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SUMMER TRAINING PROJECT REPORT
ON
COMPARATIVE OF IDBI FEDERAL INSURANCE PRODUCTS WITH OTHER
INSURANCE COMPANY PRODUCTS
A report prepared and submitted for the partial requirement and fulfillment
of the MBA Program
SUBMITTED TO: SUBMITTED BY:
Mahamad Arif Khan Amit Awasthi
(Assistant Manager IDBI Federal) MBA 3rd Sem.
GHANSHYAM BINANI ACADEMY OF MANAGEMENT
SCIENCES MIRZAPUR
1
ACKNOWLEDGEMENT
I take this opportunity to express my acknowledgement and deep sense of
gratitude for rendering valuable assistance and guidance to me by
following personality for successful completion of my project.
I am highly obliged to my project guide ......................................................
for his personal encouragement, prompt assistance and help provided to me
in completion of my project. He has helped me a lot by giving suggestions
and guidance whenever needed. His contribution has been extremely useful
and is greatly appreciated. I honor his knowledge and competence in the
field of management.
2
PREFACE
To achieve partial and concrete results, it is necessary that theoretical
knowledge must be supplemented with practical environment.
Keeping this view in mind, I
have completed my research work regarding “comparative of idbi federal
insurance products with other insurance company products)” By doing
this research work I have learnt a lot of things which would be really
helpful for me in future. This experience in decision making and practical
application of knowledge has contributed greatly to my growth.
3
DECLARATION
I hereby declare that the survey entitled, “comparative of idbi federal insurance
products with other insurance company products, that no part of research work
has been submitted for any other degree. I also undertake that work is purely
academic and no part has been copied or taken from any where. The motive
behind the research project was “comparative of idbi federal insurance
products with other insurance company products
.
4
Introduction: Executive summary of the
project
Executive Summary
Banking Industry which is basically my concern industry
around which my project has to be revolved is really a very
complex industry. And to work for this was really a complex
and hectic task and few times I felt so frustrated that I thought
to left the project and go for any new industry and new
project. Challenges which I faced while doing this project were
following-
- Banking sector was quite similar in offering and products
and because of that it was very difficult to discriminate
between our product and products of the competitors.
- Target customers and respondents were too busy persons
that to get their time and view for specific questions was
very difficult.
- Sensitivity of the industry was also a very frequent factor
which was very important to measure correctly.
- Area covered for the project while doing job also was very
large and it was very difficult to correlate two different
customers/respondents views in a one.
5
- Every financial customer has his/her own
need and according to the requirements of the customer
product customization was not possible.
So above challenges some time forced me to leave the project
but any how I did my project in all circumstances. Basically in
this project I analyzed that-
What factors are really responsible for performance of IDBI
Bank’s performance in this competitive era.
6
INDEX
7
Serial No. Particulars Page No.
1 Introduction to Insurance 8
2. Company profile 15
3. Major competitor LIC 24
4. Various life insurance plans of IDBI
FEDERAL LIFE INSURANCE 25
5. Various plans of LIC 27
6. Major plans of IDBI FEDERAL LIFE
INSURANCE 30
7. Major plans of LIC 37
8. Objectives 45
9. Research Methodology 46
10. Data Analysis 49
11. Findings 60
12. Suggestions 62
13. Limitations 64
14. Conclusion 66
15. Bibliography 68
16. Annexure 70
8
9
INSURANCE
The meaning of insurance: Insurance is a policy from a large financial
institution that offers a person, company, or other entity reimbursement or
financial protection against possible future losses or damages.
A simple example will make the meaning of insurance easy to understand. A
biker is always subjected to the risk of head injury. But it is not certain that the
accident causing him the head injury would definitely occur. Still, people
riding bikes cover their heads with helmets. This helmet in such cases acts as
insurance by protecting him/her from any possible danger. The price paid was
the possible inconvenience or act of wearing the helmet; this i.e. equivalent to
the insurance premiums paid.
Major types of insurances are as mentioned below:
Life insurance: Descendant’s family receives financial benefits. Life
insurances also offer paid proceeds to the beneficiary.
Automobile insurance: Usually automobile insurances cover damages
and legal financial expenditures of the automobile driver.
Health insurance: Health insurance covers the expenditures associated
to treatment and medical expenditures.
Credit insurance: Borrowers often fail to repay debts, loans and
mortgages due to certain unavoidable circumstances, credit insurances
can be of great help during such crisis.
10
Property insurance: Property protection insurance
provides protection from risks associated to theft, fire, floods etc.
Life insurance
Life insurance or life assurance is a contract between the policy owner and
the insurer, where the insurer agrees to pay a sum of money upon the
occurrence of the insured individual's or individuals' death or other event, such
as terminal illness or critical illness. In return, the policy owner agrees to pay a
stipulated amount called a premium at regular intervals or in lump sums.
How life insurance works
There are three parties in a life insurance transaction; the insurer, the insured,
and the owner of the policy (policyholder), although the owner and the insured
are often the same person. For example, if Mr. Rajan buys a policy on his own
life, he is both the owner and the insured. But if Mrs. Anita, his wife, buys a
policy on Rajan’s life, she is the owner and he is the insured. The owner of the
policy is called the grantee (he or she will be the person who will pay for the
policy). Another important person involved is the beneficiary. The beneficiary
is the person or persons who will receive the policy proceeds upon the death of
the insured. The beneficiary is not a party to the policy, but is designated by
the owner, who may change the beneficiary unless the policy has an
irrevocable beneficiary designation. With an irrevocable beneficiary, that
11
beneficiary must agree to changes in beneficiary, policy
assignment, or borrowing of cash value.
The policy, like all insurance policies, is a legal contract specifying the terms
and conditions of the risk assumed. Special provisions apply, including a
suicide clause wherein the policy becomes null if the insured commits suicide
within a specified time for the policy date (usually two years). Any
misrepresentation by the owner or insured on the application is also grounds
for nullification. Most contracts have a contestability period, also usually a
two-year period; if the insured dies within this period, the insurer has a legal
right to contest the claim and request additional information before deciding to
pay or deny the claim.
The face amount of the policy is normally the amount paid when the policy
matures, although policies can provide for greater or lesser amounts. The
policy matures when the insured dies or reaches a specified age. The most
common reason to buy a life insurance policy is to protect the financial
interests of the owner of the policy in the event of the insured's demise. The
insurance proceeds would pay for funeral and other death costs or be invested
to provide income replacing the deceased's wages. Other reasons include estate
planning and retirement. The owner (if not the insured) must have an insurable
interest in the insured, i.e. a legitimate reason for insuring another person’s
life. The insurer (the life insurance company) calculates the policy prices with
an intent to recover claims to be paid and administrative costs, and to make a
profit.
12
MAJOR PLAYERS OF INDIA IN INSURANCE
Reliance Life Insurance is a part of the Reliance group. It is one of the
partners of Reliance Capital Ltd which is a Anil Dhirubhai Ambani Group.
Reliance Capital is one India's most dominant private sector financial services
companies. They offer insurance products which help you with savings as well
as give you protection.
Canara HSBC Life is a joint venture of Canara Bank, HSBC Insurance (Asia
pacific) & Oriental bank of Commerce. The Company got its approval from
IRDA in June 2008 and from that commencing its business. They have more
than 4100 branches all over India.
DLF pramerica Life Insurance Company Ltd. is a joint venture between DLF
Limited & Prudential International Insurance Holdings Limited. DLF
Pramerica believes in delivering a secure & enrich life to there customers.
MetLife One of the fastest growing insurance company in India is MetLife.
The company started its operations in between 2000-2001. They have a range
of various products to offer.
13
ICICI Prudential ICICI Bank with Prudential plc, both
well known & strong financial institutions came together in December 2000 to
form an insurance company - ICICI Prudential Life Insurance.
Max New York Life Max India’s leading multi business corporation & New
York Life joined there hands in 2000.The company started there operations in
2001. The company is involved in Life & health products.
Bajaj Allianz Bajaj who are into iron & steel, finance, insurance & etc and
Allianz who provides financial services when came together they formed Bajaj
Allianz Life Insurance Company.
Bharti AXA Bharti AXA Life Insurance is a joint venture between Bharti &
AXA. The company started its functionality in December 2006 and they
always believe to be a strong financial institute.
HDFC Standard Life HDFC Standard Life Insurance is a joint venture
between Housing Development Finance Corporation Limited & a Group of
Standard Life Plc.The Company started commencing its business in December
2000.
