NITIN PROJECT REPORT[1].doc

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By:

NITIN GULATI

06bs2089

ICFAI Business School

B-101, Phase VIII, Industrial Area

Mohali-160060

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A REPORT

ON

COMPARATIVE ANALYSIS

OF

PRIVATE LIFE INSURANCE SCHEMES

IN

INDIA

A report submitted in partial fulfillment of

the requirements of

MBA Program of

ICFAI Business School

SUBMITTED TO: SUBMITTED BY:

Prof. Harjeet kaur Nitin Gulati

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(Project Guide) 06bs2089

ACKNOWLEDGEMENT

I felt my sincere gratitude towards Prof. Bhagat Ram (Dean, IBS Chandigarh) for

providing me the opportunity to do my summer internship in KARVY Stock broking

Limited.

I am very much thankful to Mr. Aman Mehta (Branch Manager, KARVY Stock

Broking Limited; Panchkula) for providing the valuable guidance and help during

my internship and completion of the project.

I would like to thankProf. Harjeet Kaur (Project Guide; Faculty IBS) for guiding

me throughout the Summer Internship Program.

Last but not the least I would like to thank all the persons directly or indirectly

involved.

(Nitin Gulati)

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TABLE OF CONTENTS

Acknowledgements

3

List of Illustrations

6

Abstract

7

1. Introduction

1.1 About KARVY Stock Broking Limited

8

1.2 About the project

11

1.3 Objective

11

1.4 Benefits to the company

12 1.5Limitations of the study

12

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1.6Methodology

12

2. Main Text

2.1. About Life Insurance

13

2.2. Life Insurance (History)

13

2.3. Types of life Insurance

14

2.4. Life Insurance Products

17

2.5. Investment Policies

18

2.6. Types of insurance plans

19

3. Life Insurers in Private Sector (Sorted)

22

ICICI Prudential Life Insurance 23

Life Insurance Corporation of India 23

AVIVA Life Insurance 24

HDFC Standard Life Insurance 25

4. Comparative Analysis (ULIP)

Unit Linked Endowment Plans 26

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Unit Linked Pension Plans 34

Unit Linked Child Plans 40

5. Analysis

44

6. Conclusions

46

7. Appendices

47

8. References

49

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LIST OF ILLUSTRATIONS

TITLE PAGE

NO.

a) KARVY Services

8

b) Investor Perception towards insurance schemes (Fig. 2)

45

c) Pie Chart (Fig.3)

45

TABLES

a) Comparative analysis of endowment plans (ULIP) (Table 1)

26

b) Comparative analysis of endowment plans Contd. (ULIP) (Table 2)

30

c) Comparative analysis of pension plans (ULIP) (Table 3)

34

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d) Comparative analysis of pension plans Contd. (ULIP) (Table 4)

37

e) Comparative analysis of child plans (ULIP) (Table 5)

40

ABSTRACT

The Project Comparative Analysis of Private life Insurance Schemes in India deals

with the private companies and comparison of the life insurance products being

offered by them. As there are many companies offering life insurance, so its not

easy to compare products offered by all the companies. So as to get a proper

comparison a few of the companies are taken into consideration.

This project deals with information regarding life insurance, types of life insurance

(term, universal, whole life, and endowment life insurance), life insurance

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products(Joint life, Survivorship life or second-to-die life Single premium whole life,

Modified whole life ,Group life insurance) , investment policies (With-profits

policies, pensions, Annuities), types of insurance plans(Unit Linked Insurance

Product (ULIP), traditional plans), life insurers in private sectors and how

and when the private companies started their life insurance products and their private

partners.

It contains the comparative analysis of few private life insurance companies offering

Unit Link Endowment plans, Pension Plans and child plans.

Finally, a sample of 50 people has been taken and survey has been done using

questionnaire method. Bar graphs and pie-charts have been made completely based

on the survey. Comparison is also based on the basis of returns of the policies

INTRODUCTION

ABOUT KARVY STOCK BROKING LIMITED:

The birth of Karvy was on a modest scale in 1981. It began with the vision and

enterprise of a small group of practicing Chartered Accountants who founded the

flagship company Karvy Consultants Limited. It started with consulting and

financial accounting automation, and carved inroads into the field of registry and

share accounting by 1985.

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KARVY Stock broking Limited are the first Registrar and Transfer Agents. Karvy

Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely

towards attaining diverse goals of the customer through varied services. Creating a

plethora of opportunities for the customer by opening up investment vistas backed by

research-based advisory services. Here, growth knows no limits and success

recognizes no boundaries. Helping the customers create waves in his/her portfolio

and empowering the investor completely is the ultimate goal. Fig. 1

KARVY has established itself as an electronic custodian registered with National

Securities Depository Ltd. (NSDL) and Central Securities Depository Ltd. (CSDL) in

1998. Karvy set standards enabling further comfort to the investor by promoting

paperless trading across the country and emerged as the Top 3 Depository

Participants in the country in terms of customer serviced.

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KARVY - Indias premier integrated personal financial advisory group with a wide

network of 575 offices & 7300 professionals operating from 387 towns/cities and

also established presence in UAE & USA.

