long-term, you may also want to set aside funds

for his/her marriage expenses.

Safeguard family from loan liabilitiesIf you have a home loan, you may want tosecure your family against the stress of loan repayment, in the unfortunate event of your

death.

Retirement planningYou may now start feeling the importance of building aretirement corpus to enable you to continue the lifestyle you are used to leading even

after retirement.


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4)Married With Grown Up Children

This is a stage when you have a well established career and draw a decent income. As your

children are growing, so are your expenses. You may also have to spend on maintaining the

house, for instance renovating the house, replacing old furniture, etc.

Your Needs

Childs higher education / marriage Your main goal, at this stage, is to fund yourchilds higher education. With your childrens marriages around the corner, you may

want to rearrange your investment plan to fund these joyous events.

Retirement planningRetirement seems to be on the horizon, so planning for yourgolden years is a priority.

Health contingencies- Old age brings with itself a wide range of health issues. You wouldsurely like to be well equipped to face any eventuality.

5)Nearing Retirement

Your children are most probably independent and well settled by now. At this stage, your income

is at its peak. You have substantial funds at your disposal to set aside for your retirement.

Your Needs

Retirement planningYour goal at this stage is to plan for your retirement. It isimportant to understand your true net worth and how you wish to spend your retiredyears. This is because even if you have not yet focused on retirement, investing wisely in

the next 10-12 years can help significantly.

InvestmentsAt this age you might also have substantial savings which can be investedfor stable growth. You should consider investing in tax efficient instruments.

Regular income post retirementYou should focus on investing in those products thatprovide capital preservation and generate regular income to meet your post-retirement

needs.

Tips on reducing premium

It is not possible to negotiate the basic premium rates offered by insurance companies. However,

keeping the following points in mind, you can surely reduce the costs incurred on premiums

Mode of Premium payment as annual: Choosing the annual mode of payment reducesthe premium cost. Insurance companies add extra charges to cover additional costs


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incurred by them if you pay multiple premium rather of single yearly premium. These

additional charges increase insurance cost thus ultimately increasing your premium

amount.

Start at a young age: The premium of the insurance plans increases with age. At ayoung age, you are medically fit and physically sound. This helps in reducing theinsurance cost and in turn reduces your premium amount.

Tenure of the policy: The longer the term of the policy, lower will be the premium.Longer duration polices allow you to build the required corpus with smaller premiums.

Do not take riders that you do not need: Additional benefits on policies come withadditional charges and increase your cost of premium. You can lower premium costs by

opting only for those riders that you actually need.

Keep yourself Fit: Health related issues, Disability problems, Smoking and drinkinghabits, risky lifestyle all add to the insurance cost thus increasing insurance premium.

Keep yourself healthy and fit to get the benefit of lower insurance premiums.

Insurance Myths

Insurance is for saving tax: Saving tax is just an added advantage of insurance policy;the main objective of insurance is to provide protection to you and your family and to

build an assured corpus for your future needs.

My group insurance is adequate: Your group insurance might be adequate but what ifyou change the job? Once you change the job your group insurance will cancel off andyou will not get any insurance benefit. So it is always advisable to take insurance other

than the insurance offered by your employer.

Only the Breadwinner of the family needs insurance: Every family member needsinsurance. Your work profile changes the insurance needs but certainly does not

eliminate them.

I'm single and don't have any dependents, therefore I don't need any coverage: Youmight not need a life insurance policy where your nominee is taken care of but you

certainly need a policy to take care of your health and retirement worries.

Life insurance is far more important than health coverage: As the health costs areincreasing by the day, taking a health insurance plan has become as important as a life

coverage plan. Health plans, disability plans and critical illness plans provide you with

financial cushion and compensate for the financial loss you suffer in case you are not able

to work because of illness. If life insurance plan secures the future of your loved ones

then health coverage plan secure your own future.


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Recruitment of financial consultants:-

A Great Career Move In Every Way

Zero investmentThere is no start-up capital. You have unlimited earning potential

Flexible work timingsYou can work full-time or part-time, depending on your convenience

Sunrise industryOnly 25% of the insurable population in India is insured. And, those insured need higher

insurance cover .

Endless Earning Possibilities

Decide your own salary amountYour income is directly proportional to the effort put in by you. The more you sell, the

more you earn. And our commission structure (as per IRDA guidelines) has the ability to

give you the maximum benefits for every policy you sell

Long term earning potentialThe policies sold by you will give you a renewed income every year. So every year your

income keeps increasing steadily even if you sell the same number of policies

Regular incomeThe company pays the commission you earn every 15 days. This ensures that you get a

regular income when you associate with us

Your rewardWe have several reward programs to inspire good performance and create a positive spirit

amongst our Financial Consultants. So you can look forward to foreign trips, seminars,

prizes and special club memberships to the Silver Club, Gold Club & Platinum Club Wealso sponsor our top performing Financial Consultants for international training programs

and seminars.