14
AEGON Religare AEGON Religare Life Insurance
Company Ltd is a joint venture with AEGON, Religare and Bennett, Coleman
& Company a part of Times Group. AEGON Religare Life Insurance company
was launched in July 2008.
Kotak Mahindra A joint venture of Kotak Mahindra group & Old Mutual plc
is known as Kotak Mahindra Old Mutual Funds. The Company started
commencing its business in 2001. The company aim is to help customers in
making there financial decisions.
Future Generali Life Future Generali is a joint venture between Future Group
of India & Italy based Generali Group.Future Generali in India is into both
Life & Non Life businesses in India. The company wants to provide a financial
security to all.
SBI Life SBI Life Insurance Company Limited is a joint venture between
State Bank of India and BNP Paribas Assurance. It is present in more than 41
countries across the world. SBI Life offers a variety of plans in life insurance
and pension.
Shriram Life Shriram Life Insurance Company is a joint venture between
Shriram Group and Sanlam Group.Shriram Group is one of India’s most
15
esteemed financial services & Sanlam Group is one of the
largest life insurance providers of South Africa.
TATA AIG The TATA Group and American International Group Inc together
formed Tata AIG Life Insurance Co. Ltd.Tata Group holds 74% stake in the
insurance venture with AIG holding the balance 26%. They started their
operations in April 2001
Aviva Aviva, one of UK's largest insurance company and world's 5th largest
insurance group. It was one of the first international insurance company to set
up its office in India in the year 1995. They introduced the concept of banc
assurance in India.
IDBI Fortis IDBI Fortis Life Insurance Co. Ltd is a joint venture between
three financial institutes; they are IDBI Bank, Federal Bank and Fortis. They
introduced there plans in March 2008. IDBI owns 48% equity while Federal
Bank and Fortis own 26% equity each.
Sahara The Sahara Pariwar stepped into the insurance business by launching
Sahara India Life Insurance Co. Ltd. They received the IRDA license in
February 2004 and started their operations in October 2004. They are the first
solely owned private sector insurance company in India.
16
ING VYSYA ING Life was established in 2001 as a joint
venture between ING Insurance International B.V. (INGI), ING Vysya Bank
Limited and GMR Industries Limited. At present, INGI, Exide Industries
Limited, Ambuja Cement Ltd, Enam Group are the joint venture partners.
Star Union Star Union Dai-ichi Life Insurance Co.Ltd. is formed by three
various financial institutions. Bank of India, Union Bank of India and Dai-ichi
Mutual Life Insurance Company This firm was incorporated in the year 2007
and got their IRDA license on the 26th Dec 2008.
Some of the important milestones in the life insurance business in India
are:
1818: Oriental Life Insurance Company, the first life insurance company on
Indian soil started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance
company started its business.
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government
to collect statistical information about both life and non-life insurance
businesses.
17
1938: Earlier legislation consolidated and amended to by
the Insurance Act with the objective of protecting the interests of the insuring
public.
1956: 245 Indian and foreign insurers and provident societies are taken over by
the central government and nationalised. LIC formed by an Act of Parliament,
viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the
Government of India.
18
19
Industry status & IDBI Bank’s interface
Industry introduction
The Indian Banking industry, which is governed by the Banking
Regulation Act of India, 1949 can be broadly classified into two
major categories, non-scheduled banks and scheduled banks.
Scheduled banks comprise commercial banks and the co-
20
operative banks. In terms of ownership,
commercial banks can be further grouped into nationalized
banks, the State Bank of India and its group banks, regional
rural banks and private sector banks (the old/ new domestic
and foreign). These banks have over 67,000 branches spread
across the country in every city and villages of all nook and
corners of the land.
The first phase of financial reforms resulted in the
nationalization of 14 major banks in 1969 and resulted in a
shift from Class banking to Mass banking. This in turn resulted
in a significant growth in the geographical coverage of banks.
Every bank had to earmark a minimum percentage of their
loan portfolio to sectors identified as “priority sectors”. The
manufacturing sector also grew during the 1970s in protected
environs and the banking sector was a critical source. The next
wave of reforms saw the nationalization of 6 more commercial
banks in 1980. Since then the number of scheduled
commercial banks increased four-fold and the number of bank
branches increased eight-fold. And that was not the limit of
growth.
After the second phase of financial sector reforms and
liberalization of the sector in the early nineties, the Public
Sector Banks (PSB) s found it extremely difficult to compete
with the new private sector banks and the foreign banks. The
21
new private sector banks first made their
appearance after the guidelines permitting them were issued
in January 1993. Eight new private sector banks are presently
in operation. These banks due to their late start have access to
state-of-the-art technology, which in turn helps them to save
on manpower costs.
During the year 2000, the State Bank Of India (SBI) and its 7
associates accounted for a 25 percent share in deposits and
28.1 percent share in credit. The 20 nationalized banks
accounted for 53.2 percent of the deposits and 47.5 percent of
credit during the same period. The share of foreign banks
(numbering 42), regional rural banks and other scheduled
commercial banks accounted for 5.7 percent, 3.9 percent and
12.2 percent respectively in deposits and 8.41 percent, 3.14
percent and 12.85 percent respectively in credit during the
year 2000.about the detail of the current scenario we will go
through the trends in modern economy of the country.
Current Scenario:
22
The industry is currently in a transition phase.
On the one hand, the PSBs, which are the mainstay of the
Indian Banking system are in the process of shedding their flab
in terms of excessive manpower, excessive non Performing
Assets (Npas) and excessive governmental equity, while on
the other hand the private sector banks are consolidating
themselves through mergers and acquisitions.
PSBs, which currently account for more than 78 percent of
total banking industry assets are saddled with NPAs (a mind-
boggling Rs 830 billion in 2000), falling revenues from
traditional sources, lack of modern technology and a massive
workforce while the new private sector banks are forging
ahead and rewriting the traditional banking business model by
way of their
sheer innovation and service. The PSBs are of course currently
working out challenging strategies even as 20 percent of their
massive employee strength has dwindled in the wake of the
successful Voluntary Retirement Schemes (VRS) schemes.
23
The private players however cannot match the
PSB’s great reach, great size and access to low cost deposits.
Therefore one of the means for them to combat the PSBs has
been through the merger and acquisition (M& A) route. Over
the last two years, the industry has witnessed several such
instances. For instance, HDFC Bank’s merger with Times Bank
Icici Bank’s acquisition of ITC Classic, Anagram Finance and
Bank of Madurai. Centurion Bank, Indusind Bank, Bank of
Punjab, Vysya Bank are said to be on the lookout. The UTI
bank- Global Trust Bank merger however opened a pandora’s
box and brought about the realization that all was not well in
the functioning of many of the private sector banks.
Private sector Banks have pioneered internet banking, phone
banking, anywhere banking, mobile banking, debit cards,
Automatic Teller Machines (ATMs) and combined various other
services and integrated them into the mainstream banking
arena, while the PSBs are still grappling with disgruntled
employees in the aftermath of successful VRS schemes. Also,
following India’s commitment to the W To agreement in
respect of the services sector, foreign banks, including both
new and the existing ones, have been permitted to open up to
12 branches a year with effect from 1998-99 as against the
earlier stipulation of 8 branches.
24
Tasks of government diluting their equity from
51 percent to 33 percent in November 2000 has also opened
up a new opportunity for the takeover of even the PSBs. The
FDI rules being more
rationalized in Q1FY02 may also pave the way for foreign
banks taking the M& A route to acquire willing Indian partners.
Meanwhile the economic and corporate sector slowdown has
led to an increasing number of banks focusing on the retail
segment. Many of them are also entering the new vistas of
Insurance. Banks with their phenomenal reach and a regular
interface with the retail investor are the best placed to enter
into the insurance sector. Banks in India have been allowed to
provide fee-based insurance services without risk
participation, invest in an insurance company for providing
infrastructure and services support and set up of a separate
joint-venture insurance company with risk participation.
Aggregate Performance of the Banking Industry
Aggregate deposits of scheduled commercial banks increased
at a compounded annual average growth rate (Cagr) of 17.8
percent during 1969-99, while bank credit expanded at a Cagr
25
of 16.3 percent per annum. Banks’
investments in government and other approved securities
recorded a Cagr of 18.8 percent per annum during the same
period.