KARVY, ranked among the top five in the country in all its business segments,

services over 16 million individual investors in various capacities, and provides

investor services to over 300 corporates, comprising the who is who of Corporate

India.

KARVY covers the entire spectrum of financial services such as Stock Broking,

Demat Services, Insurance, Wholesale/Retail Debt, Primary Market, Mutual Funds,

Fixed Deposits, Loan Products Distribution, Investment Banking, Registrars & Share

Transfer Agents, Medical Transcription, BPO, Realties.

It is an undisputed fact that the stock market is unpredictable and yet enjoys a high

success rate as a wealth management and wealth accumulation option. The difference

between unpredictability and a safety anchor in the market is provided by in-depth

knowledge of market functioning and changing trends, planning with foresight and

choosing ones options with care.

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KARVY deliversadvisory services to a cross-section of customers. The service

is backed by a team of dedicated and expert professionals with varied experience and

background in handling investment portfolios. They are continually engaged in

designing the right investment portfolio for each customer according to individual

needs and budget considerations with a comprehensive support system that focuses

on trading customers' portfolios and providing valuable inputs, monitoring and

managing the portfolio through varied technological initiatives.

Thus over the last 20 years Karvy has traveled the success route, towards building a

reputation as an integrated financial services provider, offering a wide spectrum of

services. And it has made this journey by taking the route of quality service, path

breaking innovations in service, versatility in service and finallytotality in service.

Its highly qualified manpower, cutting-edge technology, comprehensive

infrastructure and total customer-focus has secured for us the position of an emerging

financial services giant enjoying the confidence and support of an enviable clientele

across diverse fields in the financial world.

ABOUT THE PROJECT

The project Comparative Analysis of Private Life Insurance Schemes in India deals

with various Private Life Insurance Companies. The schemes offered by these

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companies are to be compared in this project. This project will serve as an analytical

tool in the hands of people so as to invest properly for their future. The insurer (the

life insurance company) calculates the policy prices with intent to recover claims to

be paid and administrative costs, and to make a profit. The cost of insurance is

determined using mortality tables calculated by actuaries This project will come out

with particular options for the investor on the basis of survey of various life

insurance offering private companies. This project will serve as an analytical tool in

the hands of the investor to properly invest so as to get the future benefits.

OBJECTIVE

The project will provide the comparative analysis of all the private Life

Insurance Companies offering different Life Insurance Schemes.

The project will provide a better investment option to the investor.

BENEFITS TO THE COMPANY

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As Karvy Stock Broking Company is one of the Indias premier integrated financial

service enterprise, this project will provide customers with better options in life

insurance. With this analytical tool the financial consultant of the company can easily

analyze the various schemesof the companies and recommend it to their investors

according to their needs and requirement. This will help the company to get a upper

hand in the market.

LIMITATIONS OF THE STUDY:

Potential customers are having a mindset for schemes offered by Life

Insurance Corporation of India .So; the scope is limited for private

insurance companies.

METHODOLOGY:

The data collected for the project is secondary data completely based on the

brouchers of the various schemes issued by the company. Different fact sheets are

also taken into consideration and seminars from various life insurance companies

consultants are also helping in this respect. Various private companies sites that areoffering life insurance are also referred. Views of customers regarding Life Insurance

are of great help. Survey has been done by taking a sample of 50 people.

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MAIN TEXT

ABOUT LIFE INSURANCE:

Life insurance orlife 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's death. In return, the policy owner (or policy payer) agrees to pay a

stipulated amount called a premium at regular intervals.

Life Insurance (History)

Life Insurance in India was nationalized by incorporating Life Insurance

Corporation (LIC) in 1956. All private life insurance companies at that time were

taken over by LIC. In 1993 the Government of Republic of India appointed RN

Malhotra Committee to lay down a road map for privatization of the life insurancesector. While the committee submitted its report in 1994, it took another six years

before the enabling legislation was passed in the year 2000, legislation amending the

Insurance Act of 1938 and legislating the Insurance Regulatory and Development

Authority Actof 2000. The acme year that the newly appointed insurance regulator -

Insurance `Regulatory and Development Authority IRDA -- started issuing licenses

to private life insurers.

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Insured events that may be covered include:

death,

diagnosis of a terminal illness,

diagnosis of a critical illness,

disability due to ill health,

permanent disability,

accidental death

requirement for long term care

I. Types of life insurance:

Life insurance may be divided into two basic classes temporary and

permanent or following subclasses - term, universal, whole life, and endowment life

insurance.

Temporary (Term):

Term life insurance (term assurance in British English) provides for life

insurance coverage for a specified term of years for a specifiedpremium. The policy

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does not accumulate cash value. Term is generally considered "pure" insurance,

where the premium buys protection in the event of death and nothing else. Term

insurance premiums are typically low because both the insurer and the policy owner

agree that the death of the insured is unlikely during the term of coverage.

Term assurance is a straightforward protection business. A policy holder

insures his life for a specified term. If he dies before that specified term is up, his

estate or named beneficiary(ies) receive(s) a payout.

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

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

against the industry, payouts do occur on death by suicide (presumably except for in

the unlikely case that it can be shown that the suicide was just to benefit from the

policy).