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Project proceedings

Based on the knowledge that has been obtained about the life insurance sector the research

questionnaire has been prepared which covers almost all practical aspects related to life

insurance sector right from the knowledge of people about life insurance to their knowledgs

about the different life insurance companies and whether or not they offer quality products that

fulfills the above mentioned needs.It also aims at determining whether or not an individual

knows the details of the plan he has taken.It also aims at determining whether or not an

individual knows about the two categories of life insurance that is ULIPS and traditional.The

questionnaire also covers recruitment of financial consultant /insurance agent.The questionnaire

aims at determining whether or not an individual knows about the working of an insurance agent

and whether or not an individual is an agent of the company and if yes whether or not he is

satisfied with the commission offered to him by the particular company.Some of the primary

data through research questionnaire has already been collected and the process of collection of

primary data is still going on.Some secondary data from magazines,journals,internet and researchwork previously done etc will also be collected.Based on the primary data collected from the

research questionnaire and secondary data collected from different sources an analysis will be

done.Based on analysis there will be some findings.And based on findings suggestions and

recommendations will be made which will lead to successful completion of the project.The

research questionnaire prepared therein has been attached with the report and some of the

questionnaire being filled have also been attached.

References:- 1)ic -33life insurance

2)www.hdfcinsurance.com

3)www.licindia.in, 4)www.irda.gov.in

Dear Sir/Madam,

I am a student of ICFAI Business School,Gurgaon.As part of the requirements for my Masters

degree in Business Administration I am required to do a research based project.Kindly spend a

few minutes of your valuable time to fill in this questionnaire.All the information provided by

you will be used only for academic purposes and will be strictly confidential.

Q1) Do you have a life insurance policy ?

Yes No

If yes, on whose name have you purchased the policy?
http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.licindia.in/http://www.licindia.in/http://www.licindia.in/http://www.irda.gov.in/http://www.irda.gov.in/http://www.irda.gov.in/http://www.irda.gov.in/http://www.licindia.in/http://www.hdfcinsurance.com/


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Yourself Wife Son Others

Q2) Which companys insurance policies do you hold ?

LIC

HDFC Standard Life Insurance

Birla Sun Life Insurance

Tata AIG Life Insurance

ICICI Prudential Life Insurance

Aviva Life Insurance

Bajaj Allianz Life Insurance

Bharti Axa Life Insurance

Reliance Life Insurance

Others (specify name)

Q3) If you have in policies of many companies, recently your experience is with which

company ?

Specify name:-

Q4)According to you which Life Insurance Company provides best insurance plans?

LIC HDFC Other Private Players

Pension plans

Children plans

Others


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Q5)From where did you tried to find out the information regarding a particular company and its

plans ?

Already existing customer of the company

Advertisements

Agents

Employee of a company with whom the insurance company has a tie up like banks etc.

Q6) Has the company provided all the information about a plan of a particular policy you hold?

Yes

No

Q7) Have you recently got any information regarding necessity of life Insurance ?

LIC HDFC Other Private Players

Yes

No

Q8) If yes,through which mode you got this information?

Recent advertisements

Mails

SMS

Hoardings

Q9)When did you receive this information ?

3 months


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3-6 months

1 year

More than 1 year

Q10) While enquiring about life insurance plan of a particular company did the agent of that

company provided you with adequate and correct information and he has not mislead you and

concealed information ?

LIC HDFC Other private players

Yes

No

Q11) What are the the problems you faced from the company?

(a) Accessibility of the employee/agent


(b) Complex formalities for opening up a policy


(c) Claim settlement process


(d) Grievance redressal mechanism


(e) Levy hidden charges


(f) Lack of timely communication



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Q12) Your rationale behind investment(rank them)

Factors LIC HDFC Other private players

Individual risk coverage

Tax benefits

growth and return on investment

Risk coverage of family

Child welfare

Q15) Do you have any knowledge of ULIP plans ?

Yes No

Q13) What is your opinion about returns offered by insurance companies ?

LIC HDFC other private players

Very High

High

Average

Q14) As an investor in which 7 types of funds offered by ULIPS you would like to invest your

money in ?

Liquid fund

Stable managed fund

Secure managed fund

Defensive managed fund

Balanced managed fund

Equity managed fund


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Growth fund

Q15) Do you have any idea of traditional plans?

Yes No

Q16) What mode of premium payment do you prefer?

Annually Half yearly Monthly

Q17) What according to you is an ideal policy term(no. of years you would be willing to pay

premium)?

3 to 5 years

6 to 9 years

10 to 15 years

16 to 20

21 to 25

26 to 30

More than 30

Recruitment of insurance agent

Q18) Do you know the working of an insurance agent?

Yes No

Q19) Are you presently an insurance agent of any company ?


Yes

No

Q20) Are you satisfied with commission offered to as an agent of a company ?


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Yes

No

Personal Details:-

Name:-

Address :-

Contact no:-

Age :-

Educational qualifications:- 10th std 12th std graduation post graduation doctorate

Income:- 20000 21000 to 40000 41000 to 60000 61000 to 80000

81000 to 100000 more than 1 lakh

Type of profession :- private public others

Work experience :-

No of family members:-

Documents

A Interim Report 1