In FY01 the economic slowdown resulted in a Gross Domestic
Product (GDP) growth of only 6.0 percent as against the
previous year’s 6.4 percent. The WPI Index (a measure of
inflation) increased by 7.1 percent as against 3.3 percent in
FY00. Similarly, money supply (M3) grew by around 16.2
percent as against 14.6 percent a year ago.
The growth in aggregate deposits of the scheduled commercial
banks at 15.4 percent in FY01 percent was lower than that of
19.3 percent in the previous year, while the growth in credit by
SCBs slowed down to 15.6 percent in FY01 against 23 percent
a year ago.
The industrial slowdown also affected the earnings of listed
banks. The net profits of 20 listed banks dropped by 34.43
percent in the quarter ended March 2001. Net profits grew by
40.75 percent in the first quarter of 2000-2001, but dropped to
4.56 percent in the fourth quarter of 2000-2001.
26
On the Capital Adequacy Ratio (CAR) front
while most banks managed to fulfill the norms, it was a feat
achieved with its own share of difficulties. The CAR, which at
present is 9.0 percent, is likely to be hiked to 12.0 percent by
the year 2004 based on the Basle Committee
recommendations. Any bank that wishes to grow its assets
needs to also shore up its capital at the same time so that its
capital as a percentage of the risk-weighted assets is
maintained at the stipulated rate. While the IPO route was a
much-fancied one in the early ‘90s, the current scenario
doesn’t look too attractive for bank majors.
Consequently, banks have been forced to explore other
avenues to shore up their capital base. While some are wooing
foreign partners to add to the capital others are employing the
M& A route. Many are also going in for right issues at prices
considerably lower than the market prices to woo the
investors.
Interest Rate Scene
The two years, post the East Asian crises in 1997-98 saw a
climb in the global interest rates. It was only in the later half of
FY01 that the US Fed cut interest rates. India has however
27
remained more or less insulated. The past 2 years in our
country was characterized by a mounting intention of the
Reserve Bank Of India (RBI) to steadily reduce interest rates
resulting in a narrowing differential between global and
domestic rates.
The RBI has been affecting bank rate and CRR cuts at regular
intervals to improve liquidity and reduce rates. The only
exception was in July 2000 when the RBI increased the Cash
Reserve Ratio (CRR) to stem the fall in the rupee against the
dollar. The steady fall in the interest rates resulted in
squeezed margins for the banks in general.
28
Governmental Policy:
After the first phase and second phase of financial reforms, in
the 1980s commercial banks began to function in a highly
regulated environment, with administered interest rate
structure, quantitative restrictions on credit flows, high reserve
requirements and reservation of a significant proportion of
lendable resources for the priority and the government
sectors. The restrictive regulatory norms led to the credit
rationing for the private sector and the interest rate controls
led to the unproductive use of credit and low levels of
investment and growth. The resultant ‘financial repression’ led
to decline in productivity and efficiency and erosion of
profitability of the banking sector in general.
This was when the need to develop a sound commercial
banking system was felt. This was worked out mainly with the
help of the recommendations of the Committee on the
Financial
System (Chairman: Shri M. Narasimham), 1991. The resultant
financial sector reforms called for interest rate flexibility for
banks, reduction in reserve requirements, and a number of
29
structural measures. Interest rates have thus
been steadily deregulated in the past few years with banks
being free to fix their Prime Lending Rates(PLRs) and deposit
rates for most banking products. Credit market reforms
included introduction of new instruments of credit, changes in
the credit delivery system and integration of functional roles of
diverse players, such as, banks, financial institutions and non-
banking financial companies (Nbfcs). Domestic Private Sector
Banks were allowed to be set up, PSBs were allowed to access
the markets to shore up their Cars.
Implications Of Some Recent Policy Measures:
The allowing of PSBs to shed manpower and dilution of equity
are moves that will lend greater autonomy to the industry. In
order to lend more depth to the capital markets the RBI had in
November 2000 also changed the capital market exposure
norms from 5 percent of bank’s incremental deposits of the
previous year to 5 percent of the bank’s total domestic credit
in the previous year. But this move did not have the desired
effect, as in, while most banks kept away almost completely
from the capital markets, a few private sector banks went
overboard and exceeded limits and indulged in dubious stock
30
market deals. The chances of seeing banks
making a comeback to the stock markets are therefore quite
unlikely in the near future.
The move to increase Foreign Direct Investment FDI limits to
49 percent from 20 percent
during the first quarter of this fiscal came as a welcome
announcement to foreign players wanting to get a foot hold in
the Indian Markets by investing in willing Indian partners who
are starved of net worth to meet CAR norms. Ceiling for FII
investment in companies was also increased from 24.0
percent to 49.0 percent and have been included within the
ambit of FDI investment.
31
IDBI bank: all about
The economic development of any country depends on the
extent to which its financial system efficiently and effectively
mobilizes and allocates resources. There are a number of
banks and financial institutions that perform this function; one
of them is the development bank. Development banks are
unique financial institutions that perform the special task of
fostering the development of a nation, generally not
undertaken by other banks.
Development banks are financial agencies that provide
medium-and long-term financial assistance and act as
catalytic agents in promoting balanced development of the
country. They are engaged in promotion and development of
industry, agriculture, and other key sectors. They also provide
development services that can aid in the accelerated growth
of an economy.
The objectives of development banks are:
To serve as an agent of development in various sectors, viz.
industry, agriculture, and international trade
To accelerate the growth of the economy
To allocate resources to high priority areas
32
To foster rapid industrialization,
particularly in the private sector, so as to provide
employment opportunities as well as higher production
To develop entrepreneurial skills
To promote the development of rural areas
To finance housing, small scale industries,
infrastructure, and social utilities.
In addition, they are assigned a special role in:
Planning, promoting, and developing industries to fill the gaps
in industrial sector.
Coordinating the working of institutions engaged in financing,
promoting or developing industries, agriculture, or trade,
rendering promotional services such as discovering project
ideas, undertaking feasibility studies, and providing technical,
financial, and managerial assistance for the implementation of
projects
Industrial development bank of India
The industrial development bank of India(IDBI) was established
in 1964 by parliament as wholly owned subsidiary of reserve
33
bank of India. In 1976, the bank’s ownership
was transferred to the government of India. It was accorded
the status of principal financial institution for coordinating the
working of institutions at national and state levels engaged in
financing, promoting, and developing industries.
IDBI has provided assistance to development related projects
and contributed to building up substantial capacities in all
major industries in India. IDBI has directly or indirectly assisted
all companies that are presently reckoned as major corporates
in the country. It has played a dominant role in balanced
industrial development.
IDBI set up the small industries development bank of India
(SIDBI) as wholly owned subsidiary to cater to specific the
needs of the small-scale sector.
IDBI has engineered the development of capital market
through helping in setting up of the securities exchange board
of India(SEBI), National stock exchange of India limited(NSE),
credit analysis and research limited(CARE), stock holding
corporation of India limited(SHCIL), investor services of India
limited(ISIL), national securities depository limited(NSDL), and
clearing corporation of India limited(CCIL)
34
In 1992, IDBI accessed the domestic retail debt
market for the first time by issuing innovative bonds known as
the deep discount bonds. These new bonds became highly
popular with the Indian investor.
In 1994, IDBI Act was amended to permit public ownership up
to 49 per cent. In July 1995, it raised over Rs 20 billion in its
first initial public (IPO) of equity, thereby reducing the
government stake to 72.14 per cent. In June 2000, a part of
government shareholding was converted to preference capital.
This capital was redeemed in March 2001, which led to a
reduction in government stake. The government stake
currently is 51 per cent.
In august 2000, IDBI became the first all India financial
institution to obtain ISO 9002: 1994 certification for its
treasury operations. It also became the first organization in
the Indian financial sector to obtain ISO 9001:2000
certification for its forex services.
35
Milestones
July 1964: Set up under an Act of Parliament as a wholly-
owned subsidiary of Reserve Bank of India.
February 1976: Ownership transferred to Government of
India. Designated Principal Financial Institution for co-
coordinating the working of institutions at national and
State levels engaged in financing, promoting and
developing industry.
March 1982: International Finance Division of IDBI
transferred to Export-Import Bank of India, established as
a wholly-owned corporation of Government of India, under
an Act of Parliament.