If an insured person commits suicide within the first two policy years, the insurer

will return the premiums paid. However, a death benefit will usually be paid if the

suicide occurs after the two year period.

Permanent:

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Permanent life insurance is life insurance that remains in force until the

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

policy expires). The policy cannot be cancelled by the insurer for any reason except

fraud in the application, and that cancellation must occur within a period of time

defined by law (usually two years).

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

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

policy with a million dollars face value can be relatively inexpensive to a 70 year oldbecause the actual amount of insurance purchased is much less than one million

dollars. The owner can access the money in the cash value by withdrawing money,

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

value.

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

endowment.

Whole life coverage

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

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

life are guaranteed death benefits; guaranteed cash values, fixed and known annual

premiums, and mortality and expense charges will not reduce the cash value shown

in the policy.

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The primary disadvantages of whole life are premium inflexibility, and the internal

rate of return in the policy may not be competitive with other savings alternatives.

Riders are available that can allow one to increase the death benefit by paying

additional premium.

Universal life coverage

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

provide permanent insurance coverage with greater flexibility in premium payment

and the potential for a higher internal rate of return. A universal life policy includes a

cash account. Premiums increase the cash account. Interest is paid within the policy

(credited) on the account at a rate specified by the company. This rate has a

guaranteed minimum but usually is higher than that minimum. Mortality charges and

administrative costs are charged against (reduce) the cash account.

Endowments

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

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

known as the endowment age. Endowments are considerably more expensive (in

terms of annual premiums) than either whole life or universal life because the

premium paying period is shortened and the endowment date is earlier.Endowment

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Insurance is paid out whether the insured lives or dies, after a specific period (e.g. 15

years) or a specific age (e.g. 65).

II. Life Insurance products:

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

issued. A common rider is accidental death, which used to be commonly referred to

as "double indemnity", which pays twice the amount of the policy face value if death

results from accidental causes, as if both a full coverage policy and an accidental

death policy were in effect on the insured. Another common rider is premium waiver,

which waives future premiums if the insured becomes disabled.

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

lives with the proceeds payable on the first death.

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

lives with the proceeds payable on the second (later) death.

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

payable at the time the policy is issued.

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

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

of the policy.

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

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

proof of insurability is not normally a consideration in the underwriting.

III. Investment policies:

With-profits policies

Policies which allow the policyholder to participate in the profits of the

insurance company are with-profits policies. With-profits policies are used as a form

ofcollective investment to achieve capital growth. Other policies offer a guaranteed

return not dependent on the companies underlying investment performance; these are

often referred to as without-profitpolicies which may be construed as a misnomer.

Pensions

Pensions are a form of life assurance. A pension fund will be built upthroughout a person's working life. When the person retires, the pension will become

in payment, and at some stage the pensioner will buy an annuity contract, which will

guarantee a certain pay-out each month until death.

Annuities

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

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

pre-determined intervals. There are two periods:

The accumulation (when payments are paid into the account)

The annuitization (when the insurance company pays out)

IV. Types of Insurance Plans:

Insurance plans can be distinctly divided into ULIPs and traditional plans.

Unit Linked Insurance Product (ULIP)

ULIPs have gained high acceptance due to attractive features they offer. These

include:

Flexibility

1. Flexibility to choose Sum Assured.

2. Flexibility to choose premium amount.

3. Option to change level of Premium /Sum Assured even after the planhas started.

4. Flexibility to change asset allocation by switching between funds.

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Transparency

1. Charges in the plan & net amount invested are known to the customer2. Convenience of tracking ones investment performance on a daily basis.

Liquidity

1. Option to withdraw money after few years (comfort required in case of

exigency)

2. Low minimum tenure.

3. Partial / Systematic withdrawal allowed

Fund Options

1. A choice of funds (ranging from equity, debt, cash or a combination)

2. Option to choose your fund mix based on desired asset allocation

Traditional Plans

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These are the oldest types of plans available. These plans cater to customers

with a low risk appetite. Some of the common features of traditional plans are:

Steady Investment

1. Major chunk of investible funds are in debt instruments

2. Steady and almost assured returns over the long term

Features

1. Death benefit is Sum Assured + guaranteed & vested bonus

2. Helps in asset creation as they are for a long tenure

3. Premium to Sum Assured ratios are fixed for each plan and age.

V. Life Insurers in Private Sector (Sorted) :

ICICI Prudential Life Insurance

Bajaj Allianz Life

HDFC Standard Life

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SBI Life Insurance

Life Insurance Corporation Of India

Aviva Life Insurance

Reliance Life Insurance Company Limited - Formarly known as AMP

Sanmar LIC


ICICI Prudential Life Insurance is a joint venture between the ICICI Group and

Prudential plc, of the UK. ICICI started off its operations in 1955 with providing

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finance for industrial development, and since then it has diversified into housing

finance, consumer finance, mutual funds to being a Virtual Universal Bank and its

latest venture Life Insurance.

Foreign Partner:

Established in 1848, Prudential plc. of U.K. has grown to be the largest life insurance

and mutual fund company in U.K. Prudential plc. has had its presence in Asia for the

past 75 years catering to over 1 million customers across 11 Asian countries.

Life Insurance Corporation of India (LIC)

The Life Insurance Corporation (LIC) was established about 44 years ago with a

view to provide an insurance cover against various risks in life. A monolith then, the

corporation, enjoyed a monopoly status and became synonymous with life insurance.

Its main asset is its staff strength of 1.24 lakh employees and 2,048 branches and

over six lakh agency force.

LIC has hundred divisional offices and has established extensive training facilities at

all levels. At the apex, is the Management Development Institute, seven Zonal

Training Centres and 35 Sales Training Centres.

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At the industry level, along with the Government and the GIC, it has helped establish

the National Insurance Academy. It presently transacts individual life insurance

businesses, group insurance businesses, social security schemes and pensions, grants

housing loans through its subsidiary; and markets savings and investment products

through its mutual fund. It pays off about Rs 6,000 crore annually to 5.6 million

policyholders.

AVIVA LIFE INSURANCE:

Aviva is UKs largest and the worlds fifth largest insurance Group. It is one of the

leading providers of life and pensions products to Europe and has substantial

businesses elsewhere around the world. With a history dating back to 1696, Aviva

has a 35 million-customer base worldwide. It has more than 364 billion of assets

under management.

For three consecutive years in 2003 2004 and 2005, Aviva has had relatively high

scores on the parameters of Credibility, Respect, Fairness, Pride and Camaraderie in

the survey administered by Grow Talent Company Ltd. along with Great Places to

Work Institute, Inc. and Business World magazine.

HDFC Standard Life Insurance

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HDFC Standard Life Insurance Co. Ltd. is a joint venture between HDFC Ltd.,

Indias largest housing finance institution and Standard Life Assurance Company,

Europes largest mutual life company. Incorporated on 14th August 2000, it was the

first life company to be granted a certificate of registration by the IRDA on the 23rd

of October 2000.

Foreign Partner: Standard Life, UK

Standard Life, UK, founded in 1825, has been at the forefront of the UK insuranceindustry for 180 years by combining sound financial judgement with integrity and

reliability. The company is rated as very strong by Standard & Poors (AA) and

Excellent by Moodys (Aa2).

HDFC Standard Life Insurance is one of the leading private life insurance

companies. The company generated premium from new business of Rs. 486 Cr in

2004-05, registering a year-on-year growth of over 132%.

The total premium income (including renewal premium) grew by 130% to touch a

figure of Rs. 687 Crores. The company also achieved a major milestone during the

financial year by crossing a Sum Assured figure of Rs. 30,000 Cr. The company also

declared its fifth bonus for participating policyholders.

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Comparative Analysis of Unit Linked Endowment Plans

Table 1

S.NO FEATURES AVIVA LIFEINSURANCE

CO. LTD

HDFCSTD. LIFE

INSURANCE

CO

RELIANCE LIFEINSURANCE CO LTD

1 Name of the

Product

Save Guard Unit Linked

Endowment

Plan

Reliance Market Return

Plan

2 SpecialFeature

InvestmentOpportunity and

Life risk cover

without Medical

Examination

Unit Linked

Plan with theplan benefits

option like:-Life

Option- Death

benefit, Extra

Life Option -

Death Benefit+

ADB,Life &

Health Option

-Death benefit

+C.I Benefits,

Extra Life &

Health Option

DB+CIB+ADB

Unit linked plan withMax Maturity age at 80

yrs.

3 Minimum &

Maximum

Age at entry 18 yrs & 50 Yrs( Age last

birthday)

18 yrs - Max age

at entry - 65 Yrs

for Life Option.55 Yrs for other

three options

namely Extra

Life Option,Life

30 days to 65 yrs

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& Health Option

and Extra Life &

Health Option

4 Minimum &

Maximum

Term

10, 15, 20, 25 or

30 yrs

10 Yrs & 30

Yrs

5 yrs - 40 yrs

5 Maximum

Age at

maturity

70 yrs

75 Yrs for Life

Option. 70 Yrs

for Extra LifeOption. 65 Yrs

for the other two

options.

80 yrs

6 Minimum &

Maximum

Premium

Minimum AP is

Rs.12000/-

Maximum

Rs.3,60,000/-

( Annual Premium

is multiple of

Rs.6000/-)

Rs.10000/-. PA

Min AP Rs.10000, Hly

-Rs 5000, Qly -Rs

2500, Mly- Rs 1000, S.P

-Rs. 25000.

7 Top up

Premium

Allowed.

Mimimum Top Up

Amount is Rs.

3000/-

Allowed Minimum Top

up premium is Rs 2500.

Top up premiums paid

over & above 25% of

RP will lead to increase

in SA to the extent of

125% of excess top uppremium

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8 Minimum &

Maximum

S.A

0.5 x Policy Term

x Annual

Premium.

Max S.A is 18 lacs

Minimum SA=

Term of Policy /

2 x A.P. Max

SA = 40 x A.P

5* A.P for term of 5 yrs

or Term/2 *A.P

whichever is higher. For

SP -125% of SP.