April 1990: Set up Small Industries Development Bank of
India (SIDBI) under SIDBI Act as a wholly-owned subsidiary
to cater to specific needs of small-scale sector. In terms of
an amendment to SIDBI Act in September 2000, IDBI
divested 51% of its shareholding in SIDBI in favour of
banks and other institutions in the first phase. IDBI has
subsequently divested 79.13% of its stake in its erstwhile
subsidiary to date.
36
January 1992: Accessed domestic retail
debt market for the first time with innovative Deep
Discount Bonds; registered path-breaking success.
December 1993: Set up IDBI Capital Market Services Ltd.
as a wholly-owned subsidiary to offer a broad range of
financial services, including Bond Trading, Equity Broking,
Client Asset Management and Depository Services. IDBI
Capital is currently a leading Primary Dealer in the
country.
September 1994: Set up IDBI Bank Ltd. in association
with SIDBI as a private sector commercial bank subsidiary,
a sequel to RBI's policy of opening up domestic banking
sector to private participation as part of overall financial
sector reforms.
October 1994: IDBI Act amended to permit public
ownership upto 49%.
July 1995: Made Initial Public Offer of Equity and raised
over Rs.2000 crore, thereby reducing Government stake
to 72.14%.
37
March 2000:Entered into a JV agreement
with Principal Financial Group, USA for participation in
equity and management of IDBI Investment Management
Company Ltd., erstwhile a 100% subsidiary. IDBI divested
its entire shareholding in its asset management venture in
March 2003 as part of overall corporate strategy.
March 2000: Set up IDBI Intech Ltd. as a wholly-owned
subsidiary to undertake IT-related activities.
June 2000: A part of Government shareholding converted
to preference capital, since redeemed in March 2001;
Government stake currently 58.47%.
August 2000: Became the first All-India Financial
Institution to obtain ISO 9002:1994 Certification for its
treasury operations. Also became the first organisation in
Indian financial sector to obtain ISO 9001:2000
Certification for its forex services.
March 2001: Set up IDBI Trusteeship Services Ltd. to
provide technology-driven information and professional
services to subscribers and issuers of debentures.
Feburary 2002: Associated with select banks/institutions
in setting up Asset Reconstruction Company (India)
Limited (ARCIL), which will be involved with the
38
Strategic management of non-performing and stressed
assets of Financial Institutions and Banks.
September 2003: IDBI acquired the entire shareholding
of Tata Finance Limited in Tata Homefinance Ltd,
signalling IDBI's foray into the retail finance sector. The
housing finance subsidiary has since been renamed 'IDBI
Homefinance Limited'.
December 2003: On December 16, 2003, the Parliament
approved The Industrial Development Bank (Transfer of
Undertaking and Repeal Bill) 2002 to repeal IDBI Act 1964.
The President's assent for the same was obtained on
December 30, 2003. The Repeal Act is aimed at bringing
IDBI under the Companies Act for investing it with the
requisite operational flexibility to undertake commercial
banking business under the Banking Regulation Act 1949
in addition to the business carried on and transacted by it
under the IDBI Act, 1964.
July 2004: The Industrial Development Bank (Transfer of
Undertaking and Repeal) Act 2003 came into force from
July 2, 2004.
39
July 2004: The Boards of IDBI and IDBI
Bank Ltd. take in-principle decision regarding merger of
IDBI Bank Ltd. with proposed Industrial Development Bank
of India Ltd. in their respective meetings on July 29, 2004.
September 2004: The Trust Deed for Stressed Assets
Stabilisation Fund (SASF) executed by its Trustees on
September 24, 2004 and the first meeting of the Trustees
was held on September 27, 2004.
September 2004: The new entity "Industrial
Development Bank of India" was incorporated on
September 27, 2004 and Certificate of commencement of
business was issued by the Registrar of Companies on
September 28, 2004.
September 2004:Notification issued by Ministry of
Finance specifying SASF as a financial institution under
Section 2(h)(ii) of Recovery of Debts due to Banks &
Financial Institutions Act, 1993.
September 2004:Notification issued by Ministry of
Finance on September 29, 2004 for issue of non-interest
40
bearing GoI IDBI Special Security, 2024,
aggregating Rs.9000 crore, of 20-year tenure.
September 2004: Notification for appointed day as
October 1, 2004, issued by Ministry of Finance on
September 29, 2004.
September 2004:RBI issues notification for inclusion of
Industrial Development Bank of India Ltd. in Schedule II of
RBI Act, 1934 on September 30, 2004.
October 2004: Appointed day - October 01, 2004 -
Transfer of undertaking of IDBI to IDBI Ltd. IDBI Ltd.
commences operations as a banking company. IDBI Act,
1964 stands repealed. January 2005:The Board of
Directors of IDBI Ltd., at its meeting held on January 20,
2005, approved the Scheme of Amalgamation, envisaging
merging of IDBI Bank Ltd. with IDBI Ltd. Pursuant to the
scheme approved by the Boards of both the banks, IDBI
Ltd. will issue 100 equity shares for 142 equity shares
held by shareholders in IDBI Bank Ltd. EGM has been
convened on February 23, 2005 for seeking shareholder
approval for the scheme.
41
42
IDBI Bank Business Chart
43
IDBI BANK
INVESTMENTCURRENT ACCOUNTSAVING ACCOUNT
DEVELOPMENT BANK.RETAIL BANKING
CORPORATE SAVINGPERSONAL SAVING
IDBI Bank Organizational Chart
Chairman
President
Vice president
Finance
Vice president
Marketing
Vice president
Operations
Vice president
H. R.
44
Divisional Sales Manager
Zonal Head
Territory In charge
Regional Head
45
SWOT ANALYSIS OF IDBI FEDERAL LIFE
INSURANCE
STRENGTH:
Multi-channel distribution and one of the largest distribution
networks in India.
1 Million Policies sold within 3 and half years.
Training process of the company is very strong.
According to the change in surrounding environment like
changes in customer requirement.
WEAKNESS:
Company does not penetrate on the rural market at a time.
46
There is no plan for the low income group.
Fees for the advisor is high than the other companies.
OPPORTUNITY:
Insurance market is very big, where company can expand its
business easily.
It has many ULIP plans so it can grow in near future.
THREATS:
47
‘OLD HABITS DIE HARD’: Its still difficult
task to win the confidence of public towards private company.
The company is facing major threats from LIC etc. -which is an
government company.
Plans for all income groups are not available which can create adverse
effect later on the market share of the company.
48
MAJOR COMPETITOR AT A GLANCE LIC (LIFE INSURACE
CORPORATION)
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart
from its corporate office in the year 1956. Since life insurance contracts are
long term contracts and during the currency of the policy it requires a variety
of services need was felt in the later years to expand the operations and place a
branch office at each district headquarter. re-organization of LIC took place
and large numbers of new branch offices were opened. As a result of re-
organisation servicing functions were transferred to the branches, and branches
were made accounting units. It worked wonders with the performance of the
corporation. It may be seen that from about 200.00 crores of New Business in
1957 the corporation crossed 1000.00 crores only in the year 1969-70, and it
took another 10 years for LIC to cross 2000.00 crore mark of new business.
But with re-organisation happening in the early eighties, by 1985-86 LIC had
already crossed 7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100
divisional offices, 7 zonal offices and the Corporate office. LIC’s Wide
Area Network covers 100 divisional offices and connects all the branches
through a Metro Area Network. LIC has tied up with some Banks and Service
providers to offer on-line premium collection facility in selected cities. LIC’s
ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centres have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad,
49
Kolkata, New Delhi, Pune and many other cities. With a
vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and
closer to the customer. The digitalized records of the satellite offices will
facilitate anywhere servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario
of Indian insurance and is moving fast on a new growth trajectory surpassing
its own past records. LIC has issued over one crore policies during the
current year. It has crossed milestone of issuing 1,01,32,955 new policies by
15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance
business.
Birla Sun Life Insurance Co. Ltd
Following are the Life Insurance plans that Birla Sun life Insurance
Company Ltd.
1.)Birla Sun Life Insurance Term Plan - This plan can take care of your
financial commitments of yours towards your family by providing large
cover at low cost. Minimum age of entry for this plan is 18-55 and
maximum maturity age is 70 years.
50
2. Birla Sun Life Insurance Premium Back Term Plan - This is a low
cost life cover promises you to refund the entire premium on maturity or
death. Two options are also there to choose 100% premium back or 125%
premium back. Maximum term period for this plan is 20 years.