Maximum -No Limit(Rs 5 lacs for age upto

12 yrs)

9

Premium

Payment

options

Yly, Hly , Qly or

Mly

( For Mly only

Direct Debit or

ECS only)

Yly, Hly, Qly or

Mly

( Mly allowed

by Standing

Instructions or

by ECS only)

Yly Hly Qly or mly or

SP

# Death

Benefit

In case of Death

the S.A minus

partial

withdrawals made

within last 2yrs

prior to death. If

death occurs after

60 yrs the S.A willbe reduced with

all the partial

withdrawals made

after age 58 till

death.Incase of

death during the

1st yr.Higher of

110% of A.P. or

Fund Value. From

2nd onwards,Higher of SA or

fund value will be

paid. The value of

top premiums if

In case of Death

during the

Policy Term,

Greater of the

S.A ( Minus any

withdrawalsmade during the

2 yrs preceeding

the intimation of

death) and the

Total Fund

Value to the

beneficiary. The

Benefits under

ADB if due will

also be paid ifthe same was

opted for by the

LA

In case unfortunate loss

of life , the beneficiary

will receive SA or unit

A/c value whichever ishigher

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any, will also be

allowed

# Maturity

Benefit

Fund Value of

Regular Premium

& Top up

Premiums. The

Customer can also

opt to receive part

of Maturity value

or Whole of

Maturity Value inInstalments

Fund Value of

the Unit Balance

will be paid. The

customer can

also opt to

receive the

maturity value

as per the

settlementoptions over a

period of 5yrs

Fund value of unit A/c

will be paid settlemtnt

options available to take

maturity value in

instalments

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Comparative Analysis of Unit Linked Endowment Plans (Contd.)

Table 2

S.NO FEATURES SBI LIFE

INSURANCE

CO

BAJAJ

LIFE

INSURANCE

CO

ICICI PRUDENTIAL

LIFE INSURANCE CO

LTD

1 Name of the

Product

Unit Plus II

Regular

New Unit Gain

Plus

Life Time Super

2 SpecialFeature

A Regular

Investment Unit

Linked Productwith Life Cover.

Guaranteed

addition of Free

Allocation of

A regular

Investment-

An Investment plan for

long term. Additional

allocation of units at

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Units as a % of

FYr Annual

Premium allowed.

Can be taken as

Whole Life Policyalso ie - till one

reaches 99 Yrs

Unit Linked

Product; with

Life cover

option

regular intervals (every

4th yr) is a special feature

3 Minimum &

Maximum

Age at entry 0 yr to 65 yrs

0 yr to 60 yrs.

( Risk

commences at

Age 7 )

Minimum age at

entry for

AdditionalBenefits is 18

yrs. Max Age at

entry for

additional

benefits -50yrs

0 yrs - 65 yrs

4 Minimum &

Maximum

Term

5yrs- 40 yrs. Min

Term for Minor

life is 18 minus

age at entry or

5yrs

10yrs Max 70

yrs

10 yrs - 75 yrs

5 Maximum

Age at

maturity

80 yrs

70 yrs. All

Additional

Benefits

available up to65 Yrs.

75 yrs

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6 Minimum &

Maximum

Premium

Minimum AP is

Rs. 24000 and

further multiples

of Rs. 100/-

Min Rs 15000/-

A.P, Rs 7500

for Hly, Rs

3750 for Qly &

Rs.1500 forMly.(For Mly,

SDS or ECS

only allowed )

Minimum Premium is Rs

18000

7 Top up

Premium

Allowed sub to

minimum Rs

10000

Allowed.

Minimum

Topup premium

Rs 5000.

Not available Under this

Policy

8 Minimum &

Maximum

S.A

For term 5 to 10yrs 5 * A.P. For

term II yrs &

above

Term/2*AP. Max

SA is AP

multiplied by a

factor depending

upon the age at

entry .For age 0 to4 yrs -50 times of

A.P; 41 to 50 yrs-

40 times A.p, 51

to 60 yrs 25 times

A.P and 61 to 65

yrs 20 times A.P.

Minimum SA is5 times A.P or

Term/2 * A.P

which ever is

higher. Max SA

is 'Y' times the

AP where Y is a

factor as per the

table which

varies form 15

to 125.

Term / 2 * A.P sub toMinimum of Rs 100000

9

Premium

Paymentoptions

Yly Hly Qly or

Mly

Yly Hly Qly or

Mly

Yly, Hly, Mly

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# Death

Benefit

Higher of Fund

alue or S.A, less

withdrawals made

during last 12

calender months.If death takes

place before 7yrs,

the Fund Value

will be paid.

On death before

age 7, the NAV

of units inL.A's

A/c will be

paid. If deathtakes place after

7yrs before 60

Yrs, Higher of

SA or NAV of

units will be

paid sub to

deduction of

partial

withdrawals

made in the last24 months. If

death takes

place after 60

Yrs, Higher of

SA or NAV of

units less all

withdrawals

made within

2yrs before 60and all

withdrawals

made

subsequent to

60 Yrs will be

paid.

The beneficiary would

receive Higher of S.A

( Net ofpermissible

withdrawals) or the Fund

Value.Incase L.A isbelow 7yrs of Age; incase

of death only the Fund

Value would be payable.

Upto Age 60yrs, SA

payable on death is

reduced to the extent of

partial withdrawals made

within the proceding 2

yrs. After 60 yrs SA is

reduced by all partialwithdrawals made from

58 yrs.

# Maturity

Benefit

Fund value as on

date is paid in full

Fund value as

on the date of

Maturity.

Settlement

On Maturity the Fund

Value of the units at thetime of maturity is

payable. The customer

can also opt to receive the

Maturity value in

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options

available to take

Maturity Value

in instalments

Instalments as per

settlement options.

Comparative Analysis of Unit Linked Pension Plans

Table 3

S.NO FEATURES ICICI

PRUDENTIAL

LIFEINSURANCE

CO

AVIVA LIFE

INSURANCE

CO LTD

HDFC LIFE

INSURANCE CO LTD

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1 Name of the

Product

Life Time Super

Pension

Pension Plus Unit Linked Pension

2 Special

Feature

Good Investment

Opportunity and toprovide Post

Retirement

Income with Life

Insurance Cover

Option. There are

2 phases.

Accumulation

Phase & Annuity

Phase

Investment

opportunity andto provide for

pension as

Retirement

Income. No Life

Cover

Investment Opportunity

and to provide forRetirement Income. No

Life Cover

3 Minimum &

Maximum

Age at entry

18 yrs- 65 yrs 18 yrs- 65 yrs

18 yrs. Max 65 yrs for

Regular Premium. 70

Yrs for S.P

4 Minimum &

Maximum

Term

10 Yrs- 57 Yrs

Minimum 5 yrs

Max upto

vesting Age 70

10 Yrs for Regular

Premium. 5 yrs for S.P.

Max term 40 Yrs

5 Maximum

Cover

ceasing Age

75 yrs

Not Applicable

since there is no

life cover.

Not Applicable since

there is no life cover.

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6 Min & Max

Vesting Age

Min & Max

Vesting Age 40Yrs- 70 Yrs 50 Yrs- 75 Yrs

7 Premium

Payment

Frequency

Yly, Hly, Mly Yly, /Hly, Qly,

Mly, ( For Mly

only Direct

Debit or ECS

only). S.P. is

also allowed

Yly, /Hly, Qly, Mly,

( For Mly only Direct

Debit or ECS only). S.P.

is also allowed

8

Minimum

Premium

Rs.10000 Yly, Rs.

5000Hly, Rs 834

Mly

Rs 6000 Yly.

For SP it is Rs

One Lac

Rs 10000 P.A for

Regular Premium. Rs

25000 for S.P

9

Top Up

Premiums

Not Available in

this plan

Top up

Premium

Allowed sub to

Minimum Rs

10000/-

Allowed. Minimum Top

up is Rs 5000

#

Min & Max

Sum Assured

Minimum Rs 1

lac. Max= AP *

Term of Policy.

The customer can

opt for Zero S.A

and make it a Pure

Investment Plan

Not Available.

No Life Cover

Not Available. No Life

Cover

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#

Maturity

Benefit

( Benefit onVesting )

The Annitant has

the option to take

1/3rd of the corpus

fund tax-free in

lumpsum. Thebalance will be

utilised for

purchase of

Annuituy. The

Annuity can be

paid Mly, Qly,

Hly, or Yly asper

choice of

Annuitant.

The Annitant

has the option to

take 1/3rd of the

corpus fund

tax-free inlumpsum. The

balance will be

utilised for

purchase of

Annuituy. The

Annuity can be

paid Mly, Qly,

Hly, or Yly

asper choice of

Annuitant.

The Annitant has the

option to take 1/3rd of

the corpus fund tax-

free in lumpsum. The

balance will be utilisedfor purchase of

Annuituy. The Annuity

can be paid Mly, Qly,

Hly, or Yly asper choice

of Annuitant.

#

Death

Benefit

The spouse has

the option to

receive higher of

SA or Fund

Value in

Lumpsum or opt

for Annuity from

the Co..Howeverif the Spouse is

not the Nominee,

the benefits will be

paid in lumpsum

to the Nominee

If death occurs

during the 1st

Pol Yr 90% of

Fund Value is

paid . If death

occurs after 1st

Yr 100 % of

Fund Value &Final Addl.

Bonus if any is

also is paid.

Fund Value of Units will

be paid to the

Beneficiary.

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Comparative Analysis of Unit Linked Pension Plans (Contd.)

Table 4

S.NO FEATURES LIFE

INSURANCE

CORPORATION

OF INDIA

BAJAJ

ALLIANZ

LIFE

INSURANCE

CO LTD

RELIANCE LIFE

INSURANCE CO

1 Name of the

Product

Market Plus New UnitGain

Easy Pension

Plus

Reliance Golden Years

Plan

2 Special

Feature

Unit Linked

Pension Plan.

With & Without

Life Cover

available.

Provides Pension

on Retirement

Regular

Premium

Investment Plan.

Provides

pension on

retirement. No

Life Cover

Regular Premium

Investment Plan.

Provides Pension on

retirement. Option to

add Term Life

Insurance

3 Minimum &

Maximum

Age at entry

18 Yrs completed

& Max 70 yrs Age

Nearer Birthday.