3. Birla Sun Life Insurance Guaranteed Bachat Plan - It’s an non
participating endowment plan offers you guaranteed returns and chance to
earn survival benefit from the 3rd year onwards. You can withdraw this
benefit each tear or can use it as to pay the premium dues.
4. Birla Sun Life Insurance Money Back Plus Plan - This is also a non-
participating endowment plan, which gives you maturity and survival both
benefits. One remarkable point is that on every policy anniversary it
increases your cover by an equal amount of your base premium.
5. Birla Sun Life Insurance Gold-Plus II - It’s an investment plan offering
nine-funding option to choose and 100% equity fund option also. Free
unlimited switches are given to you to manage your investments. This plan
offers good liquidity to you.
6. Birla Sun life insurance Platinum Plus - It is a unit linked, non
participating insurance plan. In this plan, the investment risk is borne by the
policyholder but not if this policy is detained till maturity.
51
7. Birla Sun Life Insurance Saral Jeevan Plan - In today’s fast life it’s
really easy to buy an insurance plan, which you immediately can purchase
just by providing three health statements to the company. IDBI FEDERAL
LIFE INSURANCE Saral Jeevan is the best option to go for.
8. Birla Sun Life Insurance Supreme-Life - It’s a unit linked non-
participating plan providing 8-fund options to choose. It gives a choice of
two death benefits.
9. Birla Sun Life Insurance Dream Plan - It’s a unit-linked policy, which
provides you guaranteed returns, 0% allocation charges, and option to
double or triple the guaranteed maturity.
10. Birla Sun Life Insurance ClassicLife Premier - It will give you
guaranteed additions in the form of guaranteed units and a good choice of 8
investment funds are also there. You are free to choose the term period of
10,20,30 or whole life.
11. Birla Sun Life Insurance SimplyLife - It ensures a lifetime of tax-free
investments to fulfill the needs of your dear ones. It’s a market related plan
provides you a good death benefit amount.
12. Birla Sun Life Insurance PrimeLife Premier - It’s a single time
52
investment with top up options. It keeps you hassle free
and provides you guaranteed returns at regular intervals.
13. Birla Sun Life Insurance PrimeLife - It is a single premium policy
gives you the benefit of life insurance and investments as well. It’s a non-
participating ULIP policy.
14. Birla Sun Life Insurance Flexi Cash Flow - For this policy you can
pay lump sum premium payment at regular intervals. It will give you 3%
guaranteed returns on net policy charges.
15. Birla Sun Life Insurance Flexi Save Plus - This plan will give you the
choices of 3 fund options, maturity ages & guaranteed returns of 3%.
16. Birla Sun Life Insurance Flexi Life Line - This would provide you a
life long cover till 100 years of age and will give you the option of tax-free
partial withdrawals.
17. Birla Sun Life Insurance Single Premium Bond - This plan gives you
the opportunity to make one time investment with no medical tests and will
also gives you the facility of high entry age. It’s a short term investment
plan provides you the option of 5 years or 10 years term period.
18. Birla Sun Life Insurance Freedom 58 - It’s a non- participating ulip
53
plan. It helps you accumulate your premiums and the
investment return there of into a corpus of your retirement.
19. Birla Sun Life Insurance Flexi Secure Life Retirement Plan II - This
will provide you the option to take a life cover or not. You can choose your
retirement age yourself whether you want to prepone/postpone it.
20. Birla Sun Life Insurance Children's Dream Plan - It’s a unit-linked
policy, which provides you guaranteed returns, 0% allocation charges, and
option to double or triple the guaranteed maturity.
54
Various Plans offered by LIC are as follows :
Endowment Assurance Plans
1. Jeevan Amrit : This plan is designed for a higher cover at a lower cost. In
this plan premium payment is limited to 3 or 4 or 5 years and the premium
payable during the first year is higher than the premiums payable in subsequent
years.
2. New Janaraksha Plan : Is an Endowment Assurance plan that provides
financial protection against death throughout the term of plan. It pays the
maturity amount on survival to the end of the term.
3. Jeevan Mitra(Double Cover Endowment Plan) : Is an endowment plan
which takes care of the financial needs even if death of the policyholder for the
whole term of the plan.
4. Jeevan Mitra (Triple Cover Endowment Plan) : Is an endowment plan
where thrice the Sum Assured plus all bonuses on the basic sum assured to
date is payable in a lump sum upon the death of the life assured.
5. The Endowment Assurance Policy : This policy has a provisions for the
family of the Life Assured in event of his early death and also assures a lump
sum at a desired age.
55
6. The Endowment Assurance Policy-Limited
Payment : In this policy the payment of premium can be limited either to a
single payment or to a term shorter than the policy.
Children Plans
1. Jeevan Anurag : Is plan designed for the children educational requirements
. This plan can be taken on the parent’s life. The basic sum assured is given
immediately on the death of the life assured during the term of the policy.
2. Jeevan Kishore : Is a plan which can be availed by the parent or grand
parents of the children. It is an endowment assurance plan for children of less
than 12 years of age.
3. Jeevan Chhaya : It is a plan where financial protection is given against
death during the term of the plan. It is an Endowment Assurance plan. Besides
this benefit one-fourth of Sum Assured is payable at the end of each of last
four years of policy term irrespective if the life assured dies or survives the
duration of the policy.
4. Komal Jeevan : Is a Money Back Plan which can be bought by the parent
or grand parent for their child from the age of 0-10years. This plan gives
financial protection against death during the duration of the plan with periodic
payments on survival at specified durations.
56
5. Child Future Plan : A policy where the future needs
like education, marriage and other requirements are taken care of. This plan
provides a benefit which not only takes care of the risk cover of the child
during the policy but also after 7 years of the policy being expired.
6. Child Career Plan : A plan to meet the educational and other needs of the
child. It provides the risk cover on the life of child during the policy term as
well as 7 years after the policy has expired. There are also Survival benefits
given to the life assured at the end of a specific duration.
7. Child Fortune Plan : Is a unit linked plan which offers long term capital
appreciation.
8. Marriage Endowment Or Educational Annuity Plan : This is an
Endowment Assurance plan that provides for benefits on or from the selected
maturity date to meet the Marriage/Educational expenses of the named child.
Money Back Plan
1. Bima Bachat : Is a money-back policy which offers financial security and
assurance to the policy holder and his family. The policy holder has to pay
only one premium.
2. Money Back-20 years : Is an endowment plan where periodic payments of
partial survival benefits are paid during the term of the policy till the policy
holder is alive.As the policy name goes this plan 20% of the sum assured is
57
payable after 5,10,15 years and the balance 40% accrued
bonus is payable at the 20th year.
3. Money Back 25 years : Is the same as the above plan only in this plan the
40% accrued bonus is payable at the 25th year.
Pension plans
1. New Jeevan Dhara - I : is a Deferred Annuity plans that allows the
policyholder to make provision for regular income after the selected term.
2. New Jeevan Suraksha - I : Is a deferred annuity plan.
3. Jeevan Nidhi : Is a deferred annuity plan with profits.
4. Jeevan Akshay - VI : By paying a lump sum amount this immediate
annuity plan can be bought.
Unit Plans
1. Child Fortune Plus : Is a plan for children and to meet their educational
needs. Its a unit linked plan with long term capital appreciation.
2. Fortune Plus : It is a unit linked assurance plan where premium payment
term (PPT) is 5 years and the premium payable in the first year will be 50% of
total premium payable under the policy.
58
3. Market Plus : Is a unit linked pension plan where after
a specific period the pension is paid.
4. Money Plus - I : Is a unit linked Endowment plan which has investment
plus insurance during the term and you can pay regular premiums.
5. Profit Plus : It is a unit linked Endowment plan where the premium
payment term (PPT) is limited to single lump sum, or uniformly over 3, 4 or 5
years.
Whole Life Plans
1. Jeevan Anand : Is a combination of two plans- Endowment Assurance and
Whole Life plan.
2. Jeevan Tarang : This is a with-profits whole of life plan which provides for
annual survival benefit at a rate of 5½ % of the Sum Assured after the chosen
Accumulation Period.
3. The Whole Life Policy : Is a plan mainly to provide for payment of sum
assured plus bonuses on the death of the policyholder.
Golden Jubliee Plan
59
New Bima Gold : Where the premiums are paid back
during the policy term in installments , besides that life insurance cover is
given during the also at the extended term of the plan.