For Life Cover

option. Max Age

at entry-65 yrs

18 yrs- 65 yrs 18 yrs- 65 yrs

4 Minimum &

Maximum

Term

Minimum Term 5

yrs. Max upto

vesting age 75 Yrs.

5yrs- 40 yrs 5 Yrs- 52 yrs

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5 Maximum

Cover

ceasing Age

75 yrs

Not Applicable

since there is no

life cover.

70 yrs

6 Min & Max

Vesting Age

40 Yrs- 75 Yrs 45 Yrs- 70 Yrs 45 yrs - 70 yrs

7 Premium

Payment

Frequency

Yly, /Hly, Qly,

Mly, or S.P.

Yly, /Hly, Qly,

Mly, ( For Mly

only Direct

Debit or ECS

only)

Yly, Hly, Qly or Mly or

SP ( Lumpsum

Premium)

8

Minimum

Premium

Rs 5000 P.A for

Regular Premium..

For S.P. it is Rs

10000

Rs 10000 for

Yly, Rs 5000 for

Hly, Rs 2500 for

Qly, Rs 1000 for

Mly

Yly, Rs 10000, Hly Rs

5000, Qly Rs.2500, Mly

Rs 1000 /-( for Sal

deduction scheme) Rs.

2500 for ( standinginstructions / Cr card.)

for SP (lumpsum) Min

Rs.10000/-

9

Top Up

Premiums

Allowed.

Minimum Top up

is Rs 1000

Allowed.

Minimum Top

up is Rs 5000

Allowed. Min Top up

amount is Rs 2500/-

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#

Min & MaxSum Assured

Minimum SA for

Regular Premium

Rs 50000. For S.P

it is Rs 25000.

Max 20 *AP forRegular Prem. For

SP, it is equal to

S.P.

Not Available.

No Life Cover

Min Rs 1. lac. .Max No

limit

#

Maturity

Benefit

( Benefit on

Vesting )

The Annitant has

the option to take

1/3rd of the corpus

fund tax-free in

lumpsum. The

balance will beutilised for

purchase of

Annuituy. The

Annuity can be

paid Mly, Qly,

Hly, or Yly asper

choice of

Annuitant.

The Annitant

has the option to

take 1/3rd of the

corpus fund

tax-free in

lumpsum. Thebalance will be

utilised for

purchase of

Annuituy. The

Annuity can be

paid Mly, Qly,

Hly, or Yly

asper choice of

Annuitant.

The Annuitant has the

option to take 1/3rd of

the Corpus Fund (Full

Account Value) as

commuted value. The

balance would beutilised for purchase of

Annuity. The annuity

can be paid as per the

option of the Annuitant.

#

Death

Benefit

If Life cover is

opted for SA +

Fund Value of

Units payable

either in

lumpsum or as

pension. If Life

Cover is not opted

for, then the FundValue of Units

either in lumpsum

or as pension is

payable

Incase of

Unfortunate of

death, the Fund

Value of Units

will be paid to

the Beneficiary.

The Beneficiary

(spouse) will

have option topurchase

Annuity.

In case of unfortunate

death during the

accumulation period, the

Beneficiary can choose

to take value of Unit A/c

in lumpsum or purchase

an Annuity for entire

lumpsum or for a

portion thereof.

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3 Minimum &

Maximum

Age at entry

For Child Between

0-15 yrs. For

Parent 20 yrs to 60

yrs

For Child 0 Yrs

to 17 yrs. For

Parent 21 yrs to

55 yrs

18 yrs -max 65 yrs for

Life option. 18 - 55 yrs

for Life & Health

Option

4 Minimum &

Maximum

Term

10 yrs--25 yrs 8yrs to 21 yrs. If

the child's age is

0 - 13 Yrs, then

the term is 21

minus Age. If

the child's age is

14 - 17 Yrs then

the term is 25minus Age.

10 yrs -- 25 yrs

5

Max Age at

Maturity

75 ys for Parent

Min-18yrs and

Max 25 yrs for

child

65 yrs 75 Yrs for Life Option.

65 Yrs for Life & Health

Option.

6 Annual

Premium

Minimum Rs.

10000/-

Minimum Rs

6000

Minimum Rs. 10000/-

7

Minimum

and Max

Sum Assured

Term/2 x A.P.

Min Rs.1 lac

Min Rs 36000.

Max One Crore.

For each policy

term there is

Low and HighSA to choose

ranging from 6

to 21 times of

A.P.

Min 5 x A.P. Max 40 x

A.P.

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8

Premium

Payment

Frequency

Yly, Hly, Qly, or

Mly. For Mly

only Direct Debit

or ECS allowed.

Yly, Hly, Qly or

Mly. For Mly,

only Direct

Debit or ECS

allowed.

Yly, Hly, Qly, or Mly

9

Riders

1BR, ADBR &

WOPR sub to

charges

No Rider

Benefit

available under

the scheme

As per the benecit type

chosen

# Top UpPremiums Not available

Top ups

allowed.

Minimum Rs

1500/- The Total

Top up premium

should not

exceed 25 % of

the total RegularPremium paid

till date. Units

purchased from

Top up Premium

would also be

allocated to the

respective funds

selected for

regular

premium.

Allowed. Minimum Topup is Rs.5000/-

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# Death

Benefit

In the event of

unfortunate Death

of Parent, during

the term of Policy.