Some main Plans of IDBI FEDERAL LIFE INSURANCE:
(1) Birla Sun life insurance Platinum Plus - It is a unit linked, non
participating insurance plan. In this plan, the investment risk is borne by the
policyholder but not if this policy is detained till maturity.
Policy parameters
60
Entry age 18-70
Minimum annual premium Rs. 50000
Minimum sum assured 5*annual premium
Policy term 10 years
Premium paying term 3 years
Premium and sum assured
You can pay your policy premium annually, half-yearly, quarterly or monthly,
subject to a minimum installment premium of:
Rs. 50,000 per annum
Rs. 25,000 half-yearly
Rs. 15,000 quarterly; or
Rs. 10,000 per month (3 monthly installments required at issue)
You choose your Sum Assured (minimum 5 x annual premium).
Risk profile
0-40% in money market & cash
0-100% in debt instruments & derivatives
0-100% in equities & equity related securities.
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Maturity Benefit
On maturity, your Fund Value will be paid to you.
In addition, we will pay an amount equal to:
the number of units under your policy at that time; times
the excess, if any, of the Guaranteed Maturity Unit Price over the then
prevailing unit price
Death Benefit
In the unfortunate event of the death of the life insured prior to the maturity
date of the policy, we will pay to the nominee the greater of (a) the Fund
Value or (b) the Sum Assured reduced for partial withdrawals as follows:
Before the life insured attains the age of 60, the Sum Assured payable
on death is reduced by partial withdrawals made in the preceding two
years.
Once the life insured attains the age of 60, the Sum Assured payable
on death is reduced by all partial withdrawals made from age 58
onwards.
Partial withdraw
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Partial withdraw after 3 complete policy
years.
Minimum partial withdraw rs.5000
Policy surrender After 3 policy years and you will get 100% fund
value at that time.
(2) Birla Sun Life Insurance children’s Dream Plan –
Policy parameters
63
Entry Ages
Life Insured (parent): 18 years – 60
years
Nominee (child) : 30 days – 13 years
Term 18 years less the age of child at entry
Premium paying
frequency
Regular policy premiums can be paid yearly, half-
yearly, quarterly or monthly (for ECS only)
Addition of riders Accidental Death & Dismemberment Benefit (ADD)
The annual policy premium is based on:
The guaranteed maturity benefit and option you choose.
The enhanced sum assured you desire.
The plan term and your gender and age at entry.
Guaranteed
Fund Value
Equals all premiums paid, less charges and guaranteed
maturity benefit(s), accumulated at 3% per annum
Partial
WithdrawalsAllowed after 3 complete policy years
Investment Protector, Builder, Enhancer
64
Funds
AT
Death
Benefit
The sum assured is paid to the nominee upon the death of the life
insured (parent)
The new life insured is the child and new owner is appointed as
per your wishes.
The policy is continued as usual except:
•All riders and risk charges will cease
•Only the policy administration charge and fund management
charge continue, and
•IDBI FEDERAL LIFE INSURANCE will start paying the
Maturity Continuation Benefit on a monthly basis until the policy
matures.
In case of death of the new life insured (child) prior to the end of
the Term, higher of 105% of the Fund Value or the Guaranteed
Fund Value will be paid and the policy will be terminated.
65
Charges of policy
Premium allocation charges
Fund management charges
Mortality charges
Surrender charges etc.
66
(3) Birla Sun Life Insurance Saral Jeevan Plan –
The saral jeevan plan provides the dual benefit of protection and investment.
So it is the ideal policy if you want to secure your life and build wealth at
the same time.
Poicy parameters
Entry age 18-55
Policy term 10, 15, and 20 years
Age at maturity 65 or less
Mode of Premium Payment - Annual, Semi Annual, Quarterly, Monthly.
Maturity Benefit
Maturity benefit will be sum assured plus fund value at the end of maturity
time.
Death Benefit – Your nominee will receive both sum assured and fund value
in the unfortunate event of death.
Investment Funds
Protector
Builder
67
Enhancer
Charges of Policy
Premium Allocation Charge- Nil (This means all of your policy
premium will be invested in the investment funds of your choice).
Fund Management Charge
Mortality charges
Surrender charges etc.
(4) Birla Sun Life Universal Health Plan-
The universal health plan is in addition to the benefit amount payable under
each health benefit. This unique benefit helps you and your family with out of
pocket health related expenses.
Policy parameters
Entry Ages 18 years – 65 years
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Term 3 years
Premium paying
frequency
policy premiums can be paid yearly, half-yearly,
quarterly or monthly
Premium
According to age of the insured person. (e.g. for 25
– Rs. 4756 p.a., for 45- Rs. 6725 p.a., for 55- Rs.
9724 p.a.).
Benefits –
1. IDBI FEDERAL LIFE INSURANCE pay a fixed benefit amount of Rs.
1000 per day in Hospital plus Rs. 1000 per day in Intensive Care Unit
(ICU).
In case of an admission for surgical management :
2. if the surgery is listed in covered surgeries: IDBI FEDERAL LIFE
INSURANCE pay a fixed benefit amount based on the grade of the
covered surgery-Rs. 100000, Rs. 50000, Rs. 25000, Rs. 15000 and Rs.
10000 for grade 1(major) to 5(minor) respectively.
3. if the surgery is not listed in the covered surgeries: IDBI FEDERAL
LIFE INSURANCE pay a fixed benefit amount of Rs. 2000 per day in
hospital plus Rs. 1000 per day in ICU.
Tax benefit
69
The premium paid by you up to 15000 (Rs.20000 for
senior citizens) p.a. to insure yourself and/or your family, is eligible for tax
benefit under section 80D of the income Tax Act, 1961, which is subject to
amendments from to time.
Death/Maturity benefit
This plan has no death benefit or maturity benefit. Furthermore, this plan
provides for no cash surrender value nor any policy loans.
(5) Birla Sun Life Retirement plan
Policy parameters
Entry Ages18 years – 80 years
Term
Premium paying
frequency
policy premiums can be paid yearly, half-yearly,
quarterly or monthly
Premium Minimum Rs. 9600 p.a.(premium should be multiple
of Rs. 1200)
Benefits
70
In the unfortunate event of death of the policyholder the
nominee will receive the higher of:
75% of the base premium and all renewal base premiums paid. OR the
surrender value at the time plus all accumulated survival benefits.
Tax benefits
Under section 80CCC and 10(10A)
Partially withdraw
You can do partially withdraw min. Rs.5000
Some main plans of LIC
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(1) Marriage Endowment Or Educational Annuity Plan
: This is an Endowment Assurance plan that provides for benefits on or from
the selected maturity date to meet the Marriage/Educational expenses of the
named child.
Entry age 18 (min.) 60(max)
Sum assured 50000 (min) no limit (max)
Term 5 (min) 25 (max)
Mode of payment monthly, qtly, half yrly, yly,
FEATURES
The Marriage Endowment/ Educational annuity plan provides a sum assured to
be kept aside for the expenses of marriage or higher education of the
policyholder's children. Premiums payable for selected term or till death of the
life Assured. Benefits will be given only after the selected term.
Maturity benefits
Sum Assured + Bonus
Accident:
Accident benefit equivalent to basic sum assured would be available by paying
appropriate additional premiums in that behalf. An amount equivalent to Sum
Assured become payable immediately.
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(2) Jeevan saral plan of LIC
Plan Details: This plan is appropriate for employees seeking life cover
through Salary Savings Schemes.
Eligibility:
Minimum Maximum
Age 12 Yrs (completed) 60 Nearest Birthday
Term 10 35
Age at maturity Maximum 70 years
In case of term rider, minimum and maximum age of entry will be 18 and 50
years respectively. Further minimum sum assured will be Rs.1 lakh.
Premium:
Minimum premium: Rs 250 per month for entry age up to 49 years and Rs.400
per month for entry age 50 years and above. The premium shall be in multiple
of Rs.50 per month.
Premium Mode:
Yearly, Half yearly, Quarterly and Monthly under Salary Saving Scheme.
Survival Benefits:
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The sum payable at maturity however differs for different
entry ages and terms. On Maturity the individual will receive maturity sum
assured, plus Loyalty additions, if any.The specimen Maturity Sums Assured (MSAs) per Rs.100/- monthly premium are given below
for some of the ages and terms:
Age at
EntryPolicy Term
10 yrs 15 yrs 20 yrs 25 yrs
20 11,156 19,628 28,039 36,839
40 10,431 17,839 24,598 30,854
50 8,442 13,444 16,164
Death Benefits:
Under this plan death cover will be same irrespective of age at entry and term.
On death the nominee will receive 250 times the monthly premium, plus return
of premiums excluding extra/rider premium premium.
(3) New Jeevan Suraksha Plan
This pension plan is a vehicle for planning a life long pension and is also tax
deferred. Not only can you plan a pension for life with the help of these
annuities but these schemes also help you reduce your tax liability.
74
POLICY PARAMETERS
Min Max
Entry Age 18 70
vesting age 50 79
deferment period 2 years35 years.
Premium Rs. 250 p.m.
Mode of paymentYearly, half yearly,
quarterly, monthly
Features
AMOUNT (Rs) >=1,00,000 <
2,00,000
>=2,00,000 <
5,00,000 >= 5,00,000
Rebates Available
for Single
Premium
3% 4% 5%
Rebates Available 6% 7% 8%
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for Annual
Premium
Death Benefits
If death occurs within 10 years - 3% (interest on all premium given)
Between 11 to 20 years 4%
After 20 years 5%
(4) LIC's Market Plus Plan
It is a unit linked deferred pension plan. The
policyholder can choose the plan with or without risk cover. He can also
choose the level of cover within the limits, which will depend on the mode and
amount of premium he/she desires to pay. The allocated premium will be
utilized to buy units as per the selected fund type.
The Policyholder's Unit Account will be subject to deduction of charges. Units
will be allotted and cancelled based on the Net Asset Value (NAV) of the
respective fund of the date of allotment / cancellation. There is no Bid-Offer
spread (both the Bid price and Offer price of units will be equal to the NAV).
The NAV will be declared on a daily basis and will be based on the investment
performance, Fund Management Charges (FMC) and whether fund is
expanding or contracting under each fund type.
76
Policy parameters
Entry age 18-70
Premium (Min) Rs. 5,000 p.a. for Regular premium and Rs. 10,000 for
Single premium
(Max) No limit
Vesting age 40-75
Sum Assured (min) NIL- (when no life cover is opted) Rs. 25,000 for
Single premium, Rs. 50,000 for Regular premium (When life cover is
opted)
(Max) Regular Premium - 20 times of the annualized
premium.
Minimum Deferment period 5 years
Investment fund types:
77
Fund Type
Investment in
Govt. / Govt.
Guaranteed
Securities /
Corporate Debt
Short-term investments such
as money market
instruments(Including Govt.
Securities & Corporate
Debt)
Investment
in Listed
Equity
Shares
Bond Fund Not less than
80% 100% NIL
Secured Fund Not less than
65% Not more than 85%
Not less than
15% and not
more than
35%
Balanced Fund Not less than
50%Not more than 70%
Not less than
30% and not
more than
50%
Growth Fund Not less than
20%Not more than 40%
Not less than
60% and not
more than
80%
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comparison between some main products of IDBI
FEDERAL LIFE INSURANCE and LIC
1) Comparison between IDBI FEDERAL LIFE INSURANCE’s Children
dream plan and LIC’s Marriage Endowment Or Educational Annuity
Plan:
In IDBI FEDERAL LIFE INSURANCE plan policy term is 18 years less
the age of child at entry.
79
But in LIC plan policy term is 5-25 years.
Premium paying frequency is almost same i.e yearly , half yearly,
quarterly, monthly.
In case of death benefit: in IDBI FEDERAL LIFE INSURANCE plan the
sum assured is paid to the nominee upon the death of the life insured
(parent). The new life insured is the child and new owner is appointed as
per your wishes.
In LIC plan if death occurs due to accident then basic sum
assured is payable on death immediately and further premiums are not
payable.after expiry of the term again basic sum assured + bonus is payable.
In IDBI FEDERAL LIFE INSURANCE fund value is guaranteed.
o In LIC plan fund value is not guaranteed.
2) Comparison between IDBI FEDERAL LIFE INSURANCE’s
Saral jeevan plan and LIC’s Jeevan saral plan
In IDBI FEDERAL LIFE INSURANCE plan entry age is 18-55
years
In LIC plan entry age is 12-60 years
In IDBI FEDERAL LIFE INSURANCE policy term is 10, 15, and
20 years.
80
In LIC policy term is
10-35 years.
In IDBI FEDERAL LIFE INSURANCE plan max. Maturity age is
65 years
In LIC plan max. Maturity age is 70 years.
In IDBI FEDERAL LIFE INSURANCE min. premium is 10000
p.a.
In LIC plan min. premium is 5000p.a.
81
3) Comparison between IDBI FEDERAL
LIFE INSURANCE’s Retirement plan and LIC’s New Jeevan
Suraksha plan.
In IDBI FEDERAL LIFE INSURANCE plan entry age is 18-80 years
In LIC plan entry age is 18-70 yrs.
In IDBI FEDERAL LIFE INSURANCE plan vesting age is 10-40 yrs
from entry age (Max. 90yrs.)
In LIC plan vesting age is 50-79 yrs.
In IDBI FEDERAL LIFE INSURANCE plan min. premium is 9600 p.a.
In LIC plan min. premium is 3000 p.a.
Premium paying frequency is same i.e yearly, half yearly, quarterly, and
monthly
Death Benefits:
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In IDBI FEDERAL LIFE INSURANCE plan the
unfortunate event of death of the policyholder the nominee will receive the
higher of:
75% of the base premium and all renewal base premiums paid. OR the
surrender value at the time plus all accumulated survival benefits.
In LIC plan
If death occurs within 10 years - 3% (interest on all premium given)
Between 11 to 20 years 4%
After 20 years 5%
4) Comparison between IDBI FEDERAL LIFE INSURANCE
Platinum plus plan and LIC Market plus plan
Entry age in IDBI FEDERAL LIFE INSURANCE and LIC is same i.e.
18-70 years.
In IDBI FEDERAL LIFE INSURANCE min. annual premium is
50000p.a.
83
In LIC plan
premium is 10000p.a.
In IDBI FEDERAL LIFE INSURANCE plan maturity benefit is
guaranteed
In LIC plan maturity benefit is not
guaranteed
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Objectives of study
To determine and analyze the Market Potential of the Birla Sun Life
Insurance Company in MOGA City.
To study and determine the competitor (LIC) position in the market.
To analyze market share of Birla Sun Life Insurance products in Moga
city.
To analyze the customer satisfaction regarding LIC and IDBI FEDERAL
LIFE INSURANCE.
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RESEARCH METHODOLOGY-
MEANING OF RESEARCH-
Before understanding Research Methodology, we should understand
the meaning of research. Research in common parlance refers to a search for
knowledge. One can also define Research as a scientific and systematic search
for pertinence information on a specific topic. In fact, research is an art of
scientific investigation.
DEFINITION OF RESEARCH-
Research is a systematized effort to gain new knowledge”
Redmann & Mory
MEANING OF RESEARCH METHODOLOGY-
Research Methodology, it is a way to systematically solve the research
Problem. It may be understood as a science of studying how research is done
scientifically. In it we study the various steps that are generally adopted by the
researcher in studying his research problem along with the logic behind them.
It is necessary for the researcher to know not only the research.
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Data Collection: - The objectives of the project are such
that both primary and secondary data is required to achieve them. So both
primary and secondary data was used for the project. The mode of collecting
primary data is questionnaire mode and sources of secondary data are various
magazines, books, newspapers, & websites etc.
Primary data
The primary data are those data which are collected afresh and for the first
time, and thus happen to be original in character.
Secondary data
The secondary data on the other hand, are those which have already been
collected by someone else and which have already been passing through the
statistical process.
Sample size –
100 people of MOGA City were selected
Research ----- Purposive research
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88
89
1) Do you think that investment in Insurance sector
is good option?
Particulars No. of respondents
Yes 90
No 10
No. of respondents
yes, 90
no, 10
yes
no
Interpretation : 90 people say that investment in insurance sector is good
option and 10 are saying not.
90
2) Which company’s policy do you have?
Particulars No. of respondents
IDBI FEDERAL LIFE
INSURANCE
40
LIC 60
91
BSLI
LIC
No. of respondents
40
60
0
10
20
30
40
50
60
Interpretation: 40 people have IDBI FEDERAL LIFE INSURANCE policies and 60
have LIC.
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3) Which type of policy you have?