(a) SA is paidimmediately (b)

Future payment of

premiums waived

till the maturity of

policy (c) The

Policy Benefits

continue for the

child as planned

In the event of

death during the

term, the SA

plus fund value

of RegularPremiums

payable. The

value of Top up

premiums if any

would also be

paid

SA is paid to the

Beneficiary child. Policy

will continue and the Co

will, pay future

premiums, until thechosen period. Any C.I

cover, terminates

immediately. Child is

the Beneficiary. If the

child is minor, the

amount will be paid to

the appointee

# Maturity

Benefit

The Fund Value of

units on the date of

maturity.

Alternatively

settlement options

to receive the

amount in

instalmentsavailable.

Fund value( Regular

Premiums ) in

Lumpsum will

be paid and

terminate the

policy or opt for

receiving the

value in full or

part of the samein instalments as

per settlement

options.

Fund value ( Regular

Premiums ) in Lumpsum

will be paid and

terminate the policy or

opt for receiving the

value in full or part of

the same in instalmentsas per settlement

options.

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ANALYSIS

The analysis of private life insurance schemes has been done on the basis

of a survey done over 50 persons. Their responses serve as a base for the

analysis. Following are the results of the survey:

POLICIES No. of persons

ICICI Prudential Life Insurance ---- 5

Bajaj Allianz Life ---- 2

HDFC Standard Life ---- 4

SBI Life Insurance ---- 4

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Life Insurance Corporation Of India ---- 25

Aviva Life Insurance ---- 3

Reliance Life Insurance Company Limited ---- 7

INVESTOR PERCEPTION TOWARDS INSURANCE SCHEMES

0

510

15

20

25

30

ICICI

Prudential

Life

Insurance

Bajaj Allianz

Life

HDFC

Standard Life

SBI Life

Insurance

Life

Insurance

Corporation

Of India

Aviva Life

Insurance

Reliance Life

Insurance

Company

Limited

SCHEMES

P

ERCENTAG

Figure 2

49
http://en.wikipedia.org/wiki/Reliance_Life_Insurance_Company_Limitedhttp://en.wikipedia.org/wiki/Reliance_Life_Insurance_Company_Limited


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Bajaj Allianz Life

HDFC Standard Life

SBI Life Insurance

Life Insurance Corporation Of India

Aviva Life Insurance

Reliance Lif e Insurance Company

Limited

Figure 3

CONCLUSIONS

From all the analysis done, the result comes out to be in favor of Life Insurance

Corporation of India. People are having a mindset for L.I.C. Before 2000 LIC was

only the single player in the market. As people are still having a mind set for LIC,

This fact has been proved from the survey done. The returns that come from the life

insurance schemes are much better than that from private life insurance schemes. The

rebate in each of the private life insurance schemes is also much more as compared

to it.

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APPENDICES

QUESTIONNAIRE

1. Do you have any insurance policy?

Yes No

2. Who is your insurer or who would you like to be your insurer?

LIC Both

Private insurance co. None

If private co. (please specify):______________________________

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3. Who is your agent/advisor if insured?

Professional

Friend/Relative

Others

4. Are you satisfied with the services of your insurance co. (if insured)?

Satisfied Neutral Dissatisfied

5. Are you in favor of privatization of insurance companies in India?

Yes No

6. How would you rate private insurance companies in comparison to LIC?

Excellent Good Fair Poor

7. What was or will be the purpose of you behind taking an insurance policy?

Economic security Pension benefits

Investment Tax saving

8. Please tick the policies to which you are familiar?

Term assurance plans Endowment policiesMoney back policies Pension schemes

ULIP Children policies

9. How much of your income would you like to invest in insurance annually?

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Rs. 1000-5000 Rs.6000-10000

Rs. 1100-20000 Rs. 20000 & above

10.Are you aware with IRDA & its role in insurance sector?

Yes No

11. Are you aware of new health insurance policies?

Yes No

12. Given a choice you would prefer to invest in: (only tick your first preference)Bank (fixed deposits) Stock

Post office Mutual funds

NSC Insurance

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REFERENCES

www.tata-aig.com

www.hdfcinsurance.com

www.karvy.com

www.sbilife.co.in

www.iciciprulife.com

www.licindia.com

www.avivaindia.com

www.bimaonline.com

KARVY Finapolis Magazine

54
http://www.tata-aig.com/http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.hdfcinsurance.com/http://www.karvy.com/http://www.sbilife.co.in/http://www.sbilife.co.in/http://www.sbilife.co.in/http://www.sbilife.co.in/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.iciciprulife.com/http://www.licindia.com/http://www.licindia.com/http://www.licindia.com/http://www.licindia.com/http://www.avivaindia.com/http://www.avivaindia.com/http://www.avivaindia.com/http://www.bimaonline.com/http://www.bimaonline.com/http://www.bimaonline.com/http://www.bimaonline.com/http://www.tata-aig.com/http://www.hdfcinsurance.com/http://www.karvy.com/http://www.sbilife.co.in/http://www.iciciprulife.com/http://www.licindia.com/http://www.avivaindia.com/http://www.bimaonline.com/


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