Particulars No. of
respondents
LIC
No. of
respondents
IDBI
FEDERAL LIFE
INSURANCE
Whole life plan 20 10
Retirement plan 10 4
Children plan 18 22
Health plan 6 4
Golden jubilee
plan
6 0
Total 60 40
93
20
10
18
6 6
10
4
22
4
00
5
10
15
20
25
No. of respondents LIC
No. of respondents BSLI
Interpretation: 20 people of LIC and 10 of Birla have whole life plan, 18 people of LIC
and 22 of birla have
Children plan.
4) What percentage of interest you get from it?
Particulars No. of
respondents
LIC
No. of
respondents
IDBI FEDERAL
LIFE
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INSURANCE
Below 5 % 0 0
5-8 % 14 6
8-12 % 42 28
Above12 % 4 6
0 0
14
6
42
28
46
0
5
10
15
20
25
30
35
40
45
Below 5 % 5-8 % 8-12 % Above12 %
No. of respondents LIC
No. of respondents BSLI
Interpretation: 14 people of LIC and 6 of Birla are getting 5-8% R.O.I., 42
people of LIC and 28 of Birla are getting 8-12% interest.
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5) Why do you invest in this(LIC/IDBI FEDERAL LIFE INSURANCE)
company?
Particulars No. of respondents
LIC
No. of respondents
IDBI FEDERAL LIFE
INSURANCE
High interest 8 12
Good image of CO. 12 4
Growth of the CO. 18 12
Annual premium is
reasonable
10 4
Maturity benefits 12 8
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8
12
18
10
12
12
4
12
4
8
0 5 10 15 20
High interest
Good image of CO.
Growth of the CO.
Annual premium isreasonable
Maturity benefits
Interpretation: 12 people of Birla are investing in this company due to its
high interest, 18 people of LIC say that they are investing in LIC due to growth
of the co.
6) Do you think that investment in IDBI FEDERAL LIFE INSURANCE is better
than LIC ?
Particulars No. of respondents
97
Yes 44
No 56
Interpretation: 44 people are saying that investment in IDBI FEDERAL LIFE
INSURANCE is better than LIC, but 56 are saying no.
(If NO then go to Q.N. 8 otherwise Q.N. 7)
7) If yes, then why?
98
Particulars No. of respondents
Guaranteed F.V. at maturity 10
Growth rate 16
More ULIP plan 8
Risk covered 4
All above 6
No. of respondents
10
16
8
4
6 Guaranteed F.V. atmaturity
Growth rate
More ULIP plan
Risk covered
All above
99
Interpretation: 16 people are saying that because IDBI
FEDERAL LIFE INSURANCE gives guaranteed F.V. at maturity time, 8 are
saying it has more ULIP plans.
8) If no, then why?
Particulars No. of respondents
LIC have govt. stake 24
Brand loyalty of LIC 14
Low A.P. than IDBI FEDERAL LIFE
INSURANCE
12
High return 6
100
LIC have govt. stake, 24
Brand loyalty of LIC, 14
Low A.P. than BSLI, 12
High return, 6
LIC have govt. stake
Brand loyalty of LIC
Low A.P. than BSLI
High return
Interpretation: 24 people are saying that investment in LIC is better it has
govt. stake, 14 are saying it has brand loyalty.
9) When company launch new product , then any information is given to
you about that product?
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Particulars No. of respondents
LIC
No.
of respondents
IDBI FEDERAL LIFE
INSURANCE
Yes 24 16
No 36 24N
o.
of
respondents
LIC
No.
of
respondents
BS
LI
Yes
No
36
2424
16
05
10152025303540
Yes
No
Interpretation: 24 people of LIC are saying yes and 36 are saying no, 16
people of IDBI FEDERAL LIFE INSURANCE are saying yes and 24 are
saying no about providing information.` 67
102
10) In near future, do you think IDBI FEDERAL LIFE INSURANCE will have high
growth rate?
Particulars No. of respondents
Agree 20
Neutral 26
Disagree 14
Can’t say 40
103
2026
14
40
0
5
10
15
20
25
30
35
40
Agree Neutral Disagree Can’t say
No. of respondents
No. of respondents
Interpretation: 20 people are saying that IDBI FEDERAL LIFE
INSURANCE will grow in future, 26 are saying it will be neutral, 40 can’t say,
and 14 are disagree.
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. Findings
90 people saying that investment in insurance sector is good option and
10 are saying no.
40 people have IDBI FEDERAL LIFE INSURANCE policies and 60
have of LIC.
10 people of IDBI FEDERAL LIFE INSURANCE have Whole life plan,
4 have retirement plan, 22 have children plan, 4 have health plan.
56 people are saying that investment in LIC is better than IDBI
FEDERAL LIFE INSURANCE, 44 are saying investment in IDBI
FEDERAL LIFE INSURANCE is better.
Most of the people of both LIC and IDBI FEDERAL LIFE
INSURANCE are getting rate of interest 8-12%
Most of the people have children plan of IDBI FEDERAL LIFE
INSURANCE.
Most of the people invest due to high interest of the policy in IDBI
FEDERAL LIFE INSURANCE
People have more faith in govt. Companies than the private.
14 people invest in LIC due to its brand loyalty.
26 people saying that IDBI FEDERAL LIFE INSURANCE growth will
be neutral in near future.
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SUGGESTIONS
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1) Information regarding new product should be provided
to the customers.
2) The company should find out the no. of people who are not having any of
the insurance plans through an intensive market research and motivate them to
get insured.
3) At some level Company should provide information to the customers about
the charges of the policy.
4) Company should target each and every class of the society.
5) Charges should be low of the policies.
6) Annual premium should be reasonable.
7) IDBI FEDERAL LIFE INSURANCE Company should work in systematic
way.
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LIMITATIONS
Some of the respondents were not cooperative.
There are chances of biased information provided by the
respondents.
As the sample size is small compared to the total population,
therefore there can’t be full accuracy.
The time was limited.
Area was limited.
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Conclusion
Here in this study we see that people have more policies of LIC in comparison
to IDBI FEDERAL LIFE INSURANCE. People have more faith in govt.
companies than private. So it is necessary for IDBI FEDERAL LIFE
INSURANCE Co. that it should give more attention to that points or that areas
where it lacks for further future growth. Insurance sector is very wide and co.
can grow in future.
112
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Bibliography
www.birlasunlife.com
www.licindia.com
www.google.com
Newspapers
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ANNEXURE
NOTE: The information that you will provide will be kept confidential
and will be used only for academic Purpose.
Our questionnaire will be to those persons who have plans of IDBI
FEDERAL LIFE INSURANCE or LIC.
GENERAL
Name
___________________________________________________________
_______
Addres____________________________________________________
_____________
Gender_________Age ________Contact No.
__________________________________
1. Do you think that investment in insurance sector is good option
(a) Yes (b) No
2. Which company’s policy do you have?
(a) Birla Sun Life Insurance (b) LIC
3. Which type of policy you have?
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(a)Whole Life Plan (b) Retirement Plan (c)
Children Plan (d) Health Plan
(e) Golden jubilee plan (f) any other please
specify___________________
4. What percentage of interest you get from it?
(a) Below 5% (b) 5-8% (c) 8-12% (d) Above 12%
5. Why do you invest in this company?
(a) High interest (b) good image (c) Company growth
(d) Annual premium is reasonable (e) due to maturity benefits
(f) Any other please specify ______________________________
6. Do you think that investment in IDBI FEDERAL LIFE INSURANCE is
better than LIC?
(a) Yes (b) No
( If your answer is no then jump to question no. 8)
7. if yes then why?
(a) Because IDBI FEDERAL LIFE INSURANCE gives guaranteed fund
value at maturity time
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(b) Growth rate of company is high (c) IDBI
FEDERAL LIFE INSURANCE has more ULIP plans than LIC
(d) Risk factor is covered properly (e) all above
(f) Any other (please specify)_____________
8. If no then why?
(a) Because LIC is having government stake. (b) Brand loyalty of LIC
(c) It has low premium plans than IDBI FEDERAL LIFE INSURANCE
(d) Investment return is higher than IDBI FEDERAL LIFE INSURANCE
(e) Any other (please specify)__________________________
9. Whenever company launch new product, then any information is given to
you about that product?
(a) Yes (b) No
10. In near future IDBI FEDERAL LIFE INSURANCE is having high growth
rate.
(a) Agree (b) neutral (c) disagree (d) can’t say
Any suggestions
__________________________________________________
THANKS
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